EPA Promulgates New FOIA Rule Without Public Comment

On June 26, 2019, EPA promulgated a final rule amending Freedom of Information Act (FOIA) regulations at 84 FR 30028 (available at https://www.govinfo.gov/content/pkg/FR-2019-06-26/pdf/2019-13290.pdf) without public comment citing to procedural and good cause exceptions. Under the new EPA FOIA rule, EPA regional offices will no longer handle initial FOIA requests. Rather, all FOIA requests must first be sent to the agency’s National FOIA Office, which will then delegate the requests to the proper office. As discussed in a series of articles in the Hill, “[t]he new EPA rule … allows the administrator and other political appointees to review all materials requested under the [FOIA] process.   https://thehill.com/policy/energy-environment/452066-environmental-groups-fight-epas-new-public-records-restrictions; see also https://thehill.com/policy/energy-environment/452425-pressure-mounts-on-epa-to-withdraw-new-foia-rule; and https://thehill.com/opinion/energy-environment/452417-epas-new-public-records-rule-lets-trump-administration-pollute-in.

Joe’s Takeaway: FOIA is an important information gathering tool to hold the agency accountable for both environmentalists and industry. EPA HQ’s apparent “fortress” mentality reflected in the new FOIA rule sets dangerous precedent that may make it more difficult and time-consuming for the public to obtain records from EPA now and other future administrations.

Environmental groups have already petitioned EPA to withdraw the new FOIA rule.  Expect rulemaking litigation and uncertainty.  In the meantime, the new FOIA rule is effective on July 26, 2019, so make sure that you send your FOIA requests to EPA HQ using one of the methods set forth at 2 CFR 2.101.

Sinclair Wyoming Refining Company Hit with $1.6 million Civil Penalty for Clean Air Act Violations at Its Wyoming Refinery under Seventh Amended Consent Decree

The United States has provided notice at 84 FR 30243 (available at https://www.justice.gov/enrd/consent-decree/file/1177391/download) that the Seventh Amendment to the Consent Decree between Sinclair Wyoming Refinery Company (“SWRC”), the United States and the State of Wyoming lodged in the U.S. District Court for the District of Wyoming is available for public comment through July 26, 2019. The Seventh Amendment to the Consent Decree (available at https://www.justice.gov/enrd/consent-decree/file/1175756/download#Seventh%20Amendment%20to%20Consent%20Decree%20with%20Appendixes) seeks to address reported exceedances of flare and sulfur recovery plant emission limits and reported downtime of certain Continuous Emissions Monitoring Systems (“CEMS”) at the Sinclair Wyoming Refinery, in alleged violation of the Consent Decree, through revisions to certain Paragraphs in the Consent Decree dealing with Hydrocarbon Flaring Devices and the Sulfur Recovery Plant (“SRP”), including Tail Gas Units (“TGUs”), at the Sinclair Wyoming Refinery.

Specifically, the Seventh Amendment to the Consent Decree assesses $1.6 million in civil penalties for alleged violations of emissions standards under NSPS Subparts J and Ja at the Flaring Devices and at the TGUs at the Sinclair Wyoming Refinery through December 31, 2018; and (b) violations of CEMS regulations and requirements at the Sinclair Wyoming Refinery through December 31, 2018. Alleged violations of the emissions standards at the Flaring Devices and at the TGUs occurring after December 31, 2018, and alleged violations of the CEMS regulations and requirements occurring after December 31, 2018.

In addition, under the Seventh Amendment to the Consent Decree, violations of the emissions standards at the Flaring Devices and at the TGUs occurring after December 31, 2018, and violations of the CEMS regulations and requirements occurring after December 31, 2018, and prior to the Date of Entry of this Seventh Amendment are subject to stiff stipulated penalties set forth in Section XI of the Consent Decree.

Joe’s Takeaway: Federal enforcement officials do not forget; they have memories like elephants. Remember, environmental violations are subject to a 5-year statute of limitations set forth at 28 U.S.C. § 2462 with an exception for continuing violations. Put another way, even if you feel confident that the enforcement “heat” from EPA has waned, the environmental compliance reputation that you develop today with EPA and state regulators may come to roost in the future. Stay in compliance and keep your nose clean!

EPA Proposed Consent Decree To Assess $133K Civil Penalty Against Kayem Foods for Alleged Clean Air Act Risk Management Program Violations

EPA and DOJ recently issued a notice in the Federal Register at https://www.govinfo.gov/content/pkg/FR-2019-05-22/pdf/2019-10673.pdf seeking comment on the proposed settlement with Kayem Foods for alleged violations of the Clean Air Act (“CAA”) Risk Management Program (“RMP”) regulatory requirements set forth at 40 CFR Part 68 at Defendant’s food processing facility located in Chelsea, Massachusetts.

