What to Expect in Environmental Regulation for 2017

by McGuireWoods LLP
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The inauguration of President Donald J. Trump on Jan. 20 began a period of change expected to include the rollback of programs, withdrawal of regulations, and changes to policy that will affect all aspects of environmental regulation. While many questions linger regarding the priorities of the new administration, certain issues like the Clean Power Plan and “waters of the United States” definition are sure to rank high on the list. 

Expect certain states, like California, to continue implementing a comprehensive environmental regulatory agenda, although federal action could threaten clean air programs in those states if the Trump administration withdraws the Clean Air Act waivers supporting them. There may also be an increase in lawsuits filed by nongovernmental organizations against both governmental and private actors in response to dissatisfaction with how the U.S. Environmental Protection Agency (EPA) enforces the laws. 

The following are some of the more material areas to track in 2017.

Clean Power Plan (CPP)

CPP was promulgated by EPA on Aug. 3, 2015, as part of the Obama administration’s effort to address climate change through the reduction of carbon dioxide (CO2) emissions from existing fossil-fired (coal and natural gas) energy generating units (EGUs). First proposed in June 2014, CPP arose from EPA’s determination that greenhouse gases were a pollutant subject to regulation under the Clean Air Act (CAA) and that U.S. emissions of CO2 as the predominant greenhouse gas should be reduced, by 2030, to a level 32 percent below their 2005 levels. 

To meet this ultimate goal and interim goals in 2022-2029, EPA applied what it called the best system of emission reduction and the three “building blocks” of efficiency, shifting from coal to gas and increased renewables to determine emission performance rates for all EGUs, dividing the country into three regions based on the nation’s electric grid. EPA then applied those standards to come up with CO2 reduction goals for each state, with each state having the option to meet its goals through an emission standards plan or a state measures plan, as well as emissions trading among sources and states. 

EPA and CPP opponents have widely different views as to the legality of CPP, as well as its costs and benefits or justifications, given that the economics of the decreasing cost of natural gas has already resulted in the closure or conversion of existing coal-powered plants and a concomitant reduction in CO2 emissions. Multiple lawsuits pending in the District of Columbia Circuit Court of Appeals assert that Sec. 111(d) of the CAA does not support the adoption of CPP. Prior to oral argument in those cases on Sept. 27, 2016, the U.S. Supreme Court on Feb. 2, 2016, stayed the implementation of CPP, the first time the high court had ever stayed a case prior to a decision by the lower court. 

Thus, although CPP required that state plans be submitted to EPA by Sept. 6, 2016 (with a potential extension with approval until 2018), that requirement is not currently effective, since the D.C. Circuit Court of Appeals has not issued any opinion in those cases as of the preparation of this summary. Nevertheless, some states are proceeding with plans to comply with CPP, either voluntarily or in the event that CPP is ultimately upheld. On Jan. 11, 2017, EPA denied most of the petitions for reconsideration and all of the petitions for administrative stay of the CPP.

However, the real uncertainty is whether or to what extent CPP will survive, or whether it will be withdrawn or modified by Congress and the Trump administration, which have expressed strong opposition to CPP.  It is likely indicative of CPP’s demise that all references to climate change were removed from the White House website at noon on Inauguration Day.

Hazardous Waste Export-Imports Rule

On Nov. 28, 2016, the Hazardous Waste Export-Import Revisions final rule was published in the Federal Register and became effective at the federal level and in all states on Dec. 31, 2016. This rule alters the requirements for thousands of entities that export and/or import shipments of hazardous wastes from and into the United States. The new requirements respond to concerns raised by EPA’s Office of Inspector General and the Commission for Environmental Cooperation. The rule also ensures that the United States meets its obligations as a member of the Organization for Economic Co-operation and Development (OECD). 

The final rule establishes the following:

  • mandatory electronic reporting to EPA;
  • application of OECD requirements to all imports and exports of hazardous waste, including universal wastes and batteries;
  • linking the consent to export with the electronic export information submitted to U.S. Customs and Border Protection;
  • mandatory EPA identification numbers for all small-quantity and large-quantity hazardous waste exporters and importers, including “recognized traders” arranging for export or import of hazardous waste; and
  • requirement to list waste-stream-level export and import consent numbers on the Resource Conservation and Recovery Act hazardous waste manifests for shipments.

