Tag: EPA

Trump Executive Order Seeks to Limit Scope of Clean Water Act

clean water act, EPA, environmental protection agencyThe executive order asks agencies to repeal or revise an Obama-era rule defining the scope of the Clean Water Act and recommends adoption of a narrower standard articulated by the late Justice Scalia.

On February 28, US President Donald Trump issued an executive order asking the US Environmental Protection Agency (EPA) and the US Army Corps of Engineers (Army Corps) to repeal or revise a 2015 rule interpreting the term “waters of the United States,” which determines the jurisdictional reach of the Clean Water Act. The order further recommends that the agencies consider crafting a new definition based on the “continuous surface connection” test adopted by a plurality of the US Supreme Court in Rapanos v. United States, which would result in a significant contraction in the Clean Water Act’s scope from the Obama EPA’s 2015 rule.[1] The 2015 rule was met with extensive criticism by some stakeholders and gave rise to a flurry of litigation. A new rule issued in response to President Trump’s executive order is likely to do the same—resulting in continued uncertainty as to the proper scope of the Clean Water Act and possibly requiring further review by the Supreme Court to resolve the question.

Background

The scope of jurisdiction under the Clean Water Act has long been controversial. It is also an important issue for stakeholders such as farmers, developers, and energy companies that own or use properties that may contain a “water of the United States.” The scope of the act affects the application of a number of regulatory programs, including the section 402 point source discharge permit program, the section 404 dredge and fill permit program, and the section 311 oil spill prevention program.

The Clean Water Act applies to “navigable waters,” which are defined in the statute as “waters of the United States, including territorial seas.” EPA and the Army Corps, the agencies charged with administrating the Clean Water Act, have sought multiple times to define “waters of the United States” through rulemakings and regulatory guidance, and those regulatory efforts have been subject to numerous legal challenges. The US Supreme Court has weighed in on the issue three times, most recently in Rapanos v. United States.[2] Rapanos resulted in a fractured decision in which no interpretation received support from a majority of the court—Justice Antonin Scalia and three other justices articulated a test based on a “continuous surface connection,” while Justice Anthony Kennedy’s concurrence relied on whether there was a “significant nexus” to another water of the United States.[3] Because Justice Kennedy’s analysis provided the narrowest grounds for reversal, the “significant nexus” test has been understood by many as the controlling test post-Rapanos for what constitutes a water of the United States.

In May 2015, EPA and the Army Corps issued a new rule seeking to better define the Clean Water Act’s scope.[4] The agencies maintained that the final rule only clarified and limited the reach of the act, but many stakeholder groups concluded that the 2015 rule significantly expanded the existing interpretation of waters of the United States. Of particular concern to stakeholders were categorical inclusions of “tributaries” and waters “adjacent” to other waters of the United States, as well as the rule’s broad definition of what constitutes a “significant nexus.” Numerous lawsuits challenging the rule were filed, which are currently consolidated in the US Court of Appeals for the Sixth Circuit.

The Executive Order

On February 28, 2017, President Trump issued an executive order asking EPA and the Army Corps to review the 2015 rule and propose a new rule “rescinding or revising” it. The order also asks the agencies to consider defining waters of the United States “in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States.” The order further directs the US attorney general to take appropriate measures regarding the ongoing litigation over the 2015 rule.

EPA and the Army Corps released a prepublication Federal Register notice the same day noting their intention to “review and rescind or revise” the 2015 rule pursuant to President Trump’s executive order. The agencies also acknowledged that they would consider adopting Justice Scalia’s test from Rapanos.

Implications

It likely will take years for the exact contours of the new regulation to be fleshed out by EPA and the Army Corps and for any ensuing litigation to be resolved. The process likely will start with the withdrawal of the Obama-era rule and the issuance of a new rule, including an explanation as to how the new rule fulfills the legislative intent of the Clean Water Act. The new rule will be subject to a public comment period.

If the agencies’ new rule is indeed based on Justice Scalia’s “continuous surface connection” test from Rapanos, it likely would entail a significant contraction in the scope of the Clean Water Act from existing practices and the Obama EPA’s 2015 rule. For example, a wetland next to a navigable river presumably would be covered by the act only if surface water from the wetland flowed into that river on a year-round basis, regardless of any subsurface flows. Under the 2015 rule, the same wetland could be covered under the act as a water “adjacent” to another water of the United States in the absence of a continuous surface connection. Many tributaries and ephemeral waters also likely no longer would be subject to regulation under the Clean Water Act if the “continuous surface connection” test is adopted. Such changes likely would be hailed by stakeholders that would have been prohibited from engaging in certain activities or obtaining permits under the 2015 rule, but criticized by environmental groups seeking to broadly protect aquatic resources.

