2019 WOTUS Rule Seeks to Make the Complex Simple—It Won’t Work

Posted on June 6, 2019 by Rick Glick

What is the jurisdictional reach of the Clean Water Act?  The Act applies to “navigable waters”, which are defined as the “waters of the United States, including the territorial seas.” That’s all the CWA says about jurisdiction.  Congress left it to the implementing agencies—EPA and the Corps of Engineers—and the courts to define the contours of CWA jurisdiction.  In the 45 years following enactment, we are not much closer to clarity. 

The 2019 proposed “waters of the U. S.” or WOTUS rule is the latest attempt and, like all its predecessors, it has generated a lot of controversy.  Setting aside for the moment whether the rule is ultimately adopted and survives the inevitable court challenges, will it achieve the CWA’s object “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters”?  Unfortunately, the approach taken in the rule seeks an easy resolution to a complex problem as it avoids the interconnectedness of natural systems.  That approach will be of limited use in meeting the CWA’s objective.

The central strategy underlying the CWA is adoption by the states of water quality standards.  The standards would be protected through grant funding of public treatment facilities on the one hand, and on the other, a regulatory program allowing for limited discharges of pollutants or filling of wetlands to ensure attainment of standards.  Early cases looking at discharges or fills subject to the CWA stressed whether the receiving waters were “navigable in fact,” that is, capable of carrying interstate commerce.  However, regulations adopted by the Corps of Engineers extended jurisdiction to tributaries and adjacent wetlands, as degradation of these results in degradation of the navigable waters.  These regulations also included certain intermittent streams among WOTUS.

In its 2006 decision in Rapanos v. U. S., a majority of the Supreme Court found the regulations too broad, but did not quite agree as to why.  Writing for the plurality, Justice Scalia criticized the Corps for regulatory overreach and argued for a common sense, dictionary understanding of WOTUS:

In sum, on its only plausible interpretation, the phrase “the waters of the United States” includes only those relatively permanent, standing or continuously flowing bodies of water “forming geographic features” that are described in ordinary parlance as “streams[,] … oceans, rivers, [and] lakes.” See Webster’s Second 2882. The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall. 

In other words, if you can see it and your feet get wet when you stand on it, the CWA applies.  Applying his usual strict constructionist approach, Justice Scalia found no statutory justification for a nuanced approach to jurisdiction.  By Executive Order, President Trump directed EPA and the Corps to replace the Obama WOTUS rule with one based on Justice Scalia’s interpretation, and the proposed rules do just that.

Will this approach serve the stated objective of the CWA to protect our waters?  Justice Kennedy, in his concurring opinion in Rapanos, thought not.  He chastised both the plurality and the dissent for not applying the test established by the Court just five years earlier in Solid Waste Agency of Northern Cook Cty. v. Army Corps of Engineers.  That case pegged jurisdiction to whether there is a “significant nexus” between the wetland in question and a navigable waterway.  In SWANCC, the Court rejected Corps regulations that imposed jurisdiction over isolated wetlands because they served as habitat for migratory birds.  That was not, per the Court, enough to show a significant nexus between those wetlands and a navigable waterway. 

However, in Rapanos, Justice Kennedy argued that the Court must do the SWANCC analysis, with all its inherent complexity, before simply concluding there is no jurisdiction:

Taken together [prior Court opinions show that], the connection between a nonnavigable water or wetland and a navigable water may be so close, or potentially so close, that the Corps may deem the water or wetland a “navigable water” under the Act. In other instances, as exemplified by SWANCC, there may be little or no connection. Absent a significant nexus, jurisdiction under the Act is lacking.

* * *

The required nexus must be assessed in terms of the statute’s goals and purposes. Congress enacted the law to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” 33 U. S. C. §1251(a), and it pursued that objective by restricting dumping and filling in “navigable waters,” §§1311(a), 1362(12). With respect to wetlands, the rationale for Clean Water Act regulation is, as the Corps has recognized, that wetlands can perform critical functions related to the integrity of other waters—functions such as pollutant trapping, flood control, and runoff storage. 33 CFR §320.4(b)(2). Accordingly, wetlands possess the requisite nexus, and thus come within the statutory phrase “navigable waters,” if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as “navigable.” When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term “navigable waters.”

The analysis called for by Justice Kennedy is complex and requires professional judgment.  Granting agencies the discretion to exercise that judgment makes many uncomfortable, but such discretion is inherent in our current framework in which Congress provides vague direction that agencies must implement.  There is much talk about the Supreme Court eviscerating Auer and Chevron deference to agency interpretations of their own rules or statute, but surely there must be some leeway for agencies that courts can find acceptable.  If not, already ponderous and glacially slow regulatory processes will get only more so. 

The Obama WOTUS rule took the Kennedy approach and then tried to put certain sideboards around it to determine CWA jurisdiction, which played to mixed reviews—a million comments and scores of legal challenges were filed.  The Trump WOTUS rule swings the pendulum toward the simplistic Scalia approach, which will also draw broad opposition.

Getting clarity on the scope of CWA jurisdiction has proved elusive.  However, in our zeal for clarity and preventing overly aggressive federal regulation, we must not lose sight of the clarion purpose Congress gave in enacting the CWA in the first place.

Where Is Gundy v. United States?

Posted on May 30, 2019 by Lisa Heinzerling

In the first week of October, the justices heard argument in Gundy v. United States, in which a convicted sex offender argues that the Sex Offender Registration and Notification Act (SORNA) violates the nondelegation doctrine by giving the Attorney General untrammeled authority to decide whether the law's registration requirements, backed by criminal penalties, apply at all to offenders convicted before the statute was enacted. Gundy is the only case from the Court's October argument session left to be decided.

Around the time of the oral argument in Gundy, I heard several Court watchers predict that the case would be decided easily, and against Gundy, through a narrowing interpretation that would avoid any serious nondelegation issue. The government had argued that the Attorney General's discretion could be limited by finding that "the text and context" of SORNA convey an instruction to the Attorney General to "specify the applicability of SORNA's registration requirements to pre-Act offenders 'to the maximum extent he finds to be feasible.'" Such guidance from Congress would easily satisfy the Court's existing jurisprudence on nondelegation.

As time passes, however, this seemingly straightforward resolution of Gundy seems ever less probable. One problem for the government is that the limiting principle it asserted – "to the maximum extent he finds to be feasible" – does not appear in the statute. Conservative justices wedded to textualism may be hesitant to read into the statute a limitation the text does not identify.

Moreover, the justices have already passed up a chance to interpret SORNA narrowly to avoid the very challenge they now face. In 2013, in Reynolds v. United States, the Court found that SORNA's registration requirements did not apply to pre-Act offenders until the Attorney General said they did. Chief Justice Roberts, who at oral argument had asked counsel for the government whether delegating this degree of authority would create a nondelegation problem, joined Justice Breyer's majority opinion without comment. By interpreting SORNA to require action from the Attorney General before the law's registration requirements may apply to pre-Act offenders, the Court in Reynolds created the constitutional conflict it now confronts.

Another worrisome sign for the government is that four of the Court's current justices have in recent years expressed constitutional anxieties about Congress's broad delegations of power to administrative agencies. Gundy may give them the chance to revive or even expand a constitutional doctrine that has not been used to invalidate a federal statute since 1935.

If the Court invalidates SORNA as an unconstitutional delegation of legislative authority, the consequences could be gigantic. A reawakened nondelegation doctrine could run like a scythe through the scores of statutes – including, of course, environmental statutes – that grant broad authority to administrative agencies. Operating that destructive instrument would be the least politically accountable of all the branches of government.

The Court could try to limit a decision invalidating SORNA, based on such factors as the criminal context; the worrisome power of the Attorney General as both prosecutor and quasi-legislator; and the backward-looking nature of the application of registration requirements to pre-Act offenders. Even a limited invalidation, however, would mark a significant turning point in administrative law, with destabilizing consequences for federal environmental programs. The longer we wait for the Court's decision, the more likely it is that the justices are grappling with the most fundamental questions raised by this case.

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NOTE: A version of this post was published by ACSblog in September 2018.

“Happy [50th] Earth Day—Something to Crow About”

Posted on May 23, 2019 by Jeff Civins

In April of next year, the world will be celebrating Earth Day’s 50th anniversary. According to the ultimate source—Wikipedia—Earth Day is now celebrated in more than 193 countries. Among those celebrations is one held annually in Dallas, which this year drew a record crowd of 175,000 visitors. This particular celebration, formerly known as Earth Day Texas and rebranded as EarthX, was adopted by environmentalist Trammell S. Crow in 2011 and turned into the world’s “largest annual environmental exposition and programming initiative.” 

In describing its founder, EarthX’s website notes “[w]ith a focus on inspiring environmental leadership across sectors and party lines, Trammell has succeeded in bringing together people and organizations from all walks of life to explore and collaborate on solutions for some of today’s most pressing environmental [concerns].” For example, at one of EarthX’s events this year, Susan Eisenhower moderated a discussion on climate change by Senators Lindsey Graham (R. SC) and Sheldon Whitehouse (D. RI), and Secretary of Energy Rick Perry spoke about how innovation is revolutionizing the country’s energy production and consumption. Another of this year’s EarthX events was a Law and Policy Symposium, which, consistent with EarthX’s theme of water, was entitled “Water, Water Everywhere…” The Symposium brought together prominent thought leaders, including ACOEL fellows, representing diverse perspectives to discuss legal and policy implications of a range of pertinent topics.

The Symposium included discussions of: water issues facing Texas (“Don’t mess with Texas”); federal water quality issues (“A River Runs Through It”); coastal issues (“Surf’s Up”); water issues facing cities (“Going with the Flow”); and the water energy interface (Thirst for Power”). A luncheon presentation (“Making Waves”) included the showing of an excerpt from the Emmy-award winning  documentary—“The Sonic Sea”--on the threat oceanic man-made noise poses to marine life, presented by Stephen Honigman, a former general counsel of the U.S.  Navy who is one of the filmmakers.

