CERCLA Has Never Been a “Polluter Pays” Statute

Environment and Energy Report (subscription required) had a story today about growing opposition to EPA’s proposal to list two PFAS compounds, PFOA and PFOS, as hazardous substances under CERCLA.  Here’s what really caught my eye about the opposition.  The National Association of Clean Water Agencies opposes the proposal.  They think it inconsistent with EPA’s historical implementation of CERCLA:

EPA’s proposed designations, however, fall short of the Agency’s aims by failing to advance the “polluter pays” approach the Agency has repeatedly espoused. The proposal instead threatens to push significant costs and liabilities onto local communities; increase affordability concerns, particularly for disadvantaged communities; and untenably put cleanup actions ahead of critical source control and risk assessment processes.

I’m very sympathetic to the concerns expressed by the NACWA, but I don’t agree with their history.  CERCLA has never been about making the polluter pay.  It has always been about avoiding having the government pay.  My favorite example remains the Cannons Engineering Corporation sites.  In the 1970s, as concerns about hazardous waste management were growing, several responsible companies asked what is now the Massachusetts Department of Environmental Protection what they should do with their waste.  MassDEP informed the companies of a state-of-the art incineration facility – then, the latest technology – in Bridgewater, MA, operated by Cannons Engineering.  The companies did their due diligence and began contracting with Cannons.  They even continued their due diligence, often following trucks to make certain that their waste was really going to Cannons.  They also got “certificates of thermal destruction” from Cannons, confirming that their wastes had been incinerated.

Imagine their surprise when it turned out that Cannons, instead of incinerating much of the waste, was having it hauled away, including to sites in New Hampshire, where it was dumped down various drains.  Cannons ended up resulting in four separate Superfund NPL sites.  Moreover, notwithstanding that the generator companies never arranged for disposal of their waste at the other sites, the companies were named as PRPs at the other sites.

Can any fair-minded person argue that the companies “polluted” the other sites?  I think not.  They were held liable because, at the time, people thought that, as between an innocent corporation and an innocent government, it was better that the innocent corporation pay for the cleanup than the innocent government.

One can understand why government took the position it did.  One can also disagree.  I happen to think that it makes more sense for government to pay (perhaps with funds from a Superfund tax!).  Because society as a whole benefitted from the economic activity that led to the pollution, and because the companies did not in any reasonable understanding “cause” the contamination, society as a whole should pay the cleanup costs.

And so we come to PFAS.  At sites where the manufacturers and distributors of PFAS cannot be held liable, should municipalities, water treatment facilities, recyclers, and other entities far removed from decisions about PFAS, and often having no idea that they were even handling PFAS, be liable for the cleanup costs?

CERCLA case law says yes.  I think a reasonable sense of fairness says no.  As EPA moves forward with its listing proposal, we’ll see whether the public believes in 2022 that “innocent” companies should pay for PFAS remediation, rather than “innocent” governments.

The fate of PFAS regulation may tell us a lot about who the public thinks should be responsible for such contamination.  Or it may just tell us about the state of inertia and gridlock in the United States today.

Some “Big Lifts” For Boston to Achieve Its Climate Goals

Earlier this Month, The Boston Foundation released its “Inaugural Boston Climate Progress Report.”  Suffice it to say, there’s a lot to do.  The Report identifies four “Big Lifts” necessary to attaining our climate goals.  It defines a Big Lift as:

a multidecade mega-project that seeks to improve the city to align with its climate and equity goals.

The four Big Lifts are:

  • Retrofitting the small building stock
  • Local energy planning for an electrified city
  • Building a resilient coastline through improved governance
  • Prioritizing reparative planning for Boston’s frontline neighborhoods

All of these are important and each is worth its own post.  Perhaps because it gets less attention than the others, I’m going to look at the governance issue briefly here.  The Report identifies three “options” and “challenges” associated with governance.  The following list is my shorthand summary of the issues identified in the Report.

