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

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

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

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

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

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

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

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

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

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

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

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

My take? 

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

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

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

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

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

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

·         Greater flexibility in facility-wide averaging.

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

My predictions on the rule’s fate and impact?

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

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

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

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

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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

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

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Market-watchers thinking that having friends in Congress means that coal can flourish despite EPA regulation on many fronts may have a different view to ponder. Goldman Sachs predicted last week that generators will continue to switch from coal to natural gas and downgraded the prospects of the coal industry from “attractive” to “neutral.” Specifically, Goldman predicted that 51 GW of coal electric generating capacity are on their way out and that EPA Cross State Air Pollution Rule, or CSAPR, and utility MACT rule would together eliminate 160 million tons of coal production through 2018. Political winds may shift direction periodically, but cold-blooded economic analysis says that the outlook for coal is not great in the long run.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Developers have cheered in recent years as the Supreme Court has tightened its standing rules. In a decision issued on Friday in National Association of Home Builders v. EPA, the Court of Appeals for the District of Columbia may have hoist the developers on their own petard. 

After EPA and the Army Corps of Engineers issued a determination that two reaches of the Santa Cruz River constitute “traditional navigable waters” under the Clean Water Act, the National Association of Home Builders sued. The complaint appears to have attached declarations referring to individuals who own property along tributaries of the two reaches, and who asserted that they are have applied for permits under the CWA. None of this was enough for the Court, which made four important points:

·         The NAHB itself did not have organizational standing. The Court made clear that an organization does not have standing unless it has credibly asserted that the challenged action “’perceptibly impaired’ a non-abstract interest.”

·         NAHB’s effort to assert representational standing for its members generally failed, because it contained no assertions linking this site-specific TNW determination to any broader impacts that would affect developers away from the Santa Cruz River.

·         NAHB’s effort to assert standing on behalf of owners in the vicinity of the Santa Cruz River failed because none of the declarations filed with the complaint alleged any harm specifically tied to the issuance of the TNW determination.

·         NAHB did not have “procedural standing” to challenge the agencies’ failure to provide notice and an opportunity to comment before issuing the TNW determination. Quoting from the Supreme Court decision in Summers v. Earth Island Institute, the Appeals Court stated that “deprivation of a procedural right without some concrete interest that is affected by the deprivation – a procedural right in vacuo – is insufficient to create Article III standing.” As the Court further noted, allegations of procedural violations may be relevant in assessing the redressability issue, but they cannot loosen the requirement that plaintiffs demonstrate that they have suffered a substantive injury traceable to the procedural violation.

The NABH decision appears plainly correct in light of Supreme Court standing jurisprudence. Moreover, it does not substantially narrow access to the courts. In fact, I think it provides a useful roadmap regarding the types of declarations that will be required to establish standing for developers. What it does make clear is that the courts are not simply discouraging environmental plaintiffs in their standing jurisprudence. Instead, the courts are discouraging each side equally – or at least requiring the same demonstrations from developers as well as environmentalists.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On Friday, EPA proposed certain revisions to its rule on air emissions from boilers and commercial and industrial solid waste incinerators (CISWI). As with other major rules under development in the past few years, EPA has taken fairly substantial steps to limit the reach of the rule to those boilers and CISWI that are of greatest concern. Without engaging in formal cost-effectiveness analysis, EPA has sought to make the rule as cost-effective as possible.

As with most of EPA’s big rules, it is too complex to be summarized in a blog post. EPA’s summary fact sheet is here. Very briefly, the rule exempts 86% of industrial boilers and subjects most other boilers to work practice standards rather than emission limits. For those boilers subject to the emission limits, the new rules relaxed limits for CO, PM, and most metals, but increased the stringency for mercury and acid gases.

EPA also made one important change sought by the biomass industry. The rule will allow biomass to be combusted in boilers and CISWI, by defining it as “non-hazardous secondary material,” which can now “be considered a legitimate, non-waste fuel.”

