Corporate Environmental Lawyer

U.S. EPA Releases Chemical Data Reporting Information

By Steven M. Siros

On February 11, 2013, U.S. EPA released 2012 Chemical Data Reporting ("CDR") information on more than 7,600 chemicals in commerce.  Under the CDR rule, which was promulgated under TSCA, companies are required to report manufacturing and import data if the site-specific production or import volume of the chemical exceeds 25,000 pounds.  According to U.S. EPA Administrator Lisa Jackson, "[t]he 2012 Chemical Data Reporting information will help EPA and others to better assess chemicals, evaluate potential exposures and use, and expand efforts to encourage the use of safer chemicals."  Administrator Jackson further noted that "[t]he CDR data also highlight the clear need for TSCA reform."   The 2012 CDR information is available at http://www.epa.gov/oppt/cdr/index.html.

D.C. Circuit Court Denies Rehearing En Banc In Cross-State Air Pollution Case

By Allison A. Torrence

On January 24, 2013, the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") denied a request for rehearing en banc of the decision to vacate the Cross-State Air Pollution Rule (the "Transport Rule"), in EME Homer City Generation, LP v. Environmental Protection Agency, et. al, Case No. 11-1302.

As previously discussed in this blog, the United States Environmental Protection Agency ("EPA") promulgated the Transport Rule to address air pollution (specifically sulfur dioxide ("SO₂") and nitrogen oxide ("NO_x")) that crosses state lines. EPA identified 28 States that had air pollution sources which negatively impacted air pollution levels in downwind States. EPA targeted coal and gas-fired power plants as the primary sources of air pollution which was traveling to downwind states and set standards for emission reductions at these power plants. In addition, EPA issued Federal Implementation Plans ("FIPs"), which specified how the emission reductions would be implemented.

In striking down the Transport Rule, the D.C. Circuit held that EPA exceeded its authority by (1) mandating specific air pollution reductions in upwind States that may require the upwind States to reduce emissions by more than their own contribution to a downwind State's air pollution problem and (2) not giving States the initial opportunity to design State Implementation Plans ("SIPs") as a means to achieve the standards set by EPA. In its petition for rehearing en banc, EPA claimed that the case dealt with issues of "exceptional importance" due to the enormous public health and regulatory significance of the Transport Rule. EPA argued that the three-judge panel that decided to vacate the Transport Rule acted inconsistent with D.C. Circuit precedent and in violation of the Clean Air Act.

With the D.C. Circuit's denial of EPA's petition for rehearing en banc, EPA will continue to administer its previous cross-state air pollution rule, the Clean Air Interstate Rule ("CAIR"). Although the D.C. Circuit has previously held that CAIR was also an improper rule, it did not vacate CAIR. Thus CAIR will remain in place while EPA considers whether to pursue further appeal to the United States Supreme Court or to begin working on new regulations to address cross-state air pollution.

Post-Sackett Challenge to U.S. EPA RCRA Order

By Steven M. Siros

The first of perhaps many post-Sackett challenges to RCRA orders was filed in the Central District of California in December.  On December 18, 2012, a chemical company (Soco West, Inc.) challenged U.S. EPA's issuance of a RCRA Section 7003 unilateral compliance order.  In its complaint, the chemical company argues that the unilateral order is a final agency action that is subject to review under the Administrative Procedures Act ("APA").  The company seeks to challenge the order on the basis that U.S. EPA's actions in issuing the order were arbitrary and capricious. 

Prior to the Supreme Court's decision in Sackett v. EPA, pre-enforcement challenges to unilateral orders were unsuccessful because courts determined that such orders did not constitute final agency action.  In Sackett, however, the Supreme Court found that compliance orders issued under the Clean Water Act ("CWA") constituted final agency action that was reviewable under the APA.  Like the CWA, RCRA does not contain an express prohibition on pre-enforcement review. 

Please click here to view a copy of the complaint filed by Soco West, Inc.  We will continue to provide updates on this case as it progresses.

