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.
Industry Organization Challenges EPA Cross State Air Pollution Rule
By Allison A. Torrence
As the saying goes, “no good neighbor rule goes unpunished.” Thus, the latest attempt by the U.S. Environmental Protection Agency (“EPA”) to promulgate a Revised Cross-State Air Pollution Rule (“CSAPR”) Update under the “good neighbor provision” of the Clean Air Act and in response to the D.C. Circuit’s remand of the previous version of the CSAPR Update has been challenged in court. On June 25, 2021, Midwest Ozone Group—an affiliation of companies, trade organizations, and associations created to advance its members interests regarding national ambient air quality programs—filed a petition for review of the final rule of EPA published in the Federal Register at 86 Fed. Reg. 23,054 (April 30, 2021) entitled the “Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS.” The petition does not provide any details at this point regarding the basis for the group’s challenge to the Revised CSAPR Update.
As we previously reported on this Blog, the Revised CSAPR Update became effective 60 days after it was published (effective on June 29, 2021), and has requirements that begin right away in the 2021 ozone season (the ozone season is May 1 through September 30). The rule requires additional emissions reductions of nitrogen oxides (“NOX”) from power plants in 12 states: Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia. EPA determined that additional emissions reductions were necessary in these 12 states because projected 2021 ozone season NOX emissions from these states were found to significantly contribute to downwind states’ nonattainment and/or maintenance problems for the 2008 ozone National Ambient Air Quality Standards (“NAAQS”). NOX is an ozone precursor, which can react with other ozone precursors in the atmosphere to create ground-level ozone pollution (a/k/a smog). These pollutants can travel great distances, often crossing state lines and making it difficult for downwind states to meet or maintain the ozone NAAQS.
One part of the Revised CSAPR Update that may be of particular interest to the challengers is that EPA issued new or amended Federal Implementation Plans (“FIPs”) for these 12 states that replaces those states’ existing CSAPR emissions budgets for power plants. The revised emission budgets take effect immediately with the 2021 ozone season and will adjust through 2024. The 2021 emission budgets will require power plants in these states to take advantage of existing, already-installed selective catalytic reduction (“SCR”) and selective non-catalytic reduction (“SNCR”) controls. Emissions reductions in the 2022 budgets will require installation or upgrade of state-of-the-art NOX combustion controls at power plants. Emission budgets will continue to be adjusted, through 2024, until air quality projections demonstrate that the upwind states are no longer significantly contributing to downwind states’ nonattainment of the 2008 ozone NAAQS.
Midwest Ozone Group is required to submit a Statement of Issues to be Raised by July 28, 2021, which should shed more light on the strengths or weaknesses of the petitioner’s challenges to this rule. Stay tuned to the Corporate Environmental Lawyer Blog for additional analysis at that time and if any other significant developments arise in the meantime.
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.
Jenner & Block to Host Webinar on EHS Issues Facing the Cannabis Industry
On May 4, Jenner & Block Partner Steven M. Siros and Associate Leah M. Song will present a CLE webinar on environmental, health, and safety (EHS) issues facing the cannabis industry. The market value of the cannabis industry in the United States is expected to reach $30 billion by 2025. Currently, 36 states allow the use of cannabis for medicinal purposes and 15 states allow the recreational use of cannabis. To sustain this rapid industry growth, and avoid potential penalties and lawsuits, it is crucial that cannabis companies ensure consistent compliance with EHS rules and regulations.
In this CLE Program, Mr. Siros and Ms. Song will cover the particular EHS challenges that the cannabis industry currently faces, including issues related to emissions, water resources, waste regulation, and pesticides. The program will also address worker safety issues and the state and federal OSHA regulations cannabis operations are subject to as well as post-consumer issues cannabis companies face such as packaging issues and recycling. Please email firstname.lastname@example.org if you are interested in attending. Space is limited.
Mr. Siros is chair of the Environmental Litigation Practice and co-chair of the Environmental Workplace Health & Safety Law Practice. He focuses primarily on environmental and toxic tort matters.
Ms. Song is an associate in the firm’s Environmental and Workplace Health & Safety Law Practice.
