Posted on March 30, 2011
On April 1, 2011, the American Bar Association Section of Environment, Energy and Resources will hold a national symposium on environmental justice and the law at the University of Mississippi School of Law in Oxford, MS. The Symposium will bring together representatives of academia, government, the private bar, nongovernmental organizations, and the corporate sector to discuss the evolution of efforts to more effectively address the conflicts that can arise around industrial facility operations and siting and community needs.
Conflicts regarding facility operations and environmental justice were recently highlighted at the Mississippi Legislature. On January 24, 2011, Rep. Gregory Holloway, Chair of the House Forestry Committee, chaired a hearing at the Mississippi Legislature on environmental justice for affected communities in Mississippi. Holloway called the hearing at the request of Sherri Jones, Coalition of Communities for Environmental Justice.
Jones said she believes Mississippi Department of Environmental Quality (MDEQ) failed in its prior assessment of a proposed site because pollutants are still present on the “old” agriculture site. After researching the work of MDEQ across the state, Jones claims that many sites are cleared by MDEQ when, in fact, the sites are still full of harmful pollutants. Tracy McGaugh, Professor of Touro Law Center in New York, explained that she came to Jackson, Mississippi at her own expense in order to help the people in contaminated communities receive the environmental justice they deserve.
Aware of the growing need for transparency and community input, MDEQ has created a new office at the agency, the Office of Community Engagement. The goal of the Office of Community Engagement is to build effective relationships and partnerships with internal and external stakeholders. For example, in 2010, the Office of Community Engagement hosted over 70 face-to-face meetings representing environmental justice communities. The Office of Community Engagement has implemented the “Gulf Coast Environmental Initiative” to ensure environmental justice is considered throughout the natural resource damage assessment process in the state following the Deepwater Horizon oil spill.
Posted on March 30, 2011
Pace Law School in White Plains, NY is seeking an Assistant Dean of Environmental Programs and Professor of Law for Designated Project or Service (Assistant Dean) for its Center for Environmental Legal Studies (CELS). Please see the job listing.
Posted on March 29, 2011
On August 24, 2010, the Connecticut Department of Environmental Protection (DEP) proposed new regulations on the reporting of releases. The intent of the proposed regulations is to clarify when and how certain types of releases (spills) must be reported to the DEP.
Connecticut General Statutes Section 22a-450 requires that any spill or discharge of "oil or petroleum or chemical liquids or solid, liquid or gaseous products, or hazardous wastes which poses a potential threat to human health or the environment, shall immediately [be] report[ed]." However, the very broad language of, and the absence of specificity in, section 22a-450 has left some struggling to determine what events should not be reported. While there have been previous attempts to promulgate regulations on spill reporting, none have been adopted.
The draft regulations provide release reporting criteria, including a list of the threshold quantities and types of releases that should be reported. First, the draft regulations define "reportable materials" to mean "any chemical liquid, solid, liquid or gaseous products, including but not limited to hazardous substances, hazardous waste, waste oil, used oil, petroleum constituents, asbestos, radioactive material, pesticide, prohibited pesticide, restricted use pesticide, or polychlorinated biphenyls." Further, under the draft regulations, reporting obligations are triggered (1) when the amount of reportable material released is equal to or greater than ten pounds; (2) when the quantity of reportable material is unknown, but is likely to be equal to or greater than 10 pounds; (3) for any release of certain specified materials (including friable asbestos, certain pesticides, PCBs, chlorinated solvents, or certain radioactive materials), regardless of the amount of the reported material; and (4) for reportable materials released in certain locations (including releases in public water supply watershed land, aquifer protection areas, watercourses or wetlands, or storm, sanitary, or combined sewers and releases from underground storage tanks), regardless of the amount of the reported material. Imminent hazards, imminent threats of a release, observable releases from abandoned containers, and surface soil stains also trigger reporting obligations. Finally, the proposed regulations list the information that must be included in a report and the deadlines for reporting (within one hour of a spill).
The draft regulations contain exceptions for certain releases of known reportable materials contained and removed within two hours (it is unclear, however, how this two hour exception comports with the requirement to report a spill within one hour) and for certain releases of food products and untreated domestic sewage. The draft regulations also contain exemptions for certain air emissions, water discharges, restricted use pesticide applications subject to other regulations, and various incidental releases.
Posted on March 28, 2011
Despite a House Republican agenda to eviscerate EPA’s GHG authority, EPA is pushing forward with workable greenhouse gas reduction solutions. EPA’s gradual phasing in of GHG permitting requirements for new facilities has provoked a vicious response from both heavy industry and political partisans, despite the requirements’ limited scope on only the largest pollution sources in the country – those that emit the equivalent of a burning railroad car of coal a day – and the common-sense requirements that these new facilities install the most efficient cost-effective technology available.
EPA has moved cautiously in deployingpotentially more important regulatory tool: New Source Performance Standards (NSPS). Starting with the two largest sectors of emitters in the U.S., electricity generators and refineries, NSPS can create a “floor” of minimum standards for new and modified facilities, as well as create a flexible, state-based system to drive steady reductions from existing sources. Importantly, reinvented NSPSstandards can capture the benefits of and build upon existing state GHG reduction programs, encourage other states to pursue or join in broader clean energy solutions, and produce greater environmental benefits (GHG reductions) than traditional NSPS.