The lodged complaint available at https://www.justice.gov/enrd/consent-decree/file/1163451/download asserts that Kayem Foods’ refrigeration system stored anhydrous ammonia above the threshold planning quantity (“TQP”) of 10,000 lbs, thus, is subject to the RMP requirements. EPA also alleges that Kayem Foods’ process is not eligible for Program 1 under 40 C.F.R. § 68.10(b) because the distance to a toxic endpoint for a worst-case release assessment is greater than the distance to a public receptor. Finally, the Complaint avers that Kayem Foods’ process is subject to Program 3 Prevention Program under 40 C.F.R. § 68.10(d) because it is not eligible for Program 1 and is also subject to the OSHA process safety management standards set forth in 29 C.F.R. § 1910.119. DOJ is accepting comments on the lodged consent decree, which is available at https://www.justice.gov/enrd/consent-decree/file/1163456/download, for 30 days or until June 24, 2019.

Having determined that the Kayem Foods’ process is subject to Program 3 Requirements, EPA alleges the following RMP violations:

· Use of an incorrect release rate in the June 2011 Risk Management Plan and the June 2016 Risk Management Plan resulted in an incorrect determination concerning the greatest distance from the facility that ammonia would be present in the atmosphere at 0.14 mg/L or more during a worst-case release scenario in violation of 40 C.F.R. § 68.25.

· Failure to comply with recognized and generally accepted good engineering practices (“RAGAGEP”) or, for existing equipment designed and constructed in accordance with codes, standards or practices no longer in general use, determine and document that the equipment was designed, maintained, inspected, tested and operating in a safe manner in violation of 40 C.F.R. § 68.65 due to (i) inadequate labeling on piping and valves, (ii) inadequate signage on doors leading to machinery room and concerning identification of ammonia refrigeration system, (iii) failure to have adequate access to ammonia charge line, (iv) failure to adequately seal pipes leading out of machinery room, (v) failure to have audible and visual alarms inside the machinery room or near the entrance doors to the machinery room, (vi) failure to adequately label certain isolation valves and to provide access to one of those valves with an appropriate permanent work surface, (vii) failure to have a quick-closing valve on line from oil pot to high temperature receiver, (viii) failure to locate pressure release valve at least 20 feet from inlet air ductwork, (ix) failure to equip the machinery room with self-closing and tight-fitting doors, (x) failure to have adequate air circulation in machinery room, and (xi) failure to have a shower and eye wash station outside the principal machinery room door.

· Failure to identify earthquakes as an incident with a potential for catastrophic consequences in violation of 40 C.F.R. § 68.67, which requires performance of a process hazard analysis (“PHA”) to identify, evaluate, and control the hazards involved in the process including, without limitation, identify issues related to the siting of the facility.

· Failure to have adequate standard operating procedures for ammonia delivery in violation of 40 C.F.R.§ 68.69, which requires development and implementation of written operating procedures that provided clear instructions for safely conducting activities involved in each covered process and that addressed steps for each operating phase, including emergency shutdown operations and emergency operations.

· Failure to calibrate ammonia detection system at frequency recommended by manufacturer and failure to adequately maintain piping on roof of facility in violation of 40 C.F.R. § 68.73, which requires covered facilities to (a) establish and implement written procedures to maintain the on-going integrity of process equipment, including, (b) inspect and test process equipment based on RAGAGEP and with a frequency consistent with manufacturer’s recommendations and good engineering practices, and more frequently if determined necessary by prior operating experience, (c) document each inspection, and (d) correct deficiencies outside acceptable limits.

· Failure to adequately document actions taken to prevent recurrence of incident that could have resulted in catastrophic release of ammonia in violation of 40 C.F.R. § 68.81, which requires covered facilities to (a) investigate each incident that could reasonably have resulted in a catastrophic release of ammonia, (b) prepare a report at the conclusion of such investigation, (c) have the report reviewed by all affected personnel whose job tasks are relevant to the incident findings, and (d) promptly address and resolve the report findings and recommendations and document any resolution and corrective action.

· Failure to comply with emergency response program requirements of 40 C.F.R. § 69.95 at a time when Defendant was not included in community emergency response plan and when defendant did not include required emergency contacts in its own emergency response plan.

Joe’s Takeaways:

1. First and foremost, the Kayem Foods complaint serves as a valuable roadmap for covered facilities with refrigeration systems that are auditing their facility to ensure compliance with CAA RMP regulatory requirements.

2. While $133K is a substantial civil penalty, it is a tiny fraction of the amount alleged in the complaint, which sought daily penalties in the amount of $37,500 per day for each violation that occurred from January 12, 2009, through November 2, 2015, and in the amount of $99,681 per day for each violation that occurred on or after November 2, 2015.

3. The inspection that spurred this complaint was conducted on July 21, 2014, under the prior Administration nearly 5 years ago, which reinforces that the 5 year statute of limitations for bringing civil enforcement actions may span multiple Administrations….

