New WOTUS Rule Halted in Half of Country by Federal District Court

Torrence_Allison_BLUE
By
Allison A. Torrence 

 

Pexels-vicki-hess-riverOn April 12, 2023, a federal district court judge in North Dakota issued a temporary injunction blocking implementation of the EPA and Army Corps of Engineers regulations redefining Waters of the United States (“WOTUS”) under the Clean Water Act (“CWA”) (the “2023 WOTUS Rule”). The injunction was issued in a challenge brought by 24 states, and will take effect in those states: Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

The WOTUS definition is one of the most controversial and highly-litigated aspects of the CWA, if not all environmental law, because it has wide-ranging implications. The definition of “waters of the United States” is so important because it sets the jurisdictional limits of the CWA. Under the CWA, EPA and the Army Corps have the power to regulate, among other things, the discharge of pollutants to navigable waters from a point source (33 U.S.C. § 1362(12)) and the discharge of dredged or fill material into navigable waters (33 U.S.C. § 1344). “Navigable waters” are defined in the CWA as “the waters of the United States, including the territorial seas.” 33 U.S.C. §1362(7). “Waters of the United States” is not defined further under the CWA, so the agencies have been left to try to craft a definition.

The Army Corps and EPA first proposed a WOTUS definition in 1977 and it has faced revisions and legal challenges ever since. The WOTUS definition has faced Supreme Court review in three previous cases, and is currently pending review in a fourth Supreme Court case, Sackett v. U.S. Environmental Protection Agency, 19-35469, on appeal from the U. S. Court of Appeals for the Ninth Circuit.

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To Broaden or Not to Broaden--U.S. EPA Solicits Input on Whether to Add Additional PFAS to CERCLA’s List of Hazardous Substances

 

Siros

 

By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

 

As we await final agency action on U.S. EPA’s pending rulemaking to designate perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as CERCLA
hazardous substances, U.S. EPA has just published an advanced notice of proposed rulemaking (ANPR) soliciting public input on whether to add additional PFAS to CERCLA’s list of hazardous substances.  When U.S. EPA initially proposed adding PFOS and PFOA to the CERCLA list of hazardous substances, there was significant outcry from environmental groups that argued that the proposed listing didn’t go far enough while industry groups argued that CERCLA was the wrong tool to address PFAS contamination.  U.S. EPA’s solicitation of comments on whether to add additional PFAS to the CERCLA hazardous substance list is certain to generate significant input from both groups. PFAS Pic

In its ANPR, U.S. EPA seeks input on whether it should designate as CERCLA hazardous substances (1) seven additional PFAS and their salts and structural isomers; (2) precursors of these seven PFAS, plus the precursors of PFOA and PFOS; and (3) categories of PFAS.  The seven specific PFAS called out in the ANPR are perfluorobutanesulfonic acid (PFBS), perfluorohexanesulfonic acid (PFHxS), perfluurononanoic acid (PFNA), hexaluoropropylene oxide dimer acid (HFPO-DA, aka GenX), perfluorobutanoic acid (PFBA), perfluorhexanoic acid (PFHxA), and perfluorodecanoic acid (PFDA).  U.S. EPA selected these seven PFAS based on the availability of toxicity information previously reviewed by U.S. EPA and other Federal agencies. 

In addition to seeking information on these specific seven PFAS, U.S. EPA also seeks comments on whether to add to the list of CERCLA hazardous substances salts and precursors of these seven PFAS (as well as precursors of PFOA and PFOS).  Some PFAS can be formed by the degradation of other chemical substances and U.S. EPA’s ANPR solicits input on which substances do in fact degrade into these specific PFAS compounds and the manner in which this degradation might occur.  

Finally, the ANPR seeks input on whether U.S. EPA should designate groups or categories of PFAS as CERCLA hazardous substances, noting that PFAS may share similar characteristics such as chemical structure, physical and chemical properties, mode of toxicological action, precursors, degradants, or co-occurrence.  U.S. EPA references its 2020 Significant New Use Rule (SNUR) for long-chain perfluoroalkyl carboxylate (LCPFAC) as an example of its regulation of a category of PFAS.  Again, environmental groups have long sought to compel U.S. EPA to regulate PFAS as a class while industry groups have argued to the contrary, pointing out the substantial differences in toxicity and physical/chemical characteristics between different PFAS. 

Like U.S. EPA’s proposal to designate PFOS and PFOA as CERCLA hazardous substances, U.S. EPA’s latest ANPR is certain to generate input from a broad spectrum of commenters.  The comment period currently is set to expire on June 12, 2023 (60 days from the date of publication).  We will continue to provide timely updates on U.S. EPA’s ongoing efforts to designate certain PFAS as CERCLA hazardous substances at the Corporate Environmental Lawyer blog


Incorporating PFAS in Industrial Wastewater Discharge Permits to Minimize Risk or Extent of Future CERCLA Liability

Siros  Feltman-Frank By Steven M. Siros and Arie Feltman-Frank

PFAS are being detected in drinking water systems across the United States. Moreover, evolving regulatory developments already require or soon will 
require that public water systems sample for and remediate these chemicals (see, e.g., here). When public water systems find PFAS, which is a PFAS BLOG
significant possibility, public water systems are likely to look to upstream industrial facilities to recoup their remediation costs. And, once PFOA and PFOS becomes CERCLA hazardous substances (likely Summer 2023), public water systems will have a federal cause of action to do so: CERCLA cost recovery.

Among other potential defendants, public water systems may target upstream industrial facilities that have PFOA or PFOS in their wastewater discharges. Indeed, recent U.S. EPA guidance explains that the Clean Water Act’s National Pollutant Discharge Elimination System (NPDES) program, which regulates wastewater discharges, “interfaces with many pathways by which [PFAS] travel and are released into the environment, and ultimately impact water quality and the health of people and ecosystems.”

Industry categories known or suspected to discharge PFAS include: organic chemicals, plastics & synthetic fibers (OCPSF); metal finishing; electroplating; electric and electronic components; landfills; pulp, paper & paperboard; leather tanning & finishing; plastics molding & forming; textile mills; paint formulating; and airports. Of course, this is not an exhaustive list.

While U.S. EPA’s Office of Water is working to revise Effluent Limitation Guidelines and develop water quality criteria to support technology-based and water quality-based effluent limits for PFAS in NPDES permits, there are currently no enforceable limits at the federal level. As an interim measure, recent U.S. EPA guidance describes steps that NPDES permit writers can implement under existing authorities to reduce PFAS discharges, including incorporating monitoring requirements, best management practices, and site-specific limits developed on a best professional judgment basis into permits.

An important question will be whether upstream industrial facilities that have PFAS in their wastewater discharges will be able to rely on the federally permitted release exemption as an affirmative defense to CERCLA liability. This exemption provides that parties are not liable under CERCLA for federally permitted releases. See 42 U.S.C. § 9607(j). The exemption also extends to state permitted releases under federally approved programs. Blankenship v. Consolidation Coal Co., 850 F.3d 630, 638 (4th Cir. 2017).

In the NPDES context, the exemption most notably covers “discharges in compliance with a permit.” See 42 U.S.C. § 9601(10)(A). The limited case law on this issue sheds light on two points. First, the exemption can only cover what a NPDES permit can regulate – the discharge of pollutants into navigable waters from a point source. Second, the exemption does not apply with respect to releases that (1) were not expressly permitted, (2) exceeded the limitations of the permit, or (3) occurred at a time when there was no permit. 

In 1995, U.S. EPA offered some guidance as to its interpretation of the scope of this exemption. Specifically, the Agency stated that the exemption would apply if: (1) the source, nature, and amount of the potential release had been identified and made part of the public record during the permitting process, and (2) the permit contains a condition requiring that the treatment system be capable of eliminating or abating the potential release.

Going back further in time, in a 1988 proposed rule that never took effect, U.S. EPA explained that the exemption covers discharges that are in compliance with a permit limit that specifically addresses the discharge in question. To qualify, the permit must either address the discharge directly through specific effluent limitations or through the use of indicator pollutants. In the case of the latter, the administrative record prepared during permit development must identify specifically the discharge of the pollutant as one of those pollutants the indicator is intended to represent.

Industrial facilities that have PFOA or PFOS in their wastewater discharges should evaluate whether their permits have any provisions that address these chemicals. Assuming they do not, which is the most likely scenario at this early stage, it is unlikely that the federally permitted release exemption will apply. However, if there are provisions that address these chemicals, or if the applicable permitting agency seeks to add such provisions through original permit issuance, modification, or renewal, businesses should consider the extent to which this will influence whether the federally permitted release exemption may apply.

Specifically, when negotiating permit conditions, businesses should keep in mind that U.S. EPA guidance suggests that for the exemption to apply, the source, nature, and amount of the potential PFOA or PFOS release must be identified and made part of the public record during the permitting process, and the resulting permit must contain a condition requiring that the treatment system be capable of eliminating or abating the potential release.

Considering this guidance, it is unlikely that the incorporation of mere monitoring requirements and/or best management practices that do not eliminate or abate the potential release of PFOA or PFOS will be sufficient for a discharger to rely on the federally permitted release exemption. However, the incorporation of site-specific limits developed on a best professional judgment basis likely will.

Indeed, it may be in the best interest of businesses to advocate for provisions in their permits that address PFOA and PFOS to minimize their risk or extent of future CERCLA liability. An important consideration will be the cost of eliminating or abating the potential release of PFOA or PFOS now versus the likelihood and associated cost of being sued for CERCLA cost recovery and ultimately having to pay the costs associated with remediating the unpermitted discharges of PFOA or PFOS later.

We will continue to provide timely updates on U.S. EPA’s ongoing efforts to regulate PFAS under the various environmental statutes at the Corporate Environmental Lawyer.

 

EPA Finalizes “Good Neighbor Plan” Targeting Ozone-Creating NOx Emissions in 23 States

Torrence_Allison_BLUE
By
Allison A. Torrence 

 

On March 15, 2023, EPA finalized its Good Neighbor Plan under the Clean Air Act (“CAA”), a rule designed to reduce smog-forming nitrogen oxide ("NOx") pollution from power plants and other industrial facilities in 23 upwind states that impact compliance with ambient air quality standards in downwind states. This rule will have a significant impact on power plants emissions in 22 states beginning in 2023, and will impose additional emission limits on certain industries, such as cement manufacturing, mining and solid waste combustion, in 20 states beginning in 2026.

Background

The CAA requires each state to submit State Implementation Plans (“SIPs”) that contain rules, plans and programs that will lead to compliance with the National Ambient Air Quality Standards (“NAAQS”). In these SIPs, states are required to ensure that air pollution sources in the state do not contribute to nonattainment of the NAAQS in other states. This requirement is known as the “Good Neighbor” provision of the CAA. On January 31, 2023, EPA determined that 21 states failed to meet the Good Neighbor requirements by failing to address interstate transport of ozone-creating NOx pollution in their SIPs. That action paved the way for EPA to institute Federal Implementation Plans (“FIPs”) in a total of 23 states to ensure that the Good Neighbor provisions were being addressed.

States Impacted

EPA will ensure that NOx emissions reductions are achieved by issuing FIP requirements for 23 states: Alabama, Arkansas, California, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Virginia, West Virginia, and Wisconsin.

Good Neighbor MapSource: https://www.epa.gov/csapr/good-neighbor-plan-2015-ozone-naaqs

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How Low Did U.S. EPA Go--U.S. EPA Issues Its Long-Awaited Draft PFAS Drinking Water Standards

Siros

By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

 

 

Almost two years to the date after U.S. EPA issued its regulatory determination for contaminants on the forth Contaminant Candidate List, U.S. EPA has issued its draft rule settingDrinking Water drinking water limits for several PFAS compounds.  Specifically.  U.S. EPA’s draft rule proposes a four part per trillion (ppt) maximum contaminant level (MCL) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS).  According to an U.S. EPA fact sheet that accompanied the proposed rule, the four ppt level is the lowest concentration that can be reliably detected within “specified limits of precision and accuracy during routine laboratory operations conditions”. 

These proposed MCLs are higher than U.S. EPA’s previously issued health advisory levels (HALs) of 0.004 ppt for PFOA and 0.02 ppt for PFOS.  The reason for the higher proposed MCL levels is due in large part to the fact that U.S. EPA is required to consider available treatment technologies and treatment costs when setting an MCL which it is not required to do when setting a HAL.  U.S. EPA’s proposed maximum contaminant level goal (MCLG) for these specific PFAS which doesn’t need to consider technical feasibility of cost is “0”.  With respect to its previously issued HALs, U.S. EPA specifically noted that following receipt of public comments and finalization of the PFAS MCL, it will decide whether to update or remove the HALs for PFOA and PFOS. 

U.S. EPA’s draft rule also proposes to regulate several additional PFAS, including hexafluoropropylene oxide dimer acid (commonly referred to as GenX), perfluorononanoate (PFNA), perfluorohexanesulfonic acid (PFHxS), and perfluorobutane sulfonic acid (PFBS).  Rather than proposing an MCL for these PFAS,  U.S. EPA instead seeks to regulate these PFAS utilizing a hazard index which is a screening level approach that provides a risk indicator rather than a risk estimate for a mixture of components.

This hazard index approach is sometimes used by other federal agencies, including the Agency for Toxic Substances and Disease Registry.  Under this hazard index approach, U.S. EPA has identified health-based water concentrations (HBWCs) (i.e., the level at which no health effects are expected for that PFAS) for PFHxS (9 ppt); GenX (10 ppt), PFNA (10 ppt) and PFBS (200 ppt).  The detected concentration of each PFAS in drinking water is then divided by the HBWC to get a individual hazard quotient (HQ).  The hazard index is the summation of each of these HQs—if the hazard index value exceeds 1.0, then that would be an exceedance of the MCL.

The MCLs will become effective three years after they are finalized.   At that time, public drinking water systems will be obligated to test for these specific PFAS and take steps to mitigate any exceedances that are identified. 

U.S. EPA has proposed a 60-day comment period on the draft rule; however, in light of what are expected to be significant public comments, it is likely that this comment period will be extended. 

We will continue to provide timely updates on U.S. EPA’s ongoing efforts to regulate PFAS under the various environmental statutes at the Corporate Environmental Lawyer

 


Getting Ahead of Advancing Earth-Observing Satellite Capabilities

Feltman-Frank

 

By  Arie Feltman-Frank

 

The regulated community should be considering how Earth-observing satellites may enhance regulators’ and non-governmental organizations’ (NGOs’) ability to detect, measure, and monitor pollution. According to the Land Remote Sensing Satellites Online Compendium, a resource developed by the U.S. Geological Survey, there are 295 Earth-observing satellites that are operational, and 59 are under development.

At a basic level, Earth-observing satellites acquire information about the Earth. The data derived can differ in resolution and application depending on a satellite’s sensor and orbit. For example, satellites with a geostationary orbit maintain their position directly over the same place on Earth’s surface, permitting almost continuous coverage of that one area. These satellites may be most useful for targeting facilities with repeated or ongoing environmental violations. Once data derived from Earth-observing satellites are processed, they can be used in a variety of applications.

Notable Earth-observing satellites are set to launch this year. For example, TEMPO (Tropospheric Emissions: Monitoring Pollution) is a geostationary satellite scheduled to launch in April 2023 that will monitor daily variations in ozone, nitrogen dioxide, and other key elements of air pollution during daylight hours across North America. According to the U.S. Environmental Protection Agency (U.S. EPA), one of the anticipated benefits of TEMPO data will be an improved understanding of pollution sources and how their emissions vary throughout the day. Also, in late 2023, a subsidiary of the Environmental Defense Fund is expected to be ready to launch MethaneSAT, a satellite that will find and measure methane emissions with “unparalleled precision.” According to its website, MethaneSAT will, among other things, identify and quantify emissions from large sources and quantify aggregate emissions from smaller sources, as well as large intermittent sources.

Data derived from Earth-observing satellites may also impact businesses at the front-end through the imposition of more stringent pollution-reduction requirements. For example, a 2018 research study illustrates that satellite data can supplement ground-based air quality monitors to improve National Ambient Air Quality Standard compliance designations. This could result in businesses in newly designated areas having to comply with more stringent emission limitations and control measures.

Earth-observing satellite-derived data can be used outside of the air pollution context, too. For example, a 2022 research study illustrates that satellite data can be used to identify Concentrated Animal Feeding Operations engaging in unlawful winter land application. The land application detection system developed by this research was used in partnership with the Environmental Law and Policy Center to investigate several possible instances of unlawful application.

