The Nickel Report

In December 2018, an article in this blog flagged a petition for EPA rulemaking under the Toxic Substances Control Act (TSCA) that, if denied, had the potential to set up precedent-setting litigation on citizens’ ability to use the courts to require EPA action under TSCA. Now, nearly a year later, the scenario that article described is coming true. In a challenge to EPA’s denial of that petition, a federal district court is poised to decide what constitutes a petition for issuance of a new rule as opposed to one for amendment of an existing rule—and in the process, to decide when a court may cast aside deference to EPA and undertake its own evaluation independent of the Agency’s record and conclusions.

Going green has gone mainstream. Perhaps nowhere is this more pronounced than in the automotive industry. J.P. Morgan estimates that, by 2030, electric vehicles (EVs) and hybrids will make up 59 percent of the global market share, up from about 1 percent in 2015. What may be the most important feature of the EV revolution is its power source: lithium-ion (Li-ion) batteries. They are not new; they have been powering cell phones and computers for years. What is new is their large-scale use to power automobiles (and, some day, trucks and buses) and significantly reduce emissions. As our colleagues Samuel L. Brown and Lauren A. Bachtel note in an article to be published in the ABA’s Natural Resource & Environment magazine, components of Li-ion batteries include metals (e.g., lithium, cobalt, nickel) that are costly to extract and process. As demand for them increases, pressure to re-use or recycle batteries will increase.

Congress is exploring regulatory action for PFAS as states begin to implement their own regulations for the chemicals. Hunton Andrews Kurth attorneys, Dan Grucza and Chuck Knauss outline approaches companies can take while operating in this changing legal landscape.

As we have discussed previously, the federal Clean Air Act (CAA) addresses what is often termed “interstate transport.” That is the phenomenon in which emissions from factories, power plants, motor vehicles and many other emission sources are transported by prevailing winds across state lines, sometimes over great distances. The CAA looks to states, first and foremost, to include control measures in implementation plans to reduce emissions that travel into other states. The statutory objective is to prohibit “significant contributions” by upwind states to violations of national ambient air quality standards (NAAQS) in downwind states. Although states have primary responsibility, EPA sometimes has invoked its CAA authority to establish federally enforceable requirements to address significant contributions when it concludes upwind states have not taken sufficient steps. In 2016, EPA adopted its most recent set of regulatory interstate transport controls in a rulemaking action called the “Cross-State Air Pollution Rule Update”—or the “CSAPR Update” for short. On September 13, the US Court of Appeals for the DC Circuit issued a decision in closely-watched litigation involving challenges to the CSAPR Update. (The case is Wisconsin v. EPA, No. 16-1406.) While upholding this EPA regulation in most respects, the court ruled in favor of a challenge that concerns the timing of upwind-state emission controls.

Which Waters of the US (WOTUS) rule applies to my project? For four years, that has been a recurring question with a complicated, ever-changing answer. The 2015 WOTUS Rule promulgated by the Obama administration was challenged almost immediately, and, because of various district court injunctions, only 22 states are operating under the 2015 WOTUS Rule, while 27 states are subject to the pre-2015 Rule regime; the status of the rule in New Mexico is unclear. Yesterday, EPA and the US Army Corps of Engineers (together, the Agencies) signed a pre-publication version of the highly anticipated repeal of the 2015 WOTUS Rule, which will place the entire country under the pre-2015 Rule regime while the Trump administration works to complete its replacement WOTUS definition.

The South Coast Air Quality Management District’s (SCAQMD or the District) Regional Clean Air Incentives Market (RECLAIM) made history as California’s first emissions cap-and-trade program. But the District’s decision to sunset the program has resulted in significant uncertainty surrounding RECLAIM’s transition for local communities and industry alike.

Widely acclaimed at its 1993 inception, the program was intended to promote more efficient emissions reductions by allowing facilities to meet their annual cap either by adopting pollution controls directly or by purchasing RECLAIM trading credits (RTCs) from other facilities able to install controls at lower cost and achieve emissions below their caps. In its early years supporters praised RECLAIM as a success, pointing to significant reductions across the South Coast Air Basin. But in more recent years, the US Environmental Protection Agency (EPA) and other stakeholders criticized RECLAIM as falling short of expectations, pointing to periods of RTC price spikes reducing the program’s coverage and a subsequent glut of RTCs from plant closures that critics claim lowered the incentive for pollution reductions at remaining RECLAIM facilities.

Despite the many benefits of PFAS, there continues to be a rise in regulatory action, legal implications and environmental, health and safety concerns related to the “forever chemicals.” Hunton Andrews Kurth attorneys Dan Grucza and Chuck Knauss give an inside look into the changing regulatory landscape of PFAS.

The Texas Commission on Environmental Quality (TCEQ) is moving forward with steps necessary to seek delegation of the federal National Pollutant Discharge Elimination System (NPDES) permitting program for produced water discharges. In doing so, Texas will be joining similar efforts underway or under consideration in the neighboring states of Oklahoma and New Mexico. Should EPA delegate such NPDES authority and separately take action to address the restrictive federal regulatory framework now in effect for onshore produced water discharges, this would result in streamlined and expanded beneficial reuse options for produced water in the key oil and gas producing states in the country.

The US Environmental Protection Agency (EPA) recently released its latest National Compliance Initiatives (NCIs), which aim to focus the Agency’s enforcement arm, the Office of Enforcement and Compliance Assurance (OECA), on areas of significant environmental violations and other opportunities for the greatest environmental benefit through increased compliance with environmental laws. In a memorandum issued June 7, 2019, enforcement chief Susan Parker Bodine advised the Agency’s regional offices of the NCIs for upcoming fiscal years 2020 through 2023.

A new decision curtails agency discretion to approve total maximum daily loads for impaired waterbodies and sets a precedent that may lead to more stringent National Pollution Discharge Elimination System (NPDES) permit limits.

Total maximum daily loads (TMDLs) have been described as “pollution budgets” for impaired waterbodies. A permitting authority developing a TMDL typically considers all known sources of the pollutant at issue (including contributions from point and non-point sources) as well as the relevant characteristics of the waterbody (such as flow rates) and determines how much pollutant the waterbody can receive without exceeding applicable water quality standards. Once a TMDL is adopted for a specific pollutant that is adversely affecting a waterbody, the permitting authority (either a delegated state or EPA) will use the TMDL to derive NPDES permit limits for facilities that are sources of the pollutant.

The Endangered Species Act increasingly plays a larger role in environmental law and the federal permitting process for infrastructure projects. Hunton Andrews Kurth Partner Kerry McGrath and Associate Brian Levey give an inside look at the complex process of obtaining federal authorization for “take” of endangered species.

On June 26, 2019, the Supreme Court issued its decision in Kisor v. Wilkie, 139 S. Ct. 2400 (2019), which presented the question of whether the Court should overrule the Auer doctrine, named after the 1997 Supreme Court case Auer v. Robbins. The Auer doctrine rests on the premise that agencies have more expertise on their own regulations and are therefore in a better position than courts to interpret them. Under the doctrine, courts generally defer to an agency’s reasonable readings of its own “genuinely ambiguous” regulations. In a 5-4 decision, the Court declined to abandon the Auer doctrine on grounds of stare decisis but outlined important limitations on the scope and applicability of that doctrine.

Guarding confidential or sensitive information is a longstanding tradition that transcends daily life. From the pinky-swearing days of childhood (to prevent your parents from finding out you rode your bike beyond their imposed boundary), to the fourth down play when your team is one point down with three seconds left on the clock, to the unique, complex chemical composition of a lifesaving drug, the concept of secrecy has roots in just about everything we do. In the business world, secrets are routinely kept to protect market share, privacy of customers, technology or for any number of other legitimate business-related concerns. Indeed, disclosure of confidential information can pose a real threat to a business’s vitality.

