Surprise! New WOTUS Rule Leads to Conflicting Rulings

Posted on June 30, 2020 by Rick Glick

It was clear to everyone, including this humble blogger, that EPA’s new rule defining Waters of the United States (WOTUS) would bring little clarity to this fraught area of law.  The rule took effect June 22, but court challenges were already underway, and already we have conflicting rulings, described in this space by Seth Jaffe with his usual alacrity. 

Regardless of what ultimately emerges from this morass, recall that the states have authority of their own and that is probably where practitioners should be focusing in advising clients.  On the same day the WOTUS rule came into effect, the Oregon Department of Environmental Quality (ODEQ) issued a statement including a not too subtle warning about discharging pollutants into state waters without benefit of a permit. 

The ODEQ statement also speaks to state authority under CWA section 401, the subject of another recent EPA rulemaking, and a continuing source of litigation and uncertainty.  As Seth notes, the new WOTUS and 401 rules are complementary.  In its statement, ODEQ encourages project proponents to meet with the agency early for an evaluation of a “project plan.”  Such pre-application meetings are always a good idea—better to anticipate and address issues before they become controversial. 

All of this is pretty interesting for lawyers, but frustrating, time consuming and expensive for clients trying to discern a critical path for development projects.  Surely there is a better approach to ensuring clean water, but it is hard to see one emerging soon.

 

Woe Is WOTUS, Redux

Posted on June 30, 2020 by Seth Jaffe

Sometimes, history repeats itself.  Sometimes, that is not a good thing.

After the Obama WOTUS rule was promulgated in 2015, the challenges came fast and furious, and in multiple forums.  The Supreme Court, as I put it, adopted the “give me a break” theory over the “just plain nuts” theory, and ruled that challenges to the rule had to be heard in district courts.  The text of the statute made pretty clear that such challenges did belong in district courts, and the Supreme Court felt no need to address concerns that it was just plain nuts to have multiple courts reviewing this issue, leading to a patchwork of different rulings.  That’s Congress’s problem!

As anyone who remembers those halcyon days can attest, chaos did indeed result, with roughly half the states ending up subject to the Obama rule and half subject to the prior rule and the post-Rapanos guidance.

Now comes the Trump WOTUS rule, which became effective yesterday.  It looks like déjà vu all over again.  On Friday, two courts weighed in, with a judge in California declining to enjoin the rule and suggesting very strongly that EPA would prevail with its argument that the rule is entitled to Chevron deference, while a judge in Colorado enjoined the new rule, concluding that five justices in Rapanos precluded the new rule’s interpretation of WOTUS, thus barring any reliance on Chevron.

Other than saying “I told you so,” I think that the biggest takeaway so far is that, to the extent that the California decision carries the day, it’s also good news for fans of EPA’s recently released rule on section 401 water quality certifications.  It basically adopts lock, stock, and barrel EPA’s rationale for why it can ignore a seemingly contrary Supreme Court decision.  The short version is that the Supreme Court Brand X decision holds that, where the Supreme Court upholds an agency interpretation of an ambiguous statutory provision, that does not preclude the same agency from later adopting a contrary interpretation, so long as the new interpretation is also permissible under Chevron.

Time will tell which position prevails, at least in the lower courts.  This one does seem likely to make it back to SCOTUS.  For better or worse – likely worse – we might finally get some clarity on the definition of the waters of the United States.  Until then, I am confident that chaos will reign.

EPA Finalizes New Clean Water Act Section 401 Certification Rules—Will States Bite Back?

Posted on June 10, 2020 by Rick Glick

On June 1, 2020, the Environmental Protection Agency released its new rules implementing section 401 of the Clean Water Act (CWA). Section 401 provides that before a federal agency can approve a project that may result in a “discharge to the navigable waters” the applicant must obtain water quality certifications from the affected state. The certification encompasses compliance with water quality standards and “any other appropriate requirement of State law.”

However, the state is deemed to have waived its delegated authority under section 401 if it "fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request." The rules adopt the D.C. Circuit’s view in Hoopa Valley Tribe v. FERC that one year means one year, and they narrow the scope of conditions that states can impose on a project as part of the certification.

One Year Means One Year

The section 401 process has been controversial in the context of energy infrastructure projects requiring federal approvals, such as natural gas pipelines, LNG terminals and hydroelectric facilities. Historically, states have commonly avoided the one-year limit by allowing multiple cycles of withdrawal-and-resubmittal of 401 certification applications, stretching the review period over many years.

This in part was thought necessary to allow adequate time to assess the water quality effects and appropriate mitigation measures for complex facilities, which would often draw comments from many stakeholders seeking to influence the terms of a new certification. However, in Hoopa Valley the court rejected this workaround and denounced the withdrawal-and-resubmittal practice as a tool “for states to use Section 401 to hold federal licensing hostage.”

Shortly after Hoopa Valley, President Trump issued an Executive Order “Promoting Energy Infrastructure and Economic Growth,” for the stated purpose of making the regulatory process more efficient and creating “increased regulatory certainty.” Among other things, the Executive Order directed EPA to review federal policy and regulations on section 401 implementation in light of the Hoopa Valley decision.

With the new rules, EPA has adopted Hoopa Valley’s position that the one-year limit of section 401 actually means one year, and explicitly rejected state practices resulting in certification processes extending to several years. The rules make clear that upon receiving a complete 401 certification application, a state has one year to grant, grant with conditions, or deny the certification. Failure to do so will result in the state having waived its delegated authority with respect to the project under consideration.

Scope of 401 Certification Conditions

The Supreme Court has ruled that section 401 confers on a state broad authority to impose conditions on a water quality certification. In the 1994 case of PUD No. 1 v. Wash. Dep’t of Ecology, the Court found that water quality certifications could include conditions related to quantity of water flow, holding that a state could require minimum stream flows as part of the section 401 certification. Twelve years later, the Court found in S.D. Warren Co. v. Me. Bd. Of Envtl. Prot. that states have broad latitude in imposing conditions that are not directly water quality-related, such as provision for fish passage or recreation.

However, in the preamble to the rules, EPA found that nothing in the CWA nor section 401 contains any statement suggesting that section 401 “authorize[s] consideration or the imposition of certification conditions based on air quality or transportation concerns, public access to waters, energy policy, or other multi-media or non-water quality impacts.”

EPA reasoned that the phrase “any other appropriate requirement of State law,” often used to justify broad state authority, only included “those provisions of State or Tribal law that contain requirements for point source discharges into water of the United States.” The rejection of conditions not directly related to water quality seems to ignore Supreme Court guidance in PUD No.1 and S.D. Warren.

The Rules’ Prospects in Court

The new rules are certain to draw legal challenges from environmental groups and from states concerned that EPA’s interpretation denies them the full authority conferred under the statute.

EPA’s interpretation that one year means one year is consistent with Hoopa Valley and with subsequent decisions and may fare well in court.  However, narrowing the scope of the states’ authority to impose conditions on a certification will face serious judicial scrutiny in light of PUD No. 1 and S.D. Warren. In addition, opponents of the new rules may take issue with EPA’s authority, or lack thereof, to make rules governing how a program delegated to states should be administered.

Has President Trump Just Limited Enforcement To Willful Violations?

Posted on May 22, 2020 by Seth Jaffe

On Tuesday, President Trump issued an Executive Order on Regulatory Relief to Support Economic Recovery.  I’ll leave to others a discussion of the provisions telling agencies to look for more regulations to roll back.  I’m in general agreement with commenters who have said that those provisions don’t add much to Trump’s prior deregulatory efforts and are likely to face mostly the same reception in the courts as prior efforts.

Instead, I want to focus on this provision:

"The heads of all agencies shall consider whether to formulate, and make public, policies of enforcement discretion that, as permitted by law and as appropriate in the context of particular statutory and regulatory programs and the policy considerations identified in section 1 of this order, decline enforcement against persons and entities that have attempted in reasonable good faith to comply with applicable statutory and regulatory standards, including those persons and entities acting in conformity with a pre-enforcement ruling."

I hate to give the President too much credit, but this may be the most significant deregulatory measure he’s taken.  As far as I can tell, Trump is telling agencies that they should only take enforcement action against persons who willfully violate environmental laws.  It is true that the President only tells agencies to “consider” policies “consistent with law,” but I think we all know what President Trump means when he tells agencies to consider cutting regulated entities a break.

Because this provision involves the exercise of agency enforcement discretion, it will be much harder to challenge in court.  Certainly, written policies saying that an entire agency will always exercise enforcement discretion to prosecute only willful violations, even in the case of statutes that plainly provide for strict liability, might cause raised eyebrows among judges, but if the agencies actually care about the outcome and draft the policies carefully, they might well withstand judicial review.

My advice to my clients, and I mean this in all seriousness, is pretty simple.  Take steps to carefully document your good faith efforts at compliance – and keep a copy of this EO in your back pocket at all times.

