On January 9, 2013, the Pennsylvania Department of Environmental Protection (PADEP) issued a final White Paper addressing the use of “mine influenced water” (MIW) in oil and natural gas operations.  For purposes of the White Paper, MIW is characterized as “water contained in a mine pool or a surface discharge of water caused by mining activities that pollutes, or may create a threat of pollution to, waters of the Commonwealth” and “may also include surface waters that have been impacted by pollutional mine drainage.” The White Paper outlines (1) the process for reviewing proposals to utilize MIW, (2) options for storing MIW (i.e. impoundments, tanks, etc.) prior to being used for oil and natural gas well development, and (3) possible solutions to long-term liability issues.

PADEP Secretary Mike Krancer deemed the use of MIW as a “win” for Pennsylvania’s environment and economy.  According to PADEP, more than 300 million gallons of water are discharged from Pennsylvania mines each day.  The water discharged, after being introduced to sulfides and other minerals occurring naturally within the mine, can be harmful to the receiving streams.  The natural gas industry uses between 3-5 million gallons of fresh water, typically withdrawn from surface waters and groundwater sources, for each well completion operation.   MIW use provides natural gas companies an alternative source of water for hydraulic fracturing operations with the potential to both lessen the natural gas industry’s dependence on freshwater sources and divert polluted water from watersheds.  

While the use of MIW in natural gas production operations can be an economical and environmentally beneficial practice, certain issues, particularly long-term liability, may require additional regulatory or legislative action before the practice becomes a viable option for the natural gas industry.  For example, under the current interpretation of Pennsylvania’s Clean Streams Law, an operator’s act of pumping water from an abandoned mine pool could create a legal obligation to treat the resulting discharge.  PADEP’s White Paper suggests two options for reducing a MIW user’s long-term liability: 1) obtaining protection from civil liability by qualifying for a “water abatement project” under Pennsylvania’s Environmental Good Samaritan Act; and 2) entering into a Consent Order and Agreement with the state.  Unfortunately, neither of these options guarantees protection from all potential liabilities under federal and state law for conditions associated with abandoned mines.

Notwithstanding certain concepts that require further consideration, PADEP’s White Paper serves as a platform for Pennsylvania and other states to promote the responsible production of coal and natural gas and, at the same time, to address some of the environmental challenges associated with both.  It is hoped PADEP’s White Paper will stimulate discussions regarding the use of MIW for natural gas production in other states with large reserves of coal and natural gas like Ohio, West Virginia, and Wyoming.  With additional input from stakeholders across various states, anticipated environmental and economic benefits of this practice may become a reality.

Section 316(b) of the Clean Water Act requires that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.  Although the statutory language is straight-forward, EPA has run into enormous difficulties in promulgating rules to implement Section 316(b).

The latest in a series of rulemaking efforts began on April 20, 2011 when EPA published a proposed rule to protect fish from being killed at water intake structures that withdraw at least 2,000,000 gallons per day from waters of the United States and use at least 25% of the water they withdraw exclusively for cooling purposes.  Pursuant to a Settlement Agreement with the environmental group, Riverkeeper, and other organizations, EPA was required to issue the revised rule by July 27, 2012. 

When I last wrote about this rulemaking effort by EPA, EPA had received more than 1,100 comment letters and more than 80 documents containing new data for possible use in developing the final impingement mortality limitations.  On June 12, 2012, EPA offered a 30-day comment period on the new information with comments due on or before July 11, 2012. 

Through the Notice of Data Availability published by EPA on June 12, 2012, EPA also presented data it had received related to the results of EPA’s stated preferences survey.  Comments on the data related to EPA’s preference survey were also required to be submitted on or before July 12, 2012. 

In my previous blog on this subject, I wrote it was hard for me to understand how EPA would be able to comply with a court-ordered issuance date of new rulemaking by July 27. 

Not surprisingly, EPA was unable to issue its new rule by July 27.  Instead, EPA entered into a Second Amendment to the Settlement Agreement with Riverkeeper and other organizations.  The Settlement Agreement contains the following language:  “Not later than June 27, 2013, the EPA Administrator shall sign for publication in the Federal Register a notice of its final action pertaining to issuance of requirements for implementing Section 316(b) of the CWA at existing facilities.”  Since entry of the extension, EPA has been remarkably silent about any steps it plans to take prior to the June 27, 2013 deadline for notice of final action.

Concurrent activity at the state level is also of interest.  Prior to this latest extension, EPA Region 1 sent about ten extensive Section 308 information requests to facilities in Maine to set the stage for possible issuance of case-by-case, best professional judgment permit requirements pursuant to 316(b) for the selected facilities.  It is unclear how the facilities were selected given other Maine facilities also met the proposed thresholds.  Those facilities have responded to the information requests but further action even on those facilities is on hold.  EPA Region 1 and the Maine DEP have now determined that DEP, which administers a partially delegated NPDES program, now has the statutory capacity to administer the 316(b) program.  DEP is in the process of formally seeking explicit delegation for the 316(b) program as anticipated under the original EPA-DEP NPDES Memorandum of Agreement.  The DEP has indicated it intends to wait until after EPA issues a final rule implementing Section 316(b) before DEP decides how it proposes to implement 316(b) as a delegated state.

Introduction

The concept of a “Waiver Rule” to be promulgated by the New Jersey Department of Environmental Protection (“NJDEP” or “Department”) created both excitement within the New Jersey regulated community and consternation among environmental groups.  Business and development interests saw a Waiver Rule as a long overdue attempt by NJDEP to bring some flexibility into the State’s environmental regulatory experience.  Environmentalists were convinced the Waiver Rule concept would open the door for polluters and greedy developers to complete an end run around New Jersey’s complex environmental statutory and regulatory scheme.  A coalition of environmental and conservation groups initiated litigation challenging the adoption of the Waiver Rule.  The environmentalists argued their case against the validity of the Waiver Rule before a three-judge appellate panel on January 14.  In response to this argument, representatives of the business community told the court that a common sense approach to environmental regulation in New Jersey, as embodied in the Waiver Rule, is needed to spur economic development.  It is likely this issue will end up before the New Jersey Supreme Court.

The Waiver Rule, N.J.A.C. 7:1B, became reality in response to Governor Chris Christie’s Executive Order No. 2, which attempted to instill “common sense principles” into the governing of New Jersey.  Executive Order No. 2 and the Waiver Rule promised a better environmental regulatory climate to improve the State’s economy. 

Will the Waiver Rule, effective as of August 1, 2012, actually make a difference?  In its first five months, the Waiver Rule does not yet seem worthy of the regulated community’s early enthusiasm or the trepidation of the environmental groups.  To date, NJDEP has still not approved a waiver under the Waiver Rule and, according to NJDEP’s Office of Permit Coordination & Environmental Review, only fourteen waiver applications have been accepted for review by NJDEP since August 1st.

NJDEP’s philosophy on the implementation of the Waiver Rule may well be embodied in N.J.A.C. 7:1B-1.1(b) which states:  “[i]t is not the purpose of this chapter to allow for the routine circumvention of any Department rule.”  The NJDEP guidance makes clear that application of the Waiver Rule will be limited.  Only NJDEP (and not any Licensed Site Remediation Professional) is allowed to grant a waiver under the Waiver Rule.  Will NJDEP ever get to “yes” on a waiver application?  Time will tell.

