Note: Although Scott Pruitt resigned in early July as Administrator of the EPA, his resignation does not withdraw or invalidate any of the actions discussed in this article. Acting Administrator Andrew Wheeler may change some proposals as they proceed through administrative review, but there is no indication that the goals of EPA under the present administration will change. |

Statutory Constraints on Deregulation

Judicial Constraints on Deregulation

Clean Air Council v. Pruitt Americans for Clean Energy v. EPA, |

The New Attempt to Deregulate Through 'Small' Policy Adjustments

• What will it cost to change and then change back if the new policy is cancelled or a planned rule change is not adopted?
• Do I need to collect data to show compliance with two approaches for my protection if the change is not effective in the future?
• Will my active adoption lead to higher levels of more critical review by state agencies or nongovernmental organizations? More importantly, is the change even effective in the states in which I operate?
• If the changes affect my products or wastes, do I risk losing sales or having to perform costly remedial actions? Should I conduct my own review of the costs and benefits to make sure all risks are captured and considered?

Analysis of Recent Policy Examples

• Social cost of carbon. EPA is required by law to balance various factors in developing rules. The EPA has adjusted the social cost of carbon (SCC) in assessing rules for controlling power plant carbon emissions under the Clean Power Plan. The EPA reduced the previous cost estimate for impacts from about $45 per ton of carbon emitted to between $1 and $6 per ton. The adjustment was made by considering only domestic impacts rather than global impacts, and by using a different discount rate for long-term analysis. This factor is not used in determining the need for regulations but is considered in deciding the extent of such regulations, which can allow significant change, 82 Fed. Reg. 48035 (October 16, 2017).

• New source review. On De. 7, 2017, then-Administrator Pruitt issued a memorandum re-interpreting the requirements for new source review of planned new source construction with modification of emission sources. The policy revises enforcement practices so that the EPA will not question the results of companies' projection estimates of post-construction emissions if they followed the methods for calculating projected emissions in the rules. Moreover, enforcement will not be taken on incorrect projections unless actual emissions exceed the significance threshold, see Pruitt memo, Dec. 7, 2017, “New Source Review Preconstruction Permitting Requirements: Enforceability and Use of Actual-to-Projected Applicability Test in Determining Major Modification Applicability”.

• Once in, always in. The EPA sets standards for controlling hazardless air pollutants (HAP) from major sources under Section 112 of The Clean Air Act. These sources are “not subject to major source emission controls” (called “maximum achievable control technology” or MACT). MACT controls are based on levels achieved by the best controlled sources. If a major source whose controls were used to set MACT became a non-MACT area source, the MACT requirements could change and emission standards would be reduced for that source and others. A 1995 memo set the EPA's policy, called “once in, always in;” if a major source did not change to an area source by the first compliance date, it would always be a major source subject to MACT. A memo issued by the EPA's assistant administrator for air has revoked the “once in, always in” policy. Regulatory changes are promised, and the memorandum contemplates an immediate change in EPA administration and enforcement.

• EPA proposals involving science in policymaking. One proposed rule, “Transparency in Regulatory Science” (83 Fed. Reg. 18768-74) (4/30/2018) would require scientific studies used to develop regulations to be publicly available with “independent validation” and peer review. An EPA memorandum, “Back to Basics for Reviewing National Ambient Air Quality Standards” (5/09/2018) aims to limit the Clean Air Scientific Advisory Committee to input on scientific issues, thus giving final rulings on policy to the Administration. Concerns have been raised about the technical and legal feasibility of implementing these changes. EPA statutes continue to require consideration of sound science in the development of a supporting record, and fully distinguishing policy from science may prove to be a change that Congress will reject for the burdens it places on them to articulate standards for regulation which are currently commended to science for resolution.
• Cost-benefit analysis. In an advanced notice of proposed rulemaking published on June 13, 2018 (83 Fed. Ref. 27524-8), EPA invites comments on establishing rules to govern cost-benefit analysis in rulemaking. The notice offers suggested areas for comment, including the usefulness of having one set of rules to govern cost-benefit analysis for all programs, the value of assessing multiple regulatory standards cumulatively to assess costs, and establishing a specific standard for “reasonableness” in statutory cost-benefit mandates, such as maximizing net benefits.

Robert L. Collings