The federal water quality panel was representative of the dialog the Symposium tried to foster and resulted in a lively discussion of “water of the U.S.” involving Matt Leopold, EPA’s General Counsel, and representatives from the National Wildlife Federation, the American Farm Bureau, the National Association of Clean Water Agencies, and a moderator and a panelist from private practice. Other prominent speakers at the Symposium included Senator Sheldon Whitehouse, on the topic of water energy interface, former DOJ official John Cruden, on water issues facing cities, and Texas Attorney General Ken Paxton, on cooperative federalism (“Keeping Both Oars in the Water”).

Last year’s Symposium entitled “Back to the Future,” also included a diverse array of prominent environmental thought leaders, and focused on the future of: environmental regulation; sustainable and ethical corporate decision-making; disaster response; and domestic energy production. Reflective of the diversity of speakers, the energy session included representatives from the Edison Electric Institute, the American Council on Renewable Energy, the Citizen’s Climate Lobby, and the Climate Leadership Council, as well as a private practitioner.

The Symposium the year before dealt with fundamental environmental issues that included: integrating science into regulatory decision-making; reconciling energy and economic development with protection of the public health and environment; facilitating resolution of environmental disputes associated development; and integrating sustainability into corporate decision-making.

Next year’s Law and Policy Symposium will focus on environmental developments over the past 50 years since the first Earth Day and on where we are, or should be, headed. The Symposium organizers hope that next year’s program will result in a dialog among diverse perspectives that results in the identification of points on which there might be consensus and of a range of paths forward to realize the objective of EarthX--and its patron and founder, Trammell S. Crow--“to inspire people and organizations to take action towards a more sustainable future worldwide.”

What’s on the Menu: Trout or Shark?

Posted on May 21, 2019 by Kathy Beckett

In 2015, EPA published its final updated ambient water quality criteria for the protection of human health for 94 chemical pollutants.  This updated suite of recommendations was designed to reflect the latest scientific information and EPA policies, including updated body weight, drinking water consumption rate, fish consumption rate (“FCR”), bioaccumulation factors, health toxicity values, and relative source contributions.  Presently states and tribes are engaged in the triennial review process for the adoption of the new EPA recommended criteria.  As a result of the myriad of factors that comprise the calculation for the new recommended human health criteria, states and tribes are engaged in assessment of the particulars.  Stated simply:  AWQC (ug/l) = toxicity value (mg/kg-d) x BW (kg) x 1,000 (ug/mg)b divided by [DI (L/d) – Ʃ4 i=2 (FCRi(kg/d) x BAFi (L/kg))]. 

One notable effort to manage EPA’s fish consumption-based recommendations is found within the Idaho water quality standards setting continuum.  In 2012, EPA disapproved Idaho’s assumptions asserting that it failed to demonstrate that the criteria protected Idaho’s designated uses. Specifically, EPA concluded that Idaho failed to consider available local and regional fish consumption information suggesting that fish consumption among some Idaho population groups was greater than 17.5 g/day. EPA’s review of available information suggested that recreational anglers and subsistence fishers in Idaho consume fish at rates higher than the national default rate. In addition, during tribal consultation EPA heard from several tribes that rely on fish and other resources in Idaho waters for subsistence purposes. In its disapproval action, EPA recommended that Idaho further evaluate levels of fish intake by recreational and subsistence fishers in Idaho when evaluating the appropriate FCR for use in deriving criteria.  In 2017, EPA informed Idaho that it had not adequately taken into consideration subsistence fishing use by Idaho tribes, and therefore Idaho’s criteria were not sufficiently protective.  To make a long technical story short, after committed efforts by Idaho, EPA finally approved the state’s new and revised human health criteria, in April, 2019.

Other states and tribes are moving cautiously relative to these new human health criteria, learning from Idaho that national default assumptions embedded in EPA’s formula will require careful study.  EPA developed chemical specific science documents for each of the 94 chemical pollutants which serve to update exposure inputs for the formula cited above, many of which reference proprietary studies that are not readily available for review without purchase.  States and tribes are now working to assess EPA default values relative to local and regional data for:  body weight; drinking water consumption; fish consumption; trophic levels of fish in local waters and in representative diet; and toxicity values for non-carcinogenic and carcinogenic effects. 

The West Virginia legislature recently directed the West Virginia Department of Environmental Protection to allow additional time to complete the assessment of local and regional data that is being developed prior to finalizing its water quality standards incorporating the 2015 human health criteria.  In West Virginia, freshwater trout is sought after as a culinary delicacy.  As for shark, that’s not typically on the menu.

Some Labor Principles for Climate Change Legislation

Posted on May 20, 2019 by Eugene Trisko

The Democratic takeover of the House has rekindled hopes for climate change legislation, notwithstanding major hurdles in the Senate and the White House. While little but incremental progress is likely over the foreseeable future, the legislative concepts now being developed may gain greater traction after the 2020 general election.

Labor unions have participated in all major climate legislative developments since the 1997 Kyoto Protocol, and were involved in the drafting of the carbon capture and storage (CCS) technology and other provisions of the 2009 Waxman-Markey climate bill. Labor has consistently advocated for a comprehensive, economy-wide legislative solution to climate change. However, it is essential that any such legislation also be crafted to provide for worker adjustment assistance programs to address job displacement impacting families and communities.

Unions in the energy space are concerned about the adverse job implications of potential carbon tax legislation. Carbon taxes create uncertainties about market responses and lack assurance that advanced emission mitigation technologies such as CCS could be deployed in time to avert massive dislocation of workers in the petroleum, coal, rail, and mining sectors.

Any carbon tax legislation necessarily must include significant revenue set-asides for worker adjustment and community redevelopment assistance. Bureau of Labor Statistics data show that more than two million workers are directly employed in 14 vulnerable fossil fuel-related industries, with annual wages and benefits of some $180 billion. An additional seven million indirect jobs are in support industries and communities.

Major energy unions also are concerned about unrealistic solutions such as those advocated in the “Green New Deal” and by proponents of “Keep It in the Ground.” Legislation addressing the complex issues of carbon emission reduction must address: a) the tremendous impact such legislation will have on millions of fossil fuel-reliant jobs across America; and b) the costs and full recompense required to mitigate the effects of the loss of those jobs on workers, families and communities.

Speaker Pelosi has indicated that an emission allowance trading program such as that developed in the 2009 Waxman-Markey bill is a good starting point for discussions about future climate legislation. Updating and improving that bill could offer strong technology incentives while delivering significant longer-term emission reductions. A revamped allowance-based program could reflect the following principles:

1) All major emitting sectors (utilities, industrial, transportation) should be covered by a national trading program based on an upstream allocation of allowances  - i.e., to utility generating units, gas pipelines, oil refineries, etc.;

2) The rate of decline for any cap (sectoral or national) should to be assessed in light of the cost and availability of technologies for reducing CO2. In the case of electric utilities, a longer time frame for reductions can be justified based on lengthy engineering and construction lead-times - the transportation sector similarly requires long lead-times due to the gradual rollover of vehicle fleets;

3) A bonus allowance program for technology retrofits at utility and industrial units, similar to that employed in Waxman-Markey and the 1990 acid rain program, would complement the CCS incentives that Congress recently enacted in 45Q tax credit legislation;

4) Allowance auctions should be avoided as they constitute a form of double taxation on emitting sectors: first, compliance must be achieved through investments in control measures, and second, allowances must be purchased through an auction system;

5) Any economy-wide legislation should seek to maintain fuel diversity among "clean" fossil, nuclear, and renewable resources, with adequate 24/7 baseload generating capabilities. Reliance on large-scale battery storage to back up renewable power sources cannot provide assurance of grid stability over prolonged episodes of severe weather; and

6) Minimal limitations should be placed on emission allowance banking and borrowing to reduce overall compliance costs. Similarly, a broad variety of domestic and international offsets should be available, including initiatives to help reduce deforestation.

Legislation reflecting these principles may face fewer political hurdles than some of the more extreme proposals being advocated today. While current science informs a commitment to large-scale global reductions to meet aggressive climate targets, the U.S. should act in a manner consistent with the preservation and expansion of highly-paid skilled jobs in the energy and transport sectors. A technology-oriented path for achieving significant long-term reductions appears more politically and economically feasible than calls to eliminate all fossil fuel use within the next decade or two.

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NOTE: The writer is an adviser to several energy-related labor unions concerned about climate change legislation and regulation.

…To the Oceans White with (Styro)foam

Posted on May 16, 2019 by David Van Slyke

On April 30, 2019, Maine Governor Janet Mills signed into law An Act to Prohibit the Use of Certain Disposable Food Service Containers, making Maine the first state in the nation to ban polystyrene foam (more commonly called Styrofoam) use in disposable food service containers coffee cups, takeout containers, packaged meat trays, egg cartons and the like.  The prohibition, which takes effect on January 1, 2021, bans restaurants, convenience stores, farmer’s markets, nursing homes, food pantries and other businesses from using the containers.

While Styrofoam containers have many advantages over alternatives – they are comparatively easy to manufacture, light (cost-effective to ship), relatively durable, have good insulating qualities and (by some measures) are lower in production impacts – they are among the most common sources of litter in the United States, found “[f]rom the mountains to the prairies….”

Further, polystyrene foam is petroleum-based, floats, is prevalent in the marine environment, and photodegrades and physically breaks down into smaller particles that are ingested (to ill effect) by marine life.  Further, recent research suggests that chemicals associated with polystyrene foam debris transfer to marine life that attaches itself to the debris.

I, for one, applaud the Maine Legislature and Governor Mills, as well as the other states (Maryland, California and Hawaii) that have considered such a ban and the numerous municipalities across “this land that I love” that have already banned Styrofoam use.

However, there is still work to be done.  As a member of Red Sox Nation (and, yes, a devoted drinker of Dunkin Donuts® coffee), the next time I hear an awe-inspiring rendition of “God Bless America” at Fenway Park, I may have a tough time blocking the thought that it is actually trillions of bits of polystyrene that are making “…the oceans white with foam.”

A Rational Counter to the Green New Deal

Posted on May 15, 2019 by Dick Stoll

For anyone serious about climate policy, I highly recommend Bob Sussman’s Comment in the May 2019 Environmental Law Reporter. Sussman, a former high-ranking EPA official in the Clinton and Obama Administrations, has produced an amazingly comprehensive review of where we have been and where – in his view – we should be going with climate policy and law in the U.S.

