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June 2014

Environmental & Energy Cert. Petition Watch

Bandza_Alexander_COLORBy: Alexander J. Bandza

 

As part of the "Environmental & Energy Cert. Petition Watch" project, in the past several weeks, the following EHS-related petitions have been filed, denied, or granted. For a full list of EHS-related cert. petitions submitted from August 2013 through the present (as of June 15, 2014), click here.

I. FILED

Louisiana v. BP Exploration & Production, Inc., No. 13-1424

Lower Court: 5th Cir.

Subject: Clean Water Act

Question(s) Presented: In enacting the Clean Water Act, did Congress intend to strip the States of the ability to punish harm to their wildlife resulting from oil spills?

II. DENIED

Village of Hobart v. Oneida Tribe of Indians of Wisconsin, No. 13-847

Lower Court: 7th Cir.

Subject: Clean Water Act

Question(s) Presented: (1.) Whether Congress' waiver of the federal government's sovereign immunity, under § 313(a) of the CWA, for enforcement of local stormwater management ordinances, for "any property" over which it has "jurisdiction," applies to land taken into trust pursuant to 25 U.S.C. § 465. (2.) Whether lands acquired by an Indian tribe pursuant to 25 U.S.C. § 465 within its former reservation boundaries are removed from state jurisdiction because, as the Seventh Circuit ruled, they are reclassified as "Indian Country."

III. GRANTED

(None.)


EPA Evaluates Fracking Chemicals

Graham_Robert_COLORBy: Robert L. Graham

 

The EPA recently initiated a process that may result in the first federal regulation of chemicals used in fracking, a drilling technique that has significantly enhanced energy production and development in the United States.

In a response to a citizen petition under Section 21 of TSCA submitted by environmental groups in 2011 seeking the disclosure of the chemicals used in fracking, the EPA issued an advance notice of proposed rulemaking on May 9, 2014. Pursuant to that notice, the EPA announced that it will be considering rules requiring oilfield service companies and others to provide disclosure concerning the health and safety of the chemicals used in fracking. At the same time, the EPA indicated that it may stop short of issuing final rules, by instead developing incentives to induce voluntary disclosure.

Since fracking was first initiated in the United States, environmental groups have been demanding that EPA collect information on the fluids which are injected with water and sand in the fracking process. The mixture of those fluids with water and sand breaks apart underground rocks to release oil and natural gas. In particular, fracking activities include the injection of water, chemicals, proppant, and/or tracers (i) to prepare geologic formations for hydraulic fracturing, (ii) to complete a hydraulic fracturing stimulation stage, (iii) to evaluate the extent of resulting fractures, and (iv) to ensure the future ability to continue enhancement of production through stimulation by hydraulic fracturing. During each hydraulic fracturing stimulation stage, pressurized fluids containing carrier fluids such as water or gas and any combination of proppant and chemicals are injected into wells, to fracture portions of the formation surrounding a selected well section.

As part of its rulemaking, EPA is requesting comment on the information that should be obtained or disclosed and the mechanism for obtaining or disclosing information about chemicals and mixtures used in hydraulic fracturing. EPA is also seeking comment on best management practices for the generation, collection, reporting, and/or disclosure of public health and environmental information from or by companies that manufacture, process, or use chemical substances or mixtures in hydraulic fracturing activities—that is, practices or operations that can be implemented and verified in order to achieve protection of public health and the environment—and whether voluntary third-party certification and incentives for disclosure could be valuable tools for improving chemical safety. In addition, the EPA is seeking comment on ways to minimize reporting burdens and costs, avoid duplication of efforts, and maximize transparency and public understanding. Finally, EPA is soliciting comments on incentives and recognition programs that could be used to support the development and use of safer chemicals in hydraulic fracturing.

