EPA’s 500th Day Victory Lap

On the 500th day of the Trump Administration, EPA touted its “notable policy achievements,” highlighting nine such achievements in a “promises made, promises kept” format. However, some of the noted achievements are works in progress and perhaps need more concrete results before a ‘mission accomplished’ banner is hung at EPA headquarters.

The nine ‘achievements’ listed by EPA include: withdrawing from the Paris Climate Agreement, ensuring clean air and water, reducing burdensome government regulations, repealing the so-called “Clean Power Plan,” repealing the Waters of the United States Rule, promoting energy dominance, promoting science transparency, ending ‘sue and settle,’ and promoting certainty to the auto industry.

1. The Trump Administration did withdraw from the Paris Climate Agreement in June, 2017, citing the burden on the U.S. economy and the payments to developing countries. Despite the withdrawal, total U.S. greenhouse gas emissions decreased from 2015 to 2016 by 1.9 percent and are expected to again decrease in 2017. The decrease in total greenhouse gas emissions between 2015 and 2016 was driven in large part by a decrease in CO2 emissions from fossil fuel combustion, which is mainly a result of the substitution from coal to natural gas and other non-fossil energy sources in the electric power sector. Overall, from 2005 to 2016, net emissions have decreased by 11.1 percent. Source: Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2016 (April, 2018).

2. EPA also touts that it is ensuring clean air and water. As support, EPA notes the decline in greenhouse gas emissions and that it is prioritizing the clean-up of Superfund sites. However, ensuring clean air and water would seem to require actions beyond those taken in these two areas.

Overall, and as noted below, EPA is attempting to ‘roll-back’ several high-profile rule-makings issued during the Obama Administration. Many in industry argued that these rules were unnecessary while environmentalists regarded them as essential. The costs and benefits of these rules have been, and are still being, debated. Nevertheless, despite the attempts to ‘roll-back’ these high-profile actions, the Clean Air Act and the Clean Water Act, and the pervasive regulatory regimes associated with each statute, remain in place and in effect. For example, detailed and comprehensive air emission permits, which incorporate the applicable regulatory requirements, are still required prior to constructing a source.

The question becomes, then, whether EPA will enforce the basic statutes and regulations. EPA’s inspection and enforcement presence has been reduced in the last year. Through a series of memoranda, and the adoption of a ‘cooperative federalism’ approach, EPA seems to be signaling that it will allow delegated and authorized states to take the lead in enforcement of the basic statutes. One such memorandum was issued on January 22, 2018 by Susan Bodine, the Assistant Administrator. In it, she announced that, as to inspections and enforcement, EPA will “generally defer authorized States as the primary day-to-day implementer of their” programs.” If EPA finds violations at a facility, the EPA will defer to the state if the state requests that it take the lead for remedying the violations. EPA reserved the right to become involved in several situations, such as significant non-compliance the state has not addressed, widespread non-compliance in a sector, and serious violations requiring criminal enforcement.

It remains to be seen whether the ‘cooperative federalism’ approach will ultimately ensure clean air and water. The various delegated states will have to uphold and enforce the basic environmental framework and EPA will have to act as a regulatory ‘backstop’ to ensure this is done. If not, then the goal of clean air and water may not be fully realized.

3. EPA is reducing burdensome government regulations in accordance with various presidential directives and executive orders. Perhaps the most well-known directive is Executive Order (EO) 13771, January 30, 2017, which has been called the ‘One In, Two Out’ policy. Under the EO, an agency is required to identify at least two existing regulations to be repealed when it proposes a new regulation.

EPA claims to comply with this policy and to have finalized 22 de-regulatory actions which save $1 billion in regulatory costs. Indeed, there have been a number of regulations proposed and finalized that ‘roll-back’ prior rules. However, many of the de-regulatory actions relied on by EPA to make this claim are stays, extensions of effective dates, or reconsiderations and not actual repeals of existing rules.

As required by law, EPA did release its upcoming regulatory agenda. 83 Fed. Reg. 1664 (Jan 12, 2018). Not surprisingly, EPA indicated it will continue to address, among others, the Clean Power Plan, greenhouse gas emission standards for vehicles, the Waters of the United States Rule, the Risk Management Plan Rule, and the Coal Combustion Residual Rule.

4. EPA is in the process of attempting to repeal the “Clean Power Plan.” It proposed to repeal it on October 10, 2017. 82 Fed. Reg. 48035 (Oct. 16, 2017). The comment period ended on April 26, 2018. No final action has been announced.

