Two Trump Administration Environmental Priorities to Help the "Rust Belt"

There is a lot of hyperbole regarding President-Elect Trump's potential environmental agenda. During the campaign there was also a lot made about issues of employment and opportunity in the "Rust Belt" (a term I personally do no like).  Here are two suggestions of how the incoming Trump Administration could bring greater opportunity to the Rust Belt without controversial roll backs of environmental standards.   

  1. Bring Logic to Air Quality Standards and Regulations
  2. Moonshot on Brownfield Redevelopment

Bring Logic to Air Quality Standards and Regulations 

Midwestern states with large populations and a heavy manufacturing base are hit particularly hard by tightening air quality standards for ozone and small particulate matter (p.m. 2.5).  On October 1, 2015, EPA strengthened the National Ambient Air Quality Standards (NAAQS) for ground-level ozone to 70 parts per billion (ppb).  EPA will designate areas in late 2017 based on monitoring data as to whether they meet the ozone standard ("Attainment Areas") or do not meet the standard ("Non-Attainment Areas"). States will have until at least 2020 to achieve compliance with the revised standards. 

As the adjacent map demonstrates, Wisconsin, Michigan, Ohio and Pennsylvania (all key states to Trump's victory) will have significant portions of the state designated as non-attainment areas.  The designations will result in more regulation and restrictions on economic growth.

The good news is that U.S. EPA projects that most areas will be able to reach attainment of the new standards as a result of already promulgated federal regulations for gasoline, autos, power plants, and other sources of emissions. U.S. EPA projects that these already promulgated regulations will bring all but 14 of the 241 counties that currently don't meet the 70 ppb ozone standard into attainment.  However, the bad news is that these reductions will not be achieved until 2025, five years past the ozone deadline.  Furthermore, some Members of Congress are trying to block the federal regulations.

As discussed in a recent Congressional Research Service report on the new ozone standard, some while Members in Congress have objected to the federal standards for motor vehicles, fuels, power plants, and other sources.  However, the net effect of repealing them would be to shift the burden of attaining the ozone NAAQS more squarely in the direction of state and local governments. As detailed in prior posts (here and here), the states have very little ability to improve air quality through state specific regulations under required emission reduction plans (State Implementation Plans- SIPs) to meet the NAAQS.  The federal regulations are far more cost effective.

It's not just new regulations that will hamper economic growth in non-attainment areas, it is also mandated restrictions on economic growth.  Under the Clear Air Act, businesses looking to expand or relocate must pay for more costly emission controls in non-attainment areas.  Also, in non-attainment areas any increase in air emissions associated with a business expansion must be offset by reductions from existing businesses before a permit can be issued that allows the expansion to go forward (i.e. "Offsets").  These requirements push businesses to avoid non-attainment areas reducing opportunities for economic expansion.  

A Trump Administration could bring more logic to this regulatory mish mash by resisting calls to roll back the more cost effective federal regulations and by adjusting attainment deadlines to give states more time to take full advantage of federal regulations already on the books. Such actions would also avoid promulgation of costly new local air regulations that will largely do very little to improve air quality.  

Moonshot on Brownfield Redevelopment

A major focus during the campaign was how to improve our urban centers- finding ways to attract development and jobs to our neglected cities.  A highly effective means of giving a boost to our inner cities would be to energize U.S. EPA's brownfield program as well as other brownfield incentives. 

As detailed in a four part series on this blog, brownfields lead to significant decay, social injustice and loss of opportunity (i.e. jobs).  The cost for businesses to expand in our urban centers is often complicated by the cost to cleanup pre-existing contamination.  Those costs are avoided by moving out of the City and developing on greenfields instead.

While brownfield programs have been successful, they have been wholly inadequate to make a significant difference.  If part of the Trump Administration's massive infrastructure program was directed toward brownfield redevelopment, this could be a major shot in the arm promoting capital investment, cleaning up sites that pose public health issues and creating more jobs for those living in the inner city.  

