When an environmental lawyer is asked to draft or review a corporate environmental, health and safety program, the question arises as to what elements should be included. In the post-mortem evaluation of an accident, spill or some near-miss, it is often apparent that the corporate culture has played an important role, whether for good or for ill, in the employees’ implementation of the company’s program or in their immediate reactions to an unanticipated event. New guidance by the Bureau of Safety and Environmental Enforcement (BSSE) should help to shape a positive corporate culture toward compliance and environment protection. BSSE was created as part of the Department of Interior’s response to the Deep Horizon incident.

In a short notice issued in the May 10, 2013 Federal Register, the BSEE has issued its Final Safety Culture Policy Statement. This Statement briefly describes what BSEE regards as nine foundational characteristics of a positive safety culture -- one that embodies a commitment to conducting business in a safe and environmentally responsible way. These nine characteristics are: Leadership Commitment to Safety Values and Actions; Hazard Identification and Risk Management; Personal Accountability; Work Processes; Continuous Improvement; Environment for Raising Concerns; Effective Safety and Environmental Communication; Respectful Work Environment; and Inquiring Attitude. BSEE adds that additional traits can amplify or extend these basic characteristics.

Virtually all of these characteristics are familiar to an experienced environmental compliance counselor. Indeed, BSEE credits the Nuclear Regulatory Commission, the Federal Aviation Administration and other organizations for their input. Accordingly, the BSEE’s concise listing of these characteristics should be recognized for their application not only to BSEE’s focus on improving safety culture for Outer Continental Shelf activities, but also to environmental, health and safety programs in general. Hence, the BSEE Safety Culture Policy Statement is worth considering and perhaps citing when environmental lawyers are asked to develop or comment upon such corporate programs.

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.

There is a vital need for attorneys and other professionals to understand and discuss the past, current, and future role of our public lands system  in the energy policy of the nation.  In April of 2013, ABA SEER is hosting a symposium in partnership with The Public Land and Resources Law Review (PLRLR) at The University of Montana titled Balancing Act and Paradigm Shift:  The Role of Public Lands in America’s Energy Future.  The PRLR’s 35th Public Land Law Conference and ABA SEER’s 41st National Spring Conference on the Environment will combine to create an academic symposium to discuss the role of America’s three major sources of public lands and resources: river systems, terrestrial lands, and oceans. 

If your work involves public lands, public resources or energy, this conference will be of interest to you.  If you work with law students (in J.D. or LL.M. programs) with an interest in public lands and resources, I hope you will alert them to this opportunity and encourage them to submit an article. Entries should demonstrate original thought on a question of legal and/or policy significance relating to the symposium topic of the role of public lands and resources in America’s energy future.  The topic is not confined to any particular type of public land or issue in energy or environmental law or policy.  Any relevant article, case comment, note, or essay may be submitted, including writing submitted for academic credit. Jointly authored pieces are eligible only if all authors are students and consent to submit.

The winning submissions will receive a $1,000, $500, and $250 cash prize for 1st, 2nd, and 3rd place submissions, respectively. First and second place entries will be invited to attend the symposium on April 18, 2013 in Missoula, MT, with travel support from ABA-SEER.  The first place entry will be published in the symposium edition of the Public Land & Resources Law Review in the summer of 2013.

The deadline for the student writing competition is January 14, 2013.  For full details on entry requirements, click here.    

In an effort to inject (no pun intended) regulatory certainty into the permitting of underground injection wells used in oil and gas hydraulic fracturing (HF) operations, on May 10, EPA issued draft guidance for HF operators utilizing diesel fuels in their injection process.  EPA did not initially consider HF to be covered by its Safe Drinking Water Act (SDWA) Underground Injection Control (UIC) program.  EPA's view changed as the result of a number of court decisions which concluded that HF activities are subject to that program.  In 2005, the Energy Policy Act revised the SDWA definition of underground injection was modified to exclude from UIC regulation the underground injection of fluids or propping agents other than diesel fluids used in HF operations related to oil, gas and geothermal production activities.  This exclusion has, understandably, proven to be controversial, at least in part because there is no one definition of what constitutes "diesel fuel".  The EPA draft guidance attempts to bring clarity to the definition of what constitutes a diesel fuel, by examining whether the injectate is included in one of six identified chemical abstracts and whether the fluid is commonly referred to as "diesel fuel".  The draft guidance also  touches upon other issues associated with HF operations including which activities are covered by  the UIC program and the management of wells over their operational lifetime.

