UCS Says to Add More Renewables to the Clean Power Plan; If It’s Better, Does that Make It Best?

The Union of Concerned Scientists today announced release of a report which attempts to document that the renewable energy energy-renewable-two-workers-installing-rooftop-solar-panels“building block” in EPA’s Clean Power Plan is not sufficiently aggressive. The report argues that, just relying on existing trends and compliance with renewable energy standards, renewable energy can supply 23% of electricity sales nationally by 2030, well above the 12% assumed by EPA. This would translate into a 40% reduction in GHG emissions, rather than the 30% that EPA says the proposed CPP would attain.

I don’t know if UCS is correct, though I’ve assumed that EPA’s projections are conservative, in order to make it easy for the skeptical to support the plan. I’m interested here in two legal issues implicitly raised in the UCS report. EPA, in regulating under § 111(d) of the Clean Air Act, must establish standards of performance based on the “best system of emission reduction” (which must take into account the cost of emission reductions). UCS’s fundamental argument is that EPA’s system is not the “best,” because EPA can obtain greater reductions than what it has proposed with almost no impact on electricity prices.

The administrative law question would then be whether promulgation of the CPP as currently drafted would be arbitrary and capricious because it would not represent BSER. I think that would be an uphill battle, but it would of course depend on the record ultimately before EPA when it promulgates the final rule.

The flip side of this issue is not new; it’s been at the core of all the questions raised about the CPP. As I’ve noted in the past, I’m sympathetic to EPA here. Climate change is a real problem. Congress hasn’t enacted legislation putting a price on carbon. EPA feels it must do something and wants to make its rules take as much advantage of market incentives as the law will allow. I get all that. What I don’t get is how the building blocks of the CPP, other than the required heat rate improvements at generation facilities, constitute “standards of performance for any existing source….” How can that be, when most of the plan has nothing to do with emissions from sources?

I think I hope EPA wins that battle, but it does not seem a foregone conclusion to me. If EPA does win, it will be interesting to see if UCS can persuade a court that EPA has failed to require what is in fact the “best” system of emissions reduction, because they have not given renewable energy its full and proper role.

What a Shock?! Nebraska’s Early Challenge to EPA’s Clean Power Plan Is Dismissed

Opponents of EPA’s Clean Power Plan have not been willing to wait until a final rule has been promulgated before challenging EPA’s authority. On Monday, Nebraska’s challenged was dismissed – not surprisingly – as premature.

Nebraska’s claim was simple – the Clean Power Plan relies in part on technology demonstrated with funding pursuant to the Energy Policy Act of 2005. However, that statute precludes EPA from finding that technologies have been adequately demonstrated for the purposes of § 111 of the Clean Air Act based “solely” on use of the technologies by facilities funded under the Energy Policy Act.

The Court’s response was equally simple.  EPA has not yet made any final decision to rely on technologies demonstrated with help from Energy Policy Act funding.  If it does, Nebraska can challenge the final rule when promulgated as being in violation of the Energy Policy Act. Of course, it did not help Nebraska’s case that, far from finally deciding the issue, EPA explicitly asked for comment on the extent to which it can or should rely on technology demonstrations at facilities funded under the Energy Policy Act.

While the other suits filed in advance of the final rule rely on different arguments, I don’t expect them to fare any better. As the Court here noted:

The State has jumped the gun. If Congress had wished to allow immediate, interlocutory appeals of proposed rulemaking under the Clean Air Act, it could have done so. It did not, and for good reason: making environmental regulations is difficult and complicated enough without having federal judges weigh in at every step along the way. Instead, as dictated by basic and well-established principles of administrative law, the State must wait for a final agency action.

EPA Really Does Have Authority To Withdraw Specifications Under Section 404 of the Clean Water Act

Last year, the D.C. Circuit Court of Appeals ruled that EPA has authority to withdraw its approval for the specification of sites for the disposal of fill material, even after the Army Corps has issued a permit for the discharge under section 404 of the Clean Water Act. Now, Judge Amy Berman Jackson of the District Court for the District of Columbia has ruled that EPA properly exercised that authority with respect to the Spruce No. 1 Mine in West Virginia. spruce mineThe decision, which appears bullet-proof to me, is a ringing endorsement of EPA’s authority in this area.

