In a surprising move, on Wednesday May 10th, the U.S. Senate voted 51 to 49 to reject a resolution under the Congressional Review Act (CRA) to repeal a 2016 Bureau of Land Management (BLM) rule aimed at reducing methane releases from oil and gas wells on public land. The rule at issue was published by BLM in the Federal Register on November 18, 2016 (81 FR 83008), and amends 43 CFR Parts 3100, 3160 and 3170 (the Methane Rule).
BLM has stated that the goal of the Methane Rule is to bring the 30-year-old oil and gas production rules in line with technological advances in the industry. The Methane Rule provides numerous rules and restrictions on oil and gas production operations on public and Indian lands, including:
On Thursday, May 11th, from 12-1 pm, Jenner & Block will host a CLE presentation on Environmental Risk: Best Practices in Spotting, Evaluating, Quantifying and Reporting Risk. Business risk associated with environmental issues is an important topic that is often not fully understood by in-house counsel or outside attorneys and consultants. Effectively spotting, evaluating and managing environmental risk plays an important role in the success of a business and should be understood by all environmental attorneys and consultants advising businesses. This program will help you improve your ability to spot, evaluate, quantify and report on risk to provide value for your clients and their businesses.
Jenner & Block is pleased to be joined by members of the CBA Environmental Law Committee and the Air & Waste Management Association.
The presentation will be moderated by Christina Landgraf, Counsel, Environmental, Health & Safety, United Airlines, Inc. and Jenner Partner Allison Torrence. The panel of speakers will include Jenner Partner Lynn Grayson, Kristen Gale, Associate, Nijman Franzetti and Jim Powell, Director, Environmental Permitting, Mostardi Platt.
The CLE presentation will be held at Jenner & Block, 353 N. Clark St., Chicago, IL – 45th Floor, from 12-1 pm. Lunch will be provided starting at 11:45 am. If you are unable to attend in person, you can participate via webinar.
You can RSVP here.
Any questions can be directed to Pravesh Goyal: (312) 923-2643 or email@example.com
As has been the case for the past several years, we are pleased to present a special blog posting commemorating Earth Day. This year, Earth Day is Saturday, April 22, 2017 and the Earth Day campaign is "Environmental and Climate Literacy". This campaign is focused on working to ensure that the general public is educated and literate with respect to environmental issues. For more information regarding this campaign, please click here.
The very first Earth Day, which was held in America in 1970 following a devastating oil spill, is credited as the beginning of the modern environmental movement. Now, more than forty years later, Earth Day is a global event with festivals, rallies and other events will be taking place at various locations throughout the world.
In special commemoration of Earth Day 2017, we have linked to the following two "TED" talks which we hope that you will find interesting. The first "TED" talk (click here) focuses on the Great Lakes, which represent one of the largest collections of fresh water in the world. The second "TED" talk is done by renowned architect Jeanne Gang and focuses on blending nature into architectural projects (click here). Happy Earth Day 2017.
By and large, Americans are blessed with clean, safe, plentiful and mostly free drinking water sources. The Flint, Michigan contaminated drinking water scandal was a wakeup call for many that drinking water sources we depend upon may not be as reliable, stable, or even as affordable as we think.
On December 19, 2016, Reuters released a startling report about the quality of America’s drinking water. Reuters' investigation found that at least 3,000 water supplies in the U.S. were contaminated with lead at levels at least double the rates detected in Flint’s drinking water. In addition, 1,100 of these communities had rates of elevated lead in blood tests at least four times higher. Reuters concluded that Flint’s water crisis doesn’t even rank among the most dangerous lead hotspots in the U.S. Like Flint, however, many of the other localities are plagued by legacy lead: crumbling paint, plumbing, or industrial wastes left behind. Unlike Flint, many have received little attention or funding to combat poisoning.