Given the stakes and the contentious atmosphere regarding the scope of the Clean Water Act, any new rule is likely to be challenged in court. One issue that may be raised by challengers is whether a rule based on Justice Scalia’s “continuous surface connection” test is consistent with the requirements of the Clean Water Act as interpreted by Supreme Court decisions, including Rapanos. Opponents of the rule could contend that a “continuous surface connection” standard is inconsistent with the Rapanos court’s view of the limits of the Clean Water Act because five justices rejected Scalia’s test as too restrictive, and most lower courts have treated Justice Kennedy’s “significant nexus” test as the operative standard. Proponents of a new rule could counter that such a construction is nonetheless a permissible interpretation of the Clean Water Act (as evidenced by the plurality’s opinion in Rapanos) that is entitled to judicial deference.[5]  

Environmental groups or others opposed to a new rule could also challenge the merits of the rule under the Administrative Procedure Act. Such a challenge could rely in part on the new rule’s departure from the 2015 rule, in which the Obama administration cited extensive scientific findings in support of its interpretation. While agencies can change their position, they must provide a “more detailed justification” if they rely on factual findings contradicting previous ones,[6] potentially heightening the agencies’ burden to provide support for a new rule.

In the interim, jurisdictional determinations under the Clean Water Act are likely to remain in a state of limbo. The 2015 rule has been stayed by the Sixth Circuit, technically leaving the rules and guidance pre-dating 2015 as the operative regulatory regime until the time that the stay is lifted or a new rule is promulgated. In light of the new administration’s expressed intent to limit the scope of the Clean Water Act, EPA and the Army Corps will be unlikely to assert jurisdiction over waters on the borderline of Clean Water Act jurisdiction until this legal limbo is resolved. The currently pending legal challenges also may be held in abeyance or remanded until the promulgation of a new rule, particularly given the executive order’s instruction to the US attorney general to take appropriate actions in pending litigation.

Ultimately, it likely will be years before the scope of the Clean Water Act is sorted out. And it may require a fourth trip to the Supreme Court for the justices to yet again wrestle with what are “waters of the United States.”

Additional Information

Additional information on the controversy that has surrounded efforts to define “waters of the United States” and the regulatory programs affected by the jurisdictional reach of the Clean Water Act can be found in the Clean Water Handbook, Fourth Edition, authored by Duke McCall and available from Bernan Press.

ARTICLE BY Duke K. McCall III, Ella Foley Gannon & Douglas A. Hastings of Morgan, Lewis & Bockius LLP
Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

[1] 547 U.S. 715 (2006).

[2] Id.

[3] See id. at 717-18.  

[4] 80 Fed. Reg. 37,054. 

[5] See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).

[6] See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).  

Asbestos Among First Ten Chemicals to be Reviewed Under the Amended TSCA

chemical safetyEPA announced on June 29, 2016, that asbestos and nine other chemicals will be reviewed for hazard and exposure risks under the new procedures of the Lautenberg Chemical Safety Act, the June 2016 amendment to the Toxic Substances Control Act. Now that the ten chemicals have been chosen, EPA must produce a risk evaluation work plan for the chemicals by June 2017 and must complete the evaluations within three years. If unreasonable risks are found, EPA must take action to mitigate the unreasonable risks.

In addition to asbestos, the other nine chemicals are:

  • 1-Bromopropane, a solvent frequently used in adhesives
  • 1,4-Dioxane, a stabilizer in solvents and in certain consumer products
  • N-methylpyrrolidone, a solvent used in paint strippers, adhesives, and manufacturing
  • Carbon Tetrachloride, a carcinogen that was once used commonly as a solvent
  • Methylene Chloride, a paint stripper and degreaser
  • Tetrachloroethylene, also known as perchloroethylene, a common dry cleaning solvent
  • Cyclic Aliphatic Bromide Cluster, used as flame retardants
  • Pigment Violet 29, a dark reddish-purple dye

According to EPA, the chemicals were chosen because of their prevalence as environmental contaminants; their widespread use, especially in consumer products; and their perceived or known hazards.

EPA issued a ban and rule to phase out the use of asbestos in 1989, but the rule was overturned on the grounds that EPA failed to provide an adequate justification for the complete ban. Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991). Various other EPA rules have diminished the uses of asbestos over the years, as TSCA reformers were particularly focused on forcing EPA to make decisions about substances like asbestos. The new safety review focuses on risks to human health and the environment. The Lautenberg Act replaced the old cost-benefit standard with a new health-based safety standard. EPA is required to promulgate use standards if it finds that asbestos poses an unreasonable risk. EPA is expected to impose additional restrictions, including a possible ban, on the entry of asbestos into U.S. commerce. The other nine chemicals are subject to the same process.

ARTICLE BY Jane E. Montgomery of Schiff Hardin LLP
© 2016 Schiff Hardin LLP

EPA OIG Will Evaluate EPA’s Management of Resistance Issues Related to Herbicide Tolerant GE Crops

EPAOn March 25, 2016, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) sent a memorandum to Jim Jones, Assistant Administrator, Office of Chemical Safety and Pollution Prevention (OCSPP), announcing that it plans to begin preliminary research to assess EPA’s management and oversight of resistance issues related to herbicide tolerant genetically engineered (GE) crops.  OIG states that its review will include the Office of Pesticide Programs (OPP), as well as other applicable headquarters and regional offices.  OIG’s objectives are to determine:

  1. What processes and practices, including alternatives, EPA has provided to delay herbicide resistance;

  2. What steps EPA has taken to determine and validate the accurate risk to human health and the environment for approved pesticides to be used to combat herbicide resistant weeds; and

  3. Whether EPA independently collects and assesses data on, and mitigates actual occurrences of, herbicide resistance in the field.