  • The lack of a coordinating agency to resolve conflicts among competing interests
  • Existing regulations that are not hospitable to resiliency projects
  • Money, money, money
  • A lack of transparency in City government, which leads to confusion about who is doing what and what we are trying to accomplish

I don’t disagree with any of this.  I will say that, though this report is focused on Boston, Governor-elect Healey has proposed a cabinet-level climate position.  Since many of the governance issues derive from current state statutes and regulations, having a climate secretary may help address the coordination issue, assuming municipalities and the state government are generally on the same page.

I think that the biggest issue is the problem with our existing regulatory structure.  Based on a paradigm that developed prior to climate change, in-water resiliency solutions are at best difficult to permit and, at worst, simply impossible.  That makes sense if the “fill” is for some purpose unrelated to the environment and comes with associated environmental costs.  If the very purpose of the project is to address the most pressing environmental issue of our time, a different paradigm is warranted.

The biggest problem here is that this issue isn’t just bigger than Boston; it’s bigger than Massachusetts.  Even if we have all the coordination in the world and Governor Healey’s climate czar succeeds in reforming our state regulations to facilitate beneficial resiliency projects, the federal permitting regime will remain a significant problem, one that cannot be solved in Massachusetts.

I guess that’s why they are called Big Lifts.

(And if you need a reminder why this matters, watch this, which includes video of the street where I live!)

The Broken Record Department: PM2.5 Is Bad For Your Health (and EVs can help)

I’ve written before about the developing science regarding the impacts of PM2.5 emissions.  Short version – they’re bad for you.  They’re even worse than we thought, and there’s increasing evidence that they cause a lot of harm at concentrations below the National Ambient Air Quality Standard of 12 ug/m3

The most recent report comes from Canada, which is particularly useful in measuring the impact of low concentrations of PM2.5 precisely because PM2.5 concentrations are relatively low there.  Tracking a large cohort, the authors developed a concentration-response relationship, then applied that relationship globally.  They found that the World Health Organization undercounts annual PM2.5 mortality by 1.5 million.  More than 400,000 of those deaths are in areas with PM2.5 concentrations below the NAAQS.

EPA is currently deciding what to do with a recommendation to lower the NAAQS to somewhere between 8 ug/m3 and 10 ug/m3.  I’m confident that EPA will accept that recommendation, but whether the NAAQS lands at 8 ug/m3, 10 ug/m3, or somewhere in between is beyond my powers of prognostication.  I am confident, however, that in the long run, the science is only going to drive the recommended number lower.

And so we come to the topic of electric vehicles and electrification more generally.  Even aside from the climate benefits of moving to EVs, the immediate public health benefits – largely in areas of environmental justice concern – will be substantial.  We have to make clear that moving to EVs is not just to make wealthy elites feel as though they are helping address climate change.  Would it help to sell the EV revolution to focus on the public health benefits from electrifying vehicles (and the economy more broadly)?

Biden Announces New Initiative on “Game-Changing” Technologies for Achieving Net-Zero Emissions

On November 4, 2022, the White House announced a new initiative to support research and development projects on 37 “game-changing” technologies to advance the Biden Administration’s goal of net-zero emissions by 2050.

Led by an interagency working group, the “Net-Zero Game Changers Initiative” will direct billions of dollars under the bipartisan infrastructure law, the CHIPS and Science Act, and the Inflation Reduction Act toward five initial priorities:

  • Efficient Building Heating and Cooling,…
  • More

Amendments to Massachusetts’ Clean Energy Standard Finalized, Accelerating Progress Towards Decarbonization of the State’s Electricity Sector

The Massachusetts Executive Office of Energy and Environmental Affairs (EEA) and Department of Environmental Protection (MassDEP) announced that proposed amendments to the state’s Clean Energy Standard (CES) were finalized earlier this month without substantive changes from draft language initially proposed by the agencies in April 2022.

The amendments are intended to accelerate progress towards decarbonization of the electricity sector and further ensure the state meets its goal of net zero emissions by 2050.… More

DOER Issues an Updated Stretch Code – Are Net-Zero Energy Buildings Really Coming Soon?