In part to exploreand flesh out its new approach to NSPS, EPA held several “listening sessions” to hear from industry, air pollution control agencies, NGOs, and others in February and March of this year. A recurring theme throughout these sessions was flexibility. The most common stakeholder response has been thatEPA should set reasonably stringent 111(b) standards for new and modified sources. At the same time, EPA should build upon its experience in allowing state emissions averaging and trading to propose guidelines for states to regulate existing sources. These guidelines should include astraightforward method for states to show that alternative existing or proposed programs – whether or not they include individual numeric standards for individual NSPS sources– would achieve equivalent or greater emission reductions to traditional NSPS, individually applied.
Several states, including California, were quite vocal in these listening sessions, and for good reason. As Seth Jaffe pointed out in his blog, emissions trading programs such as California’s cap-and-trade program under Assembly Bill 32 clearly provide the most cost-effective emission reductions. Other states could propose clean energy programs, that achieve local economic development and energy security objectives, as well as emissions reductions, or they could be attracted to join existing regional initiatives. Rather than adopt a one-size fits all NSPS, EPA can establish a stringent NSPS that allows states, their industries, and other stakeholders to work together to innovate and create unique solutions that serve multiple goals.
Posted on March 25, 2011
Perhaps the most interesting recent injection of constitutional law into environmental policy involves the use of the political question doctrine regarding common law claims. For a half decade, states and individuals have turned to common law causes of action for redress in climate litigation. See James R. May, Climate Change, Constitutional Consignment, and the Political Question Doctrine, 85 Denv. U. L. Rev. 919 (2008). Federal common-law causes of action, including those for public nuisance, provide potential—although imperfect and problematic—means for judicial cognizance of and redress for these effects. See id. Nonetheless, some federal courts have determined the seldom used “political question doctrine” bars them from “entering the climate change thicket,” reasoning the matter is consigned to the coordinate branches of government. Id. at 957-59.
This legal development is astonishing, because until recently the political question doctrine had touched only about a half dozen matters—including matters which are demonstrably committed to a coordinate branch of government, require an initial policy determination, lack ascertainable standards, or could otherwise result in judicial embarrassment—that are nonjusticiable. Baker v. Carr, 369 U.S. 186, 217 (1962). For example, the Court has recognized executive power over foreign affairs, impeachment, and treaty abrogation as political questions into which courts ought to decline jurisdiction, finding them to be consigned to the elected federal branches of government under the “political question doctrine.” James R. May, Constitutional Law and the Future of Natural Resource Protection, in The Evolution of Natural Resources Law and Policy 124, 146 (Lawrence J. MacDonnell & Sarah F. Bates eds., 2009). Climate change litigation has now entered this mix, most recently in Connecticut v. American Electric Power Co., Civ. Action No. 10-174.
In the case below, American Electric Power Co., 582 F.3d 309 (2d Cir. 2009), the Second Circuit held no aspect of the political question doctrine applied to enjoin judicial review. In particular, the circuit court found climate change is neither constitutionally consigned to the elected branches, nor prudentially left to them. The utility defendants filed a petition for certiorari to reverse the Second Circuit’s ruling, arguing (1) states and other plaintiffs lack standing, (2) federal law preempts plaintiffs’ claims, and (3) the case raises nonjusticiable political questions. Connecticut v. American Electric Power Co., Petition for Certiorari, Civ. Action No. 10-174; AEP Cert. Petition at i, 13, 20, and 26. In late August 2010, the Obama Administration filed a brief in support of the utility defendants’ petition, arguing plaintiffs lack prudential standing, and federal law displaces the need for common law causes of action for climate change. Brief for Tenn. Valley Auth. in Supp. of Pet’rs , Connecticut v. American Electric Power Co., No. 10-174. In its brief, the U.S. Solicitor General’s Office argues (i) first plaintiffs lack prudential standing under the standard articulated in the First Amendment Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1 (2004) decision—and largely for the same non-justiciability reasons defendants argue in favor of applying the political question doctrine; and (ii) second, EPA activities during the last 12 months, including the final reporting rule, the proposed tailoring, cement kiln, and light duty truck emission rules, and other activities displace the need for common law causes of action under the standards set in the Court’s Middlesex County Sewerage Auth. v. Nat'l Sea Clammers Ass'n, 453 U.S. 1 (1981) and Milwaukee v. Ill., 451 U.S. 304 (1981) decisions.
The U.S. Supreme Court has agreed to hear the case, with Justice Sotomayor recusing herself, which seems to increase the prospects of a 4-4 split. Oral argument in the case is set for April 19, 2011. Whatever the Court decides in AEP v. Connecticut is sure to rock the foundation of climate law and policy for many years – perhaps generations – to come.
Posted on March 24, 2011
At this time of year, most companies with facilities which have Title V air operating permits have either filed, or are preparing to file, annual compliance certifications and semi-annual compliance monitoring reports with their state air agencies. It is good to remember how important these documents are and why special attention must be paid to insure they are completed accurately and wisely.
Here are some thoughts on why Title V compliance certifications and semi-annual monitoring reports are so important:
- Each permitted facility should take great care in developing its annual compliance certification – especially if the plant is reporting "deviations" or "exceptions" from the permit requirements or violations of the permit limits. Such a certification must be viewed as a self-reported "Notice of Violation" and as an important, first-step enforcement document. The permitted facility should not just report problems and non-compliance items without also describing and explaining the corrective actions which have been taken to resolve the problems.
