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EPA Won’t Require Cleanup Insurance for 3 Major Industries

The 2015 explosion at Exxon Mobil Corp.'s Torrance, Calif., refinery. (Courtesy of Los Angeles County Fire Department.)

The 2015 explosion at Exxon Mobil Corp.'s Torrance, Calif., refinery. (Courtesy of Los Angeles County Fire Department.)

By E.A. Crunden, Greenwire, E&E News

EPA will not require three major industries to guarantee funding for toxic waste cleanups under federal Superfund law, finalizing a controversial rule in the last months of the Trump administration.

The agency said it would not mandate the chemical manufacturing, oil and gas, and coal power plant industries to provide financial assurance in the event of major accidents and crises.

“EPA has found that existing environmental regulations and modern industry practices are sufficient to mitigate any risks inherent in these industries,” said EPA Administrator Andrew Wheeler in a statement Wednesday.

The agency said it analyzed the need for new financial assurance requirements for those industries under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), looking at financial risks associated with those sectors. EPA said it also evaluated a range of other factors including the history of Superfund cleanups, economic trends and input from the public in its assessment.

“EPA reviewed and considered public comments to conclude that the level of risk is addressed by existing requirements and does not warrant new requirements for these industries,” the agency stated in its announcement.

That decision means no new rules will be introduced addressing the issue. It runs counter to the Obama administration’s argument that industries should have the financial means to fund toxic waste cleanups to ease strain on the government.

The decision affecting the three industries follows a similar move on hardrock mining. In 2017, the Trump administration opted not to impose new insurance requirements on that industry, generating significant litigation (Greenwire, Dec. 4).

Advocacy organizations have already slammed EPA’s new rule as detrimental for taxpayers and the environment, as well as vulnerable communities. They say companies often declare bankruptcy to avoid liability for cleanups, something financial assurance can help prevent.

“For years, it’s been the most important rule that nobody knows about,” said Lisa Evans, senior counsel for the group Earthjustice, calling EPA’s findings “really a huge step backwards.”

Evans said the move holds outsize environmental justice implications, as industrial sites are often located near low-income communities and people of color. She said financial assurance both guarantees a source of funding for cleanup and encourages companies to adopt safer backups to begin with, limiting the chances of future Superfund sites.

Superfund experts say the program has suffered from chronic underfunding in recent years under Democratic and Republican administrations alike. That limited budget has hindered the pace of cleanups, with more than 1,300 sites currently on the National Priorities List. Proponents of financial assurance see it as a key mechanism for ensuring a responsible party is attached to a site in the case of a cleanup. Accident insurance is an example of a financial assurance mechanism.

The incoming Biden administration is likely to take a different approach and push forward financial assurance rules, but Evans said that would take some time given the nature of the rulemaking process. She criticized the Trump administration’s decision as a last-minute action that could extend that process by several years.

“We’re back to square one,” Evans said.


Reprinted from Greenwire with the permission of E&E News. Copyright 2020. E&E News provides essential news for energy and environment professionals at www.eenews.net.