Sidley Environmental Trends

Topics discussed this week include:

  • EPA and Corps propose to delay Waters of the United States effective date.
  • BLM opposes petition for panel rehearing in hydraulic fracturing appeal.
  • D.C. Circuit weighs coal ash rule challenges and EPA effort to remand.
  • Third Circuit hears argument on Delaware River Basin Commissions hydraulic fracturing moratorium.
  • Environmental groups petition FERC for rehearing on Atlantic Coast Pipeline.
  • EC reauthorizes glyphosate as study finds no cancer link.
  • DOJ, EPA enforcement officials speak on environmental enforcement.
  • EPA Assistant Administrator for Air and Radiation confirmed.

EPA and Corps propose to delay Waters of the United States effective date. The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) proposed to postpone the effective date of the Obama administration’s Waters of the United States rulemaking by at least another two years. When finalized, the rule was to be effective on Aug. 28, 2015, but the U.S. Court of Appeals for the Sixth Circuit issued a nationwide stay of the rule before the effective date. The U.S. Supreme Court is reviewing whether the Sixth Circuit had jurisdiction to issue the stay or whether challenges should be made exclusively in the U.S. District Courts. The proposal to postpone the effective date by rule provides certainty to regulated entities and effectively hedges against a Supreme Court reversal of the Sixth Circuit’s stay. EPA and the Corps proposed to rescind the Waters of the United States rule in June. The agencies will not finalize a stay until 2018, meaning that the Waters of the United States rule, if it is not rescinded, will become effective in 2020.

BLM opposes petition for panel rehearing in hydraulic fracturing appeal. The U.S. Bureau of Land Management (BLM) argued that there is no need for the U.S. Court of Appeals for the Tenth Circuit to revisit its decision vacating a district court’s ruling that BLM’s hydraulic fracturing rule for Federal and Indian lands was unlawful. BLM and environmental groups appealed the district court decision to the Tenth Circuit, which ruled that BLM’s proposal to rescind the rule mooted the appeal. The panel, however, also vacated the district court’s decision on procedural grounds and without considering the decision’s merits. States and industry groups, which successfully challenged the rule below, argued that this effectively revives the hydraulic fracturing rule when the Tenth Circuit issues its mandate, turning a defeat for environmental groups into an unwarranted victory. BLM, however, argued that vacating the district court decision was within the Tenth Circuit’s discretion. It did, however, argue that the rule should never become effective because BLM will be able to complete a new rulemaking after the new year. Its brief indicated that the Office of Management and Budget was reviewing a final rule on an expedited basis and requested that the Tenth Circuit stay its mandate until Jan. 6, 2018. Environmental groups agreed that the Tenth Circuit should not reconsider its decision to vacate the district court’s ruling but asked the court to issue the mandate as soon as possible and noted that the court already rejected a prior motion by BLM to stay the case until the end of the rulemaking process.

D.C. Circuit weighs coal ash rule challenges and EPA effort to remand. The U.S. Court of Appeals for the District of Columbia Circuit heard oral argument on challenges by environmental groups and industry to EPA’s 2015 rule regulating coal ash disposal under the Resource Conservation and Recovery Act (RCRA). EPA recently announced that it was reconsidering 16 aspects of the rule and asked the court to remand those issues without vacatur, effectively removing them from the consolidated challenges. Among other issues, EPA will reconsider provisions establishing federal groundwater protection standards, the regulation of coal ash storage piles slated for recycling and whether inactive coal ash impoundments are subject to regulation. Environmental groups opposed a remand, complaining that it took EPA decades to issue a rule on coal ash disposal and that further delay would harm their members and deprive states of necessary guidance. Judges on the D.C. Circuit panel hearing the case sharply questioned the Department of Justice (DOJ) attorney representing EPA about the remand, stating that EPA is free to reconsider the rule after the court issues a decision and that remanding for reconsideration could allow the agency to avoid judicial review. The court previously denied EPA’s motion to stay the litigation pending reconsideration. On the substance, industry groups argued that language in RCRA, allowing for regulation of sites where coal ash “is disposed of,” deprives EPA of authority to regulate inactive coal ash impoundments. The panel spent a significant portion of the 2.5-hour argument on the meaning of the term and whether “is disposed of” can include passive disposal through impoundment leaks. One judge also questioned whether the Water Infrastructure for Improvements to the Nation Act mooted industry challenges, asking whether Congress effectively approved of the rule as it was written at the time the law passed. Industry is also challenging the rule’s regulation of coal ash storage areas where the ash is awaiting recycling for beneficial uses, such as roadbeds or wallboard. Regardless of the court’s eventual decision, EPA will revise the rule on a two-tiered schedule. It will propose the first tier of revisions in March 2018, to be finalized by June 2019. The second tier of revisions will be proposed in September 2018 and finalized by December 2019.

