Upgraded Standards for Phase I Site Assessments May Impact Loans and Sales

Phase I Environmental Site Assessments (Phase I’s) have been the subject of this column in the past. See, for example, BIC’s August 2013 issue (pg. 94). Recent revisions to the standards for Phase I’s have been announced that will lead to more comprehensive Phase Is, which will benefit purchasers/lenders to the potential detriment of sellers/borrowers.

Phase I’s are widely used by real estate purchasers and lenders to discover past uses of property and potential contamination of that property. The requirements for Phase Is are set out in an ASTM standard, No. E1527-05, and EPA’s “All Appropriate Inquiries” Rule (40 CFR Part 312). Compliance with the existing ASTM standard is deemed compliance with the EPA rule. While both the ASTM standard and the EPA rule include specific guidelines and best practices to which an environmental professional conducting a Phase I must strictly adhere, there are differences that make the EPA rule more stringent.

ASTM has just revised Standard No. E1527-05 and will issue a new standard, No. E1527-13, that includes an updated and more detailed set of guidelines and best practices. EPA is expected to recognize or adopt the new standard and it will become the new standard for environmental professionals conducting Phase I’s. This will bring the ASTM standard more in line with the EPA rule. Continue reading “Upgraded Standards for Phase I Site Assessments May Impact Loans and Sales” →

EPA Opens an Absurd Front in the War on Coal

EPA Administrator Gina McCarthy once declared that she “didn’t go to Washington to sit around and wait for Congressional action. Never done that before, and don’t plan to in the future.” May 1, 2010, quoted in CNS News, March 4, 2013. EPA’s recently proposed rule on ‘carbon pollution’ from new coal-fired power plants is a perfect example of this mind-set and her seemingly fervent belief that “greenhouse gas pollution, through its contribution to global climate change, presents a significant threat to Americans’ health and to the environment upon which our economy and security depends.” Testimony U.S. House of Representatives, June 29, 2012.

On September 20, 2013, EPA issued proposed uniform national limits on the amount of ‘carbon pollution,’ (i.e., carbon dioxide) that future power plants will be allowed to emit. The proposed rule comes at a time when there has been a documented pause in ‘global warming’ over the last 16 years and a growing consensus that the climate models predicting dire results from carbon emissions grossly overstated the risks. Nevertheless, Ms. McCarthy’s EPA is opening new fronts in the war on coal. Continue reading “EPA Opens an Absurd Front in the War on Coal” →

There is a Growing Resistance to Climate Change Proposals

Although temperature data shows that there has been a sixteen (16) year pause in global warming, the Obama Administration continues its push for more regulation of greenhouse gases. In fact, President Obama has flatly stated that, for the balance of his term, his administration would continue to combat climate change as one of its “key priorities” and focus on “strategies … that are lowering … dangerous carbon pollution.” Speech, July 24, 2013. In addition to the ongoing ‘war on coal,’ the continuing decrease in amount of oil and gas production from federally-controlled lands, and the implementation of emission standards for fracking, the administration has proposed and/or implemented ideas to make good on its promise. Continue reading “There is a Growing Resistance to Climate Change Proposals” →

EPA Can Veto Corps’ Wetlands Permits “Whenever” It Wants

In a recent appellate court decision that is sure to create a great deal of uncertainty and hamper development efforts, the Court of Appeal for the D.C. Circuit approved EPA’s authority to veto permits issued by Army Corps of Engineers (Corps) well after they are issued. In fact, based on this ruling, these may do this ‘whenever’ they want. Mingo Logan Coal Company, Inc. v. EPA, No. 12-5150, April 23, 2013.

The Clean Water Act (CWA), Section 404(a), authorizes the Corps to issue permits for the discharge of fill material into waters of the United States at specified disposal sites. This authority, however, is subject to the CWA Section 404(c), which provides authority to EPA’s Administrator “to prohibit the specification (including the withdrawal of specification) of any” disposal site “whenever he determines, after notice and opportunity for public hearings, that the discharge of such materials into such area will have an unacceptable adverse effect.” It is the timing of EPA’s actions (‘whenever he determines’) that will create problems. Continue reading “EPA Can Veto Corps’ Wetlands Permits “Whenever” It Wants” →

An Inconvenient Irony

Hydraulic fracturing, or fracking, remains the target of many environmental groups and some governments who seek to prohibit or significantly curtail the practice. Fracking, however, has provided an abundance of cheap natural gas, which has played a major role in the dramatic decrease in the amount of carbon dioxide (CO2) emitted in the United States. The decrease in CO2 and the role fracking has played in it has created an interesting, and perhaps inconvenient, irony.