Not So Fast! Oregon DEQ Objects to EPA’s Draft NPDES Permits for Lower Columbia River Dams

Posted on May 21, 2020 by Rick Glick

On May 15, 2020, the Oregon Department of Environmental Quality (“DEQ”) submitted a letter to the Environmental Protection Agency (“EPA”) in which it objected to EPA’s draft water quality discharge permits (“NPDES permits”) relating to four federal dams on the Lower Columbia River. The dams in question are Bonneville, The Dalles, John Day, and McNary. The U. S. Army Corps of Engineers (“USACE”) operates the dams, which are key elements of the Federal Columbia River Power System (“FCRPS”).

Section 402 of the Clean Water Act (“CWA”) requires a NPDES permit for discharges of pollutants from “point sources.” A point source is a defined conveyance for direct discharges of pollutants, like a pipe. Courts have considered dams to be nonpoint sources that do not require permits, as dams typically do not add pollutants, but merely pass upstream pollutants through their spillways. However, dams with hydroelectric facilities often discharge oily waste from onsite transformers, which could include PCBs.

On that basis, EPA has determined that each of the four Lower Columbia dams require a NPDES permit to cover the direct discharges resulting from power operations. EPA specifically did not address indirect discharges through the spillways or turbines.

Section 401(a)(2) requires that EPA notify states whose water quality may be affected by the permits, including Oregon. In its letter, DEQ notes that although the NPDES permits do not address pass-through pollutants, section 401 allows DEQ to consider potential violations of any water quality parameter resulting from total dam operations. DEQ therefore objects to the permits and requests imposition of certain conditions to meet numeric and narrative temperature criteria, total dissolved gas (“TDG”) levels, biocriteria, and toxics substances criteria.

For temperature, DEQ would require a temperature management plan with adaptive management elements to address a yet-to-be-developed Total Maximum Daily Load (“TMDL”). As expected, on May 18, EPA initiated the process for establishing a TMDL for temperature in the Columbia and Lower Snake Rivers. We will be tracking this process and reporting in future posts.

For total dissolved gas, DEQ requests that EPA require the USACE to implement additional monitoring measures to increase compliance with the existing TDG TMDL through adaptive management. With regard to biocriteria, DEQ is asking USACE to allow the use of best technology available (“BTA”) or Oregon Department of Fish and Wildlife (“ODFW”) recommended technology to reduce fish entrainment and impingement. If the technology implemented does not reduce impingement, USACE would be required to develop an adaptive management plan and submit it to DEQ for approval. Finally, DEQ would require additional measures to reduce PCB discharges from each project to ensure compliance with Oregon toxics substances criteria.

DEQ’s objection letter is the latest development in a long-running dispute involving the effects of FCRPS operations on salmonid species listed under the Endangered Species Act (“ESA”). Oregon is an intervenor plaintiff in a lawsuit brought by the National Wildlife Federation alleging that the 2014 Biological Opinion, and later iterations, violated the ESA.

Under the Clean Water Act, EPA will now be required to hold a hearing to address DEQ’s objections and requests. By extending its section 401 authority to the FCRPS saga, DEQ has raised the bar for the seemingly endless tension between the benefits and consequences of this massive public power system, which was established in an era preceding our organic conservation statutes. It has been a bumpy ride and will continue to be for the foreseeable future.

Will Federal Rollbacks Lead to the Rise of Localism?

Posted on May 19, 2020 by Jerry L. Anderson

Based on research from law professors at Harvard and Columbia, the New York Times reported this month that the Trump administration has reversed, or is in the process of reversing, almost 100 federal environmental regulations. The changes weaken federal protection across virtually every sector of environmental, energy, wildlife, and public lands law. While legal challenges to these rollbacks may lessen their impact, the Trump administration will at the very least have begun to turn the tide of federal environmental regulation.

Much commentary has centered around the negative implications of this federal regulatory contraction for the environment. The New York Times article, for example, quotes experts as predicting that the changes will “increase greenhouse gas emissions and lead to thousands of extra deaths from poor air quality each year.”

But could there be a more optimistic view of this tidal change in federal regulation, or at least a silver lining? One possibility is that the clear signals of federal retreat on environmental control could lead to a return to local responsibility for environmental quality tradeoffs.

The theory runs this way: Since the late 1960s, citizens have turned to the federal government to solve all of our environmental problems.  The “environmental decade” of the 1970s ushered in an era of federal control over every type of environmental problem, e.g., water, air, wildlife, and waste disposal.  In this area, as in many others, federal control has been virtually plenary, despite the retention of state agencies’ authority to enforce the federal mandates. Although many environmental acts reserve to the states the authority to enact stricter regulations, in many states federal regulation has become the ceiling, not the floor. See, e.g., Iowa Code Section 455.B.173(2)b, providing that state effluent limitations shall not be more stringent than those established by the EPA.

We know there were good reasons for introducing national level regulation.  For one thing, states fighting for economic growth seemed unable, or unwilling, to impose the cost of environmental controls on the providers of jobs and taxes, engaging in a “race to the bottom.” But the unfortunate downside of 50 years of federal control has been that, at least in some jurisdictions, local users now feel a diminished (or nonexistent) sense of responsibility for those natural resources.  Any environmental problem is now a federal problem, one the local community has little power to affect.  Worse still, for many the EPA has become the bogeyman, the bad guy in Washington imposing onerous regulations on us poor locals.

So what if the bogeyman is gone?  What if we view the rollback of federal authority as an effective invitation to turn back to those locals and say – “we’re giving this responsibility back to you.”  Like the teenager going off to college – how will they respond when the parents are no longer looking over their shoulders?

Of course, I am painting with a broad brush here – I know there are many examples in which states have taken back the reins or acted to augment federal regulations.  For example, some states moved quickly to protect wetlands left behind by limitations on federal control or enacted more expansive state versions of NEPA. Over the last couple of decades, state and local governments have taken the lead on issues such as climate change, when meaningful federal action was absent. Certainly, greater local control may be prevented or at least limited by preemption issues (either federal-state, or state-local). Moreover, for some environmental issues, spillover effects on other states absolutely cry out for federal intervention. 

Nevertheless, it’s worth considering whether the extraordinary campaign of federal deregulation we are witnessing might cause a broader shift in our attitude about environmental issues. If federal control is pared back, to those areas where it’s absolutely necessary, is it possible that will we empower locals to come together once again, to start making their own decisions about how clean they want their air, water, and land to be?

EPA’s War on Science

Posted on May 6, 2020 by Robert B. McKinstry, Jr.

Since its creation under President Nixon five decades ago, EPA has, for the most part, been an independent agency utilizing the best science available, even where the science led it to policy results contrary to the predilections of the party in power – that is until the Trump Administration.  Two recent actions by the Trump EPA, one final and the other proposed, exemplify the sad and stark departure by the Agency from this prior practice.

An example of the agency’s prior practice is the Advance Notice of Proposed Rulemaking issued following the Bush Administration’s defeat in Massachusetts v. EPA.  In that case, the agency staff drafted a lengthy and well-reasoned analysis indicating how greenhouse gases might be regulated under the Clean Air Act governed by the law and science.  The Bush Administration published that analysis, prefacing it with a number of letters by appointed officials presenting alternative views consistent with the Administration position rejected by the Supreme Court - - but the Agency’s well-reasoned analysis constituting the bulk of the notice was nevertheless published.

As noted, two recent actions by the Trump EPA represent a departure from this science-driven regulatory approach; they also share the distinction of being roundly condemned by EPA’s Science Advisory Board and the relevant scientific community.  Both have the transparent objective of preventing the adoption of regulations whose health benefits clearly outweigh their costs.  The two actions are: (1) the final rule reversing the necessary and appropriate finding underlying the Mercury and Air Toxics Rule (“MATS”), National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Reconsideration of Supplemental Finding and Residual Risk and Technology Review, Docket No. EPA-HQ-OAR-2018-0794 (“Revised Necessary and Appropriate Finding”); and (2) the proposal cynically entitled Strengthening Transparency in Regulatory Science, 83 Fed. Reg. 18768 (Apr. 30, 2018); Supplemental Notice, 85 Fed. Reg. 15396 (Apr. 17, 2020), Supplemental Notice, 85 Fed. Reg.21340 (Apr. 17, 2020) (extending comment period to May 18, 2020), proposing 40 C.F.R. pt. 30 (“Transparency Proposal”). 

Over the unanimous objection of the regulated industry and environmental groups, the Revised Necessary and Appropriate Finding reversed the Obama EPA’s finding that it was necessary and appropriate to regulate hazardous air pollutant emissions from the utility industry under section 112 of the Clean Air Act.  The finding that was reversed was made by the Obama EMA on remand from the Supreme Court’s decision in Michigan v. EPA, holding that EPA needed to consider cost in making a necessary and appropriate finding.  On remand, the Obama Administration EPA considered cost in several ways and renewed its finding that it was necessary and appropriate to regulate hazardous air emissions from the utility industry. 

After the change of administrations, the Trump EPA decided to revisit the necessary and appropriate finding and, in its Revised Necessary and Appropriate Finding, found that it was not necessary and appropriate to regulated hazardous air pollutant emissions from the utility industry (this was the fourth flip over four administrations on this issue).  The Revised Necessary and Appropriate Finding ostensibly left the substantive requirements of the MATS rule in place.  Indeed, the utility industry had already complied with those substantive requirements by either closing plants or installing control equipment. However, under the Clean Air Act, a necessary and appropriate finding is a prerequisite to regulating hazardous air pollutants from the utility industry.  EPA’s reversal of the finding therefore has the potential to increase its chance of success in the on-going challenges to the MATS rule.  Reversal of the rule could undermine the ability of regulated utilities to recover sunk capital costs.

