According to many, the cost to regulate per- and polyfluoroalkyl substances (PFAS) under the Toxic Substance Control Act (TSCA) were wildly underestimated by the Environmental Protection Agency (EPA).  Further, certain efforts in Michigan to regulate PFAS in drinking water were struck down by the courts because the state failed to consider cost/benefit analysis.  Additionally, the oil and gas sector is now contending with a proposal to further regulate methane at one million well sites across the country.

We look at a few of the recent regulatory actions and how some have been quelled.

TSCA Reporting of PFAS

In June 2021, the US EPA proposed a rule under Section 8(a)(7) of TSCA.  The proposed rule would require all manufacturers (including importers) of PFAS in any year since 2011 to report information to the EPA.  The covered entities would be required to report on “PFAS chemical identity, categories of use, volumes manufactured and processed, byproducts, environmental and health effects, worker exposure and disposal.”

Many contend the initial costs put forth by the EPA to comply with the proposed regulation was significantly underestimated.

Small Businesses to Carry the Economic Load

According to Bloomberg Law, “Small businesses would be expected to pay $863.5 million rather than $1.8 million to report years of production and importation data that the Environmental Protection Agency would require under a rule (RIN 2070-AK67) it proposed in 2021.”  Approximately $10 million of the costs would be borne by chemical manufactures.

“The rule would impose $875 million instead of the $10.8 million the EPA previously estimated for social costs that consumers ultimately would pay, the updated analysis found.”

Based on the significant economic burden that would be caused by the new reporting rule, there may be changes to the rule including limiting the scope of PFAS covered by the rule and perhaps some exemptions.

Comments are open until December 27, 2022.  See “TSCA Section 8(a)(7) Reporting and Recordkeeping Requirements for Perfluoroalkyl and Polyfluoroalkyl Substances; Notice of Data Availability and Request for Comment.”

Michigan PFAS Rule Struck Down in Court

On a similar note, on November 15, 2022, a court in Michigan struck down PFAS rules in Michigan with respect to enforceable limits in drinking water.  The court said that Michigan’s Department of Environment, Great Lakes, and Energy failed to fully consider the cost/benefit of the rule.

Michigan enacted PFAS drinking water standards for seven types of PFAS:

• Perfluorooctanoic acid – PFOA (8 ppt*)
• Perfluorooctanesulfonic acid – PFOS (16 ppt)
• Perfluorononanoic acid – PFNA (6 ppt)
• Perfluorohexanoic acid – PFHxA (400,000 ppt)
• Perfluorohexane sulfonate – PFHxS (51 ppt)
• Perfluorobutane sulfonic acid – PFBS (420 ppt)
• Hexafluoropropylene oxide dimer acid – HFPO-DA (370 ppt)

* parts per trillion

3M challenged the regulations on three grounds:  (1) Michigan had not shown that the standards were necessary, (2) the standards were enacted in a manner such that they were arbitrary and capricious, and (3) there were deficiencies in the state’s regulatory-impact statement (a required part of the regulatory process).  The Court dismissed the first two arguments; however, it found in favor of 3M on the third ground (see The National Law Review, “Michigan PFAS Regulations Struck Down By Court”).

Additional Regulation of Methane in the United States

On November 11, 2022, the EPA issued new proposed standards for methane emission from oil and gas operations.  This would “strengthen and expand” the EPA November 2021 proposal.  The intent, according to the EPA, is to “secure major climate and health benefits for all Americans.”

The announcement was made at the Conference of the Parties (COP) 27 meeting in Egypt.

Affect One Million Sites

The proposed regulation would apply to the nation’s nearly 1 million well sites.  According to a report in Reuters, “The EPA said the stronger rules would reduce methane from the oil and gas industry by 87% below 2005 levels and would help the United States to meet its commitment under the Global Methane Pledge to cut methane emissions economy-wide by 30% this decade.”

Commenting on the proposed rule that the EPA intends to finalize in 2023, the law firm Holland and Knight wrote, “The proposed regulations are ambitious and, if implemented as proposed, will have a significant impact on existing oil and gas operations.  For example, any oil and natural gas company, regardless of size, is required to have routine leak monitoring at every wellsite and compressor station…” (emphasis added).

This could have a significant economic impact, especially for smaller operations.

The Burden of Regulation

As we have written in previous blogs, the first two years of President Biden’s Administration have been marked by a significant uptick in environmental regulatory efforts.  But he is not the only Commander in Chief that has added to the overall regulatory burden.

For example, in 1950, there were 9,745 pages published in the Federal Register.  By 1970, the number of pages had ballooned to 54,834.  And by 2021, the number of pages reached 188,321 (Source:  Regulatory Studies Center, Columbia College of Arts and Sciences).

In 2017, the Economist wrote, “Between 1970 and 2008 the number of prescriptive words like ‘shall’ or ‘must’ in the code of federal regulations grew from 403,000 to nearly 963,000, or about 15,000 edicts a year, according to data compiled by the Mercatus Centre, a libertarian-leaning think-tank” (there is a paywall, so we are not providing a link).

Most agree that some regulation is necessary to provide protections of our banking system, worker safety, human health and the environment, food safety, etc… But as regulation increases, it becomes more costly and challenging to do business.  Are there solutions (outside of the knee-jerk approach of more regulations) that might involve innovation and a more market-based approach?

Contact Dragun for Assistance with Environmental Issues

We will continue to provide updates on environmental regulatory activity in our blogs and alerts.  If you need help with an environmental matter, contact us at info@dragun.com, 248-932-0228, or use our online contact form.

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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