On May 15, 2019, EPA released its draft Study of Oil and Gas Extraction Wastewater Management under the Clean Water Act (Draft Study). The Draft Study addresses the results of an extensive review initiated last year to evaluate the management of oil and gas wastewaters generated at onshore facilities and to assess the need for additional discharge options for onshore oil and gas wastewater under the Clean Water Act (CWA).^[1] Although EPA has not yet adopted any recommendations for regulatory action, it is evident that EPA is continuing to take a hard look at the merits of authorizing broader discharges of produced water to surface waters than those currently allowed for onshore discharges under the CWA effluent guidelines (and generally referred to as the zero discharge standard).^[2] See 40 CFR Part 435, Subpart C. EPA is now requesting additional public comment on the Draft Study by July 1 of this year with the goal of finalizing it and determining next steps this summer.

The US Environmental Protection Agency (EPA) has recently determined that no revisions to existing RCRA Subtitle D regulations for the management of oil and gas wastes are necessary. This conclusion follows EPA’s completion of an extensive review to fulfill the requirements of a Consent Decree entered by the US District Court for the District of Columbia that settled litigation filed by certain environmental organizations over EPA’s alleged failure to update its rules for management of oil and gas wastes. EPA’s findings, released on April 23, 2019, are set forth in a report titled, Management of Oil and Gas Exploration, Development and Production Wastes: Factors Informing a Decision on the Need for Regulatory Action (Report). This means that, at least for now, EPA’s longstanding position on regulation of oil and gas wastes remains unchanged.

In a lawsuit recently filed in the Southern District of New York, a group of environmental plaintiffs allege that, for nearly 30 years, the federal Environmental Protection Agency (EPA) has failed to develop worst-case hazardous substance discharge, or spill, regulations under Section 311(j)(5) of the Clean Water Act (CWA). This suit comes on the heels of EPA’s June 2018 proposal not to develop a general hazardous substance spill program under CWA § 311(j)(1) (a provision related to the Spill Prevention, Control and Countermeasure (SPCC) Rule well known to industrial facilities storing oil) because of the many other programs EPA believes already regulate the prevention and containment of hazardous substance spills. That proposal is expected to be finalized in August 2019 under a 2016 consent decree in which EPA agreed to evaluate the need for general rules governing the prevention and containment of hazardous substance spills. The new lawsuit narrowly focuses on worst-case hazardous substance spills and the need for corresponding facility response plans.

In Michigan v. EPA, 135 S. Ct. 2699 (2015), the Supreme Court held that the cost of regulation is an essential factor that EPA must consider when deciding whether to regulate.  Id. at 2707.  According to the Court, “[a]gencies have long treated cost as a centrally relevant factor when deciding whether to regulate.”

In subsequent regulatory proceedings, however, EPA has offered different views as to what Michigan’s cost mandate means.  At the end of the Obama Administration, EPA said Michigan only means that it need determine whether the costs of a regulatory action are “affordable” or can be “absorbed” by the regulated industry.  81 Fed. Reg. 24,421.  More recently, EPA has said that its earlier statement “does not meet the statute’s requirements to fully consider costs,” and that the Supreme Court’s decision in Michigan requires that it “meaningfully consider cost within the context of a regulation’s benefits.”  84 Fed. Reg. at 2675.

Over the past several decades, significant tension has developed between the federal role in overseeing and authorizing certain types of energy infrastructure projects and states' roles in regulating water quality under the cooperative federalism structure of the Clean Water Act (CWA or the Act). This tension has played itself out in various contexts, but the most pronounced in recent years has been the battle over CWA Section 401 water quality certifications for energy infrastructure projects, in particular interstate natural gas pipelines.

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On Wednesday, April 10, President Trump signed an Executive Order (EO), titled Promoting Energy Infrastructure and Economic Growth, that requires the US Environmental Protection Agency (EPA) and other federal agencies to undertake a series of regulatory actions to clarify the Clean Water Act (CWA) § 401 water quality certification (WQC) process. CWA § 401 provides states with the opportunity to evaluate the potential water quality impacts from discharges of proposed projects by certifying whether the discharge will comply with applicable water quality standards. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of a request for certification, waiver is automatic. 33 U.S.C. § 1341(a). A handful of states have relied on this process to thwart the development of energy infrastructure projects, either by denying certification due to concerns unrelated to water quality (such as opposition to hydraulic fracturing, climate change concerns, etc.) or by ignoring the statutory time period to reach a determination.

State environmental regulators are beginning to develop plans designed to meet more stringent air quality standards under the Clean Air Act (CAA), including standards to protect against unhealthful levels of ground-level ozone. In doing so, many states are looking more closely at a factor that contributes to their air quality problems but that they lack any authority to address: the phenomenon of air pollution carried by prevailing winds into their jurisdictions from emission sources located not only outside their own state borders but outside the US itself. The issue of international contributions to air quality concerns has gained currency in part due to the many challenges states face in meeting the stringent nationwide air quality standards for ground-level ozone that the US Environmental Protection Agency (EPA) adopted in 2015.

Everyone can agree that environmental assessments should be based on the best science. The “best” science, however, is an ever-advancing standard. Despite budget uncertainties and other hurdles, EPA scientists often pioneer new methods of assessment capable of detecting smaller and smaller increments of environmental impact. Although it may take years for EPA to develop and demonstrate a new method, stakeholders may benefit from paying attention to the development process and seeking opportunities to participate in it.

Last week, the US Environmental Protection Agency (EPA) released its annual enforcement results for the 2018 fiscal year (ranging from October 1, 2017, to September 30, 2018). The report, prepared by EPA’s Office of Enforcement and Compliance Assurance (OECA), highlights the results of the agency’s civil and criminal enforcement of the nation’s federal environmental laws over the past year. The 2018 results mark the first full fiscal year of enforcement results, including inspections and compliance evaluations, under the Trump administration. A statement in the report from Susan Bodine, the Assistant Administrator for OECA, summarizes EPA’s enforcement priorities, explaining, “[i]n fiscal year 2018, we continued our focus on expediting site cleanup, deterring noncompliance, and returning facilities to compliance with the law, while respecting the cooperative federalism structure of our nation’s environmental laws.”

With the federal government shutdown finally over after five weeks, the long-term effects are likely to have a lingering impact on regulatory and permitting programs for months to come. Even those federal agencies that were fully funded during the shutdown, such as the US Army Corps of Engineers (Corps), were stymied in their ability to undertake routine day-to-day operations during the lapse in appropriations. This post highlights two examples of the shutdown’s implications for regulatory reform and permitting in the natural resources arena.

According to the dictionary, a phrase is “ambiguous” if it has more than one meaning.
Chevron[1] is frequently cited for the proposition that the presence of “ambiguity” gives an agency the authority to interpret the statute to eliminate the ambiguity. A better view of Chevron is that only the Courts may resolve statutory ambiguity through interpretation. When faced with statutory terms that may be given more than one meaning, courts must determine, applying canons of statutory construction, what Congress has resolved, what Congress has given the Agency discretion to resolve, and what ascertainable standards have been established by Congress to govern the exercise of discretion by the Agency. In other words, Chevron contemplates that the Court declare what the law requires, including the scope of discretion afforded an agency to make policy choices that give content to broad statutory terms.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly referred to as the Superfund law, directed the United States Environmental Protection Agency (EPA) to create a list of the country’s most hazardous waste sites. Sites are proposed to be placed on this “National Priorities List” (or NPL as it is known to environmental law professionals) if they exceed a certain risk score, or Hazard Ranking, and added to the List if the ranking is confirmed after a formal notice-and-comment process. A detailed set of regulations called the National Contingency Plan (NCP) governs how sites placed on the NPL will be investigated, alternative remedies evaluated, and a final remedy selected and then implemented. The NPL, the NCP, and various EPA guidance memoranda have established what practitioners acknowledge is an imperfect but generally workable process in which EPA and states work with potentially liable parties to manage cleanups at NPL sites.

