The New York State Department of Environmental Conservation (NYSDEC) is updating its Petroleum Bulk Storage (PBS) and Chemical Bulk Storage (CBS) rules.   The PBS and CBS programs regulate facilities storing small to large quantities of petroleum and other chemicals, and related spills and releases of petroleum and hazardous substances.  The purpose of the updates is to harmonize the state programs with the federal regulations, as well as to provide more consistency between the state programs.

The deadline to submit public comments has been extended to December 6, 2021.  The express terms of the proposed PBS rule can be found here: Part 613 and the proposed CBS rule here:  Part 597 and Part 598.

Some key highlights of the proposed changes to the PBS and CBS rules include:

  • Reporting Requirements:
    • The PBS rules now list the parties required to report spills.  In addition to parties such as the facility owner, tank system owner, operators, and anyone who causes a spill at the facility, among others, the list includes “any other party and its contractors who have been retained as part of a business transaction relating to the facility.”  If this last class of parties is interpreted to include prospective buyers and their environmental consultants performing due diligence, this will likely impact diligence strategy for both buyers and sellers of regulated facilities.
    • The parties required to report spills at facilities under the CBS rules mirror the PBS updates described above. Note, the parties required to report spills of hazardous substances under Part 597 (e.g. any person in actual or constructive control or possession of the hazardous substance when it is spilled, or any employee, agent or representative of such person who has knowledge of the spill) has not changed.
    • Under both PBS and CBS rules, suspected spills at applicable facilities must be reported within two hours of discovery, which is consistent with the timeframe for reporting actual spills and releases.
    • NYSDEC’s position that certain failed testing/monitoring results constitute a suspected, reportable spill is formalized in both PBS and CBS rules.
  • Financial Responsibility:  The PBS rules create new financial responsibility requirements for tank owners/operators to address corrective action measures and third-party claims for bodily injury and property damage due to releases from the operation of underground storage tanks.  Acceptable financial responsibility mechanisms include an insurance policy, letter of credit, trust fund, surety bond, self-insurance, or guarantee.
  • Use of Alternative Leak Detection Methods:  The PBS rules allow for alternative methods for leak detection, so long as the alternatives are approved by NYSDEC and are at least as stringent as the practices outlined in the regulations.
  • Response and Corrective Action:  The PBS rules include updated provisions to the release response and corrective action requirements, including listing the facility owner, tank system owner, and operator as responsible for complying with the requirements.
  • Periodic Testing and Inspection RequirementsBoth PBS and CBS rules update testing, monitoring, inspection, and repair requirements to align with the federal requirements.
  • Revised Operator Training:  Both PBS and CBS rules contain revised tank operator training provisions.

We will continue to monitor developments and provide updates on the rule changes.  If you have any questions, please do not hesitate to reach out.

Upon passing the $1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684) last week, the Senate provided significant funding towards development of the nation’s environmental and energy infrastructure. The Infrastructure Act also streamlines environmental review, permitting, and approval of federal infrastructure projects.

The Infrastructure Act includes funding for:

  • Reinstatement of the Superfund Tax: The Superfund Tax is an excise tax on specifically listed chemical to fund cleanup at Superfund Sites. The Act reinstates the tax, which is projected to generate $14.4 billion over the next 10 years.
  • Superfund Remedial Account: The Act provides $3.5 billion in additional funding over the next 5 years for U.S. EPA to conduct remedial actions at Superfund site. The Act waives state cost sharing requirements and requires U.S. EPA to consider tribal community needs at federally funded Superfund sites.
  • Brownfields Grants and Loans: The Act provides $1.2 billion for grants and loans under U.S. EPA’s Brownfields Program over the next 5 years. Brownfield sites are contaminated properties that are remediated and redeveloped for reuse. U.S. EPA’s Brownfields Program, which is authorized under the Superfund statute, provides grants and loans for site characterization and remediation of Brownfields sites.
  • Water Infrastructure Appropriations: The Act includes the Drinking Water and Wastewater Infrastructure Act (S. 914) authorization bill, which provides $55 billion in reauthorizations and new funding under the Safe Drinking Water Act and the Clean Water Act, such as:
    • $10 billion in grants for mitigating perfluoroalkyl and polyfluoroalkyl substances (PFAS) in drinking water and wastewater systems.
    • $11.73 billion for lead service line replacement projects and $200 million to address lead in school drinking water systems.
    • $14.65 billion in funding under Drinking Water State Revolving Fund, which provides grants to states to provide loans for waste system infrastructure projects.
  • Resiliency Projects: The Act provides $17 billion in funding for resiliency projects and studies by agencies such as U.S. EPA, U.S. Army Corps in areas such as flood mitigation and control, coastal erosion and risk management, disaster mitigation, waste management, drought resiliency, ecosystem restoration, wildfire management, and pollution prevention.
  • Energy Infrastructure Appropriations: The Act includes the Energy Infrastructure Act (S. 2377) authorization bill, which includes:
    • $2.5 billion over 5 years to establish grants through the U.S. Dept. of Transportation to create publicly accessible alternative fuel vehicle charging infrastructure.
    • $1 billion each year for 5 years for funding to states creating electric vehicle charging infrastructure.
    • $1 billion each year for 5 years to replace outdated school buses, with 50% of the funds going toward zero-emission and low-emission alternative fuel buses.
    • $65 billion for energy and electric grid infrastructure and resiliency programs, including programs to enhance the current electric grid against extreme weather events, to establish grid flexibility by implementing smart grid technologies, and to conserve energy and reduce carbon emissions in the transportation sector.
    • $3 billion for battery manufacturing and recycling and $200 million for electric drive vehicle battery recycling and second-life applications.
  • Carbon Capture and Hydrogen, Nuclear, and Hydropower Energy Research: The Act provides $6.42 billion for grants and loans for carbon storage and reduction programs in areas such as public transportation, traffic control, and intelligent transportation systems. The Act provides over $8 billion for the manufacturing of clean hydrogen and establishment of clean hydrogen hubs, $6 billion in Dept. of Energy supplemental appropriates related to nuclear energy, and $200 million for hydroelectric production and efficiency improvements.

The Infrastructure Act streamlines the environmental review, permitting, and approval of federal infrastructure projects. The Act reinstates a portion of the recently rescinded Executive Order 13801, known as the “One Federal Decision,” which expedites environmental review under the National Environmental Policy Act, or NEPA. This includes a two-year deadline for completing environmental review of major federal projects, limiting the scope of environmental impact statements, and development of categorical exclusions to accelerate federal projects. In addition, the Act amends the Fixing America’s Surface Transportation Act, or FAST Act, by repealing the sunset provision for the streamlining of cross-agency permitting and approval of federal infrastructure project.

The Infrastructure Act is now with the House, which is simultaneously considering a $3.5 trillion budget plan that includes environmental and energy related funding, tax incentives, grants and consumer rebates toward electric vehicles, green energy manufacturing and transportation, and clean energy and weatherization in homes. The budget plan also imposes polluter fees on methane and carbon.

The Infrastructure Act’s ultimate fate is uncertain. While it is likely to pass in some form, it is unclear whether the Act’s existing environmental and infrastructure funding and project streamlining provisions will survive intact. The House is expected to take up both the Infrastructure Act and the budget plan after it returns from break at the end of August.

On Monday, the U.S. Supreme Court unanimously held that a settlement of Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)-specific liability is required to give rise to a contribution action under §113(f)(3)(B). This decision is the Court’s latest attempt to provide clarity to CERCLA by evaluating the United States’ often inscrutable interpretations of the statute that further its dual role as the enforcer of the statute and the largest potentially responsible party (“PRP”).

In this case, the U.S. argued, and the D.C. Circuit agreed, that a 2004 Clean Water Act (“CWA”) Consent Decree entered into by the U.S. and Guam triggered a CERCLA §113(f)(3)(B) contribution claim that was time-barred. Guam argued that the CWA Consent Decree did not trigger a §113(f)(3)(B) contribution claim and that, since the U.S. has sovereign immunity under the CWA, the U.S. was seeking to avoid any responsibility for the decades that the U.S. Navy dumped hazardous military waste into the Ordot Dump.

The Supreme Court disagreed with the U.S. and the D.C. Circuit, holding that a resolution of CERCLA-specific liability is required to trigger a contribution action under §113(f)(3)(B). The Supreme Court’s analysis focused “on the totality” of §113(f). The Supreme Court reasoned that §113(f) “does not exist in a vacuum,” but rather that contribution actions are predicated on “common liability” and the obvious place to look for that “common liability” is CERCLA itself.

