Posted on April 13, 2017
On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations. The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.
The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes. The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:
foresee a situation where [it] would take any future response action as a result of such notification[s].
Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context. The Court concluded that EPA had not justified a de minimis exception, because:
an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”
Here, the Court found that there were benefits to requiring reporting without a de minimis exception. That was enough to vacate the rule.
It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.” Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron. Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.
I don’t have any problem with that. Phase I of Chevron is an important bedrock principle. If there’s no ambiguity, there’s no deference. However, it’s worth noting that Judge Brown also stated that:
an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.
Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring. One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.
Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.
Posted on April 6, 2017
Earlier this week, the 9th Circuit Court of Appeals rejected challenges to the Federal Implementation Plan EPA promulgated after finding that Arizona’s regional haze State Implementation Plan was inadequate. I think that the result is both correct and unsurprising.
However, one part of the opinion – a recitation of black-letter law – caught my eye. In discussing the standard of review, the court noted that the arbitrary and capricious standard is “highly deferential.” No surprise there. It also noted that courts are particularly deferential when reviewing agency scientific determinations. Also no surprise.
What happens if EPA eliminates all of its climate science expertise, and then eliminates the Endangerment Finding? Certainly, a court could still recite the traditional level of deference, but then note that “deference is not abdication” and rule that EPA’s decision must be reversed even under the deferential threshold.
What happens if the Trump administration repeatedly makes regulatory decisions based on a “scientific” viewpoint that is so broadly rejected by the scientific community that “scientific” must be put in quotation marks? Might courts at some point conclude that EPA has forfeited the deference normally given to agency scientific decisions?
Just asking. It’s purely a hypothetical, of course.
Posted on April 5, 2017
Since the election of President Trump and appointment of EPA Administrator Pruitt, more than a few articles and blogs have been written about the new administration’s plans to dismantle EPA, including the proposal to cut EPA’s budget by almost one third. Even if one agrees that EPA needs to be “down-sized,” the massive cuts proposed by the Trump Administration are counter-productive. If EPA fires thousands of environmental professionals, who will be left to repeal or revise unnecessary or unduly burdensome regulations? Unlike Executive Orders, regulations cannot be rescinded or revised with the stroke of a pen.
The hazardous waste regulations adopted to implement RCRA provide a case in point. The Obama EPA adopted the final Hazardous Waste Generator Improvements Rule (discussed by a recent blog by Donald Stever) at the end of last year, acknowledging that the RCRA regulations are in many cases ambiguous, contain inconsistencies, and lack flexibility. EPA took a year to address more than 200 comments before it finalized the rule. Other aspects of the RCRA regulations also need to be modernized to encourage, rather than discourage, the reuse of materials derived from waste.
Just one example involves the recycling of mercury-containing lamps, which have been regulated as Universal Waste since 1995. Although fluorescent lamp manufacturers have reduced the amount of mercury in their lighting over time, such lamps are regulated as Universal Waste because many lamps exhibit the toxicity characteristic for mercury; and thus, would be classified as D009 hazardous waste. While the Universal Waste Rules simplify the management of mercury containing lamps, the hazardous waste regulations and longstanding EPA interpretations of these rules impede the reuse of materials recovered through the recycling of universal waste lamps.
Two of the primary materials produced through lamp recycling are calcium phosphate powder and crushed glass. Calcium phosphate powder removed from fluorescent lamps contains mercury at levels below the hazardous waste threshold, and the amount of mercury in such powder is typically further reduced by a retorting process. Significantly, the phosphate powder also contains several rare earth elements, including Europium, Terbium and Yttrium, which are considered strategic materials by the United States Government, because of the need for such elements in many military and high-tech commercial products, such as cell phones, computer hard drives and other electronic equipment, and precision-guided munitions.
China controls about 95% of the production of rare earth elements. Therefore, recycling calcium phosphate powder to produce rare earths provides a sustainable, domestic source of rare earths needed in the U.S. economy. Unfortunately, as a waste derived material, regulators have limited the ability of businesses to stockpile calcium phosphate powder for future recycling, and much of this material is currently being disposed of in landfills, rather than being reserved for the recovery of rare earths.
Similarly, the crushed glass produced by lamp recycling has characteristics that make it a useful substitute for sand and other materials used in construction operations, such as for road sub-base and pipe bedding materials. EPA’s view, however, is that since Universal Waste lamps would be considered D009 hazardous waste, glass produced as part of the recycling process is in the same hazardous waste treatability group as the initial universal waste lamps, and therefore, is subject to the Land Disposal Restrictions (LDR) for D009 –non-wastewaters. Thus, the glass must be tested to demonstrate compliance with the LDR standard of 0.025 mg/l for mercury using the TCLP test (designed to assess leachate in a landfill environment), before the glass can be used on land as a substitute for other products. While the glass from lamp recycling typically complies with the LDR standard, the additional regulatory process discourages the reuse of this glass as a substitute for raw natural resources.
If President Trump were truly interested in alleviating “unnecessary regulatory burdens placed on the American people”, EPA needs the resources to review specific regulations and identify those regulatory changes that will accomplish the President’s goals. Slashing EPA’s budget, before identifying and promulgating the regulatory changes, will likely result in missed opportunities for improving environmental regulations. Instead, massive reductions in staff and efforts to rescind many regulations without careful consideration will lead to mistakes and litigation, which is in no one’s interest. Businesses need certainty, and the approach outlined by President Trump’s Executive Orders will instead result in more confusion and uncertainty.
Posted on April 3, 2017
Regardless of political leanings or perspectives held regarding this President and his administration or the likely effectiveness of tariffs in global trade, we likely agree that creating more good American jobs is a positive thing. If his plan is successful, Donald Trump and this administration will, in part through the use of tariffs, reinvigorate domestic manufacturing.
If willing to think more broadly, this may be achieved while at the same time improving (and setting the stage to further improve) the global environment and international worker safety. These objectives need NOT be mutually exclusive.
Both the Republican and Democratic primaries featured unique candidates with compelling messages of creating and protecting jobs for Americans. The Republican candidate survived his primary and went on to win the election, so let's consider the relevant promises and pronouncements of candidate, now president, Trump. His overarching refrain has been to "make America great again". Consistent with this message, he has repeatedly assured the American public that he will promote, and ultimately increase, domestic manufacturing. His vision is that this manufacturing, and the related jobs, will improve the lot of American workers. While offering limited specifics, he has been unwavering in his commitment to level the economic playing field by imposing significant tariffs on goods and services manufactured abroad.
If President Trump is correct relative to the effectiveness of a tariff and willing to adjust this blunt tool to incorporate concerns for the global environment and humane working conditions, he can provide a path that leads to greater domestic manufacturing and jobs, as well as unparalleled international leadership with respect to the environment and worker safety. This is possible provided President Trump is willing to leverage the appetite of overseas manufacturers to sell goods and services to Americans in return for a more level manufacturing playing field, as well as enhanced international Environmental Health and Safety (EHS) protections and benefits.
