EPA

EPA Guidance to Commercial and Industrial Lessees for CERCLA Liability Protection for Historic Contamination

The United States Environmental Protection Agency (EPA) recently issued revised guidance clarifying its position that commercial and industrial tenants can protect themselves from contamination liability under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or "Superfund") by relying on an “all appropriate inquiry” of the ownership and uses of the property, timely performed by the landlord, or by timely performing the all appropriate inquiry themselves. Under EPA’s prior guidance, it was unclear that these statutory defenses were available to tenants. CERCLA imposes strict, joint, and several liability on designated persons, including owners and operators of facilities, where there has been a release or threatened release of hazardous substances. Although the mere execution of a lease does not necessarily impose CERCLA sec. 107 liability, tenants leasing contaminated properties may fall within the “operator” liability designation even if the contamination occurred prior to the tenant’s use of the property. Tenants are also listed in the CERCLA sec. 101(40) definition of "bona fide prospective purchaser" ("BFPP"). CERCLA provides a liability defense to BFPPs who can meet certain requirements, including the making of an "all appropriate inquiry", ordinarily a Phase I environmental site assessment, prior to purchasing or leasing the property. This defense can protect against CERCLA liability at a site that has historical environmental contamination that was not caused by the tenant. Subject to certain conditions, the BFPP defense applies even when the inquiry reveals historical environmental contamination on the property to be purchased or leased.

Under EPA’s revised guidance, a tenant can have derivative BFPP protection by relying on the landlord’s all appropriate inquiry or by performing the all appropriate inquiry itself prior to commencing operations if the landlord failed to timely undertake it or has acted in a way to invalidate this protection. The new guidance indicates how EPA will exercise its enforcement discretion under CERCLA. It is important to note that EPA may still take enforcement action against a tenant if it is potentially liable for reasons other than its status as a tenant or where the owner is not in compliance with state or federal regulatory requirements or cleanup orders.

A prospective lessee of commercial or industrial property should determine if the owner or landlord of the property timely performed an all appropriate inquiry prior to its purchase of the property, where the inquiry, purchase and lease occurred after January 11, 2002. If not, the tenant may want to consider performing a Phase I environmental site assessment prior to entering into a lease to obtain protection from CERCLA liability claims.

A link to EPA’s guidance document is here: "Revised Enforcement Guidance Regarding the Treatment of Tenants Under the CERCLA Bona Fide Prospective Purchaser Provision"

Speaking of Lead Poisoning, EPA Finalizes New Rules on Air Pollution from Secondary Lead Smelters; Will Affect Exide Laureldale, PA Facility

Today's Federal Register contains the Environmental Protection Agency's new Clean Air Act rules on air pollution from secondary lead smelters.   The new rule, amending the 1997 National Emissions Standard for Hazardous Air Pollutants for secondary lead smelters, imposes more stringent emission limits for lead compounds, adds work practice standards for mercury emissions, and imposes new requirements for testing, monitoring and record keeping.   In promulgating the new rule, EPA "determined that the risks associated with emissions from this source category are unacceptable primarily due to fugitive emissions of lead." The timing of the issuance of this final rule is ironic, as the lead emission standards are ultimately based on the outdated and lax "level of concern" for lead poisoning that the CDC's Advisory Committee on Childhood Lead Poisoning voted yesterday to cut in half.  See our post of January 4, 2011.

Moreover, although the rule is generally effective immediately, the compliance date for the revised stack and fugitive lead emission standards at existing sources -- such as existing sources at the Exide facility in Laureldale, PA - won't be effective for another two years: January 6, 2014.

The Exide facility was recently featured in an investigative report by the Center for Public Integrity as one of America's "poisoned places."