OIG states that the anticipated benefit of the project “is a greater understanding of herbicide resistance[,] which will lead to an enhancement of EPA’s herbicide resistance management and oversight.”

Commentary

Pesticide resistance is not a new issue and is one that EPA has affirmatively addressed when granting registrations for new products, GE or not, for some time.  In fact, that newer chemistries often have a more niche mode of action to reduce potential toxicity concerns has led some observers to speculate that greater resistance is one potential trade-off for the development of less toxic materials.

This “investigation” may appear to some to be a response to concerns raised by critics of GE crops generally and to a recent EPA decision to approve Enlist Duo herbicide, a new formulation of 2,4,D- and glyphosate designed to address the problem of weed resistance to glyphosate-tolerant crops.  Glyphosate tolerant crops were first approved some years ago, and their use was so broadly and readily adopted that issues have arisen with regard to potential resistance to some weed species.  EPA is currently expected to approve another GE strain, Dicamba-tolerant crops, to control glyphosate tolerant weeds.

To critics of GE crops, using more herbicides to control problems caused by what they claim is overuse of another herbicide is evidence of a troubling “pesticide treadmill,” which they believe should not have been allowed to occur in the first place.  Rebutting this criticism, others assert that resistance is a problem for all pesticides, not only genetically modified ones, and that with sufficient controls, resistance can be delayed, if not avoided.  Registrants point out that it is very much in their self-interest to take steps to avoid resistance to their products — once that occurs, the market viability of the product is significantly reduced.

ARTICLE BY Lisa M. Campbell, James V. Aidala & Carla N. Hutton of Bergeson & Campbell, P.C.
©2016 Bergeson & Campbell, P.C.

Ohio v. Sierra Club: The Integrity of the Clean Air Act

EPAYesterday, the Supreme Court of the United States announced it will not grant Certiorari in Ohio v. Sierra Club, et al. In this case, the Sixth Circuit found an area must adopt required pollution-control measures before the EPA can designate it as having satisfied the law’s health-based pollution standards.

In 1997, the EPA created the National Ambient Air Quality Standards of fine particulate matter in the air.  When the EPA created these standards, regions were designated as having met, or not met the air quality standards.  In order to meet the standards, states were required to adopt “reasonable measures and technologies” to reduce the pollution in the problematic areas.  In 2011, the EPA deemed Ohio to have met the appropriate standards because the air quality had improved. Ohio, however, had never created a pollution regulatory plan as the Clean Air Act required. In response, the Sierra Club filed suit alleging the EPA acted illegally by designated the areas as having met air quality standards.

Creating a pollution regulatory plan is crucial, according to Sanjay Narayan, the managing attorney for the Sierra Club on the case.  Before 1990, the Clean Air Act had no requirement that states produce an implementation plan.  According to Narayan, the expectation was “we [the EPA] don’t care how you get there, we aren’t going to tell you how to get there, we’re just going to check in at the deadline and expect you to have made it. And what happened was that the vast majority of the states did not meet the deadline.”

Narayan describes the implementation plan as “a show your math” requirement. This has been very useful in helping states create lasting change in their air quality–by creating a regulatory framework that shows how they can reduce air pollution, the states are more likely to meet their deadline.  Narayan points out “It’s also useful for other areas to know what worked and what successful areas did.  Here’s what turned out to be cost effective, that kind of record is tremendously useful as we move forward on what was meant to be a nation-wide campaign for healthy air for the public.”

In  Ohio v. Sierra Club, there are a few details to consider.  Pollution decreased, and that’s the goal.  However, it might not be that simple.  In the years preceding Ohio’s drop in air pollution, the economy crashed.  Narayan draws comparisons to the Beijing Olympics, saying, “When people aren’t running their [industrial] plants for economic reasons, the air cleans up a little bit.  But it turns around quickly once you turn the plants back on.”  However, Ohio did meet the standard, and according to Narayan, to comply with the Clean Air Act they’d simply need to go back and show their work.  He says, “They did meet the standard, and they say they have all the controls they need in place.  There is a procedural step that Ohio hasn’t taken, and it shouldn’t be hard for Ohio to take it.”

The Sixth Circuit decision that currently stands requires Ohio to take those regulatory steps. In the current case, the Sixth Circuit agreed that the entire portion of the Clean Air Act must be followed, and that it wasn’t enough for Ohio to have simply met the standards.  Ohio has appealed to the Supreme Court.

Narayan says, “It’s about the integrity of the clean air act.”  These requirements are crucial in ensuring the air gets cleaned up in a timely manner.  Narayan says, Decades of experience has shown us that without these requirements, states miss deadlines, air pollution lasts for much longer than it should and the public really suffers.  The pollution sends kids to the hospital with asthma, it creates respiratory disease in the elderly-delay is a disaster for public health.”

