On September 1, 2016, Jenner & Block is hosting a CLE program titled Overview of Critical Litigation Issues for Environmental Practitioners in our Chicago offices at Noon. The program will feature two of our environmental litigation partners as speakers, Steven Siros and Allison Torrence. Together, they will provide environmental litigation updates addressing new developments related to the Clean Power Plan, “waters of the United States,” emerging contaminants, and CERCLA cost recovery/contribution claims.
A recently issued PHMSA advisory bulletin seeks to clarify the regulatory requirements that apply to mothballed or idled unused gas or hazardous liquid pipelines. As required by the Pipeline Safety Bill that was signed into law on June 22, 2016, PHMSA recently issued an advisory bulletin providing guidance to owners and operators of gas or hazardous liquid pipelines regarding the requirements for idle and/or unused pipelines.
Although the bulletin recognizes that owners and operators often refer to pipelines that are not in operation but that might be used again in the future as “idled,” “inactive,” or “decommissioned,” the PHMSA regulations do not recognize “idle” or “inactive” status for hazardous liquid or gas pipelines. Instead, the regulations consider such pipelines to either be active and fully subject to all relevant parts of the safety regulations or abandoned. Assuming that these pipelines have not been abandoned in accordance with the requirements set forth at 49 CFR §§ 192.727 and 195.402, these pipelines must comply with all relevant safety requirements, including periodic maintenance, integrity management assessments, damage prevention programs, and public awareness programs.
The bulletin goes on to suggest, however, that in situations where the pipeline has been purged of all hazardous materials but not yet abandoned because of an expectation that the pipeline may later be used, the owner/operator may be able to defer certain of these safety requirements. Although PHMSA indicated that it intends to engage in a future rulemaking to provide further guidance as to which requirements might be deferred, in the interim the bulletin suggests that owners or operators planning to defer certain activities coordinate the deferral in advance with the regulators.
The guidance also reiterates that notwithstanding that companies might not have access to records relating to where historical pipelines might be located and/or if these pipelines were properly purged of combustibles, the owners and operators still have a responsibility to assure facilities for which they are responsible or last owned do not present a hazard to people, property, or the environment.
Please click here to see PHMSA's advisory bulletin.
EPA has announced a new waste and materials tracking feature in its Energy Start Portfolio Manager—a free benchmarking and tracking tool for commercial building owners and managers. The new waste tracking functionality allows the management of energy, water and waste via one secure online resource. This is another effort to promote and encourage sustainable materials management to conserve resources, remain economically competitive and support a healthy, sustainable environment.
EPA’s Energy Star Portfolio Manager provides a platform to improve energy performance, prioritize efficiency measures, and verify energy reductions in buildings. It currently measures energy, water and greenhouse gas metrics in more than 450,000 U.S. buildings, representing 40 percent of U.S. commercial space. The new resource unifies energy, water and waste under one virtual “roof” to streamline sustainability management programs allowing entities to better understand their environmental footprint and resource costs.
EPA is hosting two webinars to introduce the basics of the new waste tracking component in the Energy Start Portfolio Manager:
- Introducing Waste & Materials Tracking in Portfolio Manager—August 18 at 2:00 p.m. ET
- Introducing Waste & Materials Tracking in Portfolio Manager---September 15 at 1:00 p.m. ET
To learn more about sustainability initiatives in commercial buildings or to register for the upcoming webinars: https://www.energystar.gov/buildings/owners_and_managers/existing_buildings/use_portfolio_manager/track_waste_materials
Earlier this year New York Attorney General Eric Schneiderman spearheaded a coalition of attorneys general investigating whether ExxonMobil misled investors and the public about its knowledge of climate change. As previously reported in this blog (see ExxonMobil, 13 State Attorneys General Fight Back Against the Exxon Climate Probes and Climate Change Allegations Against Big Oil Continue), ExxonMobil has sued the Attorneys General for the U.S. Virgin Islands and Massachusetts pushing back on allegations and related subpoenas dating back at least 40 years into the corporate history and internal communications of the company related to climate change considerations. Two recent developments ensure the conflicts over these government led investigations against ExxonMobil are far from over:
- This week the Energy & Environment Legal Institute and the Free Market Environmental Clinic filed litigation in the Supreme Court of New York against New York Attorney General Eric Schneiderman over his refusal to produce climate change-related communications demanded by these groups in requests filed under the New York Freedom of Information Law (FOIL). The free-market litigation nonprofits requested all correspondence between AG Schneiderman and eight individuals that contained certain keywords including “energy,” “fossil,” “climate,” “RICO” and “fraud.” The individuals targeted were associated with environmental organizations as well as lawyers that had litigated against ExxonMobil in the past. The Attorney General’s Office denied the FOIL requests claiming the communications sought were exempt from disclosure because they were protected as attorney client, attorney work product or inter- or intra-agency memoranda. The nonprofits assert that the majority of the information sought is communications between AG Schneiderman and outside parties that would not fall under any legal protections for withholding information.
