Tailoring Rule Gets Further Alteration (or Nip and Tuck EPA Style)

Posted on December 30, 2010 by Karen Aldridge Crawford

On December 30, 2010, just days before the first Greenhouse Gas (GHG) regulations are to become effective, EPA issued another final rule to clarify and narrow the applicability of those regulations. 75 FR 82254 (12/30/10).

 

After reviewing the “60-day letters” received by EPA from most of the states, the agency realized its initial strategy for regulating GHG emissions was flawed in those states that had approved Title V permitting programs Those state programs were based on Clean Air Act and federal regulatory provisions in 40 CFR Parts 52 and/or 70 that established the threshold for major source determinations as 100 tons per year (tpy) for certain air pollutants subject to regulation, rather than the 100,000 tpy threshold on a carbon dioxide equivalent (CO2e) which EPA determined should apply to GHG emissions (the Tailoring Rule).

 

While some state laws and regulations were worded broadly enough to be consistent with the initial Tailoring Rule, many states would be required to modify their program to only regulate GHG emissions at the higher Tailoring Rule threshold upon the January 2. 2011 effective date of the new rule. Otherwise, those states’ programs would require regulation of GHG emissions at the original threshold of 100 tpy, which would inundate the states with many more permit applications than EPA’s regulations actually intended.

 

The provisions in both Part 52 and Part 70 applicable to the affected state programs are revised to read, “… EPA approves such provisions only to the extent they require permits for such sources where the source emits or has the potential to emit at least 100,000 tpy CO2e, as well as 100 tpy on a mass basis, as of July 1, 2011.” EPA has stated this language means that GHGs are regulated at 100,000 tpy and all other pollutants subject to regulation are regulated at the 100 tpy mass-based threshold.

 

It will be interesting to watch whether the courts’ interpret this additional “clarifying” language to be clear and legal.

Changes Coming In The Michigan Environmental Regulatory Authority

Posted on December 30, 2010 by Jack Shumate

Michigan’s Governor–elect Rick Snyder has announced that he intends to split the Michigan Department of Natural Resources (MDNR) into two departments – the MDNR and a Department of Environmental Quality (MDEQ) – after he takes office on January 2, 2011.

This will be the latest change in an oft – reorganized environmental enforcement structure in Michigan. The two functions were originally consolidated in the MDNR, but it was recognized that they were incompatible after the MDNR was forced to fine itself for dumping toxic substances into a river, resulting in a major sport fish kill. The current Governor, Jennifer Granholm, merged the two departments again in an effort to save money.

Details of how regulatory functions will be divided have not been announced but it may be anticipated that Governor-elect Snyder, a former corporate CEO, will favor a regulatory regime that seeks to encourage growth and development of business in the state.

For further information contact Jack D. Shumate at shumate@butzel.com.

Time for Climate Change Change?

Posted on December 29, 2010 by Linda Bullen

The climate change debate soldiers on, despite set-backs at the national level. The California Air Resources Board, for example, has released the first state level cap and trade proposal, which remained open for public comment until December 15, 2010. Despite a handful of such gallant efforts to address global warming through legislative means, few, if any, political attempts to address the issue have succeeded. Perhaps this is a reflection, as recent polls suggest, of a waning public belief, at least in some circles, that global warming is man-made. Equally likely, however, is wide spread economic distress, which takes immediate precedence in the lives of many.

 

Since pervasive legislative solutions to global climate change do not seem to be in the offing, perhaps the time is upon us to examine and adopt an approach to carbon emissions concerns which is scientifically effective and cost-effective alike. Rather than implementing grand political initiatives such as cap and trade, perhaps we should think about implementing measures which can be implemented by individuals and communities at the local level. Measures such as painting the roofs of buildings in hot climates white, implementation of passive solar heat collection in homes and businesses, lowering thermostats in the winter and carpooling can all be implemented inexpensively or can actually save money, while at the same time having the direct effect of reducing carbon emissions. Personally, I have always been a big proponent of the use of public transportation. It makes both economic and environmental sense and certainly reduces an individual's carbon footprint.

 

In short, there are measures which we, as individuals, and more collectively, as communities, can do which address climate change that can be effective yet would not have negative economic consequences. While such measures will never replace legislative solutions, they are a step in the right direction while we await the enactment of more comprehensive legislative responses.

