Cuba Delegation Part 4: Las Terrazas

Posted on October 12, 2016 by Eileen Millett

I stood staring at the ruins of slave quarters on what had once been a 19th century coffee plantation situated in the northwestern part of Cuba ― Las Terrazas, in the Sierra de Rosario mountains.  I was struck by the unabashed preservation of the old with the new.  Slave quarters juxtaposed with Algarrabo cententarios trees growing up through the balconies and ceilings of La Moka, an ecological hotel.  La Moka is a modern twist on old colonial architecture, with a multi-tiered atrium lobby built around trees that disappear magically skyward.  We had journeyed 45 minutes from La Habana above the shores of San Juan Lake and beneath the mountains to another place and time. 

Las Terrazas is a biosphere with a protected ecosystem, a buffer zone that supports ecological practices, and an area that fosters ecologically sustainable development.  It combines a small community of about 1,200 people, many of them artists, with ecotourism.  The hotel and the buildings seem to melt into the mountains by design.   In those mountains, even with my Spanish proficiency, I struggled to understand Ariel Gato, in his artist studio, where hanging in the sun was his very own recycled computer paper for drawing, prints, and other art work.  Later, I learned his accent was shared by many farmers, or campesinos, influenced by the Haitian settlers who brought coffee, and spoke the French language.   Gato is renowned for his art work, but he is clearly more than simply an artist.  

In 1968, then-President Fidel Castro founded a green revolution, making Las Terrazas a green project.  Architect Osmany Cienfuegos mobilized work brigades that created terraces of timber, fruits, ornamentals and vegetables.  Starting in 1971, the brigades carved roads through the mountains to build homes, schools, playgrounds and clinics all surrounding San Juan Lake.  Owing to the success of the reforestation project, the biosphere came under UNESCO protection in 1984.

We walked through Las Terrazas and were treated to zip line tours, steel cables whisking people above Las Terrazas; enjoyed coffee that was muy sabroso; and learned something about the art of coffee-making along the way.  In the old days, slaves had to turn the coffee beans― red in their original form― every 30 minutes.  Still today, this dry method is used where water is scarce.   Coffee beans are spread out on huge surfaces to dry in the sun.  Beans are raked and turned throughout the day and then covered at night or during rain, in order to prevent the beans from spoiling.   From this vantage point on the ranch, we could see the port of Mariel, where the Brazilians and Cubans are building a major container terminal that will have the capacity to handle vessels deeper than Habana Bay, and will have facilities for offshore oil exploration.  We are marching toward a new day for Cuba.

Small expressions of sustainable initiatives seem to be on the rise in Cuba.  The day before visiting Las Terrazas, we visited a local permaculture project near Cojimar, a seaside village, best known for its setting in Ernest Hemingway’s novel The Old Man and the Sea.  Mosquitoes fell in love with me there, but we could have been in any 1950’s fishing village.  Nearby, we encountered a family-run business –Planta de Fregado—an ecological car wash that uses plant solids, gravity feed and carbon filtration for a completely organic car wash.  The owner was enthusiastically confident of replicating his system all over Cuba. 

In Cuba, the legacy of slavery and the old African traditions blend seamlessly with so much of the new world.  In some ways they are frozen in time and in other ways, not so much.  Little Zika problem here, at least with standing water outside, as we witnessed systemized mosquito spraying throughout the countryside.  However, the mosquito problem occurs with water indoors, as no amount of education convinces people not to keep glasses of water under their beds, in the corners of rooms and on dressers to ward off evil spirits or to bring good luck.  Officially Cubans are atheists, unofficially Roman Catholic, but in reality most Cubans practice Santeria, a system of beliefs that merges Yoruba myth with Christianity and indigenous American traditions.  The Cubans are unabashed in recognizing African influence in their music, their food and their religion.  Perhaps it has, too, influenced permaculture projects, and the biosphere reserve ― Las Terrazas.  

Perspectives of Twenty-four Pioneers on the Past and Future of Environmental Law

Posted on June 16, 2016 by Leslie Carothers

On Earth Day 2016, the Environmental Law Institute presented to the public a collection of 24 videotaped interviews conducted over the past five years to record the career experiences of many pioneers of environmental law.  The men and women profiled were active in the environmental movement in the sixties and early seventies.  They served as Democratic and Republican legislators, organizers and advocates for public interest organizations, administrators of national and state environmental agencies, academics producing new ideas and educating new lawyers, and legal counsel to business and government agencies contending with a host of new environmental laws.   ELI’s interviewers wanted to learn why these pioneers chose to enter the field of environmental law, what they see as its major successes and shortcomings, and how they view the health of environmental activism and public commitment today.

Among other things, the oral histories provide interesting insight into the roots of activism for early environmental lawyers and what different life experiences and motivations may influence today’s new environmental lawyers.  Practically every pioneer spoke of enjoyment of nature and the out of doors experienced through growing up on a farm or in rural areas or visiting campsites and parks on family vacations and scouting trips.  They witnessed both the beauty and the degradation of natural and scenic resources and were inspired to seek ways to protect them.  The other factor mentioned most often was the example and energy of other social movements in the sixties and seventies, first and foremost the civil rights struggle.  Personal experience and the climate of social activism combined to motivate many environmental pioneers to become leaders in the new environmental movement. 

Most of the pioneers express optimism that new generations of young women and men will take up activism and environmental law to attack today’s agenda of complex and serious problems.   But many worry that the communications technology building young people’s impressive expertise may also be keeping them glued to their screens and disconnected from the natural world.  Robert Stanton, former Director of the National Park Service and the first African American to hold the position, comments in his interview that we should not be unduly critical of young people who spend so much time inside.  He observes that when he was growing up, there were only a few black and white TV channels to compete with going outdoors!   Still, a lifelong activist like Gloria Steinem believes that excessive dependence on electronic connections can weaken the interpersonal qualities of empathy that depend on face-to-face communication and can dilute the emotional drivers for action in concert with others.  Activism means more than making a statement and pressing “send.”    The impact of technology is just one of many issues discussed in an engaging set of interviews available to all.  Visit ELI’s website at http://www.eli.org/celebrating-pioneers-in-environmental-law for a unique source of perspective on the evolution of environmental law and the prospects for further progress on pressing problems in today’s very different social and political setting.

Looking Back Over 100 Years of the National Park Service, Looking Ahead to the Future of Environmental Law

Posted on May 20, 2016 by Benjamin F. Wilson

August 25, 2016 is the 100th anniversary of the National Park Service.  The many planned celebrations and observances provide an opportunity for everyone to become reacquainted with these great outdoor spaces and reflect on the world around us.  As your summer plans take shape, be sure to visit FindYourPark.com and try to visit at least one national park.  I invite you to share photos of your travels in the comments section of this post, and perhaps ACOEL can find a place for the collection of images of its members enjoying these national treasures.

As I reflect on the Park Service’s anniversary, I observe that it presents a chance for me – and for all environmental lawyers – to take stock of where we have been as a profession.  Why – and how – we do what we do?  What challenges will the next 100 years hold?

I issue this charge, in part, to carry on the conservation legacy of Henry L. Diamond.  Henry was a founder of my firm, Beveridge & Diamond, and a great environmental lawyer and mentor to many (including myself).  Sadly, we lost Henry earlier this year.

Henry and many others like him paved the way for our generation to be stewards of the planet and the environmental laws that govern our interactions with it.  We have made progress, but new challenges have emerged.  Easy answers, if they ever existed, are fewer and farther between.  So what, then, does the future hold for the next generation of environmental lawyers? 

Future generations of lawyers would do well to focus on the funding mechanisms that are critical but often overlooked components to achieving our most important environmental and sustainability goals.  As an example, we can look to the past.  Early in his career, Henry Diamond assisted the Chairman of the Outdoor Recreation Resources Review Commission, Laurance Rockefeller, in editing the Commission’s seminal report, Outdoor Recreation for America, that was delivered to President John F. Kennedy in 1962.  Among the Commission’s more significant recommendations was the idea to use revenues from oil and gas leasing to pay for the acquisition and conservation of public lands.  Congress took action on this recommendation, creating the Land & Water Conservation Fund in 1965 as the primary funding vehicle for acquiring land for parks and national wildlife refuges.  While the fund has been by all accounts a success in achieving its goals, much work remains to be done and the fund is regularly the target of budgetary battles and attempts to reallocate its resources to other priorities.  Today, the four federal land management agencies estimate the accumulated backlog of deferred federal acquisition needs is around $30 billion. 

I expect climate change will dominate the agenda for the young lawyers of our current era.  They will need to tackle challenges not only relating to controlling emissions of greenhouse gases, but also adaptation resulting from climate change.  Sea level rise, altered agricultural growing seasons, drought and water management, and other issues will increase in prominence for this next generation.

We can expect our infrastructure needs to continue to evolve – not only replacing aging roads, bridges, tunnels, railroads, ports, and airports, but also the move to urban centers and the redevelopment of former industrial properties.  Autonomous vehicles and drones also pose novel environmental and land use issues.  These trends will require us to apply “old” environmental tools in new ways, and certainly to innovate.  As my colleague Fred Wagner recently observed on his EnviroStructure blog, laws often lag developments, with benefits and detractions.  Hopefully the environmental lawyers of the future will not see – or be seen – as a discrete area of practice so much as an integrated resource for planners and other professions.  Only in this way can the environmental bar forge new solutions to emerging challenges.

The global production and movement of products creates issues throughout the supply chain, some of which are just coming to the fore.  From raw material sourcing through product end-of-life considerations, environmental, natural resource, human rights, and cultural issues necessitate an environmental bar that can nimbly balance progress with protection.  As sustainability continues its evolution from an abstract ideal to something that is ever more firmly imbedded in every aspect of business, products, services, construction, policymaking and more, environmental lawyers need to stay with their counterparts in other sectors that are setting new standards and definitions.  This area in particular is one in which non-governmental organizations and industry leaders often “set the market,” with major consequences for individuals, businesses, and the planet.

Finally, as technology moves ever faster, so do the tools with which to observe our environment, to share information about potential environmental risks, and to mobilize in response.  With limited resources, government enforcers are already taking a page from the playbooks of environmental activists, who themselves are bringing new pressures for disclosures and changes to companies worldwide.  With every trend noted above, companies must not underestimate the power of individual consumers in the age of instantaneous global communication, when even one or two individuals can alter the plans and policies of government and industry.

Before Henry Diamond passed away, he penned an eloquent call to action that appeared in the March/April edition of the Environmental Law Institute’s Environmental Forum (“Lessons Learned for Today”)I commend that article to you.  It shares the story of the 1965 White House Conference on Natural Beauty and how a diverse and committed group of businesspeople, policymakers, and conservationists (some of whom were all of those things) at that event influenced the evolution of environmental law and regulation for the decades to come.  Laws such as the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, and others have their roots in that Conference.  In recognition of his lifetime of leadership, Henry received the ELI Environmental Achievement Award in October 2015.  The tribute video shown during the award ceremony underscores Henry’s vision and commitment to advancing environmental law.  I hope it may inspire ACOEL members and others to follow Henry’s lead.

