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Environmental Regulation and Legislation to Watch in 2020

Setting national drinking water standards and easing vehicle greenhouse gas emissions limits top a laundry list of environmental policy goals the Trump administration and Congress want to achieve in 2020.

Members of Congress from both parties and the U.S. Environmental Protection Agency have made controlling the use and cleanup of poly- and perfluoroalkyl substances, known as PFASs, a priority, and there's a decent chance they'll both get something done in the coming year.

The auto industry is also waiting for the other shoe to drop after the Trump administration revoked California's authority to set its own vehicle GHG standards. The EPA has said rolling back Obama-era GHG limits is next on its agenda.

And on the heels of Endangered Species Act regulatory rollbacks that were finalized in August and have already been challenged in court, the U.S. Department of the Interior could make further changes to how it implements the law.

Here are seven regulatory and legislative issues to watch in 2020.

Spotlight on PFASs

Congress recently passed the National Defense Authorization Act, which bars the U.S. Department of Defense from using firefighting foams containing PFAS beginning in fiscal year 2025, with an exception for shipboard fires. A requirement that the EPA finalize national drinking water standards failed to make it into the final bill, but Adam Sowatzka, a partner at King & Spalding LLP, said that doesn't mean Congress is done with the question.

Sowatzka said there are about 17 other bills floating around both chambers that relate to setting drinking water standards, designating PFAS substances as hazardous substances under the Comprehensive Environmental Response, Compensation and Liability Act and addressing PFAS contamination at U.S. Department of Defense sites, among other things.

And the EPA has sent the proposed regulatory determination for perfluorooctanesulfonic acid, or PFOS, and perfluorooctanoic acid, or PFOA, under the Safe Drinking Water Act to the Office of Management and Budget for review. The move is part of the EPA's PFAS action plan.

"I think 2020 could be the year when there is both legislative and regulatory changes from the federal government related to PFAS," Sowatzka said.

Allyn Stern, of counsel at Beveridge & Diamond PC, noted that PFAS substances have even captured Hollywood's imagination with the movie "Dark Waters," which dramatizes the story of attorney Taft Stettinius & Hollister LLP partner Robert Bilott, who represented plaintiffs in a class action against DuPont and its use of PFOA.

"These 'emerging chemicals' have fully emerged," Stern said.

Expected Changes in Vehicle GHG Regs

California and its allies are challenging the administration's "One National Program" rule, finalized in September, under which the EPA and U.S. Department of Transportation assert that the Energy Policy and Conservation Act gives the DOT the right to set national fuel economy standards and preempts similar state programs.

But the administration has also floated the idea of rolling back vehicle GHG standards that California, the EPA and automakers agreed to in 2012. In a proposed rule issued in August 2018, the EPA and the National Highway Traffic Safety Administration asked for comment on how to revise a 2012 rule that envisioned reducing greenhouse gas emissions from cars and trucks and also set corporate average fuel economy, or CAFE, standards for model year 2017 to 2025 light-duty vehicles.

The EPA, which is responsible for the GHG portion of the rule, said it would prefer to freeze the GHG standards for vehicles from 2021 through 2026, rejecting the Obama administration's approach of escalating stringency.

CAFE standards are handled by the NHTSA, which proposed new requirements for model years 2022 through 2026, as well as amending its 2021 model year standards because the agency said they are no longer feasible for automakers.

Targeting the Endangered Species Act

Deidre Duncan, a partner at Hunton Andrews Kurth LLP and co-leader of the firm's environmental practice, noted that in the DOI's recently released regulatory agenda, the U.S. Fish and Wildlife Service plans to propose a rule revising how it implements Section 10 of the Endangered Species Act, which will impact how permits are issued to harm or kill endangered or threatened plants and animals.

"I think the Section 10 regulations will likely seek to codify some guidance that was identified a couple of years ago in a habitat conservation plan handbook," Duncan said. 

She also noted there is a proposed rule at the Office of Management and Budget about migratory birds. The rule would codify an opinion by the DOI solicitor that "incidental take resulting from an otherwise lawful activity" is not prohibited under the Migratory Bird Treaty Act.