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The Attorney Generals of thirteen states (Alabama, Arizona, Georgia, Kansas, Michigan, Nebraska, North Dakota, Oklahoma, South Carolina, South Dakota, Texas, Utah and Wyoming) are investigating EPA's sue-and-settle practice.  At issue is the EPA's practice of entering into voluntary settlements of lawsuits brought by environmental groups, through consent decrees, in which the EPA commits itself to promulgate environmental rules and regulations, often under strict time schedules, without input from other stakeholders and impacted parties, including the states.  Often-times the EPA also reimburses the environmental group for its attorney fees.  Although the stakeholders may have input in the subsequent rulemaking process, the concern is that the effectiveness of such input may be limited because certain results are prescribed by the voluntary settlement or because the agreed schedule effectively limits meaningful input and consideration.

These same concerns were also recently discussed in the June 28, 2012, hearing before the Oversight and Government Reform Committee of the U.S. House of Representatives.  Hearing statements and testimony provided good descriptions of (i) how sue-and-settle settlements are a form of "off ramp" rulemaking bypassing the traditional rulemaking concepts of transparency, public participation and judicial review; (ii) how billions of dollars in added costs and millions of lost jobs have resulted from these off ramp settlements and why these added regulatory burdens may not have resulted had the traditional rulemaking process been followed; and (iii) the specific impact of EPA's sue-and-settle settlement upon the Regional Haze rules.

On August 10, 2012, the thirteen Attorney Generals submitted a Freedom of Information Act (FOIA) request to EPA.  Among other things, the request seeks communications between EPA and 80 identified "interested organizations", and specifically identifies 33 sue-and-settle settlements entered into by EPA in the last three years.  After noting in a press release that EPA entered into one consent decree on the same day the lawsuit was filed, the states seek to determine whether there was collusion to advance a common agenda between the environmental groups and EPA.  The FOIA request’s stated purpose is to provide a report to be furnished to the states and Congress outlining EPA's practice.  So far, the EPA has done little but object to producing documents, seeking to impose fees upon the states even though the request should be exempt from fees.  No meaningful production of documents has occurred.

Certainly there are some good arguments to be made regarding the benefits of allowing citizen groups to file lawsuits to hold EPA accountable. Similarly, there are articles refuting the suggestion of collusion concerning certain prior EPA settlements.  Nevertheless, where important environmental policy issues are at stake with far reaching economic consequences, there should never be any question about collusion or secrecy.  Transparency should always be the watchword.  EPA’s production of the requested documents would do much to advance the goal of transparency.  If the settlements were in the best interest of the public, they should be able to withstand the glare of public scrutiny.

On January 3, 2013, an EPA-set TMDL for Accotink Creek (a Fairfax County, Virginia tributary of the Potomac River) was invalidated on the grounds EPA exceeded its statutory authority when it attempted to regulate, via the TMDL, a Clean Water Act pollutant – sediment – by instead regulating a surrogate non-pollutant – stormwater flow.  The opinion granted plaintiff’s motion for judgment on the pleadings; in a separate order Judge O’Grady vacated the Accotink Creek TMDL and remanded the matter to EPA for further consideration.

Utilizing the two-step Chevron statutory interpretation analysis, the court found the first of the two criteria had been met:  Congress had addressed in unambiguous language the precise question at issue “… and its answer is that EPA’s authority does not extend to establishing TMDLs for nonpollutants as surrogates for pollutants.”  While directly acknowledging he did not need to reach the second Chevron criterion (whether the agency’s reading of an ambiguous statute is “permissible”), Judge O’Grady nonetheless noted in some detail that “there is substantial reason to believe EPA’s motives go beyond ‘permissible gap-filling.’”

Based upon EPA’s own pleadings, the opinion notes it appears the Agency could have set a TMDL based upon the underlying problem – sediment in the creek – rather than pursuing a surrogate approach.
In recent years, EPA has been pursuing so-called “innovative” TMDLs in an attempt to address stormwater’s contribution to impaired watersheds.  In particular, those TMDLs purport to set load limits based upon various surrogate approaches, including such things as the percentage of impervious cover (“IC”) allowed in the impacted watershed, or (as with Accotink Creek) stormwater flow rates.  While the Accotink Creek TMDL was in EPA Region 3, New England’s Region 1 seems to be in the forefront of this approach and currently has at least three stormwater-source TMDLs in place (including two so-called IC-TMDLs), as well as others in development. 

Given the extensive resources EPA has invested in trying to manage stormwater impacts to impaired streams (see e.g., TMDLs to Stormwater Permits Handbook (Draft Nov 2008)), the Virginia Dept. of Transportation case is clearly a significant setback for the surrogate approach propounded by the Agency.  Whether the United States appeals the decision or retreats and re-evaluates its initiatives in this area is yet to be determined.  Whichever way EPA decides to go, communities dealing with impaired watersheds certainly will need to pay close attention.

On January 8, 2013, the U. S. Supreme Court unanimously held that flow from an improved portion of a waterway into an unimproved portion of the same waterway—even if polluted—does not qualify as “discharge of pollutants” under the Clean Water Act (CWA).  Although this case arises in the context of a municipal separate storm sewer system (MS4), it has major implications for dam owners everywhere.  The case reaffirms evolving doctrine that dams are not point sources requiring National Pollutant Discharge Elimination (NPDES) permits per Section 402 of the CWA.

In Los Angeles County Flood Control District v. Natural Resources Defense Council, environmental groups brought a CWA citizen suit against the District for violating the terms of the District’s NPDES permit to operate the MS4 facilities.  It was undisputed that water quality standards had repeatedly been exceeded for a range of pollutants, as measured at the District’s monitoring stations in the Los Angeles and San Gabriel Rivers.  The District collected storm water in concrete channels before discharging back to the river, and the monitoring stations were within the concrete channels.  It was also undisputed that many other upstream parties contributed to the contamination.  

Plaintiffs argued that since the monitoring stations were within the control of the District, the District had responsibility for meeting standards.  But that was not the issue for the Court.  Instead, the Court focused on whether a “discharge of pollutants” occurs when polluted water flows from one portion of a river, through an engineered improvement, and then back again to the same river.  The Court answered in the negative, citing its 2004 decision in South Fla. Water Management Dist., v Miccosukee Tribe.  In Miccosukee, the Court held that pumping polluted water from one part of a water body to another part of the same water body is not a discharge of pollutants.

This decision should come as welcome news to dam and hydroelectric plant owners.  Prior to Miccosukee and now LA County, the federal Courts of Appeal simply deferred to EPA judgment as to whether a dam could be said to “add” pollutants originating upstream when it passes them through penstocks or spillways to the river below.  The Supreme Court, however, has firmly established a rule of law that CWA Section 402 is implicated only where the upstream and downstream river segments are “meaningfully distinct water bodies,” a condition that will rarely exist for in-river dams.

In my August 24, 2010 submission, I discussed the water wars between Oklahoma and Texas, summarizing the lower court holding in Tarrant Regional Water District v. Herman, et al.  The gist of the dispute is that a Texas water district wants to buy Oklahoma water, but Oklahoma isn’t selling, and has passed laws that effectively preclude the sale. The Tarrant Regional Water District (“TRWD”) cried foul, but the District Court did not agree with TRWD that Oklahoma’s refusal to sell water across state lines was a violation of the Commerce Clause.  Judgment was entered on July 16, 2010, and the case appealed to the Tenth Circuit shortly thereafter.  The Tenth Circuit affirmed the District Court.  656 F.3d 1222 (10th Cir. 2011).