- Once a Title V certification is filed with a state agency and/or federal EPA, the facility can be fairly certain state and federal enforcement staff will be looking at it with a view toward possibly commencing formal enforcement proceedings to resolve any problems which are identified. Even if the state and federal agencies exercise their enforcement discretion and choose not to act, environmental groups can and sometimes do file citizen enforcement lawsuits to directly enforce the terms of the permit in federal court. Because the violations are "self-reported," a federal court will almost certainly impose some level of civil penalty in a Citizen Suit. If that happens, the defendant company must not only pay the civil penalty -- but also the attorneys fees and costs of the plaintiff environmental group which commenced and pursued the action.
- For the above reasons, it is important that all Title V compliance certifications be reviewed and approved by company counsel -- either in-house attorneys or outside counsel -- in advance of filing. This process is especially true if exceptions or deviations are being reported. Counsel should also be involved to insure the "reasonable inquiry" requirements have been met before the "Responsible Official" of the company signs the certification. If the certification is not true, accurate and complete, both the responsible official and the company can be subject to prosecution.
- These suggestions apply to companies of all sizes which are subject to the Title V air permit program. If a company does not have an in-house lawyer on staff, it should consider seeking the advice of outside counsel. It is important to have the right kind of legal advice available in this area. Simple mistakes and oversights made in the Title V certification process can later prove to be very expensive.
- Like anything else, this process can be managed effectively so that a company can avoid unnecessary risks of legal liability. However, it takes foresight, planning and knowledge of the process in order to navigate safely through the Title V compliance certification process.
- And remember the old adage: "An ounce of prevention can be worth a pound of cure!"
Posted on March 22, 2011
We all know that the bona fide prospective purchaser (BFPP) provision provides a defense to CERCLA liability for contaminated sites and allows a knowing purchase of contaminated property. It encourages brownfields and voluntary cleanup programs across the country.
Judicial interpretations of the BFPP defense are scarce. In October 2010, a federal district court in South Carolina issued its opinion which was a nasty turn of events for BFPP’s. (Ashley II of Charleston, LLC v. PCS Nitrogen, Inc. (“Ashley II”), Case No. 2:05-cv-02782-MBS). The case was for recovery of cleanup costs associated with a former fertilizer manufacturing plant in Charleston, South Carolina.
The court decided that Ashley was not a BFPP, as it claimed, and was responsible for five percent of the clean-up costs based on the following facts: (1) Ashley had torn down some structures in 2008, which allowed rainwater to contact cracked sumps containing hazardous substances. As a result, disposal of hazardous substances had occurred after Ashley took possession of the property; (2) Ashley was “affiliated” with other PRPs because Ashley had indemnified them and, more significantly, attempted “to discourage EPA from recovering response costs covered by the indemnification”; and (3) Ashley had not exercised appropriate care because it failed to address recognized environmental conditions (RECs) that were identified in the environmental site assessment as well as other potential site hazards.
The lesson here is that Purchasers should consider the effect of indemnity provisions and any interactions they may have with government agencies regarding other PRPs. In addition, because “disposal” may be defined very broadly, purchasers should thoroughly evaluate construction, demolition, and other site activities to determine if such activities could cause a release of hazardous substances. Finally, it is critical that all RECs be addressed, beginning no later than the time the purchaser acquires the property and continuing for the duration of its ownership.
Posted on March 17, 2011
On rare occasions, change comes even to the "land of steady habits". New Connecticut Governor Dannel Malloy (D) has proposed consolidating the energy and environmental functions of his administration into a new, integrated department. Ignoring for the moment the questionable new acronym that will result, the Department of Energy and Environmental Protection or "DEEP", this earth shattering (for Connecticut, anyway...) proposal seems to make a tremendous amount of sense, and will bring Connecticut into line with a number of other states who already have recognized the inextricable link between the environmental protection and energy policy functions.
Subject to the "never a slam dunk" approval of the Connecticut legislature, the energy policy and Department of Public Utility Control units will be combined with the Department of Environmental Protection's existing regulatory natural resource conservation and management units. On its face, this proposal makes sense, as it acknowledges the inescapable overlap between environmental and energy policies, and seeks to ensure that policy decisions take into account and make sense given the two often competing sectors. Examples of key energy policy issues with environmental implications include repowering of aged generation units, incentives for alternative fuels and energy efficiency initiatives, and the ongoing "generation vs. transmission" debates. The integration of these energy functions, which currently are spread among a number of agencies including the Office of Policy and Management, with the traditional environmental regulatory functions will not necessarily be seamless, as the varied duties of the new agency will include regulation of oil dealers, control of state building construction standards, responses to energy emergencies and the monitoring of energy prices.
To head DEEP, Governor Malloy has proposed the appointment of Daniel Esty as the new Commissioner. Esty, a Professor at the Yale School of Forestry and Environmental Studies and the Yale Law School, is a nationally renowned expert on environmental and energy policies, and in the past has worked in various senior positions at the Environmental Protection Agency. A frequent author, including his latest book "Green to Gold: How Smart Companies Use Environmental Strategy, to Innovate, Create Value, and Build Competitive Advantage", Esty's talents also reach into the economic aspects of the environmental and energy worlds. With his "deep" resume, Esty would add instant credibility and expertise to the new super agency.