- Last month, led by Texas Representative Lamar Smith, the U.S. House Committee on Science, Space and Technology issued ten (10) subpoenas to the Attorneys General of New York and Massachusetts as well as a number of nongovernmental environmental advocacy groups seeking climate change-related communications among the attorneys general and the environmental groups that support them associated, at least in part, with the ongoing investigations against ExxonMobil. The attorneys general have refused to produce any documents saying the request encroaches onto their states’ sovereign power to pursue their fraud investigations. Both Attorneys General Schneiderman and Healey have pushed back on the issuance of these subpoenas noting they are “…are an unprecedented effort to target ongoing state law enforcement investigations or potential prosecutions…” and if allowed would “…eviscerate AG Healey’s ability to conduct an ordinary and lawful investigation.”
Many have expressed skepticism about the legal reasoning and logic of the fraud, securities and RICO investigations launched by the “Green 20” state attorneys general. Critics charge the state attorneys general are using governmental power to further political objectives and in the process violating ExxonMobil’s constitutional rights of free speech and freedom from unreasonable searches. It appears there is nothing “ordinary and lawful” in the context of this unusual investigation aimed at achieving climate change parity where more appropriate regulatory and legislative efforts have failed.
The State Water Resources Control Board has proposed a new maximum contaminant level (MCL) for 1,2,3-trichloropropane (TCP) of five parts per trillion (ppt).TCP is a manmade chemical found at industrial and hazardous waste sites. It has been used as a cleaning and degreasing solvent and also is associated with pesticide products.
California recognizes TCP as a carcinogen, and it has been found in numerous drinking water sources in the state. In August 2009, a public health goal (PHG) for TCP was developed by the Office of Environmental Health Hazard Assessment (OEHHA) for use by the State Water Board to establish an MCL. The PHG represents the level of TCP in drinking water that OEHHA believes does not pose a significant risk to health over a lifetime of exposure (70 years). The PHG for TCP is 0.0007 µg/L, or 0.7 ppt.
A drinking water standard, or MCL, establishes a limit on the allowable concentration of a contaminant in drinking water that is provided by a public water system. The State Water Resources Control Board is proposing 5 ppt as the MCL for TCP. Formal rulemaking is expected later this year, and if approved, the MCL would become effective July 1, 2017.
EPA published a technical fact sheet about TCP in 2014. More background information and guidance on the proposed MCL action for TCP also is available from the California State Water Resources Control Board.
TCP is yet another emerging chemical that has been the subject of ongoing federal and state regulatory review and discussion for several years. It also is a chemical being analyzed and assessed at the lower threshold level of ppt versus more traditional parts per billion (ppb). As is often the case, it appears that the State of California is initiating regulatory action addressing TCP concerns, and it is likely that other states will follow.
2016 Democratic Party Platform: Combat Climate Change, Build a Clean Energy Economy, and Secure Environmental Justice
Last week, we examined the key environmental issues raised in the 2016 Republican platform. Now that the political focus has shifted from Cleveland to Philadelphia, where Democrats are holding their convention, we will examine what the Democratic Party has to say about its environmental priorities in the 2016 Democratic Party Platform. One of the Democratic Party platform’s 13 main sections is entitled “Combat Climate Change, Build a Clean Energy Economy, and Secure Environmental Justice.” Environmental issues are also raised in the section titled “Confront Global Threats”, which discusses “Global Climate Leadership.”
In the platform’s preamble, the Democrats state that:
Democrats believe that climate change poses a real and urgent threat to our economy, our national security, and our children’s health and futures, and that Americans deserve the jobs and security that come from becoming the clean energy superpower of the 21st century.
Other key positions from the Democratic environmental platform include:
Rolled out in December 2015, U.S. EPA’s eDisclosure system has received mixed reviews. Although self-disclosures for “New Owners” or for criminal violations continue to be required to be submitted under the old system, most other self-disclosures must be submitted through U.S. EPA’s new eDisclosure portal. Self-disclosures made through this system are placed into one of two categories. Broadly, Category 1 disclosures are EPCRA violations that meet all of the Audit Policy or Small Business Compliance Policy conditions, while Category 2 disclosures are all other violations. For Category 1 violations, the eDisclosure system will automatically generate an “eNotice of Determination” which confirms that no penalty will be assessed conditioned on the accuracy and completeness of the eDisclosure (and assuming that the violation is corrected within the requisite 60- or 90-day time period). For Category 2 disclosures, the eDisclosure system will automatically generate an “Acknowledgement Letter” acknowledging receipt of the disclosure and notifying the entity that U.S. EPA will make a determination as to eligibility for penalty mitigation if and when it considers taking enforcement action. The self-disclosed violation must still be corrected within the requisite time frame. The new eDisclosure system did not modify any of the underlying eligibility requirements of U.S. EPA’s Audit Policy or Small Business Compliance Policy.
