EPA targets power and manufacturing industries with financial assurance requirements
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.
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