EPA Proposes Risk Management Rule to Protect Workers from Inhalation Exposure to PV29
On January 14, 2025, the U.S. Environmental Protection Agency (EPA) issued a proposed rule to address the unreasonable risk of injury to human health presented by Color Index (C.I.) Pigment Violet 29 (PV29) under its conditions of use (COU) as documented in EPA’s January 2021 risk evaluation and September 2022 revised risk determination. 90 Fed. Reg. 3107. The proposed rule states that the Toxic Substances Control Act (TSCA) requires that EPA address by rule any unreasonable risk of injury to health or the environment identified in a TSCA risk evaluation and apply requirements to the extent necessary so the chemical no longer presents unreasonable risk. To address the identified unreasonable risk, EPA proposes requirements to protect workers during manufacturing and processing, certain industrial and commercial uses of PV29, and disposal, while also allowing for a reasonable transition period prior to enforcement of said requirements. Comments are due February 28, 2025. EPA notes that under the Paperwork Reduction Act (PRA), comments on the information collection provisions are best assured of consideration if the Office of Management and Budget (OMB) receives comments on or before February 13, 2025.
As reported in our January 25, 2021, memorandum, pursuant to TSCA Section 6(b), EPA determined that PV29 presents an unreasonable risk of injury to health, without consideration of costs or other nonrisk factors, including an unreasonable risk to potentially exposed or susceptible subpopulations (PESS) identified as relevant to the 2021 risk evaluation for PV29 under the COUs. EPA notes that the term “conditions of use” is defined in TSCA Section 3(4) to mean the circumstances under which a chemical substance is intended, known, or reasonably foreseen to be manufactured, processed, distributed in commerce, used, or disposed of. To address the unreasonable risk, EPA proposes, under TSCA Section 6(a), to:
Require use of assigned protection factor (APF) 50 respirators and equipment and area cleaning to address the risk from inhalation exposure to dry powder PV29 (also referred to as regulated PV29), where dry powder PV29 is expected to be present, for the following COUs:
Domestic manufacture;
Import;
Incorporation into formulation, mixture, or reaction products in paints and coatings;
Incorporation into formulation, mixture, or reaction products in plastic and rubber products;
Intermediate in the creation or adjustment of color of other perylene pigments;
Recycling;
Industrial and commercial use in automobile (original equipment manufacturer (OEM) and refinishing) paints and coatings;
Industrial and commercial use in coatings and basecoats paints and coatings;
Industrial and commercial use in merchant ink for commercial printing; and
Disposal.
Require manufacturers (including importers), processors, and distributors in commerce of regulated PV29 to provide downstream notification of the requirements.
Require recordkeeping.
EPA notes that not all TSCA COUs of PV29 are subject to the proposed rule. As described in the 2021 risk evaluation and the September 2022 revised unreasonable risk determination, four COUs do not contribute to the unreasonable risk: distribution in commerce; industrial/commercial use in plastic and rubber products — automobile plastics; industrial/commercial use in plastic and rubber products — industrial carpeting; and consumer use in professional quality watercolor and acrylic artist paint. Consumer use in professional quality watercolor and acrylic artist paint was the only consumer COU evaluated as part of the 2021 risk evaluation. More information on EPA’s September 2022 revised unreasonable risk determination is available in our September 9, 2022, memorandum.
EPA requests public comment on all aspects of the proposed rule. According to EPA’s December 20, 2024, press release, EPA “is especially interested in hearing perspectives from the public on the feasibility and effectiveness of the proposed requirements for worker protections, including from workers and entities that would be required to implement the workplace protections.”
Commentary
EPA’s evaluation of PV29 was expected to be “easy” when it was identified as one of the first ten chemicals selected for risk evaluation. PV29 is a poorly soluble, low toxicity (PSLT) particle. EPA’s approach to PSLTs has been evolving over the years and has been the subject of controversy, including whether carcinogenicity in rats from “kinetic lung overload…[where the] dust overwhelms the lung clearance mechanisms over time” is relevant to humans.
Since EPA first issued its 1994 document titled “Methods for Derivation of Inhalation Reference Concentrations (RfCs) and Application of Inhalation Dosimetry,” scientific advances in mechanistic modeling of inhalation dosimetry have matured. The scientific understanding of the most appropriate dose metric for PSLTs (i.e., retained dose, not deposited dose) has also evolved. In 1994, EPA developed the regional deposited dose ratio (RDDR) model, an empirical model that provides predictions of deposited dose. In 2021, EPA developed an update to the multiple-path particle dosimetry (MPPD) model (i.e., MPPD EPA 2021 v.1.01). This model is an improvement over the RDDR model because it incorporates the best available science, including “some dose metric predictions…based on mechanistic descriptions instead of empirical fitting…[and] providing prediction of retained mass….” Prior to this update, MPPD was already recognized as a superior model versus RDDR for inhalation dosimetry. For example, EPA’s Integrated Risk Information System used MPPD when developing an inhalation reference concentration for benzo[a]pyrene in January 2017; the National Institute for Occupational Safety and Health also used MPPD for developing its recommended exposure limit for carbon nanotubes in April 2013.
EPA used the MPPD model in the revised draft risk evaluation for PV29. EPA subsequently used the RDDR model in the Final PV29 risk evaluation. EPA stated that “The change in model [i.e., RDDR rather than MPPD] resulted in unreasonable risk determinations for all [occupational nonusers] ONUs and industrial and commercial use in automobile paint [original equipment manufacturer] OEM and refinishing condition of use” (emphasis added). EPA justified this change by stating “The MPPD model was not thought to be appropriate because the particle size data was not robust enough and the MPPD model cannot calculate [human equivalent concentrations] HECs for the hamster data…, while the RDDR model can accept hamster data input.” We find this justification hollow. EPA did not state why the particle size data were robust enough for the RDDR model but not the MPPD model. Further, EPA did not use the hamster data as the basis for its point of departure (POD) in the Final PV29 risk evaluation. We suspect this change was based on a preferred outcome (i.e., unreasonable risks), rather than an objective scientific evaluation to determine if there is unreasonable risk.
