Fishing, Fowling, Navigation and Wind Energy: SJC Approves Cape Wind Siting Process

The Cape Wind project cleared another important hurdle yesterday with a 4-2 ruling by the Massachusetts Supreme Judicial Court, holding that the state Energy Facilities Siting Board (EFSB) can authorize local construction permits for the project’s transmission lines. The decision in Alliance to Protect Nantucket Sound Inc. v. Energy Facilities Siting Board is particularly significant because it means that the renewable energy project has all of the state and local permits it needs to move forward.  

In late 2007, after the Cape Cod Commission denied its proposed Development of Regional Impact (DRI), Cape Wind applied to the EFSB for a “certificate of environmental impact and public interest” -- a composite of all of the individual state and local permits required for the construction of the 18.4 miles of transmission lines that will connect the wind farm to the regional power grid. This suit, brought by the Cape Cod Commission, the town of Barnstable, and the Alliance to Protect Nantucket Sound, challenged the EFSB’s May 2009 decision granting the certificate to Cape Wind. In short, the SJC held that the EFSB had the authority to grant the certificate and upheld the Board’s substantive findings, which balance the environmental impacts of the transmission lines with the need for the project. 

A key aspect of the decision is the SJC's rejection of the petitioners' arguments that the EFSB should have reviewed “in-State” impacts of the wind farm, which is permitted exclusively by Federal authorities, rather than focusing solely on the impacts of the transmission lines, which require state and local permits.  Essentially, if the project is built in federal waters, the EFSB can trust the feds to get it right, the majority said.

Chief Justice Marshall (joined by Justice Spina) dissented, issuing a stern warning:

The stakes are high.  As we have recently seen in the Gulf of Mexico, the failure to take into account in-State consequences of federally-authorized energy projects in federal waters can have catastrophic effects on state tidelands and coastal areas, and all who depend on them. 

The decision also includes a lively debate about the implications of the public trust doctrine and the Chapter 91 licensing scheme in this context.

Writing for the majority, Justice Botsford concluded that the statute which authorizes the EFSB to issue certificates of environmental impact and public interest provides

an express legislative directive to the siting board to stand in the shoes of any and all State and local agencies with permitting authority over a proposed "facility"-- that is, a directive to assume all the powers and obligations of such an agency with respect to the decision whether to grant the authorization that is within the agency's jurisdiction, with regulatory enforcement thereafter returned to that agency.

Again, Chief Justice Marshall disagreed.  Reflecting on the SJC’s recent decisions in Moot v. Department of Envtl. Protection, (2007) and Arno v. Commonwealth, (2010), she reasoned that even in this case -- which has to do with the administration rather than the relinquishment of public trust rights -- the Legislature must act expressly. Here, Justice Marshall concluded,

the siting board has purported to act as the protector of the public's long-standing rights under the public trust doctrine without the necessary express legislative authority to do so.

Of course, underlying this debate is the important policy question of which picture of Nantucket Sound is more protective of the public trust?  The state, and now the SJC, have chosen.

 

   

 

 

There Is a Statute of Limitations For Challenging Permits In Massachusetts (Or, We're Crazy Here, But Not That Crazy)

Those who operate industrial facilities or do development in Massachusetts often know far more than they would like about Chapter 214, § 7A, the environmental citizens’ suit provision of the Massachusetts General Laws. Chapter 214, § 7A, eliminates plaintiffs’ usual obligation to demonstrate standing and simply gives 10 citizens the right to sue to prevent or eliminate “damage to the environment.” The damage does have to constitute a violation of a statute, regulation, ordinance, or by-law, the major purpose of which is to prevent damage to the environment.

Chapter 214, § 7A, does not contain any statute of limitations. Does this mean that ten persons can sue any time, even if the conduct complained of is allowed under a permit and the permit was issued long ago, as long as the plaintiff alleges that the permit should not have been issued and the conduct in fact violates a statute or regulation? Thankfully, Judge Locke of the Superior Court recently answered that question, posed in EarthSource v. Burt, with an emphatic “No.”

Full disclosure time – this firm (including yours truly) represents Covanta, the private defendant, in EarthSource v. Burt.

