Posted on September 15, 2015 by Michael Hardy

Few recognize Ohio’s pivotal role in the development of the oil and gas industry in the United States.  John D. Rockefeller amassed fortunes in Cleveland with his oil refining business (until Uncle Sam broke up the monopoly).  Since then, there have been a number of different oil and gas booms in the state, for example in the mid-1960’s north of Columbus, then again in deeper sandstone formations in suburban areas of Cleveland approximately 10 years ago, and now, the whopping Utica shale play primarily in eight counties in eastern Ohio at depths over 8000 feet below ground surface and horizontal laterals extending a mile or more.  The Ohio Department of Natural Resources (“ODNR”) has issued over  2000 Utica drilling permits, and there are approximately 1000 wells in production or drilling (costing millions to complete).  Hydraulic fracturing (“fracking” its critics pejoratively call it) has been around a long time, but only recently has it been the focus of media and regulatory scrutiny.  All of these historical booms going back to the mid-1960’s have forced the Ohio General Assembly to enact and update  comprehensive statutes that regulate drilling activities.  

Those in the industry were successful in having the General Assembly confer “sole and exclusive authority” to the ODNR “to regulate the permitting, location, and spacing of oil and gas wells and production operations.”  But what about the longstanding, traditional “home rule powers” that the Ohio Constitution conferred on municipalities to take care of health, safety and land-use matters within their jurisdictions?  The juxtaposition of the two came to a head in a case that ironically does not deal with the massive Utica shale wells, but more modest gas wells in a shallower formation in a suburb in Northern Ohio. 

The ODNR had issued a drilling permit to Beck Energy to drill a well in Munroe Falls in 2011.  But Munroe Falls obtained a local trial court injunction prohibiting the permitted drilling until Beck Energy complied with all local ordinances, including the payment of a fee, the posting of a bond, and the holding of a public meeting.    Despite having the state’s authorization to proceed, Munroe Falls prohibited the drilling until it issued its zoning certificate, which it would not do (if at all) for at least one year after Beck met the other pre-conditions.  

The dispute found its way to the Ohio Supreme Court, which issued a “plurality” opinion (4-3) in favor of Beck Energy (and the ODNR).  State ex rel. Morrison v. Beck Energy Corp. The City argued that the state statute regulates the technical aspects of oil and gas drilling while the municipal ordinances address traditional local zoning concerns.  The majority seemed troubled by the scope of the “sole and exclusive” language, but seemed content to defer this policy question to the General Assembly.   Because the traditional  Home Rule powers have enjoyed longstanding and wide ranging judicial respect, the majority in the Beck Energy  case limited the decision to the Munroe Falls ordinances before the Court, presumably leaving open some future role for local zoning ordinances.   

The initial reaction of the bar was to focus on the separate concurring opinion of Justice O’Donnell, who was reluctant to displace local zoning authority in favor of sweeping state regulatory authority.  In his view, the “sole and exclusive” authority was intended to preempt a patchwork of local laws related to the technical and safety aspects of drilling and not to divest local governments of their traditional authority to promulgate zoning regulations that ensure land-use compatibility, preserve property values, and foster long-term community development plans.  The dissenting Justices, along with Justice O’Donnell, noted the troubling omission of the word “zoning” when the General Assembly spoke to “exclusivity.”  That is to say, if the General Assembly really meant to displace local zoning practices, it could have clearly said so, as it has done with other licensing statutes. 

The Ohio Supreme Court’s decision has not put an end to the hotly contested question of the scope of pre-emption.  For example, an activist group in suburban Broadview Heights has filed a putative class action lawsuit claiming that the City’s Community Bill of Rights supersedes state laws.  And recently, the Ohio Secretary of State refused to certify county-wide ballot initiatives that sought to prohibit fracking and/ or drilling in their respective jurisdictions. 

So after I finish this blog tonight, I will drive down Rockefeller Drive, pass the remains of the old Standard Oil refinery, and wonder what John D would have thought of this tension between state preemption and local health and safety regulations. 

Chicken Little Cannot Compare to the Opponents of the Clean Power Plan

Posted on September 10, 2015 by Seth Jaffe

On Wednesday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register.  The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”

Really?  Tell me something I did not know.

I’m sorry.  The CPP is a far-ranging rule.  There are strong legal arguments against its validity.  Those arguments may prevail.  I see it as about a 50/50 bet.  This I do know, however.  The sky isn’t falling. The sky won’t fall, even for West Virginia, if the rule is affirmed and implemented. Those opposed to regulation have made these arguments from time immemorial – certainly no later than when Caesar tried to regulate the amount of lead in Roman goblets.  And if I’ve got that one wrong, at least no later than Ethyl Corporation v. EPA, when opponents of EPA’s rulemaking on leaded gasoline thought that the rule would mean the end of western civilization.

I’m not naïve.  I understand that these arguments are political as well as legal.  I just think that opponents of EPA rulemaking undermine their own political position in the long run by repeatedly predicting catastrophe, even though catastrophe never arrives.

sky is falling


Posted on September 9, 2015 by Robert Falk

California’s “Proposition 65” warning requirements have long been a major concern for businesses that want their products offered for sale in the State’s large marketplace.  Businesses whose products contain even a detectable amount of any one of more than 900 chemicals often face enforcement lawsuits brought by for-profit plaintiffs unless their products contain a “clear and reasonable” Proposition 65 warning.  Short of eliminating the chemical entirely, the only way for businesses to immunize themselves from such claims has been for companies to label or display their products with a generic warning based on language set forth in the original Proposition 65 regulations.  It usually states: “WARNING:  This product contains chemicals known to the State of California to cause cancer and birth defects or other reproductive harm.” 

Three new developments threaten to make Proposition 65 less predictable and more difficult. 

1)      New Proposition 65 Warning Regulations Proposed for Adoption:  Earlier this year, the California Office of Environmental Health Hazard Assessment (“OEHHA”) formally proposed an extensive set of new rules concerning the requirements for Proposition 65 warnings to be deemed “clear and reasonable.”  While Proposition 65’s current regulations allow for compliance with its warning requirements through the type of generic, one sentence statement appearing above, the proposed regulations will, among other things, require:

a.       use of a yellow triangle pictogram containing an exclamation point;

b.      a more unequivocal warning statement indicating that the product “can expose” a user to chemicals known to the State to cause cancer and birth defects or other reproductive harm;

c.       listing particular chemicals if they are among a group of twelve which are the most frequent targets of Proposition 65 litigation;

d.      adding a URL to all warnings linking a public website that OEHHA will operate to provide information supplementing the warning for those so interested (see below); and

e.       presentation of the warning in languages in addition to English if the product label otherwise uses languages other than English.

The proposed new Proposition 65 warning regulations specify alternative and additional requirements for certain types of products, including for food, restaurants, and several products or facilities that have previously been the subject of enforcement litigation.  They also adopt revised and more onerous requirements for warnings for “environmental exposures,” such as for air emissions that arise from the operation of facilities or equipment within the State.  As proposed, businesses will have two years from the adoption of a final rule to transition their warnings to meet the requirements of the new regulation, after which they can face enforcement actions and citizen’s suits for products in the California market that still bear the old (or no) warnings.

2)      New Proposition 65 Website-Related Requirements Proposed for Adoption:  Although not contemplated by the voters when they approved Proposition 65 over twenty-five years ago, OEHHA is also proposing that it operate a website to provide information to the public to supplement and explain the basis for the Proposition 65 warnings given by businesses.  Information to be provided on this website may include the routes or pathways by which exposure to a chemical from a product may occur, OEHHA’s quantification of the level of exposure to a chemical presented by a product, and other information that may be of interest to plaintiffs as well as to sensitive consumers and other members of the public. 

Significantly, in addition to its potential public education function, the proposed website regulations also empower OEHHA to require that manufacturers, importers, and distributors of products bearing a Proposition 65 warning provide the agency with information if so requested.  Such information may include the identities of the chemicals in the product for which a warning is being given, the location or components of a product in which such chemicals are present, the concentration of those chemicals, and “any other information the lead agency deems necessary.”  While trade secret protection may be asserted in some circumstances, the requirement to provide information to OEHHA will be enforceable by public prosecutors, including the California Attorney General and District Attorneys.  

