How Much Does Trump Even Care About Deregulation?

Posted on September 13, 2018 by Seth Jaffe

Rick Glick’s September 11 post discusses Judge David Norton’s August 2018 decision to issue a nationwide injunction against the Trump Administration’s “Suspension Rule,” which delayed implementation of the Obama Waters of the United States RuleAs noted in Rick's post, that case was not about the merits of the WOTUS rule.  It was simply about the Trump administration’s failure to comply with the Administrative Procedure Act in promulgating the Suspension Rule.

Which brings me to the point of this post.

The Administration’s failure to comply seems so obvious that one has to wonder whether the Administration even cared whether the Suspension Rule could survive judicial review.  Indeed, this case seems part of a clear pattern.  The Court noted as much in quoting a summary of such cases from the plaintiffs’ brief:

Clean Air Council v. Pruitt (vacating the EPA’s attempt to temporarily stay a Clean Air Act regulation without “comply[ing] with the … APA”); Open Communities All. v. Carson, (enjoining the defendant agency’s attempt, “without notice and comment or particularized evidentiary findings, … [to] delay[] almost entirely by two years implementation of a rule” adopted by the previous administration); Pennsylvania v. Trump (enjoining two new “Interim Final Rules” based on the defendant agencies’ attempt to “bypass notice and comment rule making”); Nat’l Venture Capital Ass’n v. Duke (vacating the defendant agency’s “decision to delay the implementation of an Obama-era immigration rule … without providing notice or soliciting comment from the public”); California v. U.S. Bureau of Land Mgmt. (holding that the defendant agency’s attempt to postpone a regulation’s compliance dates “after the rule’s effective date had already passed … violated the APA’s notice and comment requirements by effectively repealing the [r]ule without engaging in the process for obtaining comment from the public”); Becerra v. U.S. Dep’t of the Interior, (holding that the defendant agency violated the APA in “fail[ing] to give the public an opportunity to weigh in with comments” before attempting to postpone a rule that had already taken effect).

To which the Court added its own footnote:

To this litany of cases, the court adds two more from the last several months— Nat. Res. Def. Council v. Nat’l Highway Traffic Safety Admin. and Children’s Hosp. of the King’s Daughters, Inc. v. AzarAs these cases make clear, this court is but the latest in a series to recently find that an agency’s delay of a properly promulgated final rule circumvented the APA.  (My emphasis.)

I find it hard to believe that numerous smart lawyers, across a range of agencies, all suddenly forgot what the APA requires.  Isn’t it more likely that the Administration simply doesn’t care about the outcome?  The government of the most powerful nation on earth, that likes to think that it taught the world about democracy, doesn’t care about governing.  All it cares about is having Twitter material, to feed to its adoring fans and, equally importantly, to bait its many critics.

Strong Headwinds Face Water Quality Trading in the Chesapeake

Posted on August 2, 2018 by Ridgway Hall

The Chesapeake Bay watershed covers 64,000 square miles in parts of Maryland, Virginia, Pennsylvania, Delaware, New York, West Virginia and the District of Columbia. When the six states and the District asked EPA to establish a multi-state Total Maximum Daily Load under the Clean Water Act in 2010 and assign each state its fair share, they took on the job of reducing discharges of nitrogen from all sources by 25%, phosphorus by 24% and sediment by 10%. The goal is to have all necessary measures in place to achieve this by 2025 to meet applicable water quality standards. With funding at the state and federal levels in short supply, a search was on for the most cost-effective ways to reduce these pollutants.  The states with the biggest burdens, Pennsylvania, Virginia and Maryland, each turned to the emerging practice of water quality trading.

Trading enables a discharger for whom the cost per unit of pollution reduction is lower than for other dischargers to reduce its pollution below what the law requires and sell that extra reduction as a “credit” to another discharger for whom the cost per unit of pollutant reduction is greater.  The result is that the seller makes money from the credit sale, and the buyer attains compliance at a lower cost than it would otherwise incur. Sounds simple, doesn’t it?  In October the Government Accounting Office published the results of a nationwide survey in which it found that only 11 states have water quality trading programs, and the only significant use being made was in Pennsylvania, Virginia and Connecticut, even though EPA has been promoting it since 1996. (I discussed this in “Water Quality: Wading into Trading” posted Nov. 28, 2017).

To encourage the Bay states to adopt trading programs that will comply with the Clean Water Act and its implementing regulations, EPA published a series of “Technical Memoranda” (TMs) addressing key elements of a trading program including “baseline” (the maximum amount of pollution allowed under any applicable law before a credit can be generated), protecting local water quality where a credit is used, credit calculation, and accounting for uncertainty. This is needed where a nonpoint source, like a farm, is generating credits by installation of best management practices (BMPs) and the pollution reduction benefits must be estimated using modeling. The TMs also address credit duration, certification by the agency, registration and tracking on a publicly posted registry, and verification that the BMPs on which the credits are based are being maintained.  Finally, they address sampling and public participation. (See my blog post of Sept. 26, 2016 “New Tools for Water Quality Trading”).  Credits can also be used to “offset” new or expanded discharges. The TMs are not regulations, but set forth EPA’s “expectations”.

Common Elements

Pennsylvania, Virginia and Maryland have adopted trading regulations which are intended to be consistent with the TMs.  The principal elements include . . . [CLICK HERE TO READ THE REST OF THIS ARTICLE]

WOTUS: Legal Issue or Scientific Issue?

Posted on August 1, 2018 by Seth Jaffe

Last month, EPA and the Army Corps issued a Supplemental Notice of Proposed Rulemaking in support of their efforts to get rid of the Obama WOTUS rule.  It’s a shrewd but cynical document.  It’s shrewd, because it fairly effectively shifts the focus from the scientific question to the legal question.  Instead of asking what waters must be regulated to ensure that waters of the United States are protected, it asks what are the jurisdictional limits in the Clean Water Act.

It’s cynical, because, by failing to take on the science behind the 2015 rule, which seemed fairly persuasive to me, EPA and the Corps avoid the hard regulations necessary to protect our waters while clothing themselves in feel-good words about the integrity of the statute and the important role given to states under the Clean Water Act.

Part of the beauty of the SNPR is the way it carefully navigates between whether the broader jurisdictional interpretation taken by the 2015 rule is prohibited under the Clean Water Act or simply not required under the Clean Water Act.

The agencies are also concerned that the 2015 Rule lacks sufficient statutory basis. The agencies are proposing to conclude in the alternative that, at a minimum, the interpretation of the statute adopted in the 2015 Rule is not compelled, and a different policy balance can be appropriate.

I’m not sure I agree with the administration’s interpretation of the scope of the CWA, but it’s not crazy.  If I had to bet, I’d assume that it would survive judicial review.

The problem is that this simplistic legal approach ignores the science and ignores the missions of both EPA and the Corps.  If the 2015 rule is more protective of the nation’s waters, and if there are questions about the scope of jurisdiction under the CWA, then shouldn’t the administration be asking Congress to clarify EPA’s and the Corps’ authority so that they can regulate in a manner consistent with what good science says is necessary to protect the waters of the United States?

I’m not holding my breath.

CAFO Odors and the Ghost of William Aldred

Posted on July 10, 2018 by Susan Cooke

The number and size of concentrated animal feeding operations (CAFOs) have increased in recent years.  These operations keep large numbers of animals in a confined space and provide them with feed from offsite sources prior to their slaughter.  While generally viewed as cost efficient, CAFOs raise concerns about animal welfare and about their environmental impacts and effect on the health and quality of life for those living or working nearby.  Such concerns include the foul odors associated with the substantial quantities of animal waste that are generated, especially where such waste is discharged into pits and then flushed into open air lagoons.  The sludge in those lagoons sinks to the bottom and is periodically removed for land application and the liquid waste remaining at the top is sprayed as fertilizer onto adjacent fields.

