Posted on September 20, 2016
Sometimes the most extraordinary things in the world of law and government get served up in the most undramatic way. If you aren’t paying attention to the back story, and you don’t know the context, you might almost miss the action. And future generations, seeking to decipher history, might all too easily overlook the most crucial and delicate tipping points. This fact of life has been emphatically proven by the Pulitzer Prize-winning cultural juggernaut that is the Broadway musical Hamilton, by Lin-Manuel Miranda. In addition to telling the very personal story of one of our nation’s founding fathers, Hamilton shows, in brilliant style, that even seemingly dry and technical matters such as the origins of our nation’s financial system, and the logic underlying the complex apparatus of modern administrative agencies, are actually fueled by passion, dripping with drama, and world-changing in consequence. You just need to know whose story to tell, and how to read between the lines.
A recent case in point: On August 17, 2016, the Massachusetts Supreme Judicial Court issued its decision in Engie Gas & LNG LLC v. Department of Public Utilities (Docket SJC-12051/SJC-12052). Environmental and energy lawyers readily recognized the decision as an important one, but it’s easy to see how future generations, far from the current action, might miss the excitement here. The question in Engie was whether the state utility department could approve ratepayer-backed, long-term contracts by electric distribution companies for the purchase and resale of interstate natural gas pipeline transportation capacity.
To answer that question, the Engie court addressed, among other things, (1) the propriety of the appeal in the absence of a final adjudicatory order; (2) the pertinent standard of review, (3) the canon of statutory construction reddenda singula singulis, a.k.a. the rule of the last antecedent (which might also be merely a grammar rule), (4) whether ambiguity should or could be found in statutory language that neither expressly forbids nor clearly permits the proposed departmental action, (5) the parties’ competing interpretations of the legislative history, (6) the overall statutory framework, (7) the necessity of a “distributive reading” of the terms “gas or electric,” (8) the limitations of the deference to be afforded to an agency’s reasonable interpretation of a statute it is charged with enforcing, where the interpretation represents a significant departure from the agency’s own record of administering the pertinent statute, (9) the importance of ensuring consistency with the fundamental policy embodied in the legislation at issue, and (10) the interpretive pertinence of subsequent, separate legislation. Phew!
Ultimately, the SJC rejected the utility department’s determination of the scope of its authority, and concluded that the pertinent statute forbade the imposition on electricity ratepayers of the costs of new natural gas supply infrastructure. Like many judicial opinions concerning complex environmental and energy issues, the Engie decision has a sober logic that makes it seem unsurprising, correct, and even almost easy. But wait – what just happened here?
Ladies and gentlemen, we have an affair of honor! One dueling party and its seconds, the state’s public utility department and electric distribution companies, contend that the policy choice by our state government’s executive branch to expand natural gas pipeline capacity is a sensible way of meeting our very real need for reliable electrical power. Even as we move toward a more sustainable future of renewable energy, they say, we still depend urgently on new supplies of natural gas, obtained by means of fracking, to provide the essential “bridge” fuel, and we can all get ready for price spikes and power blackouts each winter if we ignore that reality. It’s an emergency, and our future is at stake!
The other dueling party and its seconds, who include the Massachusetts Attorney General and a coalition of environmentalists, land conservationists, and consumer and taxpayer advocates, insist that we don’t need any new natural gas infrastructure at all. And if we don’t push much faster and harder for a larger-scale shift to more environmentally sustainable ways to support our energy consumption, they say, we are fiddling while Rome burns. It’s an emergency, and our future is at stake!
Grappling with the fine points of utility infrastructure regulation and financing may make some people’s eyes glaze over. To which I say, are you kidding? I can’t think of another moment when our courts were faced with environmental and energy law disputes more laden with tension and drama. This is the high-stakes, heroic, dueling-on-the-ledge stuff on which our future history depends. It could practically be a Broadway musical.
Posted on September 8, 2016
Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead. In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants from such redefinition of the source. However, other types of facilities will get no comfort from the decision.
Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills. Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.
Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas. The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste. This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:
"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."
Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases. It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection. If a coal plant intends to burn coal from the mine next door, ok. If a lumber mill intends to burn its own wood waste, ok. Otherwise, however, all bets are off.
What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued. Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.
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 29, 2016
Perhaps not many, at least not in Oregon, would mourn the failure of a liquefied natural gas terminal and associated gas pipeline project. As counsel for over a decade to the Oregon LNG project at the mouth of the Columbia River, I mourn less for the failure of the project than the process. I am confident that if the standards-based approval process had been allowed to play out, we would have satisfied all federal and state permitting criteria. But, alas, we never got that opportunity.
The Natural Gas Act, as amended in 2005, confers upon the Federal Energy Regulatory Commission exclusive authority over the siting of LNG export terminals and interstate pipelines. The NGA, however, preserves authority delegated to the states by the Clean Water Act, Clean Air Act, and Coastal Zone Management Act. The problem is that Oregon law requires state agencies to first receive affirmation from local governments of compatibility with land use regulations before issuing a state permit.
Other states have similar laws and have attempted to use them to halt or impede LNG projects, only to have Courts of Appeals for the D.C., First and Fourth Circuits reject the incorporation of local land use planning into state processes as preempted by the NGA. But the conflict with state law sets up an unnecessary confrontation, adding expense and delay that can prove fatal to a project under development, as it was here.
The Oregon LNG project, aware of the federal preemption argument, nonetheless filed land use applications at the City of Warrenton for the terminal, and at Clatsop County for the pipeline. The project filed the applications to demonstrate a desire to comply with all applicable regulations, confident in its ability to do so. In fact, an independent hearings officer, following an evidentiary hearing, concluded the project met all County criteria. Following approval by the County Commission, and, while an appeal by opponents was pending, an election occurred. An anti-LNG slate was elected to the Board of Commissioners, and the newly constituted County Commission promptly reversed course. And there’s the rub: the criteria had not changed, only the elected officials passing judgment. Thus, local land use compatibility statements were not to be had, rendering the state permitting process impossible to complete.
This is not a screed against the multitude of state or federal agencies reviewing our various, complex permit applications. To be sure, the agencies felt the political pressure brought by opponents, which caused them to be cautious and deliberate (perhaps too deliberate) and thus slow moving. Nor is this to suggest that local governments and sentiment should have no role in siting energy projects that affect their communities. Of course they should.
The real problem, however, is the total deference given under Oregon law to local land use regulations, even when the local land use decision is so blatantly political, thus creating a legal basis for NIMBY-ism. In our case, this deference essentially gave veto authority to the Clatsop County Board of Commissioners, which cannot have been the intent of Congress or the state legislature. Otherwise, how would any infrastructure project of national importance ever be constructed—highways, power plants, transmission lines, fiber optic cables, telephone lines, railroads, bridges, or dams—if locals could block it through a land use resolution?
Posted on July 21, 2016
On December 12, 2015, in Paris, France, the parties to the U.N. Framework Convention on Climate Change—a total of 196 countries—unanimously agreed to a goal of net zero greenhouse gas emissions by the second half of this century. For the United States, the technical and logistical challenge of achieving the goal of the Paris Agreement (as it is called) is enormous, but so is the legal challenge.
The U.S. short-term emissions reduction objective, stated in a submission made in the run-up to the Paris conference, is “to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%–28% below its 2005 level in 2025.” This objective, the U.S. says, “is consistent with a straight line emission reduction pathway from 2020 to deep, economy-wide emission reductions of 80% or more by 2050.” Achieving the short-term goal depends on the outcome of the presidential election as well as litigation involving the Clean Power Plan. And there was, until recently, no roadmap for deep U.S. reductions by 2050.
