Requiem for an LNG Project

Posted on August 29, 2016 by Rick Glick

Perhaps not many, at least not in Oregon, would mourn the failure of a liquefied natural gas terminal and associated gas pipeline project.  As counsel for over a decade to the Oregon LNG project at the mouth of the Columbia River, I mourn less for the failure of the project than the process.  I am confident that if the standards-based approval process had been allowed to play out, we would have satisfied all federal and state permitting criteria.  But, alas, we never got that opportunity.

The Natural Gas Act, as amended in 2005, confers upon the Federal Energy Regulatory Commission exclusive authority over the siting of LNG export terminals and interstate pipelines.  The NGA, however, preserves authority delegated to the states by the Clean Water Act, Clean Air Act, and Coastal Zone Management Act.  The problem is that Oregon law requires state agencies to first receive affirmation from local governments of compatibility with land use regulations before issuing a state permit. 

Other states have similar laws and have attempted to use them to halt or impede LNG projects, only to have  Courts of Appeals for the D.C., First and Fourth Circuits reject the incorporation of local land use planning into state processes as preempted by the NGA.  But the conflict with state law sets up an unnecessary confrontation, adding expense and delay that can prove fatal to a project under development, as it was here.

The Oregon LNG project, aware of the federal preemption argument, nonetheless filed land use applications at the City of Warrenton for the terminal, and at Clatsop County for the pipeline.  The project filed the applications to demonstrate a desire to comply with all applicable regulations, confident in its ability to do so.  In fact, an independent hearings officer, following an evidentiary hearing, concluded the project met all County criteria.  Following approval by the County Commission, and, while an appeal by opponents was pending, an election occurred.  An anti-LNG slate was elected to the Board of Commissioners, and the newly constituted County Commission promptly reversed course.  And there’s the rub: the criteria had not changed, only the elected officials passing judgment.  Thus, local land use compatibility statements were not to be had, rendering the state permitting process impossible to complete.

This is not a screed against the multitude of state or federal agencies reviewing our various, complex permit applications.  To be sure, the agencies felt the political pressure brought by opponents, which caused them to be cautious and deliberate (perhaps too deliberate) and thus slow moving.  Nor is this to suggest that local governments and sentiment should have no role in siting energy projects that affect their communities.  Of course they should.

The real problem, however, is the total deference given under Oregon law to local land use regulations, even when the local land use decision is so blatantly political, thus creating a legal basis for NIMBY-ism.  In our case, this deference essentially gave veto authority to the Clatsop County Board of Commissioners, which cannot have been the intent of Congress or the state legislature.  Otherwise, how would any infrastructure project of national importance ever be constructed—highways, power plants, transmission lines, fiber optic cables, telephone lines, railroads, bridges, or dams—if locals could block it through a land use resolution?

ALL SPECIES MATTER

Posted on August 25, 2016 by Stephen Herrmann

GONE. The Bramble Cay melomys is no more.  The small rodent, the only mammal endemic to the Great Barrier Reef, is the first documented extinction of a mammal species due to contemporary climate change.  So says Luke Leung, a scientist from the University of Queensland.  “The key factor responsible for the death of the Bramble Cay melomys is almost certainly high tides and surging seawater, which has traveled across the island” destroying the animal's habitat and food source, said Dr. Leung.

Australia’s most isolated mammal had not been seen since 2007.  The report confirming the extinction of the Bramble Cay melomys, however, was not released until June 2016, in order to give scientists time to verify the loss of the species.  Upon release of the report, Dr. Leung said it was the first such extinction due to contemporary climate change.  He said his team “collected data, looked at other research and left no stone unturned” before making that assertion.  Dr. Anthony Barnosky, a professor at the University of California at Berkeley and a leading expert on climate change's effect on the natural world, said the claim seems “right on target to me”.

Both Drs. Leung and Barnosky believe that the climate change responsible for the demise of the melomys is caused by humans.  Whether caused by humans, aided and abetted by humans or merely not abated by humans, the extinction of the Bramble Cay melomys is, sadly, unlikely to be the last species loss to be caused by the effects of contemporary climate change.  How many more?

A SEP in the Right Direction: The Path Toward Win-Win Scenarios

Posted on August 23, 2016 by Scott Fulton

One of the interesting questions that emerged in the strategic planning process for the Environmental Law Institute is whether ELI could offer more support in the development and/or administration of supplemental environmental projects, or “SEPs”. 

Having played a role in the birthing of the original SEP framework in the early 1990s while at EPA, and through my own experience as a practitioner, I am convinced that penalty mitigation through the performance of SEPs can come as close to a win-win as is possible in the enforcement context.  Rather than having penalties, payable as they are only to the U.S. Treasury, lose their site-specific identify and value, SEPs allow diversion of some of those resources to projects geared toward environmental or process improvements that not only achieve compliance, but also provide discrete and measurable environmental benefits. 

Development and implementation of a suitable SEP can at times be challenging.  For these reasons, companies sometimes opt in favor of paying a large penalty rather than a reduced penalty with a SEP.  Meanwhile, the government appears to be keener than ever about utilizing this tool.  EPA’s draft Environmental Justice Plan 2020 Action Agenda, for example, observes that “when these types of projects are feasible, they can play an important role in cases that raise environmental justice concerns. Thus, EPA is setting the goal of increasing the number of SEPs and mitigation projects affecting overburdened communities.” 

So here’s the thought.  Perhaps to lighten the SEP load for defendants and government alike, an entity like ELI could help in the conceptualization and, in appropriate cases, the administration of SEPs.  As it happens, ELI already has experience in this area.  For example, in the context of settlement negotiations between a state environmental regulatory agency and a defendant (I’ll not disclose identities here), ELI was brought in to help shape and then implement a SEP to develop a training module on the regulations at issue in the case.  Under the SEP, in addition to developing the training materials, ELI is to deliver at least two in-person classes to targeted audiences comprised of manufacturers and/or consumers, and to make these informational briefings more broadly available online (via, e.g., webinars, and audio-video recordings suitable for posting, including on the ELI website).

And this SEP is not a one-off.  As a research and education institute, a convener experienced in community outreach and engagement, and a non-partisan presence having affinities with both regulators and the business community, ELI is well-suited to work with companies and their representatives to craft and execute approvable SEPs.  These range from education of stakeholders about regulatory requirements and measures that go beyond compliance; to research, analysis, and publication of information on best practices for compliance and beyond; to monitoring and evaluating the success of on-the-ground SEPs undertaken by other organizations.  Also, it probably goes without saying, but because we’re a non-profit, we can and must do our work on a cost-basis.  In other words, we’re cheap. 

Just a thought to tuck away for the next time a SEP enters your or your client’s equation.

Rolling Thunder?

Posted on August 18, 2016 by Steve McKinney

Today, the U.S. EPA and Department of Justice announced that Harley Davidson has accepted defeat on defeat devices.   The icon of rebellion lost its black luster years ago when bankers, professors, and, of all things, lawyers, became the most noticeable owners and riders of their iron horses.   The Gucci sunglasses betrayed the weekend gangsters to mere citizens who at first trembled at the rumble of Harley motors. 

But now, the historic purveyor of the rawest available form of horsepower has agreed to stop selling popular “super tuners” for “Super Glides”, “Fat Boys”, “Road Kings”, “Electra Glides” and other iconic rides.   The engine tuner kits are guaranteed to raise the rumble another notch or two.   The problem?   Emissions.   What?!  Yes, emissions. 

Well, actually cheating about emissions.  EPA says Harley’s “super tuned” engine emissions are higher than the emissions certified for stock engines.   I’m shocked.  The aftermarket nature of these horsepower enhancers does not matter.   Harley is not supposed to help rabble rousing bikers exceed their emissions allowances, says EPA.

Wow.  Is blaming Harley for breaking the rules within the rules?  Has the last hope of rebellion been reduced from “rolling thunder” to a Vespa’s whine?  I would take my stack of Harley t-shirts out in the backyard tonight for a ceremonial bonfire, but Birmingham has banned open burning until November.

EPA’s Mighty Power

Posted on August 5, 2016 by Eric Fjelstad

In Mingo Logan Coal Company v. EPA, the D.C. Circuit recently upheld EPA’s use of its “veto” authority over an Army Corps of Engineers permit to fill jurisdictional waters for the Spruce Mine in West Virginia.  Section 404(c) of the Clean Water Act provides EPA authority to “deny or restrict the use of any defined area for specification (including the withdrawal of specification).”  This authority was described by the court in Mingo Logan as “a mighty power and its exercise will perhaps inevitably leave a permittee feeling as if the rug has been pulled out from under it.” 