Article By Eilene Spear & Nicole Cudiamat Minnis of The National Law Review / The National Law Forum LLC
Copyright ©2016 National Law Forum, LLC

EPA Proposal Acknowledges Areas With Dangerous Air Pollution, But Leaves Some Out and Has Failed to Step in When States Haven’t Protected Residents

EPATwo weeks ago, the Environmental Protection Agency published proposals to designate 12 areas of the country—including Alton and Marion, Illinois; Jefferson and Posey, Indiana; DeSoto Parish, Louisiana; Anne Arundel and Baltimore, Maryland; St. Clair, Michigan; Franklin, Missouri; Muskogee, Oklahoma; and Freestone, Rusk, and Titus, Texas—as “nonattainment” for the dangerous pollutant sulfur dioxide, or SO2.  While EPA won’t finalize the designations until July, what needs to happen next is for the agency to recognize that there are far more than 12 areas across the United States that are in need of having their air cleaned up.

But to explain the importance of all this, we need to back up a bit.  One of the most powerful tools under the Clean Air Act for protecting the air we breathe is something called an “ambient air quality standard.”  The way it works is this: EPA follows the science and determines the level for certain pollutants above which it’s unsafe for human health, and then issues standards for those pollutants.  For SO2 pollution, it’s 75 parts per billion.  EPA then determines what parts of the country have safe air quality, and what parts have air quality worse than the standard.  These latter areas are called “nonattainment,” and the Clean Air Act imposes strict requirements on states to fix their air quality problems, and directs EPA to step in and handle things if states don’t shoulder their responsibility.

Although EPA set the SO2 standard in 2010, since then, implementation has been stymied.  EPA hasn’t designated many areas, and even with the areas it has already designated as nonattainment, states have almost universally failed to develop the required plans to reduce SO2 pollution and EPA has failed to step in solve the problem expeditiously–including in Detroit, Michigan.  The consequence is that hundreds of thousands of residents are regularly breathing levels of pollution the agency knows causes severe public health impacts, particularly on children and the elderly.

SO2 is a nasty pollutant.  Exposure to even low concentrations for even short durations (as little as five minutes) can trigger asthma attacks and respiratory distress. In fact, studies show correlations between short-term exposure and increased visits to emergency departments and hospital admissions for respiratory illnesses, particularly in at-risk populations including children, the elderly, and asthmatics.  In places like Detroit, where everybody—EPA, Michigan Governor Rick Snyder, and the polluters themselves—know that the air is unsafe, the asthma rates are high, the public is suffering, but state and EPA action is both missing and overdue.

We know how to fix this problem. Almost all SO2 pollution comes from a tiny handful of sources: coal-fired power plants.

sierra20clubThat means that restoring clean air is as simple as modeling the pollution from the few hundred remaining coal plants in the country, and ensuring that they have emission limits in place that protect our air and our communities.

But why use modeling instead of air monitors to assess the safety of the air we breathe?  Two reasons: First, when almost all the pollution comes from just a few large sources, modeling is actually much faster, cheaper, and more accurate than setting up a monitoring network and waiting years for the data to come in.  EPA has carefully developed modeling software for this purpose, and has subjected it to more rigorous field testing than any other modeling tool it has ever created.

Second, the sad fact is that the nation’s air monitoring network for SO2 pollution is woefully inadequate.  During the Reagan administration, the U.S. had roughly 1,500 SO2 pollution monitors, which sounds like a lot, until you realize just how big a country the U.S. is—there are more than 3,000 counties in the U.S.  But since then, the number has dropped even further, to less than 450 (in a country spanning 3.8 million square miles!).  And none of them are where they need to be to keep an eye on peak concentrations of SO2 pollution: they are often miles away from large polluting sources or are in places like offshore islands, where the air they measure is a lot cleaner than the air we actually breathe.

This is what is so critical about EPA’s proposals: the new designations would be based on modeling.

Of course, not everybody is likely to be happy about this.  Plenty of states and industry submitted modeling to EPA (rather suspiciously, industry modeling rather universally shows impacts just below the limit), but oftentimes such analysis was skewed towards hiding the true impacts of the pollution.  In some cases, states submitted modeling not of what power plants actually emitted, but what the state wished they had emitted. In others, states or industry modelers used unapproved software add-ons that cripple the model and unsurprisingly yield results purporting air quality to be much better than it actually is.  This is a bit like calculating how much you’d have in your savings account if you’d been stashing away a lot more money than you actually had, and pretending the bank gave you a much better interest rate than it actually did.  It might be a fun exercise, but it has little to do with reality.

Nor did EPA go as far as it should.  While EPA in this round of proposed designations was looking at just 66 areas total, many more than the 12 it identified as having bad air should be considered as “nonattainment” for SO2 pollution.  Places like Gibson County in Indiana, and additional parts of Illinois, Michigan, Louisiana, Ohio, and regions in Texas all have unsafe air quality because of coal plants, and EPA should designate them in nonattainment as well.

The first step in fixing a problem is recognizing that there is a problem, so EPA should not shy away from calling a spade a spade and finalizing nonattainment designations for these areas. And, where problems have already been identified–such as in Detroit–EPA should stop sitting on its hands and move expeditiously to protect the breathing public.

