Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

Yesterday, the Bureau of Ocean Energy Management issued a notice of availability for the Environmental Assessment it prepared in connection with the issuance of leases for wind energy development off the coast of New Jersey, Delaware, Maryland, and Virginia. The EA includes a Finding of No Significant Impact, or FONSI. In other words, BOEM concluded that the issuance of leases does not require a full blown Environmental Impact Report. 

The EA also addresses the individual site assessment plans, or SAPs, that will have to be performed by each leaseholder. While BOEM retains the flexibility to determine whether the implementation of the SAPs is covered by the EA, there is certainly the suggestion that SAPs may be not require separate NEPA analysis.

The FONSI is of course not a full green light for wind development off the Mid-Atlantic coast. Once BOEM starts awarding leases, each lease-holder would ultimately have to prepare a Construction and Operations Plan, which would be subject to NEPA review and it would be quite surprising if individual wind projects were not obligated to prepare full EISs before proceeding to construction. 

Even so, establishing this process, and obviating the need for EISs prior to issuing leases and performing at least some SAPs, can only be helpful in getting siting of wind energy in this area off the ground.

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When I last posted on the potential impact of the Utility MACT rule on electric system reliability, I swore I was done with the subject. I knew then it was probably a mistake. Yesterday, FERC announced that it has issued a White Paper on how it will respond to requests by generators to EPA for an extension of time to comply under the Utility MACT rule. Since FERC has invited comments on the White Paper, it seemed worthy of note.

As those who have followed the progress of the MACT rule know, EPA has allowed a basic compliance period of three years. EPA has also provided for a one-year extension in some cases. Beyond that, EPA has provided that facilities which cannot comply within 4 years and which are critical to electric system reliability may seek a further extension through an administrative order. EPA also provided that it will take comment from experts, including FERC, on applications for such further extensions.

The White Paper sets forth FERC staff’s views on how FERC should handle such requests for comment. The process would be as follows:

• AO requests would be filed with the Commission Secretary (It is important to note that all AO requests must include a “concurrence with the reliability risk analysis” by the relevant “Planning Authority”, such as an ISO, or an explanation as to why such concurrence cannot be provided.)

• Requests would be treated as informational filings.

• Intervention would not be allowed.

• FERC review “should be whether, based on the circumstances presented, there might be a violation of a Commission-approved Reliability Standard” in the absence of the extension.

• The White Paper reserves the question regarding whether FERC review will be de novo or grant some deference to the analysis provided by the Planning Authority.

The White paper notes that it is specifically seeking comment regarding both the scope of its review of AO requests and the level of deference, if any, to give to the Planning Authority analysis. Comments may be provided by February 29, 2012, at the eFiling link on the FERC web site.

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The nine states still participating in the Regional Greenhouse Gas Initiative are getting ready for the first auction of RGGI's second compliance period, scheduled for March 14th.  In the auction notice released last week, they announced 4 changes to the program, and analysts are predicting there are far more significant changes to come -- namely adjustments to the total emissions cap. 

The first change: which we knew was coming; New Jersey is officially out.  The second:  the reserve price, the lowest price at which allowances may sell, has been increased by 4 cents to $1.93, in line with the Consumer Price Index.  The third:  although RGGI usually offers allowances from two different compliance periods for sale at each auction, March's auction will offer only 2012 allowances, raising some questions about RGGI's own view of its future past this compliance period's end in 2014.  The fourth change:  the participating states announced that they will retire 87 million of the allowances that went unsold during the 2009-2011 auctions, a move that may indicate the states' willingness to set the cap for 2012 below the earlier levels, to avoid such over-allocation of allowances in future years.

The original plan for the RGGI program, when it was introduced in 2008, was to set the emissions cap on large power plants in the Northeast at 188 million tons (estimated 2005 levels) through 2014, then lower the cap by 2.5% per year over the next four years, for a net change of 10%.  But in the intervening years, emissions in the Northeast have declined significantly due to decreasing generation from higher-carbon dioxide sources such as fuel oil and coal, increasing generation from natural gas and renewable, carbon-free sources, and expanded energy efficiency programs -- many of which were paid for by funds collected by the states through the RGGI auctions.  As a result, emissions are now far below the planned reductions already -- 2011 emissions were 34% below the cap, according to Environment Northeast's analysis released last week.  As these changes in emissions are expected to be permanent, the RGGI cap would have to be lowered by a significant amount before the cap-and-trade program became the driving factor in carbon reductions.  