The anaerobic reaction that occurs during pit and lagoon storage of the waste over an extended time period is the primary generator of such odor, the primary constituents being ammonia and hydrogen sulfide.  Anaerobic digesters and other technologies can be employed to reduce odor generation, with some also producing gases for fuel.  However, the costs of installing and operating such equipment can be substantial, and there are no specific requirements at the federal level mandating odor control or limiting ammonia or hydrogen sulfide emissions from CAFO operations.  Indeed, even the reporting of animal waste air emissions under the federal Superfund law and under EPCRA (as interpreted by EPA) is precluded under the Fair Agricultural Reporting Method (FARM) Act signed into law by Congress in March 2018

While there is little regulation at the federal level, some states have imposed limits on hydrogen sulfide.  For example, California has a one hour average standard and Minnesota has a 30 minute standard for H2S.  In addition, a few states have instituted odor standards covering some CAFOs, including Colorado’s odor standard, which is based on an odor dilution factor, for swine CAFOs above a certain size (i.e., the odor must be eliminated by a specified amount of dilution).  While most local ordinances covering odors enjoin nuisances in general, some have adopted a dilution factor standard that is generally applicable, such as the ordinance adopted in Denver, Colorado and that adopted in South St. Paul, Minnesota.

Even where CAFOs are singled out for specific regulation by state, the dilution factor standard is not often used, probably because it is in essence subjective in nature and thus quite different from most environmental emission standards.  Instead, states have generally adopted a management plan approach coupled with registration and periodic inspections.  For example, the environmental regulations covering odor control at CAFOs in North Carolina, which has a number of swine CAFOs in the southeastern portion of the state, do not include a specific standard covering odor.  Instead, those regulations impose setback requirements and provide for state agency inspections, and they empower that agency to require preparation and modification of a best management plan if it determines that odor control is necessary.

Given the absence of a specific standard for judging CAFO emissions, some neighbors of CAFO operations have brought tort suits for nuisance to address odor concerns.  In one case decided this past April, a jury awarded $50 million in compensatory and punitive damages to 10 neighbors of a North Carolina hog farm.  The plaintiffs claimed that the truck noise associated with farm operations and the odor associated with lagoon storage of waste from its 4700 hogs and the spraying of lagoon liquid onto nearby fields created a nuisance.

Although the federal court reduced recovery to $3.25 million under punitive damage limits imposed under the North Carolina Right to Farm Law, agribusiness interests raised strong concerns about the damage award and within weeks the North Carolina legislature had passed amendments to the state Right to Farm Law to further restrict tort recovery for alleged nuisances from agricultural and forestry operations.  Although those amendments (in Senate Bill 711) were vetoed by Governor Roy Cooper on June 25, the veto was overridden by both houses before their month-end adjournment.

The amendments, which are similar to statutory language already enacted in Missouri for facilities engaged in crop and animal production, would limit compensation to property located within one half mile of the alleged source of a nuisance at an agricultural or forestry operation.  In addition, the suit would have to be filed within one year of the operation’s establishment or of a fundamental change (which wouldn’t include, among other things, a change in ownership or size) to that operation, with compensatory damages limited to a reduction in fair market value of the plaintiff’s property for a permanent nuisance and to diminution in fair rental value for a temporary nuisance.  While punitive damages are already capped at a specified multiple of compensatory damages, the amendments would limit them to instances where, during the previous three years, the operation had been the subject of a criminal conviction or civil enforcement action or of regulatory action taken by the state or federal government pursuant to a notice of violation.

Such limits on monetary recovery for nuisance may encourage plaintiffs to seek injunctive relief to abate odors from CAFO operations.  And tort suits for nuisance animal odors have a long history, as evidenced by William Aldred’s Case dating back to 1610 where the Court of King’s Bench held that Mr. Aldred, whose house was situated within 30 feet of a later constructed hog sty, had a right to obtain abatement of the foul odor emanating from that hog sty.

In recent years the injunction remedy in a nuisance action has sometimes been disfavored, as illustrated in the Boomer v. Atlantic Cement decision where monetary damages were awarded rather than injunctive relief for operation of a cement plant.  There the court weighed the (lower) cost of compensatory damages versus the (significantly higher) cost associated with installing abatement equipment or requiring plant shutdown.  However, it now appears that determining “entitlements” under an economic efficiency analysis, such as that described in the oft-cited Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, is undergoing more critical academic scrutiny.

Moreover, animal welfare advocates, as well as those concerned about environmental justice or greenhouse gas emissions, and perhaps even property rights advocates, may add their own voices in support of the injunctive remedy option for stopping or curtailing CAFO operations.  If so, then the right of a landowner to quiet (and unscented) enjoyment of his or her property through an injunction, as enunciated by the King’s Bench more than 400 years ago, may prove to be the most effective remedy for those seeking to curtail CAFO odor emissions.

DAVID AND GOLIATH AT THE CONOWINGO DAM

Posted on June 26, 2018 by Ridgway Hall

Exelon owns and operates the Conowingo Dam across the Susquehanna River in Maryland just below the Pennsylvania border, including a 573 megawatt hydroelectric power plant. It is seeking a renewal of its operating license from FERC under the Federal Power Act for 50 years. Section 401 of the Clean Water Act requires that any applicant for a federal license that may result in a discharge submit a certification by the state where the discharge will occur that the discharge “will comply with the applicable provisions” of the CWA, including water quality standards. The certification may include conditions and requirements, including monitoring and reporting, deemed necessary to ensure compliance. The certification becomes part of the federal license, and the licensing agency may not change it.

The facts in this case are unusual, and the outcome will likely be precedential. For decades, sediment has flowed down the 450 miles of the Susquehanna River from New York and Pennsylvania and accumulated in the reservoir behind the dam, trapping nitrogen, phosphorus, metals, PCBs and other pollutants along with the sediment,  Now the trapping capacity has been reached. Several times in recent decades severe storms have scoured out tons of this sediment and carried it over the dam and into the Chesapeake Bay 10 miles downstream, causing not just violation of water quality standards, but severe damage to oysters, bay grasses and benthic organisms.  In addition, the dam has blocked historic fish passage. Measures such as fish ladders and transportation have produced only modest relief. Since 2010 the entire Chesapeake Bay and its tributary system has been subject to a multi-state total maximum daily load (TMDL) for nitrogen, phosphorus and sediment, but at the time that was set, it was not anticipated that the Conowingo trapping capacity would be exhausted this soon.

On April 27, 2018, the Maryland Department of the Environment issued a CWA certification in which it determined that numerous conditions must be complied with by Exelon in order to reasonably ensure compliance with water quality standards. It requires, among other things, measures to ensure compliance with standards for dissolved oxygen (DO), chlorophyll-A (an indicator of algae), turbidity, temperature, pH and bacteriological criteria in the reservoir and downstream waters including the Bay, plus compliance with plans to protect various fish species, waterfowl and habitat. It also requires shoreline protection, removal of trash from the reservoir and a variety of monitoring programs.

Notably, to satisfy the DO standards, which are adversely affected by nutrients and are critical to aquatic life, MDE requires that starting in 2025 Exelon must annually reduce the amount of nitrogen in its discharges by 6 million pounds, and phosphorus by 260,000 pounds. Exelon can also satisfy this requirement by installing best management practices elsewhere upstream or paying $17 per pound of nitrogen and $270 per pound of phosphorus for any amounts not removed.

Exelon promptly filed a request for reconsideration and administrative appeal with MDE. It also filed a complaint in Maryland state court seeking a declaration that the certification could not be considered “final action” until proceedings before MDE were concluded, including Exelon’s right to an evidentiary hearing; an injunction against any consideration of the certification by FERC, and, alternatively, for judicial review. Exelon also filed suit in the U.S District Court in Washington, D.C., claiming that MDE’s certification exceeded its CWA authority and constituted an unconstitutional taking of its property, and seeking declaratory and injunctive relief.  See Exelon’s filings at here.

Among Exelon’s complaints is the fact that the certification would require it to spend vast sums to remove pollutants that did not come from its operations, but from upstream polluters. The fee equivalent of the nitrogen and phosphorus removals would amount to $172 million per year – far more than Exelon earns from the operation of Conowingo. An environmental impact statement had concluded that efforts to remove the sediment from behind the dam “would be cost-prohibitive and ineffective.” Releases from the dam, Exelon contends, are not “discharges” but “pass-through.” Exelon also argues that fish passage damage was caused decades ago and it would be unfair to make Exelon bear the full cost of restoring it.

