Donald Trump and his Administration’s Environmental and Energy Policy

01194576Now that we know we will have a Republican House, Senate, and President beginning in 2017, it is time to consider is what environmental and energy changes might take place during Donald Trump’s first term as President. I am neither supporting nor criticizing the possible actions that a Trump Presidency may entail. Instead, my goal is to lay out a possible roadmap of what may happen on the environmental and energy fronts during the next four years. I must also disclose that I have clients who may be affected adversely or positively by all of the matters discussed below.

Donald Trump’s website lists a number of goals that relate to energy:

  • Unleashing untapped shale, oil, and natural gas reserves;
  • Rescinding Obama executive actions;
  • Opening onshore and offshore leasing on federal lands; and
  • Rescinding moratoriums on coal leasing.

On the regulation front, Donald Trump’s environmental goals include:

  • Eliminating the Waters of the U.S. Rule; and
  • Scrapping the EPA Clean Power Plan

At various times Donald Trump has been quoted as wanting to:

  • Eliminate incentives for wind and solar power;
  • Eliminate the EPA;
  • Legalize the use of asbestos (Trump claims that asbestos is 100% safe, once applied and also claims that the rules against asbestos were led by the Mob, which runs asbestos removal)(I’ve never heard that one before);
  • Pull out of climate accords; and
  • Abolish the Renewable Fuel Standard (“RFS”) which supports the ethanol industry.

What will Donald Trump actually focus on and what are the low hanging fruit that he can grab?

Waters of the U.S. I think that the elimination of the Waters of the U.S. Rule will be a given. The proposed rule is extremely unpopular among the rural voters that delivered him to power. Rural senators and congressmen have likewise been among his most ardent supporters. Of course, the idea that the proposed rule is a real problem is something of a canard. The underlying law has never been clearly defined despite numerous U.S. Supreme Court decisions and the only way to solve the definitional question of what constitutes a “Waters of the U.S.” is to enact new legislation.  I view the chances of an elimination of the Waters of the U.S. Rule as 100%. I see the chance of a more effective definitional solution by Congress at 50%. I’d put the chances of legislation higher were it not for my belief that Congress will continue to show its inability to agree on anything other than recess dates.

Wind and Solar. Donald Trump may have to soften his antagonism against wind subsidies to get rural congressional support for legislative changes to the definition of “Waters of the U.S.”  I believe that there is only a small chance that existing  tax credits will be extended when they expire in 2020 during a Trump term unless there is a grand bargain with Midwest Senators. Solar power may well be the poor stepchild in this trade, though rapid reductions in the manufacturing costs of solar panels and batteries may allow solar to remain competitive regardless. I think that the utility industry has every reason to try to pass federal legislation similar to recent legislative efforts in Florida (failed) and Arizona (succeeded) aimed at preventing alleged “stranded costs” due to the private adoption of solar power.

Coal Mining. Resurrecting coal may be a case of too little too late. The biggest bar to coal mining is the Mine Safety and Health Administration on the extraction side, air emission standards for coal fired power plants (Maximum Achievable Control Technology “MACT” rules and Mercury and Air Toxics standards) on the combustion side and coal ash regulations on the disposal side. Without comprehensive new legislation it is unlikely that a President can have much success loosening the rules. Public interest attorneys will simply litigate any attempts at agency leniency. Changes to regulations on the combustion and disposal could make coal-based power more competitive with shale gas, but if President Trump has his way with the expansion of natural gas extraction then coal prices will be trying to meet a moving target. I think it is unlikely that a Trump Administration will be able to do much to resurrect the coal industry to its former strength. Competitively priced energy sources are just too abundant after eight years of incentives and expansion of natural gas production is likely to make new coal mining investment very challenging. 

