Everything is Connected to Everything Else

Posted on February 25, 2010 by Mary Nichols

In his 1971 book, The Closing Circle, ecologist Barry Commoner outlined an informal set of "laws of ecology” governing life on Earth. I have found the “First Law” especially helpful in governing the California Air Resources Board. It says, “Everything is connected to everything else.”

 

Commoner wrote this brilliantly simple principle in the context of ecosystems. But I find this law of nature reliably guides my thinking on how best to develop policies and regulations to mitigate and adapt to climate change.

 

 The brain trusts that the Air Resources Board has assembled for these climate change solutions are a kaleidoscope of experts in energy, public health, urban planning, economics, venture capital, automotive and building design, forestry and dairy management – to name just some of the disciplines.

 

This holistic approach to problem solving is a relatively recent development at the ARB. In my first stint as board chairman, 1978 – 1983, engineers pretty much ran the air pollution control shop. Chemical engineers reformulated gasoline to be lead-free. Mechanical engineers redesigned exhaust systems to remove ozone-forming emissions. A big part of my job then was to phase out leaded gasoline and phase in catalytic converters.

 

The ARB, where I’m once again chairman, continues to rely on engineers for ever-cleaner fuels and engines. But our expanded mission of fighting global warming (Assembly Bill 32) has vastly diversified the expertise we require, the audiences we reach and the interests we regulate.

 

We recently expanded our venue from vehicles to entire transportation systems. We’re now at the forefront on streamlining freight operations across the board, from ships to ports to freeways and rail yards.

 

We entered the field of energy regulation last fall when Governor Schwarzenegger directed the ARB to implement an accelerated Renewable Portfolio Standard – by 2020 utilities must generate at least 33 percent of their electricity from sources such as solar and wind power that do not rely on fossil fuels.

 

At the same time, we’ve proposed the nation’s first plan for a broad-based cap-and-trade system to use market forces to reduce global warming emissions.

 

And, in what is perhaps our most eye-opening move afield, the ARB is venturing in land use – as yet another way to reduce climate-altering vehicle emissions. Under a new state “sustainable communities” law (Senate Bill 375), the board this year will be setting emission reduction targets for passenger cars and trucks in 18 urban areas in the state. But – significantly – we’re leaving it to local government to decide how best to achieve those goals. Regional transportation planning authorities will be working with counties and cities to develop planning measures such as compact and mixed-use housing that will lower the average household’s vehicle miles traveled.

 

The growing diversity and collaboration reflects a broader shift toward more integrated environmental problem solving, not just at the ARB or in California, but across continents. It’s a more holistic approach driven by the urgency of global warming and the lure of profit in the transition to a low-carbon economy. It reflects the interconnectivity of climate change itself.

Is There a New Era of Environmental "Veto" Legislation?

Posted on February 24, 2010 by Charles Nestrud

Will environmental issues play a prominent role in the upcoming elections? It appears so, particularly if your state’s Senior Democratic Senator is up for re-election, and is also Chairman of the Agriculture Committee and a member of the Committee on Energy and Natural Resources. Senator Blanche Lincoln (D. Ark.) cast the deciding vote in the Senate for health care reform, and received the typical “big government, liberal” moniker. Seven Republicans have lined up to run against her, and her $5 million (and growing) campaign war chest. But how will the competing campaigns deal with environmental issues? Senator Lincoln has a lifetime score of 49% on environmental issues from the League of Conservation Voters, an environmental activist group she has proudly referred to as “extremists.” Of the Democratic Senators up for re-election, Sen. Lincoln ranks the lowest. Labels are easy to assign,  but are rarely very accurate.   

The school of thought at the end of 2009 was that either Congress would enact climate change legislation prior to March of 2010, or EPA would enact its own climate change rules to implement the impending endangerment rulemaking. Not so fast. Not only is there no climate change legislation, Congress is now debating S.J. Resolution 26: “Congress disapproves the rule submitted by the Environmental Protection Agency relating to the endangerment finding and the cause or contribute to findings for greenhouse gases under Section 202(a) of the Clean Air Act (published at 74 Fed. Reg. 66496 (December 15, 2009), and such rule shall have no force or effect.”

 

Is SJ-26 a purely partisan move, with no chance of passage? Perhaps. Just note that Senator Lincoln is a prominent co-sponsor, one of 40 senators who have signed on, one of three Democratic co-sponsors, all of whom are up for re-election (Ben Nelson, D. Neb. and Mary Landrieu, D. La.  being the others). Not all Republicans signed on—Scott Brown, newly elected from Massachusetts, passed on this one.   

Environmental groups have already started running radio attack ads in Arkansas. Even though the ads give Senator Lincoln a “dirty air” label, Senator Lincoln is likely hoping the voters are listening—hoping that she gains notoriety for opposing what she labels “job killing” climate change regulations—notoriety that may improve her standing with Arkansas voters come election time. (Again with the labels)   

SJ-26 is not Senator Lincoln’s first foray into the climate change debate. At the end of October, 2009 Senator Lincoln attached a little known rider as a last minute addition to the current budget—a rider that now prohibits EPA from spending any money to require livestock producers to report GHG emissions under the new GHG reporting rules. As Chairman of the Agricultural Committee, she could pull this one off. Cattle and pigs may be flagellant, accounting for 1.7% of all GHG emissions (more by some estimates). But for now EPA cannot make anyone count up the farts, at least not for this fiscal year (ending September 30, 2010). Whether EPA should, or should not have included livestock producers in the GHG reporting rule is a judgment call, and one that we can all disagree upon. The importance of the farm vote in Arkansas, however, cannot be over estimated. And for those who believe this is just a matter of Southern politics (or “pork”), the same budget bill included a last minute exemption for 13 Great Lakes cargo steamships from a proposed EPA rule to require lower sulfur fuel.

Is this form of Congressional veto legislation a new era of environmental regulation? Some have referred to these efforts as borrowing from the Newt Gingrich playbook. Those who have followed these issues more closely than me will have to answer that one. For now, it’s just the beginning of what will prove to be a very interesting political season. Sen. Lincoln trails the leading contenders in recent polling. 

"The Increasing Role of Constitutionalism in Environmental Law: It's Less Boring Than That Suggests!"

Posted on February 17, 2010 by James R. May

On February 26, 2010, Dan Farber, Doug Kysar, Rob Glicksman and I will be on a panel at Georgetown about emerging issues at the intersection of Constitutional and Environmental Law. We'll puzzle over recent developments and the constitutional shape of environmental law to come. There is much to discuss. We have the limitations on judicial involvement, say, the political question doctrine and the treaty clause in the context of climate litigation. Summer suggests that Scalian standing is alive and well, and that procedural standing is hardly, er, left standing. And then there are 1:1 ratio limits to awards of punitive damages in cases involving environmental harm with which to contend under substantive due process.

Federalism could experience resurgence. Oneida and Kelo give the states an opening to do more (and do worse). Yet preemption still looms large (as with cap & trade), and sovereign immunity jurisprudence has diminished state accountability.

And of course, there is an enfeebled Congress, which behaves as if its powers are as a majority of the Supreme Court imagined them to be in 1935. While non-delegation is still in desuetude, and Raich revived rational basis review of Commerce Clause authority for the time being, it's any wonder that Congress delivers so little about national environmental challenges these days. Or anything else, for that matter. But if we're really at war, then how about Congress using its war powers to address environmental challenges that impinge upon national security, like climate change? And does Missouri v. Holland give Congress authority unbridled by the 10th Amendment to address international environmental issues, say, water pollution? Climate change?

Which brings us back to Article II separation of powers, and Chevron. For the next 2 1/2 years, all may learn to love Justice Alito's interpretive approach in last term's Kensington.

What does the future hold? Who knows, except for ineffective congressional responses and a Supreme Court that seems at least skeptical about national environmental programs. So maybe a constitutional devolution of sorts. Opportunities abound for constitutional innovation under the General Welfare and Due Process Clauses, or invocation of state (here and elsewhere) provisions that putatively provide a right to a healthy environment.

And if judicial takings are constitutionally cognizable (this term's Beach Renourishment), then why not sustainable development under the Privileges & Immunities or Equal Protection Clauses, or the 9th Amendment?

Or maybe not. It is, after all, a constitution we are expounding.

EPA's Roll-Back of Bush-Era Rules Appears to Begin in Earnest

Posted on February 13, 2010 by Seth Jaffe

While a lot of attention has been paid to whether EPA would reverse the Bush EPA decision denying California’s petition to regulate greenhouse gas emissions from mobile sources,  it is now clear even outside the climate change arena that life at EPA is going to be substantially different under the current administration.  As if evidence were really needed for that proposition, EPA announced this week that it was putting on hold the NSR aggregation rule that EPA had promulgated on January 15, 2009.

The rule, which had been long sought by industry, would have provided that nominally separate projects would only have to be combined – aggregated for NSR/PSD purposes – if  they are “substantially related.” It also would have created a rebuttable presumption that projects more than three years apart are not substantially related. Responding to a request from NRDC and the OMB memo asking agencies to look closely at rules promulgated before the transition but not yet effective, EPA concluded that the rule raises “substantial questions of law and policy.” Therefore, EPA postponed the effective date of the rule until May 18, 2009 and also announced that it was formally reconsidering the rule in response to the NRDC petition.

To those in industry, the aggregation rule was not a radical anti-environmental roll-back of environmental protection standards.  Rather, it was more of a common-sense approach towards making the NSR program simpler and clearer.  It is one of my pet peeves with the prior administration, however, that it gave regulatory reform a bad name.  

In any case, I feel as though I should open a pool regarding what will be the next Bush-era rule to be tossed overboard.  We surely won’t have to wait long for it to happen.

Opposition to Wind Farm Siting Based on Adverse Health Effect from Infrasound?

Posted on February 9, 2010 by Roger Ferland
One of the big hurdles for further development of wind power in the U.S. is landowner objections to placement of turbines near their homes.  The rationale du jour for such objections is that the sound produced by turbines causes a broad range of health effects.  In particular, objectors point to infrasound, which is sound generally below the level of human perception.  A recent case in Wisconsin was one of the first in the country to test the objectors' theories.  When a Wisconsin utility applied for permission to build 90-turbine development north of Madison, objectors argued for extremely low limits for wind turbine sound and a mile-and-a-quarter setback, limits which would have made the project impossible. 
 
The principal proponent of the theory that wind turbine sound causes physiological harm is a New York pediatrician, Nina Pierpont.  Dr. Pierpont has written and self-published a book, entitled "Wind Turbine Syndrome: A Report on a Natural Experiment," which chronicles complaints by 10 families around the world who have lived near wind turbines.  As presented by Dr. Pierpont, the symptoms include everything from headaches to nausea,  tachycardia, irritability and panic episodes associated with sensations of movement or quivering inside the body.  Dr. Pierpont argues that infrasound works in two principal ways to cause these symptoms:  first by exciting the human vestibular (balance) system; and second vibrating the diaphragm and organs, thereby passing on confusing messages to the body. 
 
Dr. Pierpont draws upon and supports the work of noise control engineers George Kamperman and Richard James, who, in various proceedings in the U.S. and abroad, advocate very low thresholds for sound from turbines (35 dBA, which is approximately the level of a quiet bedroom).  In the Wisconsin case, objectors hired Mr. James to provide expert testimony, which he did, relying heavily on Dr. Pierpont's theories.
 
