Posted on March 31, 2014
Quarles & Brady recently represented Wisconsin Energy Corporation and Wisconsin Electric Power Company (doing business as "We Energies") in the construction and commencement of operation of a $250 million biomass-fueled co-generation plant. The project is located at Domtar Corporation's paper mill facility in Rothschild, Wisconsin. Wood, waste wood and sawdust are now being be used to produce 50 megawatts of electricity. The new co-generation project also supports Domtar's sustainable papermaking operations.
The new facility adds another technology to We Energies' renewable energy portfolio. That portfolio includes the 145 megawatt (MW) Blue Sky Green Field Wind Energy Center in Fond du Lac County and the 162 MW Glacier Hills Wind Park in Columbia County. Under Wisconsin law, utilities must use renewable energy to meet 10 percent of the electricity needs of their retail customers by the year 2015. With the start of commercial operation of the Rothschild biomass plant, We Energies estimates that it now has secured enough renewable energy to remain in compliance with the state mandate through 2022. Together, We Energies' three renewable energy operations are capable of delivering nearly 360 MW of renewable energy, enough to supply approximately 120,000 homes.
The Rothschild biomass project created approximately 400 construction jobs and 150 permanent jobs in the surrounding community. This includes independent wood suppliers and haulers from northern and central Wisconsin who are now securing waste wood for the project. We Energies appeared in proceedings before the Public Service Commission of Wisconsin in support of the Company's application for a Certificate of Authority for approval for the biomass plant. The Company filed an application for an air permit and other environmental approvals for the project, including the preparation of environmental assessments in support of the regulatory decisions.
The air permit for the project was issued on March 28, 2011. We Energies obtained one of the first PSD BACT (Prevention of Significant Deterioration - Best Available Control Technology) determinations for this project for Greenhouse Gas (GHG) emissions in the U.S. under EPA's GHG Tailoring Rule. The Company worked with the Wisconsin Department of Natural Resources (DNR) in developing a novel case-by-case Maximum Available Control Technology (MACT) determination for the biomass boiler under the Section 112 (hazardous air pollutant) provisions of the federal Clean Air Act. The permit was challenged by several environmental groups. The Company prevailed in the permit appeal process. The appeal was dismissed on the merits by the Marathon County Circuit Court in October, 2011. The facility started commercial operation on November 8, 2013.
Posted on March 26, 2014
David Sive, a founder of modern environmental law, brilliant litigator, untiring mentor and dear friend to many of us, has passed away. He was 91.
David Sive, the founding partner of Sive, Paget & Riesel, P.C. was a great friend to his colleagues, an exceptional litigator, and a loving husband, father, and grandfather. As an intellectual and spiritual leader of the modern environmental law movement, he devoted his energies and passion to protecting the environment.
A veteran of World War II, David fought in the Battle of the Bulge. After graduating from Columbia Law School in 1948, he emerged as an authority on administrative law. However, his love of the wilderness soon led him into the then-nascent field of environmental law. He quickly became an authority in this new field, and was often referred to as the father of modern environmental law. His sustained success in the courtroom over decades established vitally important precedents for later generations of environmental lawyers.
David was one of the first lawyers to bring litigation effectuating the “forever wild” provisions of the New York State Constitution, and litigated a number of cases protecting the environment in his beloved Adirondack and Catskill Mountains. In the 1960s, he played a leading role in the administrative and judicial proceedings that prevented the construction of a power plant on Storm King Mountain along the Hudson River, and helped to establish aesthetics as a recognized environmental value.
In subsequent decades David litigated numerous important environmental cases. He prevented the construction of the proposed Hudson River Expressway (a precursor of the ill-fated Westway Project). He challenged up to the U.S. Supreme Court the Nuclear Regulatory Commission’s testing of atomic weapons off Alaska’s Amchitka Island, and litigated the principal case establishing that the military is subject to the National Environmental Policy Act. In a landmark case decided by the New York Court of Appeals, David established that the preservation of wilderness areas for the benefit of the public serves charitable, educational, and moral purposes and entitles nature preserves to the tax-exempt status that is essential to their survival.
