Update on Climate Change Tort Litigation

Posted on June 29, 2012 by David Buente

The body of caselaw rejecting climate change tort claims seeking judicially-imposed restrictions on greenhouse gas emissions, which I reviewed in a prior post on January 3, 2012, continues to grow.  That post predicted that (i) none of these suits were likely to succeed, given the U.S. Supreme Court’s holding last year in Connecticut et al. v. American Electric Power Co. et al. (“AEP”) that common law “nuisance” claims seeking such restrictions are displaced by the Clean Air Act, but nevertheless (ii) plaintiffs would continue to repackage and pursue the claims in different courts under different common law labels.  Both predications have proved accurate.

Two of the cases summarized in that post, Comer et al. v. Murphy Oil USA et al. and Alec L. et al. v. Jackson et al., have since been dismissed by the presiding district courts.  In Comer, where a group of Mississippi landowners sued scores of national electric utilities and other companies for damages caused by Hurricane Katrina, claiming that the defendants’ greenhouse gas emissions constituted a common law “nuisance,” the court held that the claims were preempted by the Clean Air Act and, further, that they presented non-justiciable political questions and plaintiffs lacked standing.  In Alec L., where a group of plaintiffs sued several federal agencies under the “public trust” doctrine, seeking an order mandating greenhouse gas regulations, the court likewise held that the claims could not be recognized as a matter of federal law and, in any event, would be displaced by the Clean Air Act.  A third case, Native Village of Kivalina v. ExxonMobil Corp. et al., remains pending before the Ninth Circuit, following the district court’s dismissal of the complaint on grounds that the “nuisance” claims were non-justiciable and plaintiffs lacked standing. 

In addition, “public trust” claims have now been filed in nearly all fifty states.  Some of these take the form, like Alec L., of common law tort litigation, with non-profit groups and individuals suing state officials and agencies in state courts, seeking injunctive orders directing the promulgation of greenhouse gas regulations.  Several of these cases have already been dismissed, including in Alaska and Oregon (both on political question and justiciability grounds); none has proceeded past the pleading stage.  Other claims take the form of administrative petitions, asking the relevant state agencies to issue greenhouse has regulations.  Many of these petitions, in more than 30 states so far, have already been denied; none has been granted.

The unanimous rejection of these claims should presumably, at some time, begin to deter the filing of further climate change litigation.  But that tipping point does not seem yet to have occurred.  At least for the immediate future, it appears likely that plaintiffs will continue to use – and, to many minds, distort – the common law tort system to pursue the political goal of greenhouse gas regulation. 

Legal Winds from New Directions Buffet California’s GHG Cap-and-Trade Program

Posted on June 28, 2012 by Michael R. Barr

Late in the fall of 2011, the California Air Resources Board adopted its groundbreaking cap-and-trade rules (CTR) for greenhouse gasses. ARB faced stiff headwinds at every step.  This month, one lingering legal tempest subsided while a new legal gale appeared on the horizon.  Each involves novel environmental justice claims and could snuff out CTR and similar programs in other states.

First, balmier breezes for CTR:  in a decision filed June 19, 2012, the California Court of Appeals rejected a 2009 mandamus petition filed by the Association of Irritated Residents (AIR) and other groups and upheld ARB’s climate plan under the “California Global Warming Solutions Act of 2006” (Cal. Health & Safety Code §38500 et seq., also known as “AB 32”).   The court recognized the magnitude of ARB’s challenge under AB 32 and held: “After reviewing the record before us, we are satisfied that the [ARB] has approached its difficult task in conformity with [AB 32], and that the [GHG] measures that it has recommended reflect the exercise of sound judgment based upon substantial evidence.  Further research and experience likely will suggest modifications to the blueprint drawn in the [ARB] scoping plan, but the plan‘s adoption in 2009 was in no respect arbitrary or capricious.” (p. 22).

In its 2009 mandamus petition, AIR et al. had challenged ARB’s overall plan to implement AB32, partly on the grounds that the plan’s CTR element did not adequately protect already overburdened local communities. The petitioners preferred “direct regulation” of GHGs at sources, another major element of ARB’s plan.  They asserted that the full benefits of AB 32 to communities surrounding major sources could only be obtained by controlling GHG emissions at each GHG source, rather than by adopting the CTR.  CTR would allow GHG sources to acquire and trade GHG allowances and/or GHG offsets resulting from GHG reductions in other communities, states, provinces or countries. 