Quarles & Brady retained two experts to address sound issues on behalf of the utility.  Dr. Geoff Leventhall is an acoustician, consultant and professor from the U.K. who has been involved in studying infrasound for nearly 50 years.  Dr. Leventhall testified that neither of Dr. Pierpont's theories make sense.  In fact, he testified, the author of the study Dr. Pierpont relies upon for her vestibular disturbance theory specifically disclaimed that his work supported her conclusions.  As for Dr. Pierpont's theory that infrasound vibrates the diaphragm and organs, Dr. Leventhall testified that simple math dooms her argument.  Sound from turbines results in movement of the diaphragm of less than 10 microns (one tenth the thickness of a human hair), while during normal breathing, the diaphragm moves several centimeters.  Dr. Leventhall also pointed out that Dr. Pierpont's analysis completely ignores another, much stronger, source of internal infrasound--the heart.
 
Quarles & Brady also retained Dr. Mark Roberts, a Chicago-based epidemiologist, biostatistician and physician.  Dr. Roberts testified that "wind turbine syndrome" is not a medical diagnosis supported by peer reviewed, published, scientific literature.  He completed a review of the literature, and found no support for the claim that wind turbine sound causes physiological harm. Dr. Roberts also identified several flaws in Dr. Pierpont's methodology, limiting the usefulness of her research, including selection bias and a failure to adhere to accepted epidemiological principles in developing her theories.  Summarizing Dr. Pierpont's work, Dr. Roberts concluded that it consisted of  "opinions that are unsubstantiated," and as he pointed out, "everyone has opinions."  Dr. Roberts warned against allowing such "science" to shape public policy.
 
Both Dr. Leventhall and Dr. Roberts agreed that sound from wind turbines may annoy neighbors or disturb their sleep.  Dr. Roberts summarized such concerns as follows:  "The underlying complaint of annoyance is, in and of itself, not a disease or a specific manifestation of a specific exposure, but instead a universal human response to a condition or situation that is not positively appreciated by the human receptor."
 
Ultimately, while the Wisconsin Public Service Commission recognized that no development is without cost to those who live nearby, it adopted the utility's suggestion of a 50 dBA sound threshold, with a lower 45 dBA threshold during summer nighttime hours, when neighbors are likely to have their windows open.  These thresholds allow the utility to move forward with the project, while, in the Commission's view, striking an appropriate balance between neighbors' interests and those of the utility.

DON'T DIG A WATERY GRAVE: STAY CURRENT ON THE LATEST WATER REGULATIONS AND AVAILABLE FUNDING

Posted on February 8, 2010 by Joseph Manko

originally posted for the Association of Corporate Counsel's Green-House Counsel ©2009

 

The construction and rehabilitation of our nation’s infrastructure has come to the fore with the advent of both climate change and the transformation of our energy production.  As water shortages continue to move eastward from the western states and new water quality standards are promulgated to address previously unregulated pollutants, the handling of water will ultimately require as much, if not more, attention from corporate counsel than the current focus on fossil fuel.  To anticipate this potential sea change, counsel should be aware of the evolution of governmental regulation of the use and handling of water, as well as monetary incentives to achieve compliance with the emerging laws.

To provide a brief history, in 1972, the Clean Water Act was amended to regulate direct discharges from industrial facilities and publicly owned treatment works (POTW), and later expanded to cover indirect discharges (e.g., runoff of stormwater) from agriculture and land development.  Although the 1972 laws created a discharge permit system (NPDES) and initial funding for POTW construction, it wasn’t until the enactment of the Water Quality Act of 1987 that EPA received annual funding to award to states who set up revolving grant and loan funds to address problems with wastewater, drinking water and stormwater systems within each of their states. 

Although the amounts varied with the changes in the executive office and congressional makeup, these funds were normally matched by the states through general obligation and/or revenue bonds and derived from the loan repayments and interest earnings to ensure that the funds would continue to be available to achieve their mission year after year.  One such example is the Pennsylvania Infrastructure Investment Authority (PENNVEST), which awards grants and loans for wastewater, drinking water and stormwater projects, including brownfields, acid mine drainage and nutrient trading.  Similar programs exist in each of the 50 states.

The enactment of the American Recovery and Reinvestment Act of 2009 (ARRA) provided additional stimulus funds, designed to create jobs, and required that 20 percent of the funds be disbursed for “green infrastructure” projects.  EPA received $4 billion of stimulus money, to encourage the full recycling of wastewater and stormwater to reduce energy costs, augment future water supplies and minimize adverse impacts on water quality.  Since there are financial federal incentives from both the U.S. Environmental Protection Agency (“EPA”) and the Department of Housing and Urban Development (“HUD”), you should proceed with due diligence to determine if funding opportunities are available for your organization.  If an appropriate match is identified, assist in the requisite applications for these funds.

·               Water Quality Standards;

·               Clean Water Act;

·               Publicly Owned Treatment Works;

·               POTW;

·               Wastewater;

·               Drinking water;

·               Stormwater;

·               American Recovery and Reinvestment Act of 2009;

·               ARRA;

·               “Green infrastructure”;

·               Stimulus money;

·               Financial federal incentives; and

·               Funding opportunities.

Has the BNSF Case Changed the Superfund Practice?

Posted on February 5, 2010 by Bradley Marten

It has been nearly nine months since the U.S. Supreme Court decided Burlington Northern and Santa Fe Railway Company v. United States (BNSF),[1] a case some called a landmark decision that would change the Superfund practice.[2] In some respects that has turned out to be the case, in others it has not. There have been several reported cases citing BNSF, and all of them confirm that the decision requires both the EPA and potentially responsible parties (“PRPs”) to engage in a more fact-intensive inquiry into “arranger” liability. Less clear, however, is how the apportionment of liability among liable parties in private contribution cases will be affected, given the relatively small number of reported decisions.

Readers will recall that the BNSF decision had two elements: (1) it addressed the scope of arranger liability under CERCLA, and (2) it affirmed the view of several circuit courts that PRPs can avoid joint and several liability if a “reasonable basis” to apportion liability exists. This article reviews how lower court decisions issued subsequent to BNSF have applied those two components.

 

A Review of the BNSF Facts

BNSF was issued on May 4, 2009. The 8-1 decision written by Justice Stevens arose out of a fairly common fact pattern for CERCLA cases: a small chemical distributor Brown & Bryant, Inc. (“B&B”) owned and operated a facility that repackaged agricultural chemicals. B&B’s operation was on a 3.8-acre parcel, a portion of which was leased from predecessors to BNSF and the Union Pacific Railroad. Neither railroad played any part in B&B’s operations. The other PRP, Shell Oil, sold a soil fumigant to B&B which was shipped via commercial carrier FOB destination, meaning that the buyer was responsible for the product once it arrived at the facility.

After the State of California ordered B&B to clean up soil and groundwater contamination, B&B went out of business and then EPA listed the site on the National Priorities List. Both railroads and Shell were named as PRPs. The railroads were ordered to clean up the entire site, even though the portion of the site that they owned did not require remediation. Shell was named a PRP for having delivered chemicals to the site which it knew or should have foreseen would be spilled by B&B. In 1996, the United States and the State of California filed a cost recovery action against the railroads and Shell, seeking to recover over $8 million in response costs.

The Supreme Court’s Opinion
1. Arranger Liability

In affirming that “arranger liability” under CERCLA must be determined on a case-by-case basis, the Court set up a continuum. At one end are cases where an entity entered into a transaction “for the sole purpose of discarding a used and no longer useful hazardous substance.”[3] In such cases, there is a clear intent to discard the product, and therefore liability under section 107(a)(3). On the other end are situations where a company sells a useful product and “the purchaser of that product later, and unbeknownst the seller, disposed of the product in a way that led to contamination.”[4] The Court acknowledged that there were “many permutations of ‘arrangements’ that fall between these two extremes.” In these cases, based on a “plain reading” of the CERCLA statute, the Court held that “an entity may qualify as an arranger when it takes intentional steps to dispose of a hazardous substance.[5] Applying this statement of the law to the facts, the Court held that Shell’s mere knowledge of the spills did not amount to an “intent” that they be spilled or otherwise disposed of and that Shell was therefore not liable as an arranger.

2. Apportionment

BNSF highlighted that the CERCLA statute does not contain joint and several liability language. Instead, the notion that PRPs should be held jointly and severally liable is a judicial doctrine grounded in Section 433A of the Restatement (Second) of Torts. Applying the Restatement, the Court held – as had several circuit courts previously– that “apportionment is proper when there is a reasonable basis for determining the contribution of each cause to a single harm.”[6]

Where multiple parties cause a single harm, “CERCLA defendants seeking to avoid joint and several liability bear the burden of proving that a reasonable basis for apportionment exists.”[7] In BNSF, while both the district court and the Ninth Circuit had found that apportionment of the harm was possible, they disagreed on how to allocate responsibility. The district court came up with a nine percent allocation to the railroads. The Ninth Circuit criticized the evidence on which the district court had relied, finding that it was insufficient to establish the “precise proportion” of the Railroads’ responsibility. The Supreme Court affirmed the district court’s approach, holding that the evidence supporting apportionment need not be precise. There must simply be “facts contained in the record reasonably support[ing] the apportionment of liability.”[8]

Lower Court Decisions Applying BNSF
Cases Applying the Court’s Arranger Liability Ruling

Of the four published cases that have substantively applied BNSF in the context of arranger liability, all suggest that lower courts are taking seriously the Supreme Court’s instruction to conduct a factually-intensive review of the parties’ intent. Prior to BNSF, the view prevalent among at least some government attorneys, and even some private party attorneys, was that every party who somehow came into contact with a hazardous substance was liable as having “arranged for disposal.” That view has been shattered.

Two cases, in particular, illustrate this point. The first is Appleton Papers Inc. v. George A. Whiting Paper Co.[9] Plaintiffs in that case were companies who had manufactured and sold carbonless paper. The emulsion used in the paper contained microscopic capsules that burst when pressure was applied, releasing a dye, and allowing the words on a page to be transferred from one sheet to another. The microcapsules were dissolved in a solvent which contained PCBs. The PCBs were released into the Fox River from manufacturing plants which produced the paper. An even greater proportion of PCBs were released by companies that recycled carbonless paper and by municipal wastewater utilities that discharged PCB-contaminated wastewater.

Plaintiff manufacturers filed a contribution action under CERCLA §113 against the recyclers and municipalities (their §107 claim was previously dismissed by the court). The court bifurcated the case into a liability and apportionment phase. In the liability phase, on cross-motions for summary judgment, the court considered whether the defendants knew they were disposing of hazardous chemicals, and concluded that they did not. The analysis – while not explicitly using the word “intent” – focused on what the defendants knew when they recycled the carbonless paper or discharged wastewater from the plants that did. After reviewing a record that included roughly 900 exhibits – including expert reports, government reports, corporate records, laboratory records and deposition transcripts – the court sided with the defendants, finding that they had little or no knowledge that they were disposing of PCBs into the river.[10]

Defendants are recyclers of paper and municipal sewerage entities who simply processed paper and water, and they would have had little reason or ability to inspect or investigate the chemical makeup of anything that came in the door…[t]he recyclers were the ‘innocent victims’ of the circumstances [citation to record omitted]. This is even more true for Defendants who merely received and released wastewater containing invisible PCBs in it.[11]

Similarly, in a case in Washington state, the district court made clear that the issue of arranger liability after BNSF turns squarely on the facts. United States v. Wash. State Department of Transp.[12] In that case, EPA sued the Washington State Department of Transportation (“WSDOT”) to recover cleanup costs at a contaminated site that the state had acquired to build a bridge. During construction of the bridge, a contractor discovered three open-bottom tanks containing tar, which appeared to have been placed there by a coal gasification plant. The State counterclaimed, arguing that the United States was also liable, because the US Army Corps of Engineers (“USACE”) had dredged a portion of the waterway that the coal gassification plant was located on, thereby moving hazardous substances released by others and causing additional releases to the environment. The United States moved for summary judgment. Judge Bryan denied the motion, holding that the United States’ liability, if any, turned on a fact-intensive inquiry that the parties had yet to conduct.

