CERLCA Jurisdiction and PRP Definition
A recent Meyers | Nave publication discusses the Supreme Court’s April 20, 2020 decision in Atlantic Richfield Co. v. Christian. The firm suggests the decision adds another layer of complexity to the Comprehensive Environmental Response, Compensation, and Liability Act – CERCLA, liability issue. The decision opens the door for state courts to hear claims that challenge EPA-defined approved clean-ups and has the potential to expand the “potentially responsible party” – PRP class for current “owners” of a “facility.”
The Court’s decision introduces new considerations into CERCLA liability analysis and settlement strategy. The Court’s holding will have many immediate ramifications, including the following:
Clean Water Act Developments
In April, the courts and federal agencies announced major developments significantly affecting regulation under the Clean Water Act – CWA and how the CWA may be applied in the future.
Each of these developments could have far-reaching implications for regulations under the CWA. Assuming the 2020 Rule withstands legal challenges, it is seen as favorable for industry and other regulated entities, while the two judicial decisions are perceived as problematic for such entities. Davis Graham & Stubbs describes each development in more detail in the firm’s recently published article.
MATS Supplemental Cost Finding and Clean Air Act RTR
On April 16, 2020, the U.S. Environmental Protection Agency (EPA) finalized the 2016 Supplemental Cost Finding for the Mercury and Air Toxics Standards – MATS, for coal- and oil-fired power plants, consistent with a 2015 U.S. Supreme Court decision. The agency also completed the Clean Air Act-required residual risk and technology review – RTR, for MATS. According to the EPA power plants are already complying with the standards that limit emissions of mercury and other hazardous air pollutants (HAPs), and this final action leaves those emission limits in place and unchanged.
However, with this final action, EPA is not removing coal- and oil-fired power plants from the list of affected source categories for regulation under section 112 of the Clean Air Act, consistent with existing case law. Those power plants remain subject to and must comply with the mercury emissions standards of the MATS rule, which remains fully in effect notwithstanding the revised cost-benefit analysis.
In addition, EPA has completed the required RTR for MATS and determined no changes to the rule are needed to further reduce residual risk. The RTR satisfies the statutory requirements set out by Congress in the Clean Air Act. More information is available on EPA’s Mercury and Air Toxics Standards website.
Proposal to Retain NAAQS for Particulate Matter
On April 14, 2020, the U.S. Environmental Protection Agency – EPA announced its proposal to retain, without changes, the National Ambient Air Quality Standards – NAAQS for particulate matter (PM) including both fine particles (PM2.5) and coarse particles (PM10).
According to the EPA because of Clean Air Act programs and efforts by state, local and tribal governments, as well as technological improvements, average PM2.5 concentrations in the U.S. fell by 39 percent between 2000 and 2018 while average PM10 concentrations fell by 31 percent during the same period.
EPA states it is following the principles established to streamline the NAAQS review process and to fulfill the statutory responsibility to complete the NAAQS review within a 5-year timeframe. More information about the rule can be found at EPA’s: National Ambient Air Quality Standards (NAAQS) for Particulate Matter (PM) Pollution website.
EPA will accept public comment for 60 days after the proposed standards are published in the Federal Register. EPA plans to issue the final standards by the end of 2020.
U.S. Greenhouse Gas Emissions and Sinks Inventory Announcement
The Environmental Protection Agency’s annual report, “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018,” provides a comprehensive look at U.S. emissions and removals by source, economic sector, and greenhouse gas – GHG. The gases covered by this inventory include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride. The inventory also calculates carbon dioxide emissions that are removed from the atmosphere by “sinks,” e.g., through the uptake of carbon and storage in forests, vegetation, and soils.
On April 13, 2020, the EPA’s comprehensive annual report on nationwide GHG emissions released to the public. It shows that since 2005, national GHG emissions have fallen by 10%, and power sector emissions have fallen by 27%.
“While there was a small rise in emissions due to weather and increased energy demand from the prior year in this report, based on preliminary data, we expect next year’s report to show that the long-term downward trend will continue,” said EPA Administrator Andrew Wheeler.
According to the announcement, annual trends are responsive to weather variability and economic conditions. Year-over-year, national GHG emissions were 3% higher in 2018 than the prior year, due to multiple factors, including increased energy consumption from greater heating and cooling needs due to a colder winter and hotter summer in 2018 compared to 2017.
According to environmental and research groups, driving the drop’s long-term downward trend is chiefly due to a shift away from coal power generation. The 2019 drop was driven by a nearly 10 percent fall in emissions from the power sector, the biggest decline in decades [Rhodium Climate Service]. Utilities are closing coal plants in favor of cheaper natural gas and renewable energy.
Emissions from industry rose slightly last year, and are now greater than those from coal-fired power plants, most driven by a strong economy. Emissions from buildings were up, and emissions from other sectors of the economy collectively grew by more. The shift to lower-carbon energy is largely restricted to the electricity sector, and in order to meet international and state goals, state policies continue to target other sectors that collectively make up a majority of U.S. emissions.
