Energy and Environment Monitor

Superfund Tax Returns

On June 21, 2010, the USEPA sent a letter to Congress in support of reinstating the tax on industry to fund Superfund program activities. For those of you with a long memory, this tax had been allowed to lapse on December 31, 1995 and despite a number of attempts during the late 1990s, the tax was never reauthorized. Since that time, Superfund program activities have been primarily funded via the transfer of general revenue funds to the Superfund trust fund. It should be no surprise that since 1995, the environmental community has looked for the opportunity to reinstate this tax on industry and believes that they now have this opportunity under the current Administration. Especially when the following opinion, as expressed by the USEPA, is taken into account:

 

“Since the beginning of this administration, we have made it clear that we support the reinstatement of the polluter pays system for the Superfund program,…Our taxes should be paying for teachers, police officers, and infrastructure that is essential for sustainable growth – not footing the bill for polluters.” (Pollution Engineering, August 2010).

 

When Congress initially authorized the Superfund program under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in 1980, CERCLA established a trust fund that was financed primarily by taxes on crude oil and certain chemical manufacturers, as well as an environmental tax assessed on corporations based on their taxable income. When the balance of the Superfund trust fund decreased during the mid-1980s, the Superfund Amendments and Reauthorization Act (SARA) of 1986 extended the Superfund taxes and provided additional taxing authority. The Superfund trust fund balance reached its peak in 1997 of $4.7 billion. At the start of fiscal 2007, the Superfund trust fund had a balance of $173 million. Since 1981, Superfund appropriations have totaled over $32 billion, or about $1.2 billion annually. Based on a study of Superfund and its funding and expenditures by the United States Government Accountability Office (GAO) entitled Superfund: Funding and Reported Costs of Enforcement and Administration Activities (July 18, 2008) the GAO concluded the following:

 

·     For fiscal years 1981 through 1995, 68% of the Superfund trust funds came from taxes on industry, 17% from general fund appropriations, 9% from interest, and 17% from fines, penalties, and cost recovery actions.

·     For fiscal years 1996 through 2007, 6% of funds came from taxes on industry, 59% from general fund appropriations, 16% from interest, and 19% from fines, penalties, and cost recovery actions.

·     For fiscal years 1996 through 2007, 77% of Superfund expenditures were spent on remedial/removal actions, and most of the remaining 23% on enforcement and administrative activities. During this time period, the overall level of actual Superfund expenditures declined nearly 30% from $1.8 billion per year to $1.3 billion per year.

 

The GAO report is available at www.gao.gov/new.items/d00841r.pdf. A second report, which makes the case for increased levels of Superfund funding was prepared by the Congressional Research Service, and is entitled CRS Report for Congress, Superfund Taxes on General Revenues: Future Funding Issues for the Superfund Program (February 4, 2008). The CRS report is available at http://ncesonline.org//NLE/CRSreports/08Mar/RL31410.pdf.

 

This article was authored by Greg Tieman, Acacia Environmental Group LLC. For more information on the author see here. 

Implications of United States v. Washington State Department of Transportation, 2010 WL 2302502 (W.D. Wash. 2010)

Introduction to Arranger Liability: 

 

Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) §107(a)(3) imposes strict liability on “any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by an other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances.”   42 U.S.C. §9607(a)(3). However, CERCLA does not provide a definition for “arrange for” thus the courts have been left to delve into a fact specific inquiry to determine whether or not a party should be held liable as an “arranger.”

 

Burlington Northern decision: 

 

The U.S. Supreme Court’s 2009 decision in the consolidated cases of Burlington Northern & Santa Fe Ry Co v. United States (Case No. 07-1601) and Shell Oil Co. v. United States (Case No. 07-1607) hereinafter “Burlington Northern” changed the fact specific inquiry for determining whether or not a potentially responsible party (PRP) is an “arranger” by including an “intent to dispose” element. Burlington Northern & Santa Fe Ry Co v. US, 129 S.Ct. 1870, 1879 (2009).

 

Under Burlington Northern the Supreme Court explained the two situations in which determination of whether or not a PRP would be held responsible as an “arranger” is a simple one. First, “CERCLA liability would attach under §9607(a)(3) if an entity were to enter into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance.” Id. Second, “an entity could not be held liable as an arranger merely for selling a new and useful product if the purchaser of that product later, and unbeknownst to the seller, disposed of the product in a way that led to contamination.” Id. 

 

The Supreme Court goes on to explain the fact specific inquiry required to determine whether an entity is an arranger for those situations, which fall somewhere in the middle. This involves the following:

 

·     “[U]nder the plain language of the statute, an entity may quality as an arranger under §9607(a)(3) when it takes intentional steps to dispose of a hazardous substance.” Id.

 

·     “[k]nowledge alone is insufficient to prove that an entity ‘planned for’ the disposal, particularly when the disposal occurs as a peripheral result of the legitimate sale of an unused, useful product. In order to qualify as an arranger, Shell must have entered into the sale of D-D with the intention that a least a portion of the product be disposed of during the transfer process by one or more of the methods described in §6903(3)…Shell’s mere knowledge that spills and leaks continued to occur is insufficient grounds for concluding that Shell ‘arranged for’ the disposal of D-D within the meaning of §9607(a)(3).” Id. at 1880.

