Financial Responsibility Requirements Under CERCLA Section 108(b) for Facilities in the Chemical Manufacturing Industry, 10128-10146 [2020-03401]
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Federal Register / Vol. 85, No. 35 / Friday, February 21, 2020 / Proposed Rules
a subsequent final rule based on this
proposed rule. EPA will not institute a
second comment period. Any parties
interested in commenting on this action
should do so at this time. Please note
that if EPA receives adverse comment
on an amendment, paragraph, or section
of this rule and if that provision may be
severed from the remainder of the rule,
EPA may adopt as final those provisions
of the rule that are not the subject of an
adverse comment. For additional
information, see the direct final rule
which is located in the Rules section of
this Federal Register.
Dated: January 30, 2020.
Kurt A. Thiede,
Regional Administrator, Region 5.
[FR Doc. 2020–02818 Filed 2–20–20; 8:45 am]
BILLING CODE 6560–50–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 320
[EPA–HQ–OLEM–2019–0086; FRL–10005–
53–OLEM]
RIN 2050–AH05
Financial Responsibility Requirements
Under CERCLA Section 108(b) for
Facilities in the Chemical
Manufacturing Industry
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA or the Agency) is
proposing to not impose financial
responsibility requirements for facilities
in the Chemical Manufacturing industry
under Section 108(b) of the
Comprehensive Environmental
Response, Compensation, and Liability
Act (CERCLA). Section 108(b) addresses
the promulgation of regulations that
require classes of facilities to establish
and maintain evidence of financial
responsibility consistent with the degree
and duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.
SUMMARY:
Comments must be received on
or before April 21, 2020.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–HQ–
SFUND–2019–0086, at https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
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electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e., on the Web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: For
more information on this document,
contact Charlotte Mooney, U.S.
Environmental Protection Agency,
Office of Resource Conservation and
Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC
20460; telephone (703) 308–7025 or
(email) mooney.charlotte@epa.gov.
SUPPLEMENTARY INFORMATION:
How can I get copies of this document
and other related information?
This Federal Register proposed rule
and supporting documentation are
available in a docket EPA has
established for this action under Docket
ID No. EPA–HQ–OLEM–2019–0086. All
documents in the docket are listed in
the https://www.regulations.gov index.
Although listed in the index, some
information is not publicly available,
e.g., Confidential Business Information
(CBI) or other information whose
disclosure is restricted by statute.
Certain other material, such as
copyrighted material, will be publicly
available only in hard copy. Publicly
available docket materials are available
either electronically at https://
www.regulations.gov or in hard copy at
EPA/DC, WJC West, Room 3334, 1301
Constitution Ave. NW, Washington, DC
20460. This Docket Facility is open from
8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The
Docket Facility telephone number is
(202) 566–0276. The Public Reading
Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding
legal holidays. The telephone number
for the Public Reading Room is (202)
566–1744.
Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
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C. Summary of the Major Provisions of the
Regulatory Action
D. Costs and Benefits of the Regulatory
Action
II. Authority
III. Background Information
A. Overview of Section 108(b) and other
CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of
Facilities for Development of CERCLA
Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice
of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent
To Proceed With Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed
Rule
VI. Chemical Manufacturing Industry
Overview
A. Identification of Chemical
Manufacturing Industry
B. Overview of Current Industry Operation
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and
Voluntary Protective Industry Practices
at Facilities in the Chemical
Manufacturing Industry
C. Existing State and Federal Financial
Responsibility Programs
D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
A. Solicitation of Public Comment on This
Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act
(UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
J. National Technology Transfer and
Advancement Act
K. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive
Environmental Response,
Compensation, and Liability Act
(CERCLA) directs EPA to develop
regulations that require classes of
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facilities to establish and maintain
evidence of financial responsibility
consistent with the degree and duration
of risk associated with the production,
transportation, treatment, storage, or
disposal of hazardous substances. The
statute further requires that the level of
financial responsibility be established to
protect against the level of risk that the
President, in his discretion, believes is
appropriate, based on factors including
the payment experience of the
Hazardous Substance Superfund (Fund).
The President’s authority under this
section for non-transportation-related
facilities has been delegated to the EPA
Administrator.
This proposal is based on EPA’s
interpretation of the statute and analysis
of its record developed for this
rulemaking.1 EPA has analyzed the need
for financial responsibility based on risk
of taxpayer funded cleanups at facilities
in the Chemical Manufacturing Industry
operating under modern management
practices and modern environmental
regulations, i.e., the type of facilities to
which financial responsibility
regulations would apply.
That risk is identified by examining
the management of hazardous
substances at such facilities, as well as
by examining Federal and state
regulatory controls on that management
and Federal and state financial
responsibility requirements.
Based on that examination, EPA is
proposing that, in the context of
CERCLA section 108(b), the degree and
duration of risk associated with the
modern production, transportation,
treatment, storage or disposal of
hazardous substances by the Chemical
Manufacturing Industry does not
present a level of risk of taxpayer
funded response actions that warrant
imposition of financial responsibility
requirements for this sector.
In August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a lawsuit in
the U.S. Court of Appeals for the District
of Columbia Circuit, seeking a writ of
mandamus requiring issuance of
CERCLA Section 108(b) financial
responsibility rules for the hardrock
mining industry, and for the three
additional industries identified by EPA
in the 2010 Advance Notice of Proposed
Rulemaking (ANPRM),2 that is,
Chemical Manufacturing; Petroleum and
1 EPA’s interpretation of the statute was upheld
by the D.C. Circuit in Idaho Conservation League
v. Wheeler, No. 18–1141, slip op. at 9–12 (D.C. Cir.
July 19, 2019).
2 75 FR 816 (Jan. 6, 2010).
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Coal Products Manufacturing; and
Electric Power Generation,
Transmission, and Distribution.
Following oral arguments, EPA and the
petitioners submitted a Joint Motion for
an order on Consent, filed on August 31,
2015, which included a schedule for
further administrative proceedings
under CERCLA Section 108(b). The
court order granting the motion was
issued on January 29, 2016. A copy of
the order can be found in the docket for
this rulemaking.
In addition to requiring EPA to
publish a proposed rule on hardrock
mining financial requirements by
December 1, 2016, the January 2016
order required EPA to sign for
publication in the Federal Register a
determination whether EPA will issue a
notice of proposed rulemaking on
financial assurance requirements under
Section 108(b) in the (a) chemical
manufacturing industry; (b) petroleum
and coal products manufacturing
industry; and (c) electric power
generation, transmission, and
distribution industry by December 1,
2016. EPA signed the required
determination on December 1, 2016; the
notice was published on January 11,
2017 3 and announced EPA’s intent to
proceed with rulemakings for all three
of the classes.
B. Purpose of This Action
The purpose of this action is to
propose that financial responsibility
requirements under CERCLA Section
108(b) at facilities in the Chemical
Manufacturing industry are not
necessary and to solicit comments on
this proposal. EPA has reached this
conclusion based on the analyses
described in Parts VI and VII of this
proposal. The evidence provided in
these analyses contributed to EPA’s
proposed finding that the degree and
duration of risk posed by the Chemical
Manufacturing industry does not
warrant financial responsibility
requirements under CERCLA Section
108(b).
The analysis and proposed finding in
this proposal are not applicable to and
do not affect, limit, or restrict EPA’s
authority (1) to take a response action or
enforcement action under CERCLA with
respect to any facility in the Chemical
Manufacturing industry, including any
currently operating facilities or those
described in this proposal and in the
background documents for this
proposal, and (2) to include
requirements for financial responsibility
as part of such response action. The set
of facts in the rulemaking record related
3 82
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to the individual facilities discussed in
this proposed rulemaking support the
Agency’s proposal not to issue financial
responsibility requirements under
Section 108(b) for this class. At the same
time, a different set of facts could
demonstrate a need for a CERCLA
response action at an individual site.
This proposed rulemaking also does not
affect the Agency’s authority under
other authorities that may apply to
individual facilities, such as the Clean
Air Act (CAA), the Clean Water Act
(CWA), the Resource Conservation and
Recovery Act (RCRA), and the Toxic
Substances Control Act (TSCA).
C. Summary of the Major Provisions of
the Regulatory Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Chemical Manufacturing
industry. Thus, there are no proposed
regulatory provisions associated with
this action.
D. Costs and Benefits of the Regulatory
Action
EPA is proposing to not require
evidence of financial responsibility
under CERCLA Section 108(b) at
facilities in the Chemical Manufacturing
industry. EPA, therefore, has not
conducted a Regulatory Impact Analysis
for this action.
II. Authority
This proposed rule is issued under
the authority of Sections 101, 104, 108
and 115 of the Comprehensive
Environmental Response,
Compensation, and Liability Act of
1980, as amended, 42 U.S.C 9601, 9604,
9608 and 9615, and Executive Order
12580 (52 FR 2923, January 29, 1987).
III. Background Information
A. Overview of Section 108(b) and Other
CERCLA Provisions
CERCLA, as amended by the
Superfund Amendments and
Reauthorization Act of 1986 (SARA),
establishes a comprehensive
environmental response and cleanup
program. Generally, CERCLA authorizes
EPA 4 to undertake removal or remedial
actions in response to any release or
threatened release into the environment
of ‘‘hazardous substances’’ or, in some
circumstances, any other ‘‘pollutant or
4 Although Congress conferred the authority for
administering CERCLA on the President, most of
that authority has since been delegated to EPA. See
Exec. Order No. 12580, 52 FR 2923 (Jan. 23, 1987).
The executive order also delegates to other Federal
agencies specified CERCLA response authorities at
certain facilities under those agencies’ ‘‘jurisdiction,
custody or control.’’
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contaminant.’’ As defined in CERCLA
Section 101, removal actions include
actions to ‘‘prevent, minimize, or
mitigate damage to the public health or
welfare or to the environment,’’ and
remedial actions are ‘‘actions consistent
with [a] permanent remedy[.]’’ Remedial
and removal actions are jointly referred
to as ‘‘response actions.’’ CERCLA
Section 111 authorizes the use of the
Hazardous Substance Superfund
established under title 26, United States
Code, to finance response actions
undertaken by EPA. In addition,
CERCLA Section 106 gives EPA 5
authority to compel action by liable
parties in response to a release or
threatened release of a hazardous
substance that may pose an ‘‘imminent
and substantial endangerment’’ to
public health or welfare or the
environment.
CERCLA Section 107 imposes liability
for response costs on a variety of parties,
including certain past owners and
operators, current owners and operators,
and certain generators, arrangers, and
transporters of hazardous substances.
Such parties are liable for certain costs
and damages, including all costs of
removal or remedial action incurred by
the Federal Government, so long as the
costs incurred are ‘‘not inconsistent
with the national contingency plan’’
(the National Oil and Hazardous
Substances Pollution Contingency Plan
or NCP).6 Section 107 also imposes
liability for natural resource damages
and health assessment costs.7
Section 108(b) establishes authority to
require owners and operators of classes
of facilities to establish and maintain
evidence of financial responsibility.
Section 108(b)(1) directs EPA to develop
regulations requiring owners and
operators of facilities to establish
evidence of financial responsibility
‘‘consistent with the degree and
duration of risk associated with the
production, transportation, treatment,
storage, or disposal of hazardous
substances.’’ In turn, Section 108(b)(2)
directs that the level of financial
responsibility shall be initially
established, and, when necessary,
adjusted to protect against the level of
risk that EPA in its discretion believes
is appropriate based on the payment
experience of the Fund, commercial
insurers, court settlements and
judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not,
however, preclude EPA from
5 CERCLA Sections 106 authority is also
delegated to other Federal agencies in certain
circumstances. See Exec. Order No. 13016, 61 FR
45871 (Aug. 28, 1996).
6 CERCLA Section 107 (a)(4)(A).
7 CERCLA Section 107 (a)(4)(C)–(D).
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considering other factors in addition to
those specifically listed. The statute
prohibited promulgation of such
regulations before December 1985.
In addition, Section 108(b)(1)
provides for publication within three
years of the date of enactment of
CERCLA of a ‘‘priority notice’’
identifying the classes of facilities for
which EPA would first develop
financial responsibility requirements. It
also directs that priority in the
development of requirements shall be
accorded to those classes of facilities,
owners, and operators that present the
highest level of risk of injury.
B. History of Section 108(b)
Rulemakings
1. 2009 Identification of Priority Classes
of Facilities for Development of
CERCLA Section 108(b) Financial
Responsibility Requirements
On March 11, 2008, Sierra Club, Great
Basin Resource Watch, Amigos Bravos,
and Idaho Conservation League filed
suit in the U.S. District Court for the
Northern District of California against
then EPA Administrator Stephen
Johnson and then Secretary of the U.S.
Department of Transportation Mary E.
Peters. Sierra Club, et al. v. Johnson, No.
08–01409 (N. D. Cal.). On February 25,
2009, that court ordered EPA to publish
the Priority Notice required by CERCLA
Section 108(b)(1) later that year. The
2009 Priority Notice and supporting
documentation presented the Agency’s
conclusion that hardrock mining
facilities would be the first class of
facilities for which EPA would issue
CERCLA Section 108(b) requirements.8
Additionally, the 2009 Priority Notice
stated EPA’s view that classes of
facilities outside of the hardrock mining
industry may warrant the development
of financial responsibility
requirements.9 The Agency committed
to gather and analyze data on additional
classes of facilities and to consider them
for possible regulation. The court later
dismissed the remaining claims.
2. Additional Classes 2010 Advance
Notice of Proposed Rulemaking
On January 6, 2010, EPA published an
Advance Notice of Proposed
Rulemaking (ANPRM),10 in which the
Agency identified three additional
industrial sectors for the development,
as necessary, of proposed Section 108(b)
regulation. To develop the list of
additional classes for the 2010 ANPRM,
EPA used information from the CERCLA
National Priorities List (NPL) and
8 74
FR 37214 (July 28, 2009).
at 37218.
10 75 FR 816 (Jan. 6, 2010).
analyzed data from the RCRA Biennial
Report (BR) and the Toxics Release
Inventory (TRI).
EPA specifically requested public
comment in the 2010 ANPRM on
whether to propose a regulation under
CERCLA Section 108(b) for each of the
three industries, or any class or classes
within those industries, including
information demonstrating why such
financial responsibility requirements
would or would not be appropriate for
those particular classes. In addition, the
Agency requested information related to
the industry categories discussed in the
ANPRM, including data on facility
operations, information on past and
expected future environmental response
actions, use of financial responsibility
mechanisms by the industry categories,
existing financial responsibility
requirements, and other information the
Agency might consider in setting
financial responsibility levels. Finally,
EPA requested information from the
insurance and financial sectors related
to instrument availability and
implementation, and to potential
instrument conditions.11 Comments
received on the ANPRM are
summarized in the Additional Classes
2017 Notice of Intent to Proceed with
Rulemakings, section III.B.4 below.
3. 2014 Petition for Writ of Mandamus
In August 2014, the Idaho
Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin
Resource Watch, and Communities for a
Better Environment filed a new lawsuit
in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a
writ of mandamus requiring issuance of
CERCLA Section 108(b) financial
assurance rules for the hardrock mining
industry and for three other industries:
Chemical manufacturing; petroleum and
coal products manufacturing; and
electric power generation, transmission,
and distribution. Thirteen companies
and organizations representing business
interests in the hardrock mining and
other sectors sought to intervene in the
case.
Following oral argument, the court
issued an order in May 2015 requiring
the parties to submit, among other
things, supplemental submissions
addressing a schedule for further
administrative proceedings under
CERCLA Section 108(b). Petitioners and
EPA requested an order from the court
with a schedule calling for the Agency
to sign a proposed rule for the hardrock
mining industry by December 1, 2016,
and a final rule by December 1, 2017.
The joint motion also included a
9 Id.
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requested schedule for the additional
industry classes, which called for EPA
to sign by December 1, 2016, a
determination on whether EPA would
issue a notice of proposed rulemaking
for classes of facilities in any or all of
the other industries, and a schedule for
proposed and final rules for the
additional industry classes as follows:
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the first additional industry by
July 2, 2019, and sign for publication in the
Federal Register a notice of its final action
by December 2, 2020.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the second additional industry
by December 4, 2019, and sign for
publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the
Federal Register a notice of proposed
rulemaking in the third additional industry
by December 1, 2022, and sign for
publication in the Federal Register a notice
of its final action by December 4, 2024.12
While the joint motion identified the
three additional industries as the
Chemical Manufacturing industry, the
Petroleum and Coal Products
Manufacturing industry, and the
Electric Power Generation,
Transmission and Distribution industry,
and set a rulemaking schedule, the
motion did not indicate which industry
would be the first, second or third. The
Joint Motion specified that it did not
alter the Agency’s discretion as
provided by CERCLA and
administrative law.13
On January 29, 2016, the court
granted the joint motion and issued an
order that mirrored the submitted
schedule in substance. The order did
not mandate any specific outcome of the
rulemakings.14 The court order can be
found in the docket for this rulemaking.
The signing of this proposed rule by
December 1, 2022, will satisfy one
component of the court order.
4. Additional Classes 2017 Notice of
Intent To Proceed With Rulemakings
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Consistent with the January 2016
court order, EPA signed on December 1,
12 In Re: Idaho Conservation League, No. 14–1149
(D.C. Cir. Jan. 29, 2016) (order granting joint
motion).
13 See Joint Motion at 6 (‘‘Nothing in this Joint
Motion should be construed to limit or modify the
discretion accorded EPA by CERCLA or the general
principles of administrative law.’’)
14 In granting the Joint Motion, the court
expressly stated that its order ‘‘merely requires that
EPA conduct a rulemaking and then decide whether
to promulgate a new rule—the content of which is
not in any way dictated by the [order].’’ In re Idaho
Conservation League, at 17 (quoting Defenders of
Wildlife v. Perciasepe, 714 F.3d 1317, 1324 (D.C.
Cir. 2013).
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2016, a determination regarding
rulemakings for the additional classes—
a Notice of Intent to Proceed with
Rulemakings for all three of the classes.
The notice was published in the Federal
Register on January 11, 2017.15
The notice formally announced EPA’s
intention to move forward with the
regulatory process and to publish a
notice of proposed rulemaking for
classes of facilities within the three
industries identified in the 2010
ANPRM. The announcement in the
notice was not a determination that
requirements were necessary for any or
all of the classes of facilities within the
three industries, or that EPA would
propose such requirements. In addition,
the notice gave an overview of some of
the comments received on the 2010
ANPRM and initial responses to those
comments. The comments on the
ANPRM which specifically addressed
the need for CERCLA Section 108(b)
regulation for the three additional
classes fell into four categories: (1)
Other laws with which the industry
complies that obviate the need for
CERCLA Section 108(b) regulation; (2)
the sources of data that EPA used to
select the industries; (3) past versus
current practices within each industry;
and (4) the overall need for financial
responsibility for each industry. In
discussing the ANPRM comments in the
2017 notice, the Agency stated its intent
to use other, more industry-specific and
more current sources of data to identify
risk; to consider site factors that reduce
risks, including those that result from
compliance with other regulatory
requirements; and to develop a
regulatory proposal for each rulemaking.
At the time of the 2017 notice, EPA
had not identified sufficient evidence to
determine that the rulemaking process
was not warranted, nor had EPA
identified sufficient evidence to
establish CERCLA Section 108(b)
requirements. The notice described a
process to gather and analyze additional
information to support the Agency’s
ultimate decision, including further
evaluation of the classes of facilities
within the three industry sectors. The
notice stated that EPA would decide
whether proposing requirements was
necessary and, accordingly, that EPA
would propose appropriate
requirements or would propose not to
impose requirements.
15 82
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5. CERCLA Section 108(b) Proposal for
Facilities in the Electric Power
Generation, Transmission, and
Distribution Industry
On July 29, 2019, EPA published a
notice of proposed rulemaking on the
first of the three additional industries.
In that notice, the Agency proposed to
not impose financial responsibility
requirements for the Electric Power
Generation, Transmission, and
Distribution industry and described the
analyses and results that were used to
reach that decision. The court’s January
2016 order requires that a final action
on the first additional industry be
signed by December 2, 2020.16
IV. Statutory Interpretation
CERCLA Section 108(b) provides
general instructions on how to
determine what financial responsibility
requirements to impose for a particular
class of facility. Section 108(b)(1) directs
EPA to develop regulations requiring
owners and operators of facilities to
establish evidence of financial
responsibility ‘‘consistent with the
degree and duration of risk associated
with the production, transportation,
treatment, storage, or disposal of
hazardous substances.’’ Section
108(b)(2) directs that the ‘‘level of
financial responsibility shall be initially
established and, when necessary,
adjusted to protect against the level of
risk’’ that EPA ‘‘believes is appropriate
based on the payment experience of the
Fund, commercial insurers, courts
settlements and judgments, and
voluntary claims satisfaction.’’ EPA
interprets the risk to be addressed by
financial assurance under Section
108(b) to be the risk of the need for
taxpayer financed response actions.
Read together, the statutory language on
determining the degree and duration of
risk and on setting the level of financial
responsibility confers a significant
amount of discretion on EPA.
Section 108(b)(1) directs EPA to
evaluate risk from a selected class of
facilities, but it does not suggest that a
precise calculation of risk is either
necessary or feasible. Although the cost
of response associated with a particular
site can be ascertained only once a
response action is required, any
financial responsibility requirements
imposed under Section 108(b) would be
imposed before any such response
action was identified. The statute thus
necessarily confers on EPA wide
latitude to determine, in a Section
108(b) rulemaking proceeding, what
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degree and duration of risk are
presented by the identified class.
Section 108(b)(2) in turn directs that
EPA establish the level of financial
responsibility that EPA in its discretion
believes is appropriate to protect against
the risk. This statutory direction does
not specify a methodology for the
evaluation. Rather, this decision is
committed to the discretion of the EPA
Administrator. While the statute
provides a list of information sources on
which EPA is to base its decision—the
payment experience of the Superfund,
commercial insurers, courts settlements
and judgments, and voluntary claims
satisfaction—the statute does not
indicate that this list of factors is
exclusive, nor does it specify how the
information from these sources is to be
used, such as by indicating how these
categories are to be weighted relative to
one another.
EPA believes that sections 108(b)(1)
and (b)(2) are sufficiently interrelated
that it is appropriate to evaluate the
degree and duration of risk under
subsection (b)(1) by considering the
factors enumerated in subsection (b)(2).
EPA therefore concludes that Congress
intended the risk associated with a
particular class of facilities to mean the
risk of future Fund-financed cleanup
actions in that industry. This reading is
supported by the structure of the statute,
as Section 108(b) appears between two
provisions related to cost recovery.
Section 108(a), concerning financial
assurance requirements for certain
vessels, refers specifically to cleanup
costs. And Section 108(c), concerning
recovery of costs from guarantors who
provide the financial responsibility
instruments, refers specifically to
liability for cleanup costs. EPA thus
reads ‘‘risk’’ in Section 108(b) consistent
with its meaning in sections 108(a) and
(c); that is, the risk of Fund-financed
cleanup. EPA adopted this
interpretation in assessing the need for
financial responsibility requirements
under CERCLA Section 108(b) for
facilities in the first class of facilities it
evaluated: The Hardrock Mining
industry.17 In its opinion deciding the
challenge to the Final Action for the
Hardrock Mining industry, the U.S.
Court of Appeals for the District of
Columbia Circuit held that EPA’s
interpretation that the provisions of
Section 108(b) ‘‘relate only to ensuring
against financial risks associated with
cleanup costs,’’ is reasonable and
entitled to deference.18
17 83
FR 7556, 7561–62 (Feb. 21, 2018).
18 Idaho Conservation League v. Wheeler, No. 18–
1141, slip op. at 12 (D.C. Cir. July 19, 2019).
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For the Chemical Manufacturing
industry, EPA has investigated the
payment history of the Fund, and
enforcement settlements and judgments,
to evaluate, in the context of this
CERCLA Section 108(b) rulemaking, the
risk of a Fund-financed response action
at facilities that would be subject to
CERCLA financial responsibility
requirements. The statute also
authorizes EPA to consider the
existence of Federal and state regulatory
requirements, including any financial
responsibility requirements. Section
108(b)(1) directs EPA to promulgate
financial responsibility requirements
‘‘in addition to those under subtitle C of
the Solid Waste Disposal Act and other
Federal law.’’ According to the 1980
Senate Report on legislation that was
later enacted as CERCLA, Congress
considered it appropriate for EPA to
examine those additional requirements
when evaluating the degree and
duration of risk under what was later
enacted as CERCLA Section 108(b):
The bill requires also that facilities
maintain evidence of financial responsibility
consistent with the degree and duration of
risks associated with the production,
transportation, treatment, storage, and
disposal of hazardous substances. These
requirements are in addition to the financial
responsibility requirements promulgated
under the authority of Section 3004(6) of the
Solid Waste Disposal Act. It is not the
intention of the Committee that operators of
facilities covered by Section 3004(6) of that
Act be subject to two financial responsibility
requirements for the same dangers.19
While the Senate Report mentions
RCRA Section 3004(6) specifically, it is
consistent with congressional intent for
EPA to consider other potentially
duplicative Federal financial
responsibility requirements when
examining the ‘‘degree and duration of
risk’’ in the context of CERCLA Section
108(b) to determine whether and what
financial responsibility requirements are
appropriate. It is also consistent with
congressional intent for EPA to consider
state laws before imposing additional
Federal financial responsibility
requirements.
Consideration of state laws before
developing financial responsibility
regulations is consistent with CERCLA
Section 114(d), which prevents states
from imposing financial responsibility
requirements for liability for releases of
the same hazardous substances after a
facility is regulated under Section 108 of
CERCLA. Just as Congress intended to
prevent states from imposing
duplicative financial assurance
requirements after EPA had acted to
19 S.
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impose such requirements under
Section 108, it is reasonable to also
conclude that Congress did not mean for
EPA to disrupt existing state programs
that are successfully regulating
industrial operations to minimize risk,
including the risk of taxpayer liability
for response actions under CERCLA,
and that specifically include
appropriate financial assurance
requirements under state law. Reviews
of both state programs and other Federal
programs help to identify whether and
at what level there is current risk that
is appropriate to address under CERCLA
Section 108.
EPA also believes that, when
evaluating whether and at what level it
is appropriate to require evidence of
financial responsibility, EPA should
examine information on Chemical
Manufacturing facilities operating under
modern conditions. In other words, EPA
should assess the types of facilities to
which any new financial responsibility
regulations would apply. Financial
responsibility requirements under
Section 108(b) would not apply to
legacy operations that are no longer
operating. Rather, any requirements
would apply to facilities that follow
current industry practices and are
subject to the modern regulatory
framework (i.e., the regulations
currently in place that apply to this
industry). These modern conditions
include state and Federal regulatory
requirements and financial
responsibility requirements that
currently apply to operating facilities.
This reading of Section 108(b) is
consistent with statements in the
legislative history of the statute.
