USEPA Draft Report Indicates Likely Ground Water Contamination From Fracking

This post was written by Mark Mustian.

On December 8, U.S. Environmental Protection Agency (USEPA) Region 8 released a draft report detailing the results from an investigation of suspected ground water contamination from natural gas drilling and gas production near Pavillion, Wyoming. After four rounds of sampling, detailed analysis, and an evaluation of various explanations, USEPA concluded that "the data indicates likely impact to ground water that can be explained by hydraulic fracturing." Furthermore, EPA stated that the data suggested "enhanced migration of gas has occurred within groundwater at depths used for domestic water to supply and to domestic wells." In its study, USEPA measured a variety of organic compounds, including benzene, xylenes, gasoline range organics, and diesel range organics. USEPA also measure measured pH, alkalinity and inorganic chemical compounds which were indicative of chemicals used in fracking solutions. The concentrations and depth profiles were such that USEPA was unable to identify an alternative contamination scenario which would explain the findings. The explanation which best fit the facts was that "inorganic and organic constituents associated with hydraulic fracturing have contaminated ground water supply at and below the depth used for domestic water supply."

Though opponents of hydraulic fracturing may seize upon this report as proof of the dangers of shale gas production, it is important to look beyond the surface of this report to understand that the situation in Pavillion, Wyoming is unique, and is not indicative of conditions in other parts of the country. Hydraulic fracturing in the Pavillion gas field occurred within zones of gas which were located within an underground source of drinking water. Hydraulic fracturing occurred at unusually shallow depths in the region, while many domestic water wells are screened unusually deep. USEPA's review of well completion reports showed instances of poor cement bonding on the completed wells. Furthermore, the geology of the region shows little lateral and vertical continuity of hydraulically fractured tight sandstones and no laterally continuous shale units to stop upward vertical migration of constituents of hydraulic fracturing. Finally, there were numerous unlined surface pits in the area used for storage of drilling wastes and produced water. In other words, the conditions in the region were unique and not like the conditions present in other parts of the country where hydraulic fracturing is utilized.

The report is interesting, and in some ways, useful. But it is just one link in a long chain of information which much be collected in order to properly understand the possible impacts of hydraulic fracturing and shale gas production.

USEPA Plan to Study Fracking Criticized by House Republicans on Energy and Environment Panel

This post was written by Luke Liben and Nicolle Bagnell.

This past Thursday, in a hearing titled "Fostering Quality Science at EPA: The Need for Common Sense Reform," Republicans on a U.S. House of Representatives energy and environment panel criticized a recently released U.S. Environmental Protection Agency plan to study any potentially detrimental effects of fracking on drinking water supplies. Perhaps informed by Secretary Krancer's Capitol Hill testimony from the day before, the Republican panel members were quick to point out that roughly 1.2 million wells have already been drilled using this technique, and there has yet to be a documented report of drinking water contamination. As such, these committee members found the EPA's suggested use of government funds to be lacking in common sense. The EPA responded by noting that until studies were done, or evidence of detrimental effects were sought, it was clear that no such evidence could be found. You can find more information here.

USEPA Announces Schedule to Develop Natural Gas Wastewater Standards for Shale Gas and Coal Bed Methane under Clean Water Act

This post was written by Jennifer Smokelin.

The U.S. Environmental Protection Agency (USEPA) announced today that it will propose a rule for wastewater from coal bed methane in 2013 and a proposed rule for shale gas wastewater in 2014. The announcement is part of the effluent guidelines program (Clean Water Act § 304(m)), which sets national standards for industrial wastewater discharges based on best available technologies that are economically achievable.

To ensure that these wastewaters receive proper treatment and can be properly handled by treatment plants, USEPA will gather data, consult with stakeholders, including ongoing consultation with industry, and solicit public comment on a proposed rule for coal bed methane and for shale gas. The time frame for coal bed methane is shorter because USEPA feels it already has a leg up on data necessary for the coal bed rule whereas there is more information to gather with regard to shale gas wastewater.

A Few More Details

Hydraulic fracturing is a method of releasing natural gas from highly impermeable rock formations by injecting large amounts of fracturing fluids at high pressures to create a network of fissures in the rock formations and provide the natural gas a pathway to travel to the well for extraction. Geologic pressure within the shale formation forces these fracturing fluids back to the surface, where they are referred to as “produced water” or shale gas wastewater. Based on a review of available data, USEPA is initiating a rulemaking to control wastewater produced by natural gas extraction from underground shale formations. Under this proposed rulemaking, EPA will consider standards based on demonstrated, economically achievable technologies, for shale gas wastewater that must be met before going to a treatment facility.

With Proposed Hazardous Waste Exemption, USEPA Shows Support for CCS

This post was written by David Wagner.

