Category: EPA

EPA Unleashes the Public on Industry

EPA has issued two final rules that provide significant rights to the public that may, and likely will, increase litigation or otherwise be used against industry.  First, EPA issued the final Risk Management Program revisions which contain requirements to provide voluminous information to the public regarding the regulated substances at a facility. Second, EPA empowered ‘third-party’ notifiers to record and report “super emitter” events. Together, they create a greater possibility of agency enforcement and private litigation.

On February 27, 2024, EPA issued the “Safer Communities by Chemical Accident Prevention” rule, which added numerous provisions to the Risk Management Program. Most concerning is the addition of an obligation for a facility to provide detailed, internal information about the facility to the public.

Upon “request by any member of the public residing, working, or spending significant time within 6 miles of the fence line of a stationary source,” the owner or operator must provide, within 45 days of the request, the information specified in the rule. Of course, there is no definition or indication of how much time a person must spend within six miles to be considered significant.

The facility must provide the names of regulated substances held in a process, safety data sheets for all regulated substances located at the facility, the five-year accident history information required to be reported to EPA, information about the facility’s emergency response program, and LEPC contact information. Additionally, the facility must provide information about “declined recommendations and justifications,” such as those regarding recommendations declined from natural hazard, power loss, and siting hazard evaluations and justifications and from inherently safer technology or design measures.

The owner or operator must also provide an “ongoing notification on a company website, social media platforms, or through other publicly accessible means” that the above information is available to the public. It must also provide instructions as to how to request the information.

On December 2, 2023, EPA issued a final rule related to methane and volatile organic compounds emissions from new and existing sources in the oil and natural gas industry. While there are many problematic provisions, the most problematic could be the “super-emitter” program.

A super-emitter event is defined as any emissions event with a quantified emission rate of 100 kg/hr of methane or greater that is located at or near an oil and natural gas facility and that is detected using remote detection methods. A person may be approved by EPA to become “a third-party notifier of super-emitter events.” A person must submit certain information to EPA, such as a description of the technologies the entity will use, its standard operating procedures, and a quality management plan.

Once so certified, a third-party notifier can use specified detection methods, such as satellite detection, remote-sensing equipment on aircraft, and/or mobile monitoring platforms, to record a super-emitter event. The third-party notifier provides the information of the super-emitter event to EPA and, once EPA determines the notification is complete and accurate to a reasonable degree of certainty, the EPA will make the notification publicly available and provide the super-emitter event notification to the owner or operator. The owner or operator must initiate an investigation to determine the sources of the event and has 15 days to submit a report to EPA.

Providing information to the public relating to regulated substances and the internal operations of a facility and posting information regarding super-emitter events for public review will likely foster litigation against the regulated entities. Indeed, most of the information necessary to support a private litigant’s claim will now be readily available and easy to obtain. Instead of focusing dwindling resources on compliance and ensuring that accidents or emission events do not occur, owners and operators will now be defending lawsuits. This seems to be the result desired by EPA. Regardless, industry will soon be awash in requests, notices, internal investigations, report writing, and unfortunately additional litigation.

Enough is Enough

The Corps of Engineers refuses to accept the Supreme Court’s decision in Sackett v. EPA, which substantially reduces the scope of Corps’ jurisdiction over ‘adjacent wetlands.’ The Corps’ “unwillingness to concede its lack of regulatory jurisdiction” prompted the Fifth Circuit to emphatically state “enough is enough” in a recent decision related to adjacent wetlands. 

The Clean Water Act regulates the discharge of dredged or fill material into navigable waters.  42 USC §1344(a) (Section 404).  Navigable waters are defined as “the waters of the United States, including the territorial seas.”  42 USCA §1362(7).  

In Sackett, the Supreme Court held that Corps’ jurisdiction under the Clean Water Act “extends to only those wetlands with a continuous surface connection to bodies that are waters of the United States in their own right, so that they are indistinguishable from those waters.” Sackett, 143 S. Ct. at 1344.  The Court also explained that the Corps must establish “first, that the adjacent [body of water constitutes] … ‘water[s] of the United States,’(i.e., a relatively permanent body of water connected to traditional interstate navigable waters); and second, that the wetland has a continuous surface connection with that water, making it difficult to determine where the ‘water’ ends and the ‘wetland’ begins.” Sackett, 143 S. Ct. at 1341.

The Corps has refused to accept this holding and the limitations on its jurisdiction as established by the Supreme Court.  The Corps’ current position is that a ‘continuous surface connection’ exists when wetlands are connected to a jurisdictional water by a discrete feature like a non-jurisdictional ditch, swale, pipe, or culvert.  Further, a continuous surface connection does not require a constant hydrologic connection.  The EPA and Corps echoed this view in guidance released in November 2023 in the form of a PowerPoint presentation.  

However, there are two problems with the Corps’ current position.  First, the case relied on by the Corps in the November 2023 Guidance does not support its claim.  Second, the Fifth Circuit just held that the Corps’ November 2023 Guidance on this point is wrong.  

