While the Federal Reserve has bumped the prime lending rate several times over the past year, the US is still struggling to tame inflation. It is slowly coming down, but not fast enough for many. There are currently more than 60 countries that are doing a better job of controlling inflation than the US. Among G20 Countries, the US ranks 11th in taming inflation (see Trading Economics).
Inflation-Adjusted Environmental Penalties
For those that have to comply with environmental regulations, this inflation also means that the cost of non-compliance will be going up. This increase is owed to the mandated Federal Civil Penalties Inflation Adjustment Act of 1990, as amended through the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The 2015 Act prescribes a formula for annually adjusting the statutory maximum (and minimum) amount of civil monetary penalties to reflect inflation, maintain the deterrent effect of statutory civil monetary penalties, and promote compliance with the law.
See the Federal Register notice “Civil Monetary Penalty Inflation Adjustment.”
While the cost of environmental violations is rising to keep pace with inflation, we are keeping an eye on enforcement and plans for enforcement. As we wrote in our February 1, 2023, blog, It appears that compliance and enforcement will be high-priority issues for the EPA going forward. Further, the emphasis will be on communities with EJ concerns.
Inflation means that environmental penalties will be more expensive. This adjustment is mandated Federal Civil Penalties Inflation Adjustment Act of 1990, as amended through the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Image by Gerd Altmann from Pixabay).
More Active EPA?
In a February 6, 2023, blog by the law firm, Wiley, they state, “EPA (Environmental Protection Agency) plans to increase the percentage of inspections by as much as 25% in some areas…”
In a March 9, 2023, Press Release from the EPA states that the new EPA Budget requests over $12 billion in discretionary budget authority for the EPA in 2024, a $1.9 billion or 19-percent increase from the fiscal year 2023 enacted level.
Billions of Dollars Allocated
A blog by the law firm Vision and Elkins recently discussed how some significant money has been allocated to EJ communities. For example, the Inflation Reduction Act (IRA) provides a $3 billion block grant for distribution to states, tribes, and nonprofit organizations for EJ-related activities. These activities include monitoring air pollution, mitigating climate risk, and engaging disadvantaged communities.
Also, the IRA allocates $3 billion to reduce air pollution and emissions at ports, $37.5 million in grants to monitor air pollution and emissions at schools in EJ communities, and $33 million to the Council on Environmental Quality to track the disproportionate impacts of pollution on EJ communities.
We cannot predict how the billions of dollars will be allocated or if it will translate into enforcement. However, it’s likely to spur on more interest by state and federal regulators (as well as activist groups) as projects get underway.
With all of the above said, here is a brief look at some recent environmental penalties by way of enforcement actions.
Railroad Fines Amount to Tens of Millions of Dollars
Genesee and Wyoming Railroad Services, Inc. (GWRSI) will pay a $1.35 million penalty for violation of the Clean Air Act (CAA) locomotive regulations. Further, they will spend $42 million to correct violations and “offset associated environmental harm.”
According to the EPA, GWRSI’s locomotives with rebuilt engines failed to meet applicable EPA emission standards and they did not perform required emission-related maintenance or keep records of maintenance performed. See the announcement by the US Department of Justice.
Wisconsin Company to Pay $1.6 Million
Late in 2022, the US Government and the State of Wisconsin announced a settlement with Container Life Cycle Management LLC (CLCM). The settlement addresses CAA and Resource Conservation and Recovery Act (RCRA) violations at two of the company’s container reconditioning facilities in the Milwaukee, Wisconsin, area. The company will pay a $1.6 million civil penalty to be split evenly between the United States and the State.
The US government alleged violations of the CAA, for failure to control emissions of volatile organic compounds as required by the Wisconsin state implementation plan. The complaint also alleges RCRA violations related to the storage and handling of hazardous waste. See the announcement by the US Department of Justice.
HFC Violations Result in Three Six-Figure Fines
Three different companies will pay fines related to importing hydrofluorocarbons (HFCs). According to the EPA, the companies failed to report their imported quantities as required by the Clean Air Act Greenhouse Gas Reporting Program.
The companies fined were Artsen Chemical America, LLC ($247,601 penalty), Harp USA, Inc. ($275,000 penalty), and IGas Companies ($381,473 penalty).
See the March 2, 2023 announcement by the EPA.
Companies are facing significant headwinds including a tight labor force, increasing costs, and growing environmental regulatory pressures. As we have been for 35 years, we are here to help you with your environmental regulatory obligations. If you have a question, you can use our online contact form or call us at 248-932-0228.
This blog was drafted by Alan Hahn. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for 45 years. He has written hundreds of blogs and articles. His published work includes Michigan Lawyers Weekly, Detroiter, Michigan Forward, GreenStone Partners, Manure Manager Magazine, Progressive Dairy, and HazMat Magazine.
The blog was reviewed by Jeffrey Bolin, M.S. Jeff is a partner and senior scientist at Dragun Corporation. He is a published author, frequent speaker, and expert witness. His expertise in environmental due diligence, PFAS, vapor intrusion, and site assessments has led to projects in the US, Canada, and overseas. See Jeff’s Bio.
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