In issuing the Revised Finding, EPA decided not to consider “co-benefits.” The vast majority of the monetized benefits arising from regulating air toxics from the utility industry arise from the fact that most of the toxic acid gases and fine particulates are a mixture of listed hazardous air pollutants and conventional pollutants.  It is, therefore, impossible in epidemiological surveys in most cases to segregate the impacts of the components that are listed hazardous pollutants from the impacts of the components that are conventional pollutants.  Moreover, the same pollution control equipment that removes the hazardous air pollutants will also remove the conventional air pollutants.  Thus, for example, hazardous hydrochloric acid, hydrofluoric acid and hydrocyanic acid all form acid aerosols having the same impact on the lungs as the nitric, nitrous, sulfuric and sulfurous acid aerosols formed from “conventional” NOx and SOx air pollutants; and the same treatment technologies will remove hazardous and “conventional” acid gases.  For that reason, the direct health benefits of controlling these pollutants are labeled as co-benefits, and, according to economists, can also be considered negative costs. 

In the Revised Finding, EPA, contrary to the recommendations of the Science Advisory Board, would exclude these benefits/negative costs, as well as non-monetized benefits, from its consideration.  Instead, EPA would consider only costs to benefits relating to control of a hazardous air pollutant whose impacts can be segregated from other pollutants that are not listed as hazardous and can be monetized.   

Because EPA did not reverse the requirements of the MATS rule, the only apparent reason for proceeding with the revised finding appears to be an intent to advance a rule for the consideration of costs that will make it more difficult to regulate pollutants in the future.  Most pollutants have a variety of impacts, are emitted into the atmosphere as a mixture of pollutants, mix with other pollutants in the environment, and have impacts on receptors that cannot be segregated.  For example, most of us have observed the blue skies and clear air resulting from the reduction in automobile, truck, and air traffic as a result of COVID-19 restrictions.  Under the rationale underlying the Revised Necessary and Appropriate Finding, proposals to reduce greenhouse gas emissions from these sources could not consider the many health, environmental and welfare benefits arising from reductions in NOx and fine particulates.  While perhaps that is the underlying intent, the rationale could also be extended to water pollution, hazardous and solid waste, and other regulations in the future.

The Transparency Proposal might seem to be a proposal that would promote sound science and good government procedure; it provides:

…when EPA develops regulations, including regulations for which the public is likely to bear the cost of compliance, with regard to those scientific studies that are pivotal to the action being taken, EPA should ensure that the data underlying those are publicly available in a manner sufficient for independent validation.

83 Fed. Reg. 18768.  In fact, the proposed regulation is an all too transparent attempt to preclude reliance on results that are crucial for the promulgation of regulations to protect health and the environment, even where those results have met the rigorous requirements of scientific peer review.

Most notably the proposal applies specifically to “dose response data and models” supporting a regulation, requiring that they be “publicly available in a manner sufficient for independent validation. . . in a fashion that is consistent with law, protects privacy, confidentiality, confidential business information, and is sensitive to national and homeland security.  40 C.F.R. § 30.5, proposed 83 Fed. Reg; 18773.  In fact, this qualification makes most data and studies critical to support regulations out of reach for agency reliance.  The underlying data in human health studies is invariably private information that, by the words of the proposal, would be unavailable, for example, many dose response animal studies are business confidential.  Additionally, most models upon which EPA relies are proprietary and are available only for a significant price.  The proposal would also seemingly preclude reliance upon metadata and review articles appearing in peer reviewed publications, since the proposal would require that the underlying data be available. 

In recognition of these fatal flaws, the proposal has been criticized by EPA’s Science Advisory Board and major scientific organizations.  Moreover, there has not been a showing of any need for the proposed regulation.  The only reasonable conclusion is that this proposed regulation, like the Revised Necessary and Appropriate Finding, is an effort to promote the Trump Administration’s anti-regulatory agenda contrary to the dictates of sound science, in short, a war against science.  There is still an opportunity to comment.  The comment period has been extended to May 18, 2020.

A Ray of Regulatory Sunshine

Posted on April 30, 2020 by Lynn L. Bergeson

We are all desperate for good news.  In my continuing efforts not to become further mired in the quiet despair we are all experiencing, I thought I would pass along some good news, ironically occasioned by the pandemic.

To help alleviate supply chain disruptions by pesticide registrants that manufacture disinfectant products included on List N, the U.S. Environmental Protection Agency (EPA), in March, announced it was taking action to help hasten the availability of EPA-registered disinfectants.  EPA explained that it is temporarily allowing manufacturers of select already-registered EPA disinfectant products to obtain certain active ingredients from any source without obtaining prior EPA approval. The action only applies to products listed on EPA’s List N: Disinfectants for Use Against SARS-CoV-2 (List N). For List N disinfectant manufacturers, EPA’s decision was very good news, and EPA has moved with extraordinary speed in qualifying products to be effective against the virus that causes COVID-19.  As of April 23, EPA now has over 400 such products, up from less than 100 such products pre-pandemic.

Typically, EPA requires disinfectant manufacturers to apply for and receive EPA approval prior to making a change in the source of the active ingredient.  Under EPA’s action, however, manufacturers can source certain active ingredients from alternate suppliers by simply informing EPA of the change.  Once EPA has been notified, the registrant can immediately distribute or sell a product modified according to this temporary amendment, provided that the resulting formulation is chemically similar to the current formulation.  Presumably after the crisis subsides, the program would revert back to the standard approval process.  Registrants would then be disallowed from releasing for shipment new registered product unless that product is produced using a source of active ingredient identified in the product’s approved Confidential Statement of Formula, or otherwise would have complied with relevant requirements in the absence of this temporary amendment.

When announcing its temporary action in March, EPA stated that it intended to assess the continued need for the temporary amendment on a regular basis.  More recently, EPA has done one better, resulting in yet more good news.  EPA Assistant Administrator Alexandra Dunn, our esteemed ACOEL colleague, announced on April 22, 2020, that EPA may well consider permanently dropping certain “administrative hoops” based on a review of the temporary policy after the coronavirus crisis subsides.  EPA’s commitment to review the “value added” of these and perhaps other administrative requirements, consider eliminating them, and possibly institutionalize the streamlined temporary approach could be a great take-away from the crisis and an unexpected benefit.  Any such decision would, of course, be firmly premised on the conclusion that in eliminating these administrative hurdles, there would be no risk to human health or the environment.

Crises have a tendency to sharpen focus and realign priorities.  Maybe this crisis will help distinguish essential requirements to protect health and the environment from non-essential, vestigial ones that we can all live without.

EPA Remains the “Anti-Environmental Protection Agency”; Wheeler Refuses to Tighten the PM 2.5 NAAQS

Posted on April 16, 2020 by Seth Jaffe

After more than three years of ignoring science whenever it does not support this Administration’s preferred outcomes, the issue of the future of science in environmental regulation has now been well and truly joined.  Yesterday, Administrator Wheeler, disagreeing with the recommendation of EPA’s own staff, announced that EPA is proposing to retain the current National Ambient Air Quality Standard for PM2.5 of 12 ug/m3, notwithstanding substantial evidence that PM2.5 poses significant risks even below 10 ug/m3

In the long-gone days prior to January 2017, this would be short and easy.  The Clean Air Science Advisory Committee would have said that the current standard is not protective.  NGOs and states would have sued, the D.C. Circuit would have vacated EPA’s decision, and even a right-leaning Supreme Court probably would not have thought it necessary to hear a further appeal.

Now, however, the Chair of CASAC doesn’t believe that epidemiology provides a basis for setting NAAQS and CASAC recommended keeping the current standard.  What happens when EPA’s owns science advisors don’t believe in science?  And what happens when the most outcome-based Supreme Court in living memory lies in wait?

I truly don’t know.  I suspect that the D.C. Circuit, depending upon the panel, might still find a decision to keep the current standard to be arbitrary and capricious, but I would not count on the Supreme Court affirming that decision.

In the meantime, I am curious about Administrator Wheeler.  Does he really believe what he is saying or does he just not care that this decision will fairly directly lead to thousands of additional deaths?  As EPA’s proposed rule acknowledges, NAAQS are standards,

"the attainment and maintenance of which in the judgment of the Administrator, based on such criteria and allowing an adequate margin of safety, are requisite to protect the public health."

Greenwire reports that Administrator Wheeler told reporters that “there’s still a lot of uncertainty” surrounding the research supporting the lower PM2.5 NAAQS.  Of course, since the statutory standard requires “an adequate margin of safety,” one would have thought that the uncertainty supports more stringent standards, rather than less stringent ones. Indeed, ever since Ethyl Corp. v. EPA, courts have been clear that EPA must be prepared to regulate even in the face of uncertainty if it is to fulfill its mission to protect the public.

I may not be able to predict what the courts will do, but I’m confident that history will not treat this Administration kindly.  Over time, there is little doubt that the evidence against PM2.5 is only going to grow stronger.  However, by the time a future administration acts on that accumulated weight of data, thousands of people will have died needlessly.

