Strange Bedfellows: Environmental Defense Fund Collaborating with Energy Companies!

Posted on October 31, 2013 by LeAnne Burnett

Just like claims of fire from garden hoses and water contamination from hydraulic fracturing (“frack”) fluids, engineering estimates of the magnitude of methane emissions from natural gas production have varied widely, leading natural gas production opponents to face-off with energy companies.  Fortunately concrete steps are now being taken to bring science to bear to help narrow the gap between the two sides.  These steps come in the form of a joint project that actually measures methane emissions.  Imagine! Cooperation, collaboration, and ditching polarizing polemics to find out what is really going on! 

The first of 16 planned studies directly measured methane emissions at natural gas production sites in the United States.  The Proceedings of the National Academy of Sciences has recently published the first results.  These studies represent an organized effort among the Environmental Defense Fund, nine participating energy companies (Anadarko Petroleum Corporation; BG Group plc; Chevron; Encana Oil & Gas (USA) Inc.; Pioneer Natural Resources Company; SWEPI LP (Shell); Southwestern Energy; Talisman Energy USA; and XTO Energy, a subsidiary of ExxonMobil), an independent Scientific Advisory Panel and a study team from University of Texas, Cockrell School of Engineering.  Dr. David Allen of the University of Texas at Austin led the study effort.  Previous greenhouse gas emission analyses have been based on either engineering estimates or measurements made 100 meters to a kilometer downwind of the well site.  The studied methane emissions are associated with 190 sites where unconventional natural gas production, specifically fracking, is used. 

Uncommon features of this study are first and foremost the unique and perhaps anomalous partnership between the Environmental Defense Fund and energy companies, particularly given the adversarial relationship that has historically characterized the relationship between the environmental community and the energy industry.   Second, the energy companies provided the study team direct access to 190 natural gas production sites so measurements could be taken directly at the source.  Third, for several source categories, such as well completion operations, these data are the first reported direct, on-site methane emission measurements.  The full data set, along with significant additional information, is now available online.

As an idea of one metric, the Environmental Protection Agency (“EPA”) current national inventory estimates well completion emission reductions at roughly one-half of potential emissions.  This new study shows net or measured emissions for the total of 27 completions were 98% less than potential emissions.  The large difference between the net emissions measured by the study and the net emissions estimated in the national inventory is due to several factors, including that emerging regulatory requirements and improved operating practices meant 67% of the wells sent methane to sales or control devices.  For those wells with methane capture or control, 99% of the potential emissions were captured or controlled.  And the wells with uncontrolled venting of methane had much lower than average potential to emit (0.55% of the average potential to emit in the national inventory).

Pragmatic environmentalists should welcome the studies as an aid to balanced decisions about energy choices facing the United States.  Both gas boom critics and advocates now have rigorous scientific analysis to work with when considering regulation.  Armed with knowledge rather than speculation, what a novel way to approach policy and regulation!

Grant of Certiorari in Greenhouse Gas Regulation Litigation: Limited But Important

Posted on October 30, 2013 by David Buente

Of the 21 separate questions presented in the 9 petitions for writ of certiorari filed in the U.S. Supreme Court in Utility Air Regulatory Group et al. v. Environmental Protection Agency et al., challenging nearly every aspect of the Environmental Protection Agency’s recent greenhouse gas regulations—from the initial “endangerment” finding to the restriction on motor vehicle emissions to the stationary-source permitting requirements—the Court granted review of only a single issue:  “[w]hether [EPA’s] regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.”  Several commentators have interpreted this decision (reported in a prior post by Theodore Garrett) as an implicit affirmation of EPA’s regulatory regime, insofar as the Court chose not to address some of the broader challenges to the agency’s basic authority to regulate greenhouse gas emissions under the Clean Air Act.  But, whatever implications might be drawn from the Court’s decision not to grant review of certain issues, far more telling is the Court’s deliberate rewriting of the question presented, narrowly tailored to address the validity of the stationary-source permitting regulations.

