On November 19, 2013, U.S. Environmental Protection Agency (“EPA”) released its “Draft FY 2014-2018 EPA Strategic Action Plan” (the “Plan”). Of note, the public comment period for the Plan ends on January 3, 2014.
The Plan describes five EPA strategic goals:
- Addressing climate change and improving air quality;
- Protecting America’s waters;
- Cleaning up communities and advancing sustainable development;
- Ensuring the safety of chemicals and preventing pollution; and
- Protecting human health and the environment by enforcing laws and assuring compliance.
The Plan also addresses four EPA cross-cutting fundamental strategies:
- Working toward a sustainable future;
- Working to make a visible difference in the communities;
- Launching a new era of State, tribal, local, and international partnerships; and
- Embracing EPA as a high-performing organization.
Within the Plan, each of these goals and strategies is discussed in turn and in detail. For example, the goal of addressing climate change and improving air quality includes EPA’s priority goal to reduce greenhouse gas (“GHG”) emissions from new model vehicles and trucks by September 30, 2015. This goal would potentially result in reducing GHG emissions by 6 billion tons and reducing oil consumption by about 12 billion barrels over the lifetime of the vehicles. As another example, the goal of cleaning up communities and advancing sustainable development includes the benchmark of having 18,970 additional contaminated sites cleaned up and made available for use by 2015.
However, the Plan also confirms that EPA is envisioning less enforcement of environmental laws over the next five years. Some primary examples of EPA’s reduced enforcement efforts going forward include:
- Conducting only 70,000 federal inspections and evaluations by 2018, when 105,000 such inspections and evaluations had been conducted on average per year between FY 2005 and 2009;
- Initiating only 11,600 enforcement cases by 2018, when 19,500 enforcement cases had been initiated on average per year between FY 2005 and 2009; and
- Concluding only 10,000 enforcement cases by 2018, when 19,000 enforcement cases were concluded on average per year between FY 2005 and 2009.
EPA states in its Plan that its objective is to: “Pursue vigorous civil and criminal enforcement that targets the most serious water, air, and chemical hazards in communities to achieve compliance.” So, it is not surprising that EPA suggests that its strategy is to address the worst polluters first in identified sectors, which will result in less pollution, which EPA believes will further result in fewer enforcement actions over time.
Additionally, throughout the Plan, EPA stresses its intention to “modernize” how it functions. As the primary example, EPA envisions the use of “Next Generation Compliance” strategies and tools to improve compliance while reducing pollution.
This Next Generation Compliance includes:
- Designing regulations and permits that are easier to implement, with a goal of improved compliance and environmental outcomes;
- Using and promoting advanced emissions/pollutant detection technology so that regulated entities, the government, and the public can more easily see quantified pollutant discharges, environmental conditions, and noncompliance;
- Shifting toward electronic reporting by regulated entities so that EPA has more accurate, complete, and timely information on pollution sources, pollution, and compliance, saving time and money while improving effectiveness and public transparency;
- Expanding transparency by making the information that EPA has today more accessible, and making new information obtained from advanced emissions monitoring and electronic reporting more readily available to the public; and
- Developing and using innovative enforcement approaches (e.g., data analytics and targeting) to achieve more widespread compliance.
As EPA admits in its Plan when discussing Next Generation Compliance, “. . . [W]e are not there yet . . . it will take years to fully implement this transition.” Thus, if EPA’s Plan is finalized, it may result in concerns over reduced environmental enforcement while EPA works toward a long-term process of implementing new methods of being in and monitoring environmental compliance.
Duke Energy Renewables Inc., a subsidiary of Duke Energy Corp., pled guilty in the deaths of golden eagles and other birds at two wind farms in Wyoming. According to the Justice Department, it is the first criminal conviction under the Migratory Bird Treaty Act for unlawful avian takings at wind projects.
Under a plea agreement filed in the U.S. District Court for the District of Wyoming, subsidiary Duke Energy Renewables Inc. was sentenced to pay fines, restitution and community service totaling $1 million. It also was placed on probation for five years, during which it must implement a plan aimed at preventing bird deaths at the company's four wind projects in the state.
Prosecutors alleged that Duke failed to make all reasonable efforts to build the projects in a way that would avoid the risk of avian deaths by collision with turbine blades, despite prior warnings about this issue from the U.S. Fish and Wildlife Service. The plea agreement cited approximately 163 deaths of migratory birds, including golden eagles, other raptors, larks, buntings and other birds at the Campbell Hill and Top of the World wind facilities in Converse County, Wyoming.