Earth Day 2021: Heightened Chemical Regulation under the Biden Administration
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
A key platform of President Biden’s environmental agenda is increased regulatory scrutiny with respect to chemical substances under the Toxic Substances Control Act (TSCA). Regulating chemicals in order to minimize the threat to human health and the environment is clearly also critical to achieving the aims and goals of Earth Day, especially considering that the publication of Rachel Carson’s Silent Spring helped spark the global environmental movement that eventually culminated in the first Earth Day in 1970.
Turning now to the present, in the waning months of the Trump administration, there was a flurry of U.S. EPA activity under TSCA, including the issuance of risk evaluations for a number of high-priority chemical substances, including asbestos, 1,4-dioxane, and trichloroethylene. Notwithstanding that these risk evaluations concluded that at least some uses of each of the ten high priority chemicals posed an unreasonable risk, these risk evaluations were widely criticized for failing to take into consideration reasonably foreseeable uses or failing to adequately consider various scientific studies. There had been much speculation that President Biden would reject all of the Trump-era TSCA risk evaluations and in fact, one of President Biden’s first actions in the White House was to direct U.S. EPA to review the TSCA risk evaluation process as well as the methylene chloride risk evaluation specifically.
Rather than throwing the baby out with the bathwater, however, U.S. EPA is moving forward to develop risk mitigation plans for each of these high priority chemicals. At the same time, Michal Freedhoff, the acting assistant administrator for U.S. EPA’s Office of Chemical Safety and Pollution, noted that U.S. EPA would be taking a hard look at these risk evaluations. In a prepared statement, Ms. Freedhoff stated:
Our goal is to allow risk management actions on these first ten chemicals to move forward as much as possible, while looking back surgically at specific areas in some of the risk evaluations to supplement them as appropriate in order to ensure we are meeting our statutory obligations and using the best available science to truly protect human health and the environment.
As to the next 20 chemicals in the risk assessment pipeline, U.S. EPA has already announced that it will reassess its TSCA risk evaluation process, including refining its approach for selecting and reviewing scientific studies. U.S. EPA noted that it would not rely on U.S. EPA’s Application of Systematic Review in TSCA Risk Evaluations, a guidance document issued by U.S. EPA in 2018 that was much maligned by the National Academy of Scientists.
One can also expect an increased focus on environmental justice issues by U.S. EPA in connection with evaluating the risks posed by chemical substances. This will most likely play out in connection with an increased focus on chemical substance exposure for fence-line and front-line communities during the risk evaluation process.
Finally, there will also be increasing pressure on the Biden Administration to regulate new emerging contaminants such as per- and polyfluoroalkyl substances (PFAS) under both TSCA and the Safe Drinking Water Act. PFAS compounds have not yet been considered for prioritization under TSCA but are likely to be on a list of high priority chemicals in the future. In the meantime, U.S. EPA is likely to move forward with designating at least PFAS compounds as hazardous substances under CERCLA as well as evaluating whether to set an MCL for these compounds under the Safe Drinking Water Act.
Please check back on Jenner & Block’s Corporate Environmental Lawyer for more Earth Day content throughout the week.
Earth Day 2021: Climate Change under the Biden Administration
By Leah Song
President Biden has made climate change a main focus of his administration. At the beginning of his term, President Biden issued several executive orders addressing climate change: “Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis” (January 20, 2021) and “Executive Order on Tackling the Climate Crisis at Home and Abroad” (January 27, 2021) (“Day 7 Environmental Executive Order”). This article will highlight the administration’s international focus, climate justice, climate litigation, and several priorities of the recent executive orders.
As President Biden promised prior to inauguration, he recommitted the U.S. to the Paris Climate Agreement, which is intended to limit the global temperature increase to 2 degrees Celsius above pre-industrial levels. Trump had announced his intent to terminate the U.S.’s involvement in the Paris Climate Agreement shortly after taking office, but due to the rules, was not able to formally withdraw until November 4, 2019, which became final a year later on November 4, 2020. The U.S. had originally committed to cut GHG emissions by at least 26% below 2005 levels by 2025. Countries were supposed to submit new targets for 2030 by the end of 2020. The Biden administration will likely submit its updated Nationally Determined Contribution (“NDC”) by the end of 2021 in time for the COP26 event scheduled at the end of the year. Given the rollbacks during the Trump administration and predicted increase in emissions as the world recovers from the COVID-19 pandemic, President Biden will need to carefully consider the new target NDCs.
