Posted on April 11, 2017
Bob Sussman is a former high-ranking Obama and Clinton EPA official with a stellar academic and professional background. He recently published in Inside EPA a thought-provoking piece entitled “Trump’s Tortured Maneuvering on Climate Change.”
No matter what your views on climate, Bob’s piece is worth reading. I find much to agree with in Bob’s observations, but would respectfully disagree with one.
Focusing on the president’s March 28 Executive Order (EO), Bob raises the valid question of why Mr. Trump touted it on job-saving, energy independence grounds. Bob makes a strong case (as if he really needed to) that coal mining jobs are dwindling due to market forces and that the U.S. energy outlook is just fine.
Bob posits that Trump’s job-energy independence focus reveals a divide and major discomfort within the Administration on whether and how much to deny that humans are involved with climate change. He notes that the March 28 Order side-steps any position on both the “Endangerment Finding” and the Paris Accords.
So far so good. My respectful disagreement relates to Bob’s argument that the Trump EPA would have a difficult time sustaining major cutbacks to the Obama Clean Power Plan (CPP) on judicial review. He speculates that a new Trump CPP might simply retain “building block 1” (plant efficiency improvements) from the 3-block “beyond-the-fenceline” Obama CPP. He argues that “the courts may well balk at this approach as a contrived effort to duck the challenge of climate change by taking refuge in narrow legal arguments.”
Here is why I disagree:
a. Following the 2007 Supreme Court Massachusetts ruling and EPA’s subsequent Endangerment Finding, EPA is not required by the Clean Air Act (CAA) to issue GHG rules with any particular degree of stringency – EPA must just issue rules.
b. The “beyond-the-fenceline” features of the Obama CPP are based upon truly adventurous interpretations of the words of the CAA. There is certainly nothing in the CAA that requires those interpretations. (Recall the U.S. Supreme Court has taken the unprecedented step of staying the Obama CPP throughout the entire judicial review process.) Even if the D.C. Circuit were to uphold these interpretations, it would only be upholding the Obama EPA’s discretion to adopt them; the Court could not rule that such interpretations were mandated by the CAA.
c. The Supreme Court and D.C. Circuit case law are clear on the following points:
i. A new administration is free to reverse rules issued by a prior administration based entirely upon policy preferences, even where there are no new facts or information, so long as the new administration adequately explains the basis for the reversal;
ii. There is no heightened standard of judicial review when an agency reverses course; and an agency need not convince the court that the reasons for the new policy are better than the reasons for the rejected one.
See my recent ACOEL blog for the citations to the cases.
d. Because the statutory interpretations supporting beyond-the-fenceline requirements are so adventurous (and stayed by the Supreme Court), it should be easy for the Trump EPA to defend a new CPP as a matter of policy based on CAA interpretations that are far less adventurous.
e. If and when the new CPP reaches the Supreme Court, it is difficult to see the Court departing from the precedents of the cases cited in my ACOEL blog, particularly with Justice Gorsuch filling Justice Scalia’s seat.
Posted on March 15, 2017
Then-candidate Donald Trump’s unauthorized use of REM’s 1987 song, “It’s the End of the World as We Know It (And I Feel Fine)”, during a 2015 campaign rally sparked a sharp objection by the band’s Michael Stipe. Flash forward to 2017 and now-President Trump has been flexing his executive powers in a number of legal fields; for many environmental, energy or immigration lawyers it’s the end of the regulatory world as we knew it for decades, and they are not feeling so fine.
Executive Orders (EOs) raise classic constitutional law issues of the separation of powers, in that they often are used for “executive legislating” even though there is no explicit constitutional authority for them. EOs also blur traditional regulating lines, because they are not issued with public notice or comment, and usually state that they do not “create any right or benefit enforceable at law or in equity by any party against the United States.”
An EO can have the force of law, however, if the EO is based on either the Constitution or a statute, per the Supreme Court’s 1954 Youngstown decision. That is why one must carefully read each EO to determine the grounds of its authority, and then whether it is possibly contrary to a) existing laws or b) constitutional provisions such as due process or equal protection.
Facing an uncooperative Congress, POTUS Obama came to rely on EOs in his last two years in office (see this prophetic 2015 School House Rock episode). POTUS Trump took to EOs right out of the gate. The two Trump EOs that have garnered the most publicity and outcry deal with immigration restrictions The first EO was challenged in numerous courts, and the 9th Circuit issued on February 9 the first appellate decision on a Trump EO. Interestingly, and instructive for future litigants and legal counsel, the first issue addressed by the 9th Circuit, and the one they discussed the most, was . . . standing. The court then moved on to reviewability, and only briefly due process and equal protection. The complaint’s count on violating the Administrative Procedure Act for not following proper rulemaking proceedings was not even discussed in the ruling.
Trump issued two EOs of more relevance to environmental and energy lawyers. First was the January 30, 2017 EO entitled “Reducing Regulation and Controlling Regulatory Costs”, aka the add-one-subtract-two, no-increase-in-incremental-costs [undefined]- of-regulations EO. That was followed by the February 2, 2017 Interim Guidance of the OMB implementing (and implicitly amending) the EO by limiting it to “significant regulatory actions”—i.e. those of $100 million or more of annual effect on the economy. A week later the EO and IG were both challenged in federal court in D.C. as violating the APA, separation of powers, the Constitution’s “Take Care Clause”, and as being ultra vires. Plaintiffs referenced in part OSHA, TSCA, the ESA and CAA, and other energy/environmental laws as being inconsistent with the EO’s requirement that a new rule can only be promulgated if its cost is offset by the elimination of two existing rules. The EO ironically signals the possible demise of cost-benefit analysis —first mandated by then POTUS Ronald Reagan by an EO in 1981—by disallowing consideration of the economic benefits of a regulation when weighing its costs.
Many more EOs are promised in the coming weeks concerning a variety of environmental and energy laws and regulations. Early in the wave was the February 28, 2017 EO with the majestic name of “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ [aka WOTUS] Rule”. This EO directs the EPA to review the WOTUS Rule while keeping in mind the national interest of “promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.” Since WOTUS was a final rule published in the Federal Register, it can only be repealed and replaced by a new rule that goes through full notice-and-comment rulemaking, not simply by a non-legislative guidance or policy statement.
One who lives by the EO sword can slowly die from it too. POTUS Obama did not submit for approval to Congress the Paris Climate Change Agreement of 2016, calling it an “executive agreement”, thus POTUS Trump does not need Congressional approval to undo it. The Agreement terms do not allow withdrawal by a party before November 2019. However, the U.S. could withdraw from the overarching United Nations Framework on Climate Change with one year notice, if the Senate approves, and that in effect would undo our Paris “commitments”. And as a practical matter, the current Administration could also just choose not to implement the Paris obligations, because there is no binding duty to hit the emission reduction targets.
In sum, we live in interesting times. Although Jack Black has said of this Administration that “It’s the end of the world”, for College members and their clients it’s the start of some fascinating new adventures in regulation and litigation. Stay tuned.
Posted on March 6, 2017
We environmental lawyers are well-acquainted with the technology-forcing requirements of many statutes. I, however, do not love technology and I hate being forced.
The idea behind “technology forcing” statutory provisions is that if Congress adopts requirements beyond the demonstrated capability of currently available technology, that will cause smart people to develop new technology that will meet the new requirements. Simple. Better technology is just waiting to be developed. The cost or other impacts of new technology are seldom regarded as good reasons to hesitate. There may even be an implication that trying to count that cost or consider those impacts is an unreasonable hindrance to the unlimited and irrepressible march of technology, which is always good, right?
Not so fast. In my standard Dad-think, I bought our youngest daughter a brand-new, highly-acclaimed-for-safety-and-reliability Honda Accord to begin her new post-graduate life of go-everywhere-any-time-of-night independence. The reliable-as-a-hammer reputation of Honda, however, has been seriously tarnished for me because this car won’t always start. One Sunday morning in January as my daughter prepared to depart Birmingham for Washington, D.C., the dashboard of that Accord lit up light a fireworks display before going black and taking the entire electrical system of the auto with it. Because delay was not an option, she took her mother’s less efficient but more reliable old Lexus to DC while Dad spent Monday morning at the dealership. The problem? In pursuit of technology-forcing CAFÉ standards, Honda had a bright idea (all puns intended). Honda added a sensor to detect when the Accord’s battery had sufficient residual charge to switch the car’s alternator out of service until needed. Periodic reduction of the marginal drag of the alternator on the engine’s main drive belt at least theoretically benefited the Accord’s highway mileage rating. Unfortunately, when the new sensor fails, as it did that Sunday morning, the entire electrical system goes haywire and the engine will not run.
When I came to understand that this tiny piece of technology that had been added to my car to chase a microscopic mileage advantage had also become a critical failure pathway for my precious daughter’s car, I was angry. I admit it. I cussed. When the failure occurred again 45 days later on the Sunday morning my daughter was planning to return to DC with her Honda after bringing her Mom’s car home, I really cussed. The earlier fireworks had likely damaged the car’s battery that now became the critical failure barrier to normal operation.
Cooler heads will explain that thousands of Honda Accords have probably operated millions of miles with that microscopic mileage advantage adding up. But the personal travails of one little environmental lawyer at least microscopically demonstrate that there are costs and impacts to technology-forcing requirements. The rest of this story might be even more entertaining. What do you think will happen when a different kind of lawyer figures out that there may be thousands of Accord owners driving around with new technology-forcing battery sensor switches that are prone to failure and might cost you a battery?
Posted on February 24, 2017
Here’s a thought exercise: I’ll give you a budget of 25 words (including conjunctions, articles, and all the other little ones). You use up a word by either deleting, adding, or replacing one in an existing federal environmental or natural resources statute. How much could you transform the field of practice with just those 25 word edits? The answer is, quite a lot.
When we think of statutory reform, we usually think big, right on up to “repeal and replace.” But after more than 25 years of very little legislative action on federal environmental and natural resources statutes—the National Wildlife Refuge Improvement Act, Sustainable Fishing Act, and the recent Toxic Substances Control Act reforms are a few exceptions since the 1990 Clean Air Act amendments—much rides on the accumulations of judicial and agency interpretations of the meaning of a word here and a phrase there. As we enter a period of potential legislative volatility in this field, therefore, the rifle shot may be just as much in play as the nuclear bomb.
Like any statutory reform, rifle shots can make regulatory statutes either more or less regulatory. For example, one could add “including carbon dioxide” or “excluding carbon dioxide” in just the right place in the Clean Air Act and with those three words put an end to a lot of debate and litigation. Given the current political climate, however, it’s reasonable to assume any rifle shot would be aimed at reducing regulatory impacts. But even with just 25 words in the clip, one could transform the impact of several regulatory programs before running out.
For example, delete the words “harm” and “harass” from the statutory definition of “take” in the Endangered Species Act (ESA) (16 U.S.C. 1532(19)) [LINK 1] and you have a very different regulatory program. Much if not most of the land use regulation impact under the ESA stems from the inclusion of those two words; without them, the ESA’s prohibition of unpermitted take would restrict actions like hunting, killing, shooting, and wounding, but could not reach indirect “harming” from habitat modification. Of course, the interagency consultation program under Section 7 (16 U.S.C. 1536(a)(2)) [LINK 2] would still be in place, prohibiting federal agencies from taking actions that “jeopardize” the continued existence of species. But just add “substantially” before “jeopardize” and the practical effect of that prohibition is greatly reduced.
I’ve managed to transform the ESA, vastly reducing its regulatory impact, with just three word tweaks. Twenty-two to go. Here are some more examples. I’ll let readers evaluate the impacts.
· Speaking of evaluating impacts, the environmental impact review process of the National Environmental Policy Act (NEPA) can really slow things down (42 U.S.C. 4332(B)). [LINK 3] To “streamline” the process, add the word “direct” before “environmental impact” in subpart (C)(1), which would eliminate the current practice of requiring analysis of indirect and cumulative impacts, and delete subpart (C)(iii), which requires agencies to evaluate “alternatives to the proposed action,” to remove a factor that bogs down much NEPA litigation. (Six more words down, sixteen to go.)
