The Nickel Report

On June 3, 2023, President Biden signed the bipartisan Fiscal Responsibility Act of 2023 (FRA) to suspend the United States’ debt limit until January 2025. The legislation also imposes changes to the environmental review process for infrastructure projects. Most notably, the FRA amends key provisions of the National Environmental Policy Act (NEPA), a touchstone environmental statute that imposes procedural requirements for the approval of major federal actions. The amendments to NEPA are the first major changes to the statute in almost 40 years. These changes signal Congress’s intent to streamline the environmental review of projects and improve the federal permitting process for energy projects. The amendments to NEPA will likely influence (and may delay) the Council on Environmental Quality’s (CEQ) Phase 2 revisions to NEPA’s implementing regulations which are currently undergoing interagency review. The FRA also expedites the approval process for all permits for the Mountain Valley natural gas pipeline project in West Virginia.

On May 17, 2023, the US District Court for the District of Massachusetts granted summary judgment to federal government defendants and intervenor Vineyard Wind in the first of four lawsuits pending in that court challenging the development of Vineyard Wind, a 62-turbine offshore wind project being built off the coast of Massachusetts, approximately 14 nautical miles south of Nantucket and Martha’s Vineyard at its nearest point. Vineyard Wind—which is slated to be the nation’s first commercial-scale offshore wind project, with capacity to power over 400,000 homes and businesses—has been under development for several years and has met opposition from a range of constituencies, including local residents and the fishing industry.

On May 3, 2023, EPA released its proposed risk management rule under Section 6(a) of the Toxic Substances Control Act (TSCA) to impose restrictions on the manufacture, import, processing, distribution, and use of methylene chloride, a widely-used solvent in a variety of consumer and commercial applications. This is the first risk management rule proposed by EPA since it issued revised risk determinations last year based on its new “whole chemical approach” and policy for assuming that personal protective equipment (PPE) is not used by workers. It also reflects a substantial expansion of the regulatory prohibitions applicable to a chemical that was already subject to TSCA risk management restrictions, albeit more limited ones, under EPA’s prior framework for risk management actions.

EPA is proposing to prohibit the manufacture, processing, and distribution in commerce of methylene chloride for consumer use; prohibit most industrial and commercial uses of methylene chloride; require a workplace chemical protection program (WCPP) for certain identified conditions of use that are allowed to continue; and provide certain time-limited, critical use exemptions under Section 6(g) of TSCA for uses of methylene chloride that would otherwise significantly disrupt national security and critical infrastructure. Stakeholders have until July 3, 2023 to comment on the proposed rule.

On April 27, 2023, the Environmental Protection Agency (EPA) published a Proposed Rule to grant Louisiana primacy to administer and enforce the Class VI Underground Injection Control (UIC) program within its borders. EPA approval of Louisiana’s primacy application would authorize the Louisiana Department of Natural Resources (LDNR) to issue UIC permits for Class VI geologic carbon sequestration facilities and undertake compliance enforcement for such facilities located within the state. EPA has determined that Louisiana’s application meets the necessary requirements for approval and is soliciting public comments on the proposal. One of the major sticking points in EPA’s approval of Louisiana’s program has been the approach to incorporating environmental justice (EJ) into the Class VI permit process. LDNR has agreed to implement a number of EJ-focused elements into the permitting process, including robust EJ analysis and public participation.

On April 6, 2023, President Biden issued Executive Order 14094, Modernizing Regulatory Review. This Executive Order (EO) makes several important changes to the Office of Management and Budget’s (OMB) regulatory review process for federal agency regulations. The EO significantly affects which regulations qualify for interagency review, modifies the OMB gatekeeping function by which meetings are granted on proposed rules, and requires the Office of Information and Regulatory Affairs’ (OIRA) to amend policies underlying how the federal government conducts cost-benefit analysis. In addition, OIRA has released a suite of new draft guidance documents that serve to implement the EO that, if finalized, will impact the review process for regulations. These guidance documents are open for comment as described below.

On April 6, 2023, President Biden issued Executive Order 14094, Modernizing Regulatory Review. This Executive Order (EO) makes several important changes to the Office of Management and Budget’s (OMB) regulatory review process for federal agency regulations. The EO significantly affects which regulations qualify for interagency review, modifies the OMB gatekeeping function by which meetings are granted on proposed rules, and requires the Office of Information and Regulatory Affairs’ (OIRA) to amend policies underlying how the federal government conducts cost-benefit analysis. In addition, OIRA has released a suite of new draft guidance documents that serve to implement the EO that, if finalized, will impact the review process for regulations. These guidance documents are open for comment as described below.

President Biden signed a new Executive Order (E.O.) to advance environmental justice (EJ) late last week, just in time for Earth Day. E.O. 14096, Revitalizing Our Nation’s Commitment to Environmental Justice for All, aims to carry out its title through a bevy of actions, including requiring agencies to create EJ strategic plans, directing research on EJ issues, expanding notifications for toxic chemical releases, and increasing coordination on EJ by establishing a new EJ Interagency Council and White House Office of Environmental Justice. The new E.O. builds on the Biden Administration’s “whole-of-government” approach to EJ, making clear that the obligation to consider and address EJ applies across federal agencies. The E.O.’s directives are likely to guide federal agency permitting, funding grants, and other authorizations for projects or activities that may have implications for EJ communities. On the same day as the E.O. was signed, the administration also announced a handful of other steps to further its EJ priorities.

On March 29 the US House of Representatives adopted by voice vote an amendment offered by Reps. Dan Crenshaw (R-TX) and August Pfluger (R-TX) to speed up Environmental Protection Agency (EPA) review of state applications for primacy to run the Class VI Underground Injection Control (UIC) program. The amendment was included in H.R. 1, the Lower Energy Costs Act, the high-profile energy and permitting reform bill the House approved on March 30.

The UIC program is designed to prevent endangerment of underground sources of drinking water from subsurface injections. The Class VI program specifically regulates the geologic sequestration of carbon dioxide, which is considered to be essential for the world to meet international emission reduction targets. 

President Biden issued his second veto late last week. The President’s second veto protects a U.S. EPA rule that went into effect on March 20, 2023. That rule redefines “waters of the United States” (WOTUS), and at a high conceptual level, returns the Agency’s interpretation of WOTUS to that of the Obama administration, an interpretation that was revoked and replaced by the Trump administration.

This matter has been hotly contested in the federal courts. Indeed, the U.S. Supreme Court is poised to issue a ruling within the next several weeks on Sackett v. EPA, a decision which could substantially revise and narrow the Agency’s definition of “waters of the United States.” The Court’s decision here could send the Biden administration’s revised definition of WOTUS back to EPA for changes needed in-line with the Court’s decision, if and when issued.

On March 29, 2023, the US Environmental Protection Agency (EPA) published in the Federal Register its long-awaited proposed rule to restrict certain per- and polyfluoroalkyl substances (PFAS) in drinking water under the Safe Drinking Water Act (SDWA). This action is part of EPA’s whole-of-agency approach in its PFAS Strategic Roadmap and is expected to directly affect 66,000 public water systems across the country. Comments on the proposal are due on May 30, 2023. EPA will also hold a public hearing on May 4, 2023 to receive stakeholder input on this important rulemaking.