As I have noted with other EPA rules, I expect that this rule will survive judicial challenge. Although no cost-effectiveness analysis was provided, EPA estimates that the benefits of the rules exceed the costs by a factor of more than 10. More to the point, as with other rules, much of what EPA has done is dictated by the CAA.

The real question is whether anyone will appreciate EPA’s efforts to – if I may use the term – tailor the rule as finely as possible. As Greenwire noted, there remain efforts in Congress to pass legislation both delaying and softening the rules. My sense is that we should at least give EPA credit for drafting better rules, because the agency is certainly not getting any political credit. The environmentalists criticize EPA for not having enough gumption, while EPA’s critics still call EPA “the scariest agency in federal government.” 

On this score, I’ll just note one final perspective. In today’s New York Times, David Brooks described Obama – or least Cass Sunstein, director the Office of Information and Regulatory Affairs – as a “wonky liberal.” What was the context for this comment? A discussion of the administration’s handling of costly environmental regulations. Brooks conceded that “most people in government are trying to find a balance between difficult trade-offs.” The problem for the administration is that neither the right nor the left today wants balance.

I enjoy criticizing EPA, but I would want to be trying to juggle the issues that EPA is currently statutorily mandated to address.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the North American Electric Reliability Corporation, or NERC, released its 2011 Long-Term Reliability Assessment. The NERC report identified environmental regulations as one “of the greatest risks” to reliability. Much of the focus of the concern was on EPA’s MACT rule for hazardous air pollutants and its 316(b) rule for cooling water intake structures. While expressing uncertainty about these not-yet finalized rules, the NERC report took an extremely cautious approach, largely assuming the worst in terms of the stringency and inflexibility of these rules.

Appropriate caution? Not according to EPA.

In a letter to NERC, EPA Deputy Administrator Bob Persciasepe accused NERC of simply ignoring what EPA has said regarding the provisions of those rules and how they will be implemented. For example, with respect to the 316(b) rule, NERC assumes that the rule will require closed cycle cooling, even though EPA has explicitly said it will not require closed cycle cooling on all units and the rule will allow the cost of controls and potential impacts on reliability to be considered in determining appropriate technology. 

As Persciasepe summarized:

NERC’s draft report describes an extreme outcome that arises from a scenario where the most stringent and costly rules imaginable took effect, and no one at the federal, state, or local level took any steps to ensure the continued reliability of the grid.

Fortunately, the EPA’s analysis and several external analyses show that, where the EPA’s actual rules are accurately characterized, there is no adverse impact on capacity reserves in any region of the country. If isolated, local reliability challenges were to emerge due to individual plant retirements, the Clean Air Act and Clean Water Act provide flexibility mechanisms to ensure that sources can be brought into compliance over time while maintaining reliability.

In my most recent post on this subject, I noted that a comprehensive look at the reliability issue by FERC would be helpful. While I understand NERC’s approach to err on the side of caution, I agree with EPA that NERC overdid it here. Most of the old plants at risk of retirement are not going to have to install closed cycle cooling. I wouldn’t quite describe the NERC report as Chicken Little, but I don’t think the sky is falling. I’m still waiting for a more balanced and comprehensive review – and still skeptical that such a report would attain universal credibility, even if were to deserve it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There has already been significant attention devoted to whether EPA’s “train wreck” of rules affecting coal-fired power plants would affect electric system reliability. The Congressional Research Service analysis looked at the coming rules more broadly, but did touch on reliability, noting that most of the coal plants likely to be retired as a result of EPA regulations are small and inefficient, and already run infrequently. As we noted last June, the Bipartisan Research Center did focus on reliability, concluding “that scenarios in which electric system reliability is broadly affected are unlikely to occur.”