· Heard all the commotion about which “waters” are subject to the Clean Water Act? Clear that up by changing the statutory definition of “navigable waters” (33 U.S.C. 1362(7)) [LINK 4] to read “waters of the United States subject to navigation.” That would be pretty extreme—it would remove most wetlands from jurisdiction—so one could control how far jurisdiction extends over wetlands by adding and their adjacent wetlands.” This would draw the line much closer to navigable water bodies than current interpretations reflected in Supreme Court opinions and agency regulations—Rapanos and the Water of the United States Rule become history. (Seven more words down, nine to go.)
· And if you also want to put to rest the question whether the Clean Water Act applies to groundwater, edit the front end of the definition to read “surface waters.” (Another word down, eight to go.)
· The Circuits are split over whether the Migratory Bird Treaty Act’s list of prohibited activities (16 U.S.C. 703(a)), [LINK 5] which includes to “take” or “kill,” sweeps within the statute’s reach any “incidental” taking or killing—injury or mortality that is not the direct purpose of the activity, such as strikes by wind turbines. Easy to solve! Add the word “purposeful” before the list of prohibited activities. (Another word down, seven to go.)
· And, while we’re at it, let’s go ahead and add “excluding carbon dioxide” to the Clean Air Act definition of “air pollutant” (42 U.S.C. 7602(g)). [LINK 6] Adios, Clean Power Plan. (Three more words down, leaving just four to go.)
I’ll leave it to readers to think about how to use the last four words. The point here is that the system of environmental and natural resources law has become quite fragile. With Congress out of the picture for so long, courts and agencies have built up an interpretation infrastructure under which a single word or phrase often carries a tremendous burden of substantive and procedural program implementation. As a consequence, a mere tweak here and there can have dramatic effects on the program.
Granted, anyone who closely follows the statutes tweaked above will quickly appreciate the impact of any of the tweaks, and I’ve chosen some powerful examples unlikely to slip by any such experts. But subtler tweaks buried deep in a larger bill could more easily fly below the radar.
It remains to be seen whether Congress takes this rifle shot approach or goes bigger. Rifle shots don’t eliminate or “gut” entire programs, which may be the current congressional appetite, but the above examples show the potency of this approach. I for one will be keeping my eyes out for rifle shots in bills every bit as much as I will be following the big bomb reform efforts. Do not underestimate the power of the tweak!
Posted on February 6, 2017
In recent months, the Agency for Toxic Substances and Disease Registry (ATSDR) and the “minimal risk levels” (MRLs) established by ATSDR have played a direct role in EPA’s efforts to regulate stationary sources under the Clean Air Act. The ATSDR is an advisory agency created by CERCLA in 1980 to help EPA assess health hazards associated with Superfund Sites. ATSDR’s role was expanded by the 1984 RCRA Amendments to assess risks from hazardous substance releases at landfills and surface impoundments. In 1986 SARA further expanded ATSDR’s responsibilities under CERCLA to assess the health impacts of hazardous substance releases.
In response to its CERCLA mandate, ATSDR has developed MRLs which define the level of daily human exposure to a hazardous substance release that is likely to result in no appreciable risk of an adverse non-cancer health effect. MRLs are designed to be a screening tool and are not intended to identify levels that would trigger cleanup or other action. As a result, exposure to a hazardous substance above an MRL does not necessarily mean that adverse health effects will occur. Rather, MRLs “are set below levels that, based on current information, might cause adverse health effects in the people most sensitive to such substance-induced effect.”
In comparison to the MRLs developed under CERCLA, there are two sets of standards established by EPA under the federal Clean Air Act to address health impacts from air emissions. One of these is the National Ambient Air Quality Standards (“NAAQS”) which define the concentration of a criteria pollutant in ambient air deemed to be protective of human health. State implementation plans are designed to achieve compliance with NAAQS. Likewise, the air emissions from permitted stationary sources are analyzed to ensure consistency with NAAQS. NAAQS are developed through a rigorous process that solicits input from the scientific community and public at large, and are promulgated as rules which are invariably subject to legal challenge and judicial review.
EPA also establishes emission limitations under Section 112 of the Clean Air Act to control toxic air emissions. These standards limit the emissions of hazardous air pollutants from specified categories of stationary sources. EPA assesses the risk to public health and the environment that remains after implementation of these limitations and must promulgate new health based standards to mitigate those residual risks.
In recent months EPA has moved beyond the NAAQS and toxic air pollutant standards to rely upon the ATSDR and its MRLs in identifying the allowable, and ostensibly enforceable, concentration of pollutants in ambient air under the Clean Air Act.
In one case, EPA asked ATSDR to evaluate the ambient air quality surrounding a stationary source. ATSDR concluded that the monitored concentrations of manganese from that source exceeded the pollutant’s MRL. Based on this finding, US DOJ filed a civil complaint against the facility. One of the claims alleged that the monitored manganese concentrations presented an imminent and substantial endangerment to public health and that injunctive action was necessary under Section 303 of the Clean Air Act. The complaint requested a judicial order requiring installation of fence-line air monitors and implementation by the source of all measures necessary to prevent exceedance of the MRL for manganese at those monitors. In effect, EPA identified the MRL as the allowable concentration of manganese to be emitted under the Clean Air Act. The case has settled.
In other matters, EPA Region 5 utilized the information from an ATSDR health consultation to justify issuance of a Section 114 order under the Clean Air Act which required installation of fence-line PM10 monitors around a facility with outdoor storage piles where manganese emissions were also an issue. The company refused to install the monitors and EPA filed a civil complaint seeking to enforce the Section 114 order. EPA sought summary judgment, relying in part upon an ATSDR finding that manganese concentrations in the ambient air surrounding a nearby facility exceeded the MRL. The underlying ATSDR assessment also used PM10 Air Quality Guidelines (AQG) from the World Health Organization (WHO) to conclude that ambient PM10 concentrations might cause respiratory problems for sensitive individuals. Notably, the WHO AQG are more conservative than the NAAQS (the WHO AQG for PM10 is 50 μg/m3 as a 24-hour mean, whereas the NAAQS for PM10 is 150 μg/m3 averaged over that same time period). The case settled.
It’s worth noting that ATSDR has finalized approximately 150 inhalation based MRLs covering pollutants emitted by a broad range of industrial facilities. However, I think it is safe to assume that stationary sources do not view MRLs as imposing any additional Clean Air Act strictures on their operations since the MRLs are not listed as applicable requirements in air permits. Moreover, the Title I and V permitting programs do not require sources to perform dispersion modeling to ensure compliance with MRLs.
It remains to be seen whether EPA under the new administration will continue to reach out to ATSDR and utilize the MRLs in addressing air pollutant emissions, particularly where such limits have never been vetted through a rulemaking process. I wouldn’t bet on it.
Posted on January 25, 2017
As I reflect on my tenure as Assistant Attorney General, I have been especially proud of the Division’s cooperation with state and local governments in matters encompassing all aspects of the Division’s work – affirmative and defensive, civil and criminal. When we combine forces with our state and local partners, we leverage the resources of multiple sovereigns and, ultimately, achieve more comprehensive results for the American people.
In 2016, we had unprecedented success in civil enforcement with states, due primarily to the record‐breaking settlement with BP in the Deepwater Horizon Oil Spill litigation. In April 2016, the trial court entered the final consent decree in the litigation, thereby resolving civil claims of the United States and the five Gulf Coast states against BP. The claims arose from the 2010 blowout of the Macondo well and the resulting massive oil spill in the Gulf of Mexico. BP will pay the U.S. and the five Gulf States more than $20 billion under the consent decree, including: 1) a $5.5 billion civil penalty; 2) more than $8.1 billion in natural resource damages; 3) $600 million in further reimbursement of clean‐up costs and some royalty payments; and 4) up to $6 billion in economic damage payments for the Gulf States or their local units of government. This resolution is the largest settlement with a single entity in Department of Justice history; it includes the largest civil penalty ever awarded under the Clean Water Act, the largest ever natural resources damages settlement and massive economic damages payments to our state partners.
And, just this month we announced our plea agreement and civil consent decree with Volkswagen. In addition to the combined $4.3 billion penalty, corporate felony plea, and individual prosecutions, the previous civil consent decrees also provide $2.7 billion to all states for projects they select from the CD options to offset NOx pollution caused by the illegal car emissions. When the various settlements with VW are combined, and their value estimated, it approaches $20 billion.
Our state connections were vital to our criminal work. Cooperation ranged from providing training to state partners to close coordination in wildlife and pollution investigations. Prosecutors from ENRD’s Environmental Crimes Section presented at several events where state investigators learned of opportunities and methods for developing wildlife and environmental crimes cases, either in concert with federal counterparts or independently. Our prosecutors also trained their counterparts on the Division’s recently acquired authority over worker safety matters.
But environmental enforcement is not where ENRD’s work with state and local partners ends. We also are working with our counterparts at the state and local level in a relatively new area of responsibility for the Division – civil and criminal enforcement of federal laws that provide for humane treatment of captive, farmed, and companion animals across the United States. In July 2016, ENRD and the Office of Justice Programs co-hosted a roundtable discussion on Animal Welfare Enforcement. We were joined by more than 100 leaders in the area, including representatives of federal agencies, states and local governments, as well as researchers, scientists and others in the animal welfare field. The roundtable allowed us to focus collectively on information sharing, organizational strategies and cooperation in animal welfare enforcement.
Finally, ENRD continued to develop and enhance relationships with our state counterparts by participating in several forums designed to share experiences and expertise. In the spring of 2016, for example, I had the honor of being the first ENRD Assistant Attorney General invited to speak to the annual meeting of the Environmental Council of the States, the national association of state and territorial environmental agency leaders. I joined colleagues from EPA, New Mexico and academia to discuss innovative ways to measure the success of environmental enforcement. ENRD attorneys also partnered with the National Association of Attorneys General to present webinars on topics of mutual interest, such as e‐discovery, and share expertise regarding federal bankruptcy law in the context of environmental cases. Finally, just this week we collaborated with the National Association of Attorneys General to publish Guidelines for Joint State/Federal Civil Environmental Enforcement Litigation, which is now available on the DOJ website.
As I depart from the Division, we are in good shape. In December, the Division accepted an award by the Partnership for Federal Service, which ranked the ENRD as the #2 best place to work in all of the federal government, as well as the best place to work in the Department of Justice. With more than 300 Federal agency subcomponents competing, our new rank places us well into the top 1% of all Federal workplaces.
Posted on November 18, 2016
Q: What two things do Jeb Bush, John Kasich, Marco Rubio, Rand Paul, Chris Christie, Carly Fiorina, Mike Huckabee, Bobby Jindal, Ted Cruz, and George Pataki have in common?
A: (1) None of them ever claimed that climate change is a Chinese hoax; and
(2) Every one of them promised to revoke the Obama Clean Power Plan (CPP) if elected.
How Bad Is Bad?
I’ll come back to the CPP. But first, the question so many are asking: how terrible is Mr. Trump’s election going to be for the environment? Let me begin by reminiscing. In 1980, I was in EPA’s Office of General Counsel when the “killer trees” President was elected. I don’t remember actual tears in the office the next day, but people were pretty distressed and many were threatening to leave the agency.
Things really did look bad for a while. Remember Anne Gorsuch Burford, Rita Lavelle, James Watt and many others with similar agendas? But then remember the intense and angry public reaction when it appeared that core environmental protections for clean air and clean water were in jeopardy. These people were forced out of office. William Ruckelshaus returned at the top of EPA, and the ship was essentially righted.
With that history as a guide, I don’t think the Trump Administration (disclosure: I neither supported nor voted for him) will try to make any significant changes to the vast bulk of protective air, water, waste, etc. rules now on the books. I once calculated there are over 20,000 pages of EPA regulations in the C.F.R. That’s millions of words. I think that after four years of a Trump Administration, fewer than 1% of those words will be deleted or amended.
Now back to the CPP. I am pretty sure that will fall into the 1%. Others have written about what might happen to the CPP on judicial review and I won’t try to add to that guessing game. The key thing to remember is that the CPP is currently stayed by the Supreme Court, and that stay will remain in effect until any final Supreme Court disposition – which will be many months from now.