Another critical issue looming on the horizon for many will be the affordability of water. A new Michigan State University (MSU) report recently concluded that a variety of compounding factors in the U.S. could easily push large portions of the population out of the financial range to even afford water in the future. The MSU report concludes:
A variety of pressures ranging from climate change, to sanitation and water quality, to infrastructure upgrades, are placing increasing strain on water prices. Estimates of the costs to replace aging infrastructure in the U.S. alone project over $1 trillion dollars are needed in the next 25 years to replace systems built circa World War II, which could triple the cost of household water bills…. Over the next few decades, water prices are anticipated to increase four times current levels. Prices could go higher if cities look to private providers for water services, who have a tendency to charge higher rates than public providers.
The MSU report concludes that 36% of households will be unable to afford water within five years. The highest risk areas in the U.S. are in the South, with the most at-risk communities in Mississippi. The MSU report noted that Ohio is 9th on the list, followed by Michigan at 12th.
Water risks come in many forms and include not only sufficient quantities and acceptable quality, but also affordability. The latter issue has not been addressed in a meaningful manner in the U.S. and will become a growing concern as water risks of all kinds increase in number and scope.
Today is World Water Day as proclaimed by the United Nations (UN) General Assembly in 1993. World Water Day is about taking action to tackle the global water crisis. Today, 1.8 billion people rely upon a drinking water source that is contaminated putting them at risk for cholera, dysentery, typhoid and polio. The UN Sustainability Development Goals launched in 2015 include a target to ensure everyone has access to safe water by 2030.
The World Economic Forum also has targeted water and water risks as one of the leading global risk factors as recently confirmed in its The Global Risks Report 2017. The Global Risks Report 2017 features perspectives from nearly 750 experts on the perceived impact and likelihood of 30 prevalent global risks as well as 13 underlying trends that could amplify them or alter the interconnections between them over a 10-year timeframe. The report notes that a cluster of environment-related risks—notably extreme weather events and failure of climate change mitigation and adaptation as well as water crisis—has emerged as a consistently central feature of the Global Risks Perception Survey risk landscape.
In 2017, water crises were identified as the third most significant risk based upon potential impacts. In doing so, the experts concluded that there had been “…a significant decline in the available quality and quantity of fresh water, resulting in harmful effects on human health and/or economic activity….”
World Water Day provides a good opportunity to reflect upon how we use water at home and work and in our businesses. It is becoming an increasingly precious natural resource that must be protected and conserved.
Great Lakes Compact Council Holds Hearing on Cities Initiative Challenge to Waukesha Diversion of Lake Michigan Water
As previously reported here, the Great Lakes and St. Lawrence Cities Initiative (the Cities Initiative) requested a hearing before the Great Lakes-St. Lawrence River Basin Water Resources Council (the Compact Council) regarding the Compact Council’s June 21, 2016 decision to approve the City of Waukesha’s application for a diversion of Great Lakes Basin Water. The Waukesha diversion is the first-ever diversion of Great Lakes water approved under the 2008 Great Lakes-St. Lawrence River Basin Water Resources Compact (the Compact). Under the approved diversion, the City of Waukesha can divert up to 8.2 million gallons per day (annual average demand) from Lake Michigan.
On March 20, 2017, after extensive briefing by the Cities Initiative and the City of Waukesha, the Compact Council held a hearing and allowed oral argument by the parties. The Cities Initiative is a binational coalition of 127 U.S. and Canadian mayors and local officials, representing over 17 million people, working to advance the protection and restoration of the Great Lakes and St. Lawrence River. The Cities Initiative argued that the Compact Council should reconsider its decision to grant the diversion and clarify the standards used to evaluate the Waukesha diversion application as well as the standards it will use to evaluate diversion requests in the future. The City of Waukesha argued that the Compact Council acted reasonably to approve the diversion.
The Compact Council took the matter under advisement at the close of arguments and indicated it likely will issue a written decision in early May.
Jenner & Block is representing the Cities Initiative in this matter, and Jenner Partner Jill Hutchison argued on behalf of the Cities Initiative at the hearing.