Esty will be tasked by Governor Malloy to help lead Connecticut's continuing efforts toward economic recovery. Among other challenges, Connecticut currently has among the nation's highest rates for electricity, a problem that has very real effects on the business climate of the state. Like most other states, Connecticut also has faces the daunting task of dealing with an elephant-sized budget deficit, currently projected to be in the range of over $3 billion. Esty, who appears to have wide-spread support from both the business and environmental communities, most certainly will have his work cut out for him, but there are many constituents here in Connecticut pulling for him.
Posted on March 16, 2011
I am picking up the discussion on EPA’s proposed willingness to pay survey addressed to the fish mortality at once-through cooling water systems at electric power plants. Bill Green laid out the background of this issue in his February 17th post. The willingness to pay survey is designed to help EPA in writing its rule which will regulate cooling water intake structures at existing power plants. The Information Collection Request for the survey appeared in the Federal Register on January 21, 2011. EPA recently agreed to propose that rule by March 14, 2011, and it is understood that the proposed rule has been sent by EPA to OMB for review. The content of the proposed rule is not public, but the likelihood that it relies on a survey done after January 21 and before the end of February is very close to nil. So is it EPA’s plan to do the survey after the proposed rule is public and then use the results in writing the final rule? That’s hard to believe, since relying on significant new data generated by the Agency but not available at the time the rule was proposed is highly unlikely to pass muster under administrative law principles. Whatever EPA’s plan is here, it doesn’t follow the normal pattern of collecting the data, proposing the regulation, and then adjusting the final rule in light of comment from the public. I seem to remember something in Alice in Wonderland about proceeding in the reverse order.
Then one needs to look hard at the survey itself. It never makes clear to the public the basic biology that is at stake in fish mortality at power plant cooling water structures. Fish typically produce thousands of eggs over their lifetime. A single winter flounder can spawn 500,000 eggs each year and a single Atlantic cod can spawn 4-8 million eggs each year. Only two need to survive to maturity to maintain the population at its present size. Thousands of the early life forms will die – from starvation or being consumed by other fish or from being sucked into cooling water systems or from other causes. The number of cases where the mortality from cooling water systems has resulted in a demonstrable decline in mature fish populations is no more than a handful. Any cost-effective policy on cooling water intake structures at existing power plants would focus on those plants and not on power plants generally. Moreover, the policy would also take into consideration the remaining useful life of the plants in question. EPA’s survey does nothing to address these issues. Experts on willingness to pay surveys will undoubtedly have other and more telling criticisms of the survey, suffice it say that one may have serious doubts that it will produce information of real value.
It is now 39 years since the Clean Water Act was passed. Section 316 is one of the few sections in which EPA is directed to consider on an individual basis what the effect of particular industrial operations are on the aquatic biology. That is a serious and important issue. Assuming that EPA seriously intends to rewrite its Section 316 regulations on the basis of willingness to pay surveys, it may be 50 years after the passage of the Act before the Agency is able to get it all right.
Posted on March 14, 2011
Last year, the U.S. Securities and Exchange Commission (“SEC”) issued interpretive guidance on climate change-related disclosure, a significant step towards focusing companies on addressing this important issue and improving the quality of the information available to investors on this subject. While this guidance caused some companies to reevaluate and improve their disclosure practices, overall disclosure of the risks and opportunities presented to companies by climate change remains inadequate.
That is the finding of Disclosing Climate Risks & Opportunities in SEC Filings: A Guide for Corporate Executives, Attorneys & Directors, a new Ceres report intended as a practical guide for companies and their advisors on how they should respond to the SEC disclosure regulations and the interpretive guidance, so that they can ensure they are disclosing all material climate-related information.
Developed with input from members of the Ceres Investor Network on Climate Risk (INCR), which includes 95 investors managing over $9 trillion in assets, the report offers the investor perspective on climate-related disclosure. It closely examines the disclosure practices of over a dozen companies across multiple sectors, highlighting some industry leaders—like electric power company AES Corp. and technology company Seimens—for disclosure that quantifies material climate issues and provides additional important details.
However, in the case of every company examined, there was room for improvement. And the report found that for many companies, disclosure was non-existent or unhelpful boilerplate. The main takeaways from the report are that companies should be doing more comprehensive analysis of climate risks and opportunities applicable to their business, compiling more consistent and quantified information, and that they should be disclosing it where investors look to find it, both in their voluntary reporting and, where material, in their annual mandatory filings.
ACOEL piece on SEC guidance available here.
Disclosure report is available here.
Posted on March 11, 2011
In cases of first and second impression, federal district courts in South Carolina and California have now ruled on the bona fide prospective purchase (“BFPP”) defense following its enactment in 2002 and EPA’s subsequent “all appropriate inquiries” (“AAI”) implementing regulations in 2006. In Ashley II of Charleston, L.L.C. v. PCS Nitrogen, Inc., Judge Seymour of the District of South Carolina undertook an exhaustive 55-page examination of the facts surrounding the purchase by Ashley II of several parcels from various owners. In the more succinct decision of 3000 E. Imperial, LLC, v. Robertshaw Controls Co., et al., Judge Anderson of the Central District of California addressed the divisibility of harm in connection with a purchaser’s cost recovery action against the seller under CERCLA §107(a) and also addressed the plaintiff’s BFPP status.