As we previewed a few months ago, the U.S. Environmental Protection Agency (USEPA) recently proposed a rule to exclude CO2 streams from Resource Conservation and Recovery Act (RCRA) regulations if they meet certain conditions, including injection for the purpose of geologic sequestration into specific wells regulated under the Safe Drinking Water Act. The proposed rule, which was published on August 8, comes on top of an earlier Safe Drinking Water Act regulation finalized in December 2010 that sets requirements for geologic sequestration, including the development of a new class of injection well called Class VI, established under USEPA’s Underground Injection Control (UIC) program. The UIC Class VI requirements are designed to ensure that wells used for geologic sequestration of CO2 streams are appropriately sited, constructed, tested, monitored, and closed in a manner that ensures USDW protection.

In developing the proposed rule, USEPA determined that CO2 streams captured at power plants and industrial facilities destined for a UIC Class VI well for the purposes of geologic sequestration would be a RCRA solid waste, as it is a “discarded material” as defined in RCRA § 1004(27). In its discussion of the rule, USEPA indicated that, while there is little information available to conclude that CO2 streams would qualify as a RCRA subtitle C hazardous waste, there is the potential for some CO2 streams to meet the definition of a hazardous waste. USEPA concluded that the management of CO2 streams under the proposed conditions does not present a substantial risk to human health or the environment, and will encourage the geologic sequestration of CO2, in a safe and environmentally protective manner.

The proposed exclusion, if finalized, may apply to generators, transporters, and owners or operators of treatment, storage, and disposal facilities engaged in the management of CO2 streams that would otherwise be regulated as hazardous wastes under the RCRA subtitle C hazardous waste regulations as part of geologic sequestration activities. This includes entities in the following industries: operators of CO2 injection wells used for geologic sequestration; and certain industries identified by their North American Industry Classification System (NAICS) code: oil and gas extraction facilities (NAICS 211111); utilities (NAICS 22); transportation (NAICS 48-49); and manufacturing (NAICS 31-33).

USEPA Finalizes Guidance on Mountain-top Mining

This post was written by Mark Mustian.

Last year we discussed the U.S. Environmental Protection Agency's (USEPA) interim guidance for permitting of mountain-top mining and surface mining projects and the likelihood of revisions based on comments USEPA would receive. More than 60,000 comments later, USEPA revised and issued the Final Appalachian Mining guidance. While not legally binding, the guidance document published yesterday is intended to provide guidance to states in the Appalachian region on permitting issues related to mountain-top mining and surface mining projects. The guidance addresses the current best available science, identifies permitting strategies that comply with the requirements of the Clean Water Act (CWA) and provides assistance to USEPA staff in reviewing and approving permits issued by both the states and by the U.S. Army Corps of Engineers (USACE).

Mining and the NPDES Program

In particular, the guidance document seeks to ensure that mining projects are properly permitted under the requirements of the CWA's National Pollutant Discharge Elimination System (NPDES). (A quick aside: all of the states in the Appalachian coal mining region are currently authorized by USEPA to administer the NPDES program.) The CWA and USEPA’s implementing regulations require that NPDES permits contain (1) technology-based effluent limitations, which represent the degree of control that can be achieved by point sources using various specified levels of pollution control technology; and (2) more stringent limitations, commonly known as water quality-based effluent limits, when necessary to ensure that the receiving waters meet applicable water quality standards. During reviews of the NPDES permits issued over the last few years for surface-mining projects in the Appalachian region, USEPA identified concerns about how effectively states were achieving the necessary protection of the receiving streams, and concluded that states could be more effective in gathering water quality data and documenting their permitting processes. As a result, the new guidance identifies key elements which should be evaluated by states to ensure compliance with CWA requirements. USEPA identified the following elements that should be evaluated and documented as part of the permitting process:

  • Effluent and Receiving Water Characterization - USEPA recommends that states utilize their broad authority granted under the CWA to require permittees to provide sufficient data to fully characterize their proposed discharges, and to utilize all available ambient water quality and biological data on receiving streams in permit development.
  • Reasonable Potential Evaluation - The CWA and USEPA regulations require regulation of all pollutants which have the reasonable potential to cause or contribute to an excursion above any applicable water quality standard. USEPA notes that permitting authorities should use all available guidance and resources to develop appropriate limitations to protect water quality standards.
  • Develop Appropriate Permit Limitations - Appropriate limitations may include chemical specific limitations, limitations based upon whole effluent toxicity, limitations based upon bioassessment procedures, and/or best management practices.

Future Mining Activities and Total Dissolved Solids

The issue which could potentially have the largest impact on future mining activities is the issue of Total Dissolved Solids (TDS). TDS consists of dissolved minerals such as chlorides and sulfates, and at high concentrations, TDS constitutants are toxic to aquatic organisms. In the guidance document, USEPA notes that of the Appalachian states, only Pennsylvania and Ohio have numeric criteria which specifically regulate the discharge of dissolved solids. USEPA identifies a TDS level (as measured by conductivity) of 300 μS/cm as an appropriate protective level for instream concentrations. If states properly implement regulations limiting the discharge of dissolved solids, it will likely have a dramatic impact on the ability of mining companies to obtain a discharge permit. Removal of dissolved solids from water entails significant investment, both in capital and operating costs.