Now, a new tempest:  earlier this month, AIR et al. filed a new complaint with EPA under title VI of the federal Civil Rights Act alleging that ARB had discriminated against African/American, Latino and Asian/Pacific Islander residents throughout California by adopting and implementing CTR. The title 6 complainants ask EPA to require, as a condition of continuing to provide federal financial assistance to ARB, that ARB reverse its decision to approve the CTR and adopt less discriminatory alternatives.  It is impossible to say how or when EPA will respond. 

Forecast:  ARB will continue to try to implement CTR on schedule in spite of all legal flurries. 

A lot is at stake now.  Under the CTR, ARB plans to conduct its first auction of GHG allowances in November of this year, which could raise tens of millions of dollars. Starting January 1, 2013, refineries, power plants and other major GHG sources throughout California must properly account for all of their GHG emissions and later surrender qualifying GHG allowances and/or GHG offsets to ARB for every ton of GHGs emitted during the first compliance period (2013-14).  Later this month, ARB plans to link its CTR to a similar program in the Canadian Province of Québec.  Please see the June 11, 2012 ARB Notice.

But all regulated and other interested parties are left with new questions about how these legal winds may affect:

•    The willingness of regulated companies and GHG traders to bid tens of millions or more for GHG  allowances at ARB auctions.
•    The willingness of other states to adopt cap-and-trade programs and link them to the ARB CTR.  U.S. states are now vulnerable to federal title VI complaints as soon as they adopt their own cap-and-trade programs.
•    The ability of ARB to contain the costs of AB 32 and minimize leakage by adopting the CTR and linking it to other cap-and-trade programs, as provided by AB 32.
•    The continued ability of California to maintain its own climate program and achieve its climate goals.

It surely looks like more westerlies are approaching the CTR on the legal radar.

There’s More to Solutia Than Meets the Eye

Posted on June 25, 2012 by John Barkett

CERCLA practitioners are familiar with the Eleventh Circuit’s decision in Solutia, Inc. v. McWane, Inc., 2012 WL 695007 (11th Cir. Mar. 6, 2012).  The court of appeals decided that Solutia  & Pharmacia, the plaintiff, was limited to a contribution action for costs incurred in cleaning up lead contamination.  In so holding, the Eleventh Circuit agreed with three other circuits which have held that a person who enters an administrative or judicially approved settlement under Sections 106 or 107 of CERCLA are limited to a contribution claim under Section 113(f).  See Morrison Enter., LLC v. Dravo Corp., 638 F.3d 594, 603 (8th Cir.2011); Agere Sys., Inc. v. Advanced Envtl. Tech. Corp., 602 F.3d 204, 229 (3d Cir.2010), and Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 128 (2d Cir.2010).

While Solutia’s holding is significant, the decision provides an important reminder of the importance of foresight in the outcome of a claim.  Let me explain.

Solutia & Pharmacia had entered into a Partial Consent Decree (PCD) in August 2003.  The PCD referenced two areas of contamination, a PCB site and the “Anniston Lead Site.”  Solutia and Pharmacia reserved their rights in the PCD to seek contribution from parties who could be proven to be liable for the Anniston Lead Site.

In 2005 EPA undermined Solutia & Pharmacia’s reserved contribution rights.  It entered into settlements with a number of parties that provided contribution protection for lead-related cleanup costs.  By motion, Solutia & Pharmacia protested EPA’s action.  The trial court agreed and offered to suspend their obligations under the PCD because of EPA’s breach.  By either inaction or conscious decision, Solution & Pharmacia declined the offer.

In 2006, EPA and Solutia & Pharmacia entered into a “Stipulation Clarifying the Partial Consent Decree.”  Under the Stipulation, Solutia & Pharmacia agreed to clean up certain “zones” around Anniston, labeled as A, B, C, and D, which were contaminated with lead and not just PCBs.   The Stipulation provided that “it shall not be considered an admission of liability and is not admissible in evidence against the Defendants in any judicial or administrative proceeding other than a proceeding by the United States.”

Solutia & Pharmacia argued that because lead contamination was excluded from the PCD, it had a Section 107 claim for its lead-related cleanup costs.  Had the case turned just on the PCD, Solutia & Pharmacia would have been in the same position as Texas Instruments in Agere Sys., Inc. v. Advanced Envtl. Tech. Corp.—even though it signed one consent decree for which it was limited to a contribution action, costs it incurred unrelated to that consent decree could be pursued under Section 107(a).  

The court of appeals, however, agreed with the district court that the Stipulation obligated Solutia & Pharmacia to clean up areas where PCBs were commingled with hazardous substances disposed of the defendants.  Hence the PCD, which was “clarified” by the Stipulation, embraced costs associated with more than remediation of PCBs limiting Solution & Pharmacia to a contribution claim for those costs.