3)      Potential Changes Relative to Proposition 65’s “Safe Harbor” Levels for Chemicals Listed for Reproductive Effects:   Lead has been the focus of the vast majority of all Proposition 65 enforcement actions to date and resulted in hundreds, if not thousands, of settlements with national and international implications over the past two decades.  Cases have included those concerning trace levels of lead in ceramic tableware, water faucets, candy, mini-blinds, toys, and a wide array of other consumer products and foods.  However, in 2013, a trial concerning lead in 100% fruit juices, packaged fruits, and baby foods resulted in a highly significant Proposition 65 defense verdict based on a judge’s finding that the trace levels of lead exposure presented by each of these products was less that the State’s published “safe harbor” warning threshold for lead of 0.5 “micrograms/day.”  A California Court of Appeal decision published earlier this year sustained, among other things, the trial court’s finding that it was permissible for defendants’ experts to construct a daily average level of exposure based on real world data concerning the frequency of the consumption of the products at issue over a fourteen day time period.   Environmental Law Foundation v. Beech-Nut Corporation, et al., 325 Cal.App.4th 307 (2015). 

In anticipation of this type of appellate decision, earlier this year, one of the most historically active Proposition 65 plaintiff’s groups, the Mateel Environmental Justice Foundation, filed a lawsuit seeking a writ of mandate and declaratory relief challenging the 0.5 microgram/day “safe harbor” for lead.  Mateel contends that California’s published threshold for lead was not set consistently with Proposition 65’s 1,000-fold safety factor requirement for reproductive toxicants.  It therefore argues that this longstanding Proposition 65 safe harbor threshold should be declared illegal and inoperative despite it having been published more than 25 years ago and relied on for thousands of settlements and warning decisions.  Mateel further argues in its case that OEHHA should be ordered to promptly establish a dramatically more stringent safe harbor level for lead based on updated science concerning trace level exposures to lead.  It also seeks to have OEHHA ordered to adopt a rule precluding the averaging of exposure across multiple days in relation to the lead safe harbor level.  A second prominent citizen’s group, the Center for Environmental Health, which also focuses on Proposition 65 enforcement, submitted an administrative petition to OEHHA in early July seeking relief parallel to that sought by Mateel, regardless of the outcome of the lawsuit. 

OEHHA has just announced that, in response to this petition, it will soon initiate a rulemaking to update the existing Proposition 65 safe harbor for lead and several related Proposition 65 regulations.  The proposals include several major changes in the way the extent of exposure is calculated and how Proposition 65’s regulatory exemption for “naturally occurring” exemption for foods is determined.  OEHHA’s new proposals essentially seek to nullify the important Beech-Nut precedents and will likely make it even more difficult for businesses to defend Proposition 65 claims about lead and the nearly 300 other chemicals listed for reproductive effects, especially those that may be present as trace contaminants in food products.  OEHHA’s proposals include the following four elements:

A.      Revised Safe Harbor for Lead and Other Chemicals.  OEHHA proposes to repeal the current safe harbor level for lead (the Maximum Allowable Dose Level or MADL).  In its place, OEHHA proposes multiple levels that depend on the frequency of exposure, from exposure once per day to once every 116 or more days.  OEHHA asserts that the once-per-day figure should be reduced from 0.5 to 0.2 micrograms/day and that the existing 0.5 microgram/day level should instead apply only to exposures that occur no more than once every third day.  For exposures that would occur only once every 6 to 9 days, the lead safe harbor figure would rise to 1.0 microgram/day and to higher amounts as exposure intervals become more infrequent.  Plaintiffs’ groups contend that the lead safe harbor should be an order of magnitude lower at 0.03 micrograms per single day and do not want any alternative levels based on frequency of exposure over time.  Despite its proposal for lead, as to all other chemicals listed for reproductive effects OEHHA proposes to eliminate any consideration of the frequency of exposure when safe harbor levels are applied. 

B.      Naturally Occurring Allowances for Lead and Arsenic in Some Foods.  OEHHA also proposes to adopt specific naturally occurring allowances for lead and arsenic (but not other chemicals such as cadmium) in some specific types of food ingredients/products.  The allowances for arsenic are 60 ppb and 130 ppb for white and brown rice respectively.  For lead, they are 8.8 ppb for raw leafy vegetables and 6.2 ppb for raw non-leafy vegetables, fruit, meat, seafood, eggs, and fresh milk.  The agency bases its proposal on data regarding background levels of lead in soil in California as well as rates of uptake by relevant plants. 

C.      Averaging of Product Samples.  OEHHA further proposes to expressly prohibit averaging lead or other contaminant levels across different lots of a food product in the final form it will be purchased by a consumer.  It would instead require that the level of a contaminant in a lot of food be determined by “representative sampling” from within a particular lot.  OEHHA also would define a “lot” on a production basis, apparently by reference to date or production codes, which could significantly increase the amount of testing required.  Testing on this scale may be infeasible for most businesses.

D.      Average Rate of Exposure.  Finally, OEHHA proposes to dictate that, as to any Proposition 65-listed chemical (lead or otherwise), the “average rate of exposure” must always be calculated based on the arithmetic mean and not a geometric mean or some other measure of the central tendency of a data set.  OEHHA’s proposal flies directly in the face of the scientific testimony that prevailed in Beech-Nut and the prior position of the California Attorney General’s office on this issue.

OEHHA has scheduled public hearings to further discuss its new proposals on October 14 and 19, 2015.  It is also inviting written public comment on the lead safe harbor issue until October 28, 2015, and on the averaging issues until November 2, 2015.

Whole Lot of Craziness Going On

Posted on September 2, 2015 by Richard G. Stoll

A whole lot of craziness is going on in federal district and appellate courts all over the country right now.  About what?  About judicial review of EPA’s recent “WOTUS” rule under the Clean Water Act (CWA).  So I can avoid wheel re-invention, see the very recent ACOEL blogs by Seth Jaffe and Rick Glick.

So what’s the problem?  You might find a lot to hate about the Clean Air Act, the Resource Conservation Act, the Safe Drinking Water Act, and I could name a few others, but at least they all have one good thing going for them:  they all provide in a crystal clear manner that judicial review of EPA’s national rules under those statutes will lie exclusively with the D.C. Circuit.  No ifs, ands, buts, or maybes.

For reasons I have never understood (and I have been trying since the 1970s), Congress in its infinite wisdom chose a different path in the CWA.  In Section 509, they listed seven types of actions that must be reviewed in a federal Court of Appeal (not necessarily the D.C. Circuit) and left any other type of action to be reviewed initially in federal district court.

Over the years, a lot of mixed case law has developed regarding EPA’s CWA rules that don’t fit neatly within one of the seven types of actions Section 509 has specified for Court of Appeals review.  Quite predictably, as reflected in Seth’s and Rick’s recent blogs, three district courts last week reached conflicting results over whether WOTUS fits within the seven types.  In its WOTUS preamble, EPA included a discussion about confusion in the courts over the issue and took no position on whether WOTUS should initially be reviewed in a district court or Court of Appeals.

So how crazy is this:  right now, we have (1) a ruling from one district court judge in North Dakota finding he has jurisdiction and enjoining EPA from enforcing WOTUS; (2) a statement from EPA saying the agency will honor his injunction only in the 13 States that were plaintiffs in that action; (3) an order from that judge directing the parties to brief the issue of whether EPA has authority to honor his ruling in only those states; (4) decisions from two other federal district judges holding WOTUS judicial review must be brought only in a Court of Appeals; (5) numerous cases filed in several circuit Courts of Appeals that have been transferred (at least for now) to the 6th Circuit; (6) an almost certain EPA appeal to the 8th Circuit in attempt to reverse the North Dakota judge’s injunction; and (7) WOTUS review cases filed in numerous other federal district courts by lots of parties with various motions still pending.

This is early September, and I can’t imagine how this won’t get a lot crazier over the next few months.  Congress in its infinite wisdom!