The Fish and Wildlife Service has estimated that bird mortality from wind turbines amounts to 440,000 a year, a number contained in budget information released for fiscal year 2013. The service estimated that mortality would exceed 1 million a year by 2030 as wind farms proliferate.
The payments for the $1 million in fines breaks down this way:
- $400,000 will go to the North American Wetlands Conservation Fund, which is federally directed
- $100,000 will be paid to the State of Wyoming
- $160,000 will be paid to the National Fish and Wildlife Foundation
- $340,000 to a conservation fund
The American Wind Energy Association (AWEA) pointed out in a statement on the case that experts view "climate change as the single greatest threat to wildlife and their habitats." Since wind power is produced without creating greenhouse gas emissions, it is a "key to both meeting our nation's energy needs and protecting wildlife in the U.S. and abroad." Indeed, wind power is a key part of fighting climate change and mitigating its damage.
By: Steven M. Siros
When the United Senate voted to require only a simple majority to approve cloture motions dealing with nominations for executive agencies and judicial posts (excepting the United States Supreme Court for now), it opened the door for many Obama-appointees to various posts within U.S. EPA. In fact, during a press conference when Senator Reid attempted to justify the Senate's actions, he cited the case of Ken Kopocis, an Obama nominee who had been appointed to head up U.S. EPA's Office of Water. According to Senator Reid, Mr. Kopocis had been waiting for almost 890 days for an up or down vote; Senate Republicans justified their refusal to vote on Mr. Kopocis' nomination because they were opposed to certain policies enacted by U.S. EPA's Office of Water. Other Obama nominees to key U.S. EPA posts that are expected to benefit from this rule change include Thomas Burke (nominated to head up U.S. EPA's Office of Research and Development) and Janet McCabe (presumptive nominiee for U.S. EPA's Office of Air and Radiation). In addition to U.S. EPA posts, the Senate's rule change will also make it easier for President Obama to fill vacant court seats. In fact, shortly after voting to change the rules, Senate Democrats moved to reconsider three nominees to the U.S. Court of Appeals for the District of Columbia that had previously been filibustered by the Senate Republicans.
By: Andi S. Kenney
On November 6, 2013, the Fifth Circuit Court of Appeals affirmed an Administrative Law Judge’s decision that Shaw Global Services, Inc. violated the respirator fit-testing requirements by allowing sixteen months between fit tests. Shaw Global Energy Services v. Perez, Secretary of Labor, No. 12-60834 (5th. Cir., Nov. 6, 2013). The respirator standard requires an employer to “ensure that an employee using a tight-fitting facepiece respirator is fit tested prior to initial use of the respirator, whenever a different respirator facepiece . . . is used, and at least annually thereafter.” 29 CFR §1910.134(f)(2) (emphasis added). The parties did not dispute that Shaw conducted appropriate initial and subsequent fit testing; the issue was whether Shaw’s subsequent fit tests were completed in a timely manner. Shaw at 6.
The employer argued it complied with the annual fit-testing requirement because “at least annually thereafter” means that fit testing must be completed at least once each calendar year. By conducting initial fit-testing in June 2007 and subsequent fit-testing in October 2008, Shaw concluded that it met the annual retest requirement. The Secretary disagreed, arguing that “at least annually” meant “no later than 365 days after the previous testing.” Shaw at 7.
The court deferred to the Secretary in this instance, finding the Secretary’s interpretation consistent with the regulatory language and the purpose of the standard. The court noted that the employer’s interpretation could lead to a twenty-three month gap if the initial fit test was in January of one year and the retest was not completed until December of the subsequent year. Such a delay would frustrate the regulations purpose as reflected in the preamble of “standardizing the fit-testing protocols by ensuring that there are not significant fluctuations in the amount of time between tests.” Id. However, the court did not embrace OSHA’s interpretation in its entirely, “leav[ing] for another day the question of whether a gap between testing of a year and a few days would violate § 1910.134(f)(2).” Shaw at 7, fn. 3.
Although the court’s opinion focused solely on the respirator standard, it may have broader applicability because many other OSHA standards require action “at least annually.” The hearing conservation standard, for example, requires the employer to conduct audiograms at least annually (29 CFR 1910.95(g)(6)). Likewise, the lockout/tagout standard requires the employer to conduct periodic inspections of its energy control procedures at least annually (29 CFR 1910.147(c)(6)), while the fire extinguisher standard requires the employer to conduct training at least annually for certain employees (29 CFR 1910.157(d)(3) and (g)). Equipment inspections, chemical monitoring and medical examinations, comprehensive program reviews and retraining may also be required at least annually. The Shaw case is a reminder that to ensure compliance, employers must not only focus on the content of their OSHA programs but must also be mindful of the calendar when implementing them.