Article By Zack Fabish of Sierra Club

© Sierra Club 2016

2016 TSCA Chemical Data Reporting – Are You Prepared?

The Toxic Substances Control Act (TSCA) Chemical Data Reporting (CDR) rule (40 C.F.R. Part 711) will require U.S. manufacturers and importers of certain chemical substances to report information on these substances to the U.S. Environmental Protection Agency (EPA) by September 30, 2016. Industry should be well aware of and theoretically has ample time to meet this deadline, but the 2016 CDR is more complicated, more onerous, and requires more information than the 2012 CDR. Particularly given the significant penalties for CDR noncompliance (up to $2-5,000 per chemical per site), companies should devote significant time and effort to ensuring full compliance with this requirement.

Companies should be preparing now for the CDR submission period in 2016.

  • CDR reports must be submitted between June 1 and September 30, 2016.

  • Companies must report if they manufactured in or imported into the U.S. at least 25,000 pounds (lbs.) of a TSCA Inventory listed substance at any one U.S. site during any one of the following calendar years – 2012, 2013, 2014, or 2015.

  • Certain regulated chemicals (e.g., chemicals subject to TSCA section 5 significant new use rules (SNUR)) are subject to a lower, 2,500 lbs./year, manufacture / import volume threshold for these calendar years. —

  • CDR reports must include detailed, chemical-specific and site-specific manufacture / import and processing / use information for calendar year 2015 (the “principal reporting year”), and production volume information for each calendar year from 2012 to 2015.

  • Information reported for the CDR can be claimed as TSCA confidential business information (CBI) only if “upfront” substantiation is provided.

EPA regulations governing CDR appear at 40 C.F.R. Part 711. For additional information, visit http://www.epa.gov/cdr.

The CDR Program

Since 1986, U.S. manufacturers and importers have been required to periodically submit under TSCA certain basic information on many of the now over 85,000 chemicals appearing on the TSCA Chemical Substance Inventory (Inventory). Information submitted to EPA under this reporting requirement has been used as a tool for regularly updating the Agency and the public as to potential human and environmental exposure to substances in U.S. commerce.

In 2011, EPA overhauled this reporting requirement, which was originally known as the TSCA Inventory Update Rule (IUR) rule. The new “CDR” rule ushered in significant changes to reporting requirements beginning with the first CDR submission period, which ended in August 2012. For the 2012 CDR, about 1,600 U.S. companies reported activities for about 7,700 chemicals at about 4,800 sites. The second CDR reporting period will occur between June 1 and September 30, 2016 (to recur at 4-year intervals thereafter). Given the broader time period beginning in 2016 during which chemical production can trigger CDR reporting, in the future even more companies will likely be subject to and have to report on more chemicals.

Basic Thresholds and Reporting Requirement

For the 2016 submission period, companies must report for the CDR if, at one or more U.S. sites, they manufactured in or imported into the U.S. at least 25,000 pounds (lbs.) of a reportable chemical substance during any one of the calendar years 2012, 2013, 2014, or 2015. The CDR reporting form is known as the “Form U.”

The Form U requires companies to provide a variety of information, including technical contact information, and a Chemical Abstracts (CA) Index Name and corresponding Chemical Abstracts Service (CAS) Registry Number (CASRN) (if available) for each reportable substance.

To the extent that it is known or reasonably ascertainable, the Form U requires reporting of the following information on manufacture / import activities for each reportable substance at each site:

  • Volume of the substance that is manufactured or imported;

  • Number of workers reasonably likely to be exposed to the substance at each site;

  • Physical form(s) of the substance as it leaves the submitter’s possession, along with the associated percent production volume; and

  • Maximum concentration of the substance as it leaves the submitter’s possession;

  • Volume of a substance used on site;

  • Volume of a substance that is directly exported and not domestically processed or used;

  • Whether an imported substance is physically at the reporting site; and

  • Whether a substance is being recycled, remanufactured, reprocessed, or reused.

For the 2016 submission period, companies must also report production volume, by substance and site, for each of the calendar years 2012, 2013, 2014, and 2015.

Processing and Use Information

As was the case under the 2012 CDR, companies are required under the 2016 CDR to report detailed “processing and use” information associated with downstream domestic customer facilities regardless of whether the facilities are controlled by the manufacturer or importer. For the 2012 submission period, information on processing and use activities was required only for substances manufactured or imported in quantities ≥ 100,000 lbs. in the principal reporting year. This higher threshold, however, has been eliminated such that, other than substances specifically exempted from this required as described and listed at section 711.6, this extensive processing and use information is now required for all CDR-reportable substances.

Required processing and use information includes the following:

  • Type of industrial processing or use operations at downstream sites;

  • Approximate number of sites and estimated number of industrial processing and use workers reasonably likely to be exposed to each substance for each combination of processing or use code and industrial function category;

  • Estimated percentages of the submitter’s production volume for each processing or use code and corresponding industrial function category;

  • Whether the products are intended for use by children; and

  • Maximum concentration of the reportable chemical substance in each commercial and consumer product category.

Processing and use information must be reported if it is “known to or reasonably ascertainable by” the manufacturer or importer. This is a considerably lower standard compared to the previous IUR requirement to report information that was “readily obtainable.”

