The ink is barely dry on the reclassification of the Chicago ozone nonattainment area from moderate to serious, under the 2008 ozone National Ambient Air Quality Standards (NAAQS), and the Illinois Environmental Protection Agency (IEPA) intends to seek redesignation to attainment.  According to IEPA staff, the agency has data supporting a request for redesignation to attainment of the 2008 NAAQS based on the latest 2019 monitoring values.  The IEPA’s goal is to submit the request for redesignation to the U.S. Environmental Protection Agency (USEPA) in January 2020.

Just this summer, the IEPA sent letters to affected sources to provide notification of the September 23, 2019 reclassification.  Those letters stated that the IEPA would give sources one year, or until September 23, 2020, to apply for an initial Clean Air Act Permit Program (CAAPP) permit or, to avoid CAAPP permitting, a federally enforceable state operating permit (FESOP) or a revised FESOP, if needed, to remain below the new major source level of 50 tons per year for VOM and NOx.  While the IEPA expects USEPA to take final action redesignating the area to attainment by that date, there are no guarantees.   According to IEPA staff, if there are high temperatures early in the summer and USEPA still has not acted, the redesignation could be in jeopardy,  The IEPA is advising affected sources to be prepared to submit permit applications consistent with the major source levels now in effect by the September 23, 2020 deadline.

Sources should also be aware that, even if the Chicago area is redesignated to attainment under the 2008 ozone NAAQS, the more stringent 2015 ozone NAAQS is still in effect.  Under that standard, Chicago is currently classified as a marginal area.  However, the IEPA staff recently stated that it is a certainty that the area will be bumped-up to moderate sometime in 2022.  The IEPA already has monitoring data showing that the area will not attain the lower 2015 NAAQS by the August 2021 attainment date.  It remains to be seen whether the IEPA will be required to adopt new regulations to meet the 2015 NAAQS, as emissions from mobile sources continue to decline.

The takeaway is that, given this uncertainty, affected VOC and NOx sources should proceed under the assumption that the Chicago area will continue to be designated as a serious area under the 2008 NAAQS, unless and until USEPA states otherwise.  This would include preparing any applications for a CAAPP permit, FESOP or revised FESOP as a result of the bump-up, but holding off on submittal until the current September 23, 2020 deadline, to see how it all plays out.

No Further Remediation Letters have become an established part of the regulatory landscape. These letters serve many purposes, including reducing uncertainty over future clean-up obligations and signifying that the property is “clean enough” for development. But the process can take time, which in some instances delays transactions and increases cost.

To address these delays, the Illinois Environmental Protection Agency (“IEPA”) has stated that it intends to move forward with an expedited No Further Remediation (“NFR”) Letter program by the end of the year. According to IEPA, this program will be modeled after the currently available program for air and water permits. Under the current program, an applicant is required to enter into a contract and pay an upfront fee that is intended to cover the cost of overtime review of the applicant’s Site Remediation Program (“SRP”) application and supporting documents, such as a Remedial Action Plan, Comprehensive Site Investigation Report, Remedial Objectives Report, Remedial Action Completion Report, etc. In turn, IEPA provides an estimated ‘guaranteed’ date by which IEPA will issue the permit.

Currently, the expedited permit fee is four times the standard permit fee required for the requested permit, provided that the expedited permit fee shall not exceed $100,000. 415 ILCS 5/39.14(c). For recurring permit fees, the expedited permit fee is four times the amount of the recurring fee on a one-time basis for each expedited permitting action. Id. If an owner or operator is not required to pay a standard permit fee for the requested permit, the amount of the expedited permit fee is mutually agreed upon by the Agency and the applicant. Id.

Under the new program, IEPA will likely require the applicant to pay a similar fee arrangement and sign an agreement in exchange for a ‘guaranteed’ date by which IEPA will issue the NFR Letter. This program should make compliance with environmental regulations less burdensome and may prove valuable to developers who desire greater certainty for when a transaction will close. It is also encouraging that the IEPA has recognized regulatory delays are never good for property development projects.

