Refining the Relationship Not Retrenchment – Cooperative Federalism 2.0

Posted on August 23, 2017 by Robert J. Martineau Jr.

The cooperative federalism approach to environmental protection in this country has been a fundamental tenet of our federal environmental laws since the early 1970’s.   In short, Congress passed laws, EPA wrote the regulations, and States sought delegation of those programs and implemented and enforced them.  When those state programs were in their infancy EPA tended to have a strong oversight role and states often looked to EPA for technical support and guidance.    EPA often limited the discretion of states in implementing those federal programs.    As states programs matured, states developed their own expertise and often identified new and innovative ways to implement federal requirements and achieve desired outcomes.   States are now authorized to implement over 90 percent of the federal programs and also take lead on most enforcement matters.    Over time the federal state relations has slowly morphed from a parent –child relationship to one of an old married couple.  A decade or so ago, EPA officials might have bristled at the notion of a coequal partnership, but no longer.

States are looking to continue to refine that relationship to help improve environmental outcomes in an efficient and cost effective way to help ensure we put limited resources to work in the most productive way.     In June, the Environmental Council of the States (ECOS) issued a white paper entitled “Cooperative Federalism 2.0: Achieving and Maintaining a Clean Environment and Protecting Public Health”.  Its purpose was to highlight an ongoing discussion of the relationship of federal/state environmental regulators.  The paper is intended “to stimulate and advance” an important discussion of how “a recalibration of state and federal roles can lead to more effective environmental management at lower cost.”

This document has certainly fulfilled its intended purpose.  Since the issuance of the paper, there has been extensive discussion by and between state and federal regulators, NGOs, industry groups, legislators and others on this topic.  ECOS’ paper has served as the framework and focal point for that discussion.

ECOS’ paper sets forth nine principles on the roles and functions of EPA and the States under Cooperative Federalism in this modern era of the environmental protection enterprise.  The paper sets out ECOS’ members’ views on what cooperative federalism should mean in the areas of: 

1.      Regulation development and setting national minimum standards to protect human health and the environment;

2.      Implementing  national regulatory programs;

3.      Allowing flexibility in meeting those standards;

4.      Engagement of other stakeholders in those implementation efforts;

5.      Enforcement;

6.      Oversight by EPA of states implementation efforts;

7.      Interstate and regional environmental  issues;

8.      Scientific research and data gathering; and

9.      Funding for federal and state programs.

The paper recognizes the many challenges of refining this relationship but the interest in and around this topic has fostered much thoughtful discussion and debate.  ECOS’ recent STEP Conference in Washington, D.C. was devoted to this topic and more than 150 state and EPA regulators as well as NGOs, industry groups and academics shared their thoughts and ideas.  The Environmental Law Institute also addressed this topic in an inaugural “Macbeth Dialogues” (named after the late Angus Macbeth, a longtime ACOEL member) in a “Chatham House” format.  Discussion leaders included those from state agencies, former EPA staff, NGOs and academics.    In addition, EPA senior staff and states agency officials have addressed how to refine the relationship in meetings at EPA Headquarters and several regional offices.

Some have explicitly suggested or inferred that this “Cooperative Federalism 2.0” discussion is a ruse for less environmental protection, or relaxing of standards.  Certainly for ECOS’ members, that is not the case.  Cooperative federalism does not equal deregulation or weakening environmental protection.     While there may be separate conversations ongoing about the veracity of the effectiveness of certain rules,  that is not what Cooperative Federalism 2.0 is about.  It is about defining the respective roles and accomplishing the mission of protection of public health and the environment in a cost effective way that respects the different roles of the federal and state partners.  As the ECOS’ paper notes in its conclusion, the ECOS member States “strongly believe that positive reforms and improvements to the bedrock of cooperative federalism are needed … to create and implement environmental protection programs worthy of 21st century challenges.  States are eager to engage our federal partners, and others who have a keen interest in how the states and federal governments perform their roles, on how we can move forward consistent with these principles, in order to protect the environment and public health”.  

Would You Like Some Unintended Consequences With That Tea?

Posted on February 6, 2013 by Linda Benfield

Wisconsin has a proud tradition of strong political opinions.  Recent Tea-Party backed legislation in Wisconsin limiting the power of government will be interesting to follow as the consequences play out, particularly in the environmental arena. 