However, this work has not been enough to satisfy FERC Commissioner Philip Moeller, who recently issued a “Request for Evidence” concerning the impact of EPA’s coming rules. The request is both deep and wide-ranging. It includes 22 separate questions, not including sub-parts. The questions range from the broad -- “What evidence supports the assertion of a reliability problem?” -- to the very specific  -- "Will the loss of the system inertia that is supplied by coal plants impact the power grid in unforeseen ways? Does the topic of inertia require further study?”

In today’s polarized political climate, I’m not sure that there can be an answer to these questions that would satisfy everyone. At least inside the Beltway, decision-makers increasingly seem to know what they know, evidence be damned. Nonetheless, it can only help to have a more comprehensive analysis of the reliability issue by the government agency that has responsibility for ensuring electric system reliability.  A careful assessment by FERC seems even more necessary in light of Wednesday's story in the Daily Environment Report to the effect that EPA's draft MACT rule contained an acknowledgement of reliability concerns when it was sent to the White House for review in February, but that the reliability discussion was edited out before EPA signed and issued the proposed rule in March.

For my part, assuming that the reliability issue can be addressed, I’d rather have the train wreck than Chinese water torture. Precisely because small coal plants might shut as a result of the cumulative weight of the EPA regulations, isn’t it better for everyone that the owners of those plants know about all of the regulations at the same time, rather than have them promulgated seriatim over a number of years? Wouldn’t the owners feel foolish -- and justifiably annoyed -- having spent a bunch of money complying with the first rule to be promulgated, only to decide that the second, or third, or fourth is the straw that breaks the camel’s back? As a matter of both public and private sector planning, it has to be better for EPA to be promulgating these rules in at least the same general time frame.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

With the first compliance period in the Regional Greenhouse Gas Initiative (RGGI) coming to a close in December, it seems an appropriate time to look back at what we can learn from the country’s first market-based program aimed at reducing emissions of carbon dioxide from power plants. A report released Tuesday by the Analysis Group analyzed the economic impacts of RGGI – how the program impacted electricity prices, power producers’ costs, and consumers’ electric bills, and what effect the millions in quarterly auction proceeds has had, and will have, on the region’s economy.

The report does not try to predict what will happen or should happen to RGGI to update it for 2012 and beyond. Instead, it takes the last three years as a snapshot, and models the impacts that the allowances sold and money spent by the states through the last 3 years will have over the next 10 years.

Overall, the 10 states took in $912 million from the auctions, which, when invested by the states in various programs and initiatives, added $1.6 billion in net present value to the region's economy, even when taking into account the nearly $1.6 billion loss in income that power producers face with more efficient energy usage reducing prices and consumption. The report also found that the first three years of RGGI have created over 16,000 new “job years” – from employing people to conduct energy efficiency audits or install efficiency measures,  to maintaining workers in state-funded programs that might have been cut had a state not used RGGI funds to close budget gaps.

The study found that, although the cost of the allowances was largely passed along to consumers, RGGI only increased consumers’ bills by an average of 0.7% over the last 3 years. The study predicts that, over time, RGGI will lower consumers’ bills, because the states invested a substantial amount of the allowance proceeds on energy efficiency programs.  By 2021, consumers of electricity in the 10-state region will enjoy a net savings of nearly $1.1 billion on their electricity bills, and, due to efficiency programs focused on insulation and heating efficiency, another $174 million in savings from avoided expense on natural gas and heating oil. 

The analysis I found the most interesting concerns how state decisions to spend RGGI proceeds affected local economies. The Memorandum of Understanding that set up RGGI required that the states invest at least 25% of the proceeds for “public benefit,” but left the rest up to each state. As a result, there was a divergent approach to spending that, according to today's report, resulted in significant differences in returns.

New England states spent 86% of their RGGI funds on energy efficiency, and only 3% on direct  assistance to low-income consumers. Because the investment in energy efficiency introduced funds into the economy twice – both when the state paid into the efficiency program, and when consumers paid less for electricity, leaving them free to spend elsewhere in the economy – the overall macroeconomic impact of RGGI in New England was almost $900 million, even though those states only took in $275 million in allowance funds.

