EPA Evaluates Fracking Chemicals
By Robert L. Graham
The EPA recently initiated a process that may result in the first federal regulation of chemicals used in fracking, a drilling technique that has significantly enhanced energy production and development in the United States.
In a response to a citizen petition under Section 21 of TSCA submitted by environmental groups in 2011 seeking the disclosure of the chemicals used in fracking, the EPA issued an advance notice of proposed rulemaking on May 9, 2014. Pursuant to that notice, the EPA announced that it will be considering rules requiring oilfield service companies and others to provide disclosure concerning the health and safety of the chemicals used in fracking. At the same time, the EPA indicated that it may stop short of issuing final rules, by instead developing incentives to induce voluntary disclosure.
Since fracking was first initiated in the United States, environmental groups have been demanding that EPA collect information on the fluids which are injected with water and sand in the fracking process. The mixture of those fluids with water and sand breaks apart underground rocks to release oil and natural gas. In particular, fracking activities include the injection of water, chemicals, proppant, and/or tracers (i) to prepare geologic formations for hydraulic fracturing, (ii) to complete a hydraulic fracturing stimulation stage, (iii) to evaluate the extent of resulting fractures, and (iv) to ensure the future ability to continue enhancement of production through stimulation by hydraulic fracturing. During each hydraulic fracturing stimulation stage, pressurized fluids containing carrier fluids such as water or gas and any combination of proppant and chemicals are injected into wells, to fracture portions of the formation surrounding a selected well section.
As part of its rulemaking, EPA is requesting comment on the information that should be obtained or disclosed and the mechanism for obtaining or disclosing information about chemicals and mixtures used in hydraulic fracturing. EPA is also seeking comment on best management practices for the generation, collection, reporting, and/or disclosure of public health and environmental information from or by companies that manufacture, process, or use chemical substances or mixtures in hydraulic fracturing activities—that is, practices or operations that can be implemented and verified in order to achieve protection of public health and the environment—and whether voluntary third-party certification and incentives for disclosure could be valuable tools for improving chemical safety. In addition, the EPA is seeking comment on ways to minimize reporting burdens and costs, avoid duplication of efforts, and maximize transparency and public understanding. Finally, EPA is soliciting comments on incentives and recognition programs that could be used to support the development and use of safer chemicals in hydraulic fracturing.
As authority for its rulemaking, EPA has invoked TSCA Section 8(d) (15 U.S.C. 2007 (d)), which authorizes EPA to require the submission of lists of health and safety studies conducted or initiated by or for, or known to or reasonably ascertainable by manufacturers, processors, and distributors of (and any person who proposes to manufacture, process, or distribute) any chemical substance or mixture. TSCA Section 8(d) also authorizes EPA to require the submission of copies of studies that are otherwise known by the person submitting the list. EPA has also invoked the Pollution Prevention Act (PPA) (42 U.S.C. 13101 et seq.), which makes pollution prevention the national policy of the United States. The PPA identifies an environmental management hierarchy in which pollution "should be prevented or reduced whenever feasible; pollution that cannot be prevented or recycled should be treated in an environmentally safe manner whenever feasible; and disposal or release into the environment should be employed only a last resort…" (42 U.S.C. 13103). Among other requirements, the PPA directs EPA to develop improved methods of coordinating, streamlining, and assuring public access to data collected under federal environmental statutes; to facilitate the adoption of source-reduction techniques by businesses; and to establish an annual awards program to recognize a company or companies that operate outstanding or innovative source reduction programs.
While the EPA has labeled its proposed rulemaking as a major first step in considering whether fracking should be a more transparent process, the oil and gas community is wary of any regulation which would undercut the growth and development of fracking. Instead, oil and gas producers have typically advocated for regulation on a state-by-state basis, which they believe will be more effective as well as more compatible with their business interests. At the same time, environmentalists have already criticized the EPA's proposed rulemaking as merely a "baby" step, because there is no guarantee that the EPA will issue rules mandating the disclosure of chemicals and mixtures used in fracking.