But what of the prohibition on admissibility of the Stipulation into evidence in any judicial proceeding that did not involve the United States?  The prohibition is not self-executing; the Stipulation was admitted in the district court and relied on heavily.  Solutia & Pharmacia apparently decided to wait until its reply brief to argue nonadmissibility.  That was too late.  Because admissibility of the Stipulation was not contested in Solutia & Pharmacia’s opening brief, the argument was waived, the court of appeals held.

The defendants in the action had been awarded summary judgment in the trial court because they had contribution protection from lead-related cleanup costs.  However, Solutia & Pharmacia had spent $14 million in cleanup costs in areas that were not covered by the PCD.  It filed a motion to alter or amend the judgment because the defendants had not sought a summary judgment with respect to these costs.  The argument was rejected in the trial court because it had not been raised before entry of the summary judgment. 

The court of appeals affirmed this exercise of the trial court’s discretion because the defendants’ motion for summary judgment, in fact, had sought dismissal of all of Solutia & Pharmacia’s Section 107 claims, and Solutia & Pharmacia had never argued prior to the grant of summary judgment that they “voluntarily incurred costs unrelated to the Consent Decree.”

The burden is always on counsel to make and preserve arguments.  This is as much a lesson from Solutia as its holding on the Section 107/113 issues.

Dear EPA: please don’t abandon your Audit Policy!

Posted on June 22, 2012 by Linda Bochert

If you have ever helped a client gain the enforcement protections available under the EPA Audit Policy, be concerned: EPA is reducing its Audit Policy work effort to a “minimal national presence”. 

Why?  Resources, of course.  EPA has too much to do and too few people to do it.  As part of the FY 2013 Office of Environmental Compliance Assurance National Program Manager Guidance (OECA NPM), EPA evaluated what it does in light of tightening budgets and overall agency priorities.  The EPA Audit Policy came up short:  it has resulted in a significant number of annual disclosures, but they are not in the areas of highest priority, and the agency believes traditional enforcement yields greater benefits.

EPA adopted the Audit Policy in 1995 and updated it in 2000.  It incentivizes regulated entities to conduct audits, timely self-disclose violations, promptly correct, and put in place systems to avoid repeats.  If you do that, any penalty EPA might otherwise apply – for the “gravity” of the violation, or to recover any “economic benefit” gained from noncompliance – can be forgiven.  Everyone wins – EPA gets compliance and compliance evaluation systems that protect against future violations; the business gets the certainty and comfort of knowing that if it looks for and finds noncompliance, it won’t be harmed financially; and the public gets the benefit of the environmental improvements.

EPA solicited comments on draft OECA NPM Guidance through March 19, 2012.  On April 30, 2012 EPA adopted the final FY 2013 OECA NPM, which included the following at page 15:

Audit Policy/Self-Disclosures: Since implementation of the Audit Policy began in 1995, EPA‘s enforcement program has increased its understanding of environmental compliance auditing, and believes that internal reviews of compliance have become more widely adopted by the regulated community, as part of good management. In addition, EPA has found that most violations disclosed under the Policy are not in the highest priority enforcement areas for protecting human health and the environment. EPA believes it can reduce investment in the program to a limited national presence without undermining the incentives for regulated entities to do internal compliance reviews to find and correct violations. As we reduce investment in this program, EPA is considering several options, including a modified Audit Policy program that is self-implementing.4(emphasis added)

4 Note: To meet the agency wide schedule, the final OECA NPM Guidance is being issued now, although we have not completed discussions on the content and schedule for the budget adjustments portion of the Guidance. Some of the budget adjustments outlined in this final guidance may be revised as we continue work on implementation plans.

I choose to read this to mean it’s not too late to let EPA know what we think. If the planned cutbacks are enacted, they will go into effect for FY 2013, i.e., on October 1, 2012.  Creative ideas for ways EPA can address its resource issues and keep the Policy active and vibrant are needed now.

We all recognize the challenges of diminishing resources, changing priorities, and committed constituencies.  Regardless, if you agree with me that the Audit Policy has been and  should continue to be a valuable tool in the compliance toolbox – for industry, EPA and the public -- and want to let EPA know that, please contact me.  Let’s see how ACOEL members can constructively contribute to this discussion. 

