The D.C. Circuit Court of appeals issued a major rebuke to those who believe climate change is no longer relevant in environmental reviews.  In Sierra Club v. FERC, No. 16-1329 (D.C. Cir. Aug. 22, 2017), the Court agreed with environmental groups, including the Sierra Club, that the Federal Energy Regulatory Commission (FERC) failed to adequately analyze greenhouse gas emissions as part of a $3.5 billion dollar natural gas pipeline project.  The project involves construction of a 500 mile long pipeline through Florida.   

FERC Review Authority

The Natural Gas Act (NGA) provides FERC the authority to review and approve interstate pipeline projects, including the environmental impacts associated with the project.  Section 7 of the NGA requires the pipeline owner to obtain a "certificate of public convenience and necessity" from FERC (i.e. Section 7 Certificate).  One component of the Section 7 review is compliance with the National Environmental Policy Act (NEPA) which includes FERC’s preparation of an "Environmental Impact Statement" (EIS).  

The Sierra Club argued that the FERC, in performing it EIS, failed to adequately consider the impacts of emission of greenhouse gases associated with the project.  Specifically, the pipeline would supply natural gas to power plants in Florida which would generate additional greenhouse gas emissions by burning natural gas.  

The Court said NEPA required FERC to consider both direct and potentially indirect impacts from those emissions.  

  • Direct Impacts– quantitative estimate of the downstream greenhouse
    emissions that will result from burning the gas transported by the pipeline or explain in detail why such a estimate cannot be provided;
  • Indirect Impacts- the court did not specify what indirect impacts, which leaves open the question of whether the EIS must analysis whether greenhouse gas emissions will result in more severe storms, agricultural impacts, etc.

Impact of the Decision

First, the decision demonstrates greenhouse gas issues are still alive and well.  FERC must take steps to analyze greenhouse gas emissions as part of its EIS review.  

Second, the decision doesn’t mean the Court took a negative view of natural gas pipelines.  In fact, the Court specifically stated there can be both negative and positive impacts in terms of greenhouse gas emissions from these project.  For example, burning natural gas made available via the pipeline may allow higher emitting coal fired power plants to shut down thereby reducing greenhouse gas emissions overall.

Third, perhaps the biggest impact will be seen on challenges to other projects that must get FERC approval.  The requirement to include evaluation of impacts of projects on greenhouse gas emissions could result in other projects being successfully challenged in Court and may also delay some projects in order to allow required analysis to be included as part of the EIS.

While the Trump Administrations primary environmental agenda has been focused on deregulation, one area EPA Administrator Scott Pruitt has prioritized is Superfund (i.e. CERCLA).  Superfund is meant to investigate and cleanup the dirtiest sites in the country.  However, its long and complicated investigation, remedy selection and cleanup implementation processes have slowed cleanups to a crawl.  It is certainly a program much in need of an overhaul.

Administrator Pruitt created a task force to provide recommendations for improvement of the Superfund program.  The Administrator stated his goal was to "restore the Superfund program to its rightful place at the center of the agency’s core mission."  

The task force was given five goals:

  • Expedite cleanup and remediation;
  • Reinvigorate cleanup and reuse efforts by PRPs;
  • Encourage private investment to facilitate cleanup and reuse;
  • Promoting redevelopment and community revitalization; and
  • Engage with partners and stakeholders.

Ideas were evaluated in each of these areas.  The Administrator notes that some of the 42 strategies recommended will take time, including rule changes.  However, he identified strategies that he has directed the task force to immediately implement, including::

  1. Take immediate action at sites where the risk to human health are not fully controlled;
  2. Use interim or removal actions more frequently to address immediate risks;
  3. Prioritize sites for Remedial Investigation and Feasibility Studies (RI/FS) that require immediate action;
  4. Identify contaminated sediment or complex groundwater sites where adaptive management can be implemented;
  5. Evaluate redevelopment potential for NPL sites;
  6. Track remedy selection in real time with Superfund Enterprise Management Systems;
  7. Focus resources on NPL sites with most reuse potential;
  8. Identify sites for PRP-lead cleanup to spur redevelopment;
  9. Submit the total indirect costs charged to PRPs for 2016 and 2017
  10. Encourage PRPs to work with end users to voluntarily perform assessment and cleanup to spur redevelopment;
  11. Use purchase agreements for potential Bona Fide Prospective Purchasers outlining their actions necessary to preserve their BFPP status;
  12. Use unilateral orders against recalcitrant PRPs to discourage proactive negotiations of response actions; and
  13. Maximize deletions and partial deletions of sites that have been cleaned up.