He recommends a detailed mix of legislative and regulatory proposals covering all sectors of the economy.  His proposals are based (necessarily) on the assumption that Democrats will control both the White House and Congress beginning in 2021.  If this happens, he says, the Democrats “will need to be ready with a fully developed and actionable climate policy agenda . . . building this agenda will take time and must begin now.”

So is Sussman – like many Democratic Presidential candidates – endorsing the Green New Deal (GND)?  Hardly!  His baseline is to seek “economically responsible and realistic” measures.  And when he says “realistic,” he means politically as well as technically.

Sussman criticizes the GND as a “wild card” formulated by “idealistic newcomers” who could “unwittingly torpedo their own efforts.”  He urges those formulating new proposals to account seriously for concerns about (1) economic disruption, (2) an expansive federal bureaucracy, (3) picking winners and losers among energy technologies, and (4) the U.S. competitive position internationally.  Democrats, he writes, “need to acknowledge these political realities.” 

These are concerns and realities, of course, that the GND essentially flaunts.  He warns that the GND “will polarize the electorate and alienate the political center,” which would lead to “yet another policymaking failure that allows GHG emissions and global temperatures to continue to rise unchecked.”

Sussman’s detailed proposals are summarized neatly in Table I to his Comment.  He is realistic in dividing proposals that will need new legislation as opposed to beefed up regulations.  For instance, he is careful to note that cap-and-trade or “beyond the fenceline” approaches would need new legislation.  In this regard, he recognizes that anything like the ambitious Obama Clean Power Plan would be unlikely to survive judicial review given the current composition of the Supreme Court.

For the power and manufacturing sectors, he endorses legislation providing an integrated cap-and-trade system.  I have one caution in this regard.  I would hope that such legislation would not look very much like the Waxman-Markey bill that passed the House in June, 2009 (and was never brought to the floor of the Senate).

As I wrote in a piece for BNA that year, the House bill contained short deadlines for dozens of new EPA regulations – deadlines that could never have been responsibly met. This would have set up an inevitable round of citizens suits forcing new deadlines coupled with massive judicial review opportunities.  All this in turn would produce tons of work for lawyers accompanied by very few tons of emission reductions.   Hopefully any new cap and trade legislation can be sufficiently specific on programmatic elements and numeric details so the program could get off the ground without suffering through years of judicial process.

A Good Defense is an Affirmative Defense

Posted on May 14, 2019 by Paul Seals

Citing cooperative federalism, the Environmental Protection Agency (EPA) Region 6 Regional Administrator has proposed to withdraw the agency’s 2015 determination that the affirmative defense provisions in Texas’ State Implementation Plan (SIP) applicable to excess emissions that occurred during upsets and unplanned events made the SIP substantially inadequate to meet Clean Air Act (CAA) requirements.  84 FR 17986 (April 29, 2019).  The proposal, if finalized, would reinstate Texas’ affirmative defense provisions that had been approved by the EPA in 2010 and upheld by the Fifth Circuit in 2013.  See Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir, 2013, cert. denied) holding that the EPA’s interpretation of the CAA to allow certain affirmative defenses as to civil penalties in section 110 SIPs was a permissible interpretation warranting deference.

The proposal was in response to Texas’ petition for the EPA to reconsider the 2015 Texas SIP call and reinstate EPA’s prior interpretation regarding affirmative defenses for malfunctions. 

In 2015, the EPA had reversed its interpretation of the legality of affirmative defense provisions in CAA section 110 SIPs following the decision of the D.C. Circuit in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014), which addressed the legality of affirmative defense provisions in a certain national emission standard for hazardous air pollutants (NESHAP) established under CAA section 112.  In vacating the affirmative defense provisions, the D.C. Circuit held that the CAA gives district courts sole authority in federal enforcement proceedings to determine whether a penalty for a violation of a section 112 NESHAP is appropriate.  The EPA reconsidered the legal basis for affirmative defense provisions in CAA section 110 SIPs and concluded that the reasoning of the D.C. Circuit in NRDC should extend to state affirmative defense provisions in CAA section 110 SIPs.  Texas and 16 other states were subject to a SIP call to revise their SIPs consistent with the 2015 interpretation.

EPA Region 6 now believes the policy position on affirmative defense SIP provisions for malfunctions as upheld by the Fifth Circuit’s Luminant decision should be maintained and that it is not appropriate to extend the D.C. Circuit’s reasoning in NRDC to the affirmative defense provisions in the Texas SIP.

It is important to note that the EPA Region 6 sought and obtained concurrence from the requisite EPA Headquarters office to propose an action inconsistent with the EPA’s interpretation of affirmative defense provisions contained in the 2015 SIP call.

What should the other 16 states, subject to the SIP call based on EPA’s 2015 interpretation, make of this proposal?  Does it simply reflect the special circumstances surrounding Texas’ affirmative defense provisions – a prior approval by the EPA, which was upheld by the Fifth Circuit?  Or, is it the first step in a new policy with national applicability?

Whatever Happened to the Conservative Belief in Markets?

Posted on May 3, 2019 by Seth Jaffe

After receiving an analysis showing that shutting the Jim Bridger and Naughton coal-fired electric generating plants in Wyoming would save ratepayers money, PacificCorp, the owner of the plants, announced that it would shut the plants and the mines that supply them as early as 2022.  Mark Gordon, the Republican Governor of Wyoming is not happy.

According to Greenwire (subscription required), Gordon said that:

I will advocate for a positive path where this utility and others are part of developing solutions rather than destroying communities and delaying progress on meaningful technological advances that keeps coal as part of a diverse energy portfolio and also address climate change.  The potential for early retirements of some coal-fired power plants means we drift further away from finding solutions for reducing carbon emissions.  (Emphasis very much added.)

If we stop burning coal, we’ll never figure out how to reduce carbon.  Rats.  Why didn’t I think of that?

However, I’m not here to criticize Gordon for thinking that we need to burn coal in order to reduce CO2 emissions.  I’m here to criticize him for thinking that it is reasonable for the Republican-led government of Wyoming to criticize private companies for taking economically rational decisions to reduce costs for ratepayers.  Indeed, Wyoming has not just criticized PacificCorp.  Wyoming has apparently enacted legislation requiring a utility that wants to close a coal plant to search for a buyer.  It apparently also would require the utility to purchase electricity from such a new buyer, so long as it does not increase customer bills.

Since when did Republicans start second-guessing private sector economic decisions?  Conservatives should stop worrying about the green new deal and start worrying about socialism in Wyoming!

Did a Bureaucratic Fog Envelop the Flint Water Crisis?

Posted on April 23, 2019 by Ronald R. Janke

The Flint water crisis began in April 2014 when the City of Flint switched its source of drinking water from Lake Huron to the Flint River without installing corrosion control treatment to protect against lead and other chemicals leaching from pipes into tap water.  The need for corrective action was elevated on September 24, 2015, when a Flint pediatrician, Dr. Mona Hanna-Attisha, released her finding that the number of young children with elevated blood lead levels had increased 90 percent after the Flint’s water supply was switched.  In her book, What the Eyes Don’t See (2018), Dr. Hanna-Attisha plaintively and repeatedly asks why the regulators didn’t do something earlier to protect the children, noting “It was their job.” 

The US EPA’s Office of Inspector General (“OIG”) addressed Dr. Hanna-Attisha’s question in two reports released in 2016 and 2018.  The 2016 report concludes that by June 2015 “EPA Region V had sufficient information and authority to issue an Emergency Order but did not.”  The Region V Administrator did issue an Emergency Administrative Order under the Safe Drinking Water Act to the State of Michigan, the Michigan Department of Environmental Quality (MDEQ) and the City of Flint on January 16, 2016, one day after President Obama declared a federal state of emergency for the City of Flint, and three months after Flint had switched to a source of water with corrosion control treatment.

The 2018 OIG report concludes that “Management Weaknesses Delayed Response to the Flint Water Crisis.” It blamed ineffective communications, ineffective assessment of risk, confused oversight roles, and a failure to use existing authority. The report recommended that EPA “strengthen its oversight of state drinking water programs to improve the efficiency and effectiveness of the agency’s response to drinking water contamination emergencies.”  Notably, the report did not find that the delayed federal response resulted from factors that are commonly blamed when federal agencies fail to act – lack of authority, standards, money, personnel or other resources.   Existing personnel ultimately issued an emergency order under long-existing legal authority.   The cause of the problem and the risk of ingesting lead were recognizable -- Dr. Hanna-Attisha was immediately apprehensive about lead ingestion when a former EPA employee told her that Flint's water lacked corrosion control treatment.  Lack of concern for environmental justice seems absent, as the Obama EPA Administration widely publicized protecting low-income and minority communities, like Flint, from toxic contamination to be an agency priority.

Rather, the OIG reports suggest the Flint water crisis was enveloped in a bureaucratic fog which prevented EPA employees from seeing the urgency of the problem with enough clarity to take prompt and effective corrective action.  The fog included patterns of unfruitful extended inter- and intra-agency and inter-governmental discussions, deference, disagreements and indecision.  For example, in February 2015 EPA received six-months of lead monitoring data in which the 90th percentile of results exceeded the Practical Quantitation Limit (PQL), which by rule required Flint to optimize corrosion control treatment.  At the same time, EPA was concerned that Flint’s lead sampling protocol was biasing lead results lower.  In April 2015 EPA learned that Flint did not have corrosion control treatment in place.  In July 2015 EPA informed MDEQ that Flint had been required to provide corrosion control treatment, and the Region V Administrator advised Flint’s Mayor that EPA would “work with” the City on lead issues.  Two weeks later, EPA received a second six-months of drinking water monitoring data revealing even higher lead levels.  With MDEQ disputing that corrosion control treatment was required at Flint, Region V agreed in August 2015 to request a legal opinion from the EPA Office of Water, but it did not submit an official request until September 30, 2015.  In response, the Office of Water, without mentioning Flint, issued not a legal opinion, but a guidance memo in November 2015.  On several occasions in September 2015, the Region V administrator contacted the MDEQ, the Mayor of Flint, the EPA Administrator, and the EPA Office of Research and Development urging a variety of protective actions.   