Strategies for Reviewing Section 404 Permits

Surface mining activities are also regulated under Section 404 of the CWA for the discharge of dredge or fill material into the waters of the United States. Permits are issued by the USACE, with review and approval by USEPA. The guidance document provides detailed strategies for regulators in USEPA Regions 3, 4 and 5 to use in reviewing Section 404 permits and ensuring that proposed permits are in compliance with the requirements of the CWA and state requirements on water quality. Of particular interest is the discussion regarding control of dissolved solids under a Section 404 permit, where the NPDES permit issued by the State may not be sufficiently protective. This creates the possibility that future control of dissolved solids could incorporated at the federal level, as opposed to the state level.

In Case You Missed It, Here Are Slides and Audio from Reed Smith's June 16 Climate Change Event

This post was written by David Wagner.

Last week, we discussed recent international and U.S. developments related to greenhouse gas regulation, and here are the slides and audio from the event. In particular, we addressed:

  • How the uncertain future of the Kyoto Protocol and the Clean Development Mechanism affect U.S. business (You can also find details on this issue here)
  • What your business needs to know for compliance and planning related to step 2 of USEPA's greenhouse gas Tailoring Rule
  • Implications of the court's "cap and trade" ruling in Association of Irritated Residents v. California Air Resources Board
  • Developments in state courts including upcoming decisions on insurers' obligation to defend and/or indemnify covered insureds for public nuisance, and other types of claims based on third-party allegations of damages from climate change

Reed Smith's Quarterly Climate Change Regulatory Teleseminar is on June 16

This post was written by David Wagner.

It's time for Reed Smith's (free) quarterly climate change report. Please join us via telephone on Thursday, June 16, 2011 from 12 p.m. to 1 p.m. EDT for a regulatory update on significant international, national and state issues concerning climate change and the future of greenhouse gas regulation. The topics are:

  • International update: how the fate of the Clean Development Mechanism and the Kyoto Protocol affect U.S. business
  • USEPA's greenhouse gas Tailoring Rule - Step 2: what your business needs to know for compliance and planning
  • Implications of the court's "cap and trade" ruling in Association of Irritated Residents v. Cal. Air Resources Board
  • State court update: upcoming decisions on insurers' obligation to defend and/or indemnify covered insureds for public nuisance, and other types of claims based on third-party allegations of damages from climate change

If you would like to attend this teleseminar, please email Sandy Petrakis.

USEPA's Proposed Rule That Could Exempt CCS from Hazardous Waste Regulations Awaits White House Approval

This post was written by David Wagner.

A draft proposed rule that could exempt the geologic sequestration of carbon dioxide (CO2) from federal hazardous waste regulations is now moving through the regulatory process. On March 22, 2011, the U.S. Environmental Protection Agency (USEPA) sent a draft proposed rule to the White House Office of Management & Budget (OMB) that could conditionally exempt CO2 sequestered underground from Resource Conservation and Recovery Act (RCRA) requirements. It appears the rule would address the RCRA liability of owners and operators of carbon capture and sequestration (CCS) wells should CO2 leak and contaminate underground sources of drinking water. Following regulatory review by OMB, USEPA anticipates that the proposed rule will be published in the Federal Register in May 2011.

You’ll recall that on December 10, 2010, USEPA finalized a rule under the Safe Drinking Water Act’s Underground Injection Control Program (SDWA UIC Program) to create a new class of injection wells (Class VI) for geological sequestration of CO2. The new rule does not currently address the long-standing concern that owners and operators of Class VI wells could be liable under RCRA for environmental contamination should CO2 that meets the definition of a hazardous waste leak from the wells and contaminate underground sources of drinking water. The draft proposed rule before OMB explores a number of options, including a conditional exemption from the RCRA requirements for hazardous CO2 streams in order to facilitate implementation of geologic sequestration while protecting human health and the environment.

A CO2 Stream with Impurities Could Trigger RCRA Requirements

Under USEPA’s regulations, a solid waste is a hazardous waste if, among other things, it exhibits the characteristics of toxicity. While a CO2 stream is not itself a listed hazardous waste, captured CO2 could contain some impurities at levels that would require its classification as a “characteristic” hazardous waste. CO2 captured from sectors amenable to CCS, such as electric generating facilities, could contain toxic chemical constituents including arsenic, mercury, and selenium. A captured CO2 stream that meets the definition of a hazardous waste would have to comply with all applicable RCRA requirements.

