The Future of the Clean Power Plan as US EPA’s Proposed Repeal Looms

On October 16, 2017, US EPA, under Administrator Scott Pruitt, proposed the repeal of the Clean Power Plan (CPP), and the Agency is accepting comments on the repeal until April 26, 2018. Following a review of the statute’s language, surrounding policy, and legislative history, US EPA proposed to “return to a reading of CAA section 111(a)(1) … as being limited to emission reduction measures that can be applied to or at an individual stationary source.” US EPA characterized the CPP as relying on measures unable to be applied to a single source. The effect, according to the Agency, is that the CPP relies on “actions taken across the electric grid, rather than actions taken at and applied to individual units.” The practical implications are that coal-fired units under the CPP would face a decision to switch to gas-fired units or renewable energy sources.

The impetus for the proposed repeal stems from Executive Order 13783 signed by President Trump on March 28, 2017. The Order calls for agencies to “immediately review existing regulations that potentially burden the development or use of domestically produced energy resources,” including the CPP. Specifically, the Order directs the US EPA Administrator to “immediately take all steps necessary to review the final rules set forth in subsection (b)(i) and (b)(ii) of this section [the Clean Power Plan]….and, if appropriate…as soon as practicable, suspend, revise, or rescind the guidance, or publish for notice and comment proposed rules.” On December 15, 2017, US EPA publicly released a timeline for the rule repealing the CPP, with a target deadline of October 2018.

Recently, however, US EPA expressed a willingness to consider a replacement to the CPP if the repeal moves forward, publishing an Advanced Notice of Proposed Rulemaking  (ANPRM) on December 28, 2017. In the notice, US EPA requested comments on “what the EPA should include in a potential new existing source regulation under CAA section 111(d).” In particular, the Agency focused on determination of the Best System of Emission Reduction (BSER), the application of GHG emission limits to a source-specific level, the role of state regulatory agencies, and interactions between the New Source Review (NSR) program and potential GHG emission guidelines. In its request for comments, the Agency expressly directed that submitters should assume the interpretation of CAA section 111(a)(1) means limited to emission reduction measures “applied to or at a stationary source, at a source-specific level.” The focus on source-specific levels for GHG emission limits indicates an approach within the fenceline, and the Agency specifically cited North Carolina’s draft plan as an example of such unit-level emission standards. The comment period for the ANPRM is open until February 26, 2018. Continue Reading

US EPA’s Renewable Fuel Standard Volumes for 2018 Unsatisfactory to Many

On November 30, 2017, US EPA issued the final volume requirements and associated percentage standards for its renewable fuel standards (RFS) program for calendar year 2018, as well as the biomass-based diesel volume requirement for 2019. The annual volumes establish quotas for how much renewable fuel must be added to gasoline and diesel in order to, over time, replace or reduce the overall use of petroleum-based fuel. The final volumes for 2018 represent little change from the volume requirements adopted in 2017.

That the US EPA largely maintained 2017 levels was viewed by some as a success for the renewable fuel industry, as the new administration seriously considered reducing biofuel quotas. In fact, a proposed rule published in July 2017 relied on US EPA’s statutory waiver authority to set 2018 requirements below the statutory minimum and lower than those for 2017.

Although US EPA did not lower volume requirements, leaders in the renewable fuel industry complained that keeping the quotas flat will harm the industry. Daniel Whitehead, Chief Operating Officer of the National Biodiesel Board, explained:

EPA Administrator Pruitt has disappointed the biodiesel industry for failing to respond to our repeated calls for growth. These flat volumes will harm Americans across several job-creating sectors—be they farmers, grease collectors, crushers, biodiesel producers or truckers—as well as consumers. . . . We’ll continue to work with the administration to right this wrong for future volumes.

Also dissatisfied with the final RFS volumes, Iowa Governor Kim Reynolds stated, by not raising the RFS levels, “the EPA is discouraging investment and discouraging growth. That’s the opposite of what the Renewable Fuel Standard is designed to achieve.”

The petroleum industry was similarly disappointed by the RFS volumes, and US EPA’s failure to repair a failed program. CEO of the American Fuel & Petrochemical Manufacturers, Chet Thompson, responded to the announcement of the 2018 quotas, saying EPA “bow[ed] the knee to King Corn.” He explained, “We think this action is bad for U.S. manufacturing and American consumers and encourages Congress to finally fix the RFS.”