 

    Following the U.S. Supreme Court’s decision in Burlington Northern in those situations where there is a question as to whether or not a PRP should be held strictly liable as an “arranger” under CERLCA, many courts have conducted a fact specific inquiry into the circumstances surrounding the transfer and disposal of the hazardous substance and will include an “intent-to-dispose” requirement. See Hinds Inv. v. Team Enter., No. CV F 07-0703, 2010 WL 922416 (E.D. Cal. 2010); Appleton Papers Inc. v. George A. Whiting Paper Co., Slip Op., 2009 WL 5064049 (E.D. Wis., Dec. 16, 2009) (summary judgment); Frontier Communications Corp. v. Barrett Paving Materials, Inc., 631 F. Supp. 2d 110 (D. Me. 2009) (denying motion to dismiss due to fact-intensive inquiry). 

 

Post Burlington Northern the District Court in Washington seems to have expanded the scope of Arranger Liability: 

 

    On June 7, 2010, the United States District Court, W.D. Washington at Tacoma, issued an unusual decision finding the Washington State Department of Transportation (WSDOT) liable as an arranger for disposal of hazardous substances for its role in the management of storm water runoff. In the brief discussion that follows the court explained its reasoning:

 

The U.S. counters by arguing that WSDOT arranged for disposal by designing, constructing, and operating drainage systems whose sole function was to collect highway runoff and dispose of it into nearby water-bodies. Dkt. 62, at 27. The U.S. states that WSDOT had actual knowledge that the runoff that it was discharging contained hazardous substances. Id. The U.S. further states that WSDOT has the ability to redirect, contain, and treat its contaminated runoff. Id. at 28.

 

An arranger is defined as “any person who by con-tract, agreement, or otherwise arranged for disposal or treatment ... of hazardous substances owned or possessed by such person, by any party or entity, at any facility ... owned or operated by another party or entity and containing such hazardous substances.” 42 U.S.C. §9607(a)(3). “A party that ‘arranged for disposal’ of a hazardous substance under §9607(a)(3) does not become liable under CERCLA until there is an actual or threatened release of that substance into the environment.”   Pakootas v. Teck Cominco Met-als, Ltd., 452 F.3d 1066, 1077-78 (9th Cir.2006). “[D]isposal activities that were legal when conducted can nevertheless give rise to liability under §9607(a)(3) if there is an actual or threatened release of such hazardous substances into the environment.”   Id. at 1078. “[A]n entity may qualify as an arranger under §9607(a)(3) when it takes intentional steps to dispose of a hazardous substance.”   Burlington Northern and Santa Fe Railway Co. v. United States, ---U.S. ----, ----, 129 S.Ct. 1870, 1879, 173 L.Ed.2d 812 (2009). “[T]he word ‘arrange’ implies action directed to a specific purpose.” Id.

 

*6 The court is persuaded by the U.S.'s arguments. WSDOT arranged for disposal of hazardous sub-stances. It is undisputed that WSDOT designed the drainage systems at issue. Designing is an action directed to a specific purpose. The purpose was to dis-charge the highway runoff into the environment. WSDOT had knowledge that the runoff contained hazardous substances and there was an actual release of the hazardous substances into the environment. WSDOT argues that it did not have control of the hazardous substances. However, it did have control over how the collected runoff was disposed of. WSDOT did design the drainage system and, as noted by the U.S., WSDOT has the ability to redirect, contain, or treat its contaminated runoff. For the foregoing reasons, WSDOT is an arranger under 42 U.S.C. §9607(a)(3). United States v. Washington State Department of Transportation, 2010 WL 2302502 (W.D. Wash. 2010).

 

As evidenced by the district court’s discussion, the district court does not appear to have made the fact specific inquiry suggested by Burlington Northern decision. Time will tell if other courts will continue to expand the scope of arranger liability that recently appeared to have narrowed as a result of the Burlington Northern decision.
 

This article was authored by Laura G. Swingle, Jackson Kelly PLLC. For more information on the author see here.

EPA Supports Reinstating “Polluter Pays” Provision of CERCLA

On June 21, 2010, the U.S. Environmental Protection Agency sent a letter to Congress in support of reinstating the lapsed Superfund “polluter pays” taxes. Superfund is the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), a United States federal law designed to clean up sites contaminated with hazardous substances.

 

Advocates of the tax claim it would provide a predictable source of funding and shift the burden of cleanup costs from taxpayers to the parties who benefit from the manufacture or sale of substances that typically cause hazardous waste problems. The Superfund taxes expired on December 31, 1995. Since the expiration of the taxes, Superfund program funding has been largely financed from General Revenue transfers to the Superfund Trust Fund. Congress has appropriated about $1.2 billion a year for hazardous-waste cleanups, but “polluter pays” advocates estimate that $3 billion a year is needed. 

 

The administration is proposing to reinstate the taxes as they were last in effect on crude oil, imported petroleum products, hazardous chemicals, and imported substances that use hazardous chemicals as a feedstock, and on corporate modified alternative minimum taxable income. Under the administration’s proposal, the excise taxes and corporate environmental taxes would be reinstated for a period of 10 years beginning in January 2011. 

 

Critics of the tax counter that, under current law and practice, polluters already clean polluted sites when the federal government identifies the responsible parties. The "polluter pays" tax simply forces law-abiding companies who practice sound environmental practices (and their customers) to assume responsibility for the actions of others. Even in cases where some of the polluters are no longer around to pay for site cleanup, CERCLA authorizes EPA to collect “orphan shares” from those parties who are financially capable of assuming responsibility. Thus, the necessity of such a tax is questionable. Given the current state of the economy and the desire to keep industrial jobs in the U.S., reinstating “polluter pays” at this time may not be advisable. 

This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.