The comment period for the draft guidance closed on July 9, and the guidance, when finalized, will apply only to those jurisdictions in which the EPA directly implements the UIC program (fourteen states and territories and most tribal lands).  The guidance, along with proposed requirements for HF on public lands published almost contemporaneously (77 Fed. Reg. 27691; May 11, 2012), signal an intention of the federal government to bring certainty to a very uncertain and controversial issue, and to impact a rapidly expanding industry which has previously been subject primarily to state and local regulation.

There has been a dramatic increase in shale gas and oil extraction over the past several years that is presenting an interesting mix of technical, legal, policy, and environmental issues.  These appear to be playing out differently in each state, and with additional twists in Canada relative to the oil sands in Alberta and shale gas in Quebec.  Although the flow of gas and oil has increased dramatically during this time, there appear to be continuing questions about the impacts on groundwater, the relationship to earthquakes, the nature of the chemicals used in the water injected, how the residual water should be treated, and many more.  The matter of the Keystone pipeline has generated significant controversy between the United States and Canada, and the role of non-government organizations in this process has drawn the attention and concern of the Government of Canada.  If this practice is not managed and regulated effectively, we are likely asking for serious environmental consequences like those we have experienced in the past when we have not thought through carefully what could happen as a result of our actions.

With the many issues to address, one in particular is the focus of this discussion, and that is the appropriate roles of federal, state, local, provincial, tribal, and first nation governments in the process of approving the siting, construction, and operation of the wells, in addition to the handling of the residues and the product.  It appears a bulk of the responsibility is in the hands of state and provincial governments, but that may not be the best allocation of jurisdiction.  Local governments have the primary responsibility of providing safe drinking water to their populations, and may be adversely affected by the fracking operations.  Also, local wastewater management facilities are being looked to for treatment of the residual water from the process, which includes unknown chemicals and contaminants from the product.  In some instances, local governments are being excluded from the approval process.  It does not appear that tribal and first nation governments have been consulted to any great extent.  On the federal level, U.S. EPA is not regulating the activity, although it is doing an extensive study of the potential impacts of fracking and related activities.  Environment Canada has been engaged in the oil sands matter primarily through the evaluation of the environmental monitoring program undertaken by Alberta and the companies involved.

The very successful model used in the U.S. for air, water, toxics, and hazardous waste since 1970 that has a strong Federal presence that establishes a legal framework and minimum protective standards across the county, with the option for states to receive delegation and implement programs with more stringent requirements if they wish, should be used for shale gas and oil extraction.  In addition, there need to be specific opportunities for local and tribal governments to participate in the process in a way that protects their interests.  Also, there must be ample opportunity for public participation.  This is the best way to reduce the likelihood of another very costly disaster down the road.

Resource extraction has always presented significant challenges to finding the right economic, social, and environmental balance in managing an activity for the broader good of the country.  In the context of the continuing concern about serving the energy needs of the United States, Canada, and the rest of the world, the question is what makes sense and is good public policy?  Perhaps we are still early enough in the history of this issue to make  changes to help prevent  serious and expensive  problems in the future.

In the waning days of the Clinton administration, the U.S. Forest Service adopted a regulation to protect more than 50 million acres of national forest roadless lands, i.e., public lands still undeveloped and largely untouched. Called the Roadless Area Conservation Rule [36 C.F.R. § 294] or Roadless Rule (and sometimes called the RACR), it was soon off to the races with no fewer than nine lawsuits by development interests and western states seeking to invalidate it.

First, at the request of the State of Idaho and others, a district court in Idaho issued a preliminary injunction against the Roadless Rule  – without opposition from the Forest Service, by then under different management. Conservation interests appealed and the Ninth Circuit reversed and vacated the injunction, allowing the Roadless Rule to take effect.

A district judge in Wyoming then invalidated the Roadless Rule and enjoined its implementation nationwide in a case filed by the State of Wyoming. An appeal by conservation interests to the Tenth Circuit, again with the Forest Service firmly on the sidelines, ensued. In 2005, before the appeal was resolved, the Forest Service itself repealed the Roadless Rule and replaced it with a state petition process, leading the Tenth Circuit to vacate the district court decision and dismiss the pending appeal as moot.

Conservation groups and the states of California, Oregon, Washington and New Mexico challenged the repeal.  In 2006, a district court in California overturned the repeal and reinstated the Roadless Rule.  The Ninth Circuit subsequently affirmed.

Back to Wyoming, where the State of Wyoming renewed its complaint and in 2008 the district court duly re-issued its earlier decision enjoining the Roadless Rule. Conservation groups again appealed to the Tenth Circuit, and in 2011 the Circuit reversed the district court’s decision and vacated the injunction. The RACR ruled again.