Those regulations rest on an exceedingly questionable interpretation of the Clean Air Act.  The stationary-source provisions of the Act require any industrial facility that emits an “air pollutant” in “major” amounts—defined by the statute as 250 or more tons of the pollutant per year—to obtain pre-construction and operating permits from the local permitting authority.  42 U.S.C. § 7475.  EPA acknowledges that it would be “absurd” to apply these provisions by their terms to sources of greenhouse gas emissions, since nearly every business in the country (including even small commercial enterprises and residential facilities) emit greenhouse gases at more than 250 tons per year, and the agency can offer no reason why the statute should not be interpreted instead to apply only to the large industrial facilities that emit “major” amounts of a pollutant otherwise subject to regulation under the permitting provisions—i.e., one of the so-called “criteria pollutants” for which a national ambient air quality standard has been issued.  Nevertheless, EPA has interpreted the statute to apply to sources of greenhouse gas emissions and, to address the acknowledged “absurd results” created thereby, has decided that for these purposes the threshold for a “major” emissions source should be increased from 250 tons per year—as stated in the statute—by 400-fold, to 100,000 tons per year.  The agency has, in other words, literally rewritten the express terms of the statute in order to justify its preferred interpretation.

The dissenting judges in the D.C. Circuit severely criticized the result.  That is most likely the reason the Supreme Court granted review of the case, to correct the agency’s  interpretation of the Act and ensure that neither EPA nor other agencies attempt to redo legislative power in this way in the future.  Whether or not the limited nature of the certiorari grant can be viewed as an approval of EPA’s authority to regulate greenhouse gases from mobile sources, it almost certainly reflects suspicion—if not disapproval—of the agency’s stationary-source regulations.  The definitive answer should come by June 2014, when the Court is expected to rule. 

Brownfields Redevelopment in Kentucky – What’s Next?

Posted on October 24, 2013 by Carolyn Brown

Last year the Kentucky legislature passed a bill that was designed to make it easier for blighted property to be redeveloped.  The intended targets of the legislation were old gas station sites and similar vacant properties in communities around that state.  The goal of the legislation was to encourage redevelopment of these parcels by providing relief from liability under the Kentucky statutes for cleanup of releases of hazardous substances and petroleum for the new owner.  The new owner must meet certain requirements and implement a property management plan so that use of the property will not interfere with the site remedy or result in increased impacts or unacceptable risks to human health and the environment.  The legislation was codified at KRS 224.1-415 and the Kentucky Energy & Environment Cabinet’s Division of Waste Management was charged with development of implementing regulations.

The Division has proposed three implementing regulations that are currently out for public comment with a public hearing set for October 23rd:  401 KAR 102:005 Definitions, 401 KAR 102:010 Brownfield Redevelopment Program, and 401 KAR 102:020 Property Management Plan Requirements. 

Key aspects of the proposal are:

Scope of the relief and eligibility – The program provides protection from obligations under state law to investigate, characterize and correct the impact of releases including contamination associated with petroleum storage tanks.  Both current and prospective property owners can use the program.

Application procedures – The applicant must complete the Brownfield Liability Relief Eligibility Form (DEP 6056) and must certify among other things that:

•    The release occurred prior to the applicant’s acquisition of the property and that the applicant made all appropriate inquiries into prior ownership and use of the property;
•    The applicant, or a responsible party, gave all legally required notices;
•    The applicant is in compliance with all land use restrictions and will not impede or disturb any remedial measures for the site and has complied with agency information requests;
•    The applicant did not cause or contribute to the release and is not affiliated with any potentially liable party.

A property management plan and an application fee of $2,500 are also required.

The Division will review the application and advise the applicant in writing of its determination.  A Notice of Eligibility is issued to applicants who do not yet hold legal title to the property.  The Notice of Eligibility is effective for 180 days, with the possibility of an extension of up to a year, from the date of the all appropriate inquiry.  The Notice of Eligibility is essentially a bridge to a Notice of Concurrence.  The Notice of Concurrence is issued to applicants that hold legal title to the property and contains the Division’s finding that the applicant will not be liable for characterizing or correcting the effects of the releases that have resulted in contamination of the site.   This relief is granted only with respect to the releases covered by the certification in the application.  If new releases are discovered after the acquisition and after the issuance of a Notice of Eligibility or Notification of Concurrence, the owner may still be eligible for the statutory protections.  To qualify, the owner must give timely notice and must satisfy the same certification requirements for the newly discovered release as were addressed in the initial application.

Property Management Plan (PMP) requirements – Under the proposal, the PMP must describe the intended use of the property, provide all available information about the known releases, areas of potential releases, a description of all controls or remedial actions that are in place or proposed for the site and a schedule to periodically inspect and report to the agency that the controls remain in place and effective.  The plan must be certified by a licensed professional engineer or geologist.  Amendment of the plan is required if it is found to be inadequate.