Happy New Year? With the Advent of Greenhouse Gas Regulation Only Days Away, Many in Industry Might Prefer, Instead, to Turn Back the Clock

Posted on December 28, 2010 by John Crawford

By James R. Farrell

Butler, Snow, O’Mara, Stevens & Cannada, PLLC (www.butlersnow.com)

 

 

Regulation of greenhouse gas (GHG) emissions has become a reality. Although the Supreme Court’s 2007 ruling in Massachusetts v. EPA deserves much of the credit for EPA’s aggressive response to global warming, congressional inaction on comprehensive climate change legislation ultimately set in motion the agency-driven agenda that has led our country to an historic yet extremely controversial crossroads in environmental regulation. The Supreme Court’s conclusion that GHGs constitute air pollutants as defined by the Clean Air Act required EPA to determine whether GHG emissions from motor vehicles cause or contribute to climate change that is reasonably anticipated to endanger the public health or welfare; however, the Court’s requirement for regulatory action did not preclude the possibility of a legislative response.

 

 

Despite the dim prospects for comprehensive climate change legislation today in the wake of the turbulent 2010 mid-year elections, the political landscape appeared far more favorable little more than eighteen months ago. On June 26, 2009, the House had narrowly passed the American Clean Energy and Security Act of 2009 (the “Waxman-Markey Bill”) by a vote of 219-212. The Waxman-Markey Bill featured a cap and trade component to regulate GHG emissions, and the bill would have required a seventeen percent reduction in GHG emissions from 2005 levels by 2020 and an eighty percent reduction by 2050. 

 

 

In the Senate, Senators John Kerry (D-MA), Joseph Lieberman (I-CT), and Lindsay Graham (R-SC) had been hard at work on a comparable climate change bill dubbed the American Power Act. In early 2010, the bill appeared to have bipartisan support due in large part to its provision for expanded offshore drilling, an early and significant concession by the bill’s sponsors. But when the Deepwater Horizon exploded on April 20th, everything changed. As public outrage at the offshore drilling industry grew daily in response to the unprecedented magnitude of the oil spill, it triggered a proportional decrease in political will for comprehensive climate change legislation. By the time the American Power Act was introduced on May 12th, Senator Graham had already withdrawn his support insisting that the ongoing and more immediate threat posed by the Gulf oil spill had “made it extremely difficult for transformational legislation in the area of energy and climate to garner bipartisan support . . . .”

 

 

In the end, the legislative response to climate change that had once appeared likely – if not imminent – never materialized. In contrast, EPA has wasted no time since Massachusetts v. EPA engaging in regulation-making intended to address climate change. The culmination and cornerstone of this fervent EPA activity is EPA’s Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule (the “Tailoring Rule”), which will usher in a new and hotly contested era of GHG regulation on January 2, 2011. The Tailoring Rule’s phased-in approach to regulation means that the regulatory net it casts will gradually widen with time, initially targeting those stationary sources known to be the largest emitters of GHG emissions but eventually encompassing some smaller sources as well. 

 

 

Whether or not you’ll be ringing in the new year this year likely depends on your political persuasion. For many environmental groups who have lobbied tirelessly for greenhouse gas regulation, 2011 is a long-awaited (and soon to be much-celebrated) new year. For many in industry, however, 2011 is likely to be a year of nostalgia filled with no less than 365 opportunities to remember fondly the less regulated days of yesteryear. Happy New Year!

 

 

Butler, Snow, O’Mara, Stevens & Cannada, PLLC (www.butlersnow.com)

·        John A. Crawford

·        Michael D. Caples

·        James I. Palmer, Jr.

Chemical Disclosure - or my secret name's no secret any more

Posted on December 28, 2010 by Susan Cooke

Since passage of the Federal Insecticide, Fungicide, and Rodenticide Act in 1972, environmental statutes and regulations have sought to balance legislative mandates seeking disclosure of chemical identities and properties against trade secret protection concerns. This tension can be seen in the labeling of cosmetics, the submittal of test data under the Toxic Substances Control Act (“TSCA”), and the disclosure of chemical additives to fluids used for hydraulic fracturing. In all three situations, efforts to increase access to chemical identity information are likely to create further challenges to trade secret protection.

 

 

            On the cosmetics labeling and TSCA front, a bill introduced in the House of Representatives this past July, entitled the Safe Cosmetics Act of 2010, would have required cosmetics labels to identify the name of each ingredient in descending order of its “predominance”, with the same information provided for internet sales. Regardless of the type of sale, the ingredients would not be afforded trade secret protection. While the bill was not enacted, the concerns that kept it alive even in the waning days of the Congressional session may be a harbinger of a new version in the upcoming session.

