The Nickel Report

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.

The US Court of Appeals for the Third Circuit recently issued two decisions concerning the relationship between the Natural Gas Act (NGA) exclusive jurisdiction provision at 15 U.S.C. § 717r(d)(1) and the administrative review process for state-issued environmental permits for interstate natural gas pipeline projects. These decisions are briefly described as follows:

• In Delaware Riverkeeper et al. v. Sec PA Dept. Env. Protection, et al. (Sept. 4, 2018), the court held that only “final” state agency actions are reviewable under the NGA’s exclusive jurisdiction ...

Each year, the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center puts out a forecast for the upcoming hurricane season, stressing the dangers posed by hurricanes and the need to prepare. About this time last year, Hurricane Harvey made landfall in South Texas as a Category 4 and resulted in historic flooding. The devastating aftermath of the hurricane still continues. Preparation for and responding to incidents, such as those caused by Hurricane Harvey, has become increasingly more complex and more important than ever.

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 an article published in Law360, two Hunton Andrews Kurth LLP Partners discuss the passage of the Bipartisan Budget Act of 2018 and its implications for Section 45Q of the Internal Revenue Code. Carbon capture and sequestration supporters expect this to significantly boost deployment of carbon capture and storage (CCS) across the US.

Readers can access the full article here.

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 19, 2018, the Federal Energy Regulatory Commission (FERC or Commission) held its July 2018 open meeting. This meeting was Commissioner Powelson’s last, following his announcement on June 28, 2018, that he would be leaving the agency.

Highlights of the meeting include the following:

The successful completion of major infrastructure construction projects often depends on the amount of time required for federal agencies to process environmental reviews and make authorization decisions. This is particularly true where multiple federal agencies are involved in the process and the decisions or timeliness of one can influence the decisions or timeliness of another. While numerous administrations have attempted to address multi-agency federal permitting processes in an effort to gain efficiencies, the Trump administration has taken significant steps to ensure that federal agencies work together in ways that will reduce the amount of time required to complete all environmental reviews and issue all required authorizations.