Concluding thoughts - The program should have a positive impact on redevelopment of long vacant gas station and similar sites throughout the state.  The liability protection from state obligations is significant and may provide solace to otherwise reluctant lenders.  However, ease of implementation of the application process and approval of PMPs will be critical to actual success.  As always, the devil is in the details.

USEPA Proposes Revisions to the Water Quality Standards Program Under the Clean Water Act

Posted on October 23, 2013 by Kevin Beaton

On September 4, 2013 EPA published proposed changes to its Water Quality Standards Rule at 40 CFR Part 131 (WQS Rule).  The proposal is styled “regulatory clarifications” but the proposal represents the most significant changes made to the WQS Rule in some thirty years.  The WQS Rule currently sets forth the minimum conditions that must be met in each State’s or Tribe’s water quality standards before EPA can approve them under the Clean Water Act (CWA).  Increasingly over the years, state water quality standard decisions have been the driver behind required stringent permit limits in NPDES Permits, TMDLs for impaired waters and lawsuits against EPA.  The proposed rule is mostly an attempt to codify exciting EPA guidance and practices to ensure national consistency and “transparency.”  Many of the proposed changes were generally discussed in EPA’s Advance Notice of Proposed Rule Making (ANPRM) on water quality standards published in 1998 and many come from the Great Lakes Water Quality Guidance at 40 CFR Part 132.

First EPA is proposing to amend the use attainability analysis (UAA) requirements found in the current rule to now require a state or Tribe to identify the highest attainable use (HAU) and the water quality criteria to protect the HAU in any UAA.  A UAA is a structured analysis a State or Tribe can undertake to attempt to demonstrate to EPA that the so called “fishable and swimmable” uses required under the CWA are not attainable based on a number of factors.  These factors include low flows, natural or physical conditions, human caused conditions which cannot be remedied, dams, or because controls to achieve attainment would be too expensive.  At least in the Northwest, EPA have been very reluctant to approve UAAs because the agency has a “rebuttable presumption” that fishable uses and swimmable uses are attainable (some might call it an irrebuttable presumption) and implicitly that it is never too expensive to remedy water quality problems.  Requiring states and Tribes to also adopt a new HAU in connection with a UAA along with associated criteria may make the UAA an even less viable CWA off-ramp.

Speaking of off-ramps, the proposed rule also sets forth the conditions under which a state or Tribe can adopt “variances” to water quality standards for individual or groups of NPDES permittees.  Variances are merely referenced in the current WQS Rule and have been viewed as a “UAA lite.”  Variances are codified in water quality standards (subject to approval by EPA) and allow individual dischargers or groups of NPDES Permits to temporarily exceed water quality based effluent limits based on the same factors which justify a UAA.  EPA articulates in the proposal that it believes variances have been underutilized and therefore sets forth the conditions which the Agency will grant variances for an individual or groups of NPDES permittees.  (e.g. Demonstrate temporary unattainability, maximum timeline of 10 years and protect the HAU during the variance.)  Whether the proposal will lead to more variances may be doubtful.  EPA has typically been unwilling to approve variances for industrial or commercial dischargers (although they are more flexible with municipalities) because pollution controls to meet WQS are seemingly never too expensive.

As my colleague Patricia Barmeyer notes in her recent post, the proposed rule also proposes changes to antidegradation implementation procedures that are somewhat consistent with current practices and guidance by providing some flexibility in how states protect high quality waters and a specific requirement that states must first require dischargers to implement “practicable” pollution controls that minimize or eliminate any degradation to high quality before allowing the discharge.  “Practicable” is not defined but if this term is implemented in the same way as proving economic hardship in a UAA or variance then new and increased discharges could be subject to additional (and expensive) hurdles in going through antidegradation reviews.  Finally, the proposed rule addresses compliance schedules in NPDES permits consistent with current practice and specifies the conditions under which the EPA Administrator will make determinations that a water quality standard does not meet the requirements of the CWA.  Comments on the proposed rule are due on December 3, 2013 (unless an extension is granted).

Carbonless Copy Paper Does Not Always Produce a Carbon Copy

Posted on October 22, 2013 by Linda Benfield

In 2009, CERCLA practitioners were thrilled to finally have a new Supreme Court case to work and play with.  Even better, Burlington Northern & Santa Fe Railway Co. v. United States, 129 S. Ct. 1870 waded into the murky area of “arranger” liability.  However, two recent cases addressing the potential arranger liability of NCR for the same business practices but at two separate sites, and both relying on Burlington Northern, illustrate that in this area the Supreme Court has just given us more language to argue about.

