The Need to Be Green: Focus on Environmental Sustainability Can Inure to Bottom Line for Cannabis Industry
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
A recent article published in Politico highlights some of the potential impacts of cannabis production on the environment. As the production of cannabis accelerates across the United States, it is becoming increasingly likely that the environmental impacts of cannabis production will become more regulated especially in the areas of energy use and water reliance. Cannabis companies would be well served to ensure that they have effective environmental management strategies in place to not only ensure continued compliance but also to reduce the companies’ environmental footprint that could in turn result in significant cost savings.
For example, according to the article, a typical growing operation can consume up to 2,000 watts of electricity per square meter for indoor growing operations as compared to 50 watts of electricity for growing other leafy greens such as lettuce. According to a recent study, at least one expert estimates that cannabis production accounts for about one percent of electricity consumption in the United States. Depending on the source of electricity, greenhouse gas emissions may be generated in the course of energy production that could be attributable to the cannabis operation’s carbon footprint. President Biden is focused on reducing greenhouse gas emissions and one the key focus industries for President Biden is the agricultural industry. Implementing an energy efficiency program with a focus on renewable energy sources may allow cannabis companies to be better positioned to comply with future regulations while at the same time reducing overall energy costs.
Although not discussed in the article, cannabis production can be a fairly water intensive process with some studies estimating usage as high as six gallons per plant. A recent study concluded that by 2025, total water use in the legal cannabis market is expected to increase by 86%. As water scarcity issues become more prevalent especially in light of the changing climate, ensuring adequate sources of water will be critical to ensuring the ability to continue to grow cannabis plants. At the same time, adopting effective water conservation procedures will allow facilities to reduce their environmental footprint with resulting cost savings.
For more detailed insight on these issues, please click here for an article that was recently published in the Cannabis Law Journal.
Great Lakes Cleanup Part of Infrastructure Package?
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
As part of the infrastructure package that was just approved on a bi-partisan basis by the Senate and is now moving on to the House, the Great Lakes Restoration Initiative (“GLRI”) could receive approximately $1 billion for the remediation of impacted site and waterways in the Great Lakes region.
Since its inception in 2010, the GLRI has provided funding to 16 federal organizations to strategically target the biggest threats to the Great Lakes ecosystem and to accelerate progress toward achieving long term goals:
- Fish safe to eat;
- Water safe for recreation;
- Safe source of drinking water;
- All Areas of Concern delisted;
- Harmful/nuisance algal blooms eliminated;
- No new self-sustaining invasive species;
- Existing invasive species controlled; and
- Native habitat protected and restored to sustain native species.
One of the primary areas of focus of GRLI’s most recent action plan is the remediation of “Areas of Concern” (“AOCs”) that are defined as "geographic areas designated by the Parties where significant impairment of beneficial uses has occurred as a result of human activities at the local level." There are currently more than 26 AOCs in the Great Lakes basin that could be cleaned up using monies appropriated in the current version of the infrastructure bill.
We will continue to track the progress of the infrastructure bill and the availability of funds to address AOCs in the Great Lake basin at the Corporate Environmental Lawyer.
EPA to Revise or Replace Trump-Era Clean Water Act Rules, But Will Leave Existing Rules In Place For Now
By Allison A. Torrence
The U.S. Environmental Protection Agency (“EPA”), under Administrator Michael Regan, has begun the process of reviewing and revising two key Clean Water Act (“CWA”) rules: The Navigable Waters Protection Rule and the CWA Section 401 Certification Rule. In recent court filings in cases where litigants have challenged both of these Trump-era rules, EPA has requested those cases be remanded because EPA has commenced new rulemaking processes that will revise or replace the challenged rules. However, if the courts grant EPA’s requests, EPA has requested that the existing rules remain in effect until EPA finalizes replacement rules through the formal notice and comment rulemaking process.
The first of the two key CWA rules at issue is the Navigable Waters Protection Rule, which defines “Waters of the United States”. This is a significant rule and definition because the jurisdiction of the CWA is limited to Waters of the United States. Thus, by setting the definition of Waters of the United States, EPA establishes the reach of the CWA. Due to the significance of this definition, it has been widely contested throughout the years and every attempt by EPA and the U.S. Army Corps of Engineers to promulgate a definition has faced legal challenges.
In 2019, the Trump Administration rescinded the Obama-era Waters of the United States rule and in 2020, issued the Navigable Waters Protection Rule, narrowing the definition of Waters of the United States. The most significant change in the Trump rule is that the new definition excludes ephemeral waters (those flowing only in direct response to precipitation) and many wetlands that are near other jurisdictional waters but lack a physical or surface connection to them.
In several court filings in June, EPA has stated its plans “to commence a new rulemaking to revise or replace the [Navigable Waters Protection] rule.” Notably, EPA is not requesting vacatur of the existing rule during the rulemaking process.
The second CWA rule facing a similar fate is the CWA Section 401 Certification Rule. Under the CWA, a federal agency may not issue a permit or license for an activity that may result in a discharge into a Water of the United States unless a Section 401 Certification has been issued verifying compliance with water quality requirements. States and authorized tribes are generally responsible for issuing Section 401 Certifications, and they are required to act on a Section 401 Certification request “within a reasonable period of time (which shall not to exceed one year) after receipt” of such a request. 33 U.S.C. § 1341(a)(1).
The Trump EPA issued the final CWA Section 401 Certification Rule on July 13, 2020, with the goal of expediting infrastructure permitting by making the 401 Certification process quicker. The biggest changes made by this rule were limiting the scope of state and tribal certification review and limiting the imposition of conditions in the certifications. Just as with the Navigable Waters Protection Rule, EPA has now indicated in court filings (and on its website) that the Section 401 Certification Rule is under review and will be revised or revoked, but also will not be vacated in the interim.