The controversy over disclosure will continue to grow. Fracking has already led to a natural gas boom in a number of states, including, in particular, North Dakota, Pennsylvania, Ohio, and Texas. Although drilling companies have been disclosing chemical information on an industry website (http://www.fracfocus.org/), critics contend that the website allows too many exemptions that keep ingredients secret and precludes ready aggregation of information concerning the specific chemicals used in fracking. Given the fracking boom, whether and to what extent the chemicals used in fracking are disclosed will undoubtedly remain a hot topic, both on the state and federal levels.
Now Online: IICLE Chapters on Environmental Law in Illinois Corporate and Real Estate Transactions
By: Alexander Bandza
As we previously reported, several Jenner & Block EHS lawyers authored chapters in the Illinois Institute for Continuing Legal Education's (IICLE) publication titled Environmental Law in Illinois Corporate and Real Estate Transactions 2014 Edition. The electronic (PDF) versions of these chapters are now available online:
Chapter 3, Environmental Considerations in Corporate and Real Estate Transactions, E. Lynn Grayson, Jenner & Block LLP, Chicago;
Chapter 4, Lender Liability Under Environmental Laws for Real Estate and Corporate Transactions, Gabrielle Sigel and Alexander J. Bandza, Jenner & Block LLP, Chicago;
Chapter 5, Illinois Environmental Forums, Steven M. Siros and Seth J. Schriftman, Jenner & Block LLP, Chicago; and
Chapter 10, Treatment of Environmental Obligations in Bankruptcy, Christine L. Childers, First American Bank, Elk Grove Village, and Keri L. Holleb Hotaling, Jenner & Block, Chicago.
The entire publication is available from IICLE here.
Happy Earth Day - 2014
By: Robert L. Graham and E. Lynn Grayson
In 2010, Jenner & Block's Environmental and Workplace Health and Safety Law Practice launched its Corporate Environmental Lawyer blog. We hope that you have found our updates and insights on critical environmental, health & safety developments to be helpful and informative. Now, on the occasion of our 500th blog, and as Jenner & Block celebrates its 100th anniversary, we wanted to provide a brief overview of our practice, highlight some key themes that we intend to focus on in the Corporate Environmental Lawyer blog in 2014, and wish you a Happy Earth Day.
Jenner & Block's Environmental Health and Safety Law Practice was founded in 1978. As environmental, health, and safety ("EHS") law has evolved over the past three decades, so too has our practice. Our attorneys are recognized authorities on environmental, health, safety, transactional, and energy matters. We offer comprehensive solutions to complex EHS problems, drawing on our collective past experience as environmental prosecutors, in-house counsel, and environmental law teachers since the 1970s.
As evidenced by our 500 plus blog entries, we have now embraced social media because it allows us to provide timely information on EHS issues of concern to our clients. Our Twitter account (JennerBlockEHS), created in 2012, further enables us to communicate real-time information on breaking EHS issues important to U.S. business, in-house environmental counsel, and EHS professionals.
In 2013, our blog focused on several key issues, including water scarcity and climate change. We also implemented a weekly feature that provides an overview of current EHS cases pending before the United States Supreme Court. In addition, we focused on evolving regulatory issues concerning TSCA reform, green chemistry, and CERCLA and RCRA liability.
We would like to thank you for your past support and hope that you will continue to rely on the Corporate Environmental Lawyer blog for timely EHS news in 2014 and beyond. If you have any suggestions on how we might improve our blog or our overall EHS communications, please feel free to contact us.
In celebration of Earth Day, and on the occasion of Jenner & Block's 100th anniversary, we are also planting 100 trees this summer to commemorate improvements in environmental quality. For more details on the Firm's 100th anniversary, please visit www.jenner.com/about/history.