State of Ohio Pursues Recovery of Incentives

Companies expanding onto brownfield sites need public incentives to make their projects viable.  However, the days when cleanup of contamination by itself could attract public incentives are long over.  Under the new local and State brownfield programs companies must make job commitments and/or improvements to the property to attract government assistance.

When companies work with State and local officials to obtain brownfield incentives they must engage in negotiations regarding what they are willing to commit to as part of the project.  These commitments will often extend 3 or more years out into the future when it becomes more challenging to predict economic and business conditions.

The Dayton Daily News discussed the State of Ohio's pursuit to recover incentives from companies that failed to meet business expansion or development commitments.  The DDN reported:

State officials reviewed 329 economic development deals that concluded in 2015 and found that all but 50 had substantially complied with the terms, such as hitting job creation and retention numbers, training workers and generating new payroll.

If companies fail to live up to their promises, the state may demand repayment or make other changes to the deal. In the 50 cases where targets weren’t hit, the state is moving to clawback a collective $776,000. Some of the biggest take backs are being launched against well-known, big companies — Proctor & Gamble Co., U.S. Steel Corp., and The Dannon Co. — for failing to create or retain promised jobs

This is very relevant to JobsOhio brownfield grants and loans provided to companies to assist with sampling or cleanup at contaminated properties.  The grant agreements for the JobsOhio Revitalization Program include contractual commitments to increase payroll, add jobs or make capital investments to expand the business.  For example, at minimum, JobsOhio typically requires 20 new jobs over a three year period to compete for brownfield cleanup grant funding under its Revitalization Program.

The grant agreement language is somewhat vague as to what happens if the grant commitments are not met by the company.  The language does allow for companies to assert that changing economic conditions resulted in unmet commitments.  However, the contract language does leave open the possibility JobsOhio could request return of the entire brownfield grant provided.

It is important that companies pursuing brownfield incentives be aware of the consequences of not meeting commitments.  It is also important to avoid putting forward unrealistic job or capital investment commitments just to attract upfront grant money.  Companies that over commit open themselves up to clawback by the State of the funds provided as well as publicly being outed for failing to live up to their commitments.

First 100 Days- Repeal of the Clean Water Rule and Clean Power Plan

In a major upset, Donald Trump wins the Presidency last night.  In less than twenty-four hours after the official concession by Secretary Clinton, people are scrambling to figure out what a Trump Presidency really means.  Because he was purposefully silent on specifics during the General Election, many are left this morning "reading the tea leaves" to figure out what the future might hold. It is no different when it comes to the future of the EPA and environmental regulations.

Clearly, President-Elect Trump intends to reduce environmental regulation.  Just how far he plans on going has yet to be seen.  However, two of the most significant EPA regulatory actions under the Obama Administration are clearly on the chopping block-  the Clean Water Rule and Clean Power Plan.

What repeal of the Clean Water Rule will mean?

The Clean Water Rule was the Obama Administration's attempt to extend the reach of federal jurisdiction under the Clean Water Act to most waters and wetlands.  To understand the reason for the Clean Water Rule it is important to review the long history that led to is promulgation by EPA.

The CWA limits jurisdiction to "navigable waters" which is defined as "waters of the United States, including the territorial seas." 33 U.S.C. Section 1361(7)  Interpretation of the vague term- "waters of the United States"- has been left largely to guidance and the Courts. The most significant decisions were issued by the Supreme Court in Rapanos and SWANCC. Justice Kennedy, plurality decision in Rapanos held that CWA jurisdiction extended to both navigable waters and any non-navigable water that had a "significant nexus" to a navigable waterway.  

As applied, the "significant nexus" test extends jurisdiction to small tributaries and wetlands separated from large rivers or water bodies.  Under the test, these smaller streams or wetlands fall under federal jurisdiction if impacts to the stream or wetland would affect the "chemical, physical, and the biological integrity of a navigable water."