Court of Claims Holds Government Contract Requires Reimbursement for CERCLA Clean-up Costs

    During World War II, the United States required huge amounts of aviation gas (avgas). The federal government had the authority to require the production of avgas at refineries and to seize refineries, if necessary. Instead the government entered into contracts with oil companies including Shell Oil Company and Atlantic Richfield Company for the production of avgas. Avgas is a blend of chemical elements which produces sulfuric acid waste as a byproduct. Because of the large quantity of avgas required for World War II, much larger quantities of acid were generated than before the War. As a result, Shell and Atlantic Richfield had to send some of the acid waste to a hazardous materials dump (the McColl Site). This site was chosen because of its proximity to the refineries and the shortage of tank cars available to transport the waste elsewhere for reprocessing.

 

    In 1991, the United States and the State of California brought suit against Shell and Atlantic Richfield pursuant to CERCLA for the recovery of costs incurred in cleaning up the acid waste at the McColl Site. Shell and Atlantic Richfield counterclaimed against the United States claiming that it had arranger liability under CERCLA and also that it was contractually required to reimburse the oil companies. In 1994, the parties entered into a partial Consent Decree in which Shell and Atlantic Richfield agreed to pay $18 million for CERCLA costs incurred by the United States and California, but retained the right to recover those costs should the United States ultimately be held liable.

 

    In 1995, the district court granted partial summary judgment to Shell and Atlantic Richfield holding that the United States was an arranger. In addition, the district court allocated 100% of the cost of clean-up to the United States including the $18 million previously paid by Shell and Atlantic Richfield.

 

    The district court decision was reversed by the Ninth Circuit and remanded to the district court. The district court resolved all remaining counterclaims except that it transferred the Shell and Atlantic Richfield claims for breach of contract to the United States Court of Claims. In the Court of Claims, the oil companies contended that the "Taxes" clause in the avgas contracts required the United States to reimburse them for CERCLA expenses. The clause reads as follows:

 

[The Government] shall pay . . ., any new or additional taxes, fees, or charges, other than income, excess profits, or corporate franchise taxes, which Seller may be required to pay by any municipal, state, or federal law in the United States or any foreign country to collect or pay by reason of the production, manufacture, sale or delivery of the [avgas] . . .

 

In a May 27 decision, the Court of Claims denied the government's motion to dismiss and granted the oil companies' motions for partial summary judgment. Shell Oil Co. v. United States, 2010 WL 2197741 (Ct. Cl. May 27, 2010). The first issue resolved by the Court was whether the CERCLA clean-up costs are "charges" as the term was used in the contract. The government contended that the "Taxes" clause was a supplemental pricing term not an indemnification clause. The Court rejected this argument relying on the definitions in Black's Law Dictionary (8^th Ed. 2004); Black's Law Dictionary (3^rd Ed. 1933); American Heritage Dictionary of the English Language; The New Century Dictionary; Webster's New Century Dictionary of the English Language. All of these authorities defined "charges" as "costs" or "expenses" in one form or another. Based on this, the Court concluded that the CERCLA clean-up costs attributable to disposing of the acid were "charges" under the contract.

 

The United States also argued that the Taxes clause did not support an argument that the obligations of the United States for additional charges extended into the indefinite future – many years after the contracts were closed out and that the clause only covered costs imposed during performance of the contract. In addition, the United States argued that the CERCLA costs were not imposed "by reason" of the production, manufacture, sale or delivery of the avgas as required by the "Taxes" clause. The Court of Claims disagreed with these contentions. According to the Court, the only limitation on recoverable costs is that they be incurred "by reason of" the production of avgas in the performance of the contract. The Court found nothing in the language of the contract to support the idea that reimbursement was limited to costs incurred during contract performance. The Court held that the "by reason of" language created a proximate causation or but for causation standard which was met by the showing that the production of avgas to satisfy the oil company's contractual obligations necessarily entailed disposal of hazardous waste. 

 

The Court also rejected the United States' last argument that the clause when read as an indemnity clause as advocated by the plaintiffs violated the Anti-Deficiency Act which prohibits the government from expending in any one fiscal year any sum in excess of appropriations made by Congress for that year.

 

This article was authored by James R. Snyder, Jackson Kelly PLLC. For more information on the author see here.

RCRA Rules in the Pipeline

The U.S. Environmental Protection Agency (U.S. EPA) is working on a number of waste-related regulations. For those trying to stay current on the on the status of various regulations under development, helpful information can be found in the Agency’s Semi-Annual Regulatory Agenda Online (e-Agenda) that was announced April 26, 2010 (75 Fed. Reg. 21872). In addition, U.S. EPA updates its e-Agenda on a monthly basis with its online Action Initiation List (AIL). The e-Agenda and AIL, as well as U.S. EPA’s Regulatory Gateway, which focuses on priority rulemakings, offer insight into the Agency’s plans for proposing and finalizing new regulations. This blog reviews the Resource Conservation and Recover Act (RCRA) rules currently under development.

 

Pre-Proposal Rules with a Scheduled Proposal Date: U.S. EPA has announced a number of RCRA rules that have not yet been proposed. According the e-Agenda, the Agency plans to propose two rules by September 2010: (1) RCRA requirements for hazardous carbon dioxide (CO₂) injectate in geological sequestration activities; and (2) revisions to the underground storage tank (UST) regulations. 

 

(1)     Hazardous CO₂ Injectate: U.S. EPA states in its e-Agenda that it is “considering a proposed rule…to explore…a conditional exemption from the RCRA requirements for hazardous CO₂ streams”. This is in response to comments U.S. EPA received on its July 25, 2008 proposed rule under the Safe Drinking Water Act Underground Injection Control Program to create a new class of injection well for geological sequestration of CO₂ (73 Fed. Reg. 43492) requesting clarification on how RCRA hazardous waste streams apply to CO₂ streams. According to U.S. EPA’s Regulatory Gateway, the Agency is projecting a proposed rule to be published in the Federal Register by December 2010. 