At this point, the facts are insufficiently developed to determine what level of control USACE exerted over the dredging process and what responsibility it may have had regarding disposal of the dredged materials.… As the Supreme Court stated in Burlington Northern, “the determination whether an entity is an arranger requires a fact-intensive inquiry that looks beyond the parties’ characterization of the transaction as a ‘disposal’ or ‘sale’ and seeks to discern whether the arrangement was one Congress intended to fall within the scope of CERCLA’s strict-liability provisions.” 129 S. Ct. at 1879. Considering the USACE’s involvement with dredging the contaminated waterways in light of CERCLA’s strict liability standard, the court cannot say as a matter of law that upon further discovery, the facts will fail to show that the USACE “qualif[ies] as an arranger under [§107(a)(3) when taking] intentional steps to dispose of a hazardous substance” through the granting of permits to dredge the waterway.[13]

Meanwhile, across the country in Maine, a district court applied BNSF in the context of a cleanup of the Penobscot River.See Frontier Communications Corp. v. Barrett Paving Materials.[14] We previously reported on this case. See District Court in Maine Applies Supreme Court’s BNSF Decision on “Arranger” Liability, Marten Law Environmental News (July 22, 2009). The court in the Maine case reiterated that the question of arranger liability is “fact-intensive,” but it found that the record contained sufficient facts to conclude that the defendant had intended to dispose of wastes through a sewer into the river.[15]

Finally, in New Hampshire, General Electric asked a judge to reverse a prior ruling holding GE liable as having “arranged for disposal” of PCB-containing “scrap Pyranol” when it sold the material to a paint manufacturing company. GE relied on BNSF to argue that the phrase “arranged for disposal” required “an intentional action toward achieving the purpose: disposal.”[16] The court did not dispute GE’s reading of the law, but held that there was sufficient evidence of intent to hold GE liable as an arranger.

Cases Applying BNSF’s Apportionment Ruling

We have located two reported decisions expressly dealing with the “apportionment” arm of the BNSF decision. In the first case, the court essentially punted, holding that the best way to apportion liability was to let the case go to trial. See Evansville Greenway and Remediation Trust v. Southern IN Gas and Elec. Co., Inc.[17]

In Evansville, the BNSF decision was handed down while cross-motions for summary judgment were being briefed. The defendants claimed that BNSF “effected a dramatic change that will make it easier for PRPs to avoid the burden of joint and several liability,” while the plaintiffs argued that “BNSF amounts to nothing new.”[18] Noting that “the Supreme Court’s new decision has presented what might be called genuine questions of material law,”[19] the court declined to commit to a particular interpretation of the BNSF decision, based on the fact that the timing of the decision meant that the record before the court was sparse. Instead, the court granted the motion as to liability under 107(a), but reserved the question of apportionment for trial, so that “each side [can] present evidence relevant to its own and its opponents’ different interpretations of BNSF.”[20]

More interesting is the court’s decision in Appleton Papers, discussed above. In that case, the court engaged in an extended discussion of whether BNSF was applicable to a §113 contribution action (having previously dismissed the plaintiff’s §107 claims). The court concluded that, while “Burlington Northern changed the applicable standards for ‘arranger liability’ … there is nothing within Burlington Northern that requires courts to make some sort of threshold determination regarding joint and several liability or allow plaintiffs in a contribution action to make an apportionment argument.”[21]

One question not answered by BNSF is the quantum of proof necessary to establish a reasonable basis for apportionment. Judge Shira A. Scheindlin addressed that question in a non-CERCLA case involving environmental torts, holding that: (1) a fact finder may rely on the “available evidence” in apportioning liability among joint tortfeasors; and (2) the burden of production necessary to support a showing of divisibility is “low.” In re MTBE, S.D.N.Y. Case No. 00 MDL 1898, Docket No. 352 (July 14, 2009). See Applying BNSF, District Court in New York Finds “Best Available Evidence” Is Sufficient to Apportion Liability, Marten Law Environmental News (July 22, 2009). It remains to be seen whether this approach will be extended in a CERCLA context.

Conclusion

It is still too early to get a good sense of whether BNSF will be the watershed case some had predicted. The first few cases have reinforced the Supreme Court’s holding that the inquiry into arranger liability is “fact-intensive.” Only two reported cases have addressed the apportionment arm of the decision, and neither reached the question of how apportionment is to be conducted.

[1] 129 S. Ct. 1870 (2009).

[2] See, e.g., J. Barkett, The Burlington Northern Decision, American College of Environmental Lawyers Blog (May 19, 2009).

[3] 129 S. Ct. at 1878.

[4] Id.

[5] Id. at 1879.

[6] Id. at 1881.

[7] Id.

[8] Id. at 1882.

[9] Slip Op., 2009 WL 5064049 (E.D. Wis., December 16, 2009).

[10] Id. at *15.

[11] Id. at *17.

[12] , ___ F. Supp.2d ___, 2009 WL 2985474 (W.D. Wa., September 15, 2009).

[13] Id. at *8.

[14] District of Maine, Case No. 07-00133.

[15] 2009 WL 1941920, *3

[16] General Electric Company’s Supplemental Memorandum on the Evidence of Intent or Knowledge Required to Prove that a CERCLA Defendant has “Arranged for” Disposal or Treatment of Hazardous Waste at 2, United States v. General Electric Co., 06-354, Doc. No. 89 (D.N.H. Nov. 5, 2008).

[17] ___ F.Supp.2d ___, 2009 WL 3163180 (S.D. Ind., September 29, 2009),

[18] Id. at * 21.

[19] Id.

[20] Id.

[21] Appleton Papers, Inc. v. George A. Whiting Paper Co., Slip Op., 2009 WL 3921036 (E.D. Wis. 2009), **4, 5.

South Carolina Supreme Court Allows Enforcement of Unpromulgated Rule

Posted on February 3, 2010 by Thomas Lavender, Jr.

In a unanimous decision, the S.C. Supreme Court upheld the implementation of South Carolina’s Coastal Zone Management Plan (CZMP) and finally decided the question landowners have argued for years – how could the South Carolina Department of Health and Environmental Control (SCDHEC) enforce an unpromulgated rule?[1] 

 

The developer in the Spectre case had sought a land-disturbance permit under the SCDHEC stormwater program. The agency denied the permit contending that the proposed filling of 31.76 acres of isolated freshwater wetlands on a 62.93 acre site was inconsistent with the CZMP. An appeal of the denial was taken to the State Administrative Law Court, which held that the CZMP was not enforceable because it was not a regulation promulgated pursuant to the State’s Administrative Procedures Act (APA).[2] 

 

Following the United State Supreme Court’s decision in SWANCC[3], isolated wetlands in South Carolina have been largely without protection. South Carolina has seen the introduction of several bills aimed to fill the void by expressly authorizing the regulation of impacts to isolated wetlands; however, none are pending in the current session of the General Assembly. Nonetheless, in those areas covered by the CZMP, South Carolina relied upon its authority to determine consistency with the CZMP in connection with the consideration of state permits. Isolated wetlands beyond the reach of the CZMP remain unregulated. However, numerous attacks on the validity of the CZMP have been made, but none reaching the Supreme Court until Spectre.

 

SCDHEC was charged in 1976 with developing a comprehensive coastal management program that it was to enforce “in accordance with this chapter and any rules and regulations promulgated under this chapter.”[4] The statute provided that statewide hearings and public review of the CZMP would occur and the CZMP would become the “final management plan for the State’s coastal zone” upon review and approval by the Governor and General Assembly. 

 

The Court went to great lengths to distinguish the Spectre decision from its previous holdings relating to the imposition of requirements by means other than properly promulgated regulations.[5] In spite of numerous references to the necessity of SCDHEC to adopt regulations to implement its coastal program[6], the Court concluded that the “General Assembly did not believe it was meant to be an unenforceable document.” Despite the fact that the statute specifically mandated SCDHEC to adopt interim and final rules it would follow in evaluating permits, and expressly provided that such final rules must be promulgated pursuant to the APA[7], the Court concluded that the General Assembly had created a “separate and more rigorous procedure for promulgation of the CZMP.” Moreover, since SCDHEC had developed the CZMP in accordance with those specified procedures, “the plan is valid.” 

It remains unclear where the Court will stop in crafting exclusions to the APA, but it now appears that the Court is prepared to conclude that a separate process by which a policy document is developed can be deemed functionally equivalent to the APA and afford an unpromulgated rule the force and effect of law.



[1] Spectre, LLC v. South Carolina Department of Health and Environmental Control, et al., (Opinion No. 26764, February 1, 2010).

[2] S.C. Code Ann. §§ 1-23-10, et seq. (2009).

[3] Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 12 S.Ct. 675, 531 U.S. 159, 148 L.Ed.2d 576 (2001).

[4] SC Code Ann. § 48-39-80 (2009).

[5] Captain’s Quarters Motor Inn, Inc. v. South Carolina Coastal Council, 306 S.C. 488, 413 S.E.2d 13 (1992).

[6] S.C. Code Ann. §§ 48-39-50(E), (F), (I), and (R), -70(A), -80(A), and -130(B).

[7] S.C. Code Ann. § 48-39-130(B) also provided that the interim rules and regulations were not subject to the APA.

South Carolina Supreme Court Allows Enforcement of Unpromulgated Rule

Posted on February 3, 2010 by Thomas Lavender, Jr.

In a unanimous decision, the S.C. Supreme Court upheld the implementation of South Carolina’s Coastal Zone Management Plan (CZMP) and finally decided the question landowners have argued for years – how could the South Carolina Department of Health and Environmental Control (SCDHEC) enforce an unpromulgated rule?[1] 

 

The developer in the Spectre case had sought a land-disturbance permit under the SCDHEC stormwater program. The agency denied the permit contending that the proposed filling of 31.76 acres of isolated freshwater wetlands on a 62.93 acre site was inconsistent with the CZMP. An appeal of the denial was taken to the State Administrative Law Court, which held that the CZMP was not enforceable because it was not a regulation promulgated pursuant to the State’s Administrative Procedures Act (APA).[2] 

 

Following the United State Supreme Court’s decision in SWANCC[3], isolated wetlands in South Carolina have been largely without protection. South Carolina has seen the introduction of several bills aimed to fill the void by expressly authorizing the regulation of impacts to isolated wetlands; however, none are pending in the current session of the General Assembly. Nonetheless, in those areas covered by the CZMP, South Carolina relied upon its authority to determine consistency with the CZMP in connection with the consideration of state permits. Isolated wetlands beyond the reach of the CZMP remain unregulated. However, numerous attacks on the validity of the CZMP have been made, but none reaching the Supreme Court until Spectre.

 

SCDHEC was charged in 1976 with developing a comprehensive coastal management program that it was to enforce “in accordance with this chapter and any rules and regulations promulgated under this chapter.”[4] The statute provided that statewide hearings and public review of the CZMP would occur and the CZMP would become the “final management plan for the State’s coastal zone” upon review and approval by the Governor and General Assembly. 

 

The Court went to great lengths to distinguish the Spectre decision from its previous holdings relating to the imposition of requirements by means other than properly promulgated regulations.[5] In spite of numerous references to the necessity of SCDHEC to adopt regulations to implement its coastal program[6], the Court concluded that the “General Assembly did not believe it was meant to be an unenforceable document.” Despite the fact that the statute specifically mandated SCDHEC to adopt interim and final rules it would follow in evaluating permits, and expressly provided that such final rules must be promulgated pursuant to the APA[7], the Court concluded that the General Assembly had created a “separate and more rigorous procedure for promulgation of the CZMP.” Moreover, since SCDHEC had developed the CZMP in accordance with those specified procedures, “the plan is valid.” 

It remains unclear where the Court will stop in crafting exclusions to the APA, but it now appears that the Court is prepared to conclude that a separate process by which a policy document is developed can be deemed functionally equivalent to the APA and afford an unpromulgated rule the force and effect of law.