The takeaway is that businesses should ensure that they have robust environmental compliance programs in place that consider advancing Earth-observing satellite capabilities. They should especially consider that regulators and NGOs may be able to quickly and accurately detect, measure, and publicize discharges, leaks, spills, and other activity from even remote facilities.

For example, under U.S. EPA’s proposed methane rules, regulatory authorities and “qualified third parties” will be able to use satellites to identify and notify owners and operators in the oil and natural gas sector of “super-emitter” emissions events, which would require owners and operators to investigate and take appropriate mitigation actions.

And, if regulators and NGOs are detecting environmental violations before businesses, in addition to ensuing public relations issues, businesses will not be eligible for penalty mitigation under U.S. EPA’s Audit Policy. This may also reduce businesses’ ability to take advantage of more favorable resolutions of criminal cases under the U.S. Department of Justice, Environmental Crimes Section’s Voluntary Self-Disclosure Policy.

The impact that advancing Earth-observing satellite capabilities may have on environmental enforcement and litigation should not be overlooked. If you have any questions on how advanced monitoring technologies may impact your business operations and liabilities and how you can get ahead of this, reach out to one of the attorneys in Jenner & Block’s Environmental and Workplace Health and Safety practice.


Existing Clean Power and Eligibility for Hydrogen Production Tax Credits: “Additionality” Doesn’t Add Up


By Matthew Price

        The Inflation Reduction Act promises to transform the energy sector in many ways, but among the most exciting is the hydrogen production tax credit, which provides a production tax credit, over a ten year period beginning with the date a facility is placed in service, of up to 60 cents per kilogram of “clean hydrogen” – that is, hydrogen “produced through a process” with a life-cycle greenhouse gas emissions rate below specified thresholds. 26 U.S.C. § 45V.   The credit is enhanced five-fold, up to $3 per kilogram, for clean hydrogen produced at facilities complying with certain prevailing wage and apprenticeship requirements.  Clean hydrogen can be used to decarbonize hard-to-electrify sectors, such as steel, cement, and chemical production, that today are responsible for a significant share of the Nation’s carbon emissions.  

        The Treasury Department is currently reviewing comments on the implementation of the hydrogen tax credit under Section 45V.  See IRS Notice 2022-58.  Several commenters have urged the agency to limit tax credits to hydrogen production powered by new renewable generation – thus eliminating the ability for hydrogen producers to receive tax credits if they source their electricity from existing renewable or nuclear plants.  Similar arguments are being raised at the Department of Energy as it seeks to finalize its Clean Hydrogen Production Standard to guide funding decisions under the Infrastructure Investment and Jobs Act. 

        The policy rationale for this limitation – which its proponents call “additionality” – is that if existing renewable or nuclear plants are used to produce hydrogen, they will no longer be available to serve the grid, and the result will be increased dispatch of fossil fuel plants to fill the gap, resulting in increased carbon emissions overall.  In their view, only “additional” clean generation – generation that would not otherwise exist, but for the electricity demand created by hydrogen production – should be allowed to be used by hydrogen producers claiming tax credits or federal funding. 

        An “additionality” requirement, however, is simply inconsistent with the statutory scheme.  If one is adopted, it is almost certain to be challenged in court – creating uncertainty that will discourage clean hydrogen production.  And, for the reasons I describe below, such a challenge is likely to succeed.

        First, the text of the Inflation Reduction Act forecloses such a requirement.  The statute makes tax credits available to “any qualified clean hydrogen,” 26 U.S.C. § 45V(b)(2)(A), (B), (C), (D) (emphasis added), and defines “qualified clean hydrogen” to focus on the process used to produce the hydrogen – not the indirect effects like the potential for other power sources to be dispatched to serve other load on the electric grid.  Thus, hydrogen counts as “clean hydrogen” if it is “produced through a process that results in a lifecycle greenhouse gas emissions rate” below a specified threshold.  Id. § 45V(c)(2)(A).  Lifecycle greenhouse gas emissions are to be calculated using a model known as “GREET,” developed by Argonne National Labs, and “shall only include emissions through the point of production” as determined by the GREET model.  Id. § 45V(b)(1) (emphasis added).  In calculating emissions through the point of production, the GREET model makes no distinction between sources of electricity based on whether they are existing or new.  Thus, there is no room for an “additionality” requirement in the definitions establishing eligibility for the tax credit.

        Second, if Congress had wanted to impose an “additionality” requirement, it knew how to do so.  For example, Section 45V contains other vintage-related requirements: a “qualified clean hydrogen production facility” is defined as one that begins construction before 2033.  § 45V(c)(3)(C).  Vintage requirements also limit which hydrogen production facilities are eligible for the increased credit amounts on account of compliance with certain prevailing wage and apprenticeship requirements.  § 45V(e)(2)(A).  But there is no vintage limitation on the resources used to provide energy to a clean hydrogen production facility. 

        Moreover, other provisions in the Inflation Reduction Act make clear that Congress anticipated the use of electricity generated by existing nuclear facilities to produce hydrogen and coordinated other clean energy credits with Section 45V on that assumption.  Section 45U, for example, establishes a nuclear production tax credit that is only available to nuclear facilities placed in service prior to enactment of the Inflation Reduction Act.  In Section 45U(c)(2), Congress incorporated special rules (set forth in Section 45(e)(13)) that would allow nuclear facilities receiving credits under Section 45U to use the electricity they generate to produce clean hydrogen receiving credits under Section 45V.  Congress would not have done so if it intended to limit Section 45V credits to hydrogen produced using energy generated by “additional” resources.  Indeed, an “additionality” requirement would make Section 45U(c)(2)’s incorporation of Section 45(e)(13) superfluous, conflicting with a basic principle of statutory interpretation and negating Congress’s intent. 

        Third, Congress sought to promote new renewable generation directly in the Inflation Reduction Act, through tax credit programs aimed directly at new clean generation, in Sections 45Y and 48E.  Especially in light of Sections 45Y and 48E, imposing an “additionality” requirement on Section 45V would be arbitrary.  After all, the purpose of Sections 45Y and 48E is to massively increase the amount of new renewable generation.  Against the backdrop of that expected influx, there is no reason to believe that new renewable generation providing electricity to hydrogen producers is “additional” just because it is new.  Such new renewable generation likely would have come online anyway.  And from the standpoint of the grid, such new renewable resources are just as available to serve load as existing renewable and nuclear resources are.  Consequently, the main effect of grafting an “additionality” requirement onto Section 45V is simply to favor one group of clean generators that otherwise would be serving load (new generators) over other clean generators that would otherwise would be serving load (existing generators).  That would be at odds with the purpose of Section 45V, which is to encourage hydrogen production—not promote new renewable generation.  From the standpoint of hydrogen producers, the main effect of an “additionality” requirement is to limit the options available to them in sourcing electricity—and thereby potentially make it more costly to produce clean hydrogen.  That is directly contrary to Congress’s objectives in Section 45V.

        Imposing an “additionality” requirement under the DOE’s Clean Hydrogen Production Standard, see 42 U.S.C. § 16166, which will guide funding decisions under the Infrastructure Investment and Jobs Act, would face similar legal hurdles.  The Clean Hydrogen Production Standard concerns “the carbon intensity of clean hydrogen production that shall apply” to the various hydrogen-related activities carried out under 42 U.S.C. subchapter 8, id. § 16166(a), including the selection of regional clean hydrogen hubs. 

        An “additionality” requirement has no place there.  Section 16166(b) directs that the clean hydrogen production standard should “support clean hydrogen production from each source” listed in Section 16154(e)(2).  That provision, in turn, makes no distinction between new energy sources and existing energy sources, but instead lists “diverse energy sources” including “fossil fuels with carbon capture, utilization, and sequestration” and “nuclear energy.”  Id. § 16154(e)(2), (2)(A), (2)(D); see also id. § 16166(c) (listing numerous sources to which “the standard” shall apply, but making no distinction among resources based on vintage).  Similarly, Section 16166(b) requires “clean hydrogen” to be defined in terms of carbon emissions “produced at the site of production per kilogram of hydrogen produced.”  Id. § 16166(b)(1)(B) (emphasis added).  In other words, hydrogen’s carbon intensity is to be assessed based on the energy source used to produce the hydrogen—not the indirect effects that using that energy source for hydrogen production may have on the carbon intensity of the grid as a whole.  An “additionality” requirement would be inconsistent with this statutory text.   What is more, the purposes of the statute are squarely focused on promoting the development and commercialization of hydrogen technology.   42 U.S.C. § 16151.  Nothing in those purposes suggest that hydrogen should be pursued only to the extent it can be created by new carbon-free resources.

        The Inflation Reduction Act amounts to a once-in-a-generation opportunity to kick-start hydrogen production.  It could have a transformational effect on our energy economy.  Unless already committed to other uses, existing clean resources should be available to American manufacturers seeking to realize that transformation.  It would be unfortunate indeed if the transition to a hydrogen-based economy were delayed or thwarted because of an “additionality” requirement limiting hydrogen producers to electricity procured from new resources that need to be constructed and interconnected.  Moreover, an additionality requirement is likely to face litigation that will create significant regulatory uncertainty for this nascent industry.  The resulting chilling effect is exactly the opposite of what Congress hoped to achieve.

Maine Proposed Rule Provides Further Reporting Clarity for Products and Product Components Containing PFAS

   SirosRobertson  Daniel By Steven Siros, Partner and Daniel L. Robertson, Associate Attorney

On February 14, 2023, the Maine Department of Environmental Protection (MDEP) issued a proposed draft rule that provides guidance on reporting requirements and sales prohibitions for products and product components containing intentionally added Per- and Polyfluoroalkyl substances (PFAS). PFAS BLOG This proposed rule comes on the heels of two prior MDEP concept drafts and public hearings attended by hundreds of interested parties that generated a significant number of substantive comments.

In July 2021, the Maine Legislature enacted An Act to Stop Perfluoroalkyl and Polyfluoroalkyl Substances Pollution. The law sets forth three main objectives: (1) banning the sale of any product containing intentionally added PFAS by January 1, 2030; (2) banning the sale of carpets, rugs, and fabric treatments with intentionally added PFAS beginning on January 1, 2023; and (3) creating reporting requirements for manufacturers of products with intentionally added PFAS, also beginning on January 1, 2023.  In the absence of implementing regulations as of the January 1, 2023 effective date of the law, MDEP granted compliance extensions to hundreds of manufacturers, following the Maine State Chamber of Commerce actively encouraging Maine businesses to seek extensions.

MDEP’s latest draft rule clarifies a number of issues, including providing guidance on which PFAS chemicals must be reported, conditions for seeking waivers or exemptions from the reporting requirements, submitting claims for confidential business information, and certain fee requirements.

With regards to reporting, the draft rule specifies that the notification must include:

  1. a) A brief description of the product;
  2. b) The purpose for which PFAS are used in the product, including any product component;
  3. c) The amount of each PFAS as a concentration, identified by name and its chemical abstract service (CAS) registry number, of each PFAS in the product or any product component reported as an exact quantity determined using commercially available analytical methods, or as falling within a range approved by MDEP; and
  4. d) The name and address of the reporting manufacturer and information identifying a responsible officer for the manufacturer.

MDEP notes that because the statute requires notification of intentionally added PFAS by CAS number, chemicals which do not have a CAS number assigned are not subject to the reporting requirements or use prohibitions. The latest draft also removes a prior proposed requirement that manufacturers report estimated sales volume for the product. In defining a manufacturer, the proposal clarifies that, in the event a product contains more than one manufacturer, MDEP “will consider the party who controls the formulation of the product and its PFAS content to be the manufacturer.”

The proposal further provides language on waiver requirements and preemption. MDEP may waive all or part of the notification requirement if MDEP determines that “substantially equivalent information” is publicly available. “Substantially equivalent information” is defined in part as “an existing notification by a person who manufactures a product or product component when the same product or product component is offered for sale under multiple brands.”

A product for which federal law or regulation controls the presence of PFAS in the product is exempt from the proposed requirements. Federal preemption is described as “a determination that the intent of federal laws is to limit or eliminate overlapping programs at the state level.” MDEP “will treat as exempt products where an applicable federal law is written with language that explicitly preempts parts of this program . . . [or] any products where an applicable opinion from a court having jurisdiction in Maine finds that preemption of parts of this program is implied.” There are also exemptions for products subject to Maine Revised Statutes Title 32, Sections 26-A (Reduction of Toxics in Packaging) and 26-B (Toxic Chemicals in Food Packaging). This state exemption specifically applies to items being used as packaging, packing components, or food packing and intended for marketing, handling or protection of products.

MDEP also revised its rules for reporting confidential business information, with the latest draft stating that claims of confidential business information may be made at the time of notification. MDEP will handle these claims in accordance with Maine’s Freedom of Access Act, Maine Revised Statutes and related policies and procedures. The proposal notes in particular that information courts would find to be privileged is excluded from public disclosure.

Finally, the proposed rule clarifies the requirements on product components, noting that “[a] separate notification and fee are only required for product components when they are offered or distributed in Maine without being incorporated into a more complex product.”

The draft rule fails, however, to clarify what if any obligation is imposed on a manufacturer that unknowingly sells or distributes for sale a product that contains “intentionally added PFAS.”   For example, a manufacturer may use an ingredient or component that itself contains “intentionally added PFAS” but the manufacturer may lack “knowledge” of the presence of the PFAS in the ingredient or component.  Moreover, because even the best laboratories can detect only a few of the more than 9,000 different PFAS, it is often impossible for a manufacturer to know whether a product sold or distributed in Maine contains “intentionally added PFAS”.  The regulations are silent on what, if any, compliance obligations may be triggered by what is a fairly common occurrence. 

Manufacturers of products sold in Maine that may contain PFAS would be well served to carefully evaluate this proposed rule to determine how best to ensure compliance with the January 1, 2023 reporting obligations and subsequent sale prohibitions.   Affected entities may elect to submit comments on the proposed rule on an individual basis or through a trade association.  The public comment period closes on May 19, 2023.

We will continue to monitor Maine’s PFAS reporting rulemaking and other nationwide PFAS-reporting developments on Corporate Environmental Lawyer.


PFAS in Consumer Products


Siros Robertson  Daniel Feltman-Frank

 

By Steven Siros, Daniel L. Robertson and Arie Feltman-Frank

 

Developing a Proactive and Strategic Game Plan

Per- and polyfluoroalkyl substances (PFAS) in consumer products continue to be in the regulatory and litigation spotlight in 2023. Manufacturers and downstream businesses should be actively preparing to comply with the continually evolving patchwork of federal and state PFAS laws, as well as taking steps to minimize litigation risks. Below, our team of attorneys offers strategic advice for manufacturers and downstream businesses with respect to how regulatory and litigation PFAS developments may apply to them and best practices for minimizing regulatory and litigation risk with respect to same.

I.     State Consumer Product PFAS Laws PFAS

Consumer products that are currently the subject of state PFAS laws include carpets, rugs, and fabric treatments, children’s products, cookware, cosmetics, food packaging, furniture, oil and gas products, ski wax, and textiles and apparel, but this is a continually evolving list. Businesses that manufacture and sell these and similar products should be carefully evaluating whether these products contain PFAS, in which states the products are or will be manufactured, distributed, or sold, and what the PFAS laws and regulations are in those states. State PFAS laws can be categorized by the PFAS they regulate, the requirements they impose, and other notable nuances.

  1. Regulated PFAS

Thousands of PFAS have been identified by the U.S. Environmental Protection Agency (EPA),[1] but PFAS laws may not apply to all. Thus, when reviewing their applicability, businesses should consider how PFAS laws define PFAS and whether they apply broadly to all PFAS or only a specific subset of PFAS. Businesses should also consider whether there are specific threshold concentrations or whether the regulations are triggered by the presence of any PFAS in the product. Lastly, businesses should consider whether the laws only apply to “intentionally” added or introduced PFAS that serve an intended function. Each of these are discussed, in turn, below.

            A.    PFAS Defined and Specific Subsets

State PFAS laws generally broadly define PFAS as a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.[2] Some laws apply to PFAS generally. For example, California’s Chemicals of Concern in Food Packaging, Juvenile Products, and Textile Articles laws prohibit “regulated” PFAS, and their definitions of “regulated” do not narrow their prohibitions’ coverage to a specific PFAS subset.