The1980 Senate Report states that the
legislative language that became Section
108(b) ‘‘requires those engaged in
businesses involving hazardous
substances to maintain evidence of
financial responsibility commensurate
with the risk which they present.’’ 20
This approach is also consistent with
the analysis that EPA undertook, in
developing its Final Action on Financial
Responsibility Requirements Under
CERCLA Section 108(b) for Classes of
Facilities in the Hardrock Mining
Industry.21 EPA’s approach was recently
upheld by the U.S. Court of Appeals for
the District of Columbia Circuit.22
This statutory interpretation is
reflected in today’s proposal. Any
financial responsibility requirements
imposed under Section 108(b) would
apply to currently operating facilities.
20 S.
Rept. 96–848 (2d Sess, 96th Cong.), at 92.
FR 7556 (Feb. 21, 2018).
22 Idaho Conservation League v. Wheeler, No. 18–
1141 (D.C. Cir. July 19, 2019).
21 83
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EPA thus sought to examine the extent
to which hazardous substance
management at currently operating
Chemical Manufacturing facilities as a
class continues to present risk.
Moreover, the statutory direction to
identify requirements consistent with
identified risks guides EPA’s
interpretation that imposition of
financial responsibility requirements
under Section 108(b) would not be
necessary for currently operating
facilities that present minimal current
risk of a Fund-financed response action.
The interpretation in this proposal does
not extend to any site-specific
determinations of risk made in the
context of individual CERCLA site
responses. Those decisions will
continue to be made in accordance with
preexisting procedures.
EPA thus examined records of
releases of hazardous substances from
facilities operating under a current
regulatory framework and data on the
actions taken and expenditures incurred
in response to such releases. The data
collected do not reflect historical
practices, many of which would be
illegal under current environmental
laws and regulations. Instead, EPA has
considered current Federal and state
regulation of hazardous substance
production, transportation, treatment,
storage, or disposal applicable to
facilities in the Chemical Manufacturing
industry.
V. Approach To Developing This
Proposed Rule
Based on the statutory interpretation
described above, EPA developed an
analytical approach to determine
whether the current risk under the
modern regulatory framework within
the Chemical Manufacturing industry
rises to the level that warrants
imposition of financial responsibility
requirements under CERCLA Section
108(b). Specifically, EPA designed the
analytical approach to determine the
need for financial responsibility for this
industry based on the degree and
duration of risk of a Fund-financed
response action associated with the
industry’s production, transportation,
treatment, storage, or disposal of
hazardous substances.
The approach, described in detail
below, looks at risks by examining
records of releases of hazardous
substances from facilities in the
industry in combination with the
payment history of the Fund and
enforcement settlements and judgments.
To enable EPA to base its decision on
risk posed by facilities operating under
modern conditions, i.e., the types of
facilities to which financial
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responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices.
EPA sought to determine the level of
risk of a Fund-financed response action
at current Chemical Manufacturing
operations. Relevant to this decision are
requirements of existing regulatory
programs and voluntary practices,
including existing financial
responsibility requirements, which can
reduce costs to the taxpayer; EPA’s
experience with cleanups in the
Chemical Manufacturing industry; and
enforcement actions, which may reduce
the need for Federally-financed
response action at facilities in the
Chemical Manufacturing industry.
As part of scoping the Chemical
Manufacturing industry for this
proposal, EPA sought to understand
general characteristics of the industry
that may be relevant to financial
responsibility under Section 108(b). To
do this, EPA compiled industry features,
including the types of activities
undertaken and wastes handled or
produced. Additionally, EPA looked at
the financial condition of the industry
to assess the ability of facilities in this
class to pay for any environmental
obligations they may incur. Discussion
of these aspects of the industry is
included in section VI of this proposal.
Section VII.A describes EPA’s
evaluation of cleanup cases at facilities
in the Chemical Manufacturing
industry. So-called ‘‘cleanup cases’’ are
sites in the Chemical Manufacturing
industry where releases and cleanup
actions occurred. To perform this
evaluation EPA developed an analytic
approach that considered cleanup cases
to identify risk at currently operating
facilities and where taxpayer funds were
expended for response action. EPA first
examined each site to determine the
nature and timing of release. EPA used
this information to determine if releases
occurred under current regulations. As
an initial screen, releases that occurred
prior to 1980 were deemed to be legacy
releases that occurred before the advent
of the modern environmental regulatory
framework and were therefore screened
out of our analysis. Once EPA identified
those sites with more recent releases
occurring under a modern regulatory
framework, EPA then focused on those
response actions that were paid for by
the taxpayer by looking at those sites
with Fund-financed cleanup activity.
As described in section VII.B, to
understand the modern regulatory
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10133
framework applicable to currently
operating facilities within the Chemical
Manufacturing industry, EPA compiled
applicable Federal and state regulations.
Specifically, EPA looked to regulations
that address the types of releases
identified in the cleanup cases. This
review also considered industry
voluntary programs that could reduce
risk of releases. EPA also identified
financial responsibility regulations that
apply to facilities in the Chemical
Manufacturing industry in section VII.C,
and compliance and enforcement
history for the relevant regulations in
section VII.D.
EPA considered payments from
commercial insurers as well but
determined that it was not necessary to
conduct a detailed analysis of this
potential information source in light of
the analyses of cleanup cases and
enforcement data. The cleanup cases
and enforcement data, in addition to
addressing the payment experience of
the Fund, court settlements and
judgments, and voluntary claims
satisfaction, also encompasses amounts
from commercial insurance payments.
For example, at three of the Chemicals
Manufacturing NPL sites identified and
reviewed, EPA recovered funds from a
commercial insurer that had issued a
policy to a potentially responsible party
(PRP) that was a liable party at all three
sites. Furthermore, payments from
commercial insurers may have helped
finance the work conducted by PRPs in
the cleanup cases identified or may
have been included in settlements,
judgments, or enforcement cases
identified by EPA. However, in the
event there were significant payments
from commercial insurers associated
with facilities in the Chemical
Manufacturing industry that were not
already indirectly captured, this
information would neither indicate
greater risk to the Fund nor suggest a
need for financial responsibility
requirements under CERCLA Section
108(b).
In considering how to structure its
analysis and what data sources to
examine, EPA reviewed prior analysis
done for selection of industry classes in
the 2010 ANPRM and public comments
responding to EPA’s approach. In the
public comment period for the ANPRM,
EPA received a total of 67 comments
from 30 commenters on the Chemical
Manufacturing industry, Petroleum and
Coal Products Manufacturing industry,
and the Electric Power Generation,
Transmission, and Distribution
industry. In addition, EPA received five
comments to the Hardrock Mining
Proposed Rule that were related to the
additional classes of facilities.
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EPA received comments from the
American Chemistry Council and the
Society of Chemical Manufacturers and
Affiliates, among others. Commenters
indicated that EPA should concentrate
on current practices and not legacy
contamination. Commenters also said
that EPA should not impose financial
responsibility requirements on facilities
that are already subject to other Federal
laws. Lastly, many commenters believe
that EPA placed too much emphasis on
TRI data and RCRA BR data and
expressed their opinions that these data
sources are not designed or intended to
provide risk-based information.
In its 2017 Notice of Intent to Proceed
with Rulemakings 23 EPA acknowledged
limitations on information that can be
gained from TRI and BR data and
announced its intention to use industryspecific and current sources of data to
identify risk for the purposes of the
rulemakings. EPA also analyzed those
limitations in the final action for the
Hardrock Mining rule.24 Accordingly, in
the analysis conducted to assess risk in
the Chemical Manufacturing industry
for this action, EPA chose not to rely on
TRI and BR data. While, at the time of
the 2010 ANPRM, the Agency found
those data sources appropriate for
identifying classes of facilities to
examine further, the Agency does not
find the data sources valuable for
assessing current risk of a Fundfinanced response action in the
industry.
VI. Chemical Manufacturing Industry
Overview
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A. Identification of Chemical
Manufacturing Industry
For this proposal and the associated
analyses, EPA reviewed facilities
classified under the North American
Industry Classification System (NAICS)
code 325. The most recent available
census data lists the size of the industry
at 13,480 establishments nationally.25
Chemical Manufacturing facilities
transform raw materials (e.g., oil,
natural gas, water, minerals, metals) into
tens of thousands of different products,
including pigments, synthetic fibers,
bulk chemicals, plastics,
pharmaceuticals, and consumer goods,
as well as produce inputs to agriculture,
manufacturing, and construction
industries.
23 82
FR 3512 (Jan. 11, 2017).
FR 7570 (Feb. 21, 2018).
25 2016 Economic Census of the United States,
NAICS 325.
24 83
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B. Overview of Current Industry
Operation
As discussed in the approach section,
to provide a backdrop for its analyses,
EPA reviewed, and characterizes here,
the operation of the chemical
manufacturing industry from a broad
perspective. Operational and
decommissioning practices in industrial
sectors and their associated firms can
ultimately affect the ability of
individual firms to responsibly
minimize their impact on human health
and the environment. Commodity
chemical manufacturers create products
in large quantities under continuous
processing conditions, generally in large
volumes in response to homogenous
specifications. Specialty-batch chemical
manufacturers develop products for
focused markets, making complex
products in small quantities that are
then processed into higher value-added
products. These manufacturers change
their process lines several times a year,
providing more opportunities for
environmental improvements but also
making environmental compliance more
complicated. To consider the potential
for releases as part of its decision
making, EPA prepared a high-level
review of industry practices and the
environmental profile of the Chemical
Manufacturing industry, which includes
a summary of relevant operational and
decommissioning materials and wastes
in a background document, which is
available in the docket for this
rulemaking.26
Potentially hazardous materials are
frequently used in this industry. These
materials can include a large variety of
chemicals and compounds. The many
different processes used in the Chemical
Manufacturing industry result in many
different wastes. Typical wastes from
Chemical Manufacturing facilities can
include, for example, spent solvents,
distillation bottoms and side-cuts, offspecification and unused chemicals,
wastewater, wastewater treatment
sludge, emission control sludges, filter
cake, spent catalysts, byproducts,
reactor cleanout wastes, and container
residues. Chemical Manufacturing
facilities typically handle large volumes
of chemicals using above and below
ground bulk storage tanks, transfer
equipment, process piping, and raw
material/final product storage areas. Due
to the nature of this industry, it is not
surprising that it generates high
volumes of hazardous waste.27
26 Chemical Manufacturing Industry Practices
and Environmental Characterization.
27 According to the 2017 Hazardous Waste
Report, facilities in this sector reported the
generation of 21.7 million tons of hazardous waste.
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Some wastes may be found on site in
surface impoundments, bulk storage
tanks, waste piles, and disposal pits. All
these areas may contribute to soil and
groundwater contamination.
Decommissioning wastes can include all
the chemicals and substances listed
above, as well as contaminated soil and
building materials, sludges,
neutralization liquids, and cleaning
solvents. If such wastes are hazardous,
then they must be managed in
accordance with RCRA regulations.
Industry practices in certain
subsectors of the Chemical
Manufacturing industry, including All
Other Basic Organic Chemical
Manufacturing (325199), Other Basic
Inorganic Chemical Manufacturing
(325180), Cyclic Crude, Intermediate,
and Gum and Wood Chemical
Manufacturing (325194), and Synthetic
Dye and Pigment Manufacturing
(325130), use more hazardous
substances and generate larger volumes
of hazardous waste. Several sectors use
fewer hazardous substances and
generate lower amounts of hazardous
waste, including Custom Compounding
of Purchased Resins (325991), Printing
Ink Manufacturing (325910), Polish and
other Sanitation Good Manufacturing
(325612), Phosphatic Fertilizer
Manufacturing (325312), and Ethyl
Alcohol Manufacturing (325193).
Further information on industry
practices is provided in the background
document for this section, which is
available in the docket for this
rulemaking.28
Sites contaminated by the industry
contain a wide variety of contaminants,
including but not limited to toxic
organics, such as benzene,
polychlorinated biphenyls (PCBs),
phenol, and volatile organic
hydrocarbons (VOCs); chemical
substances, such as
benzo(b)fluoranthene, carbon
tetrachloride, methyl methacrylate,
methylene chloride, nitroglycerin,
phosphoric acid, and sodium
hypochlorite; and metals, such as
arsenic, barium, cadmium, chromium,
iron, lead, manganese, mercury,
thorium, and zinc.
Facilities in the Chemical
Manufacturing industry are subject to a
wide range of environmental regulation
and enforcement oversight as discussed
in Sections VII.B and VII.D below, and
have adopted voluntary practices that
can be effective at reducing pollution, as
discussed in Section VII C.
https://rcrapublic.epa.gov/rcrainfoweb/action/
modules/br/naics.
28 Chemical Manufacturing Industry Practices
and Environmental Characterization.
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C. Industry Economic Profile
Economic trends and financial health
in industrial sectors and their associated
firms can ultimately affect the ability of
individual firms to responsibly address
their environmental liabilities.
Circumstances in which firms face
financial stress can potentially
contribute to the abandonment of
facilities and the creation of orphan
waste sites requiring cleanup. To
consider the potential for firms to
default on their financial obligations,
EPA prepared a high-level economic
profile of the Chemical Manufacturing
industry, which includes a summary of
relevant financial metrics, industry
default statistics and trends, and a broad
discussion outlining environmental
liabilities under Chapter 11 of the
Bankruptcy Code. This analysis,
summarized in this section, looked at
the industry as a whole and additionally
focused on four subsectors individually,
providing an industry profile,
evaluation of the potential universe of
regulated entities, and discussion of the
subsectors’ financial health and relative
volatility. The full analysis is found in
the background document for this
section, and is available in the docket
for this rulemaking.29
Generally, this analysis found the
sector to be financially stable and able
to pay off short-term obligations, though
some subsectors experienced declining
profitability and increased risk in recent
years. Overall, financial ratios indicate
healthy financial performance, despite
an overall decrease in the total value of
shipments and receipts for services in
the sector. The report also notes that
firms generally remain liable for
environmental compliance obligations
under Chapter 11 debt restructuring.
Sections 101(5) and 1141(d) of the
Bankruptcy Code only provide for a
discharge of monetary rights to payment
and not for compliance obligations
where the Federal government has not
sought the payment of money.
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VII. Discussion of Cleanup Sites
Analysis
A. Cleanup Site Evaluations
As described in the Approach to
Developing the Proposed Rule, Section
V above, to evaluate the need for
financial responsibility regulations in
the Chemical Manufacturing industry,
EPA sought examples of pollution that
occurred under a modern regulatory
framework, and that required a
taxpayer-funded CERCLA cleanup. In its
evaluation, EPA focused first on
29 CERCLA 108(b) Economic Sector Profile:
Chemical Manufacturing Industry.
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identifying response actions at
Superfund National Priorities List (NPL)
sites and sites using the Superfund
Alternative Approach (SAA),30 as those
are generally larger cleanups both in
terms of amounts of contaminants
removed and in terms of costs to carry
out these cleanups. EPA also looked at
Superfund removals at non-NPL sites.
To identify the relevant cleanup cases
in the Chemical Manufacturing
industry, EPA included the NPL sites
already identified in the 2010
ANPRM,31 and supplemented the
dataset with additional NPL sites that
had been identified since the ANPRM,
sites using the SAA, and non-NPL sites
identified in EPA’s Superfund
Enterprise Management System (SEMS)
database. EPA collected information on
the timing and nature of releases or
threatened releases at these sites.
Specifically, EPA sought to identify, as
applicable, facility operation end dates,
release dates, sources of contamination,
NPL proposal dates, contaminated
media, type of contaminant, cleanup
lead, and information on Superfund
expenditures at the site, as well as other
information. For this collection, EPA
relied on information previously
collected as part of the ANPRM,
information available in Superfund site
documents (e.g., NPL listing narratives,
Records of Decision, Action Memos,
Five-Year Reviews), and information in
EPA’s SEMS as of March 2018. The
cleanup case identification and site
information collection processes are
described in greater detail in the
relevant background documents, which
are available in the docket for this
rulemaking.32
After compiling information about the
risks and history of each site, EPA
sought to identify instances in which
releases occurred under the modern
regulatory framework that resulted in
Fund-financed response actions. To do
so, EPA’s methodology applied
sequenced screens to the identified
sites. EPA first screened out any NPL
sites or sites using the SAA where the
30 The Superfund Alternative Approach (SAA)
uses the same CERCLA authority and investigation
and cleanup process and standards that are used for
NPL sites. The threshold criteria for using the SAA
are: (1) The site must have contamination
significant enough to make it eligible for listing on
the NPL; (2) the site is anticipated to need remedial
action; and, (3) there must be a cooperative, viable,
capable PRP that will sign a CERCLA agreement
with EPA to perform the necessary cleanup.
31 75 FR 816 (Jan. 6, 2010).
32 Identification and Evaluation of National
Priorities List (NPL) Sites and Sites using the
Superfund Alternative Approach (SAA) Cleanup
Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b)
Chemical Manufacturing Industry non-National
Priorities List (NPL) Removal Sites.
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contaminant release or cleanup activity
occurred before 1980. EPA chose 1980
as the cutoff point to initially screen out
legacy contamination because it was the
year when CERCLA was enacted, as
well as the date of the initial regulations
under RCRA Subtitle C governing the
generation, treatment, storage, and
disposal of hazardous waste. EPA chose
to give these significant RCRA and
CERCLA milestones greatest
consideration due to the large number of
issues of waste management, land
disposal, and soil contamination
identified in the review of the NPL and
SAA cases. EPA believes the 1980 cutoff
date is a conservative screen (i.e., retains
more sites in the analysis) in that only
the initial RCRA regulations were in
place in 1980 and they were refined,
expanded and enhanced several times
over the next decades. Moreover, the
Agency’s enforcement authorities
expanded in the 1980s as the RCRA
program matured. Notably, the passage
of the Hazardous and Solid Waste
Amendments (HSWA) in 1984 resulted
in many regulatory changes and
enhanced enforcement mechanisms.
More specifically, HSWA created the
Land Disposal Restrictions (LDR)
program, codified in 40 CFR part 268,
which prohibits the land disposal of
untreated hazardous wastes. HSWA also
substantially expanded corrective action
authorities for both permitted RCRA
treatment, storage and disposal (TSD)
facilities and facilities operating under
interim status,33 requiring facilities to
address the release of hazardous wastes
and demonstrate financial responsibility
for completing the required corrective
actions, further reducing the risks that
sites would have to be addressed under
CERCLA. For further detail on these
requirements, see section VII. B below.
Next, EPA sought to remove from the
analysis sites where significant Fund
expenditures had not occurred, because
response actions that were paid for by
private parties do not support the need
for CERCLA Section 108(b) financial
responsibility regulations. Using the
‘‘Action Lead’’ field in SEMS associated
with each site, EPA screened out the
potentially responsible party (PRP) lead
sites. This left only the Mixed Lead
Construction or Government Performed
Construction sites in the analysis, under
the assumption that PRP Performed
33 Interim status facilities are facilities that were
in existence on the effective date of the regulations
and subject to the requirement to have a RCRA
permit.
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Construction 34 sites did not present
significant expenses to the Fund.
EPA then reviewed the remaining
sites (i.e., those with both pollution
dates of 1980 or later and Mixed Lead
Construction or Government Performed
Construction designation in SEMS)
individually in greater detail.
Specifically, EPA considered the site
history and each of the contamination
sources at the site in the context of the
regulations that would be applicable to
that facility today. More information on
the regulations EPA considered is
available in Section VII.B.
Findings from EPA’s analysis of the
cleanup cases are discussed below, with
more detailed information available in
background documents available in the
docket for this rulemaking.35 These
background documents provide the list
of sites identified and remaining at each
stage of the analysis, as well as the
information considered in the screening
and review process.
Using the data sources described
above for the Chemical Manufacturing
industry, EPA identified 199 NPL sites
and eight sites using the SAA, as well
as 290 non-NPL CERCLA removal action
sites,36 to evaluate according to the
methodology described above. As
explained further below, the majority of
the contamination at NPL sites and sites
using the SAA were ultimately
considered to involve releases that
occurred before the modern regulatory
framework or they were cases where no
taxpayer funds were used. Similarly, for
the removal sites, the majority of cases,
albeit to a lesser extent as compared to
NPLs, showed no releases of hazardous
substances under the modern regulatory
framework or required minimal or no
taxpayer-funded cleanups, as described
below.
The 199 NPL sites and eight sites
using the SAA that were evaluated
include different industry groups within
the Chemical Manufacturing sector.
While multiple manufacturing activities
can occur at a site, facilities that were
engaged in manufacturing pesticides,
fertilizers, and agricultural chemicals
show up more prevalently on the
34 These terms are used in the SEMS database to
identify the party that had primary responsibility
for construction at the sites.
35 Identification and Evaluation of National
Priorities List (NPL) Sites and sites using the
Superfund Alternative Approach (SAA) Cleanup
Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b)
Chemical Manufacturing non-National Priorities
List (NPL) Removal Sites.
36 None of these 290 removal sites are associated
with an NPL site. Removal actions that have taken
place at NPL sites or sites using the SAA, either
before or after listing or designation, are tracked in
SEMS as NPL or SAA level actions and not as
separate removal records.
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Chemical Manufacturing NPL list (about
42%), closely followed by facilities
engaged in basic Chemical
Manufacturing (about 39%). Other
manufacturing activities observed to a
lesser extent include resin, synthetic
rubber, and artificial synthetic fibers
and filaments manufacturing, paint,
coating, and adhesive manufacturing,
and ‘‘other’’ types of Chemical
Manufacturing activities.
A review of the history of
environmental contamination at these
NPL and NPL-like sites revealed that the
most common types of environmental
damage were contamination of soil and
ground water (approximately 90%),
while impacts to surface water bodies
were also relatively common (nearly
60%). To a lesser extent, impact to air
and sediments were also observed. The
primary source of the contamination
was contaminated soils (approximately
62% of sites) that resulted from
inappropriate waste and material
handling, leaks and spills, fires and
explosions, lack of stormwater
management, and poor housekeeping
practices. Other significant sources
include disposal into unlined ponds
and wastewater lagoons (approximately
40%) 37 and the abandonment of
hazardous waste and materials in drums
and other containers (approximately
32%).38 Detailed discussions of the
impacted media and sources of
contamination identified at these NPL
and NPL-like sites are presented in
supporting technical background
documents, which are available in the
docket for this rulemaking.39
After characterizing the industrial
activities and contamination history at
these sites, EPA applied the screens
described above to remove PRPPerformed Construction sites and sites
where the environmental releases
occurred pre-1980 to the 199 NPL sites
and the eight sites using the SAA
approach. Based on these criteria, EPA
screened out 127 sites. Additionally,
EPA also excluded 46 sites from the
analysis where, upon further review, the
industrial activities were found to fall
outside of the relevant class of facilities
under consideration in this rulemaking.
Thirty-four NPL sites remained after
those screens that were either
37 The regulations covering management of
hazardous waste in surface impoundments are in 40
CFR part 264/265 Subpart K. Also see discussion
in Section VII.B of this notice.
38 The regulations covering management of
hazardous waste in containers are in 40 CFR part
264/265 Subpart I. Also see discussion in Section
VII.B of this notice.
39 Identification and Evaluation of National
Priorities List (NPL) Sites and Sites using the
Superfund Alternative Approach (SAA)in the
Chemical Manufacturing Industry.
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Government Performed Construction or
Mixed Lead Construction (i.e., a
combination of Government and PRP)
sites and had releases that arose in 1980
or later. None of the sites using SAA
remained after those screens.
To assess the remaining 34 sites, EPA
first conducted a detailed review to
compare the environmental issues (e.g.
contamination) at the sites against the
regulations applicable today. Based on
the detailed review, EPA concluded that
notwithstanding the screens applied at
earlier stages of the analysis, the
releases at 30 of the 34 NPL sites
resulted largely from legacy practices
and contamination. An example of such
a case is Baird & McGuire Inc., a 20-acre
facility in Holbrook, Massachusetts, that
operated as a chemicals manufacturing
and batching company from 1912 to
1983. EPA did not initially screen out
the site because case files on this site
showed documented discharges of black
oily substances into a nearby wetland
between 1981 and 1982. Despite these
releases, EPA concluded that the most
significant contamination at the site
occurred largely from legacy waste
disposal practices (included direct
discharge into the soil, lagoons, and
wetlands) and improper storage of
chemicals during the 70 years of
operation that began in 1912. Because of
these practices, on-site soil, ground
water, surface water, and municipal
water supplies were contaminated,
which prompted EPA to list the site on
the NPL in 1983. When these disposal
practices were assessed against today’s
modern regulatory framework, the
releases were all found to have occurred
before the promulgation of RCRA
Subtitle C regulations. Moreover,
enforcement records further corroborate
the presence of significant compliance
issues at this site before 1980, as the
owner and operator had been fined at
least 35 times between 1954 and 1977
by various state and Federal agencies for
numerous violations.40 For discharges
of oily substances into wetlands
identified post-1980s, EPA’s case file
also showed Baird & McGuire had
voluntarily taken actions, including
removing the discharge pipes and
applying absorbent pads to the wetland
to soak up the oil. Appendix 4 of the
background document provides more
detailed discussions on this site and the
29 other NPL sites that EPA deemed as
legacy issues after the detailed
reviews.41
40 The NPL Site Narrative for Baird & McGuire,
https://cumulis.epa.gov/supercpad/SiteProfiles/
index.cfm?fuseaction=second.Cleanup&id=
0100392#bkground.
41 Identification and Evaluation of National
Priorities List (NPL) Sites and Sites using the
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Regarding the four out of the 34 NPL
sites that remained after the screens,
EPA’s detailed review indicated that
these sites appeared to have significant
releases or threatened releases of
hazardous substances under the modern
regulatory framework and required
significant taxpayer-funded cleanups.
The four sites are Diaz Chemical
Corporation in Holley, New York
(which operated from 1974 through
2002), Eldorado Chemical Company in
Live Oak, Texas (which operated from
1978 through 2007), Mississippi
Phosphates Corporation in Pascagoula,
Mississippi (which operated from the
1950s through 2014), and White
Chemical Corporation in Newark, New
Jersey (which operated from 1983
through 1990).
In all four cases, the facilities had a
long history of compliance issues and
were cited numerous times for
violations under various statutes,
including CAA, CWA, and RCRA. At
three of the four sites (Diaz Chemical,
Mississippi Phosphates, and White
Chemical Corp.), companies filed for
bankruptcy before ceasing operations
and abandoning their sites. EPA listed
three of the four sites (Diaz Chemical,
Eldorado Chemical, and Mississippi
Phosphates) on the NPL post-2000.
In the cases of Diaz Chemical,
Eldorado Chemical Company, and
White Chemical Corp., poor
housekeeping practices, spills, and
improper handling of drums resulted in
the release of a range of chemical
substances to the air, water, soil, and
ground water. In addition, when Diaz
and White Chemical Corp. filed for
bankruptcy and abandoned their
facilities, the owner and operators left
behind hundreds of hazardous drums
and tanks containing hazardous
chemicals and waste. These releases or
threatened releases occurred at these
sites despite the promulgation and
implementation of applicable RCRA
Subtitle C regulations in 1980 and
HSWA in 1984. Evaluation of EPA’s
Fund expenditure data for these sites
showed the Fund incurred over $28
million to address site contamination at
Diaz Chemical and $47 million at White
Chemical Company. Fund expenditures
at Eldorado Chemical were relatively
small at $568,000; however, the site was
just listed on the NPL in 2016, and Fund
expenditures at the site will likely
continue.