Last week, the US Environmental Protection Agency (EPA) and US Army Corps of Engineers (Corps) (together, the Agencies) issued a long-awaited proposal to redefine the “waters of the US” (WOTUS) subject to federal regulation and permitting requirements under the Clean Water Act (CWA). The reach of the CWA is notoriously unclear, but knowing which areas on your property are jurisdictional and will require permits is critical to project planning and timelines. If finalized, the proposed rule would replace the Obama administration’s contentious 2015 WOTUS Rule and eliminate the regulatory patchwork that currently exists as the 2015 WOTUS Rule is being implemented in only certain parts of the country.

Nearly two years into the current administration, many questions remain regarding the Environmental Protection Agency (EPA) and US Department of Justice’s (DOJ) approach to environmental enforcement. EPA and DOJ have both issued various policies that we have covered in past blog posts that provide some level of insight on priorities and procedures, but a better assessment can only be made by looking at cases initiated, referred, resolved or concluded after a trial.

Can permitted, well-operated septic systems at vacation resorts give rise to liability under the Clean Water Act (CWA)? That is the question an Environmental Non-Governmental Organization (eNGO) is asking a federal district court to decide in two cases pending in Massachusetts federal court.

Because of their widespread environmental presence, persistence and bioaccumulation, the group of substances known as PFAS have been described as a “Perfect Storm” of liability. The number of plaintiff’s suits concerning PFAS have spiked in the last few years. Also, EPA faces increasing bipartisan calls from Congress to adopt new drinking water standards and cleanup levels. In the interim, states are filling the void. In October 2017, the New Jersey Department of Environmental Protection  announced a maximum contaminant level (MCL) of 14 parts per trillion for PFOA. Some NGO’s have called for levels as low as 1 part per trillion.

A pending petition for rulemaking under the Toxic Substances Control Act (TSCA) could represent the latest test of the scope of TSCA’s citizen petition provisions. Denial of this petition would tee up a precedent-setting court battle addressing citizens’ ability to force EPA to exercise its TSCA section 8 authority to require chemical data reporting. And while the petition on its face is focused on requiring additional information collection, it could have important implications for EPA’s implementation of TSCA’s amended provisions regarding regulation of existing chemicals under section 6.

With produced water volumes on the rise as a result of the growth in oil and natural gas production and various areas of the country experiencing water scarcity, states and stakeholders are increasingly looking for ways to reuse, recycle and beneficially use waters originating from the oil and gas industry. Two recent initiatives are likely to significantly advance policy decisions related to produced water management.

In recent years there has been an explosion in the availability of small, low cost, hand held (or drone mounted) air quality monitoring devices or air sensors. Although the most likely near term applications may be community groups seeking information on potential industrial impacts, even individual consumers may have use for such devices to monitor the quality of indoor air. The biggest hurdle to the effectiveness, and eventual integration into the realm of regulatory compliance, of these devices is the lack accepted standards for evaluating the quality of the data they produce. What role will EPA play in that?

EPA has finalized a regulation you can live with, but someone dissatisfied with that result has sued the Agency.  Should you intervene to defend EPA’s action?  Is it worth it?  Does the court really pay attention to the arguments of an intervenor?  A recent decision by the D.C. Circuit in Masias v. EPA, No. 16-1314 (D.C. Cir. Oct. 19, 2018), illustrates the value of participation as a Respondent-Intervenor in these circumstances.

The U.S. Court of Appeals for the Second Circuit in July issued a long-awaited decision in the case Cooling Water Intake Structure Coalition v. U.S. Environmental Protection Agency (EPA), upholding the EPA’s 2014 Rule establishing requirements pursuant to Clean Water Act (CWA) section 316(b) for cooling water intake structures (CWIS) at existing facilities. The court also upheld the biological opinion (BO) and incidental take statement (ITS) issued by the U.S. Fish and Wildlife Service and National Marine Fisheries Service (the Services) on the 2014 Rule.

The Second ...

This summer, California’s State Water Resources Control Board (State Water Board) adopted amendments to the Underground Storage Tank (UST) Regulations (California Code of Regulations, title 23, division 3, chapter 16). The new regulations, which become effective on October 1, 2018, impose new design and construction, upgrading, monitoring, notification, testing, inspection, recordkeeping, training and reporting requirements on UST owners and operators in California. The State Water Board’s purpose in amending these regulations was essentially two-fold: (1) to effectively make the California UST regulations just as stringent, and consistent with, the federal UST regulations (part 280 of 40 Code of Federal Regulations); and (2) to reduce the risk of groundwater contamination resulting from UST releases.

The phrase “interstate transport” conjures images of planes, trains and trucks carrying people and goods cross-country. But, under the federal Clean Air Act (CAA), the term is often used to refer to interstate air pollution—emissions from factories, power plants, motor vehicles, refineries and other sources that are transported by prevailing winds across state lines, sometimes over hundreds of miles. The interstate transport phenomenon often has posed for the US Environmental Protection Agency (EPA) what the Supreme Court has called “a thorny causation problem: How should EPA allocate among multiple contributing upwind States responsibility for a downwind State’s excess pollution?” EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1604 (2014). EPA’s efforts to address this issue have yielded, over the last two decades, a series of complex federal regulatory programs imposing increasingly stringent controls on emissions in most states in the eastern half of the country—first the “NOx SIP Call” rule in 1998, then the Clean Air Interstate Rule in 2005, followed by the Cross-State Air Pollution Rule (CSAPR) in 2011 and, most recently, the 2016 “CSAPR Update” rule. Now, however, EPA, while vigorously defending the CSAPR Update rule against pending litigation challenges, is signaling a fresh approach for potential future interstate transport regulation, an approach that may involve greater deference to states’ analyses and determinations and that may eschew additional broad regulatory mandates imposed by EPA.

As a former regulator (both as an inspector and an attorney, ensuring compliance and enforcing violations) in the environmental law enforcement space, I read EPA Assistant Administrator Susan Parker Bodine’s recent memorandum entitled Transition from National Enforcement Initiatives to National Compliance Initiatives with great interest. Having numerous facility inspections and enforcement settlements under my belt, I have seen firsthand the interplay between compliance and enforcement. To be sure, the threat of enforcement and the deterrence factor associated with resolving an enforcement action are powerful tools. But, if the end goal is compliance with environmental laws, does the road leading there have to be so scary for the regulated community? Whereas many regulated parties commonly see EPA and other environmental agencies as enforcement machines, this proposed transition to a more compliance-oriented approach may be not only a welcome change, but also an appropriate one that will actually improve compliance. After all, Ms. Bodine’s office is entitled the Office of Enforcement and Compliance Assurance (OECA). Isn’t it a good idea to have an equal focus on helping with compliance and on enforcement? And isn’t the point to maximize compliance? Shouldn’t OECA be striving for a world in which its “enforcement” arm goes out of business because it has “assured compliance?” That may be too much for the regulated community to hope for, but the notion of “compliance” initiatives over “enforcement” initiatives is not a bad way to start.

