Last year, EPA Region III trumpeted enforcement success stories, including an administrative compliance order issued under the Clean Air Act to the owners of a Philadelphia building who were improperly and unsafely demolishing asbestos-containing materials, and a settlement with a Virginia chemical manufacturer who agreed to pay a penalty and make significant safety upgrades at the facility to settle alleged violations for, among other things, failure to submit documentation to state, county and local officials about the facility’s numerous hazardous chemicals. These actions were made possible by the efforts of the Clean Air Act asbestos emissions and the Emergency Planning and Community Right-to-Know Act (EPCRA) enforcement programs. Next year, however, these programs are not likely to repeat similar successes, as the EPA has determined that they, along with numerous other enforcement programs, will be significantly reduced or eliminated in 2013.

The EPA’s budget for fiscal year 2013 is not yet finalized, but the agency is already making plans for what will surely be a reduced sum from last year. On Feb. 10, the Office of Enforcement and Compliance Assurance (OECA) released its Draft National Program Manager Guidance, in which it sets out priority enforcement areas for the following year, as well as areas in which the agency plans to reduce the amount of resources spent. For these areas of reduction, the guidance uses the terms “reduced emphasis” or “disinvestment.” A March 16 memo by an OECA deputy assistant administrator referred to “areas of proposed budget adjustment.” Whatever the term used to describe these cutbacks, the outcome means less federal enforcement in many areas in which the EPA has long had a significant presence. Such cutbacks will have an impact not just on the EPA, but on states, local governments, regulated industries and the public.

The agency provided several reasons for the cutbacks. The first, and apparently overriding, reason is its reduced budget and the resulting need to set budget priorities. The EPA anticipates receiving less funding in the budget for 2013 than it did in 2012, and though the depth of the cut is not yet known, the reduction could be significant. The second issue, stemming from the first, is the need to prioritize. The March 16 memo sets out the problem starkly: “Investing in top priorities combined with declining budgets means that we will have to cut back in some areas. These reductions result from a strategic decision to make some tough choices and to ensure that we direct resources to the highest-priority problems we are facing today where the EPA can make a real difference.” Next, the agency contends that some of the programs it plans to reduce have been so successful that the problem the program was initially designed to address is manageable and less in need of federal oversight. Finally, for some of the programs, the EPA believes that state governments will be able to fill in any enforcement gaps that the EPA’s leaving might create. Though no one can dispute the hard budgetary realities facing the EPA (and all government agencies), the latter two reasons, as applied to some of the programs detailed below, are more questionable.

The Programs at Issue

The programs to be cut span a number of statutes and issue areas. Under the Clean Air Act, the acid rain enforcement program, the stratospheric ozone program, the wood heater program and the program enforcing the National Emission Standards for Hazardous Air Pollutants (NESHAP) for asbestos will all be reduced to some degree (either completely or to a minimal presence). With regard to the asbestos NESHAP, the EPA will only become involved in response and recovery after catastrophic emergencies, such as hurricanes and tornadoes, where asbestos-containing structures have been destroyed and normal asbestos abatement is impossible.

In the toxics and chemicals realm, the cuts are potentially more significant. The EPA will reduce its enforcement of the Asbestos Hazard Emergency Response Act (AHERA), which requires schools to inspect their buildings for asbestos-containing materials and implement asbestos-management programs. The EPA will only become involved in enforcement actions resulting from “the most egregious violations.” The EPA will also reduce its work on polychlorinated biphenyls, or PCBs. The March 16 memo directs the program to “focus its PCB enforcement resources on nationally significant situations involving greatest threats to health,” but does not provide any further criteria to define those situations. For both PCBs and the AHERA, the EPA regional personnel must consult with EPA headquarters before initiating any new inspections or enforcement actions. The EPA also plans to significantly reduce the resources it spends on underground storage tank (UST) compliance monitoring and enforcement and will attempt to focus UST inspections on certain categories of owners and operators (those with facilities in multiple states, those on tribal lands, those with USTs that endanger sources of drinking water and those who are repeat violators) and reduce smaller and more routine UST inspections.

The Superfund program will not be spared. The Superfund reductions will occur in the brownfields program, where interested individuals and site developers will be directed to EPA guidance documents to determine liability issues on their own, and in cleanups at federal facilities, for which the EPA appears to be hoping to “empower citizen involvement to enhance cleanup oversight and accountability” and to reduce its own work. Additionally, the EPA is disinvesting in the programs enforcing Sections 311 and 312 of the EPCRA. These sections require facilities to maintain certain records regarding the chemicals they keep on site and to provide annual reports on their chemical inventory to local emergency response entities. (Though the EPA had initially indicated it would completely stop working in this area, the more recent OECA memo indicates that the agency has decided to maintain a “minimal federal presence.”)