Regarding Mississippi Phosphates, the
plant ceased its operations in December
2014 following a bankruptcy. When the
company abandoned the site, more than
700 million gallons of low-pH,
contaminated wastewater was left
behind in on-site ponds. Enforcement
records also showed that during its
years of operation, the facility received
numerous Administrative Orders and
Notices of Violation related to
noncompliance with its National
Pollutant Discharge Elimination System
(NPDES) permit. The most severe
violation occurred in August 2013,
when the facility released 38 Mgal of
acidic water to Bayou Casotte, killing an
estimated 47,000 fish, and resulting in
the company’s entering a guilty plea to
a criminal violation of the Clean Water
Act. More information on this case is in
the enforcement background document,
which is available in the docket.42
EPA’s review of Fund expenditures
showed significant Fund expenditures
at Mississippi Phosphates. Based on the
limited expenditure data obtained from
Superfund’s Integrated Financial
Management System (IFMS) database,
EPA has spent $8.3 million as of Fall
2018. However, in an April 2018 Action
Memorandum,43 EPA indicated the total
cost of the removal action at this site
would be $132.6 million through
December 2020. The memo also
mentioned that EPA continued to treat
2 to 4 million gallons of contaminated
water each day, which was estimated to
cost $1 million a month. More detailed
information can be found in the
background document and supporting
spreadsheets, which are available in the
docket for this rulemaking.44 The
background document includes the list
of sites identified for analysis, as well as
the data and information considered in
the screening and review process. The
summary results of the analysis are
presented in Table 1 below.
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TABLE 1—EVALUATION RESULTS FOR NPL AND SAA SITES IN THE CHEMICAL MANUFACTURING INDUSTRY
Total NAICS 325 NPL &
SAA sites evaluated
Number of NAICS 325
NPL & SAA sites
screened out based on
pre-1980, or
PRP lead status
Detailed review
concluded release
occurred prior to
the modern
regulatory framework
Detailed review
identified a
possible modern
regulation release
but no significant
taxpayer expenditures
Cases with
release(s) under
modern regulation
that required
taxpayer-funded response
207 45
127(46) 46
30
...........................................
4
Additionally, EPA looked at the major
removal cases found in the SEMS
database to supplement this analysis.
For this sector, EPA identified 290 nonNPL removal sites. Applying the
methodology, EPA screened out 148
sites because the environmental releases
occurred before 1980 or PRPs led the
response action. EPA also excluded an
additional 81 sites deemed as out of the
scope because EPA determined that the
industrial activities that resulted in the
release of hazardous substances were
not Chemical Manufacturing. Twentyseven other sites were also left out of the
analysis because of insufficient
documentation (i.e., not enough to
verify whether the sites included
pollution attributable to a NAICS 325
facility, or the nature/date of the
releases at the site).
To assess the 34 sites that remained
after those screens, EPA first conducted
a detailed review of case files to
compare the environmental issues at the
sites to the regulations applicable today.
Based on this assessment, EPA
concluded that the releases at four
removal sites were one-time incidents
(e.g., drum spill, chemical plant fire,
accidental releases to air). While these
releases were all found to have occurred
after contemporary regulations,
according to site documents reviewed,
the PRPs had responded to the
emergencies, and none of these sites
Superfund Alternative Approach (SAA) in the
Chemical Manufacturing Industry.
42 Enforcement, Court Settlements and Judgments
in the Chemical Manufacturing Industry.
43 2018 Action Memorandum for a Non-Time
Critical Removal Action, Consistency Exemption
Request and Ceiling Increase at Mississippi
Phosphates Corporation National Priorities List
Site, Pascagoula, Jackson County, Mississippi.
44 Identification and Evaluation of National
Priorities List (NPL) Sites and Sites using the
Superfund Alternative Approach (SAA) in the
Chemical Manufacturing Industry.
45 Includes 8 sites addressed through Superfund
Alternative Approach (SAA).
46 The number in the parentheses indicates the
sites that were also removed at this stage of the
analysis because EPA determined the industrial
activities did not involve chemical manufacturing.
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required significant Fund expenditure;
at one of the four sites, EPA spent
$19,500 in Fund money to conduct an
air assessment.
For the remaining 30 removal sites,
the releases or threatened releases were
associated mainly with the
abandonment or improper storage of
drums, tanks, and other containers that
contained various chemicals, including
hazardous substances and waste. In
seven of these cases, chemical
explosions or fires resulted from storing
incompatible chemicals near one
another. Most of these cases involved
releases that occurred since the year
2000, which EPA determined to be
releases that occurred under the modern
regulatory framework that required
taxpayer-funded cleanup.
As described in more detail in the
Role of Federal and State Programs
section below, the primary regulations
governing the storage and handling of
hazardous chemicals have been in place
since the 1980s including: Occupational
Safety and Health Act (OSHA) standards
for storage and handling of flammable
liquids (29 CFR 1910.106) and
compressed gas (29 CFR 1910); Section
311 and 312 of the Emergency Planning
and Community Right-to-Know Act
(EPCRA) requirements concerning
reporting of hazardous chemical
inventory to local and state emergency
responders; and EPCRA Section 304
requirements for emergency release
notification for ‘‘reportable quantity.’’ In
addition, drums and tank systems used
to store hazardous waste for more than
90 days, or stored at locations that are
not the site of generation, have been
regulated under RCRA (requirements
found in 40 CFR parts 264 and 265)
since 1981 for drums and other
containers 47 and since 1986 for tank
systems.48
Review of Fund expenditure data
associated with these 30 sites indicates
that the Fund incurred estimated costs
ranging from $30,000 to $3 million for
response and enforcement activities. For
19 of the 30 sites, the Fund incurred
costs under $500,000 with an average
cost of $218,000 per site. For the
remaining 11 sites where the response
actions resulted in Fund expenditures
above $500,000 per site, the average cost
was $1.4 million.
More detailed information can be
found in the background document and
supporting spreadsheets, which are
available in the docket for this
rulemaking.49 The background
document includes the list of sites
identified for analysis, as well as the
data and information considered in the
screening and review process. Table 2
presents the summarized results of the
analysis.
TABLE 2—EVALUATION RESULTS FOR SUPERFUND REMOVAL SITES IN THE CHEMICAL MANUFACTURING INDUSTRY
Total NAICS 325
superfund removal cases
evaluated
Number of NAICS 325
superfund removal cases
screened out based on
pre-1980, or PRP lead
status
Detailed review concluded
release occurred prior to
the modern regulatory
framework
Detailed review identified a
possible modern regulation
release, but no significant
taxpayer expenditures
Cases with release(s)
under modern regulation
that required taxpayerfunded response
290
148(108) 50
...........................................
4
30
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Prevalent Sources of Releases
EPA’s analysis of cleanup cases
compiled information, where
discernable, on the root cause of
releases. Across the industry overall, the
most prevalent issue was contaminated
soils that resulted from inappropriate
waste and material handling, leaks and
spills, fires and explosions, lack of
stormwater management, and poor
housekeeping practices. Other
significant sources include disposal into
unlined ponds and wastewater lagoons
and the abandonment of hazardous
waste and materials in drums and other
containers. Beyond these, a common
issue observed at removal sites but not
as commonly at NPL sites, was
abandonment and improper storage of
drums, tanks, and other containers that
contained various chemicals, including
hazardous substances and waste. As
discussed in the next section, there are
regulations in place that address these
types of releases.
47 46
48 51
FR 2866 (Jan. 2, 1981).
FR 25472 (Jul. 14, 1986).
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B. Role of Federal and State Programs
and Voluntary Protective Industry
Practices at Facilities in the Chemical
Manufacturing Industry
In the 2010 ANPRM, EPA recognized
that the NPL data reflects releases
arising from activity that, in some cases,
predates CERCLA, RCRA, and other
modern environmental requirements.
The Agency welcomed information
about current releases of hazardous
substances to the environment to help
inform EPA’s future actions. As
discussed in the Approach section of
this proposal, to enable EPA to base its
decision on risk posed by facilities
operating under modern conditions, i.e.,
the types of facilities to which financial
responsibility requirements would
apply, EPA developed an approach to
identify and consider relevant state and
Federal regulatory requirements and
financial responsibility requirements
that currently apply to operating
facilities, as well as voluntary protective
practices. EPA thus undertook an effort
to gather information about Federal and
state environmental programs and
49 Identification and Evaluation of CERCLA
108(b) Chemical Manufacturing non-National
Priorities List (NPL) Removal Sites.
50 The number in parentheses indicates the sites
that were also removed at this stage in the analysis:
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industry voluntary programs that have
been implemented and are applicable to
currently operating facilities within the
Chemical Manufacturing industry today.
EPA evaluated the extent to which
activities that contributed to the risk
associated with the production,
transportation, treatment, storage, or
disposal of hazardous substances are
now regulated. EPA recognizes that
substantial advances have been made in
the development of manufacturing,
pollution control, and waste
management practices, as well as the
implementation of Federal and state
regulatory programs to prevent and
address releases at these facilities. In
part, EPA’s proposed decision to not
issue financial responsibility
requirements for this industry is based
on EPA’s review and analysis of Federal
regulations and complemented by state
program regulations. EPA’s proposed
findings and conclusions about the
impact of Federal and state
environmental programs, along with
industry voluntary programs, are
discussed in the following section.
81 Sites for which EPA determined the industrial
activities did not involve chemical manufacturing,
and 27 sites for which there was not enough
documentation to be included in the analysis.
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Overview of Federal and State
Regulatory Programs and Industry
Voluntary Practices Applicable to
Facilities in the Chemical
Manufacturing Industry
EPA evaluated Federal and state
regulations that address the potential for
release of hazardous substances to the
range of environmental media that may
be affected by a release from a facility
in the Chemical Manufacturing
industry. EPA found that a
comprehensive regulatory framework
has developed since the enactment of
CERCLA. Federal statutes such as the
CAA, CWA, TSCA, RCRA, and EPCRA
are applicable across the entire industry
and lay the foundation for this
regulatory framework. Specific
regulations are discussed in the
background document according to the
affected media that the regulations
address: Air pollution, water pollution,
emergency planning and response,
hazardous substances management, and
hazardous and non-hazardous waste
management and disposal. This
background document is available in the
docket for this rulemaking.51
Regulations Addressing Prevalent
Sources of Releases Identified in
Analysis of Cleanup Cases
EPA’s analysis of the cleanup cases
found that the most prevalent releases
involved:
• Soil contamination from
inappropriate handling of wastes and
materials,
• Releases from leaks, spills, fires,
and explosions,
• Lack of stormwater management,
• Disposal into unlined ponds and
lagoons,
• Abandonment of hazardous
substances and waste in drums, tanks or
other containers,
The comprehensive regulations for
the management and disposal of
hazardous waste, promulgated under
the authority of RCRA, were designed to
prevent these types of releases and
assure that past spills are cleaned up by
facility owners and operators.
Specifically, Subtitle C of RCRA
required EPA to establish a hazardous
waste management program, and EPA
developed a ‘‘cradle to grave’’ approach
to control the generation, transportation,
treatment, storage, and disposal of
hazardous waste.52 EPA’s regulatory
51 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
52 ‘‘EPA History: Resource Conservation and
Recovery Act,’’ EPA, at: https://www.epa.gov/
history/epa-history-resource-conservation-andrecovery-act.
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approach under RCRA includes
standards specific to types of hazardous
wastes, types of hazardous waste
disposal facilities, and types of
hazardous waste disposal activities;
EPA enforces these standards through
permitting, reporting and inspection
programs.53
In 1980, under the authority of RCRA
Subtitle C, EPA promulgated the initial
hazardous waste management and
permitting regulations. These
regulations included the identification
of hazardous wastes that would be
regulated under RCRA Subtitle C. Under
Subtitle C, generators of hazardous
waste are required to ensure and fully
document that the hazardous waste they
produce is properly identified,
managed, tracked, and treated prior to
recycling or disposal. The degree of
regulation to which each generator is
subject depends to a large extent on how
much waste each generator produces
every calendar month. Early in the
development of the RCRA program, EPA
recognized that a relatively small
number of industrial facilities generated
the majority of the nation’s hazardous
waste. EPA initially focused on these
large quantity generators, i.e., those that
generate 1,000 kilograms or more of
non-acute hazardous waste per month
(or more than 1 kilogram of acute
hazardous waste per month). These
facilities must obtain an EPA
identification number and report the
quantities and types of hazardous waste
they generate, as well as the intended
receiving facility for treatment and
disposal, unless the waste will be
managed onsite. Large quantity
generators who send their waste offsite
are responsible for the proper packaging
and labeling of the waste before
transport and the tracking of the waste
to the destination facility using the
uniform hazardous waste manifest.
Large quantity generators may store
their waste on site for less than 90 days
before transport to a treatment and
disposal facility; that storage is subject
to the same unit-specific standards
(described below) applicable to
treatment, storage, and disposal
facilities.
RCRA Subtitle C also established
standards for hazardous waste
treatment, storage, and disposal
facilities (TSDFs). Operators that handle
or manifest hazardous waste at any
point in its lifecycle, including
53 ‘‘EPA History: Resource Conservation and
Recovery Act,’’ EPA, at: https://www.epa.gov/
history/epa-history-resource-conservation-andrecovery-act; ‘‘Summary of the Resource
Conservation and Recovery Act,’’ EPA, at: https://
www.epa.gov/laws-regulations/summary-resourceconservation-and-recovery-act.
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10139
generators and transporters, are required
to notify EPA of these activities. To keep
track, TSDF owners and operators must
keep records and make reports to EPA.
TSDFs are required to track hazardous
waste they receive through EPA’s
hazardous waste manifest system,
among other recordkeeping and
reporting standards.
RCRA Subtitle C regulations created a
permitting program for hazardous waste
TSDFs. The TSDF permitting
regulations include application
procedures, permit approval conditions,
and monitoring and reporting
requirements. TSDFs must have permits
for the entirety of the active life of the
permitted units, including during
closure of waste management units.
New and existing hazardous waste
TSDFs must submit a RCRA permit
application at least 180 days before the
commencement of construction and/or
hazardous waste management
activities.54 Both permitted and interim
status TSDFs must comply with general
facility operating standards,
preparedness and prevention,
contingency plans and emergency
procedures, as well as specific technical
standards designed to insure that
hazardous waste management units
such as storage tanks and containers,
landfill, surface impoundments, waste
piles, land treatment of hazardous
waste, and solid waste management
units are operated in a manner that
prevents releases. To minimize the
potential for leachate to threaten human
health and the environment, EPA
developed design and operating
standards that use a combination of
different technologies and good
operating practices to detect, contain,
and clean up any leaks that might occur.
To prevent releases of hazardous waste
into the environment, containers
holding liquid hazardous wastes at a
permitted TSDF must have a secondary
containment system. Secondary
containment is emergency short-term
storage designed to hold leaks from
hazardous waste management units.
Slightly later in the 1980s, EPA
promulgated regulations that set
financial assurance requirements for
TSDFs.55 The TSDF standards
eventually included air emission
standards for process vents, equipment
leaks, tank systems, surface
impoundments, and containers. The
regulations covering proper
management of surface impoundments,
found in 40 CFR parts 264/265, Subpart
K, require facilities that store hazardous
54 45
FR 33063 (May 19, 1980).
FR 33063 (May 19, 1980); 47 FR 15047 (Apr.
7, 1982).
55 45
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waste in surface impoundments to meet
specific design requirements, which
include a double liner system, leachate
collection, and removal systems and a
leak detection system. The regulations
for containers, found in 40 CFR parts
264/265, Subpart I, include provisions
regarding design and operating
requirements, and inspections. Certain
40 CFR part 265 standards also apply to
hazardous waste containers at generator
sites.
HSWA was enacted in 1984, largely in
response to citizen concerns that
existing methods of hazardous waste
disposal, particularly land disposal,
were not safe. With HSWA, Congress
sought to minimize waste generation
and phase out land disposal of
hazardous waste. Accordingly, in 1986,
EPA promulgated a suite of regulations
that established standards and
restrictions for land disposal of
hazardous waste. While the regulations
set stringent guidelines for the land
disposal of hazardous waste, some
hazardous wastes and some types of
land disposal are prohibited altogether.
Although there are exceptions, operators
are generally prohibited from diluting
hazardous waste as a substitute for
treatment. In addition, operators can
land dispose hazardous waste only
following treatment and only in
appropriate land treatment units,
landfills and surface impoundments,
Further, operators must meet testing,
removal, recordkeeping, and design
requirements. Additional standards,
restrictions, and prohibitions are in
place for hazardous waste that exhibit
ignitability, corrosivity, reactivity, or
toxicity.56
HSWA required that all landfills and
surface impoundments install
groundwater monitoring, comply with
technical requirements, such as double
liners and leachate collection, and
obtain financial assurance. The HSWA
amendments also added to RCRA’s
regulations for small quantity
generators, facilities that generated
between 100 to 1,000 kilograms per
month of hazardous waste, which were
previously exempt from RCRA rules.
These small quantity generator rules
took effect in 1986. Generators of less
than 100 kilograms per month of
hazardous waste (i.e., conditionallyexempt small quantity generators)
remained subject to significantly
reduced requirements.57 EPA amended
the hazardous waste generator
provisions in 2016, largely to clarify the
requirements.58
56 51
FR 40572 (Nov. 7, 1986).
57 Id.
58 81
FR 85732 (Nov. 28, 2016).
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HSWA also established closure and
post-closure requirements for hazardous
waste TSDF facilities. The regulations
require facilities to develop closure
plans for all hazardous waste
management units. All TSDFs are
required to prepare and submit written
closure plans. A permitted facility
submits this plan as part of its permit
application. Once the plan is approved
by the permitting agency, it becomes
part of the facility’s operating permit.
Interim status facilities 59 must have
written closure plans within six months
of becoming subject to the closure
regulations. Upon the completion of
closure of a hazardous waste disposal
unit, owners and operators must submit
a certification of closure to the relevant
state or EPA regional office. Following
closure, facilities must implement a
post-closure plan that abides by postclosure property use and care
guidelines. The standard post-closure
care period is 30 years, but this can be
shortened or extended on a case-by-case
basis by the permitting authority (i.e.,
the EPA Region or the authorized state
regulatory agency). Post-closure
notification and security requirements
remain in place so long as hazardous
waste is present at the facility, even
after the 30-year post-closure period.60
HSWA provided EPA with authority
to develop a broader corrective action
program. Under this program, EPA
requires owners and operators of
facilities that treat, store or dispose of
hazardous waste to investigate and
clean up hazardous releases into soil,
groundwater, surface water and air, thus
reducing the likelihood that these
facilities would require cleanup under
Superfund. RCRA permits issued to
TSDFs must include provisions for both
corrective action and financial
assurance to cover the costs of
implementing those cleanup measures.
EPA also possesses additional
authorities to order corrective action
through enforcement orders, which are
not contingent upon a facility’s permit.
In addition, facilities may voluntarily
choose to clean up their contamination.
In addition to Subtitle C
requirements, RCRA Subtitle D
established a program for management
and disposal of non-hazardous
industrial and municipal solid waste
through state solid waste management
plans that conform with Federal
guidelines. RCRA Subtitle I requires
EPA to promulgate technical standards
59 Interim status facilities are facilities that were
already in existence at the time of the enactment of
the permitting regulations. Interim status facilities
must comply with the requirements in 40 CFR part
265 until they receive their permit.
60 51 FR 16444 (May 2, 1986).
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and corrective action requirements for
owners and operators of underground
storage tanks (USTs), including
underground storage tanks that contain
hazardous substances or petroleum
products. The UST regulations include
requirements for design, installation,
notification, operational procedures,
release reporting, release response, and
corrective action procedures for
underground storage tank systems that
contain hazardous substances. The
regulations also include financial
responsibility requirements for
underground storage tank owners and
operators. In addition, EPA has
established guidelines for the approval
of state underground storage tank
programs.61
In addition to the regulatory scheme
that RCRA imposes on the management
of hazardous waste in underground
storage tanks that store chemicals,
Chemical Manufacturing plants are
subject to a number of additional
regulatory provisions that reduce the
potential for the plants to pose a risk for
a Federally-financed response action.
Catastrophic releases of hazardous
substances and the use of toxic
chemicals and other hazardous
substances are additional environmental
and safety concerns for Chemical
Manufacturing facilities. Several
environmental laws authorize
regulations requiring the development
of response plans for various
emergencies in order to reduce the
effects of a release, and to notify local
emergency response personnel and
facilitate cooperation. For example, EPA
implements the Chemical Accident
Prevention Provisions of Section 112(r)
of the Clean Air Act Amendments,
which require certain facilities to
generate Risk Management Plans (RMPs)
to mitigate the effects of a chemical
accident and to coordinate with local
response personnel. Emergency Action
Plan (EAP) regulations under OSHA
require that employers prepare a written
EAP to create practices to follow during
workplace emergencies. EPA
implements regulations under the
EPCRA that impose emergency
planning, reporting, and notification
requirements for hazardous and toxic
chemicals.
The U.S. Chemical Safety Board
(CSB), authorized by the CAA
Amendments of 1990, is involved in
investigating accidental releases at
Chemical Manufacturing facilities.
Specifically, the principal role of the
CSB is to investigate accidents to
determine the conditions and
circumstances which led up to the event
61 53
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and to identify the cause or causes so
that similar events might be prevented.
Implementation of recommendations
resulting from investigations can
prevent future releases of hazardous
substances to the environment. The
CSB’s investigative function is
completely independent of the
rulemaking, inspection, and
enforcement authorities of both EPA
and OSHA.62
Hazardous substances management
regulations address the storage and
transportation of hazardous substances.
These regulations are implemented by
EPA, OSHA, and the Pipeline and
Hazardous Materials Safety
Administration (PHMSA). The
regulations address the registration and
reporting of hazardous substances that
are manufactured or produced through
industrial processes; hazardous
substance release prevention; mitigation
of harm caused by hazardous substance
releases; safety and catastrophe
prevention for facilities that handle
hazardous substances; and standards for
the transportation of hazardous
substances. EPA implements hazardous
substances management regulations
largely under the authority of the TSCA
and the Pollution Prevention Act (PPA),
while the Federal Insecticide,
Fungicide, and Rodenticide Act (FIFRA)
applies to the manufacture and
distribution of pesticides.
TSCA provides EPA with authority to
issue rules requiring reporting, recordkeeping, and testing of specific
chemicals and to establish regulations
that restrict the manufacturing
(including import), processing,
distribution in commerce, use, and
disposal of chemicals and mixtures.
TSCA authorizes EPA to prevent
unreasonable risks by regulating
chemicals and mixtures, ranging from
requiring hazard warning labels to the
outright ban on the manufacture,
processing, distribution in commerce or
use of certain chemicals and mixtures.
TSCA and its amendments have also
established specific programs for the
management of certain chemicals—
namely, PCBs, asbestos, radon, lead,
mercury, and formaldehyde.
The PPA, passed in 1990, created a
national policy framework to focus
industry, government, and public
attention on pollution and to prevent or
reduce pollution at the source through
technology modifications, modifications
of production processes, product
redesign, and improvements in
maintenance, training, and inventory
control. PPA regulations require, among
other things, that facility owners and
62 www.csb.org.
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operators include toxic chemical source
reduction and recycling reports with
their annual toxic chemical release
filing.
Pesticides are outside the scope of
TSCA’s regulatory authority; EPA
explicitly regulates pesticides under the
authority of FIFRA. The modern
pesticide regulatory framework came
into being with the 1972 Federal
Environmental Pesticide Control Act,
which further amended FIFRA. The
amendments created registration
procedures for pesticides, including
data requirements, Agency review
protocols, and classification procedures.
In order to obtain registration,
manufacturers and distributors must
submit the pesticide’s ingredients, its
target crop, use practices, and storage
and disposal practices. The review
includes a determination regarding the
pesticide’s potential to cause
unreasonable adverse effects on the
environment. Classification procedures
involve the categorization of pesticide
components as active or inert.
Manufacturers must renew their
registration for each pesticide every 15
years. Following registration, EPA has
the authority to initiate special review
procedures if information comes to light
indicating that the use of a pesticide
may cause unreasonable adverse effects
on the environment. Regulations under
FIFRA also cover the management and
disposal of pesticides through standards
and requirements for containers,
repackaging procedure, and the use of
containment structures.63 The
amendments granted EPA authority to
stop the distribution of, and to remove
from use, any pesticide the Agency
finds to be in violation of FIFRA.
In addition to registration and
reporting requirements for pesticide
products, FIFRA regulations also
establish registration and reporting
requirements for pesticide
manufacturing facilities. Any
establishment that produces pesticide
products or substances used as active
ingredients in pesticides must provide
facility and company information to
EPA upon registration. Relevant
facilities must also submit annual
reports to EPA that detail the amount of
pesticide product produced and
distributed each year, as well as
production estimates for the following
63 53 FR 15975; 50 FR 49001; 40 FR 28268; 71 FR
47422; ‘‘Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA) and Federal Facilities,’’
EPA, accessed October 17, 2018 at: https://
www.epa.gov/enforcement/federal-insecticidefungicide-and-rodenticide-act-fifra-and-federalfacilities; ‘‘About Pesticide Registration,’’ EPA,
accessed November 26, 2018 at: https://
www.epa.gov/pesticide-registration/about-pesticideregistration.
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year. In connection with the
compilation of annual reports, facilities
must keep production, distribution and
sale, shipment, inventory, and testing
records.64
With respect to workplace
management of hazardous substances,
OSHA promulgated Process Safety
Management (PSM) standards in 1992.
The PSM standards address the
potential for unexpected releases of
toxic, reactive, or flammable liquids and
gases in processes involving highly
hazardous chemicals. Under PSM,
processes include the use, storage,
manufacture, handling, or
transportation of hazardous chemicals.
The standards identify approximately
130 toxic and reactive chemicals; they
apply to facilities that manage quantities
of those chemicals above a specific
chemical’s established threshold. PSM
standards also apply to facilities that
manage flammable liquids and gases in
quantities of 10,000 pounds or greater.
Facilities must compile information on
the hazards of highly hazardous
chemicals, including toxicity, reactivity
data, corrosivity data, stability data, and
permissible exposure limits. Facilities
must also collect information on the
technology used by each relevant
industrial process. With this
information, facilities must complete a
process hazardous analysis (PHA) for
each relevant process. The PHA for a
facility is a review of possible releases
of hazardous chemicals that may result
from the process and safeguards that the
facility will implement to prevent
releases.65
In 2011, OSHA initiated the Chemical
Plant National Emphasis Program (NEP)
under its PSM regulations. Through the
NEP, OSHA conducts inspections of
randomly selected facilities that handle,
manage, or store highly hazardous
chemicals in quantities that meet the
PSM threshold. The inspections include
fact gathering related to PSM
requirements and verification that
employers have met PSM standards.66
Contamination of surface water is
largely addressed by the CWA. Under
CWA, EPA has implemented pollution
control measures, including Federal
64 53 FR 35058; 45 FR 54338; ‘‘Federal
Insecticide, Fungicide, and Rodenticide Act
(FIFRA) and Federal Facilities,’’ EPA, accessed
October 17, 2018 at: https://www.epa.gov/
enforcement/federal-insecticide-fungicide-androdenticide-act-fifra-and-federal-facilities.
