EPA Enforcement Budget Cuts Not Good News for Regulated Community

December 9, 2013

The next five years do not look good for EPA’s enforcement and compliance assurance program, according to EPA’s recently released “Draft FY 2014-2018 Strategic Plan.” Out for public comment through Jan. 3, 2014, the draft five-year plan announces sweeping cuts to federal inspections, enforcement cases initiated and concluded, and environmental benefits achieved as a result.

While the draft plan calls for maintaining or nominally increasing level of effort on just two enforcement activities (criminal enforcement and oversight of open consent decrees), inspections are slated to drop 33 percent, case initiations 41 percent and case conclusions 48 percent compared with baseline levels. Likewise, EPA enforcement actions will secure over 1.4 billion fewer pounds of air pollutants and 500 million fewer pounds of water pollutants.

While the agency appears to be counting on state, local and tribal governments to pick up the slack, it may be impossible for them to do so, given the lingering effects of the Great Recession on state and local budgets. As a result, various groups are calling on the agency to find money from elsewhere to cushion the blow.

Unlike other EPA programs, however, the enforcement program is personnel heavy and contract light and has few options, short of cutting level of effort or sacking staff, to make up for lost appropriations. This has led some agency insiders to voice cautious support for the enforcement program’s recognition that it must now do less with less.

For two reasons, though, it may be premature for the regulated community to breathe a collective sigh of relief. First, the draft plan is subject to change in light of comments. But secondly, in the absence of a strong federal enforcement presence, states, tribes and local governments are likely to take an uneven approach to environmental enforcement, creating uncertainty for companies that operate across multiple jurisdictions.

Despite projected budget cuts, EPA will retain significant enforcement resources, which it intends to focus on six national enforcement initiatives, including: air pollution from large sources and air toxics; energy extraction; mineral processing; sanitary sewer and combined sewer overflows; and animal waste. The agency continues to take significant enforcement actions in each of these areas, with some consent decrees requiring decades of injunctive relief worth hundreds of millions or billions of dollars.

McGuireWoods is actively monitoring enforcement developments at the federal, state, tribal and local levels and stands ready to assist in navigating the compliance challenges that arise in this ever-changing landscape.