Massachusetts will soon see significant updates to the energy codes that govern the construction and alteration of buildings throughout the Commonwealth.   As required by the 2021 climate bill,

the Massachusetts Department of Energy Resources (DOER) has recently finalized regulations updating the current Stretch Energy Code, previously promulgated by the state’s Board of Building Regulations and Standards (BBRS), and establishing a new Specialized Code geared toward achieving net-zero building energy performance.… More

Can Cumulative Impact Analysis Improve Cost-Benefit Analysis?

As frequent readers know, I am a big fan of cost-benefit analysis.  The basic idea is that, when we make a decision to regulate at a certain level, we are by definition deciding that regulating to that level is “worth” the costs that the regulation will impose.  We might as well make such calculations explicitly. 

However, that doesn’t mean that CBA cannot consider the distributional impacts of federal regulations.  Indeed, OMB Circular A-94, which largely governs how federal agencies conduct CBA, has a section on distributional effects.  While I’ve long been aware of the issue, several recent events have driven home its import – and also suggested both how CBA can be improved and how it can strengthen, rather than weaken, the case for regulations.

The first was an article by Kelly McGee on how the flawed way we conduct CBA to determine how FEMA distributes funds for flood mitigation projects biases FEMA decision-making to short-change those who most need FEMA’s help.  In short, the “benefits” of these projects are calculated based on the property value saved by the mitigation.  Of course, by definition, projects in wealthier areas are going to have a higher value under that calculation than those in poorer areas.

Oops! Can you say “environmental injustice”?

Second, Inside EPA (subscription required) reported earlier this month that Jim Tozzi, OIRA director under Ronald Reagan (!) has apparently written to the Council of Economic Advisors, suggesting that the CEA “become involved in establishing the principles and methodologies to address equity considerations in the rulemaking process.”

Hear, hear! Who could be against it?

Finally, an EPA workgroup recently posted a report titled “Cumulative Impacts Research:  Recommendations for EPA’s Office of Research and Development.”  Figuring out how to conduct robust cumulative impact analyses is a primary focus of current EJ efforts.  However, while the report talks a lot about quantifying cumulative costs and benefits associated with different environmental issues, the report doesn’t say a single word about research into how developments in cumulative impacts research can feed directly into the the way cost-benefit analyses are conducted.

Opportunity missed!

Figuring out how to incorporate cumulative impact analysis into cost-benefit analysis has to be the holy grail.  If we can do that, we might be able to persuade open-minded environmentalists and EJ advocates that cost-benefit analysis is a good thing.  If we can do that, we might be able to persuade open-minded market enthusiasts that environmental regulation is a good thing.

And that would be a good thing.

EPA’s Office of Land and Emergency Management Commits to Environmental Justice

Federal agencies continue to roll out plans to address environmental justice issues, which has become a focal point in the Biden administration’s agenda. Now that the Inflation Reduction Act of 2022 (IRA) is in effect, federal agencies are now able to access more funds to address environmental justice concerns. As discussed in a prior blog post, the U.S. Environmental Protection Agency (EPA) released its “Equity Action Plan” in April 2022 and on September 30,… More

Might the WOTUS Saga Drag On For a While Longer?

The Supreme Court heard oral argument today in the Sackett case, in which the Sacketts are hoping that SCOTUS will finally issue a clear decision narrowing the scope of jurisdiction under the Clean Water Act.  I have stayed out of the SCOTUS prediction game because I find such speculation to be a waste of time.  I generally agree with the position of Roy Kent on Ted Lasso.  To paraphrase (very) loosely (if your ears are sensitive, you might limit your viewing to 0:26-0.39):

All we do is sit around and guess what a bunch of [Supreme Court justices] will do and then we come back and complain because they didn’t do exactly what we thought they’d do.

Perhaps as a result, I enjoyed the report today (subscription required) that the argument did not go well for the Sacketts and that a majority of the justices seemed inclined to rule for the government.  If I’m honest, that may be in part because it would validate my rule against speculation.  However, I like to think that it is also at least in part due to the fact that it would be consistent with the way I’ve viewed this case almost from the beginning.

