A Return to Regulation?

The prospect of a Biden Administration signals the likely return to active and aggressive regulation of environmental matters. In a fashion similar to the Trump Administration’s approach to Obama-era regulations, the Biden Administration has already vowed to not only reverse Trump-era de-regulation but go beyond the Obama Administration’s regulatory efforts.

Perhaps the most glaring example is addressing what the Biden-Harris Transition web-site calls the “existential threat of climate change.” Mr. Biden promises to “recommit the United States to the Paris Agreement on climate change” and to “go much further than that” by “lead[ing] an effort to get every major country to ramp up the ambition of their domestic climate targets.” Indeed, Mr. Biden pledges to “put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050.”

The Paris Agreement calls for “holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels” through nationally determined contributions (NDC) to carbon emission reductions. The United States’ NDC was a 26-28 per cent reduction below its 2005 level by 2025. According to EPA, gross GHG emissions were reduced between 2005 and 2018 from 7,392 MMT CO2 Eq. to 6,677 MMT CO2 Eq.

It is unknown at this time to what extent Mr. Biden will “ramp up” the United States’ already ambitious climate targets or exactly how Mr. Biden intends to achieve the “ramp up.” He has stated that he would invest billions in clean energy development, that he would transition away from the oil industry by 2050, and that he would phase out or end fracking on federal lands. It is also likely that Mr. Biden would reverse the Trump Administration’s roll-back of the oil and gas sector methane rule.

Another example relates to environmental justice. Mr. Biden states that he wants to “ensure that environmental justice is a key consideration in where, how, and with whom we build” the clean energy infrastructure and go about “righting wrongs in communities that bear the brunt of pollution.” EPA defines environmental justice as the “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”

Mr. Biden does not provide specifics but does state that a Biden Administration will create “good, union, middle-class jobs in communities left behind,” presumably in clean energy endeavors. The creation of jobs in the clean energy sector may be how he intends to right the wrongs in potentially over-polluted communities, but it is more likely that there will be a greater push to limit or restrict industrial development in such areas.

There are numerous other Trump-era executive orders and regulations that a Biden Administration will likely address. As to the executive orders, they are easily reversed and Mr.; Biden has signaled he plans to do so. As to promulgated regulations, EPA must proceed through the notice-and-comment requirements imposed by the Administrative Procedure Act. However, regulations that are finalized in the last days of the Trump Administration may be subject to repeal under the Congressional Review Act, which was used in 2017 to repeal several Obama-era regulations. Although there is much speculation at this time, it is likely that the de-regulatory agenda pushed by the Trump Administration will be replaced with a re-regulatory agenda under a Biden Administration. To ensure some growth opportunities remain, industrial concerns will have to oppose the Biden agenda as assertively as the environmental groups opposed the Trump agenda.

The End of Regulation by Guidance Document?

EPA has issued a final rule governing its issuance of guidance documents, declaring that the Rule will lead to enhanced transparency and help ensure that guidance documents are not improperly treated as legally binding requirements by the EPA or by the regulated community. In many instances over the years, guidance documents were issued without public input, even though the policy or interpretation in the guidance document created binding requirements applicable to the regulated community. This Rule ends that practice.

On October 9, 2019, President Trump issued an executive order, “Promoting the Rule of Law Through Improved Agency Guidance Documents.” It declared that agencies sometimes used guidance documents “to regulate the public without following the rulemaking [that is notice and comment] procedures of the” Administrative Procedure Act. It directed that agencies must treat guidance documents as non-binding both in law and in practice, take public input into account in formulating guidance documents, and make guidance documents readily available to the public.

According to EPA, the Rule meets these requirements, and more. The Rule provides definitions of “guidance document” and “significant guidance document,” minimum requirements for a “guidance document” and additional requirements for “significant guidance documents,” procedures for the public to petition the Agency for modification or withdrawal of guidance documents, and an online portal (the EPA Guidance Portal) to identify EPA guidance documents for the public.