Keeping with the international focus, the Biden administration committed to treating climate change as a national security threat and fully integrating climate change into foreign policy and national security strategies. President Biden selected former Secretary of State John Kerry as the Special Presidential Envoy for Climate and to sit on the National Security Council. Kerry’s role is complemented by Gina McCarthy, White House National Climate Advisor, and Ali Zaidi, Deputy White House National Climate Advisor, in the White House Office of Domestic Climate Policy. The Day 7 Environmental Executive Order also discusses the establishment of a National Climate Task Force, working across 21 federal agencies and departments to enable a “whole-of-government” approach to combatting the climate crisis. For summaries of the recent National Climate Task Force meetings, click here and here.
During his campaign and into his presidency, President Biden has made clear his focus on environmental and climate justice. The Day 7 Environmental Executive Order establishes the White House Environmental Justice Advisory Council and the White House Environmental Justice Interagency Council in order to prioritize environmental justice and ensure a “whole-of-government” approach to addressing current and historical environmental injustices. There will be a focus on environmental justice monitoring and enforcement through new or strengthened offices at the U.S. Environmental Protection Agency, Department of Justice, and Department of Health and Human Services.
In time for Earth Day, the administration invited 40 world leaders to the Leaders Summit on Climate that will be hosted on April 22 and 23. The virtual Leaders Summit will be live streamed for public viewing. For an initial overview of the Leaders Summit, click here.
Check back on Jenner & Block’s Corporate Environmental Lawyer for more Earth Day content throughout the week.
Reflections on Earth Day, 2021
By Gabrielle Sigel, Co-Chair, Environmental and Workplace Health and Safety Law Practice
This week, as we celebrate Earth Day on April 22, Jenner & Block’s Environmental and Workplace Health and Safety Law Practice will be focusing, each day, on a different aspect of the environment and how this year will affect our planet. I thought I would begin our week-long focus on Earth Day with a more personal reflection.
This past pandemic year on Earth gave me a chance to spend more time reading and lots more time thinking about our society and how we communicate with each other. Purely by coincidence, I had a chance to read two pieces of fiction that focus on both the environment and communication. In Richard Powers’s Pulitzer Prize winning, “The Overstory,” we learn about trees’ ability to communicate with each other as part of their survival network. The female scientist who makes this discovery in “The Overstory” calls to mind the work of Dr. Suzanne Simard, a professor of in the Department of Forest and Conservation Sciences at the University of British Columbia, who demonstrated how trees, even of different species, communicate and support each other through underground networks of fungi, known as mycorrhizal networks. The need to communicate, to support each other, to have deep, underground roots is central to all living things. Our ability to communicate as humans starts and ends with our planet.
A complementary novel to “The Overstory” is “A Children’s Bible” by Lydia Millet. Millet’s dystopian view of our planet’s future also has an understory about each generation’s inability to communicate their perspectives about their roles in taking care of each other and society. In my reading of “Children’s Bible,” the ultimate collapse occurs not just because of an environmental disaster, but because the generations stopped being able to communicate with and rely on each other.
Using one of our most useful forms of communication—humor, our first Earth Day cartoonist, Walt Kelly, tied together the need for both protection and connection in an elegant and powerful drawing:
We are all like trees in a giant forest called Earth. We have tentacles and roots touching each other in ways we cannot see, and we cannot continue living if we fail to acknowledge these connections. As we care for each other, we are also caring for our common home. As we communicate with each other, we must remember that we are connected to each other in ways that science is continuing to discover and that our personal experience is still learning.
As with many yearly events, Earth Day gives us an opportunity to reflect, discuss, and share. Thank you for letting me have the opportunity to connect with you.