Earthsource v. Burt deals with efforts by Covanta, which operates four municipal waste combustors in Massachusetts, to initiate a process at its SEMASS combustor in which it would take what are known as fats, oils, and grease (or FOGs) from restaurants, separate the FOGs from the associated wastewater, recycle the wastewater, and combust the FOGs at the SEMASS facility. EarthSource is a competitor of Covanta in the FOGs processing business. It and some citizens (many, if not all, of them affiliated with EarthSource or related entities) brought suit against MassDEP and Covanta, not just to stop the FOG project at SEMASS, but alleging wholesale violations by Covanta at all of its Massachusetts facilities. Routinely, the complaint alleged that DEP misinterpreted its own regulations, should not have issued the permits, and that the permits were void “ab initio.” 

Covanta and DEP both moved to dismiss those counts that involved claims related to permits issued outside the appeal period provided in either the applicable substantive statute or in the Massachusetts Administrative Procedure Act, ch. 30A, § 14. EarthSource argued that the APA does not limit the time in which suits can be brought under Chapter 214, § 7A. Judge Locke concluded otherwise, noting that:

a contrary rule would be disruptive to the permitting agencies and that G.L. c. 214, § 7A should not become a means to disturb otherwise settled permits whenever a group of plaintiffs chooses to file suit sometime in the future.

Truer words were never spoken. Going forward, the rule for persons who don’t like permits is going to be “speak now or forever hold your peace.”

DOE Gives A Good News Cycle for Natural Gas

The US Department of Energy (DOE) announced two items in the last week that, while not related, could both spell large changes in the US energy future and create huge boon to the natural gas industry, if they pan out.

The first is an announcement on Wednesday that the National Energy Technology Laboratory (NETL) has developed a method of freezing natural gas which could both lower the cost of transportation of natural gas and allow access to vast amounts of the world's gas resources. NETL has created a special nozzle technology that rapidly traps natural gas in ice to form methane hydrate -- a process that also occurs in nature, and has foiled some of BP's attempts to plug the Deepwater Horizon well permanently. The technology requires far less pressure and cooling than the creation of liquefied natural gas (LNG) or compressed natural gas (CNG), and, reportedly, forms hydrates in minutes, compared to the current batch process that can take hours or days. NETL researches believe the new process will significantly reduce production, transportation and storage costs associated with current LNG and CNG processes and, potentially allow recovery of natural gas from hydrate deposits in the deep ocean and arctic permafrost.  The announcement reports that these deposits are estimated to contain more organic carbon than the rest of the world's fossil fuel reservoirs combined.  Of course, the politics of pursuing those deposits are likely to be dicey, given that some would argue that carbon is better left in a frozen state, rather than released into the atmosphere.  The announcement does not indicate whether the technology has been tested at any sort of scale, nor a timetable for when it might be rolled out.  


The second is an announcement in the Federal Register August 20th, reported by ClimateWire today, that the DOE is considering revising its energy efficiency calculations to take into account how the electricity powering large appliances like household water heaters is produced. By using a full-fuel-cycle (FFC) approach, the DOE, working with the Federal Trade Commission, would include the point-of-use energy, plus the energy consumed in extracting, processing and transporting the fuels source, plus the energy losses associated with the generation, transmission and distribution of electricity. This information would then be provided to the public in enhanced Energy star labels. In 2005, the National Academy of Science recommended that DOE consider moving to use of an FFC approach for assessment of all energy and environmental impacts, especially levels of greenhouse gas emissions, and to provide the information learned to the public through labels and other means -- DOE says in its announcement that it is working to implement this recommendation.

As ClimateWire highlights, because about half of the country's electricity comes from coal-powered generation, natural gas proponents argue that a switch to FFC measurements will help them, by forcing consumers and utilities to look closer at the differences in fuel sources and efficiency of energy generation.  DOE is requesting comments on the models and programs used to make these proposed calculations, but if they are implemented, FFC may become the DOE's approach of choice in other areas, too.

 

Sierra Club Suit Alleging Failure To Obtain PSD Permits Dismissed as Untimely

On August 12, in Sierra Club v. Otter Tail Power Co., the Eighth Circuit Court of Appeals dismissed the Sierra Club’s suit related to the Big Stone Generating Station, a coal fired power plant in South Dakota. In doing so, it disagreed with EPA and sided with what appears to be the majority on a question that has produced differing responses amongst the courts - whether the Prevention of Significant Deterioration (“PSD”) program prohibits only the construction or modification of a facility without a PSD permit, or whether it imposes ongoing operational requirements. Finding that PSD requirements are conditions of construction or modification, and not conditions of operation, the court held that violations related to the defendants’ failure to obtain PSD permits occurred at the time the modifications were made, and that the claims were thus barred by the statute of limitations.

