Real Superfund Reform Would Not Place It At the Center of EPA’s Core Mission

Earlier this week, Scott Pruitt released the results of the Superfund Task Force he established in May.  Though skeptical, I was pleased at the creation of the task force and goals he established for it.  With the release of the report, my skepticism has returned.

First, the report and Pruitt’s memo about it repeat the claptrap about restoring “the Superfund program to its rightful place at the center of the agency’s core mission.”  Since he keeps repeating that statement, I have to keep repeating that, every time EPA – or the private sector – looks at the top environmental risks, Superfund doesn’t even make the list.  This time, Pruitt goes further, stating that:

I ask myself every day, what could be more important, more ‘core’ than giving Americans the ability to use the land they are blessed with.

And I answer, “What about the air we breathe and the water we drink?”  It’s harder to avoid breathing the air and drinking the water than using any particular piece of land.  That’s why we have institutional controls to restrict land use, but not institutional controls to prevent breathing of contaminated air.  The skeptical part of my brain is now telling me that this Task Force and putting Superfund at the core of EPA’s mission is just a way for Pruitt to pursue his deregulatory agenda for air and water while still claiming that he’s a real environmentalist.

On the merits, the report has some good ideas, but it’s pretty much a mishmash, many of the pieces of which are internally inconsistent.  I’d be shocked at this point if anything meaningful results.

Remember, I represent the regulated community.  I’d love to see Superfund reformed.  I’d particularly like to see the recommendations for reducing oversight costs implemented.  The government should be embarrassed that it regularly incurs more in oversight costs than PRPs incur in actually performing cleanups.

I just don’t see much prospect for success for a reform initiative when the real purpose of the initiative appears to be to use Superfund as a fig leaf to cover the widespread roll-back of important regulations in other areas.

State Programs to Encourage Zero-Emitting Generation are Really, Really, Constitutional

Hard on the heels of decision upholding the Illinois “zero-emission credit” program to prop up nuclear plants in that state, Judge Valerie Caproni of the South District of New York has now upheld a similar ZEC program in New York. There’s definitely a trend here.  So long as state programs do not directly interfere with wholesale markets, it looks as though they will be affirmed.

(Renewed caveat:  This firm represents, in unrelated matters, a number of the generators who challenged the statute.  We also represent numerous renewable energy firms generally supportive of state authority to provide incentives to renewable energy.  This post is definitely agnostic about the New York statute.  It is the broader question of state authority that interests me here.)

The reasoning of the New York decision was very similar to that in Illinois (as well as the Allco 2nd Circuit decision upholding Connecticut statutes supporting renewable energy generation).  I note only two points from the New York decision that were not discussed, at least with the same directness, in the prior cases.

First, Judge Caproni found that the plaintiffs did not even have standing to argue that the Federal Power Act preempted the New York statute, because she concluded that, under Armstrong v. Exception Child Center, private parties cannot bring Supremacy clause challenges against States.

Thus, the FPA precludes private enforcement except as provided for by PURPA, and private parties such as Plaintiffs “cannot, by invoking [the Court’s] equitable powers, circumvent Congress’s exclusion of private enforcement.”

Second, in finding on the merits that the FPA does not preempt the ZEC program, the plaintiffs argued that:

ZEC program is “tethered” to the wholesale auction. Plaintiffs argue that there is an impermissible tether because: (1) a nuclear generator is eligible for a ZEC only if the NYISO auction rates are insufficient for the generator to stay in business….

Importantly, the court noted that plaintiffs’ argument essentially proved too much.  Many state programs that no one would consider preempted would be at risk if that were the test:

A whole host of measures that States might employ to encourage clean energy development—such as tax incentives or direct subsidies—involve propping up the operation of a generator that might otherwise be unprofitable. Hughes did not prohibit such state assistance, and Plaintiffs have not argued that such state subsidies are per se preempted.

****

Fatal to Plaintiffs’ argument is their failure to offer any cogent explanation why ZECs are preempted but other state incentives to generate clean energy—such as tax exemptions, land grants, or direct financial subsidies—are not. Such incentives also allow clean energy generators to be more competitive than they would otherwise be, and they therefore also affect price signals in the wholesale auction.