65 ‘‘Process Safety Management,’’ OSHA, accessed
September 19, 2018 at: https://www.osha.gov/
Publications/osha3132.html; 57 FR 6403.
66 ‘‘OSHA Issues New National Emphasis
Program for Chemical Facilities,’’ OSHA, November
30, 2011, accessed November 29, 2018 at: https://
www.osha.gov/news/newsreleases/trade/113020110.
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water quality standards and industry
wastewater and Effluent Limitation
Guidelines (ELGs). These regulations set
standards for industrial wastewater
discharge to surface water on an
industry-specific basis, identifying key
processes and materials to regulate
within each industry. The standards
require industrial discharges to meet
technological specifications in their
treatment and discharge systems, rather
than pollutant specific quality standards
for discharges. ELGs may set one, all, or
a combination of the following types of
technological standards, which facilities
within each industry must meet: Best
practicable control technology currently
available, best conventional pollutant
control technology, best available
technology economically achievable,
new source performance standards,
pretreatment standards for new sources,
pretreatment standards for existing
sources, and best management
practices.67
EPA published industry-specific
effluent guidelines for pesticides in
1978, for inorganic chemicals
manufacturing in 1982, and for organic
chemicals, plastics, and synthetic fibers
in 1987.68 The pesticide guidelines
include even more specific standards for
organic pesticide chemicals
manufacturing and metallo-organic
pesticide chemicals manufacturing.69
With respect to organic chemicals
manufacturing, EPA promulgated
specific standards for facilities that
manufacture benzene, polypropylene,
polyvinyl chloride, rubber precursors,
chlorinated solvents, toluene, rayon,
nylon, and polyester.70
Additionally, the CWA established
the NPDES permit program, which
controls point source discharges to
surface water, and the National Oil and
Hazardous Substances Pollution
Contingency Plan (NCP), which sets a
blueprint for responding to oil spills
and hazardous substance releases. At its
inception in 1968, the NCP provided a
comprehensive Federal system of
accident reporting, spill containment,
and cleanup of oil spills. In 1972, the
CWA expanded it to include hazardous
substance releases.71
67 ‘‘Industrial Effluent Guidelines,’’ EPA at:
https://www.epa.gov/eg/industrial-effluentguidelines; ‘‘Learn About Effluent Guidelines,’’ EPA
at: https://www.epa.gov/eg/learn-about-effluentguidelines; 39 FR 4532 (Feb. 1, 1974).
68 43 FR 17776 (Apr. 25, 1978); 47 FR 28278 (Jun.
29, 1982); 52 FR 42522 (Nov. 5, 1987).
69 43 FR 17776 (Apr. 25, 1978).
70 52 FR 42522 (Nov. 5, 1987).
71 ‘‘National Oil and Hazardous Substances
Pollution Contingency Plan (NCP) Overview,’’ EPA
at: https://www.epa.gov/emergency-response/
national-oil-and-hazardous-substances-pollutioncontingency-plan-ncp-overview.
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State Regulatory Programs
Some states impose requirements on
the Chemical Manufacturing industry in
addition to requirements related to
Federal programs. These stricter or
additional standards for emissions, spill
prevention, emergency preparedness,
and hazardous substance management
on facilities that handle toxic or
hazardous chemicals can reduce risk at
facilities that manage hazardous
substances. EPA researched state
environmental regulations relevant to
the Chemical Manufacturing industry
for a representative sample of states.
The states with the highest number of
Chemical Manufacturing facilities
include California, Texas, Illinois, Ohio,
Florida, New Jersey, Pennsylvania, New
York, and Georgia. A discussion of these
state regulations, as well as the
methodology EPA used in selecting the
11 states that it researched in a
background document, is available in
the docket for this rulemaking.72
One example of a state with standards
for Chemical Manufacturing facilities
that are stricter than Federal
requirements is Illinois, which has
separate standards for sewage
discharges from Chemical
Manufacturing facilities, and additional
standards for solid waste landfills with
chemical constituents. Another example
is California, which requires a land
covenant upon facility closure,
corrective action, remedial or response
action, or any other response action
when hazardous materials, hazardous
wastes or constituents, or hazardous
substances remain at a property in
levels exceeding suitable use
standards.73 California also requires
financial responsibility for owners and
operators of underground storage tanks,
which includes an Underground Storage
Tank Cleanup Fund that funds eligible
corrective actions.74 For producers of
extremely hazardous waste, California
also operates an Extremely Hazardous
Waste Permit system.75
Industry Voluntary Practices
EPA reviewed facility RMPs, industry
materials, governmental literature, and
academic literature to locate voluntary
programs that: (1) Attempt to address
CERCLA hazardous substance
management or disposal, and release
prevention, mitigation, and response; (2)
are relevant to Chemical Manufacturing
72 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
73 22 California Code of Regulation (CCR) 67391.
74 23 CCR 2803.
75 22 CCR 67430.
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facilities; and (3) in which Chemical
Manufacturing facilities participate.
Industry voluntary programs fall into
three categories: Those sponsored by
Federal, state or local governmental
agencies; those fostered within industry
associations or non-governmental
organizations; and those implemented
by individual firms. These programs set
or publish environmental management
and safety standards that facilities may
follow to supplement Federal and state
requirements with additional standards
and may come with a certification from
the government agency or industry
group that establishes the standards.
Voluntary programs may also serve as
forums for coordination and
collaboration among companies,
facilities, and government agencies to
develop best practice standards and
improve emergency preparedness.
EPA’s review of available studies found
that the industry voluntary programs
can be effective at reducing both
pollution and the frequency of
government enforcement actions.
At the federal level, OSHA and FEMA
sponsor or collect information about
industry voluntary programs. National
and international nonprofit
organizations and industry associations,
such as the International Organization
for Standardization (ISO), International
Electrotechnical Commission (IEC) and
Global Environmental Management
Initiative (GEMI), also provide
environmental management and safety
standards and procedures that facilities
may follow, in addition to regulatory
requirements, and certify facilities that
meet these specifications.
The American Chemistry Council, an
industry trade association for chemical
companies, adopted the Responsible
Care program, which is a global
initiative to further the chemical
manufacturing industry’s
environmental, health, safety, and
security performance efforts, with a
focus on safe chemicals management
throughout chemical lifecycles. To
obtain membership in the American
Chemistry Council, a company must
participate in the Responsible Care
program. Responsible Care requires that
companies commit to and are compliant
with the program’s guiding principles
and requirements. Participants are
subject to reporting requirements and
mandatory facility audits under the
program.76 A discussion of industry
voluntary practices, as well as the
76 ‘‘Responsible Care,’’ American Chemistry
Council, accessed October 16, 2018 at: https://
responsiblecare.americanchemistry.com/.
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methodology used by EPA, is available
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C. Existing State and Federal Financial
Responsibility Programs
To help inform the level of risk of a
Fund-financed response action
associated with classes of facilities in
the Chemical Manufacturing industry,
EPA reviewed existing state and Federal
financial responsibility programs that
may be applicable to the industry and
that cover a wide range of liabilities,
including liabilities for closure, postclosure care, corrective action, thirdparty personal injury/property damage,
and natural resource damages. EPA
focused on these types of financial
responsibility programs for two reasons.
First, these categories of damages,
actions and costs are like those that
could be covered by CERCLA Section
108(b) rulemaking, and thus they help
inform the need for CERCLA Section
108(b) financial responsibility for this
industry. Secondly, the existence of
financial responsibility requirements
can help create incentives for sound
practices, reducing the risk of releases
requiring CERCLA response action. EPA
also sought to identify state cleanup
funds that are at least partially funded
by industry (e.g., through a tax on
hazardous wastes generated), and that
could cover future CERCLA liabilities
that may arise at Chemical
Manufacturing facilities. EPA’s report
focused on the 25 states reviewed in
EPA’s reports on existing state
regulatory and voluntary programs
(excluding financial responsibility
programs) that may be applicable to
Chemical Manufacturing facilities.
Finally, EPA reviewed existing
financial responsibility requirements in
the following Federal programs: (1)
RCRA Subtitle C TSDFs; (2) TSCA
commercial PCB waste facilities; and (3)
EPA Safe Drinking Water Act
Underground Injection Control wells.
The RCRA Subtitle C regulations require
all TSDFs to demonstrate that they will
have the financial resources to properly
close the facility or unit when its
operational life is over, perform postclosure care (if necessary) and provide
the appropriate corrective action in the
case of a release. Additionally, the
RCRA liability coverage regulations
require all owners and operators of
hazardous waste TSDFs to maintain
accident liability insurance during the
active life of their hazardous waste
management units or facilities. These
77 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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requirements would apply to facilities
in the Chemical Manufacturing industry
that treat store or dispose of a hazardous
waste.
The TSCA regulations for PCB
commercial storage facilities require all
commercial storage facilities to
demonstrate financial assurance for
closure of the facility. Under the Safe
Drinking Water Act regulations
designed to protect underground
sources of drinking water, owners or
operators of underground injection
control operations are required to
maintain financial responsibility for
plugging and abandonment of wells.
These requirements apply to owners
and operators of permit-authorized class
I, II, III and geologic sequestration class
VI wells. The report is available in the
docket for this rulemaking.78
EPA identified a range of existing
financial responsibility programs that
may be applicable to facilities in the
Chemicals Manufacturing industry. The
programs include the Federal programs
mentioned above as well as state
programs related to:
• Financial Responsibility for
petrochemical manufacturing facilities,
• Financial Responsibility for
phosphate fertilizer manufacturing
facilities,
• Financial Responsibility for
hazardous waste TSDFs,
• Financial Responsibility for
underground injection of hazardous
wastes,
• Financial Responsibility for PCB
storage or disposal facilities,
• Corrective action financial
responsibility to address hazardous
waste or hazardous constituents,
• Facility remediation financial
responsibility associated with transfer
in ownership or facility closure,
• Financial Responsibility for storage
tanks containing hazardous substances,
and
• Other authorities to require
financial responsibility to assure
compliance with orders.
The applicability of these programs
will depend on a variety of facilityspecific factors, for example, use of a
specific piece of equipment (e.g., an
underground storage tank that contains
regulated substances) or engaging in a
specified activity (e.g., a release of a
hazardous substance). Furthermore,
state financial responsibility programs
vary by state and some types of financial
responsibility programs exist only in
limited subsets of the states reviewed.
EPA believes that state and Federal
78 Review
of Existing Financial Responsibility
Laws Potentially Applicable to Classes of Facilities
in the Chemical Manufacturing Industry.
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financial responsibility programs help
reduce risk of a Fund-financed response
action at facilities where they are
applicable. While financial
responsibility programs vary in
structure and function, they may reduce
such risk in a myriad of ways. For
example, they may help ensure
undercapitalized firms do not engage in
environmentally risky enterprises,
reduce the incentive to abandon
properties with extensive
contamination, ensure compliance with
protective requirements, and incentivize
better environmental practices.
D. Compliance and Enforcement History
To understand the experience of court
settlements and judgments, EPA looked
at compliance and enforcement in the
Chemical Manufacturing industry. EPA
believes that compliance assistance,
compliance monitoring, and
enforcement are important components
of the regulatory framework discussed
above. Through inspections, compliance
monitoring can identify noncompliance
at regulated facilities. Enforcement
actions may result in legal instruments
that ensure correction of deficiencies to
achieve compliance with environmental
requirements. Some functions of
compliance and enforcement actions are
particularly pertinent to the risk
determination for rulemaking under
CERCLA Section 108(b). First, if
noncompliance causes release of a
hazardous substance, then EPA can
ensure through negotiated agreements
that the responsible party carries out or
pays for the cleanup. Second,
enforcement actions can result in orders
and settlements that compel a
responsible party to return to
compliance. Third, the prospect of
financial penalties that can accompany
these enforcement instruments can
encourage compliance. All of these
functions support the regulatory
structure in reducing risk of Fund
expenditures.
EPA looked at enforcement activities
as well as historical enforcement and
compliance data in the development of
this proposal. EPA obtained data from
the EPA Enforcement and Compliance
History Online (ECHO) system and
provides a review of the Federal
environmental enforcement settlements
and judgments data from FY 1972
through FY 2017.79 Facilities whose
primary NAICS codes indicate Chemical
Manufacturing sector activities (NAICS
325) were included in EPA’s review.
79 ECHO does not include all of EPA’s compliance
and enforcement activity because regions are not
required to report ‘‘informal actions,’’ and it does
not consistently capture all state actions.
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ECHO data show that initiatives and
normal review or inspection of facilities
resulted in over 7700 civil enforcement
cases in the Chemical Manufacturing
industry from FY 1972 through FY
2017. CAA (32%) and FIFRA (17%)
cases were the most common. There are
a smaller number of cases in RCRA
(12%), CERCLA (12%), CWA (11%),
EPCRA (11%), and TSCA (6%). Further
description of this review is in the
background document, which is
available in the docket for this
rulemaking.80
As noted above, the Risk Management
Program under Chemical Accident
Prevention Provisions of Section 112(r)
of the Clean Air Act Amendments
requires certain facilities to generate
Risk Management Plans (RMPs) to
mitigate the effects of a chemical
accident and coordinate with local
response personnel. Assuring
compliance with this program has been
a priority of EPA’s Office of
Enforcement and Compliance Assurance
since 2017.
Enforcement cases can include
instances in which removal action,
release reduction, or return to
compliance include the removal of
contaminated media by the responsible
party. Measures to remove
contamination may be required in
enforcement orders under the range of
environmental statutes and are
negotiated to require activities aligned
with return to compliance.81 In this
situation, enforcement action directly
reduces risks to human health and the
environment. During the period FY
2012 through FY 2017, 32 settled
Chemical Manufacturing industry
enforcement cases have been indicated
as those where removal of contaminated
media occurred. They are primarily
CERCLA (50%) and RCRA (34%) cases.
Two CWA, two TSCA and one Safe
Drinking Water cases are also included.
The substances removed are generally
categorized as hydrocarbons, hazardous
chemicals, and metals. These cleanups
resulting from Federal enforcement
actions mitigated risks to human health
and the environment by removing soils,
groundwater, and sediments
contaminated by a variety of substances,
and reduced likelihood of impact to the
Fund.
Settlements and judgments in
enforcement cases can result in
80 Enforcement, Court Settlements and Judgments
in the Chemical Manufacturing Industry.
81 These ECHO enforcement removals are
separate from the Superfund removals analyzed
elsewhere. ECHO system data includes the
combined value of total enforcement financial
penalties, Supplemental Environmental Projects
(SEPs), and associated compliance activity.
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financial penalties, supplemental
environmental projects (SEPs), and
activities required to return to
compliance.82 Enforcement settlements
and judgments can ensure that the
responsible party conducts or pays for
cleanup, can drive a return to
compliance, and more generally can
incentivize compliance.
As stated in the cleanup site
evaluations in Section VII.A, particular
consideration was given to CERCLA and
RCRA regulations as relevant
components of the modern regulatory
framework that applies to the Chemical
Manufacturing industry. There have
been over 1800 CERCLA and RCRA civil
cases in this industry, beginning in
1981. For context, there are
approximately 13,480 establishments
currently operating in the industry. The
ten largest CERCLA or RCRA
enforcement settlements and judgments
for the Chemical Manufacturing
industry each have 2017 inflationadjusted total values ranging from over
$51 million to $1.1 billion.
Further discussion of the details on
the Federal actions for these and
additional criminal cases can be found
in the background document, which is
available in the docket for this
rulemaking.83 This document identifies
facilities where noncompliance was
identified and was addressed by means
of formal Federal enforcement. The
background document does not include
either facilities where noncompliance
was addressed through informal
enforcement or facilities where
noncompliance was addressed by a
state. In addition, it does not include
facilities where noncompliance was not
identified, either because those facilities
were not inspected or because they were
inspected and found in compliance.
The compliance and enforcement
actions documented here and in the
background document show that where
noncompliance is identified, many
industry responsible parties are
conducting or paying for cleanups,
returning to compliance, and improving
public health and the environment. In
this industry, the largest CERCLA and
RCRA civil and judicial Federal cases
are recently concluded and represent
significant operational compliance
requirements and/or financial penalties.
Several major enforcement cases
highlighted in the EPA chemical sector
82 Compliance actions ordered can include the
removal of contaminated media, installation of new
equipment, or implementation of compliant
processes.
83 Enforcement, Court Settlements and Judgments
in the Chemical Manufacturing Industry.
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notebooks 84 evolved into decades of
litigation, multiple Federal enforcement
cases, risks to human health and the
environment, and NPL sites.
Enforcement actions alone do not
completely supplant the need for Fundfinanced response actions either at these
highlighted sites or generally in the
Chemical Manufacturing industry (as
discussed in section VIII below). Active
enforcement serves as an important
component of the regulatory framework.
VIII. Decision To Not Propose
Requirements
Based on consideration of the
analyses described in the previous
sections, as summarized below, EPA has
reached a conclusion that the degree
and duration of risk posed by the
Chemical Manufacturing industry does
not warrant financial responsibility
requirements under CERCLA Section
108(b) and thus is proposing to not issue
such requirements. The analysis and
proposed finding in this proposal are
not applicable to and do not affect,
limit, or restrict EPA’s authority (1) to
take a response action or enforcement
action under CERCLA at any facility in
the Chemical Manufacturing industry,
including any currently operating
facilities or those described in this
proposal and in the background
documents for this proposal, and (2) to
include requirements for financial
responsibility as part of such response
action. The set of facts in the
rulemaking record related to the
individual facilities discussed in this
proposed rulemaking supports the
Agency’s proposal not to issue financial
responsibility requirements under
Section 108(b) for this class, but a
different set of facts could demonstrate
a need for a CERCLA response action at
an individual site. This proposed
rulemaking also does not affect the
Agency’s authority under other
authorities that may apply to individual
facilities, such as the CAA, the CWA,
RCRA, and TSCA.
EPA believes the evaluation of the
Chemical Manufacturing industry
demonstrates significantly reduced risk
of a Fund-financed response action at
current operations. The reduction in
risks due to the requirements of existing
regulatory programs and voluntary
practices combined with reduced costs
to the taxpayer—demonstrated by EPA’s
84 Profile of the Agricultural Chemical, Pesticide,
and Fertilizer Industry, Sep 2000, EPA 310–R–00–
003; Profile of the Organic Chemical Industry, 2nd
Edition, Nov 2002, EPA 310–R–02–001; Profile of
the Plastic Resin and Manmade Fiber Industries,
Sep 1997, EPA 310–R–97–006; and Profile of the
Pharmaceutical Manufacturing Industry, Sep 1997,
EPA 310–R–97–005.
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cleanup case analysis, existing financial
responsibility requirements, and
enforcement actions—has reduced the
need for Federally-financed response
action at facilities in the Chemical
Manufacturing industry. EPA looked at
current industry practices, market
structure and economic performance of
the industry; analyzed cleanup cases for
facilities in the industry; and evaluated
the extent to which the industry and
sources of releases are covered by the
modern regulatory framework, the
degree to which taxpayers have been
called upon to pay for cleanup, and EPA
enforcement history in the industry.
As discussed in section VII.A, EPA
identified the cleanup cases that
occurred under the modern regulatory
framework and also entailed some Fund
expenditure. There were 34 sites that
indicated the potential for a significant
impact to the Fund while operating
under the modern regulatory
framework. For context, there are
approximately 13,480 establishments
currently operating in the industry.
Thus, this is a relatively small number
of cases in comparison to the size of the
industry. Moreover, EPA estimates the
total fund expenditure amount at the 34
sites (including 30 removal sites and 4
NPL sites) is approximately $104
million (through 2017).85 This amount
of expenditures is only a fraction of just
one year’s Superfund budgetary
authority. For example, the FY 2018
Superfund budget authority was
$1.057B.86
The language in Section 108(b) on
determining the degree and duration of
risk and on setting the level of financial
responsibility confers a significant
amount of discretion on EPA. In the
past, some of the risks associated with
spills resulted from, or were exacerbated
by cleanups not being undertaken in a
timely fashion. However, under the
modern regulatory framework,
requirements such as the Risk
Management Plan under the CAA, the
Emergency Action Plan under OSHA,
and RCRA requirements for TSDFs to
detect, contain, and clean up any leaks,
including facility-wide corrective
85 This expenditure figure reflects only
expenditures from the Hazardous Substances
Response Trust Fund (aka Superfund) designated as
non-special account expenditures through 2017. For
example, the projected costs through 2020 for
Mississippi Phosphate is $133 million (according to
the April 2018 Action Memorandum), compared to
the $8 million expended through 2017. It is
anticipated that significant additional expenditures
will occur at some of these sites. As such, the
ultimate taxpayer burden may be significantly
higher.
86 See U.S. EPA. May 2017. Fiscal Year 2018
Budget in Brief. Accessed April 2019. Available:
https://www.epa.gov/sites/production/files/201705/documents/fy-2018-budget-in-brief.pdf.
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action—all help to ensure timely
responses to releases. In addition to the
requirements for facilities to respond to
spills in a timely fashion, the public can
alert the Federal government to releases
by calling the National Response Center
(NRC), which is a part of the Federally
established National Response System
and staffed 24 hours a day by the U.S.
Coast Guard. The NRC is the designated
Federal point of contact for reporting all
oil, chemical, radiological, biological
and etiological discharges into the
environment, anywhere in the United
States and its territories.
Only 34 sites (discussed in detail in
Section VII.A) had significant releases
or threatened releases of hazardous
substances under the modern regulatory
framework and required more than
minimal taxpayer-funded cleanups. It is
EPA’s assessment that the small set of
Federally-funded cleanup cases due to
recent contamination, in view of the
size of the industry, does not warrant
the imposition of costly financial
responsibility requirements on the
entire Chemical Manufacturing industry
under CERCLA Section 108(b).
EPA acknowledges that regulations do
not always prevent releases, and the risk
of a release is lessened but never
eliminated by existing Federal and state
environmental regulations. However,
EPA believes that the network of
Federal and state regulations applicable
to the Chemical Manufacturing industry
creates a comprehensive framework that
applies to prevent releases that could
result in a need for future cleanup. This
is reflected in the relatively small Fund
burden associated with a relatively
small number of Fund financed
cleanups at Chemical Manufacturing
industry sites where pollution occurred
under the modern regulatory
framework. Numerous Federal programs
have been established under several
environmental statutes since CERCLA
was enacted on December 11, 1980.
These include programs under RCRA,
which require proper management and
disposal of hazardous wastes; under
TSCA, which regulates the manufacture
and sale of chemicals; under FIFRA,
which require the proper handling and
use of pesticides; and under both the
CWA and the CAA, which address
releases to water and air. In addition to
these Federal programs, some states
have stricter or additional standards
beyond Federal requirements.
In addition to these Federal programs,
some states with significant chemical
manufacturing industries have stricter
or additional standards beyond Federal
requirements. These Federal and state
programs are discussed in detail in
Section VII.B and in the background
PO 00000
Frm 00050
Fmt 4702
Sfmt 4702
10145
document, which is available in the
docket for this rulemaking.87
In addition, enforcement settlements
and judgments that force return to
compliance are important components
of the applicable regulatory structure.
EPA’s analysis of enforcement history
shows that enforcement of the
applicable regulations provides a lever
to monitor compliance, obtain
responsible party cleanups, and recover
financial penalties. Federal and state
regulatory programs, backed up by
enforcement and complemented by
industry voluntary practices, have
improved public health and the
environment significantly since
CERCLA’s initial adoption nearly 40
years ago. EPA believes that within the
Chemical Manufacturing industry, this
framework provides effective controls
which protect public health, welfare,
and the environment.
Examination of market structures for
the Chemical Manufacturing industry
further indicates comparatively low
likelihood of default on environmental
obligations at the expense of taxpayers
and the government by companies in
this industry. This economic
performance, combined with the low
impact to the Fund by facilities with
releases that happened under the
modern regulatory framework, suggests
that the degree of risk to the Fund by
this industry does not rise to a level that
warrants imposing CERCLA Section
108(b) financial responsibility
requirements.
In summary, EPA has analyzed the
need for financial responsibility based
on risk of taxpayer funded cleanups at
facilities in the Chemical Manufacturing
Industry operating under modern
management practices and modern
environmental regulations, i.e., the type
of facilities to which financial
responsibility regulations would apply.
That risk is identified by examining
Superfund cleanup cases associated
with the industry, the management of
hazardous substances at facilities in the
industry, as well as by examining
Federal and state regulatory controls on
that management and Federal and state
financial responsibility requirements.
Based on that examination, EPA is
proposing that, in the context of
CERCLA section 108(b), the degree and
duration of risk associated with the
modern production, transportation,
treatment, storage or disposal of
hazardous substances by the Chemical
Manufacturing Industry does not
87 Summary Report: Federal and State
Environmental Regulations and Industry Voluntary
Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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Federal Register / Vol. 85, No. 35 / Friday, February 21, 2020 / Proposed Rules
present a level of risk of taxpayer
funded response actions that warrant
imposition of financial responsibility
requirements for this sector. For these
reasons, EPA is proposing today to not
issue financial responsibility
requirements under CERCLA Section
108(b) for this industry.
or policy issues [3(f)(4)]. Any changes
made in response to OMB
recommendations have been
documented in the docket for this
rulemaking. EPA did not prepare an
economic analysis for the proposed rule,
since this action proposes no regulatory
requirements.
Order 13175, because this action
proposes no regulatory requirements.
Thus, Executive Order 13175 does not
apply to this action.
A. Solicitation of Public Comment on
This Proposal
EPA solicits comments on all aspects
of today’s proposal. EPA is specifically
interested in receiving comments on
several issues and requests the
following information:
• Examples of Chemical
Manufacturing industry related
response actions for releases which took
place under the modern regulatory
framework, for which potentially
responsible parties (PRPs) did not lead
the response at the facility.
• Examples of Chemical
Manufacturing industry related
response actions for releases which took
place under the modern regulatory
framework, for which PRPs have not
taken financial responsibility for their
environmental liabilities.
• Information on state-lead or other
Federal agency cleanups or instances of
natural resource damages associated
with this industry that may supplement
the information on cleanups gathered
and analyzed for this proposal.
• Information about existing Federal,
state, tribal, and local environmental
requirements applicable to the Chemical
Manufacturing industry relevant to the
prevention of releases of hazardous
substances that were not evaluated as
part of this proposal.
• Information about financial
responsibility requirements applicable
to Chemical Manufacturing industry
that were not evaluated as part of this
proposal.
B. Executive Order 13771: Reducing
Regulation and Controlling Regulatory
Costs
This action is not subject to Executive
Order 13045 because it is not
economically significant as defined in
Executive Order 12866, and because
EPA does not believe the environmental
health or safety risks addressed by this
action present a disproportionate risk to
children, since this action proposes no
regulatory requirements.
