Regulation of Isolated Wetlands

Posted on August 31, 2011 by Thomas Lavender

While we know all too well what the U.S. Supreme Court concluded in the SWANCC and Rapanos with respect to the jurisdiction of the Army Corps of Engineers over isolated and adjacent wetlands, what was not before the Supreme Court was the status of non-jurisdictional, isolated wetlands.   By default, that issue remained within the purview of the states.  While some states already had express authority to regulated isolated, non-jurisdictional wetlands, others had not specifically addressed the matter.

Previously, South Carolina’s omnibus environmental statute, the Pollution Control Act, did not expressly address isolated wetlands, but did describe “waters of the State” rather broadly.  Nonetheless, South Carolina had not overtly attempted to exercise jurisdiction over isolated wetlands following SWANCC.  Recently, the South Carolina Supreme Court in Georgetown League of Women Voters vs. Smith Land Company, 2011 WL 268243 (S.C. July 11, 2011).  While the State environmental agency argued in its brief that it did not have the authority to require a permit for a small, isolated wetland in the center of a residential building site wetlands, the Court disagreed.  In that case, the lot owner, Smith Land, filled the lot and was sued by a number of local environmental groups arguing that the landowner failed to obtain required permits from the State for filling the isolated wetland. 

In Smith Land, the trial court granted summary judgment in favor of the property owner, and the S.C. Court of Appeals affirmed.  The S.C. Supreme Court granted certiorari, and on July 13, 2011, held that the State’s Pollution Control Act does extend regulatory authority over isolated wetlands.  The two significant holdings in the case found that the property owner was required to obtain a permit for the discharge of pollutants into the isolated wetland, which it held was within the scope of the statutory definition of “environment.”  Just as significantly, the Supreme Court held that the Pollution Control Act afforded the plaintiff a private cause of action to enforce the provisions of the Act, heretofore not previously addressed. 

This case is significant to the regulation of wetlands since, while there is a permit program in place for storm water discharges resulting from land-disturbing activities, there is no specific statutory or regulatory framework for immediately responding to requests for permits to fill isolated wetlands.  Interestingly, the majority of the Court left untouched the legitimate question of whether the plaintiffs even had standing to bring the action and whether the existing stormwater permit program that excludes land-disturbing activities below a certain threshold levels satisfied the requirement for a State permit exemption.  At this point, landowners in South Carolina have been left hanging in the balance with the implementation of a judicially-created regulatory program.

Where You Stand Depends on Where You Sit: Utility MACT Edition

Posted on August 30, 2011 by Seth Jaffe

As the deadline passed last week for submitting comments on EPA's Utility MACT rule, it's worth taking a big picture look at how the commenters line up. Big utility groups, such as the Edison Electric Institute and the American Public Power Association are looking for EPA to delay the rules. The basic argument is that it is going to take a long time to comply. EEI states that so many facilities will require extensions that the number of requests will create a backlog that will itself essentially create compliance problems.

However, it is not just environmental and public health groups that filed comments in support of the MACT rule. Exelon, which has a large nuclear fleet, submitted comments in support of the rule. In fact, Exelon referred to the "overblown critique" of the Utility MACT proposal, stating that the "lack of a national standard for toxic emissions continues to be a barrier to investment in new, cleaner generation capacity." Industry supporters are not limited to Exelon. The Clean Energy Group, which includes PG&E, Calpine, and other generators with large gas fleets, also focused on the "business certainty the electric sector needs to move forward with capital investment decisions."

In looking at these comments, it is worth keeping in mind that the Utility MACT rule is only one of nine rules under development by EPA that would impose costs on coal-fired power plants. This confluence of rules has been referred to as the "train wreck" for coal-fired power plants. While the Utility MACT rule may impose the greatest costs - and achieve the greatest benefits, according to EPA - many are concerned about the cumulative impact on coal-fired capacity. Earlier this week, the Congressional Research Service attempted to debunk the train wreck perspective:

The primary impacts of many of the rules will largely be on coal-fired plants more than 40 years old that have not, until now, installed state-of-the-art pollution controls. Many of these plants are inefficient and are being replaced by more efficient combined cycle natural gas plants, a development likely to be encouraged if the price of competing fuel - natural gas - continues to be low, almost regardless of EPA rules.