Some environmental groups have joined the administrative appeal process.  Stewards of the Lower Susquehanna and Waterkeepers Chesapeake (a group of 18 Waterkeeper organizations in the Chesapeake Bay watershed) appealed to MDE asking that protection against scouring by big storms be strengthened and that likely effects from climate change be considered, but otherwise supporting the certification. The Nature Conservancy and the Chesapeake Bay Foundation, both with longstanding interests in water quality and restoration of the fisheries and fish passage, have also been actively involved.

The stakes are high. MDE, “David” in my title, has taken some bold measures to address some enormous problems, and Exelon is fighting back hard. However it comes out, the resolution will have precedential value for other CWA 401 cases across the country, and particularly for hydroelectric projects.

The Packers, Beer, Cheese Curds and …Regulatory Reform?

Posted on January 30, 2018 by Todd E. Palmer

If states are the crucible of policy experimentation, Wisconsin’s regulatory reform efforts deserve attention as the Trump Administration implements its federal deregulatory agenda.   Wisconsin has been pushing an aggressive deregulatory agenda for the last five years and its experiences might better inform the federal debate in this area.

The cornerstone of Wisconsin’s regulatory reform effort has been Act 21.  Enacted in 2011 during a Special Session of the Legislature, Act 21 prohibits a state agency from implementing or enforcing any requirement, standard or permit term unless it is explicitly required or authorized by statute or administrative rule. Although largely ignored for its first five years, Act 21 has become a significant force in the state.  A previous ACOEL blog post highlights a Wisconsin Attorney General opinion that interprets Act 21 as restricting the Wisconsin DNR’s authority to regulated high capacity wells.  That issue is working its way through state courts.  More recently, Act 21 has been the legal predicate for further limiting state agency regulation in other areas, including:

-          A decision issued by the Wisconsin DNR Secretary concluding that her department lacks explicit authority to impose a limit on the number of animals at large livestock operations or to require that monitoring wells be installed around such operations. The Secretary’s decision reversed an ALJ’s opinion to the contrary.

-          A State Attorney General opinion that animal unit limits in WPDES permits are unlawful because they are not explicitly authorized by a statute or rule.

-          A judicial settlement agreement executed by the State of Wisconsin agreeing to refrain from enforcing any standards applicable to feed storage leachate or runoff management unless promulgated as a rule.  The state further agreed to withdraw and not enforce draft program guidance that sought to impose such requirements. 

-          A State Attorney General opinion that state agencies cannot enforce rules that are not explicitly authorized by statute, even if those rules were promulgated before enactment of Act 21.

-          A State Attorney General opinion that state agencies do not possess “any” inherent or implied authority to promulgate rules or enforce standards, requirements or thresholds.  The general statements of legislative intent, purpose or policy that are often found in statutory provisions do not confer or augment agency rulemaking authority.  

In the wake of these developments, the State Attorney General recently observed that “Act 21 completely and fundamentally altered the balance [of government administrative power], moving discretion away from agencies and to the Legislature.” 

As Act 21 forces Wisconsin agencies to create rules to implement their regulatory programs, the State Legislature is turning its attention to the rulemaking process. The Legislature passed its own version of the Reins Act (Regulatory Executives in Need of Scrutiny) which, in the most general of terms, increases the procedural requirements and legislative oversight of the state’s rulemaking process.  It now takes roughly three years to pass an administrative rule in Wisconsin.   

Having added procedures that delay the rulemaking process, the Legislature is debating bills that would expedite the rule repeal process. These bills would establish an expedited process requiring agencies to inventory and petition the Legislature for repeal of certain rules. For example, one bill would require the repeal of state rules concerning air pollutants that are not regulated under the federal Clean Air Act.  Another bill would automatically repeal certain environmental regulations ten years after they take effect. Although the Wisconsin DNR could attempt to readopt an expiring rule, that effort could not commence any sooner than one year before a rule’s expiration. 

In the Judicial Branch, the Wisconsin Supreme Court will soon decide whether the state’s practice of deferring to agency interpretations of statutes comports with the Wisconsin Constitution.  Recent decisions suggest that the majority of Justices will answer in the negative.  A decision should be issued this summer and could impose additional restrictions on agency authority.  

Not surprisingly these reforms have been controversial.  ENGOs have filed lawsuits challenging permits that fail to include terms and conditions due to the restrictions of Act 21.   The regulated community has taken the opposite view, challenging permit terms and conditions that are not explicitly authorized by rule or statute.  At some point these roles are likely to reverse since the regulated community often relies upon implicit agency authority to establish permit conditions which it finds favorable. 

Much like the federal initiative, Wisconsin’s reforms have been wrapped in the trope of reducing the regulatory burdens placed on state businesses and thereby improve the state economy. So far the state’s economy is doing quite well.  These efforts warrant continued monitoring to gauge how the economy and environmental concerns have been balanced while implementing these reforms.   

Water Quality: Wading Into Trading

Posted on November 28, 2017 by Ridgway Hall

For over 20 years EPA has been promoting water quality trading – with particular emphasis on nutrients and sediment – as a way to improve water quality at reduced costs. Trading is based on the simple proposition that if Party A can reduce a pollutant at a lower per-unit cost than Party B, who needs to reduce its discharges of that pollutant, it is more economically efficient for Party A to reduce its discharges below what is required by law, and sell the additional reduction, or “credit”, to Party B. If the price is less than what Party B would otherwise pay and more than it costs Party A to make the reduction, B will save money and A will make money. 

The focus is on nitrogen, phosphorus and sediment because these pollutants have for many years been leading causes of water quality impairment and, in the case of nutrients, adverse effects on human health when the resulting algae blooms release toxins and harmful bacteria.  In 2016 EPA reported that nutrient-caused algae blooms were on the rise, causing fish kills, contamination of fish and shellfish, and beach closures, resulting in significant damage to local economies and impairments to human health. The biggest source of these pollutants is farming operations. Trading seems especially well-suited to help reduce polluted runoff from farms because their per unit cost of removing nutrients is far lower than for wastewater treatment plants. Finally, because farm runoff is a nonpoint discharge, it is not regulated under the Clean Water Act. Regulation is left to states. While many states require farms to have nutrient management plans, because the states have limited resources to inspect and enforce, finding incentives to stimulate a market-driven solution has obvious appeal.

So why are there so few trading programs in place? The GAO attempted to find the answers in its report Water Pollution: Some States Have Trading Programs to Help Address Nutrient Pollution, but Use Has Been Limited (October 2017). The report addresses (1) the extent to which nutrient trading programs are being used, (2) how EPA and the states oversee these programs, and (3) what factors affect participation in trading.  As of 2014, eleven states had some form of trading programs: California, Connecticut, Florida, Georgia, Idaho, Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina and Virginia. Most of the trading was being done in Connecticut, Pennsylvania and Virginia, so GAO focused primarily on these programs.

All three of these states established their trading programs through legislation and implementing regulations. All three allow point-source to point-source trading, but as of 2014 only Pennsylvania allowed non-point sources to generate credits. Virginia appears to be moving in that direction through pending regulatory amendments.  Connecticut uses a general permit that allows 79 point sources in the Long Island Sound watershed to trade nitrogen credits through a Nitrogen Credit Exchange Program. Each year plants that are not meeting their discharge limits can buy credits from plants who are below their required limits.

Virginia allows trading of nitrogen and phosphorus credits between point sources.  Most but not all sales are through a Nutrient Credit Exchange Association, which is privately run in consultation with the state, and provides tracking of credit generation and sales.  Pennsylvania allows a point source to buy credits generated by nonpoint and point source dischargers. It has a credit exchange, PENNVEST, but most trades are outside it.  The state keeps a registry of credits generated, sold and used. During 2014, there were 39 trades in Connecticut, 151 in Pennsylvania, and 31 in Virginia.

Trading programs are managed by the states, with oversight by EPA to be sure that both the elements of the trading program and individual permits that incorporate trades comply with the Clean Water Act. Those who buy credits said that the benefits of doing so include reduced cost of compliance, risk management (credits can be used to address plant failures which cause noncompliance), and flexibility in timing technology upgrades. 