In comparison, the states in the PJM regional transmission organization (New Jersey, Delaware and Maryland), spent 41% of their funds on direct bill assistance and only 13% on energy efficiency.  The direct bill assistance also freed consumers to spend money elsewhere in the economy, but the analysis found that, without the multiplier effect of energy efficiency, the returns for these states were not as great.   As a result, although these three states received more money from allowance sales than New England -- $310 million – the net positive impact of RGGI was only $341 million.

It’s not much of a surprise that the investment of auction proceeds in energy efficiency is one of the big success stories of the first three years of RGGI. Nonetheless, it will be interesting to see whether the report’s conclusions regarding the relative impact of spending on energy efficiency as compared to low-income assistance will influence how states spend their auction proceeds going forward. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this week, Greenwire noted a Los Angeles Times story reporting that businesses are using the California Environmental Quality Act – California’s version of NEPA – as a tool of economic competition, trying to kill or delay projects for economic reasons. Much like Claude Rains, I am shocked, shocked, to find that there is strategic litigation going on here. In the past two years, I have defended multiple court cases and administrative hearings brought by a 10-citizens group against one particular client. Many of those claims have been premised on our state MEPA statute. Who are the members of the citizens’ group? A competitor of our client, and a variety of employees of the competitor and relatives of the competitor’s principal.

As suggested by the headline, none of this is really news to practitioners, who have to live with this stuff all the time. What really caught my eye in the Times story was this quote from a defender of the status quo:

Environmental advocates say the focus on why groups use CEQA is misplaced. "You shouldn't really be looking at motivations of petitioners," said Doug Carstens, an environmental lawyer in Santa Monica who often files CEQA complaints. "Even if it's a solely economically motivated actor, if they're promoting transparency, good government, why not?"

Why not? Why not? Because transaction costs matter. Because they are a dead weight on the economy. Because they distract agency personnel from focusing on more important and pressing environmental issues. Because they really can kill valuable developments. Perhaps Mr. Carstens is an outlier, but I fear that he in fact remains all too typical in an environmental movement that remains, at its core, very skeptical of, if not downright opposed to, economic development.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It is, as the lawyers say, black letter law that the National Environmental Policy Act, or NEPA, is a procedural statute, which provides no substantive protection to the environment. It merely requires the appropriate level of assessment of the potential environmental consequences of federal action. Whether the action should be taken is outside NEPA’s purview.

Rarely, however, has this critical limitation on NEPA’s scope been stated so plainly as in yesterday’s decision in Save Strawberry Canyon v. U.S. Department of Energy, in which Judge Alsop of the Northern District of California rejected a NEPA-based challenge to a DOE-funded laboratory at the University of California. As Judge Alsop wrote:

We must always remember that NEPA is a procedural – not a substantive – statute. Once the agency takes a hard look at the environmental consequences of the proposed action, the agency is free to destroy the environment. (My emphasis.) NEPA does not require, in making the substantive decision, that any extra weight be given to environmental preservation, sad as that sometimes is.

As an empirical matter, I’m skeptical that judges’ views on the merits of projects don’t infect their thinking regarding whether NEPA procedural requirements have been met, but the decision is nonetheless a salutary reminder of both NEPA’s purpose and its limits.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Two seemingly unrelated stories from last week suggest that EPA may have its limits in how far it is going to go to make nice with those who are opposing its regulatory agenda. The first story, reported by Greenwire, is pretty much all in the headline: “EPA official accuses Kan. department of lying over proposed plant.” The second story, also from GreenWire, reported that EPA Administrator Lisa Jackson referred to opponents of EPA’s greenhouse gas tailoring rule as “jack-booted thugs.”  She has also described Republican efforts to limit EPA regulatory authority as a “too dirty to fail” policy.