Robert L. Graham (firstname.lastname@example.org) and E. Lynn Grayson (email@example.com), Co-Chairs, Environmental, Workplace Health and Safety Practice Group
Federal Railroad Administration to Issue Proposed Rule on Minimum Train Crew Size
By: E. Lynn Grayson
The U.S. Department of Transportation's Federal Railroad Administration (FRA) recently announced its intention to issue a proposed rule requiring two-person train crews on crude oil trains and establishing minimum crew size standards for most main line freight and passenger rail operations. The FRA also intends to advance a rulemaking on train securement and recommends a rulemaking on the movement of hazardous materials.
The announcement follows the deliberations of three Railroad Safety Advisory Committee (RSAC) Working Groups on Appropriate Train Crew Size, Securement, and Hazardous Materials Issues. All three Working Groups were created at DOT's request last summer in response to the Lac-Mégantic derailment. The emergency meeting was held to evaluate and consider wide-ranging proposals to further enhance railroad safety including the safe shipment of crude oil by rail. Two of the Working Groups produced recommendations that were adopted by the full RSAC for consideration in future rulemakings. In light of the working group's failure to reach consensus on crew size, the FRA took action today to move forward with a rulemaking.
While existing FRA regulations do not mandate minimum crew staffing requirements, current industry practice is to have two person crews for over-the-road operations. The notice of proposed rulemaking (NPRM) will most likely require a minimum of two person crews for most mainline train operations including those trains carrying crude oil. It is also expected to include appropriate exceptions.
FRA plans to issue an additional NPRM based on the consensus recommendations of the Securement Working Group and approved by the full RSAC that would prohibit certain unattended freight trains or standing freight cars on main track or sidings and require railroads to adopt and implement procedures to verify securement of trains and unattended equipment for emergency responders. It would also require locomotive cabs to be locked and reversers to be removed and secured. Railroads would also be required to obtain advance approval from FRA for locations or circumstances where unattended cars or equipment may be left.
The full RSAC also approved four recommendations of the Hazardous Materials Issues Working Group relating to identification, classification, operational control and handling of certain shipments. The four recommendations, directed to the Pipeline and Hazardous Materials Safety Administration (PHMSA), include amending or revising the definitions of "residue" and "key train," and clarifying its regulatory jurisdiction over the loading, unloading and storage of hazmat before and during transportation. PHMSA continues to advance a rulemaking addressing the integrity of DOT Specification 111 tanker cars and the safe shipment by rail of flammable materials such as crude oil.
On August 29, 2013, the first-ever emergency session of the RSAC was held in response to the July 6, 2013 derailment of an unattended Montreal, Maine and Atlantic Railway freight train containing crude oil in Lac-Mégantic, Quebec, Canada. Building upon Secretary Anthony Foxx's February Agreement with the Rail and Petroleum Industries, the FRA's Emergency Order 28 and Safety Advisory 2013-06, PHMSA's Operation Safe Delivery, Safety Alerts and a DOT Emergency Order, the three RSAC working groups reviewed existing regulations and standards to identify and mitigate the risks posed by such shipments and prevent future accidents.
IICLE Releases New Environmental Law Publication
By: E. Lynn Grayson
The Illinois Institute for Continuing Legal Education (IICLE) has released a new publication titled Environmental Law in Illinois Corporate and Real Estate Transactions 2014 Edition.
According to IICLE, this publication is a unique resource that balances Illinois business and real estate practice with environmental law issues. Whether you represent commercial landlords, manufacturers, real estate developers, government agencies, or private landowners, this handbook will prepare you to tackle any environmental issue. It also includes guidance on how to conduct an "all appropriate inquiries" investigation in a real estate transaction, the environmental due diligence process, practice in various environmental forums in Illinois, programs and redevelopment incentives to return brownfields to productive use, and how federal bankruptcy law intersects with environmental issues in real estate transaction.
The following chapters in this publication were authored by Jenner & Block EHS lawyers.