First Blood: North Dakota Federal Court Strikes WOTUS Rule

Posted on August 31, 2015 by Rick Glick

With so many challenges filed in so many venues to EPA’s Waters of the United States or WOTUS rule, it seemed inevitable that some plaintiffs somewhere would find a sympathetic court.  And so it is that thirteen states found U. S. District Judge Ralph R. Erickson to preliminarily enjoin the “exceptionally expansive view” of the government’s reach under the Clean Water Act.

This case is interesting from a couple of perspectives.  First, Congress conferred original jurisdiction for challenges to EPA “effluent limitations or other limitations” and for permit decisions upon the Circuit Courts of Appeal.  In the past two days, district court judges in West Virginia and Georgia concluded they lacked jurisdiction over challenges to the WOTUS rule on that basis.  Judge Erickson, however, did not feel so constrained. 

The judge found that the WOTUS rule is simply definitional, and neither an effluent limitation nor an “other limitation” on states’ discretion.  Further, the judge found that the rule “has at best an attenuated connection to any permitting process.”   The conclusion states’ discretion is not affected is a bit odd in that the judge later concludes that the state plaintiffs satisfied all the criteria for a preliminary injunction, including irreparable harm caused by the rule. 

Second, Judge Erickson plays on an internecine dispute between EPA and the Army Corps of Engineers in an unusual way.   In my first sentence I refer to the WOTUS rule as EPA’s, although the rule was jointly adopted by EPA and the Corps.  However, recently leaked internal government memoranda indicate that the Corps disavows much of the technical support and policy choices underlying the rule.  Judge Erickson obliquely references these memoranda and seems to rely on them to conclude that plaintiffs are likely to succeed on the merits of their challenge. 

Typically, courts are loathe to rely on internal documents of uncertain provenance, as they prefer to leave the government room to openly discuss policies under development without fear its deliberations would be disclosed.  But in this case, Judge Erickson notes that he has not been presented with the full record for the WOTUS rulemaking, and so felt justified in citing the Corps memos. 

As Seth Jaffe has observed, it seems likely that Judge Erickson’s jurisdictional determination will not stand, and his reliance on the confidential exchanges between the Corps and EPA is a little disturbing.  However, his order highlights EPA’s poor management of this rulemaking, which has led to challenges from states, property rights advocates and environmentalists—a kind of anti-EPA trifecta. 

As previously noted, EPA released its draft WOTUS rule before the work of the Science Advisory Board was complete, thus raising questions as to the rule’s scientific objectivity.  Then EPA seemingly disregarded the technical concerns raised by its rulemaking partner, the Corps.  Any WOTUS rulemaking would be controversial, but EPA has unnecessarily raised the bar for public acceptance.

Two Days, Three Decisions, One Big Mess: Welcome to Judicial Review of the Waters of the United States Rule

Posted on August 28, 2015 by Seth Jaffe

On Wednesday, Judge Irene Keeley of the Northern District of West Virginia held that district courts do not have jurisdiction to hear challenges to EPA’s rule defining waters of the United States, because courts of appeal have original jurisdiction over “any effluent limitation or other limitation.”  Yesterday, Judge Lisa Wood of the Southern District of Georgia agreed.

Later yesterday, Judge Ralph Erickson of the District of North Dakota disagreed.  Finding that a definitional rule is not an effluent limitation and is not any “other limitation”, because it “places no new burden or requirements on the States”, Judge Erickson concluded that the district courts do have jurisdiction.  Addressing the merits, Judge Erickson concluded the states were likely to prevail, and would suffer irreparable harm in the absence of an injunction.  He thus enjoined enforcement of the rule in the 13 states involved in the case before him.

I’ll go out on a limb and assert that Judge Erickson’s decision is not likely to survive.  Why not?

  • Both the Georgia and West Virginia opinions cogently explain why the WOTUS rule is an “other limitation under existing CWA cases.
  • Judge Erickson was clearly trying to have his cake and eat it, too. It is, to put it mildly, internally inconsistent for Judge Erickson to conclude that he had jurisdiction to hear the case, because the “rule places no new burden or requirements on the States”, while ruling on the merits that the States will suffer irreparable harm if the rule goes into effect.  If they will suffer harm, it is precisely because the rule will limit them in new ways – which is pretty much what his own opinion says. 
  • As Judge Keeley noted, providing consolidated jurisdiction over all challenges to the rule in one court of appeals furthers

“the congressional goal of ensuring prompt resolution of challenges to EPA’s actions.”  That scheme would be undermined by … a “patchwork quilt” of district court rulings.

Based on these three decisions in just the last two days, it would seem that truer words were never spoken.


CERCLA Financial Assurance Update: Section 108(b) Remains Stalled, But New EPA Guidance for Settlement Agreements and UAOs

Posted on August 7, 2015 by Charles Efflandt

Earlier this year, I posted in this blog a discussion of EPA’s 35 year – and still unfinished – journey toward full implementation of the financial assurance (“FA”) mandate of CERCLA Section 108(b). Section 108(b) obligates EPA to identify “classes of facilities” that will be required to demonstrate financial ability to respond to future releases of hazardous substances and to promulgate rules establishing those FA requirements. Inexplicably, Section 108(b) remained dormant for 28 years. Litigation initiated by NGOs in 2009 and 2010 prompted the agency to identify the hardrock mining and several other industries as priority targets for regulation. The task of developing the FA requirements for those industries, however, remained a work-in-progress.

Ever vigilant, environmental advocacy groups filed a Petition for Writ of Mandamus in August 2014 taking EPA to task for its delays and inaction. The theme of the litigation is that (1) Section 108(b) is a critical component of CERCLA’s overall scheme, (2) EPA’s failure to issue FA rules has resulted in cleanup delays, funding shortfalls and increased public health risks, and (3) EPA’s inaction cannot be justified by competing priorities within the agency. In May of this year, the D.C. Circuit Court of Appeals issued an order requiring EPA to expedite implementation of Section 108(b) to the greatest extent possible, update its rulemaking schedule for the identified industries, and disclose to the litigants the regulatory “framework” for the hardrock mining industry, which EPA acknowledged had been completed. EPA’s website suggests that it will publish the hardrock mining rule in August 2016.

In short—the more things change, the more they stay the same. Perhaps the low priority assigned to this CERCLA provision suggests that the cleanup response track-record of even the priority industries may not justify a need to regulate under Section 108(b) - a process that will involve complex issues with significant financial consequences. Nevertheless, Section 108(b) remains the law of the land. Congress must either follow-through with its periodic efforts to amend Section 108(b) or EPA must finish this long journey. No benefit inures to the public, affected industries or the agency from the existing uncertainties and delays.

EPA’s foot-dragging in implementing Section 108(b) is in contrast with its recent action emphasizing FA as an enforcement priority in CERCLA settlement agreements and UAOs. The agency’s April 2015 Guidance to Regional Counsel is touted as the first comprehensive document issued by EPA to assist with the development of FA requirements and provide transparency in the use of its Superfund authority. Space limitations do not permit a detailed review of this 22 page guidance, which includes modified model FA language and sample documents. Some take-aways from a first read of the guidance:

  • The Guidance does not address future Section 108(b) requirements.
  • It is suggested that the EPA Regions have flexibility to include or exclude certain FA mechanisms at specific sites, BUT headquarters consultation and approval is often necessary.
  • The financial test and corporate guaranty mechanisms are perceived by EPA as having a higher risk of not achieving FA objectives and imposing increased administrative burdens on the Agency; therefore, it is suggested that those mechanisms should be used with caution.
  • The Guidance recognizes the complications arising at sites involving numerous, dissimilar PRPs, with a preference for requiring jointly-funded versus separate FA mechanisms.
  • The Guidance emphasizes the need for agency diligence in the ongoing evaluation of site conditions and costs, with increases in the initial FA amount to be required as appropriate.
  • Practical considerations for evaluating the financial test and guaranty FA options are addressed in an appendix.

