Blank Rome LLP, Author at Energy, Chemical & Environmental Trends Watch

SCOTUS Declines to Review California’s Clean Air Act Preemption Waiver—Current Implications and Expected Response from the Incoming Administration

Sedalia E. Jones-Kennelly ●

Update and Background

The U.S. Supreme Court, in Diamond Alternative Energy, LLC v. EPA, et al,[1] recently declined to review whether the Environmental Protection Agency (“EPA”) exceeded its authority by granting a preemption waiver for California’s greenhouse-gas emission standards and zero emission-vehicle mandate.[2]

Under the Clean Air Act (“CAA”), “emission standard” refers to the legal limit on the amount of a specific air pollutant that can be released from a source, like a vehicle or factory.[3] CAA Sections 209(b) and 209(e) permit the State of California to request a waiver or authorization from federal preemption of state-level regulatory programs for certain vehicle emissions.[4] The EPA must grant the CAA waiver before California’s rules may be enforced.[5]

Petitioners—a group of states led by Ohio and various fuel industry organizations led by American Fuel & Petrochemical Manufacturers—asked the Court to review the D.C. Circuit Court’s April 2024 decision siding with the EPA. The Circuit Court had found that some petitioners lacked standing to pursue these claims, while others failed on the merits, and upheld the Agency’s authority to grant California this waiver.

The Supreme Court Ends Chevron Deference—What Does This Mean for Environmental Regulation and Enforcement?

Margaret Anne Hill, Frank L. Tamulonis III, and Holli B. Packer ●

The Supreme Court of the United States’ recent ruling in Loper Bright Enterprises v. Raimondo[1]dealt a significant blow to the power of federal agencies by ending the 40-year-old precedent commonly known as “Chevron deference.” Loper has now removed the judicial mandate that courts apply “Chevron deference” and defer to agencies on the interpretation of ambiguous language in laws pertaining to their authority. While it is unclear what impact this ruling will have in environmental enforcement cases as well as environmental regulations, federal judges will now have the power to decide what a law means for themselves, expanding the federal bench’s role in enforcement actions and policymaking.

The Chevron Deference Doctrine

The “Chevron deference” doctrine refers to the Supreme Court’s ruling in Chevron v. Natural Resources Defense Council,[2] which required judges to defer to federal agencies when interpreting ambiguous parts of statutes that those agencies administer. If Congress did not directly address a debated issue, a court was required to uphold the agency’s interpretation of the statute as long as it was reasonable.

The Chevron doctrine involves a two-step test.[3] In the first step, courts determine if Congress has spoken to the “precise question at issue.”[4] If the statute is ambiguous, courts move to step two.[5] However, “if the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”[6] In the second step, courts defer to the agency as long as their interpretation of the statute is reasonable.[7] Reasonableness is not a high bar. Typically, if a court finds the statute to be ambiguous, the agency’s interpretation will receive deferential preference. At the time of the holding, the Chevron doctrine marked a jurisprudential shift in the interpretive power of the courts, which have historically determined “what the law is,”[8] to agencies in the executive branch.[9]

EPA Issues Final PFAS National Primary Drinking Water Regulation

Margaret Anne Hill and Camila Thorpe ●

On April 10, 2024, the Environmental Protection Agency (“EPA”) finalized the National Primary Drinking Water Regulation (“NPDWR”) for six per- and polyfluoroalkyl substances (“PFAS”). PFAS, also known as “forever chemicals,” are widely used in industry and consumer products. According to the EPA, these chemicals have been linked to serious adverse health effects, including cancer and other serious illnesses. The final rule establishes national standards for specific PFAS, both individually and as mixtures, often found in drinking water. ^[i]

The Final Rule

The final rule sets individual enforceable Maximum Contaminant Level (“MCL”) limits for five PFAS.^[ii] MCLs are the highest levels of a contaminant that are allowed in drinking water. For mixtures containing two or more of four PFAS,^[iii]the rule sets a Hazard Index Level. Finally, the rule also sets a Maximum Contaminant Level Goal (“MCLG”) for each individual PFAS and mixtures, which is a non-enforceable health goal set at a level below which there is no known or expected risk to health.