The Carbon Disclosure Project’s (CDP’s) Global Water Report 2016 titled Thirsty Business: Why Water is Vital to Climate Action analyzes water disclosures made through the CDP’s 2016 information request. It was aimed at companies facing water risks and opportunities and investors seeking to better understand how water issues might impact portfolios. The report provides insight into the connection between water, energy and private sector efforts to reduce carbon emissions.
Key findings from these corporate water disclosures include:
- Water related risks cost business $14 billion dollars in 2016—a fivefold increase over prior year’s costs (These financial impacts come from drought, flooding, tightening environmental regulation and the cost of cleaning up water pollution and fines)
- 24% of greenhouse gas reductions depend on a stable supply of good quality water
- 53% of companies report better water management in the context of delivering greenhouse gas reductions
The CDP report evaluates corporate performance over five key metrics relating to water management, including tracking water use, reporting and target-setting. In 2016, 61% of companies reported that they track their water use , an increase of 3% over last year.
Ford and Colgate Palmolive are among the best companies in the world when it comes to water management, according to the CDP’s Water A List. The annual index highlights companies implementing best practices in sustainable water management. In 2016, 24 companies made the CDP Water A List, up from eight last year. Ford and Colgate Palmolive are the only two U.S. companies identified on the A List in 2016.
So what can companies do to better manage and reduce their water-related risk? The first step is assessing water use and setting measurable targets. But unlike corporate carbon emissions, there really is no standard methodology that business relies upon to measure and monitor water use. CDP has partnered with the UN CEO Water Mandate, The Nature Conservancy, World Resources Institute and WWF to develop a methodology that will help companies set context-based water targets — essentially a science-based targets approach to water management. In light of company disclosures confirming that 54% of the 4,416 water risks identified will materialize over the next six years, there should be no shortage of corporate interest in test-driving the upcoming water methodology.
On Wednesday, March 22, 2017, from 3-5:30 p.m., Jenner & Block partner Allison A. Torrence will moderate a seminar presented by the Chicago Bar Association (CBA) Environmental Law Committee, addressing the current landscape of local, state and federal environmental law. Ms. Torrence is the current chair of the CBA Environmental Law Committee. Details about the seminar, and a link to register, are below.
Navigating the Current Landscape of Local, State and Federal Environmental Law
Date: March 22, 2017
Time: 3:00-5:30 p.m.
Location: The Chicago Bar Association, 321 S. Plymouth Ct., Chicago, IL
2.5 IL MCLE Credit
Local, state and federal governments all have an important role to play in enacting and enforcing environmental laws. While governments may have differing and changing priorities, environmental regulation and enforcement remain important components of all levels of government. This program will educate participants on some key issues facing business, citizens and communities under local, state and federal environmental law.
Topics and speakers:
HOT TOPICS AND CURRENT ISSUES IN ENVIRONMENTAL LAW FROM THE LOCAL GOVERNMENT PERSPECTIVE
Mort Ames, City of Chicago Department of Law
CURRENT STATE OF ILLINOIS STATE ENVIRONMENTAL LAW
James Morgan, Division of Legal Counsel, Air Enforcement Illinois
EPA THE NUTS AND BOLTS OF U.S. EPA ENFORCEMENT: A VIEW FROM REGION 5
Leverett Nelson, Regional Counsel, U.S. Environmental Protection Agency, Region 5
Allison A. Torrence, Jenner & Block LLP; Chair, CBA Environmental Law Committee
Kristen Laughridge Gale, Nijman Franzetti, LLP; Vice-Chair, CBA Environmental Law Committee
World Water Day, held on March 22 every year, is about taking action to tackle the water crisis. Today, there are over 663 million people living without a safe water supply close to home, spending countless hours queuing or trekking to distant sources, and coping with the health impacts of using contaminated water.
In recognition of World Water Day 2017, the Corporate Environmental Lawyer blog plans to run a weeklong series focused on the critical issues concerning water quality and quantity in the U.S. and globally. This year’s theme for World Water Day is wastewater.