Weeks after a federal judge called the science behind the alleged carcinogenicity of glyphosate “shaky,” a California state court jury hammered Monsanto with a $289 million verdict, connecting a former groundskeeper’s non-Hodgkin’s lymphoma to his exposure to the Roundup^® chemical. The August 10, 2018 verdict in Johnson v. Monsanto Co., No. CGC16550128 (California Superior Court, County of San Francisco)—which included $250 million in punitive damages—was the first in the nearly 8,000 Roundup-related cases currently pending against Monsanto, many of which are consolidated in multidistrict litigation in California federal court. However, adding another layer of confusion surrounding the use of glyphosate, a federal court in California recently decided that the state could not require Proposition 65 cancer warnings on products containing the chemical. The intense publicity surrounding the verdict has left retailers whose products contain ingredients that might have been treated with glyphosate wondering whether their products may be targeted next.  

Our regulatory state is founded on the principle that regulated parties must have notice of their compliance obligations. Laws or regulations that fail to give fair notice violate due process and cannot give rise to liability. See, e.g., Gen. Elec. Co. v. EPA, 53 F.3d 1324 (D.C. Cir. 1995).

A notoriously unclear regulatory program addresses circumstances under which an existing facility triggers the Clean Air Act’s (CAA) “new source review” (NSR) program and its associated control technology and air quality review requirements. Over the past two decades, courts have concluded that the same words in the regulations have diametrically opposed meanings. Compare Nat’l Parks Conservation Ass’n, Inc. v. TVA, No. 3:01-CV-71, 2010 WL 1291335 (E.D. Tenn.Mar. 31, 2010) (boiler tube replacement is “routine” repair and replacement) with United States v. Ohio Edison Co., 276 F. Supp. 2d 829 (S.D. Ohio 2003) (boiler tube replacement is not “routine” repair and replacement). Indeed, after addressing the application of NSR to an industrial facility on two occasions, one three-judge panel in the Sixth Circuit produced five different opinions advancing three different interpretations of key provisions of the rules. See United States v. DTE Energy Co., 711 F.3d 643 (6th Cir. 2013); United States v. DTE Energy Co., 845 F.3d 735 (6th Cir. 2017). Disagreement among judges over the meaning of a regulation is objective evidence of a rule’s failure to provide fair notice of its compliance obligations.

This summer, EPA sparked public outrage with its proposed “significant new use” rule, or SNUR, addressing certain commercial uses of asbestos. Publications like Rolling Stone, Newsweek and The Daily Beast criticized EPA for loosening its regulations to pave the way for asbestos to be reintroduced to the market, allowing asbestos-containing construction materials to be used in homes and other buildings again for the first time in decades. National figures like Senator Brian Schatz and Chelsea Clinton drew attention to the proposal while condemning the Agency for increasing public exposure to this well-known carcinogen.

There’s just one issue: EPA’s proposed action does the opposite of what these critics claim. The SNUR would impose substantial new prohibitions on the listed uses of asbestos—which currently are not regulated by EPA at all—while giving EPA the necessary legal “hook” to restrict or even ban these uses outright in the unlikely event that a company actually tries to resume them.

How can news reports have gotten it so backward?

In May, EPA issued its 2016 Final Effluent Guidelines (ELG) Program Plan, which is EPA’s first screening step to selection of industries for possible revision or development of technology-based limits on wastewater discharges (i.e., effluent limitations guidelines and standards (ELGs)). 83 Fed. Reg. 19281 (May 2, 2018). EPA releases a new ELG plan every two years, and the process bears watching because it cuts across all industry types (there are 59 industries with final ELGs in place) and provides some perspective on EPA’s assessment of pollutants of concern and emerging technologies to address those pollutants.

On July 9, President Trump announced Judge Brett Kavanaugh of the Court of Appeals for the DC Circuit as his nominee to replace retiring Justice Anthony Kennedy on the Supreme Court. Kavanaugh has developed an extensive history of jurisprudence during his twelve-year tenure on the DC Circuit. And, given the DC Circuit’s heavy administrative law caseload, Kavanaugh has authored numerous opinions involving environmental law. The upcoming confirmation process is sure to include a focus on Kavanaugh’s robust environmental and administrative law record and what it might portend for the future.

The United States Environmental Protection Agency (EPA) concluded a series of eight Superfund Listening Sessions between May 21 and June 18 to explain a number of initiatives to reform the Superfund program and promote the cleanup and redevelopment of contaminated sites. The PowerPoint presentations used in these sessions can be accessed here. While informative, the sessions and PowerPoint slides used by the speakers also raise some interesting questions about potential changes in the remedy selection process and the restoration of damaged natural resources.

As the spotlight continues to focus on the City of Flint and its efforts in response to its public health crisis four years ago, water utilities seeking to avoid similar liability (and notoriety) should study Flint as a veritable textbook on potential liability under the federal Safe Drinking Water Act (SDWA), the US Constitution, and state law. Part 1 of this series noted that a spate of civil lawsuits and criminal charges were filed in the aftermath of Flint. These cases are still unfolding in the courts.

When most Americans think about the traditions of presidential transitions, they recall the oath of office, the prior president and family leaving the White House, the inaugural parade, the balls with their beautiful gowns and sharp tuxedos, and more. What they more than likely don’t think about, much less even know about, are other happenings in the White House and in the agencies that run our government. While the peaceful transfer of power is a hallmark of the American political system, it is not without controversy, particularly where the outgoing president is a member of a different political party with remarkably different political views than the incoming commander in chief.

A second district court has agreed that challenges to the 2015 Waters of the United States (WOTUS) Rule are likely to succeed on the merits. The US District Court for the Southern District of Georgia issued an order on June 8 enjoining the WOTUS Rule in 11 states. Georgia v. Pruitt, No. 2:15-cv-00079 (S.D. Ga. 2018). The rule was previously enjoined by the US District Court for North Dakota in 13 states. North Dakota v. U.S. EPA, 127 F. Supp. 3d 1047 (D.N.D. 2015). The US Environmental Protection Agency (EPA) and the US Army Corps of Engineers (Corps) (“the Agencies”) recently promulgated a new applicability date for the 2015 WOTUS rule (Applicability Rule), preventing its implementation until February 2020, but there have been several lawsuits challenging the Applicability Rule. Now, regardless of the outcome of challenges to the Applicability Rule, the 2015 Rule cannot be applied in 24 states[1] until a court issues a final decision on the merits, either upholding or invalidating the Rule, or the Agencies finalize a repeal and/or replacement of the 2015 Rule.

One of the first lessons that most Superfund practitioners learn is that it is no easy task to prevent EPA from placing a site on the National Priorities List. The NPL is the “list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States.”[1] It “contains the most serious uncontrolled or abandoned hazardous waste sites.”[2] There are nearly 1,350 sites on the NPL today. Since the first list was issued in 1980, only 399 – or, on average, ten per year – have been deleted. That is only two per state in a decade (on average). The pace of EPA’s decision-making on proposed deletions is protracted, if not glacial. And looking to the courts for relief from the stigma of having a site on the NPL rarely bears fruit.

It therefore surprised and may even have delighted some practitioners when the DC Circuit decided, in Genuine Parts Company v. EPA, No. 16-1416 (D.C. Cir. May 18, 2018), to overturn EPA’s decision to list the West Vermont Drinking Water Contamination Site on the NPL.