The Sierra Club challenged three modifications undertaken at the Station: a 1995 change in fuel source from lignite coal to sub-bituminous coal; a 1998 boiler modification; and, 2001 changes which allowed the Station to supply steam to a nearby ethanol plant. In June 2008, the Sierra Club filed a citizen suit alleging, among other things, that the defendants violated and continued to violate the Clean Air Act in that they had failed to obtain PSD permits prior to the modifications and, as a result, were operating without appropriate permits and without abiding by best available control technology (“BACT”) limits that would have been imposed had PSD permits been obtained.

The Eighth Circuit upheld the district court’s dismissal of the case, basing its decision largely on the language of the PSD statute, which prohibit a facility from being “constructed” without meeting PSD requirements, and the citizen suit provision, which authorizes suit “against any person who proposes to construct or constructs,” as well as the related regulations.  Finding the language unambiguous, the court refused to defer to the contrary interpretation of EPA, which participated as an amicus party. The court rejected the argument that the CAA and PSD regulations should be interpreted as establishing operational duties based on the program’s purpose and the fact that PSD permits impose requirements on the operation of facilities, finding that such requirements are not enforceable independent of the permitting process. In addition to finding the Sierra Club’s civil penalty claims barred, the court held that its claims for equitable relief seeking to bring the Station into compliance with the Act were also barred. 

Under the Eighth Circuit’s reasoning, while a facility must obtain a PSD permit prior to construction or modification, and, having done so, must operate in accordance with the permit, if the operator fails to apply for such a permit, claims relating to its failure to obtain or operate pursuant to an appropriate PSD permit are barred unless brought within five years of the construction or modification. Given the potential difficulties involved in detecting PSD violations, the decision places a burden on plaintiffs seeking enforcement of PSD requirements to identify and file claims related to such violations as early as possible. Given that this issue has come up a number of times and there is some disagreement amongst the courts as to the right answer, it is possible that the Sierra Club will seek further review of this issue.

 

What's Next for Carbon Capture and Storage?

In February, President Obama tasked the Interagency Task Force on Carbon Capture and Storage with the ambitious goal of overcoming the barriers to widespread, cost-effective deployment of carbon capture and storage (CCS) within the next 10 years.  As the first bold step, the 14-agency and executive department group released its findings in a report on August 12. 

The report concludes that widespread cost-effective deployment of CCS will only occur if the technology is commercially available (i.e. scale-able and cost-effective) and a supportive national policy framework is in place to both fund and regulate it.  The task force believes that,  in the long run, there are no insurmountable technological, legal, institutional or regulatory barriers that will prevent CCS from playing a role in reducing greenhouse gas emissions.  But that does not mean the early years will be easy.  

CCS is a three-step process that includes the capture and compression of CO2 from power plants and industrial sources (usually coal-fired, since their carbon emissions are the most plentiful); transport of the captured CO2 , usually in pipelines; and storage of that CO2 in geologic formations, such as oil and gas reservoirs and unmineable coal seams.   The report points out that technologies for all three components of CCS already exist, and there are four existing commercial CCS facilities in other parts of the world.

The US government has bought in to CCS in a big way, committing $3.4 billion in stimulus funds,  including $1 billion for FutureGen, and just this week, DOE announced 15 projects receiving $21.3 million over the next three years.  

So what is stopping the technology?  The key barrier identified by the task force is the lack of comprehensive climate change legislation.  Without a price on carbon (and a relatively high one, at that), there is no stable framework for investment in the technology.  Even with significant federal funds pouring in, projects of this scale still need private investment.  But legal and regulatory uncertainty, unsurprisingly, make funding the projects a shaky prospect. 

The report concludes that early CCS projects -- like the 5 to 10 DOE-supported CCS demonstration projects slated to begin operations by 2016 -- can proceed under existing laws, but that the experience gained from those initial projects must be incorporated into a new regulatory framework before we embark on more widespread deployment.  

The report lays out a plan for a federal agency roundtable, championed by DOE and EPA, to oversee and continually review the adequacy of technology, incentives, and safety during this initial period.  The plan includes a lot of work for EPA, such as formulating new regulations under the Safe Drinking Water Act and Resource Conservation and Recovery Act that deal with the novel problems posed by storing commercial-scale amounts of pressurized carbon. 

Of course, one of those problems is that the stored gas might escape.  The Task Force also made recommendations on procedures for long-term liability and stewardship, including creation of an industry-financed trust fund to support long-term stewardship activities and compensate parties for damages after site closure.  The report cautions against having open-ended federal indemnification to address the long-term liabilities.