 

(2)     Revisions to the UST Regulations: The Agency is also working on a proposal to revise its UST regulations at 40 CFR Parts 280 and 281 to “update and revise [them] to make targeted changes to improve implementation and prevent UST releases”. In addition, U.S. EPA is proposing amendments to incorporate the provisions of the Energy Policy Act of 2005, which included amendments to RCRA. For states receiving federal UST funding, there are requirements for secondary containment, operator training, and delivery prohibition; however, these same requirements do not apply in Indian country. U.S. EPA states in the e-Agenda it “plans to develop regulations for secondary containment and operator training to apply in Indian country and in states that choose not to obtain State Program Approval from [U.S.] EPA in order to achieve more consistent program results in release prevention and compliance.” U.S. EPA further states it “plans to develop regulations for delivery prohibition that [U.S.] EPA may apply in its enforcement actions.”

 

Pre-Proposal Rules without a Scheduled Proposal Date: Other waste-related rules that have been announced by U.S. EPA but that are not yet proposed and do not have a scheduled proposal date include: (1) episodic generation rulemaking; (2) streamlining laboratory waste management in government research laboratories; (3) standards for the safe and environmentally protective placement of coal combustion residues as minefill in coal mines not regulated under the Surface Mining Control and Reclamation Act; (4) revisions to land disposal restrictions treatment standards and changes to recycling requirements for spent petroleum refining hydrotreating and hydrorefining catalysts; (5) revisions to RCRA Subtitle C financial test criteria; (6) revisions to reportable quantity values for F- and K-wastes under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA); and (7) RCRA smarter waste reporting. 

 

(1)     Episodic Generation: U.S. EPA’s rule that is under development and called “episodic generation” by the Agency refers to a specific regulation associated with entities that find themselves moving occasionally or “episodically” into a higher hazardous waste generator status. Examples of events identified by U.S. EPA that may temporarily affect a facility’s generator regulatory status include: construction and demolition debris; equipment maintenance during a plant shut down; removal of post-shelf life inventory; tank cleanouts; and process upsets.

 

(2)     Government Research Laboratories: The proposal for streamlining laboratory waste management in government research laboratories will seek comment on whether the data that U.S. EPA has on such laboratories is accurate, e.g., the universe of government research in laboratories, and on the number of students in such laboratories. Government research laboratories were not included in the Academic Laboratory Rule published December 1, 2008 (73 Fed. Reg. 72912).

 

(3)     Placement of Coal Combustion Residuals at Coal Mines: U.S. EPA is also considering performance standards for the placement of coal combustion residuals (CCRs) for filling surface or underground coal mines, referred to as minefilling, not regulated under SMCRA. U.S. EPA states in the e-Agenda that: “there is sufficient evidence that adequate controls may not be in place, and that regulations are warranted.” The Agency is considering this action in response to a 2006 recommendation by the National Research Council concerning the management of coal combustion residuals in coal mines. U.S. EPA’s action will be coordinated with a proposal by the Office of Surface Mining of the Department of the Interior to address minefilling at mines with SMCRA permits. The intent of the proposals, if finalized, is to prevent contamination or damage to groundwater and surface waters.   

 

(4)     Revisions to LDR Treatment Standards and Recycling Requirements for Petroleum Refining: Regarding the revisions to the land disposal restrictions, U.S. EPA is considering amending the treatment requirements for spent petroleum hydrorefining catalyst, Hazardous Waste Code K172, and petroleum refinery primary oil/water/solids separation sludges, Hazardous Waste Code F037. U.S. EPA is also considering a proposal to “encourage consistent levels of recycling” of spent petroleum hydrotreating and hydrorefining catalysts, Hazardous Waste Codes K171 and K172, respectively.

 

(5)     RCRA Subtitle C Financial Test: U.S. EPA has been analyzing whether the criteria for the RCRA Subtitle C financial test needs updating. The test is one of several methods available to the regulated community for demonstrating financial assurance for closure/post-closure of their facilities.   The test criteria were last updated in 1982. According to the e-Agenda, “some States are not allowing companies to use the test” and “some language in the financial test reporting requirements is no longer consistent with current professional standards under Generally Acceptable Accounting Principles.”

 

(6)     Revisions to CERCLA Hazardous Substances List and Reportable Quantity Values: U.S. EPA is considering a proposal for correction of error and “other adjustments” to 40 CFR § 302.4, which lists the hazardous substances and reportable quantities under CERCLA. According to the e-Agenda, the proposal may include: “the correction of entries for individual substances, entries for F-and K- waste streams and entries in Appendix A of 40 CFR 302.4.” U.S EPA further states that the “proposal may include additional substances as entries in Table 302.4, Appendix A to Section 302.4, and the table in Section 302.6(b)(iii); removal of other entries from these lists; and amendments to certain footnotes that explain entries in Table 302.4.” 

 

(7)     RCRA Biennial Reports: The “RCRA smarter waste reporting” is intended to decrease the regulatory burden on generators completing the RCRA Biennial Report by eliminating the form for waste shipped offsite.  Instead, U.S. EPA is proposing to: (1) substitute data from the e-Manifest system once legislation is enacted and the system is developed and operational; (2) present an option for facilities with static hazardous waste generation to report less frequently; and (3) improve the information the Agency receives from companies who manage their waste onsite.