And that’s the key to it all.  States can encourage all kinds of generation.  States can provide financial incentives for all kinds of generation.  West Virginia could probably implement a program to encourage coal generation, articulating policy reasons specific to the Mountain State.  As long as the programs do not directly interfere with FERC authority over wholesale markets, the programs should survive constitutional challenge.

State Programs to Encourage Zero-Emitting Generation Are Constitutional

Late last month, the 2nd Circuit Court of appeals rejected a challenge to Connecticut laws intended to encourage use of renewable energy.  Earlier this month, Judge Manish Shah, of the Northern District of Illinois, issued a companion decision, rejecting challenges to the Illinois Future Energy Jobs Act, which grants “Zero Emission Credits” to certain facilities, “likely to be two nuclear power plants owned by Exelon in Illinois.”

(Caveat:  This firm represents, in unrelated matters, a number of the generators who challenged the statute.  We also represent numerous renewable energy firms generally supportive of state authority to provide incentives to renewable energy.  This post is definitely agnostic about the Illinois statute.  It is the broader question of state authority that interests me here.)

Like the plaintiffs in the Connecticut case, the plaintiffs here argued both that the statute was preempted and that it violates the Dormant Commerce Clause.  The Court rejected both arguments.  As to preemption, the importance of the decision is its preservation of state authority, even if it “substantially affects the quantity and terms of wholesale sales,” so long the program does not “directly” affect wholesale rates:

influencing the market by subsidizing a participant, without subsidizing the actual wholesale transaction, is indirect and not preempted.

As to the Dormant Commerce Clause, plaintiffs alleged that the environmental benefits of the statute were a sham, and that its real intent was simply to benefit Exelon.  The Court concluded that the statute imposes neutral standards and the plaintiffs had not alleged that the agencies would implement the statute in a biased way.  The Court also rejected the plaintiffs’ argument that the statute has a discriminatory intent.

Courts must “assume that the objectives articulated by the legislature are actual purposes of the statute, unless an examination of the circumstances forces [the Court] to conclude that they ‘could not have been a goal of the legislation.’”

Overall, the case, together with the 2nd Circuit decision in Klee, provides strong support for state authority to encourage renewable or low-emitting sources of energy.  Individuals can argue about the merits of the Illinois statute – and the Connecticut statutes – but certainty is generally a good principle in the law, and we are moving towards greater certainty about state authority in this area.

Reports of the Death of the SEP Have Not Been Greatly Exaggerated

Last month, Attorney General Sessions barred DOJ from entering into settlements that provide for payments to non-governmental persons not a party to the dispute.  At the time, I peered into my crystal ball and proclaimed that the practice of incorporating supplemental environmental projects into environmental settlements was “hanging by a thread.” For once, my speculation was accurate.

Yesterday, DOJ notified the District Court for the District of Columbia that the United States and Harley-Davidson had jointly agreed to modify a consent decree that had already been lodged with the Court.  The original decree provided for a $3 million SEP, to replace old woodstoves.  Notwithstanding that SEPs have traditionally been used to mitigate penalty amounts, the modified decree did not increase the penalty to Harley-Davidson; it merely eliminated the SEP.  Well done, Harley-Davidson lawyers!

In modifying the decree, DOJ explicitly cited to the Sessions memorandum, noting simply that:

Questions exist as to whether this mitigation project is consistent with the new policy.

Ya’ think?

The only question remaining at this point is whether other defendants will be able, like Harley-Davidson, simply to pay smaller penalties or whether, going forward, penalties will increase where SEPs are unavailable as mitigation.  I know where this administration’s proclivities lie, but I’m going to stop speculating while I’m ahead of the game.

EPA Fails to Justify Its Use of Surrogates for Certain Hazardous Air Pollutants

Yesterday, the D.C. Circuit Court of Appeals remanded EPA’s MACT standards for PCBs, polycyclic organic matter, and hexachlorobenzene to EPA.  Rather than setting specific MACT standards for these compounds, EPA regulated them through “surrogates,” commonly particulate matter.  The Sierra Club and others argued that EPA did not adequately justify the use of surrogates.

