EPA Chemical Safety Rule Raises Questions About Authority
For what appears to be the first time in its history, the U.S. Environmental Protection Agency has recently finalized a rule that requires board-level involvement in an EPA-administered program. Specifically, the EPA’s recent amendments to the Risk Management Program (RMP) require certain chemical plants and refineries to submit third-party audit reports on process safety directly to the audit committee of the company’s board of directors. In short, the EPA is seeking to get involved in corporate governance by dictating what information management must provide to the audit committee and when — regardless of management input. In this article, first published in Law360 on April 25, 2024, Sidley lawyers Justin Savage, Ike Adams, and Aaron Flyer dissect the recent RMP amendments, which are a follow up to the EPA’s Safer Communities by Chemical Accident Prevention rule, finalized March 11, 2024. The authors explore the EPA’s authority to regulate corporate governance requirements, the practical value in doing so, and the potential fallout for companies in terms of corporate governance. If the new RMP rule survives judicial review, it may embolden the EPA to issue other board reporting obligations in any number of its regulatory programs governing corporate operations.
U.S. Fish and Wildlife Service Finalizes Changes to Voluntary Endangered Species Act Programs and Related Permitting Process
On Friday, April 12, 2024, the U.S. Fish and Wildlife Service (the Service) issued a Final Rule making changes to 50 CFR part 13 to clarify and expedite the process for issuing enhancement of survival permits and incidental take permits pursuant to Section 10(a)(1)(A) and (B), respectively, of the Endangered Species Act. The regulatory changes are intended to provide the Service greater flexibility in implementing the permitting process and generate greater conservation results by encouraging additional engagement in voluntary programs associated with these permits, including safe harbor agreements (SHAs), candidate conservation agreements with assurances (CCAAs), and habitat conservation plans (HCPs).
U.S. EPA Memo Offers Direction on Lithium Battery Recycling—Essential to the Future Supply Chain for Battery Electric Vehicles
Lithium-ion batteries are commonly used in a wide variety of applications, from medical devices to laptops — and now, increasingly, in electric vehicles (EVs). With the market for personal and commercial EVs growing, it is essential for U.S. manufacturers to have a secure, reliable supply chain of the critical minerals needed to produce EV batteries, including lithium, cobalt, nickel, and copper. Indeed, a recent study highlights the growing demand for these minerals — and the challenges the U.S. faces to meet this demand from mined sources.
U.S. FERC Reverses Course on Rehearing, Rejecting Southwest Power Pool Effective Load-Carrying Capacity Accreditation Methodology
On March 2, 2023, in a 3–1 decision, the U.S. Federal Energy Regulatory Commission (FERC) rejected, without prejudice, Southwest Power Pool (SPP) proposal to adopt an Effective Load Carrying Capacity (ELCC) capacity accreditation methodology for wind and solar resources (Rehearing Decision). Commissioner Allison Clements issued a concurring statement, and Commissioner James Danly issued a dissenting statement. The Rehearing Decision reverses FERC’s August 2022 decision accepting, subject to conditions, SPP’s proposal to accredit wind and solar resources based on historical performance using an ELCC methodology (August Decision).
White House Solicits Comments on Recommendations for Increased Public Engagement in Federal Rulemaking
On Tuesday, February 7, 2023, the Office of Information and Regulatory Affairs (OIRA) within the White House Office of Management and Budget issued a set of recommendations for broadening public engagement in the federal regulatory process and invited public input on the recommendations through March 10, 2023. The recommendations were developed in response to a commitment to support greater public engagement in the rulemaking process included in the Fifth U.S. Open Government National Action Plan released December 2022. OIRA stated that the recommendations were informed by written submissions and a public engagement session held in November 2022. Thus, OIRA’s solicitation for public input on the recommendations provides a unique opportunity for stakeholders to potentially shape future federal regulatory reform actions.