Well done, Mr. Wheeler.

If You Thought That COVID-19 Was Bad, Try It Mixed With Some PM2.5!

Posted on April 9, 2020 by Seth Jaffe

Last week, I discussed the Administration’s guidance concerning the exercise of its enforcement discretion during the COVID-19 pandemic. Now comes evidence that the guidance may actually be self-defeating.  While the administration is – understandably – trying to cut regulated industries some slack while they are trying to deal with COVID-19, it turns out that exposure to PM2.5 has a significant impact on the COVID-19 death rate.

study released earlier this week by researchers at the Harvard T.H. Chan School of Public Health concludes that an increase in the ambient PM2.5 concentration of just 1 ug/m3 causes an increase of 15% in the death rate from COVID-19.  And lest you think that the results stem from other factors unique to New York City and other places particularly hard-hit by the virus, the authors took into account all of the obvious confounding factors, including:

"population density, percent of the population ≥65, percent living in poverty, median household income, percent black, percent Hispanic, percent of the adult population with less than a high school education, median house value, percent of owner-occupied housing, population mean BMI (an indicator of obesity), percent ever-smokers, [and] number of hospital beds."

A 15% increase in the COVID-19 death rate for a 1 ug/m3 increase in PM2.5 is an extraordinary result.  At some level, we knew it already, but let me summarize very simply.  PM2.5 is really, really, bad for you.

And so we come back to this administration.  I’ll pass over the enforcement discretion memorandum and focus instead on EPA’s apparent decision not to change the current national ambient air quality standard for PM2.5.  Of course, the current chair of the SAB doesn’t believe in basing NAAQS on epidemiological studies, but for those of us who still believe in science, this study certainly only strengthens the case for reduction in the PM2.5 NAAQS.

MACT Follies

Posted on March 20, 2020 by Adam Babich

Data is in from EPA’s “work practice” requirement that petroleum refineries monitor ambient air for benzene concentrations around their fence lines. The regulations set an “action level” of 9 µg/m3 benzene, using benzene as a “surrogate” for fugitive hazardous air pollutants. The purpose? To “protect the health of the populations surrounding the facility, including minority and low-income populations.” EPA set the action level at a concentration that no refinery would exceed as long as its fugitive emissions estimates were “consistent with the level of fugitive emissions actually emitted.” In other words, if operators reported their fugitive emissions accurately, the benzene action level would be entirely theoretical.

Surprise! Benzene concentrations in air around 10 oil refineries blew the limit. The offending refineries include operations by major players such as Chevron, Shell, Marathon, Valero and BPF Energy. Does this tell us something about using unverified industry estimates of emissions as a basis for protecting public health?

In theory, the regulatory structure that governs hazardous air pollutants—such as benzene from oil refineries—is brilliant. It includes elements to appeal to fans of both “technology-based” and “risk-based” regulation. Technology-based standards require that facilities reduce dangerous pollution as much as practical given the state of the art. These standards are relatively straightforward to set and enforce. There is no guarantee, however, that technology-based standards will protect people from all excessive risks. In contrast, risk-based standards are designed to eliminate unacceptable risks, ideally with a margin of safety. Confidence in risk-based regulation, however, requires a leap of faith that risk assessment techniques will generate accurate results. Risk assessments tend to rely on questionable estimates of the amounts of chemical pollutants that people breath, drink, or absorb, and on controversial assumptions about what a safe level of exposure would be. The fact that people are exposed to many chemicals leads to further uncertainty about cumulative and synergistic risks.

Originally, Congress designed the Clean Air Act’s hazardous air pollutant program to use risk-based standards. The Act required EPA to set emission standards that would protect public health with an ample margin of safety. For EPA, this mandate raised the prospect of banning some chemicals completely, at least when “the only level … which would appear to be absolutely protective of health is zero.” The agency essentially froze up. As of 1990, EPA had only promulgated eight hazardous air pollutant standards.

Congress responded in the 1990 Clean Air Act Amendments. At least initially, that law shifted the hazardous-air-pollutant program to rest on technology-based standards. The Act required EPA to determine maximum achievable control technology (MACT) for a list of 191 chemicals. Congress, however, did not stop there. To ensure that a MACT standard is actually protecting the public, the Act mandates an EPA “residual risk” analysis within six years of the promulgation of technology-based limits. This sounds like the best of both the technology-based and risk-based approaches—right?

But look at EPA’s historical approach to residual risk: In Natural Resource Defense Council v. EPA, the D.C. Circuit reviewed EPA’s 2006 analysis of risk from facilities that use or produce synthetic organic chemicals. EPA relied on the results of an American Chemistry Council questionnaire with a 44% response rate. Why? The agency explained, inter alia, that reliance on “industry sources is a well-established practice” and it would have been “very costly and time-consuming” for the agency to require collection and submission of data. EPA’s approach survived the appeal.

With respect to the 2015 petroleum refineries rule: Hats off to EPA for its innovative work-practice/fenceline-monitoring approach. Because the monitoring results illustrate the fallacy of continued reliance on industry estimates of fugitive emissions, the agency should now expand the fenceline-monitoring approach to other sectors.

Modern Day Alchemy: New Help for Treating Acid Mine Drainage

Posted on March 11, 2020 by Robert Uram

Two promising new technologies—recovery of rare earths from acid mine drainage (AMD and conversion of AMD treatment by-products to paint pigments are bringing new hope to remediating AMD polluted streams. These technologies are a kind of modern day alchemy—restoring streams that are orange and lifeless by turning pollution into economically valuable products and creating new jobs for local economies. The development of economically viable treatment processes is a game changer for AMD treatment with potentially huge benefits for national security, local economies, and restoration of the health of thousands of miles of now lifeless streams.

Rare Earth Recovery

West Virginia University’s Water Research Institute director, Paul Ziemkiewicz, PhD, has been at the forefront of researching AMD issues and developing AMD remediation techniques for decades. Dr. Ziemkewicz has developed a process that can extract rare earths from AMD.  As explained more fully in Rare Earths Funded, last fall he received a 5 million dollar grant from the Department of Energy to build a pilot plant in conjunction with the WVDEP that will extract rare earths while treating 500 gallons of AMD per minute. Dr. Ziemkewicz estimates that AMD flows could be the source of as much as 2200 tons of rare earths a year.

Rare earths are a critical component in many products including cell phones.  Rare Earths Funded explains that, “Rare earth metals consist of the 17 chemically similar elements at the bottom of the periodic table, such as cerium and scandium. Despite their name, they're not "rare" because they're often found in other minerals, within the earth's crust or, in this case, in coal and coal byproducts.” Most of the 20,000 tons of rare earths we use are imported, mainly from China. The initial plant will be located on Abrams Creek, a tributary to the North Branch of the Potomac River and will benefit at least 17 miles of stream.

Paint Pigments

Rural Action is a watershed organization that has been involved in restoring AMD damaged streams since 1991. Recently, they have partnered with Ohio University Professor Guy Riefler, and the Ohio Department of Natural Resources to develop a process that transforms iron from AMD into marketable paint pigments in a process called True Pigments, https://www.ohio.edu/news/2019/12/acid-mine-drainage-cleanup-plant-moves-closer-full-scale-thanks-3-5m-award. They have received a 3.5 million dollar grant from the OSMRE to partially fund the development of a treatment plant. The initial plant will treat a large discharge in the Sunday Creek watershed in Athens County, Ohio, that pollutes a seven-mile stretch of Sunday Creek with 2.2 million pounds of iron each year.

The True Pigments process treats polluted water, removing iron oxide, to yield a commercial grade of iron pigment, which can be used in paint production. The United States uses about 224,000 tons of paint pigment each year, most of which is imported from China.  The first True Pigments plant is anticipated to meet one percent of that supply.  Rural Action is still seeking an additional four million dollars needed to build the treatment facility.

In the past 25 years, with the active support of dozens of watershed groups like Rural Action and Friends of the Cheat River in West Virginia and state and federal agencies, hundreds of projects have been implemented and many hundred miles of AMD-polluted streams have been brought back to life. Formerly dead streams are now brimming with fish and other aquatic species. Local communities have the benefit of clean water.

The bulk of the funding for these restoration projects has come in the form of grants to State Abandoned Mine land programs from Surface Mining Control and Reclamation Act’s Abandoned Mined Land Fund and from EPA’s Clean Water Act Section 319 grant program. These funding sources are simply insufficient to address the vast scope of AMD problems (which are only a part of the overall need to address the health and safety and other environmental effects from abandoned coal mines).  In addition, new revenue to the Abandoned Mined Land fund is currently scheduled to expire in 2021.

The rare earth and True Pigment processes can help address the funding shortage by providing an additional, independent source of funding for AMD remediation. They will be important tools in the decades to come as the battle continues to restore more than 7000 miles of streams polluted by AMD from abandoned coal mines continues in Pennsylvania, West Virginia, Ohio, Virginia, Maryland, Kentucky, Tennessee and Alabama.

