Jump to Navigation

Prospects for Hazardous Waste and Chemicals Regulation During the Obama Administration’s Second Term

December 3, 2012

Compared with some other items on the Obama Administration’s second term agenda, hazardous waste and chemicals regulation is not as likely to be seen as an area of significant change. That’s a mistake. A number of issues are percolating at or just below the surface of the Administration’s regulatory priorities in this area that may bring significant change over the next four years.

Proposals for the Regulation of Coal Ash as a Hazardous Waste

In 2010, EPA first issued proposed alternatives for regulating coal combustion residuals (“CCRs,” commonly known as coal ash) from electrical power generation under the Resource Conservation and Recovery Act (“RCRA”). Under the first alternative EPA proposed to list these CCRs as special wastes subject to regulation under RCRA subtitle C when destined for disposal in landfills or surface impoundments. Under the second, EPA proposed to regulate these materials under subtitle D as non-hazardous solid waste.[1] Both options would provide that liners and ground water monitoring be in place at new landfills handling coal residuals in order to prevent leaching of contaminants to groundwater. The main differences involve implementation and enforcement.

The subtitle C option would require the development of state or federal permit programs, would allow for direct federal enforcement, and would include related storage, manifest, transport, and disposal requirements and mechanisms for corrective action and financial responsibility. The subtitle D option would go into effect sooner than a subtitle C rule, with implementation required approximately six months after promulgation. However, the subtitle D option would not require permit programs to be established, would not be federally enforceable (although citizen’s suits could be filed) and would not establish the same extensive management requirements for CCRs destined for disposal. As of May 2012, EPA had held eight public hearings and received more than 450,000 comments on these different proposed alternatives.[2]

EPA Administrator Lisa Jackson reportedly has stated in the past that EPA will issue a final rule before the end of 2012.[3] If so, it currently seems unlikely that the agency would go forward with the more stringent Subtitle C proposal. Opponents of that approach have argued that a hazardous waste designation under subtitle C could stigmatize coal ash and destroy its secondary markets.[4] About forty percent of coal ash is currently recycled and used in such things as cement and dry wall.[5] For that reason (among others), the Administration at this point seems more likely to pursue a subtitle D option that emphasizes enhanced disposal provisions while permitting coal ash to keep its solid waste status.[6]

Little Movement Expected on Wastes Generated in “Fracking” Operations

In January 2010, Interior Secretary Ken Salazar declared that big oil and natural gas companies would no longer be “the kings of the world,” as they were under the Bush administration.[7] Although this comment sparked debate over whether the Obama Administration aimed to change long-standing environmental exemptions for the energy industry, especially in the hydraulic fracturing context, exploration and production waste remain exempt from RCRA’s hazardous waste regulations.[8]

EPA has never studied whether the several million gallons of fracture solution injected underground might have hazardous characteristics sufficient to warrant regulation under RCRA,[9] and the Obama Administration can expect to face continued pressure from environmental groups to revisit whether certain types of exploration and production wastes should be regulated under Subtitle C of RCRA.[10] Nevertheless, while there been growing awareness and opposition to “fracking” activities, there have not been any obvious signs from the Administration that it will respond by revisiting these exemptions. This is not to say that the Administration will not regulate fracking in other ways,[11] but it seems unlikely that it will seek to do so by modifying or removing existing exemptions.

The Courts Continue to Shape Rules Governing Site Cleanups

Some commenters have urged that the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA,” or the federal Superfund statute), which went into effect in the 1980’s and has not been substantially amended since, is overdue for a comprehensive overhaul; however, other than a few initiatives focused on procedural matters, EPA has not signaled much interest in a more expansive regulatory update. Consequently, it seems likely that the courts will continue to play the primary role in shaping the rules governing the application of the law as a practical matter.

