03 July 2019

Sidley Environmental Trends

Topics discussed this week:

  • EPA finalizes Clean Power Plan repeal and promulgates Affordable Clean Energy rule
  • U.S. Senate passes defense bill with PFAS requirements
  • Council on Environmental Quality issues draft guidance on considering GHGs in environmental impact reviews
  • Solicitor General asks for Supreme Court review of Atlantic Coast Pipeline decision
  • EPA air chief steps down

EPA finalizes Clean Power Plan repeal and promulgates Affordable Clean Energy rule. On Wednesday, June 19, the Environmental Protection Agency (EPA) finalized three distinct but interrelated rulemakings that address greenhouse gas emissions (GHGs) from existing fossil-fuel-fired electricity generating units (EGUs). The first action EPA took was to formalize its repeal of the Clean Power Plan (CPP), the Obama administration’s rulemaking governing GHG emissions from existing EGUs. Although the CPP was promulgated in 2015, the rule never went into effect because the U.S. Supreme Court stayed its implementation in early 2016. The CPP took a “beyond the fenceline” interpretation of Clean Air Act (CAA) section 111, which allowed the agency to base its formulation of the “best system of emissions reduction” (BSER) on considerations that went beyond those technologies that could be applied directly at the facility itself. The CPP also set GHG emissions limits at the statewide grid level rather than at the individual facility level. The current EPA administration disagrees with that statutory interpretation and has based its repeal of the CPP on the argument that the CPP exceeded the agency’s authority under CAA section 111. EPA’s second action was to finalize its Affordable Clean Energy rule (ACE Rule). Consistent with its repeal of the CPP, in the ACE Rule, EPA determines that the BSER and any compliance mechanisms used by a facility to meet its GHG emissions targets must be implemented at the source facility itself — an “inside the fenceline” reading of the CAA. The ACE Rule also requires states to set specific GHG emissions limits for each individual facility rather than statewide. The third action EPA took was to promulgate new implementing regulations to guide states with developing their GHG emissions limits consistent with the agency’s BSER. This rulemaking has not yet been published in the Federal Register, but legal challenges are expected to follow.

U.S. Senate passes defense bill with PFAS requirements. The U.S. Senate passed its annual military defense authorization bill on Thursday, June 27, by an 86-8 margin. The bill authorizes Fiscal Year 2020 appropriations for the federal Department of Defense, military construction and federal Department of Energy national security programs. The bill also addressed issues related to groundwater and soil contamination from per- and polyfluoroalkyl substances (PFAS). PFAS is an umbrella term for thousands of chemicals historically used in manufacturing and consumer goods for their nonstick and flame retardant properties. PFAS is also a major ingredient in firefighting foam used on military bases and at petrochemical refinery sites to contain industrial fires. Some studies have suggested that PFAS is connected with negative human health effects, including cancers and birth defects. As passed, the Senate bill would require EPA to set national drinking water regulations under the federal Safe Drinking Water Act for a subset of PFAS chemicals within two years. This action would require all major public drinking water systems to test their water for the presence of these PFAS chemicals and implement remedial measures if the concentrations are found to exceed a level still to be set by EPA. The bill would also add certain PFAS chemicals to the federal Toxics Release Inventory under the Emergency Planning and Community Right-to-Know Act, which would require companies that release at or more than a defined reportable quantity of the chemicals to report those releases. The Senate chose not to adopt an amendment to the bill that would have required EPA to designate certain PFAS chemicals as “hazardous substances” for purposes of Comprehensive Environmental Response, Compensation and Liability Act cleanup. EPA has also been focusing on PFAS issues, indicating in its Spring 2019 regulatory agenda that making certain PFAS-focused determinations is a top priority, consistent with the agency’s PFAS Action Plan published in February.

Council on Environmental Quality issues draft guidance on considering GHGs in environmental impact reviews. The White House Council on Environmental Quality (CEQ) — the executive agency tasked with promulgating regulations implementing the National Environmental Policy Act (NEPA) — has issued draft guidance for federal agencies on how to consider GHGs when conducting NEPA-required environmental impact assessments of proposed major federal actions that significantly affect the quality of the human environment. This draft guidance replaces an Obama administration document covering the same topic that CEQ rescinded as directed by President Donald Trump’s Executive Order 13783 (“Promoting Energy Independence and Economic Growth”). The new draft guidance instructs agencies that they “need not give greater consideration to potential effects from GHG emissions than to other potential effects on the human environment.” The draft guidance also does not require federal agencies to weigh the effects of any considered alternatives using a monetized “social cost of carbon,” which had been an element of the previous guidance. The draft guidance will be available for public comment for 30 days once it is published in the Federal Register.

Solicitor General asks for Supreme Court review of Atlantic Coast Pipeline decision. The Solicitor General of the United States has petitioned the U.S. Supreme Court for a writ of certiorari seeking review of a recent U.S. Court of Appeals for the Fourth Circuit decision revoking federal permits issued to the Atlantic Coast Pipeline. The Atlantic Coast Pipeline, as proposed, is a 604-mile natural gas pipeline intended to run from West Virginia to North Carolina. In the underlying case, the Fourth Circuit reviewed whether the U.S. Forest Service (USFS) complied with the National Forest Management Act (NFMA), the Mineral Leasing Act (MLA) and NEPA when it issued a special use permit and record of decision authorizing the pipeline to traverse parts of the George Washington and Monongahela National Forests, as well as a right-of-way to cross the Appalachian National Scenic Trail. The court ultimately found that the USFS violated NEPA by failing to consider its own initial concerns about the Federal Energy Regulatory Commission’s draft environmental impact statement, violated the NFMA by arbitrarily and capriciously amending certain national forest plans, lacked statutory authority under the MLA to grant a right-of-way traversing the Appalachian Trail and generally abdicated its administrative responsibility to preserve national forest resources. The court ultimately vacated the agency’s special use permit and record of decision. The Solicitor General argues that the Fourth Circuit misconstrued the nature of the Appalachian Trail system as it crosses national forest land and that the MLA allows the Department of the Interior to grant rights-of-way to pipelines through national forest land. The Supreme Court has not yet agreed to hear the case.

EPA air chief steps down. Bill Wehrum, Assistant Administrator of the EPA for Air and Radiation, announced his resignation from the post effective at the end of June. Wehrum was responsible for overseeing numerous air-related regulatory actions including the Trump administration’s recently finalized ACE Rule. Wehrum will be replaced on an acting basis by Principal Deputy Administrator Anne Idsal, who was formerly EPA Region 6 administrator.

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