In a lengthy discussion of the history of the site, the Court examined the involvement of each of the prior owners as well as the actions of Ashley II in determining whether the harm was divisible. Ultimately, the Court determined that the harm was not divisible; however, the Court did construct a basis for allocating liability. Of particular note was the Court’s extensive analysis of the bona fide prospective purchaser status of Ashley II; but also of interest were the Court’s holdings on the issue of contractual indemnifications and release agreements.
One thing that the Court failed to give any attention to was the Consent Agreement entered into between the State of South Carolina and Ashley II. This document bears some resemblance to the State’s Brownfield non-responsible party contracts. This document attempted to establish Ashley II as a non-responsible party and afforded it contribution protection.
Ultimately, the Court set forth an allocation of the response costs by percentage attributable to each party, with Ashley II bearing its allocation along with those for which it had indemnified.
3000 E. Imperial
The California District Court’s decision came on the heels of the Ashley II decision. Obviously, the history of the 3000 E. Imperial site was less complex. There, the Court discussed at some length the testimony of two competing experts on when the USTs in questions were likely to have resulted in a release. The Court then examined divisibility of harm in conjunction with the Burlington decision and considering the elements of § 433A of the Restatement (Second) of Torts. Ultimately, the Court concluded that the defendant’s claim for divisibility was insufficient. The Court then turned to the defendant’s counterclaim for § 107 cost recovery as a PRP. Obviously, the plaintiff had claimed that it was not a PRP by virtue of its status as a BFPP. Following a brief examination of the plaintiff’s actions following closing and a fleeting reference to “appropriate care,” the Court concluded that the plaintiff did take “reasonable steps” to prevent further releases and was entitled to BFPP status.
Posted on March 8, 2011
The year 2011 has begun much in the way 2010 ended. There is activity across the northeast and nationally about whether hydraulic fracturing, a technique used for decades in the petroleum industry, posses a risk to the environment and to drinking waters, in particular, when it is used as a technique for developing natural gas. So, what is happening, and what is at issue?
There are more regulatory proceedings and investigations underway than we will mention here. This representative sampling is just the tip of the iceberg. In Washington, the Environmental Protection Agency is in the process of beginning a study regarding the potential influences of hydraulic fracturing on drinking water. That study is in response to a request from Congress, and several members have been active on fracturing issues. In addition to the EPA investigation prompted by letters from representatives Waxman and Markey, representative Hinchey has reintroduced legislation that would authorize EPA to regulate hydraulic fracturing under the Safe Drinking Water Act. EPA also has sought information from fracturing companies pursuant to its TSCA authority, and more recently, by way of a subpoena.
Regionally, the Delaware River Basin Commission, an interstate compact established by Congress to address conditions within the Delaware River Basin, has proposed rules which would apply to natural gas development within the four member states. Among those states, New York is in the process of revisiting the question of whether and to what degree hydraulic fracturing merits further environmental analysis in the context of natural gas development, and Pennsylvania, a state with experience in developing energy resources, has put in place a fairly detailed set of rules and regulations governing various aspects of the activities associated with hydraulic fracturing. At DRBC public hearings so far in New York and Pennsylvania, the number of speakers has been balanced, if not slightly in favor of those who favor developing the energy resource.
But the action isn’t limited to politicians. Self promoters and celebrities also have entered the mix at the DRBC hearings. And, there is even a film nominated for an academy award (as a documentary) making the rounds. The film reportedly is based principally on anecdotes and aspects of it fall into that well known genre of fear mongering and half truths.
The action surrounding fracturing is likely to continue through the year. Natural gas is an energy source widely viewed as serving as a bridge fuel to a low carbon or no carbon future. The resources available by exploiting shale gas reportedly are adequate to address domestic energy needs for the foreseeable future. The question is, will science or emotion prevail in determining what diligence must be done by those seeking to develop this resource.
So, what does one draw from all this?
- Hydraulic fracturing has been used successfully by the energy industry for several decades. While there are anecdotal reports of environmental influences resulting from hydraulic fracturing practices, they reflect a minute portion of the tens of thousands if not hundreds of thousands of wells where the technique has been employed. When properly performed, the process is safe and environmentally sound.
- Much of the press for federal legislation seems to have originated from those offended at the exemption granted to industry by the Bush administration. In fact, the states where hydraulic fracturing has been in use for decades all have extensive regulatory programs. There may be little need for federal legislation.
- Interest by the Congress has been focused in the House. Most arose before the shift in power that occurred in November. It is not clear that the new Republican majority will have much appetite to fix what is not broken.
- The prospect of plentiful, domestic natural gas along with the economic benefits that will accompany development of those resources, is a powerful incentive for the state and local governments as well as for industry and labor organizations. Do not expect interest in hydraulic fracturing to diminish; but, do not expect the volume of complaints from opponents to diminish either.
Posted on March 7, 2011
In its first acts since GHG limits took effect under Prevention of Significant Deterioration (PSD) regulations, EPA has tried to walk a fine line between imposing stringent controls and not overplaying its hand in the face of Congressional reluctance.