EPA’s Focus on Ethylene Oxide

Margaret Anne Hill, Holli B. Packer, and Robert P. Scott ●

The Environmental Protection Agency issued a final rule on March 14 that will require significantly reduced emissions from commercial facilities that sterilize medical devices and other equipment using ethylene oxide gas (“EtO Rule”). The EtO Rule amends the National Emission Standards for Hazardous Air Pollutants (“NESHAP”), 40 C.F.R. Part 63, Subpart O, and is projected to reduce EtO emissions by over 90 percent nationwide for commercial sterilizers. The impetus for the Rule is a complaint filed by Earthjustice on December 14, 2022, in which the non-governmental organization (“NGO”) requested both injunctive and declaratory relief based upon its claim that the Environmental Protection Agency (“EPA”) had violated Section 112(d) of the Clean Air Act for the past 16 years by failing to review and revise air toxics standards for commercial sterilizers.

Emissions Controls and Reporting

The EtO Rule imposes strengthened standards for EtO emissions from the proposed rule following the receipt of public comments. It requires continuous emissions monitoring and quarterly reporting for most commercial sterilizers to ensure that emissions are controlled. Notably, the EtO Rule establishes revised standards for existing sources such as sterilization chamber vents and aeration room vents, as well as for previously unregulated emissions that escape via building leaks and chamber exhaust vents.

New SEC Climate-Related Disclosure Rule

Margaret Anne Hill and Holli B. Packer ●

On March 6, 2024, the Securities and Exchange Commission (“SEC”) adopted amendments to the disclosure rules under the Securities Act of 1933 and the Securities Exchange Act of 1934. Although the final rule is a scaled-back version of the proposal published on March 21, 2022, the new rule will require many publicly traded companies to disclose both their direct and indirect emissions, also known as “Scope 1” and “Scope 2” emissions, provided the emissions are material. Companies must also disclose to investors their climate-related risks, including information about financial harm caused by severe weather events and other natural events. The new rule will be phased in beginning with the filing of annual reports for the year ending December 31, 2025.

Of significance to the business community is the SEC’s decision to exclude the requirement to report Scope 3 emissions which would have required businesses to disclose all indirect greenhouse gas (“GHG”) emissions not otherwise included in a registrant’s Scope 2 emissions that occur in the upstream and downstream activities of the registrant’s value chain. In deciding to eliminate the requirement to report Scope 3 emissions, the SEC observed that “Scope 3 emissions typically result from the activities of third parties in a registrant’s value chain and, thus, collecting the appropriate data and calculating these emissions would potentially be more difficult than for Scopes 1 and 2 emissions.”

Climate Change Litigation—State Tort Cases Move Ahead

Margaret Anne Hill and Stephen C. Zumbrun ●

Climate change-related litigation has been increasing in the United States for the past several years. Not only have the actual number of these types of cases increased, but the claims raised in these cases have been expanding—from state tort claims (nuisance, trespass, and negligence) to federal and state constitutional claims. These cases have been slowly working their way through the legal system, with a major consideration being: Should these cases be in state court, involving state tort claims, or federal court, involving federal statutes or federal common law, because of the major national policy implication of climate change that these cases have the potential to affect?

DOE Releases Draft Roadmap to Address Interconnection Challenges for Clean Energy Projects

Brett A. Snyder and Lamiya N. Rahman ●

On October 25, 2023, the Department of Energy (“DOE”) released a draft roadmap addressing challenges to the interconnection of clean energy projects to the transmission grid. The roadmap, developed by the Interconnection Innovation e-Xchange (“i2X”),^[1] identifies short-term (1–2 year), medium-term (2–5 year), and long-term (5+ year) solutions aimed at addressing barriers to connecting solar, wind, and battery projects to the grid and maintaining grid reliability.^[2]

As the roadmap notes, interconnection requests have dramatically increased in the past decade, with 2,500 to 3,000 new requests a year, reflecting 400 to 600 GW/year of proposed capacity.^[3] At the same time, constraints on transmission capacity and issues in the interconnection process have caused large backlogs, delays, and interconnection costs, resulting in a “more difficult and costly energy transition for ratepayers, utilities, and their regulators.”^[4]

DOE has also issued a request for information (“RFI”) to seek feedback from interconnection stakeholders regarding the draft roadmap. Responses to the RFI are due on November 22, 2023.