In March 2011, Wisconsin’s then-new Republican Governor Scott Walker and the Republican legislature passed the Wisconsin Budget Repair Bill, the state law that famously limits the collective-bargaining rights of public employees. Following that, the legislature passed 2011 Wisconsin Act 21, which includes a “limited government” provision that prohibits any “agency [from] implement[ing] or enforc[ing] any standard, requirement, or threshold, including as a term or condition of any license issued by the agency, unless that standard, requirement, or threshold is explicitly required or explicitly permitted by statute or by a rule that has been promulgated in accordance with [state law].” 

This will play out in a number of ways.  Like other state environmental agencies, the Wisconsin Department of Natural Resources (“WDNR”) relies significantly on guidance documents to implement otherwise complex programs. A number of issues are addressed only in WDNR guidance, not in explicit regulations.  These include sediment cleanup standards; references to “sediment” were intentionally removed from the state soil cleanup standards.  This not only affects state cleanup programs, but also raises issues as to whether the state sediment cleanup standards can be “applicable or relevant and appropriate requirements” under the Comprehensive Environmental Response, Compensation and Liability Act.  Similarly, the WDNR’s vapor intrusion sampling, analysis and remediation protocols are contained only in state and federal guidance documents. 

Recently, the U.S. EPA chose language in a proposed SIP denial that adds fuel to some permitting arguments.  In 2008, U.S. EPA required revisions to State Implementation Plans (“SIPs”) with respect to PM2.5 permitting; Wisconsin made regulatory changes, and requested SIP approval in 2011.  On December 18, 2012, the U.S. EPA proposed disapproval of the SIP revision.  77 Fed. Reg. 74817 (2012).  According to U.S. EPA, Wisconsin’s submission is deficient because the Wisconsin regulations do not “explicitly” define the condensable component of PM10 and PM2.5 emissions, and do not “explicitly” identify SO2 and NOx as precursors to PM2.5.  The U.S. EPA’s disapproval language gives the Wisconsin Department of Natural Resources the usual additional work to propose and finalize regulatory changes to address the deficiency, but it also gives regulated sources an additional argument that the WDNR lacks the authority to regulate condensable particulate matter and PM2.5  precursors.

Do states have an independent, fiduciary obligation under the “Public Trust Doctrine” to protect air quality and to do so by regulating greenhouse gases (GHGs)?

Posted on July 30, 2012 by Jeff Civins

Based on a doctrine going back to Roman times – the “Public Trust Doctrine,” a consortium of national and state environmental organizations have brought a series of lawsuits, naming minors as plaintiffs, seeking declarations that federal and state governments have an independent, fiduciary responsibility to protect the quality of air as a public natural resource and to do so by regulating GHGs.  Though generally unsuccessful, they have obtained two recent rulings that have lent some credence to their efforts.  These rulings raise fundamental questions regarding the bases for government regulation to protect the environment.

On July 9, 2012, a Travis County district court judge, in response to the plea to the jurisdiction of the Defendant Texas Commission on Environmental Quality (TCEQ), found that the agency’s “conclusion that the public trust doctrine is exclusively limited to the conservation of water is legally invalid.”  Bonser-Lain v. Texas Commission on Environmental Quality, Case No. D-1-GN-11-002194 (201st Dist. Ct., Travis County, Tex.).  According to the court, the doctrine includes all the natural resources of the state.  The court, however, also found that the agency’s refusal to exercise its authority, based on current litigation by TCEQ against EPA regarding the ability of EPA to regulate GHGs, was a reasonable exercise of discretion.  The plaintiffs had filed a petition for rulemaking with the agency, which the agency had denied, that would have required, among other things, that GHG emissions from fossil fuels be frozen at 2012 levels and that a plan be developed to implement the corresponding reductions.

On June 29, 2012, a New Mexico district court judge, without much explanation, denied in part that state’s motion to dismiss a similar lawsuit, which sought a declaration that the state had failed to comply with its public trust obligation to protect the atmosphere.  Sanders-Reed v. Martinez, Case No. D-101-CV-2011-01514 (Santa Fe County First Judicial District Court, NM).  The court’s ruling allowed the law suit to go forward.   