A “guidance document” is a statement of general applicability, intended to have future effect on the behavior of regulated parties, that sets forth a policy on a statutory, regulatory, or technical issue, or an interpretation of a statute or regulation. There are a few exclusions form this broad definition, such as rules subject to notice and comment and rules of agency procedure and practice or internal guidance not intended to have substantial future effect on the behavior of regulated parties. Generally, a “significant guidance document” is one that may reasonably be anticipated to lead to an annual effect on the economy of $100 million or more.

All guidance documents must, among other things, include the term “guidance,” include the citation to the statute or regulation to which the guidance document applies or which it interprets, and avoid mandatory language such as ‘shall’ or ‘must.’ Further, it must include a disclaimer that the contents do not have the force and effect of law and that it does not bind the public in any way. Importantly, any guidance document issued by an EPA Regional Office must receive concurrence from an appointed EPA official at EPA headquarters. A significant guidance document must adhere to these requirements, plus it must be subject to notice and comment before finalization.

EPA also included a provision allowing any member of the public to petition EPA for the modification, withdrawal, or reinstatement of a guidance document. EPA will make information about petitions received available to the public and indicated that it should respond to a petition in no more than 90 calendar days after receiving the petition.

Finally, the Rule requires that all guidance documents be included in the EPA Guidance Portal. The Portal currently exists (www.EPA.gov/guidance) and contains the documents meeting the definition of a “guidance document.” The web-page contains the disclaimer that EPA’s guidance documents lack the force and effect of law agency and that it may not cite, use, or rely on any guidance that is not included in the Portal. The executive order and the Rule allow the issuance and use of guidance documents while providing public input and access and general procedures for issuance. Of greater significance and importance to the regulated community, there is some relief from the use of binding guidance documents issued without public knowledge or input.

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. Continue reading “EPA’s 500th Day Victory Lap”

EPA Enforcement In The Coming Years

EPA’s enforcement presence has been reduced over the last several years. This trend will continue during the Trump Administration as EPA re-defines its relationship with states and tribes. Even so, EPA has announced an enforcement approach that will maintain it as a formidable enforcer of our environmental laws.

According to EPA’s web-site, EPA’s budget was $10.3B in FY 2010, $8.1B in in FY 2016, and $8.06B in FY 2017. For those same years, EPA’s employee count was 17,218, 14,779, and 15,408, respectively. So, EPA’s budget and employee count were on a downward trend during the Obama years.[1] Continue reading “EPA Enforcement In The Coming Years”

The Administration Restrains Itself

The Trump administration has recently signaled a retrenchment in agency actions. These voluntary actions curtail the administrative agency from exercising powers or authority beyond what may be provided to it under applicable statutes and regulations.

The attorney general issued a memorandum to all Department of Justice components in November stating that the department will no longer engage in the practice of issuing guidance documents that effectively create rights or obligations binding on persons or entities outside the executive branch without undergoing the rulemaking process. The memorandum barred any guidance documents of general applicability and future effect that are designed to advise parties outside the executive branch about legal rights and obligations falling within the department’s regulatory or enforcement authority.

When issuing guidance documents, the department was instructed, among other things, to identify the document as guidance and clearly state that they have no legally binding effect on persons or entities outside the federal government. Also, guidance documents should not be used for the purpose of coercing persons or entities outside the federal government into taking any action or refraining from taking any action beyond what is required by the terms of the applicable statute or regulation.

As to the Department of Justice, this will end the practice of issuing guidance documents that have the effect of binding anyone outside of the government, unless the proper rulemaking procedures are followed. It is unclear whether the memorandum applies outside of the Department of Justice. Regardless, in addition to its public efforts, EPA has quietly taken two actions that voluntarily restrict its ability to inject itself into state permitting issues.

First, in a memorandum posted on EPA’s website in December relating to the pre-construction analysis of New Source Review applicability, Administrator Scott Pruitt announced that EPA will no longer delve into, or “second-guess,” the pre-construction applicability analysis submitted or performed by an applicant. Thus, when an applicant performs the applicability analysis in accordance with the calculation procedures in the regulations and follows the applicable recordkeeping and notification requirements, that owner or operator has met the regulations. In such cases, EPA will not substitute its judgment for that of the applicant’s emissions projections. Essentially, this action reverses a prior policy in which EPA asserted the right to require additional analysis despite the applicant’s projections or compliance with calculation protocols.