In contrast, other laws only apply to a specific subset of PFAS. These narrower laws may identify the regulated PFAS themselves or refer to chemicals designated or listed by a state regulatory agency. For example, Maryland’s Cosmetic Products law specifically lists thirteen specific PFAS that fall within its regulatory purview. Similarly, Maine’s Toxic Chemicals in Children’s Products law applies to “priority chemicals,” and perfluorooctanesulfonic acid (PFOS) is the only PFAS that the Maine Department of Environmental Protection has currently designated as such. Importantly, PFAS chemicals that are not subject to prohibitions now may fall victim in the future. Thus, businesses that choose to continue using unregulated PFAS in their products may find themselves forced to adjust their ingredient lists down the road.

            B.    Threshold Concentrations

In addition to identifying the regulated PFAS, businesses should consider whether state PFAS laws specify threshold concentrations that trigger their requirements as these may influence compliance obligations.

For example, Oregon’s Toxic-Free Kids Act imposes disclosure requirements on manufacturers of children’s products that contain a high priority chemical.

but only if the chemical is “in an amount at or above a de minimis level.” For an intentionally added chemical, the de minimis level is the “practical quantification limit” (PQL), which means the lowest concentration of a chemical that can be reliably measured within specified limits during routine laboratory operating conditions. The Oregon Health Authority has defined the PQL for intentionally added PFOS as 0.001 parts per million. For a chemical that is a “contaminant,” which is defined as trace amounts of chemicals that are incidental to manufacturing and that serve no intended function in the product component, the de minimis level is 100 parts per million (see more on unintentional PFAS below).

In a similar fashion, Maine’s An Act to Stop PFAS Pollution imposes disclosure requirements on manufacturers of products with intentionally added PFAS. However, the Maine Department of Environmental Protection has suggested in its FAQs[3] that notification is only required if intentionally added PFAS are detectable when analyzing the product using a commercially available analytical method (above the PQL). The Department understands “commercially available analytical method” to mean any test methodology used by a laboratory that performs analyses or tests for third parties to determine the concentration of PFAS present. 

Finally, California’s Chemicals of Concern in Food Packaging and Juvenile Products laws, which prohibit “regulated” PFAS, specify that PFAS may be considered “regulated” if their presence is at or above 100 parts per million, as measured in total organic fluorine. California’s Textile Articles law provides a similar threshold concentration requirement, as does Vermont’s Chemicals of High Concern to Children law.

Thus, compliance with state PFAS laws may require that businesses be able to reliably measure the concentration of PFAS (or total organic fluorine) in their final products, which will depend on the availability of commercially available testing methods. While EPA has developed approved methods for measuring PFAS concentrations in environmental matrices such as air, water, waste, and pesticides, these methods may not be specifically applicable for consumer products. Notably, the American Society for Testing and Materials (ASTM) has announced that it created a new subcommittee that will develop standards for measuring PFAS in consumer products. ASTM’s efforts are ongoing.

Importantly, limitations in measuring capabilities may pose unique compliance challenges.[4] The traditional PFAS testing methods are liquid chromatography-tandem mass spectrometry (LC/MS/MS) or gas chromatography-mass spectrometry (GC-MS), but these methods target only a specific subset of PFAS—presently approximately 42 unique PFAS.

To address these limitations, there are numerous emerging technologies and methodologies. For example, to evaluate the presence of precursor molecules that can break down or transform into PFAS, total oxidizable precursors (TOPs) assay can be utilized as it was in a recent study to measure the presence of PFAS in a range of household items.[5] Other methodologies such as combustion ion chromatography (CIC), particle-induced gamma ray emission (PIGE), neutron activation analysis (INAA), and X-ray photoelectron spectroscopy (XPS), can be used to quantify total organic fluorine that some state regulators have elected to rely upon as a proxy for PFAS.[6] There are, however, significant risks in relying on total organic fluorine as a proxy for PFAS as numerous studies have documented limitations in this methodology.[7]

Businesses should be reviewing commercially available methods to measure the concentration of PFAS in their products, as well as be cognizant as to how these methods are evolving. Businesses may also want to consider seeking clarification from regulatory agencies on which methods are appropriate for specific consumer products. 

            C.    Intentionality and Functionality

Many state PFAS laws only apply when PFAS are “intentionally” added or introduced to covered products for a specific purpose.[8] Notably, the introduction or addition of PFAS does not need to be direct. Intentionally adding or introducing product ingredients that are not regulated PFAS but break down or transform into PFAS in final products may render state PFAS laws applicable, too. Therefore, businesses should assess whether PFAS (or other chemicals that may serve as precursor molecules of regulated PFAS) are being used in their manufacturing process and for what purpose. Businesses that use PFAS or PFAS precursor product ingredients in their manufacturing process for a specific purpose should evaluate the extent to which they can phase out these ingredients and find substitutes.   

Some laws specifically exempt unintentional PFAS from regulation. For example, Connecticut’s Cosmetic Products law clarifies that a person is not in violation of the law’s PFAS prohibition if the product was manufactured through a process to comply with the law and contains a technically unavoidable trace quantity of regulated PFAS due to an impurity of a natural or synthetic ingredient, the manufacturing process, storage, or packaging.

However, other laws may not let manufacturers off the hook if the unintentional PFAS is above identified threshold concentrations. As discussed above, California’s Chemicals of Concern in Food Packaging, Juvenile Products, and Textile Articles laws and Vermont’s Chemicals of High Concern to Children law establish threshold concentration requirements.

Even if PFAS are not being used to manufacture the product itself, they may still end up in the final product. One way this may happen is through leaching from the product packaging. For example, EPA studies have revealed that PFAS from fluorinated high-density polyethylene (HDPE) container walls of pesticide products can leach into the contents of the containers. In fact, EPA has recently initiated enforcement action against a company that utilized fluorine gas in the manufacture of plastic containers from which EPA claims PFAS are leaching into the products stored in these containers. 

In sum, even if businesses do not use PFAS in their manufacturing process, they would be wise to carefully audit their supply chains to minimize the risk of PFAS winding up in their final products. Moreover, as explained further below, businesses with PFAS in their products, even if their presence is unintentional and not in violation of any specific federal or state regulation, may still be subject to private party litigation.

Finally, although not the primary focus of this client alert, businesses should consider the downstream pathways of their products and other equipment that may contain PFAS because releases into the environment may trigger Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) reporting requirements and liability once perfluorooctanoic acid (PFOA) and PFOS (and other PFAS down the road) become designated as CERCLA hazardous substances (see more on remediation demands below).[9]

  1. Requirements

Requirements fall into two categories: disclosures and prohibitions. While some state PFAS laws directly impose requirements, others give regulatory agencies the authority to. Below is a collection of consumer product categories and state PFAS laws, including the types of requirements imposed and their effective dates.

While some laws are already in effect, others will take effect later this year. For example, Vermont’s prohibitions on intentionally added PFAS in carpets and rugs, food packaging, and ski wax, and California’s prohibition on regulated PFAS in children’s products, will take effect on July 1 of this year. Connecticut’s and New York’s prohibition on intentionally added PFAS in food packaging and apparel, respectively, will take effect on December 31. Other laws won’t take effect until 2024 or beyond.

 

State PFAS Laws/Regulations Targeting Consumer Products

Product Category

States, Type of Requirement, Effective Date

Carpets/Rugs/Fabric Treatments

·         California: Disclosure (effective).

·         Maine: Prohibition (effective).

·         Maryland: Prohibition (effective).

·         Vermont: Prohibition (July 1, 2023).

·         Colorado: Prohibition (Jan. 1, 2024).

Children’s Products

·         Oregon: Disclosure/eventual prohibition (effective). 

·         Maine: Disclosure (effective).

·         Vermont: Disclosure (effective); potential prohibition: businesses should closely follow regulatory developments (see here).  

·         Washington: Disclosure (effective).

·         California: Prohibition (July 1, 2023).

·         Colorado: Prohibition (Jan. 1, 2024).

·         New York: Potential disclosure/eventual prohibition if PFAS are added to Dangerous Chemicals List. Businesses should closely follow regulatory developments (see here).

Cookware

·         California: Disclosure on website (effective); disclosure on label (Jan. 1, 2024).  

·         Colorado: Disclosure (Jan. 1, 2024).

Cosmetics

·         California: Prohibition (Jan. 1, 2025).

·         Colorado: Prohibition (Jan. 1, 2025).

·         Maryland: Prohibition (Jan. 1, 2025).

Food Packaging

·         California: Prohibition (effective).

·         Maryland: Prohibition (effective).

·         New York: Prohibition (effective).

·         Washington: Prohibition (effective).

·         Vermont: Prohibition (July 1, 2023).

·         Connecticut: Prohibition (Dec. 31, 2023).

·         Colorado: Prohibition (Jan. 1, 2024).

·         Minnesota: Prohibition (Jan. 1, 2024). 

·         Rhode Island: Prohibition (Jan. 1, 2024).

·         Hawaii: Prohibition (Dec. 31, 2024).

·         Maine: Potential prohibition if Maine Department of Environmental Protection does so by rule. Businesses should closely follow regulatory developments (see here).

Furniture

·         Colorado: Prohibition for indoor upholstered furniture (Jan. 1, 2025); prohibition for outdoor upholstered furniture (Jan. 1. 2027).

Oil and Gas Products

·         Colorado: Prohibition (Jan. 1, 2024).

Ski Wax

·         Vermont: Prohibition (July 1, 2023). 

Textiles/Apparel

·         New York: Prohibition (Dec. 31, 2023).

·         California: Prohibition (Jan. 1, 2025); disclosure for outdoor apparel for severe wet conditions (Jan. 1, 2025); prohibition for outdoor apparel for severe wet conditions (Jan. 1, 2028).

·         Colorado: Prohibition for indoor textile furnishings (Jan. 1, 2025); prohibition for outdoor textile furnishings (Jan. 1, 2027).

General

·         California: Disclosure (effective).

·         Maine: Disclosure (effective); prohibition (Jan. 1, 2030); in the interim, potential prohibition if Maine Department of Environmental Protection does so by rule. Businesses should closely follow regulatory developments (see here).

·         Washington: Potential disclosure and/or prohibition if the Washington Department of Ecology does so by rule. Businesses should closely follow regulatory developments (see here).

  1. Other Notable Nuances

Finally, state PFAS laws can be characterized by other notable nuances. For example, some laws provide defenses for sellers and distributors that rely in good faith on manufacturer certificates of compliance. Others provide exemptions for certain products or parties or provide a vehicle for regulatory agencies to extend deadlines. Businesses should carefully consider these nuances when evaluating their options.

II.     Federal Consumer Product PFAS Regulations, Bills, and Liability

In addition to preparing to comply with the patchwork of state PFAS laws, businesses should be following and preparing to comply with evolving PFAS obligations at the federal level and seeking to understand and address potential liabilities. These include:

  • Reporting obligations under Section 313 of the Emergency Planning and Community Right-to-Know Act for facilities that manufacture, process, or otherwise use certain PFAS that have been added to the Toxic Release Inventory. Notably, if EPA’s December 5, 2022, proposed rule[10] takes effect, covered facilities will no longer be able to avoid PFAS reporting obligations under the “de minimis exemption,” which allows facilities to evade reporting requirements with respect to mixtures or other trade name products containing PFOS concentrations below 0.1% and other covered PFAS concentrations below 1%. Covered facilities will also no longer be able to take advantage of other burden-reduction reporting options. Businesses should consider submitting comments on the proposed rule, which must be received on or before February 3, 2023.
  • Notification requirements associated with importing articles and carpets containing certain PFAS. Specifically, EPA’s Significant New Use Rule,[11] promulgated under the Section 5(a) of the Toxic Substances Control Act (TSCA), became effective on September 25, 2020, and requires persons to notify EPA at least 90 days before commencing the import of a subset of PFAS chemicals as part of a surface coating on articles and PFOS as part of carpets. The rule provides that examples of articles could include apparel, outdoor equipment, automotive parts, carpets, furniture, and electronic components.
  • Potential future reporting and recordkeeping requirements for manufacturers and importers of PFAS for PFAS manufactured in any year since January 1, 2011. Under EPA’s proposed rule,[12] proposed pursuant to Section 8(a)(7) of TSCA, articles containing PFAS, including imported articles containing PFAS (such as articles containing PFAS as part of surface coatings), are included in the scope of reportable chemical substances.
  • Potential future testing and reporting obligations for manufacturers or processors of certain PFAS that may be on the receiving end of TSCA Section 4(a) testing orders. Under TSCA, the term “processor” includes persons who prepare chemical substances for distribution in commerce as part of articles.[13] These orders require recipients to test identified chemical substances to determine whether they have adverse health or environmental effects.
  • Keep Food Containers Safe from PFAS Act of 2021 (3169): This bill was introduced in the U.S. Senate on November 4, 2021, and would amend the Federal Food, Drug, and Cosmetic Act to, effective January 1, 2024, prohibit the introduction or delivery for introduction into interstate commerce of food packaging containing intentionally added PFAS, and for other purposes. The bill’s sponsor is U.S. Senator Margaret Wood Hassan of New Hampshire.
  • No PFAS in Cosmetics Act (2047): This bill was introduced in the U.S. Senate on June 14, 2021, and would require the Secretary of Health and Human Services to issue a proposed rule to ban the use of intentionally added PFAS in cosmetics no later than 270 days after the bill’s enactment and finalize such rule not later than 90 days after issuing the proposed rule. The bill’s sponsor is U.S. Senator Susan M. Collins of Maine.
  • Safe Drinking Water Act (and state) regulatory developments and remediation demands: EPA is developing a National Primary Drinking Water Regulation (NPDWR) for PFOA and PFOS, which will lead to the establishment of Maximum Contaminant Levels (MCLs) for these PFAS.[14] In the interim, EPA has developed[15] non-regulatory health advisory levels for PFOA and PFOS, as well as final health advisory levels for other PFAS. EPA is also evaluating additional PFAS and considering regulatory actions to address groups of PFAS. For example, EPA’s Fifth Contaminant Candidate List[16] includes a group of PFAS, which may lead to a NPDWR for these PFAS down the road. Also, the Fifth Unregulated Contaminant Monitoring Rule[17] requires certain public water systems to collect samples of 29 PFAS between 2023 and 2025. Notably, in addition to these federal developments, several states have established MCLs and notification requirements for certain PFAS. To comply with these regulatory developments, public water systems may detect and remediate PFAS in drinking water and target nearby consumer product manufacturers or downstream businesses with PFAS in their products to try to force them to pay remediation costs.

III.    Litigation

Finally, businesses should proactively stay ahead of new PFAS litigation trends in the consumer product context.

  1. Current Litigation

As consumer interest in PFAS increases, there is a corresponding increased focus on reporting of PFAS in consumer products. Perhaps not surprisingly, this reporting has spawned litigation.

For example, after a 2022 Consumer Reports review discussed PFAS in packaging products from restaurants and grocery chains, companies named in the report, including Burger King, were sued. In a similar fashion, after Toxic-Free Future published a report on the use of PFAS in water or stain-resistant textiles, one of the companies in the report, Recreational Equipment, Inc. (REI), was sued in California in April 2022, with a second lawsuit filed in Washington in October 2022. Personal care brands and cosmetic manufacturers such as L’Oreal and Cover Girl are facing similar lawsuits, the L’Oreal lawsuit citing a June 2021 Notre Dame research study that investigated the use of PFAS in 231 cosmetic products.

The lawsuits generally allege breaches of express or implied warranties, fraudulent concealment, unjust enrichment, and consumer protection act violations and track similar themes, targeting a business for touting its product as “sustainable,” “safe,” or “green” when the product allegedly contains PFAS known to be harmful. Statements of “transparency” in product ingredients have also been targeted where the use of PFAS was not clearly stated. Unjust enrichment claims tend to allege a company saved money by using PFAS-coated products instead of more expensive, but safer, alternatives. Injury claims, such as in the REI cases, allege that a consumer was led to believe they were spending money on a premium, environmentally friendly brand versus lower-cost competitors.

At least one lawsuit has already been defeated. For example, on November 30, 2022, a district court in Pennsylvania dismissed a lawsuit against Artsana USA, Inc., commonly known as Chicco, that alleged a failure by Chicco to disclose the use of PFAS in its KeyFit 30 children’s car seat in either its packaging, labelling, or ingredients list. The plaintiff, who did not allege any health impacts, instead alleged that she overpaid for the product thinking it was PFAS-free based on Chicco’s omissions and misrepresentations. The plaintiff also pointed to a Chemical Policy on Chicco’s website that claimed the KeyFit 30 to be PFAS-free.