This series of suits and the decisions in these two cases raise fundamental questions about the bases for governmental regulation to protect the environment.  First, should the atmosphere be considered a public trust resource?  Although air is included in the definition of a natural resource under Superfund, it is different than other natural resources, e.g., land, fish, wildlife, biota, water, groundwater, and drinking water supplies, in that it is not something that can be captured and conserved or its use managed.  Even assuming air is properly categorized as a public trust resource, should an independent common law duty be imposed on states requiring them to take action to protect it?  As a practical matter, all states do have extensive regulatory schemes to protect air quality.  What additional benefit does the imposition of a common law duty create?  If a duty is to be imposed, should it be translated into specific requirements to compel a specific result, and, if so, based on what guidance.  Are the specifics of air quality protection better left to federal and state legislatures and the agencies that implement their legislation?  Finally, with regard to GHG emissions, in addition to concerns about identifying appropriate requirements, are they better managed on the federal and international level because, unlike traditional air pollutants, their impact is global rather than regional?  These questions all appear to be political ones, better handled in forums other than the courts.

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OREGON’S AMBITIOUS 10-YEAR ENERGY ACTION PLAN

Posted on June 8, 2012 by Rick Glick

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

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

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

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

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

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

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

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

Muddling Through: Clean Water Act Edition

Posted on March 1, 2011 by Seth Jaffe

Previously, I discussed EPA’s efforts to “muddle through” on climate change in the absence of comprehensive legislation. This week, I think it’s the Clean Water Act’s turn. If there were any regulatory situation which required some serious muddling through at the moment, interpretation of the Supreme Court’s Rapanos decision almost is a match for the current climate mess. As most of my readers know, Rapanos was a 4-1-4 decision which left EPA, the Corps, developers and environmentalists fairly equally perplexed

Most stakeholders have assumed that Kennedy’s concurring opinion, requiring a “significant nexus” between wetlands and traditional navigable waters before those wetlands are subject to jurisdiction under the CWA, is the law of the land at this point. That is the approach adopted in the Rapanos Guidance issued by EPA and the Corps in 2007. 

A recent decision by the 4th Circuit Court of Appeals, in Precon Development Corporation v. Army Corps of Engineers, illustrates just how muddled post-Rapanos interpretation has become. The decision in Precon – reversing the District Court – found that the Corps had not built a record sufficient to establish that the wetlands which Precon sought to develop were jurisdictional under the CWA. 

There were two technical issues in Precon. Precon lost what one might have thought would be the more significant issue – the Corps’ finding that, although only 4.8 acres were really at issue in this case, and Precon’s entire development includes 166 acres of wetlands, 448 acres of “similarly situated” wetlands would be examined for a substantial nexus to navigable waters. Precon ultimately won, however, because the Court concluded that the Corps’ record did not contain enough physical evidence to support its determination that a significant nexus exists between the 448 wetland acres and the downstream navigable water. 

The Court’s conclusion raised two issues of broad concern to stakeholders. First, the Court granted little deference to EPA’s conclusion on the significant nexus issue. The Corps argued that its conclusion that there was a significant nexus between the site wetlands and the downstream navigable waters was a factual conclusion. However, the Court concluded that the significant nexus determination was not factual. The Court stated that:

The question is instead whether the Corps’ findings were adequate to support the ultimate conclusion that a significant nexus exists. This legal determination is essentially now a matter of statutory construction, as Justice Kennedy established that a “significant nexus” is a statutory requirement for bringing wetlands adjacent to non-navigable tributaries within the CWA’s definition of “navigable waters.”

Well, this is certainly a nice question of administrative law. The significant nexus issue may now be the ultimate legal question. Nonetheless, I would guess that most wetlands scientists and hydrologists would say that this is largely a factual question. Even if the agency is applying its judgment to answer that question, it’s the type of judgment that requires technical expertise – expertise to which courts have traditionally deferred.

The second of the Court’s important pronouncements was that it would not give the EPA/Corps Rapanos Guidance deference under Chevron. Why not?

Because – although it could – the Corps has not adopted an interpretation of “navigable waters” that incorporates this concept through notice-and-comment rulemaking, but instead has interpreted the term only in a non-binding guidance document.”

