Carbon Taxes and Carbon Offsets -- A Path to Net Zero?

Posted on July 18, 2019 by Jeffrey C. Fort

Two recent press pieces caught my eye.  “UK Signs Net-Zero Emissions Requirement into Law,” and “GOP Pollster pitches Republicans on carbon pricing.” The first reflects recent studies with respect to a potential [or even likely] environmental calamity; the other suggests signs of political reconsideration on climate change.  As welcome as the latter is, and most economists praise the use of a carbon tax, it is likely not nearly enough.

According to the latest scientific forecast, meeting the Paris objective of no more than a 2 C increase in global temperatures from pre-industrial temperature levels will require worldwide net zero emissions of carbon-dioxide-equivalent (CO2e) gases by 2050.  In any event, the UK, France, Norway and Sweden have adopted a net-zero requirement to be achieved no later than 2050 and more than a dozen large US cities have done likewise.

How a net-zero requirement can be met, with all the extant emissions from industry, transportation and buildings, is perhaps the most important research and development task facing us.

Consider whether another approach should be considered. In a 2017 op-ed Wall Street Journal piece, James Baker and George Schultz recommended a “carbon tax” on emissions of carbon dioxide equivalent gases.   This recommendation is the centerpiece of a memorandum to “Interested Parties” by a Republican pollster and strategist suggesting that the Republican Party should heed polling results and embrace the Baker/ Schultz suggestion that the Republican Party ought to support a “Carbon Dividends” proposal. This proposal would feature “four pillars”: a tax (of $42/ metric tonne of CO2e, indexed to rise with inflation), an equivalent “dividend” to working class Americans, a border adjustment for carbon content of imported goods, and elimination of EPA’s regulatory authority concerning climate issues.  The tax revenues would be returned to private citizens with the lowest incomes, as a “Carbon Dividend” to mitigate the increased energy costs.

However, the Carbon Dividend proposal says nothing about reducing emissions other than by raising a “price on carbon.”  But will a tax achieve that goal? Some parties may choose to emit and pay the tax so there is no guarantee that emissions will be reduced and certainly not to achieve net-zero emissions. Any reduction in energy use by businesses would depend on the elasticity of the market for other inputs and competition for the output products. For businesses that have inelastic demand curves the costs just get passed through with no or little emission reduction.  In other words, a carbon tax will not yield significant environmental results, however admirable its intentions.

However, emission reduction credits, or “offsets,” is a tool which has been used for nearly 50 years under the Clean Air Act.  Verified offsets provide real reductions.   Verified offsets have been used to allow large new construction projects in dirty air areas, to reduce the costs of compliance measures in state implementation plans, and now as a means of reducing costs in most of the climate legislation around the world.  Offsets are not easy to create.  Using standard protocols, there must be a scientific method which has been adopted in a public process and adherence to that methodology then for a project to be undertaken.  Both are validated and verified by an independent third party. Only then is the “offset credit” created.  Offsets seem to attract entrepreneurs who have a “better idea” of what projects can be implemented at a much lower cost that an EPA-approved, command and control requirement.   The U.S. now has three independent offset verifiers which have produced millions of tonnes of extra reductions -- proving that the concept can work at scale.   These are real and verified reductions and the current prices are a small fraction of the $42 per tonne price in the Carbon Dividend proposal.  Verified offsets are a much better and cost-effective way to produce reduce real emission reductions.  

For a “tax” on carbon emissions, we would start with an existing and established measuring tool; those sectors covered by the Mandatory Reporting Rule (MRR).  The covered sectors have already been established as the most carbon-intensive industrial activities.  The MRR is established and tested and would not require a new system.

A proposed carbon tax systems could then allow a credit or a “deduction” for other state requirements for GHG controls.  State carbon reductions requirements (e.g. AB32 in California and RGGI in the Northeastern states or other state adopted requirements, see) could be recognized, which would reduce the taxable quantity.  Allowing offsets, including those purchased from sources “outside the [MRR] cap” would provide further reductions, and further reduce net taxable emissions.   But a complete elimination of taxable carbon emissions appears unlikely in the near term.

There are many sectors who now perform “voluntary” projects, at a cost far below $42/ metric tonne.  Among the sectors outside the MRR list, are:

  • agricultural and forestry programs (famers and foresters have produced substantial volumes of offset credits to date);
  • unregulated industrial processes, such as those emitting methane, nitrous oxides and hydrofluorocarbons, which are not subject to the MRR; and
  • abandoned coal and gas well vents.

Not only would using offsets provide an incentive for extra reductions on a voluntary basis, the existing voluntary programs are examples of innovation. Small businesses, new ideas, and new ventures have created most of the offsets now used in compliance and voluntary systems.

Carbon offsets are real reductions, and not just a fiscal policy redistribution.  In addition to providing a “dividend,” a carbon tax offset policy could stimulate new ideas and businesses as well as substantially reduce carbon emissions.  This would align sound climate policy with sound tax policy by using a tool developed long ago, updated based on recent experience.

The Seals of Disapproval, and the Return of Jaws

Posted on July 12, 2019 by Samuel I. Gutter

We are fortunate to live on Cape Cod, where the abundant marine life is a consistent source of joy.  We watch osprey and terns diving for fish, and crabs scuttling along the beach.  The local radio station announces when the blues and stripers are running, and where best to find them.

But all is not well in and on the water.  In the midst of stories about the depletion of marine resources, the Cape, we now know, has an overabundance of a particular marine mammal:  the grey seal.  Once widely hunted by early European settlers and then by fisherman who viewed them as competitors for the fishstock, in recent years the seals have rebounded with stunning success.  An estimated 30,000 to 50,000 grey seals make their home on the Cape, densely clustering in areas like the Monomoy National Wildlife Refuge off Chatham, where the seals are so plentiful that they can be seen from space.

Many people, of course, love the seals, with their sleek fur, woeful eyes, and playful antics.  But people aren’t the only ones attracted to seals:  sharks “love” them, too, for obviously different (and decidedly gustatory) reasons.  And not just any sharks.  We’re talking about great white sharks, the predatory hunters with rows of razor-sharp teeth that inspire primal fear among beachgoers.  After all, while “Jaws” was set in the mythical New York town of Amity, the locals all know that it was filmed on Martha’s Vineyard, a scant few miles off Cape Cod.

Given the huge seal population, even the most inept and myopic shark should have no problem finding something it likes on the seal take-out menu.  And Jaws aside, sharks are not known to intentionally hunt humans.  Shark attacks are rare – generally believed to be the result of human/seal mistaken identity.  But last August, a swimmer in Truro, on the Outer Cape, suffered serious injuries from an attack by a great white 50 yards off shore, and a month later the Cape experienced its first fatal shark attack since 1936, when a man riding a boogie board was attacked and killed by a great white in Wellfleet, close to shore.

While attacks are rare, shark sightings are becoming more common.  The vigilant can even track sightings on The Sharktivity App.  Sightings have forced the temporary closure of popular Cape beaches, likely causing some to consider the appeal of alternate vacations on quiet mountain lakes, where the top aquatic predator is the largemouth bass.  And that presents another sort of problem.  Sharks might thrive on seals, but Cape Cod thrives on tourism, and sharks (other than sales of toothy t-shirts) are bad for business.

Enter Willy Planinshek and his partner Kevin McCarthy of Deep Blue LLC, who have come forward with a plan to use an underwater sound system to scare the seals away from beaches.  Where the seals go, their theory holds, the sharks will follow.  Although Messrs. Planinshek and McCarthy have no particular expertise, funding, prototype or research to back up their proposal, they still managed to draw a capacity crowd to a meeting of the Barnstable County Commission to consider the concept.  They have been invited back in the fall for further consideration.

But as we all know, even the best ideas are often beset by regulatory and bureaucratic hurdles.  In this case, the Barnstable County Commissioners will be well-advised to read the Marine Mammal Protection Act, 16 U.S.C. 1361, et seq.  Under the MMPA, it is illegal to “take” any marine mammal without a permit.  Moreover, “take” is broadly defined to include not only the hunting and killing of marine mammals, but harassing them, as well – which is, after all, the entire point of the underwater sound blast.  Additionally, the ensuing federal permitting process would surely trigger some level of NEPA review.  And let’s not forget potential applicability of the Coastal Zone Management Act, as well as federal and state endangered species laws (grey seals aren’t endangered, but other marine species that frequent the area might be).

Such hurdles aside, the ultimate question remains whether any such plan, if approved, will even work.  Seals eager to get to their mating grounds might habituate to the sounds, or simply swim with their heads above water.  As the fictional Ian Malcolm (played with perfect nerdiness by Jeff Goldblum) proclaimed in Jurassic Park:  “Life will not be contained.  Life breaks free.  It expands to new territories, crashes through barriers, painfully, maybe even dangerously.”  In more colloquial terms, beware the unintended consequences of messing with Mother Nature – seals and sharks included.

Over/Under—Great Environmental Fiction/Nonfiction

Posted on July 10, 2019 by Dick Stoll

I just finished reading two books that I would highly recommend to anyone concerned about the environment and global climate:

—  The Overstory, a novel by Richard Powers.  It won the 2018 Pulitzer Prize for fiction.

—  Underland, a 2019 non-fiction “deep time journey” by Robert Macfarlane.  

Each book is exceedingly sweeping in scope and chock full of scientific information and details that even I (a political science and English major) could essentially understand and find captivating.   An overriding theme of each book is that humans aren’t doing much good for this planet.  

Each book may fairly be called a magnum opus, and I can’t even begin to describe their full sweep in a blog like this.   So I urge you to do a little googling for reviews.   I am linking a good review of each here:

https://www.theatlantic.com/magazine/archive/2018/06/richard-powers-the-overstory/559106/

https://www.npr.org/2019/06/03/729156788/underland-connects-us-to-dazzling-worlds-beneath-our-feet

The Overstory is mainly about trees and people — how trees interact with each other, how people interact with each other, and how people interact with trees.   Lots of bad things get done by some people, some good things get done by some people, and lots of good things get done by trees.   

After reading the book, I am paying a heck of a lot more attention to trees than I ever did before.  In fact, my current iPhone wallpaper is a close-up of a beautiful redwood I recently photographed in northern California.  

Underland primarily focuses on what goes on under the earth’s surface — today, for millions of years before today, and projectively for eons to come. The author relates how humans have used the “underland” over history in various positive and negative ways for all kinds of storage, disposal, and extraction.  He describes intriguing and dangerous underground “journeys” of his own in several places around the world.  His last journey is to a repository being readied for nuclear waste way under Finland.  

Each book is laden with concerns about the future for the global environment and climate.   The Overstory hits hard on deforestation, Underland hits equally hard on melting ice.

I am retired now and have more time to read books like these.   But I encourage those of you still practicing to find the time.

