Pollution and politics: how green will the new year be?

As new environmental issues arise, some old standbys are coming up for review and revision. One thing is certain: Change is on the way.

As 1996 gets underway, one thing is for sure: The national debate on an environmental agenda is resonating and likely to get louder. The talk out of Washington is about government "reinvention" and Environmental Protection Agency (EPA) initiatives that are supposed to make "common sense." The Republican Congress continues its rhetoric on downsizing government and easing the regulatory burdens on industry, all the while maintaining its seemingly unending assault on EPA's budget.

As if all this were not enough, a presidential election is just around the corner and promises to provide a stage for some of the fiercest battles since the early 1980s on protecting the environment, the role of the EPA, and what should and should not be required of industry.

With all these forces at work, the environmental outlook for 1996 definitely includes change. How sweeping and profound this change will be and on which side of the political spectrum it will take place will be clarified when the political landscape comes into clearer view as we march toward the November elections.

While the results may be unpredictable at this point, it is clear that certain issues will appear on the 1996 environmental agenda.

Easing the Burden Through Cooperation

Despite entering her fourth - and possibly final - year as EPA administrator, Carol Browner continues to speak of the important changes and ongoing restructuring being undertaken at EPA as part of a commitment to simplify and streamline government to achieve greater protection of the environment at reduced costs. Once again, EPA's regulatory agenda for 1996 includes a number of initiatives to ease government regulatory burdens and engage industry in innovative partnerships designed to promote workable and cooperative environmental programs.

We anticipate that EPA will take a renewed interest in its Common Sense Initiative - perhaps the cornerstone of EPA's claimed reinvention - in 1996 as the agency looks for demonstrable successes to tout at election time.

Moving this common sense/government reinvention theme to the regulatory front, EPA has promised by the spring of this year to take final action on amendments designed to simplify the Clean Air Act's Title V permitting process. The primary aim of these amendments is to streamline the procedures for revising Title V permits. What is at stake is the flexibility of a company to make minor changes in manufacturing operations without having to seek modification of its permit.

EPA is also working on a one-stop emissions report to consolidate a company's reporting requirements onto one form. EPA hopes that this program will reduce confusion, ease regulatory burdens, and lead to greater compliance by the regulated community.

The Superfund Battle Rages On

Perhaps the biggest environmental debate looming in 1996 will be on Superfund reauthorization. Certainly, presidential politics will add fury to this legislative fire. Currently, the Republican-controlled House and Senate are considering similar bills aimed at easing the perceived unfairness of Superfund's retroactive liability scheme and streamlining the clean-up process that has burdened this program.

In the House of Representatives, a bill offered by Rep. Michael Oxley (R-OH) is the current forerunner among several proposals offered to reform Superfund this year. Oxley's bill, the Reform of Superfund Act, or "ROSA," aims to streamline Superfund cleanups by lifting some financial responsibility from parties who contributed to the toxic waste sites and setting less stringent clean-up standards.

Oxley's measure also caps the number of additional sites that could be added to the National Priority List (NPL) of contaminated sites. After this limit is reached, the states will be responsible for the cleanup of remaining contaminated sites.

The Oxley proposal does not repeal the current law's retroactive liability provision but rather provides for an expedited process to allocate clean-up responsibility among responsible parties.

The proposal also provides for refunds ranging from 30% to 50% to be paid out of the federal Superfund to parties that have incurred costs for the cleanup of sites resulting from pre-1987 activities. The bill provides complete relief from liability for small parties who sent only very small amounts of waste to a site, parties who sent waste to former municipal landfills, and parties who sent waste to oil and battery recycling facilities prior to 1987.

The Oxley bill also repeals the preference under the current law for remedies that focus on the complete removal of contamination and instead shifts the focus to setting clean-up levels based on the anticipated future uses of the site. The bill provides for the natural dissipation of contaminants and institutional controls, such as limiting site access, as appropriate methods for remediating contaminated sites.

A similar measure offered by Sen. Bob Smith (R-NH) is currently pending in the Senate. The Smith proposal does not provide complete relief from liability to as many parties as provided by the Oxley bill. However, with regard to retroactive liability, the Smith proposal goes farther than the Oxley bill and provides for a 50% tax credit for costs spent cleaning up wastes dumped before 1980 when the Superfund law was enacted.

The Oxley and Smith bills have emerged as the leading proposals for Superfund reauthorization by Congress. One major obstacle to progress in both the Senate and the House is disagreement over the issue of retroactive liability. Industry groups and insurance companies are pushing the Republicans to eliminate in whole or part the pre-1980 retroactive liability. Environmentalists fear that eliminating the current liability scheme of Superfund will prevent sites from being cleaned up, and many wonder who will pay for the costs to remediate such sites.

The Clinton Administration and EPA are opposed to the Congressional proposals. The Administration is concerned that the cap on the number of sites that may be added to the NPL will effectively require that states clean up the sites without federal aid. Browner has also voiced concern that the currently proposed legislation will provide for quick fixes at the expense of genuine, long-term environmental protection.