Encouraging the Use of Abandoned Coal Mine Drainage for Hydraulic Fracturing in Pennsylvania through a Good Samaritan Statute

Posted on June 21, 2012 by Chester Babst

The development of natural gas shale formations, such as the Marcellus and the Utica in Pennsylvania, Ohio and West Virginia, requires reliable sources of water for hydraulic fracturing that makes gas extraction from tight shale possible.  In Pennsylvania―a state with relatively plentiful ground and surface water sources―there are water sourcing challenges presented by various regulatory frameworks as well as withdrawal limitations in sensitive headwater areas of the state that coincide with current oil and gas activities. 

One alternative to using fresh water for hydraulic fracturing is the use of water supplies affected by acid mine drainage (AMD), which are also plentiful in Pennsylvania.  While the use of AMD by the oil and gas industry offers many potential benefits, operators are reluctant to become entangled in long-term liabilities created by the current legal framework for such pre-existing contamination.

Recognizing the need to encourage the treatment of abandoned AMD, Pennsylvania adopted the Good Samaritan Act, 27 Pa. Cons. Stat. §§ 8101 et seq., in 1999 to provide liability relief for various stakeholders, volunteers and watershed groups to undertake cleanup efforts of pre-existing contamination from AMD.  One recent legislative proposal would amend the Act to allow relief from liability for the use of mine drainage, mine pool water, or treated mine water for the development of a gas well.  This amendment, which has bi-partisan support in the Pennsylvania legislature, provides relief from third party claims as well as enforcement under various liability schemes.

On a parallel track, the Pennsylvania Department of Environmental Protection (PADEP) has been investigating means by which it could encourage the use of AMD by oil and gas operators.  See PADEP’s draft White Paper: Utilization of AMD in Well Development for Natural Gas Extraction, November 2012.  PADEP is engaging in ongoing discussions with stakeholders regarding possible processes and solutions for the treatment, storage, and liability issues associated with such an undertaking. 

At the federal level, the United States Environmental Protection Agency (EPA) has developed a Good Samaritan Initiative to protect volunteers from liability for the remediation of drainage from abandoned hard rock mines.  EPA’s program, however, does not encompass coal mine drainage, which is the primary source of AMD in Pennsylvania.  Short of legislative changes to the Clean Water Act or CERCLA to protect operators from potential liability, an expansion of EPA’s initiative to encourage the use of AMD for hydraulic fracturing in Pennsylvania would provide greater confidence to the oil and gas industry that both state and federal agencies are willing to provide appropriate relief to encourage the use of AMD.

While it seems like a win-win-win for the environment, industry and the Commonwealth, it remains to be seen if workable solutions will be found to encourage the use of AMD while limiting long-term liability related to that use.

Consultation Under the Endangered Species Act on the Klamath River

Posted on June 15, 2012 by Larry Ausherman

The Ninth Circuit’s en banc opinion in Karuk Tribe of California v. United States Forest Service belongs on your summer reading list.  It holds your attention on two levels.  First, the majority broadly construes consultation requirements of the Endangered Species Act (“ESA”) in the context of mining in National Forests.  Then, the dissent provides a memorable critique of “extreme environmental decisions” by the Ninth Circuit.

The case applies the ESA to regulation by the United States Forest Service of small-scale gold mining on the Klamath River in the Klamath National Forest in northern California.  The river is critical habitat for endangered salmon, and the river’s bed also contains gold deposits that are mined by miners who hold rights under the General Mining Law of 1872.  Mining methods include suction dredging of the river bed, and views differ about the effects of mining on the salmon.  The Forest Service mining regulations at issue divide mining activities within National Forests into three categories:  those that “will not”, “might,” and “will likely” cause significant disturbance of surface resources.  For planned mining activities that either “might” or “will likely” cause such disturbance, the miner must file a notice of intent to operate (“NOI”).  After reviewing the NOI, the District Ranger determines whether a plan of operations is also required.  A plan of operations is more detailed than an NOI and is required only for mining that “will likely” cause significant surface resource disturbance.  If the Forest Service determines that significant surface disturbance is not likely, the NOI satisfies the requirements of the regulations.  But the ESA may impose additional requirements.  It requires the Forest Service to consult with the Fish and Wildlife Service before taking discretionary “agency action” that “may affect” a species listed as threatened or endangered.  Otherwise, consultation is not required. 