Note: In 2000, our firm and our co-counsel at Williams, Cuker and Berezofsky (now, Williams Cedar) successfully concluded federal litigation on behalf of victims of environmental pollution from the Exide/General Battery Facility with a court decree which provided for the remediation of our clients' contaminated properties and future environmental compliance. We brought successful federal claims under the Clean Water Act, Clean Air Act and Resource Conservation and Recovery Act ("RCRA").  A copy of the court opinion on summary judgment cross-motions (LEAD Group, et al. v. Exide,  United States District Court, E.D. Pa., 1999) is here.  A copy of the consent decree is available upon request.

EPA Orders Coal-Fired Portland Generating Station to Reduce Sulfur Dioxide Interstate Air Pollution

Portland Generating Station
Portland Generating Station

The U.S. Environmental Protection Agency has ordered the coal-fired Portland Generating Station in Northampton County, PA to put an end to its interstate air pollution. In a 95-page decision issued on October 31, 2011, EPA ordered the plant, operated by GenOn REMA LLC (GenOn Energy), to reduce its sulfur dioxide emissions by 81 percent within three years.  The decision also establishes interim emission rate limits which the plant must meet within one year. The decision constitutes final rulemaking, and adds a new rule at 40 C.F.R. Section 52.2039. It has been reported that this is the first EPA rulemaking directed at a single pollution source. 

The EPA found that emissions of sulfur dioxide (SO2) from the Portland plant significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 national ambient air quality standard (NAAQS) in New Jersey. The decision provides a detailed analysis of EPA's authority under Section 126 of the Clean Air Act to provide a remedy to downwind states subjected to pollution from out-of-state sources.  It also reviews the emissions data, air pollution dispersion modeling, available control technologies, and other technical issues supporting its decision.

UPDATE: The EPA decison was published in the November 7, 2011 Federal Register (76 Fed. Reg. 69052, et seq.) and is available at http://www.gpo.gov/fdsys/pkg/FR-2011-11-07/pdf/2011-28816.pdf.

National Research Council Issues New Report: "America's Climate Choices"

The National Research Council released today a new report, "America's Climate Choices", the final volume of the "America's Climate Choices" suite of activities. The report examines the nation’s options for responding to the risks posed by climate change. The report concludes that it is imprudent to further delay actions to substantially reduce greenhouse emissions, and offers a series of recommendations for national policy.  The primary recommendation is for the nation to substantially reduce greenhouse gas emissions, with the "most effective strategy" to "begin ramping down emissions as soon as possible". The NAS recommendations also include mobilization for adaptation to climate change, including adaptation planning and implementation "at all levels of society".  

A PDF of the entire report can be downloaded for personal use.  It will make sobering reading.

EPA Proposes Finding Northampton County PA Coal Power Plant Causes SO2 Air Pollution Violations in NJ

Portland Coal Power Plant

Portland Coal Power Plant

UPDATE

: On October 31, 2011 the EPA Issued its final response to the New Jersey Petition, finding that the coal-fired Portland Generating Station in Upper Mount Bethel Township, PA is emitting air pollutants in violation of the interstate transport provisions of the Clean Air Act. EPA found that the plant's SO2 emissions significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 national ambient air quality standard (NAAQS) in New Jersey. The EPA is establishing emission limitations and compliance schedules to ensure that the plant will eliminate its significant contribution to SO2 pollution in New Jersey. See

our post of November 4, 2011

.

The U.S. EPA is proposing to formally find that the coal-fired Portland Generating Station in Upper Mount Bethel Township, Northampton County, Pennsylvania, is causing interstate air pollution in violation of the federal Clean Air Act.  It also proposes to impose emission limitations to force substantial reductions of sulfur dioxide emissions from the plant.

In its "Response to Petition from New Jersey Regarding SO2 Emissions from the Portland Generating Station", EPA proposes to issue a finding that emissions of sulfur dioxide (SO2) from the Portland Plant significantly contribute to nonattainment and interfere with maintenance of the 1-hour SO2 national ambient air quality standard (NAAQS) in New Jersey. This finding is proposed in response to a petition submitted by the State of New Jersey Department of Environmental Protection (NJDEP) on September 17, 2010. EPA is also proposing emission limitations and compliance schedules to significantly reduce SO2 emissions from the plant.