The participating states are currently working on a planned comprehensive review of the RGGI program, with the most recent topics of discussion including evaluating the use of offsets and other cost-containment mechanisms in the future.  While the participating states' willingness to retire the unsold allowances from the first compliance period may be a signal of their intentions to re-set the cap for the 2012-2014 compliance period as well, it remains to be seen whether the states will merely adjust the cap to reflect observed emission trends or try to create even further cuts in emissions. 

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In a prior rant, I raised the concern that EPA would oppose the use of new cleanup technologies based on nanotechnologies on the basis of the precautionary principle. I may not have been exactly on the mark, but I was pretty close. On Thursday, the NRDC announced that it has filed suit challenging EPA’s decision to issue a conditional registration of a nanosilver-based antimicrobial agent. The NRDC asserts that EPA’s use of the conditional registration process is “illegal,” apparently because EPA does not have sufficient information to justify a conclusion that use of the nanosilver products do not cause “unreasonable adverse effects to human health and the environment.” According to the NRDC, EPA’s decision is

just the most recent example in a long line of decisions that treats [sic] humans and our environmental as guinea pigs for these untested pesticides.

As noted in my prior post, there is a difference between regulating in spite of uncertainty – which can frequently be justified – and regulating because of uncertainty, which is deeply troubling. Nanomaterials hold great promise in a wide number of fields, including many uses – such as antimicrobials – focused on protecting public health and the environment. 

What is the basis for keeping these materials off the market just because we haven’t proved that they don’t pose a risk?

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For several decades now, the United States has taken the position that communications and documents exchanged in Superfund matters between government lawyers representing the US EPA and government lawyers representing federal PRPs are privileged.  Specifically, the government has argued that both of these sets of government lawyers represent the same party -- the United States, which is a unitary government -- and thus their communications are protected as attorney-client communications.  That unitary government position was squarely rejected earlier this week in Menasha Corporation v. United States Department of Justice – yet another litigation arising from the Lower Fox River Superfund Site in Wisconsin. 

In that case, a private PRP pursued a Freedom of Information Act claim seeking documents relating to the terms of an earlier settlement. Relying upon its unitary government theory, the United States  asserted a claim of privilege with respect to documents and communications exchanged between DOJ lawyers representing EPA and other DOJ lawyers representing federal PRPs.  The court disagreed: “Because the United States has competing interests in this case, it (appropriately) has separate counsel from [two different sections at the Department of Justice] independently representing the interests of their respective client agencies in the same manner as other adverse parties. Communications between those adverse parties therefore waive the privilege as would communications between Plaintiffs Menasha and NMSC and any other PRP.” 

Central to the court’s holding is the rationale that in Superfund cases lawyers representing EPA and lawyers representing federal PRPs have adverse interests. Lawyers for EPA seek to maximize joint and several liability, whereas lawyers for federal PRPs, like lawyers representing private PRPs, seek to minimize liability. This rationale would seem to apply broadly in all Superfund matters to defeat most privilege claims involving communications and documents exchanged between DOJ lawyers representing EPA and federal PRPs.  It will be interesting to see if this decision changes the way DOJ attorneys interact in cases involving a federal PRP.

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According to E&E News, Lisa Jackson said Friday that public pressure, not EPA regulation, will clean up fracking. 

Fracking fluids will get greener, water use will get down, all because the industry, quite frankly, will do it, must do it, and will feel the public pressure -- not the EPA pressure -- to do this in a responsible way.

Does she really mean it? Notwithstanding current pronouncements by the GOP Presidential candidates, neoclassical economics has a clear role for government regulation. If economic activity – such as fracking – imposes costs on society that are not internalized to the company doing the fracking, then regulation is appropriate. I think that fracking is of net benefit to society, but it certainly appears to impose at least some externalities that have not to date been internalized to the drilling companies. Thus, government regulation seems to be warranted – and logic tells us that those externalities will not be accounted for in the absence of regulation.