Little Bear Run, Pennsylvania (Before and after Treatment)

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Shaping the Future of EPA

Posted on January 29, 2020 by Ridgway Hall

What should EPA and environmental protection look like in the future? A report issued by American University’s Center for Environmental Policy in December, entitled Moving Forward: Future Directions for EPA and Environmental Protection, provides 6 principal recommendations.

The report was written by John Reeder, Executive in Residence at the Center and a 30-year veteran of EPA, based on a conference that was cosponsored last April by AU’s School of Public Affairs (where the Center is housed), its law school and ELI, with a talented and diverse field of speakers including 4 former EPA Administrators.  It was also informed by 5 focus group reports prepared by the EPA Alumni Association, which helped organize the conference.

At ACOEL’s October meeting, Dan Esty issued a challenge to us to undertake a multi-year project to transform our environmental protection framework from the existing “command and control” regulations to one using primarily market-based incentives. On November 21, I posted a blog article titled Dan Esty’s Challenge to ACOEL: Let’s Do It. I pointed out that 25 years ago a wave of thoughtful studies recommended moving away from command and control regulation towards systems featuring multimedia permitting, ecosystem-wide approaches, financial incentives, marketable pollution rights and other innovations, but that very little had come of these.

So what’s changed? Among other things, there appears to be an increasing recognition that when a company acts because it is in its financial interest to do so rather than because a regulation is requiring it to do so, it is more economically efficient (the transaction costs are lower) and the managers are likely to feel better about the fact that they were free to make the choice. Shifting the emphasis in the implementation of environmental laws in this way can yield better outcomes within the underlying regulatory framework. This translates to political acceptance by both industry and the public. In addition, thanks in part to the internet, we have more scientific, technical and economic data regarding environmental issues, we have far more sophisticated methods of using and transmitting that data, and we have more sophisticated abilities to monitor actions and impacts.

Furthermore, the nature of our environmental challenges has expanded to include climate change, energy policies, loss of biodiversity, agricultural practices, water availability and distribution (not just quality), land use, and the environmental behavior and effects of manufacturing wastes like endocrine disruptors and microplastics. Many of these issues must be addressed by multiple federal departments or agencies (Interior, Energy, Agriculture, NOAA  and the Corps of Engineers to name a few). Some, like climate change and the protection of oceans and fisheries, must be addressed on an international basis. Most of these issues cannot be effectively addressed through regulatory controls alone. Finally, issues relating to allocation of costs, environmental justice and public acceptance have become more prominent.

The challenges facing EPA are of two types: 1) threats to the environment or human health, and 2) “system” challenges, reflecting in large part the statutory framework under which EPA addresses those threats. The AU report focuses on EPA’s institutional capacity rather than on  specific policy proposals. The 6 major recommendations are as follows:

  1. Pursue State of the Art Science Capability. EPA will need to keep abreast of rapidly emerging scientific challenges, manage data from numerous sources, and reestablish technical assistance as part of its core mission. Sound science must be a top priority.
  2. Renew the “Environmental Protection Enterprise”. This involves striking the right balance in its relationships with states and tribes between maintaining a level playing field and encouraging flexibility and innovation, partnering with private sector entities, and focusing on outcomes rather than just regulatory compliance. It includes working with other federal agencies and encouraging regional approaches involving multiple layers of government and the private sector (“cooperative federalism”), such as the Great Lakes and Chesapeake Bay initiatives.
  3. Strengthen International Cooperation. Because many of our biggest environmental challenges are global, like climate change and protection of ocean resources, EPA should work with the State Department and other relevant agencies to strengthen relationships with other countries and international organizations to share information and address these issues on an international scale.
  4. Harness the Power of Consumer Choice and the Marketplace.The use of pollution pricing, cap and trade programs and other market-based incentives should be promoted, with existing regulations largely left in place as a backstop. EPA should continue to encourage corporate sustainability programs, public information campaigns like the Toxic Release Inventory and ecolabeling.  
  5. Advance a Forward-looking Regulatory System. EPA’s regulatory programs should anticipate rapid technological change and make use of vastly expanding monitoring and reporting technologies. They should emphasize transparency and public accountability, help reduce the “overhead” costs of regulations, and include market-based approaches wherever possible.
  6. Engage the Public to Raise Awareness About the Environment. EPA should promote public awareness and education from elementary school through college on environmental issues, challenges and opportunities. Its regional offices should work with state and local entities to make scientific information and teaching materials and online instruction available.

There is a lot more in this report than I can summarize here. It is thoughtful and important reading for anyone interested in the future direction of EPA and environmental protection.

When is risk reduction not a benefit?

Posted on January 7, 2020 by Adam Babich

EPA filed a status report on October 15 in the slow-moving mercury and air toxics (MATS) litigation, which is now Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir., filed April 26, 2016). The case is a challenge to EPA standards for coal-fired power plants that have been on the books since April 16, 2012, despite a U.S. Supreme Court remand in Michigan v. EPA, 135 S. Ct. 2699 (2015), followed by a D.C. Circuit decision not to vacate, White Stallion Energy Center v. EPA, 2015 WL 11051103 (D.C. Cir. 2015), cert. denied, 136 S. Ct. 2463 (2016), and the pending 2016 challenge to an EPA supplemental finding. EPA’s October 15 status report says that the agency has sent OMB a draft final rule regarding its proposal—published in February 2019—to withdraw its finding that a MATS rule is “appropriate and necessary” while leaving the applicable emission standards in place. 84 Fed. Reg. 2670 (Feb. 7, 2019). These proceedings retain a relevance apart from their utility in illustrating the occasionally bizarre nature of the world in which we live and litigate.

EPA’s proposal would, among other things, implement a new approach to analyzing the benefits of a regulation. Specifically—when calculating benefits for purposes of determining whether regulation of hazardous air pollutants is appropriate—EPA would eschew consideration of “co-benefits” flowing from accompanying reductions in emissions of other pollutants, such as nitrogen oxides, sulfur dioxide, and fine particulate matter. Thus, “if the HAP [Hazardous Air Pollutant]-related benefits are not at least moderately commensurate with the cost of HAP controls, then no amount of co-benefits can offset this imbalance for purposes of a determination that it is appropriate to regulate under CAA section 112(n)(1)(A).” 84 Fed. Reg. at 2676. The idea is that non-HAP benefits should not receive “equal consideration” because criteria pollutants “are already addressed” by another regulatory program. Id. at 2677.

The analysis is reminiscent of EPA’s infamous Select Steel opinion, which dismissed an environmental-justice complaint. EPA File No. 5R-98-R5. In that 1998 opinion, the agency found that because the NAAQS for ozone “has been set at a level that is presumptively sufficient to protect public health and allows for an adequate margin of safety … there is no affected population which suffers ‘adverse’ impacts within the meaning of Title VI resulting from the incremental VOC emissions [that do not cause NAAQS violations].” There could be no disproportionate impact on a minority community that met NAAQS because there was no “adverse” impact at all!

The conclusion that achievement of NAAQS eliminates risk ignores a reality that Congress perceived when it amended the Clean Air Act in 1977. Congress recognized the need to protect people from harmful exposures “notwithstanding attainment and maintenance of all national ambient air quality standards.” 42 U.S.C. § 7470(1). The legislative history acknowledges, “The idea that the national primary standards are adequate to protect the health of the public has been belied.” H.R. Rep. No. 95-294 at 112 (May 12, 1977) (accompanying H.R. 6161). Senator Muskie—the father of the Clean Air Act—explained, “[T]here is no such thing as a threshold for health effects,” S. Deb. on S. 252, 123 Cong. Rec. 18,460 (June 10, 1977). “Even at the national primary standard level, which is the health standard, there are health effects that are not protected against.” Id.

“Appropriate” is an “all-encompassing term that naturally and traditionally includes consideration of all the relevant factors.” 135 S. Ct. at 2707 (quotation marks and citation omitted). Just as it was not “appropriate” for EPA to ignore costs when deciding to promulgate MATS, id., it would be inappropriate to ignore the benefit of lives saved because of ancillary reductions of criteria pollutants.

The Bees Just Got Busier: EPA Approves New Fungicide to be Delivered by the Bees Themselves

Posted on December 20, 2019 by Richard Horder

EPA has been a hive of activity regarding the declining bee population. The agency recently approved an organic fungicide that is to be delivered to crops via “bee vectoring”—a process by which commercially-reared bees walk through trays of pesticide powder, collecting it on their legs and fur. The bees are then released into the wild, and when they land on flowers to collect pollen, the pesticide is distributed directly to the source. It’s true! I am not pollen your leg here.

The fungicide, Clonostachys rosea strain CR-7 (also known as “Vectorite”), is aimed at protecting “high value” crops such as almonds, blueberries, strawberries and sunflowers. The fungicide’s creator, Canadian company Bee Vectoring Technology International (BVT), claims it is a “naturally occurring, non-genetically modified, unique fungus found throughout the world”—in other words, totally bee-nign. 

BVT had to seek approval from EPA for this unique fungicide and distribution process. Section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA) authorizes EPA to set tolerances, or maximum residue limits, for pesticide residues on foods. Without such a tolerance, food containing residue is subject to seizure by the government. EPA approved an exemption from this tolerance requirement for residues of Vectorite in August 2019, finding that it is “safe” within the meaning of FFDCA. Vectorite is the first pesticide EPA has ever allowed to be deployed by bees—a bee-utiful use of the exemption.

