Coeur Alaska, Inc. v. Southeast Alaska Conservation Council et al
On June 22, 2009, the Supreme Court held 6-3 that the Corps, rather than EPA, has authority to permit the discharge of a rock and water mixture called “slurry” from a mine froth flotation process to a nearby lake, reversing the Ninth Circuit’s decision that the proposed discharge would violate the EPA’s performance standard and §306(e) of the Clean Water Act. Coeur Alaska, Inc. v.. Southeast Alaska Conservation Council et al., __U.S.__ (No. No. 07–984, June 22, 2009). Section §402(a) of the Clean Water Act forbids the EPA to issue permits for fill materials falling under the Corps’ §404 authority. Because §404(a) empowers the Corps to “issue permits . . . for the discharge of . . . fill material,” and the agencies’ joint regulation defines “fill material” to include “slurry . . . or similar mining-related materials” having the “effect of . . . [c]hanging the bottom elevation” of water, 40 C.F.R. §232.2, Justice Kennedy's opinion for Court states, the slurry Coeur Alaska wishes to discharge into the lake falls within the Corps’ §404 permitting authority. The Clean Water Act is ambiguous on the question whether §306 applies to discharges of fill material regulated under §404, however EPA’s internal “Regas Memorandum” states that the performance standard applies only to the discharge of water from the lake into the downstream creek, and not to the initial discharge of slurry into the lake. The dissent , written by Justice Ginsburg, takes the view that a discharge covered by a performance standard must be authorized, if at all, by EPA.
BIOFUELS AND CLIMATE CHANGE
Biofuels are the subject of much recent interest and investment, as indicated by a recent Wall Street Journal article on biomass fueled power plants. Given the increasing scrutiny that is being given to “green” marketing claims by the Federal Trade Commission and various citizen groups (and the potential for SEC scrutiny of similar claims in public offering prospectuses), care should be taken to analyze and document the basis for any claims of carbon neutrality or other environmental benefits associated with particular biofuels.
Advantages cited by biofuel proponents include reduction of greenhouse gas (GHG) emissions as compared to fossil fuels, energy security, benefits from domestic production and green job creation. Downsides of biofuels production can include displacement of food crops and increased food prices, deforestation and conversion of grasslands to crop lands, GHG emissions associated with growing and converting biofuels, and other environmental impacts such as nutrient runoff and water consumption.
Interior Secretary Salazar Demonstrates True Commitment to Renewable Energy
On May 2, 2009, Secretary of the Department of the Interior, Ken Salazar held a public meeting just outside Las Vegas, in the Red Rock Canyon National Recreation Area, to announce the opening of four new BLM offices to handle renewable energy permitting. The offices will be located in Nevada, Arizona, California and Wyoming, and have been designed to address the backlog of pending renewable energy project applications. The DOI estimates that 200 solar applications and over 25 wind projects are pending with the BLM in the western states.
I was one of the 25 or so attendees lucky enough to have the honor and privilege to be invited to a meeting with Secretary Salazar prior to the public meeting where this announcement was made. This earlier meeting was attended by developers of solar, wind and geothermal projects and others in the renewable energy industry. I was impressed by Secretary Salazar’s level of knowledge about both renewable projects and the BLM permitting process, as demonstrated by his comments and questions. Secretary Salazar also announced that $305 million in American Recovery and Reinvestment Act(ARRA) monies will be used for BLM projects to restore landscapes, spur renewable energy development on public lands, and create jobs. I left the meeting with confidence in the Secretary’s commitment to renewable energy and to the implementation of changes, policies and programs that will convert renewable energy from a noble goal to a reality.
Linda M. Bullen
National Advanced Conference on Natural Resource Damages Litigation
Dear Friends:
On behalf of Richard Curley (Golden, CO) and myself, I am writing to extend a personal invitation to attend the July 9 & 10 Santa Fe, New Mexico “National Advanced Conference on Natural Resource Damages Litigation.” The course will be held at the La Fonda Hotel in Santa Fe.