EPA has a lot of work ahead to propose new versions of these rules for public review and comment. Promulgation of final rules will therefore be many months, if not more than a year away. In the meantime, environmental groups and other challengers have indicated they will continue to challenge the Trump-era rules still in effect. The Corporate Environmental Lawyer blog will keep a close watch and report on all key developments.
Analysis of Recent and Forthcoming State Legislation on Toxic Chemicals in Cosmetics and Personal Care Products and Preemptive Effects of Existing Federal Legislation
By Matthew G. Lawson
According to a report released in February 2021 by the organization Safer States, at least 27 US states will consider proposed legislation to regulate toxic chemicals in 2021. While a large driver of the proposed state laws is growing public concern over drinking water contamination from “emerging contaminants,” including PFAS (per- and polyfluorinated alkyl substances) and 1,4-dioxane, a secondary focus has been to minimize the risk of adverse human health effects from exposure to these toxic chemicals in cosmetics and personal care products. Two states—New York and California—are spearheading these efforts through recently enacted laws to limit or prohibit certain toxic chemicals in cosmetics and personal care products that are set to take effect in 2022 and 2025, respectively. As other states consider their own bills to enact similar regulation of chemicals in cosmetics and personal care products, heightened attention will likely be paid to what extent the existing federal regulation of these products may preempt this new wave of state legislation.
- Federal Regulation of Chemicals in Cosmetics and Personal Care Products
At the federal level, chemicals used in cosmetics and other personal care products are primarily regulated by either the Toxic Substrates Control Act (TSCA) or the Federal Food, Drug, and Cosmetic Act (FD&C Act). While TSCA broadly applies to any “chemical substance,” certain chemicals or uses of chemicals are exempt from TSCA if they are regulated by other federal statutes. Such products include “cosmetics” regulated by the FD&C Act, which are defined as “articles 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.” While the distinction between a cosmetic and personal care product may not always be apparent to the consumer, the difference is crucial with respect to federal oversight of the chemicals contained in the product.
Non-cosmetic, personal care products are regulated under TSCA, as amended by the Frank R. Lautenberg Chemical Safety Act of the 21st Century, which requires the Environmental Protection Agency (EPA) to identify “high-priority chemicals” used in existing commerce and determine whether any current uses of the chemicals “present an unreasonable risk of injury to health or the environment.” Where an unreasonable risk is identified, the EPA has discretion to impose conditions on or outright ban the chemical use. Prior to introducing a new chemical or new use of an existing chemical into commerce, manufacturers are required to provide notice to the EPA so that the agency may assess whether the proposed chemical or use will pose an unreasonable risk. In contrast, chemicals used in cosmetic products are regulated by the Food and Drug Administration (FDA) pursuant to the FD&C Act and generally do not require registration or preapproval by the agency before being introduced into commerce. Moreover, the FDA does not have authority to require a recall where it identifies a potential health hazard in a cosmetic product. However, the FDA does have authority to regulate the labeling of cosmetic products and to outright ban specific ingredients from being used in cosmetics generally.
- State Regulation of Chemicals in Cosmetics and Other Personal Care Products—Newly Enacted Laws and Anticipated Future Legislation
While the regulation of chemicals in cosmetic and personal care products has historically been left to the purview of the EPA and the FDA, in recent years a growing number of states have expressed interest in directly regulating chemicals in cosmetic and personal care products sold within their jurisdictions. In 2019 and 2020, state regulation of these chemicals took a significant step forward as New York and California signed into law two bills regulating chemicals used in cosmetic and/or personal care products. A brief description of both state laws is provided below.
- New York: On December 9, 2019, Governor Cuomo signed into law New York Senate Bill 4389-B/A.6295-A, making New York the first and only state to set a maximum contaminant limit of 1,4-dioxane in consumer products. While there are no direct consumer uses of 1,4-dioxane, the compound may be present in cosmetics and personal care products as a byproduct of the manufacturing process (according to one 2007 Study, approximately 22% of cosmetic and other personal care products may contain 1,4-dioxane). New York’s legislation, which takes effect on December 31, 2022, prohibits the sale of personal care products containing more than 2 ppm of 1,4-dioxane and the sale of cosmetic products containing more than 10 ppm of 1,4-dioxane.
- California: On September 30, 2020, Governor Newsom signed into law the Toxic-Free Cosmetics Act, California Assembly Bill 2762, banning 24 chemicals, including mercury, formaldehyde, and certain types of PFAS, from being used in cosmetic, beauty, and personal care products sold in California. California’s legislation is set to take effect in 2025 and will mark the first state-level prohibition on the various chemicals in cosmetic products.
In addition to New York and California’s recently enacted legislation, there are at least five bills currently being considered by various states that would further regulate chemicals in cosmetic and/or personal care products sold within the respective jurisdictions. A brief summary of these state bills is provided below:
- Connecticut: SB 404—Prohibiting the sale or distribution of consumer products that contain PFAS (currently before the Joint Committee on Public Health).
- Maryland: HB 0643—Prohibiting the sale or distribution of cosmetic products that contain PFAS, mercury, and other chemicals in certain instances (currently passed in both chambers and before the Governor).
- New Jersey: A 189 / S 1843—Prohibiting the sale and distribution of nail salon products that contain dibutyl phthalates, toluene, or formaldehyde (currently before the Assembly Consumer Affairs Committee); A 1720—Prohibiting the sale of hand sanitizers and body cleaning products containing triclosan (currently before the Assembly Consumer Affairs Committee).
- New York: A 143 / S 3331—Creating a list of “chemicals of concerns” known to exist in personal care products, requiring manufacturers of such products to disclose any chemicals of concerns contained in their products and prohibiting the sale of personal care products containing chemicals of concerns after three years (currently referred to Environmental Conservation Committee).