Assuming this administration does, in fact, look to tariffs as a means to stimulate domestic manufacturing, the following offers a path to proceed with the stated agenda while establishing a program designed to employ even more well trained Americans and improve the global environment:
1. TARIFFs could be structured to afford the impacted offshore manufacturer with the following option: (A) PAY THE FULL TARIFF. This option would presumably level the economic playing field between the offshore and domestic manufacturer of goods or provider of services; or (B) PAY A REDUCED TARIFF and EXECUTE AN EHS INSPECTION/ENFORCEMENT AGREEMENT. This option would achieve not only the U.S. manufacturing and jobs agenda, but also would drive international EHS benefits. A significant portion of the REDUCED TARIFF could be used to directly fund an environmental, health and safety inspection corps (EHS Corps). This EHS Corps would be comprised of appropriately educated and trained American workers. Notably, these EHS positions would be in addition to our domestic manufacturing jobs and represent even more American jobs for those with science, engineering, operations, and business and legal degrees. THE INSPECTION/ENFORCEMENT AGREEMENT would also call for the participating company to submit to regular inspections, an enforcement regime and an administrative/judicial process similar to our federal template. This Agreement would further level the manufacturing playing field while improving the global environment and driving international EHS performance to levels comparable to our federal programs.
2. The EHS Corps would regularly inspect REDUCED TARIFF participants using a straightforward template approximating the United States federal EHS regulations. This approach would not only compel offshore participants to achieve environmental protection and worker safety objectives similar to their U.S. counterparts, but also cause them to incur the same or similar resource and financial burdens to comply with this template or suffer enforcement consequences if they fail. This compliance mandate when combined with the payment of the REDUCED TARIFF, would further level the playing field between offshore and domestic manufacturers. Should a participant be a repeat or willful violator, then beyond the sanctions available within the REDUCED TARIFF inspection and enforcement regime, the U.S. would reserve the right to re-impose the FULL TARIFF or consider other import/export sanctions.
3. Strategically, the differential between the FULL TARIFF and the REDUCED TARIFF should motivate responsible corporations and businesses to elect the REDUCED TARIFF. Beyond this, the REDUCED TARIFF should generate adequate revenue to fund the training and deployment of the EHS Corps as well as the inspection/enforcement process.
President Trump and his administration can be true to their stated commitment to increase domestic manufacturing jobs through a more aggressive tariff while going one important step beyond, establishing the U.S. as an architect and catalyst for an improved, and more internationally uniform, approach to environmental, health, and safety concerns.
NOTE: THE CONCEPT OUTLINED ABOVE IS NOT AN ENDORSEMENT OF TARIFFS, BUT A REFLECTION OF ATTY. PHILLIPS BASED ON THIS ADMINISTRATION’S PRONOUNCEMENTS. THIS IS NOT THE PRODUCT OF HIS LAW FIRM OR THE UNIVERSITY AT WHICH HE TEACHES.
Posted on March 31, 2017
Make no mistake, the Executive Order signed by President Trump at EPA yesterday is a big deal. Time will tell whether the Administration’s U-turn on the Obama rules currently in litigation, such as the Clean Power Plan and the rule on fracking on federal lands will make any difference to judicial review of those rules. There are plenty of states and NGOs ready to step into EPA’s and BLM’s shoes to defend those rules.
Regardless, though, it’s important. Social cost of carbon? Poof. Gone. Climate Action Plan? Gone. Consideration of climate change in environmental impact reviews? Gone.
We already know all this, though. I’d like to focus on a few details concerning the EO that might have gone unnoticed.
- The order states that development of domestic natural resources “is essential to ensuring the Nation’s geopolitical security.” I found this statement interesting in light of the recent statements by Secretary of Defense Mattis, who very clearly stated that climate change is real and is itself an important security risk.
- The order states that environmental regulations should provide “greater benefit than cost.” I found this statement somewhat odd, given that the President’s prior EO known as the 2-for-1 order, essentially requires agencies to ignore the benefits of regulations and focus solely on the costs that they impose.
- Similarly, the Order requires agencies, in “monetizing the value of changes in greenhouse gas emissions resulting from regulations,” ensure that their analyses are consistent with OMB Circular A-4, issued in 2003. The Order states that Circular A-4 embodies “best practices for conducting regulatory cost-benefit analysis.”
I’d be interested in knowing if a single one of the authors or peer reviewers of Circular A-4 have anything nice to say about the 2-for-1 Order?
Posted on March 30, 2017
On November 28, 2016, EPA released its somewhat euphemistically titled “Hazardous Waste Generator Improvement Rule” (81 Fed. Reg. 85732) which, in a whopping 97 pages of miniscule federal register text, revises the structure, and in some cases the substance of the rules that apply to generators of hazardous waste under RCRA. I have no space in a blog to detail the substantive changes, tweaks and repositioning to Parts 257, 260, 261, 262, 263, 264, 265, 268, 270 and 279, but I will mention some highlights. This is, of course, a major rule, but it is also an important rule in that it sensibly addresses a wide range of longstanding problems in both the organization and substance of the regulatory provisions that govern the conduct of entities that generate hazardous waste.
The largely needed and helpful changes made by the rule include (1) subtle modifications to the definitions of the three generator categories, (2) refinement of how accumulation of both hazardous waste and acutely hazardous waste is treated, (3) adding a definition of “central accumulation area, (4) adding a requirement that partial reclamation facilities and recyclers who receive manifested hazardous waste submit biennial reports, (5) and a substantial reorganization of § 262.10 by deleting and re-numbering several of its subsections while amending them in the process. In addition, EPA added new requirements for making hazardous waste determinations, attempts to define what “generator knowledge” means in connection with testing, changes certain recordkeeping requirements, and requires small quantity and large quantity generators to identify waste codes associated with their waste. The rule specifies procedures for counting hazardous waste, revises the mixture rule, amends the marking and labeling requirements by adding very specific requirements, adds not insubstantial new requirements for the use of satellite accumulation areas (my favorite sub-amendment is EPA’s effort to define the term “three days”), adds new closure requirements, revises the conditions for exemption from various requirements for all three generator categories, imposes a new “re-notification requirement” to obtaining an ID number, modifies the criteria for episodic generation events, and imposes new requirements for emergency planning,
There are other changes, a few of them, well, mystifying. My favorite is what appears to be a meaningless nomenclature change. From November 19, 1980 until November, 2016, if you generated 100 kg or less of hazardous waste or 1 kg or less of acutely hazardous waste you were called a “Conditionally Exempt Small Quantity Generator”. After the effective date of the ‘Generator Improvement Rule” you are now called a “Very Small Quantity Generator”. EPA’s explanation for this change is truly wonderful - EPA felt that the term “conditionally exempt small quantity generator” was confusing because “all three categories of generators are conditionally exempt” from certain requirements. 82. Fed. Reg. 85740. Gee, I was never confused nor, to my knowledge, were any of my generator clients. I was also amused that EPA felt it necessary to try to define the term “three days” in connection with a provision pertaining to satellite accumulation.