Isn’t it timely, then, that EPA and the Corps sent a draft new Rapanos guidance to OMB in December, and GOP leadership in the House is proposing language in a continuing resolution that would preclude EPA from using any funds “to implement, administer, or enforce a change to a rule or guidance document pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act (33 U.S.C. 1251).” Perhaps EPA and the Corps should take half a loaf. Why not agree to shelve the guidance and instead proceed with notice-and-comment rulemaking to clarify Rapanos? At least then the Courts might grant EPA and the Corps more deference in implementation.  It’s already been almost five years since Rapanos was issued. EPA and the Corps can hardly argue that it’s necessary to go the guidance route because they don’t have the time to proceed through the full regulatory process.

Enough muddling through. Take the time to do it right and issue regulations. Then, maybe the muddle will abate. (Can one abate a muddle?)

ALABAMA JOINS OTHER STATES IN ENACTING UNIFORM ENVIRONMENTAL COVENANTS ACT

Posted on July 18, 2008 by Jarred O. Taylor, II

Alabama joined a number of other states dealing with environmental covenants when it enacted the Alabama Uniform Environmental Covenants Act, effective January 1, 2008. Ala. Code§35-19-1 et seq. (“Act”).The Alabama Department of Environmental Management (“ADEM”) has been working on implementing regulations, which are expected to mimic the Act and be released in the next few months. ADEM will also charge a fee for implementation and oversight of the program and covenants.

For those not familiar with the concept, in many situations environmental contamination cannot be completely addressed by total removal (clean closure) of the offending soil or remediation of the groundwater to a level allowed for unrestricted use.  Some amount or concentration of contamination must be left behind. In those situations, EPA and ADEM will require additional measures, such as land use controls or continuing monitoring and maintenance. The idea is that if property has contamination on it unsuitable for a residential housing development or the construction of a school, those interested in buying or developing the property are put on notice of the limit of the property to commercial or industrial use.  These controls and obligations are often embodied in deed restrictions or recorded declarations which could be terminated by various common law mechanisms; therefore, the Uniform Environmental Covenants Act was created to provide a mechanism by which environmental covenants and land use restrictions survive the potential fatal operations of the common law. States were encouraged to adopt the uniform act, and Alabama has now done so.

An “Environmental Covenant” is defined as “[a] servitude arising under an environmental response project that imposes activity and use limitations.” Ala. Code § 35-19-2(5). Such “environmental response projects” can arise under state or federal hazardous waste cleanup laws, such as CERCLA, RCRA, or Alabama’s version of brownfields.

Before the Act was passed, ADEM still required a restrictive covenant or deed of some kind when contaminants were being left behind, but it was never sure what might happen to the restriction upon a subsequent sale of the property because it had no enforcement authority. If the property changed hands several times, there was no manner by which ADEM could require the Seller and the Buyer to maintain that restriction as a part of the sale. With the Act, there is a “holder” of the covenant which can enforce the covenant, and ADEM has enforcement power even if it is not a holder. A holder can be any person, a governmental agency (such as ADEM), an environmental group, or a unit of local government. The interest of a holder is considered to be an interest in real property; however, the Department’s interest in a covenant, unless it becomes a holder, will not be considered to be an interest in real property. There are certain elements that each covenant must meet in order to be effective, and those are clearly set out in the Act. Importantly, each environmental covenant requires at least one holder, and a holder can be the fee simple owner and/or the grantor of the covenant.

If, at the time an environmental covenant is recorded or registered, the Act does not abrogate the common-law doctrine of “first in time, first in right” as it relates to prior and valid property interests. If there are other interests in the subject real property with priority over the covenant, unless the prior interest in the property is made subordinate to the covenant by the owner of such interest, then the prior interest is not affected.

The grantor of an environmental covenant has a statutory responsibility to notify certain persons or entities of the covenant. Specifically, the grantor must provide a copy of the covenant to (i) each person signing the covenant; (ii) each person with a “recorded interest” in the subject property; (iii) each tenant or person in possession of the subject property; and (iv) each county or municipality in which the real property is located (normally the county or municipal office where deeds are recorded, such as the probate office). You also have the option of filing the covenant with ADEM (it keeps a registry), and then filing a notice with the county probate office in lieu of the entire covenant.

Environmental covenants are perpetual although there are exceptions set out in the Act, such as if the covenant itself has a specified length of time, a condition allowing termination is satisfied, or a court is petitioned for its modification. Of course, one always has the option of conducting additional remediation of the property to reach unrestricted use standards, which would then allow for termination of the covenant.

The author wishes to acknowledge the contributions made to this article by Bryan Nichols of Maynard, Cooper & Gale, P.C.