The Illinois General Assembly has passed the Coal Ash Pollution Prevention Act.  Once it is signed into law by Governor Pritzker, Illinois will become the latest state to address a legacy of coal power generation with targeted legislation.  The impacts of the law – financial, environmental and operational – could be immense.  The most significant details, however, are being left to an upcoming administrative rulemaking process.  The Illinois EPA and the Illinois Pollution Control Board are now positioned to shape the State’s coal ash policy.  Their decisions will determine the fate of the State’s ash impoundments and the lengths power plant owners will have to go to fully close their facilities after retirement — and will have billions of dollars of implications.

What’s Missing?

The most glaring absence from the Act is clear direction on how each coal plant will have to close and secure its active impoundments.  The law requires submission of a closure alternatives analysis, and that analysis must assess the complete removal of ash from the impoundment, in addition to “all closure methods being considered.” The Illinois EPA, however, will ultimately have discretion whether to order complete removal of all ash or something less, such as dewatering and capping all remaining ash in place.

The significance of the closure method decision – economically as well as environmentally – is hard to overstate.  Illinois is putting itself on a path that could mirror the ongoing process in North Carolina, where the legislature first passed the Coal Ash Management Act (“CAMA”) in 2014.  Like the Coal Ash Pollution Prevention Act, CAMA delegated the closure method decision for some sites to environmental regulators.  North Carolina DEQ recently ordered complete excavation at all sites over which it had that jurisdiction.  Duke Energy, which owns the plants, is claiming that excavating all of the coal ash from certain sites will be more than 500% more expensive than capping the ash in place, and that as a result the total costs at some individual plants will exceed a billion dollars.

What Comes Next?

Delegating such substantial authority to Illinois EPA also sets up future court battles that could drag on for years.  Duke has already begun the process of challenging North Carolina DEQ’s basin excavation orders.

The Act also puts the Illinois EPA in the position to decide how much coal plant owners will pay in the short term.  The law mandates that plant owners post a performance bond or equivalent security sufficient to ensure the closure of all impoundments, to cover post closure care, and to fund any necessary environmental remediation.  These financial instruments will not come cheap, but just how expensive they will be will depend on how much financial assurance the Illinois EPA requires.  Regardless, those costs are likely to be far greater than the relatively small ash impoundment fees imposed by the Act ($75,000 initially for each operating impoundment, and another $25,000 per year).

The upcoming Illinois Pollution Control Board coal ash rulemaking therefore will go a long way to determining Illinois’ coal ash policy.  There is a possibility of additional legislation to modify or clarify parts of the Act, but that is not certain, and any additional legislation is likely to focus on financial assurance issues.  As it stands now, the Act instructs the Illinois EPA to propose rules within eight months of its effective date, and the Board to adopt final rules within the year after that.  The regulations the Illinois EPA proposes and the Board adopts not only will indicate how aggressive the Agency is likely to be in the future, but also will dictate how difficult it will be to challenge its decisions in court.  We will be keeping an eye on that process at Environmental Law Next and posting updates on significant developments.  Feel free to contact us if you have any questions or comments about our post.

 

The U.S. Supreme Court on Monday stated that it would review a case filed by property owners in Montana state court seeking restoration damages that were beyond the clean-up activities required by the U.S. Environmental Protection Agency (EPA) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).  In the case, Atlantic Richfield Co. v. Christian, Atlantic Richfield (Arco) is seeking to overturn a decision by the Montana Supreme Court, which they claim is pre-empted by federal law and conflicts with the decisions of other courts on CERCLA interpretation.  The federal government also weighed in at the request of the U.S. Supreme Court.  The federal government agreed that the Montana Supreme Court “erred in its analysis,” but argued that the petition should be denied as premature.  Nonetheless, the U.S. Supreme Court granted the petition, which Arco has stated involves “one of the most consequential decisions interpreting CERCLA in years.”