Although the regulated community has acknowledged that the eDisclosure system has streamlined self-disclosures, there has been some concern regarding U.S. EPA’s recent pronouncement that disclosures submitted under the new system would generally be released in response to FOIA requests, notwithstanding the potentially unresolved nature of the alleged violations. These released disclosures would then be made available on a publicly searchable FOIA website. Companies considering whether to self-report under the eDisclosure system must evaluate whether the benefits of civil penalty immunity or mitigation are outweighed by the risks of adverse publicity and/or potential citizen suit claims. System glitches such as website time-outs have also been reported and some have complained that there is inadequate space for narrative responses on the website portal. Time will tell whether the eDisclosure system accomplishes its objective of minimizing U.S. EPA resources while encouraging self-disclosure and the subsequent correction of reported violations.
On Monday, Republicans gathered in Cleveland to kick off the Republican National Convention and adopt the official 2016 platform of the Republican Party. One of the platform’s six main sections is titled “American Natural Resources: Agriculture, Energy, and the Environment.” Republicans summarize their environmental platform by stating:
“We firmly believe environmental problems are best solved by giving incentives for human ingenuity and the development of new technologies, not through top-down, command-and-control regulations that stifle economic growth and cost thousands of jobs.”
Key positions from the Republican environmental platform include:
The latest Security and Exchange Commission (SEC) disclosure effectiveness project outreach seeks input on sustainability metrics important to investor decisions. In the SEC’s 340-page Business and Financial Disclosure Required by Regulation S-K: Concept Release (Concept Release), the Commission seeks input from the public about which sustainability metrics are important to investor decisions and why companies often choose to provide sustainability information outside of their public filing. See 81 Fed. Reg. 23,916 (April 22, 2016).
Since the launch of the disclosure effectiveness project in 2013, the SEC has received numerous communications from socially responsible investor groups urging it to use the review of corporate risk disclosures to look at material environmental, social and governance (ESG) disclosures. One of the leading independent organizations that issues sustainability accounting standards, the Sustainability Accounting Standards Board (SASB), already issued extensive comments on July 1, 2016 regarding the SEC’s Concept Release.
The key comments provided to the SEC by SASB are as follows:
- Today’s reasonable investors use sustainability disclosures;
- While Regulation S-K already requires disclosure of material sustainability information, the resulting disclosures are insufficient;
- Line-item disclosure requirements are not appropriate for sustainability issues;
- To evaluate sustainability performance, an industry lens is needed;
- Effective sustainability disclosure requires a market standard; and
- The Commission should acknowledge SASB standards as an acceptable disclosure framework for use by companies preparing their SEC filings.
The Concept Release is one of several outreach efforts as part of the SEC’s disclosure effectiveness project. At the heart of the initiative is how to make increasingly lengthy, complicated financial reports more effective, understandable and user-friendly. The Concept Release reviews the Regulation S-K disclosure requirements seeking input on what should be kept, modified, eliminated, or added as well as if the current requirements provide the most efficient and effective means of disclosing this information.
As to ESG issues including sustainability considerations, the SASB comments provide a good historical overview and update on environmental disclosures and the growing trend to provide more detailed ESG and sustainability disclosures to investors and the public at large. In its comments, SASB advocates for the SEC to acknowledge its standards as an acceptable framework for companies to use in their mandatory filings to comply with Regulation S-K in a cost-effective and decision-useful manner. SASB's comments include a quote from former SEC Chair and SASB Board member Elisse Walter, noting “…Disclosure is the foundation of securities laws in the United States and many other nations, and transparency is the engine that propels our capital markets forward. But as the world continues to evolve—and its economies along with it—our disclosure requirements and reporting standards have not always kept pace.”
While the SASB framework would provide more transparency, along with much needed structure and guidance on these disclosures, it seems highly unlikely the SEC will embrace the SASB’s recommendation at this time.
The National Toxicology Program (“NTP”) recently announced that it intends to join the crowded playing field (pun intended) of state, federal, and international agencies that are evaluating the potential human health risks associated with synthetic turf fields. Synthetic turf fields have been the subject of ongoing assessment by U.S. EPA, the Agency for Toxic Substances and Disease Registry, the Consumer Product Safety Commission, California’s Office of Environmental Health Hazard Assessment, and the European Union’s chemicals agency. However, the NTP intends to focus specifically on the tire crumb rubber used in those turf fields and to conduct short-term in vivo and in vitro toxicology studies on the crumb rubber.
As more schools and other public facilities install synthetic turf fields, the potential health effects of the infill is an issue that is attracting increased attention. The NTP believes that its proposed study will help to fill what it views to be an important data gap. Although existing health study have not identified an elevated health risk from playing on artificial turf fields, these studies have generally focused on the potential health effects of exposure to lead other materials released from the artificial grass blades and/or exposure to possible emissions associated with the turf field in its entirety. NTP and U.S. EPA have noted that there are limited studies on the effects of exposure to the tire crumb materials specifically which will be the focus of the NTP study.
Please click here to go the NTP press release concerning its study.