Exemptions from CDR Reporting

Several categories of substances are exempt from CDR – certain polymers, microorganisms, and certain natural gas streams – so long as the specific substance is not subject to certain specified TSCA actions, such as proposed or final rules issued under section 4, 5(a)(2), 5(b)(4), or 6 of TSCA (e.g., test rules, significant new use rules), or to orders issued pursuant to section 5(e) or 5(f). Note that substances that are subject to an enforceable consent agreement (ECA) are similarly ineligible for these exemptions, even if the CDR reporter is not a signatory to the ECA. Also, otherwise polymeric substances resulting from hydrolysis, depolymerization, or chemical modification of polymers must be reported if the hydrolysis, depolymerization, or chemical modification occurs to such an extent that the resulting product is no longer totally polymeric in structure.

Exemptions also exist for substances that are produced or imported in small quantities for research and development, substances imported as part of an “article,” and substances manufactured or imported as an “impurity” or “non-isolated intermediate.” Other types of substances that are described at 40 C.F.R. § 720.30(h) are also excluded from CDR.

“Byproducts” are excluded from CDR if their only commercial purpose is to be burned as a fuel, disposed as a waste, or from which component chemical substances are extracted for a commercial purpose. Note, however, that any extracted component substances are potentially reportable for CDR.

Under section 711.6, certain petroleum process streams and other specifically listed “low interest” substances are exempt from the requirement to submit processing and use information. Manufacturers and importers of partially exempt substances, however, are still required to provide the traditional information required on the Form U if the general 25,000 / 2,500 lbs. production volume threshold is exceeded. EPA has established a process for revising these “partially exempt” substance lists.

Electronic Reporting

CDR reports must be submitted electronically using e-CDRweb, EPA’s free electronic reporting tool, to EPA’s Central Data Exchange (CDX).

CDR Violations, Penalties

EPA can assess substantial monetary penalties (up to $25,000 per chemical per site) for failure to comply with the CDR. Violations subject to penalties include seemingly minor CDR reporting violations such as late reporting, or reporting a slightly inaccurate manufacture or import volume. Companies would be well-advised to carefully review their production / import records and their prior CDR filing before preparing and submitting the 2016 report. If non-compliance occurs, companies may be able to rely on EPA’s “Audit Policy” (65 Fed. Reg. 19,618 (April 11, 2000)) to mitigate or eliminate penalties for past reporting errors or omissions, but companies should consult with legal counsel before examining past CDR compliance.

Confidentiality and Records Retention

To claim the chemical identity, site identity, or processing and use information as confidential business information (CBI), reporting companies must substantiate such CBI claims at the time of reporting. Submitters cannot claim information as CBI when it is identified as “not known to or reasonably ascertainable.” CDR records must be kept for 5 years.

Small Business Exemption

Certain small manufacturers are exempt from the CDR. A company may qualify for a small business exemption from reporting if it either: (1) produces less than 100,000 lbs. of the otherwise reportable substance and has total annual sales of less than $40 million (including those sales of the parent company); or (2) has annual sales of less than $4 million regardless of production / import volume.

This exemption does not apply for any substance that is the subject of a proposed or existing rule issued under sections 4, 5(b)(4), or 6; an order in effect under section 5(e); or relief that has been granted under a civil action under sections 5 or 7.

CDR Non-Compliance Issues

In our experience, many factors contribute to CDR non-compliance. These can include:

  • inaccurate manufacture and import volume tracking

  • failure to report / file all or some reportable substances

  • incorrect conclusions as to who is the “importer” of a substance

  • failure to report production volume to the required two significant figures of accuracy

  • nomenclature issues

  • “toll” manufacturing issues

  • misinterpretation of exemptions

  • failure to account for reportable “byproduct” and related stream manufacture

  • fractionation issues

As noted above, CDR violations are potentially eligible for EPA’s “Audit Policy,” and companies should strive to preserve their ability to use the Audit Policy to the extent possible and seek legal advice when necessary.

Article By Thomas C. Berger of Keller and Heckman LLP

© 2015 Keller and Heckman LLP

EPA Focuses on Methane Leaks as Climate Change Takes Center Stage

EPAIn the September 2015 edition of the US EPA’s Compliance Alert, EPA reported that it and state investigations had identified Clean Air Act compliance concerns regarding significant emissions from storage vessels, such as tanks or containers, at onshore oil and natural gas production facilities. This EPA alert is consistent with the administration’s attention on climate change and coincides with the papal visit, all of which set the stage for international attention on climate change in December at COP 21 in Paris.

The compliance concerns involve an evaluation of whether vapor control systems have been properly designed, sized and operated to control emissions consistent with the regulatory requirements. Storage vessels are regulated because they contain: 1) large quantities of volatile organic compound (VOC s) that contribute to the formation of ground-level ozone- (2) hazardous air pollutants (HAPs) such as benzene, a known carcinogen- and (3) methane, a powerful greenhouse gas.

This compliance alert comes while the oil and natural gas production industry is evaluating EPA’s proposed changes to the regulatory program for air emissions from the oil and gas industry (80 FR 56593 September 18, 2015) in an effort to further reduce methane emissions consistent with President Obama’s Climate Action Plan. During his state of the union address on January 20, 2015, President Obama proclaimed “No challenge poses a greater threat to the future generations than climate change.”