As an initial matter, it’s worth emphasizing that Judge Jackson originally ruled for Mingo Logan, finding that EPA could not withdraw a specification after the permit issued. Indeed, she could not resist a reminder of her original holding:

The Court is not unsympathetic to the concerns voiced by Mingo Logan, the State of West Virginia, and the amici about the importance of finality in a permitting process, and those concerns, in part, underlay the Court’s determination that EPA’s interpretation of section 404(c) as authorizing it to act after a permit issued was not reasonable at the second level of the analysis set forth in Chevron. But that battle has already been fought and lost, and this Court is not free to take up the issue again.

One has to admire trial court judges who recognize and accept their role in the system.

Mingo Logan made both legal and factual arguments and the Court rejected them all. First, Mingo Logan asserted that EPA could only withdraw a specification after the permit issued if it had “substantial new information” acquired after issuance of the permit. Not so.

Although the Court of Appeals decided only that there is no temporal limit on the exercise of EPA’s veto authority, and it left it to this Court to decide if there is some substantive limit, the emphasis the court placed on “Congress’s intent to confer on EPA a broad veto power,” sends a strong message here.

Next, Mingo Logan argued that EPA’s finding that the specifications would cause “unacceptable adverse impacts” was arbitrary and capricious. Noting that the deference always due agency decisions is heightened when “an agency’s action relies on scientific and technical information touching upon the agency’s area of expertise,” the Court had no difficulty affirming EPA’s decision.

Finally, it’s worth noting that the Court also affirmed EPA’s authority to withdraw specifications based on the impact of the disposal downstream of the actual disposal location, even if those impacts would occur downstream of detention basins which were subject to a separate permitting process under section 402 of the CWA. The existence of the Section 402 permit did not insulate the downstream impacts from EPA’s authority under section 404.

Not a good day for mountaintop mining.

The Atmosphere Is a Public Trust. So What?

The last frontier of citizen climate litigation has been state-based litigation alleging that states have a public trust obligation to mitigate climate change. As I have previously noted, I’m skeptical that these cases are viable. A decision last month by the Supreme Court of Alaska suggests that such skepticism is well-founded.  Kivalina Aerial View

In Kanuk v. Alaska, a number of minors living in Alaska brought suit, claiming that Alaska had violated its public trust obligation to protect the atmosphere. While finding that the plaintiffs had standing, the Court held that the claims were non-justiciable due to “the impossibility of deciding [them] without an initial policy determination of a kind clearly for nonjudicial discretion.”

Following the lead of the decision in American Electric Power v. Connecticut, the Court stated that:

The limited institutional role of the judiciary supports a conclusion that the science- and policy-based inquiry here is better reserved for executive-branch agencies or the legislature, just as in AEP the inquiry was better reserved for the EPA.

Is there any guarantee that courts in other states will follow the Alaska Supreme Court’s lead? Certainly not. However, I’ll admit to being greatly surprised if they don’t.

The Expanding Availability of Apportionment To Limit Liability in Superfund Cases

In Burlington Northern in 2008, the US Supreme Court ruled that Superfund liability could be apportioned whenever there was a reasonable basis for showing that the harm was divisible, such as by considering the length of time a PRP had been operating a site, the volume of waste contributed, or the percentage of the site utilized by that PRP. Notwithstanding that ruling, many courts since 2008 have continued to shy away from apportionment, content to relegate the division of liability to “equitable factors” pursuant to Section 113(f) contribution. Indeed, I blogged several years ago on the reluctance of the Seventh Circuit to follow Burlington Northern in connection with the Lower Fox River Superfund matter.

In a new decision on the Lower Fox River case, US v. P.F. Glatfelter Company , however, the Seventh Circuit has now reversed field, ruling that the trial court erred in failing to recognize the possibility that the harm might be shown to be divisible. Originally in enforcing a preliminary injunction on behalf of the government, the Seventh Circuit had agreed with the trial court that PCB cleanup costs in one portion of the Lower Fox River were not susceptible to apportionment because the PRP’s contribution was sufficient by itself to trigger the cleanup level of 1 part per million. In its new decision, the Seventh Circuit notes that information adduced at trial shows that the issue of divisibility is more complex than a binary test whether the PRP’s contribution was over 1 ppm:

As a result, we think the harm would be theoretically capable of apportionment if [the PRP] could show the extent to which it contributed to PCB concentrations in [that portion of the River]. And if [the PRP] cleared that hurdle, we think a reasonable basis for apportionment could be found in the remediation costs necessitated by each party.