5. EPA is also in the process of repealing the Waters of the United States Rule issued in 2015. It proposed to rescind the rule and recodify the regulatory text that was in effect prior to the 2015 rule. 82 Fed. Reg. 34899 (July 27, 2017). In the meantime, EPA also finalized a rule establishing the applicability date for the 2015 rule as February 6, 2020. EPA is preparing to propose a new definition along the lines set out by Justice Scalia in the Rapanos opinion, which should be issued in the summer of 2018.

6. EPA’s claim to “promote energy dominance” is general and vague enough to be realized by virtually any action that promotes energy production. In support of this assertion, EPA cites its Energy Independence Report, dated October 25, 2017, which details EPA’s efforts to implement EO 13783 (March 28, 2017). The EO directs all federal agencies to “review all existing regulations, orders, guidance documents, policies, and any other similar agency actions … that potentially burden the development or use of domestically produced energy resources.”

Essentially, the Report is a recitation of various de-regulatory efforts mentioned elsewhere, such as repealing the Clean Power Plan and the Waters of the U.S. Rule. EPA also notes that it withdrew the Information Collection Requests that were sent by the Obama Administration to existing oil and gas facilities in order to collect information to support emission standards on those existing facilities.

Interestingly, EPA discusses the 2016 Methane Rule, issued in June, 2016 and applicable to new oil and gas facilities. EPA’s efforts to rescind this rule have not been successful. A three-month stay was vacated, it has not finalized a proposed two-year stay, and the actual revisions to the rule focused on a few narrow provisions. Otherwise, though, the rule is in effect.

The Report does mention key initiatives that EPA is implementing to further reduce the regulatory burden on domestic energy production. One such initiative is an ongoing review of various policies under the New Source Review permitting programs, which led to a rescission of the “Once in, Always In” policy. Under this policy, which dates back to 1995, once a facility was subject to the maximum achievable control technology standards because it was a major source of hazardous air pollutants (HAP), those standards always applied to the facility, even if it became a minor or area source. The new policy allows a facility to become an area source if it takes an enforceable limit on its HAP emissions and takes measures to bring HAP emissions below the applicable threshold.

7. EPA is promoting science transparency by proposing a rule called Strengthening Transparency in Regulatory Science. 83 Fed. Reg. 18768 (April 30, 2018). The rule requires EPA to ensure that data underlying scientific studies it uses in rule-makings are publicly available in a manner sufficient for independent validation.

8. EPA is ending the ‘sue and settle’ practice. During the Obama Administration, some perceived that certain agreements between environmental groups and EPA regarding the content of regulations to be promulgated had been worked out ‘behind closed doors’ without the full input of all stakeholders. Once the environmental groups and EPA had reached a ‘secret’ agreement, a suit would be filed along with a consent decree for approval by the court. Stakeholders affected by the agreement were excluded from the process.

On October 16, 2017, EPA issued memoranda to address this practice, stating that the “days of … ‘sue and settle,’ are terminated” and that EPA “will not resolve litigation through backroom deals.”  Essentially, EPA will “promote transparency and promote public participation in the consent decree and settlement agreement process involving lawsuits against EPA” by announcing or publishing all aspects of the process. Among other things, EPA will publish notices of intent to sue and complaints or petitions for review that have been filed, and will reach out to and include states and/or regulated entities affected by potential settlements or consent decrees. Importantly, EPA announced that it will not enter into a consent decree with terms that are beyond the authority of the court to grant or impose or a consent decree that turns a discretionary duty into a mandatory one.

9. EPA’s promotion of certainty to the auto industry consists of a withdrawal of a prior determination regarding greenhouse gas emissions standards for model year 2022 – 2025 light-duty vehicles.As part of the mid-term evaluation of the greenhouse gas emissions standards for model year 2022 – 2025 light-duty vehicles, the Obama Administration made a determination in January, 2017, that the previously set standards were appropriate. In April 2, 2018, EPA made a new determination that these standards “are not appropriate in light of the record before EPA.”  EPA withdrew the January, 2017 determination and announced it will initiate a rulemaking to further consider appropriate standards. 83 Fed. Reg. 16077 (April 13, 2018).

While the withdrawal of established standards and developing new standards may not be everyone’s idea of the promotion of certainty, EPA explained that many of the key assumptions relied on by EPA, such as gas prices and consumer acceptance of advanced technology vehicles, were optimistic or have significantly changed and thus were no longer realistic assumptions. However, until the new rulemaking is complete, the current standards remain in effect.

In short, EPA’s new de-regulatory agenda has produced some successes. However, to fully realize that ambitious agenda, much more work will have to be done.

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