As authority for its rulemaking, EPA has invoked TSCA Section 8(d) (15 U.S.C. 2007 (d)), which authorizes EPA to require the submission of lists of health and safety studies conducted or initiated by or for, or known to or reasonably ascertainable by manufacturers, processors, and distributors of (and any person who proposes to manufacture, process, or distribute) any chemical substance or mixture. TSCA Section 8(d) also authorizes EPA to require the submission of copies of studies that are otherwise known by the person submitting the list. EPA has also invoked the Pollution Prevention Act (PPA) (42 U.S.C. 13101 et seq.), which makes pollution prevention the national policy of the United States. The PPA identifies an environmental management hierarchy in which pollution "should be prevented or reduced whenever feasible; pollution that cannot be prevented or recycled should be treated in an environmentally safe manner whenever feasible; and disposal or release into the environment should be employed only a last resort…" (42 U.S.C. 13103). Among other requirements, the PPA directs EPA to develop improved methods of coordinating, streamlining, and assuring public access to data collected under federal environmental statutes; to facilitate the adoption of source-reduction techniques by businesses; and to establish an annual awards program to recognize a company or companies that operate outstanding or innovative source reduction programs.

While the EPA has labeled its proposed rulemaking as a major first step in considering whether fracking should be a more transparent process, the oil and gas community is wary of any regulation which would undercut the growth and development of fracking. Instead, oil and gas producers have typically advocated for regulation on a state-by-state basis, which they believe will be more effective as well as more compatible with their business interests. At the same time, environmentalists have already criticized the EPA's proposed rulemaking as merely a "baby" step, because there is no guarantee that the EPA will issue rules mandating the disclosure of chemicals and mixtures used in fracking.

The controversy over disclosure will continue to grow. Fracking has already led to a natural gas boom in a number of states, including, in particular, North Dakota, Pennsylvania, Ohio, and Texas. Although drilling companies have been disclosing chemical information on an industry website (http://www.fracfocus.org/), critics contend that the website allows too many exemptions that keep ingredients secret and precludes ready aggregation of information concerning the specific chemicals used in fracking. Given the fracking boom, whether and to what extent the chemicals used in fracking are disclosed will undoubtedly remain a hot topic, both on the state and federal levels.


North Carolina Seeks To Amend Statute Of Repose Following Waldburger Decision

Siros_Steven_COLORBy: Steven M. Siros

 

Within hours of the Supreme Court's decision in CTS Corporation v. Waldburger finding that that CERCLA's "discovery rule" did not preempt North Carolina's 10-year statute of repose, the United States Department of Justice asked the Eleventh Circuit to dismiss plaintiffs' claims alleging personal injuries as a result of exposure to TCE-contaminated drinking water at the Camp Lejeune military base in North Carolina. Prompted in part by the speed in which the DOJ sought to dismiss these claims, the North Carolina legislature is now in the process of seeking to amend its statute of repose in order to allow plaintiffs to pursue personal injury claims related to exposure to hazardous substances unhindered by North Carolina's 10-year repose statute. This is certainly not unexpected and I would anticipate that in states that continue to have statutes of repose on the books, lawmakers will face increased pressure to rescind or amend these provisions to allow potentially injured parties the ability to pursue claims years (and perhaps decades) after the alleged exposure occurred.


Illinois Amendment Strips Third Party Safety Consultants of Workers’ Comp Exclusivity Protection

By Andi S. Kenney

On June 5, 2014, Governor Quinn signed a bill amending the Illinois Workers' Compensation Act and limiting protection for third party safety consultants from workers' suits. The Workers' Compensation Act prevents employees who sustain personal injuries or death in the line of duty from suing their employers for damages—establishing the workers' compensation program as the exclusive remedy. Prior to the Amendment, Section 5 of the Act explicitly stated that there is no common law or statutory right to recover damages from the employer, the employer's insurer, broker or "service organization retained y the employer, his insurer or his broker to provide safety service, advice or recommendations to the employer." The Amendment, which became PA 098-0633, limits the scope of protection from civil lawsuits to service organizations that are "wholly owned by the employer, his insurer or his broker and that provides safety service, advice or recommendations." The result is that independent, third-party safety consultants retained by employers in Illinois can no longer claim that they are covered by the workers' compensation exclusivity provision. Those safety consultants are now potentially subject to suit by injured employees who may claim their injuries are the result of the advice the consultants provided to their employers.

Illinois employers and their safety consultants may want to review should consider reviewing their consulting agreements to determine how the agreements address these potential risks, if at all. Likewise, safety consultants should review their insurance coverage to make sure it is adequate.

A copy of PA 098-0633, which amends the Worker Compensation Act and is effective immediately, can be found at http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=098-0633&GA=98.


