Entering 2021, many wondered whether the Biden Administration would follow through with its promise of increasing environmental enforcement. Observers suggested that the administration’s early appointees, such as David Uhlmann as the Assistant Administrator for Enforcement and Compliance Assurance at EPA, indicated an increased emphasis on prosecuting environmental crimes and ramping up civil enforcement. A slate of recent announcements (including new civil and criminal charges and settlements) suggests that EPA and DOJ may be prioritizing enforcement cases involving energy interests.
Looking at the latest stats, early indications suggest that cases and outcomes remained fairly steady in 2021, largely in line with enforcement trends over the last decade. This remained largely true despite the Biden Administration rolling back various Trump-era enforcement reforms, such as taking early steps to reinstate the use of supplemental environmental projects and third-party payments in environmental cases. In 2021, for example, EPA and DOJ initiated 1,562 and concluded 1,603 civil cases, nearly identical to 2020’s 1,562 initiations and 1,599 conclusions. Criminal enforcement numbers declined slightly from prior years; in fact, 2021 saw the fewest number of criminal cases opened since 2017 and the fewest total years of prison sentences since at least 2011. Whether this results from pre-2021 cutbacks in funding for enforcement or simply reflects longer-term trends is subject to debate, but it is clear that the anticipated ramp-up in the number of environmental enforcement cases is not yet seen in the most recent statistics. It would likely take at least a couple of years for funding increases for federal environmental prosecutions to show up in the data.
While the number of cases may be steadily declining, DOJ and EPA assessed significantly higher financial penalties in 2021, suggesting that EPA and DOJ may be using their limited resources to pursue higher-value cases. In 2021, EPA assessed $1.06 billion in administrative and civil penalties, significantly higher totals than the prior three years combined. EPA also secured commitments of more than $8.5 billion to return industry facilities to compliance, the highest amount in four years. Fewer total cases paired with higher total financial penalties indicate that the costs associated with settling federal environmental enforcement cases may be increasing.
The return of supplemental environmental projects (“SEPs”) and third-party payments has not seemed to play a substantial role in EPA’s enforcement outcomes in 2021. SEPs were utilized seven times in 2021, by far the fewest in EPA’s dataset. Anecdotal evidence suggests that EPA and DOJ have not yet fully returned to past practices involving SEPs and third-party payments. DOJ regulations still contain Trump Administration provisions restricting the use of such payments. Though 2021 saw the fewest number of SEPs, the average cost of implementing each SEP was the highest, with the average SEP valued at over $1.7 million.
The data is uncertain at this point as to whether the Biden Administration followed through with its stated priorities of increasing environmental enforcement in environmental justice communities. In conjunction with EPA’s memo, Strengthening Enforcement in Communities with Environmental Justice Concerns, DOJ increased enforcement actions and penalties collected in “areas of potential environmental justice concern.” For example, EPA reported collecting an estimated $2.41 billion worth of administrative and civil judicial injunctive relief in 2021, compared with $2.18 billion in the previous four years combined. EPA also collected the highest total administrative and civil judicial penalties assessed in areas of potential environmental justice concern in its database, raking in $35.61 million. However, EPA secured the fewest financial commitments to reduce, treat, or eliminate pollution in environmental justice communities, securing $33.31 million in such communities— – the lowest total since 2014.
Looking back on 2021, environmental enforcement maintained relatively consistent levels from prior years, though each case, on average, yielded significantly higher financial penalties and more costly mitigation actions. In the meantime, companies should be prepared to face higher costs in settling environmental cases if EPA decides to bring an enforcement action, particularly if they operate in areas of potential environmental justice concern.
EPA’s 2021 report and Enforcement Annual Results can be found here.
Visit 2021 – Traditional Energy Rebounds and Increased Energy Transition, for the complete list of individual, detailed articles associated with this publication.
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