Wisconsin DNR’s New Phosphorus Rules – The Curious Story of the Delay That Never Happens

Posted on November 30, 2011 by Linda Bochert

On November 3, 2011, the Wisconsin Legislature completed its final regular session of the year without enacting a delay in the phosphorus rules adopted by the Wisconsin Department of Natural Resources (WDNR) that went into effect just short of one year ago.  This is news?  Well, yes.

Last June 23, 2010, the WDNR citizen advisory board approved significant revisions to three rules to regulate the discharge of phosphorus to Wisconsin’s waterways.  The result of several years’ work with outside interest groups, these revisions establish numerical standards for point sources and performance standards for non-point sources.  Following legislative review, on January 1 and December 1, 2010 the rules relating to non-point and point sources respectively went into effect. For additional background and information about the rule content, click here

On January 3, 2011, Wisconsin’s newly-elected Governor, Scott Walker, expressed his concerns for the financial impact on industries and municipalities of compliance with the new phosphorus rules for point sources.  After initially proposing that the rules be substantively rewritten, the Governor instead proposed a two-year delay in the effective date to be enacted as part of the Biennial Budget bill.

Bit it didn’t happen.

Environmental advocacy groups swung into action, urging the Legislature to assure that the rules would remain in effect.  Industrial and municipal groups voiced concerns over the economic consequences of rule implementation.  In May 2011, two Democratic Wisconsin legislators wrote EPA seeking EPA’s perspective on the proposed suspension or effective date delay; EPA responded that Wisconsin’s rules would remain applicable standards unless or until EPA promulgated a more stringent standard or approved a revision made by Wisconsin. 

And the Senate and Assembly Republicans couldn’t agree on any of the options for delaying the rules’ effectiveness.  So, they deleted the Governor’s delay proposal.  When the Biennial Budget was signed on June 26, 2011, there was no language implementing a delay.  The Budget bill did require WDNR to prepare an economic impact analysis on the new rules.  Interestingly, while that requirement remained in place, the Governor vetoed the deadline of December 31, 2011, on the grounds that setting a date certain “may compromise the quality” of the fiscal analysis.

Talk then turned to a separate piece of legislation, to be considered during the regular legislative floor periods in September, October and November.

That didn’t happen either.

Meanwhile, in August 2011, WDNR circulated draft “Guidance for Implementing Wisconsin’s Phosphorus Water Quality Standards for Point Source Discharges” for review and comment: a document of nearly 150 pages on how to implement some 20 pages of rules.  As it appears these rules are in effect and likely to remain so, attention is now focused on figuring out what they mean. 

SIZING UP TRADITIONAL CULTURAL PROPERTY IN NEW MEXICO

Posted on November 28, 2011 by Larry Ausherman

New Mexico is a land of vast expanses, mountains, mesas, and rich cultural heritages.  Cultural and historic properties are protected by New Mexico law in a manner that can impose significant restrictions and additional permitting requirements.  But should that protection extend to properties that are as large as a prominent mountain and its mesas?  Mount Taylor and its associated mesas span over 700 square miles in several counties in western New Mexico, near the city of Grants.  The “Mount Taylor Traditional Cultural Property," as listed on the State Register of Cultural Properties in 2009, covered an area more than half the size of Rhode Island.  Earlier this year a State court decision invalidated the listing, holding as one of several grounds, that the area was too large to be listed under the New Cultural Properties Act.

Mount Taylor is important to different people for varying reasons.  Its federal, state, and private lands and resources have been used for mining, ranching, logging, and recreation.  Also, some Native Americans claim that Mount Taylor is a part of their cultural and religious beliefs.  In 2009, five Indian tribes and pueblos, concerned about potential renewed uranium exploration and development activity in the Mount Taylor area, used the New Mexico Cultural Properties Act to nominate the Mount Taylor Traditional Cultural Property to the New Mexico State Register of Cultural Properties.  A “traditional cultural property” has been defined as a property that is eligible for listing because of its association with certain cultural practices or beliefs of a community.  The tribes asserted that the nominated property had traditional religious and cultural importance to them.  Because a listing on the State Register may impose additional permitting requirements on any activity that requires a state permit and is within (and in some circumstances, merely near) the listed property, property owners and others in the Mount Taylor vicinity who could be affected by a listing expressed great concern about the nomination. 