Connecticut Department of Environmental Protection Submits RGGI Regulations for Legislative Approval

Posted on June 9, 2008 by Gregory Sharp

The Connecticut Department of Environmental Protection (“DEP”) has submitted for legislative approval regulations to control carbon dioxide (CO2) emissions and establish a CO2 emissions credit program.[i] The controversial regulations are designed to fulfill Connecticut’s commitment to the Regional Greenhouse Gas Initiative (“RGGI”), which establishes a CO2 emissions cap and trade program for power plants in nine Northeastern and Mid-Atlantic states.[ii] RGGI is designed to be a model for a broader, national market-driven program to establish a market value for greenhouse gas (“GHG”) emissions to provide incentives for reducing GHG emissions over the long term.

Carbon dioxide is the most significant GHG by volume. Unlike many other pollutants emitted by the combustion of fossil fuels, there are no commercially available control technologies to limit CO2 emissions. Therefore, programs to reduce GHG emissions focus on improving energy efficiency, reducing the use of fossil fuels through conservation efforts, and using renewable and alternative fuels.



[i]               Proposed Conn. Agencies Regs. § 22a-174-31 and 31a.

[ii]               Information about RGGI can be found at http://rggi.org.

The regulations impose a tonnage cap on CO2 emissions from large fossil fuel-fired electricity generating units in Connecticut. The initial tonnage cap is 10.7 million tons. The regulations seek to stabilize CO2 emissions from these units in 2009-2014, then reduce those emissions by 2.5% per year in 2015-2018 from the electric utility sector. The regulations allow allocation of emissions offsets to be used for compliance where real reduction of greenhouse gases are achieved outside the regulated utility sector. They require auctioning of CO2 allowances and the use of auction proceeds for consumer benefit or strategic energy purposes as required by Conn. Gen. Stat. § 22a-200c.Finally, the regulations require a demonstration of compliance every three years.

The regulations must be approved by the Legislative Regulations Review Committee of the General Assembly before they can become effective. Significant controversy surrounds several of the key provisions which have been opposed by companies with electric generating facilities in the state.

One concern is that the CO2 allowance costs will push the price of electricity up for consumers, despite industry investments in energy efficiency. Critics of the regulation advocate direct per kilowatt-hour rate relief, which is not provided in the proposed regulations.

A second problem for the electric generating companies is the Department’s refusal to limit auction participation to RGGI regulated sources – the owners and operators of fossil-fueled electric generating facilities. DEP fears that closed auctions might result in lower prices for carbon allowances, due to lessened competition. However, with no cap on auction allowance prices, the regulated entities fear that financial speculators may drive up the price of this new commodity. There is also a significant concern that environmental organizations could purchase these allowances and “retire” them by taking them off the market, driving up the price of the remaining carbon allowances and possibly creating a shortage. Historical data suggests that generators in Connecticut may need 94% of the available allowances in 2009 in order to operate at levels expected to meet demand.

Another significant issue is that the proposed Connecticut regulations provide no cap or ceiling on the auction price for the CO2 allowances. DEP estimates that the allowance price in 2009 will be approximately $2 per ton, increasing to $5 per ton in 2024. The allowance price will have a direct impact on electric rates.

The anticipated rate impact prompted Maine, New Hampshire, and New Jersey to establish cap mechanisms to protect consumers. Maine established a limit of $5 per ton, the highest price estimated by Connecticut DEP, beyond which auction proceeds would be applied to kilowatt-hour rebates to ratepayers. New Hampshire is establishing a $6 per ton rate cap, above which funds would be rebated to consumers, similar to the Maine auction provisions. New Jersey has mandated that if two consecutive regional auctions result in allowance prices above $7 per ton, an action plan must be developed for ratepayer relief.

Finally, the regulations provide that DEP will retain 7.5% of the funds realized from the auctions for administrative costs and programs to mitigate the impacts of climate change, despite the fact that the agency concedes that it only needs a quarter of this retainage to cover the administrative costs of the program.

The proposed regulations were submitted to the Regulations Review Committee on June 6, 2008. The Committee has 65 days to approve, recommend modifications, or reject the proposed regulations. Whether the regulations will be in place before the first RGGI auction scheduled in September remains to be seen. 

Gregory A. Sharp

Murtha Cullina LLP