 

 

            A bill to amend TSCA also filed in the House last July would have required a manufacturer to provide an upfront justification for any trade secret claim made in an information submittal under TSCA, with EPA required to evaluate the submittal within 60 days thereafter. While this bill did not pass either, EPA had previously announced its intention toreview chemical identity CBI claims in health and safety studies submitted under TSCA, and it subsequently proposed amendments to its TSCA regulations that would require upfront justification of a chemical identity claim. In addition, EPA has substantially increased the chemical information available on its Envirofacts database, and is now providing free access to its TSCA inventory of chemicals.

 

 

            Additives to hydraulic fracturing fluids have likewise been the subject of much attention, and have sparked initiatives in a number of states to require their disclosure. Beginning next year, Arkansas will require disclosure hydraulic fracturing fluids on a well by well basis, although allowing more generic disclosure of proprietary chemicals. The information will be publicly available for review on the website of the Arkansas Oil and Gas Commission. In Wyoming, the additives are reported to the staff of the state’s Oil and Gas Conservation Commission, rather than to the public, and the Commission has granted a number of requests for trade secret protection, although the requests themselves are matters of public record. 

 

 

            Colorado requires oil and gas drillers to keep an inventory of the chemical additives at the site of each well, with state regulators getting a copy of the inventory upon request. Pennsylvania requires material safety data sheets covering the fracing fluid materials to be included with each drilling plan submitted for approval, with the MSDS sheets made available to the landowner and to local government and emergency responders. Both Colorado and Pennsylvania are considering expansion of those requirements.

 

 

            In September EPA issued letters to nine companies engaged in hydraulic fracturing related activities seeking the identity of the fracing fluid additives and copies of studies about their health and environmental effects. All of the companies have now responded to the EPA request, with Halliburton establishing a public website to disclose information about those additives. In addition, a number of trade associations, including the American Petroleum Institute, have lent their support to a voluntary disclosure registry under development by the Groundwater Protection Council, which includes a number of state officials responsible for groundwater protection, and the Interstate Oil and Gas Compact Commission, with data to be disclosed on a well-by-well basis. 

 

 

            How efforts such as those just described will address trade secret issues remains to be seen, particularly given the concerns raised about potential contamination of drinking water supplies by fracing fluids. However, it appears that the day has passed when one could claim trade secret protection and provide support for that claim only when the information was actually requested. And the new riff on that old refrain sung by Johnny Mathis and Doris Day appears more likely to be that “my secret name’s no secret any more”.

IDAHO ADOPTS ANTI-DEGRADATION IMPLEMENTATION RULE

Posted on December 23, 2010 by Kevin Beaton

Last  month, the Idaho Department of Environmental Quality (IDEQ) adopted an anti-degradation implementation rule. The rule was adopted in response to a Clean Water Act citizen suit brought by an Idaho environmental group against EPA to force the agency to adopt such a rule for Idaho. Anti-degradation policies and an implementation plan are required as part of a state’s water quality standards under EPA’s Clean Water Act rules at 40 CFRR Part 131. Although Idaho had long ago adopted the required anti-degradation policy, the state had never formally adopted an implementation plan.

Anti-degradation policies are designed to protect existing uses in all waters known as “Tier I” waters, protection of certain “high quality” waters or “Tier II” waters from any lowering of water quality unless a proponent can demonstrate after full review by the state that such a lowering of water quality is economically justified and that all reasonable available pollution controls have been implemented. Putting together the information required for a full Tier II review can be costly, controversial and substantially delay or preclude the issuance of permits. For certain waters known as “Outstanding Resource Waters” or “Tier III” waters, no lowering of water quality is allowed.

Anti-degradation implementation procedures typically address such issues as what type of activities require anti-degradation reviews, which waters are subject to Tier I, Tier II and Tier III protections, whether anti-degradation applies to new or existing activities, how anti-degradation implementation addresses federal general permits such as storm water permits, whether certain activities are exempt from anti-degradation review because they are “insignificant” and the type of information that is required to be submitted as part of a Tier II review.