Here is what all the buzz is about: Vectorite may be a win-win for bees and struggling crops alike. Bumblebees have been declining at an alarming rate in the U.S. in recent years, and studies show that common chemical fungicides are responsible for at least 70% of this decline. These fungicides are traditionally applied via spraying, an imprecise method which requires more product than necessary, with the rest ending up in water sources or on land—a stinging result for the environment and bees alike. But the use of bee vectoring, a highly precise distribution method, may end up replacing the use of these traditional fungicides, thereby bolstering the declining bee population. It seems like bee vectoring is the bee’s knees and a honey of a solution!

But now for the buzz kill: some biologists believe the fungicide may prove harmful to the busy bees who deliver it. Sheila Colla, a conservation biologist at the University of York, thinks that farmers will continue to use insecticides in addition to Vectorite to combat fungal diseases. Not only that, but there is also the potential that this method will adversely affect the wild bee population. The rusty-patched bumblebee (Bombus affinis), listed as endangered under the Endangered Species Act just two years ago, may very well have “[rapidly declined] because they were exposed to a novel disease from managed bees.” For more on the rusty patched bumblebee, see an earlier blog post of mine, Bumble Bee Buzzkill.

The question is, then (with apologies to Shakespeare): “to bee, or not to bee?” Even if Vectorite is not the solution to the plight of the American bumblebee, hopefully it will, at the very least, make farmers buzz off of the large-scale application of harmful chemical fungicides.

Should Someone be Reading The SEP Policy its Last Rights?

Posted on December 5, 2019 by Heidi Friedman

Chances are if you have been on either side of a settlement for an environmental violation over the past 20 years, you have discussed and/or negotiated a supplemental environmental project (SEP) as part of the overall resolution of a matter.  SEPs are projects that go beyond what is required by law, although the projects do have to have a “nexus” to the violation being addressed.  Settling parties can receive a credit toward mitigation of the civil penalty for a portion of the value of funds spent on implementing SEPs, and SEPs are the favorite child of many since a quality SEP can close the gap on a contentious penalty negotiation – visualize a bridge that pops up bringing two sides together.  Instead of building these bridges, the Asst. Attorney General’s August 21, 2019 Memorandum analogizes SEPs to elephants explaining that “Congress does not ‘hide elephants in mouseholes’ (citing Gonzales v. Oregon, 546 U.S. 243, 267 (2006)) and if Congress had intended the use of such a “controversial miscellaneous-receipt-circumvention device[], it would not have done so without mentioning SEPs by name.”  And while the elephant/mousehole analysis relates specifically to an interpretation of the 2018 Clean Water Act Amendments, it still seems challenging to think of such a long-accepted settlement tool as now being the elephant in the room. 

The August 2019 memorandum all but eliminates SEPs for civil consent decrees and settlement agreements with state and local governments, which at first read may be seem a narrow focus.  Yet, the grounds set forth in that memo and related analysis provide a clear path for this Administration to fully exterminate this elephant or at least put it to rest for now.  One recent example is in July 2017, when DOJ modified a finalized settlement with Harley Davidson in a Clean Air Act case by removing the SEP.  This left the American Lung Association without its project to retrofit or change out wood-burning fireplaces and left Harley Davidson paying a larger penalty.  From the defense side of things, many companies favor SEPs since a SEP can allow the company to support an innovative project that can truly benefit a community’s local environment.  And to be transparent, there can also be potential tax advantages while penalties are not tax deductible. Keep in mind that the SEP does not replace the payment of a penalty, it supplements and somewhat mitigates the potential penalty payment that might have been sought and obtained.

Yet, what we are seeing is a clear signal that money is the only path to resolution.  The crux of Clark’s analysis and any debate over SEPs is that SEPs are seen as “…mechanisms for sidestepping the power of the purse.”  (citing to H.R. Rep. 115-72, at 5-6) or said in another way, “…implicating Congress’ constitutional power over appropriations.”  The Clark view is that Congress should be able to spend its penalty funds as it pleases whether its defense spending or the opioid crisis, without any nexus to the alleged violation, and thus, allowing a SEP to direct funds in a manner that serves narrower statutory purposes interferes with this autonomy.  Don’t get me wrong, we need government intervention in the opioid crisis, but do we further the purpose of our environmental laws when we are just collecting as much penalty money as possible?  Using environmental penalty policies to fund another defense tank for example seems counter intuitive to the intent of the Clean Water Act or the Clean Air Act in the first place.  While I am certainly not a constitutional scholar, I do know that we have the judiciary reviewing and approving SEPs as part of the Consent Decree process providing a further check on the scope and direction of this often favored alternative. 

For you elephant lovers out there, EPA does seem to be keeping the policy alive and well at the moment as the memo is not even posted to the SEP page on its website.  According to the EPA 2018 enforcement statistics, the value of SEPs in settlements jumped from 17.75M in 2017 to 28.93M in 2018.   Further, in FY2018, EPA enforcement cases included 100 SEPS.   Looking at the last 10 years (2008 to 2018), the total value of 1,418 SEPS was $577M. This is not peanuts no matter how you look at it, but here’s hoping we are able to keep the elephant alive and well.

Confidentiality of “Voluntary” Submittals to EPA

Posted on November 25, 2019 by Stephen Gidiere

When is the confidentiality of sensitive information provided at EPA’s request protected?  In Food Marketing Institute v. Argus Leader Media (“FMI”), the Supreme Court addressed the question, but uncertainty remains.

It happens at least once in every television crime drama.  The police bring in for questioning the prime suspect.  After an initial back and forth, it becomes apparent they have no warrant or enough evidence to hold the suspect, who then asks:  “Am I under arrest?”  “No,” the police respond.  “You are free to leave.”  But of course, they never do.  In reality—warrant or not—the suspect is stuck there.

For years, the same drama repeated itself countless times for companies and individuals facing requests from EPA for confidential business information and, understandably, concerned about the further dissemination of sensitive data submitted to EPA via the Freedom of Information Act (“FOIA”).  While FOIA Exemption 4 provides that “trade secrets and commercial or financial information obtained from a person and privileged or confidential” are exempt from further disclosure, determining whether certain information is protected is no simple task, thanks mostly to a web of court decisions interpreting Exemption 4.

For decades, the inquiry began by asking whether the information was submitted to EPA “voluntarily.”  That’s the test the D.C. Circuit established in its 1992 Critical Mass decision.  If the information was submitted voluntarily, then the submitter could protect the information by simply showing it was not the kind of information that it normally releases to the public.  If the information was compelled or required, then the submitter would have to meet a more stringent “competitive harm” test.

And so debates raged over what exactly it meant to provide the information “voluntarily.”  If the submitter objected to EPA’s statutory authority to issue the request, but submitted the information anyway, was that “voluntarily?”  Did EPA have to issue and enforce a subpoena to defeat such a claim?  Or was it enough that EPA possessed authority to do so, even if not exercised?  In reality, like the suspect, the submitted was never really free to leave, right?

But thanks to the Supreme Court’s recent decision FMI, submitters of information to EPA have been liberated from their imaginary chains!  In FMI, the Supreme Court held that the “competitive harm” test is “inconsistent with the terms of statute” and rejected the D.C. Circuit’s “casual disregard of the rules of statutory interpretation” in formulating that test.  In addition, the Court found “no persuasive reason” to distinguish between “voluntary” and “required” submissions.  Instead, the Court held that all submissions should be evaluated for Exemption 4 coverage based on whether the information is “customarily and actually treated as private by its owner.”

So, now submitters are in control, right?  Not so fast.  The Court also found that Exemption 4 may not apply unless the information was “provided to the government under an assurance of privacy,” arguably putting EPA and other agencies back in control.  Should submitters insist on such an assurance before submitting their information and data?  Sounds likes it is time to lawyer up.

Will The PM NAAQS Be the Real End of Agency Deference?

Posted on October 31, 2019 by Seth Jaffe

According to Bloomberg Environment (subscription required), EPA’s Clean Air Science Advisory Committee cannot reach agreement whether to recommend that the NAAQS for PM2.5 be lowered.  Even after two years, I guess I had not realized the extent to which the scientists relied on by this administration are willing to ignore what used to be generally known as the “scientific consensus.”

As I reported last month, EPA’s Office of Air Quality and Standards released a draft reassessment of the adequacy of the PM2.5 NAAQS.  The draft states that:

"The risk assessment estimates that the current primary PM2.5 standards could allow a substantial number of PM2.5-associated deaths in the U.S.

When taken together, we reach the preliminary conclusion that the available scientific evidence, air quality analyses, and the risk assessment, as summarized above, can reasonably be viewed as calling into question the adequacy of the public health protection afforded by the combination of the current annual and 24-hour primary PM2.5 standards."

Based on the analysis in the draft, it seemed obvious to me that EPA would have to lower the NAAQS to somewhere between 8.0 ug/m3 and 10.0 ug/m3.  I assumed and predicted that EPA would propose to lower the standard as little as possible, to 10.0 ug/m3. 

It turns out that four out of six members of EPA’s significant reconstituted Clean Air Science Advisory Committee think that the current standard should be retained.  I doubt that the American Lung Association will agree.