It’s difficult to interpret at least Administrator Jackson’s remarks as anything other than part of the 2012 Presidential campaign. I realize that I may be hopelessly optimistic in asking that even campaign rhetoric make sense, but these comments don’t make sense. How is it that opponents of the tailoring rule – and I actually support the rule, though I’m not sure about EPA’s authority to promulgate it – are “jack-booted thugs”? They may have misrepresented the scope of the rule, but that hardly makes them thugs, let alone jack-booted ones.

And too dirty to fail? I don’t even know where to begin. Let’s start and end with the simple point that it is not precisely because these plants are dirty that we refuse to regulate them – which is the only way the analogy to “too big to fail” could possibly make sense. This is nothing more than trying to make polluters look bad by comparing them to banks. I do feel compelled to observe that we are in a funny place when banks have a worse reputation than polluters and we have to stir up populist anger at the polluters by comparing them to the big, bad, banks.

In any case, calling your opponents liars and thugs, and describing their political strategy as supporting polluters because they are "too dirty to fail” is not going to engender a spirit of compromise. I understand EPA’s frustration with its congressional opponents. Again, I must emphasize that I support not just the tailoring rule, but may of EPA’s regulatory initiatives. I also note that EPA has taken steps – rarely noted or appreciated – to respond to the concerns of opponents. Nonetheless, aside from providing red meat to the base, this is hardly constructive. After all, it’s not as though anyone expects the Democrats to win such overwhelming majorities in the House and Senate that Lisa Jackson won’t have to deal with congressional Republicans after January 2013. Good luck with those jack-booted thugs.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the Daily Environment Report noted the formation of the Coalition for Better Buildings, or C4BB, an alliance of environmental, business, and real estate interests intended to increase the incentives to make buildings more energy-efficient. Its members include real estate trade groups such as the Real Estate Roundtable and the Building Owners and Managers Association, as well as some heavyweight companies, such as Vornado. It also includes environmental groups such as the NRDC and companies who will look to profit from investments in building efficiency, such as Siemens and Johnson Controls.  

The C4BB’s mission is to:

• Propose policy solutions from commercial and multi-family building stakeholders to foster greater energy efficiency in the structures we own, manage, finance and service.
• Save businesses billions of dollars every year by reducing the energy used in commercial and multi-family buildings.
• Create jobs through building efficiency retrofit projects that will put the construction, manufacturing, and service sectors back to work.  

All of this is good stuff and I am always encouraged when environmental and business groups succeed in finding common ground. One obvious intersection is support for tax incentives for building efficiency. Certainly such programs are going to have a greater likelihood of success with this kind of organized support. However, given the gaping hole in federal and state budgets, it will be difficult to enact new tax programs that provide sufficient incentives to make a difference.

The C4BB web page also notes that it supports “improving benchmarking tools including the expansion and enhancement of Energy Star.” This starts to get on to much shakier territory. One form of benchmarking could conceivably be use of building rating systems, which would push buildings towards energy efficiency by giving grades to buildings, with lesser buildings getting the proverbial scarlet “I” for “Inefficient.” As I noted in a post in August, the Institute for Market Transformation – which is a member of the C4BB – has put out a study on the state of building rating systems.

While the environmental groups and the energy efficiency companies may like building rating systems, owners of old buildings may not like them so well. It will be interesting to see whether the Real Estate Roundtable will support or oppose building rating systems. It is important to remember that much of the action in this area is at the state or local level. In states such as California and Massachusetts, rating systems may look better than mandatory efficiency targets. 

In any case, since buildings make up more than a third of energy use, and since some states still are pursuing hard targets for energy usage reductions, the issue of how to increase the energy efficiency of buildings is not going to go away.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, EPA announced that it was granting the petition submitted by New Jersey under § 126 of the Clean Air Act, requiring the Portland Generating Station in Upper Mount Bethel Township, Pennsylvania, to reduce emissions of SO₂, in order to avoid causing exceedances of the NAAQS for SO₂ downwind in New Jersey. The requirements are fairly straightforward. Within three years, the plant must limit emissions as follows:

Unit 1 emissions may not exceed 1,105 lb/hr

Unit 2 emissions may not exceed 1,691 lb/hr.