- Federal Preemption of State Laws
As more states continue to adopt new legislation to regulate chemicals in cosmetic and personal care products, manufacturers and/or trade organizations will likely bring preemption challenges to these state regulations. In the context of cosmetic products, the FD&C Act prohibits state or local governments from enacting “any requirement for labeling or packaging of cosmetics that is different from or in addition to, or that is otherwise not identical with” the federal rules. Thus, state laws that do not directly regulate the labeling or packing of cosmetics products but instead regulate the contents of these products will likely not run afoul of the FD&C Act’s preemption clause.
In contrast, state legislation governing chemicals in personal care products may be at a higher risk of being preempted by TSCA. TSCA broadly prohibits the enforcement of any state chemical regulation of a particular substance once the EPA completes a risk evaluation for the substance and either: (1) determines that the chemical will not present an unreasonable risk; or (2) concludes that the chemical presents an unreasonable risk under the circumstances of use, and promulgates a rule that restricts manufacturing or use of the chemical to mitigate the identified risks. Notably, the scope of TSCA’s preemption extends only to chemical uses examined in the EPA’s risk evaluation—meaning that the EPA’s failure to examine the use of a chemical in personal care products would make state regulation fair game. In addition, even where a risk evaluation of a particular chemical has been completed, TSCA will not preempt state laws that (1) only impose reporting, monitoring, or information obligations; or (2) environmental laws that regulate air quality, water quality, or hazardous waste treatment or disposal.
Early insight into the full scope of TSCA’s preemption provisions will likely be provided by anticipated challenges to individual state’s regulation of 1,4-dioxane. As explained above, New York has already taken steps to regulate 1,4-dioxane in personal care products and other states may soon look to follow suit. However, on January 8, 2021, the EPA released its final risk evaluation for 1,4-dioxane under TSCA. See 86 Fed. Reg. 1495. The EPA’s initial risk evaluation identified a number of “use conditions” in which 1,4-dioxane posed an unreasonable risk to occupational workers, but did not consider “use conditions” involving 1,4-dioxane’s presence in consumer products. In response to protests from industry, EPA’s final risk evaluation included a supplemental analysis of eight use conditions for 1,4-dioxane as a byproduct in consumer goods, including use in hobby materials; automotive care products; cleaning and furniture care products; laundry and dishwashing products; paints and coatings; and spray polyurethane foam. No unreasonable risks for these consumer uses were identified. Because the EPA’s supplemental risk evaluation examined but did not find any unreasonable risks from 1,4-dioxane in consumer products, an argument could be made that states are preempted from enacting their own 1,4-dioxane limits in consumer products. However, because the EPA’s risk evaluation did not specifically exclude cosmetic or personal care products, individual states may be able to argue that the preemption scope is limited only to the specific uses of 1,4-dioxane that were specifically examined during EPA’s risk evaluation. The resolution of any challenges to New York and other states’ regulation of 1,4-dioxane in consumer products will likely provide key insights into the scope of TSCA’s preemption powers.
EPA Announces Plans to Require Additional Chemical Reporting under its Toxic Release Inventory
By Matthew G. Lawson
On Friday, April 30, 2021, the Biden Administration’s Environmental Protection Agency (EPA) announced significant steps the agency intends to take under the Toxics Release Inventory (TRI) Program to implement expanded reporting requirements for companies that store and utilize hazardous chemicals, including new obligations to report the storage, use and any releases of ethylene oxide, a commonly used industrial chemical and sterilant for medical equipment and supplies. The TRI Program, which was established under Section 313 of the Emergency Planning and Community Right-to-Know Act (EPCRA), serves as a resource for the public to learn about annual chemical releases, waste management, and pollution prevention activities reported by nearly 22,000 industrial and federal facilities. Under the TRI Program, U.S. facilities operating in various industry sectors must report annually the quantity of certain chemicals they release to the environment and/or manage through recycling, energy recovery and treatment. A “release” of a chemical in the context of the TRI Program means that the chemical is emitted to the air or water, or placed in some type of land disposal.
A major component of EPA’s announcement is the agency’s intent to regulate ethylene oxide. The use and release of ethylene oxide by medical device sterilization companies have prompted a number of recent high-profile lawsuits alleging that releases of the chemical into the environment have caused increased cancer rates in communities adjacent to the facilities. EPA’s announcement notes that many existing sterilization facilities “are located near areas with Environmental Justice concerns,” and that individuals living adjacent to these facilities may be at a heightened risk from exposure to ethylene oxide. “Every person in the United States has a right to know about what chemicals are released into their communities,” EPA Administrator Michael S. Regan stated. “By requiring new and more data on chemical releases from facilities, EPA and its partners will be better equipped to protect the health of every individual, including people of color and low-income communities that are often located near these facilities but have been left out of the conversation for too long.” In the coming months, EPA will provide further details regarding the specific actions the agency intends to take to require sterilization facilities that use ethylene oxide to report under the TRI Program.
In addition to implementing new reporting requirements for companies utilizing ethylene oxide, EPA announced several other steps the agency plans to take that will increase reporting and public access to information under the TRI Program, including:
- Finalizing a longstanding proposed rule that will add natural gas processing facilities to the industry sectors covered under the TRI Program thereby increasing the publicly available information on chemical releases and other waste management activities of TRI-listed chemicals from this sector;
- Continuing to add new per- and polyfluoroalkyl substances (“PFAS”) to the list of chemicals that require reporting under the TRI Program, including the addition of perfluorobutane sulfonic acid (PFBS) following EPA’s toxicity assessment of the substance;
- Proposing a new rule to add high-priority substances under the Toxic Substances Control Act (TSCA) and chemicals included in the TSCA workplan to the list of chemicals that require reporting under the TRI Program; and
- Increasing public access to TRI data through improved search functionality and improved website interface.