EPA issued the Clean Water Rule in attempt to better define how the significant nexus test should be applied as well as establish which waterways were exempt from coverage.  The rule was harshly criticized as an overreach by EPA. Soon after its release, the rule was challenged by a number of states and business groups.  The Sixth Circuit Court issued a stay blocking implementation of the rule until the case could be heard.  

There is little doubt the a Trump Administration will repeal the Clean Water Rule as a significant overreach of federal jurisdiction under the Clean Water Act.  However, unless the rule is replaced with a new definition of "waters of the U.S." businesses and individuals will have no regulatory certainty.  Repeal of the rule will mean continuation of the status quo of vague guidance and litigation in the Courts over the extent of federal jurisdiction.  

What will be fascinating to see is whether a Trump Administration is simply satisfied with repeal of the Clean Water Rule or whether the Administration attempts to provide much needed regulatory certainty. One approach would be to limit federal jurisdiction under a new rule and rely on the states to determine which smaller streams or more isolated wetlands should be protected strictly under state law.  Ohio provides a good example of how this regulatory structure could work as it was one of the few states that passed a law protecting isolated wetlands after the Supreme Court decision in Rapanos.

Revoking the Clean Power Plan

It is also clear that the Obama Administration most significant regulatory action- promulgation of the Clean Power Plan- will be undone within the first 100 days of the Trump Presidency.  Years of technical and legal work by EPA went into development of the rule.  However, the rule was based on very tenuous legal grounds.  

After repeal, unlike the Clean Water Rule, there is virtually no chance the EPA under President Trump will replace the Clean Power Plan.  Furthermore, there is a very good chance additional climate change regulatory actions by EPA will be eliminated.  

However, despite those who forecast the end of all climate change related regulation, the Clean Air Act will still exist.  The Supreme Court has already decided that greenhouse gases are a "pollutant" under the Clean Air Act.  What this means is a likely a return the the Bush-era on climate change litigation- Blue States and environmental groups using the Courts to push for regulation or blocking attempts to repeal enacted regulations.  Litigation means less certainty for businesses, however, less regulation is a certainty as well.

Army Corps of Engineers Issues Regulatory Guidance in Response to Hawkes Case

On October 31, the Army Corps of Engineers ("ACOE") issued new guidance as to the types and prioritization of jurisdictional determinations (JDs).  Regulatory Guidance Letter (RGL) 16-01 "Jurisdictional Determinations" has very little new guidance in reality.  However, some key language in the RGL makes clear the real purpose behind the RGL.  

What is a Jurisdictional Determination?

A Jurisdictional Determination (JD) is an official determination of the ACOE as to whether wetlands or streams fall under federal jurisdiction pursuant to the Clean Water Act.  The Corps practice has been to issue either "Approved JDs" or "Preliminary JDs."  

An "Approved JD" is a final legal determination that there are, or that there are not, wetlands or streams under federal jurisdiction. See, 33 U.S.C. 331.2 The "Approved JD" will also identify the geographic limits of the wetlands or streams on the property.  An "Approved JD" can be either issued as a a "Stand Alone Approved JD" or it can be associated with a permit action.  

A "Preliminary JD" is used to expedite the permitting process.  It does not take as much time to issue a "Preliminary JD" because the ACOE simply presumes all the wetlands and streams on the property are jurisdictional.  By presuming all wetlands/streams are under federal jurisdiction, a "Preliminary JD" negates the need for a site visit by the ACOE which expedites the permitting process.  The "Preliminary JD" also will delineate the limits of wetlands on the property.

Hawkes Decision

In United States Army Corps of Engineers v. Hawkes the Supreme Court concluded that JDs issued by the ACOE constitute final agency action under the Administrative Procedure Act thereby allowing immediate review in Court.  This was a big win for property owners who were previously left with administrative appeals before the Army Corps of Engineers to challenge JDs.  

