On Nov. 8, 2019, the Office of Fossil Energy (FE) of the Department of Energy (DOE) issued DOE/FE Order Nos. 4461 and 4462 (the Orders) authorizing GT client SpotX Energy, LLC (SpotX) to export domestically produced liquefied natural gas (LNG) under its recently enacted “small-scale natural gas export” rule (the Rule). The Rule amended DOE’s regulations to facilitate small-scale exports up to 51.75 billion cubic feet per year (Bcf/yr). The Rule was intended to promote exports to emerging foreign markets that have not been targeted by larger scale LNG projects due to practical and economic constraints. Provided an application seeks authorization within the volume limits, and is eligible for a categorical exclusion from the requirement to perform an Environmental Impact Statement or Environmental Assessment, the Rule provides that exports will be deemed consistent with the public interest.
On 2 November 2019, the UK government announced that it is ending its support for fracking in England. This follows a report from the UK’s Oil and Gas Authority (OGA), an independent subsidiary of the UK’s Department for Business, Energy and Industrial Strategy (BEIS), which found that it is not currently possible to accurately predict the likelihood or magnitude of earthquakes linked to fracking operations.
For a refresher on what Per- and polyfluoroalkyl substances (PFAS) are and what Congressional action may mean for stakeholders, see the Greenberg Traurig E2 Law blog from earlier this year.
As legislative days dwindle, Congress is in a full sprint to pass the National Defense Authorization Act (NDAA) (related blog post), among several other must-pass bills. Controversial issues, such as border wall funding, military actions related to Iran, PFAS, among others, have bedeviled congressional negotiators since the Senate (S. 1790) and House (H.R. 2500) passed their bills in early summer. As Greenberg Traurig reported in July, H.R. 2500 would designate all PFAS (over 5,000 chemicals) as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), but S. 1790 does not include similar language.
Both bills contain a variety of provisions addressing PFAS pollution, and there is common ground on most of them between the House and Senate packages, and more generally, broad agreement among Republicans and Democrats that legislation is necessary to address PFAS. However, the CERCLA listing is where consensus breaks down.
This difference between the two bills has emerged as a key sticking point for lawmakers. The Pentagon – which has over 400 sites with PFAS contamination – strongly opposes the CERCLA provision in the House bill, as do many other stakeholders. Interestingly, in a September 10 House Oversight Committee hearing, DuPont announced support for listing two PFAS (PFOA and PFOS) as CERCLA hazardous substances, while other companies have consistently pushed for alternatives, such as EPA rulemaking to determine which (if any) PFAS should be listed as hazardous substances. And, on October 22, 67 House Democrats and 1 Republican announced they would vote against any NDAA package that does not include the CERCLA provision.
Signaling pessimism about the prospects for compromise on remaining issues, Senate Armed Services Committee Chairman Jim Inhofe (R-OK) introduced S. 2731 on October 30, which he has described over the past few weeks as a “skinny” NDAA bill, built around must-pass provisions, and omitting controversial items. Adam Smith (D-WA), Chair of the House Armed Services Committee, has expressed doubts about the viability of a stripped-down NDAA in the House. The new bill does not contain PFAS provisions.
The impact of making PFAs hazardous substances would be immediate and dramatic: a CERCLA listing would expose DOD and other public and private entities to Superfund cleanup liability, including private cost recovery litigation. Recent statements of Senator Inhofe and Rep. Smith suggest that PFAS provisions may not make the cut.
What Happens Next?
The PFAS language in NDAA bills – especially the Senate bill – came directly from still-pending PFAS-specific legislation. Attaching PFAS provisions to a different must-pass bill is, at best, a remote possibility for legislative success, because the controversy over CERCLA provisions will remain in any context. Complicating matters is that there are less than 30 days left with both chambers in session before the end of the year, and with an impeachment inquiry dominating much of the Congressional agenda, PFAS could be pushed further down the list of priorities. That said, bipartisan efforts will continue in 2020 if a solution is not reached by the end of this year.
