Industrials Regulatory News and Trends - April 7, 2023

Welcome to Industrials Regulatory News and Trends. In this regular bulletin, DLA Piper lawyers provide concise updates on key developments in the industrials sector to help you navigate the ever-changing business, legal and regulatory landscape.

Grants begin in program to update aging natural gas pipelines. On April 5, the US Transportation Department and its Pipelines and Hazardous Materials Safety Administration announced the first $196 million of grants under the Natural Gas Distribution Infrastructure Safety and Modernization program, created to repair and replace aging natural gas pipelines and reduce methane emissions across the US. Officials estimate that completing these repairs will help reduce methane emissions by 212 metric tons a year. Grants in this initial round, said Transportation Secretary Pete Buttigieg, will go to 37 projects across 19 states. The program ultimately will provide $1 billion in grants over five years as well as hundreds of jobs as municipally and community-owned natural gas distribution pipes are modernized.

Top federal official says aviation industry needs to eliminate “near misses.” On March 28, the acting head of the Federal Aviation Administration said that the aviation industry needs to work urgently to eliminate near-miss incidents in the air. “Going forward, zero has to be the only acceptable number for serious incidents and close calls,” said Billy Nolen, the FAA's acting administrator at a conference. Since the start of this year, there have been six serious incursions, prompting the agency to convene a safety summit, InfoShare, which took place in Baltimore on March 28. During that meeting, Nolen said that the industry has reduced the risk of fatalities in commercial aviation by 95 percent over the past 25 years and, going forward, “zero has to be the only acceptable number for serious incidents and close calls.”

Biden’s nominee for FAA chief withdrawn from consideration. On March 26, it was announced that the nomination of Phil Washington, the Biden Administration’s choice to head the Federal Aviation Administration, had been withdrawn. Washington, the CEO of Denver International Airport – the world’s third-busiest airport – had faced significant criticism from Republican senators, who have asserted that he is not qualified to serve as the nation’s top aviation regulator. The agency has faced numerous questions in recent months after a series of close-call safety incidents, and the Senate Commerce Committee had previously delayed a vote on Washington’s nomination. “It’s hard not to take it personally when people are making false accusations and taking cheap shots,” Washington said March 27 after his withdrawal. “However, I am a professional. None of this really surprised me.” The White House is now considering its next nomination for the FAA post.

Treasury issues guidance on Clean Vehicle tax credits eligibility. The US Department of the Treasury has issued anxiously awaited guidance clarifying the meaning and application of a number of eligibility requirements for the federal “Clean Vehicle” tax credit established by last year’s Inflation Reduction Act. The proposed new regulations, if adopted, will substantially affect international supply chains for high-voltage batteries used to power electric vehicles sold in the US, including the sourcing of battery minerals and materials, and electric vehicle and battery manufacturing activity conducted in the United States. Our alert explains.

Illinois House approves legislation against single-use plastic polystyrene foam. A law that would phase out single-use plastic polystyrene foam food containers in Illinois starting in 2024 was approved by the state’s House on March 28 on a 67-43 vote. The bill now advances to the state Senate. Under the legislation, beginning in 2024 a retail establishment could not sell or distribute disposable food service containers composed wholly or partly of polystyrene foam. Entities like food pantries, soup kitchens, nonprofit corporations that provide food to those in need, and restaurants with a gross annual income under $500,000 per location and federal, state or local agencies that provide food to those in need would be exempt. Several environmental organizations praised the bill’s approval by the state House.

Biden Administration plan focuses on bioplastics and recycling to solve plastic issues. On March 23, the Biden Administration announced its broad new goals for utilizing and advancing biotechnology and biomanufacturing. The Plastics Industry Association responded, “We are pleased with the Biden Administration’s recognition of the critical need for plastics and prioritizing research to make them even better. Our industry has always been committed to taking sustainable materials and making them better and we look forward to working with the administration to develop innovative plastics whether by developing new biobased feedstocks or improvements in more recyclable plastics.” Greenpeace USA, however, said, “While it is encouraging to see the Biden administration take initial steps to tackle the plastic pollution crisis, they missed the mark. This plan does not begin to match the scale of the problem. By focusing on bioplastics and recycling, the administration is not addressing the root cause of the plastic pollution problem.”

DOJ enhances corporate voluntary self-disclosure policy for environmental violations. Companies that make voluntary disclosures upon learning of criminal violations of environmental statutes may be protected from serious criminal penalties. The Environmental Crimes Section of the Environment and Natural Resources Division is the latest US Department of Justice division to update its policy on corporate self-disclosure. Find out more in our alert.

Chemistry group supports new laws on rail safety. On March 22, the American Chemistry Council issued a response to a hearing that day of the US Senate Committee on Commerce, Science and Transportation on improving rail safety following the recent train derailment in East Palestine. Chris Jahn, the group’s president and CEO, wrote to committee leaders outlining the chemical manufacturing industry’s commitment to rail safety and expressing support for several policy initiatives. Jahn noted the ACC’s support for the intent of the Railway Safety Act of 2023 and for other proposals to further improve the safety of the nation’s rail network. “ACC supports a multi-layered approach to transporting hazardous materials by rail. This includes a range of measures: first, to further reduce derailments and other accidents; second, to minimize the risk a rail accident will result in the release of hazardous material; and third, to strengthen emergency response and mitigate the impacts of any hazmat incident that does occur.”

Toward an emergency-only public-private space alliance. The US Space Force may soon be “drafting” some segments of private industry into a new emergency-only public-private space alliance that would create a new level of collaboration between the military and the commercial space sector. The force is exploring the possible development of a space equivalent of the civil reserve air fleet, a program the Pentagon conceived 70 years ago to gain access to commercial airlift capacity in a national emergency. On March 21, Space News reported that the Space Systems Command has been engaged in talks with private companies about an initiative known as Commercial Augmentation Space Reserves, or CASR. The program would include satellite manufacturers, launch vehicle operators, remote sensing companies, and other sectors of the industry that the government would need to mobilize during a crisis.