A Hard Look at the Environmental Rule of Law

Posted on June 20, 2019 by Leslie Carothers

Years in the making, the first global report on the Environmental Rule of Law (ERL) was issued by the United Nations Environment Program and the Environmental Law Institute (ELI) in January 2019.  The report is a comprehensive review of worldwide progress in the development and implementation of the key elements of environmental law and is available for free on ELI’s website.  Extensive analysis of data and statistics accompanies a series of color-coded maps showing what the nations of the world had accomplished in 1972, 1992, and 2017. (The Earth Summit of 1992 greatly accelerated the adoption of environmental laws.)   Case studies highlighted in the main text describe innovative practices such as the use of specialized environmental courts in New South Wales, Australia, and Kenya. Their Environment and Land Courts offer flexible and informal procedures that can speed dispute resolution and decisions.

The report is divided into an introduction and five substantive topics:  Institutions, Civic Engagement, Access to Information, Rights, and Justice.  The section on institutions is focused on the challenges of administration more than the specific content of environmental laws and stresses the need for “capacity, accountability integrity, and leadership” by officials.  I would add patience and persistence to those qualifications.  As a former federal and state official, I was not surprised to learn that environmental agencies in other countries deal with “regulatory overlap and underlap” and constant demands for coordination of many actors and interests in implementing environmental decisions.  They all struggle with making technical, multidimensional decisions amid intense economic, social, and political pressures. 

The section entitled “Rights” is likely to be very informative and thought provoking for U.S. lawyers.   The report states that since the 1970s, “environment-related rights have grown more rapidly than any other human right,” and that by 2012, over 66% of national constitutions included a range of environmental rights.  Such provisions usually enable citizens to seek remedies for environmental harms directly from responsible parties and agencies. The report concludes that constitutional law and human rights law can provide an important safety net where there are gaps in legislation, important norms, and forums for addressing climate change.

The report’s thorough review of the recognition of environmental rights abroad is timely.  Today, the U.S. is heading for decisions on whether the due process clause of the Fifth Amendment to the U.S Constitution and the public trust doctrine empower the young plaintiffs in Juliana v. United States to succeed in their claims that the federal government has a duty to adopt a comprehensive plan to prevent grave injury to health and the environment and special harm to their generation from climate change.   

In Juliana, District Judge Ann Aiken denied the government’s motion to dismiss, finding that the Juliana plaintiffs’ claims, though novel, should proceed to trial.  She held that a claim for a due process violation is stated “ where a complaint alleges knowing government action is affirmatively and substantially damaging the climate system in a way that will cause human deaths, shorten life spans, result in widespread damage to property, threaten human food sources, and dramatically alter the planet’s ecosystem.”  Juliana v. United States,  217 F. Supp. 3d 1224, 1250. (D. Or. 2016).

Following years of procedural twists and turns, the case was argued before the Ninth Circuit on June 4. The main issue is whether the district court correctly ruled that plaintiffs have stated a legal claim that merits a trial on the facts.  The federal government in both the Obama and Trump Administrations has opposed recognition of any legal basis for such claims warranting a trial.

By contrast, the ERL report describes decisions by courts in Pakistan and the Netherlands ordering the national governments to take stronger action to regulate greenhouse gases at the behest of citizens and organizations suing under constitutional or international conventions construed to confer environmental rights. Other non-U.S. tribunals have been similarly willing to recognize such rights and prescribe sometimes sweeping remedies. 

Will the Ninth Circuit or the Supreme Court also support the Juliana plaintiffs’ claims?  Probably not.   The substantive due process rationale for finding implied rights under the Fourteenth Amendment’s protection for life, liberty, and property cited by judges long ago to strike down state worker safeguards and other economic regulations has been generally discredited as allowing improper legislating by the judiciary. Substantive due process claims are usually successful in preventing government action rather than requiring it.  Since the 1960s, the only new implied rights recognized by the Supreme Court have protected personal privacy in sexual relations, including the choice of abortion, and supported a right to same sex marriage.  Those decisions voided contrary state laws but required little or no affirmative new action by the federal government.   

The plaintiffs’ second substantive due process claim is the common law public trust doctrine defining a duty of government to protect submerged lands and other resources,  which is grounded in historic government ownership of specific  natural resources.   The law on public trust rights and duties is too complex to explain  here.   But so far, the public trust doctrine has not yet been applied to compel action by the federal government, and it seems unlikely that the current Supreme Court, if not the Ninth Circuit, will uphold the claim for the first time in this case. 

The ERL report chapter on rights concludes  that “a rights based approach is more suitable for policy direction and for protecting people from egregious actions, rather than substitute for environmental regulation and enforcement.”  The issue in Juliana is egregious inaction. Whether or not the U.S. appellate courts are willing to break new ground on environmental rights, it will be interesting to see how the judges characterize a serious threat to the well being of the young plaintiffs that the federal government is failing to address or even acknowledge today. 

The overall assessment in the ERL concludes that notwithstanding dramatic growth in the number and scope of environmental laws, their effective implementation has not taken root in most countries   Carl Bruch, Director of International Programs at ELI and one of the ERL authors, agrees that “the culture of environmental compliance is weak or non-existent “ and that the international community and philanthropies need to do more on many fronts to strengthen environmental enforcement.   A most disturbing resistance to environmental laws is harassment and even murder of environmental defenders. In 2017 alone, 197 environmental defenders were killed.

The ERL report offers numerous good recommendations to upgrade performance and to monitor and track indicators of improvement in the environmental rule of law.  Environmental lawyers should be seeking ways to help.  All in all, this ambitious baseline report ably documents notable progress to celebrate, but reveals much more to be done to make environmental law work to secure a sustainable future. 

WHO WINS WHEN FEDERAL MINERAL LESSEES COLLIDE WITHIN THE SAME ACREAGE?

Posted on June 14, 2019 by Tom Sansonetti

Berenergy Inc. has been operating seven oil and gas wells on three federal leases in the Powder River Basin area of Wyoming since the 1960s.  Peabody Energy has been strip mining coal on multiple federal leases in the same area since the 1970’s. Further background of this conflict is found in my previous post.

Peabody’s North Antelope Rochelle Mine is the largest coal mine in the United States with a mine plan that requires it to move in a south-to-north direction over several decades.  The mine has advanced to within a quarter mile of the Berenergy wells.  The wells are spaced as to form a picket-fence like barrier to the mine’s progress.

Berenergy’s well bores extend several thousand feet below the surface.  Peabody’s coal reserves are only 850 feet under the surface.  In order to mine through, Peabody would have to pull the piping and plug each of the well holes.

After passing through the well sites, Peabody could re-drill and replace the piping to allow the oil and gas production to continue. The cost to Peabody would be approximately $500,000. Mining through the well sites would take approximately four years. The cost to Peabody of moving the mining machinery around the seven wells would be approximately $180 million. 

The value of the 91 million tons of coal under or near the wells at current prices is $1 billion. Because of the mine plan’s northerly direction and the mammoth size of the operations, the cost of returning to the bypassed coal years later would be prohibitive. Thus, the coal would remain in place if bypassed.

Peabody offered to purchase the Berenergy wells for their appraised price of $477,000. Berenergy rejected the offer, instead requesting a much larger sum in order to “get out of the way.” Peabody refused to pay the requested amount and both Peabody and Berenergy approached the BLM, as the common lessor, to seek a resolution of the standoff.

As a valid lessee in good standing, Berenergy argued that its leases were “first in time” giving them the “first in right” to continue producing until the wells run dry. Berenergy pointed out that Peabody leased its coal with full knowledge of the existence of the wells and should have to wait to mine unless willing to meet Berenergy’s monetary demands. Berenergy petitioned the BLM to suspend Peabody’s leases.

As a valid lessee in good standing, Peabody argued that the “first in time” theory was not embodied in either statutes or regulations and without statutory guidance or legal precedent the BLM should adopt a “doctrine of accommodation” that would permit maximum recovery of both the oil and the coal. Peabody petitioned the BLM to suspend Berenergy’s leases so it could mine through.

On August 17, 2018, the BLM Wyoming State Director issued a decision allowing Peabody to mine through the well areas based on the provisions of Section 209 of the Mineral Leasing Act. This provision allows the Secretary of the Interior to suspend mineral leases in order to conserve natural resources.

Peabody immediately began pulling and plugging the well closest to its operations. Berenergy obtained a temporary restraining order in Wyoming federal district court and appealed the BLM decision to the Interior Board of Land Appeals. The IBLA ruled against Berenergy’s motion for stay of the BLM order and Peabody demanded that Berenergy post a multi-million-dollar bond in order to continue the litigation before the IBLA. Berenergy was not able to post the bond and dismissed its IBLA appeal, opting to return to the Wyoming federal district court for resolution of its “first in time” claim naming the BLM as the defendant. Peabody intervened in the case to support the BLM decision.

After lengthy briefing and an oral argument, Wyoming District Judge Scott Skavdahl ruled on May 13, 2019 in favor of the BLM and Peabody. The court ruled that the MLA’s Section 209 permitted the BLM to suspend leases in the name of the conservation of natural resources when two valid federal leases developed a conflict over acreage where the minerals in question could not be simultaneously produced. Given the vast disparity between the value of the remaining oil and gas reserves versus the coal reserves to be bypassed, the court found that the BLM’s use of a comparative valuation standard to aid in its decision-making was reasonable. The court noted that it could not find regulatory authority on “first in time” that contradicted the language in Section 209.

On June 11, Berenergy filed its appeal in the Tenth Circuit Court of Appeals. Stay tuned.

HEY CONGRESS: PLEASE FIX THIS “JUST PLAIN NUTS” SITUATION

Posted on June 10, 2019 by Dick Stoll

Seth Jaffe’s recent ACOEL post correctly laments that the current judicial review regime for EPA’s Waters of the United States (WOTUS) rule is “just plain nuts.”  He points to two recent (May, 2019) conflicting federal district court decisions, leaving the Obama WOTUS rule in place in one area and remanding it in another.

I similarly complained of a “whole lot of craziness going on” regarding WOTUS judicial review in my 2015 ACOEL post.  I related how inconsistent decisions coming out of various courts were leaving the rule in force in some states, yet throwing it out in other states.  Since then, we have seen even crazier situations with some counties left subject to the rule while other counties in the same State are not!

Here is a recent sad summary from the May 29, 2019 Inside EPA: “Due to a variety of district court decisions, the 2015 rule continues to apply in 23 states and 23 of New Mexico’s 33 counties, but it is blocked in 26 states and in the other 10 New Mexico Counties.”  And to make the patchwork even crazier, the 23 states where the rule remains in place are anything but contiguous – looking at a U.S. map, it appears someone threw darts.

As Rick Glick recently reminded us, we will soon have a brand new WOTUS from the Trump EPA folks.  This will inevitably trigger a slew of new judicial review actions in numerous federal district courts, with another crazy-quilt patch of inconsistent results sure to follow.

Seth appears to blame this situation on the Supreme Court, which ruled last year that initial judicial review of the WOTUS rule must lie in the federal district courts – not, as the federal government had urged, in a U.S. Court of Appeals.  Seth notes that “the Supreme Court had the luxury of ignoring the chaos that would ensue” from its decision.

I blame this situation squarely on Congress, however.  Given the way the Clean Water Act is drafted, I just don’t see how the Supreme Court could have ruled otherwise.  And it is telling that the Court’s opinion was unanimous.  That’s right, a unanimous opinion from this Supreme Court! 

