Anne Austin recently joined Industry Insights host Joel Simon to discuss the key considerations and drivers of the Biden administration’s major regulatory initiatives.
Anne Austin: Thanks so much. It’s great to be here today, Joel.
Joel Simon: Anne, I’m really excited for this chance to speak with you because there’s so much going on at the federal environmental policy level, and it would be great to have someone really knowledgeable present this to us in an organized fashion. So with that minor task ahead of you, could you start us off with a brief overview of the environmental regulatory landscape?
Austin: Absolutely, Joel. I would be happy to. And while I appreciate the humor about this not exactly being a minor task, I will make the best of it. I think the two really big key considerations that are driving all of the major regulatory actions under this administration are the topics of climate change and environmental justice. All of the language you’re hearing out of the White House—the press statements out of the natural resource agencies or agencies of any jurisdiction—it’s big, it’s bold and it’s very aspirational. If you want examples of what to look for, I recommend checking out the initial executive orders issued under the new administration. They talk about a “one government approach,” that we’re going to “go where the science takes us” and that they’re taking an all-hands-on-deck approach. This is with the general idea of really initiating, pushing and incentivizing a clean energy and economy transition with an overall goal of reducing carbon dioxide emissions by 50 to 52% by 2030. And that is compared to 2005 levels. That’s a lot of work to do on some really, really heavy topics. A little bit more specifically on the topic of environmental justice—although it is tied into kind of the larger efforts being made when it comes to climate change—President Biden has directed the EPA and the DOJ to significantly elevate environmental justice efforts, including making it a top priority for EPA’s enforcement office and even going so far as to rename DOJ’s Environmental Division to highlight the equity focus, so the two really do go hand in hand. Now you’re going to have some key limitations with all of these major regulatory actions, which I know that we’ve seen play out over 2021 but will be especially important for the remainder of the administration—time, resources and just your basic external and political factors.
Simon: Let’s discuss those.
Austin: So, let’s talk about time for a little bit. A lot of these regulatory actions take a considerable amount of time due to EPA timelines and statutory requirements. Next you have the issue of resources. FTEs, full time employees—they’re all still working remotely, and there’s a current recruitment effort underway to increase the number of FTEs at the agency to get all of this work done. You also have the budgetary constraint. And then certainly last but not least, you’ve got these external and political factors. You’ve got the legislative issue here, which is the reconciliation package has not materialized yet, which is viewed as a headline piece of legislation to really set out what will be going forward and what will be supported when it comes to moving the clean energy and clean economy forward. The executive actions push hard on the legislative agenda, but they might need now to really turn to the regulatory agencies with only three years of the first term remaining to achieve these ambitious goals. And then, of course, you’ve got the judicial side of it. You’ve got case law and things happening at every judicial level, which is informing how and when those regulations can be developed.
Simon: Thank you for setting the table with that, Anne. Can you take us through a couple of real-life examples of the key regulatory priorities in action, just to put a little more detail around that?
