Secretary of Interior Ken Salazar will leave a decidedly mixed legacy from his four years at the helm of the federal department responsible for protecting many of America’s vast open spaces, treasured parks, and disappearing wildlife.
Salazar’s Interior Department enjoyed some high-profile successes and on occasion took action to better protect important resources. It reached a multi-billion dollar settlement in the long-running and contentious Cobell litigation, a massive class action suit by Indian tribal members over government mismanagement of revenue from tribal resources. The Department under Salazar established seven new national parks and 10 new wildlife refuges.
But in many areas, while Interior took steps to respond to crises and restore some of the protections for land and wildlife that had languished for nearly a decade, it missed important opportunities to keep pace with twenty-first century threats to natural resources.
Salazar’s record on oil and gas development provides a good example. He angered Republicans and industry officials when he rolled back sweetheart oil and gas leases in Utah issued in the waning months of the Bush Administration. Confronted by the epic Deepwater Horizon spill, Salazar implemented a controversial moratorium on offshore drilling and overhauled the federal agency responsible for managing federal oil and gas leasing and development. On the other hand, Interior reforms ultimately stopped well short of those needed to better prevent future large oil spills, and the Department ramped up both on and offshore oil and gas leasing in the Arctic.
Full textA year ago this month, CPR published a white paper that laid out a two-phased action plan for federal agencies to take some critical steps toward protecting the public from Bisphenol-A (BPA). The report provided both short-term and long-term action items for the EPA, FDA, and OSHA that could establish stronger safeguards, risk assessment practices, and warning mechanisms for families and consumers concerning BPA and other endocrine-disrupting chemicals. We said an underlying requirement for both short-term and long-term action items is for federal agencies to acknowledge the unique low-dose effects and non-monotonic dose response curves (NMDRC) of endocrine-disrupting chemicals and adapt existing scientific protocols to reflect these unique risks.
Shortly before the conclusion of 2012, EPA announced a promising new effort in turning these action items into a reality. The agency is forming a working group dedicated to investigating and analyzing low-dose effects and NMDRCs for endocrine disrupting chemicals, and intends to release a “state of the science” paper, which will undergo peer review and “help inform how the safety of chemicals are assessed.” The working group will focus on three critical questions in conducting its work:
Cross-posted from The Pump Handle.
The good news is that in 2011 there were 53 fewer reported refinery accidents in Louisiana than there were in 2010. The bad news is that the 301 refinery accidents reported to the state in 2011 released nearly 50,000 pounds more air pollutants and nearly 1 million gallons more contaminants to soil and water than did the 354 accidents reported in 2010 – this according to a new report released Monday by the Louisiana Bucket Brigade and United Steelworkers. “Our aim is to collaborate with the refineries to solve the problem. Unfortunately that day hasn’t come yet,” said Louisiana Bucket Brigade founding director Anne Rolfes on a call with reporters. “Refinery managers continue to act as if they don’t have an accident problem. Until they face the facts, the oil industry, our economy, our environment and our health will suffer,” said Ms Rolfes.
The report’s release comes less than three weeks after a fire and explosion on an oil platform off the Louisiana coast killed three workers and injured 9, three seriously – and while a Shell Chemical in Norco, Louisiana continued to flare as it had for more than 30 hours.
The report, which is based on refineries’ reporting of accidents to the Louisiana Department of Environmental Quality (LDEQ), found that in 2011 the state’s 17 refineries reported to the state 301 accidents that released more than 1 million pounds of air contaminants and more than 1.3 million gallons of pollutants to soil and water. Among these emissions are sulfur dioxide, benzene, hydrogen sulfide, 1,3-butadiene, and miscellaneous other volatile organic compounds. These substances are all associated with potentially serious adverse health effects, including cardiovascular and respiratory diseases; neurological, immune and respiratory system impacts; and cancer. According to US Census figures and the report’s analysis, more than 200,000 people in Louisiana live within two miles of a refinery. This industry is “clearly externalizing its costs on Louisiana,” said Ms. Rolfes.