* * *
Chapter 3 – Environmental Considerations in Corporate and Real Estate Transactions
E. Lynn Grayson, Jenner & Block LLP, Chicago
Chapter 4 – Lender Liability Under Environmental Laws for Real Estate and Corporate Transactions
Gabrielle Sigel and Alexander J. Bandza, Jenner & Block LLP, Chicago
* * *
Chapter 5 – Illinois Environmental Forums
Steven M. Siros and Seth J. Schriftman, Jenner & Block LLP, Chicago
* * *
Chapter 10 – Treatment of Environmental Obligations in Bankruptcy
Christine L. Childers, First American Bank, Elk Grove Village, and Keri L. Holleb Hotaling, Jenner & Block, Chicago
The publication is available from IICLE at http://iicle.inreachce.com/.
Green Climate Fund Board Makes Key Decisions On Operations
By Keri L. Holleb Hotaling
Last week, the Board of the Green Climate Fund (the "Fund") met in Bali, Indonesia. The Fund was designated as an operating entity of the financial mechanism of the United Nations Framework Convention on Climate Change ("UNFCCC"). The Fund's purpose is to promote, within the context of sustainable development, the "paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to help limit or reduce their greenhouse gas emissions and to adapt to the unavoidable impacts of climate change." The United States and other industrialized countries at the 2009 climate summit in Copenhagen pledged $100 billion a year to the Fund—from public and private sources—as climate aid beginning in 2020.
During the three-day meetings in Bali, the Fund's Board members agreed, among other things, that the Fund will aim for a 50:50 balance between mitigation and adaptation efforts and designate 50% of adaptation funding for "particularly vulnerable countries," including least developed countries, small island developing states and African states. The Board of the Fund also determined that it will maximize engagement with the private sector and be a leader on "gender mainstreaming" and will define its gender action plan in October 2014. Click here for a link to the press release.
EPA Evaluating Regulation of Impacts to Water from Fracking Activities
By: Seth J. Schriftman
In a February 5, 2014 memorandum to Nancy Stoner, U.S. EPA’s Acting Assistant Administrator for Water, the EPA’s Office of the Inspector General (“OIG”) stated that it is starting preliminary research on the EPA’s and the States’ ability to manage potential threats to water resources from hydraulic fracturing (“fracking”). The memorandum’s primary purpose is to kick off this project and to confirm the objective and strategy of the evaluation. The objective is to evaluate how the EPA and the States have used their existing authorities to regulate fracking impacts to water sources. The corresponding strategy is to determine and evaluate what regulatory authority is available to the EPA and the States, identify potential threats to water resources from fracking, and evaluate the EPA’s and States’ responses to them.
The proposed plan is to gather information from States with substantial fracking activity, and to contemporaneously contact environmental groups, industry groups, and gas and oil producers. The anticipated benefits of this project include improved preventative and responsive measures and improved coordination with the EPA, States, and industrial sector to ensure that water resources are adequately protected from the impacts of fracking.
EPA 2013 Enforcement Results: Higher Penalties With Fewer Enforcement Proceedings
By: Steven M. Siros
U.S. EPA recently released its 2013 enforcement report, which highlights the $5.6B in fines, restitution and court-ordered environmental projects that U.S. EPA obtained in civil and criminal enforcement proceedings in 2013 (as compared to $200M in 2012). It should be noted, however, that the Deepwater Horizon events themselves accounted for $5B of the $5.6B collected by U.S. EPA in 2013. Two additional matters accounted for $450M of the remaining $600M collected by U.S. EPA.
U.S. EPA acknowledged that it pursued 20% fewer enforcement cases in 2013 although the magnitude of the Deepwater Horizon prosecution provides a partial explanation for this enforcement decrease. However, this enforcement decline is consistent with U.S. EPA's draft Strategic Plan for 2014-2018 which was the subject of an earlier blog post . As discussed in the earlier post, instead of focusing on the numeric volume of enforcement cases, U.S. EPA's strategic plan proposes to target larger and more complex environmental violations and violaters.