In the end, the Seventh Circuit decision underscores that PRPs should not overlook the opportunity to limit their CERCLA liability through apportionment.  It’s hard to imagine a multiparty Superfund site where expert opinion cannot be found to offer a basis for dividing up the response costs in some mathmatical way.  Such a division of liability avoids the uncertainty of contribution proceedings where it is difficult to know what equitable factors will be found to be controlling or what parties will have the resources to pay their share of the liability.   

 

 

 

 

 

EOEEA Releases Draft Ocean Management Plan Update: Now with Fees

The Massachusetts Executive Office of Energy and Environmental Affairs (EOEEA) recently released for public review and comment a draft update to the Ocean Management Plan for the Commonwealth. The Oceans Act, signed by Governor Patrick in 2008, required the Secretary of EOEEA to develop a comprehensive ocean management plan to be reviewed every five years. The first plan was released in 2009, and the recently released update is a result of this five year review. The plan addresses the areas of habitat, fisheries, sediment resources, recreational and cultural services, transportation and navigation, and… More

CERCLA Preempts Local Cleanup Bylaws; PRPs Everywhere Breath a Sigh of Relief

In an important decision yesterday, Judge Douglas Woodlock of the District of Massachusetts confirmed that CERCLA preempts local cleanup bylaws. The case involved one aspect of the cleanup of the W.R. Grace Superfund Site in Acton, Massachusetts. In 2005, EPA issued a Record of Decision requiring operation of a groundwater pump and treat system in what is known as the Northeast Area of the Site. However, EPA recognized that the contamination in the area was limited and stated in the ROD that the treatment system might be turned off in three years if certain criteria were met. After three… More

The SAB Enters the “Waters of the United States” Fray: Guess Which Side the Scientists Support

The Science Advisory Board has now provided its advice to EPA and the ACOE concerning their proposed rule clarifying the definition of “waters of the United States” BM-NeedToKnow-WetlandBanking-GALunder the Clean Water Act. In a brief letter that can only worry the National Farm Bureau and embolden those who thought that the EPA/ACOE proposal did not go far enough, the SAB concluded that:

the available science supports the conclusion that the types of water bodies identified as waters of the United States in the proposed rule exert strong influence on the physical, biological, and chemical integrity of downstream waters.

In fact, the SAB explicitly called for EPA to include within the definition of WOTUS certain categories of waters that the rule would exclude. “Some of the exclusions listed in the proposed rule do not have strong scientific justification and the SAB recommends that several should be reconsidered.”

In a nice little swipe at the lawyers among us, the SAB also found that:

the term “significant nexus” was not well defined in the proposed rule and recommends that the EPA clarify in its general communications and in the preamble to the final rule that “significant nexus” is a legal term, not a scientific term.

I have posted often about the role of EPA’s scientific oversight committees in judicial review of EPA rules. It’s not obvious how that process will play out here, because, as the SAB itself noted, these are legal questions as much as they are scientific questions. However, while the SAB thinks that “significant nexus” is a legal term, I’m not sure that Justice Kennedy agrees. At the very least, he may consider it a mixed question of fact and law and I’d bet that he’d consider the SAB’s conclusion that the science supports the rule relevant in passing on the any final rule promulgated by EPA and ACOE.

More Than (You Thought) You Ever Wanted To Know About Waters Of The United States

Over the past few months, I worked with a number of colleagues from the American College of Environmental Lawyers to provide the Environmental Council of the States with a balanced review of the history and background of how the term “waters of the United States” rapanos-cartoonhas been defined and interpreted under the Clean Water Act. In announcing the release of the memorandum, Dick Pedersen, President of ECOS, thanked “those members of ACOEL who spent significant time and effort developing this comprehensive memorandum.”