[1] Spectre, LLC v. South Carolina Department of Health and Environmental Control, et al., (Opinion No. 26764, February 1, 2010).

[2] S.C. Code Ann. §§ 1-23-10, et seq. (2009).

[3] Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 12 S.Ct. 675, 531 U.S. 159, 148 L.Ed.2d 576 (2001).

[4] SC Code Ann. § 48-39-80 (2009).

[5] Captain’s Quarters Motor Inn, Inc. v. South Carolina Coastal Council, 306 S.C. 488, 413 S.E.2d 13 (1992).

[6] S.C. Code Ann. §§ 48-39-50(E), (F), (I), and (R), -70(A), -80(A), and -130(B).

[7] S.C. Code Ann. § 48-39-130(B) also provided that the interim rules and regulations were not subject to the APA.

South Carolina Supreme Court Allows Enforcement of Unpromulgated Rule

Posted on February 3, 2010 by Thomas Lavender, Jr.

In a unanimous decision, the S.C. Supreme Court upheld the implementation of South Carolina’s Coastal Zone Management Plan (CZMP) and finally decided the question landowners have argued for years – how could the South Carolina Department of Health and Environmental Control (SCDHEC) enforce an unpromulgated rule?[1] 

 

The developer in the Spectre case had sought a land-disturbance permit under the SCDHEC stormwater program. The agency denied the permit contending that the proposed filling of 31.76 acres of isolated freshwater wetlands on a 62.93 acre site was inconsistent with the CZMP. An appeal of the denial was taken to the State Administrative Law Court, which held that the CZMP was not enforceable because it was not a regulation promulgated pursuant to the State’s Administrative Procedures Act (APA).[2] 

 

Following the United State Supreme Court’s decision in SWANCC[3], isolated wetlands in South Carolina have been largely without protection. South Carolina has seen the introduction of several bills aimed to fill the void by expressly authorizing the regulation of impacts to isolated wetlands; however, none are pending in the current session of the General Assembly. Nonetheless, in those areas covered by the CZMP, South Carolina relied upon its authority to determine consistency with the CZMP in connection with the consideration of state permits. Isolated wetlands beyond the reach of the CZMP remain unregulated. However, numerous attacks on the validity of the CZMP have been made, but none reaching the Supreme Court until Spectre.

 

SCDHEC was charged in 1976 with developing a comprehensive coastal management program that it was to enforce “in accordance with this chapter and any rules and regulations promulgated under this chapter.”[4] The statute provided that statewide hearings and public review of the CZMP would occur and the CZMP would become the “final management plan for the State’s coastal zone” upon review and approval by the Governor and General Assembly. 

 

The Court went to great lengths to distinguish the Spectre decision from its previous holdings relating to the imposition of requirements by means other than properly promulgated regulations.[5] In spite of numerous references to the necessity of SCDHEC to adopt regulations to implement its coastal program[6], the Court concluded that the “General Assembly did not believe it was meant to be an unenforceable document.” Despite the fact that the statute specifically mandated SCDHEC to adopt interim and final rules it would follow in evaluating permits, and expressly provided that such final rules must be promulgated pursuant to the APA[7], the Court concluded that the General Assembly had created a “separate and more rigorous procedure for promulgation of the CZMP.” Moreover, since SCDHEC had developed the CZMP in accordance with those specified procedures, “the plan is valid.” 

It remains unclear where the Court will stop in crafting exclusions to the APA, but it now appears that the Court is prepared to conclude that a separate process by which a policy document is developed can be deemed functionally equivalent to the APA and afford an unpromulgated rule the force and effect of law.



[1] Spectre, LLC v. South Carolina Department of Health and Environmental Control, et al., (Opinion No. 26764, February 1, 2010).

[2] S.C. Code Ann. §§ 1-23-10, et seq. (2009).

[3] Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 12 S.Ct. 675, 531 U.S. 159, 148 L.Ed.2d 576 (2001).

[4] SC Code Ann. § 48-39-80 (2009).

[5] Captain’s Quarters Motor Inn, Inc. v. South Carolina Coastal Council, 306 S.C. 488, 413 S.E.2d 13 (1992).

[6] S.C. Code Ann. §§ 48-39-50(E), (F), (I), and (R), -70(A), -80(A), and -130(B).

[7] S.C. Code Ann. § 48-39-130(B) also provided that the interim rules and regulations were not subject to the APA.

Regional Climate Programs in Line for Shakeup, Voluntary Markets To Remain

Posted on February 2, 2010 by Deborah Jennings

By Deborah Jennings and Andrew Schatz, DLA Piper US LLP[1]

 

As comprehensive climate legislation stalls in Congress, increased attention is being paid to alternative climate regimes, particularly the prospect of Environmental Protection Agency (EPA) regulation and regional and voluntary climate initiatives. Regional initiatives have faced their share of challenges during their infancy and, to varying degrees, may incur more with the development of a federal cap-and-trade program or EPA regulation of greenhouse gas (GHG) emissions under the Clean Air Act (CAA).

 

The Regional Greenhouse Gas Initiative (RGGI) and the California Global Warming Solutions Act (AB 32) are the most advanced climate initiatives in the U.S. California’s AB 32 requires measures to reduce California’s GHG emissions by 174 million metric tons of CO2 equivalent, or 29%, by 2020. California recently issued a draft cap and trade regulation covering 600 of the state’s largest industrial and electric generating stationary sources. The RGGI program is more mature with a cap-and-trade program that commenced in 2009. It “stabilizes” CO2 levels during 2009-2014 and reduces emissions 10% by 2019.

 

In its first year, RGGI has generated several concerns. Unlike other cap-and-trade programs, such as the NOx Budget Trading Program, which distributed allowances to regulated entities, but incentivized them to invest in emission controls, RGGI states decided to sell emissions allowances. Under RGGI, a utility must both purchase allowances and pay for emission controls. The sale of allowances makes RGGI look more like a tax on energy and inevitably will lead to higher energy costs. 

 

RGGI’s offset program is also restrictive, thereby narrowing compliance options. Although the model rule provides for use of offsets for reduction of emissions in certain categories such as landfill methane capture and afforestation, this opportunity is undercut by the requirement to demonstrate economic “additionality.” To be useable, these offsets must have been generated by projects that are not “economically attractive absent the revenue stream provided by an emissions offset.” This subjective test does not recognize the reality that many of these projects are economically marginal and need more than one source of revenue. This economic additionality requirement undercuts the creation of offsets. 

 

Noticeably absent from RGGI is Pennsylvania, one of the largest coal-fueled utility states in the Northeast.  Because    Pennsylvania and other big coal states are included in larger electricity dispatch regions, CO2 regulation and increased cost on RGGI utilities will result in increased demand for electricity from the unregulated utilities in the same power region. A clear example of this is PJM, which oversees electric supply in the coal states of Ohio, Pennsylvania, Virginia, and West Virginia, as well as the RGGI states of Delaware, Maryland, and New Jersey. Untaxed electricity with   high carbon-content from non-RGGI generators will be preferred and sold in larger quantities than more expensive power, thereby undercutting the objective of reducing emissions. This is the “leakage” phenomenon.

 

RGGI and other state and regional regulatory climate programs may be eliminated under proposed federal climate legislation. The House bill specifically pre-empts state and regional cap-and-trade programs between 2012 and 2017. Pre-emption concerns may already be impacting the RGGI market, where prices for 2012 allowances are barely above the Reserve Price. 

 

In the meantime, EPA is forging ahead with its own GHG regulations. Last Fall, it made a GHG  “endangerment” finding and required quantification and reporting of GHG emissions. EPA will soon finalize the regulation of GHGs from light-duty vehicles, setting in motion a statutorily required process to regulate GHGs from major stationary sources that are modified or constructed. Among the class of stationary sources that will be affected are municipal solid waste landfills, which are the source of approximately one fourth of methane emissions in the US. Once regulated by EPA, construction or modification of these sources would require GHG control and would no longer generate “offset” allowances because controls would be now required by law.

 

Notwithstanding potential federal climate policy, the voluntary carbon markets should continue to flourish based on experience to date. Global voluntary carbon markets nearly doubled in 2008 and are expected to increase. Europeans purchased half of these offsets for noncompliance purposes.  This continued interest in voluntary markets is partly motivated by individuals and corporations choosing to reduce their carbon footprint. Our law firm, for example, has purchased carbon credits since 2008 to offset air travel emissions as part of a Sustainability Initiative. As national awareness of climate issues continues to grow, voluntary carbon markets are likely to expand and thrive.



[1] The views presented in this article are the authors’ alone and not DLA Piper US LLP or its clients.

More on a New Ozone NAAQS: EPA's Clean Air Science Advisory Committee Endorses EPA's Proposed Range

Posted on February 1, 2010 by Seth Jaffe

EPA has proposed lowering the NAAQS to a range of from 0.060 ppm – 0.070 ppm. Earlier this week, EPA’s Clean Air Science Advisory Committee, or CASAC, met and endorsed EPA’s proposed range. Some CASAC members did express concern about EPA’s proposed secondary seasonal standard, intended to protect crops and forests. However, overall, the CASAC seal of approval is pretty much the end of this argument.

It is important to recall how we got here. CASAC already endorsed the 0.060 ppm – 0.070 range several years ago, before EPA’s last ozone standard was issued. It was EPA’s refusal to follow the CASAC recommendations, and instead propose a 0.075 ppm standard, which led to litigation challenging the standard and the current controversy. 

It is difficult to overstate the weight given the CASAC’s views. Indeed, EPA’s fine particulate standard was vacated in significant part because EPA failed to follow CASAC’s recommendations.

Thus, a standard that does not comport with CASAC’s recommendations would likely be rejected by the courts as arbitrary and capricious. However, I suspect that CASAC’s influence also runs the other way. Assuming that EPA does indeed promulgate a revised NAAQS in the 0.060 ppm – 0.070 ppm range, and assuming that industrial interests challenge the new standard, it will be very difficult to establish that the new standard is arbitrary and capricious if it has been endorsed by CASAC. 

As I noted in connection with the fine particulate standard, it’s not obvious to me that this is a good thing. Depending on whose ox is being gored, anyone can get up on a soapbox and say that they want science to be free of politics. However, these are really policy decisions. It’s one thing to acknowledge that these are complicated issues and we thus have to allow Congress to delegate its authority to the EPA administrator. It’s another effectively to delegate the decision further to the CASAC, which is about as obscure an acronym body as we have. Do we really want standards which will result in compliance costs in at least the tens of billions of dollars being made by groups which truly are not accountable in any meaningful way?

Practical Impacts of Burlington Northern on Multi-Party Superfund Sites

Posted on January 29, 2010 by William Hyatt

To many Superfund practitioners, United States v. Burlington Northern & Sante Fe Railway Company, __ U.S. __, 129, S. Ct. 1870 (2009) represents the latest in a series of surprises from the Supreme Court. The decision follows Cooper Industries, Inc. v. Aviall Services, Inc, 543 U.S. 157 (2004), from which we learned that the statutory words “during or following” really mean just what they say and contribution claims under the Comprehensive Response Compensation and Liability Act (also referred to as CERCLA or the Superfund statute) are only available in those limited circumstances. A few years later, in United States v. Atlantic Research Corp., 551 U.S. 128 (2007), we learned that “covered persons” (also referred to as potentially responsible parties or PRPs) under the statute may, in certain procedural circumstances, have cost recovery claims in the event they do not meet the criteria for contribution claims.   In Burlington Northern, we learned that “arranger” liability may not be as broad as we had thought it was, and that joint and several liability may not be the automatic we thought it was. It is probably fair to say that the outcome in Burlington Northern, like the outcomes in Aviall and Atlantic Research, was not intuitive to Superfund practitioners.