For the task force’s full report click here.

What can we learn from the List of Priority Items?

Vapor Intrusion 

The most immediate take away is that sites that present vapor intrusion risks to on-site or adjacent property owners will be a priority.  In the last five years, vapor intrusion has become a major focus of both U.S. EPA and State EPA’s.  

The vapor intrusion pathway is often seen as the most immediate and direct public health threat presented by sites.  Therefore, it is logical to assume that and Superfund sites that present vapor intrusion risks will be prioritized.  Based on the strategies outlined above, it is very likely that we will see an increase in the use of unilateral enforcement by the EPA Region’s to address vapor intrusion risks.  

Slow Moving Sites

The task force has targeted sites that have taken "far too long to remediate."  The task force will establish a "Administrator’s Top Ten List" that will get weekly attention.  Sites that have been on the NPL for five years or longer without "significant movement" will be reviewed.  

Unfortunately, without a major overhaul to the National Contingency Program (NCP) which governs Superfund, the report and recommendations are highly unlikely to result in significant acceleration of cleanups.

Sites with Redevelopment Potential

Several of the Administrator’s recommendations focus on targeting sites with redevelopment potential.  For these sites it is possible that the Agency will be more flexible to voluntary cleanup programs that could put land back into productive use more quickly.  Following the traditional long and drawn out investigation, remedy selection and implementation will not put property back into productive use quickly.

EPA has shown greater flexibility toward accepting state brownfield voluntary cleanup programs.  The focus on redevelopment by the task force provides an opening to PRPs and developers to, perhaps, leverage greater acceptance of these state voluntary brownfield cleanup programs. In reality, leveraging state voluntary cleanup programs may be best opportunity to accelerate cleanup at Superfund sites.

This blog has previously detailed some of the ambiguity of the Voluntary Action Program ten year automatic tax abatement provisions set forth in Revised Code 5709.87. (See prior posts here and here). Three primary issues caused significant problems for developers attempting to leverage the VAP automatic tax abatement:
  1. How to value the abatement- The prior law was ambiguous as to how to value the abatement;
  2. Timing- The timing for locking in the tax abatement was difficult to navigate causing some developers to lose out on millions of dollars in tax abatements; and
  3. Exclusion for New Improvements and Structures- Until an Ohio Supreme Court ruling, the law was somewhat unclear as to whether the abatement covered the land and only existing buildings.  The Ohio Supreme Court clarified that new improvements and buildings were not covered by the automatic tax abatement. 

House Bill 463 included language to fix the first two issues. (H.B. 463 changes to R.C. 5709.87)

How to Value the Abatement

The act specifies that the beginning point for measuring the increase in value subject to abatement is the beginning of the year in which environmental remedial activities began.  Under the prior law, the value was based  upon the date of issuance of the tax abatement order by the Tax Commissioner.  At the start of a brownfield project, it wasn’t certain which year would be used as the base value for determining the exemption.

The changes enacted through House Bill 463 specify that the exemption is to measured using the year remedial activities were initiated as the base year.  Each of the ten years during which the property is exempted, any increase in value from the base year is exempted from taxes.

Timing

The other issue with the prior law related to timing.  The date of the exemption and calculation of the value of exemption was not tied to a specific year.  Rather, the exemption was tied to the tax list of the year prior to when the Tax Commissioner issued their abatement order.  The fact the value "floated" with the date the Tax Commissioner issued their order meant it was difficult to secure the full value of abatement. 

For example, assume remediation commenced in 2012 and the property was valued a $1 million. The VAP Covenant-Not-to-Sue (CNS) is issued in 2015.  By 2015, some improvements were completed and the property doubled in value to $2 million.  The Tax Commissioner issues the abatement order in 2016, which means the 2015 tax value (not the 2012 value) would be used to determine the value of the abatement.  This means the developer would lose out the abatement for the increase in taxes associated with property values increasing between 2012 and 2015.