As a result, the characterization of a CO2 stream as “hazardous waste” would make the RCRA waste management scheme applicable to the generation, transportation, treatment, sequestration, and/or disposal of the CO2 stream. Presumably, this could mean that underground injection and sequestration of a hazardous CO2 stream would need to meet the requirements for Class I hazardous waste wells under the SDWA UIC Program instead of the Class VI geologic sequestration wells.

But Not if the CO2 Stream is Exempt from RCRA

The draft proposed rule is not publically available, but an exemption from RCRA might allow the injection of a “characteristically” hazardous CO2 stream for the purpose of geologic sequestration to be permitted under the Class VI injection well requirements instead of Class I requirements. Interestingly, an exemption from RCRA could close a potential (and overlooked) gap that would enable owners and operators of CO2 sequestration wells to seek Class I well permits in order circumvent the stringent post-closure monitoring, care, and financial responsibility requirements imposed by the Class VI rules. On the other hand, owners and operators of CO2 sequestration wells would be able to avoid the complexities and inefficiencies of the RCRA regulatory regime. Most importantly, the exemption would provide much desired regulatory certainty to the CCS industry. Stay tuned.

USEPA Identifies 17 Counties in 11 States Violating Lead Standards

This post was written by Mark Mustian.

In late November, the U.S. Environmental Protection Agency (USEPA) determined that 17 counties in 11 states across the country are not meeting the National Ambient Air Quality Standards (NAAQS) for lead. These areas were designated as “nonattainment” because their 2007 to 2009 air quality monitoring data showed that they did not meet USEPA’s health-based standards.

As a result of the designation, states with these nonattainment areas must develop a State Implementation Plan that meets the requirements of Sections 172(c) and 191 of the Clean Air Act and provides for attainment of the NAAQS as expeditiously as practicable, but no later than December 31, 2015. This designation, which covers such heavily populated areas as Los Angeles County, Tampa, FL and Cleveland, OH, will require the states to develop and implement monitoring programs, develop emission inventories, and adopt control strategies to limit lead emissions within the non-attainment areas.

Moreover, the November 22, 2010 rulemaking is just phase 1 of USEPA's evaluation, and more non-attainment determinations are expected next year. In order to collect and evaluate additional monitoring data, USEPA put off a final decision on many areas of the country until October 15, 2011. The second phase of the rulemaking may greatly increase the number of areas considered to be in non-attainment. For example, in USEPA Region 3 (Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia), USEPA only identified non-attainment regions for the Commonwealth of Pennsylvania. All other states within Region 3 were deferred until October 2011.

In 2008, USEPA revised the National Ambient Air Quality Standards for lead and lowered the standard from a level of 1.5 μg/m3 to a level of 0.15 μg/m3. In addition, the Administrator changed the averaging time and form of the standard to a rolling 3-month average evaluated over a 3-year period. The rule also established new requirements for lead monitoring networks, including the requirement that new lead monitors be located in close proximity to the largest lead emissions sources by January 1, 2010. The final rule revising the lead NAAQS was published in the Federal Register on November 12, 2008, and became effective January 12, 2009.

USEPA Finalizes First Nationwide Mandatory Greenhouse Gas Reporting Requirements

This post was written by Rose Standifer and Jennifer Smokelin.

Mandatory reporting of greenhouse gases (GHG) is now required nationwide. On Tuesday, September 22, 2009, the U.S. Environmental Project Agency (EPA) issued its Final Mandatory Reporting of Greenhouse Gases Rule. The final rule requires mandatory reporting of GHG from most large GHG emissions sources in the United States. The stated purpose of the rule is to collect accurate and timely emissions data to inform future policy decisions. Reporting requirements begin on January 1, 2010. Initial reports, covering emissions during 2010, are due on March 31, 2011.

The EPA estimates that the new program will apply to approximately 10,000 facilities and cover approximately 85% of all GHG emissions in the United States. Similar to the California mandatory GHG reporting program, which began earlier this year, applicability is determined by source category and/or emissions levels. In general, suppliers of fossil fuels and industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions are required to submit annual reports to the EPA under the rule. Key source categories excluded from the rule’s scope include electronics manufacturing, food processing, industrial landfills, coal suppliers, and wastewater treatment facilities. The EPA estimates that most small businesses will be excluded as well because their emissions will fall below the 25,000 metric ton threshold. How to report is obviously a big concern and the EPA has developed a general “Applicability Tool” to help emitters evaluate whether they are subject to the rule’s reporting requirements. An earlier posting on our blog also provided advice to facilities on how to establish that they do not have to report. That information can be found here.

In general, reporting is done on a facility level, even where there are multiple sources at one facility. Facility is broadly defined to include any plant, building, structure, source, or stationary equipment that is located on contiguous or adjacent property and under common control. The key exception to the facility-wide reporting requirement is that certain suppliers of fossil fuels as well as vehicle and engine manufacturers will report at the corporate level.