Overall, however, this is a major, beneficial, rule. So what is the point of the heading to this blog? In the required boilerplate at the end of the preamble prior to the twenty-five pages of the actual rule, EPA concludes, as it must, that it is not required to subject the rule to scrutiny under the Congressional Review Act because the action is “not a major rule” as defined by 5 U.S.C. 804(2). The Congressional Review Act? Hmmm. Is that all? No. In order to push this clearly beneficial rule out the door, not only did EPA employees have to generate 69 pages of notice-and-comment verbiage, but, in addition, also the Agency had to (a) submit the rule to OMB per Executive Orders 12866 and 13563 because though not “major”, it is a “significant regulatory action” in that it “may raise novel legal or policy issues arising out of legal mandates”, (b) satisfy the Paperwork Reduction Act by demonstrating that the rule is necessary, (c) satisfy the Regulatory Flexibility Act by demonstrating that the rule will not have a significant economic impact on small entities, and, in addition, also demonstrate that (d) it does not contain an unfunded mandate in violation of the Unfunded Mandates Reform Act, (e) it does not have “federalism implications” per Executive Oder 13132, (f) it does not have sufficient “tribal implications” to trigger review per EO 13175, (g) it does not present a disproportionate risk to children per EO 13045, (h) it does not significantly affect energy supply, distribution or use per EO 13211, (i) it does have environmental justice implications per EO 12898, and (j) it does not involve technology transfer.
Just think of the number of employee hours it took for EPA to make these largely sensible modifications to the RCRA generator requirements. If Mr. Pruitt gets his wish to shrink EPA staff by 30% how is the Agency going to get anything accomplished?
Posted on March 15, 2017
Then-candidate Donald Trump’s unauthorized use of REM’s 1987 song, “It’s the End of the World as We Know It (And I Feel Fine)”, during a 2015 campaign rally sparked a sharp objection by the band’s Michael Stipe. Flash forward to 2017 and now-President Trump has been flexing his executive powers in a number of legal fields; for many environmental, energy or immigration lawyers it’s the end of the regulatory world as we knew it for decades, and they are not feeling so fine.
Executive Orders (EOs) raise classic constitutional law issues of the separation of powers, in that they often are used for “executive legislating” even though there is no explicit constitutional authority for them. EOs also blur traditional regulating lines, because they are not issued with public notice or comment, and usually state that they do not “create any right or benefit enforceable at law or in equity by any party against the United States.”
An EO can have the force of law, however, if the EO is based on either the Constitution or a statute, per the Supreme Court’s 1954 Youngstown decision. That is why one must carefully read each EO to determine the grounds of its authority, and then whether it is possibly contrary to a) existing laws or b) constitutional provisions such as due process or equal protection.
Facing an uncooperative Congress, POTUS Obama came to rely on EOs in his last two years in office (see this prophetic 2015 School House Rock episode). POTUS Trump took to EOs right out of the gate. The two Trump EOs that have garnered the most publicity and outcry deal with immigration restrictions The first EO was challenged in numerous courts, and the 9th Circuit issued on February 9 the first appellate decision on a Trump EO. Interestingly, and instructive for future litigants and legal counsel, the first issue addressed by the 9th Circuit, and the one they discussed the most, was . . . standing. The court then moved on to reviewability, and only briefly due process and equal protection. The complaint’s count on violating the Administrative Procedure Act for not following proper rulemaking proceedings was not even discussed in the ruling.
Trump issued two EOs of more relevance to environmental and energy lawyers. First was the January 30, 2017 EO entitled “Reducing Regulation and Controlling Regulatory Costs”, aka the add-one-subtract-two, no-increase-in-incremental-costs [undefined]- of-regulations EO. That was followed by the February 2, 2017 Interim Guidance of the OMB implementing (and implicitly amending) the EO by limiting it to “significant regulatory actions”—i.e. those of $100 million or more of annual effect on the economy. A week later the EO and IG were both challenged in federal court in D.C. as violating the APA, separation of powers, the Constitution’s “Take Care Clause”, and as being ultra vires. Plaintiffs referenced in part OSHA, TSCA, the ESA and CAA, and other energy/environmental laws as being inconsistent with the EO’s requirement that a new rule can only be promulgated if its cost is offset by the elimination of two existing rules. The EO ironically signals the possible demise of cost-benefit analysis —first mandated by then POTUS Ronald Reagan by an EO in 1981—by disallowing consideration of the economic benefits of a regulation when weighing its costs.
Many more EOs are promised in the coming weeks concerning a variety of environmental and energy laws and regulations. Early in the wave was the February 28, 2017 EO with the majestic name of “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ [aka WOTUS] Rule”. This EO directs the EPA to review the WOTUS Rule while keeping in mind the national interest of “promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.” Since WOTUS was a final rule published in the Federal Register, it can only be repealed and replaced by a new rule that goes through full notice-and-comment rulemaking, not simply by a non-legislative guidance or policy statement.
One who lives by the EO sword can slowly die from it too. POTUS Obama did not submit for approval to Congress the Paris Climate Change Agreement of 2016, calling it an “executive agreement”, thus POTUS Trump does not need Congressional approval to undo it. The Agreement terms do not allow withdrawal by a party before November 2019. However, the U.S. could withdraw from the overarching United Nations Framework on Climate Change with one year notice, if the Senate approves, and that in effect would undo our Paris “commitments”. And as a practical matter, the current Administration could also just choose not to implement the Paris obligations, because there is no binding duty to hit the emission reduction targets.
In sum, we live in interesting times. Although Jack Black has said of this Administration that “It’s the end of the world”, for College members and their clients it’s the start of some fascinating new adventures in regulation and litigation. Stay tuned.
Posted on February 24, 2017
Here’s a thought exercise: I’ll give you a budget of 25 words (including conjunctions, articles, and all the other little ones). You use up a word by either deleting, adding, or replacing one in an existing federal environmental or natural resources statute. How much could you transform the field of practice with just those 25 word edits? The answer is, quite a lot.
When we think of statutory reform, we usually think big, right on up to “repeal and replace.” But after more than 25 years of very little legislative action on federal environmental and natural resources statutes—the National Wildlife Refuge Improvement Act, Sustainable Fishing Act, and the recent Toxic Substances Control Act reforms are a few exceptions since the 1990 Clean Air Act amendments—much rides on the accumulations of judicial and agency interpretations of the meaning of a word here and a phrase there. As we enter a period of potential legislative volatility in this field, therefore, the rifle shot may be just as much in play as the nuclear bomb.
Like any statutory reform, rifle shots can make regulatory statutes either more or less regulatory. For example, one could add “including carbon dioxide” or “excluding carbon dioxide” in just the right place in the Clean Air Act and with those three words put an end to a lot of debate and litigation. Given the current political climate, however, it’s reasonable to assume any rifle shot would be aimed at reducing regulatory impacts. But even with just 25 words in the clip, one could transform the impact of several regulatory programs before running out.
For example, delete the words “harm” and “harass” from the statutory definition of “take” in the Endangered Species Act (ESA) (16 U.S.C. 1532(19)) [LINK 1] and you have a very different regulatory program. Much if not most of the land use regulation impact under the ESA stems from the inclusion of those two words; without them, the ESA’s prohibition of unpermitted take would restrict actions like hunting, killing, shooting, and wounding, but could not reach indirect “harming” from habitat modification. Of course, the interagency consultation program under Section 7 (16 U.S.C. 1536(a)(2)) [LINK 2] would still be in place, prohibiting federal agencies from taking actions that “jeopardize” the continued existence of species. But just add “substantially” before “jeopardize” and the practical effect of that prohibition is greatly reduced.
I’ve managed to transform the ESA, vastly reducing its regulatory impact, with just three word tweaks. Twenty-two to go. Here are some more examples. I’ll let readers evaluate the impacts.
