Moving Towards a "Business Friendly" Regulatory Environment (?)

Transcription

1 For audio participation, dial and follow the prompt. If assistance is needed please ask to be connected to Foley s NDI Web Conference. Moving Towards a "Business Friendly" Regulatory Environment (?) May 18, 2011 Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800, 2 Today s Presenters Richard G. Stoll Partner Foley & Lardner LLP Governor James E. Doyle Of Counsel Foley & Lardner LLP Paul Noe Vice President for Public Policy American Forest & Paper Association Steven E. Chester Of Counsel Foley & Lardner LLP Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

2 3 Housekeeping Call for technology assistance Dial *0 (star/zero) for audio assistance Questions can be entered via the Q&A tab located on your menu bar at the top of your screen. We will address questions at the end of the program. We encourage you to maximize the PowerPoint to full screen usage: Hit F5 on your keyboard; or Select View from the toolbar menu and click Full Screen To print a copy of this presentation: Click on the printer icon in the lower right-hand corner Convert the presentation to PDF and print as usual Foley will apply for CLE credit after the Web conference. If you did not supply your CLE information upon registration, please it to eharris@foley.com Moving Towards a "Business Friendly" Regulatory Environment (?) Richard G. Stoll Foley & Lardner LLP Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

3 5 Moving Towards a "Business Friendly" Regulatory Environment (?) Business community and others favoring strong economy have for years complained: too many burdensome federal and state regulations are damaging the economy. 6 Moving Towards a "Business Friendly" Regulatory Environment (?) Efforts now underway to address these complaints in: U.S. Congress Federal agencies State governments Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

4 7 "Business Friendly" Efforts in Congress Basic Setting for 112th Congress House of Representatives R -193 D Senate D - 47 R - 2 Ind Many new Republicans in House pro-business, anti-big government 8 "Business Friendly" Efforts in Congress Many Attempts to Reduce Regulatory Burdens Principal Fronts: 1. Appropriations "Riders 2. Substantive Legislation 3. Oversight Hearings Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

5 9 "Business Friendly" Efforts in Congress Appropriations Riders Scores of amendments included in recent House Budget Bill Would deny funding for agencies (primarily EPA) to administer or enforce specific regulatory programs Examples: climate (greenhouse gas) rules; surface mining restrictions; portland cement emission rules; water quality restrictions in Chesapeake Bay and Florida 10 "Business Friendly" Efforts in Congress Appropriations Riders All vigorously opposed by Administration Rejected in Senate Ultimately failed to be included in final bill Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

6 11 "Business Friendly" Efforts in Congress Substantive Legislation Many bills introduced Some focus on overall process for rulemaking Some focus on curtailing specific programs 12 "Business Friendly" Efforts in Congress Substantive Legislation Process examples: require greater consideration of costs, economic impacts in rules; force periodic review and amendments to rules; add procedural steps to rulemaking and make rules easier to reverse on judicial review; enhance SBA power to stop rules affecting small businesses Specific program examples: eliminate EPA climate (greenhouse gas) authority; prevent EPA from regulating coal combustion residuals (CCR) as hazardous waste Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

7 13 "Business Friendly" Efforts in Federal Agencies President Obama's New Executive Order EO 13563, 76 FR 3821 (January 21, 2011) 14 "Business Friendly" Efforts in Federal Agencies On heels of Republican House takeover late 2010, President Obama began indicating "pro-business" tilt on many fronts. On regulatory front, President issued EO in February, Authored Wall Street Journal op-ed touting new EO. Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

8 15 "Business Friendly" Efforts in Federal Agencies Takeaway messages from WJS op-ed on (1) new and (2) existing rules. New rules 1. Must be sensitive to goals of "promoting economic growth" and "vibrant entrepreneurialism;" 2. Must "strike right balance" between jobs/economy and health/safety/environmental protection. Existing rules 1. Must be systematically reviewed; 2. Must be modified or revoked -- "rooted out" -- if they "stifle job creation and make our economy less competitive," or are "not worth the cost." 16 "Business Friendly" Efforts in Federal Agencies What is new in EO 13563? Presidents since Reagan have vested regulatory review function in Office of Information and Regulatory Affairs (OIRA) within federal Office of Management & Budget (OMB). President Clinton issued EO in EO adds almost nothing significant to EO (either for new rules or existing rule review). Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