If Lisa Jackson believes that fracking’s externalities will be eliminated by public pressure, that would truly represent a sea change in the government’s view of how environmental problems should be solved. If public pressure is enough to clean fracking, then why wouldn’t public pressure be enough to clean toxics from utility air emissions?  What distinguishes fracking from all of EPA's regulatory programs? Why do we need EPA at all?

Perhaps the GOP candidates have it right.

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As readers of this blog know, the impact of EPA air rules, including in particular the Utility MACT rule, on the reliability of the nation’s electric grid has been the subject of much speculation. Last week, the Congressional Research Service weighed in, with the exciting headline: EPA’s Utility MACT: Will the Lights Go Out?” Of course, notwithstanding the sexy title, the CRS conclusion can be summarized pretty simply: the MACT rule will not cause the lights to go out. Money quote:

although the rule may lead to the retirement or derating of some facilities, almost all of the capacity reductions will occur in areas that have substantial reserve margins. Two areas that may have difficulty meeting reserve margins, Texas and New England, will experience few plant retirements and deratings, according to industry data. Furthermore, to address the reliability concerns expressed by industry, the final rule includes provisions aimed at providing additional time for compliance if it is needed to install pollution controls or add new capacity to ensure reliability in specific areas. As a result, it is unlikely that electric reliability will be harmed by the rule.

Absent some surprises, I’m done with the subject. Let me know if the lights go out.

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Yesterday, the “Independent Expert Panel” convened by MassDEP to review whether wind turbines cause any adverse health effects issued its report. I was pleased that the headline in the Boston Globe was that “Wind turbines don’t cause health problems.” Similarly, the Daily Environment Report headline was that “Massachusetts Study Finds ‘No Evidence’ of Health Impacts from Wind Turbines.” 

I hope that that’s the way the report will be read, but I’m worried. Perhaps I just have too many NIMBY-related scars. Whatever the reason, I am worried about the report’s statements that there

is limited epidemiologic evidence suggesting an association between exposure to wind turbines and annoyance.

and that

whether annoyance from wind turbines leads to sleep issues or stress has not been sufficiently quantified.

and that there

is limited scientific evidence of an association between annoyance from prolonged shadow flicker (exceeding 30 minutes per day) and potential transitory cognitive and physical health effects.

Can’t you see opponents of wind turbines latching on to these statements and urging the MEPA office to require that wind project developers fill in these “data gaps” before being allowed to proceed in Massachusetts? So climate change is threatening life as we know it (allow me a rhetorical flourish), EPA believes that fossil fuel plants result in significant morbidity and mortality, even aside from climate change, and Massachusetts, which wants to lead the nation in moving to an economy based on renewable energy, is going to get itself tied into knots evaluating claims that wind turbines annoy people? I sure hope not.

I do love that the report acknowledges that “annoyance ‘per se’ is not a biological disease.” Oh, really? That’s good; otherwise, I’d be feeling diseased right about now. We’ve known for years that Bill Koch is annoyed that Cape Wind will be in the view shed from his lovely house on Nantucket Sound (and, to be non-partisan, that the Kennedys are also annoyed). 

On the scales of cost and benefit, I just pray that MassDEP, the MEPA office, and the Massachusetts legislature (which is still reviewing wind siting legislation), give concerns about annoyance exactly as much consideration as they deserve.

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Just in case you are not sated with coverage about the Supreme Court argument in Sackett and the potential implications if EPA loses, I thought I would note that I did a brief (8 minutes) interview with LexBlog Network about the issues it presents. You can see it here. 

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Last Friday, noting a story about the extent to which concerns about sea level rise from climate change might affect development in East Boston, I wondered whether battles over whether and how to adapt to climate change might be moving from the realm of the hypothetical to the realm of the real. Climate Wire has now begun a series of stories on how cities are planning for climate change. This week, there have been stories about Portsmouth, New Hampshire, and Hallandale Beach, Florida. 

The long-term picture in these cities is no prettier than that of East Boston. The specifics don’t matter so much as the scope, though there are some similarities. In Portsmouth, one concern is that the causeway leading to New Castle will be submerged. In New Hallandale, a recent analysis indicated that 893 miles of roads from Miami to Palm Beach will be under water at high tide if sea level rises by three feet. In Portsmouth, there is concern about what will happen to sewers containing combined storm and sewage flows – now that’s a pretty picture – while in Hallandale Beach, the concern is that encroaching salt water will impact current fresh water supplies. 