This created challenges for developers who had to time completion of improvements with completion of the VAP CNS and Tax Commissioner Order.  Some developers didn’t plan correctly or were confused by the law and lost out on millions in abatement. 

For instance, once Cincinnati company lost out on a potential tax exemption on a $4 million dollar increase in the value of the property simply because the paperwork was not issued by the government officials in a timely fashion.  see, Hamilton Brownfields Redevelopment LLC v. Zaino, Tax Commissioner of Ohio.

On June 6, 2017, EPA Administrator Scott Pruitt notified states that U.S. EPA was extending by one year the deadline for designating those areas in non-compliance with the 2015 ozone standard.  The 2015 ozone standard is 70 parts per billion (ppb), which is lower than the prior ozone standard of 75 ppb established in 2008.

Once U.S. EPA  adopts a new ozone standard it must go through the formal process of designating areas in non-compliance with the standard based upon monitoring data maintained by the states (i.e. "Non-Attainment Areas").  Once Non-Attainment Areas are designated, those areas of the country face tougher permitting requirements and additional regulations to reduce emissions.  

Under the Clean Air Act, EPA had two years to finalize the designations.  Administrator Pruitt’s action moved the deadline for designations from October 1, 2017 to October 1, 2018.  

While a one year extension may not seem long, it has dramatic ramifications for states.  As previously discussed on this blog, there are a host of federal regulations targeting power plant and vehicle emissions that are phased in over time.  The more time states are given before designations take effect, the more states can take advantage of the existing federal regulations with are phased in over time.

Meanwhile, Murray Energy Corp v. EPA, Case No. 15-1385, the litigation challenging the 2015 ozone standard, is still pending in the U.S. Court of Appeals for the D.C. Circuit.  The standard was challenged by some companies and states.  

After the change in Administrations, Administrator Pruitt filed a request to stay the litigation while it reviewed the 2015 ozone standard.  On April 11, 2017, the Court granted EPA’s request. It is unclear whether EPA’s decision to delay the implementation of the standard means it is not actually reconsidering the standard, but from the public comments released by EPA it appears likely it will revoke the 75 ppb standard.

EPA did not provide any clear guidance in its press release announcing its decision to delay implementation of the rule.  However, the public statements in the press release and Administrator Pruitt’s letter were interesting as they show a dramatic shift in how EPA views air quality standards since the Administration change.  Here ares some examples of the statements that show the change in priorities:

  • Areas designated as being in “nonattainment” of the standard face consequences, including: increased regulatory burdens, restrictions on infrastructure investment, and increased costs to businesses (It is unusual to see EPA discussing the burden on business rather than the public health benefits from lowering the standard)
  • EPA is giving states more time to develop air quality plans and EPA is looking at providing greater flexibility to states as they develop their plans. 
  • Since 1980, total emissions of the six principal air pollutants have dropped by 63 percent and ozone levels have declined by 33 percent. Despite the continued improvement of air quality, costs associated with compliance of the ozone NAAQS have significantly increased.(Another unusual statement to be found in an EPA press release related to ozone.  Historically, EPA discusses the improvements in air quality, associated health benefits while the U.S. economy has continued to grow)

Based on the statements communicated in the press release and in EPA Administrator’s letter to the states it seems very likely EPA will take the controversial step of moving the ozone standard from 70 ppb to 75 ppb which was put in place in 2008.  It is clear the Administration is focused on increased compliance costs to business rather than citing to the public health benefits attributable to a lower standard.

 

The Trump Administration has made rollback of environmental regulations a top priority.  Through the use of Executive Orders and the Congressional Review Act(CRA), the Administration has already undone significant Obama era regulations, including the Waters of the U.S. Rule (WOTUS) and the Clean Power Plan.

The Trump Administration has also proposed significant budget cuts to EPA which could result in the reduction of 31% in federal funds to EPA and result in layoffs of 3,200 EPA workers. Budget cuts to State EPAs through reduction of state categorical grants have also been proposed. These cuts to federal funds could lead to reduced staff at State EPAs across the country.  

While the regulatory rollback and reduction in EPA staffs move forward, donations to major environmental groups around the country have surged since the election.  As reported in the Washington Times, the Sierra Club has reported an increase of 700% in donations since the election.  Across the board, green groups, like the NRDC are reporting a surge in donations.

