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CERCLA 108(b) Financial Responsibility Rulemaking Presented to the Board of Oil, Gas and Mining August 24, 2011 By Dana Dean, P.E. - Associate Director.

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Presentation on theme: "CERCLA 108(b) Financial Responsibility Rulemaking Presented to the Board of Oil, Gas and Mining August 24, 2011 By Dana Dean, P.E. - Associate Director."— Presentation transcript:

1 CERCLA 108(b) Financial Responsibility Rulemaking Presented to the Board of Oil, Gas and Mining August 24, 2011 By Dana Dean, P.E. - Associate Director

2 December 11, 1980 – Congress enacts the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) March 12, 2008 – The Sierra Club and others file suit in US Dist. Court for the Northern District of California Feb. 25, 2009 – EPA ordered to identify industries subject to future financial assurance regulations under CERCLA July 28, 2009 – EPA identifies hard rock mining industry as the first industry for which to develop financial responsibility requirements. Draft Rule expected early 2012 Key Dates

3 Of the 1,635 NPL sites that were proposed, listed, or deleted as ofOctober 2007, 90 of them – seven percent – are mining or smelting sites. The metal mining industry disposes of large amounts of waste to the environment. Independent reports identified mining as appropriate to evaluate for thistype of regulation. Commodity prices make the mining industry susceptible to bankruptcy. EPAs Explanation for Starting With Hard Rock Mining

4 FR Notice first defined hard rock mining facilities as those which extract, beneficiate or process metals ( e.g., copper, gold, iron, lead, magnesium, molybdenum, silver, uranium, and zinc) and non-metallic,non-fuel minerals ( e.g., asbestos, gypsum, phosphate rock, and sulfur). However, it references a memo exempting 59 minerals, mostly industrial minerals. Notably for Utah: Sand and gravel, crushed stone, dimension stone, gilsonite, lime,gypsum, salt and sodium compounds What Is Included?

5 State program requires financial surety to ensure compliance with reclamation standards meant to prevent releases, minimize disturbance,and reclaim affected land EPA surety would include bond for unplanned releases of hazardous substances, along with all other on-site activities with hazardous substances State Rules vs. EPA Proposal

6 Under CERCLA section 114(d): …no owner or operator of a facility who establishes and maintainsevidence of financial responsibility in accordance with this subchaptershall be required under any State or local law, rule, or regulation toestablish or maintain any other evidence of financial responsibility inconnection with liability for the release of a hazardous substance fromsuch facility. EPA says The statutory language on preemption is problematic, but a reality. States have proposed that the EPA take a gap approach, they will not do so. States Biggest Concern: Preemption

7 The vast majority of facilities to be targeted are already subject to robust financial assurance requirements under federal and/or state laws Preemption of mature state financial assurance programs Could substantially hurt global competitiveness of critical industries that power the US economy and provide vital products EPA plans to move forward without accurately assessing whether the facilities within the targeted industries actually pose a risk of becomingfuture Superfund sites EPA has failed to thoroughly analyze the capacity of the financial and credit markets to provide the necessary instruments to meet therequirements Industry Concerns (as outlined in a July 27, 2011 letter to John Boehner and Nancy Pelosi)

8 EPA intends to do as many site-specific reviews as possible, with a fixed amount of financial responsibility for the remaining sites (region specific) EPA plans to stick with the statutory time frame to impose such financial responsibility requirements as quickly as can be reasonably achieved butno later than four years after the date of promulgation of the requirements May take up to three years for site-specific numbers, leaving one year for operators to get financial assurance in place May allow companies to hire independent P.E. or P.G. to review and certify the financial responsibility based on information provided by thecompany (EPA would still review) The Latest As of June 15, 2011 as per Greg Conrad of IMCC

9 EPA will cover all aspects of financial responsibility for on-site activities associated with hazardous substances, no gap filling. Could affect DEQas well as DOGM EPA is contemplating a statewide deferral arrangement whereby EPA would defer to a states financial responsibility program (must beadequate and consistent with basic EPA requirements) EPA does not think any state would qualify under present regs EPA is looking at making financial responsibility mechanisms payable to or collective by the states so there is immediate availability of the money. The Latest, continued…

10 EPA still working on the universe of facilities to be covered by the rule. Small Business Regulatory Enforcement Fairness Act (SBREFA) analysis in process EPA considering whether to rely on a financial test for corporate guarantees (self bonds or insurance). Would be based on bond ratings, notthe type of test under RCRA The Latest, continued…

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