4. Notwithstanding EPA’s declaration in the proposed RMP rule to rescind virtually all amendments to the Chemical Disaster Rule RMP regulations set forth at 83 FR 24850, 24872 (May 30, 2018) that EPA would utilize an enforcement-led approach to implement the various components of the Chemical Disaster Rule that EPA proposed to rescind (e.g., 3rd party audits, safer technologies and alternatives or “STAA”), the Kayem Foods settlement does not appear to include any Supplemental Environmental Projects or SEPs. It will be interesting to see if EPA addresses this issue if and when it finalizes the proposed rule to rescind virtually all Chemical Disaster Rule amendments to the RMP regulations at 40 CFR Part 68. Stay tuned!

EPA Issues Clarifications Regarding 2017 CGL Permit Requirements

On May 28, 2019, EPA issued a Federal Register notice for Final Modification to National Pollutant Discharge Elimination System (NPDES) General Permit for Stormwater Discharges From Construction Activities at 84 FR 24503-24506 (May 28, 2019) available at https://www.govinfo.gov/content/pkg/FR-2019-05-28/pdf/2019-11075.pdf. The Federal Register notice states:

All ten of the Environmental Protection Agency (EPA) Regions today are issuing a final modification to the 2017 National Pollutant Discharge Elimination System (NPDES) general permit for stormwater discharges from construction activities, also referred to as the ‘‘2017 Construction General Permit (CGP)’’ or ‘‘2017 CGP,’’ which became effective on February 16, 2017. The modified permit, hereinafter known as the ‘‘modified 2017 CGP’’ or ‘‘final modified permit,’’ replaces several conditions in the original 2017 CGP and relevant fact sheet sections. The scope of the modification is limited to only these conditions; all other conditions remain the same. The permit term also remains the same, meaning the modified 2017 CGP will still expire on February 16, 2022.

According to the Federal Register notice, modifications to the 2017 CGP include:

1. Removal of two examples for definition of operator that EPA determined may cause “unintended [as opposed to intended???] confusion regarding who would qualify as an “operator;”

2. Adjusting the wording of erosion control and pollution control requirements to align with C&D ELG requirements set forth at 40 CFR Part 450 and clarify intent regarding minimizing dust, minimizing channel and streambank erosion and scour in the immediate vicinity of discharge points, and storage, handling, disposal of products and wastes): and

3. Clarification of individual responsibility in multiple operator scenarios.

The modified 2017 CGP and accompanying fact sheet are available in the Docket (EPA–HQ–OW–2015–0828) as well as on the EPA’s construction stormwater website at https://www.epa.gov/npdes/stormwaterdischarges-construction-activities.

Joe’s Takeaway: In light of these modifications, prudent CGP owners and operators should confirm that their operations comply with the regulatory changes in C&D ELG requirements, and review site contracts and agreements with other site operators to ensure that CGP responsibilities are clearly delineated and include indemnification clauses whenever possible.

HighPoint Operating Corp. Oil & Gas Operations in Colorado Hit with Clean Air Act Enforcement Action

The United States Environmental Protection Agency (EPA), the United States Department of Justice (DOJ) and the State of Colorado recently announced a settlement with Denver-based HighPoint Operating Corporation (HighPoint) to resolve alleged Clean Air Act violations for failure to reduce volatile organic compounds (VOCs) emissions from its oil and natural gas production operations in the Denver-Julesburg Basin.

According to the joint press release, inspections of HighPoint operations conducted from 2014 to 2017 by EPA and Colorado found VOC emissions from HighPoint’s condensate storage tanks in violation of the Colorado State Implementation Plan, Regulation Number 7, due to undersized vapor control systems and inadequate operations and maintenance practices. Under the settlement, HighPoint will pay the United States a $275,000 civil penalty, and will pay a $55,000 civil penalty to Colorado and perform a State supplemental environmental project or “SEP” worth $220,000 involving installation and operation of vapor balancing controls to minimize emissions associated with loading of condensate into tank trucks at 10 HighPoint well pads, which will reduce HighPoint’s VOC emissions from tank truck loadout by an estimated 50 tons per year according to the press release.

Finally, the press release states that HighPoint will spend ~$3 million to implement measures to ensure the vapor control systems on its condensate storage tanks are adequately designed and sized as well as improving its operation and maintenance, monitoring and inspections practices. EPA and the State of Colorado estimate that HighPoint’s efforts will reduce VOC emissions from HighPoint’s operations by approximately 350 tons per year from 50 HighPoint tank systems in Colorado’s Denver-Julesburg Basin.

In total, HighPoint will pay $550,000 in civil penalties ($220,000 in the form of a SEP) to the United States and the State of Colorado, as well as incurring ~$3 million in implementation costs. The consent decree, which is lodged in the District Court of Colorado and is subject to a 30-day public comment period that closes on May 28, 2019, and final court approval, is available at https://www.justice.gov/enrd/consent-decrees.