The Appellate Court decided that Oklahoma statutes which precluded water being sold to users in Texas did not violate the Commerce Clause because the Red River Compact preempted it. Recall that the Red River Compact (signed by Texas, Oklahoma, Louisiana and Arkansas in 1978 and approved by Congress) divided the water from the Red River and its tributaries among the states involved.  The Compact has general language that gives the signatory states authority over the water allocated to them within their borders.  The Tenth Circuit held Texas to its bargain on the Compact and agreed with Oklahoma that the refusal to sell Oklahoma water to Texas users does not violate the Commerce Clause. 

Now, the United States Supreme Court will weigh in on the subject, as it granted certiorari on January 4, 2013.  Stay tuned.

Environmental practitioners and their clients have benefitted greatly from the EPA’s historic implementation of the EPA Audit Policy.  Thus, the level of concern that has been expressed by environmental practitioners in response to EPA’s statements that the Audit Policy may not live through 2013 is not surprising.  For background, see Linda Bochert’s posting, “Dear EPA:  please don’t abandon your Audit Policy!”,  and FY2013 OECA National Program Manager Guidance.

EPA has discussed the basis for its proposal to abandon the Audit Policy in terms of perceived decreasing utility, which creates difficulty in justifying the expense of implementation.  The explanation goes something like this:  with the maturity of the environmental programs, regulated industry knows that it needs to comply by now, thus the incentives provided by the Audit Policy are no longer necessary.  Also, along with industry outgrowing the original purpose of the Policy, the cost of implementing the policy does not justify its continued implementation in this era of shrinking budgets, particularly given the relatively minor noncompliance events reported pursuant to the Audit Policy.

Has EPA really considered the entire calculus?  And, assuming one buys into the external benefits provided by the continued implementation of the Audit Policy, given what’s at stake, isn’t it worth developing options for implementation that don’t impose the same level of staff investment?

Many believe that the Audit Policy has served a purpose far greater than the mere forgiveness of the gravity component of the reported noncompliance events.  For many years, the EPA Audit Policy has provided regulated entities with a mechanism to conduct compliance audits with confidence that noncompliance issues can be corrected without fear of punitive enforcement action.  The Audit Policy continues to serve this purpose, despite the maturity of the environmental programs, because the nature of regulated entities and industry sectors is so dynamic.  Regulated entities are in a constant state of change, as are many EPA programs at any one time.  EPA’s assertion that the EPA’s Audit Policy is no longer needed contemplates regulated entities and applicable regulations as static and monolithic bodies and does not recognize the constant state of change across industry sectors and within individual entities, particularly in response to new and modified regulations.  Industry sectors also vary in their inherent levels of sophistication and adaptability to changing regulatory requirements, depending in large part upon the degree to which the industry has been pervasively regulated in the past.  New regulations across an industry sector upset the equilibrium and demand new management models and compliance approaches, requiring a period of education, acquisition of staff, operational and cultural adaptation to the new requirements.  Adaptation within industry sectors can be slowed when immediate demands are placed on sector resources for all entities in that sector simultaneously such as occurs with new industry sector-wide regulation, prioritizing rapid reaction to new regulation over comprehensive proactive compliance.  In this regulatory environment, the Audit Policy continues to serve the same purpose as it always has, to encourage a culture of compliance in the dynamic landscape in which regulated entities operate.

To read more and provide your own input on how you believe EPA should approach the future of the EPA Audit Policy, click here.

Tremendous progress has been made in protecting and restoring the environment over the past 40 years since the passage of major legislation at the federal, state, and provincial levels in the United States and Canada.  However, our skill at measuring that progress is somewhat limited, and we may not have the kind of information we need to judge the health of our ecosystems or the effectiveness of our programs.  There have been some good efforts on an international, national, state, and provincial basis to evaluate the state of the environment using certain indicators, but one area needing much more attention is the Great Lakes. 

Although there are many indicators monitored on a continuing basis in the Great Lakes, the real difficulty has been synthesizing the information in a way that puts officials in a position to communicate effectively with the public, policy makers, and managers about whether the Great Lakes are getting better, worse, or staying the same.  The International Joint Commission (IJC) initiated an effort recently through its Water Quality Board (WQB) and Science Advisory Board (SAB) to identify a limited number of core indicators for this freshwater resource.  What’s needed now is a consensus among the scientific and policy leaders on the Great Lakes on the “few indicators that tell us the most” about the waters.

It was not hard to tell the Great Lakes were in trouble when enough dead alewives washed up on its shores requiring front end loaders to remove them, the Cuyahoga River and other tributaries caught fire, and Lake Eric was declared “dead” because of massive algal blooms.  Many of these conditions on the Great Lakes led to both a public outcry and Congressional action in order to deal with the lakes’ water pollution and other environmental problems.  As programs were put in place to keep oil out of the rivers and reduce nutrient loadings to the lakes, significant visible improvements were seen.  The underlying data was available to support the observations, but the visible improvements plus much better fishing success told the story in an easily observable way. 

Things are much more complicated now.  When looking at the fundamental three legged stool  supporting the Great Lakes’ ecosystem, being the chemical, physical, biological integrity of the resource, it is not easy to gage.  With regard to chemicals, very low concentrations of legacy pollutants like PCBs and dioxins can cause serious problems.  Likewise, ongoing contamination from airborne deposition of mercury is a real concern.  New chemicals such as flame retardants are the next problem area with which to deal.  Invasive species such as the zebra and quagga mussels, the ever present sea lampreys, and the threat from the Asian carp are a constant problem for maintaining the biological balance in the system.  From a physical standpoint, expanding urbanization, suburban sprawl, and the manifestations of climate change are also adding tremendous pressure on the Great Lakes.  What’s needed is a core set of chemical, physical, and biological indicators of the health of the ecosystem and the effectiveness of the programs to protect and restore it.

Good progress is being made on this front.  After several months of work by some of the top Great Lakes’ scientists and policy makers, a group of just over twenty indicators has been preliminarily identified, with a smaller group as the core.   They include:
    Physical: Coastal wetlands, land cover, and tributary physical integrity
    Chemical: Nutrient concentrations and loadings, and persistent bio - accumulative toxics
    Biological: Lower food web productivity/health, fish species of interest, harmful and nuisance algae, aquatic invasive species

Much of the foundation for the work done recently comes from what is known as the State of the Lakes Ecosystem Conference (SOLEC), which is a large gathering, primarily of scientists, held every two years to review and evaluate a large number of Great Lakes’ indicators on the Great Lakes.

What needs to happen next is for the IJC first to adopt a set of core indicators as the ones that tell us the most about the resource, then inform the U.S. and Canadian governments of its findings.  Under the recently updated Great Lakes Water Quality Agreement, the parties are responsible for establishing ecosystem indicators for the Great Lakes.

With a set of core indicators, both countries will be in a much better position to communicate with the public, elected officials, and managers about the health of the ecosystem and the effectiveness of programs.  In addition, our governments will be in a position to make better choices about the allocation of increasingly scarce resources to maximize the return on investment for improving the health of the Great Lakes, the largest, surface freshwater system in the world.

Montana’s state constitution contains what is arguably the most stringent environmental protection clause of any state.  Article II, Section 3 of the Montana Constitution guarantees all persons “the right to a clean and healthful environment.”  This provision is paired with Article IX, Section 1, which says the “state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations.”  Although these clauses have been in the state constitution since 1972, they rarely have been applied by the Montana Supreme Court to invalidate legislation, overturn state action or to provide a private remedy.  In October, 2012, the Montana Supreme Court rejected the latest attempt to apply these provisions.