The fundamental issue in Karuk Tribe is whether a Forest Service decision not to require a plan of operations was “agency action” requiring consultation under the ESA or mere agency inaction that does not require consultation.  Several miners filed NOIs for proposed operations, and in response to the NOIs the District Ranger essentially imposed conditions but decided not to require plans of operations.  The Ranger did not consult the United States Fish and Wildlife Service in reaching that decision.  The Karuk Tribe sued the Forest Service and asserted consultation was required.  The Forest Service defended its failure to consult by arguing that the NOI was a mere notice and its action on the NOI was only a decision not to regulate, rather than “agency action” under the ESA.  The district court ruled in favor of the Forest Service.  In 2011, a divided panel of the Ninth Circuit affirmed the district court’s holding that such consultation was not required because the District Ranger’s decision was not “agency action” under the ESA.  But upon rehearing the case en banc, the court reversed its previous decision and found that the District Ranger’s decision rose to the level of “agency action” and triggered consultation requirements of the ESA.  The court reasoned that the decision was agency action because when the Forest Service considered the NOIs, it affirmatively authorized mining to proceed and the mining may affect the salmon. 

The dissenting opinion is essential reading for lawyers who have represented clients entangled in extensive environmental regulation.  It ventures well beyond the issues presented by Karuk Tribe to criticize various Ninth Circuit environmental decisions as “extreme”.  Featuring art and prose from Gulliver’s Travels, and invoking works of Dante and Aldous Huxley, the dissenting opinion urges that the court exercise judicial restraint in construing environmental laws.  Finally, the dissent recounts specific examples of harm to employment, industry, and local government that it attributes to the court’s creation of “burdensome, entangling environmental regulation out of the vapors”.  You might take this one to the beach as long as your destination is not the Island of Lilliput.

Update On The World's Largest Environmental Judgment

Posted on June 14, 2012 by Mark Walker

A lot has happened over the year since I first reported on the world's largest environmental judgment (see my 4/15/11 post).  Back then, U.S. District Judge Lewis Kaplan (S.D.N.Y.) had just preliminarily enjoined the enforcement of the $18.2 billion judgment against Chevron (Aguinda v. Chevron) for alleged pollution to the Amazon rainforest.  Judge Kaplan had ruled that the judgment was likely procured by fraud and was the product of a corrupt Ecuadorian judicial system.

On September 19, 2011, the Second Circuit vacated the preliminary injunction, later explaining that Chevron did not have the right to bring a preemptive lawsuit in New York seeking to have the judgment declared unenforceable where the judgment creditors were not seeking to enforce the judgment in New York.  The Court also expressed concerns about international comity, questioning the right of a New York court to declare another country's judicial system corrupt and then prohibit enforcement of its judgments in every country throughout the world. Chevron has petitioned the U.S. Supreme Court to overturn the Second Circuit's ruling.

On January 3, 2012, the Aguinda judgment was affirmed by an Ecuadorian intermediate appellate court.  The case now heads for its last leg of appellate review - to Ecuador's highest court, which will only review for legal errors.  However, the judgment is now enforceable unless a stay is obtained.

In January and February of 2012 the Permanent Court of Arbitration at the Hague issued a series of rulings directing Ecuador to take all measures necessary to suspend the recognition and enforcement of the judgment, both within and without Ecuador.  Chevron initiated the arbitration asserting that the judgment violates the Bilateral Investment Treaty between the U.S. and Ecuador.  In particular, Chevron contends that the judgment violates a 1995 settlement agreement between Ecuador and Chevron's predecessor, Texaco Petroleum (TexPet), under which TexPet spent approximately $40 million remediating pollution and funding various community development projects, for which TexPet received a full release of claims from Ecuador in 1998.

In March of 2012 the Ecuadorian judge who rendered the judgment against Chevron was removed from the bench for alleged corruption, as was another judge who had previously presided over the Aguinda case. 

In May 2012, Judge Kaplan ruled that Chevron's racketeering (RICO) claims against the attorneys and experts for the Ecuadorian plaintiffs can proceed in New York federal court.

Last Wednesday the Aguinda plaintiffs initiated collection efforts on the judgment in Canada.

Wow!  The plot continues to thicken.  I will keep you posted.

Section 316(b) of the Clean Water Act – Cooling Water Intake Requirements – UPDATE

Posted on June 12, 2012 by Philip Ahrens

Section 316(b) of the Clean Water Act requires that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.  EPA embarked on three rulemaking phases to implement the statutory requirements.

The latest rulemaking effort began on April 20, 2011 when EPA published a proposed rule to protect fish from being killed at water intake structures that withdraw at least 2,000,000 gallons of water per day from waters of the United States and use at least 25% of the water they withdraw exclusively for cooling purposes.  The proposed rule resulted from a request by EPA to the Fifth Circuit to take back portions of its cooling water rule relating to existing facilities (ConocoPhillips v. EPA, 5th Circuit No. 06-60662, July 23, 2010).  Pursuant to a Settlement Agreement with the environmental group Riverkeeper and other organizations, EPA is required to issue the revised rule by July 27, 2012.

