The Nickel Report

Since President Trump’s election, his Administration has emphasized cooperative federalism and has opened the door for more state responsibility.  California is walking through that door, and has positioned itself, according to its elected officials, at the vanguard of the so-called “resistance” to the Administration and its policies, real and perceived.  This is particularly clear on environmental, energy, and natural resource matters.  Last week illustrates the growing divide between California and the federal government in these areas.

2017 Chambers USA Awards

Last week at the 2017 Chambers USA Awards, Hunton & Williams’ environmental team was recognized as the team of the year in the environment practice area.  Chambers USA evaluated our practice as “preeminent” in the environmental area and “highly esteemed.”  Chambers USA also noted our “fine track record” for our utility and energy work and our “noteworthy expertise across air, water, waste and climate change matters.”

Just before President Trump announced his decision to withdraw from the Paris Agreement on Climate Change, California is moving ahead with new greenhouse gas (GHG) regulations, making good on its commitment to continue its path regardless of what goes on in Washington, DC. This week, the Board of the Bay Area Air Quality Management District (BAAQMD) held a special meeting to consider a controversial new regulation targeting oil refineries. If adopted, as planned at the June 21, 2017, Board public hearing, Regulation 12, Rule 16:  Petroleum Refining Facility-Wide Emissions Limits (Rule 12-16) would establish first-of-its-kind, refinery-specific, facility-wide caps on emissions of greenhouse gases (GHG). The proposed caps limit refinery emissions to seven percent above recent operating levels.

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 federal authorizations required to construct major infrastructure and mineral-extraction projects are the product of years of administrative review and collaboration between agencies and the project proponents. Unfortunately, the issuance of those authorizations is followed quickly by legal challenges from environmental NGOs, which almost always include a demand for preliminary injunctive relief during the pendency of the challenge. If granted, these injunctions can delay the effectiveness of the authorization by years.

The effects of the regulatory reform initiatives of the Trump Administration are beginning to be felt at the Occupational Safety and Health Administration (OSHA) with the formal action by OSHA to finalize withdrawal of the “Volks Rule” regulation. On May 3, 2017, in response to a CRA resolution of disapproval, OSHA published a final rule removing amendments to OSHA’s recordkeeping regulations from the Code of Federal Regulations.

This article was originally published in the May 1, 2017, online edition of The Recorder.

“I’m mad as hell and I’m not going to take it anymore!”  Movie aficionados will recognize this classic line from the 1976 movie, “Network.”  For many Californians, the line captures the feeling in the state just before Proposition 13 (Prop 13) was passed by about 65 percent of voters in 1978 to amend the state constitution.  For a state that is used to sizable earthquakes, Prop 13 was a truly seismic event in California, restructuring the state property tax system.  It was enacted in response to frustration over California’s decades-old method of paying for government, which allowed property taxes to increase dramatically year to year, often resulting in senior citizens on fixed incomes being unable to afford to stay in their homes.  On top of cutting and restricting increases in property taxes, Prop 13 contained language requiring a two-thirds majority in both legislative houses for future increases of any state tax rates or amounts of revenue collected, including income tax rates and sales tax rates.

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.