Welcome & Introductions

Environmental Priorities of the Obama Administration

Thursday, March 19, 2009 11:30 a.m. – 12:30 p.m. CST

1 Introductions

Linda E. Benfield

Housekeeping Issues

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2 Key Environmental Appointees Under the Obama Administration

Richard G. Stoll is a partner in Foley & Lardner's Washington, D.C. office. He is a member of the firm's Environmental Practice, and concentrates on federal administrative and environmental law matters.

Richard G. Stoll

Key Environmental Appointees Under the Obama Administration

Julie Solmer Stine is an associate at Foley & Lardner LLP. She is a member of the firm's Environmental Regulation Practice. Prior to joining Foley, Ms. Solmer Stine worked as an environmental compliance coordinator in the automotive industry, where she ensured facility compliance with EPA, OSHA, and DOT regulations; implemented environmental management systems; and obtained ISO 14001 certification.

Julie S. Solmer Stine

3 New Administration – New Initiatives

Mark Thimke is a partner with Foley & Lardner LLP. He is a member of the firm's Environmental Regulation, and Corporate Compliance & Enforcement Practices and the Energy Industry Team. Mr. Thimke's practice encompasses all major environmental programs including hazardous waste, Superfund, the Clean Air Act, air toxics, and wastewater.

Mark A. Thimke

New Administration – New Initiatives

Linda Benfield is a partner with Foley & Lardner LLP and chair of the Environmental Regulation Practice. Ms. Benfield has 22 years of experience in litigation and counseling in all aspects of environmental law, including air and water permitting and compliance issues, and solid and hazardous waste handling and disposal.

Linda E. Benfield

4 Economic Stimulus and Federal Spending

Bruce Keyes is a partner with Foley & Lardner LLP. He is a member of the firm's Environmental Regulation and Real Estate Practices. Mr. Keyes divides his time between property redevelopment, brownfields, sustainable development initiatives, environmental compliance counseling, transactions and environmental litigation.

Bruce A. Keyes

Presentation Topics

Key Environmental Appointees Under the Obama Administration New Administration – New Initiatives Economic Stimulus and Federal Spending

5 Key Environmental Appointees Under the Obama Administration

Richard G. Stoll Julie S. Solmer Stine

Key Environmental Appointees under the Obama Administration (as of March 19, 2009)

Lisa Jackson – EPA Administrator Stephen Chu – Secretary of Energy Carol Browner – White House “Climate Czar” Ken Salazar – Secretary of the Interior David Hayes – Deputy Secretary of Interior Cass Sunstein – OIRA Administrator Todd Stern – Special Envoy for Climate Change (State Dept.) Jon Cannon – EPA Deputy Administrator Gina McCarthy – EPA Assistant Administrator for Air Robert Sussman – EPA Senior Policy Counsel Lisa Heinzerling – EPA Senior Policy Counsel Cynthia Giles – Assistant Administrator for Enforcement and Compliance Assurance

6 Lisa P. Jackson EPA Administrator

Commissioner of New Jersey Department of Environmental Protection 2006-08 (joined NJDEP 2002)

Served on federal EPA staff for 16 years. Administered cleanup of hazardous waste sites and helped direct regional enforcement division

Masters degree in chemical engineering from Princeton

Reputation as consensus builder

Named NJ Governor Corzine’s chief of staff shortly before Obama chose her for EPA

Lisa P. Jackson (cont.) EPA Administrator

At NJDEP introduced plan to reduce carbon emissions; but criticized by some environmental groups for proposal to privatize cleanup of hazardous waste sites

Of several candidates considered by Obama, generally considered the most reasonable by industry interests

7 Stephen Chu Secretary of Energy

Won Nobel Prize in Physics in 1997 for research in cooling and trapping atoms with laser light

Formerly director of Lawrence Berkley National Laboratory, and professor of physics at University of California, Berkley

Has called for urgent action on climate change, and advocated more research into alternative energy and nuclear power

Carol M. Browner Assistant to the President for Energy and Climate Change

Q Newly created position – White House advisory slot with no Senate Confirmation required

Q Position to coordinate DOE and EPA policy/positions (including legislative) regarding greenhouse gases and climate change