EPA’s announcement marks the most recent step by the agency to implement the Biden Administration’s focus on environmental justice as a top priority of its environmental agenda. On the same day that EPA announced the agency’s updated TRI policy, EPA circulated a memorandum to all EPA-staff, indicating the additional actions the agency intends to take to fulfill its environmental justice commitment. These actions include: (1) increasing inspections of facilities that pose the most serious threats to overburdened communities; (2) focusing on implementing remedies that benefit communities, including through the incorporation of supplemental environmental projects; (3) increasing communications with overburdened communities to develop improved cleanup and non-compliance solutions; and (4) identifying locations where state regulators are not adequately protecting local communities and taking increased enforcement actions to “pick up the slack” if state regulators have not taken appropriate or timely actions.
The Corporate Environmental Blog will continue to follow developments on this issue in the coming months as EPA provides additional details on the specific actions it intends to take to expand the TRI Program.
Earth Day 2021: Biden’s American Jobs Plan Aims to End the Flow of Lead in Drinking Water
By Allison A. Torrence
As the Corporate Environmental Lawyer Blog celebrates Earth Day, we turn to the important topic of drinking water. Drinking water, like the air we breathe, is an environmental issue that everyone interacts with on a daily basis. But, much like air pollution, contamination of drinking water often has the largest impact on poor communities and communities of color.
In a 2019 report co-authored by environmental organizations Natural Resources Defense Council (“NRDC”), Coming Clean, and Environmental Justice Health Alliance (“EJHA”), the groups analyzed EPA data on community drinking water systems, concluding that there “is unequal access to safe drinking water, based most strongly on race.” The report made several important findings that lead to this conclusion, including:
- Drinking water systems that constantly violated the law for years were 40 percent more likely to occur in places with higher percentages of residents who were people of color.
- Nearly 130 million people in the U.S. got their drinking water from systems that violated federal law during the time period reviewed in the report.
- Small systems – those that serve less than 3,300 people – were responsible for more than 80% of all violations. The EPA has noted many small systems are “likely to serve low-income, vulnerable populations.”
While there are many contaminants that communities monitor for in drinking water, lead is one of the most public and concerning drinking water contaminants of concern. Lead in drinking water is caused by the very pipes and service lines bringing us our water, entering the water when a chemical reaction occurs in plumbing materials that contain lead. As we saw in the Flint, Michigan lead water crisis in 2016, this corrosion of metal from the pipes and fixtures is more severe when water has high acidity or low mineral content.
Lead in drinking water has been a target of environmental activists and agencies for years. Recently, EPA amended its Lead and Copper Drinking Water Rule, under the authority of the Safe Drinking Water Act, to add a new lead trigger level for drinking water monitoring and add more proactive measures to identify upgrades needed to reduce the effects of deteriorating infrastructure. However, this rule was finalized at the end of the Trump Administration and the Biden Administration extended the effective date through June 2021, likely to be pushed back further as Biden’s EPA evaluates whether it wants to make additional changes.
Taking a bolder step, President Biden’s latest proposed legislation under his “Build Back Better” agenda—the American Jobs Plan—includes significant funding and plans to address lead in drinking water. According to the American Jobs Plan Fact Sheet:
“President Biden’s plan will eliminate all lead pipes and service lines in our drinking water systems, improving the health of our country’s children and communities of color.”
The current proposal includes $45 billion to replace every lead water line across the nation. In addition to the lead-specific funding, the American Jobs Plan proposes funding for broader drinking water improvements, including $56 billion to upgrade and modernize drinking water supplies through grants and low-cost flexible loans to states, Tribes, territories, and disadvantaged communities; and $10 billion to provide funding to monitor PFAS substances in drinking water and invest in rural small water systems & household well & wastewater systems.
This drinking water funding is just one small part of the $2.65 trillion plan, but it will likely continue to play an important part of the President’s agenda. The Corporate Environmental Lawyer Blog will stay on top of all relevant developments as negotiations on the American Jobs Plan and other drinking water proposals advance.
Unexplained PFAS Contamination at Petroleum Spill Site Mystifies Environmental Regulators
By Steven M. Siros and Matthew G. Lawson
The North Carolina Department of Environmental Quality (DEQ) is continuing to investigate an unexplained source of per-fluorinated compounds (PFAS) contamination that may be associated with the deployment of a fire-fighting compound in response to a major gasoline release by the Colonial Pipeline system on August 14, 2020. The Colonial Pipeline, which spans 5,500 miles from Houston, Texas, to Linden, New Jersey, runs through a number of southern and mid-Atlantic states, including North Carolina. The active pipeline delivers an average of 100 million gallons of liquid petroleum products each day. On August 14, 2020, a leak in the pipeline resulted in the release of approximately 1.2 million gallons of gasoline into the environment near the town of Huntersville, North Carolina. The release was the largest onshore gasoline spill in the United States in over 20 years and in connection with Colonial Pipeline’s emergency response to that release, Colonial Pipeline sprayed a commonly used fire suppressant known as F-500 encapsulate on the contaminated land to minimize the risk that vapors from the release would ignite.
However, following Colonial Pipeline’s initial emergency response, new questions have emerged regarding PFAS that was detected at the release site. As part of the ongoing efforts to investigate the nature and extent of the gasoline release, DEQ directed Colonial Pipeline to collect samples from the F-500 encapsulate and test that encapsulate for various PFAS formations. The resulting test data found elevated levels—as high as 22,600 parts per trillion (“ppt”)—of at least three different PFAS compounds. Samples of a nearby surface water showed PFAS concentrations ranging from 1 ppt to 14.9 ppt.