IX. Statutory and Executive Order
Reviews
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A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 13563: Improving Regulation and
Regulatory Review
This action is a significant regulatory
action that was submitted to the Office
of Management and Budget (OMB) for
review, because it may raise novel legal
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16:42 Feb 20, 2020
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This proposed rule is not subject to
the requirements of Executive Order
13771 (82 FR 9339, February 3, 2017)
because this proposed rule would not
result in additional cost.
C. Paperwork Reduction Act (PRA)
This action does not propose an
information collection burden under the
PRA, because this action does not
propose any regulatory requirements.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. This action does not
propose any new requirements for small
entities.
E. Unfunded Mandates Reform Act
(UMRA)
This action does not contain any
unfunded mandate as described in
UMRA, 2 U.S.C. 1531–1538, and does
not significantly or uniquely affect small
governments, because this action does
not propose any regulatory
requirements.
F. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the states, on the
relationship between the Federal
Government and the states, or on the
distribution of power and
responsibilities among the various
levels of government, since this action
proposes no new regulatory
requirements.
G. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have tribal
implications as specified in Executive
PO 00000
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Fmt 4702
Sfmt 9990
H. Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
I. Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution or use of energy,
since this action proposes no regulatory
requirements.
J. National Technology Transfer and
Advancement Act
This rulemaking does not involve
technical standards.
K. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
EPA believes that this action is not
subject to Executive Order 12898
because it does not establish an
environmental health or safety standard,
since this action proposes no regulatory
requirements.
List of Subjects in 40 CFR Part 320
Environmental protection, Financial
responsibility, Hazardous substances,
Chemicals.
Dated: February 10, 2020.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2020–03401 Filed 2–20–20; 8:45 am]
BILLING CODE 6560–50–P
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]]>Agencies
[Federal Register Volume 85, Number 35 (Friday, February 21, 2020)]
[Proposed Rules]
[Pages 10128-10146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03401]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 320
[EPA-HQ-OLEM-2019-0086; FRL-10005-53-OLEM]
RIN 2050-AH05
Financial Responsibility Requirements Under CERCLA Section 108(b)
for Facilities in the Chemical Manufacturing Industry
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA or the Agency) is
proposing to not impose financial responsibility requirements for
facilities in the Chemical Manufacturing industry under Section 108(b)
of the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA). Section 108(b) addresses the promulgation of
regulations that require classes of facilities to establish and
maintain evidence of financial responsibility consistent with the
degree and duration of risk associated with the production,
transportation, treatment, storage, or disposal of hazardous
substances.
DATES: Comments must be received on or before April 21, 2020.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
SFUND-2019-0086, at https://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. EPA may publish any comment
received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the Web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit https://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: For more information on this document,
contact Charlotte Mooney, U.S. Environmental Protection Agency, Office
of Resource Conservation and Recovery, Mail Code 5303P, 1200
Pennsylvania Ave. NW, Washington, DC 20460; telephone (703) 308-7025 or
(email) [email protected].
SUPPLEMENTARY INFORMATION:
How can I get copies of this document and other related information?
This Federal Register proposed rule and supporting documentation
are available in a docket EPA has established for this action under
Docket ID No. EPA-HQ-OLEM-2019-0086. All documents in the docket are
listed in the https://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically at
https://www.regulations.gov or in hard copy at EPA/DC, WJC West, Room
3334, 1301 Constitution Ave. NW, Washington, DC 20460. This Docket
Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (202)
566-0276. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m.,
Monday through Friday, excluding legal holidays. The telephone number
for the Public Reading Room is (202) 566-1744.
Table of Contents
I. Executive Summary
A. Overview
B. Purpose of This Action
C. Summary of the Major Provisions of the Regulatory Action
D. Costs and Benefits of the Regulatory Action
II. Authority
III. Background Information
A. Overview of Section 108(b) and other CERCLA Provisions
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
3. 2014 Petition for Writ of Mandamus
4. Additional Classes 2017 Notice of Intent To Proceed With
Rulemakings
IV. Statutory Interpretation
V. Approach To Developing This Proposed Rule
VI. Chemical Manufacturing Industry Overview
A. Identification of Chemical Manufacturing Industry
B. Overview of Current Industry Operation
C. Industry Economic Profile
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
B. Role of Federal and State Programs and Voluntary Protective
Industry Practices at Facilities in the Chemical Manufacturing
Industry
C. Existing State and Federal Financial Responsibility Programs
D. Compliance and Enforcement History
VIII. Decision to Not Propose Requirements
A. Solicitation of Public Comment on This Proposal
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
I. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
I. Executive Summary
A. Overview
Section 108(b) of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) directs EPA to develop
regulations that require classes of
[[Page 10129]]
facilities to establish and maintain evidence of financial
responsibility consistent with the degree and duration of risk
associated with the production, transportation, treatment, storage, or
disposal of hazardous substances. The statute further requires that the
level of financial responsibility be established to protect against the
level of risk that the President, in his discretion, believes is
appropriate, based on factors including the payment experience of the
Hazardous Substance Superfund (Fund). The President's authority under
this section for non-transportation-related facilities has been
delegated to the EPA Administrator.
This proposal is based on EPA's interpretation of the statute and
analysis of its record developed for this rulemaking.\1\ EPA has
analyzed the need for financial responsibility based on risk of
taxpayer funded cleanups at facilities in the Chemical Manufacturing
Industry operating under modern management practices and modern
environmental regulations, i.e., the type of facilities to which
financial responsibility regulations would apply.
---------------------------------------------------------------------------
\1\ EPA's interpretation of the statute was upheld by the D.C.
Circuit in Idaho Conservation League v. Wheeler, No. 18-1141, slip
op. at 9-12 (D.C. Cir. July 19, 2019).
---------------------------------------------------------------------------
That risk is identified by examining the management of hazardous
substances at such facilities, as well as by examining Federal and
state regulatory controls on that management and Federal and state
financial responsibility requirements.
Based on that examination, EPA is proposing that, in the context of
CERCLA section 108(b), the degree and duration of risk associated with
the modern production, transportation, treatment, storage or disposal
of hazardous substances by the Chemical Manufacturing Industry does not
present a level of risk of taxpayer funded response actions that
warrant imposition of financial responsibility requirements for this
sector.
In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a lawsuit in the U.S. Court of Appeals for the
District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial responsibility rules for
the hardrock mining industry, and for the three additional industries
identified by EPA in the 2010 Advance Notice of Proposed Rulemaking
(ANPRM),\2\ that is, Chemical Manufacturing; Petroleum and Coal
Products Manufacturing; and Electric Power Generation, Transmission,
and Distribution. Following oral arguments, EPA and the petitioners
submitted a Joint Motion for an order on Consent, filed on August 31,
2015, which included a schedule for further administrative proceedings
under CERCLA Section 108(b). The court order granting the motion was
issued on January 29, 2016. A copy of the order can be found in the
docket for this rulemaking.
---------------------------------------------------------------------------
\2\ 75 FR 816 (Jan. 6, 2010).
---------------------------------------------------------------------------
In addition to requiring EPA to publish a proposed rule on hardrock
mining financial requirements by December 1, 2016, the January 2016
order required EPA to sign for publication in the Federal Register a
determination whether EPA will issue a notice of proposed rulemaking on
financial assurance requirements under Section 108(b) in the (a)
chemical manufacturing industry; (b) petroleum and coal products
manufacturing industry; and (c) electric power generation,
transmission, and distribution industry by December 1, 2016. EPA signed
the required determination on December 1, 2016; the notice was
published on January 11, 2017 \3\ and announced EPA's intent to proceed
with rulemakings for all three of the classes.
---------------------------------------------------------------------------
\3\ 82 FR 3512 (Jan. 11, 2017).
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B. Purpose of This Action
The purpose of this action is to propose that financial
responsibility requirements under CERCLA Section 108(b) at facilities
in the Chemical Manufacturing industry are not necessary and to solicit
comments on this proposal. EPA has reached this conclusion based on the
analyses described in Parts VI and VII of this proposal. The evidence
provided in these analyses contributed to EPA's proposed finding that
the degree and duration of risk posed by the Chemical Manufacturing
industry does not warrant financial responsibility requirements under
CERCLA Section 108(b).
The analysis and proposed finding in this proposal are not
applicable to and do not affect, limit, or restrict EPA's authority (1)
to take a response action or enforcement action under CERCLA with
respect to any facility in the Chemical Manufacturing industry,
including any currently operating facilities or those described in this
proposal and in the background documents for this proposal, and (2) to
include requirements for financial responsibility as part of such
response action. The set of facts in the rulemaking record related to
the individual facilities discussed in this proposed rulemaking support
the Agency's proposal not to issue financial responsibility
requirements under Section 108(b) for this class. At the same time, a
different set of facts could demonstrate a need for a CERCLA response
action at an individual site. This proposed rulemaking also does not
affect the Agency's authority under other authorities that may apply to
individual facilities, such as the Clean Air Act (CAA), the Clean Water
Act (CWA), the Resource Conservation and Recovery Act (RCRA), and the
Toxic Substances Control Act (TSCA).
C. Summary of the Major Provisions of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Chemical Manufacturing industry. Thus, there are no proposed regulatory
provisions associated with this action.
D. Costs and Benefits of the Regulatory Action
EPA is proposing to not require evidence of financial
responsibility under CERCLA Section 108(b) at facilities in the
Chemical Manufacturing industry. EPA, therefore, has not conducted a
Regulatory Impact Analysis for this action.
II. Authority
This proposed rule is issued under the authority of Sections 101,
104, 108 and 115 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C 9601,
9604, 9608 and 9615, and Executive Order 12580 (52 FR 2923, January 29,
1987).
III. Background Information
A. Overview of Section 108(b) and Other CERCLA Provisions
CERCLA, as amended by the Superfund Amendments and Reauthorization
Act of 1986 (SARA), establishes a comprehensive environmental response
and cleanup program. Generally, CERCLA authorizes EPA \4\ to undertake
removal or remedial actions in response to any release or threatened
release into the environment of ``hazardous substances'' or, in some
circumstances, any other ``pollutant or
[[Page 10130]]
contaminant.'' As defined in CERCLA Section 101, removal actions
include actions to ``prevent, minimize, or mitigate damage to the
public health or welfare or to the environment,'' and remedial actions
are ``actions consistent with [a] permanent remedy[.]'' Remedial and
removal actions are jointly referred to as ``response actions.'' CERCLA
Section 111 authorizes the use of the Hazardous Substance Superfund
established under title 26, United States Code, to finance response
actions undertaken by EPA. In addition, CERCLA Section 106 gives EPA
\5\ authority to compel action by liable parties in response to a
release or threatened release of a hazardous substance that may pose an
``imminent and substantial endangerment'' to public health or welfare
or the environment.
---------------------------------------------------------------------------
\4\ Although Congress conferred the authority for administering
CERCLA on the President, most of that authority has since been
delegated to EPA. See Exec. Order No. 12580, 52 FR 2923 (Jan. 23,
1987). The executive order also delegates to other Federal agencies
specified CERCLA response authorities at certain facilities under
those agencies' ``jurisdiction, custody or control.''
\5\ CERCLA Sections 106 authority is also delegated to other
Federal agencies in certain circumstances. See Exec. Order No.
13016, 61 FR 45871 (Aug. 28, 1996).
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CERCLA Section 107 imposes liability for response costs on a
variety of parties, including certain past owners and operators,
current owners and operators, and certain generators, arrangers, and
transporters of hazardous substances. Such parties are liable for
certain costs and damages, including all costs of removal or remedial
action incurred by the Federal Government, so long as the costs
incurred are ``not inconsistent with the national contingency plan''
(the National Oil and Hazardous Substances Pollution Contingency Plan
or NCP).\6\ Section 107 also imposes liability for natural resource
damages and health assessment costs.\7\
---------------------------------------------------------------------------
\6\ CERCLA Section 107 (a)(4)(A).
\7\ CERCLA Section 107 (a)(4)(C)-(D).
---------------------------------------------------------------------------
Section 108(b) establishes authority to require owners and
operators of classes of facilities to establish and maintain evidence
of financial responsibility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' In turn,
Section 108(b)(2) directs that the level of financial responsibility
shall be initially established, and, when necessary, adjusted to
protect against the level of risk that EPA in its discretion believes
is appropriate based on the payment experience of the Fund, commercial
insurers, court settlements and judgments, and voluntary claims
satisfaction. Section 108(b)(2) does not, however, preclude EPA from
considering other factors in addition to those specifically listed. The
statute prohibited promulgation of such regulations before December
1985.
In addition, Section 108(b)(1) provides for publication within
three years of the date of enactment of CERCLA of a ``priority notice''
identifying the classes of facilities for which EPA would first develop
financial responsibility requirements. It also directs that priority in
the development of requirements shall be accorded to those classes of
facilities, owners, and operators that present the highest level of
risk of injury.
B. History of Section 108(b) Rulemakings
1. 2009 Identification of Priority Classes of Facilities for
Development of CERCLA Section 108(b) Financial Responsibility
Requirements
On March 11, 2008, Sierra Club, Great Basin Resource Watch, Amigos
Bravos, and Idaho Conservation League filed suit in the U.S. District
Court for the Northern District of California against then EPA
Administrator Stephen Johnson and then Secretary of the U.S. Department
of Transportation Mary E. Peters. Sierra Club, et al. v. Johnson, No.
08-01409 (N. D. Cal.). On February 25, 2009, that court ordered EPA to
publish the Priority Notice required by CERCLA Section 108(b)(1) later
that year. The 2009 Priority Notice and supporting documentation
presented the Agency's conclusion that hardrock mining facilities would
be the first class of facilities for which EPA would issue CERCLA
Section 108(b) requirements.\8\ Additionally, the 2009 Priority Notice
stated EPA's view that classes of facilities outside of the hardrock
mining industry may warrant the development of financial responsibility
requirements.\9\ The Agency committed to gather and analyze data on
additional classes of facilities and to consider them for possible
regulation. The court later dismissed the remaining claims.
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\8\ 74 FR 37214 (July 28, 2009).
\9\ Id. at 37218.
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2. Additional Classes 2010 Advance Notice of Proposed Rulemaking
On January 6, 2010, EPA published an Advance Notice of Proposed
Rulemaking (ANPRM),\10\ in which the Agency identified three additional
industrial sectors for the development, as necessary, of proposed
Section 108(b) regulation. To develop the list of additional classes
for the 2010 ANPRM, EPA used information from the CERCLA National
Priorities List (NPL) and analyzed data from the RCRA Biennial Report
(BR) and the Toxics Release Inventory (TRI).
---------------------------------------------------------------------------
\10\ 75 FR 816 (Jan. 6, 2010).
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EPA specifically requested public comment in the 2010 ANPRM on
whether to propose a regulation under CERCLA Section 108(b) for each of
the three industries, or any class or classes within those industries,
including information demonstrating why such financial responsibility
requirements would or would not be appropriate for those particular
classes. In addition, the Agency requested information related to the
industry categories discussed in the ANPRM, including data on facility
operations, information on past and expected future environmental
response actions, use of financial responsibility mechanisms by the
industry categories, existing financial responsibility requirements,
and other information the Agency might consider in setting financial
responsibility levels. Finally, EPA requested information from the
insurance and financial sectors related to instrument availability and
implementation, and to potential instrument conditions.\11\ Comments
received on the ANPRM are summarized in the Additional Classes 2017
Notice of Intent to Proceed with Rulemakings, section III.B.4 below.
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\11\ 75 FR 816, 830-831 (Jan. 6, 2010).
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3. 2014 Petition for Writ of Mandamus
In August 2014, the Idaho Conservation League, Earthworks, Sierra
Club, Amigos Bravos, Great Basin Resource Watch, and Communities for a
Better Environment filed a new lawsuit in the U.S. Court of Appeals for
the District of Columbia Circuit, seeking a writ of mandamus requiring
issuance of CERCLA Section 108(b) financial assurance rules for the
hardrock mining industry and for three other industries: Chemical
manufacturing; petroleum and coal products manufacturing; and electric
power generation, transmission, and distribution. Thirteen companies
and organizations representing business interests in the hardrock
mining and other sectors sought to intervene in the case.
Following oral argument, the court issued an order in May 2015
requiring the parties to submit, among other things, supplemental
submissions addressing a schedule for further administrative
proceedings under CERCLA Section 108(b). Petitioners and EPA requested
an order from the court with a schedule calling for the Agency to sign
a proposed rule for the hardrock mining industry by December 1, 2016,
and a final rule by December 1, 2017. The joint motion also included a
[[Page 10131]]
requested schedule for the additional industry classes, which called
for EPA to sign by December 1, 2016, a determination on whether EPA
would issue a notice of proposed rulemaking for classes of facilities
in any or all of the other industries, and a schedule for proposed and
final rules for the additional industry classes as follows:
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the first additional industry by July 2,
2019, and sign for publication in the Federal Register a notice of
its final action by December 2, 2020.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the second additional industry by December
4, 2019, and sign for publication in the Federal Register a notice
of its final action by December 1, 2021.
EPA will sign for publication in the Federal Register a notice
of proposed rulemaking in the third additional industry by December
1, 2022, and sign for publication in the Federal Register a notice
of its final action by December 4, 2024.\12\
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\12\ In Re: Idaho Conservation League, No. 14-1149 (D.C. Cir.
Jan. 29, 2016) (order granting joint motion).
While the joint motion identified the three additional industries
as the Chemical Manufacturing industry, the Petroleum and Coal Products
Manufacturing industry, and the Electric Power Generation, Transmission
and Distribution industry, and set a rulemaking schedule, the motion
did not indicate which industry would be the first, second or third.
The Joint Motion specified that it did not alter the Agency's
discretion as provided by CERCLA and administrative law.\13\
---------------------------------------------------------------------------
\13\ See Joint Motion at 6 (``Nothing in this Joint Motion
should be construed to limit or modify the discretion accorded EPA
by CERCLA or the general principles of administrative law.'')
---------------------------------------------------------------------------
On January 29, 2016, the court granted the joint motion and issued
an order that mirrored the submitted schedule in substance. The order
did not mandate any specific outcome of the rulemakings.\14\ The court
order can be found in the docket for this rulemaking. The signing of
this proposed rule by December 1, 2022, will satisfy one component of
the court order.
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\14\ In granting the Joint Motion, the court expressly stated
that its order ``merely requires that EPA conduct a rulemaking and
then decide whether to promulgate a new rule--the content of which
is not in any way dictated by the [order].'' In re Idaho
Conservation League, at 17 (quoting Defenders of Wildlife v.
Perciasepe, 714 F.3d 1317, 1324 (D.C. Cir. 2013).
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4. Additional Classes 2017 Notice of Intent To Proceed With Rulemakings
Consistent with the January 2016 court order, EPA signed on
December 1, 2016, a determination regarding rulemakings for the
additional classes--a Notice of Intent to Proceed with Rulemakings for
all three of the classes. The notice was published in the Federal
Register on January 11, 2017.\15\
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\15\ 82 FR 3512 (Jan. 11, 2017).
---------------------------------------------------------------------------
The notice formally announced EPA's intention to move forward with
the regulatory process and to publish a notice of proposed rulemaking
for classes of facilities within the three industries identified in the
2010 ANPRM. The announcement in the notice was not a determination that
requirements were necessary for any or all of the classes of facilities
within the three industries, or that EPA would propose such
requirements. In addition, the notice gave an overview of some of the
comments received on the 2010 ANPRM and initial responses to those
comments. The comments on the ANPRM which specifically addressed the
need for CERCLA Section 108(b) regulation for the three additional
classes fell into four categories: (1) Other laws with which the
industry complies that obviate the need for CERCLA Section 108(b)
regulation; (2) the sources of data that EPA used to select the
industries; (3) past versus current practices within each industry; and
(4) the overall need for financial responsibility for each industry. In
discussing the ANPRM comments in the 2017 notice, the Agency stated its
intent to use other, more industry-specific and more current sources of
data to identify risk; to consider site factors that reduce risks,
including those that result from compliance with other regulatory
requirements; and to develop a regulatory proposal for each rulemaking.
At the time of the 2017 notice, EPA had not identified sufficient
evidence to determine that the rulemaking process was not warranted,
nor had EPA identified sufficient evidence to establish CERCLA Section
108(b) requirements. The notice described a process to gather and
analyze additional information to support the Agency's ultimate
decision, including further evaluation of the classes of facilities
within the three industry sectors. The notice stated that EPA would
decide whether proposing requirements was necessary and, accordingly,
that EPA would propose appropriate requirements or would propose not to
impose requirements.
5. CERCLA Section 108(b) Proposal for Facilities in the Electric Power
Generation, Transmission, and Distribution Industry
On July 29, 2019, EPA published a notice of proposed rulemaking on
the first of the three additional industries. In that notice, the
Agency proposed to not impose financial responsibility requirements for
the Electric Power Generation, Transmission, and Distribution industry
and described the analyses and results that were used to reach that
decision. The court's January 2016 order requires that a final action
on the first additional industry be signed by December 2, 2020.\16\
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\16\ 84 FR 36535 (Jul. 29, 2019).
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IV. Statutory Interpretation
CERCLA Section 108(b) provides general instructions on how to
determine what financial responsibility requirements to impose for a
particular class of facility. Section 108(b)(1) directs EPA to develop
regulations requiring owners and operators of facilities to establish
evidence of financial responsibility ``consistent with the degree and
duration of risk associated with the production, transportation,
treatment, storage, or disposal of hazardous substances.'' Section
108(b)(2) directs that the ``level of financial responsibility shall be
initially established and, when necessary, adjusted to protect against
the level of risk'' that EPA ``believes is appropriate based on the
payment experience of the Fund, commercial insurers, courts settlements
and judgments, and voluntary claims satisfaction.'' EPA interprets the
risk to be addressed by financial assurance under Section 108(b) to be
the risk of the need for taxpayer financed response actions. Read
together, the statutory language on determining the degree and duration
of risk and on setting the level of financial responsibility confers a
significant amount of discretion on EPA.
Section 108(b)(1) directs EPA to evaluate risk from a selected
class of facilities, but it does not suggest that a precise calculation
of risk is either necessary or feasible. Although the cost of response
associated with a particular site can be ascertained only once a
response action is required, any financial responsibility requirements
imposed under Section 108(b) would be imposed before any such response
action was identified. The statute thus necessarily confers on EPA wide
latitude to determine, in a Section 108(b) rulemaking proceeding, what
[[Page 10132]]
degree and duration of risk are presented by the identified class.
Section 108(b)(2) in turn directs that EPA establish the level of
financial responsibility that EPA in its discretion believes is
appropriate to protect against the risk. This statutory direction does
not specify a methodology for the evaluation. Rather, this decision is
committed to the discretion of the EPA Administrator. While the statute
provides a list of information sources on which EPA is to base its
decision--the payment experience of the Superfund, commercial insurers,
courts settlements and judgments, and voluntary claims satisfaction--
the statute does not indicate that this list of factors is exclusive,
nor does it specify how the information from these sources is to be
used, such as by indicating how these categories are to be weighted
relative to one another.
EPA believes that sections 108(b)(1) and (b)(2) are sufficiently
interrelated that it is appropriate to evaluate the degree and duration
of risk under subsection (b)(1) by considering the factors enumerated
in subsection (b)(2). EPA therefore concludes that Congress intended
the risk associated with a particular class of facilities to mean the
risk of future Fund-financed cleanup actions in that industry. This
reading is supported by the structure of the statute, as Section 108(b)
appears between two provisions related to cost recovery. Section
108(a), concerning financial assurance requirements for certain
vessels, refers specifically to cleanup costs. And Section 108(c),
concerning recovery of costs from guarantors who provide the financial
responsibility instruments, refers specifically to liability for
cleanup costs. EPA thus reads ``risk'' in Section 108(b) consistent
with its meaning in sections 108(a) and (c); that is, the risk of Fund-
financed cleanup. EPA adopted this interpretation in assessing the need
for financial responsibility requirements under CERCLA Section 108(b)
for facilities in the first class of facilities it evaluated: The
Hardrock Mining industry.\17\ In its opinion deciding the challenge to
the Final Action for the Hardrock Mining industry, the U.S. Court of
Appeals for the District of Columbia Circuit held that EPA's
interpretation that the provisions of Section 108(b) ``relate only to
ensuring against financial risks associated with cleanup costs,'' is
reasonable and entitled to deference.\18\
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\17\ 83 FR 7556, 7561-62 (Feb. 21, 2018).
\18\ Idaho Conservation League v. Wheeler, No. 18-1141, slip op.
at 12 (D.C. Cir. July 19, 2019).
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For the Chemical Manufacturing industry, EPA has investigated the
payment history of the Fund, and enforcement settlements and judgments,
to evaluate, in the context of this CERCLA Section 108(b) rulemaking,
the risk of a Fund-financed response action at facilities that would be
subject to CERCLA financial responsibility requirements. The statute
also authorizes EPA to consider the existence of Federal and state
regulatory requirements, including any financial responsibility
requirements. Section 108(b)(1) directs EPA to promulgate financial
responsibility requirements ``in addition to those under subtitle C of
the Solid Waste Disposal Act and other Federal law.'' According to the
1980 Senate Report on legislation that was later enacted as CERCLA,
Congress considered it appropriate for EPA to examine those additional
requirements when evaluating the degree and duration of risk under what
was later enacted as CERCLA Section 108(b):
The bill requires also that facilities maintain evidence of
financial responsibility consistent with the degree and duration of
risks associated with the production, transportation, treatment,
storage, and disposal of hazardous substances. These requirements
are in addition to the financial responsibility requirements
promulgated under the authority of Section 3004(6) of the Solid
Waste Disposal Act. It is not the intention of the Committee that
operators of facilities covered by Section 3004(6) of that Act be
subject to two financial responsibility requirements for the same
dangers.\19\
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\19\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
While the Senate Report mentions RCRA Section 3004(6) specifically,
it is consistent with congressional intent for EPA to consider other
potentially duplicative Federal financial responsibility requirements
when examining the ``degree and duration of risk'' in the context of
CERCLA Section 108(b) to determine whether and what financial
responsibility requirements are appropriate. It is also consistent with
congressional intent for EPA to consider state laws before imposing
additional Federal financial responsibility requirements.
Consideration of state laws before developing financial
responsibility regulations is consistent with CERCLA Section 114(d),
which prevents states from imposing financial responsibility
requirements for liability for releases of the same hazardous
substances after a facility is regulated under Section 108 of CERCLA.
Just as Congress intended to prevent states from imposing duplicative
financial assurance requirements after EPA had acted to impose such
requirements under Section 108, it is reasonable to also conclude that
Congress did not mean for EPA to disrupt existing state programs that
are successfully regulating industrial operations to minimize risk,
including the risk of taxpayer liability for response actions under
CERCLA, and that specifically include appropriate financial assurance
requirements under state law. Reviews of both state programs and other
Federal programs help to identify whether and at what level there is
current risk that is appropriate to address under CERCLA Section 108.