 

            A Superfund practitioner might have expected the Supreme Court decision in Burlington Northern to look more like the Ninth Circuit opinion it reversed (found at 502 F.3d 781), endorsing a broad reading of “arranger” liability under the statute and applying joint and several liability to all the defendants, the latter being the norm for more than 25 years since the seminal decision in United States v. ChemDyne, 572 F. Supp. 802 (S.D. Ohio 1983).

 

As with Aviall and Atlantic Research, it will probably take many years, and many decisions by the lower courts, before we fully appreciate the implications of Burlington Northern, but one thing is already clear. Defendants in multi-party Superfund sites will be contending for apportionment as the alternative to joint and several liability, if for no other reason than to avoid funding the orphan share represented by “covered persons” who can’t be found, no longer exist, or, as is more recently the case, are bankrupt. On the other hand, governments asserting cost recovery claims can be expected to continue to advocate aggressively for joint and several liability, so as to avoid having to absorb the orphan share themselves. The question is what practical impacts this battleground will have on Superfund practice at multi-party sites.

 

            Burlington Northern raises several practical questions which will have to resolved as the law and practice develop. Here are some of them.

 

Whether a defendant is entitled to apportioned liability is a fact-intensive inquiry, resolved in Burlington Northern only after a six week bench trial, and only after the district judge took four years to render a decision. Will governments be able to obtain liability judgments at the beginning of cost recovery actions, as they have typically tried to do in the past? Will Burlington Northern force more cases to go to trial? 

 

Whether liability is subject to apportionment is not likely to be decided until the end of a case, as it was in Burlington Northern. How will cost recovery defendants evaluate their chances of success in the early stages of a case? Will they feel compelled to develop a detailed record to support arguments that liability for a single harm is subject to apportionment, unlike the defendants in Burlington Northern, who limited their arguments to general denials of liability?

 

Governmental plaintiffs can be expected to insist that liability at multi-party sites is still joint and several, even after Burlington Northern. Will those governmental plaintiffs be willing to consider the litigation risk that liability may be subject to apportionment in negotiating settlements? If so, how will that litigation risk be taken into consideration?

If liability is apportioned, how will any resulting orphan shares be funded? Will EPA’s historic limitations on orphan share funding be adequate? If not, where will the funding come from? Is the Superfund tax more likely to be reinstated because of Burlington Northern?

 Will the organization of multiple “covered persons” into PRP groups be more difficult if the defendants believe they can escape liability through apportionment? How will defendants balance that possibility against the potential benefit in the form of reduced costs that might be gained by performing cleanup work themselves?

 

Will ADR emerge as the norm for dividing responsibility among defendants who believe their liability is subject to apportionment, as it has in allocating joint and several liability? What evidence will be used to apportion liability? Burlington Northern endorsed many of the same causation-related considerations as the equitable factors historically used to allocate joint and several liability; will some or all of the Gore factors still be relevant? Burlington Northern also endorsed estimations and compromises, considerations not normally found in legal determinations; how will the lower courts react to imprecise calculations of apportioned liability?

 

How will defendants argue for an orphan share? Will they seek to establish an orphan share from the bottom up (by quantifying the share of missing PRPs), or from the top down (by quantifying their own individual shares)? Whichever way defendants decide to approach the issue, they can be expected to develop the record the district judge found lacking in Burlington Northern.

 

Finally, in states whose statutes make joint and several liability explicit (e.g, the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11g(c)(1)), how will apportionment decisions be made? Will the scope of liability be different to EPA and to such states?   Under such statutes, is there no instance in which liability will be subject to apportionment, even for distinct harms?

Like Aviall and Atlantic Research before it, Burlington Northern promises to be a fertile source of future litigation. 

BLANKENSHIP-KENNEDY DEBATE CLIMATE CHANGE

Posted on January 28, 2010 by David Flannery

On January 21, 2010 thousands packed the auditorium at the University of Charleston in Charleston West Virginia and tuned in on television and radio for the debate between Massey Energy CEO Don Blankenship and environmentalist Robert F. Kennedy, Jr.

Asked about his primary concerns for the future of energy, Mr. Blankenship stated that they were the security of this country and improving the quality of life in this country and throughout the world. This answer became somewhat of a theme for Mr. Blankenship, as he stated his concern for the health and well-being of people, which is dependent on their quality of life, which is heavily dependant on affordable electricity, which is heavily dependent on coal.

When asked the same question, Mr. Kennedy offered several minutes of comments similar to other speeches he has given around the country concerning Appalachia and coal in which he highlighted his families’ ties to West Virginia along with his views against surface mining.

The audience, having a near equal number of supporters from both sides, was relatively subdued thanks to early pleas from University of Charleston President and event moderator Dr. Welch to hold-off applause until the end. At times, however, both debaters received loud applause for their answers to questions.

Throughout the debate, Mr. Kennedy stated the many health and environmental issues he believed to be caused by coal, while Mr. Blankenship reminded Mr. Kennedy that many of his biggest issues with coal, such as the burning of coal and its contribution to Mercury in water, are primarily caused by other countries with much a higher usage of coal, such as China and India.

Mr. Kennedy also focused a great deal on alternative energy, such as wind and solar energy, as well as West Virginia’s need to switch its focus on these alternative energy sources. Mr. Blankenship responded that if it was profitable to build solar panel fields or wind farms, without government subsidies, it would be happening at a greater rate than is occurring. Blankenship stated that his company is pouring hundreds of millions of dollars into the coal industry because that is where the investment will pay off in a free enterprise market.

While the security at the event mirrored that of international flight travel, the debate itself was a success, going off without much disturbance other than the occasional burst of applause.

BLANKENSHIP-KENNEDY DEBATE CLIMATE CHANGE

Posted on January 28, 2010 by David Flannery

On January 21, 2010 thousands packed the auditorium at the University of Charleston in Charleston West Virginia and tuned in on television and radio for the debate between Massey Energy CEO Don Blankenship and environmentalist Robert F. Kennedy, Jr.

Asked about his primary concerns for the future of energy, Mr. Blankenship stated that they were the security of this country and improving the quality of life in this country and throughout the world. This answer became somewhat of a theme for Mr. Blankenship, as he stated his concern for the health and well-being of people, which is dependent on their quality of life, which is heavily dependant on affordable electricity, which is heavily dependent on coal.

When asked the same question, Mr. Kennedy offered several minutes of comments similar to other speeches he has given around the country concerning Appalachia and coal in which he highlighted his families’ ties to West Virginia along with his views against surface mining.

The audience, having a near equal number of supporters from both sides, was relatively subdued thanks to early pleas from University of Charleston President and event moderator Dr. Welch to hold-off applause until the end. At times, however, both debaters received loud applause for their answers to questions.

Throughout the debate, Mr. Kennedy stated the many health and environmental issues he believed to be caused by coal, while Mr. Blankenship reminded Mr. Kennedy that many of his biggest issues with coal, such as the burning of coal and its contribution to Mercury in water, are primarily caused by other countries with much a higher usage of coal, such as China and India.

Mr. Kennedy also focused a great deal on alternative energy, such as wind and solar energy, as well as West Virginia’s need to switch its focus on these alternative energy sources. Mr. Blankenship responded that if it was profitable to build solar panel fields or wind farms, without government subsidies, it would be happening at a greater rate than is occurring. Blankenship stated that his company is pouring hundreds of millions of dollars into the coal industry because that is where the investment will pay off in a free enterprise market.

While the security at the event mirrored that of international flight travel, the debate itself was a success, going off without much disturbance other than the occasional burst of applause.

SCOTT BROWN'S ELECTION - ONE MORE SET-BACK FOR CLIMATE CHANGE LEGISLATION?

Posted on January 27, 2010 by Michael Hockley

When Scott Brown was elected to fill Senator Kennedy’s senate seat, news reports highlighted the impact on health care legislation and the loss of the filibuster-proof sixty vote Democratic majority in the Senate. In environmental circles, however, many commentators pointed out the potential impact on climate change legislation. 

 

Prior to his election, most believed that once Congress passed the health care bill, it would turn its full attention to climate change legislation and pass some form of legislation to limit green house gas (“GHG”) emissions. The loss of this key Democratic Senate seat makes the prospect of GHG legislation in the near future seem less likely, although some commentators take the contrarian view. They argue that if health care reform moves to the back burner, the chances of passing a climate bill would increase because Democrats need a major legislative victory to bolster the 2010 election efforts.

 

Following the United States Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007) finding the Environmental Protection Agency (“EPA”) has the authority to regulate carbon dioxide as a pollutant under the Clean Air Act (“CAA”), some form of mandatory GHG controls, either through legislation, regulation, or a combination of both, has seemed inevitable. In response to the Massachusetts decision, EPA and Congress have been moving on parallel tracks to regulate GHG emissions. 

 

EPA has issued a number of proposed and final rules, including a final mandatory GHG reporting rule, 74 Fed. Reg. 56260 (Oct. 30, 2009), an Endangerment and Cause or Contribute Finding that motor vehicle GHG emissions contribute to GHG pollution and threaten public health and welfare, 74 Fed. Reg. 66496 (De. 15, 2009), and a proposed “Prevention of Significant Deterioration and Title 5 Greenhouse Gas Tailoring Rule,” 74 Fed. Reg. 55292 (Oct. 27, 2009), among others. EPA and the National Highway Traffic Safety Administration also announced a joint proposal to establish light duty vehicle GHG and mileage standards for model years 2012 through 2016.

 

In response to concerns expressed by both industry and environmental interests that the CAA is not the best vehicle for regulating GHGs, factions in the House and the Senate have proposed sweeping legislation to reduce GHG emissions, the Waxman-Markey Climate Change bill, H.R. 2454, “The American Clean Energy and Security Act of 2009,” in the House of Representatives, and  the Boxer-Kerry bill, the “Clean Energy Jobs and American Power Act,” in the Senate.  Both include GHG emissions reductions targets and use a cap and trade scheme to achieve those goals. In addition, they include a variety of other measures to encourage investment in alternative energy sources and energy efficiency. 

 

In recent months, efforts to move forward with this legislation seems to have been eclipsed by efforts to pass comprehensive  health care legislation, but the conventional wisdom was that some form of legislation would be passed once health care was put to rest. Now that the Democrats have lost a filibuster-proof super majority, prospects for climate change legislation seem to be dimming.

 

On the EPA regulatory front, Senator Lisa Murkowski (R-Alaska) has been on the attack, trying to prevent EPA from promulgating GHG regulations that limit emissions from major sources. Most recently, she filed a “disapproval resolution” on January 22, 2010, seeking to retroactively veto EPA’s endangerment and cause or contribute findings that GHGs endanger public health and the environment, thereby .blocking EPA’s GHG regulations. 

 

A disapproval resolution is a procedural mechanism that prohibits executive branch agency rules from taking effect. It only requires 51 votes and is not subject to filibuster rules. Senator Murkowski claims to have the backing of 39 other senators, including three Democrats, Sen. Blanche Lincoln (D-Ark.), Sen. Ben Nelson (D-Neb., and Sen. Mary Landrieu (D-La.). She introduced this resolution on the heels of Scott Brown’s election, and she does not expect this resolution to reach the floor for a vote before Scott Brown is sworn into office.

Even if she is able to garner 51 votes in the Senate, the House must pass a similar resolution, and it must be signed by the President to go into effect. Even if it does not succeed, it signals a widespread lack of support, even among Democrats, for legislation controlling GHG emissions this year.  Scott Brown’s election should make it more difficult to enact climate change legislation, especially with an election season just around the corner because his election is being interpreted by many to signal the electorate’s disapproval of the Obama agenda. 

 

In the meantime, if there is no climate change legislation passed, EPA likely will continue to move down the regulatory path of limiting GHG emissions using its authority under the CAA.