Pope Francis’ historic visit to the U.S. last month provided an opportunity to pontificate his view that the climate change is a global problem disproportionately impacting the poor. He echoed President Obama in proclaiming that climate change “represents one of the principal challenges facing humanity in our day.” Encyclical Letter Laudato Si of the Holy Father Francis: On Care for Our Common Home.

World attention will focus on climate change in December in Paris when the United Nations Framework Convention on Climate Change holds its 21st Conference of the Parties (COP21) with the view that COP21 “will be a crucial conference, as it needs to achieve a new international agreement on the climate, applicable to all countries, with the aim of keeping global warming below 2°C.” http://www.cop21.gouv.fr/en.

As the oil and natural gas industry evaluates the regulatory changes proposed by EPA (comments are due on or before November 17, 2015), representatives of nations across the planet will be preparing to discuss views on an international climate agreement. It will be interesting to see if the parties can agree upon anything but given the fact that the Pope and the President of the leading world superpower agree that climate change poses one of the greatest threats to our planet, it is possible that COP21 will produce an agreement far more reaching than the Kyoto Protocol of COP3 in 1997.

Article By Stephen C Smith of Steptoe & Johnson PLLC

© Steptoe & Johnson PLLC. All Rights Reserved.

BREAKING: EPA Water Rule Blocked Nationwide By Sixth Circuit

The Sixth Circuit today stayed the effect of the Environmental Protection Agency’s new “Clean Water Rule” nationwide, while the Court of Appeals considers whether it has original jurisdiction to hear challenges to the regulation or whether those challenges should proceed first in the federal district courts.  Among other reasons, the court said staying the Rule would remove uncertainty and confusion by restoring a uniform definition of “waters of the United States” nationwide.  Before today, the prior regulatory definition of waters of the United States was in effect in 13 states where the federal district court for North Dakota had enjoined the new Clean Water Rule; the new Rule’s definition applied in the rest of the country.

In granting the stay, the Sixth Circuit found that petitioners had a “substantial possibility” of succeeding on the merits of their challenge, for both substantive and procedural reasons.  Substantively, the court questioned whether the  Clean Water Rule’s provisions limiting jurisdiction over certain types of waters to those located within a specified distance from a navigable waterway are consistent with the Supreme Court’s decision in Rapanos v. United States, 547 U.S. 715 (2006).  Procedurally, the court found the rulemaking process by which the distance limitations were established was “facially suspect” because respondents have not shown those provisions were a “logical outgrowth” of the proposed regulations or that the public had “reasonably specific notice” the distance limitations were among the range of alternatives being considered.

As one member of the three-judge panel noted in dissent, the majority’s ruling is unusual in that the court enjoined implementation of the Clean Water Rule while it is still considering whether it even has jurisdiction to hear the challenges to the Rule.  In fact, petitioners have moved to dismiss their own petitions for lack of subject matter jurisdiction while also seeking a stay.  The majority’s statement that there is “no compelling showing that any of the petitioners will suffer immediate irreparable harm” in the absence of a stay is also in some tension with the Supreme Court’s decision in Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008), where the Court held (in the context of a NEPA challenge) that the party seeking a preliminary injunction must show a likelihood—not just a possibility—of irreparable harm absent an injunction.

The court said that briefing on the jurisdictional question will be complete, and the question ready for decision, “in a matter of weeks.”

Article By Robert J. Uram, S. Keith Garner & James Rusk
Sheppard, Mullin, Richter & Hampton LLP

Copyright © 2015, Sheppard Mullin Richter & Hampton LLP.

EPA Floats Proposed New Enforcement Initiatives for 2017 – 2019

On September 15, US EPA proposed its National Enforcement Initiatives (“NEI”) for calendar years 2017 through 2019. US EPA develops a set of NEI every three years, focusing federal resources on industries with noncompliance issues on a regional or national scale, where federal attention can make a difference. EPA’s latest proposal would add several new areas of concern to the list of NEIs. These include:

  1. Protecting Communities from Exposure to Toxic Air Emissions.

EPA is considering expanding the current air toxics initiative to include emissions from additional sources and industries, and has focused on two potential areas of concern:

  • Organic Liquid Storage Tanks: EPA notes that through advanced monitoring, including optical remote sensing techniques, EPA has observed that volatile organic compound (VOC) and hazardous air pollutant (HAP) emissions from storage tanks often greatly exceed the permitted or estimated levels. Sometimes, this is the result of inadequate maintenance of the tanks and associated emissions controls, design flaws, or the expansion of production volumes without corresponding increases in emissions control.

  • Hazardous Waste Air Emissions: Hazardous waste can result in toxic air emissions, and, if improperly handled, can also present a potential for increased fire or explosion risk due to their high corrosivity and ignitability. Such catastrophic events not only create a safety risk for workers and the surrounding community, they also create the potential for significant releases of toxic air pollutants. EPA believes that widespread violations of the air emission requirements under the Resource Conservation and Recovery Act (RCRA) are a significant contributing cause of these problems. Violations observed include the improper use of monitoring and control devices by facilities, resulting in releases of emissions from RCRA regulated units. Of particular concern are the toxic air emissions that result from the handling of hazardous waste at treatment, storage, and disposal facilities (TSDFs) and large quantity generators (LQGs) that are not properly controlling hazardous waste releases to the air as required by regulation.