On a motion to dismiss, the court held that the plaintiff did allege an injury-in-fact by paying a price premium for a product the plaintiff believed to be PFAS-free. However, the court also held that the plaintiff failed to state a claim for which relief could be granted because Chicco is not required to disclose the chemicals it uses to treat its car seats and because the plaintiff did not rely on the Chemical Policy when purchasing the car seat. The court further held that the plaintiff failed to follow statutory requirements to notify the defendant of a breach of express or implied warranty.

Other consumer product company defendants have similarly pushed to dismiss litigationThe disposition of these and related lawsuits will bring needed clarity to businesses with respect to how they advertise their products.

  1. Future Outlook

It is likely that plaintiff’s firms will continue to aggressively pursue lawsuits in this area. With most lawsuits focusing on product representations, businesses should pay special attention to how they address PFAS in their consumer-facing descriptions.

Retailers can also expect increased pressure from consumers to remove PFAS-containing products from their catalogs. This, in turn, will put pressure on manufacturers and upstream suppliers to ensure products reaching retail are PFAS-free, as well as increase retailer and consumer demands directed at manufacturers and suppliers for product ingredient information.

IV.    Conclusion

Manufacturers and downstream businesses should be dedicating resources to comply with regulatory developments and minimize litigation risk. Our team of attorneys can help businesses examine how PFAS developments apply to them, as well as help businesses develop a proactive and strategic game plan.

 

[1] See PFAS Master List of PFAS Substances, EPA (Aug. 10, 2021), https://comptox.epa.gov/dashboard/chemical-lists/pfasmaster.

[2] Sometimes state PFAS laws use the language “all” or “any” members.

[3] While the disclosure requirements took effect January 1, 2023, the Maine Department of Environmental Protection is currently in the process of developing regulations. The Department’s website notes that the answers in its FAQs are subject to change in response to feedback and changes in regulation.

[4] Cf. Kelsey L. Rodriguez et al., Recent Developments of PFAS-Detecting Sensors and Future Direction: A Review, Micromachines (Basel). 2020 Jul; 11(7): 667, at 2 (noting the limitations in the practical applications of traditional technologies used to measure PFAS in environmental matrices). For one example of regulatory-detection  mismatch in the drinking water context, EPA’s interim health advisory levels for perfluorooctanoic acid (PFOA) and PFOS, 0.004 and 0.02 parts per trillion, respectively, are below the level of both detection and quantitation for these chemicals.

[5] Kathryn M. Rodgers et al., How Well Do Product Labels Indicate the Presence of PFAS in Consumer Items Used by Children and Adolescents?, Environ Sci Technol. 2022 May 17; 56(10): 6294–6304.

[6] Lara Schultes et al., Total Fluorine Measurements in Food Packaging: How Do Current Methods Perform?, Environ. Sci. Technol. Lett. 2019, 6, 2, at 73–78.

[7] See, e.g., Anna Brinch et al., Risk Assessment of Fluorinated Substances in Cosmetic Products, Ministry of Environment and Food of Denmark. 2018 Oct, at 31.

[8] PFAS are generally added to consumer products to impart water and stain resistance.

[9] See 87 Fed. Reg. 54,415 (Sept. 6, 2022).

[10] 87 Fed. Reg. 74,379.

[11] 85 Fed. Reg. 45,109 (July 27, 2020).

[12] 86 Fed. Reg. 33,926 (June 28, 2021).

[13] See 15 U.S.C. §2602(13), (14).

[14] In March 2021, EPA published Regulatory Determinations for Contaminants on the Fourth Contaminant Candidate List, which included a final determination to regulate PFOA and PFOS in drinking water. 86 Fed Reg. 12,272 (Mar. 3, 2021) (Regulatory Determinations); 81 Fed. Reg. 81,099 (Nov. 17, 2016) (Fourth Contaminant Candidate List).

[15] 87 Fed. Reg. 36,848 (June 21, 2022).

[16] 87 Fed Reg. 68,060 (Nov. 14, 2022).

[17] 86 Fed. Reg. 73,131 (Dec. 27, 2021).

Carbon Dioxide Capture and Storage: A Pathway for Greenhouse Gas Emission Reductions

Siros

Tatjana Feltman-FrankBy Steven Siros, Tatjana Vujic and Arie Feltman-Frank

 

 

As businesses continue to optimize their environmental, social, and governance (ESG) strategies, an important arrow in the ESG quiver may be carbon di Greenhouseoxide (CO2) capture and storage (CCS). CCS involves capturing, compressing, transporting, and then injecting CO2 into deep underground porous rock formations for long-term storage, known as geological sequestration (GS). These formations are often a mile or more beneath the surface and overlaid by impermeable, non-porous layers of rock that trap the CO2 and prevent it from migrating upward.

The effectiveness of carbon capture,[1] coupled with the robust storage capacity available in the United States,[2] make CCS a promising method to minimize the climate-forcing effects of CO2 emissions. Indeed, the Security and Exchange Commission’s (SEC’s) proposed climate-disclosure rule refers to investing in CCS technologies as one way by which companies can “take advantage of climate-related opportunities.” CCS may also be a viable compliance option for “major” federal contractors which, according to a recently proposed Federal Acquisition Regulatory Council rule, will be required to set “science-based targets” to reduce their greenhouse gas (GHG) emissions in order to do business with the federal government.

Injecting CO2 underground is not new. For decades, the oil and gas industry has been utilizing enhanced oil recovery (EOR), a process that involves injecting CO2 into oil-bearing formations to increase the amount of oil and gas produced from oil and gas reservoirs. What is relatively new, however, is the increased focus on GS as a vital, if not indispensable,[3] part of meeting CO2-reduction goals. This client alert will predominantly focus on the GS component of CCS and the permitting requirements associated with GS of CO2 for the purpose of meeting GHG reduction targets.

I    The Safe Drinking Water Act and Geological Sequestration of CO2

The primary federal program governing GS of CO2 is the Safe Drinking Water Act’s (SDWA’s) Underground Injection Control (UIC) program. According to EPA, the “chief goal” of the UIC program is the “protection” of underground sources of drinking water (USDWs).[4] Under the SDWA, EPA must publish regulations for state UIC programs that “contain minimum requirements for effective programs to prevent underground injection which endangers drinking water sources.”[5] Interested states can then apply for primary enforcement responsibility of the UIC program, known as “primacy.”[6]

The statutory vehicle for primacy applicable to GS of CO2 is section 1422, whereby states must demonstrate that, among other requirements, they have adopted and will implement a UIC program that meets the “minimum requirements” established by the federal regulations.[7] While the federal regulations establish a floor, they do not preclude states from adopting or enforcing “more stringent or [] extensive” requirements or “[o]perating a program with a greater scope of coverage.”[8] If EPA approves a state’s UIC program, the state achieves primacy; if EPA disapproves the program (or parts thereof), or if a state fails to apply, the federal UIC program applies.[9]

There are six classes of underground injection wells that are regulated under the SDWA.[10]  Of these classes, Class VI and Class II wells are most relevant to GS of CO2.

Class VI wells are used for non-experimental GS of CO2.[11] EPA promulgated regulations governing minimum federal requirements for Class VI wells by final rule on December 10, 2010.  The regulations are generally set forth at 40 C.F.R. Parts 124, 144, 145, and 146 and required EPA to establish a Federal UIC Class VI program in each state that did not submit a complete primacy application by September 6, 2011. Because no state applied by the deadline, on September 6, 2011, the federal Class VI program became effective nationwide.

Since then, only North Dakota and Wyoming have achieved Class VI primacy. In all other states, the federal program applies. Only two Class VI permits have been issued under the federal UIC program, both by EPA Region 5 to Archer Daniels Midland in Decatur, Illinois, which took EPA approximately three years to issue (measured from the date the applications were submitted to issuance). Another 28 Class VI permit applications are pending in California, Illinois, Indiana, Louisiana, Ohio, and Texas. It is anticipated that over time, the permitting process will become both faster and more efficient, especially in light of increased funding provided by the Infrastructure Investment and Jobs Act (IIJA), which appropriates $5 billion annually to EPA over the next five years for the permitting of Class VI wells as a way to facilitate more CCS.[12]

Class II wells, which include wells that inject fluids into oil and gas reservoirs for EOR,[13] are also relevant to GS of CO2 because long-term storage of CO2 in these wells can be incidental to the injection process. Notably, most states have achieved Class II primacy.[14] When EOR results in some “incidental storage” of CO2 in a Class II well, the owner or operator is likely not required to seek a Class VI permit. However, if the owner or operator elects to use a Class II well originally used for EOR to inject CO2 for the “primary purpose of long-term storage,” the regulations require that the owner or operator obtain a Class VI permit “when there is an increased risk to USDWs compared to Class II operations.”[15]

We are not aware of any instances where EPA has required an owner or operator to obtain a Class VI permit for a previously permitted Class II well. As such, one attractive option for owners or operators of Class II wells used for EOR may be to utilize these wells for long-term GS of CO2, given that the Class II requirements are less stringent. Because Class VI wells are the primary wells used for long-term CO2 storage, the remainder of this client alert will predominantly focus on Class VI wells.

    A.    Geological Sequestration Projects in States Where the Federal UIC Class VI Program Applies.

In states in which the federal UIC Class VI program applies, to receive a Class VI permit that would allow for GS of CO2, businesses need to submit a Class VI permit application to the appropriate EPA regional office within “a reasonable time before construction is expected to begin.”

Because the primary requirement of the UIC program is to ensure that GS of CO2 will not threaten any USDWs, businesses need to carefully choose where to locate their wells. In particular, wells need to be placed at sites of “suitable” geology.  Of suitable geology means that the injection zone can receive the total anticipated volume of the CO2 stream, while the confining zone, i.e., the area in which the CO2 will be stored, must be free of transmissive faults or fractures and sufficient to contain the injected CO2 stream. The confining zone also must be able to withstand injection without initiating or propagating fractures that would allow the CO2 to migrate outside its bounds.[16] GS of CO2 must also be beneath the lowermost formation containing a USDW unless a waiver of the injection depth requirements has been granted.[17]

In their applications, Class VI permit applicants must include information regarding the proposed injection well, its construction, the proposed operations, and geologic, hydrologic, and other information regarding the area around the project where USDWs may be endangered, which is known as the “area of review.” The area of review is “delineated using computational modeling.”[18] Applications must also include plans related to the area of review and the types of corrective action, testing and monitoring, injection well plugging, post-injection site care and site closure, and emergency and remedial response that will be provided. Lastly, applications must provide proof that the applicants meet financial responsibility requirements.[19]

Throughout the application process, applicants should consider whether the information submitted to EPA can be claimed as confidential business information. If so, they should be sure to make a confidential business information assertion in their applications or else risk the possibility that their applications could be subject to public disclosure.[20]

Once cessation of injection occurs, owners and operators must continue to monitor the site for “at least 50 years” or until EPA decides that the GS project no longer poses an endangerment to USDWs. Owners and operators also must report any evidence that the injected CO2 stream or associated pressure front may cause endangerment to a USDW.[21]

If any indication of movement of any contaminant into an USDW exists, the permittee will be subject to “additional requirements . . . as are necessary to prevent such movement,” which are imposed by modifying the permit or terminating the permit if “cause” exists. In addition, in the absence of “appropriate” state or local action, EPA may take “emergency action” when “a contaminant which is present in or likely to enter a public water system or [USDW] may present an imminent and substantial endangerment to the health of persons.”[22]

    B.    Geological Sequestration Projects in States That Have Achieved Class VI Primacy

As noted previously, only North Dakota and Wyoming have achieved Class VI primacy.[23] Thus, businesses interested in pursuing GS in these states will have to do so in accordance with the states’ respective Class VI regulations. North Dakota’s Class VI program is administered by the North Dakota Oil & Gas Division. To date, North Dakota’s Oil & Gas Division has issued two Class VI permits and has one permit application under review. Wyoming’s Class VI program, on the other hand, is administered by the Wyoming Department of Environmental Quality. To date, Wyoming has received two Class VI permit applications, each of which are still under review.

In contrast to the three-year permitting time for the two Class VI permits issued by EPA Region 5, the time to review and approve the two permits issued by the North Dakota Oil & Gas Division was approximately eight months. It is expected, however, that the annual $50 billion in grant funding made available through the IIJA over the next five years[24] will drive more states to seek Class VI primacy. The likely result will be that more projects may be able to get permitted faster.

II    Obstacles, New Developments, and Other Considerations

Despite the significant funding and attention given to CCS as a climate mitigation tool, businesses interested in pursuing CCS should be aware of potential obstacles they may encounter and be required to navigate. These obstacles include high project costs, public opposition, and uncertainties associated with subsurface pore space ownership and long-term liability. While other project specific requirements are likely to arise, such as compliance with additional federal, state, and local laws,[25] a review of these additional requirements is beyond the scope of this client alert. 

    A.    High Project Costs.

High project costs are a key challenge to CCS development. Whether a project’s costs are high or not will depend on several factors, including the type of facility, the facility’s proximity to the injection site, the availability of CO2 transportation infrastructure, and tax credits and grants.

Taking each of these factors in turn, certain facilities will be at an advantage when it comes to cost thanks to characteristics like the concentration of the CO2 stream. In particular, CO2 capture is most cost-effective for facilities that generate highly concentrated CO2 streams.[26]

With respect to transportation, the closer the CO2-producing facility is to the injection site, the lower the overall costs will be. Also, CCS is likely to be most cost-effective in areas with a history of oil and gas extraction and EOR, such as California, Illinois, Kansas, Oklahoma, and Texas, where the approximately 5,000 miles of CO2 pipelines established in the United States are largely located.[27] While the expansion of CO2 pipeline infrastructure will be necessary for large-scale CCS development, the need for additional pipeline to deliver the CO2 to the injection site creates not only more infrastructure costs but also more requirements with which more costs, such as permit and land acquisition and related compliance with pipeline safety regulations, are likely associated.[28]

Importantly, the cost equation may be changing owing to the expanded 45Q tax credits established by the 2022 Inflation Reduction Act (IRA), which are available in addition to funding provided by the IIJA. Although a detailed overview of these statutes’ provisions is beyond the purview of this client alert, at a high level, the IRA increased the 45Q tax credits for certain facilities or equipment placed in service after December 31, 2022, to $85 per ton of CO2 disposed of in secure geologic storage and $60 per ton of CO2 used for EOR and disposed of in secure geologic storage or otherwise utilized in a qualified manner.[29] As mentioned above, in addition to the IRA-driven tax credits, the IIJA provided significant funding for CCS, some of which was allocated to the U.S. Department of Energy, which recently released three funding opportunity announcements and established a new finance program that may help CCS developers reduce costs further.

    B.    Public Opposition.

Despite its upsides, it is possible that CCS projects may draw opposition from the public, which can present serious developmental challenges. To address potential opposition, businesses would be wise to consider how to authentically engage with community stakeholders at the outset of project development to try to avoid contentious permitting processes to the extent possible.

However, should public opposition escalate into formal attempts to prohibit or restrict GS of CO2, businesses should consider whether these efforts may be preempted.[30] Although the SDWA contains a savings clause that provides that “[n]othing in this subchapter shall diminish any authority of a State or political subdivision to adopt or enforce any law or regulation respecting underground injection,”[31] some courts have found local actions to be preempted, as best exemplified in EQT Prod. Co. v. Wender.[32]

In the case, the U.S. Court of Appeals for the Fourth Circuit affirmed a district court’s determination that the West Virginia UIC program established under the West Virginia Water Pollution Control Act (WPCA) preempted a county ordinance that imposed a blanket ban on the disposal of wastewater anywhere within the county.[33]

The Fourth Circuit explained that municipal ordinances that are inconsistent or in conflict with state law are preempted and further concluded that the ordinance’s prohibition was inconsistent with West Virginia’s UIC program because the permanent disposal of wastewater in Class II wells “is licensed and regulated by the state pursuant to a comprehensive and complex permit program.” The court also rejected the county’s argument that the WPCA’s savings clause, which preserves the power of local entities to “suppress nuisances,” permitted the county to broadly designate UIC wells as nuisances and then categorically ban them. The court refused to give the savings clause this broad and less logical reading absent express language and instead interpreted the clause as allowing local regulation that “touch[ed] on the licensed activity.” This had the effect of preserving the county’s right to bring a common law public nuisance action against a state permitted UIC well on a case-by-case basis.

This case suggests that local actions, at least those that have the effect of banning or prohibiting otherwise permitted GS projects, may be preempted by state or federal law.

    C.    Subsurface Pore Space Ownership and Long-Term Liability.

Finally, businesses interested in pursuing GS should consider uncertainties associated with subsurface pore space ownership and long-term liability. Ways to circumvent pore space ownership and liability issues are described below.