Full textFor a potentially earth-shattering move against one of the most notorious corporate environmental scofflaws in history, the Environmental Protection Agency (EPA) sure hid its light under a bushel this morning. The agency’s scant three-paragraph press release announced simply: “BP Temporarily Suspended from New Contracts with the Federal Government,” adding that “EPA is taking this action due to BP’s lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, oil spill and response.” As the headline suggests, the temporary suspension applies to new, but not existing, contracts with the government.
Don’t get me wrong, EPA’s move was in its own way a profile in courage for an agency that too often walks around with a target on its back, taking unwarranted hits from both its known foes—House Republicans—and from people who should be on its side—White House staff, and occasionally from other agencies and departments—like the Pentagon, or the Small Business Administration's Office of Advocacy. The question is whether the little release was an exercise in mere bravado or whether it will deliver real results.
As reporters hustled to interpret the cryptic release, the Interior Department confirmed that BP would be barred from winning any new federal oil leases. Unfortunately, BP just finished winning a slew of new leases in June, making it the largest leaseholder in the Gulf. The new leases are located in the same region of the Gulf as the Macondo well, the one that exploded in April 2010, killing 11 destroying the $350 million Deepwater Horizon drilling rig, fouling the Gulf of Mexico and hobbling the regional economy of the Gulf Coast. As the rig’s name suggests, oil lies deep below the surface out there, representing plenty of hazards to be navigated by a company that, according to EPA's careful review of ample evidence, lacks integrity.
Full textCross-posted from Legal Planet.
As already noted by Rick and Megan, last week BP pleaded guilty to 14 criminal counts arising from the 2010 Deepwater Horizon blowout in the Gulf of Mexico. Megan provided a good basic overview of the terms of the agreement. Here is the plea agreement itself. The amount of money BP has agreed to pay, in criminal fines and additional payments, has been the focus of most of the news coverage so far. The terms of BP’s probation have gotten less attention, but are well worth exploring.
Of course the amount of the fines and other payments matters. Never having had the experience of negotiating a plea agreement like this, I’m reluctant to speculate on whether the government could have gotten more out of BP. It’s too early to evaluate whether the punishment fits the offense, since civil sanctions and natural resource damages remain to be determined. The plea agreement specifies that the payments it requires do not affect its liability for civil claims or natural resource damages.
I was struck by the scope of the fines for the environmental offenses relative to the others. BP agreed to pay the maximum possible fine for each of the 11 manslaughter counts and the obstruction of Congress count. Together, the agreed fine for those counts totals $6 million, a tiny fraction of the total criminal fines. BP will pay another $100 million for violating the Migratory Bird Treaty Act, and a whopping (at least relatively speaking) $1.15 billion for violating the Clean Water Act.
Full textThis post is based on an article I wrote with Anne Havemann entitled “Too Big to Obey: Why BP Should Be Debarred,” published in the William & Mary Environmental Law & Policy Review.
Attorney General Eric Holder and his lead prosecutor, Lanny Breuer, are deservedly running a victory lap in the immediate aftermath of their criminal settlement with BP. The amount of money paid to settle the charges, $4.5 billion—is considerably larger than anything paid by past bad actors, although it represents just a few months of profit for the company. In addition, the two top supervisors on duty at the rig when it exploded will be prosecuted for manslaughter, sending the message that line managers put their futures on the line when they worry more about sparing costs for the company than the safety of their workers. But even these tough remedies fall far short of the “nuclear option” that should be invoked in this case: the permanent debarment of BP from ever doing business with the U.S. government.