Joe’s Takeaway: While EPA enforcement actions under the Trump Administration clearly have waned over the last two years, the Oil and Gas industry continues to be targeted for Clean Air Act violations with significant civil penalties. As I have cautioned, EPA is likely to target and enforce high profile environmental violations to counter criticism that EPA’s enforcement efforts have grown lax. Moreover, states like Colorado (that recently elected a Democratic Governor with significant support from environmental stakeholders) may move to fill the perceived enforcement void left by EPA under President Trump and Administrator Wheeler. Finally, remember the statute of limitations to enforce civil environmental violations is 5 years spanning into the next presidential term…

I will provide a detailed analysis of the HighPoint consent decree with practice tips at our next Environmental Regulatory Bootcamp course held in San Antonio, Texas, on June 18-21, 2019 (https://owensantarellatraining.com/course-offerings). I hope to see you there!

Recent Clean Water Act developments

My apologies for my environmental regulatory blog inactivity.  My recovery from eye surgery has been slower than expected.  I will catch up on a number of other topics over the next few weeks but today I am going to focus on the WOTUS rulemaking and other recent Clean Water Act developments. 

First of all, I want to make clear that this regulatory blog does not represent my personal opinions though my personal perspective and professional experience obviously influence my regulatory analysis at times.  I see my role as an Environmental Trainer to be similar to my role as Environmental Counsel.  In short, my opinion really is not relevant.  My goal is to share my perspective derived from 30+ years of practicing and teaching environmental law (and the perspectives of others) to empower you and assist you in identifying and addressing your environmental compliance responsibilities and establishing environmental policies not to advance any personal agendas.  With that said, here’s my take on WOTUS and the Clean Water Act.

A brief history on WOTUS.  The controversy over the scope of federal jurisdiction over Waters of United States or WOTUS has bubbled since the passage of the modern Clean Water Act in 1972.  In the 1970s, the United States Army Corps of Engineers’ resistance to the Clean Water Act’s call to regulate discharges of dredged or fill material in wetlands set forth in section 404 of the Act culminated with a series of decisions including with United States v. Holland and NRDC v. Callaway that concluded that WOTUS included non-navigable waters including wetlands.  Indeed, federal courts including the Supreme Court generally embraced an expansive view of WOTUS until the 21st Century.  For example, in U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), the Supreme Court held that physical barriers between wetlands and other WOTUS do not impact adjacency determinations and that such wetlands are properly within the scope of CWA jurisdiction.

Of course in hindsight, Riverside Bayview Homes may have represented the apex of federal jurisdiction under the CWA as certain stakeholders favoring personal property rights pushed for the narrowing of the WOTUS definition.  A more limited view of CWA federal jurisdiction began to take hold in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U.S. 159 (2001), where the “SWANCC” Court rejected an expansive interpretation of WOTUS based on use of the waterbody or wetland by migratory birds colloquially referred to as the “Reasonable Bird” test.  The Supreme Court further narrowed the scope of WOTUS in United States v. Rapanos, 547 U.S. 715 (2006), a fractured decision without a majority where Justice Scalia advocated a literal interpretation of the CWA that limited federal jurisdiction to those waters (including wetlands) that have a continuous surface connection to navigable waters of the United States that was embraced by 3 other justices.  However, Justice Kennedy’s centrist position advancing a new “significant nexus test” ultimately carried the day while the remaining 4 justices thought EPA and the Corps of Engineers regulations should be upheld.

Unfortunately, Justice Kennedy’s significant nexus test created numerous issues in the real world; hydrologists, biologists and regulators had difficulty making sense of this legalistic test leading to numerous case-by-case WOTUS determinations and… permitting delays.  To address the uncertainty regarding WOTUS, the Department of Justice in 2008 under President George W. Bush issued an interpretive memorandum on CWA jurisdiction that is available at https://www.epa.gov/sites/production/files/2016-02/documents/cwa_jurisdiction_following_rapanos120208.pdf.  After President Obama took office, EPA and the Corps of Engineers promulgated rulemaking seeking to clarify WOTUS and minimize the need for case-by-case jurisdictional determinations at 80 Fed. Reg. 37054 (June 29, 2015).

Private property stakeholders perceived the 2015 WOTUS rule to be overly expansive and challenged the rule in the 6th Circuit. The 2015 WOTUS rule was initially stayed nationwide by the Sixth Circuit in State of Ohio v. United States Army Corps of Engineers, 803 F. 3d 804 (Oct. 9, 2015).  However, the Supreme Court removed the nationwide stay on procedural grounds concluding that the challenge to the WOTUS rule must be brought in Federal District Court rather than directly to the Court of Appeals.  In response, EPA and the Corps issued the “Suspension Rule” to delay the effective date of the Obama WOTUS Rule at 83 FR 5200 (Feb. 6, 2018) (https://www.epa.gov/wotus-rule/applicability-date-2015-rule). It does not end here.  The South Carolina District Court lifted EPA/Corps stay of Final WOTUS Rule under the Suspension Rule in 26 States in Southern Carolina Coastal Conservation League v. Pruitt, 318 F. Supp. 3d 959 (D.S.C. 2018).  So, the status of WOTUS is different throughout the country. See https://www.epa.gov/wotus-rule/definition-waters-united-states-rule-status-and-litigation-update.