The absence of long-term analysis, in the U.S. and other countries, is being filled by the Deep Decarbonization Pathways Project, which is led by the Sustainable Development Solutions Network and the Institute for Sustainable Development and International Relations. It is based on the work of research teams in 16 countries that are responsible for 74 percent of the world’s greenhouse gas emissions--Australia, Brazil, Canada, China, France, Germany India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the United Kingdom, and the United States. DDPP says in a report synthesizing the findings of the project to date that most of these countries “had never developed pathways consistent with a global 2°C limit, nor were they actively considering this question.” (The purpose of the Climate Change Convention is to keep the increase in global temperatures from human-caused greenhouse gas emissions below a “dangerous” level. That level is widely regarded as 2°C, or 3.6 °F, above pre-industrial levels, although the Paris Agreement seeks to keep the increase “well below” that level. The temperature increase to date is already about 0.9 °C above 1880 levels, when temperatures were first recorded.)
DDPP has conducted a technical analysis and policy analysis of pathways to deep decarbonization for the United States. These reports, prepared by E3 (an energy consulting firm), the Lawrence Berkeley National Laboratory, and the Pacific Northwest National Laboratory, appear to be the most detailed studies of how to achieve deep reductions in U.S. greenhouse gas emissions by 2050.
Perhaps the DDPP’s most important finding “is that it is technically feasible for the U.S. to reduce [carbon dioxide] emissions from fossil fuel combustion” by 85% from 1990 levels by 2050, which is “an order of magnitude decrease in per capita emissions compared to 2010.” If the U.S. did that, it could reduce its overall greenhouse gas emissions by 80% below 1990 levels by 2050.
Enormous changes would be required in the U.S. energy system to make those reductions happen. Because it is difficult to decarbonize gasoline and liquid fuels, the researchers said, meeting the 2050 objective would require almost complete decarbonization of electricity and, among other things, switching a “large share” of end uses that require gasoline and liquid fuels over to electricity (such as electric cars). It would also be necessary to produce fuel from electricity itself, they said, citing the production of hydrogen from hydrolysis as an example.
Decarbonizing electricity and producing fuel from electricity itself would double electricity generation but reduce its carbon intensity to 3% to 10% of current levels, requiring a vast increase in either renewable energy (as much as “2,500 gigawatts (GW) of wind and solar generation (30 times present capacity))” or carbon capture and sequestration. The average fuel economy for light duty vehicles such as cars would need to be over 100 miles per gallon, and these vehicles would need to be fueled almost entirely by electricity and hydrogen.
The challenge of translating these technical and policy pathways into a workable legal framework is considerable. Assuming, for example, that the U.S. can achieve 54.5 miles per gallon as a fleet-wide average for new vehicles by 2025, as the current Corporate Average Fuel Economy standard requires, how does the U.S. achieve a fleet-wide average of more than 100 miles per gallon for all vehicles by 2050? As DDPP explains, “[t]his would require the deployment of roughly 300 million alternative fuel vehicles by 2050.” A similar conundrum exists in reliance on renewable energy sources: what legal changes are needed to guide the development of the grid so that it can continue to be reliable while it accommodates a vast increase in intermittent electricity sources such as solar and wind energy?
Michael Gerrard, who directs the Sabin Center for Climate Change Law at Columbia Law School, and I have begun work on an edited volume that will identify and analyze a wide variety of legal pathways to decarbonization in the United States, based on these reports. We have assembled an excellent team of legal scholars and practitioners and are aiming for publication in 2017. We hope to inspire similar efforts in other countries.
An essential part of the decarbonization challenge is proposing, analyzing, and comparing various legal decarbonization pathways in each individual country, including the U.S. In the face of a daunting challenge, there exists a real possibility that lawyers can help improve human quality of life throughout the world by facilitating the creation of a legal framework that accommodates zero-carbon development.
Posted on July 13, 2016
The U.S. Court of Appeals for the District of Columbia Circuit on July 5 issued a ruling that the federal government violated the Endangered Species Act and the Administrative Procedure Act in approving the long-running, oft-litigated Cape Wind offshore wind project proposed to be built off the Massachusetts coast. Senior Judge Randolph, writing for an unanimous panel, confirmed the District Court’s rejections of a number of the claims advanced by Plaintiffs (who included the Public Employees for Environmental Responsibility, the Town of Barnstable, and the Alliance to Protect Nantucket Sound), but reversed the District Court on two key points.
The proposed Cape Wind project, which has been the subject of voluminous news coverage and many court cases for well over a decade, sought to construct 130 3.6 MW turbines in shallow waters near Nantucket. Challenges have included scenic impacts; Native American concerns that the project would will block their sunrise views across the sound, disturb ancestral burial grounds, and perhaps disturb cultural relics; and issuance of submerged land leases required by the project. Financial hurdles seemed to put the project into a death spiral two years ago, but quietly the project developers have continued legal fights to defend the permits and approvals previously issued. They have largely been successful—until this month.
Early on, biologists with the U.S. Fish and Wildlife Service (“FWS”) had recommended that the wind turbines be shut off during limited periods of highest risk to two birds listed under the Endangered Species Act-- the piping plover and roseate tern. However, the FWS ultimately rejected that conservation measure on the grounds that it would impair the financial feasibility of the project. The Court of Appeals held that the FWS’s action was arbitrary and capricious. The Court further held that the project cannot proceed without compliance with the Migratory Bird Treaty Act and without further analysis of environmental impacts pursuant to the National Environmental Policy Act.
In conclusion, the Court stated: “We reverse the district court’s judgment that the Bureau’s environmental impact statement complied with NEPA and that the Service’s incidental take statement complied with the Endangered Species Act, and we vacate both statements.” A copy of the ruling is here.
Posted on July 11, 2016
In companion cases, on June 28 the DC Circuit Court of Appeals held that the Federal Energy Regulatory Commission, in its environmental impacts analysis of two Gulf Coast LNG terminals, need not assess the potential for increased natural gas extraction and use, or market effects. The first case deals with the Freeportproject in Texas, and the second the Sabine Passproject in Louisiana; the court considered these cases in parallel with each other, and the Sabine Pass case follows the reasoning in the Freeport case.
The Sierra Club and other national NGOs have attacked LNG facilities (1) for their potential to cause an increase in fracking to extract natural gas and the attendant emission of greenhouse gases, and (2) for increasing the use of U.S.- produced natural gas in world markets, which they assert will drive up the price of natural gas domestically, thus making coal more competitive and its use more prevalent in the U.S. On this basis the Freeport and Sabine Pass plaintiffs argued that FERC’s failure to consider these potential effects violates the National Environmental Policy Act. The court disagreed, finding that these effects are too attenuated for FERC to have to evaluate.
Central to the cases is the fact that the Natural Gas Act confers exclusive authority over the export of natural gason the Department of Energy, whereas FERC is only responsible for the siting of LNG facilities. The court reasoned that FERC’s approval of LNG facilities are not the proximate cause of gas exports, which only DOE can approve. Therefore, FERC need not consider environmental impacts related to market forces that could increase domestic production of gas and the use of gas outside of the United States.
These same projects face challenges brought by the same NGOs against DOE in which the issue is whether DOE complied with NEPA in authorizing exports of LNG. The Freeport and Sabine Pass courts “express no opinion” on the merits of the DOE cases. Still, it seems that the relationship between export approvals and operation of global gas markets is at least as attenuated as FERC’s authorization to construct facilities. My sense is that DOE will likely prevail there as well.
Posted on June 17, 2016
If you needed any further proof that energylaw is very complicated, Wednesday’s decision in North Dakota v. Heydinger should convince you. The judgment is simple – the 8th Circuit Court of Appeals struck down a Minnesota statute which provides in part that:
"no person shall . . . (2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions; or (3) enter into a new long-term power purchase agreement that would increase statewide power sector carbon dioxide emissions."
Why, you ask?
- The panel opinion, by Judge Loken, stated that the Minnesota statute violates the dormant Commerce Clause, by regulating purely “extraterritorial” economic activity.
- Judge Murphy, in the first concurrence, disagreed with Judge Loken’s conclusion that the statute violates the dormant Commerce Clause, but joined the judgment, because she concluded that the statute is preempted by the Federal Power Act.
