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Daniella D. Landers

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On November 7, 2020, Joe Biden became the projected President-elect of the United States. With an aggressive climate change plan that includes rejoining the Paris Agreement on the first day of his term, President-elect Biden and his administration will likely make significant changes to environmental, health, and safety rules and policies that will rollback Trump administration environmental actions and increase civil and criminal enforcement of environmental laws.

New Regulatory Rollbacks and Expansions

The Trump administration took deregulatory actions that weakened or repealed more than 100 environmental policies and regulations.  For example, President Obama’s Clean Power Plan, which set targets for greenhouse gas emissions for existing power plants, was repealed and replaced with the Affordable Clean Energy rule, which removed emission targets and directed states to determine the best course of action for regulating power plant emissions.  The Trump administration issued the Safer Affordable Fuel-Efficient Vehicles Rule, which authorized the Department of Transportation to establish fuel economy standards and preempted similar state regulations, including California’s regulations regarding greenhouse gas emissions for new passenger cars and light trucks.  The Trump administration’s Navigable Waters Protection Rule significantly narrowed the “Waters of the United States” Rule under the Clean Water Act.  Trump’s Environmental Protection Agency (EPA) repealed Obama-era methane and volatile organic compound emissions standards for new and existing oil and gas operations, and removed the most stringent requirements of newly promulgated revisions to the Risk Management Program rule.  The Occupational Safety and Health Administration (OSHA), meanwhile, largely stalled new rulemakings that had been initiated under the Obama administration, including the Process Safety Management (PSM) standard, and has so far declined to initiate a rulemaking in response to COVID-19 under the current administration.…

Continue Reading Swinging the Pendulum: Significant Shifts in Environmental and Safety Regulation under a Biden Administration

Recently, several health and safety groups, including the National Safety Council, the American College of Occupational and Environmental Medicine, and 20 other safety organizations recommended in a letter to the U.S. House of Representatives to hold hearings on the workplace and public safety implications of the proposed Marijuana Opportunity Reinvestment and Expungement (MORE) Act of…

On August 31, 2020, the U.S. Environmental Protection Agency (EPA) Administrator, Andrew Wheeler, signed the final rule (referred to as the Steam Electric Reconsideration Rule) initially proposed last year to revise the technology-based effluent limitations guidelines and standards (ELGs) for common types of wastewater discharges from electric power generating facilities. This final rule rolls back the Obama-era effluent guidelines 2015 rule, which set the first federal limitations on toxic metal discharges from power plants. EPA touts that the new final rule will significantly reduce after tax compliance costs by $140 million per year.

New effluent standards

The Obama-era 2015 rule set requirements for wastewater streams associated with several processes and by-products of steam electric power generation: flue-gas desulfurization, fly ash, bottom ash, flue-gas mercury control and gasification of fuels such as coal and petroleum coke. However, EPA’s new final rule focuses on revisions to primarily two types: flue-gas desulfurization (FGD) wastewater and bottom ash (BA) transport water.…

Continue Reading EPA administrator signs final power plant wastewater rule

As we mentioned in a previous post, the COVID-19 pandemic has generated a wave of bankruptcies that we expect to continue into 2021. Companies entering 2020 in a strong financial position may now need to quickly shed distressed assets and generate cash. A Chapter 11 reorganization is likely to be too long and burdensome for companies in this position. Fortunately, the Section 363 sale process offers a speedier alternative for disposing of distressed assets and allows purchasers to acquire those assets free and clear of liens and encumbrances, ostensibly including environmental liabilities. But caveat emptor: not all environmental liabilities are extinguished. Stalking horse candidates (and other buyers of assets from a 363 sale) should consult experienced environmental transactional counsel to understand exactly what environmental liabilities remain and how to structure the purchase agreement and sale itself to maximize release from preexisting environmental liabilities.

The Section 363 Sale Process and Benefits

Section 363 of the Bankruptcy Code provides for the sale of assets through a competitive bidding process outside of a Chapter 11 reorganization. The process typically begins with a debtor marketing assets to potential purchasers. Due diligence occurs, and the potential purchasers submit bids for the assets. The debtor selects the best bid, and that party becomes the “stalking horse.” The debtor and stalking horse bidder then negotiate an asset purchase agreement. After the asset purchase agreement is negotiated, the debtor files a motion to approve bidding procedures with the bankruptcy court. Potential purchasers then submit their bids according to the court-approved procedures, and the debtor selects the winning (i.e. highest) bid. Once the debtor selects the winning bid, the court must approve the sale of the assets before they are transferred to the successful bidder.