The combustion of fossil fuels (such as coal, oil, and natural gas) in the energy, transportation, and industrial sectors creates the vast majority of greenhouse gases (GHG). Coal combustion creates much more CO2 than the combustion of natural gas. CO2 is the most abundant of GHG and remains in the atmosphere much longer than other GHG, such as methane. Although methane and other GHG have a higher global warming potential, the large amount of CO2 emitted into the atmosphere has been a major focus of the climate change (formerly known as ‘global warming’) debate. Recent Environmental Protection Agency (EPA) regulations and the Kyoto Protocol are examples of national and international efforts spurred by environmental groups seeking massive decreases in CO2 emissions. Continue reading “An Inconvenient Irony” →

The Boiler MACT is Back!

Almost two years after EPA issued the flawed Boiler MACT for major and area sources and a year after the proposed revisions were announced, the revised rule has been published. Conversely, the revised rule provides both additional complexities while relaxing standards for certain types of sources.

Brief History

In March, 2011, EPA published National Emissions Standards for Hazardous Air Pollutants (NESHAPS) for major sources and area sources of industrial, commercial, and institutional boilers and process heaters (the Boiler MACT). A major source emits or has the potential to emit 10 tons per year of any single HAP or 25 TPY of any combination of HAP. An area source is any source that is not a major source. Recognizing how flawed the rules were, EPA announced it was reconsidering parts of the rule on the same day it published the final Boiler MACT.

EPA also sought to delay the effective date of the Boiler MACT, until “the proceedings for judicial review of these rules are completed or the EPA completes its reconsideration of the rules, whichever is earlier.” 76 FR 28662 (May 18, 2011). However, the district court struck down the attempted delay. Thereafter, EPA issued a series of No Action Assurance Letters in which EPA announced it would not enforce certain parts of the rule.

A proposed rule was published on December 23, 2011. EPA has now taken final action on the reconsideration. Continue reading “The Boiler MACT is Back!” →

Costly Rules Will Move Forward Now That Election Is Over

Now that the national election has passed, many of the environmental regulations that were delayed or put on hold before the election are moving or will move forward. These are regulations that were in various stages of development prior to the election but which were delayed for various reasons. Many said at the time that the Obama Administration was not willing to face the economic consequences of these rules at a politically inconvenient time.

The ozone standard provides a general example of the regulations to be implemented over the next four years. In March, 2008, the ozone standard was lowered to 0.075 parts per million (ppm) from 0.080 ppm. However, in 2009, the Obama Administration announced it would review that action because it was not stringent enough. EPA claimed that the standard should be between 0.060 and 0.070 ppm to be fully protective of human health. Eventually, the EPA settled on 0.070 ppm, which would create a situation in which at least 650 counties violate the lower standard and would thus be subject to more stringent permitting (and economically costly) regulations. However, in 2011, at the outset of the election cycle, it was announced that the review would be put on hold until 2013, the next mandated review period. It was widely reported at the time that the decision to delay the review until 2013 was politically motivated. In other words, the administration did not want to implement the lower standard because it would negatively impact employment at a politically sensitive time.
Continue reading “Costly Rules Will Move Forward Now That Election Is Over” →

The Ever-Expanding Regulatory Burden

The number of regulations and pages in the Federal Register and the Code of Federal Regulations is already staggering and growing at a record pace. From 2002 to 2008, the number of total pages, by year, in the Federal Register was between a low of 71,269 pages in 2003 and a high of 79,435 pages in 2008. After a dip to 68,598 pages in 2009, the 2010 and 2011 totals were 81,405 and 81,247, respectively. While the number of pages of the Federal Register fluctuated in the 70,000 range until 2010 and 2011, the number of total pages in the Code of Federal Regulations has trended upward from 145,099 in 2002 to 169,301 in 2011. Collectively, federal agencies issued 3,573 final rules in 2010 and 3,807 in 2011, according to the National Archives and Records Administration’s Office of the Federal Register. Continue reading “The Ever-Expanding Regulatory Burden” →

Federal Government Issues New Hydraulic Fracturing Rules

Two rules impacting hydraulic fracturing, or fracking, have been issued or proposed by the federal government. EPA has issued emission standards relating to fracking and the Bureau of Land Management (BLM) has proposed a rule for fracking on public and Indian lands.