Montana is a coal-rich state.  The State of Montana owns significant quantities of this coal.  The State Land Board controls the leasing of state-owned coal.  In 2010, the land board approved a massive lease to Arch Coal.  Montana received an $85 million bonus payment for this lease. 

In addition to the environmental-protection provisions of the state constitution, Montana has a state environmental policy act, structured similarly to the National Environmental Policy Act (NEPA).  The Montana Environmental Policy Act (MEPA) contains a number of exemptions from environmental review that would otherwise be required.  One of these provisions exempts the land board from the obligation to undertake environmental review at the leasing stage, so long as a lease contains a provision stating that actual mining is subject to further environmental permitting.  The land board relied on this exemption to issue leases to Arch Coal without first undertaking MEPA review.

Several environmental groups challenged the land board’s leasing action, arguing that the application of the MEPA exemption violated the Montana Constitution on an as applied basis.  They argued that the leasing decision opened the door to the mining and burning of large quantities of coal without environmental review.  A state district court found that mining and burning coal could exacerbate global climate change, which in turn could adversely affect water, air and agriculture in Montana.  Based on this finding, the district court declined to dismiss the case, but it also refused to grant summary judgment to the NGO plaintiffs on the constitutional claim.  The district court concluded that the State retained sufficient environmental protection mechanisms at the mine permitting stage to meet its constitutional obligations.

The NGO plaintiffs appealed the case to the Montana Supreme Court.  In Northern Plains Resource Council v. Montana Board of Land Commissioners,  the Supreme Court upheld the district court and rejected the constitutional challenge.  Although the Supreme Court confirmed the fundamental right to a clean and healthful environment and acknowledged potential global climate change implications of further coal development, the Court held that it was not required to apply a strict scrutiny analysis to the statutory exemption from MEPA.  The Court concluded that “the act of leasing” did not interfere with the exercise of a fundamental right requiring “demonstration of a compelling State interest.”  Instead, the Court applied a “rational basis” test to conclude that the potential for additional environmental review at the permitting stage was sufficient.  On that basis, the Supreme Court held that the exemption from MEPA review did not violate the Montana Constitution.

An earlier post noted that adaptation to climate change is inevitable and is finally emerging as a priority for public policy.  Long overshadowed by campaigns to prevent or slow global warming, federal and state initiatives and efforts by many professionals have resulted in efforts to start to collect data and promote serious planning for ocean rise and other effects of climate change.

Storm Sandy has more than reinforced that trend: it has established a much wider recognition that planning, design, engineering and regulatory decisions must incorporate the expected impacts of climate change and can no longer rely on historic weather and temperature conditions.  That shift will have broad implications throughout the legal system, amounting to an emerging law of adaptation to climate change that is distinguishable from the emerging law of greenhouse gas controls. 

As often is true, the legal academy is in the vanguard – there is a surge of law review articles and also a recent compilation published by the ABA.

For example, utility regulators have broad authority to require public service companies to prudently operate and maintain their systems.  It is common for regulators to require emergency response plans, and, in some states, to impose significant penalties for overly delayed restoration of service after storm events. 

Now, regulators are likely to require utilities also take account of changes because of global warming effects, not just based on historic conditions.  Environmental groups recently petitioned NY regulators to so require. 

But how exactly can this step be done?  Modeling of the timing and extent of climate change effects can only produce broad ranges and generalities and are indefinite about effects at particular locations.  What retrofitting is needed to assure reliable service to far future ratepayers and at what expense to current ratepayers? Ratepayers, regulators and utility stockholders will not reach agreement without significant dispute.

Existing zoning for flood plains should be modified to account for climate change.  Making those changes will trigger large disputes as previously settled expectations are overturned.  Until the rules are changed, are zoning bodies tied to outdated flood control maps incorporated into their regulations, or can they consider supplemental, updated information? 

Environmental impact reviews for proposed projects typically address the effects of a project on the environment.  Now must they consider the effects of the environment on the project?  How?   It will be litigated.

Also, as noted in an earlier post, the public trust doctrine might not serve to require regulatory agencies to regulate greenhouse gas emissions.  But will it successfully undergird a state’s assertion of authority to regulate activities on or affecting lands subject to the public trust in order to account for changes and threats to shorelines?  As beaches recede, will public trust lands start to incorporate currently private property?

The common law of property, too, will be affected.  A landowner can lose title to land if it slowly disappears by reliction due to changes in a water body’s natural behavior, whereas a sudden loss by avulsion allows the landowner to keep title and restore the land.  But what if the sudden loss is due to a storm event that is part of a slow rise in ocean levels?

Finally, at what point will it become clear that professionals must take account of global warming in designing structures or else experience risk of liability for unanticipated effects?

By: Jarred O. Taylor II and Shannon K. Oldenburg

The Gulf Coast Ecosystem Restoration Council (the “Council”) held its first public meeting on December 11, 2012, in Mobile, Alabama, intended to introduce the Council to the public and to give the public feedback opportunity on the Council’s plans.  The Council, established by the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (the “RESTORE Act”), is charged with developing and overseeing implementation of a comprehensive plan to help restore the ecosystem and economy of the Gulf Coast region in the wake of the Deepwater Horizon oil spill. 

The RESTORE Act will fund the Council’s work via a Trust Fund made up of 80 percent of all Clean Water Act administrative and civil penalties related to the oil spill:

• 35 percent of the money will be divided equally between the five Gulf States;
• 30 percent will be spent through the Council to implement a comprehensive plan;
• 30 percent will be used through States’ plans to address impacts from the oil spill;
• 2.5 percent will be used to create the Gulf Coast Ecosystem Restoration Science, Observation, Monitoring and Technology Program within the Department of Commerce’s National Oceanic and Atmospheric Administration (“NOAA”); and
• the remaining 2.5 percent will be used for Centers of Excellence Research grants, which will each focus on science, technology, and monitoring related to Gulf restoration.

Overarching themes of the comments from both the Council and the public in attendance at the meeting were that ideas for Gulf restoration should originate from the Gulf Coast, not from the federal government, and that the Gulf of Mexico Ecosystem Restoration Strategy developed by the Gulf Coast Ecosystem Restoration Task Force (“GCERTF”) should be used as a framework for the Council’s work.  To much approval from the audience, Rachel Jacobson, Principal Deputy Assistant Secretary for Fish and Wildlife and Parks, Department of the Interior (Ken Salazar’s designated representative on the Council), commented that the Council should incorporate the “four pillars” of the GCERTF strategy into the process and work of the Council in determining how the RESTORE Act funds should be distributed and used.  These four pillars are (1) restore and conserve habitat; (2) restore water quality; (3) replenish and protect living coastal and marine resources; and (4) enhance community resilience.  Notably, Jacobson and many of the other designated representatives to the Council served as members of the GCERTF and also act as Trustees for the Natural Resources Damage Assessment (“NRDA”) for the Deepwater Horizon oil spill.

The Council has only 180 days from passage of the RESTORE Act to publish: 1) procedures to assess whether programs and activities carried out under the Act are in compliance with the Act’s requirements; 2) auditing requirements for disbursing funds from the Trust Fund; and 3) procedures to identify and allocate funds for the expenses of administering the Trust Fund.  The Council will publish a “proposed plan” by the end of this year that will be the focus of public hearings in late January and early February 2013, likely to be in the style of the public “listening sessions” held by the GCERTF last year.  The Council also will release a “draft comprehensive plan” for restoration in Spring 2013, and publish a final plan on July 6, 2013, the anniversary of enactment of the RESTORE Act.