I have previously speculated, in connection with matters ranging from BLM standards for methane emissions on federal lands to the EPA/DOT decision on CAFE standards, that, if this administration consistently flouts the scientific consensus on appropriate regulatory standards, then, at some point, courts will stop deferring to agency “scientific” conclusions.  I now wonder whether the PM2.5 rule will be the breaking point.

It’s still more likely that a court would simply rule within the confines of existing jurisprudence that a decision by EPA to retain the current PM2.5 standard would be arbitrary and capricious, even given traditional deference.  However, I wouldn’t rule out the possibility that a court will at some point conclude that the administration has forfeited the deference it would otherwise have gotten.

When agencies just make up the science, Chevron seems almost beside the point.

Environmental Protection Is an Afterthought at the Environmental Protection Agency

Posted on September 17, 2019 by Seth Jaffe

Last week, EPA and the Army Corps of Engineers promulgated the final rule repealing the 2015 rule defining the Waters of the United States. The repeal rule is 172 pages in its pre-publication version.  The word “science” is used 18 times in those 172 pages.  Almost all of them are used in quotes from the 2015 rule or characterizations of the intent of the 2015 rule.

I did not find a single sentence in the repeal rule stating that the science does not support the 2015 rule.  As I noted when the Supplemental Notice of Proposed Rulemaking was issued, the mission of EPA and the Corps is to protect the Waters of the United States.  If they’ve concluded that the text of the Clean Water Act doesn’t give them the authority needed to do so, the Administration could certainly propose amendments to the CWA to give them that authority.

That’s what used to be called “governing.”

If It Walks Like a Duck and Talks Like a Duck, It May Still Not Be Sauce for the Gander

Posted on August 23, 2019 by Seth Jaffe

Earlier this week, the D.C. Circuit Court of Appeals held that the “Wehrum Memo,” which reversed EPA’s longstanding policy of “once in, always in” regarding MACT jurisdiction, was not final agency action subject to judicial review.  Like Judge Rogers, I dissent. 

The majority makes much of its effort to clarify this “byzantine” area of the law.  My take is that, to the extent the court has succeeded in that effort, it is only by reducing the law to this simple rule:  If the guidance document appears to impose obligations on the regulated community, then it is a regulation and can be challenged.  If it lessens obligations on the regulated community, then it is guidance and may not be challenged.

This may benefit my clients, but seems an odd view of the law.

The majority and dissent agreed that the Wehrum Memo was the “consummation” of EPA’s decision making process.  The question thus became whether it constituted an agency action “by which rights or obligations have been determined, or from which legal consequences will flow.”  The Court concluded that the Wehrum Memo does not have such an effect, because parties currently subject to MACT can only take advantage of EPA’s new policy by seeking to amend their Title V permit, and states can ignore the Wehrum Memo and permits can, in any case, always be appealed.

However, as Judge Rogers’s dissent noted, the Court pretty much had to ignore the decision Appalachian Power v. EPA, in which the Court stated that “’rights’ may not be created, but ‘obligations’ certain are….  The entire Guidance … reads like a ukase.”

When one reads Appalachian Power together with Sackett v. EPA, one conclusion becomes clear – courts are not going to allow agencies to promulgate guidance that allows them to exercise coercion against regulated entities who face significant costs and risks if they ignore the enforcement implications of agency “guidance.”

On the other hand, the courts seem to have concluded, if the guidance benefits the regulated community, then there is no harm to making those who want to challenge the guidance wait until some formal appellate opportunity becomes ripe at some point in the future.  However, as Judge Rogers pointed out, “legal consequences flow” from the Wehrum Memo as soon as major sources take enforceable limits to get below MACT thresholds.

I’m very skeptical that the decision contributes towards “clarifying this somewhat gnarled field of jurisprudence,” unless the Court really does intend the law to be that regulated entities can challenge guidance, but others cannot.

Woe is WOTUS

Posted on June 7, 2019 by Seth Jaffe

When the Supreme Court decided that the district courts had jurisdiction over challenges to the Obama administration WOTUS rule, I described it as a victory of the “give me a break” doctrine of statutory interpretation over the “just plain nuts” theory.  I also noted that the Supreme Court had the luxury of ignoring the chaos that would ensue.

Whatever one may think of the merits of the competing theories, two district court decisions in the past week have made clear that it is, indeed, just plain nuts to have these cases before the district courts.

First up, Texas v. EPA, in which Judge George Hanks (an Obama appointee, no less) ruled that EPA and the Corps of Engineers had violated the Administrative Procedure Act in two ways by promulgating the 2015 Rule.  First, while the proposed rule had defined “adjacent waters” based hydrogeological criteria, the final rule used specific numerical distance criteria instead.  The Court concluded that the use of distance criteria was not sufficiently anticipated in the proposed rule and thus EPA violated the APA when it failed to take comment on the new approach.  Judge Hanks also concluded that the 2015 Rule violated the APA because the Agencies relied on what is known as the “Final Connectivity Report,” even though the comment period closed before the Final Connectivity Report was available.  As a result, Judge Hanks remanded the 2015 Rule to the Agencies “for proceedings consistent with this order.”  Of course, the Agencies have already announced that they intend to replace the 2015 Rule, so I think we all know what those proceedings will be.

Next up, Oklahoma v. EPA, in which Judge Claire Eagan (a Bush appointee, no less!), refused to issue a preliminary injunction against the enforcement of the 2015 Rule.  Simply put, Judge Eagan was not persuaded by any of the declarations submitted by the plaintiffs that they would suffer irreparable harm if the 2015 Rule were to remain in effect in Oklahoma.  She described them as “speculative.”  This was particularly troubling because:

the 2015 Rule has been in effect for varying periods of time since this case was filed, and the State can identify no evidence of an aggressive expansion of federal regulation of Oklahoma waters. … This case has been pending for nearly four years, and the Court would have anticipated a showing of substantial, actual harm in support of a motion for preliminary injunction.

We now have a situation where an Obama appointee has remanded the 2015 Rule and a Bush appointee has refused to enjoin its enforcement.  I do get some pleasure from these two judges upsetting preconceived notions in this partisan age about what judges do and how they decide.

Beyond that, however, I have no idea what these cases mean for the enforcement of the 2015 Rule.  I understand that this may all soon be moot, but in the meantime, it’s hard to defend this as a logical system of judicial review of agency action.  Indeed, I might even go so far as to say that it’s just plain nuts.

North to the Future: Alaska and the Risks of Pursuing a Trump Legacy

Posted on April 5, 2019 by Peter Van Tuyn

On the last Friday in March, Judge Sharon Gleason of the Federal District Court for the District of Alaska issued two opinions in closely-watched cases* concerning federal public lands and waters in and offshore of Alaska.  In both cases, the Trump administration’s actions were overturned by the court, having immediate impact on two State of Alaska priorities and potential impact on a number of other State and private development efforts. 

The first case concerns a land trade approved by Interior Secretary Ryan Zinke in which the United States agreed to transfer formal Wilderness in the Izembek National Wildlife Refuge to an Alaska Native Corporation.  Izembek Refuge is internationally significant and of critical importance to many species of wildlife, including migratory waterfowl.  For example, virtually the entire global populations of Pacific Brant and Emperor Geese migrate through Izembek.  The land trade was intended to enable the construction of a road between the Alaska communities of Cold Bay and King Cove.  In multiple analyses since the 1980s the Interior Department had found that such a road would harm wildlife in the Refuge.  In 2013 Interior Secretary Sally Jewell formally rejected a land trade due to harm it would cause to “irreplaceable ecological resources,” and because “reasonable and viable transportation alternatives” exist between the communities.  In 2018, Secretary Zinke reversed course and approved the land trade.  A coalition of conservation groups then sued.

In rejecting the land trade, Judge Gleason found that Secretary Zinke had not addressed anywhere in the record his reasons for reversing course; indeed, he had not even acknowledged the change in agency position. Relying on the seminal U.S. Supreme Court administrative law cases of Motor Vehicle Manufacturers v. State Farm and FCC v. Fox, which require an acknowledgement and reasoned explanation for such a change of course, Judge Gleason invalidated the land trade, writing that while a court should “‘uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,’ a court may not ‘supply a reasoned basis for the agency’s action that the agency itself has not given.’”

Later that same day Judge Gleason issued an opinion in a challenge to a 2017 President Trump executive order concerning areas where offshore oil and gas leasing can take place.  In that case, conservation organizations and an Alaska Native-focused NGO challenged Trump’s  revocation of President Obama’s earlier withdrawals from oil and gas leasing of most of the United States’ Arctic Ocean and a number of canyons within the Atlantic Ocean. 

This lawsuit turned on an interpretation of presidential withdrawal authority under the Outer Continental Shelf Lands Act. Section 12(a) of OCSLA provides the president with the clear authority to withdraw certain areas of the Outer Continental Shelf from oil and gas leasing, and the central question in the lawsuit was whether it also provides authority for a president to undo existing  withdrawals that were intended, like Obama’s Arctic and Atlantic actions, to be of unlimited duration.  Judge Gleason found that section 12(a) authority works only in the direction of presidential withdrawals, and not the undoing (or “revocation”) of such withdrawals.