The questions presented in the petition are:  (1) whether a common-law claim for restoration seeking cleanup remedies that conflict with remedies the EPA ordered is a jurisdictionally barred “challenge” to the EPA’s cleanup under 42 U.S.C. § 9613 of CERCLA; (2) whether a landowner at a Superfund site is a “potentially responsible party” that must seek EPA approval under 42 U.S.C. § 9622(e)(6) of CERCLA before engaging in remedial action, even if the EPA has never ordered the landowner to pay for a cleanup; and (3) whether CERCLA pre-empts state common-law claims for restoration that seek cleanup remedies that conflict with EPA-ordered remedies.

We will continue to follow this case and provide updates as they become available.

The U.S. Environmental Protection Agency (EPA) released a decision last week stating that revisions to the federal regulations for the management of wastes from the exploration, development, and production of crude oil, natural gas, and geothermal energy (i.e. oil and gas wastes from hydraulic fracturing and directional drilling) are not necessary at this time.  EPA was required to assess the current regulations under a Consent Decree entered into with EPA and seven environmental advocacy groups.  The environmental groups had filed a federal lawsuit against EPA in 2016, in which they alleged that EPA was obligated to review and revise, if necessary, RCRA Subtitle D regulations and state plan requirements for oil and gas wastes.

In making its decision, EPA reviewed regulations of states that collectively account for 95% of the oil and gas production in the United States.  EPA concluded that, while the oil and gas industry “has undergone a significant transformation in recent years” from the increased use of hydraulic fracturing and directional drilling, the states had also updated their regulatory programs in response to these new technological advancements.  EPA also reviewed literature on the potential for adverse effects from the management of the oil and gas wastes, as well as data on recent environmental releases of these wastes, and concluded that existing state programs were sufficient to manage the oil and gas wastes in a manner that is protective of human health and the environment.

The environmental community is, unsurprisingly, not pleased with EPA’s decision.  The Environmental Integrity Project, one of the environmental advocacy groups that filed the lawsuit in 2016, issued a statement that EPA’s determination has “left oil and gas wastes subject only to generic and outdated standards.”  With the regulatory updates being made at the state level, however, EPA is confident that these wastes can be “appropriately and more readily addressed” within the scope of the existing state programs, which it stated are “robust.”

The U.S. Environmental Protection Agency (“EPA”) released a much-anticipated draft document to address groundwater contaminated with PFOA and/or PFOS.

According to EPA, the guidance is based on EPA’s current understanding of PFAS toxicity and is intended to provide clear and consistent guidance for cleanup programs. Specifically, the guidance provides interim recommendations for addressing groundwater contaminated with PFOA and/or PFOS at sites being evaluated and addressed under federal cleanup programs, including the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”) and corrective action under the Resource Conservation and Recovery Act (“RCRA”). The information and recommendations may also be used by state, tribal, or other regulatory authorities (e.g., federal facility cleanup programs, approved state RCRA corrective action programs).

The guidance recommends the following:

  • ​Screening sites using a screening level set to a Hazard Quotient of 0.1 for PFOA or PFOS individually, which is currently 40 ng/L or parts per trillion (ppt);
  • ​Using the PFOA and PFOS HAs of 70 ppt as the PRG for groundwater that is a current or potential source of drinking water, where no state or tribal MCL or other applicable or relevant and appropriate requirements (“ARARs”) exist; and
  • ​In situations where groundwater is being used for drinking water, EPA expects that responsible parties will address levels of PFOA and/or PFOS over 70 ppt.

This guidance does not declare PFAS chemicals to be hazardous substances under Superfund and it does not explicitly require clean up at contaminated industrial sites, landfills, or military facilities. Rather, it simply recommends cleanup when chemicals are found in groundwater being used for drinking at concentrations of 70 parts per trillion or higher.