Both sides of the renewable fuel debate are displeased with US EPA’s decision to keep RFS volumes flat. However, the 2018 volumes give no indication regarding US EPA’s future plans for the RFS program.  Next year’s volumes for 2019 may show whether US EPA will keep volumes static long term or move forward with another proposal to reduce quotas.

Legal Challenges Ahead After President Trump Reduces Utah National Monuments

On December 4, 2017, President Trump issued two Presidential Proclamations reducing the size of Bears Ears and Grand Staircase-Escalante National Monuments by more than 800,000 acres and 1.1 million acres, respectively.  Bears Ears and Grand Staircase-Escalante National Monuments had been previously created by Presidents Obama and Clinton pursuant to the Antiquities Act of 1906.  The announcement by the Trump Administration to scale-back those designations is already being challenged in court, as land conservation groups dispute whether the President has authority under the Antiquities Act to modify or reduce the scope of previously designated national monuments.

The Antiquities Act authorizes the President, in his discretion, to “declare by public proclamation historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest that are situated on land owned or controlled by the Federal Government to be national monuments.”  The Act also provides that the President “may reserve parcels of land as a part of the national monuments. The limits of the parcels shall be confined to the smallest area compatible with the proper care and management of the objects to be protected.”  As previously discussed on this blog, the central question to be litigated is whether the Antiquities Act’s delegation of authority from Congress to the president to create national monuments also includes the power to abolish or modify previously created national monuments.

On its face, the Act contains no explicit authorization to modify an existing monument.  Therefore, land conservation groups and other opponents will argue that President Trump’s proclamations are invalid because he lacks express authority for them.  It is anticipated that the Trump Administration will argue that it has implied authority to modify an existing monument to comply with the Act’s instruction that national monuments “shall be confined to the smallest area compatible with the proper care and management of the objects to be protected.”

The legal battle to define the president’s authority under the Antiquities Act could have far-reaching implications for federal land management throughout the United States. Interior Secretary Ryan Zinke recently conducted a review of approximately a dozen national monuments and could recommend further modifications to those monuments depending on the outcome of the litigation related to Bears Ears and Grand Staircase-Escalante.

For now, President Trump’s decision to reduce Bears Ears and Grand Staircase-Escalante fulfills a campaign promise and restores large portions of Utah to multiple use management.  According to the Presidential Proclamations, public lands removed from Bears Ears and Grand Staircase-Escalante shall be made open to entry, location, and disposition under applicable mining, mineral and geothermal laws starting on February 2, 2018, subject to existing rights and other applicable laws.

New US EPA Memorandum Suggests a Hand’s-Off Approach to NSR Applicability Determinations

On December 7, 2017, US EPA Administrator Scott Pruitt issued a memorandum to all Regional Administrators to offer guidance regarding the Agency’s interpretation of New Source Review (NSR) preconstruction permitting requirements in response to recent decisions from the Sixth Circuit in EPA v. DTE Energy Co.  Highlighting the lack of unanimity among the individual Sixth Circuit judges and the ambiguity left by the decisions, the Administrator’s memo seeks to “explain to stakeholders how EPA plans to proceed in implementing and exercising its authority” relating to NSR applicability determinations.

In general, the guidance should be welcomed by the regulatory community as the Administrator provides a degree of clarity regarding US EPA’s interpretation of the NSR requirements, takes the position that US EPA will not “second guess” applicability determinations performed by facility owners and operators, and that US EPA will effectively exercise a light touch when it comes to NSR enforcement decisions. Continue Reading

Update: DOE Approves an Extension for FERC’s Response to the Proposed Grid Resiliency Pricing Rule

The Federal Energy Regulatory Commission (FERC) now has until January 10, 2018 to act on the Grid Resiliency Pricing Rule proposal. As we previously reported, FERC had been facing a December 11, 2017 deadline set out in the Department of Energy (DOE) proposal, which calls for full recovery of costs for “fuel-secure” generating units in the electricity market. FERC Commissioner Neil Chatterjee, who was Chairman at the time, stated in an interview that FERC was on a trajectory that would allow it to take some action by the deadline. However, Commissioner Chatterjee also recognized the enormity of the task, indicating that fully understanding DOE’s questions on grid resilience and reliability would require a long-term analysis.