By: E. Lynn Grayson
In a recent blog by Howard Shelanski, OMB's Administrator of the Office of Information and Regulatory Affairs (OIRA), it was announced that OMB is issuing updated values for the Social Cost of Carbon (SCC) used to estimate the value to society of reducing carbon emissions. These updated values reflect minor technical corrections to the estimates we released in May of this year. For example, these technical corrections result in a central estimated value of the social cost of carbon in 2015 of $37 per metric ton of carbon dioxide (CO2), instead of the $38 per metric ton estimate released in May.
At the same time, in response to public and stakeholder interest in SCC values, OMB's OIRA will provide a new opportunity for public comment on the estimates in addition to the public comment opportunities already available through particular rulemakings. Details on this public comment process will be published soon in the Federal Register.
Critics have charged that the SCC calculation revised earlier this year in May exaggerated the potential costs of rising seas and droughts from climate change to justify regulations that would pose a higher upfront cost for industry. Critics have been particularly vocal on how the May 2013 SCC changes were communicated via a fairly minor Department of Energy regulation of microwaves.
The blog suggests the SCC estimate will be lowered by $1 to $37 a ton of carbon dioxide after further assessment of SCC models. The initial calculation in 2010 estimated the SCC at $23.80 a ton.
The SCC has significant impacts on a number of environmental rulemakings and also is seen by some as a foreshadowing of a possible carbon tax proposal.
By: E. Lynn Grayson
EPA has released a new report The Importance of Water to the U.S. Economy addressing the total economic value of water resources. According to the report, the economic value of water will rise, and decision-makers in both the private and the public sectors will need information that can help them maximize the benefits derived from its use. This report is an initial step toward (1) raising awareness of water's importance to our national economic welfare, and (2) assembling information that is critical to sustainably managing the nation's water resources. It highlights the EPA's review of the literature and practice on the importance of water to the U.S. economy, identifies key data gaps, and describes the implications of the study's findings for future research.
The report addresses three key areas:
- How is Water Important to the U.S. Economy?
- What Do We Know About the Economic Value of Water?
- How Do We Better Inform Our Water-Related Decisions?
In its overview, EPA concludes the following on the economic value of water.
Decisions made in major sectors of the economy have a significant impact on the economic value derived from the nation's water resources. This is particularly true for energy production, water supply, and food production, which together account for over 94 percent of water withdrawals from groundwater, streams, rivers, and lakes in the United States. Interactions among these sectors have given rise to an "energy-water-food nexus," in which demands for water, energy resources, and agricultural products are interrelated. As a result, the use of water in these sectors cannot be viewed in isolation; changes in one sector can have a direct and significant impact on the demand for, and availability of, water to others.
* * *
The breadth and diversity of these issues makes clear that collecting or generating information of good quality and developing analytic tools to use this information effectively will require a collective effort. The U.S. Geological Survey's National Water Census, which will provide improved data on water use throughout the economy and serve as a foundation for related efforts, is a key initiative in this area. Other potentially important lines of research include integrating water into economic models, which would support evaluation of the links between water use and economic output; the use of embedded resource accounting or water foot-printing techniques to estimate the virtual water content of different products; and facilitation of regional, multi-sector planning efforts to evaluate the implications of potential water supply shocks.
* * *
More insight about EPA's water synthesis report, its study components and insights on water issues from acting Assistant Administrator Nancy Stoner's blog are available at http://water.epa.gov/action/importanceofwater/.
Yesterday, the EPA announced that it finished a time-critical removal action of lead in the soil at the former Loewenthal Metals site at 947 W. Cullerton Street in Chicago. According to historical records, the facility operated as a lead and zinc smelter, as well as scrap metal dealer, during the 1940s. The half-acre site is near the center of the Pilsen neighborhood, a largely residential area, just west of Interstate 90/94. EPA technical documents indicate that sensitive populations located within one mile of the site include numerous residential properties, two elementary schools, one high school, and two churches.
In December 2011, the Illinois Environmental Protection Agency referred the site to EPA for a potential cleanup action. EPA was unable to get access to the site to conduct sampling activities until November 2012 when the Department of Justice obtained an administrative warrant pursuant to Section 104(e) of CERCLA. The site was fenced off by the City of Chicago in December 2012 to prevent public access to the property. In June 2013, EPA began the excavation and removal of 4,800 tons of contaminated soil and debris "to ensure that the property is safe for residential use in the future." Excavation and removal went down approximately three feet from the surface. The contaminated soil was treated with a stabilizer agent and disposed off-site. The contaminated soil was replaced with clean soil that was seeded to prevent erosion. The projected cost of the project was $750,000.