· Speaking of evaluating impacts, the environmental impact review process of the National Environmental Policy Act (NEPA) can really slow things down (42 U.S.C. 4332(B)). [LINK 3] To “streamline” the process, add the word “direct” before “environmental impact” in subpart (C)(1), which would eliminate the current practice of requiring analysis of indirect and cumulative impacts, and delete subpart (C)(iii), which requires agencies to evaluate “alternatives to the proposed action,” to remove a factor that bogs down much NEPA litigation. (Six more words down, sixteen to go.)
· Heard all the commotion about which “waters” are subject to the Clean Water Act? Clear that up by changing the statutory definition of “navigable waters” (33 U.S.C. 1362(7)) [LINK 4] to read “waters of the United States subject to navigation.” That would be pretty extreme—it would remove most wetlands from jurisdiction—so one could control how far jurisdiction extends over wetlands by adding and their adjacent wetlands.” This would draw the line much closer to navigable water bodies than current interpretations reflected in Supreme Court opinions and agency regulations—Rapanos and the Water of the United States Rule become history. (Seven more words down, nine to go.)
· And if you also want to put to rest the question whether the Clean Water Act applies to groundwater, edit the front end of the definition to read “surface waters.” (Another word down, eight to go.)
· The Circuits are split over whether the Migratory Bird Treaty Act’s list of prohibited activities (16 U.S.C. 703(a)), [LINK 5] which includes to “take” or “kill,” sweeps within the statute’s reach any “incidental” taking or killing—injury or mortality that is not the direct purpose of the activity, such as strikes by wind turbines. Easy to solve! Add the word “purposeful” before the list of prohibited activities. (Another word down, seven to go.)
· And, while we’re at it, let’s go ahead and add “excluding carbon dioxide” to the Clean Air Act definition of “air pollutant” (42 U.S.C. 7602(g)). [LINK 6] Adios, Clean Power Plan. (Three more words down, leaving just four to go.)
I’ll leave it to readers to think about how to use the last four words. The point here is that the system of environmental and natural resources law has become quite fragile. With Congress out of the picture for so long, courts and agencies have built up an interpretation infrastructure under which a single word or phrase often carries a tremendous burden of substantive and procedural program implementation. As a consequence, a mere tweak here and there can have dramatic effects on the program.
Granted, anyone who closely follows the statutes tweaked above will quickly appreciate the impact of any of the tweaks, and I’ve chosen some powerful examples unlikely to slip by any such experts. But subtler tweaks buried deep in a larger bill could more easily fly below the radar.
It remains to be seen whether Congress takes this rifle shot approach or goes bigger. Rifle shots don’t eliminate or “gut” entire programs, which may be the current congressional appetite, but the above examples show the potency of this approach. I for one will be keeping my eyes out for rifle shots in bills every bit as much as I will be following the big bomb reform efforts. Do not underestimate the power of the tweak!
Posted on February 14, 2017
Citing its deep decline in numbers, on January 10, 2017, the U.S. Fish and Wildlife Service (“FWS”) listed the rusty patched bumble bee, Bombus affinis, as endangered under the Endangered Species Act (“ESA”). FWS estimates the rusty patched bumble bee population has seen as much as a 91 percent reduction since the mid to late 1990s. Twenty years ago, this species was practically ubiquitous in eastern North America, spanning across 28 states. Now its territory covers only small regions in 12 states: Illinois, Indiana, Maine, Maryland, Massachusetts, Minnesota, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and Wisconsin.
This listing is the first for bees under the ESA, but unlikely the last. Like the rusty patch bumble bee, other bee species are facing steep declines in their respective populations. Declining bee populations are troubling, because bees, as pollinators, are vital to the U.S. agricultural industry. According to a study conducted in 2010 by Cornell University, bees and other pollinators are estimated to contribute a total of $29 billion to the industry, with $16.35 billion attributed specifically to pollination.
The direct cause of these dramatic declines in bee populations is undetermined and likely due to a multitude of factors. FWS states the threats to the rusty patched bumble bee include disease, exposure to pesticides, habitat loss, and climate change. This listing will likely intensify the debate over commonly used pesticides, including neonicotinoids, which have undergone additional scrutiny after a 2016 study published in Nature linked the use of neonicotinoids to the decline of wild bee populations in England.
FWS published the proposal for this listing in the Federal Register on September 22, 2016 and the final listing was published in the Federal Regulation on. January 10, 2017. However, due to the Trump administration’s Inauguration Day memorandum halting or delaying any new federal regulations, the ESA’s protection for the rusty patch bumble bee is delayed until March 21, 2017-a stinging result.
Posted on February 9, 2017
Earlier this week, the Climate Leadership Council rolled out The Conservative Case for Carbon Dividends (note the absence of the “T” word in that title!). It’s a serious proposal and, if we lived in a world of facts, rather than alternative facts, it would be a useful starting point for a discussion.
Here are the highlights:
- A gradually increasing carbon tax, starting somewhere around $40/ton.
- Return of all revenue from the tax to citizens through dividend checks. The CLC predicts that the 70% of Americans with lowest income would receive more in dividends than they would pay in taxes.
- Border carbon adjustments.
- Elimination of existing carbon regulations. It’s not clear what this would cover, but it would include at least the Clean Power Plan. It would also include elimination of tort liability (presumably limited to tort liability related to claims concerning climate change).
I’d sign up for this today, but I’m not exactly one of the people that needs convincing. According to GreenWire (subscription required), former Secretary of State James Baker, who led the public presentation of the report, acknowledged that attaining enactment of the proposal would be an “uphill slog.” I think that’s putting it mildly. The CLC members are basically a who’s who of the old-line GOP mainstream – precisely the types that President Trump appears to have consigned to the dustbin of history.
Nonetheless, hope springs eternal and we have to start somewhere.
Posted on February 8, 2017
President Donald Trump’s first weeks in office have seemed like a reality TV show highlighted by frequent signing ceremonies for hastily-drafted executive orders. One of these orders, signed on January 30, is entitled “Reducing Regulation and Controlling Regulatory Costs” (Executive Order 13771). President Trump described it as mandating “the largest cut by far, ever in terms of regulation” and the key to “cutting regulations massively” for businesses. The order requires federal agencies to repeal two existing regulations for each new regulation they issue and it gives each agency a regulatory budget of zero for the imposition of aggregate costs on industry during the current fiscal year.
The words “cost” or “costs” appear 18 times in the executive order; entirely missing from it is any discussion of the benefits of regulation. By focusing solely on reducing the costs of regulation, President Trump is repeating a crucial mistake the Reagan administration made after launching a major “regulatory reform” initiative in 1981. President Reagan’s Executive Order 12291 created a new system of regulatory review centered in the Office of Management and Budget (OMB). It mandated that federal agencies perform cost/benefit analyses to support any major rule likely to cost more than $100 million annually. Subsequent Presidents of both parties have retained this requirement and the centralization of regulatory review in OMB’s Office of Information and Regulatory Affairs.
Unlike Trump’s executive order, Reagan’s order directed federal agencies to consider both the costs and benefits of regulation. It specified that such agencies should seek to maximize net benefits to society and to issue regulations only when their potential benefits outweighed their potential costs. However, the Reagan administration undermined these directives by maintaining that costs and benefits need not be weighed when an agency proposed to repeal a regulation. This contributed to a disastrous effort to repeal limits on the amount of lead additives that could be used in gasoline.