EPA has just published notice in the Federal Register presenting a summary of the significant new information and data EPA has received since its April 20, 2011 proposal and a discussion of possible revisions to the final rule that EPA is considering that were suggested by the data and comments.  77 Fed. Reg. 34315 (June 11, 2012)

During the comment period on the April 20, 2011 draft rule, EPA received more than 1,100 comment letters.  It also received more than 80 documents containing new impingement and entrainment data for possible use in developing the final impingement mortality limitations. 

EPA has now made the submitted information available for public review and has offered a 30-day comment period on the new information the agency will consider in making its decision on the final rule.  Comments must be received on or before July 11, 2012.

A second key part of the Section 316(b) rulemaking, scheduled for publication on June 12, is a Notice of Data Availability which summarizes from a stated preference survey conducted by EPA after the April 20, 2011 proposed rule was published.  EPA likewise is expected to allow a 30-day comment period on the preference survey summary and results.

To quote from the pre-publication version of the Federal Register notice, “. . . a stated preference survey attempts to gauge the value of an item through questions designed to mimic consumer decision-making in actual markets.  . . . The stated preference survey estimates the value held by the public for ecosystem improvements based on the choices the surveyed members of the public make between hypothetical policy options and current conditions.”  EPA will solicit comment on all aspects of the study and the appropriate role, if any, the study should play in EPA’s Section 316(b) rulemaking proceeding.  EPA asks for comments even though it has not yet completed its statistical analysis of the survey data and is not in a position to determine whether the results of the survey will play a role in the benefits analysis for the final rule. 

Given these two federal notices and the 30-day comment periods ending in the second week in July, it is hard for me to understand how EPA is going to comply with the court-required issuance date of new rulemaking by July 27.  Stay tuned.

OREGON’S AMBITIOUS 10-YEAR ENERGY ACTION PLAN

Posted on June 8, 2012 by Rick Glick

On June 6, Oregon Governor John Kitzhaber released his draft 10-Year Energy Action Plan. Written comments on the draft plan may be submitted to tenyearenergyplan@odoe.state.or.us and accepted through July 31.  Three public workshops will be held at times and places to be announced. 

The plan consists of a broad range of goals for the state government, private sector and public-private collaboration to address what the Governor calls the:

fundamental challenge—that is, to develop a comprehensive energy strategy that meets the state’s carbon reduction, energy conservation and renewable energy goals and timetables, and that balances complex needs– including affordability and reliability – while enhancing Oregon’s economic objectives.

The plan seeks to build off of existing programs and redirect funding to advance its three central strategies, the details of which are to be developed through a lot of public participation:

1.  Maximizing energy efficiency and conservation to meet 100 percent of new electric load growth.  The plan is unclear as to when this goal would be achieved, but refers to the Northwest Power and Conservation Council’s goal of using conservation to meet new electric demand by 2020.  Key to implementing this goal is creation of a new State Building Innovation Lab.  The Lab would focus initially on improving efficiency in four million square feet of state office space and then using the Lab as a model and resource for others.
2.  Enhancing clean energy infrastructure development by removing finance and regulatory barriers.  Streamlining the siting process, including use of a strong project manager to help navigate state regulatory requirements, would bring certainty to developers of facilities.  Also, conducting planning on a “landscape level” would help to ensure protection of natural resources.
3.  Accelerating the market transition to a more efficient, cleaner transportation system.  Central to this goal, over the next ten years the plan would convert 20% of large fleets to electric, compressed or liquefied natural gas or other alternative fuel vehicles.

The plan is self-congratulatory on various initiatives already in place and reads like a compendium of good ideas on how to secure a clean energy future.  So ambitious a plan requires continual commitment over a long period of time—at the highest levels of state government—to keep it from becoming yet another plan on the shelf.  Such sustained effort of course is not assured. 

In the early 1980s I was chair of the City of Portland Energy Commission whose job it was to further develop the City’s Energy Conservation Policy, which at the time was seen as cutting edge.  Then as now, energy planning was a hot topic for policy makers.  Champions arise to push forward change.  In those days it was Mayor Neil Goldschmidt and Commissioner Mike Lindberg, today it is Governor Kitzhaber.  While Portland has made progress, many of the elements of the Governor’s plan echo what we were talking about back then.  I hope that the Governor builds a governance platform to continue work on the plan after he departs the scene.

