2.2 Environmental Regulations — Federal

ASC 410-30

05-5 The first kind of environmental law, environmental remediation liability laws, includes individual statutes as well as response provisions in other statutes. The most important of these are the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and the Reauthorization Act of 1986, which together are referred to as Superfund, and the corrective action provisions of the Resource Conservation and Recovery Act of 1976. . . .

05-8 Environmental laws of the second kind are intended to control or prevent pollution and are directed at identifying or regulating pollution sources or reducing emissions or discharges of pollutants. There are many statutes that regulate sources of pollution, including the pollution control provisions of the Resource Conservation and Recovery Act of 1976 (solid and hazardous wastes), the Clean Water Act (discharge of pollutants into the waters of the United States and to publicly owned treatment works), and the Clean Air Act (emission of pollutants into the atmosphere). Other examples are the Emergency Planning and Community Right-to-Know Act and the Pollution Prevention Act of 1990.

The following are some of the main federal regulations that serve as drivers of environmental liabilities:

The Clean Air Act of 1970 (CAA).
The Clean Water Act of 1972 (CWA).
The Toxic Substances Control Act of 1976 (TSCA).
The Resource Conservation and Recovery Act of 1976 (RCRA).
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or the “Superfund”).

2.2.1 The Clean Air Act

The CAA regulates air emissions from both stationary and mobile sources. For example, the law authorizes the EPA to set the National Ambient Air Quality Standards, which protect health and public welfare and regulate emissions of hazardous air pollutants. Congress established much of the basic structure of the CAA in 1970 and made major revisions to the law in 1977 and 1990. The changes were designed to improve the effectiveness of the CAA and target newly recognized air pollution problems such as acid rain and damage to the stratospheric ozone layer. For example, the 1990 CAA Amendments introduced new requirements, including the following:

Air pollution sources must obtain an operating permit issued under a federally approved state program that satisfies the requirements of the CAA.
Mandates related to the control or reduction of 189 toxic air pollutants emitted by:
- Major sources emitting 10 tons per year of any one, or 25 tons per year of any combination, of those pollutants.
- Area sources (i.e., smaller sources such as dry cleaners).
The establishment of a Chemical Safety Board to investigate accidental releases of chemicals.

For some air pollution problems (e.g., acid rain, ozone layer protection, vehicle emissions, and certain stationary source programs involving common pollutants), the CAA Amendments encourage the use of market-based principles, such as performance-based standards and emissions banking and trading.

For example, in allowance trading, affected sources such as utilities are required to install systems that continuously monitor emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and other related pollutants to track progress and ensure compliance. Entities that reduce their emissions below their held number of allowances may (1) trade allowances with other entities in their system, (2) sell them to other entities on the open market or through EPA auctions, or (3) bank them to cover emissions in future years.

2.2.2 The Clean Water Act

The Federal Water Pollution Control Act of 1948 was the first major U.S. law to address water pollution. In 1972, the law was amended and became known as the Clean Water Act. The CWA regulates discharges of pollutants into U.S. waters and sets quality standards for surface waters. Under the CWA, it is unlawful for an entity to discharge any pollutant from a point source (i.e., a discrete conveyance such as a pipe or man-made ditch) into navigable waters without a National Pollutant Discharge Elimination System (NPDES) program permit.

2.2.3 The Toxic Substances Control Act

The TSCA grants the EPA the authority to mandate reporting, recordkeeping and testing requirements, and restrictions related to chemical substances, mixtures, or both. Chemicals regulated under the TSCA include polychlorinated biphenyls (PCBs), asbestos, radon, and lead-based paint. In 2016, Congress enacted the Frank R. Lautenberg Chemical Safety for the 21st Century Act, which amended the TSCA. The 2016 amendments to the TSCA include the following:

A mandatory requirement for the EPA to evaluate existing chemicals with clear and enforceable deadlines.
A new risk-based safety standard.
Increased public transparency for chemical information.

