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

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

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

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

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

• Requests would be treated as informational filings.

• Intervention would not be allowed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Perhaps the GOP candidates have it right.

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

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

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

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

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

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

and that

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

and that there

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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