Both cases addressed the same business arrangements:  NCR’s sale of a PCB emulsion to paper coaters, their sale of coated paper back to NCR, and the resulting contamination when recyclers deinked the paper and released PCBs into major water bodies from 1954 to 1971.  The cases even relied upon the same language from Burlington Northern – that “an entity may qualify as an arranger … when it takes intentional steps to dispose of a hazardous substance.” 

However, with respect to the PCB cleanup of the Fox River, the federal district court for the Eastern District of Wisconsin held that NCR had “knowledge alone” and was not liable as an arranger.  The court found that even though NCR knew that remnants - “broke” - contained the emulsion and released PCBs when recycled, “there was no evidence that NCR had any purpose in selling its emulsion to [a coater] other than to produce a commercially viable product.  Broke was simply not part of the equation.”  This court viewed the arrangements as the sale of a useful product. Appleton Papers Inc. and NCR Corporation v. George A. Whiting Paper Co.  Across Lake Michigan and 15 months later, the federal district court for the Western District of Michigan held the opposite - that NCR was liable as an arranger for the PCB cleanup of the Kalamazoo River.  The court focused on NCR’s efforts to encourage recycling of the broke, and found that “not later than 1969, NCR understood the  … broke .. was no longer anything but waste and was no longer useful to any paper recycler who understood the true facts as NCR did.” Georgia-Pacific Consumer Products LP, et al, v. NCR Corporation, et al.  Given the size of the cleanup bills in both rivers, keep an eye out for the appellate decisions.

Section 316(b) of the Clean Water Act – Cooling Water Intake Requirements – Update on EPA and State of Maine Actions

Posted on October 21, 2013 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.  Although the statutory language is straight-forward, EPA continues to face – and create – enormous difficulties in promulgating the rules to implement Section 316(b).

The latest in a series of rulemaking efforts 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 per day from waters of the United States and use at least 25% of that water exclusively for cooling purposes.  Pursuant to a judicial Settlement Agreement with the environmental group Riverkeeper and other organizations, EPA was required to issue the revised rule by July 27, 2012. 

When EPA was unable to issue its new rule by the court-approved date, it entered into a Second Amendment to the Settlement Agreement with Riverkeeper and other organizations.  That Agreement required that “Not later than June 27, 2013, the EPA Administrator shall sign for publication in the Federal Register a notice of its final action pertaining to issuance of requirements for implementing Section 316(b) of the CWA at existing facilities.” 

On June 18, 2013, nine days before the June 27 deadline for publication of notice of final action, EPA initiated Endangered Species Act (ESA) Section 7 consultation with the National Marine Fisheries Service and the Fish and Wildlife Service.  EPA has been criticized for many years for its failure to initiate Section 7 ESA consultation during rulemaking.  With the agreement of Riverkeeper and the other plaintiffs, a revised Settlement Agreement now allows a delay in the issuance of the final rule until November 4, more than four months after the June 27, 2013 deadline. 

Although the revised Settlement Agreement allows time for Section 7 consultation, it does not appear to allow time for review of the rule by the White House Office of Information & Regulatory Affairs. 

Given the delays that have been experienced to date on this rule, coupled with the delays engendered by the government shutdown, it seems doubtful that EPA will be able to meet the new November 4, 2013 deadline for issuance of its cooling water intake rule.  We shall see.

Live from California! The Safer Consumer Products Regulations Are Now In Effect

Posted on October 18, 2013 by Lynn L. Bergeson

The long awaited and highly controversial California Department of Toxic Substances Control (DTSC) Safer Consumer Products Regulations (SCPR) took effect October 1, 2013.  These are not your garden variety regulations.  They are intended to promote the inclusion in consumer products of chemicals deemed safer than the chemicals they are replacing and, by reverse logic, encourage the deselection of chemicals for inclusion in consumer products believed to pose risk to human health and the environment.

The regulations establish a four-step process whereby DTSC develops a list of candidate chemicals of concern, develops a list of “Priority Products” containing candidate chemicals, requires manufactures and other responsible entities to notify DTSC and assess potential product component alternatives, and implements regulatory responses that could result in mandated product reformulation or even product cancellation.  Certain “trade secret” provisions in the regulations are still being developed, important provisions considering the context of the regulations.

