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‘Disruptive’ Shutdown Seen as Crippling EPA Powers and Economy

Sept. 29, 2021, 6:03 PM

A federal government shutdown could hamper the EPA in unexpected ways that may cause ripple effects throughout the economy, attorneys and former agency officials say.

One example, which happened during the most recent shutdown that spanned 2018 and 2019, is a pause in the Environmental Protection Agency’s approval of chemical imports that form the building blocks for numerous products, said Cynthia Taub, a partner at Steptoe & Johnson LLP who heads the firm’s National Environmental Policy Act permitting and litigation practice.

“There was a real issue in the last shutdown where those just weren’t getting processed and imports were being held,” Taub said. “Imports are a big issue, especially right now, because so many industries are concerned about supply chain issues.”

The same holdups could happen for products like vehicle engine imports, which are subject to Clean Air Act regulations, Taub said.

Congress is working on a stopgap funding measure to prevent a partial closure on Friday.

Extending Uncertainty

A shutdown would force the EPA to put its pencils down on pending regulations, “which can cause issues to achieving administration goals,” said Matt Leopold, the former EPA general counsel during the Trump administration.

Extending uncertainty on big-ticket rulemakings, such as tougher auto emissions standards or a new definition of Waters of the United States, isn’t good for regulated entities or the administration’s agenda, said Brian Israel, a partner with Arnold & Porter Kaye Scholer LLP who leads the firm’s environmental practice group.

“We’re already in an era of uncertainty, because you have a change in administration and a change in agenda,” Israel said. “Add to that the uncertainty caused by a shutdown of indeterminate length, and it’s disruptive, to say the least.”

Under its 2019 contingency plan, the EPA would continue enforcing its rules, supporting criminal investigations, providing emergency and disaster assistance, carrying out Superfund work in cases where a stoppage of operations would threaten human life, and preserving ongoing experiments.

But the agency would stop doing most civil enforcement inspections, issuing permits, publishing regulations and guidance, approving pending state requests such as State Implementation Plans, and releasing new interagency agreements, according to the shutdown plan.

Enforcement to Continue

Agency veterans don’t expect the EPA’s enforcement to take a serious hit if the government shuts down.

“A lot of the enforcement they do today, they can use technology,” said Carol Browner, who led the EPA during almost the entire Clinton administration and piloted the agency through two shutdowns. “They’re not out sticking probes in smokestacks.”

EPA personnel can also look retroactively at pollutants emitted while workers were furloughed, according to Browner, now board chair at the League of Conservation Voters.

One source of confusion during previous shutdowns is the decision about which employees should keep coming to the office because their duties are necessary to an orderly shutdown, said Stan Meiburg, a 40-year EPA veteran who previously served as acting deputy administrator.

Historically, on the first day of a shutdown, most employees would come into the office, close up their computers, and leave, Meiburg said. Those who remained were staff whose functions required more time to contribute to an orderly shutdown, those whose functions contributed to immediate public health and safety protections, and those whose operations were funded by continuing revenue streams that weren’t subject to annual appropriations, he said.

Essential Workers

Essential employees have always included those in EPA headquarters and regions who work on emergency response actions, staffers who maintain the agency’s infrastructure and computer services, political appointees, and designated designated managers in each major office, said Betsy Southerland, a former director of the Office of Science and Technology in the EPA’s Office of Water.

But interpretations have varied over the years, and the situation will be different this time because most federal employees have been working remotely due to the coronavirus. Employees most likely will be told to stay off their official email and video conferencing calls if a shutdown occurs, according to Meiburg.

During the 2018-2019 shutdown, the EPA used available prior-year funding to pay employees for the maximum time possible, said Leopold, now a partner with Hunton Andrews Kurth LLP.

The agency also learned how to deal with extended lapses, staying in close contact with the White House Office of Management and Budget on legal reviews, he said.

“Unfortunately, EPA has gotten all too familiar with this drill,” Meiburg said. “It is very disruptive and there is no graceful way to do this.”

To contact the reporter on this story: Stephen Lee in Washington at stephenlee@bloombergindustry.com

To contact the editor responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com

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