CERCLA 108(b) Rulemaking Overview
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1 CERCLA 108(b) Rulemaking Overview 2010 ASTSWMO Hazardous Waste Managers Conference and Training Salt Lake City, Utah June 30, 2010
2 Statutory Language and Law Suit CERCLA Section 108 (in part) (b)(1) Beginning not earlier than five years after the date of enactment of this Act, the President shall promulgate requirements (for facilities in addition to those under subtitle C of the [SWDA] and other Federal law) that classes of facilities establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances. Not later than three years after the date of enactment of the Act, the President shall identify those classes for which requirements will be first developed and publish notice of such identification in the Federal Register. On March 12, 2008, EarthJustice, et. al., sued EPA on our failure to issue regulations under 108(b) 2
3 Court Decision On February 25, 2009, U.S. District Court ordered EPA to issue a priority notice, as required by Section 108(b) of CERCLA, no later than May 4, 2009, identifying those classes for which EPA will first issue FA regulations The Court extended the deadline (at the government s request), requiring EPA to sign a priority notice no later than July 10, 2009 No later than July 10, 2009, EPA shall identify those classes of facilities for which CERCLA Section 108(b) financial responsibility requirements will be first developed and shall transmit a signed notice of such prioritization to the Federal Register for publication. 3
4 Notices EPA s July, 2009 Federal Register notice defined classes within hardrock mining for which EPA would develop financial responsibility requirements under CERCLA 108(b) Hardrock mining is defined as the extraction, beneficiation or processing of metals (e.g., copper, gold, iron, lead, magnesium, molybdenum, silver, uranium, and zinc) and non-metallic, non-fuel minerals (e.g., asbestos, gypsum, phosphate rock, and sulfur). This includes primary smelting at mines or independent This notice was deemed by the U.S. Northern District Court as sufficient to satisfy our statutory obligation as compelled by a March, 2008 lawsuit. During our consideration of approaches for the FR, we decided to identify additional industry classes beyond mining for possible 108(b) rulemaking. 4
5 Notices In a December 2009 ANPRM, we identified three additional industrial sectors for the development of a proposed regulation: Chemical Manufacturing (NAICS 325) Petroleum eu and Coal Products Manufacturing ac u (NAICS 324) Electric Power Generation, Distribution and Transmission (NAICS 2211) We also recommend that five additional classes be furthered studied before a decision is made regarding the development of proposed 108(b) regulations: Waste Management and Remediation Services (NAICS 562) Recycling of CERCLA hazardous substances Metal Fabrication (NAICS 332) Wood Products (NAICS 321) Electronic and Electrical Equipment (NAICS 334 and 335) 5
6 Rationale for Selection Mining: 109 (7%) of the NPL sites are mining i and/or smelting sites $2.5 billion (21%) was spent on NPL mining sites Large TRI releases Chemicals and Petroleum Chem 181 NPL sites (12% of total NPL sites) Chem $2.7 billion on these NPL sites Petro 30 NPL sites (22 refineries) Petro $250 million on the refineries Chem and Petro significant TRI releases and BR generation Electric Power Third (after mining and chem) in TRI releases Damage cases Four NPL sites containing CCRs 6
7 Approach to Analysis establish and maintain evidence of financial responsibility consistent with the degree and duration of risk Identify risky practices/classes based on historical NPL listings and damage cases Develop model program of activities where we need FR protect against the level of risk based on the payment experience of the Fund, commercial insurers, courts settlements and judgments, and voluntary claims satisfaction Using primarily NPL CERCLIS data and Removal Program data (along with other viable data), identify costs for the risky practices/classes promulgate requirements (for facilities in addition to those under Subtitle C of the [SWDA] and other Federal law) Analyze existing Federal and State financial responsibility programs that may already address our risky practices/classes 7
8 Approach to Analysis Financial responsibility may be established by any one, or any combination. Of the following: insurance, guarantee, surety bond, letter of credit, or qualification as a self- insurer. Identify viable mechanisms to meet the financial responsibility obligations for the particular class of facilities impose financial responsibility requirements as quickly as can reasonably be achieved but in no event more than 4 years after the date of promulgation Design a system/approach that ensures proper implementation of the program Priority in the development of such requirements shall be accorded to those classes of facilities, owners, and operators which the President determines present the highest level of risk of injury. Need to determine if mining, chemicals, petroleum present the highest level of risk of injury 8
9 Current Hard Rock Mining Schedule Event Date Admin Signature Proposal April 13, 2011 Admin Signature Final Rule Sept 10,
10 Status Chem/Petro/Power are 3-6 months behind mining Other sectors also being studied Mining originally a Tier II, upgraded to Tier I Already held Early Guidance 10