DTSC has created a Safer Consumer Products Web Portal and has posted, and will continue to add, information pertinent to the regulations and various guidance materials.  Litigation challenging the regulations is almost certain, arising under the California Environmental Protection Act, Administrative Procedure Act, and Commerce Clause, among other authorities.  Relying on a favorable outcome in any such challenge and doing nothing now is unwise, as success is at best speculative and more likely optimistic.

These are game-changing new rules.  They are certain to have a global impact on, and influence profoundly and forever, the supply chains of consumer product manufacturers, suppliers, and distributors.  Because the regulations are likely to become the new global standard against which prudent business practices regarding the manufacture, distribution, and marketing of consumer products will be measured, careful review is needed regardless of whether or not you are marketing consumer products in California.

Listen Up Federal Court Litigators! Proposed Changes to the Federal Rules of Civil Procedure

Posted on October 17, 2013 by John Barkett

The Federal Rules of Civil Procedure are 75 years old—they went into effect on September 16, 1938.  The Advisory Committee on Civil Rules has just published for public comment very significant changes to the FRCP.  Every environmental litigator—indeed, every litigator—should read them.  The changes are too numerous to outline completely in this blog posting, but let me highlight the proposed changes to the discovery rules.

Rule 26(b)(1), which addresses the “scope” of discovery, would be changed in three important ways.  First, discovery would be limited solely to matters relevant to a party’s “claim or defense” and the former text also permitting for good cause discovery of matters “relevant to the subject matter involved in the action” will be deleted.  Second, the word “proportionality” will be included in the scope of discovery.  The proportionality factors that were in Rule 26(b)(2)(C) will be included specifically in the scope of discovery in Rule 26(b)(1).  With the proposed change, discovery must be “proportional to the needs of the case considering the amount in controversy, the importance of the issues at stake in the action, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”  Finally, the text “calculated to lead to the discovery of admissible evidence” has been deleted.  The goal of this text originally was to make it clear that information like hearsay could be discovered since it might lead to discoverable admissible evidence.  But this language has been used by many courts to expand the scope of discovery beyond its original purpose.  In its place, the proposed rule will read: “Information within this scope of discovery need not be admissible in evidence to be discoverable.”

Rules 30 and 31 will be amended so that the presumptive limit of 10 depositions per side or for third parties and a duration limit of 7 hours for each deposition are reduced to 5 depositions per side with a maximum duration of 6 hours.  Rules 30 and 31 still would require the district court to grant leave to take more depositions as long as that outcome is consistent with Rules 26(b)(1) and (2) (currently the reference is just to Rule 26(b)(2)).  Parties can stipulate to have more depositions; there is no change there.  And parties can still stipulate to longer depositions and the court “must” still allow additional time “consistent with Rules 26(b)(1) and (b)(2)” (again Rule 26(b)(1) has now been added to this phrase) if needed to fairly examine the deponent, or if the deponent, another person, or any other circumstance impedes or delays the examination.

Interrogatories would be limited to 15 instead of 25 under a change to Rule 33 and for the first time requests for admissions under Rule 36 would be limited to 25 requests except as to the genuineness of documents.

With respect to responses to Rule 34 requests for production, Rule 34(b)(2)(B) would require that the grounds for objecting to a request be stated with specificity.  Rule 34(b)(2)(C) would then require that an objection state whether any responsive materials are being withheld on the basis of that objection.  But an objection can state that documents are not being searched if that is the case (e.g., that a search was limited to documents created after a specific date).  Where a party states that it will produce documents or electronically stored information instead of permitting inspection, the production must be completed no later than the time for inspection in the request or a later reasonable time stated in the response.  A corresponding change will be made to Rule 37(a)(3)(B)(iv) to provide that a party seeking discovery may move for an order compelling production if a party “fails to produce documents.”
 
There are other changes to Rule 26 and 37 as well as proposed changes to Rules 1, 4, and 16.  You can read them all on the website of the Administrative Office of the U.S. Courts.

As a member of the Advisory Committee on Civil Rules, let me also encourage readers to submit comments on the proposed rules if you believe the proposals can be improved upon or should not be implemented.  Commenting is easy.  Go to the link above and follow the instructions to “Comment Now!”  The comment period ends February 15, 2014.

Bad News in the Latest UN Report on Climate Change

Posted on October 16, 2013 by Larry Ausherman

The UN’s Intergovernmental Panel on Climate Change (“IPCC”) has more bad news for us.  Its long range forecast still looks hot, and the IPCC is more confident than ever that humans are largely the cause.  On Friday, September 27, the IPCC issued a Summary for Policymakers on the “physical science basis” of climate change.  This is the first part of the IPCC’s Fifth Assessment Report to be published.  The summary report contains numerous findings, but you may want to begin by thinking about five aspects of them.