Last week, after the Tenth Circuit denied rehearing en banc, Wyoming petitioned the Supreme Court to review the Tenth Circuit’s decision.  The decision is a unanimous, one hundred-plus page review of Wyoming’s claims under NEPA, the National Forest Management Act, and the Wilderness Act -- worth a read just as a primer on the current state of these laws.  In the meantime, the Forest Service is now off the sideline and, along with conservation interests, expected to oppose Wyoming’s cert. petition.  The Supreme Court should act on the petition by next Fall.

Unless you live in Hawaii, you’re probably no more than a few hours’ drive from the nearest national forest roadless area (yes, there are roadless areas in the White Mountains, Appalachians and Ozarks as well as the western states).  Visit one and see what the controversy is all about.  Or maybe you already know because you live in one of the hundreds of communities around the country that gets its drinking water from a nearby roadless area – so you enjoy these lands every time you turn on your tap.  Any way you use and enjoy them, the more than 50 million acres of federal public land the Roadless Rule protects are still roadless after all these years. 

(Full disclosure – Earthjustice represented the conservation interests in the cases discussed above.)

USEPA continues its program of death by a thousand cuts to the coal industry, but does the agency’s actions reflect a coherent national energy policy? On March 27, 2012 the EPA issued its new source performance standards for new power plants limiting CO2 emissions per megawatt-hour of produced electricity to a level about that of state-of-the-art, combined-cycle, gas-fired power plants. Importantly, industry observers claim that the level is far below what the best coal-fired power plants can achieve at least without commercially unavailable and quite expensive carbon capture technology.  While certain exceptions within the rule preclude stating that EPA has banned the use of coal in new plants, it comes pretty close.  That reminds me of an often repeated statement of an old client of mine back in the 1970’s whose recycled solvent fuel business and the EPA just didn’t get along that well—he would remark that “if coal were discovered today, EPA would never allow it to be burned.”  He appears to have been ahead of his time.

Of course one winner in this is natural gas.  With new sources of natural gas from shale and fracking having driven natural gas prices downward relative to coal and oil, old King Coal has been facing a distinct price disadvantage for years.  EPA had further disadvantaged coal and oil as a result of last year’s cross-state air pollution rule.  Last December, EPA’s MATS rule (mercury and air toxics standards) for power plants further adversely affected coal. Is EPA’s latest effort merely the coup de grace?

Don’t get me wrong.  I’m not a coal apologist.  One need not be a fan or sworn enemy of either natural gas or coal, of free markets or environmental regulation, to realize that something is going on that is important to our national energy situation with no one particularly in charge.  After all, coal mining, transportation and existing uses drive tens of thousands of jobs and the economy of such disadvantaged states as West Virginia.  Presidents and presidential candidates have decried our lack of a national energy policy for 30 years with meager results. 

My point is otherwise: What does the overall national interest—economic, energy and environment—have to say about the relative use of coal vs. natural gas vs. petroleum vs. nuclear power?  Should EPA’s rule, based on concerns for global warming and not immediate health and safety, trump everything else?  Should we increase our reliance on natural gas at the expense of coal?  Should we be at the mercy of market forces without regard to our long term, sustainable future?  Should we simply use a bumper sticker (“Drill, baby, drill”) instead of reasoned policy? 

What passes as policy is a series of regulatory silos each with its own raison d’etre—FERC, NRC, EPA, DOE. And, of course, Congress, some of whose members can’t wait to kill alternative energy policies (solar), decry subsidization for renewables while rejecting as nearly immoral attempts to eliminate out of date tax subsidies for oil and gas (Subsidies at today’s prices?  Give me a break!). EPA’s new rule, in isolation from everything else, is merely another example of our lack of a coherent national policy on energy.  It may be a good environmental rule, but is it good for the country?

Even as a latent issue, subsidies to the oil and gas industry have the potential to be a political hot potato.  But with President Obama putting them front and center in his recent speech at New Hampshire’s Nashua Community College, the issue joins the already crowded landscape of political fodder heading into the fall elections.  President Obama’s “all of the above” energy program covers a variety of activities, including production of oil and gas, funding renewable energy sources, and encouraging innovation of new technologies.  In the end, fossil fuels are an exhaustible source of energy that cannot be the total answer to our energy needs, as even oil and gas companies recognize.  And they come with a real set of hazards, as the recent Deepwater Horizon settlement reminds us.
 
Although not directly part of his “all of the above” energy program, President Obama is rightfully addressing government subsidies for oil and gas that could be migrating towards increasing subsidies for solar farms and wind turbines.  While fossil fuels will eventually run out, wind, solar, and biomass will not, but have yet to enjoy the level of support afforded to the oil and gas industry.  According to a recent analysis of the economics of energy by experts at the Imperial College London and the UK Energy Research Center electricity from wind power may, in five years, be less expensive than electricity from natural gas in the U.K. if current levels of government subsidies were transferred to renewable energy sources.
 