The source of the PFAS is not readily apparent, however, because as verified by the Safety Data Sheet , F-500 is not known to contain PFAS compounds. In fact, F-500 acts differently than aqueous film forming foam (AFFF) to fight fires. AFFF is intended to separate oxygen from the fuel while F-500 works by removing the heat, neutralizing the fuel, and interrupting the free radical chain reaction. As such, it does not rely on fluorine compounds for effectiveness.
It is possible that the source of the PFAS identified by Colonial Pipeline was a result of residual AFFF residing in the storage tank or in the fire-fighting equipment that was used to dispense the F-500 encapsulating agent. The F-500 was transported to the site by the Pelham Alabama fire department and the fire-fighting equipment that sprayed the F-500 was supplied by the Hunterville Fire Department. However, notwithstanding that the equipment was supplied by the municipal fire departments and that the F-500 is not known to contain PFAS compounds, DEQ has still requested that Colonial Pipeline provide data demonstrating that there have been no PFAS impacts to soil or groundwater as a result of the emergency response.
This a cautionary tale for environmental health and safety professionals charged with maintaining emergency spill response materials, including fire suppressant products, for their respective organizations. Such professionals are faced with a unique challenge of ensuring that products maintained for spill containment or remediation purposes are not only fit for these purposes, but also that these products do not contain chemicals that pose a potential threat to human health or the environment. This challenge is particularly acute with PFAS, of which there are over 5,000 different formulations which can be found in a large variety of different consumer and industry products. Even if a decision is made to swap out one product that may historically contained PFAS with a new product that is purportedly PFAS-free, care should be taken to ensure that product distribution equipment is PFAS-free. Otherwise, one might find oneself in the unfortunate position of having to defend against claims relating to PFAS impacts in the environment.
10th Circuit Lifts Injunction in Colorado Challenge of Trump Waters of the United States Rule
By Allison A. Torrence
On March 2, 2021, the Tenth Circuit Court of Appeals reversed a ruling from the United States District Court for the District of Colorado in the case of Colorado v. EPA, et al., Nos. 20-1238, 20-1262, and 20-1263, that had issued a preliminary injunction blocking implementation of the Trump Administration’s Navigable Waters Protection Rule (“NWPR”) in the State of Colorado. Under the Tenth Circuit ruling, the NWPR was put back into force, and the State of Colorado’s case was remanded back to district court for further proceedings challenging the rule.
The NWPR is the latest attempt by EPA and the Army Corps of Engineers to define “Waters of the United States” and thereby define the jurisdiction of the Clean Water Act. The agencies have been grappling with this definition for nearly 50 years, and have faced nearly constant legal challenges along the way. In 2017, the Trump Administration rescinded the definition that had been promulgated under the Obama Administration, and in 2020, offered up its own definition in the NWPR. The NWPR narrows the definition of “Waters of the United States” from past definitions–notably by excluding certain wetlands and ephemeral streams from the definition and thus excluding them from the jurisdiction of the Clean Water Act.
A number of lawsuits were filed challenging the NWPR, including Colorado v. EPA. The Colorado case was significant because Colorado sought, and was granted, a preliminary injunction blocking implementation of the NWPR in the State of Colorado. The State had argued that by reducing the reach of the Clean Water Act, the NWPR caused irreparable injury to the State because Colorado would be forced to undertake additional enforcement actions in place of the federal government to protect the quality of its waterways. While the district court had found this to be sufficient injury to support the State’s preliminary injunction, the Tenth Circuit found that it was too speculative and uncertain. Thus, the preliminary injunction was rejected and reversed because the State of Colorado could not show irreparable injury. Notably, the Tenth Circuit did not address the merits of the State’s challenge to the NWPR.
Additionally, prior to the Tenth Circuit’s ruling, EPA and the Army Corps of Engineers had requested the court hold the appeal in abeyance for 60 days in light of the new leadership at the agencies following the election of President Biden. The court denied the request and issued its ruling lifting the preliminary injunction the following day. The Biden Administration has indicated it is reviewing the NWPR and may want to make changes to broaden the definition of “Waters of the United States” once again. If that is the case, the agencies may look to settle the Colorado case and other similar litigation with a promise of changes to come. The Corporate Environmental Lawyer Blog will monitor and report on these matters as they develop.
U.S. EPA Embraces Prior Administration’s PFAS Drinking Water Proposals
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
On February 22, 2021, U.S. EPA announced that it was moving forward with implementation of several regulatory proposals issued in the waning days of the Trump Administration. First, U.S. EPA announced that it was finalizing its regulatory determination under the Safe Drinking Water Act (SDWA) for perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid (PFOA). A regulatory determination is the first regulatory step in setting a maximum contaminant level (MCL) for these contaminants. The final regulatory determination, signed by Acting EPA Administrator Jane Nishida, reached the same conclusions as had been reached by former EPA Administrator Andrew Wheeler—(1) that these contaminants may have an adverse effect on the human health; (2) that the contaminants are known to be present in public water systems at a sufficient frequency and at levels that pose public health concerns; and (3) that regulation of these contaminants presents a meaningful opportunity to reduce health risks. Interestingly, U.S. EPA’s regulatory determination specifically acknowledges that its 2016 Lifetime Health Advisory Levels of 70 parts per trillion for both PFOA and PFOS continue to represent the best available peer reviewed scientific assessment for these chemicals, notwithstanding that many comments were submitted encouraging U.S. EPA to update and revise its 2016 Lifetime Health Advisory Levels. It is likely to take about four years to promulgate a final MCL for PFOS and PFOA.