The salient facts in Mingo Logan involved a Section 404 permit for a “mountaintop removal” coal mine.  After a 7-year EIS, the Corps issued the permit in 2006.  EPA expressed reservations with the permit, but communicated to the Corps that it “had no intention of taking [its] Spruce Mine concerns any further from a Section 404 standpoint.”  But times change – and so do administrations – and in 2009 EPA asked the Corps to suspend, revoke, or modify the permit.  After the Corps refused to do so, EPA began the 404(c) process, which led to a final decision in January 2011 to withdraw the specification for two (of three) disposal sites covered under the permit. 

On appeal, Mingo Logan argued that EPA did not consider the company’s sunk reliance costs (a point EPA conceded).  Even though 404(c) does not explicitly denote costs as a factor in EPA’s decision-making, the court stated that an agency “should generally weigh the costs of its action against its benefits.”  Unfortunately for Mingo Logan, the court found that the company had not appropriately raised the issue of reliance costs before EPA or the district court. 

The Mingo Logan decision is a bitter pill for developers, interjecting an additional element of uncertainty into a Section 404 regulatory process that is already challenging and subject to shifting political winds.  As noted at this site, the agencies and courts have struggled with the jurisdictional reach of Section 404 and when a party can challenge the government’s actions.  Key take-aways from Mingo Logan include:

First, 404(c) battles are not for the faint of heart.  EPA has successfully used the authority twelve times since the passage of the CWA.  Every attempt to stop EPA through litigation has ultimately failed. 

Second, Mingo Logan clarifies that a Section 404 permit can be withdrawn years after its issuance.  The decision will serve to undermine confidence in the integrity of the permitting process in the United States. 

Last, Mingo Logan highlights the inherent problems of shared EPA/Corps responsibility.  Defenders of 404(c) will note that this “mighty authority” is rarely used.  Although true, it misses the point that the effects of 404(c) are, in fact, regularly felt by the regulated community.  The ability to say “no” gives EPA significant leverage – behind the scenes -- in the permitting process. 

Query whether we would have a better, and more effective, Section 404 permitting process if all of the authority and responsibility for permitting were vested in a single agency – either the Corps or EPA.

Taking Colin to the Limit One More Time

Posted on August 4, 2016 by Andrea Field

This post started as a piece about a recent Fifth Circuit decision:  Texas v. EPA. In that case, the state of Texas (and others) challenge EPA’s disapproval of Texas’s (and Oklahoma’s) plans for controlling regional haze and EPA’s decision to impose its own haze-control program instead.  To make my drafting process more entertaining (and the task of posting more challenging for our official poster, Colin Gipson-Tansil), I set a goal for myself:  to include within my post at least 25 valid links to others’ posts during the past year.  Fortunately for me, there is almost nothing in Texas v. EPA that doesn’t link to one or more recent posts. 

Jurisdiction and Venue.  Many of the past year’s posts point out problems caused by the failure of the Clean Water Act to state unambiguously which federal court has jurisdiction to hear a specific challenge to an EPA action under that statute. Stoll’s 9/2/2015 post, Glick’s 10/9/2015 post, Horder’s 11/3/2015 post, Perdue’s 2/5/2016 post, and Uram’s 4/5/2016 post.  Texas v. EPA demonstrates that choice-of-court problems also exist under the Clean Air Act’s judicial review provision, §307(b)(1).

Clean Air Act §307(b)(1) – said the Fifth Circuit – is a two-fold provision:  first, it confers jurisdiction on the courts of appeals, and then it delineates whether the appropriate venue for challenges will be the regional circuits (if the challenged action is locally or regionally applicable) or the D.C. Circuit (if the action is nationally applicable).  Believing EPA’s disapproval of its regional haze program to be locally or regionally applicable, Texas filed its challenge in the Fifth Circuit.  EPA moved to dismiss or transfer the case to the D.C. Circuit based on a separate, not-as-well-known prong of §307(b)(1), which directs that a petition for review of what seems like a non-national action may be filed only in the D.C. Circuit if the action is “based on a determination of nationwide scope or effect and if in taking such action [EPA] finds and publishes that such action is based on such a determination.”  After an exhaustive de novo evaluation of that portion of §307(b)(1), the Fifth Circuit determined that because the challenged EPA actions are locally or regionally applicable and because they are not based on any determinations that have nationwide scope or effect, the Fifth Circuit is the appropriate court to hear the case.

But wait.  There are other link-worthy aspects of Texas v. EPA, including the following.

Explanations of Decisions to Stay Challenged Actions.  During the past year, posts have discussed whether and how much a court needs to explain the basis on which it stays a challenged rule pending completion of litigation concerning that rule’s validity. Jaffe’s 2/10/2016 post, Gerrard’s 2/10/2016 post.  If it is a lengthy explanation you seek for when and why a court should stay an EPA action pending completion of litigation, the Fifth Circuit provides that in Texas v. EPA.

Deference.  Other recent posts have addressed when deference to an agency interpretation is – or is not – appropriate. Kovar (12/10/2015); Percival (1/27/2016); Field (2/11/2016); Haynes (2/19/2016); May (6/9/2016); Civins (7/5/2016); Jaffe (8/2/2016).  In Texas, the Fifth Circuit put clear limits on deference, holding that the level of deference owed to an agency’s conclusions is “substantially diminished when the subject matter in question lies beyond the agency’s expertise.”  Thus, while the Fifth Circuit was prepared to defer substantially to EPA’s views on environmental science, it declined to defer to EPA’s views on whether its actions would impair the reliability of the electricity grid.  Since “EPA has no expertise on grid reliability” (that is FERC’s domain), the “deference owed to EPA’s assertions about grid reliability [is] diminished and the agency must support its arguments more thoroughly than in those areas in which it has considerable expertise and knowledge.” 

That limitation on deference could have an impact on the most talked-about case by ACOEL members this past year:  West Virginia v. EPA, in which more than two dozen states and many other parties challenge EPA’s Clean Power Plan. Jaffe’s 9/10/2015 post, Gerrard’s 2/10/2016 postJaffe’s 10/23/2015 post, Jaffe’s 12/9/2015 post, Percival’s 12/16/2015 post, Stoll’s 12/21/2015 post, Perdue’s 2/5/2016 post, Jaffe’s 2/10/2016 post, Field’s 2/11/2016 postSession’s 2/17/2016 post, and Freeman’s 3/2/2016 post. The Fifth Circuit’s limit on deference is the basis of a recent Federal Rules of Appellate Procedure 28(j) letter sent to the D.C. Circuit by the petitioning states in West Virginia.   According to those states, the Fifth Circuit’s decision in Texas v. EPA supports, among other things, the petitioning states’ argument that EPA has failed to show that the Clean Power Plan will not detrimentally affect grid reliability. 

Perhaps the link in which I take the most pride, though, is this last link – to Seth Jaffe’s October 2, 2015 Brief Rant on Cost-Effectiveness Analysis.  In that post, Seth argues that if the purpose of a rule is to improve visibility, EPA should use a measurement of visibility – a deciview (dv) – to assess visibility improvement. Well, in Texas v. EPA, the Fifth Circuit seemed to be heading in the direction of agreeing that in considering the cost of a regional haze program, EPA should use the $/dv metric.  Alas, at the last minute, the court pulled back on a complete endorsement of the $/dv metric:  because the petitioners had a “strong likelihood of establishing other flaws” in EPA’s actions, the court said it did not need to decide whether  EPA “fell short of its obligation to consider the costs of its regulations” by failing to use $/dv metrics.  So, Seth may have to wait a while longer before seeing a court mandate for EPA’s use of $/dv metrics to evaluate visibility improvements.  I, however, achieved my goal of including a record number of links in this post.  

Does It Matter That Air Quality Is Improving?

Posted on August 3, 2016 by David Flannery

The Environmental Protection Agency is expected to announce its final Cross State Air Pollution Rule (CSAPR) update by the end of summer 2016.  But does the update account for the fact that several new regulatory programs that could significantly improve downwind air quality?

In his posts of August 3, 2015 and April 30, 2014, ACOEL Fellow Paul Seals likened the voyage of the interstate transport of air pollutants to “Homer’s Odyssey”.  He promised us all that the D.C. Circuit decision of June 24, 2015, in the case of EME Homer City Generation, L.P., v. EPA, concerning the CSAPR would not end the voyage of interstate transport – and indeed it has not. 

Critical to the development of a rule to address the interstate transport of air pollutants is that the rule not call for emission reductions that are more than necessary to achieve attainment in every downwind state.  EPA’s 2017 deadline for attaining the 2008 ozone National Ambient Air Quality Standard (NAAQS) invites the question of what the ozone air quality is likely to be in 2017.  EPA’s proposed CSAPR Update identified only 4 monitors in the East that it predicted to be in non-attainment with the 2008 ozone NAAQS in 2017. 