2.2.4 The Resource Conservation and Recovery Act

Under RCRA, the EPA is authorized to control hazardous waste “from cradle to grave,” which includes the generation, transportation, treatment, storage, and disposal of hazardous waste. In addition, RCRA provides a framework for the management of nonhazardous waste. Since its enactment in 1976, RCRA has been amended twice. In 1984, the Federal Hazardous and Solid Waste Amendments (HSWA) revised RCRA to focus on waste minimization, phasing out land disposal of hazardous waste, and corrective action for releases. The 1986 amendments to RCRA enabled the EPA to address environmental problems that could result from storing petroleum and other hazardous substances in underground tanks.

RCRA encompasses several different program areas to ensure compliance with statutes and regulations in the management of hazardous waste and underground storage tanks. For example, Subtitle D of RCRA pertains to nonhazardous solid waste requirements. Regulations established under Subtitle D ban open dumping of waste and set minimum federal criteria for the operation of municipal waste and industrial waste landfills, including design criteria, location restrictions, financial assurance, corrective action (or cleanup), and closure and postclosure requirements. States assume a lead role in implementing these regulations and may set more stringent requirements than those in Subtitle D. In the absence of an approved state program, the federal requirements apply.

Subtitle C of RCRA pertains to the regulation of hazardous waste. Under Subtitle C, the EPA may authorize states (in lieu of the federal government) to implement key provisions of hazardous waste requirements. If a state program does not exist, the EPA implements the hazardous waste requirements in that state. Subtitle C regulations set criteria for (1) hazardous waste generators, (2) transporters, and (3) treatment, storage, and disposal facilities. The criteria include permit requirements, enforcement, and corrective action or cleanup.

2.2.5 The Comprehensive Environmental Response, Compensation, and Liability Act (Superfund)

CERCLA provides a federal “Superfund” to clean up uncontrolled or abandoned hazardous-waste sites as well as accidents, spills, and other emergency releases of pollutants and contaminants into the environment. Under CERCLA, the EPA is authorized to (1) identify the parties that are potentially responsible for the release of pollutants and contaminants (i.e., potentially responsible parties [PRPs]) and (2) request their cooperation in the cleanup (i.e., a financial contribution toward the cleanup and active participation in the cleanup effort). When PRPs cannot be identified or located, or when they fail to act, the EPA will assume the lead role in conducting the cleanup effort. Once the response action has been completed, the EPA can recover costs from financially viable individuals and companies by using various enforcement tools, such as (1) working with the U.S. Department of Justice (DOJ) to pursue the PRPs through the federal court system and (2) assessing penalties on the PRPs. The EPA is authorized to implement CERCLA in all 50 states and U.S. territories. However, Superfund site identification, monitoring, and response activities in states are coordinated through state environmental protection or waste management agencies.

The Superfund Amendments and Reauthorization Act of 1986 (SARA) incorporated various site-specific amendments, definitions, clarifications, and technical requirements within CERCLA, including additional enforcement authorities, settlement provisions, and criminal sanctions for blatant violations. Title III of SARA is the Emergency Planning and Community Right-to-Know Act (EPCRA), which was designed to help protect communities from chemical hazards to public health, safety, and the environment. EPCRA requires hazardous chemical emergency planning by federal, state, and local governments; Indian tribes; and private industry. Under EPCRA, private industry is required to report to federal, state, and local governments on its storage, use, and release of hazardous chemicals.

2.2.5.1 RCRA and CERCLA Compared

Of the federal regulations summarized in the previous sections, RCRA and CERCLA are most commonly viewed as the drivers of the incurrence and recording of an environmental remediation liability. The main difference between the two acts is that RCRA addresses the management of solid and hazardous waste at current operating facilities, while CERCLA focuses on the management and remediation of abandoned, nonoperating sites that are contaminated with hazardous substances. CERCLA tends to be more complicated since the contamination was caused by a past event and more than one party may bear responsibility.

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