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New EPA Guidance Rule Could Backfire on Business, Lawyers Say

Sept. 14, 2020, 7:51 PM

The EPA’s new rule restraining how it creates guidance documents could backfire on businesses that want to trim the use of such informal documents, according to legal scholars and environmentalists.

Such documents are meant to provide insight into how agencies interpret laws or are implementing legal requirements—not actually impose new mandates. Critics of the Trump administration, however, say federal agencies have been more frequently leaning on informal guidance documents to skirt formal notice-and-comment rulemaking.

The final rule requires a public notice and comment process for some guidance, a shift from the old approach in which the EPA could issue guidance essentially without any input from outside groups. In a statement, Environmental Protection Agency Administrator Andrew Wheeler called the rule “perhaps the biggest change in administrative procedures in a generation.”

The rule’s mandates could make it harder for EPA to issue new guidance, said Sidney Shapiro, an administrative law professor at Wake Forest University. Regulated entities will then miss clear instructions that tell them how the EPA is interpreting its sometimes-vague rules and what they should watch for, he said.

“It’s a balancing act that the agency has to go through, in terms of how long they want to take to get guidance out, how much help they want to be, and whether this is going to slow the process down and make it less useful,” Shapiro said.

That concern was echoed by the Environmental Protection Network, a group of former EPA employees launched in 2017. It submitted written comments calling on the EPA to consider a range of options for taking public comment on a case-by-case basis, rather than adopting a one-size-fits-all notice and comment process.

John Walke, clean air director at the Natural Resources Defense Council, said the new constraints will have the most impact on regulatory guidance—not deregulatory guidance. That is because most of the EPA’s guidance interprets and helps implement rules rather than deregulatory actions, he said.

“That’s Wheeler’s real agenda here,” Walke said.

Helpful Clarifications

Patrick Traylor, a former EPA deputy assistant administrator for enforcement and compliance assurance during the Trump administration, said guidance can provide helpful clarification to the regulated community.

He cited the 1990 New Source Review Workshop Manual that he said regulators have used for decades to process air permits. Under New Source Review, large potential emitters must obtain permits if they add new construction or expand facilities that cause an increase in six key air pollutants.

During a webinar convened by the Federalist Society on Monday, Wheeler said the new rule will provide “additional transparency” for new guidance.

Michael McKenna, a Republican energy strategist and former White House official, lauded Wheeler’s move, as did several GOP lawmakers.

“There is always a lot of mischief in guidance,” said McKenna. “Anything that improves transparency, or even knowledge, about guidance is going to make the world better and more understandable.”

‘A Litigious Bunch’

But Shapiro challenged the notion the EPA has used guidance to issue de facto regulations that haven’t gone through notice and comment.

“The regulated community is a litigious bunch,” he said. “If the guidance doesn’t make sense to them, I think it’s highly unlikely they’re going to follow it. If they don’t like it, they’ll fight it. And if they get cited, they’ll fight the citation.”

David Coursen, a former attorney adviser at the EPA’s Office of General Counsel who started in the Reagan administration and served until 2015, said he thought it will become very hard for the agency to issue guidance in an area in which industry doesn’t want it.

“It would be virtually impossible because of the resources that industry could bring to bear in the comment process,” said Coursen, now an EPN member who helped craft that group’s written comments.

The new rule only applies to “significant” guidance documents, meaning those that could have a predicted impact of $100 million or more on the economy, or those that could hurt a sector of the economy in a material way.

Wheeler said regulated entities could petition EPA to be included under the latter category. Significant guidance that falls under the new rule could also include documents that bring on “novel legal or policy implications,” he said.

The rule also lays out a formal petition process for the public to request that the EPA modify, withdraw, or reinstate a guidance document, and requires the EPA to post guidance documents online.

Another part of the rule lets the public petition to reinstate rescinded guidance documents, Wheeler said.

Too Much Guidance?

Diane Katz, senior research fellow in regulatory policy at the Heritage Foundation, said the rule struck her as a commonsense way of drawing on the expertise of practitioners in the field who understand the specific technological and market challenges from a vaguely-written rule.

“The fact that we have so much guidance is itself a statement of how poorly most regulations are written,” she said.

Wheeler conceded that there may be an “initial flurry” of petitions, but predicted the workload would become manageable over time.

The rule likely won’t have a significant effect on enforcement because the Office of Enforcement and Compliance Assurance issues very few guidance documents and doesn’t directly enforce guidance issued by other EPA offices, according to Traylor.

The enforcement program can only enforce statutes and notice-and-comment rulemakings, and can only cite guidance documents as evidence of fair notice that the EPA has interpreted the statute or regulation in a particular way, he said. The new rule won’t change that practice, according to Traylor.

Heritage’s Katz also said it wouldn’t necessarily be a bad thing if less guidance flows out of the EPA as a result of the new rule. Regulated entities suffer when guidance flip-flops every time a new administration takes office, she said.

Not Posting

Another concern is that the EPA could kill a guidance document by simply not posting it on its portal, said Coursen.

“If you find something you don’t like, or something that one particular source doesn’t like, you simply don’t put it on the list and it’s gone,” he said. “And that could be done without discussion or explanation. This is a way for industry insiders to kill something silently.”

An EPA spokeswoman said a guidance document not appearing on the portal doesn’t necessarily mean it has been rescinded.

A document that qualifies as guidance under the 2019 executive order and the new rule that isn’t on the portal “has been rescinded and can only be used to establish historical facts,” she said.

But if a document doesn’t qualify as guidance under the executive order and new rule, “EPA may continue to use, cite, and rely on it,” she said.

To contact the reporter on this story: Stephen Lee in Washington at

To contact the editors responsible for this story: Anna Yukhananov at; Chuck McCutcheon at