  1. Keeping Industrial Pollutants Out of the Nation’s Waters.

EPA notes that certain industrial sectors contribute a disproportionate amount of water pollution over discharge limits.   EPA’s propsoed NEI would focus on the sectors with the most violations:

  • mining

  • chemical manufacturing

  • food processing

  • primary metals manufacturing

  1. Reducing the Risks and Impacts of Industrial Accidents and Releases.

According to EPA, approximately 150 “catastrophic” accidents occur per year among the universe of regulated facilities. These accidents pose a risk to neighboring communities and workers because they result in fatalities, injuries, significant property damage, evacuations, sheltering in place, or environmental damage. Approximately 2,000 facilities are currently considered “high-risk” because of their proximity to densely populated areas, the quantity and number of extremely hazardous substances they use, or their history of significant accidents. EPA believes that most of these accidents are preventable if the necessary precautions are taken. The potential NEI would focus on improved training of personnel, equipment maintenance, and inspections at those facilities and chemicals that pose the greatest risks.

The agency is seeking comment through October 14, 2015 on whether, along with the new priorities, it should keep or expand the current NEIs:

  • air pollution from power plants and other largest sources

  • toxic air pollution

  • pollution from land-based natural gas extraction

  • pollution from mineral processing operations

  • raw sewage and contaminated stormwater

  • animal waste pollution in water

Article By Katerina E. Milenkovski of Steptoe & Johnson PLLC

© Steptoe & Johnson PLLC. All Rights Reserved.

EPA Releases Additional Elements of President Obama’s Climate Action Plan

On August 18, 2015, EPA released additional components of President Obama’s Climate Action Plan.  The four separate actions are intended to reduce greenhouse gases and other emissions from the oil and natural gas sector.  The newly-released components include:clean environment, pollution, climate action plan, EPA, environmental protection agency

1) Additional New Source Performance Standards;

2) New Control Techniques Guidelines;

3) Proposed revisions to the regulatory definition of covered oil and gas equipment; and

4) A proposed Federal Implementation Plan for Indian Country New Source Review.

Each is discussed in turn.

New Source Performance Standards

First, EPA has proposed additional New Source Performance Standards that will:

  • Reduce 95% of the methane and VOC from compressor stations, specifically requiring modifications to wet seal centrifugal compressors and replacement of rod packing at reciprocating compressors based on a set number of hours of operation or route emissions into a closed vent system.

  • Establish a standard bleed rate limit across all natural gas-driven pneumatic controllers.

  • Establish a lower standard (zero) bleed rate limit at natural gas processing plants.

  • Reduce emissions from all pneumatic pumps at different rates and with different technologies.

  • Require “green completions” at hydraulically fractured well sites, using capture and combustion devices to reduce emissions.

  • EPA reconsidered various issues from the 2012 proposals, and is proposing actions concerning such issues as storage vessel monitoring, Leak Detection and Repair requirements, monitoring methods, and fugitive emission issues.

Although EPA has proposed the above New Source Performance Standards, EPA is also soliciting comment on “alternative approaches” that would meet the above guidelines.  EPA appears willing to consider alternative approaches because it has encouraged companies to reduce emissions in numerous ways voluntarily over the last several years, including as recently as June 2015 with its modified Energy Star program, and EPA indicates it does not want to impede equivalent reduction strategies.

VOC emission Guidelines from certain oil and gas facilities

Second, EPA is proposing Control Techniques Guidelines (CTGs) for reducing VOC emissions from certain oil and gas facilities in the northeast Ozone Transport Region.  These guidelines, proposed under Clean Air Act (CAA) Section 172(c)(1), will be used by states to set “reasonably available control technology” for existing sources of emissions.  CTGs are recommendations for technologies and practices to reduce emissions from existing sources in certain ozone non-attainment areas.  States may be required to modify their State Implementation Plans for certain sources within two years after the final CTGs are issued.

Amendments to what facilities are “adjacent” for permitting purposes

Third, EPA is proposing to define the term “adjacent” for purposes of evaluating when oil and gas equipment and activities are considered part of the same source.  EPA proposes two alternatives: One defines “adjacent” by reference to proximity; the other in terms of function. EPA requests comment on both definitions.  Either approach represents a potential change to current definitions as many oil and gas development wells are located in close proximity but in such a manner as that avoids meeting EPA’s traditional test as a “common source.” “Common sources” can be classified as “major sources” with more stringent emission limits.

Proposed Federal Implementation Plan for Indian Country

Last, EPA is proposing a Federal Implementation Plan (FIP) for Indian Country Minor New Source Review.  EPA required tribes administering the CAA to establish minor New Source Review programs in 2011.  This FIP will be imposed in areas where acceptable programs have not been implemented.  Because many oil and gas well sites are “minor” new sources, the FIP will provide guidance on air permitting for drilling in tribal territories.

More information, including the proposed rules and fact sheets, can be found at EPA’s website:  http://www.epa.gov/airquality/oilandgas/actions.html.

ARTICLE BY Jane E. Montgomery of Schiff Hardin LLP

© 2015 Schiff Hardin LLP