This bureaucratic fog also contributed to EPA’s inability to react to citizen complaints about the Flint water supply.   Between May 2014 and January 2016 when the EPA Emergency Administrative Order was issued, EPA Region V received 87 complaints about Flint drinking water conditions, 30 of which raised concerns about lead.  Generally, EPA staff responded to these lead complaints with form letters recommending that citizens contact the MDEQ or the Flint water department.  Six responses took over a year to issue, and the OIG found no response to 11 lead complaints.  Region V staff did not see these complaints as indicative of a problem in Flint, and certainly not a pressing one.  In sum, the bureaucratic fog that impaired the federal response to the Flint water crisis is noteworthy not just in the context of how EPA operates but also as to the broader contemporary concern over the existence of a Deep State that subjugates public concerns to its own needs, processes and schedules.

Uneasy Easements: The Use and Abuse of the Conservation Easement Tax Break

Posted on April 22, 2019 by Philip Tabas

Conservation easements have become the most popular approach for protecting lands, water, wildlife and historic structures in the US.  Thanks in large part to the Federal income tax deduction for gifts of permanent conservation easements enacted in 1980, over 27 million acres of private lands and the wildlife on them have been protected across the country using this conservation mechanism. A charitable gift of a conservation easement has afforded landowners a way to protect the places they cherish while providing conservation groups with a cost-effective land protection tool.

Today however, this conservation mechanism is under assault. Certain easement promoters are focused more on tax benefits than the conservation outcomes that can be achieved through conservation easements. The historically successful use of the conservation incentive by owners of environmentally significant land has led some to promote the abuse of conservation easements purely for their tax shelter value as an element of a complex financial instrument. Over the past ten years, there has been an extraordinary increase in tax deductions claimed by these investment partnerships for conservation easement donations. This activity has been brought to light by information provided by the IRS to Congress and publicized by several news publications.

Typically, tax shelter promoters have been selling interests in tracts of land to taxpayers/investors looking for large tax deductions. The promoter puts together a group of taxpayers/investors, in a legal form called a “syndication” or partnership, to buy the land, donate conservation easements and then sell or develop the underlying land later. In these arrangements, the promoter of the syndication often obtains an appraisal of the tract of land which uses unrealistic assumptions on which to base the appraised value and then grants conservation easements on that land using the inflated valuations. The resulting inflated charitable deductions are then split among the taxpayers/investors.

According to IRS data, these syndications claimed more than $20 billion in charitable deductions since 2010. In 2016 alone, 248 entities claimed $6 billion in deductions.  IRS data from 2018 show that a sampling of these transactions enabled investors to claim, on average, deductions valued at nine times the amount of their original investment. Based on the most current data available, the claimed tax value of donated conservation easements nearly tripled – from $1.1 billion to $3.2 billion – from 2013 to 2014.

Fortunately, there are efforts being undertaken to curb these practices. In December 2016, the IRS issued Notice 2017-10 wherein the IRS categorized donations from these easement syndications as “listed transactions.” This means that promoters of and participants in these transactions must report their syndication activities to the IRS or face fines. In September 2018, the IRS made abusive conservation easement tax shelters one of five new targeted compliance campaigns and in March 2019, the IRS listed syndicated conservation easements as one of its “Dirty Dozen” tax scams to avoid. In December 2018, the U.S. Department of Justice filed a civil complaint against one of the nation’s largest promoters of syndicated easement transactions for an allegedly abusive conservation easement syndication tax scheme. And, finally, in March 2019 the Senate Finance Committee Chair and Ranking Member initiated an inquiry with 14 individuals suspected of being involved in these syndication transactions. Despite the IRS and the DOJ announcing formal actions to thwart this abuse of the federal tax code, the promoters of these abusive deals continue to conduct business as usual.

A broad coalition of organizations including, among others, the Land Trust Alliance, Ducks Unlimited, The Nature Conservancy, The Trust for Public Land, The Conservation Fund, the Appraisal Institute, and the American Society of Farm Managers and Rural Appraisers is advocating for enactment of the Charitable Conservation Easement Program Integrity Act of 2019 (S. 170/H.R. 1992.) If passed, this bill would disallow charitable deductions for pass-through entities where tax benefits for donations of conservation easements are claimed when property is held for only a short time and appraisal valuations are excessive. The bill was introduced on January 18, 2019 by Senators Daines (MT- R) and Stabenow (MI-D) and on March 28, 2019 by Representatives Mike Kelly (PA-R) and Mike Thompson (CA-D).

Proponents of continued use of the syndicated approach for easement transactions argue that syndications bring needed new capital to conservation which otherwise might not be available. They suggest that the solution to abuses involves greater regulation of appraisers to produce more accurate and well-substantiated valuations and to require greater obligations on conservation organizations accepting easement donations to report to the IRS a description of each conservation easement donation they receive and the fair market value of those donations. However, under tax law requirements enacted in 2006, appraisals used to substantiate charitable contributions are already required to follow relevant professional standards known as the Uniform Standards of Professional Appraisal Practice, which require an assessment of the economically realistic highest and best use of the land. And, also under current law, donors are already required to provide to the IRS a description of any conservation easement valued at $5,000 or greater as well as a statement of the conservation purpose that the easement is designed to serve.

Continued abuse of the charitable conservation easement tax deduction by syndicated easement transactions, which may have allowed some taxpayers to profit by gaming the tax code deprives the federal government of billions of dollars in revenue, distorts the fiscal impact of legitimate conservation easement gifts and adversely affects other related conservation easement programs (e.g. state tax credits for easement gifts.) If allowed to stand, these arrangements could cause lawmakers and the public to question the continued legitimacy of mainstream conservation transactions and may result in challenges to continuation of the Federal conservation easement tax benefit itself.

Conservation transactions and practices that do not always meet both the letter and the spirit of easement law must not be allowed to endanger the thousands of legitimate conservation easements and the well-intentioned, conservation-minded landowners behind them.

Clean Water Act §401—Whose Certification Is It?

Posted on April 19, 2019 by Richard Glick

As part of the Administration’s policy in favor of domestic oil and gas development, President Trump issued an Executive Order on April 10 “Promoting Energy Infrastructure and Economic Growth.”  The EO seeks to make the regulatory process more efficient and to create “increased regulatory certainty.”   

A policy focus in the EO is water quality certification under section 401 of the Clean Water Act.  Section 401 provides that before a federal agency may approve a project that could result in a “discharge” to navigable waters, the state or tribe with jurisdiction must certify that the discharge would comply with water quality standards, effluent limitations and “other appropriate requirements of State law.”  The statute imposes a one-year period for the state or tribe to act. 

This issue arises most often in the context of permits issued by the Corps of Engineers under section 404 of the CWA to fill wetlands, and licenses issued by the Federal Energy Regulatory Commission for hydroelectric projects under the Federal Power Act.  Both trigger state review under section 401.  Gas pipelines and LNG terminal developments almost always involve stream crossings or shoreline work, which means filling of wetlands.

The EO directs EPA to take the lead to review federal policy and regulations concerning section 401 implementation.  In particular, EPA is to revisit the 2010 interim guidance entitled “Clean Water Act Section 401 Water Quality Certification: A Water Quality Protection Tool for States and Tribes.”  In its review, EPA is directed to focus on a list of issues, including the appropriate scope of 401 review, the “types of conditions that may be appropriate to include in a certification,” reasonable review times and how much information should be requested of the applicant.

Who could be opposed to improved regulatory efficiency and certainty?  To be sure, the section 401 process can be contentious and time consuming. Although section 401 prescribes a one-year review period, the issues are thorny and it has become a common practice for applicants to withdraw and refile applications to restart the clock.  A recent decision by the D. C. Circuit Court of Appeals throws a shadow on that practice, but one year doesn’t necessarily mean one year.  It is also true that states have used section 401 as a cudgel to block LNG developments, as in the AES Sparrows Point LNG Project.

The problem with the EO is that it directs EPA to “fix” a problem over which it has little authority.  Section 401 is a program administered by the states and EPA has just a marginal role to ensure that one state’s 401 decision doesn’t violate a downstream state’s water quality standards.  Even EPA’s 2010 interim guidance is just a compendium of case law and general principles to aid state implementation, not a document that establishes policy.

Indeed, the scope of state section 401 authority is broad, and states use that authority to promote state policies far beyond water quality standards.  Any limitations on state discretion over the process and conditions of certification are likely to come from the courts, not EPA.  States are not shy in asserting their sovereignty and no state is going to cede any of its authority to EPA, regardless of what any new guidance or rules might suggest.

ACOEL Announces Its First Memorandum of Understanding with a Cuban Environmental Foundation

Posted on April 18, 2019 by David B. Farer

For the past three years, the Cuba Working Group of the ACOEL International Pro Bono Committee has been making concerted efforts to establish a formal relationship with a Cuban entity that will allow Fellows of the College to engage in pro bono activities to assist the Cuban people in addressing particular environmental concerns and issues.

We are pleased to announce that the College has now entered a Memorandum of Understanding with the largest environmental foundation in Cuba, the Foundation Antonio Nunez Jimenez of Nature and Humanity.

Figure 1- Signing of the MOU between ACOEL and FANJ, February 14,2019 by Foundation President Liliana Nunez Velis and ACOEL Fellow David Farer

The MOU was signed at a formal ceremony at the offices of the Foundation in Havana on February 14, 2019.  Liliana Nunez Velis, President of the Foundation and daughter of founder Antonio Nunez Jimenez, signed for the Foundation.  I was there on behalf of the College with delegation of authority from ACOEL President Allan Gates.

Figure 2 - Handshake after the MOU signing: Nunez Velis and Farer

Meetings ensued with senior foundation staff on developing ideas for initial collaborations.  We will be communicating with ACOEL Fellows further once the topics are set and we are prepared to solicit interest for participation.

We also met with the environmental law faculty of the University of Havana, with whom we also had discussions and with whom we hope to proceed on collaborative projects in the future.

Figure 3 - Environmental Law faculty at the Univ. of Havana, with ACOEL Fellow David Farer and his wife Elisa King, in front of the Alma Mater statue on the stairway entrance to the University

The Foundation -- also known as FANJ -- is a non-governmental institution engaged in research and advancement of environmental projects and programs from both scientific and cultural perspectives.  They have described their mission as that of creating a culture of nature, seeking harmony between society and the environment.