Please click here to go to U.S. EPA's 2013 enforcement results website.
EPA Signs Final E-Manifest Rule
By: E. Lynn Grayson
EPA signed a final rule authorizing the use of electronic manifests for hazardous waste transportation as an alternative to paper manifests traditionally relied upon. The final rule will authorize the use of electronic hazardous waste manifests that will become available when EPA establishes a new electronic hazardous waste manifest system (e-manifest). The modification will provide waste handlers with the option to complete, sign, transmit, and store manifest information electronically in the electronic system. States that currently receive and collect paper manifest copies will receive copies of manifest data electronically from the system.
On October 5, 2012, President Obama signed into law, the Hazardous Waste Electronic Manifest Establishment Act which authorizes the EPA to implement a national electronic manifest system. Commonly referred to as "e-manifest", this national system is envisioned to be implemented by the EPA in partnership with industry and states.
Milestones for EPA Actions:
The Act requires that the e-Manifest Information Technology (IT) system must be up and running within three years after the Act is passed
The EPA must issue regulation authorizing use of electronic manifests within one year after the Act is passed
The EPA must establish a System Advisory Board within three years after the Act is passed in order to advise the EPA on system performance and user fees
e-Manifest extends to all federally- and state-regulated wastes requiring manifests
Allows that the use of electronic manifests is optional for users, and authorizes centralized collection of data from electronic and paper manifests
Fee and spending provisions:
Authorizes the EPA to collect reasonable user fees for all system related costs including development and maintenance
The rule is intended to streamline the uniform manifest system making it more cost-effective and user friendly. A pre-publication version of the final rule is available on the EPA website via http://www.epa.gov/epawaste/hazard/transportation/manifest/e-man.htm.
Pollution Control Board Denies Rulemaking For Coal/Coke…For Now
By: Seth J. Schriftman
On January 23, 2014, the Illinois Pollution Control Board (“IPCB”) denied a motion for emergency rulemaking regarding coal and coke processing, transport, storage, and handling, which was submitted by the Illinois Environmental Protection Agency (“IEPA”) only a week earlier. Within the several days between the filing and ruling, the IPCB received 34 written comments from industry groups, environmental groups, the City of Chicago, Illinois House Representatives, and others, all voicing their opinions for and against the proposed emergency rules. Criticisms and critiques were plentiful. Many industry groups expressed their concerns about the economic feasibility of abiding by such rules and did not believe the circumstances necessitated an “emergency.” Conversely, environmental groups applauded the rules and offered potential suggestions for additional improvement. Additionally, in its response, the City of Chicago expressed that it is currently seeking comments (until February 7, 2014) on its own proposed regulations regarding petroleum coke. In the end, the motion was denied, primarily because the issues described were not deemed to be an “emergency” according to IPCB Rules and case precedent. However, in denying the IEPA’s motion, the IPCB was clear that such rules, in a future form, may soon be promulgated through the regular rule-making process.
As background, as defined by the IEPA, “coke” is “solid, carbonaceous material derived from the distillation of coal,” including metallurgical coke (“metcoke”). The term “coke” is also used to describe materials derived from “oil refinery coker units or other crackling units or other crackling processes,” including petroleum coke (“petcoke”). Coke is used as alternative fuel in coal-fired power plants and cement kilns.
In its motion, the IEPA asserted that dust from both coke and coal is a type of fugitive particulate matter (“PM”) that is subject to National Ambient Air Quality Standards (“NAAQS”), and that exposure to PM can lead to serious health consequences, including cardiovascular and respiratory effects. The IEPA asserted that an emergency existed to warrant its motion, because:
- large clouds of black dust had travelled beyond the boundaries of coal/coke facilities into nearby neighborhoods and schoolyards;
- coke and coal dust had accumulated on lawns, pools, vehicles, building siding, and furniture; and
- coke and coal dust had been blown onto residences, schools, and businesses on a daily basis, which would make residents avoid opening windows or engaging in outdoor activities.
