Administrative Watch
Now that the House of Representatives has passed Toxic Substances Control Act (TSCA) reform legislation, which is the Frank R. Lautenberg Chemical Safety for the 21st Century Act (H.R. 2576), on May 24, 2016 followed by Senate passage on June 7, 2016, the reconciled legislation is finally on its way for President Barack Obama’s signature. The president is expected to quickly sign it. So what does this mean for your company? Although this is by no means complete, here is a “to do” list to frame your company’s TSCA reform efforts.
1. PROMOTE SOUND SCIENCE: Take advantage of public comment opportunities for your company and its scientific and legal advisors to weigh in on the USEPA’s Year 1 mandate to establish a risk-based chemical screening process and criteria for designating chemicals as low or high priority substances, as well as guidance for submitting risk assessments through the new chemical review PMN process. In preparing comments, look to USEPA’s 2014 TSCA Work Plan as an indicator of what USEPA’s work product is likely to look like and consider weaving in real world examples of sound and proven risk assessment methodologies. The TSCA Work Plan program is the USEPA’s current blueprint for conducting safety assessments, prioritizations, and risk management evaluations. So the USEPA is likely to build upon what it has already developed. Many non-rulemaking policies, procedures, and guidance must also be reviewed, revised as warranted or newly developed by the end of Year 2 so do not miss comment opportunities as they arise.
2. LOOK FOR DATA GAPS: Because all new and existing chemical substances actively being made, sold and/or distributed will ultimately be evaluated/re-evaluated by the USEPA under the risk evaluation standards that are developed, now is a good time for your company to look at the existing/available exposure data and develop new data for any information gaps.
3. FILE ROBUST PMNs AND SNUNs: With the lifting of the “least burdensome” requirement, the USEPA faces fewer hurdles in restricting or banning chemicals from use. The USEPA is charged with assessing whether a chemical presents an unreasonable risk to safety (including the safety of applicable vulnerable populations) irrespective of any cost considerations. Cost considerations do come into play when making restricted use risk management decisions. So it is imperative that your company develop and submit robust risk assessments for any chemical under consideration so that the your chemical approval process has the best chance of progressing in a timely manner. Otherwise, expect the USEPA to issue an Order for information gaps. Be sure to factor additional risk assessment costs and extended review times into your new product development schedules.
4. CONSIDER REQUESTING THE USEPA TO DESIGNATE A PARTICULAR CHEMICAL AS A HIGH PRIORITY SUBSTANCE: Up to 50 percent of all designated high priority substances can be nominated by manufacturers (not processors) and trade associations and this may make sense for chemicals critical to your business, including but not limited to chemicals in the 2014 TSCA Work Plan. Particularly in the short term for the 2014 TSCA Work Plan chemicals important to your company, plan to participate in the USEPA’s assessment of and potential restrictions on, these chemicals. For chemicals that your company nominates, be prepared to pay 100 percent of the USEPA’s assessment costs (50 percent for such chemicals listed in the 2014 TSCA Work Plan).
5. ASSESS YOUR COMPANY’S CURRENT TSCA INVENTORY STATUS: Figure out what chemicals are currently manufactured (as well as imported), sold, distributed and/or processed by your company and identify those that have not been managed over the past 10-year period. Do this in conjunction with the USEPA’s Year 1
mandate to set a process for resetting the TSCA inventory of chemical substances to align it with what is actually being used within 21st Century products. This will better equip your company to comment on the inventory reset procedures. It is expected that a significant number of the 84,000+ chemicals currently on the TSCA inventory will be moved to an Inactive Inventory List through the TSCA inventory reset process because they have not been manufactured (or imported), sold, or distributed within the prior 10-year period. Expect to submit TSCA inventory status information to the USEPA within six months of the final rulemaking. For chemicals that your company is likely to manufacture (or import), sell, or distribute in the future, request the USEPA to move your company’s chemical from the TSCA Inactive Inventory List to the Active List.