While the study is specific to the United Kingdom, there are takeaways applicable in the U.S.  First the analysis recognizes the important support that subsidies provided to oil, gas, and nuclear energy development when each were in infancy.  Through those subsidies, energy companies were encouraged to develop technologies, survey areas that were geologically ripe for oil and gas exploration, and hire workers to help build up the industry.  Second, now that oil, gas and, to a lesser extent, nuclear energy sources are more completely developed, those subsidies should be transferred to the development of renewable energy.  In addition, the gains made by the wind and solar industry should not be set aside in search of the elusive promise of cheaper oil through more drilling.  Fossil fuels will run out.  If “all of the above” is to be a real strategy, then it must provide more of an equal opportunity for all sources of energy.
           
The Department of Energy recently announced $150 million in grants under its ARPA-E program.   This money is intended for development of cutting-edge energy technologies so that they can gain the necessary traction to be self-sufficient.  The announcement follows on the heels of an additional $30 million offered under the ARPA-E program toward development of natural gas-based vehicles.  Both these numbers pale in comparison to the $4 billion in yearly subsidies for oil and gas developers.   Even shifting half of the oil and gas subsidies into renewable and developing technologies could well make a dramatic difference in our overall energy future by encouraging the build-out of wind, solar, and biomass businesses into viable and self-sufficient industries.  There will come a time for a full discussion of the value of energy subsidies as a whole, but this would provide a fair start toward creating parity with fossil fuels.
               
The Deepwater Horizon disaster is a reminder of the cost associated with use of fossil fuels.  Significant government subsidies provided to the oil and gas industry played an important part in encouraging their initial and ongoing development.  Programs such as ARPA-E can provide a jump-start for emerging energy technologies, and shifting subsidies can offer a chance for “all of the above” to be a real solution.

Recent actions taken by the Bureau of Land Management (BLM) to protect species on BLM-managed lands, before those species have been listed under the Endangered Species Act (ESA), raise questions about the evolution of BLM’s role in species protection and the impact this evolved role may have on minerals leasing and development on BLM-managed lands. 

BLM is charged, under the Federal Land Policy and Management Act of 1976, with developing Land Use Plans that make its public land and resources available under the principle of multiple-use, but at the same time, conserving special status species and their habitats.  The agency’s actions with respect to two species, the Greater Sage-Grouse and the Dunes Sagebrush Lizard, are indicative of BLM’s trajectory in how it intends to balance its roles as species-protector and minerals-manager on public lands.

A December 27, BLM-issued internal Instruction Memorandum (IM) provides interim management policies and procedures to protect the Greater Sage-Grouse on BLM-managed lands in the Western United States with the expressed goal of potentially avoiding an ESA listing.  The Greater-Sage Grouse is currently not protected under the ESA, its listing having been designated as “warranted but precluded” by the U.S. Fish and Wildlife Service (FWS) in March 2010.  The “warranted but precluded” listing decision concluded that existing regulatory mechanisms in the BLM’s Land Use Plans were inadequate to protect the species, which is found in up to 47 million acres of BLM-managed land. 

The December IM makes it clear the new guidelines apply to both proposed and existing leases.  The IM does recognize holders of existing mineral leases do have valid rights entitling them to certain development activities, but the guidance also indicates BLM will attempt to provide maximum protection to the Sage-Grouse within the bounds of those leases.  For example, for fluid mineral leases, the IM states BLM may issue written orders requiring “reasonably protective measures consistent with the lease terms.”  Further, when an existing leaseholder requires a new permit for minerals development, BLM plans to impose “reasonable” conditions in the permits that are likely to be more protective than the stipulations and restrictions currently identified in approved Land Use Plans.

BLM expressed a similar stance in the development of resource management plans in New Mexico to address the Dunes Sagebrush Lizard.  In that instance, BLM noted "holders of existing oil and gas leases have valid rights for development of their leases" but asserted in responses to public comment that BLM "can withhold approval of prospective well locations on existing leases" or address candidate species through existing lease stipulations. 

With FWS experiencing increasing backlogs in addressing ESA listing petitions, it seems likely there will be many more species that, like the Greater Sage-Grouse and the Dunes Sagebrush Lizard, are found to need habitat protection but cannot be allotted resources by FWS to do so.  If BLM continues to step in and afford protections on the level it has in the case of these two species, effects on minerals leasing in BLM-managed lands could be far reaching.  Minerals leaseholders on BLM lands should keep an eye on how far BLM ultimately stretches the bounds of existing mineral leases to protect the Greater Sage Grouse and Dunes Sagebrush Lizard, because BLM’s approach to these species may be indicative of a trend that will apply to many more species in the future.