The heart of the problem is straightforward.  Under the federal APA, direct judicial review of final agency rules lies in federal district courts except where Congress has provided that certain types of rules are to be reviewed directly in a Court of Appeals.  As I outlined in my 2015 “craziness” post, Congress has provided that all sorts of national rules under the Clean Air Act, the Resource Conservation and Recovery Act, and many other statutes, shall be directly reviewed by a Court of Appeals.

But in 1972 Congress took a different approach in the Clean Water Act, and specified that only seven types of final EPA actions would be directly reviewed in a Court of Appeals.  As the Supreme Court unanimously ruled last year, the WOTUS rule does not fit within any of these seven types of actions.  As a matter of pure (and unfortunate) logic, this means the district courts have initial jurisdiction over the WOTUS rule.

The federal government argued before the Supreme Court that the policy arguments in favor of direct Court of Appeals review are overwhelming.  The crazy-quilt patchwork that would take years (probably decades) to resolve would be avoided, as federal rules would require challenges filed in various Court of Appeals circuits to be consolidated in one Court. 

I wholly agree with these policy arguments, and I believe it is up to Congress to fix this mess. Just a few words added to the CWA would do it.  For example, Congress could simply provide that final rules defining the extent of “waters of the United States” would be the eighth type of action subject to direct Court of Appeals review.  Or many other formulations with just a few words could do the trick.

I know we live in polarized political times, and it is hard to secure Congressional consensus on major issues like reproductive rights, immigration, etc.   But should it be polarizing to provide direct Court of Appeals review of a critical EPA rule to avoid “just plain nuts” and “whole lot of craziness” inconsistencies throughout the nation?  If it is, I think that is just plain nuts.

Woe is WOTUS

Posted on June 7, 2019 by Seth Jaffe

When the Supreme Court decided that the district courts had jurisdiction over challenges to the Obama administration WOTUS rule, I described it as a victory of the “give me a break” doctrine of statutory interpretation over the “just plain nuts” theory.  I also noted that the Supreme Court had the luxury of ignoring the chaos that would ensue.

Whatever one may think of the merits of the competing theories, two district court decisions in the past week have made clear that it is, indeed, just plain nuts to have these cases before the district courts.

First up, Texas v. EPA, in which Judge George Hanks (an Obama appointee, no less) ruled that EPA and the Corps of Engineers had violated the Administrative Procedure Act in two ways by promulgating the 2015 Rule.  First, while the proposed rule had defined “adjacent waters” based hydrogeological criteria, the final rule used specific numerical distance criteria instead.  The Court concluded that the use of distance criteria was not sufficiently anticipated in the proposed rule and thus EPA violated the APA when it failed to take comment on the new approach.  Judge Hanks also concluded that the 2015 Rule violated the APA because the Agencies relied on what is known as the “Final Connectivity Report,” even though the comment period closed before the Final Connectivity Report was available.  As a result, Judge Hanks remanded the 2015 Rule to the Agencies “for proceedings consistent with this order.”  Of course, the Agencies have already announced that they intend to replace the 2015 Rule, so I think we all know what those proceedings will be.

Next up, Oklahoma v. EPA, in which Judge Claire Eagan (a Bush appointee, no less!), refused to issue a preliminary injunction against the enforcement of the 2015 Rule.  Simply put, Judge Eagan was not persuaded by any of the declarations submitted by the plaintiffs that they would suffer irreparable harm if the 2015 Rule were to remain in effect in Oklahoma.  She described them as “speculative.”  This was particularly troubling because:

the 2015 Rule has been in effect for varying periods of time since this case was filed, and the State can identify no evidence of an aggressive expansion of federal regulation of Oklahoma waters. … This case has been pending for nearly four years, and the Court would have anticipated a showing of substantial, actual harm in support of a motion for preliminary injunction.

We now have a situation where an Obama appointee has remanded the 2015 Rule and a Bush appointee has refused to enjoin its enforcement.  I do get some pleasure from these two judges upsetting preconceived notions in this partisan age about what judges do and how they decide.

Beyond that, however, I have no idea what these cases mean for the enforcement of the 2015 Rule.  I understand that this may all soon be moot, but in the meantime, it’s hard to defend this as a logical system of judicial review of agency action.  Indeed, I might even go so far as to say that it’s just plain nuts.

2019 WOTUS Rule Seeks to Make the Complex Simple—It Won’t Work

Posted on June 6, 2019 by Rick Glick

What is the jurisdictional reach of the Clean Water Act?  The Act applies to “navigable waters”, which are defined as the “waters of the United States, including the territorial seas.” That’s all the CWA says about jurisdiction.  Congress left it to the implementing agencies—EPA and the Corps of Engineers—and the courts to define the contours of CWA jurisdiction.  In the 45 years following enactment, we are not much closer to clarity. 

The 2019 proposed “waters of the U. S.” or WOTUS rule is the latest attempt and, like all its predecessors, it has generated a lot of controversy.  Setting aside for the moment whether the rule is ultimately adopted and survives the inevitable court challenges, will it achieve the CWA’s object “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters”?  Unfortunately, the approach taken in the rule seeks an easy resolution to a complex problem as it avoids the interconnectedness of natural systems.  That approach will be of limited use in meeting the CWA’s objective.

The central strategy underlying the CWA is adoption by the states of water quality standards.  The standards would be protected through grant funding of public treatment facilities on the one hand, and on the other, a regulatory program allowing for limited discharges of pollutants or filling of wetlands to ensure attainment of standards.  Early cases looking at discharges or fills subject to the CWA stressed whether the receiving waters were “navigable in fact,” that is, capable of carrying interstate commerce.  However, regulations adopted by the Corps of Engineers extended jurisdiction to tributaries and adjacent wetlands, as degradation of these results in degradation of the navigable waters.  These regulations also included certain intermittent streams among WOTUS.

In its 2006 decision in Rapanos v. U. S., a majority of the Supreme Court found the regulations too broad, but did not quite agree as to why.  Writing for the plurality, Justice Scalia criticized the Corps for regulatory overreach and argued for a common sense, dictionary understanding of WOTUS:

In sum, on its only plausible interpretation, the phrase “the waters of the United States” includes only those relatively permanent, standing or continuously flowing bodies of water “forming geographic features” that are described in ordinary parlance as “streams[,] … oceans, rivers, [and] lakes.” See Webster’s Second 2882. The phrase does not include channels through which water flows intermittently or ephemerally, or channels that periodically provide drainage for rainfall. 

In other words, if you can see it and your feet get wet when you stand on it, the CWA applies.  Applying his usual strict constructionist approach, Justice Scalia found no statutory justification for a nuanced approach to jurisdiction.  By Executive Order, President Trump directed EPA and the Corps to replace the Obama WOTUS rule with one based on Justice Scalia’s interpretation, and the proposed rules do just that.

Will this approach serve the stated objective of the CWA to protect our waters?  Justice Kennedy, in his concurring opinion in Rapanos, thought not.  He chastised both the plurality and the dissent for not applying the test established by the Court just five years earlier in Solid Waste Agency of Northern Cook Cty. v. Army Corps of Engineers.  That case pegged jurisdiction to whether there is a “significant nexus” between the wetland in question and a navigable waterway.  In SWANCC, the Court rejected Corps regulations that imposed jurisdiction over isolated wetlands because they served as habitat for migratory birds.  That was not, per the Court, enough to show a significant nexus between those wetlands and a navigable waterway. 

However, in Rapanos, Justice Kennedy argued that the Court must do the SWANCC analysis, with all its inherent complexity, before simply concluding there is no jurisdiction:

Taken together [prior Court opinions show that], the connection between a nonnavigable water or wetland and a navigable water may be so close, or potentially so close, that the Corps may deem the water or wetland a “navigable water” under the Act. In other instances, as exemplified by SWANCC, there may be little or no connection. Absent a significant nexus, jurisdiction under the Act is lacking.

* * *

The required nexus must be assessed in terms of the statute’s goals and purposes. Congress enacted the law to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” 33 U. S. C. §1251(a), and it pursued that objective by restricting dumping and filling in “navigable waters,” §§1311(a), 1362(12). With respect to wetlands, the rationale for Clean Water Act regulation is, as the Corps has recognized, that wetlands can perform critical functions related to the integrity of other waters—functions such as pollutant trapping, flood control, and runoff storage. 33 CFR §320.4(b)(2). Accordingly, wetlands possess the requisite nexus, and thus come within the statutory phrase “navigable waters,” if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as “navigable.” When, in contrast, wetlands’ effects on water quality are speculative or insubstantial, they fall outside the zone fairly encompassed by the statutory term “navigable waters.”

The analysis called for by Justice Kennedy is complex and requires professional judgment.  Granting agencies the discretion to exercise that judgment makes many uncomfortable, but such discretion is inherent in our current framework in which Congress provides vague direction that agencies must implement.  There is much talk about the Supreme Court eviscerating Auer and Chevron deference to agency interpretations of their own rules or statute, but surely there must be some leeway for agencies that courts can find acceptable.  If not, already ponderous and glacially slow regulatory processes will get only more so. 

The Obama WOTUS rule took the Kennedy approach and then tried to put certain sideboards around it to determine CWA jurisdiction, which played to mixed reviews—a million comments and scores of legal challenges were filed.  The Trump WOTUS rule swings the pendulum toward the simplistic Scalia approach, which will also draw broad opposition.

Getting clarity on the scope of CWA jurisdiction has proved elusive.  However, in our zeal for clarity and preventing overly aggressive federal regulation, we must not lose sight of the clarion purpose Congress gave in enacting the CWA in the first place.

Where Is Gundy v. United States?

Posted on May 30, 2019 by Lisa Heinzerling

In the first week of October, the justices heard argument in Gundy v. United States, in which a convicted sex offender argues that the Sex Offender Registration and Notification Act (SORNA) violates the nondelegation doctrine by giving the Attorney General untrammeled authority to decide whether the law's registration requirements, backed by criminal penalties, apply at all to offenders convicted before the statute was enacted. Gundy is the only case from the Court's October argument session left to be decided.

Around the time of the oral argument in Gundy, I heard several Court watchers predict that the case would be decided easily, and against Gundy, through a narrowing interpretation that would avoid any serious nondelegation issue. The government had argued that the Attorney General's discretion could be limited by finding that "the text and context" of SORNA convey an instruction to the Attorney General to "specify the applicability of SORNA's registration requirements to pre-Act offenders 'to the maximum extent he finds to be feasible.'" Such guidance from Congress would easily satisfy the Court's existing jurisprudence on nondelegation.

As time passes, however, this seemingly straightforward resolution of Gundy seems ever less probable. One problem for the government is that the limiting principle it asserted – "to the maximum extent he finds to be feasible" – does not appear in the statute. Conservative justices wedded to textualism may be hesitant to read into the statute a limitation the text does not identify.

Moreover, the justices have already passed up a chance to interpret SORNA narrowly to avoid the very challenge they now face. In 2013, in Reynolds v. United States, the Court found that SORNA's registration requirements did not apply to pre-Act offenders until the Attorney General said they did. Chief Justice Roberts, who at oral argument had asked counsel for the government whether delegating this degree of authority would create a nondelegation problem, joined Justice Breyer's majority opinion without comment. By interpreting SORNA to require action from the Attorney General before the law's registration requirements may apply to pre-Act offenders, the Court in Reynolds created the constitutional conflict it now confronts.