Q Obvious potential for duplication/overlap/friction with DOE and EPA leadership – remains to be seen how this will work in practice

Q EPA Administrator under Clinton 1993-2001

Q Career has been spent either in government or pro- regulatory public interest groups

Q For many years closely allied with Al Gore, especially on environmental/climate issues

Q Considered to strongly favor environmental interest groups’ positions on most key issues

8 Ken Salazar Secretary of Interior

Elected U.S. Senator from Colorado 2004

Colorado's Attorney General 1999-2004

Known as centrist in the U.S. Senate

Campaigned for Obama in Colorado

Supported building economic stimulus package around investments in energy infrastructure

Some environmental groups have criticized him as “right-of-center” for votes on global warming, fuel efficiency and endangered species issues

David J. Hayes Deputy Secretary of Interior

Nominated but not yet confirmed by Senate

Held same position for last two years of Clinton Administration

Career environmental lawyer representing corporate clients in major law firms – most recently D.C. office of Latham & Watkins

Despite corporate client representation, on moderate to liberal side of most environmental/resource issues – actively campaigned for Obama (and other Democrats in past) and led Obama transition team on environment/resource issues

Longstanding and high-level volunteer positions with World Wildlife Fund, American Rivers, and Democratic think tank Progressive Policy Institute

Generally supported by both industry and natural resources groups as a “problem solver” who can bring diverse interests together

9 Cass R. Sunstein Administrator, White House Office of Information and Regulatory Affairs (OIRA)

Obama has announced intention to nominate

OIRA part of White House Office of Management and Budget (OMB)

OIRA supervises executive agencies’ agenda and policies for regulations with direct authority over EPA, OMB, FDA, etc. Essentially has veto power over agency regulations

In past administrations (especially Bush II), OIRA often forced EPA and other agency regulations to be more sensitive to costs/benefits, to chagrin of public interest/environmental groups

Such groups had hoped for an OIRA Administrator aligned with their views in Obama Administration

Cass R. Sunstein (cont.) Administrator, White House Office of Information and Regulatory Affairs (OIRA)

Sunstein a major surprise and disappointment to such groups

Law professor most of career – for years at University of Chicago Law School now at Harvard – widely known and respected in legal academic circles as expert in federal administrative and constitutional law

Many speeches, articles, and books reflect strong bias in favor of rigorous cost-benefit approach to regulations

Industry groups pleased with appointment

10 Todd D. Stern Special Envoy for Climate Change (appointed by Secretary of State Clinton)

With sharp break from Bush Administration, President Obama wants U.S. to take lead in negotiating comprehensive greenhouse gas reductions

Under Clinton Administration, Stern was senior White House official at previous Kyoto and Buenos Aires rounds of climate negotiations

Worked with Al Gore in producing “An Inconvenient Truth”

Secretary of State Clinton named Stern to take lead for U.S. State Department in all upcoming global climate negotiations

Currently (since 2001) partner in D.C. law firm Wilmer Hale – primarily government relations/public policy/political practice

Long-time friend of Bill and Hillary Clinton – worked on Hillary’s presidential campaign, and negotiated the terms of agreement for Bill Clinton to reveal names of foundation donors to pave way for Hillary’s confirmation as Secretary of State

Jonathan Z. Cannon EPA Deputy Administrator

Nominated but not yet confirmed by Senate

Law professor and director of the University of Virginia Law School’s Environmental & Land Use Program (1998-present)

Private practice at Beveridge & Diamond

EPA General Counsel under the Clinton Administration (1995-98)

Held numerous other positions at EPA under Clinton, George H.W. Bush, and Reagan Administrations, including assistant administrator for administration and resources management, and chief financial officer

11 Gina McCarthy EPA Assistant Administrator for Air & Radiation

Nominated but not yet confirmed by the Senate

Commissioner of the Connecticut Department of Environmental Protection (appointed by Republican Governor Jodi Rell in 2004)

Key player in creation of the Regional Greenhouse Gas Initiative; led effort to adopt California standard for GHG emissions from motor vehicles

Previously worked on environmental issues at state and local level in Massachusetts, including serving as Deputy Secretary of Operations for the Massachusetts Office of Commonwealth Development