David was proud of his role as a teacher, introducing generations of young lawyers to the emerging field of environmental law, both as a member of the adjunct faculty of Columbia and Pace Law Schools, and as the founder of several continuing legal education courses for the Environmental Law Institute and the American Law Institute- American Bar Association. David’s lectures and written scholarship, including an environmental column in the National Law Journal and articles in numerous law reviews, helped to shape the field of environmental law.
David also played a critical role in the creation of the Environmental Law Institute, the Natural Resources Defense Council, and other prominent national environmental organizations, as well as scores of regional and local entities. His legacy is permanently embedded in innumerable precedent-setting cases. But to those who knew David well and worked with him closely, his gentle way and kind soul will be missed most of all.
Posted on March 24, 2014
While the world waits for the Supreme Court to decide whether EPA can regulate greenhouse gas (GHG) emissions from stationary sources under the Clean Air Act, EPA and state permitting authorities have moved ahead to issue GHG permits. Some of those permits are encountering legal challenges. The Sierra Club and citizen activists are challenging permits issued by EPA Regions as insufficiently stringent, and urging EPA to use its Prevention of Significant Deterioration (PSD) permitting authority to require greater use of solar energy and carbon capture and sequestration (CCS) at new facilities.
So far, EPA’s Environmental Appeals Board has rejected two citizen challenges to GHG PSD permits issued by EPA Regions. On March 14, 2014, the Board denied the Sierra Club’s petition for review of a GHG permit issued by Region 6 for a new natural gas-fired power plant in Harlingen, Texas. In re La Paloma Energy Center, LLC. (Those of you who follow events in Texas will recall that EPA is currently running the GHG permitting program in that state, but has proposed to approve the state’s application to assume responsibility for that program.) The Board rejected Sierra Club’s arguments that the permit’s GHG emission limits were not stringent enough to meet BACT standards and that Region 6 should have required La Paloma to consider adding a solar energy component to its power plant. The Board cautioned, however, that there is no “automatic BACT off-ramp” for solar energy alternatives, and emphasized that permitting authorities must consider suggestions for adding solar energy components at new facilities on a case-specific basis.
In 2012 the Board rejected similar arguments by citizen activists who urged Region 9 to use its PSD permitting authority to require a new hybrid (gas-solar) power plant in California to reduce GHG emissions by increasing its planned solar generation capacity. In re City of Palmdale. The proposed plant was to be fueled primarily by natural gas, with a modest (10%) solar power component to satisfy California renewable energy requirements. The decisions in both City of Palmdale and La Paloma relied heavily on the Regions’ findings that there was insufficient space at the project sites to accommodate the solar power generation capacity that the petitioners were advocating.
The Palmdale decision also upheld Region 9’s rejection of CCS as a BACT requirement for that facility based on cost considerations. The estimated annual cost of CCS would have been twice the project cost (annualized over 20 years) in that case. Sierra Club has renewed the debate over the affordability of CCS in a new PSD permit appeal that is currently pending before the Board. In re ExxonMobil Chemical Company Baytown Olefins Plant. Region 6 rejected the CCS option in this case based on a finding that the cost would be disproportionately high. Stay tuned for a Board decision in the next few months . . .
*Any views expressed herein are the views of the author and do not necessarily reflect the views of the U.S. Environmental Protection Agency or the United States.
Posted on March 17, 2014
How far can an agency deviate from a statutory scheme in order to achieve what it sees as the goals of that scheme? Can the regulatory structure “improve on” the statute? These issues are currently playing out in two closely watched cases.
Last year these pages described a then-undecided Massachusetts state court case that had attracted a surprising degree of national attention. Pepin v. Division of Fisheries and Wildlife began as a relatively straightforward challenge to an agency determination that the plaintiffs’ land provided habitat for the Eastern Box Turtle and that construction of their planned retirement home was therefore subject to regulation under the Massachusetts Endangered Species Act (MESA). In the course of judicial appeals of the agency decision, the plaintiffs, with new counsel, shifted the focus of their argument to a challenge to the regulations themselves. When the Massachusetts Supreme Judicial Court (Mass SJC), acting sua sponte, transferred the case to its own docket, interest in the case spiked dramatically. Amicus curiae briefs were filed not only by state-based groups, on both sides of the issue (Massachusetts Audubon Society, Development Council of Western Massachusetts, Home Builders Association of Massachusetts), but also by those from farther afield (Pacific Legal Foundation, Defenders of Wildlife, National Association of Homebuilders, The Nature Conservancy). Clearly, something was at stake. And now, just as the Mass SJC has reached a decision in Pepin, very similar arguments are being made, with even more at stake, in this year’s most closely watched environmental case, Utility Air Regulatory Group v. EPA, the United States Supreme Court’s review of the Obama Administration’s attempt to regulate greenhouse gas emissions from stationary sources.