There is a good chance that the Trump EPA will not wait for any final judicial review but rather will soon undertake a rulemaking to revoke at least the more far-reaching and controversial elements of the CPP (i.e., the provisions “going beyond the fence-line” to force wind and solar in place of coal). As explained in one of my recent blogs, there would be no need to develop a new factual record in such a rulemaking. So this process may take a couple of years, but for much of that time the CPP will remain blocked by the Supreme Court stay and the earliest CPP standards aren’t scheduled to take effect until 2022.
As also explained in my blog, thanks to a recent 3-0 D.C. Circuit opinion authored by Judge Merrick Garland (and the Supreme Court precedent that he relied upon), those in the Trump EPA should have smooth sailing on judicial review if they take the time to clearly articulate their policy and legal rationale.
And what would public reaction be to such actions? Cutting the most controversial parts out of the CPP would not jeopardize the legal basis for core clean air and water protections as the early Reagan cutbacks were perceived to do. So even if revisions to the CPP provoke lots of noise from traditional public interest groups opposing any cut-backs in GHG regulation, that noise may not resonate much with a general public much more interested in jobs, health care, and public safety.
Public reaction could be far different, though, if – as indicated in some press reports -- the Trump EPA were to go beyond significantly cutting back on the CPP and deploy a nuclear option: reversing the Obama EPA’s 2009 GHG “endangerment finding.” By doing this EPA would be trying to free itself of any obligation to regulate GHGs under the Clean Air Act. (Note: I am not addressing the more limited August 2016 aircraft emission endangerment finding.)
I think such a reversal would be extremely unwise. First, I think it would be far more vulnerable on judicial review than a significant CPP cutback. Reversing the finding would require the building of a massive new factual record. And with the growing scientific consensus that man-made GHGs are causing at least some adverse effects, even conservative judges may have difficulty upholding such a decision.
Second, having EPA in effect deny there is any climate problem from air emissions could more easily foment the kind of intense and angry public reaction that the early Reagan EPA suffered. Recall from the above that none of the other Republican candidates gunning for the CPP ever said global climate was a Chinese hoax.
Finally, I believe such a reversal is entirely unnecessary as a legal matter. As long as EPA keeps some form of GHG controls on the books, it will have carried out its legal obligations stemming from the endangerment finding. Nothing in the CAA or any judicial decision requires that the degree of GHG regulation be driven by an endangerment finding. There is nothing remotely like the MACT mandate to achieve limits being met by the best 12% in a source’s category. In short, EPA does not need to touch the endangerment finding to accomplish the goal of amending the CPP to remove its more far-reaching and controversial provisions.
More Targets and Concerns
Getting back to the basic question of how much the Trump EPA may change things, there will certainly be more rules targeted in the 1% -- the Obama Clean Water Rule for almost sure. And there are valid concerns about how much EPA’s funding and enforcement efforts may be cut back even if most rules stay on the books. Spoiler alert: I may do blogs on these topics soon.
But my main concern for people at the Trump EPA now is that they remember what happened when the Reagan EPA tried to de-regulate in a manner that was perceived as threatening core values of clean air and clean water.
Posted on October 4, 2016
More about that title later, but first let me set the stage. On September 27, 2016, the D.C. Circuit, sitting en banc, heard argument in West Virginia v. EPA, in which state, industry, and labor petitioners challenge EPA’s Clean Power Plan (CPP, the Plan, or the Rule). The Plan regulates carbon dioxide emissions from existing power plants under Clean Air Act (CAA) §111(d). I will refrain from addressing issues on which the trade and mainstream press have opined at length (e.g., the judges’ frustration at being asked to make policy decisions because Congress has failed to act and that participants – judges, lawyers, parties, reporters, the public – had to sit through almost 7 hours of argument in one day, in addition to the hours many spent waiting in line). Instead, I offer an ACOEL-centric tour, in non-chronological order, of the five “segments” of the September 27 argument.
Argument Segment #2: The Battle Between CAA §§112 and 111(d). Aficionados of the College’s 2014 white paper on EPA’s §111(d) regulatory authority will recall the difference of opinion over whether – under the 1990 Amendments to the CAA – EPA is prohibited from regulating power plants under CAA §111(d) if EPA already regulates power plants under CAA §112. Plan challengers point to the plain meaning of §111(d)(1)(A) as it appears in the U.S. Code. Plan supporters point to the existence of a “conforming amendment” to §111(d)(1)(A) found in the Statutes at Large but omitted from the U.S. Code, and they argue that EPA’s approach is a valid attempt to reconcile that amendment with the U.S. Code. After listening to the judges express frustration at not being able to satisfyingly reconcile the two versions, I recalled D.C. Circuit Judge Leventhal’s concurring opinion in Citizens to Save Spencer County v. EPA, in which he concluded that contradictory CAA provisions should be viewed as “countermanding.” Quoting from Eugene Field’s poem “The Duel” – about the fight between the gingham dog and the calico cat – he summed up the irreconcilable differences as follows: “The tension between the two animals culminates in these final lines of doggerel: ‘The truth about the cat and pup is this, They ate each other up.’ ”
Argument Segment #3: Constitutional Issues. If forced at knife-point to articulate the first portion of this argument, which began at 2:35 p.m., right after the lunch break, I would be unable to do so, other than to say that the word “commandeering” cropped up a lot. More interesting was how the second advocate for petitioners on this point – Professor Laurence Tribe of Constitutional law fame – was able to expand his separation-of-powers argument into a further analysis of issues argued during the morning session.
Argument Segments #4 and #5: Notice and Record-Based Issues. At the end of a very long day, the panel heard arguments on (a) whether EPA’s standards are “achievable” and whether parts of the Plan’s approach have been “adequately demonstrated” under §111; and (b) whether the final rule is so different from what was proposed that the public lacked notice and an opportunity to comment. Petitioners arguing the former point (the unachievability of program requirements) faced a weary panel, which pondered what the options for state and source relief would be if the Rule is upheld but later turns out to be a train wreck.
A colleague describes as follows the situation that gives rise to parties complaining that they had no notice of what a final rule would require because EPA’s proposal was so different: “EPA may propose an apple and finalize an orange. That’s OK; they’re both fruits. What EPA may not do (and what petitioners argue EPA has done here) is to propose an apple and finalize a pork chop.” Dick Stoll passionately argued – in his June 7, 2016 post for ACOEL – that previous 3-judge panels in the D.C. Circuit have not properly dealt with this lack-of-notice issue. Those panels refused challengers’ attempts to overturn pork chops, saying challengers of pork chops must first file administrative petitions for review under CAA §307(d)(7)(B) and then wait (for what could be years, if ever) for EPA to act on those petitions. Dick argued that the only way the previous 3-judge panel decisions would ever be overturned was by action of the entire court, sitting en banc. I cannot promise Dick the entire court will overturn the previous panels’ reading of §307(d)(7)(B), but I can say that Tom Lorenzen teed up the issue. When asked by Judge Griffith whether this argument appeared in petitioners’ briefs, Lorenzen said it did not because when petitioners wrote their briefs, the case was going to be heard by a 3-judge panel. But said Lorenzen, looking up at Judge Griffith, “Now we are here.” To which Judge Griffith replied, “And who else to ask but an en banc court?” “Exactly,” said Lorenzen.
Argument Segment #1: Core Legal Issues. Although I visit Argument Segment #1 last, the fate of the Clean Power Plan may well rest on how the panel addresses the issue raised at the very beginning of the day: whether or not the Plan is “transformative.” The Supreme Court, in UARG v. EPA, held that EPA cannot engage in a “transformative expansion” of its regulatory authority absent “clear congressional authorization” to do so. Petitioners argue that EPA’s Clean Power Plan amounts to a transformative expansion of EPA’s explicit regulatory authority and thus is illegal. EPA argues the program is not “transformative”; indeed, says EPA, the Rule is very similar to other CAA programs that the D.C. Circuit has upheld. So, is the Rule “business as usual” or is it “transformative”?
And so we return to the title of this post. I cannot predict what the D.C. Circuit will decide, but I think its determination will revolve around how the en banc panel answers the following question about the Clean Power Plan: Is You Is or Is You Ain’t Transformative? And that question prompts me to offer these final lines of doggerel in memory (and honor) of Judge Leventhal:
To predict the end here, it’s informative
To know if C-P-P is transformative.
To prevail in this Court,
One must prove that the sort
Of change caused by that Rule is enormative.
Posted on September 2, 2016
Do air emissions of pollutants constitute a “disposal” under the federal hazardous waste laws? The Ninth Circuit said “no” in Pakootas, et al. v. Teck Cominco Metals, Ltd. based upon its reading of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund). The decision both sets important precedent and showcases the judicial process to discern legislative intent when a statute’s plain language is stressed by an unusual fact pattern. If air pollutants can create CERCLA disposals, then emissions from any stationary or mobile source, including animal emissions of methane (which is considered a pollutant subject to CERCLA by EPA), may be the basis of cleanup liability.
The decision involves a smelter located just north of the border with British Columbia. An earlier decision in that case held that a foreign-based facility can be liable under CERCLA for slag discharges into a river running to the United States. Plaintiffs then alleged the facility arranged for disposal by emitting hazardous air contaminants which were carried by the wind and deposited in Washington State. The district court denied a motion to dismiss and certified the matter for immediate appellate review.
Reading the plain language of CERCLA, the Ninth Circuit found that “a reasonable enough construction” of the law would be that the facility “arranged for disposal” of its air pollutants. No legislative history or EPA rules shed light on this subject. However, the Court concluded it was not writing on a blank slate. Noting that CERCLA incorporates the definition of “disposal” from the Resource Conservation and Recovery Act (RCRA), the Court cited its prior decision in Ctr. for Cmty. Action and Envtl. Justice v. BNSF Rwy. Co., which held that diesel particulate emissions “transported by wind and air currents onto the land and water” did not constitute “disposal” of waste within the meaning of RCRA. To be a disposal, the solid or hazardous waste must first be placed into or on any land or water and thereafter be emitted into the air. The Court also cited its en banc decision in Carson Harbor Vill., Ltd. v. Unocal Corp., holding that passive migration was not a disposal under CERCLA.
The Court thereby found that arranging for “disposal” did not include arranging for air “emissions.” This interpretation of “disposal” was largely consistent with CERCLA’s overall statutory scheme. The Court expressed concern that plaintiffs’ more expansive reading would stretch CERCLA liability beyond the bounds of reason. “[I]f ‘aerial depositions’ are accepted as ‘disposals,’” the Court said, “‘disposal’ would be a never-ending process, essentially eliminating the innocent landowner defense.”
The Court did not discuss in detail the statutory interplay with the Clean Air Act, which regulates air emissions under a complex regulatory and permit scheme. Under CERCLA, federally permitted releases are excluded from liability. But because air permits often specify the control equipment parameters rather than an emission limit, a CERCLA plaintiff may allege that the mere existence of a permit does not provide a blanket immunity from liability and the facility would remain liable for any releases that were not expressly permitted, exceeded the limitations of the permit, or occurred at a time when there was no permit. The Court in passing did note its skepticism that the federally permitted “release” exception evidenced any Congressional intent regarding the meaning of “disposal.”
The Ninth Circuit is the highest court to exclude air emissions from the reach of CERCLA and RCRA. The Court’s citation to Carson Harbor does not provide an exact analogy since a passive landowner has not “arranged” for the initial release of hazardous substances, as compared to the smelter operations which result in air emissions. But the Court’s unwillingness to create potentially unlimited CERCLA liability for air emissions is compelling. Under CERCLA, liability is strict, joint and several and retroactive. Air emissions are widely transported and dispersed in relatively small concentrations by large numbers of potential sources, making CERCLA liability findings and allocations difficult if not impossible.
The Court thereby divined Congress’ intent to make CERCLA’s scheme workable, apart from a literal reading of its text. For judges to “repair” statutory language in this way is controversial. The decision is reminiscent of the U.S. Supreme Court holding that the Obama health care plan provides tax credits to millions of people who purchase insurance from a federal marketplace, even though the statute only provides credits for those who purchase from marketplaces “established by the state.” According to Justice Roberts, that was the only way the law would work, and despite the plain wording in the statute, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.” CERCLA also is not a model of clarity, and the Ninth Circuit similarly incorporated practicality as a factor in discerning Congress’ intent to avoid overreaching in assigning liability for the cleanup of toxic chemical releases.