These are just a few things I think the future holds for environmental lawyers.  What trends do you predict?  How should the environmental bar and ACOEL respond?  

Cat on a Hot Stove-Lid: What We Should Learn from the Gold King Mine Spill

Posted on December 22, 2015 by Zach C. Miller

Mark Twain once wisely warned:

We should be careful to get out of an experience only the wisdom that is in it -- and stop there; lest we be like the cat that sits on a hot stove‑lid.  She will never sit on a hot stove-lid again -- and that is well; but also she will never sit down on a cold one any more.

While trying to clear the collapsed entrance to the inactive Gold King Mine in Colorado, EPA contractors in August 2015 inadvertently released over 3 million gallons of metal-laden wastewater into a tributary of the Animas River.  Partly because of EPA’s involvement, and partly because high iron levels turned the Animas River orange for several days, the incident generated considerable controversy and attention.

Subsequent views about what we should learn and do as a result of this spill have been quite divergent and, in this writer’s view, off the mark. 

As might be expected during this election season, one response was protracted administration-bashing Congressional hearings, aimed at the heads of both EPA (criticizing the Agency for not better controlling its contractor at this remote mountain site) and the Department of the Interior (which has no responsibility for the site but issued a requested report on the spill).  Not surprisingly, these blame-and-shame hearings were not focused on, and did not produce, constructive information or plans for preventing such events in the future.  However, they did cause EPA remedial efforts and related U.S. transactions at inactive mine sites to be put on hold, which was counter-productive for dealing with this problem. 

At the other extreme, some environmental advocates have asserted that this wastewater release from an inactive mine supports their view that U.S. mining law should be fundamentally overhauled, including to provide for substantial royalty payments to the government and imposition of major financial assurance requirements on miners under CERCLA Section 108.  Those calls ignore the fact that this historic site pre-dates subsequently adopted mine reclamation and bonding requirements imposed on current mines under state and federal law.  They also represent a sea-change in mining law that goes far beyond this inactive mine issue, would occur at a difficult economic time for the mining industry, and is unlikely to gain traction in this polarized political climate. 

Congressional reactions reflect those widely disparate positions, with new proposed bills ranging from a narrow proposal for grants to mining colleges to study the problem (H.R. 3734) to a broad mining reform act that imposes substantial new fees and royalties (H.R. 963).  One other proposed bill would freeze DOI’s Abandoned Mine Lands (AML) Program at $17 million per year and institute a “Good Samaritan” program to encourage third-party volunteer clean-ups at AMLs (H.R. 3843), and another would create a foundation to accept donations for AML cleanups, with one-time matches from the federal government of up to $3 million per year (H.R. 3844). 

Many of these proposals are either political posturing or over-reaching, and others do not focus on or effectively address the problem of abandoned mines.  Moreover, they either are unlikely to go anywhere in Congress, or would accomplish little if they do.  

However, there are effective steps we should take if we learn the following key lessons provided by the Gold King spill:   

·         There are tens of thousands of abandoned mines like Gold King that are already discharging polluted wastewater to thousands of miles of streams.  If we do nothing, such discharges will continue and worsen, and occasional blow-out releases like Gold King are inevitable. 

·         The damage and economic impacts caused by these abandoned mine sites are real and will increase. 

·         These mine sites are very complex and expensive to fix. 

·         Some states and volunteer entities are willing to address these sites if existing liability disincentives can be removed.

Given these circumstances, we should focus on practical approaches that will achieve real, near-term, on-the-ground remedial actions.  Furthermore, the approaches must be backed by meaningful sources of funding, and be politically achievable in the current, polarized political climate. 

A good start would be adopting an effective “Good Samaritan” law addressing the existing disincentives for third parties to remediate abandoned and inactive mine sites, coupled with meaningful federal funding initiatives.  The Keystone Policy Center is currently working to achieve consensus on such an approach. 

A second practical approach would be to use CERCLA National Priority List (NPL) designation at select sites to provide funding where no viable mine operators remain.  The Gold King incident has served as a catalyst for removing past local opposition to NPL listing for the upper Animas River drainage.  That’s a good beginning. 

We should heed Twain’s advice and use the real lessons of Gold King to move beyond politics and take practical steps like those noted above to start fixing these old mine sites.  And we should stop getting mired in the same, currently dead-end debates that lead to doing nothing and can be put aside for another day – lest we be like the cat that will never sit on a cold stove-lid.

Presidential Directive Mandates Expansive and Likely Unlawful No Net Loss Compensatory Mitigation Requirement for Most Federal Development Permitting

Posted on November 12, 2015 by Jeffrey Lepo

 

On November 3, 2015, President Obama issued a Presidential Memorandum establishing policies that are a significant departure from existing practice regarding compensatory mitigation for effects to natural resources from most federally approved projects.  The Memorandum, entitled “Mitigating Impacts on Natural Resources from Development and Encouraging Private Investment,” applies to all permits and authorizations issued by the Department of Defense (e.g., the U.S. Army Corps of Engineers), the Department of Agriculture (e.g., the Forest Service), the Department of Interior (e.g., BLM, USFWS, Bureau of Ocean Energy Management, etc.), EPA and National Oceanic and Atmospheric Administration  (e.g., National Marine Fisheries Service (NMFS) ), including actions taken by USFWS and NMFS pursuant to the Endangered Species Act.  Although it cannot be known today how the new policies will ultimately be implemented, the Memorandum is, at least as written, both anti-development and potentially draconian. 

 

The new Memorandum states that it is establishing certain policies premised upon “a moral obligation to the next generation to leave America’s natural resources in better condition than when we inherited them.”  In furtherance of this moral obligation, the President has established it to be the policy of the identified federal bodies (and all bureaus and agencies within them):

 

·         To avoid and to minimize harmful effects to land, water, wildlife and other ecological resources (natural resources), and to require compensatory mitigation for, the projects they approve.

 

·         To establish a net benefit goal or, at a minimum, a no net loss goal for mitigation of the natural resources each agency manages that are important, scarce or sensitive.

 

·         To give preference to advance compensation mechanisms in establishing compensatory mitigation.  “Advance compensation” is defined to mean a form of compensatory mitigation for which measurable environmental benefits (defined by performance standards) are achieved before a given project’s harmful impacts to natural resources occur.  This policy preference appears to somehow contemplate that compensatory mitigation will be achieved before the project is constructed and operated.

 

·         To use large-scale plans to identify areas where development is most appropriate, where natural resource values are irreplaceable and development policies should require avoidance, and where high natural resources values result in the best locations for protection and restoration.

 

The Memorandum also establishes certain deadlines for action, principally by the agencies of the Department of Interior (e.g., one year deadline for BLM to “finalize a mitigation policy that will bring consistency to the . . . application of avoidance, minimization and compensatory actions [f]or development activities and projects impacting public lands and resources.”; one year deadline for USFWS to finalize compensatory mitigation policy applicable to its Endangered Species Act responsibilities).

 

Some federal laws (e.g., Clean Water Act Section 404 permitting for filling of waters of the United States) already have well-developed compensatory mitigation programs; however, most federal permitting schemes have not been interpreted or implemented to authorize or require compensatory mitigation, let alone at no net loss or net benefit levels.  Accordingly, to the extent that the Memorandum is intended to require net benefit or no net loss compensatory mitigation through many/most federal permitting programs, such a directive would be a significant departure from existing practice, of untested legality, and arguably contrary to existing law.

 

Moreover, to demonstrate that compensation has occurred at a net benefit or no net loss, unless the adverse effects are offset through generation or preservation of in-kind resources (e.g., a duck for a duck), the “damage” to affected natural resources must first be valued.  Accordingly, if implemented so that compensatory mitigation is broadly required, the policy could lead to an extensive, time consuming and complicated valuation process.  One worst case scenario would be for this policy to result in some form of new natural resources damages assessment, the time and expense for which would be challenging to rationalize in the context of a development proposal where cost and time are relevant (i.e., for every development project).

 

Unless the Memorandum is rescinded or feebly implemented, or its implementation is held unlawful, it has significant strategic, permitting, legal and financial implications for many, if not most, major development projects.  Of course, it is likely to be difficult or impossible to challenge the new policies established in the Memorandum, except on a project-by-project permit-by-permit basis.  As such, the pressure for project proponents to navigate (rather than litigate) the new policies will be substantial. 

What? Another homage to Joe Sax?

Posted on October 22, 2014 by Jeffrey Haynes

Yes, and here’s why:  Joseph Sax’s writings remain as fresh today as when they were published. This blog — in noting his death earlier this year — described Sax’s revival of the public trust doctrine, for which he is justly famous. But some of Sax’s other studies stay relevant, and not only to the generation of environmental lawyers he taught at the University of Michigan Law School and at the University of California Berkeley School of Law.

Sax’s career focused not on the intricacies of pollution control statutes, but on the broader issues of allocation and management of scarce resources. The idea that public trust resources ought not to be diverted from public use, discussed in this blog, is the beginning. Citing Sax, the California Supreme Court in the Mono Lake decision injected public trust concepts into California prior appropriation doctrine.  As noted recently in this blog, California water allocation law continues to slouch toward the present. These issues show why Sax enjoyed teaching water law.

Sax delighted in challenging conventional views. In an early article, he exploded the myth, exemplified by supporters’ confidence in the National Environmental Policy Act, of “the redemptive quality of procedural reform.”  In 2002, he spoke at the University of Michigan about the Great Lakes. The assembled faithful expected him to reinforce their view that not one drop of water should leave the Great Lakes basin. Instead, to their dismay, he demonstrated why water allocation decisions should be based on an evaluation of alternatives, even if that meant water withdrawals from the Great Lakes. Some of the water allocation issues among riparian states that he explores in that speech were recently heard by the Supreme Court in Kansas v. Nebraska, concerning interpretation of an interstate water allocation formula, and will be considered in Mississippi v. Tennessee, which concerns pumping underground water across state borders.

One of the foundations of environmental law is the takings clause. Sax’s 1964 article, Takings and the Police Power, often cited by the Supreme Court, deserves re-reading for its lucid and compact analysis. Following the Lucas v. South Carolina Coastal Council decision, Sax imaginatively proposed an economy of nature underlying the market economy while criticizing the majority opinion in Lucas for being the outlier in takings law that we now know it to be. But Sax sympathized with the unfairness of takings law on property owners. Recently he noted that the Supreme Court has exhausted its efforts to develop a coherent takings theory. But, he said, that fact brings no solace to a late-in-the-game developer who, denied permits by a municipality that gave away the entire increment of infrastructure amenities to earlier-in-time developers, unfairly receives no compensation.