Globally, the vast majority of all the wastewater from our homes, cities, industry and agriculture flows back to nature without being treated or reused—polluting the environment and losing valuable nutrients and other recoverable materials.
Instead of wasting wastewater, we need to reduce and reuse it. In our homes, we can reuse greywater on our gardens and plots. In our cities, we can treat and reuse wastewater for green spaces. In industry and agriculture, we can treat and recycle discharge for things like cooling systems and irrigation.
By exploiting this valuable resource, we will make the water cycle work better for every living thing. And we will help achieve the United Nation's Sustainable Development Goal 6 target to halve the proportion of untreated wastewater and increase water recycling and safe reuse.
Learn more about the importance of how we manage wastewater by viewing this fact sheet.
On March 15, 2017, President Trump released his FY 2018 budget blueprint titled “America First—A Budget Blueprint to Make American Great Again.” In addition to increasing defense spending by $54 billion, the blueprint proposes a $2.7 billion budget reduction for U.S. EPA. Highlights of U.S. EPA's proposed $5.7 billion budget include:
Most state workers’ compensation regulations provide an intentional tort exception for employers' workers’ compensation immunity. A Louisiana district court recently rejected a plaintiffs’ effort to trigger this intentional tort exception to workers’ compensation immunity by citing an OSHA “willful” violation as proof that their employer consciously desired that plaintiffs’ suffer their alleged injuries. In the case at issue, plaintiffs were overcome by fumes when they were ordered to clean a tank rail car that contained hazardous chemicals. Their employer was cited for OSHA violations and several of those violations fell into the “willful” category. The court found that these allegations insufficient to meet Louisiana’s “extremely high” standard necessary to avoid the workers’ compensation bar. Hernandez v. Dedicated TCS, LLC (E.D. La. 3/3/17).
Last year, several courts in Washington and Kentucky had similarly ruled that state workers’ compensation laws provided the exclusive remedy for employees injured in the course of their employment notwithstanding OSHA willful violations. But a U.S. District Court in Idaho recently ruled that employees could pursue tort claims after they were ordered to retrieve radioactive plates without proper protection gear in violation of applicable OSHA regulations.
Jenner & Block Partners Gay Sigel, Steve Siros, and Allison Torrence will speak at the upcoming program Environmental, Health, and Safety Issues in 2017: What to Expect From the Trump Administration, hosted by Jenner & Block’s Environmental, Workplace Health & Safety Practice Group on Tuesday, March 7 from 12:00 pm to 1:00 p.m. With the Trump Administration beginning to take shape, federal environmental, health, and safety (EHS) policy is certain to shift to the right. This CLE program will provide an overview of the Trump Administration’s actions impacting EHS matters to date and prognosticate on changes that may be forthcoming. You are invited to join us for this special program in person or via webinar. If you plan to participate, please RSVP as indicated below.
When: Tuesday, March 7, 12:00—1:00 p.m. with lunch starting at 11:45 a.m.
Where: Jenner & Block, 353 North Clark, Chicago, IL—45th Floor Conference Center
For more information about the program and to RSVP, please connect here.
Last week, President Trump repealed the stream protection rule designed to halt water pollution caused by mountain top removal mining. Using the Congressional Review Act authority, he stopped implementation of a rule that would have restricted the placement of mining waste in streams and drinking water sources, as well as the amount of waste generated overall by mining operations.
Arguably, a law exists that prohibits mining-related discharges to waterways. The 1977 Surface Mining Control and Reclamation Act says that mining companies should not cause "material damage to the environment to the extent that it is technologically and economically feasible." The new stream protection rule was needed since many believed the Act’s existing language was vague and did not provide sufficient protections. Moreover, critics charged that the agency responsible for enforcing this law, the Office of Surface Mining Reclamation and Enforcement (OSMRE), had not clarified the scope and interpretation of the law since publishing the “stream buffer zone rule” in 1983.
The repeal means that the OSMRE will return to reliance upon the 1983 version of the stream protection rule which prevents mining activities within 100’ of a stream. Environmental groups and others claim that the existing rule is not protective of streams from mining-related discharges.
