11/03/2020 - Regulatory Rollback

Superfund Financial Responsibility Rules

by EELP Staff

The Environmental & Energy Law Program is tracking the environmental regulatory rollbacks of the Trump administration. Click here for the list of rules we are following. If you’re a reporter and would like to speak with an expert on this rule, please email us.

Why It Matters

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), also known as Superfund, regulates the clean-up of hazardous waste sites. Sites that are especially hazardous are placed on the National Priorities List. There are currently 1,170 sites on the National Priority List.

Section 108(b) of CERCLA states that “the President shall promulgate requirements that classes of facilities establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances.” 42 U.S.C. § 9608(b). The purpose of this provision is to prevent companies from filing for bankruptcy and leaving taxpayers to shoulder the costs of substantial cleanup operations. Environmental groups sued EPA to enforce this mandate on March 11, 2008. In July 2009, EPA identified certain hardrock mining facilities as the first class of facilities to be regulated under section 108(b). EPA then published an Advance Notice of Proposed Rulemaking in Jan. 2010, identifying the electric power industry, the petroleum and coal products manufacturing industry, and the chemical manufacturing industry as other candidates for regulation under this provision. EPA did not issue final rules before President Trump took office.

Current Status

EPA issued a final rule on Dec. 1, 2017, declining to issue financial responsibility requirements for hardrock mining facilities. EPA also issued proposed rules on July 2, 2019, Dec. 4, 2019, and Feb. 10, 2020 to not impose financial responsibility requirements for the electric power industry, the petroleum and coal products manufacturing industry, and the chemical manufacturing industry respectively. As a result, there are no industries currently regulated under CERCLA section 108(b).

History

March 12, 2008 Environmental groups file suit in the Northern District of California alleging EPA failed to comply with its statutory duty under CERCLA section 108(b) to promulgate financial responsibility rules. Under CERCLA, EPA must publish notice of priority categories for section 108(b) regulations no later than December 1983. Sierra Club et al. v. Johnson, No. 08-01409 (N.D. Cal.).

Feb. 25, 2009 The District Court orders EPA to publish a Priority Notice under section 108(b). Sierra Club et al. v. Johnson, No. 08-01409 (N.D. Cal.).

July 28, 2009 EPA publishes a priority notice identifying certain classes of facilities within the hardrock mining industry for which EPA will develop financial responsibility requirements under section 108(b).

Jan. 6, 2010 EPA publishes an advance notice of proposed rulemaking declaring its intention to issue financial responsibility requirements under Section 108(b) for the the chemical manufacturing, petroleum and coal products manufacturing, and electric power generation, transmission and distribution industries.

Aug. 11, 2014 Environmental groups petition for a writ of mandamus (an order) directing EPA to finalize financial responsibility rules for the hardrock mining, chemical manufacturing, petroleum and coal products manufacturing, and the electric power generation, transmission, and distribution industries. In re: Idaho Conservation League, No. 14-01149 (D.C. Cir.).

Jan. 29, 2016 The D.C. Circuit grants a joint motion in In re: Idaho Conservation League to set a schedule for the hardrock mining rulemaking. The court requires EPA to begin the rulemaking process by Dec. 1, 2016, and to publish a final rule by Dec. 1, 2017. The court also requires EPA to provide notice of its final action for the other three industries by 2024. In re: Idaho Conservation League, No. 14-01149 (D.C. Cir.).

Jan. 11, 2017 EPA publishes a proposed rule establishing financial responsibility requirements under section 108(b) for hardrock mining facilities.

Trump Era

Feb. 21, 2018 EPA publishes a final rule deciding not to issue financial responsibility requirements for the hardrock mining industry, after announcing the decision on Dec 1. In the final rule, EPA changes its interpretation of risk under section 108(b) to refer only to the federal government’s financial risk, excluding risks to health and the environment. Based on this interpretation, EPA determines that the degree and duration of risk associated with the modern production, transportation, treatment, storage, or disposal of hazardous substances by the hardrock mining industry is not sufficient to justify regulation under 108(b).

May 16, 2018 Earthjustice files a petition for review in the D.C. Circuit on behalf of the Idaho Conservation League and other environmental groups challenging the final rule. Earthjustice argues that EPA’s interpretation of risk is unreasonable and contrary to CERCLA; its decision not to issue financial responsibility requirements is arbitrary and capricious; and that the final rule is not a logical outgrowth of the proposed rule. Idaho Conservation League, et al. v. Wheeler, No. 18-1141 (D.C. Cir.).

Early 2019 Earthjustice files a Freedom of Information Act (FOIA) request for records of EPA’s internal decision-making process during the hardrock mining rulemaking. The requested records show that EPA resolved to take no action before reviewing public comments.

July 2, 2019 EPA announces a proposed rule, published in the Federal Register on July 29, deciding not to mandate financial responsibility requirements for the electric power industry. EPA determines that the degree and duration of risk does not warrant issuing financial responsibility requirements. EPA must issue the final rule by Dec. 2, 2020.

July 19, 2019 The D.C. Circuit denies Earthjustice’s petition for review, deferring to EPA’s interpretation of “risk” after finding that the use of “risk” in 108(b) is ambiguous, and EPA’s interpretation of risk as only referring to financial risk, excluding risks to health and the environment, is reasonable. The court also holds that the final rule is not arbitrary and capricious, and is a logical outgrowth of the proposed rule. Idaho Conservation League, et al. v. Wheeler, No. 18-01141 (D.C. Cir.).

Dec. 23, 2019 EPA publishes a proposed rule deciding not to issue financial responsibility requirements for the petroleum and coal products manufacturing industry. EPA determines that the degree and duration of risk does not warrant financial responsibility requirements. EPA must issue the final rule by Dec. 1, 2021.

Feb. 10, 2020 EPA issues a proposed rule deciding not to mandate financial responsibility requirements for the chemical manufacturing industry. EPA determines that the degree and duration of risk does not warrant financial responsibility requirements.