An incredible amount of work has already gone into Gulf restoration, but much work remains.  Only time will tell if these legislative acts and work will translate into true restoration in the Gulf area.

As the Clean Water Act celebrates its 40th anniversary, it has ignited a controversy in New Hampshire with potentially hundreds of millions of dollars at stake.  In the law’s early days,  publicly owned treatment works (“POTWs”), mandated and financed in large part with federal funds, were viewed as the “good guys” in the national effort to restore quality in receiving water bodies into which raw sewage was being discharged.  That view of POTWs seems to have changed in New Hampshire, at least as relates to the State’s largest saltwater estuary; the Great Bay.  Faced with the potential need to finance significant POTW upgrades or reconstruction, New Hampshire POTWs are challenging EPA’s permitting decisions in the courts, through administrative channels and in the press.

As we know, POTWs are regulated through National Pollutant Discharge Elimination System (“NPDES”) permits that monitor and control a variety of effluent criteria.  Interestingly, however, New Hampshire was and remains one of the few states that has not obtained authority to issue new and renewed NPDES permits.  Because of this status as a non-delegated state, dischargers in New Hampshire with expiring permits must apply to the federal government for renewal.  As environmental regulation has progressed, however, and as federal funds have diminished or disappeared, POTWs and the towns and sewer districts that operate them have found themselves opposed to the EPA’s efforts to impose stricter standards  to address pollutants that were not of primary concern when the POTWs were constructed and initially permitted.

In New Hampshire, this is seen vividly in NPDES renewal efforts EPA is undertaking for several POTWs that discharge under expired and expiring permits, directly or indirectly, into the Great Bay estuary located on the State’s coast.  Once a rich habitat for oysters, eel grass and other sea life, Great Bay is now stressed by a variety of factors including both point and non-point discharges as well as other environmental factors.   At the heart of the controversy  in New Hampshire is EPA’s intention to reduce effluent limitations for nitrogen to as low as three parts per million (the limits of technology) in order to ameliorate nitrogen related problems in Great Bay.  From the municipalities and POTWs perspective, the costs to comply with these new lower limits are exorbitant.  One widely cited study estimates that, for the Great Bay estuary POTWs to comply with the new nitrogen limit, it will cost in excess of one half billion dollars in capital,operation and maintenance expenses.  Those costs will, of course, be passed along to a relatively small population of ratepayers. 

A coalition of communities with affected POTWs has joined forces in response, proposing “adaptive management programs” combining somewhat lower discharge limits with comprehensive non-point controls aimed together at achieving EPA’s stated goals.  It is unclear at this time whether those efforts will be successful.  The coalition communities certainly have in mind the experiences in Chesapeake Bay, or closer to home in neighboring and similarly non-delegated Massachusetts, where EPA is using its  Residual Designation Authority (“RDA”) to require permits in the Charles River watershed.  EPA has been public with its view that the Charles River RDA program may become a model for watersheds elsewhere in New England and nationwide.  It is thought that an adaptive management program as proposed by New Hampshire’s coalition communities would obviate the need to utilize RDA for Great Bay, but that issue remains to be addressed in the future.

The attached article will be published in the upcoming issue of the Lewis & Clark Law School Environmental Law Review.  The article is among the first to integrate current climate change science, particularly ongoing impacts and predicted impacts, with a detailed roadmap for substantial reform of our environmental processes for reviewing proposed renewable energy projects.
 
Most existing articles either focus only on climate science or on minor modifications to the regulatory system. Using offshore wind power as a case study, this article demonstrates how, in an increasingly carbon-constrained world, our existing environmental laws and regulatory process no longer achieve their underlying goals of long-term ecosystem conservation. To the contrary, these laws and regulations are supporting a system with increasing greenhouse gas emissions that is annually costing trillions of dollars.

We have little time left to create a practical path to achieving an 80% reduction in greenhouse gases by 2050—with failure resulting in average global temperatures rising more than the internationally-agreed targeted ceiling of 2°C. After examining the obstacles confronting a potential developer of offshore wind, this article clearly lays out why and how the existing regulatory process should be quickly reformed so that offshore wind and other clean renewable energy sources can help us escape the escalating consequences of our carbon-intensive economic system.

A prior post by Michael Rodburg described New Jersey’s coastal regulatory programs, Sandy’s impact on that state and the policy choices it now must face.  This alert will focus on Connecticut’s experience with Storm Irene and Super-storm Sandy and the challenges for government at all levels that the storms have presented.

Connecticut is known as the “land of steady habits,” but after being hit by two significant storms within a fourteen month period, many people are beginning to question the sustainability of the state’s historic coastal growth patterns and the ability of the current regulatory scheme to address the challenges that climate change is bringing to coastal states like Connecticut.

The impact on Connecticut from Sandy was not as great as the impact on New Jersey, because the storm atypically turned West as it approached Long Island, and the eye of the storm hit the New Jersey coast head on.  However, Connecticut was not spared, because Sandy’s peak easterly winds occurred during a spring high tide event.  This combination of factors pushed a record high storm surge into western Long Island Sound, which narrows as it approaches its westerly outlet through the East River separating Manhattan from Brooklyn.

Due to this constriction, the water had no where to go but up in the western Sound, and it over-topped seawalls and flooded many residential areas in Fairfield County which had not historically been subjected to flooding.  It also threatened several utility sub-stations in Bridgeport and other urban centers, which were only saved by emergency flood proofing efforts.  Sadly, for many East-facing shorefronts, Sandy flooded out structures that had just been re-built following the ravages of Irene.

Ironically, like the programs in New Jersey discussed in Michael Rodburg’s post, Connecticut has had a decades old and robust coastal regulatory program.  The first legislation in 1939 was prompted by the deadly 1938 Hurricane.  In 1969, legislation was adopted to regulate and protect tidal wetlands.  These two programs have evolved since their initial passage and now require State permits respectively for dredging, installation of structures, and placement of fill in tidal and navigable waters, and for similar regulated activities in tidal wetlands.  The legislature strengthened the coastal programs in 1979 by authorizing a comprehensive coastal zone management program which required government agencies to make permit decisions in the coastal area consistent with the goals and policies of the Coastal Management Act (“CMA”).

Despite this expansive regulatory edifice designed to provide natural resource protection, minimize armoring, and offer preferred regulatory status to water-dependent uses in the coastal area, Sandy clearly challenged the adequacy of the current scheme.  One problem is that the statutes, particularly the CMA, have come decades too late to effectively steer development away from the coast.  A second is that the CMA’s goal of encouraging only water-dependent uses to be located in the coastal area has not been followed by the 34 towns in the coastal area which have the power to determine land use patterns through zoning.

The flaws in the current regulatory scheme prompted some environmental groups after Irene to call for a phased “retreat from the coast,” which immediately drew fire from property rights advocates in the legislature, and a legislative Shoreline Protection Task Force was created in the 2012 legislative session to study the issues.

Aside from the property rights issues involved in a governmental strategy of retreat, a significant problem in Connecticut would be that many coastal communities have a limited industrial/commercial tax base.  As a result waterfront properties comprise a disproportionately large share of the municipal grand list.  For government to try to force property owners out, or buy them out would leave many communities with a major revenue hole.  At a time of declining state revenues and a looming budget shortfall, it will be interesting to see how Connecticut’s General Assembly reacts to the impacts of Irene and Sandy in the legislative session beginning in January of 2013.