Third Circuit hears argument on Delaware River Basin Commissions hydraulic fracturing moratorium. The Wayne Land & Mineral Group LLC made its case to the U.S. Court of Appeals for the Third Circuit that the Delaware River Basin Commission lacks the authority to bar hydraulic fracturing. The Commission operates under an interstate compact with its members appointed by the Governors of Pennsylvania, New York, New Jersey, and Delaware. It imposed a moratorium on hydraulic fracturing within the 13,500-square-mile Delaware River Basin, which includes a portion of the Marcellus Shale play, claiming that the process threatens groundwater. It is working on regulations to impose a formal ban. Wayne Land & Mineral Group, a coalition of landowners within the base, challenged the ban, but a Pennsylvania district court sided with the Commission, citing its broad authority to protect water. The Wayne Land & Mineral Group appealed. During oral argument, the landowners argued that banning hydraulic fracturing regulated land use, such as prohibiting the construction of gas well pads, not water. During oral argument, some members of the panel appeared to disagree, noting that the Commission is not regulating land use but banning a well stimulation technique that uses millions of gallons of water and produces significant volumes of wastewater. The panel also questioned counsel for the Commission on its authority to regulate industrial activities because they use water, raising skyscraper construction as an example.

Environmental groups petition FERC for rehearing on Atlantic Coast Pipeline. Nearly twenty environmental groups petitioned the Federal Energy Regulatory Commission (FERC) for rehearing on its approval of the $5 billion Atlantic Coast Pipeline. The project is planned to run 600 miles from West Virginia through Virginia to North Carolina, transporting approximately 1.5 billion cubic feet of gas per day to planned and existing gas-fired power plants. FERC approved the pipeline in October on a 2-1 vote. The environmental groups, however, claim that FERC failed to adequately analyze the project’s downstream greenhouse gas emissions under the National Environmental Policy Act and violated the Clean Water Act by approving the pipeline before the project received Water Quality Certifications from state environmental agencies. The request for reconsideration is part of a larger effort by environmental groups to block pipelines carrying natural gas produced via hydraulic fracturing.

EC reauthorizes glyphosate as study finds no cancer link. The European Commission reauthorized the use of pesticide ingredient glyphosate through 2022 despite stiff resistance from some members and Greenpeace EU. Glyphosate’s current 15-year authorization will expire on Dec. 15, and Monsanto was seeking another 15-year authorization. After prior committee votes failed to reach a decision, it passed a compromise reauthorization for five years instead of 15. Passage required Germany, which abstained from prior votes, to change its vote in favor of the five-year reauthorization. Representatives from France, Italy, and Greenpeace EU are campaigning to phase out the chemical based on a controversial 2015 meta-study by the World Health Organization’s International Agency for Research (IARC) concluding that glyphosate is a probable carcinogen. The 2015 IARC study raised substantial controversy with subsequent studies by the European Food Safety Authority and European Chemicals Agency, among others, reaching the opposite conclusion. The European Union’s review of reauthorization came as a new paper published in the Journal of the National Cancer Institute found that a study of over 54,000 U.S. farmers found no statistically significant link between the use of glyphosate pesticides and cancer. The study, updating a prior review from 2005 that reached the same conclusion, was the largest study of its kind. Environmental groups claimed a partial victory in preventing a full 15-year reauthorization and predicted that documents to be produced in a California tort suit will provide new information to help them defeat future reauthorizations.

DOJ, EPA enforcement officials speak on environmental enforcement. Two high-ranking environmental officials discussed enforcement actions, policy, and direction during recent public speaking engagements. Acting Assistant Attorney General for the Environment and Natural Resources Division, Jeffrey Wood, promised that the DOJ will continue to pursue civil and criminal Clean Water Act cases during remarks at the National Association of Clean Water Agencies’ National Water Enforcement Workshop. Wood reviewed several enforcement actions during his ten month tenure, including settlements with major tuna and poultry producers. He disputed claims by environmental groups that DOJ would favor industry, but stated that the Department would not pursue enforcement actions based on creative theories of liability or those found only in guidance documents. This statement coincided with DOJ issuing a memorandum prohibiting the issuance of guidance documents that impose de facto binding regulatory obligations. In a separate engagement, Patrick Traylor, Deputy Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance, said that EPA is considering a “refresh” of its audit policy to encourage companies to self-report violations. Traylor, speaking at an American Bar Association event hosted by Sidley Austin, stated that EPA’s existing audit policy could be expanded and improved to provide additional incentives for disclosure. Industry has criticized EPA for taking too long to review and act on disclosures. Traylor also explained that state environmental agencies will help identify new enforcement priorities and determine when existing priorities are outdated or largely accomplished through a recently created workgroup. EPA’s National Enforcement Initiative goals are due to be updated in 2019 and Traylor said that the workgroup will be consulted on any revisions. The workgroup is part of a larger effort for states to pursue more of the enforcement work traditionally shouldered by EPA. Like Wood, Traylor also touted recent enforcement actions, including settlements with refinery operators.

EPA Assistant Administrator for Air and Radiation confirmed. Congress confirmed Bill Wehrum by a 49-47 vote to serve as the EPA Assistant Administrator for Air and Radiation. Wehrum will be only the second confirmed political appointee after Administrator Scott Pruitt. He formerly served as counsel and Acting Assistant Administrator for the Office of Air and Radiation wthe George W. Bush administration before re-entering private practice. Due to his time in private practice, Wehrum must avoid participating in matters involving former clients for one year.