Environmental Organizations Petition EPA to Expand Enforcement of Clean Air Act’s General Duty Clause
By Matthew G. Lawson
Various environmental organizations, led by the Environmental Integrity Project (“EIP”), are urging the United States Environmental Protection Agency (“EPA”) to expand enforcement of Section 112(r)(1) of the Clean Air Act (CAA)—commonly known as the General Duty Clause (“GDC”)—in order to more closely regulate the handling of hazardous substances at industrial facilities permitted under the CAA. EIP’s ongoing efforts include petitioning EPA to require that the obligations of the GDC be incorporated in state-issued Title V air emission permits, such that these obligations may be enforced against permit holders by state regulators or through citizen suits. As explained below, efforts to expand enforcement of the GDC were for the most part blocked under the Trump Administration’s EPA, but it remains to be seen whether these efforts may achieve renewed success under the Biden Administration.
The GDC, which was first enacted as part of the 1990 amendments to the CAA, requires that owners and operators of regulated facilities that handle, process, or store “extremely hazardous substances” take certain actions to “prevent the accidental release and … minimize the consequences of any  release” of such substances. Specifically, the GDC requires facility owners and operators to: (i) conduct a hazardous risk assessment to identify potential risks from extremely hazardous substances at their facilities; (ii) design and maintain safe facilities that protect against releases; and (iii) develop and implement protocols to minimize the consequences from any accidental releases. While “extremely hazardous substances” is not defined by the GDC, the Senate Report from the 1990 CAA amendments provides that “extremely hazardous substance” includes any agent “which may as the result of short-term exposures associated with releases to the air cause death, injury or property damage due to its toxicity, reactivity, flammability, volatility, or corrosivity.” Although not necessarily exhaustive, EPA has created a list of extremely hazardous substances in 40 CFR part 68. Jurisdiction for enforcement of the GDC remains an issue of contention between EPA and environmental organizations. While enforcement of the GDC has traditionally been left to the exclusive purview of EPA, environmental groups are increasingly arguing that state air authorities can and should request delegation authority from the EPA to enforce the GDC at permitted facilities within their jurisdiction.
A key example of EIP’s efforts to increase enforcement of the GDC is provided in the organization’s April 14, 2020 Petition Objecting to a Title V Permit issued to Hazlehurst Wood Pellets LLC (“Hazlehurst”), a wood pellet mill operating in the State of Georgia. At the time of the petition, Hazlehurst’s Title V permit had been approved by state authorities, but remained subject to final review by EPA. EIP’s Petition asked EPA to deny Hazlehurst’s air emissions permit on the grounds that the permit failed to recognize or incorporate the requirements of the GDC. According to the Petition, ensuring compliance with the GDC was critical due to the fact that Hazlehurst regularly handles hazardous products, including “copious amount of wood dust,” which had previously caused flash fires at the facility. The Trump Administration EPA’s subsequent Order Denying the Petition rejected EIP’s request, finding that the GDC is not an “applicable requirement” for the purposes of Title V, and as such, “Title V permits need not—and should not—include terms to assure compliance with the [GDC] as it is an independent requirement…” EPA reasoned that if the requirements of the GDC were integrated into a Title V permit, the obligations would ostensibly be enforceable through citizen suits. Concluding that “neither citizens nor state and local air agencies may enforce the [GDC] under the CAA,” EPA rejected the Petition. At the same time, EPA clarified that because the GDC is “self-implementing,” it is independently enforceable by EPA and applies even when it is not expressed as part of a facility’s air permit.
While EPA’s Order denied the environmental organization’s request to expressly require GDC compliance in Title V permits, the Order did make clear that facilities holding Title V permits are still subject to the GDC’s requirements which may be enforced by EPA. According to recently issued EPA Guidance on the GDC, owners and operators who maintain extremely hazardous substances must adhere, at a minimum, to recognized industry standards and any applicable government regulations for handling such substances. While it remains to be seen whether the Biden Administration EPA will continue to resist expressly incorporating the GDC in Title V permits, the Biden Administration’s emphasis on regulatory compliance and environmental justice indicates that future enforcement of the GDC is likely to increase. For this reason, facilities holding air emission permits should review their existing protocols for handling and storing hazardous substances and ensure these protocols are consistent with prevailing industry standards and the requirements of the GDC.