Undeterred and as directed by “Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule,” EPA and the Corps proposed a new WOTUS rule on February 14, 2019, available at https://www.regulations.gov/document?D=EPA-HQ-OW-2018-0149-0003 that seeks to adopt the narrow interpretation of federal CWA jurisdiction articulated by Justice Scalia in his Rapanos plurality decision.  The comment period for the new WOTUS proposed rule closed last week on April 15, 2019, with over 400,000 public comments filed (https://www.regulations.gov/document?D=EPA-HQ-OW-2018-0149-0003). 

What Next???  EPA and the Corps of Engineers have been busy with other efforts to advance CWA regulatory relief on a number of fronts as outlined in an article in The Hill posted today entitled “Dirtiest Week For Water In EPA’s History” available at https://thehill.com/opinion/energy-environment/440566-dirtiest-week-for-water-in-epa-history which opines:

“After nearly a half-century of successfully collaborating with states to implement the Clean Water Act, we have just experienced the dirtiest week for water in the Environmental Protection Agency’s history – a three-pronged attack on the Clean Water Act’s ability to keep our water safe and clean.

First, the EPA closed a notably short period for public comment on a proposed rule that would eliminate protections for half of America’s wetlands and countless miles of smaller streams that provide drinking water for millions and serve as the lifeblood of larger streams and rivers. This rule denies the basic science that water flows downhill and that pollution upstream ends up in larger rivers. Similarly, wetlands are the filters and sponges of our aquatic systems. Allowing them to be drained and destroyed for parking lots, corn fields and other uses mean more pollution, larger floods and less habitat for wildlife.

But that was not all. The EPA also announced in an “interpretive statement” that Clean Water Act protections would no longer apply to pollution or sewage discharged into underground wells or aquifers — even if the polluted discharge flows directly into drinking water sources such as lakes or rivers.  

Finally, all this happened within days of an order from President Trump instructing the EPA to tie states’ hands in protecting local water quality by constraining the time and information they have to decide whether to approve or veto polluting projects. This will limit the ability of states to object to federally permitted projects, like new reservoirs or oil and gas pipelines, which can be harmful to water quality.”

Please allow me to elaborate….  The interpretive statement referenced in the third paragraph above is guidance issued by EPA and the Corps in the Federal Register on April 23, 2019, available at https://www.govinfo.gov/content/pkg/FR-2019-04-23/pdf/2019-08063.pdf.  The guidance effectively directs federal, state and tribal agencies to ignore two federal court decisions – Hawaii Wildlife Fund v. County of Maui, 886 F. 3d 737(9th Cir., 2018) and Upstate Forever v. Kinder Morgan Energy Partners, 887 F. 3d 637 (4th Cir. 2018) which recently held that discharges to groundwater that impact surface water are subject to CWA NPDES permitting - outside of the 4th and 9th Circuits’ jurisdiction. 

The order from President Trump refers to an Executive Order issued on April 10, 2019, entitled “Presidential Executive Order on Promoting Energy Independence and Economic Growth,” which limits a State’s ability to object and block energy projects that the State believes will have an unacceptable impact on water quality.

Joe’s Takeaways:

1.      WOTUS Rule.  No doubt, EPA and the Corps of Engineers will finalize the WOTUS rule in a manner consistent with the Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.  The Environmental Integrity Project reports that “about 51 percent of wetlands and 18 percent of streams across the U.S. would lose their federal protections if the WOTUS rule is finalized as proposed.  Among those losing their protections would be ephemeral streams that only flow after rain or snow events, and scattered wetlands that are not adjacent to streams, rivers or other water bodies and not connected on the surface to them.”  http://www.environmentalintegrity.org/trump-watch-epa/regulatory-rollbacks/. You can get a feel for the level of controversy over the WOTUS rule by reviewing the history of litigation and rulemaking compiled by the ABA at https://www.americanbar.org/groups/environment_energy_resources/resources/wotus/wotus-rule/.  Expect that the final WOTUS rule will be challenged by numerous environmental stakeholders and embroiled in litigation for years that ultimately will culminate before the Supreme Court only increasing uncertainty regarding the scope of WOTUS for years to come….

2.      EPA Interpretive Guidance.  My sense is that EPA is on shaky legal grounds and that the federal courts are likely to strike down this EPA’s guidance holding that EPA violated Administrative Procedure Act procedural rulemaking requirements as the DC Circuit did in National Environmental Development Association’s Clean Air Project v. EPA, (May 30, 2014) available at https://caselaw.findlaw.com/us-dc-circuit/1668348.html.  The DC Circuit vacated EPA guidance entitled “Applicability of the Summit Decision to EPA Title V and NSR Source Determinations” where EPA sought to limit the application of Summit Petroleum v. EPA, 690 F.3d 733 (6th Cir. 2012), to the 6th Circuit just as EPA’s interpretive guidance now seeks to limit federal court CWA jurisdiction decisions to the 4th and 9th Circuits.  Of course, in our topsy-turvy world, back in 2012, EPA issued guidance to limit the scope of a judicial decision that constrained EPA’s regulatory authority to impose New Source Review obligations on certain oil and gas operations under the Clean Air Act whereas now EPA has issued guidance to limit the impact of a judicial decision that expands EPA’s regulatory authority to control pollution that impacts surface water quality under the Clean Water Act.  We live in strange times indeed….