    1.    It is “extremely likely” that we’re the culprit.  The IPCC observes that warming in the climate system is unequivocal.  But there has been debate about its cause.  Based on growing evidence, the report finds it is “extremely likely” that human influence has been the dominant cause of observed global warming since the 1950s.  In the IPCC’s previous report, issued in 2007, the IPCC was 90% certain of this conclusion.  Now it is 95% certain. 

    2.    We need a carbon budget.  For the first time, the IPCC takes a stab at calculating essentially a global limit on anthropogenic CO2 emissions.  Science has long estimated that a temperature rise of 2 degrees Celsius above the temperature of preindustrial times is the point after which the most damaging effects of global warming would happen.  The report estimates the level of total CO2 emissions since the industrial revolution that would trigger a temperature rise of this magnitude.  That number is subject to variation of course, but the report projects it is likely that no more than about one trillion tons of CO2 could be released without triggering this rise in temperatures.  We have released about one half of that amount so far, and projections are that at current rates, the other half trillion tons could be released from anthropogenic sources in the next several decades.

    3.    Temperatures of the last fifteen years are not that comforting.  Climate change skeptics have focused on the fact that the rise of global surface temperatures leveled out in the last fifteen years.  The IPCC report explains that this recent trend may be due to natural variability.  It observes that trends based on records of short duration are very sensitive to beginning and end dates and may not reflect long term climate trends.  Nonetheless, in identifying possible explanations for the fifteen year hiatus in warming, IPCC recognizes that the possible explanations for it are not proven.  It also recognizes the possibility that in some models, there may be an overestimate of the response to increasing greenhouse gas.

    4.    There is much we do not know.  We don’t know the cause of the fifteen year leveling of global warming.  We don’t know how quickly the oceans will rise.  We don’t know the likelihood and rate of extinctions.  We cannot accurately predict the localized effects of warming temperatures.  Much of the report is a detailed exercise in characterizing probabilities and confidence levels of predicted global climate trends over time.  The report characterizes the likelihoods of trends it identifies, and they range from the virtually certain to low confidence levels, depending on the trend and timeframe.

    5.    We will hear more from the UN.  The Summary Report for Policymakers focuses on the physical science basis of climate change, and the full version of this part is expected soon.  This physical science part is only the first of three that will together comprise the IPCC Fifth Assessment Report.  The Fifth Assessment Report follows the Fourth Assessment Report which was published in 2007.  In 2014, the two additional parts of this Fifth Assessment Report will be issued concerning (1) likely impacts and (2) steps to limit climate change.  As the report is issued, it likely will prompt renewed efforts for a global climate treaty.  The UN Secretary General, Ban Ki-moon, urged world leaders to work toward a new global agreement to cap greenhouse gas emissions and declared his intention to call a meeting of world leaders next year.

Smackdown Alert: Certiorari granted to review EPA’s GHG rules

Posted on October 15, 2013 by Theodore Garrett

The Supreme Court agreed today to review the EPA’s authority to regulate emissions of greenhouse gases from stationary sources.  The Justices accepted six petitions for review of the D.C. Circuit’s decision in Coalition for Responsible Regulation v. EPA (No., 12-1146 et al.), consolidated them for argument, and limited review to a single question:

“Whether EPA permissibly determined that its regulation of greenhouse gas (GHG) emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” 

The six petitions granted were filed by the Utility Air Regulatory Group, the American Chemistry Council, the Energy-Intensive Manufacturers, the Southeastern Legal Foundation, the U.S. Chamber of Commerce, and a number of states.

EPA’s position, as presented in the DC Circuit and in its opposition to certiorari, is that regulation of greenhouse gas emissions under Title II triggered permitting requirements under the PSD program and Title V of the Act, which apply to stationary sources emitting “any air pollutant” above the statutory threshold.  EPA has interpreted “any air pollutant” to mean “any air pollutant regulated under the Clean Air Act,” and thus when the EPA’s regulation of emissions from new motor vehicles took effect in January 2011, the permitting requirements under the PSD program and Title V automatically applied to stationary GHG sources above the statutory threshold.