GAO cites two primary disincentives to trading. First, if water quality criteria are written in narrative form, permits are also often written in narrative form, so it is difficult to determine whether or when use of a credit might be helpful. While EPA has been pressing states to adopt numerical criteria for nutrients, GAO reported that as of 2017 only 6 states had them.  I believe that this problem can be mitigated by including numerical water-quality based effluent limits (WQBELS) in NPDES permits even when the criteria element of a water quality standard is narrative.  I don’t know how widely this is done, but typically a total maximum daily load (TMDL), which is required for water bodies not meeting water quality standards, is expressed in numerical terms, and that provides the basis for WQBELs. GAO observed that the Ohio River Basin Interstate Water Quality Trading Project allows trading among sources in Ohio, Kentucky and Indiana, but almost no trading has occurred because there are no numerical limits in the water quality standards or a TMDL.

The second reason given by stakeholders to GAO for limited trading is the difficulty in determining the water quality benefits of a best management practice (BMP), which is what is installed on farmland to reduce runoff. Models do exist for converting the benefits of BMPs, such as vegetated buffers, no-till farming and cover crops, to numerical pollution reduction on an annual basis, but these are only estimates, and lack the precision that a point source discharger looks for in deciding whether to buy a credit from a farmer. EPA has recommended the use of an “uncertainty factor”, such as 2:1, by which a buyer of 100 nitrogen credits would have to buy 200 credits. This could be modified upwards or downwards based on site-specific conditions. It is still an estimate, and any trading program will need to apply a dose of adaptive management if it wants nonpoint source trading to get up and running.  The potential cost savings are sufficiently great that such an uncertainty ratio would not by itself, in most cases, discourage trading.

Several other factors, not discussed by GAO, also tend to discourage nonpoint source trading. There is the uncertainty of the buyer, who will rely on the credit to meet its NPDES permit terms: what if the BMP on which the credit is based fails? This is a particular concern for public utilities, whose managers and ratepayers may not want the utility relying for compliance on a set of BMPs over which the utility has no control. On the farmer side, what if the farmer invests substantial sums in BMPs to generate credits, but there turns out to be little or no market for them? Several states and some financing institutions are exploring ways to create a market to jump start the process, and we will likely see more on that. Finally, there is an inherent reluctance to be among the first in what is still largely an experimental program – especially if it is being run by a government agency.

It is no coincidence that two of the three most active programs, Pennsylvania and Virginia, are in the Chesapeake Bay watershed, where a numerical multi-state TMDL has been in place since 2010. (That TMDL was discussed in my blog article EPA Issues Biggest TMDL Ever for the Chesapeake Bay Watershed, posted March 4, 2011.) At this writing Maryland, also in the Chesapeake watershed, is developing a trading program which will include nonpoint source trading and will be run jointly by the Maryland Departments of Environment and Agriculture.  The only way the goals of the Chesapeake TMDL will be achieved is through major reductions of the nitrogen, phosphorus and sediment released by farms. In a future post, I will explore those three programs in more detail.

AN UNDERGROUND RIVER RUNS THROUGH IT

Posted on November 8, 2017 by Andrew Goddard

Environmental groups have for years sought greater regulation of coal ash waste from coal-fired power plants.  It turns out an old-fashioned Clean Water Act (CWA) citizen suit is sometimes a more effective tool.

In August, Judge Waverly Crenshaw, of the U.S. District Court for the Middle District of Tennessee, ordered the Tennessee Valley Authority to “wholly excavate the ash waste disposal areas” at the Gallatin Steam Plant and “relocate the excavated coal ash to a lined impoundment with no significant risk of discharge to waters of the United States.”  TVA estimates that this will take 24 years at a cost of $2 billion.  The least surprising aspect of this case: TVA has filed a notice of appeal.

How?  In 2015, the Tennessee Clean Water Network and the Tennessee Scenic Rivers Association filed a CWA citizen suit claiming that groundwater flowed through two ash pond areas and then to the nearby Cumberland River was an unpermitted point source.  Judge Crenshaw’s 125-page opinion in support of the Order includes this diagram showing one zone of earth penetrated only vertically (by storm water) and one penetrated both vertically and laterally (by storm water and groundwater):

 

This pretty much sums up the central issue in the case:  Is the groundwater flow through the lower part of coal ash landfill, picking up contaminants and transmitting them laterally to the Cumberland River, regulated by the CWA?

In his lengthy opinion, Judge Crenshaw found that the CWA does regulate groundwater where there is a direct and immediate hydrologic connection if plaintiffs are able to “prove a link between contaminated groundwaters and navigable waters.”  TVA argued that the CWA cannot reach discharges enabled by infiltration of rainwater that was not channeled by human act because they are not point sources, but Judge Crenshaw found that the ultimate question regarding point source is whether the pollutants were discharged from a discernable, combined, and discreet conveyance by any means.  He found that the entire ash dewatering complex was a discernible, combined and discreet manmade concentration of waste and that it was a “conveyance” because it is “unlined and leaking pollutants,” and thus is by definition “conveying pollutants.”

It takes a lot for a judge to impose $2 billion of costs on a public utility.  His displeasure with how the problem had been addressed over the past several decades was palpable.  He wrote that the older of the two coal ash sites

“…offers a grim preview of what it means to leave an abandoned unlined coal ash waste pond in place next to a river.  [It] has not been a waste treatment facility for over forty-five years. It has been ‘closed’ for almost twenty years.  Still, water infiltrates it.  Still, it leaks pollutants.  Still, counsel for TVA and counsel for environmental groups are locked in conflict about what can and should be done about it. … As long as the ash remains where it is in either site, there is every reason to think that the dangers, uncertainties and conflicts giving rise to this case will survive another 20 years, 45 years or more.  While the process of closure by removal would not be swift, it would, at least, end.” 

With that, he ordered that TVA remove the coal ash to an appropriate lined site that will not discharge into waters of the United States.

There was one bit of good news for TVA: because of the cost of the chosen remedy, Judge Crenshaw decided not to assess penalties. 

Not every argument was about such large costs.  TVA’s objection to the plaintiffs’ request for attorney’s fees and costs included an objection to caviar included in a claim for $200 for food and snack items purchased from Kroger before and during the trial.  The plaintiff’s response included a receipt showing the “caviar” purchase was $16.24 of “Texas Caviar,” and attached Kroger’s recipe therefor.  It is devoid of fish eggs but does include chopped cilantro.  The recipe is available through PACER here.

H.R. 23: A VERY BAD FEDERAL WATER LAW BILL—AND A WORSE PRECEDENT

Posted on August 24, 2017 by Richard M. Frank

H.R. 23 is an important and most unfortunate environmental bill currently working its way through the U.S. Congress.  Sponsored by California Republican Congressman David Valadeo—with a strong assist from House Republican Majority Leader Kevin McCarthy—H.R. 23 passed the House of Representatives last month on what was largely a party-line vote, 230-190.  It has now moved to the U.S. Senate.

This California-specific legislation would “reform” federal and California state water and environmental laws in order to provide more water from federal and state water projects in California to state agricultural interests in the state’s Central Valley.  H.R. 23 would do so at the expense of environmental values.  (That’s not mere interpretation or speculation on the part of this observer—it’s the express intent of the bill.)

Why, exactly, is H.R. 23--which has largely evaded public and media attention to date--such a flawed legislative proposal?  Let me count the ways:

First, it would reverse an over century-long tradition of federal deference to state water law regarding the construction and operation of federal water projects.  Congress made that commitment in the Reclamation Act of 1902, which transformed the settlement and economy of the American West.  Congress has reiterated this commitment to cooperative federalism in numerous subsequent federal statutes.  But H.R. 23 reneges on that promise, expressly preventing California state water regulators from imposing any restrictions on the federal Central Valley Project that would protect environmental values.

Doubling down on its preemptive effect, H.R. 23 expressly exempts the CVP (and those who obtain water from it) from application of California’s public trust doctrine, which—as is true of many other states—operates as a longstanding, cornerstone principle of California natural resources law.