I sympathized with the Sacketts’ initial complaint and agreed with the initial SCOTUS decision, but I never thought much of the Sacketts’ position on the merits of the WOTUS issue.  It always seemed to me that the Sacketts should lose under any interpretation of the CWA other than one which would require that WOTUS be limited to waters that are truly navigable.

Because of that, I have always thought that any truly conservative SCOTUS justice would avoid the WOTUS jurisdictional issue on the ground that it’s not necessary to resolve that issue to determine that the Sacketts’ property is in fact subject to jurisdiction.  Here’s hoping that the Court rules for the Government without reaching the question of the proper scope of WOTUS.

Of course, I have to acknowledge that speculating about a SCOTUS decision after oral argument is not a much better bet than speculating before argument.  Moreover, SCOTUS’s decision last term to rule in West Virginia v. EPA, on arguably thinner grounds than are present here, is a significant caution.  One could well imagine the Court ruling against the Sacketts, but nonetheless writing what would essentially be an advisory opinion to the effect that Scalia’s plurality opinion in Rapanos is the right definition.

Science does not exactly hold sway with this Court.  But at least we still have Ted Lasso to turn to.

Bloomberg Targets Petrochemicals — How About Investing in Their Replacements?

I’ve written previously about the urgency associated with the problems caused by waste plastic.  However, there’s a big difference between me blogging about it and Michael Bloomberg opening his wallet to try to do something about it.  And the news this week was that Michael Bloomberg is putting $85 million into a new “Beyond Petrochemicals” campaign. 

What’s really interesting is that Bloomberg has taken a substantially different tack than most of those who have been trying to address the problem of plastic pollution.  The difference is apparent from the get-go; the campaign is not called “Beyond Plastics”; it’s called “Beyond Petrochemicals”.  The other significant difference is that it’s not focused on encouraging the circular economy or other efforts designed to address plastic pollution – other than to prevent the manufacture of plastics in the first place.

And although there is brief mention in the “four key pillars” of the campaign about regulations to reduce the demand for plastic products, the discussion of the need for the campaign is focused on two different issues:  (1) the climate impact from the use of fossil feedstocks and the operations of the manufacturing facilities and (2) the environmental impact from the release of traditional pollutants from these facilities, particularly in environmental justice communities.  The campaign notes that it is focused on stopping 120 projects located primarily in Texas, Louisiana, and the Ohio River Valley.

It is an interesting strategic choice by Bloomberg to focus on climate and environmental justice issues, rather than on the back-end impact of plastic pollution itself.  In modern regulatory lingo, the reduction in plastic pollution will just be a co-benefit of the campaign’s efforts to stop the construction or expansion of all these facilities.  I don’t know if this was part of the rationale behind the strategy, but it does allow the campaign to avoid having to discuss the convenience plastics deliver to consumers.

I still think that we’re going to have to do more than stop construction or expansion of petrochemical facilities.  Plastics are really convenient and provide some significant benefits; we’re going to have to find alternatives to plastics and incentivize investment in the technologies and the facilities that will ultimately deliver those alternatives.

The Senate Ratifies the Kigali Amendment: Is Bipartisan Climate Action Possible?

Earlier this week, the Senate ratified the Kigali Amendment to the Montreal Protocol.  The amendment, which has already been ratified by most other countries, will result in the phase-out of hydrofluorocarbons, a group of potent greenhouse gases.  Substantively, this is a big deal.  Estimates are that it will prevent about ½ a degree Celsius in global warming.  That’s a meaningful impact. 

Politically, it’s also important.  It shows both that international cooperation on climate issues is feasible, and that legislative action in the United States is feasible.  The vote was 69 to 27, and almost half of GOP senators supported it.

I agree that this is a major accomplishment and everyone should be celebrating.  I do feel compelled to note, however, that 20 years ago, the vote would probably have been 98 to 1, and the lone no vote would have been a senator who in a former life voted against Sandy Koufax or Derek Jeter getting into the Baseball Hall of Fame on the first ballot.

After all, John Kennedy, Senator from Louisiana, not exactly a liberal, was quoted in Bloomberg Environment and Energy (subscription required) as saying simply that:

There’s no reason not to support Kigali.