EPA’s prediction of 2017 air quality, however, did not take into account several new regulatory programs that are either on-the-books or on-the-way. These programs are certain to continue to improve ozone air quality in the East.  Among the more significant of these programs are:  

-          Pennsylvania Reasonably Available Control Technology (RACT) II

-          Ozone Transport Commission Model Rules

-          Connecticut RACT

-          New York High Energy Demand Day (HEDD) controls; and

-          Connecticut High Energy Demand Day (HEDD) controls

To illustrate the significance of this point, Alpine Geophysics modeled the impact of only a portion of the Pennsylvania RACT II program on ozone concentrations at the nonattainment monitors downwind of Pennsylvania identified by in the CSAPR proposal.  The following results from the Alpine Geophysics report illustrate that even one of these new programs is likely to significantly improve ozone air quality at the critical monitors in the East:

EPA Nonattainment Monitors

Ozone Improvement needed (ppb)

Ozone Improvement Achieved By PA RACT Alone

Connecticut Fairfield (90013007) 1.2 83%
Connecticut Fairfield (90019003) 2.1 48%
Connecticut New Havens (90019003) 1.3 54%

Such improvement - related to only one of the unaddressed programs - raises the question about whether all of the EPA identified nonattainment monitors will, in fact, be in attainment with the 2008 ozone NAAQS when these on-the-books and on-the-way programs are implemented in 2017, even without the CSAPR update. 

The answer to this question, and to the merit of any new transport rule, lies with additional air quality modeling of these programs.  When EPA announces its final rule on the CSAPR update by the end of summer, we will see whether the agency has taken account of these additional programs and see the future direction of this on-going odyssey.  

HOW ACOEL AND THE WHITE HOUSE MAKE (SOME) HISTORY

Posted on August 3, 2016 by Jeff Thaler

Back in the early days of the College, then-incoming President Brad Martin had asked interested Members to work with Lexis Nexis in developing some treatises on a range of topics. Indeed, years later you can go to this link to see how you too can join the very few who purchase some of these treatises, see a photo of Brad, and the list of ACOEL authors. New Council of Environmental Quality guidance on treatment of climate change in federal environmental impact analysis suggests these treatises may have some impact.

I agreed to and with the aid of one of Brad’s former associates, in 2010 authored a treatise entitled “Treatment of Greenhouse Gases Under the National Environmental Policy Act”  . We addressed the then-recently released (February 2010) White House Council on Environmental Quality’s Draft Guidance on consideration of climate change and greenhouse gases in NEPA environmental reviews. In the conclusion I said:

With the prospects for comprehensive, economy-wide regulations on greenhouse gas emissions uncertain, climate change will continue to be addressed under existing environmental laws, including NEPA and its state-level counterparts. It has become increasingly clear that project proponents and lead agencies will be hard-pressed to avoid evaluating greenhouse gas emissions and other climate-related impacts attributable to public and private development projects. But disparate treatment across federal and state jurisdictions has left agencies and developers struggling with when and how to evaluate such impacts in their environmental review documents. Despite a growing body of regulations, case law, and guidance, substantial uncertainty remains regarding the scope, type, and depth of analyses required of climate change effects under NEPA and state analogues.

Little did I know or even suspect that the “disparate treatment” would continue unabated for another 5-plus years.  The Draft Guidance was intended to be finalized in 2011, but the final version would not be released until the waning days of the Obama Administration On August 2, 2016, the CEQ has now issued its 34-page Final Guidance, which expressly requires all Federal agencies to include climate change in their analysis of environmental impacts.

 In sum, the Final Guidance (at 4-6):

“[r]ecommends that agencies quantify a proposed agency action’s projected direct and indirect GHG emissions, taking into account available data and GHG quantification tools that are suitable for the proposed agency action;  Recommends that agencies use projected GHG emissions (to include, where applicable, carbon sequestration implications associated with the proposed agency action) as a proxy for assessing potential climate change effects when preparing a NEPA analysis for a proposed agency action; Recommends that where agencies do not quantify a proposed agency action’s projected GHG emissions because tools, methodologies, or data inputs are not reasonably available to support calculations for a quantitative analysis, agencies include a qualitative analysis in the NEPA document and explain the basis for determining that quantification is not reasonably available; Discusses methods to appropriately analyze reasonably foreseeable direct, indirect, and cumulative GHG emissions and climate effects; Guides the consideration of reasonable alternatives and recommends agencies consider the short- and long-term effects and benefits in the alternatives and mitigation analysis; Advises agencies to use available information when assessing the potential future state of the affected environment in a NEPA analysis, instead of undertaking new research that is, and provides examples of existing sources of scientific information; Counsels agencies to use the information developed during the NEPA review to consider alternatives that would make the actions and affected communities more resilient to the effects of a changing climate; …and Counsels agencies that the “rule of reason” inherent in NEPA and the CEQ Regulations allows agencies to determine, based on their expertise and  experience, how to consider an environmental effect and prepare an analysis based on the available information.”

How many of our LexisNexis recommendations were reflected in the Final Guidance I cannot yet say. But one moral of this tale is that College members may be able to direct a spotlight on needed changes in environmental regulating, even when those wheels of justice grind exceeding slow.

Chevron Deference Lives! EPA’s Boiler Rule (Mostly) Survives Review

Posted on August 2, 2016 by Seth Jaffe

On Friday, the D.C. Circuit largely upheld EPA’s Boiler MACT rule. boiler-mactThe industry challenges were a complete washout.  The environmental petitioners won one significant victory and a number of smaller ones.

The environmental petitioners’ one significant victory is important.  EPA included within relevant subcategories any source that burns a fuel containing at least 10% of the “subcategory-defining fuel.”  However, for defining MACT, EPA included only those sources that burn fuel containing at 90% of the subcategory-defining fuel for existing sources, and 100% for new sources.  The Court rejected this approach.

"The CAA, however, demands that source subcategories take the bitter with the sweet. Section 7412 mandates, without ambiguity, that the EPA set the MACT floor at the level achieved by the best performing source, or the average of the best performing sources, in a subcategory. It thus follows that if the EPA includes a source in a subcategory, it must take into account that source’s emissions levels in setting the MACT floor."

Which brings me to my big take-away from this decision.  Chevron lives.  By my count, The Court cited Chevron 30 times.  Chevron pervades the decision.  Even in the one big issue that EPA lost, the Court’s decision was based not on a rejection of EPA’s interpretation of an ambiguous provision under step 2 of Chevron, but on a plain meaning interpretation of § 112.  EPA defined what a source is, but it then refused to calculate MACT based upon the performance of all of the sources in a given subcategory.  The statute simply did not allow EPA that leeway.

Other than EPA’s attempt to avoid taking “the bitter with the sweet”, however, the Court’s deference – by three Republican appointees – to EPA’s technical decisions was notable.  Not every case is the Clean Power Plan.  Where EPA is not really pushing the boundaries, I don’t see the Supreme Court weakening Chevron any time soon.

The Data Don’t Lie: Has MNA Science Outpaced Site Decision-Making?

Posted on July 26, 2016 by Charles Efflandt

The importance of a thorough technical evaluation of monitored natural attenuation (MNA) at chlorinated solvent and other groundwater-contamination sites cannot be overestimated. Regulatory acceptance of MNA as a preferred remedial alternative can save millions of dollars in response costs compared to common presumptive remedies. Because “active” remediation technologies rarely achieve complete contaminant treatment or removal, MNA is an implicit, if not specifically evaluated, component of most groundwater remedial actions. A proposal to use MNA as the primary cleanup mechanism, however, is often met with resistance from regulators, notwithstanding years of supportive data.  Such resistance may be attributable to antiquated agency policies or, perhaps, an inadequate evaluation of evolving MNA science.

The use of MNA at groundwater sites has typically required a showing of a stable or shrinking plume, source control, sustainable natural attenuation conditions, and acceptable risk to health and the environment. Today, mathematical and modeling tools can systematically establish data trends demonstrating that remedial action objectives will be achieved through natural attenuation in a reasonable time frame.

Unfortunately, even if confronted with irrefutable data, many state regulators will reject meaningful consideration of MNA unless the attenuation mechanism can be pigeon-holed into  policies that focus on the demonstration and scoring of anaerobic biodegradation conditions at a site.  That is because after almost two decades, EPA’s 1998 Technical Protocol for Evaluating Natural Attenuation of Chlorinated Solvents in Ground Water remains the framework for MNA evaluations and decision-making in many states. Because the 1998 Protocol presumed that the primary effective mechanism for natural attenuation was anaerobic biodegradation, the Protocol has unduly restricted state policies for screening and approval of MNA remedial action.