First, to effectuate GS of CO2, businesses will need to acquire ownership or control of the pore space in which the CO2 will be stored. This step, in turn, will require determinations as to subsurface ownership rights, which are influenced by whether the pore space is located under federal or non-federal land. For projects located under non-federal land, who owns subsurface pore space will ultimately depend on the language employed in legal instruments related to the property rights at issue and state law. The “majority rule,” however, appears to be that the surface rights owner has the relevant property interest and holders of mineral rights do not, merely by virtue of these rights, have ownership or control of subsurface pore space.[34] States like Wyoming and North Dakota have enacted laws to address uncertainties associated with subsurface pore space ownership by specifying that surface rights owners own the underlying pore space.[35]

With respect to long-term liability, as explained previously, owners and operators must continue to conduct monitoring post-injection for at least 50 years or until the GS project no longer poses an endangerment to USDWs before site closure. In addition to post injection site care and site closure, owners and operators must maintain financial responsibility over emergency and remedial response.[36] Some states like Indiana, Texas, and Louisiana have established processes for transferring long-term liability to the state to alleviate the chilling effect that concerns over long-term liability might have on GS development.[37]

III.    Conclusion

As businesses explore ways to execute their GHG emissions reduction targets, CCS looms large.  Jenner & Block’s Environmental and Workplace Health & Safety, and Transitions in Energy and Climate Solutions Practices not only can help businesses assess whether CCS is a viable option for them, but also can strategically and efficiently navigate each stage of the CCS process to accelerate desired outcomes in a cost-effective manner.

 

[1] For example, one type of CO2 capture, post-combustion capture, typically captures 85% to 95% of the CO2. Angela C. Jones & Ashley J. Lawson, Cong. Rsch. Serv., R44902, Carbon Capture and Sequestration (CCS) in the United States 4 (2022), https://sgp.fas.org/crs/misc/R44902.pdf [hereinafter Oct. 2022 CRS Report].

[2] The United States Department of Energy estimates there to be a total storage capacity of between about 2.6 trillion and 22 trillion metric tons of CO2. Id. at 9. Theoretically, the United States contains enough storage capacity to store all CO2 emissions from large stationary sources, at the current rate of emissions, for centuries. Cong. Rsch. Serv., Injection and Geological Sequestration of Carbon Dioxide: Federal Role and Issues for Congress 3 (2022), https://crsreports.congress.gov/product/pdf/R/R46192[hereinafter Sept. 2022 CRS Report].

[3] For example, according to the Council on Environmental Quality (CEQ), GS of CO2 will “likely [be] needed to deliver on the Paris Agreement goals to hold warming well below 2 degrees Celsius and pursuing efforts to hold warming to 1.5 degrees Celsius, which is necessary to prevent the worst impacts of climate change.” CEQ, Report to Congress on Carbon Capture, Utilization, and Sequestration 6 (2021), https://www.whitehouse.gov/wp-content/uploads/2021/06/CEQ-CCUS-Permitting-Report.pdf [hereinafter CEQ Report].

[4] 75 Fed. Reg. 77,230, 77,235 (Class VI Rule); see also 42 U.S.C. §300h(b)(1)(B); 40 C.F.R. §144.12.

[5] 42 U.S.C. §§300h(a)-(b); 40 C.F.R. Part 145, Subpart B (imposing minimum requirements for permitting, compliance evaluation programs, enforcement authority, and sharing of information).

[6] 42 U.S.C. §300h-1(b)(1); 40 C.F.R. §144.1(f)(2). Indian tribes may, too. 42 U.S.C. §§300h-1(e); 40 C.F.R. Part 145, Subpart E.

[7] See 42 U.S.C. §300h-1; Class VI Rule at 77,241 (explaining that states must demonstrate that their “regulations are at least as stringent as those promulgated by EPA”).

[8] 40 C.F.R. §145.1(g). Though where an approved state program has a greater scope of coverage, the additional coverage is not part of the federally approved program. Id. §145.1(g)(2).

[9] 42 U.S.C. §§300h-1(b)(3), (c).

[10] 40 C.F.R. §144.6.

[11] Notably, Class V wells are used for experimental injection of CO2 (e.g., Department of Energy-supported research wells). See id. §144.81(14). “The construction, operation, or maintenance of any non-experimental Class V GS well is prohibited.” Id. §144.15. By December 10, 2011, owners or operators of experimental technology wells no longer being used for experimental purposes were required to apply for a Class VI permit. Id. §146.81(c). EPA has noted that it “anticipates that few, if any Class V experimental technology well permits will be issued under SDWA for future GS projects.” 76 Fed. Reg. 56,982, 56,983.

[12] 42 U.S.C. §300h-9.

[13] 40 C.F.R. §144.6(b)(2).

[14] Sept. 2022 CRS Report, supra note 2, at 15.

[15] See 40 C.F.R. §144.19(a).

[16] 40 C.F.R. §146.83(a). According to the United States Geological Survey, areas with the most storage potential are the Coastal Plains region, which includes coastal basins from Texas to Georgia, Alaska, and the Rocky Mountains – Northern Great Plains. Which area is the best for geologic carbon sequestration?, USGS, https://www.usgs.gov/faqs/which-area-best-geologic-carbon-sequestration (last visited Dec. 12, 2022).

[17] 40 C.F.R. §§144.6(f), 146.95

[18] See id. §§146.82(a), 146.81.

[19] Id.; id. §146.85(a)(2). Applicants will likely need to hire environmental consultants to provide support at every phase of the GS project.

[20] See id. §144.5.

[21] Id. §§146.93(b), 146.91(c)(1).

[22] Id. §144.12; 42 U.S.C. §300i.

[23] Other states are also moving towards primacy; Texas, Arizona, and West Virginia are in the “pre-application” phase, while Louisiana’s primacy application is being evaluated.

[24] Id. §300h-9.

[25] See CEQ Report, supra note 3, at 30.

[26] Adam Baylin-Stern & Niels Berghout, Is Carbon Capture Too Expensive?, IEA (Feb. 17, 2021), https://www.iea.org/commentaries/is-carbon-capture-too-expensive.

[27] Oct. 2022 CRS Report, supra note 1, at 8, 23.

[28] See CEQ Report, supra note 3, at 25-31. Using marine vessels may also be a feasible option for CO2 transport. Oct. 2022 CRS Report, supra note 1, at 8.

[29] According to CEQ, “[c]arbon utilization is a broad term used to describe the many different ways that captured . . .  CO2 . . . can be used [] to produce economically valuable products or services.” CEQ Report, supra note 3, at 13. The IRA-driven tax credits are an increase from the previous tax credits of $50 and $35, respectively. To qualify for the tax credits, qualified facilities must begin construction by December 31, 2032.

[30] For example, in a recent lawsuit filed against Livingston Parish in the United States District Court for the Middle District of Louisiana, developer Air Products is arguing that the parish’s attempts to restrict its proposed GS project are preempted by state and federal law.

[31] 42 U.S.C. §300h-2(d).

[32] 870 F.3d 322, 332 (2017).

[33] The court refused to decide the question of federal preemption on constitutional avoidance grounds. The court clarified that the question posed by the ordinance’s prohibition was whether the county could effectively “nullify” the Class II permit issued by DEP pursuant to the WPCA. The case did not require the court to consider “the authority of a county to regulate matters that are only related to or associated with a state-permitted activity.”

[34] Cong. Rsch. Serv., RL34307, Legal Issues Associated with the Development of Carbon Dioxide Sequestration Technology (2011), https://www.everycrsreport.com/reports/RL34307.html. Though the mineral rights owner could have priority over uses of the land, including the ability of the surface rights owner to make use of the pore space, that would interfere with the mineral rights holder’s ability to remove minerals.

[35] Wyo. Stat. §§34 -1-152, 34-1-153 (2009); N.D. Cent. Code §47-31-02 et seq. (2009).

[36]  40 C.F.R. §146.85(a).

[37] See CEQ Report, supra note 3, at 43.

EPA Proposes Significant Change to Particulate Matter Air Quality Standards

Torrence_Allison_BLUE
By
Allison A. Torrence 

 

On January 6, 2023, EPA announced that is was issuing a proposed rule to lower the National Ambient Air Quality Standards (“NAAQS”) for fine particulate matter (“PM2.5”), also referred to as soot. The current primary annual NAAQS for PM2.5 is 12 micrograms per cubic meter (µg/m3). EPA’s proposal will accept comments on reducing that annual NAAQS to a level between 9 and 10 µg/m3. EPA is proposing to keep in place the existing secondary annual standard for PM2.5, the primary and secondary 24-hour standards for PM2.5, and the primary and secondary standards for PM10.

The current standards have been in place since 2012, and were most recently reaffirmed by EPA in 2020. Then, in June of 2021, EPA announced it was reconsidering that 2020 decision, starting the process that lead to the current proposed rule. The NAAQS are national air quality goals set by EPA for criteria air pollutants (like particulate matter), at levels that will that will protect the public health with an adequate margin of safety (primary NAAQS) and protect the public welfare (secondary NAAQS). Notably, the NAAQS are set without consideration of cost or technical feasibility of compliance. Section 109(d)(1) of the Clean Air Act requires EPA to review existing NAAQS at 5-year intervals.

Particulate matter emissions come from a variety of sources, including power plants, unpaved roads, construction sites, mobile sources, and other industrial sites. Particulate matter pollution can cause significant health effects, primarily lung and other respiratory disease. Particulate matter also has environmental impacts, including as the primary cause of haze. EPA estimates that if finalized, a lowered primary annual PM2.5 standard at a level of 9 µg/m3, the lower end of the proposed range, would prevent:

  • Up to 4,200 premature deaths per year;
  • 270,000 lost workdays per year; and
  • Result in as much as $43 billion in net health benefits in 2032.

Currently, most of the country is in attainment of the annual PM2.5 NAAQS, with the exception of several counties in California and one county in Pennsylvania. However, that attainment status may change drastically if the standard is lowered by up to 25%. Once the new PM2.5 NAAQS is set, states will have to determine what areas are in attainment or nonattainment, and then update their State Implementation Plans with rules or other plans that will allow the states to maintain attainment or reduce PM2.5 emissions and achieve attainment for any areas that are above the new standards.

PM Map

The proposed rule will be published in the Federal Register in the next few weeks, and EPA will accept public comment for 60 days after publication. EPA also plans to conduct a virtual public hearing on the proposed rulemaking over several days, but the exact timing has not been determined yet. EPA plans to review the public comments and issue a final rulemaking later this year. Additional information about the proposed rule is available on EPA’s website.


EPA and the Army Corps Finalize WOTUS Rule, Again

Torrence_Allison_BLUE
By
Allison A. Torrence 

 

WetlandsOn December 30, 2022, the U.S. Environmental Protection Agency (“EPA”) and the U.S. Army Corps of Engineers (“Army Corps”) announced they had finalized the rule establishing the definition of “waters of the United States” (“WOTUS”) under the Clean Water Act (“CWA”) (the “WOTUS Rule”). This definition is one of the most controversial and highly-litigated aspects of the CWA, if not all environmental law, because it has wide-ranging implications.

The definition of “waters of the United States” is so important because it sets the jurisdictional limits of the CWA. Under the CWA, EPA and the Army Corps have the power to regulate, among other things, the discharge of pollutants to navigable waters from a point source (33 U.S.C. § 1362(12)) and the discharge of dredged or fill material into navigable waters (33 U.S.C. § 1344). “Navigable waters” are defined in the CWA as “the waters of the United States, including the territorial seas.” 33 U.S.C. §1362(7). “Waters of the United States” is not defined further under the CWA, so the agencies have been left to try to craft a definition.

The Army Corps and EPA first proposed a WOTUS definition in 1977 and it has faced revisions and legal challenges ever since. The WOTUS definition has faced Supreme Court review in three previous cases, and is currently pending review in the case of Sackett v. U.S. Environmental Protection Agency, 19-35469, on appeal from the U. S. Court of Appeals for the Ninth Circuit.

The WOTUS definition was revised in 2015 by the Obama Administration to expand the definition and then in 2020 by the Trump Administration to narrow the definition; with both definitions facing swift legal challenges, including vacatur of the Trump rule in 2021. At issue in all of these rules is how to treat non-traditional navigable waters, like ephemeral bodies of water and wetlands.

The current WOTUS Rule goes back to re-establish the pre-2015 definition of WOTUS, and also incorporates guidance from the most recent Supreme Court case, the 2006 case of Rapanos v. U.S., 547 U.S. 715. In Rapanos, the Court did not reach a majority opinion. Justice Scalia authored a plurality opinion, Justice Kennedy wrote a concurring opinion, and Justice Stevens wrote a dissenting opinion. EPA and the Army Corps are incorporating Justice Kennedy’s opinion, which provided that wetlands and other bodies of water that have a “significant nexus” to more traditional navigable waters should be included in WOTUS. Id. at 759. This was in contrast to Justice Scalia’s opinion, which limited WOTUS to “only those wetlands with a continuous surface connection to bodies that are "waters of the United States" in their own right…” Id. at 739-42.

Thus, the new WOTUS Rule includes the following categories of waterbodies: (1) traditional navigable waters (e.g., certain large rivers and lakes); (2) territorial seas; (3) interstate waters; (4) impoundments; (5) tributaries; (6) adjacent wetlands; (7) and additional waters. To determine jurisdiction for tributaries, adjacent wetlands, and additional waters, the WOTUS Rule looks at whether the body of water meets either the “relatively permanent standard” or “significant nexus standard”, as follows:

  • Relatively Permanent Standard is a test that readily identifies a subset of waters that will virtually always significantly affect traditional navigable waters, the territorial seas, or interstate waters. To meet the relatively permanent standard, the waterbodies must be relatively permanent, standing, or continuously flowing waters connected to traditional navigable waters or waters with a continuous surface connection to such relatively permanent waters or to traditional navigable waters, the territorial seas, or interstate waters.
  • Significant Nexus Standard is a test that clarifies if certain waterbodies, such as tributaries and wetlands, are subject to the Clean Water Act based on their connection to and effect on larger downstream waters that Congress fundamentally sought to protect. A significant nexus exists if the waterbody (alone or in combination) significantly affects the chemical, physical, or biological integrity of traditional navigable waters, the territorial seas, or interstate waters.

The WOTUS rule will be published in the Federal Register in the next few days, and will be effective 60 days after publication. Legal challenges will surely follow, and its future longevity will likely be determined by the Supreme Court in the Sackett case. EPA had tried to avoid Supreme Court review based on the fact that it was working on a revised rule, but that argument was not successful. Therefore, it is likely that the Court will go forward and make a ruling on WOTUS, potentially undermining the basis for the current WOTUS rule. As always, we will keep you updated on key developments in the Corporate Environmental Lawyer Blog.

More information about the new WOTUS Rule is available on EPA’s website.


California Adopts Non-Emergency COVID-19 Prevention Workplace Regulations

Robertson  Daniel   Feltman-Frank_Arie  By Daniel L. Robertson and Arie Feltman-Frank, Associate Attorneys

On December 15, 2022, the California Occupational Safety & Health Standards Board (Board) adopted COVID-19 prevention non-emergency COVID-19 Workplace Safety  workplace standards in a 6-1 vote. The standards will be in Title 8, Division 1, Chapter 4, Subchapter 7, of California’s regulations and, if approved by the Office of Administrative Law, will take effect in January 2023. The standards will sunset two years following their effective date, except for certain recordkeeping requirements that will remain in effect for three years.

Subchapter 7, titled “General Industry Safety Orders,” establishes minimum occupational safety and health standards that generally apply to all places of employment in California. In response to the COVID-19 outbreak, the Board previously approved emergency temporary standards (ETS) on COVID-19 prevention starting in November 2020, which were revised in June 2017, January 2022, and May 2022. However, the May 2022 ETS is set to expire on December 31, 2022.

Notable portions of the adopted non-emergency standards are summarized below.

    • Prevention Program: Employers are no longer required to maintain a standalone COVID-19 Prevention Plan but must still address COVID-19 in their written Injury and Illness Prevention Programs or other standalone documents that include measures to address COVID-19 transmission in the workplace. Further, employers are required to review applicable state and local health department guidance when determining measures to prevent and address COVID-19 transmission.

    • Screening and Exclusion: Employers will no longer have to perform daily screenings of employees, whether through questionnaires or otherwise. Employees instead are encouraged to report their own symptoms and stay home if ill. Time periods for exclusion have been shortened, and employees who are deemed close contacts do not necessarily have to be excluded if they test negative and meet certain other requirements.

