Introduction

President Biden signed the Inflation Reduction Act of 2022 (the Act) into law on August 16, 2022.  The Act represents an expansive investment in the energy industry, with many provisions targeting clean energy and climate change issues through funding and tax credits.  However, several notable provisions from an environmental permitting and compliance standpoint are buried amongst the financial and tax provisions.  These environmental provisions relate to permitting and compliance that the regulated industry, especially energy companies, should watch closely.

Funding for Permitting and Programmatic Development

The Act provided significant funding to regulatory authorities for a number of permitting-related activities. 

For example, the National Oceanic and Atmospheric Administration (NOAA) received $20 million to assist with permitting and project review.  The funds are meant to result in more efficient, accurate, and timely reviews for planning, permitting and approval processes through hiring and training personnel and obtaining new technical and scientific services and equipment. 

The United States Environmental Protection Agency (U.S. EPA) received $40 million for its permitting and project review efforts.  The funds will be utilized to develop efficient, accurate, and timely reviews for permitting and approval processes through hiring and training of personnel, development of U.S. EPA programmatic documents, procurement of technical or scientific services for reviews, development of environmental data and new information systems, purchase of new equipment, developing new guidance documents, and more.

The Act provided over $62.5 million to the Council on Environmental Quality to develop programmatic documents, tools, guidance, and improvement engagement.  These funds will also support collection of data regarding environmental justice issues, climate change data, development of mapping/screening tools, and tracking and evaluation of cumulative impacts. 

Several other federal agencies received millions in funding for review and planning of electricity generation infrastructure, like the Federal Energy Regulatory Commission, the Department of Energy, and the Department of the Interior.  Funding will be used to facilitate timely and efficient reviews, as well as generate environmental programmatic documents, environmental data, and increase stakeholder and community involvement. 

In sum, regulators involved in environmental and energy permitting received a substantial boost in funding targeting the permitting process, including supporting the development and build out of programmatic documents and capabilities.  The funding could improve the timing of the permitting processes for these agencies, but it could also lead to additional administrative burdens in the form of new application and compliance materials and increased regulatory scrutiny where a regulator has more time and money to invest in the regulatory process.

Continue Reading Environmental aspects of the Inflation Reduction Act of 2022

In response to President Biden’s Executive Order entitled, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” the Environmental Protection Agency (EPA) recently issued a proposed rule taking aim at greenhouse gases (GHG) and volatile organic compounds (VOC) emissions from new and existing oil and natural gas production, processing, transmission, and storage facilities.  The proposal contains three basic components.  In a break with precedent, EPA did not provide proposed regulatory language.

First, the proposed rule would revise the new source performance standards (NSPS) for GHGs and VOCs for new, modified, and reconstructed sources, including the production, processing, transmission, and storage segments.  Specifically, EPA proposes to a new subpart OOOOb that would update and expand the current requirements under CAA Section 111(b) for methane and VOC emissions from sources constructed, modified, or reconstructed after November 15, 2021.  NSPS OOOOb would include standards for emission sources not regulated previously under the 2016 NSPS OOOOa.  Among other changes, EPA proposes to apply to VOC emissions thresholds to storage vessel tank batteries as opposed to individual storage tanks.  EPA has also suggested a change to the definition of legal and practical enforceability which could impact the utilization of state-level permitting previously used to reduce the potential to emit to below the 6 ton per year VOC-threshold.

Second, the proposed rule would create a new subpart OOOOc that would contain the first nationwide emissions guidelines (EG).  The EG would be a state model rule that states could use to develop, submit, and implement state plans that establish performance standards to limit GHGs from existing sources.

Continue Reading EPA issues proposal to reduce GHGs and VOCs from new and existing oil and natural gas sources

On October 21, 2021, we published an article called “Waiting for OSHA: pending vaccine ETS and increased enforcement.” In the article, we discussed the then-pending Emergency Temporary Standard (ETS) regarding vaccinating the workforce OSHA was tasked with developing by President Biden in his “Path Out of the Pandemic” memorandum. The ETS is scheduled

Since President Joe Biden issued his “Path Out of the Pandemic” memorandum and Executive Order 14042 on September 9, 2021, employers have had to navigate piecemeal instructions on vaccine mandates.  For example, federal contractors and subcontractors received vaccine mandate guidance from the Safer Federal Workforce Task Force on September 24, 2021.  However, employers should not grow too comfortable with the current status of pandemic regulations, which continue to change in various jurisdictions and will again on a federal level soon.

OSHA’s Emergency Temporary Standard

In his “Path Out of the Pandemic” memorandum, President Biden specifically tasked the Occupational Safety and Health Administration (OSHA) with developing a rule to encourage vaccinations among the workforce – the Emergency Temporary Standard (ETS).  The ETS will require employers with over 100 employees to do the following:

  1. either (a) ensure all employees are fully vaccinated, or (b) require any employees who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work; and
  2. provide paid time off for any time to get vaccinated and/or to recover if they are ill post-vaccination.

State plans will be required to implement equally protective rules within 30 days.  Though not yet available for review, the status of the pending ETS remains under review by the White House Office of Management and Budget.

Continue Reading Waiting for OSHA: pending vaccine ETS and increased enforcement

On January 19, 2021, in a 2-1 decision, the D.C. Circuit Court vacated the Trump administration’s 2019 Affordable Clean Energy (ACE) Rule and remanded it to the U.S. Environmental Protection Agency (EPA). The decision offers a strong statement about EPA’s breadth of authority to regulate greenhouse gases (GHGs) under the Clean Air Act (CAA) and, if its position is upheld, clears the way for the Biden administration to regulate power plants.

The Affordable Clean Energy Rule

The EPA promulgated the ACE Rule in 2019 under the CAA, replacing the Obama administration’s 2015 Clean Power Plan (CPP). Both rules sought to reduce GHG emissions from the power sector; but where the CPP implemented broader industry-wide mechanisms, the ACE Rule limited reduction efforts to the actual source power plants.

The 2015 CPP offered “beyond the fenceline” tools for states to reduce emissions by replacing fossil fuels with renewable energy sources and participating in emissions credit-trading programs; however, in February 2016 the U.S. Supreme Court stayed the implementation of the CPP pending litigation in the D.C. Circuit. During the stay and subsequent freeze of litigation, the Trump administration rescinded the CPP and promulgated the ACE Rule.

In promulgating the ACE Rule, the Trump EPA took an alternative view of the CAA than the Obama EPA and reasoned that the CAA expressly limited the EPA’s power to only “at the source” emissions reduction options, such as heat rate improvement technologies. As a result, the Trump administration removed all of the CPP’s “beyond the fenceline” options and limited emissions restrictions to those applied directly to power plants.

Continue Reading The fall of Trump’s Affordable Clean Energy Rule and the strengthened EPA authority to regulate greenhouse gases