Implementation of the rule will be phased in over time. 

Coal Combustion Residuals (CCR)

The federal CCR rule, 80 Fed. Reg. 21,302 (Apr. 17, 2015) (40 C.F.R. pts. 257, 261), became effective more than a year ago, on Oct. 19, 2015. The CCR rule established, for the first time, national management standards for electric utilities’ disposal of CCR in landfills and surface impoundments. As originally drafted, the CCR rule was “self-implementing” because it set standards, but had no permitting mechanism or delegation to the states. 

Recent legislative action, however, represents a potential win for industry. Last month, Congress passed and President Obama signed the Water Infrastructure Improvements for the Nation Act, which expressly authorizes states to create permitting programs for CCR disposal, subject to EPA approval and oversight. This effectively removes citizen suits as the primary means of enforcing the CCR rule, long viewed as one of the rule’s main problems. 

While more states may now step up to regulate CCR, others had already done so. EPA previously encouraged states to revise their Solid Waste Management Plans to include CCR, and then resubmit for EPA approval; so far, only Kansas incorporated the federal CCR rule by reference in its plan. Several states, on the other hand, independently adopted their own, more stringent CCR requirements, such as North Carolina and its Coal Ash Management Act of 2014 (passed before the CCR rule), and Georgia with its recent regulations (adopted in October 2016). 

Toxic Substances Control Act (TSCA)

In a rare bipartisan effort, Congress passed the Frank R. Lautenburg Chemical Safety for the 21st Century Act, revising TSCA in 2016 to allow EPA to regulate thousands of new chemicals and conduct new and stricter chemical safety reviews. The revised law went into effect June 22, 2016. 

The law requires that EPA adopt many of the final implementing processes by June 22, 2017. EPA has already proposed rules for prioritizing which chemicals to review and has issued a list of the first 10 chemicals that it plans to review under the revised law. Other proposed rules under consideration include an inventory rule, a risk evaluation rule and a fee rule. These rules should be finalized under the new Trump administration. 

TSCA is not high on the new president’s list of environmental concerns, and therefore, it is unlikely that the Trump administration will impede smooth implementation of the law. We should expect, however, that Trump officials may be willing to listen to industry and tweak some of the implementation provisions to speed up agency review time to eliminate backlogs of chemical reviews and allow new chemicals to come to the market without substantial delay.

TCE and Vapor Intrusion

The industrial solvent trichloroethylene (TCE) has long been the target of EPA, which has found that exposure to TCE can cause cancer, birth defects and other health problems. Most recently, EPA proposed banning the manufacture, processing, and distribution of TCE for use in aerosol degreasers and as a spot removal agent in dry cleaning pursuant to TSCA. 82 Fed. Reg. 7,432 (Jan. 19, 2017). EPA is accepting comments on its proposed ban until March 20. EPA’s scrutiny over TCE does not end there, however. EPA has also listed TCE as one of the first 10 chemicals to be evaluated for risk under TSCA, which could lead to EPA banning other uses of the solvent. Under the Trump administration, it’s possible that more expansive bans are less likely. 

On Dec. 7, 2016, EPA announced a final rule adding a subsurface intrusion (also known as vapor or water intrusion) component to the Hazard Ranking System, which is the principal mechanism EPA uses to determine whether sites should be added to the Superfund’s National Priorities List. Subsurface intrusion is the migration of hazardous substances, pollutants, or contaminants from the subsurface environment (contaminated groundwater or soil) into overlying structures. This addition could result in more opportunities for investigation and potential future remediation of subsurface intrusion threats. The final rule will be effective Feb. 8, 2017. Industry groups and environmentalists are differing on whether the rule will be applied in the new Trump administration.

Clean Water Rule

The Clean Water Rule, second in unpopularity only to the Clean Power Plan, will remain in limbo in the short term and is likely to be withdrawn in the long term. The rule was stayed by the 6th U.S. Circuit Court of Appeals in October 2015. Numerous other lawsuits are pending in other Circuit Courts and in various federal District Courts.