Numerous studies since the publication of  the 1998 Protocol, however,  have shown that a viable MNA remedial strategy can be supported by attenuation mechanisms other than anaerobic biodegradation These studies have documented other viable contaminant-destructive attenuation mechanisms and evaluation tools, such as aerobic cometabolism enzyme degradation, magnetic susceptibility, compound specific isotope analysis, and improved sampling and modeling techniques. Greater awareness of these scientific developments by regulators and environmental professionals will result in MNA being an increasingly important remedial tool at many groundwater sites.

We have learned the hard way that it’s much more difficult and expensive to clean up sites using default remedies than first thought. Fortunately, it is becoming increasingly apparent that nature has an ability to degrade various chemicals more quickly and effectively than previously believed.   Regulatory acceptance should not, and need not, include unreasonable technical hurdles, such as imposing  attenuation “causation” requirements that are neither feasible nor necessary to support what cannot be disputed. That a proposed MNA remedy does not neatly fit into the traditional anaerobic degradation box, and cannot with precision be attributed to one or more alternative degradation mechanisms potentially active at a site should not be determinative. At the end of the day, the data don’t lie. The MNA determination ought to begin with, and remain focused on, the empirical data and data trends.

FINDING LEGAL PATHWAYS TO DEEP DECARBONIZATION IN THE UNITED STATES

Posted on July 21, 2016 by John Dernbach

On December 12, 2015, in Paris, France, the parties to the U.N. Framework Convention on Climate Change—a total of 196 countries—unanimously agreed to a goal of net zero greenhouse gas emissions by the second half of this century.  For the United States, the technical and logistical challenge of achieving the goal of the Paris Agreement (as it is called) is enormous, but so is the legal challenge.

The U.S. short-term emissions reduction objective, stated in a submission made in the run-up to the Paris conference, is “to achieve an economy-wide target of reducing its greenhouse gas emissions by 26%–28% below its 2005 level in 2025.”  This objective, the U.S. says, “is consistent with a straight line emission reduction pathway from 2020 to deep, economy-wide emission reductions of 80% or more by 2050.”   Achieving the short-term goal depends on the outcome of the presidential election as well as litigation involving the Clean Power Plan.  And there was, until recently, no roadmap for deep U.S. reductions by 2050. 

The absence of long-term analysis, in the U.S. and other countries, is being filled by the Deep Decarbonization Pathways Project, which is led by the Sustainable Development Solutions Network and the Institute for Sustainable Development and International Relations.  It is based on the work of research teams in 16 countries that are responsible for 74 percent of the world’s greenhouse gas emissions--Australia, Brazil, Canada, China, France, Germany India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, South Korea, the United Kingdom, and the United States.  DDPP says in a report synthesizing the findings of the project to date that most of these countries “had never developed pathways consistent with a global 2°C limit, nor were they actively considering this question.”   (The purpose of the Climate Change Convention is to keep the increase in global temperatures from human-caused greenhouse gas emissions below a “dangerous” level.  That level is widely regarded as 2°C, or 3.6 °F, above pre-industrial levels, although the Paris Agreement seeks to keep the increase “well below” that level.  The temperature increase to date is already about 0.9 °C above 1880 levels, when temperatures were first recorded.)

DDPP has conducted a technical analysis and policy analysis of pathways to deep decarbonization for the United States.  These reports, prepared by E3 (an energy consulting firm), the Lawrence Berkeley National Laboratory, and the Pacific Northwest National Laboratory, appear to be the most detailed studies of how to achieve deep reductions in U.S. greenhouse gas emissions by 2050.  

Perhaps the DDPP’s most important finding “is that it is technically feasible for the U.S. to reduce [carbon dioxide] emissions from fossil fuel combustion” by 85% from 1990 levels by 2050, which is “an order of magnitude decrease in per capita emissions compared to 2010.”  If the U.S. did that, it could reduce its overall greenhouse gas emissions by 80% below 1990 levels by 2050.  

Enormous changes would be required in the U.S. energy system to make those reductions happen.  Because it is difficult to decarbonize gasoline and liquid fuels, the researchers said, meeting the 2050 objective would require almost complete decarbonization of electricity and, among other things, switching a “large share” of end uses that require gasoline and liquid fuels over to electricity (such as electric cars).  It would also be necessary to produce fuel from electricity itself, they said, citing the production of hydrogen from hydrolysis as an example. 

Decarbonizing electricity and producing fuel from electricity itself would double electricity generation but reduce its carbon intensity to 3% to 10% of current levels, requiring a vast increase in either renewable energy (as much as “2,500 gigawatts (GW) of wind and solar generation (30 times present capacity))” or carbon capture and sequestration.  The average fuel economy for light duty vehicles such as cars would need to be over 100 miles per gallon, and these vehicles would need to be fueled almost entirely by electricity and hydrogen.  

The challenge of translating these technical and policy pathways into a workable legal framework is considerable.  Assuming, for example, that the U.S. can achieve 54.5 miles per gallon as a fleet-wide average for new vehicles by 2025, as the current Corporate Average Fuel Economy standard requires, how does the U.S. achieve a fleet-wide average of more than 100 miles per gallon for all vehicles by 2050? As DDPP explains, “[t]his would require the deployment of roughly 300 million alternative fuel vehicles by 2050.”  A similar conundrum exists in reliance on renewable energy sources: what legal changes are needed to guide the development of the grid so that it can continue to be reliable while it accommodates a vast increase in intermittent electricity sources such as solar and wind energy?

Michael Gerrard, who directs the Sabin Center for Climate Change Law at Columbia Law School, and I have begun work on an edited volume that will identify and analyze a wide variety of legal pathways to decarbonization in the United States, based on these reports.  We have assembled an excellent team of legal scholars and practitioners and are aiming for publication in 2017.  We hope to inspire similar efforts in other countries.  

An essential part of the decarbonization challenge is proposing, analyzing, and comparing various legal decarbonization pathways in each individual country, including the U.S.  In the face of a daunting challenge, there exists a real possibility that lawyers can help improve human quality of life throughout the world by facilitating the creation of a legal framework that accommodates zero-carbon development.

The Arctic: A Region of Future Conflict or Cooperation

Posted on July 20, 2016 by William M. Eichbaum

Among the most dramatic impacts of global warming is Arctic change.  On the one hand, we are witnessing the unprecedented melting of ice and snow, loss of habitat for globally unique species, and threats to centuries-old patterns of human livelihood.   On the other, as the Arctic becomes more accessible, there is a rush to satisfy the global thirst for natural resources creating yet greater environmental jeopardy for the region.

The popular press has raised the specter of possible conflict among nations as this newest wave of resource exploitation accelerates.  These concerns have been exacerbated as tensions have increased between NATO countries and Russia over Ukraine, among other geo-political issues.  In fact, there are several examples of Arctic countries increasing military presence in their Arctic territories.

However, from my vantage point, the Arctic is unlikely to erupt into a new zone of conflict as nations pursue resource development.  That’s because, there have been few instances of dispute over actual territory, with the most significant ones involving only Canada, the United States, and Denmark.  While Russian claims regarding the Arctic Ocean seabed are much discussed in the media, other “Arctic nations” are making similar claims.  These claims are all subject to resolution pursuant to the United Nations Convention on the Law of the Sea.  (To some there is irony in the fact that United States’ failure to accede to this Convention means that the United States may be unable to perfect its Arctic seabed claims.

Despite increased accessibility, exploiting natural resources in the Arctic region will continue to be dangerous and difficult.   Governmental cooperation in governance of the Arctic region will be essential to provide the platform for Arctic economic activity to advance in an environmental, social, and economically sustainable manner

Since 1996, The Arctic Council, consisting of the eight Arctic countries, permanent participants representing indigenous people, and observers, has been the focal point for developing the science necessary to meet this challenge.  Under the leadership of the US Government, currently the Chair of the Council, a Task Force is considering stronger measures to assure that the recommendations of the Council are implemented.  In a recent paper published by The Polar Record I addressed issues key to strengthening Arctic governance, especially in the marine environment. http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=10379682&fulltextType=RC&fileId=S0032247416000462 At this juncture, Arctic countries, including Russia, are positively exploring options for achieving such cooperation.

This summer a tourist vessel with over a thousand passengers is crossing the Canadian Arctic, through seas where a ship one-tenth that size recently ran aground, requiring evacuation of all passengers and crew.   While Shell aborted future hydrocarbon exploration in the Bering and Chukchi Seas following numerous accidents and missteps in the summer of 2012, robust development continues elsewhere in the Arctic.  And distant water fleets are moving ever northward in pursuit of fish.  Without strong mechanisms for cooperation on governance of the region by the Arctic countries, these and other activities pose meaningful environmental threats to the Arctic beyond the climate change narrative.    With strong cooperation, however, they can be made to be sustainable not just for the natural resources of the region but also for the people of the Arctic. 