Austin: Sure. First, there is the Waters of the United States, affectionately called WOTUS. The agencies argue that at this point in time, the 2020 rule that was promulgated under the previous administration provided less protection and could have allowed a lot more in terms of impact in the nation’s water than any rule that had preceded it because the rule was viewed as pulling back on both EPA and the U.S. Army Corps of Engineers jurisdiction over what qualifies as navigable waters. As a result, we’ve got a proposed replacement rule that was actually published earlier this week on December 7, which would roll things back and go back to retaining the 2015 rules’ significant impact tests developed by Justice Kennedy and the Rapanos decision. And it also retained the Rapanos pluralities determination that the WOTUS definition should be interpreted to be limited by relatively permanent standing or continuous flowing bodies of water connected to traditional, navigable waters or kind of the ephemeral test. This is all being done in an effort to reprioritize climate change, and environmental justice as well within the overall WOTUS priority. When climate change has been discussed, the focus has traditionally been in the airspace and air quality. WOTUS places a greater focus on climate change and impact on water and water quality. When it comes to environmental justice, a much greater emphasis has been placed on consultation with tribes and environmental justice communities. The other one that’s a big interest and something that I spent a lot of time working on is the setting of the national ambient air quality standards or the NAAQS. Most specifically here, the reconsideration of the particulate matter (or PM) and ozone NAAQS. This is an easier tie in, especially when it comes to seeing how they fit into the larger context of climate change and environmental justice. When it comes to PM and ozone, there is the belief that adjusting the NAAQS downward again, setting a more conservative standard is going to further climate change goals from human health and an environmental standpoint because it will require industrial facilities and states to make sure that they’re going back and further restricting permitting levels for various emission limits at various types of facilities. It’s going to force them to go back and readjust their SIPs, their state implementation plans, to meet those NAAQS goals. When it comes to environmental justice, there’s also the belief that those NAAQS being more aggressively adjusted in a downward way is going to improve the health and environmental impacts specifically in EJ communities because you have the issue of a lot of industrial facilities, manufacturing facilities, refining facilities often being near or adjacent to EJ communities. Again, the thought being, if you require additional pollution control technologies to be installed at these facilities, it’s only going to improve the air quality, which will most immediately impact those communities next to them. I would also say that one thing of note on this is that it was only very recently that EPA announced it was actually going to be reconsidering the 2020 ozone standard. This all, especially when it comes to the NAAQS, ties back into resource constraints that I mentioned at the outset. You’ve got the same EPA staff working on the set of NAAQS and the review. It’s the exact same groups. They’re smart, professional, they know what they’re doing—but again, you have those basic limitations on the same group of people working on traditionally two packages that would be taken up in sequence to one another, not at the same time.
Simon: Those are both great examples, Anne. I know that water is a global issue, so it’s nice to see that being focused on by the U.S. for a change. And ozone is something that I recall came to our attention back in the 1980s, so it’s interesting to see that grabbing headlines again. What else is on the environmental radar screen that you can tell us about?
Austin: There’s a lot going on—2022 is going to be a busy one. Recently, we had the methane proposal that was published. It’s very interesting. The preamble language has been proposed, but for those regulatory attorneys out there, the regulatory text has not yet been proposed. It’s a pretty unusual way for EPA to proceed with a rulemaking, and it bears close watching. We anticipate a supplemental, but the initial round of comments is going to be due mid-January, so it will be interesting to see whether or not any requests for extension are processed or not, and then figure out what the timing on the supplemental is going to look like. The other thing that’s coming up in the way of litigation is that related to the affordable clean energy rule. The Supreme Court recently granted writ of certiorari on what could be a very significant case post Massachusetts v. EPA, assuming it gets schedule. I’m sure anybody that watches the SCOTUS docket has noticed that they’ve opted to take on a very interesting case load. So, it’ll be very, very interesting to see whether or not it does ultimately wind up being scheduled and will bear close watching. Last are PFOA and PFOS These are the forever chemicals that have been discussed in recent news. EPA is taking that “all of agency” approach that I mentioned earlier under a PFOS roadmap and is setting new target dates. Also, the Office of Air and Radiation is scheduled to add PFOS to the hazardous air pollutants list next fall, which is a pretty concrete development on that front.
Simon: In the remaining time we have, can you just give us a very brief snapshot on what you’re seeing on the ESG front from your regulatory perspective?
Austin: Absolutely. I’ll focus here on the E of ESG, the environmental component—there’s a lot that folks are looking at, and anticipate coming out of SEC. What has perhaps not garnered as much attention is that the Biden administration has asked the EPA to work with the SEC to make sure that that a level of expertise and policy background is being shared to best inform how the SEC develops their ESG regulatory framework going forward. Again, this gets to that “all of government” approach, leveraging the expertise that’s in-house across various agencies, and I’m personally very interested to see whether or not the SEC is going to utilize the EPA’s greenhouse gas reporting requirements and databases and perhaps use that as a model going forward.
Simon: That’s a lot to digest! Thank you, Anne, for that great overview of the environmental policy initiatives at the top of the Biden administration’s agenda. It sounds like you have some busy years ahead of you! We really appreciate your great insights and hope to see you again when we can do a deeper dive together on some of these issues. It’s been great having you on our podcast.
Austin: Joel, thank you so much. It’s been a pleasure to visit with you today.
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