In any case, what's the argument against promulgation of these rules on the same time frame? Isn't that a good thing? There may be coal-fired plants which could sustain the capital investment required to comply with Utility MACT, but not the added cost of cooling water intake improvements to comply with new Clean Water Act requirements or the added cost of new disposal requirements if coal ash is regulated as a hazardous waste. Isn't it better to know about all of these rules up front, so that facilities can plan for the total cost of all the rules? Wouldn't a facility have legitimate cause to complain if the rules were instead issued seriatim, so that the facilities did not know about the full range of regulatory compliance costs when they make the decision whether to invest to comply with the first rule or instead to shut down?


Posted on August 29, 2011 by Kenneth Gray

ASTM has just given birth to a new standard for contaminated property – E2790-11 – the Standard Guide for Identifying and Complying with Continuing Obligations, which might become the most important American Society for Testing and Materials (“ASTM”) standard for contaminated property after its Phase I and II Standard Practices.  Its six-year gestation involved the consensus building labor of the usual parties and midwives, including consultants, private and government landowners, lenders, EPA, and private practitioners. 

 Who needs another ASTM standard?  CERCLA and similar state superfund statutes require landowners to comply with “continuing obligations” after discovery that property is contaminated, whether discovered before or after acquiring real property, as a condition of maintaining the landowner liability defenses.  Since EPA is not authorized to undertake rulemaking on continuing obligations and because of concern that courts unfamiliar with environmental practices might take decades to develop a useful body of law to guide landowners, the ASTM E50 subcommittee on Real Estate Assessment and Management got to work. 

 Several of CERCLA’s six continuing obligations are straightforward and are therefore not addressed (e.g., legally required notices) in this Standard which focuses on the three continuing obligations that cover compliance with land use restrictions, institutional controls, and “taking reasonable steps” with respect to releases of hazardous substances and petroleum.  The new Standard notes that the nature and extent of the continuing obligations should be proportional to the nature, extent, and complexity of the release and the potential for exposure at the property in question.  It then describes a sequential process for determining whether continuing obligations apply, starting with identification of any recognized environmental conditions and then the review and evaluation of those conditions and activity and use limitations at the property (AULs are defined to include Institutional Controls, Land Use Restrictions, and Engineering Controls).  This important evaluation step may in turn identify the need for a “Phase II” assessment or other detailed environmental sampling to gain a clear understanding of releases and exposure pathways, and consideration of whether the landowner should take additional remedial steps, or adopt or upgrade existing activity and use limitations. 

If recognized environmental conditions do not qualify as continuing releases, threatened releases, or releases that could cause unacceptable exposure (and there are no land use restrictions or institutional controls), the procedures set forth in the Standard do not apply (other than documenting that determination).  Otherwise, the next task is to prepare a “Continuing Obligations Plan” for developing or maintaining the AULs and reasonable steps for addressing releases of chemicals of concern, and a periodic “Continuing Obligations Monitoring and Evaluation Report.”  Time is not on the contaminated property owner’s side:  continuing obligations arise upon acquiring contaminated property under the bona fide prospective purchaser defense. 

The ASTM Standard for Continuing Obligations is not intended to, and cannot replace, legal advice, and the Standard calls out the need to seek legal advice countless times.  Intended for “users” (read: real property owners), a primary audience will be environmental consultants who will find the step-by-step process of the standard and the report outline comforting.  Nevertheless, the Standard recognizes that continuing obligation determinations will be highly site-specific, providing another source of work for environmental consultants.

Of course, clients are keenly interested in what continuing obligations they must take to retain their landowner liability protections, and can be expected to ask what the law (or a court) may require.  Consultants should fear to tread, and counsel will tread carefully.