The three-part test for the adequacy of a surrogate is clear and worth repeating:

(1) the relevant hazardous air pollutant is invariably present in the proposed surrogate;

(2) control technologies for the proposed surrogate indiscriminately capture the relevant HAP along with other pollutants; and

(3) the control of the surrogate is the only means by which facilities achieve reductions in emissions of the hazardous air pollutant.

Here, while EPA provided some explanation for its basis in utilizing surrogates, it failed to respond to any of the comments it received on its proposed determination.  Instead, EPA basically interpreted the attack on the surrogates as an attack on the original underlying standards, and concluded that it did not need to respond to such comments.  Not so fast, said the Court.

EPA cannot hide behind the established nature of the standards it uses when it applies new surrogacy relationships.

The lesson from this one may be basic, but it’s still important.  EPA really does have to respond to comments as a regulation may move from proposal to final rule.  Failing to do so provides an easy argument by a plaintiff that the final rule was arbitrary and capricious.

One final note.  Don’t try to blame Donald Trump or Scott Pruitt for this one.  The decision to rely on surrogates and the proposed and final determinations were all performed under the prior administration.

EPA Delays Compliance with Massachusetts MS4 Permit

On Thursday, EPA extended the compliance deadline for its General Permit for Small Municipal Separate Storm Sewer Systems for one year, until July 1, 2018.  The move almost certainly prompted a collective sigh of relief among both small municipalities directly subject to the rule and developers who would be indirectly impacted, as MS4s struggle to comply.

EPA gave several reasons for the delay:

  • The MS4 permit had been challenged, both by those subject to it and by the Conservation Law Foundation.
  • EPA is exploring whether it might be useful to take the litigation to some kind of alternative dispute resolution procedure.
  • The delay will align the Massachusetts permit with a functionally identical MS4 permit issued for New Hampshire, which already has a July 1, 2018 compliance date.

There’s already been a lot of litigation over EPA’s delays in enforcing various Obama-era rules.  However, I don’t really see this delay as of a piece with the others.  While CLF may object to the delay, this one seems perfectly reasonable to me.  Providing time for negotiations and aligning the Massachusetts compliance date with that in New Hampshire, where the New Hampshire MS4 permit is now also subject to litigation, just seems like good common sense.

NGOs 1, Trump EPA 0: The First Skirmish in the Great Environmental Rollback War Goes to the Greens

Earlier this week, the D.C. Circuit Court of Appeals handed environmentalists at least a temporary win in what I think was the first case to reach judicial decision in Scott Pruitt’s great environmental roll-back tour of 2017.  The Court rejected EPA’s effort to stay the effective date of the New Source Performance Standards for fugitive emissions from oil and natural gas operations, pending EPA’s reconsideration of certain aspects of the Obama-era rule.

Notwithstanding Judge Brown’s dissent, EPA’s position on the merits seemed barely credible.  I understand the argument that the stay was not final agency action and thus not judiciable.  It just doesn’t seem compelling to me.  If EPA had amended to rule to extend the compliance deadlines, that clearly would have been subject to judicial review.  Why should the answer be different because EPA styles its action as a stay, rather than a revision to the regulations?  The impact is exactly the same.

As to EPA’s position that the four issues which it was reconsidering could not have been addressed during the original rulemaking by the industry groups now seeking reconsideration, EPA’s position was almost embarrassing.  As the Court repeatedly demonstrated, not only could the industry groups have addressed the issues during the original rulemaking, but they actually did so.  Moreover, EPA did consider those comments and, at least in parts, adopted them in the final rule.  My favorite example is the court’s discussion regarding the criteria for exemption for well-site pneumatic pumps.  As the Court noted:

[The American Petroleum Institute] … proposed precisely the technical infeasibility language EPA adopted in the final rule, suggested that an engineer certify technical infeasibility, and justified its proposed exemption based on a lengthy description of why existing sites were not designed to “handle” EPA’s proposal.