D.C. Circuit Court Denies Request For Rehearing of Decision Upholding EPA GHG Emission Regulations

By Gabrielle Sigel

On December 20, 2012, the U.S. Court of Appeals for the D.C. Circuit voted to deny rehearing of a June 26, 2012 panel decision of that court, which had upheld a series of U.S. Environmental Protection Agency ("EPA") Clean Air Act regulations for control of greenhouse gas ("GHG") emissions from mobile and stationary sources. Coalition for Responsible Regulation v. EPA, No. 09-1322, U.S. Ct. App. D.C. Cir., on petition for rehearing en banc (12/20/2012). In a 6-2 decision, with two judges writing dissents, the D.C. Circuit court denied petitioners' request for rehearing. The statements of three D.C. Circuit judges supporting the panel's original decision and of the two judges who disagreed and voted to grant the rehearing provide a preview of the parties' arguments in opposition to and in favor of an appeal being heard by the U.S. Supreme Court, particularly with respect to EPA's permitting program for stationary sources.

In June 2012, a panel of the D.C. Circuit court had approved EPA's Clean Air Act ("CAA") GHG regulations. Coalition for Responsible Regulation v. EPA, No. 09-1322, U.S. Ct. App. D.C. Cir. (6/26/12). The case was before the court after several States, led by Virginia and Texas, and industry groups, including the U.S. Chamber of Commerce, had filed petitions with the appellate court in response to EPA's series of GHG regulations. Those regulations included EPA's finding that GHG emissions constitute a danger to public health and environment, regulation of emissions from mobile sources, and requiring permits for GHG emissions from stationary sources, limited to the largest sources of GHGs. The D.C. Circuit court panel of three judges upheld all of EPA's regulations in a unanimous per curiam decision. (Id.) (A more detailed explanation of the panel's decision can be found at the Corporate Environmental Lawyer blog entry, "Federal Appellate Court Gives U.S. EPA Greenhouse Gas Regulatory Victory," June 27, 2012.)

In response to the loss before the panel, several of the petitioners filed petitions with the D.C. Circuit court for rehearing en banc, i.e., for a review of the case by all eight of the judges sitting on the D.C. Circuit court. Two judges voted to grant the en banc petitions and, in their statements supporting their dissent, they focused on EPA's regulation of stationary sources. The contested EPA regulations subjected GHG stationary source emissions to permitting under the CAA's Prevention of Significant Deterioration ("PSD") program for emission sources located in attainment areas. "Attainment" under the CAA applies to facilities that operate in areas of the U.S. whose ambient air conditions meet National Ambient Air Quality Standards ("NAAQS") for six regulated air pollutants. Even though GHGs are not a NAAQS-regulated pollutant, EPA interpreted the CAA requirements such that the PSD program applied to GHG emissions. Specifically, EPA interpreted the CAA's statutory trigger for PSD permitting - emission of "any regulated pollutant" - to apply to GHGs, not just NAAQS-regulated pollutants. Because the PSD program is triggered by emission levels that are relatively very low for GHG emissions (albeit relatively high when applied to emissions of NAAQS pollutants), EPA issued its Tailoring Rule, which modifies the CAA's statutory triggers for sources of GHG emissions. Under the Tailoring Rule, PSD requirements initially only apply to sources emitting GHGs of at least 75,000 or 100,000 tons per year ("tpy"), rather than the statutory levels of 100/250 tpy that are applied to the NAAQS pollutants. EPA justified its Tailoring Rule on three grounds: (1) implementing the CAA's tpy triggers for GHGs would lead to "absurd results" not intended by Congress; (2) the administrative burden that would otherwise be imposed; and (3) the agency's authority to implement statutory requirements over time. Rather than addressing the substance of EPA's bases for the Tailoring Rule, the Circuit Court held that neither industry nor State petitioners had standing to address the Tailoring Rule. Basically, the D.C. Circuit panel found that petitioners failed to show that the Tailoring Rule caused "injury in fact" or that vacating the rule would redress the injury.

The dissenting judges took issue primarily with the substance of EPA's decision to apply the PSD program to GHG emissions. In her statement dissenting from the denial of rehearing, Judge Brown began by lamenting the Supreme Court's 2007 decision, Massachusetts v. EPA, 549 U.S. 497 (2007), in which the Court decided that the CAA's regulation of pollutants from automobiles included GHGs, if EPA determined that such emissions endangered public health. Specifically, she "engages Massachusetts's interpretive shortcomings in the hope that either Court or Congress will restore order to the CAA." (Brown dissent, slip op. 2.) Judge Brown also explored her view that, even after Massachusetts, EPA is not entitled to apply the PSD program to GHG emissions. She notes that EPA itself recognized and promoted the "absurdity" of applying the CAA as written to GHG emissions, and finds that EPA does not have the power to "preempt legislative prerogatives", which repeatedly failed to regulate GHGs. (Id., 13.) She pronounced that "[t]he real absurdity is that this unprecedented expansion of regulatory control, this epic overreach, may very well do more damage to the well being of Americans than GHGs could ever do." (Id.) Judge Brown also relied on Supreme Court precedent under the "major questions" doctrine, Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), to urge that administrative agencies should not receive deference "on questions of great significance more properly resolved by the legislature." (Id., 14.) Finally, Judge Brown took issue with the panel's decision on standing, finding that petitioners' standing in this case was no more speculative than the petitioners' standing that the Supreme Court recognized as sufficient in Massachusetts. Judge Brown concluded, "In denying rehearing en banc, this Court has read Massachusetts to its illogical ends and it is American industry that will have to pay. That this Court did so is unsurprising, but certainly not fated." (Id., 22-23.)