9 17 "Business Friendly" Efforts in Federal Agencies Why so many burdensome rules today if EO here since 1993? 1. NUMBERS OF RULES. Agencies issue so many new rules each year that OIRA process simply cannot act as leavening force very often. Example: EPA has over 17,000 employees, OIRA has fewer than 100, and OIRA covers all federal agency rulemakings. Usually only most truly significant (and expensive) rules draw real OIRA attention. 18 "Business Friendly" Efforts in Federal Agencies 2. STATUTORY RESTRAINTS. Example: for many of EPA s most significant statutory authorities, EPA is prohibited from undertaking balancing of costs and benefits in setting standards. All previous EOs, and new EO, recognize this and qualify their requirements "to the extent permitted by law." 3. SUBJECTIVE BENEFIT CRITERIA. Even when Congress has authorized rule to balance costs and benefits, benefit criteria can be extremely subjective. If agency wants particular result, reasonably easy to craft analysis showing benefits exceeding costs. Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

10 19 "Business Friendly" Efforts in Federal Agencies EO Adds Words that Could Facilitate Tilt Away from Economic Concerns 1993 EO says agencies should estimate "difficult to quantify" benefits. Says such benefits include "distributive impacts" and "equity." New EO adds "human dignity" and "fairness" to these benefits. Could make it even easier to craft analysis concluding that benefits outweigh costs. 20 "Business Friendly" Efforts in Federal Agencies OIRA and federal agencies have initiated "rooting out" effort for existing rules. Agencies have solicited written public comments and held "listening sessions." Overwhelming response in comments filed by business interests. Public interest groups argue agencies already way behind schedule in developing new statutorily-required rules so "root out" efforts will detract from public health and welfare protection. Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

11 21 "Business Friendly" Efforts in Federal Agencies OIRA head Cass Sunstein issued directive April 25, 2011 to federal agency heads: Agency preliminary plans must be made available by today (May 18, 2011). After additional public consultation process, agencies must issue final plans by mid-august Can all be tracked on OIRA site: 22 "Business Friendly" Efforts in Federal Agencies Most agencies also have sites where activities to comply with EO can be tracked. EPA example: From EPA Website: "By early June, you will have the chance to read our preliminary plan for periodic retrospective reviews on this website, as well as an initial list of regulations that we plan to review first. Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

12 23 "Business Friendly" Efforts in Federal Agencies Bottom Line Perhaps bona fide intent in Administration/federal agencies to change regulatory requirements in "business friendly" tilt OIRA certainly forcing agencies to be active and timely in developing "root out" review plans. But to be realistic, very significant restraints: a.incredible number of regs already on books and resources needed to change rules (remember must go through a rulemaking process to change/revoke rules); b.ever-dwindling resources; c. Public interest groups fighting these efforts through rulemaking, advocacy, and judicial review. d.major statutory restraints in many cases (Clean Air Act prohibits consideration of costs for many key standards). Regulatory Advocacy Now: The Case of Boiler MACT Paul Noe American Forest & Paper Association Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

13 25 26 Cost of Air Regulations Capital Plus Operating Avg. Industry Profits ( ) Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

14 27 Boiler MACT Broadest MACT Standards Ever industrial, commercial and institutional boilers and process heaters at major sources of hazardous air pollutants. 1,600 facilities and 13,555 boilers (about 11,000 gas boilers) Emission limits for PM, HCl, Hg, CO, and dioxin Multiple controls and complex monitoring to meet proposed limits Proposals published June 4 th, Need for Concerted Effort Allied Industries, Small Business, Agriculture Labor Congressional Overseers Governors, other state/local officials Administration EPA Other agencies OMB White House Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

15 29 Advocacy on All Fronts Audiences Executive Branch Congress Courts Arguments Economics: tradeoffs, jobs Politics: manufacturing states, labor Equity: human capital Law Science 30 Concerned Trade Groups American Forest & Paper Association American Chemistry Council American Coke & Coal Chemicals Institute American Foundry American Home Furnishings Alliance American Iron and Steel Institute American Municipal Power, Inc. American Petroleum Institute American Public Power Association American Sugar Alliance American Wood Council Alliance of Automobile Manufacturers Bioenergy Deployment Consortium Biomass Power Association Biomass Thermal Energy Council Brick Industries Association Composite Panel Association Corn Refiners Association Council of Industrial Boiler Owners Edison Electric Institute Fertilizer Institute Hardwood Federation Hardwood Plywood & Veneer Association Industrial Energy Consumers of America Institute of Shortening and Edible Oils National Association of Manufacturers National Cotton Ginners Association National Lime Association National Mining Association National Oil Recyclers Association National Oilseed Processors Association National Petrochemical & Refiners Association National Rural Electric Cooperatives Association Ohio Municipal Electric Association PA Anthracite Council Pellet Fuels Association Rubber Manufacturers Association Society of Chemical Manufacturers and Affiliates Southern Lumber Manufacturing Association The Aluminum Association Treated Wood Council U.S. Chamber of Commerce Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