In response to the first state-issued PSD permit with GHG controls since GHG limits went into effect January 2, EPA Region VI officials are seeking stronger GHG limits than Louisiana is requiring. The Louisiana Department of Environmental Quality (DEQ) recently finalized a PSD permit for a new iron and steel facility by Nucor Corp. on January 27, but declined to make any changes to GHG limits in the draft permit, including those suggested by EPA. It is unclear whether EPA will object to the permit’s issuance, but EPA was clearly dissatisfied with the permit for failing to establish a mass or CO2-equivalent limit, instead proposing a limit of “good combustion practices” based on an efficiency limit. “When determining a PSD permit limit, a permitting authority must establish a numeric emissions limitation that reflects the maximum degree of reduction achievable for each pollutant subject to BACT,” EPA stated in its January 7 letter to LDEQ. EPA also faulted the permit for failing to: include adequate monitoring for CO2 control; evaluate carbon capture and sequestration as an available technology; include a BACT analysis explaining how the control technology was selected; and provide baseline GHG emissions rates from the plant. Essentially EPA’s comments largely follow the agency’s position that GHG permitting should not differ from other air pollutants.
While EPA sought to send a strong message to Louisiana, it has taken a lighter approach on stalled permits, exempting several of them from the new GHG limits. In response to several PSD permit applications that have languished with EPA, the agency noticed its intent to exempt several permits that have yet to be issued from complying with emissions limits that took effect after the permit application date. The proposed new policy arose, as stated in EPA’s January 31 declaration in Avenal Power LLC v. EPA, exempting Avenal’s proposed 600 MW natural gas combined cycle power plant from GHG limits, the new SO2 hourly NAAQs (effective Aug. 23, 2010), and new hourly NO2 limits. The decision was made after Avenal applied for a permit in 2007 and sued EPA for failing to comply with PSD regulations requiring the agency to act on the permit within one-year of the application. EPA will issue a public notice requesting comment on the proposed policy. If the final policy is consistent with EPA’s declaration, several similarly situated entities whose permits have been delayed by EPA inaction could find themselves free from GHG limits in their newly issued permits.
Posted on March 4, 2011
On December 29, 2010, EPA published the largest total maximum daily load (“TMDL”) ever issued under the Clean Water Act. It imposes maximum loadings for nitrogen, phosphorus and sediment for the Bay and its 92 tidal segments, including loading allocations for major river systems in six states and the District of Columbia which drain into the Chesapeake. This TMDL was required because of widespread non-attainment of water quality standards for dissolved oxygen, clarity/underwater grasses and chlorophyll-a (a measure of algae levels). This non-attainment is caused by excess discharges of nitrogen, phosphorus and sediment, largely from human activities.
For decades, water quality in the Chesapeake Bay and its tributaries has been poor, resulting in fish kills, large “dead zones” in the summer time where no oxygen exists (and no fish can survive) and significant decreases in the annual harvests of fish, crabs, oysters and other shellfish from historic levels. There has also been a serious decline in wildlife habitat, including wetlands.
On May 12, 2009, President Obama issued Executive Order 13508 entitled “Chesapeake Bay Protection and Restoration”. The Order recognized the Chesapeake Bay as a “national treasure” and directed federal and state agencies to work together to develop strategies and programs “to protect and restore the health, heritage, natural resources and social and economic value of the nation’s largest estuary and ecosystem.” Led by EPA, the agencies issued a Strategy For Protecting and Restoring the Chesapeake Bay Watershed, which I described in an ACOEL blog article entitled “EPA Announces Strategy for Chesapeake Bay Restoration” posted May 27, 2010.
The TMDL is the centerpiece of the water quality restoration strategy. The Chesapeake Bay watershed covers 64,000 square miles in Maryland, Virginia, Pennsylvania, Delaware, West Virginia, New York, and the District of Columbia. The population is 27 million and growing. Rising human demands on the Bay and its watershed have outstripped the modest gains of past efforts.
Because the water quality problems involve multiple states and are technically complex, the states and the District of Columbia in 2007 asked EPA to take the lead in developing a multi-state TMDL. EPA did so, in close consultation with the states as well as local government officials and members of the public and interested stakeholder groups. The resulting TMDL calls for reductions in 25% of the nitrogen, 24% of the phosphorus, and 20% in sediment loadings below current levels. The goal is to have all necessary programs in place to achieve these reductions by 2025, and 60% in place by 2017.
Because the TMDL will require reductions from substantial numbers of non-point sources (such as agriculture and stormwater runoff), which EPA has no direct authority to regulate under the Clean Water Act, states have developed “Watershed Implementation Plans”, or “WIPs”, which embody the measures which each state will employ to achieve the required pollutant reductions. The effect of the WIPs is to give the states the first cut in selecting the mix of controls on various point and non-point sources to achieve a cost-effective solution. If a state’s WIP does not provide reasonable assurance of achieving the desired goals, EPA is prepared to use “backstop” allocations, emphasizing increased point-source regulation over which EPA has clear regulatory authority.
The WIP is a brand new tool in the TMDL toolbox, and its use by the Chesapeake watershed states should prove instructive for other impaired water bodies. Work is in progress at the state, county and local levels to carry out the plans. Principles of adaptive management are built into the system with annual reviews and two-year milestones to ensure progress towards meeting water quality standards. Both the TMDL and the WIPs were subject to extensive public comment, public hearings and meetings with affected sectors.
The cost of the necessary reductions will not be cheap. Wastewater treatment plants and storm sewer systems will need to be upgraded. Buildings and shopping centers will need to be designed and managed to sharply reduce stormwater runoff. Non-point source runoff from farming operations will require nutrient management plans and other best management practices. Federal and state funding and technical assistance are available to help.