 

Proposed Rules with a Scheduled Final Date: The regulatory agenda also contains U.S. EPA’s schedule for finalizing certain proposed rules. The e-Agenda gives dates for three proposed rules. First, in May 2010, U.S. EPA is scheduled to finalize the proposed withdrawal of expansion of the RCRA comparable fuels exclusion (74 Fed. Reg. 64643, Dec. 8, 2008). Emission comparable fuels are fuels produced from hazardous secondary materials which, when burned in industrial boilers under specified conditions, generate emissions that are comparable to emissions from burning fuel oil in those boilers. Second, in April 2011, U.S. EPA plans to finalize the proposed rule adding hazardous pharmaceutical waste to the federal universal waste program (73 Fed. Reg. 73520, Dec. 2, 2008). Because this rule is less stringent than RCRA hazardous waste regulations, authorized states would have to adopt the regulations, if finalized, before entities could opt-in to the universal waste regime. Third, in July 2011, U.S. EPA intends to finalize the proposed rule regulating solvent-contaminated rags and wipes (74 Fed. Reg. 66259, Dec. 15, 2009); 74 Fed. 55163, Oct. 27, 2009; 68 Fed. Reg. 65586, Nov. 20, 2003). If finalized, this rule will impact the management of the following types of solvent-contaminated wipes: (1) wipes disposed of in a landfill or by combustion after use, and (2) wipes that are laundered after use to remove the solvent and then used again. 

 

Proposed Rules without a Scheduled Final Date: Other proposed rules that are to be finalized but do not have a scheduled date include: (1) revisions to the comprehensive procurement guideline (CPG) for products containing recovered materials: (2) management of cement kiln dust; (3) standards and procedures for electronic hazardous waste manifests (e-Manifest); and (4) removal of saccharin and its salts from the lists of hazardous constituents, hazardous waste, and hazardous substances.

 

(1)     Revisions to the CPG for Products Containing Recovered Materials: Currently, U.S. EPA is considering how to proceed with the CPG for nylon carpet. U.S. EPA is required under RCRA § 6002 to prepare CPGs that designate items that are or can be made with recovered materials and to issue recommendations for government procurement of these items. Once designated, procuring agencies must purchase these items with the highest percentage of recovered materials practicable.

 

(2)     Management of Cement Kiln Dust: U.S. EPA continues to consider comments on the management of cement kiln dust. More than ten years ago, on August 20, 1999, U.S. EPA issued a proposed rule (64 Fed. Reg. 45632), proposing an exemption from hazardous waste listing for properly managed cement kiln dust and several optional approaches, including requirements solely under Subtitle D. More recently, on July 25, 2002, U.S. EPA published notice of the availability of data on cement kiln dust (67 Fed. Reg. 48648). 

 

(3)     e-Manifest System: While there may be a broad consensus in support of a single national e-Manifest system sponsored by U.S. EPA as a compliant voluntary alternative to the current paper manifest form, the likelihood of a final rule establishing such a system in the near term does not seem very likely. As U.S. EPA states in the e-Agenda, the Agency’s “ability to publish a final rule in 2010 that will recognize e-Manifests…and to pursue this centralized e-Manifest design and funding solution, will depend on the passing of authorizing legislation for e-Manifest.”

 

 (4)    Removal of Saccharin and Its Salts from the Lists of Hazardous Constituents, Hazardous Wastes, and Hazardous Substances: The proposal to remove saccharin and its salts from the list of RCRA hazardous waste and CERCLA hazardous substances, published April 22, 2010 (75 Fed. Reg. 20942), responds to a petition by the Calorie Control Council to remove saccharin and its salts from the list of hazardous constituents in 40 CFR 261, Appendix VIII, unused commercial chemical products (identified as U202 hazardous waste) in §261.33(f), and CERCLA hazardous substances in 40 CFR §302.4. Based on a scientific consensus that saccharin was a potential human carcinogen, U.S. EPA listed them. However, recent evaluations of available data for saccharin and its salts by the U.S. National Toxicology Program and the International Agency for Research on Cancer have concluded that the scientific evidence does not support a conclusion that saccharin and its salts are potential human carcinogens. In addition, U.S. EPA does not believe that saccharin and its salts meet any other criteria for remaining on the lists of RCRA hazardous waste and CERCLA hazardous substances. Comments are due June 21, 2010. 

 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author, see here.

U.S. Chamber of Commerce and Department of Defense File Comments Regarding EPA Proposed Changes on Dioxin Levels in Soil

On May 9, 2009 EPA Administrator Lisa Jackson directed her staff to reassess the human health effects due to exposure to dioxin, which included the development of preliminary remediation goals (PRGs) for dioxin in soil. The EPA Office of Solid Waste and Emergency Response (OSWER) prepared a public review document titled “Draft Recommended Interim Preliminary Remediation Goals For Dioxin In Soil At CERCLA and RCRA Sites” dated December 2009. EPA followed up the draft PRGs document with notice of the proposed interim PRGs in the Federal Register¹.   Public comments regarding the proposed dioxin standards were accepted until February 26, 2010.

 

Both the U.S. Chamber of Commerce and the U.S. Department of Defense (DOD) have concern that many of the studies used to develop the Interim PRGs do not represent the most current science and urge the EPA to wait for completion of EPA’s dioxin reassessment before proposing revised dioxin limits. The issuance of Interim PRGs in June 2010 is scheduled to be superseded with final dioxin limits in December 2010. The U.S. Chamber of Commerce and the DOD express concerns regarding lowering dioxin limits in residential and commercial/industrial soil to concentrations below ambient levels in rural soils. DOD points out the urban concentrations of dioxins would be higher that ambient concentrations in rural soils.