    • Employee Accommodations: In perhaps the most contested development, employers will no longer have to provide paid time off to infected employees or close contacts ordered to stay home. Instead, those employees must rely on other existing benefits if they are unable to work due to COVID-19 infection or isolation. Employers must continue to provide respirators to employees upon requests, and employees must still wear masks at work for at least 5 days if exposed. Companies experiencing outbreaks, defined as three or more cases in a 14-day period, must make testing available to exposed employees immediately and provide tests twice a week.

    • Notice and Timing: Notice rules now only require notice to close contacts “as soon as possible” while simplifying the notice contents. However, employers should remain mindful of similar applicable rules that currently still require that the notice be given within one business day. Outbreaks no longer require “no new cases” to conclude and instead only require “one or fewer” new cases over a two-week period. A major outbreak, defined as 20 cases in a 30-day period, must be reported to the California Division of Occupational Safety and Health. While there will no longer be a requirement to report outbreaks to local public health agencies, employers should still be mindful of other local standards for reporting.

    • Close Contacts and Testing: The “close contact” definition continues to follow that used by the California Department of Public Health (CDPH), which defines a close contact depending on the size of the workspace and regardless of the use of face coverings.

      • A close contact occurs in an indoor workspace with floor space of 400,000 cubic feet or less when someone shares the same indoor airspace as an infected person for a cumulative total of 15 minutes or more over a 24-hour period during the infectious period.
      • A close contact occurs for larger indoor workspaces when someone is within 6 feet of the infected person for a cumulative total of 15 minutes or more during a 24-hour period during the infectious period.

Notably, this standard affirmatively states that any future amendments to the CDPH definition will take precedent over the Board’s adopted definition. Employers must also follow applicable CDPH guidance to improve ventilation and filtration. Further, employers will now only have to make testing available at no cost to employees who are considered close contacts of an infected coworker, versus previous requirements that testing be made available to all symptomatic employees.

  • Infectious Period: This definition also tracks that of CDPH and states that a person is considered infectious for two days prior to symptoms and 10 days after unless they test negative from the fifth day onward. For an asymptomatic person, these same timeframes apply based on the date of the first positive test.

The Board’s news release can be read here and the text of the adopted standards is available here. We will continue to monitor COVID-19 and other workplace health and safety developments in the Corporate Environmental Lawyer.

 

EPA Proposes Rule to Enhance Reporting of PFAS Data to the Toxics Release Inventory

Robertson  Daniel

By:  Daniel L. Robertson, Associate Attorney

EPA Image2On December 5, 2022, the United States Environmental Protection Agency (USEPA) proposed a rule eliminating an exemption that currently allows facilities to avoid reporting the use of small concentrations of Per- and polyfluoroalkyl substances (PFAS).

PFAS chemicals, commonly referred to as “forever chemicals” due to their longevity, are commonly used in consumer products and industrial processes. The Biden administration has prioritized addressing PFAS as they apply to public health, as outlined in the USEPA’s PFAS Strategic Roadmap released in October 2021. That roadmap sets forth timelines by which the USEPA intends to act on various policies impacting public health, the environment, and accountability.

The 2020 National Defense Authorization Act (NDAA) added certain PFAS to the list of chemicals covered by the Toxics Release Inventory (TRI) for the 2021 reporting year. Under the current provisions, however, facilities that report to the TRI can disregard de minimis concentrations of TRI-listed PFAS in mixtures or trade name products (below 1% concentration, except for Perfluorooctanoic acid which is set at 0.1%).

The USEPA’s action follows a press release from earlier this year wherein the Agency expressed concern at the low number of reporting facilities, seemingly as a result of the existing exemption. The current proposal will add PFAS subject to reporting requirements under the Emergency Planning and Community Right-to-Know Act (EPCRA) and the Pollution Prevention Act (PPA) to the list of Lower Thresholds for Chemicals of Special Concern, eliminating the de minimis reporting exemption. Due to the low concentration of PFAS used in many products, the USEPA contends removing the existing “reporting loophole” will increase data collected for PFAS, thereby providing a clearer picture of PFAS releases and waste management quantities.

The proposal will also remove the de minimis exemption for purposes of the Supplier Notification Requirements for all listed Chemicals of Special Concern, which includes chemicals like lead and mercury. The USEPA states that doing so will ensure purchasers are informed of the presence of these chemicals in the products they purchase.

Parties that may be impacted by the proposal are those who manufacture, process, or otherwise use listed PFAS or any chemicals listed under 40 CFR 372.28. Anyone wishing to comment on the proposal must submit comments by February 2, 2023 through the Federal eRulemaking Portal using docket identification number EPA–HQ–TRI–2022–0270.

In related news, the USEPA on December 6, 2022 released a guidance memorandum providing states with directions on how to use the National Pollutant Discharge Elimination System (NPDES) permit program to protect against PFAS. According to the USEPA’s press release, the guidance “recommends that states use the most current sampling and analysis methods in their NPDES programs to identify known or suspected sources of PFAS and to take actions using their pretreatment and permitting authorities, such as imposing technology-based limits on sources of PFAS discharges.”

We will continue to monitor these and other federal PFAS developments on the Corporate Environmental Lawyer blog.


U.S. EPA Adopts Expanded Definition of PFAS on Its Drinking Water Contaminants List

Siros By Steven M. Siros, Chair, Environmental and Workplace Health & Safety Law Practice

                                                                                                                                                                                                                               
Drinking WaterOn November 2, 2022, U.S. EPA released the pre-publication version of the fifth contaminant candidate list (CCL 5) containing 66 chemicals, 12 microbes, and three chemical groups (per- and polyfluoroalkyl substances (PFAS), cyanotoxins, and disinfection byproducts).  Under the Safe Drinking Water Act (SDWA), every five years, U.S. EPA is obligated to publish a list of unregulated contaminants and contaminant groups that are known or anticipated to occur in public water systems and that may require regulation.  Once on the CCL, U.S. EPA will compile and evaluate additional data and then proceed to make regulatory determinations for those contaminants that U.S. EPA determines present the greatest public health concerns.  A regulatory determination is a formal decision by U.S. EPA that is the first step in developing a national primary drinking water regulation for a specific contaminant. For example, U.S. EPA recently made regulatory determinations for perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA) and is in the process of working on developing drinking water standards for these contaminants.

With respect to the PFAS chemical group included in CCL 5, U.S. EPA defined PFAS as a class of chemicals with the chemical structure R-(CF2)-C(F)(R’),R” where the CF2 and the CF moieties are saturated carbons and none of the R groups can be hydrogen.  The definition triggered opposition from both industry and environmental groups.  Industry groups opposed the class approach, noting that not all PFAS pose the same risks and that adopting a class approach can lead to the regulation of useful and necessary products.  Environmental group, on the other hand, sought a broader definition that would include any compound containing at least one fully fluorinated methyl or methylene carbon atom. 

U.S. EPA specifically acknowledged that this definition as limited to the CCL 5 and should not be reviewed as representing U.S. EPA’s definition of PFAS for all regulatory programs.  However, U.S. EPA does seem more sympathetic to the concerns raised by the environmental groups as evidenced by the following excerpt from the pre-publication notice: 

EPA is also aware there may be emerging contaminants such as fluorinated organic substances that may be used in or are a result of the PFAS manufacturing process (e.g., starting materials, intermediates, processing aids, by-products and/or degradates) that do not meet the structural definition. Those emerging PFAS contaminants or contaminant groups may be known to occur or are anticipated to occur in public water systems, and which may require regulation. If emerging PFAS contaminants or contaminant groups are identified, EPA may consider moving directly to the regulatory determination process or consider listing those contaminants for future CCL cycles. EPA will continue to be proactive in considering evolving occurrence and health effects data of these emerging contaminants.

We will continue to track U.S. EPA’s ongoing efforts to regulate PFAS in the various environmental media and provide timely updates on the Corporate Environmental Lawyer blog.


         


New OEHHA Proposition 65 Acrylamide Warning Label Does Little to Resolve Pending First Amendment Challenges

Robertson  Daniel Robertson  DanielBy Daniel L. Robertson, Associate Attorney, and Steven M. Siros, Chair, Environmental and Workplace Health & Safety Law Practice


The California Office of Administrative Law (OAL) recently approved a revised Proposition 65 warning label requirement for the use of acrylamide in food and beverages. California’s Office of Environmental Health Hazard Assessment (OEHHA), the revision’s proponent, contends the language will resolve the First Amendment claims being asserted by the California Chamber of Commerce (CalChamber) in federal district court in California.  Following OAL’s approval, OEHHA’s “safe harbor warning” for acrylamide will become operative on January 1, 2023.

Under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as Proposition 65 (Prop. 65), businesses are required to provide warnings to consumers about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm.  As of February 25, 2022, almost 1,000 chemicals are subject to this requirement and one of these chemicals is acrylamide.

Acrylamide can form through a natural chemical reaction in high-temperature cooking processes such as frying, roasting, and baking, and is commonly found in food products such as coffee, grain and potato products.  Studies indicate that it has likely always been present in foods cooked at high temperatures.

In 2019, CalChamber sued the California Attorney General for violating its members’ First Amendment rights against compelled speech by requiring food products containing acrylamide to include a Prop. 65 cancer warning.  In its complaint, CalChamber alleges that acrylamide was identified as a carcinogen solely on the basis of laboratory animal studies, and that its members will be required to convey “to consumers the false and misleading message that consuming the products will increase consumers’ risk of cancer, even though there is no reliable evidence that exposure to dietary acrylamide increases the risk of cancer in humans.”  The Council for Education and Research on Toxics (CERT) intervened in the matter to defend the Prop. 65 acrylamide warning.

In March 2021, the court issued a preliminary injunction that barred new Prop. 65 acrylamide lawsuits from being filed during the pendency of the litigation, noting that the Attorney General had not shown that the warning requirements were “purely factual and uncontroversial.”  CERT appealed the court’s ruling and on March 17, 2022, the Ninth Circuit Court of Appeals upheld the lower court’s ruling, thereby reinstating the district court’s preliminary injunction.  The Ninth Circuit specifically acknowledged statements by scientific bodies such as the Food and Drug Administration, American Cancer Society, the National Cancer Institute, and even the State of California to emphasize the “robust disagreement by reputable scientific sources” of whether acrylamide can be linked to cancer in humans. On October 26, 2022, the Ninth Circuit denied CERT’s petition for rehearing en banc.

In direct response to CalChamber’s First Amendment challenge, on September 17, 2021, OEHHA issued a Notice of Proposed Rulemaking that proposed the following “safe harbor warning” for acrylamide in food and beverages:

Consuming this product can expose you to acrylamide, a probable human carcinogen formed in some foods during cooking or processing at high temperatures. Many factors affect your cancer risk, including the frequency and amount of the chemical consumed. For more information including ways to reduce your exposure, see www.P65Warnings.ca.gov/acrylamide.  

Notwithstanding OEHHA’s efforts to respond to CalChamber’s First Amendment challenge, the new “safe harbor warning” will not stop the ongoing litigation in that CalChamber claims that this new warning language continues to violate its members’ First Amendment rights.  As such, the CalChamber lawsuit will continue to move forward and any subsequent ruling by the court will provide additional clarification on potential First Amendment limitations on Prop. 65 warnings. 

We will continue tracking Proposition 65 developments through the Corporate Environmental Lawyer.  

Proposed Fugitive Emissions Amendments Bring Clarity to Major Source Permitting Requirements

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By:  Daniel Robertson

 

 

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On October 14, 2022, the United States Environmental Protection Agency (USEPA) published proposed revisions to the Clean Air Act’s New Source Review (NSR) permitting regulations. The proposal seeks to repeal specific 2008 Clean Air Act (Act) amendments and require all existing major stationary sources to include fugitive emissions when determining whether a change at the source constitutes a major modification subject to NSR permitting requirements.

The USEPA’s NSR program requires certain stationary sources to obtain air pollution permits prior to construction. The goal of the program is to ensure that air quality does not worsen in areas where the air is considered unhealthy (known as “non-attainment areas”) or is not significantly degraded in areas where the air is considered clean (“attainment areas”).

A new source construction or modification of an existing source that increases emissions of regulated NSR pollutants above NSR regulation thresholds is subject to NSR “major source” requirements. How stringent these requirements are depends on whether the facility falls in an attainment or non-attainment area and what NSR permitting program applies. A major source in an attainment area is subject to the Prevention of Significant Deterioration (PSD) program and may be required to perform air quality and impact analysis, as well as install Best Available Control Technology. A major source in a non-attainment area is subject to the Nonattainment NSR program and may be required to perform emission offsets and meet Lowest Achievable Emission Rates. Both programs require opportunities for public involvement.

“Fugitive emissions” are emissions that cannot reasonably pass through a stack, chimney, vent, or similar opening (e.g. windblown dust from surface mines or volatile organic compounds emitting from leaking pipes). Whether a source must consider fugitive emissions for modification purposes has had an inconsistent history dating back to 1978, when the USEPA first established the foundations for the NSR program. Under the recent 2008 permitting amendments, only facilities in certain industrial source categories were required to include fugitive emissions when determining whether a change was a major modification. These source categories include petroleum refineries, large fossil fuel-fired steam electric plants, and Portland cement plants, among others. Sources in other industrial source categories, therefore, did not have to count fugitive emissions towards the major modification thresholds.

Section 111(a)(4) of the Act defines “modification” as “any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.” The current USEPA proposal interprets Section 111(a)(4) of the Act “to require that all sources consider increases in all types of emissions (including fugitive emissions) in determining whether a proposed change would constitute a major modification.” The USEPA contends that its proposal will “affirm its longstanding position that all existing major sources (regardless of source category) must include fugitive emissions when determining if a modification is major.”

While the 2008 amendments only applied fugitive emission calculations to certain sources, a petition for reconsideration and multiple administrative stays of applicable provisions of those amendments mean the USEPA has effectively been instituting the current proposal since 2009. The proposed revisions will release the stay on specified 2008 provisions and then repeal them, a move that the USEPA states will “bring closure to the reconsideration proceeding” and “have a limited practical impact” on regulated entities given the ongoing stay.

The USEPA did not receive any requests for a public hearing prior to the October 19, 2022 request cutoff date. However, interested parties can still submit comments on the proposal through December 13, 2022. The USEPA specifically seeks “comments from stakeholders on the practical impact of the proposed action, including the scope of overall programmatic impacts (e.g. how many sources might be affected).” We will continue to monitor permitting developments on the Corporate Environmental Lawyer.

 


Governor Newsom Vetoes PFAS Reporting Bill But Signs Into Law Legislation Banning PFAS in Cosmetics and Textiles

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By Arie Feltman-Frank

 

On September 29, 2022, Governor Gavin Newsom vetoed Assembly Bill No. 2247. The bill would have required manufacturers of per- and polyfluoroalkyl substances (PFAS) or products or product components containing intentionally added PFAS to register the PFAS or products or product components on a publicly accessible data collection interface, along with other information. According to the bill’s findings and declarations, the registration requirement would, among other things, provide California with timely information that would help the state characterize the threats of further PFAS contamination and human exposure in California and develop best practices for addressing the threats in an expeditious manner.

“Manufacturer” was defined to include, in addition to manufacturers, importers of PFAS or products or product components containing intentionally added PFAS, persons or entities whose names appear on product labels, and persons or entities for whom the PFAS or products or product components are manufactured or distributed. Registration would have been required on or before July 1, 2026, and on or before July 1 of each year thereafter. The registration requirement would not have applied to certain products regulated by federal law, such as drugs, medical devices and equipment, dietary supplements, and certain products intended for animals.

In Governor Newsom’s veto message, he explained that the bill may be premature given that EPA is currently undergoing rulemaking to require reporting of PFAS and noted cost concerns.

On the same day as the veto, Governor Newsom approved both Assembly Bill No. 2771, which bans intentionally added PFAS in cosmetic products, and Assembly Bill No. 1817, which bans regulated PFAS in textile articles.

            Cosmetic Products

Assembly Bill No. 2771 will, beginning January 1, 2025, prohibit the “manufacture, sale, delivery, holding, or offering for sale in commerce any cosmetic product that contains intentionally added” PFAS. Cal. Health & Safety Code § 108981.5. “Cosmetic product” is defined as “an article for retail sale or professional use intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance.” Id. § 108982(a). “Intentionally added PFAS” means either “PFAS that a manufacturer has intentionally added to a product and that have a functional or technical effect on the product” or “PFAS that are intentional breakdown products of an added chemical.” Id. § 108982(c).

