On December 16, 2020, a cold storage warehouse and ice manufacturing facility in East Providence, Rhode Island, entered into a guilty plea with the Justice Department for a “knowing” criminal violation of Clean Air Act section 112(r)(7), 42 USC 7412(r)(7), in connection with EPA’s Chemical Accident Prevention Program and requirement to submit a risk management plan (RMP) under 40 CFR Part 68. The facility used a refrigeration system to manufacture and store ice and other frozen products, with 19,000 pounds of anhydrous ammonia in the refrigeration process.
Clean Air Act
Chevron, Auer, and Now Voight Deference?
On November 20, 2020, the Eighth Circuit Court of Appeals jumped headlong into the Chevron, and Auer deference realm. The issue: can a Clean Air Act permittee rely on a state agency’s prevention of significant deterioration (PSD) determination? And should a Court “defer” to the state agency’s determination to assist in the interpretation of an “ambiguous” environmental program requirement? Voight v. Coyote Creek Mining Company (No. 18-2705, 8th Circuit Court of Appeals).
Chemical plant owners and operators need to carefully review a recent federal appellate court decision that could substantially expand process safety management (PSM) considerations and related chemical safety and accidental release regulatory requirements under EPA’s Risk Management Plan (RMP) program.
Facility owners and operators with air permits will want to pay close attention to a recent Fifth Circuit ruling on a private citizen’s ability to seek penalties for/and defenses against alleged violations of the Clean Air Act. Following a bench trial, an appeal, and another bench re-trial, this decade-old case has again gone up to the appeals court and had the trial court’s judgment vacated and remanded, this time to decide the Plaintiffs’ standing to bring the case in the first place and to judge the viability of two key affirmative defenses. Environment Texas Citizen Lobby, Inc. v. Exxon Mobil Corp., 66 F.Supp.3d 875 (S.D. Tex. 2014), vacated and remanded, 824 F.3d 507 (5th Cir. 2016), on remand, No. H-10-4969, 2017 WL 2331679 (S.D. Tex. Apr. 26, 2017), vacated and remanded, slip op. No. 17-20545, 2020 WL 4345337 (5th Cir. Jul. 29, 2020), as revised (Aug. 3, 2020). According to the majority opinion, the panel gave both the lower court and the regulated community guidelines for when each CAA violation is “fairly traceable” to a plaintiff’s alleged injury to support standing under Article III of the U.S. Constitution. According to the concurrence, the Fifth Circuit’s standing precedents are “a mess” that are trending toward the unconstitutional elimination of “but-for” causation; a paradox that should be clarified by the full court en banc to stop a continuing loop of confusion.
Accidental chemical releases in the workplace and offsite into the environment continue to be a high-priority enforcement area for both the U.S. Environmental Protection Agency and the U.S. Department of Labor’s OSHA, including releases of anhydrous ammonia and other toxic and flammable substances under the agencies’ RMP and PSM programs.
Companies and facilities that experience an accidental release have a new regulation to consider for releases of regulated substances or extremely hazardous substances. On February 21, 2020, the U.S. Chemical Safety and Hazard Investigation Board (CSB) issued its new final rule governing reporting of accidental releases subject to the Board’s investigatory jurisdiction. The new rule requires the owner or operator of a stationary source to report to the CSB any accidental release resulting in a fatality, serious injury (defined as resulting in death or inpatient hospitalization), or substantial property damages (defined as damage of $1,000,000 or more). A copy of the rule in today’s Federal Register is available here.
New “Serious” Classification for Nonattainment For Ozone
On December 16, 2019, the U.S. Environmental Protection Agency (EPA) announced a final rule to reclassify the Denver Metro/North Front Range ozone nonattainment area from Moderate to Serious nonattainment under the Clean Air Act. The area covered embraces all of Adams, Arapahoe, Boulder, Denver, Douglas, and Jefferson counties as well as the southern portions of Larimer and Weld counties.
