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EPA Issues Final Rule on Cleanup Insurance

Tuesday, December 8, 2020

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In a news release issued last month, the United States Environmental Protection Agency announced that it had finalized its rulemaking on financial assurance requirements for the Electric Power Generation, Transmission and Distribution; Petroleum and Coal Products Manufacturing; and Chemical Manufacturing industries.

Specifically, the final rule declines the requirement for the industries to have insurance to cover major spills and accidents.

“EPA has found that existing environmental regulations and modern industry practices are sufficient to mitigate any risks inherent in these industries,” said EPA Administrator Andrew Wheeler.

Superfund Cleanup Evaluation

Developed in 1980, the Comprehensive Environmental Response, Compensation, and Liability Act—otherwise known as CERCLA or Superfund—provides a Federal "Superfund" to clean up uncontrolled or abandoned hazardous-waste sites as well as accidents, spills, and other emergency releases of pollutants and contaminants into the environment.

Through CERCLA, the EPA was granted power to seek out responsible parties for any release and assure their cooperation in the required cleanup.

In 2010, the EPA identified three classes of facilities for possible development of CERCLA Section 108(b) financial responsibility requirements. By 2017, the EPA published a notice describing its plan to consider financial responsibility requirements under CERCLA for the Electric Power Generation, Transmission, and Distribution, Petroleum and Coal Products Manufacturing, and the Chemical Manufacturing industries.

Two years later in July, Wheeler signed a proposed rule to not impose financial responsibility requirements for facilities in the Electric Power Generation, Transmission, and Distribution industry. By December, a second proposed rule was signed not to impose financial responsibility requirements for facilities in the Petroleum and Coal Products Manufacturing industry. And in February of this year, the same rule was signed for the Chemical Manufacturing industry.

© iStock / Skyhobo

In a news release issued last month, the United States Environmental Protection Agency announced that it had finalized its rulemaking on financial assurance requirements for the Electric Power Generation, Transmission and Distribution; Petroleum and Coal Products Manufacturing; and Chemical Manufacturing industries.

Most recently, in reviewing the need for additional, new financial assurance requirements for the electric power, petroleum and coal products manufacturing, and chemical manufacturing industries through the authority of CERCLA, the EPA looked at financial risks to the federal Superfund program associated with the production, transportation, treatment, storage, or disposal of hazardous substances in these industries.

According to the EPA, this included evaluating the history of cleanups under Superfund, modern industry practices, applicable federal and state regulations, the industries’ financial health and economic trends, and the risk of taxpayer-funded cleanups of facilities in these industries.

Most recently, PaintSquare Daily News reported that the EPA had finalized its plan to address contamination at the former manufacturing plant and adjoining areas of the Sherwin-Williams/Hilliards Creek Superfund Site in Gibbsboro, New Jersey, in August.

The affected areas requiring cleanup included a 20-acre area where the former paint manufacturing plant operated, Hilliards Creek headquarters and other adjoining areas, which include approximately six residential properties. Hilliards Creek also flows through the site and into Kirkwood Lake.

In addition to researching projects like this Superfund, the EPA also analyzed, reviewed, and considered public comments to conclude that the level of risk is addressed by existing requirements and does not warrant new requirements for the aforementioned industries.

The evaluation is reportedly consistent with Agency’s interpretation of the statute, which was unanimously upheld by the D.C. Circuit Court of Appeals in litigation challenging the Agency’s hardrock mining final action not requiring additional financial assurance.

“In the 40 years since CERCLA became law, other state and federal requirements have been promulgated, so EPA has not needed to use this statutory authority to impose additional financial assurance requirements on classes of facilities to address the potential risk of releases of hazardous substances,” wrote the Agency.

According to other reports however, the nation currently has more than 1,300 Superfund sites on its National Priorities List, although many of these projects have become orphaned due to companies going bankrupt and unable to complete the cleanup projects.

“For years, it’s been the most important rule that nobody knows about,” said Lisa Evans, senior counsel for the group Earthjustice, regarding CERCLA, and adds that the EPA’s decision is a “huge step backwards.”

Other advocacy organizations have also been reported to oppose the new rule, citing the decision as detrimental for taxpayers and the environment, as well as vulnerable communities, running counter to the Obama administration’s argument that industries should have the financial means to fund toxic waste cleanups to ease strain on the government.

The incoming Biden administration is expected to take a different approach and push forward financial assurance rules, with intentions to revoke the rule.

   

Tagged categories: Accidents; Cleanup; EPA; EPA; Government; Health & Safety; Health and safety; NA; North America; Oil and Gas; Project Management; Safety

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