            Textile Articles

 Assembly Bill No. 1817 states that, “commencing January 1, 2025, no person shall manufacture, distribute, sell, or offer for sale in the state any new, not previously used, textile articles that contain regulated . . . PFAS.” Cal. Health & Safety Code § 108971(a)(1). “Textile” is defined as “any item made in whole or part from a natural, manmade, or synthetic fiber, yarn, or fabric,” but the definition does not include “single-use paper hygiene products.” Id. § 108970(h).

“Textile Articles” are defined as “textile goods of a type customarily and ordinarily used in households and businesses,” but there are various identified exemptions. Id. § 108970(i). Regulated PFAS means either “PFAS that a manufacturer has intentionally added to a product and that have a functional or technical effect in the product” or the presence of PFAS in a product or product component, measured in total organic fluorine, at or above 100 parts per million (commencing January 1, 2025) and 50 parts per million (commencing January 1, 2027). Id. § 108970(g).

The enacted bill further provides that manufacturers “shall use the least toxic alternative, including alternative design, when removing regulated . . . PFAS in textile articles.” Id. § 108971(b). Lastly, it requires manufacturers to provide persons that offer the product for sale or distribution in California a certificate of compliance and protects distributers or retailers (that are not also manufacturers) that rely in good faith on these certificates from being held in violation of the chapter. Id. § 108971(c), (d).

The prohibition against regulated PFAS in textile articles does not apply to outdoor apparel for severe wet conditions until January 1, 2028, but commencing January 1, 2025, such apparel must be accompanied by a disclosure statement “Made with PFAS chemicals,” including for online listings. Id. § 108971(a)(2).

These new laws now join other legal developments in California that aim to regulate PFAS in consumer products. For example, Assembly Bill No. 1200 and Assembly Bill No. 652, both approved on October 5, 2021, address PFAS in food packaging and cookware and children’s products, respectively. As states like California continue to move forward with legal developments aimed at addressing PFAS, so is the federal government. We will continue tracking PFAS developments in the Corporate Environmental Lawyer

 

A Risky Dance: When Emerging Contaminants Comingle With CERCLA Hazardous Substances

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By Arie Feltman-Frank EPA Image

Contaminants of Emerging Concern (CECs), chemicals that may be harmful to human health or the environment but that are not yet regulated, are capturing the public’s attention. For example, EPA just proposed to list perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), two chemicals in the per- and polyfluoroalkyl substances (PFAS) group that are pervasive in the environment and may be harmful to human health, as Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) hazardous substances. EPA will be accepting comments on the proposed rule until November 7, 2022, and, according to the PFAS Strategic Roadmap, a final rule is expected in Summer 2023.

To fill the federal void, some states have been addressing PFAS in their own cleanup programs. For example, in 2016, the New York Department of Environmental Conservation added PFOA and PFOS to New York’s list of hazardous substances. More recently, Washington’s Department of Ecology concluded that PFAS are hazardous substances under Washington’s Model Toxics Control Act.

PFOA and PFOS may just be the beginning. According to the PFAS Strategic Roadmap, EPA is developing an Advance Notice of Proposed Rulemaking to seek input on whether to designate other PFAS as CERCLA hazardous substances. Ultimately, as our understanding of CECs advances, new chemicals may become designated as “hazardous” under CERCLA or state cleanup programs.

But before CECs become CERCLA hazardous substances, if they ever do, where do they fit into the CERCLA liability framework?

CERCLA uses the term “hazardous substance” and the term “pollutant or contaminant.” A chemical is a CERCLA “hazardous substance” if it falls within the purview of CERCLA §101(14), 42 U.S.C. §9601(14). That section provides that “hazardous substance” means, inter alia, any substance designated as hazardous under or pursuant to various identified federal environmental law provisions. See 42 U.S.C. §9601(14). The CERCLA list of hazardous substances can be found at 40 C.F.R. §302.4. The term “pollutant or contaminant” is broader. It includes, but is not limited to:

any substance . . . which, after release . . . and upon exposure, ingestion, inhalation, or assimilation into any organism, either directly . . . or indirectly . . . will or may reasonably be anticipated to cause death, disease, behavioral abnormalities, cancer, genetic mutation, physiological malfunctions (including malfunctions in reproduction) or physical deformations, in such organisms or their offspring.

See 42 U.S.C. §9601(33). CECs, if and until they become CERCLA hazardous substances, may become pollutants or contaminants. Indeed, in EPA’s PFAS Action Plan, the Agency noted that PFOA and PFOS are considered pollutants or contaminants, giving the Agency the authority to investigate releases or threats of releases of PFOA and/or PFOS at sites pursuant to CERCLA §104(e), 42 U.S.C. §9604(e).

The distinction between CERCLA hazardous substances and all else, including pollutants or contaminants, is important because CERCLA liability is triggered by the existence of a “hazardous substance” at a site, nothing else. See 42 U.S.C. §9607(a)(1)-(4); Colorado v. United States, 867 F. Supp. 948, 951 (D. Colo. 1994); Jastram v. Phillips Petroleum Co., 844 F. Supp. 1139, 1141 (E.D. La. 1994); United States v. United Nuclear Corp., 814 F. Supp. 1552, 1557 (D.N.M. 1992); Eagle-Picher Indus. v. United States, 759 F.2d 922, 932 (D.C. Cir. 1985).

Though once a hazardous substance is present, potentially responsible parties (PRPs) are liable for “all costs of removal or remedial action” incurred by the U.S. government, states, and Indian tribes not inconsistent with the national contingency plan (NCP) and “any other necessary costs of response” incurred by any other person consistent with the NCP. 42 U.S.C. §9607(a)(4)(A)-(B). Removal and remedial actions are meant to be directed at hazardous substances. See id. §§9601(23), (24); Colorado, 867 F. Supp. at 951-52 (explaining that “[t]he definitions clearly focus on actions taken in relation to hazardous substances”). However, their statutory definitions suggest that they may, in limited circumstances, include actions targeted at “associated” materials, including pollutants or contaminants, too. See id. at 952.

For example, “removal” is defined to include “such actions as may be necessary taken in the event of the threat of release of hazardous substances into the environment.” 42 U.S.C. §9601(23) (emphasis added). It is also defined to include “other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment” from a release or threat of release of a hazardous substance. Id. (emphasis added). Moreover, “remedial action” is defined to include the “cleanup of released hazardous substances and associated contaminated materials” and the “offsite transport and offsite storage, treatment, destruction, or secure disposition of hazardous substances and associated contaminated materials.” Id. §9601(24) (emphasis added).

So, the question then becomes: When can “all costs of removal or remedial action” or “any other necessary costs of response” include within it the costs associated with addressing CECs at a site, thus making PRPs liable under CERCLA for their cleanup?

Let us consider three different scenarios.

First, there may be a site where only CECs (no CERCLA hazardous substances) are present. In this scenario, there is no CERCLA liability. In fact, a major implication of designating a chemical as a CERCLA hazardous substance is that the presence of the chemical, on its own, will trigger CERCLA liability. However, it is important to note that liability may be imposed by a state cleanup program if the CECs are hazardous substances under state law.  

Second, there may be a site where there are CECs and hazardous substances in geographically distinct areas. Here, there will be no CERCLA liability for the geographic area containing the CECs, but there will be CERCLA liability for the geographic area containing the hazardous substances. For example, in Colorado v. United States, Colorado sought to recover response costs incurred in connection with the Rocky Mountain Arsenal cleanup and litigation, including costs incurred in responding to the release of diisopropyl methylphosphonate (DIMP). 867 F. Supp. at 951. Colorado and the United States stipulated that DIMP is a pollutant or contaminant, not a hazardous substance. Id. Nonetheless, Colorado argued that it could recover its DIMP response costs because, as a PRP, the United States was liable for “all costs.” Id. The United States argued back that a PRP is not liable for response costs associated with “a discrete action that does not purposefully address hazardous substances . . . simply because it is part of a larger cleanup program” at a site. Id. The court agreed, concluding that the language in §9607(a)(4)(A), when interpreted in accordance with the definitions in §§9601(23) and (24), dictates that response costs are available only when the associated response actions are directed at hazardous substances. Id. at 952. But as mentioned above, for the geographic area containing the CECs, liability may be imposed by a state cleanup program if the CECs are hazardous substances under state law.

Third, there may be a site where CECs and hazardous substances are comingled. Here, due to the comingling, response actions directed at the hazardous substances will necessarily require addressing the “associated” CECs and therefore be considered part of “all costs of removal or remedial action” or “any other necessary costs of response.” Thus, in this third scenario, PRPs will likely be liable for the cleanup of the CECs, too. Cf. United Nuclear Corp., 814 F. Supp. at 1558 (treating mine tailings that contained some hazardous substances in trace amounts as hazardous substances rather than pollutants or contaminants). If the CECs remain onsite, and if they are considered pollutants or contaminants, absent waiver, the CECs will have to be cleaned up pursuant to federal standards and more stringent promulgated state standards that are “legally applicable” to them or “relevant and appropriate under the circumstances” of their release or threatened release, known as ARARs. 42 U.S.C. §9621(d)(2)(A). If there are no ARARs, advisories, criteria, or guidance may be “considered” when selecting the remedy. 40 C.F.R. §300.400(g)(3).

In summary, PRPs should pay close attention to the presence of CECs at sites and their spatial relationship with hazardous substances, if any, as this will affect their CERCLA liability and potential courses of action. We will continue tracking CEC and federal and state cleanup developments in the Corporate Environmental Lawyer.

New OEHHA Proposition 65 Acrylamide Warning Label Does Little to Resolve Pending First Amendment Challenges

P65 Warning LabelBy Daniel L. Robertson, Associate Attorney, and Steven M. Siros, Chair, Environmental and Workplace Health & Safety Law Practice

On September 16, 2022, California’s Office of Environmental Health Hazard Assessment (OEHHA) submitted to the California Office of Administrative Law (OAL) a revised Proposition 65 warning label requirement for the use of acrylamide in food and beverages that OEHHA claims will resolve the First Amendment claims being asserted by the California Chamber of Commerce (CalChamber) in federal district court in California.  OAL is expected to approve OEHHA’s “safe harbor warning” for acrylamide by the end of October 2022.     

Under California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly referred to as Proposition 65 (Prop. 65), businesses are required to provide warnings to consumers about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm.  As of February 25, 2022, almost 1,000 chemicals are subject to this requirement and one of these chemicals is acrylamide. 

Acrylamide can form through a natural chemical reaction in high-temperature cooking processes such as frying, roasting, and baking, and is commonly found in food products such as coffee, grain and potato products.  Studies indicate that it has likely always been present in foods cooked at high temperatures.

In 2019, CalChamber sued the California Attorney General for violating its members’ First Amendment rights against compelled speech by requiring food products containing acrylamide to include a Prop. 65 cancer warning.  In its complaint, CalChamber alleges that acrylamide was identified as a carcinogen solely on the basis of laboratory animal studies, and that its members will be required to convey “to consumers the false and misleading message that consuming the products will increase consumers’ risk of cancer, even though there is no reliable evidence that exposure to dietary acrylamide increases the risk of cancer in humans.”  The Council for Education and Research on Toxics (CERT) intervened in the matter to defend the Prop. 65 acrylamide warning.

In March 2021, the court issued a preliminary injunction that barred new Prop. 65 acrylamide lawsuits from being filed during the pendency of the litigation, noting that the Attorney General had not shown that the warning requirements were “purely factual and uncontroversial.”  CERT appealed the court’s ruling and in March 2022, the Ninth Circuit Court of Appeals upheld the lower court’s ruling, thereby reinstating the district court’s preliminary injunction.  The Ninth Circuit specifically acknowledged statements by scientific bodies such as the Food and Drug Administration, American Cancer Society, the National Cancer Institute, and even the State of California to emphasize the “robust disagreement by reputable scientific sources” of whether acrylamide can be linked to cancer in humans.

In direct response to CalChamber’s First Amendment challenge, on September 17, 2021, OEHHA issued a Notice of Proposed Rulemaking that proposed the following “safe harbor warning” for acrylamide in food and beverages:

Consuming this product can expose you to acrylamide, a probable human carcinogen formed in some foods during cooking or processing at high temperatures. Many factors affect your cancer risk, including the frequency and amount of the chemical consumed. For more information including ways to reduce your exposure, see www.P65Warnings.ca.gov/acrylamide.  

Notwithstanding OEHHA’s efforts to respond to CalChamber’s First Amendment challenge, the new “safe harbor warning” will not stop the ongoing litigation in that CalChamber claims that this new warning language continues to violate its members’ First Amendment rights.  As such, the CalChamber lawsuit will continue to move forward and any subsequent ruling by the court will provide additional clarification on potential First Amendment limitations on Prop. 65 warnings. 

We will continue tracking Proposition 65 developments through the Corporate Environmental Lawyer blog.  Regardless of OAL’s decision on the latest regulatory proposal, the current action and similar litigation relating to glyphosate establish a litigation roadmap for businesses that may otherwise be subject to Prop. 65 requirements based on disputed science.

Jenner & Block Wishes Bon Voyage to Gay Sigel as She Starts Her Next Adventure with the City of Chicago

G. Sigel SuperwomanAs Gay Sigel walked through the doors at One IBM Plaza in Chicago, fresh out of law school and ready to launch her career as an attorney at Jenner & Block, she could not have envisioned the tremendous impact she would have on her clients, her colleagues, and her community over the next 39 years. Gay started her legal career as a general litigator, but Gay and Bob Graham were quick to realize how the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was creating a new and exciting area of the law that was increasingly important for the firm’s clients: Environmental Law. Gay and Bob saw an opportunity to specialize in that area and founded Jenner & Block’s Environmental Health and Safety Practice. Gay has been an ever-present force in the EHS community ever since.

Over her 39-year career at Jenner & Block, Gay has worked on some of the most significant environmental cases in the country for clients ranging from global Fortune 50 corporations to environmental organizations to individuals. For more than a decade, she taught environmental law at Northwestern University, helping shape the next generation of environmental lawyers. She has worked on issues of global impact, like those affecting climate change, issues of local impact like those related to combined sewer overflows to the Chicago River, and issues of individual impact like those involving employee safety and health. No matter the subject, Gay has always been a tireless advocate for her clients. We often describe her as the Energizer Bunny of environmental lawyers: she is the hardest working attorney we have ever met. 

Gay’s true passion is to make this world a better, more just place for others. So, throughout her career as an environmental, health, and safety lawyer, Gay has devoted her time, energy, and emotional resources to innumerable pro bono cases and charitable and advocacy organizations. Her pro bono work includes successfully protecting asylum applicants, defending criminal cases, asserting parental rights, and defending arts organizations in OSHA matters. Among her many civic endeavors, Gay was a founding member of the AIDS Legal Council of Chicago (n/k/a as the Legal Council for Health Justice); she was the Secretary and active member of the Board of Directors for the Chicago Foundation for Women; and she was on the Board of the New Israel Fund. Gay continues to promote justice wherever she sees injustice, including as an advocate for women’s rights, particularly for women’s reproductive rights.

In both her environmental, health, and safety practice as well as her pro bono and charitable work, Gay is a tremendous mentor to younger (and even older) attorneys. She is curious, committed, exacting, fearless, and demanding (though more of herself than of others). We all give Gay much credit for making us the lawyers we are today.

Gay is leaving Jenner & Block to embark on her next adventure. She is returning to public service as Assistant Corporation Counsel Supervisor with the City of Chicago's Department of Law where she will be focusing on environmental issues. The City and its residents will be well served as Gay will bring her vast experience and unparalleled energy to work tirelessly to protect the City and its environment. We will miss working with and learning from Gay on a daily basis, but we look forward to seeing the great things she will accomplish for the City of Chicago. We know we speak for the entire firm as we wish Gay bon voyage—we will miss you! 

Steven M. Siros, Allison A. Torrence, Andi S. Kenney

EHS

U.S. EPA Offers Roadmap for Environmental Justice-Based Permit Denials

Linkedin_Steven_Siros_3130By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

EPA logoOn August 16, 2022, U.S. EPA released its Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (FAQ) that provides guidance to federal, state, and local environmental permitting entities on integrating environmental justice (EJ) and civil rights into relevant environmental permitting decisions.  Lilian Dorka, director of U.S. EPA’s External Civil Rights Compliance Office (ECRCO), emphasized that the information in the FAQ isn’t new and that environmental permitting decisions are always supposed to consider the EJ and civil rights impacts of the permit.  Rather, according to Director Dorka, the FAQ is an effort by U.S. EPA to compile existing information on integrating EJ and civil rights into the permitting process into a single document. She also noted that this is an interim document and EPCRO is working on separate guidance document to provide further direction on how permitting entities should consider civil rights in permitting decisions, including Title VI’s disparate impact analysis. 