EPA Issues Supplemental Notice of Proposed Ruling to Implement the Vessel Incidental Discharge Act, Finally!

Jeanne M. Grasso and Dana S. Merkel

The U.S. Environmental Protection Agency (“EPA”) published a Supplemental Notice of Proposed Rulemaking (“SNPR”) on October 18, 2023, modifying its initial proposed rule from three years ago on performance standards for vessel incidental discharges. 2023-22879.pdf (govinfo.gov) The SNPR addressed only three limited areas—ballast water, hulls and associated niche areas, and graywater—and did not make any sweeping changes to the prior proposal of October 26, 2020. 2020-22385.pdf (govinfo.gov)

Background

In December 2018, the Vessel Incidental Discharge Act (“VIDA”) was signed into law, which amended the Clean Water Act (“CWA”) and was intended to replace the EPA’s 2013 Vessel General Permit (“VGP”) to bring uniformity, consistency, and certainty to the regulation of incidental discharges from U.S. and foreign-flag vessels. VIDA required EPA to finalize uniform performance standards for each type of incidental discharge by December 2020, a deadline that is nearly three years past, and requires the United States Coast Guard (“USCG”) to implement EPA’s final standards within two years thereafter.

In October 2020, EPA published a proposed rule titled Vessel Incidental Discharge National Standards of Performance to implement VIDA, but the proposal languished with the change from the Trump Administration to the Biden Administration. EPA’s delay in finalizing its performance standards prompted the Center for Biological Diversity and Friends of the Earth to file a lawsuit in February 2023 to force EPA to finalize its performance standards. Center for Biological Diversity, et al., v. Regan, et al., No. 3:23-cv-535 (N.D. Cal. 2023). The premise of the environmental groups’ complaint was that EPA’s inaction harmed aquatic ecosystems, with the principal allegations focused on ballast water discharges. The parties thereafter negotiated a Consent Decree that requires EPA to finalize its performance standards by September 23, 2024. To keep EPA accountable, EPA is also required to provide updates to the court every three months on the status of the rulemaking.

To read the full client alert, please visit our website.

Chevron Deference in Its Last Days?

Jane Thomas ●

In recent years, a string of cases has been brought before the Supreme Court of the United States (“SCOTUS”) challenging the Chevron doctrine, which states that courts should defer to a federal agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable. Despite the numerous cases that have come before SCOTUS, the Court has never taken the step to overturn the landmark decision in Chevron v. Natural Resources Defense Council. This approach could change this year with already one case set to be heard in the fall term, as well as another petition for certiorari pending before the Court.

In Order No. 2023, FERC Takes Step in Reforming Transmission Grid Policies by Enacting Generator Interconnection Reforms

Mark R. Haskell, Brett A. Snyder, Lamiya N. Rahman, and Jane Thomas

On July 28, 2023, the Federal Energy Regulatory Commission (“FERC”) unanimously approved Order No. 2023, a Final Rule designed to streamline the process by which generation resources can connect to the interstate transmission grid.

At a high level, the Final Rule substantially revises the current pro forma large generator interconnection procedures (“LGIP”) and agreement (“LGIA”) with the following updates:

- - Replacing the current first-come, first-served process with a first-ready, first-served interconnection cluster study process.
  - Increasing the speed of interconnection queue processing by, among other things, imposing strict study deadlines and penalties on transmission providers.
  - Incorporating technological advancements into the interconnection process.

Order No. 2023 also makes changes to the small generator interconnection procedures (“SGIP”) and agreement (“SGIA”).

To read the full client alert, please visit our website.

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: