EPA targets power and manufacturing industries with financial assurance requirements

Requirements focused on the electric power, petroleum and coal products manufacturing, and chemical manufacturing are being recommended to ensure funding is available to address potential environmental issues.

By David Greenfield February 2, 2010

The U.S. Environmental Protection Agency (EPA) has issuedan advance notice of proposed rulemaking (ANPR) that identified three industrysectors for which the agency will develop new financial assurance requirementsunder Section 108(b) of the Comprehensive Environmental Response, Compensation,and Liability Act (CERCLA). The three industry sectors are:

  • The electric power generation, transmission, and distributionindustry (North American Industrial Classification System [NAICS] 2211);
  • The petroleum and coal products manufacturing industry (NAICS 324);and
  • The chemical manufacturing industry (NAICS 325).

The proposed financial assurance rules seek to

ensure that funding will be available to address potential environmental

problems or future environmental obligations, such as the closure of a

hazardous waste treatment, storage, and disposal facility; the reclamation of a

mine; or the cleanup of a leaking underground storage tank. The primary purpose

of financial assurance is to prevent such environmental obligations and costs

from becoming public liabilities in the event that a facility owner or operator

becomes insolvent. The financial assurance mechanisms typically allowed under

existing state and federal environmental regulatory programs include: trust

fund, surety bond, letter of credit, insurance policy, financial test, and corporate


This most recent action by the EPA, the first step

in developing a final rule, follows a similar notice published in July of 2009

in which EPA identified the hard-rock mining industry as the first industry for

which it would develop Section 108(b) financial assurance requirements. In that

notice,EPA indicated it would develop such rules for the hard-rock mining

industry by the spring of 2011.

In determining how to structure this new regulatory

regime, EPA will have to evaluate current financial assurance programs, analyze

the types and magnitude of risks associated with the handling of hazardous

substances in certain industries, decide what amount of financial assurance is

needed to address those risks, and decide what types of financial assurance

mechanisms will be available to satisfy Section 108(b) obligations.

Beyond the three sectors targeted by this proposed

new regulation, EPA is also considering whether to develop financial assurance

requirements for the following industry sectors: waste management and

remediation services, wood product manufacturing, fabricated metal product

manufacturing, electronics and electrical equipment manufacturing, and

facilities engaged in the recycling of materials containing CERCLA hazardous

substances (substances that are considered severely harmful to human

health and the environment).

EPA will be accepting public comment on this ANPR

for 30 days after it is published in the Federal Register. This process should entail

extensive research, data gathering, and outreach to stakeholders through the

solicitation of public comment.

Access other Control Engineering contentrelated to regulatory issues:

  • DynamicSimulation for Emissions Regulation
  • Honeywelltargets applications and services at new EPA regulations
  • Howwill the EPA regulate greenhouse gasses?


– Edited by David Greenfield , editorial director
Control Engineering Sustainable Engineering News Desk