Should Someone be Reading The SEP Policy its Last Rights?

Posted on December 5, 2019 by Heidi Friedman

Chances are if you have been on either side of a settlement for an environmental violation over the past 20 years, you have discussed and/or negotiated a supplemental environmental project (SEP) as part of the overall resolution of a matter.  SEPs are projects that go beyond what is required by law, although the projects do have to have a “nexus” to the violation being addressed.  Settling parties can receive a credit toward mitigation of the civil penalty for a portion of the value of funds spent on implementing SEPs, and SEPs are the favorite child of many since a quality SEP can close the gap on a contentious penalty negotiation – visualize a bridge that pops up bringing two sides together.  Instead of building these bridges, the Asst. Attorney General’s August 21, 2019 Memorandum analogizes SEPs to elephants explaining that “Congress does not ‘hide elephants in mouseholes’ (citing Gonzales v. Oregon, 546 U.S. 243, 267 (2006)) and if Congress had intended the use of such a “controversial miscellaneous-receipt-circumvention device[], it would not have done so without mentioning SEPs by name.”  And while the elephant/mousehole analysis relates specifically to an interpretation of the 2018 Clean Water Act Amendments, it still seems challenging to think of such a long-accepted settlement tool as now being the elephant in the room. 

The August 2019 memorandum all but eliminates SEPs for civil consent decrees and settlement agreements with state and local governments, which at first read may be seem a narrow focus.  Yet, the grounds set forth in that memo and related analysis provide a clear path for this Administration to fully exterminate this elephant or at least put it to rest for now.  One recent example is in July 2017, when DOJ modified a finalized settlement with Harley Davidson in a Clean Air Act case by removing the SEP.  This left the American Lung Association without its project to retrofit or change out wood-burning fireplaces and left Harley Davidson paying a larger penalty.  From the defense side of things, many companies favor SEPs since a SEP can allow the company to support an innovative project that can truly benefit a community’s local environment.  And to be transparent, there can also be potential tax advantages while penalties are not tax deductible. Keep in mind that the SEP does not replace the payment of a penalty, it supplements and somewhat mitigates the potential penalty payment that might have been sought and obtained.

Yet, what we are seeing is a clear signal that money is the only path to resolution.  The crux of Clark’s analysis and any debate over SEPs is that SEPs are seen as “…mechanisms for sidestepping the power of the purse.”  (citing to H.R. Rep. 115-72, at 5-6) or said in another way, “…implicating Congress’ constitutional power over appropriations.”  The Clark view is that Congress should be able to spend its penalty funds as it pleases whether its defense spending or the opioid crisis, without any nexus to the alleged violation, and thus, allowing a SEP to direct funds in a manner that serves narrower statutory purposes interferes with this autonomy.  Don’t get me wrong, we need government intervention in the opioid crisis, but do we further the purpose of our environmental laws when we are just collecting as much penalty money as possible?  Using environmental penalty policies to fund another defense tank for example seems counter intuitive to the intent of the Clean Water Act or the Clean Air Act in the first place.  While I am certainly not a constitutional scholar, I do know that we have the judiciary reviewing and approving SEPs as part of the Consent Decree process providing a further check on the scope and direction of this often favored alternative. 

For you elephant lovers out there, EPA does seem to be keeping the policy alive and well at the moment as the memo is not even posted to the SEP page on its website.  According to the EPA 2018 enforcement statistics, the value of SEPs in settlements jumped from 17.75M in 2017 to 28.93M in 2018.   Further, in FY2018, EPA enforcement cases included 100 SEPS.   Looking at the last 10 years (2008 to 2018), the total value of 1,418 SEPS was $577M. This is not peanuts no matter how you look at it, but here’s hoping we are able to keep the elephant alive and well.

ORSANCO ADDS FLEXIBILITY TO OHIO RIVER WATER QUALITY PROGRAM

Posted on November 26, 2019 by David Flannery

In an earlier blog, I raised the question of “When Should A Regulatory Program Be Eliminated”. After a four-year effort, three public comment periods, four hearings and six webinars, the Ohio River Valley Water Sanitation Commission (ORSANCO – the interstate compact that regulates the water quality of the Ohio River) acted in June 2019 to answer this question. ORSANCO did so by revising its Pollution Control Standards to make it clear that while its Ohio River numerical water quality criteria would remain in place, the designated use for the Ohio River established by the ORSANCO Compact would be the primary mechanism by which ORSANCO would protect the quality of the Ohio River. 