- Judge Colloton, in the second concurrence, agreed with Judge Murphy that the statute does not violate the dormant clause, but also concurred in the judgment. Judge Colloton concluded that, to the extent that the “statute bans wholesale sales of electric energy in interstate commerce,” it is preempted by the Federal Power Act. However, Judge Colloton wrote separately, because he at least partially disagrees with Judge Murphy (as well as with Judge Loken) and does not believe that the Minnesota statute constitutes a complete ban on wholesale sales of energy that increase CO2 emissions. However, Judge Colloton concluded that, to the extent that the statute is not preempted by the Federal Power Act, it is preempted by the Clean Air Act.
Is that sufficiently clear?
I do feel compelled to add two final notes. First, I don’t understand why Judge Loken wrote the panel opinion, when his rationale did not command a majority. Indeed, as Judge Colloton pointed out, the Court should not even have reached the constitutional issue, since a panel majority existed that was prepared to strike down the Minnesota statute on statutory grounds. (Preemption is considered a statutory, not a constitutional, rationale.)
Second, don’t analogize the electric energy transmission to the flow of water in a pipe, at least before Judge Murphy. Here’s your electricity and magnetism primer for the day, courtesy of the Judge.
"In the electricity transmission system, individual electrons do not actually “flow” in the same sense as water in a pipe. Rather, the electrons oscillate in place, and it is electric energy which is transmitted through the propagation of an electromagnetic wave.
Certainly brought me back to course 8.02 at MIT. Not one of my favorites.
Posted on May 17, 2016
On April 20, 2016, the U.S. Senate passed S.2012, the Energy Policy Modernization Act of 2015, by a vote of 85-12. If enacted, S.2012 would be the first comprehensive energy legislation since the Energy Independence and Security Act of 2007. This bipartisan bill is intended to expand domestic energy systems, facilitate investment into critical infrastructure and improve the performance of federal agencies while protecting the environment.
S.2012 contains two notable provisions that would impact domestic oil and natural gas production and infrastructure development. First, the Act would designate the Federal Energy Regulatory Commission (“FERC”) as the lead agency responsible for coordinating all applicable federal authorizations and National Environmental Policy Act (“NEPA”) review for proposed natural gas projects and facilities. According to the Act, once FERC determines that an application for a project or facility is complete, all required federal authorizations must be issued within the timeframe specified by FERC, which “should” not exceed 90 days. The provision would likely speed the federal approval of interstate pipeline and liquefied natural gas (“LNG”) projects.
Second, the Act creates a Bureau of Land Management (“BLM”) pilot program that would allow operators to lease and develop certain mineral interests owned by the federal government without a federal drilling permit. Specifically, the pilot program would include 2,000 spacing units in which the federal government owns 25% or less of the mineral interests and none of the surface estate. BLM would be authorized to waive the requirement that operators obtain a federal drilling permit for the spacing units if BLM determines that the mineral interests are adequately protected by the lease terms or other laws and regulations. The proposed pilot program may lead to permanent programs that ease the restrictions on exploration and production activities affecting mineral interests in which the federal government owns only a minority share.
The White House has previously threatened to veto legislation aimed at speeding the federal authorizations necessary to construct LNG facilities and pipelines. However, no such veto statement has been issued with respect to S.2012. This legislation may not face opposition from the White House because it was developed after numerous listening sessions were held with stakeholders across the country and after weeks of negotiations by many senators seeking common ground for modernizing energy policy. Senator Murkowski (R-Alaska), Chairman of the U.S. Senate Committee on Energy and Natural Resources, stated that she expects a formal conference with the U.S. House Energy and Commerce Committee to merge the Senate and House bills, but no timeline for a meeting has been established.
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 February 24, 2016
The Department of the Interior’s Bureau of Indian Affairs (BIA) has promulgated new regulations involving the original procurement and renewal of Right-of-Ways (ROW) on tribal and allottee lands which take effect on March 22, 2016. These new rules will replace those in place since 1947, creating a series of significant problems. This post lists the problems and suggests a legislative solution.
1) Majority Consent of Life Estate Heirs is Needed for ROW to be Granted or Renewed
The new rules limit the length of a ROW to 20 years. The ROWs are not subject to state or local laws, and the new rules impose consent and approval requirements that do not appear in the current regulations. Under the current law, voluntary agreements could be struck between tribes, allottees, and a company, so long as the BIA Regional Director approved the deal. The BIA would approve if a majority of the allottee landowners consented and the amounts of money paid for the ROW were not less than the fair market value (FMV) of the allotment parcel. Under the new rules, however, the company must obtain a majority consent for the original ROW or renewal thereof, not only from the living life estate allottees, but from their heirs as well. This presents a huge obstacle, as companies will now have to find each of the heirs and then attempt to bargain with them individually. Under the current rules, if agreement could not be reached, then the company was free to use a 1907 statute to condemn the allottee land but never the tribal land.
2) Life Estate Holders Can Withdraw Previously Granted Consents
In two separate New Mexico ROW cases involving Western Refining’s pipeline and Public Service of New Mexico’s (PNM) overhead wires, the companies both originally obtained the written consent of a majority of the life estate holders who were paid fair market value for their consent. However, upon the BIA Regional Director finding a lack of a majority of heirs consenting, certain life estate holders informed the BIA that they were “unconsenting” in order to hold out for better compensation, even though they had cashed the original checks. Because the BIA allowed the holdouts’ action of “unconsenting” to stand, the companies lost their majority consent of life estate holders. Attorneys for the life estate holders are now suing PNM for trespass in federal court in Albuquerque.
3) Fair Market Value Has Become a Floor in Negotiations Rather Than an Appraisal Standard
Since the 1947 statute came into existence, the fair market value (FMV), as determined by BIA-qualified appraisers, of the allotment acreage to be crossed by the pipeline served as the negotiation basis between the company and individual allottees. The allottees, knowing that their land could be condemned under the 1907 statute dealing with ROWs, often bargained for a payment that was two or three times FMV. However, under the new regulations, FMV is a starting point, non-binding and irrelevant to an allottee who believes that the sky is the limit when dealing with large corporations.
4) The Condemnation Alternative is Under Attack Due to Tribal Ownership of Undivided Interests in Allotments
In the Public Service of New Mexico federal district court litigation, PNM sued the allottees of several allotments under the New Mexico condemnation statutes after failing to obtain the consent of a majority of life estate heirs for a 20-year renewal. The federal judge dismissed the condemnation lawsuit, because recently deceased allottees left their interests to the Navajo Nation. Even though those interests amounted to less than 1% of the entire allotment, the court labeled that interest tribal land, recognized the Navajo Nation’s sovereign immunity from suit, declared the Navajo Nation an indispensable party, and dismissed the lawsuit. PNM is appealing the dismissal to the Tenth Circuit. Without the ability to condemn, pipelines will be left only with choice of either paying ransom under the 1947 statute or facing allottee trespass actions.
Western Refining has also filed a condemnation suit against the unconsenting allottees under the New Mexico condemnation statutes. The case is before a different judge than the PNM case and is currently stayed pending a decision from the Interior Board of Indian Appeals on the majority consent of heirs issue.
The best solution to the four problems above requires the active involvement of the Legislative Branch.
Utilizing its plenary authority concerning tribal issues, Congress should pass amendments to the 1907 and 1947 statutes or create new legislation supplanting the current law that:
- Eliminates the need for heirs to consent
- Eliminates the ability of consenters to unconsent once consideration is paid
- Re-establishes the sufficiency of fair market value as the basis for the compensation to be paid
- Guarantees the right of pipeline owners to condemn allottee land regardless of partial tribal ownership
Nothing less than the free flow of energy-oriented interstate commerce is at stake.
Posted on February 12, 2016
The Supreme Court's unexplained stay of the clean power plan was "one of the most environmentally harmful judicial actions of all time," writes Michael Gerrard of Columbia Law School in a recent, excellent blog. Rather than venting outrage, Gerrard quickly moves on to explain that the Clean Power Plan isn’t the only way to cut carbon pollution.
Ramping up efforts like fuel efficiency standards for cars and trucks, and building efficiency standards, he notes, will also help reduce carbon pollution. Gerrard mentions a couple of points about agriculture, but often, this sector is overlooked when it comes to climate solutions. It’s worth taking a closer look at some of the opportunities to reduce climate pollution from our food system.