Another worrisome sign for the government is that four of the Court's current justices have in recent years expressed constitutional anxieties about Congress's broad delegations of power to administrative agencies. Gundy may give them the chance to revive or even expand a constitutional doctrine that has not been used to invalidate a federal statute since 1935.

If the Court invalidates SORNA as an unconstitutional delegation of legislative authority, the consequences could be gigantic. A reawakened nondelegation doctrine could run like a scythe through the scores of statutes – including, of course, environmental statutes – that grant broad authority to administrative agencies. Operating that destructive instrument would be the least politically accountable of all the branches of government.

The Court could try to limit a decision invalidating SORNA, based on such factors as the criminal context; the worrisome power of the Attorney General as both prosecutor and quasi-legislator; and the backward-looking nature of the application of registration requirements to pre-Act offenders. Even a limited invalidation, however, would mark a significant turning point in administrative law, with destabilizing consequences for federal environmental programs. The longer we wait for the Court's decision, the more likely it is that the justices are grappling with the most fundamental questions raised by this case.

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NOTE: A version of this post was published by ACSblog in September 2018.

“Happy [50th] Earth Day—Something to Crow About”

Posted on May 23, 2019 by Jeff Civins

In April of next year, the world will be celebrating Earth Day’s 50th anniversary. According to the ultimate source—Wikipedia—Earth Day is now celebrated in more than 193 countries. Among those celebrations is one held annually in Dallas, which this year drew a record crowd of 175,000 visitors. This particular celebration, formerly known as Earth Day Texas and rebranded as EarthX, was adopted by environmentalist Trammell S. Crow in 2011 and turned into the world’s “largest annual environmental exposition and programming initiative.” 

In describing its founder, EarthX’s website notes “[w]ith a focus on inspiring environmental leadership across sectors and party lines, Trammell has succeeded in bringing together people and organizations from all walks of life to explore and collaborate on solutions for some of today’s most pressing environmental [concerns].” For example, at one of EarthX’s events this year, Susan Eisenhower moderated a discussion on climate change by Senators Lindsey Graham (R. SC) and Sheldon Whitehouse (D. RI), and Secretary of Energy Rick Perry spoke about how innovation is revolutionizing the country’s energy production and consumption. Another of this year’s EarthX events was a Law and Policy Symposium, which, consistent with EarthX’s theme of water, was entitled “Water, Water Everywhere…” The Symposium brought together prominent thought leaders, including ACOEL fellows, representing diverse perspectives to discuss legal and policy implications of a range of pertinent topics.

The Symposium included discussions of: water issues facing Texas (“Don’t mess with Texas”); federal water quality issues (“A River Runs Through It”); coastal issues (“Surf’s Up”); water issues facing cities (“Going with the Flow”); and the water energy interface (Thirst for Power”). A luncheon presentation (“Making Waves”) included the showing of an excerpt from the Emmy-award winning  documentary—“The Sonic Sea”--on the threat oceanic man-made noise poses to marine life, presented by Stephen Honigman, a former general counsel of the U.S.  Navy who is one of the filmmakers.

The federal water quality panel was representative of the dialog the Symposium tried to foster and resulted in a lively discussion of “water of the U.S.” involving Matt Leopold, EPA’s General Counsel, and representatives from the National Wildlife Federation, the American Farm Bureau, the National Association of Clean Water Agencies, and a moderator and a panelist from private practice. Other prominent speakers at the Symposium included Senator Sheldon Whitehouse, on the topic of water energy interface, former DOJ official John Cruden, on water issues facing cities, and Texas Attorney General Ken Paxton, on cooperative federalism (“Keeping Both Oars in the Water”).

Last year’s Symposium entitled “Back to the Future,” also included a diverse array of prominent environmental thought leaders, and focused on the future of: environmental regulation; sustainable and ethical corporate decision-making; disaster response; and domestic energy production. Reflective of the diversity of speakers, the energy session included representatives from the Edison Electric Institute, the American Council on Renewable Energy, the Citizen’s Climate Lobby, and the Climate Leadership Council, as well as a private practitioner.

The Symposium the year before dealt with fundamental environmental issues that included: integrating science into regulatory decision-making; reconciling energy and economic development with protection of the public health and environment; facilitating resolution of environmental disputes associated development; and integrating sustainability into corporate decision-making.

Next year’s Law and Policy Symposium will focus on environmental developments over the past 50 years since the first Earth Day and on where we are, or should be, headed. The Symposium organizers hope that next year’s program will result in a dialog among diverse perspectives that results in the identification of points on which there might be consensus and of a range of paths forward to realize the objective of EarthX--and its patron and founder, Trammell S. Crow--“to inspire people and organizations to take action towards a more sustainable future worldwide.”

What’s on the Menu: Trout or Shark?

Posted on May 21, 2019 by Kathy Beckett

In 2015, EPA published its final updated ambient water quality criteria for the protection of human health for 94 chemical pollutants.  This updated suite of recommendations was designed to reflect the latest scientific information and EPA policies, including updated body weight, drinking water consumption rate, fish consumption rate (“FCR”), bioaccumulation factors, health toxicity values, and relative source contributions.  Presently states and tribes are engaged in the triennial review process for the adoption of the new EPA recommended criteria.  As a result of the myriad of factors that comprise the calculation for the new recommended human health criteria, states and tribes are engaged in assessment of the particulars.  Stated simply:  AWQC (ug/l) = toxicity value (mg/kg-d) x BW (kg) x 1,000 (ug/mg)b divided by [DI (L/d) – Ʃ4 i=2 (FCRi(kg/d) x BAFi (L/kg))]. 

One notable effort to manage EPA’s fish consumption-based recommendations is found within the Idaho water quality standards setting continuum.  In 2012, EPA disapproved Idaho’s assumptions asserting that it failed to demonstrate that the criteria protected Idaho’s designated uses. Specifically, EPA concluded that Idaho failed to consider available local and regional fish consumption information suggesting that fish consumption among some Idaho population groups was greater than 17.5 g/day. EPA’s review of available information suggested that recreational anglers and subsistence fishers in Idaho consume fish at rates higher than the national default rate. In addition, during tribal consultation EPA heard from several tribes that rely on fish and other resources in Idaho waters for subsistence purposes. In its disapproval action, EPA recommended that Idaho further evaluate levels of fish intake by recreational and subsistence fishers in Idaho when evaluating the appropriate FCR for use in deriving criteria.  In 2017, EPA informed Idaho that it had not adequately taken into consideration subsistence fishing use by Idaho tribes, and therefore Idaho’s criteria were not sufficiently protective.  To make a long technical story short, after committed efforts by Idaho, EPA finally approved the state’s new and revised human health criteria, in April, 2019.

Other states and tribes are moving cautiously relative to these new human health criteria, learning from Idaho that national default assumptions embedded in EPA’s formula will require careful study.  EPA developed chemical specific science documents for each of the 94 chemical pollutants which serve to update exposure inputs for the formula cited above, many of which reference proprietary studies that are not readily available for review without purchase.  States and tribes are now working to assess EPA default values relative to local and regional data for:  body weight; drinking water consumption; fish consumption; trophic levels of fish in local waters and in representative diet; and toxicity values for non-carcinogenic and carcinogenic effects. 

The West Virginia legislature recently directed the West Virginia Department of Environmental Protection to allow additional time to complete the assessment of local and regional data that is being developed prior to finalizing its water quality standards incorporating the 2015 human health criteria.  In West Virginia, freshwater trout is sought after as a culinary delicacy.  As for shark, that’s not typically on the menu.

Some Labor Principles for Climate Change Legislation

Posted on May 20, 2019 by Eugene Trisko

The Democratic takeover of the House has rekindled hopes for climate change legislation, notwithstanding major hurdles in the Senate and the White House. While little but incremental progress is likely over the foreseeable future, the legislative concepts now being developed may gain greater traction after the 2020 general election.

Labor unions have participated in all major climate legislative developments since the 1997 Kyoto Protocol, and were involved in the drafting of the carbon capture and storage (CCS) technology and other provisions of the 2009 Waxman-Markey climate bill. Labor has consistently advocated for a comprehensive, economy-wide legislative solution to climate change. However, it is essential that any such legislation also be crafted to provide for worker adjustment assistance programs to address job displacement impacting families and communities.

Unions in the energy space are concerned about the adverse job implications of potential carbon tax legislation. Carbon taxes create uncertainties about market responses and lack assurance that advanced emission mitigation technologies such as CCS could be deployed in time to avert massive dislocation of workers in the petroleum, coal, rail, and mining sectors.

Any carbon tax legislation necessarily must include significant revenue set-asides for worker adjustment and community redevelopment assistance. Bureau of Labor Statistics data show that more than two million workers are directly employed in 14 vulnerable fossil fuel-related industries, with annual wages and benefits of some $180 billion. An additional seven million indirect jobs are in support industries and communities.

Major energy unions also are concerned about unrealistic solutions such as those advocated in the “Green New Deal” and by proponents of “Keep It in the Ground.” Legislation addressing the complex issues of carbon emission reduction must address: a) the tremendous impact such legislation will have on millions of fossil fuel-reliant jobs across America; and b) the costs and full recompense required to mitigate the effects of the loss of those jobs on workers, families and communities.

Speaker Pelosi has indicated that an emission allowance trading program such as that developed in the 2009 Waxman-Markey bill is a good starting point for discussions about future climate legislation. Updating and improving that bill could offer strong technology incentives while delivering significant longer-term emission reductions. A revamped allowance-based program could reflect the following principles:

1) All major emitting sectors (utilities, industrial, transportation) should be covered by a national trading program based on an upstream allocation of allowances  - i.e., to utility generating units, gas pipelines, oil refineries, etc.;

2) The rate of decline for any cap (sectoral or national) should to be assessed in light of the cost and availability of technologies for reducing CO2. In the case of electric utilities, a longer time frame for reductions can be justified based on lengthy engineering and construction lead-times - the transportation sector similarly requires long lead-times due to the gradual rollover of vehicle fleets;

3) A bonus allowance program for technology retrofits at utility and industrial units, similar to that employed in Waxman-Markey and the 1990 acid rain program, would complement the CCS incentives that Congress recently enacted in 45Q tax credit legislation;

4) Allowance auctions should be avoided as they constitute a form of double taxation on emitting sectors: first, compliance must be achieved through investments in control measures, and second, allowances must be purchased through an auction system;

5) Any economy-wide legislation should seek to maintain fuel diversity among "clean" fossil, nuclear, and renewable resources, with adequate 24/7 baseload generating capabilities. Reliance on large-scale battery storage to back up renewable power sources cannot provide assurance of grid stability over prolonged episodes of severe weather; and

6) Minimal limitations should be placed on emission allowance banking and borrowing to reduce overall compliance costs. Similarly, a broad variety of domestic and international offsets should be available, including initiatives to help reduce deforestation.