Judge Kavanaugh, in his dissent, noted that "[t]his case is plainly one of exceptional importance…[with] massive real-world consequences." (Kavanaugh dissent, slip op. 1.) He reviewed the CAA's language and found that the CAA's PSD language should more logically and appropriately be interpreted to mean that it applied only to NAAQS pollutants and not to GHGs. He noted that this more "straightforward" interpretation avoided the "absurdities" that lead to EPA's Tailoring Rule. (Id., 6, 17.) Judge Kavanaugh concluded by finding that EPA's regulation of GHGs under the PSD program put "the bedrock underpinning of our system of separation of powers…at stake." (Id., 18.) Because "EPA went well beyond what Congress authorized for the [PSD] statute", it is the court's duty to enforce the statutory boundaries and require EPA to read the CAA in a manner that avoids its application to GHGs from stationary sources. (Id., 21.)

In response to the dissents, three Circuit court judges (Sentelle, Tatel, and Rogers) issued a statement in support of the denial of the en banc petition. They rejected Judge Brown's view that Massachusetts did not envision the far-reaching consequences leading to control of GHG emissions from stationary sources. They also disagreed with Judge Kavanaugh's limit of the PSD program to NAAQS pollutants, stating that "the panel's interpretation of the statute is the only plausible one." (Order denying pet. for rehrg., slip op. 3.) They agreed, however, with Judge Kavanaugh that separation of powers is an important issue, but found that "Congress spoke clearly, EPA fulfilled its statutory responsibilities, and the panel, playing its limited role, gave effect to the statute's plain meaning." (Id., 4.)

All of the judges issuing opinions in response to the petitions for en banc rehearing were speaking to the Supreme Court, which will decide whether to grant the expected petition for permission to appeal to that Court. The petition for writ of certiorari before the Supreme Court must be filed within 90 days after entry of judgment in the Circuit court.

U.S. EPA Finalizes Boiler MACT Rule

By Steven M. Siros

On December 20, 2012, U.S. EPA finalized air emissions regulations for boilers and incinerators. The new rules, which revised regulations originally promulgated but put on hold in 2011, drew praise from environmental groups and criticism from industry and trade associations. The new rules affect major sources (boilers with the potential to emit ten tons per year of any single air toxic or 25 tons per year of a combination of air toxics), area sources (boilers with a potential to emit less than 10 tons per year of any single air toxic or 25 tons per year of a combination of air toxics), and solid waste incinerators. Major sources have until 2016 to comply with the new rules; area sources must be in compliance by 2014; and incinerators have until 2018 to comply with the new rules.

For major sources and incinerators, the new rules are projected to result in higher emission reductions for certain pollutants (sulfur dioxide) but lower emission reductions for others (volatile organic compounds). The new rules create numerous boiler subcategories in an effort U.S. EPA said was intended to better numerical limits or work practices to particular boiler types  In fact, according to U.S. EPA, only 14% of the largest boilers will be subject to specific numerical emission limits, with the remaining 86% only needing to follow work practice standards to minimize toxic air emissions.

The compliance costs associated with these new standards are projected to be in excess of $2 billion, but U.S. EPA predicts that there will be a resulting health benefit of between $13 and $29 for each dollar spent to comply with the new rules.

The final rules are available at http://www.epa.gov/airquality/combustion/actions.html.

Important Environmental Compliance Considerations In The Wake Of Hurricane Sandy

By Steven M. Siros and Allison A. Torrence

As Hurricane Sandy sweeps across the Eastern Seaboard, the images of its destructive power are humbling. As everyone begins to dig out from the damage caused by the storm, it is important to remember the environmental lessons learned from past storms and natural disasters. Inevitably, environmental issues will be a serious concern after Hurricane Sandy has run its course. As facilities move forward with the task of attempting to resume normal operations, there are a number of environmental issues that should be considered.

