State environmental regulators are beginning to develop plans designed to meet more stringent air quality standards under the Clean Air Act (CAA), including standards to protect against unhealthful levels of ground-level ozone. In doing so, many states are looking more closely at a factor that contributes to their air quality problems but that they lack any authority to address: the phenomenon of air pollution carried by prevailing winds into their jurisdictions from emission sources located not only outside their own state borders but outside the US itself. The issue of international contributions to air quality concerns has gained currency in part due to the many challenges states face in meeting the stringent nationwide air quality standards for ground-level ozone that the US Environmental Protection Agency (EPA) adopted in 2015.
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EPA has shown a little love for states wanting action on per- and polyfluoroalkyl substances (PFAS). On February 14, 2019, EPA announced its PFAS Action Plan, calling it “the most comprehensive, cross- agency action plan for a chemical of concern ever undertaken by the Agency.” The Action Plan consists of 23 priority action items with the majority identified as short-term or generally taking place or expected to be completed in the next two years.
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2018 was a banner year for M&A activity in the energy space, with numerous high dollar value transactions in the upstream, midstream, downstream and oil field services (OFS) segments. As investors in the public securities markets have shown a significantly decreased appetite for new issuances of equity by energy companies, the preferred exit or growth strategy for 2018 has been through strategic mergers, acquisitions or divestitures. These transactions have manifested themselves in various forms: asset acquisitions and divestitures, private equity investment into “drillcos” with strategic oil and gas companies, public-public mergers between OFS companies and upstream shale drillers, and simplification transactions by master limited partnerships (MLPs) in the midstream space. In addition to all this M&A activity, one element has become significantly more prevalent in the oil and gas industry throughout 2018 and shows no signs of letting down for 2019: water.
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The US National Ambient Air Quality Standards (NAAQS) are the centerpiece of the US Clean Air Act (CAA) and establish allowable concentration levels for six “criteria air pollutants”: ozone, particulate matter, lead, carbon monoxide, nitrogen dioxide, and sulfur dioxide. The CAA requires the US Environmental Protection Agency (EPA) to review and, as appropriate, revise the NAAQS at least every five years, and EPA has, since 1970, regularly adopted increasingly stringent standards. Whether those revisions have gone far enough or too far has become a predictably contentious issue, with each review involving debates over science, the role of EPA’s Clean Air Science Advisory Committee (CASAC), the discretion of the EPA Administrator, and the format of the review process itself, among many other issues.
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The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), commonly referred to as the Superfund law, directed the United States Environmental Protection Agency (EPA) to create a list of the country’s most hazardous waste sites. Sites are proposed to be placed on this “National Priorities List” (or NPL as it is known to environmental law professionals) if they exceed a certain risk score, or Hazard Ranking, and added to the List if the ranking is confirmed after a formal notice-and-comment process. A detailed set of regulations called the National Contingency Plan (NCP) governs how sites placed on the NPL will be investigated, alternative remedies evaluated, and a final remedy selected and then implemented. The NPL, the NCP, and various EPA guidance memoranda have established what practitioners acknowledge is an imperfect but generally workable process in which EPA and states work with potentially liable parties to manage cleanups at NPL sites.
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With produced water volumes on the rise as a result of the growth in oil and natural gas production and various areas of the country experiencing water scarcity, states and stakeholders are increasingly looking for ways to reuse, recycle and beneficially use waters originating from the oil and gas industry. Two recent initiatives are likely to significantly advance policy decisions related to produced water management.
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As a former regulator (both as an inspector and an attorney, ensuring compliance and enforcing violations) in the environmental law enforcement space, I read EPA Assistant Administrator Susan Parker Bodine’s recent memorandum entitled Transition from National Enforcement Initiatives to National Compliance Initiatives with great interest. Having numerous facility inspections and enforcement settlements under my belt, I have seen firsthand the interplay between compliance and enforcement. To be sure, the threat of enforcement and the deterrence factor associated with resolving an enforcement action are powerful tools. But, if the end goal is compliance with environmental laws, does the road leading there have to be so scary for the regulated community? Whereas many regulated parties commonly see EPA and other environmental agencies as enforcement machines, this proposed transition to a more compliance-oriented approach may be not only a welcome change, but also an appropriate one that will actually improve compliance. After all, Ms. Bodine’s office is entitled the Office of Enforcement and Compliance Assurance (OECA). Isn’t it a good idea to have an equal focus on helping with compliance and on enforcement? And isn’t the point to maximize compliance? Shouldn’t OECA be striving for a world in which its “enforcement” arm goes out of business because it has “assured compliance?” That may be too much for the regulated community to hope for, but the notion of “compliance” initiatives over “enforcement” initiatives is not a bad way to start.
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Judicial review of state agency regulatory orders in California has long been seen as an exercise in futility as state courts typically give significant deference to agency determinations. However, two recent decisions by California Superior Courts have bucked that trend and may provide renewed hope that success at the trial court level is not out of reach.
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