Is America Already Faltering in its Implementation of the 2015 Paris Climate Change Agreement?

Posted on July 19, 2016 by Dan Esty

Twenty-five years ago, as a young EPA official, I was part of the US government team that negotiated the Framework Convention on Climate Change.  In the final weeks running up to the 1992 Rio Earth Summit at which the new climate change treaty was to be presented for signature, I remember being taken aside by the famous Canadian environmental leader, Maurice Strong, who was the Secretary General of that 1992 Earth Summit.  He warned about the limits of international agreements.  Specifically, he urged me to be aware that when hundreds of Presidents, Prime Ministers, and other world leaders gather – as was to be the case at Rio – only two outcomes are possible: success and real success.  For nearly two decades after the 1992 treaty came into effect, we had claims of “success” but little real progress on reducing greenhouse gas emissions.

In Paris last December, the world community came together with great fanfare to conclude a new climate change agreement. With its focus on “solutions,” commitment to broader public engagement (going beyond national governments to focus on actions by cities, states, companies, and community groups), creative climate change finance, and metrics to track progress, the 2015 Paris Accord offers a foundation for real success. 

But it is not clear that the requisite follow-through will occur.  In the United States, President Obama’s Clean Power Plan – the central mechanism to drive progress toward a clean energy future – is on hold pending court review.  And there already seems to be some loss of momentum in developing the action plans needed to deliver the on-the-ground changes in behavior in many sectors that will be required to change our nation’s energy trajectory. 

At the core of the limitations in environmental law in the 20th Century was a failure to move from the intentions expressed in statutes, regulations, and international agreements to action.  Words – even ones cast as law – do not alone make change happen.  A concerted focus on implementation is required for real success. 

But significant investments required to deliver a clean energy future will not be forthcoming – particularly in the critical corporate arena -- as long as America’s commitment to decarbonization is clouded by legal and political uncertainties.  While some business sectors, notably the investment world, are moving ahead with actions to address climate change, broader momentum toward a clean energy future will not be fully restored until after the DC Circuit Court’s decision on the Clean Power Plan this Fall and the November election results.

Whither WOTUS?

Posted on July 18, 2016 by Rick Glick

In June 2015, the Environmental Protection Agency and the Army Corps of Engineers released a rule to define “waters of the United States,” affectionately referred to as WOTUS.  This definition goes to the scope of federal jurisdiction over wetlands and other waters that are not obviously free flowing and navigable.  An in-depth analysis of the rule can be found here

The rule hasn’t exactly played to rave reviews.  It attracted over one million comments.  Many complained the rule represents gross government overreach.  Others criticize the rule for not being protective enough.  The rule is also the subject of multiple challenges around the country, some filed before the rule was officially released.  The lead case is now pending before the United States Court of Appeals for the Sixth Circuit.  The Court of Appeals accepted original jurisdiction over a challenge to the rule based, in part, on the failure of the rule’s “distance limitations” to comport with good science, and on the inconsistency of the final rule with the proposed rule.  The Court of Appeals thought enough of petitioners’ arguments that it stayed implementation of the new rule.

On this first anniversary of the rule, we thought a brief summary of the controversies surrounding the rule and current status might be helpful.  The attached article, newly published in The Water Report, attempts to do just that.  Many thanks to Diego Atencio, a third year law student at the University of Oregon and a summer associate at DWT, for his assistance in writing the article.

The Toxic Substances Control Act Amendments May Do Little to Relieve California Headaches for Businesses

Posted on July 15, 2016 by Robert Falk

Business groups largely supported the Toxic Substances Control Act (TSCA) Amendments recently signed into law by President Obama to address concerns about the emergence of varying state-by-state requirements regulating the chemicals used in consumer products.  But for those wishing to avail themselves of California’s vast and lucrative marketplace, the TSCA Amendments and EPA’s June 29, 2016 plan to begin implementing them may prove to do little to alleviate business’s headaches.  While the TSCA Amendments include a number of permanent and temporary federal preemption provisions, they are riddled with holes that may allow California’s activist requirements and plaintiffs’ lawyers to proceed largely unimpeded.

Potential Impact of the TSCA Amendments on California’s Safer Consumer Products (“Green Chemistry”) Program

The Amendment’s preemption provisions could halt or constrain the implementation of the California Safer Consumer Products (SCP) program.  The statutory basis for California’s so-called “Green Chemistry Initiative” was enacted just after August 31, 2003 and its initial requirements for Priority Product-chemical pairings were not finalized prior to April 22, 2016 so at least certain types of requirements arising from the SCP program may be subject to TSCA preemption. 

But whether these preemption provisions will have a meaningful effect on the future of the SCP program remains to be seen.  For example, as long as EPA has not taken any regulatory action on a chemical, California will retain full authority to regulate a product that contains it.  Moreover, if the use of the chemical does not fall under EPA’s TSCA jurisdiction, the SCP program’s actions concerning it will never be preempted.  (For instance, TSCA does not cover personal care products or beauty products.)

Indeed, California’s requirement that manufacturers of products designated as Priority Products provide the state with data and conduct an Alternatives Analysis pursuant to the SCP program appears to be left unaltered by the new TSCA preemption provisions.  Likewise certain forms of regulatory responses to an Alternatives Analysis on a Priority Product, such as mandating certain warnings or other information disclosure requirements, may well be found to survive TSCA preemption. 

Potential Impact of the TSCA Amendments on California’s Proposition 65

Proposition 65 requires businesses to provide a “clear and reasonable” warning before knowingly and intentionally exposing a Californian to any detectable amount of a listed chemical unless the business can prove that the exposure level does not pose a significant risk of cancer or is at least 1,000 times below the level which causes no observable reproductive effect.  Public prosecutors are meant to be the primary enforcers of Proposition 65, but the statute is most loathed because any individual claiming to act in the public interest also has the ability to enforce it by filing “bounty hunter” lawsuits against manufacturers, distributors, and retailers of consumer products. 

California’s federal legislators, including retiring U.S. Senator Barbara Boxer, took pains to ensure that Proposition 65, which was enacted in 1986, remained fully shielded from TSCA preemption.  Thus, California can continue to update its list of Proposition 65 chemicals “known” to that State to cause cancer and reproductive harm regardless of the outcome of EPA’s TSCA evaluation on the same chemical.  Proposition 65 bounty-hunter lawsuits can also continue to be filed concerning even the most de minimis exposures to chemicals that EPA determines are safe. 

That said, it still remains for the courts presiding over Proposition 65 cases to determine if EPA’s risk and safety determinations made pursuant to TSCA will have a significant evidentiary role in a business’s defense of a Proposition 65 claim on grounds other than preemption.  California judges may also take EPA’s TSCA determinations about a chemical into account when it comes to assessing (or reducing) Proposition 65 penalties.  And, perhaps at best, TSCA’s preemption provisions may also help convince courts that it is inappropriate to allow plaintiffs to continue to use Proposition 65 to obtain chemical “reformulation” of products made for a national or international market instead of just requiring Proposition 65 warnings for them when offered for sale in California.

Wyoming Prohibits Trespassing For Resource Data Collection: Might Massachusetts Follow?

Posted on July 14, 2016 by Seth Jaffe

In a fascinating case, Judge Scott Skavdahl (who recently struck down BLM’s fracking regulations) last week dismissed challenges from NRDC and PETA, among others, to a Wyoming law that prohibits trespassing on private land for the purpose of “collecting resource data”.

An image of a "No Trespassing" sign on a tree.

In addition to subjecting violators to civil and criminal enforcement, the law also prohibits use of any data collected as a result of the trespass for any purpose other than enforcement of the statute.

The plaintiffs alleged that the statutes violated the free speech of “whistleblowers” and “citizen scientists”.  Judge Skavdahl wasn’t having any of it.

"Plaintiffs’ First Amendment right to create speech does not carry with it an exemption from other principles of law, or the legal rights of others.  Plaintiffs’ desire to access certain information, no matter how important or sacrosanct they believe the information to be, does not compel a private landowner to yield his property rights and right to privacy."

Plaintiffs argued that, in Wyoming, it is often difficult to determine where public lands end and private lands begin.  The Judge was not sympathetic here, either.

"The ability to pinpoint and record the location of alleged environmental violations is essential to Plaintiffs’ mission and goals. Coincidentally, the same information would be essential to a successful prosecution or civil action brought under these statutes."