On December 12, 2012 U.S. Energy Secretary Steven Chu announced competitive awards of $4 million each for 7 offshore wind projects from Maine to Oregon, in 6 different states. I am the lawyer for the University of Maine's project, which involves plans to install a pilot floating offshore wind farm with two, six-megawatt direct-drive turbines on concrete, semi-submersible foundations. I am also working on permitting a smaller-scale pilot project for UMaine that would be deployed in early to mid-2013 as the first floating offshore wind project in North America.

The Department of Energy Department made the awards with the goal of beginning to speed the deployment of stronger, more efficient offshore wind power technologies and showcase innovative technologies -- helping to further lower costs and drive performance improvements.

In year 1, each project will receive up to $4 million to complete 50% of the design process, and to begin outreach, environmental studies and permitting work. DOE will in early 2014 select up to three of the projects for follow-on phases that focus on siting, construction and installation,  and aim to achieve commercial operation by 2017.The final projects will receive up to $47 million each over four years, subject to congressional appropriations.

Click HERE to read the full article from the U.S. Department of Energy.

Although the still-divided Congress is unlikely to pass significant new environmental legislation over the next four years, the second-term Obama administration has an opportunity to pursue its environmental agenda through the EPA with diminished fear of impacts on the next election. 

The current term saw a period of strong leadership at EPA, but there is a feeling that the agency has not allowed the other regulatory shoe to drop.  EPA stalled on several important regulations, as if anticipating the Romney complaint that excessive regulation was a cause of the recession. Having escaped the prospect of a president hostile to its mission, EPA is now prepared to roll out a queue of pending air pollution regulations in the coming weeks.  The regulations will include final national ambient air quality standards, revised power plant emission standards, and expanded boiler emission rules.   

Since the election, articles and opinion pieces have abounded that speculate on the Obama administration’s second-term approach to climate change. On November 12, 2012, the New York Times published an op-ed article suggesting that the administration could tackle both climate change and the recession by imposing a carbon tax.  A similar suggestion was made in the New Yorker on December 12, 2012.  This is undoubtedly a worthwhile concept, but it is probably a regulation too far.

The second Obama term could be an opportune time to revisit old chestnuts and resolve issues that have bedeviled both the regulated community and environmental advocates.  For example, the EPA and the Army Corps of Engineers have been muddling through a proposed guidance document that aims to clarify the Supreme Court’s murky definition of “waters of the United States” subject to EPA jurisdiction under the Clean Water Act. But why should EPA and the Corps issue mere guidance rather than promptly promulgate binding regulations, which are subject to judicial review?  As a result of adopting binding standards the agencies could gain, in addition to regulatory certainty, a strong basis to resist efforts to make the federal government the national waterfront rezoning authority.

Another stalled national environmental initiative that would benefit from robust leadership in the Obama II administration is EPA’s effort to update its regulations for industrial cooling water intake structures.  EPA proposed regulations, designed to protect aquatic organisms, have remained in draft form since March 2011; additional data has been collected and is being analyzed in the interim.  Pending final federal regulations, states have been left to adopt varying approaches to this important issue.

Finally, this period of relative freedom from election concerns might allow the administration to address a significant example of environmental unfairness, CERCLA’s scheme of sticking certain liable parties with the “orphan share” of environmental remediation costs that arise from contamination, generated over the last two centuries of industrial development, for which no financially solvent responsible party can be identified.  The orphan share is often laid at the doorstep of a financially solvent polluter that caused some, but not all, of the pollution at a Superfund site.  Fairness dictates that the public fund the orphan share, as opposed to the party that is prepared to step forward and clean up its own portion of the mess.  Perhaps such a policy might have a sobering effect on the members of the public who clamor for a return to pristine conditions, so long as they don’t have to pay for it.

All of us know that enforcement of the Clean Air Act’s (CAA) proscriptions against pollutant air emissions is premised on the concept of Acooperative federalism.  We know that the CAA’s policy development and enforcement regime is based upon a division of state and federal regulatory responsibility.  Stated simply, the concept is that the federal government, through the EPA, sets standards for permissible emissions of substances affecting ambient air quality while individual states retain responsibility for implementing programs to enforce these standards. 

The States’ implementation mechanisms are aptly titled State Implementation Plans or SIPs.  SIPs are employed to demonstrate that federal and state air pollution regulations will allow counties in a particular state to meet federally mandated ambient air quality standards (NAAQS).  The SIP process approval results in pollution control requirements which govern and often times unduly complicate compliance efforts of state regulators.  They can also increase compliance costs borne by the regulated community.  One aspect of that conundrum is the fact that when States fail to meet deadlines for attaining these standards, the regulators themselves can face sanctions from EPA and even suits by the public.  Litigation and its costs complicate matters further.

As some regulators in Pennsylvania recently observed . . . [T]he current aggressive schedules for NAAQS reviews, State Implementation Plan (SIP) development and promulgation of Maximum Achievable Control Technology (MACT) standards are significant problems. Taken together, these inefficiencies are a resource drain on EPA, the states, the regulated community and the economy as a whole.  The messy situation described in this quote is the subject of this blog.

The turbulence inherent in this divided relationship has escalated in recent times fraying the long-standing statutory regulatory compact between the federal government and the States.   

An instructive example of the conflict of enforcement concept and reality engendered by the CAA’s cooperative federalism scheme was clearly highlighted in the recent case WildEarth Guardians v. Jackson.  This case dealt with EPA’s delays in approving SIPs or pollution control plans affecting discharges of fine particulate matter or PM2.5.  The plaintiffs in Wild Earth alleged that EPA failed to take final action under section 110(k)(2) and (3) of the CAA to approve SIP submittals in twenty (20) states meeting applicable requirements respecting the 2006 PM2.5NAAQS. 

In 2006, the U.S. Court of Appeals for the District of Columbia had found that EPA’s PM2.5 NAAQS had to change because it failed to adequately protect human health.  A change in this NAAQS required a change in States SIPs.  SIPs were proposed but languished at EPA.  Five years later, the plaintiffs in Wild Earth alleged that . . . [W]ithout infrastructure plans, citizens are not afforded full protection against the harmful effects of PM2.5 while seeking declaratory and injunctive relief.
 
Shortly after the suit was filed the plaintiffs and the EPA entered into a settlement. A consent decree called for the EPA to approve or disapprove SIP submittals for the 2006 PM2.5 standard as early as September 12, 2012 for some of the states involved and as late as February 13, 2013 for others.  The Consent Decree was entered and the case dismissed in May of 2012.  Case closed and compliance efforts back on track? 

Unfortunately, many of the underlying issues raised in Wild Earth, specifically, the lack of cooperation between the States and the federal government on implementation of the PM2.5 NAAQS have raged on unabated.  For example, eleven (11) states sued the EPA over the agency’s alleged failure to promulgate final NAAQS for PM2.5.  In New York v. Jackson the plaintiffs are seeking a declaration that EPA is in violation of Section 109(d)(1) requesting that EPA review, propose and promulgate a new PM2.5 NAAQS.  On June 14, 2012, EPA announced a proposal to strengthen the NAAQS PM2.5.  Almost simultaneously, the D.C. Circuit issued an order refusing to set a schedule for EPA to issue a new PM2.5 NAAQS. Am.Farm Bureau v. EPA.