In its petition, the US Chamber of Commerce noted that EPA acknowledged that its tailoring rule would create a result “so contrary to what Congress had in mind — and that in fact so undermines what Congress attempted to accomplish with the [statute’s] requirements — that it should be avoided under the ‘absurd results’ doctrine.”  With respect to the issue upon which cert was granted, the Chamber argued that EPA incorrectly determined that all “air pollutants” regulated by the agency under the Clean Air Act’s motor vehicle emissions provision, 42 U.S.C. § 7421(a)(1), must also be regulated under the Act’s Prevention of Significant Deterioration of Air Quality and Title V programs when emitted from stationary sources.

The Utility Air Regulatory Group petition expressly did not ask the Supreme Court to revisit its holding in Massachusetts v. EPA.  However, the UARG petition did ask the Court to consider whether its decision in Massachusetts v. EPA compelled EPA to include GHGs in the PSD and Title V programs when inclusion of GHGs would expand the PSD program to cover a substance that does not deteriorate the quality of the air that people breathe.  UARG emphasized EPA’s admission that regulation of GHGs under the Title I and Title V permit programs subjects “an extraordinarily large number of sources” to the Act for the first time, “result[ing] in a program that would have been unrecognizable to the Congress that designed PSD.” 

A coalition of environmental groups opposed certiorari, emphasizing that EPA’s endangerment and contribution findings and emissions standards for motor vehicles simply implement  the Supreme Court’s mandate in Massachusetts v. EPA.  They emphasize that the Petitioners’ arguments ignore the “air pollutant” definition that the Court in Massachusetts v. EPA held “unambiguous[ly]” (549 U.S. at 529) covers greenhouse gases. 

It is worth noting that four justices dissented in Massachusetts v. EPA, and the successful petitioners in Coalition for Responsible Regulation argue that Massachusetts does not compel the regulations at issue here.  The granting of the petitions for certiorari is sobering news for EPA. Stay tuned.

EPA Proposes to Take Away State Discretion on Antidegradation Analysis

Posted on October 14, 2013 by Patricia Barmeyer

One basic premise of the Clean Water Act is that EPA sets minimum standards but allows the States some latitude, in some areas, to design their own programs to meet their own needs.  One area where the States have traditionally been allowed flexibility is the antidegradation analysis required for any new or expanded discharge, to assure that high quality waters are not degraded.  However, in a notice published September 4, EPA is proposing to amend the federal antidegradation rule to require a review of alternative treatment levels for every permit and to require selection of the “least degrading alternative” in each case.  The proposed rule would have a dramatic effect in Georgia, and perhaps in some other states. 

The current antidegradation rule--both the federal rule and the Georgia rule--provides that the quality of high quality waters shall be maintained unless “allowing water quality is necessary to accommodate important economic or social development in the area….”  In Georgia the longstanding process, approved by EPA, is that the state Environmental Protection Division determines whether the proposed discharge is “necessary” by considering any no-discharge alternatives, such as land application.  If the no-discharge alternative is not feasible and the agency concludes, after public input, that the proposed discharge has significant positive economic or social value, then EPD considers the antidegradation analysis complete.  The agency then proceeds to apply the water quality regulations to determine effluent limitations and other permit conditions. 

Under EPA’s proposal, the antidegradation analysis would mandate a consideration of a full range of alternatives that could prevent or minimize the degradation that would result with the proposed activity, so long as they are “practicable.”  As proposed, this would apply not only to industrial dischargers but also to POTWs, even though the Clean Water Act clearly provides for less stringent technology for public facilities.  The result would be to require substantial expenditures on additional controls even if they are not needed and even if they will produce negligible water quality benefits. 

This very issue has been the subject of debate and litigation in Georgia for the past ten years.  It has enormous implications, because Georgia has declared that all its waters are “high quality” and subject to the Tier 2 requirements.  The environmental community in Georgia has long argued that the determination that a proposed discharge is “necessary” must be supported by a demonstration that the facility, even a POTW, has employed the highest level of treatment that is technologically and economically feasible.  In their view, if a facility can implement better controls, it must, without regard to a cost-benefit analysis and whether or not the lower standard would have any impact on water quality.  The Georgia experience counsels against EPA’s proposal to impose a “one-size-fits-all” antidegradation analysis on all 50 states.