The real question is when to start planning, and how. How much planning should be focused on changing standards for new development and how much on protecting existing infrastructure? Of course, as an alternative, there’s always the approach of one of my favorites, Graham Parker, in his song Stick to the Plan.

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I am generally loath to speculate about what the Supreme Court will do based on oral argument, but the overwhelming reaction to the oral argument in Sackett v. EPA was that EPA is going to lose. What would a loss mean? In simplest terms, EPA would no longer be able to issue enforcement orders under the Clean Water Act without those orders being subject to judicial review. Such a decision would undeniably be significant. Everyone practicing in this area knows how coercive EPA enforcement orders can be. A person who thinks that he is not liable or that the order is inappropriate, and faced with having to violate the order and wait for EPA to bring an enforcement action to obtain judicial review, is truly between a rock and a hard place – or perhaps Scylla and Charybdis (I’m not sure which, but it’s not good, either way). The opportunity for preenforcement review would eliminate much of EPA’s coercive power.

The big question is whether a decision against EPA would be so broad as to make it clear that EPA’s order authority under other statutes, such as CERCLA, would be similarly affected. Here, speculation really is difficult, because the Supreme Court could invalidate EPA’s CWA authority several different ways, with differing impacts on other statutes. Readers who want to explore the issue in more depth than a blog post can review an article I did in the ABA Superfund and Natural Resource Damages Litigation Committee Newsletter.

As long as I am speculating, I’m going to go out on limb and predict that the Court’s decision will not be easily limited to the CWA. I think EPA’s order authority is in trouble across the board.

The next big question is when lower courts are going to actually start paying attention to what the Supreme Court says about environmental cases. I’m tired of this pattern. A series of cases are decided by lower courts, almost universally in EPA’s favor. Indeed, one of the striking things about Sackett is that the Supreme Court took the case without a circuit court split – EPA had won before every circuit court that had reached the question. The Supreme Court applies principles that are broadly accepted outside the environmental arena, but which for reasons unknown to everyone but the lower court judges have been thought inapplicable to environmental cases, and EPA loses. The next several years are spent with EPA, DOJ, and the lower courts merrily constructing some new edifice which allows EPA to continue to win – until the Supreme Court takes another case and says “No, we really meant it.”

There is a lesson here for lower courts, if they would but listen. Environmental cases are not sui generis. EPA does not necessarily win just because it is protecting the environment. General principles of corporate, administrative, and constitutional law apply. Under this framework, EPA will still win most of the time. That’s the nature of administrative law. Expert agencies receive a lot of deference from the courts in interpreting their organic statutes and applying their expertise. But they don’t win all the time, and they don’t win just because they are EPA.

Rant over. Let’s see what the Supremes actually do.

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A story in today’s Boston Globe makes clear that, at least in states where it is permissible to use the words “climate” and “change” in the same sentence, the battle over adaption may no longer be hypothetical. The neighborhood known as East Boston is one that might appropriately be described as having unfulfilled potential. Last month, at a Chamber of Commerce breakfast, Mayor Menino pledged to revive East Boston, specifically calling out five projects that have been on the drawing board for some time.

So what’s the problem? The problem is that East Boston is a waterfront community. Indeed, arguments have long been made that, with the cleanup of Boston Harbor and the revival of other areas of the waterfront, East Boston should not be left behind. In that sense, the waterfront is, of course, a benefit.

The question now is of course what happens to the waterfront in fifty years. Will it still be waterfront or will it be land under the ocean? Today’s Globe story includes a map developed for The Boston Harbor Association, which purports to show the potential impacts of rising sea levels on Boston’s waterfront communities. It’s not a pretty picture. (Well, actually, it is, but you know what I mean.) Some East Boston residents want the potential impacts of sea level rise addressed before significant projects are built in East Boston.

As we noted last fall, the Commonwealth, as part of its implementation of the Global Warming Solutions Act, is trying to address adaptation comprehensively. The Secretary of Energy and Environmental Affairs issued the Climate Change Adaption Report in September 2011 (It also has a pretty picture, shown here, on the impact of sea level rise.) However, while the Adaptation Report includes much discussion, none of its recommendations have been operationalized to date and a lot of work will have to be done before regulations or – dare I say – guidance is issued.