What is particularly notable about President Trump’s repeal of this rule is the fact it is only the third time that the Congressional Review Act (CRA) has been used to claw back a former president’s regulation. The CRA basically says the House and Senate can kill any recently finalized regulation with simple majority votes in both chambers, so long as the president agrees. What is interpreted to mean recently finalized can be challenging , but Congress can basically vote to overturn any Obama-era regulation that was finished on or about June 2016. It appears that this timing impacts at least 50 new regulations.
Friday afternoon, Scott Pruitt was confirmed by the Senate to serve as the Administrator of the U.S. Environmental Protection Agency. 52 Senators voted for Mr. Pruitt’s confirmation, while 46 Senators voted against him. The vote was largely along party lines, with Democratic Senators Heidi Heitkamp of North Dakota and Joe Manchin of West Virginia voting for Pruitt and Republican Susan Collins of Maine voting against him.
As we previously reported here, Mr. Pruitt has been the Attorney General of Oklahoma since his election to that post in 2011. As Oklahoma Attorney General, Mr. Pruitt has sued EPA numerous times to challenge EPA regulations, including current litigation over the Obama Administration’s Clean Power Plan. Oklahoma is part of the coalition of 28 states challenging EPA’s regulation of greenhouse gas emissions from existing power plants – a key component of the Clean Power Plan – in the case of West Virginia v. EPA, Case No. 15-1363. This case is currently pending in the U.S. Court of Appeals for the D.C. Circuit.
In a February 11, 2017 letter to U.S. EPA, New York Governor Andrew Cuomo indicated that if U.S. EPA didn’t move promptly to establish a federal maximum contaminant level (MCL) for 1,4-dioxane, New York would be forced to set its own MCL for drinking water in the state. Governor Cuomo pointed to a perceived regulatory gap, noting that New York has expended tremendous resources to address unregulated emerging contaminants such as 1,4-dioxane, PFOA and PFOS. The Governor also noted that water systems serving fewer than 10,000 people are not required to test for unregulated contaminants such as 1,4-dioxane but that New York was moving forward with a plan to require all public water systems on Long Island to test for these unregulated contaminants regardless of size. 1,4-dioxane is alleged to have been found in 40 percent of the public water supplies in Suffolk County.
1,4-dioxane is one of several emerging contaminants that does not currently have an MCL. 1,4-dioxane is a stabilizer that is commonly associated with the chlorinated solvent trichloroethane (TCA). However, it is also commonly found in shampoos, cosmetics, and other personal care products. In the absence of federal regulation, 1,4-dioxane regulatory levels vary from state to state. For example, Michigan recently lowered its 1,4-dioxane regulatory limit from 85 parts per billion (ppb) to 7.2 ppb. Other states have lower limits still, with Massachusetts having set a regulatory limit for 1,4-dioxane of 0.3 ppb.
This patchwork of standards illustrates the challenges that the regulated community faces in the absence of federal action to set an acceptable MCL for 1,4-dioxane and other emerging contaminants. It remains to be seen if the Trump administration will follow through with its expressed intent of relying to the states to implement and enforce environmental rules and regulations or if the administration will recognize the benefits to the regulated community of consistency, at least with respect to drinking water standards.
Jenner & Block partner Allison Torrence will be speaking at the Chicago Bar Association (CBA) Environmental Law Committee meeting on Tuesday, February 7, 2017. Allison, who is Chair of the CBA Environmental Law Committee, will be speaking about the new RCRA Hazardous Waste Generator Improvements Rule. The presentation will provide an overview of current hazardous waste generator requirements and insights into significant changes made by the new rule.
DATE: Tuesday, February 7, 2017, 12:15 p.m. to 1:30 p.m.
LOCATION: CBA Headquarters, 321 South Plymouth Court, Chicago, Illinois
TOPIC: RCRA Hazardous Waste Generator Improvements Rule
SPEAKER: Allison A. Torrence, Jenner & Block
The meeting will be webcast and Illinois MCLE credit will be provided for CBA members. For more information, please go to the CBA website.