To understand these issues, some background on the Massachusetts endangered species regulatory scheme and the challenge to it is necessary. (These are described in more detail in the earlier posting.) The challenged regulations established a process for mapping “priority habitats,” areas that are important for species that fall into any of the three categories established under MESA – in descending order of the peril that they face, endangered species, threatened species, and species of special concern. These Priority Habitat regulations require that before a project is undertaken in such an area, it must be reviewed by the Division of Fisheries and Wildlife to determine whether it will result in a “take” of a species falling into any of the three categories. (“Take” is very broadly defined in the statute and includes habitat alteration.) If a take will occur, the regulations provide, the project may nevertheless proceed if it can be conditioned in such a way as to avoid that result or, in more difficult cases, if the project proponent takes other steps that will result in “a long-term net benefit to the conservation of the impacted species.”
In practice, the evidence showed, 75% of projects proposed in Priority Habitat have been approved without conditions, 22% have proceeded with conditions, and 3% have required that other measures, resulting in a “long-term net benefit,” be taken in order to permit the project to proceed. Because of this history, at least parts of the development community in Massachusetts had accepted the Priority Habitat regulations as a reasonable way of accommodating both developers’ interests and the purposes of MESA.
This acceptance was likely based on something else as well: As a practical matter, the Priority Habitat regulations were promulgated in lieu of regulations under another scheme, specifically set out in the legislation but never put into effect by the Division of Fisheries and Wildlife. MESA authorizes the Division to designate as “Significant Habitat” areas that are important to the survival of endangered and threatened species (but not species of special concern). And MESA severely constrains development in areas that the Division has so designated. But, because of the severity of the constraint, the Act also establishes substantial procedural protections before a particular property can be designated as Significant Habitat.
Rather than designating any Significant Habitat, the Division, relying on a general grant of authority to adopt regulations, created the Priority Habitat scheme, with its less severe restrictions on development and its less burdensome (for the agency) procedural requirements. In short, the Division chose not to adopt regulations specifically contemplated in the enabling legislation and adopted instead regulations that were easier to administer, less intrusive for those in the regulated community who would have fallen under the legislatively-contemplated scheme and, as a consequence, arguably more effective at protecting at-risk species in Massachusetts. Doing that, though, made the Priority Habitat regulations subject to challenge by those who might prefer that there be no regulation of land use in the interest of protecting at-risk species at all.
The challenge in the Pepin case to the Massachusetts wildlife agency’s rulemaking power is very like the industry challenge to EPA’s rulemaking in Utility Air Regulatory Group. On February 18 of this year, the Mass SJC upheld the validity of the Priority Habitat regulations. On February 24, the United States Supreme Court heard argument on the challenge by industry and certain states to the Environmental Protection Agency greenhouse gas regulations. (Other states intervened in support of the regulations, and there was extensive amicus participation.) At the heart of the challenge in the Supreme Court is an attack on EPA’s determination that it would raise very substantially the threshold at which emitters of greenhouse gases would be regulated; the emission levels specified in the Clean Air Act are much lower, but they were intended for “conventional” pollutants, not greenhouse gases. Using the Congressionally-specified levels would have been an administrative nightmare for EPA. And it would have been enormously burdensome for businesses and even individuals. EPA therefore determined to use higher thresholds. This presumably benefits the industry petitioners and the states that support them. But that is not the point. EPA’s action leaves it subject to the accusation leveled at the Massachusetts Division of Fisheries and Wildlife: That it re-wrote a statute in order, in its view, to make it work better, and that an administrative agency may not do that.
