On August 27, 2018, the Department of the Interior (Interior) issued a 60-day advance notice of a proposed rulemaking that would overhaul its regulations for conducting natural resource damage assessments and restoration (NRDAR). 83 Fed. Reg. 43611 (Aug. 27, 2018). Interior performs damage assessments and restoration activities in response to releases of hazardous substances that injure natural resources. This proposal presents a long-overdue opportunity to update NRDAR practice and would bring much-needed consistency, certainty, cost-effectiveness, and innovation to the process. Interior is soliciting specific, detailed suggestions for how best to improve all aspects of the NRDAR process. Comments are due by October 26, 2018.

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., authorizes Federal, State, and tribal governments to bring claims for natural resources they manage or oversee that are injured or destroyed as a result of the release of a hazardous substance into the environment.1 These “trustees” of the public’s natural resources, in conjunction with the Department of Justice, prosecute claims and negotiate settlements to acquire funds to restore the injured natural resources back to their pre-release levels. The current program relies on a complicated web of regulations that breeds massive uncertainty on a case-by-case basis and results in unpredictability for potentially responsible parties and frustration for other stakeholders. The last updates to some of the regulations were undertaken over a decade ago and, as Interior itself noted, the rest are “overly prescriptive, repetitive, and dense.”2

Interior highlights a specific set of topics on which it is seeking comments from the public, which can be summarized in four key issues:

  • Simplification and standardization of the regulations;
  • An early emphasis on determining restoration options over damages;
  • The use of innovative tools like advance restoration and restoration banking; and
  • Streamlining NEPA compliance.
  1. Simplification and standardization: Interior requests feedback on the suggestion from stakeholders that the regulations be translated into “plain English” and mirror the structure of the related NRDAR regulations for injuries to natural resources from oil spills developed under the Oil Pollution Act (OPA). Then, it asks for suggestions related to revision to and use of the “Type A regulations,” an existing streamlined process intended for use in situations that require minimal field observations. Interior leaves both of these topics extremely open-ended, suggesting a willingness to consider wholescale changes.
  2. Emphasizing restoration over damages: Interior also solicits input as to (1) how the regulations could place greater emphasis on restoration over damages earlier in the NRDAR process, and (2) how early restoration-focused negotiated settlements could be aligned with the existing requirements in the Regulations for assessment and restoration planning. Again, Interior appears open to suggestions from the regulated community, requesting comments and suggestions on where in the NRDAR process these efforts to emphasize early restoration should be included, and specifically how they should be worded. Interior admits that the current regulations offer little guidance on how to integrate early settlements into the existing process. The opportunity now exists to create a framework that both incentivizes early settlement and clears out regulatory red tape, saving time and money for affected parties and the governmental trustees.
  3. Restoration banking: Interior recognizes the innovation that some states, like Louisiana, have shown in creating third-party restoration banks and other “advance restoration” techniques to satisfy NRDAR liabilities in the absence of any guidance in the existing regulations. Interior indicates that language needs to be added to the regulations to promote wider use of these tools. It is worth noting that Interior’s discussion of this topic is slightly superficial and ignores the potential regulatory landmines surrounding the use of restoration banking in the NRDAR context, such as how the NRDAR concept of “baseline” comports with restoration undertaken in advance of impacts to natural resources. Commenters would be well-served to consider whether and how certain aspects of NRDAR potentially conflict with conservation banking when weighing in on this issue.
  4. NEPA compliance: Last but not least, Interior requests comments or suggestions on streamlining NEPA compliance in NRDAR actions. In particular, Interior notes a recommendation that was suggested by a committee convened by Interior from 2005 to 2007 under the Federal Advisory Committee Act: adopting Department-wide, NRDAR-focused “categorical exclusions” under NEPA. The reasoning behind this suggestion is simple: adopting Department-wide categorical exclusions for natural resource restoration activities reduces administrative redundancy between agencies and better integrates restoration planning and NEPA compliance, yielding a more efficient, and therefore cost-effective, process.

In summary, the proposal represents a golden opportunity to modernize Interior’s NRDAR practice and to eliminate numerous aspects of the current process that have frustrated many stakeholders. Given the breadth of topics considered and the complexity of the current regulations, commenters face a tight timeline. Nossaman has a strong team of attorneys and public policy advisors in DC and across the nation with experience dealing with NRDAR and other regulatory structures affecting both private and governmental clients. Please contact us if you have any questions about the proposal or how NRDAR reforms might impact your industry.