Oil Industry Scores Big Win in Second Circuit Greenhouse Gas Litigation
By Steven M. Siros, Co-Chair, Environmental and Workplace Health & Safety Law Practice
Breaking from the pack and potentially creating a circuit split, the Second Circuit’s decision in City of New York v. Chevron, et al. dismissing New York’s City’s climate change lawsuit is a significant victory for the oil and gas industry. The unanimous ruling from the Second Circuit affirmed a district’s court decision dismissing New York’s common law claims, finding that issues such as global warming and greenhouse gas emissions invoked questions of federal law that are not well suited to the application of state law.
Taking a slightly different tact than state and local plaintiffs in other climate change lawsuits, the State of New York sued five oil producers in federal court asserting causes of action for (1) public nuisance, (2) private nuisance, and (3) trespass under New York law stemming from the defendants’ production, promotion and sale of fossil fuels. New York sought both compensatory damages as well as a possible injunction that would require defendants to abate the public nuisance and trespass. Defendants filed motions to dismiss that were granted. The district court determined that New York’s state-law claims were displaced by federal common law and that those federal common law claims were in turn displaced by the Clean Air Act. The district court also concluded that judicial caution counseled against permitting New York to bring federal common law claims against defendants for foreign greenhouse gas emissions.
The Second Circuit agreed with the district court, noting that the problems facing New York can’t be attributed solely to greenhouse gas emissions in the state nor the emissions of the five defendants. Rather, the greenhouse gas emissions that New York alleges required the City to launch a “$20 billion-plus multilayered investment program in climate resiliency across all five boroughs” are a byproduct of emissions around the world for the past several hundred years.
As the Second Circuit noted, “[t]he question before it is whether municipalities may utilize state tort law to hold multinational oil companies liable for the damages caused by greenhouse gas emissions. Given the nature of the harm and the existence of a complex web of federal and international environmental law regulating such emissions, we hold that the answer is ‘no.’”
Finding that New York’s state common law claims were displaced by federal common law, the Second Circuit then considered whether the Clean Air Act displaced these federal common law claims. The Second Circuit noted that the Supreme Court in Am. Elec. Power Co. v. Connecticut (AEP) (2011) had previously held that the “’Clean Air Act and the EPA actions it authorizes displace any federal common-law right to seek abatement’ of greenhouse gas emissions.” As to the State’s damage claims, the Second Circuit agreed with the Ninth Circuit’s reasoning in Native Vill. Of Kivalina v. Exxonmobil Corp. (9th Cir. 2012) that the “displacement of federal common law does not turn on the nature of the remedy but rather on the cause of action.” As such, the Second Circuit held that “whether styled as an action for injunctive relief against the Producers to stop them from producing fossil fuels, or an action for damages that would have the same practical effect, the City’s claims are clearly barred by the Clean Air Act.
The Second Circuit was careful to distinguish its holding from the holdings reached by the First, Fourth, Ninth and Tenth circuits in prior climate change cases, noting that in those other cases, the plaintiffs had brought state-law claims in state court and defendants then sought to remove the cases to federal courts. The single issue in those cases was whether defendants’ federal preemption defenses singlehandedly created federal question jurisdiction. Here, because New York elected to file in federal as opposed to state court, the Second Circuit was free to consider defendants’ preemption defense on its own terms and not under the heightened standard applicable to a removal inquiry.
Whether the Second Circuit’s decision has any impact on BP PLC, et al. v. Mayor and City Council of Baltimore, a case that has now been fully briefed and argued before the Supreme Court remains to be seen. The Baltimore case was one of the state court cases discussed above that was removed to federal court. The defendants had alleged a number of different grounds for removal, one of which is known as the “federal officer removal statute” that allows removal to federal court of any lawsuit filed against an officer or person acting under that office of the United States or an agency thereof. The limited issue before the Supreme Court was whether the appellate court could only consider the federal-officer removal ground or whether it could instead review any of the grounds relied upon in defendants’ removal petition.