3.      President Trump’s Executive Order.  This Executive Order already has garnered significant attention by environmental stakeholders.  See, e.g., https://earthjustice.org/news/press/2019/earthjustice-responds-to-trump-executive-order-urges-epa-to-ensure-transparency-and-public-input-in-clean-water.  I anticipate that application of the Executive Order will be challenged in federal court by States, Tribal Nations and environmental stakeholders and as being inconsistent with the rights afforded to States and Tribal Nations under section 401 of the CWA.  I also cannot help noting that one of the driving forces of the proposed WOTUS rule is to honor, respect and rely upon State and Tribal protection of water quality rather than rely on the federal government while this Executive Order seeks to limit the exercise of such authority by States and Tribal Nations….  Don’t be surprised if challenges to the new WOTUS rule and this Executive Order raise this apparent contradiction in their arguments before the Court.

Bottom-line:  The current administration’s aggressive attempts to roll back environmental regulations have met substantial resistance from “blue” states and environmental stakeholders and skepticism from federal courts that have overturned or stayed EPA efforts.  See https://www.nytimes.com/interactive/2017/10/05/climate/trump-environment-rules-reversed.html?mtrref=www.google.com&gwh=3AC855E92F6303D4B750C8989C60608B&gwt=pay.  Uncertainty will continue to abound regarding the status of WOTUS and implementation of numerous other federal regulatory programs going forward.  Keep your eyes open and your head on a swivel….

Duke Energy Spending Billions of Dollars to Address Coal Ash Pollution in North Carolina

A press release issued by the N.C. Department of Environmental Quality (DEQ) on April 1, 2019 (https://deq.nc.gov/news/press-releases/2019/04/01/deq-orders-duke-energy-excavate-coal-ash-six-remaining-sites), stated that “DEQ ordered Duke Energy Progress, LLC to excavate all remaining coal ash impoundments in North Carolina.  After conducting a rigorous scientific review of Duke Energy’s proposals for Allen, Belews, Cliffside/Rogers, Marshall, Mayo and Roxboro facilities, and conducting public listening sessions in impacted communities, DEQ has determined excavation of all six sites is the only closure option that meets the requirements of Coal Ash Management Act to best protect public health.  The coal ash must be disposed of in a lined landfill.” An article posted by Utility Dive (https://www.utilitydive.com/news/duke-north-carolina-coal-ash-pond-excavation-order-to-cost-4-5b/551788/) stated that “Duke estimates costs to comply with the new order will add $4-5 billion to the current $5.6 billion clean up, covering construction and engineering as well as transporting the actual waste….” According to Utility Dive, “[t]he decision by North Carolina regulators to require excavation rather than “cap-in-place” echoes similar directives from state leaders and utilities in Virginia and Georgia, representing wins for environmentalists who argue the only safe way to protect groundwater from coal ash is to fully excavate the ponds and move the ash to plastic-lined pits or recycle it.  Most utilities prefer the “cap-in-place” method,” which is a significantly less expensive remediation alternative.

Environmental Liability Take-Away: Do not put your guard done just because a waste stream has been excluded from RCRA Subtitle C requirements for hazardous waste.  When it comes to management of wastes, avoid the penny-wise dollar foolish approach.

Remember: the definition of hazardous substances under CERCLA is broad; RCRA hazardous wastes are merely a subset of CERCLA hazardous substances.  Having cut my teeth as a CERCLA enforcement attorney assigned to large mining sites that were the subject of extensive and expensive removal and remedial actions, I have always cautioned clients and students to be mindful of potential response action exposure from the failure to properly manage and dispose of substances that are not hazardous wastes under RCRA but are hazardous substances that may pose an imminent and substantial endangerment to human health or the environment.  Thus, generation of mining wastes that are “Bevill-exempt” from RCRA hazardous waste designation, may still result in CERCLA liability.  Used oil is another example.  Generators of used oil, which is not a listed hazardous waste and is subject to relaxed standards under 40 CFR Part 279, have been identified as potentially responsible parties (PRPs) when their used oil ended up at NPL sites. 

In my mind, management of coal ash is subject to the same paradigm.  In the absence of strong regulatory standards, industry adopted standard operating procedures for coal ash disposal that in hindsight have proven to cause substantial environmental damage and are now deemed to be inadequate.  As a result, much like the hard rock mining industry in the Rocky Mountain region, enormous response costs are now being borne by utilities who have generated and disposed of coal ash in the past. 

Finally, do not allow the reduced specter of environmental enforcement and response action exposure under the current Administration to lull you into a false sense of security.  Powerful state laws like the North Carolina Coal Ash Management Act (CAMA) and active attention from environmental groups and stakeholders remain a viable force.  Moreover, the environmental regulatory pendulum will swing back… probably with a vengeance.  So, keep your eyes open, keep doing your due diligence to comply with environmental requirements and minimize response action exposure.  In other words, don’t lead with your chin!