Notwithstanding suggestions of flexibility in the use of FA tools on a site-by-site basis, this comprehensive new guidance does not appear to include much good news for the settling PRP. In fact, EPA’s stated concerns on the use of the financial test, corporate guaranty and insurance policy FA mechanisms could further complicate an already contentious issue in CERCLA settlement negotiations. What impact the guidance may have on FA negotiations as new sites arise, of course, remains to be seen.

EPA Hubris, July 2015 Edition

Posted on July 31, 2015 by Seth Jaffe

Anyone who reads this blog must have seen the explosion of reports in the trade press that EPA ignored significant criticism from the Army Corps of Engineers in promulgating its Waters of the United States rule. (For a useful summary of the rule and an analysis of some of the legal issues that might be raised in potential litigation, see Susan Cooke’s post from earlier this month.)  I have not seen the memoranda, but, based on the press reports, it appears that EPA ignored criticism both that it was too stringent in some areas and that it was not sufficiently stringent in others.  If EPA’s purpose wasn’t simply to make the rule more – or less – stringent, why did it ignore the Corps and try to bury the disagreement?

How about hubris?

I noted earlier this year and as far back as 2010, EPA’s tendency towards self-righteousness.  I also pointed out how counterproductive that self-righteousness is; it makes it more difficult for EPA to achieve its goals.  While I still think that EPA is self-righteous, hubris seems the apt description today.

IT’S BEEN A LONG TIME COMING… 27 Year Old RCRA Underground Storage Tank Rules Get a Facelift

Posted on July 20, 2015 by Karen Crawford

I remember as though it were yesterday when the Underground Storage Tank (UST) regulations were finalized in 1988, requiring owners and operators to register existing as well as new tanks, then ensure prevention, detection and remediation of releases into the environment.   Owners and operators were also required to perform release detection inspections and demonstrate financial responsibility for cleaning up releases.   New tanks were required to meet certain design, construction and installation requirements aimed at preventing releases.  While technology for meeting those requirements has evolved over the ensuing 27 years, no significant regulatory changes have been implemented – that is, until this week. 

Many owners and operators decided to pull or close USTs in lieu of meeting those regulatory requirements but, because certain tanks are underground for safety reasons, that was not always a viable alternative.  Because I was new to private practice and saw an opportunity, I set out to become the “Queen of USTs" in the Carolinas.  These days, I still help clients on remediation projects involving releases from USTs and review due diligence reports on real estate where USTs are or have been used, but it has been a long time since I gave a speech or wrote an article about UST regulation. 

On July 15, 2015, EPA promulgated a final rule modifying the 1988 UST regulations implementing requirements for secondary containment and operator training applicable to both new and existing USTs, implementing key provisions of the Energy Policy Act of 2005 (which modified Subtitle I of the Solid Waste Disposal Act) and fulfill objectives in EPA’s August 2006 UST Tribal Strategy ensuring parity in program implementation among states, territories and in Indian country.  Citing two peer-reviewed but unpublished studies of causes for releases from USTs, along with statistics showing there are still as many as 6000 releases from USTs discovered each year, and touting development of new, the 2015 changes to the original regulations are aimed at ensuring the USTs are still working as intended, by focusing on operation, maintenance and training requirements. 

While certain waste water treatment facility and nuclear power facility partial or complete deferrals are continued, this regulation removes deferrals set forth in 1988 for field-constructed tanks, airport hydrant fuel distribution systems that meet the UST definition, and UST systems storing fuel solely for use by emergency power generators.  Hospitals, airports, communications providers and utilities should particularly take note of these changes.

This blog would grow to an article if it addressed in detail all of the technical requirements of this 117-page regulation, but there are some that take effect immediately and require attention.  For example, regulations disallowing flow restrictors in vent lines to meet the overfill prevention requirement at new installations, and also triggered when an existing flow restrictor is replaced, apply immediately on the effective date of this final regulation, July 15, 2015.  Also, testing following a repair is required on the effective date of the regulation.  Most of the other implementation deadlines for notification, testing, inspection, recordkeeping, demonstrations of financial responsibility compatibility and required technology upgrades are set at three years after the effective date of the final 2015 UST regulation or July 15, 2018. 

There is one exception to the deadline for compliance being either immediately or in 3 years.  The secondary containment requirement is implemented for all new UST systems 180 days after the effective date of the rule, and tanks and piping installed or replaced after April 11, 2016 must be secondarily contained and use interstitial monitoring per the regulation.  EPA explains that 180 days allows owners and operators to adapt plans for new systems.       

Training of owners and operators (definitions for three classes are set out in this regulation) must be completed within the three years after the effective date of this regulation.   EPA explained that requirements for implementing walkthrough inspections and release detection equipment testing were adjusted to correspond to the training deadline so inspectors and testers will better understand what to look for.  Apparently, many of the deadlines and implementation requirements were adjusted by EPA in response to comments on the proposed rule.

Conversely, in response to comments regarding the potential costs on small business owners, EPA responded that it carefully considered such potential impacts of the proposal; EPA declined to implement recommendations of a small business advocacy review panel under the Regulatory Flexibility Act as some commenters suggested.  Finally, while EPA’s final rule allows records to be maintained on paper or electronically, in keeping with the move to electronic filings and submittals, the agency encourages owners and operators to maintain electronic records to “simplify compliance” and utilize “21st century technology tools.”

Can the Majority and the Dissent Both Be Wrong? The Supreme Court Remands the MATS Rule

Posted on June 30, 2015 by Seth Jaffe

In Jonathan Cannon’s excellent post on Monday’s Supreme Court decision in Michigan v. EPA, he noted that the majority and the minority aren’t actually that far apart in their views on whether EPA must consider costs in this rulemaking.  I have a slightly different take:  They may not be that far apart, but they’re both wrong.  

In fact, the issue in Michigan v. EPA seems so simple that the MATS rule could have been affirmed in a two-page opinion.  Judge Scalia notes that the word “appropriate” – on which the entire 44 pages of the majority, concurring, and dissenting opinions focus – is “capacious”.   I agree.  If so, and if Chevron means anything, “appropriate” is surely capacious enough to allow for an interpretation that does not include cost considerations.  That should have been the end of the case.

I do feel compelled to note, however, that Justice Kagan’s dissent also got it wrong, in at least three ways:

  • I think she’s flat wrong to suggest that, because the MATS “floor” is based on the top 12% of facilities already in operation, that means that establishment of the floor already takes cost into account. As Justice Scalia cogently notes, those existing facilities may well have been under their own regulatory duress – a duress that may not have considered cost.
  • Justice Kagan confuses cost-benefit analysis and cost-effectiveness analysis. For any given goal sought by EPA, the various options provided by the MATS rule may allow power generators to attain the goal in the most cost-effective means possible, but if even the most cost-effective approach were to yield $10B in costs and $10M in benefits, that would fail the cost-benefit test for most people.
  • Finally, and most importantly, Justice Kagan got the consequences wrong. Instead of suggesting, as she did, that the majority decision,
 "deprives the American public of the pollution control measures that the responsible Agency, acting well within its delegated authority, found would save many, many lives,"  
she should have made the point that the majority decision will have no impact on EPA or the MATS rule.  The Supreme Court did not vacate the rule; it merely remanded the rule to the Court of Appeals.  Justice Kagan’s position should have been that EPA still has sufficient discretion, even on the existing record, to defend the MATS rule within the confines of the majority opinion.  Instead, Justice Kagan gave ammunition to those who oppose the rule, by suggesting that it cannot be saved.

A pox on both their houses.

Do Climate Change and Same-Sex Marriage Have Anything in Common?

Posted on June 29, 2015 by Seth Jaffe

Recent events have me pondering this question.

Most notably, in two court decisions last week, courts ordered the State of Washington and the government of the Netherlands to take more aggressive action against climate change.  In the Washington case, in response to a complaint from eight teenagers, a trial court judge has ordered the Washington Department of Ecology to reconsider a petition filed by the teenagers requesting reductions in GHG emissions.  Similarly, in the Netherlands, a court ordered the government to reduce GHG emissions by 25% within five years.  The Dutch case was brought under human rights and tort law, not under existing Dutch environmental laws.