Additionally, H.R. 23 brazenly exempts operation of the CVP and other California water projects from the federal Endangered Species Act “or any other law” pertaining to those operations.

H.R. 23 thus is terrible news for California’s environment.  But why should environmental attorneys from other states be concerned about the bill?

The answer is again multifaceted.  H.R. 23 represents the first serious Congressional effort of 2017 to weaken application of the Endangered Species Act.  The broad ESA exemption contained in H.R. 23 could easily be replicated in future federal legislation affecting federal, state or local projects in other parts of the country.

Similarly, if the longstanding tradition of federal deference to application of state water law is breached by passage of H.R. 23, rest assured that similar attempts will be made concerning similar projects in other states as well.

H.R. 23 is opposed by both of California’s U.S. Senators, along with California Governor Jerry Brown.  Even more notably, California’s largest water district—the Metropolitan Water District of Southern California—has signaled its opposition to the bill, declaring that it “goes too far” in elevating agricultural water interests over California’s environment.

H.R. 23: an awful bill for California, and a terrible precedent for the nation as a whole.

The Cuyahoga River Makes News Again

Posted on May 11, 2017 by Michael Hardy

To many environmental law veterans, the name of the Cuyahoga River triggers memories.   The 1969 fire on that River galvanized major reforms to the water pollution laws of the United States.

As I sit in my 36th floor office and look out the windows in several directions, I can see most of the upper Cuyahoga River course through the “Industrial Flats” as it winds from the Cleveland Harbor north on Lake Erie to the large Arcelor Mittal steel plant nearly six miles downriver.  Known as the “crooked river” by Indian lore, it has many oxbows and switchbacks with colorful names like “Collision Bend” and “Irishtown Flats”.  Home to rowing teams, large tugs, iron ore freighters, and sand and gravel barges, it is a busy river requiring constant upkeep through dredging.

The Cuyahoga River has made remarkable progress since the 1969 fire, with many targeting the fifty-year anniversary of the fire for the removal of its “impaired” classification.  But the River still suffers from years of industrial and municipal sewage disposal.  Although a variety of fish have returned, it should not be surprising to know that slightly elevated PCBs remain in the sediments, a fact that complicates the dredging and disposal of the spoils.  Therein lies the newest chapter in the River’s history.

Congress has funded the dredging of the Cuyahoga River for nearly 40 years and, in 2015, allocated resources to the Army Corps of Engineers (Corps) for that year.  Accordingly, the Corps filed an application with the Ohio Environmental Protection Agency (OEPA) for a water quality certification under Section 401 of the Clean Water Act before commencement of the dredging project.  The OEPA, concerned over elevated levels of PCBs in some of the dredging spoils, authorized the dredging to proceed, provided the Corps disposed of all the dredged material in on-site “confined disposal facilities” (CDFs).  Based on sampling and analysis it conducted, the Corps agreed to utilize a CDF for the sediments dredged from the Cleveland Harbor, but objected to the required use of a CDF for the spoils coming from the “Upper Channel” of the River.  Calculating what it called a “Federal Standard” to identify less costly alternatives, the Corps proposed instead to use “open lake disposal” for those materials, which immediately drew the opposition of the OEPA and Ohio Department of Natural Resources.  The Corps argued that the use of a CDF for those spoils would add nearly $1,300,000 to the cost of the project.  The Court wanted the “Federal Standard” to override Ohio’s anti-degradation water quality rules and other initiatives designed to improve the health of Lake Erie.  Instead of an administrative appeal of the OEPA conditional certification, the Corps gave the State an ultimatum – either find a “non-federal source” for the added costs or forfeit the Congressionally authorized dredging.  Because of the potential dire economic consequences to the steel mill and other businesses, the State sued the Corps and obtained a preliminary injunction.  The District Court sided with the State and ordered the dredging to commence, with the responsibility for the incremental costs to be determined in subsequent proceedings.

On May 5, 2017, the District Court issued a 52-page Opinion finding that the Corps’ actions were “arbitrary and capricious” under the Administrative Procedure Act. State of Ohio v. The United States Army Corps of Engineers, U.S.D.C. N.D.Ohio Case No. 1:15 – CV 629.  Among other things, the Court found that the Corps’ elevation of its so-called “Federal Standard” to supersede duly promulgated water quality standards of Ohio exceeded the Corps’ authority. The Corps could not make up its own rules to evade its obligations to comply with properly adopted environmental standards or to fulfill Congressional mandates to dredge the entirety of the Cuyahoga navigation channel and use a CDF to manage the spoils.  Accordingly, the District Court ruled that the Corps must absorb the added costs of the on-land CDF disposal.

Jordan Cove LNG Project Scores Legal Victory

Posted on April 10, 2017 by Rick Glick

The Jordan Cove LNG project in Coos Bay, Oregon, prevailed in a legal challenge to a key permit.  The permit, issued by the Oregon Department of State Lands, allows dredge and fill work for a deep water ship channel.  In Coos Waterkeeper v. Port of Coos Bay, the Court of Appeals rejected that challenge and upheld the permit.

Petitioners’ main argument on appeal was that DSL’s permitting decision should have applied statutory environmental standards not only to the dredge and fill work, but also terminal operations after construction.  The court found this argument to lack merit, finding that DSL’s authority is limited to the “project,” defined in the statute and its legislative history as the dredge and fill work only. 

Petitioners also argued that DSL should have asserted permitting jurisdiction over complementary uplands excavation.  This work would initially be separated from the bay by a 40-foot berm, and then the berm would be removed to create the channel.  The court concluded that DSL jurisdiction would not apply to uplands work (i.e. above the high tide line), and that removal of the berm and flooding the affected uplands are within scope of the permit.

The politics of LNG development in Oregon are highly charged.  The Oregon LNG project was abandoned following election of a new county board of commissioners made up of project opponents.  Local opposition slowed down state regulatory review and the project never was tested against objective legal standards.  It is heartening to see that for the Jordan Cove project, which also is controversial, both the state agency and the court assessed the project as they would any other.  The politics are still there, but the rule of law in this instance rose above.

The outcome of this case highlights an anomaly in green Oregon.  Unlike our neighbors to the north and south, we have no mini-NEPA law.  If we did, the environmental effects of the Jordan Cove project taken as a whole would certainly have been part of the state permitting calculus.  Many bills to create a comprehensive environmental impact review process have been proposed, but none have taken hold.  With a Democratic controlled legislature and state house, it seems only a matter of time.

Should Courts Defer to EPA’s Scientific Expertise if EPA Gets Rid of Its Expertise?

Posted on April 6, 2017 by Seth Jaffe

Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate.  I think that the result is both correct and unsurprising.

However, one part of the opinion – a recitation of black-letter law – caught my eye.  In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.”  No surprise there.  It also noted that courts are particularly deferential when reviewing agency scientific determinations.  Also no surprise.

And yet….

What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding?  Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.

And yet….

What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks?  Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?

Just asking.  It’s purely a hypothetical, of course.

The Latest Executive Order: Any Kind of Consistency Is the Hobgoblin of Little Minds

Posted on March 31, 2017 by Seth Jaffe

Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal.  Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules.  There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.

Regardless, though, it’s important.  Social cost of carbon?  Poof.  Gone.  Climate Action Plan?  Gone.  Consideration of climate change in environmental impact reviews?  Gone.

We already know all this, though.  I’d like to focus on a few details concerning the EO that might have gone unnoticed.

  • The order states that development of domestic natural resources “is essential to ensuring the Nation’s geopolitical security.”  I found this statement interesting in light of the recent statements by Secretary of Defense Mattis, who very clearly stated that climate change is real and is itself an important security risk.
  • The order states that environmental regulations should provide “greater benefit than cost.”  I found this statement somewhat odd, given that the President’s prior EO known as the 2-for-1 order, essentially requires agencies to ignore the benefits of regulations and focus solely on the costs that they impose.
  • Similarly, the Order requires agencies, in “monetizing the value of changes in greenhouse gas emissions resulting from regulations,” ensure that their analyses are consistent with OMB Circular A-4, issued in 2003.  The Order states that Circular A-4 embodies “best practices for conducting regulatory cost-benefit analysis.”