Management of public lands is a large part of environmental law. As we learned at the 2014 annual meeting, this College is embarking on a new initiative for East Africa community land use and natural resources rights. The underpinnings for such policies are found in Sax’s 1980 book Mountains Without Handrails, which proves the preservationist’s view of national park management. But management of private land adjacent to parks is equally important, as Sax explored in Helpless Giants: The National Parks and Regulation of Private Land. Sax was inspired to write this article when, after hard hiking through rhododendron “hells” in the Great Smoky Mountains National Park rising to the Appalachian Trail, he was surprised to see a luxury hotel — located on private land adjacent to the park — thrusting up beyond a forested ridge of the park.

Sax’s foray into the community values inhering in public and private art collections, Playing Darts with a Rembrandt, is echoed in the recent debate over whether the collection of the Detroit Institute of Arts should be sold to pay the city’s creditors. Although disclaiming an exact fit with the public trust doctrine, the Michigan Attorney General opined that the DIA held the art as a charitable trust for the public.

Sax received many awards and much praise. His extensive scholarship was reviewed by his peers in a 1998 Ecology Law Quarterly symposium introduced by ACOEL Fellow Richard Lazarus. He received the Asahi Blue Planet Prize in part for drafting the Michigan Environmental Protection Act, the citizen-suit statute discussed here. If these recognitions do not convince you, reading Sax in the original should persuade you of the continuing relevance of his scholarship.

Minefields (Still) Ahead: EPA’s Improved Good Samaritan Policy for Abandoned Mines Doesn’t Pan Out

Posted on April 7, 2014 by Zach C. Miller

For over forty years, the risk of incurring major liability under the Clean Water Act (CWA) has effectively discouraged “Good Samaritan” volunteers from cleaning up abandoned hardrock mine sites throughout the U.S. Past efforts to amend the CWA to remove this disincentive have been blocked, based in part on the assumption that EPA policies alone should be sufficient to remove the threat of CWA liability and effectively encourage such cleanups. 

In the words of the Gold Rush prospectors, that assumption and related agency policies have simply not panned out. A Good Samaritan Initiative adopted by EPA in 2007 and clarified and “improved” in 2012 has had virtually no effect on removing this threat of CWA liability or causing actual cleanups involving water impacts to occur. Meanwhile, willing Good Samaritans continue to be discouraged from conducting useful remedial actions, and these problem sites remain untouched.

During this same period, flexible state and federal “brownfield” and voluntary cleanup programs have cleaned up hundreds of former industrial sites and revitalized key urban areas, including in lower downtown Denver. But some members of Congress have rigidly refused to apply similar common-sense approaches to abandoned mine sites.

The time has come to recognize that informal agency policies encouraging these voluntary mine cleanups have not fixed and legally cannot solve this long-standing problem and to embrace the practical types of legislative approaches that have worked in the urban brownfield programs. The Good Samaritan CWA amendments introduced in 2013 by Senator Udall and others offer just such a practical solution. Past opponents of such legislation should acknowledge that agency efforts alone cannot remove the existing disincentive for cleaning up these sites and should support this modest, practical step to facilitate these mine cleanups.  

The Problem. According to the GAO, there are over 160,000 abandoned hardrock mines, mainly in the western U.S., that can leach heavy metals such as lead, mercury and arsenic into the environment. EPA’s estimate is over three times higher. EPA further estimates that historic mines have contaminated over 40 percent of the watersheds in the west and would cost more than $35 billion to clean up. These former mines are considered “orphan” sites, because their owners and operators are either dead, defunct or insolvent.

Remediating these sites has proven to be an intractable problem for several reasons. One is the technical difficulties and enormous costs of remediating such sites in full compliance with applicable environmental laws. Another is the risk of incurring substantial liabilities or obligations under those laws for a non-compliant or partial clean up.

The Disincentive. While CERCLA contains a “Good Samaritan” provision that shields qualified non-liable volunteers from incurring liability under that law when they conduct voluntary remedial actions, the Clean Water Act (CWA) currently contains no such exemption. Because the most serious of these abandoned mine sites involve impacts to water quality, this threat of CWA liability has severely inhibited both private Good Samaritans and state and local governments from conducting common-sense, voluntary cleanups that would significantly improve the affected watersheds.

Beginning in 1995 and continuing to the present, Senator Baucus and others have introduced various “Good Samaritan” amendments to the CWA aimed at removing this major legal disincentive. However, because the amendments would have allowed less than full compliance with otherwise applicable water quality standards and discharge permit requirements, certain NGOs and members of Congress to date have strongly opposed and defeated such efforts.

This well-intentioned opposition has been misguided and a classic instance of the perfect being the enemy of the good. By demanding that remediation of these orphan sites be fully compliant and permitted without exception, only a handful of minor abandoned mine cleanups involving water have occurred during the last four decades.

Ineffective EPA Initiative. To address this Congressional logjam and currently discouraged Good Samaritans, EPA has laudably attempted to address this disincentive by adopting in 2007 an administrative “Good Samaritan Initiative”. The Initiative consisted of an EPA statement of Interim Principles and a “Comfort Letter” and model settlement agreement offered to non-liable entities that volunteer to remediate abandoned hardrock mines. This initial guidance focused primarily on the fact that, under the CERCLA 121(e) “permit shield,” no permit would be required under the CWA or other laws while an on-site CERCLA “removal” action was occurring. However, that guidance did not address the fundamental question troubling Good Samaritans about what happens once the removal is completed but some discharge unavoidably continues. As a result, that Initiative did little to allay those concerns and had no appreciable effect on increasing efforts to remediate abandoned mines with water impacts.

In recognition of that ineffectiveness, EPA in December 2012 attempted to bolster its 2007 Initiative by issuing a guidance Memorandum describing two clarifications to the 2007 Guidance. The first was that a CERCLA removal action could be extended through periodic monitoring or other activities, which would lengthen the period when the CERCLA permit shield would apply. However, the prospect of being engaged in a very-long-term CERCLA action has neither enthused Good Samaritans nor addressed their root concern about CWA liability once the CERCLA action is done.

To address that key issue, EPA further clarified that, based on the application of five listed factors, a Good Samaritan cleaning up an abandoned mine “might” not be considered by EPA to be a liable “operator” required to obtain an NPDES discharge permit. All of those factors relate to whether the volunteer has the “power or responsibility” to access the site and control the ongoing discharge after its remedial action is finished.

While issued with much fanfare in 2012, this “improved” Good Samaritan Initiative has again had virtually no effect on addressing the concerns of potential volunteers or increasing cleanups of these sites, for several reasons. First, EPA has emphasized that this Initiative merely explains its current interpretation but is not binding on EPA, third party NGOs, or the courts and “may not be relied on to create a right or benefit … by any person.” Not exactly the assurance that Good Samaritans want and need. Second, EPA stresses that this guidance applies only to Good Samaritans at orphan mine sites, but the factors for determining whether an entity is a CWA-liable “operator” cannot be unique to those parties. As a result, potential Good Samaritans have rightly been skeptical whether they can make any potential CWA liability vanish simply by arranging that their right to access and conduct operations on the affected site terminates upon completion of some defined task. If a mining lessee or contractor attempted such an arrangement, EPA and the courts no doubt would reject any claim it was not a CWA-liable operator. There currently is no legal basis to treat volunteers any differently. This point also offers no comfort to a governmental volunteer, who likely will always have the power of access and thus trigger operator liability.

The 2012 memo also repeatedly indicates that, if a Good Samaritan is not deemed a responsible operator, then the site owner would be required to comply with NPDES permitting requirements. But EPA ignores the fact that, at these orphan sites, there simply is no owner (unless it is the U.S., which to date has largely ignored its own liability).

Over a year after issuance of this “improved” Good Samaritan Initiative, it is clear that this EPA policy has been ineffective in increasing mine cleanups or addressing the CWA legal disincentive for such actions. To the contrary, several groups dedicated to these voluntary efforts have made clear that these nonbinding agency guidance documents have had little to no impact, and the groups’ efforts continue to be stymied in the absence of effective legislative reform.

The Proposed Legislative Fix. To address this problem, Colorado Senators Udall and Bennett have introduced S. 1443, the Good Samaritan Cleanup of Abandoned Hardrock Mines Act of 2013. The bill creates a new Good Samaritan Permit under the CWA, to be issued by EPA or an approved State or Tribe, that would authorize a Good Samaritan volunteer to conduct a specified remedial action at an abandoned mine site. Those actions could include relocating waste rock, re-routing drainages, establishing wetlands, and similar measures that would greatly improve watershed conditions, but they would not need to result in complete compliance with otherwise applicable water quality standards or require a long-term discharge permit. Compliance with that special permit would then shield the volunteer from liability under the CWA and cure the current disincentive for volunteers willing to address these sites.

This huge, languishing problem of abandoned hardrock mine sites needs a solution. This bill isn’t perfect. But it’s a good start. Let’s get started.

Keystone XL, the Old Testament and Attorney Compensation

Posted on February 13, 2014 by Keith Hopson

A former federal district judge was fond of telling his law clerks that Fifth Circuit Court of Appeals opinions were like the Old Testament. “You can find something there to support about any proposition you want.” The January 31, 2014 release of the State Department’s Final Supplemental Environmental Impact Statement for the Keystone XL Pipeline Project brought Judge Roberts’ words to mind.

The Keystone XL Pipeline Project backers tout the report’s conclusion that because the Canadian tar sands oil will be developed with or without the construction of the pipeline, it will not “significantly exacerbate the effects of carbon pollution” (to use the President’s avowed standards for pipeline permit approval). On the other hand, pipeline opponents point to the fact the report does not specifically address the project’s greenhouse gas emissions. Both are valid points, but the gist of the report appears to be the project has finally cleared its environmental hurdle. 

That said, other hurdles remain. While this long-awaited environmental impact statement is an important step in the process, it is just that, a step. Ultimately, the final decision on the pipeline permit will involve something more akin to the common standard for law firm attorney compensation, the so-called “all factors considered” standard. In this instance, that decision will involve economic and national and international political concerns, as well as how the project affects U.S. and international climate policy.

With the issuance of the report, the 90-day interagency consultation period begins. Once EPA, and the Departments of Energy, Defense, Transportation, Justice, Interior, Commerce, and Homeland Security weigh in, the Secretary of State will at some point make to President Obama a permit recommendation. The President, of course, has the final say.

Stay tuned; the project appears to have cleared another hurdle, but the five year and counting race is far from over.

Those Dam Polluters!

Posted on August 23, 2013 by Rick Glick

The Columbia and Snake River federal network of dams, and the abundance of low cost electricity it produces, has long been the cornerstone of the Pacific Northwest manufacturing economy.  It has also supported another industry—the legions of lawyers fighting over the environmental effects.  The latest iteration is an attack brought by Columbia Riverkeepers against the Army Corps of Engineers for oily discharges from the dams.

Riverkeepers filed lawsuits in U. S. District Courts in both Oregon and Washington alleging that oils released from the dams are discharges of pollutants for which a National Pollutant Discharge Elimination System (NPDES) permit is required under the Clean Water Act (CWA).  The oils are used for lubricating turbine equipment, which Riverkeepers allege are released every day through spillways and penstocks at Bonneville, John Day, McNary, Ice Harbor and other federal dams.  The suits seek declaratory and injunctive relief, mandating that the Corps secure NPDES permits.