In explaining the significance of its decision to leave its numerical water quality criteria on-the-books, ORSANCO offered the following sentence making it clear that its standards were to be considered by member states but were not mandatory:

The standards were adopted by the Commission for use or consideration by signatory States as they develop and implement their programs to assure that those designated uses and other goals regarding pollution control and prevention set forth in the Compact will be achieved. Emphasis added.

At its meeting in October 2019, ORSANCO adopted the process by which it would assess the consistency of the state-issued NPDES permits with its revised Pollution Control Standards.  Under that review process, ORSANCO’s staff will review the conditions on permits issued by member states and will compare those permit conditions to what they would have been had the ORSANCO numerical water quality criteria been applied.  If the state-issued permit contains any less stringent conditions, the state will be given the opportunity to explain how the terms of its permit would protect the designated uses of the Ohio River established by its Compact.

In short, while the ORSANCO numerical water quality criteria will continue to be available for “consideration” by States, the only mandatory duty imposed on the member states is the issuance of permits that are protective of the designated uses that the ORSANCO Compact has assigned to the Ohio River. 

Enforcement vs. Education: What the Evolving Role of Forest Rangers and the Government Shutdown Might Teach Us About Environmental Management

Posted on February 12, 2019 by Edward A. Hogan

Two recent, and apparently unrelated, newspaper articles should cause us to focus upon the appropriate balance between law enforcement and education in environmental management.

The first article described a number of deliberate acts of vandalism in National Parks during the recent federal government shutdown.   In the absence of park staff, illegal off-road driving was reported in several National Parks.  In Joshua Tree National Park, delicate and ancient Joshua trees were kicked and Christmas lights strung on others.

The second article reported on a recent proposal to reclassify state civil service job titles.  While on its face it appeared routine, it has resurrected some persistent concerns with the public perception of environmental and natural resource protection. The New York State Department of Environmental Conservation (“NYSDEC”) has requested the New York State Department of Civil Services reclassify its 134 Forest Rangers into the Environmental Conservation Police Officer(“ECO”) title.  Both Forest Rangers and ECOs work within the NYSDEC Office of Public Protection:  the Forest Rangers in the Division of Forest Protection and the 330 ECOs in the Division of Law Enforcement.  Both Divisions were established in the late 19th century:  forest rangers were originally known as fire wardens and ECOs as fish and game protectors. 

While still having the traditional responsibility for prevention and suppression of wildland fires, Forest Rangers are now also charged with organizing and conducting wildland search and rescue operations.  ECOs have had their role of enforcing fish and wildlife laws expanded to include air, land and water quality violations.   Both Forest Rangers and ECOS must complete the same 26-week basic training and are sworn police officers, authorized to enforce all state laws.

While the civil service reclassification has been described as a title upgrade for the Forest Rangers, which would result in a small increase in initial salary, NYSDEC emphasized that it is not a merger of the two Divisions but, rather, a move to ensure that the Divisions are treated equally in the civil service system.  While generally supported by the environmental community, there are those who express lingering concerns with the gradual degradation of public’s attitude towards Forest Rangers and the potential impact on their effectiveness in educating the back country recreational (hiking, whitewater rafting, rock and ice climbing, etc.) community.  As retired Forest Ranger Pete Fish lamented, before becoming sworn police officers and thus always armed, their image was not so closely associated with being police officers: “We used to drive around in these red trucks.  We had a good reputation.  People would wave at us.  Everyone loved a ranger. Once we started driving around in the green trucks like the cops, there was a difference in attitude toward us from the public”.  

As attorneys dealing with the full range of environmental laws, we focus on significant policy issues.  But the most frequent encounter most citizens have with the application of environmental and natural resource laws is at the state level, with front-line staff, and in the recreational context.  Thus, the public’s perception of, and support for, environmental laws is greatly influenced by their experience in the context of recreation use of natural places, and thus their perceptions should be as important to us as they are to retired Ranger Pete Fish.