Food waste is the second largest component of most landfills. As it rots, it releases methane, a potent greenhouse gas. A recent report by the UN Conference on Trade and Development estimates that 2 percent to 4 percent of all manmade climate pollution arises simply from food rotting in landfills.
Keeping food waste out of landfills can help reduce methane pollution. Massachusetts, California, Connecticut, Rhode Island, Vermont, and some cities have enacted laws to manage organic waste disposal in landfills. The idea is to create incentives to reduce food waste and divert it to other purposes, such as animal feed or composting. Instead of being thrown away and becoming a source of pollution, this “waste” can be put to good use. Landfill gas collection systems can be further incentivized. And the nascent effort to reduce food waste from businesses and households can be significantly ramped up.
Another major source of greenhouse gases is the over application of fertilizer. Excess nitrogen fertilizer causes two big problems. The first is water pollution. Nitrogen that isn’t taken up by crops runs off farms and enters larger waterways, where it stimulates the growth of algae and creates “dead zones” deprived of oxygen. The second, and less frequently discussed issue, is the volatilization of nitrogen into nitrous oxide, a greenhouse gas about 300 times more potent than CO2. The IPCC estimates that 12 percent of all non-CO2 greenhouse gas emissions come from synthetic fertilizer application.
A number of techniques can reduce these emissions while also providing a cost benefit to farmers. Farm policies could encourage practices like cover cropping, which reduces the need for fertilizer by making soils more rich and fertile. Crop rotations can do the same, yet current crop insurance programs actually discourage the use of these practices. Precision application technologies for fertilizers are getting ever better, but their uptake on farms is slow.
Manure from animals, and the "enteric emissions" from cattle (more commonly thought of as belching) are two more significant sources of climate pollution. Enteric fermentation alone may account for as much as 40 percent of all non-CO2 greenhouse gas emissions, according to the IPCC. Changes in diet might help with these emissions, but this is an area that needs more research.
Some of the emissions from manure can be captured if manure lagoons were covered and better managed. As it stands, these pits are only slightly regulated and are major sources of water pollution sources as well as odor nuisances. An even better practice is to raise cows on rotating pastures, where their waste can enhance soils and help store carbon. And, of course, if Americans did shift to a diet lower in red meat, as per the recommendation of the Dietary Guidelines Advisory Committee, we could further reduce climate pollution from cattle.
Agriculture is one of our nation's most important economic sectors, and is especially vulnerable to the extreme weather impacts of climate change. Its product -- food -- is critical not only for our economy, but is an integral and uniquely personal part of our everyday lives. When we think about how to address climate change, it makes sense to think about food and agriculture. The food we choose to produce, and how we produce it, use it, and dispose of it, all have an impact on climate pollution—and therefore have the potential to become climate solutions.
Posted on February 11, 2016
I am a terrible predictor of what cases the Supreme Court will hear and what the Court will decide on those matters it chooses to hear. For example, I wrongly predicted that the Supreme Court would never consider reviewing the D.C. Circuit’s decisions in cases involving other recent EPA regulations, but the Supreme Court chose to hear those cases, which led to its decisions in Utility Air Regulatory Group v. EPA and Michigan v. EPA. And if asked to guess whether the Court would issue a stay of EPA’s Clean Power Plan under section 111(d) of the Clean Air Act, I might well have said that the odds were greatly against that happening – despite the merits of the arguments being raised by those seeking the stay.
Perhaps, though, my poor predictive abilities are the result of my looking at each case in isolation instead of looking at them in combination and considering whether the Supreme Court’s February 9, 2016 stay decision is an outgrowth of the combined knowledge gained by the Court in its recent reviews of those other Clean Air Act cases. Specifically, as pointed out by State Petitioners in their briefs in support of a stay of the Clean Power Plan (see here and here,) EPA has touted its Plan as being one that will completely transform the way energy is created and delivered in this country even though – argued State Petitioners – the plain statutory language (of Clean Air Act section 111(d)) does not authorize such Agency action, and the approach of the Clean Power Plan is at odds with EPA’s 45-year history of implementing section 111(d). Maybe such claims struck a chord with the Court, which – in UARG – told EPA that the Agency cannot make “decisions of vast ‘economic and political significance’” under a long-extant statute, like the Clean Air Act, without “clear congressional authorization.”
And then there was Michigan, where the Court determined that EPA had proceeded unlawfully in adopting another extensive and expensive Clean Air Act regulatory program. State Petitioners in the Clean Power Plan litigation made sure that the Court was aware that by the time the Court issued its decision in Michigan – a case where the underlying rule was not stayed during the pendency of litigation – the affected parties had spent billions of dollars to meet the terms of the underlying, un-stayed rule. In other words, justice delayed in Michigan was justice denied.
None of this is to say what the Court will or will not do if and when it reviews arguments on the lawfulness of the Clean Power Plan. I make no predictions on that. But I believe the Court acted appropriately in calling for the completion of litigation before requiring affected parties to make the massive, unprecedented, costly, and transformative changes to the energy industry that the Clean Power Plan demands.
Posted on February 10, 2016
Yesterday, the Supreme Court stayed EPA’s Clean Power Plan rule. No matter how much EPA and DOJ proclaim that this says nothing about the ultimate results on the merits, the CPP is on very shaky ground at this point.
Everyone, supporters and opponents alike (and yours truly), thought that there was no possibility that the Court would grant a stay. And it is precisely because a Supreme Court stay of a rule pending judicial review is such an “extraordinary” – to use DOJ’s own word – form of relief that one has to conclude that five justices have decided that the rule must go.
This isn’t just a preliminary injunction; it’s a preliminary injunction on steroids. First, everyone seems to acknowledge that it’s unprecedented for the Supreme Court to stay a rule pending judicial review. Second, the standards in DOJ’s own brief make pretty clear that a stay will only issue if the Court is pretty convinced on the merits. Finally, it’s worth noting that the Court implied that it does not even trust the Court of Appeals, because the stay will remain in force, even if the D.C. Circuit affirms the rule. The stay will only terminate either: (1) if the Court of Appeals upholds the CPP and the Supreme Court denies certiorari or (2) if the order is upheld and the Supreme Court also upholds it.
Back to the drawing board for EPA. Perhaps § 115 of the Clean Air provides a way out!
Posted on January 28, 2016
Our friend Seth Jaffe wrote a very interesting blog on January 20, “Does the Paris Agreement Provide EPA With Authority Under the CAA to Impose Economy-Wide GHG Controls? Count Me Skeptical.” It took issue with a paper that I co-authored with several other colleagues in academia in which we argue that Section 115 of the Clean Air Act provides the EPA with broad authority to implement a multi-state, multi-source, multi-gas regulatory system to reduce greenhouse gases.
The blog post agreed with our paper that it would be great if Section 115 provided this authority because it means EPA could implement an efficient, flexible, cross-sectoral approach to reducing greenhouse gases (GHGs).
However, Seth questioned our conclusion that Section 115 provides such authority because, in his view, courts are likely to conclude the “reciprocity” requirement in Section 115 could not be satisfied by the nonbinding emissions reduction commitments countries made in the Intended Nationally Determined Contributions (INDCs) they submitted for the Paris agreement concluded at the United Nations climate conference in December. In the words of blog post, “I think most judges would interpret the word ‘reciprocity’ in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything.” For several reasons, we disagree.
First, a reviewing court does not need to interpret what the word “reciprocity” means in Section 115, because Congress has explicitly defined it. Reciprocity is the title of Section 115(c), which provides:
"This section shall apply only to a foreign country which the Administrator determines has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."
The only right given to a foreign country by Section 115 is a provision in Section 115(b) that states a foreign country affected by air pollution originating in the U.S. “shall be invited to appear at any public hearing” associated with the revision of a relevant portion of the state implementation plan to address the pollutant. In short, Section 115 specifies that reciprocity means the foreign countries in question need to have given the U.S. “essentially the same rights” as are given by Section 115, and the only right provided in Section 115 is the procedural right to appear at a hearing.