Putting the New Money to Work

Whether it is the EPA budget reductions or EPA’s exercising enforcement discretion, most anticipate EPA federal environmental enforcement will be on the decline under the Trump Administration. While EPA may not bring suits, many long time environmental legal practitioners anticipate a surge in green groups use of citizen suit provisions to fill the void on enforcement.  

Almost all of the major federal environmental statutes include a "citizen suit" provision that allows individuals and groups harmed by environmental violations to step in the shoes of EPA and sue companies to address violations and pay civil penalties.  Such provisions are included in the Clean Air Act, Resource Conservation and Recovery Act (RCRA) and the Clean Water Act.  Why do many anticipate a surge in such suits?

  • Justify Donations– Green groups will show that increased donations are being put to work by taking enforcement to fill the void left by a less active EPA;
  • Easy Access to Monitoring Data– Permit compliance and monitoring data is readily accessible online through EPA databases like ECHO or state database counterparts.  This makes it increasingly easier for green groups to identify violations that have gone unaddressed;
  • Civil Penalties-  The citizen suit provisions allow groups to assess civil penalties.  Under law, any civil penalties must go to the U.S. Treasury.  However, groups have used creative approaches like Supplemental Environmental Projects (SEPs) to direct funds to environmental improvement projects or funding local groups;
  • Attorney Fees- Perhaps the biggest incentive to utilize citizen suit provisions is the attorney fee provision.  Courts have established a low threshold for recovery of fees.  This makes it easy for groups to recover their investigatory and legal expenses in pursuing actions; and
  • Lack of Availability of the Diligent Prosecution Defense-  Not only will reductions in EPA staff and resources lead to less enforcement, it also makes it less likely that companies will be able to secure "friendly" administrative or judicial enforcement orders used to block citizen suits during notice periods.  The 60 or 90 day notice periods are meant to give time to allow for state or federal regulators to take appropriate action to resolve violations after receiving notice of a potential citizen suit (i.e. "diligent prosecution" defense).

"New" Citizen Suit Legal Theories

In is not just an anticipated increase in the number of citizen suit actions brought, most see an expansion of the types of harms such suits are used to address.  Across the country, green groups have already utilized long-standing citizen suit provisions to bring creative new causes of action, including:

  • Tennessee Riverkeeper, Inc. v 3M Company- Environmental group have brought a RCRA imminent and substantial endangerment claim against 3M for historical releases of teflon related substances (PFOA/PFOS) which are not currently regulated by EPA.  The Court denied a motion to dismiss the action;
  • Sierra Club v. Chesapeake Operating LLC- Brought RCRA imminent and substantial endangerment claim for earthquakes in Oklahoma allegedly caused by disposal of water from oil and gas extraction;
  • Conservation Law Foundation v. ExxonMobil Corp.-  Alleging imminent and substantial endangerment under RCRA due to climate change; and
  • Upstate Forever and Savannah Riverkeeper v. Kinder Morgan–  Claims brought under the Clean Water Act alleging passive migration of contaminated groundwater to surface water from an oil spill was a violation of the Clean Water Act.  The case was dismissed after the Judge ruled plaintiffs failed to allege facts demonstrating migration of groundwater constituted a "point source" under the Clean Water Act.

Suing EPA to Compel Non-Discretionary Acts

Green groups have always sued EPA to compel the Agency to promulgate regulations or take action that are required under environmental statutes. The Administrative Procedure Act (APA) allows green groups to bring suit to compel an agency action unlawfully withheld or unreasonably delayed. See, 5 U.S.C. Section 706(1).  

Because the Trump Administration will be less inclined to promulgate new environmental regulations, there will almost certainly be a major increase in suits against EPA to compel action. Unlike under the Obama Administration, which resolved many of these suits using consent orders, the Trump Administration will be far less inclined to settle.  This will inevitably lead to long and protracted litigation.  A recent article in the Legal Intelligencer by Kenneth J. Warren discusses the complications for Courts facing these suits to compel EPA to perform non-discretionary duites.

In the past several months, the Trump Administration has targeted U.S. EPA for major regulatory reform, massive budget cuts and a roll-back of Obama era regulations.  No Administration since the enactment of the landmark environmental statutes has gone as as far as the Trump Administration in attempting to change the landscape of environmental regulation.