 

The Interim PRGs have the potential to cause confusion with the regulators and the regulated community alike. Providing interim standards may result in reopening closed sites and include the possibility of revising those standards twice within the same year, depending on the findings for the final dioxin standards.

 

EPA’s current recommended PRG for CERCLA and RCRA sites, issued April 13, 1998, are 1 part per billion (ppb = 1,000 parts per trillion (ppt)) for dioxin toxicity equivalents (TEQs) in soils at residential sites. The recommended PRGs for dioxin in soil at commercial/industrial sites are 5 ppb and 20 ppb, respectively, where exposure is due to direct contact.   The revised proposed dioxin levels provided in the January 7, 2010 Federal Register would be lowered to 72 ppt for residential soils and 950 ppt for commercial/industrial soil. These proposed PRG concentrations are reportedly intended to protect against cancer effects at a risk level of affecting approximately 1 in 100,000 individuals, according to the EPA. The EPA also is considering a second alternative set of dioxin TEQ limits; 3.7 parts per ppt in residential soil and 17 ppt in commercial/industrial soil. This second set of PRGs reportedly is intended to protect against cancer effects at a risk level of affecting approximately 1 in 1,000,000 individuals, according to the EPA. EPA acknowledges that these lower concentrations may be below the average concentration of dioxin in rural U.S. soils.

 

The Interim PRGs are to be finalized in June of 2010. The limits are identified as Interim limits because EPA has yet to fully complete their reassessment of dioxin and plan to issue final remedial goals for dioxin in soil at the end of 2010. According to the U.S. Chamber of Commerce, the National Academy of Science (NAS) has been critical of “a number of key science and risk assessment positions taken by the EPA with respect to dioxin’s risk to humans”, based upon the last dioxin assessment issued by EPA in 2003. The NAS comments, and other comments, are to be addressed in the final dioxin assessment to be completed later this year.

 

This article was authored by William Chambers, Acacia Environmental Group LLC. For more information on the author see here.

 

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¹ Federal Register/Volume 75, No. 4/Thursday, January 7, 2010/page 984

EPA Identifies Additional Classes Of Facilities In Development Of Financial Responsibility Requirements Under CERCLA §108(b)

    Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) requires the President to promulgate requirements that classes of facilities establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment or disposal of hazardous substances. Section 108(b) requires the President to identify those classes for which requirements will be first developed and publish a notice in the Federal Register. This responsibility has been delegated to EPA for non-transportation related facilities. 

    On July 10, 2009, EPA Administrator, Lisa Jackson, signed such a notice identifying hardrock mining facilities. In its notice, EPA expressed the belief that classes of facilities outside the hardrock mining industry might also warrant financial responsibility requirements under Section 108(b). The notice identified classes of facilities which EPA intends to examine in the future including: hazardous waste generators, hazardous waste recyclers, metal finishers, wood treatment facilities and chemical manufacturers. EPA indicated that it would complete and publish in the Federal Register additional classes of facilities it plans to evaluate under Section 108(b) by December, 2009 and at that time would solicit public comment.  

    On January 6, 2010, EPA announced that it would be identifying classes of facilities within three industries – the Chemical Manufacturing industry (NAICS 325), the Petroleum and Coal Products Manufacturing industry (NAICS 324) and the Electric Power Generation, Transmission and Distribution industry (NAICS 2211) as those for which EPA plans to develop, as necessary, a proposed regulation identifying appropriate financial responsibility requirements. 

    EPA indicated that it would carefully examine specific activities, practices and processes involving hazardous substances at these facilities as well as Federal and State authorities, policies and practices to determine the risk posed by these classes of facilities and whether financial responsibility requirements would effectively reduce those risks. 

    In its July 2009 notice, EPA indicated that it would examine eight factors to determine the risk posed by particular classes of facilities. These factors are: (1) the amount of hazardous substances released into the environment; (2) toxicity of the substances; (3) existence and proximity of potential receptors; (4) contamination historically found from facilities; (5) whether the causes of this contamination still exist; (6) experiences from federal clean-up programs; (7) projected costs of federal clean-up programs; and (8) corporate structures and bankruptcy potential. In order to develop the list of facilities, EPA used information concerning sites on the National Priorities List ("NPL"), hazardous waste generation information from the Resource Conservation and Recovery Act ("RCRA") Biennial Report and data from the Toxic Release Inventory ("TRI"). 

    Examination of the NPL data revealed six industry sectors and one group of facilities on which EPA determined to focus further. These were (1) the Waste Management and Remediation Services industry; (2) the Chemical Manufacturing industry; (3) facilities engaged in recycling materials containing hazardous substances; (4) the Wood Product Manufacturing industry; (5) the Fabricated Metal Product Manufacturing industry; (6) the Electronics and Electrical Equipment Manufacturing industry; and (7) the Petroleum and Coal Products Manufacturing industry. Analysis of the RCRA Biennial Report data indicated that there are two industry sectors which generated the majority of hazardous waste -- the Chemical Manufacturing industry and the Petroleum and Coal Products Manufacturing industry which together with Hardrock Mining industry represent 80% of the RCRA hazardous waste generated by large quantity generators. 

    The TRI data was analyzed for 2007 and revealed two industry sectors identified in the NPL analysis were also among those reporting the largest quantities of on-site releases of hazardous substances – the Chemical Manufacturing industry and the Waste Management and Remediation Services industry.  