More information is available at EPA’s website Inventory of U.S. Greenhouse Gas Emissions and Sinks.
For more information about potential impacts to waste, energy, or manufacturing please contact your nearest SCS Engineer’s office or your Project Manager.
The Environmental Protection Agency (EPA) plans to make available approximately $5 million to provide supplemental funds to Revolving Loan Fund (RLF) cooperative agreements previously awarded competitively under section 104(k)(3) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). EPA will consider awarding supplemental funding only to RLF grantees who have demonstrated an ability to deliver programmatic results by making at least one loan or subgrant.
The award of these funds is based on the criteria described at CERCLA 104(k)(5)(A)(ii). The Agency is now accepting requests for supplemental funding from RLF grantees. Specific information on submitting a request for RLF supplemental funding is described below and additional information may be obtained by contacting EPA’s Regional Brownfields Coordinators, your SCS Project Manager, or the Brownfield’s Practice at firstname.lastname@example.org.
Requests for funding must be submitted to the appropriate EPA Regional Brownfields Coordinator by April 8, 2020. A request for supplemental funding must be in the form of a letter addressed to the appropriate Regional Brownfields Coordinator with a copy to Rachel Congdon at email@example.com and to Rachel Lentz at firstname.lastname@example.org. Contact your SCS Project Manager or email@example.com for more information regarding filing if you are unsure.
The Small Business Liability Relief and Brownfields Revitalization Act added section 104(k) to CERCLA to authorize federal financial assistance for brownfields revitalization, including grants for assessment, cleanup and job training. Section 104(k) includes a provision for EPA to, among other things, award grants to eligible entities to capitalize Revolving Loan Funds and to provide loans and subgrants for brownfields cleanup. Section 104(k)(5)(A)(ii) authorizes EPA to make additional grant funds available to RLF grantees for any year after the year for which the initial grant is made (noncompetitive RLF supplemental funding) taking into consideration:
In order to be considered for supplemental funding, grantees must demonstrate that they have significantly depleted funds (both EPA grant funding and any available program income) and that they have a clear plan for utilizing requested additional funds in a timely manner.
Grantees must demonstrate that they have made at least one loan or subgrant prior to applying for this supplemental funding and have significantly depleted existing available funds. For FY2020, EPA defines “significantly depleted funds'” as uncommitted, available funding is 25% or less of total RLF funds awarded under all open and closed grants and cannot exceed $600,000. For new RLF recipients with an award of $1 million or less, funds will be considered significantly depleted if the uncommitted, available funding does not exceed $300,000.
Additionally, the RLF recipient must have demonstrated a need for supplemental funding based on, among other factors, the list of potential projects in the RLF program pipeline; demonstrated the ability to make loans and subgrants for cleanups that can be started, completed, and will lead to redevelopment; demonstrated the ability to administer and revolve the RLF by generating program income; demonstrated an ability to use the RLF grant to address funding gaps for cleanup, and demonstrated that they have provided for past and will provide for future community benefit from past and potential loan(s) and/or subgrant(s).
The EPA encourages innovative approaches to maximize revolving and leveraging with other funds, including the use of grant funds as a loan loss guarantee or combining with other government or private sector lending resources. Applicants for supplemental funding must contact the appropriate Regional Brownfields Coordinator to obtain information on the format for supplemental funding applications for their region.
REPRINT FROM THE EPA PRESS RELEASE
EPA Finds That Financial Risks from Petroleum and Coal Products Manufacturing Industry Does Not Warrant Additional Federal Requirements
WASHINGTON (Dec. 4, 2019) — Today, the U.S. Environmental Protection Agency (EPA) is proposing to not impose burdensome and potentially duplicative financial responsibility requirements for the petroleum and coal products manufacturing industry (the industrial sector that transforms crude petroleum and coal into usable products) because the financial risk to the federal government from those facilities is already addressed by various existing federal and state technical and financial requirements and modern material management practices. EPA’s proposed action would not drop existing federal requirements, rather it is a proposal to not impose additional requirements.
“After a thorough evaluation, EPA has determined that the petroleum and coal manufacturing industry’s current practices, along with existing federal and state regulations, adequately address potential financial risks to the federal government and American taxpayer,” said EPA Administrator Andrew Wheeler. “As part of President Trump’s commitment to protecting our environment and growing our economy, we are committed to responsible regulation while not imposing additional and unnecessary requirements on key sectors of the economy when the current regulatory framework is working.”
In the 39 years since the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was enacted, a comprehensive regulatory framework has developed. Existing monitoring and operation standards have consistently worked over time to decrease the risk in this industry that if a hazardous waste cleanup is needed, the federal government will have to bear the cost of cleanup.
Further, this proposed finding does not affect, limit, or restrict EPA’s current authority to take a response action or enforcement action under CERCLA at any facility in this industry, to include requirements for financial responsibility as part of such response action, or to take appropriate action under various other federal environmental statutes that may apply to individual facilities, such as the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, and Toxic Substances Control Act. These existing regulations, including financial responsibility requirements, continue to apply to facilities in this industry.