Although the proposed rules would have applied State-wide, the catalyst for these proposed regulations appears to have been several bulk storage terminals located in Cook County. The emergency rules (which would have been temporary, expiring after 150 days) were aimed at providing 1) fugitive dust controls, 2) water pollution controls, and 3) hazardous waste determinations. For example, these rules would have required that all coke and coal storage piles be enclosed within two years (with an enclosure plan to be submitted to the IEPA within 45 days of the rule effective date), the creation of a Coke and Coal Fugitive Dust Plan within 45 days, piles of coal and coke would have to meet certain height and width restrictions, coal and coke would have to be placed on impermeable pads with certain setbacks from water sources within 60 days, necessary wastewater and storm water runoff permits would have to be applied for within 45 days, only paved roads could used for transport within 90 days, there would be cover, wind, and speed restrictions on when and how coal and coke could be transported, and there would be additional monitoring and equipment modification requirements.
In the IPCB’s Opinion and Order of the Board (the “Opinion”), which thoroughly summarized the IEPA’s motion, the comments received, and the IPCB’s analysis, the IPCB decided unanimously (4-0) to deny the IEPA’s motion to enter the proposed emergency rules. The IPCB held that the IEPA had failed to demonstrate that a situation existed which constituted a threat to the public interest, safety, or welfare. However, the IPCB admitted that “the rules governing bulk terminal operations for petcoke and coal could be improved” and that the IEPA’s proposal would benefit by proceeding through the regular rulemaking process. Thus, it appears that these emergency rules may provide a starting point for further non-emergency rulemaking regarding the processing, transport, storage, and handling of coal and coke materials in Illinois in the near future.
Department of Defense Publishes Proposed Rule Regarding Storage, Treatment, and Disposal of Toxic or Hazardous Materials
By: Genevieve Essig
Yesterday, the Department of Defense published proposed rule 79 CFR 4648 (Jan. 29, 2014), which relates to DFARS regulations on the storage, treatment, and disposal of toxic or hazardous materials. The rule in essence seeks to catch up 48 CFR 223.71, which contains a prohibition on the storage and disposal of non-DoD-owned toxic or hazardous materials on DoD installations and exceptions to that prohibition, as well its associated contract clause at 48 CFR 252.223-7006, to the current version of the underlying statute 10 U.S.C. 2362 (Storage, Treatment, and Disposal of Nondefense Toxic and Hazardous Materials). 10 U.S.C. 2362 has been revised and updated a number of times without corresponding changes being made in the regulations. The rule revises, reorganizes, and renumbers various existing provisions, as well as adds a handful of new provisions. Some examples of the more substantive updates are as follows:
Three New Superfund Sites Named In Indiana
The word “treatment” is added in several places to ensure that the prohibition applies not only to the storage and disposal of toxic/hazardous materials but also their treatment. The modifier “toxic and hazardous” is also updated to “toxic or hazardous.”
A number of changes are made to the enumerated list of exceptions to the prohibition provided in 223.7102 (redesignated 223.7104). E.g.:
New subparagraph (a)(1) provides a new exception for the storage, treatment or disposal of materials “used in connection with an activity of DoD or in connection with a service performed on a DoD installation for the benefit of DoD.”
New subparagraph (a)(11) provides a new exception for storage where the material is “required or generated in connection with the use of a space launch facility located on a DoD installation or on other land controlled by the United States.
Existing (a)(2) (redesignated (a)(3)) is revised to expand the existing exception to situations involving State or local law enforcement (instead of just Federal law enforcement).
Existing (a)(8) (redesignated (a)(9)) is revised to remove the reference to “by a private person,” expanding the existing exception to material “required or generated in connection with the authorized and compatible use of a facility of DoD.” Such uses include “testing material or training personnel."