The facility must attain a heat input limit of 0.67 lb/mmBtu, regardless of operating load

The facility will also be subject to a short-term limit, to be attained within 12 months, of 6,253 lb/hour. This limit is expressed as a total for both units to provide the owner with more flexibility. EPA states in its fact sheet that this interim limit can be attained by switching to low sulfur coal.

At a certain level, the rule granting the petition is not that big a deal. Section 110(a)(2)(D) of the CAA, the “good neighbor” provision, prohibits emissions in one state that interfere with attainment of NAAQS in another state. Petitions under § 126 to enforce this requirement are not new. Nonetheless, the rule is noteworthy.  As EPA stated, this is the first sole-source petition under § 126. EPA spokesman Lawrence Ragonese described the rule as “precedent-setting” and said that it opened the door for other such petitions. 

Second, I think that the rule has to be seen in the context of the current debate in Congress over EPA’s CAA authority. The fact sheet specifically notes that the rule requires the same type of controls as would the Cross-State Air Pollution Rule and the Mercury and Air Toxics Standard, both of which are under attack at the moment. By essentially inviting other § 126 petitions, EPA seems to be signaling to Congress that attacking the CSAPR and MATS rules won’t make the problem go away. Presumably, too, the message is that the comprehensive approach in the CSAPR, which permits as much trading as the CAA allows, might be a better option than forcing EPA to respond to – and generators to comply with – individual petitions under § 126.

Finally, and on a related note, issuance of the rule seems consistent with Administrator Jackson’s remarks late last week, described by E&E Daily as a “vow” to “crack down on coal.” If EPA’s recent retreat on the revised NAAQS for NO_x and its delays in issuance of other rules might have led some observers to conclude that EPA was backing down, Jackson’s remarks seem explicitly designed to announce that EPA will not be backing down. In that context, the grant of the petition would seem to be a tangible demonstration that she really means it.

The battle is clearly not over, but the petition does illustrate one important factor – much of what EPA does is not really discretionary. Rather, it is mandated by some existing provision of the CAA. If Congress is not happy with EPA, it really has only itself to blame. If it wants less regulation; it is going to have to vote to amend the CAA in significant ways – and, presumably, survive a presidential veto.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this week, the Massachusetts DEP issued a package of regulatory reforms. While the focus of the package was on finding ways for MassDEP to implement its mission with fewer resources, a number of the reforms are specifically targeted at facilitating the development of renewable energy. If you want to see more about that angle, you can take a look at our client alert about the reforms.

On the non-energy side, my personal favorite is MassDEP’s expressed willingness to review the role of its hazard ranking system in the state Superfund, or Chapter 21E, program. Given the way the 21E program now operates, the HRS has outlived its usefulness and could be eliminated completely without any adverse impacts to human health or the environment.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

E&E Daily reported this week that Congressional Democrats are opposing the Regulatory Accountability Act of 2011. H.R. 3010 would codify a requirement for cost-benefit analysis of major regulations in the Administrative Procedures Act. According to the report, John Conyers, ranking member on the House Judiciary Committee stated that the RAA

would amend the Administrative Procedure Act in ways that would effectively halt agency rulemaking and undermine public health and safety rules.

Excuse me?

The guts of the RAA would be to:

·         Require cost-benefit analysis for all rules expected to cost more than $100,000,000

·         Require cost-effectiveness for rules going beyond statutory minimum requirements – If EPA wants to impose rules that would cost more than the minimum requirements necessary to implement a statutory requirement, it must demonstrate that the marginal cost of the increased stringency is outweighed by the marginal benefit.