Implementation of the plan depends on new legislation and regulatory reform among several state and local agencies.  Whether the plan can develop the consensus necessary to achieve such change will depend on how the details emerge over the coming months and the enthusiasm the plan can garner. 

Two Strikes Against Common Law Approaches to Climate Change: The Atmosphere Is Not A Public Trust

Posted on June 7, 2012 by Seth Jaffe

Last week, the District Court for the District of Columbia dismissed the so-called “public trust” climate change law suit. I will certainly give the plaintiffs in these cases credit for both originality and persistence. Legal merit and good public policy are another matter.

In any case, the plaintiffs sued EPA and various other federal agencies, seeking a finding that the agencies have failed adequately to protect a public trust asset, also known as the atmosphere, from climate change. The plaintiffs requested an injunction requiring that the agencies take actions necessary to reduce CO2 emissions by 6% yearly, beginning in 2013.

It did not take the Court long to dismiss plaintiffs’ arguments – and the case. The Court’s opinion has two critical holdings. First, since there can be no diversity action against the United States, the plaintiffs do not have access to federal courts unless there is a federal question. However, as the Court noted, the public trust doctrine is a creature of state law; there is no federal public trust doctrine.

Secondly, the Court concluded that, even if there ever had been a federal public trust doctrine, any such doctrine has been displaced by the federal Clean Air Act. Here, the Court relied squarely on the Supreme Court’s recent decision in American Electric Power v. Connecticut. The plaintiffs here tried to limit AEP to displacement of public nuisance claims, but the Court was having none of it, pointing out that AEP clearly stated that it was not federal public nuisance claims that were displaced by the CAA, but federal common law claims generally that were displaced.

Moreover, notwithstanding the plaintiffs’ creativity, the Court noted that:

"The question at issue in the Amer. Elec. Power Co. case is not appreciably different from the question presented here—whether a federal court may make determinations regarding to what extent carbon-dioxide emissions should be reduced, and thereafter order federal agencies to effectuate a policy of its own making. The Amer. Elec. Power. Co. opinion expressed concern that the plaintiffs in that case were seeking to have federal courts, in the first instance, determine what amount of carbon-dioxide emissions is unreasonable and what level of reduction is practical, feasible and economically viable."

And that really is the issue. Even if one believes that the government should be taking more aggressive action on climate change – and I certainly am among those who think it should be doing so – having the courts decide what level of reductions are necessary, and by when, is nuts. It’s just not a way to make public policy on the most complex environmental issue of our time.

Back to the drawing board for citizen plaintiffs. I can’t wait to see what they come up with next.

NJDEP Site Ranking Letter and Draft Data Forms Will Require Prompt and Careful Attention

Posted on June 7, 2012 by William L. Warren

Significant consequences may result from the upcoming remedial priority ranking of approximately 12,000 contaminated sites by the New Jersey Department of Environmental Protection (NJDEP).  In mid-May NJDEP initiated its formal communications with parties responsible for contaminated sites by sending data forms that identified the information that NJDEP will use to compute the remedial priority rankings of most contaminated sites.  After about a 90 day review and comment period, NJDEP will rank all of the sites on a scale from 1 to 5, with “1” being the “lowest risk potential” and “5” being the “highest risk potential.”  Within about sixty days of receipt of the data form, each recipient will have to register with the NJDEP to preserve its right to submit comments.  Only the Licensed Site Remediation Professional (LSRP) for the site, required to be retained by responsible parties by May 7, 2012, may submit the actual comments on the data form.  NJDEP intends to publish site rankings in the Fall and to update the rankings quarterly commencing in 2014, as more data becomes available for each site during the course of remediation.

NJDEP originally planned to publish draft site rankings and submit the rankings for comment.  However, it decided to issue these draft forms instead, explaining that it wanted to focus its efforts on giving parties the opportunity to make sure that it had up-to-date site remediation information before it calculated the site ranking.
NJDEP’s ranking will be based on:

• risk to the public and the environment;
• length of time the site has been undergoing remediation;
• economic impact; and
• other factors deemed relevant.

I.  Why Is NJDEP Ranking Sites, and How Will Sites Be Affected by the Ranking?

Besides a long overdue statutory obligation to rank contaminated sites, NJDEP wants to insure that the sites with the highest potential risk are being remediated.  Although nothing is certain, NJDEP likely will not take any action, even if a site is highly ranked, so long as:

• the site is undergoing active remediation;
• no enforcement actions have been commenced; and
• an LSRP has been retained.

