The Nickel Report

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?

On April 14, 2017, the Department of Energy (DOE) quietly issued an emergency order under Federal Power Act (FPA) § 202(c) to keep open a power plant slated for shutdown under the Environmental Protection Agency’s (EPA) Mercury and Air Toxics Standards (MATS). While DOE has issued FPA § 202(c) emergency orders in the past, this marks the first time that DOE has used such authority to address electric reliability concerns arising from MATS implementation. In doing so, DOE effectively inaugurated the so-called Reliability Safety Valve that was heavily discussed during MATS’ consideration nearly six years ago.

The application of economic principles to environmental law decisions has come a long way. Today’s conflicts over cost-benefit analysis and the value of mitigation projects and trading markets are more a sign of the important and well-accepted role that economics has come to play in environmental decision-making than a fight over the threshold question of whether economics matters at all. The battle lines have shifted. Economic concepts must be taken into account. The turf on which we now fight concerns to what extent economics should drive environmental decisions.

In the latest of a series of moves reflecting the state’s intention to double down on its climate change agenda in the wake of President Trump’s inauguration, the California Air Resources Board (CARB) recently approved a new regulation aimed at curbing methane emissions from oil and gas operations. This measure, characterized by CARB as “the most comprehensive of its kind in the country,” comes on the heels of several actions recently announced by the United States Environmental Protection Agency (US EPA) to reassess the climate change programs of the previous administration, specifically those targeted at oil and gas sector emissions.

The New Source Review (NSR) Program of the Clean Air Act 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”).

For the first two decades of the NSR program, existing sources rarely triggered it. That is because EPA applied it in a way to be triggered only by unusual projects that would expand the capacity of the source. It is also because NSR is so time-consuming and expensive that sources generally avoided activities that would expand their capacities because they could trigger NSR.

That all changed drastically in the late 1990s.

President Trump made good on one of his key campaign promises on Tuesday, signing an executive order (E.O.) titled Promoting Energy Independence and Economic Growth. The long-awaited E.O., which was published in the Federal Register today (82 Fed. Reg. 16093), targets the Obama administration’s key climate policies, including regulations affecting power plants and oil and gas production facilities. More broadly, the E.O. affirms the Trump administration’s priority of ensuring domestically produced energy and economic growth.

What They Are:  PFASs (per- and polyfluoroalkyl substances) comprise a group of highly fluorinated manmade compounds that are showing up in drinking water supplies around the country. They are resistant to heat, water and oil, as well as to chemical breakdown. Because of these properties, PFASs have been used for decades as surface protection in a wide range of consumer products including carpets, clothing, cookware and food industry paper products such as pizza boxes and sandwich wrappers. PFASs are also present in foam used for fighting fires involving flammable or combustible liquids, such as oil and gasoline. Additionally, mist suppressants for metal plating operations may contain PFASs.

[caption id="attachment_291" align="aligncenter" width="300"] Navajo Generating Station[/caption]

In two related decisions issued on March 20, 2017, the Ninth Circuit upheld an EPA plan imposing regional haze requirements on the Navajo Generating Station (NGS).  The rulings suggest a possibility that future haze plans need not be unduly inflexible—sometimes forcing premature unit closures, as many haze plans did during the program’s first round of implementation.

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.