Some commenters have noted that the Second Circuit’s decision creates a circuit split that may embolden the Supreme Court to address these climate change cases in one fell swoop. The more likely scenario, however, is that the Supreme Court limits its opinion to the narrow issue before it and leaves resolution of whether state law climate change nuisance actions are preempted by federal law for another day.
EPA Finalizes Revised Cross-State Air Pollution Rule Update: Emissions Reductions Required at Certain Power Plants Beginning in May
By Allison A. Torrence
On March 15, 2021, EPA finalized the Revised Cross-State Air Pollution Rule (“CSAPR”) Update for the 2008 ozone National Ambient Air Quality Standards (“NAAQS”). This final rule is issued pursuant to the “good neighbor provision” of the Clean Air Act and in response to the D.C. Circuit’s remand of the previous version of the CSAPR Update in Wisconsin v. EPA on September 13, 2019. The previous version of the CSAPR Update was issued in October 2016, and was found to be unlawful because it allowed certain states to continue their significant contributions to downwind ozone problems beyond the statutory dates by which the downwind states were required to be in compliance with the NAAQS. The Revised CSAPR Update attempts to address the deficiencies identified by the D.C. Circuit.
Beginning in the 2021 ozone season (the ozone season is May 1 through September 30), the Revised CSAPR Update will require additional emissions reductions of nitrogen oxides (“NOX”) from power plants in 12 states: Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West Virginia. EPA determined that additional emissions reductions were necessary in these 12 states because projected 2021 ozone season NOX emissions from these states were found to significantly contribute to downwind states’ nonattainment and/or maintenance problems for the 2008 ozone NAAQS. NOX is an ozone precursor, which can react with other ozone precursors in the atmosphere to create ground-level ozone pollution (a/k/a smog). These pollutants can travel great distances, often crossing state lines and making it difficult for downwind states to meet or maintain the ozone NAAQS.
As part of the Revised CSAPR Update, EPA is issuing new or amended Federal Implementation Plans (“FIPs”) for these 12 states that will replace those states’ existing CSAPR emissions budgets for power plants. The revised emission budgets will take effect with the 2021 ozone season and will adjust through 2024. The 2021 emission budgets will require power plants in these states to take advantage of existing, already-installed selective catalytic reduction (“SCR”) and selective non-catalytic reduction (“SNCR”) controls. Emissions reductions in the 2022 budgets will require installation or upgrade of state-of-the-art NOX combustion controls at power plants. Emission budgets will continue to be adjusted, through 2024, until air quality projections demonstrate that the upwind states are no longer significantly contributing to downwind states’ nonattainment of the 2008 ozone NAAQS.
EPA projects that the Revised CSAPR Update will provide significant public health benefits. According to EPA:
Due to this rule and other changes already underway in the power sector, ozone season NOx emissions will be nearly 25,000 tons lower in 2021 than in 2019, a reduction of 19 percent. The reduction in emissions is estimated to prevent about 290,000 asthma events, 560 hospital and emergency room visits, 110,000 days of missed work and school, and up to 230 premature deaths in 2025. The public health and climate benefits are valued, on average, at up to $2.8 billion each year over the period 2021 to 2040.
This is compared to the annualized costs of the rule, which EPA estimates to be, on average, $25 million each year over the same period from 2021 to 2040.
The Revised CSAPR Update will be effective 60 days after it is published in the Federal Register, which should happen in the next week or two. More information about the CSAPR Update can be found on EPA’s Website.
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.
EPA Issues New Guidance on Disposal and Destruction Methods for PFAS Waste
By Steven M. Siros, Co-Chair, Environmental and Workplace Health and Safety Law Practice
On December 18, 2020, U.S. EPA issued its long awaited draft interim guidance on disposal and destruction methods for per- and polyfluoroalkyl substances (PFAS). The guidance, which U.S. EPA was required to issue pursuant to the National Defense Authorization Act for Fiscal Year 2020, discusses three disposal/destruction technologies—thermal treatment, landfilling and underground injection.
In discussing these technologies, the guidance acknowledges that it does not address what concentrations of PFAS in wastes, spent products, or other materials or media would necessitate destruction or disposal, noting that other regulatory mechanisms or risk based guidance are more appropriate for establishing such concentrations. Instead, the guidance is intended to provide information and suggested considerations to assist in evaluating destruction and disposal options for PFAS waste.
