Companies that store hazardous waste liquids with organics or other volatile and light vapors should ensure that the tanks, containers, and equipment used at those facilities satisfy the RCRA Organic Air Emission Standards in Subparts AA, BB, and CC under 40 CFR Parts 264 and 265. Over the past month, EPA has announced at least five separate penalty enforcement actions for air emission violations under the Subpart BB and Subpart CC standards. EPA promulgated the RCRA hazardous waste air emission standards to reduce the release of air emissions and organic vapors into the atmosphere from hazardous waste tanks, containers, equipment, and process vents, to prevent ozone precursors and other air toxics.
RCRA / Hazardous Waste & Solid Waste
The Missouri Department of Natural Resources faces a potential funding shortfall for Missouri’s Hazardous Waste Program following the General Assembly’s March 4 disapproval of a stopgap funding measure. On that date, the Missouri House of Representatives adopted Senate Concurrent Resolution 38 disapproving an increase in Hazardous Waste Program fees previously passed by the Missouri Hazardous Waste Management Commission. The Missouri Senate had passed SCR 38 on February 24. Accordingly, the fee increases will not take effect.
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.
Companies that beneficially reuse hazardous secondary materials by recycling or reclaiming those materials rather than discarding them as hazardous waste need to be aware of a new federal court ruling that may provide additional flexibility in the reuse and recycling of those materials. In its July 7, 2017, opinion in Am. Petroleum Inst. v. EPA, No. 09-1038, slip op. (D.C. July 7, 2017), the U.S. Court of Appeals for the District of Columbia struck down two key elements of the EPA’s 2015 Final Rule aimed at revising EPA’s “Definition of Solid Waste”: Factor 4 of the legitimacy test (i.e., “toxics along for the ride”) and, in pertinent part, the Verified Recycler Exclusion pertaining to reclamation under RCRA.
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.
On November 28, 2016, EPA published the final version of the Hazardous Waste Generator Improvements Rule (the Rule) in the Federal Register. Promulgated under the Resource Conservation and Recovery Act (RCRA), the Rule updates EPA’s regulations governing generators of hazardous waste, most of which EPA promulgated in the 1980s. The Rule significantly revises the hazardous waste generator requirements.
On September 12, 2016, EPA issued its “Strategy for Addressing the Retail Sector under RCRA’s Regulatory Framework.” The strategy document sets forth three actions the agency is expected to finalize in the short-term to help ease the RCRA burden on managing retail and consumer products that may trigger RCRA hazardous waste characteristics or RCRA listings once a decision to discard is made.
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.
At long last, after operating under the draft Vapor Intrusion Guidance of 2002 for almost 13 years, EPA finally issued final vapor intrusion guidances on June 11, 2015, a specific guidance for petroleum vapor intrusion at leaking underground storage tank sites, and a more general technical guide for assessing and mitigating the vapor intrusion pathway at chlorinated solvent sites. (Technical Guide). In response to criticism that EPA did not subject the guidances to the public scrutiny of the administrative rule-making process, EPA allowed for a longer public comment period than is customary for guidances. Additionally, both vapor intrusion guidances were the subject of extensive discussions between EPA, various sister agencies, private industry, environmentalists, and the White House.
On March 10, 2015, EPA issued a new revised 2015 Update to its Supplemental Environmental Project (SEP) Policy, thereby superseding prior SEP policies.
Last week, on January 13, 2015, EPA issued its new “Definition of Solid Waste” Final Rule in the Federal Register at 80 Fed. Reg. 1694. This new rulemaking will have significant impacts regarding how secondary hazardous materials are recycled and exempted from the hazardous waste regulations. Unless challenged (and by all accounts it appears at least certain aspects may be litigated based on initial comments by various industrial sectors) the rule becomes effective on July 13, 2015, where EPA is the authorized implementing agency (Iowa, Alaska, American Samoa, and Puerto Rico and the U.S. Virgin Islands). Because RCRA is a federally delegated program, other states will have to adopt the more stringent aspects of the rule discussed below.
On November 12, 2013, the First Circuit Court of Appeals handed down its decision in VFC Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, slip op. (1st Cir., 2013). This decision serves as a reminder that courts will look carefully at the words used in a loan agreement’s environmental indemnity provisions to decide whether or how they apply. If the actual wording chosen (likely many years earlier) does not fit the environmental costs sought to be indemnified, the party pursuing indemnity may be greatly disappointed.
On April 4, 2013, the Fourth Circuit handed down its much-awaited decision about what a bona fide prospective purchaser (BFPP) of contaminated property must do to retain the Brownfields defense to Superfund liability. In PCS Nitrogen Inc. v. Ashley II of Charleston LLC, No. 11-2087, slip op. at 31 (4th Cir. April 4, 2013), the Court held that a property redeveloper, Ashley II, was liable as a current owner potentially responsible party (PRP) for soil contamination at the former phosphate fertilizer plant despite its “all appropriate inquiry” pre-purchase investigation of past environmental conditions at the facility. Ashley II knew that old sumps at the property contained contaminated water, yet for years did nothing to clean out or close the sumps. This failure to stop a continuing release violated the post-purchase “due care” or “reasonable steps” requirements of the BFPP defense, and negated its applicability to Ashley II.
In an effort to encourage brownfield site redevelopment and renewable energy development on contaminated sites, on December 5, 2012, EPA issued a guidance document designed to clarify the scope of enforcement discretion the agency will provide to tenants who undertake steps to avoid liability under CERCLA’s Bona Fide Prospective Purchaser (“BFPP”) provisions. In conjunction with the guidance memorandum, EPA also issued three new model comfort/status letters for lessees involved in renewable energy development on contaminated property.
Businesses that own contaminated property in Missouri, such as brownfield sites and former industrial locations, can avail themselves of Missouri’s Environmental Covenant Act (MoECA), RSMo Section 260.1000 et seq., 10 CSR 25-18.010(18), to expedite cleanup and, if site conditions allow, beneficial reuse of those properties. In particular, property owners can record an environmental covenant on their property that restricts certain land uses and site activities to minimize exposure to impacted soils and groundwater.
When coupled with a risk-based cleanup approach, an environmental covenant can present significant advantages to a property owner. Most notably, a company can clean up a site based on human health and environmental risks associated with appropriately tailored uses of the property, such as cleaning up an industrial property to satisfy industrial standards as opposed to residential standards.
The most common types of activity and use limitations found in environmental covenants include:
Environmental covenants like other property interests are recorded in a property’s chain of title to provide notice to prospective buyers of the specific activity and use limitations imposed by the restrictions.
Missouri, along with more than 20 other states, has adopted a version of the Uniform Environmental Covenants Act. The Missouri Department of Natural Resources (MDNR) has a “model” environmental covenant used by the agency in situations where MDNR is the sole overseeing Department and a second model covenant in which both EPA and MDNR are the overseeing agencies.
The provisions in the new model Environmental Covenant differ only somewhat from the provisions in the prior model Environmental Covenant, but the new model serves as a reminder that Missouri has a robust risk-based cleanup program when it is neither pragmatic nor cost-effective to clean up sites to residential levels. The use of Missouri’s risk-based program should be carefully evaluated considering site-specific circumstances.