As we begin the New Year, we wanted to take a moment to look back at some of the major EHS developments in 2016 and think about what we can expect in 2017.
2016 was a busy year for the Corporate Environmental Lawyer blog, which is now in its sixth year with over 760 posts. In 2016, we had nearly 100 blog posts from 10 different authors and over 6,700 visits to the site.
Our five most popular blogs from 2016 were:
Navigating Hawkes, the Newest Wetlands Ruling from the Supreme Court, by Matt Ampleman
As always, we are monitoring a variety of issues that are important to you and your business, including, for example, RCRA regulatory changes, the future of climate change regulation, implementation of the TSCA Reform Act, and new developments in environmental litigation. You can find current information about these developments and more on the Corporate Environmental Lawyer blog. If you don’t find what you are looking for on our blog, we welcome your suggestions on topics that we should be covering. In addition, keep abreast of new developments in the EHS area through our Twitter @JennerBlockEHS.
We also look forward to the opportunity to share our thoughts and insights with respect to current EHS issues with you at an upcoming program:
- March 7, 2017, 12:00 pm CT: Environmental, Health, and Safety Issues in 2017—What to Expect From the Trump Administration, by Gabrielle Sigel, Steven M. Siros and Allison A. Torrence
The program will take place at Jenner & Block’s Chicago office and also will be available as a webinar. We will post a formal invitation to the program in a few weeks.
We also invite you to visit our newly redesigned Environmental and Workplace Health & Safety Law Practice website for more information about our practice. We look forward to another exciting year and to connecting with you soon.
Last Friday, White House Chief of Staff Reince Priebus issued a memorandum directing all agencies, including EPA, to freeze new or pending regulations. The freeze effects regulations at a variety of stages of finality. Under the Administration’s direction, the following actions are being taken by EPA and other agencies:
- Regulations that have been finalized but not yet been sent for publication in the Federal Register will not be sent until reviewed by someone selected by the President.
- Regulations that have been sent to the Federal Register but not published will be withdrawn.
- Regulations that have been published in the Federal Register but have not reached their effective date will be delayed for at least 60 days for review (until March 21, 2017).
Following through on this direction, EPA released a notice that will be published in the Federal Register on January 26, 2017, delaying implementation of all published rules that have yet to take effect until at least March 21, 2017. The delayed rules include EPA’s Risk Management Program (RMP) facility safety rule, the 2017 Renewable Fuel Standard (RFS) targets, and the addition of vapor intrusion to Superfund NPL site scoring.
On Friday, January 13, 2017, notwithstanding its previous promises to take full responsibility for the Gold King Mine environmental spill, U.S. EPA, with guidance from the United States Department of Justice, concluded that it was not legally liable to pay compensation for administrative claims for the Gold King Mine disaster under the Federal Tort Claims Act. According to U.S. EPA, the Federal Tort Claims Act does not authorize damages for discretionary acts by federal agencies (i.e., actions which require the exercise of judgment on the part of the agency). Because U.S. EPA was conducting a site investigation of the gold mine pursuant to CERCLA, the agency’s actions are considered a discretionary function under the law (at least according to U.S. EPA).
Not surprisingly, this action by U.S. EPA was blasted by New Mexico lawmakers and the Navajo nation with lawmakers vowing to continue to press for legislation that would hold U.S. EPA fully accountable for the spill. Moreover, U.S. EPA’s conclusion that it has no responsibility for administrative claims is likely to be challenged as aggrieved parties have six months from the date of denial to challenge U.S. EPA’s decision.
Please click here to see U.S. EPA’s public statement concerning its liability conclusion with respect to the Gold King Mine spill.
There is a new development in the continuing conflict between Florida and Georgia over the water-sharing arrangements involving the Chattahoochee, Flint, and Apalachicola Rivers. A U.S. Supreme Court-appointed special master has ordered the parties to participate in settlement discussions following a lengthy trial at the end of last year. Special Master Ralph Lancaster directed the states to meet for mediation by January 24 and to submit a memorandum to him by January 26 on the progress of settlement discussions.