U.S. Supreme Court Rules That CERCLA Does Not Preempt State Statutes Of Repose

Torrence_Allison_COLOR

By: Allison A. Torrence

 

The U.S. Supreme Court has clarified the preemptive power of CERCLA, holding that CERCLA does not preempt state statutes of repose, even though it does preempt certain state statutes of limitation. On June 9, 2014, the Supreme Court ruled in the case of CTS Corp. v. Waldburger, No. 13-339, reversing the Fourth Circuit Court of Appeals and upholding the application of the North Carolina statute of repose at issue. Justice Kennedy wrote the majority opinion with Justices Ginsburg and Breyer dissenting.

It is undisputed that CERCLA preempts statutes of limitations in certain circumstances. The issue decided by the Supreme Court was whether that preemption extended to statutes of repose as well. As explained by the Supreme Court, "a statute of limitations creates a time limit for suing in a civil case, based on the date when the claim accrued." Slip. op. at 5. In contrast, a statute of repose "puts an outer limit on the right to bring a civil action. That limit is measured not from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant." Slip. op. at 6.

CERCLA preempts state statutes of limitation in cases brought under state law for personal injury or property damages caused by exposure to hazardous substances by providing a federally required commencement date (FRCD) for certain statutes of limitation. The FRCD is the date the plaintiff knew or reasonably should have known that the personal injury or property damages at issue were caused or contributed to by the hazardous substance concerned. 42 U.S.C. § 9658(b)(4). If the state statute of limitations provides a commencement date earlier than the FRCD, CERCLA preempts the state law and the state limitation period shall commence on the FRCD.

The Supreme Court noted that this section of CERCLA deals only with statutes of limitation and does not mention statutes of repose. In addition, and more significantly to the Court, a statute of reposes "is not related to the accrual of any cause of action." Slip. op. at 14. In contrast, the FRCD is specifically targeted at the accrual of a cause of action. Because the purpose and application of a statue of repose is distinct from a statute of limitations, the Supreme Court held that CERCLA does not preempt state statutes of repose.

The defendant in this case had sold its polluting operations in 1987, but the plaintiffs did not discover that their well water was contaminated until 2009, and then filed suit in 2011. The North Carolina statute of repose provides that "no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action." N.C. Gen. Stat. Ann. § 1-52(16). More than 10 years had passed since the defendant's last culpable action because the defendant had sold the operations in 1987. Thus, under the Supreme Court's ruling, the North Carolina statute of repose bars the plaintiffs' claims because they were filed more than 10 years after the defendant sold the operations.

This ruling will be beneficial to defendants facing claims related to historical contamination caused by operations or actions many years ago, as was the case in CTS Corp. Now, even if the injuries caused by historical contamination remain latent and undiscovered for years, the entity responsible for that contamination may be able to rely on a state statute of repose to bar future claims related to the historical contamination.

The Supreme Court's decision is available here.


New Report Concludes Water Will Impact Business Growth

Grayson_Lynn_COLORBy: E. Lynn Grayson

 

A new report "Bridging Concern with Action: Are U.S. Companies Prepared for Looming Water Challenges?" by VOX Global and Pacific Institute concludes 60% of companies surveyed believe water is poised to affect business growth and profitability within five years. In addition, more than 80% say water will affect their decisions on where to locate facilities.

The acknowledgement among major U.S. corporations that water is becoming a major business issue is a significant finding. There is growing recognition that in addition to being a considerable societal problem, water also creates critical challenges for businesses specifically. Insufficient or contaminated water supply, or lack of infrastructure to reliably deliver that supply, can mean companies may not be able to maintain the volume and quality of their production.

In an attempt to gain insight on corporate perceptions of risks associated with water issues and plans to address these challenges, the Pacific Institute and VOC Global surveyed over 50 companies, the majority Fortune 500 and publicly traded, representing virtually every industry sector. In addition to an online survey, in-depth interviews were conducted with senior officials who have direct responsibility for water issues from companies including: AT&T, Cummins, Inc., The Hershey Company, MillerCoors, and Union Pacific Railroad. While survey respondents indicated that water challenges are worsening and will affect their business more significantly in years to come, most did not indicate any plans to expand their water risk mitigation measures in the future.