Understanding the legislative history helps explain why the focus of the reciprocity requirement is on a procedural right. As we explain in detail in the paper, Section 115 was a procedural provision when it was first enacted in 1965: if pollution from the U.S. was endangering other countries, the other countries had a right to participate in abatement conferences where potential responses would be discussed, not a right to insist on actual emission reductions. Although Congress amended the provision in the 1977 Clean Air Amendments to replace the abatement conference with federal and state action through the Section 110 state implementation plan process, the reciprocity language in Section 115(c) was not changed, leaving it with its procedural test.
Second, we note in our paper that the Paris agreement contains a new set of procedures through which countries that join the agreement will be able to review and provide input on each other’s respective emissions reductions plans. To the extent a court might conclude that such procedural rights must be "legally binding," then the Paris agreement satisfies that test because although the emission reduction targets themselves that were submitted in the INDCs will not be legally enforceable by other countries, the procedural elements of the Paris agreement will be binding international law.
We note in the paper that although Paris provides a strong basis to satisfy Section 115 reciprocity, that reciprocity could also be satisfied by other international arrangements that the United States has with a variety of countries, particularly Mexico and Canada, the EU, and China.
Third, the blog post does not engage the issue of procedural reciprocity; rather it focuses on a substantive view of reciprocity (i.e. that reciprocity requires that other countries are actually reducing emissions of GHGs) and asserts that substantive reciprocity requirement could not be met by the internationally non-binding commitments made in the INDCs. Although we believe that the correct reading of Section 115 is that it only requires procedural reciprocity, we recognize that a court could conclude that Section 115 also implicitly includes a substantive reciprocity requirement. In the first instance, we noted that this requirement might be met by the international law principle sic utere tuo ut alienum non laedus, which directs nations to avoid causing significant injuries to the environment of other nations, most recently explained in the International Court of Justice’s Pulp Mills case.
The author skips over this element to focus his skepticism that the reciprocity requirement could be satisfied by non-binding commitments in the INDCs. But actually the U.S. and other countries have made reciprocally non-binding commitments in their INDCs. That is, the U.S. has made an international political commitment to reduce emissions a certain amount, and has received essentially the same rights in the non-binding international commitments from other countries to reduce emissions.
Someone could argue that the U.S. INDC may be non-binding, but Section 115 is domestic law in the U.S. and substantive reciprocity cannot exist unless other countries also have domestic laws requiring emission reductions. If this is the test, however, it can also be met. In fact, the INDCs submitted by other countries identified the binding domestic laws through which the INDCs would be implemented. We did not focus on this aspect in our paper, but some examples are: (1) the United States identified the Clean Air Act and other laws and regulations “relevant to implementation” of the U.S. commitment; (2) China identified the measures that had been incorporated into domestic law and regulation through previous five-year plans, and outlined a variety of policies and strategies that would be incorporated into subsequent five-year plans to implement their emissions commitment; and (3) the EU noted that the necessary legislation to implement its target was being introduced to the EU parliament in 2015 and 2016. Therefore, if “legally binding” domestic laws are required to find reciprocity under Section 115, EPA could reasonably examine the legally binding provisions in other countries’ domestic systems to find that reciprocity.
To summarize, our view is that Section 115 likely requires only procedural reciprocity. If a court concluded Section 115 required substantive reciprocity, then EPA could reasonably find that requirement met through the reciprocal political commitments that the U.S. and other countries made in Paris as well as through the binding domestic laws and regulations in the U.S. and other countries that will implement the commitments.
We look forward to further dialog on this topic, which we think is an important part of unlocking this powerful, untapped tool that the EPA possesses to design an efficient and flexible system to reduce GHGs.
Posted on January 20, 2016
In a very interesting article, Michael Burger of the Sabin Center and his co-authors suggest that, following the Paris climate agreement, § 115 of the Clean Air Act provides authority for EPA to develop economy-wide GHG emissions reduction regulations that would be more comprehensive and efficient than EPA’s current industry-specific approach. And what, you may ask, is § 115? Even the most dedicated “airhead” has probably never worked with it.
Section 115 provides that, where EPA determines that emissions from the US are endangering public health or welfare in a foreign country, it may require SIP revisions sufficient to eliminate the endangerment – but only so long as there is “reciprocity”, i.e., the foreign country:
"has given the United States essentially the same rights with respect to the prevention or control of air pollution occurring in that country as is given that country by this section."
I love the idea. An economy-wide regime would be much more efficient. I wish that the argument made sense to me, but it does not.
The authors state that a global treaty could provide reciprocity, but then argue that “less binding commitments, including political commitments, should also suffice.” Thus, they conclude, the “Intended Nationally Determined Contributions”, or INDCs, which are the basis of the Paris Agreement, can provide reciprocity. Can you say “ipse dixit“?
They provide no precedent for this, because, as they acknowledge, § 115 has never been used. EPA started to use it once, and the authors provide two letters from then-Administrator Costle, suggesting that legally binding reciprocity is not required. However, EPA dropped the plan and the two letters were not finally agency action and were never subject to judicial review. Otherwise, the arguments simply seems to be that EPA can cloak itself in Chevron deference and that that is the end of the story.
Sorry, I don’t buy it. We’re talking about the law here. I think most judges would interpret the word “reciprocity” in a statute to mean something that is legally-binding; otherwise, it doesn’t mean anything. I don’t think it’s even a close enough question that Chevron deference will get EPA over the finish line.
The illogic of the authors’ argument seems to me to be demonstrated by their own words, when they argue reciprocity can’t mean a legally binding agreement, because that would mean that the foreign nations would be able to go to court to ensure that the US also meets its commitments under the Paris agreement, and the US would never allow that. But that’s precisely the point! Because there is no treaty, and the US would not let other nations try to enforce the US commitments under Paris, we cannot enforce theirs, and there is no reciprocity.
I wish it were otherwise.
Posted on January 7, 2016
The Paris Agreement on climate change reached on December 12, 2015 has a heavily negotiated sentence that, when closely read, seems to call for the virtual end of fossil fuel use in this century unless there are major advances in carbon sequestration or air capture technology. That, in turn, has important legal implications.
Article 4 Par. 1 says, “In order to achieve the long-term temperature goal … Parties aim to reach global peaking of greenhouse gas emissions as soon as possible … and to achieve rapid reductions thereafter in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.”
In other words, what goes up should be taken back down: for every ton of greenhouse gases (GHGs) emitted from a smokestack, tailpipe or chopped tree, a ton should be removed.
According to the Intergovernmental Panel on Climate Change’s Fifth Assessment Report (2014), fossil fuel use emits about 32 gigatons of carbon dioxide per year. Other sources, such as methane leakage, cement manufacture, and other industrial processes add another 5-7 gigatons carbon dioxide equivalent. Deforestation and other agriculture, forestry and other land use changes (but subtracting emissions sequestered by forest growth) add yet another 10-12 gigatons a year. This all adds up to about 49 gigatons. However, global carbon sinks remove only about 18 gigatons per year (8.8 to the oceans, 9.2 to land, not including land use changes).
Thus the sinks take up about the equivalent of the non-fossil sources. In order to achieve a “balance” between emissions and sinks, we need to just about end the release of GHGs from fossil fuels, though a radical increase in sinks or reduction on non-fossil fuel emissions would provide some slack.
Assuming that some kind of balance between emissions and sinks can be achieved, would we actually have until 2099 to decarbonize the economy, as these numbers imply is needed? Not really. Kelly Levin, Jennifer Morgan and Jiawei Song at the World Resources Institute provide here an illuminating overview of what is required to achieve the long-term temperature goal in Article 2 of the Paris Agreement (“holding the increase in global average temperature to well below 2° C above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5° C”). As the WRI post notes, a recent paper in Nature Climate Change suggests that carbon dioxide from electricity would have to be brought close to zero by 2050, and by then around 25 per cent of energy required for transportation would also need to come from electricity (up from less than one per cent now).