U.S. EPA also reissued its proposed Fifth Unregulated Contaminant Monitoring Rule (UCMR5). The reissued USMR5 is identical to the draft that was issued on January 14, 2021 at the tail end of the Trump Administration but was temporarily put on hold when the Biden Administration took office. The proposed UCMR5 would require community water systems serving 3,300 people or more to monitor for a group of 30 chemicals (29 of which are PFAS substances) between 2023 and 2025. The monitoring is intended to provide U.S. EPA with data on the national occurrence of these chemicals in drinking water that at least in part will guide U.S. EPA in promulgating regulatory determinations for other PFAS substances. U. S. EPA will accept public comment on the draft UCMR5 for a period of 60 days following publication in the Federal Register.
We will continue to provide updates on U.S. EPA’s efforts to regulate PFAS substances in the Corporate Environmental Lawyer.
DOJ Rescinds Nine Trump Environmental Policies
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
On February 4, 2021, in accordance with President Biden’s Executive Order 13,990 (Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis), DOJ directed its ENRD Section and Deputy Section Chiefs to withdraw nine environmental policies that were put in place by the Trump Administration. The February 4th memorandum identifies the following nine withdrawn policies:
- “Enforcement Principles and Priorities,” January 14, 2021;
- “Additional Recommendations on Enforcement Discretion,” January 14, 2021;
- “Guidance Regarding Newly Promulgated Rule Restricting Third-Party Payments, 28 C.F.R. § 50.28,” January 13, 2021;
- “Equitable Mitigation in Civil Environmental Enforcement Cases,” January 12, 2021;
- “Civil Enforcement Discretion in Certain Clean Water Act Matters Involving Prior State Proceedings,” July 27, 2020;
- “Supplemental Environmental Projects (“SEPs”) in Civil Settlements with Private Defendants,” March 12, 2020;
- “Using Supplemental Environmental Projects (“SEPs”) in Settlements with State and Local Governments,” August 21, 2019;
- “Enforcement Principles and Priorities,” March 12, 2018; and
- “Settlement Payments to Third Parties in ENRD Cases,” January 9, 2018.
In support of rescission of these policies, DOJ’s Deputy Assistant Attorney General noted that these policies were inconsistent with longstanding DOJ policy and practice and inappropriately impeded DOJ’s exercise of its enforcement discretion. Two of the more controversial policies rescinded by DOJ’s February 4th memorandum related to the prohibition on the use of supplemental environmental projects (SEPs) in settlement agreements. Under the Trump Administration, DOJ had argued that the use of SEPS violated the Miscellaneous Receipts Act which requires that monies paid to the Government be deposited into the Treasury so that Congress could decide how the monies would be appropriated.
DOJ noted that it would continue to assess the matters addressed by the withdrawn policies and might elect to issue new guidance on these matters in the future. We will continue to track efforts by the Biden Administration the environmental policies of the Trump Administration at the Corporate Environmental Lawyer.
U.S. EPA Issues Final Guidance on PFAS SNUR
By Steven M. Siros, Co-Chair, Environmental and Workplace Health and Safety Law Practice
On January 19, 2021, four days after the close of the comment period, U.S. EPA issued its final guidance document to aid in implementation of its Significant New Use Rule (SNUR) for long-chain perfluoroalkyl carboxylate and perfluoroalkyl sulfonate chemical substances (PFAS). Not surprisingly, in light of the short time between the close of comments and issuance of the guidance, the final guidance remained largely unchanged from the draft version.
In July 2020, U.S. EPA finalized its PFAS SNUR that requires notice and U.S. EPA review before manufacturing and processing for use certain long-chain PFAS that have been phased out in the United States. In addition, articles containing these long-chain PFAS as part of a surface coating cannot be imported into the United States without submission of a Significant New Use Notice (SNUN).
The guidance provides examples of what would and would not be articles subject to the SNUR as well as clarification on what is meant as a “surface coatings.” Although U.S. EPA declined to provide a regulatory definition of “surface coating” in the PFAS SNUR, the guidance indicates that any long-chain PFAS meeting one of the following two criteria would be a surface coating covered by the SNUR:
- Coating on any surface of an article that is in direct contact with humans or the environment during the article’s normal use or reuse, whether the coating is oriented towards the interior or exterior of the article; or
- Coating on any internal component, even if facing the interior of the article, if that component is in contact with humans or the environment during the article’s normal use or reuse.
Many environmental groups noted that the “direct contact” standard and the refusal to consider potential exposures associated with the disposal and/or misuse of these articles was contrary to the provisions of the PFAS SNUR and these groups are urging the Biden Administration to revisit the guidance. Because the new guidance is not labeled as “significant”, it did not need to follow the formal notice-and-comment process but this would also arguably allow the incoming Biden administration to quickly rework and issue its own guidance for implementing the PFAS SNUR.
We will continue to provide updates on efforts by the Biden Administration to implement the PFAS SNUR on the Corporate Environmental Lawyer blog.
DOE Final Rule Seeks to Streamline NEPA Review of LNG Projects
By Steven M. Siros, Co-Chair, Environmental and Workplace Health and Safety Law Practice
The Trump administration continues its efforts to issue new regulations in advance of January 20, 2021, with the Department of Energy (DOE) issuing a final rule that will exempt certain liquefied natural gas (LNG) projects from National Environmental Protection Act (NEPA) review. The final rule, published in the Federal Register on December 4, updates DOE’s NEPA implementing procedures with respect to authorizations issued under the Natural Gas Act in accordance with the recent revisions to the NEPA regulations as further described below.
According to DOE, the focus of the new rule is to clarify the scope of DOE’s NEPA obligations with respect to LNG projects and more specifically, to eliminate from the scope of DOE’s NEPA review potential environmental effects that the agency has no authority to prevent. Because DOE’s discretionary authority under Section 3 of the Natural Gas Act is limited to the authorization of exports of natural gas to non-free trade agreement countries, the rule limits the scope of environmental impacts that DOE must consider to the impacts associated with the marine transport of the LNG commencing at the point of export.