16 31 Jobs at Risk from Proposed Boiler MACT Paper Mills Only Total Job Losses Boiler MACT 16,888 71,774 All Air Regulations 43, , Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

17 33 HCl Emissions 2005 US Emissions of HCl by Boiler Type Utility Boilers: Coal ICI Boilers & Process Heaters - coal ICI Boilers & Process Heaters ICI Boilers & Process Heaters - wood or waste Utility Boilers: Oil ICI Boilers & Process Heaters - natural gas ICI Boilers & Process Heaters - oil Utility Boilers: Natural Gas Utility Boilers: Wood or Waste 34 Hg Emissions Small Contributors 2005 US Mercury Emissions By Boiler Type Utility Boilers: Coal ICI Boilers & Process Heaters - oil ICI Boilers & Process Heaters - coal ICI Boilers & Process Heaters ICI Boilers & Process Heaters - wood or waste Utility Boilers: Oil Utility Boilers: Wood or Waste ICI Boilers & Process Heaters - natural gas Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

18 35 36 Recent Actions Full court press with EPA, White House, Hill and States Connected billions in costs to thousands of jobs at risk 260 elected officials sent letters including Senators, Congressmen and Governors EPA asked for 15 extra months to finalize but court gave one month Rules published March 21, 2011 effective May 20 th Challenges must be filed by May 20th EPA immediately reconsidering portions New subcategories (solid fuel, island refinery), Gas I expansion, GACT and limited use work practice, malfunction) Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

19 37 Improvements from Boiler MACT Proposal Higher limits for mercury and HCl, only modestly better PM Combination Boilers coal and biomass subcategories merged for fuel based HAPs (PM, Hg, and HCl) Work practices for biomass and liquid boilers at area sources subject to GACT (before CO limits) Expanded gas fired work practices to other clean gases Limited use boilers subject to work practices 38 Cost of Final rules GACT very modest MACT very expensive, cost not cut in half Forest Products - $ 4.3+ B, down 25%? Cost of unachievable dioxin, CO, and new sources limits? At least $14 B for all manufacturers NHSM-CISWI big, big deal given definition of waste CISWI three times more costly than Boiler MACT NHSM land fill costs and purchasing replacement fuels - $1B+ Contained gas draws in hundreds of more units billions more Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

20 39 Boiler MACT Costs for Forest Products for Final Rule HAPs/ Surrogate by Fuel type Biomass Coal PM/ metals $1.3B ($1.4B) $297 M ($576M) Oil $360M ($422M) Gas2 $12M ($12M) Total $1.9B ($2.4B) HCl (acid gases) $86M ($1.5B) $604M ($896M) $380M ($499M) $0M ($13M) $1B ($2.9B) Carbon Monoxide (CO) $554M+ ($118M) $106M ($238M) $116M ($142M) $4M ($4M) $776M ($502M) Mercury Dioxin Total $343M ($301M) $108M ($126M) $56M ($68M) $2M ($2M) $507M ($497M) $100Ms? $2.3B+ ($3.2B) $1.1B+ ($1.9B) $100Ms?? $913M+ ($1.1B) - $18M ($31M) Many $4.3B+ $100Ms ($6.3B)? 40 Major Concerns Remain Unachievable limits for dioxin PM/Metals limits expensive Unachievable biomass limits for CO New Source Limits Biased against biomass, coal and liquid fuels Single fuel energy policy natural gas EPA reaction: provide data showing variability and discuss Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