Specific gases to be reported include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE). The final rule sets forth specific methodologies for calculating emissions of these gases. The methodologies must be used, with only one exception. The EPA will allow the use of “best available data” for reporting between January and March 2010. Facilities can request an extension of the exception past March 2010 but the EPA has expressed that no extensions beyond December 2010 will be granted.

Unlike the California program, the final rule does not mandate third-party verification of the reported data. In California, third-party verification is required beginning in 2010. Under the nationwide program, however, reporters can self-certify their data, which will then be verified by the EPA.

EPA estimates that, for the first year of reporting, the annualized costs of reporting for the private sector will be approximately $115 million and that, for subsequent years, those costs will be reduced to $72 million.

The EPA is currently providing information about the new rule. For additional information, including specific applicability and reporting questions, please contact the Reed Smith lawyer with whom you regularly work.

Recent EPA Notice Indicates Intent to Develop a Data Collection Rule for Nanoscale Materials

This post was written by David Wagner.

On August 4, EPA published a report discussing its intent to develop a data collection rule for nanoscale materials under Toxic Substances Control Act’s (TSCA) Section 8(a). Section 8(a) requires certain manufacturers, importers, or processors of a chemical substance to maintain records and submit reports of production and exposure information. 

The report, prepared by the TSCA Interagency Testing Committee (ITC), stated EPA’s intent to develop a proposed TSCA Section 8(a) rule to obtain information on the production, uses, and exposures of existing nanoscale materials. The ITC was established to make recommendations to the EPA Administrator regarding chemical substances and mixtures to which EPA should give priority consideration for testing under Section 4 of TSCA, which gives EPA the authority to require chemical manufacturers and processors to test chemical substances and mixtures. 

The report identified the need for additional data for the following nanoscale materials: fullerenes; carbon black; titanium oxide nanowires; titanium oxide nanoparticles; zinc oxide; nanosilver; single–walled carbon nanotubes; multi–walled carbon nanotubes; carbon nanofibers; nanoceramic particles; and nanoclays. The report added that “EPA has indicated that it will ensure that the chemicals where there is ITC interest as described in this [report] are either included in [the proposed Section 8(a) rule] or are otherwise new chemical substances subject to premanufacture notification (PMN) reporting under TSCA.  EPA also intends to develop a proposed TSCA Section 4 rule to develop needed environmental, health, and safety data.” 

Comments on the notice are due by September 3, 2009.

USEPA Sends GHG Endangerment Finding to the White House

This post was written by Jennifer Smokelin.

Last Friday, the U.S. Environmental Protection Agency found that climate-warming greenhouse gases, including carbon dioxide, pose a danger to human health and welfare, according to the New York Times. EPA sent its finding to the Office of Management and Budget for review. Once the budget office clears the finding, it can be signed by Lisa P. Jackson, EPA’s Administrator, Lisa P. Jackson. There is also likely to be a public comment period on the proposed finding, but likely none that will prevent the endangerment finding from being finalized.

EPA has been charged for decades with regulating air pollutants under the Clean Air Act and, as the Supreme Court recognized in Massachusetts v. EPA (2007), GHG emissions are air pollutants subject to Clean Air Act regulations. An endangerment determination would confirm the Agency’s power, but also its obligation, to regulate greenhouse gases now.

A complete review -- including White House consent -- is expected to be completed by April 10 and the proposal officially signed by EPA Administrator on April 16, according an internal document presented to White House officials earlier this month and leaked to the news media. The endangerment proposal would be subjected to a 60-day public comment period after publication in the Federal Register on April 30 before moving into the final rule stage.

A review of the leaked internal EPA documents on this issue reveals that the endangerment finding proposes to address all six GHGs listed under the Kyoto Protocol as a group (rather than individually) and not just the four transportation-related GHGs. As a practical matter, the finding would pave the way for federal regulation of motor vehicle emissions of GHGs but it could also have ramifications for the future regulation of GHGs from all stationary sources under the CAA, including power plants, oil refineries, cement plants and other factories.

D.C. Circuit Remands the USEPA's Fine Particle Rule

This post was written by Larry Demase and Steve Nolan.

On Feb. 24, 2009, in American Farm Bureau v. Environmental Protection Agency, No. 06-1410, the District of Columbia Circuit Court of Appeals ruled that the most recent version of the National Ambient Air Quality Standards (NAAQS) for fine particulate matter promulgated by the Environmental Protection Agency (EPA) in 2006 were contrary to law and unsupported by reasoned decisionmaking. The court upheld the coarse particulate NAAQS that were promulgated as part of the same rulemaking. 

The 2006 NAAQS established a 24-hour primary standard for fine particulate matter based on short-term exposure studies, and an annual standard of 15 μg/m3 based exclusively on long-term exposure studies. However, the Clean Air Scientific Advisory Committee (CASAC), an independent scientific advisory committee established under the Clean Air Act, and EPA’s own staff, had recommended a more stringent annual standard because of short-term health effects of fine particulate matter. By statute, EPA was required to explain its rejection of CASAC’s recommendation, and the court found that it had failed to do so adequately.