The course features national leaders in environmental litigation including:
· Deputy Assistant Attorney General John Cruden (Washington, DC)
· US Department of Interior attorney John Carlucci (Washington, DC)
· Colorado Senior Assistant Attorney General Vicky Peters (Denver, CO)
· Massachusetts NRD Director Dale Young (Boston, MA)
· Exxon Mobil Chief Attorney Robert Johnson (Houston, TX)
· BP Senior Attorney Jean Martin (Houston, TX)
· Nationally renowned plaintiffs’ environmental attorneys Allan Kanner
(New Orleans, LA) and John Dema (St. Croix, VI)
· Environmental toxicologist Ken Jenkins (Petaluma, CA)
· Environmental economists William Desvousges (Raleigh, NC) and
Robert Unsworth (Cambridge, MA)
As well as widely respected environmental attorneys:
· Brian Cleary (Hayden, ID)
· Donald Fowler (Washington, DC)
· Ira Gottlieb (Newark, NJ)
· Brian Israel (Washington, DC)
· Angus Macbeth (Washington, DC)
· Bradley Marten (Seattle, WA)
· Deborah Tellier (San Francisco, CA)
· Michael Thorp (Seattle, WA)
The course agenda is packed with vital information of high value to any attorney who is, or may someday be, involved in the expanding world of NRD litigation. Attendees will also get a chance to meet and interact with this extraordinary faculty in a selective and intimate environment, including a catered, cost-free reception on the evening of July 9.
Please take a moment to review the brochure from program sponsor Law Seminars International (see http://www.lawseminars.com/detail.php?SeminarCode=09NRDNM). If, as I hope, you are able to join us, please take advantage of the $150 discount offered to friends and clients of Farella Braun + Martel LLP. To do so, please mention the “FBM Discount” in the comments box of the registration page or when registering by phone at (800) 854-8009.
This is an exciting opportunity to see this august assemblage of environmental experts at one national program. The atmosphere of Santa Fe is an added bonus. We hope to see you there.
With best regards,
James A. Bruen
Derivatives Trading in Climate Change Legislation
ACES & Eights? Swaps and Other Derivatives in Climate Change Legislation
By
Stephen M. Bruckner
On May 21, 2009, the House Energy and Commerce Committee approved H.R. 2454, the American Clean Energy & Security Act (ACES), by a 33-25 vote. As the Committee touts its efforts on the much-examined markup of H.R. 2454 (aka, “Waxman-Markey discussion draft”), coalitions from each side of the ideological spectrum assail the legislation as toothless and watered-down, or a disaster for the American economy. The bill has a long way to go, including review by other House committees and, of course, the Senate, so it may be premature for Committee Chairman Henry Waxman to bestow the mantle of “decisive and historic action.”
Buried within ACES’ cap-and-trade emissions plan are a series of provisions that detail how big banks, hedge funds, and traders can use complex securities and derivatives to profit from the new carbon allowance market. We all watched aghast as “credit default swaps” and similar financial alchemy led to the melt down of Wall Street and the credit markets. Do these types of investments have a proper role in climate change and energy legislation? In a bill that already has plenty of political and policy hurdles, why add financial regulation?
Title III, Subtitle D of ACES, entitled “Carbon Market Assurance”, amends the Federal Power Act to create a financial instrument known as a “regulated allowance derivative”, which can include a “swap agreement”, and directs the Federal Energy Regulatory Commission to establish regulations for these financial vehicles. Title III, Subtitle E of ACES, entitled "Additional Market Assurance", addresses transactions in derivatives involving energy commodities such as coal, gasoline, and natural gas. These provisions open the door for financial institutions to partake in the new market created by ACES’ emission allowances. It allows companies, funds, and traders to purchase and trade emission allowances, and to devise complex derivative instruments to sell and trade, picking up commissions and charging fees along the way. As a result, the theoretical value of the allowances and their derivatives will be determined, in large part, by the manipulation and speculation of financial parties with little or no concern for carbon emission standards or federal climate policy beyond immediate monetary gain.
Simply put, the emerging market for new carbon allowances created by the bill could be (at best) undermined or (at worst) commandeered by financial contrivances that are already partially responsible for the nation’s current financial instability. The fundamental value of the new cap-and-trade 'products' will necessarily fluctuate as the emissions market adjusts and stabilizes. If big banks and hedge funds can use puts, swaps, options and other speculative instruments, which the federal government has yet to capably regulate, the stability of emissions allowances and carbon trading could be placed at risk. The chaos visited upon the economy at large by these and other financial instruments should cause hesitation and serious consideration as to whether they belong in Congress' first attempt at comprehensive climate change legislation.