Posted on August 31, 2016
Spencer Johnson’s classic came to mind when I learned of new plans for the Burger power plant on the Ohio River. The Burger plant has had a makeover from an electric generating facility to a massive chemical plant feasting on the abundant natural gas in the Marcellus and Utica regions of Western Pennsylvania and Eastern Ohio.
When I returned from active duty, my employer said, you will practice environmental law. Because I was accustomed to taking orders, I said "yes sir". That led me to cooling towers for the Davis Besse and Perry Nuclear plants on Lake Erie. More dramatically, however, it led me to years of dealing with coal-fired generation in Ohio. Rich with coal and numerous coal-fired plants on Lake Erie and the Ohio River (and other rivers as well), I thought Ohio would supply cheap, coal-fired energy for many people for years. Unfortunately, I did not predict the obsolescence of coal-fired electric generation or the recent emergence of natural gas as the leading source of fuel for power. I saw clients invest billions of dollars in pollution control equipment only to see the emission reduction goal posts moved beyond reach as regulators adopted progressively more stringent measures to address new national ambient air quality standards, lake breeze fumigation, long range transport, acid rain, regional haze, hazardous air pollutants, and greenhouse gas emissions.
When I started my practice, virtually all of the Ohio base load units burned coal. And thousands of Ohio miners worked and their families prospered. Barges carried coal down the Ohio River or unit trains took coal to the Lake Erie plants. I saw Little Egypt take big bites of coal and overburden in southeastern Ohio. I remember when an interstate (77) was closed to let the mammoth excavator proceed to the next seam of coal on the other side.
I have stood on the air pollution control deck of a massive Ohio River power plant that spans a highway. I have wiped the floor with white gloves of a coal fired plant on Lake Erie. I have worked with the dedicated professionals who took pride in maintaining those plants. So it saddens me to read that talented engineers are being laid off from engineering companies in Akron, and major utilities are selling megawatts on the Ohio River. AEP and First Energy have announced plans to auction generating units.
Some of us remember that our success was measured in jobs retained while reaching a reasonable accommodation with the environment. I hope my successors have that opportunity .
So with sadness and regret – but also an appreciation that my career started in 1973, at the beginning of the burgeoning practice of environmental law, when "Coal Was King" and the Burger plant was alive and well – I hope you watch this short video of the demolition of the Burger coal-fired power plant to make way for a natural gas cracker. Here is the demise of the Burger "tall stack." May Burger rest in peace.
Posted on August 18, 2016
Today, the U.S. EPA and Department of Justice announced that Harley Davidson has accepted defeat on defeat devices. The icon of rebellion lost its black luster years ago when bankers, professors, and, of all things, lawyers, became the most noticeable owners and riders of their iron horses. The Gucci sunglasses betrayed the weekend gangsters to mere citizens who at first trembled at the rumble of Harley motors.
But now, the historic purveyor of the rawest available form of horsepower has agreed to stop selling popular “super tuners” for “Super Glides”, “Fat Boys”, “Road Kings”, “Electra Glides” and other iconic rides. The engine tuner kits are guaranteed to raise the rumble another notch or two. The problem? Emissions. What?! Yes, emissions.
Well, actually cheating about emissions. EPA says Harley’s “super tuned” engine emissions are higher than the emissions certified for stock engines. I’m shocked. The aftermarket nature of these horsepower enhancers does not matter. Harley is not supposed to help rabble rousing bikers exceed their emissions allowances, says EPA.
Wow. Is blaming Harley for breaking the rules within the rules? Has the last hope of rebellion been reduced from “rolling thunder” to a Vespa’s whine? I would take my stack of Harley t-shirts out in the backyard tonight for a ceremonial bonfire, but Birmingham has banned open burning until November.
Posted on August 4, 2016
This post started as a piece about a recent Fifth Circuit decision: Texas v. EPA. In that case, the state of Texas (and others) challenge EPA’s disapproval of Texas’s (and Oklahoma’s) plans for controlling regional haze and EPA’s decision to impose its own haze-control program instead. To make my drafting process more entertaining (and the task of posting more challenging for our official poster, Colin Gipson-Tansil), I set a goal for myself: to include within my post at least 25 valid links to others’ posts during the past year. Fortunately for me, there is almost nothing in Texas v. EPA that doesn’t link to one or more recent posts.
Jurisdiction and Venue. Many of the past year’s posts point out problems caused by the failure of the Clean Water Act to state unambiguously which federal court has jurisdiction to hear a specific challenge to an EPA action under that statute. Stoll’s 9/2/2015 post, Glick’s 10/9/2015 post, Horder’s 11/3/2015 post, Perdue’s 2/5/2016 post, and Uram’s 4/5/2016 post. Texas v. EPA demonstrates that choice-of-court problems also exist under the Clean Air Act’s judicial review provision, §307(b)(1).
Clean Air Act §307(b)(1) – said the Fifth Circuit – is a two-fold provision: first, it confers jurisdiction on the courts of appeals, and then it delineates whether the appropriate venue for challenges will be the regional circuits (if the challenged action is locally or regionally applicable) or the D.C. Circuit (if the action is nationally applicable). Believing EPA’s disapproval of its regional haze program to be locally or regionally applicable, Texas filed its challenge in the Fifth Circuit. EPA moved to dismiss or transfer the case to the D.C. Circuit based on a separate, not-as-well-known prong of §307(b)(1), which directs that a petition for review of what seems like a non-national action may be filed only in the D.C. Circuit if the action is “based on a determination of nationwide scope or effect and if in taking such action [EPA] finds and publishes that such action is based on such a determination.” After an exhaustive de novo evaluation of that portion of §307(b)(1), the Fifth Circuit determined that because the challenged EPA actions are locally or regionally applicable and because they are not based on any determinations that have nationwide scope or effect, the Fifth Circuit is the appropriate court to hear the case.
But wait. There are other link-worthy aspects of Texas v. EPA, including the following.
Explanations of Decisions to Stay Challenged Actions. During the past year, posts have discussed whether and how much a court needs to explain the basis on which it stays a challenged rule pending completion of litigation concerning that rule’s validity. Jaffe’s 2/10/2016 post, Gerrard’s 2/10/2016 post. If it is a lengthy explanation you seek for when and why a court should stay an EPA action pending completion of litigation, the Fifth Circuit provides that in Texas v. EPA.
Deference. Other recent posts have addressed when deference to an agency interpretation is – or is not – appropriate. Kovar (12/10/2015); Percival (1/27/2016); Field (2/11/2016); Haynes (2/19/2016); May (6/9/2016); Civins (7/5/2016); Jaffe (8/2/2016). In Texas, the Fifth Circuit put clear limits on deference, holding that the level of deference owed to an agency’s conclusions is “substantially diminished when the subject matter in question lies beyond the agency’s expertise.” Thus, while the Fifth Circuit was prepared to defer substantially to EPA’s views on environmental science, it declined to defer to EPA’s views on whether its actions would impair the reliability of the electricity grid. Since “EPA has no expertise on grid reliability” (that is FERC’s domain), the “deference owed to EPA’s assertions about grid reliability [is] diminished and the agency must support its arguments more thoroughly than in those areas in which it has considerable expertise and knowledge.”
That limitation on deference could have an impact on the most talked-about case by ACOEL members this past year: West Virginia v. EPA, in which more than two dozen states and many other parties challenge EPA’s Clean Power Plan. Jaffe’s 9/10/2015 post, Gerrard’s 2/10/2016 post, Jaffe’s 10/23/2015 post, Jaffe’s 12/9/2015 post, Percival’s 12/16/2015 post, Stoll’s 12/21/2015 post, Perdue’s 2/5/2016 post, Jaffe’s 2/10/2016 post, Field’s 2/11/2016 post, Session’s 2/17/2016 post, and Freeman’s 3/2/2016 post. The Fifth Circuit’s limit on deference is the basis of a recent Federal Rules of Appellate Procedure 28(j) letter sent to the D.C. Circuit by the petitioning states in West Virginia. According to those states, the Fifth Circuit’s decision in Texas v. EPA supports, among other things, the petitioning states’ argument that EPA has failed to show that the Clean Power Plan will not detrimentally affect grid reliability.
Perhaps the link in which I take the most pride, though, is this last link – to Seth Jaffe’s October 2, 2015 Brief Rant on Cost-Effectiveness Analysis. In that post, Seth argues that if the purpose of a rule is to improve visibility, EPA should use a measurement of visibility – a deciview (dv) – to assess visibility improvement. Well, in Texas v. EPA, the Fifth Circuit seemed to be heading in the direction of agreeing that in considering the cost of a regional haze program, EPA should use the $/dv metric. Alas, at the last minute, the court pulled back on a complete endorsement of the $/dv metric: because the petitioners had a “strong likelihood of establishing other flaws” in EPA’s actions, the court said it did not need to decide whether EPA “fell short of its obligation to consider the costs of its regulations” by failing to use $/dv metrics. So, Seth may have to wait a while longer before seeing a court mandate for EPA’s use of $/dv metrics to evaluate visibility improvements. I, however, achieved my goal of including a record number of links in this post.
Posted on July 8, 2016
In May 2016, EPA finalized updates to its New Source Performance Standards (NSPS) for the oil and gas industry which amended 40 CFR Part 60, Subpart OOOO and added new requirements (Subpart OOOOa) to those established for Volatile Organic Compounds (VOCs) and sulfur dioxide (SO2) established for this industry sector in 2012. Importantly, the new requirements address reductions of greenhouse gas (GHGs) emissions, specifically methane. In its Executive Summary, EPA discussed the efforts by the agency to “complement” and “improve” the existing rules issued in 2012, stressing the agency’s efforts to engage states and stakeholders and solicit comments prior to its 2015 proposal or the rule. EPA also stressed it worked closely with the Bureau of Land Management to avoid conflicts and evaluated existing state and local programs to attempt to limit conflicts, where possible.
After promulgation of both the 2012 rule and 2013 amendments, the agency received petitions for reconsideration raising numerous issues, including the regulation of GHGs. EPA has addressed some of petitioners’ issues in 2015 amendments addressing storage vessels as well as in this rule, adding standards for methane and addressing storage vessel control device monitoring and testing; initial compliance requirements for bypass devices that divert emissions from control devices; recordkeeping requirements for repair logs for control devices which fail a visible emissions test, clarification of the due date for the initial annual report; emergency flare exemptions from routine compliance tests; leak detection and reporting for open-ended valves or lines; compliance period for leak detection and repair (LDAR) for newly affected process units; exemption to notification requirement for reconstruction of most types of facilities; and disposal of carbon from control devices. However, in a footnote, EPA makes clear it intends to complete its reconsideration process in a subsequent notice.
One interesting aspect of the 2016 rule publication is the extensive discussion of how the 1979 source category listing, “crude oil and natural gas production” is defined. The agency takes great pains to justify its broad authority over the industry to include not only production, but also processing, transmission and storage equipment. The EPA concludes that its category listing need not be revised to support the additions and amendments of this rule (even though it does clarify some wording), and sets out its justification for including the entire sector in its 2009 endangerment finding relating to GHGs.
EPA concluded that the Best System for Emissions Reduction (BSER) is the same for GHGs as it is for VOCs, so there are no changes required for equipment that was covered by the 2012 rule. Newly regulated sources covered by the 2016 rule include: heretofore unregulated hydraulically fractured oil well completions, pneumatic pumps, fugitive emissions from well sites and compressor stations; sources regulated under the 2012 regulation for VOCs for which GHGs are now also regulated (hydraulically fractured gas well completions and equipment leaks at natural gas processing plants); and certain equipment that is used across the source category for which subpart OOOO regulates emissions of VOCs from only a subset (pneumatic controllers, centrifugal compressors and reciprocating compressors), with the exception of compressors located at well sites.
In addition to emission reductions, LDAR utilizing optical gas imaging semi-annually is required for well sites and compressor stations. (Method 21 at a repair threshold of 500 ppm may be used.) Initial monitoring surveys must take place by June 3, 2017 or within 60 days of the startup of production, whichever is later. Repairs must be made within 30 days and a resurvey is required within 30 days of repair. Also, a monitoring plan that covers collection of fugitive emissions components is required to be developed and implemented for well sites and compressor stations. At natural gas processing plants, equipment leaks of methane (GHGs) are subject to the same requirements as those for VOCs. The compliance period begins on November 30, 2016.