Idaho’s rule, which was subject to lengthy negotiations with stakeholders, generally followed the flexibility previously allowed by EPA Guidance and prior judicial decisions concerning anti-degradation implementation procedures. In identifying Tier II waters, Idaho adopted the “water body by water body” approach as opposed to the “parameter by parameter” approach and excluded most waters listed as impaired under Section 303(d) as candidates for Tier II waters. Idaho’s rule also confined anti-degradation reviews to new or increased discharges subject to NPDES Permits, Section 404 permits and hydroelectric facilities subject to certification under Section 401 of the Clean Water Act. Nonpoint sources were not required to undergo anti-degradation review. Also Idaho exempted certain new and increased discharges from anti-degradation review if they were deemed “insignificant.” For those interested in the Rule, it can be reviewed at IDEQ’s Web site. Also for those interested in the topic, EPA’s most definitive Guidance on what is required in a State’s anti-degradation implementation procedure can be found at EPA’s Advanced Notice of Proposed Rulemaking (ANPRM) at 63 Fed. Reg. 36741 (July 7, 1998).

Also some recent judicial decisions on the legality of States’ anti-degradation implementations procedures include Kentucky Waterways Alliance v. Johnson, 540 F.3d 466 (6th Cir. 2008); Ohio Valley Environmental Coalition, et al., v. USEPA, Memorandum Opinion and Order, August 29, 2003; Defenders of Wildlife v. U.S. Environ. Protec., 415 F.3d 1121 (10th Cir. 2005); and American Wildlands v. Browner, 260 F.3d 1192 (10th Cir. 2001).

Assuming that the Idaho Legislature approves the IDEQ rule (a requirement for all rules in Idaho), the rule will be submitted to EPA for approval early next year. Assuming EPA approves the rule, whether the environmental groups will challenge that approval remains to be seen. In the meantime, EPA has again taken a national interest in anti-degradation similar to its 1998 ANPRM, and took comment earlier this year on whether EPA rules on state anti-degradation implementation procedures need to be strengthened. At this time it is not known whether EPA will indeed make further efforts to change its anti-degradation rules. It would seem likely that the controversy and litigation associated with anti-degradation implementation procedures will continue.

Beware of "Impaired" Surface Water Designations

Posted on December 10, 2010 by Chester Babst

Is the act of adding a stream segment to the Clean Water Act section 303(d) list of impaired waters appealable? At least one Pennsylvania administrative law judge thinks not, as the mere publishing of the list creates no new duties on anyone. But the list is a discrete, final agency action that is predicate to direct administrative action. The science supporting the listing should be subject to challenge, just as are the specific load and waste allocations following the list.

Section 303(d) requires states to complete and submit a biennial Integrated Water Quality Monitoring and Assessment Report to the United States Environmental Protection Agency (“USEPA”) that lists all impaired surface waters in the state not able to support the specific uses of that water body (e.g., potable water supply uses), even after implementation of pollution control technologies and practices. Impairment status can have a significant impact on regulated entities that discharge into a designated water body.
 

As impaired, these state surface waters will require the development of a Total Maximum Daily Load (“TMDL”) to attain applicable water quality standards. A TMDL accounts for all point and non-point sources of the specified pollutant and it sets a cumulative pollutant load limit that applies to all dischargers, so as to prevent a violation of water quality standards. The USEPA and state agencies use TMDLs to compel best management practices and set discharge limits in National Pollutant Discharge Elimination System (“NPDES”) permits.

On April 3, 2010, the Pennsylvania Department of Environmental Protection (“Department”) published its draft 2010 Integrated Water Quality Monitoring and Assessment Report (“Draft Integrated Report”) for public comment. The Draft Integrated Report does not reveal how the Department reached the decision to designate a water body as being impaired, nor does the Department provide any supporting data for its designations. It is also unclear how pollutant loading allocations will be handled with respect to water bodies that extend into contiguous states.

Should a party wish to challenge an impairment designation, it is unclear when this agency action would be ripe for appeal. In a recent Pennsylvania Environmental Hearing Board case, an Administrative Law Judge offered his view of the process in dicta.

[A] state’s Section 303(d) list submitted to the EPA would not appear to be a final disposition of even what is on the list since, once submitted, it is for the EPA to pass upon the propriety of the list…. Even if the state’s listing as such of a waterway on the state’s Section 303(d) list were construed as a purely state action we still do not see that the state’s mere listing or de-listing of a waterway on the Section 303(d) list creates any immediate duties or liabilities which would be the key to appealability to the Board.