Federal Judiciary Has Overruled 17 Environmental Rollbacks Thus Far Complicating EPA’s Environmental Regulatory Reform Efforts

Following up on Susan’s blog last week on the status of the Risk Management Program regulations, there was an informative article in the Washington Post last week that outlined the difficulty the Trump Administration is having in defending against arbitrary and capricious rulemaking challenges to its regulatory rollback efforts under the Administrative Procedure Act or APA (https://www.washingtonpost.com/world/national-security/the-real-reason-president-trump-is-constantly-losing-in-court/2019/03/19/f5ffb056-33a8-11e9-af5b-b51b7ff322e9_story.html?utm_term=.c64f1538f5ac). 

According to the Washington Post, “[f]ederal judges have ruled against the Trump Administration at least 63 times over the past two years, an extraordinary record of legal defeat that has stymied large parts of the president’s agenda on the environment, immigration and other matters.  In case after case, judges have rebuked Trump officials for failing to follow the most basic rules of governance for shifting policy, including providing legitimate explanations supported by facts and, where required, public input.”  A case-by-case deeper dive into those 63 decisions where the federal courts have ruled against the regulatory rollbacks is found at https://www.washingtonpost.com/graphics/2019/politics/trump-overruled/?utm_term=.3dcc2e6a7c06, including information about the 17 environmental decisions that have overruled rollback or delay of environmental regulations.   

As noted during my Environmental Bootcamp presentations, environmental regulatory standards are in significant flux and keeping up with the status of environmental regulations is daunting to say the least.  After all, to properly assess your environmental compliance status, you not only have to track the Federal Register for new proposed and final rules, you also have to stay up-to-date with the status of various rulemaking challenges in federal court.  At our Environmental Regulatory Bootcamp, we always provide updates on the latest environmental regulatory developments and, better yet, provide you with the tools for you to track these regulatory changes yourself going forward.

Update on EPA’s Accidental Release Prevention Requirements: Risk Management Program under the Clean Air Act, Section 112(r):

On January 13, 2017, the EPA promulgated its final rule amending the Clean Air Act’s Risk Management Program (RMP) in light of Executive Order No. 13650 (Executive Order on Improving Chemical Facility Safety and Security).  Subsequently, under EPA’s Delay Rule, the effective date of the 2017 RMP Rule Amendments was delayed on June 9, 2017, for 20 months until February 19, 2019.  However, a coalition of environmental groups, labor unions, and states filed a lawsuit challenging the Delay Rule in the U.S. Court of Appeals for the D.C. Circuit Court in a case entitled, Air Alliance Houston v. EPA, 906 F.3d 1049 (D.C. Cir. 2018).

On August 17, 2018, the D.C. Circuit issued it decision in Air Alliance Houston vacating EPA’s Delay Rule.  Importantly, on September 21, 2018, the D.C. Circuit issued its mandate which made the 2017 RMP Rule Amendments effective.  EPA confirmed this with a Federal Register Notice dated December 3, 2018, stating that the 2017 Rule Amendments are in effect.  Therefore, all facilities subject to Section 112(r) of the Clean Air Act must comply with the 2017 RMP Rule Amendments.

In the interim, on May 30, 2018, EPA issued a proposed rule to change the RMP rules again.  83 Fed. Reg. 24850 (May 30, 2018).  Due to pressure from several stakeholders, EPA extended the comment period for the May 2018 Rule to August 23, 2018.  However, at this time, the status of the changes proposed in the May 2018 Rule is still unresolved.  To date, EPA has not issued a final rule amending the 2017 RMP Rule Amendments so the 2017 RMP Rule Amendments still govern.

With the May 2018 Rule, EPA proposes to rescind virtually all of the improvements under the 2017 RMP Rule Amendments.  Promulgating these proposed changes presents EPA with a significant challenge as the D.C. Circuit concluded in striking down the Delay Rule that it was arbitrary and capricious for EPA to delay the protections afforded by the 2017 RMP Rule Amendments.  We anticipate that any new final rule will be subject to further litigation.  

The RMP Rule Amendments’ twisted history highlights how EPA’s rollback of Obama era regulations has not always gone smoothly.  Several other rollbacks have been challenged in court creating regulatory uncertainty for health, safety, and environmental professionals as these rules first proceed through the court system and then through new rulemaking by EPA, OSHA and MSHA.  OSETG’s Regulatory Bootcamp will update you on such important regulatory challenges and allows you to understand the implications for your facility.  Stay tuned for more changes ahead!   

Welcome

Welcome to the Owen Santarella Environmental Regulatory Blog where we will provide timely regulatory updates and discussion on pressing environmental issues. The focus for my inaugural blog are two issues fundamental to the protection of human health and the environment in the United States: (1) power generation in the United States and the environmental impacts from various energy sources; and (2) the significant reduction in inspections and enforcement activities by EPA under the Trump Administration during FY 2018.