The U.S. Supreme Court’s decision in Burlington Northern and Santa Fe Railway Company v. United States (BNSF)[12] continues to exert a dominant influence in this context. Readers will recall that the BNSF decision had two elements: (1) it concluded that arranger liability under CERCLA hinges on intent to dispose of hazardous substances, and (2) it affirmed the view of several circuit courts that PRPs can avoid joint and several liability if a “reasonable basis” to apportion liability exists.[13] One recent case interpreting BNSF rejected the argument that “only an entity that enters into an arrangement with a transparently evident desire to have its hazardous substances enter the environment properly comes into § 9607(a)(3)’s purview.”[14] In United States v. General Electric Co.,[15] the court faced the question of whether General Electric could be held liable as a CERCLA arranger after it had sold another company its scrap insulating material for its use in making paint.[16] Applying BNSF,the court reasoned that divining the element of intent may necessarily implicate a fact-intensive inquiry.[17]

Elsewhere, in a recently argued case before the Ninth Circuit, appellees contend that an insurance company’s payment pursuant to an insurance policy does not constitute response costs under 42 U.S.C. 9607(a).[18] They also have argued that as a condition precedent for subrogation rights to accrue to an insurance company under 42 U.S.C. § 9612(c)(2), the insured must make a claim for reimbursement, because this clause specifically requires payment of a claim to a “claimant.” This case will have important implications as to whether insurance companies may assume the CERLCA rights of their insureds and under what circumstances CERCLA provides for a subrogation remedy. A decision is expected in this case in early 2013.

Changing Approaches to Federal Chemicals Regulation

A possibly substantial issue for the Administration’s second term could be the reform of federal chemicals regulation under the Toxic Substances Control Act (“TSCA”). TSCA has been on the books now, without significant amendment, for over 35 years, despite “widespread agreement that existing mechanisms for regulating chemical safety in the United States are woefully out of date.”[19] During that period, regulatory initiatives in other countries (such as the European Community’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemical Substances) and among the states (such as California’s Green Chemistry Initiative) have in many ways made TSCA look old and tired. EPA Administrator Lisa Jackson has stated that TSCA has “fallen behind the industry it’s supposed to regulate” and has “proven an inadequate tool for providing protection against chemical risks.”[20]

Because chemical manufacturers are not obligated to develop data on toxicity and exposure needed for EPA to assess the danger of their products, the TSCA scheme has limited its capacity to regulate the industry.[21] Even where EPA is able to compile adequate data regarding a potential risk, substantial procedural obstacles have impaired EPA’s ability to promulgate regulations.[22] Thus, EPA has only successfully issued regulations for five of the nearly 84,000 existing chemicals covered by TSCA.[23] EPA has measured the physicochemical properties for less than 1 percent of these 84,000 chemicals.[24]

President Obama’s reelection does improve the chances that reforms may be on the way, but questions remain. First, while industry and environmental groups alike may welcome some type of reform,[25] there is little agreement on what it should look like.[26] Even if a bill could pass in the Senate, it is entirely unclear if House Republicans would vote for any new environmental regulations. Certainly, if the House becomes “even more entrenched” along party lines, it is doubtful that any TSCA reform bill could be passed, at least not without substantial concessions.[27] Second, it is unclear whether TSCA reform will be a priority of the second Obama Administration. Given likely resistance in Congress, the survival of any TSCA bill may depend upon the Administration’s involvement in the process. If President Obama does not make TSCA a priority, it would be all the more difficult for a bill to reach his desk.

Since Sen. Frank R. Lautenberg (D-N.J.) first introduced a reform bill in 2005, Republicans and Democrats in Congress have divided over how best to balance the interests of industry, the environment, and human health.[28] Sen. Lautenberg largely agrees with EPA’s assessment of how TSCA reform should proceed, but has gained little traction in advancing a bill incorporating these principles.[29] Earlier this summer, Republican Sens. Inhofe, Vitter, Alexander, and Crapo joined the discussion on updating the TSCA.[30] However, these talks ended when Sen. Lautenberg chose to move forward on a bill not integrating the input of the Republican senators after talks broke down over what safety standard to advance.[31] Democrats then voted S. 847 out of the Senate Committee on Environment and Public Works on July 25, 2012 without any Republican support.[32]

Under the current TSCA scheme, EPA must show chemicals pose an “unreasonable risk” before it can restrict them, and then must use the least burdensome alternative to limit that chemical’s use.[33] The centerpiece of S. 847 is the inclusion of provisions that require companies to show their chemicals pose a “reasonable certainty of no harm.” The proposed rule therefore would flip the burden of proof, putting manufacturers in the position where they would be required to develop and submit data to show that chemicals are safe. Republicans deemed this proposed standard “overly burdensome” to industry.[34] Sen. David Vitter (R-LA), the ranking Republican on the environmental committee in the new Congress, responded to S. 847 by beginning work with industry groups to craft an alternative bill. What remains unclear is whether there is room to compromise between S. 847 and Vitter’s anticipated proposal, with environmental, health, and industry groups watching closely over the process.