Thus, for some time, these issues are going to be addressed on an ad hoc basis in the context of individual projects. At a certain level, I understand the concern and I’m all in favor of reasonable foresight. On the other hand, is ad hoc decisionmaking a way to decide how close buildings can be built to the water, or whether they need to be built on stilts? The state MEPA office is going to face this issue with increasing frequency in the coming years. Since I don’t believe in preemptive rants, I’ll hold off until we see how MEPA actually starts to handle these types of projects. They do have a lot of discretionary authority.

This really is a stay-tuned situation. All I can say now is that those who put their heads in the sand are likely to drown.

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The decision yesterday in United States v. Minnkota Power Cooperative serves as a useful reminder regarding how important the burden of proof is in review of agency decisions. The case started in 2006, as part of DOJ’s NSR enforcement initiative, when the United States and North Dakota brought suit against Minnkota’s Milton R. Young Station. The parties settled and a consent decree was entered. Apparently, the parties knew at the time of the settlement that there would be a dispute regarding what would constitute BACT for NO_x control and they thus agreed to defer the issue; the consent decree simply provided that the North Dakota Department of Health would determine BACT.

It took the DOH four years to do so, but, in November 2010, the DOH concluded that selective non-catalytic reduction, or SNCR, constitutes BACT for the MRY facility, which has unusual technology involving cyclone-fired boilers combusting North Dakota lignite, rather than bituminous or sub-bituminous coal. EPA wanted SCR identified as BACT and pursued dispute resolution under the consent decree to get it. 

Unfortunately for EPA, the decree provided that the determination by North Dakota would be binding unless EPA “demonstrates that it is not supported by the state administrative record and not reasonable in light of applicable statutory and regulatory provisions.” As the court noted, the consent decree language was not unique; it “mirrors the standard of review” for challenges to state BACT determinations even outside the consent decree context.

The crux of the case was whether cyclone fired boilers combusting North Dakota lignite were sufficiently like other coal-fired boilers that determinations for such boilers that SCRs constitute BACT should essentially be binding here. The North Dakota DOH compiled an extensive record demonstrating that such other coal-fired facilities are not sufficiently like the MRY facility, and the court deferred to DOH’s judgment, based on the record.

Perhaps the most telling evidence was that DOJ engaged an expert consultant, which issued an request for proposals to install SCR at the MRY facility. DOJ in fact obtained two proposals with performance guarantees. The availability of such guarantees is extremely probative of whether a technology constitutes BACT. However, DOJ’s consultant failed to provide in its RFP sufficient detail regarding the specific characteristics of the MRY facility – and when the companies responding to the RFP learned the details, they withdrew the guarantees, almost certainly leaving EPA and DOJ in a worse position than if they had never gone through the RFP process. One might also infer that the court thought that DOJ was trying to pull a fast one, which certainly did not help.

Yesterday’s Cape Wind decision, together with this case, even though involving totally different statutory and regulatory regimes, provide a useful joint reminder of the importance of building the record in administrative cases.

As to this case, would the outcome have been different if EPA had made the BACT decision? Would a decision to impose SCR as BACT have been upheld if the burden were on the person challenging that decision? We’ll never know, but I could see it happening. Burdens do matter.

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The PCB contamination in the Lower Fox River in Wisconsin continues to spawn novel Superfund decisions.  The latest is US v. NCR, in which Judge Greisbach of the Eastern District of Wisconsin reversed his initial ruling, made less than six months ago, that the United States could not establish successor liability under CERCLA against  Appleton Papers, which had bought assets from the alleged  polluting party – NCR Corp – and assumed NCR’s liabilities.  As Judge Greisbach explained in his earlier ruling, there can be no successor liability where the  seller of assets remains a viable CERCLA defendant, since the purpose of successor liability is to prevent “paper transactions” that deny the public access to a solvent party to respond to claims.  Whatever contract rights NCR might have against Appleton, the court initally held that they did not extend to the United States.