On April 17, EPA issued a final rule governing emissions of volatile organic compounds (VOC) and air toxics resulting from hydraulic fracturing and refracturing. The rule is a revision to existing New Source Performance Standards and applies to several aspects of the oil and natural gas industry. As to fracking, though, the rule finalizes operational standards for completions of hydraulically fractured and refractured gas wells. A well completion is defined as the flowback period beginning after hydraulic fracturing and ending with either well shut-in or when the well continuously flows to the flow line or a storage vessel for collection, whichever occurs first. Continue reading “Federal Government Issues New Hydraulic Fracturing Rules” →

The Sackett Decision A Major Victory for Property Owners

The Environmental Protection Agency (EPA) has acknowledged the precedential effect of the landmark Sackett case and wisely decided to expand the decision’s reach beyond the Clean Water Act to a designated group of actions similar to the one at issue in that case. For many, though, the expansion does not go far enough.

In Sackett v. EPA, 132 S.Ct. 1367 (2012), the United States Supreme Court provided a major victory to landowners seeking pre-enforcement review of compliance orders issued under the Clean Water Act. The Supreme Court decision in Sackett changed the entire review framework.

The Sacketts placed dirt and rock on about a half-acre of their property, which the EPA claimed contained wetlands. EPA sent a compliance order to the Sacketts, requiring the Sacketts to, among other things, immediately undertake activities to restore the lot in accordance with an EPA-created Restoration Work Plan and to provide EPA access to the lot and to all records and documentation related to the conditions at the lot. EPA warned the Sacketts that a failure to comply could result in penalties of $37,500 per day, plus a like amount for a failure to comply with the compliance order.

Prior to this decision, the Sacketts would not have an opportunity to contest this order in court unless and until EPA sought to enforce it judicially or sought penalties for the underlying violation. The Supreme Court made clear that judicial review was available under the Administrative Procedure Act (APA) because the compliance order was a “final agency action for which there is no other adequate remedy in a court.” 5 USCA §704. Based on the Supreme Court’s review of the compliance order and APA, the compliance order was deemed a ‘final agency action for which there is no other adequate remedy in a court.’ As a result, the Sacketts were allowed to seek judicial review of the compliance order under the APA.

The EPA has now extended the logic of the Sackett ruling to other ‘final agency actions’ under different statutes. Bowing to reality and saving litigants countless legal battles, EPA issued a memorandum, dated March 21, 2013, in which it advised its regional offices that ‘administrative enforcement orders’ contain language notifying the recipient that judicial review of the order is available. Specifically included in the scope of the new policy are:

FIFRA, Section 13: Stop Sale, Use, or Removal Orders
CAA, Sections 113(a)(5) and 167: Stop Work Orders
CAA, Section 113(a): Administrative Compliance Orders
SDWA, Section 1414: Administrative Compliance Orders
SDWA, Section 1431: Emergency Compliance Orders
EPCRA, Section 325(a): Administrative Compliance Orders
RCRA, Sections 3008(a) and 9006(a): Administrative Compliance Orders
RCRA, Section 3008(h): Interim Status Corrective Action Orders
RCRA, Section 9003(h): Corrective Action Orders

However, there are several very important regulatory decisions that are not included. First, jurisdictional determinations issued by the EPA or the Army Corps of Engineers are not included. In Belle Co., LLC v. U.S. Army Corps of Engineers, a Louisiana district court ruled that Sackett does not extend to such determinations, but the decision is under appeal to the U.S. Court of Appeals for the 5th Circuit. Second, notices of violation (NOVs) under the Clean Air Act were excluded probably because an NOV does not order or compel any type of action. Third, imminent and substantial endangerment orders issued under RCRA Section 7003 are not included. Finally, orders under CERCLA are specifically excluded from judicial review. 42 USCA 9613(h).

Despite the exceptions, acknowledging judicial review of agency decisions is a step in the right direction for those who receive such an order. Ironically, though, it may also mean that any such order will be able to withstand judicial review. As the EPA will know that it may be challenged, it is most likely to ensure that the facts and evidence are available in the record to support the order.