And, the rule embraces “next generation” electronic reporting via EPA’s CDX, for enhanced accessibility and transparency to the public, as soon as the forms and systems are available. Professional engineers are required to provide certifications of technical infeasibility of connecting a pneumatic pump to an existing control device and to design closed vent systems.
Finally, there is a complicated discussion of EPA’s interpretation of UARG v. EPA, which merely results in EPA concluding that the rule should not affect applicability of Title V permit or PSD/NSR applicability determinations for “anyway” sources, even though, if not otherwise required to obtain and comply with a Title V permit, emissions of GHGs (methane) alone will not subject a source to Title V permit requirements.
Posted on June 7, 2016
Clean Power Plan (CPP) groupies are beside themselves over the D.C. Circuit’s surprise “straight-to-en banc” move for CPP judicial review. The buzz is mostly over the survivability of the CPP’s interpretations of Clean Air Act (CAA) §111(d) in light of the nine judges’ dispositions.
I won’t weigh in on that issue here. My target is another issue, one that has been lurking in the background and has bugged me greatly for the last couple of years. Now that the issue is before an en banc panel, I am fervently hoping the Court will do what only en banc panels can do: declare that a few recent D.C. Circuit rulings are wrong.
The issue involves garden variety adlaw: should the CPP be vacated because EPA failed to propose or adequately foreshadow key elements of the final rule? Parties attacking the CPP have advanced this argument, and EPA has defended on numerous grounds that its notice was adequate.
I won’t opine here on whether EPA’s notice was adequate. My beef is with EPA’s fall-back defense: EPA’s argument that even if there were wholly insufficient notice of the CPP’s final provisions, the Court has no authority to vacate the CPP on those grounds.
EPA’s theory is that since CAA §307(d)(7)(B) provides that only an issue raised in public comments can be raised on judicial review, a final rule that was never proposed cannot be challenged on judicial review because there were no public comments on that provision. Yep, read on.
EPA argues that parties claiming a final rule was never proposed must instead file administrative petitions for review under CAA §307(d)(7)(B) and wait (usually for a few years, if ever) for EPA to act on those petitions. In the meantime, under EPA’s position, regulatory provisions that were never proposed or foreshadowed must go into full force and effect.
This means that EPA can get away with murder, at least in the adlaw context. Just forget the bedrock principle that an agency can impose and enforce only those rules that have first been proposed. Under EPA’s position, the bedrock is blown away by a Richter 8.8 otherwise known as CAA §307(d)(7)(B).
In the last two years, EPA has managed to convince D.C. Circuit panels to accede to this unfair and baseless approach. See my 2015 ACOEL post discussing these opinions. In a piece I published in Bloomberg BNA in 2014, I showed how the D.C. Circuit had never previously interpreted CAA §307(d)(7)(B) in this fashion , and had on many occasions vacated final rule provisions that had never been proposed.
As explained in the above-cited pieces, the absurdity of EPA’s position is that final rules will go into full force and effect against parties because they failed to object to something they could not object to. This just can’t be right. The en banc CPP panel should do the right thing and declare the three most recent decisions to be wrong.
[Mr. Stoll is not representing any party in the pending D.C. Circuit CPP judicial review proceedings.]
Posted on May 20, 2016
August 25, 2016 is the 100th anniversary of the National Park Service. The many planned celebrations and observances provide an opportunity for everyone to become reacquainted with these great outdoor spaces and reflect on the world around us. As your summer plans take shape, be sure to visit FindYourPark.com and try to visit at least one national park. I invite you to share photos of your travels in the comments section of this post, and perhaps ACOEL can find a place for the collection of images of its members enjoying these national treasures.
As I reflect on the Park Service’s anniversary, I observe that it presents a chance for me – and for all environmental lawyers – to take stock of where we have been as a profession. Why – and how – we do what we do? What challenges will the next 100 years hold?
I issue this charge, in part, to carry on the conservation legacy of Henry L. Diamond. Henry was a founder of my firm, Beveridge & Diamond, and a great environmental lawyer and mentor to many (including myself). Sadly, we lost Henry earlier this year.
Henry and many others like him paved the way for our generation to be stewards of the planet and the environmental laws that govern our interactions with it. We have made progress, but new challenges have emerged. Easy answers, if they ever existed, are fewer and farther between. So what, then, does the future hold for the next generation of environmental lawyers?
Future generations of lawyers would do well to focus on the funding mechanisms that are critical but often overlooked components to achieving our most important environmental and sustainability goals. As an example, we can look to the past. Early in his career, Henry Diamond assisted the Chairman of the Outdoor Recreation Resources Review Commission, Laurance Rockefeller, in editing the Commission’s seminal report, Outdoor Recreation for America, that was delivered to President John F. Kennedy in 1962. Among the Commission’s more significant recommendations was the idea to use revenues from oil and gas leasing to pay for the acquisition and conservation of public lands. Congress took action on this recommendation, creating the Land & Water Conservation Fund in 1965 as the primary funding vehicle for acquiring land for parks and national wildlife refuges. While the fund has been by all accounts a success in achieving its goals, much work remains to be done and the fund is regularly the target of budgetary battles and attempts to reallocate its resources to other priorities. Today, the four federal land management agencies estimate the accumulated backlog of deferred federal acquisition needs is around $30 billion.
I expect climate change will dominate the agenda for the young lawyers of our current era. They will need to tackle challenges not only relating to controlling emissions of greenhouse gases, but also adaptation resulting from climate change. Sea level rise, altered agricultural growing seasons, drought and water management, and other issues will increase in prominence for this next generation.
We can expect our infrastructure needs to continue to evolve – not only replacing aging roads, bridges, tunnels, railroads, ports, and airports, but also the move to urban centers and the redevelopment of former industrial properties. Autonomous vehicles and drones also pose novel environmental and land use issues. These trends will require us to apply “old” environmental tools in new ways, and certainly to innovate. As my colleague Fred Wagner recently observed on his EnviroStructure blog, laws often lag developments, with benefits and detractions. Hopefully the environmental lawyers of the future will not see – or be seen – as a discrete area of practice so much as an integrated resource for planners and other professions. Only in this way can the environmental bar forge new solutions to emerging challenges.
The global production and movement of products creates issues throughout the supply chain, some of which are just coming to the fore. From raw material sourcing through product end-of-life considerations, environmental, natural resource, human rights, and cultural issues necessitate an environmental bar that can nimbly balance progress with protection. As sustainability continues its evolution from an abstract ideal to something that is ever more firmly imbedded in every aspect of business, products, services, construction, policymaking and more, environmental lawyers need to stay with their counterparts in other sectors that are setting new standards and definitions. This area in particular is one in which non-governmental organizations and industry leaders often “set the market,” with major consequences for individuals, businesses, and the planet.
Finally, as technology moves ever faster, so do the tools with which to observe our environment, to share information about potential environmental risks, and to mobilize in response. With limited resources, government enforcers are already taking a page from the playbooks of environmental activists, who themselves are bringing new pressures for disclosures and changes to companies worldwide. With every trend noted above, companies must not underestimate the power of individual consumers in the age of instantaneous global communication, when even one or two individuals can alter the plans and policies of government and industry.
Before Henry Diamond passed away, he penned an eloquent call to action that appeared in the March/April edition of the Environmental Law Institute’s Environmental Forum (“Lessons Learned for Today”). I commend that article to you. It shares the story of the 1965 White House Conference on Natural Beauty and how a diverse and committed group of businesspeople, policymakers, and conservationists (some of whom were all of those things) at that event influenced the evolution of environmental law and regulation for the decades to come. Laws such as the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, and others have their roots in that Conference. In recognition of his lifetime of leadership, Henry received the ELI Environmental Achievement Award in October 2015. The tribute video shown during the award ceremony underscores Henry’s vision and commitment to advancing environmental law. I hope it may inspire ACOEL members and others to follow Henry’s lead.
These are just a few things I think the future holds for environmental lawyers. What trends do you predict? How should the environmental bar and ACOEL respond?
Posted on April 28, 2016
In auto racing, the black flag is the ultimate sanction, signaling that a competitor has been disqualified and has to leave the race. That’s what happened to EPA recently, when it withdrew a controversial proposed rule to “clarify” that the Clean Air Act prohibits converting a certified vehicle for racing.
Merits aside, EPA’s start-and-stop performance is an excellent example of notice-and-comment rulemaking gone wrong. The original proposal appeared last July, a brief passage buried in the middle of a 629-page proposed rule on greenhouse gas emissions for medium- and heavy-duty engines and vehicles – hardly the place where one would look for a rule directed at race cars. See 80 Fed.Reg. 40137, 40527, 40552 (July 13, 2016). As should have been expected, EPA’s pronouncement that the Clean Air Act flatly prohibits converting emission-certified vehicles for competition went unnoticed for months. It wasn’t until late December, nearly three months after the close of the comment period, that SEMA (the Specialty Equipment Market Association, the trade group representing the motor vehicle aftermarket industry) discovered the proposed rule.
That’s when the yellow flag came out. SEMA and its members blasted EPA’s interpretation as reversing a decades-old policy that allowed the race-conversion market to flourish, and for hiding the proposal in an inapplicable rule. EPA’s response was to hold to its interpretation and to post SEMA’s comment letter in a “notice of data availability” so that others could comment – not on EPA’s proposal, but on SEMA’s letter. 81 Fed.Reg. 10822 (March 2, 2016).
SEMA stepped up the pressure with a White House petition that quickly garnered more than 150,000 signatures. Then came a letter to EPA from seven state attorneys general, and bills in both the House and Senate (brilliantly named the Recognizing the Protection of Motorsports Act, or “RPM”) to reverse EPA’s interpretation and codify the race exemption in the Clean Air Act.
On April 15, EPA hit the brakes, announcing that it was withdrawing its proposal. www.epa.gov/otaq/climate/regs-heavy-duty.htm. EPA stated that it never meant to change its policy towards “dedicated competition vehicles,” but admitted that its “attempt to clarify led to confusion.” EPA voiced its support for “motorsports and its contributions to the American economy and communities all across the country.
The checkered flag came out, but EPA had already pulled into the pits.
Posted on March 28, 2016
On February 9, 2016, the Supreme Court issued a stay of U.S. EPA's Clean Power Plan (“CPP” or "Power Plan,” 80 Fed. Reg. 64,662, October 23, 2015) for reducing CO2 emissions from existing fossil-fueled electric generating units. The Court's action was unprecedented because challenges to the Power Plan by 27 states and numerous utility, business, and labor parties were still being heard before the U.S. Court of Appeals for the D.C. Circuit. West Virginia et al. v. EPA, DC Cir. No. 15-1363. The stay will remain in effect until the conclusion of all litigation against the rule.
Among the core legal arguments against the Power Plan is EPA's reliance on "outside-the-fence" measures to reduce CO2 emissions. Section 111(d) of the Clean Act calls for EPA to set guidelines for states reflecting a standard of performance for "sources" based on the "Best System of Emission Reduction" ("BSER") that has been “adequately demonstrated.” EPA defined BSER to include emission reduction actions that could be taken throughout the electric grid, such as limiting generation from coal units while increasing the output of existing natural gas combined-cycle units, and increasing reliance on new renewable energy sources. The data reviewed below show that the standard of performance established for coal-based generating units based on this BSER, 1,305 lbs. CO2/MWh, is not achievable in practice by any conventional coal unit.
The Power Plan also calls for efficiency improvements at coal units that could reduce CO2 emissions. By adjusting units’ past heat rate data, EPA estimated that potential heat rate improvements of 2.1% to 4.3% were achievable for each of three regions in the U.S. See 80 Fed. Reg. at 64,789. However, implementing these "inside-the-fence" measures would result in less than 100,000 tons of emission reductions - about two/tenths of one percent - of the overall 413-415 million ton CO2 emission reduction from base case levels projected to result from full implementation of the rule by 2030. See, EPA Tech. Sup. Doc., State Goal Computation, Table 5 (extrapolated to 48-state basis), Aug. 2015; CPP Reg. Impact Analysis at Table 3-5.
An "inside-the-fence" analysis
EPA's methods for measuring the potential emission reductions achievable through efficiency improvements did not take into account the effects of different coal types on CO2 emissions. Such "subcategorization" is specifically authorized by Section 111 of the Clean Air Act. This post seeks to open a line of inquiry into an alternative approach to achieving CO2 emission reductions based on the emission characteristics of the best-performing units in the coal fleet and taking into account differences in coal type.