I have been very skeptical of the use of nuisance-type litigation to require more aggressive government regulatory efforts.  I still think comprehensive market-based regulation is the best approach.  However, in the absence of aggressive action in the United States and world-wide, these suits are going to increase in number.

So, how are they similar to the same-sex marriage issue?  First, as noted in Obergefell, courts were initially – and for some time – not just unfriendly to litigation efforts in support of same-sex marriage, they were positively dismissive.  Second, there is the gradual increase over time in the litigation.

Next, there is also the change over time in the scientific understanding of the issues.  While same-sex marriage has always been, on both sides, primarily a moral issue, it would be wrong to ignore the role that an increasing understanding of the genetics of sexual preference has played in the debate.  Similarly, the move towards an overwhelming weight of evidence, not just that climate change is occurring, but that it is anthropogenic, has obviously been important to the climate change debate.

Finally, while the moral issues in same sex marriage may seem to distinguish it from the climate issue, the recent papal encyclical makes clear that there are moral aspects to the climate change debate as well.

I have no crystal ball.  I do not know whether we are going to see a groundswell, and then, perhaps, a tidal wave that will somehow overcome the gridlock in United States and world politics on climate change.  There are differences in the two issues, most obviously in the short-run economic costs of addressing climate change.  Nonetheless, I do know that it wouldn’t surprise me if the tidal wave comes, and relatively soon.



If Congress Wants to Limit EPA’s Discretion, Perhaps It Should Do a Better Job Legislating

Posted on June 5, 2015 by Seth Jaffe

Earlier this week, the D.C. Circuit Court of Appeals rejected both industry and environmental group petitions challenging EPA’s determination of what is a solid waste in the context of Clean Air Act standards for incinerators and other combustion units.  It wasn’t actually a difficult case, but it does provide a lesson for Congress.  When the technical nature of EPA’s decisions was layered on top of the fundamental deference given EPA’s interpretation of the statute under Chevron, the petitioners were never going to prevail:

We afford great deference to EPA’s determinations based on technical matters within its area of expertise.


The crux of the environmental petitioners’ case was that certain of the materials, such as scrap tires, exempted by EPA from the definition of solid waste, are unambiguously “discarded” within the meaning of RCRA, so that EPA did not have discretion to exempt them.  Unfortunately, as the Court noted:

the term “discarded” is “marked by the kind of ambiguity demanding resolution by the agency’s delegated lawmaking powers.”

In other words, given the current state of decrepitude of the non-delegation doctrine, when Congress enacts legislation using words as vague as “discarded”, it is essentially telling EPA to figure out what Congress meant to say.  And when EPA does figure out what Congress meant to say, the Courts are not going to disturb EPA’s interpretation.

For those in Congress who don’t like the way EPA implements statutes for which it is responsible, they might learn a lesson from Pogo.

EPA Is Not an Expert in Determining Electric System Reliability

Posted on May 7, 2015 by Seth Jaffe

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

demand response

EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument."
  2. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  3. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  4. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.”

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.”

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.

Where Have all the Buffers Gone?

Posted on May 6, 2015 by Kenneth Warren

When selecting best management practices (BMPs) to protect streams during and following construction, riparian buffers are often considered the most effective option.  These permanently vegetated areas alongside waterbodies can capture, infiltrate and control stormwater flow, filter contaminants, stabilize stream banks and otherwise help protect and restore waterbodies and the ecological functions they support.  Recognizing the particular importance of riparian buffers located adjacent to exceptional value and high quality waters designated for special protection, the Pennsylvania Department of Environmental Protection (PADEP), like many other state environmental regulatory agencies, adopted regulations prohibiting earth disturbance activity within 150 feet of a special protection waterbody.  The regulations further required a property developer to protect or establish a riparian forest buffer under certain circumstances where waters in the project’s watershed fail to attain their designated uses.  

And then along came the Pennsylvania legislature.  Faced with objections from homebuilders and other developers to restrictions on use of their properties, the legislature enacted Act 162 of 2014 to provide developers with additional options.  Under Act 162, a developer who requires an NPDES stormwater construction permit may disturb land within 150 feet of a special protection waterbody if it implements BMPs “substantially equivalent” to a riparian buffer or a riparian forest buffer.  If the earth disturbance would occur in a special protection watershed within 100 feet of a surface water, the developer must also offset any reduction of the total square footage of the buffer zone that would have been utilized as a BMP with a replacement buffer.  The replacement buffer must be created in the same drainage area as the disturbed buffer and be as close as feasible to the area of disturbance at a ratio of one-to-one.  

In response to the passage of Act 162, PADEP recently published interim final guidances on equivalency demonstration and offsetting.  The equivalency demonstration guidance requires each developer disturbing earth within 150 feet of a special protection water to implement BMPs that reduce loadings of pollutants including total suspended solids, total phosphorous and nitrate.  In addition, the developer must show that its BMPs are functionally equivalent to a riparian buffer or forested buffer by providing, among others, habit for wildlife and vegetation, flood attenuation, channel stability and support of aquatic food webs.  Under the buffer offsetting guidance, a replacement buffer should be composed of native, diverse tree and shrub vegetation and preferably be installed at a location that receives runoff with characteristics similar to or more degraded than the runoff that the replaced buffer would have encountered.  

While many regulatory regimes afford environmental agencies discretion to grant waivers and exceptions to buffer protection requirements, Pennsylvania has by statute granted developers the option of using substantially equivalent BMPs, supplemented where necessary by offsetting.  PADEP has drafted guidances with stringent criteria for demonstrating equivalency and offsetting, but the guidances have yet to be finalized let alone judicially reviewed.  Experience in administering Act 162 will reveal whether, under PADEP’s watchful eye, equivalency and offsetting can uniformly serve as effective substitutes for a prohibition on development near special protection waters.  In the meanwhile, some healthy skepticism is in order.  

Perhaps a Corps Jurisdictional Interpretation is Final Agency Action After All

Posted on April 16, 2015 by Seth Jaffe

After Sackett, the question on everyone’s mind was “How far does it go?”  The first test of that question was the decision by the 5th Circuit Court of Appeals – not known as a bastion of liberalism – in Belle Company v. Corps of Engineers, holding that a Corps jurisdictional determination is not final agency action subject to judicial review.  Late last week, however, in Hawkes Co. v. Corps of Engineers, the 8th Circuit disagreed, creating a circuit split.

As we noted at the time, the 5th Circuit decision in Belle focused on the differences between the Sacketts’ position facing an enforcement order and that of Belle Company facing a Corps JD.  As the 5th Circuit emphasized, the JD did not require Belle Company to do anything.  Nor did the JD expose Belle Company to penalties.  Nor did it prejudice Belle Company’s ability to obtain a permit.  Nor did it include a finding of a CWA violation.

The 8th Circuit took a different tack, focusing instead on the one great, glaring similarity between the enforcement order in Sackett and the JD in Hawkes Co. – in both cases, the Corps’ decision, as a practical matter, defined the property owner’s rights and ended the proceeding.

It’s not obvious to me that the Supreme Court will take the case, even with the circuit split.  I don’t think that the Court likes these cases.  On the other hand, it is obvious that the conservative wing of the court sees Sackett as a very important decision and there could well be four votes to decide the issue at this point.

If the Court does take the case, all bets are off.  I think that the 5th Circuit still has the better of the legal argument, and I expect that will be sufficient for all but the most ardent property rights advocates on the Court.  Whether there are five ardent property rights advocates on the Court is what remains to be seen.

Whither TSCA: To Reform or Not to Reform (and if so How) — That is the Question

Posted on March 31, 2015 by Donald Stever

Way back around the turn of the decade from the ‘70s to the ‘80s I was invited by the International Joint Commission to attend a conference in Montreal to discuss whether the Canadians should adopt a statute similar to the Toxics Substances Control Act of 1976 (“TSCA”). The IJC is a largely advisory US-Canadian body whose primary area of interest is the Great Lakes. Also on that delegation was the principal author of the text of TSCA, Clarence (“Terry”) Davies. I did not win many friends on that trip when I argued that TSCA took the wrong approach to regulating chemicals in the stream of commerce and in the environment primarily because it used an inappropriate cost-benefit premised standard of review. I also argued that TSCA’s standards were simultaneously too vague and too complex. I suggested that the Canadians start afresh.