Interestingly, EPA calculated an existing chemical exposure limit (ECEL) of 0.014 mg/m3 for PV29, but it did not provide the underlying documentation for this value. Instead, EPA only stated that it chose not to propose an ECEL for PV29 because EPA was unable to identify a “method with a limit of detection lower than the calculated ECEL….” Without the underlying documentation, it is impossible to determine if EPA’s proposed regulatory action is based on the best available science or if the protective measures meet the requirement to protect workers “to the extent necessary” to mitigate the risk identified.
EPA derived PODs based on the HEC of 0.28 mg/m3 derived from rats and the HEC of 0.16 mg/m3 that it derived from hamsters, but these PODs are based on a dose metric (i.e., deposited dose) that does not represent the best available science (i.e., retained dose). EPA should have used the results of the rat inhalation study (the most sensitive species) and calculated the HEC based on the retained dose. That would provide a POD that would be both health protective and based on the best available science. Without that POD and an appropriate benchmark margin of exposure (MOE), EPA cannot justify its proposed regulatory action.
The proposed PV29 risk management rule has the potential to be more impactful than other EPA risk management rules because of the thousands of PSLTs listed on the TSCA Inventory. If either of EPA’s proposed risk management options is issued in final, it will set a bad precedent by serving as the basis for all of EPA’s risk evaluations for PSLTs when respirable particles are formed. Stakeholders need to be aware and be engaged. It is critically important that the rule be based on the best available science. This is a good opportunity for EPA to work with the U.S. Occupational Safety and Health Administration (OSHA) to revise the permissible exposure limit (PEL) for particulates not otherwise regulated (PNOR) (PSLTs fall into this category), given the immense number of opportunities for exposure to PSLT dust in the workplace, many of which are not under TSCA authority.
EPA Releases New MyPest Tracking System
On January 17, 2025, the U.S. Environmental Protection Agency (EPA) released its new MyPest tracking system to provide transparency and visibility into the real-time status of pesticide submissions. MyPest is a web-based system that tracks a registrant’s pesticide applications and products after submission via EPA’s Central Data Exchange (CDX). MyPest allows users to view and communicate with the Office of Pesticide Programs (OPP) regarding their pesticide products and pending applications.
Pursuant to the requirements in the Pesticide Registration Improvement Act of 2022 (PRIA 5), MyPest seeks to provide accurate, up-to-date information about pesticide applications that are with EPA’s OPP for review.
The MyPest application is available at https://oppt.my.site.com/mypestapp/s/.
EPA provides a user guide with instructions for using the MyPest application for specific functions based on the four available roles, including:
Company Admin (CA)
Every registrant company must have at least one user designated as the CA.
This the highest level in the hierarchy of user roles and gives the user the most access and control of any role in the company.
CAs can view the status of all current projects and can access product history to view information about previously submitted projects.
CAs are the only users allowed to invite new users, approve or deny new user requests, and revoke the access of a user.
A company can have multiple CAs, however, only the first CA for a company is approved directly by EPA. No other role can be assigned to a company before the first CA is approved by EPA. After the first CA is approved, that person will approve all other roles, including additional CA roles.
CAs can be assigned to multiple companies.
Company Representative (CR)
A company can have multiple CRs.
CRs have access to all user submissions on behalf of the company.
CRs can be assigned to multiple companies.
Consultant
A company can have multiple Consultants.
Consultants only have access to view the projects that they are currently working on or have worked on in the past.
By default, Consultants only have access to view information at the case level but can request to view the information at the product level. The Consultant’s cases are assigned by the CAs.
Contributor
Contributors are assigned for a specific purpose and for a limited time.
All information submitted by the Contributor is marked as “Confidential” but can be toggled on and off.
Any information marked as “Confidential” only can be viewed by the Contributor.
The CA assigns cases to the Contributor upon role request approval.
All MyPest roles are established per EPA Company Number. If a company has multiple Company Numbers, then a CA will need to be set up for each unique EPA Company Number.
The company CA first must request the CA role in MyPest. EPA approves only the first CA per EPA Company Number, as the CA then will approve future role requests.
ECHA Adds Five Chemicals to the Candidate List and Updates One Entry
The European Chemicals Agency (ECHA) announced on January 21, 2025, that it added five chemicals to the Candidate List of substances of very high concern (SVHC) and updated one entry:
Substance Name
Reason for Inclusion
Examples of Uses
6-[(C10-C13)-alkyl-(branched, unsaturated)-2,5-dioxopyrrolidin-1-yl]hexanoic acid
Toxic for reproduction (Article 57(c))
Lubricants, greases, release products, and metal working fluids
O,O,O-triphenyl phosphorothioate
Persistent, bioaccumulative, and toxic (PBT) (Article 57(d))
Lubricants and greases
Octamethyltrisiloxane
Very persistent, very bioaccumulative (vPvB) (Article 57(e))
Manufacture and/or formulation of: cosmetics, personal/health care products, pharmaceuticals, washing and cleaning products, coating and non-metal surface treatment, and in sealants and adhesives
Perfluamine
vPvB (Article 57(e))
Manufacture of electrical, electronic, and optical equipment and machinery and vehicles
Reaction mass of: triphenylthiophosphate and tertiary butylated phenyl derivatives
PBT (Article 57(d))
No active registrations
Updated entry
Tris(4-nonylphenyl, branched and linear) phosphite
Endocrine disrupting properties (Article 57(f) — environment)
Polymers, adhesives, sealants, and coatings
ECHA states that its Member State Committee confirmed the addition of these chemicals to the Candidate List, which now has 247 entries. ECHA notes that some entries are groups of chemicals, so the overall number of impacted chemicals is higher. Candidate List chemicals may be placed on the Authorization List in the future. If a substance is on that list, its use will be prohibited unless companies apply for authorization and the European Commission (EC) authorizes them to continue its use.