Releases of Hazardous Substances and Oil Spills

U.S. EPA requires releases of hazardous substances at or above specified "Superfund Reportable Quantities" ("RQs") to be reported to federal authorities. Releases of certain extremely hazardous substances above a RQ trigger reporting requirements to state and local authorities, as well as to the federal authorities. Additionally, some state and local governments require notification for any size release of hazardous substances. According to U.S. EPA, reporting is required even if the release occurred only as a result of a hurricane or other natural event.

After notification, cleanup of the hazardous substances will likely be required. Although an "Act of God" may be a defense to certain cleanup liability under CERCLA, U.S. EPA has taken an aggressive position in the past, arguing that past hurricanes did not trigger this defense.

Oil spills are also a significant concern when there is heavy rain and flooding. Facilities with Spill Prevention, Control and Countermeasure ("SPCC") Plans will need to ensure that secondary containment for aboveground storage tanks is maintained after the storm. Any oil spill that creates a visible sheen on navigable waters or adjoining shorelines must be reported to the federal government. There is no "Act of God" defense under the federal oil spill laws.

Here are some helpful links to U.S. EPA's websites that provide further guidance on hazardous substances and oil spill reporting:

http://www.epa.gov/oem/content/reporting/index.htm (Information On How To Report Releases of Hazardous Substances or Petroleum Products)

http://www.epa.gov/oem/content/epcra/serc_contacts.htm (List of State Emergency Response Contacts)

http://www.epa.gov/region4/r4_hurricanereleases.html (Information on Emergency Operating Procedures)

Wastewater Discharges

Wastewater treatment systems can overflow during and after significant rain events, such as a hurricane. These types of overflows can violate the operator's license and other regulatory requirements unless proper care is taken during and after the rain event. Operators must provide immediate notification (typically to the State regulators) of overflows caused by the severe rain event in order to preserve available defenses the operator may have for the overflow.

Stormwater Management

Many facilities are covered by a site-specific or regional stormwater management permit, requiring structural Best Management Practices ("BMPs") to prevent excess stormwater runoff. Failure of BMPs, such as silt fencing and retention basins, can cause violations and result in penalties. Following significant storms such as Hurricane Sandy, it is important that structural BMPs be inspected to ensure that they continue to function as intended.

Air Emissions

Most air permits provide exceptions for "malfunctions" that may be caused by storms or other uncontrollable events. Any excess emissions caused by such a malfunction should be carefully documented to support the malfunction defense. Additionally, many facilities have air permits that regulate the use of emergency generators, usually by providing limits on the total hours the emergency generators can be in operation. Therefore, care should be taken to record the total time any emergency or backup generators are used to ensure that any applicable regulatory limits are not exceeded.

Insurance Claims

Hurricane Sandy has left behind significant property damage and business interuptions, which may be covered under an owner's insurance policy. Insurance coverage will depend on the terms of each insurance policy, and the specific circumstances leading to the loss. When potential property damage or business interuption is identified, the owner should provide prompt notice to its insurer and document the loss to the extent possible.

For more information about potential environmental impacts from Hurricane Sandy, visit U.S. EPA's hurricane webpage: http://www.epa.gov/hurricanes/

For information concerning U.S EPA's response to the damage caused by Hurricane Katrina, visit U.S. EPA Region 4's webpage: http://www.epa.gov/region4/Katrina/

EPA Faces Suits Over State Haze Plans As It Awaits Decision On Petition For Rehearing On Cross-State Air Pollution Ruling

By Allison A. Torrence

As discussed previously in this blog, the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") vacated the Cross-State Air Pollution Rule (the "Transport Rule") on August 21, 2012, in EME Homer City Generation, LP v. Environmental Protection Agency, et. al, Case No. 11-1302. The United States Environmental Protection Agency ("EPA") has petitioned for rehearing en banc in the D.C. Circuit. EPA claims in its petition that the case deals with issues of "exceptional importance" due to the enormous public health and regulatory significance of the Transport Rule. EPA argues that the three-judge panel that decided to vacate the Transport Rule acted inconsistent with D.C. Circuit precedent and in violation of the Clean Air Act. Notably, one of the three judges on the panel, Judge Rogers, dissented from the majority opinion. The D.C. Circuit has ordered the parties opposing the Transport Rule to respond to EPA's petition by October 29, 2012, after which it will decide whether to grant EPA's petition and hear the case in front of all eight judges in the D.C. Circuit.