Existing (a)(9) (redesignated (a)(10)) is similarly revised to expand the existing exception to material “required or generated in connection with the authorized and compatible use of a facility of that military department.” Potential qualifiers “by private person” and “commercial use” are removed.
Paragraph (b) is revised to add the requirement that the Secretary Defense, in granting exceptions to the prohibition “when essential to protect the health and safety of the public from imminent danger,” must find that the exception is essential and that the storage or disposal authorized “does not compete with private enterprise."
A new section 223.7105 adds that the Secretary may assess a charge for any storage or disposal provided under the subpart (to be identified in the contract).
Section 223.7103 (redesignated 223.7106) on the contract clause is revised to broaden the clause application to include all solicitations and contracts that “require, may require, or permit contractor access to a DoD installation.”
The basic contract clause at 252.223-7006 is revised to account for the storage/disposal charge authorized in 223.7105 and to require flowdown of the substance of the clause to “all subcontracts that require, may require, or permit a subcontractor access to a DoD installation” (any subcontract tier).
The flowdown provision of the alternate contact clause at 252.223-7006 is similarly expanded to “all subcontracts that require, may require, or permits a subcontractor access to a DoD installation” (any tier). It is also clarified that such flowdown does not relieve the contractor of liability to the Government.
By E. Lynn Grayson
The U.S. Environmental Protection Agency has added three contaminated sites in Indiana to the Superfund National Priorities List:
1. Beck's Lake in South Bend, a public recreation area contaminated with arsenic from past waste disposal activities;
2. Garden City Ground Water Plume in Garden City where drinking water wells are impacted with TCE; and,
3. Keystone Corridor Ground Water Contamination site in Indianapolis where PCE and TCE have been found in soil and groundwater from former dry cleaning operations.
More information about EPA's latest additions to the National Priorities List is available at: http://www.epa.gov/superfund/sites/npl/current.htm. A complete list of EPA Region 5 Superfund sites can be found at: http://www.epa.gov/region5/cleanup/index.htm.
New CERCLA Article Published In Environmental Law Reporter
By E. Lynn Grayson
Jenner & Block Partner Keri L. Holleb Hotaling and Associate Allison A. Torrence recently published an article titled "EPA Administrative Orders on Consent, CERCLA § 113(F) Contribution Actions, and the Operative Statute of Limitations After Atlantic Research," in the Environmental Law Institute's Environmental Law Reporter. The article explores contribution issues under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for companies that have entered into an administrative order on consent (AOC) with the U.S. Environmental Protection Agency (EPA). The article explains that while many parties choose to address CERCLA liability concerns through AOCs, courts are still struggling with the legal ramifications related to contribution claims following entry of an AOC. The authors caution that the U.S. Supreme Court's seminal United States v. Atlantic Research Corp. and Cooper Industries, Inc. v. Aviall Services, Inc. decisions have created complex issues that parties should consider before entering into an AOC – most significantly, what type of CERCLA claim may be available and when the statute of limitations will begin to run on those claims. Incoming associate Alexander J. Bandza also contributed to the article.
The article can be viewed at Jenner & Block's website at http://jenner.com/library/publications/12399.
EPA Ordered To Move Forward With Coal Ash Waste Rule
By Allison A. Torrence
On October 29, 2013, a federal district court judge ordered EPA to submit to the court within 60 days a plan and schedule for finalizing coal ash rules under the Resource Conservation and Recovery Act (RCRA). Appalachian Voices v. McCarthy, No. 12-cv-00523 (D.D.C. Oct. 29, 2013). Coal ash, also called coal combustion residuals (CCRs), is created as a byproduct of coal combustion at power plants. Coal ash is generally disposed of in either liquid form in surface impoundments or in solid form at landfills and is largely exempt from hazardous waste and solid waste regulations under RCRA.