21 41 Next Steps Boiler MACT Petitioned for stay until reconsideration complete April 27 Petitions for Reconsideration filed week of May 9th Issues identified in EPA reconsideration notice Industry petitions for reconsideration Litigation coalition filed challenge April 29 - judicial stay? Legislative interest needs to be bipartisan and bicameral give EPA more time, stay rule, more compliance time and maybe direct better rules Administrative schedule EPA respond to stay, reconsideration and then proceed with rulemaking 90 days vs. indefinite Quickly vs. two year process 42 Wrap-up Tens of billions of dollars will translate into tens and probably hundreds of thousands of jobs No other country is forcing these controls on such a wide swath of industries harm competitiveness Harm new enterprises that make traditional boilers even with good or best controls Pushes energy policy towards natural gas which will drive up prices for everyone Alternative rule could reduce costs and maintain benefits Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

22 "Business Friendly" Efforts in the States Steven E. Chester Governor James E. Doyle Foley & Lardner LLP 44 Political Realignment in Governorships Prior to November 2, 2010: 23 Republicans 26 Democrats 1 Independent After November 2, 2010: 29 Republicans 20 Democrats 1 Independent Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

23 45 Political Realignment in Governorships Election Before After Red Republican Blue Democrat Green - Independent Credit: National Conference of State Legislatures 46 Political Realignment in State Legislatures Prior to November 2, Republican 27 Democratic 8 Split 1 Nonpartisan After November 2, 2010: 25 Republican 16 Democratic 8 Split 1 Nonpartisan Red - Republican Blue - Democrat Yellow - Divided Credit: National Conference of State Legislatures Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

24 and Beyond Continuously shifting balance of power Changing views of environmental policy goals 48 Regulatory Reform or Environmental Rollbacks? Emerging Executive and Legislative Themes Budget, Staffing and Program Cuts NC proposal to cut DENR operating funds by 20% Florida proposal to cut Everglades restoration funding from $50 M to $17 M Florida proposal to Department of Community affairs staff from 358 to 40 staff Rulemaking Process Changes Require agency to conduct cost/benefit and jobs impact analyses Mandate that all rules must be processed through Governor's office or a new office of regulatory reform Business Ombudsman or Advocacy Office New offices created to allow companies to lodge complaints against agencies for investigation and follow up Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

25 49 Regulatory Reform or Environmental Rollbacks? con t Emerging Executive and Legislative Themes con t "Streamline" Permitting Eliminate review requirements (e.g.; environmental impact assessments) Establish review/action deadlines (fast track permitting) Designate consequences (e.g.; automatic permit issuance; refund permit fees) Decrease number of permit actions subject to appeal by public, or impose additional requirements for appeal Modify Standard of Deference for Agency Decisions E.g.; Maine proposal to limit deference to agency interpretation of applicable statutes and to require "preponderance of evidence" to support agency action State Rules No More Stringent Than Federal Standards Already exists for number of state environmental programs E.g.; New Mexico Small Business-Friendly Task Force Report Recommendation E.g.; Maine Governor's 63 Point Regulatory Reform Plan 50 Regulatory Reform or Environmental Rollbacks? con t Emerging Executive and Legislative Themes con t Specific Program Examples Modify Building Code Standards (New Mexico; Maine) Allow environmental agency to "waive" or bypass rules to approve development projects (New Jersey) Relax standards for agricultural operations (Michigan; New Mexico) Rescinding existing water quality protections (Wisconsin - phosphorus;) Repeal existing bottle bill (Maine) Rescind or revise state air toxics review programs Modify wetlands protection laws Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

26 51 Takeaways from State Initiatives Expect both procedural and substantive changes Anticipate programmatic cut backs and reductions in service Prepare for opposition from public interest groups (litigation; petitions to EPA) Look for potentially greater EPA oversight and action Questions & Answers Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

27 53 Contact Information Richard G. Stoll Foley & Lardner LLP Governor James E. Doyle Foley & Lardner LLP Paul Noe American Forest & Paper Association (202) Steven E. Chester Foley & Lardner LLP Mark Your Calendar We hope that you will join us for the remaining sessions of the NDI Checkpoint Web Conference Series. June 15, 2011: Whistleblower Provisions of the Dodd-Frank Act July 20, 2011: Director and Corporate Secretary Duties in Foreign Countries September 20, 2011: Director and CEO Performance Review Save the Date! NDI Executive Exchange November 17, 2011 Chicago, IL Invitation-only Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,

28 55 Thank You A copy of the PowerPoint presentation and a multimedia recording will be available on our Web site within 2-3 days: We welcome your feedback. Please take a few moments before you leave the Web conference today to provide us with your feedback: Attorney Advertising Prior results do not guarantee a similar outcome 321 N. Clark Street, Suite 2800,