The court also found that EPA had failed to adequately consider whether a lower limit was necessary to protect children the from adverse health effects of fine particulates, and that the secondary standard for fine particulates, which also went against CASAC’s recommendations, was inadequately justified. The distinction between primary and secondary standards is that the former addresses the health effects of a particular pollutant, while the latter addresses “welfare” effects. For particulate matter, the “welfare” aspect in question was visibility. Finally, the court upheld a separate challenge by farm industry groups to the coarse particulate matter standards. 

The immediate impact of the court’s decision will be negligible because the rule was remanded to EPA and the 2006 standards were left in place pending either the formulation of a new rule or an adequate justification by the agency of the original one. However, given the change in administration, a new rule likely will eventually emerge, and it will be more stringent than the 2006 version.

USEPA Proposes Rule On Mandatory GHG Reporting

This post was written by Jennifer Smokelin and Larry Demase.

On Mar. 10, EPA announced a proposed rule in response to the FY2008 Consolidated Appropriations Act (H.R. 2764; Public Law 110–161) that requires mandatory reporting of greenhouse gas (GHG) emissions from large sources in the United States.  In general, EPA proposes that both upstream production facilities such as fuel suppliers and downstream emitting sourcess of GHG are to report. Emission sources include electric generators, manufacturers of vehicles and engines, food processors, lime production facilities and facilities that emit 25,000 metric tons or more per year of GHG emissions.  Annual reports to EPA are required.  The gases covered by the proposed rule are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE).  EPA is using its authority under the Clean Air Act to develop the rule and it states that the rule is relevant for determining  how to use Sections 111, 112 and 129 of the Clean Air Act  to establish standards for sources emitting GHGs.  EPA estimates that the expected cost to comply with the reporting requirements to the private sector would be $160 million for the first year.  In subsequent years, the annualized costs for the private sector would be $127 million. This rule will begin the process of shifting the focus of GHG regulation away from the states. 

The proposed rule will soon be published in the Federal Register under Docket ID No. EPA-HQ-OAR-2008-0508.  The proposed rule will be open for public comment for 60 days after publication in the Federal Register. Two public hearings will be held during the comment period.  Click here for a pre-publication copy of the proposed rule and preamble.

With the U.S. Supreme Court's Denial, the Federal Mercury Rule Runs Out of Appeals

This post was written by Dave Wagner.

On Feb. 23, 2009 the U.S. Supreme Court declined to consider an appeals court decision that had struck down EPA's Clean Air Mercury Rule, an emissions cap-and-trade approach related to the regulation of mercury from coal- and oil-fired power plants. It appears EPA will now develop new mercury standards for power plants.

 In the D.C. Circuit Court decision last year, the court vacated the rule, finding that EPA had improperly removed power plants from a list of regulated source categories under a section of the Clean Air Act that requires strict regulation of hazardous air pollutants, including mercury. Following this decision, both EPA and the Utility Air Regulatory Group, a group of electric utility companies and industry trade groups, petitioned the Supreme Court to review the matter. Then earlier this month, the Obama Administration withdrew its petition, conceding that EPA had not made the health and environmental impact findings required by the Clean Air Act to remove a source category. Left with the industry group's petition, the Supreme Court denied cert. (Docket 08-352) on Monday.

Despite the likely restart of a federal approach to develop mercury regulations, keep in mind that the Pennsylvania Mercury Rule remains in the courts. Details can be found in one of our earlier postings.

USEPA to Reconsider Recent Interpretation on Carbon Dioxide Regulation

This post was written by Mark Mustian and David Wagner.

Only two months after issuing a memorandum interpreting which pollutants are covered (or not covered) by the federal Prevention of Significant Deterioration (PSD) Perrmit Program, EPA is reconsidering its approach.

On Dec. 18, 2008, Steve Johnson, the EPA Administrator under the previous administration, issued a memorandum that guided regulators on how to consider carbon dioxide emissions under the Prevention of Significant Deterioration (PSD) permitting program. The memo stated that EPA does not consider a pollutant (including carbon dioxide) to be "subject to regulation" until EPA has promulgated a regulation that requires emission controls. As a result, carbon dioxide would not be subject to emission limitations before a PSD permit was issued.

In a Feb. 17, 2009 letter to the Sierra Club, Lisa Jackson, EPA's new administrator, announced the Agency was opening up the memorandum for reconsideration and public comment. EPA specifically noted that the memo did not bind States issuing permits under their own authority, and that it should not be considered "the final word on the appropriate interpretation of Clean Air Act requirements". The letter added that the Agency will publish a notice of a proposed rulemaking on the matter in the near future.

 Click here for the original memo and Sierra Club letter.