Acting on the tribes’ nomination, the state Cultural Properties Review Committee listed the Property under the Act in 2009.  But earlier this year, a reviewing court overturned the listing and held that, under New Mexico law, the size of the listing, combined with the indefinite nature of the Mount Taylor Traditional Cultural Property boundaries, was overbroad, arbitrary and capricious.  It also held that the process the Committee used for the listing was an unconstitutional violation of due process because it did not provide notice of the proposed listing to the mineral interest owners.  The attempted Mount Taylor Traditional Cultural Property listing would have been by far the largest by the State of New Mexico and possibly the largest by any state in the United States.  The matter is currently on appeal to the New Mexico Court of Appeals, and briefing has recently been completed.  The appeal also includes issues besides the size of the traditional cultural property and whether due process was afforded in the listing.  A decision could be entered by the New Mexico Court of Appeals in 2012.

 

U.S. EPA PROPOSES REVISIONS TO CLEAN AIR ACT REGULATIONS IMPACTING THE OIL AND GAS INDUSTRY

Posted on November 21, 2011 by Chester Babst

On August 23, 2011, the United States Environmental Protection Agency (EPA) published a package of four proposed rules governing air emissions from the oil and gas natural gas industry.   For the first time, EPA is targeting emissions from gas wells drilled by hydraulic fracturing.  76 Fed. Reg. 52738 (August 23, 2011).  The proposals include source performance standard (NSPS) for volatile organic compounds (VOCs), an NSPS for sulfur dioxide, and air toxics standards for both oil and natural gas production and natural gas transmission and storage.  EPA estimates these proposed rules would apply to more than 25,000 oil and gas wells drilled each year in the United States.

The proposed rule would require industry to use “green completions” (also known as reduced emissions completions) to capture emissions at wells being prepared for production  In addition, the proposed rule establishes emission limits at pneumatic controllers and condensate storage tanks.  Natural gas processing plants would be subject to more rigorous leak detection and repair requirements, and operators would be required to comply with specific maintenance and equipment standards for compressors.  EPA also has proposed to eliminate the one ton per year benzene compliance option for glycol dehydrators at major sources.

The proposed regulations were issued pursuant to a Consent Decree with WildEarth Guardians and San Juan Citizens Alliance.  That Consent Decree resolved a complaint that alleged that EPA failed to review the NSPS and air toxic standards for the oil and gas industry pursuant to the Clean Air Act.  EPA will accept comments until November 30, 2011, and expects to issue a final rule by April 3, 2012.

 

Settle or Try the Case?

Posted on November 14, 2011 by John Barkett

Every Superfund allocation action involves a “settle or try” decision at some point.  Occasionally, I find an allocation decision where the outcome did not seem to justify the investment in litigation costs and fees and ask, “why didn’t this case settle?”

State of New York v. Solvent Chemical Co., Inc. et al., 685 F. Supp. 2d 357 (W.D.N.Y. 2010) is such a case.   There were three parties involved in the allocation: Solvent Chemical Co., Inc. (Solvent), E.I. du Pont de Nemours & Company (DuPont), and Olin Corporation (Olin).  Costs associated with four separate media were allocated: soils; the A-Zone shallow groundwater; the B-Zone bedrock groundwater; and the “hot spot” groundwater contamination.

The total response costs were $9,124,328.  This chart breaks down the response costs for each of these four media and shows the proposed allocation of Solvent’s expert and the resulting dollars that Solvent would recover:

 

The parties had a one-day settlement conference with a magistrate judge.  They could not reach agreement.  The case was then tried with the following outcome:

 

A comparison of the dollars claimed against the final judgment is shown below:

 

Between the settlement conference and the final judgment was a 19-day trial.  The district court heard from 10 witnesses live and 24 witnesses through their depositions.  There were 1,200 trial exhibits.  The parties made post-trial submissions followed by oral summations over three days in November 2008.  The district court judge took 15 months to issue its decision.