A Flood of Water Rules

One of the most anticipated final rules of 2020 is the final version of the Trump administration's definition of "waters of the U.S.," a key Clean Water Act term that determines what waters are subject to the act's protections. The Obama administration finalized its own rule that was criticized as an overreach, but the EPA and U.S. Army Corps of Engineers have rescinded that rule in favor of the new one. The EPA has said the final version should come out early next year.

But that's not the only water-related rule on the horizon.

Duncan said the EPA and Army Corps are working on regulations that would make it easier for states to assume responsibility for issuing permits under Section 404(g) of the CWA, which governs the discharge of materials into waters of the U.S. Currently only two states — Michigan and New Jersey — have assumed the authority, but the administration wants to make it easier for others to take on the burden.

There are two other rules to watch for in 2020: a Section 404(c) rule that would narrow the EPA's ability to veto projects on environmental grounds and a Section 401 rule that clarifies how long states have to approve or deny a water quality certification to a project, something that's come up frequently in pipeline projects.

Transportation Bill Could Unite Congress

Congress regularly reauthorizes transportation programs, primarily at the DOT, and in the past, lawmakers have advanced changes to permitting processes and environmental reviews of infrastructure projects in particular, said Ali Zaidi, of counsel at Kirkland & Ellis LLP. 

He said a transportation package has one of the highest chances of bipartisan agreement in the coming year.

"The transportation bill represents an opportunity for Congress to lean in on environmental priorities through the medium of transportation infrastructure, including as related to permitting and environmental reviews," Zaidi said. "[The bill would be] consequential for a broad range of topics including infrastructure permitting decisions, the build out of electric-vehicle charging corridors, and support for scale up of emissions-reduction policies at the state level."

Environmentally related provisions could include expanding a grant program to cover wildlife road crossings, giving money to cities for dam and lock modernization intended to improve air quality, and measures to speed up federal approval of infrastructure projects, he said.

NEPA Reform Still Looming

Another important regulatory development in 2020 will be the White House Council on Environmental Quality's updates to National Environmental Policy Act regulations, said Jeffrey Wood, a partner at Baker Botts LLP who recently served as acting assistant attorney general for the U.S. Department of Justice's Environment and Natural Resources Division. NEPA plays into the approval process for many types of projects — from oil and gas pipelines to roads — whose backers must show they meet certain standards before getting federal permits.

While environmental groups have warned that changes shouldn't shortchange environmental reviews, Wood said it's likely the CEQ will act to speed up the process for approving projects that require NEPA review.

"One of the key criticisms of the current NEPA process is the amount of ambiguity and uncertainty surrounding the scope of review and the extent of review that's required to meet the standards," Wood said.

The CEQ's draft guidance is expected to narrow how federal agencies should consider climate change impacts in their NEPA reviews of energy, infrastructure and other projects. It would replace greenhouse gas emissions guidance issued by the Obama administration and rescinded in 2017 following an executive order from President Donald Trump.

TSCA Implementation Presents Challenges

Stephen Owens, a partner at Squire Patton Boggs LLP, said the EPA will have its hands full continuing to implement 2016 amendments to the Toxic Substances Control Act.

"First, EPA must finalize the TSCA risk evaluations for the 'first 10' chemical substances by June 2020," Owens said. "Under the [amendments], EPA actually was supposed to finalize all the risk evaluations by December 22, 2019, but the law gave EPA the ability to extend the deadline by up to six months, which EPA has done."

He noted the agency's job will be tough, considering the negative comments it has received on draft risk evaluations and the Ninth Circuit's November ruling requiring the EPA to consider "legacy" uses of substances in the risk evaluations.

And he said the agency still has to initiate risk evaluations on 20 other substances it has designated as "high priority."

"Apart from the sheer volume of work that will be needed to accomplish this, EPA's task will be complicated by the legal battles that likely will be waged over the completed first 10 risk evaluations, the ongoing (and intensifying) scrutiny of the TSCA program by Democrats in the U.S. House, and the rapidly approaching elections in November 2020," he said.