The fact pattern in the Hawkes decision sheds light as to why the ACOE decided to issue the regulatory guidance letter.  The landowner in Hawkes was facing a long and expensive permitting process to allow impacts to wetlands on its property.  Prior to initiating the permitting process, the landowner sought a JD with the hope the wetlands would be determined non-jurisdictional.  When the ACOE determine the wetlands were, in fact, jurisdictional the landowner sought to challenge the determination in Court rather than through an administrative appeal before the ACOE.

Now that the Supreme Court determined JDs can be challenged in Court, the ACOE was concerned that landowners would have a strong incentive to request JDs only to set up legal challenges in Court to the ACOE's jurisdiction.

Real Purpose Behind RGL 16-01

RGL 16-01 is the first RGL issued during the Obama Administration and the first RGL since 2008.  The stated purpose of RGL 16-01 is to clarify the differences behind the an "Approved JD" versus a "Preliminary JD."  The ACOE states the clarification will help the public choose which type of JD may be appropriate for their project.  

The reality is there was little confusion between the types of JDs.  The real purpose of the JD can be found in the following sentence on the first page of the RGL:

"The district engineer should set reasonable priorities on the district's workload and available resources.  For example, it may be reasonable to give higher priority to a JD request when it accompanies a permit request."

This statement makes clear that the ACOE will prioritize processing "Approved JD" request with a permit application versus "Stand Alone Approved JD" request.  The goal is to avoid issuing "Approved JDs" to landowners who may be making the request simply to challenge the JD in court and avoid permitting all together if the court challenge is successful.

Those seeking an "Approved JD" without submitting a permit application may be waiting a long time to get their determination.

Ohio EPA's New Guidance Raises Stakes on Vapor Intrusion

On August 24th, Ohio EPA released new guidance that incorporates an unprecedented approach to vapor intrusion.  Under the new guidance, Recommendations Regarding Response Action Levels and Timeframes for Common Contaminants of Concern at Vapor Intrusion Sites in Ohio, the Agency is for the first time demanding immediate action when contaminant levels exceed certain established "trigger levels."  In the case of one particular contaminant, trichloroethylene (TCE), the Agency expects action within days if the associated trigger levels are exceeded.  The guidance, as outlined below, has major implications for businesses, property owners, consultants and attorneys.

The guidance establishes specific trigger levels for sub-slab and indoor air.  With regard to TCE, it establishes trigger levels for groundwater in addition to sub-slab and indoor air.  Groundwater or sub-slab exceedances will require immediate indoor air sampling.  If indoor air trigger levels are exceeded, immediate action is required in the form of installation of a remedy and/or notifying regulators.  The response times for exceedance of indoor air trigger levels are set forth below.

Response Times for Common Indoor Air Contaminants

Exceeds Indoor Air Risk Standard
Chronic Response Resample or install remedy within 3-90 days
Accelerated Response Coordinate with appropriate state, local and health authorities on response action

 

* Common contaminants include: vinyl chloride, tetrachloroethylene, chloroform, carbon tetrachloride and naphthalene

 

Response Times Specific for TCE

Exceeds Indoor Air Risk Standard
Accelerated Early and interim response actions evaluated within weeks
Urgent Response actions evaluated within days. Consider relocation of residents/occupants
Imminent Immediately contact state, local and public health officials.  Relocate residents/occupants

The Agency made the following public statement following release of the new guidance:

The Division of Environmental Response and Revitalization (DERR) has developed a memorandum on action levels and response timeframes for sites that are being investigated for vapor intrusion of trichloroethylene (TCE) and other associated chemicals. These actions levels and time frames are based primarily upon the short term exposures to TCE and the potential for cardiac malformations in developing fetuses. DERR developed this guidance in consultation with USEPA and use these risk levels and response times when conducting Ohio EPA lead investigations for the CERCLA and RCRA programs. This guidance does not have the force of law, but Ohio EPA recommends its use to outside stake holders, including the Voluntary Action Program (VAP), in evaluating the concentrations of volatile compounds in ground water, soil gas or indoor air in residences and commercial buildings.(emphasis added)

What is unprecedented about this new guidance is the requirement to take immediate action, within days in some cases, based upon risk based screening values.  Historically, vapor intrusion risks were vetted through sampling and analysis, a process that could take a year or more before cleanup was implemented.

