The Nickel Report

While coming from opposite ends of the political spectrum, the administrations of US President Donald Trump and Mexico’s recently elected chief executive, Andrés Manuel López Obrador (commonly referred to as “AMLO”), have each heralded significant policy shifts with potential to affect bilateral relations as well as international energy markets.

Last week, the US Environmental Protection Agency (EPA) released its annual enforcement results for the 2018 fiscal year (ranging from October 1, 2017, to September 30, 2018). The report, prepared by EPA’s Office of Enforcement and Compliance Assurance (OECA), highlights the results of the agency’s civil and criminal enforcement of the nation’s federal environmental laws over the past year. The 2018 results mark the first full fiscal year of enforcement results, including inspections and compliance evaluations, under the Trump administration. A statement in the report from Susan Bodine, the Assistant Administrator for OECA, summarizes EPA’s enforcement priorities, explaining, “[i]n fiscal year 2018, we continued our focus on expediting site cleanup, deterring noncompliance, and returning facilities to compliance with the law, while respecting the cooperative federalism structure of our nation’s environmental laws.”

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly referred to as the Superfund law, directed the United States Environmental Protection Agency (EPA) to create a list of the country’s most hazardous waste sites. Sites are proposed to be placed on this “National Priorities List” (or NPL as it is known to environmental law professionals) if they exceed a certain risk score, or Hazard Ranking, and added to the List if the ranking is confirmed after a formal notice-and-comment process. A detailed set of regulations called the National Contingency Plan (NCP) governs how sites placed on the NPL will be investigated, alternative remedies evaluated, and a final remedy selected and then implemented. The NPL, the NCP, and various EPA guidance memoranda have established what practitioners acknowledge is an imperfect but generally workable process in which EPA and states work with potentially liable parties to manage cleanups at NPL sites.

Nearly two years into the current administration, many questions remain regarding the Environmental Protection Agency (EPA) and US Department of Justice’s (DOJ) approach to environmental enforcement. EPA and DOJ have both issued various policies that we have covered in past blog posts that provide some level of insight on priorities and procedures, but a better assessment can only be made by looking at cases initiated, referred, resolved or concluded after a trial.

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?

The controversy continues over the scope of the take prohibition under the Migratory Bird Treaty Act (MBTA). As we noted here, the Solicitor’s Office for the US Department of the Interior (DOI) issued an opinion in late 2017 concluding that the MBTA does not prohibit the incidental take of migratory birds. Although this conclusion was consistent with the holdings of at least two US Circuit Courts of Appeal, the Solicitor’s Opinion came under immediate fire from conservation groups and several former government officials. In May of this year, two environmental groups filed lawsuits in federal court challenging the Opinion. In a court filing earlier this month, the government stated its intention to move to dismiss these suits based on several threshold grounds, such as whether the Opinion is a final agency action subject to judicial review. These lawsuits inject fresh uncertainty into an area of the law that DOI sought to clarify.

On July 9, President Trump announced Judge Brett Kavanaugh of the Court of Appeals for the DC Circuit as his nominee to replace retiring Justice Anthony Kennedy on the Supreme Court. Kavanaugh has developed an extensive history of jurisprudence during his twelve-year tenure on the DC Circuit. And, given the DC Circuit’s heavy administrative law caseload, Kavanaugh has authored numerous opinions involving environmental law. The upcoming confirmation process is sure to include a focus on Kavanaugh’s robust environmental and administrative law record and what it might portend for the future.

As the Trump administration is pushing forward on its deregulatory agenda and, in particular, its efforts to improve the Endangered Species Act (ESA) and its implementation by the US Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) (together, the Services), the Supreme Court is poised to hear a landmark case on designation of critical habitat under the ESA that could provide some guideposts for the Services’ new regulations.

The Trump Administration has pursued an ambitious goal to reduce federal regulation. The administration has slowed the promulgation of new rules, and in early 2017 a bevy of late-term Obama-era rules still subject to the Congressional Review Act were overturned by the GOP Congress.

The US Environmental Protection Agency (EPA) released its annual enforcement and compliance results for the most recent fiscal year (FY) on February 8, 2018. The results, which cover the period from October 1, 2016, to September 30, 2017, are the Trump administration’s first annual statistical report on federal environmental enforcement. The results provide insight into the administration’s focus and priorities for enforcement.