6. CHECK SUBSTANTIATION OF YOUR COMPANY’S CONFIDENTIALITY CLAIMS: Because the TSCA inventory reset will require your company to disclose information on chemicals listed on the Confidential portion of the TSCA inventory, look at the substantiation of the confidential claims now and enhance them as warranted. Failure to adequately substantiate such claims (and re-substantiate them every 10 years hereafter) will result in disclosure of the chemicals on the TSCA public inventory.
7. BUDGET FOR INCREASED FEES: The USEPA will set fees to cover some of the costs of implementing the TSCA amendments through the rulemaking process. Be sure to comment on the fee collection schedule(s) as appropriate and ensure increased TSCA fees are reflected in your company’s budget.
8. CONSIDER MEMBERSHIP OPPORTUNITIES – SCIENCE ADVISORY COMMITTEE ON CHEMICALS: Through your company’s go-to trade association or within your company (or your consultant’s company’s) ranks, membership on the new Science Advisory Committee on Chemicals could be beneficial, particularly during USEPA’s early years of implementing the amended TSCA.
Should you have questions regarding TSCA reform, please contact Colleen Grace Donofrio in Babst Calland’s New Jersey office at 856-256-2495 or cdonofrio@babstcalland.com.
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Administrative Watch
On May 31, 2016, the Supreme Court of the United States unanimously ruled in U.S. Army Corps of Engineers v. Hawkes Co. that approved jurisdictional determinations (JDs) issued by the U.S. Army Corps of Engineers (USACE) under the federal Clean Water Act are final agency actions subject to judicial review. Like the Court’s 2012 landmark opinion in Sackett v. EPA (finding that an Administrative Order to Comply is immediately appealable), the Hawkes decision effects a fundamental change in the framework for addressing jurisdictional disputes under the statute.
The Clean Water Act regulates the discharge of pollutants into “waters of the United States,” imposing substantial criminal and civil penalties for unpermitted discharges. Because it is often difficult for an owner to determine whether a specific parcel contains jurisdictional waters, the USACE issues two types of JDs on a case-by-case basis. “Preliminary” JDs are expressly non-binding, merely advising a property owner that jurisdictional waters may be present on a parcel. “Approved” JDs, on the other hand, convey the Corps’ definitive position as to the presence or absence of jurisdictional waters. Moreover, the USACE and the U.S. Environmental Protection Agency (USEPA) are parties to a Memorandum of Agreement (MOA) that makes Approved JDs binding on both agencies for five years.
In Hawkes, the plaintiffs received an Approved JD that found a peat wetland (that plaintiffs sought to mine) constituted jurisdictional waters because of its “significant nexus” to the Red River of the North, located some 120 miles away. Alleging that completing the application process for the required permit would have cost more than $100,000, the plaintiffs appealed the Approved JD administratively, and then to the U.S. District Court for the District of Minnesota. The district court dismissed the complaint, finding that an Approved JD is not a final agency action subject to review under the federal Administrative Procedure Act. On appeal, the U.S. Court of Appeals for the Eighth Circuit reversed, reaching the opposite conclusion.
In upholding the Eighth Circuit’s decision, Chief Justice Roberts, writing for the Court, applied the two-step analysis first set forth in Bennett v. Spear, 520 U.S. 154 (1997). First, Roberts found that an Approved JD is the consummation of the USACE’s decision-making process, in part because it is issued after extensive fact-finding regarding the physical and hydrological characteristics of particular property. Second, Roberts found that an Approved JD is an action “by which rights or obligations have been determined,” because it binds the USACE and USEPA for a five-year period, creating a safe harbor from enforcement proceedings that are inconsistent with it.
Five justices either wrote or joined in concurring opinions. Justice Kennedy (writing also for Justices Thomas and Alito), noted the government’s position on brief that the USACE-USEPA MOA might be revoked at any time. In their view, if that was to occur and an Approved JD ceased to be judicially reviewable, this would cause the Clean Water Act’s “ominous reach” to again be “unchecked,” raising significant questions as to whether the statute “comports with due process.”