Under the Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation (REACH), companies have legal obligations when their substance is included — either on its own, in mixtures, or in articles — on the Candidate List. Suppliers of articles containing a Candidate List substance above a concentration of 0.1 percent (weight by weight) must provide their customers and consumers information on how to use the article safely. ECHA notes that consumers have the right to ask suppliers whether the products they buy contain SVHCs. Importers and producers of articles must notify ECHA if their article contains a Candidate List substance within six months from the date it has been included on the list (January 21, 2025). European Union (EU) and European Economic Area (EEA) suppliers of substances on the Candidate List, supplied either on their own or in mixtures, must update the safety data sheet (SDS) provided to customers.
Under the Waste Framework Directive, companies also have to notify ECHA if the articles they produce contain SVHCs in a concentration above 0.1 percent (weight by weight). ECHA will publish this notification in its database of substances of concern in products (SCIP). Under the EU Ecolabel Regulation, products containing SVHCs cannot have the ecolabel award.
5 Trends to Watch: 2025 Energy in Asia
The Next “Champion” for Offshore Wind Development. While Taiwan has been the focal point for international developers in recent years, we now see Japan, South Korea, India, Vietnam, and potentially the Philippines actively pursuing offshore wind projects. Investors are focusing on Japan and South Korea for opportunities and Japan will likely emerge as the largest offshore wind market in Asia.
BESS – Riding the Renewable Energy Growth. As renewable energy sources continue to expand, maintaining grid stability and reliability becomes increasingly challenging. Battery Energy Storage System (BESS) projects provide a crucial solution to this intermittency issue, enhancing grid stability and bolstering the resilience and reliability of the electricity supply system. We anticipate significant growth in this sector, with the success of Japan’s long-term decarbonization power source auctions potentially leading to similar initiatives in other jurisdictions.
Data Centers and the Challenge to “Go Green.” As we advance into the era of artificial intelligence, the growing demand for data storage highlights the urgent need for greener and more sustainable data centers. Developers want to increase adaptation of renewable energy sources to boost sustainability and minimize environmental impact, but the reality of sourcing green energy is a challenge. We anticipate a continued emphasis on energy transition fuels until the region can offer reliable green energy to run data centers.
Lingering Effects of COVID-19. The construction of large-scale energy projects continues to be impacted by the lasting impacts of the COVID-19 pandemic, with widespread reports of cost overruns arising from delays that occurred during the height of the pandemic. Consequently, this is likely to result in an increase in disputes among project participants. Given that disputes for such large-scale energy projects are typically resolved through SIAC or HKIAC arbitration, we anticipate continued growth in international arbitration in the region.
Is Vietnam’s Energy Sector Turning the Corner? Although progress has been slower than anticipated, Vietnam is now making significant strides in developing its power sector. Key regulatory milestones have included the long-awaited approval of the National Power Development Plan (PDP 8) in May 2023, PDP 8’s implementation plan in April 2024, the issuance of Decree 80 introducing direct power purchase agreement (DPPA) mechanisms in July 2024, and Decree 115 for tender process in September 2024. These developments suggest that Vietnam is on the path to reshaping its regulatory environment for international developers who, in the recent past, have been critical of the lack of clear legal framework and investment certainty.
Energy Demand for AI Drives the Midwest’s Focus on Resource Adequacy
As presidential administrations change and policy priorities shift, the steady hum of electricity demand from artificial intelligence (AI) and data centers presses forward. Last week, the President signed several executive orders to realign federal energy priorities. One recent executive order is crucial to data centers and artificial intelligence: Declaring a National Energy Emergency.
The executive order focuses on improving grid reliability and ensuring a reliable supply of energy (though not wind- or solar-powered energy). The impetus for declaring an emergency was, in part, “due to a high demand for energy and natural resources to power the next generation of technology.” The emergency declaration unlocks several powers for the President. Executive agencies were directed to exercise those powers to facilitate the siting, production, transportation and generation of domestic energy resources on federal (or even private) lands. These resources include fossil fuels, uranium, geothermal heat, hydropower and certain critical minerals. Agency heads are permitted to recommend the use of federal eminent domain authority if necessary to achieve these objectives.
This order comes at a time when AI-driven technology is rapidly developing. Some of the most popular AI models require massive computational resources. Training these models involves processing enormous amounts of data across thousands of servers, each consuming significant amounts of electricity to keep their hardware cool. Data centers, which house these servers, are at the heart of the AI revolution. As the executive order notes, “the United States’ ability to remain at the forefront of technological innovation depends on a reliable supply of energy and the integrity of our Nation’s electrical grid.”
Reliable, abundant, and affordable electricity is a critical reason why data centers are targeting the Midwest region for future development. The region has a diverse energy mix, including coal, natural gas, and nuclear, along with an increasing share of wind and solar. However, the boom in demand from AI and associated technology has complicated the region’s reliability and affordability picture. As data centers proliferate across the plains, demand during peak periods is intensified.
Investor-owned utilities report on the present circumstances in their public statements. The average project size in Ameren Missouri’s service territory increased from 3.2 megawatts (MW) in 2019 to 181.2 MW in 2024. Oklahoma Gas & Electric expects over 20% growth in its energy forecast for the next five years. In Evergy’s service territory in Missouri and Kansas, roughly 6 gigawatts (GW) of projects sit in its economic development queue. For context, the Wolf Creek nuclear plant in Kansas has a nameplate capacity of roughly 1.2 GW.
Increasing data center demand comes at a time when the region is also experiencing growth in other energy-intensive industries, such as electric vehicle manufacturing and semiconductor production. The electrical grid needs to be able to manage these surges in demand without compromising reliability, which poses a challenge for regulators and grid operators. More data centers operating in the region means that the peak demand could shift in new directions, with potential implications for the overall energy system.
Regulators, customers and developers must consider rate design and cost allocation to manage this new demand picture and ensure resource adequacy. While the federal government is staking out its position, state regulators, data center developers and utilities can also approach this task with several strategies:
Effective Rate Design: Managing increased demand will require significant investments in new energy infrastructure. State regulators should ensure developers can access reliable energy at a just and reasonable rate when data centers need it without expecting other customers to cover more than their fair share of new upgrades. Utilities and developers should craft tariffs that balance these needs.
Investment in Grid Infrastructure: Upgrading and modernizing the electrical grid will be essential to handle increased demand. Additional development of electric transmission infrastructure is vital to dispatch regional generation resources and meet growing demand. Smart grid technologies, which use digital communications to monitor and manage electricity flow, can also help improve efficiency and resilience.
Energy Efficiency in Data Centers: Data center operators can reduce their impact on peak demand by investing in energy-efficient technologies and practices. Many data center operators are already pursuing advanced cooling systems and optimizing server workloads to mitigate their electricity consumption. As the technology behind AI continues to evolve, the efficiency of the infrastructure supporting it will need to improve.
Demand Response Programs: Utilities can implement demand response programs, which incentivize consumers—including data centers—to reduce their electricity usage during peak periods. This could help balance the grid during times of high demand, ensuring that the system remains reliable.
The increasing demands placed on the electricity grid by AI and new data centers represent a significant challenge for resource adequacy in the Midwest region of the United States. However, with thoughtful planning, strategic investments in infrastructure and energy efficiency, the region can continue to support its technology-driven economy while ensuring the reliability and sustainability of its energy supply.
2025 Outlook: Recent Changes in Construction Law, What Contractors Need to Know
The construction industry is at a crossroads, influenced by shifting economic landscapes, technological advancements, and evolving workforce dynamics. With 2025 under way, businesses must stay ahead of key trends to remain competitive and resilient. Understanding these industry shifts is critical—not just for growth, but for long-term sustainability and safety.
Here’s what to expect in 2025:
Job Market
According to the Michael Bellaman, President and CEO of Associated Builders and Contractors (“ABC”) trade organization, the U.S. construction industry will need to “attract about a half million new works in 2024 to balance supply and demand.” This estimate considers the 4.6% unemployment rate, which is the second lowest rate on record, and the nearly 400k average job openings per month. A primary concern as we enter 2025 is to grow the younger employee pool, as 1 in 5 construction workers are 55 or older and nearing retirement.
While commercial construction has not yet been as heavily impacted as residential construction by the lack of workers, the demand for commercial will increase as more industries are anchored on U.S. soil. Think of bills such as the CHIPS and Science Act that allocated billions in tax benefits, loan guarantees, and grants to build chip manufacturing plants here. This is true regardless of political party; investing in American goods and manufacturing seems to be a bipartisan opinion.
AI and Robotics
At the end of 2024, PCL Construction noted that AI will be an integral part of the construction industry. Demand for control centers will drive up commercial production, though the workforce lack may present some challenges when it comes to a construction company’s productivity and workload capacity.
AI will not just change the supply and demand market, but also will be integrated in the day-to-day mechanics and sensors for safety measures within a construction zone. On top of the demand for microchips catalyzed by the CHIPS and Sciences Act, AI is used to “monitor real-time activities to identify safety hazards.” AI-assisted robotics can take on meticulous work such as “bricklaying, concrete pouring, and demolition while drones assist in surveying large areas.” We will start to see where the line is drawn between which jobs require a skilled worker and which can be handled by AI without disrupting the workforce.
Economic Factors
The theme of the years following COVID-19 has been to return the economy to what it was pre-pandemic, including slashing interest rates and controlling inflation. With this favorable economic outlook for 2025, construction companies can look to increasing their projects. On the residential side, the economic boom may drive housing construction to meet demand. On the commercial side, less inflation and lower interest rates for the business can lead to more developmental projects such as megaprojects and major public works. Economist Anirban Basu believes that construction companies may not reap these benefits until 2026 due to the financing and planning required.
Bringing production supply chains back to U.S. soil can help alleviate some of the global concerns such as the crisis in the Red Sea, international wars, and the high tariffs proposed by the Trump Administration. Again, economists are predicting this bountiful harvest in a few years rather than immediately.
Environmental Construction
Trends toward sustainability are leading the construction industry toward greener initiatives such as modular and prefab structures. Both options find the construction agency developing their structures outside of the building sites.
AI can also play a hand in developing Building Information Modeling (“BIM”) to better understand the nuances, possible pitfalls, and visualization of the project before construction begins. Tech-savvy construction agencies are already using programs such as The Metaverse or Unreal Engine for BIM and can significantly reduce project time, resources, and operational costs.
Employee Safety and PPE: Emphasis on employee safety – smart PPE and “advanced monitoring systems”
PPE requirements will far surpass the traditional protective gear (such as helmets, masks, and gloves). Construction sites may soon be required to supply smart PPE products that can scan a worker’s biometrics and environment to prevent medical anomalies or hazardous environmental conditions. Smart PPE devices will be enabled with Internet of Things (“IoT”) to ensure real-time data transmission and to use data analytics to track patterns or predict risks.
Conclusion
The construction industry’s future hinges on adaptability and innovation. By addressing workforce shortages, integrating AI-driven solutions, and adopting sustainable practices, companies can position themselves for success in a dynamic market. Whether it’s preparing for the long-term economic upswing or enhancing employee safety through smart PPE, proactive measures today can lead to stronger, more resilient operations tomorrow. Staying informed and prepared will be crucial for navigating the challenges and seizing the opportunities ahead.
LNG by Rail: The D.C. Circuit Vacates a DOT Rulemaking and Outlines a Path for Challenges Yet to Come
In Sierra Club v. United States Dep’t of Transportation[1], a panel of the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) vacated and remanded a final rule[2] issued by the Department of Transportation (“DOT”) permitting the transportation of liquefied natural gas (“LNG”) in approved rail cars. The final rule was subsequently stayed and never took effect.
DOT Rulemaking & the Sierra Club Decision
The rulemaking proceeding began with an executive order published on April 10, 2019. Then President Trump directed the Secretary of Transportation to propose a rule to permit LNG to be transported in approved rail cars within 100 days from the date of the executive order and to finalize the rule within thirteen months.[3] DOT subsequently issued a proposed rule that would permit the transportation of LNG by rail in DOT-113 rail cars. The proposed rule proposed no limit on the number of cars to be used to transport LNG on a single train and imposed no mandatory speed limit. The proposed rule also included a preliminary environmental assessment finding that the proposed rule would have no significant environmental impact.[4]
The proposed rule was challenged by environmental organizations, states, and the National Transportation Safety Board, all citing potentially grave risks related to potential explosions or fires related to transportation of LNG by rail and separately arguing that the proposed rule failed to mitigate those risks.[5]
In July 2020, the DOT modified the final rule in several respects. The Court summarizes the changes as follows:
The final Rule authorizes transportation of LNG by rail, but it differs from the Proposed Rule in several respects. First, the final LNG Rule imposes new requirements for the outer tank of approved railcars: The outer tank must be both thicker and made of stronger steel than that used in existing 120W cars. Specifically, the tanks must be 9/16″ thick, rather than the current minimum of 7/16″. The outer tank also must be made of TC-128 Grade B normalized steel, which is less likely to crack or puncture than the steel typically used in DOT-113 cars. Second, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) boosted the maximum filling density from 32.5% to 37.3%. Finally, the LNG Rule includes additional operating controls to promote safety: (1) Tank cars carrying LNG must be equipped with remote monitoring devices for detecting and reporting each car’s internal pressure and location; (2) Any train with at least 20 LNG tank cars in a continuous block or with 35 such cars throughout the train must be equipped with advanced braking capabilities; and (3) PHMSA adopted the routing requirements of 49 C.F.R. § 172.820, which require railroads to consider safety risk factors, such as population density, when analyzing potential routes for transporting LNG.[6]
The final rule reiterated the finding that the rule would have no significant environmental impact. As a result, no environmental impact statement was prepared. The petitions for review that are the subject of the Sierra Club case followed.
The Court determined that the case was ripe for review even though the rule had never been finalized and was at the time of the decision stayed.[7]
The Court affirmed that each class of petitioners had requisite standing to pursue its appeal.[8]
On the merits, the Court found that the final rule authorizing transportation of LNG by rail was arbitrary and capricious:
[Petitioners] claim that PHMSA failed to take a hard look at how the LNG Rule would affect public safety and therefore violated [National Environmental Policy Act (“NEPA”)]. In support of their argument, they note that PHMSA disregarded the checkered safety record of the 120W tank car and ignored the risks of including numerous cars of LNG within a single train without any required speed limit. We agree and vacate the LNG Rule.[9]
The Court’s decision in this respect was very narrow. The error was not preparing an Environmental Impact Study (“EIS”). The Court explained:
In this case, PHMSA determined that an EIS was not required because authorizing LNG transport by rail under the LNG Rule would have no significant impact on the environment. But the record reflects that transporting LNG by rail poses a low-probability but high-consequence risk of a derailment that could seriously harm the environment: A breach of one or more rail cars containing LNG could cause an explosion, an inferno, or the spread of a freezing, flammable, suffocating vapor cloud. The real possibility of such catastrophes significantly affects the quality of the human environment. For that reason, NEPA required PHMSA to prepare an EIS.[10]
The Court reminded observers that the scope of NEPA review is itself narrow:
NEPA is “primarily information-forcing,” so it “directs agencies only to look hard at the environmental effects of their decisions, and not to take one type of action or another.” Sierra Club v. FERC, 867 F.3d 1357, 1367 (D.C. Cir. 2017) (cleaned up). After preparing an EIS, the agency will be best positioned to determine whether the environmental risk is worth taking. Any future legal challenges to the substance of that decision would then be brought under some other statute, not NEPA. Because we vacate the instant LNG Rule due to PHMSA’s failure to prepare an EIS, such questions are left for another day.[11]
Takeaways for Future Regulatory Reforms
The challenges the Court elected not to address are also significant. These include variations on the argument that the DOT’s modification to the standards applied to the cars to be used to transport LNG by rail after the notice of proposed rulemaking was issued violated the notice and comment provisions of the Administrative Procedure Act and the public participation requirement of NEPA, as well as arguments related to the failure to take into account environmental justice concerns and the impact of LNG transport by rail on greenhouse gas emissions. At least some of these challenges (perhaps variations of all) could be deployed against future regulatory reform efforts. For example, in Liquid Energy Pipeline Ass’n v. FERC[12], a panel of the D.C. Circuit vacated a Federal Energy Regulatory Commission (“FERC”) oil pipeline index rule that was modified on rehearing by FERC without being subjected to another round of notice and comment rulemaking.
For those industry stakeholders who support, wholly or in part, regulatory reform initiatives, this decision highlights the need to anticipate and to address alleged administrative process flaws at an early stage in policy development to ensure that any such concerns are fully addressed and resolved on the administrative record. The failure to do so can delay or undermine entirely proposed changes, regardless of their public policy bona fides. It will likely not be enough to wait and hope that affected departments and agencies who are managing multiple initiatives and challenges will have the time and resources to develop a full and adequate administrative record that can withstand judicial review. All affected stakeholders need to take affirmative steps to ensure that procedural missteps do not take on outsized consequences.
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[1] No. 20-1317, 2025 WL 223869 (D.C. Cir. Jan. 17, 2025).
[2] Hazardous Materials: Liquefied Natural Gas by Rail, 85 Fed. Reg. 44,994 (July 24, 2020).
[3] Sierra Club at *2 (citing Executive Order 13,868, 84 Fed Reg. 15,495, 1497 (April 10, 2019)).
[4] Id. at **2-3.
[5] Id.
[6] Id. at *3
[7] The Court also found that the stay did not moot the case. “Voluntary cessation does not moot a case unless it is absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.” Id. at 5 ( citing West Virginia v. EPA, 142 S.Ct. 2587, 2602 (2022)).
[8] Id. at **6-7.
[9] Id. at *7.
[10] Id. at *8.
[11] Id. *10, n. 6.
[12] 109 F.4th 543 (D.C. Cir. 2024).