According to the NJDEP petition and the proposed EPA finding,emissions from the Portland plant are causing SO2 concentrations far in excess of the NAAQS of 196 micrograms/m3.  EPA states that these violations require an

81 percent reduction

in emissions from the Portland plant to reduce SO2 concentrations below the NAAQS.

EPA will receive comments on this proposed finding, which must be received on or before May 27, 2011. Submit comments, identified by Docket ID No. EPA-HQ-OAR-2011-0081, online at 

http://www.regulations.gov

, by email to: a-and-r-docket@epa.gov. Attention Docket ID No. EPA-HQ-OAR-2011-0081, or mail to: EPA Docket Center, EPA West (Air Docket), Attention Docket ID No. EPA-HQ-OAR-2011-0081, U.S. Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Avenue, NW., Washington, DC  20460.

A public hearing will be held on April 27, 2011, in the Pequest Trout Hatchery and Natural Resources Education Center located in Oxford, Warren County, New Jersey 07863.

EPA Issues Final Rule "Tailoring" Permit Requirements for Greenhouse Gas Emissions

On May 13, 2010 EPA took one more regulatory action to address climate change and greenhouse gas (GHG) emissions, by issuing its final rule setting thresholds for GHG emissions that define when permits are required under the major EPA programs for stationary sources. These include the New Source Review Prevention of Significant Deterioration (PSD) and title V Operating Permit programs.

First Step (January 2, 2011–June 30, 2011). In the first step of this three-step rule, for the first 18 months, only sources currently subject to the PSD permitting program (i.e., those that are newly-constructed or modified in a way that significantly increases emissions of a pollutant other than GHGs) would be subject to permitting requirements for their GHG emissions under PSD. Projects with GHG increases of 75,000 tpy or more of total GHG, on a CO2e basis, would need to determine the Best Available Control Technology (BACT) for their GHG emissions. Similarly for the operating permit program, only sources currently subject to the program (i.e., newly constructed or existing major sources for a pollutant other than GHGs) would be subject to title V requirements for GHG.

Second Step (July 1, 2011 to June 30, 2013). Next, PSD permit requirements will cover for the first time new construction projects that emit GHG emissions of at least 100,000 tpy even if they do not exceed the permitting thresholds for any other pollutant. Modifications at existing facilities that increase GHG emissions by at least 75,000 tpy will be subject to permitting requirements, even if they do not significantly increase emissions of any other pollutant.  Similarly, operating permit requirements will apply to sources based on their GHG emissions even if they would not apply based on emissions of any other pollutant. Facilities that emit at least 100,000 tpy CO2e will be subject to title V permit requirements.  First-time Title V permittees are likely to be solid waste landfills and industrial manufacturers.

Third Step.  EPA commits to another rulemaking, to begin in 2011 and conclude no later than July 1, 2012. That action will take comment on an additional step for phasing in GHG permitting, and may discuss whether certain smaller sources can be permanently excluded from permitting. EPA also plans to explore a range of opportunities to reduce permit burdens and to streamline permitting actions.

A copy of the EPA fact sheet is available at: http://www.epa.gov/nsr/documents/20100413fs.pdf

A copy of the final rule (515 pp.) is available at: http://www.epa.gov/nsr/documents/20100413final.pdf

U.S. Chamber of Commerce, Coal & Gas Industries Attack EPA's Greenhouse Gas Endangerment Finding

In a predictable legal free-for-all, industry groups joined the state of Texas and the U.S. Chamber of Commerce late last week in filing challenges to EPA's "endangerment" finding for greenhouse gas emissions under the Clean AIr Act, while sixteen states and several environmental groups joined the fray by seeking to intervene in the industry challenges. The U.S. Court of Appeals for the District of Columbia Circuit will hear the cases.  All of the various petitions for review will almost certainly be consolidated. Background:  On December 7, 2009, the EPA Administrator signed two distinct findings regarding greenhouse gases under section 202(a) of the Clean Air Act:

  • Endangerment Finding: The Administrator found that the current and projected concentrations of the six key well-mixed greenhouse gases--carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--in the atmosphere threaten the public health and welfare of current and future generations.
  • Cause or Contribute Finding: The Administrator found that the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare.