·         Set some limits on agency promulgation of guidance. I am particularly taken with the provision that would authorize the Administrator of the Office of Information and Regulatory Affairs to “issue guidelines for use by the agencies in the issuance of major guidance and other guidance.” My Massachusetts readers will recall the effort by NAIOP to require that our MassDEP issue “Guidance on Guidance”, setting ground rules on the use of guidance. The NAIOP ground rules are fairly similar to those in the RAA.

I’m sorry. I am not a political consultant, but I still don’t get the Democrats’ opposition to this. There is definitely stuff in the RAA that is easy not to like. That’s fine, but when Democrats oppose cost-benefit analysis, it just sounds dumb. It plays into the anti-regulatory crowd’s hands. It suggests that there isn’t a regulation out there that Democrats don’t like and that Democrats don’t care whether regulations actually benefit society.

My advice, for what it’s worth? The Democrats should take up the mantle of cost-benefit analysis. Challenge the GOP to demonstrate that they are not simply using cost-benefit analysis as a cudgel to stop all regulations, by making clear that the Democrats regard cost-benefit analysis, not as a way to end regulation, but as a valuable tool to make sure the regulatory process works as it should.

I remain an optimist.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Does anyone remember cost benefit analysis? As I recall, it was an economic tool that many in the academic and business communities wanted to use to discipline EPA’s more grandiose regulatory efforts. EPA has now used it for years; it routinely provides analyses showing that the benefits of its rules far exceed the costs that they impose.

As I have previously pointed out, that really shouldn’t be the end of the story, because unless EPA goes farther, and performs rigorous cost-effectiveness analysis, we could still be wasting big bucks. Even if a regulation provides $100B in benefits for only $90B in costs, wouldn’t we want to know if a different regulatory structure could obtain $90B in benefits for only $10B in costs? While that might be a hypothetical, it’s not a totally unreasonable one. Nonetheless, at least EPA is doing some C-B analysis and I think it likely that most, if not all, of EPA’s rules do result in greater benefits than costs.

These musings were triggered by the announcement by EPA yesterday that it would not be revising the coarse particulate matter, or PM₁₀, standard, the result of which will apparently be to allow dust emissions from farming operations to escape federal regulation. I don’t have a view on the merits of tougher PM₁₀ regulation. Based on a quick review of EPA’s technical analysis, it appears to be a close question. Either way, though, I’m confident that Congressional opposition to a more stringent PM10 standard stems from a new development – opposition to cost-benefit analysis from those opposed to environmental regulation. 

The new approach, seen in the North Carolina legislation on which I commented earlier this year, opposes costly regulation, regardless of its benefits. The rhetoric is that this is not the time to impose new regulations, because the economy cannot afford it – as though there is a time when people can afford to get cancer or heart disease. 

So, where are we today? Environmentalists support environmental regulation, looking only at the benefits it provides. Others oppose environmental regulation, looking only at the costs it imposes. Altogether, a sad state of affairs.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As part of its efforts to control the impact of mountaintop removal mining, EPA has implemented a number of changes – both procedural and substantive – into how § 404 permit applications for such activities will be reviewed. None of these changes have gone through notice and comment rulemaking. As we previously noted, Judge Reggie Walton already expressed skepticism about EPA’s mountaintop removal guidance. Last week, in the latest decision in National Mining Association v. Jackson, Judge Walton shot down EPA’s “Enhanced Coordination Process”, or ECP, for reviews of section 404 permit applications.

Although EPA described the modifications as the types of procedural changes that are within agencies’ inherent authority, Judge Walton was having none of it. He concluded that EPA’s authority under the CWA is subject to certain unambiguous limitations. 

The statutory language explicitly establishes the Secretary of the Army, acting through the Corps, as the permitting authority, which strike the Court as an express limitation. … The statute is therefore not ambiguous…. Thus, if a responsibility involving the permitting process has not been delegated to the EPA by Congress, that function is vested in the Corps as the permitting authority.

