Editor’s note – Robert T. Vogler is director of environmental affairs at Valley Proteins Inc. and chairman of the National Renderers Association’s Environmental Committee. He holds a juris doctor degree from Duquesne University and bachelor of science degrees in agricultural engineering and agricultural science from Rutgers University.
Looking at the volume and cost of environmental regulations compared to those of other federal agencies clearly confirms the expanding regulatory scope of the federal government in environmental regulation. A recent report by the U.S. Chamber of Commerce, titled Taming the Administrative State, notes that in 2015, the United States (US) Code of Federal Regulations (CFR) contained over 175,000 pages of environmental regulations that accounted for 25 percent of the CFR, far more than any other area of government.
When costs of the regulatory burden are examined, the message is even clearer. Between 2008 and 2016, the US Environmental Protection Agency (EPA) issued 13 of the 28 rules that had an annual price tag of $1 billion or more. Those rules alone impose yearly costs of over $60 billion, dwarfing such rules by other executive branch regulatory agencies.
Since the onset of President Donald Trump’s administra-tion, there have been many developments affecting the environmental regulatory landscape at the federal level, from executive orders to congressional action to agency review of recent rulemaking. This article will address some of the more significant developments of interest to the rendering industry.
Sending a Message
In one of the earliest acts of his presidency, Trump signed the “one-in-two-out” executive order on January 30, 2017, requiring each agency to identify two regulations it will cut for every new rule it introduces. The order also caps the regulatory budget at zero, such that savings shall be identified to offset the cost of any new regulations. This order sends a message to federal agencies regarding the hostility of the new administration toward imposing additional regulatory burdens.
In a related executive order, federal agencies were directed to establish a regulatory reform task force to identify existing regulations that, among other things, eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; or impose costs that exceed benefits. EPA published a notice in April requesting comments on specific regulations that should be repealed, replaced, or modified.
Under the new administration, Congress has used the Congressional Review Act (CRA) to nullify 11 regulations previously issued by regulatory agencies. The CRA was a little-used law passed in 1996 intended to address midnight rulemaking by outgoing administrations. The CRA allows Congress, by simple majority vote, to override regulations published within 60 legislative days of a new administration, and perhaps further back in time if proper notice of the rulemaking was not given to Congress. By one count, there are at least 43 major rules that were never properly reported to Congress and at least 1,000 other agency actions each year that potentially could be challenged, many of which are in the environmental sphere. Once overruled, the agency is essentially forbidden from readopting a new rule that is substantially similar. The use of the CRA is largely new territory and is seen by some as a significant tool that could be used to undo many of the regulations imposed during President Barack Obama’s administration.
New EPA Direction
On February 17, 2017, Scott Pruitt, former attorney general for Oklahoma, was confirmed as EPA administrator. As attorney general, Pruitt challenged EPA’s Clean Power Plan for cutting carbon emissions from power plants, along with the “waters of the US” (WOTUS) rule expanding federal jurisdiction over additional waters and adjacent upland areas. He also joined in a lawsuit challenging EPA’s authority to impose on the states a regional plan to clean up the Chesapeake Bay.
As an outspoken advocate for a limited role by EPA under principals of federalism, Pruitt is expected to take steps to reduce EPA’s influence and to enhance the role of the states in environmental protection matters. Among the major changes anticipated during Pruitt’s tenure at EPA are efforts to unwind the Clean Power Plan and pull back from meeting greenhouse gas reduction commitments under the Paris Agreement, rolling back the WOTUS regulation, and significant reductions in EPA staffing levels.
The fiscal year 2018 federal budget proposed by Trump called for a 31 percent reduction in EPA’s budget and targeted cuts in funding for Great Lakes restoration, nonpoint source reductions, climate change, and Chesapeake Bay cleanup. The proposed budget is often seen as more of a message board than reflective of the actual budget ultimately adopted by Congress. The omnibus spending package agreed to in May by Congress to fund the federal government through September leaves EPA funding largely intact.
Cutting the budget does not mean the obligation to implement programs to comply with existing environmental laws and regulations goes away. For instance, cuts in the budget do not change the timeline for meeting pollution reduction targets under the Chesapeake Bay Blueprint, a plan that has been validated by the courts. Deep cuts in many areas of EPA’s budget, such as Chesapeake Bay cleanup, with the thought of delegating back to the states, could be seen as an offloading of costs from the federal budget back to the states.
Waters of the US Rule
In 2015, EPA finalized rules revising the definition of “waters of the US” to greatly expand the agency’s jurisdiction over activities in wetlands, intermittent streams, drainage ditches, and upland areas. This was purported to clarify the scope of federal jurisdiction over upland and isolated waterways, but was widely seen as a huge power grab by EPA and the Army Corps of Engineers.