An important procedural question being argued in 2016 was whether jurisdiction over legal challenges to the rule originated with the District Court or whether a challenge could be heard directly by a Circuit Court. The U.S. Supreme Court recently granted certiorari to decide the jurisdictional issue, but a decision isn’t expected until this summer at the earliest. In the meantime, all the pending lawsuits will be inactive and the stay will remain in effect. 

Of course, there is also a possibility that the new administration will withdraw the Clean Water Rule, which would render the pending litigation moot and lead to dismissal of all the cases.

Water Transfer Rule

A recent court decision by the 2nd U.S. Circuit Court of Appeals in Catskills Chapter of Trout Unlimited et al. v. EPA No 14-1823 (Jan. 18, 2017) upholding EPA’s Water Transfer Rule should mean the end of the fight over this contested rule. The Water Transfer Rule exempts water transfers from National Pollutant Discharge Elimination System permitting if the transfer occurred between different waterbodies and there was no intervening commercial, industrial or municipal use. Upholding the exemption means that water suppliers who rely on interbasin transfers to move water into various water supply systems can continue to do so without permitting costs and risks, including litigation risks.

Corps Reissues Nationwide Permits

On Jan. 6, 2017, the Army Corps of Engineers finished reissuing 50 existing nationwide permits (NWPs) and issued two new ones. The new permits involve the removal of low head dams (NWP 53) and the construction and maintenance of living shorelines (NWP 54).

The new nationwide permits become effective March 18, 2017. Meanwhile, the 2012 nationwide permits will expire on that same day, March 18, unless: (i) the project is under construction, or under contract to begin construction; and (ii) the work authorized by the NWP will be completed before March 18, 2018. If a permittee does not satisfy these conditions, then its current permit will simply expire and it will need to apply for a new NWP, typically a six-to-nine-month process.

Another issue to watch is the timing of the state actions that must be completed for the NWPs to have validity. Under the Clean Water Act, the states must provide § 401 quality certifications for the NWPs and, under the Coastal Zone Management Act, certain states must provide coastal zone consistency determinations before the NWPs can be used in those states. So, there may be a gap between the effective date of the NWPs and when those permits will become effective in the individual states, based on the timing of the states completing their own reviews. The effect on potential permittees is that, for instance, if they want to use a NWP 12 for a utility line crossing, or a NWP 39 for commercial development, these permits will not be available and the project proponent will have to wait to file its application or it will have to apply for an individual permit. Either of these options can add delays to the permitting process.

Occupational Safety and Health Administration (OSHA)

Although President Trump rarely addressed concerns about OSHA during his campaign, several recent high-profile OSHA regulations and initiatives could be scaled back under his administration. 

  • OSHA will almost certainly scale back, if not eliminate, its regulatory agenda for creating new health and safety rules. OSHA’s Fall 2016 Unified Agenda, which set forth OSHA’s regulatory priorities, was extremely modest compared to earlier agendas, and listed only six items. 
  • Enforcement will become much less of a focus, especially if OSHA’s budget is cut like it was under President Reagan. 
  • OSHA’s silica regulation issued in March 2016 sets the permissible exposure limit (PEL) for airborne crystalline silica at 50 micrograms per cubic liter of air. This PEL applies to all workers, whether in general industry, construction or maritime. The PEL has been criticized as too burdensome on industry and is currently being challenged in the courts. The Trump administration, depending on the outcome of those cases, could re-examine the standard or revise it. 
  • OSHA’s interpretations of its rules will likely change under a new administration. The new record-keeping rule, for example, first made news for its electronic reporting mandate and the anticipated public posting of companies’ injury records. The rule also requires employers to implement reasonable procedures that do not discourage injury reporting. OSHA has interpreted this regulation to generally prohibit blanket post-accident drug-testing policies. Such an interpretation could change under the Trump administration. 

New Forest and Rural Land Phase I Standard

On Jan. 3, 2017, ASTM International released an updated version of its Phase I environmental site assessment standard for assessing rural and forestland properties for potential releases of hazardous substances and petroleum products. The newly updated Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property E 2247-16 (2016 rural property standard) will replace a version released in 2008 with the number E2247-08. 

