EPA RELEASES FRAMEWORK FOR FUTURE CERCLA 108(b) FINANCIAL RESPONSIBILITY RULEMAKING

Posted on October 26, 2015 by Ronald R. Janke

The Environmental Protection Agency has released a framework for its future financial responsibility rulemaking under CERCLA 108(b).  Although this framework states EPA’s current thinking only in general terms, this document represents the clearest public statement of the agency’s intentions since it announced its intention to develop such rules for hardrock mining facilities in 2009.  This framework also informs of EPA’s intentions toward other classes of facilities in future rulemakings under this authority.  This framework appeared as part of a court filing on August 31, 2015 and was the subject of an EPA webinar on September 29, 2015.

EPA states that the regulatory approach it is considering has five foundational components. First, the universe of facilities to be regulated are hardrock mines and “primary processing activities located at or near the mine site that are under the same operational control as the mine.”  Second, the flow of funds from the financial responsibility instrument to the CERCLA would supplement existing CERCLA sources of funding, as EPA intends to use its existing CERCLA enforcement processes first to clean up sites.  Third, the scope and amount of financial responsibility would consist of three components: (1) response costs, calculated based on a model being developed by EPA to reflect the primary site conditions; (2) a fixed amount for natural resource damages and (3) a fixed amount for health assessment costs.

Fourth, EPA does not intend to preempt state, tribal and local government mining and reclamation closure requirements.  EPA intends to avoid preemption under CERCLA 114(d) by adopting financial responsibility requirements that are “in connection with liability for a release of a hazardous substance” in contrast to “many” state regulatory requirements designed to assure compliance with reclamation and closure requirements.  Fifth, EPA likewise intends that its CERCLA financial responsibility requirements will be distinct from federal closure and reclamation bonding requirements imposed by other federal agencies under other laws with jurisdiction over mining on federal lands.

The morsel of information provided in EPA’s framework leaves interested parties hungry for more information by what is left unsaid.  Particular concerns are the response cost model and its inputs and the path that EPA intends to tread around the multitude of existing financial assurance mechanisms that already apply to hardrock mining to avoid duplication and preemption.  In this regard, EPA could not have picked a more difficult place to begin drafting CERCLA 108(b) rules than for this industry, which has in place many and extensive financial assurances governing the impact of its operations.

What Do Opponents of the Clean Power Plan and the Oklahoma Sooners Have In Common?

Posted on October 23, 2015 by Seth Jaffe

So the Clean Power Plan has been published in the Federal Register.  For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP. 

Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue.  West Virginia apparently won the race and is the named plaintiff in the main petition filed so far. 

Perhaps because Oklahoma has been one of the most persistent, and vocal, opponents of the CPP, this called to mind the origin of the Sooner State’s nickname – which seems particularly apt, since Oklahoma was one of the states that couldn’t wait for the rule to be promulgated to sue.

Sooners

Oklahoma is not actually among the plaintiffs in the West Virginia suit.  Oklahoma filed its own petition today.  One wonders whether Oklahoma was banished from playing with the other states as a result of its impatience.  Unlikely, since most of those in the West Virginia suit also filed early, but it did call to mind that other famous event in the history of the west, as recorded in Blazing Saddles.

Is It Time To Re-Think Additionality?

Posted on October 14, 2015 by Wendy B. Jacobs

Many organizations have announced voluntary greenhouse gas emission reduction goals by which they aim to reduce their emissions of greenhouse gases despite the absence of any legal requirement to do so.  Meeting these goals implicates the concept of additionality when the goals are to be met, in part, through off-site actions, such as the purchase of carbon offsets, retirement of renewable energy credits, or construction of off-site renewable energy projects.  The concept of additionality seems simple: in principle, emission reductions attributable to an organization’s actions should only be recognized or “counted” if such reductions are more than what would have been achieved absent the action.  Applying the concept of additionality in the real-world, however, is complicated. Perhaps unnecessarily so? 

First, the “proof” of additionality required by many of the certifying bodies can be confusing and conflicting.  For the faint of heart, the concern about proof discourages any action other than the purchase of “certified” paper offsets.  A second, confounding problem results from the greening of the grid itself.  Emissions have been falling for many organizations simply because the electricity they procure from the grid is becoming less carbon intensive.  How to square these emission reductions with the concept of additionality leads one to question how the concept of additionality should be applied to voluntary emission reduction goals. 