The Mass SJC had little difficulty rejecting this claim. The unanimous opinion begins its discussion of the validity of the Priority Habitat regulations by noting that “[d]uly promulgated regulations . . . are presumptively valid and ‘must be accorded all the deference due to a statute.’” And in analyzing whether the plaintiffs had overcome that presumption, the court “look[ed] to the statute as a whole to determine the scope of the agency’s power.” In the recent United States Supreme Court argument, EPA sought to invoke these principles in defense of its greenhouse gas regulations. And it received some support from the Court. Justice Elena Kagan, according to the New York Times, acknowledged that what the agency did “was true to the law’s larger purpose.” But other Justices were less comfortable: Justice Anthony Kennedy “couldn’t find a single precedent that strongly supports [EPA’s] position.” And Justice Samuel Alito insisted that the agency’s use of its own threshold numbers, rather than those in the Clean Air Act, was unprecedented “in the entire history of federal regulation.”
The two cases are not the same, of course: the statutes are different; the agencies’ actions and choices were different; and the governing administrative law principles may be different in some respects. But it seems likely that the outcomes in the cases turned and will turn less on any of those factors and more on the views of the judges deciding them about the appropriateness of administrative agencies making their own judgments about how best to accomplish broadly-stated legislative objectives.
One could easily argue that the Massachusetts Division of Fisheries and Wildlife took a more dramatic step, in declining to promulgate regulations that the enabling legislation called for and instead promulgating regulations that were not specifically contemplated by that legislation, than EPA did in adopting the regulatory model that Congress had called for but limiting its reach when it was clear that not doing that would be havoc-making. Perhaps if the Massachusetts Supreme Judicial Court had reviewed EPA’s actions and the United States Supreme Court had reviewed the Priority Habitat regulations, the results would reflect that distinction. But they didn’t. And what we got, and likely will get, are decisions that reflect as much the views of the members of those courts as they do the substantive nuances of the cases themselves.
Posted on March 12, 2014
Among other changes, the new standard now defines “migration” to include the movement of vapor in the subsurface. That change makes it more clear that the environmental professional conducting a Phase I must, when identifying releases and threatened releases, evaluate the potential for vapors to migrate from contaminated subsurface soils and ground water into the indoor air of buildings on the surface.
While many lawyers and environmental professionals believed the old standard already required an evaluation of the potential for vapor intrusion, there was no consensus, and there are many Phase I reports out there that do not evaluate that potential. Because treatment of vapor intrusion under the old standard was a topic of genuine dispute among practitioners, you might think we could accept this clarification and move on. Not so.
The USEPA rolled a grenade into the tent when, in its preamble to the final rule sanctioning E1527-13, it stated that it “. . . wishes to be clear that, in its view, vapor migration has always been a relevant potential source of release or threatened release that, depending on site-specific conditions, may warrant identification when conducting all appropriate inquires.” (78 Federal Register 79319 (December 30, 2013).
The USEPA’s clarification has prompted some discussion in the blogosphere about potential malpractice claims against environmental professionals who failed to address relevant vapor intrusion issues in past Phase I reports. Closely related is the question of whether landowners currently relying on one of CERCLA’s landowner liability protections may be at risk due to the inadequacy of their consultant’s work. These are legitimate concerns and only time will tell if theoretic liability leads to actual liability and litigation.
However, it does not appear that the sky is falling and there are reasons to suggest that a landside of litigation over this issue is unlikely. While litigation can be expected under the right (very limited) fact pattern, the following factors should alleviate concerns about widespread litigation:
- While the aggregate Phase I universe is vast, the portion of that universe affected by the vapor intrusion issue is very limited; involving only circumstances where subsurface contamination is known or suspected.
- Even when genuine vapor intrusion questions exist, a cause of action for malpractice requires damages. Simple receipt of a substandard Phase I report is not enough. The recipient of the report must experience damages related to the failure to address vapor intrusion. I see two such scenarios:
- A landowner faces liability for remediation of a vapor intrusion problem, and does not qualify for liability protection under CERCLA because the Phase I failed to evaluate the threat of vapor intrusion.
- A landowner discovers that a vapor intrusion problem reduces the value of its property, after relying on a Phase I that did not evaluate the threat of vapor intrusion.