From Tailoring To "FIPping" - More GHG Action From The EPA

With the abandonment of federal climate change legislation by the Senate last month, EPA’s efforts to regulate greenhouse gases (GHGs) under the Clean Air Act (CAA) have taken on even greater importance for the estimated 15,500 emission sources nationwide expected to be affected by the new rules.  Yesterday, the U.S. EPA announced a pair of proposed rules to help ensure the implementation of permitting requirements for GHGs, set to take effect in January 2011.  In May, EPA issued the Tailoring Rule, which “tailored” the CAA threshold for GHGs to ensure that only large emitters would be subject to PSD and Title V permitting requirements.

The current set of proposed rules complements the Tailoring Rule by addressing the nuts and bolts of state permitting programs.  Like many other environmental statutes, the CAA operates based on a “cooperative federalism” model ¾ if a state does not establish a permitting program that meets federal standards, the U.S. EPA becomes the permitting authority.  In this case, states must modify their State Implementation Plans (SIPs) to incorporate the new GHG requirements. 

·                     The first proposed rule identifies SIPs that do not currently apply PSD requirements to GHG emitting sources and requires them to be modified.  EPA’s “SIP call” is initially addressed to the following 13 states (but the agency has requested that all states review their PSD permitting authority): Alaska, parts of Arizona, Arkansas, parts of California, Connecticut, Florida, Idaho, Kansas, parts of Kentucky, parts of Nebraska, parts of Nevada, Oregon and Texas.  Massachusetts, along with several other states, is not directly affected by the SIP call because EPA is the PSD permitting authority.

·                     In the second rule, EPA is proposing a Federal Implementation Plan (FIP) that will apply in any state that cannot (or does not) revise its SIP by the New Year.  Nevertheless, EPA seems reticent to use the FIP, explaining that “States are best-suited to issue permits to sources of GHG emissions. They have longstanding experience working together with industrial facilities under their jurisdiction to process PSD permit applications.”

·                     The proposed rules, which are expected be finalized by the end of 2010, are summarized in greater detail here.

Just as the Tailoring Rule has been challenged by industry and environmental groups alike, it looks like there may be challenges of one kind or another to the new proposed rules.  A least one state that looks poised to get “FIPped” is Texas, which recently told EPA it would not implement GHG permitting requirements and filed suit to block the Tailoring Rule on August 2.  So much for “cooperative” federalism.

 

New Developments In The Underground

What do a coal-fired power plant in Meredosia, Illinois and a National Park in Ecuador’s Amazonian jungle have in common?  Carbon sequestration — albeit of two very different kinds.  Last week, while the U.S. government made a major funding commitment to a project aimed at capturing carbon dioxide emissions from the stack of a coal fired power plant in the Midwest, the government of Ecuador took steps towards preventing the extraction and combustion of fossil fuels in the first place by signing an agreement that would keep a significant chunk of its oil reserves locked underground.

The U.S. Department of Energy announced on August 5 that it will support the redesign the FutureGen project, a public-private partnership formed to construct and operate a low-emission coal-fired power plant in southern Illinois.  Rather than building a new facility, the $1 billion in American Recovery and Reinvestment Act funding will go towards updating an existing 200-megawatt unit at Ameren Energy Resources Company’s Meredosia facility.  The retrofit will use a new technology called oxy-combustion, which generates a “purified” stream of carbon dioxide emissions that are easier to capture than the diluted carbon dioxide stream that results from burning coal with air.  The project will capture 90 percent of the unit’s CO2 emissions and funnel them via a new carbon dioxide pipeline network to a regional carbon storage site in Mattoon Illinois, about 140 miles east of the power plant. 

Meanwhile, the government of Ecuador signed an agreement with the United Nations Development Program on August 3 establishing a framework for a trust fund to protect Yasuní National Park from oil development. As reported by BNA, the Park is home to 20% of Ecuador’s oil reserves, worth about $55 billion at current prices.  Yasuní is also one of the most biologically diverse place on Earth and home to several indigenous groups.  What is this commitment worth?  The Ecuadorian government has set the price tag at $3.6 billion, and plans to appeal to donor governments for contributions to the trust fund.  Ecuador should be encouraged by donor nations’ past investments in debt-for-nature swaps and the $3.5 billion pledge by the governments of Norway, Japan, the U.S., the U.K., France and Australia for Reducing Emissions from Deforestation and Degradation (REDD) at last year’s Copenhagen climate conference.  On the other hand, the concept of paying to stop oil development (rather than deforestation) is new, and donors may question the timeframe for the commitment, especially since postponing the development of the resource might only increase its value and thus the risk of exploitation.  