WATER MORE VALUABLE THAN OIL NOW? FOR SURE SOMEDAY!

Posted on January 21, 2010 by Stephen E. Herrmann

According to Bloomberg News, the worldwide scarcity of usable water worldwide already has made water more valuable than oil. The Bloomberg World Water Index, which tracks 11 utilities, has returned more to investors every year since 2003 than oil and gas stocks or the Standard & Poor’s 500 Index.

When you want to spot emerging trends, follow the money. Today, many of the world’s leading companies and investors are making big bets on water. Why -- there simply is not enough freshwater to go around, and the situation is expected to get worse before it gets better.

The most essential commodity in the world today is not oil, not natural gas, not even some type of renewable energy. It’s water -- clean, safe, fresh water.

 

TODAY:

In 1992, the United Nations General Assembly designated March 22 as World Water Day. Every year on that date, people worldwide participate in events and programs to raise public awareness about what many believe to be the world’s most serious health issue -- unsafe and inadequate water supplies -- and to promote the conservation and development of global water resources.

 

More than a billion people -- almost one-fifth of the world’s population -- lack access to safe drinking water, and 40 percent lack access to basic sanitation, according to the 2nd UN World Water Development Report.

 

The United Nations estimates that by 2050 more than two billion people in 48 countries will lack sufficient water. Approximately 97 percent to 98 percent of the water on planet Earth is saltwater (the estimates vary slightly depending on the source). Much of the remaining freshwater is frozen in glaciers or the polar ice caps. Lakes, rivers and groundwater account for about 1 percent of the world’s potentially usable freshwater.

 

According to the United Nations, which has declared 2005-2015 the “Water for Life” decade, 95 percent of the world’s cities still dump raw sewage into their water supplies. Thus it should come as no surprise to know that 80 percent of all the health maladies in developing countries can be traced back to unsanitary water. The global water crisis is the leading cause of death and disease in the world, taking the lives of more than 14,000 people each day, 11,000 of them children under age 5.

 

TOMORROW:

 

If global warming continues to melt glaciers in the polar regions, as expected, the supply of freshwater may actually decrease. First, freshwater from the melting glaciers will mingle with saltwater in the oceans and become too salty to drink. Second, the increased ocean volume will cause sea levels to rise, contaminating freshwater sources along coastal regions with seawater.

 

Sandra Postel, author of the 1998 book, Last Oasis: Facing Water Scarcity, predicts big water availability problems as populations of so-called “water-stressed” countries jump perhaps six fold over the next 30 years. “It raises tons of issues about water and agriculture, growing enough food, providing for all the material needs that people demand as incomes increase, and providing drinking water,” says Postel.

 

Developed countries are not immune to freshwater problems either. Researchers found a six-fold increase in water use for only a two-fold increase in population size in the United States since 1900. Such a trend reflects the connection between higher living standards and increased water usage, and underscores the need for more sustainable management and use of water supplies even in more developed societies. Further evidence of the coming issue with water is that while China is home to 20 percent of the world’s people, only 7 percent of the planet’s freshwater supply is located there.

 

THE PATH:

 

With world population expected to pass nine billion by mid-century, solutions to water scarcity problems are not going to come easy. Some have suggested that technology -- such as large-scale saltwater desalination plants -- could generate more freshwater for the world to use. But environmentalists argue that depleting ocean water is no answer and will only create other serious problems. 

 

The cost of water is usually set by government agencies and local regulators. Water is not traded on commodity exchanges, but many utilities stocks are publicly traded. Meanwhile, investments in companies that provide desalinization, and other processes and technologies that may increase the world’s supply of freshwater, are growing rapidly. General Electric Chairman Jeffrey Immelt said the scarcity of clean water around the world will more than double GE’s revenue from water purification and treatment by 2010 -- to a total of $5 billion. GE’s strategy is for its water division to invest in desalinization and purification in countries that have a shortage of freshwater. Research and development into improving desalination technologies is ongoing, especially in Saudi Arabia, Israel and Japan. And already an estimated 11,000 desalination plants exist in some 120 countries around the world.

 

As individuals, we can all reign in our own water use to help conserve what is becoming an ever more precious resource. We can hold off on watering our lawns in times of drought. And when it does rain, we can gather gutter water in barrels to feed garden hoses and sprinklers. We can turn off the faucet while we brush our teeth or shave, and take shorter showers. As Sandra Postel concludes, “Doing more with less is the first and easiest step along the path toward water security.”

Zubulake Revisited: Judge Scheindlin on Discovery Sanctions

Posted on January 20, 2010 by John Barkett

Every environmental litigator understands the duty to preserve documents. Before a complaint is filed, a plaintiff must preserve documents relevant to the claims about to be advanced. If a defendant reasonably anticipates litigation, the defendant must undertake reasonable efforts to preserve documents that are relevant to the impending lawsuit. Once a complaint is served, a defendant must preserve documents relevant to the claims alleged.

 

In the electronic world, especially on a prelitigation basis, it is doubly important to identify custodians with relevant documents (“key players”) since with a keystroke, they have the ability to delete responsive electronically stored information. Aluminum Corp. v. Alcoa, Inc., 2006 U.S. Dist. LEXIS 66642 (M.D. La. July 19, 2006) illustrates the risk. Alcoa sent a cost-recovery demand to Consolidated Aluminum in 2002 and promptly put a litigation hold on the electronic documents of four Alcoa employees involved with a remedial investigation and cleanup. In 2003, Consolidated filed a declaratory judgment action seeking to be absolved of liability. In 2005, Consolidated propounded discovery that prompted Alcoa to expand its key player list by eleven more names. It was not until this expansion that Alcoa suspended its janitorial email deletion policy and backup tape maintenance policy which at Alcoa meant that email older than about seven months was no longer available unless it had been archived by the individual user. The magistrate judge imposed a monetary sanction on Alcoa—in effect determining that Alcoa should have identified these additional individuals as key players in 2002. 2006 U.S. Dist. LEXIS 66642, *36.

 

If a duty to preserve is violated, and documents are lost as a result, sanctions may result. What sanction will depend upon the level of culpability of the “spoliating” party—negligence, gross negligence, or bad faith--and the amount of prejudice to the “innocent” party by the loss of information relevant to the innocent party’s claim or defense. But what is the difference between “negligence” and “gross negligence”? Who has the burden of proof in establishing the culpability of the conduct or the existence of prejudice? May a court presume prejudice depending upon the level of culpability? If so, is such a presumption rebuttable?

 

Much like she did in the five Zubulake v. UBS Warburg decisions, Judge Shira Scheindlin has written another blockbuster decision answering all of these questions. The Pension Committee of the University of Montreal Pension Plan et al. v. Banc of America Securities, LLC et al., Civ. 9016 (January 15, 2010). In her amended opinion and order, (the original opinion was issued January 11, 2010 and appears at 2010 WL 93124), Judge Scheindlin defined gross negligence by reference to misfeasance following the attachment of a duty to preserve. She held that a finding of gross negligence will accompany the failure to

 

  • issue “a written litigation hold,”
  • “identify key players” and to “ensure that their electronic and paper records are preserved,”
  • “cease the deletion of email” or “preserve the records of former employees that are in a party's possession, custody, or control,” and
  • preserve backup tapes “when they are the sole source of relevant information or when they relate to key players, if the relevant information maintained by those key players is not obtainable from readily accessible sources.”

In contrast, the failure to obtain records from all employees, as opposed to key players, or to take all appropriate measures to preserve electronically stored information in most cases “likely” will fall into the “negligence” category, unless the facts, on a case-by-case basis, demonstrate otherwise, she held.

 

The burden of proof, the court said, is on the innocent party to show that the spoliating party had (1) control over the evidence and an obligation to preserve it at the time of its loss and (2) acted with a culpable state of mind, and that (3) the missing evidence is relevant to the innocent party’s claim or defense. Relevance is presumed when bad faith exists. Some courts presume relevance when “gross negligence” has been found, but Judge Scheindlin held that this presumption is “not required.” If only negligence has been found, the innocent party must prove relevance and prejudice. Irrespective of the level of culpability, “any presumption is rebuttable.”

 

The slip opinion is 85 pages in length and rather than summarizing it further here, I urge readers to review it. In the end, Judge Scheindlin decided that relevant information was lost and the innocent party (here a defendant) was prejudiced. She decided to give an adverse inference instruction that itself represents two illuminating single-spaced pages of the opinion, along with monetary sanctions (including attorneys’ fees for deposing certain declarants and bringing the sanctions motion).

 

Pension Committee begins with the byline, “Zubulake Revisited: Six Years Later.” This time, there will be no debate over how to pronounce Pension Committee. And, in the years to come, Pension Committee is sure to be cited just as often as Zubulake has been.

"MEGA" SHALE AND TIGHT SANDS GAS - A GAME CHANGER

Posted on January 19, 2010 by R. Kinnan Golemon

In the past several decades, due in large measure to the persistence of innovative independent oil and gas operators, advancements in drilling and completion technology and the increased demand for natural gas during the expanding economic times that existed prior to year-end 2008, a paradigm shift occurred in the domestic natural gas market that will have significant impact in areas of the U.S. that, heretofore, were not significant producers of the commodity. Prior to this development, supply tightness and price volatility were characteristic features of the natural gas market. Now, due to these " Mega" shale and tight sands gas plays, there will be increased environmental scrutiny of this sector's activities, in addition to the dampening of price swings.

 

            The U.S. gas supply currently is predicted to be at least 150 years at use levels similar to those existing in 2008. Only a few short years ago, forecasters were predicting the need for massive imports of liquefied natural gas to meet predicted near term demand. This change in conditions has very significant implications politically and certainly presents interesting opportunities on a variety of fronts for environmental attorneys.

 

            One particularly interesting aspect of these newly found natural gas reserves is the fact that a significant portion of this exploration, production, processing and transmission activity will be occurring in areas of the U.S. that have had limited exposure to such activity. The last ten (10) years of rapid expansion of natural gas activity in the Barnett Shale area of Texas, i.e., North Central Texas and the Dallas-Ft. Worth metroplex, is a forerunner for what is likely to occur as the resource development expands to other known shale deposits.

 

 

            Needless to say, there is opportunity for tremendous growth in local tax base, ample employment opportunities for certain skill sets, increased income to property owners, and, most certainly, a variety of allegations of environmental harm from anti-drilling opposition. Much of the latter in the very recent past in the Barnett Shale area has been directed at perceived increases in emissions of air contaminants, e.g., VOCs and "toxic" constituents. To date, snapshot air quality sampling has not confirmed any problem. (see January 12, 2010, Texas Environmental Quality Press Release – Oil and Gas Air Tests in Ft. Worth find "No Cause for Concern".) However, on the same date, the Mayor of Dish, a rural community of less than 200 residents, was appearing before another state agency, the Texas Railroad Commission, seeking a cessation to all natural gas drilling, production, processing and transmission activity with the contention that this community was besieged by toxins and odors emanating from nearby natural gas activity. (Additional TCEQ air sampling results from recent tests in that rural setting are due to be released this month.) 

  

           Numerous other environmental related contentions relative to the development of the Barnett Shale reserve have generally been directed at the well completion phase where large volumes of fresh water with additives are utilized in hydraulic fracing (pressurized mixture for breaking apart the formation rock to allow for the natural gas to flow), the disposal of wastewater and the specifics of the proprietary formulas for the additives. In addition, there are a variety of claims relative to general safety, increased truck traffic and disturbances of property for the placing of associated gathering and transmission lines.           

 

            This paradigm shift in the natural gas reserve potential should afford many in our profession an excellent opportunity to provide sound advice and counsel utilizing the experiences we have gained in addressing similar issues in the past.