- In the former situation, case law demonstrates that courts are reluctant to deny CERCLA liability protection to landowners who reasonably rely on an environmental professional’s Phase I report to satisfy AAI. Reliance on an environmental professional would seem particularly reasonable and appropriate regarding a technical issue such as whether or not an assessment should evaluate the threat of vapor intrusion. If landowner liability is improbable, the specter of derivative Phase I malpractice claims is also diminished.
- Concerning the latter (reduced property value) scenario, most Phase I reports are conducted in order to satisfy AAI and qualify for landowner liability protection. While use of the ASTM standard is not limited to that task, the standard directs the environmental professional to assume, absent other direction from the user, that satisfaction of AAI is the user’s purpose. If the user obtains the liability protection it bargained for, can it maintain a malpractice action? The answer to that question will depend upon the facts of each case, but I suspect that the user will face an uphill battle.
- Only after paring down potential vapor intrusion disputes to those involving actual relevant damages do we reach the substantive malpractice question of whether or not the failure to address vapor intrusion in a Phase I is a breach of a professional standard of care.
The answer to that breach of standard question is beyond the scope of this note and will require a descent into the bowels of the ASTM standard. I suggest that the USEPA’s proclamation is not dispositive because it addresses compliance with its own AAI requirement, not compliance with the ASTM standard guiding the environmental professional; a distinction that may make a difference.
For transactions in the pipeline when the December 31, 2013 final rule was promulgated, most will not be affected because they do not present the particular facts and circumstances (i.e., subsurface contamination) triggering a vapor intrusion assessment. In those transactions where vapor intrusion is an issue, however, it is key that AAI be completed prior to the acquisition of property. For pending transactions, deficient Phase I assessments should be revised or supplemented to address vapor intrusion potential. If the property has already changed hands, the new owner’s claim to any of the CERCLA landowner liability protections will be at risk.
How great a risk? Time will tell. But it is clear that good faith arguments that vapor intrusion need not be part of new Phase 1 assessments are no longer tenable.
Posted on March 10, 2014
Environmentalists and utility companies don’t always see eye to eye. But when we do find common ground, big changes can happen. Earlier this month, NRDC and the Edison Electric Institute, which represents all the nation’s investor-owned utility companies, serving 220 million Americans, announced an agreement to work together to bring more clean energy and efficiency into the electric grid.
Moving toward a cleaner, more efficient electric grid is less a question of technology than of policy. Outdated utility regulations can pit utility companies and clean energy against each other. Under the traditional regulatory scheme, utilities have to sell increasing amounts of electricity in order to recover their costs. So when customers start putting up solar panels on their roofs, the utility “loses.” Or when customers weatherize their homes and don’t need as much heat to stay warm, the utility “loses.”
This outdated regulatory model is slowing the growth of clean energy and efficiency, and jeopardizing the development of the grid that utilities and customers would all like to have: an enhanced grid that provides clean, reliable, affordable electricity with less carbon and toxic air pollution. In order to speed up the deployment of clean energy and efficiency across the country, and bring our grid into the modern era, utility companies and customers need to be rewarded for doing the right thing.
NRDC and the EEI have come to a path-breaking agreement on key policy changes that will make our electric grid cleaner and more robust. The most significant change is a shift in thinking. Instead of being in the business of selling electricity, a commodity, utilities should be in the business of providing better quality electricity services. This means more efficient electricity, from diverse clean sources like wind and sun, supplied by a robust, modern grid that can take advantage of clean energy, whether it’s generated from someone’s roof or from a power plant. Both utilities and clean energy providers will be winners if this is done right.
Having the support of utilities is a major step forward in pushing for reform. When utilities are rewarded for making our grid better--cleaner and more efficient--instead of merely for selling more electricity, we’ll see improvements much faster. More clean energy, more efficiency, more reliability, more options for consumers. Working together, with a host of diverse partners, NRDC and EEI can help convince state utility commissions to update their regulatory policies and help usher in a new era of clean, reliable, affordable electricity.
Posted on March 7, 2014
Almost as soon as U.S. Supreme Court Justice Scalia joined the bench in the fall of 1986, he made clear his disdain for arguments that the meaning of statutory text could be gleaned from its legislative history. And advocates before the Court who made the mistake of equating “congressional intent” with a statement made by an individual member of Congress during a hearing or a colloquy on a chamber floor could expect a sharp rebuke from the Justice.