EPA does support revisions to the current Superfund law that will streamline the clean-up process and reduce disputes over who is going to pay the cleanup tab. It is unlikely that President Clinton will approve any legislation calling for changes to Superfund's retroactive liability without significant compromises or a tough fight.

MACT Standards for Converters

In March 1995 EPA proposed a national standard for emissions of hazardous air pollutants (HAPs) from the printing and publishing industry, including product and packaging rotogravure presses. This standard, commonly called a MACT (maximum achievable control technology) standard, would apply to any source within the industry with potential emissions of 10 tons per year (tpy) for one HAP or 25 tpy for any combination of HAPs.

The proposed MACT standards call for (1) the elimination of 95% of organic HAP emissions from the source; (2) restriction of such emissions to no greater than 0.20 kg/kg of solids applied for each press or each group of presses linked by a solvent recovery system; or (3) restriction of such emissions to no greater than 0.04 kg/kg of inks and other materials applied for each press.

A final action is likely to be published in the spring of 1996 on the establishment of these MACT standards. Converters utilizing rotogravure presses should expect additional regulatory demands on their operations, including the upgrading of existing capture and control systems and, in some cases, the installation of new pollution control equipment.

EPA plans to begin in 1996 the research and rulemaking necessary to establish a MACT standard for the coating of paper, film, and foil, with the aim of completing that rulemaking by the year 2000.

EPA says that this MACT standard is likely to significantly impact the flexible packaging industry. Its staff has drafted a work plan and is starting to form an internal working group, with a view toward involving those on the outside who have a stake in the process, most likely before the end of 1996.

Easing Disposal Obligations

In December 1995 EPA proposed a rule that could substantially reduce the industrial communities' obligations to manage and dispose of low-level hazardous waste. EPA points to the proposed Hazardous Waste Identification Rule (HWIR) as another example of its commitment to eliminate unnecessary regulatory burdens and streamline hazardous waste management programs.

The proposed HWIR establishes risk-based "exit levels" for almost 400 industrial process waste by-products. If a company can show that its wastes meet these established exit levels, such wastes will be exempt from the hazardous waste disposal requirements. Similar regulations are being finalized by EPA to establish exit levels for contaminated media (soil and groundwater) generated during site cleanups.

EPA has proposed that these exit levels be self-implementing, thereby allowing parties to determine the status of their waste without the burden of prior government review and approval. EPA has requested comment on several contingent management options under which higher exit levels may be acceptable.

EPA anticipates that the HWIR will be finalized by the end of 1996. These rules, when finalized, promise to substantially change the way in which many forms of hazardous waste will be managed and disposed of.

The Role of the States

With the trimming of the federal budget, EPA has had to reorder its priorities. One inevitable outcome of this process will be the continued emergence of environmental enforcement and cleanups administered by individual state environmental agencies.

Over the course of the last year or so, with varying degrees of success, the states have been undertaking their own reinvention. The result has been a discernible movement at the state level toward removing some of the impediments to the cleanup of contaminated sites and the forging of a real partnership with the industrial community on matters of compliance assurance.

We anticipate in 1996 a proliferation of regulations aimed at revamping the way in which the states will deal with the cleanup of abandoned industrial properties. Across the nation, there are many abandoned, contaminated properties where thriving industrial enterprises were once located. The redevelopment prospects for these former industrial sites have been dismal, principally because potential new owners and lenders are concerned about incurring clean-up liability.

Abandoned industrial sites are commonly referred to as "brownfields," and many states are developing innovative regulatory programs to specifically address the cleanup of these properties.

The brownfields approach eschews rigid clean-up levels and bases the cleanup of such sites on the actual risk presented according to the intended use of the properties once the cleanup is completed.

The goals of the brownfields movement are to encourage voluntary cleanups; return affected properties back to productive use; revitalize the communities in which they are located; and protect undeveloped lands, so-called "greenfields," from industrial development. EPA has generally supported the brownfields movement.

Privilege Laws

Another major regulatory movement taking shape at the state level is the development of state environmental audit privilege laws designed to protect the results of environmental audits from compelled disclosure to third parties, including state environmental agencies.

These privilege laws recognize the importance of environmental audits as a compliance tool. Consequently, these initiatives are intended to encourage companies to undertake voluntary environmental audits by providing a degree of confidentiality for their results and limited guarantees against disclosure.

The laws typically provide that an audit is privileged and not admissible evidence in any civil, administrative, or criminal proceedings. They usually say that any noncompliance discovered during the course of an environmental audit must be promptly corrected to maintain the privilege.

Presently, 14 states have enacted these audit privilege statutes. Many other states are considering similar legislation.

With these issues scheduled for consideration in 1996, this year's environmental outlook must include a call to be on the lookout for a changing regulatory landscape.

Gardner, Carton & Douglas is a full-service law firm with offices in Chicago and Washington, DC. The firm's Environmental Dept. includes over 20 attorneys specializing in air, water, and waste regulation. Contributing to this article were Mark Latham, Jim Montague, Bob Mueller, Lewis Putman, and Peter Wyckoff.

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