The record thus belies EPA’s claim that no industry group had an opportunity to comment on the “scope and parameters” of the pneumatic pump exemption.

The real question at this point is whether this decision is any kind of harbinger.  Practitioners know that the record of the Bush EPA in rolling back Clinton rules was shockingly poor, given Chevron deference.  Are we going to see the same again?  The Court threw EPA what could prove to be a rather large fig leaf by noting that the decision does not prevent EPA from reconsidering the methane rule.  The Court also quoted FCC v. Fox Television Stations – the same case on which EPA is relying in its rollback of the WOTUS rule:

[EPA] is free to [reconsider the rule] as long as “the new policy is permissible under the statute.., there are good reasons for it, and … the agency believes it to be better.”

This is where the battles are going to be fought over the next several years.

State Programs to Encourage Renewable Energy Are Constitutional (In Case You Were Worried)

Last week, the 2nd Circuit Court of Appeals affirmed a District Court decision rejecting a challenge to Connecticut statutes intended to encourage renewable energy development in Connecticut.  It’s a critical win, not just for Connecticut, but for many renewable energy programs in other states across the country as well.

(Important caveat.  These cases are bloody complicated and no blog could possibly summarize them without omitting important details.  Hold your criticism!)

Allco Finance develops small renewable energy facilities that are considered “qualifying facilities” under Public Utility Regulatory Policies Act.  PURPA guarantees QFs the right to sell energy to utilities at the utilities’ avoided costs.

In 2013 and 2015, Connecticut enacted legislation to encourage use of renewable energy in Connecticut.  The legislation authorized the Department of Energy and Environmental Protection to solicit renewable energy proposal and to “direct” utilities to enter into bilateral contracts with the winners.  Allco alleged that DEEP was “compelling” utilities to enter into contracts and thus encroached on FERC’s exclusive regulatory authority over wholesale prices.

Even though the case was at the motion to dismiss stage, the Court was able to reject Allco’s arguments, because, notwithstanding the “direct” language, documents referenced in Allco’s complaint made clear that:

[t]his RFP process, including any selection of preferred projects, does not obligate any [utility] to accept any bid,” and (b) that the winning bidders “will enter into separate contracts with one or more [utilities] at the discretion of the [utilities].

Thus, the Court concluded that the statute did not encroach on FERC authority and was not preempted.  Importantly, the Court distinguished the Supreme Court’s recent decision in Hughes v. Talen Energy Marketing.  Rather than interfering with a FERC-approved auction, as was the case with the Maryland program in Hughes, the Connecticut RFP actually required FERC approval of any contracts between utilities and renewable power producers.

Allco also challenged Connecticut’s Renewable Portfolio Standard, alleging that it violated the dormant Commerce Clause, because it disadvantaged owners of out-of-state renewable energy certificates.  The Court found that, because Connecticut is only served by electricity generated within ISO New England and certain adjacent areas:

we here recognize the importance of Connecticut’s interest in protecting the market for RECs produced within the ISO-NE or in adjacent areas. Connecticut’s RPS program serves its legitimate interest in promoting increased production of renewable power generation in the region, thereby protecting its citizens’ health, safety, and reliable access to power.

Significantly, we note that Connecticut’s RPS program makes geographic distinctions between RECs only insofar as it piggybacks on top of geographic lines drawn by ISO-NE and the NEPOOL-GIS, both of which are supervised by FERC—not the state of Connecticut.

Thus, the Connecticut program did not violate the Commerce Clause.

Klee’s importance almost cannot be overstated.  It is not just that it gives necessary backing to Connecticut’s renewable energy program and similar programs in other states.  It also provides a fairly clear roadmap for what states must do in order to ensure that their programs pass constitutional muster.

Big sigh of relief in green states.

EPA Does Not Have a Non-Discretionary Duty to Assess the Impact of Clean Air Regulations on Employment

Yesterday, the Court of Appeals for the 4th Circuit reversed a District Court decision and rejected the lawsuit by Murray Energy which argued that EPA had a non-discretionary duty under § 321(a) of the Clean Air Act to:

conduct continuing evaluations of potential loss or shifts of employment which may result from the administration or enforcement of the provision of this chapter and applicable implementation plans, including where appropriate, investigating threatened plant closures or reductions in employment allegedly resulting from such administration or enforcement.