A statistical analysis of CO2 emissions from coal plants was performed using the DOE/NETL 2007 coal plant public data base. This data base contains detailed coal type and emissions control and performance data for 2005. The objectives of the analysis were twofold:
1) To determine whether plants burning different grades of coal (bituminous, subbituminous, and lignite) have sufficiently different emission rates measured in pounds of CO2/MWh to consider subcategorization by coal type; and
2) To assess the potential CO2 emission reductions associated with applying a standard of performance based on the best-performing units in each coal category.
The NETL data base was sorted to identify coal-fired units likely to remain in operation after implementation of EPA's 2012 Mercury and Air Toxics Standards (MATS) rule (77 Fed. Reg. 9,304, February 16, 2012). Three screening criteria were applied: unit capacity of 400 MW or greater, current age of 50 years or less, and heat rate of 9,000 BTU/kWh or higher, typical of the performance of conventional pulverized coal boilers.
This sort produced 272 units, totaling 176.7 Gigawatts (GW) of capacity, grouped as follows:
·141 bituminous units, totaling 94.0 GW, with an average emission rate of 2,055 lbs. CO2/MWh;
·110 subbituminous units, totaling 69.5 GW, with an average emission rate of 2,214 lbs. CO2/MWh; and
·21 lignite units, totaling 13.1 GW, with an average emission rate of 2,425 lbs. CO2/MWh.
The total generating capacity represented by these 272 units is comparable to EPA’s projection of 174 to 183 GW of coal capacity remaining in service in 2030, following full implementation of the Power Plan. See, EPA CPP Reg. Impact Analysis at Table 3-12.
Regression analyses performed on the three plant groups assesses the relationship between heat rate (the independent variable) and CO2 emissions per MWh of generation (the dependent variable.) The results are summarized in Chart 1 for all 272 sampled units. The linear regression trend line confirms a moderate positive association between plant heat rate and CO2 emissions (i.e., units with lower heat rates tend to have lower CO2 emissions per MWh, and vice versa.)
Differences among the three coal types measured in average CO2 emission rates per MWh support subcategorization by coal type. As shown in Table 1, the sampled lignite units have an average CO2 emission rate 13% above the sample mean, and 18% above the average for bituminous coal units. The average emission rate of bituminous units is 4% below the sample mean, while subbituminous coals have an average rate 3% above the sample mean.
These differences among coal types could justify subcategorization similar to EPA’s MATS rule. MATS provides separate mercury emission limits for low-BTU lignite coals compared with the standard set for bituminous and subbituminous coals (defined by EPA as coals with a heat content of 8,300 lbs. of CO2 per million BTU, or greater.) See, 77 Fed. Reg. 9,304, 9,379.
Illustrative emission rate calculations
The three sample coal groups were analyzed for average CO2/MWh emission rates by quintile (i.e., lowest 20% emitting units, next lowest 20% emitting units, etc.) Results of this subcategorization analysis are summarized in Table 1. Assigning the average emission rate in CO2/MWh for the best-performing 20% units of each group of units to the other four quintiles (an approach similar to that prescribed by Congress for section 112 “MACT” standards) reduces the allowed emission rates for each subgroup, and the indicated levels of CO2 emissions measured in tons.
The overall reduction of CO2 emissions for the three coal types is 117 million tons based on 2005 emission rates and tonnages. These data reflect NOx control retrofits in response to EPA’s 1998 NOx SIP Call, as well as scrubbers and other controls applied to meet CAA Title IV acid rain control limits. However, the data do not reflect additional retrofit control technologies added in response to the 2005 Clean Air Interstate Rule, as well as state laws and consent decrees. The additional parasitic load associated with add-on controls would increase average heat rates (BTUs per kWh) by reducing net plant generation and increasing CO2 emission rates per MWh.
Additional research and applications
Additional analyses using more recent data are needed to assess the CO2 emission effects of retrofit controls applied since 2005, including those deployed in response to the MATS rule. This research could include additional subcategorization analyses based on metrics such as boiler age, size, and type.
If subcategorization by coal type or other criteria were applied to determine standards of performance for existing fossil-based generating units, states should be provided with flexible implementation mechanisms such as emissions trading and averaging "outside the fence." This would ensure that emission reduction targets could be achieved in a cost-effective manner, without mandating unachievable or uneconomic emission limits for specific units.
The findings of this preliminary analysis are also relevant to the determination of New Source Performance Standards (NSPS) in light of the substantial CO2 emission rate differences among different coal types. EPA chose not to subcategorize by coal type in its NSPS rulemaking under Section 111(b), and issued a uniform performance standard for coal-based generation units of 1,400 lbs. CO2/MWh. Based on the sample unit data, meeting this standard implies a 42% reduction of CO2 emissions from lignite coals, and a 32% reduction for bituminous coals. Petitions for review of this standard also have been filed before the D.C. Circuit. North Dakota et al. v. EPA, DC Cir. No. 15-1381.
*The author is an attorney in private practice (email@example.com) who has specialized in Clean Air Act legislation and regulation since 1980. The coal quality and statistical regression data presented in this post were provided by the author to U.S. EPA staff in the pre-proposal stage of the development of the Clean Power Plan. The analysis set forth here is offered without prejudice to any legal positions by state or non-state petitioners before the D.C. Circuit in West Virginia et al. v. EPA or North Dakota, et al. v. EPA.
Table 1. Summary of CO2 Emission Rates and Potential Reductions by Coal Type for
272 Unit Sample (176,679 MW) Assuming All Units
Meet Top-20% Average Emission Rate of Each Coal Type
Avg. Lbs. CO2/MWh
Avg. Lbs. CO2/MWh Top 20% of Units
Pct. Diff. vs. 2005 Avg.
2005 CO2 Emissions (Mil. Tons)
CO2 Emissions @ Top-20% Rate
Chart 1. Regression Analysis of All 272 Coal Units,
Lbs. CO2/MWh vs. Heat Rate BTU/KWh
Posted on March 7, 2016
A recent BBC report about the enormous Aliso Canyon Gas Storage Facility gas well leak in California caught my eye. It compared the huge volume of methane emitted from this leak to other greenhouse gas sources, including tons of methane emitted by a large number of cows. Cows? A 2006 United Nations’ Food and Agricultural Organization report claims that the livestock sector, most of which is comprised of cattle, “generates more greenhouse gas emissions as measured in CO2 equivalent – 18 percent – than transport.” According to a Danish study, the average cow produces enough methane per year to do the same greenhouse damage as four tons of carbon dioxide. EPA’s Inventory of U.S. Greenhouse Gas Emissions and Sinks contains a statement that, on a global basis the Agriculture sector is the primary source of methane emissions.
This got me thinking about industries and lifestyles as yet largely untouched by the need to address global climate change. Agriculture, including ranching, may be a mainstay of the US economy but we can no longer ignore its impacts on the planet. It is not environmental elitism to require farting cows – a fertile source of humor - be given serious attention in the climate change debate.
Throughout the history of environmental regulatory legislation and enforcement in the United States, conventional agriculture has, by and large, been given a pass. For example, section 404 F of the Clean Water Act exempts from the requirement to obtain a permit the discharge of dredged or fill material into waters of the United States discharges from “normal farming … ranching activities”, from “construction or maintenance of farm or stock pond or irrigation ditches”, and, with some limitations, from construction of “farm roads”. In large commercial agricultural operations “normal” farming activities are of a large industrial scale. Non-point source runoff of pesticide and fertilizer residues from huge farming operations is largely ignored and where farming activities are regulated, such as storm water discharges from concentrated animal feeding operations, regulation is largely by general permits instead of individual permits. Spreading of manure on open fields is, by and large, unregulated. It took EPA nearly forty years to impose regulatory requirements to protect farm workers from exposure to herbicides and other pesticides used in large agricultural operations. Do we see a pattern here? Quite clearly the large commercial agricultural sector has enjoyed a not inconsiderable status of environmental regulatory laissez faire for a very long time.
This brings me back to the farting cows. Bovine source methane emissions are not presently regulated under the Clean Air Act. While cows are mobile, the Supreme Court clearly didn’t have livestock in mind when it addressed greenhouse gas emissions from mobile sources in Massachusetts v. EPA, and at present EPA is having great difficulty justifying regulation of even conventional stationary sources of greenhouse gasses. Nevertheless, if the governments that signed the recent Paris Accords remain serious about reducing the precursors of global warming it would seem that they, including the USA, must deal with the bovine methane problem. Quite clearly individual point source emission controls are not the answer to controlling the emission of methane from cows. Collecting the emissions under a roof for rooftop capture and treatment as has been advocated by environmental advocates is not only impractical given the nature of ranching in the US, but attempts to do so would pit environmental regulators against animal rights advocates who argue strenuously and effectively that sequestering animals in tight containments is inhumane treatment.
The only means of reducing this source of greenhouse gas is to reduce the global dependence on meat and cow milk as a primary source of protein in the human diet, that is, significantly reduce the global population of cattle. This will require a far more significant human cultural re-adaptation than will be required to reduce greenhouse gas emissions from transportation and industrial greenhouse gas sources. That being said, there is yet another reason why such a cultural change is necessary. There is simply not enough land on the planet to sustain a meat and cow milk consuming culture as we have now with even the current global population of humans. I don’t have enough space in this blog post to give you the numbers, but suffice it to say that beef and milk are among the most inefficient sources of protein in terms of the number of acres of land required to sustain a single cow. Sorry, all you lovers of good cheese and a great steak, it looks like you are part of the climate change equation.
Posted on March 2, 2016
This is a reposting – the earlier post incorrectly omitted Prof. Jody Freeman’s name as a co-author. Richard Lazarus is also a co-author.
State Reactions to the Stay
Now that the Supreme Court has stayed the Clean Power Plan, States are in the process of deciding whether or not to proceed with implementation planning, and if so, at what pace to do so. The situation is still in flux. States like Pennsylvania, Virginia, Washington State, California, and most of the northeastern states that are part of the Regional Greenhouse Gas Initiative, have all said they will continue planning. Others, like Texas, Kentucky and West Virginia, have declared they will stop. EPA’s official count shows eighteen States as having halted efforts, with nine still deciding, and thirty still working: http://www.eenews.net/interactive/clean_power_plan#planning_status_chart. Even official statements from the States are somewhat misleading, however: some States that have announced a suspension of compliance planning, like New Jersey, are still sending officials to compliance meetings.
Still, there is a risk that, on net, momentum will slow, at least until the legal challenge to the CPP is resolved. That process could take more than two years.
Maintaining Momentum Through “No Regrets” Policies
During that time, anything that can be done to maintain momentum on CPP implementation and related policies that will promote clean energy (regardless of whether the rule eventually is upheld) should be supported, with a priority given to helping States pursue “no regrets” policies that will serve their interests whatever the outcome of the litigation. There are a variety of things States and utilities can do now to address shorter term Clean Air Act obligations, such as regional haze, National Ambient Air Quality Standards, or cross-state air pollution, that also would set them up nicely for CPP compliance should the rule be upheld.
Implications of Justice Scalia’s death
The D.C. Circuit will hear argument on the CPP in June 2016, and is expected to rule on the merits expeditiously, likely by fall of 2016. The panel is viewed as more favorable toward EPA than not, although certainly not a sure thing: Judge Rogers is seen as the most sympathetic to EPA, Judge Srinivasan is seen as at least open to the government’s arguments, while Judge Henderson is seen as hostile to the rule.
If this panel were to uphold the rule, and the Supreme Court were to remain without a confirmed ninth Justice, it is possible that the Supreme Court could split 4-4, which would normally result in an order affirming the lower court decision. However, there is also a chance that if there were a 4-4 split in a case of this importance and one that would decide the issue once and for all, the Chief Justice would not be content to issue such an order and would instead hold the case over for re-hearing once a ninth Justice is confirmed. If that ninth Justice were appointed by a new Democratic president, the rule’s prospects of being upheld likely would increase; if appointed by a new Republican president, prospects could be the same as they would have been with Justice Scalia on the court. That would require Justice Kennedy, the likely swing vote, to be persuaded by the government to vote to uphold the rule.