After signing multiple executive orders and proposing a huge EPA budget cut, rumors are swirling as to what may be next. This creates a massive amount of regulatory uncertainty which is something businesses always say they hate.  This uncertainty extends to what the size and structure of what U.S. EPA will look like under the Trump Administration, including which Regional Offices will remain if the budget cuts and staff layoffs are implemented.  

Recently, one rumor causing significant uncertainty is whether EPA’s Region V Office, located in Chicago, will be eliminated.  Region V covers Ohio, Illinois, Michigan, Wisconsin, Indiana and Minnesota.   

Both Ohio Senators along with ten others in the Great Lakes congressional delegation wrote to EPA Administrator Pruitt strongly opposing closing of the Region V Office.  This from the Plain Dealer Article discussing the letter:

Recent reports that the U.S. EPA’s Region 5 office, which is based in Chicago and includes Ohio among other Great Lake states, will be shut down has alarmed members of Ohio’s Congressional delegation and other representatives of the five states of the Great Lakes region.

On Tuesday, Senator Rob Portman, R-Ohio, joined Senator Sherrod Brown, D-Ohio, and a coalition of Democratic senators and house members in delivering a letter to EPA Director Scott Pruitt expressing their concern over the proposal, and demanding he not relocate Region 5’s 1,500 employees to the Region 7 office in Lenexa, Kansas.

"Closing EPA’s Region 5 office would have a devastating effect on those who call Illinois, Michigan, Wisconsin, Indiana, Minnesota and Ohio home," the letter reads. "Therefore, we urge you to protect the environmental health and well-being of our states by keeping Region 5 intact and fully supporting its critical mission."

The focus of the letter is largely on consequences to public health and the environment, including the Great Lakes.  However, it is also worth noting the negative economic impacts elimination of the Regional Office would have on a region President Trump has stated he wants to help.

While delegated State EPAs handle most of the permitting for new factories or plant expansions, EPA plays a critical role in reviewing draft permits.  Until such permits are issued construction is limited and the new operations cannot commence.  Region V staff also address a myriad of issues that directly impact economic growth.  Without adequate staff permitting and decision making will slow.

The Midwest still has significant manufacturing.  President Trumps says he wants to keep or bring back U.S. manufacturing jobs.  Having adequate personnel to process permits and address other regulatory issues that impact economic development are critical to that effort.   

Let’s hope this is just another rumor.  However, these types of rumors are not helpful due to the uncertainty they create.  For example, if a business is currently thinking of expanding or locating in the Midwest, the inability to secure timely permits or address other regulatory decisions that impact economic growth could cause businesses to rethink locating in the region.

JobsOhio launched a new site selection tool called SiteOhio designed to provide easy access to businesses looking for locations to either develop new facilities or buy/lease existing buildings.  The easy to use web based tool allows you to search by the following parameters:

  • Available buildings of a certain size
  • Vacant land based on acreage
  • Businesses that may be for sale
  • Properties in specific communities by either city or county

The site selector tool allows you to compare filter properties by energy or broadband capability or labor force.  The tool is designed to allow businesses to more quickly identify sites that meet their needs.  

The site is also designed to certify sites as ready for development with available utilities, zoning, etc. The site hasn’t yet been fully populated with available sites, but JobsOhio will ensure that happens over time. Communities will be encouraged to go through the JobsOhio site authentication process to have sites in their communities certified as ready.

The JobsOhio authentication process is designed to identify sites that are "ready to develop on day one, saving businesses time and money."  JobsOhio in its announcement described the authentication process as follows:

“Through the SiteOhio authentication process, each site undergoes a usability audit designed to vet sites with companies in mind. All due diligence studies look to ensure strict criteria are met, as well as utilities and other site assets are on site, with excess capacity and accessible for doing business,” JobsOhio said in announcing the tool.

The site doesn’t include other information that may be key to determining suitability of a site, such as:

  • Taxes
  • Ease of permitting
  • Capacity of sewers
  • Availability of water

Implications for Brownfield Redevelopment

As JobsOhio stated in its announcement regarding the site selection tool, the purpose is to identify sites "ready to go on day one."  This certainly would not include brownfield properties.  A quick search of industrial properties by acreage shows a number of greenfield sites, typically industrial parks ready for development.  A quick search of available buildings identified mostly sites that would not qualify as traditional brownfield properties.  