EPA’s extant guidance on “reasonable steps” to stop and prevent hazardous substance releases is almost too general to be useful.  In some cases, EPA has suggested that reasonable steps can include additional investigation (environmental testing), or steps to limit exposure (such as fencing or drum removal). 

Does this ASTM Standard help clarify what is a “reasonable step” for addressing contamination?  It does provide a next level of detail, and properly focuses on whether releases result in unacceptable exposures, but the Standard will in some cases require significantly more effort than some property owners envisioned with respect to analyzing potential future exposures and contaminant migration (e.g., the Standard mentions contamination of and migration in utility corridors), as well as ecological receptors and “species that may routinely inhabit the property or may seasonally migrate through the property” – not to mention evaluation of intended property development. 

The Standard also contemplates a careful review of whether AULs exist or should be adopted to address unacceptable exposures or protect remedies, and how they should be maintained.  The review may also require consideration of whether additional activity and use limitations should be adopted, and whether existing AULs should be improved.

The Standard does note one issue that historically has not been part of the environmental lawyer’s beat:  a determination of whether prior recorded interests (such as an easement or mortgage) can potentially compromise or otherwise defeat a land use restriction or institutional control.  Those familiar with recorded Environmental Covenants under the recent Uniform Environmental Covenants Act will recognize this issue, but real estate law governing recorded interests can impact all AULs recorded after the prior interest.  The continuing obligation duty in some cases may require obtaining consent for a land use restriction from an outstanding interest holder.  Can you say “subordination”?  

By publishing a Standard, ASTM is providing a ready reference as courts weigh whether these three continuing obligation elements of the CERCLA defense have been established.  Depending on the complexity of the site and the issues, clients would be wise to consider the investigation and documentation processes.  Of course, the Standard is not a legal requirement, but environmental practitioners may wish to identify sites and transactions where the Standard can be helpful to clients in limiting unwanted exposures and liability – recognizing that whether continuing obligations are satisfied will be evaluated with the benefit of hindsight.


Posted on August 17, 2011 by Admin

By Joseph Manko - Manko, Gold, Katcher & Fox, LLP

While climate change skeptics continue to dispute the linkage between climate change and greenhouse gas emissions, others throughout the scientific community continue to report on problems being caused by climate change and to call for a serious assessment of what can be done to adapt to these changes in climate.  The following are a few examples of recent reports on climate change impacts and calls for adaptation to those impacts.

The National Oceanic and Atmospheric Administration (NOAA) concludes that the temperature in the first decade of the 21st century (2000-2010), averages 1.5 degrees Fahrenheit above that of the 1970s.  Without including the record high temperatures in the first half of 2011, satellite data indicate that the earth’s groundwater is being depleted.  In addition, a report by the PEW Center on Global Climate Change concludes that climate change is increasing the frequency of extreme weather events (e.g., wildfires in the southwest, flooding in North Dakota and myriad tornadoes, heat waves, and heavy precipitation) and calls for the entire community to join with the scientific community not only to determine the resultant damage and debate its causes, but also to decide how best to respond by means of adaptation.

Areas of adaptation include reducing our reliance on fossil fuel and our demand for electricity while increasing green practices (to further reduce the emission of greenhouse gases).  Those leading the “adaptation discussion” also call for efforts to make certain that our infrastructure is protected from climate change by focusing on its repair, restoration, and -- in some instances -- relocation.

Accomplishing these adaptive practices in “normal times” would be tough.  It is even more difficult to make progress, though, in the height of a recession, with legislators at both the federal and state level facing persistent gridlock and reduced budgets for infrastructure improvements (e.g., EPA’s Federal Clean Water and Drinking Water State Revolving Funds).


Posted on August 17, 2011 by William Green

 Blog written by: William Green and Gary Perko

Florida’s Everglades is a diverse mosaic of wetland communities that once extended from the shores of Lake Okeechobee to Florida Bay almost 100 miles to the south. Over a period of 100 or more years, a series of alterations and controls changed how the historic Everglades water naturally flowed. First, drainage canals were constructed from Lake Okeechobee to the ocean and Gulf of Mexico. These were followed by development of a fertile Everglades Agricultural Area (EAA) and compartmentalization of the remaining wetland ecosystem into series of Water Conservation Areas laying north of the Everglades National Park.