This proposal is consistent with the analysis EPA undertook in developing its final action for the hard rock mining industry. In that case, EPA’s approach was unanimously upheld by the D.C. Circuit Court of Appeals in July 2019. EPA has evaluated the degree and duration of risk of the possible cost to cover the cleanup of hazardous substance releases associated with the production, transportation, treatment, storage, or disposal of hazardous substances in the petroleum and coal products manufacturing industry. EPA also examined the industry’s economic trends and the financial health of the sector and found the industry to be in a relatively stable financial position with low default risk. EPA’s evaluation showed that existing regulatory programs and voluntary practices reduce the need for federally financed response action at facilities in this industry.
Section 108(b) of CERCLA, also known as Superfund, directs EPA to develop regulations requiring classes of facilities to establish and maintain evidence of financial responsibility to cover the costs associated with releases or threatened releases of hazardous substances from their facilities.
In December 2016, EPA described its plan to consider financial requirements under CERCLA for the electric power industry, the petroleum and coal products manufacturing industry, and the chemical manufacturing industry. On July 2, 2019, EPA proposed to not issue financial responsibility requirements for the electric power industry. EPA is currently working on a proposal for the chemical manufacturing industry.
Today’s proposal for the petroleum and coal industry will be published in the Federal Register, and EPA invites stakeholders and the public to provide comments during the 60-day public comment period.
For more information, visit: https://www.epa.gov/superfund/superfund-financial-responsibility, or contact SCS Engineers at firstname.lastname@example.org for help.
Proposed Amendments to the Coal Ash Regulations, Public Hearing Registration Open
EPA is proposing further amendments to the regulations governing the disposal of coal combustion residuals, commonly known as coal ash.
The proposal addresses two issues remanded by the courts back to EPA for action. EPA is proposing a modification to one of the criteria used to determine if coal ash is being beneficially used or would be considered disposal. The second proposed change is to the requirements for managing piles of coal ash. Other proposed changes include revisions to enhance public access to information.
In addition to accepting written comments on this proposal, EPA is holding two public hearings – one in person in Arlington, Virginia on October 2, 2019, and a second one that will be held virtually.
To learn more about this proposal and the public hearings, learn how to comment and register to speak or observe, visit: https://www.epa.gov/coalash/coal-ash-rule#July2019proposal.
Upcoming e-Manifest Fiscal Years 2020-2021 User Fees
EPA announced the new e-Manifest user fees for fiscal years 2020-2021 (October 1, 2019-September 30, 2021). These user fees are set based on the manifest usage and processing costs for each manifest type.
EPA encourages the hazardous waste industry to adopt fully-electronic manifesting as soon as possible so that industry members can take maximum advantage of the benefits and cost savings of electronic manifesting. However, EPA acknowledges that it will take time for industries and receiving facilities to fully transition to electronic manifests. EPA supports the wide adoption of electronic manifesting by the regulated community as soon as it is feasible.
For more information and to view the new user fees, visit https://www.epa.gov/e-manifest/e-manifest-user-fees-and-payment-information#2020fees.
Comment Period Open for Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) 108(b) Electric Power Industry Proposal
EPA is seeking public comment on a proposed rule not imposing financial responsibility requirements under CERCLA Section 108(b) for Electric Power Generation, Transportation, and Distribution facilities.
The comment period for the proposed changes is open for 60 days, through September 27, 2019. To learn more, view the proposal, and how to submit comments visit: https://www.epa.gov/superfund/proposed-action-financial-responsibility-requirements-under-cercla-section-108b-classes.
Incremental Sampling Methodology (ISM) at PCB Cleanup Sites
ISM has been shown to be a valid and effective method for determining the concentrations of contaminants, including PCBs, in heterogeneous soils when designed appropriately. This document has a brief description of ISM and provides EPA’s policy of reviewing and approving site-specific applications to use ISM at PCB cleanup sites: https://www.epa.gov/pcbs/incremental-sampling-methodology-ism-pcb-cleanup-sites.
New and Updated Pharmaceutical Frequent Questions Posted
EPA recently updated several frequent questions about the final rule establishing management standards for hazardous waste pharmaceuticals and amending the P075 listing for nicotine. Additionally, EPA added a section about the sewer ban, which was effective August 21, 2019.
Check out the frequent questions out here: https://www.epa.gov/hwgenerators/frequent-questions-about-management-standards-hazardous-waste-pharmaceuticals-and.
Use these EPA resources to learn more, or contact SCS at email@example.com and we’ll help answer your questions.
SCS Engineers periodically prepares Technical Bulletins to highlight items of interest to our clients and friends. Our most recent SCS Bulletin summarizes the Brownfields BUILD Act (Brownfields Utilization, Investment, and Local Development). The BUILD Act was signed into law in March 2018, amending the Brownfields provisions of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Specific changes include increased eligibility for funding, additional liability protections, and changes to grant programs. The link above will take you directly to the summary.
SCS will continually update coverage of this Act on our website. I welcome you to use our staff resources for guidance or to answer questions.