2018 is turning out to be a banner year for nationally applicable developments—both judicial and administrative—with regard to National Ambient Air Quality Standards (“NAAQS” or “Standards”) for ozone. As the year began, EPA was proceeding with implementation of the ozone NAAQS that it set in 1997 and 2008 in accordance with a rule that it had promulgated in 2015 describing requirements for State Implementation Plans (SIPs) and the transition from the 1997 NAAQS to the more stringent 2008 one. 80 Fed. Reg. 12264 (Mar. 6, 2015) (2015 SRR). The Trump administration was reviewing the prior administration’s 2015 decision further tightening the NAAQS to determine whether those more stringent NAAQS should be maintained, modified or reconsidered. To allow the Trump administration to complete that review, the DC Circuit placed in abeyance litigation challenging the 2015 Standards as either too stringent or too lenient. Murray Energy v. EPA, No. 15-1385 (D.C. Cir. Oct. 26, 2015). EPA had designated most of the country attainment/unclassifiable for the 2015 NAAQS, but had not made designations for other areas. 82 Fed. Reg. 54232 (Nov. 16, 2017).

The Administration is considering substantial changes to the current regulatory approach to reducing exposure to lead in drinking water. The US EPA (EPA) is assessing long-term revisions to the Lead and Copper Rule (LC Rule), a Safe Drinking Water Act (SDWA) regulation that seeks to protect public health by minimizing lead and copper in drinking water, primarily through corrosion control measures. Lead contamination in drinking water has been the subject of national scrutiny in the aftermath of the public health crisis in Flint, Michigan, where high levels of lead leached from aging pipes into the city’s drinking water after the city switched its source of drinking water to the Flint River, the quality of which was more corrosive than the prior source. Congress eventually banned lead pipes in new construction with amendments to the SDWA in 1986, but in a 2016 survey, the American Water Works Association estimated that 6 million lead-containing service lines continue to distribute drinking water to 15-22 million people in the United States. As state and local governments nationwide confront similar challenges, EPA appears poised to address the legacy of lead infrastructure through updates to the LC Rule. In January 2018, EPA Administrator Scott Pruitt pledged to update the LC Rule as part of his “war on lead” in drinking water.

On May 9, the White House released its Spring 2018 update to EPA’s regulatory agenda. Agency watchers quickly dove into the document to check the status and timelines for high-profile rulemakings and gain insights on the Trump administration’s priorities. But aside from any revelations about the administration’s own initiatives, this latest document was also notable for showing just how much EPA’s regulatory agenda can be driven by forces outside of the executive branch.

Recently, the Trump administration’s Assistant Administrator for Enforcement, Susan Parker Bodine, clarified the role of EPA’s Next Generation Compliance initiative in civil enforcement settlements by announcing that (contrary to the prior administration’s suggestion) there is “no default expectation” that “innovative enforcement” provisions will routinely be sought as injunctive relief in civil settlements. Does this suggest a broader reassessment of the “Next Gen” program by EPA?

In April 2015, the United States Environmental Protection Agency issued a final rule governing the control and management of coal combustion residuals (CCR) in surface impoundments used to treat those residuals. In general, CCR consists of materials that result from the combustion of coal at coal-fired electric utility plants. As part of its rule, EPA required operators to submit initial closure plans for impoundments and post them on a publicly available website in November 2016. Under the rule, these initial closure plans must contain information related to the method of closure, and are subject to change as operators gather additional information.

The New Source Review (NSR) Program of the Clean Air Act (CAA) requires large new plants (in the parlance of the Act “major” “stationary sources”) to go through an extensive, time consuming and expensive review and permitting process prior to construction. Such sources are required through these permits, among other requirements, to install the best available control technologies (BACT) to reduce levels of specific regulated pollutants. The NSR program also applies to existing facilities if they are modified in substantial ways and if, as a result, emissions increase by significant amounts (these are known as “major modifications”).

The Trump Administration has pursued an ambitious goal to reduce federal regulation. The administration has slowed the promulgation of new rules, and in early 2017 a bevy of late-term Obama-era rules still subject to the Congressional Review Act were overturned by the GOP Congress.

As we have noted previously (An Opportunity for a New Federal-State Relationship Under the Regional Haze Program, July 17, 2017; A New Perspective on Regional Haze Regulation?, February 14, 2017), the US Environmental Protection Agency (EPA) recently signaled a new openness to recognizing state prerogatives and flexibility in implementing the regional haze program under the Clean Air Act (CAA). That program addresses impairment of visibility in the skies over protected national parks and wilderness areas that is attributed to widespread haze resulting from emissions to the air from varied sources.

While still early in the new administration, emerging enforcement trends are beginning to indicate that EPA and the U.S. Department of Justice (DOJ) will continue to pursue cases involving fraud in the Renewable Fuel Standard (RFS) program. We noted last summer that EPA and DOJ have pursued numerous enforcement actions against renewable fuel producers and importers that generated invalid Renewable Identification Numbers (RINs), which are the “currency” of the RFS program. Although it is reasonable to assume the vast majority of program participants comply with EPA’s regulations, the program has suffered from high profile cases of fraud and abuse requiring federal enforcement, including criminal prosecutions. Recent cases and statements by DOJ and EPA officials show that federal prosecution of RFS fraud, particularly that involving multi-state schemes, will continue. And RFS fraud cases may even occupy a larger portion of EPA’s enforcement bandwidth as EPA gives greater deference to states in enforcement of delegated programs like the Clean Water Act, Clean Air Act, and Resource Conservation and Recovery Act.

On February 7, 2018, US Environmental Protection Agency (EPA) Administrator Scott Pruitt signed a proposed rule to establish user fees to defray EPA’s costs of administering its responsibilities under the Toxic Substances Control Act (TSCA), as amended by the 2016 Frank Lautenberg Chemical Safety for the 21^st Century Act (Lautenberg Act). EPA estimates in the proposed rule that it will collect about $20.05 million per year in user fees, not counting any user fees associated with manufacturer-requested risk evaluations, which would range from $1.3 million to $2.6 million per evaluation.

The US Environmental Protection Agency (EPA) released its annual enforcement and compliance results for the most recent fiscal year (FY) on February 8, 2018. The results, which cover the period from October 1, 2016, to September 30, 2017, are the Trump administration’s first annual statistical report on federal environmental enforcement. The results provide insight into the administration’s focus and priorities for enforcement.

A year ago, the regulated community and its environmental lawyers recognized that the Trump administration would bring a new approach to the enforcement of federal environmental laws, but the nature of the specific changes remained nebulous. While it is still early to speculate on the long-term impacts to enforcement that may be implemented by the administration, events over the prior year have brought the new administration’s enforcement philosophy and priorities into greater focus. This post reviews some of the key personnel, policy, and budget announcements made during President Trump’s first year in office that will shape the future of federal environmental enforcement by the Environmental Protection Agency in the coming years.

We are serious.  And don’t call us Shirley.

So EPA sent your company a dreaded Request for Information (“RFI”).  What do you do now?  If you’ve never been through this process before, you likely have a lot running through your head:

• Did our company do something wrong?  Is my company under investigation?
• Is this EPA’s way of asking for my help to improve its regulations?
• Do I have to answer this?
• How can I possibly compile all this information in 30 days?
• Do we need a lawyer to help us respond?
• What about confidential information?  EPA is asking for customer or supplier information.  Isn’t that private?

On Monday, the Trump Administration released an ambitious legislative proposal that aims to stimulate $1.5 trillion in new infrastructure investment over the next 10 years, expedite the federal permitting process, address rural infrastructure needs, and prepare the American workforce for the future. To accomplish those goals, the proposal includes aggressive recommendations to streamline key federal environmental review and permitting processes for infrastructure projects. In addition to traditional forms of infrastructure, such as roads, bridges, and airports, the Legislative Outline for Rebuilding Infrastructure in America addresses drinking and wastewater systems, energy infrastructure, veterans’ hospitals, and Brownfields and Superfund sites.