I’d be interested in knowing if a single one of the authors or peer reviewers of Circular A-4 have anything nice to say about the 2-for-1 Order?

Public Parks in Massachusetts – Here Today, Gone Tomorrow?

Posted on March 10, 2017 by Mary Ryan

The Massachusetts Supreme Judicial Court (SJC) will soon decide how hard or easy it is to sell or change the use of public parks. Article 97 of the Massachusetts Constitution provides that the “people shall have the right to clean air and water . . . and the natural, scenic, historic, and esthetic qualities of the environment” and protects “the people in their right to the conservation, development and utilization of the agricultural, mineral, forest, water, air and other natural resources  . . . .” Under Article 97, any change in use or disposal of lands taken or acquired to protect such rights requires a two-thirds vote of the state legislature.

In its most recent pronouncement on Article 97, the SJC held that it did not apply to block the Boston Redevelopment Authority (BRA) from building a waterview restaurant and bar at the end of Long Wharf in Boston Harbor. Project opponents argued that the land was subject to Article 97 and that issuance of a key development permit was a use or disposition requiring a two-thirds legislative vote.

The BRA took the land by eminent domain in 1970 pursuant to an urban renewal plan which had, as one of fifteen goals, providing “public ways, parks and plaza which encourage the pedestrian to enjoy the harbor and its activities.” While this goal is consistent with Article 97, it is also incidental to the overall goal of urban renewal; thus, the land was not taken for Article 97 purposes. Nor did the SJC find any subsequent evidence that the land was later designated for those purposes, with the SJC strongly suggesting that only a recorded restriction would be sufficient to do so. That would have put everyone on notice that Article 97 applied and legislative action was necessary for a change of use. The SJC did note in dicta that in some cases, “the ultimate use to which the land is put may provide the best evidence of the purposes of the taking. . . .”

Fast-forwarding to 2016, the City of Westfield so far has prevailed in its efforts to use a playground as the site for a new school building, without a legislative vote approving the change in use. This is a fairly typical example of how the issue often arises in cities and towns strapped for cash or available land. The City acquired the land by tax forfeiture in 1939 and dedicated it for use as a playground through a City ordinance in 1957. And in 2010, the City endorsed an open space and recreation plan that included the playground as open space. But no formal Article 97 designation or restriction was ever recorded. The Massachusetts Appeals Court ruled in favor of the City, but there was a concurring opinion from one of the members of the three judge panel (coincidentally the former head of the Environmental Protection Division of the Office of the Massachusetts Attorney General). While constrained to follow SJC precedent, Justice Milkey noted that often there is a murky past on how public land came to be used for parks or other recreational use and that requiring an instrument of record “threatens to reduce art. 97 to near irrelevancy. . . .”

The SJC granted further appellate review and will hear the case in April. Amicus briefs were requested and many are expected. There is considerable interest in the outcome of the case, including from the Attorney General’s Office, municipalities and conservation groups. 

PS:  As it happens, there won’t be a restaurant and bar at the end of Long Wharf anytime soon, at least according to the latest word from the courts. As part of the urban renewal development in the 1960s and 1970s, the BRA used federal funding from the Land and Water Conservation Fund (LWCF) to acquire a certain portion of Long Wharf. Land acquired or developed with LWCF money may not be converted from public outdoor recreational use without National Park Service (NPS) permission. After the SJC decision, with the help of a tip from two former employees, NPS found a map showing the restaurant would be on the parcel acquired with LWCF money. The First Circuit Court of Appeals recently ruled against the BRA, hoping to end the “long war for Long Wharf.”

Coincidentally, LWCF money, channeled through a state program which provided that use of LWCF money triggers Article 97, was used to improve the Westfield playground in 1979. But the Massachusetts Appeals Court held that the state agency restriction was trumped by the SJC interpretation of the Massachusetts constitution. This is yet another issue in the pending appeal.

ATSDR...A New Role under the Clean Air Act?

Posted on February 6, 2017 by Todd E. Palmer

In recent months, the Agency for Toxic Substances and Disease Registry (ATSDR) and the “minimal risk levels” (MRLs) established by ATSDR have played a direct role in EPA’s efforts to regulate stationary sources under the Clean Air Act. The ATSDR is an advisory agency created by CERCLA in 1980 to help EPA assess health hazards associated with Superfund Sites. ATSDR’s role was expanded by the 1984 RCRA Amendments to assess risks from hazardous substance releases at landfills and surface impoundments. In 1986 SARA further expanded ATSDR’s responsibilities under CERCLA to assess the health impacts of hazardous substance releases. 

In response to its CERCLA mandate, ATSDR has developed MRLs which define the level of daily human exposure to a hazardous substance release that is likely to result in no appreciable risk of an adverse non-cancer health effect.  MRLs are designed to be a screening tool and are not intended to identify levels that would trigger cleanup or other action.  As a result, exposure to a hazardous substance above an MRL does not necessarily mean that adverse health effects will occur. Rather, MRLs “are set below levels that, based on current information, might cause adverse health effects in the people most sensitive to such substance-induced effect.” 

In comparison to the MRLs developed under CERCLA, there are two sets of standards established by EPA under the federal Clean Air Act to address health impacts from air emissions.  One of these is the National Ambient Air Quality Standards (“NAAQS”) which define the concentration of a criteria pollutant in ambient air deemed to be protective of human health.  State implementation plans are designed to achieve compliance with NAAQS.  Likewise, the air emissions from permitted stationary sources are analyzed to ensure consistency with NAAQS.  NAAQS are developed through a rigorous process that solicits input from the scientific community and public at large, and are promulgated as rules which are invariably subject to legal challenge and judicial review.  

EPA also establishes emission limitations under Section 112 of the Clean Air Act to control toxic air emissions.  These standards limit the emissions of hazardous air pollutants from specified categories of stationary sources.  EPA assesses the risk to public health and the environment that remains after implementation of these limitations and must promulgate new health based standards to mitigate those residual risks.

In recent months EPA has moved beyond the NAAQS and toxic air pollutant standards to rely upon the ATSDR and its MRLs in identifying the allowable, and ostensibly enforceable, concentration of pollutants in ambient air under the Clean Air Act. 

In one case, EPA asked ATSDR to evaluate the ambient air quality surrounding a stationary source.  ATSDR concluded that the monitored concentrations of manganese from that source exceeded the pollutant’s MRL.  Based on this finding, US DOJ filed a civil complaint against the facility.  One of the claims alleged that the monitored manganese concentrations presented an imminent and substantial endangerment to public health and that injunctive action was necessary under Section 303 of the Clean Air Act. The complaint requested a judicial order requiring installation of fence-line air monitors and implementation by the source of all measures necessary to prevent exceedance of the MRL for manganese at those monitors. In effect, EPA identified the MRL as the allowable concentration of manganese to be emitted under the Clean Air Act.  The case has settled.

In other matters, EPA Region 5 utilized the information from an ATSDR health consultation to justify issuance of a Section 114 order under the Clean Air Act which required installation of fence-line PM10 monitors around a facility with outdoor storage piles where manganese emissions were also an issue.  The company refused to install the monitors and EPA filed a civil complaint seeking to enforce the Section 114 order. EPA sought summary judgment, relying in part upon an ATSDR finding that manganese concentrations in the ambient air surrounding a nearby facility exceeded the MRL.  The underlying ATSDR assessment also used PM10 Air Quality Guidelines (AQG) from the World Health Organization (WHO) to conclude that ambient PM10 concentrations might cause respiratory problems for sensitive individuals.  Notably, the WHO AQG are more conservative than the NAAQS (the WHO AQG for PM10 is 50 μg/m3 as a 24-hour mean, whereas the NAAQS for PM10 is 150 μg/m3 averaged over that same time period).  The case settled.

It’s worth noting that ATSDR has finalized approximately 150 inhalation based MRLs covering pollutants emitted by a broad range of industrial facilities.  However, I think it is safe to assume that stationary sources do not view MRLs as imposing any additional Clean Air Act strictures on their operations since the MRLs are not listed as applicable requirements in air permits.  Moreover, the Title I and V permitting programs do not require sources to perform dispersion modeling to ensure compliance with MRLs. 

