Service Area

Cost Estimation & Analysis

Gradient provides decision makers with a clear understanding of the cost of environmental liabilities and their proper valuation. Our technical and quantitative expertise, in conjunction with our relevant experience in environmental accounting and economics allows us to estimate and evaluate costs for individual sites and multi-site portfolios in a wide variety of contexts. Our work has included developing future cost estimates as well as evaluating past expenditures for matters related to:

  • Multi-party cost allocation and cash-out value estimation
  • Merger and acquisition liability estimation
  • Bankruptcy claims analysis
  • Environmental insurance analysis
  • Environmental reserve estimation
  • Natural Resource Damages Assessment (NRDA)
  • Remedy cost estimation
  • Regulatory disclosure

We also offer quantitative analysis of uncertainties and timing of costs using techniques such as:

  • Decision tree modelingUncertainty analysis
  • Stochastic (Monte Carlo) modeling
  • Benchmarking analysis
  • Cash flow/Net Present Value (NPV) analysis

Sample Projects

Environmental Liability Cost Estimation for Financial Reporting

Gradient prepared environmental liability cost estimates for a portfolio of utility sites. We used probabilistic cost modeling tools to develop a total cost distribution, cash flow forecast, and expected value for each site. Our approach provided a framework to address the uncertainty in estimating contingent liabilities and allowed disclosure of defensible, representative estimates of the liabilities.

Liability Estimation for Property Portfolio Divestiture

Gradient provided technical and strategic settlement support for a property divestiture involving 45 gas compressor stations in Texas and Oklahoma that were impacted with PCBs and petroleum hydrocarbons. We evaluated the investigation and remediation reports, developed reasonable and defensible cleanup levels and costs, participated in face-to-face negotiations, and testified in arbitration hearings on the level of PCB remediation required by regulations.

Environmental Reserve Estimation

Gradient annually estimates the environmental reserves for eight international manufacturing sites on behalf of a large pharmaceutical company. We created an environmental reserve estimation template, tailored to site-specific needs, which was subsequently adopted by the client for use throughout its organization.

Natural Resource Damage Settlement Evaluation

Gradient evaluated the basis for a proposed natural resource damage (NRD) settlement offer at a Great Lakes Superfund site. Using benchmarking analysis techniques, we quantitatively compared NRD settlements at other sediment sites to our client’s offer, and we considered the nature and extent of the ecological harm and our client’s role in releases that caused it.

Remedy Negotiation Support and Liability Cost Estimation

Gradient evaluated the need for and environmental liability costs associated with a US EPA-led, time-critical removal action for a former manufactured gas plant (MGP) site. We identified critical gaps in the site data and suggested a revised investigation and remedial approach. We used probabilistic cost modeling tools to develop a range of cost estimates for the proposed remedial actions.

Our Team