While some have commended EPA for take the first step in developing PFAS guidelines, many have criticized the guidance for failing to adequately protect communities from PFAS contamination. Accordingly, we expect to see many advocacy groups urging EPA to adopt more stringent standards and an “emergency action level,” at which the EPA would commit to step in and remove the presence of the chemicals to protect public health.

The public will have an opportunity to submit their comments on the guidance for 45 days from April 25, 2019 to June 10, 2019.  For more information, visit https://www.epa.gov/pfas. To submit your comments, identified by Docket ID No. EPA-HQ-OLEM-2019-0229, visit https://www.regulations.gov.

 

On April 15, 2019, U.S. Environmental Protection Agency (“EPA”) issued a new interpretation of the Clean Water Act (“CWA”), stating that the CWA does not require permits for groundwater pollution. The CWA regulates pollution to surface water and requires permits for point-source discharges. However, the question as to whether a discharge of pollutants into groundwater can potentially trigger the CWA’s permitting requirements has been the subject of conflicting federal appellate court decisions.

The Ninth Circuit has held that a county violated the CWA by allowing pollutants from four sewage wastewater injection wells to seep into the Pacific Ocean through groundwater without issuing a NPDES permit. In that case, the EPA filed a friend of the court brief, agreeing that the county was acting illegally. The Fourth Circuit has sided with the Ninth Circuit on this issue, while the Sixth Circuit has explicitly limited the CWA’s application to direct discharges to navigable waters from point sources. In February 2019, the Supreme Court granted certiorari in the Ninth Circuit case to resolve the circuit split on this issue.

EPA’s new interpretation is significant in that it comes just a few months after the Supreme Court granted the Petition for writ of certiorari and that it reverses the position EPA took in the Ninth Circuit case. The EPA is now of the position that “releases of pollutants to groundwater are categorically excluded from the act’s permitting requirements,” regardless of whether the groundwater is hydrologically connected to “navigable water” that is within the CWA’s justification. While EPA clarified that this interpretation would not be enforced in the Ninth and Fourth Circuits (pending the Supreme Court’s ruling on the matter), the new policy will be enforced in the rest of the country immediately.

This change will ultimately make it harder to enforce the CWA in cases that involve conveyance via groundwater. Likewise, for municipal and industrial facilities that discharge to groundwater, it provides some clarity over which federal laws are supposed to cover which types of water.

On Thursday, the Trump Administration announced that it will issue a draft regulation by the end of the year placing a limit on two chemicals frequently found in drinking water. The steps to eventually regulate two types of per- and polyfluoroalkyl substances (“PFAS”) known as PFOA and PFOS were announced by U.S. EPA head Andrew Wheeler. Other steps outlined Thursday include the initiation of a regulatory process to list PFOS and PFOA as hazardous substances under Superfund and a promise that EPA will “very soon” release interim groundwater clean-up recommendations for sites contaminated with PFAS. EPA is also looking into regulating other chemicals in the PFAS family.

PFAS are man-made chemicals that are resistant to water, grease, and stains and have thousands of consumer and industrial uses. They can be found in carpets, camping gear, fast-food wrappers, fabrics for furniture, water-repellent fabrics, cleaners, cookware, and more. Industry uses include O-rings and gaskets that prevent mechanical breakdowns, metal plating, and fire-fighting foams. Currently, many PFAS concentrated products end up in landfills which can seep into the ground in unlined landfills or pool at the bottom of lined landfills and often end up in wastewater treatment plants that are not equipped to remove PFAS.

EPA currently has a health advisory level for PFAS compounds in drinking water of 70 parts per trillion. However, EPA plans to consider setting federal maximum contaminant levels as part of its draft regulation, which would require increased monitoring and reporting efforts, and would ultimately give the agency more authority to pursue polluters. Likewise, the designation of PFOS and PFOA as hazardous substances under Superfund will give communities and states the power to recover costs of cleaning up the chemicals from polluters. In its 72-page Action Plan, EPA highlighted its intention to improve PFAS cleanup strategies, prohibit environmental release, improve monitoring, and increase enforcement of those in violation of federal PFAS standards.