The diversity of the Everglades system is now rivaled by the complexity of litigation over Everglades water quality. In 1988, the United States sued the State of Florida alleging that the state had failed to enforce state water quality standards for phosphorus released into two key undeveloped components of the remaining Everglades: the Loxahatchee National Wildlife Refuge in the northern Everglades and Everglades National Park in the south. This led to a comprehensive settlement agreement and state legislation -- the Everglades Forever Act or "EFA" -- calling for construction of the largest man-made wetland treatment system ever attempted in the world. See, United States v. South Fla. Water Management Dist., 847 F.Supp. 1567 (S.D.Fla. 1992) (order approving settlement agreement); § 373.4592, Fla. Stat. (Florida’s Everglades Forever Act). To date, Florida has invested over $1 billion to convert approximately 45,000 acres of EAA farmland into Stormwater Treatment Areas or "STAs." EAA farmers also have implemented Best Management Practices that have reduced phosphorus loads from the EAA by more than 50 percent over the past 15 years.

Despite these significant state efforts, yet another lawsuit has led the federal government to threaten to wrest total control over Everglades restoration from the State of Florida and force the state to spend billions more on STA expansion. That case started out as a modest APA review of the U.S. Environmental Protection Agency’s approval, under the federal Clean Water Act, of certain amendments to the EFA, as well as Florida’s new water quality standard for phosphorus in the Everglades. As part of that water quality standard, the state adopted an ambitious phosphorus criterion of 10 ppb, but included certain moderating provisions based on the recognition that compliance with the 10 ppb criterion is a daunting task that, if achievable at all, will take decades or more to realize. In 2008, however, a federal district court rejected EPA’s approval of the moderating provisions, remanded the matter back to EPA for further review, and closed the case. See, Miccosukee Tribe of Indians of Fla. v. United States, 2008 WL 2967654 (S.D.Fla. July 29, 2008).

When EPA issued a revised determination in 2009, those disagreeing with EPA’s action chose not to file a new lawsuit to challenge the 2009 determination. Instead, the plaintiffs asked the district court to hold EPA in contempt of the 2008 order. Then, in an unprecedented expansion of APA jurisdiction, the district court reopened the case and issued another order in 2010, requiring EPA to take several actions aimed at the State. See, Miccosukee Tribe, 706 F.Supp.2d 1296 (S.D.Fla. 2010).  These included: (1) ordering Florida to re-write portions of the Everglades phosphorus standard; (2) requiring the Florida Legislature to further amend the EFA; (3) declaring the state "out-of-compliance" with state water quality standards and instructing the "manner and method" to obtain compliance within a time certain; (4) requiring the state to conform all state-issued NPDES permits and EFA permits with the court’s order; and (5) requiring EPA to "initiate and carry out" its authority to withdraw approval of the state’s NPDES program, prohibiting the state from issuing or modifying of any permits for the STAs during the interim.

Based on the district court’s 2010 order, EPA issued yet another determination "instructing" the state that a 40,000-acre STA expansion -- estimated to cost approximately $2 billion -- is necessary to achieve compliance with state water quality standards. And, in accordance with yet another order issued by the district court in Miccosukee Tribe, 2011 WL 1624977 (Apr. 26, 2011), EPA has set in motion the process by which it can assume NPDES permitting authority over the STAs to impose a stringent water quality-based effluent limit and ultimately ensure that its proposed STA expansion is implemented. Not surprisingly, the State of Florida has appealed the district court’s 2010 and 2011 orders to the U.S. Court of Appeals for the Eleventh Circuit. Thus, it remains to be seen whether the dispute over state water quality standards will ultimately lead to federalization of Everglades restoration and beyond.