The Court concluded that this language “does not impose on the EPA a specific and discrete duty amenable to” judicial review.  As the Court noted:

Section 321(a) calls for evaluations without, for the most part, specifying guidelines and procedures relevant to those evaluations. Furthermore, Section 321(a) establishes no start-dates, deadlines, or any other time-related instructions to guide the EPA’s continuous evaluation efforts.

I’m not surprised by the outcome.  Notwithstanding my usual reluctance to speculate, I did go a short way out on a limb and state that the District Court “probably got this one wrong.”  The more interesting question is why the current administration pursued the appeal.  It says something about the havoc that this would have caused that even Scott Pruitt did not want to deal with judicial review over a continuing obligation to evaluate potential job losses resulting from EPA regulations.

Meet the New WOTUS. Same as the Old WOTUS.

Earlier this week, EPA and the ACOE began implementing the Trump administration’s efforts to deconstruct the Obama rule defining “Waters of the United States” under the Clean Water Act.  EPA and the ACOE submitted for Federal Register publication a proposed rule that would temporarily restore the WOTUS definition that existed prior to the promulgation of the Obama rule in 2015, while they go about drafting a narrower definition.

The overall effort to undue the WOTUS rule is obviously important, but I have to confess, simple country environmental lawyer that I am, that I find this proposal mostly just puzzling.  I would of course hate to think that anyone acting at the behest of the President would do anything disingenuous, but it’s hard to think of a different word here.  The proposal states that its intent is to reduce uncertainty in the regulatory community.  However, one point on which all sides agreed prior to promulgation of the 2015 rule is that the status quo was intolerable, precisely because no one knew what WOTUS meant.

It is difficult to see how a return to that regime would increase certainty in the regulatory community.  BTW, it’s worth noting here that the proposed rule indicates that a return to the pre-2015 status quo also includes a return to reliance on the 2008 Guidance interpreting Rapanos, which conservatives hated because it relied on Kennedy’s “significant nexus” opinion.  It’s difficult to believe that the administration really means that.

The proposed rule also states that withdrawal of the Obama rule is important, because judicial decisions on the Obama rule might otherwise leave different definitions in place in different states.  However, since the entire thrust of the proposed rule is to emphasize the importance of section 101(b) of the CWA, which is intended to “recognize, preserve, and protect the primary responsibility and rights of States” in the implementation of the CWA, it’s pretty clear that this administration is not troubled by different levels of protection in different states.  Does anyone following this process expect any outcome other than a narrowed definition which sticks pretty closely to adjacent waters, with repeated declarations that states are free to regulate more stringently?

Finally, commenters have noted that the proposal does not address the science behind the 2015 rule, relying on the President’s authority to make different policy choices, as long as they are “reasoned.”  I still think that it’s going to be difficult to defend a very narrow definition purely on policy grounds.  We’ll find out sometime in the next few years.  

Does the Concept of Regulatory Takings Comport With Original Intent?

Last Friday, the Supreme Court issued an important regulatory takings case, refining the test to be used to determine what is the appropriate unit of property to use to assess the impact of a regulation.  It’s an interesting case and I think that the Court probably got it right.  However, that’s not what caught my eye about the case.  To me, Justice Thomas’s dissent is the most intriguing.

Justice Thomas, while joining the principal dissent, separately acknowledged that the Court’s regulatory takings jurisprudence “has never purported to ground those precedents in the Constitution as it was originally understood.”  In other words, the original decision on regulatory takings, Pennsylvania Coal Co. v. Mahon, made the concept of a regulatory taking up out of whole cloth.  Nice of Justice Thomas to concede that.  Justice Thomas would like to see whether the concept:

can be grounded in the original public meaning of the Takings Clause of the Fifth Amendment or the Privileges or Immunities Clause of the Fourteenth Amendment.