Nanosilver in Consumer Products: A Potential Gold Mine for Enhanced US Regulation

This post was written by Christopher Rissetto, Stephanie Giese and Areta Kupchyk.

The Environmental Protection Agency announced Nov. 19, 2008 that it is seeking public comments on a petition asking it to regulate nanosilver products as pesticides.  The authors of this article discuss that petition, a related petition sent to the Food and Drug Administration, and other activities at federal regulatory agencies and in the Congress affecting products that incorporate nanomaterials.  They expect a new regulatory environment to develop in 2009 for companies producing and selling such products. 

To learn more, please click here for the full article.

USEPA Petitions for Rehearing of CAIR Decision

This post was written by Lawrence A. Demase, Russell R. Eggert, Todd O. Maiden, Louis A. Naugle, Christopher L. Rissetto, Harley N. Trice, II, and Steven M. Nolan.

In an Environmental E-Flash in July, Reed Smith reported that the Court of Appeals for the District of Columbia Circuit had vacated the United States Environmental Protection Agency’s Clean Air Interstate Rule (“CAIR”), North Carolina v. Environmental Protection Agency, 531 F.3d 896 (D.C. Cir. 2008) (finding that CAIR had “more than several fatal flaws”). 

EPA’s Arguments in Petition for Rehearing

On Friday, Sept. 26, 2008, the EPA filed a Petition for Rehearing or Rehearing, en banc of the decision, contending that the panel committed four serious errors warranting withdrawal of the original panel and a new look at the issues either by the three-judge panel, or by the entire Circuit Court of Appeals en banc

First, the court had imposed a remedy unsought (and not briefed) by the parties. As we observed in our July E-flash, none of the petitioners had asked the court to vacate CAIR in its entirety. Accordingly, the EPA had not briefed the issue, and in the Petition for Rehearing, asks for the opportunity to do so now. The EPA hopes to show that remanding CAIR would be a preferred remedy.

Second, the court erred by finding CAIR inconsistent with the Act although it had affirmed other, similar programs.  The court had invalidated CAIR because the rule envisaged controlling the upwind generation of sulfur dioxide (SO2) and nitrogen oxides (NOx) – the chemical precursors of small particulates (PM2.5) and ozone – by a cap and trade scheme within multistate regions. The court found that this approach was inconsistent with the Clean Air Act (“Act”), because it failed to ensure that the proposed trading program would prohibit sources within a particular upwind state from contributing significantly to nonattainment or interfering with maintenance of attainment of National Ambient Air Quality Standards (NAAQS) in affected downwind states.

In its Petition for Rehearing, the EPA contends that the court had erred because the CAIR approach was consistent with the Act, and the court had approved a similar regional cap and trade approach in Michigan v. Environmental Protection Agency, 213 F.3d 663 (D.C. Cir. 2000), which addressed a challenge to the EPA’s NOx SIP call. 

Third, the court erred by holding that the EPA lacked authority to interfere with SO2 allowances. The EPA asks for reconsideration of the court’s determination that in mandating the retirement of SO2 allowances under the acid rain program established by Title IV of the Act, CAIR interfered with a congressionally mandated program. The EPA contends that the Act allows for further regulation of SO2 pursuant to other Titles of the Act. 

Fourth, the court erred by rejecting EPA’s approach to allocating NOx allowances. The EPA is asking the Court to reconsider its finding that CAIR’s approach to allocating initial state NOx allowances – in part based on the mix of fuels used by electrical generating facilities within a state – was based on impermissible considerations. 

Certain Holdings Not Challenged by EPA

Three aspects of the original North Carolina decision are unchallenged, although they could be changed if rehearing is granted. These are: (i) the court’s ruling that EPA must consider the effect of upwind SO2 and NOx on interference with the ability of downwind states to maintain compliance with NAAQS; (ii) the 2015 final date for implementation of CAIR, which the court found arbitrary because downwind states were required to meet their NAAQS targets by 2010; and (iii) reconsideration of the inclusion of Minnesota within CAIR. The EPA argues that the case should be remanded so that CAIR can be appropriately revised, but asserts that the original rule should be restored in the interim because of the effect that the vacation of CAIR will have on health, the environment and the economy. 

Rehearing Process

The great majority of petitions for panel rehearing and petitions for rehearing en banc are denied. Under the Federal Rules of Appellate Procedure, the opposing parties are not permitted to file a response to the petition unless it is requested by the court. The court does not normally grant rehearing without giving the parties who prevailed originally the opportunity to respond. 

The Possibility of a Legislative Solution

While there is substantial bipartisan support in Congress for a legislative solution, especially one that will authorize the first round of CAIR-mandated emission reductions to go forward, EPA’s representatives are pessimistic that any such legislation will emerge in this session of Congress or in the next. Meanwhile the Clean Air Act’s deadline for health-based standards is less than two years in the future, so it is possible – even likely – that in the absence of CAIR, the states will impose their own emission limits on electrical generating units.