Most importantly, the TMDL challenges everyone in the Chesapeake Bay watershed to put aside past differences and indifferences, and put in place the necessary programs and practices. Extensive information is available on EPA’s Chesapeake Bay TMDL web site . This includes the state WIPs and links to each state program.
Ridge Hall serves on the Board of the Chesapeake Legal Alliance. He can be reached at firstname.lastname@example.org.
Posted on March 3, 2011
The suspense is over. Inside EPA just released EPA’s December 2010 Draft Guidance describing how EPA and the Army Corps of Engineers intend to identify jurisdictional waters under the Clean Water Act (CWA) and implement the U.S. Supreme Court’s decisions in Rapanos and SWANCC. The Agency has yet to formally release the 2010 Draft Guidance.
As anticipated, the 2010 Draft Guidance significantly expands the scope of waters over which EPA and the Corps assert jurisdiction. Indeed, the Draft Guidance unabashedly exclaims that, “the Agencies expect that the numbers of waters found to be subject to CWA jurisdiction will increase significantly compared to practices under the 2003 SWANCC guidance and the 2008 Rapanos guidance.” The Draft Guidance takes a dig at the 2008 Rapanos guidance stating that the older guidance “reflected a policy choice to interpret Justice Kennedy’s opinion narrowly, resulting in fewer waterbodies found to be jurisdictional under the CWA than under a more faithful interpretation.”
The 2010 Draft Guidance, still marked as “Deliberative Process; Confidential”, would supersede EPA’s and the Corp’s December 2008 Revised Guidance on Clean Water Act Jurisdiction Following the Supreme Court Decision in Rapanos v. U.S. and Carabell v. U.S., and their 2003 “Joint Memorandum” which provides clarifying guidance on the Supreme Court’s SWANCC decision.
The Draft Guidance rarely misses an opportunity to expand the scope of CWA jurisdiction as interpreted by the 2008 Rapanos guidance. For example, while the 2008 Rapanos guidance focused only on the CWA 404 regulations at issue in the Rapanos case, the 2010 Draft Guidance applies to decisions concerning “whether a waterbody is subject to any of the programs authorized under the CWA”, and expressly includes CWA sections 402 (NPDES), 311 (oil spill), 303 (water quality standards and TMDLs) and 401 (state water quality certification) programs.
The 2010 Draft Guidance begins with a broad interpretation of the meaning of “traditional navigable waters” and “interstate waters” for purposes of CWA jurisdiction. It says that waters will be considered “traditional navigable waters” if “they are susceptible for being used in the future for commercial navigation, including waterborne recreation . . . . A determination that a water is susceptible to future commercial navigation, including commercial waterborne recreation, should be supported by evidence.” Of course it should! In contrast, the 2008 Raponos guidance mandated that a likelihood of future commercial navigation, including waterborne commercial recreation, “must be clearly documented” and “will not be supported when evidence is insubstantial or speculative.”
The 2008 Rapanos guidance provided useful guidelines for the regulated community to determine what features would not be subject to CWA jurisdiction. For example, the “Summary of Key Points” in the 2008 Rapanos guidance provided that the agencies generally would not assert CWA jurisdiction over “swales or erosional features (e .g., gullies, small washes characterized by low volume, infrequent, or short duration flow)”, or over “ditches (including roadside ditches) excavated wholly in and draining only uplands and that do not carry a relatively permanent flow of water.”
This reasonable interpretation of features that are outside the scope of CWA jurisdiction under Rapanos is eliminated from the “Summary of Key Points” in the 2010 Draft Guidance. Later text in the 2010 Draft Guidance does retain the concept that such features generally are not subject to CWA jurisdiction: “Swales or erosional features (e.g., gullies, small washes characterized by low volume, infrequent, or short duration flow) are generally not waters of the United States because they are not tributaries or they do not have a significant nexus to downstream traditional navigable waters or interstate waters.” The Guidance emphasizes that “[e]rosional features such as gullies and rills are not part of the tributary system, are not jurisdictional waters, and shall not be assessed as part of the significant nexus determination. Natural and man-made swales are also not tributaries for purposes of this guidance.”
However, the 2010 Draft Guidance “clarifies” that under certain circumstances ditches may be jurisdictional. If a ditch has a bed and bank and an ordinary high water mark, and connects directly or indirectly to a traditional navigable water, it is considered a “tributary” potentially subject to CWA jurisdiction like any other tributary, if: a) it is a natural stream that has been altered (e.g., channelized, straightened or relocated); b) it is excavated in waters of the U.S., including wetlands; c) it has relatively permanent flowing or standing water; or d) the ditch connects two or more jurisdictional waters of the U.S. If a ditch or swale includes areas that meet the regulatory definition of “wetlands”, the ditch or swale must be evaluated to see if it qualifies as wetlands for purposes of CWA coverage.
The 2008 Rapanos guidance stated that the agencies will assert jurisdiction over non-navigable tributaries of traditional navigable waters that are relatively permanent where the tributaries “typically flow year round or have continuous flow at least seasonally (e.g., typically three months).” The 2010 Draft Guidance deletes the “continuous flow” and “three month” clarifications, and instead asserts that non-navigable tributaries are subject to CWA jurisdiction if “they are relatively permanent, meaning at least seasonal.” The 2010 Draft Guidance explains these changes were made because the “time period constituting ‘seasonal’ will vary across the country. Rather than having distinct, rigid boundaries, stream reaches classified as perennial, intermittent, and ephemeral may more accurately be described as dynamic zones within stream networks.”
