Environmental Business Alert

Date: Sep 11, 2012

D.C. Circuit Vacates Cross-State Air Pollution Rule

The U.S. Court of Appeals for the District of Columbia Circuit has dashed another attempt by the U.S. Environmental Protection Agency (EPA) to regulate cross-state air pollution. The August 21, 2012, decision in EME Homer City Generation L.P. v. EPA, vacates the Cross-State Air Pollution Rule, which sought to establish a cap-and-trade program to reduce power plant emissions of nitrogen oxide (NOx) and sulfur dioxide (SO2) in "upwind states" that contribute to pollution in "downwind states." The Clean Air Act's (CAA or Act) so-called "good neighbor" provision authorizes EPA to restrict any air pollutant emissions that interfere with a state's ability to meet or maintain the National Ambient Air Quality Standards (NAAQS). According to the Court, however, EPA exceeded its statutory authority by requiring greater emissions reductions from upwind states than their purported contribution to downwind states. EPA also violated the Act by imposing federal implementation plans before providing states an opportunity to develop their own implementation plans.

SEC Adopts Final Conflict Minerals Disclosure Rule

The U.S. Securities and Exchange Commission (SEC) voted on August 22, 2012, to adopt the long anticipated rule on conflict minerals. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act defines "conflict minerals" as coltan, cassiterite, gold, wolframite, their derivatives (including tantalum, tin and tungsten), or any other mineral or its derivates, which finances the conflict in the Democratic Republic of the Congo (DRC) or any adjoining country. Accordingly, a company which is required to file reports under the Securities Exchange Act of 1934, and which may use a conflict mineral in a manner "necessary to the functionality or production of a product" it manufactures or contracts for manufacture, must report annually to the SEC. Prior to reporting, these companies must conduct a reasonable inquiry into the country of origin of the minerals. Should the company know or have a reason to believe that it is using a conflict mineral as a result of such inquiry, it must conduct a "due diligence" inquiry into the source and chain of custody of the minerals. Due diligence measures must conform to a nationally or internationally recognized due diligence framework, and the reports must be audited by a third party and certified by the company. The rule also requires disclosure to the public through the Internet. The first reports are due May 31, 2014 and cover calendar year 2013.

EPA Proposes to Amend the NSPS for Stationary Combustion Turbines

In response to a petition for reconsideration filed by the Utility Air Regulatory Group, EPA proposed to amend the new source performance standards (NSPS) for stationary combustion turbines constructed, modified or reconstructed after February 18, 2005 (40 C.F.R. Part 60, Subpart KKKK). The August 29, 2012, proposal would clarify that installing a new turbine engine at a combined heat and power facility, combined cycle facility or a heat recovery steam generator facility subject to other subparts of the NSPS regulations, renders the entire facility subject exclusively to Subpart KKKK. EPA also proposed to address the use of byproduct and low-British thermal unit gas in stationary combustion turbines. In addition, the rule would exempt these turbines from the SO2 and/or NOx requirements of Subpart KKKK if they are in compliance with the NSPS for petroleum refineries or municipal waste combustion units, or subject to a federally enforceable permit requiring the use of low sulfur fuels. Finally, EPA proposed to make the SO2 and NOx standards applicable during periods of startup, shutdown and malfunction. Public comments are due October 29, 2012.

EPA Requests Nominations for "Ad Hoc" SAB Panel on Hydraulic Fracturing

EPA is requesting nominations for experts to serve on an "ad hoc" panel focused on hydraulic fracturing research. The ad hoc panel will assist EPA's Scientific Advisory Board (SAB) in reviewing the Agency's progress and final reports on the potential drinking water impacts of hydraulic fracturing. Nominations must be submitted through the SAB website by September 11, 2012.

EPA Publishes Peer Review Plans for the 2012 TSCA Work Plan Chemicals

EPA has released its plans for conducting peer reviews of risk assessments to be performed on seven chemicals selected under the 2012 Toxic Substance Control Act (TSCA) Work Plan. These substances include antimony trioxide, HHCB (1,3,4,6,7,8-Hexahydro-4,6,6,7,8,8,-hexamethylcyclopenta[g]-2-benzopyran), long- and medium-chain chlorinated paraffins, methylene chloride, n-methylpyrrolidone, and trichloroethylene. They are the first of 83 existing substances that EPA intends to evaluate over the next few years for potential regulatory action. The process will include an opportunity to submit comments on the draft risk assessments before peer review begins, and present comments at the peer review meetings via teleconference. Comments on the plans are due September 27, 2012.

California Extends Comment Period for Draft "Green Chemistry" Rule

The California Department of Toxic Substances Control (DTSC) has extended, until October 11, 2012, the comment period for its latest draft Regulation for Safer Consumer Products, or "Green Chemistry" rule. The July 27, 2012, draft identifies roughly 1,200 "chemicals of concern" (COCs). As we discuss further in "The Risky Business of Evaluating Risk," DTSC's designation of a "priority" product or mixture containing a COC would require manufacturers to perform an alternatives analysis, which could trigger further regulation and pose certain product liability litigation risks. DTSC has provided a summary of the changes in the July 27, 2012, version.