Is This CARB Climate Corporate Data Accountability Act Enforcement Notice Legal?
Recently, UCLA Professor Stephen Bainbridge posted this critique of California’s climate disclosure laws – SB 253 and SB 261. Readers of this blog will recall that SB 253 requires “reporting entities” to disclose Scope 1, 2 & 3 greenhouse gas emissions. Reporting entities will also be required to obtain an independent third-party assurance of these disclosures. See California Legislation Will Make It More Costly For Those Doing Business With Those Doing Business In California. SB 261 imposes climate related financial risk reporting requirements. See California Enacts Law Mandating Climate-Related Financial Risk Reporting.
Last September, Governor Gavin Newsom signed SB 219 which, among other things, extends the date for the California Air Resources Board to adopt the regulations specified in SB 253 from January 1, 2025, to July 1, 2025. The first reports by reporting entities will still be due in 2026 on a date to be established by CARB in its rulemaking. Those first reports will cover scope 1 and scope 2 emissions during the reporting entity’s prior fiscal year.
In December, CARB issued a so-called “Enforcement Notice” with respect to SB 253 stating:
Accordingly, CARB will exercise its enforcement discretion such that, for the first report due in 2026, reporting entities may submit scope 1 and scope 2 emissions from “the reporting entity’s prior fiscal year” that can be determined from information the reporting entity already possesses or is already collecting at the time this Notice was issued [December 5, 2024]. CARB will exercise enforcement discretion for the first reporting cycle, on the condition that entities demonstrate good faith efforts to comply with the requirements of the law. This enforcement discretion is aimed at supporting entities actively working toward full compliance. Thus, for the first reporting cycle, CARB will not take enforcement action for incomplete reporting against entities, as long as the companies make a good faith effort to retain all data relevant to emissions reporting for the entity’s prior fiscal year. CARB will provide details on reporting for subsequent year reporting cycles as part of CARB’s rulemaking process.
I question whether this notice constitutes an “underground regulation” under California’s Administrative Procedure Act. That act generally imposes standards on state agency regulations and public notice and comment requirements. The APA defines a “regulation” to mean “every rule, regulation, order, or standard of general application or the amendment, supplement, or revision of any rule, regulation, order, or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure”. Cal. Gov’t Code § 11342.600. It cannot be gainsaid that the CARB’s Enforcement Notice applies generally and not to a specific person or circumstance. Furthermore, the Enforcement Notice implements SB 253. Thus, it is difficult to escape the conclusion that the Enforcement Notice is a “regulation” within the meaning of the APA. The APA prohibits state agencies from issuing, utilizing, enforcing, or attempt to enforcing any guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule, which is a regulation as defined in § 11342.600, unless the guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule has been adopted as a regulation and filed with the Secretary of State pursuant to this chapter. Cal. Gov’t Code § 11340.5.
I reached out to the CARB for comment and received the following response, which does not answer the question of the legality of the Enforcement Notice:
The enforcement notice provides a notification to the public for how CARB would exercise enforcement discretion regarding a part of Senate Bill 253.
Changes Ahead for NEPA Implementation Under President Trump’s Energy Dominance Executive Order
On President Trump’s first day in office he issued the Unleashing American Energy Executive Order (“Energy Dominance EO” or “EO”) with far-reaching consequences for implementation of the National Environmental Policy Act (“NEPA”). President Trump also signed a number of other executive orders, including the Declaring a National Energy Emergency Executive Order (“Energy Emergency EO”), that will impact environmental reviews and authorizations for projects. One critical outcome of the Energy Dominance EO is that it sets in motion the rescission of the Council on Environmental Quality (“CEQ”) NEPA regulations and a shift to reliance on agency-level regulations for NEPA implementation. Further, an interagency working group will be formed to ensure consistency within agency-specific NEPA implementing regulations and procedures.
The need for NEPA reform has long-been recognized across the political aisle and the role of CEQ’s NEPA regulations has already been placed into question. However, the immediate change in a 40+ year-old regulatory framework creates the potential for confusion that could inadvertently delay the very projects the EO is meant to benefit. The development of new guidance for this new regulatory paradigm as well as action by the interagency working group that ensures consistent application of NEPA reviews across federal agencies will be critically important.
Rescission of CEQ Regulations and Reliance Upon Agency-Level Implementing Regulations
The EO requires CEQ to propose rescinding its NEPA regulations by February 19, 2025 (30 days after EO issuance). The rescission is applicable to all CEQ NEPA regulations (40 CFR 1500 et seq.), not just those amended by the Biden Administration CEQ NEPA rulemakings. The CEQ implementing regulations had been relatively unchanged for over 40 years until a series of amendments under the first Trump Administration and then the Biden Administration. This proposed rescission further unsettles ongoing and new NEPA reviews.
By February 19, CEQ also is required to issue NEPA implementing guidance. The EO does not prescribe a specific scope or individual elements of this new guidance.
After the proposal to rescind the regulations and guidance issuance, CEQ is to “convene a working group to coordinate the revision of agency-level implementing regulations for consistency.” The EO does not dictate a particular outcome for the working group to ensure consistency across agency-level NEPA regulations.
In the time between the rescission of the CEQ NEPA regulations and any revised or new agency-level implementing regulations, agencies must rely on the NEPA statute and their own, existing NEPA implementing regulations and policies. Agencies, of course, continue to have an obligation to comply with NEPA as amended by the Fiscal Responsibility Act of 2023. Those statutory changes included presumptive deadlines and page limits for environmental impact statements and environmental assessments and the authorization for agencies to adopt a categorical exclusion established by another agency.
Additional EO Impacts on NEPA Implementation
Other provisions of the Energy Dominance EO also may impact NEPA implementation. These include:
Directing heads of relevant agencies to undertake “all available efforts to eliminate all delays within their respective permitting processes,” which could include maximizing the use of NEPA categorical exclusions and taking further steps to streamline the preparation of environmental assessments and environmental impact statements;
Requiring the submission of recommendations for legislative changes supporting “greater certainty” in federal permitting and “streamlining” judicial review of NEPA challenges; and
Terminating current Interagency Working Group Social Cost of Carbon related guidance and directing EPA to issue new guidance on changes to the social cost of carbon for federal permitting and regulatory decisions.
