Catalyst

Environmental Forecast: A Look Ahead at a Busy Biden White House, a Packed Agenda at DEP, and What it Means for Pennsylvania Business and Industry

By Katherine L. Vaccaro, Esq. and Jessica D. Hunt, Esq.

 

Months before inauguration day, then-President Elect Biden started promising an agenda rife with environmental protection initiatives.  Now, just weeks into his presidency, Biden is delivering on that promise. Of course, the national headlines are all focused on federal issues, but here in Pennsylvania, we can’t lose sight of what the state Department of Environmental Protection has planned for the Wolf administration’s last full year before the next gubernatorial election. All in all, we expect nothing short of a dynamic year during which businesses would be wise to stay informed and ready to respond as evolving environmental regulatory programs start to take shape at both the federal and state levels.

 

President Biden hasn’t minced words when it comes to his two overarching environmental policy objectives: climate change and environmental justice.  Indeed, on his first day in office, Biden issued an executive order rejoining the Paris Agreement, a global accord among all major emitting countries to cut carbon pollution.  And with the D.C. Circuit Court of Appeals’ recent decision to vacate the Affordable Clean Energy (“ACE”) Rule, which was Trump’s answer to Obama’s Clean Power Plan, Biden is poised to get to work on his own climate plan without first having to undo the ACE Rule.  (American Lung Association v. EPA, No. 19-1140 (D.C. Cir. 2021)). 

 

Also on his first day, Biden took a broad tact, ordering all executive agencies, including the U.S. Environmental Protection Agency, to immediately review all regulatory actions taken during the Trump years. This process will necessarily unfold over the months and years to come, but it’s a safe bet that most of Trump’s industry-friendly regulatory changes will be among the ones most heavily scrutinized, with some almost surely destined for the chopping block.  Biden also recommended that agencies put a 60-day hold on final rules that have not yet taken effect to allow the new administration an opportunity to review them through its own lens.  In this context, we expect Trump’s very recent Clean Air Act cost-benefit rule, which has the muscle to cause sweeping effects on how future CAA standards are developed, and which was lauded by industry and panned by environmentalists for this reason, will be sidelined before it ever makes it out of the starting gate.

 

On the policy front, Biden’s administration is moving quickly to undo any Trump-era guidance policies that can be washed away simply by publishing new guidance that is identified as superseding its predecessor.  This effort, however, could be complicated by the EPA September 2020 rule on guidance documents which provides, among other things, that certain existing guidance cannot be modified or withdrawn, and previously-rescinded guidance cannot be reinstated, without public notice and comment.  But ultimately, this layering of elements of the formal rulemaking process on top of historically “non-binding” guidance could leave some important policy-based standards sinking in a quagmire of legal enforceability.  The legality under the CAA of so-called “startup, shutdown, and malfunction” exemptions is just one example, and there are many others that we’ll be watching closely.

 

While Biden’s response to climate change is sure to be aggressive, it’s what he does to promote environmental justice that could ultimately define his legacy on environmental policy.  During his first week in office, Biden issued an executive order creating a White House Environmental Justice Interagency Council, and ordering EPA to strengthen its enforcement of environmental violations having a disproportionate impact on underserved communities and create a community notification program to deliver real-time data on environmental pollution.  Only time will tell, but facilities in these areas are likely to see enhanced monitoring obligations and steeper civil penalties when EPA decides to enforce. 

 

Indeed, Biden’s federal environmental justice program and others that trickle down to the states could have widespread implications for any facility located in an underserved community that either currently holds one or more environmental permits or is seeking a new permit.  Administrative hurdles could spike depending on how environmental justice requirements are ultimately built into federal and state permitting programs, with public participation predicted to become an essential part of many permitting processes, even if no project expansion is being proposed.  Notably, the Biden Administration could take a cue from our next door neighbor, New Jersey, whose landmark approach to environmental justice is generally viewed as the most expansive to date.  One opportunity for the Biden Administration to advance both climate change and environmental justice agendas could be through the rollback of the Trump Administration’s changes to the National Environmental Policy Act. In July 2020, the Council on Environmental Quality amended NEPA’s implementing regulations to streamline the review process, in part, through redefining what constitutes a “major federal action,” and repealing the requirement to consider cumulative impacts.  Those amendments are currently under appeal.