The guidance does not endorse any single technology—rather, the guidance generally discusses the following technologies in order of lower to higher uncertainty in terms of the ability to control the migration of PFAS into the environment during the disposal/destruction process.
- Interim Storage. Acknowledging that this is not a destruction or disposal method, the guidance notes that interim storage may be an option if the immediate destruction of the PFAS materials is not necessary. Interim storage (from two to five years) could be relied upon while research continues to minimize uncertainties associated with the other options.
Permitted Deep Well Injection (Class I). Underground injection would be limited to liquid-phase waste streams. However, the guidance notes that there are a limited number of wells and logistical issues could limit the practicability of this option.
- Permitted Hazardous Waste Landfills (RCRA Subtitle C). The guidance notes that RCRA Subtitle C landfills have the most stringent environmental controls in place and therefore have a higher potential to prevent the migration of PFAS into the environment.
Solid Waste Landfills (RCRA Subtitle D) with Composite Liners and Leachate Collection. These landfills can only receive non-hazardous wastes and therefore have less stringent environmental controls that vary from state to state.
Hazardous Waste Combustors. These consist of commercial incinerators and cement/aggregate kilns that can achieve temperatures and residence times sufficient to break apart the PFAS. However, the guidance notes that emissions from these combustion sources haven’t been adequately characterized to confirm that the PFAS compounds are in fact destroyed.
- Other Thermal Treatment. These consist of carbon reactivation units, sewage sludge incinerators, municipal waste combustors, and thermal oxidizers. However, the same uncertainties that were referenced in the previous bullet would also apply to these technologies.
The appropriate methodology for dealing with PFAS waste has been subject to controversy with environmental groups such as Sierra Club suing the Department of Defense (DoD) in an effort to prevent DoD from incinerating its stockpile of PFAS-based firefighting foams. Although U.S. EPA set a 60-day comment period on the interim guidance, U.S EPA could certainly elect to delay issuance of any final guidance to give the new Biden Administration an opportunity to put its imprint on the guidance )especially considering the emphasis that the new administration has placed on PFAS).
We will continue to track this guidance as well other PFAS-related issues on the Corporate Environmental Lawyer blog.
EPA Retains Existing Air Quality Standards for Particulate Matter
By Allison A. Torrence
On December 7, 2020, EPA completed its five-year review of the National Ambient Air Quality Standards (“NAAQS”) for Particulate Matter (“PM”), a criteria air pollutant under the Clean Air Act. In a final action set to be published in the Federal Register in the coming days, EPA decided to retain the current NAAQS for PM, which have been in place since 2012.
PM is measured in two categories:
- Fine particles, or PM2.5, which are particles with a diameter of 2.5 micrometers and smaller; and
- Coarse particles, or PM10, which are particles with a diameters between 2.5 and 10 micrometers.
PM2.5, emitted from numerous sources including power plants, vehicle exhaust, and fires, is generally the more significant health concern, as it has been linked to serious respiratory disease, increased mortality rates, and recent studies have even linked a history of PM2.5 exposure to increased COVID-19 mortality rates.
The Clean Air Act requires EPA to set both primary and secondary NAAQS for PM2.5 and PM10. Primary NAAQS must be set at levels that will protect public health and secondary NAAQS must be set at levels that will protect public welfare. All NAAQS must be reviewed by EPA every five years. EPA has regulated PM emissions through the NAAQS since 1971, and revised the PM NAAQS four times since then—in 1987,1997, 2006 and 2012.
The current primary and secondary NAAQS for PM are as follows:
According to EPA data, there are currently 16 counties in the U.S. currently in nonattainment of the primary PM2.5 NAAQS and 23 counties currently in nonattainment of the primary PM10 NAAQS.