    The two industry sectors which according to EPA "emerged as clearly appropriate for consideration" were the Chemical Manufacturing industry and the Petroleum and Coal Products Manufacturing industry. In addition, EPA indicated that it was appropriate to identify classes of facilities within the Electric Power Generation, Transmission and Distribution industry for financial responsibility regulation. As to this latter sector, EPA noted that it ranked third in toxic release inventory analysis and that its low ranking in the RCRA Biennial Report analysis was the result of the "Bevill exempt" waste that the industry generated. In addition, EPA referenced the large release of coal ash from the Tennessee Valley Authority's Kingston Plant as a reason for including this sector.  

    In addition to the sectors mentioned above, EPA identified four additional sectors as requiring further study. These were Waste Management and Remediation Services industry; the Wood Products Manufacturing industry; the Fabricated Metal Product Manufacturing industry; and the Electronics and Electrical Equipment Manufacturing industry. In addition, EPA indicated that it would perform further study on an industry it identified as facilities engaged in recycling of materials containing CERCLA hazardous substances. 

This article was authored by James R. Snyder, Jackson Kelly PLLC. For more information on the author see here.

EPA Announces “Eyes on Drilling” Tip Line

On January 26, 2010, the EPA announced the creation of the “Eyes on Drilling” tip line. The tip line is intended for use by citizens to report non-emergency suspicious activity related to oil and natural gas development. According to the website given at the end of the press release to provide instructions about the tip line, the tip line is for the EPA’s Mid-Atlantic Region (Region 3) and to be used to report dumping and other illegal or suspicious hauling and/or disposal activities.  

According to the instructional website, the citizen informants are encouraged to record, to the extent possible, the location, date, time, and who was involved in the event, observations, activities, discharge destination, and environmental impacts. The website also suggests that photo and videos are great ways to document observations. A toll free number and email address was provided to contact the tip line.  

The EPA’s Mid-Atlantic Region includes the states of Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, and West Virginia. In EPA’s press release, the following rationale was provided to explain why the tip line was established. 

“Public concern about the environmental impacts of oil and natural gas drilling has increased in recent months, particularly regarding development of the Marcellus Shale formation where a significant amount of activity is occurring. While EPA doesn’t grant permits for oil and gas drilling operations, there are EPA regulations which may apply to the storage of petroleum products and drilling fluids. The agency is also very concerned about the proper disposal of waste products, and protecting air and water resources. 

EPA wants to get a better understanding of what people are experiencing and observing as a result of these drilling activities. The information collected may also be useful in investigating industry practices. 

The agency works closely with state and local officials, as well as industry and public interest groups, to ensure that oil and natural gas drilling occurs in a manner which is protective of human health and the environment and complies with applicable laws. The agency is also counting on concerned citizens to report unusual or suspicious activity related to drilling operations.” 

The instructional website can be found at the following web address: http://www.epa.gov/region03/marcellus_shale/tipline.html. 

This article includes publically available information, and was assembled by Rachel Shanteau, Acacia Environmental Group LLC. For more information on the author see here.

Kentucky Department for Natural Resources Unveils Spoil Handling Protocol

The Kentucky Department for Natural Resources (“KDNR”) recently released Reclamation Advisory Memorandum (“RAM”) #145 setting forth its newly developed Fill Placement Optimization Process (FPOP), a design protocol to minimize the impact on streams from mining operations while maintaining Approximate Original Contour (AOC). FPOP was developed by a group of engineers representing KDNR, the Army Corps of Engineers, the mining industry, a citizen’s group, and the federal Office of Surface Mining (OSM). They had been given the task of developing an engineering spoil handling protocol that meets the Surface Mining Control and Reclamation Act (SMCRA), AOC requirements and the alternatives analysis for minimizing stream impact required by the Clean Water Act. 

    According to KDNR, implementation of FPOP protocol will accomplish the following:

· Provide a process for achieving AOC while ensuring stability of backfill material and minimization of stream impact.

·     Determine a reasonable quantity of excess spoil that may be placed in excess spoil disposal sites such as valley fills and head of hollow fills.

·     Optimize the placement of spoil to reduce watershed impacts.

·     Provide a structured process for use in permit reviews and field inspections.

·     Maintain the flexibility necessary for the operator to address site-specific mining and reclamation conditions.

·     Establish a permit area tolerance linked to triggers, reducing over-permitting and consequently preserving stream impact minimization throughout the life of the mine. 

RAM #145 states that FPOP protocol shall be undertaken for all proposed steep slope surface coal mining applications.  Steep slope operations are defined in RAM #145 as all operations where the natural slopes exceed twenty (20) degrees.  However, RAM #145 exempts surface activities solely associated with underground mining or coal refuse facilities. In addition to requiring FPOP for steep slope operations, KDNR suggests that all coal applicants utilize the protocol, as it may facilitate the issuance of a corresponding 404 permit from the Army Corps of Engineers. 

A copy of RAM #145 may be obtained by visiting: http://www.minepermits.ky.gov/NR/rdonlyres/BA26E372-35CB-4124-A38E-AF5AB7388BA4/0/RAM145FINAL.pdf.  

This article was co-authored by Kevin McGuire and Mary Beth Naumann, Jackson Kelly PLLC. For more information on the authors see (McGuire) here and (Naumann) here. 