Coal Fired Power Plants. Even if costly safety rules are relaxed and the cost of extracting coal goes down, it is also worth noting that it is practically too late to stop the shuttering of many coal fired power plants.  Two hundred and forty two plants have been retired or are being retired. Also, what do you do to create a level playing field for utilities that have already invested billions of dollars in upgrading the remaining newer plants? There could be modest improvements in utility costs through legislative changes, but it is hard to know what other special interests may get in the way of definitive legislative changes. That said, there is really little outside of a Senate minority standing in the way of passing some legislation attacking MACT and air toxics standards, so I give some changes to those laws a 25% chance of passage.  Those rules probably account for a majority of the spending by industry (either directly or through utility costs) that are related to environmental compliance (said to be $10 billion per year).

Clean Power Plan. Dead. 

Paris Climate Deal. Ignored for now and terminated in three years.

Unlocking Federal Lands. I think that there will be overwhelming support in Congress to force the federal agencies to make federal lands available for energy extraction. This will likely help fuel the boom in well construction, fracking, and pipeline construction in the U.S. I fully expect at least some statutory roadblocks to unlocking federal lands for energy exploitation to be removed with heavy support from the western governors and senators. 

Even if Donald Trump stalls out in his effort to enact a legislative agenda, Presidents wield enourmous power if they want to expand or contract agency action. They can starve agencies of employees and funds and slow walk regulatory changes or aggressively enforce even minor alleged violations or rewrite rules to the extreme limits (or past) what the legislative drafters intended. It is also quite likely that we will see unforeseen fractures in the political landscape as new allies are formed and old alliances are torn apart.

James L. Pray

James Pray has more than thirty years of experience assisting industry with environmental compliance issues, including industrial and municipal wastewater permitting, air permitting, RCRA and Superfund cleanups, brownfields development, wetlands, contaminated site cleanups, infrastructure development, renewable fuels, and wind and solar power development, regulation and construction.  He is a frequent speaker on environmental topics and has litigated environmental and energy issues in the Federal and State courts of Iowa, the Iowa Supreme Court, and the Federal Courts of Appeals.

Attorney, Brown Winick Law Firm
666 Grand Ave. Suite 2000
Des Moines, Iowa 50131

Note that this article does not necessarily represent the opinions or positions of Brown Winick Law Firm and only represents the speculation and opinions of the author.


Citations:
http://www.ontheissues.org/2016/Donald_Trump_Environment.htm
https://www.donaldjtrump.com/policies/regulations/
https://www.donaldjtrump.com/policies/energy/
http://content.sierraclub.org/coal/victories
http://thehill.com/policy/energy-environment/296192-fact-sheet-confuses-trump-position-on-ethanol

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EPA’s New Kafkaesque Self-Disclosure Website

doorchainYou want to file something with the EPA. But in order to file it, you must first be registered with the EPA.  Can’t figure out how to get registered? No problem, enter your user name and password on the form and you will be allowed to see the instructions! What? You don’t have a user name and password already because you are not registered yet? Welcome to the EPA’s new CDX Self-Disclosure Policy website.

Many companies have utilized the EPA’s self-disclosure policy. This policy encourages companies to voluntarily self-disclose violations that they find during audits and under certain other circumstances. The system has worked for many years. However, on December 9, 2015, the EPA scrapped the old program and replaced it with a centralized web-based “eDisclosure” portal to “automatically process self-disclosed civil violations of environmental law.”  If attorneys and compliance professionals are not aware of this change and mail in their usual disclosure then they run a risk of missing the short 21-day disclosure deadline and being subject to the full weight of EPA’s penalty fury.