Legislation reflecting these principles may face fewer political hurdles than some of the more extreme proposals being advocated today. While current science informs a commitment to large-scale global reductions to meet aggressive climate targets, the U.S. should act in a manner consistent with the preservation and expansion of highly-paid skilled jobs in the energy and transport sectors. A technology-oriented path for achieving significant long-term reductions appears more politically and economically feasible than calls to eliminate all fossil fuel use within the next decade or two.

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NOTE: The writer is an adviser to several energy-related labor unions concerned about climate change legislation and regulation.

…To the Oceans White with (Styro)foam

Posted on May 16, 2019 by David Van Slyke

On April 30, 2019, Maine Governor Janet Mills signed into law An Act to Prohibit the Use of Certain Disposable Food Service Containers, making Maine the first state in the nation to ban polystyrene foam (more commonly called Styrofoam) use in disposable food service containers coffee cups, takeout containers, packaged meat trays, egg cartons and the like.  The prohibition, which takes effect on January 1, 2021, bans restaurants, convenience stores, farmer’s markets, nursing homes, food pantries and other businesses from using the containers.

While Styrofoam containers have many advantages over alternatives – they are comparatively easy to manufacture, light (cost-effective to ship), relatively durable, have good insulating qualities and (by some measures) are lower in production impacts – they are among the most common sources of litter in the United States, found “[f]rom the mountains to the prairies….”

Further, polystyrene foam is petroleum-based, floats, is prevalent in the marine environment, and photodegrades and physically breaks down into smaller particles that are ingested (to ill effect) by marine life.  Further, recent research suggests that chemicals associated with polystyrene foam debris transfer to marine life that attaches itself to the debris.

I, for one, applaud the Maine Legislature and Governor Mills, as well as the other states (Maryland, California and Hawaii) that have considered such a ban and the numerous municipalities across “this land that I love” that have already banned Styrofoam use.

However, there is still work to be done.  As a member of Red Sox Nation (and, yes, a devoted drinker of Dunkin Donuts® coffee), the next time I hear an awe-inspiring rendition of “God Bless America” at Fenway Park, I may have a tough time blocking the thought that it is actually trillions of bits of polystyrene that are making “…the oceans white with foam.”

A Rational Counter to the Green New Deal

Posted on May 15, 2019 by Dick Stoll

For anyone serious about climate policy, I highly recommend Bob Sussman’s Comment in the May 2019 Environmental Law Reporter. Sussman, a former high-ranking EPA official in the Clinton and Obama Administrations, has produced an amazingly comprehensive review of where we have been and where – in his view – we should be going with climate policy and law in the U.S.

He recommends a detailed mix of legislative and regulatory proposals covering all sectors of the economy.  His proposals are based (necessarily) on the assumption that Democrats will control both the White House and Congress beginning in 2021.  If this happens, he says, the Democrats “will need to be ready with a fully developed and actionable climate policy agenda . . . building this agenda will take time and must begin now.”

So is Sussman – like many Democratic Presidential candidates – endorsing the Green New Deal (GND)?  Hardly!  His baseline is to seek “economically responsible and realistic” measures.  And when he says “realistic,” he means politically as well as technically.

Sussman criticizes the GND as a “wild card” formulated by “idealistic newcomers” who could “unwittingly torpedo their own efforts.”  He urges those formulating new proposals to account seriously for concerns about (1) economic disruption, (2) an expansive federal bureaucracy, (3) picking winners and losers among energy technologies, and (4) the U.S. competitive position internationally.  Democrats, he writes, “need to acknowledge these political realities.” 

These are concerns and realities, of course, that the GND essentially flaunts.  He warns that the GND “will polarize the electorate and alienate the political center,” which would lead to “yet another policymaking failure that allows GHG emissions and global temperatures to continue to rise unchecked.”

Sussman’s detailed proposals are summarized neatly in Table I to his Comment.  He is realistic in dividing proposals that will need new legislation as opposed to beefed up regulations.  For instance, he is careful to note that cap-and-trade or “beyond the fenceline” approaches would need new legislation.  In this regard, he recognizes that anything like the ambitious Obama Clean Power Plan would be unlikely to survive judicial review given the current composition of the Supreme Court.

For the power and manufacturing sectors, he endorses legislation providing an integrated cap-and-trade system.  I have one caution in this regard.  I would hope that such legislation would not look very much like the Waxman-Markey bill that passed the House in June, 2009 (and was never brought to the floor of the Senate).

As I wrote in a piece for BNA that year, the House bill contained short deadlines for dozens of new EPA regulations – deadlines that could never have been responsibly met. This would have set up an inevitable round of citizens suits forcing new deadlines coupled with massive judicial review opportunities.  All this in turn would produce tons of work for lawyers accompanied by very few tons of emission reductions.   Hopefully any new cap and trade legislation can be sufficiently specific on programmatic elements and numeric details so the program could get off the ground without suffering through years of judicial process.

A Good Defense is an Affirmative Defense

Posted on May 14, 2019 by Paul Seals

Citing cooperative federalism, the Environmental Protection Agency (EPA) Region 6 Regional Administrator has proposed to withdraw the agency’s 2015 determination that the affirmative defense provisions in Texas’ State Implementation Plan (SIP) applicable to excess emissions that occurred during upsets and unplanned events made the SIP substantially inadequate to meet Clean Air Act (CAA) requirements.  84 FR 17986 (April 29, 2019).  The proposal, if finalized, would reinstate Texas’ affirmative defense provisions that had been approved by the EPA in 2010 and upheld by the Fifth Circuit in 2013.  See Luminant Generation Co. v. EPA, 714 F.3d 841 (5th Cir, 2013, cert. denied) holding that the EPA’s interpretation of the CAA to allow certain affirmative defenses as to civil penalties in section 110 SIPs was a permissible interpretation warranting deference.

The proposal was in response to Texas’ petition for the EPA to reconsider the 2015 Texas SIP call and reinstate EPA’s prior interpretation regarding affirmative defenses for malfunctions. 

In 2015, the EPA had reversed its interpretation of the legality of affirmative defense provisions in CAA section 110 SIPs following the decision of the D.C. Circuit in NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014), which addressed the legality of affirmative defense provisions in a certain national emission standard for hazardous air pollutants (NESHAP) established under CAA section 112.  In vacating the affirmative defense provisions, the D.C. Circuit held that the CAA gives district courts sole authority in federal enforcement proceedings to determine whether a penalty for a violation of a section 112 NESHAP is appropriate.  The EPA reconsidered the legal basis for affirmative defense provisions in CAA section 110 SIPs and concluded that the reasoning of the D.C. Circuit in NRDC should extend to state affirmative defense provisions in CAA section 110 SIPs.  Texas and 16 other states were subject to a SIP call to revise their SIPs consistent with the 2015 interpretation.

EPA Region 6 now believes the policy position on affirmative defense SIP provisions for malfunctions as upheld by the Fifth Circuit’s Luminant decision should be maintained and that it is not appropriate to extend the D.C. Circuit’s reasoning in NRDC to the affirmative defense provisions in the Texas SIP.

It is important to note that the EPA Region 6 sought and obtained concurrence from the requisite EPA Headquarters office to propose an action inconsistent with the EPA’s interpretation of affirmative defense provisions contained in the 2015 SIP call.

What should the other 16 states, subject to the SIP call based on EPA’s 2015 interpretation, make of this proposal?  Does it simply reflect the special circumstances surrounding Texas’ affirmative defense provisions – a prior approval by the EPA, which was upheld by the Fifth Circuit?  Or, is it the first step in a new policy with national applicability?

Whatever Happened to the Conservative Belief in Markets?

Posted on May 3, 2019 by Seth Jaffe

After receiving an analysis showing that shutting the Jim Bridger and Naughton coal-fired electric generating plants in Wyoming would save ratepayers money, PacificCorp, the owner of the plants, announced that it would shut the plants and the mines that supply them as early as 2022.  Mark Gordon, the Republican Governor of Wyoming is not happy.

According to Greenwire (subscription required), Gordon said that:

I will advocate for a positive path where this utility and others are part of developing solutions rather than destroying communities and delaying progress on meaningful technological advances that keeps coal as part of a diverse energy portfolio and also address climate change.  The potential for early retirements of some coal-fired power plants means we drift further away from finding solutions for reducing carbon emissions.  (Emphasis very much added.)

If we stop burning coal, we’ll never figure out how to reduce carbon.  Rats.  Why didn’t I think of that?

However, I’m not here to criticize Gordon for thinking that we need to burn coal in order to reduce CO2 emissions.  I’m here to criticize him for thinking that it is reasonable for the Republican-led government of Wyoming to criticize private companies for taking economically rational decisions to reduce costs for ratepayers.  Indeed, Wyoming has not just criticized PacificCorp.  Wyoming has apparently enacted legislation requiring a utility that wants to close a coal plant to search for a buyer.  It apparently also would require the utility to purchase electricity from such a new buyer, so long as it does not increase customer bills.

Since when did Republicans start second-guessing private sector economic decisions?  Conservatives should stop worrying about the green new deal and start worrying about socialism in Wyoming!

Did a Bureaucratic Fog Envelop the Flint Water Crisis?

Posted on April 23, 2019 by Ronald R. Janke

The Flint water crisis began in April 2014 when the City of Flint switched its source of drinking water from Lake Huron to the Flint River without installing corrosion control treatment to protect against lead and other chemicals leaching from pipes into tap water.  The need for corrective action was elevated on September 24, 2015, when a Flint pediatrician, Dr. Mona Hanna-Attisha, released her finding that the number of young children with elevated blood lead levels had increased 90 percent after the Flint’s water supply was switched.  In her book, What the Eyes Don’t See (2018), Dr. Hanna-Attisha plaintively and repeatedly asks why the regulators didn’t do something earlier to protect the children, noting “It was their job.” 

The US EPA’s Office of Inspector General (“OIG”) addressed Dr. Hanna-Attisha’s question in two reports released in 2016 and 2018.  The 2016 report concludes that by June 2015 “EPA Region V had sufficient information and authority to issue an Emergency Order but did not.”  The Region V Administrator did issue an Emergency Administrative Order under the Safe Drinking Water Act to the State of Michigan, the Michigan Department of Environmental Quality (MDEQ) and the City of Flint on January 16, 2016, one day after President Obama declared a federal state of emergency for the City of Flint, and three months after Flint had switched to a source of water with corrosion control treatment.

The 2018 OIG report concludes that “Management Weaknesses Delayed Response to the Flint Water Crisis.” It blamed ineffective communications, ineffective assessment of risk, confused oversight roles, and a failure to use existing authority. The report recommended that EPA “strengthen its oversight of state drinking water programs to improve the efficiency and effectiveness of the agency’s response to drinking water contamination emergencies.”  Notably, the report did not find that the delayed federal response resulted from factors that are commonly blamed when federal agencies fail to act – lack of authority, standards, money, personnel or other resources.   Existing personnel ultimately issued an emergency order under long-existing legal authority.   The cause of the problem and the risk of ingesting lead were recognizable -- Dr. Hanna-Attisha was immediately apprehensive about lead ingestion when a former EPA employee told her that Flint's water lacked corrosion control treatment.  Lack of concern for environmental justice seems absent, as the Obama EPA Administration widely publicized protecting low-income and minority communities, like Flint, from toxic contamination to be an agency priority.

