Regulatory Rollbacks Continue for Energy Industry

Troutman Sanders LLP
Annie M. Cook, Robert E. Hogfoss & Catherine D. Little

January 5, 2018

In the past few weeks, the Trump Administration’s Department of Interior (DOI) has taken significant steps to roll back several environmental policies and/or rules affecting the energy industry. On December 22, DOI issued a memorandum interpreting the scope of the criminal liability under the Migratory Bird Treaty Act (MBTA) not to extend to incidental takes of migratory birds associated with development, construction or operation of energy and infrastructure projects. The following week, DOI formally rescinded a 2015 final rule issued by the Bureau of Land Management (BLM) for oil and gas operators engaged in hydraulic fracking on Federal and Indian public lands because it “imposes administrative burdens and compliance costs that are not justified.” That same day, DOI’s Bureau of Safety and Environmental Enforcement (BSEE) issued a proposed rule to revise or eliminate regulations on offshore drilling safety equipment, including the production systems safety rule which was prompted by the 2010 Deepwater Horizon spill in the Gulf of Mexico. More recently, DOI has announced a draft proposed plan to reopen nearly all offshore waters to oil and gas drilling.

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EPA’s Superfund Task Force Releases Recommendations

Winston & Strawn LLP
John Fehrenbach

December 13, 2017

On May 22, 2017, three months into his new role as head of the Environmental Protection Agency (EPA), Administrator Scott Pruitt established a “Superfund Task Force” (Task Force) to evaluate the Superfund program and provide recommendations on how the Agency can improve the program.

The Superfund program was established pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) with the goal of reducing risk to human health and the environment posed by sites contaminated with hazardous substances. CERCLA requires that the National Oil and Hazardous Substances Pollution Contingency Plan (NCP) identifies the sites posing the greatest risk within the United States. As of June 21, 2017, there are over 1,300 sites on the National Priorities List (NPL), a fact which Pruitt was “astounded to learn.” “Many of these sites have been listed as Superfund sites for decades, some for as many as 30 years,” Pruitt noted. “We can—and should—do better.” Pruitt directed the Task Force to come up with a plan to make the program more efficient and effective.

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Court Rules that Gas Station Defendants are not Off the Hook for “Primary Restoration” Natural Resource Damages

Riker Danzig Scherer Hyland & Perretti LLP
Jaan M. Haus

December 6, 2017

Reprinted with permission. © 2017 Riker Danzig Scherer Hyland & Perretti LLP

In a case before the United States District Court for the District of New Jersey, the New Jersey Department of Environmental Protection (“NJDEP”) seeks to recover natural resource damages (“NRD”) from a number of gas station defendants (the “Gas Station Defendants”) for the alleged discharge of Methyl Tertiary Butyl Ether (“MTBE”) into the groundwater at five gas station sites in northern and central New Jersey. NJDEP v. Amerada Hess Corp., Docket No. 15-6468 (Nov. 1, 2017). This past summer, the Gas Station Defendants sought leave to file a motion for partial summary judgment on the issue of whether the NJDEP could recover primary restoration natural resource damages. Under the New Jersey Spill Compensation and Control Act (the “Spill Act”), primary restoration damages are available to the NJDEP for the implementation of a primary restoration plan that would restore the environment to pre-discharge conditions more quickly than would occur through a remediating party’s proposed remediation program. The Gas Station Defendants contend, however, that such damages are only available where the NJDEP can establish that there is an “injury or threat to human health, flora or fauna” that provides a reasonable basis or justification for expedited restoration over and above the Gas Station Defendants’ planned remediation. While the Gas Station Defendants argued that a heightened legal standard should apply to claims for recovery of primary restoration damages, the District Court refused to adopt this view and determined that the burden of proof proposed by the Gas Station Defendants was not found in the Spill Act.

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Rising Environmental Enforcement in the Food and Drug Sector: How to Stem the Tide for Your Facility

Kelley Drye & Warren LLP
Paul Sarahan

December 6, 2017

Food and drug manufacturing facilities are an increasing target for federal and state environmental enforcement actions. Recent enforcement actions have highlighted the extent to which these facilities are subject to a host of environmental requirements applicable to a facility’s operations, including stormwater and wastewater discharges; air emissions; risk management planning; spill prevention plans; and waste management. While an overview of some of these recent enforcement actions provides some perspective as to some of the issues that need to be addressed to ensure a facility’s compliance with applicable state and federal environmental regulations, there are proactive steps a company can utilize to identify and address compliance issues, while mitigating or even eliminating potential enforcement consequences.