On January 22nd, the Supreme Court issued a unanimous (9-0) decision, authored by Justice Sotomayor, agreeing with industry groups, some eNGOs, and many states, that the district courts have jurisdiction over challenges to the 2015 Waters of the U.S. (WOTUS) Rule. Nat’l Ass’n of Manufacturers v. Dept. of Defense, et al., No. 16-299 (Jan. 22, 2018). The Court wholly rejected the government’s claim that the WOTUS Rule is subject to exclusive appellate court jurisdiction under the Clean Water Act’s (CWA) judicial review provision and confirms that current and future challenges to the WOTUS Rule must be brought in district court. By reversing the Sixth Circuit decision which found that the CWA vests the federal courts of appeals with exclusive jurisdiction over challenges to the WOTUS Rule, the Supreme Court set in motion proceedings that will likely result in the lifting of the Sixth Circuit’s nationwide stay of the 2015 WOTUS Rule.

On November 16, 2017, the D.C. Circuit heard oral argument in the cases challenging EPA’s 2012 rule allowing states to rely on compliance with the Cross-State Air Pollution Rule (CSAPR) to satisfy electric generating units’ “best available retrofit technology” (BART) requirements for emissions of nitrogen oxides and sulfur dioxide under the Clean Air Act (CAA). The cases are UARG v. EPA, No. 12-1342­ and consolidated cases (D.C. Cir.).

On Thursday, the Senate confirmed Susan Parker Bodine as the Assistant Administrator of the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance (“OECA”).  OECA, the chief enforcement arm of EPA, coordinates the agency’s enforcement of numerous federal environmental laws within its authority.

This is the second leadership role at EPA for Bodine, who brings significant experience in environmental law to the position.  She formerly served as Assistant Administrator for the agency’s Office of Solid Waste and Emergency Response—now called the Office of Land and Emergency Management—under President George W. Bush.  Before returning to the EPA, Bodine served as Chief Counsel for the Senate Environment and Public Works Committee, from 2015 until this August.  She also served as Counsel to the House Transportation and Infrastructure Committee, and was engaged in private legal practice.

On November 22, 2017, Environmental Protection Agency (EPA) Administrator Pruitt signed a notice denying petitions to change the “point of obligation” under the Renewable Fuel Standard (RFS) program away from refiners and importers.  The notice, which was sent to the Federal Register for publication, provides a broad overview of EPA objections to the petitions.  EPA also posted on its website a final decision document explaining its denial in detail.

WOTUS, an acronym that has received a lot of attention in recent years, stands for the “waters of the United States.” When Congress enacted the Clean Water Act (“CWA” or the “Act”) in 1972, it prohibited “the discharge of any pollutant by any person” into navigable waters without a permit. The Act defines navigable waters as the “waters of the United States, including the territorial seas.” 33 U.S.C. §§ 1311(a), 1362(7), (12). But Congress failed to, in turn, define the words “waters of the United States,” and the Supreme Court has noted that these “words themselves are hopelessly indeterminate.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (J. Alito, concurring). The meaning of these words matters because violations of the CWA are subject to substantial criminal and civil penalties, so knowing whether a feature on your site is a WOTUS subject to federal jurisdiction has important consequences.

A New Jersey court recently held that an electrical products manufacturer was entitled to coverage rights provided by a predecessor’s commercial general liability policies if it was found liable for environmental remediation costs as a result of cleanup efforts by the US Environmental Protection Agency (EPA) along a 17-mile portion of the Passaic River in New Jersey.

New chemicals of concern, new scientific and technical developments, newly discovered wastes, or natural disasters can add up to new CERCLA liabilities. When the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) was passed in 1980, it did not address the finality of judgments and settlements for the cleanup of contaminated sites. Some early settlements with EPA provided a complete release from all future CERCLA liability, but that later changed when the United States Environmental Protection Agency (“EPA”) began to limit the scope of covenants not to sue to specified “matters covered” by the settlement. The 1986 CERCLA amendments in section 122(f)(6), 42 U.S.C. § 9622(f)(6)(1) permanently made the change to require “reopeners” in all but a few limited circumstances.

The US EPA released its draft strategic plan for 2018-2022 on October 5, 2017.^[1] Not surprisingly, the draft plan differs greatly from the Obama EPA’s last strategic plan. The change in administrations has produced innumerable shifts in the policies, goals and operations of the federal government. EPA’s draft strategic plan is emblematic of these shifts.

In October 2015, EPA reduced the level of the National Ambient Air Quality Standards (“NAAQS”) for ozone from 75 parts per billion (“ppb”) to 70 ppb. What is happening concerning implementation of those NAAQS?

Although litigation over EPA’s decision to lower the ozone NAAQS remains in abeyance as the Trump Administration continues to consider whether the Agency should reconsider the rule or some part of it, the 2015 standard itself has not been stayed. Thus, the Clean Air Act requires that implementation of the standard proceed. One key step in implementation is promulgation by EPA of a list of areas where the standard is violated, including areas that contribute to standard violations in nearby areas. EPA’s identification of these “nonattainment” areas is a trigger for many of the Act’s control requirements.

The stakes are high for anyone facing environmental liability in the wake of superstorms like Hurricanes Katrina, Sandy, Harvey, Irma, and Maria. If you are among the parties potentially liable for the costs to clean up a release of oil or hazardous substances caused by a major storm event, you may be thinking about a possible “act of God” defense.  You may want to think again. In practice, the availability of this defense has proved elusive.  It is still a good idea, however,  to minimize risk in planning for the next “big one.”  Ultimately, advance actions taken to avoid or mitigate the impacts of natural disasters may be the difference between being excused from or being saddled with cleanup liability.

As is almost always the case following a change in administration, many EPA policies and interpretations are being reviewed and, depending on your point of view, either appropriately reconsidered or “rolled back.” Front and center in this debate is the practical reality that such reviews take time, including in some cases the time necessary to comply with procedural requirements for notice and comment rulemaking. The extent to which the EPA can take the time it believes is necessary is currently playing out in courts across the country, which are grappling with questions of the degree to which the EPA can postpone regulatory compliance deadlines or delay statutorily required actions while it conducts that review.

Over the last decade, regulators have accelerated their focus on vapor intrusion risk at hazardous cleanup sites. This has led to new cleanup standards, policies and guidance to evaluate potential risks, environmental investigation requirements for brownfield redevelopments, and the reopening of previously closed remedial actions. Recently, attention has turned from chronic to acute vapor intrusion risk. Although protection of human health is paramount, this recent focus has been plagued with concerns about the validity of the underlying science and a lack of comprehensive guidance from regulators on how to respond. This article explores the evolution of vapor intrusion regulation, particularly developments addressing acute risk, as well as trends in vapor intrusion- related litigation.

Ladies and Gentleman.

Start Your Engines.

Wait! According to California, you can only use engines that are certified to meet air-emission standards, have a current “Executive Order,” and have not been tampered with, OR engines that are used solely for competition (but not every competition) and are not used on public highways (is a dirt road a public highway?).

Sound complicated? The Clean Air Act provides racing vehicles a broad exemption from federal air emission standards and also provides for broad preemption of state motor vehicle standards, with specific exceptions for California. In addition, California has its own broad racing vehicle exemption which can be found in the California Health and Safety Code. The exemption for racing vehicles seemed straightforward enough—they are not subject to federal or state emissions standards. This exemption makes sense, of course, because when you are racing, you need enhanced engine capabilities to win and because racing engines are a small percentage of the engines we see on the road for everyday use, such as commuting to school/work, running errands, etc.