Florida’s latest lawsuit filed in 2013 accused Georgia of hogging water from the Chattahoochee and Flint rivers to the economic and ecological detriment of the downstream Apalachicola River basin. Florida seeks a reliable amount of water from Georgia as well as a cap on metro Atlanta’s and/or southwest Georgia’s consumption of water. Florida claims that reduced water levels and resulting increased salinity in Apalachicola Bay have significantly damaged the oyster population and pose threats to mussels and other species.
Interested parties believe that a compromise can be reached here with the creation of a compact that monitors and advances water-saving measures across the basin. At the heart of the dispute are two issues: how much water flows from Georgia into Florida, and should Georgia cap the amount of water it consumes. To date, Georgia has appeared unwilling, at least publicly, to address caps and consumption issues.
Ever present water disputes between states are increasing in light of growing water scarcity concerns as well as quality and quantity challenges. The U.S. Supreme Court (SCOTUS) is seeing more of these original jurisdiction cases as conflicts arise between states over water rights and interstate compact interpretations. At least five cases appear to be pending before SCOTUS at this time involving not only Florida and Georgia but also Montana, Wyoming, Texas, New Mexico, Mississippi, Tennessee, and Colorado.
According to U.S. EPA’s annual enforcement report, U.S. EPA collected approximately $6 billion in civil penalties and required companies to expend in excess of $13.7 billion for pollution control investments in 2016. U.S. EPA’s 2016 collections represented a significant increase over 2015, when U.S. EPA only collected $207 million in civil penalties. The significant increase in 2016 was mainly attributable to a record $5.6 billion Clean Water Act penalty assessed against BP for the Deepwater Horizon event. It is also important to note that the $13.7 billion in pollution control investments doesn’t include the approximately $15 billion that Volkswagen has agreed to expend, because those amounts will primarily be expended in 2017.
Notwithstanding the spike in civil penalties, inspections and evaluations continue their downward trend with approximately 13,500 inspections and evaluations taking place in 2016, as compared with nearly 20,000 in 2012. Pollution reduction also continues to its downward trend with U.S. EPA only requiring companies to reduce releases of pollution by 324 million pounds per year—a result that U.S. EPA attributes to a continuing focus on toxic pollutants which come from smaller volume emitters.
Please click here to see a copy of U.S. EPA’s 2016 enforcement report.
The Task Force on Climate-Related Financial Disclosures has issued a report detailing is recommendations for helping businesses disclose climate-related financial risks and opportunities within the context of their existing disclosure requirements. The Task Force developed four widely adoptable recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions: 1) adoptable by all organizations; 2) included in financial filings; 3) designed to solicit decision-useful, forward-looking information on financial impacts; and 4) strong focus on risks and opportunities related to transition to lower-carbon economy.
The recommendations are incorporated into a comprehensive report that provides good insight into climate-related risks and financial impacts, sector focused guidance, scenario analysis for climate issues and identification of key issues requiring further consideration. Appendices include a summary of select disclosure frameworks and other guidance including fundamental principles for effective disclosure.
In a letter to the Financial Stability Board transmitting the recommendations, Chairman Michael Bloomberg notes “….Warming of the planet caused by greenhouse gas emissions poses serious risks to the global economy and will have an impact across many economic sectors……without effective disclosure of these risks, the financial impacts of climate change may not be correctly priced and as the costs eventually become clearer, the potential for rapid adjustments could have destabilizing effects on markets.” He concludes in his letter that the Task Force’s recommendations “…aim to begin fixing this problem.”
The recommendations are designed to help companies identify and disclose information needed by investors, lenders and insurance underwriters to appropriately assess and price climate related risks and opportunities. Even with the upcoming changes in D.C., it is clear there will be continuing focus on climate change-related disclosures in 2017.