In the November 2023 Guidance, at p. 48, the EPA and the Corps rely on “prior EPA practice” and a Sixth Circuit case, US v. Cundiff, 555 F3d 200 (6 Cir. 2009), for this position.  However, that case does not specifically make that statement.  The Court actually stated: “Although the term ‘continuous surface connection’ clearly requires surface flow, it does not mean that only perpetually flowing creeks satisfy the plurality’s test.” Cundiff, 555 F3d at p. 212.  The Court went on to discuss seasonal flow “and like water bodies.” Waterways with seasonal flow can be relatively permanent waterways.  Further, one waterway, the South Channel, provided a continuous surface connection between the wetlands at issue and a traditional waterway (the South Channel had flow for all but a few weeks a year).  So, the EPA’s and Corps’ statements regarding non-jurisdictional waters based on Cundiff, if any, are likely dicta.  

On Dec. 18, 2023, the Fifth Circuit decided the case of Lewis v. US (2023 WL 8711318), which negates the EPA’s and Corps’ position in the Fifth Circuit.  Wetlands on two tracts in Livingston Parish were at issue.  The tracts are described as grass-covered, majority dry fields with gravel, logging, and timber roads on the sides of each tract.  The owners harvested and managed timber on the tracts.   As to the first tract (the east tract), waters flowed through roadside ditches to an unnamed tributary (which flowed intermittently), to Colyell Creek (a relatively permanent waterway), and then to Colyell Bay, a traditional navigble waterway about ten to fifteen miles away.  As to the second tract (the west tract), water flowed through roadside ditches to Switch Cane Bayou, to Colyell Creek, and then Colyell Bay. 

At the district court level (2020 WL 4798496), the court was reviewing an approved jurisdictional determination (AJD) initially issued in 2017 after an administrative appeal.  The 2017 AJD found jurisdictional wetlands, noting the above connections to the traditional navigable waterway.  The Plaintiffs argued that there was no jurisdiction under Rapanos (including the Scalia test as to adjacency).  At some point in the district court proceedings, the Corps “acknowledged that the land in question does not meet the adjacency requirement set forth under the Scalia test. Accordingly, it provides no basis for CWA jurisdiction.”  The district court also found that there was no jurisdiction under the significant nexus test.  The matter was remanded back to the Corps. 

After remand, the Corps applied the 2020 Navigable Waters Protection Rule to the wetlands on both tracts.  The Corps indicated in a 2020 AJD that there were no jurisdictional wetlands on the west tract but found wetlands on the east tract by “connecting (a) roadside ditches and (b) a culvert to (c) an unnamed non-‘relatively permanent water’ tributary, then to (d) Colyell Creek (a ‘relatively permanent water’) several miles away, and ultimately to (e) the traditionally navigable waterway of Colyell Bay ten to fifteen miles from the Lewis property.” 

Upon review by the Fifth Circuit and based on these facts, the Court found: “There is no ‘continuous surface connection’ between any plausible wetlands on the Lewis tracts and a ‘relatively permanent body of water connected to traditional interstate navigable waters.’ Recall that the nearest relatively permanent body of water is removed miles away from the Lewis property by roadside ditches, a culvert, and a non-relatively permanent tributary. In sum, it is not difficult to determine where the ‘water’ ends and any ‘wetlands’ on Lewis’s property begin—there is simply no connection whatsoever. There is no factual basis as a matter of law for federal Clean Water Act regulation of these tracts.”  Thus, the Fifth Circuit found no continuous surface connection, even though there was a ditch, a culvert, and a non-relatively permanent tributary. 

The Lewis decision highlights several important points.  First, the Corps admitted under these facts that there was no jurisdiction under the Scalia test in Rapanos (the very same test adopted in Sackett).  Second, there was no continuous surface connection even when water may flow through ditches, a culvert, and a non-relatively permanent tributary.  Finally, the Sackett holding relating to a determination of where waters ends and wetlands begins was specifically incorporated into the Lewis decision.

As a result of the Lewis decision, non-jurisdictional features (ditches, culverts) and non-relatively permanent waterways are not continuous surface connections and cannot serve to link wetlands on a property to a relatively permanent waterway.  On this point, the November 2023 Guidance is not consistent with the Fifth Circuit’s strict and straightforward application of Sackett in the Lewis decision.

Carbon Capture. Use and Sequestration Is Set for Massive Growth

To reach President Biden’s ambitious goal of net zero carbon dioxide (CO2) emissions by 2050, the United States will likely have to capture and permanently sequester significant quantities of CO2. It is no surprise, then, that the Biden Administration has taken steps to enhance and support carbon capture, use, and sequestration (CCUS) efforts.