Oily discharges are common among hydroelectric facilities.  For the most part these are minor releases, though the complaint does allege a spill of 1,500 gallons of transformer oil containing PCBs from the Ice Harbor Dam on the Snake.  Most privately owned dams in the region operate under general permits encompassing the small-volume releases.  A few have NPDES permits.

As I have noted in prior blogs, courts have held that dams are “nonpoint” sources of pollution, which do not require a NPDES permit.  These holdings were in the context of dams merely passing through pollution flowing into reservoirs from upstream sources, as opposed to adding pollutants.  However, there have been cases where the discharge below the dam was not simply a pass through, and the court found a permit was required.

In relation to the ongoing litigation over the dams’ effect on salmon spawning, rearing and, migration, the Riverkeepers case will not likely have a significant effect on Corps operations.  Even if the suit is successful, oily discharges can be managed, if not wholly eliminated.  These cases should settle.

New Frontiers of Environmental Advocacy

Posted on August 21, 2013 by Eugene Smary

Since one of the objectives of the ACOEL blog is to promote thought and discussion, I have decided to plunge in with abandon.  Hopefully the objective of promoting discourse will be met.

We all have reconciled ourselves to the fact that environmental advocacy has become very politicized on all portions of the political spectrum—so much so, that environmental advocacy oftentimes morphs into political/partisan advocacy.  In the last several years we have seen environmental advocacy reach a new level.  I leave it to the reader to decide whether that level is high or low.  I have my point of view, and I suspect the reader will see that soon enough.

Two projects, one proposed, and one still only in the realm of “contemplation” serve as lightning rods for this new form of environmental advocacy:  the Keystone XL Pipeline project and the potential Pebble Mine.  Keystone XL formally has been proposed.  The Pebble Mine has yet to have a permit application submitted but nonetheless is the subject of protracted and unique opposition.

It is becoming increasingly common to witness the advocacy relating to the Keystone XL Pipeline project—unprecedented in both its breadth and emotional intensity--from proponents and opponents alike.  Proponents have tended to follow the more traditional advocacy approach of published opinion pieces and structured meetings and association support.  The opposition has been much less traditional.  Certainly there has been a history of focused opposition to some projects viewed by some as adversely impacting the environment, but those have been very focused locally or at most regionally.  We all recall “tree sitters” opposing harvesting of redwood timber.  Street theatre is not uncommon.  Here in Michigan I have seen an individual dressed up as a skeleton in opposition to use of a school built on an abandoned municipal landfill, or dressed up as a fish in opposition to a proposed hard rock mine.  The call for civil disobedience in opposition to Keystone XL goes well beyond street theatre, however.  It is something that has not been seen, at least in my memory, since the days of the Civil Rights and Vietnam War protests.  Lost in all of the demonizing of the development of hydrocarbons in Alberta, Canada’s northern reaches (called “oil sands” by proponents and “tar sands” by opponents) is the fundamental impact that a denial of the Presidential Permit necessary to construct the pipeline will have on the diplomatic relationship between Canada and the United States.   The failure to issue a permit thus far has contributed substantially to a reconsideration of Canadian policy goals and economic development.  No longer is the Canadian policy as focused and U.S.-centric as it once was.  Canada is reevaluating the degree to which it can continue to trust its southern neighbor.  It is not a stretch of the imagination to read the tone and tenor of the “policy” discussion and advocacy antics as being officious.  An offer to “help” with the evaluation of the climate change risk of the bitumen production and methods of amelioration, while perhaps well-intentioned, certainly is capable of being seen as sanctimonious, or even arrogant.  The old images of the “ugly capitalist”, and the “ugly American” are being supplemented by images of the “ugly environmentalist.”  The increasingly strident nature of the anti-Keystone advocacy ignores or dismisses broader foreign policy considerations.

Now, if that is not enough to get discussion going, I don’t know what is.  But, on the off chance that there is need for more encouragement, let me raise one other advocacy project:  the contemplated Pebble Mine located in the Bristol Bay, Alaska, watershed.  Pebble Mine may not be as well-known nationally as Keystone XL, but some NGOs are trying to make certain that it does become known—and opposed.  If Pebble is known for anything, it is that it is the subject of an environmental assessment being undertaken by U.S. EPA, in advance of any permit application having been filed and without any proposed mining plan having been developed.  Now Pebble has a major mail order retailer using its customer-based mailing list vigorously and bluntly to oppose the Pebble project.  Within the last several weeks I received a “fly fishing” catalogue from this company, a company from which I have purchased products for well over 30 years.  I started seeing full-page advertisements opposed to Pebble in the interior of its catalogues within the last year.  This most recent mailing is the first time I received a catalogue whose cover was emblazoned with the words “Pebble Mine” inside a red circle with a slash through it and the admonition to “JOIN THE FIGHT” at the company’s website.

In an age where social issues are increasingly being highlighted in commercial advertisements, perhaps I have been lulled into thinking that subtlety makes such advertising acceptable.  There is nothing subtle about this fly fishing catalogue’s assault on a mining project. Opposition to mining in sulfide ore bodies appears to have become a focal point for the leadership of this company.

This is a free country and we all enjoy freedom of speech.  The ultimate power, of course, is to take one’s business elsewhere, but I just found this to be a rather unique “in your face” form of environmental advocacy.  If I want to receive environmental advocacy—from any quarter, I will ask for it.  If I wish to purchase goods and get on a mailing list for that purpose, I expect to get future mailings about similar products.  I do not expect—or authorize—use of my name and address to receive decidedly political advertising nor biased social commentary.  I know how and where to get plenty of that in a setting where it is both thoughtful and analytical.  Combining a commercial catalogue with a political advertisement, or rather turning a catalogue into a political advertisement, crosses the line.  Perhaps it is a line that we as a society are willing to tolerate in this age of political intolerance.  We will see.

Now, let the discussion begin.

Petroleum Refinery Enforcement Initiative 2.0

Posted on August 5, 2013 by Paul Seals

Enforcement with a Flair

EPA has seen the smoke.
This certainly is no joke.
Benzene is a neighborhood scare,
With upsets going to the flare.

On July 10, the Department of Justice and EPA announced the lodging of a consent decree with Shell Oil Company to resolve alleged Clean Air Act violations at Shell’s refinery and chemical plant in Deer Park Texas.  This agreement represents the fourth “refinery flare consent decree” in the past year.  More are expected.

Shell will spend $115 million to control emissions from flares and other processes, and will pay a $2.6 million civil penalty.  EPA alleged that Shell was improperly operating its flaring devices resulting in excessive emissions of benzene and other hazardous air pollutants.  Shell will spend $100 million to reduce flare emissions.

These flare consent decrees represent a new chapter in EPA’s national Petroleum Refinery Initiative (“PRI”), which, beginning in 2000, resulted in the entry of 31 settlements covering 107 refineries in 32 states, affecting 90% of the domestic refining capacity.  EPA did address refinery flares as one of the marquee issues in PRI consent decrees – compliance with the New Source Performance Standards (“NSPS”) for Petroleum Refineries.

EPA is now pushing the envelope to impose “regulatory requirements plus.”  Through an enforcement alert in August of last year, EPA warned industry that there were significant issues with flare efficiency and excessive emissions.  EPA Enforcement Alert:  EPA Enforcement Targets Flaring Efficiency Violations.

What is EPA doing?  What is the basis of this Petroleum Refinery Initiative 2.0 and the imposition of “regulatory requirements plus”?

EPA bases this new initiative on the “general duty” requirements.  NSPS requires that at all times owners and operators should operate and maintain a facility or source consistent with “good air pollution control practices.”  In addition, Section 112r of the CAA requires owners and operators to maintain a safe facility by taking such steps as are necessary to prevent releases of hazardous air pollutants (“HAP”), and to minimize the consequences of accidental releases which do occur.  Accordingly, with no threshold amount, any release of a listed HAP (e.g. benzene) that could have been prevented violates this general duty.  If a flare smokes, there must be a violation.

This general duty is used to require control measures that go beyond those specified in the regulations.  The consent decrees include conditions addressing flare combustion efficiency limits incorporating automated controls with complex and expensive monitoring systems, flaring caps for individual flares and the overall refinery, and flare gas recovery systems for individual flares.

The enforcement train has left the station.  Who will be next in line?  How much will the ticket cost?  Are there rulemaking or other actions that may be taken to slowdown or stop the train?  Flares are not unique to petroleum refineries and petrochemical plants (e.g. flaring in oil and gas production facilities).  Will EPA provide other industries the opportunity to go for a train ride?

The Ghost of Offshore Boundaries Past

Posted on July 24, 2013 by James Palmer Jr.

At the 2013 Offshore Technology Conference in Houston, nobody was really surprised to hear Gulf Coast and Alaska Governors calling for an expansion of offshore drilling activity and streamlined permitting processes.  But, more than a few were probably surprised to hear the Governors of North Carolina, South Carolina, and Virginia echo the same sentiments, especially because drilling activity offshore these three states is currently banned by Presidential edict.
 
As the post-BP offshore drilling debate marches on, there just might be some interesting wrinkles down the way between and among the allied states that support a resurgence of seaward exploration and production operations.  One possibility deserves a passing note.
 
During its 2011 Regular Session, the Louisiana Legislature passed, and the Governor signed into law, Act No. 336, which extended the offshore boundary of the State from the current three geographical (nautical) miles to three marine leagues (nine geographical miles), as measured from the coastline.  At its June 2012 meeting, the Louisiana Wildlife and Fisheries Commission followed suit by formally adopting the legislative mandate and conforming its marine regulatory jurisdiction accordingly.  The new boundary created by Act No. 336 by its terms is subject to recognition by Congress or the courts.
 
While a Louisiana official was quoted in the media afterwards as saying that Mississippi and Alabama should join Louisiana and launch the same initiative against the federal government, the Mississippi Commission on Marine Resources, at its July 2012 meeting, adopted a Resolution opposing the action of its Louisiana counterpart.  Thus, the issue was joined at that point, at least at the state agency level.  But, not to be outdone in statutory law, the Mississippi Legislature, in its 2013 Regular Session, amended Section 3-3-1, Mississippi Code of 1972 Annotated, through the adoption of HB 1072, which mimics the 2011 Louisiana legislation by extending the boundary of Mississippi offshore territorial waters from three geographical miles to three marine leagues.  This legislation became effective on July 1, 2013.
 
For perspective, a history lesson is necessary.  In a stunning decision in 1947, followed by two more in 1950, the United States Supreme Court decreed that coastal states have no claim to any submerged lands offshore.  Because these decisions directly impacted not only the states along the Atlantic, Pacific, and Gulf Coasts, but those along the Great Lakes, as well, the adverse reaction to them was swift and strong.  After several years of wrangling, Congress passed the Submerged Lands Act (the Act) in 1953 to undo what the Supreme Court had done.
 