EPA also believes that, when evaluating whether and at what level
it is appropriate to require evidence of financial responsibility, EPA
should examine information on Chemical Manufacturing facilities
operating under modern conditions. In other words, EPA should assess
the types of facilities to which any new financial responsibility
regulations would apply. Financial responsibility requirements under
Section 108(b) would not apply to legacy operations that are no longer
operating. Rather, any requirements would apply to facilities that
follow current industry practices and are subject to the modern
regulatory framework (i.e., the regulations currently in place that
apply to this industry). These modern conditions include state and
Federal regulatory requirements and financial responsibility
requirements that currently apply to operating facilities. This reading
of Section 108(b) is consistent with statements in the legislative
history of the statute. The1980 Senate Report states that the
legislative language that became Section 108(b) ``requires those
engaged in businesses involving hazardous substances to maintain
evidence of financial responsibility commensurate with the risk which
they present.'' \20\ This approach is also consistent with the analysis
that EPA undertook, in developing its Final Action on Financial
Responsibility Requirements Under CERCLA Section 108(b) for Classes of
Facilities in the Hardrock Mining Industry.\21\ EPA's approach was
recently upheld by the U.S. Court of Appeals for the District of
Columbia Circuit.\22\
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\20\ S. Rept. 96-848 (2d Sess, 96th Cong.), at 92.
\21\ 83 FR 7556 (Feb. 21, 2018).
\22\ Idaho Conservation League v. Wheeler, No. 18-1141 (D.C.
Cir. July 19, 2019).
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This statutory interpretation is reflected in today's proposal. Any
financial responsibility requirements imposed under Section 108(b)
would apply to currently operating facilities.
[[Page 10133]]
EPA thus sought to examine the extent to which hazardous substance
management at currently operating Chemical Manufacturing facilities as
a class continues to present risk. Moreover, the statutory direction to
identify requirements consistent with identified risks guides EPA's
interpretation that imposition of financial responsibility requirements
under Section 108(b) would not be necessary for currently operating
facilities that present minimal current risk of a Fund-financed
response action. The interpretation in this proposal does not extend to
any site-specific determinations of risk made in the context of
individual CERCLA site responses. Those decisions will continue to be
made in accordance with preexisting procedures.
EPA thus examined records of releases of hazardous substances from
facilities operating under a current regulatory framework and data on
the actions taken and expenditures incurred in response to such
releases. The data collected do not reflect historical practices, many
of which would be illegal under current environmental laws and
regulations. Instead, EPA has considered current Federal and state
regulation of hazardous substance production, transportation,
treatment, storage, or disposal applicable to facilities in the
Chemical Manufacturing industry.
V. Approach To Developing This Proposed Rule
Based on the statutory interpretation described above, EPA
developed an analytical approach to determine whether the current risk
under the modern regulatory framework within the Chemical Manufacturing
industry rises to the level that warrants imposition of financial
responsibility requirements under CERCLA Section 108(b). Specifically,
EPA designed the analytical approach to determine the need for
financial responsibility for this industry based on the degree and
duration of risk of a Fund-financed response action associated with the
industry's production, transportation, treatment, storage, or disposal
of hazardous substances.
The approach, described in detail below, looks at risks by
examining records of releases of hazardous substances from facilities
in the industry in combination with the payment history of the Fund and
enforcement settlements and judgments. To enable EPA to base its
decision on risk posed by facilities operating under modern conditions,
i.e., the types of facilities to which financial responsibility
requirements would apply, EPA developed an approach to identify and
consider relevant state and Federal regulatory requirements and
financial responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices.
EPA sought to determine the level of risk of a Fund-financed
response action at current Chemical Manufacturing operations. Relevant
to this decision are requirements of existing regulatory programs and
voluntary practices, including existing financial responsibility
requirements, which can reduce costs to the taxpayer; EPA's experience
with cleanups in the Chemical Manufacturing industry; and enforcement
actions, which may reduce the need for Federally-financed response
action at facilities in the Chemical Manufacturing industry.
As part of scoping the Chemical Manufacturing industry for this
proposal, EPA sought to understand general characteristics of the
industry that may be relevant to financial responsibility under Section
108(b). To do this, EPA compiled industry features, including the types
of activities undertaken and wastes handled or produced. Additionally,
EPA looked at the financial condition of the industry to assess the
ability of facilities in this class to pay for any environmental
obligations they may incur. Discussion of these aspects of the industry
is included in section VI of this proposal.
Section VII.A describes EPA's evaluation of cleanup cases at
facilities in the Chemical Manufacturing industry. So-called ``cleanup
cases'' are sites in the Chemical Manufacturing industry where releases
and cleanup actions occurred. To perform this evaluation EPA developed
an analytic approach that considered cleanup cases to identify risk at
currently operating facilities and where taxpayer funds were expended
for response action. EPA first examined each site to determine the
nature and timing of release. EPA used this information to determine if
releases occurred under current regulations. As an initial screen,
releases that occurred prior to 1980 were deemed to be legacy releases
that occurred before the advent of the modern environmental regulatory
framework and were therefore screened out of our analysis. Once EPA
identified those sites with more recent releases occurring under a
modern regulatory framework, EPA then focused on those response actions
that were paid for by the taxpayer by looking at those sites with Fund-
financed cleanup activity.
As described in section VII.B, to understand the modern regulatory
framework applicable to currently operating facilities within the
Chemical Manufacturing industry, EPA compiled applicable Federal and
state regulations. Specifically, EPA looked to regulations that address
the types of releases identified in the cleanup cases. This review also
considered industry voluntary programs that could reduce risk of
releases. EPA also identified financial responsibility regulations that
apply to facilities in the Chemical Manufacturing industry in section
VII.C, and compliance and enforcement history for the relevant
regulations in section VII.D.
EPA considered payments from commercial insurers as well but
determined that it was not necessary to conduct a detailed analysis of
this potential information source in light of the analyses of cleanup
cases and enforcement data. The cleanup cases and enforcement data, in
addition to addressing the payment experience of the Fund, court
settlements and judgments, and voluntary claims satisfaction, also
encompasses amounts from commercial insurance payments. For example, at
three of the Chemicals Manufacturing NPL sites identified and reviewed,
EPA recovered funds from a commercial insurer that had issued a policy
to a potentially responsible party (PRP) that was a liable party at all
three sites. Furthermore, payments from commercial insurers may have
helped finance the work conducted by PRPs in the cleanup cases
identified or may have been included in settlements, judgments, or
enforcement cases identified by EPA. However, in the event there were
significant payments from commercial insurers associated with
facilities in the Chemical Manufacturing industry that were not already
indirectly captured, this information would neither indicate greater
risk to the Fund nor suggest a need for financial responsibility
requirements under CERCLA Section 108(b).
In considering how to structure its analysis and what data sources
to examine, EPA reviewed prior analysis done for selection of industry
classes in the 2010 ANPRM and public comments responding to EPA's
approach. In the public comment period for the ANPRM, EPA received a
total of 67 comments from 30 commenters on the Chemical Manufacturing
industry, Petroleum and Coal Products Manufacturing industry, and the
Electric Power Generation, Transmission, and Distribution industry. In
addition, EPA received five comments to the Hardrock Mining Proposed
Rule that were related to the additional classes of facilities.
[[Page 10134]]
EPA received comments from the American Chemistry Council and the
Society of Chemical Manufacturers and Affiliates, among others.
Commenters indicated that EPA should concentrate on current practices
and not legacy contamination. Commenters also said that EPA should not
impose financial responsibility requirements on facilities that are
already subject to other Federal laws. Lastly, many commenters believe
that EPA placed too much emphasis on TRI data and RCRA BR data and
expressed their opinions that these data sources are not designed or
intended to provide risk-based information.
In its 2017 Notice of Intent to Proceed with Rulemakings \23\ EPA
acknowledged limitations on information that can be gained from TRI and
BR data and announced its intention to use industry-specific and
current sources of data to identify risk for the purposes of the
rulemakings. EPA also analyzed those limitations in the final action
for the Hardrock Mining rule.\24\ Accordingly, in the analysis
conducted to assess risk in the Chemical Manufacturing industry for
this action, EPA chose not to rely on TRI and BR data. While, at the
time of the 2010 ANPRM, the Agency found those data sources appropriate
for identifying classes of facilities to examine further, the Agency
does not find the data sources valuable for assessing current risk of a
Fund-financed response action in the industry.
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\23\ 82 FR 3512 (Jan. 11, 2017).
\24\ 83 FR 7570 (Feb. 21, 2018).
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VI. Chemical Manufacturing Industry Overview
A. Identification of Chemical Manufacturing Industry
For this proposal and the associated analyses, EPA reviewed
facilities classified under the North American Industry Classification
System (NAICS) code 325. The most recent available census data lists
the size of the industry at 13,480 establishments nationally.\25\
Chemical Manufacturing facilities transform raw materials (e.g., oil,
natural gas, water, minerals, metals) into tens of thousands of
different products, including pigments, synthetic fibers, bulk
chemicals, plastics, pharmaceuticals, and consumer goods, as well as
produce inputs to agriculture, manufacturing, and construction
industries.
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\25\ 2016 Economic Census of the United States, NAICS 325.
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B. Overview of Current Industry Operation
As discussed in the approach section, to provide a backdrop for its
analyses, EPA reviewed, and characterizes here, the operation of the
chemical manufacturing industry from a broad perspective. Operational
and decommissioning practices in industrial sectors and their
associated firms can ultimately affect the ability of individual firms
to responsibly minimize their impact on human health and the
environment. Commodity chemical manufacturers create products in large
quantities under continuous processing conditions, generally in large
volumes in response to homogenous specifications. Specialty-batch
chemical manufacturers develop products for focused markets, making
complex products in small quantities that are then processed into
higher value-added products. These manufacturers change their process
lines several times a year, providing more opportunities for
environmental improvements but also making environmental compliance
more complicated. To consider the potential for releases as part of its
decision making, EPA prepared a high-level review of industry practices
and the environmental profile of the Chemical Manufacturing industry,
which includes a summary of relevant operational and decommissioning
materials and wastes in a background document, which is available in
the docket for this rulemaking.\26\
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\26\ Chemical Manufacturing Industry Practices and Environmental
Characterization.
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Potentially hazardous materials are frequently used in this
industry. These materials can include a large variety of chemicals and
compounds. The many different processes used in the Chemical
Manufacturing industry result in many different wastes. Typical wastes
from Chemical Manufacturing facilities can include, for example, spent
solvents, distillation bottoms and side-cuts, off-specification and
unused chemicals, wastewater, wastewater treatment sludge, emission
control sludges, filter cake, spent catalysts, byproducts, reactor
cleanout wastes, and container residues. Chemical Manufacturing
facilities typically handle large volumes of chemicals using above and
below ground bulk storage tanks, transfer equipment, process piping,
and raw material/final product storage areas. Due to the nature of this
industry, it is not surprising that it generates high volumes of
hazardous waste.\27\
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\27\ According to the 2017 Hazardous Waste Report, facilities in
this sector reported the generation of 21.7 million tons of
hazardous waste. https://rcrapublic.epa.gov/rcrainfoweb/action/modules/br/naics.
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Some wastes may be found on site in surface impoundments, bulk
storage tanks, waste piles, and disposal pits. All these areas may
contribute to soil and groundwater contamination. Decommissioning
wastes can include all the chemicals and substances listed above, as
well as contaminated soil and building materials, sludges,
neutralization liquids, and cleaning solvents. If such wastes are
hazardous, then they must be managed in accordance with RCRA
regulations.
Industry practices in certain subsectors of the Chemical
Manufacturing industry, including All Other Basic Organic Chemical
Manufacturing (325199), Other Basic Inorganic Chemical Manufacturing
(325180), Cyclic Crude, Intermediate, and Gum and Wood Chemical
Manufacturing (325194), and Synthetic Dye and Pigment Manufacturing
(325130), use more hazardous substances and generate larger volumes of
hazardous waste. Several sectors use fewer hazardous substances and
generate lower amounts of hazardous waste, including Custom Compounding
of Purchased Resins (325991), Printing Ink Manufacturing (325910),
Polish and other Sanitation Good Manufacturing (325612), Phosphatic
Fertilizer Manufacturing (325312), and Ethyl Alcohol Manufacturing
(325193). Further information on industry practices is provided in the
background document for this section, which is available in the docket
for this rulemaking.\28\
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\28\ Chemical Manufacturing Industry Practices and Environmental
Characterization.
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Sites contaminated by the industry contain a wide variety of
contaminants, including but not limited to toxic organics, such as
benzene, polychlorinated biphenyls (PCBs), phenol, and volatile organic
hydrocarbons (VOCs); chemical substances, such as benzo(b)fluoranthene,
carbon tetrachloride, methyl methacrylate, methylene chloride,
nitroglycerin, phosphoric acid, and sodium hypochlorite; and metals,
such as arsenic, barium, cadmium, chromium, iron, lead, manganese,
mercury, thorium, and zinc.
Facilities in the Chemical Manufacturing industry are subject to a
wide range of environmental regulation and enforcement oversight as
discussed in Sections VII.B and VII.D below, and have adopted voluntary
practices that can be effective at reducing pollution, as discussed in
Section VII C.
[[Page 10135]]
C. Industry Economic Profile
Economic trends and financial health in industrial sectors and
their associated firms can ultimately affect the ability of individual
firms to responsibly address their environmental liabilities.
Circumstances in which firms face financial stress can potentially
contribute to the abandonment of facilities and the creation of orphan
waste sites requiring cleanup. To consider the potential for firms to
default on their financial obligations, EPA prepared a high-level
economic profile of the Chemical Manufacturing industry, which includes
a summary of relevant financial metrics, industry default statistics
and trends, and a broad discussion outlining environmental liabilities
under Chapter 11 of the Bankruptcy Code. This analysis, summarized in
this section, looked at the industry as a whole and additionally
focused on four subsectors individually, providing an industry profile,
evaluation of the potential universe of regulated entities, and
discussion of the subsectors' financial health and relative volatility.
The full analysis is found in the background document for this section,
and is available in the docket for this rulemaking.\29\
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\29\ CERCLA 108(b) Economic Sector Profile: Chemical
Manufacturing Industry.
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Generally, this analysis found the sector to be financially stable
and able to pay off short-term obligations, though some subsectors
experienced declining profitability and increased risk in recent years.
Overall, financial ratios indicate healthy financial performance,
despite an overall decrease in the total value of shipments and
receipts for services in the sector. The report also notes that firms
generally remain liable for environmental compliance obligations under
Chapter 11 debt restructuring. Sections 101(5) and 1141(d) of the
Bankruptcy Code only provide for a discharge of monetary rights to
payment and not for compliance obligations where the Federal government
has not sought the payment of money.
VII. Discussion of Cleanup Sites Analysis
A. Cleanup Site Evaluations
As described in the Approach to Developing the Proposed Rule,
Section V above, to evaluate the need for financial responsibility
regulations in the Chemical Manufacturing industry, EPA sought examples
of pollution that occurred under a modern regulatory framework, and
that required a taxpayer-funded CERCLA cleanup. In its evaluation, EPA
focused first on identifying response actions at Superfund National
Priorities List (NPL) sites and sites using the Superfund Alternative
Approach (SAA),\30\ as those are generally larger cleanups both in
terms of amounts of contaminants removed and in terms of costs to carry
out these cleanups. EPA also looked at Superfund removals at non-NPL
sites.
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\30\ The Superfund Alternative Approach (SAA) uses the same
CERCLA authority and investigation and cleanup process and standards
that are used for NPL sites. The threshold criteria for using the
SAA are: (1) The site must have contamination significant enough to
make it eligible for listing on the NPL; (2) the site is anticipated
to need remedial action; and, (3) there must be a cooperative,
viable, capable PRP that will sign a CERCLA agreement with EPA to
perform the necessary cleanup.
---------------------------------------------------------------------------
To identify the relevant cleanup cases in the Chemical
Manufacturing industry, EPA included the NPL sites already identified
in the 2010 ANPRM,\31\ and supplemented the dataset with additional NPL
sites that had been identified since the ANPRM, sites using the SAA,
and non-NPL sites identified in EPA's Superfund Enterprise Management
System (SEMS) database. EPA collected information on the timing and
nature of releases or threatened releases at these sites. Specifically,
EPA sought to identify, as applicable, facility operation end dates,
release dates, sources of contamination, NPL proposal dates,
contaminated media, type of contaminant, cleanup lead, and information
on Superfund expenditures at the site, as well as other information.
For this collection, EPA relied on information previously collected as
part of the ANPRM, information available in Superfund site documents
(e.g., NPL listing narratives, Records of Decision, Action Memos, Five-
Year Reviews), and information in EPA's SEMS as of March 2018. The
cleanup case identification and site information collection processes
are described in greater detail in the relevant background documents,
which are available in the docket for this rulemaking.\32\
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\31\ 75 FR 816 (Jan. 6, 2010).
\32\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
Cleanup Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing Industry non-National Priorities List (NPL) Removal
Sites.
---------------------------------------------------------------------------
After compiling information about the risks and history of each
site, EPA sought to identify instances in which releases occurred under
the modern regulatory framework that resulted in Fund-financed response
actions. To do so, EPA's methodology applied sequenced screens to the
identified sites. EPA first screened out any NPL sites or sites using
the SAA where the contaminant release or cleanup activity occurred
before 1980. EPA chose 1980 as the cutoff point to initially screen out
legacy contamination because it was the year when CERCLA was enacted,
as well as the date of the initial regulations under RCRA Subtitle C
governing the generation, treatment, storage, and disposal of hazardous
waste. EPA chose to give these significant RCRA and CERCLA milestones
greatest consideration due to the large number of issues of waste
management, land disposal, and soil contamination identified in the
review of the NPL and SAA cases. EPA believes the 1980 cutoff date is a
conservative screen (i.e., retains more sites in the analysis) in that
only the initial RCRA regulations were in place in 1980 and they were
refined, expanded and enhanced several times over the next decades.
Moreover, the Agency's enforcement authorities expanded in the 1980s as
the RCRA program matured. Notably, the passage of the Hazardous and
Solid Waste Amendments (HSWA) in 1984 resulted in many regulatory
changes and enhanced enforcement mechanisms. More specifically, HSWA
created the Land Disposal Restrictions (LDR) program, codified in 40
CFR part 268, which prohibits the land disposal of untreated hazardous
wastes. HSWA also substantially expanded corrective action authorities
for both permitted RCRA treatment, storage and disposal (TSD)
facilities and facilities operating under interim status,\33\ requiring
facilities to address the release of hazardous wastes and demonstrate
financial responsibility for completing the required corrective
actions, further reducing the risks that sites would have to be
addressed under CERCLA. For further detail on these requirements, see
section VII. B below.
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\33\ Interim status facilities are facilities that were in
existence on the effective date of the regulations and subject to
the requirement to have a RCRA permit.
---------------------------------------------------------------------------
Next, EPA sought to remove from the analysis sites where
significant Fund expenditures had not occurred, because response
actions that were paid for by private parties do not support the need
for CERCLA Section 108(b) financial responsibility regulations. Using
the ``Action Lead'' field in SEMS associated with each site, EPA
screened out the potentially responsible party (PRP) lead sites. This
left only the Mixed Lead Construction or Government Performed
Construction sites in the analysis, under the assumption that PRP
Performed
[[Page 10136]]
Construction \34\ sites did not present significant expenses to the
Fund.
---------------------------------------------------------------------------
\34\ These terms are used in the SEMS database to identify the
party that had primary responsibility for construction at the sites.
---------------------------------------------------------------------------
EPA then reviewed the remaining sites (i.e., those with both
pollution dates of 1980 or later and Mixed Lead Construction or
Government Performed Construction designation in SEMS) individually in
greater detail. Specifically, EPA considered the site history and each
of the contamination sources at the site in the context of the
regulations that would be applicable to that facility today. More
information on the regulations EPA considered is available in Section
VII.B.
Findings from EPA's analysis of the cleanup cases are discussed
below, with more detailed information available in background documents
available in the docket for this rulemaking.\35\ These background
documents provide the list of sites identified and remaining at each
stage of the analysis, as well as the information considered in the
screening and review process.
---------------------------------------------------------------------------
\35\ Identification and Evaluation of National Priorities List
(NPL) Sites and sites using the Superfund Alternative Approach (SAA)
Cleanup Cases in the Chemical Manufacturing Industry and
Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing non-National Priorities List (NPL) Removal Sites.
---------------------------------------------------------------------------
Using the data sources described above for the Chemical
Manufacturing industry, EPA identified 199 NPL sites and eight sites
using the SAA, as well as 290 non-NPL CERCLA removal action sites,\36\
to evaluate according to the methodology described above. As explained
further below, the majority of the contamination at NPL sites and sites
using the SAA were ultimately considered to involve releases that
occurred before the modern regulatory framework or they were cases
where no taxpayer funds were used. Similarly, for the removal sites,
the majority of cases, albeit to a lesser extent as compared to NPLs,
showed no releases of hazardous substances under the modern regulatory
framework or required minimal or no taxpayer-funded cleanups, as
described below.
---------------------------------------------------------------------------
\36\ None of these 290 removal sites are associated with an NPL
site. Removal actions that have taken place at NPL sites or sites
using the SAA, either before or after listing or designation, are
tracked in SEMS as NPL or SAA level actions and not as separate
removal records.
---------------------------------------------------------------------------
The 199 NPL sites and eight sites using the SAA that were evaluated
include different industry groups within the Chemical Manufacturing
sector. While multiple manufacturing activities can occur at a site,
facilities that were engaged in manufacturing pesticides, fertilizers,
and agricultural chemicals show up more prevalently on the Chemical
Manufacturing NPL list (about 42%), closely followed by facilities
engaged in basic Chemical Manufacturing (about 39%). Other
manufacturing activities observed to a lesser extent include resin,
synthetic rubber, and artificial synthetic fibers and filaments
manufacturing, paint, coating, and adhesive manufacturing, and
``other'' types of Chemical Manufacturing activities.
A review of the history of environmental contamination at these NPL
and NPL-like sites revealed that the most common types of environmental
damage were contamination of soil and ground water (approximately 90%),
while impacts to surface water bodies were also relatively common
(nearly 60%). To a lesser extent, impact to air and sediments were also
observed. The primary source of the contamination was contaminated
soils (approximately 62% of sites) that resulted from inappropriate
waste and material handling, leaks and spills, fires and explosions,
lack of stormwater management, and poor housekeeping practices. Other
significant sources include disposal into unlined ponds and wastewater
lagoons (approximately 40%) \37\ and the abandonment of hazardous waste
and materials in drums and other containers (approximately 32%).\38\
Detailed discussions of the impacted media and sources of contamination
identified at these NPL and NPL-like sites are presented in supporting
technical background documents, which are available in the docket for
this rulemaking.\39\
---------------------------------------------------------------------------
\37\ The regulations covering management of hazardous waste in
surface impoundments are in 40 CFR part 264/265 Subpart K. Also see
discussion in Section VII.B of this notice.
\38\ The regulations covering management of hazardous waste in
containers are in 40 CFR part 264/265 Subpart I. Also see discussion
in Section VII.B of this notice.
\39\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach
(SAA)in the Chemical Manufacturing Industry.
---------------------------------------------------------------------------
After characterizing the industrial activities and contamination
history at these sites, EPA applied the screens described above to
remove PRP-Performed Construction sites and sites where the
environmental releases occurred pre-1980 to the 199 NPL sites and the
eight sites using the SAA approach. Based on these criteria, EPA
screened out 127 sites. Additionally, EPA also excluded 46 sites from
the analysis where, upon further review, the industrial activities were
found to fall outside of the relevant class of facilities under
consideration in this rulemaking. Thirty-four NPL sites remained after
those screens that were either Government Performed Construction or
Mixed Lead Construction (i.e., a combination of Government and PRP)
sites and had releases that arose in 1980 or later. None of the sites
using SAA remained after those screens.
To assess the remaining 34 sites, EPA first conducted a detailed
review to compare the environmental issues (e.g. contamination) at the
sites against the regulations applicable today. Based on the detailed
review, EPA concluded that notwithstanding the screens applied at
earlier stages of the analysis, the releases at 30 of the 34 NPL sites
resulted largely from legacy practices and contamination. An example of
such a case is Baird & McGuire Inc., a 20-acre facility in Holbrook,
Massachusetts, that operated as a chemicals manufacturing and batching
company from 1912 to 1983. EPA did not initially screen out the site
because case files on this site showed documented discharges of black
oily substances into a nearby wetland between 1981 and 1982. Despite
these releases, EPA concluded that the most significant contamination
at the site occurred largely from legacy waste disposal practices
(included direct discharge into the soil, lagoons, and wetlands) and
improper storage of chemicals during the 70 years of operation that
began in 1912. Because of these practices, on-site soil, ground water,
surface water, and municipal water supplies were contaminated, which
prompted EPA to list the site on the NPL in 1983. When these disposal
practices were assessed against today's modern regulatory framework,
the releases were all found to have occurred before the promulgation of
RCRA Subtitle C regulations. Moreover, enforcement records further
corroborate the presence of significant compliance issues at this site
before 1980, as the owner and operator had been fined at least 35 times
between 1954 and 1977 by various state and Federal agencies for
numerous violations.\40\ For discharges of oily substances into
wetlands identified post-1980s, EPA's case file also showed Baird &
McGuire had voluntarily taken actions, including removing the discharge
pipes and applying absorbent pads to the wetland to soak up the oil.
Appendix 4 of the background document provides more detailed
discussions on this site and the 29 other NPL sites that EPA deemed as
legacy issues after the detailed reviews.\41\
---------------------------------------------------------------------------
\40\ The NPL Site Narrative for Baird & McGuire, https://cumulis.epa.gov/supercpad/SiteProfiles/index.cfm?fuseaction=second.Cleanup&id=0100392#bkground.
\41\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
in the Chemical Manufacturing Industry.
---------------------------------------------------------------------------
[[Page 10137]]
Regarding the four out of the 34 NPL sites that remained after the
screens, EPA's detailed review indicated that these sites appeared to
have significant releases or threatened releases of hazardous
substances under the modern regulatory framework and required
significant taxpayer-funded cleanups. The four sites are Diaz Chemical
Corporation in Holley, New York (which operated from 1974 through
2002), Eldorado Chemical Company in Live Oak, Texas (which operated
from 1978 through 2007), Mississippi Phosphates Corporation in
Pascagoula, Mississippi (which operated from the 1950s through 2014),
and White Chemical Corporation in Newark, New Jersey (which operated
from 1983 through 1990).
In all four cases, the facilities had a long history of compliance
issues and were cited numerous times for violations under various
statutes, including CAA, CWA, and RCRA. At three of the four sites
(Diaz Chemical, Mississippi Phosphates, and White Chemical Corp.),
companies filed for bankruptcy before ceasing operations and abandoning
their sites. EPA listed three of the four sites (Diaz Chemical,
Eldorado Chemical, and Mississippi Phosphates) on the NPL post-2000.