In the years following, Congress ignored repeated calls for significant amendment or replacement of TSCA, including a chorus of suggestions that it be replaced by a statute resembling the European Community’s chemical regulatory regime, REACH. In the meantime, EPA soldiered along, trying to make the best of enforcing an antiquated and fundamentally flawed regulatory statute. 

Now after all these years we have two competing bills in the Senate, each of which purports to “reform” TSCA. On the one hand we have S.697, the “Frank R. Lautenberg Chemical Safety for the 21st Century Act”, an allegedly “bipartisan” effort co-sponsored by Senators Mark Udall (D-N.M.) and David Vitter (R-La.), the first hearing on which was held on March 18th. And from another corner, we have S.725, the “Alan Reinstein and Trevor Schaefer Toxic Chemical Protection Act”, co-sponsored by Senators Barbara Boxer (D-Calif.) and Ed Markey (D.Mass.). At about 175 legislative pages, these bills aren’t capable of being thoroughly analyzed in a blog.

The Udall bill is tepidly supported by the chemical industry and by at least one environmental group, the Environmental Defense Fund. It is opposed by some other environmental and public safety advocacy groups. It would pre-empt state chemical regulatory programs like California’s Proposition 65 and other state-run chemical regulatory programs in California and Washington. The Boxer bill, predictably, because its principal sponsor is from California, preserves state programs. Both bills in one degree or another attempt to address the core problems with TSCA by changing the standard of review to a risk-based standard, overhauling and strengthening EPA’s information gathering authority on hazard, exposure and use data, and prioritizing chemicals for review. The Udall bill throws a bone to the chemical industry by exempting a wide variety of chemicals considered to be of low exposure potential or low risk. 

I confess that, although I am not a policy wonk, I have an interest in these bills partly because if either — or a significant element of either — is enacted into law I will have to re-write an entire chapter of The Law of Chemical Regulation and Hazardous Waste. My guess is that, given Congress’s track record of doing little or nothing over the last few years, I won’t have to worry about getting writer’s cramp any time soon.

Dirty Dirt, Developing State Soil Reuse Regulation

Posted on March 25, 2015 by Gregory H. Smith

            Those who have tried to keep up with the development of environmental law into the second decade of the 21st century will not be surprised, as others may be, by the attention now focused on reuse of soil. Uncounted millions of cubic yards of soil are moved each year in the New England region alone. Until very recently, in the absence of contamination above regulatory remediation standards, the excavation and reuse of soils was not subject to any environmental regulation at all.

            Now with the pace of national economic activity rising, soil reuse is drawing the focused attention of State regulators in the northeast region and across the nation. EBC Nov 6, 2014 program. In particular, New Hampshire, Massachusetts, Connecticut and Vermont are all currently considering how to regulate soil reuse. In 2014, Massachusetts adopted a requirement for the development of a soil reuse policy by June 2015 and that effort is well underway.

            While New Hampshire relies on a broad definition of “contamination,” it recognizes it lacks explicit legal authority to develop a full blown regulatory program for reuse of “mildly contaminated” soil. The current definition of contamination reaches, by its terms, any non-naturally occurring, regulated contaminant “that has the potential to adversely affect human health or the environment.” N.H. Env-Or 602.07.  

            In these circumstances, New Hampshire is currently regulating on a case by case basis, limiting receiving sites to soils that do not exceed natural background levels. Solid waste regulation can be avoided by an agency waiver, or reuse can be approved with an acceptable soil management plan and soil testing protocol. The New Hampshire agency is making efforts to respond to approval requests rapidly enough to avoid frustrating market driven transactions. It  recognizes, as other regulators do, that construction projects may otherwise be forced to send lightly contaminated soil to landfills, depriving the region of essential landfill capacity, while increasing construction costs for little, if any, environmental benefit. For example, both New Hampshire and Massachusetts have recognized that unreclaimed gravel pits and quarries present potential hazards and risks of their own. They can be attractive nuisances that claim the lives of those who try to use them unwisely for recreation year after year and they can become repositories for discarded materials including stolen or abandoned vehicles. In short, they can be a locus of a range of community problems, if unattended. Rather than pay to send lightly contaminated soils to landfills, a better and more beneficial use could be found.

            The States considering such new programs recognize that their efforts to impose environmental regulation on such a substantial volume of previously unregulated activity could well have unintended and unnecessary adverse consequences for both small and large scale redevelopment projects just as the economy is gaining strength. It must be undertaken in a manner that will not exacerbate other very significant potential problems. They are coordinating among themselves the planning and development of such regulation and giving serious consideration to designing methods that will likely bear the simplicity and efficiency of general permits. Legislative action will no doubt be necessary to authorize these new programs.

            There is little question that as economic activity continues to increase, the States must establish consistent criteria setting forth the standards to be used in determining where mildly contaminated soils generated at construction projects and other developments can be disposed of at subsurface locations. Municipalities and the regulated community need to be educated about this process and engage with the regulators to ensure that the final standards are well-understood, easily implementable, and adequately ensure the environment is protected.

Cool Water, Part 2

Posted on March 10, 2015 by Paul Seals

In a December 2012 blog post, I discussed the tensions raised by “Water for Texas 2012 State Water Plan” between the expected population growth and available water resources in Texas.   As water demand is expected to rise, existing water supplies are diminishing.   

These critical water supply constraints are again brought into sharp focus by the population projections contained in a March 5, 2015 report released by the Office of State Demographer.   The 40-year projections (2010 to 2050) indicate that if the migration patterns observed in Texas between 2000 and 2010 continue at the same rate, the population of Texas will double, representing a significant increase in projections contained in the 2012 State Water Plan.  The projected water resource shortages will be exacerbated.   

The 2012 State Water Plan, based on a 50-year horizon, projected a 2060 population of 46.3 million.  New population numbers, based on the recent migration patterns, project an increase from the 2010 Census population of 25.1 million to a 2050 population of 54.4 million.   

For the past 10 years, Texas experienced the largest annual population growth of any state.  Will the Texas economy maintain its strength to support job growth that will attract young workers from around the country and the world?   Can the associated high net migration be sustained?  What will be the impact of this growth?  How will the environmental impacts be anticipated and managed?   

The areas of fastest growth include the areas in and around Dallas/Ft. Worth, Austin/San Antonio, and Houston.   Cities in those areas are making plans to secure long-term water supplies.   Will they be successful?  Will regulatory changes have to be made to surface and groundwater water rights to effectively and efficiently acquire, manage, and conserve these limited water resources?  Will the infrastructure be there?   How will it be financed?  

Will Texas have “cool, clear water”? 

EPA Should End Its Embargo Practice

Posted on March 9, 2015 by Richard G. Stoll

It is popular to grouse about how long it takes EPA to issue a rule these days. When I was at EPA in its formative years, we often went from proposal to final in just a few months. There are many reasons why the trek to final rule signing has now become so time-consuming. To name just one, advocates on all sides increasingly file lengthy comments covering technical, economic, and legal issues. And reviewing courts increasingly require EPA to fully explain its basis and purpose in response to all those comments.

While these types of delays are understandable, another type of delay is not. I am speaking of the lag between the rule’s signing by the Administrator and its publication in the Federal Register. You would think this ministerial act (the Federal Register Director isn’t authorized to re-write EPA’s rules) should be accomplished in four or five days. It almost always was when I was at EPA, and today it often is for other agencies. And sometimes these days, EPA’s signed rules get published in a few days.

But there are many exceptions, and a great example is now before us. Administrator McCarthy signed the RCRA “coal combustion residue” (CCR) final rule on December 19, 2014. It has yet to hit the Federal Register, and EPA staff announced on a recent webconference that they “hoped” it would by late March or early April. Other recent examples come to mind. The signed-to-published lag time for EPA’s 2012 CAA Oil & Gas NSPS/NESHAP rule was 121 days. The lag time for EPA’s 2014 CAA NSPS greenhouse gas (GHG) proposed rule was 110 days. It now looks like the RCRA CCR Rule will break 100.