These findings do not themselves impose any requirements on industry or other entities  See EPA's background materials supporting its greenhouse gas endangerment findings under section 202 of the Clean Air Act.

The industry challengers include Ohio Coal Association, the Utility Air Regulatory Group, the Portland Cement Association, and the Competitive Enterprise Institute, along with a coalition that includes the National Association of Manufacturers (NAM), the American Petroleum Institute, the Corn Refiners Association, the National Association of Home Builders, the National Petrochemical and Refiners Association, and the Western States Petroleum Association. Ten other petitions were filed by the American Iron and Steel Institute, the American Farm Bureau Federation, the National Mining Association, Peabody Energy, the Southeastern Legal Foundation on behalf of 13 House Republicans and business associations, and the so-called "Coalition for Responsible Regulation".

The state and environmental groups seeking to intervene to support EPA's endangerment finding include a coalition of 16 states and New York City, and groups including the Natural Resources Defense Council, Environmental Defense Fund, Sierra Club and the National Wildlife Federation.

In a statement reported by the New York Times, Environmental Defense Fund Texas regional director Jim Marston said: "The lawsuit filed by Governor Perry is asking the Environmental Protection Agency to ignore the Supreme Court's decision in U.S. vs. Massachusetts. Their action invokes memories of a sad time in Texas history from the '50s, when Texas politicians sought to nullify decisions of the U.S. Supreme Court. Not only is it legally unsound, it puts Texas on the side of the 1950s economy, against the clean energy economy of the future."

EPA Announces New Proposed NAAQS (Air Quality) Standards for Ozone

The United States Environmental Protection Agency today announced a set of new proposed National Ambient Air Quality Standards (NAAQS) for ground-level ozone, also known as "smog". Ground-level ozone is linked to various serious health problems, ranging from aggravation of asthma to increased risk of premature death in people with heart or lung disease. EPA is proposing to replace the standards set in 2008 by the Bush administration. Those standards were roundly criticized as inadequate to protect human health as required by the Clean Air Act. EPA's press statement states: "EPA is stepping up to protect Americans from one of the most persistent and widespread pollutants we face. Smog in the air we breathe poses a very serious health threat, especially to children and individuals suffering from asthma and lung disease. It dirties our air, clouds our cities, and drives up health care costs across the country." The new primary standard, developed to protect public health, is proposed to be a level between 0.060 and 0.070 parts per million (ppm) measured over eight hours. The current eight-hour primary standard is 0.075 parts per million (ppm). EPA is also proposing to set a separate “secondary” standard to protect the environment, especially plants and trees. This seasonal standard is designed to protect plants and trees from damage due to ozone exposure,

EPA will receive public comments on the proposed rule for a period of sixty days from the date the proposed rule is published in the Federal Register.  We'll update this post with a link to the Federal Register notice when it is published.

FIRST UPDATE:  EPA has announced public hearings on this ozone NAAQS rulemaking. See the public notice for details of the EPA hearings scheduled for Arlington, Virginia and Houston,Texas on February 2, 2010 and in Sacramento, California on Feburary 4, 2010.

SECOND UPDATE: January 19, 2009: EPA today published the Federal Register notice on the proposed rule to revise the NAAQS for ozone. A copy of the proposed rulemaking is available online at http://edocket.access.gpo.gov/2010/2010-340.htm. Written comments to EPA are due by March 22, 2010. Comments may be submitted electronically to http://www.regulations.gov (follow the on-line instructions) and via e-mail to: a-and-r-Docket@epa.gov