Cleaning up the environment is big business

New Mexico Business Journal, August, 1995 by Sharon Niederman

With an estimated 273 clean-up companies in Albuquerque, ranging from corporate giants to one-person consultant shops, clean-up is big business in New Mexico. "At a minimum, it's a $500 million annual business here," says Janet Kerley, president of Lead-Rite, Inc., a company that assists in compliance with Title 10, the federal act that stipulates lead paint regulations. However, the industry, she believes, which arose from the need for compliance with government regulations calling for clean air and water, "is coming into very significant problems."

Clean-up businesses are concentrated in four categories, according to Brian Lematta, an attorney specializing in environmental law. First, there are those who serve industry by monitoring - measuring pollution in groundwater and soil and then proposing ways to remove, isolate, restore, and/or remediate it. Second are those who manufacture equipment to meet federal regulations. A third type develops pollution prevention plans by analyzing systems and showing how to improve them. Finally, there are the legal and technical consultants who wade through pages of laws and regulations, help companies determine their environmental responsibilities, and represent them before agencies and courts in liability claims.

A Shakeout Is Predicted

Lematta predicts there will be "some shakeout" in which some smaller companies will fold and some larger companies may leave the state.

In a field driven by government regulation and dependent on government funding, environmental clean-up specialists are especially sensitive to the current "lean and mean" thinking of Congress and state government. Nearly every big national company is represented in Albuquerque and has DOE contracts at Sandia, Kirtland, Los Alamos and WIPP.

The whole environmental clean-up field is in disarray because of budget cuts, and the field is going to get more competitive," says Scott Hale, marketing director for Geoscience Consultants LTD, the main contractor on the South Valley's San Jose Superfund site. "Everybody's backlog is going away. Environmental companies are not growing. We'll all be lucky to break even in the next year or two."

Based in New Mexico, GCL has a national client base, working with Fortune 500 companies such as GE and USF&G. As an indication of the times, it was recently acquired by BDM. GCL finds market niches by going after the chemical industry "big time," says Hale.

Flat Budgets

His concerns are echoed by many of his local environmental colleagues. Mike Schulz, director of projects at International Technology, says the market is "totally saturated" now, and that budgets "will remain flat." A program manager at Science Applications International Corp., who asked that his name not be used, says the "cutbacks will make it a lot tougher... companies like ours are somewhat concerned. We're going to have to team with other companies, and over the next five years, the impacts will be pretty dramatic."

However, smaller companies, like Stanley Waligora's 23-person shop, Environmental Dimensions, are more optimistic about their future. "The health of the business is very good," says Waligora. "Obviously, there will be less money, therefore, the money will go to those who deliver the best value, the best experience and the best technical capabilities, for the less cost. Our overhead is low, so this bodes well for us.

"Value is coming into the market, so those who survive will be those who provide the best service," he says.

But Optimism Reigns

Most optimistic of all, however, are the single-person consulting firms, many of whom are already highly specialized and "well-niched."

Serving private industry and municipalities, they are the least affected by government spending cutbacks.

For example, Patricia Young, owner of WasteStream Resources, who has 14 years experience working in water and wastewater management, provides monitoring and troubleshooting for the Budaghers New Mexico Outlet Center.

The Clean Water Act and the Safe Drinking Water Act, the new lead and copper rules coming from the state and the storm water monitoring of the runoff from the mall and its parking lot require continual monitoring of water quality. Compliance with state and EPA regulations keep her very busy, and she is flexible enough to be looking toward mastering emerging technology as a means of guaranteeing her future success.

Edgar Thornton, deputy secretary of the New Mexico Department of Energy, voices an upbeat response to the "lean and mean" dictates of the times. "The DOE is saying: cheaper, faster, better." And, he feels, in general, the feds may be more willing to help us by allowing the state more flexibility in decision-making. "This is probably a good time to be in the cleanup business," he says, "because there's more of a willingness to find creative solutions."

Regardless of current political sentiments, most professionals in the field do not anticipate a weakening of those regulations which have been successful over the past 20 years in creating a cleaner environment. However, lack of funds may well determine future success. Jack Clark, Albuquerque operations manager of Jacobs Engineering, says New Mexico's situation isn't much different from that in other states. "Most of the big money required for environmental clean-up is at government, DOE and military facilities." In the current push to "do more with less," he anticipates a "more rational approach to land use planning" that will determine future uses of polluted sites and clean them up only to certain levels, such as industrial rather than residential use. Other highly polluted sites may just have to be fenced off, as funds diminish, he says.