Impacts on Pending Litigation
The EO directs agencies to notify the Attorney General of any pending litigation where a stay or other action may be appropriate due to the policy changes and agency actions required by the EO. This notification requirement may trigger requests for a stay or other action in the pending lawsuit challenging the most recent Biden Administration amendments to CEQ’s NEPA regulations in Iowa v. CEQ, Case 1:24-cv- 0089 (D.N.D.). Further, the EO-directed change in CEQ’s NEPA responsibilities as well as the directed rescission of its NEPA implementing regulations could result in termination, due to mootness, of the currently pending request for en banc review in Marin Audubon Society v. FAA, 121 F.4th 902 (D.C. Cir. 2024). That pending request for review challenges a December 2024 circuit court panel decision holding that CEQ did not have the requisite rulemaking authority to implement and enforce its NEPA regulations. On January 23, 2025, the Department of Justice filed a notice with the D.C. Court of Appeals that the Administration is reviewing the effect of the EO directive to rescind CEQ’s NEPA implementing rules on the Administration’s position in the pending en banc review.
Additional Executive Order Provisions Impacting Projects
The Energy Dominance EO is one of several executive orders that will affect projects with a federal nexus through regulation, funding, or permitting. Further, these executive orders can intersect. For example, both the Energy Dominance EO and the Energy Emergency EO address use of permitting authorities and advancement of energy projects. In addition, these executive orders set aggressive deadlines, which may not be met in all cases.
EPA and OSHA Renew Cooperation With Memorandum of Understanding on Toxic Substances Control Act
The Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) have long cooperated with each other and have renewed their commitment to cooperation in a December 2024 memorandum of understanding (MOU) focused on the Toxic Substances Control Act (TSCA).
The EPA routinely recommends new chemicals be subject to TSCA review to determine whether a chemical or significant new use presents unreasonable risk of injury to health or the environment, without consideration of cost or other non-risk factors. The MOU was one of the last acts of the Biden administration’s assistant secretary of labor for workplace safety and health, Douglas Parker.
Quick Hits
A December 2024 memorandum of understanding (MOU) between OSHA and the EPA emphasizes sharing information on inspections, complaints, and potential violations related to Section 6 of the Toxic Substances Control Act (TSCA)
OSHA will encourage states with OSHA-approved state plans to participate in information-sharing activities under the MOU.
In decades’ old agreements, EPA and OSHA have outlined various alliances and agreements to work with each other in their respective inspection and enforcement activities. When personnel associated with the EPA observe workplace health and safety concerns, they are authorized under those agreements to make referrals to OSHA. When OSHA personnel identify potential environmental issues, they are authorized to make referrals to the EPA. OSHA’s process safety management (PSM) rules are the workplace health and safety corollary to EPA’s risk management program rules, both of which relate to processes involving “highly hazardous substances.”
In an MOU from 2021, the EPA and OSHA entered into an agreement related to TSCA, that resulted in:
establishing designated staff and management points of contact from each agency to discuss and resolve workplace exposure issues related to EPA’s review of new chemicals;
providing OSHA with regular updates on EPA’s new chemical determinations, including any necessary worker protection identified during EPA’s review; and
documenting EPA’s role in identifying and notifying OSHA of the need for formal consultation on EPA’s review of new chemicals.
It bears noting that the term “new chemicals” does not mean newly developed chemicals, but instead chemicals that are not on the TSCA inventory. In 2024, EPA issued draft and final risk assessments related to formaldehyde, 1,1 dichloroethane, and 1,3 butadiene. Five commonly used chemicals, acetaldehyde, acrylonitrile, benzenamine, vinyl chloride, and 4,4’-methylene bis(2-chloroaniline) (MBOCA), were designated as high-priority substances, which prioritizes the risk assessment of those chemicals. A change to the TSCA rules also resulted in all new per and polyfluoroalkyl substances (PFAS) being subject to a full safety review process under TSCA.
The 2024 MOU built on the 2021 MOU, but focused on the sharing of information and data concerning each agency’s focus areas for inspections, complaints, potential violations, and EPA’s planned enforcement pertaining to TSCA’s section 6 rulemaking and enforcement. While the MOU portends potential changes in substances that might fall under OSHA’s control, such as the list of highly hazardous chemicals related to PSM, it is not clear that OSHA will act to make any changes related to TSCA determinations.
The two agencies agreed to share information on complaints, inspections, potential violations, and EPA’s planned enforcement, as appropriate, related to TSCA section 6 activities in workplaces where areas of mutual interest exist. Each organization will exercise its independent jurisdiction to enforce applicable regulations and laws. EPA and OSHA agreed to mutually refer potential violations under TSCA section 6 and OSHA standards in workplaces within their respective jurisdictions, and, for cases of joint interest, take other cooperative steps to share information on such potential violations.
Regarding coordination with states with OSHA-approved state plans:
OSHA intends to share this MOU with state plans and encourage state plans to refer applicable potential violations to EPA.
OSHA intends to encourage states with OSHA-approved state plans to participate in all information-sharing activities established under this MOU.
Incoming Environmental Protection Agency (EPA) Personnel and Impact on Enforcement
To nobody’s surprise, it is already evident that President Trump’s second term will mark a significant shift in environmental regulation and policy from the Biden Administration. This article marks the first in a where we will highlight and analyze some of the Trump Administration’s early initiatives regarding environmental law and regulation as well as what can be expected going forward for and from the EPA, environmental law, and the regulated community.
Our review will be informed by the second Trump Administration’s early actions, a review of Trump’s first term, his campaign statements, the personnel he has nominated for key posts, and independent policy documents from influential Think Tanks.