Despite the competitive bidding process, Section 363 sales provide notable benefits to both debtors and prospective purchasers. First, the process is speedy. Debtors in need of quick cash can sell off distressed or illiquid assets through the Section 363 process without the approvals and voting needed for Chapter 11 reorganizations. Purchasers also like the process because they can often obtain assets at a discounted price. More importantly, however, Section 363 sales provide for the disposition of assets free and clear of liens and encumbrances. This benefits both debtors and prospective purchasers. Debtors may claim that the assets are being sold as is and therefore provide limited representations and warranties. At the same time, purchasers obtain the assets free and clear of liens and encumbrances and therefore acquire generally clean title supported by a bankruptcy order.…

Continue Reading Quick cash in the times of COVID-19 – Section 363 sales of distressed assets and environmental liability

On August 13, 2020, the U.S. Environmental Protection Agency (EPA) issued two final rules—a Methane Policy Rule and an Inspection Rule —rolling back portions of its New Source Performance Standards (NSPS) for the oil and gas industry. In explaining these changes, EPA Administrator Andrew Wheeler stated that the EPA rescinded portions of the Methane Policy Rule because those portions were based on an impermissibly broad interpretation of the Clean Air Act (CAA).

Updated methane regulations rescind methane standards and ease emissions requirements

Under the new Methane Policy Rule, the EPA rescinded methane and volatile organic compound (VOC) emissions standards for new and modified oil and gas transmission and storage infrastructure, including methane limits for new and modified oil and gas production and processing equipment.

Under the Inspection Rule, the EPA relaxed requirements for oil and gas operators to monitor emissions leaks. This Rule excludes low production well sites (“where the total combined oil and natural gas production for the well site is at or below 15 barrels of oil equivalent per day”) from fugitive emissions monitoring, as long as operators maintain records to demonstrate well production remains at or below the requisite threshold. Additionally, all fugitive emissions monitoring may stop when all major production and processing equipment is removed from the well site.…

Continue Reading EPA rolls back methane regulations for oil and gas infrastructure

Earlier this month, the White House Council for Environmental Quality (CEQ) finalized its update of the governing regulations for the National Environmental Policy Act (NEPA) rule.  This marks the first comprehensive review of NEPA since its 1978 promulgation. Entitled, “Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act,” it seeks…

In a historic act, U.S. EPA proposed the nation’s first-ever greenhouse gas (GHG) emissions standard for aircraft on July 21, 2020. (Proposed Rule). Once the Proposed Rule is published in the Federal Register, the public will have 60 days to submit comments. There will likely be significant push back from environmental groups on the Proposed Rule; so it may be important to provide industry comments, where appropriate. U.S. EPA has stated it is hoping to issue a final rule in 2021.
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Continue Reading U.S. EPA takes historic action on aviation emissions

A group of 15 states and the District of Columbia agreed to collaborate on advancing and accelerating the market for electric medium- and heavy-duty vehicles, including large pickup trucks and vans, delivery trucks, box trucks, school and transit buses, and long-haul delivery trucks (big-rigs). The goal of this initiative is to ensure that 100 percent…

1. Pipeline May Cross Underneath the Appalachian Trail with Forest Service Approval

On June 15, 2020, the U.S. Supreme Court (SCOTUS) held in a 7-2 decision that the U.S. Forest Service had the authority to grant developers of a gas pipeline right-of-way underneath the Appalachian National Scenic Trail.

At issue in this case was whether the Forest Service or the National Park Service (NPS) had jurisdiction over the trail. Under the U.S. Mineral Leasing Act (MLA), the Forest Service does not have jurisdiction over “lands in the National Park System.” However, in order to establish the National Scenic Trail, the Forest Service gave the Department of the Interior (DOI) an easement on that land to create and maintain the Appalachian Trail. As a result, the question became: did the granting of an easement to create the Appalachian Trail make that land a part of the National Park System?…

Continue Reading ICYMI: June sees major U.S. Supreme Court environmental activity