Shortly before the deadline, on December 7, 2017, Kevin McIntyre was sworn in as the new FERC Chairman. On that same day, he requested a 30-day extension to the December 11 deadline, citing the voluminous comments FERC received and the fact that FERC had recently sworn in two new commissioners. While Energy Secretary Rick Perry granted the 30-day extension, he emphasized DOE’s belief that “serious threats to the nation’s electricity grid” exist and that FERC must take “urgent action” to address these threats. Thus, Secretary Perry ultimately urged FERC to “act expeditiously,” expressing his desire that FERC accept the DOE proposal prior to the new deadline.

Squire Patton Boggs will continue to monitor FERC’s actions on the proposal and any effects that such actions may have on the electricity markets.

As Deadline Approaches, FERC Chairman Hints at Interim Solution to Keep Coal and Nuclear Plants Afloat

As the deadline imposed by the U.S. Department of Energy (DOE) approaches for the Federal Energy Regulatory Commission (FERC) to determine whether to exercise its regulatory authority over the electricity market in a manner designed to throw a life line to coal and nuclear power generators, the FERC commissioners have not hesitated to publicly make known their feelings on the rule. In a recent interview with Bloomberg, Chairman Neil Chatterjee hinted that he may favor a temporary, middle-ground approach in order to meet the DOE deadline.

DOE’s proposed rulemaking addresses the assertion that the closure of coal and nuclear plants would negatively impact the reliability and resilience of the U.S. electrical grid. While Chairman Chatterjee did not provide full support for Energy Secretary Rick Perry’s subsidy-based plan to stop the decommissioning of coal and nuclear plants, the interim solution the chairman suggested in the interview offers some hope for proponents of the rule after S&P Global reported that Commissioner Robert Powelson had indicated that FERC did not “do politics” and would not “destroy the marketplace” and Commissioner Cheryl LaFleur offered support to these statements on twitter. Continue Reading

Food Labelling Issues and Recall Trends in Europe: Recent UK Recalls Resulting from Labelling Errors

Trade press reports have highlighted a spate of recent recalls relating to food and drink products in the UK resulting from labelling errors. Examples include foods recalled because of salt crystals not mentioned on the packaging (which represent a potential choking hazard), chocolate drinking straws with labels not in English (with allergen information therefore not easily comprehended) and several products which contained allergens, including sulphur dioxide and/ or sulphites, not correctly mentioned on the label.

Where a product is not in compliance with food safety requirements (and may have reached the consumer) a food business operator is required by law to effectively and accurately inform the consumers of the reason for its withdrawal from sale, and when other measures are not sufficient to achieve a high level of health protection, recall from consumers products already supplied to them (under Article 19 of the EU General Food Law Regulation (178/2002)). A ‘recall’ is any measure or set of measures intended to achieve the return of unsafe food and is likely to include measures intended to trace the affected products, communications to customers, management of returns and quarantining/ disposing of any returned products.

In practice, there are a number of safety-related reasons that a food or drink product might be withdrawn from sale and/ or recalled. For example, it could have been found to:

  • contain harmful bacteria, such as salmonella or listeria;
  • not meet permitted levels for substances such as pesticides (this was the reason for recalls across Europe in August this year of eggs contaminated with the insecticide Fiprinol and, in UK, of products made with those eggs, such as egg salads);
  • be physically contaminated, for example with pieces of glass, plastic, or metal; and/ or
  • be labelled incorrectly, which could be a particular problem for people with food allergies.

A recent European recall and notification index produced by a UK waste solution company, showed that in quarter 3 of 2017, bacterial contamination was the top cause of food recalls reported on RASFF (the Rapid Alert System for Food and Feed) accounting for over 26% of food recalls. However, manufacturers and retailers must remain alert to the risks posed by incorrect, inaccurate, or illegible labels, as well as contamination, in light of the number of recalls relating to labelling reported on the Food Standards Agency’s website over the last month.Responsibilities for labelling should be clearly defined under agreements, for example between the manufacturer, importer and/ or third party packaging/ labelling company; and safeguards should be in place to ensure allergen labelling is accurate. Such safeguards might include requirements for suppliers to conduct and provide copy allergen risk assessments, for allergen information to be communicated through ingredient specifications and checked, for labels to be checked and signed off before use, to ensure that labels are updated when specifications change, to have dedicated packing lines where possible to reduce the risk of mislabelling and regular checks/ audits as to label compliance and accuracy.