Looking to the future, should Acting (and likely soon-to-be-confirmed) Secretary David Bernhardt revisit the Izembek land trade, he will need to either win on appeal during his tenure (should he take one) or directly confront the agency’s previous rejection of a land trade and the reasons for that rejection.  Furthermore, Trump’s “energy dominance” effort to expand offshore oil drilling in the Arctic Ocean is dealt a blow.  Notably, the OCSLA issue is similar to one raised in litigation over Trump’s revocation of National Monument designations under the Antiquities Act and Judge Gleason’s treatment of the issue thus may influence other courts. 

More broadly than even these implications, the two Gleason decisions may portend the result of other Alaska-related federal policy and decision-making.  For example, the Corps of Engineers is fast-tracking Clean Water Act section 404 permitting for the proposed Pebble mine in Southwest Alaska.  And the proposed mine’s developers are trying to get EPA to reverse course on its intended use of its Clean Water Act section 404(c) authority to restrict or prevent any Corps’ permit for the mining of the Pebble ore deposit.  EPA’s proposed restrictions were based on a Bristol Bay Watershed Assessment, which the developer had waived challenging in settling a previous lawsuit with EPA.  Given the clarity of Judge Gleason’s Izembek opinion on what it would take for the agency to reverse course, and the settled science of EPA’s watershed assessment, securing a 404 permit won’t be as simple for proponents as winning a policy argument, which appeared to be the case with the Izembek land trade. 

Looking back to the Interior Department, the Bureau of Land Management is moving forward with oil and gas lease sales on the Coastal Plain of the Arctic Refuge.  Critics of that effort, including a former Interior official, say the legal process is being illegally shortcut, which is an attribute it may thus share with the Izembek land trade.  Interior is also speedily-redoing a 2013 management plan for the 23 million acre National Petroleum Reserve with a goal of expanding oil and gas leasing in the Reserve starting in 2020.    

Ironically, on Thursday, March 28, the day before Judge Gleason issued her decisions, Interior Secretary-nominee David Bernhardt had his confirmation hearing before the U.S. Senate Energy and Natural Resources Committee.  This committee is chaired by Alaska’s Senator Lisa Murkowski, who is a supporter of expanded oil and gas development on federal lands in and offshore of Alaska.  The judicial smackdown the next day, however, is sure to complicate Bernhardt’s efforts to implement such an agenda before the next presidential term, which is the timeframe which appears to underly Interior’s and other agencies’ efforts on Alaska issues.  And if the rush to secure more decisions in this presidential term leads to more losses in court, Alaska development interests could face complicated bureaucratic and legal landscapes, and strong political backlash, well into the future.

* Izembek case:  Friends of Alaska Wildlife Refuges, et al, v. Bernhardt, 3:18-cv-00029-SLG (March 29, 2019, D. Ak).

* Arctic OCS case:  League of Conservation Voters, et al, v. Trump, 3:17-cv-00101-SLG (March 29, 2019, D. Ak)

 

Any Press Is Good Press

Posted on March 25, 2019 by Seth Jaffe

Last week, the Washington Post (subscription required) published an article about the Trump Administration’s inability to defend many of its policies in court. Yours truly was among those quoted. I liked the story and it was largely accurate, including its quotes from me, except that Fred Barbash stated that I had “been looking forward to deregulation under Trump.”  On that issue, I can only say that Fred and I had a misunderstanding, because I was never looking forward to deregulation under Trump.

Aside from the relatively unimportant and mildly humorous issue related to me maintaining credibility with a number of people whom I respect, I’m doing this post because that line highlights an important issue – there’s a significant difference between deregulation and regulatory reform. I think much of our environmental regulatory structure could benefit from reform, but I don’t question the benefits of environmental regulation and I don’t support “deregulation.”

Indeed, as the article demonstrates quite well, President Trump has shown no interest in regulatory reform.  He just wants to kill as many regulations as possible – or at least persuade his supporters that that’s what he wants to do.  Like so many things about this President, he doesn’t actually care about results as much as he cares what his supporters think about him – that’s one reason why the article is a valuable piece of reporting.

And that's also part of the reason why, as I said in the article, Trump has set regulatory reform back for years.  If we want widespread public support for regulation, we have to persuade people that regulations benefit them.  That’s why environmentalists shouldn't fear cost benefit analysis and cost-effectiveness analysis; we need economic analysis to demonstrate the benefits of regulation.  We have a President who thinks all regulations are bad, but who cares only about the cost of regulations, not their benefits.  As a result,  cost-benefit analysis and cost-effectiveness analysis get a bad name.

And that’s bad for everyone.

Ode to Angus: The Macbeth Report

Posted on January 17, 2019 by Scott Fulton

In the Summer of 2017, ELI undertook a special project in memory of our dear departed colleague Angus Macbeth. We did so with support, encouragement, and input from across the ELI and ACOEL communities and in cooperation with the Environmental Council of States (ECOS). Angus was the friend of many, but was also one of the great leaders in environmental law, a former president of the college, and a long-time supporter of ELI. As Angus played no small role in the construction of the system of environmental protection as it exists today, and was also relentlessly committed to the pursuit of new ways to deliver environmental quality, we settled on cooperative federalism as the project topic. The Macbeth Dialogues sought to bring together leading experts to discuss the federal-state relationship in the environmental sphere, in hopes of shining a light on law and policy solutions for optimizing the configuration of governmental roles.

Under this project, we convened a Chatham House Rules gathering of current and former senior state and federal officials, many of whom had worn both state and federal hats. We also convened several dialogues with a broader array of stakeholders and did some rather extensive surveying. The resulting report, The MacBeth Report: Cooperative Federalism in the Modern Era, is, I believe, one of the more thoughtful pieces on cooperative federalism that has been rendered. Let me highlight some of the report’s key contributions.  

As the report reflects, there is considerable support at this juncture for giving states with demonstrated capabilities greater independence and flexibility in running delegated environmental protection programs; but even enthusiasts for greater state primacy consistently agree that EPA must continue its leading role in developing national standards, conducting scientific research, and governing on interstate issues.

The report reveals broad support for flexibility for states in meeting minimum national standards, setting more stringent standards, and in enforcing delegated programs. Experts were more evenly split on state discretion to depart from national technology standards and compliance strategies as well as on primacy for criminal enforcement and environmental justice cases. But over 70 percent of those surveyed felt that the federal government should defer where states can do a better, or as good of a, job, and over 50 percent of respondents felt that EPA intervention in delegated states should be limited to circumstances of documented failure or when the state has provided inadequate resources.

With the traction of sustainability policies in the private sector, driven in part by shareholder and customer demand, the report also explores whether a parallel flexibility in government oversight of high-performing companies might be possible under the rubric of public-private parallelism. The report also considers the role that a citizenry — equipped with unprecedented amounts of environmental information and operating in a socially networked world — can play as a driver of environmental behavior going forward.

In terms of opportunities for adjustment or realignment, The Macbeth Report points to a number of options, including:

· Possible recalibration of compliance expectations under a concept of actionable noncompliance, which could serve to shift the threshold for enforcement intervention from an absolute compliance expectation to one that would allow certain types of exceedances to be timely self-corrected without enforcement implications.

· ECOS has recommended that EPA move to an audit system for oversight in lieu of matter-by-matter reviews. The report advises that auditing be first piloted in a few EPA regions and programs before broader deployment, so that the mechanics can tuned. Permitting decisions may a good place to focus such pilot projects.

· Recognizing the importance of the interstate dimension in defining the federal role, the report recommends that a formal structure be created to give downwind/downstream states a more meaningful voice in implementation decisions.

· The report generally recommends greater use of protocols designed to provide aggrieved states with a time-limited elevation opportunity prior to federal intervention.

· Given technology’s advance toward much more comprehensive, real-time understanding of environmental conditions, the report recommends that EPA and the states experiment with new approaches for framing compliance expectations, for example by using sophisticated fence-line monitoring systems to allow for considerably more within-the-plant flexibility.

This gives you a flavor, but there is considerably more there, so please give The Macbeth Report a look. Be sure to read again Steve Ramsey’s wonderful tribute to Angus, which we have embedded in the report. Many thanks to all who contributed to the thinking in the report, and, of course, a special thanks to you, Angus. 

Two Strikes Against the Administration’s WOTUS Suspension Rule

Posted on December 10, 2018 by Seth Jaffe

In August, a judge in South Carolina issued a nationwide injunction against the “Suspension Rule,” which delayed the effective date of the 2015 Waters of the United States rule.  Now, a judge in Washington has gone even further.  Judge John Coughenour has vacated the rule.

The core of the new decision is the same as that in South Carolina.  By refusing to take comment on the impact of the delay in the effective date of the WOTUS rule, the Administration acted arbitrarily and capriciously and thus violated the Administrative Procedure Act.

For my non-lawyer readers wondering what the difference is between a nationwide injunction against the Suspension Rule and vacatur of the Rule, I’m picturing a petulant President Trump, sitting in a corner.  First, his teacher tells him that he can’t play with his shiny new toy – that’s an injunction.  Then, still not satisfied, another teacher comes by and takes the toy away completely.  That’s vacatur.