In the context of regulated organizations, the idea of additionality makes sense.  Organizations that must comply with a regulatory scheme to reduce their emissions of greenhouse gases should not be allowed to claim credit for off-site actions if such actions do not, in fact, lower emissions beyond what they would have been absent the organization’s actions.  No organization (regulated or unregulated) wants to waste money paying for off-site actions that do not in fact lower emissions.  Establishing that a particular organization’s action will, in fact, lower emissions more than would have occurred absent that organization’s action turns out to be much more difficult than it at first appears given the multiplicity of variables that come into play:   who else might be inclined to take the same action?  When?  For what reason? Is the action occurring in an area governed by a renewable portfolio standard or not?  Many different criteria are used by regulatory agencies and voluntary verification programs.  Three examples are helpful.

The California Air Resources Board treats emission reductions as “additional” if they exceed what would be required by law or regulation and if they exceed what would “otherwise occur in a conservative business-as-usual scenario.”  17 CCR § 95802(a)(4).  The American College & University Presidents' Climate Commitment (“ACUPCC”) replaces “conservative business-as-usual” with “reasonable and realistic business-as-usual.” The Verified Carbon Standard adds a requirement that the reductions are additional only if they would not have occurred “but for” the offsite organization’s investment.  These different definitions have real consequences for the types of offset projects (i.e., emission reductions) qualifying as “additional.”  Energy efficiency projects at a school in an economically disadvantaged city might count as additional under ACUPCC’s definition because the schools are unlikely to undertake the energy efficiency measures themselves.  In contrast, such measures are unlikely to count as additional under the Verified Carbon Standard definition because the schools would save money from the efficiency measures if undertaken by themselves.

For unsophisticated organizations with limited resources, using the most conservative criteria for additionality that have been developed by other parties, whether regulatory agencies or voluntary verification programs, makes sense – emission reductions are assured and at minimal transactional cost to the organization.  For more sophisticated organizations with resources to experiment and innovate, strict adherence to conservative additionality criteria can be counterproductive.  Many large municipalities, large research universities and corporations have the in-house capacity to invest in bold and innovative experiments and to assess whether a given project or investment is in fact reducing emissions. Organizations such as these could use their in-house talent and money to develop creative, bold, innovative and novel projects that could reduce emissions, but will they do so if such projects might fail a strict additionality test?  At a university, such projects have the added benefit of complementing the core mission to teach, research, and demonstrate ideas that others beyond the university could leverage.  Should an organization abstain from pursuing such projects simply because they would fail a strict additionality test, which the organization is not legally obligated to apply?  Should we re-think the circumstances in which strict observance with additionality is necessary to avoid a public relations nightmare (i.e. being accused of not really meeting the voluntary goal)?

The application of additionality in the context of voluntary goals is also complicated by the fact that the electric grid itself is becoming greener.  Most organizations include in their greenhouse gas emission calculation the emissions resulting from their electricity consumption.  Many organizations first announced their voluntary emission reduction goals five to ten years ago when few predicted that the electric grid would become significantly greener so fast.  Here in Massachusetts, largely because of the increased use of natural gas, the electric grid now emits 20% less carbon dioxide per MWh consumed than it did ten years ago.  That means that an organization in Massachusetts that has not taken any action designed to reduce its emissions will nevertheless have lowered its emissions by consuming electricity from the local grid.  Crediting such emission reductions towards a voluntary goal is in tension with the concept of additionality because the reductions occurred without the need for the organization to take any action designed to reduce its emissions.   

Hence, the greening of the grid should cause an organization to re-think the nature of its voluntary emission reduction goal:  is the goal simply an accounting objective that can be met by actions external to the organization, such as the greening of the grid by electric utilities, or is it a a bigger, perhaps even moral, commitment to undertake a minimum level of effort to reduce emissions in addition to those resulting from the greening of the grid?  If the former, an organization committed to a voluntary goal can celebrate that the utilities have made its commitment cheaper to attain.  If the latter, perhaps an organization should make its goal even more stringent to avoid taking credit for emission reductions achieved by others.  Is this second approach more consistent with the concept of additionality?  Should we applaud an organization that is not required by law to make any emission reductions but that purchases some carbon offsets and declares it has accomplished its voluntary goal of emission reductions?  Should we applaud an organization that designs, invests in or otherwise makes an effort to create a project that actually achieves emission reductions even though it is possible that someone somewhere might also have the same idea and be willing to make the same investment?