Guidance on TCE

TCE is a very common metal degreaser.  As set forth above, the response timeframes for exceedances of TCE trigger levels are particularly aggressive.  Ohio EPA bases its urgent call to respond upon a specific evaluation of the risks of TCE exposure:

“In September, 2011, [U.S. EPA] updated the toxicity assessment for TCE which concluded, in part, that women in the first trimester of pregnancy are one of the most sensitive populations to TCE inhalation exposure due to the potential for fetal cardiac malformations. Because the key steps for cardiac development occur within the first 8 to 10 weeks of pregnancy, exposure to TCE during early pregnancy is of concern.”

To give some perspective as to the number of sites in Ohio that may have some level of TCE contamination, earlier this year, Massachusetts recently announced a TCE initiative in which it reviewed 1,000 closed cleanup sites across the State.  Ohio, a much larger and more industrial state, likely could have more TCE impacted sites. 

Implications of New Vapor Intrusion Guidance

The guidance has major implications for businesses/property owners, consultants and attorneys:

  • Property owners have increased liability risk, in particular if they are aware that trigger levels may be exceeded.
  • Through guidance and training sessions, Ohio EPA has pressured consultants to come forward with data even in instances when their clients may not want the information to be public;
  • It will be critical for attorneys to ensure adequate evaluation of vapor intrusion is included in Phase Is.  While it is a requirement to evaluate vapor intrusion risks under the current Phase I standard (ASTM 1527-13), inconsistencies persist among consultants in evaluation of vapor intrusion in their Phase I reports.
  • Where Ohio EPA has data and wants further evaluation of vapor intrusion risks, the Agency is notifying property owners they must take action or the Agency will proceed with sampling.
  • In early summer, Ohio EPA revoked portions of its prior vapor intrusion guidance that relied upon use of the Johnson & Ettinger model (a less conservative model than U.S. EPA Vapor Intrusion Screening Level (VISL) Calculator).  Ohio EPA still hasn't been clear as to whether it will reopen previously closed cleanup sites that relied upon the Johnson & Ettinger model.
  • While the guidance states it does not have the force of law, EPA is taking action based upon the new guidance.  

 

Expect Dramatic Increases in Federal Civil Penalties for Environmental Violations

On November 2, 2015, President Obama signed into law the Federal Civil Penalties Inflation Adjustment Improvement Act of 2015.  The law required all federal agencies to increase civil penalties with inflation. While there were previous requirements to increase civil penalties, the new law provides for more dramatic increases attributable to the following changes:

  • Requires adjustments annually instead of every four years as had been previously been required;
  • Institutes a "catch-up" period to increase penalties assuming the more accelerated schedule had previously been in place with a cap on total increases of 150% (which is quite dramatic)
  • Formula for the "catch-up" period is based on how much the October 2015 Consumer Price Index (CPI) exceeds the 1990 CPI (called the "cost-of-living multiplier")

The EPA promulgated the Civil Monetary Penalty Inflation Adjustment Rule to establish a schedule for penalty increases including implementation of the "catch up" provision.  The schedule began implementation on August 1st.  EPA described the purpose of the rule as follows:

The primary purpose of the rule is to reconcile the real value of current statutory civil penalty levels to reflect and keep pace with the levels originally set by Congress when the statutes were enacted.  