To which I can only add, that’s for darn sure. There is a reason this stuff is so controversial. It’s really difficult to develop a comprehensive and neutral explanation of the sometimes inscrutable judicial opinions in this area. I was honored to work with a truly distinguished group of lawyers to develop the memorandum. It really is everything you ever wanted to know about WOTUS. Enjoy.

Some PURPA Qualifying Facilities are More Qualified Than Others

In a fascinating decision last week, a divided panel of the 5th Circuit Court of Appeals held that the Texas Public Utilities Commission had authority to limit the universe of “Qualifying Facilities” under the Public Utilities Regulatory Policies Act which can choose to enter into a “legally enforceable obligation” requiring a utilities to purchase power from a renewable energy producer. The decision could be a big problem for wind power facilities in jurisdictions less than fully hospitable to renewable energy.

FERC’s rules implementing PURPA provide in part that:

Each qualifying facility shall have the option either:

(1) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility’s avoided costs calculated at the time of delivery; or
(2) To provide energy or capacity pursuant to a legally enforceable obligation for the delivery of energy or capacity over a specified term.

The Texas PUC, however, issued a rule stating that only Qualifying Facilities which could provide “firm power” were entitled to enter into a “legally enforceable obligation.” The majority concluded that nothing in the FERC rules precluded Texas from promulgating its limiting regulation. The dissent, not surprisingly, noted that the regulation provides that “each qualifying facility” is eligible to enter into such obligations. As the dissent also noted, the use of the word “each” in a context such as this, generally means “every.”

It is important to note that the Texas PUC did not take the position that wind facilities per se cannot supply “firm power.” However, the reality is that an obligation to do so makes it much more difficult for wind facilities to utilize the “legally enforceable obligation” option that PURPA appears to provide qualifying facilities.

I don’t foresee en banc review here and Supreme Court review would be a reach, since the case turns so much on the specifics of the Texas PUC approach, but I think that the dissent’s plain language interpretation of the FERC rule might appeal to the Supremes if they were ever to have an opportunity to review it.

Be Careful With Pollution Insurance Coverage Disclosures – How Conditions Actually Disclosed Were Deemed Not Disclosed

A Massachusetts company learned the hard way that you need to pay close attention to policy endorsements when you negotiate them. In Market Forge Industries, Inc. v. Indian Harbor Insurance Company, the Appeals Court of Massachusetts held, in an unpublished decision, that a Pollution and Remediation Legal Liability Policy did not cover the costs of cleaning up certain pollution because the “Pollution Conditions” were not specifically listed in the “Known Conditions” endorsement. This despite the fact that the policy was intended to cover known pollution conditions and the policyholder had… More

EPA Proposes to Eliminate Affirmative Defenses for Excess Emissions During Startups, Shutdowns, or Malfunctions — Get Ready for Some Citizen Suits

This past April, the D.C. Circuit struck down the part of EPA’s cement kiln rule that would have provided an affirmative defense to civil penalties for excess emissions resulting from unavoidable malfunctions. As we noted at the time, that decision clearly had implications beyond the cement kiln rule.

Those implications were made more concrete this week when EPA issued a supplemental notice of proposed rulemaking in which it proposed to rescind its policy allowing affirmative defenses to penalties for excess emissions during startup, shutdown, or malfunction events. Moreover, EPA proposes to reject SSM affirmative defenses in existing SIPs.

EPA’s rationale is pretty straightforward:

The EPA acknowledges that its SSM Policy since the 1999 SSM Guidance has interpreted the CAA in such a way that states could in effect alter the jurisdiction of federal courts to assess monetary penalties under certain conditions through creation of affirmative defenses. In other words, even though Congress explicitly empowered federal courts to assess monetary penalties for a CAA violation, an affirmative defense could, contrary to the statute, limit the ability of a court to do so. The EPA believes that the court’s decision in NRDC v. EPA compels the Agency to reevaluate its interpretation of the CAA and its proposed action on the Petition concerning affirmative defense provisions in SIPs.

Although there has already been criticism that EPA went farther than NRDC v. EPA requires, and that EPA could have preserved some affirmative defenses, I don’t see EPA significantly changing this proposal when it goes final, and I’d certainly expect the new interpretation to survive judicial review.

