The Nickel Report

Among the flurry of executive actions signed by President Biden last week on inauguration day was a presidential memorandum aiming to revise the regulatory review process.  Titled “Modernizing Regulatory Review,” the memo is directed at the heads of executive departments and agencies and has dual focuses that show the Biden Administration’s commitment to strengthening key tenets of regulatory review while enhancing the focus on equitable and other considerations in the process.  Though it garnered less attention than other actions issued simultaneously, this memo signals President Biden’s ambitious regulatory agenda and may have far-reaching effects that pervade the regulatory process.

On January 15, 2021, the Texas Commission on Environmental Quality (“TCEQ”) received approval to implement the National Pollutant Discharge Elimination System (“NPDES”) program for oil and gas discharges. [1]  Generally, as a result of this approval, applicants for NPDES permits for produced water, hydrostatic test water, and gas plant effluent will only require a single TCEQ authorization rather than authorizations from both the Railroad Commission of Texas (“RRC”) and the U.S. Environmental Protection Agency (EPA) as previously had been required. [2]

Recently certain policy advocates have suggested that the Federal Energy Regulatory Commission (FERC) should attempt to revitalize the Federal Power Act Section 216 “backstop siting” authority as a means of addressing climate change.  Their objective is to facilitate the construction of more long-haul transmission lines from areas with excess renewable generation, so zero-emitting generation can reach more markets.

Incident Response Tip: Responding to a COVID-19 Incident

The COVID-19 pandemic remains a health crisis in the United States and presents many unique challenges for employers.  Many employers have already experienced COVID-19 cases among employees, while others may face such challenges as cases of the virus continue to rise.  Though unique in some respects, the response to a COVID-19 incident has parallels to an industrial accident response, which involves developing and timely deploying the right resources.

Last week, the U.S. Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance (OECA) released its annual enforcement report detailing the results of the past year’s civil and criminal enforcement and compliance efforts.  The report covers the 2020 fiscal year, which ran from October 1, 2019, through September 30, 2020, and thus provides some key insight into the effect of the COVID-19 pandemic on environmental enforcement.

A January 12, 2021 US Department of Justice (DOJ) memorandum extends and provides additional legal analysis to support the government’s increasing drumbeat against settling cases and reducing environmental penalties in recognition of Supplemental Environmental Projects or “SEPs.”  The new memo addresses the limited circumstances under which attorneys in DOJ’s Environment and Natural Resources Division (ENRD), the division of DOJ that represents EPA and other federal agencies in enforcing environmental laws, may include certain mitigation requirements in settlement agreements.  Issued last week by ENRD Assistant Attorney General Jeffrey Bossert Clark on the same day that he announced his departure from the Department, the memo bolsters the previously provided rationale for ENRD’s policy prohibiting SEPs in settlement agreements.  It also distinguishes SEPs from “equitable mitigation,” which the memo defines more narrowly and considers to be both permissible and appropriate.  The memo also lists criteria to guide ENRD attorneys evaluating whether equitable mitigation measures are appropriate in a given civil enforcement case.

Earlier this month, the Supreme Court granted a petition for certiorari in Guam v. United States (No. 20-382), a case involving liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The case gives the Court an opportunity to better delineate the boundary between “cost recovery” claims under section 107, and “contribution” claims under section 113. See 42 U.S.C. §§ 9607, 9613(f). The Court will specifically address what kinds of settlement agreements trigger a section 113 contribution claim and its corresponding three-year statute of limitations.

A flurry of asbestos-related activity in the last weeks of 2020 will require the United States Environmental Protection Agency (EPA) to devote significant regulatory attention to asbestos in 2021.  The incoming Biden Administration will need to address these Toxic Substances Control Act (TSCA) developments, and the scope of that response will determine whether regulatory implications extend beyond asbestos to other chemical substances.

On December 18, 2020, the Texas Commission on Environmental Quality (TCEQ) published notice of its intent to issue a non-rule standard permit for Marine Loading Operations (MLO). [i] The 30 day comment period ends on January 22 and instructions for the submittal of written comments are provided in the notice. A telephonic public meeting will be held on January 21 at 10:00 a.m. Instructions for participation are provided in the notice. In addition, the standard permit section of the TCEQ website includes a background document and a copy of the permit. [ii]

On January 7, the US Fish and Wildlife Service (USFWS or Service) published a final rule providing that the scope of the prohibition of take under the Migratory Bird Treaty Act (MBTA or Act) applies “only to actions directed at migratory birds, their nests, or their eggs,” and does not prohibit incidental take (i.e., take that is not the purpose of an activity).  86 Fed. Reg. 1134 (January 7, 2021).  The rule, which lists an effective date of February 8, 2021, represents the latest in a series of efforts by recent presidential administrations to implement competing interpretations of the MBTA.  If it stands under the incoming administration, this rule will have important implications for the wind energy industry, among other sectors.

The European Commission (EC)–the executive branch of the European Union (EU)–recently proposed a comprehensive regulatory framework for batteries (the proposal). The finalized proposal would replace the existing Battery Directive, which currently covers only the end-of-life stage of batteries. The proposal is the first action taken by the EC under its new Circular Economy Plan and is viewed as a necessary step towards meeting the European Green Deal’s goal of zero net greenhouse gas (GHG) emissions by 2050. The proposal will have significant implications for companies manufacturing and importing batteries (or products with batteries) in the EU and may influence the future policies of the incoming Biden administration.

A December 2020 final rule defining “habitat” could have important consequences for future designations of lands and waters as “critical habitat” under the Endangered Species Act (ESA). Designation of critical habitat by the U.S. Fish and Wildlife Service or National Marine Fisheries Service (jointly, the “Services”) can affect projects that require federal agency permits or funding, because ESA section 7 requires federal agencies to ensure through consultation with the Services that their actions are not likely to adversely modify or destroy designated critical habitat.

On December 16, 2020, the Services adopted, for the first time, a regulatory definition of habitat, as follows:

For the purposes of designating critical habitat only, habitat is the abiotic and biotic setting that currently or periodically contains the resources and conditions necessary to support one or more life processes of a species.