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Keeping Up With Nanotechnology in the United States

This post was written by David Wagner.

Over the past few months, nanotechnology has been in the news.  Four items are worth noting:

  • In February, the U.S. Environmental Protection Agency fined a California technology company for failing to register nanomaterial under the Federal Insecticide, Fungicide and Rodenticide Act.  The $208,000 fine was based on the company's failure to register its products as pesticides and for allegedly making unverified claims relating to the antimicrobial capabilities of the nano-silver coatings used in its computers keyboards and mouse accessories.
  • In May, a scientific report in the journal Nature Nanotechnology discussed a possible link between carbon nanotubes and the development of precursors of mesothelioma.
  • Shortly thereafter, NGO groups petitioned USEPA, calling for the review and control of some 260 nano-silver products. See Posting "Citizen Petition for Regulation of Nano-Silver (June 16, 2008).
  • Then in June, the European Commission issued guidance in addressing nanomaterials under REACH, its new chemicals regime.  The guidance indicated that for the nanoscale form of a substance on the market in bulk, the European Commission may require additional information on the specific properties or additional risk management measures. While there is still significant uncertainty about the regulation of nanomaterials, companies working with nanomaterials should closely track what scientists say, what NGOs threaten, and what regulators do both here and abroad.  There is increasing scrutiny of chemical substances throughout the world, and understanding recent developments and the related legal requirements will likely mitigate liability exposure and the business risk associated with nanomaterials. 

Citizen Petition for Regulation of Nano-Silver

This post was written by Christopher Rissetto, Stephanie Giese and Areta Kupchyk.

In response to the influx of products engineered using nano-silver in the consumer marketplace, the International Center for Technology Assessment (“CTA”), in conjunction with a number of other consumer groups, filed a self-styled Petition For Rulemaking To The United States Environmental Protection Agency (“Petition”) on May 1, 2008.  The Petition, citing to the rulemaking provisions of the Federal Administrative Procedure Act (“APA”) and other statutes, calls for the review and control of some 260 nano-silver products, most specifically through the regulatory process under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”).  In the Petition, CTA claims “nanomaterials present serious toxicity risks for human health and ecosystems” and asserts that “nano-silver has quickly become the most commonly used nanomaterial in consumer products.”  The scattershot but substanti-ated approach of the Petition, combined with its prior administrative filings, and recent Environmental Protection Agency (“EPA”) enforcement and rulemaking actions, could well lead to future federal efforts to control nano-silver products.

To continue reading, please see the full article.

EPA Unified Agenda: EPA May Issue Significant New Use Rule for Nanoscale Materials in February 2008

In case you missed the explanation in previous articles, nanotechnology is the understanding and control of matter at dimensions of roughly 1 to 100 nanometers, where unique phenomena enable novel applications. A nanometer is about one ten-thousandth the diameter of a human hair. Materials made using nanotechnology, also known as nanoscale materials, may have organizations and properties different than the same chemical substances displayed at a larger scale. And don’t think these are “space” age products – many are being developed to replace everyday items. More than 700 nanoproducts are currently available on the U.S. market. Nanotechnology materials currently in the marketplace include:

  • Burn and wound dressings
  • Water filtration devices
  • Industrial catalysts
  • A dental-bonding agent
  • Step assists on vans
  • Coatings that allow for easier-cleaning glass
  • Bumpers and catalytic converters on cars
  • Protective and glare-reducing coatings for eyeglasses
  • Sunscreens and cosmetics
  • Longer-lasting tennis balls
  • Light-weight, stronger tennis racquets
  • Stain-free clothing and mattresses
  • Ink

The U.S. Environmental Protection Agency’s unified regulatory agenda, published in December, includes a notice on the Nanoscale Materials Stewardship Program (NMSP), which is a voluntary program that EPA established to assemble existing data and information from manufacturers and processors of certain nanoscale materials. The notice states that, under the Toxic Substances Control Act (TSCA), EPA has the authority to require the development of data necessary for risk assessment when statutory findings concerning (1) production volume and exposure/entry into the environment or (2) potential hazard, can be made, and to prevent and eliminate unreasonable risk of injury to human health and the environment.  EPA added that “[i]f information from the NMSP or other information indicates potential new uses of existing chemicals that may result in new exposures or to fill information gaps, EPA may issue a significant new use rule or section 8 reporting rule under TSCA.”

This follows EPA’s July 2007 announcement of the availability of an NMSP concept paper, a proposed information collection request and a paper that describes determining the TSCA inventory status of nanoscale materials. According to the unified regulatory agenda notice, EPA intends to publish in February 2008 a final NMSP notice, including final versions of any documents. 

For more information about Reed Smith's nanotechnology team, please visit their Nanotechnology Team Page.