U.S EPA Region 3 Discusses Waste Issues At Annual WV Chamber Fly-In

On July 21, 2009, members of the West Virginia Chamber of Commerce (Chamber) met with U.S. Environmental Protection Agency (U.S. EPA) Region 3 staff in Philadelphia as part of the Chamber’s annual fly-in. Present for U.S. EPA Region 3 were, among others, Abraham Ferdas, Director of U.S. EPA Region 3 Land and Chemicals Division, and Kathryn Hodgkiss, Acting Director of U.S. EPA Region 3 Hazardous Site Cleanup Division. Highlights of the waste-related discussion are as follows: 

·        Memorandum of Agreement: The Chamber asked about the status of a possible Memorandum of Agreement (MOA) concerning West Virginia’s Voluntary Remediation Program between West Virginia and U.S. EPA and whether any such MOA would likely cover cleanups under the Resource Conservation and Recovery Act (RCRA) and the Toxic Substances Control Act (TSCA). Director Ferdas reported that U.S. EPA was “close to finalizing” the MOA between West Virginia and U.S. EPA. After more than ten years of negotiations, he promised that the “end is near,” by which he said he meant “before the new fiscal year” or “by September” 2009. He further stated that the MOA would be limited in scope to eligible response sites under Superfund and would not address sites under RCRA or TSCA. With respect to RCRA, he stated that while U.S. EPA had reauthorized West Virginia to administer the RCRA Corrective Action Program, the issue of groundwater leaving sites remains. He explained that PCB contamination was enforceable only under TSCA and therefore would not be covered any MOA. In addition to RCRA and TSCA, he explained that because the leaking underground storage tank (LUST) program is a state program, the MOA would not apply to it. 

·        Regulation of Coal Combustion Residuals: The Chamber inquired about the status of U.S. EPA’s review of the coal combustion fly-ash issues that have arisen since the Kingston, Tennessee spill in December 2008. William C. Earley, Acting Regional Administrator, stated that U.S. EPA is looking at options for regulating coal combustion by products. He stated that the agency wants to protect the beneficial uses of coal combustion by products. He also stated that agency is looking at fly-ash impoundments based on the following three categories: (1) structural integrity (Superfund); (2) enforcement (Clean Water Act); and (3) consequences if the impoundment fails similar to a risk management plan (Federal Emergency Management Act).

·        Definition of Solid Waste: Noting that U.S. EPA recently granted a petition to reconsider the Definition of Solid Waste Rule that was finally published in the Federal Register in October 2008 after twenty 20 years of rulemaking and litigation, the Chamber asked U.S. EPA Region 3 to explain the revisions of the DSW Rule that are anticipated. Director Ferdas responded that U.S. EPA had held a public meeting on June 30, 2009, and said that most of the comments focused on off-site management.  He stated that the issue is when the generator losses control of the wastes. He indicated he believed that the on-site provisions would likely survive the additional review. 

·        CERCLA “Arranger” Liability:   The Chamber asked whether U.S. EPA anticipated revising any formal policy, such as its policy concerning “arranger” liability, for example, in response to the U.S. Supreme Court’s decision in Burlington Northern v. U.S. Director Hodgkiss responded that the regulated community could anticipate “business as usual”. She explained that Burlington Northern involved unusual facts and therefore had limited potential applicability. She stated that the Court affirmed the principle of joint-and-several liability and held that U.S. EPA would have to prove intent to dispose to establish “arranger” liability, explaining that this analysis would be on a case-by-case basis and very fact intensive. She stated that U.S. EPA would continue to assign parties to do cleanups and would continue to pursue cost recovery if the parties did not do so. 

·        RCRA Corrective Action in West Virginia: The Chamber asked if U.S. EPA was focusing on any specific issues in the West Virginia Department of Environmental Protection Agency’s administration of the RCRA Corrective Action Program. Director Ferdas responded that U.S. EPA would continue to provide support to West Virginia. He noted that the WV DEP is organized so that permitting and remediation are handled by two different sections within WV DEP. Further, he noted that West Virginia may regulate only by permits while U.S. EPA may issue orders.  

·        Reopening of the PCB MegaRule: The Chamber indicated it understood that a notice of proposed rulemaking would be published in January 2010, reopening the PCB MegaRule, and that the existing use authorizations would be re-evaluated and possibly eliminated. The Chamber asked what approach U.S. EPA anticipated taking to evaluate the existing authorizations and possible elimination of authorized uses. For example, the Chamber asked whether U.S. EPA anticipates implementing a series of management practices for control, requiring a tiered replacement of equipment using PCBs, or possibly establishing new criteria for “PCB-contaminated” and “PCB-containing” that would mimic the current rule. Director Ferdas responded that in 2008 U.S. EPA had made a decision to transfer the cleanup of PCBs to OSWER. He further explained that under the court decision in Paralyzed Veterans, U.S. EPA is required to reopen the PCB MegaRule, stating that the Paralyzed Veterans’ decision stands for the proposition that if the agency has implemented a program one way then it cannot change how it implements the program without changing the regulations. Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579, 586, (D.C. Cir.1997) (“Once an agency gives its regulation an interpretation, it can only change that interpretation as it would formally modify the regulation itself: through the process of notice and comment rulemaking”). Director Ferdas added that changing the regulations can take a long time. 

·        Land Stewardship Trust: The Chamber asked whether there were any new developments within U.S. EPA regarding the establishment of Land Stewardship Trusts. In particular, the Chamber asked whether U.S. EPA is monitoring and/or encouraging estate efforts to track, register or inspect risk-based cleanup sites and if U.S. anticipates developing its own Land Stewardship Trust Program. Directors Ferdas and Hodgkiss responded that U.S. EPA has awarded a $100,000 grant to West Virginia to study and evaluate establishing a Land Stewardship Trust Program in connection with the West Virginia Voluntary Remediation Program. They also noted that such programs are very state-specific and that Pennsylvania, for example, has the Guardian Trust. For additional information on the July 21, 2009 meeting between U.S. EPA and the Chamber, contact Gale Lea Rubrecht at galelea@jacksonkelly.com or 304-340-1200. 

This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author see here.