Our efforts to establish such a relationship began with an initial delegation to Havana in September 2016.  This led to an invitation to submit a paper for consideration in preparation for the XI International Convention on Environment & Development, in Havana.  Mary Ellen Ternes and I submitted a paper, Lessons Learned: Effective Environmental Regulation of Critical Infrastructure Development & Operation.  It was accepted, and Mary Ellen and I presented it at the July 2017 convention in Havana.   Our paper on the topic was also published in the proceedings of the convention.

Subsequent communications ensued, and then recent discussions in both New York City and Havana led to development of the MOU with FANJ and the recent agreement on its terms.

As the MOU recites, ACOEL and FANJ are looking forward to separately engaged ACOEL Fellows working with FANJ representatives to explore the contributions that each organization's Fellows and representatives can make to the other, including development of training on specific topics in environmental law, participation in events and advice on capacity building, and in sharing the knowledge and experience of the representatives and Fellows of the two organizations.

New UN Special Rapporteur Links the Right to a Healthy Environment to Air Pollution’s Deadly Impact Across the Globe

Posted on April 12, 2019 by Susan Kath

Professor John Knox, former UN Special Rapporteur for Human Rights and the Environment, began in 2012 to study the obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment, as part of the United Nations Human Rights Council special procedures. When his two terms ended in 2018, he had mapped the statements of human rights bodies on human rights obligations relating to the environment, and produced thematic reports covering human rights obligations relating to climate change, biodiversity, and children’s rights. Knox also compiled more than 100 good practices in fulfilling those obligations and helped to establish a website for environmental defenders. His capstone contribution, the Framework Principles, identifies 16 principles relating to human rights and the environment and explains how existing human rights obligations should be applied in the environmental context.

The ultimate goal, UN recognition of the human right to a healthy environment, has now been put before the General Assembly by Knox’s successor, Professor David Boyd, who presented a comprehensive argument for the right to that body in the fall of 2018. Boyd, a champion of the right, will be vigorously campaigning for its recognition over the next three years, along with other projects for his mandate.

With the issuance of his most recent report in February, Boyd looks beyond the general right and focuses on the components of the right---in this case, the right to breathe clean air. Around the world, air quality is degraded by both ambient and household air pollution, with the adverse health effects highest in low- and middle-income countries. Notably, more than 90 percent of the world’s population lives in regions that exceed World Health Organization guidelines for healthy ambient air quality, specifically with respect to fine particulate matter (PM 2.5). What does this mean in real terms? It means that over 6 billion people, including 2 billion children, are breathing polluted air with adverse consequences: taken together, ambient and household air pollution contribute to 7 million premature deaths annually, including the deaths of approximately 600,000 children.  Unsurprisingly, most of those impacted are also the most vulnerable—women, children, the elderly, minorities, indigenous peoples and members of traditional communities, and people living in poverty.

So what does Boyd offer as the way forward? First, he observes that poor air quality has implications for an array of human rights: the rights to life, health, water, food, housing and an adequate standard of living. Second, he reaffirms the position advanced by Knox that States have obligations to protect the enjoyment of human rights from environmental harm. As embodied in Knox’s Framework Principles, that means States have procedural, substantive, and special obligations towards those in vulnerable situations. Third, he identifies the seven key steps that States must take in fulfilling the right to breathe clean air:

  • monitor air quality and impacts on human health
  • assess sources of air pollution
  • make information publicly available, including public health advisories
  • establish air quality legislation, regulations, standards and policies
  • develop air quality action plans at the local, national, and, if necessary, regional levels
  • implement an air quality action plan  and enforce the standard
  • evaluate progress and, if necessary, strengthen the plan to ensure that the standards are met

With each of these steps, States must fully inform the public and provide an opportunity to participate in the decision-making process. Businesses, a major source of air pollution, should comply with the UN Guiding Principles on Business and Human Rights and the Children’s Rights and Business Principles. Boyd also notes that special attention must be paid to environmental defenders engaged in activities to protect the right to clean air.

Boyd also explains that not all the news is bad, sharing a number of good practices, such as laws, policies, programs and initiatives that are lessening the impact of human rights violations caused by air pollution. These include establishing or improving air quality monitoring networks in places like Morocco and Azerbaijan and decreasing the proportion of households using solid fuels for cooking and heating in Latin America.

Boyd closes the report with a list of 20 recommendations that States should consider as part of their national air quality action plans, and he also implores us to act:  

The failure to respect, protect and fulfill the right to breathe clean air is inflicting a terrible toll on people across the world. The statistics presented in the present report depict a public health catastrophe, yet the numbers fail to capture the magnitude of human suffering involved. Each premature death, every illness and every disability afflicts an individual with hopes, dreams and loved ones. Air pollution is a preventable problem. The solutions-laws, standards, policies, programmes, investments and technologies-are known. Implementing these solutions will of course entail large investments, but the benefits of fulfilling the right to breathe clean air for all of humanity are incalculable.

Incalculable, indeed. And worth our collective effort to pursue at every level.

“A Hard Rains A-Gonna Fall” – Utility-Scale Solar Projects Creating Significant Stormwater Issues

Posted on April 9, 2019 by Mark R. Sussman

With apologies to Bob Dylan for taking the name of his song out of context, hard rains are going to fall, and some developers of utility-scale solar projects seem to have underestimated the damage that such rains can cause.  Over the past several years, a number of large scale solar projects in Connecticut have discharged significant amounts of sediment into wetlands and watercourses, harmed down-gradient property owners, and posed a threat to habitat essential to threatened or endangered species.  These projects have violated stormwater permitting requirements, resulting in the issuance of cease and desist orders, the imposition of civil penalties and remediation requirements, and triggering justifiable public opposition to renewable energy projects.

Utility-scale solar projects in Connecticut generally range from 10 to 20 megawatts (MW).  These projects can disturb upwards of 100 acres of land.  Usually the site selection process for these projects focuses on the ability to interconnect to the power grid, land availability, and cost.  Stormwater management issues have been a secondary concern, typically addressed in the first instance by conceptual, high level plans, rather than through site-specific soils investigations, detailed grading plans, and rigorous stormwater design calculations and analysis. 

In Connecticut, utility-scale solar projects must first be approved by the Connecticut Siting Council.  In December 2017, the Council denied an application to site a 50 MW project that would have disturbed 270 acres.  The Council denied the application, without prejudice, in large part because the application did not contain sufficiently detailed information regarding grading, and erosion and stormwater control.  The Council was concerned about stormwater management and sedimentation impacts to wetlands and watercourses that were in close proximity to the limits of disturbance and the resulting detrimental effect on water quality.

Once a solar project is approved, the developer must apply to the Connecticut Department of Energy and Environmental Protection (“DEEP”) for the General Permit for the discharge of Stormwater from Construction Activities or for an individual stormwater permit. DEEP approved the stormwater registrations for the early utility-scale solar projects in Connecticut without significant scrutiny, with the apparent expectation that the construction contractors and their stormwater professionals understood how to minimize erosion and sedimentation discharges during construction.  Unfortunately, there have been numerous incidents of significant stormwater damage and complaints from down-gradient property owners during and after the construction of solar facilities.  These problems have occurred either because the construction contractor, in an effort to meet contract deadlines, may have skipped steps such as failing to stage construction and clear only five acres at a time, or because the site engineers miscalculated the stormwater impacts from the extensive disturbance of the land’s natural condition.  In light of the repeated problems caused by erosion and sedimentation at solar construction sites, Connecticut has required more detailed site-specific documentation regarding stormwater flows and management systems, and has become more aggressive in its enforcement.   

In 2017 and 2018, DEEP issued several cease and desist orders temporarily halting the construction of solar projects until the projects revised their stormwater pollution control plans and installed improved erosion controls.  The Department also issued consent orders to some projects requiring remediation of impacted wetlands, watercourses and down-gradient properties, habitat restoration plans for some threatened species, and the posting of financial assurances of as much as $1 million. Two recent consent orders included civil penalties of between $200,000 and $575,000.  The Department also recently rejected a stormwater application for a 20 MW solar project, concluding that the submitted stormwater pollution control plan lacked sufficient detailed information necessary for the design of erosion and sediment controls and long term stormwater management measures post-construction to demonstrate that the project would adequately control stormwater impacts.

The lesson that should be learned from the Connecticut experience with constructing utility-scale solar projects is that developers need to devote sufficient resources to evaluate and design appropriate erosion and sedimentation controls earlier in the development process, and they need to hire qualified stormwater management consultants and pay careful attention to the proper implementation of stormwater controls, both during and after construction.  This means going beyond describing generic stormwater management controls in their applications for approval, and taking stormwater management seriously.  They need to understand that “A Hard Rains A-Gonna Fall” and cause damage to the environment if sufficient stormwater management controls are not correctly implemented.  If solar project sponsors are not careful, the public perception of solar projects will be negatively impacted by these stormwater-induced incidents, and support for these renewable energy projects will decline.

North to the Future: Alaska and the Risks of Pursuing a Trump Legacy

Posted on April 5, 2019 by Peter Van Tuyn

On the last Friday in March, Judge Sharon Gleason of the Federal District Court for the District of Alaska issued two opinions in closely-watched cases* concerning federal public lands and waters in and offshore of Alaska.  In both cases, the Trump administration’s actions were overturned by the court, having immediate impact on two State of Alaska priorities and potential impact on a number of other State and private development efforts. 

The first case concerns a land trade approved by Interior Secretary Ryan Zinke in which the United States agreed to transfer formal Wilderness in the Izembek National Wildlife Refuge to an Alaska Native Corporation.  Izembek Refuge is internationally significant and of critical importance to many species of wildlife, including migratory waterfowl.  For example, virtually the entire global populations of Pacific Brant and Emperor Geese migrate through Izembek.  The land trade was intended to enable the construction of a road between the Alaska communities of Cold Bay and King Cove.  In multiple analyses since the 1980s the Interior Department had found that such a road would harm wildlife in the Refuge.  In 2013 Interior Secretary Sally Jewell formally rejected a land trade due to harm it would cause to “irreplaceable ecological resources,” and because “reasonable and viable transportation alternatives” exist between the communities.  In 2018, Secretary Zinke reversed course and approved the land trade.  A coalition of conservation groups then sued.