EPA's Adjustment Rule includes the following increases (there are a range of potential penalties in the Adjustment Rule.  The ranges shown below are for some of the more common violations):

  • TSCA toxic substances violations - go from $25,000 per day to $37,000
  • RCRA-  from $25,000 per day to anywhere from $56,467 to $70,117 depending on the nature of the violation
  • Clean Air Act-  from $37,500 (set in 2009) to $44,539 for EPA administrative penalties and a maximum of $93,750 for penalties assessed by a court (the maximum increase of 150% allowed under the rule)
  • Clean Water Act- from $37,500 to anywhere from $44,539 to $51,570
  • ECPRA and CERCLA- from $37,500 to $53,907

To understand the specific penalty increases for particular violations of the statutes set forth above, consult Table 2 of 40 CFR Section19.4 of the EPA Civil Monetary Penalty Inflation Adjustments Rule.

While EPA still has discretion to seek less than the per day maximum civil penalty set forth in the Adjustment Rule, the rule shows an intent that penalties for environmental violations will be significantly larger even when EPA exercises is discretion.

What to Do in the Event of an Environmental Criminal Search Warrant

Nothing can be more stressful than having your business be the subject of a criminal investigation.  The investigation itself can have serious ramifications for employees, result in lost business as well as interrupt typical business operations.  With so much on the line, your business and your freedom, it is wise to contact legal counsel as soon as you have any indication a criminal investigation may be underway.

How does an environmental criminal investigation get initiated?

  • Disgruntled former employees call investigators
  • A current employee contacts authorities with information
  • A witness or citizen contacts investigators and makes a complaint
  • Sampling performed detects a significant problem
  • Regulators notice inconsistencies in record keeping
  • A significant event- a major spill, improper disposal of drums or dumping

The first time you may learn your company is the subject of a criminal investigation is when agents show up at your business with a criminal search warrant.

How you respond to a warrant or subpoena can have serious ramifications.  Here are some key tips to keep in mind:

  1. Contact Legal Counsel Immediately- While legal counsel will not interfere with the execution of a warrant, they can ensure agents adhere to the scope of the warrant.  They may also be able to observe the agents and see what pictures or documents they take during execution of the warrant..  Even if you believe you have nothing to be concerned about, owners and/or senior executives should not be interacting with agents. Attorneys can make sure during execution of the warrant the company demonstrates the proper level of cooperation without exposing their client to unnecessary risk.
  2. Information Regarding the Agents and Purpose of Investigation- Business cards should be requested from the lead agent and/or all agents conducting the search.  The attorney should open up a line of communication with the agents regarding the scope of the criminal investigation.
  3. Scope of the Warrant- Read the warrant or subpoena carefully.  Determine which portions of the facility and documents are covered.  Does the warrant allow for the seizure of computers or other equipment?  It is important that investigators are limited to the scope to the warrant.
  4. Do Not Interfere with the Warrant- Trying to prevent agents from taking items covered by the warrant or preventing access to records can result in obstruction of justice charges. 
  5. Inventory of Seized Items- Request a copy of the inventory of seized times so you know what was taken during execution of the warrant. 

How do you respond if the agents seek to interview employees during execution of the warrant?

This can be a complicated issue and should be left to your legal counsel.  The owner of the company or senior executives should not and cannot instruct employees to not talk with investigators.  Such directives from senior management could be deemed as improper, or even illegal by the agents.  Employees can be informed they have the right to speak or not to speak and can also request that individual legal counsel be present before being questioned.

Who exactly an attorney may represent in a criminal matter is much more complicated than a civil case.  Generally, in an environmental criminal investigation, an attorney cannot ethically represent the company, owners, senior executives and all the employees of the company.  At best, one attorney can represent the company and senior executives and a separate attorney/firm would be retained to represent all non-target employees who desire the assistance of counsel. ("Target"- means an employee identified by investigators as possibly guilty of a crime)  Depending upon the circumstances, each owner and or senior executive may even need separate counsel.  This separation is important to avoid any conflicts that may arise between those that may have criminal culpability, and those that do not.

U.S. EPA's July Environmental Crimes Bulletin- Failure to Notify, Falsification and Waters of the U.S.