Should you have questions regarding the Hawkes decision or other issues under the Clean Water Act and its state analogues, please contact Christopher “Kip” Power at 681-265-1362 or cpower@babstcalland.com, or Michael K. Reer at 412-394-6583 or mreerbabstcalland.com.
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Administrative Watch
On May 12, 2016, the U.S. Environmental Protection Agency (EPA) unveiled final rules intended to reduce greenhouse gas emissions from the oil and natural gas sector and to clarify when pollutant-emitting activities are considered “adjacent” for air permitting purposes. The rules finalized on May 12 will impact primarily new, modified, and reconstructed sources, including but not limited to sources at well sites, processing plants, and compressor stations. In conjunction with these final rulemakings, EPA also took the first step in the process of developing a proposed rule to reduce methane emissions from existing sources.
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On May 4, 2016, seven environmental groups followed through on a prior threat to sue the United States Environmental Protection Agency (EPA) by filing a lawsuit against the EPA in a bid to force the agency to develop tailored rules for the disposal, storage, transportation, and handling of oil and gas waste under the Resource Conservation and Recovery Act (RCRA) Subtitle D solid waste program. In an effort to trigger movement on the issue, the environmentalists had previously sent the EPA a 60-day Notice of Intent to Sue in August 2015; however, according to the environmentalists, the agency did not formally respond to the Notice. The Complaint, filed with the U.S. District Court for the District of Columbia, alleges that the agency has not within the statutorily required three-year timeframe (1) reviewed and, where necessary, revised RCRA’s Subtitle D solid waste regulations for oil and gas waste, and (2) reviewed and/or revised its guidelines for state solid waste management plans for oil and gas waste.
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Administrative Watch
On April 23, 2016, the Pennsylvania Environmental Quality Board (EQB) published a final-form rule that requires major sources of nitrogen oxides (NOx) and/or volatile organic compounds (VOCs) to meet reasonably available control technology (RACT) by January 1, 2017. See 46 Pa.B. 2036. The final rulemaking adopts presumptive RACT requirements and emission limitations. Major sources that are not subject to any presumptive RACT requirements or emission limitations will need to develop their own RACT requirements. The final-form rulemaking will affect a wide array of combustion sources in several industrial sectors and may require the installation of costly control technologies or implementation of new work practices.
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Pipeline Safety Alert
On March 17, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a pre-publication version of its long-awaited notice of proposed rulemaking (NPRM) for gas transmission and gathering lines. More than four years in the making and released against the backdrop of a dramatically changing domestic landscape for the natural gas pipeline industry, the NPRM responds to issues raised in National Transportation Safety Board (NTSB) recommendations, congressional mandates, and Government Accountability Office reports. PHMSA has provided a short, 60-day comment period, which will be a challenge to those developing comments on a proposed rule of this complexity and length. It is likely that a number of stakeholders will seek an extension of the comment period. While a comprehensive analysis of the 549-page proposal will take more time, Babst Calland’s Pipeline and HazMat Safety team has initially identified five questions that operators may wish to ask about the NPRM. Read more ›
Administrative Watch
On January 19, 2016, Pennsylvania Governor Tom Wolf and the Department of Environmental Protection (DEP) announced a sweeping new regulatory strategy for reducing methane emissions from oil and natural gas operations in the Commonwealth. Methane, the primary constituent of natural gas, is considered by federal and state agencies to be a potent greenhouse gas which contributes to climate change. Governor Wolf stated that Pennsylvania, as the nation’s second largest producer of natural gas, is “uniquely positioned to be a national leader in addressing climate change.”
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Administrative Watch
On October 21, 2015, Judge Richard McCormick, President Judge of the Westmoreland County Court of Common Pleas, issued a decision and order upholding the validity of Allegheny Township’s zoning ordinance, which permits oil and gas well development in the Township’s R2 Agricultural/Residential Zoning District. The decision in Frederick v. Allegheny Township Zoning Hearing Board, No. 1898 of 2015 (Com. Pl. Westmoreland Co. Oct. 21, 2015), affirms a previous decision of the Township’s Zoning Hearing Board. Babst Calland represented CNX Gas Company LLC (CNX), an intervenor in the case, before both the Common Pleas Court and the Zoning Hearing Board.