The barriers erected by the EPA to make it as difficult as possible to actually file a self-disclosure are immense.  Here are some steps that the EPA has taken:

  1. Require everyone to register through the EPA’s CDX Central Data Exchange. This is a classic federal system with the usual security protocols that make it take 10 times longer to do anything — great if you are getting paid by the government, but terrible if you are billing your poor client by the hour.
  2. Hide all registration question FAQs so that only those people who have already registered can see the FAQs. That is right. You need to already be registered before you can find the directions on how to get registered. Don’t have a user name and password in the system? Call the help line during regular office hours and have the contractor send you the information. The EPA did call me and tell me that a separate website does have training and background information. http://www.epa.gov/compliance/epas-edisclosure
  3. Require a user name in order to begin the registration. It turns out that you can pick any name you want, though “EPASucks” was already taken. My compliant is that the website does not tell you that you can pick your own name. I had to lose almost one day waiting for the help desk to call me back with the answer to that question.
  4. Require that your identity be verified by Lexis/Nexis. I flunked this test on the first try, so I started all over again and for some reason was verified. If you cannot be verified, then you have to fill out a form where you promise the EPA that you are who you say you are and then mail it in. If that is your situation, note that you can continue with the self-disclosure process. You will have to keep in mind that you need to get your identify verified before the next deadline, which is compliance.
  5. Have the shortest inactivity time out clock I’ve ever seen (five minutes). Here I am, trying to fill out a long complicated form, and everytime I went back to the form to click another box I found that the timer had expired and all of my previous work was gone! That is extremely frustrating. I’m sure that this is a feature of the CDX system that EPA won’t change. But I should not have to click on the site every five minutes in order to keep it active.
  6. There is no way to add any information regarding the alleged violation when you first file. Only after you file your disclosure are you allowed to provide some information regarding the circumstances.
  7. There is no way to upload any documents when you first file the disclosure.  Their website says you can, but the option did not appear until after the disclosure is made.

doorchain

James Pray

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EPA releases video of the Animas River Disaster.

00969979An interesting video montage of the Animas River disaster. The first half is the EPA’s explanation of how they created this problem. The second half is the actual creation of the disaster filmed while it happened.

EPA’s data dump of videos:

http://www2.epa.gov/goldkingmine/gold-king-mine-videos

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The EPA’s Epic Animas River Spill

00957918The August 5, 2015 Gold King Mine spill by the EPA created what has to be some of the most epic visuals in environmental history. That this spill was done by the EPA (or its contractor) is probably beyond belief by most citizens. After all, the EPA is supposed to clean things up, not make them worse. But beyond the cause of the accidental spill, the EPA’s lack of clarity in its disclosure to the public is also beyond belief. You can scour the EPA’s website on this disaster, and there is no yellow water to be seen. Just crystal clear mountain water. Of course, that water was anything but crystal clear when it charged down the hill and into the Animas river. Test results by the EPA disclose toxic levels of copper, arsenic, and antimony, to name but a few of the compounds. What is also interesting is that if you go to the EPA’s page with a summary of test results, they omit arsenic and antimony from their charts.  I understand that the EPA’s goal in the document linked below is not to disclose the actual threat posed by the contaminates but to explain that the levels have returned to their previous levels before the “blowout.”

Example of EPA test results.

The frequently asked questions page posted by the EPA downplays any real effect on the river or aquatic life.  Of course, if this yellow water was safe, then why was the EPA poking around the mine to begin with?

There are two additional issues that the EPA needs to address. First, there is the claim that the EPA waited a whole day before notifying downstream residents that the water was contaminated. If true, that is unforgivable.

Second, there is the question of financial responsibility. It is unlikely that the contractor that is reported as having actually caused the spill (Environmental Restoration, L.L.C. by some accounts) has enough insurance coverage to cover this claim. Some reports, probably sensationalist,  peg the cleanup in the billions.  I have information to lead me to believe that the contractor has at most $7M in total coverage. That may seem like a lot, but when the EPA conducts a removal action, its costs are usually astronomical, and several times higher than what a typical contractor would charge. I know that if one of my clients caused a spill of this magnitude the Justice Department would be all over this with indictments and subpoenas. Unless the individual states take action, I doubt that we will see the same level of concern or urgency by the Federal government that I see displayed when my own clients re accused of violating a law or permit. Who is to blame here? I have personally watched the EPA work with this particular contractor on a cleanup and I can assure you that Environmental Restoration L.L.C. does not do anything that the EPA project manager does not tell them to do.