These developments will inevitably spawn additional delays in PM2.5 related SIP modifications and EPA approvals. That is the point of these comments on this small corner of CAA regulation and enforcement.  Is the cooperative federalism underpinning of the CAA still workable?  Can court’s recognize and respect the concept when regulatory policy, administrative lethargy and real human health concerns collide? These comments and observations have focused on the PM2.5 issue mainly because it has come up in some recent work in our office. 

Without doubt other and more far-reaching examples of regulatory and judicial “turbulence abound, i.e., the raging fight over the EPA’s Cross State Air Pollution Rule (CSAPR).  In a dissenting opinion on the CSAPR case, on the concept of cooperative federalism, Judge Rogers had this to say. . . [T] he result is an unsettling of the consistent precedent of this court strictly enforcing jurisdictional limits, a redesign of Congress’s vision of cooperative federalism between the states and the federal government in implementing the Clean Air Act based on the court’s own notions of absurdity and logic that are unsupported by a factual record, and a trampling on this court’s precedent on which the Environmental Protection Agency was entitled to rely . . . .  Whew! 

So what are CAA practitioners to make of the mess Judge Rogers eloquently describes?  This blog entry offers no practical guidance for those laboring for an aggrieved client nor laments a bad result impairing enforcement prerogatives of the regulators.  Instead, I only point out that it may be time for a concerted effort to step back and reconsider whether the CAA’s cooperative federalism’s bifurcation of rule promulgation and enforcement continues to make scientific, policy or common sense in today’s world.

On November 30, 2012, the United States Fish and Wildlife Service (“FWS”) announced its proposal to list the Lesser Prairie Chicken (“LPC”) as threatened under the Endangered Species Act (“ESA”).  The proposed rule resulted from a comprehensive 2011 settlement agreement approved by the D.C. Circuit in In re Endangered Species Act Section 4 Deadline Litigation 2011, whereby FWS agreed to review over 250 candidate species and make a determination as to each species whether to issue a proposed listing rule or to issue a finding that the listing is not warranted, over a six-year period.  Under the ESA, an endangered species is one that is in danger of extinction throughout all or a significant portion of its range, while a threatened species is likely to become endangered within the foreseeable future.  FWS will make a final determination on whether to list the LPC as threatened by September 30, 2013. 

The LPC is found across a five-state span, including Colorado, Oklahoma, New Mexico, Texas, and Kansas. Activities identified by FWS as threats to the species include habitat loss, fragmentation, modification, and degradation within the species’ range.  Other threats include land uses related to wind energy and transmission development.  If FWS ultimately lists the LPC as a threatened species, energy industry operations that could potentially harm the species would be affected.  Specifically, due to the species’ avoidance of tall, vertical objects, FWS has identified oil and gas wellheads and wind turbines as features that may cause habitat displacement for the bird.  Section 9 of the ESA prohibits the “take” of a listed wildlife species by a private or public entity.  Because “take” is defined quite broadly under the ESA, even activities that are not designed or intended to harm a species, but could do so indirectly, such as operation of these tall structures, could potentially constitute a violation.

Unlike endangered species, in regard to a species listed as threatened, FWS has the authority under ESA Section 4(d) to tailor the “take” prohibitions to the conservation needs of the species. The FWS may use its Section 4(d) authority to incentivize participation in conservation plans that will support recovery of the LPC.  Additionally, there are conservation plans that may be entered into by energy companies before a species is listed under the ESA.  Called Candidate Conservation Agreements with Assurances (“CCAAs”), these agreements, allow non-federal property owners to commit to implement voluntary conservation measures for a candidate species in return for regulatory assurances that additional conservation measures will not be required, and additional land, water, or resource use restrictions will not be imposed, should the species become listed in the future.  Furthermore, the proactive conservation efforts performed through CCAAs may remove or reduce threats to the covered species, so that listing the species under the ESA may become unnecessary.  CCAAs, therefore, provide a significant opportunity for a compliant energy company to potentially insulate itself from liability in the event the LPC is listed as threatened.  CCAAs have been developed for the LPC in New Mexico and Texas, and Oklahoma, under the leadership of the Oklahoma Department of Wildlife Conservation, has submitted a CCAA to FWS for review.  Notably, because the final listing determination for the LPC must be made September 30, 2013, time is of the essence for energy companies to consider entering into a CCAA.

See the FWS’s Proposed Listing
See the FWS’s News Release Regarding the Proposed Listing
See the FWS’s Facts Regarding the Proposed Listing

The regulation of vapor intrusion is becoming more prevalent on both the federal and state level. In addition, although not strictly required as part of a Phase I ESA under ASTM 05 and AAI, many consultants take the position that this issue must be addressed at this first level of environmental due diligence.

One of the troubling issues at the state level is whether background concentrations should be taken into account in the establishment of indoor air quality standards. Many household products and building materials contain or release VOCs. However, not all states take background concentrations into account in the regulation of vapor intrusion.

EPA is expected to release its own vapor intrusion guidelines shortly. EPA appears to acknowledge the importance of background data in the process of formulating its guidelines. It remains to be seen whether such guidelines will impose stricter standards than those on the state level.

The song “Cool Water” was written and recorded in 1936 by Bob Nolan, an original member of the Sons of the Pioneers along with Len Slye, better known by his film name, Roy Rogers.  “Cool Water” could be the theme song for Texas and other water-short western states.  The Texas Water Development Board recently compiled “Water for Texas 2012 State Water Plan”.   Quite simply, Texas does not have enough water to meet its current needs, much less its future needs, during periods of serious drought conditions.   Texas is searching for cool, clear water.

Texas continues to grow.  According to the Plan, the population of Texas is expected to increase 82 percent between 2010 and 2060, from 25.4 million to 46.3 million.   Water needs are projected to increase by 22 percent, from 18 million acre-feet per year to 22 million acre feet per year in 2060.  At the same time as water demand is rising, existing water supplies are diminishing by almost 2 million acre feet per year.   Where will the additional water supplies be found to meet the identified needs?

The State Water Plan includes recommended water management strategies developed by regional planning groups, which include: conservation, drought management, conjunctive use of surface and groundwater, surface water reservoirs, aquifer storage, groundwater development, water reuse, desalination plants.  In addition to addressing surface and groundwater water rights, water planners and users will need to confront the environmental implications of these strategies.  What are the environmental regulatory constraints and impediments?

The implications and potential conflicts are far-reaching.  We can all anticipate the obvious regulatory hurdles,  contested procedures and property rights obstacles that projects to develop new surface reservoirs will confront.  But what of other strategies like water conservation and reuse?    Proposing water conservation (e.g. increased cooling water cycles) and reuse (e.g. use of treated municipal wastewater effluent) at a natural-gas fired power plant may  threaten surface water quality as the total dissolved solids to be discharged are concentrated through these strategies.   Also, what kinds of measures and alternatives under other environmental regulatory programs (e.g. Endangered Species Act) will need to be considered as these strategies are proposed?

The history of Texas is growth.   To do nothing to meet its increasing  water needs would result in staggering economic losses.    Texas met the challenge after the drought of record in the 1950s.  Texas will do it again!   The question is:  “how happy will the trails be?”

Since the early days of the Superfund program, EPA has required settling parties to provide financial assurance of the PRPs’ (potentially responsible parties) ability to perform the cleanup work.  EPA regulations afford   PRPs a choice of financial assurance mechanisms to fulfill this requirement including:  a self-funded trust, bonds, letters of credit, insurance or the satisfaction of the “financial test” provided in 40 CFR §264.143(f). 