A nationwide stay on enforcement was issued in October 2016 and the US Supreme Court later agreed to hear the case to determine whether challenges such as this should be brought in federal district courts or federal courts of appeal. On April 1, 2017, the Supreme Court denied a request to hold this case in abeyance pending the federal regulatory review and will proceed in addressing the question as to the proper court in which to bring such challenges, an important determination for the regulated community.
Meanwhile, on February 28, 2017, Trump ordered EPA to review the WOTUS rule with a view toward regulating the water quality of a more narrowly defined “navigable waters” while minimizing federal regulation and interference with the states. EPA has announced plans for “repeal and replace” rulemaking to begin.
In 2015, EPA adopted a new National Ambient Air Quality Standard (NAAQS) for ground-level ozone, lowering the standard from 75 parts per billion (ppb) to 70 ppb, a level that will put a large portion of the expanding, robust economic areas in the country into nonattainment. The nonattainment designations are slated to be published in October 2017 after which the affected states will be required to adopt new plans that will largely target stack emissions of volatile organic compounds and nitrous oxides. Nonattainment areas include metro areas in Arizona, California, Louisiana, Michigan, Ohio, Oklahoma, Pennsylvania, New Mexico, New York, North Carolina, Texas, Virginia, and others. EPA is reviewing the rule while a lawsuit in the US Court of Appeals for the District of Columbia Circuit (DC Circuit) challenging the rule has been suspended pending completion of EPA’s review.
In 2016, a bill was passed by the US House of Representatives (HR 4775) to extend implementation deadlines, including nonattainment designations, to 2025 and change the review cycle from 5 years to 10 years. The same bill, Ozone Standards Implementation Act, was introduced in the new Congress on February 1, 2017, as Senate 263/HR 806. As part of the omnibus spending package signed into law on May 5, EPA was directed to examine options for flexibility in the implementation of the 2008 and 2015 ozone standards.
Startup, Shutdown, Malfunction Rule
In 2015, EPA ordered 36 states to rewrite certain rules that allowed for waiving of penalties for excess emissions during startups, shutdowns, and malfunctions. On April 24, 2017, the agency filed a motion to postpone oral arguments in a federal court case challenging this rule in order to allow EPA more time to further review the matter.
Clean Power Plan
EPA’s Clean Power Plan was put in place under the Obama administration targeting reductions of emissions of carbon dioxide (CO2) from existing coal-fired power plants by 32 percent and essentially banning the building of new coal-fired power plants. On February 9, 2016, the US Supreme Court granted a nationwide stay of implementation of the plan pending judicial review of its validity. The case remains pending in the DC Circuit. On March 28, 2017, Trump ordered EPA to review the plan. On April 28, the court granted EPA’s motion to suspend the lawsuit for 60 days and agreed to consider further disposition.
It could take years to unravel this plan, whether by rulemaking or through the courts. Nonetheless, this move raises the question as to what steps, if any, the Trump administration plans to take to comply with the commitment to reductions in CO2 made at the 2015 United Nations Climate Change Conference in Paris, France. So far, the Trump administration has not signaled a clear intent on further commitment to the Paris Agreement’s reductions in CO2.
It is important to note that while Trump refers to this as an end to the war on coal, technological changes and the economic forces favoring the production of natural gas are likely to limit the recovery of coal production for power generation in the United States.
Some observers in Washington, DC, predict that with the Republicans in control of Congress there will be an initiative to rein in the influence of the Endangered Species Act. The act is seen by many as a tool used by wildlife advocates to block economic development, including the halting of logging projects, impeding of oil and gas development, and reallocation of water in the West. US House of Representatives Natural Resources Committee Chairman Rob Bishop said the act “has never been used for the rehabilitation of species. It’s been used for control of the land…it has been hijacked.” Some changes under consideration could result in making it harder to list new species, capping how many species can be protected, and allowing greater input by the states.
Currently, over 1,600 plants and animals are protected under the act with hundreds more under consideration. Less than 70 have recovered to the point of having protections lifted. On March 21, 2017, the rusty patched bumble bee became the latest to be listed by the US Fish and Wildlife Service, even though there is a lack of consensus that its decline is due to habitat loss. This species has a habitat range across 28 states.
Risk Management Program Rule
EPA submitted a final rule for publication in the Federal Register on December 21, 2016, affecting risk management programs, which are required at facilities that have certain quantities of hazardous materials onsite, such as ammonia refrigerant. Among other things, the revisions would require a root-cause analysis investigation after “near miss” incidents that could have resulted in a catastrophic release, third-party compliance audits after a reportable incident, annual exercises and coordination with local responders, and greater public disclosure about the facility’s emergency response program.
On April 3, 2017, EPA proposed delaying the effective date of the revisions to 2019 in order to “consider petitions for reconsideration of this final rule.” Measures have been introduced in both the US House and Senate for repeal of this rule under the CRA.
June 2017 RENDER | back