At the direction of Reagan’s Task Force on Regulatory Relief, EPA proposed to repeal the lead limits that had been sustained in the D.C. Circuit’s historic, en banc decision in Ethyl Corporation v. EPA. While this would have saved oil refiners a small amount of money, it would have dramatically increased lead poisoning, costing society far more. Yet, despite the Reagan administration’s new emphasis on cost/benefit analysis, no cost/benefit analysis was performed because EPA was proposing to repeal a regulation.
The rulemaking to abolish limits on lead in gasoline spawned such a firestorm of opposition, even from conservative columnist George Will, that the Reagan administration was forced instead to strengthen the regulation. Three years later, after William Ruckelhaus had returned to lead EPA, the agency performed a cost/benefit analysis of phasing lead out of gasoline entirely. After the analysis found overwhelming net benefits from banning leaded gasoline, EPA did so. Today nearly every country in the world has followed the U.S. in banning leaded gasoline, dramatically reducing lead poisoning. Economists estimate that lead phase-out now generates more than two trillion dollars per year in net benefits globally.
Under President Trump’s new executive order, federal agencies must repeal two rules, regardless of their benefits, in order to take any new regulatory action. And the costs of the new regulation must be offset by the reduced costs from repealing existing rules. Thus, if EPA wants to strengthen regulations on lead in drinking water to protect people like the residents of Flint, Michigan, Trump’s executive order requires it to repeal two existing rules, for example (god forbid) by no longer prohibiting oil refiners from adding lead to gasoline.
President Trump’s executive order has legal qualifiers that offer some hope. It purports not to “impair or otherwise affect” agencies’ existing legal authority and it requires federal agencies to comply with the Administrative Procedure Act (APA) when repealing rules. The APA’s judicial review provisions direct courts to strike down agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” If an agency’s only justification for repealing a rule is to comply with President Trump’s new directive, it should be possible to convince a reviewing court that the action is arbitrary enough to be struck down.
President Reagan’s efforts to relax environmental regulation generated a backlash in Congress, which responded by greatly strengthening the environmental laws and adding numerous deadlines for EPA action. But that was because Congress then was controlled by lawmakers who cared about environmental protection. Today’s Congress is controlled by lawmakers who regularly campaign against EPA regulations. Regulations that are outmoded, ineffective, or excessively burdensome should be repealed, as President Obama directed in 2011 when he issued Executive Order 13563. But President Trump’s poorly drafted Executive Order 13771 opens the door to repealing long-established protections for public health, safety and the environment without consideration of the enormous benefits they produce.
Posted on January 30, 2017
With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs. Put simply, I don’t get it. There are at least two good reasons why conservatives should prefer Chevron deference to no deference.
First, the alternative is for courts to decide all questions of agency authority. But haven’t conservatives railed against unelected judges for years? Bureaucrats are unelected, but at least they work for the elected President. Isn’t EPA more likely to be responsive to President Trump than federal judges would be?
Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community. Anyone ever heard of “Regulatory Capture”?
The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.
The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court. Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.
Why, then, did the Appeals Court reverse the District Court and affirm the rule? Chevron deference, of course.
Conservatives, be careful what you wish for.
Posted on January 26, 2017
The Trump administration has issued a key Executive Order and several memoranda relating to energy and the environment. The goal of the Executive Order -- Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects – is to expedite environmental reviews and approvals. It provides that action by the Chair of the Counsel of Environmental Quality to designate an infrastructure project as high priority would trigger an expedited review and approval process, as described in the memorandum Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing.
Two other memoranda – those addressing the construction of the Keystone Pipeline and construction of the Dakota Access Pipeline – are intended to clear the way for approval of these two controversial pipelines. The President also stated that he wants pipe for U.S. pipelines to be made with American steel.
Finally, the White House issued a memorandum providing for a regulatory freeze of regulations that have not taken effect and withdrawal of regulations that have not yet been published in the Federal Register. In accordance with this directive, EPA has issued a notice postponing to March 21, 2017 the effective date of 30 regulations that were published by EPA after October 28, 2016. The delay is intended to provide further review of these regulations by the new Administration.
The Order and memoranda do not change the requirements of relevant environmental statutes. It remains to be seen to what extent these policies will affect future permitting or regulatory decisions. Interested parties will wish to carefully monitor how these developments unfold.
Posted on January 17, 2017
Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations. According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.
One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point. What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.
How could such a thing happen, you might ask? Here’s the best I can do. Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained. Judge Rogers disagreed and dissented. Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety. However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1. The law remains an ass.
Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.
And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.
Posted on January 3, 2017
I first began to focus on the need to protect our environment in the 1960’s, starting with Rachel Carson’s indictment of one particular pollutant, the pesticide DDT in her seminal work, “Silent Spring.” As the decade of the ‘60’s proceeded, environmental protection began to focus on the local release/discharge of contaminants into the air, ground and water. Each state dealt with these problems in a scattershot manner until the EPA was formed in 1970 to administer laws passed by Congress to be uniform – commonly called “command and control.”
On Wednesday, October 17, 1973, the Arab-dominated Organization of Petroleum Exporting Countries (“OPEC”) decided to reduce the exports of the most basic transportable fossil fuel – oil - to the United States and other countries who aided Israel during the Yom Kippur. This was commonly called the “OPEC Embargo” and exposed our national dependence on Mideast oil.
Against this backdrop, on Monday, October 15, 1973, I left my corporate law practice and took my “Hamiltonian shot,” becoming EPA Region 3’s general counsel. I joined the newly created EPA under Administrator Russell Train to implement, apply and enforce the new environmental statutes - the Clean Water Act (CWA–1972), Clean Air Act (CAA-1970) and National Environmental Policy Act (NEPA-1969). Instead, because of the OPEC embargo, I was processing CAA variance requests to burn wood chips in furnaces in Philadelphia and fill my gas tank on alternative weekdays. When the embargo ended the following year, we went about achieving EPA’s mission to protect the environment and coordinate the three E’s – the economy, ecology and energy – focus on the latter would grow in importance – and argument – in the years to come.
I left my position in October 1975 and started a private practice in environmental law and later began to teach environmental law. Along came the Safe Drinking Water Act, the Resource Conservation and Recovery Act (“RCRA”), and on the eve of President-Elect Ronald Regan’s inauguration, the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). The federal government was clearly on track to achieve its mission.
In January 1981, however, President Regan determined to “reverse” environmental protection by the federal government and return it to “state control,” welcoming to this cause a number of inexperienced, unqualified and hostile political friends to dismantle the federal program. The result – James Watt left his Secretary of the Interior post in disgrace on October 10, 1983; EPA Administrator Anne Gorsuch resigned in disgrace on March 9, 1983; Rita Lavelle, the EPA Assistant Administrator for Hazardous Waste and Superfund, wound up serving prison time for lying to Congress; and at least one Regan appointed EPA regional administrator was thrown out of office.
During the twenty-eight Bush/Clinton/Bush/Obama scandal free years, EPA went about its business of environmental protection, leading up to the presidential election of October 2016. The near unanimous global and scientific recognition that climate change was happening led to efforts to reign in carbon emissions primarily from the burning of fossil fuel (coal and oil), culminating this fall in the Paris Agreement. President Obama and Secretary of State John Kerry led the successful fight to get the requisite number of countries to sign on with the United States. Environmental protection became a global need, no longer a local problem.