Because the Democrats are still in the majority in the Senate and Sen. Vitter is active in pursuing an industry-friendly bill, TSCA will almost certainly remain a topic of discussion.[35] While Sens. Vitter and Lautenberg endorse different approaches, there may be common ground on certain aspects of reform.[36] Thus, Sen. Vitter has expressed hope that a bill focused “on a more limited segment of the chemical industry” may gain traction.[37] Whether Sen. Lautenberg will be willing to give up on a comprehensive bill in favor of a limited one is unknown.

While it is unclear whether this Congress will be able to come together on a new bill, TSCA is now a topic of discussion at all levels of the federal government. Industry, environmental, and human health groups should keep a close eye on TSCA reform efforts as the 113th Congress convenes.

Conclusion

While hazardous waste and chemicals regulation may not be at the top of the Obama Administration’s agenda, there is a substantial possibility we will see movement on multiple fronts. One thing experience teaches us is to expect the unexpected.

For more information on hazardous and solid waste regulation, please contact Kevin Haroff or any other member of Marten Law’s Waste Cleanup or Waste Management practice groups.

[1] Environmental Protection Agency, Coal Combustion Residuals - Proposed Rule.

[2] For further discussion of these proposals, see Environmental Groups Target Coal Ash Disposal, Marten Law Environmental News (May 2, 2012).

[3] See Erica Martinson, Greens see politics in EPA rule delays, Politico (Mar. 20, 2012).

[4] Ken Silverstein, Obama May Soften Proposed Crackdown On Coal Ash Disposal, Forbes (Nov. 19, 2012).

[5] Id.

[6] Id.

[7] Tom Doggett, U.S. overhauls oil, natural gas drilling policy, Reuters (Jan. 6, 2010).

[8] U.S. Gov’t Accountability Office, GAO-12-874, Unconventional Oil and Gas Development: Key Environmental and Public Health Requirements (2012).

[9] Hannah Wiseman, A Review of Some Oil and Gas Exemptions from Environmental Regulation, Environmental Law Prof Blog (May 6, 2011).

[10] Id.

[11] Energy Policy in the Second Obama Administration, Marten Law Environmental News (Nov. 27, 2012).

[12] 556 U.S. 599 (2009).

[13] See B. Marten, Has the BNSF Case Changed the Superfund Practice?, Marten Law Environmental News (Jan. 28, 2010).

[14] United States v. General Electric Co., 670 F.3d 377 (1st Cir. 2012).

[15] Id. at 384.

[16] Id. at 379-380.

[17] Id.

[18] Ford Motor Company, one of the appellees in this case, is represented by attorneys from Marten Law’s San Francisco office.

[19] Kevin Haroff, California Pursuing New Approach to Chemicals Regulation, Marten Law Environmental News (Sept. 13, 2012).

[20] Lisa Jackson, EPA Admin., Remarks to the Commonwealth Club of San Francisco (Sept. 29, 2009), available here.

[21] Id.

[22] Id.; See also EPA, SPARC Performs Automated Reasoning in Chemistry.

[23] Supra note20.

[24] EPA, SPARC Performs Automated Reasoning in Chemistry.

[25] Letter from Industry to Senators (Aug. 21, 2012), available here.

[26] Jenny Hopkinson, Uncertain TSCA Reform Prospects in Congress May Embolden EPA Action, InsideEPA (Nov. 8, 2012).

[27] Id.

[28] Supra note 19.

[29] Id.

[30] American Chemistry, 60+ business groups call on Senate to support fresh, bipartisan TSCA reform (Aug. 23, 2012).

[31] Supra note 26.

[32] Supra note 19.

[33] 15 U.S.C. § 2605(a).

[34] Supra note 26.

[35] Id.

[36] EPA, Essential Principles for Reform of Chemicals Management Legislation, last updated Jul. 17, 2012.

[37] Id.

This article is not a substitute for legal advice. Please consult with your legal counsel for specific advice and/or information. Read our complete legal disclaimer.