Despite a shocking history of chronic law violations stretching a couple decades in this country—including an explosion at its Texas City refinery in 2005 that killed 15 workers--BP remains the Pentagon’s largest supplier of jet and vehicle fuel, with government contracts valued at more than $2 billion. In theory, at least, the United States only does business with “responsible” companies and, as I’ll explain further in a moment, BP is the corporate embodiment of irresponsibility, even if we ignore the catastrophe that happened in the Gulf. Yet any suggestion that the company should be debarred by the Department of Defense (DOD)--the government’s biggest spender--is summarily dismissed by observers who seem convinced that debarring BP would leave the Pentagon with nobody to sell it fuel.
Some statutes, including the Clean Air and Clean Water Acts, provide for immediate suspension for government contractors found guilty of violating their provisions. Unfortunately, however, the suspension is only applicable to the facility where the violation took place. The drilling rig that exploded is obviously no longer in existence.
Full textJudging from President Obama’s first term, the job of White House “regulatory czar” could prove of out-sized importance these next four years, with the head of an office few know exists ending up with the power to trump the authority of Cabinet members throughout the government. Cass Sunstein, the former occupant of the position, was perhaps the most influential overseer of the regulatory process ever, and it's not hard to imagine that his replacement will be equally powerful. But I'd propose that the next Administrator of the Office of Information and Regulatory Affairs (OIRA) have a very different job description.
Sunstein made himself a strong ally of business, doing his best to put the President in a position where he could withstand attacks by his Republican opponent for being tuned out to the needs of the “job creators.” This strategy did not work particularly well. President Obama was subject to withering attacks from big business and its political allies, and won reelection in the end by explaining himself as a populist concerned about the middle class. For this reason, and because the recent crisis over compounding pharmacies reminds us how badly regulatory agencies need to be strengthened, I'd urge the President to appoint a czar who will work to make sure that regulation and its enforcement are as effective as they are efficient from an economic perspective. I hope, in other words, that the President listens to his own campaign rhetoric and picks someone who can lead OIRA to develop a reoriented regulatory mission, one based on a positive vision for protecting the public.
For three decades, OIRA Administrators have described their task as one of number-crunching and economics, making it sound as if they're just adding up regulations' projected costs and benefits and seeing which side of the equation wins because it is objectively bigger. But their unwritten, self-defined mission is quite different. They have seen their task as standing guard on federal agencies to make sure they don’t upset industries too much, serving as a court of last resort for big business, and sparing the President from political damages. This role has not served anyone particularly well – except for industry.
But there's no law that says this is how OIRA should function; it's a habit that has grown up over the years. President Obama's next OIRA Administrator needs to see outside that shortsighted lens. In his 2008 acceptance speech at the Democratic convention, President Obama said that government should “protect us from harm and provide every child a decent education; keep our water clean and our toys safe.” That's the mission that the next OIRA Administration needs to make his or her own.
Full textMitt Romney added a new twist Tuesday to false right-wing claims about the EPA’s regulation limiting mercury and other pollutants from coal power plants.
EPA estimated that the “utility MACT” will have annual monetized benefits of $37-90 billion and costs of $9.6 billion. A critique we’ve heard over and over again from the industry and its supporters goes something like this: “But only $6 million of those benefits come from reducing mercury pollution, the top target of the rule!” It’s sort of an odd critique, but it’s misleading anyway: the mercury numbers are so low because EPA simply didn’t monetize most of the mercury reduction benefits. Putting a dollar value on not poisoning kids with a neurotoxin is difficult or impossible, and the benefits of the rule far outweigh the costs already anyway.
Now here’s the twist. On Tuesday, the website sciencedebate.org, a consortium of concerned groups, published responses from Barack Obama and Mitt Romney to a questionnaire on science issues. Romney repeated the common right-wing Utility MACT argument (see question 11), and added a different argument:
Full textUnfortunately, President Obama has repeatedly manipulated technical data to support a regulatory agenda guided by politics rather than science. For example, his “Utility MACT” rule is purportedly aimed at reducing mercury pollution, yet the EPA estimates that the rule will cost $10 billion to reduce mercury pollution by only $6 million (with an “m”). This has not stopped the President from trumpeting the rule as “cost-effective” and “common sense,” while claiming it will “prevent thousands of premature deaths.” The trick? Making the rule so expensive that it will bankrupt the coal industry, and then claiming that the elimination of that industry (and its hundreds of thousands of jobs) would have significant benefits.