I have another idea.  Why don’t the conservatives on the Court admit as a group that the concept of a regulatory taking cannot in any way be seen as consistent with original intent.  The liberals on the court could take a different path and acknowledge that the concept has outlived its usefulness.  They could then unanimously overrule Mahon.

On this front, I note that Justice Gorsuch, who has quickly emerged as the great hope of original intent scholars, did not participate in the case.  If he wants to really demonstrate his credentials, why not show them by supporting original intent, even in the regulatory takings area, where conservatives like the concept, but can’t find any basis for it in the actual words of the Constitution?  That would prove he really means it.

Is It a Dividend? Is It a Tax? Could President Trump Care Less?

In February, I posted about the formation of the Climate Leadership Council and its push for what it calls its “Carbon Dividend” plan.  In essence, it’s a gradually increasing carbon tax.  The plan would be revenue neutral, with the proceeds being returned to taxpayers.  Thus, the name.  I loved the idea and I still love it.  I particularly love that the tax starts at $40/ton – that’s a serious number.

However, as I noted in February, the founders of the CLC are a who’s who of the old-line GOP establishment – precisely those whom President Trump would generally refer to as “losers”, unless he could spare the time to come up with something more derogatory.

The CLC has now brought on a number of corporate heavyweights, including GM and four of the world’s largest oil and gas companies (BP, ExxonMobil, Shell, and Total), among others.  They published their support in a Wall Street Journal ad.  In a cheerful bit of optimism, the program is now called “The Consensus Climate Solution.”  The ad describes the plan as “Pro-Environment, Pro-Growth, Pro-Jobs, Pro-Competitiveness, Pro-Business and Pro-National Security.”  Who could be against it?  Here’s a hint.  I think that the tag line would work better if phrased as follows:

Pro-Environment, Pro-Trump, Pro-Growth, Pro-Trump, Pro-Jobs, Pro-Trump, Pro-Competitiveness, Pro-Trump, Pro-Business, Pro-Trump, and Pro-National Security (and Pro-Trump)

Seriously, this is no time for cynicism.  This is a great plan.  A tax starting at $40/ton would have real impact.  (The most recent RGGI auction price?  $2.53/ton.)  As I noted earlier this week, we need smart people of good will and of all political stripes advocating solutions if we’re going to get anywhere.

Trump may call you losers, but, men and woman of the CLC, I salute you!

D.C. District Court Determines that Dakota Access Environmental Assessment was Inadequate

On June 14, 2017, the District Court for the District of Columbia issued a decision in Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers. The Court found that the Army Corps of Engineers (“the Corps”) had not adequately considered several issues in its environmental assessment (“EA”) for the Dakota Access Pipeline, and that therefore the Corps’ decision-making was arbitrary and capricious.

The EA was undertaken pursuant to the National Environmental Policy Act (“NEPA”), which requires that any permitting federal agency take a “hard look” at the environmental impacts of a federally permitted project. A federal agency must take a “hard look” but has substantial discretion regarding whether to permit a project so long as the agency’s review is not arbitrary and capricious. Although the District Court found much of the EA to be adequate, it found the Corps’ EA to be arbitrary and capricious in certain key areas, as described below.

Controversial Impacts from a Scientific Perspective

The Court found that the Corps failed to consider the extent to which the pipeline’s effects might be controversial from a scientific perspective, which can be a basis for the Corps to find that a project might have significant impacts on the environment. Such a finding would in turn prompt the Corps to carry out an Environmental Impact Statement (“EIS”).

Notably, an EIS is lengthier and typically involves more formal consultation than an EA. Whether the Corps should have carried out an EIS for the pipeline’s crossing at Lake Oahe, just upstream of tribal reservation land, is a key source of contention in the lawsuit.

The Potential Effects of an Oil Spill

The Court also found that the Corps failed to adequately consider the effects of an oil spill, which led to several deficiencies in its EA.

For example, the Court found that the Corps did not adequately consider the potential impacts of a spill on several tribal treaty rights, including fishing and hunting rights on and near Lake Oahe. The Court did find, however, that the Corps had adequately considered potential impacts of a spill on tribal water rights.