CCUS generally refers to a set of technologies that capture CO2 at its source, such as a petrochemical facility or a power plant using coal or natural gas. In some instances, CO2 is used in industrial processes or as a feedstock for production of useful commercial products. Captured CO2 has long been used for enhanced oil recovery (EOR) projects. Alternatively, CO2 may be compressed, transported (usually through pipelines), and then injected for permanent sequestration thousands of feet underground in deep rock formations.

EPA reports that 35.1 million metric tons (MMT) of CO2 was used in EOR in 2021, with about 5 MMT used in the food and beverage industry. Only about 7 MMT were sequestered in 2021. Cumulatively, only about 39 MMT have been sequestered since the greenhouse gas reporting rules have been in place. 

However, recent initiatives should increase these numbers dramatically. The Inflation Reduction Act significantly raised the 45Q tax credit for sequestration, expanded the definition of qualified entities, and allowed credits to be directly monetized in certain circumstances. The Bipartisan Infrastructure Bill provided billions to develop large-scale commercial projects and supporting infrastructure.

Creating incentives is important, but these CCUS projects face very involved and laborious permitting requirements. A permit is required to inject CO2 as a Class VI well. The Class VI permitting rules include multiple regulatory requirements designed to safely inject and sequester CO2, some of which are not required for other classes of injection wells. For example, other classes of injection wells have a regulatorily fixed area of review while Class VI have an area of review delineated using computational modeling which projects the extent of the lateral and vertical migration of the CO2 plume. 

Additionally, because the Underground Injection Control (UIC) Program is a federal program, EPA is the permitting authority but many states have their own permitting programs. As a result, an applicant must submit a permit application to EPA and the state. However, to address this problem, a state may seek primacy from EPA to administer the UIC Program in the state. Louisiana and Texas are seeking primacy and, once obtained, only one application will need to be filed. 

Pipelines carrying CO2 may cross wetlands or waters of the United States, requiring permits from the Corps of Engineers. Interestingly, some environmental groups are opposed to carbon sequestration as a tool to address climate change because it fosters the continued use of fossil fuels and, according to some groups, allows fossil fuel users to ‘greenwash’ their environmental accomplishments. Ironically, some groups are using environmental justice principles, another priority of the Biden Administration, as grounds to oppose the placement of CO2 pipelines.

The Biden Administration, industrial concerns, and CCUS companies are all motivated to increase the amount of CO2 that is used or sequestered. The convergence of these interests will likely spark growth in the CCUS industry and assist in reducing the amount of CO2 that is emitted to the atmosphere.

The Focus On Environmental Justice

Although the concept of environmental justice has been around for decades, it has never been more pervasive. Since the advent of the Biden Administration, EPA has infused environmental justice principles into all its activities. It has also invigorated and encouraged citizen groups to file complaints alleging environmental justice issues.

Since January 2021, EPA has issued multiple pronouncements related to environmental issues in permitting, compliance, and remediation matters. For example, in August 2022, EPA released guidance entitled Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions. In it, and for the first time, EPA suggested that a “permit denial may be the only way to avoid a Title VI violation” if there are no mitigation measures an agency can take to address disparate impacts. 

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The New ESG Wave

Environmental, social, and governance (ESG) is a broad and not well-defined term that seems to have become associated with non-financial factors investors use to measure an investment or a company’s sustainability. Companies that may have ignored, resisted, or ‘green-washed’ ESG disclosures may be forced into such disclosures by large investors or the government. It may prove impossible to not be caught up in the coming wave of ESG requirements, both private and public.

As its name implies, there are three ‘pillars’ of ESG. An exact definition of each is difficult as each has been generally described to include any number of factors or criteria. The environmental pillar relates to the impact a company may have on the environment, such as its carbon footprint, including its direct and indirect greenhouse gas emissions, the chemicals involved in its manufacturing processes, or its overall stewardship of natural resources. The social pillar relates to a company’s relationships with its stakeholders or how it deals with people within the company and in the broader community, including diversity programs, hiring practices, and even how a company advocates for social good with its supply chain partners or in the wider world. The governance pillar refers to how a company is led and managed, including how leadership’s incentives are aligned with stakeholder expectations and the types of internal controls which exist to promote transparency and accountability by leadership.

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Hazardous Substance Response Plans Are Coming

Over thirty years after the requirement was first included in the Clean Water Act and after a suit was filed to force EPA to act, EPA has published a proposed rule relating to planning for worst-case discharges of hazardous substances. The comment period is open to May 27, 2022.

The Clean Water Act was amended by the Oil Pollution Act of 1990. As part of that amendment, a provision was added requiring the issuance of regulations mandating that certain facilities prepare and submit a plan “for responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance.” CWA Section 311(j)(5); 33 USCA 1321(j)(5). Of course, both the EPA and the U.S. Coast Guard have promulgated various regulatory requirements relating to discharges of oil, such as those in 40 CFR Part 112, as well as some requirements relating to hazardous substances. However, according to EPA, no single program covered all the requirements of CWA Section 311(j)(5).

Continue reading “Hazardous Substance Response Plans Are Coming” →