Although a party may undertake remedial measures pursuant to other environmental statutes that resemble a CERCLA response action, the Supreme Court stated that relying on a functional overlap would stretch CERCLA beyond Congress’ language. Adopting the U.S.’s interpretation would result in uncertainty as to when a party has “resolved” its CERCLA liability in prior non-CERCLA settlement agreements. The Supreme Court instead adopted the “far simpler approach” of asking whether a settlement agreement expressly discharges CERCLA liability.

The Supreme Court did not address the second issue presented—whether a settlement that expressly disclaims any liability determination, and leaves the settling party exposed to future liability, triggers a contribution claim under CERCLA §113(f)(3)(B). Although this may be a remaining concern for parties that entered into older form CERCLA consent orders and consent decrees, the U.S. Department of Justice has since updated the model language to include a statement that CERCLA liability is resolved upon entering into the agreement.

Guam did not raise, and the Supreme Court did not address, whether a PRP that has resolved its CERCLA liability must bring a §113(f)(3)(B) contribution action or whether such a PRP may also bring a §107(a)(4)(B) cost recovery action. Until the day comes when the Supreme Court wades into this murky area of CERCLA, the best practice is to be mindful of the shorter statute of limitations for §113(f)(3)(B) contribution actions, and, if the situation warrants doing so, pursue both §107(a)(4)(B) and §113(f)(3)(B) claims.

The first 100 days of the Biden Administration saw a flurry of activities at the federal level seeking to address PFAS, a class of thousands of manmade chemicals notoriously known as Forever Chemicals because they don’t break down in the environment.

Studies continue to report adverse health effects associated with exposure to PFAS, even at extremely small concentrations.  Studies are also increasingly finding high rates of PFAS in our everyday environment including drinking water, consumer and household products, food packaging, and more.  However, the United States Environmental Protection Agency (EPA) has not yet established any enforceable drinking water or remediation standards for any PFAS chemical.  See the PFAS Practice Tip at the end of the article regarding regulatory actions at the state level.

As the body of evidence showing potential adverse health effects and the high prevalence of PFAS in the environment increases, so do the calls for federal regulation from environmental organizations, the public, and even Congress.  Click here and here for background information on PFAS chemicals, their prevalence and health effects.

Acting on PFAS was a steadfast part of President Biden’s environmental campaign promises.  Here are the highlights on actions taken during the first 100 days:

  • April 27, 2021. PFAS Memo issued by New EPA Administrator Michael Regan
    • Develop national primary drinking water standards
    • Collect new data on 29 types of PFAS chemicals
    • Solicit data on the presence and treatment of PFAS in wastewater discharges
    • Establish the EPA Council on PFAS (ECP)
      • Charged with implementing the 2019 EPA Action Plan, prepared by EPA career staff
      • Also charged with developing the “PFAS 2021-2025 – Safeguarding America’s Waters, Air and Land,” a strategy to deliver critical public health protections
      • Initial recommendations to be made within 100 days of establishment of ECP
  • April 13, 2021. PFAS Action Act of 2021, bipartisan bill introduced to the US House of Representatives
    • Drinking water standard for PFOA and PFOS within two years
    • Designate PFOA and PFOS as a “hazardous substances” within one year and determine if other PFAS should be designated within five years under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as Superfund
    • Require testing of PFAS for toxicity to human health under Toxic Substances Control Act (TSCA)
    • Designate PFOA and PFOS as “hazardous air pollutants” under the Clean Air Act within six months and determine if other PFAS should be designated within five years
    • Prohibit unsafe incineration of PFAS waste
    • Moratorium on introduction of new PFAS into commerce
    • Establish industrial discharge limits and provide $200M annually for wastewater treatment
  • April 8, 2021. Updated PFBS Toxicity Assessment released by EPA
    • Comparable to assessments under EPA’s Integrated Risk Information System (IRIS) and Provisional Peer-Reviewed Toxicity Value (PPRTV) Program
    • Animal studies show effects on the thyroid, reproductive organs and tissues, developing fetus, and kidney following oral exposure
    • Data are inadequate to evaluate cancer effects
    • Provides hazard identification, dose-response information, and toxicity values
    • Developed reference doses (RfDs), the estimated amount of a chemical a person can ingest daily over a lifetime (chronic RfD) or less (subchronic RfD) that is unlikely to lead to adverse health effects
    • PFBS suggested to be less toxic than PFOA and PFOS based on the RfD
    • This assessment is not a regulation; rather, it provides a critical part of the scientific foundation for risk assessment decision making.”
  • March 17, 2021. Advance Notice of Proposed Rulemaking (ANPRM) for Wastewater Discharges published by EPA under the Clean Water Act
    • Provides information collected by EPA to date under its PFAS Multi-Industry Study for review and comment
    • Poses questions to PFAS manufacturers and formulators, soliciting information about PFAS wastewater discharges
    • EPA intends to use information collected for potential future rulemaking under the Clean Water Act to establish effluent limitations guidelines, pre-treatment standards, and new source performance standards for the Organic Chemicals, Plastics and Synthetic Fibers (OCPSF) point source category
    • Open for comment until May 17
  • Ongoing. EPA continues its PFAS Multi-Industry Study on Wastewater Discharges
    • Goals of the study are to:
      • Identify industries and specific facilities producing and using PFAS compounds
      • Quantify amounts of PFAS being discharged
      • Identify PFAS control practices and treatment technologies
      • Document PFAS removal efficacy in wastewater
      • Estimate costs of PFAS treatment systems
    • Affected industries are:
      • OCPSF manufacturers
      • Pulp and paper manufacturers
      • Textiles and carpet manufacturers
      • Commercial airports
  • March 11, 2021. Revised proposal for the Fifth Unregulated Contaminant Monitoring Rule (UCMR 5) published by EPA
    • Every five years, EPA uses the UCMR to monitor for highest priority unregulated drinking water contaminants and collect occurrence data
    • Occurrence data is used by EPA as basis for future regulatory determinations
    • Revised an earlier version of the UCMR 5, most significantly, by adding 23 PFAS chemicals to the originally proposed six PFAS chemicals
    • Final rule expected to be published in December 2021
    • Proposes requirement that Public Water Systems collect “occurrence data” for total of 29 types of PFAS chemicals from 2023-2025
    • December 2019, EPA published a new validated method to test for additional PFAS in drinking water. Under EPA Method 533 and EPA Method 537.1, EPA can now measure 29 PFAS chemicals
  • February 22, 2021. Final, revised Regulatory Determination for PFOA and PFOS issued by EPA under the Safe Drinking Water Act (SDWA)
    • First step to begin the process of developing national primary drinking water standards
    • Process takes years under the SDWA prescribed process
      • EPA must propose the drinking water standard within 24 months
      • EPA must then promulgate the standard within 18 months after the proposal
    • Standards include the Maximum Contaminant Level Goal (MCLG), the non-enforceable level at which no known or anticipated adverse health effects occur, with an adequate margin of safety
    • Standards also include the Maximum Contaminant Level (MCL), the enforceable standard applicable to public water suppliers, as close to MCLG as is “feasible” using best available technology or other means available, taking costs into consideration

Many of these proposed actions could have far-reaching and significant implications for many industries and businesses, as well as corporate and real estate transactions.  Pressure for establishing enforceable standards continues to grow at the federal level, and, as noted below, many states continue to take more aggressive action in the absence of federal standards.  Stay tuned for more updates and guidance on the anticipated implications of ongoing PFAS regulatory and legislative activities.

PFAS Practice Tip:  More than 20 states are taking various actions to address PFAS impacts in their individual state, resulting in a patchwork of regulations and testing requirements.  Be sure to check if your state has imposed, or is considering imposing, PFAS requirements affecting operations or remediation obligations.

As discussed in one of our earlier blogs, back in  March 2020, the U.S. Environmental Protection Agency (EPA) issued its controversial Enforcement Policy outlining certain situations where EPA would not pursue enforcement actions for specific instances of noncompliance in response to the COVID-19 pandemic. Most of the suspended obligations related to routine monitoring and reporting; settlement agreement and consent decree reporting obligations and milestones; control and treatment compliance; and the transfer and disposal of hazardous waste.

As detailed in its June 29, 2020, Addendum, EPA’s Enforcement Policy is set to expire today, August 31, 2020, at 11:59 pm EST, meaning that regulated entities that were relying on EPA’s enforcement discretion are expected to resume complying with environmental laws and permits no later than September 1, 2020.

It should be noted that in the June 29, 2020, Addendum, EPA states that termination of its Enforcement Policy does not limit its ability to exercise enforcement discretion on a case-by-case basis, inferring that EPA will take COVID-19 related reasons for noncompliance into consideration when determining whether to apply its enforcement discretion.

Nevertheless, regulated entities should continue to make “every effort” to comply with all environmental laws, regulations, and timeframes and should be proactive in communicating early on with EPA and documenting any suspected noncompliance issues due to COVID-19, in order to best protect themselves against liability down the road.

 


As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice.  For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.