However, if the remediation is not proceeding in compliance with these criteria, a high ranking may cause NJDEP to place the site under its “Direct Oversight,” and “Direct Oversight” is not a place that most responsible parties want to be. (See Section III. below)  It is also true that a highly ranked site, even if not placed under NJDEP “Direct Oversight,” is more likely to receive public scrutiny and potential adverse publicity than is a lower ranked site.  NJDEP, the United States Environmental Protection Agency (USEPA) and legislators constantly receive requests from environmental groups and others to take remedial action or investigate the progress of a remediation.  Undoubtedly, a site with a high ranking is a target for future attention, especially because NJDEP will be posting the rankings on its website.

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NJDEP Site Ranking Letter & Draft Data Forms Require Attention.pdf (30.02 kb)

Stormwater Permits for Logging Roads? Muddied Waters.

Posted on June 4, 2012 by David Van Slyke

So let me get this straight.  In Northwest Environmental Defense Center v. Brown, the United States took the position (as an amicus) that, under EPA’s long-standing silviculture rule, NPDES permits are not required for stormwater runoff from logging roads that ends up in ditches and culverts, and that such runoff is not associated with industrial activity.  The 9th Circuit rejected that position and a number of parties (not including the United States) combined to file two different petitions for certiorari with the Supreme Court. 

But in its subsequent amicus curiae brief to the Supreme Court, the United States urged the Court to reject the cert petitions -- despite continuing to insist that, on the merits, the 9th Circuit erred by not giving deference to EPA’s interpretation of its own regs.   The United States’ rationale?  Three in number:  (1) “no square circuit conflict exists;” (2) Congress has placed a short term (through September 30, 2012) moratorium on EPA implementation of the 9th Circuit decision and bills (H.R. 2541; S. 1369) on the issue are pending in both houses of Congress; and (3) EPA issued a Notice of Intent (the day before the United States filed its amicus brief) that it planned to amend its Phase 1 stormwater rules to clarify that stormwater discharges associated with logging roads did not require an NPDES Permit. 

So, er, um, the timber industry should hope that the Congressional moratorium gets extended…, or one of the bills pending before Congress providing relief on this topic gets enacted…, or EPA puts its nascent rulemaking efforts into overdrive to promulgate amended Phase 1 Stormwater rules before the moratorium expires or a bill is enacted…, or the Court rejects the United States’ position, hears the case and provides some guidance. 

The road ahead is muddy, at best.   

Fiddling While Rome – and the World – Burns: An Update on Climate Change

Posted on June 1, 2012 by Jeff Thaler

How can each of us leave the world to our children and grandchildren at least as healthy as when we were born? How can we more quickly move from fossil-driven economies to ones more based on renewable sources, in an increasingly carbon-stressed world? And how can policy makers, at various governmental levels, make changes in how energy projects are evaluated and developed before we use up too much of the atmosphere’s and oceans’ capacities to safely absorb carbon dioxide?

These and similar questions were tackled at two recent conferences in which I participated: a small climate change justice forum at Chicago Law School, and the much larger World Renewable Energy Forum in Denver. In Chicago, participants tackled approaches to bridging the who-pays-how-much gap between developing and developed nations – should it be per capita, or total carbon shares based on past emissions (if so from when), or a polluter-pays approach bridging past and future (next 20 years) CO2 emissions? Some say the US should pay less than China and India, others say more. Ultimately, all agreed that human-induced climate change is the single greatest threat facing human society—not just environmental, but also posing huge economic, public health, and military security costs.

Denver discussions focused on how to quickly increase the amount of renewable energy used for electricity, heat and transportation. My presentation, “U.S. Renewable Law and Policy: Catch Up or The Clock Strikes Midnight”, provided an overview of existing and predicted impacts from the still-increasing carbon dioxide emissions accumulating in our air and oceans; a comparison of the direct and indirect costs of different fossil and renewable energy sources; a summary of the permitting and regulatory hurdles facing renewable energy projects; and a roadmap to level the regulatory playing field to help renewables catch up.
Brief high (or low) lights: In April 2012, the International Energy Administration warned that, under current policies, energy use and CO2 emissions will increase by a third by 2020, and almost double by 2050 – sending global temperatures at least 6⁰C higher. What would the world look like with such an increase?

What are the “true” costs of energy to be factored into pricing?  In 2009, the National Research Council’s “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use” estimated in 2005 dollars (higher now) that non-climate damages from our use of fossil fuels exceed $120 billion, with climate damages possibly being equally as large – and both numbers exclude ecosystem, infrastructure, insurance,  and national security costs.

Those bucks stop with each of us and this generation.