In the water context, the EPA will be disinvesting from biosolids enforcement and will be reducing its investment in the underground injection control (UIC) program. The EPA notes that “many” states have their own biosolids program, and 33 states are authorized to enforce the UIC program. The EPA does not anticipate reducing its enforcement in the states where it has sole responsibility for UIC enforcement, but does not indicate a similar result for the biosolids program.

Finally, and perhaps of the greatest importance to the regulated community, the EPA is significantly reducing the amount of resources it directs to compliance assistance and to implementation of its policy on self-disclosures of environmental violations. The EPA noted that it may still consider compliance with the factors of the self-disclosure policy when it evaluates penalties in individual enforcement actions, but that it will no longer implement the existing policy.

The news is not all about cuts. The EPA also gave its enforcement priorities for FY 2013, including assuring compliance with the Greenhouse Gas Reporting Rule, targeting the energy sector for compliance for environmental laws, reducing pollution from animal waste and reducing toxic air pollution from the largest sources. The EPA will also focus on compliance monitoring and enforcement of its regulations governing lead-based paint. Specifically, the EPA is directing the regions to devote the vast majority of their toxics resources to inspections and enforcement of the recent lead-based paint rule covering renovation, repair and painting of homes and child-occupied facilities (such as schools and child care centers) built before 1978.

Impacts of These Reductions

The memo and the draft guidance make clear that where the EPA is disinvesting, the agency intends for the states and local governments to pick up the slack. Such an expectation is reasonable in some areas — for example, in the UST program, 38 states have approved state programs that they implement in lieu of the federal regulations, and all 50 states have their own leak detection and cleanup regulations. Though the EPA has traditionally considered its own enforcement of UST compliance requirements to be an important counterpart to state-level enforcement, the states with approved programs are familiar with handling UST enforcement on their own.

It is not apparent, though, that states will be able to cover all the ground that the EPA is leaving for them. For example, many states do not have developed EPCRA enforcement programs. State and local emergency responders, joined by many firefighter associations and departments, commented on the draft guidance, asking the EPA to reconsider its decision on this issue. They told the EPA that they rely on EPA enforcement to send a message to the regulated community that they must comply with EPCRA 311/312, particularly because many states and local entities do not have the legislative authority and resources to establish and implement enforcement programs. Without EPA enforcement, emergency responders expressed concern that they would not have the information they need to respond to spills, leaks and explosions, with potentially serious consequences. The EPA’s decision to maintain a “minimal federal presence” on EPCRA 311/312 issues, according to the March 16 memo, was in response to these comments from the state and local agencies. However, it’s not clear that the minimal federal presence the EPA plans on keeping will satisfy the concerns these agencies raised.

Additionally, the outlook for state environmental enforcement budgets is hardly rosier than the outlook for the EPA’s budget. Though the EPA has tough choices to make in terms of priorities, states indisputably do as well. The Pennsylvania Department of Environmental Protection, for example, faces increased resource demands in terms of its enforcement of regulations related to Marcellus Shale drilling. It may not be reasonable to expect state agencies to increase their spending on enforcement in the areas where the EPA is decreasing its spending.

For EPA enforcement staff and attorneys, particularly in the regional offices, the issue of what work they might find themselves doing in FY 2013 is real. According to the draft guidance, “OECA anticipates retraining staff who work in the disinvestment areas to take on other compliance assurance and enforcement work.” Such retraining does not come easily, nor does it happen overnight. The EPA plans on devoting, to the extent it can, enforcement resources taken from disinvestment areas to higher-priority work. Such an expansion of other program areas also cannot happen overnight.

All of these impacts potentially add up to less EPA enforcement in 2013. While many in the regulated community may view this as good news, it leaves the enforcement landscape in flux. The programs to be cut, for the most part, regulated issues with which industry and counsel were familiar. It is unknown what enforcement of these familiar issues will look like in the future. The public health and pollution impacts of reduced EPA enforcement, of course, remain to be seen. •

Jesica R. O’Neil is an associate in the Philadelphia office of Hangley Aronchick Segal Pudlin & Schiller. She focuses her practice on itigation and environmental matters for a variety of clients.