EPA’s proposal states that, as a result of the new interpretation:

some sources may be required by the state to, or may have strong business reasons to, modify their physical equipment or operating practices. These changes could be aimed at improving the effectiveness of the emission control systems when operating as designed during startup and shutdown, increasing the durability of components to reduce the occurrence of malfunctions, and/or improving monitoring systems to detect and manage malfunctions promptly.

Ya think?

 

NPDES Permits Are Construed Narrowly Against the Permittee

In July, we noted that the Clean Water Act’s permit shield defense would be construed narrowly, applying only where a permittee had clearly disclosed that the relevant pollutant to the agency.  This week, in Alaska Community Action on Toxics v. Aurora Energy Services, the 9th Circuit Court of Appeals treated the stormwater general permit in a similar manner, rejecting the defendants’ arguments that periodic discharges of coal from their coal-loading facility SewardCoalFacilitywere authorized under the stormwater general permit.

To the Court, this was a straightforward, plain meaning interpretation of a regulation (general permits are considered rulemaking):

In Part 2.1.2.10, the General Permit states: “You must eliminate nonstormwater discharges not authorized by an NPDES permit. See Part 1.2.3 for a list of non-stormwater discharges authorized by this permit.” The referenced section (which is actually Part 1.1.3) lists eleven categories of non-stormwater discharge which are “the non-stormwater discharges authorized under this permit.” None of these categories cover defendants’ coal discharge.

The permittees pointed to sections of the general permit that were “superfluous” if the quoted section truly barred all stormwater discharges not listed in Part 1.1.3. However, while the Court recognized this superfluity, it concluded that “our analysis here is controlled by the plain text of Part 2.1.2.10, which prohibits defendants’ discharges.”

The Court also noted that a separate permit shield analysis yields the same result. Since the permit shield only applies where the permittee “complies with the permit’s express terms,” no shield is available.

As has always been the case, the permit shield is valuable, but narrow.

Economic Development Is Not an Unqualified Environmental Evil (In Case You Didn’t Know)

I do not want to suggest that most environmentalists are Luddites or that the environmental movement is opposed to economic development. Indeed, hardly a speech is made today that does not tout the economic benefits of environmental protection. Less focus is given, however, to the environmental benefits of economic development.

I therefore thought it worth noting that, according to a recent study published in Environmental Science and Technology, more than 40% of trash disposal world-wide is accomplished through open-air burning. open-air burningIt should be no surprise that the greatest emissions from open-air burning come from developing countries, including China, India, Brazil, Mexico, Pakistan, and Turkey. The flip side, of course, is that wealthier countries can afford the regulatory systems that prevent such open-air burning and consequent emissions.

‘Nuf said.

How Low Will They Go? A Lower Ozone NAAQS Begins to Have An Air of Inevitability

On Friday, EPA released its “Policy Assessment for the Review of the Ozone Ozone_Molecule_FormulaNational Ambient Air Quality Standards.” EPA staff concluded:

that it is appropriate in this review to consider a revised primary O3 standard level within the range of 70 ppb to 60 ppb. A standard set within this range would result in important improvements in public protection, compared to the current standard, and could reasonably be judged to provide an appropriate degree of public health protection.

As staff noted, the Clean Air Science Advisory Committee made the same recommendation. I therefore think it’s game over for the current standard. Whatever the politics surrounding the ozone NAAQS, I just don’t think that a decision by EPA to retain the current standard would survive judicial review.

The real question, then, is how low EPA will actually go. Both CASAC and staff hedged their bets by recommending a range of 70 ppb to 60 ppb. Basically, a standard of 70 ppb would appear to provide a “margin of safety” for all impacts other than “the lowest exposure concentration demonstrated to result in lung function decrements and pulmonary inflammation (i.e., 60 ppb).”

It’s worth noting that, if Gina McCarthy wants to use lung function decrements as the basis for the NAAQS, even 60 ppb may not be enough, because it provides no margin of safety. Thus, if I were forced to bet, I’d predict a new NAAQS at 70 ppb. I don’t think it will save EPA from criticism on the right, but it’s a reasonable balancing act.