"MEGA" SHALE AND TIGHT SANDS GAS - A GAME CHANGER

Posted on January 19, 2010 by R. Kinnan Golemon

In the past several decades, due in large measure to the persistence of innovative independent oil and gas operators, advancements in drilling and completion technology and the increased demand for natural gas during the expanding economic times that existed prior to year-end 2008, a paradigm shift occurred in the domestic natural gas market that will have significant impact in areas of the U.S. that, heretofore, were not significant producers of the commodity. Prior to this development, supply tightness and price volatility were characteristic features of the natural gas market. Now, due to these " Mega" shale and tight sands gas plays, there will be increased environmental scrutiny of this sector's activities, in addition to the dampening of price swings.

 

            The U.S. gas supply currently is predicted to be at least 150 years at use levels similar to those existing in 2008. Only a few short years ago, forecasters were predicting the need for massive imports of liquefied natural gas to meet predicted near term demand. This change in conditions has very significant implications politically and certainly presents interesting opportunities on a variety of fronts for environmental attorneys.

 

            One particularly interesting aspect of these newly found natural gas reserves is the fact that a significant portion of this exploration, production, processing and transmission activity will be occurring in areas of the U.S. that have had limited exposure to such activity. The last ten (10) years of rapid expansion of natural gas activity in the Barnett Shale area of Texas, i.e., North Central Texas and the Dallas-Ft. Worth metroplex, is a forerunner for what is likely to occur as the resource development expands to other known shale deposits.

 

 

            Needless to say, there is opportunity for tremendous growth in local tax base, ample employment opportunities for certain skill sets, increased income to property owners, and, most certainly, a variety of allegations of environmental harm from anti-drilling opposition. Much of the latter in the very recent past in the Barnett Shale area has been directed at perceived increases in emissions of air contaminants, e.g., VOCs and "toxic" constituents. To date, snapshot air quality sampling has not confirmed any problem. (see January 12, 2010, Texas Environmental Quality Press Release – Oil and Gas Air Tests in Ft. Worth find "No Cause for Concern".) However, on the same date, the Mayor of Dish, a rural community of less than 200 residents, was appearing before another state agency, the Texas Railroad Commission, seeking a cessation to all natural gas drilling, production, processing and transmission activity with the contention that this community was besieged by toxins and odors emanating from nearby natural gas activity. (Additional TCEQ air sampling results from recent tests in that rural setting are due to be released this month.) 

  

           Numerous other environmental related contentions relative to the development of the Barnett Shale reserve have generally been directed at the well completion phase where large volumes of fresh water with additives are utilized in hydraulic fracing (pressurized mixture for breaking apart the formation rock to allow for the natural gas to flow), the disposal of wastewater and the specifics of the proprietary formulas for the additives. In addition, there are a variety of claims relative to general safety, increased truck traffic and disturbances of property for the placing of associated gathering and transmission lines.           

 

            This paradigm shift in the natural gas reserve potential should afford many in our profession an excellent opportunity to provide sound advice and counsel utilizing the experiences we have gained in addressing similar issues in the past.

ADVENTURES IN WATER QUALITY MITIGATION

Posted on January 13, 2010 by Rick Glick

The regulated community is experimenting with solutions to water quality regulatory problems that are market based and implemented on a watershed scale. Such efforts are being met with guarded interest by agencies, environmental organizations and the public, but offer the best hope for true ecological restoration. Oregon has recently passed legislation to foster ecosystem services markets to facilitate this approach. 

 

The Clean Water Act addresses water quality degradation through establishment of water quality standards and imposition of technology based effluent limitations in point source discharge permits. The receiving waters are tested periodically to see if standards are being attained, and if not, then Total Maximum Daily Loads are set and waste load allocations given to point sources so that permits can be adjusted. Non-point sources are given load allocations in the TMDL, but since there is no direct regulatory enforcement mechanism, and since funding sources are limited, compliance is not assured. 

 

This model has worked out pretty well for dealing with municipal and industrial waste water discharges, and toxics in receiving waters have been  much reduced. However, there has been little effect on water quality degradation related to non-point sources. In Oregon, over 1,200 streams are listed as water quality limited, and the vast majority are on the list for non-point source related problems, such as warmer ambient water temperatures and nutrient loading. What to do?

 

 

The conventional response is to ratchet up permit requirements for point sources, or impose local mitigation requirements on those caught in the Clean Water Act § 401 water certification web.  As it is said, if all you have is a hammer, all your problems are nails. There are, however, other tools in the box. Here are a couple of examples of ecomarket approaches.

 

Clean Water Services is the second largest sewerage agency in Oregon. It has four treatment outfalls discharging to the flat, slow moving Tualatin River. The discharge raises  receiving water temperatures, and when it came time to renew its four permits, the agency was facing stricter requirements to control thermal loading. Rather than installing mechanical chillers at the outfalls, the CWS proposed a large-scale riparian revegetation program. It was projected that the massive tree planting effort would take about ten years to match the cooling effect of the chillers, but would double the cooling as the trees matured. And with such an effort come ancillary habitat and other ecological benefits throughout the watershed that no chiller could provide. The Oregon Department of Environmental Quality approved the program and it is being implemented.

 

Idaho Power Company has proposed a similar approach to resolve water temperature problems associated with its Hells Canyon Complex on the Snake River. The HCC is comprised of three dams and reservoirs that together generate over 1,100 MW.  The HCC is undergoing relicensing, which triggers the CWA 401 water quality certification process before both the Oregon and Idaho Departments of Environmental Quality, as the Snake River is a border stream. A temperature control structure installed in the HCC’s largest reservoir would probably solve the regulatory problem, but would offer few ecological benefits. Instead, the company is proposing an ambitious upstream watershed improvement program comprised of riparian planting, fencing, wetlands enhancement, irrigation efficiency upgrades and flow augmentation. The Snake River watershed is vast and complex, with heavy human influence throughout, so a program on this scale will be tough to implement. However, the potential upside piques the imagination. 

 

Official policy favors such watershed approaches. EPA has adopted a water quality trading policy that encourages transactions between point and non-point sources with a focus on reducing nutrient loads and thus restoring depleted dissolved oxygen. EPA also recognizes the potential for applying the policy to temperature problems. Last year the Oregon legislature enacted Senate Bill 513 , which establishes state policy supporting development of ecosystem services markets to facilitate watershed scale solutions to water quality restoration. 

 

I have been appointed to the SB 513 working group tasked with developing the policy and making further recommedations to the legislature. One of the greatest challenges is the lack of reliable metrics. Because there are myriad other upstream influences on water temperature, it is exceedingly difficult to measure the effect of an upstream tree planting program on downstream temperatures. Further, the benefits from watershed programs are long term in nature. 

 

Thus, there is risk both to the permittee and the regulatory agency that someone will sue to require immediate and measureable results. But if the goal of the overall regulatory program is truly ecological protection and restoration, then we must go beyond compliance for the sake of compliance and focus on outcomes. The huge potential for sustainable, widespread benefits resulting from watershed approaches makes this an effort well worth making.

Ozone and the Citizen

Posted on January 12, 2010 by Alan Gilbert

Accompanied by a considerable public relations effort, the United States Environmental Protection Agency proposed new national ambient air quality standards for ozone on January 7, 2010. The agency wants to reduce the primary 8-hour ozone standard from its current value of 0.075 parts per million, promulgated by the last administration in March 2008, to a level in the range from 0.060 to 0.070 parts per million. Using its reconsideration of the 2008 standard as a platform, EPA emphasized that more careful attention should be paid to the recommendations of its Clean Air Scientific Advisory Committee. That, it says, is just good science.

 

The country will face considerable difficulty and expense meeting the proposed primary standard nationwide, especially at its lower range. Based on monitoring data from 2006 to 2008, EPA predicts that a proposed primary standard set at 0.060 parts per million would be violated in all but 24 of the counties monitored counties nationwide for the pollutant.

 

In the part of the country where I live ― my office is in Colorado ― a new standard is going to be extremely difficult to meet, especially at the lower range of the proposal. In our area of the West, monitoring shows that we are, for the most part, quite close to either side of the current 2008 standard. The populous Northern Front Range region of the state reports ozone values of 0.071 parts per million to 0.086 parts per million. Colorado’s state health department, like many others in the West, is struggling mightily to form compliance strategies that will substantially improve ozone air quality in areas that today do not meet the existing standard.

 

Ozone pollution generally is formed in the atmosphere near the ground in very complex reactions that exploit energy from sunlight to transform a mix of volatile organic compounds, nitrogen oxides, carbon monoxide and methane. Control of ozone focuses on industrial facilities, the generation of electricity, motor vehicle exhaust gases, gasoline vapors, and chemical solvents. These are the major sources of volatile organic compounds and nitrogen oxides generated from human activities.

 

Ozone is particularly difficult to control because of pollutant transport. Precursor pollutants and ozone often arrive near a monitor in a complicated mix of local emissions and emissions carried by the wind from hundreds of miles away. A knowledgeable local air quality expert, quoted in an editorial printed on January 11, 2010, told The Denver Post that the lower range of EPA’s proposed standard is “close to background” levels for the Front Range of Colorado.

 

As in any primary national ambient air quality standard proceeding ― where the goal under the Clean Air Act is to protect the public’s health with a margin of safety ― fundamental, difficult and interesting questions must be addressed and answered. Who is EPA trying to protect through its proposed standard? It is focusing upon people with lung disease, especially children with asthma, elderly people, and people who are active outdoors, but it emphasizes protection of children. In her speech when the proposed standard was released, Lisa Jackson, the Administrator of EPA, told her audience of her 13-year old son’s difficulty with asthma on days with high ozone levels. What is EPA protecting these people from? It is protecting against reduced lung function and irritation in their airways, aggravation of asthma and susceptibility to respiratory infection, and aggravation of chronic lung diseases. What does science have to say about the level of air pollution that supplies that protection? Usually even more important, what does the science not have to say ― what are the unknowns and assumptions we must make, given the limits to our knowledge? And ― dare I write it? ― is control possible at the levels suggested by the science available to us? At what cost and with what set of benefits?

 

In any event, I was particularly struck by a comment reported in our local newspaper when the standard was announced. My reaction may be an over-reaction, but what I read seemed eerily familiar to me and a bit worrisome. The Denver Post reprinted remarks by the  Director of EPA’s Air Programs in Region 8. She reportedly said that residents can begin to make a difference to lower ozone levels by riding the bus and bicycling more instead of driving, weed-whacking and lawn mowing after sunset, and maybe ditching leaf-blowers and switching to push mowers. EPA Increases Burden on Denver to Reduce Smog,The Denver Post, January 8, 2010, p. B-1.

 

I was a young engineer working for EPA during its foray into federal indirect source controls in the late 1970’s. The remarks I read in the newspaper brought back memories of those days. I hope the group of people currently in charge at EPA remember, too.

 

An indirect source, as defined in Section 110 (a)(5)(C) of the Clean Air Act, is “a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution.” More plainly, in the early 1970s federal indirect source controls were designed to force people not to drive their cars to particular areas, if air quality might be imperiled, by forbidding or regulating the businesses that drew those people. In early 1973, responding to a court order, EPA proposed approaches like limiting the number of parking spots at airports, malls, sports venues and amusement parks, forcing parking garages to be smaller, and limiting or rejecting the development of real estate projects that would draw people in their cars. 38 Fed. Reg. 9599 (April 18, 1973). Later that year, the EPA instructed the states to consider these strategies in preconstruction indirect source review. 38 Fed. Reg. 15834 (June 18, 1973) (promulgation of state implementation plan requirements for “mobile source activity associated with . . . buildings, facilities, and installations.”). 