The ongoing trend of global recalls in the food sector means operators are well advised to plan for a recall before any issue is identified, in the same way as planning for any other crisis management procedures. The development of a written recall policy and protocol and regular reviews to ensure it remains fit for purpose, is a sensible step for any food business operator.

Deadline Approaching for Chemical Manufacturers and Importers to Submit Chemical Substance Notifications to US EPA Under the TSCA Inventory Reset Rule

The February 7, 2018 deadline is rapidly approaching for manufacturers and importers of chemical substances in the US to submit their notifications to US EPA as required by the Inventory Reset Rule issued by US EPA pursuant to the amended Toxic Substances Control Act (TSCA).

The Inventory Reset Rule requires every chemical manufacturer and importer to notify US EPA of each chemical substance it manufactured or imported for a non-exempt commercial purpose in the US during the 10-year period ending June 21, 2016 (the “lookback period”). Each chemical substance for which US EPA receives a notice will be designated as “active” on the TSCA Inventory.

The rule also gives chemical processors the option to report to US EPA any chemical substance they processed during the same lookback period, but they must do so by October 5, 2018.

Any chemical substance that is subject to the reporting requirement will be designated as “inactive” on the Inventory if it is not reported to US EPA by a manufacturer, importer or processor by the applicable deadline. Once the Inventory “reset” is finalized, no one may manufacture, import or process an inactive substance without giving US EPA prior notice not more than 90 days before the anticipated date of manufacturing, importing or processing.

Certain substances do not have to be reported to US EPA for purposes of the Inventory Reset Rule. Substances that are generally excluded from being listed on the TSCA Inventory do not have to be reported (i.e., naturally occurring substances and substances that are excluded based on the low volume exemption, LoREX exemption, polymer exemption, test marketing exemption or R&D exemption). The Inventory Reset Rule also exempts all substances for which US EPA already has received an “equivalent” notice:  substances that were reported in response to the 2012 or 2016 Chemical Data Reporting (CDR); substances that were added to the Inventory during the lookback period pursuant to a Notice of Commencement (NOC) submitted to US EPA during that period; and substances added to the TSCA Inventory since June 22, 2016. US EPA has posted a list of the exempt substances on its website.

In addition to these exemptions, the Inventory Reset Rule provides that a manufacturer or importer is not required to submit a notice for a substance covered by the lookback period if the manufacturer has “evidence in the form of a CDX receipt” from another manufacturer showing that the other manufacturer or importer submitted a notice to US EPA for the substance. US EPA cautions, however, that any manufacturer relying on the exemption “bears the risk” if the other manufacturer later withdraws its notice and the substance is subsequently designated as inactive. US EPA also has stated that a company seeking to maintain an existing “confidential business information” (CBI) claim for the chemical identity of a substance should submit a notice for the substance and assert the CBI claim itself even if a company is relying on a CDX receipt from another manufacturer. Otherwise, the company runs the risk that the other company did not assert the CBI claim or even that the other company might withdraw its submission entirely.

US EPA also has compiled a “preliminary” list of chemical substances for which the agency received notices through November 10, 2017. US EPA will update this list approximately once each month. The list is for “informational purposes only,” however, and does not relieve manufacturers and importers from the obligation to report the substances that they have manufactured or imported. According to US EPA, substances identified on the list are not exempt from the reporting requirement unless, as noted above, a manufacturer has obtained a copy of the CDX receipt from another manufacturer or importer showing that the other company reported the substance to US EPA.

Good Intentions, Bad Outcomes – Introducing Non-Native Species Into the UK

A recent prosecution has illustrated the consequences of releasing non-native species into UK habitats, notwithstanding that the motivation of the two defendants was entirely benevolent.

