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October 28, 2016

What EPA Is Targeting for Enforcement

Summary:

Businesses need to be aware and mitigate the associated environmental risk.

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Every three years, the U.S. Environmental Protection Agency (EPA) identifies certain national environmental problems where it believes it can make a difference by dedicating direct enforcement resources. Starting on Oct. 1, 2016, and for the next three fiscal years, these “National Enforcement Initiatives” (“NEIs”) include two new ones, an expanded one and four existing initiatives.

These seven enforcement priorities offer insights into how the EPA plans to allocate its enforcement resources to specific environmental hazards concerning water, air, hazardous chemicals and energy extraction.

As the EPA moves forward with these priorities, businesses need to be cognizant of the increased enforcement potential, especially to avoid non-compliance, and thus mitigate the associated environmental risk.

Here is a recap of the initiatives:

1. Water Pollution

Pollution of waterways from raw sewage systems, storm drains, underground storage tanks, runoff and waste disposal continues to be a high priority for the EPA. Recent attention from the lead- contaminated water in Flint, MI, and the Gold King Mine wastewater release have underscored the need for heightened enforcement.

The EPA’s “new” water enforcement focus is keeping industrial pollutants out of the nation’s waters. The EPA will be directing enforcement resources on certain industrial sectors identified as “disproportionate contributors” to pollution, including chemical and metal manufacturing, mining and food processing. Concentrated Animal Feeding Operations (CAFOs) and Animal Feeding Operations (AFOs) will also continue to be enforcement priorities.

See also: Minding the Gap: Investment Risk Management in a Low-Yield Environment  

Water-related enforcement initiatives are:

  • Industrial pollutants (new initiative): The EPA will rely on water pollution data to target facilities in industrial sectors like chemical, metal manufacturing, mining and food processing to cut illegal discharge of nutrient and metal pollution into lakes, rivers and streams.
  • Raw sewage and contaminated storm water: The EPA is targeting municipal sewer systems, using Clean Water Act violations to reduce pollution and volume of storm water runoff and to prevent unlawful discharges of raw sewage. Sources for this pollution include industrial runoff, fertilizers, fossil fuels and general human activities.
  • Animal waste: The EPA will use innovative monitoring and targeting techniques to reduce and control chemicals and waste from controlled animal feeding operations.

2. Air Pollution

Primary contributions to air pollution come from large industrial facilities like coal-fired power plants, acid, glass and cement manufacturing operations. Ensuring that these facilities comply with the Clean Air Act and reduce emissions has been a focus of the EPA since 2005.

EPA investigations have found that many of these facilities failed to upgrade or install pollution-control devices during modification and construction of new plants. The results have prompted new and continued focus on air-enforcement initiatives:

  • Reducing air pollution from large sources: This new initiative aims to ensure that large industrial facilities install state-of-the-art air pollution controls when they build new facilities or make significant modifications to existing facilities.
  • Cutting hazardous air pollutants: This expanded initiative is focused on accurate reporting for refineries, chemical plants and other industries that emit hazardous air pollutants or air toxics. The initiative has now been expanded to include large product storage tanks, hazardous waste generators and treatments, as well as storage and disposal facilities.

3. Hazardous Chemicals

This year’s new hazardous chemical enforcement priority targets chemical plant pollution for causing large volumes of hazardous substances and having a high frequency of catastrophic accidents (150/year). Because many of these facilities are located in low-income communities, activists’ calls for environmental justice have made this a priority.

Mining and mineral processing operations continue to generate more toxic and hazardous waste than any other industrial sector. Through its continued enforcement efforts, the EPA has reduced the risk of mining waste contamination of drinking water, rivers and streams, and is working to clean up mining sites across the nation.

The areas of priority are:

  • Accidental releases: This new initiative attempts to step up scrutiny of pollution sources (i.e. chemical and manufacturing plants), ensuring that these facilities reduce the risk of accidental releases through innovative accident prevention measures and improving response capabilities.
  • Mineral processing operations: Focus is on discharges from mining operations and cleanup of point sources that the EPA believes are threaten drinking water, rivers and streams.