 

 

Clearly, there is much more at stake with both of these projects than the number of tons of CO2 they will rescue from the atmosphere, but it’s interesting to compare the numbers nevertheless.  Ecuador is asking for $3.6 billion to prevent 436 million metric tons in CO2 emissions whereas the U.S. government is spending $1 billion (not to mention the private investment) towards an entire network of projects that, once built, is expected to prevent 1 million tons of CO2 per year from release to the atmosphere.  Assuming these numbers are correct, they suggest that not combusting fossil fuels is a more cost-effective way of limiting CO2 emissions than recovery of CO2 after combustion.

Sometimes Guidance Is Better Than Regulation: Massachusetts Issues "Safe Development" Guidance For Engineered Nanoparticles

The BNA reported today that the Massachusetts Office of Technical Assistance and Technology has developed a guidance document identifying considerations for the safe development of engineered nanoparticles, or ENPs. As many of my readers know, I am deeply suspicious of regulatory agency guidance documents. Guidance is often used as a short-cut so that the agency can avoid notice and comment rule-making. Moreover, it’s generally one-sided; agencies refuse to be bound by guidance, because “it’s only guidance,” but street level bureaucrats effectively treat the guidance as regulations, so that the regulated community is effectively deprived of the flexibility that guidance is supposed to provide.

I’m pleased to say, however, that the OTA guidance appears to be a thoughtful, measured approach to safe handling of ENPs. My view is apparently corroborated by the NanoBusiness Alliance, which, according to the BNA, supports the guidance.

In this case, the guidance clearly is not a trick to avoid notice and comment rule-making. It will be issued by the OTA, which has no regulatory authority. Instead, the guidance appears to advance two goals. First, offers a simple compendium of generally reasonable steps to take to minimize the risks associated with the manufacture, handling, use, and disposal of ENPs. Second, it is intended to be a confidence builder. As the OTA notes, “increasing confidence and trust can enhance commercial prospects” for ENPs.

I certainly expect some kind of robust regulatory regime focused on ENPs down the road. However, it’s important, in this nascent state of the technology, that advocates of the precautionary principle not be in a position impose regulations that could stifle the development of a set of technologies that have so much promise in so many fields – including environmental protection. In this context, guidance such as that set forth by the OTA seems an appropriate effort at facilitating appropriate management practices without unduly burdening nanotechnology business.

EPA's NSR Enforcement Initiative Marches On

EPA shows no signs of slowing down in its efforts to use the Clean Air Act’s PSD/NSR provisions as an enforcement club. The latest target in EPA’s crosshairs is the Detroit Edison Monroe Power Plant. Late last month, DOJ filed a complaint alleging violations of PSD/NSR requirements in connection with a project to replace the high temperature reheater and the economizer at Monroe Unit 2. Aside from the broad sign that EPA remains committed to these cases, the most recent action is notable for at least two reasons:

The suit names both Detroit Edison, which owns the plant, and DTE Energy, Detroit Edison’s parent. The complaint alleges that DTE Energy “employees make decisions involving construction and environmental matters at the plant” and that it “must approve major capital expenditures at” Monroe. Naming the parent is consistent with actions EPA has taken with respect to some of this firm’s clients; Parent companies would be wise to pay attention to this trend.

The project that is the subject of the complaint took place this year; we’re not talking about EPA reaching back to projects completed in the 1980s or 1990s. The complaint alleges that DTE provided one day’s notice before commencing the project. I’m not involved in the case, so I don’t know the details, but it’s hard to imagine that there isn’t some relevant background here. Either Detroit Edison and DTE, relying on some of the more favorable PSD/NSR decisions, decided just to pay their money and take their chances, or someone at EPA or the State of Michigan led the plant astray. Time will tell.

There has been no doubt for some time that EPA is going to continue to seek reductions in conventional pollutant emissions through these types of enforcement actions. This action is also a good reminder, however, of the type of action we have to look forward to, assuming that the Tailoring Rule is upheld. If there is no Congressional action, the PSD/NSR program is going to be EPA’s only leverage to get GHG reductions.

I can’t wait.

Massachusetts Legislature End of Session Scorecard: One Good, One Bad

As the Massachusetts legislative session wound down, there was the usual last-minute scramble – heightened, this time, by the Legislature’s focus on casino gambling. Notwithstanding the preoccupation with gambling, the Legislature did manage to enact the Permit Extension Act, which developers have been pushing for some time. Briefly, permits in effect at any time between August 15, 2008 and August 15, 2010, will be extended for two years. To read more, check out our client alert.