There seem to be only three ways to continue to use fossil fuels for electricity in the second half of the century (and for transport by the end of the century) and still meet the temperature goal:
- Capture the carbon before it escapes into the air, and sequester it
- Devise, and deploy on a massive scale, technologies to remove the carbon from the air, and sequester it
- Create new sinks, such as through the immediate halt to deforestation and a worldwide program of tree planting
All three of these raise a question of how long the carbon will be stored; we do not know how long carbon will stay in reservoirs, and we do know that trees do not live forever, and when they burn or die they release their carbon. Moreover, the technologies of carbon capture and sequestration, and of removing carbon from the ambient air, are developing slowly and are nowhere near large scale deployment. (A price on carbon would create an economic incentive to develop and use these technologies, but politicians in most places are unwilling to impose such a price. A large-scale government-funded research effort, such as the ones that put human beings on the moon, could also produce the necessary innovation, but there has been little visible support for such an effort.) Most of the industrial carbon sequestration that now occurs goes toward “enhanced oil recovery” – squeezing oil out of depleted reservoirs – but extracting more oil is not compatible with stopping fossil fuel use.
Finding the land for large scale tree planting would face its own challenges in a world where sea level rise, persistent drought, and extreme heat will be rendering much land unsuitable for growing food.
So meeting the demands of society for energy means a combination of aggressive energy efficiency and conservation programs, the installation of renewable energy (and, perhaps, nuclear), and the substitution of electric or hydrogen vehicles for those using petroleum at an unprecedented pace. The Deep Decarbonization Pathways Project has set forth the colossal amount of new facility construction that would be required worldwide to achieve this.
The Paris Agreement calls on all countries to strengthen their pledges to reduce GHG emissions, and to monitor their progress and report it to the world. It also says that “all parties should strive to formulate and communicate long-term low greenhouse gas emission development strategies.” (Article 4 Par. 19) That looks like strategies under which every country must show how it is controlling its fossil fuel use.
These provisions are not legally enforceable. However, many domestic laws are, and they will become a powerful tool to force early planning, or at least disclosures. One key example is the securities disclosure requirements for publicly traded companies. On January 27, 2010, the U.S. Securities and Exchange Commission issued guidance for the disclosure of climate-related risks. It specifically calls on companies to “consider, and disclose when material, the impact on their business of treaties or international accords relating to climate change.” The Paris Agreement is clearly such an accord, and (if it is vigorously implemented) it will have material impact on many companies in the business of extracting, processing and using fossil fuels, or making things that rely on fossil fuels (such as motor vehicles, ships and airplanes). The SEC’s guidance makes clear that management’s discussion and analysis should explore known trends and uncertainties concerning climate regulation. This includes regulation outside the U.S. that can affect the operations abroad of U.S. companies. Therefore, disclosure can be expected of the effect of severe restrictions here or in other countries on fossil fuel use, including the possibility that most fossil fuel reserves will need to stay in the ground.
Climate disclosures have received increased attention since it was reported in November that New York Attorney General Eric Schneiderman is investigating ExxonMobil under the New York securities law, the Martin Act, over its statements about climate change, and had reached a settlement with Peabody Energy.
This is not necessarily limited to U.S.-registered companies. For example, in April 2015 the G20 finance ministers and central bank governors asked the U.K. Financial Stability Board for advice on the financial stability implications of climate change. In November 2015 this Board proposed the establishment of a disclosure task force to develop voluntary disclosures for several climate-related risks, including “the financial risks which could result from the process of adjustment towards a low-carbon economy.”
Going forward, impact review of energy projects under the National Environmental Policy Act and its counterparts in many states and most other developed countries should consider the phase-out of fossil fuels that is inherent in the Paris Agreement. For example, a proposal to build or finance a coal mine, a coal-fired power plant, or a coal port should consider whether the facility would need to be closed before the end of its otherwise useful life, and whether the project would be inconsistent with the Agreement.
Systematic analysis and disclosure of these risks will lead responsible boards of directors to undertake serious planning to effect an orderly transition to the low-carbon world that 188 countries agreed to in Paris. These disclosures will also help investors decide what companies will thrive in such a world (such as developers of technologies for renewable energy and efficiency), and what companies are failing to prepare for the transition and thus will themselves become fossils.
Posted on January 5, 2016
The Paris Agreement resulting from the COP21 Climate Conference was extraordinary, far better than any of the pundit “experts” expected (indeed most were predicting gloom and doom until the very last minute). That the conference organizers could get 190 countries that had been quarreling with each other through 20 prior unsuccessful conferences, and many of which have little mutual respect, to come together to unanimously support an agreement of substance on a subject as complex, huge, costly and politically difficult as tackling climate change, is nothing less than a miracle.
Christiana Figuerez and the French negotiating team were brilliant in asking only that countries submit voluntary Independently Nationally Determine Contributions (INDCs) rather than a repeat of conference mandated so-called “binding” carbon reductions as required in the unsuccessful Kyoto Protocol, binding only on developed countries that ratified (and even then signatory Canada simply withdrew). Their pre-conference preparatory work and skillful conference conduct was critical to its success.
The momentum that was built up as virtually all the countries, large and small, rich and poor, made meaningful submissions was such that it would have been very difficult for any of one nation to spoil the broth.
Indeed, the momentum was so great that even previously very reluctant China, India, S. Africa and Brazil agreed to mandatory verification provisions, extremely important to the effectiveness of the Agreement.
That the INDCs were not sufficient to meet the IPCC scientists’ assessment of need to reduce global temperature increases to no more than below a 2.5 Celsius degrees above pre-industrial revolution levels was to be expected. But that the parties agreed to meet every 5 years to make further contribution pledges, again despite powerful country reluctance, was a vital success.
One little touted success was a provision to have the Agreement recognize the climate mitigation contributions of non-national organizations, states, provinces, cities, businesses and NGOs, a provision on which I and a group from Yale dubbed The Yale Dialogue, worked very hard to get included. Their inclusion is very important since many of them have already achieved much more than their national governments have been able to pledge. Perhaps most importantly, it is they that ordinarily are the key actors in establishing energy efficiency standards and often renewable energy incentives. The Paris Agreement doesn’t call for ratification until 2020, and progress before then will fall largely on their shoulders.
While the task before all the countries of the world to achieve the goals sought through the Agreement is daunting, the Paris Agreement has gotten the world off to a wonderfully good start.
Posted on December 30, 2015
There’s been a disturbance in The Force. On December 4, 2015, Environmental Jedi across the galaxy felt that subtle hitch in the harmonious heartbeat of the universe due to some cosmic, regulatory insult. That sense of loss warned Jedi everywhere that Balance has been tipped, Light has been dimmed, and Nature has been nicked.
On that day, a former Senator, now Galactic Emperor, affixed his signature to a benign sounding decree from the Legislative Houses of the Republic known as the FAST Act (Fixing America’s Surface Transportation Act, see House Report 114-357). Buried beneath 550 pages of directives and declarations about everything from intergalactic traffic lights to hyper-space railroad switchyards lay a seed of great detriment that wary but weary policy watchers had not noticed. While the Jedi have been exposed to this loathsome idea before, their continual resistance to the Dark Side’s alluring arguments about “emergency” and “public need,” must have faded like dim memories of policy battles a long, long time ago in a galaxy far, far away. For just a single page of text in a section numbered 61002 slipped through seemingly without notice and certainly without ignition of even a single lightsaber.
The Emperor’s executive agency—ominously known in previous days as the “Federal Power Commission”–—has long had authority to declare an “emergency” by reason of “a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or transmission of electric energy, or of fuel or water for generating facilities, or other causes” and then to order electric utilities to take responsive action (16 U.S.C.A. § 824a(c)). Now, with the authority of a fully-armed and operational FAST Act, electric utility actions or omissions in response to such orders that violate federal, state or local environmental laws or regulations shall not be considered violations, shall not subject the electric utility to civil or criminal penalties, and—for the love of Obi-Wan—shall not subject such a party to “a citizen suit under such environmental law or regulation.” Electric utilities supplying emergency power to those in need will avoid any Imperial entanglements. To coin a phrase, “These aren’t the violations we’re looking for. . . .You can go about your business. . . . Move along. . . . Move along.”