Here are the highlights from U.S. EPA's July Environmental Crimes Case Bulletin:  

Failure to Notify Regarding Asbestos

A Company had sampling performed to determine if the walls and ceiling of a riverboat they were going to demolish contained asbestos.  The samples indicated they did contain asbestos.  According to U.S. EPA, the company hired a demolition contractor and told the contractors that the walls and ceiling "may" contain asbestos.  The contractor proceeded to perform the demolition work without instructing its workers to take proper precautions.  A key reason why U.S. EPA elected to pursue a criminal case versus civil enforcement was likely the potential exposure of workers to asbestos.

Waters of the United States

An area of environmental law with continued uncertainty is which streams and wetlands are considered "Waters of the United States" and, therefore, fall under the jurisdiction of the Clean Water Act.  The U.S. EPA's "Waters of the U.S." Rule has been stayed by the 6th Circuit.  The test for determining which waters/wetlands are federally protected continues to be the "Significant Nexus" Test as established by Justice Kennedy in Rapanos.

The "Significant Nexus" test is rather vague.  Under the test, a waterway or wetland is evaluated to determine whether it impacts the "chemical, physical, and the biological integrity" of a navigable water. If it does impact a navigable water in that manner, then it falls under federal jurisdiction

A key issue at the trial of Joseph David Anderson was whether the ponds Mr. Anderson created resulted in dredged material and sediment which impacted "Waters of the U.S."  The Army Corps of Engineers and EPA provided the scientific evidence to support a finding the impacted waters had a "significant nexus" to downstream waters and were, therefore, federally protected.  Testimony included fishery biologists from U.S. Fish & Wildlife that the headwater streams impacted provided critical support of trout in downstream rivers.  

Despite the vague legal standard at issue, it is interesting that the Government successfully applied the "Significant Nexus" test during a criminal trial.  

Falsified Records

A common criminal charge in environmental white collar cases is falsification of records required to be kept under environmental permits or regulations.  The latest criminal bulletin includes a case of a German shipping company and its employees that did not record transfers of oily waste-water on the M/V Cornelia, a German-owned commercial vessel.  EPA charged the company with falsified record keeping stating the omissions were a attempt to conceal discharges of oily-waste water overboard.

The case is a reminder that it is not just the act of entering false data that can lead to a charge of falsification.  It can also be the omission of important information.  

Five Things to Expect from State EPA Regulators After the Flint and Sebring Water Crises

On July 29th, the Michigan Attorney General Bill Schuette charged six more public officials in connection with their roles in the Flint Water Crisis.  One of the six charged included a senior management official at the Michigan Department of Environmental Quality (MDEQ)- the former Chief of the Office of Drinking Water and Municipal Assistance. The latest charges are in addition to the two MDEQ officials charged in April.  

Attorney General Schuette stated:

"Many things when tragically wrong in Flint.  Some people failed to act, others minimized harm done and arrogantly chose to ignore data.  Some intentionally altered figures and covered up significant health risks."  (emphasis added)

Ohio experienced its own issues with drinking water in Sebring Ohio.  In January, Ohio EPA fired two employees for failing to timely provide information to the District Office deemed critical to providing timely information regarding the condition of water in Sebring.  Here is what Ohio EPA's Press Release said about the reason for terminating the employees: 

"Ohio EPA Central Office employee responsible for sending laboratory results from the Central Office failed to ensure that data was provided to the field office to help them conduct their review...The employee’s supervisor is also being terminated for not properly managing an employee who had an existing record of performance issues and not providing appropriate corrective counseling or progressive discipline despite being instructed to do so."

Ohio EPA also announced that it established a new process to provide staff with a direct and expedited communication route to senior Ohio EPA officials of situations that have possible “significant environmental and public health consequences.”