On September 5, 2018, EPA issued a draft guidance document announcing a shift of the term “adjacent” in the context of the Clean Air Act’s New Source Review (NSR) and title V operating permit programs which may benefit industrial air sources. This interpretation would focus EPA’s attention on physical proximity of facilities when making source determinations, rejecting EPA’s past practice of considering “functional interrelatedness.”
Recently, EPA issued an Interim OECA Guidance on EPA and state roles on managing enforcement and compliance assistance. See, Interim OECA Guidance on Enhancing Regional—State Planning and Communication on Compliance Assurance Work in Authorized States. While EPA is seeking to emphasize cooperative federalism in modifying the emphasis of the 1986 revised policy on state/EPA enforcement agreements, as provided in the first footnote of the Guidance, the policy issued on January 22, 2018, appears to make the states the primary enforcer of environmental laws and provides a secondary role for EPA in that regard.
A high-ranking Environmental Protection Agency (EPA) enforcement official in the Trump Administration recently cited a 1994 memorandum by Earl Devaney, then Director of EPA’s Office of Criminal Enforcement, as presenting guiding principles to select cases for criminal enforcement of environmental violations. The January 12, 1994, memorandum, “Exercise of Enforcement Discretion,” is often referred to as the “Devaney Memorandum,” and it is available at this link: https://www.epa.gov/sites/production/files/documents/exercise.pdf. This may signal that criminal enforcement of environmental laws under the Trump Administration will be limited to situations in which there has been significant actual or threatened environmental harm and truly culpable conduct.
In January 2017, both EPA and OSHA increased civil penalties for new enforcement cases. While the increases became effective just days before the new Administration took office, the increases are a result of Congressional action in 2015 to annually adjust civil penalties for inflation by January 15 of each new calendar year.
Businesses that store and use flammable and toxic chemicals that are regulated under EPA’s Risk Management Plan (RMP) Program at 40 CFR Part 68 need to be aware of recent actions by the U.S. Environmental Protection Agency aimed at curtailing chemical accidents and releases through new proposed regulations and also enforcement. Facilities potentially subject to EPA’s initiatives include chemical plants and refineries, POTWs that use chlorine as a disinfectant, as well as those companies that use and store bulk anhydrous ammonia as an industrial refrigerant (dairy operations, food and pharmaceutical manufacturing, cold storage warehousing) or as fertilizer (agricultural cooperatives, fertilizer distribution).
Beginning October 1, 2016, the U.S. Environmental Protection Agency (EPA) will target its enforcement efforts in seven different focused areas, including three areas designed to protect water quality, two initiatives aimed at reducing toxic air pollutants and reducing air pollution, an initiative to reduce accidental chemical releases from industrial facilities, and an enforcement initiative geared at energy extraction activities.
Businesses and companies seeking to qualify for penalty mitigation and relief by submitting voluntary self-disclosures under EPA’s Audit Policy need to be aware of significant changes and modifications that took effect in December 2015.
On June 29, 2015, the United States Supreme Court announced its decision in Michigan v. Environmental Protection Agency, holding that EPA unreasonably interpreted a provision of the Clean Air Act regarding the regulation of power plants under the EPA’s Mercury and Air Toxics Standard (MATS) (also referred to as the Utility MACT).
On June 2, 2015, the U.S. EPA and DOJ announced a $3 million dollar settlement with Millard Refrigerated Services, a company specializing in refrigeration and distribution services to retail, food service, and food distribution companies. The settlement resolves alleged violations of the EPA’s Risk Management Program, the Clean Air Act’s General Duty Clause, and CERCLA and EPCRA release reporting requirements stemming from three releases of the industrial refrigerant anhydrous ammonia from the facility’s Mobile Marine Terminal in Alabama. Among the release incidents was an August 2010 release involving hospitalization and medical treatment of individuals who were offsite working on decontaminating ships in response to the 2010 oil spill in the Gulf of Mexico.
On March 10, 2015, EPA issued a new revised 2015 Update to its Supplemental Environmental Project (SEP) Policy, thereby superseding prior SEP policies.