Posted on August 15, 2011 by Rick Glick
Environmental lawyers of a certain age who work on projects licensed by the Federal Energy Regulatory Commission (FERC) once knew what federal preemption meant:  FERC has exclusive jurisdiction.  Over the past couple of decades, the lines have been blurred as courts find plenty of room in federal legislation for broad assertion of state authority.  Is there a point at which states overplay their hand?

In the context of hydropower licensing, the Supreme Court in First Iowa Hydro-Electric Cooperative v. FPC [1] made clear that federal regulation preempts duplicative state review of hydroelectric projects.  The Court reaffirmed the principal in California v. FERC,[2] which held that states may not invoke their authority over water law to impose minimum stream flow requirements in conflict with FERC. 

Then the states discovered Section 401 of the Clean Water Act (CWA)[3], which requires FERC applicants to demonstrate compliance with state water quality standards and “any other appropriate requirement of State law.”  In two separate opinions, the Supreme Court found that section 401 confers extensive regulatory authority in the states that all but equals the reach of FERC authority.  See, PUD No. 1 of Jefferson County v. Wash. Dept. of Ecology,[4] and  S. D. Warren Co. v. Me. Bd. of Envtl. Protection.[5]  Add to that the Second Circuit’s holding in American Rivers v. FERC [6] that federal agencies must accept all conditions in state certifications, and not much is left of the doctrine of federal preemption.

The preemption issue arises in an interesting way with regard to authorization of LNG projects.  Title III of the Energy Policy Act of 2005 (EPACT)[7], confers upon FERC exclusive siting authority over LNG terminals.  Like the Natural Gas Act, EPACT reserves to the states their full authority under the federal Coastal Zone Management Act (CZMA), Clean Air Act (CAA) and CWA.  In Oregon, which has a federally approved coastal management program, implementation[8] of CZMA consists of the state compiling local governments’ comprehensive land use plans that were previously acknowledged by the state; consistency with CZMA is measured by compliance with local land use regulations, which implement them.  Further, state law [9] requires that regulatory agencies must have received a land use compatibility statement from the local governments before a permit may be issued. 

Thus, Oregon imposes local land use requirements as a basis for implementing its authority under the federal laws carved out by EPACT.  Does this mean that LNG terminal and pipeline developers must get local land use approvals to comply with CZMA, CAA and CWA?  One LNG developer has challenged the state’s implementation of the federal law on the basis of EPACT preemption.  That case [10] is now pending in federal court. 

It would seem that allowing local governments veto authority over LNG development would be contrary to Congress’intent in vesting “exclusive” siting authority in FERC.  Federal courts will strive to read EPACT, CZMA, CAA and CWA as harmonious.  The question is, when does state implementation of these federal laws subvert the underlying policy?

[1]328 U.S. 152 (1946).
[2]495 U.S. 490 (1990).
[3]33 U.S.C. § 1341.
[4]511 U.S. 700 (1994).
[5]547 U.S. 370 (2006).
[6]129 F.3d 99 (2d Cir. 1997).
[7]Pub. L. 109-58, codified at 15 U.S.C. 717b(e)(1).
[8]ORS Chapters 195, 196 and 197.
[9]ORS 197.180.
[10]Pacific Connector Gas Pipeline, LP v. Louise Sollidayet. al., No.CV6279(D. Or..filed August 27, 2010).


Posted on August 8, 2011 by Michael L. Hardy

In a very interesting air pollution control enforcement case, the Court of Appeals of Ohio, Tenth Appellate District (which sits in Columbus, Ohio) issued an opinion that concerns many experienced practitioners:  State ex rel. Ohio Attorney General v. The Shelly Holding Co., et. al., 191 Ohio App. 3d 421, 2010 – Ohio – 6526, 946 N.E. 2d 295.