There is another interesting wrinkle: the D.C. Circuit panel could change. Judge Srinivasan has been identified as a potential Supreme Court nominee. If he were nominated, he would likely withdraw from pending cases not yet argued in order to prepare for (theoretical) hearings. But then, of course, a new judge would be lotteried in to fill his place, perhaps changing the balance of the panel. One might think this risk worth taking, since Judge Srinivasan in theory would wind up on the Supreme Court, where he might cast the deciding vote in this (and many other) cases. Yet even if Judge Srinivasan were confirmed, he would be recused from the CPP case because of his earlier participation on the D.C. Circuit panel that denied the stay, so the Court would remain at eight Justices for purposes of this case. Again, this would leave the prospect of a 4-4 tie affirming the decision below (and perhaps affirming a decision to strike down the rule).
Next Steps and Timing of Litigation
Whatever the composition of the D.C. Circuit panel, however, and whatever it decides, the losing parties might seek en banc review in the D.C. Circuit. The State and industry challengers would be almost certain to do so, because delay favors their side. This is because the Supreme Court took the unusual step of staying the rule not just until the D.C. Circuit rules on the merits, but for longer: until the Supreme Court either denies certiorari or grants review and decides the case. Delay means the Stay remains in force, which means the deadline for filing compliance plans keeps being pushed off, which means momentum slows, which favors those opposed to the CPP. En banc review is rarely granted, however, and the D.C. Circuit may be reluctant to further delay things by providing it when the Supreme Court has already associated itself with the case (by granting the Stay and making it all but certain review will be granted).
What all of this means is that the earliest the Supreme Court could decide the case--given the time necessary for the cert petition, briefing, argument and deliberation--is likely to be June 2017, and the latest the Court is likely to decide the case is June 2018. That means the Stay could remain in place for more than two years.
The fate of the CPP is clearly in the hands of the Supreme Court, which, with an open seat, is clearly in the hands of the President--and most likely the next president.
Implications for a New Administration
If the Court ultimately upholds the rule, a new president could still withdraw it and replace it with something else, or choose to implement it as-is. A new president might even bargain with a new Congress over suspending the rule in exchange for a more comprehensive economy-wide approach to greenhouse gas regulation, whether a carbon tax or a cap-and-trade approach, or something else. And if the Court, newly constituted, strikes down the Clean Power Plan, a new president would have to decide on Plan B.
EPA has thus far been mum about possible Plan Bs, but obvious options include a narrower interpretation of “best system” that would regulate power plants within the so-called "fence-line" only, relying exclusively on what the rule refers to as "building block 1.” EPA might be able to set a fairly stringent standard based on this building block alone, although doing so might, ironically, leave utilities far less flexibility to use alternative means of compliance than they would have using the agency’s current approach. EPA might also examine the Clean Air Act for other provisions capable of regulating existing power plant emissions, such as section 115, or even set a NAAQS for greenhouse gases--options that have been discussed before and rejected by the agency, but which could always be revisited.
Posted on October 14, 2015
Many organizations have announced voluntary greenhouse gas emission reduction goals by which they aim to reduce their emissions of greenhouse gases despite the absence of any legal requirement to do so. Meeting these goals implicates the concept of additionality when the goals are to be met, in part, through off-site actions, such as the purchase of carbon offsets, retirement of renewable energy credits, or construction of off-site renewable energy projects. The concept of additionality seems simple: in principle, emission reductions attributable to an organization’s actions should only be recognized or “counted” if such reductions are more than what would have been achieved absent the action. Applying the concept of additionality in the real-world, however, is complicated. Perhaps unnecessarily so?
First, the “proof” of additionality required by many of the certifying bodies can be confusing and conflicting. For the faint of heart, the concern about proof discourages any action other than the purchase of “certified” paper offsets. A second, confounding problem results from the greening of the grid itself. Emissions have been falling for many organizations simply because the electricity they procure from the grid is becoming less carbon intensive. How to square these emission reductions with the concept of additionality leads one to question how the concept of additionality should be applied to voluntary emission reduction goals.
In the context of regulated organizations, the idea of additionality makes sense. Organizations that must comply with a regulatory scheme to reduce their emissions of greenhouse gases should not be allowed to claim credit for off-site actions if such actions do not, in fact, lower emissions beyond what they would have been absent the organization’s actions. No organization (regulated or unregulated) wants to waste money paying for off-site actions that do not in fact lower emissions. Establishing that a particular organization’s action will, in fact, lower emissions more than would have occurred absent that organization’s action turns out to be much more difficult than it at first appears given the multiplicity of variables that come into play: who else might be inclined to take the same action? When? For what reason? Is the action occurring in an area governed by a renewable portfolio standard or not? Many different criteria are used by regulatory agencies and voluntary verification programs. Three examples are helpful.
The California Air Resources Board treats emission reductions as “additional” if they exceed what would be required by law or regulation and if they exceed what would “otherwise occur in a conservative business-as-usual scenario.” 17 CCR § 95802(a)(4). The American College & University Presidents' Climate Commitment (“ACUPCC”) replaces “conservative business-as-usual” with “reasonable and realistic business-as-usual.” The Verified Carbon Standard adds a requirement that the reductions are additional only if they would not have occurred “but for” the offsite organization’s investment. These different definitions have real consequences for the types of offset projects (i.e., emission reductions) qualifying as “additional.” Energy efficiency projects at a school in an economically disadvantaged city might count as additional under ACUPCC’s definition because the schools are unlikely to undertake the energy efficiency measures themselves. In contrast, such measures are unlikely to count as additional under the Verified Carbon Standard definition because the schools would save money from the efficiency measures if undertaken by themselves.
For unsophisticated organizations with limited resources, using the most conservative criteria for additionality that have been developed by other parties, whether regulatory agencies or voluntary verification programs, makes sense – emission reductions are assured and at minimal transactional cost to the organization. For more sophisticated organizations with resources to experiment and innovate, strict adherence to conservative additionality criteria can be counterproductive. Many large municipalities, large research universities and corporations have the in-house capacity to invest in bold and innovative experiments and to assess whether a given project or investment is in fact reducing emissions. Organizations such as these could use their in-house talent and money to develop creative, bold, innovative and novel projects that could reduce emissions, but will they do so if such projects might fail a strict additionality test? At a university, such projects have the added benefit of complementing the core mission to teach, research, and demonstrate ideas that others beyond the university could leverage. Should an organization abstain from pursuing such projects simply because they would fail a strict additionality test, which the organization is not legally obligated to apply? Should we re-think the circumstances in which strict observance with additionality is necessary to avoid a public relations nightmare (i.e. being accused of not really meeting the voluntary goal)?
The application of additionality in the context of voluntary goals is also complicated by the fact that the electric grid itself is becoming greener. Most organizations include in their greenhouse gas emission calculation the emissions resulting from their electricity consumption. Many organizations first announced their voluntary emission reduction goals five to ten years ago when few predicted that the electric grid would become significantly greener so fast. Here in Massachusetts, largely because of the increased use of natural gas, the electric grid now emits 20% less carbon dioxide per MWh consumed than it did ten years ago. That means that an organization in Massachusetts that has not taken any action designed to reduce its emissions will nevertheless have lowered its emissions by consuming electricity from the local grid. Crediting such emission reductions towards a voluntary goal is in tension with the concept of additionality because the reductions occurred without the need for the organization to take any action designed to reduce its emissions.
Hence, the greening of the grid should cause an organization to re-think the nature of its voluntary emission reduction goal: is the goal simply an accounting objective that can be met by actions external to the organization, such as the greening of the grid by electric utilities, or is it a a bigger, perhaps even moral, commitment to undertake a minimum level of effort to reduce emissions in addition to those resulting from the greening of the grid? If the former, an organization committed to a voluntary goal can celebrate that the utilities have made its commitment cheaper to attain. If the latter, perhaps an organization should make its goal even more stringent to avoid taking credit for emission reductions achieved by others. Is this second approach more consistent with the concept of additionality? Should we applaud an organization that is not required by law to make any emission reductions but that purchases some carbon offsets and declares it has accomplished its voluntary goal of emission reductions? Should we applaud an organization that designs, invests in or otherwise makes an effort to create a project that actually achieves emission reductions even though it is possible that someone somewhere might also have the same idea and be willing to make the same investment?
I do not pretend to have the answers to these questions. But, I do know that many organizations that have set voluntary goals are grappling with these questions now, and others will face them in the future. I welcome your comments.
Posted on September 29, 2015
My wife and I are 6 months into an 18-month adventure in South America. Although we are roaming around a bit, most of our time is spent in Santiago, Chile, a city of 5 million nestled in a valley between the Andes to the east and coastal mountains to the west. Santiago is a modern city, with a highly educated population. It has lots of cars and lots of wood-burning fireplaces and stoves and the typical assortment of manufacturing and power generation facilities for a city of its size. In the winter, high pressure settles in over the valley and the fine particulate pollution builds up, creating serious public health emergencies in which driving is restricted, industrial activities are curtailed, and people are urged not to engage in strenuous activities outside.
In a sense I feel right at home, because along Utah´s Wasatch Front, winter inversions trap emissions from cars and wood burning to create grungy, unhealthy spikes in PM2.5 for days or even weeks at a time much like Santiago. In Utah the issue is addressed through the Clean Air Act, with Salt Lake City and the associated metropolitan areas designated as non-attainment areas for the short-term national ambient air quality standards for fine particulate matter and a comprehensive State Implementation Plan (SIP) developed by the Utah Department of Environmental Quality with thorough stakeholder involvement.
At the beginning of the SIP process, most of the public blamed the relatively few but highly visible industrial facilities (the refineries, the big Kennecott operations, etc.) as the principal culprits. However, as the stakeholder process evolved, public awareness shifted dramatically, with most Utahns now acknowledging that vehicle use and the aggregate effect of individual small sources are major contributors to the problem, and that individual personal choices with regard to vehicle use and lifestyle habits will be key to improving the wintertime air quality.
In Chile, the legal requirements to address winter inversion pollution are just as sophisticated and detailed as those under the U.S. Clean Air Act. The government has identified pretty much the same causes of the pollution as in Utah, i.e., cars, wood-burning, a variety of small businesses, and some but not many larger manufacturing sources. Also, Chilean law specifies a rulemaking process analogous to that in the U.S., with scientific studies, technical and economic analyses, and stakeholder consultation before finalizing an environmental rule. As a result, as in Utah, there is more public awareness in Chile of the role that individual choices play in environmental degradation which in turn leads to more of a shared sense of responsibility for dealing with it.
However, in my conversations with South American environmental lawyers outside of Chile about the legal systems for addressing environmental issues, I have found that they are not so much concerned about the substantive requirements on the books – those are not much different than those in the U.S. – but rather, are concerned that there are not always well-developed mechanisms for participation by the affected stakeholders in the development of environmental requirements.
ACOEL is reaching out to entities around the world to make available the considerable expertise of its members to address environmental challenges. In Latin America, ACOEL can play an important role in helping develop robust participatory processes which will yield great benefits in the development and enforcement of environmental requirements and the broader strengthening of participatory democratic institutions in this part of the world.
Posted on August 10, 2015
Last year I published an article in Bloomberg BNA entitled “Protection of Judicial Review Watered Down in D.C. Circuit.” I focused on a recent D.C. Circuit ruling (UARG) I hoped would “turn out to be an unfollowed – and eventually forgotten – glitch.” The effect of the “glitch” is to delay interminably judicial review of final Clean Air Act (“CAA”) rule provisions that EPA never hinted might be included in a final rule – even though the un-foreshadowed provisions go into full force and effect.
The Court’s judges must have missed that BNA edition, because they have followed the same rationale at least twice more now – in their Mexichem opinion of May, 2015 and their “Transport Rule” (EME Homer) decision last week.
This regrettable situation arises from the Court’s new interpretation of a CAA provision (§307(d)(7)(B)) which is quoted in full in my BNA article. It begins with the hornbook proposition that you can’t attack a rule’s provision on judicial review on grounds that were not raised during the comment period. It then provides for a process known as a “petition for reconsideration.” If a party can show that it could not have raised an argument during the comment period, EPA must conduct a “reconsideration” process. EPA’s actions in response to the petition are then subject to judicial review. This provision has often been used where EPA supports a final rule with facts or rationale not included in the record when the public comment period was open.