Section 14 of the Wildlife and Countryside Act 1981 makes it an offence to release or allow to escape into the wild any animal of a kind which is not ordinarily resident in and is not a regular visitor to Great Britain in a wild state, or which is listed in Schedule 9 of the act. The maximum penalty is an unlimited fine and/or two years’ imprisonment. Zhixiong Li and Ni Li organised a boat trip from Brighton Marina in 2015. Their intention was to release thousands of live crustaceans into the sea as part of a Buddhist “life release” ritual designed to save animals destined for slaughter. However, amongst the crustaceans were 361 American lobsters and 350 Dungeness (US) crabs, which Miss Li had purchased from a wholesale fish supplier. The case came to light when two local fishermen subsequently captured some of the foreign shellfish in June 2015. Only 323 crustaceans had been recovered and the most recent American lobsters found had been carrying “viable eggs”, which showed that they had been breeding. Mr Li and Miss Li were subsequently prosecuted by the Maritime Management Organisation, who had spent thousands of pounds trying to recover the shellfish, even offering local fishermen a bounty of £20 to capture them. The defendants pleaded guilty at Brighton Crown Court and were fined a total of £5,800 and ordered to pay plus £9,000 in compensation. The judge commented that the full impact of the defendants’ actions was not known, but that it could have a significant impact upon native fish stocks.

The introduction of non-native species can have a devastating effect on an ecosystem, for example, by introducing disease, preying on native species or simply outcompeting native species in the search for food. Well known examples include the introduction from the USA of grey squirrels and signal crayfish ravaging the UK’s native red squirrel and white clawed crayfish populations respectively. In the plant kingdom, the introduction of Japanese Knotweed to the UK has led to a menace which can damage buildings, overwhelm other plants and blight property. In each of these cases, the motivation behind the introduction was not malicious: grey squirrels and Japanese knotweed were introduced by Victorians for essentially ornamental purposes; signal crayfish to bolster stocks affected by crayfish plague (paradoxically, signal crayfish are not only carriers of, but also immune to, crayfish plague).

Mr Li and Miss Li, whilst naïve, had certainly never intended to cause harm to wildlife. So unpredictable are the consequences of introducing invasive species that it is a cruel irony that they may have unwittingly sealed the fates of far more animals than they had hoped to save.

MSHA Officially Delays Effective Date of Workplace Examination Rule Until June 2018

The Mine Safety and Health Administration (MSHA) officially delayed the effective date of the controversial “Examinations of Working Places in Metal and Nonmetal Mines” final rule by a full eight months to June 2, 2018 and temporarily reinstated the previous versions of the workplace examination rules – deemed 30 C.F.R. § 56.18002T and 30 C.F.R. § 57.18002T –  that were in effect as of October 1, 2017.

The final rule was scheduled to go into effect in May of this year, but the Agency delayed implementation until October 2, 2017.  As previously reported, on September 12, MSHA proposed to again delay the effective date of the Agency’s final rule by six months to allow additional time for training and compliance assistance.  After the two-week comment period closed, MSHA notified stakeholders that the effective date of the rule would be delayed until June 2, 2018.  The delay was published in the Federal Register on October 5, 2017.

MSHA reported that many commenters supported the further effective date delay, particularly while the Agency accepts comments on the proposed substantive changes to the final rule.  When MSHA proposed the delay to the October 2, 2017 effective date, the Agency simultaneously reopened the rulemaking record and proposed amendments to two sections of the final rule related to the timing of required workplace examinations and the contents of the examination record, as we described in a recent blog post.  MSHA is still accepting comments until November 13 on those proposed amendments.  Many stakeholders requested that the Agency postpone the effective date beyond the six month mark or indefinitely in order to ensure that industry has clarity on the requirements of any new final rule and that the Agency has time to meet its stated training and outreach objectives.  The Agency agreed with those commenters and believes that an eight-month delay until June 2, 2018 will provide sufficient time to ensure compliance readiness.

MSHA firmly rejected arguments made by labor union representatives that further delays in the effective date would have an adverse impact on miners’ health and safety, stating that “the standards that have been in effect for many years are reinstated and MSHA will continue to enforce those standards … [and] will proactively provide compliance assistance and training needed to assure that miners’ safety and health are protected.” 82 Fed. Reg. 46412 (Oct. 5, 2017).

MSHA will hold four public hearings on the proposed amendments to the final workplace examination rules in Arlington, Virginia (October 24, 2017); Salt Lake City, Utah (October 26, 2017); Birmingham, Alabama (October 31, 2017); and Pittsburgh, Pennsylvania (November 2, 2017).  Each hearing will begin at 9 a.m. local time.