The Court also found that the Corps’ environmental justice methodology was faulty, as it focused only on construction impacts on majority white and relatively well-off communities within 0.5 miles of the Lake Oahe crossing, even though a spill could affect communities more than 0.5 miles downstream from the crossing.

The Standing Rock Sioux Tribe is located 0.55 miles downstream from the crossing but was not part of the main environmental justice analysis. The final EA devoted a separate section to environmental justice impacts specifically on the Standing Rock Sioux, but the Court criticized the Corps’ analysis because it focused on construction impacts and barely mentioned spill impacts, even though the Court suggested that the latter are of greatest relevance because the tribe is downstream and relies on water from Lake Oahe.

What Now?

The Court remanded the matter to the Corps for reconsideration. This could lead to a revision of the Corps’s EA, or could prompt an EIS.

The Court noted that in most instances the remedy in such a situation is to vacate the administrative decision and halt the activity until the administrative process is adequately carried out, but there are exceptions.  The Court asked the parties to brief whether the Dakota Access should be allowed to continue to operate the pipeline during the Corps’ review process.

Protection for Tribal Rights

Notably, the decision confirms several of the tribes’ bases for claiming that the Corps’ EA was inadequate. The decision may lead to stronger protection of tribal rights in the future.

For instance, it will almost undoubtedly prompt the Corps to devote more time in the future to analyzing the potential impacts of oil spills on treaty rights and to environmental justice considerations. The Corps’ permitting decisions have been overturned a number of times for failure to adequately consider reserved treaty rights, such as hunting and fishing rights, but never in such a high-profile case. The decision may also cause the Corps to select a zone for the environmental justice analysis that is more than 0.5 miles downstream at water crossings.

Future of the Pipeline

It is possible that Dakota Access will face a temporary halt in its operations, although the Court may instead rule that the company can continue to operate the pipeline during the Corps’ deliberations. This creates a degree of uncertainty that could have business implications for the pipeline and the company that constructed it.

Over the next few months, however, it is quite possible that the Corps will take the statutorily mandated “hard look” required by NEPA and re-approve the project — with or without an EIS. The tribes could, of course, further litigate the issues after the Corps’s new evaluation, increasing uncertainty and cost for the project. One of the parties might also appeal the District Court’s decision, which would create a more extended period of uncertainty.

Considerations for Financial Institutions

Meanwhile, the case and related controversies may have an effect on standards that financial institutions apply to such projects.

On May 18, 2017, presumably in reaction, at least in part, to strong public criticism of the institutions financing the Dakota Access Pipeline, the Equator Principles financial institutions — which include 80 banks, such as Citigroup, Barclays, Credit Suisse, Wells Fargo, and JP Morgan — launched a working group to examine whether they should continue to assume that domestic law is adequate in high-income countries.

The Equator Principles financial institutions, which provide the vast majority of the world’s project finance, apply the IFC Performance Standards — a specific set of environmental and social screens — to their review of investments in developing countries. At the moment, these standards are not applied to projects in high-income countries such as the United States, where domestic law is currently deemed to be sufficient. Notably, 10 of the 80 Equator Principles financial institutions — including ABN Amro and BNP Paribas — recently issued a statement calling for application of the IFC Performance Standards in high-income countries.

More information on some of the differences between the IFC Performance Standards and U.S. law — as they relate to indigenous peoples, security, and community engagement — can be found in a recent report, published by Foley Hoag, that was commissioned by the financial institutions that lent to the Dakota Access pipeline. More information about the Foley Hoag report is available here.

Attorneys General Continue to Battle the Trump Administration Over Environmental Regulations

Democratic Attorneys General have continued their efforts to combat the Trump administration’s attempts to roll back environmental regulations developed under the Obama administration in two recent actions. Thirteen AGs, including Massachusetts AG Maura Healey, sent a letter last week to Scott Pruitt, the Administrator of the Environmental Protection Agency, threatening legal action if the agency takes steps to weaken or delay the greenhouse gas emissions standards that were established in 2012 for cars and light-duty trucks for model years 2022-2025. A coalition of states led by democratic AGs also filed a lawsuit in the District Court for the Northern District of California against the Department of Energy on Tuesday, alleging that the agency’s failure to publish final energy efficiency standards for five categories of appliances and industrial equipment violates several federal laws.

