Coalition Letter on Financial Assurance

The Honorable John Boehner
Speaker of the House 
U.S. House of Representatives
Washington, DC 20515

The Honorable Nancy Pelosi
Minority Leader
U.S. House of Representatives
Washington, DC 20515

The undersigned organizations urge you to oppose any amendment to the House FY 2012 Interior, Environment, and Related Agencies Appropriations Bill that would strike a critical provision that prohibits the U.S. Environmental Protection Agency (EPA) from developing, proposing or implementing new financial assurance requirements under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This provision is necessary to protect the global competitiveness of industries that power the U.S. economy, deliver affordable energy, manufacture and supply critical products, and provide high-paying jobs.

EPA is poised to impose these requirements despite its failure to accurately assess whether the facilities within the targeted industries actually pose a risk of becoming future Superfund sites that would require expenditure of public funds for cleanup costs. Instead, EPA’s analyses rely on mischaracterization of data regarding legacy Superfund sites, as well as vague, anecdotal and irrelevant information that exaggerates the risks posed by currently operating facilities in our industries. Additionally, EPA completely disregards that our industries operate under a comprehensive framework of state and federal environmental laws and regulations designed to prevent releases of hazardous substances or control them at levels that are protective of the environment and human health.

The vast majority, and in some cases all of the facilities, in our industry sectors are already subject to robust financial assurance requirements under federal and/or state laws. In targeting our industries, however, EPA failed to examine these laws and their role in protecting the American taxpayer from funding future Superfund sites. In these cases, CERCLA 108(b) financial assurance requirements would only duplicate other successful federal financial assurance programs, as well as potentially preempt mature state financial assurance programs.

The Western Governors Association and several western states, including Alaska, Arizona, Colorado, Nevada and New Mexico have already lodged serious concerns regarding the preemption of their programs covering reclamation of hardrock mining operations. Similarly, the Association of State and Territorial Solid Waste Management Officials, which represents state and territory agencies that implement financial assurance requirements under their solid and hazardous waste regulatory programs, CERCLA remediation projects, and underground storage tank programs, has voiced concerns with preemption and duplication.

Finally, and contrary to CERCLA’s requirements, EPA has failed to thoroughly analyze the capacity of the financial and credit markets to provide the necessary instruments for meeting any new requirements. It is unlikely that the market can supply the financial assurance that EPA would require under the worst case scenarios the agency is contemplating. As such, companies will be forced to use cash to meet financial assurance obligations, which can have significant anti-competitive effects including putting companies with less liquid cash positions out of business and posing an insurmountable market barrier for new firms. Simply put, these requirements remove capital from the economy.

EPA itself has argued in court that it does not have a mandatory duty to pursue these requirements under CERCLA 108(b). EPA has not shown that under today’s modern environmental regulations our industries present a risk of becoming future Superfund sites. Furthermore, risks our industries may pose are adequately addressed through the existing framework of federal and state environmental laws and regulations and associated financial assurance requirements. We urge you to oppose any amendment on the House floor during consideration of the House FY 2012 Interior, Environment and Related Agencies Appropriations Bill that would allow EPA to move forward with an unnecessary and unwise rulemaking that would dramatically impact the competitiveness of critical U.S. industries.

Sincerely,

American Coke & Coal Chemicals Institute
American Iron and Steel Institute
American Petroleum Institute
National Association of Manufacturers
National Mining Association
Society of Chemical Manufacturers and Affiliates
The Fertilizer Institute
United States Chamber of Commerce