Secondly, Administrator Pruitt issued two orders in October denying petitions for objections to Title V air permits issued by state agencies. Under the Clean Air Act, any person may petition the EPA to object to the terms and conditions within a state-issued Title V permit. Title V permits usually contain requirements from the pre-construction Prevention of Significant Deterioration (PSD) Program. Over the last several years, citizen groups have successfully petitioned EPA to issue objections to PSD permit conditions included in Title V permits. These two decisions state that the petition for objection process is not the proper forum or method to object to PSD requirements. Instead, the state’s administrative and judicial review process should be utilized.

These actions are seen by many as a departure from the recent past, in which agencies wielded authority without appropriate limitations. Certainly, they suggest that agencies will now act in a more restrictive manner.

EPA Unveils Framework For Industry Input on Regulations

Since the beginning of the Trump administration, many of the rules issued by the Obama administration, such as the Clean Power Plan and the Clean Water Rule, have been targeted for review. Scott Pruitt and EPA have been in roll-back and repeal mode.  However, with the newly announced Smart Sectors Program, EPA seems to be taking a positive approach to dealing with industry and the regulated community instead of merely dealing with previously issued rules. Continue reading “EPA Unveils Framework For Industry Input on Regulations”

The Ozone Two-Step

Regulatory certainty is a benefit for industry, allowing orderly design, planning, and budgeting for capital expenditures. Many environmental regulations have been in place for many years and provide a certain level of continuity. However, the national ambient air quality standard for ozone has not proven itself to be a model of stability over the years.

The Clean Air Act requires that national ambient air quality standards be set at a level that protects human health and the environment with an adequate margin of safety. For years, the standard for ozone was set at 80 parts per billion (ppb). In 2008, EPA lowered the standard to 75 ppb. However, when the Obama Administration entered office in January, 2009, EPA reviewed actions taken by the previous Bush Administration. As to ozone, EPA initiated a rule-making in 2010 to reconsider the 2008 Standard, relying on, among other things, the fact that 75 ppb was above the range recommended by EPA’s scientific advisory board and so may not be protective of human health. The reconsideration rule proposed that the standard be set between 60 and 70 ppb. Continue reading “The Ozone Two-Step”

The Clean Water Rule Gets A Well-Needed Review

The EPA continues to implement the de-regulatory agenda of President Trump. One rule that is now being reviewed for repeal and revision is the Clean Water Rule. Many felt that the Rule went well beyond the scope of the Clean Water Act and regulated private property that had not been previously subject to regulation. As a result, they support EPA’s and the Corps’ current efforts to repeal the Rule and revise it to a more traditional view of the Clean Water Act’s jurisdictional reach. Continue reading “The Clean Water Rule Gets A Well-Needed Review”

Will Oil and Gas Get Any Relief from Obama-era Rules?

The Trump administration has made it no secret that it seeks to unleash the potential of American-produced energy. To further that goal, Executive Order (EO) No. 13783 was issued March 28, which required all agencies to review existing regulations that potentially burden the development of domestically produced energy resources. Although agencies such as EPA have taken steps to begin the mandated reviews and provided some relief in the form of stays, at least one court so far has not been as accommodating. Continue reading “Will Oil and Gas Get Any Relief from Obama-era Rules?”

Will EPA achieve its core mission?

President Trump has signaled a desire to reduce the burden caused by environmental regulations. An executive order issued Jan. 30 requires that two rules be identified for repeal for every new rule proposed. He issued another executive order Feb. 24 announcing that it is the official policy of the U.S. to alleviate unnecessary regulatory burdens. At the same time, though, the president has stated he wants to reinvigorate the manufacturing and oil and gas development sectors, while also shortening the environmental review process for major infrastructure projects. Continue reading “Will EPA achieve its core mission?”