Robert Sussman EPA Senior Policy Counsel

Will advise Jackson on climate and environmental issues across the agency

Served as Deputy EPA Administrator under Carol Browner during Clinton Administration Was key player in global warming science policy and environmental aspects of NAFTA

Subsequently returned to private practice at Latham & Watkins, chairing the firm’s environmental practice; retired in 2007

Climate change expert at liberal think tank Center for American Progress (2008-2009)

12 Lisa Heinzerling EPA Senior Policy Counsel

Serving as senior policy counsel on climate change in the Immediate Office of the Administrator

Georgetown University law professor

Legal arguments in Massachusetts v. EPA helped convince the Supreme Court to find EPA has the authority to regulate CO2

Strong opponent of cost-benefit analysis

Member of the Center for Progressive Reform, a group of academics who have pushed for stricter regulation

Cynthia Giles Assistant Administrator for Enforcement and Compliance Assurance

Obama announced intention to nominate March 18 Currently vice president/director of Conservation Foundation's Rhode Island Advocacy Center Focused in that job on climate change issues Head of Massachusetts DEP Bureau of Resource Protection 2001-05 Several jobs with federal EPA, including head of Region III (Philadelphia) Enforcement Division 1995-1997 Assistant U.S. Attorney before going to federal EPA

13 New Administration – New Initiatives

Linda E. Benfield Mark A. Thimke

January 20 Rahm Emanuel Memo

Emanuel White House Chief of Staff Memo directed against Bush "midnight rules" Memo instructs all federal agencies (including EPA) to – Refrain from transmitting any proposed or final rules to Federal Register (FR) that have not yet been transmitted – Withdraw any proposed or final rule that had been transmitted to FR but not yet published – Extend effective date of any published final rule that has not yet become effective All for purpose of allowing Obama appointees to consider which Bush proposals/rules should not be allowed to go forward – Similar actions taken the last few times a new party has assumed power in White House

14 January 21 Peter Orszag Memo

Orszag new head of OMB Memo amplifies and sets procedures for all agencies (including EPA) to comply with Emanuel Memo Adds new twist to Emanuel Memo, going beyond precedent of past transitions: – “Consider the appropriateness of not defending a legally doubtful rule in the face of a judicial challenge."

Jackson March 13 Letter to Senator Inhofe

Administrator Jackson sends letter responding to Senator's request for status of EPA actions in follow-up to Emanuel and Orszag Memos Includes detailed listing of EPA proposals/final rules in following stages, and current status of Obama team review – Signed by Bush team but now withdrawn from OMB – Sent by Bush to Federal Register (FR) but not yet published in FR, and now withdrawn – Bush rules published in FR but not yet effective Also announces in letter has initiated an "ongoing process" to review/reconsider ALL of the "approximately four thousand" final rules issued by Bush EPA from 2001 to 2008

15 Bush Performance Track — Suspended

Regulatory initiatives to companies that commit to non-binding pollution reduction plans “Was developed in a different era and may not speak to today's challenges"

Refinery Air Toxics Rule — Delayed

Signed January 16, not yet published Subject to court order to promulgate “Evaluating additional issues and options affecting the petroleum refinery sector"

16 National Ambient Air Quality Standard for Lead Litigation — Held in Abeyance

Missouri Coalition for the Environment, et al. v. EPA (D.C. Cir.) OMB changes to monitoring requirements EPA requested case to be held in abeyance for 6 months Follows Court remand of fine particulate

matter (PM2.5) air quality standard for scientific justification

National Ambient Air Quality Standard for Ozone — Held in Abeyance

Mississippi v. EPA (D.C. Cir.) Challenge by states, environmental groups, and industry representatives to the ozone standards EPA requested case to be held in abeyance for 6 months Give the Obama administration an opportunity to determine whether the standards "should be maintained, modified, or otherwise reconsidered"

17 TCE Vapor Intrusion Cleanups

Interim guidance signed January 15 Mirrors California and New York standards for risk evaluation Backed by DOD EPA "currently evaluating whether to withdraw"

NSR "Aggregation" Rule — Stayed Effective Date

Published in Federal Register January 15 Was to be effective February 17, delayed to May 18