To that end, the final rule revises DOE’s existing Categorical Exclusions (CATEX) to reflect that the only elements of LNG projects subject to NEPA review is the following:
B5.7 Export of natural gas and associated transportation by marine vessel.
Approvals or disapprovals of new authorizations or amendments of existing authorizations to export natural gas under section 3 of the Natural Gas Act and any associated transportation of natural gas by marine vessel.
Based on prior NEPA reviews and technical reports, DOE has determined that the transport of natural gas by marine vessel normally does not pose the potential for significant environmental impacts and therefore qualifies for a CATEX. As such, the only reason that DOE would be obligated to engage in a NEPA review of a LNG project would be if “extraordinary circumstances” were deemed to be present that could not be mitigated and therefore would preclude DOE's reliance on this CATEX.
The revised CATEX also removes the reference to import authorizations from CATEX B5.7 because DOE has no discretion with respect to such approvals. Finally, the final rule also removes and reserves CATEX B5.8 and classes of actions C13, D8, D9 because these actions are outside of the scope of DOE’s authority or are covered by the revised CATEX B5.7.
Interestingly, although the Federal Energy Regulatory Commission (FERC) has responsibility for approving the construction of LNG export terminals, it has previously declined to analyze the greenhouse emissions associated with such projects, noting that DOE is the appropriate agency to consider such impacts. However, with DOE now concluding that these projects are categorically excluded from such reviews, it remains to be seen if FERC will reconsider its approach to these operations.
The final rule is scheduled to take effect on January 4, 2021 and it remains to be seen what if any action a new Biden administration might take in response to this rule. Assuming that the Republicans retain control of the Congress, DOE would be required to go through the formal withdrawal process. Alternatively, if the Democrats take control of the Senate, the regulation could be repealed pursuant to the Congressional Review Act.
We will continue to track the Trump administration’s ongoing effort to finalize regulations in advance of January 20th as well as efforts by any new administration to rollback these regulations on the Corporate Environmental Lawyer.
Environmental Groups Allege EPA Failed to Engage in Endangered Species Act Consultation Before Implementing COVID-19 Enforcement Discretion Policy
By Leah Song and Steven Siros
On August 18, 2020, the Center for Biological Diversity, Waterkeeper Alliance, Inc., and Riverkeeper, Inc. (“Conservation Groups”) filed a new lawsuit in the U.S. District Court for the Southern District of New York against the U.S. Environmental Protection Agency and Administrator Wheeler (“EPA”) for failing to comply with their mandatory duties under the Endangered Species Act (“ESA”) in connection with promulgation of EPA’s COVID-19 enforcement discretion policy. More specifically, the Conservation Groups argued that the EPA failed to “initiate and complete ESA Section 7 consultation to ensure that EPA’s actions in response to the COVID-19 pandemic,” as described in the March 26, 2020 “COVID-19 Implications for EPA’s Enforcement and Compliance Assurance Program” (“Temporary Enforcement Policy”), would not jeopardize any listed species or their habitats. An analysis of the Temporary Enforcement Policy can be found at Jenner & Block’s Corporate Environmental Lawyer blog here.
Other environmental groups had previously challenged EPA’s Temporary Enforcement Policy, claiming that EPA was unreasonably delaying its response to a petition filed by the groups requesting that EPA issue an emergency rule requiring written notice from regulated entities that elect to suspend required environmental reporting and/or monitoring due to the COVID-19 pandemic. On July 8, 2020, Judge McMahon of the United States District Court for the Southern District of New York ruled that the Natural Resources Defense Counsel and other environmental organizations failed to show that they were injured by EPA’s purported “unreasonable delay” and therefore granted summary judgment in favor of EPA.
In this latest lawsuit, the Conservation Groups claim that EPA failed to engage in a required ESA Section 7 consultation prior to promulgating its Temporary Enforcement Policy. Notwithstanding that EPA’s Temporary Enforcement Policy explicitly states that regulated entities should “make every effort to comply with their environmental compliance obligations” and merely provides guidance on how EPA’s plans to exercise its long-held enforcement discretion in light of the challenges posed by the COVID-19 pandemic, the Conservation Groups’ complaint explains how the regulatory programs affected by the Temporary Enforcement Policy implicate the interests of listed species and their habitat as those programs are “intended to limit pollution and prevent adverse environmental harm.” For example, the complaint asserts that suspension of Clean Water Act’s National Pollutant Discharge Elimination System (“NPDES”) effluent sampling program “potentially affects listed species and critical habitats by allowing unmonitored and unreported (and hence unrestricted) contamination of waterways such species depend on.”
The Section 7 consultation process is meant to “insure that any action authorized, funded, or carried out by such agency . . . is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined . . . to be critical.” 16 U.S.C. § 1536(a)(2). The Section 7 consultation process must be initiated at “the earliest possible time” for any project that “may affect” listed species. 50 C.F.R. § 402.14(a). The Conservation Groups allege that the Temporary Enforcement Policy “clearly meets the ESA’s ‘may affect’ threshold for triggering the agency’s Section 7 consultation obligations.” While the Conservation Groups recognized the unique challenges posed by COVID-19, they stated “this does not mean that EPA may simply ignore its vitally important, and legally required, ESA Section 7 duties and disregard potential impacts on imperiled species and their critical habitats.” They argue there is no evidence that the EPA undertook Section 7 consultation with the U.S. Fish and Wildlife Service or the National Marine Fisheries Service, or even followed the emergency consultation process provided for in the ESA.