While the tool is an excellent idea to expedite identification of readily available sites for development, the site selection tool will not encourage reuse of urban sites.  If the goal is of the site selector tool is to populate sites "ready to go on day one," then in order to encourage redevelopment of brownfield properties this would appear to encourage reconsideration of programs such as the Clean Ohio Redevelopment Ready Program.  Under this program, Clean Ohio funds were used to address environmental issues at brownfield sites upfront to facilitate reuse.

The Trump Administration has been slow to announce appointments to key positions within U.S. EPA. Administrator Scott Pruitt is in many ways  is operating on a island within the Agency. As reported in the New York Times, the Administration has not nominated any of the dozen key EPA senior positions:

At the Environmental Protection Agency, Scott Pruitt, the administrator, was confirmed by the Senate last month, and he has hired a chief of staff and a few others. But the White House has yet to nominate anyone to fill another dozen key jobs requiring Senate confirmation, like the assistant administrators who oversee clean air and water regulation

At the same time Administrator Pruitt is restricting decision making authority throughout the ten Regional Offices.  As first noted on the blog Law and the Environment, the following memorandum was recently sent to Regional Offices:

Because the Presidentially-appointed Assistant Administrators and Regional Administrators have yet to assume their duties, for the next 30 days, the Administrator wishes to retain approval authority for Agency actions having significant regulatory and enforcement effect. The Administrator will rely on the Acting RA’s and AA’s to identify and send upward any proposed decisions or final agency actions for the Administrator’s review which, in the judgement of the Acting RA’s and AA’s would limit the flexibility of the States, limit energy resource use, impose significant costs on industry or commerce, or otherwise likely result in significant public attention on the proposed decisions or final agency actions (emphasis added)

The underlined language provides a broad description of the types of actions the Administrator expects to be sent for his review and approval.  This will certainly cause a slow down on decision making at the Agency.

These developments could have both good and bad implications for businesses.  It is likely the rulemaking and enforcement will be slowed.  However, for businesses working through permitting, compliance issues and settlement of enforcement actions, these developments could have the negative effective of slowing the pace of reaching a final resolution or obtaining a necessary permit. 

Developments that have small impacts to wetlands (typically around 1/2 acre or less) or streams (typically around 300 feet or less) have been able to qualify for expedited permitting known as Nationwide Permits (NWP).  Projects with greater impacts must obtain individual wetland or stream permits known as a 404 Army Corps Permit and 401 Ohio EPA Water Quality Certification (click here for Basics of Wetland Permitting).

Most developers try to arrange their development projects to stay under NWP thresholds if at all possible due to the time and cost savings associated with expedited permitting, which include:

  • Time Savings- NWP time frame 3-6 months versus 12-18 months for individual 404/401
  • Costs Savings- Permitting preparation range can be from $8,000 to $15,000 or more in cost savings just in permit preparation costs

The process for developing NWPs starts with the Army Corps of Engineers proposing NWP for the entire country under its 404 Clean Water Act authority.  Each individual state has the option of placing restrictions on usage of the NWPs under its 401 Clean Water Act authority.  The NWPs once finalized are effective for five years.

On March 17, 2017, Ohio EPA finalized its 401 water quality certification for the 2017 NWP.  The 2017 new NWPs are effective from March 19, 2017 through March 18, 2022.  

Under the new 401 water quality certification, Ohio EPA has placed significant limits on the use of the expedited permits for impacts to high quality streams in Ohio.  The Agency has developed a color coded map that designates areas into three categories:

  • Ineligible Areas (Purple)– Any impacts to streams in these areas are ineligible for coverage under NWP.  Any project with stream impacts in these areas must pursue an individual 404/401 permit.
  • Possibly Eligible Area (Yellow)–  Any impacts to streams in these areas require additional work before an applicant will be eligible for a NWP.  The applicant must:
    • Take pH values
    • Perform a habitat assessment- Qualitative Assessment Habitat Evaluation Index (QHEI) or Headwater Habitat Evaluation Index (HHEI) assessment of the stream. 
  • Eligible Areas (No color code)– any proposed  impact to streams within the project area are eligible for NWP coverage.