What the most destructive hurricanes and sea storms in recent interstellar history could not do, has now been done. What a lack of power, potable water, sanitation, health care, police protection and basic transportation for entire cities did not justify, has been written into law now, apparently without a fight. Where were the Jedi? What Imperial plot lies in back of this development?
Under the previous Emperor, everyone knew such an exculpatory policy was completely unnecessary and would wreck the environment like the Death Star wrecked Alderan. But now no outcry? No rescue? Is the Resistance powerless? Where is Luke? Has Leia lost her lightsaber? Are the Jedi extinct or has their attention simply been frozen in carbon? Perhaps this is just another reason to anticipate eagerly Episode VIII, where all ambiguities will be explained without need of Chevron Step One. May The Force be with you in 2016!
Posted on December 21, 2015
In his December 16 ACOEL post Professor Robert Percival concludes that President Obama’s Paris GHG reduction pledges are most likely “legally durable.” Two of his key points: (1) EPA’s Clean Power Plan (CPP) – from which the bulk of the Obama pledges are comprised – will likely survive judicial review; and (2) any effort by a new President to undo the CPP would require a lengthy rulemaking process that could be rejected on judicial review.
The CPP may ultimately survive judicial review, and any attempt by a new President to undermine the CPP may ultimately fail. But with due respect to Professor Percival, I submit the GHG reduction pledges may be far less “legally durable” than he suggests.
Judicial Review Prospects.
Professor Percival notes that the Supreme Court has “repeatedly upheld EPA’s authority to regulate GHG emissions.” But EPA’s authority to regulate GHG emissions is not at issue in the challenges now pending in the D.C. Circuit. (Consolidated under the lead case West Virginia v. EPA.)
Rather, the issues relate to how far can EPA go with the words of the Clean Air Act (CAA) to regulate GHG emissions. I think most would agree that EPA seeks to go pretty far with a few words in CAA 111. One key issue is whether the words authorizing imposition of “best system” emission limits upon “stationary sources” confer authority to require owners of coal-fired stationary sources to replace their plants with solar and wind energy sources.
In my view, whether the CPP will survive in the D.C. Circuit may well depend upon the composition of the 3-judge panel selected by lot. The 17 active and senior judges on that Court represent an amazingly wide spectrum of philosophies. But the cases will probably then go to the Supreme Court – and there, I think EPA will have a pretty tough (but maybe not impossible) time. Last year, the Court rejected parts of EPA’s GHG regulatory scheme in its UARG opinion. The Court expressed strong distaste for EPA regulations with questionable grounding in the CAA’s words – particularly “where an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy.”
A New President’s Prospects.
Virtually every Republican Presidential candidate has vowed to undo most or all of the CPP (assuming it has not been rejected on judicial review). I take no position on whether he or she should do this. But I do believe it could be done fairly quickly and in a manner likely to survive judicial review.
I direct your attention to Nat'l Ass'n of Home Builders v. EPA. Writing for a unanimous panel in an EPA case, Chief Judge Garland (an Obama appointee – joined by Judge Rodgers, a Clinton appointee) quoted extensively from recent Supreme Court opinions. In Part II(A) of Judge Garland’s opinion (pages 1036-38) and Part IV (page 1043), the following points come through strong and clear:
a. 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;
b. 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.
Thus the “lengthy rulemaking process” envisioned by Professor Percival need not be so lengthy. A new administration would not need to develop a new factual record – it would merely have to carefully explain in its rulemaking the legal and policy reasons why it was undoing parts or all of the CPP. There is no reason this could not be accomplished within a year or two, and reductions required under the CPP do not begin kicking in until 2022.
Posted on December 16, 2015
As part of a global agreement on climate change, the US has pledged, among other things, to reduce its greenhouse gas (GHG) emissions by 26%-28% compared to 2005 levels by the year 2025. But opponents of President Obama argue that he cannot keep his promises made at the Paris climate summit.
The Obama administration is confident that the US can meet its promise based on the regulatory actions already taken by the US Environmental Protection Agency (EPA) and other federal agencies to reduce GHG emissions, part of a broad Climate Action Plan announced by President Obama in June 2013.
In transportation, US fuel economy standards set by the EPA have been raised dramatically. And earlier this year the EPA issued regulations to control GHG emissions from power plants, which led to a final rule known as the Clean Power Plan.
The Clean Power Plan will require states to reduce GHG emissions from existing power plants by 32% by the year 2030. It is expected to accelerate the retirement of coal-fired power plants as electric utilities increasingly shift to natural gas and renewable sources of energy.
Yet even as US negotiators arrived in Paris for the climate summit, Obama's political foes were questioning his authority to sign an international agreement on climate change.
Senate Majority Leader Mitch McConnell argued that the US cannot meet its promises to the global community because the Clean Power Plan is "likely illegal" and will either will be struck down in court or be revoked by a new Republican president.
So how strong is the legal defense of Obama's signature climate initiatives?
Going to the Supreme Court?
Having the Clean Power Plan struck down in court seems unlikely for a number of reasons. These include the fact that the US Supreme Court repeatedly has upheld EPA's authority to regulate GHG emissions under the Clean Air Act, beginning in 2007 with its decision in Massachusetts v EPA.
On the other hand, a new president working with congressional opponents of climate action could undermine the US commitment. Let's consider the legal possibilities.
The Congressional Review Act provides special fast-track procedures that allow Congress to veto regulations issued by federal agencies within 60 legislative days of their issuance. But before such a joint resolution of disapproval can take effect, it requires either presidential approval or the override of a presidential veto by a two-thirds majority in each house of Congress.
The signature policy of Obama's climate strategy is the EPA Clean Power Plan to regulate CO2 from power plants. Opponents are already challenging it in court. haglundc/flickr, CC BY-NC
As a result, the only time this procedure has been used successfully was shortly after a change of administration. In March 2001 new President George W Bush signed a disapproval resolution blocking regulations issued at the end of the Clinton administration to protect workers from repetitive motion injuries.
Congress is trying to use the Congressional Review Act to disapprove EPA's greenhouse gas regulations, but such a vote is entirely symbolic because President Obama has promised to veto the disapproval resolution and the 60 legislative day period will end long before the 2016 election. Thus, as long as a president committed to climate action remains in office, the Congressional Review Act is not a promising option.
Dramatic versus piecemeal attacks
A new president opposed to climate action could direct EPA to repeal its regulations, but this would require the agency to undertake a lengthy rulemaking process to comply with the Administrative Procedure Act that governs how agencies adopt regulations. Any agency decision to revoke the regulations would be challenged in court and could be overturned.
The courts have played a role before in attempts to reverse regulations. When President Reagan's Department of Transportation rescinded its air bag regulations, the Supreme Court held that it had acted arbitrarily and capriciously because the decision was not supported by the factual record showing that air bags save lives.
There will be legal challenges to the EPA Clean Power Plan, but the Obama administration thinks it's on solid legal ground. vagueonthehow/flickr, CC BY
And when the Supreme Court in 2011 rejected state efforts to hold electric utilities liable for climate change under the federal common law of nuisance, it pointedly noted that any future EPA decision not to regulate GHG emissions would be subject to judicial review.
Working with a new president sympathetic to opponents of environmental regulation, Congress could repeal or amend the Clean Air Act, the legal foundation for EPA's regulations of GHG emissions. However, the Clean Air Act has been remarkably resistant to past legislative onslaughts. It is, after all, thanks to the Clean Air Act that the "airpocalypses" choking major cities in China and India right now do not happen in the US.
Another option for a future Congress would be to adopt targeted amendments to deprive EPA of authority to implement the Clean Power Plan and other GHG regulations if there are enough votes in the Senate to overcome a filibuster. Congress also could use the power of the purse to withhold funds for actions necessary to implement any Paris agreement, including US promises of financial aid to help poor countries adapt to climate change.
The Paris climate conference is being conducted pursuant to the UN Framework Convention on Climate Change, a treaty signed by President George H W Bush in June 1992 and ratified unanimously by the US Senate on October 7 1992. President Obama believes he already has sufficient legal authority to implement any agreement made in Paris and thus he does need not to ask Congress for new approval.
