As the November 2020 election nears the start of its one-year countdown, a number of significant environmental regulatory reversals being pushed by the Trump administration look likely to depend on the outcome.
The ballot box could decisively determine which direction the federal government will pivot on a slew of regulatory matters affecting industry, from autos to power generation.
If President Trump is re-elected, then his administration will presumably continue to use executive authority to push for further deregulation, which efforts will join the others already mired in litigation.
If his Democratic opponent wins in 2020, then the new administration will probably drop all or most of the pending rollbacks. To the extent possible, pending lawsuits will be withdrawn or allowed to die on the vine as the new administration begins to feel its way toward its own administrative goals in the absence of clear instructions from Congress.
Perhaps more than ever, industry is facing what it dislikes most: planning in the face of regulatory uncertainty.
The Trump administration is proposing to roll back states’ rights in a number of areas by asserting federal supremacy.
It moved in September to revoke California’s authority to regulate tailpipe emissions from motor vehicles.
President Trump said on September 18 that the administration is finalizing replacement efficiency standards for cars after 2020.
He tweeted, “The Trump administration is revoking California’s Federal Waiver on emissions in order to produce far less expensive cars for the consumer, while at the same time making the cars substantially SAFER . . . . Many more cars will be produced under the new and uniform standard, meaning significantly more JOBS, JOBS, JOBS! Automakers should seize this opportunity because without this alternative to California, you will be out of business.”
Tailpipe emissions are the largest source of greenhouse gas emissions in the United States at approximately 29%, which is 1% more than the utility sector.
California’s current tailpipe rules — before the rollback — would require automakers to build vehicles that achieve an average fuel economy of 54.5 miles per gallon by 2025. The Trump proposal would freeze average fuel economy standards once they reach about 37 miles per gallon in 2021.
The federal government is now asserting the right to “preempt” or override separate state standards. California officials said they will sue to block revocation of a long-standing federal waiver allowing California to adopt stricter pollution controls than the federal government.
If successful, assertion of federal preemption would have national consequences. California has 35 million of the roughly 200 million US motor vehicles, and 13 other states have adopted its tighter tailpipe greenhouse gas standards covering roughly a third of US vehicles.
The automakers are caught in the middle. Four automakers signed an agreement with California in July to comply with tighter emissions standards even if the standards are revoked.
In response, the Trump administration suggested that the agreement may violate antitrust laws, prompting the US Department of Justice to open an investigation.
The question of which standards apply to vehicles in California and 13 other states will probably be determined in the US Supreme Court after years of litigation if not withdrawn by a new administration.
Clean power plan
A federal appeals court dismissed as moot various legal challenges to the Obama “Clean Power Plan” in September after the Trump administration replaced it with a new “Affordable Clean Energy” plan. The Trump plan took effect on September 6.
Despite the dismissals, the litigation over the underlying issues is far from over.
Almost all major environmental rules land inevitably in court no matter in which direction they take the country. A lawsuit called American Lung Association, et al. v. EPA, et al. has already been filed challenging various aspects of the new Affordable Clean Energy plan. It is expected to address many of the same issues at the heart of the recently dismissed cases, but from the other direction.
The US Environmental Protection Agency asked the court to put the case on a fast track. It hopes for oral arguments in April in the hope of obtaining a trial court decision before the end of President Trump’s first term.
A central issue in the case is whether EPA has authority to issue greenhouse gas standards based on actions taken “beyond the fence line” of a power plant regulated under the Clean Air Act.
The Obama Clean Power Plan would have given each state broad authority to determine how statewide obligations must be met within that state, with many states choosing to reach emissions and compliance targets by pushing power companies to rely more on lower-emitting types of power generation, rather than focusing regulation narrowly “within the fence line” of a particular power plant. Allowing states to regulate emissions more broadly than facility by facility was a core concept.
The Trump EPA argues that the Clean Air Act prevents such an approach.
Any move to limit emissions on a facility-by-facility basis is more likely to keep aging facilities with greater emissions in service for longer. Coal would be the chief benefactor under the Trump approach because each state would have significant latitude to decide what each individual plant within its borders must do or not do to limit greenhouse gas emissions.
If the Trump EPA succeeds in the US Supreme Court some years from now, it could block future administrations from resuscitating the statewide approach used under the Clean Power Plan.
If Trump loses re-election, then a new Democratic administration could move to quickly reverse course.
The Trump administration announced at the end of August that it plans to eliminate any federal obligation for oil and gas companies to monitor and fix methane leaks from wells, pipelines and storage facilities.