Viewed solely from an economic perspective, Olin was in a no-win situation.  I assume that its litigation fees and costs were much greater than its final allocation.  Why didn’t Solvent and Olin reach a settlement?  One has to believe that if the parties could have gamed out long before the trial the judgment against Olin less Solvent’s Olin-related litigation costs, they would have found a basis to settle.

In DuPont’s case, I will guess that Solvent put more faith in its allocation expert than it turns out, the judge did.  Parties have to remember than judges are instructed by CERCLA to do equity.   Advocacy rarely equals equity. 

The district court refused to allocate DuPont or Olin any future costs in part because a state regulatory official testified that such costs related to a contaminant linked only to Solvent’s operations.  Hence, I assume that, after litigation fees and costs, Solvent lost money.

As a mediator, I always tell parties, “I don’t care if you don’t settle, but I do care if you don’t settle and at the courthouse you wish you could turn back the clock to settle when you had the chance.”   Only the parties and the magistrate judge know why settlement did not occur, but unless the parties had taken extreme positions during settlement effectively forcing the trial, this seems like a case where a lack of foresight was costly.

U.S. EPA PROPOSES REVISIONS TO CLEAN AIR ACT REGULATIONS IMPACTING THE OIL AND GAS INDUSTRY

Posted on November 10, 2011 by Chester Babst

On August 23, 2011, the United States Environmental Protection Agency (EPA) published a package of four proposed rules governing air emissions from the oil and gas natural gas industry.   For the first time, EPA is targeting emissions from gas wells drilled by hydraulic fracturing.  76 Fed. Reg. 52738 (August 23, 2011).  The proposals include source performance standard (NSPS) for volatile organic compounds (VOCs), an NSPS for sulfur dioxide, and air toxics standards for both oil and natural gas production and natural gas transmission and storage.  EPA estimates these proposed rules would apply to more than 25,000 oil and gas wells drilled each year in the United States.

The proposed rule would require industry to use “green completions” (also known as reduced emissions completions) to capture emissions at wells being prepared for production  In addition, the proposed rule establishes emission limits at pneumatic controllers and condensate storage tanks.  Natural gas processing plants would be subject to more rigorous leak detection and repair requirements, and operators would be required to comply with specific maintenance and equipment standards for compressors.  EPA also has proposed to eliminate the one ton per year benzene compliance option for glycol dehydrators at major sources.

The proposed regulations were issued pursuant to a Consent Decree with WildEarth Guardians and San Juan Citizens Alliance.  That Consent Decree resolved a complaint that alleged that EPA failed to review the NSPS and air toxic standards for the oil and gas industry pursuant to the Clean Air Act.  EPA will accept comments until November 30, 2011, and expects to issue a final rule by April 3, 2012.

 

 

What Happened to Global Warming and the Green Economy

Posted on November 4, 2011 by Charles Tisdale

The October 16 New York Times asked the question:  Where Did Global Warming Go?  Congress is considering legislation to reduce the authority of EPA.  Some presidential candidates argue that the Environmental Protection Agency has caused significant damage to the American economy, and some have suggested its abolition.  Questions have been raised about the failure of a large solar energy company despite a massive loan guarantee by the United States government. 

 In the midst of all these headlines, I was surprised to read that the European Union has adopted a rule which requires a shift to renewable energy.  This rule will turn buildings into “power plants” to collect and store energy from sun, wind, and other non-fossil fuel sources.  Rule 116 of the Rules of Procedure calls upon EU Institutions to:

  • Pursue a 20% increase in energy efficiency by 2020,
  • Reduce greenhouse gas emissions by 30% by 2020,
  • Produce 33% of electricity and 25% of overall energy from renewal energy sources by 2020,
  • Institute hydrogen fuel cell storage technology and other storage technologies for portable, stationary and transport uses and establish a decentralized bottom up hydrogen infrastructure by 2025 in all EU Member States, and
  • Make power grids smart and independent by 2025 so that regions, cities, SMEs and citizens can produce and share energy in accordance with the same open access principals as apply to the internet now.