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Administrative Watch
The Pennsylvania Supreme Court recently handed down its opinion in Harley- Davidson Motor Co. v. Springettsbury Twp., — A.3d — (2015), in which the Court discusses the impact of environmental contamination on a property’s value for real estate taxation purposes, when the current owner is a party to an agreement with the government to remediate the contamination. The site’s current owner, Harley-Davidson Motor Company (HD), is a party to an agreement with the United States government (including the Department of Defense and Navy) to share in cleanup costs of a former weapons manufacturing plant and is and participating in the EPA’s “One Cleanup” program, under which HD’s cleanup of the property is governed by Pennsylvania’s brownfields remediation statute (Act 2). The cleanup has not been completed.
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Administrative Watch
On September 30, 2015, the U.S. Environmental Protection Agency (EPA) released a pre-publication version of the final rule to amend the Steam Electric Power Generating Effluent Limitation Guidelines and Standards (ELGs) at 40 C.F.R. Part 423. The final rule imposes more stringent effluent limitations for many types of wastewater discharges from both existing and new coal-fired steam electric power plants, and contains significant changes from the proposed rule.
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Administrative Watch
On August 26, 2015, seven environmental groups sent the U.S. Environmental Protection Agency (EPA) a Notice of Intent to Sue the agency in an attempt to force the agency to develop tailored rules for oil and gas wastes under the Resource Conservation and Recovery Act (RCRA) Subtitle D solid waste program. The groups argued that the agency has not within the statutorily required three-year timeframe (1) reviewed and, where necessary, revised RCRA’s Subtitle D solid waste regulations for oil and gas wastes, and (2) reviewed and/or revised its guidelines for state solid waste management plans for oil and gas wastes.
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Administrative Watch
The Pennsylvania Supreme Court recently handed down its opinion in Harley-Davidson Motor Co. v. Springettsbury Twp., — A.3d — (2015), in which the Court discusses the impact of environmental contamination on a property’s value for real estate taxation purposes, when the current owner is a party to an agreement with the government to remediate the contamination.
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Administrative Watch
On September 14, 2015, the Commonwealth Court of Pennsylvania issued a much-anticipated ruling that overturned a decision of the Lycoming County Court of Common Pleas which found the development of a natural gas well pad in a Residential Agriculture zoning district not to be similar and compatible with other uses in that zoning district. The decision in Gorsline v. Board of Supervisors of Fairfield Township, 1735 C.D. 2014 addressed the compatibility of natural gas development in a zoning district consisting of mixed residential and agriculture uses. This ruling is significant because of the amount of natural gas development in the Commonwealth that takes place in similarly situated zoning districts.
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Administrative Watch
The U.S. Environmental Protection Agency (EPA) recently unveiled a number of regulatory proposals aimed at reducing greenhouse gas emissions from the oil and natural gas industry and clarifying how sources in the industry are to be evaluated for air permitting purposes. These highly-anticipated proposals have the potential to affect sources located across various segments of the industry, including but not limited to operations at natural gas well sites, processing plants, compressor stations, and storage facilities. EPA is or will be accepting public comments on all of the proposals.
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Administrative Watch
On June 29, 2015, the U.S. Supreme Court ruled in Michigan v. EPA that the U.S. Environmental Protection Agency (EPA) failed to properly consider compliance costs before promulgating the Mercury and Air Toxics Standards (MATS) rule for fossil fuel-fired power plants under Section 112 of the Clean Air Act (CAA). The Supreme Court’s decision could influence future EPA rulemakings and comes at a time when the agency is putting the final touches on a controversial suite of air regulations aimed at reducing carbon dioxide emissions from power plants.
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