In the cases of Diaz Chemical, Eldorado Chemical Company, and White
Chemical Corp., poor housekeeping practices, spills, and improper
handling of drums resulted in the release of a range of chemical
substances to the air, water, soil, and ground water. In addition, when
Diaz and White Chemical Corp. filed for bankruptcy and abandoned their
facilities, the owner and operators left behind hundreds of hazardous
drums and tanks containing hazardous chemicals and waste. These
releases or threatened releases occurred at these sites despite the
promulgation and implementation of applicable RCRA Subtitle C
regulations in 1980 and HSWA in 1984. Evaluation of EPA's Fund
expenditure data for these sites showed the Fund incurred over $28
million to address site contamination at Diaz Chemical and $47 million
at White Chemical Company. Fund expenditures at Eldorado Chemical were
relatively small at $568,000; however, the site was just listed on the
NPL in 2016, and Fund expenditures at the site will likely continue.
Regarding Mississippi Phosphates, the plant ceased its operations
in December 2014 following a bankruptcy. When the company abandoned the
site, more than 700 million gallons of low-pH, contaminated wastewater
was left behind in on-site ponds. Enforcement records also showed that
during its years of operation, the facility received numerous
Administrative Orders and Notices of Violation related to noncompliance
with its National Pollutant Discharge Elimination System (NPDES)
permit. The most severe violation occurred in August 2013, when the
facility released 38 Mgal of acidic water to Bayou Casotte, killing an
estimated 47,000 fish, and resulting in the company's entering a guilty
plea to a criminal violation of the Clean Water Act. More information
on this case is in the enforcement background document, which is
available in the docket.\42\
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\42\ Enforcement, Court Settlements and Judgments in the
Chemical Manufacturing Industry.
---------------------------------------------------------------------------
EPA's review of Fund expenditures showed significant Fund
expenditures at Mississippi Phosphates. Based on the limited
expenditure data obtained from Superfund's Integrated Financial
Management System (IFMS) database, EPA has spent $8.3 million as of
Fall 2018. However, in an April 2018 Action Memorandum,\43\ EPA
indicated the total cost of the removal action at this site would be
$132.6 million through December 2020. The memo also mentioned that EPA
continued to treat 2 to 4 million gallons of contaminated water each
day, which was estimated to cost $1 million a month. More detailed
information can be found in the background document and supporting
spreadsheets, which are available in the docket for this
rulemaking.\44\ The background document includes the list of sites
identified for analysis, as well as the data and information considered
in the screening and review process. The summary results of the
analysis are presented in Table 1 below.
---------------------------------------------------------------------------
\43\ 2018 Action Memorandum for a Non-Time Critical Removal
Action, Consistency Exemption Request and Ceiling Increase at
Mississippi Phosphates Corporation National Priorities List Site,
Pascagoula, Jackson County, Mississippi.
\44\ Identification and Evaluation of National Priorities List
(NPL) Sites and Sites using the Superfund Alternative Approach (SAA)
in the Chemical Manufacturing Industry.
Table 1--Evaluation Results for NPL and SAA Sites in the Chemical Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Detailed review identified a Cases with release(s) under
Total NAICS 325 NPL & SAA Number of NAICS 325 NPL & SAA Detailed review concluded possible modern regulation modern regulation that
sites evaluated sites screened out based on release occurred prior to the release but no significant required taxpayer-funded
pre-1980, or PRP lead status modern regulatory framework taxpayer expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
207 \45\ 127(46) \46\ 30 ............................. 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additionally, EPA looked at the major removal cases found in the
SEMS database to supplement this analysis. For this sector, EPA
identified 290 non-NPL removal sites. Applying the methodology, EPA
screened out 148 sites because the environmental releases occurred
before 1980 or PRPs led the response action. EPA also excluded an
additional 81 sites deemed as out of the scope because EPA determined
that the industrial activities that resulted in the release of
hazardous substances were not Chemical Manufacturing. Twenty-seven
other sites were also left out of the analysis because of insufficient
documentation (i.e., not enough to verify whether the sites included
pollution attributable to a NAICS 325 facility, or the nature/date of
the releases at the site).
---------------------------------------------------------------------------
\45\ Includes 8 sites addressed through Superfund Alternative
Approach (SAA).
\46\ The number in the parentheses indicates the sites that were
also removed at this stage of the analysis because EPA determined
the industrial activities did not involve chemical manufacturing.
---------------------------------------------------------------------------
To assess the 34 sites that remained after those screens, EPA first
conducted a detailed review of case files to compare the environmental
issues at the sites to the regulations applicable today. Based on this
assessment, EPA concluded that the releases at four removal sites were
one-time incidents (e.g., drum spill, chemical plant fire, accidental
releases to air). While these releases were all found to have occurred
after contemporary regulations, according to site documents reviewed,
the PRPs had responded to the emergencies, and none of these sites
[[Page 10138]]
required significant Fund expenditure; at one of the four sites, EPA
spent $19,500 in Fund money to conduct an air assessment.
For the remaining 30 removal sites, the releases or threatened
releases were associated mainly with the abandonment or improper
storage of drums, tanks, and other containers that contained various
chemicals, including hazardous substances and waste. In seven of these
cases, chemical explosions or fires resulted from storing incompatible
chemicals near one another. Most of these cases involved releases that
occurred since the year 2000, which EPA determined to be releases that
occurred under the modern regulatory framework that required taxpayer-
funded cleanup.
As described in more detail in the Role of Federal and State
Programs section below, the primary regulations governing the storage
and handling of hazardous chemicals have been in place since the 1980s
including: Occupational Safety and Health Act (OSHA) standards for
storage and handling of flammable liquids (29 CFR 1910.106) and
compressed gas (29 CFR 1910); Section 311 and 312 of the Emergency
Planning and Community Right-to-Know Act (EPCRA) requirements
concerning reporting of hazardous chemical inventory to local and state
emergency responders; and EPCRA Section 304 requirements for emergency
release notification for ``reportable quantity.'' In addition, drums
and tank systems used to store hazardous waste for more than 90 days,
or stored at locations that are not the site of generation, have been
regulated under RCRA (requirements found in 40 CFR parts 264 and 265)
since 1981 for drums and other containers \47\ and since 1986 for tank
systems.\48\
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\47\ 46 FR 2866 (Jan. 2, 1981).
\48\ 51 FR 25472 (Jul. 14, 1986).
---------------------------------------------------------------------------
Review of Fund expenditure data associated with these 30 sites
indicates that the Fund incurred estimated costs ranging from $30,000
to $3 million for response and enforcement activities. For 19 of the 30
sites, the Fund incurred costs under $500,000 with an average cost of
$218,000 per site. For the remaining 11 sites where the response
actions resulted in Fund expenditures above $500,000 per site, the
average cost was $1.4 million.
More detailed information can be found in the background document
and supporting spreadsheets, which are available in the docket for this
rulemaking.\49\ The background document includes the list of sites
identified for analysis, as well as the data and information considered
in the screening and review process. Table 2 presents the summarized
results of the analysis.
---------------------------------------------------------------------------
\49\ Identification and Evaluation of CERCLA 108(b) Chemical
Manufacturing non-National Priorities List (NPL) Removal Sites.
\50\ The number in parentheses indicates the sites that were
also removed at this stage in the analysis: 81 Sites for which EPA
determined the industrial activities did not involve chemical
manufacturing, and 27 sites for which there was not enough
documentation to be included in the analysis.
Table 2--Evaluation Results for Superfund Removal Sites in the Chemical Manufacturing Industry
--------------------------------------------------------------------------------------------------------------------------------------------------------
Number of NAICS 325 superfund Detailed review identified a Cases with release(s) under
Total NAICS 325 superfund removal cases screened out Detailed review concluded possible modern regulation modern regulation that
removal cases evaluated based on pre-1980, or PRP release occurred prior to the release, but no significant required taxpayer-funded
lead status modern regulatory framework taxpayer expenditures response
--------------------------------------------------------------------------------------------------------------------------------------------------------
290 148(108) \50\ ............................. 4 30
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prevalent Sources of Releases
EPA's analysis of cleanup cases compiled information, where
discernable, on the root cause of releases. Across the industry
overall, the most prevalent issue was contaminated soils that resulted
from inappropriate waste and material handling, leaks and spills, fires
and explosions, lack of stormwater management, and poor housekeeping
practices. Other significant sources include disposal into unlined
ponds and wastewater lagoons and the abandonment of hazardous waste and
materials in drums and other containers. Beyond these, a common issue
observed at removal sites but not as commonly at NPL sites, was
abandonment and improper storage of drums, tanks, and other containers
that contained various chemicals, including hazardous substances and
waste. As discussed in the next section, there are regulations in place
that address these types of releases.
B. Role of Federal and State Programs and Voluntary Protective Industry
Practices at Facilities in the Chemical Manufacturing Industry
In the 2010 ANPRM, EPA recognized that the NPL data reflects
releases arising from activity that, in some cases, predates CERCLA,
RCRA, and other modern environmental requirements. The Agency welcomed
information about current releases of hazardous substances to the
environment to help inform EPA's future actions. As discussed in the
Approach section of this proposal, to enable EPA to base its decision
on risk posed by facilities operating under modern conditions, i.e.,
the types of facilities to which financial responsibility requirements
would apply, EPA developed an approach to identify and consider
relevant state and Federal regulatory requirements and financial
responsibility requirements that currently apply to operating
facilities, as well as voluntary protective practices. EPA thus
undertook an effort to gather information about Federal and state
environmental programs and industry voluntary programs that have been
implemented and are applicable to currently operating facilities within
the Chemical Manufacturing industry today. EPA evaluated the extent to
which activities that contributed to the risk associated with the
production, transportation, treatment, storage, or disposal of
hazardous substances are now regulated. EPA recognizes that substantial
advances have been made in the development of manufacturing, pollution
control, and waste management practices, as well as the implementation
of Federal and state regulatory programs to prevent and address
releases at these facilities. In part, EPA's proposed decision to not
issue financial responsibility requirements for this industry is based
on EPA's review and analysis of Federal regulations and complemented by
state program regulations. EPA's proposed findings and conclusions
about the impact of Federal and state environmental programs, along
with industry voluntary programs, are discussed in the following
section.
[[Page 10139]]
Overview of Federal and State Regulatory Programs and Industry
Voluntary Practices Applicable to Facilities in the Chemical
Manufacturing Industry
EPA evaluated Federal and state regulations that address the
potential for release of hazardous substances to the range of
environmental media that may be affected by a release from a facility
in the Chemical Manufacturing industry. EPA found that a comprehensive
regulatory framework has developed since the enactment of CERCLA.
Federal statutes such as the CAA, CWA, TSCA, RCRA, and EPCRA are
applicable across the entire industry and lay the foundation for this
regulatory framework. Specific regulations are discussed in the
background document according to the affected media that the
regulations address: Air pollution, water pollution, emergency planning
and response, hazardous substances management, and hazardous and non-
hazardous waste management and disposal. This background document is
available in the docket for this rulemaking.\51\
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\51\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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Regulations Addressing Prevalent Sources of Releases Identified in
Analysis of Cleanup Cases
EPA's analysis of the cleanup cases found that the most prevalent
releases involved:
Soil contamination from inappropriate handling of wastes
and materials,
Releases from leaks, spills, fires, and explosions,
Lack of stormwater management,
Disposal into unlined ponds and lagoons,
Abandonment of hazardous substances and waste in drums,
tanks or other containers,
The comprehensive regulations for the management and disposal of
hazardous waste, promulgated under the authority of RCRA, were designed
to prevent these types of releases and assure that past spills are
cleaned up by facility owners and operators. Specifically, Subtitle C
of RCRA required EPA to establish a hazardous waste management program,
and EPA developed a ``cradle to grave'' approach to control the
generation, transportation, treatment, storage, and disposal of
hazardous waste.\52\ EPA's regulatory approach under RCRA includes
standards specific to types of hazardous wastes, types of hazardous
waste disposal facilities, and types of hazardous waste disposal
activities; EPA enforces these standards through permitting, reporting
and inspection programs.\53\
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\52\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act.
\53\ ``EPA History: Resource Conservation and Recovery Act,''
EPA, at: https://www.epa.gov/history/epa-history-resource-conservation-and-recovery-act; ``Summary of the Resource
Conservation and Recovery Act,'' EPA, at: https://www.epa.gov/laws-regulations/summary-resource-conservation-and-recovery-act.
---------------------------------------------------------------------------
In 1980, under the authority of RCRA Subtitle C, EPA promulgated
the initial hazardous waste management and permitting regulations.
These regulations included the identification of hazardous wastes that
would be regulated under RCRA Subtitle C. Under Subtitle C, generators
of hazardous waste are required to ensure and fully document that the
hazardous waste they produce is properly identified, managed, tracked,
and treated prior to recycling or disposal. The degree of regulation to
which each generator is subject depends to a large extent on how much
waste each generator produces every calendar month. Early in the
development of the RCRA program, EPA recognized that a relatively small
number of industrial facilities generated the majority of the nation's
hazardous waste. EPA initially focused on these large quantity
generators, i.e., those that generate 1,000 kilograms or more of non-
acute hazardous waste per month (or more than 1 kilogram of acute
hazardous waste per month). These facilities must obtain an EPA
identification number and report the quantities and types of hazardous
waste they generate, as well as the intended receiving facility for
treatment and disposal, unless the waste will be managed onsite. Large
quantity generators who send their waste offsite are responsible for
the proper packaging and labeling of the waste before transport and the
tracking of the waste to the destination facility using the uniform
hazardous waste manifest. Large quantity generators may store their
waste on site for less than 90 days before transport to a treatment and
disposal facility; that storage is subject to the same unit-specific
standards (described below) applicable to treatment, storage, and
disposal facilities.
RCRA Subtitle C also established standards for hazardous waste
treatment, storage, and disposal facilities (TSDFs). Operators that
handle or manifest hazardous waste at any point in its lifecycle,
including generators and transporters, are required to notify EPA of
these activities. To keep track, TSDF owners and operators must keep
records and make reports to EPA. TSDFs are required to track hazardous
waste they receive through EPA's hazardous waste manifest system, among
other recordkeeping and reporting standards.
RCRA Subtitle C regulations created a permitting program for
hazardous waste TSDFs. The TSDF permitting regulations include
application procedures, permit approval conditions, and monitoring and
reporting requirements. TSDFs must have permits for the entirety of the
active life of the permitted units, including during closure of waste
management units. New and existing hazardous waste TSDFs must submit a
RCRA permit application at least 180 days before the commencement of
construction and/or hazardous waste management activities.\54\ Both
permitted and interim status TSDFs must comply with general facility
operating standards, preparedness and prevention, contingency plans and
emergency procedures, as well as specific technical standards designed
to insure that hazardous waste management units such as storage tanks
and containers, landfill, surface impoundments, waste piles, land
treatment of hazardous waste, and solid waste management units are
operated in a manner that prevents releases. To minimize the potential
for leachate to threaten human health and the environment, EPA
developed design and operating standards that use a combination of
different technologies and good operating practices to detect, contain,
and clean up any leaks that might occur. To prevent releases of
hazardous waste into the environment, containers holding liquid
hazardous wastes at a permitted TSDF must have a secondary containment
system. Secondary containment is emergency short-term storage designed
to hold leaks from hazardous waste management units.
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\54\ 45 FR 33063 (May 19, 1980).
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Slightly later in the 1980s, EPA promulgated regulations that set
financial assurance requirements for TSDFs.\55\ The TSDF standards
eventually included air emission standards for process vents, equipment
leaks, tank systems, surface impoundments, and containers. The
regulations covering proper management of surface impoundments, found
in 40 CFR parts 264/265, Subpart K, require facilities that store
hazardous
[[Page 10140]]
waste in surface impoundments to meet specific design requirements,
which include a double liner system, leachate collection, and removal
systems and a leak detection system. The regulations for containers,
found in 40 CFR parts 264/265, Subpart I, include provisions regarding
design and operating requirements, and inspections. Certain 40 CFR part
265 standards also apply to hazardous waste containers at generator
sites.
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\55\ 45 FR 33063 (May 19, 1980); 47 FR 15047 (Apr. 7, 1982).
---------------------------------------------------------------------------
HSWA was enacted in 1984, largely in response to citizen concerns
that existing methods of hazardous waste disposal, particularly land
disposal, were not safe. With HSWA, Congress sought to minimize waste
generation and phase out land disposal of hazardous waste. Accordingly,
in 1986, EPA promulgated a suite of regulations that established
standards and restrictions for land disposal of hazardous waste. While
the regulations set stringent guidelines for the land disposal of
hazardous waste, some hazardous wastes and some types of land disposal
are prohibited altogether. Although there are exceptions, operators are
generally prohibited from diluting hazardous waste as a substitute for
treatment. In addition, operators can land dispose hazardous waste only
following treatment and only in appropriate land treatment units,
landfills and surface impoundments, Further, operators must meet
testing, removal, recordkeeping, and design requirements. Additional
standards, restrictions, and prohibitions are in place for hazardous
waste that exhibit ignitability, corrosivity, reactivity, or
toxicity.\56\
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\56\ 51 FR 40572 (Nov. 7, 1986).
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HSWA required that all landfills and surface impoundments install
groundwater monitoring, comply with technical requirements, such as
double liners and leachate collection, and obtain financial assurance.
The HSWA amendments also added to RCRA's regulations for small quantity
generators, facilities that generated between 100 to 1,000 kilograms
per month of hazardous waste, which were previously exempt from RCRA
rules. These small quantity generator rules took effect in 1986.
Generators of less than 100 kilograms per month of hazardous waste
(i.e., conditionally-exempt small quantity generators) remained subject
to significantly reduced requirements.\57\ EPA amended the hazardous
waste generator provisions in 2016, largely to clarify the
requirements.\58\
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\57\ Id.
\58\ 81 FR 85732 (Nov. 28, 2016).
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HSWA also established closure and post-closure requirements for
hazardous waste TSDF facilities. The regulations require facilities to
develop closure plans for all hazardous waste management units. All
TSDFs are required to prepare and submit written closure plans. A
permitted facility submits this plan as part of its permit application.
Once the plan is approved by the permitting agency, it becomes part of
the facility's operating permit. Interim status facilities \59\ must
have written closure plans within six months of becoming subject to the
closure regulations. Upon the completion of closure of a hazardous
waste disposal unit, owners and operators must submit a certification
of closure to the relevant state or EPA regional office. Following
closure, facilities must implement a post-closure plan that abides by
post-closure property use and care guidelines. The standard post-
closure care period is 30 years, but this can be shortened or extended
on a case-by-case basis by the permitting authority (i.e., the EPA
Region or the authorized state regulatory agency). Post-closure
notification and security requirements remain in place so long as
hazardous waste is present at the facility, even after the 30-year
post-closure period.\60\
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\59\ Interim status facilities are facilities that were already
in existence at the time of the enactment of the permitting
regulations. Interim status facilities must comply with the
requirements in 40 CFR part 265 until they receive their permit.
\60\ 51 FR 16444 (May 2, 1986).
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HSWA provided EPA with authority to develop a broader corrective
action program. Under this program, EPA requires owners and operators
of facilities that treat, store or dispose of hazardous waste to
investigate and clean up hazardous releases into soil, groundwater,
surface water and air, thus reducing the likelihood that these
facilities would require cleanup under Superfund. RCRA permits issued
to TSDFs must include provisions for both corrective action and
financial assurance to cover the costs of implementing those cleanup
measures. EPA also possesses additional authorities to order corrective
action through enforcement orders, which are not contingent upon a
facility's permit. In addition, facilities may voluntarily choose to
clean up their contamination.
In addition to Subtitle C requirements, RCRA Subtitle D established
a program for management and disposal of non-hazardous industrial and
municipal solid waste through state solid waste management plans that
conform with Federal guidelines. RCRA Subtitle I requires EPA to
promulgate technical standards and corrective action requirements for
owners and operators of underground storage tanks (USTs), including
underground storage tanks that contain hazardous substances or
petroleum products. The UST regulations include requirements for
design, installation, notification, operational procedures, release
reporting, release response, and corrective action procedures for
underground storage tank systems that contain hazardous substances. The
regulations also include financial responsibility requirements for
underground storage tank owners and operators. In addition, EPA has
established guidelines for the approval of state underground storage
tank programs.\61\
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\61\ 53 FR 37082 and 43322 (Nov. 27, 2018).
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In addition to the regulatory scheme that RCRA imposes on the
management of hazardous waste in underground storage tanks that store
chemicals, Chemical Manufacturing plants are subject to a number of
additional regulatory provisions that reduce the potential for the
plants to pose a risk for a Federally-financed response action.
Catastrophic releases of hazardous substances and the use of toxic
chemicals and other hazardous substances are additional environmental
and safety concerns for Chemical Manufacturing facilities. Several
environmental laws authorize regulations requiring the development of
response plans for various emergencies in order to reduce the effects
of a release, and to notify local emergency response personnel and
facilitate cooperation. For example, EPA implements the Chemical
Accident Prevention Provisions of Section 112(r) of the Clean Air Act
Amendments, which require certain facilities to generate Risk
Management Plans (RMPs) to mitigate the effects of a chemical accident
and to coordinate with local response personnel. Emergency Action Plan
(EAP) regulations under OSHA require that employers prepare a written
EAP to create practices to follow during workplace emergencies. EPA
implements regulations under the EPCRA that impose emergency planning,
reporting, and notification requirements for hazardous and toxic
chemicals.
The U.S. Chemical Safety Board (CSB), authorized by the CAA
Amendments of 1990, is involved in investigating accidental releases at
Chemical Manufacturing facilities. Specifically, the principal role of
the CSB is to investigate accidents to determine the conditions and
circumstances which led up to the event
[[Page 10141]]
and to identify the cause or causes so that similar events might be
prevented. Implementation of recommendations resulting from
investigations can prevent future releases of hazardous substances to
the environment. The CSB's investigative function is completely
independent of the rulemaking, inspection, and enforcement authorities
of both EPA and OSHA.\62\
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\62\ www.csb.org.
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Hazardous substances management regulations address the storage and
transportation of hazardous substances. These regulations are
implemented by EPA, OSHA, and the Pipeline and Hazardous Materials
Safety Administration (PHMSA). The regulations address the registration
and reporting of hazardous substances that are manufactured or produced
through industrial processes; hazardous substance release prevention;
mitigation of harm caused by hazardous substance releases; safety and
catastrophe prevention for facilities that handle hazardous substances;
and standards for the transportation of hazardous substances. EPA
implements hazardous substances management regulations largely under
the authority of the TSCA and the Pollution Prevention Act (PPA), while
the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) applies
to the manufacture and distribution of pesticides.
TSCA provides EPA with authority to issue rules requiring
reporting, record-keeping, and testing of specific chemicals and to
establish regulations that restrict the manufacturing (including
import), processing, distribution in commerce, use, and disposal of
chemicals and mixtures. TSCA authorizes EPA to prevent unreasonable
risks by regulating chemicals and mixtures, ranging from requiring
hazard warning labels to the outright ban on the manufacture,
processing, distribution in commerce or use of certain chemicals and
mixtures. TSCA and its amendments have also established specific
programs for the management of certain chemicals--namely, PCBs,
asbestos, radon, lead, mercury, and formaldehyde.
The PPA, passed in 1990, created a national policy framework to
focus industry, government, and public attention on pollution and to
prevent or reduce pollution at the source through technology
modifications, modifications of production processes, product redesign,
and improvements in maintenance, training, and inventory control. PPA
regulations require, among other things, that facility owners and
operators include toxic chemical source reduction and recycling reports
with their annual toxic chemical release filing.
Pesticides are outside the scope of TSCA's regulatory authority;
EPA explicitly regulates pesticides under the authority of FIFRA. The
modern pesticide regulatory framework came into being with the 1972
Federal Environmental Pesticide Control Act, which further amended
FIFRA. The amendments created registration procedures for pesticides,
including data requirements, Agency review protocols, and
classification procedures. In order to obtain registration,
manufacturers and distributors must submit the pesticide's ingredients,
its target crop, use practices, and storage and disposal practices. The
review includes a determination regarding the pesticide's potential to
cause unreasonable adverse effects on the environment. Classification
procedures involve the categorization of pesticide components as active
or inert. Manufacturers must renew their registration for each
pesticide every 15 years. Following registration, EPA has the authority
to initiate special review procedures if information comes to light
indicating that the use of a pesticide may cause unreasonable adverse
effects on the environment. Regulations under FIFRA also cover the
management and disposal of pesticides through standards and
requirements for containers, repackaging procedure, and the use of
containment structures.\63\ The amendments granted EPA authority to
stop the distribution of, and to remove from use, any pesticide the
Agency finds to be in violation of FIFRA.
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\63\ 53 FR 15975; 50 FR 49001; 40 FR 28268; 71 FR 47422;
``Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and
Federal Facilities,'' EPA, accessed October 17, 2018 at: https://www.epa.gov/enforcement/federal-insecticide-fungicide-and-rodenticide-act-fifra-and-federal-facilities; ``About Pesticide
Registration,'' EPA, accessed November 26, 2018 at: https://www.epa.gov/pesticide-registration/about-pesticide-registration.
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In addition to registration and reporting requirements for
pesticide products, FIFRA regulations also establish registration and
reporting requirements for pesticide manufacturing facilities. Any
establishment that produces pesticide products or substances used as
active ingredients in pesticides must provide facility and company
information to EPA upon registration. Relevant facilities must also
submit annual reports to EPA that detail the amount of pesticide
product produced and distributed each year, as well as production
estimates for the following year. In connection with the compilation of
annual reports, facilities must keep production, distribution and sale,
shipment, inventory, and testing records.\64\
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\64\ 53 FR 35058; 45 FR 54338; ``Federal Insecticide, Fungicide,
and Rodenticide Act (FIFRA) and Federal Facilities,'' EPA, accessed
October 17, 2018 at: https://www.epa.gov/enforcement/federal-insecticide-fungicide-and-rodenticide-act-fifra-and-federal-facilities.
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With respect to workplace management of hazardous substances, OSHA
promulgated Process Safety Management (PSM) standards in 1992. The PSM
standards address the potential for unexpected releases of toxic,
reactive, or flammable liquids and gases in processes involving highly
hazardous chemicals. Under PSM, processes include the use, storage,
manufacture, handling, or transportation of hazardous chemicals. The
standards identify approximately 130 toxic and reactive chemicals; they
apply to facilities that manage quantities of those chemicals above a
specific chemical's established threshold. PSM standards also apply to
facilities that manage flammable liquids and gases in quantities of
10,000 pounds or greater. Facilities must compile information on the
hazards of highly hazardous chemicals, including toxicity, reactivity
data, corrosivity data, stability data, and permissible exposure
limits. Facilities must also collect information on the technology used
by each relevant industrial process. With this information, facilities
must complete a process hazardous analysis (PHA) for each relevant
process. The PHA for a facility is a review of possible releases of
hazardous chemicals that may result from the process and safeguards
that the facility will implement to prevent releases.\65\
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\65\ ``Process Safety Management,'' OSHA, accessed September 19,
2018 at: https://www.osha.gov/Publications/osha3132.html; 57 FR
6403.