Recent interest in regulating coal ash waste was prompted by the December 2008 spill at a coal ash storage facility for the Tennessee Valley Authority’s Kingston Fossil Plant. An estimated 1 billion gallons of coal ash slurry was released from the Kingston facility after a retaining wall in the surface impoundment failed. In response to the coal ash spill, in June 2010, EPA proposed to regulate coal ash to address the risks from the disposal of coal ash waste. The 2010 proposed rules provided two options for regulating coal ash: (1) regulate coal ash as a special waste under RCRA’s hazardous waste regulations; or (2) regulate coal ash under RCRA’s non-hazardous solid waste regulations. EPA has received approximately 450,000 comments on these proposed rules and has published additional data on the proposed rules, but has yet to finalize any regulations. Under the solid waste proposed rule, current surface impoundments would have to be retrofitted with new composite liners or cease operations within five years. Existing landfills would not need new liners, but would require groundwater monitoring. In the event that EPA were to elect to regulate coal ash as a special waste, coal ash impoundments or landfills would need RCRA permits and surface impoundments would effectively be phased out of use due to land disposal restrictions. Although EPA has indicated that the second option - regulating coal ash as a non-hazardous solid waste - is the most likely outcome, it has yet to issue final regulations.
After almost four years of inaction on the regulatory front, several environmental organizations sued EPA under the citizens’ provisions of RCRA for failure to finalize its RCRA regulations for coal ash. The environmental groups argued that under the statutory language in RCRA, EPA is required to review and, if necessary, revise hazardous waste and solid waste regulations every three years. Thus, they argued that EPA was required to review its decision not to regulate coal ash as a hazardous waste or solid waste at least every three years, which it has failed to do. In his October 29th Memorandum Opinion, District Court Judge Walton ruled in favor of EPA on a number of counts, holding that coal ash is exempted from RCRA’s general review and revision process for hazardous wastes. Nevertheless, Judge Walton ruled in favor of the environmental groups on the issue of non-hazardous solid waste regulations. Judge Walton held that EPA has a non-discretionary duty to review and, if necessary, revise solid waste regulations concerning coal ash at least every three years. Judge Walton declined to provide a set deadline for EPA to issue its review or regulations. Instead, he ordered EPA to submit a proposed scheduling order setting forth a proposed deadline by which it will comply with its statutory obligations under RCRA. EPA must submit this proposed schedule within 60 days (by December 30, 2013), at which point the environmental groups will have an opportunity to file a response to EPA’s proposed schedule.
EPA Proposes Increased Oversight Of State Enforcement Activities
By Steven M. Siros
U.S. EPA recently issued a draft strategy document in response to a December 2011 Inspector General Report that found inadequate enforcement of environmental laws at the state level. U.S. EPA's draft "National Strategy for Improving Oversight of State Enforcement Performance" outlines several possible enforcement options, including U.S. EPA overfiling and/or removal of a state's delegated authority to administer specific federal programs.
The draft strategy document acknowledges that although many states have effective enforcement programs, "state performance in meeting national enforcement goals and taking necessary enforcement actions varies across the country." Specific issues identified in the strategy document included (1) widespread and persistent data inaccuracy and incompleteness; (2) routine failure of states to identify and report serious non-compliance; (3) routine failure of states to take timely or appropriate enforcement actions; and (4) failure of states to seek appropriate penalties.
In an effort to address these issues, the strategy document proposes a tiered process. In the first instance, U.S. EPA would work with the state regulators in an effort to focus attention on the issue. If that is unsuccessful, the next step would be to elevate the issue to higher levels of management within the state. If the issue remains unresolved, U.S. EPA may elect to take more direct action, including conducting federal-only inspections and/or bringing federal-only cases. Finally, if these efforts fail, U.S. EPA may elect to overfile, withhold grant monies, or in rare circumstances, withdraw a delegated state program.
The draft strategy document has been sent to the states for review and comment. Notwithstanding any comments that might be received from the states, this strategy document clearly illustrates that U.S. EPA is closely evaluating state enforcement activities and appears ready and able (now that the shutdown is over) to step in and take action in situations where it decides that the states are not actively enforcing environmental laws.