Power Generation in the United States: A fascinating article by the Visual Capitalist entitled “Mapped: Every Power Plant in the United States” (https://www.visualcapitalist.com/mapped-every-power-plant-in-the-united-states/) clearly illustrates the dramatic evolution of power generation in the United States since 1950 often without regard to federal regulations. My experience has been that the bottom-line ultimately drives energy source choices made by public utilities. Of course, numerous other external factors have the potential to impact that bottom-line including federal, state and local regulations and subsidies as well as public opinion. Nevertheless, remember going forward that the energy generation mix has never been static in the United States … and probably never will be.

Significant Decline in EPA Enforcement Activity in FY 2018: EPA’s low enforcement numbers under President Trump have been getting lots of attention from Congress and the media again. A recent Environmental Integrity Project Report (http://www.environmentalintegrity.org/news/new-report-epa-enforcement-at-record-low-in-2018/) documents the precipitous drop in EPA inspections (i.e., EPA completed 10,612 inspections and evaluations the lowest number in almost two decades and only about 60 percent of the average annually since 2001 according to EIP) and civil enforcement by EPA and DOJ (i.e., EPA sent 123 civil pollution violation cases to DOJ for prosecution in FY 2018 - up slightly from 2017 but down 42 percent from the 211 average annually during the Obama Administration and less than half of the 304 average during the George W. Bush Administration according to EIP). Regulatory relief has its appeal but, in my opinion, EPA must present a credible enforcement force if EPA’s fundamental policy goal of ensuring that violators of environmental requirements do not receive an inappropriate and undue economic benefit over those who comply with the law. Forgive me if I sound didactic, I am a former EPA regional enforcement attorney who also served in EPA’s Legal Enforcement Policy Division as a law clerk way back when dinosaurs roamed the earth….

So, what does this all mean to the regulated public? First of all, I caution that EPA and the States are still bringing enforcement actions and nobody wants to be the example used by EPA to counter charges of lax enforcement. Secondly, as I discuss in the ENVIRONMENTAL REGULATORY BOOTCAMP, the federal statute of limitations for environmental civil enforcement actions is typically 5 years per 28 U.S.C. § 2462 and is subject to the discovery rule as well as potentially being tolled for continuing violations. I cannot forecast the future but as a History major I caution that history has a tendency to repeat itself. The environmental regulatory pendulum in the United States has been swinging back and forth rather violently since the 1980’s. In short, environmental violations that are not acted upon under this Administration may be seen as ripe for enforcement in the future. Finally, the specter of citizen suits to enforce alleged violations of federal environmental statutes looms large particularly for high-profile facilities. I, therefore, continue to counsel that assiduous compliance with environmental regulatory requirements remains the most prudent route.

DOJ/EPA Assesses $616,000 Civil Penalty Against ExxonMobil for CAA § 112(r)

Violations.  Last Wednesday, DOJ and EPA announced the lodging of a Consent Decree with ExxonMobil Oil Corporation (ExxonMobil) to resolve alleged violations of section 112(r) of the federal Clean Air Act (Risk Management Program requirements) arising from a 2013 fire at the company’s oil refinery in Beaumont, Texas, that killed two employees and injured ten others.  According to the DOJ press release (https://www.justice.gov/opa/pr/exxonmobil-pay-civil-penalty-and-take-remedial-measures-resolve-clean-air-act-violations), “[t]he April 17, 2013, fire at the refinery occurred when workers used a torch to remove bolts from the top, or “head,” of a device called a heat exchanger.  The torch ignited hydrocarbons released from the head.  EPA’s inspection following the incident disclosed violations of Section 112(r) and of the regulations known as the Chemical Accident Prevention provisions.”  The DOJ press release states that “ExxonMobil will pay a $616,000 civil penalty, hire an independent third party auditor to conduct a compliance audit of ExxonMobil’s procedures for opening process equipment at ten different process units at the refinery, and perform a supplemental environmental project (SEP) under EPA’s SEP Policy to purchase a hazardous materials Incident Command Vehicle (ICV), valued at $730,000, for the Beaumont Fire & Rescue Service (BFRS).  The auditor will also evaluate the company’s procedures for conducting risk-based mechanical integrity inspections.”

 Putting aside the question of whether the civil penalty is excessive or inadequate for violations that resulted in two worker fatalities, the press release reinforces that DOJ and EPA are still out there enforcing alleged environmental violations particularly high-profile violations that have garnered public and political attention.  As a former EPA enforcement attorney under both Republican and Democratic administrations, I can attest to the fact that irrespective of the Administration’s priorities, the Agency remains sensitive to public perception that EPA is failing to enforce alleged environmental violations.  I also note that the EPA enforcement staff do not lose their “tiger stripes” with a change in administrations.  I discuss these concepts and present environmental enforcement negotiation strategies at our ENVIRONMENTAL REGULATORY BOOTCAMP.  Remember, no one wants to be the example or the exception to the rule.  Don’t lead with your chin!