18 Endangered Species Act — Scientific Consultation Rule Under Review

December 2008 rule waived requirements for consultation with FWS and NMFS for construction projects March 3 memorandum requests that the Secretaries of Commerce and Interior “review” the Bush regulation and determine whether new rules are needed “Until such a review is completed, I request the heads of all agencies to exercise their discretion, under the new regulation, to follow the prior longstanding consultation and concurrence practices”

New Administration – New Initiatives

Cross-program focus of U.S. EPA “Science-based” decision-making – Reverse “perception” of political influence affecting science – Stringency of standards changing Reporting – Increased reporting – New areas Nanotechnology Greenhouse gas

19 New Administration – New Initiatives

Enforcement – Increased enforcement activities – Criminal enforcement

Clean Air – Major Changes on the Horizon

CO2 – Proposed reporting rule – just released – California waiver – promised – “Endangerment” determination – potentially by Earth Day PSD – Regulated NSR pollutant; looking at reversal of the “Johnson” memo

– De minimis threshold for CO2 – query 25,000 tons based on proposed reporting rule – Possible presumptive BACT or possible cost/ benefit threshold adjustments to address “Dunkin Donut” emitters

– Likely target of short-term CO2 PSD – coal-fired boilers

20 New Source Review

Aggregation rule – Stayed – U.S. EPA proposing to reopen rulemaking based on petition for reconsideration Actual to future actual/demand growth – Antibacksliding provisions of Clean Air Act with regard to non-attainment areas – Wisconsin NSR SIP – Petition for reconsideration being used – May reopen “significance test” issue

Ozone Standard

Revisit new 8-hour standard of 75 ppm “Science-based” reassessment Lowering of standard – affect attainment status of many areas Reduced industrial/transportation may allow achieving standard – short-term Watch for “maintenance plan” requirements; affect future growth in recovery

21 PM2.5

Potentially accelerate finalizing the PM2.5 standard after D.C. Circuit recent rejection of Bush Administration standard Announced Air AA (Gina McCarthy) from Connecticut –

currently regulates PM2.5 using conditional test methods Practical affect – Watch for non-attainment based on new standard – Modeling issues – Monitoring requirements – Title V/construction permitting

MACT Standards

Reversal of Bush-era MACT standards approach – Incorporated risk principles into setting of MACT standards – Courts rejected based on two-step statutory approach Technology then risk Currently, boiler MACT and plywood MACT but others questionable – such as recent action on petroleum refining MACT More stringent numbers likely MACT SSM exemption rejected by court; guidance may be forthcoming, but facilities need to address Mercury MACT – reversal of Bush Administration position on mercury and CAMR

22 Superfund/Brownfields Remediation

Re-funded Superfund – greater flexibility for U.S. EPA to address sites; changes “leverage” Orphaned sites – states may move to Superfund (lack of state funding) – Financial assurance – greater importance Soil vapor issues – chlorinated compounds Revisit Brownfields “redevelopment” model for cleanups – Economics – Increased slowdowns/bankruptcy Greenhouse gas/sustainable remediation

Reporting

Right-to-know reporting – 2009 fiscal legislation stopped “short-form A” reporting for non-persistent, bioaccumulators or toxic Revised MACT standards – more industry testing to rewrite rules Title V air permit – certifications; increased importance Additional “MACT” information to provide basis for revised MACT rules – boiler MACT example

23 Enforcement

Increased levels of enforcement likely; recent examples – NSR claims – Westar/Big Cajun – New legal theories NSR – application for Title V permit becoming key claim NSR – historical legacy liability in asset purchase context NSR – natural resource damage type claim Criminal enforcement – potential/actual harm and reporting manipulation

March 9 Announcement on Coal Combustion Waste (CCW)

TVA dam spill in Tennessee in December 2008 has triggered a flurry of action

EPA had long ago (under Browner) decided RCRA Subtitle D appropriate for CCW; environmental groups have never been happy, and have continued campaign to subject CCW to Subtitle C

Obama Administration may have re-examined the Browner decision, but unlikely to have been a high priority — until the dam spill