EPA announced that it will terminate its reliance on the Temporary Enforcement Policy on August 31, 2020 (although EPA stated that the termination in no way limits its ability to exercise enforcement discretion on a case-by-case basis). EPA’s termination announcement was previously discussed on Jenner & Block’s Corporate Environmental Lawyer blog here. In light of EPA’s announcement, several State Attorneys Generals that had also filed a complaint challenged EPA’s Temporary Enforcement Policy indicated that they intend to dismiss their lawsuit so long as EPA terminates its reliance on the policy on or before August 31st. In an attempt to preempt what is likely to be a motion to dismiss on mootness grounds, the Conservation Groups allege that “there is no assurance that the policy will be rescinded by that date, particularly given the recent surge in COVID-19 cases,” and that their case should therefore be allowed to proceed.
Please feel free to contact the authors with questions or for further information. For regular updates about the impact of COVID‑19 in the workplace and on business generally, please visit Jenner & Block’s Corporate Environmental Lawyer blog and Jenner & Block’s COVID‑19 Resource Center.
New York Sets PFAS And 1,4-Dioxane MCL
By Steven M. Siros
On July 30, 2020, New York’s Public Health and Planning Council voted to establish maximum contaminant levels (MCLs) for PFOA and PFOS, two of the more common per- and polyfluoroalkyl substances known as PFAS. The MCL for both PFOA and PFOS was set at 10 parts per trillion (ppt) and once approved by the state’s Health Commissioner, public water systems serving 10,000 people or more will be required to start testing for these compounds within 60 days of the date the regulations are published in the New York State Register. Systems serving between 3,300 and 9,999 person would have to begin testing within 90 days, while all other systems would need to begin testing within six months. In conjunction with setting the PFAS MCL, New York also set a 1 part per billion MCL for 1,4-dioxane, another emerging contaminant.
The most immediate impact of the new MCLs will be the testing obligation it imposes on drinking water providers. If these contaminants are detected in drinking water above the MCL, the drinking water provider will be required to notify its consumers and develop a plan to address the MCL exceedances. Although New York has historically provided grants to assist municipalities in addressing these types of emerging contaminants, these grants are unlikely to be sufficient in light of the wide-spread testing that will now be required. As such, one can likely expect a substantial increase in litigation as municipalities aggressively look to shift the burden of paying for these remedial measures from ratepayers to manufacturing and/or other industrial operations that may have contributed to the presence of these contaminants in the environment.
U.S. EPA Limits States’ Veto Rights on Infrastructure Projects
By Steven M. Siros
Under Section 401 of the Clean Water Act (“CWA”), projects requiring federal permits or licenses that have the potential to result in point source discharge into waters of the United States must obtain a Section 401 water quality certification evidencing compliance with applicable state water quality standards. Until this state certification is received, a project can’t obtain its federal permit or license.
In response to claims that the states are unreasonably delaying Section 401 certifications and/or imposing requirements that go beyond the mandates of the CWA, U.S. EPA has issued a final rule clarifying the time period for states these certification reviews and limiting the conditions that can be imposed on a project as part of this certification process. In a press release accompanying the final rule, U.S. EPA Administrator Andrew Wheeler stated that “EPA is returning the Clean Water Act certification process under Section 401 from its original purpose, which is to review potential impacts from discharges from federally permitted projects may have on water resources, not to indefinitely delay or block critically important infrastructure.”
Section 401 of the CWA requires certifying authorities to act on Section 401 certification requests within a “reasonable period of time” that shall not exceed one year. 33 U.S.C. 1341(a)(1). Federal licensing and permitting agencies are tasked in the final rule with establishing what constitutes a “reasonable period of time either categorically or on a case-by-case basis” but in no circumstances can the period exceed one year. 40 CFR § 121.6. The final rule provides that the “reasonable period of time” starts to run once the certifying agency receives a “certification request” as opposed to running once the certifying authority deems the application or request “complete” as had been the historical practice.
The final rule also clarifies that the state review is limited to ensuring compliance with water quality standards as opposed to addressing non-water quality related considerations For example, U.S. EPA noted that certifying authorities have “on occasion required in a certification condition the construction of biking and hiking trails … and the creation of public access for fishing along waters of the United States.” Certifying authorities have also attempted to address air emission and transportation effects as part of the certification process. U.S. EPA's final rule specifically states that the Section 401 certification “is limited to assuring that a discharge from a Federally licensed or permitted activity will comply with water quality requirements.” 40 CFR § 121.3.
Within this “reasonable time period” set by the permitting agency, certifying authorities can grant, grant with conditions or deny certification requests. 40 CFR § 121.7. Certifying authorities may also waive the certification requirement, either expressly or by failing to act. 40 CFR § 121.9. Section 401 certifications must include supporting information for each condition, including a statement explaining why the condition is necessary to assure that the discharge will comply with state water quality requirements. Denials must state the reasons for denial, including the specific water quality requirements with which the discharge will not comply, and if the denial is for insufficient information, the denial must describe the specific information that would be required. In the event that a certifying authority fails to comply with the procedural requirements governing the certification process, the final rule allows the permitting agency to deem that the certifying agency has waived its certification rights. 40 CFR § 121.9(a)(2).
U.S. EPA's final rule has been praised by industry groups with the American Petroleum Institute issuing a statement that " the addition of a well-defined timeline and review process will provide certainty to operators as they develop infrastructure projects that meet state water quality standards." The Natural Resources Defense Council, on the other hand, issued a statement claiming that the new rule "makes a mockery of this EPA's claimed respect for cooperative federalism."
Please feel to contact the author with questions or for further information. For regular updates on breaking environmental, health and safety issues, please visit Jenner & Block’s Corporate Environmental Lawyer Blog.