Shelly owned a number of hot mix asphalt plants.  During stack tests to determine compliance with air pollution permit emission limitations,  several plants failed their tests.  But Shelly continued to operate those hot mix asphalt plants. The Ohio Environmental Protection Agency claimed that the continued operation of the plants after the failed tests constituted  continuing violations even though the state had no monitoring data to prove that point. The Trial Court rejected the state’s contention, stating that it was unwilling to infer a continued violation until Shelly successfully completed a subsequent stack test. “Simply put the Court does not find the requested inference to be reasonable given the fact that the State has the burden .  Further, the Court finds Shelly’s argument that a ‘stack test’ does not represent normal operating conditions to be compelling.  Based on the foregoing, the Court will only consider the day of the ‘stack test’ demonstrating excess emission to be evidence of a violation.” State ex rel. Ohio Attorney General v. The Shelly Holding Co., et. al. (Sept. 2, 2009), Franklin Cty. C. P. No. 07CVH07-9702.

The Court of Appeals reversed the Trial Court, stating that “…in determining the number of days each violation existed, the trial court should have concluded that the violation continued until the subsequent stack test determined that the plant no longer was violating the permit limitations.”  The Ohio Supreme Court has agreed to consider Shelly’s appeal of this ruling.  Shelly also has the amicus curiae support of  a number of trade organizations, including the Ohio Chamber of Commerce.

Arguing that the state has the burden of proof to demonstrate by a preponderance of the evidence each and every day of violation,  Shelly seeks a ruling from the Supreme Court  that would prohibit the state from showing, by mere inference, that there are ongoing violations of permits and regulations after a failed stack test.  Citing the record evidence that stack testing conditions are “snapshots” of operating conditions at the time of the test, typically “maximum, worst-case testing conditions,” Shelly claims there was undisputed evidence that those tests do not represent day-to-day operations. The state offered no evidence to show that stack test conditions are indicative of day-to-day operations.   Thus, Shelly argues, the proof of violation during a stack test does not necessarily show that the hot mix asphalt plant exceeded its permit limits during subsequent, more normal operations. Shelly also argued that the Tenth District incorrectly assumed that another stack test is the only way to show the reestablishment of compliance. Changes in operating conditions, restrictions on output or hours, and repairs may prove to be  easier corrections than awaiting another stack test that requires coordination with state schedules.  If a successful stack test is the only way to show compliance, the facility faces the Hobson’s Choice of shut down or, if it continues to operate, the possible inference of continuing violations (and fines).

In short, this case will be interesting to follow because it highlights the real world difficulties that arise from the regulatory requirement to test under unrealistic, maximum, worst case conditions that do not correspond to day to day operations.   While Shelly may be correct that it is improper to assume non-compliance during continuing, business normal operations after a failed stack test that proceeded under artificial conditions, there remains another difficult question for Shelly:  how to re-establish compliance in a mutually satisfactory way.  There is no doubt that the state regulatory authorities would balk at any ruling that would allow a regulated source unilaterally to change or curtail operations to attain compliance.



Endangered Species Act Still a Complication for Energy Development

Posted on August 3, 2011 by Pamela Giblin

Since its inception and the early battles over the snail darter and the Tennessee Valley Authority’s Tellico Dam in the 1970s, the Endangered Species Act (ESA) has been substantially entangled with energy production in the United States. Energy development is no less ensnared today by the Act. Recent significant ESA activities affecting the energy sector include: proposed listing of the dunes sagebrush lizard, which is found in the middle of one of the most prolific oil and gas fields in the U.S.; a suit for injunction of a massive solar power development in the Mojave Desert; and a settlement proposal between the Department of Interior and conservation groups setting an aggressive timetable for future ESA listing decisions involving over 250 species. All of these could have wide repercussions on energy development for some time. This post provides the latest update on how the ESA is affecting the energy sector and outlines some ways that interested parties can play a part in the process.

Recent Listing Proposals and Litigation Affecting the Energy Industry

A number of conservation organizations have filed petitions with the U.S. Fish & Wildlife Service (Service or FWS) to “list” species as endangered or threatened throughout the U.S. When the Service has delayed making listing determinations, conservation organizations have followed up with litigation against the Service.