Meanwhile, EPA continues to implement its PFAS Action Plan, including a promised determination by year-end whether to promulgate drinking water standards for PFOA and PFOS, and a rulemaking (under development) identifying PFOA and PFOS (the oldest and most studied PFAS) as CERCLA hazardous substances.
With PFAS on the radar of Congress and EPA, legislation would be one of the most notable environmental accomplishments of the 116th Congress, if lawmakers can settle their differences and get it across the finish line.
The removal of diesel trains from operation in the UK could be accelerated as part of the UK government’s plans to reduce carbon emissions.
In a speech in February 2018, the UK’s then-Minister of State for rail, Jo Johnson (brother of UK Prime Minister Boris Johnson), stated that he “would like to see us take all diesel-only trains off the track by 2040”. However, less than two years later in October 2019 (and during a week when attention was focussed on whether Prime Minister Johnson would reach agreement with the European Union on Brexit), Secretary of State for Transport Grant Shapps told the Parliamentary Transport Select Committee that “when I look at my comments on cars where, at the moment, the policy is 2040 to end the sale of petrol and diesel [cars], I recently said that I am going to investigate 2035. I am of course very interested in the earlier extinction of diesel trains”.
An important difference between UK Prime Minister Boris Johnson’s Withdrawal Agreement and former Prime Minister Theresa May’s Withdrawal Agreement is that provisions relating to environmental protections have been removed and are now to be found in the amended Political Declaration. While the Withdrawal Agreement, once ratified, would be a legally binding treaty between the UK and the EU, the Political Declaration would be non-binding, at least under international law. Therefore, under Mr Johnson’s proposal, the provisions relating to environmental standards would not be binding on the UK. There are also substantive differences in the environmental provisions.
“Tribal consultation” refers to the federal government’s legal obligation to consult with Native American tribes on energy and infrastructure projects, such as highways and railroads, pipelines, telecommunications towers and systems, and electrical transmission lines. Whenever a given project requires some sort of federal approval – a water-crossing permit from the U.S. Army Corps of Engineers, for instance, or a certificate from the Federal Energy Regulatory Commission to build a new natural gas pipeline – the tribal consultation requirement kicks in.
The project need not be on tribal land for the tribal consultation requirement to apply. On the contrary, the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA), along with many other federal laws, mandate that the lead agency on each project must consult with all affected Indian tribes, on a government-to-government basis. This is true whether the project is on public or private land. The rule of thumb is that if a project needs federal permission to proceed, the federal agency considering it must identify the tribes in the project area and consult with them in a meaningful fashion before making any final decisions.
On Oct. 17, 2019, the Federal Energy Regulatory Commission (FERC) gave PJM Interconnection, L.L.C. and Southwest Power Pool the green light to implement their energy storage proposals to comply with FERC’s Order No. 841. FERC found that these proposals reduce barriers to market participation by storage resources by allowing them to be compensated fairly when delivering various and unique operational capabilities and services. But stay tuned – while these orders are important progress, integration of storage resources into the wholesale market will be complex. Indeed, FERC also ordered PJM and SPP to make compliance filings to include specific rules for minimum run-time requirements in their tariffs.
In the wake of the drinking water crises in Flint, Michigan and elsewhere, the U.S. Environmental Protection Agency (EPA) proposed a rule on Oct. 10, 2019, that would impose new lead requirements on drinking water systems. If finalized, the new rule would mark the first change to the lead and copper rule (LCR) since 1991.
Drinking water systems throughout the country still rely on lead service lines to connect treatment plants to consumers. Water treatment chemicals can cause lead to leach from service lines. In 1991, the EPA adopted a rule under the Safe Drinking Water Act (SDWA), requiring drinking water systems to implement corrosion control measures when the lead level is above the “action level” of 15 parts per billion (ppb). Tap water samples must be collected, and if more than 10 percent of tap water samples exceed the lead action level of 15 ppb, then water systems are required to take actions. This method allows some percentage of the customer taps to exceed the action level, without the water system having to act.