I do not pretend to have the answers to these questions.  But, I do know that many organizations that have set voluntary goals are grappling with these questions now, and others will face them in the future.  I welcome your comments.  

EPA Proposes Changes to Hazardous Waste Generator Rules and a new Management of Hazardous Waste Pharmaceuticals Rule – One Step Forward, One Step Back?

Posted on October 12, 2015 by Kenneth Gray

The U.S. Environmental Protection Agency (EPA) is proposing two new hazardous waste rules that EPA believes will strengthen environmental protection and reduce regulatory burdens.  The first is an update to the hazardous waste generator rules; the second is a new set of management standards for hazardous waste pharmaceuticals. 

These proposed rules have had a long gestation, and the generator proposals have been decades in the making.  Both proposed rules were signed by EPA on August 31, 2015 and will be published in the Federal Register for public comment within the next few weeks.  

While touted as providing needed flexibility, the rules are far from simple.  The axiom of environmental regulation holds true: complex rules only become more complex over time.

Hazardous Waste Generators

The proposed updates to the Hazardous Waste Generator Rules include more than 60 changes. Among the more notable changes is EPA’s proposal to allow a waste generator to avoid changes in generator status when generating larger amounts of waste only occasionally, provided the episodic waste is properly managed and additional notifications are submitted.  In addition, the rules would explicitly allow a conditionally exempt small quantity generator facility to send hazardous waste to a large quantity generator facility under common control.  In this case, a company could transfer waste from one of its locations to another.  That sounds logical, but there are “strings attached” to both proposals in the form of additional requirements or conditions for access. 

There are numerous other changes proposed, or highlighted for comment, some of which are likely to make waste management and compliance more complicated.  These provisions include:

  • New provisions on documenting waste determinations
  • Regular reporting by Small Quantity Generators
  • Additional labelling of containers for contents and hazards
  • Longer record keeping period for inspection logs
  • Required arrangements with responders (not just attempts)
  • Additional procedures for closure
  • Additional training for employees at Satellite Accumulation Areas 

These proposed changes are sure to provoke comments and controversy. In several of these areas, there will be more “opportunities for environmental excellence” (also commonly referred to as opportunities for violations).

Hazardous Waste Pharmaceuticals

The newly proposed Hazardous Waste Pharmaceuticals Rule includes a tailored, sector specific set of regulations for the management of hazardous waste pharmaceuticals by “Health Care Facilities” (including pharmacies) and “Reverse Distributors” (businesses that accept the return of pharmaceuticals). The rule would only apply to pharmaceuticals that already meet the definition of RCRA hazardous waste and that are generated by health care facilities.  However, for the first time, “Reverse Distributors” would be regulated under hazardous waste rules.

EPA is not proposing to change the list of pharmaceutical wastes that are considered hazardous wastes, with the exception of possible changes to address low-concentration nicotine products.  The Agency is also generally requesting comment on what criteria it might use to identify new pharmaceutical wastes.  The Agency abandoned its 2008 proposal that would have added new pharmaceuticals and applied new universal waste standards.  In fact, EPA has announced that universal waste management is prohibited.

Although already prohibited under most circumstances, EPA is adopting an explicit ban on flushing pharmaceuticals down the sink and toilet.  The Agency estimates that this will prevent the flushing of more than 6,400 tons of hazardous waste pharmaceuticals annually.  (Really? That seems pretty high…)  

EPA hopes that the new rule will make hazardous waste management easier for health care professionals by removing the traditional manufacturing-based hazardous waste generator requirements and instead providing a new set of regulations that are “designed to be workable in a health care setting.”  The Agency was sympathetic to the view that the existing hazardous waste rules were viewed as complex and difficult to comply with in a health care setting.  (Gee, haven’t all generators reached that conclusion for their industries?)  While these may be simplified as compared to existing hazardous waste rules, complying with the management standards will still require effort and diligence.  