In rejecting the land trade, Judge Gleason found that Secretary Zinke had not addressed anywhere in the record his reasons for reversing course; indeed, he had not even acknowledged the change in agency position. Relying on the seminal U.S. Supreme Court administrative law cases of Motor Vehicle Manufacturers v. State Farm and FCC v. Fox, which require an acknowledgement and reasoned explanation for such a change of course, Judge Gleason invalidated the land trade, writing that while a court should “‘uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,’ a court may not ‘supply a reasoned basis for the agency’s action that the agency itself has not given.’”

Later that same day Judge Gleason issued an opinion in a challenge to a 2017 President Trump executive order concerning areas where offshore oil and gas leasing can take place.  In that case, conservation organizations and an Alaska Native-focused NGO challenged Trump’s  revocation of President Obama’s earlier withdrawals from oil and gas leasing of most of the United States’ Arctic Ocean and a number of canyons within the Atlantic Ocean. 

This lawsuit turned on an interpretation of presidential withdrawal authority under the Outer Continental Shelf Lands Act. Section 12(a) of OCSLA provides the president with the clear authority to withdraw certain areas of the Outer Continental Shelf from oil and gas leasing, and the central question in the lawsuit was whether it also provides authority for a president to undo existing  withdrawals that were intended, like Obama’s Arctic and Atlantic actions, to be of unlimited duration.  Judge Gleason found that section 12(a) authority works only in the direction of presidential withdrawals, and not the undoing (or “revocation”) of such withdrawals.

Looking to the future, should Acting (and likely soon-to-be-confirmed) Secretary David Bernhardt revisit the Izembek land trade, he will need to either win on appeal during his tenure (should he take one) or directly confront the agency’s previous rejection of a land trade and the reasons for that rejection.  Furthermore, Trump’s “energy dominance” effort to expand offshore oil drilling in the Arctic Ocean is dealt a blow.  Notably, the OCSLA issue is similar to one raised in litigation over Trump’s revocation of National Monument designations under the Antiquities Act and Judge Gleason’s treatment of the issue thus may influence other courts. 

More broadly than even these implications, the two Gleason decisions may portend the result of other Alaska-related federal policy and decision-making.  For example, the Corps of Engineers is fast-tracking Clean Water Act section 404 permitting for the proposed Pebble mine in Southwest Alaska.  And the proposed mine’s developers are trying to get EPA to reverse course on its intended use of its Clean Water Act section 404(c) authority to restrict or prevent any Corps’ permit for the mining of the Pebble ore deposit.  EPA’s proposed restrictions were based on a Bristol Bay Watershed Assessment, which the developer had waived challenging in settling a previous lawsuit with EPA.  Given the clarity of Judge Gleason’s Izembek opinion on what it would take for the agency to reverse course, and the settled science of EPA’s watershed assessment, securing a 404 permit won’t be as simple for proponents as winning a policy argument, which appeared to be the case with the Izembek land trade. 

Looking back to the Interior Department, the Bureau of Land Management is moving forward with oil and gas lease sales on the Coastal Plain of the Arctic Refuge.  Critics of that effort, including a former Interior official, say the legal process is being illegally shortcut, which is an attribute it may thus share with the Izembek land trade.  Interior is also speedily-redoing a 2013 management plan for the 23 million acre National Petroleum Reserve with a goal of expanding oil and gas leasing in the Reserve starting in 2020.    

Ironically, on Thursday, March 28, the day before Judge Gleason issued her decisions, Interior Secretary-nominee David Bernhardt had his confirmation hearing before the U.S. Senate Energy and Natural Resources Committee.  This committee is chaired by Alaska’s Senator Lisa Murkowski, who is a supporter of expanded oil and gas development on federal lands in and offshore of Alaska.  The judicial smackdown the next day, however, is sure to complicate Bernhardt’s efforts to implement such an agenda before the next presidential term, which is the timeframe which appears to underly Interior’s and other agencies’ efforts on Alaska issues.  And if the rush to secure more decisions in this presidential term leads to more losses in court, Alaska development interests could face complicated bureaucratic and legal landscapes, and strong political backlash, well into the future.

* Izembek case:  Friends of Alaska Wildlife Refuges, et al, v. Bernhardt, 3:18-cv-00029-SLG (March 29, 2019, D. Ak).

* Arctic OCS case:  League of Conservation Voters, et al, v. Trump, 3:17-cv-00101-SLG (March 29, 2019, D. Ak)

 

Down the Rabbit Hole: Injection Wells and Subsurface "Trespass"

Posted on March 29, 2019 by G. Alan Perkins

When an oil and gas operator obtains all proper permits for a saltwater disposal well and responsibly injects fluids into the approved deep subsurface formation, and some of the injected fluid ultimately migrates laterally within the permitted injection formation beneath the lands of another, has the operator committed an actionable trespass?  And if so, what should the measure of damages be?  Despite widespread use of injection wells under strict state and federal regulation, the law concerning subsurface “trespass” by fluids injected into disposal wells is spotty.  Many states have yet to directly address the issue.  Perhaps due to the proliferation of oil and gas production in regions of the country not accustomed to petroleum production, such cases are becoming more frequent.

Nearly all formations that contain oil or natural gas also contain saltwater.  So, it should come as no surprise that the process of producing oil and gas also produces saltwater – a lot of saltwater.  In 2007, the estimated volume of produced water from U.S. onshore oil and gas production was 21 billion barrels, or about 2.4 billion gallons per day.  Produced water that cannot be reused or recycled must be disposed of in a safe and effective manner.

Injection wells (often called “disposal wells” or “saltwater disposal wells”) that inject fluids associated with oil and gas production are considered “Class II” injection wells in the Underground Injection Control program.  Disposal wells typically inject produced water into zones depleted of oil and natural gas and that also naturally contain saltwater similar to the fluids being injected.  Such wells have been common in oil and gas producing states since the 1930s.  U.S. EPA reports that approximately 180,000 Class II injection wells operate in the United States. 

The industry, along with state and federal regulators, determined decades ago that the safest and most environmentally responsible way to dispose of produced water was through the proper use of injection wells.  Injection wells dispose of produced water in deep geological formations, isolated from underground sources of drinking water, to prevent soil and water contamination.  U.S. EPA regulates injection wells in accordance with stringent regulations pursuant to the federal Safe Drinking Water Act, and 33 states have delegated authority to be the primary enforcer (with a few others having joint authority with EPA).

Common law trespass can be described generally as “any entry on land that is in the peaceable possession of another, regardless of the willfulness of the entry, the degree of force used, the duration of the intruding presence, and the absence of damage to the land.”  Under the common law, an invasion alone was sufficient to sustain a trespass action, regardless of whether any damages could be proven.  This formulation may be adequate when applied to a pasture, home, or driveway.  But troublesome issues immediately arise when the focus turns to fluids moving unseen through geological formations thousands of feet below the ground surface.  Simply confirming whether the fluids in question are present in the deep subsurface of a particular tract of land is problematic, much less discovering how much is there and how long it has been there.

The common law cause of action for trespass was created before significant technological advances existed, such as the advent of aircraft and deep subsurface injection wells. Common law trespass typically involves the disturbance of the “peaceable possession” of property by another.  Surely, injecting produced water into a confined deep formation that already contains saltwater does not, in reality, disturb a landowner’s “peaceable possession” of his “property,” and thus should not give rise to an actionable trespass.  Just as a landowner does not “possess” the heavens, so neither should a property owner be considered to “possess” the deep subsurface unless he or she has at a minimum drilled a well or opened a mine to exploit it.

Over 70 years ago, in the well-known case of United States v. Causby, 328 U.S. 256 (1946), the common law yielded to societal needs to accommodate modern air travel so long as the use is regulated and does not unreasonably intrude on the owner’s use and enjoyment of the surface.  Class II commercial disposal wells are also highly regulated and serve an important societal purpose – the necessary, safe and environmentally protective disposal of vast amounts of produced water. The Ohio Supreme Court explicitly adopted this reasoning in expressing the law in Ohio with regard to migration of injected fluids from a disposal well, stating:

[O]wnership rights in today’s world are not as clear-cut as they were before the advent of airplanes and injection wells.  Consequently, we do not accept appellants’ assertion of absolute ownership of everything below the surface of their properties.  Just as a property owner must accept some limitations on the ownership rights extending above the surface of the property, we find that there are also limitations on the property owners’ subsurface rights.

Chance v. BP Chems., Inc., 670 N.E.2d 985, 992 (Ohio 1996).

Disposal of produced water is an essential part of the production of oil and gas, and it is impossible to accurately predict or restrict the movement of injected fluid through the injection zone.  Of course, some might advocate simply eliminating oil and gas production as a happy solution.  But realistically that is not going to happen anytime soon, and we should all agree that produced water should be handled in a safe and environmentally responsible manner.  Given the vital need for safe disposal of produced water, and the pervasive regulatory scheme governing such wells, the operator of a permitted injection well should not be subject to trespass liability for lateral movement through the permitted injection zone absent any damage.  Recognizing a per se trespass liability without any actual injury could impact many thousands of currently operating permitted injection wells, and essentially create a new strict liability tort.

New Jersey PFAS Directive

Posted on March 28, 2019 by John A. McKinney Jr

Co-authored by Robert H. Crespi – First published on the CSG Environmental Law Blog.

On March 25, 2019, the New Jersey Department of Environmental Protection (“DEP”) issued a Statewide PFAS Directive to a number of companies associated with the manufacture of poly- and perfluoroalkyl chemicals (“PFAS” which includes PFNA, PFOA and PFOS and other substances) and their replacement compounds.  Pursuant to the Directive, these companies are to reimburse DEP’s past and future costs of investigating, monitoring, testing, treating, and remediating New Jersey’s drinking water and waste systems, private drinking water wells and natural resources including groundwater, surface water, soil, sediments and biota.  The Directive requires certain information from these companies as to future costs and information related to the historic uses of PFAS and replacement chemicals including “information ranging from use and discharge of the chemicals through wastewater treatment plants, air emissions, and sales of products containing the chemicals to current development, manufacture, use and release of newer chemicals in the state.”  The Directive notes that failure to comply will increase Respondents’ potential liability to the DEP in an amount equal to three times the cost of arranging for the cleanup and removal of the discharges, which the Directive deems a “statewide public nuisance.”