Shelley Moore Capito, from West Virginia, also not exactly a liberal, said that:

It will create jobs and open up markets for us.

The Chamber of Commerce, not exactly a liberal lobbying group, also supported the amendment, stating that it:

would enhance the competitiveness of U.S. manufacturers.

And yet, 27 Republicans opposed it.  It’s hard to come up with any explanation other than that they simply feel compelled to oppose any legislation that is supported by their opponents.  Think of it as the Groucho Marx view of life, as applied to the U.S. Congress.

IRA Side Deal on Permitting Raising Ire

In order to pass the Inflation Reduction Act (“Act”) last month, a deal was struck with Sen. Joe Manchin (D-WV) to create separate legislation to reform federal energy project permitting.  Now that the Act has been signed into law, Senate Democrats are making good on their promise but, as might be expected, not all parties are supportive.

The reforms (and funding necessary to effectuate them) are proposed to be included as part of a Continuing Resolution that must be passed to prevent a government shutdown beginning October 1.  … More

It’s Good to Be a Brownfield Site — As Long As It’s Not Too Brown

Tucked away in the recesses of the Inflation Reduction Act is a provision that reminds everyone why they love Superfund so much.  On its face, it’s simply an incentive for renewable energy development, giving an adder to the amount of the investment tax credit (ITC) or production tax credit (PTC) to which certain renewable energy projects would otherwise be entitled, if they are located in an “energy community”.  The adder for projects claiming the ITC can increase the ITC credit rate by as much as ten percentage points (e.g., a project with a base credit rate of 30% is increased to 40%).  The adder for projects claiming the PTC is an increase equal to 10% of the PTCs otherwise available.  The definition of energy community has multiple parts, but the key for today is simply this – any property meeting the definition of a “brownfield site” under CERCLA is considered an energy community.  The new adder only applies to projects placed in service on or after January 1, 2023.

Renewable energy developers are now busily trying to figure out whether target projects meet the definition.  Here’s where the fun starts.  It turns out that the common sense definition most people think of when they think about brownfield sites is not what Congress had in mind when it defined the term under CERCLA.  A brownfield site is indeed a property where redevelopment is more difficult because of the presence of historic contamination – but only if the contamination is relatively minor.

Here’s what renewable energy developers need to know to determine whether their property is a brownfield site and thus eligible for the IRA adder, or whether it’s just a piece of contaminated property.  The basic definition is reasonably clear:

The term “brownfield site” means real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.

However, there are several different exclusions about which developers need to be aware.  The exclusions are lengthy and complicated, but can be conveniently placed into four categories.  Facilities in any of the categories are excluded from the definition of “brownfield site”.

  • Facilities that are actually federal superfund sites, including:
    • Sites on the National Priorities List (or proposed for listing)
    • Sites at which a removal action is occurring
    • Sites that are the subject of a court order, consent decree, or administrative order under CERCLA
  • Facilities that are otherwise subject to court orders, consent decrees, or administrative orders. (Maintaining CERCLA’s reputation for incoherent drafting, it is not clear whether the exclusion applies to any such orders or only orders issued pursuant to certain other federal environmental statutes, including the Resource Conservation and Recovery Act and the Clean Water Act.)  Fortunately, the language is written in the present tense, so at least it is clear that this exclusion only applies where such an order remains in effect.
  • Facilities “to which a permit has been issued by the United States or an authorized State” under RCRA, the CWA, the Toxic Substances Control Act, or the Safe Drinking Water Act.
  • Facilities subject to RCRA corrective action or at which there has been a PCB release subject to remediation under TSCA.

There are nuances, but these are the basics.  What’s important to understand is that, while developers need to carefully parse through these exclusions to see if they are entitled to the adder, there will remain a significant number of facilities where the exclusions are not applicable and the adder will be available.

EPA Proposes to List PFOA and PFOS as Hazardous Substances: What Could Possibly Go Wrong?

EPA announced today that it is proposing to list PFOA and PFAS as hazardous substances under CERCLA.  EPA appears to be sanguine about how the listing will play out in the real world.

