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May 13, 2010

EPA Proposes to Regulate Coal Ash

By: Jessica Steinberg — Filed under: CERCLA/Superfund, Emerging Issues, Enforcement, RCRA, Solid Waste — Posted at 10:25 am

On May 4, 2010, following significant revisions (reportedly at the behest of the Office of Management and Budget), the Environmental Protection Agency (“EPA”)  released proposed regulations governing management of coal combustion residuals generated by coal fired power plants, commonly known as coal ash (the “Proposed Rule”).  In Fall 2009, EPA indicated it would release the Proposed Rule by the end of 2009.

EPA has proposed two options for managing coal ash.

The first option would regulate coal ash as special waste under the Resource Conservation and Recovery Act’s (“RCRA”) hazardous waste provisions.  Under this option, a comprehensive program of federally enforceable requirements for management and disposal of coal ash would be created.  Measures would be adopted to phase out the wet handling of coal ash.  Additionally, states would be authorized to develop a permit program or use the federally-established program.  This option would include storage, manifest, transport, and disposal requirements for coal ash as well as mechanisms for corrective action and financial responsibility.  Failure to comply would be subject to direct federal enforcement.

The second option would regulate disposal of coal ash under RCRA’s non-hazardous waste provisions.  EPA would set performance standards for waste management facilities that handle coal ash.  States that adopt their own coal ash management programs would be responsible for enforcing the rule and would have the option to establish a permit program.  Surface impoundments built after the rule goes into effect would be required to have composite liners, but there will be no land disposal restrictions.  Although citizen suits could be filed for failure to comply with the rule, this option does not provide for direct federal enforcement.  This option also does not provide for any financial assurances, but EPA plans to develop a proposed regulation pursuant to the financial assurance requirements in Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) § 108(b) that would cover coal ash facilities.  This option would go into effect earlier than the first option.

Under both options, landfills that accept coal ash will be required to conduct groundwater monitoring, even if they were built before the Proposed Rule is finalized.  Landfills built after the rule goes into effect would also have to install liners.  The Proposed Rule does not address depositing coal ash as backfill in mines, known as minefills.  Nor does it affect the current status of coal ash that is beneficially reused.  The Bevill exemption, which lists specific wastes that are exempt from regulation under RCRA, includes the beneficial reuse of coal ash (e.g., fly ash in cement and concrete).  However, EPA is soliciting comments regarding the uses of coal ash in unencapsulated form, such as in road fill and agricultural applications.  EPA is also soliciting comments on how to define “beneficial use.”  Based on the comments submitted, EPA could determine that unencapsulated uses should be regulated or could redefine which “beneficial uses” remain exempt.

Once the proposed rule is published in the Federal Register, the public will have 90 days to submit comments.

For more information about the Proposed Rule and how to submit comments visit EPA’s website.



January 22, 2010

Coal Ash Regulation Delayed as OMB Meets with Industry Stakeholders and Environmental Groups on Proposed Rule

By: Jessica Steinberg — Filed under: Compliance, Emerging Issues, RCRA, Solid Waste — Posted at 12:09 pm

The promulgation of a proposed rule regulating coal ash has been delayed amid numerous meetings between industry representatives, environmental groups and federal agencies.  On October 16, 2009, the Environmental Protection Agency (“EPA”) sent its proposed coal ash rule to the Office of Management and Budget (“OMB”).  EPA Administrator Lisa Jackson had promised that a proposed coal ash rule would be published by the end of 2009.  The rule may regulate coal ash as a “hazardous waste” under the Resource Conservation and Recovery Act (“RCRA”).  However, the “noteworthy” number of meetings between industry groups, environmental groups and OMB, and the over 2,300 pages of documents OMB must review, have delayed the release of a proposed rule.