The Legislature was not able to get wind siting legislation enacted. The House passed the bill at midnight on the last day, but it died in the Senate. Presumably, those legislators who will defend home rule with their dying breath think that the 8 years Cape Wind has spent in permitting (yes, I know that Cape Wind would not have been affected by the wind siting legislation) and the 7 years that the Hoosac wind project has spent in permitting demonstrate that our permitting system works well and needs no improvement.

The SJC Really Means It: Only the Legislature Can Give Up the Public's Ownership Interest in Tidelands

As many of you know, the Commonwealth's tidelands licensing statute, Chapter 91, is one of my favorites, for no other reason than that it gives me the opportunity to talk about where the "waters ebbeth and floweth."  Deriving from the Colonial Ordinances of 1641 and 1647, Chapter 91 is about as arcane as it gets – which, of course, lawyers are supposed to like. 

The short version is that the Commonwealth holds the fee interest in “Commonwealth Tidelands” – those below the low water line. While the Commonwealth can license private use of Commonwealth Tidelands, only the legislature, acting explicitly, can give up those rights. Private Tidelands, the land between high and low water, are owned by the upland owner, but are subject to public rights in “fishing, fowling, and navigation” – another reason why I love Chapter 91.

In a decision handed down today, the Massachusetts SJC made crystal-clear that nothing short of an explicit legislative act is sufficient to eliminate the public’s ownership rights in tidelands. In Arno v. Commonwealth, the “owner” of land in Nantucket that was filled in the 19th Century sued the Commonwealth, essentially seeking a declaration that he was the fee owner of the land. His argument was that a prior owner had registered the land in 1922, and the Attorney General, in commenting at the time, did not object to registration or assert that the Commonwealth still owned the land. To the SJC, what the AG did – or intended to do – in 1922 was irrelevant. 

Neither the Land Court nor the Attorney General had the authority to divest the public of its rights in Arno’s parcel…. Only an act of or an express delegation by the Legislature could extinguish the public’s rights.

The decision is probably not a surprise following the SJC’s original Moot decision, but is nonetheless a lesson to those who would claim ownership in tidelands. If the waters ebbeth and floweth – or if they ever did – only the legislature can give them away.

Inching Closer to Cooling Water Intake Structure Regulation of Existing Facilities

Late July saw some movement on the cooling water intake structure (CWIS) front. 

On Friday, July 23, in ConocoPhillips, et al. v. EPA, the Fifth Circuit granted EPA’s motion for a voluntary remand of the existing-facilities portion of its Phase III regulation. The Phase III rule, promulgated in 2006, addressed CWIS at existing small power plants and other facilities in certain industries, including the pulp and paper, chemical, primary metals and petroleum and coal products industries, as well as new oil and gas extraction facilities. The Phase III rule did not set a “best technology available” (BTA) standard for existing facilities, and instead continued the current practice of “best professional judgment,” case-by-case determinations of BTA. Not surprisingly, the rule was challenged by a number of entities.

 

Last year, following the Supreme Court’s decision in Entergy Corp. v. Riverkeeper, the agency had requested that the portion of the regulation dealing with existing facilities be remanded so that the agency could reevaluate it in conjunction with its proceedings on remand of the 2004 Phase II rule, which addressed CWIS at large, existing, power plants. In Entergy the Supreme Court held that EPA could, but was not required, to employ cost-benefit analysis when determining the BTA and has discretion to consider to what degree costs and benefits should be weighed in making such a determination. The Fifth Circuit’s recent ruling now clears the way for EPA to combine Phase II and Phase III into a single rulemaking covering all existing CWIS facilities. (At the same time that it remanded the Phase III rule as it relates to existing facilities, the court deferred to the agency and upheld the rule as it applies to new offshore oil and gas facilities).

 

This decision dovetails with the agency’s announcement two days earlier that it would be sending to the OMB for approval a proposed survey that would help the agency determine the benefits of the proposed regulatory options for CWIS. Data collected during the survey, which will be of approximately 2000 households, will be used to calculate willingness to pay for the reduction of fish losses at CWIS. Comments on the proposal must be submitted by September 20, 2010.   

 

So, it looks like some progress is being made towards a determination of what constitutes BTA for CWIS at existing facilities, but how long it will take for it to be made is unclear. Obviously, it seems that the agency’s previously announced intentions, as reported in the BNA Daily Environment Report, to issue a proposed rule in the middle of this year were a bit optimistic.