August 27, 2018

NRD Regulatory Reform — The Time is Now


Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Oil Pollution Act (OPA), the process for assessing and restoring natural resource damages (NRD) has become highly protracted and inefficient, resulting in extensive, unnecessary delays in the implementation of restoration projects. Many practitioners (for both industry and the government) have noted that the NRD assessment process often costs millions of dollars needlessly and delays actual restoration of injured resources by years, if not decades. Moreover, for many years, practitioners have put forward constructive proposals that could help the NRD process become efficient, transparent and effective, allowing the government to achieve restoration faster for the benefit of all.

In an apparent acknowledgement of these facts, the Department of Interior (DOI) on August 27, 2018 requested comments related to possible revisions of its regulations governing Natural Resource Damage Assessments (NRDA). In the Advanced Notice of Proposed Rulemaking, DOI specifically requested comments on several items as set forth below:

  • Simplification and "Plain Language" – According to DOI, the CERCLA NRD regulations, "are arguably complicated, overly prescriptive, repetitive, and dense…A number of stakeholders have suggested that DOI should consider a comprehensive "plain English" revision to the CERCLA…Regulations that closely aligns with the structure of the existing OPA…Regulations."
  • Type A Regulations – As the DOI noted, one category of NRD regulations—called "Type A"—were designed "to result in efficient, cost effective, standardized assessments." However, "it has been challenging….to develop workable Type A Regulations that are streamlined and utilize minimal actual field observations but are still relevant and reliable enough to be entitled to a rebuttable presumption of correctness. Accordingly, DOI is seeking comments or suggestions regarding revision to and utilization of the ….Type A Regulations."
  • Early Emphasis on Restoration Over Damages – Prior reports have "recommended that DOI could encourage a restoration focus and negotiated agreements by revising the regulations to encourage early scoping of restoration opportunities at [NRD] sites." Accordingly, DOI is requesting "comments or suggestions on where specifically in the assessment process restoration scoping may be cost effective and appropriate and how that could best be addressed in the regulations."
  • Procedures to Further Encourage Negotiated Settlements and Early Restoration – DOI noted that "a number of [NRD] matters have utilized partial negotiated settlements early in the assessment process to cost effectively resolve discrete [NRD] claims and re-inforce an overall restoration focus for ultimate comprehensive resolution. However, the current regulations offer little guidance on how to align early restoration settlements with existing statutory and regulatory requirements for assessment and restoration planning."
  • Advance Restoration and Restoration Banking – DOI noted that "[r]estoration 'banking' and advance restoration—where restoration is undertaken in anticipation of marketing portions of such restoration to responsible parties to address natural resource injury caused by releases of hazardous substances—has been considered at a number of sites since the last revision of the CERCLA [NRD] regulations. Some States (such as Louisiana) have enacted specific statutory provisions and promulgated regulations on [NRD] banking. The existing CERCLA … regulations do not provide any guidance on the use of advance restoration and restoration banking techniques."
  • National Environmental Policy Act (NEPA) Compliance – The DOI has been encouraged "to adopt Department wide categorical exclusions from NEPA as appropriate and to ensure that compliance with NEPA requirements occurs concurrently with…restoration planning." DOI is interested in comments or suggestions on this topic.

The DOI's request for comments will be of great interest to stakeholders, including potentially responsible parties, across the country. Ultimately, the goal of the NRD assessment process should be to achieve cost-effective restoration, based upon sound science, while minimizing transaction costs. To achieve this goal, regulators will need to institute sensible reforms that could profoundly streamline the injury assessment process; reduce interim losses resulting from delays in restoration; eliminate impractical and arcane procedures; and provide communities with faster restoration of natural resources.

Here is a link to the DOI's Advanced Notice of Proposed Rulemaking.

Here is a link to a recent article by Brian Israel and Lauren Daniel addressing just one potential improvement for the NRD process, namely expanding the use of streamlined NRD assessments.

The DOI will be accepting comments until October 26, 2018.

© Arnold & Porter Kaye Scholer LLP 2018 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.


Lauren Daniel
Lauren Daniel
Senior Associate
Washington, DC
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