Provisions Could Have Major Impact
| Author | Elliott P. Laws |
| Position | Former EPA Assistant Administrator and former President for Safety, Health & Environment of Texaco, is Senior Counsel at Crowell & Moring |
| Pages | 12-12 |
Page 12 ❧ THE ENVIRONMENTAL FORUM Copyright © 2010, Environmental Law Institute®, Washington, D.C. www.eli.org.
Reprinted by permission from The Environmental Forum®, Sept./Oct. 2010
Two Superfund
sections addressing
nancial assurance and
responsibility are a t issue
By Elliott P. Laws
Provisions Could
Have Major Impact
The financial assurance provision of
the Comprehensive Environmen-
tal Response, Compensation, and Lia-
bility Act, Section 108(b), is now being
addressed by EPA following a lawsuit
brought by the Sierra Club alleging
that the agency had failed to implement
provisions of the statute, enacted in a
lame duck session in 1980.
e agency was directed to identify
“classes of facilities” which will need
to “establish and maintain evidence of
financial responsibility” within three
years of enactment. “Not earlier than
five years after enactment” the agency
was required to begin promulgating
the requirements. Finally, the actual re-
quirements could be phased in over a
four-year period. So according to the
statutory language, financial assurance
requirements should have been on a
12-year track to full implementation.
e fact that it was nearly 30 years be-
fore EPA began to tackle this issue may
be evidence more of the difficulties the
agency faces in crafting rules than a
story of agency inaction.
is particular rulemaking is not an
easy task and it will have major impacts
on much of America’s industry. e
classes of facilities identified by EPA
to date are hardrock mining, chemical
manufacturing, petroleum and coal
products manufacturing, and electric
power generation, distribution, and
transmission. In addition, EPA has rec-
ommended that five additional classes
of facilities merit additional study be-
fore a decision is made regarding the
need for financial assurance regulations
under Section 108(b). ose are waste
management services, recycling of
CERCLA hazardous substances, metal
fabrication, wood products, and elec-
tronic and electrical equipment.
Much could and has been said about
the impact these regulations will have
on industry, especially as the economy
is str uggling to recover. But I want to
talk about a related provision of CER-
CLA which may have its own major
impact on how the nation tries to avoid
the creation of future Superfund sites,
including potentially conflicting with
Section 108(b).
CERCLA Section 114(d) states in
relevant part, “Except as provided in
this title, no owner or operator of a
vessel or facility who establishes and
maintains evidence of financial respon-
sibility 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 finan-
cial responsibility in
connection with liabil-
ity for the release of a
hazardous substance
from such vessel or
facility.” is may be
one of the clearest ex-
amples of preemption
that Congress has ever written. e
federal government is going to occupy
this area, and no facility covered by a
CERCLA 108(b) financial assurance
will have to comply with need any state
or local provision intended to address
the same issue.
Considering the state of hazard-
ous waste regulation and cleanup at
the time of enactment, this may have
been a prudent provision to include. It
is likely that most states did not have
financial assurance requirements in
place. e federal government was only
beginning to implement this process in
the hazardous waste context under the
Resource Conservation and Recovery
Act. It is likely that industry was sup-
portive of this approach, to avoid a situ-
ation where it would need to meet the
requirements of two financial assurance
systems, one state and one federal. One
needs to remember that Congress nor-
mally seeks to avoid preempting state
laws whenever possible, so to do so in
this case and in such a clear way is a
powerful statement.
However, one has to question what
the impact of this provision will be in
the actual situation where EPA is be-
ginning the 12-year regulatory process
30 years after Congress intended it to.
Many states have stepped into the void
by adopting financial responsibility re-
quirements connected with release of
hazardous substances. Under the clear
language of Section 114(d), those regu-
latory schemes are at risk. ere will
be no qualitative analysis to determine
if the state program is more effective.
ere will be no state specific analysis
to determine if a system developed for
a specific state is more appropriate than
a generic federal program. ere will be
no analysis of the impact of the loss of
the state programs, which are supported
by state employees, and which will be
replaced by a federal
program that has no
additional resources
available to manage it.
ere is no ques-
tion that this preemp-
tion issue will present
significant challenges
as EPA develops regulations to imple-
ment financial assurance for the various
classes of facilities. e difficulty with
this second provision is that it prevents
EPA from taking advantage of state pro-
grams which may be addressing, either
partially or totally, the very issues that
CERCLA Section 108(b) is intended
to deal with. In this instance , once EPA
speaks, the field is closed to the states,
whether or not EPA’s program is more
effective. Perhaps the passage of time
requires Congress to take a much closer
look at what it decided 30 years ago.
Elliott P. Laws, f or m er E PA
Assistant Administrator and former President
for Safety, Health & Environment of Texaco, is
Senior Counsel at C rowell & Moring. He can
be reached at elaw s@crowell.com.
T B E
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