Proposed purchasers of real property seeking to establish the defenses under the Comprehensive Environmental Response, Compensation and Liability Act will need to wait for EPA to adopt the 2016 rural property standard by regulation as satisfying EPA’s “All Appropriate Inquiries” standard 40 C.F.R. pt. 312 (AAI) that supports such defenses to liability. EPA is expected to commence the adoption process in 2017. For more information on the 2016 rural property standard click here.

Brownfields Funding

For many years, funding has flowed from EPA to states and tribes for brownfield programs.  EPA has also provided assessment, cleanup, planning and other forms of brownfield grants to local governments and nonprofit organizations. The funding and grants are consistent with the approach of delegation to states and local governments expected by the new administration.

This is also an area one would suspect the new president would favor, as a former real estate developer, especially with his focus in the campaign to revitalize urban areas. At the same time, where the funds will come for a large infrastructure bill and other costly initiatives that were part of President Trump’s campaign speeches, and whether agencies such as EPA will see significant cuts to offset such costs, remains to be seen. Those relying on state, tribal and local brownfield programs should remain vigilant as to their funding in 2017 and beyond.

Regulatory Accountability Act and the Chevron Doctrine

In the seminal case of Chevron, Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), the Supreme Court directed courts to defer to agency interpretations of the law on subjects within their expertise, so long as the agency’s interpretation is “reasonable.” Republicans in Congress have pushed to overturn what is now termed as Chevron deference in recent years, including House Bill 4768, which passed the House last summer. Both H.B. 4768 and its companion bill S. 2724 stalled in the Senate. 

On the first day of the new Congress, House Republicans once again introduced a bill to eliminate judicial deference to agency decisions that are challenged. House Bill 5, or the Regulatory Accountability Act of 2017, includes provisions that would not only eliminate deference, but also require agencies to “opt for the lowest-cost options when considering regulations” and that judicial review be completed before any rule having an impact of more than $1 billion comes into effect. 

Even if Democratic opposition once again blocks legislative changes to the deference standards, the conservative members of the Supreme Court have expressed opposition to the Chevron decision. Therefore, the next nominee to the high court may provide enough of a shift that the court will overrule its own precedent.

Citizen Suits

In his opening statement in the Senate confirmation hearing on Jan. 18, Oklahoma attorney general and EPA administrator nominee Scott Pruitt advocated that the states, rather than EPA, should be the lead in environmental enforcement: “Congress has wisely and appropriately directed the EPA through our environmental statutes to utilize the expertise and resources of the States to better protect the environment, and for the States to remain our nation’s frontline environmental implementers and enforcers.”

This almost certainly means that nongovernmental environmental organizations will have little patience in waiting for states to take the “lead in environmental enforcement” while EPA pulls back. Such nongovernmental organizations are expected to bring many more citizen suits under federal environmental laws such as the Clean Water Act and Resource Conservation and Recovery Act to attempt to force environmental compliance by EPA, the states and private parties. 

California

While the nation as a whole may have moved right in the November 2016 election, California moved further left by electing Democratic supermajorities to both legislative houses. California environmental regulation, however, is not immune from national forces, particularly when it comes to certain state clean air programs that rely on an EPA-granted waiver under the federal Clean Air Act that allows California to set its own, more stringent air standards. Scott Pruitt has vowed to review this waiver if confirmed as EPA administrator. 

On January 24, 2017, the California Court of Appeals will hear oral argument in longstanding litigation challenging the auctioning of carbon allowances under the state’s greenhouse gas cap-and-trade system. The system is currently authorized through 2020, but may be extended by the legislature this year to cover the period through 2030. (It is possible that this legislative action, in fact, could moot some of the issues confronting the Court of Appeal.)

Trucking companies will face continued enforcement of California’s Truck and Bus Rule and Drayage Rule in 2017. State energy proceedings will continue to tangle with implementing energy efficiency measures in commercial buildings and increasing renewable energy and energy storage on the state’s electricity grid. Water supply issues in the face of the continuing (but lessening) drought will continue to consume a large proportion of Sacramento legislators’ and regulators’ time. On the toxics front, the list of chemicals regulated under California’s unique Prop 65 will continue to expand and companies will need to plan to comply with new Prop 65 regulations taking effect in August 2018. Finally, the California Department of Toxic Substances Control will likely add to its priority products list as part of its Safer Consumer Products program.

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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  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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