Industry representatives believe that regulating coal ash under RCRA would negatively impact companies who produce the ash as well as companies who beneficially reuse it (e.g., as structural fill or agricultural uses).  Tom Addams, executive director of the American Coal Ash Association, a utility industry group, stated “[a] hazardous determination would make builders reluctant to use coal ash not because of what it may contain, but because of tort activity. If litigation was filed on a national basis, it would be mind-boggling to see what the defense costs were.”   Industry representatives also believe that the toxic materials in coal ash are not in high enough concentrations for the ash to be regulated as “hazardous.”

Environmental groups want coal ash to be regulated as a “hazardous waste” because it contains mercury, lead, and other potentially toxic constituents.  Representatives of these groups are concerned that industry may influence the outcome of the proposed rule.

The coal ash proposal could be published in the coming weeks.

More information about the meetings between industry, environmental groups and OMB is available at the OMB website.



December 17, 2009

Manhasset Lakeville Water District Settles Litigation to Clean Up Public Water Supply Contamination

By: Ashley S. Miller — Filed under: Citizen Suits, Project Updates, RCRA, Safe Drinking Water Act — Posted at 10:15 am

The Manhasset Lakeville Water District has secured a $2.75M settlement for costs incurred in response to contamination of the aquifer underlying the Water District’s service area.  Sive Paget & Riesel represented the Water District in its efforts to recover these costs.

The Water District provides drinking water to its 45,000 customers in Manhasset, Great Neck, and New Hyde Park, NY.  After Freon-22 was detected in the aquifer waters, the Water District was forced to build a treatment system to remove the contaminants and render the water safe for public consumption in compliance with New York State drinking water quality standards.

SPR assisted the Water District in locating parties that were potentially responsible for the contamination, investigating the historic source of the contamination, and bringing a federal litigation in the Eastern District of New York against the owners of the source of the contamination for recovery the Water District’s costs.  The litigation asserted federal claims under the citizen suit provisions of the Safe Drinking Water Act (SDWA) and the Resource Conservation and Recovery Act (RCRA).

The Water District has now settled certain of its claims in that litigation for $2.75M.  These settlement funds will offset costs incurred to build the treatment system, legal and engineering fees, as well as the ongoing operation and maintenance costs of removing contaminants from the drinking water supply.  The settlement also serves as an important example to public water districts, demonstrating that ratepayers need not bear the burden of addressing environmental contamination in the water supply.

The following SPR attorneys represented the Water District in this matter: David Yudelson, Daniel Riesel, Dan Chorost, and Ashley Miller.



August 27, 2009

RCRA Injunction Requiring $150 Million Cleanup Not Dischargeable in Bankruptcy

By: Bridget M. Lee — Filed under: Bankruptcy, Citizen Suits, RCRA — Posted at 9:30 am

On August 25, the Court of Appeals for the Seventh Circuit held that an injunction imposed pursuant to the Resource Conservation and Recovery Act (RCRA) against Apex Oil Inc. requiring Apex to remediate contamination at a former oil refinery in Hartford, Illinois was not discharged in Apex’s Chapter 11 bankruptcy.  United States v. Apex Oil Co., Inc., — F.3d —, 2009 WL 2591545 (7th Cir. 009).  Apex argued that the government’s remediation injunction, which was estimated to require expenditures of approximately $150 million, was a “right to payment” that had been properly discharged in bankruptcy proceedings.  The circuit court rejected this argument.

Writing for the court, Judge Richard A. Posner concluded that a RCRA injunction to remediate does not qualify as a claim that can be discharged in bankruptcy because it does not give rise to a “right to payment” as that phrase is defined by the Bankruptcy Code.  Unlike CERCLA, RCRA does not entitle the government to a monetary payment of cleanup costs by a responsible party; instead, it allows the government to secure equitable relief requiring a responsible party to abate an environmental hazard.

According to the Judge Posner, the fact that Apex did not have the ability to conduct the cleanup itself and would have to spend money to comply with the remediation injunction did not create a dischargeable claim.  He reasoned that whether the defendant conducts a cleanup or hires a third party to do so proves irrelevant to the question of whether a “right to payment” exists since “[a]lmost every equitable decree imposes a cost on the defendant. ”