Of the three major components of the Act (i.e. lands under navigable inland waters; tidelands; and lands under the open sea), the centerpiece is a Congressional grant of state title to, and jurisdiction over, certain offshore areas.  Specifically, states along the Atlantic and Pacific Coasts were granted submerged lands extending three geographical miles seaward of their respective coastlines.  The Great Lakes States were granted submerged lands extending to the international boundary.  States along the Gulf of Mexico were granted submerged lands extending not less than three geographical miles nor more than three marine leagues seaward of their respective coastlines. 
 
But, there the Congress stopped.  Except to define the term "coastline" as "the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters," the law gives no specific geodetic references or methodologies for its delimitation.  And, the ultimate decision regarding the respective offshore domains of the five states bordering the Gulf of Mexico was left to be determined by the courts. Simply put, the Act thus set the stage for more court battles to follow.

In 1960, the Supreme Court determined that the Submerged Lands Act boundaries for Louisiana, Mississippi, and Alabama should extend three geographical miles seaward from their respective coastlines.  The Court further determined that the Submerged Lands Act boundaries for Texas and the Gulf Coast of Florida should extend three marine leagues seaward from their respective coastlines, because of the different histories of admission to the Union of these two states.   But, as with the Congress, the Supreme Court made no attempt to delimit the respective "coastlines" for any of the five Gulf Coast states, which inevitably led to even further protracted litigation.
 
Following the 1960 Supreme Court decision, several bills were introduced in the Congress to amend the Act to specifically grant to Alabama, Mississippi, and Louisiana submerged lands extending three marine leagues from their respective coastlines.  These efforts failed.

The next eruption of litigation targeted the Mississippi Sound.  In April 1971, the United States for the first time publicly disclaimed the inland-waters status of Mississippi Sound by publishing a set of maps depicting several irregularly shaped polygons between the mainland and the barrier islands that were denoted "enclaves of high seas," the submerged lands underlying them thus belonging to the federal government.  The States of Mississippi and Alabama were once again launched into litigation against the United States. 
 
In 1985, the Supreme Court trounced the federal government by adopting the Special Master's determination that Mississippi Sound constitutes a "historic bay" and thus is inland waters in its entirety.  Further, the Court also adopted the Special Master's determination that the "coastline" is the line of ordinary low water on the south shore of the barrier islands.  The Court then directed the parties to prepare a proposed final decree and submit it to the Special Master for consideration by the Court.  This process, which took another seven years, involved Supplemental Decrees in which the baselines for establishing the coastlines of both Alabama and Mississippi, described using point-to-point geodetic coordinates, were approved by the Court and set out in the decrees.
 
Thus, the three-geographical-mile offshore submerged lands boundary for these two states, granted under the Act and subsequently established by the Supreme Court in its 1960 decision, was then precisely determinable.  At last, in 1992, after over three decades of fighting over the federal-state submerged lands boundary for Alabama, Mississippi, and Louisiana, the Supreme Court put the matter to rest – until now.
 
Whether or not the 2011 Louisiana legislation and/or the 2013 Mississippi Legislation will actually lead to any changes in the current offshore submerged lands boundaries of these states remains to be seen.  As already noted, attempts over a half century ago to accomplish the same objective as that of Act No. 336 and HB 1072 failed.

Quite obviously, both Alabama and Texas have considerable vested interests in the actions now taken by their neighboring states.  Less obvious, though, is the prospect that, if Congressional action is mounted in furtherance of either Act No. 336 or HB 1072, nobody should be surprised if any of the East Coast or West Coast states (or Alabama), which were also granted three-geographical-mile offshore submerged lands boundaries under the Act, might be heard to say, "Me, too."

DOE Conditionally Approves Second Natural Gas Export License

Posted on May 30, 2013 by Deborah Jennings

On Friday, May 17, the Department of Energy (DOE) announced it had conditionally authorized Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (collectively Freeport) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States from the Freeport LNG Terminal on Quintana Island, Texas.  This marks only the second time that the DOE has granted a natural gas export license to non-FTA countries, and only the first after DOE ceased action on all applications pending a study of the economic impacts of LNG exports.  The Freeport approval marks a noticeable, but likely incremental shift in US policy towards increased export of natural gas to non-FTA nations, opening up new markets for the boom in domestic natural gas production.

The DOE rejected opponents’ arguments that the project would be inconsistent with the public interest.  Among other reasons, the DOE found that the proposed exports are likely to yield net economic benefits to the US, would enhance energy security for the US and its allies, and were unlikely to affect adversely domestic gas availability, prices or volatility. Accordingly, DOE conditionally granted Freeport’s Application, subject to satisfactory completion of an environmental review pursuant to the National Environmental Policy Act (NEPA) by the Federal Energy Regulatory Commission (FERC) and DOE.  FERC will serve as the lead NEPA review agency. DOE will subsequently reconsider the conditional order in light of the NEPA analysis led by FERC and include the results in any final opinion and order.

Environmental issues will now take center stage as interested stakeholders seek to influence the government’s conclusions in the NEPA review.  In support of its application, Freeport extolled the following environmental benefits of the project:

•    Natural gas, the cleanest burning fossil fuel, would replace coal-fired power resulting in substantial reductions in greenhouse gas and traditional air pollutants. 
•    Compared to the average coal-fired plant, natural gas fired plants emit half as much carbon dioxide (CO2), less than a third of the nitrogen oxides, and one percent of the sulfur oxides. 
•    Natural gas, if used as a transportation fuel, also produces approximately 25 to 30 percent less CO2 than gasoline or diesel when used in vehicles, and is not a significant contributor to acid rain or smog formation.

Opponents of the project, however, are less convinced of its environmental benefits.  These include the Sierra Club, the Delaware Riverkeeper Network (consisting of 80 organizations), NRDC, among others.  Specifically, they assert that LNG exports will increase demand for natural gas, thereby increasing negative environmental and economic consequences associated with fracking, the process used for shale gas production.  They argue that the DOE’s two-part study of the economic impacts of LNG exports, upon which DOE relied in conditionally granting Freeport’s application, failed to consider the cost of the environmental externalities that would follow such exports, which include:

•    Environmental costs associated with producing more shale gas to support LNG exports;
•    Opportunity costs associated with the construction of natural gas production, transport, and export facilities, as opposed to investing in renewable or sustainable energy infrastructure;
•    Costs and implications associated with eminent domain necessary to build new pipelines to transport natural gas; and
•    Potential for switching from natural gas-fired electric generation to coal-fired generation, if higher domestic prices cause domestic electric generation to favor coal-fired generation at the margins.

Sierra Club and other organizations have previously challenged the adequacy of FERC’s and DOE’s NEPA determinations in other LNG export applications.  In the first LNG export license approval for Sabine Pass Liquefaction, LLC (DOE Docket. No. 10-111-LNG), Sierra Club, as an intervener in the FERC proceeding, challenged the adequacy of FERC’s NEPA compliance, and the lawfulness of the FERC’s determination to authorize the Project facilities. The FERC addressed these concerns and found that if a series of 55 enumerated conditions were met, the Project would not constitute a major Federal action significantly affecting the quality of the human environment. 

After FERC authorized the Liquefaction project, Sierra Club filed a motion to intervene out of time before DOE , again challenging FERC’s NEPA determinations.  DOE rejected Sierra Club’s motion, and granted the final order approving the LNG export on August 7, 2012.  Sierra Club subsequently sought a rehearing on the final order which was also rejected by the DOE in a January 25, 2013 order

Similarly, earlier this month, Sierra Club and other environmental organizations objected to the proposed Dominion Cove Point LNG export terminal in Maryland, arguing the project would harm the Chesapeake Bay’s economy and ecology, increase air pollution, and hasten fracking and drilling in neighboring states.  On May 3, 2013, the coalition filed public comments and a timely motion to intervene in the proceedings calling on FERC to conduct a thorough environmental review, or prepare an EIS, of the project.  The proposed terminal will be the only LNG export facility in the east coast, providing foreign markets with access to natural gas from the Marcellus Shale.

Cheap Natural Gas Prices: Prelude to Energy Unreliability and Price Volatility

Posted on May 14, 2013 by Michael Hockley

Cheap gas prices driven by a boom in new shale gas development, coupled with more stringent emissions controls for coal fired plants, are causing a shift from coal to natural gas as the primary source of electric power in the United States.  In the short term, most welcome this shift because natural gas produces significantly fewer greenhouse gas (“GHG”) emissions.  But it appears increasingly certain that in the long run, this shift will result in decreased energy grid reliability and significantly higher electricity costs due to natural gas price volatility.

A recent Duke University study concludes that the cost of compliance with new emissions standards could make almost two-thirds of existing coal fired plants “as expensive as natural gas even if natural gas prices rise.”  This combination of low gas prices and the high cost of coal emissions compliance already has resulted in replacement of many coal plants instead of retro-fitting them with expensive environmental controls.  Add to that the uncertainty of potential future GHG emissions standards, and construction of new coal fired power plants is at a near standstill.  

The Rocky Mountain Coal Mining Institute (“RMCMI”) estimates that these factors will combine to force closure of up to 100 gigawatts of coal plant capacity, or approximately one third of the coal-fired fleet, resulting in a net increase of 32 gigawatts of gas capacity in the next three years. By 2020, RMCMI estimates that gas generating capacity will exceed that of coal, nuclear, and hydroelectric combined.  The RMCMI further projects that the shift to natural gas generation will cause the demand for natural gas to exceed even the most rosy new shale gas production predictions, causing volatile natural gas price swings.  

Grid reliability problems and gas price volatility were highlighted by Gordon van Welie, the head of New England’s power grid, during recent testimony before Congress.  He observed that more than half of New England's electricity is generated from natural gas, which has displaced a more diversified mix of oil, coal, gas and nuclear power over the past ten years.  

He testified that even though natural gas generally is plentiful, New England’s inadequate gas pipeline capacity limits supplies during peak usage.  For example, during a recent extreme cold snap in New England, “natural gas prices in late January spiked to $34/MMBtu, in contrast to prices below $4/MMBtu across most of the country.” The high gas prices caused wholesale electricity price spikes of more than 100% in January and 300% in February 2013 compared with 2012.  There also were “multiple instances where generators could not get fuel to run,” including one instance when more than 6,000 MW were offline due to fuel shortages.  Testimony at 7.  To avoid even worse problems in the future, he urges increased construction of pipeline infrastructure, but construction of gas pipelines will take time.  In the short and intermediate term, he predicts continued price volatility and grid reliability problems during peak usage.  

In addition to pressures from increased usage of natural gas in the United States, there also is increasing support within the Obama Administration to side with those seeking to export liquefied natural gas because prices in foreign markets are much higher.  If the export of natural gas becomes a reality, then domestic gas prices likely will increase even more.  

Although the vast shale gas reserves are fueling a shift to natural gas power generation with a corresponding reduction in GHGs, over-reliance on natural gas will almost certainly have the unintended consequence of causing grid reliability problems and volatile price spikes.  This likelihood argues for a more balanced energy portfolio with a broad mix of power from renewable, hydropower, coal, oil, nuclear, and natural gas.  To insure future stable energy prices and reliable energy production, electric utilities and state and federal regulators should take a long term view when deciding whether to shift to natural gas generation and decommission existing coal and nuclear plants.

