Although the Biden administration has yet to issue many new substantive air quality regulations, Biden’s EPA recently issued two rules revoking Trump-era procedural regulations that should pave the way for a more aggressive regulatory agenda. On May 13, EPA rescinded the “Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process Rule” (Cost-Benefit Rule), a requirement governing cost-benefit analyses for Clean Air Act (CAA) rulemakings, and on May 18, the agency revoked the “EPA Guidance; Administrative Procedures for Issuance and Public Petitions Rule” (Guidance Document Rule), which required all “significant” EPA guidance to undergo a public notice and comment process prior to issuance, modification, or withdrawal.
Environmental Justice to Play Significant Role in Air Permitting Process Under Biden Administration
Although environmental justice (EJ) is not a new concept in the context of air permitting, the Biden administration’s increased focus on identifying and addressing disproportionate environmental impacts on low-income neighborhoods and communities of color is likely to spur an increase in EJ claims being raised as part of the public review process for both new air permits and permit renewals. Many, if not most, states do not have statutory or regulatory requirements dictating how EJ concerns must be considered in the air permitting context. Similarly, while there is a patchwork of EJ requirements applicable to federal agency actions, most are imposed by executive order and are not prescriptive in nature, meaning that there is no robust legal framework for considering EJ concerns in the air permitting context at the federal level either. Accordingly, while potential permittees and current permit holders seeking to renew or modify their air permits should be aware that there is an increased likelihood that EJ concerns may be raised by third parties or permitting agencies, there is little certainty about how these concerns will be implemented in the course of permit issuance.
Rule Limiting EPA Regulation of GHG Emissions Vacated by D.C. Circuit
On April 5, the U.S. Court of Appeals for the D.C. Circuit vacated a Trump-era rule that would have prevented the Environmental Protection Agency (EPA) from setting greenhouse gas (GHG) emissions standards for almost any class of stationary sources, except for fossil fuel-fired electric generating units. The court’s decision, issued at the request of the new Biden EPA, clears the way for new sector-by-sector GHG regulations should the new administration seek to set new GHG standards under Section 111 of the Clean Air Act (CAA).
SEC Seeks Public Comment on Framework for Corporate Climate Change Disclosures
On the heels of multiple recent indications that it plans to increase its focus on environmental, social, and governance-related (ESG) corporate disclosures, the Securities and Exchange Commission (SEC or Commission) has solicited help from the public on developing a framework for climate change disclosures. Acting Chair Allison Herren Lee released a statement on March 15, calling for input from investors, registrants, and other market participants “in light of demand for climate change information and questions about whether current disclosures accurately inform investors.”
SEC Announces Task Force to Enforce ESG Disclosure Requirements
The Securities and Exchange Commission (SEC) announced the creation of a new task force on March 4 to address violations of environmental, social, and governance-related (ESG) disclosure requirements. The Climate and ESG Task Force will be located in the SEC’s Division of Enforcement and led by Acting Deputy Director of Enforcement Kelly Gibson, who will oversee a 22-member team drawn from across the SEC. The task force will focus initially on material gaps or misstatements in disclosure of climate risk under existing rules. The task force will use “sophisticated data analysis to mine and assess information … to identify potential violations” and will also pursue tips, referrals, and whistleblower complaints on ESG-related issues.
Mandatory GHG Corporate Disclosure Bill Introduced in California
A California state legislator has introduced a bill that would require large corporations doing business in the state to publicly disclose their greenhouse gas emissions (GHGs). The bill, titled the Climate Corporate Responsibility Act, covers publicly traded domestic and foreign corporations with annual revenues in excess of $1 billion. According to state Senator Scott Weiner, who introduced the bill, it could affect up to 5,000 companies. The bill is not limited to any industry sector and would thus impact not only companies typically associated with GHG emissions, like oil and gas producers or power plants, but also would extend to other sectors, including the tech industry, for example.
Affordable Clean Energy (ACE) Rule Vacated, But Appeal Still Possible
On January 19, the last full day of the Trump administration, a three-judge panel of the D.C. Circuit Court of Appeals vacated the Affordable Clean Energy (ACE) rule, the Trump EPA’s replacement rule for the Clean Power Plan. The Clean Power Plan was a cornerstone of the Obama EPA’s efforts to address climate change and would have required electric utilities to shift generation from fossil fuels to renewable resources. That aggressive rule was halted by an unprecedented stay of the rule by the Supreme Court, but a decision on the merits has never been issued because the Trump administration took office and put the litigation on hold. In its January 20 opinion, the D.C. Circuit has now issued the first decision on the merits of the legal issues underlying both ACE and the Clean Power Plan.
Biden EPA Hits the Ground Running with Reviews of Trump Air-Related Rules
On January 20, newly inaugurated President Joe Biden signed an executive order titled, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” initiating review of nearly 50 environmental rules and regulations, including 20 air-related regulations that the new administration views as insufficient or unsupported by the data.
Trump EPA’s Last-Minute Surprise on Climate Standards for New Coal-Fired Utilities Intended to Block Similar Standards for Other Sectors
Just before the inauguration of President Biden, the Trump administration surprised many by failing to revise the stringent CO2 standard for new coal-fired power plants. That standard, adopted by the Obama administration, is based on the use of carbon capture and sequestration — a technology only installed once in the U.S. at a facility that has now been mothballed. When the Trump administration proposed to repeal and replace that standard in 2018, the chance of it surviving in its current form seemed slim. However, as the clock ran out, the Trump EPA failed to finalize its 2018 proposal and instead issued a “significant contribution finding” that attempts to limit regulation of greenhouse gases from new sources to electric utilities alone. While likely to be reversed quickly by the Biden EPA, that determination erects one more barrier to broad regulation of greenhouse gas emissions under the Clean Air Act (Act).
FERC Issues Order Proposing Substantial Penalty for Licensee in Michigan Dam Failure
The Federal Energy Regulatory Commission (FERC) has issued an order proposing a $15 million civil penalty in response to the failure of a licensee to respond to FERC dam safety orders in the wake of the failure of the Edenville dam and downstream FERC-licensed Sanford Dam (Project No. 2785) in Michigan in May 2020 (see June 1, 2020 edition of the WER). The December 9, 2020 Order to Show Cause and Notice of Proposed Penalty followed months of FERC orders and directives to the licensee related to the catastrophic failure of the two dams, which resulted in the evacuation of 10,000 people, an estimated $190 million in economic damages to local residents, and $55 million in response costs, prompting Governor Gretchen Whitmer to request a disaster declaration from the federal government.