When Barack Obama took office, reform of U.S. chemical regulation appeared to be an area of some bipartisan agreement, especially when compared to climate change, where it was clear a contentious fight would loom on Capitol Hill. Prominent Members of Congress had called for reform of the outdated Toxic Substances Control Act (TSCA) of 1976, EPA Administrator Lisa Jackson soon laid out the Administration’s key principles for TSCA reform, and the largest chemical industry trade association acknowledged that TSCA needed to be “modernized” and “updated.”
Four years later, though, progress on TSCA reform has been frustratingly slow. The 2010 Republican victory in the House dashed hopes for quick action on the Hill, and the chemical industry is once again defending the status quo.
The stakes are enormous. Under TSCA, more than 90% of all chemicals in use have never been tested for their health and environmental effects. TSCA requires the EPA to demonstrate that chemicals pose “unreasonable risk” prior to restricting their manufacture or use, and it erects elaborate procedural hurdles before EPA can make that finding. Since TSCA was enacted, EPA has attempted to restrict only six chemicals under those provisions of the Act, and the last attempt was in 1989.
We are “flying blind” by allowing massive public exposure to untested chemicals. As a result of flaws in TSCA, we also lack solid comparative information about the toxicity of chemicals. For example, while many companies have stopped using Bisphenol-A (BPA) in baby products and food containers, we have little information about substitutes for BPA, and companies are not required to disclose what substitutes they are using. From hydraulic fracturing fluids to flame retardants in furniture to construction materials in our homes, we simply do not know the health and environmental effects of tens of thousands of chemicals to which we are exposed.
Full textReposted from RegBlog.
Traditionally, the field of law and economics has treated government regulation as if it were a mere transaction. This microeconomic approach to law assumes that government regulators should aim to make their decisions efficient by seeking to equate costs and benefits at the margin.
As I argue in a new book, The Economic Dynamics of Law, the microeconomic model of government regulation misconceives the essence of regulation. Government regulation produces not an instantaneous transaction, but a set of rules intended to influence future conduct, often for many years. Accordingly, regulation provides a framework for private resource allocation, rather than allocating the resources itself. This framework performs a macroeconomic role by reducing systemic risks that might permanently impair important economic, social, and natural systems. As such, government regulation resembles monetary policy, which likewise affects, but does not control, resource allocation. 
Properly understood, the relationship between law and the economy implies that private actors can ameliorate the effects of nominally inefficient government decisions. Capitalism works precisely because government cannot assimilate sufficient information to make perfectly efficient decisions. Yet, the neoclassical model of law and economics assigns government the efficiency-enhancing role that properly belongs to private actors.
In The Economic Dynamics of Law I propose a more appropriate way of thinking about regulation. This approach focuses on the shape of change over time in order to avoid systemic risk. We cannot expect government to make perfectly efficient decisions or ensure our future happiness, but we should, at a bare minimum, expect government to ward off catastrophes, leaving much of the fine-tuning to private markets.
I also propose a form of institutional economic analysis that I call economic dynamic analysis, as a way to aid regulators in analyzing threats and responding efficaciously. Economic dynamic analysis requires regulators to study how relevant actors respond to economic incentives, taking into account the level of bounded rationality anticipated in each group of regulated actors. Such analysis requires, in particular, consideration of countervailing incentives that may defeat legal incentives. Economic dynamic analysis also calls for the use of scenario analysis in the case of some of our most serious problems. Finally, it includes empowerment analysis to determine who law might empower or disempower, as an extension of public choice theory.
Full text