Key findings from survey respondents since 2008 include the following:

Respondents who …

2008

2013

Next 5 Years

% Change, 2008-2018

Face water challenges

N/A

79%

84%

5%

Discuss water-related issues at board level

28%

78%

89%

61%

Consider water when deciding where to locate

37%

63%

86%

49%

Believe water impacts growth

17%

17%

57%

40%

Believe water impacts profitability

14%

14%

57%

43%

 The report is available at http://pacinst.org/.

 


U.S. EPA Hits Pause On CERCLA Vapor Intrusion Regulations

Siros_Steven_COLOR

By: Steven M. Siros

 

U.S. EPA has voluntarily withdrawn its proposed Hazard Ranking System ("HRS") rule that would have allowed regulators to list a site on the National Priorities List ("NPL") solely on the basis of the risks posed by vapor intrusion. The withdrawal occurred after the proposed rule had been sitting at the Office of Management & Budget ("OMB") for over two years without OMB taking any action on the proposed rule. A 2010 report from the Government Accountability Office estimated that as many as 37 sites might be eligible for NPL listing solely on the basis of vapor intrusion risks (although the report did not identify these 37 sites). Industry, however, was opposed to the draft rule, noting that many sites with vapor intrusion risks are already listed on the NPL due to other factors and that NPL listings are a poor means to address vapor intrusion sites which often require immediate action and are relatively straightforward to remediate (as opposed to the years of study and assessments that are typical for NPL sites). Notwithstanding its decision to withdraw its pending rule from OMB review, U.S. EPA indicated that it remains committed to submitting the proposed rule for consideration by OMB at a later date.


EPA Proposes Regulations To Cut Carbon Emissions From Existing Power Plants

Torrence_Allison_COLORBy: Allison A. Torrence

 

On June 2, 2014, U.S. EPA released proposed regulations aimed at reducing greenhouse gas emissions from existing fossil fuel-fired power plants. The proposed regulations, promulgated pursuant to Section 111(d) of the Clean Air Act, contain two main parts: (1) establishment of state-specific carbon dioxide (CO2) emission performance goals for power plants and (2) requirements for states to develop and submit a state plan for reaching the CO2 emission performance goals.

In the proposed rules, EPA sets rate-based CO2 emission performance goals (expressed in pounds of CO2 per net megawatt hour) on a state-by state basis. The state-specific CO2 emission performance goals include an interim goal, to be met by each state in 2020-2029, and a final goal, to be met by each state by 2030. The 2030 goals are designed to cut CO2 emissions from the power sector by 30 percent nationwide below 2005 levels.

States must submit to EPA a state plan designed to meet the interim and final emission performance goals set by EPA. States must submit the plans to EPA by June 30, 2016 or seek an extension until June 30, 2017. States may work together in a multi-state approach under the regulations, in which case they will have until June 20, 2018 to submit their plan to EPA. A complete state plan must include the following twelve components:

  • Identification of affected entities
  • Description of plan approach and geographic scope
  • Identification of state emission performance level
  • Demonstration that plan is projected to achieve emission performance level
  • Identification of emissions standards
  • Demonstration that each emissions standard is quantifiable, non-duplicative, permanent, verifiable, and enforceable
  • Identification of monitoring, reporting, and recordkeeping requirements
  • Description of state reporting
  • Identification of milestones
  • Identification of backstop measures
  • Certification of hearing on state plan
  • Supporting material 

The state plans must address CO2 emissions from all affected power plants, which include most steam generating units, integrated gasification combined cycle (IGCC) units, and stationary combustion turbines that commenced construction on or before January 8, 2014. EPA has previously proposed regulations, on September 20, 2013, which would limit CO2 emissions from newly-constructed power plants. The comment period on those regulations closed on January 8, 2014, and final proposed regulations from EPA are still pending.

Public comments on EPA's proposal to regulate CO2 emissions from existing power plants will be accepted by EPA for at least 120 days after publication of the proposed rules in the Federal Register. EPA will also host public hearings during the week of July 28th in Denver, Atlanta, Washington, DC, and Pittsburg. After reviewing the public comments, EPA plans to finalize the regulations by June 2015.

Click here for more information about EPA's proposed CO2 regulations.

The text of the proposed regulations is available here.