Now consider the following hypothetical. Assume EPA proposes a CAA rule requiring boilers to install a certain type of control device. EPA’s final rule drops the control requirement and simply prohibits boilers from combusting coal, effective two years from the final rule’s issuance. EPA’s proposal never mentioned coal prohibition as an option, and no one suggested it in their comments. So most would assume that boiler owners could then file D.C. Circuit petitions for review and have slam-dunk arguments for vacatur.
As shown in my BNA article, the D.C. Circuit has on many occasions (as recently as December, 2013) done just that. But since then, EPA and DOJ lawyers have advanced what I think is a ludicrous position: when a party believes a final CAA rule provision was issued in violation of notice-and-comment requirements, it cannot pursue judicial review on that issue unless and until it first files a petition under §307(d)(7)(B) and waits for EPA to take final action on that petition.
Unfortunately, the D.C. Circuit has bought this position three times now. Here is how the D.C. Circuit summarized the point in EME Homer last week:
[P]etitioners argue that EPA violated the Clean Air Act’s notice and comment requirements by significantly amending the Rule between the proposed and final versions without providing additional opportunity for notice and comment. Because that argument is an objection to the notice and comment process itself, petitioners obviously did not and could not have raised it during the period for public comment. Under Subsection 7607(d)(7)(B), however, the only appropriate path for petitioners to raise this issue is through an initial petition for reconsideration to EPA.
Note the opinion in effect concedes just how absurd this is. The petitioners “obviously did not and could not” have raised this objection. How can one object to EPA’s failure to propose something that EPA failed to propose?
EPA almost always delays action on §307(d)(7)(B) petitions for years so in the hypothetical above, the coal prohibition would go into effect before judicial review could even begin. Boiler owners would either have to shut down operations or convert to non-coal burning facilities, at which point judicial review would become pointless. The effect: EPA stops coal burning at boilers by declining to propose such a requirement in the first place!
If you think EPA or the D.C. Circuit would out of fairness suspend application of rules in such situations, see the examples to the contrary in my BNA article and read the Mexichem opinion. If you think I am exaggerating about how long it takes for a §307(d)(7)(B) petition to be processed, see the examples in my BNA article. And consider that in last week’s EME Homer opinion, the Court concluded its discussion above by noting that at least one party had filed such a petition but that EPA had not yet acted upon it. That petition was filed in 2011.
Posted on August 3, 2015
In the latest chapter of Homer’s Odyssey, the DC Circuit, on remand from the Supreme Court, determined that EPA had exceeded its statutory authority by imposing uniform emissions reductions under the Transport Rule also known as the Cross-State Air Pollution Rule. On July 28, 2015, the DC Circuit held in EME Homer City Generation, L.P v. EPA that the 2014 sulfur dioxide (SO2) emissions budgets for Alabama, Georgia, South Carolina, and Texas, as well as the 2014 ozone-season nitrogen oxide (NOx) budgets for Florida, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia are invalid. The court remanded without vacatur to EPA for reconsideration.
A brief history of Homer’s voyage so far.
In 2011, EPA promulgated the Transport Rule to address emissions from upwind States that contribute to nonattainment of National Ambient Air Quality Standards (NAAQS) in a downwind State under the Clean Air Act’s “good neighbor provision”. 42 U.S.C. Sec. 7410(a)(2)(D)(i). Upwind States challenged the Rule, contending that it would lead to over-control of emissions in the upwind States. The Rule imposed uniform pollution reductions on upwind States regardless of the actual amount of pollution that individual upwind States contributed to the downwind States.
In 2012, the DC Circuit considered these over-control challenges, agreed with the petitioners, and vacated the Rule. See EME Homer City Generation, L.P. v. EPA, 696 F/3d 7 (D.C. Cir. 2012).
On review, the Supreme Court reversed, holding that the potential for over-control did not require invalidation of the Rule on its face. To address potential over-control in an upwind State, the Court recognized that requiring emissions reductions by more than is necessary to achieve attainment in every downwind State to which it is linked would be impermissible. The Court explicitly authorized an upwind State to contest the emissions reductions under the Rule through “particularized, as-applied challenges.” EPA v. EME Homer City Generation, L.P., 134 S.Ct. 1584 (2014).
On remand, the DC Circuit considered the “as-applied challenges” as informed by the Supreme Court decision. The DC Circuit evaluated the challenges by determining whether a downwind location would still attain its NAAQS if linked upwind States were subject to less stringent emissions limits. Based on the record, the Court determined that EPA’s uniform cost thresholds have required States to reduce pollutants beyond the point necessary to achieve downwind attainment, which violated the Supreme Court’s clear mandate.
Although invalidating the 2014 emissions budgets, the DC Circuit remanded without vacatur. The Court stated that on remand, the parties may provide new evidence, data, or calculations for EPA to consider in establishing emissions budgets.
What will be the next chapter in this Odyssey? What effect will the decision have on the emissions trading market developed around the 2014 emissions budget? Will there be further appeals? How and when will EPA reconsider the emissions budgets?
The voyage is not over!
Posted on July 13, 2015
The Supreme Court’s latest opinion in an environmental rule challenge, this to the Mercury and Air Toxics Standard, or MATS, raises more questions than it answers. As discussed on this blog site (see here, here and here,) the Court in Michigan v. EPA held that EPA had not reasonably considered costs when determining to regulate power plant mercury emissions. EPA must factor cost into its initial determination that it is “appropriate and necessary” to regulate hazardous pollutants from power plants. The Court passed no judgment on whether EPA can meet that burden.
At the heart of the issue was Congress’ acknowledgement that the 1990 Clean Air Act Amendments would subject power plants to numerous controls to reduce sulfur dioxide, nitrogen oxides, and particulates. Section 112 of the Act requires EPA to regulate power plants if “regulation is appropriate and necessary after considering the results of the study.” Congress further acknowledged that these measures also might reduce hazardous air pollutants, and that no one knew at the time whether additional controls would be required to protect human health from air toxics emitted by power plants.
To determine that, EPA was required to conduct a study. In 1998, EPA’s study concluded that regulation of coal and oil fired power plants was “appropriate and necessary.” EPA reaffirmed this finding in 2012, noting that mercury and other hazardous air pollutants were “appropriate” to regulate because they posed a risk to human health and the environment and that controls were available to reduce the pollutants. EPA found that it was “necessary” to regulate because other pollutant emission limits and requirements did not eliminate the risks.
The Court, in a 5-4 decision written by Justice Scalia, analyzed EPA’s action through the Chevron deference standard, determining that “EPA strayed far beyond those bounds when it read §7412(n)(1) to mean that it could ignore cost when deciding whether to regulate power plants.” Ultimately, the Court held that “Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not license interpretive gerrymanders under which an agency keeps parts of statutory context it likes while throwing away parts it does not.” Id. at 9.
The Court went on to reject EPA’s contention that it need not factor cost into its initial determination to regulate because the agency must take cost into consideration when later determining how much to regulate. The Court colorfully remarked that: “By EPA’s logic, someone could decide whether it is ‘appropriate’ to buy a Ferrari without thinking about cost, because he plans to think about cost later when deciding whether to upgrade the sound system.” The Court’s strong language cautioning EPA to use “reasoned decision making” and not “gerrymander” statutory requirements should give EPA pause as it is set to promulgate greenhouse gas reduction measures for power plants in its Clean Power Plan this summer. Numerous comments filed in the so-called Clean Power Plan rulemaking docket have charged EPA with overstepping its statutory boundaries, and the Court seems to be signaling its disfavor of such action.
Since the decision, speculation as to whether and how EPA will fix MATS has been rampant.
- Will EPA abandon MATS completely, requesting vacatur? Not likely. In public remarks and testimony before a Congressional subcommittee during the week of July 6, Administrator Gina McCarthy cited the health benefits already achieved by the rule, indicating the agency would not back down.
- Can EPA fix the rule based on the current administrative record? Some believe that EPA can simply re-jigger its existing analysis and logic, fronting the cost issue in the “appropriate and necessary” finding, perhaps calling this a “technical amendment” to the rule.
- Will EPA seek a stay of the existing rule while it recalculates costs and re-proposes the rule? Because the rule went into effect in April 2015, companies already have installed a range of controls from activated carbon injection to installation of flue gas desulfurization equipment. Each type of control has costs and benefits, as well as impact on other pollutants. Many of these controls may remain operational to comply with other CAA requirements; therefore, a stay may have disproportionate impacts on industry members as some cease to operate controls and others continue to operate them.
- But could EPA’s re-proposal result in even more stringent emission limits? Absolutely. Would EPA be wise to lower the standards further? Given the cost and disruption caused by MATS so far, absolutely not.
- And how will any of these possibilities affect the “already regulated” argument that will be used to attack the Clean Power Plan? Section 111(d), the basis for the Clean Power Plan, prohibits regulation (whether of the source or the pollutant remains to be decided) if a Section 112 standard exists. So if MATS goes away, does the legal basis for the Clean Power Plan become stronger?
How the ongoing, never-ending EPA effort to achieve hazardous pollutant reductions from power plants will play out remains to be seen. The Supreme Court’s close reading of the directives contained in the statute, coupled with its references to balanced costs and benefits, leaves the impression that any rule with wide reach better be well-reasoned and justified. No doubt EPA is taking notice.
Posted on July 8, 2015
Twenty-five years in the making, the Environmental Protection Agency’s regulations to reduce emissions of mercury and other hazardous air pollutants (HAPS) from power plants recently ran aground in the Supreme Court. As discussed in this blog site last week, (see here and here,) the majority opinion by Justice Scalia in Michigan v. EPAheld that EPA erred in failing to consider cost when it made the threshold statutory finding that listing of power plants for regulation was “appropriate” under a special provision for power plants in the hazardous pollutant sections of the Clean Air Act.
The dissenters, in an opinion by Justice Kagan, disagreed that costs had to be considered at the initial listing stage. She contended that costs were properly addressed when specific standards and requirements were developed for various source categories in the course of the normal rulemaking process, and emphasized that a final cost-benefit analysis was conducted to evaluate and support the decisions made.
Although Justice Scalia was at pains to say that the Court was not specifying the details of the cost analysis required, the majority was plainly troubled by the agency’s findings that the benefits of the mercury controls alone were valued at an annual value of only $4-6 million compared to an annual cost of $9.6 billion. However, mercury was not the only HAP controlled by the rule, and the co-benefits of incidental removal of other toxic fine particulate pollutants were estimated at $36-90 billion in EPA’s cost-benefit analysis. Those big numbers reflect robust scientific evidence of the incidence of illness and death caused by particulate emissions.
The majority did not address whether such co-benefits could be relied upon in a determination that the cost of the power plant rules was “appropriate.“ The D.C. Circuit will have to define the terms of EPA’s redo of the cost analysis. We are likely to hear more about counting of co-benefits in cost benefit comparisons, an issue also presented in EPA’s proposed Clean Power Rule for power plant greenhouse gas emissions. Reducing carbon emissions also reduces particulate emissions even more, and the monetized benefits of that effect exceed the harder to estimate benefits achieved in slowing global warming.
Public Health and Environmental Consequences of the Decision
Despite the Supreme Court’s action, commentators on both sides of the issues agree that major benefits of the regulation will not be lost. A trade publication estimated in May that half of the power plants subject to the rule have already installed the required emission control technology to meet multiple EPA air pollution rules, in addition to the hazardous pollutant rule. Another 200 plants given an extra year to comply are installing and testing equipment. Several dozen plants accounting for only 1% of industry capacity reportedly are the remaining uncontrolled sources that will continue to operate without controls or plans to install them until the Michigan case is concluded.
Many companies that have complied with the rules are doubtless disappointed to see the perennial “free riders” get another reprieve; some intervened on EPA’s side in the Michigan case to complain about unfair competition from uncontrolled plants. But the majority of power plants, to their credit, are already delivering the public health and environmental benefits of the rule for the community.
Citizens unhappy with the continuing failure to regulate old coal plants may wish to support the divestment movement, recently joined by Georgetown University, in dumping coal company securities. The day Michigan v. EPA was decided, the stock of three major coal producers rose about 10%. If the price jump holds, now looks like a good time to sell.