Post-Election Environmental Update: Preparing for 2013 and Beyond


WASHINGTON, D.C. – January 30, 2013 – (RealEstateRama) — Looking ahead, the U.S. Environmental Protection Agency (EPA) has committed to an aggressive regulatory agenda and is poised to take action in all program areas—taking up issues like stormwater runoff, fly ash reuse, and the disturbance of lead paint in buildings.  The rulemaking pipeline is full, and the construction and real estate industries are positioned to feel the brunt over the next four years.  Fortunately, AGC is working year round to keep EPA in check and remains closely engaged with the Agency on nearly a dozen pending rules, all projected to have significant impacts on construction jobs and the economy.  AGC will continue to push for sound, fact?based, decision?making at all levels of government.

During the Obama administration’s first term, EPA issued the 2012 Construction General (Stormwater) Permit, tighter national air standards for particulates and nitrogen dioxide, first-time controls on greenhouse gas emissions from mobile and stationary sources, and new federal emission/notification requirements for stationary Reciprocating Internal Combustion Engines (RICE).  AGC represented the construction industry’s interests in all of these legal proceedings and provided contractors with information on how to get into compliance, once the rules went final.

Moreover, at a time of great economic stress, AGC was successful in pushing the administration to re-examine (and slow down on promulgating) a host of additional environmental rules that would have increased the cost of critical construction projects and threatened jobs – without commensurate environmental benefits.  (Most notably, EPA delayed implementation of a “numeric limit” on the amount of dirt the federal government will allow in stormwater from construction sites.)  In the months heading to the election, movement on much-anticipated national rulemakings – like requirements on the use/disposal of fly ash – was slowed to a halt.

Now that the election is past us, EPA has reactivated its regulatory efforts.   Following are some of the most significant rulemakings in the works.  Click here for a PowerPoint slide view of this list.  