Telford Borough Authority, et al. v. DEP, EHB Docket No. 2010-111-K, slip op. at 7 (Opinion and Order issued September 7, 2010). Although providing insight into one judge’s view, whether a designation is ripe for appeal at the time a state submits a Section 303(d) list to EPA and/or at the time EPA approves or disapproves the list is still an open issue in Pennsylvania. It is also unclear whether a failure to perfect an appeal at either of these points in the process would affect appeal rights of individual sources at the time limitations are set in permits based upon the impairment designation. Given this uncertainty, an appeal of the designation is a prudent step for a source or group of sources that could ultimately be impacted by state actions designed to address the impaired status of a water body.

Because of the significant economic impacts associated with an impairment designation and the potential that such impacts could extend beyond state borders, it is important to monitor state and federal activities for designated water bodies and to consider the potential impact on your client and whether an appeal of the designation is necessary to protect your client’s rights and defenses.

Supreme Court grants cert in Connecticut v. AEP

Posted on December 7, 2010 by Michael Gerrard

The U.S. Supreme Court announced yesterday morning that it has granted certiorari in Connecticut v. American Electric Power, the case seeking an order compelling several electric utility companies to reduce their greenhouse gas emissions, based on common law nuisance theories. Justice Sotomayor recused herself; she had been on the Second Circuit panel that heard the argument below, though she had been promoted to the Supreme Court before the Second Circuit issued its ruling allowing the case to proceed.

Wisconsin DNR Seeks Additional Authority to Protect Against Adverse Impacts of Wind Projects

Posted on December 7, 2010 by Linda Bochert

 

WDNR has issued “Siting Guidelines” available here to help wind project developers site projects in ways that minimize impacts and will be revising its current “Bird and Bat Study Guidelines” to provide more comprehensive information.

 

The WDNR report was submitted in response to 2009 Wisconsin Act 40, which required the agency to determine if its “statutory authority is sufficient to adequately protect wildlife and the environment from any adverse effect from the siting, construction, or operation of wind energy systems.”

WDNR’s legislative agenda is in development. Whether the legislature will take up these recommendations is currently unknown. While WDNR's interest in more comprehensive authority is consistent with its view of its responsibilities, the risk for project proponents and developers is that it will create new grounds for project opponents to rely on to challenge siting decisions. For many the goal of alternative energy sources -- solar, wind, biomass -- is still only desirable when it isn't in their backyard.

 

 

In response to a legislative directive, the Wisconsin Department of Natural Resources (WDNR) in November submitted a report to the Wisconsin Legislature making four recommendations to enhance its authority to protect wildlife and natural resources from wind project impacts:

 

  1. require WDNR to prepare a formal “biological opinion” and require the Public Service Commission of Wisconsin (PSCW) to consider that opinion before PSCW approves a wind project; this opinion would 1) describe the potential impacts of the project to wildlife and natural resources; 2) identify potential conflicts with wildlife protection laws; 3) reach a conclusion as to whether the project has the potential to cause a significant adverse impact to habitat and fish and wildlife resources; and 4) reach a conclusion as to whether mitigation measures can be implemented to substantially reduce those impacts below the level of significance;
  2. require a wind project developer to obtain Incidental Take Permits or Authorizations under the Wisconsin Endangered Species Law (Wis. Stat. s. 29.604) before constructing a wind project; currently, developers are encouraged but not required to obtain such authorizations;
  3. expand the Wisconsin Endangered Species Law to protect endangered and threatened species habitat, to mirror the federal Endangered Species Act; currently, Wisconsin law only protects habitat if a direct take of a species will occur and an Incidental Take Permit or Authorization is required; and
  4. require easements for wind facilities to authorize access to those properties for the conduct of biological studies by developers, WDNR personnel and/or authorized agents.

 

These recommendations reflect WDNR’s view that its standard regulatory authorities over wetland and waterway impacts don’t reach the agency’s growing concerns about protecting wildlife and habitat from turbine siting and operation. Current WDNR authority addresses impacts to waterways and wetlands from project construction, and obligates developers to implement construction site erosion control. Threatened and endangered species are protected from intentional and incidental “takes”. WDNR has implemented this authority through consultation and use of general Incidental Take Permits and Authorizations. Violations of general wildlife protection laws (Wis. Stat. ss. 23.095(1g), 29.011(1) and 29.039) are subject to enforcement, but are limited to intentional taking by unlawful activities, and WDNR does not consider them generally applicable to construction or operation of state or locally approved wind projects.