The debate at the Court about the proper role of legislative history in statutory construction was not fully joined, however, until 1994 when Justice Stephen Breyer joined the bench. From the outset, Breyer, a former Senate staffer, made equally plain his view that legislative history was both fair game and could be highly relevant.
Indeed, Scalia’s and Breyer’s contrasting views regarding textualism in both statutory and constitutional interpretation became so celebrated that they literally took their debate on the road. To be sure, theirs was a far cry from the Lincoln-Douglas Debates on slavery 150 years earlier, but for legal scholars and Supreme Court observers, it was High Court entertainment.
During the oral arguments last month before the Supreme Court in Utility Air Regulatory Group v. EPA, Justice Breyer managed to take the debate to yet a new level. The issue before the Justices concerned the lawfulness of EPA’s regulations applying the Clean Air Act’s Prevention of Significant Deterioration Program to the emissions of greenhouse gases from new and modified stationary sources. As the Justices struggled to decipher the meaning of statutory terms and phrases that befuddle even seasoned environmental lawyers, Justice Breyer made a surprising reference. He did not merely ask what Senator Edmund Muskie, the bill’s chief sponsor, might have been intending in drafting the language at dispute before the Court. He asked what “Mr. Billings, I think, is the staff person” would have intended if faced with the policy issue that EPA now faced in trying to apply the language he drafted to greenhouse gases.
The Supreme Court courtroom was filled to capacity for the argument. Yet, I can probably safely say that fewer than ten, and likely fewer than five people in the room had any idea to whom the Justice was referring. And those few most certainly did not include any of the Justice’s colleagues on the bench or any of the advocates before him.
But for a few of us, who thrive on environmental law’s history, it was a moment of glory. The Justice was referring, of course, to Leon Billings who was Senator Ed Muskie’s chief staffer for the drafting of almost all of the nation’s path-breaking environmental laws during the 1970s, including, as the Justice correctly surmised, the Clean Air Act of 1970. The statutes were revolutionary in their reach, as they sought no less than to redefine the relationship of human activities to the nation’s environment.
Not relying merely on the soaring rhetoric of a law like the National Environmental Policy Act, these new pollution control laws got into the nitty-gritty of lawmaking. They addressed the extent to which costs, benefits, risk assessment, scientific uncertainty, and technological availability should all be relevant in determining the pollution control standards. They brokered compromises across partisan divides and remained nonetheless exceedingly ambitious and demanding in their reach.
The nation, more than four decades later, has reason to be grateful for the work of former congressional staffers like Leon Billings. Their impressive work lies in sharp contrast to that of Congresses over the past twenty plus years, which have passed no comparably significant environmental laws and done little more than deepen partisan divides even further. For that reason, the Supreme Court shout-out to “Mr. Billings” was a great moment at the Court. And the Justice’s question an apt one too.
Posted on March 5, 2014
Environmental response trusts created as a result of corporate bankruptcies demonstrate that workable mechanisms exist to protect against future environmental liability. This prompts the question: Can this concept be expanded and become an official amendment to CERCLA, or a separate Brownfields law?
The Revitalizing Auto Communities Environmental Response Trust (“RACER Trust”), the largest response trust every created, owns, manages and remediates the former holdings of General Motors. It includes 89 properties, 60 of which needed environmental remediation, with over $640 million provided to RACER Trust, nearly $500 million of that designated to address environmental liability. The RACER Trust holds the liability for onsite contamination when it sells a property as long as the new owner allows the remediation work to continue. This liability shield also travels with the land, providing security to future purchasers with regard to unexpected contamination that could otherwise cost thousands or millions of dollars. What is unique about this and other trusts, is the cooperative nature which the Trustees and the regulatory agencies have displayed in addressing contamination and remedial activities, very different than the standard contentious approach which routinely exist at sites today.
There have been several legislative proposals in the 113th Congress to provide fixes to CERCLA, the cornerstone law of environmental remediation. The proposed legislation, however, is more focused on transferring authority over clean-up of sites to the states and implementing credit for state contributions to the remediation. In its testimony to the House Energy and Commerce Committee last May, EPA’s Office of Solid Waste and Emergency Response laid out the reasons for its opposition to many of the legislative proposals. The main points of concern are over the potential delays, increased administrative and litigation costs, and conflicting clean-up authority at sites.