The Court also rejected the equal protection claim.  Since Judge Skavdahl had concluded that there was no First Amendment violation, the equal protection claim was not subject to strict scrutiny.  The Court found a rational basis in discouraging trespassing.

Finally, the Judge addressed the issue most significant from my point of view:  May information gathered as a result of a trespass be used in enforcement proceedings?  The statute requires “expungement” of such data.  The Court held that the Supreme Court has largely rejected facial challenges to such provisions.  Since there was no as-applied challenge here, the Court declined to consider the expungement provisions.

Why does this matter?  Because, even in the liberal Commonwealth of Massachusetts, property owners have been concerned that “citizen scientists” may trespass in order to gather endangered species data from private property.  Indeed, there have been occasions where such citizen scientists have found endangered species on private property where the species had not previously been mapped.  Cynical observers have often wondered whether the citizen scientists might have had something to do with the presence of the endangered species on the property!

I don’t really expect Massachusetts to follow Wyoming’s lead – but this is an issue that is much broader than some wild-eyed property rights activists in Wyoming.

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

Posted on July 13, 2016 by Jeff Thaler

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

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

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

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

What is in a reputation?

Posted on July 12, 2016 by Lee DeHihns

Events this year have made me wonder how important a corporation’s reputation is to its officers, customers and shareholders.  One example is Exxon’s climate travails with the New York Attorney General and other state AGs along with their much publicized climate laced 2016 annual shareholder meeting in May.

In the Harvard Business Review on April 3, 2015, Allen Freed and Dave Ulrich stated “in recent years, investors have learned that defining the market value of a firm cannot just be based on finances. GAAP and FASB standards require financial reporting of earnings, cash flow, and profitability – all measures that investors have traditionally examined. But recently, these financial outcomes have been found to predict only about 50% of a firm’s market value.”

Their conclusion is bolstered by another Harvard Business Review article on April 28, 2010 when Ron Ashkenas said “nobody knows how much a reputation is really worth, although many would say that it’s priceless. The one thing we do know, however, is that once a reputation is tarnished, it takes a lot of hard work, and a long period of time, to regain its luster.”

The Telegraph in January, 2016 said that “the total value of corporate reputation for all UK-listed companies topped £1.7 trillion at the close of last year. The recent emissions scandal wiped some €20bn (£15bn) off the value of Volkswagen in the weeks following the revelations.”  How much more loss will come from the June 28, 2016 Volkswagen AG’s $14.7 billion settlement with the U.S. government and consumers.  Deputy Attorney General Sally Yates said the settlement is only a “significant first step” toward holding Volkswagen accountable for its actions.  “Let me be clear: It is by no means the last step.”  Civil lawsuits and criminal investigations are still pending.

Fortune Magazine March 1, 2016 in a story headlined “Bitter Sweets” said that “for a decade and a half, the big chocolate makers have promised to end child labor in their industry—and have spent tens of millions of dollars in the effort. But as of the latest estimate, 2.1 million West African children still do the dangerous and physically taxing work of harvesting cocoa. What will it take to fix the problem?”

The main company engaged in the cocoa industry is Nestlé. Fortune went on to state “the multinational chocolate makers are heavily dependent on West Africa. More than 70% of the world’s cocoa is grown in the region, and the vast majority of that supply comes from two countries: Ivory Coast and Ghana, which together produce 60% of the global total. The two nations have a combined GDP of around $73 billion, according to the World Bank—or significantly less than Nestlé’s $100 billion in sales last year. The price of cocoa surged 13% in 2015 even as prices for most raw materials were dropping. Meanwhile the average farmer in each country still lives well below the international poverty line.”

In its defense Nestlé’s website states “Nestlé opposes all forms of child exploitation. We are committed to preventing and eliminating child labour in our supply chain, working with stakeholders to develop and implement meaningful solutions. We conduct comprehensive monitoring, implement remediation activities and provide targeted support to local communities.”

How one gauges and/or measures reputation is uncertain, but eating prunes and driving an electric vehicle would seem like a good first step.

LNG Global Impacts Not FERC’s Problem

Posted on July 11, 2016 by Rick Glick

In companion cases, on June 28 the DC Circuit Court of Appeals held that the Federal Energy Regulatory Commission, in its environmental impacts analysis of two Gulf Coast LNG terminals, need not assess the potential for increased natural gas extraction and use, or market effects.  The first case deals with the Freeport project in Texas, and the second the Sabine Pass project in Louisiana; the court considered these cases in parallel with each other, and the Sabine Pass case follows the reasoning in the Freeport case.

 The Sierra Club and other national NGOs have attacked LNG facilities (1) for their potential to cause an increase in fracking to extract natural gas and the attendant emission of greenhouse gases, and (2) for increasing the use of U.S.- produced natural gas in world markets, which they assert will drive up the price of natural gas domestically, thus making coal more competitive and its use more prevalent in the U.S.  On this basis the Freeport and Sabine Pass plaintiffs argued that FERC’s failure to consider these potential effects violates the National Environmental Policy Act.  The court disagreed, finding that these effects are too attenuated for FERC to have to evaluate. 

Central to the cases is the fact that the Natural Gas Act confers exclusive authority over the export of natural gas on the Department of Energy, whereas FERC is only responsible for the siting of LNG facilities.  The court reasoned that FERC’s approval of LNG facilities are not the proximate cause of gas exports, which only DOE can approve.  Therefore, FERC need not consider environmental impacts related to market forces that could increase domestic production of gas and the use of gas outside of the United States.

 These same projects face challenges brought by the same NGOs against DOE in which the issue is whether DOE complied with NEPA in authorizing exports of LNG.  The Freeport and Sabine Pass courts “express no opinion” on the merits of the DOE cases.  Still, it seems that the relationship between export approvals and operation of global gas markets is at least as attenuated as FERC’s authorization to construct facilities.  My sense is that DOE will likely prevail there as well.

LEAKS And PUMPS And TANKS, Oh My!!!

Posted on July 8, 2016 by Karen Crawford

In May 2016, EPA finalized updates to its New Source Performance Standards (NSPS) for the oil and gas industry which amended 40 CFR Part 60, Subpart OOOO and added new requirements (Subpart OOOOa) to those established for Volatile Organic Compounds (VOCs) and sulfur dioxide (SO2) established for this industry sector in 2012.  Importantly, the new requirements address reductions of greenhouse gas (GHGs) emissions, specifically methane.  In its Executive Summary, EPA discussed the efforts by the agency to “complement” and “improve” the existing rules issued in 2012, stressing the agency’s efforts to engage states and stakeholders and solicit comments prior to its 2015 proposal or the rule.  EPA also stressed it worked closely with the Bureau of Land Management to avoid conflicts and evaluated existing state and local programs to attempt to limit conflicts, where possible.

After promulgation of both the 2012 rule and 2013 amendments, the agency received petitions for reconsideration raising numerous issues, including the regulation of GHGs.  EPA has addressed some of petitioners’ issues in 2015 amendments addressing storage vessels as well as in this rule, adding standards for methane and addressing storage vessel control device monitoring and testing; initial compliance requirements for bypass devices that divert emissions from control devices; recordkeeping requirements for repair logs for control devices which fail a visible emissions test, clarification of the due date for the initial annual report; emergency flare exemptions from routine compliance tests; leak detection and reporting for open-ended valves or lines; compliance period for leak detection and repair (LDAR) for newly affected process units; exemption to notification requirement for reconstruction of most types of facilities; and disposal of carbon from control devices.   However, in a footnote, EPA makes clear it intends to complete its reconsideration process in a subsequent notice.

One interesting aspect of the 2016 rule publication is the extensive discussion of how the 1979 source category listing, “crude oil and natural gas production” is defined.  The agency takes great pains to justify its broad authority over the industry to include not only production, but also processing, transmission and storage equipment.  The EPA concludes that its category listing need not be revised to support the additions and amendments of this rule (even though it does clarify some wording), and sets out its justification for including the entire sector in its 2009 endangerment finding relating to GHGs.

EPA concluded that the Best System for Emissions Reduction (BSER) is the same for GHGs as it is for VOCs, so there are no changes required for equipment that was covered by the 2012 rule.  Newly regulated sources covered by the 2016 rule include: heretofore unregulated hydraulically fractured oil well completions, pneumatic pumps, fugitive emissions from well sites and compressor stations; sources regulated under the 2012 regulation for VOCs for which GHGs are now also regulated (hydraulically fractured gas well completions and equipment leaks at natural gas processing plants); and certain equipment that is used across the source category for which subpart OOOO regulates emissions of VOCs from only a subset (pneumatic controllers, centrifugal compressors and reciprocating compressors), with the exception of compressors located at well sites.

