To some critics, the Obama Administration’s announcement Thursday about deregulating milk storage on dairy farms was “udderly” ridiculous.The change involved the Environmental Protection Agency’s regulations to protect waterways and shorelines from oil spills and the EPA’s definition of “nonpetroleum” oil. The definition includes milk because of small amounts of butterfat in milk, and animal as well as vegetable fats are subject to the agency’s spill rules.In April, the dairy industry won an exemption from the rules from the EPA. The Administration included the exemption in a list of plans by 30 government departments and agencies to cut outdated and unnecessary regulation under an executive order signed by President Obama in January.“There was an EPA regulation that treated milk as if it were a toxic oil. So if milk spilled from a truck, it was subject to the same regulatory treatment as toxic oil,” Jacob Lew, the director of the Office of Management and Budget, told FOX Business in an interview. "That rule's being changed. That rule will not treat milk in a way that nobody would with common sense."But the EPA did not make the change because it considers milk an edible, digestible and quickly biodegradable product that would do no great harm to the environment if spilled.Indeed, in revising its rules, the EPA reiterated its position, shared by some environmentalists, that milk poses a threat to the environment if discharged in large quantities—in other words, a type of “toxic oil.” Raw milk contains about 4% butterfat.Rather, the agency modified the rules because it found them redundant: milk tanks, containers and pipes on dairy farms are already regulated by the Food and Drug Administration, the Agriculture Department and many states, with permit, inspection and sanitation standards to protect milk from contamination.
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“The Agency believes that…these measures satisfactorily address the prevention of oil discharges in quantities that are harmful,” the EPA said, again likening milk to oil.Nor did the EPA propose the change as part of the president’s executive order in January 2011. The agency first published the proposed exemption in the Federal Register on January 15, 2009, five days before President Obama was sworn into office. It takes effect in June. You can read it here: http://www.gpo.gov/fdsys/pkg/FR-2011-04-18/pdf/2011-9288.pdf.Because of the ongoing controversy, the EPA also apparently never applied the spill rules to milk storage, which calls into question the regulatory savings touted by the administration as a result of the exemption--$1.5 billion over 10 years.“EPA previously delayed the (oil spill) compliance date for milk and milk product containers,” an EPA spokesperson said. She said the approval of the exemption in April “is consistent with President Obama’s executive order on regulatory reform, which requires federal agencies to design cost-effective, evidence-based regulations that are compatible with economic growth, job creation, and competitiveness.”“EPA updated this rule in response to feedback from the agriculture community, determining that the unintended result of the current regulations – which were designed to prevent oil spill damage to inland waters and shorelines – placed unjustifiable burdens on dairy farmers due to coverage already under USDA and FDA standards,” the spokesperson added.OMB and the EPA did not respond to requests for clarification of their comments about the rule change.The spill rules were mandated by the Clean Water Act, approved by Congress in 1972. It required the EPA to define what products constituted “oil” and to generate “spill prevention, control and countermeasure” (SPCC) regulations.A 2010 EPA SPCC brochure says, “Oil of any type and in any form is covered, including, but not limited to: petroleum; fuel oil; sludge; oil refuse; oil mixed with wastes other than dredged spoil; fats, oils or greases of animal, fish, or marine mammal origin; vegetable oils, including oil from seeds, nuts, fruits, or kernels; and other oils and greases, including synthetic oils and mineral oils.”A dairy industry official said that in the last decade, the EPA began to consider expanding application of the spill regulations beyond obvious venues such as petroleum product processing and storage operations near waterways to farms and other enterprises where oil and gasoline are stored in large quantities. The agency indicated to dairy farmers that the rules could apply to milk storage tanks.That triggered a major industry lobbying campaign to exempt 60,000 dairy farms with larger milk tanks from the rules.“Most farming facilities were unaware that the SPCC rule even applied to them,” said a 2006 letter to the EPA signed by more than 100 farming groups and companies, including dairy producers. “For more than 30 years, the EPA has apparently not regarded those facilities as within the enforcement universe.”The dairy official, who asked not to be identified because the official continues to work with the EPA and other agencies on regulations, described the EPA as “very responsive” to the industry’s concerns.“Common sense and good judgment have carried the day with EPA’s announcement that they will no longer treat spilled milk the same as a leaking oil drum,” said another official, Chuck Conner, president and CEO of National Council of Farmer Cooperatives.General regulation critics described the dairy exemption as a positive first step in the Administration’s overall regulation initiative, but called on the White House to be more aggressive.“They're now taking back this one little rule to regulate milk from dairy farmers…that’s good,” said Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute. “But on the other hand, they're going full steam ahead with thousands of other regulations which will have a much bigger impact on the economy, put many more people out of work. So this regulatory effort, this deregulatory effort that they're trumpeting is really just the tip of the iceberg.”According to www.regulations.gov, 300 government departments and agencies are currently working on 13,674 proposed regulations—including for financial services, health care and the environment--that would supplement 48,360 existing ones. The Federal Register is now 81,405 pages long.The administration said its “smarter, cheaper and more effective regulation” review will be ongoing.“We're going to keep at it, we're going to keep doing it, and we're going to do it while we maintain our focus on protecting the public's health and safety,” OMB’s Lew said. “This is not a question of taking away regulations that we need to make sure that people don't get hurt--it's a question of making them make sense.”--FOX Business’s Stephanie Dhue and Cesar Canizales contributed to this article