There is precedent for this. In 2013 the US was able to accede to the Minimata Convention on Mercury without congressional approval because existing law already provides the president with sufficient legal authority to implement its requirements.
For decades, the principal argument by opponents of US climate action has been that the US should not act until developing countries agreed to control their GHG emissions. That argument was dramatically undermined in November 2014 when China agreed to control its emissions, in a joint announcement with the White House.
The claim that other countries will not control their emissions has now been laid to rest in Paris with a new global agreement requiring all countries to do so. Now that the entire world has recognized that all nations must act to combat climate change, it would be the height of folly for a new president and Congress to reverse course.
This article was originally published on The Conversation. Read the original article.
Posted on December 2, 2015
Last week, the Boston Globe had an op-ed by Joshua Goldstein and Steven Pinker concerning some “Inconvenient truths for the environmental movement.” I’m sorry to say that I agree with pretty much every word of it. Why am I sorry? Because Goldstein and Pinker make clear – even though they don’t mention his name – that the Pope was completely wrong in his prescription for addressing climate change. How so? It’s really pretty straightforward.
People want more economic development, not less. They want more markets, not less. It may be that some wealthy societies could still have a relatively smooth transition to renewable fuels without sacrificing economic growth. Unfortunately, that’s not where we have to address the demand for fossil fuels. We have to do so in China and India and other developing countries. I’m sorry, but I’ve seen the projected demand for fossil fuels outside the US and Europe and it’s not pretty. Anyone who thinks that we can quickly and easily eliminate fossil fuel use in those countries and still allow them the economic growth that their citizens demand is delusional.
Which brings us to Goldstein’s and Pinker’s second inconvenient truth; nuclear power has to be a large part of the solution. And I’m afraid that’s probably the end of the conversation for many of my environmental friends, so I’ll cut this short.
I’m still an optimist. I believe that we can still solve climate change. We can do so however, with more use of markets, not less. And we must do so with more economic growth, not less, because the rest of the world won’t be satisfied with less.
Posted on October 23, 2015
So the Clean Power Plan has been published in the Federal Register. For those who cannot get enough, you can find all of the important materials, including EPA’s Technical Support Documents, on EPA’s web site for the CPP.
Not surprisingly, given the number of suits brought before the CPP was even finalized, opponents were literally lining up at the courthouse steps to be the first to sue. West Virginia apparently won the race and is the named plaintiff in the main petition filed so far.
Perhaps because Oklahoma has been one of the most persistent, and vocal, opponents of the CPP, this called to mind the origin of the Sooner State’s nickname – which seems particularly apt, since Oklahoma was one of the states that couldn’t wait for the rule to be promulgated to sue.
Oklahoma is not actually among the plaintiffs in the West Virginia suit. Oklahoma filed its own petition today. One wonders whether Oklahoma was banished from playing with the other states as a result of its impatience. Unlikely, since most of those in the West Virginia suit also filed early, but it did call to mind that other famous event in the history of the west, as recorded in Blazing Saddles.
Posted on September 15, 2015
Few recognize Ohio’s pivotal role in the development of the oil and gas industry in the United States. John D. Rockefeller amassed fortunes in Cleveland with his oil refining business (until Uncle Sam broke up the monopoly). Since then, there have been a number of different oil and gas booms in the state, for example in the mid-1960’s north of Columbus, then again in deeper sandstone formations in suburban areas of Cleveland approximately 10 years ago, and now, the whopping Utica shale play primarily in eight counties in eastern Ohio at depths over 8000 feet below ground surface and horizontal laterals extending a mile or more. The Ohio Department of Natural Resources (“ODNR”) has issued over 2000 Utica drilling permits, and there are approximately 1000 wells in production or drilling (costing millions to complete). Hydraulic fracturing (“fracking” its critics pejoratively call it) has been around a long time, but only recently has it been the focus of media and regulatory scrutiny. All of these historical booms going back to the mid-1960’s have forced the Ohio General Assembly to enact and update comprehensive statutes that regulate drilling activities.
Those in the industry were successful in having the General Assembly confer “sole and exclusive authority” to the ODNR “to regulate the permitting, location, and spacing of oil and gas wells and production operations.” But what about the longstanding, traditional “home rule powers” that the Ohio Constitution conferred on municipalities to take care of health, safety and land-use matters within their jurisdictions? The juxtaposition of the two came to a head in a case that ironically does not deal with the massive Utica shale wells, but more modest gas wells in a shallower formation in a suburb in Northern Ohio.
The ODNR had issued a drilling permit to Beck Energy to drill a well in Munroe Falls in 2011. But Munroe Falls obtained a local trial court injunction prohibiting the permitted drilling until Beck Energy complied with all local ordinances, including the payment of a fee, the posting of a bond, and the holding of a public meeting. Despite having the state’s authorization to proceed, Munroe Falls prohibited the drilling until it issued its zoning certificate, which it would not do (if at all) for at least one year after Beck met the other pre-conditions.
The dispute found its way to the Ohio Supreme Court, which issued a “plurality” opinion (4-3) in favor of Beck Energy (and the ODNR). State ex rel. Morrison v. Beck Energy Corp. The City argued that the state statute regulates the technical aspects of oil and gas drilling while the municipal ordinances address traditional local zoning concerns. The majority seemed troubled by the scope of the “sole and exclusive” language, but seemed content to defer this policy question to the General Assembly. Because the traditional Home Rule powers have enjoyed longstanding and wide ranging judicial respect, the majority in the Beck Energy case limited the decision to the Munroe Falls ordinances before the Court, presumably leaving open some future role for local zoning ordinances.
The initial reaction of the bar was to focus on the separate concurring opinion of Justice O’Donnell, who was reluctant to displace local zoning authority in favor of sweeping state regulatory authority. In his view, the “sole and exclusive” authority was intended to preempt a patchwork of local laws related to the technical and safety aspects of drilling and not to divest local governments of their traditional authority to promulgate zoning regulations that ensure land-use compatibility, preserve property values, and foster long-term community development plans. The dissenting Justices, along with Justice O’Donnell, noted the troubling omission of the word “zoning” when the General Assembly spoke to “exclusivity.” That is to say, if the General Assembly really meant to displace local zoning practices, it could have clearly said so, as it has done with other licensing statutes.
The Ohio Supreme Court’s decision has not put an end to the hotly contested question of the scope of pre-emption. For example, an activist group in suburban Broadview Heights has filed a putative class action lawsuit claiming that the City’s Community Bill of Rights supersedes state laws. And recently, the Ohio Secretary of State refused to certify county-wide ballot initiatives that sought to prohibit fracking and/ or drilling in their respective jurisdictions.
So after I finish this blog tonight, I will drive down Rockefeller Drive, pass the remains of the old Standard Oil refinery, and wonder what John D would have thought of this tension between state preemption and local health and safety regulations.
Posted on September 10, 2015
On Wednesday, the D.C. Circuit Court of Appeals dismissed the latest effort to stay EPA’s Clean Power Plan before it has even been promulgated in the Federal Register. The Court simply stated that “petitioners have not satisfied the stringent standards that apply to petitions for extraordinary writs that seek to stay agency action.”
Really? Tell me something I did not know.
I’m sorry. The CPP is a far-ranging rule. There are strong legal arguments against its validity. Those arguments may prevail. I see it as about a 50/50 bet. This I do know, however. The sky isn’t falling. The sky won’t fall, even for West Virginia, if the rule is affirmed and implemented. Those opposed to regulation have made these arguments from time immemorial – certainly no later than when Caesar tried to regulate the amount of lead in Roman goblets. And if I’ve got that one wrong, at least no later than Ethyl Corporation v. EPA, when opponents of EPA’s rulemaking on leaded gasoline thought that the rule would mean the end of western civilization.
I’m not naïve. I understand that these arguments are political as well as legal. I just think that opponents of EPA rulemaking undermine their own political position in the long run by repeatedly predicting catastrophe, even though catastrophe never arrives.