The good news about the Process Safety Management (PSM) standard is that it is a performance-based standard. The bad news about PSM, well, is that it is a performance-based standard. While it provides the operator some flexibility on complying, it can often lead to being second-guessed by an agency. Not only does the operator have to comply with the regulations, the operator must  comply with and document compliance with relevant codes and standards or Recognized and Generally Accepted Good Engineering Practices (RAGAGEP). These include widely adopted codes such as the National Fire Protection Association (NFPA), consensus documents such as the American Society of Mechanical Engineers (ASME), non-consensus documents such as the Chlorine Institute (CI) and in most cases Internal Standards.

The Superfund program is much criticized for good reason on many grounds. It takes too long to investigate sites and decide on the appropriate cleanup. The costs for investigation and cleanup actions are excessive. The process is seemingly never-ending as contaminated sites languish on the National Priorities List for decades.

Streamlining the process is a worthwhile goal, but equally important would be reforms to promote remedy decisions that take account of the fact the resources are not unlimited. Money spent on cleanup is not available for another purpose. Unfortunately, because of its single-minded focus on often remote human health and ecological risks associated with exposures to chemical contaminants (usually based on highly conservative exposure assumptions), the Superfund program drives a lot of resources to cleanup that likely would be better allocated to another use.

In August 2014, residents of Toledo lost the use of tap water for two days because of a toxic algal bloom in the western basin of Lake Erie, which is their water source. In subsequent summers, the lake’s algal blooms have been smaller, but they remain a persistent phenomenon. In fact, the National Oceanic and Atmospheric Administration (NOAA) is predicting a significant cyanobacteria algal bloom in western Lake Erie this summer.

Numerous definitions of “harmful algal blooms” exist, but they generally can be understood as excessive growths of various species of phytoplankton, protists, cyanobacteria, or macro and benthic algae that negatively impact water quality, aquatic ecosystem stability, or animal and human health. The blooms may be toxic or nontoxic. Even nontoxic blooms can have repercussions for drinking water treatment, recreational use of the waterbody, and the overall economy.

George Clemon Freeman Jr. – founding father of Hunton & Williams’ environmental law practice passed away on June 26, 2017, at age 88.  Some of the tributes to George have mentioned a presentation George made to members of a client group in the mid 1970’s.  As remembered by Henry Nickel, George had the unenviable task of speaking to group members right after lunch.  George’s less-than-exciting assigned topic was the regulation of priority pollutants under section 307 of the Clean Water Act.  Seeing his audience about to doze off, George – perhaps drawing on his Yale glee club experience – deviated from his prepared remarks (as he was known to do) and launched into an impromptu version of the Lord High Executioner’s “I Have A Little List” song from Gilbert & Sullivan’s The Mikado.  In the Gilbert & Sullivan version of the song, the list was of those to be beheaded:

“As some day it may happen that a victim must be found
I’ve got a little list – I’ve got a little list
Of society’s offenders who might well be underground
And who never would be missed – who never would be missed.”

Earlier this week, July 4, 2017, was the nation’s 241st birthday. In Washington, DC, and in countless other places across the country, the event was celebrated with dazzling fireworks displays. My childhood days are long behind me. But, a good fireworks display still evokes awe and gives me goose bumps. Although fireworks are synonymous with the 4th of July, Americans are not alone in their appreciation of fireworks. All across the globe—from Europe, to Asia, to South America and back again—fireworks are a universal symbol of celebration.

Increased use of renewable fuels is a core element of our country’s quest for energy independence and has also been used to incentivize private efforts to reduce greenhouse gas emissions. Now more than ten years old, the Renewable Fuel Standard (RFS) program has helped make ethanol made from sugarcane and compressed natural gas produced from sludge at municipal wastewater treatment facilities common household concepts. While the vast majority of renewable fuel producers are compliant, the program has suffered from high-profile cases of fraud and abuse requiring federal enforcement, including criminal prosecutions.

Last year Congress directed the US Environmental Protection Agency (EPA) to review new chemicals by a new process. A major question for manufacturers and consumers is whether EPA can do this within a reasonable time period without unnecessarily getting in the way of innovation.

Since enactment of the Lautenberg Act amending the Toxic Substances Control Act (TSCA) in June 2016, the pace of EPA’s review of new chemicals has slowed dramatically. While EPA’s pre-enactment new chemicals program handled around 1,000 premanufacture notifications (PMNs) annually, EPA estimates that a backlog of about 600 new chemicals had built up by January 2017, which created a substantial concern in the regulated community.

Today, EPA and the Corps released a highly anticipated proposal to rescind the Obama Administration’s controversial 2015 Clean Water Rule. The June 2015 rule, which has been stayed since October 2015, would broadly define the scope of “waters of the U.S.” (WOTUS) subject to federal regulation and permitting requirements under the CWA. The proposed rescission is the first step of a two-step process to repeal and replace the 2015 Clean Water Rule with a new WOTUS rule. With today’s proposal, EPA and the Corps are proposing to officially rescind the 2015 rule and continue to implement the regulatory definition in place prior to the 2015 rule while they work to promulgate a new rule to define WOTUS.

The Administration’s proposed 30 percent reduction to EPA’s operating budget has raised many questions.  Will it happen?  How would it impact operations?  Are all EPA programs equally affected?   The final answers will come at the end of a lengthy congressional process, but last week’s hearing provided clues that any final cuts could be significantly less than the Administration’s request.  But first, it’s worth a quick review of the federal budget process.

A new policy directive issued earlier this week by the Department of Justice (Justice) has raised concern among regulated industry that the availability of Supplemental Environmental Projects (SEPs) in civil settlements could be severely reduced, or even largely eliminated.  If the directive is applied to restrict the availability of SEPs, it would remove a useful, and at times powerful, tool routinely used by the regulated community to negotiate acceptable settlement agreements in civil enforcement actions. It could also eliminate tens of millions of dollars of annual funding of such projects—which typically benefit local communities or address niche environmental issues—currently provided through the use of SEPs in consent decrees.  Because applicable policies preclude Justice from requiring parties to include SEPs in settlements, it is difficult to identify any upside in any potential narrowing or elimination of SEPs as an optional tool to assist in the resolution of civil environmental enforcement actions.

The White House Office of Management and Budget released on Tuesday the Trump administration’s first full budget proposal for the 2018 fiscal year (starting in October 2017). The comprehensive proposal provides detail about the administration’s policy priorities. If the budget is adopted by Congress as written, the Environmental Protection Agency would face its greatest budget cuts ever. These cuts would broadly impact federal environmental efforts, including the enforcement of federal environmental laws.

Over the past several years, the EPA and states have wrestled with the highly controversial question of how to manage ash and other residual materials produced by the combustion of coal in coal-fired power plants.  These so-called “coal combustion residuals” (“CCR”) have been traditionally managed in large man-made ponds at many power plant sites.  While discharges from these impoundments directly to surface waters are regulated by permits issued under the Clean Water Act, the impoundments themselves have been regulated under state waste management programs.  In 2015, EPA fundamentally changed the regulatory landscape for these facilities when it promulgated a federal rule setting national standards for design, operation and closure of CCR impoundments.  EPA, Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities, 80 Fed. Reg. 21,302 (Apr. 17, 2015).

President Trump recently nominated Susan Parker Bodine to lead the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance (“OECA”).  OECA is responsible for coordinating the enforcement of federal environmental laws under EPA’s authority.  OECA acts through a combination of compliance assistance, administrative enforcement and, in partnership with the US Department of Justice, civil and criminal enforcement.

