Environmental Enforcement Outlook on Climate Change, NEPA and Emerging Contaminants and Chemical Safety

Morgan Lewis
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Morgan Lewis

(Updated 2/16/2021)

With the arrival of a new US presidential administration, companies are anticipating potential shifts in enforcement priorities by the US Environmental Protection Agency (EPA) in the areas of climate change, the National Environmental Policy Act (NEPA), and emerging contaminants and chemical safety. In several areas, there is likely to be a rollback of the rollbacks of environmental rules implemented by the former administration, as well as an increased emphasis on environmental justice.

CLIMATE CHANGE

  • Climate change is a top priority for the Biden administration. Any new rules proposed by EPA will be tied up in litigation for years. However, there are numerous executive and administrative actions the administration could take to advance the president’s climate-change agenda, and several have already been enacted since Inauguration Day.

Environmental Regulation

  • President Biden took significant steps on his first day in office to advance the energy and climate initiatives of his administration, including the notice of the United States’ intention to rejoin the Paris Agreement, cancellation of the federal permit for the Keystone XL Pipeline Project, and directives by President Biden to certain federal agencies.
  • President Biden also issued a series of executive orders to further confront the “existential threat” of climate change and reaffirm the executive branch’s commitment to evidence-based policymaking and innovation.
  • In order to roll back regulations, administrative agencies must go through another round of notice and comment rulemaking before rescinding a rule that has gone through notice and comment rulemaking process previously, so it is not the fastest way to implement rules that affect climate change. The faster way to affect change in environmental regulation pertains to ongoing litigation.
  • We may see a change in DOJ litigation positions in climate change tort cases brought by local governments against oil and gas companies to favor local governments. Although the DOJ’s switching sides will not be dispositive, it lends weight and support to the plaintiffs.

Transportation Regulation

  • California is the lone state with permission under the Clean Air Act to regulate emissions. EPA revoked that permission in 2019, but President Biden may direct his new EPA administrator to reinstate that permission.
  • At federal and state levels, we may see a continued press on fuel efficiency as a means toward increasing production of electric vehicles.

Financial Regulation

  • The regulation of corporate disclosure of climate change risks could come into greater focus under the Biden administration. Federal and state regulators have many tools they could use to systematize how public corporations evaluate, quantify, and disclose climate change risks.
  • Although it may be difficult for state regulators to hold companies liable based on past disclosures of climate change risks, regulators are looking at prospective regulation of future disclosures. This area is ripe for regulation and could affect broad swaths of the economy.

NEPA

  • The Biden administration has a dual agenda of increasing environmental protection and stimulating economic development. The administration will need to balance these conflicting demands, particularly in the realm of NEPA review for energy and infrastructure projects.
  • NEPA is a primary statute under which federal agencies evaluate the potential environmental impacts of actions they take, fund or permit.
  • President Biden has vowed to roll back the former administration’s regulations overhauling NEPA. In one of the executive orders signed on his first day in office, he directed the Council on Environmental Quality (CEQ) to review the recent NEPA regulations. Given President Biden’s administrative focus on economic recovery and the key role that large-scale infrastructure projects will play in these efforts, the administration may ultimately reinstate some measures designed to streamline review. Specifically, while President Biden revoked Executive Order 13807 – Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects, he, at the same time, ordered the Director of the Office of Management and Budget (OMB) and the Chair of the CEQ to consider whether this order should be replaced.
  • With environmental justice being a major focus of the Biden administration, NEPA is one of the regulatory areas where the administration will give specific guidance as to how it needs to be addressed. In particular, the administration has said it will revise and reinvigorate the Clinton-era executive order that set forth the way federal agencies should be addressing environmental impacts as they relate to minority and low-income communities. The administration will bring considerably more vigor to its environmental justice analyses, which could have significant implications on large-scale infrastructure projects.
  • Procedurally, there are a number of ways that the new administration can implement its approach to environmental review under NEPA. On his first day, President Biden used executive orders to revoke a number of provisions. In addition to Executive Order 13807 previously discussed, he revoked Executive Order 13766 – Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects. It is likely that the new administration may further reconsider the position taken in ongoing NEPA litigation and issue new regulations.
  • With regard to climate change and NEPA, the new administration has ordered CEQ to rescind the Trump guidance draft guidance on consideration of greenhouse gas emissions published in June 2019 and in its place, to review, revise and update the guidance issued in August 2016 titled “Final Guidance for Federal Department and Agencies on Consideration of Greenhouse Gas Emissions and Effects of Climate Change in National Environmental Policy Act Reviews.” It is anticipated that the updated guidance will add more rigor to the process.
  • Companies should consider ways to prepare for such changes, including monitoring the status of relevant regulations and policies, being particularly mindful of projects that are proposed for siting in areas that could raise environmental justice concerns or impact tribal interests, and seeking opportunities related to focus on growth in certain industries such as renewable energy, energy efficiency, cleaner vehicles, and greener agricultural practices.

EMERGING CONTAMINANTS AND CHEMICAL SAFETY

  • Under former President Trump, the EPA did not set federal drinking water standards for per- and polyfluoroalkyl substances (PFAS), as some states have done. The Biden administration is expected to prioritize creating maximum contaminant levels for PFAS (PFOA and PFOS) under the Safe Drinking Water Act, as well as officially designating PFAS compounds as hazardous substances. President Biden’s environmental justice plan also discusses accelerating research on PFAS compounds, including toxicity studies.
  • The 2016 amendments to the Toxic Substances Control Act (TSCA) directed EPA to select 10 chemicals to be the first to be for evaluated from the 2014 update of the TSCA work plan. EPA completed all of the first 10 risk evaluations as of January 2021. A number of these risk evaluations are being challenged in lawsuits. The Biden administration is expected to ramp up chemical risk evaluation efforts under TSCA. Some groups are lobbying to make EPA’s risk evaluation procedures stricter, and some are asking the administration to re-do the first 10 evaluations. Relatedly, there is a push for the current administration to regulate some immediate risks, while the new evaluations are being finalized.
  • EPA extended the chemical data reporting (CDR) reporting period under TSCA twice in 2020, with the last deadline set at January 29, 2021.
  • Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), all pesticide products – including surface sanitizers – must be registered with the EPA prior to sale, distribution, or use. In light of the pandemic, the former administration had ramped up enforcement efforts of illegal pesticide products, including against major companies such as Amazon and eBay. Given the influx of illegal and unregistered pesticide products on the market in response to the pandemic, the Biden administration likely will do the same, and may even expand existing enforcement efforts.

For more on the environmental developments we are watching in the early days of President Biden’s administration, watch our December 17, 2020 Enforcement Outlook 2021: Environmental webinar with John, Ella and Bryan.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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