 

The DEP will also be busy in 2021.  First up are the long-awaited increases to existing air quality program fees and imposition of certain new fees, all of which took effect on January 16, 2021.  Therefore, while DEP will be gradually increasing fees over the next ten years, the regulated community will feel the impact of the fee increases immediately. Most notable among the new fees are 1) an annual maintenance fee for facilities holding both major and minor air quality operating permits; 2) a fee for the submission of initial notifications of asbestos abatement and demolition/renovation; and 3) a fee for the submission of Requests for Determination. The amount of the fee to submit an RFD will depend on whether the owner or operator meets the definition of a small business stationary source (as defined in Section 3 of the Air Pollution Control Act).  However, the regulation does not include an increase in the cost of annual emission fees.

 

DEP is also in the process of amending its Air Quality regulations to incorporate Pennsylvania’s carbon dioxide trading program to allow Pennsylvania to participate in the Regional Greenhouse Gas Initiative. The amendments will establish a cap on carbon dioxide emissions from fossil fuel-fired electric generating units with a nameplate capacity equal to or greater than 25 megawatts and create a cap and trade program where each covered facility can purchase and trade emission allowances.  Over time, the total amount of allowances available will decrease.  While Pennsylvania’s participation in RGGI is expected to begin in 2022, it is important for affected businesses to begin to prepare for eventual impacts to operations and economics, with concerns over Pennsylvania’s business “leaking” to non-RGGI states front and center.

 

In addition, DEP is reconsidering its Reasonably Available Control Technology standards to satisfy the 2008 National Ambient Air Quality Standards for ozone in light of the Third Circuit’s decision in Sierra Club v. EPA, No. 19-2562 (3d. Cir. 2019).  On August 27, 2020, the Third Circuit vacated EPA’s approval of three components of Pennsylvania’s State Implementation Plan related to nitrogen oxide emission limits for coal-fired power plants equipped with selective catalytic reduction.  It is unclear if DEP will provide additional information to EPA in support of the existing limits, or create new emission limits.  EPA has until 2022 to approve a revised SIP or implement a Federal Implementation Plan.  At the same time, DEP is proposing a new rulemaking to create RACT standards to satisfy the 2015 ozone NAAQS (RACT III).  RACT III will impact volatile organic compounds and NOx standards from a variety of sources.  While still in preliminary development, the most notable changes include detailed notification requirements for affected facilities, the addition of a presumptive NOx limit for certain combustion sources and the lowering of the presumptive NOx emission limit for simple cycle combustion turbines and cement kilns for many units.  RACT III is being proposed for emission units operating prior to August 3, 2018.  There will be opportunities for public participation once DEP publishes the proposed amendments in the Pennsylvania Bulletin, which is expected as early as the first quarter of 2021.

 

Lastly, not unlike the rest of the country, DEP is working to address Per- and polyfluroroalkyl substances, commonly called PFAS and PFOA, including by proposing to amend its Act 2 regulations to update the current maximum containment levels established under the statewide health standard.  The rulemaking would also add statewide health standard medium-specific concentrations for three new pollutants: Perfluorooctanoic Acid, Perfluorooctane Sulfonate and Perfluorobutane Sulfonate.  DEP is currently finalizing the amendments, but with no end in sight for the push to address emerging contaminants, facilities that stand to get caught up in this regulatory tsunami should commit to tracking both Pennsylvania’s efforts and any related developments at the federal level.

 

 

Katherine Vaccaro is a partner at Manko, Gold, Katcher & Fox, LLP, with nearly two decades of experience in environmental law.  She focuses her practice on air regulation and works with a diverse group of industrial and commercial clients. Jessica Hunt is an associate at Manko Gold and focuses her practice on regulatory compliance and transactional matters.

 

Manko, Gold, Katcher & Fox is an environmental, energy and land use law and litigation firm.  For further information on any of the topics in this article, please contact Kate Vaccaro, Esq. (kvaccaro@mankogold.com or 484-430-2329) or Jessica Hunt, Esq. (jhunt@mankogold.com or 484-430-2338). 

 

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