EPA’s decision to keep the existing PM NAAQS comes despite warnings from its own scientists. Notably, in the Policy Assessment for the Review of the National Ambient Air Quality Standards for Particulate Matter, one of the technical documents used by EPA in support of its final decision, EPA scientists concluded that:
“When taken together, we reach the conclusion that the available scientific evidence, air quality analyses, and the risk assessment…can reasonably be viewed as calling into question the adequacy of the public health protection afforded by the combination of the current annual and 24-hour primary PM2.5 standards.”
This Policy Assessment also states that under the current PM2.5 standards, long-term PM2.5 exposures are estimated to be associated with as many as 45,000 total deaths per year. However, the Policy Assessment also noted certain uncertainties and limitations in the evidence and risk assessments that could lead the agency to decide to keep the existing standards.
EPA received over 60,000 public comments on the PM NAAQS proposal, which was closely watched by environmentalists and industry alike. Because of this close public interest, this may be an issue that will be reviewed sooner than the normal five-year review once the Biden Administration begins in 2021. As always, we will keep you updated on any further developments at the Corporate Environmental Lawyer.
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.
Supreme Court Grants Review on Key Climate Change Case
By Matthew G. Lawson
On Friday, October 2, 2020, the United States Supreme Court granted a writ of certiorari to review of a decision by the Fourth Circuit Court of Appeals holding that climate change litigation brought against various fossil fuel were not subject to federal court subject matter jurisdiction. While the Supreme Court’s review is limited to a somewhat narrow, jurisdictional question regarding the ability of an appellate court to review a district court’s order remanding a case to state court, the decision will likely have far reaching impacts on whether the growing number of climate changes cases in the United States will be litigated in state or federal courts.
As previously discussed by the Corporate Environmental Lawyer, the underlying litigation involves claims asserted in Maryland state court by the City of Baltimore against various fossil-fuel companies for damages associated with Climate Change. In its complaint, Baltimore asserted claims against the industry for public nuisance, private nuisance, strict liability failure to warn, strict liability design defect, negligent design defect, negligent failure to warn, trespass, and violations of Maryland’s Consumer Protection Act.
In response, the fossil fuel companies sought to remove the action to federal court. However, the district court remanded the case back to state court after finding that it lacked subject matter jurisdiction over the asserted claims following the lead of several other district courts that have decided similar issues. On March 6, 2020, the Fourth Circuit affirmed the district court’s remand order. Importantly, the Fourth Circuit found that its appellate jurisdiction was limited to reviewing the district court’s conclusion that it lacked subject matter jurisdiction under the Federal-Officer Removal Statute pursuant to 28 U.S.C. § 1447(d) and 28 U.S.C. § 1442 notwithstanding that the fossil fuel companies had raised and the district court ruled on additional arguments in support of the removal petition. The Fourth Circuit found that it lacked jurisdiction to consider whether the district court should have granted removal to federal court on these alternative grounds.
With respect to the Federal Officer Removal Statute, the Fourth Circuit rejected the companies’ arguments that the case belonged in federal court because the companies had entered into fuel supply and strategic petroleum reserve agreements with the federal government. The court concluded that these contractual agreements failed to establish that the companies were “acting under” the direction of a federal officer and were “insufficiently related” to Baltimore’s claims. On March 31, 2020, the fossil-fuel companies filed a petition for a writ of certiorari in the United States Supreme Court, seeking review of the question of whether the statutory provision prescribing the scope of appellate review of remand orders “permits a court of appeals to review any issue encompassed in a district court’s order remanding a removed case to state court…” The companies argued that the Fourth Circuit had improperly ignored several alternative grounds justifying removal of the case to federal court, including that federal common law governs claims of interstate air pollution.
While the Supreme Court’s review of the case will be limited to the appellate jurisdictional question, the decision will undoubtedly influence the growing trend of climate change litigation. At present, twenty-one U.S. States and numerous municipalities have brought lawsuits in state court against the fossil fuel industry for damages related to climate change. In nearly all such cases, the industry has sought to remove the case to federal court where it is believed the companies have a better chance of successfully securing dismissals on the grounds that such claims are preempted by the Clean Air Act and/or addresses a “political question” which is better left to the discretion of Congress. Thus, the Supreme Court’s decision will likely impact the ability of the fossil fuel industry to seek appellate review of unfavorable district court remand orders.