U.S. EPA Updates Air Standards for Tanks Used in Oil and Natural Gas Sector

Posted on October 4, 2013 by Chester Babst

EPA is still working the kinks out of its New Source Performance Standards (NSPS) for the Oil and Natural Gas Sector, i.e., 40 C.F.R. 60 Subpart OOOO, referred to by many as the “Oil and Gas NSPS” and by some as simply “Quad O”.  EPA first published the proposed Oil and Gas NSPS on August 23, 2011, in conjunction with proposed revisions to three other air regulations affecting various segments of oil and natural gas operations.  The proposal prompted more than 150,000 public comments and kindled a national discussion on emissions at natural gas well sites.  The final Oil and Gas NSPS rule was published in August 2012.  Although the rule is most famous for establishing the first federal air standards for hydraulically-fractured natural gas wells, the rule also set significant volatile organic compound (VOC) standards for “storage vessels” used by the oil and natural gas industries.

Several stakeholders responded to the August 2012 rulemaking by filing petitions for administrative reconsideration of the Oil and Gas NSPS.  On April 12, 2013, EPA published a notice granting reconsideration for a number of issues and proposing revisions to the storage vessel standards, in particular.  Evidently, EPA significantly underestimated the number of storage vessels coming online in the field when it developed the August 2012 final rule, which required individual storage tanks with VOC emissions of 6 tons or more per year to achieve at least 95% reduction in VOC emissions.  Tanks are commonly used at natural gas well sites, for example, to store condensate, crude oil, and produced water.  In light of an updated tank estimate, EPA recognized that additional time would be needed for manufacturers to produce a sufficient number of VOC control devices. 

Most recently, on September 23, 2013, EPA published final revisions to the storage vessel requirements in the 2012 Oil and Gas NSPS.  Per the revised rule, which was immediately effective, an individual tank may be considered an affected facility if its construction, modification or reconstruction commenced after August 23, 2011; it has potential VOC emissions of 6 tons or more per year; and it contains crude oil, condensate, intermediate hydrocarbon liquids, or produced water.  EPA made a number of important adjustments in the revised rule, chief among them an extension of the compliance date to give tank owners and operators more time to purchase and install controls.  For the so-called “Group 1” storage vessels (which were constructed, modified or reconstructed between the August 2011 original proposal and the April 2013 proposal), the deadline to control VOC emissions is now April 15, 2015.  For “Group 2” storage vessels (i.e., vessels that come online after April 12, 2013), the compliance deadline is April 15, 2014.  Notably, pursuant to the revised Oil and Gas NSPS, operators only have until October 15, 2013 to estimate potential VOC emissions of Group 1 storage vessels for purposes of determining whether the rule applies.

Meanwhile, the agency is continuing to evaluate other issues raised in the reconsideration petitions that were submitted in response to the August 2012 rulemaking.  EPA has stated in the past that it intends to address the remaining issues by the end of 2014.

Illicit PCB Dumping Prompts Emergency Regulation

Posted on October 1, 2013 by Thomas Lavender

On September 25, 2013 the South Carolina Department of Health and Environmental Control (SCDHEC) filed an emergency regulation in response to multiple occurrences of illegal dumping of substances containing polychlorinated biphenyls (PCBs) into multiple sewer systems across the State. The Emergency Regulation took effect immediately upon filing and remains in effect for ninety (90) days.  SCDHEC acknowledged the existence of an ongoing investigation into the origin of the materials, including state and federal authorities.  SCDHEC noted that there was currently no known impact to public health or any confirmed discharge to surface water bodies.  It is also believed that publicly-owned treatment works (POTWs) in states bordering South Carolina have recently detected PCBs in their systems.

In August, SCDHEC had acknowledged that PCBs had been detected in several POTWs in the Greenville-Spartanburg area of the State.  Concurrent with the filing of the Emergency Regulation, the agency announced that PCBs had now been detected in a POTW in the Columbia, SC area.

Some South Carolina wastewater treatment systems are permitted for the land application of their sludge.  Based on the suspected criminal activity, DHEC has determined the need for specific regulations limiting the land application of sludge containing detectable levels of PCBs.  The Emergency Regulation addresses the land application of sludge from wastewater treatment systems and specifically limits land application to sludge containing no detectable levels of PCBs and requires increased testing of sludge, regardless of disposal method, to aid in identifying illegal dumping suspects.  SCDHEC has also informed all of the state’s class III landfill operators and waste water treatment plants of the matter, and provided them guidance regarding proper disposal and reporting any suspicious activity.

SCDHEC issued a Be On the Lookout (BOLO) alert through the State Law Enforcement Division to heighten awareness among law enforcement of illegal dumping and solicit the help of local law enforcement agencies.