4. Energy Extraction

Referred to as a “bridge-fuel,” natural gas serves as a lower-CO2 alternative to coal, as the country tries to refine and expand its renewable energy sources. However, the extraction of natural gas poses risks from improperly maintained wells that can leak natural gas into waterways and water sources. Combustion of methane produces a potent greenhouse gas, and communities in and around these operations can also be exposed to carcinogens like benzene and other smog-forming pollutants. This initiative aims to ensure that natural gas extraction and production is done in a way that minimizes these risks.

In the past three years, the EPA has settled a number of high-impact cases under this initiative and will continue to address noncompliance through greater use of advanced pollution monitoring and reporting techniques.

Past Enforcement Highlights:

The EPA’s enforcement highlights for 2015 provide a constructive snapshot of the breadth of the agency’s enforcement authority:

  • $7 billion by companies in equipment upgrades and clean-ups;
  • $404 million in combined federal administrative, civil judicial penalties and criminal fines;
  • $4 billion in court-ordered environmental projects resulting from criminal prosecutions;
  • 129 combined years of incarceration for sentenced defendants;
  • $1.98 billion in commitments from responsible parties to clean up superfund sites; and
  • $39 million for community environmental mitigation projects.

According to the latest EPA enforcement statistics, more than 98% of cities with large combined sewer systems, and more than 90% of cities with large sanitary sewer systems, are under enforceable agreements. About 59% of individual power generating units at coal-fired power plants have installed the required pollution controls or are under a court order to do so. Meanwhile, the agency says it has settled with 217 concentrated animal feeding operations for regulatory violations and issued enforcement actions to 196 natural gas extraction and production sites.

See also: Developing A Safe Work Environment Through Safety Committees  

Meanwhile, the focus on larger cases is expected to continue, with the EPA stating that it will specifically target facilities that operate in multiple states to support “a consistent national strategy.” Consider the following recent EPA enforcement settlements:

Water:

A large farming cooperative and processing facility that manufactures refined sugar, liquid sugar and other products from sugar beets will pay $6 million in an agreement to resolve Clean Water Act violations at its processing facility. Under the terms of the settlement, the company will model the volume of its wastewater ponds, audit its wastewater piping systems, drain lines from spray irrigation fields and use automatic cut-off valves to prevent further discharges.

Air:

A large cement manufacturer will invest $10 million to cut emissions of harmful air pollution at five of its manufacturing plants to resolve alleged violations of the Clean Air Act. As part of the agreement, the company will install and operate modern pollution controls for nitrogen oxide (NOX) emissions at its kilns, conduct detailed diagnostic energy audits and spend $150,000 in mitigation on energy efficient projects that reduce nitrogen oxide emissions.

Hazardous Chemicals:

Under an amendment to a 2012 agreement, a large petroleum company will spend $319 million to install state-of-the-art flare gas recovery systems (FGRSs) that will capture and recycle gases that would otherwise be sent to flares at facilities in Illinois, Kentucky, Louisiana, Michigan and Ohio. These efforts are projected to reduce emissions from flares by 896 tons per year.

Energy Extraction:

A large oil and natural gas exploration and production company will pay $5 million to resolve federal and state violations of requirements for the installation, operation, maintenance, design and sizing of vapor control systems at condensate storage tanks. The company will make necessary modifications to ensure that each vapor control system is properly designed and operated, and will spend at least $4.5 million on environmental mitigation projects that will reduce volatile organic compounds and nitrogen oxides.

With evolving environmental standards, businesses need to remain well-informed of these EPA enforcement priorities.

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About the Author

Zac Sawin is a 2016 graduate of Colgate University with a Bachelors of the Arts Degree in Geology where he played on the football team, excelling as a three year starter and was an active member of the community and greek life. As a part of his graduation requirements he conducted a capstone senior research project in collaboration with Syracuse University’s Earth Sciences Department where the only functional basaltic lava cauldron in the world is open for experimentation.

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About the Author

Elizabeth Steinborn is a newly hired associate broker at Aon in the environmental market. She recently graduated from Fordham University with a degree in business and law.

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About the Author

M. Claire Juliana is director of environmental claims in Aon Risk Solutions’ environmental practice, which is responsible for working with Aon offices around the world to assist clients in managing their environmental risk. Juliana is focused on developing best practices for managing complex claims.

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