In major actions and announcements on March 9, EPA: – Sends CERCLA 104(e)'s to almost all electric utility companies in U.S. (with very fast turnaround deadlines) demanding information on structural integrity of impoundments, landfills – Announces reconsideration of previous decision to keep CCW in Subtitle D — will propose RCRA regulations for CCW by the end of calendar 2009, Subtitle C or D to be determined

24 Economic Stimulus and Federal Spending

Bruce A. Keyes

Significant Federal Spending Measures

Energy Improvement and Extension Act of 2008 (part of Troubled Asset Relief Program (TARP) (10/3/2008)

American Recovery and Reinvestment Act (ARRA) (2/17/2009)

2009 Omnibus Spending Bill (3/11/2009)

2010 Omnibus Spending Bill (April, 2009)

And…

A Second Stimulus done smarter? – Spending side was reduced to accommodate tax cuts – Perceived urgency won over deliberation

25 Federal Spending Principles Recovery…... and ……Reinvestment

Safety Net spending – Unemployment, food stamps, etc. Budget Stabilization Categorical – Program or priority related – Little flexibility – E.g., Weatherization, Brownfields Economic Foundations – Infrastructure – R&D

ARRA: The Climate Change and Sustainability Investment Act

26 ARRA: The Climate Change and Sustainability Investment Act The B’s and the M’s at EPA

American Recovery and Reinvestment Act — Common Principles

Programs and priorities cut across agency boundaries – E.g., Carbon priority DOE – smart grid, renewables, weatherization DOT – transit EPA – certification programs – E.g., Clean Water USDA for rural programs EPA Revolving Loan funds Agencies report unprecedented levels of discussion between agencies Rules are required in 30-60 days!

27 American Recovery and Reinvestment Act — Common Principles

“Extraordinary times require extraordinary measures” – Agencies will be doing everything they can to see that the funds are deployed – May waive match and program requirements? 40% of spending in 2009 90% completed through 2011

Four basic forms of stimulus: – Cheap or subsidized financing – Government (local) administered opportunities – Opportunities to sell goods and services – Direct grants

Is there anything in it for me?

Investing – Significant new/expanded ways to finance investments Size of investment Nature of investment Geographic location Size of business – Directed funds, especially for treatment plants or publicly owned facilities – Program based Smart energy Broadband Research and Development

28 Is there anything in it for me?

Projects already underway – E.g., can refinance using tax credits or bonds – Can free up capital Projects on hold – E.g., low/no Interest Revolving Loan Funds Decommissioning/plant closing – Neighborhood Stabilization Funds – Remember shutdown credits for air permits – Don’t leave Hazardous waste behind!

Related Issues to Consider

Capital investments in smart energy and efficiency could have unintended consequences, such as debottlenecking under Air Permits

Construction/Demolition could result in stormwater issues

National Environmental Policy Act (NEPA) and Prevailing Wage (Davis Bacon Act) will apply (in some fashion) to nearly all federally funded ARRA programs

29 Where to Look for Stimulus

http://www.recovery.gov – State sites – Agency sites Includes contracting opportunities http://www.grants.gov http://www.foley.com Beware the tight timeframes!!! Are you “shovel ready?”

How to Look for Stimulus

Respond Subscribe to http://www.grants.gov or http://www.recovery.gov and respond to opportunities? Or engage Consider how you would redefine, redeploy, reinvest resources Consider Obama administration priorities Define the business justification Ask the right people in and outside of government until you get an answer you like!

30 Questions & Answers

Upcoming Web Conferences

Please mark your calendars for the remaining sessions of the 2009 Environmental Law Update Web Conference Series, including a special edition from the 2009 National Directors Institute.

– April 1, 2009 Bringing Sustainability to the Bottom Line – June 18, 2009 – September 17, 2009

31 Contact Us

Linda E. Benfield Bruce A. Keyes Milwaukee, WI Milwaukee, WI 414.297.5825 414.297.5815 [email protected] [email protected]

Julie S. Solmer Stine Milwaukee, WI Richard G. Stoll 414.319.7311 Washington, DC 202.295.4021 [email protected] [email protected] Mark A. Thimke Milwaukee, WI 414.297.5832 [email protected]

Thank You!

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