 In Northeast Ohio, the much of the Rocky and Cuyahoga River watersheds are color coded purple (ineligible for NWPs).  These new restrictions will have significant consequences for developers and property owners throughout Ohio.

This week, President Trump released his Administration’s first federal budget dubbed the "America First- A Blueprint to Make America Great Again."  Under the budget proposal, U.S. EPA current budget would be cut by 31% which amounts to a $2.6 billion dollar reduction.  

This leaves the Agency with $5.7 billion to run its programs which is the lowest amount funding provided U.S. EPA since 1990.  As reported by POLITICO, the proposed budget cuts would force U.S. EPA to layoff 3,200 workers. 

Since 1990, environmental regulation and science has advanced significantly.  As a result, numerous new programs have been added, including: climate change, protection of the Great Lakes, improving air and water quality standards.  

In the early years of environmental regulation the "easy" pollution reductions were achieved first. Additional reductions become much more challenging.  As a result, environmental permitting (NPDES, Title V, New Source Review) has become far more complex.

A drastically reduced workforce at the state and federal level will make implementation of these programs impossible and threaten to compromise the progress made over the last forty years.  The improvements to air and water quality since environmental regulations were implemented in the U.S. are well documented:

  • From 1970 to 2015, aggregate national emissions of the six common pollutants alone dropped an average of 70 percent while gross domestic product grew by 246 percent. This progress reflects efforts by state, local and tribal governments; EPA; private sector companies; environmental groups and others.
  • In the forty years since passage of the Clean Water Act there has been dramatic improvement to U.S. waterways:
    • Only about a third of U.S. water was safe for swimming or fishing. Now, an estimated 65% pass the fishable and swimmable test;
    • Before passage of the Clean Water Act, the country was losing up to 500,000 acres of wetlands per year. With wetland regulations, average wetland losses have fallen below 60,000 acres per year; and
    • Before the Clean Water Act and Safe Drinking Water Act, 30% of tap water samples exceeded federal limits for certain chemicals. According to a 2012 EPA report, 90.7% of U.S. community water systems met “all applicable health-based standards” in 2011.

The President’s EPA budget blueprint has a stated goal of shifting authority back to the states for primary implementation of the federal environmental regulations.  The Administration cites to waste as a result of duplication between state EPA’s and U.S. EPA.  Here are some of the statements included in the budget blueprint regarding prioritizing delegation of authority and responsibility to the states:

  • Avoids duplication by concentrating EPA’s enforcement of environmental protection violations on programs that are not delegated to States, while providing oversight to maintain consistency and assistance across State, local, and tribal programs. This reduces EPA’s Office of Enforcement
    and Compliance Assurance budget to $419 million, which is $129 million below the 2017 annualized CR level;
  • Supports Categorical Grants with $597 million, a $482 million reduction below 2017 annualized CR levels. These lower levels are in line with the broader strategy of streamlining environmental protection. This funding level eliminates or substantially reduces Federal investment in State environmental activities that go beyond EPA’s statutory requirements.

State Categorical Grants fund core programs, such as implementation of the Clean Air Act, Clean Water Act, hazardous waste regulation (RCRA) and the Safe Drinking Water Act.  The budget blue print calls for a 45% reduction in support to the states to run these programs.  

A recent article in the Columbus Dispatch discussed the potential impacts on Ohio EPA.  As noted in the article, federal funds make up a significant portion of Ohio EPA’s operating budget.

After fees for permits, inspections and licenses, federal funding is the Ohio EPA’s second-largest source of income, accounting for about $40 million of its $200 million budget.

In 2016, the U.S. EPA awarded its Ohio counterpart nearly $37 million for programs that maintain Superfund sites, restore wetlands, protect the Great Lakes and manage hazardous waste. 

The Administration is missing an opportunity to be more cost effective in implementation of environmental regulation.  The Administration is also losing a significant opportunity to be true to principles of federalism by entrusting the states with greater autonomy with regard to implementation of environmental program.  

If the Administration truly wants to shift power more toward the states, then drastic cuts to federal funds that allow states to implement those federal programs undermines that important policy goal. The danger exists that without adequate funding states cannot meet the increased demands.  In the years to follow, the states inability to be to handle the increased burden will be used by those who champion increased federal oversight to justify taking authority away from the states.