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In 2011, OSHA initiated the Chemical Plant National Emphasis
Program (NEP) under its PSM regulations. Through the NEP, OSHA conducts
inspections of randomly selected facilities that handle, manage, or
store highly hazardous chemicals in quantities that meet the PSM
threshold. The inspections include fact gathering related to PSM
requirements and verification that employers have met PSM
standards.\66\
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\66\ ``OSHA Issues New National Emphasis Program for Chemical
Facilities,'' OSHA, November 30, 2011, accessed November 29, 2018
at: https://www.osha.gov/news/newsreleases/trade/11302011-0.
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Contamination of surface water is largely addressed by the CWA.
Under CWA, EPA has implemented pollution control measures, including
Federal
[[Page 10142]]
water quality standards and industry wastewater and Effluent Limitation
Guidelines (ELGs). These regulations set standards for industrial
wastewater discharge to surface water on an industry-specific basis,
identifying key processes and materials to regulate within each
industry. The standards require industrial discharges to meet
technological specifications in their treatment and discharge systems,
rather than pollutant specific quality standards for discharges. ELGs
may set one, all, or a combination of the following types of
technological standards, which facilities within each industry must
meet: Best practicable control technology currently available, best
conventional pollutant control technology, best available technology
economically achievable, new source performance standards, pretreatment
standards for new sources, pretreatment standards for existing sources,
and best management practices.\67\
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\67\ ``Industrial Effluent Guidelines,'' EPA at: https://www.epa.gov/eg/industrial-effluent-guidelines; ``Learn About
Effluent Guidelines,'' EPA at: https://www.epa.gov/eg/learn-about-effluent-guidelines; 39 FR 4532 (Feb. 1, 1974).
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EPA published industry-specific effluent guidelines for pesticides
in 1978, for inorganic chemicals manufacturing in 1982, and for organic
chemicals, plastics, and synthetic fibers in 1987.\68\ The pesticide
guidelines include even more specific standards for organic pesticide
chemicals manufacturing and metallo-organic pesticide chemicals
manufacturing.\69\ With respect to organic chemicals manufacturing, EPA
promulgated specific standards for facilities that manufacture benzene,
polypropylene, polyvinyl chloride, rubber precursors, chlorinated
solvents, toluene, rayon, nylon, and polyester.\70\
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\68\ 43 FR 17776 (Apr. 25, 1978); 47 FR 28278 (Jun. 29, 1982);
52 FR 42522 (Nov. 5, 1987).
\69\ 43 FR 17776 (Apr. 25, 1978).
\70\ 52 FR 42522 (Nov. 5, 1987).
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Additionally, the CWA established the NPDES permit program, which
controls point source discharges to surface water, and the National Oil
and Hazardous Substances Pollution Contingency Plan (NCP), which sets a
blueprint for responding to oil spills and hazardous substance
releases. At its inception in 1968, the NCP provided a comprehensive
Federal system of accident reporting, spill containment, and cleanup of
oil spills. In 1972, the CWA expanded it to include hazardous substance
releases.\71\
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\71\ ``National Oil and Hazardous Substances Pollution
Contingency Plan (NCP) Overview,'' EPA at: https://www.epa.gov/emergency-response/national-oil-and-hazardous-substances-pollution-contingency-plan-ncp-overview.
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State Regulatory Programs
Some states impose requirements on the Chemical Manufacturing
industry in addition to requirements related to Federal programs. These
stricter or additional standards for emissions, spill prevention,
emergency preparedness, and hazardous substance management on
facilities that handle toxic or hazardous chemicals can reduce risk at
facilities that manage hazardous substances. EPA researched state
environmental regulations relevant to the Chemical Manufacturing
industry for a representative sample of states. The states with the
highest number of Chemical Manufacturing facilities include California,
Texas, Illinois, Ohio, Florida, New Jersey, Pennsylvania, New York, and
Georgia. A discussion of these state regulations, as well as the
methodology EPA used in selecting the 11 states that it researched in a
background document, is available in the docket for this
rulemaking.\72\
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\72\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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One example of a state with standards for Chemical Manufacturing
facilities that are stricter than Federal requirements is Illinois,
which has separate standards for sewage discharges from Chemical
Manufacturing facilities, and additional standards for solid waste
landfills with chemical constituents. Another example is California,
which requires a land covenant upon facility closure, corrective
action, remedial or response action, or any other response action when
hazardous materials, hazardous wastes or constituents, or hazardous
substances remain at a property in levels exceeding suitable use
standards.\73\ California also requires financial responsibility for
owners and operators of underground storage tanks, which includes an
Underground Storage Tank Cleanup Fund that funds eligible corrective
actions.\74\ For producers of extremely hazardous waste, California
also operates an Extremely Hazardous Waste Permit system.\75\
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\73\ 22 California Code of Regulation (CCR) 67391.
\74\ 23 CCR 2803.
\75\ 22 CCR 67430.
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Industry Voluntary Practices
EPA reviewed facility RMPs, industry materials, governmental
literature, and academic literature to locate voluntary programs that:
(1) Attempt to address CERCLA hazardous substance management or
disposal, and release prevention, mitigation, and response; (2) are
relevant to Chemical Manufacturing facilities; and (3) in which
Chemical Manufacturing facilities participate. Industry voluntary
programs fall into three categories: Those sponsored by Federal, state
or local governmental agencies; those fostered within industry
associations or non-governmental organizations; and those implemented
by individual firms. These programs set or publish environmental
management and safety standards that facilities may follow to
supplement Federal and state requirements with additional standards and
may come with a certification from the government agency or industry
group that establishes the standards. Voluntary programs may also serve
as forums for coordination and collaboration among companies,
facilities, and government agencies to develop best practice standards
and improve emergency preparedness. EPA's review of available studies
found that the industry voluntary programs can be effective at reducing
both pollution and the frequency of government enforcement actions.
At the federal level, OSHA and FEMA sponsor or collect information
about industry voluntary programs. National and international nonprofit
organizations and industry associations, such as the International
Organization for Standardization (ISO), International Electrotechnical
Commission (IEC) and Global Environmental Management Initiative (GEMI),
also provide environmental management and safety standards and
procedures that facilities may follow, in addition to regulatory
requirements, and certify facilities that meet these specifications.
The American Chemistry Council, an industry trade association for
chemical companies, adopted the Responsible Care program, which is a
global initiative to further the chemical manufacturing industry's
environmental, health, safety, and security performance efforts, with a
focus on safe chemicals management throughout chemical lifecycles. To
obtain membership in the American Chemistry Council, a company must
participate in the Responsible Care program. Responsible Care requires
that companies commit to and are compliant with the program's guiding
principles and requirements. Participants are subject to reporting
requirements and mandatory facility audits under the program.\76\ A
discussion of industry voluntary practices, as well as the
[[Page 10143]]
methodology used by EPA, is available in the docket for this
rulemaking.\77\
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\76\ ``Responsible Care,'' American Chemistry Council, accessed
October 16, 2018 at: https://responsiblecare.americanchemistry.com/.
\77\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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C. Existing State and Federal Financial Responsibility Programs
To help inform the level of risk of a Fund-financed response action
associated with classes of facilities in the Chemical Manufacturing
industry, EPA reviewed existing state and Federal financial
responsibility programs that may be applicable to the industry and that
cover a wide range of liabilities, including liabilities for closure,
post-closure care, corrective action, third-party personal injury/
property damage, and natural resource damages. EPA focused on these
types of financial responsibility programs for two reasons. First,
these categories of damages, actions and costs are like those that
could be covered by CERCLA Section 108(b) rulemaking, and thus they
help inform the need for CERCLA Section 108(b) financial responsibility
for this industry. Secondly, the existence of financial responsibility
requirements can help create incentives for sound practices, reducing
the risk of releases requiring CERCLA response action. EPA also sought
to identify state cleanup funds that are at least partially funded by
industry (e.g., through a tax on hazardous wastes generated), and that
could cover future CERCLA liabilities that may arise at Chemical
Manufacturing facilities. EPA's report focused on the 25 states
reviewed in EPA's reports on existing state regulatory and voluntary
programs (excluding financial responsibility programs) that may be
applicable to Chemical Manufacturing facilities.
Finally, EPA reviewed existing financial responsibility
requirements in the following Federal programs: (1) RCRA Subtitle C
TSDFs; (2) TSCA commercial PCB waste facilities; and (3) EPA Safe
Drinking Water Act Underground Injection Control wells. The RCRA
Subtitle C regulations require all TSDFs to demonstrate that they will
have the financial resources to properly close the facility or unit
when its operational life is over, perform post-closure care (if
necessary) and provide the appropriate corrective action in the case of
a release. Additionally, the RCRA liability coverage regulations
require all owners and operators of hazardous waste TSDFs to maintain
accident liability insurance during the active life of their hazardous
waste management units or facilities. These requirements would apply to
facilities in the Chemical Manufacturing industry that treat store or
dispose of a hazardous waste.
The TSCA regulations for PCB commercial storage facilities require
all commercial storage facilities to demonstrate financial assurance
for closure of the facility. Under the Safe Drinking Water Act
regulations designed to protect underground sources of drinking water,
owners or operators of underground injection control operations are
required to maintain financial responsibility for plugging and
abandonment of wells. These requirements apply to owners and operators
of permit-authorized class I, II, III and geologic sequestration class
VI wells. The report is available in the docket for this
rulemaking.\78\
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\78\ Review of Existing Financial Responsibility Laws
Potentially Applicable to Classes of Facilities in the Chemical
Manufacturing Industry.
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EPA identified a range of existing financial responsibility
programs that may be applicable to facilities in the Chemicals
Manufacturing industry. The programs include the Federal programs
mentioned above as well as state programs related to:
Financial Responsibility for petrochemical manufacturing
facilities,
Financial Responsibility for phosphate fertilizer
manufacturing facilities,
Financial Responsibility for hazardous waste TSDFs,
Financial Responsibility for underground injection of
hazardous wastes,
Financial Responsibility for PCB storage or disposal
facilities,
Corrective action financial responsibility to address
hazardous waste or hazardous constituents,
Facility remediation financial responsibility associated
with transfer in ownership or facility closure,
Financial Responsibility for storage tanks containing
hazardous substances, and
Other authorities to require financial responsibility to
assure compliance with orders.
The applicability of these programs will depend on a variety of
facility-specific factors, for example, use of a specific piece of
equipment (e.g., an underground storage tank that contains regulated
substances) or engaging in a specified activity (e.g., a release of a
hazardous substance). Furthermore, state financial responsibility
programs vary by state and some types of financial responsibility
programs exist only in limited subsets of the states reviewed. EPA
believes that state and Federal financial responsibility programs help
reduce risk of a Fund-financed response action at facilities where they
are applicable. While financial responsibility programs vary in
structure and function, they may reduce such risk in a myriad of ways.
For example, they may help ensure undercapitalized firms do not engage
in environmentally risky enterprises, reduce the incentive to abandon
properties with extensive contamination, ensure compliance with
protective requirements, and incentivize better environmental
practices.
D. Compliance and Enforcement History
To understand the experience of court settlements and judgments,
EPA looked at compliance and enforcement in the Chemical Manufacturing
industry. EPA believes that compliance assistance, compliance
monitoring, and enforcement are important components of the regulatory
framework discussed above. Through inspections, compliance monitoring
can identify noncompliance at regulated facilities. Enforcement actions
may result in legal instruments that ensure correction of deficiencies
to achieve compliance with environmental requirements. Some functions
of compliance and enforcement actions are particularly pertinent to the
risk determination for rulemaking under CERCLA Section 108(b). First,
if noncompliance causes release of a hazardous substance, then EPA can
ensure through negotiated agreements that the responsible party carries
out or pays for the cleanup. Second, enforcement actions can result in
orders and settlements that compel a responsible party to return to
compliance. Third, the prospect of financial penalties that can
accompany these enforcement instruments can encourage compliance. All
of these functions support the regulatory structure in reducing risk of
Fund expenditures.
EPA looked at enforcement activities as well as historical
enforcement and compliance data in the development of this proposal.
EPA obtained data from the EPA Enforcement and Compliance History
Online (ECHO) system and provides a review of the Federal environmental
enforcement settlements and judgments data from FY 1972 through FY
2017.\79\ Facilities whose primary NAICS codes indicate Chemical
Manufacturing sector activities (NAICS 325) were included in EPA's
review.
[[Page 10144]]
ECHO data show that initiatives and normal review or inspection of
facilities resulted in over 7700 civil enforcement cases in the
Chemical Manufacturing industry from FY 1972 through FY 2017. CAA (32%)
and FIFRA (17%) cases were the most common. There are a smaller number
of cases in RCRA (12%), CERCLA (12%), CWA (11%), EPCRA (11%), and TSCA
(6%). Further description of this review is in the background document,
which is available in the docket for this rulemaking.\80\
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\79\ ECHO does not include all of EPA's compliance and
enforcement activity because regions are not required to report
``informal actions,'' and it does not consistently capture all state
actions.
\80\ Enforcement, Court Settlements and Judgments in the
Chemical Manufacturing Industry.
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As noted above, the Risk Management Program under Chemical Accident
Prevention Provisions of Section 112(r) of the Clean Air Act Amendments
requires certain facilities to generate Risk Management Plans (RMPs) to
mitigate the effects of a chemical accident and coordinate with local
response personnel. Assuring compliance with this program has been a
priority of EPA's Office of Enforcement and Compliance Assurance since
2017.
Enforcement cases can include instances in which removal action,
release reduction, or return to compliance include the removal of
contaminated media by the responsible party. Measures to remove
contamination may be required in enforcement orders under the range of
environmental statutes and are negotiated to require activities aligned
with return to compliance.\81\ In this situation, enforcement action
directly reduces risks to human health and the environment. During the
period FY 2012 through FY 2017, 32 settled Chemical Manufacturing
industry enforcement cases have been indicated as those where removal
of contaminated media occurred. They are primarily CERCLA (50%) and
RCRA (34%) cases. Two CWA, two TSCA and one Safe Drinking Water cases
are also included.
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\81\ These ECHO enforcement removals are separate from the
Superfund removals analyzed elsewhere. ECHO system data includes the
combined value of total enforcement financial penalties,
Supplemental Environmental Projects (SEPs), and associated
compliance activity.
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The substances removed are generally categorized as hydrocarbons,
hazardous chemicals, and metals. These cleanups resulting from Federal
enforcement actions mitigated risks to human health and the environment
by removing soils, groundwater, and sediments contaminated by a variety
of substances, and reduced likelihood of impact to the Fund.
Settlements and judgments in enforcement cases can result in
financial penalties, supplemental environmental projects (SEPs), and
activities required to return to compliance.\82\ Enforcement
settlements and judgments can ensure that the responsible party
conducts or pays for cleanup, can drive a return to compliance, and
more generally can incentivize compliance.
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\82\ Compliance actions ordered can include the removal of
contaminated media, installation of new equipment, or implementation
of compliant processes.
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As stated in the cleanup site evaluations in Section VII.A,
particular consideration was given to CERCLA and RCRA regulations as
relevant components of the modern regulatory framework that applies to
the Chemical Manufacturing industry. There have been over 1800 CERCLA
and RCRA civil cases in this industry, beginning in 1981. For context,
there are approximately 13,480 establishments currently operating in
the industry. The ten largest CERCLA or RCRA enforcement settlements
and judgments for the Chemical Manufacturing industry each have 2017
inflation-adjusted total values ranging from over $51 million to $1.1
billion.
Further discussion of the details on the Federal actions for these
and additional criminal cases can be found in the background document,
which is available in the docket for this rulemaking.\83\ This document
identifies facilities where noncompliance was identified and was
addressed by means of formal Federal enforcement. The background
document does not include either facilities where noncompliance was
addressed through informal enforcement or facilities where
noncompliance was addressed by a state. In addition, it does not
include facilities where noncompliance was not identified, either
because those facilities were not inspected or because they were
inspected and found in compliance.
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\83\ Enforcement, Court Settlements and Judgments in the
Chemical Manufacturing Industry.
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The compliance and enforcement actions documented here and in the
background document show that where noncompliance is identified, many
industry responsible parties are conducting or paying for cleanups,
returning to compliance, and improving public health and the
environment. In this industry, the largest CERCLA and RCRA civil and
judicial Federal cases are recently concluded and represent significant
operational compliance requirements and/or financial penalties. Several
major enforcement cases highlighted in the EPA chemical sector
notebooks \84\ evolved into decades of litigation, multiple Federal
enforcement cases, risks to human health and the environment, and NPL
sites. Enforcement actions alone do not completely supplant the need
for Fund-financed response actions either at these highlighted sites or
generally in the Chemical Manufacturing industry (as discussed in
section VIII below). Active enforcement serves as an important
component of the regulatory framework.
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\84\ Profile of the Agricultural Chemical, Pesticide, and
Fertilizer Industry, Sep 2000, EPA 310-R-00-003; Profile of the
Organic Chemical Industry, 2nd Edition, Nov 2002, EPA 310-R-02-001;
Profile of the Plastic Resin and Manmade Fiber Industries, Sep 1997,
EPA 310-R-97-006; and Profile of the Pharmaceutical Manufacturing
Industry, Sep 1997, EPA 310-R-97-005.
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VIII. Decision To Not Propose Requirements
Based on consideration of the analyses described in the previous
sections, as summarized below, EPA has reached a conclusion that the
degree and duration of risk posed by the Chemical Manufacturing
industry does not warrant financial responsibility requirements under
CERCLA Section 108(b) and thus is proposing to not issue such
requirements. The analysis and proposed finding in this proposal are
not applicable to and do not affect, limit, or restrict EPA's authority
(1) to take a response action or enforcement action under CERCLA at any
facility in the Chemical Manufacturing industry, including any
currently operating facilities or those described in this proposal and
in the background documents for this proposal, and (2) to include
requirements for financial responsibility as part of such response
action. The set of facts in the rulemaking record related to the
individual facilities discussed in this proposed rulemaking supports
the Agency's proposal not to issue financial responsibility
requirements under Section 108(b) for this class, but a different set
of facts could demonstrate a need for a CERCLA response action at an
individual site. This proposed rulemaking also does not affect the
Agency's authority under other authorities that may apply to individual
facilities, such as the CAA, the CWA, RCRA, and TSCA.
EPA believes the evaluation of the Chemical Manufacturing industry
demonstrates significantly reduced risk of a Fund-financed response
action at current operations. The reduction in risks due to the
requirements of existing regulatory programs and voluntary practices
combined with reduced costs to the taxpayer--demonstrated by EPA's
[[Page 10145]]
cleanup case analysis, existing financial responsibility requirements,
and enforcement actions--has reduced the need for Federally-financed
response action at facilities in the Chemical Manufacturing industry.
EPA looked at current industry practices, market structure and economic
performance of the industry; analyzed cleanup cases for facilities in
the industry; and evaluated the extent to which the industry and
sources of releases are covered by the modern regulatory framework, the
degree to which taxpayers have been called upon to pay for cleanup, and
EPA enforcement history in the industry.
As discussed in section VII.A, EPA identified the cleanup cases
that occurred under the modern regulatory framework and also entailed
some Fund expenditure. There were 34 sites that indicated the potential
for a significant impact to the Fund while operating under the modern
regulatory framework. For context, there are approximately 13,480
establishments currently operating in the industry. Thus, this is a
relatively small number of cases in comparison to the size of the
industry. Moreover, EPA estimates the total fund expenditure amount at
the 34 sites (including 30 removal sites and 4 NPL sites) is
approximately $104 million (through 2017).\85\ This amount of
expenditures is only a fraction of just one year's Superfund budgetary
authority. For example, the FY 2018 Superfund budget authority was
$1.057B.\86\
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\85\ This expenditure figure reflects only expenditures from the
Hazardous Substances Response Trust Fund (aka Superfund) designated
as non-special account expenditures through 2017. For example, the
projected costs through 2020 for Mississippi Phosphate is $133
million (according to the April 2018 Action Memorandum), compared to
the $8 million expended through 2017. It is anticipated that
significant additional expenditures will occur at some of these
sites. As such, the ultimate taxpayer burden may be significantly
higher.
\86\ See U.S. EPA. May 2017. Fiscal Year 2018 Budget in Brief.
Accessed April 2019. Available: https://www.epa.gov/sites/production/files/2017-05/documents/fy-2018-budget-in-brief.pdf.
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The language in Section 108(b) on determining the degree and
duration of risk and on setting the level of financial responsibility
confers a significant amount of discretion on EPA. In the past, some of
the risks associated with spills resulted from, or were exacerbated by
cleanups not being undertaken in a timely fashion. However, under the
modern regulatory framework, requirements such as the Risk Management
Plan under the CAA, the Emergency Action Plan under OSHA, and RCRA
requirements for TSDFs to detect, contain, and clean up any leaks,
including facility-wide corrective action--all help to ensure timely
responses to releases. In addition to the requirements for facilities
to respond to spills in a timely fashion, the public can alert the
Federal government to releases by calling the National Response Center
(NRC), which is a part of the Federally established National Response
System and staffed 24 hours a day by the U.S. Coast Guard. The NRC is
the designated Federal point of contact for reporting all oil,
chemical, radiological, biological and etiological discharges into the
environment, anywhere in the United States and its territories.
Only 34 sites (discussed in detail in Section VII.A) had
significant releases or threatened releases of hazardous substances
under the modern regulatory framework and required more than minimal
taxpayer-funded cleanups. It is EPA's assessment that the small set of
Federally-funded cleanup cases due to recent contamination, in view of
the size of the industry, does not warrant the imposition of costly
financial responsibility requirements on the entire Chemical
Manufacturing industry under CERCLA Section 108(b).
EPA acknowledges that regulations do not always prevent releases,
and the risk of a release is lessened but never eliminated by existing
Federal and state environmental regulations. However, EPA believes that
the network of Federal and state regulations applicable to the Chemical
Manufacturing industry creates a comprehensive framework that applies
to prevent releases that could result in a need for future cleanup.
This is reflected in the relatively small Fund burden associated with a
relatively small number of Fund financed cleanups at Chemical
Manufacturing industry sites where pollution occurred under the modern
regulatory framework. Numerous Federal programs have been established
under several environmental statutes since CERCLA was enacted on
December 11, 1980. These include programs under RCRA, which require
proper management and disposal of hazardous wastes; under TSCA, which
regulates the manufacture and sale of chemicals; under FIFRA, which
require the proper handling and use of pesticides; and under both the
CWA and the CAA, which address releases to water and air. In addition
to these Federal programs, some states have stricter or additional
standards beyond Federal requirements.
In addition to these Federal programs, some states with significant
chemical manufacturing industries have stricter or additional standards
beyond Federal requirements. These Federal and state programs are
discussed in detail in Section VII.B and in the background document,
which is available in the docket for this rulemaking.\87\
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\87\ Summary Report: Federal and State Environmental Regulations
and Industry Voluntary Programs in Place to Address CERCLA Hazardous
Substances at Chemical Manufacturing Facilities.
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In addition, enforcement settlements and judgments that force
return to compliance are important components of the applicable
regulatory structure. EPA's analysis of enforcement history shows that
enforcement of the applicable regulations provides a lever to monitor
compliance, obtain responsible party cleanups, and recover financial
penalties. Federal and state regulatory programs, backed up by
enforcement and complemented by industry voluntary practices, have
improved public health and the environment significantly since CERCLA's
initial adoption nearly 40 years ago. EPA believes that within the
Chemical Manufacturing industry, this framework provides effective
controls which protect public health, welfare, and the environment.
Examination of market structures for the Chemical Manufacturing
industry further indicates comparatively low likelihood of default on
environmental obligations at the expense of taxpayers and the
government by companies in this industry. This economic performance,
combined with the low impact to the Fund by facilities with releases
that happened under the modern regulatory framework, suggests that the
degree of risk to the Fund by this industry does not rise to a level
that warrants imposing CERCLA Section 108(b) financial responsibility
requirements.
In summary, EPA has analyzed the need for financial responsibility
based on risk of taxpayer funded cleanups at facilities in the Chemical
Manufacturing Industry operating under modern management practices and
modern environmental regulations, i.e., the type of facilities to which
financial responsibility regulations would apply. That risk is
identified by examining Superfund cleanup cases associated with the
industry, the management of hazardous substances at facilities in the
industry, as well as by examining Federal and state regulatory controls
on that management and Federal and state financial responsibility
requirements.
Based on that examination, EPA is proposing that, in the context of
CERCLA section 108(b), the degree and duration of risk associated with
the modern production, transportation, treatment, storage or disposal
of hazardous substances by the Chemical Manufacturing Industry does not
[[Page 10146]]
present a level of risk of taxpayer funded response actions that
warrant imposition of financial responsibility requirements for this
sector. For these reasons, EPA is proposing today to not issue
financial responsibility requirements under CERCLA Section 108(b) for
this industry.
A. Solicitation of Public Comment on This Proposal
EPA solicits comments on all aspects of today's proposal. EPA is
specifically interested in receiving comments on several issues and
requests the following information:
Examples of Chemical Manufacturing industry related
response actions for releases which took place under the modern
regulatory framework, for which potentially responsible parties (PRPs)
did not lead the response at the facility.
Examples of Chemical Manufacturing industry related
response actions for releases which took place under the modern
regulatory framework, for which PRPs have not taken financial
responsibility for their environmental liabilities.
Information on state-lead or other Federal agency cleanups
or instances of natural resource damages associated with this industry
that may supplement the information on cleanups gathered and analyzed
for this proposal.
Information about existing Federal, state, tribal, and
local environmental requirements applicable to the Chemical
Manufacturing industry relevant to the prevention of releases of
hazardous substances that were not evaluated as part of this proposal.
Information about financial responsibility requirements
applicable to Chemical Manufacturing industry that were not evaluated
as part of this proposal.
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review, because it may
raise novel legal or policy issues [3(f)(4)]. Any changes made in
response to OMB recommendations have been documented in the docket for
this rulemaking. EPA did not prepare an economic analysis for the
proposed rule, since this action proposes no regulatory requirements.
B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
This proposed rule is not subject to the requirements of Executive
Order 13771 (82 FR 9339, February 3, 2017) because this proposed rule
would not result in additional cost.
C. Paperwork Reduction Act (PRA)
This action does not propose an information collection burden under
the PRA, because this action does not propose any regulatory
requirements.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. This
action does not propose any new requirements for small entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments, because this action does not propose any regulatory
requirements.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the Federal Government and the states, or on the distribution of power
and responsibilities among the various levels of government, since this
action proposes no new regulatory requirements.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175, because this action proposes no regulatory
requirements. Thus, Executive Order 13175 does not apply to this
action.
H. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866, and
because EPA does not believe the environmental health or safety risks
addressed by this action present a disproportionate risk to children,
since this action proposes no regulatory requirements.
I. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy, since this action proposes no regulatory
requirements.
J. National Technology Transfer and Advancement Act
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
EPA believes that this action is not subject to Executive Order
12898 because it does not establish an environmental health or safety
standard, since this action proposes no regulatory requirements.
List of Subjects in 40 CFR Part 320
Environmental protection, Financial responsibility, Hazardous
substances, Chemicals.
Dated: February 10, 2020.
Andrew R. Wheeler,
Administrator.
[FR Doc. 2020-03401 Filed 2-20-20; 8:45 am]
BILLING CODE 6560-50-P
