A Chance to Get It Right: Federal Clean Water Act Requirements

Barry M. Hartman and Susan Geiger of K&L Gates LLP say that the maritime industry has an opportunity to help the agencies get it right the first time. Read on to see how.

Earlier this year, as a result of a lawsuit, the maritime industry had to begin meeting extensive new federal Clean Water Act requirements governing almost every incidental discharge from a vessel. According to the federal Environmental Protection Agency’s (EPA’s) own estimates, costs of compliance could reach $8.8 to over $23 million per year, across all foreign and domestic vessels operating in waters subject to the permit.

That permit has been challenged in court by environmental groups, one state, and industry associations, and the agency is already suggesting it might revisit the permit even as industry is investing in compliance with its current terms. Last month Congress proposed greenhouse gas legislation that would amend the federal Clean Air Act and impose limits on greenhouse gas emissions from vessels. In addition, EPA has proposed stricter emissions standards for vessels traveling within 200 nautical miles of shore.

The costs of compliance with these new Emission Control Areas regulations alone could reach $2.78 billion for the industry by 2020. A few weeks ago an environmental group filed a petition with EPA seeking to revamp within 180 days how the agency regulates the handling of sewage on vessels. No one knows what that will cost. Last year a citizen group tried to use the hazardous waste laws to impose cleanup obligations on vessels for particles of dust that were hazardous and that originated from air emissions from vessels in port. Finally, a federal court recently ruled that a vessel operator could be liable for damage caused by its propellers that disturb contaminated sediments in a body of water, and in another case a number of vessel operators were named is suits seeking these and other damages under the federal “Superfund” law.

Federal environmental regulation of the maritime industry under air, water and waste laws has arrived. These are not like Coast Guard regulations that focus on the maritime industry and might have some collateral environmental benefit. Rather, these are efforts directed primarily at environmental regulation that happen to focus on the maritime industry, just as they have focused on land-based industries for three decades. The question is, how will these requirements be developed and implemented? The history of environmental regulation suggests two very important lessons that may or may not be heeded as maritime environmental regulation develops.

First, agencies like the federal EPA will initially address each kind of pollution from the prism of the law that authorizes the agency to act. This requires that they focus on air, water or waste pollution separately. Under each set of laws there are often time limits that constrain the agency and prevent it from undertaking a more comprehensive approach. The result can be, and has been, enormously increased and unnecessary costs for the industry, and far less bang for the environmental dollar than what was possible.

For example, EPA determined many years ago that it could reduce air pollutants by requiring that vehicles use gasoline with MBTE in it. But when gas containing MBTE leaks (such as from underground storage tanks, or even spillage by consumers) the result can be and has been contaminated groundwater and drinking water supplies. Companies that added MBTE under federal air rules now face tort suits for water contaminated with MBTE. The transaction costs alone are enormous. Similarly, when EPA determined that coal ash from utilities was not a hazardous waste under federal waste laws, it allowed the ash to be disposed of in locations that, it now turns out, may not be safe and may present hazards as a result of the magnitude and concentration of the ash. EPA’s most recent action creating a permit that limits or eliminates discharges from vessels into waters of the United States will inevitably increase solid and hazardous waste that will be generated, removed from vessels, transported in vehicles emitting diesel fumes, and disposed of in landfills or incinerated (creating air emissions). The fact is, without careful thought and planning, addressing one environmental issue can create another.

The second lesson is that regulators need time and experience to understand the actual physical operations of the industry it is regulating. Federal water, air and waste rules are fraught with examples of well-intentioned regulations that just didn’t fit with the operations being regulated. As a result, special rules had to be developed over the years for different industries, rules that were initially developed under serious time constraints, only to be replaced at great cost and expense. More often than not, it was industry, only after it was faced with ill-fitting rules that finally made the necessary commitment to help the agency understand its issues, and develop rules that met environmental protection goals in a way that worked. For example, it took colleges and universities over twenty years to change hazardous waste handling rules that worked in more traditional industrial settings where hazardous wastes were generated by manufacturing operations, but not on college campuses where those wastes largely came from science classrooms. In the meantime these educational institutions spent millions of dollars trying to meet ill-fitting standards.

The maritime industry has operational issues that are unique and present unprecedented regulatory challenges. While EPA regulates cars traveling on US roads, it has never regulated moving industrial plants that travel all over the world. It has never had to regulate where there was limited space to locate pollution control equipment and waste storage. It has never dealt with an industrial sector that was already heavily regulated both domestically (USCG) and internationally, or where such a large segment of businesses and workers were foreign speaking and from different cultures.

The maritime industry has an opportunity to help the agencies get it right the first time. Proactive efforts can substantially reduce if not eliminate the need for regulations to be revised multiple time either because they were not developed with the entire environment in mind, or because one size does not fit all. Participation in the process at the outset will save money and have better results.

What can the industry do? Here are some possible suggestions:

• Consider using the Federal Advisory Committee process as a means of gathering the wide ranging interests in order to develop key policy recommendations for an effective and efficient framework for environmental regulation of the maritime industry;

• A key group of executives representative of segments of the industry should take the initiative to meet as a group with the EPA Administrator, the US Coast Guard, state regulators and environmental groups to educate them on the commitment of the industry for comprehensive environmental stewardship and compliance, and the issues that are faced by differing segments of the industry;

• Each key agency should have a maritime liaison who has the responsibility to meet regularly with stakeholders regarding environmental regulation; and

• The industry should develop a substantive and comprehensive structure for environmental regulation drawing on existing legal frameworks that incorporate how difference segments of the industry operate.

The time to act is now. The agency is already starting the process and it will be extraordinarily costly for industry to play catch up.

Susan Geiger and Barry Hartman are partners in the Washington, D.C., office of K&L Gates LLP. Geiger focuses her practice on regulation and legislation and represents clients on health care and biomedical research, maritime issues, homeland security, transportation, the environment, financial services, and the waste industry. Hartman engages in a national litigation and counseling practice, with an emphasis on matters involving environmental issues and the regulation of chemical and biological materials, as well as hazardous substances and wastes.