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USEPA Is Back. Will New Regulations Be Cost Burden or Strategic Advantage?

John Laumer | Thursday January 28th, 2010 | 2 Comments

MACT air emissions regulatory compliance tools

Image credit:Processing Magazine

Operators of energy-intensive US industrial facilities, having benefited from years of USEPA ‘enforcement light,’ now face an old-fashioned onslaught of environmental reporting requirements. USEPA is poised for action – gathering what information it needs before revised or new regulations are published. Even though new industry rules by EPA – reporting previous year’s carbon emissions for operating sites, or estimating prospective site clean-up costs, for two examples – seem reasonable, meeting the Agency’s deadlines may be a serious challenge for many operating sites and for overseeing corporate staffs. Why?

No one left to delegate to

Over the last 8 to 10 years, corporate-level Environmental, Health, & Safety (EHS) staffs have been thinned past the bare bones stage. I’m not talking about the happy talk “Sustainability VP,” a slot usually disconnected from regulatory compliance. (That will change.) I’m talking about the loss of seasoned regulatory professionals who’d spent their careers learning how to measure emissions, apply for and receive operating permits, testify at public hearings, and answer questions from plant neighbors. This stuff is definitely not taught in college.

Since the early 1970’s, the ups and downs of corporate compliance staffing have tracked EPA enforcement intensities, which in turn tracked rule makings. What’s different this time around is that expertise has to be rebuilt – possibly from scratch. Furthermore, operating site personnel are burdened with about as much as they can handle.

Having just slid into a self-created staffing trough, top execs will likely be asking “can’t we just write the new EPA reports out of our enterprise software system?” to which the answer will be a resounding no!

Time to call out the lobbyists and whine about “onerous regulatory burdens”

If that fails to derail oncoming EPA reporting requirements, business managers will hire consultants to figure out how and what to report (ideally consultants who employ former sector employees). A tip of the hat will go to consultants who offer regulatory reporting software capable of directly pumping summary data and deadlines into corporate enterprise systems.

Chemical manufacturers, petroleum refiners, coal product makers, electric power generators and distributors could face new financial assurance requirements to ensure that the owners or operators of the facilities, not taxpayers, will be responsible for cleanups through the Superfund program. This is not a job for outside accountants. People who truly understand the cost of equipment decontamination, facility demolition, and soil and water remediation have to do this work, or at least guide it. Millions may be at stake; and large reserves may, potentially, have to be posted.

US industries in basically the same sectors are currently preparing the first officially-required estimates of annual greenhouse gas emissions. See EPA’s announcement and references for this rule, the “Final Mandatory Reporting of Greenhouse Gases Rule”. As in the previous example on financial assurance, special carbon tracking software can’t make up for a shortage of internal experts: “garbage in; garbage out,” as always. Site employees with process engineering and energy management skills must feed the carbon tracking software beast.

The internal strategy piece

Carbon tracking for US industry is much more than a bureaucratic exercise: report high now and you pay later in criticism from your peers and from NGO’s. Report low and next year’s numbers make you look inept; and so on. More than a career limiting move, failure to comply accurately and strategically can impact brand and marketing plans.

Outsiders interpreting your publicly reported data

In the nightmare scenario, the carbon footprints your firm reported are tabbed by inexperienced NGO staffers to represent and compare consumer product designs. Electronics let’s say.

By now your imagination should have taken you over to stock valuation land, to the tower of unsustainable babel called Wall Street which is ready to gorge on the food supplement of green stock indexing. Your data are their data, as is the NGO spin on it.

The bottom line

Regulatory compliance is a business strategy and marketing issue as much as it is of “compliance.” If you are one of those charged with tracking and estimating, make sure the chain of command realizes this. Get the resources you need to do it right.


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  • annedemelle

    Companies should focus on sustainability and climate for reasons that extend beyond new regulatory pressure. Integrating sustainability throughout strategy and operations will shed light on new opportunities and address concerns from employees, customers and investors.

  • annedemelle

    Companies should focus on sustainability and climate for reasons that extend beyond new regulatory pressure. Integrating sustainability throughout strategy and operations will shed light on new opportunities and address concerns from employees, customers and investors.