Despite the ongoing litigation regarding the validity of the Transport Rule, environmental groups, including the Sierra Club, have recently filed a number of lawsuits challenging various States' haze reduction plans based on the fact that the haze reduction plans improperly rely on the Transport Rule. Under the Clean Air Act, States are required to develop State Implementation Plans ("SIPs") that address emissions that contribute to regional haze. As a part of their SIPs, States must require Best Available Retrofit Technology ("BART") for certain types of sources that emit pollutants that impair visibility. Earlier this year, EPA issued a final action allowing States participating in the Transport Rule emissions trading programs to use those programs in place of source-specific BART for sulfur dioxide and/or nitrogen oxide emissions from power plants that are subject to the regional haze rule. Sierra Club and other environmental organizations oppose the use of emissions trading programs to meet the haze rules, and have filed petitions for review in numerous Circuit Courts seeking a determination that EPA's policy is invalid because the D.C. Circuit found the Transport Rule to be legally defective.

The Sierra Club has acknowledged that its petitions in the various Circuit Courts are "protective Petition[s] for Review" because Sierra Club believes that the D.C. Circuit is the appropriate forum to decide the propriety of EPA's actions in these cases. Thus, Sierra Club has a petition for review pending in the D.C. Circuit, Utility Air Regulatory Group v. EPA, Case No. 12-1342. The D.C. Circuit case has been held in abeyance until that court issues a determination on EPA's petition for rehearing en banc.

Alaskan Village Seeks Rehearing of Climate Change Suit in 9th Circuit

By Keri L. Holleb Hotaling

On October 4, 2012, the Alaskan Village of Kivalina filed a petition for rehearing en banc in the Ninth Circuit. Petitioners urge the Ninth Circuit to reconsider its September 21, 2012 decision to uphold dismissal of a federal common law public nuisance claim against twenty-two energy companies over their greenhouse gas emissions, which Kivalina claimed left the Village uninhabitable by eroding sea ice that protected the Village from fall and winter storms. Kivalina had sought damages of roughly $400 million. In its petition for rehearing, Kivalina argues that the recent Ninth Circuit decision directly conflicts with Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008). Kivalina maintains that in Exxon Shipping, the Supreme Court held that the Clean Water Act, like the Clean Air Act at issue in this case, displaces federal common law claims for injunctive relief, but not for damages. The petition states "[t]he direct conflict here between the majority opinion and Exxon Shipping practically jumps off the page." Kivalina contends the Ninth Circuit's panel's decision was in error because Exxon Shipping "suggests a different result" from the one reached by the majority.

Sequestration To Cut $716 Million From U.S. EPA Budget

By Steven M. Siros

If budget sequestration takes effect on January 2, 2013, U.S. EPA will face a $716 million budget cut.  According to a September 14, 2012 report from the White House Office of Management and Budget ("OMB"), U.S. EPA's budget would be reduced from approximately $8.4 billion to $7.7 billion. The OMB report projects that the Superfund program would face cuts of approximately $122 million; state and tribal assistance grants would be cut by approximately $293 million; and U.S. EPA's program account would be cut by approximately $220 million. The OMB report goes on to acknowledge that these cuts would degrade U.S. EPA's "ability to protect the water we drink and the air we breathe" and encourages Congress to act to prevent these cuts from being triggered. According to an U.S. EPA official, U.S. EPA is developing its 2014 fiscal year budget without accounting for these significant budget cuts. To see a copy of the OMB report, please click here.  

September 11th CBA and ISBA Environmental Networking Reception

By Allison A. Torrence

The Chicago Bar Association (CBA) Environmental Law Committee, the CBA Young Lawyers Section Environmental Law Committee, and the Illinois State Bar Association (ISBA) Environmental Law Section are hosting an Environmental Networking Reception on September 11, 2012, from 4 pm to 6 pm. The networking reception will be held at the Chicago Bar Association, 321 South Plymouth Court, Chicago, Illinois.

Jenner & Block attorney and co-chair of the CBA Young Lawyers Section Environmental Law Committee, Allison A. Torrence, will make brief remarks at the reception along with other representatives from the CBA and ISBA.

If you would like to attend, please RSVP by September 7, 2012, to Dave Scriven-Young at dscriven-young@pecklaw.com.