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The Regulatory Week in Review: October 21, 2016

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  • The Bureau of Land Management (BLM) finalized three rules aimed at ensuring proper measurement, reporting, and recordkeeping “of oil and gas produced from Federal and Indian leases.” BLM stated that the revision was the first “comprehensive update” of the rules in more than 25 years, and is intended to ensure that royalties for production of oil and gas on federal and Indian lands are paid correctly, but the Independent Petroleum Association of America (IPAA) criticized the new rules, stating that their collective costs “on America’s small businesses and job-creators have not accurately been taken into consideration.”
  • Representatives from more than 170 countries meeting in Rwanda reached an agreement that amends the Montreal Protocol—which the U.S. Senate first approved in 1987—to phase down the use of hydrofluorocarbons (HFCs), a potent greenhouse gas used widely in air conditioning, by over 80 percent over the next 30 years. The agreement imposes more stringent standards on developed countries than developing countries, and is reportedly supported by both the chemical industry and the environmental community.
  • The U.S. Environmental Protection Agency (EPA) issued final guidelines for controlling smog-forming volatile organic compound (VOC) emissions from oil and natural gas drilling sites. EPA said the non-binding guidelines “provide recommendations for state and local air agencies to consider as they determine what emissions limits to apply to covered sources in their jurisdictions.” EPA believes VOC emissions could be reduced by 80,000 tons per year if all of the recommendations in the guidelines are followed, but Howard J. Feldman of the American Petroleum Institute reportedly cautioned EPA that “[moving] forward with these guidelines without robust data could impose unachievable emission reduction requirements on the industry.”
  • The Federal Aviation Administration (FAA) issued an order banning passengers from carrying Samsung Galaxy Note7 phones onboard commercial airplanes. Transportation Secretary Anthony Foxx stated that the FAA made its decision “because even one fire incident inflight poses a high risk of severe personal injury and puts many lives at risk.” The move came following expansion of a recall by Samsung and the U.S. Consumer Product Safety Commission (CPSC), over concerns that the phones may overheat. According to the CPSC, Samsung has received at least 96 reports of the phones’ batteries overheating in the U.S. alone.
  • The U.S. Securities and Exchange Commission (SEC) announced that Ernst and Young—the multinational professional services company—will pay more than $11.8 million to settle allegations that the company “repeatedly failed to detect” fraud during an audit of one of its clients, an oil services company.  Andrew Ceresney, Director of the SEC’s Division of Enforcement, stated that “auditors must have the fortitude to refuse to sign off on an audit if important issues remain unresolved.” Ernst and Young consented to the order without admitting any professional misconduct.
  • Omnicare, a provider of pharmacy services for long term care facilities, agreed to pay $28 million to settle allegations from the U.S. Department of Justice (DOJ) that Omnicare solicited and received kickbacks from Abbott Laboratories, a pharmaceutical manufacturer, in exchange for promoting a drug for treating epilepsy that Abbott produces. The DOJ reportedly claimed that Abbott made payments to Omnicare that were labeled as “grants” and “educational funding,” but were actually intended to induce Omnicare to promote the drug.


  • The National Federation of Independent Business (NFIB) recently released the results of its Uncertainty Index, which tracks the level of uncertainty among small business owners —defined by the NFIB as the “inability to anticipate the outcomes of important future events which are critical to planning and forecasting for the firm.” The NFIB found that uncertainty among small business owners is at a 42-year high. Juanita Duggan, the President and CEO of NFIB, attributed that uncertainty largely to what she characterized as over-regulation by the current Administration, which she said “makes business owners reluctant to do much of anything to grow, hire, or even prepare for the worst case scenario.”
  • In a recent policy analysis for the Cato Institute, Robert P. Murphy, Patrick J. Michaels, and Paul C. Knappenberger make their case against the implementation of a carbon tax in the United Stated. The authors argue that the “actual economics of climate change” provide a weaker case for a U.S. carbon tax than advocates of the tax suggest, and point to the short-lived Australian carbon tax, as well as the carbon tax in British Columbia, as examples of carbon taxes that fell short of expectations.
  •  In a new report, Elizabeth Goiten, co-director of the Liberty and National Security Program at the Brennan Center for Justice, discusses what she calls “an unprecedented buildup of secret law” created by the federal government since 9/11, including unpublished agency rules and regulations by intelligence agencies. The report argues that “we pay a high price for this system,” and calls for an “aspirational goal” of the “elimination of secret law.”