This Directive states New Jersey’s resolve that these companies, and not New Jersey residents, pay the costs necessary to protect “public health and safety and the state’s environment.”  The DEP contends that this Directive will require these companies to “fund millions of dollars in assessment and cleanup efforts” pursuant to the state’s Spill Compensation and Control Act, the Water Pollution Control Act and other state environmental laws.

New Jersey has been in the forefront of states acting to address PFAS.  At the time of the Directive’s issuance, DEP Commissioner Catherine R. McCabe referenced the “near daily” finding of PFAs in New Jersey’s environment. As noted in the press release announcing the Directive’s issuance, New Jersey was “the first state to adopt a maximum contaminant level (MCL) of 13 parts per trillion for PFNA in drinking water, the strictest such standard in the nation. New Jersey's standards supersede those of the U.S. Environmental Protection Agency, which does not regulate the chemicals that have been linked to cancer and other illnesses … Earlier this month, the DEP established interim specific groundwater quality standards for both PFOA and PFOS, at 10 parts per trillion. New Jersey is among the first states to pursue regulation of these compounds.”

Of course, the Directive is only the opening salvo.  More is sure to come.

What Happens When the Green New Deal Meets the Old Green Laws?

Posted on March 27, 2019 by JB Ruhl

Representative Alexandria Ocasio-Cortez and Senator Ed Markey made headlines when introducing the Green New Deal resolution to Congress. Within milliseconds, contesting waves of support and opposition flooded the news wires, social media, and blogs. Critics focused on the proposal’s perhaps overly hopeful (some say, delusional) absence of any accounting for the funding, political feasibility, and technological capacity needed to get to net zero greenhouse gas emissions by the Green New Deal’s target date of 2050 (some Green New Dealers advocate an even earlier date), especially under the other conditions they demand. After all, the Green New Deal movement is basically asking our nation to replace one national energy infrastructure with another, plus demanding that government also ensure social justice for present and future generations, provide millions of new jobs, install an awesomely sustainable economy, extend free health care, and the list goes on.

But let’s put all that aside. Let’s say we had a blueprint for the Green New Deal’s carbon goal and a whole lot of money to spend. The stark reality is that the Green New Deal is going to run smack dab into the wall of the Old Green Laws. I’m talking about the National Environmental Policy Act, the Endangered Species Act, Section 404 of the Clean Water Act, the National Historic Preservation Act, the Migratory Bird Treaty Act, the Clean Air Act, the…do I really need to keep going, because the list is really long.

What the Green New Deal movement simply does not seem to appreciate is that the nation’s existing energy infrastructure is a vast physical, social, and economic entity that has been defined in its geographic, technological, and economic dimensions largely by decades upon decades of lawsuits brought under those Old Green Laws by many of the interest groups now behind the Green New Deal. The infrastructure the New Green Deal envisions—particularly if it rules out hydropower and nuclear power—can’t just land where the existing fossil fuel energy infrastructure is located, as if we are just changing car tires. Wind power has to follow wind, and solar power has to follow the sun, and neither of those geographic footprints has much overlap with where the fossil fuel infrastructure is currently located. So, making the Green New Deal happen means putting vast new renewable energy production facilities on the landscape. And then, because our existing transmission grid is based on where fossil fuel generation occurs, which is generally not where solar and wind generation will occur, we’ll need to put new transmission lines on the landscape. Just looking at NEPA alone, it would take 25 years just to get the Environmental Impact Statements done and through the courts before the first shovel of dirt is moved!

To put it bluntly, this is going to be ugly. Environmental protection special interest groups already are attacking wind and solar energy projects around the nation, claiming they will kill too many bats, birds, and desert creatures. Yet, if you were to map out what would be needed to implement the Green New Deal, we’ll need to locate new wind and solar power generation infrastructure, and their transmission line infrastructure, on the landscape at a pace and scale unprecedented in our nation’s history. Believing that everyone will be behind that is naïve. Wherever this Green New Deal landscape transformation machine goes, it will face opposition by narrow-interest environmental groups, not-in-my-backyard landowners, states, local governments, and companies threatened by the new regime, and so on. To think otherwise is delusional. And their first weapon of choice is going to be the Old Green Laws. After all, look around and ask, what has for decades impeded and often stopped new fossil fuel infrastructure such as pipelines, processing facilities, and port facilities. It’s the Old Green Laws.

Looking into the Law 2050 future, the “green” interests that are promoting the New Green Deal sooner or later will have to come up with a convincing soundbite explanation for how they propose to comply with the Old Green Laws in a way and time frame that meets their 2050 deadline. Doing so without in some substantial ways relaxing the current Old Green Laws seems implausible, but relaxing any current regulations seems a nonstarter for Green New Deal politicians. In other words, the Green New Deal is between a rock and a hard place, and they can blame their predecessor “green” generations who designed and implemented the Old Green Laws that must be satisfied regardless of the climate virtues of the Green New Deal.

One can easily imagine that many industry and landowner special interest groups long pitted against the environmental protection special interest groups have grins on their faces, as the latter will seem to have been hoisted by their own petard. It is not hard to envision how the Green New Deal will splinter the environmental interest group universe—indeed, more than 600 groups recently signed a letter to Congress supporting the Green New Deal agenda, but a good number of leading national groups such as the Sierra Club and Audubon Society did not sign on.

There is perhaps a third path, however. To make its agenda complete, the Green New Deal could propose a new environmental law regime as well, one that does not tinker with the Old Green Laws and thus face the claim of “deregulation” or “backsliding.” The Green New Deal must acknowledge the environmental disruptions its infrastructure proposal will cause and design an environmental planning, assessment, permitting, and regulatory regime (perhaps even with--gasp!--market mechanisms like trading and taxes) built from scratch around concepts of resilience, adaptive management, and collaborative adaptive governance. This will mean dispensing with the Old Green Laws’ morass of comprehensive pre-decision studies and rounds of lawsuits. In short, the New Green Deal needs New Green Laws.

Clearing the Air on the International Emissions

Posted on March 26, 2019 by David Flannery

In an earlier posting, I noted the initial efforts of USEPA in addressing the international transport of air pollutants and the role those pollutants have in impacting air quality in the U.S. In the intervening months, several developments related to USEPA policy on international transport have occurred that are worth noting here.

While international transport is specifically addressed in Section 179(B) of the Clean Air Act, much of USEPA’s recent action has arisen in the context of the development of state implementation plans under Section 110(a)(2)(D) of the Clean Air Act. The D.C. Circuit has stated that “section 110(a)(2)(D)(i)(I) gives EPA no authority to force an upwind state to share the burden of reducing other upwind states’ emissions,” North Carolina, 531 F.3d at 921, thus raising the question about whether the Court would apply the same logic to emissions from another country.

On March 27, 2018, USEPA issued a guidance memorandum in which it set forth several flexibilities that states might consider as they developed their Good Neighbor implementation plans under Section 110(a)(2)(D)(i)(I). That memorandum (entitled “Information on the Interstate Transport State Implementation Plan Submissions for the 2015 Ozone National Ambient Air Quality Standards under Clean Air Act Section 110(a)(2)(D)(i)(I)," prepared by Peter Tsirigotis, March 27, 2018, noted that a number of non-U.S. sources contribute to nonattainment in the U.S. and it invited comments on how to account for international transport in the development of state programs.

On April 12, 2018 the President issued a memorandum in which he stated that “CAA provisions addressing international emissions confirm that EPA should consider fully those emissions in evaluating the good neighbor obligations” and that “the data suggest that removing the contribution of international anthropogenic emissions would further support EPA’s determination that no additional action by upwind sources is required to reach attainment by 2023” with respect to the 2008 ozone NAAQS. See Presidential Memorandum for the Administrator of the Environmental Protection Agency (Apr. 12, 2018)

On August 31, 2018 USEPA issued a summary of comments submitted with respect to its March 27, 2018 memorandum in which it noted that states submitting comments urged USEPA to offer guidance on three issues of greatest interest to them. These included (1) identifying maintenance monitors, (2) determining thresholds for significant contribution, and (3) accounting for international emissions.  Since that time USEPA has issued guidance addressing significant contribution and maintenance monitors, but has not yet issued a comparable guidance addressing international transport.

On the Federal Register of December 8, 2018, USEPA did, however, publish a final rule addressing the implementation of the 2015 ozone national ambient air quality standard. In the press release that accompanied the issuance of that rule the following comments were offered:

This final rule grants states the flexibilities they need to incorporate factors that are often outside their control, such as international air pollution, so they can meet the 2015 ozone standards and continue our nation’s tremendous clean air progress,” said EPA Acting Administrator Andrew Wheeler. “By working with states to provide greater regulatory certainty, we are helping them improve air quality, protect public health, and enhance economic growth.

As we move further into the year we will look for additional guidance addressing further the application of international emission to the submittal of state plans under the “Good Neighbor” provisions of Section 110(a)(2)(D) of the Clean Air Act.

Any Press Is Good Press

Posted on March 25, 2019 by Seth Jaffe

Last week, the Washington Post (subscription required) published an article about the Trump Administration’s inability to defend many of its policies in court. Yours truly was among those quoted. I liked the story and it was largely accurate, including its quotes from me, except that Fred Barbash stated that I had “been looking forward to deregulation under Trump.”  On that issue, I can only say that Fred and I had a misunderstanding, because I was never looking forward to deregulation under Trump.

Aside from the relatively unimportant and mildly humorous issue related to me maintaining credibility with a number of people whom I respect, I’m doing this post because that line highlights an important issue – there’s a significant difference between deregulation and regulatory reform. I think much of our environmental regulatory structure could benefit from reform, but I don’t question the benefits of environmental regulation and I don’t support “deregulation.”

Indeed, as the article demonstrates quite well, President Trump has shown no interest in regulatory reform.  He just wants to kill as many regulations as possible – or at least persuade his supporters that that’s what he wants to do.  Like so many things about this President, he doesn’t actually care about results as much as he cares what his supporters think about him – that’s one reason why the article is a valuable piece of reporting.