On December 20, 2016, President Obama announced that he was using his authority under the Outer Continental Shelf Lands Act (43 U.S.C. §§ 1331 et seq.) to prohibit drilling and oil exploration in certain areas of the Arctic and Atlantic Oceans. President Obama’s action was coordinated with Canada, where Prime Minister Trudeau announced a similar ban in Canada’s Arctic waters. The action will ban drilling in approximately 115 million acres of the Arctic Ocean, which represents 98% of federally owned Arctic waters, and 3.8 million acres of the Atlantic coast around a series of sensitive coral canyons.
The Outer Continental Shelf Lands Act (“OCS Act”) was passed in 1953 to protect the waters above the outer continental shelf – submerged lands beginning 3 miles from shore and extending to the 200-mile international-waters boundary. 43 U.S.C. § 1331(a). The OCS Act states that:
"The outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs." 43 U.S.C. § 1332(3).
The California Department of Toxic Substances Control (DTSC) has issued draft guidance titled Alternatives Analysis Guide and is seeking comments through January 20, 2017. California’s Safer Consumer Products (SCP) Program challenges product designers and manufacturers to reduce toxic chemicals in their products. According to DTSC, the SCP regulations establish innovative approaches for responsible entities to identify, evaluate, and adopt better alternatives. The SCP approach requires an Alternatives Analysis (AA) that considers important impacts throughout the product’s life cycle and follows up with specific actions to make the product safer. DTSC prepared the Draft Alternatives Analysis Guide to help responsible entities conduct an AA to meet the regulatory requirements. Public comments are specifically requested to provide DTSC with insight on the clarity and usefulness of the Draft Alternatives Analysis Guide.
DTSC’s SCP Program regulations took effect October 1, 2013 and are being implemented based on the various regulatory requirements. The goals of the program are to: 1) reduce toxic chemicals in consumer products; 2) create new business opportunities in the emerging safer consumer products industry; and 3) help consumer and businesses identify what is in the products they buy for their families and customers.
The SCP program implements a four-step process to reduce toxic chemicals in the products that consumers buy and use. It identifies specific products that contain potentially harmful chemicals and asks manufacturers to answer two questions: 1) Is this chemical necessary? 2) Is there a safer alternative? The first step involved publication of a list of candidate chemicals that exhibit a hazard trait and/or an environmental toxicological endpoint. Regulators must then identify potential “priority products” containing chemicals that pose a significant risk to public health or the environment. Once a priority product is declared through a separate rulemaking, regulated entities must conduct an alternative analysis to determine if safer options are available. The final step in the lengthy process is for the department to determine if a regulatory response, such as banning the chemical-product combination, is required.
To learn more about the status of the SCP program and to obtain a copy of the new guidance, visit the DTSC SCP website at http://www.dtsc.ca.gov/SCP/index.cfm.
In a move that should not come as a great surprise, on December 7, 2016, U.S. EPA published a final rule which added a "subsurface intrusion” or “SsI" component to CERCLA’s Hazard Ranking System (HRS). More specifically, SsI can include either groundwater or vapor intrusion although vapor intrusion is the much more common exposure pathway. The new rule, which can be found here, will become effective within 30 days of publication in the federal register. According to U.S. EPA Waste Chief Mathy Stanislaus, the new rule expands the types of sites that be assessed by U.S. EPA to now include sites that solely have SsI issues, as well as sites that have SsI issues that are coincident with a groundwater or soil contamination problem.
The final rule is substantially similar to the draft rule but does have minor adjustments that were made in response to comments which U.S. EPA contends will better “help refine the mechanics of assigning an HRS site score.” Importantly, the new rule doesn’t change the existing HRS cutoff score of 28.5 for a site to qualify for listing on the NPL, nor does the new rule apply to sites that are already on or proposed to be listed on the NPL.
Industry groups and the Department of Defense had objected to the draft rule, and it is unclear whether the new rule will be retained or modified under the incoming Trump administration. We will continue to track this and other rulemaking efforts on the part of U.S. EPA as the administration continues to transition.