07 January 2019

Sidley Environmental Trends

Topics discussed this week include:

  • EPA and Corps propose new definition of Waters of the United States.
  • EPA proposes to eliminate carbon capture requirements for coal plants.
  • EPA releases draft rule rescinding power plant mercury rule.
  • EPA issues final pharmaceutical waste rule.
  • Senate confirms key environmental posts.
  • Shutdown slows EPA and Justice Department.
  • Northeastern states unveil “cap and invest” greenhouse gas program.
  • New York proposes fluorinated chemical drinking water standards.
  • California splits with Interior over Migratory Bird Treaty Act.

EPA and Corps propose new definition of Waters of the United States. The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) issued a pre-publication draft of their proposed “Step 2” rule to modify a 2015 regulation defining Waters of the United States under the Clean Water Act. The Step 2 rule takes a narrower approach, influenced by the Supreme Court’s plurality opinion in Rapanos v. United States. It eliminates federal jurisdiction over ephemeral waters, many types of ditches, isolated ponds and wetlands that are not proximately adjacent to jurisdictional waters, among others. The agencies stated that the Step 2 rule would restore primary state authority over land and water resources, as required by the Clean Water Act, by clarifying where federal jurisdiction ends and state jurisdiction begins. The 2015 rule remains the subject of litigation and has been stayed in 28 states. Environmental groups have promised to challenge the Step 2 rule if it is finalized.

EPA proposes to eliminate carbon capture requirements for coal plants. EPA proposed to revise its 2015 New Source Performance Standards for carbon dioxide (CO2) emissions from coal-fired power plants. The 2015 rule established a CO2 standard of 1,400 lbs/MWh, virtually requiring the use of carbon capture and sequestration technology. The proposed rule increases the CO2 standard to 1,900 lbs/MWh, a limit consistent with current technology. EPA is proposing to find that carbon capture and sequestration is not an adequately demonstrated control technology. The agency is also seeking comment on whether it must make a new endangerment finding whenever it regulates additional pollutants from a listed source category. EPA did not estimate the environmental impacts of the rule because no new coal-fired power plants are planned for development. Environmental groups sharply criticized the rule and promised to challenge it in court if EPA finalizes it.

EPA releases draft rule rescinding power plant mercury rule. A new proposed rule would reverse EPA’s 2012 determination that it is “appropriate and necessary” to regulate mercury and other air toxics emissions from coal- and oil-fired power plants. Although the proposal would not rescind the emission limits themselves, it concludes that EPA should not include “co-benefits” attributed to the incidental reduction of other pollutants when performing a cost-benefit analysis. The proposal responds to Michigan v. EPA, a 2015 Supreme Court decision stating that EPA must consider the costs of regulations when determining whether imposing regulations is “appropriate and necessary.” Under the proposed rule, EPA determined that the compliance costs of the mercury and air toxics standards rule far outweighed its health benefits. EPA is also seeking comment on whether it should establish a sub-category for plants that combust coal refuse and whether EPA has the power to de-list power plants from Clean Air Act Section 112’s list of source categories, even though it is not proposing to do so.

EPA issues final pharmaceutical waste rule. EPA’s final rule on pharmaceutical wastes largely resembles its proposed version initiated under the Obama administration. A key provision classifies prescription pharmaceuticals sent to reverse distributors or collected through drug take-back programs as solid wastes under the Resource Conservation and Recovery Act, a move that the pharmaceutical industry staunchly opposed. Nonprescription pharmaceuticals sent to reverse logistics centers, however, are not classified as solid wastes so long as they can realistically be reclaimed or re-sold. The rule also prohibits disposing of medications down drains or toilets. EPA estimated that the rule will prevent 2,300 tons of pharmaceuticals from entering waterbodies.

Senate confirms key environmental posts. The Senate confirmed Mary Bridget Neumayr as the Council on Environmental Quality (CEQ) Director. She served as CEQ’s chief of staff since March 2017. Kathleen Hartnett White was initially nominated as CEQ Director in October 2017, but the White House eventually withdrew the nomination, making Neumayr the first CEQ Director in the Trump administration. Even without formal leadership, CEQ has focused its efforts on streamlining National Environmental Policy Act regulations to allow for faster development of major infrastructure projects. The Senate also confirmed Alexandra Dunn as EPA’s Assistant Administrator for the Office of Chemical Safety and Pollution Prevention. Dunn previously served as EPA’s Region 1 Administrator. In her new role, Dunn will oversee the agency’s implementation of the Lautenberg Chemical Safety Act and pesticide regulation.

Shutdown slows EPA and Justice Department. Due to the federal government shutdown, many EPA employees are furloughed. According to EPA’s contingency plan, only about five percent of its permanent and temporary workers are considered essential. During the shutdown, EPA will stop a number of activities, ranging from performing chemical risk assessments to processing Freedom of Information Act requests to holding public hearings. The Justice Department is also partially closed, stalling environmental litigation even though federal courts are open. Although the majority of Justice Department employees continue to work during the shutdown, less than half of the Environmental and Natural Resources Division employees remain at work. Many of those lawyers are spending their time filing requests to stay cases or extend deadlines until the shutdown is resolved. Even where Justice Department lawyers are working, personnel at some of their client agencies, such as EPA or the Department of the Interior, are not. So far, courts are granting government requests to delay litigation with some judicial districts issuing blanket orders staying all cases where the U.S. government is a party.

Northeastern states unveil “cap and invest” greenhouse gas program. Nine states announced a “cap and invest” plan, dubbed the Transportation and Climate Initiative (TCI), to reduce greenhouse gas emissions from the transportation sector. The states would impose a regional cap on carbon emissions from transportation fuels, such as gasoline, that would decline over time. Fuel suppliers would be subject to the cap, and exceeding their emissions allocation would require them to buy carbon credits at auction. The proceeds would be used for low-carbon transportation infrastructure. The plan is only at the conceptual phase, with no specifics released regarding the cap on emissions or the price of credits, however, TCI claims that drivers would pay only a few extra dollars per month for gasoline. At the same time, TCI asserts that the additional costs will incentivize commuters to switch to public transportation or electric vehicles. TCI hopes to finalize the plan’s details by the end of 2019. The participating states are Connecticut, Delaware, Maryland, Massachusetts, New Jersey, Pennsylvania, Rhode Island, Vermont and Virginia, as well as Washington, D.C. New Hampshire and New York are participating in discussions but have not officially joined TCI.

New York proposes fluorinated chemical drinking water standards. The New York Drinking Water Quality Council proposed new maximum contaminant levels for perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS) in drinking water. The limit, 10 parts per trillion for both chemicals, would be the strictest in the nation and far lower than EPA’s unenforceable health advisory level of 70 parts per trillion. PFOA and PFOS were commonly used in consumer and industrial products but are now linked to a wide array of adverse health effects. The proposed limits must now be approved by New York’s Commissioner of Health and Public Health and Planning Council before taking effect. The Department of Health estimated that the new standards will cost drinking water providers over $850 million in capital costs and an additional $45 million in annual costs.

California splits with Interior over Migratory Bird Treaty Act. The California Attorney General and the California Department of Fish & Wildlife issued a joint legal advisory declaring that the state will enforce the Migratory Bird Treaty Act (MBTA) in a way to prohibit any industrial activity that incidentally kills or injures migratory birds. The Department of the Interior issued a December 2017 memorandum interpreting the MBTA as requiring an intentional taking to impose criminal penalties. California is among eight states and two environmental groups suing to block Interior’s interpretation memo.

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