11 Significant Issues Raised at Early Guidance Coordination with other Federal/State programs? Section 114 and State preemption Financial Test Additional critical topics Who should be covered? What costs should be covered? What level of FR is needed? Adequacy of facility FR When must they post FR? Which mechanisms are adequate? Community Involvement 11
12 ASTSWMO Comments Summary of your June 4, 2010 letter offering responses/suggestions to our questions at the last meeting: State preemption? Perhaps the process could allow the responsible party to petition that all or part of the FR be waived if the identical post-closure activities are covered by another FR mechanism Which costs? NRD, 3rd party, health studies hard to predict. Closure and postclosure cost need to be covered Flat amount or site-specific? ifi Site-specific labor intensive but more accurate, flat fee efficient but blunt. Maybe hybrid would be best. 12
13 ASTSWMO Comments Self-implementing or 3 rd party? Limited it resources available, independent d 3 rd party hired by Agency is best solution. When to post FR? Strictly controlled incremental funding where 100% cannot be posted immediately. Which mechanisms? For mining: Rather than the corporate test, EPA should look to other mechanisms. Community involvement? Favor a fixed amount set aside within the FR mechanism for community involvement support. 13
14 CERCLA Sec.114 and State Preemption CERCLA 114 (d): preemption provision relating to State FR requirements (See Attachment D ) Facility in compliance with EPA FR not subject to State or local FR requirement for hazardous substances. (State-mandated operating plans and permits unaffected) We have information on 51 State mining financial assurance programs in 40 States that could be affected by preemption provision. EPA will need to consider the President s May 20, 2009 Memorandum on Preemption, which provides generally that agencies include preemption statements only when they have sufficient legal basis. 14
15 State Preemption Issue Potential Effect on State Laws: EPA cannot control the interpretation of Section 114 by State courts. Generally, we suspect that State financial responsibility requirements connected with release of a hazardous substance may not be enforceable at facilities that are in compliance with Section 108(b) requirements. Exactly what that means, however, will be determined in courts if facilities challenge State enforcement of their laws. 15
16 State Preemption Issue Courts may rule differently on interpretations of certain statutory language to broaden or narrow the effect of this provision Therefore, we cannot completely predict the impact of this rule on existing State financial responsibility requirements. 16
17 Comments on ANPRMs Mining Priority Notice of Action ANPRM Did not offer a comment period Chemicals, Petroleum, Electric Power Generation ANPRM With comment period closed April 6 th Environmental stakeholders questioned the use of a financial test, advocated for a broad interpretation of the statutory language, and cited studies on the huge environmental risks and costs of Superfund sites. We received comments on all sectors, including mining. In general, the mining commenters: Questioned our analysis for identifying sectors Data too old Risk case not sufficiently supported Data misinterpreted Questioned our reading of the statute Should only protect the Fund Only prospective problems should be addressed Failed to adequately consider impact of existing programs (e.g., BLM and State regulations) 17
18 Attachment A Statutory Language CERCLA Section 108 (in part) (b)(1).the President shall promulgate requirements (for facilities in addition to those under subtitle C of the [SWDA] and other Federal law) that classes of facilities establish and maintain evidence of financial responsibility consistent with the degree and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances.priority it in the development of such requirements shall be accorded to those classes of facilities, owners, and operators which the President determines present the highest level of risk of injury. (2) The level of financial responsibility shall be initially established, and, when necessary, adjusted to protect against the level of risk which the President in his discretion believes is appropriate based on the payment experience of the Fund, commercial insurers, courts settlements and judgments, and voluntary claims satisfaction.financial responsibility may be established by any one, or any combination. Of the following: insurance, guarantee, surety bond, letter of credit, or qualification as a self-insurer. (3) Regulations promulgated under this subsection shall incrementally impose financial responsibility requirements as quickly as can reasonably be achieved but in no event more than 4 years after the date of promulgation. 18
19 Attachment B Statutory Language CERCLA Section 114: (d) Except as provided in this title, no owner or operator of a vessel or facility who establishes and maintains evidence of financial responsibility in accordance with this title shall be required under any State or local law, rule, or regulation to establish or maintain any other evidence of financial responsibility in connection with liability for the release of a hazardous substance from such vessel or facility. Evidence of compliance with the financial responsibility requirements of this title shall be accepted by a State in lieu of any other requirement of financial responsibility imposed by such State in connection with liability for the release of a hazardous substance from such vessel or facility. 19
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