While the earlier decision seemed eminently reasonable, it posed a practical problem for the parties, since the PCB remedial work was essentially in the control of Appleton, which the Court ruled was not liable.  That practical problem then unleashed a flurry of creative advocacy by the United States – specifically an argument that the Court could issue orders requiring Appleton as a non-liable party to take steps to facilitate the remedial work.  The Court ultimately declined that invitation to be creative.  However, illustrating once again that hard cases make bad law, the Court did accept the government’s alternative invitation to reverse its earlier holding on successor liability.  To justify this reversal, the court could point to no supporting case law or policies in the doctrine of successor liability; the best the court could come up with was the weak argument that none of the successor liability cases expressly held that it was necessary that the seller of assets be insolvent or dissolved, even though all those cases involved circumstances in which the seller was in fact insolvent or no longer in existence.  To compound the confusion, the court went on to note that, in a private arbitration between Appleton and NCR to resolve their contract dispute, Appleton would be assigned 60% of all liability for the site.  According to the court, the fact that the arbitration assigned a majority of the liability to Appleton somehow justified allowing the government to pursue joint and several CERCLA liability against Appleton. 

Environmental law often pushes courts to put practicality ahead of sound legal principle, which begs the question whether the short-term result justifies the jurisprudential confusion.

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The Massachusetts Supreme Judicial Court today affirmed the decision by the Department of Public Utilities to approve the power purchase agreement, or PPA, between Cape Wind and National Grid. (Full disclosure: Foley Hoag represented the Department of Energy Resources in support of the contract before the DPU.) The decision doesn’t mean that Cape Wind will now get built. Given the (one hopes) temporary problems with the federal loan guarantee program and Cape Wind’s failure thus far to sell the rest of the power from the project, the SJC decision is more of a necessary than sufficient condition to construction.

On the merits, the decision is pretty much a standard nuts-and-bolts review concerning whether there was substantial evidence to support DPU’s decision. The SJC made frequent reference to the deference given both to DPU’s application of its expertise and to its interpretation of statutes it is charged with implementing. 

Going forward, the most significant aspect of the decision is probably the SJC’s finding that, in the absence of a statutory definition of the term “cost-effective,” the DPU was within its authority in in considering

All costs and benefits associated with [the PPA], including the non-price benefits that are difficult to quantify, and including costs and benefits of complying with existing and reasonably anticipated future federal and state environmental requirements.

Similarly, the SJC agreed with the DPU that analysis regarding whether the contract is in the public interest need not be limited to whether lower-priced alternatives exist. The SJC found that there was substantial evidence in the record supporting the DPU’s conclusion that Cape Wind would provide “significant and special advantages by virtue of its location near an area that uses high levels of electricity and the advanced state of the permitting process for the facility.” 

In short, the decision not only affirms the DPU’s decision here, but makes clear that, so long as an appropriate record is compiled, DPU is going to have significant discretion with respect to similar projects going forward.

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Last week, MassDEP finally issued its long-awaited vapor intrusion guidance. Including appendices, it is 148 pages. There is a separate 52-page response to comments on the draft guidance. MassDEP has certainly learned that guidance must at least be described as guidance. The disclaimer runs a full page, and includes the following text:

MassDEP generally does not intend the guidance to be overly prescriptive. Use of such words as “shall,” “must,” or “require,” however, indicates that the text is referring to a specific regulatory and/or statutory requirement, rather than a suggested approach and/or optional measure. Use of the words “should” or “recommend” indicates aspects of a method or approach that are considered appropriate and protective, based on MassDEP’s experience and/or sound technical practices, but do not correspond to a specific regulatory and/or statutory requirement.

The guidance is not a regulation, rule or requirement, and should not be construed as mandatory. Accordingly, this document does not create any substantive or procedural rights, and is not enforceable by any party in any administrative proceeding with the Commonwealth.

My take? 

I was tempted to say “trust, but verify.” However, to be honest, I think I have to say instead, “I’ll believe it when I see it.”