On July 12, 2011, the Center for Biological Diversity (CBD) announced that it was dropping its opposition to a comprehensive settlement agreement between the Department of Interior and WildEarth Guardians encompassing 13 listing suits filed by WildEarth Guardians and consolidated in the D.C. District Court. The settlement would establish work plans and timelines for the FWS to take key steps in the ESA process on over 250 species. The goal is to make listing decisions by 2016 for all species identified on FWS’s current “candidate list”. The listing of several species covered by the settlement agreement - including the greater sage grouse, the spot-tailed earless lizard, the lesser prairie chicken, and mollusks - could have major effects on the energy industry. The settlement agreement has not been finalized, due in part to a pending motion to intervene by a hunting group. But even the prospect of a set timetable for the listing of certain species has created difficulties for energy development.

The potential listing of species like the greater sage grouse is problematic for alternative energy and the oil and gas sector because they can be found in a number of areas where upstream oil and gas activities and alternative energy projects now exist or are planned. One such area is the energy prolific Powder River Basin area of Wyoming. Sage grouse are also found in Colorado, and in a 2008 rulemaking the Colorado Oil and Gas Conservation Commission proposed a number of provisions that were designed to protect the sage grouse and other sensitive species such as the mule deer, including restrictions on oil and gas well development in "sensitive wildlife habitat". In addition, those provisions gave the Colorado Division of Wildlife a prominent role in the Application for Permit to Drill process. The provisions were actively opposed by industry and became the source of controversy during the rulemaking process.

Recent litigation over the desert tortoise in California’s Mojave Desert shows how the ESA can affect planned developments even after initial ESA reviews show no adverse effects. On June 27, 2011, the conservation group Western Watersheds sought a preliminary injunction and temporary restraining order (TRO) to stop construction of a $1.4 billion solar power plant project. Western Watersheds argued that the project’s impacts on desert tortoises were underestimated during the Bureau of Land Management’s review and approval process. While the TRO was denied, a hearing on Western Watersheds’ motion for a preliminary injunction is set for August 1, 2011.

FWS’s December 2010 proposed listing of the dunes sagebrush lizard in New Mexico and Texas as endangered specifically identified oil and gas, wind and solar energy activities as a threat. This has motivated stakeholders to commence an innovative joint Candidate Conservation Agreement with Assurances (CCAA) and Habitat Conservation Plan (HCP) process to insulate these energy sectors from potential adverse effects resulting from a listing. The use of more “programmatic” CCAAs and HCPs tied to industry activities as opposed to specific properties has taken on increasing importance to the energy sector as it becomes common for listing petitions and proposals to single out industry as a threat to species.

Another example involves litigation brought in March 2010 by The Aransas Project against several officials at the Texas Commission on Environmental Quality (TCEQ). That lawsuit, which was filed in United States District Court for the Southern District of Texas, Corpus Christi Division, alleges that TCEQ is committing “takes” of endangered whooping cranes when it allocates water in the Guadalupe and San Antonio rivers and prevents sufficient flows from reaching Nueces Bay, where the whooping crane is found. To the extent that it seeks wide declaratory and injunctive relief, including relief against a state agency and curtailment of existing water rights, the suit could set a significant precedent for future ESA suits related to water rights and actions by state agencies.

Keeping Up with the Evolving ESA Landscape

As is evident from the description of these recent developments, there are a number of steps in the process of listing a species as endangered or threatened under the ESA. As such, there are also a number of opportunities – both formal and informal – for members of the energy industry to weigh in on this process before the Service reaches the point of actually adding a species to the endangered and threatened species list. In addition, there are opportunities to initiate or intervene in litigation involving FWS with respect to listing actions and other ESA determinations.

To help develop a comprehensive strategy to anticipate and respond to potential challenges posed by ESA and related regulatory activities, interested parties should:

  • Survey Potential State and Federal Species and Habitat Listings
  • Survey Pending and Threatened FWS Litigation
  • Keep Abreast of New and Creative Uses of the ESA and Similar Statutes by Environmental Groups; and
  • Assess Risk to Operations and Evaluate Need for Possible Comments on Listings, Intervention in Litigation, or Subsequent Monitoring of Key Listing Decisions and Litigation.