The pre-publication versions are available on EPA’s website:

http://www2.epa.gov/hwgenerators/pre-publication-version-hazardous-waste-generator-improvements-proposed-rule

http://www2.epa.gov/hwgenerators/pre-publication-copy-management-standards-hazardous-waste-pharmaceuticals-proposed-rule

Curiouser and Curiouser: Sixth Circuit Not Sure of Jurisdiction but Stays WOTUS Rule Anyway

Posted on October 9, 2015 by Rick Glick

Does this make sense to you?  Eighteen states petitioned the Sixth Circuit to challenge the new rule adopted by EPA and the Corps of Engineers defining “waters of the United States” under the Clean Water Act.  Then the petitioners move the court to dismiss their own petition for lack of subject matter jurisdiction, but at the same time request a stay of the rule.  And then, the court acknowledges it may not have jurisdiction but issues the stay anyway!  That is exactly what Sixth Circuit did in the case published today.  

This case is among many seeking to block the rule.  The Clean Water Act confers original jurisdiction upon the circuit courts for challenges to “effluent limitations or other limitations.”  But as reported earlier in this space, thirteen states convinced a federal district judge in North Dakota that he had jurisdiction because the WOTUS rule is merely definitional, and neither an effluent nor other limitation. 

The court concluded that petitioners have a good chance at prevailing on the merits, that the rule exceeds “guidance” given by the Supreme Court in extending CWA jurisdiction too broadly.  The court also indicated that the final rule may have strayed too far from the notice given in the proposed rule in its definitions of jurisdictional waters.

The majority was not troubled by the fact the parties are still briefing subject matter jurisdiction, finding that it had plenty of authority to preserve the status quo pending a jurisdictional determination.  The dissent took the view that the proper sequence is to first decide jurisdiction, then decide on a national stay of a rule years in the making.  Pants first, then shoes.

Did the majority consider the situation an emergency that required immediate action?  No, the court found that petitioners were not persuasive that irreparable harm would occur without a stay, but neither could the court find any harm with freezing implementation of the rule.  The reasoning seems to be that we’ve muddled through so far, let’s take a step back and consider all the implications before implementation. 

Why do the states prefer to go after the rule in the district courts instead of the circuit courts of appeal?  Maybe they believe they can forum shop to find conservative judges and build a favorable body of case law before appealing.  Or maybe they believe they can more directly attack the science underlying the rule or otherwise augment the administrative record.  Whatever the reasons, the ultimate return of this issue to the Supreme Court will be delayed and the law dealing with regulation of wetland fills will remain as confused as ever.

Is Our Diet Healthy if it Threatens the Planet? Environmental Sustainability and the Dietary Guidelines for Americans

Posted on October 8, 2015 by Lisa Heinzerling

This week, the Obama administration passed up an opportunity to promote environmental sustainability by incorporating sustainability into the Dietary Guidelines for Americans. The Secretaries of the Departments of Agriculture and Health and Human Services, Tom Vilsack and Sylvia Burwell, announced in a blog post that they would not follow the recommendation of their scientific advisory committee by incorporating environmental sustainability into the dietary guidelines. Their decision is unfortunate, and reflects a crabbed understanding of their authority under the law.

Experts on food systems have long drawn a connection between a healthy environment and food security. The representatives of the 185 countries present at the first-ever World Food Summit in 1996, for example, observed the links between food insecurity and environmental problems such as the loss of biodiversity, desertification, overfishing, degradation of land, forests, water, and watersheds, and ecological changes brought on by global warming. A substantial impetus behind the contemporary food movement is the conviction that our food system, and the security of the food supply it creates, is only as stable as the environment from which it comes. Even the Pope is onto the intimate connection between food security and the environment: the 2015 papal encyclical on the environment and poverty, Laudato Si', emphasizes the importance of a healthy environment to a secure food system. As Wendell Berry, the great agrarian and essayist, has put it, "What is good for the water is good for the ground, what is good for the ground is good for the plants, what is good for the plants is good for animals, what is good for animals is good for people, what is good for people is good for the air, what is good for the air is good for the water. And vice versa."