Energy Resources Exports: Good for America? Good for the Environment?

Posted on May 10, 2013 by Sheila Slocum Hollis

Proposals to export liquefied natural gas (“LNG”) produced in large part from shale gas recovered by hydraulic fracturing techniques or “fracing” continue the public debate about the desirability of exports of other energy resources.  This political, regulatory, environmental and trade debate engages powerful politicians, lobbyists, environmental groups, trade associations, developers, producers, state regulatory authorities, consultants, academics, and landowners, and a broad spectrum of the press and public. 

On its face, the notion of substantial exports of LNG to both countries with which the U.S. has free trade agreements (FTA) in place and those it does not, seems highly attractive.  Such exports would improve the balance of trade deficits, create new jobs associated with the production; and produce tax revenue.  And, from the broad environmental perspective, LNG exports would lower greenhouse gas emissions (GHG) in countries with heavy reliance now and in the future on coal or oil for electric generation, or in countries with need for replacement of nuclear facilities.

Query then, what are the factors that engender the impassioned debate on energy resource export policy?  Key are:  (1) fears of massive development of “frac” gas, freighted with concern over impacts on water, air, and use.  Analogous to the Keystone XL battle, another concern is development of the unconventional gas for the benefit of foreign interests, particularly those without an FTA in place with the U.S. (export to those countries with FTA agreements with the U.S. is deemed by law to be in the public interest).  (2) A second issue in contention on LNG is the impact on domestic energy prices if significant LNG exports limit availability of natural gas for domestic industrial and other uses.  (This issue harkens back to the energy crises of the 1970s when natural gas availability was tight and energy prices sky high.) 

So, although not explicitly an environmental-based objection, such opponents of LNG exports  find friendly bedfellows with the environmental objectors and the commercial interests concerned about their ability to rely upon and benefit from increased gas supply.  Industrial interests argue that stopping exports to non-FTA countries, particularly the insatiable Asian markets, will result in an industrial renaissance with jobs and development growing significantly.  And, some opponents of LNG exports to non-FTA countries ironically, (to this blogger at least) express little regard for overall environmental benefit to potential importing countries and thus the globe.  Rather, the impact on the United States from development of unconventionally sourced gas supply has been their focus point.  Yet, LNG is only part of the energy export debate.

Further complicating this analysis is the parallel potential increase in the export of U.S. coal to energy hungry nations, particularly in Asia.  As noted above, there is a broader questioning on the entire topic of U.S. energy resources exports: LNG, oil or refined products and coal.  In addition to the Keystone XL pipeline standoff, many environmentally oriented players (e.g., the Sierra Club) and political leaders have expressed reservations about the export of U.S. coal for two primary reasons – the impact on the U.S. of new infrastructure for storage, transportation and increased mining activities, and the increase in GHG emissions worldwide as a result of heavier coal-fired electric generation.  And in the past months, several proposed coal export projects have been scrapped. This energy export issue makes for a complicated stew of federal, local and regional politics.  What makes the entire public war of words (and the behind the scenes maneuvering) so fascinating is the question of who or what decides where and with what restrictions U.S. energy resources are to be marketed to the world – the federal agencies, the state and local governmental entities, or the market?  The next few months may provide guidance on LNG and perhaps the Keystone XL pipeline, however, the national and international implications of these decisions are so important that it is unlikely that peace will settle on these matters for decades.

Decommissioning Power Plants: A Process Without a Standard Regulatory Framework

Posted on May 7, 2013 by Pamela Giblin

The confluence of aggressive new EPA regulations targeted at coal-fired power plants and low natural gas prices has made the decommissioning of older coal-fired plants substantially more likely in the coming years. Decommissioning a plant does not occur within a specific regulatory framework. In many cases, unless there is a suspected public health threat, potential environmental conditions at the plant do not have to be reported to government agencies. For that reason environmental remediation of a plant site is often addressed in the property sale and redevelopment process.

But the shut down and decommissioning of power plants nonetheless has significant regulatory implications, and the reality is that analysis of regulatory obligations and advance planning, including a proactive strategy for interacting with agencies and other stakeholders, is essential. Understanding obligations requires review of existing permits and the underlying regulatory landscape. And that landscape may shift under your feet – for example, new regulations for coal combustion residuals on the horizon may implicate the closure of certain waste management units.

The regulatory landscape may also provide opportunities to maximize value. There are a wide variety of emission credit programs that vary by jurisdiction. Identifying and capturing emission credits brings value to the table. Similarly, water rights, to the extent they are marketable in a particular jurisdiction, could be a source of revenue.

On the practical front, laying out a smooth decommissioning path through careful planning may help avoid stoking the fire of agency, local or public ire. The agency may have a formal role to play depending on the permit conditions or applicable regulations, but there may also be extensive agency oversight exercised through pursuit of enforcement actions. Particularly where community interest is high, local, state or federal agencies may have a heightened interest and enforcement provides them an avenue for involvement in the site that might not otherwise exist. So it is important to recognize the key stakeholders early and to understand how their interest may translate to pressure on an agency to leverage any violations.

If the site is one with good redevelopment potential, finding and working with a credible and savvy purchaser may keep the focus on the end game and allow for appropriate risk-based standards to be deployed against a more concrete vision for the future of the site. Once there is a well-developed understanding of the regulatory obligations associated with the particular plant and the overall objective for the site after decommissioning, it may be the moment to reach out to the state and federal agencies, and perhaps key stakeholders, with early, accurate and contextualized information.

Because there is not a standard regulatory framework to apply, experience over the coming years as plants come offline will be telling – it is that experience that will provide useful frameworks for up front, comprehensive analysis and strategic outreach for a smooth path through decommissioning.

Reuse of Contaminated Groundwater- Is It Time To Be More Innovative?

Posted on April 10, 2013 by Charles Efflandt

According to the recent U.S. Drought Monitor, approximately 65% of the contiguous United States is currently experiencing “abnormally dry” to “exceptional drought” conditions. In my part of the country, a recent projection indicates that a reservoir supplying a significant portion of our municipal water supply could dry up within 3-4 years if severe drought conditions persist. Although an “Aquifer Storage and Recovery” program was previously developed to enhance the available supply of groundwater, it is only designed to replenish the drinking water aquifer from excess river flow during flood conditions—a rare occurrence during a severe drought.

I am not capable of allocating percentages of fault for this persistent drought between anthropic climate change and extreme climatic occurrences that are “normal” in the context of geologic time. However, I am persuaded by the argument that “climate change,” by whatever definition you choose to give it, is a problem not only of causation and prevention, but also of adaptation. A previous posting on the need to prioritize adaptation to climate change states the argument well. Is it time we give more thought to groundwater replenishment as an adaptation tool?

My practice includes representing clients at various hazardous substance release sites, under both state and federal law. The default remedy for contaminated groundwater at many of these sites remains extraction and treatment (commonly using air stripping technology) to both contain and clean up the extracted groundwater to “unrestricted use” quality. At most of these sites, however, treated groundwater is discharged to a ditch, creek or similar conveyance where the value of the groundwater as a critical natural resource is largely lost.

An environmental consultant at one such site recently calculated that, over the period of two years, the pump and treat system had removed and discharged to a nearby ditch approximately 110 million gallons of treated groundwater. During a period of severe drought, the system was depleting a drinking water aquifer by over two feet annually. In addition, it was estimated that the quantity of groundwater being treated, and largely wasted, was equivalent to the water used by 1,850 residents (27% of the population) of the city in which the site is located.

Beneficial reuse of “contaminated” water resources is obviously not a new concept, particularly the reuse of nonpotable water. Examples include the reuse of treated nonpotable water for industrial, municipal and agricultural purposes. Potable water reuse is less common for reasons related to water quality requirements, technical issues, cost and community and regulatory acceptance.

Notwithstanding the obstacles and additional costs, it may now be time for environmental professionals, regulators and attorneys to more systematically and creatively consider potable reuse options at contaminated groundwater sites. This would include an evaluation of discharging treated groundwater through infiltration basins, infiltration galleries and injection wells to replenish the drinking water aquifer from which it was extracted. Consideration should be given to partnering site regulators and responsible parties with nearby municipalities to revitalize drinking water aquifers or supplement other potable water resources. Another issue worthy of discussion is community acceptance, which may be more likely when treated contaminated groundwater is beneficially reused indirectly through aquifer replenishment, rather directly through discharge into water supply pipes.

I submit that all too often we accept without much thought the default option of permitted surface discharge of groundwater that has been treated to “non-detect”. Potable reuse through groundwater recharge and restoration involves significant cost and technical issues. But in our effort to add weapons to the climate change adaptation arsenal, all interested parties should more carefully consider such options notwithstanding the challenges.

Will EPA Expand TRI to the Oil and Gas Extraction Sector?

Posted on March 1, 2013 by Molly Cagle

The Environmental Protection Agency (EPA) is planning a rulemaking to expand its Toxic Release Inventory (TRI) program in March 2013. Will the oil and gas extraction sector be included in the program’s expansion?

As part of the Emergency Planning and Community Right-to-Know Act (EPCRA), the TRI program gathers and makes public information about chemical and waste management activities at a wide variety of facilities. EPA touts TRI reporting as one mechanism to reduce the release of chemicals into the environment. It claims that the information gathered helps companies keep up with competitors’ efforts to reduce and recycle waste, and that the public dissemination of information can lead to citizen and EPA enforcement.

EPA considered including the oil and gas extraction sector in TRI in 1997, but decided against it due to technical issues in determining whether individual wells spread out over large geographic areas would be considered a “facility” under EPCRA. A petition filed by environmental groups claims these technical issues are resolved and points to the basin-level definition of facility in EPA’s greenhouse gas (GHG) reporting rule as an example of how oil and gas production operations can be aggregated. Meanwhile, the GHG reporting rule is still under administrative reconsideration and the definition of facility under that rule is a key point of contention between EPA and industry.

As recently as last week, EPA’s Inspector General “recommend[ed] that EPA develop and implement a comprehensive strategy for improving air emissions data for the oil and gas production sector.” If oil and gas production is included in TRI, how will it affect the sector? Will it be a way to get at chemical ingredients used in hydraulic fracturing that are otherwise protected from disclosure as trade secrets? Will the aggregation of data for TRI purposes spill over into air and waste permitting decisions? At a minimum, TRI would require industry to gather more information on chemicals, wastes and emissions and make it publicly available. Thus, industry should prepare for the corresponding public attention and regulation that may accompany TRI expansion.