 Germany is the leading early adopter of the program to turn buildings into small power plants that will collect and store energy. 

 How did this happen in the EU?  Are Europeans more concerned about global warming?  Or is it the high cost of oil?  

 Oil prices affect the cost of everything.  If Europe can reduce its dependence on fossil fuel, it can improve its economic condition.  Retrofitting existing buildings and developing new technologies to collect energy from non-fossil fuels provides jobs.  Having each building become a small “power plant” uses lessons learned from the internet practice of sharing information and working collectively to produce a better product than the top down vertical development approach.

 Where did the EU and Germany come up with the plan to turn buildings into power plants to store energy and to reduce their dependence on the price of oil?  They listened to an American economist, Jeremy Rifkin.  Rifkin wrote The Third Industrial Revolution:  How Lateral Power is Transforming Energy, the Economy and the World.  Rifkin’s views may not be accepted by many in America, however, his book and his teachings are worth considering. Rifkin’s ideas are the basis for the EU Rule.

 What happened to global warming and the U. S. green economy?  The New York Times suggests that Americans prefer larger cars and less government intrusion while remaining skeptical of science. 

 Yet American history shows that we have always believed that there is another frontier for our pioneering spirit to conquer.  Some Americans believe that the next frontier is safe development of shale gas and North American oil reserves, as opposed to renewable resources.  This approach requires far less change than the development of alternative fuel sources in the manner dictated by the new EU rule.  The reserves seem plentiful and can displace energy imports.  However, their use continues the rise in green house gas emissions. 

 Is the problem in our current political system?  Is our focus on winning at all costs preventing any consensus on significant long term changes necessary to develop sustainable alternative approaches to energy?

 Perhaps it is the American character.  Traffic congestion is a problem in major cities all over the world.  The most significant changes to eliminate traffic congestion include bans or significant restrictions on driving in London, Milan, Florence and other European cities.  American cities resist restrictions on driving.  Europeans value walking and pedestrian access far more than Americans.  Americans still believe that the convenience of driving is more important than reducing traffic congestion.

 Whatever the answer is to these questions, it appears that Europeans are implementing a green economy that will benefit all of their citizens regardless of whether there is global warming.  Shouldn’t America consider this as well? 

Enforcement of Environmental Laws in the US on the Rise

Posted on November 1, 2011 by Jarred Taylor

In the US, criminal prosecution of environmental violations is on the rise.  Environmental enforcement remains one of the few areas in which government resources continue to grow.  USEPA’s criminal enforcement program has more than 350 specially trained investigators, chemists, engineers, technicians, lawyers, and support staff.  USEPA opened 346 new environmental crime cases in 2010, the second highest number of new cases since 2005.

In 2010, at just the US federal level, criminal charges were brought against 289 defendants, a 45% increase over 2009 and the highest number since 2005.  251 of the 289 cases (87%) included charges against at least one individual defendant, as opposed to a business or corporation.  Of the cases completed during 2010, 88% resulted in either a guilty plea or conviction at trial.  Defendants convicted of environmental crimes in 2010 were assessed a total of $41 million in fines and restitution and were ordered to pay $18 million for environmental projects, an 80% increase over the previous year.

Since 1990, when 75% of all environmental criminal charges were brought against companies, the focus has changed dramatically, with nearly 75% of such charges now being brought against individuals.  Multiple violations can be stacked (aggregated) for purposes of sentencing, meaning that even misdemeanor violations may result in jail terms of over one year.  In 2010, individual criminal defendants were sentenced to a total of 72 years of jail time.

These statistics, the resources being devoted to criminal enforcement, and the often low burden of proof needed to obtain a conviction, demonstrate that the prosecution of environmental criminal liabilities will only increase in future years in the US.