The Nickel Report

Environmental justice (“EJ”) is a central focus of the Biden administration’s environmental agenda.  On Day One in January, the administration emphasized the importance of EJ in the federal government’s efforts to tackle climate change and to address the disparate impact of decisions affecting natural resources.  In addition, many states are implementing their own EJ requirements.  In the wake of issuance of new and enhanced EJ policies by both the federal government and states, it behooves lawyers in multiple disciplines to account for EJ issues in their legal practice.  The focus of most commentary on EJ issues has been on facility siting and the impacts of “polluting” activities on minority and economically disadvantaged communities.  This article, in contrast, addresses EJ in transactional practices.  Specifically, we identify some of the EJ issues practitioners may confront and seek to manage in merger and acquisition, asset purchase and sale, real estate purchase and sale, facility siting and/or construction, Brownfields development, financing and underwriting contexts.

The Railroad Commission of Texas (RRC) has made known its commitment to expedited filings and approvals for the regulated community as well as public access to information and improved transparency for all parties. This effort is exemplified by the recently announced Pipeline Inspection, Permitting and Evaluation System (PIPES) program. Organizations can now file reports, inspections, and other documents as well as pay fees online. Organizations can also upload documents for RRC review. In addition, PIPES provides public users access to publicly available RRC documents. As the online availability of reports and other documents expands, it becomes even more important for organizations to focus on timely accurate filings as well as an organization’s online public profile.

Care about Drinking Water Regulations?

7.22.2021 Request for Comment and Public Workshop for California Drinking Water Public Health Goals for PFOA and PFOS: The California Office of Environmental Health Hazard Assessment (OEHHA) released a draft document for public review describing proposed Public Health Goals (PHGs) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) in drinking water. A PHG is the level of a drinking water contaminant at which adverse health effects are not expected to occur from a lifetime of exposure.  PHGs published by OEHHA are considered by the State Water Resources Control Board in setting drinking water regulatory standards (Maximum Contaminant Levels, or MCLs) for California. The proposed PHG of 0.007 parts per trillion (ppt) for PFOA is based on kidney cancer in humans and the proposed PHG of 1 ppt for PFOS is based on liver and pancreatic tumors in laboratory animals. The draft technical support document can be found here. Public comments are due September 28, 2021. Details about how to send comments and a public workshop that will be held on September 28, 2021 can be found here.

Yesterday, the European Commission (the Commission) – the executive branch of the European Union (EU) – adopted a package of proposals to deliver on the EU’s ambitious target of reducing greenhouse gas (GHG) emissions by at least 55% by 2030. These proposals – collectively known as “Fit for 55” – are only part of the suite of legislative tools, legal obligations, and policies to be rolled out under the European Green Deal, a broad non-binding action plan intended to make the EU’s economy more sustainable and help Europe become the world’s first climate-neutral continent by 2050. The comprehensive package of twelve policies proposed yesterday contains the following key initiatives:

In a recent post, we discussed the various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance factors (“ESG”). As noted previously, neglecting ESG considerations can result in a number of risks to a company, including risks associated with the reputational, financial, and legal impacts of handling ESG issues poorly. We also observed how managing ESG issues well can enhance corporate value and performance, and create competitive advantages for companies. Given these emerging risks and opportunities, it is perhaps unsurprising that ESG has begun to play a larger role in the M&A context in recent years.

In response to judicial remand of its Cross-State Air Pollution Rule (CSAPR) Update, EPA published a revised CSAPR Update – the latest of EPA’s interstate transport rules using its CSAPR methodology – at the end of April 2021, slashing ozone-season budgets for emissions of nitrogen oxides (NOx) for a dozen states.[1]  By the end of the 60-day period for filing petitions for judicial review on June 29, a single petition for judicial review had been filed in the US Court of Appeals for the DC Circuit.

Consistent with President Biden’s Executive Order (EO) 13990, the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) (collectively, the “Services”) recently announced that they “will initiate rulemaking in the coming months to revise, rescind, or reinstate five [Endangered Species Act] regulations finalized by the prior administration.”  The Biden Administration is the third consecutive administration to undertake revisions to the Services’ Endangered Species Act (“ESA”) regulations.

The White House announced on July 22, 2021, President Biden’s nomination of David Uhlmann to be the Assistant Administrator for Enforcement and Compliance Assurance (OECA) at the US Environmental Protection Agency (EPA). Uhlmann is currently the director of the Environmental Law and Policy Program at the University of Michigan Law School and was previously a federal prosecutor for 17 years, including as the Chief of the Environmental Crimes Section of the US Department of Justice. His nomination signals the White House’s clear intent to reinvigorate EPA’s enforcement program after what the EPA’s Inspector General found in its March 31, 2020 report to be years of declining case statistics across multiple administrations.

On Wednesday, June 16, 2021, EPA held the first of two public “listening sessions” to inform its review of the Risk Management Program (RMP) regulations pursuant to Executive Order 13990.  According to Carlton Waterhouse, EPA Deputy Assistant Administrator for the Office of Land & Emergency Management (OLEM), the listening sessions are “a first step in considering improvements to the RMP rule, so EPA can better address the impacts of climate change on facility safety and protect communities from chemical accidents, especially vulnerable and overburdened communities living near RMP facilities.”

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants that reach navigable waters by way of groundwater.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s conclusion that a discharge permit is required where pollutants reaching navigable waters are “fairly traceable” to a point source.  It set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).