FRACKING FRACAS IN A LOCAL LABYRINTH

Posted on February 19, 2013 by David Buente

Oil and gas development has traditionally been regulated by the states, and the majority of the states with viable shale reserves have adopted laws or regulations that directly address hydraulic fracturing.  However, several local governments have responded to concerns over potential health and environmental impacts by banning hydraulic fracturing within their jurisdictions.  To date, local bans have been enacted in Colorado, Maryland, New Jersey, New York, North Carolina, Ohio, Pennsylvania, and West Virginia.  In several cases these local bans have been challenged as being preempted by comprehensive state regulation of oil and gas development.  While there is very little appellate case law addressing the legality of local bans, two preemption cases are currently on appeal in New York.  Norse Energy Corp. USA v. Town of Dryden, No. 2012-1015 (N.Y. App. Div.); Cooperstown Holstein Corp. v. Town of Middlefield, No. 2012-1010 (N.Y. App. Div.).  In each case, the local trial court upheld a local ban on hydraulic fracturing, finding that preemption language in the state’s Oil, Gas, and Solution Mining Law (“OGSML”) did not apply to local land use regulations. 

Appellant natural gas developers rely primarily on the OGSML’s preemption provision, arguing that its broad language was intended to preempt all local ordinances and regulations related to oil and gas development unless they are directed toward local roads or real property taxes.  They also emphasize the broad scope of DEC’s oil and gas regulations which go beyond regulating how oil and gas development is conducted and also address spacing requirements and other limitations on where oil and gas development can occur.  Thus, they assert that any local ordinance that limits where hydraulic fracturing can occur is superseded by the OGSML.  The natural gas developers also argue that under implied preemption principles and New York’s constitutional limits on home rule authority, local governments cannot prohibit hydraulic fracturing because such regulations are in direct conflict with the OGSML’s provisions that dictate where oil and gas development can occur.  Finally, the natural gas developers argue that the trial court’s reliance on supersedure provisions from other statutes was misplaced due to key differences in the language of the supersedure provisions as well as the relatively broader scope of DEC’s regulatory authority under the OGSML.   

In contrast, the towns of Dryden and Middlefield assert that local prohibitions on hydraulic fracturing can be harmonized with the OGSML and its preemption provision.  They argue that the local bans on hydraulic fracturing were not enacted for the purpose of regulating natural gas development, but instead are part of comprehensive land use plans designed to protect the public health, safety, and general welfare of the local community.  Because the purpose of the prohibitions are not to “regulate” natural gas development, the towns contend that the prohibitions are not subject to the OGSML’s preemption provision.  Instead, they argue that such local bans can be harmonized with the OGSML by limiting the OGSML’s well spacing and setback provisions to those areas where oil and gas development is otherwise permitted.  Further, the towns argue that the trial court properly relied on earlier cases interpreting the supersedure provisions of the Mined Lands Reclamation Law (“MLRL”).  The towns assert that the supersedure provisions in the MLRL and OGSML are substantially similar and, therefore, should be given similar effect.  Thus, the towns assert that the prior cases that upheld local ordinances banning mining practices that were subject to regulation under the MLRL are binding precedent here. 

Oral argument has been scheduled for March 21, 2013 and a final decision is not expected for several months, at the earliest.  However, these cases will be closely watched in other jurisdictions where local bans on hydraulic fracturing have been enacted and where additional litigation is expected.  Given the diversity among state laws addressing both home rule authority and oil and gas development, the legality of local bans on hydraulic fracturing is likely to remain a hotly debated issue for several years to come, particularly as oil and gas development using hydraulic fracturing continues to expand to new shale reserves around the country.

Pennsylvania Considers the Use of Mine Influenced Water in Oil and Natural Gas Operations: The First Step Toward a Potentially Economical and Environmentally Beneficial Practice

Posted on January 23, 2013 by Chester Babst

On January 9, 2013, the Pennsylvania Department of Environmental Protection (PADEP) issued a final White Paper addressing the use of “mine influenced water” (MIW) in oil and natural gas operations.  For purposes of the White Paper, MIW is characterized as “water contained in a mine pool or a surface discharge of water caused by mining activities that pollutes, or may create a threat of pollution to, waters of the Commonwealth” and “may also include surface waters that have been impacted by pollutional mine drainage.” The White Paper outlines (1) the process for reviewing proposals to utilize MIW, (2) options for storing MIW (i.e. impoundments, tanks, etc.) prior to being used for oil and natural gas well development, and (3) possible solutions to long-term liability issues.

PADEP Secretary Mike Krancer deemed the use of MIW as a “win” for Pennsylvania’s environment and economy.  According to PADEP, more than 300 million gallons of water are discharged from Pennsylvania mines each day.  The water discharged, after being introduced to sulfides and other minerals occurring naturally within the mine, can be harmful to the receiving streams.  The natural gas industry uses between 3-5 million gallons of fresh water, typically withdrawn from surface waters and groundwater sources, for each well completion operation.   MIW use provides natural gas companies an alternative source of water for hydraulic fracturing operations with the potential to both lessen the natural gas industry’s dependence on freshwater sources and divert polluted water from watersheds.  

While the use of MIW in natural gas production operations can be an economical and environmentally beneficial practice, certain issues, particularly long-term liability, may require additional regulatory or legislative action before the practice becomes a viable option for the natural gas industry.  For example, under the current interpretation of Pennsylvania’s Clean Streams Law, an operator’s act of pumping water from an abandoned mine pool could create a legal obligation to treat the resulting discharge.  PADEP’s White Paper suggests two options for reducing a MIW user’s long-term liability: 1) obtaining protection from civil liability by qualifying for a “water abatement project” under Pennsylvania’s Environmental Good Samaritan Act; and 2) entering into a Consent Order and Agreement with the state.  Unfortunately, neither of these options guarantees protection from all potential liabilities under federal and state law for conditions associated with abandoned mines.

Notwithstanding certain concepts that require further consideration, PADEP’s White Paper serves as a platform for Pennsylvania and other states to promote the responsible production of coal and natural gas and, at the same time, to address some of the environmental challenges associated with both.  It is hoped PADEP’s White Paper will stimulate discussions regarding the use of MIW for natural gas production in other states with large reserves of coal and natural gas like Ohio, West Virginia, and Wyoming.  With additional input from stakeholders across various states, anticipated environmental and economic benefits of this practice may become a reality.

Oklahoma v. Texas Water Wars Continued

Posted on January 9, 2013 by Linda Martin

In my August 24, 2010 submission, I discussed the water wars between Oklahoma and Texas, summarizing the lower court holding in Tarrant Regional Water District v. Herman, et al.  The gist of the dispute is that a Texas water district wants to buy Oklahoma water, but Oklahoma isn’t selling, and has passed laws that effectively preclude the sale. The Tarrant Regional Water District (“TRWD”) cried foul, but the District Court did not agree with TRWD that Oklahoma’s refusal to sell water across state lines was a violation of the Commerce Clause.  Judgment was entered on July 16, 2010, and the case appealed to the Tenth Circuit shortly thereafter.  The Tenth Circuit affirmed the District Court.  656 F.3d 1222 (10th Cir. 2011).

The Appellate Court decided that Oklahoma statutes which precluded water being sold to users in Texas did not violate the Commerce Clause because the Red River Compact preempted it. Recall that the Red River Compact (signed by Texas, Oklahoma, Louisiana and Arkansas in 1978 and approved by Congress) divided the water from the Red River and its tributaries among the states involved.  The Compact has general language that gives the signatory states authority over the water allocated to them within their borders.  The Tenth Circuit held Texas to its bargain on the Compact and agreed with Oklahoma that the refusal to sell Oklahoma water to Texas users does not violate the Commerce Clause. 

Now, the United States Supreme Court will weigh in on the subject, as it granted certiorari on January 4, 2013.  Stay tuned.

MONTANA SUPREME COURT REJECTS CONSTITUTIONAL CHALLENGE TO LARGE STATE COAL LEASE

Posted on January 2, 2013 by Stephen R. Brown

Montana’s state constitution contains what is arguably the most stringent environmental protection clause of any state.  Article II, Section 3 of the Montana Constitution guarantees all persons “the right to a clean and healthful environment.”  This provision is paired with Article IX, Section 1, which says the “state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations.”  Although these clauses have been in the state constitution since 1972, they rarely have been applied by the Montana Supreme Court to invalidate legislation, overturn state action or to provide a private remedy.  In October, 2012, the Montana Supreme Court rejected the latest attempt to apply these provisions.

Montana is a coal-rich state.  The State of Montana owns significant quantities of this coal.  The State Land Board controls the leasing of state-owned coal.  In 2010, the land board approved a massive lease to Arch Coal.  Montana received an $85 million bonus payment for this lease. 

In addition to the environmental-protection provisions of the state constitution, Montana has a state environmental policy act, structured similarly to the National Environmental Policy Act (NEPA).  The Montana Environmental Policy Act (MEPA) contains a number of exemptions from environmental review that would otherwise be required.  One of these provisions exempts the land board from the obligation to undertake environmental review at the leasing stage, so long as a lease contains a provision stating that actual mining is subject to further environmental permitting.  The land board relied on this exemption to issue leases to Arch Coal without first undertaking MEPA review.

Several environmental groups challenged the land board’s leasing action, arguing that the application of the MEPA exemption violated the Montana Constitution on an as applied basis.  They argued that the leasing decision opened the door to the mining and burning of large quantities of coal without environmental review.  A state district court found that mining and burning coal could exacerbate global climate change, which in turn could adversely affect water, air and agriculture in Montana.  Based on this finding, the district court declined to dismiss the case, but it also refused to grant summary judgment to the NGO plaintiffs on the constitutional claim.  The district court concluded that the State retained sufficient environmental protection mechanisms at the mine permitting stage to meet its constitutional obligations.

The NGO plaintiffs appealed the case to the Montana Supreme Court.  In Northern Plains Resource Council v. Montana Board of Land Commissioners,  the Supreme Court upheld the district court and rejected the constitutional challenge.  Although the Supreme Court confirmed the fundamental right to a clean and healthful environment and acknowledged potential global climate change implications of further coal development, the Court held that it was not required to apply a strict scrutiny analysis to the statutory exemption from MEPA.  The Court concluded that “the act of leasing” did not interfere with the exercise of a fundamental right requiring “demonstration of a compelling State interest.”  Instead, the Court applied a “rational basis” test to conclude that the potential for additional environmental review at the permitting stage was sufficient.  On that basis, the Supreme Court held that the exemption from MEPA review did not violate the Montana Constitution.

EVOLVING CONCERNS OVER THE PRODIGIOUS VOLUMES OF WATER USED IN HYDRAULIC FRACTURING

Posted on October 31, 2012 by Michael Hardy

When hydraulic fracturing “exploded” in Pennsylvania and Ohio to unlock the huge reservoirs of natural gas buried thousands of feet below surface in the deep shale formations, the initial environmental concerns focused on the potential for contamination of drinking water supplies from the “fracking” fluids and methane, and from the induced seismicity from the disposal of the waste brines into the underground injection wells.