It remains to be seen whether EPA under the new administration will continue to reach out to ATSDR and utilize the MRLs in addressing air pollutant emissions, particularly where such limits have never been vetted through a rulemaking process.   I wouldn’t bet on it.

It’s Getting Hot in Hells Canyon

Posted on February 2, 2017 by Martha Pagel

The state of Oregon has turned up the heat in Hells Canyon.  The burning question, so to speak, is whether a state can require passage and reintroduction of anadromous fish as a condition of certification under Section 401 of the Clean Water Act for relicensing of an existing hydroelectric project.  The issue gets hotter because the particular project involved  -- the Hells Canyon Complex (“HCC”), owned by Idaho Power Company (“IPC”) -- is located on the Snake River, which forms the border between Oregon and Idaho.  The State of Oregon has issued a draft 401 certification with detailed conditions for passage and reintroduction of anadromous fish into a tributary on the “Oregon side” of the river.  Idaho is opposed to reintroduction of any fish species above Hells Canyon Dam, leaving IPC in the middle.

Making a very long and complicated story short, for more than 13 years IPC has been working with state and federal agencies and stakeholders toward relicensing of the HCC.  The project consists of three developments, each with a dam, reservoir, and powerhouse.  In 1955, FERC issued a 50-year license with recognition that construction of the project would block fish passage and eventually lead to extirpation of anadromous fish above the dams.  As a result, the initial FERC license included mitigation conditions to offset fish impacts, and additional mitigation was provided under a subsequent settlement agreement. 

After more than a decade of studies, meetings, and negotiations, it looked like IPC and the states were on track for general agreement as to the terms and conditions of compatible, but separate 401 certifications to be issued by Oregon and Idaho – except as to the issue of fish passage and reintroduction. Despite Idaho’s objections, the Oregon Department of Environmental Quality (ODEQ) issued its draft 401 certification for public comment on December 13, 2016.  The draft relies on a number of existing state water quality standards as the legal basis for requiring fish passage and reintroduction, though none of the standards is directly on point. ‎

Public comments on the proposed 401 certification are due February 13.  Objections relating to the fish passage and reintroduction conditions are likely to focus on whether such conditions are generally within the scope of 401 certification for FERC-licensed hydroelectric projects, and, if so, whether Oregon’s specific water quality standards provide a sufficient regulatory basis for the proposed ODEQ action.  ‎The comments may also raise questions about the baseline for mitigation and whether impacts to fish due to construction of the project – as opposed to on-going operations -- have already been fully mitigated.  And then there’s the question of Idaho’s opposition. 

ODEQ will consider the comments before issuing a final 401 certification decision.  If the states are unable to resolve their differences over the passage and reintroduction issue, it’s likely to get a lot hotter in Hells Canyon. 

And finally, a disclosure that the HCC relicensing issues hit close to home for ACOEL:  I am part of a team representing IPC, and other College members are very much involved on both sides of the issue.  There’s a lot we won’t be able to talk about at the next annual meeting! 

“Reports of My Death Are Greatly Exaggerated”

Posted on January 27, 2017 by Robert M Olian

So said Mark Twain (actually, he didn’t), and now the same can be said for EPA’s rule exempting water transfers from NPDES permitting requirements. When I last addressed this topic nearly three years ago in “Ashes to Ashes; Waters to Waters – The Death of EPA’s Water Transfer Rule”, a federal district court had just vacated the rule seeking to clarify EPA’s position that transfers of water between navigable bodies of water do not require NPDES permits. See Catskill Mountains Chapter of Trout Unlimited, Inc. v. United States Environmental Protection Agency (SDNY, 3/28/2014)

Displaying a prescience that would make Carnac the Magnificent proud, I closed that earlier post with the assertion that “the only certainty is that litigation over the Water Transfer Rule will continue to flow.” I am therefore personally pleased to report that flow it has, the Second Circuit having now overturned the district court decision in a 2-1 opinion issued on January 18, 2017. The majority opinion upheld EPA's interpretation of the Clean Water Act to exempt water transfers, finding it was a “reasonable construction of the Clean Water Act supported by a reasoned explanation” and was entitled to deferential review under the Supreme Court’s Chevron doctrine.

 Not content to rest on my laurels, I’m going to make another prediction. The Second Circuit won’t agree to rehear en banc and, if certiorari is sought, the Supreme Court won’t take the case. All of which means that, except perhaps for one last post to gloat yet again about my ability to see into the future, this is the last you’ll hear about litigation over the water transfer rule.

The New Administration’s Initial Executive Order and Memoranda On Energy and Environmental Issues

Posted on January 26, 2017 by Theodore Garrett

The Trump administration has issued a key Executive Order and several memoranda relating to energy and the environment.  The goal of the Executive Order -- Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects – is to expedite environmental reviews and approvals.  It provides that action by the Chair of the Counsel of Environmental Quality to designate an infrastructure project as high priority would trigger an expedited review and approval process, as described in the memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.

Two other memoranda – those addressing the construction of the Keystone Pipeline and construction of the Dakota Access Pipeline – are intended to clear the way for approval of these two controversial pipelines.  The President also stated that he wants pipe for U.S. pipelines to be made with American steel.     

Finally, the White House issued a memorandum providing for a regulatory freeze of regulations that have not taken effect and withdrawal of regulations that have not yet been published in the Federal Register. In accordance with this directive, EPA has issued a notice postponing to March 21, 2017 the effective date of 30 regulations that were published by EPA after October 28, 2016.  The delay is intended to provide further review of these regulations by the new Administration.

The Order and memoranda do not change the requirements of relevant environmental statutes.  It remains to be seen to what extent these policies will affect future permitting or regulatory decisions.  Interested parties will wish to carefully monitor how these developments unfold. 

The NSR Regulations Still Make No Sense: The 6th Circuit Reverses the DTE Decision Based on a 1-Judge Minority Opinion

Posted on January 17, 2017 by Seth Jaffe

Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations.  According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.

One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point.  What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.

How could such a thing happen, you might ask?  Here’s the best I can do.  Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained.  Judge Rogers disagreed and dissented.  Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety.  However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1.  The law remains an ass.  

Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.

And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.

WHO YA GONNA CALL?

Posted on October 25, 2016 by Keith Hopson

(Best read while humming the theme song from Ghostbusters)

In an unprecedented move (to my knowledge) the Industrial and Hazardous Waste Permits Section of the Texas Commission on Environmental Quality (TCEQ) recently requested permit holders provide the agency with their facility’s primary and secondary emergency response points of contact.  Specifically, they ask for the names and office and cell and/or pager numbers.

The information is typically included in a facility’s permit, but my personal experience is a change of phone numbers or even personnel may or may not result in a timely permit modification.  The fact the agency intends to keep this information in a spread sheet format should make the data more readily available in an emergency than having to extract the information from one or more permits.

The inspiration for this somewhat unusual request was the recent proliferation of earthquakes in our neighboring state to the north although any other natural (floods, hurricanes, or tornados) or manmade disasters could well result in the same need. 

A simple action?  Yes.  Could it be very beneficial?  Certainly; because, as we all know, in an emergency it’s important to know who ya gonna call …

A Lumber Mill Biomass CoGen Need Not Consider Other Fuels In Its BACT Analysis. Other Sources Should Be So Lucky.

Posted on September 8, 2016 by Seth Jaffe

Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead.  In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants biomassfrom such redefinition of the source.  However, other types of facilities will get no comfort from the decision.

Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills.  Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.

Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas.  The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste.  This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:

"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."

Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases.  It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection.  If a coal plant intends to burn coal from the mine next door, ok.  If a lumber mill intends to burn its own wood waste, ok.  Otherwise, however, all bets are off.

What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued.  Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.

Cape Wind Project Suffers Another Blow: Is This The Knock-Out?

Posted on July 13, 2016 by Jeff Thaler

The U.S. Court of Appeals for the District of Columbia Circuit on July 5 issued a ruling that the federal government violated the Endangered Species Act and the Administrative Procedure Act in approving the long-running, oft-litigated Cape Wind offshore wind project proposed to be built off the Massachusetts coast.  Senior Judge Randolph, writing for an unanimous panel, confirmed the District Court’s rejections of a number of the claims advanced by Plaintiffs (who included the Public Employees for Environmental Responsibility, the Town of Barnstable, and the Alliance to Protect Nantucket Sound), but reversed the District Court on two key points.