EPA is focused on holding responsible those who have manufactured and released significant amounts of PFOA and PFOS into the environment. EPA will use enforcement discretion and other approaches to ensure fairness for minor parties who may have been inadvertently impacted by the contamination.

I’m less optimistic.  I should be clear that I have no problem with the listing decision itself.  There seems to be sufficient information to warrant listing.  My concern is simple.  CERCLA doesn’t work and it never has.  I have discussed CERCLA’s failings previously, but I can never resist trotting out this chestnut:

Vagueness, contradiction, and dissembling are familiar features of environmental statutes, but CERCLA is secure in its reputation as the worst drafted of the lot.

The relevant problem for this discussion is that CERCLA provides no basis for a rational assessment of how much cleanup is enough.  That’s going to come to the forefront in at least two ways for sites at which PFOA and/or PFOS are detected.

First, PFOA and PFOS are pretty much literally ubiquitous.  We’ll find out how true this is when detection methods improve to the point where they can be detected in the low parts per quadrillion range at which EPA’s recent health advisories say adverse effects can be found.  What do we do when it turns out that the United States is just one big Superfund site?

If EPA thinks that it can manage the issue through the hazard ranking system process, what happens when it starts to score sites using the same data that yielded a health advisory for PFOA of 4.0 parts per quadrillion.  How is EPA going to prioritize sites when there are neighbors everywhere legitimately concerned that there’s a site near their home with elevated levels of PFOA and PFOS?

And, by the way, does anyone who knows anything about Superfund think that EPA’s “enforcement discretion” will be sufficient – even if exercised with the wisdom of Solomon – to “protect “minor parties who may have been inadvertently impacted by the contamination”?

EPA has never been able to manage these issues under CERLCA and they are only going to get worse with PFAS.  Maybe the listing of PFOA and PFAS will be the straw that breaks the camel’s back.  And that might even be a good thing, if we had a functioning Congress that could take a reasonable look at CERCLA’s flaws and come up with something better.

Massachusetts to Require Disclosure of Energy Usage from Large Buildings

Lost amid the more high profile items in Massachusetts’ recently enacted Act Driving Clean Energy and Offshore Wind is a requirement that the Department of Energy Resources establish a program requiring large buildings across the Commonwealth to report energy usage on an annual basis.   The requirement goes into effect on July 1, 2024, but DOER has an additional year (until July 1, 2025) to draft implementing regulations and establish the parameters of the reporting program.   Once the program is up and running, the data will be made publicly available on DOER’s website on a building-by-building basis.  The law requires reporting for buildings with at least 20,000 sf of gross floor area, but DOER may lower that threshold by regulation.  The reporting burden falls on both building owners and distribution companies.

Building-specific energy usage data collection of this type is widely seen as laying the groundwork for future building decarbonization efforts, including the establishment of building emissions performance standards.   The cities of Boston and Cambridge (and most recently Chelsea) already have building energy disclosure ordinances, each of which require annual reporting of energy usage for large buildings (Boston and Chelsea at a threshold of 20,000 sf, Cambridge at 25,000 sf).  And Boston is now layering emission reduction requirements on top of those disclosures.

Seven years after passing its first building energy reporting and disclosure ordinance (now known as BERDO 1.0), Boston last fall passed a building emissions reduction and disclosure ordinance (known as BERDO 2.0).  Using the data gathered under the first ordinance for benchmarking, Boston has set declining emissions targets starting in 2025 with an end goal of net zero emissions for all large buildings by 2050.   While Boston is still working out the details, including how renewable energy credits and power purchase agreements will play into compliance, it is clearly headed down a path of building decarbonization (see our recent post on Boston’s efforts to ban fossil fuel hookups in new construction and major renovations).

So how will this play out for the regulated community in Massachusetts?  In response to concerns about the potential for conflicting reporting requirements at the local and state level, Boston has promised to work with DOER during the adoption of the statewide program to share expertise and lessons learned.  Time will tell whether the Commonwealth follows Boston’s lead and ultimately sets emissions reduction standards for the building sector as well.  Don’t bet against it.