EPA Administrator Gina McCarthy touted the EPA's work at the site, and Jerry Mead-Lucero, of the Pilsen Environmental Rights and Reform Organization ("PERRO"), noted that PERRO has developed a good working relationship with the EPA, and that "[t]he increased cooperation between U.S. EPA and PERRO has already resulted in the remediation of contaminated sites in the neighborhood and we expect more sites to be addressed in the near future."
More information about EPA's activities in the Little Village and Pilsen neighborhoods is available on the EPA Web site: http://epa.gov/region5/littlevillagepilsen/.
Jenner & Block Partner Keri L. Holleb Hotaling and Associate Allison A. Torrence recently published an article titled "EPA Administrative Orders on Consent, CERCLA § 113(F) Contribution Actions, and the Operative Statute of Limitations After Atlantic Research," in the Environmental Law Institute's Environmental Law Reporter. The article explores contribution issues under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for companies that have entered into an administrative order on consent (AOC) with the U.S. Environmental Protection Agency (EPA). The article explains that while many parties choose to address CERCLA liability concerns through AOCs, courts are still struggling with the legal ramifications related to contribution claims following entry of an AOC. The authors caution that the U.S. Supreme Court's seminal United States v. Atlantic Research Corp. and Cooper Industries, Inc. v. Aviall Services, Inc. decisions have created complex issues that parties should consider before entering into an AOC – most significantly, what type of CERCLA claim may be available and when the statute of limitations will begin to run on those claims. Incoming associate Alexander J. Bandza also contributed to the article.
The article can be viewed at Jenner & Block's website at http://jenner.com/library/publications/12399.
By: Steven M. Siros
Effective December 11, 2013, penalties for violations of certain environmental statutes will go up. According to a final rule issued by the United States Environmental Protection Agency, 20 of the 88 statutory penalty provisions are being increased in order to adjust for inflation. Although the standard daily fine for violations of the CWA, CAA, CERCLA, and TSCA will remain at $37,500, other penalties have increased substantially. For example, the fine for violating a CAA State Implementation Plan jumped from $295,000 to $320,000 and the maximum fine for hazardous releases under CERCLA is increasing from $107,500 to $117,500. Per the Debt Collection Improvement Act of 1996, U.S. EPA is required to review its penalties every four years and adjust those penalties to take into account inflation and cost of living increases under the consumer price index. Please click here to see a copy of the final rule and accompanying table that reflects these penalty adjustments.
Institute for Legal Reform Issues Report Assessing Litigation Trends Affecting the Business Community
By: Genevieve Essig
In October, the U.S. Chamber Institute for Legal Reform issued a report, The New Lawsuit Ecosystem: Trends, Targets and Players, presenting an analysis of the “lawsuit ‘ecosystem’ for the areas of litigation abuse of most concern to the business community” and the direction in which the associated litigation trends are heading. The report covers a wide variety of subject matters, including class action litigation, mass tort litigation, asbestos litigation, securities and M&A litigation, False Claims Act litigation, and wage and hour litigation. The following observations from the report may be of particular interest to environmental attorneys:
- There has been a rise in lung cancer claims in asbestos litigation
- A few areas of mass tort litigation are waning, including climate change litigation and welding fume litigation (alleging that the manganese in welding fumes causes neurological injury)
- There has been a renewed interest in “fear of disease” claims / claims seeking medical monitoring for exposure to potentially harmful substances
The authors of the report note that lung cancer cases are “ideal” for plaintiffs’ lawyers because the life-threatening nature of the disease will support a trial preference regardless of the etiology of the disease. Further, despite causation challenges, the claims can involve significant damages and settlement value. The authors report that in Madison County, Illinois, lung cancer claims exceeded mesothelioma claims for the first time in 2012 (though the surge apparently subsided as of June 2013). A rise in such claims has been observed in other jurisdictions as well.
As for medical monitoring claims, the authors recount opinions of the U.S. Supreme Court and a number of state supreme courts in the late 1990s and early 2000s resisting medical monitoring claims in recognition of the possibility that permitting recovery for medical monitoring could divert resources from individuals who actually become sick or may become sick to those who are not sick and may never become sick as a result of their alleged exposure, but observe that the holdings in a handful of more recent cases indicate that “the pendulum has started to swing back toward permitting medical monitoring claims, in some circumstances.”