In addition to emission reductions, LDAR utilizing optical gas imaging semi-annually is required for well sites and compressor stations. (Method 21 at a repair threshold of 500 ppm may be used.)  Initial monitoring surveys must take place by June 3, 2017 or within 60 days of the startup of production, whichever is later.  Repairs must be made within 30 days and a resurvey is required within 30 days of repair. Also, a monitoring plan that covers collection of fugitive emissions components is required to be developed and implemented for well sites and compressor stations. At natural gas processing plants, equipment leaks of methane (GHGs) are subject to the same requirements as those for VOCs.  The compliance period begins on November 30, 2016.

And, the rule embraces “next generation” electronic reporting via EPA’s CDX, for enhanced accessibility and transparency to the public, as soon as the forms and systems are available.  Professional engineers are required to provide certifications of technical infeasibility of connecting a pneumatic pump to an existing control device and to design closed vent systems.

Finally, there is a complicated discussion of EPA’s interpretation of UARG v. EPA, which merely results in EPA concluding that the rule should not affect applicability of Title V permit or PSD/NSR applicability determinations for “anyway” sources, even though, if not otherwise required to obtain and comply with a Title V permit, emissions of GHGs (methane) alone will not subject a source to Title V permit requirements.

Haiti on the Frontiers of Environmental Law

Posted on July 7, 2016 by Tracy Hester

Jeff Thaler’s and Jim May’s blog posts about our recent ACOEL delegation visit to Haiti captured the vibrant spirit of Haiti’s legal community and its enthusiasm to build new programs in environmental law. Haiti offered a different insight as well:  dire environmental conditions have spurred strikingly innovative and creative legal thinking.  In one sense, Haiti’s challenges are a frontier that can test and forge new environmental laws and concepts.

*****

After our delegation visit finished, my wife and I visited an abandoned United Nations outpost on a dirt road over an hour north from Port-Au-Prince.  Hidden behind encroaching trees and weeds, a blue-trimmed UN guard tower watched over empty concrete foundations and open gates behind a decaying chain-link fence and tangled razor wire.

This fading post is a flashpoint in history.  In 2013, sewage from the UN outpost’s battalion of Nepalese peacekeepers contaminated a nearby tributary and led to an outbreak of cholera that has killed over 9,000 people and sickened over 800,000 so far.  The United Nations has rejected petitions that it should fund and establish a comprehensive sanitation, medical treatment and potable water program to halt the epidemic.  In response, a group of Haitians and Haitian-Americans filed a class action lawsuit in the federal Southern District of New York court for damages and injunctive relief.

The United Nations stoutly rejected any argument that the U.S. court has jurisdiction over its operations.  The United States vigorously urged the trial court to dismiss the lawsuit, and the court agreed on January 9, 2015 by denying jurisdiction.  The district court found that the UN had not expressly waived its immunity under the Convention on Privileges and Immunities of the United Nations of 1946 (despite the UN’s failure to satisfy other important obligations under the Convention).

The case took a dramatic turn when the Second Circuit decided to hold oral argument on the Haitians’ appeal of the trial court’s dismissal.  In a packed courthouse in Manhattan on March 1, 2016, the three-judge panel seemed sympathetic to the claims of Haitians who will likely have no possible relief or compensation if the court upholds the United States’ assertions of strong immunity on behalf of the UN.  The court will probably issue its decision in the next few months.

If the court finds that the UN lacks absolute immunity for environmental or health damages caused by its actions, the decision could have a sweeping impact on the UN’s liability for other humanitarian actions that cause environmental harm.  The UN plays a central role in multinational efforts to fight climate change, protect oceanic resources, and preserve endangered species and ecosystems, and the spectre of liability could hamper its activities.  Depending on the scope of the court’s ruling, this case might also affect the liability of other multinational organizations whose actions to protect the environment unexpectedly injure human health or natural resources.

 

Haiti’s enormous environmental and public health challenges sparked this important case, and the legal creativity guiding the lawsuit arose there as well.  Our delegation had the opportunity to meet Me. Mario Joseph, who directs the L'Association Haïtienne de Droit de l'Environnement which filed the lawsuit (along with several other groups).  As lead counsel he guides the team of attorneys handling the case, and he strongly believes that legal creativity and ingenuity can overcome the procedural and jurisdictional barriers to reach a just environmental outcome.

If it desires, ACOEL can help monitor and, where appropriate, contribute to the development of these types of innovative environmental legal approaches in Haiti.  The Second Circuit’s ultimate decision may offer an opportunity to discuss these issues with the Haitian environmental bar and with other lawyers who want to help build Haiti’s environmental laws and enforcement options. 

In the meantime, change still comes slowly.  When we visited the abandoned outpost, families had moved into the vacant buildings and children were bathing in a nearby stream – directly by the unused outfall pipe where the UN peacekeepers had previously discharged their sewage wastes.  Whatever decisions come from U.S. courts, Haiti will have a pressing need for innovative and effective environmental laws for many years ahead.

A Reformed TSCA: Let the Questions Begin

Posted on July 7, 2016 by Lynn L. Bergeson

Toxic Substances Control Act (TSCA) legal practitioners and every American interested in chemical safety celebrated President Obama’s signature Wednesday, June 22, 2016, of H.R. 2576, the Frank R. Lautenberg Chemical Safety for the 21st Century Act.  The bill extensively amends TSCA, the federal chemical management law, and President Obama’s signature made the Act immediately effective.  The amendments go a long and comforting way in fixing what was wrong with TSCA, and empower the U.S. Environmental Protection Agency (EPA) to identify and manage chemical risks more efficiently and effectively.

EPA wasted no time in beginning the challenging task of implementing the new law, and on June 22, rolled out a web page on the new law.  EPA’s web page includes links for users to access:  the text of the new law; answers to frequently asked questions (FAQ) on the new law; a brief summary of the provisions found in the new law; and Administrator McCarthy’s blog post -- TSCA Reform:  A Bipartisan Milestone to Protect Our Health from Dangerous Chemicals. 

On the whole, the new TSCA is vastly improved and, if implemented smartly, will make good on fulfilling the promise to make TSCA a truly muscular law that ensures chemical safety and public health.  While there are many, many implications of the law’s enactment, its most immediate effect will be on the new chemicals review process.  Under old TSCA, entities wishing to bring a new chemical or significant new use of an existing chemical (new chemical) to market submitted a notification and, if the 90-day review period lapsed without notice from EPA, commercialization could occur as permitted under the conditions of the notification.  Speed to market and predictability are critical to innovation and business equilibrium.  Under new TSCA, EPA must make one of three affirmative determinations:  (1) that the new chemical presents an unreasonable risk; (2) that there is insufficient information on the new chemical to decide, or, in the absence of sufficient information, that it may present unreasonable risk, or that the substance is produced in substantial qualities and can be expected to enter the environment or pose substantial exposure risks; or (3) that the new chemical is not likely to present an unreasonable risk.

For new chemicals in the review process on June 22, TSCA Section 26 gives EPA discretion to apply old TSCA to pending notifications not yet “dropped” from EPA review.  Importantly, EPA has interpreted this provision and notes on its new webpage “[f]or companies that submitted premanufacture notices (PMNs) prior to enactment and which are currently undergoing review, the new law effectively resets the 90-day review period.  The agency will make every effort to complete its review and make a determination within the remaining time under the original deadline.  EPA will be making additional information available on new chemical reviews in the very near future.”

EPA has the discretion to proceed in this way, but a preferred interpretation would have been to continue to apply the old TSCA provisions to pending cases for some time period into the future.  While clarity is welcomed, the more flexible alternative reading would have allowed for a smoother and more measured transition.  The take away here is that pending notifications will have their 90-day clocks reset (it is not entirely clear from what date the clock restarts), and submitters will need to recalibrate their delayed commercialization trajectory accordingly.  More information is available in the Bergeson & Campbell, P.C. (B&C®) memorandum TSCA Reform: An Analysis of Key Provisions and Fundamental Shifts in the Amended TSCA and in the new B&C blog TSCAblog.com.

HEY, JUDGE SKAVDAHL - DON’T THE INTERESTS OF THE UNITED STATES INCLUDE PROTECTING GROUNDWATER ON ITS OWN LAND?