As originally promulgated, the financial test applied to owners and operators of hazardous waste facilities permitted under RCRA.  EPA has adopted this test for Superfund financial assurance requirements and state agencies have likewise borrowed it for their own programs.  For many years, the “financial test” was the least cumbersome method for PRPs to satisfy their long-term financial assurance obligations.  It was also attractive to PRPs because as long as at least one large company met the test, the other PRPs could save the cost of employing alternative financial assurance mechanisms such as prefunding their entire obligation or purchasing letters of credit.  Further, while the financial test in 40 CFR §264.143(f) does include very specific and complex financial criteria, in practice  EPA often found submission of financial statements or other public financial reports by large companies to be sufficient. 

In recent years, perhaps in recognition of the new economic order where major airlines, automobile manufacturers and even manufacturers of famous brands such as Twinkies have filed for bankruptcy, EPA has made strict compliance with the financial means test a settlement priority.  All of the forms for financial assurance are now prescribed via EPA’s website.  Perhaps the most challenging form for a financial means proponent is the sworn letter from the company’s CFO or accountant certifying that the company satisfies the different elements of the financial test.  The letter must be updated and resubmitted every year.  The form letter may be found here.

In an era where CFOs and accountants are already burdened with a host of new Sarbanes-Oxley requirements and other regulatory controls, companies are less than enthusiastic about preparing another set of certifications to EPA concerning their company’s financial status.  A further challenge presented by the letter is that it must be submitted on behalf of the specific entity participating in the settlement or its parent.  Often, a parent corporation cannot or does not want to guaranty a subsidiary’s obligations, and its subsidiary’s financials may not be maintained in a format which makes compliance with the EPA letter practical or feasible.

EPA’s renewed emphasis on financial assurance requirements is understandable in today’s economic climate and even has some benefit for performing parties interested in ensuring that other settling PRPs likewise perform.  Indeed, PRP Groups, with the self-interest of protecting themselves from each others’ business failures, often require their group members to provide letters of credit for the benefit of the Group or prefund their Superfund settlement shares into a Group- controlled trust, even if other financial assurance mechanisms have been selected to satisfy EPA.

Whether PRPs like it or not, what is clear is that the era of less than strict compliance with EPA’s financial assurance requirements for Superfund settlements is over. 

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

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

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

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

How far can affected stakeholders go in fashioning local, “place-based” solutions to water management problems?  In other words, is it OK to throw western water law out on its ear – a little bit -- if no one complains?

The policy question arises in Oregon in connection with recent efforts to balance the need for increased water supply to support the potential for substantial agricultural-based economic growth in the Umatilla Basin – a major Oregon tributary to the Columbia River system – with competing water demands to comply with the Endangered Species Act by restoring and protecting instream flow for listed salmon.  The balancing act also seeks to support treaty-based instream water rights for the Confederated Tribes of the Umatilla Reservation (CTUIR) and restore severely depleted ground water supplies (See CRUSTaskforce). The desire of stakeholders to explore new ideas that go beyond the boundaries established by existing water law is a foreseeable consequence of Oregon’s long-standing commitment to locally-based collaborative efforts to resolve complex natural resource issues  (See Oregon Solutions and http://www.oregon.gov/owrd/LAW/docs/i_Chapter_4_Final.pdf). Just how far should state bureaucrats be willing to go in bending or changing traditional programs and policies to make way for customized, place-based solutions?

The specific example in the Umatilla Basin relates to proposals for establishing a water bank and brokerage system.  (See http://orsolutions.org/beta/wp-content/uploads/2012/06/Oregon-Solutions-Presenation-6_18_2012-CRUST.pdf). A broad-based coalition of local interests including individual farmers, irrigation districts, the CTUIR, conservation interests, local governments and agri-businesses have jointly proposed an option for collaborative water management.  Under their concept, each year a water management plan would be filed with the state to describe how water would be used, and possibly redistributed under existing water rights.  The concept includes a bottom line requirement that the water management changes not result in injury to any water user not participating in the plan, and not diminish instream flows.  No harm, no foul.  However, in preliminary discussions, the Oregon Water Resources Department – the state agency in charge of allocating and administering water rights -- has balked at the plan because it could allow water users to ignore priority dates and “spread” water – concepts traditionally abhorred in Western water law.

So, the question is:  Should government get out of the way to let water users figure out their own strategies for managing water – even if it would throw certain principles of Western water law out on its ear? Why not, if it reflects a local consensus and no one complains?

On March 13, 2012, eleven environmental organizations, led by Gulf Restoration Network ("GRN"), filed
a federal Clean Water Act (CWA) citizen suit which demanded that the U.S. Environmental Protection
Agency (EPA) set federal numeric standards for nitrogen and phosphorus for water bodies within the 31
states comprising the Mississippi River Basin ("Basin States"). Gulf Restoration Network v. Jackson,
E.D. La., No. 2: 12-cv-00677 ("GRN Suit"). The complaint alleges that EPA has failed to develop
numeric water quality criteria for nitrogen and phosphorus in the Basin States. EPA's answer states that it
is appropriately deferring to each state to promulgate numeric nutrient criteria ("NNCs") that satisfy
Clean Water Act water quality standards within the state and that, consequently, federal NNCs are not
appropriate. The trial judge ruled on September 19, 2012 that the case will be decided on "cross-motions
for summary judgment, with no initial disclosures or other discovery." In the same order, the judge set a
briefing schedule for the parties (including numerous entities to which the court granted permission to
intervene) that will extend through the beginning of June of next year.

The GRN Suit, as well as other similar suits that are active in other regions, have prompted many state
environmental agencies to work diligently, pursuant to EPA's deference and also its demand, to develop
NNCs as quickly as possible. If EPA wins the GRN Suit, the Basin States will have to be ready to go
forward with promulgation of their NNCs. If EPA loses, they may be subjected to more stringent federal
NNCs on a "one size fits all" basis. A settlement could mean an even different outcome for all ofthe
parties.

In Mississippi, the state's Department of Environmental Quality ("MDEQ") has formed a Nutrient
Technical Advisory Group (TAG) to develop scientifically defensible NNCs that are appropriate for
Mississippi's surface waters. The TAG is composed ofMDEQ staff, MDEQ's external consultants and
in-state university personnel who have water quality expeiiise and is meeting on a regular basis. MDEQ
staff members have stated that the agency's plan is to have draft NNCs developed for all state waters,
excluding the heavily agricultural Delta counties, by June 30, 2013. The draft NNCs for the Delta are to
be developed by November 30, 2014. MDEQ wil then publish these draft NNCs for public comment.

MDEQ has held several stakeholder meetings to discuss the development of Mississippi's NNCs and to
provide an opportunity for questions and comments. The MDEQ staff members have consistently
explained that they are considering "what is protective of the environment" rather than "what is
technically achievable." The new NNCs wil be "worked into permits" as they come up for renewal and
permittees wil be allowed a "reasonable time frame" to come into compliance with the new NNCs.

The key issue for the regulated community in Mississippi, as in other states, will be the cost of
compliance with these new NNCs, which could bear a very expensive price tag. In Florida, for example,
a national environmental engineering consultant prepared an economic analysis of proposed NNCs. The
estimate for direct compliance costs ranged from $ 1.5 bilion annually (best management practices for
impaired water categories) to $4.5 billion annually ("end of pipe" requirements for all water categories).
Regulated communities in Mississippi and in other states across the country are engaging with scientific
and economic data and consultants in order to have an impact concerning this volatile issue. A lot is on
the line.