Rather, the OIG reports suggest the Flint water crisis was enveloped in a bureaucratic fog which prevented EPA employees from seeing the urgency of the problem with enough clarity to take prompt and effective corrective action.  The fog included patterns of unfruitful extended inter- and intra-agency and inter-governmental discussions, deference, disagreements and indecision.  For example, in February 2015 EPA received six-months of lead monitoring data in which the 90th percentile of results exceeded the Practical Quantitation Limit (PQL), which by rule required Flint to optimize corrosion control treatment.  At the same time, EPA was concerned that Flint’s lead sampling protocol was biasing lead results lower.  In April 2015 EPA learned that Flint did not have corrosion control treatment in place.  In July 2015 EPA informed MDEQ that Flint had been required to provide corrosion control treatment, and the Region V Administrator advised Flint’s Mayor that EPA would “work with” the City on lead issues.  Two weeks later, EPA received a second six-months of drinking water monitoring data revealing even higher lead levels.  With MDEQ disputing that corrosion control treatment was required at Flint, Region V agreed in August 2015 to request a legal opinion from the EPA Office of Water, but it did not submit an official request until September 30, 2015.  In response, the Office of Water, without mentioning Flint, issued not a legal opinion, but a guidance memo in November 2015.  On several occasions in September 2015, the Region V administrator contacted the MDEQ, the Mayor of Flint, the EPA Administrator, and the EPA Office of Research and Development urging a variety of protective actions.   

This bureaucratic fog also contributed to EPA’s inability to react to citizen complaints about the Flint water supply.   Between May 2014 and January 2016 when the EPA Emergency Administrative Order was issued, EPA Region V received 87 complaints about Flint drinking water conditions, 30 of which raised concerns about lead.  Generally, EPA staff responded to these lead complaints with form letters recommending that citizens contact the MDEQ or the Flint water department.  Six responses took over a year to issue, and the OIG found no response to 11 lead complaints.  Region V staff did not see these complaints as indicative of a problem in Flint, and certainly not a pressing one.  In sum, the bureaucratic fog that impaired the federal response to the Flint water crisis is noteworthy not just in the context of how EPA operates but also as to the broader contemporary concern over the existence of a Deep State that subjugates public concerns to its own needs, processes and schedules.

Uneasy Easements: The Use and Abuse of the Conservation Easement Tax Break

Posted on April 22, 2019 by Philip Tabas

Conservation easements have become the most popular approach for protecting lands, water, wildlife and historic structures in the US.  Thanks in large part to the Federal income tax deduction for gifts of permanent conservation easements enacted in 1980, over 27 million acres of private lands and the wildlife on them have been protected across the country using this conservation mechanism. A charitable gift of a conservation easement has afforded landowners a way to protect the places they cherish while providing conservation groups with a cost-effective land protection tool.

Today however, this conservation mechanism is under assault. Certain easement promoters are focused more on tax benefits than the conservation outcomes that can be achieved through conservation easements. The historically successful use of the conservation incentive by owners of environmentally significant land has led some to promote the abuse of conservation easements purely for their tax shelter value as an element of a complex financial instrument. Over the past ten years, there has been an extraordinary increase in tax deductions claimed by these investment partnerships for conservation easement donations. This activity has been brought to light by information provided by the IRS to Congress and publicized by several news publications.

Typically, tax shelter promoters have been selling interests in tracts of land to taxpayers/investors looking for large tax deductions. The promoter puts together a group of taxpayers/investors, in a legal form called a “syndication” or partnership, to buy the land, donate conservation easements and then sell or develop the underlying land later. In these arrangements, the promoter of the syndication often obtains an appraisal of the tract of land which uses unrealistic assumptions on which to base the appraised value and then grants conservation easements on that land using the inflated valuations. The resulting inflated charitable deductions are then split among the taxpayers/investors.

According to IRS data, these syndications claimed more than $20 billion in charitable deductions since 2010. In 2016 alone, 248 entities claimed $6 billion in deductions.  IRS data from 2018 show that a sampling of these transactions enabled investors to claim, on average, deductions valued at nine times the amount of their original investment. Based on the most current data available, the claimed tax value of donated conservation easements nearly tripled – from $1.1 billion to $3.2 billion – from 2013 to 2014.

Fortunately, there are efforts being undertaken to curb these practices. In December 2016, the IRS issued Notice 2017-10 wherein the IRS categorized donations from these easement syndications as “listed transactions.” This means that promoters of and participants in these transactions must report their syndication activities to the IRS or face fines. In September 2018, the IRS made abusive conservation easement tax shelters one of five new targeted compliance campaigns and in March 2019, the IRS listed syndicated conservation easements as one of its “Dirty Dozen” tax scams to avoid. In December 2018, the U.S. Department of Justice filed a civil complaint against one of the nation’s largest promoters of syndicated easement transactions for an allegedly abusive conservation easement syndication tax scheme. And, finally, in March 2019 the Senate Finance Committee Chair and Ranking Member initiated an inquiry with 14 individuals suspected of being involved in these syndication transactions. Despite the IRS and the DOJ announcing formal actions to thwart this abuse of the federal tax code, the promoters of these abusive deals continue to conduct business as usual.

A broad coalition of organizations including, among others, the Land Trust Alliance, Ducks Unlimited, The Nature Conservancy, The Trust for Public Land, The Conservation Fund, the Appraisal Institute, and the American Society of Farm Managers and Rural Appraisers is advocating for enactment of the Charitable Conservation Easement Program Integrity Act of 2019 (S. 170/H.R. 1992.) If passed, this bill would disallow charitable deductions for pass-through entities where tax benefits for donations of conservation easements are claimed when property is held for only a short time and appraisal valuations are excessive. The bill was introduced on January 18, 2019 by Senators Daines (MT- R) and Stabenow (MI-D) and on March 28, 2019 by Representatives Mike Kelly (PA-R) and Mike Thompson (CA-D).

Proponents of continued use of the syndicated approach for easement transactions argue that syndications bring needed new capital to conservation which otherwise might not be available. They suggest that the solution to abuses involves greater regulation of appraisers to produce more accurate and well-substantiated valuations and to require greater obligations on conservation organizations accepting easement donations to report to the IRS a description of each conservation easement donation they receive and the fair market value of those donations. However, under tax law requirements enacted in 2006, appraisals used to substantiate charitable contributions are already required to follow relevant professional standards known as the Uniform Standards of Professional Appraisal Practice, which require an assessment of the economically realistic highest and best use of the land. And, also under current law, donors are already required to provide to the IRS a description of any conservation easement valued at $5,000 or greater as well as a statement of the conservation purpose that the easement is designed to serve.

Continued abuse of the charitable conservation easement tax deduction by syndicated easement transactions, which may have allowed some taxpayers to profit by gaming the tax code deprives the federal government of billions of dollars in revenue, distorts the fiscal impact of legitimate conservation easement gifts and adversely affects other related conservation easement programs (e.g. state tax credits for easement gifts.) If allowed to stand, these arrangements could cause lawmakers and the public to question the continued legitimacy of mainstream conservation transactions and may result in challenges to continuation of the Federal conservation easement tax benefit itself.

Conservation transactions and practices that do not always meet both the letter and the spirit of easement law must not be allowed to endanger the thousands of legitimate conservation easements and the well-intentioned, conservation-minded landowners behind them.

Clean Water Act §401—Whose Certification Is It?

Posted on April 19, 2019 by Richard Glick

As part of the Administration’s policy in favor of domestic oil and gas development, President Trump issued an Executive Order on April 10 “Promoting Energy Infrastructure and Economic Growth.”  The EO seeks to make the regulatory process more efficient and to create “increased regulatory certainty.”   

A policy focus in the EO is water quality certification under section 401 of the Clean Water Act.  Section 401 provides that before a federal agency may approve a project that could result in a “discharge” to navigable waters, the state or tribe with jurisdiction must certify that the discharge would comply with water quality standards, effluent limitations and “other appropriate requirements of State law.”  The statute imposes a one-year period for the state or tribe to act. 

This issue arises most often in the context of permits issued by the Corps of Engineers under section 404 of the CWA to fill wetlands, and licenses issued by the Federal Energy Regulatory Commission for hydroelectric projects under the Federal Power Act.  Both trigger state review under section 401.  Gas pipelines and LNG terminal developments almost always involve stream crossings or shoreline work, which means filling of wetlands.

The EO directs EPA to take the lead to review federal policy and regulations concerning section 401 implementation.  In particular, EPA is to revisit the 2010 interim guidance entitled “Clean Water Act Section 401 Water Quality Certification: A Water Quality Protection Tool for States and Tribes.”  In its review, EPA is directed to focus on a list of issues, including the appropriate scope of 401 review, the “types of conditions that may be appropriate to include in a certification,” reasonable review times and how much information should be requested of the applicant.

Who could be opposed to improved regulatory efficiency and certainty?  To be sure, the section 401 process can be contentious and time consuming. Although section 401 prescribes a one-year review period, the issues are thorny and it has become a common practice for applicants to withdraw and refile applications to restart the clock.  A recent decision by the D. C. Circuit Court of Appeals throws a shadow on that practice, but one year doesn’t necessarily mean one year.  It is also true that states have used section 401 as a cudgel to block LNG developments, as in the AES Sparrows Point LNG Project.

The problem with the EO is that it directs EPA to “fix” a problem over which it has little authority.  Section 401 is a program administered by the states and EPA has just a marginal role to ensure that one state’s 401 decision doesn’t violate a downstream state’s water quality standards.  Even EPA’s 2010 interim guidance is just a compendium of case law and general principles to aid state implementation, not a document that establishes policy.

Indeed, the scope of state section 401 authority is broad, and states use that authority to promote state policies far beyond water quality standards.  Any limitations on state discretion over the process and conditions of certification are likely to come from the courts, not EPA.  States are not shy in asserting their sovereignty and no state is going to cede any of its authority to EPA, regardless of what any new guidance or rules might suggest.

ACOEL Announces Its First Memorandum of Understanding with a Cuban Environmental Foundation

Posted on April 18, 2019 by David B. Farer

For the past three years, the Cuba Working Group of the ACOEL International Pro Bono Committee has been making concerted efforts to establish a formal relationship with a Cuban entity that will allow Fellows of the College to engage in pro bono activities to assist the Cuban people in addressing particular environmental concerns and issues.

We are pleased to announce that the College has now entered a Memorandum of Understanding with the largest environmental foundation in Cuba, the Foundation Antonio Nunez Jimenez of Nature and Humanity.

Figure 1- Signing of the MOU between ACOEL and FANJ, February 14,2019 by Foundation President Liliana Nunez Velis and ACOEL Fellow David Farer

The MOU was signed at a formal ceremony at the offices of the Foundation in Havana on February 14, 2019.  Liliana Nunez Velis, President of the Foundation and daughter of founder Antonio Nunez Jimenez, signed for the Foundation.  I was there on behalf of the College with delegation of authority from ACOEL President Allan Gates.

Figure 2 - Handshake after the MOU signing: Nunez Velis and Farer

Meetings ensued with senior foundation staff on developing ideas for initial collaborations.  We will be communicating with ACOEL Fellows further once the topics are set and we are prepared to solicit interest for participation.