By closely following the constantly evolving ESA landscape and taking advantage of strategic opportunities to influence the listing process and get involved in ESA litigation, the energy such parties can seek to influence the outcome of a process that can significantly impact the ability of companies to engage in energy production.

The Process Continues: Savannah Harbor Expansion Project (SHEP)

Posted on August 1, 2011 by Drew Ernst

The deepening of the Savannah Harbor, now estimated to cost $588 million, was conditionally approved in part when Congress passed the Water Resources Development Act of 1999 (“WRDA99”). Those conditions included finalizing an environmental impact statement for the project as well as other supporting studies and completion of the permitting process. The act also required the selected plan for this project, which is known as SHEP, to be jointly approved by the Secretary of Interior, the Secretary of Commerce, the Administrator of the Environmental Protection Agency, and the Secretary of the Army, pursuant to § 101(b)(9)(B(ii) of WRDA99.

On April 15, 2010, I posted a blog entitled “In Search of Mitigation” on the ACOEL website (see Archives) which outlined the history and need for SHEP, as well as various proposals for mitigating the project’s adverse environmental impacts. A Draft Tier II EIS and Draft General Re-Evaluation Report for SHEP were released in November 2010. The public comment period closed in January of 2011 and the Corps of Engineers has been analyzing comments and undertaking additional studies.

Because of the unique language in WRDA99, EPA, U.S. Fish and Wildlife and NOAA individually have a “kill switch” (a term coined by Savannahians) on key issues regarding SHEP. Fish and Wildlife is concerned that the proposed five years of post-construction monitoring is not adequate, and that ten years of monitoring should be required to ensure that proposed mitigation procedures are working. As discussed in my earlier posting, SHEP incorporates an Adaptive Management Plan (“AMP”) which in itself is somewhat unique. The AMP, one of the first ever implemented for a harbor project, is designed to evaluate whether the measures undertaken to mitigate adverse impacts are performing as predicted and provide for changes to those mitigation measures if needed. And it's worth noting that those mitigation measures represent a very substantial share of the total project costs - 41.6 percent according to a March 2011 update from the Corps.

Of great concern to Fish and Wildlife is preservation of areas of tidal freshwater marsh found in the Savannah National Wildlife Refuge adjacent to the Savannah harbor. Fish and Wildlife also wants a guaranty that the money will be readily available to implement the AMP if mitigation measures need to be modified during post-construction monitoring. Mitigation efforts will include acquisition of freshwater wetlands across from and upriver of the Savannah National Wildlife Refuge (approximately 2,680 acres of wetland preservation) to replace freshwater acres which will be lost in part to increased salinity as a result of future rising tides, whether or not SHEP is implemented.

NOAA also remains concerned about SHEP’s impacts, particularly on the endangered shortnose sturgeon. Many of NOAA’s concerns could be alleviated if an out of service lock and dam system located upriver in Augusta, Georgia, were removed. However, such action would not be popular with residents in and about Augusta who use the impoundment for recreational purposes. EPA, in turn has requested a better explanation from the Corps of the impacts of harbor deepening on future harbor growth and on increases in air pollution and other collateral impacts.

Watching every move the agencies make is the Southern Environmental Law Center (“SELC”) and the Coastal Conservation League. Both have threatened to sue if their environmental concerns are not resolved. SELC advocates a systematic by the Corps that would include consideration of all ports located on the Eastern Seaboard as “alternative sites” in order to determine which port best warrants deepening after considering environmental impacts and construction costs at each location.

Another player to watch is South Carolina, which shares the Savannah River as a common boundary with Georgia. South Carolina appears to be doing everything it can to stop or slow down SHEP in an effort to protect the competitiveness of the Port of Charleston.

Given the size of SHEP and its potential impacts, we can expect that other parties may join the action, and I in turn expect to be reporting again on SHEP as the project progresses into its second decade.