And then came November 8, the election of Donald Trump.
As he proceeded to name the people he wanted to make up his cabinet, speculation began as to whether as President-Elect he would actually activate his campaign attacks on environmental protection. Now almost a month before his inauguration, he has actualized his campaign promises. First, he selected Oklahoma attorney general Scott Pruitt as EPA Administrator, a climate change denier who led the attack in court on President Obama’s Clean Power Plan (the vehicle US planned to use to reduce carbon emissions from fossil fuel in fulfillment of its Paris Agreement commitment). Second, he tapped Rex Tillerson, the CEO of ExxonMobil, the world’s largest fossil fuel producer and defendant in NY v. Exxon, to be his Secretary of State. Third, for Energy Secretary, he has designated Texas Governor Rick Perry, the man who in his 2011 campaign famously forgot that the third federal agency he would abolish was the Department of Energy. Finally, with these selections, he has made it abundantly clear that he meant what he said about reeling in the EPA.
Will he succeed during his administration or will he fail in his efforts to reprise the Reagan assault. Some of the big differences between the 1980’s and today are (1) environmental degradation is now understandably global, not just local, (2) the rest of the world is similarly impacted and is watching us, and (3) the stakes are much higher. Will Congress permit a legislative dismantling of the statutory structure it put together over the past 45 years? Will the myriad environmental NGOs be strong enough (and sufficiently funded) to take these attacks to court? Will EPA be able to preserve its regulatory program to implement environmental protection? Will the courts uphold these executive anti-environmental attack efforts or stop them? And in that regard, who will be Trump’s selection of SCOTUS Justice #9?
We wonder. Many of us worry. And all of us wait.
Posted on December 23, 2016
My practice, one way or another, is all about compliance . . . or noncompliance. This is as true of the litigation side as it is of the regulatory counseling side. I typically face the question of which of those terms best describes the situation a client brings to me. It’s always been true that the practice goes beyond the mere facts or law at hand. The real world also includes the client’s culture and values, politics, and economics. These aspects, and others in varying proportions, have usually controlled process and outcome.
Today I am witnessing what appears to be an unprecedented unraveling of these foundations. I see it in the words and actions of regulators, consultants, other attorneys, judges, and clients. Obviously this imposes itself on the lawyer’s task of figuring out what the problem is, on the one hand, and, on the other, what the best advice for a client might be, specifically how (and when) to address the problem. The path forward these days seems to be influenced, often significantly, by two related things: widespread mistrust of government/science/etc., and a social media rife with rumors, innuendo, assumptions, and the like. So I find myself asking: of what value is advice derived from traditional avenues of carefully established fact, well-analyzed law, professional judgment, and years of relationship building?
I find the answer in the first week at my first real law job clerking for a federal district court judge. On the third day of that job, I stood behind my desk, looked out the window, and thought, with despairing certainty: I don’t have the tools to do this job! I will never make it as a law clerk! I will never make it as a lawyer! Why did I ever go to law school? Time passed. Things cleared up. I learned how to begin to apply what I knew to what I had to do. And, while the view may be new, the path forward is the same as ever. Now, as I think about the potential unraveling of fundamental policies and foundations upon which we have rested for a generation, I’m looking out of that same window, in a sense.
Posted on December 20, 2016
In July I wrote what I thought surely would be my last blog on the more than three years of legal challenges by the City of Margate, New Jersey Commissioners with their decision not to appeal the state and federal courts’ upholding the State’s and Army Corps’ authority to build dunes in Atlantic County, New Jersey. I titled the blog “Signing Off” – concluding that the fat lady had in fact sung.
Well I was wrong.
Six residents have now paraded into U.S. District Court with their expert, Chuck Dutill, a civil engineer and hydrologist, to testify before Judge Renee Marie Bumb, who had decided the earlier case. Judge Bumb called the testimony “pretty fantastic,” but confirmed that this was the gist of the testimony:
“It sounds like from your testimony the Army Corps is turning the beach into a junkyard,” she said. “You’ve described a big parade of horribles: animal feces, oils, adults being hurt. It sounds pretty fantastic. Is that in some way hyperbole if you don’t mind? Is that your testimony?”
“That is absolutely my testimony,” Dutill replied.
“What I’m hearing is what the defendant proposes to do is turn the beach of Margate into the junkyard of Margate,” the judge said. “That is what I’m hearing.”
And until she rules – and as expected rules against the residents – and they decide to appeal, the fat lady continues to stand by for yet another reprise.
Posted on October 27, 2016
In April, Judge Dana Christensen vacated the Fish and Wildlife Service’s decision to withdraw its proposed listing of a distinct population segment of the North American wolverine as threatened under the Endangered Species Act (“ESA”). Bowing to the inevitable, the Fish and Wildlife Service ("FWS") has published in the Federal Register a formal acknowledgement that the Court’s vacatur of the withdrawal of the proposed listing returns the situation to the status quo.
In other words, the proposed rule that would have listed the wolverine distinct population segment ("DPS") is back in play. Specifically, the FWS announced that
"we will be initiating an entirely new status review of the North American wolverine,to determine whether this DPS meets the definition of an endangered or threatened species under the Act, or whether the species is not warranted for listing.
FWS also reopened the comment period on the proposed listing and invited the public to provide comment, identifying nine specific areas in which it sought comments, including
"Information on the projected and reasonably likely impacts of climate change on the wolverine and its habitat, including the loss of snowpack and impacts to wolverine denning habitat.
This is all well and good and certainly required under Judge Christensen’s order, but neither Judge Christensen nor FWS has the tools necessary to address the core issue here, i.e., the unwieldy nature of the ESA. It simply wasn’t designed to solve all of the ecological problems resulting from climate change.
It would be nice if Congress weren’t completely dysfunctional.
Posted on October 26, 2016
ECOS – the Environmental Council of States – I suspect that most of you have heard of it, but what do you really know about ECOS? And, why should you care? As the current Past President of ECOS, I acknowledge upfront that I might be biased – but consider the following. ECOS is the national non-profit, non-partisan association of state and territorial environmental agency leaders. ECOS was founded in late 1993 at a time when the relationship between states and the EPA was strained. As Mary A. Gade, then director of the Illinois Environmental Protection Agency, put it: “The times called for states to assume primary responsibility and leadership for environmental protection. As individual states began to articulate this new perspective, state commissioners realized the need to band together for information-sharing, strength, and support.”
Today, reflected in the ECOS 2016-2020 Strategic Plan, much of ECOS’ original purpose remains: “To improve the capability of state environmental agencies and their leaders to protect and improve human health and the environment of the United States of America. Our belief is that state government agencies are the keys to delivering environmental protection afforded by both federal and state law.”
While the purpose remains consistent, how ECOS achieves it has evolved.
One example lies in the ECOS-organized forums where states and EPA meet to discuss - and often debate - environmental concerns and our respective roles in implementing and enforcing environmental programs. While the early ECOS years were not without success working with EPA, the tenor of the overall relationship with EPA was uneven. Today, ECOS has a productive relationship with EPA. We still discuss, debate, and disagree, but in a much more constructive way. EPA representatives at all levels routinely attend and engage in the spring and fall ECOS meetings, as well as other ECOS conferences. ECOS members have been invited to internal EPA budget meetings to share our budget concerns and needs. ECOS and EPA have worked on several joint-governance projects, including the creation of E-Enterprise for the Environment. Through E-Enterprise, state, EPA and tribal representatives work to streamline environmental business processes and share innovations across programs to improve environmental results, and enhance services to the regulated community and the public by making government more efficient and effective.