The proposed Cape Wind project, which has been the subject of voluminous news coverage and many court cases for well over a decade, sought to construct 130 3.6 MW turbines in shallow waters near Nantucket.  Challenges have included scenic impacts; Native American concerns that the project would will block their sunrise views across the sound, disturb ancestral burial grounds, and perhaps disturb cultural relics; and issuance of submerged land leases required by the project. Financial hurdles seemed to put the project into a death spiral two years ago, but quietly the project developers have continued legal fights to defend the permits and approvals previously issued. They have largely been successful—until this month.

Early on, biologists with the U.S. Fish and Wildlife Service (“FWS”) had recommended that the wind turbines be shut off during limited periods of highest risk to two birds listed under the Endangered Species Act-- the piping plover and roseate tern.  However, the FWS ultimately rejected that conservation measure on the grounds that it would impair the financial feasibility of the project. The Court of Appeals held that the FWS’s action was arbitrary and capricious.  The Court further held that the project cannot proceed without compliance with the Migratory Bird Treaty Act and without further analysis of environmental impacts pursuant to the National Environmental Policy Act. 

In conclusion, the Court stated:   “We reverse the district court’s judgment that the Bureau’s environmental impact statement complied with NEPA and that the Service’s incidental take statement complied with the Endangered Species Act, and we vacate both statements.” A copy of the ruling is here.

Would You Like Some Regulatory Inaction With Your Tea?

Posted on June 22, 2016 by Linda Benfield

Wisconsin continues to be the playground of Tea-Party efforts to minimize the power of government, particularly in the environmental arena. On May 10, 2016, the Wisconsin Attorney General opined that the Department of Natural Resources (“WDNR”) does not have the authority under state law to impose monitoring wells or cumulative impact conditions on high capacity well permits. Insert A.PDF

In 2011, Governor Scott Walker and the Republican legislature passed “Act 21,” which contains a “limited government” provision prohibiting agencies from implementing or enforcing “any standard, requirement, or threshold” in a permit, unless the language “is explicitly required or explicitly permitted by statute or by a rule…”  Wis. Stat. § 227.10 (2m) Insert B.PDF

The Attorney General’s Opinion carefully argues that a contrary state Supreme Court opinion issued shortly after the passage of Act 21 is distinguishable. In Lake Beulah Management District v. State of Wisconsin, the Wisconsin Supreme Court found in 2011 that the WDNR had the statutory authority under state law and a general duty to consider the impacts of a high capacity well on the nearby Lake Beulah. The Court also held that the applicable statute constituted a broad legislative grant of the public trust duty to the agency in the context of high capacity well regulation, and upheld the WDNR’s permit.

The Attorney General’s Opinion asserts that Lake Beulah is “no longer controlling.” After the oral argument in the case but before the opinion was released, the parties brought Act 21 to the Court’s attention.  The Court noted in a footnote that Act 21 did not change the underlying environmental statute and stated that none of the parties argued that the new law impacted the WDNR’s authority in the Lake Beulah case. The Attorney General has seized on the footnote.

The Attorney General’s Opinion relies on the timing of Act 21’s passage, the footnote, and a difference of opinion. The Attorney General argues that the state Supreme Court relied on implicit statutory authority to allow the WDNR to condition high capacity well permits, and Act 21 now requires explicit authority.  Where the underlying environmental statute allows the agency to place conditions on high capacity wells, including “location, depth, pumping capacity, rate of flow, and ultimate use,” it does not state that “monitoring” is an “explicitly permitted condition.” The Attorney General further notes that the legislature has not delegated its public trust duty to the WDNR. The Opinion has been called “a huge step backward for groundwater protection” by environmentalists and “the demise of implied agency authority” by industry.

The expanding application of Act 21 provides a developing opportunity to challenge air and water permitting decisions in Wisconsin. Although the Attorney General’s Opinion is non-binding, it reflects the administration’s push toward limited environmental regulation. It is likely to become increasingly difficult for the agency to resolve complex environmental issues that previously were addressed in negotiated permit decisions, raising the issue of whether it is always in industry’s interest for an environmental agency to be prohibited from making technical and nuanced decisions.

Ninth Circuit to federal land trespassers: Fuggedaboutit

Posted on February 2, 2016 by Theodore Garrett

Tensions ran high in eastern Oregon in early January 2016 as an armed group seized the headquarters of a national wildlife refuge. The occupation began as a protest of the sentencing of ranchers who were convicted of arson on federal lands in Oregon. The occupation subsequently became a rally for opening federal public lands to all. Entering the fray, albeit indirectly, the Ninth Circuit in its January 15, 2016 decision in United States v. Hage, held that defendants’ unauthorized grazing of cattle on federal lands in Nevada was unlawful. Contrary to the views of the Oregon occupiers that they are defending the Constitution, the Ninth Circuit held that grazing cattle without a grazing permit violated federal statutes as well as the state law of trespass, noting that a grazing permit is “a revocable privilege” and is not a “property right.” The Ninth Circuit rejected the district court’s ruling that the government cannot claim trespass if the cattle stayed within a reasonable distance of a source to which defendants had water rights. Concluding that the district judge “harbored animus toward the federal agencies,” the Ninth Circuit requested the Chief Judge of the Northern District of Nevada to assign the case to a different judge on remand. Meanwhile, back in Oregon, several of the protesters have been arrested. One was killed. 

You Say Yes, I Say No, You Say Stop…

Posted on January 11, 2016 by Robert M Olian

Seth Jaffe’s recent post about the tension between Colorado’s governor and attorney general over who has the right to speak on behalf of Colorado in the Clean Power Plan litigation brought to mind the very first piece of environmental litigation I ever worked on, Village of Wilsonville v. SCA Services. In the late 1970s, SCA (which later became part of Chemical Waste Management) began operating a large hazardous waste landfill, fully permitted by Illinois EPA, in Wilsonville, Illinois, and the residents were predictably displeased. (Hint to those of you who operate similar NIMBY-ish facilities – don’t do as SCA did and disseminate marketing materials displaying the site as the “bullseye target” on a regional map showing concentric circles of distances to the facility.)

Not satisfied with some pretty effective self-help efforts (e.g. the Village dug a three-foot wide trench for “sewer repairs” across the only road into the site, thereby halting all truck traffic into and out of the facility), the Village sued SCA and Illinois EPA (the permitting agency) seeking permit revocation and a halt to operation of the facility. The case got off to an unusual start in the trial court (our firm was not retained until the unsuccessful appeal to the Illinois Supreme Court) when then-Attorney General William Scott, who had appeared in the case on behalf of Illinois EPA, stuck his finger in the air, felt which way the wind was blowing, and abandoned the defense of Illinois EPA to file his own complaint and join with the Village against the defendants, including the State agency. Perhaps unlike Colorado, Illinois law is pretty clear that the Attorney General has independent enforcement powers when it comes to environmental matters, so Scott’s volte-face didn’t cause much of a stir other than at Illinois EPA, which had never before been left hanging in the wind like this.

Bill Scott probably remains the Illinois Attorney General best known for environmental enforcement; the first line in his obituary correctly notes that he “achieved an international reputation for his battle on behalf of the environment during his four terms” as Attorney General. Scott tried but never made it to the Governor’s chair, though he clearly had what it takes. Like Otto Kerner, Dan Walker, George Ryan, and Rod Blagojevich - Illinois governors #33, 36, 39 and 40 respectively - Scott later served time in federal prison.

Over the years, notable cases of tension between disparate agencies of the same sovereign have spread from Wilsonville to Colorado to China. A recent news article notes, “Prosecutors in eastern China have filed a lawsuit against a county-level environmental protection department, accusing it of ‘failing to fulfil its regulatory duties’ in its supervision of a local sewage firm.” Apparently the United States is a successful exporter of something; I’m not sure what to call it, but it isn’t as desirable as the Fab Four or iPhones.