Posted on July 6, 2016 by Karl Coplan

The Mined Lands Act directs the Bureau of Land Management to issue regulations governing mining on public lands for, inter alia, “the protection of the interests of the United States, . . . and for the safeguarding of the public welfare.” More recently, the Federal Lands Policy Management Act specifically directs the BLM to take environmental issues into account in promulgating regulations governing the use of federal lands, that is, to manage federal lands in a way,

That will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archeological values,

Last year, acting under these statutory authorities, the BLM issued regulations governing fracking on federal lands, which required federal lessees to disclose chemicals in their fracking fluids and to take measures to prevent well leakage.  This week, the Federal District Court for the District of Wyoming struck down these regulations as exceeding BLM’s authority to regulate mining on public lands. The Court purported to find this result under the Chevron step I analysis, i.e., finding specific congressional intent that the Bureau of Land Management does not have authority to protect groundwater on public lands.  Despite the broad statutory authorities cited above, the Court found that the Energy Policy Act of 2005, which specifically exempted fracking from EPA regulation under the Safe Drinking Water Act, evidenced Congressional intent that no federal agency has jurisdiction to regulate fracking activities, even on federal lands.

This ruling ignores the obvious difference between EPA regulation to protect groundwater generally under the Safe Drinking Water Act and actions by the BLM to protect the United States’ own properties that are subject to federal leases.  FLPMA specifically directs BLM to take measures to protect ecological interests in managing federal lands, and it seems inappropriate for a federal court to second guess BLM’s balance between resource extraction and groundwater protection.  The United States in general has very broad authority to regulate activities on its own land, and Congress’ decision to exempt fracking on private lands from EPA regulation can’t possibly be read as specific Congressional intent to preclude BLM from protecting groundwater on lands owned by the United States. On another level, this decision reflects a concerning trend towards judicial activism tearing down the Obama administration’s invocation of statutory authorities to advance environmental protection in the face of a hostile Congress – witness the Supreme Court’s stay of EPA’s Clean Power Plan, and the Sixth Circuit’s stay of the Clean Water Rule.              

Environmental law got its start when courts, like the Second Circuit in Scenic Hudson Preservation Conference v. Federal Power Commission, read broad statutory grants of regulatory authority to include environmental protection.  This decision by the District of Wyoming departs from that tradition.  The BLM plans to appeal.

Viva La Deference—Chevron deference that is

Posted on July 5, 2016 by Jeff Civins

Administrative lawyers, especially environmental lawyers, are well familiar with the doctrine of Chevron deference as applied to agency interpretations of statutes.  In the 1984 Clean Air Act case of Chevron U.S.A. Inc. v. Natural Resources Defense Council, the U.S. Supreme Court announced a 2-step approach: (1) the court must determine whether Congress has directly spoken to the precise question at issue and, if so, that ends the matter—the Court, as well the agency, must give effect to that intent; and (2) if not, the court must defer to the agency’s interpretation if it is “reasonable,” the  presumption being that Congress intended to leave its resolution to the agency.  In a more recent Clean Air Act case, Michigan v. EPA, the Court, although determining EPA acted unreasonably in failing to consider costs in its regulation of hazardous air pollutants from power plants,  applied the Chevron doctrine, but Justice Thomas, in his concurring opinion, challenged the doctrine’s legal underpinnings, causing some to question the continued vitality of the doctrine.  In Encino Motorcars v, Navarro, decided on June 20, 2016, the Supreme Court, although deciding that the agency’s interpretation was not entitled to deference, provided assurance that the Chevron doctrine is alive and well.

The case involved the issue of whether service advisors at car dealerships were exempt from overtime pay under the Fair Labor Standards Act.  In 2008, the Department of Labor had proposed a rule confirming a long-standing practice that they were exempt, but in its final rulemaking--in 2011--it reversed course, without explanation.   The Court of Appeals for the Ninth Circuit had applied Chevron deference in upholding the rule, but the Supreme Court reversed.  It held that, although the Department could change its policy, its interpretation was not entitled to Chevron deference because it did not provide a reasoned explanation for doing so.  The Court therefore remanded to the Ninth Circuit to determine the rule’s validity in the first instance.  In her concurring opinion, Justice Ginsburg, joined by Justice Sotomayor, noted: “’[U]nexplained inconsistency’ in agency policy is ‘a reason for holding an interpretation to be an arbitrary and capricious change from agency practice.’”  In his dissent, Justice Thomas, joined by Justice Alito, agreed with the majority--that the Court “need not wade into the murky waters of Chevron deference,” but disagreed that the Court should have reversed and argued that the rule change was simply invalid.

So, Chevron deference lives, but it does not apply to unexplained rule changes. 

 

Turning the Lights Off on Environmental Justice?—Not this Administration

Posted on June 24, 2016 by Renee Cipriano

In the United States, Environmental Justice (EJ) began to take shape in the mid-1990s with the signing by President Clinton of Executive Order 12,898, “Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations.”  Over the years, the commitment to EJ has ebbed and flowed.  However, in 2011, EPA unveiled “EJ 2014,” the Obama Administration’s comprehensive plan for EJ.  The plan breathed new life into the EJ movement and focused on incorporating EJ concerns into EPA’s regulatory arenas.

EJ 2014 produced a number of very detailed implementation plans with targeted action.  For example, EPA developed its National Enforcement Initiatives for fiscal year 2011-2013 by targeting enforcement in communities considered “overburdened”.  In EPA’s permitting programs, the Agency sought to ensure that it provided EJ communities potentially impacted by the permitting decision a meaningful opportunity to participate.  Moreover, EPA asked permittees to provide “supported analysis” that no unacceptable, disproportionate impact to the community would result from the permitted activity. 

Sounds good, right?  Some would say “just ok.”  Although EPA could point to what it identified as successes of EJ 2014, criticisms of EPA’s commitment to the integration of EJ into programmatic decisions in a meaningful way remained.  EJ community activists and other interested non-governmental organizations still questioned EPA’s regulatory ability to demand that disproportionate impacts be addressed.  Could a permit be denied or conditioned solely because the regulated activity had a disproportionate impact on an overburdened community?  What is “an actionable, disproportionate impact” and what does “overburdened” mean?  Were EPA’s significant rulemakings truly addressing EJ concerns through clear mandates or restrictions?  And what about the countless complaints filed with the EPA Office of Civil Rights under Title VI of the Civil Rights Act?  A broken system, some say, claiming that over 95% of Title VI complaints are dismissed. 

Arguably, the Obama Administration has achieved the best successes in EJ to date.  Not only can EPA point to real impacts at the federal level, but there are also visible signs of EJ integration in state-administered environmental regulatory programs.  The Administration probably could have rested easily on its good work with EJ in the remaining months in office with very little push back.  Not this Administration, however, and not where environmental justice is concerned. 

Two very significant initiatives are underway right now with seemingly little consideration given to the end of the Obama Administration.  First, in January 2016, the United States Commission on Civil Rights (Commission) announced its intention to hold a briefing on EPA’s work under Title VI of the Civil Rights Act and Executive Order 12,898 with a focus on the civil rights implications of siting coal ash disposal facilities near minority and low-income communities.  With this announcement and briefing, the Commission has sought to further its 2016 statutory reporting project on EJ.  In particular, the Commission has identified its work to address and reduce the “backlog of Title VI complaints” handled by EPA’s Office of Civil Rights.  The Commission has also tasked its State Advisory Committees (SACs) to undertake a similar review.  The Commission’s activities with respect to EJ are clearly underway in earnest, as is the work of the SACs.

Second, in May 2016, EPA released the final draft of its EJ2020 Action Agenda.  According to the Agency, “EJ2020 is EPA’s EJ plan of action that will involve every EPA office and region.  EJ2020 consists of “eight priority areas and four significant national environmental justice challenges.”  The Action Agenda, currently open for public comment until July 7, 2016, builds on EJ 2014 and specifically includes addressing national challenges, including lead disparities, drinking water systems, air quality, and hazardous waste sites, as a way to measure success.   

In addition to EPA’s work on the national challenges, the Agency’s rulemaking and permitting efforts under EJ2020 should be of great interest to environmental regulatory practitioners.  EPA has released new guidance (June 2016) presenting its “analytical” approach for EJ review of significant rules.  Also, EPA plans to use permit terms and conditions to address EJ concerns and has folded into its agenda “next generation-esque” community-based monitoring approaches.

With no indication of slowing down, the Obama Administration is certainly looking to leave the lights on for environmental justice through the next administration.  The EJ2020 agenda and the results of work by the Commission may very well set a tone and approach that cannot easily be undone.  Yet significant challenges remain to incorporate EJ considerations in regulatory decision making.  Questions also exist: are the EJ policies truly advancing the interests of overburdened communities?  In May 2016, for example, the U.S. Court of Appeals for the Ninth Circuit upheld EPA’s broad discretion in settling Title VI actions, even after the Agency had excluded the overburdened community members from participating in the settlement negotiations.  Whether EPA can address this and other challenges remains to be seen.  For now, any commitment by this Administration to tackle EJ challenges is overshadowed by the presidential election and the uncertain future direction of EPA.   We can only wait and see if the lights will dim or burn brightly on this important initiative.