ECOS is fast becoming the “go-to” organization for Congress, the White House, federal agencies, national organizations, and the media to learn about state issues, concerns, positions, innovations and ideas regarding environmental matters. Through engagement with senior government officials, testimony before Congress and many position letters, ECOS has expressed state perspectives on key legislative and regulatory issues, like reform of the Toxic Substances Control Act, funding for state environmental programs and water infrastructure, increased authority over coal combustion residual sites, workload flexibility in state-EPA agreements, enforcement training, expediting federal facility cleanups, and environmental justice tools.
ECOS has developed relationships with the Department of Energy and the Department of Defense: these agencies regularly participate in ECOS. ECOS’ Legal Network brings state environmental agency counsel together with EPA counsel and DOJ’s Counselor, to explore lessons learned from successful enforcement and compliance initiatives, and to discuss best practices and enhanced collaboration.
So, how about the relationship among the states themselves? ECOS has also become a venue for states to explore differences in positions and ideas. Not surprising, membership within ECOS is politically diverse. ECOS has recognized and embraced this diversity by creating a space for states to express their opinions and positions, encouraging members to learn from each other, to reach “across the aisle” to understand differing perspectives, to compromise where needed and to develop strong and lasting relationships. ECOS will pull in experts from within the states and from other organizations to provide valuable and sometimes critical perspectives and analyses on important issues, so that state environmental leaders can better understand the complexities and impacts of environmental programs and initiatives. The lawyers of ACOEL are one source of that expertise, and they have provided valuable legal analyses to ECOS and its members on the Clean Power Plan and WOTUS. ECOS is even reaching across state agency lines, as shown by this spring’s Memorandum of Agreement with ECOS, EPA, and the Association of State and Territorial Health Officials to advance cooperative initiatives pertaining to environmental health, acknowledging that the public health and well-being of U.S. citizens relies on the condition of their physical environment.
So, why should you care about ECOS? Because the vast majority of day-to-day environmental program adoption, implementation and enforcement is done by the states. As Mary A. Gade said when ECOS was first created: “Charged with advancing a state’s environmental agenda, state commissioners strategize daily with governors, state and national legislators, and local government officials to accomplish their goals. State environmental commissioners have political access, substantive expertise and, most importantly, legislative combat experience.” When you organize a group of battle-ready commissioners who lead state environmental programs, and who meet and work together on a regular basis, wouldn’t you want to know what they are doing? My advice: check out http://www.ecos.org and find out what you are missing.
Posted on October 6, 2016
On Monday, the TVA announced that Watts Bar Unit 2 had successfully completed what is known as its final power ascension test. It is now producing 1,150 MW of power in pre-commercial operation. Though EnergyWire did report it (subscription required), I would have thought this would have received more coverage. It’s been 20 years since the last nuclear facility came online in the United States.
In case anyone has forgotten, we’re trying to reduce GHG emissions in this country. Nuclear power – still – does not produce GHG emissions. Nuclear power’s role in combatting climate change seems only to be more salient in light of the recent study by Washington State University researchers concluding that hydroelectric dam reservoirs are a significant source of GHGs. According to the study, reservoirs produce the equivalent of 1 gigaton of CO2 annually, or 1.3% of all GHGs produced by humans.
If we want to be carbon-free in our energy production, that leaves solar and nuclear. Solar has a huge and growing role to play. But are we really going to turn our back on nuclear power as an option? As Robert Heinlein and Milton Friedman noted, TANSTAAFL.
Posted on September 21, 2016
On Monday, EPA promulgated amendments to its “Exceptional Events” Rule. The rule is important, particularly in the Western states, and most particularly in connection with EPA’s latest iteration of the ozone NAAQS. EPA’s most significant revision was to eliminate the requirement that state air agencies demonstrate that, “but for” the exceptional event, the state or relevant area would have complied with the applicable NAAQS. The change is important for two reasons. First, on the merits, EPA noted that:
"the “but for” criterion has often been interpreted as implying the need for a strict quantitative analysis to show a single value … of the estimated air quality impact from the event. As a result, some air agencies began using burdensome approaches to provide quantitative analyses in their exceptional events demonstrations to show that the event in question was a “but for” cause of a NAAQS exceedance or violation in the sense that without the event, the exceedance or violation would not have occurred. In many cases, the “but for” role of a single source or event is difficult to determine with certainty and it is more often the case that the impact of emissions from events and other sources cannot be separately quantified and distinguished."
I think that EPA got this exactly right. As tort professors have always known, how a burden of proof is allocated is often outcome-determinative.
Which brings me to the second reason why the change is important – at least to me. Just hearing the words “but for” causation triggers an uncontrollable wave of nostalgia. In 1996, my client, New England Telephone, was awarded summary judgment in a CERCLA contribution case. It was then the first – and may still be the only – case in which a defendant who admittedly sent hazardous substances to a site was awarded summary judgment on the ground that its wastes had not caused the incurrence of any response costs.
I like to think that NET prevailed due to the fine lawyering of its counsel, but I have always known in my heart of hearts that the identity of the judge may have had something to do with the result. The case was heard by Robert Keeton, distinguished judge, Harvard Law professor and – importantly – one of the authors of Prosser and Keeton on Torts.
At the summary judgment hearing, Judge Keeton did not want to hear from me, even though it was my motion. He did not really even want to hear from the plaintiffs’ counsel. Instead, he launched into an approximately 30-minute lecture on the role of causation in tort law, including, of course, a discussion of “but for” causation. When he finished the discussion from Prosser and Keeton about the so-called “Minnesota fire cases”, Judge Keeton paused, looked up, smiled broadly, and said: “I wrote that part.”
It was the best summary judgment argument I ever gave. I never said a word.
Posted on September 8, 2016
Ever since EPA began considering how BACT analysis would be applied to greenhouse gas emissions, there has been concern that EPA would use its BACT authority to “redefine the source” – with the particular concern that BACT for a coal plant would now be to burn natural gas instead. In Helping Hands Tools v. EPA, the 9th Circuit Court of Appeals this week gave some protection to biomass plants from such redefinition of the source. However, other types of facilities will get no comfort from the decision.
Helping Hands Tools involved a challenge to a PSD permit issued to Sierra Pacific for a cogeneration plant to be located at one of its existing lumber mills. Under EPA’s BACT Guidance, Sierra Pacific stated that the purpose of the CoGen plant was to use wood waste from the mill and nearby facilities to generate electricity and heat. Relying in part on the 7th Circuit decision in Sierra Club v. EPA, which held that it would impermissibly redefine the source to require a mine-mouth coal generating plant to consider different fuels in its BACT analysis, the 9th Circuit found that EPA was reasonable in determining that, because a fundamental purpose of the CoGen plant was to burn wood waste, it would impermissibly redefine the source to require Sierra Pacific to consider solar power as part of its BACT analysis.