For example, one of the most contentious issues has been how to address potential future vapor intrusion issues when there is currently no building on the site and there are no current plans for a specific building. MassDEP has created a three-tiered approach. Owners of property in Category A, with concentrations below GW-2 standards (GW-2 standards, for readers who are not MCP aficionados, are specifically designed to protect against indoor air exposures), need take no additional precautions prior to building. Owners of Category B sites, with concentrations greater than GW-2 standards, but less than 10 times the GW-2 standards, “should” include the installation of a vapor barrier and an active sub-slab depressurization, or SSD, system. Sites with concentrations greater than 10 times the GW-2 standard will be in Category C.  Buildings on these sites “would be constructed with a vapor barrier and active SSD system” and the site “should” be sampled over a two-year period. 

Don't you just love the artful use of the passive voice here?  Who the heck is actually building the buildings?  Perhaps the the vapor barrier and SSD will build themselves.

Is this a rule or guidance? Time will tell. My prediction? The first time MassDEP varies from its “shoulds” and “woulds” will be one more time than I expect will ever happen. The street-level bureaucracy at MassDEP is still the law west of the Pecos – or at least east of the New York border – and I do not foresee much flexibility. I would be pleased to be wrong.

(And good luck and best wishes to former Foley lawyer Ben Ericson, now Assistant Commissioner for Waste Site Cleanup, as he tries to implement this guidance -- as guidance.)

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On Wednesday, EPA promulgated the final Utility MACT rule. I doubt that anyone reading this blog isn’t already aware of the big news.

As seems frequently to be the case with EPA rules, this one, weighing in at 2.4MB and 1,117 pages, cannot easily be summarized here. In fact, the rule is so complicated – and controversial – that EPA had to generate four separate fact sheets to summarize the rule and its impacts: (1) Costs and Benefits (or, as EPA carefully puts it, “Benefits and Costs”); (2) Summary of the Rule; (3) Clean Air and Reliable Electricity (I wonder why EPA thought this one necessary?); and (4) Adjustments from Proposal to Final.

We live in a complex world, so there is not much use in complaining about how overwhelming this rule is, and about the problems inherent in a system in which rules with costs of approximately $10B annually and benefits ranging from $37B to $90B annually are this complicated and are probably truly understood by a very small number of people. As I tell my Libertarian friends, even Jefferson wouldn’t be a Jeffersonian today. Nonetheless, it is troubling.

The issues worth noting in a blog post are probably the changes from the proposal. Significant changes include:

·         Use of filterable PM for the particulate emissions limit, rather than total PM (which would include condensables).

·         Use of work practice standards, rather than emission limits, during start-up and shut-down. This is an important change, which will make life much easier for regulated units.

·         Greater flexibility in facility-wide averaging.

Reliability has obviously been the big issue for EPA. Units will generally have three years to comply. Permitting authorities may grant a 4^th year, if necessary, and EPA has said that they expect the extra year to be “broadly available.” EPA has also provided a mechanism for “units that are shown to be critical for reliability to obtain” a 5^th year to comply – though EPA has said that it does not expect many units to require or qualify for the 5^th year.

My predictions on the rule’s fate and impact?

·         I’ll be stunned if the rule does not survive judicial review. Of course, in an 1,117 page rule, there may be some obscure provision that is struck down, but the basic provisions will be upheld.

·         The sky will not fall. Significant numbers of jobs will not be lost, and the increase in electricity prices will be smaller than predicted. Since I whack EPA often enough, I’ll defend it here – to a limited extent. I don’t think that there has been a single big rule ever promulgated by EPA where the implementation costs haven’t been less than expected. That’s been true for one simple reason. When industry has clear rules to follow (even if they are not the cost-effective rules I would prefer), industrial innovation works to bring down compliance costs in ways that were not imagined, either by EPA or industry, when the rule was promulgated.

·         Of course, if there is a Republican President and a Republican Congress, all bets are off. Of course, when Mitt Romney was Governor of Massachusetts, he supported regulations by MassDEP that were essentially a state version of the Utility MACT rule, notwithstanding his criticism today of EPA for wanting to promulgate job-killing regulations. Of course, Mitt Romney has been known to change his mind. Of course,… oh, never mind. 

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In New York State Superfund Coalition, Inc., v. New York State Department of Environmental Conservation, the highest court in New York recently put its own gloss on the long-standing environmental issue of "How Clean is Clean". There, the court held that, even though liability for cleanup under New York’s state Superfund statute is triggered when there is a “significant threat” to the environment, the state has authority to promulgate regulations requiring cleanup beyond what would be necessary to eliminate that significant threat.  Specifically, the Court affirmed regulations that require cleanup to "pre-disposal conditions, to the extent feasible". 