 

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Supreme Court puts the brakes on the EPA’s Power Plant MACT rule in Michigan v. EPA

epalogo (00822922x9F897)The Clean Air Act that we know today was passed in 1970 during the Nixon administration. Since that time, the EPA has been hard at work passing regulations aimed at cleaning the nation’s air. Its efforts have been extremely successful. I recall living in the D.C. area in the early 1970s before most of those regulations really took effect and the air was so polluted that on some days you could see the smog just looking across the street. I can’t describe what it was like as a kid in a car while going through Newark in the 60s on the elevated turnpike and going straight through huge clouds of sulfur dioxide and other hazardous air pollutants being belched by smokestacks next to the turnpike.  I doubt that kids growing up today have any understanding how clean the air is now.

One problem, however, is that the Clean Air Act really does not have any brakes. The EPA continues to look for any potential effect on human health and passes regulations requiring that the emissions be eliminated, in some cases, even though the cost far outweighs the benefits. Today the United States Supreme Court dealt a rather stunning blow to the EPA’s rulemaking authority in its June 29, 2014 decision in Michigan v. EPA. At issue was whether the EPA had to consider the economic impact of its hazardous air pollutants (“HAP”) emission standard for mercury emitted by electric power plants. The EPA regulates HAPs for stationary sources. A source that emits more than 10 tons of a single HAP or 25 tons of HAPs in combination is a major source. Power plants are also required to meet additional requirements. One of those requirements directed the EPA to perform a study of the hazards to the public health reasonably anticipated to occur as a result of power plant emissions of HAPs. The rule at 42 USC § 7412(n)(1)(A) also provides that if the EPA finds that regulation is “appropriate and necessary” after considering the results of the study then it shall regulate the power plants.

Justice Scalia focused on the “appropriate and necessary” language and held that this means that the EPA must consider the economic impact before imposing certain new emission standards on power plants.  The EPA’s own regulatory impact analysis estimated that the cost of the new standard would be about $9.6 billion per year. I know that this is a laughably ridiculous underestimation of the actual economic costs. Even so, the benefit was estimated by the EPA to be no more than $6 million per year. Again, this is probably a gross overestimate by the EPA. Justice Scalia noted that using these figures the costs exceeded the benefits by at least 1,600 times.

A majority of the court agreed with Justice Scalia’s conclusion that the EPA is directed to engage in some sort of economic analysis before imposing the new standard on power plants.

What is the importance of the case? First, it may have application to other areas of air pollution regulation outside of HAPs for power plants. The majority opinion’s broad conclusion that the “appropriate and necessary” language sends a clear signal that attorneys should consider the fact that the Supreme Court is willing to read into the Clean Air Act requirements that the EPA act reasonably.  Second, the decision was reached after the EPA published the rule in 2012 after notice and comment. Challenging an EPA rule is a complicated process that actually starts at the Circuit Court level. It can be difficult to raise a challenge after the appeal period has expired.  In other words, this law may have more prospective effect on the EPA than retroactive effect. Third, it may be too late. Utilities have already shuttered plants based, in part, on the difficulty in retrofitting those plants with the necessary emission controls for mercury.

Copy of Supreme Court decision: HERE

James L. Pray

SupremeCourt (00924595x9F897)

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Wikileaks: Environmental Implications of the TPP

Despite the Administration’s best efforts to keep the details of the Trans-Pacific Partnership secret, Wikileaks obtained and published several sections of the document several months ago. Because it now appears that the TPP will likely get passed into law, it is worth speculating about its potential implications in the field of environmental law.