The proposed rule retains the 15-ppb action level, but requires a more comprehensive response. For example, water systems must replace the portion of the lead service line they own whenever a customer replaces her portion of the line. The proposed rule also introduces a trigger level of 10 ppb that requires more proactive planning in communities with lead service lines. In addition, the proposed rule will require development of lead service line inventory and more robust sampling and risk communication.
Curiously, however, the proposal would decrease the annual percentage of lead service lines a water system must replace when its tap water exceeds the 15-ppb action level: the existing rule requires utilities to replace seven percent of their lead service lines annually, while the proposed rule would reduce that percentage to three.
While the EPA argues that the new requirements, along with the 10-ppb trigger, will reduce the levels of lead in drinking water, critics charge that the changes do not go far enough, and that reducing the annual replacement rate is wrong.
The public will have 60 days from the date of the proposed rule’s publication in the Federal Register to submit comments (in Docket No. EPA-HQ-OW-2017-0300).
In early October, President Donald J. Trump issued two executive orders aimed to further his administration’s stated goal of reducing both executive agencies’ power and burdens on regulated entities. Both executive orders will affect how federal agencies issue informal guidance documents, through which agencies provide interpretation or clarification of regulations they have promulgated.
The first, the “transparency and fairness” executive order, clarifies that guidance documents may not be used as a basis for imposing requirements or standards of conduct on any regulated entity. It also states that agencies may only take enforcement actions or engage in adjudication in reliance on standards of conduct that have been made publicly known, and may not do so in ways that may cause “unfair surprise.” In addition, prior to taking any action having a legal consequence as to any regulated person or entity, an agency must give that person or entity an opportunity to contest enforcement.
The second, the “improved agency guidance documents” executive order, requires agencies to post all guidance documents online, in a searchable format, along with a disclaimer that they are simply guidance and lack the force and effect of law. As part of this process, agencies are to review current guidance to determine whether it should be rescinded; any guidance not posted online as required within 120 days will be considered rescinded. Additionally, the Office of Management and Budget will establish procedures whereby the public may petition for withdrawal or modification of any particular guidance document. Perhaps the most substantial change required by the executive order is the requirement that no “significant” guidance documents may be issued without being subject to a period of public notice and comment, akin to the Administrative Procedure Act’s (APA) requirement for agencies issuing formal, binding regulations. Significant guidance documents must also be reviewed by the Office of Information and Regulatory Affairs before issuance.
Read more from my article in this week’s edition of Pa. Law Weekly in The Legal Intelligencer, 42 Pa. L. Weekly 43 (October 22, 2019), by clicking here.
On Sept. 25, Minnesota Gov. Tim Walz asked the Minnesota Pollution Control Agency (MPCA) to initiate the process to establish a Clean Cars Minnesota Rule, which would set both a low-emission vehicle (LEV) standard and a zero-emission vehicle (ZEV) standard. Next month, the MPCA will begin its rulemaking process, with a goal of adopting a final rule by December 2020. If implemented, Minnesota would join 14 states with an LEV standard, 11 of which also have a ZEV standard.
The Minnesota plan is modeled after California LEV and ZEV standards. California has a nearly 50-year-old waiver under the Clean Air Act permitting the state to set stricter emission standards. After indications that the federal government would publish a rule revoking the waiver, California, joined by 22 other states, including Minnesota, and the District of Columbia filed a lawsuit seeking to enforce states’ rights to set emission standards more stringent than those imposed by the federal government. The lawsuit presents novel questions under the Clean Air Act including whether a waiver can be revoked, and if so, under what circumstances. Any final rule in Minnesota will be contingent on states retaining the right to adopt more restrictive measures, including through the operative waiver under Sections 209(b) and 177 of the Clean Air Act. Continue Reading