The court reached this result by a definitional sleight-of-hand. The court noted that the statute seeks "a complete cleanup of the site through the elimination of the significant threat to the environment posed by the disposal of hazardous wastes at the site." The court then goes on to claim that the statutory standard of a "complete cleanup" to eliminate threats is the same as the regulatory standard of returning the site to “pre-disposal conditions, to the extent feasible”. 

Although the Court of Appeals gets the last word on this issue, its reasoning seems disingenuous.  The statutory standard defines cleanups to be the elimination of significant threats, meaning that a liable party could potentially leave some contamination at a site as long as that contamination did not pose a threat. The regulatory standard, in stark contrast, contemplates the removal of all contamination, whether causing a threat or not, constrained only by whether such removal was “feasible”.  Although the Court of Appeals professes to find no difference in the verbal formulations of these two standards, parties having to undertake cleanups in New York may find the difference to be many millions of dollars.  One can argue whether it is a wise decision to expend societal resources to restore disposal sites back to the condition of the Garden of Eden.  However, it's harder to argue that that decision should be made by courts and regulatory agencies instead of by the legislature.

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Last week, I noted that the D.C. Court of Appeals had found that the National Association of Home Builders did not have standing to challenge a determination by EPA and the Army Corps of Engineers that two reaches of the Santa Cruz River are traditional navigable waters. On Friday, in National Association of Home Builders v. United States Army Corps of Engineers, the NAHB lost yet another standing battle.

This time, the NAHB was challenging the Corps’ nationwide permit, NWP-46, allowing discharges of dredge and fill material into certain upland ditches. The District Court had found that the NAHB did have standing, but ruled against NAHB on the merits. The Court of Appeals didn’t even let them get that far, once more barring the courthouse doors.

Aside from the NAHB’s bad luck in losing in the court of appeals twice in one week, what’s news here? 

The news is that, once again, the Court has provided useful guidance regarding what regulated entities – or their trade groups – must allege to establish standing in these types of cases. The NAHB had asserted that NWP-46 imposes costs on its members because it is ambiguous and leaves members uncertain when they are in fact subject to CWA jurisdiction for filling ditches. Unfortunately for the NAHB, the Court concluded that the Corps has been asserting jurisdiction over upland ditches for years. Moreover, the Court pointed to an acknowledgement by the NAHB VP for Legal Affairs that the Corps had “consistently suggested that at least some upland ditches were subject to CWA jurisdiction.”

In short, the Court concluded that the NAHB’s injury was not traceable to the permit, but was instead traceable to the Corps’ underlying assertion of jurisdiction, which was not asserted for the first time in NWP-46. Indeed, as the Court noted, because the Corps had previously asserted jurisdiction over upland ditches, NWP-46 benefited NAHB members, by providing them a way to comply with the CWA that is less costly than the individual permit process.

As the two NAHB decisions make clear, a trade group asserting standing on behalf of its members – or those members suing on their own behalf – must address the traceability and redressability prongs of the standing requirement with particularity, and must establish both that the specific regulatory action being challenged is the direct cause of their injury and that vacating the agency action will redress that injury.

I’m sure that the third time will be a charm for the NAHB. 

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Those following stormwater issues know that EPA is overdue to promulgate a proposed rule for stormwater controls at post-construction sites. The rule has been extremely controversial, with groups such as the Associated General Contractors arguing that EPA has no authority to promulgate post-construction rules. EPA was originally scheduled to issue the proposed rule by September 30. When EPA couldn’t meet that deadline, it negotiated an extension until December 2 (while stating that the deadline for the final rule, November 19, 2012, would still be met). Well, it’s December 15, and no proposal has been issued.

E&E Daily has now reported that, in recent Congressional testimony, EPA Acting Assistant Administrator for Water Nancy Stoner (a law school classmate, I might add) has acknowledged the obvious and admitted that EPA is “behind schedule.” Stoner did not provide a new target for when the rule would be proposed. If I were a betting person, I’d be skeptical that there are any circumstances under which EPA could actually meet the November 19, 2012 deadline for promulgation of a final rule. 

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