What in the world is going on during these lengthy lag times? EPA staff will tell you that a document with numerous charts, tables, and graphs bamboozles the Federal Register people – even though the CFR has been replete with charts, tables and graphs for decades. EPA staff will also tell you (as they have for the CCR Rule) that they are fixing “typos.” But with 21st century software, can catching and correcting typos possibly take 100 days or more?

So why grouse about this? I am not suggesting that EPA staff might be making substantive, consequential changes to a final rule after the Administrator signs it. EPA does place the final rule on its Website immediately after the document is signed, so any “corrections” in the Federal Register version can be detected by a careful review. (It would be nice – for transparency’s sake – if EPA would make a practice of releasing a red-line showing exactly which “corrections” were made to the signed version during the 100+ days.)

And I am not grousing about the Federal Register publication delays per se. What bothers me is EPA’s frequent practice of refusing to release critical documents supporting the final rule – for instance, the Response to Comment (RTC) document – until the day the rule hits the Federal Register. It is this embargo – coupled with a long signed-to-published lag time – that hurts. During the recent webconference for the RCRA CCR Rule, for instance, EPA staffers made clear that the RTC and other support documents would not be released until the “hoped for” publication in late March or April.

For an agency (and Administration) that touts “transparency” at every turn, I cannot understand why EPA engages in this embargo practice. And sometimes (but not often enough), EPA does release these support documents before the rule is published in the Federal Register – so there is obviously no legal barrier to such a release.

Why should anyone care about such an embargo? As soon as a final rule is released, regulated entities often need to go into high gear to prepare for compliance. In these preparations, they need to be able to understand and interpret the rule’s provisions, many of which are often unclear or ambiguous. EPA’s RTC often provides interpretations and guidance far more lucidly than the rule’s preamble. One good example: in the RTC to EPA’s 2013 CAA “CISWI” rule, EPA provided a key interpretation of what types of activities would be deemed a “modification” triggering new source status. This interpretation appeared nowhere in the rule’s preamble and could hardly have been divined from the regulatory language. It is plainly unfair and contrary to principles of good government to hide this kind of interpretation from regulated parties for 100+ days when they are preparing for compliance.

Moreover, parties on all sides of a rulemaking (industry and public interest groups) need to begin evaluating judicial review options and theories as soon as they can after a final rule is signed. Why should they have to wait 100+ days for critical documents that are essential to their evaluation?

So dear EPA: PLEASE start releasing your RTC and other supporting documents at the same time you release your signed rule!

No Competitors In My Backyard?

Posted on March 2, 2015 by Seth Jaffe

In Paradise Lost, John Milton wrote that “easy is the descent into Hell, for it is paved with good intentions.”  

road to hell

A modern environmental lawyer might say that the road to waste, inefficiency, and obstruction is paved with good intentions.  Nowhere is that more apparent than with citizen suit provisions, as was demonstrated in the decision earlier this week in Nucor Steel-Arkansas v. Big River Steel.

Big River Steel obtained a permit from the Arkansas Department of Environmental Quality to construct a steel mill in Mississippi County, Arkansas.  Nucor owns an existing steel mill in – you guessed it – Mississippi County, Arkansas.  Nucor brought a host of claims in various forums (Sorry; I’m not a Latin scholar and cannot bring myself to say “fora”) in an effort to derail the Big River Steel project.  It appealed the permit in Arkansas courts.  It also petitioned EPA to object to the permit.

Finally – the subject of this case – it brought a citizens’ suit under the Clean Air Act alleging that the permit did not comport with various CAA provisions addressing permitting.  The Court rightly dismissed the complaint, basically on the ground that the suit was simply an improper collateral attack on the air permit.  The 5th and 9th Circuits have reached similar conclusions in similar circumstances.

The point here, however, is that clients don’t want to win law suits; they want to build projects.  Even unsuccessful litigation can tie projects up in knots, jeopardizing project financing or causing a project to miss a development window.

The road to hell is paved with the pleadings of bogus citizen suits.

What Will You be Reading Over the Holidays?

Posted on December 30, 2014 by John Manard

You’ll have to turn to more traditional holiday reading because EPA’s methane reduction strategy for the oil and gas industry won’t be available until next year.  On March 28, 2014, the White House released its Strategy to Reduce Methane Emissions and instructed EPA to develop a comprehensive plan to reduce methane emissions from landfills, coal mines, agricultural operations, and the oil and gas industry.  The White House further directed EPA to address oil and gas sector methane emissions by building on the emission reduction successes of existing regulations and voluntary programs. 

EPA responded to this directive by publishing five white papers on methane emission sources in the oil and gas sector in April 2014, and requesting peer review and comment on each. The white papers address methane and volatile organic compound (VOC) emission mitigation techniques for: compressors, hydraulically fractured oil well completions and associated gas from ongoing production, equipment fugitive leaks, liquids unloading, and pneumatic devices.

Contemporaneously, EPA proposed enhancements to its long-standing and successful voluntary program for methane emission reductions—the Natural Gas STAR Program. EPA initiated the Natural Gas STAR program in 1993 to encourage voluntary methane emission reductions in the oil and gas sector through the application of cost-effective technologies and improved work practices.

EPA seeks to enhance the existing voluntary program with 17 “Gas STAR Gold” methane reduction protocols and a heightened recognition incentive for participating companies.  There is a proposed Gas STAR Gold protocol for each of the source activities addressed by a technical white paper, with the exception of methane emissions from well completions following hydraulic fracturing.  Other proposed Gold STAR protocols address methane emissions associated with casinghead gas, flares, glycol dehydrators, hydrocarbon storage tanks, and pipelines.

To achieve Gas STAR Gold status, a participating company must certify that at least one of its facilities has implemented all applicable Gold STAR protocols. Companies with at least 90% of their facilities implementing all applicable Gold STAR protocols achieve “Gas STAR Platinum” status.  

While few doubt that EPA will pursue methane emission reductions via a regulatory framework, it is speculation only whether EPA’s approach will consist of methane reductions as: (1) a co-benefit of regulations aimed at VOC emissions; (2) direct regulation of methane emissions; or (3) a combination of these approaches. Regardless of the regulatory direction EPA takes, expanded and enhanced voluntary measures will certainly be part of its comprehensive strategy for reduced methane emissions.

EPA’s next step will be to announce the type of regulatory framework necessary to achieve White House goals, and explain how voluntary efforts fit into that framework. Although EPA aimed to announce that planned strategy by the end of the year, recent reports indicate that a January 2015 announcement is more realistic. It looks like we will have to look elsewhere for our leisure holiday reading. (Thanks are due to Karen Blakemore in our Baton Rouge office for all that is good and useful in this post.)

Superfund Rant For a New Congress

Posted on November 13, 2014 by Seth Jaffe

So the new Congress will be controlled by the GOP.  The House and Senate will consider various bills to rein in EPA authority.  Here’s one relatively modest suggestion for congressional consideration:  amend CERCLA to limit EPA’s authority to recover oversight costs.

How many of us in the private sector have been in meetings with EPA where EPA had more technical people in attendance than the PRPs who were performing the remedy?  How many of us have had clients receive oversight cost bills where the total amount of the oversight costs approached the amount spent on actually performing the remedy?  How many us have had oversight requests that have turned response actions into research projects?  All of this for a program that EPA’s own analyses always show to be at the bottom of the barrel when it comes to actual risks to the public.

Here’s the proposal.  I’m not suggesting that EPA have no authority to recover oversight costs.  Just limit it to 10% of the response costs incurred to actually design and implement the remedy.  Make it 15% if you want to be generous.

Mitch McConnell, are you listening? 

CERCLA Financial Responsibility- The Continuing Efforts to Breathe Life into Section 108(b)

Posted on September 23, 2014 by Charles Efflandt

Financial responsibility is a familiar environmental law concept. Many of us have negotiated financial assurance provisions in site consent agreements. RCRA’s closure and post-closure financial responsibility requirements at treatment, storage and disposal (TSD) facilities are well-established. Financial responsibility obligations are also a component of many other federal and state environmental programs.