In its press release trumpeting the release of a copy of the Investment section of the TPP, Wikileaks focuses on  what it calls “an unaccountable supranational court for multinationals to sue states.”  By signing the deal, the U.S. would agree to submit itself to the jurisdiction of this tribunal. Interestingly, Australia is listed in a footnote to the section as refusing to submit to the jurisdiction of the tribunal. Wikileaks goes on to report that this tribunal, which is called an “investor-state dispute settlement (ISDS) tribunal” overrides national court systems and that the ISDS tribunals introduce a mechanism by which a multinational corporation can force governments to pay those corporations. Australia lost a case filed against it by Philip Morris for tobacco packaging laws, which is one reason Australia may be bowing out of this section.

I reviewed the provisions and it does appear that the language says what Wikileaks says it says, though without the spin. There is a new tribunal that is set up. The legal process, though ponderous, is remarkably free of any reference to either the common or civil law. The arbitrators appear to be free to examine the dispute on their own terms, unhindered by precedent.

For lawyers (and especially environmental lawyers), passage of this section of TPP by the United States would certainly be interesting. Keep in mind that multinational corporations are not necessarily “American” and with the flight of companies to Ireland and other countries many are no longer as “American” as we may assume. Instead, any regulations that affected Sinopec, China Mobile, Roche, and other companies you may never heard of could seek compensation and other relief from the U.S.

Note that this leaked version may not bear any similarity to the version currently being considered.

You can download a copy here: Wikileaks Draft of TPP Investment Chapter

James Pray

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Shipping chemical samples or small quantities? OSHA has a special plan for you.

BRAINLESSHere is a really dumb rule. OSHA has a rule at 29 CFR § 1910.1200 that requires that all containers of hazardous chemicals comply with the “United Nations Globally Harmonized System of Classification and Labeling of Chemicals, Revision 3”, if that container will be in a workplace.  This OSHA rule is still being rolled out, but as of June 1, 2015 all chemical manufacturers, importers, distributors are subject to the rule except that distributors may follow the previous system until December of 2015. After June 1, 2016 all employers will be subject to all aspects of the rule. Training was supposed to be undertaken by December 1, 2013. If the MSDS sheets need to be included, the new labels can run many, many pages of fine print. The new rule is estimated by OSHA to cost $201 million every year. That means that after ten years industry, will pour 2 billion dollars into affixing gigantic labels on bottles and containers.  OSHA claims that 40 plus lives will be saved per year because we all know that booklets written in 8 point type are compelling reading by workers and they will actually read and understand warnings such as:

It is also interesting that the warning level system has been reversed. So a 1 is now bad where as before it was good. Silly me for thinking that this single change will probably kill more workers than the rule is designed to save. And why do that? Because that is how they do it in Italy and Slovenia. This reminds me of a client of mine that was bought be a Japanese conglomerate. One of the first things that they wanted the plant to do was to change all of the red warning buttons to green. All because that is how they do it in Japan. Sure, reverse a lifetime of warning labels so that it we match the United Nations standard — because we send our workers to work all over the world.

ampoule

But the most perplexing aspect of this new regulation is the inflexibility of OSHA when asked if it is really necessary to attach giant labels to chemical ampules the size of a thimble. In a letter dated June 4, 2013, OSHA responded to a letter from the National Institute of Standards and Technology that had asked if an exception could be made for the labeling requirements for the tiny vials or ampoules that the Institute sends to labs as standard reference materials. OSHA responded by stating that: “Ampoules/bottles of the hazardous chemical must be labeled with the hazard information required by HCS 2012.” As a “practical accommodation,” OSHA offered to allow a smaller label with only five sets of statements and pictograms, as long as the ampoules were placed into a larger container that contained the entire warning, including a warning that the “small container must be stored in the outer container bearing the complete label.” Practically, this means that a tiny ampoule holding not much more liquid than the tears running from a crying politician’s cheek must be placed into yet another container with strict instructions that the small container never be removed from the larger container.

Here is the link to the crazy

letter: OSHA Standard Interpretation 1910.1200

This is absolutely insane. And this was one federal government agency providing direction to another federal agency.

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