The dispute regarding GHG emissions standards for light-duty vehicles began in March when Department of Transportation Secretary Elaine Chao and Administrator Pruitt announced that the EPA would revisit the Midterm Evaluation process, which is required by the GHG emissions regulations. While the EPA had issued a Final Determination of the Midterm Evaluation on January 12 that left in place the unaltered emissions standards for model years 2022-2025, the agency now intends to make a new Final Determination by April 2018.

In their letter to Administrator Pruitt, the AGs responded to a May letter from Pruitt to California Governor Jerry Brown in which Pruitt argued that the first Midterm Evaluation process was legally flawed. Pruitt claimed that the EPA did not allow sufficient opportunity for public comment, did not submit a draft Technical Assessment Report and draft decision to the Office of Management and Budget, and acted prematurely. The AGs countered that the evaluation was “lawful and fully supported by the record” and that EPA concluded that “the current standards are feasible at a reasonable cost, will achieve significant carbon dioxide emissions reductions, and will provide significant economic and environmental benefits to consumers.” The letter stating the signatories’ intent to “vigorously pursue appropriate legal remedies” to preserve the current emissions standards was signed by the attorneys general of Connecticut, Delaware, the District of Columbia, Iowa, Maine, Maryland, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and the Secretary of Pennsylvania’s Department of Environmental Protection.

Many of those same attorneys general brought suit on behalf of the people of their states claiming that the DOE is violating the Energy Policy and Conservation Act, the Federal Register Act, and the Administrative Procedure Act by failing to publish in the Federal Register the energy efficiency standards for portable air conditioners, uninterruptable power supplies, walk-in coolers and freezers, commercial boilers, and air compressors, which the plaintiffs allege were required to be published by March 15. The complaint states that DOE’s failure to finalize the standards undermines their interest in, among other things, increased energy efficiency and reduced energy use within their jurisdictions, and protecting their populations and environments. In May, the DOE published a final rule regarding the energy conservation standards for ceiling fans after plaintiffs filed similar lawsuits challenging delayed energy efficiency standards. Tuesday’s suit was brought by California, Connecticut, Illinois, Maine, Maryland, Massachusetts, New York, Oregon, Pennsylvania, Vermont, Washington and the City of New York.

Climate Change Skeptics Occasionally Become Believers, But Believers Don’t Become Skeptics. Why Is That?

On Friday, Greenwire published a very interesting interview with Jerry Taylor, every climate advocate’s favorite Libertarian. The interview chronicles Taylor’s journey from climate skeptic to climate believer.  For those of you who don’t know his story, Taylor left the Cato Institute to found the Niskanen Center, where he works on promoting Libertarian solutions to climate change.

I’ve seen stories about Taylor before and Greenwire’s piece is an excellent interview (and thanks to Greenwire for taking this out from behind its pay wall and making it available for free!).  The real reason I’m posting about it, though, is that it got me thinking.  Taylor is not the only climate skeptic who’s become a believer – but one sure does not see many stories about climate believers becoming skeptics.

One might wonder why that is, though I confess that the answer seems obvious to me.  Reading the Taylor interview, which does go through his conversion in detail, brought home the point that, if one has an open mind, the conversion process can only run one way.

Climate skeptics like to talk as though they are scientific heroes, fighting today’s dogma until some paradigm shift reveals to the world that they were right all along.  However, in the world of scientific revolutions, the revolutionaries pile decade of evidence upon decade of evidence before the new paradigm overwhelms the old.  Sorry, but that’s not the case here.  Climate skeptics seem to me to be much more like those who point to gaps in the fossil record and somehow create an entire edifice that they think undermines evolution.

We’re still waiting for the intelligent design paradigm shift and we’re going to be waiting a long time for the climate skeptic paradigm shift.  In the meantime, believers of all stripes should welcome Jerry Taylor.  We need all kinds of smart people advocating for all kinds of solutions to climate change.  Let’s hope he brings more Libertarian believers to the fight.