I suspect, however, that few practitioners are aware of a CERCLA financial responsibility provision that has been in existence since the Act’s inception. CERCLA Section 108(b) mandates that the President identify classes of facilities that will be required to demonstrate a financial ability to cleanup releases of hazardous substances.  These facilities will be obligated to provide evidence of financial responsibility that is consistent with the degree and duration of the risks associated with their production, handling, treatment, storage and disposal of hazardous substances. The requirements of Section 108(b) are intended to assure availability of funds should the businesses go bankrupt or otherwise become financially unable to conduct future environmental response actions.

Section 108(b) generally imposes two regulatory tasks on EPA: Identify the classes of facilities for which financial responsibility requirements will be developed and promulgate regulations establishing those requirements. For twenty-eight years, EPA deferred breathing regulatory life into Section 108(b). EPA’s inattention to Section 108(b) ceased to be an option in 2008. Litigation commenced by the Sierra Club and others resulted in a federal court order requiring EPA to identify industries that would be first in line for Section 108(b) rulemaking. EPA determined in 2009 that the hard rock mining industry would be its first priority. In early 2010, EPA published advance notice of its intent to regulate additional classes of Section 108(b) facilities: chemical manufacturing, petroleum and coal products manufacturing and the electric power generation, transmission and distribution industry.

Although deadlines have come and gone, to date no financial responsibility rules have been proposed. Nevertheless, the lifeless form of Section 108(b) has finally begun to stir. EPA advised Senate lawmakers in June of this year that financial responsibility requirements for the hard rock mining industry would be issued by 2016. In the meantime, the NGOs remain ever vigilant. Armed with data indicating that, particularly during the recent recession, taxpayers and disadvantaged communities suffered the adverse consequences of EPA’s inaction, environmental advocacy groups filed a Petition for Writ of Mandamus demanding that the agency promptly comply with Section 108(b)’s rulemaking requirements. In contrast, many industry groups contended that the Section 108(b) rulemaking being developed is based on a flawed analysis of potential risk and ignores the impact of existing state and federal financial responsibility laws and regulations that have achieved most of the objectives of Section 108(b). Legislation introduced in the House of Representatives in 2013, generally supported by the affected industries, included significant amendments to CERCLA Sections 108(b) and 114(d). 

Whether you believe that Section 108(b) is outdated and unnecessary, or that immediate and comprehensive implementation of its mandates is of paramount importance, I would submit that EPA’s seemingly cautious approach to Section 108(b) rulemaking is justifiable.  Considering the financial consequences, the identification of target industries must be based on a careful and comprehensive evaluation of the actual risks associated with a particular industry’s handling of hazardous substances and the historic “track-record” of that industry’s ability to financially respond to releases. The extent to which existing federal and state financial assurance programs address the identified risks must also be carefully scrutinized to avoid unnecessary cost and duplication. EPA’s selection of acceptable financial assurance mechanisms is also of critical importance. Elimination of the so-called “financial test” method, for example, may impact the capacity of financial and credit markets to provide the necessary financial assurance and adversely affect global competitiveness.

Future rulemaking that is based on a thorough and defensible analysis of actual risk and is limited to filling in any gaps in existing financial assurance programs will best serve the public, the environment and the regulated community.

You Can’t Estop the Government — Even When It Wants to Be Estopped

Posted on August 25, 2014 by Seth Jaffe

On August 12th, the 9th Circuit Court of Appeals issued a decision that arguably explains everything from why the Tea Party exists to why otherwise calm and sane executives suddenly lose all their hair. Perhaps most astounding, the decision is clearly correct. Perhaps the law is an ass.

In 2008, Avenal Power submitted an application to EPA for a PSD permit to construct a new 600 MW natural gas-fired power plant in Avenal, California. Although section 165(c) of the Clean Air Act requires EPA to act on such applications within one year, EPA failed to do so.

Subsequently, and before EPA ever did issue a permit, EPA revised the National Ambient Air Quality Standard for NOx. Avenal Power apparently could demonstrate that emissions from the new plant would comply with the old NAAQS, but could not demonstrate that it would not cause an exceedance of the new NAAQS. After some waffling, EPA took the position that it could grandfather the permit application and review it under the prior NAAQS. Citizen groups appealed and the Court of Appeals held that EPA had no authority to grandfather the application.

To the Court, this was a simple application of Step 1 of Chevron. The Court concluded that sections 165(a)(3) and (4) and 110(j) of the CAA unambiguously require EPA to apply the NAAQS in effect at the time a permit is issued. Thus, EPA has no discretion to grandfather permit applications, even though EPA was required by law to issue a permit decision at a time when more lenient requirements were in effect.

I think that the Court’s decision is clearly right on the law. The statutory language seems unambiguous.  But what did the Court have to say to those who feel that the result is inequitable, because Avenal was legally entitled to a decision in one year, and would have obtained its permit if EPA had acted timely? Pretty much, tough luck:

Finally, EPA relies heavily on the argument that the equities weigh in favor of Avenal Power. In short, we agree. Avenal Power filed its application over six years ago, and endeavored to work with EPA for years, even after filing suit, to obtain a final decision. But however regrettable EPA’s treatment of Avenal Power has been, we simply cannot disregard the plain language of the Clean Air Act, or overlook the reason why an applicant must comply with revised and newly stringent standards —that is, “to protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare and the productive capacity of its population.” Honoring the statute’s plain language and overriding purpose, we must send EPA and Avenal Power back to the drawing board. (Emphasis added.)

In other words, EPA screwed up, and Avenal Power got screwed. Imagine having to explain that to your client.


law is an ass

Government Bullies? Not So Much

Posted on June 18, 2014 by David Uhlmann

It has been more than 30 years since EPA hired its first criminal investigators, but questions remain about when environmental violations will result in criminal charges.  Critics frequently portray environmental crime as a poster child of “over-criminalization” with a recent example Senator Rand Paul in his book Government Bullies:  How Everyday Americans Are Being Harassed, Abused, and Imprisoned by the Feds.

To address these concerns, I have suggested that prosecutors should limit criminal charges to violations that involve one or more of the following aggravating factors: (1) significant environmental harm or public health effects; (2) deceptive or misleading conduct; (3) operating outside the regulatory system; or (4) repetitive violations. By doing so, prosecutors would focus on violations that undermine pollution prevention efforts and avoid targeting defendants who committed technical violations or were acting in good faith.

I subsequently developed the Environmental Crimes Project to determine how often the aggravating factors I identified were present in criminal prosecutions. With the assistance of 120 students at the University of Michigan Law School, I analyzed all defendants charged in federal court with pollution crime or related Title 18 offenses from 2005-2010. We examined court documents for over 600 cases involving nearly 900 defendants to create a comprehensive database of environmental prosecutions.

Our research revealed that prosecutors charged violations involving aggravating factors in 96% of environmental criminal prosecutions from 2005-2010. More than three-quarters of the violations involved repetitive conduct, and nearly two-thirds involved deceptive or misleading conduct. Moreover, we found that 74% of the defendants engaged in conduct that involved multiple aggravating factors. And, for 96% of the defendants with multiple aggravating factors, one of the first three factors (harm, deceptive conduct, or operating outside the regulatory system) was present along with repetitiveness.

These findings support at least three significant conclusions. First, in exercising their charging discretion, prosecutors almost always focus on violations that include one or more of the aggravating factors. Second, violations that do not include one of those aggravating factors are not likely to be prosecuted criminally. Third, prosecutors are most likely to bring criminal charges for violations that involve both one of the first three factors and repetitiveness—and are less likely to bring criminal charges if that relationship is absent.

I plan to update my research with data from 2011-2012 and to examine a representative sample of civil cases using the same criteria. But my research already should provide greater clarity about the role of environmental criminal enforcement and reduce uncertainty in the regulated community about which environmental violations might lead to criminal charges.  My research also suggests that prosecutors are exercising their discretion reasonably under the environmental laws and should lessen concerns about over-criminalization of environmental violations.

For more, please see David M. Uhlmann, Prosecutorial Discretion and Environmental Crime, 38 HARV. ENVTL. L. REV. 159 (2014).