Importantly, the Court also rejected the plaintiffs’ request that Sierra Pacific consider greater use of natural gas. The Court concluded that very limited use of natural gas for the purposes of startup, shutdown, and flame stabilization did not undermine the fundamental purpose to burn wood waste. This is critical to source-located biomass facilities, because EPA’s GHG Permitting Guidance specifically says that greater use of an existing fuel should be considered in the BACT analysis:
"unless it can be demonstrated that such an option would disrupt the applicant’s basic business purpose for the proposed facility."
Unfortunately, the language of the decision appears to me to give EPA substantial leeway in future BACT analyses to redefine the source in other cases. It seems to me that, building on the 7th Circuit decision, the Court has simply created an exception to potential source redefinition in circumstances where the location of the facility justifies a very narrow fuel selection. If a coal plant intends to burn coal from the mine next door, ok. If a lumber mill intends to burn its own wood waste, ok. Otherwise, however, all bets are off.
What is particularly troubling was the Court’s acknowledgement that the GHG BACT guidance is vague, and its deference to EPA’s application of its own vague guidance. This is precisely the concern I noted when the Guidance was first issued. Time will tell, but I foresee some fairly extreme BACT determinations being blessed by some very deferential courts.
Posted on August 2, 2016
On Friday, the D.C. Circuit largely upheld EPA’s Boiler MACT rule. The industry challenges were a complete washout. The environmental petitioners won one significant victory and a number of smaller ones.
The environmental petitioners’ one significant victory is important. EPA included within relevant subcategories any source that burns a fuel containing at least 10% of the “subcategory-defining fuel.” However, for defining MACT, EPA included only those sources that burn fuel containing at 90% of the subcategory-defining fuel for existing sources, and 100% for new sources. The Court rejected this approach.
"The CAA, however, demands that source subcategories take the bitter with the sweet. Section 7412 mandates, without ambiguity, that the EPA set the MACT floor at the level achieved by the best performing source, or the average of the best performing sources, in a subcategory. It thus follows that if the EPA includes a source in a subcategory, it must take into account that source’s emissions levels in setting the MACT floor."
Which brings me to my big take-away from this decision. Chevron lives. By my count, The Court cited Chevron 30 times. Chevron pervades the decision. Even in the one big issue that EPA lost, the Court’s decision was based not on a rejection of EPA’s interpretation of an ambiguous provision under step 2 of Chevron, but on a plain meaning interpretation of § 112. EPA defined what a source is, but it then refused to calculate MACT based upon the performance of all of the sources in a given subcategory. The statute simply did not allow EPA that leeway.
Other than EPA’s attempt to avoid taking “the bitter with the sweet”, however, the Court’s deference – by three Republican appointees – to EPA’s technical decisions was notable. Not every case is the Clean Power Plan. Where EPA is not really pushing the boundaries, I don’t see the Supreme Court weakening Chevron any time soon.
Posted on July 5, 2016
Administrative lawyers, especially environmental lawyers, are well familiar with the doctrine of Chevron deference as applied to agency interpretations of statutes. In the 1984 Clean Air Act case of Chevron U.S.A. Inc. v. Natural Resources Defense Council, the U.S. Supreme Court announced a 2-step approach: (1) the court must determine whether Congress has directly spoken to the precise question at issue and, if so, that ends the matter—the Court, as well the agency, must give effect to that intent; and (2) if not, the court must defer to the agency’s interpretation if it is “reasonable,” the presumption being that Congress intended to leave its resolution to the agency. In a more recent Clean Air Act case, Michigan v. EPA, the Court, although determining EPA acted unreasonably in failing to consider costs in its regulation of hazardous air pollutants from power plants, applied the Chevron doctrine, but Justice Thomas, in his concurring opinion, challenged the doctrine’s legal underpinnings, causing some to question the continued vitality of the doctrine. In Encino Motorcars v, Navarro, decided on June 20, 2016, the Supreme Court, although deciding that the agency’s interpretation was not entitled to deference, provided assurance that the Chevron doctrine is alive and well.
The case involved the issue of whether service advisors at car dealerships were exempt from overtime pay under the Fair Labor Standards Act. In 2008, the Department of Labor had proposed a rule confirming a long-standing practice that they were exempt, but in its final rulemaking--in 2011--it reversed course, without explanation. The Court of Appeals for the Ninth Circuit had applied Chevron deference in upholding the rule, but the Supreme Court reversed. It held that, although the Department could change its policy, its interpretation was not entitled to Chevron deference because it did not provide a reasoned explanation for doing so. The Court therefore remanded to the Ninth Circuit to determine the rule’s validity in the first instance. In her concurring opinion, Justice Ginsburg, joined by Justice Sotomayor, noted: “’[U]nexplained inconsistency’ in agency policy is ‘a reason for holding an interpretation to be an arbitrary and capricious change from agency practice.’” In his dissent, Justice Thomas, joined by Justice Alito, agreed with the majority--that the Court “need not wade into the murky waters of Chevron deference,” but disagreed that the Court should have reversed and argued that the rule change was simply invalid.
So, Chevron deference lives, but it does not apply to unexplained rule changes.
Posted on June 17, 2016
If you needed any further proof that energylaw is very complicated, Wednesday’s decision in North Dakota v. Heydinger should convince you. The judgment is simple – the 8th Circuit Court of Appeals struck down a Minnesota statute which provides in part that:
"no person shall . . . (2) import or commit to import from outside the state power from a new large energy facility that would contribute to statewide power sector carbon dioxide emissions; or (3) enter into a new long-term power purchase agreement that would increase statewide power sector carbon dioxide emissions."
Why, you ask?
- The panel opinion, by Judge Loken, stated that the Minnesota statute violates the dormant Commerce Clause, by regulating purely “extraterritorial” economic activity.
- Judge Murphy, in the first concurrence, disagreed with Judge Loken’s conclusion that the statute violates the dormant Commerce Clause, but joined the judgment, because she concluded that the statute is preempted by the Federal Power Act.
- Judge Colloton, in the second concurrence, agreed with Judge Murphy that the statute does not violate the dormant clause, but also concurred in the judgment. Judge Colloton concluded that, to the extent that the “statute bans wholesale sales of electric energy in interstate commerce,” it is preempted by the Federal Power Act. However, Judge Colloton wrote separately, because he at least partially disagrees with Judge Murphy (as well as with Judge Loken) and does not believe that the Minnesota statute constitutes a complete ban on wholesale sales of energy that increase CO2 emissions. However, Judge Colloton concluded that, to the extent that the statute is not preempted by the Federal Power Act, it is preempted by the Clean Air Act.
Is that sufficiently clear?
I do feel compelled to add two final notes. First, I don’t understand why Judge Loken wrote the panel opinion, when his rationale did not command a majority. Indeed, as Judge Colloton pointed out, the Court should not even have reached the constitutional issue, since a panel majority existed that was prepared to strike down the Minnesota statute on statutory grounds. (Preemption is considered a statutory, not a constitutional, rationale.)
Second, don’t analogize the electric energy transmission to the flow of water in a pipe, at least before Judge Murphy. Here’s your electricity and magnetism primer for the day, courtesy of the Judge.
"In the electricity transmission system, individual electrons do not actually “flow” in the same sense as water in a pipe. Rather, the electrons oscillate in place, and it is electric energy which is transmitted through the propagation of an electromagnetic wave.
Certainly brought me back to course 8.02 at MIT. Not one of my favorites.