During his first term the Trump Administration rolled back or retooled in a manner that effectively weakened over 100 environmental rules and regulations. While environmental policy was not a focal point of Trump’s 2024 election campaign, candidate Trump frequently stated that boosting fossil fuel production and reducing or streamlining environmental regulations in support of its stated goals of increasing economic efficiency would be key initiatives for his second administration. These goals also feature prominently in the positions of influential conservative policy papers such as Project 2025, a policy initiative first published in April 2023 by the conservative Think Tank The Heritage Foundation; and President Trump has already tapped Aaron Szabo, who helped to write the EPA chapter of Project 2025, to lead the EPA’s Office of Air and Radiation.
The initial round of executive orders issued by the second Trump Administration show a dramatic but expected change in approach to environmental regulation: the Trump Administration again withdrew the United States from the Paris Climate Agreement and rescinded many of President Biden’s executive orders on energy and climate change. Another executive order declared an “energy emergency” and prioritized the approval and generation of domestic energy resources, excluding wind and solar, and described using emergency powers to expedite environmental review and permitting processes.
Forthcoming early action items are likely to fit with the broader Trump Administration goals for the EPA to reduce the EPA’s costs and staffing, increase reliance on states for environmental enforcement and regulation by taking a more supportive role, and continuing to support fossil fuel development over renewable energy development. We can also expect actions by the EPA to identify existing rules to be stayed as well as reviewing employees and staffing objectives while looking for opportunities to downsize to further these aims.
It is also likely that from the outset Trump’s EPA will look to reassess many of the EPA’s and DOJ’s current environmental enforcement cases. A report by the Environmental Integrity Project tracking the EPA’s enforcement actions since 2001 predicts that the expected drop in funding and staffing at the EPA, coupled with the new administration’s stated policy goals, will lead to a significant reduction in the EPA’s enforcement. This is consistent with the trajectory from Trump’s first term, where the EPA continued a trend of reducing the EPA’s enforcement actions. It is likely that Trump’s EPA will seek to prioritize cooperation with the regulated community and focus on compliance rather than enforcement, which was the strategy adopted during President Trump’s first term and outlined to be taken up again in Project 2025. Taken together, there are strong indicators that the incoming Trump Administration will look to stay ongoing enforcement cases, delay others, and limit future federal enforcement efforts.
AB 238 Mortgage Deferment Act for California Wildfire: Mortgage Forbearance Relief
AB 238, also referred to as the Mortgage Deferment Act, to add Title 19.1§ 3273.20 et seq. (the “Mortgage Deferment Act” or the “Act”), was introduced in the California legislature on January 13, 2025 to provide essential financial relief to the victims of the Los Angeles County wildfires (including the Palisades and Eaton fires) that continue to burn in multiple locations throughout Southern California. The Mortgage Deferment Act may be heard in committee on February 13, 2025. If implemented, the Act is intended to provide financial relief to those who have lost their homes or livelihood to wildfires by allowing borrowers to request mortgage payment forbearance for up to 360 days, in two increments of 180 days each.
The Mortgage Deferment Act is modeled after the CARES Act, which provided similar forbearance relief to those experiencing financial hardship during the COVID-19 pandemic. To effectuate a request under the Act as currently drafted, the borrower[1] must submit a request for forbearance to the borrower’s mortgage loan servicer and affirm that the borrower is experiencing a financial hardship due to the wildfire disaster. Id. at § 3273.22(a). No additional documentation is required for a request for forbearance, other than the borrower’s attestation to a financial hardship caused by the wildfire disaster. Id. at § 3273.23(a).
Upon receipt of such a request, the mortgage servicer must provide the borrower a forbearance for up to 180 days, which may be extended for an additional period of up to 180 days at the request of the borrower. Id. at § 3273.22(b). Additionally, the mortgage servicer must communicate with the borrower to whom a forbearance has been granted to ensure that the borrower understands that the missed mortgage payments must be repaid, although they may be paid back over time. Id. at § 3273.23(a)-(b).
The proposed legislation prohibits the assessment of additional fees, penalties, or interest beyond scheduled amounts. It also requires an immediate stay of foreclosure efforts, and extends to all aspects of the foreclosure process, including foreclosure-related eviction. Moreover, during the forbearance period, the Mortgage Deferment Act prohibits a mortgage servicer from initiating any judicial or nonjudicial foreclosure process, moving for a foreclosure judgment or order of sale, or executing a foreclosure-related eviction or foreclosure sale. Id. at § 3273.24.
If the Mortgage Deferment Act is implemented, it will be of the utmost importance for mortgage servicers to work closely with borrowers who may have been impacted by the wildfire disaster in California. Servicers should also ensure that borrowers requesting forbearance are properly informed that any missed mortgage payments pursuant to the borrower’s forbearance request ultimately will be required to be repaid to the mortgage servicer. Further, upon implementation, any failure to properly adhere to the Mortgage Deferment Act by mortgage servicers could have significant negative consequences, which could include litigation and/or compliance issues. Servicers should monitor the status of the Act, to ensure that they are prepared to fully comply with its terms, should the Act become law.
[1] The Mortgage Deferment Act, as currently drafted, includes various proposed definitions. “Borrower” is defined as a natural person who is a mortgagor or trustor or a confirmed successor in interest, or a person who holds a power of attorney for a mortgagor or trustor or a confirmed successor in interest. Mortgage Deferment Act § 3273.21(a). “Mortgage loan” is defined as a loan that is secured by a mortgage and is made for financing, including refinancing of existing mortgage obligations, to create or preserve the long-term affordability of a residential structure in the state, or a buy-down mortgage loan secured by a mortgage, of an owner-occupied unit in this state. Id. at § 3273.21(b). “Mortgage servicer” means a person or entity who directly services a loan or who is responsible for interacting with the borrower, managing the loan account on a daily basis, including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note and security instrument, either as the current owner of the promissory note or as the current owner’s authorized agent. Id. at § 3273.21(c). “Wildfire disaster” means the conditions described in the proclamation of a state of emergency issued by California Governor Gavin Newsom on January 7, 2025. Id. at § 3273.21(d).