The new methane rule would replace a stricter Obama-era rule.
Under the proposal, methane from natural gas would be regulated only indirectly and to a much lesser degree. A related category of gases called volatile organic compounds, or VOCs, would remain regulated under the new rule, which could still limit certain methane emissions.
The new rule must go through public comment and further agency review, potentially allowing it to be finalized in early 2020. Litigation is certain.
The new rule shines a light on a split within the natural gas industry, largely between small and large producers.
While smaller companies have complained that it is too costly to perform the required leak inspections, several major energy companies have openly opposed the new rule and called on the Trump administration to tighten restrictions on methane.
Since electricity production from natural gas produces only about half as much carbon dioxide as coal, some large companies worry that cutting back on industry obligations to restrict leaks could harm their industry’s image as a comparatively cleaner source of electricity.
While carbon dioxide is the most significant greenhouse gas, methane reportedly has 80 times the heat-trapping power of carbon dioxide during the first 20 years or so that it remains in the atmosphere.
Methane currently makes up nearly 10% of greenhouse gas emissions in the United States.
Clean Water Act 401
EPA proposed in August to scale back state authority under section 401 of the Clean Water Act to object to projects holding federal permits on grounds that they will harm state water quality.
The EPA proposal would narrow the actions that states can consider when determining whether a federally permitted project will violate state water quality standards. It would also limit the time for states to approve or reject a request for certification and allow federal agencies to veto state denials of water quality certification requests.
If finalized, the new Clean Water Act 401 rule will almost certainly land in court. If Trump loses in 2020, then any new administration would probably withdraw the proposal.
EPA Administrator Andrew Wheeler said in late September that EPA is strongly opposed to Congressional efforts to impose federal cleanup standards for a class of chemicals that has been found to be contaminating drinking water.
Per- and poly-fluoroalkyl substances, or PFAS (pronounced PeeFAS), are among a group of fluorinated chemicals commonly added to a wide variety of consumer products to make them non-stick, waterproof and stain-resistant. These include carpets and upholstery, waterproof apparel, floor waxes, non-stick cookware, camping gear, fast-food wrappers, cleaners, dental floss and firefighting foams for putting out fuel fires.
There is an effort in the US House of Representatives to designate PFAS as hazardous in the pending 2020 defense authorization bill. The PFAS amendment was attached to the bill by a House subcommittee. The measure was before the full committee as the NewsWire went to press. The issue is expected to be decided in conference between the House and Senate. It has taken on partisan overtones. Democrats and Republicans in the House and Senate disagree over language and whether PFAS should be formally designated as hazardous substances under other environmental laws.
EPA released an “action plan” last February to address PFAS contamination.
The plan calls for more research and initiates some water and waste regulatory steps, but does not set limits. It may ultimately prove to have been the first step toward nationwide drinking water standards being set for two of the most studied and toxic types of PFAS — perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) — under the Safe Water Drinking Act, but Wheeler said as recently as September that no decisions have been made on whether to move forward with any rulemaking.
EPA must first propose a Safe Drinking Water Act regulatory determination for PFOA and PFOS before a maximum contaminant level could be set by the agency.
Wheeler suggested the amendment under consideration in the House would do more harm than good by designating the broad class of nearly 5,000 PFAS chemicals as hazardous substances, thereby subjecting each to regulatory restrictions.
“By putting the label ahead of the science, this bill will be nearly impossible to implement for many of the PFAS compounds,” Wheeler said.
He also said EPA could not meet the proposed timeline in the House amendment to complete a rulemaking within a year.
The eventual setting of drinking water standards and listing of certain PFAS as hazardous substances would probably lead to significant cleanup liability for responsible parties at sites across the country. It could even require responsible parties to do additional remediation at sites where cleanups related to other substances were previously determined to be complete.
In September, EPA granted approximately $2 million to state universities to study the environmental impact of PFAS and identify procedures to manage the chemicals that enter the environment.
Whatever EPA does at a national level, a number of states have already entered the regulatory fray and additional state-level regulation is expected absent a move by the Trump administration to preempt them.
Meanwhile, a federal district court in Ohio rejected motions to dismiss a landmark class action tort lawsuit that seeks to force manufacturers to fund independent health studies and testing to determine the health effects of certain PFAS commonly found in the blood. The court has not yet decided whether to certify the class. The decision allows plaintiff to continue to try to build a scientific case for links between a variety of PFAS and adverse health effects, at least for now.