While those concerns remain, new issues have surfaced.  In Ohio’s Utica shale play, the deep wells typically consume 5,000,000 or more million gallons of water for the hydraulic fracturing and well completion.  Beginning in June, a number of political subdivisions and water districts saw the energy industry’s needs for water as a wonderful business opportunity.  For example, the Muskingum Watershed Conservancy District, whose eighteen counties cover 20 percent of Ohio, reportedly contracted with one exploration and production company to sell millions of gallons of water from one of its reservoirs in eastern Ohio.  The City of Steubenville signed a five year contract to supply as much as 700,000 gallons a day from a reservoir that holds water from the Ohio River.  Newspaper reports at the time mentioned monthly payments to Steubenville on the order of $120,000.  The Buckeye Water District enjoyed a seven-month windfall of $24,000 per month for sales of water to a large drilling firm. Even the Ohio Department of Natural Resources weighed possible plans to grant drilling companies access to state-held reservoirs, lakes and streams.

But the public announcement of these water supply contracts produced significant public backlash.  The reaction to the plans of the Muskingum Watershed Conservancy District, for example, prompted a reversal of the sales, and lead to a moratorium pending completion of an independent water availability study by the U.S. Geological Survey and an updating of the District’s water supply plan with input from the new study.  Low stream flows in the Susquehanna River watershed in Pennsylvania lead the Susquehanna River Basin Commission to suspend 57 approved water withdrawals by gas drillers and other industrial users.

Perhaps in response to the public outcry over the potential impact on water resources, the Ohio General Assembly passed wide-ranging legislation to deal with the growth of shale gas exploration in Ohio.  One of the features of that bill requires drillers to disclose their water source and the likely volume of water for well completion.

The link to that legislation is here: 
http://www.legislature.state.oh.us/bills.cfm?ID=129_SB_315

In another piece of legislation, the Ohio General Assembly adopted a measure to regulate the withdrawal of water from the Lake Erie watershed, effectively precluding the use of Lake Erie watershed waters for hydraulic fracturing in the counties where the drilling is occuring because they are outside the watershed.

The legislation on the use of Lake Erie water can be found at this link:
http://www.legislature.state.oh.us/bills.cfm?ID=129_HB_473

Even with these safeguards, groups like the National Wildlife Federation urge the adoption of even stronger rules on the use of water for hydraulic fracturing.  With the projected exponential growth of shale gas drilling, there will be continuing efforts to regulate the use of water, and the encouragement for water recycle and reuse, for hydraulic fracturing.

Fracking on Election Eve

Posted on October 23, 2012 by Robert Kirsch

The technique known as hydraulic fracturing (“fracking”), especially in the context of developing natural gas, continues to generate controversy, legal fees and emotion.  The question remains as to whether the technique itself presents any unusual risk to the environment or natural resources.  What is clear, however, is the political significance of fracturing and the challenges that our polarized, political dialog presents to achieving a rational result in or from  the fracturing debate.

On the federal side, the Administration has taken steps in order to represent to voters that the President has done what he could to see that hydraulic fracturing occurs in a manner that does not threaten the environment.  Concrete steps are taking place in three Agencies.

-    BLM has issued draft regulations relating to fracturing activities taking place on federal lands.  The proposal drew thousands of comments and no action is likely until well after the election.

-    EPA issued draft guidance proposing to regulate hydraulic fracturing under the UIC program.  This proposal also resulted in thousands of comments, all but precluding any chance that EPA will be in a position to act until well after the election.

-    EPA is continuing its study into the possible connection between hydraulic fracturing and underground sources of drinking water.  A partial report reflecting some retrospective analysis is due before year end, but the meat of the report will not be available until 2014.

-    EPA continues to pursue its general investigation into the way fracturing occurs through its investigation into 9 fracturing companies.  EPA has proposed to publish information reflecting well densities and chemical use relatively soon. 

-    EPA has reviewed and is continuing to review petitions filed by environmental organizations seeking to force the Agency to take steps to regulate fracturing under various regulatory programs, including TSCA.  EPA has denied some of the relief sought, but is collecting information under some and beginning its evaluation of others.

-    At the regional level, EPA has engaged in studies when citizen pressure has suggested a connection between fracturing and contaminated drinking water.  This has proven to be an area where EPA has not maintained consistency or scientific integrity.  The agency’s work at Dimmock, Pavillion and elsewhere has resulted principally in controversy and criticism, and has done little to advance the state of knowledge about fracturing.

-    DOE Secretary Chu has been an Administration spokesman for White House efforts to coordinate the many federal entities that seem to be working on fracturing issues.  His role has been above the weeds and the fact that a Secretary charged with overseeing national energy policy, if there is one,  is the Administration’s front man, appears to be a bone to those suggesting the sole interest of the President is in making energy development more difficult.

-    Within DOA, the Forest Service has sent mixed signals with respect to whether fracturing is viewed as posing risks to other resources.  While several forests have adopted plans anticipating the development of resources within their jurisdiction, including by fracturing, the George Washington National Forest plan remains under review, having proposed to ban fracturing in its initial draft release.

-    The USGS recently has entered the fray in connections with published concerns linking fracturing and increased seismic activity.  Preliminary indications suggest the true focus of such efforts may be long term injection wells, rather than transient fracturing activities, but there is more to follow on this topic.

The federal role in the fracturing debate also has occurred in courts.  Environmental interest groups recently have begun to raise fracturing activities in a number of lawsuits challenging the adequacy of the environmental reviews conducted in connection with federal leases.  Many  such cases are making their way through the courts, and are being watched for the decisions..

In his public statements, the President, of course, has been careful to promote the safe development of natural gas resources, including by fracturing.  He has offered what generally have been viewed as favorable statements in his state of the union address, and more recently in his remarks at the Democratic National Convention.  Of course none of those favorable comments has slowed any of the developments noted above, nor were the President’s remarks necessarily inconsistent with such action.

There is much resistance to the above federal efforts from states, and from industry which has had decades of experience accommodating state regulators in connection with drilling and developing wells.  States too have been active, to varying degrees, with some devising thoughtful programs balancing the needs of developers with the concerns of some members of the public.  The politicization of the issue also has reached the states, however, and nowhere is it more in evidence than in the glacial SGEIS process that has been under way for years, with no regulations on the horizon. There also have been intrastate efforts directed at fracturing by the Susquehanna River and Delaware River Basin Commissions, with the former moving forward with water management programs while the latter has, by default, banned fracturing until a compromise is agreed upon among the member sovereign constituencies.

And – don’t expect the controversy and misunderstandings surrounding fracturing to disappear soon.  In addition to a small scale advocacy film last year, Hollywood is entering the fray with a major film slated for release in the not-too-distant future.  Television already has managed to capitalize on the drama fracturing offers in more than one series.

Things will change after the election.  Stay tuned to find out how.

FOUR CENTURIES OF FUEL FORAGING IN PENNSYLVANIA

Posted on October 4, 2012 by Joseph Manko

For four centuries Pennsylvania has been at the epicenter of America’s search for growth-sustaining fuel, but not without paying an environmental price.  In the 18th century, Pennsylvania’s (literally “Penn’s Woods”) abundant forests supplied wood to fuel America’s expansive westward development.  In denuding its forests, however, Pennsylvania experienced enhanced erosion and sedimentation and other environmental detriments.

In the 19th century, 1859 specifically, oil was discovered in Oil City. Pennsylvania (and America) turned its attention from wood to oil.  Although primary oil production shifted eventually to the Gulf states, nevertheless, Pennsylvania, as an oil producer, enjoyed the benefits and suffered the environmental detriments created by laissez faire, unregulated drilling and transportation of petroleum.

By the 20th century, coal was king in Pennsylvania.  The residual impacts from coal mining, especially strip mining, remain to this day in the form of scarred landscapes, acid mine drainage and air emissions, albeit the impacts are now monitored amid a focus on environmental enforcement efforts.

In the 21st century coal remains a force in energy production in Pennsylvania, but again nature has put the state in the national discussion over domestic fuel protection as it has become a national leader in developing the natural gas entrapped in the Marcellus Shale underlying large portions of southwest, north central and northeastern Pennsylvania.  Natural gas extracted from the Marcellus Shale has become Pennsylvania’s (and increasingly, America’s) fuel of choice for the 21st century.  Will the environmental legacy be different this time?

In February, 2012, Pennsylvania enacted The Oil and Gas Act Amendments of 2012, known as Act 13, in an attempt to adapt Pennsylvania’s longstanding Oil and Gas Act to issues unique to the technique used to fracture layers of shale and release natural gas, commonly known as “fracking.”  The Amendments raise a number of new legal issues:

1.    By offering shale gas fees to host municipalities who are willing to accept them, the Act preempts accepting municipalities from enacting zoning ordinances to regulate fracking.  A recent Commonwealth Court decision held such preemption unconstitutional.  An appeal by the State is pending before the Pennsylvania Supreme Court.  Briefs have been filed and oral argument is scheduled for October 17 in Pittsburgh.

2.    Despite mandatory setback distances from wells, required by the Amendments, instances of citizens claiming that or suing because their water supply was contaminated as a result of the recovery of shale gas, either through leakage, spillage, or other events will need to be resolved.

3.    Pennsylvania’s Department of Environmental Protection has differed with EPA and the Delaware River Basin Commission regarding how much authority these agencies should have to regulate operations associated with Marcellus Shale gas production. 

4.    In a victory for the shale gas industry, the District Court for the Western District of Pennsylvania invalidated a 2009 U.S. Forest Services Agreement with environmental groups that would have required the preparation of a NEPA environmental assessment prior to drilling in U.S. forests. 

5.    Some property owners who have leased their subsurface drilling rights for Marcellus Shale gas recovery have found themselves unable to refinance their mortgages.  Although the property owners argue that their land has become more valuable because of the potential recovery of fees from the Marcellus Shale gas recovery, some banks have refused to refinance claiming that the fracking lowers the value of the property because of the potential of pollution and/or the location of drilling rigs and other heavy equipment on the property, thereby making foreclosure more difficult. 

6.    Pennsylvania’s Public Utility Commission (PUC) is the collector under Act 13 of the “impact fees” from natural gas well operators – which have to date exceeded $200 million and will be distributed in large part to “accepting” host municipalities.  In accordance with Act 13, the PUC has also begun issuing advisory opinions on the legality of local zoning ordinances.  The Pennsylvania Supreme Court’s decision on the Commonwealth Court’s invalidation of the preemption issue could affect how the PUC approaches these matters going forward. 

While the sources of fuel and the techniques for obtaining it have changed much over the centuries in Pennsylvania, fuel production from forests, coal mines, oil rigs and fracking wells share a common legacy, initially attracting often environmentally insensitive wild catters, raising issues of local control versus the need for statewide uniformity, and creating the risk of potentially permanent environmental impacts if state-of-the-art environmental protections are not implemented.  In sum, notwithstanding changes in preferred fuel sources over the past four centuries, the issues, impacts and challenges remain similar; the need to balance energy production and environmental protection, or, as they say – “the more things change, the more they remain the same”.  Rather than be resigned to repeating history, however, the Commonwealth should rise to the challenge and use its acquired knowledge to inform our discussion as to how to utilize its resources, including natural gas, to provide energy solutions going forward.