It is rare for State environmental protection agencies to fire employees for not performing their job.  It is even more rare for criminal charges to be brought against State EPA employees relating to performance of their job functions.  The firings and criminal charges have garnered national attention.  The crises have, no doubt, had an effect on the cultural and work environments of State EPA.s

Here are five things businesses can expect:

  1.  More Aggressive Deadlines-  One of the themes from Flint and Sebring was whether officials acted on information on a timely basis.  Also, whether officials raised public health issues up the chain quickly.  As a result, it is likely regulators will be demanding more aggressive deadlines for businesses to address non-compliance and/or investigate issues.
  2. Demand for Action-  Regulators will have less tolerance for debating over appropriate responses to ongoing violations and/or investigating issues.  If businesses don't respond in a timely fashion (in the Agency's viewpoint) or refuse to take the steps the Agency believes are appropriate, regulators will takes action.  This could be performing sampling using Agency resources (not waiting for businesses to sample).  This could be referring matters up the chain more quickly for enforcement.  
  3. Less Deference to Outside Technical Consultants-  Regulators will be less willing to defer to the private sector to decide how to appropriately respond.  Historically, it was common place for private consultants and agency representatives to debate technical issues.  With the pressure on agency employees to perform their duties quickly this will likely translate to less deference to private consultants.
  4. More Involvement of Management in Decision Making-  Another theme from both Flint and Sebring was whether agency employees made management aware of issues in a timely fashion.  For example, Ohio EPA announced a new protocol for making senior management aware of "public health" issues quickly.  What constitutes a public health issue or  potential issue is vague.  Lower level employees will be more inclined to raise issues up chain of command to management.  In some cases, even directing businesses to address correspondence directly to senior management when that same correspondence would have gone to staff just a year ago.
  5. Changing Work Environments-  Even though environmental regulators perform a critical function, the stereotype is that government workers have less stress and more reasonable work hours then their counterparts in the private sector. With the added pressure and spotlight these recent news events have brought, there will be changes in the work environment within State EPAs.  These "cultural" changes will also be felt by businesses, consultants and individuals that interact with regulators. 

Like Ohio, TCE Gets Attention in Massachusetts

Ohio is not the only state that is reviewing all sites that have trichloroethylene (TCE) contamination. Massachusetts Department of Environmental Protection (MassDEP) recently announced that is was going to review 1,000 closed sites with TCE contamination.  MassDEP will evaluate the sites "based on the current understanding of health risks, even if the site was previously closed properly under earlier standards."  

Unlike Ohio, MassDEP issued a public statement in April 2016 that it discussing its review of TCE Sites. Ohio EPA has not made a public announcement similar to Mass DEP.  Rather, Ohio EPA has discussed its review in meetings with environmental consultants and through issuance of letters and requests for information to sites with TCE contamination.

TCE was widely used as a degreaser for industrial metal parts and as an extraction solvent for organic oils. As a result of its use, TCE contamination related to use of solvents is very common at manufacturing sites.  

A discussed in the MassDEP announcement, the heightened scrutiny of sites with TCE contamination was based, in part, on a 2011 review to the U.S. EPA toxicity information.  The review included assessment of the potential for fetal developmental effects following even short-term exposure to TCE contamination.  As a result, the standards related to TCE have become significantly more stringent.

MassDEP provided a comparison of the levels of concern from 2011 to 2016 which shows the TCE standards:

Changes in TCE Risk-Based Levels in Massachusetts
Pathway 2011 Level of Concern 2016 Level of Concern
Indoor Air (Residential) 85 ug/m3 6 ug/m3
Groundwater (near residences)

300 ug/l pre-2006

50 ug/l post-2006

5 ug/l
Health Effect of Concern Long-term cancer risk Short-term development effect

 The primary pathway of concern in both Massachusetts and Ohio is vapor intrusion (volatilization of contaminants into the indoor air of a building).  Ohio's current indoor air standards are relatively comparable to MassDEP.

Ohio TCE Indoor Air Standards
Pathway Standard
Residential 2.1 ug/m3
Commercial Industrial 8.8 ug/m3

Continued developments with regard to TCE are surely forthcoming.  As the new significantly more stringent standards get implemented property owners and site developers that have TCE contamination will need to proceed cautiously.  This includes sites that previously completed investigations or cleanup activities.