The latest news is full of stories of federal agencies reviewing and, in some cases, rescinding environmental regulations and cutting agency spending. From these reports, it could seem the federal government might also cut back its enforcement of environmental laws. But in fact, even in this turbulent regulatory and fiscal appropriations landscape, enforcement–particularly criminal enforcement–of core existing environmental laws is one aspect of environmental regulation that is sure to continue.

In a series of orders this week, the US Court of Appeals for the DC Circuit granted motions by EPA to pause cases challenging several Obama-era regulatory actions while the new administration reviews those rules. With those cases on hold, the dispute over the fate of those rules will move out of the courts and into the administrative process.

In 1980, a lame duck Congress passed the nation’s first legislation, the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. (CERCLA), to address the cleanup of toxic waste disposal sites. Comprehensive amendments were passed six years later. Over the next 30 years, EPA’s enforcement powers were used with increasing regularity and consistency to study, begin, and often complete cleanups at hundreds of the nation’s contaminated waste sites. The program has always had its critics, but not until the current administration has there been a fundamental reassessment of its basic cost-benefit structure, just as is being done with many other federal programs.

On April 11, 2017, the United States Court of Appeals for the District of Columbia Circuit canceled oral argument, which had been scheduled for April 19, in several consolidated cases challenging EPA’s 2015 revision of National Ambient Air Quality Standards (NAAQS) for ozone. The court took this action, and ordered that the case be held in abeyance, in response to an EPA motion asking that oral argument be continued, to give the appropriate Trump administration officials adequate time to review those standards. EPA’s motion indicated that the new administration is deciding whether to reconsider them.

What is the regulatory significance of the court’s action?

President Trump released his budget request for fiscal year 2018 on March 16. The budget blueprint, or “skinny budget” as it is being called, holds fairly flat the federal spending for programs other than entitlements. It requests a significant increase in defense spending that is offset by cuts to nondefense discretionary spending.

The Environmental Protection Agency (EPA) faces drastic cuts, equaling nearly a third of its budget. This would bring the EPA’s total budget to levels not seen since 1990.

You’ve likely heard that just hours after the inauguration, White House Chief of Staff Reince Priebus issued a Memorandum for the Heads of Executive Departments and Agencies captioned “Regulatory Freeze Pending Review.” The so-called Regulatory Freeze Memo sought to freeze midnight actions by the Obama administration. In response to President Trump’s freeze actions and expected regulatory reforms, California lawmakers are seeking to issue their own “freeze” to ensure regulations in place just before the transition remain effective in California. On top of that, California legislators have been introducing a series of bills designed to “insulate the state from dangerous rollbacks in federal environmental regulations and public health protections,” including:

• SB 49, entitled The California Environmental, Public Health, and Workers Defense Act of 2017, related to retaining all pre-Trump environmental regulations.
• AB 1646, related to website posting of petroleum refinery risk management plans (RMP) on public agency websites and establishment of emergency notification equipment.
• AB 1647, related to air monitoring for petroleum refineries.
• AB 1648, related to increasing CalOSHA’s refinery inspection resources.
• AB 1649, related to codification of Governor Brown’s Refinery Task Force.
• SB 584, related to speeding up the RPS 50 percent renewable goal by five years and setting a new 100 percent renewable goal at 2045.

In June 2016, Congress did something it had not done in over a quarter century: it enacted comprehensive, bipartisan revisions to a major environmental statute. More specifically, it substantially overhauled the Toxic Substances Control Act, or TSCA, a law that was first passed in 1976 and was widely considered to be in need of an update. The TSCA reform law, also known as the Lautenberg Act, expands EPA’s role in reviewing new chemical substances; gives EPA new authority to require testing of chemicals; and directs EPA to prioritize, evaluate and regulate the risks from existing chemicals. It also imposes strict deadlines on EPA for carrying out its new duties under TSCA.

And EPA has apparently taken these deadlines to heart.

On February 28, 2017, President Trump signed an Executive Order (EO)  that sets into motion a process for the Administrator of the Environmental Protection Agency (EPA) and the Assistant Secretary of the Army for Civil Works (jointly, the “Agencies”) to review the Obama Administration’s Waters of the US (WOTUS) Rule.  80 Fed. Reg. 37,054 (June 29, 2015). The EO directs the Agencies to review the WOTUS Rule for consistency with the Clean Water Act (CWA) and the policies set forth in the EO, stating that “[i]t is in the national interest to ensure that the Nation’s navigable waters are kept free from pollution,” while at the same time “promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles played by Congress and the States under the Constitution.”  Following review, the EO instructs the Agencies to publish, as appropriate, a proposed rule for notice and comment rescinding or revising the WOTUS Rule.

On January 11, 2017, the US Environmental Protection Agency (EPA) published a proposed rule pursuant to Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA or Superfund), mandating extensive and costly financial assurance requirements applicable to the hardrock mining and mineral processing industry. On the same day, EPA also announced plans to commence rulemaking to consider similar requirements for additional classes of facilities in the petroleum and coal, chemical manufacturing, and electric power generation, transmission and distribution sectors. Both proposals derive from a series of lawsuits culminating in a “sue and settle” order of the DC Circuit Court of Appeals affirming a schedule agreed to between EPA and various environmental groups to issue financial assurance regulations.

During much of the Obama administration, states and EPA were in conflict about how to craft Clean Air Act plans to reduce “regional haze” impairment of visibility in national parks and wilderness areas. The technical and policy issues are daunting. Regional haze forms in the atmosphere from many sources’ air emissions — emissions from cars and trucks, construction equipment, factories and power plants (among others), plus natural sources like wildfires and dust storms. Developing regional haze implementation plans entails complex policy choices and weighing sometimes heavy compliance costs for emission controls — costs that may total in the hundreds of millions or even billions of dollars — against improvements in visibility that can be hard to measure and in some cases are even imperceptible to the human eye.

As previous Nickel Report posts have discussed, congressional efforts to rein in freewheeling agency interpretation and reinterpretation of ambiguous statutes have begun to intensify, and calls to reconsider Chevron deference have increased from both within the judiciary and without. One of the most vocal and eloquent critics of Chevron and its progeny, notably Mead and Brand X, is Judge Neil Gorsuch, President Trump’s nominee to fill the current Supreme Court vacancy. In Gutierrez-Brizuela v. Lynch, 834 F.3d 1142 (10th Cir. 2016), Judge Gorsuch penned an exhaustive and erudite analysis of the tension between the separation of powers that the US Constitution demands and the deference that Chevron and Brand X require courts to afford to reasonable agency interpretations of ambiguous statutes, even if those interpretations differ from those previously announced by the courts.

President Trump has already issued several executive memoranda directing federal agencies to expedite environmental reviews and approvals for all infrastructure projects (as noted in our post yesterday), with emphasis on high-priority matters, such as pipeline construction and an aim to boost steel manufacturing in the United States.  Specifically, he seeks to renew and expedite the approval of two oil pipeline construction projects, the Keystone XL Pipeline (Keystone) and the Dakota Access Pipeline (DAPL).  He has further directed the Commerce Department to prepare a plan under which all new and repaired pipe used in the United States would be manufactured stateside.

The U.S. Environmental Protection Agency (EPA) published the Cross-State Air Pollution Rule “Update” for the 2008 national ambient air quality standards for ozone – the so-called CSAPR Update Rule – on October 26, 2016.  81 Fed. Reg. 74504.  The CSAPR Update Rule regulates emissions of nitrogen oxides (NOx) from power plants located in 22 states in the eastern half of the country by establishing statewide ozone-season NOx emission budgets scheduled to take effect beginning May 1, 2017.  (Under the Clean Air Act, the regulatory “ozone season” runs from May 1 through September 30 each year.)