A year ago, the regulated community and its environmental lawyers recognized that the Trump administration would bring a new approach to the enforcement of federal environmental laws, but the nature of the specific changes remained nebulous. While it is still early to speculate on the long-term impacts to enforcement that may be implemented by the administration, events over the prior year have brought the new administration’s enforcement philosophy and priorities into greater focus. This post reviews some of the key personnel, policy, and budget announcements made during President Trump’s first year in office that will shape the future of federal environmental enforcement by the Environmental Protection Agency in the coming years.

On Monday, the Trump Administration released an ambitious legislative proposal that aims to stimulate $1.5 trillion in new infrastructure investment over the next 10 years, expedite the federal permitting process, address rural infrastructure needs, and prepare the American workforce for the future. To accomplish those goals, the proposal includes aggressive recommendations to streamline key federal environmental review and permitting processes for infrastructure projects. In addition to traditional forms of infrastructure, such as roads, bridges, and airports, the Legislative Outline for Rebuilding Infrastructure in America addresses drinking and wastewater systems, energy infrastructure, veterans’ hospitals, and Brownfields and Superfund sites.

Infrastructure takes a long time to permit in this country. Every president over the past 30-plus years has tried to streamline the federal permitting process for infrastructure.  In his first State of the Union, President Trump called for streamlining the federal permitting process so it would take “no more than two years, and perhaps, even one.”

On Thursday, the Senate confirmed Susan Parker Bodine as the Assistant Administrator of the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance (“OECA”).  OECA, the chief enforcement arm of EPA, coordinates the agency’s enforcement of numerous federal environmental laws within its authority.

This is the second leadership role at EPA for Bodine, who brings significant experience in environmental law to the position.  She formerly served as Assistant Administrator for the agency’s Office of Solid Waste and Emergency Response—now called the Office of Land and Emergency Management—under President George W. Bush.  Before returning to the EPA, Bodine served as Chief Counsel for the Senate Environment and Public Works Committee, from 2015 until this August.  She also served as Counsel to the House Transportation and Infrastructure Committee, and was engaged in private legal practice.

When Congress enacted the Endangered Species Act (“ESA”) to protect and recover imperiled species and the ecosystems on which they depend, it emphasized the need to strike the proper balance between protecting species and allowing productive human activities. Widespread concern that this balance has been lost has sparked movement within the Trump Administration and Congress to improve the ESA and its implementation by the US Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) (together, the Services). Many of these reform efforts are focused on ensuring earlier and increased involvement of states and other regulated entities and on improving the listing/delisting process to make certain that the extraordinary protections of the ESA are imposed, where warranted, and lifted, as appropriate.

Now that the “Big Six”[1] have announced that they will release an agreed-upon tax reform plan the week of September 25, the question becomes: Can they actually get it done? Is there enough time, motivation and a clear path forward to get permanent tax reform done in 2017? The answer is yes, it could happen. Politics will be the driving force, and the budget reconciliation process will provide the opportunity.

Since President Trump’s inauguration and the beginning of Scott Pruitt’s tenure as administrator of the U.S. Environmental Protection Agency (EPA), much of the focus of Clean Air Act activity in the new administration has been on global climate change issues. As more time passes, however, EPA is beginning to address other areas of Clean Air Act regulatory policy, and, in some respects at least, charting a new course that departs from the record of the Obama administration. One of the areas to which EPA has started to give renewed attention is the regional haze program.

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.

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 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.

In a series of orders this week, the US Court of Appeals for the DC Circuit granted motions by EPA to pause cases challenging several Obama-era regulatory actions while the new administration reviews those rules. With those cases on hold, the dispute over the fate of those rules will move out of the courts and into the administrative process.

President Trump has already issued several executive memoranda directing federal agencies to expedite environmental reviews and approvals for all infrastructure projects (as noted in our post yesterday), with emphasis on high-priority matters, such as pipeline construction and an aim to boost steel manufacturing in the United States.  Specifically, he seeks to renew and expedite the approval of two oil pipeline construction projects, the Keystone XL Pipeline (Keystone) and the Dakota Access Pipeline (DAPL).  He has further directed the Commerce Department to prepare a plan under which all new and repaired pipe used in the United States would be manufactured stateside.