Federal agencies in the United States have increasingly been urged to recognize the relationship between a healthy environment and secure food. A recent entry in this field is the 2015 recommendation from a scientific advisory committee to the Department of Agriculture (USDA) and the Department of Health and Human Services (HHS), urging that these agencies revise the Dietary Guidelines for Americans to take into account the environmental consequences of industrial agriculture and their implications for future food security. 

The Dietary Guidelines for Americans are, as USDA and HHS have described them, "intended to be used in developing educational materials and aiding policymakers in designing and carrying out nutrition-related programs, including Federal nutrition assistance and education programs," and they "also serve as the basis for nutrition messages and consumer materials developed by nutrition educators and health professionals for the general public and specific audiences, such as children." Previous iterations of the Dietary Guidelines for Americans have contained recommendations on intake of fat, sodium, alcoholic beverages, physical activity, and more. The influence of the Guidelines on food assistance programs and educational initiatives has long made them a focal point for political and scientific controversy.

The statutory basis for the Dietary Guidelines for Americans is the National Nutrition Monitoring and Related Research Act of 1990. The Nutrition Monitoring Act requires the Secretaries of Agriculture and Health and Human Services to "publish a report entitled 'Dietary Guidelines for Americans'" every five years. This report is to contain "nutritional and dietary information and guidelines for the general public." The information and guidelines must be "be based on the preponderance of the scientific and medical knowledge which is current at the time the report is prepared." 

Information and guidelines concerning the environmental sustainability of our present diet are assuredly "dietary information and guidelines for the general public." The exhaustive report prepared by the scientific advisory committee, reflecting current evidence on the link between dietary choices and environmental sustainability, certainly reflects "the preponderance of the scientific … knowledge which is current" at this time. The secretaries of USDA and HHS would have been well within their range of legal discretion in deciding that environmental sustainability – no less than advice on alcohol consumption or physical activity – should be considered in developing food assistance packages and educational programming for Americans. Indeed, given the huge contribution of agriculture to climate change, incorporating environmental sustainability into the dietary guidelines could well have become an important feature of the Obama administration's legacy on climate change – if the secretaries of USDA and HHS had had the vision and will to make it so.

A Brief Rant on Cost-Effectiveness Analysis

Posted on October 2, 2015 by Seth Jaffe

On September 29, 2015, the 3rd Circuit Court of Appeals remanded EPA’s approval of Pennsylvania’s regional haze SIP.  Although I think that the decision was important and largely unobjectionable, it did get one issue wrong, and it happens to be an issue near and dear to my heart – cost-effectiveness analysis.  I am regularly surprised by the number of people who oppose its use and the number of people who just plain don’t get it.  The 3rd Circuit (and EPA and the plaintiffs) fall into the latter category in this case.

The issue here was what metric to use in measuring the cost-effectiveness of technologies intended to reduce regional haze.  Since this case involves compliance with a rule intended to reduce haze, I would have thought it self-evident that cost-effectiveness would be measured by the dollars spent divided by the amount of haze reduced.  Silly me.

For those of you who don’t know, there is a measure of visibility; it is known as a “deciview.”  Pennsylvania, to its credit, indeed measured cost-effectiveness on a dollars/deciview metric.  The plaintiffs argued that cost-effectiveness should be measured on the basis of dollars/ton of pollutant removed.  EPA waffled, first agreeing with the plaintiffs, but then concluding that, while its guidelines call for $/ton, it is acceptable to use $/dv.  The Court, following the rule of decision that it must evaluate EPA’s decision based on the reasoning used in the rule, rather than on a rationale first provided in litigation, concluded that, because EPA’s own guidelines found the $/dv metric to be “flawed”, EPA’s approval of the $/dv metric was unjustified and must be remanded.

I am not sure I can count the ways this was screwed up, but let me put it simply.  If we’re assessing cost effectiveness, and we have a measure of the outcomes we care about, we should use it.  To use a proxy – emissions – instead of the actual outcome the rule is intended to affect – visibility – is just plain nuts.

And I have to add that, not only did the Court get this 180 degrees wrong, but it did not even seem to be aware of just how bizarre it is to reject the metric that actually measures the outcomes the rule is trying to achieve.