One of the more interesting parts of the FAQ is the following paragraph:

If there are no mitigation measures the permitting authority can take, whether within or outside the permitting program, that can address the disparate impacts, and there is no legally sufficient justification for the disparate impacts, denial of the permit may be the only way to avoid a Title VI violation. Whether denial of a permit is required to avoid a Title VI violation is a fact-specific determination that would take into account an array of circumstances, including whether the facility will have an unjustified racially disproportionate impact, as well as the less discriminatory alternatives available. 

This is one of the first times that U.S. EPA has clearly articulated its position that a permit can be denied solely because it may violate Title VI although the occasions when a permit has been denied on this basis have historically been far and few between. However, a recent example of how EJ and civil right issues can impact the permitting process is currently playing out in Chicago where the City of Chicago denied a permit for a metal recycling facility following receipt of a letter from U.S. EPA noting significant civil rights concerns associated with the facility’s operations.  Notwithstanding that the Illinois Environmental Protection Agency had already issued the facility an air permit allowing the facility to commence operations,  the City of Chicago denied the facility an operating permit based primarily on the purported disparate impact of the facility on disadvantaged communities.  The City’s permit denial is currently being challenged in an administrative proceeding. 

The FAQs are clearly consistent with U.S. EPA’s ongoing efforts to integrate President Biden’s Justice40 Initiative that sets a goal of ensuring that 40% of the overall benefits of certain federal investments flow to disadvantaged communities. We will continue to track U.S. EPA’s efforts to ensure that its permitting decisions are appropriately protective of disadvantaged communities at the Corporate Environmental Lawyer blog. 


OMB Throws Potential Speed Bump in Front of U.S. EPA’s Efforts to Designate PFAS as CERCLA Hazardous Substances

Linkedin_Steven_Siros_3130By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice

PFASOn August 12, 2022, the Office of Management and Budget (OMB) completed its review of U.S. EPA’s proposed rule to designate perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) as CERCLA hazardous substances.  Designation as a CERLA hazardous substances would have significant ramifications, including requiring the reporting of releases of reportable quantities of these substances and potentially resulting in the reopening of previously closed CERCLA sites.  These ramifications are discussed in a previous Corporate Environmental Lawyer blog.

OMB had previously designated the proposed rule as “other significant” which would not have required U.S. EPA to issue a regulatory impact analysis (RIA).  “Other significant” designations are reserved for rules expected to have costs or benefits less than $100 million annually.  In response to a number of comments, including comments from the U.S. Chamber of Commerce that estimated annual costs in excess of $700 million, the OMB has changed its designation to “economically significant” which will require U.S. EPA to conduct an RIA. 

Although it is very unlikely that the requirement to conduct an RIA will deter U.S. EPA in proceeding with its plans to designate PFOA and PFOS as CERCLA hazardous substances, it will require U.S. EPA to analyze whether its proposed rule is necessary and justified to achieve U.S. EPA’s goals and to clarify how its rule is the least burdensome and most cost-effective and efficient mechanism to achieve that goal.  OMB will review and comment on U.S. EPA’s RIA and may require that changes be made to U.S. EPA’s analysis. 

Again, the requirement to conduct the RIA is unlikely to derail U.S. EPA’s efforts to designate these chemicals as CERLA hazardous substances but it could jeopardize U.S. EPA’s summer 2023 deadline for finalizing its rule.  We will continue to track and report on PFAS related issues at the Corporate Environmental Lawyer.

Inflation Reduction Act: Is the U.S. Finally Poised to Tackle Climate Change?

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By
Allison A. Torrence 


CapitalIn a compromise move many months in the making, on August 7, 2022, the Senate passed a spending bill dubbed the Inflation Reduction Act of 2022, which contains provisions aimed at lowering drug prices and health care premiums, reducing inflation, and most notably for our readers, investing approximately $369 billion in energy security and climate change programs over the next ten years. The Inflation Reduction Act, which is the Fiscal Year 2022 Budget Reconciliation bill, passed on entirely partisan lines in the Senate, with all 50 Democratic senators voting in favor, all 50 Republicans voting against, and Vice President Harris breaking the tie in favor of the Democrats. The bill is currently pending before the House of Representatives, where it is expected to be hotly contested but ultimately pass.

According to Senate Democrats, the Inflation Reduction Act “would put the U.S. on a path to roughly 40% emissions reduction [below 2005 levels] by 2030, and would represent the single biggest climate investment in U.S. history, by far.” There are a wide variety of programs in this bill aimed at achieving these lofty goals, including:

  • Clean Building and Vehicle Incentives
    • Consumer home energy rebate programs and tax credits, to electrify home appliances, for energy efficient retrofits, and make homes more energy efficient.
    • Tax credits for purchasing new and used “clean” vehicles.
    • Grants to make affordable housing more energy efficient.
  • Clean Energy Investment
    • Tax credits to accelerate manufacturing and build new manufacturing plants for clean energy like electric vehicles, wind turbines, and solar panels.
    • Grants and loans to retool or build new vehicle manufacturing plants to manufacture clean vehicles.
    • Funding for EPA, DOE and NOAA to facilitate faster siting and permitting of new energy generation and transmission projects.
    • Investment in the National Labs to accelerate breakthrough energy research.
  • Reducing Carbon Emissions Throughout the Economy
    • Tax credits for states and electric utilities to accelerate the transition to clean electricity.
    • Grants and tax credits to reduce emissions from industrial manufacturing processes like chemical, steel and cement plants.
    • Funding for Federal procurement of American-made clean technologies to create a stable market for clean products—including purchasing zero-emission postal vehicles.
  • Environmental Justice
    • Investment in community led projects in disadvantaged communities, including projects aimed at affordable transportation access.
    • Grants to support the purchase of zero-emission equipment and technology at ports.
    • Grants for clean heavy-duty trucks, like busses and garbage trucks.
  • Farm and Rural Investment
    • Funding to support climate-smart agriculture practices and forest conservation.
    • Tax credits and grants to support the domestic production of biofuels.
    • Grants to conserve and restore coastal habitats.
    • Requires sale of 60 million acres to oil and gas industry for offshore wind lease issuance.

Drilling down on some of these many provisions, the clean vehicle consumer tax credit has already sparked controversy due to the requirement that certain manufacturing or components be sourced in North America. The Inflation Reduction Act would maintain the existing $7,500 consumer tax credit for the purchase of a qualified new clean vehicle. The Act would get rid of the previous limit that a single manufacturer could only offer up to 200,000 clean vehicle tax credits—a limit that many manufacturers were hitting. However, under the new bill, that tax credit is reduced or eliminated for electric vehicles if the vehicle is not assembled in North America or if the majority of battery components are sourced outside of North America and if a certain percentage of the critical minerals utilized in battery components are not extracted or processed in a Free Trade Agreement country or recycled in North America. Manufacturers have indicated these battery sourcing requirements are currently difficult to meet, and may result in many electric vehicles being ineligible for this tax credit in the near term.

Another controversial point in the Act is the handling of oil and gas rights vis-à-vis wind farm projects. The Act would allow the sale of tens of millions of acres of public waters to the oil and gas industry as part of an overall plan to require offshore oil and gas projects to allow installation of wind turbines. A group of 350 climate groups, including Senator Bernie Sanders, criticized this and other provisions they saw as favorable to the oil and gas industry in the Act. Despite his criticism of certain aspects of the Inflation Reduction Act, Senator Sanders ultimately voted for the bill.

The House is expect to vote on the Inflation Reduction Act very soon and if it is passed by the House, President Biden will sign it into law. We will continue to track the Act’s progress and its impact on the regulated community. You can follow the Corporate Environmental Lawyer Blog for all of the latest developments.

West Virginia v. EPA: The Major Questions Doctrine Arrives to Rein in Administrative Powers

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By
Allison A. Torrence and Tatjana Vujic

 

On the final day of its 2022 term, the Supreme Court issued its highly-anticipated opinion in the case of West Virginia v. EPA, 579 U.S. __ (2022), addressing EPA’s authority to regulate greenhouse gases (“GHGs”) under the Clean Air Act (“CAA”), but having much broader implications for the authority of all administrative agencies. The opinion signals a significant shift in the standards used to review administrative actions. Chief Justice Roberts wrote the opinion for the Court, joined by Justices Thomas, Alito, Gorsuch, Kavanaugh and Barrett. Justice Gorsuch filed a concurring opinion, in which Justice Alito joined, and Justice Kagan filed a dissenting opinion, in which Justices Breyer and Sotomayor joined.

Major Questions Doctrine Has its Day in the Sun

In a significant yet long-predicted move, the six-to-three opinion rejected EPA’s approach to regulating GHG emissions under the Obama Administration’s Clean Power Plan (“CPP”), under which EPA intended to regulate existing coal-and natural-gas-fired power plants pursuant to Section 111(d) of the CAA.[1] Of greater significance, however, the Court took the opportunity to fully embrace the “major questions doctrine,” a standard several Justices had endorsed but which had not yet been fully unveiled by the Court. The doctrine now requires agencies, in instances in which a regulation will have major economic and political consequences, to point to clear statutory language showing congressional authorization for the power claimed by the agency. In particular, in “extraordinary cases” in which “the history and the breadth of the authority that the agency has asserted and the economic and political significance of that assertion” is significant or major, courts have “a reason to hesitate before concluding that Congress meant to confer such authority.” Slip op. at 17. In such extraordinary cases, the Court will not read into ambiguous statutory text authority that is not clearly spelled out. Instead, “something more than a merely plausible textual basis for the agency action is necessary”; specifically, “[t]he agency instead must point to clear congressional authorization for the power it claims.” Slip op. at 19.

As support for the adoption and application of the major questions doctrine, the Court cited numerous cases in which agency authority was curtailed because of extraordinary circumstances that it determined required a clear congressional directive. The cases included the FDA’s attempt to regulate tobacco (FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), the CDC’s effort to issue an eviction moratorium during the COVID-19 pandemic (Alabama Assn. of Realtors v. Dept. of Health & Human Servs., 594 U.S. __ (2021)), EPA’s assertion of permitting authority over millions of small sources like hotels and office buildings (Utility Air Regulatory Group v. EPA, 573 U.S. 302 (2014)), and OSHA’s endeavor to require 84 million Americans either obtain a COVID-19 vaccine or undergo weekly testing (National Federation of Independent Business v. OSHA, 595 U.S. __ (2021)), all of which, according to the Court, involved an agency overstepping its authority to act in situations not dissimilar from the extraordinary circumstances presented in West Virginia v. EPA. The dissent, on the other hand, regarded the majority’s use of the major questions doctrine to be without precedent, observing that “[t]he Court has never even used the term ‘major questions doctrine’ before.” Dissent at 15.

As discussed below, when the Court determines that the major questions doctrine applies, even if the administrative action arguably fits within what may seem like a broad grant of statutory authority, it is not necessarily enough to authorize the agency to act. Rather, if the court finds that the administrative rule is an “extraordinary case”, i.e., will have a significant economic or political impact, the agency must base its action on very clear congressional authorization to justify the power it is attempting to assert.

Clean Power Plan is Out But Regulating GHGs Still OK

Turning back to the regulation at issue in West Virginia, the Court reviewed the Clean Power Plan, which dates back to the Obama Administration’s EPA. At that time, EPA promulgated the CPP pursuant to its authority under the New Source Performance Standards (“NSPS”) in Section 111(d) of the CAA. The Court’s review thus centered on Section 111(d), which gives EPA authority to select the “best system of emission reduction” for existing sources of pollution, like power plants. 42 U.S.C. § 7411(d). Under the CPP, the Obama Administration’s EPA used the NSPS to set GHG emission standards for existing power plants which would require many operators to shut down older coal-fired units and/or shift generation to lower-emitting natural gas units or renewable sources of electricity. The Court viewed EPA’s CPP, which would have required power producers to significantly change the generation mix, as an “extraordinary case” because it would have a major impact on the economy and was a “transformative expansion in [EPA’s] regulatory authority” based on “vague language” in the CAA. Slip op. at 20. In addition, the Court noted that EPA was using an “ancillary provision” in the CAA to regulate GHGs and stated that “the Agency’s discovery [of Section 111(d)]”—which the Court described as a “gap filler”—"allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself.” Slip op. at 20.

Best System of Emission Reduction

Notably, the Court acknowledged that “as a matter of definitional possibilities, generation shifting can be described as a system” (and thus a “best system of emission reduction”), but nevertheless determined that the CAA’s grant of authority was too vague. Slip op. at 28. According to the Court, almost anything could be described as a “system”, and therefore the CPP was based on a vague grant of authority and did not pass the major questions doctrine test. Slip op. at 28. The majority found such a broad grant of authority questionable, particularly because climate change legislation has been debated in Congress for years with no action, signaling that EPA could not exercise such broad authority when Congress had clearly declined to take such action itself.

By contrast and contrary to the majority’s narrow reading of “best system of emission reduction,” the dissent argued that the generation shifting prescribed by the CPP was precisely the type of “system” of emission reduction permitted under the CAA. In particular, the dissent contended that the term “system” is not vague (which Justice Kagan defined as unclear, ambiguous or hazy) but intentionally expansive to allow for such system-wide programs. Thus, the crux of the disagreement between the majority and dissent is that the dissent saw the CAA as having bestowed broad authority on EPA to regulate complex and important issues of air pollution—including and especially climate change, particularly considering the severity of the problem—in the manner that EPA determines is most appropriate, while the majority required further scrutiny for large-scale administrative endeavors like the CPP, which it held require very clear and specific authorization.

What’s Next?

In terms of the implications of West Virginia, what is clear is that the major questions doctrine is here to stay and EPA’s ability to regulate GHG’s under Section 111(d) of the CAA may be curtailed but has not been rejected. In fact, the Court specifically endorsed EPA’s authority to regulate GHGs. So, what does this mean, not only for GHG regulation but also for agency rulemaking in general?

First, while the ruling marks a significant setback for EPA, it does not shut the door on the agency’s ability to regulate GHGs. The CPP rules at issue raised the specter of the major questions doctrine because the regulation would have required generation shifting across the entire energy industry—an action viewed by the Court as having a significant impact on the national economy. The Court, however, declined to opine on “how far our opinion constrains EPA,” indicating that EPA’s authority had not been disallowed. Slip op. at 31, fn5. In fact, the opinion unequivocally states that it is within EPA’s purview to set a specific limit on GHG emissions. Slip op. at 6 (“Although the States set the actual rules governing existing power plants, EPA itself still retains the primary regulatory role in Section 111(d). The Agency, not the States, decides the amount of pollution reduction that must ultimately be achieved.”) Nothing in the opinion suggests that EPA cannot choose to regulate GHGs at power plants with more traditional technology-based requirements. Indeed, an inside-the-fence-line regulation that requires technology like carbon-capture would likely be within EPA’s traditional expertise and less likely to implicate large swaths of the economy like generation switching, and hence not be struck down.

Looking beyond EPA and GHG regulation, additional fallout from the Court’s embrace of the major questions doctrine is sure to occur. In addition to the Court’s explicit adoption of the major questions doctrine, Justice Gorsuch—a longstanding proponent of the doctrine—used his concurring opinion to lay out what he saw as the appropriate elements to consider when evaluating administrative rules under the doctrine. While Justice Gorsuch’s concurrence is not binding, future courts and administrative agencies likely will look to both the Court’s majority opinion and the Gorsuch concurrence for guidance. Administrative regulations will face increased challenges and heightened judicial scrutiny thanks to the major questions doctrine, and we can expect to see not only the number of challenges increase but also the number of successful challenges rise. Additionally, administrative agencies may proactively rein in regulatory actions they were planning to promulgate—keeping the rules more modest or tailored in an attempt to avoid challenges based on the major questions doctrine.

Undoubtedly, this will not be the last word on EPA regulation of GHGs or the use of the major questions doctrine. EPA will issue new GHG regulations, which certainly will invite future litigation. The decision will also certainly trigger many more challenges of agency authority under the newly minted major questions doctrine.

 

[1] Notably, the CPP was revoked by the Trump EPA, and the Biden EPA has stated that it intends to promulgate new GHG regulations different from the previous rules under past administrations. Nevertheless, the Court held that the parties had standing to proceed and the case was not moot. Slip op. at 14, 16.