Under the 2010 Draft Guidance, more tributaries would be jurisdictional. The Draft Guidance takes the position that “a tributary continues as far as a channel (i.e., bed and bank) is present. A natural or man-made break (e.g., outcrop, underground flow, dam, weir, diversion or similar break) in the presence of a bed and bank or ordinary high water mark [OHWM] does not establish the limit of a tributary in cases where a bed and bank and an OHWM can be identified upstream and downstream of the break.” This position is likely to substantially increase the number of jurisdictional tributaries, especially in the desert southwest, where many washes have miles upon miles where no beds and banks with identifiable OHWMs exist as a result of underground flows, outcrops, and man-made breaks.
The 2010 Draft Guidance indicates that tributaries with an OHWM and identifiable beds and banks will generally be considered jurisdictional if they are “part of a tributary system to a traditional navigable water or interstate water, and therefore can transport pollutants, sediments, flood waters and other materials to a traditional navigable water.” In contrast, the 2008 guidance provided that these were simply factors to evaluate in determining whether a significant nexus exists.
The 2010 Draft Guidance interprets the word “significant” in “significant nexus” to mean “more than speculative or insubstantial.” The Guidance suggests that Justice Kennedy likely meant that “‘significant’ includes having a predictable or observable chemical, physical or biological functional relationship.” It is debatable whether Justice Kennedy intended the word ‘significant’ to have this more expansive meaning.
At this time, the fate of the 2010 Draft Guidance remains uncertain. The Guidance faces strong opposition from various industry groups and Congressional efforts to block its issuance. And it remains to be seen whether and the extent to which the Draft Guidance, if and when formally issued by EPA, will differ from the controversial December 2010 Draft.
Posted on March 1, 2011
Previously, I discussed EPA’s efforts to “muddle through” on climate change in the absence of comprehensive legislation. This week, I think it’s the Clean Water Act’s turn. If there were any regulatory situation which required some serious muddling through at the moment, interpretation of the Supreme Court’s Rapanos decision almost is a match for the current climate mess. As most of my readers know, Rapanos was a 4-1-4 decision which left EPA, the Corps, developers and environmentalists fairly equally perplexed
Most stakeholders have assumed that Kennedy’s concurring opinion, requiring a “significant nexus” between wetlands and traditional navigable waters before those wetlands are subject to jurisdiction under the CWA, is the law of the land at this point. That is the approach adopted in the Rapanos Guidance issued by EPA and the Corps in 2007.
A recent decision by the 4th Circuit Court of Appeals, in Precon Development Corporation v. Army Corps of Engineers, illustrates just how muddled post-Rapanos interpretation has become. The decision in Precon – reversing the District Court – found that the Corps had not built a record sufficient to establish that the wetlands which Precon sought to develop were jurisdictional under the CWA.
There were two technical issues in Precon. Precon lost what one might have thought would be the more significant issue – the Corps’ finding that, although only 4.8 acres were really at issue in this case, and Precon’s entire development includes 166 acres of wetlands, 448 acres of “similarly situated” wetlands would be examined for a substantial nexus to navigable waters. Precon ultimately won, however, because the Court concluded that the Corps’ record did not contain enough physical evidence to support its determination that a significant nexus exists between the 448 wetland acres and the downstream navigable water.
The Court’s conclusion raised two issues of broad concern to stakeholders. First, the Court granted little deference to EPA’s conclusion on the significant nexus issue. The Corps argued that its conclusion that there was a significant nexus between the site wetlands and the downstream navigable waters was a factual conclusion. However, the Court concluded that the significant nexus determination was not factual. The Court stated that:
The question is instead whether the Corps’ findings were adequate to support the ultimate conclusion that a significant nexus exists. This legal determination is essentially now a matter of statutory construction, as Justice Kennedy established that a “significant nexus” is a statutory requirement for bringing wetlands adjacent to non-navigable tributaries within the CWA’s definition of “navigable waters.”
Well, this is certainly a nice question of administrative law. The significant nexus issue may now be the ultimate legal question. Nonetheless, I would guess that most wetlands scientists and hydrologists would say that this is largely a factual question. Even if the agency is applying its judgment to answer that question, it’s the type of judgment that requires technical expertise – expertise to which courts have traditionally deferred.
The second of the Court’s important pronouncements was that it would not give the EPA/Corps Rapanos Guidance deference under Chevron. Why not?
Because – although it could – the Corps has not adopted an interpretation of “navigable waters” that incorporates this concept through notice-and-comment rulemaking, but instead has interpreted the term only in a non-binding guidance document.”
Isn’t it timely, then, that EPA and the Corps sent a draft new Rapanos guidance to OMB in December, and GOP leadership in the House is proposing language in a continuing resolution that would preclude EPA from using any funds “to implement, administer, or enforce a change to a rule or guidance document pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act (33 U.S.C. 1251).” Perhaps EPA and the Corps should take half a loaf. Why not agree to shelve the guidance and instead proceed with notice-and-comment rulemaking to clarify Rapanos? At least then the Courts might grant EPA and the Corps more deference in implementation. It’s already been almost five years since Rapanos was issued. EPA and the Corps can hardly argue that it’s necessary to go the guidance route because they don’t have the time to proceed through the full regulatory process.
Enough muddling through. Take the time to do it right and issue regulations. Then, maybe the muddle will abate. (Can one abate a muddle?)