May 242018

Sidley Environmental Trends

Environmental Trends Contributors
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Topics discussed this week include:

  • FERC decision sets limits on how greenhouse gas emissions are to be reviewed.
  • EPA sued over hardrock mining financial responsibility rule decision.
  • OSHA to update hazard communication standard to reflect GHS changes.
  • EPA to finalize regulation on the use of paint-stripping chemical methylene chloride.
  • Court dismisses suit challenging constitutionality of the Congressional Review Act.
  • Court finds that one Prop 65 warning is enough in case against winemakers.

FERC decision sets limits on how greenhouse gas emissions are to be reviewed. On May 18, the Federal Energy Regulatory Commission (FERC) issued a 3-2 decision to restrict the consideration of climate change effects in FERC environmental assessments for new natural gas pipeline projects as part of an order denying rehearing on Dominion Transmission’s New Market Project in New York. Under the ruling, FERC would now only consider greenhouse gas emissions associated with constructing the proposed pipeline rather than considering a project’s potential effect on production and consumption of natural gas. In the decision, the majority wrote that FERC would no longer prepare “upper-bound” estimates of greenhouse gas emissions that would result from changes in gas production and consumption when new pipeline capacity is brought online, as such information is speculative under the National Environmental Policy Act. The two dissenting commissioners argued that the emissions that result from upstream and downstream gas consumption are not speculative but are cumulative and indirect impacts of a new project, necessitating FERC review.

EPA sued over hardrock mining financial responsibility rule decision. Environmental organizations have filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit challenging the Environmental Protection Agency’s (EPA) decision not to issue a regulation that would have imposed federal financial responsibility requirements on certain hardrock mining facilities under Section 108 of the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). CERCLA § 108 granted EPA authority to establish financial responsibility rules for classes of facilities. When EPA had not taken action, advocacy groups sued EPA, and in 2015, the D.C. Circuit approved a settlement that gave EPA until Dec. 1, 2017, to decide whether to issue regulations for the hardrock mining industry. In December, EPA announced that it would not issue requirements, finding that the proposed regulation was unnecessary because, in part, the degree and duration of risks associated with modern hardrock industry practices did not warrant imposing financial responsibility requirements for the hardrock mining sector.

OSHA to update hazard communication standard to reflect GHS changes. In its spring 2018 regulatory agenda, the Occupational Safety and Health Administration (OSHA) said it has plans to update how companies communicate the hazards of chemicals they sell and export, by aligning OSHA’s hazard communication standard with a United Nations system called the Globally Harmonized System of Classification and Labeling of Chemicals, or GHS. The GHS sets international standards for what health and safety information must be included and how the information should be presented on hazardous materials labels. OSHA aligned the two systems in 2012, which created compliance issues for U.S. companies as it was the first time OSHA aligned its hazard communication standard with the GHS. The most recent version of the GHS was released in July 2017 and changed a variety of definitions and categories for chemical hazards, including new rules for the classification of flammable gases. OSHA had originally planned to issue an update during the Obama administration, but that had been put on hold. As of late 2017, OSHA had placed revising the standard on its list of long-term actions, so this recent announcement advancing the update is a change from previous OSHA announcements.

EPA to finalize regulation of the use of paint-stripping chemical methylene chloride. On May 10, the EPA announced that it intends to finalize a proposed rule concerning the use of the chemical methylene chloride. Methylene chloride is a clear, volatile liquid used in paint and coating removal applications. In January 2017, EPA proposed to ban the chemical’s consumer and commercial paint-stripping uses. In its announcement, EPA stated that it is not going to reevaluate the paint-stripping uses of methylene chloride, that it will rely on its previous risk assessments, and that it intends to send the final rule to the Office of Management and Budget for review shortly. This is the first action EPA is taking to regulate the use of a chemical under the authority of the Toxic Substances Control Act’s (TSCA) risk management provisions since Congress passed the Lautenberg Act amending TSCA in 2016.

Court dismisses suit challenging constitutionality of the Congressional Review Act. On May 9, the U.S. District Court for the District of Alaska dismissed a challenge to the constitutionality of the Congressional Review Act (CRA). Congress enacted the CRA in 1996, granting the Congress the power both to review a new regulation issued by a federal agency and to preclude future regulations on the same topic as the overruled regulation. Before President Donald Trump assumed office, Congress had invoked the CRA only once. The Center for Biological Diversity (CBD) filed a lawsuit challenging Congress’ use of the CRA to invalidate a 2016 rule issue by the Department of the Interior that prohibited certain hunting and fishing practices on national wildlife refuges in Alaska. CBD alleged that both the CRA’s disapproval provision, which provides that a “disapproved” rule will not take effect, and its reenactment provision, which bars future rules in “substantially the same form” as a disapproved rule, violate the separation of powers between the legislative and executive branches. U.S. District Judge Sharon L. Gleason dismissed the lawsuit, holding that while the group had standing to challenge the CRA’s disapproval provision, it did not have standing to challenge the CRA’s reenactment provision. However, even under the disapproval provision, Judge Gleason said the group’s constitutional claims failed to allege a plausible basis for relief and therefore could not proceed. Congress has issued more than a dozen resolutions repealing rules under the CRA since President Trump took office.

Court finds that one Prop 65 warning is enough in case against winemakers. A California appeals court affirmed a dismissal of a class action on May 9 against winemakers that alleged they failed to warn of arsenic in their wines pursuant to Proposition 65 (Prop 65). Prop 65 is California law that requires warnings for consumer products containing substances that may cause cancer or birth defects. In Doris Charles et al. v. Sutter Home Winery Inc. et al., plaintiffs alleged that wine produced by several wine manufacturers contained unsafe levels of arsenic and wine bottles should therefore contain a warning regarding arsenic. They argued such despite the fact the defendants provided the legally mandated warning for alcoholic beverages: “WARNING: Drinking Distilled Spirits, Beer, Coolers, Wine and Other Alcoholic Beverages May Increase Cancer Risk, and, During Pregnancy, Can Cause Birth Defects.” The California Court of Appeals, Second District, found that it is true that under Prop 65, alcohol must have a warning that it may increase cancer risk and birth defects. However, the wine manufacturers are not required to warn of other potentially dangerous chemicals, as Prop 65 does not require disclosure of specific chemical ingredients in alcoholic beverages. The alcoholic beverage warning alerting customers that consuming the wine could result in cancer and reproductive harm made an additional arsenic warning unnecessary.

Environmental Trends Contributors

sidleyenergy@sidley.com

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