Eleventh Circuit Wades into the Everglades on ESA Issues, Miccosukee Tribe v. United States, No. 08-10799
The Eleventh Circuit has waded, again, into the ongoing debates over restoration of the Everglades. In addressing yet another lawsuit filed by the Miccosukee Tribe, the Court largely upheld the Fish & Wildlife Service’s delicate balance between the competing and inconsistent habitat needs of the Cape Sable seaside sparrow and the Everglade Snail kite, both endangered species. The seaside sparrow needs stable low water levels below a certain water control structure; the kite’s habitat is destroyed by the resulting rising water levels in the impoundment. The FWS issued a biological opinion allowing the Corps of Engineers to operate the structure to avoid extinction of the sparrow and to conduct an incidental take of the kite. While largely affirming the agency, the Eleventh Circuit reversed on the issue of the trigger that would require initiation of consultation under Section 7 and, along the way, made new law in this circuit on several important issues.
First, the court rejected the tribe’s argument, often advanced by conservation groups in ESA litigation, that the ESA requires that FWS “give the benefit of the doubt to the species.” The court held that this language, taken from a conference committee report, does not mean that the FWS is required to issue a jeopardy opinion if the evidence is evenly balanced between likely jeopardy and likely no jeopardy. Rather, the Eleventh Circuit explained, the language was intended to prevent FWS from shirking its consultation duties by relying on scientific uncertainty, but did not require any substantive result. The court held that “the need to give a species the benefit of the doubt cannot stand alone as a challenge to a biological opinion.”
Continue Reading...CLEAN WATER ACT PERMITTING REQUIRED FOR PESTICIDE APPLICATIONS
It is well known that EPA rules developed under the Bush Administration have not fared well in the federal courts. Earlier this year, a 2006 EPA rule that exempted the application of pesticides to surface waters from Clean Water Act NPDES permitting requirements suffered a similar fate in Nat’l Cotton Council v. EPA, 553 F.3d 927 (6th Cir. 2009). The effect of this ruling will likely require any person or governmental entity throughout the United States that applies pesticides and insecticides near or onto waters to first obtain an NPDES permit.
A. The History of Pesticide Regulation under the Clean Water Act.
In Nat’l Cotton Council of America v. EPA, the court evaluated the legality of a 2006 EPA rule which provided that the application of pesticides and herbicides to and over surface water to control pests, weeds and insects consistent with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) does not require an NPDES Permit.
Continue Reading...The Burlington Northern Decision
The Supreme Court’s decision in Burlington Northern was not unexpected from my vantage point especially given the literal interpretation of CERCLA by the Court in Aviall and Atlantic Research and the flow of the oral argument.
I was a little surprised that Justice Stevens was assigned the task of writing the opinion since Justice Thomas wrote Aviall and Atlantic Research. But with 7-2 (Justices Ginsburg and Stevens dissented in Aviall because the Court would not decide the issue of entitlement to sue under Section 107), 9-0 (Atlantic Research decided the Section 107 private of action question left unresolved in Aviall), and 8-1 (Justice Ginsburg was the lone dissenter in Burlington Northern) votes in these three opinions, the Court is not going out of its way to fix CERCLA’s language. Section 113(f)(1) means what it says. Section 107 means what it says. An arranger must have an intent to dispose. And joint and several…
Continue Reading...EPA REQUESTS VOLUNTARY REMAND OF ITS DESERT ROCK ENERGY PROJECT PSD PERMIT DECISION
In the desert of New Mexico, the effect of another of the new Administration's shifts in previous federal environmental policy is being felt. As difficulties in permitting and building new coal-fired power plants have become more substantial, many power plant projects across the United States that were on the drawing board several years ago have fallen off of it. A notable exception is the Desert Rock Energy Plant, a joint project of the Navajo Nation's Diné Power Authority and Houston-based Sithe Global LLC that would be built on lands of the Navajo Nation. A significant step forward for that project had been EPA's issuance of the PSD permit in July of 2008. But recently, that step forward in air permitting has been followed by an administrative step back.
Continue Reading...Superfund Liability
In a stunning 8-1 decision, the Supreme Court changed the landscape of Superfund liability, holding that a company’s mere knowledge of spills in the course of delivery of a product is not a sufficient basis for liability as an arranger, and that defendant may avoid joint and several liability based on reasonable evidence supporting apportionment. Burlington Northern & Santa Fe Railway co. et al. v. United states et al. (No. 07–1601, May 4, 2009.)
In 1960, Brown & Bryant, Inc.(B&B), a now defunct agricultural chemical distributor, began operating on a parcel of land in California and expanded on to an adjacent parcel owned by two railroads. As part of its business, B&B purchased and stored various hazardous chemicals, including a pesticide supplied by Shell Oil Company. Many of these chemicals spilled during transfers and deliveries and equipment failures, resulting in soil and ground water contamination. In 1989, the EPA and the state cleaned up the site and then brought suit to recover their costs against Shell and the Railroads.
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