According to POLITICO, even Republicans in Congress are concerned that the EPA will not move forward with a rulemaking to regulate PFOS and PFOA.  It appears acting EPA Administrator Andrew Wheeler has already approved a decision, contained in the agency’s forthcoming chemical management plan, not to add the chemicals to the group of contaminants regulated under the Safe Drinking Water Act.  The decision follows controversy over the Trump administration’s suppression of a report from the Department of Health and Human Services which suggests that Perfluoroalkyl compounds, which include PFOS and PFOA, are more prevalent, and pose a greater risk to Americans’ health, than previously known.

The question now is whether Congress will take any action.  It has rare leverage at the moment, as Mr. Wheeler’s nomination to head the EPA as its permanent Administrator is in the hands of the Senate Environment and Public Works Committee.  A vote is scheduled for February 5th and, on a committee where the Republicans have only a one seat advantage, a defection by any one of them could potentially kill Mr. Wheeler’s prospects.  Senator Shelley Moore Capito of West Virginia has spoken out on the need to address Perfluoroalkyl contamination and may be the deciding vote.

Given the willingness of numerous elected Republicans to come out in favor of new federal regulations for PFOS and PFOA, some additional EPA action on the subject seems inevitable sooner or later.  And although EPA is likely to add PFOS and FPOA to the list of CERCLA hazardous substances, that will probably be viewed as inadequate by many, given how prevalent the chemicals are now understood to be.

But even if eventual federal regulation of PFOS and PFOA in drinking water were a certainty, further delay will likely have several significant effects.  Deferred  remediation expenditures is one obvious one.  Less straight forward, however, is the impact from parallel state action.  Some states already regulate the chemicals in groundwater and more will likely follow, particularly in the face of federal inaction.  If more of those regulatory regimes have time to be put into place and tested on a wide scale, they could indirectly shape federal regulation.  EPA may approach its regulatory role differently in a context where a contaminant is almost completely unregulated, compared to one where many states are effectively addressing a problem.  Furthermore, the Clean Drinking Water Act regulation must consider economic costs and benefits, and if states push ahead in this area they may spur the generation of substantial data on which the Agency can make that assessment.

We expect a lot more news and developments in this area and will be tracking it closely at Environmental Law Next.

The longest federal government shutdown in U.S. history continues to affect around 800,000 federal workers and major agencies, including the United States Environmental Protection Agency (“EPA”). Despite the shutdown, however, many EPA employees are being called into work without pay.

On January 14, 2019, EPA updated its contingency plan for shut down to increase the total number of “excepted personnel” to 891 or 6.37% of its total workforce. EPA’s contingency plan lists 486 HQ program employees as “excepted personnel” and 405 regional employees as “excepted personnel.” 22 of the excepted regional employees include those located in Chicago at Region 5.

“Excepted personnel” are those that are necessary to perform excepted activities and are excluded from furlough during the shutdown, but only for the hours/days it takes them to perform their excepted activities. “Excepted activities” include activities such as providing for homeland and national security or personal services necessary to respond to emergencies involving the safety of human life or the protection of property, where the threat to human life or property is imminent. Such personal services include legal counseling, litigation, and law enforcement activities designed to protect human life and property from imminent threat. EPA has also stated that work in preparing for a congressional hearing is “excepted,” and, as such, EPA “excepted a limited number of employees” to help Acting EPA Administrator Andrew Wheeler prepare for his confirmation hearing, which the Senate held Wednesday.

As the partial government shutdown continues, it is expected that EPA functions and personnel responsibilities will continue to be limited to activities that are necessary to protect public health and safety. According to EPA’s contingency plan, once EPA receives notification that an appropriation has been approved or is imminent, it will contact EPA regional offices to begin resuming orderly operations.