  • Effluent Limits for Construction Site Runoff – The original effluent limitations guidelines rule for the “Construction and Development Industry” (C&D ELG) was issued in December 2009 and contained a controversial numeric discharge limit for turbidity.  EPA subsequently stayed this requirement. EPA recently announced that it will propose a new rule by April 2013 (final by Feb. 2014) to formally withdraw the turbidity limit and to clarify the “non-numeric” portion of the 2009 C&D ELG rule.  New construction activities can expect evolving requirements governing stormwater discharges; any new C&D ELG requirements would be incorporated on a rolling basis into state permits as they expire and are renewed.  See related Observer article.
  • Stormwater Discharges from Developed Sites – EPA has long regulated stormwater discharges from active construction sites but most recently has begun to focus its attention on stormwater discharges from already developed sites. EPA is on track to propose a national rule that would set new performance standards for managing stormwater discharges from newly developed and re-developed sites; require first time retrofit requirements on stormwater systems – which could include mandates on cities to change existing buildings, stormwater sewers, and streets; and mandate the use of “green infrastructure” techniques (like “green roofs,” rain gardens, permeable pavement) to replace conventional stormwater management practices. There remain questions about EPA’s authority to mandate restrictions on stormwater flow (as opposed to limits on pollutants in stormwater), but we can expect to see a proposed rule by the summer of 2013 and a final rule is due out by December 2014.  See related Observer article.
  • Definition of “Waters of the United States” – After the U.S. Supreme Court decisions in SWANCC and Rapanos, the scope of “waters of the US” subject to federal control and permitting under the Clean Water Act (CWA) has been an issue of considerable debate and uncertainty. In May 2011, EPA and the U.S. Army Corps of Engineers issued draft guidance on the courts’ decisions that would effectively increase the agencies’ jurisdiction over construction work in nearly all “wet” areas.  AGC expressed concerns over the scope of the guidance and urged the agencies to pursue a rulemaking.  A proposed rule is in the works that would revise the regulations that define “waters of the Unites Sates” and, as such, clarify which bodies of water (or their conveyances) are subject to CWA Section 404 permitting provisions.  It is not clear when, or if, this proposed rule or the guidance document will be published.  See related Observer article.
  • Chesapeake Bay Clean-up Plan – EPA has been working with the states to implement an extensive clean-up plan (Total Maximum Daily Load or TMDL) for the Chesapeake Bay, finalized back in 2010.  Key components of that plan are water quality trading programs to be in place by the end of 2013.  EPA will likely use the Bay TMDL and associated trading programs “model” in the Mississippi River Basin and in other areas with impaired waterbodies; therefore, every step taken in the Bay will determine how similar programs will be adopted nationwide.  Farming and development groups have joined wastewater agencies in defending EPA against recent threats to the legality of its water quality trading (cap and trade) programs.  Industry, state and agency representatives as well as many environmental groups support these trading programs, mostly because of their potential to manage the costs of the Bay clean-up plan while still seeing reductions in pollutants entering the Bay.  See related Observer article.
  • Ozone National Ambient Air Quality Standard (NAAQS) – EPA is scheduled to tighten the ozone (smog) NAAQS in 2013.  By EPA’s own estimates, the ozone standard the agency is considering would cost $90 billion a year and would push a large portion of the country into non-attainment status for the first time.  A nonattainment status under the Clean Air Act carries serious repercussions for construction in the area(s) so designated – including potential restriction on the use and operation of equipment, the loss of federal highway funding and the loss of economic development opportunities. See related Observer article.
  • Revised PM2.5 NAAQS – EPA recently revised the fine particulate matter (PM2.5) NAAQS.  These changes to the PM2.5 NAAQS come on top of the recent years’ tightening of the SO2 and NO2 NAAQS. Combined, these new and stricter standards are likely to increase the difficulty of permitting new and expanded facilities.  EPA anticipates attainment/nonattainment designations to be in place by early 2015.  State-level clean-up plans will include enforceable emission reduction requirements that will increase compliance costs for both mobile and stationary sources.  See related Observer article.
  • Fly Ash Reuse– EPA continues to evaluate whether or not to regulate coal combustion residuals (CCRs) as hazardous waste, which could cost industry $79 to $110 billion over 20 years.  EPA’s latest reports are that it cannot finalize a rule on how it will regulate coal ash until at least 2014. Industry also awaits the results of EPA’s investigation into the beneficial use of coal ash in construction—in response to an Inspector General report that found EPA promoted recycling of the waste without assessing the potential risks of using those materials.  In 2012, EPA faced pressure both from Congress and the courts.  Lawmakers tried unsuccessfully to pass legislative that would require EPA to regulate the waste as nonhazardous, and two groups initiated lawsuits urging EPA action. See related Observer article.
  • Lead-Paint Work Practice Rules – EPA is currently considering how to expand and strengthen the federal “Lead Renovation, Repair and Painting” (LRRP) rule to cover construction work that disturbs lead paint in/on the exteriors and interiors of public and commercial buildings.  EPA plans to finalize its approach by the end of 2016.  EPA recently published a request for information and notice of a public hearing to gather information on renovation activities and possible lead hazards in public and commercial buildings. The hearing will be held on June 26, 2013.  Comments are due by April 1stSee related Observer article.
  • Climate Change – According to the Agency’s “regulatory plan” released in late 2012, EPA will continue to use the Clean Air Act to develop greenhouse gas (GHG) standards for both mobile and stationary sources – against AGC’s objections. The Administration also has renewed its commitment to explore what actions it can take to reduce GHG emissions across the board.  EPA currently regulates the largest facilities that emit GHGs, but the Agency will consider regulations of medium-sized and smaller facilities by 2016.  Critics argue that the regulatory requirements are strict enough to stop the building of any new facilities, especially power plants.  What is more, the rules would cause the prices for any kind of power to skyrocket.  Many are concerned that EPA will proceed to issue regulations, industry by industry, until virtually every aspect of the American economy is constrained by strict regulatory requirements and high energy prices. See related Observer article.

Significantly, many of the pending rules listed above are the result of “sue and settle” agreements – i.e., out of court “closed door” settlements between EPA and environmental/activist groups.  Such agreements recently have come under fire for going around the public participation and transparency protections of the Administrative Procedure Act (APA) and for prompting EPA to issue more economically significant regulations than would otherwise be written.

Also worth noting is that President Obama’s environmental agenda will face budget cuts for the third straight year.  The proposed EPA budget for fiscal year 2013 is $8.3 billion, down from $9 billion last year. This year’s request represents a 1.2 percent decrease, or $105 million, from the 2012 enacted level.

For an at-a-glance look at the developing issues above, as well as information on AGC’s other environmental services, click here.

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