But instead of legislation that could result in further slowing down an already protracted process, what about creating opportunities and enticements for development of contaminated properties? Whether under the CERCLA regime, or through the Brownfields program, there are ways to create environmental liability shields that would restore these properties to useful status, providing industry and jobs for the surrounding communities. In 2007, a nascent proposal to address this issue was developed. The draft legislation called for the creation of the Recovered Property Protection and Assurance Trust or R-PAT for transfer of contaminated properties and their associated environmental liabilities to a quasi-governmental trust. The R-PAT concept would have required a current property owner to pay a significant fee in order to place the land in the trust, and then cleaned up and conveyed, liability-free, to a purchaser. For various reasons, including the quasi-governmental nature of the trust and the floundering economy, the proposal was a non-starter.
However, given the dearth of other viable proposals, perhaps it is time to re-examine the trust concept and how contaminated properties can be best put back to profitable use. If we really want to streamline CERCLA or improve the Brownfields program, then let’s talk about how to get the land back into use, how to remove the time consuming and wasteful antagonism surrounding remediation and how to provide bullet-proof shields for bona fide purchasers now and in the future.
Posted on March 4, 2014
I sit on the board of a land conservation organization. Recently, the Director of Land Preservation for our board made a presentation in which she lamented the negative impact that the 2008 recession continues to have on land conservation activities at the organization. Funding by governments, grant-making organizations and private donors have been reduced, and local governments – one key source of land preservation – are themselves cutting their conservation budgets. Our organization has preserved a steadily decreasing amount of acreage since 2008, and the amount of funds spent on acquiring lands has been diminishing.
Many questions presented themselves following this sobering presentation, including whether a similar situation obtains at other land conservation groups, and what might be done until the economy turns the corner and, hopefully, funding is restored to pre-recession levels.
My research has been neither exhaustive nor scientific, and my sources largely anecdotal, but land conservation in other areas of the country seems to have been a mixed bag during this recessionary period, with some regions able to preserve a significant amount of land. In areas as diverse as the Chesapeake Bay, western North Carolina and large swathes of the West, for example, conservation has been robust in recent years. According to the Land Trust Alliance, more land has been preserved in recent years in states such as California, Colorado and Montana than has been developed. Following the housing crisis of 2008, development has been substantially reduced, lowering land prices and thus presenting an opportunity for conservation organizations to purchase land at lower prices.
Yet, at the same time, many conservation groups lack the resources to take advantage of these opportunities. Government-funded trust funds have been depleted by reduced federal and state budgets, and land conservation organizations’ endowments similarly have dropped as a result of fewer donations and, at least until recently, a depressed stock market. Thus, while land is less costly, less money may be available to take advantage of the opportunity, a classic catch-22. What a shame to be losing the chance to preserve environmentally sensitive land while development pressures are reduced. It is only a matter of time before the economy improves, increasing land values and making preservation more costly.
A recent article in The Wall Street Journal illustrates one impact of tightening local budgets on conservation. As noted in that article, cases are pending before state supreme courts in Maine and Massachusetts in which local governments have assessed real estate taxes on land held for conservation, arguing that they provide insufficient public benefit to warrant full tax exempt status. One or more judgments in favor of the municipalities, while nominally increasing their coffers, would have a further negative impact on conservation by imposing an additional financial burden on conservation organizations.
Until the economy improves, and monies again become available for preservation, land trusts need to become creative in their strategies. For example, conservation easements are less costly than acquiring the fee itself, and often come without management costs because the landowners typically continue to use their land for timber, grazing or agriculture. Instead of purchasing larger tracts, our organization has been shifting its resources in recent years to buying largely residential properties that are subject to frequent flooding. Preservation of these parcels, while typically small in size, serves a vital function by allowing families to relocate to higher and safer grounds and by returning flood-prone areas to a relatively undeveloped state, thereby reducing both human impacts and further downstream flooding.
Let’s hope funding for land conservation – government as well as private and non-profit – increases in the coming years to enable the preservation of sensitive and ecologically-valuable lands for years and years to come.