Stormwater and Wastewater Management

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EPA Declines To Issue CERCLA Financial Responsibility Rules For Hardrock Mining Industry But Leaves Open What It Might Do For Other Industries

Pillsbury Winthrop Shaw Pittman LLP
Anthony B. Cavender

December 7, 2017

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly referred to as Superfund, was enacted in December 1980, and Section 108(b) provides that the Environmental Protection Agency (EPA) shall promulgate, no later than December 11, 1985, financial responsibility requirements for classes of facilities—designated by EPA—consistent with “the degree and duration of risk associated with their production, transportation, treatment, storage or disposal of hazardous substances.” Despite this directive, EPA has not issued any financial responsibility rules under Section 108(b). This record of inaction prompted a lawsuit demanding compliance with the law.

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New NJDEP Webpage Contains Requirements for LSRPs Related to Contaminants of Emerging Concern

Manko Gold Katcher & Fox
John F. Gullace

November 9, 2017

On November 3, the New Jersey Department of Environmental Protection (NJDEP) announced that the Site Remediation and Waste Management Program had launched a new webpage dedicated to “Contaminants of Emerging Concern.” www.nj.gov/dep/srp/emerging-contaminants/. The announcement notes that the new webpage “currently focuses on Per- and Polyfluoroalkyl Substances (PFAS)” such as perfluorooctanoic acid (PFOA).

Neither the announcement nor the new webpage clearly defines what constitutes a contaminant of emerging concern, but the webpage implies that these contaminants are ubiquitous and include compounds for which there are emerging standards, like PFOA, as well as compounds that are still being studied by NJDEP, the United States Environmental Protection Agency (EPA) and other entities.

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CT Creates New Brownfields Program, Adopts Brownfields Tax Credit

Holland & Knight
Stephen J. Humes

November 6, 2017

Buried in an 881-page budget bill passed Thursday by the Connecticut General Assembly was a new program to support remediation and reuse of brownfields – properties long contaminated and underutilized – as well as new job creation while rewarding investors with a new state income tax credit for remediation expenditures.

The new program, called the 7/7 Brownfields Program, creates new incentives the Connecticut Department of Economic and Community Development (DECD) can use to reward new investors for cleaning up contaminated sites and reusing them while creating local jobs in the process. Qualifying investors can apply a credit for the expenditures against their Connecticut state income tax liability for seven  years and use the credit to offset sales and use taxes.

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New Concerns for Companies That Import or Manufacture “Toxic” Chemicals

Clark Hill PLC
William J. Walsh, Karen C. Bennett, Jane C. Luxton and Kenneth von Schaumburg

November 10, 2017

Inevitably, a change in Administrations leads to changes in policies and priorities of regulatory agencies. Most media coverage has focused on opposition to the Trump Administration’s efforts to revise existing or proposed regulations and an anticipated decrease in federal enforcement actions.

However, less attention is being paid to an uptick in citizen enforcement suits filed directly against manufacturers and importers of “toxic” chemicals (i.e., existing chemicals regulated by the Toxic Substance Control Act (“TSCA”)) that are subject to reporting obligations. For example,

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Federal Court Denies Recovery for Landfill Closure Costs Under CERCLA and New Jersey Spill Act

Greenbaum, Rowe, Smith & Davis LLP
Daniel Flynn

November 9, 2017

A recent decision by the United States District Court held that landfill closure costs incurred by a private party were ineligible for recovery under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the New Jersey Spill Compensation and Control Act (the Spill Act).

The litigation in Strategic Environmental Partners, LLC v. State Department of Environmental Protection involved a dormant municipal landfill purchased by the plaintiff as part of a plan to construct and operate a solar farm on the property.  Shortly after the purchase, the plaintiff negotiated an Administrative Consent Order (ACO) with the New Jersey Department of Environmental Protection (NJDEP) in which it agreed to “close” and “cap” the landfill pursuant to the New Jersey Solid Waste Management Act, which governs closure of municipal landfills.

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