Each state (and the federal government) has a broad range of natural resource and environmental issues it addresses:  fish and game enforcement, forest fire prevention and suppression, wildland search and rescue, back country recreationalist education, and environmental quality enforcement.   How they organized and staffed these tasks has, and will be, influenced by the evolution of those programs, their historical experience and present and future needs.   

So, what is the right balance of education and enforcement in wildland recreation?  Police officers or ranger-educators?  Or both?

Are the recent incidents in the National Parks evidence that as a society we have failed in our education role and that management of wildlands are better addressed by an enforcement-based approach?

In contrast to the several vandalism incidents that have occurred, there have also been hundreds of volunteers keeping the National Parks open during the government shutdown.  These volunteers were spending their time and their own money hauling out trash and keeping toilets cleaned and stocked with supplies.  Perhaps education has been successful after all.

Comprehensive Study of Impacts of Shale Development Released

Posted on June 28, 2017 by Kinnan Golemon

A report, Environmental and Community Impacts of Shale Development in Texas was released by The Academy of Medicine, Engineering and Science of Texas (TAMEST) to the public on June 19, 2017 (1). TAMEST is a nonprofit and brain trust for Texas composed of Texas-based members of the National Academics of Sciences, Engineering and Medicines and the state’s Nobel Laureates.  This entity was the original idea of my law school classmate and friend, Honorable Senator Kay Bailey Hutchinson, in 2004. The recently released report is the product of the TAMEST Board decision in 2015 to organize a task force charged with writing a report to “collect the best science available and summarize what we do and do not know” about environmental and community impacts that are posed by new technologies for the extraction of hydrocarbons from shale and other tight rock formations.

Texas, although oil had already been produced at various locations within its boundaries, became a dominant entity in oil and gas production on January 10, 1901, when the Lucas Gusher at the Spindletop salt dome in Jefferson County, roared to the surface: soon producing 100,000 barrels of oil per day, more than all U.S. wells combined (2). Oil and Gas production for the next 100 years was driven by “conventional” vertical well technology seeking resources from porous formations. However, commencing in the late 1980s and through the 1990s, a company founded by an affable, brilliant, tenacious and innovative son of immigrant Greek parents, George Mitchell, undertook an extended effort to access organic resources trapped in shale and very tight rock formations. After many years of limited or no success, Mitchell Energy, by century end, had demonstrated that certain hydraulic fracturing strategies [i.e. well completion techniques similar to those used since the late 1940s] (3) could be deployed in organic rich formations to produce natural gas economically.

Mitchell Energy’s acquisition by Devon Energy in 2002 resulted in another known technology, horizontal well drilling, being deployed along with hydraulic fracturing to produce the basic technological template that is utilized for shale development of oil and gas throughout the U.S., and currently being deployed elsewhere in the world today (4). The production from shale has also resulted in the largest transformation of the U.S. petrochemical industry in a generation, with $185 billion in new U.S. petrochemical projects either under construction or in planning (5).

Those interested in current and future energy policy, as well as the economic, social and environmental impacts associated with modern-day fossil fuel extraction and production, will find this authoritative, comprehensive and well-written report, see http://www.tamest.org, to be far more enlightening than one gains from other current information sources.

Interestingly, a portion of the funding for the report was provided by the Cynthia and George Mitchell Foundation, a mission-driven grantmaking foundation that seeks innovative sustainable solutions for human and environmental problems that was established prior to his death (6).

 

  1. The Academy of Medicine, Engineering and Science of Texas, 2017, Environmental and Community Impacts of Shale Development in Texas. Austin, TX: The Academy of Medicine, Engineering and Science of Texas. Doi: 10.25238/TAMEST stf.6.2017
  2. www.history.com/topics/spindletop
  3. Society of Professional Engineers (SPE) CD ROM https://www.store.com/spe.org/Legend of-Hydraulic Fracturing-P.433.aspx
  4. https://assets.kpmg.com/content/dam/kpmg/pdf/2014/03/shale-development-global-update-v2.pdf
  5. Christopher M. Mathews. “Shale Boom’s Impact in One Word: Plastics”. Wall Street Journal, June 26, 2017, A1.
  6. http://cgmf.org/p/founders.html