We also met with the environmental law faculty of the University of Havana, with whom we also had discussions and with whom we hope to proceed on collaborative projects in the future.

Figure 3 - Environmental Law faculty at the Univ. of Havana, with ACOEL Fellow David Farer and his wife Elisa King, in front of the Alma Mater statue on the stairway entrance to the University

The Foundation -- also known as FANJ -- is a non-governmental institution engaged in research and advancement of environmental projects and programs from both scientific and cultural perspectives.  They have described their mission as that of creating a culture of nature, seeking harmony between society and the environment.

Our efforts to establish such a relationship began with an initial delegation to Havana in September 2016.  This led to an invitation to submit a paper for consideration in preparation for the XI International Convention on Environment & Development, in Havana.  Mary Ellen Ternes and I submitted a paper, Lessons Learned: Effective Environmental Regulation of Critical Infrastructure Development & Operation.  It was accepted, and Mary Ellen and I presented it at the July 2017 convention in Havana.   Our paper on the topic was also published in the proceedings of the convention.

Subsequent communications ensued, and then recent discussions in both New York City and Havana led to development of the MOU with FANJ and the recent agreement on its terms.

As the MOU recites, ACOEL and FANJ are looking forward to separately engaged ACOEL Fellows working with FANJ representatives to explore the contributions that each organization's Fellows and representatives can make to the other, including development of training on specific topics in environmental law, participation in events and advice on capacity building, and in sharing the knowledge and experience of the representatives and Fellows of the two organizations.

New UN Special Rapporteur Links the Right to a Healthy Environment to Air Pollution’s Deadly Impact Across the Globe

Posted on April 12, 2019 by Susan Kath

Professor John Knox, former UN Special Rapporteur for Human Rights and the Environment, began in 2012 to study the obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment, as part of the United Nations Human Rights Council special procedures. When his two terms ended in 2018, he had mapped the statements of human rights bodies on human rights obligations relating to the environment, and produced thematic reports covering human rights obligations relating to climate change, biodiversity, and children’s rights. Knox also compiled more than 100 good practices in fulfilling those obligations and helped to establish a website for environmental defenders. His capstone contribution, the Framework Principles, identifies 16 principles relating to human rights and the environment and explains how existing human rights obligations should be applied in the environmental context.

The ultimate goal, UN recognition of the human right to a healthy environment, has now been put before the General Assembly by Knox’s successor, Professor David Boyd, who presented a comprehensive argument for the right to that body in the fall of 2018. Boyd, a champion of the right, will be vigorously campaigning for its recognition over the next three years, along with other projects for his mandate.

With the issuance of his most recent report in February, Boyd looks beyond the general right and focuses on the components of the right---in this case, the right to breathe clean air. Around the world, air quality is degraded by both ambient and household air pollution, with the adverse health effects highest in low- and middle-income countries. Notably, more than 90 percent of the world’s population lives in regions that exceed World Health Organization guidelines for healthy ambient air quality, specifically with respect to fine particulate matter (PM 2.5). What does this mean in real terms? It means that over 6 billion people, including 2 billion children, are breathing polluted air with adverse consequences: taken together, ambient and household air pollution contribute to 7 million premature deaths annually, including the deaths of approximately 600,000 children.  Unsurprisingly, most of those impacted are also the most vulnerable—women, children, the elderly, minorities, indigenous peoples and members of traditional communities, and people living in poverty.

So what does Boyd offer as the way forward? First, he observes that poor air quality has implications for an array of human rights: the rights to life, health, water, food, housing and an adequate standard of living. Second, he reaffirms the position advanced by Knox that States have obligations to protect the enjoyment of human rights from environmental harm. As embodied in Knox’s Framework Principles, that means States have procedural, substantive, and special obligations towards those in vulnerable situations. Third, he identifies the seven key steps that States must take in fulfilling the right to breathe clean air:

  • monitor air quality and impacts on human health
  • assess sources of air pollution
  • make information publicly available, including public health advisories
  • establish air quality legislation, regulations, standards and policies
  • develop air quality action plans at the local, national, and, if necessary, regional levels
  • implement an air quality action plan  and enforce the standard
  • evaluate progress and, if necessary, strengthen the plan to ensure that the standards are met

With each of these steps, States must fully inform the public and provide an opportunity to participate in the decision-making process. Businesses, a major source of air pollution, should comply with the UN Guiding Principles on Business and Human Rights and the Children’s Rights and Business Principles. Boyd also notes that special attention must be paid to environmental defenders engaged in activities to protect the right to clean air.

Boyd also explains that not all the news is bad, sharing a number of good practices, such as laws, policies, programs and initiatives that are lessening the impact of human rights violations caused by air pollution. These include establishing or improving air quality monitoring networks in places like Morocco and Azerbaijan and decreasing the proportion of households using solid fuels for cooking and heating in Latin America.

Boyd closes the report with a list of 20 recommendations that States should consider as part of their national air quality action plans, and he also implores us to act:  

The failure to respect, protect and fulfill the right to breathe clean air is inflicting a terrible toll on people across the world. The statistics presented in the present report depict a public health catastrophe, yet the numbers fail to capture the magnitude of human suffering involved. Each premature death, every illness and every disability afflicts an individual with hopes, dreams and loved ones. Air pollution is a preventable problem. The solutions-laws, standards, policies, programmes, investments and technologies-are known. Implementing these solutions will of course entail large investments, but the benefits of fulfilling the right to breathe clean air for all of humanity are incalculable.

Incalculable, indeed. And worth our collective effort to pursue at every level.

“A Hard Rains A-Gonna Fall” – Utility-Scale Solar Projects Creating Significant Stormwater Issues

Posted on April 9, 2019 by Mark R. Sussman

With apologies to Bob Dylan for taking the name of his song out of context, hard rains are going to fall, and some developers of utility-scale solar projects seem to have underestimated the damage that such rains can cause.  Over the past several years, a number of large scale solar projects in Connecticut have discharged significant amounts of sediment into wetlands and watercourses, harmed down-gradient property owners, and posed a threat to habitat essential to threatened or endangered species.  These projects have violated stormwater permitting requirements, resulting in the issuance of cease and desist orders, the imposition of civil penalties and remediation requirements, and triggering justifiable public opposition to renewable energy projects.

Utility-scale solar projects in Connecticut generally range from 10 to 20 megawatts (MW).  These projects can disturb upwards of 100 acres of land.  Usually the site selection process for these projects focuses on the ability to interconnect to the power grid, land availability, and cost.  Stormwater management issues have been a secondary concern, typically addressed in the first instance by conceptual, high level plans, rather than through site-specific soils investigations, detailed grading plans, and rigorous stormwater design calculations and analysis. 

In Connecticut, utility-scale solar projects must first be approved by the Connecticut Siting Council.  In December 2017, the Council denied an application to site a 50 MW project that would have disturbed 270 acres.  The Council denied the application, without prejudice, in large part because the application did not contain sufficiently detailed information regarding grading, and erosion and stormwater control.  The Council was concerned about stormwater management and sedimentation impacts to wetlands and watercourses that were in close proximity to the limits of disturbance and the resulting detrimental effect on water quality.

Once a solar project is approved, the developer must apply to the Connecticut Department of Energy and Environmental Protection (“DEEP”) for the General Permit for the discharge of Stormwater from Construction Activities or for an individual stormwater permit. DEEP approved the stormwater registrations for the early utility-scale solar projects in Connecticut without significant scrutiny, with the apparent expectation that the construction contractors and their stormwater professionals understood how to minimize erosion and sedimentation discharges during construction.  Unfortunately, there have been numerous incidents of significant stormwater damage and complaints from down-gradient property owners during and after the construction of solar facilities.  These problems have occurred either because the construction contractor, in an effort to meet contract deadlines, may have skipped steps such as failing to stage construction and clear only five acres at a time, or because the site engineers miscalculated the stormwater impacts from the extensive disturbance of the land’s natural condition.  In light of the repeated problems caused by erosion and sedimentation at solar construction sites, Connecticut has required more detailed site-specific documentation regarding stormwater flows and management systems, and has become more aggressive in its enforcement.   

In 2017 and 2018, DEEP issued several cease and desist orders temporarily halting the construction of solar projects until the projects revised their stormwater pollution control plans and installed improved erosion controls.  The Department also issued consent orders to some projects requiring remediation of impacted wetlands, watercourses and down-gradient properties, habitat restoration plans for some threatened species, and the posting of financial assurances of as much as $1 million. Two recent consent orders included civil penalties of between $200,000 and $575,000.  The Department also recently rejected a stormwater application for a 20 MW solar project, concluding that the submitted stormwater pollution control plan lacked sufficient detailed information necessary for the design of erosion and sediment controls and long term stormwater management measures post-construction to demonstrate that the project would adequately control stormwater impacts.

The lesson that should be learned from the Connecticut experience with constructing utility-scale solar projects is that developers need to devote sufficient resources to evaluate and design appropriate erosion and sedimentation controls earlier in the development process, and they need to hire qualified stormwater management consultants and pay careful attention to the proper implementation of stormwater controls, both during and after construction.  This means going beyond describing generic stormwater management controls in their applications for approval, and taking stormwater management seriously.  They need to understand that “A Hard Rains A-Gonna Fall” and cause damage to the environment if sufficient stormwater management controls are not correctly implemented.  If solar project sponsors are not careful, the public perception of solar projects will be negatively impacted by these stormwater-induced incidents, and support for these renewable energy projects will decline.

North to the Future: Alaska and the Risks of Pursuing a Trump Legacy

Posted on April 5, 2019 by Peter Van Tuyn

On the last Friday in March, Judge Sharon Gleason of the Federal District Court for the District of Alaska issued two opinions in closely-watched cases* concerning federal public lands and waters in and offshore of Alaska.  In both cases, the Trump administration’s actions were overturned by the court, having immediate impact on two State of Alaska priorities and potential impact on a number of other State and private development efforts. 

The first case concerns a land trade approved by Interior Secretary Ryan Zinke in which the United States agreed to transfer formal Wilderness in the Izembek National Wildlife Refuge to an Alaska Native Corporation.  Izembek Refuge is internationally significant and of critical importance to many species of wildlife, including migratory waterfowl.  For example, virtually the entire global populations of Pacific Brant and Emperor Geese migrate through Izembek.  The land trade was intended to enable the construction of a road between the Alaska communities of Cold Bay and King Cove.  In multiple analyses since the 1980s the Interior Department had found that such a road would harm wildlife in the Refuge.  In 2013 Interior Secretary Sally Jewell formally rejected a land trade due to harm it would cause to “irreplaceable ecological resources,” and because “reasonable and viable transportation alternatives” exist between the communities.  In 2018, Secretary Zinke reversed course and approved the land trade.  A coalition of conservation groups then sued.

In rejecting the land trade, Judge Gleason found that Secretary Zinke had not addressed anywhere in the record his reasons for reversing course; indeed, he had not even acknowledged the change in agency position. Relying on the seminal U.S. Supreme Court administrative law cases of Motor Vehicle Manufacturers v. State Farm and FCC v. Fox, which require an acknowledgement and reasoned explanation for such a change of course, Judge Gleason invalidated the land trade, writing that while a court should “‘uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,’ a court may not ‘supply a reasoned basis for the agency’s action that the agency itself has not given.’”