And that's also part of the reason why, as I said in the article, Trump has set regulatory reform back for years.  If we want widespread public support for regulation, we have to persuade people that regulations benefit them.  That’s why environmentalists shouldn't fear cost benefit analysis and cost-effectiveness analysis; we need economic analysis to demonstrate the benefits of regulation.  We have a President who thinks all regulations are bad, but who cares only about the cost of regulations, not their benefits.  As a result,  cost-benefit analysis and cost-effectiveness analysis get a bad name.

And that’s bad for everyone.

Lake Okeechobee: In the Eye of Another Storm

Posted on March 22, 2019 by Michelle Diffenderfer

Lake Okeechobee is the center of a storm again, politically speaking!

Lake Okeechobee is the largest natural freshwater lake in Florida, 730 square miles in size, with an average depth of only 9 feet, extending to five different counties. To give you some perspective on the size, Lake Okeechobee is the largest lake in the southeastern United States and the second largest lake contained entirely within the contiguous United States.  Lake Okeechobee can hold close to a trillion gallons of water.

Everyone loves and needs Lake Okeechobee for something, and over the past 130 years it has become a very heavily managed and manipulated heart of the Central and Southern Florida Flood Control Project (C&SF).  The diking and canal connections to the Lake were started initially in response to two devastating hurricanes in the 1920’s that killed thousands of people around the Lake.  As a result, a series of well meaning “improvements” began to Kissimmee River, Lake Okeechobee and the Everglades in order to protect human life and to provide for the development of South Florida for agricultural and residential uses. Today the C&SF project is managed by the United States Army Corps of Engineers (USACE) and the South Florida Water Management District (SFWMD).  They are charged with accomplishing a variety of congressionally authorized purposes which include public health and safety, flood control, navigation, water supply, enhancement of fish and wildlife, and recreation.

Lake Okeechobee as it exists today receives flows from the Upper Kissimmee Chain of Lakes by way of the Kissimmee River.  It discharges to the east through the St Lucie Canal to the St Lucie River and Estuary, into the Atlantic Ocean; to the west through the Caloosahatchee Canal to the Caloosahatchee River and Estuary into the Gulf of Mexico; and to the south through a series of canals to the Everglades Agricultural Area, the Lower East Coast canal system, three Water Conservation Areas and finally down to the remnant Everglades system.

Today, water levels and releases from the Lake are managed pursuant to a regulation schedule which is periodically updated by the USACE pursuant to a number of federal laws including the Water Resources Development Act (WRDA) and the National Environmental Protection Act (NEPA).  The USACE has just started scoping on what will be a three-year NEPA process to update the water regulation schedule for Lake Okeechobee.  The update of the schedule is typically a controversial affair because the process must take into account the often-competing interests of two Native American Tribes, agriculture, water utilities, developers, fishermen, boaters, and environmental groups.

This time around the work is starting up after a year of citizen protests, outrage, and national headlines about the summertime releases of water containing “blue-green algae” (cyanobacteria)  from the Lake to the Caloosahatchee and St Lucie Rivers out to the estuaries.  Blue-green algae grows in freshwater systems and typically feeds on nutrients like phosphorus and nitrogen.  The blue-green algae can release nerve and liver toxins which – when carried with the freshwater discharges to the estuaries – presents greater opportunity for negative impacts to humans, domestic animals, and wildlife, including sickness and even death.  If that was not enough fun for Florida this past year we have also been suffering through outbursts of “red tide” or algal blooms along the coast which has caused additional negative impacts to wildlife, humans, and their pets. A very active and vocal group of citizens who live along and enjoy the rivers and nearby beaches that were affected are now showing up at the USACE scoping meetings.  They are pushing for the Lake schedule to be modified so that the Lake is held at significantly lower levels year round in the hope that this will lead to less discharges into the estuaries. This has also caught the attention of our brand new Governor and the local Congressmen who represents the St Lucie River residents who are weighing in and asking the USACE to hold the Lake lower than it has ever been held before. 

We are in the midst of a perfect storm, with no happy endings in sight, but lots of busy lawyers!

Delaware – The First State in Sustainability?

Posted on March 21, 2019 by Robert Whetzel

Long known as the corporate capital of the United States, Delaware is home to over 50% of publicly-traded U.S. companies, and approximately 1.3 million legally incorporated or formed entities representing companies large and small. Businesses choose to organize under Delaware law for many reasons, including its well-developed body of corporate and alternative entity law, flexible and enabling corporate and alternative entity statutes, and highly regarded business courts. Until recently, Delaware law was largely silent on issues of sustainability as they relate to corporate and entity governance. In an effort to support the global sustainability efforts of its entities, the State of Delaware recently enacted first of its kind legislation creating a path for Delaware entities to adopt and implement sustainability standards in a rigorous, systematic and transparent manner.

On October 1, 2018, the Delaware Certification of Adoption of Transparency and Sustainability Standards Act (the “Delaware Sustainability Act” or “DSA”) took effect. The Delaware Sustainability Act establishes a voluntary program for Delaware entities to adopt sustainability standards and to report on sustainability performance with the Delaware Secretary of State. Entities that satisfy the DSA’s requirements receive a certificate from the Delaware Secretary of State indicating compliance with the DSA.

Although many companies have adopted sustainability standards, there is no universal framework for identifying, evaluating or comparing the implementation of sustainability standards.  By and large, businesses are free to adopt standards of varying scope with no common approach to reporting or performance evaluation. As a result, there are widely varying degrees of transparency in the adoption and implementation of sustainability standards. Delaware has attempted to change that model (at least for Delaware entities) by adopting the DSA, which requires participating entities to report publicly on their sustainability standards and performance and establishes a centralized, public database of sustainability reports that those entities have generated.

A Delaware entity may elect (but is not required) to become a reporting entity under the DSA. To do so, its governing body must adopt resolutions setting forth its sustainability standards and assessment measures, and file a statement to that effect with the Delaware Secretary of State. The DSA defines “standards” as the “principles, guidelines or standards” that the entity adopts to assess and report the impacts of its activities on society and the environment; those standards must be based on or derived from third-party criteria. The DSA does not mandate the specific sustainability standards that an entity should choose to adopt. Instead the entity is free to adopt standards developed by a third-party organization, including both governmental and NGO sources.  Once standards are adopted, a reporting entity must file an annual report with the Delaware Secretary of State containing a summary of the standards and assessment measures, actions taken to meet the standards, and a description of any additional efforts that will be taken to improve performance.

Delaware has a long-standing tradition of leadership in matters of corporate governance, and has now developed a framework for its corporate citizens to adopt best practices in governance and sustainability.  The DSA is entirely optional and voluntary, and it remains to be seen whether Delaware will become the First State in Sustainability.

Listen & Learn Next Tuesday — An ACOEL Webinar on Kisor v. Wilkie

Posted on March 21, 2019 by Allan Gates

Save the date.

On Tuesday, March 26th, Jeff Thaler and Sanne Knudsen will explain all you need to know about Kisor v. Wilkie, the SCOTUS case that will reexamine Auer deference to agency interpretations of their own regulations.

Jeff is one of fourteen law professors who filed an amicus brief in Kisor v. Wilkie; and Sanne has written authoritatively on Auer deference.  Jeff’s amicus brief and Sanne’s law review article are accessible here and here.

Jeff and Sanne’s webinar presentation is your opportunity to learn why Justice Scalia openly invited the Supreme Court to abandon his own majority opinion in Auer v Robbins, and to hear what SCOTUS reconsideration of Auer may portend for the future of Chevron.

Please join this ACOEL members-only webinar: 

            Tuesday, March 26th

            2:00 - 3:00 pm Eastern (11:00 am - Noon Pacific)

            Call In:  877-211-3621

            Participant Code:  9316435190

Jeff and Sanne’s webinar presentation will be followed the next day by oral argument in Kisor v. Wilkie before the Supreme Court.

Hoopa Valley Tribe v. FERC: When Does One Year Mean One Year?

Posted on March 19, 2019 by Rick Glick

As Seth Jaffe noted in this blog, on January 25, 2019, the U. S. Court of Appeals for the D. C. Circuit rendered a highly significant opinion with respect to state water quality certification under section 401 of the Clean Water Act (CWA).  In Hoopa Valley Tribe v. FERC, the court rejected the commonly used workaround of the one-year statutory limit on state action by allowing multiple cycles of withdrawal-and-resubmittal of applications, holding that the States of Oregon and California had waived their authority by acceding to this practice.  The attached article, just published in The Water Report, discusses the case and its implications in detail.

Section 401 provides that before a federal agency can approve a project that may result in a “discharge to the navigable waters” the applicant must obtain water quality certifications from the affected state.  However, the state is deemed to have waived its delegated authority under section 401 if it "fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request."   

Determining the water quality effects and appropriate mitigation for hydroelectric facilities that have been in place for over half a century is a complex undertaking.  Additional study and data are often needed, which could take more than one year to complete.  Moreover, since relicensing brings out a myriad of stakeholders seeking an opportunity to influence the next license term, 401 issues are frequently addressed through multi-party settlement negotiations, which can also take a long time to resolve.  This has led state 401 agencies and applicants to enter into understandings under which the applicant would withdraw its application before the end of one year and then resubmit it to reset the clock.  Such withdrawal-and-resubmittal cycles have often stretched over a period of many years. 

The case arises under a settlement agreement between the States of California and Oregon, PacifiCorp and other stakeholders leading to eventual removal of PacifiCorp’s Klamath River hydroelectric projects.  Such removal requires FERC approval, and thus water quality certification by the two states. The parties contemplated that this process would take years to complete and agreed that each year PacifiCorp would withdraw and resubmit its 401 applications to avoid waiver, but the new annual applications would be unchanged from the previous ones.  The D. C. Circuit was plainly put off by this common practice, and it is clear that the particular facts of this case drove the outcome. 

The court’s holding has huge implications for owners of hydroelectric facilities going through the licensing or relicensing process at FERC.  In the attached article, I describe the decision, the context in which it was reached, and what it might mean for the FERC and section 401 processes going forward.

More litigation is likely to come.  Watch this space for updates.