Even a very young engineer could tell that EPA’s approach was a disaster. Ordinary people (as distinct from the business people operating electric generating stations, paint booths, or oil and gas pipelines) were extremely unhappy when the federal government wanted to make their ordinary activities ― driving their cars to a shopping center or to watch a sporting event ― difficult or forbidden. And, of course, the states resented federal intrusion into traditional areas of state and local land use controls. It is also quite easy today to imagine how unhappy the powerful real estate developers were, too.

The reaction was predictable (at least in hindsight) and rapid. Congress forbade EPA from pursuing indirect source regulation in the interest of meeting air quality standards. In a 1974 supplemental appropriations act, Pub. L. No. 93-245, 87 Stat. 1071 (1974), Congress denied EPA budget funds and administrative authority “to administer any program to tax, limit, or otherwise regulate parking facilities.”  Permanent changes to the Clean Air Act came with the 1977 Amendments to the Clean Air Act, when restrictive language was added that is still codified in Section 110(a)(5) of the Clean Air Act. You can read more in a federal Court of Appeals opinion about the controversy and its aftermath, Manchester Environmental Coalition v. EPA, 612 F.2d 56 (2nd Cir. 1979) (successful challenge to EPA’s approval of Connecticut’s revocation of its implementation plan’s indirect source review program). You can get the flavor of this controversy by reading the discussion in the House Report that accompanied H.R. 6161, the House bill underlying the Clean Air Act Amendments of 1977. H.R. Rep. No. 294, 95th Cong., 1st Sess., 220-221 (May 12, 1977).

Today some states and political subdivisions choose to use indirect controls on air pollution in their programs. The San Joaquin Valley Air Pollution Control District in California and the State of Wisconsin have programs that are easily found on the Internet, for example.

But EPA is still forbidden to impose indirect source controls upon the states. And the remarks of the regional air quality official about the ozone proposal strike me as suggesting federal regulation that will be perceived in a quite similar and unhappy way by ordinary citizens. Is EPA going to force people to use push lawnmowers? To throw away their leaf blowers and weed whackers?

  

Will we follow this path again? I hope not. Controlling the precursors to the formation of ground level ozone at the levels now proposed by EPA is going to be terribly difficult and expensive, at best. But those controls must first have the support of citizens and their elected representatives if they are to have any chance to succeed. Whatever ambient air quality levels are eventually chosen by EPA in the ozone rulemaking, the control strategies eventually imposed by our federal government should not make people so angry that they forget why they are being protected.

When Do EPA BACT Requirements "Redesign the Source"? Not When EPA Says They Don't

Posted on January 7, 2010 by Seth Jaffe

Shortly before the holidays, EPA Administrator Jackson issued an Order in response to a challenge to a combined Title V / PSD permit issued by the Kentucky Division for Air Quality to an Integrated Gasification Combined Cycle, or IGCC, plant. The Order upheld the challenge, in part, on the ground that neither the permittee nor KDAQ had adequately justified why the BACT analysis for the facility did not include consideration of full-time use of natural gas notwithstanding that the plant is an IGCC facility. 

The Order may not be shocking in today’s environment – all meanings of that word intended – but the lengths to which the Order goes to avoid its own logical consequences shows just what a departure this decision is from established practice concerning BACT. BACT analyses have traditionally involved the proverbial “top-down” look at technologies that can be used to control emissions from a proposed facility. In other words, EPA takes the proposal as a given, and then asks what the best available control technology is for that facility

In EPA’s own words – from its New Source Review Workshop Manual (long the Bible for BACT analysis):

Historically, EPA has not considered the BACT requirement as a means to redefine the design of the source when considering available control alternatives. For example, applicants proposing to construct a coal-fired electric generator, have not been required by EPA as part of a BACT analysis to consider building a natural gas-fired electric turbine although the turbine may be inherently less polluting per unit product (in this case electricity).

Apt example, don’t you think? (In case you are wondering, EPA’s decision does not discuss or refer to this text from the NSR Manual.)

What was the basis for EPA’s decision here? Largely, it is that the IGCC facility will be designed to burn natural gas as well as syngas and the permittee specifically stated that it planned to combust natural gas during a 6-12 month startup period. On these facts, EPA concluded that the permittee and KDAQ had to do a better job explaining why full-time use of natural gas should be considered “to redefine the design of the source.”

As noted above, EPA went to great lengths to minimize the scope of the decision. It states that the Order:

should in no way be interpreted as EPA expressing a policy preference for construction of natural-gas fired facilities over IGCC facilities.

should not be interpreted to establish or imply an EPA position that PSD permitting authorities should conclude … that BACT for a proposed electricity generating unit is … natural gas.

does not conclude that it is not possible or permissible for the permit applicant … to develop a rationale which shows that firing exclusively with natural gas would “redefine the source.”

EPA does not intend to discourage applicants that propose to construct an IGCC facility from seeking to hedge the risk of investing in … IGCC technology by proposing … utilizing natural gas for some period….

Methinks EPA doth protest too much. If I may say so, this is a freakin’ IGCC facility. Isn’t it obvious that one doesn’t plan or build an IGCC facility if one plans to burn natural gas? Don’t you think that EPA could have taken administrative notice of what IGCC technology is?

All of EPA’s protestations about the Order’s limits may be designed to mollify IGCC supporters, but what does its rationale mean for all of the existing facilities – coal and oil – that are already capable of firing on natural gas? Next time they are subject to NSR/PSD review, must they evaluate the possibility of switching completely to natural gas? As I’ve said here before, yikes!

When Do EPA BACT Requirements "Redesign the Source"? Not When EPA Says They Don't

Posted on January 7, 2010 by Seth Jaffe

Shortly before the holidays, EPA Administrator Jackson issued an Order in response to a challenge to a combined Title V / PSD permit issued by the Kentucky Division for Air Quality to an Integrated Gasification Combined Cycle, or IGCC, plant. The Order upheld the challenge, in part, on the ground that neither the permittee nor KDAQ had adequately justified why the BACT analysis for the facility did not include consideration of full-time use of natural gas notwithstanding that the plant is an IGCC facility. 

The Order may not be shocking in today’s environment – all meanings of that word intended – but the lengths to which the Order goes to avoid its own logical consequences shows just what a departure this decision is from established practice concerning BACT. BACT analyses have traditionally involved the proverbial “top-down” look at technologies that can be used to control emissions from a proposed facility. In other words, EPA takes the proposal as a given, and then asks what the best available control technology is for that facility

In EPA’s own words – from its New Source Review Workshop Manual (long the Bible for BACT analysis):

Historically, EPA has not considered the BACT requirement as a means to redefine the design of the source when considering available control alternatives. For example, applicants proposing to construct a coal-fired electric generator, have not been required by EPA as part of a BACT analysis to consider building a natural gas-fired electric turbine although the turbine may be inherently less polluting per unit product (in this case electricity).

Apt example, don’t you think? (In case you are wondering, EPA’s decision does not discuss or refer to this text from the NSR Manual.)

What was the basis for EPA’s decision here? Largely, it is that the IGCC facility will be designed to burn natural gas as well as syngas and the permittee specifically stated that it planned to combust natural gas during a 6-12 month startup period. On these facts, EPA concluded that the permittee and KDAQ had to do a better job explaining why full-time use of natural gas should be considered “to redefine the design of the source.”

As noted above, EPA went to great lengths to minimize the scope of the decision. It states that the Order:

should in no way be interpreted as EPA expressing a policy preference for construction of natural-gas fired facilities over IGCC facilities.

should not be interpreted to establish or imply an EPA position that PSD permitting authorities should conclude … that BACT for a proposed electricity generating unit is … natural gas.

does not conclude that it is not possible or permissible for the permit applicant … to develop a rationale which shows that firing exclusively with natural gas would “redefine the source.”

EPA does not intend to discourage applicants that propose to construct an IGCC facility from seeking to hedge the risk of investing in … IGCC technology by proposing … utilizing natural gas for some period….

Methinks EPA doth protest too much. If I may say so, this is a freakin’ IGCC facility. Isn’t it obvious that one doesn’t plan or build an IGCC facility if one plans to burn natural gas? Don’t you think that EPA could have taken administrative notice of what IGCC technology is?

All of EPA’s protestations about the Order’s limits may be designed to mollify IGCC supporters, but what does its rationale mean for all of the existing facilities – coal and oil – that are already capable of firing on natural gas? Next time they are subject to NSR/PSD review, must they evaluate the possibility of switching completely to natural gas? As I’ve said here before, yikes!

Ninth Circuit Rejects CERCLA UAO Due Process Challenge

Posted on January 6, 2010 by Theodore Garrett

The 9th Circuit affirmed the dismissal, for lack of jurisdiction, over a “pattern and practice” claim by a company that complied with an Environmental Protection Agency (EPA) unilateral administrative order (UAO) to conduct a remedial investigation. City of Rialto v. W. Coast Loading Corp., 581 F.3d 865 (9th Cir. 2009).  While acknowledging that CERCLA's judicial review provisions contain "some pitfalls and difficult decisions for a PRP that faces a UAO," the court stated that the pattern and practice claim was not an “automatic shortcut” to federal court jurisdiction. 

 

The case arose as a result of a unilateral administrative order (UAO) issued by EPA in July 2003 directing Goodrich to conduct a remedial investigation at a 160-acre site in Rialto, California. Goodrich elected to comply with the order. However, in late 2006 Goodrich filed a complaint against EPA alleging, inter alia, that the CERCLA review provisions on their face constitute a coercive regime violating due process. The district court held that it lacked jurisdiction over Goodrich’s “as-applied” challenge to the UAO because such pre-enforcement judicial review is foreclosed by §9613(h) of CERCLA. Goodrich then filed an amended “pattern and practice” claim alleging that EPA issues orders where no emergency exists, obstructs judicial review by delaying its discretionary certificates of completion, and controls and manipulates the record of decision. The district court granted EPA’s motion to dismiss, and Goodrich appealed to the Ninth Circuit.

 

The Ninth Circuit affirmed. The court of appeals concluded that Goodrich’s allegation that EPA routinely issues orders beyond its statutory authority was substantive because it necessarily depended on the facts of the particular UAO, and that meaningful judicial review of Goodrich’s substantive challenge is available under §9613(h). A claim that a UAO is unlawful can be addressed, the court stated, either by not complying with the UAO and defending an enforcement action, or by complying with a UAO and seeking reimbursement from the government. With respect to Goodrich’s claim that EPA routinely delays certifications of completion in order to thwart judicial review, the Ninth Circuit held that Goodrich’s claim is not ripe because the work required by the UAO has not been completed. Once Goodrich completes the work, it may bring a claim for reimbursement under §9606(b)(2). Finally, with respect to Goodrich’s allegation that EPA controls and manipulates the administrative record supporting the selected cleanup plan, the Ninth Circuit concluded that Goodrich allegations were not a “pattern and practice” claim , but rather were a challenge to the judicial review provisions of the statute itself, which were rejected by the District Court and not appealed by Goodrich. 

 

The Ninth Circuit noted that in General Electric v. Whitman, 360 F.3d 188, 191 (D.C. Cir. 2004), the D.C. Circuit remanded GE’s suit to the district court to address the merits of GE’s facial due process claim, and on remand the district court ruled on merits and rejected GE’s pattern and practice claim. General Electric v. Jackson, 595 F.Supp.2d 8 (D.D.C. 2009). This ruling on the merits contrasts with the Ninth Circuit’s ruling that the district court lacked jurisdiction. The Ninth Circuit, however, commented that its decision was “consistent” with the District Court’s decision in GE, noting that the District Court there held that it had jurisdiction not because of any independent analysis but because of its interpretation of the D.C. Circuit’s decision remanding the case for further proceedings. 

Companies receiving a UAO and facing the statutory pitfalls and difficult decisions will likely not find much solace in the Ninth Circuit’s opinion. The district court’s opinion in the GE case is being appealed.