Later that same day Judge Gleason issued an opinion in a challenge to a 2017 President Trump executive order concerning areas where offshore oil and gas leasing can take place.  In that case, conservation organizations and an Alaska Native-focused NGO challenged Trump’s  revocation of President Obama’s earlier withdrawals from oil and gas leasing of most of the United States’ Arctic Ocean and a number of canyons within the Atlantic Ocean. 

This lawsuit turned on an interpretation of presidential withdrawal authority under the Outer Continental Shelf Lands Act. Section 12(a) of OCSLA provides the president with the clear authority to withdraw certain areas of the Outer Continental Shelf from oil and gas leasing, and the central question in the lawsuit was whether it also provides authority for a president to undo existing  withdrawals that were intended, like Obama’s Arctic and Atlantic actions, to be of unlimited duration.  Judge Gleason found that section 12(a) authority works only in the direction of presidential withdrawals, and not the undoing (or “revocation”) of such withdrawals.

Looking to the future, should Acting (and likely soon-to-be-confirmed) Secretary David Bernhardt revisit the Izembek land trade, he will need to either win on appeal during his tenure (should he take one) or directly confront the agency’s previous rejection of a land trade and the reasons for that rejection.  Furthermore, Trump’s “energy dominance” effort to expand offshore oil drilling in the Arctic Ocean is dealt a blow.  Notably, the OCSLA issue is similar to one raised in litigation over Trump’s revocation of National Monument designations under the Antiquities Act and Judge Gleason’s treatment of the issue thus may influence other courts. 

More broadly than even these implications, the two Gleason decisions may portend the result of other Alaska-related federal policy and decision-making.  For example, the Corps of Engineers is fast-tracking Clean Water Act section 404 permitting for the proposed Pebble mine in Southwest Alaska.  And the proposed mine’s developers are trying to get EPA to reverse course on its intended use of its Clean Water Act section 404(c) authority to restrict or prevent any Corps’ permit for the mining of the Pebble ore deposit.  EPA’s proposed restrictions were based on a Bristol Bay Watershed Assessment, which the developer had waived challenging in settling a previous lawsuit with EPA.  Given the clarity of Judge Gleason’s Izembek opinion on what it would take for the agency to reverse course, and the settled science of EPA’s watershed assessment, securing a 404 permit won’t be as simple for proponents as winning a policy argument, which appeared to be the case with the Izembek land trade. 

Looking back to the Interior Department, the Bureau of Land Management is moving forward with oil and gas lease sales on the Coastal Plain of the Arctic Refuge.  Critics of that effort, including a former Interior official, say the legal process is being illegally shortcut, which is an attribute it may thus share with the Izembek land trade.  Interior is also speedily-redoing a 2013 management plan for the 23 million acre National Petroleum Reserve with a goal of expanding oil and gas leasing in the Reserve starting in 2020.    

Ironically, on Thursday, March 28, the day before Judge Gleason issued her decisions, Interior Secretary-nominee David Bernhardt had his confirmation hearing before the U.S. Senate Energy and Natural Resources Committee.  This committee is chaired by Alaska’s Senator Lisa Murkowski, who is a supporter of expanded oil and gas development on federal lands in and offshore of Alaska.  The judicial smackdown the next day, however, is sure to complicate Bernhardt’s efforts to implement such an agenda before the next presidential term, which is the timeframe which appears to underly Interior’s and other agencies’ efforts on Alaska issues.  And if the rush to secure more decisions in this presidential term leads to more losses in court, Alaska development interests could face complicated bureaucratic and legal landscapes, and strong political backlash, well into the future.

* Izembek case:  Friends of Alaska Wildlife Refuges, et al, v. Bernhardt, 3:18-cv-00029-SLG (March 29, 2019, D. Ak).

* Arctic OCS case:  League of Conservation Voters, et al, v. Trump, 3:17-cv-00101-SLG (March 29, 2019, D. Ak)

 

Down the Rabbit Hole: Injection Wells and Subsurface "Trespass"

Posted on March 29, 2019 by G. Alan Perkins

When an oil and gas operator obtains all proper permits for a saltwater disposal well and responsibly injects fluids into the approved deep subsurface formation, and some of the injected fluid ultimately migrates laterally within the permitted injection formation beneath the lands of another, has the operator committed an actionable trespass?  And if so, what should the measure of damages be?  Despite widespread use of injection wells under strict state and federal regulation, the law concerning subsurface “trespass” by fluids injected into disposal wells is spotty.  Many states have yet to directly address the issue.  Perhaps due to the proliferation of oil and gas production in regions of the country not accustomed to petroleum production, such cases are becoming more frequent.

Nearly all formations that contain oil or natural gas also contain saltwater.  So, it should come as no surprise that the process of producing oil and gas also produces saltwater – a lot of saltwater.  In 2007, the estimated volume of produced water from U.S. onshore oil and gas production was 21 billion barrels, or about 2.4 billion gallons per day.  Produced water that cannot be reused or recycled must be disposed of in a safe and effective manner.

Injection wells (often called “disposal wells” or “saltwater disposal wells”) that inject fluids associated with oil and gas production are considered “Class II” injection wells in the Underground Injection Control program.  Disposal wells typically inject produced water into zones depleted of oil and natural gas and that also naturally contain saltwater similar to the fluids being injected.  Such wells have been common in oil and gas producing states since the 1930s.  U.S. EPA reports that approximately 180,000 Class II injection wells operate in the United States. 

The industry, along with state and federal regulators, determined decades ago that the safest and most environmentally responsible way to dispose of produced water was through the proper use of injection wells.  Injection wells dispose of produced water in deep geological formations, isolated from underground sources of drinking water, to prevent soil and water contamination.  U.S. EPA regulates injection wells in accordance with stringent regulations pursuant to the federal Safe Drinking Water Act, and 33 states have delegated authority to be the primary enforcer (with a few others having joint authority with EPA).

Common law trespass can be described generally as “any entry on land that is in the peaceable possession of another, regardless of the willfulness of the entry, the degree of force used, the duration of the intruding presence, and the absence of damage to the land.”  Under the common law, an invasion alone was sufficient to sustain a trespass action, regardless of whether any damages could be proven.  This formulation may be adequate when applied to a pasture, home, or driveway.  But troublesome issues immediately arise when the focus turns to fluids moving unseen through geological formations thousands of feet below the ground surface.  Simply confirming whether the fluids in question are present in the deep subsurface of a particular tract of land is problematic, much less discovering how much is there and how long it has been there.

The common law cause of action for trespass was created before significant technological advances existed, such as the advent of aircraft and deep subsurface injection wells. Common law trespass typically involves the disturbance of the “peaceable possession” of property by another.  Surely, injecting produced water into a confined deep formation that already contains saltwater does not, in reality, disturb a landowner’s “peaceable possession” of his “property,” and thus should not give rise to an actionable trespass.  Just as a landowner does not “possess” the heavens, so neither should a property owner be considered to “possess” the deep subsurface unless he or she has at a minimum drilled a well or opened a mine to exploit it.

Over 70 years ago, in the well-known case of United States v. Causby, 328 U.S. 256 (1946), the common law yielded to societal needs to accommodate modern air travel so long as the use is regulated and does not unreasonably intrude on the owner’s use and enjoyment of the surface.  Class II commercial disposal wells are also highly regulated and serve an important societal purpose – the necessary, safe and environmentally protective disposal of vast amounts of produced water. The Ohio Supreme Court explicitly adopted this reasoning in expressing the law in Ohio with regard to migration of injected fluids from a disposal well, stating:

[O]wnership rights in today’s world are not as clear-cut as they were before the advent of airplanes and injection wells.  Consequently, we do not accept appellants’ assertion of absolute ownership of everything below the surface of their properties.  Just as a property owner must accept some limitations on the ownership rights extending above the surface of the property, we find that there are also limitations on the property owners’ subsurface rights.

Chance v. BP Chems., Inc., 670 N.E.2d 985, 992 (Ohio 1996).

Disposal of produced water is an essential part of the production of oil and gas, and it is impossible to accurately predict or restrict the movement of injected fluid through the injection zone.  Of course, some might advocate simply eliminating oil and gas production as a happy solution.  But realistically that is not going to happen anytime soon, and we should all agree that produced water should be handled in a safe and environmentally responsible manner.  Given the vital need for safe disposal of produced water, and the pervasive regulatory scheme governing such wells, the operator of a permitted injection well should not be subject to trespass liability for lateral movement through the permitted injection zone absent any damage.  Recognizing a per se trespass liability without any actual injury could impact many thousands of currently operating permitted injection wells, and essentially create a new strict liability tort.

New Jersey PFAS Directive

Posted on March 28, 2019 by John A. McKinney Jr

Co-authored by Robert H. Crespi – First published on the CSG Environmental Law Blog.

On March 25, 2019, the New Jersey Department of Environmental Protection (“DEP”) issued a Statewide PFAS Directive to a number of companies associated with the manufacture of poly- and perfluoroalkyl chemicals (“PFAS” which includes PFNA, PFOA and PFOS and other substances) and their replacement compounds.  Pursuant to the Directive, these companies are to reimburse DEP’s past and future costs of investigating, monitoring, testing, treating, and remediating New Jersey’s drinking water and waste systems, private drinking water wells and natural resources including groundwater, surface water, soil, sediments and biota.  The Directive requires certain information from these companies as to future costs and information related to the historic uses of PFAS and replacement chemicals including “information ranging from use and discharge of the chemicals through wastewater treatment plants, air emissions, and sales of products containing the chemicals to current development, manufacture, use and release of newer chemicals in the state.”  The Directive notes that failure to comply will increase Respondents’ potential liability to the DEP in an amount equal to three times the cost of arranging for the cleanup and removal of the discharges, which the Directive deems a “statewide public nuisance.”

This Directive states New Jersey’s resolve that these companies, and not New Jersey residents, pay the costs necessary to protect “public health and safety and the state’s environment.”  The DEP contends that this Directive will require these companies to “fund millions of dollars in assessment and cleanup efforts” pursuant to the state’s Spill Compensation and Control Act, the Water Pollution Control Act and other state environmental laws.

New Jersey has been in the forefront of states acting to address PFAS.  At the time of the Directive’s issuance, DEP Commissioner Catherine R. McCabe referenced the “near daily” finding of PFAs in New Jersey’s environment. As noted in the press release announcing the Directive’s issuance, New Jersey was “the first state to adopt a maximum contaminant level (MCL) of 13 parts per trillion for PFNA in drinking water, the strictest such standard in the nation. New Jersey's standards supersede those of the U.S. Environmental Protection Agency, which does not regulate the chemicals that have been linked to cancer and other illnesses … Earlier this month, the DEP established interim specific groundwater quality standards for both PFOA and PFOS, at 10 parts per trillion. New Jersey is among the first states to pursue regulation of these compounds.”

Of course, the Directive is only the opening salvo.  More is sure to come.