The Nickel Report

On May 19, 2020, President Trump issued an Executive Order (EO) intended to combat the unprecedented effect COVID-19 has had on the American economy, by directing agencies to remove or ease regulatory barriers to spur economic growth.  In general, the EO directs agencies to ease regulatory and enforcement burdens that may inhibit economic recovery, provide guidance on what the law requires, recognize the efforts of regulated industries to comply with the law, and ensure fairness in administrative enforcement and adjudication. Perhaps most notably, the EO is written broadly enough that agencies may look beyond COVID-19-related impacts when considering how to implement the EO.

The largest market for CO₂ captured from industrial sources through carbon capture utilization and storage (CCUS) is enhanced oil recovery (EOR), using the CO₂ to produce oil.  Captured CO₂ can be used for cement, algae production, and other uses, but EOR has vast potential.  Moreover, it has a nearly 50-year track record in the US, where it was pioneered.  Carbon dioxide injected into oil formations becomes permanently stored as part of the process.

Yesterday, the Railroad Commission of Texas (“RRC”) voted by a 2-1 margin to dismiss the request that had been filed in late March of this year by two producers to determine reasonable market demand for oil and the need for curtailment of oil production in Texas.[i]

The California State Water Resources Control Board (“State Board”) is poised to become “the first regulatory agency in the world to specifically define ‘Microplastics in Drinking Water.’”[1] In September 2018, the California legislature adopted Health and Safety Code section 116376 via Senate Bill No. 1422, adding microplastics regulations to California’s Safe Drinking Water Act (“SDWA”).^[2] This provision requires the State Board to adopt a definition for Microplastics in Drinking Water by July 1, 2020. Additionally, before July 1, 2021, the State Board must: (1) adopt a standard methodology for testing drinking water for microplastics; (2) adopt a requirement for four years of testing and reporting of microplastics in drinking water, including public disclosure of the results; (3) consider issuing a notification level or other guidance to help consumers interpret the testing results; and (4) accredit laboratories in California to analyze for microplastics. The State Board can implement these requirements through adoption of a Policy Handbook, rather than through the formal rulemaking process.

Under the requirements of Health and Safety Code section 116376, water suppliers in California will be the first in the nation to test for microplastics in drinking water.

The Commonwealth of Massachusetts is pursuing various regulatory actions to implement state policy to reduce greenhouse gas emissions from electric generation resources. As we previously reported, the Commonwealth is planning to implement a Clean Peak Standard (“CPS”) program this summer, which is designed to have renewable electricity generation resources “show up at the right time” on the grid to coincide with times of peak demand. In a complementary action, the Commonwealth has now doubled the size of its Solar Massachusetts Renewable Target (“SMART”) incentive program, along with new  performance standards for the siting of these renewable generating resources. While these changes to the SMART program were adopted as emergency regulations—making them effective immediately—the Commonwealth will go through the notice and comment rulemaking process over the next few months to provide for continued input from stakeholders on the new regulations and associated guidance.

Uncertainty. Today nearly everything we thought we knew is uncertain. It’s good, then, that at least one regulatory program in California remains certain: Proposition 65. Plaintiffs continue to serve 60-day notices alleging violations, and the Office of Environmental Health Hazard Assessment (OEHHA) continues to tinker with safe harbor warning requirements. (Maybe certainty isn’t all that it’s cracked up to be).

When can Supreme Court precedent be overruled? Two recent decisions carry on a recent and lively debate among the Justices over the concept of “stare decisis,” and provide significant guidance on how Justices Thomas and Kavanaugh approach the question.

Yesterday the Supreme Court of the United States issued its most significant Clean Water Act decision in more than a decade, resolving a split among lower courts over the reach of the Clean Water Act’s “point source” or National Pollutant Discharge Elimination System (NPDES) program. Pollutants travel to bodies of water in many ways: by pipe, ditch, or runoff, for example. The Clean Water Act defines some of those ways of moving pollutants as “point sources”—specifically, pipes, ditches, and similar “discernible, confined and discrete conveyance[s]”—and bans the “addition of any pollutant to navigable waters from any point source” without an NPDES permit. But no similar permitting requirement applies to pollution added from nonpoint sources, which is instead controlled by state and other federal environmental laws.

On March 20, the California Water Boards issued guidance about complying with regulatory requirements during the COVID-19 shelter-in-place orders. We summarized that guidance here. In short, the guidance directs regulated entities to “immediately” notify the Board if compliance is not possible and to seek appropriate relief. Water Board staff committed to “do their best to respond within 24/48 hours.”

It has now been a month, and preliminary data about the extent to which regulated entities have sought relief, and how the Regional Water Boards have responded is available. The following information was presented today in a Bar Association of San Francisco’s Environmental Law Section Master Series Roundtable providing detail about extension requests and delays by regulated entities as of the week of April 20 (i.e., at the conclusion of the first month of the policy):

As reported on the Hunton Insurance Recovery Blog, much of the commentary on insurance issues arising from the COVID-19 crisis understandably has focused on recovery under first-party property policies providing business interruption coverage for losses incurred due to office closures, government orders, extra expenses, and other direct costs experienced by employers. There is a much broader range of possible claim scenarios arising from COVID-19 that may go to other kinds of coverages, however; most notably directors and officers liability, management liability ...