The Trump administration in recent days has signaled it could give vast swaths of the U.S. economy, including the energy sector, waivers from certain federal environmental regulations in response to the coronavirus pandemic.
However, several industry experts are downplaying the potential impacts of the move, predicting that not many companies will seek to capitalize on relaxed environmental oversight.
The U.S. Environmental Protection Agency has historically, and on a case-by-case basis, granted narrowly tailored waivers known as no action assurances to certain entities and locations during natural disasters to ensure the continued operation of critical energy infrastructure.
While the EPA has yet to grant any no action assurances for COVID-19-related reasons, EPA enforcement officials have recently indicated that the agency is now willing to do so for any facility considered critical to public safety and national security, including energy, agriculture, waste, manufacturing, chemicals and hazardous materials.
Issuing broad no action assurances for sectors of the U.S. economy would be unprecedented, said Stan Meiburg, director of graduate programs in sustainability at Wake Forest University and former deputy EPA regional administrator.
But physical risks and financial hardships are different, and in the end, the EPA must justify whether no action assurances are in the public interest. "Is there a genuine risk to the supply of fuel being caused by the coronavirus, and how would you separate that out from coronavirus," Meiburg asked.
Kevin Collins, a partner at Bracewell LLP and a former assistant U.S. attorney, said in an April 7 email that the agency appears to be acknowledging the difficulties companies will face complying with regulations during the pandemic. Routine compliance monitoring, sampling, training and reporting require people to perform those tasks. And as facilities reduce headcount, he said labor may need to be redirected to critical safety functions or production-related tasks unrelated to environmental compliance.
"Would you rather the few workers who are in the nation's chemistry plants devote their time to meeting increased demand for vital chemical products such as sanitizers, disinfectants, or plastics, or filling out routine environmental reports? In the short run, I'll take the former option," Collins said.
An EPA spokeswoman declined to comment on how many requests the agency has received for the waivers and said that any assurance issued will be posted on the EPA website.
"Every No Action Assurance, whether issued in this administration or by a previous administration, includes an explanation of why it is needed and why it is in the public interest," said EPA spokeswoman Angela Hackel in an April 7 email. "That is a case by case determination. If any are granted due to the current public health emergency, we will post them on our website."
On March 26, the EPA announced a temporary set of policy changes aimed at addressing the growing economywide impacts of the COVID-19 pandemic. In addition to notifying regulated entities that the EPA will not seek to impose civil penalties for routine monitoring violations caused by the crisis, the memo said the agencies could issue no action assurances in the future for facilities determined by the U.S. Department of Homeland Security to be "essential critical infrastructure."
Two days later, DHS issued an advisory outlining how 16 sectors of the U.S. economy would be considered essential critical infrastructure during the national response to the pandemic. The document expanded on an Obama White House memo to specify the types of businesses that were essential. For energy, the advisory said they include power and renewable companies, oil and gas firms, and the coal supply chain.
In response to questions from congressional Democrats about the memo, EPA Assistant Administrator for Enforcement and Compliance Susan Bodine said in an April 2 letter the agency "strongly disagrees with those that argue that a more appropriate response to this public health crisis would be to force facilities to either shut down or to put people at risk" by requiring continued labor-intensive reporting and monitoring activities.
"It is also no solution to force facilities to choose one of those options until EPA or a state could review the facts of each situation and approve an individual, site-specific no action assurance," Bodine said. "Making upfront individual determinations of whether every facility in every sector can continue routine monitoring and reporting is not feasible."
Nevertheless, a coalition of environmental groups petitioned the agency for an emergency rule clarifying that companies are actually required to report all COVID-19-related violations. The petition identified a range of energy-specific monitoring and reporting requirements, including emission monitoring systems and stack testing for fossil fuel-fired power plants, leak detection and repair monitoring at oil and gas facilities, and Toxic Release Inventory and greenhouse gas inventory reporting.
Environmental groups will also remain vigilant for future federal and state actions that relax environmental compliance in response to the pandemic, said Patrice Simms, vice president of healthy communities for Earthjustice.
"What we tend to be seeing are broad statements about an intent to exercise enforcement discretion, most of which really don't indicate where a particular exercise of enforcement discretion would happen," Simms said April 8 on a call with reporters. Simms previously served as a deputy assistant attorney general in the Obama administration.
Other former Obama EPA officials said the initial enforcement memo could also be a precursor to broader sectorwide assurances.
"It seems very possible that EPA will issue an additional no action assurance for the energy sector, because EPA specifically said in the March 26 policy that future no action assurances for critical infrastructure industries may be considered," said Cynthia Giles, former assistant administrator for the EPA's Office of Enforcement and Compliance Assurance, in an April 6 email.
No 'Machiavellian plans'
But industry experts counter that especially in an election year, the Trump administration is unlikely to seek to bail out companies by reducing environmental compliance measures during a global crisis, especially fossil fuel producers.
Cause for concern would be more warranted during a second Trump term when he would have less electoral accountability, said William Yeatman, a research fellow with the Cato Institute.
"To the extent that this is a disingenuous effort by the DHS and the EPA to aid the domestic oil and gas industry, that would become readily apparent pretty quick," Yeatman said. "Especially near the election, I don't see any Machiavellian plans unfolding now."
State regulatory agencies can enforce environmental compliance if necessary. With the enforcement changes, the EPA and other agencies are trying to give companies some leeway "so as not to create further safety and health issues because of existing rules and regulations," said Cynthia Quarterman, a distinguished fellow with the Atlantic Council.
"I don't see rampant and widespread noncompliance as a result of this," Quarterman said.
Industry may welcome some enforcement relief in case of any accidents or mistakes, but regulatory enforcement changes will do little to save companies already headed for bankruptcy, said Barry Worthington, executive director of the United States Energy Association. Struggling producers may be marketing themselves to larger companies, he noted, making it unlikely they would cut safety and environmental corners.
"We're under plenty of pressure from all corners to comply with environmental regulations and to reduce emissions, and that includes from leaders of all levels, our customers, our stakeholders, our employees," Worthington said. "A major company doesn't change its long-term business plan to take advantage of a crisis to save a couple of bucks in the short-term."