Since President Obama’s reelection, the Administration has made its intention to pursue a robust environmental regulatory agenda well known. With a host of environmental regulations, including GHG emission limitations for new and existing power plants, emissions limitations for hazardous air pollutants from power plants, and rules governing hydraulic fracturing in various stages of development, it appeared as though 2013 would be a year of significant regulatory action by the EPA.
However, on March 1, 2013, across the board federal spending cuts totaling $75 billion went into effect potentially disrupting EPA’s regulatory agenda. These cuts, called the “sequester,” have left federal agencies scrambling to implement the cuts while still fulfilling their duties. Nearly every federal agency, including the EPA, is furloughing employees for some length of time. At the EPA, all employees could be furloughed by as much as thirteen days by the end of 2013. While these furloughs will be staggered, with approximately 17,000 employees, these furloughs could amount to a loss of 221,000 employee-work days at EPA.
The exact effects of the sequester on federal operations is not entirely clear, and is in many ways a moving target. However, there are several potential impacts on environmental regulation. First, there may be a slow down in the finalization of proposed regulations. Many of the regulations which EPA has issued for comment or is committed to finalize in the near future, such as GHG emission limits for new and existing power plants, are controversial and legally complex and have generated tens and hundreds of thousands of public comments, which must be reviewed and responded to by EPA. Reduced staff resources at EPA from the sequester may delay the finalization of these regulations. Furthermore, every rule from a federal agency must be vetted by the Office of Management and Budget (“OMB”) prior to being finalized. OMB is also subject to the sequester and has notified its employees that they will have to take ten furlough days this fiscal year. This adds another level of potential delay to the issuance of any new environmental regulations as EPA has sent a large amount of regulations to OMB that are currently awaiting analysis. Many of these regulations have already been at OMB for months and the sequester is unlikely to move this process along. However, not all rulemakings and regulations will, necessarily, be equally impacted. EPA may choose to focus its resources on finalizing high priority or high profile regulations, such as GHG emission limits for power plants, at the expense of other regulations.
Second, it is possible that there will be a reduction in the volume of new regulations proposed. Drafting a regulation is a labor intensive and time consuming effort. With scarce resources further depleted by the sequester, the drafting of new rules will almost certainly be slowed.
Third, EPA regulatory enforcement activities could be impacted. Although many environmental enforcement responsibilities are delegated to the states in the first instance, EPA still conducts thousands of inspections of facilities annually to ensure compliance. In a February 2013 letter from former EPA Administrator Lisa Jackson outlining the possible impacts of the sequester on EPA operations, Administrator Jackson noted that the sequester could result in 1,000 fewer inspections in 2013.
Finally, certain routine EPA functions are likely to slow. This includes programs that are important to certain industrial sectors. For example, both former Administrator Jackson and acting Administrator Robert Perciasepe, warned that new vehicle emissions certifications – a requirement before any new vehicles can be sold in the United States – would likely be slowed due to the sequester, which could delay market access for some vehicle manufacturers.
While the exact effects of the sequester on the federal environmental regulatory agenda can not be determined, it is almost certain that the EPA’s regulatory agenda will be curtailed or delayed to some extent. The effects of the sequester will make it almost impossible for EPA to accomplish all that it has been tasked with or undertaken, meaning that the Agency will have to make choices about which programs and regulatory initiatives to prioritize.
Adam Riedel is an associate with the Energy, Environment and Natural Resources practice in the Washington, D.C., office of law firm Manatt, Phelps & Phillips. His practice focuses on the resolution of environmental enforcement matters, compliance counseling, climate change regulation and the management and resolution of environmental issues in transactional contexts. Mr. Riedel previously served as the Associate Director of the Columbia Law School Center for Climate Change Law, and prior to that, was an associate in the environmental group at a large, international law firm. He can be reached at (202) 585-6522 or ariedel@manatt.com.