Under the Multi—Criteria Resource Assessment, or MCIR [don’t ask me why it’s “MCIR” and not “MCRA”], EPA, not the Corps, initially applies § 404(b) guidelines, and EPA directs the Corps how to process mountaintop removal § 404 permit applications.  To Judge Walton, these changes exceed EPA’s statutory authority under the CWA.

Judge Walton also concluded that the ECP, including the MCIR violated EPA’s obligation to provide notice and an opportunity to comment on the change in rules that the ECP represents. For those of you who are not APA geeks, the APA exempts from the obligation to provide notice and comment “rules of agency organization, procedure, or practice.” While the ECP sounds procedural – after all, the word “process” is in the label – Judge Walton concluded that the rules were substantive and required notice and comment under the APA. To Judge Walton,

The fact that the creation of the MCIR Assessment removed the task of applying the 404(b)(1) guidelines to pending permits from the Corps and bestowed it upon the EPA signifies a substantive, rather than a procedural, change to the permitting framework. … [I]t is apparent that the MCIR Assessment and the EC Process “effectively amend” the Section 404 permitting process by conferring additional reviewing authority on the EPA – authority that the statute reserves for the Corps. American Mining therefore compels a finding that the MCIR Assessment and the EC Process are legislative rules. 

Another day, another defeat for EPA. The APA lives.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

EPA may have had problems in court in recent years defending its regulations, but it has generally fared much better in its enforcement cases. Earlier this week, however, EPA suffered what will be, if it is affirmed, a devastating defeat in its PSD/NSR enforcement initiative. In United States v. EME Homer City Generation, Judge Terrence McVerry concluded that the government could get no relief against either the former owners of the facility or the current owners or operator. No penalties. No injunctive relief. No relief under state law. Nothing. Nada.

The facts here were typical of NSR enforcement cases. The facility, in Homer City, Pennsylvania, had implemented a number of projects from 1991 through 1996 which, EPA alleged, required PSD permits. No permits were sought. The owners at the time of the changes sold the plant in 1999. It was sold again in 2001 and is currently operated by one entity and owned by a group of LLCs. 

The court’s analysis was thorough, yet straightforward. According to the court, PSD requirements are one-time, pre-construction requirements. With respect to civil penalties, the United States acknowledged that the five-year statute of limitations precluded claims against the former owners. The court gave the claim against the current owners and operator short shrift. The court concluded that

The alleged PSD violations constitute singular, separate failures by the Former Owners to obtain pre-construction permits, rather than ongoing failures to comply with whatever hyupothetical conditions might have been imposed during the PSD permittingprocess. Thus, the United States was required to file suit to recover civil penalties for an alleged PSD program violation within five years of the construction project.

The big news from the decision is the court’s refusal to grant injunctive relief. While Judge McVerry described the statute as complex and ambiguous, he did not find the decision before him difficult. With respect to the current owners/operator, injunctive relief could not be imposed on them, because no remedy can be imposed without a liability finding. Because the failure to obtain PSD permits was solely attributable to the former owners, the current owners/operator are not liable for the violation. No liability; no injunction. 

The court found the question somewhat more difficult with respect to former owners. They would be liable for the original violation, if proved, and the five-year statute of limitations does not apply to injunctive relief. The court punted on whether it had authority to issue an injunction against former owners, resting its decision instead on the court’s broad discretion to grant or deny equitable relief. Describing injunctive relief as “a rare and extraordinary remedy,” the court concluded that it would be inappropriate to grant relief against former owners where, since they no longer own the facility, injunctive relief against the former owners is not necessary to prevent future violations by the former owners. 

Finally, the court concluded that the current owners/operator did not violate their Title V permit, because the permit does not include any requirement to meet BACT. The court flat-out rejected the idea that the Title V permit could somehow be found to “incorporate” BACT requirements that should have been included in the Title V permit because they should have been included in PSD permits, because the former owners should have applied for them. 

In short, the government was too late to bring claims against the former owners, and could not establish liability against the current owners. Thus, it could get no relief against anyone.

It is difficult to square this opinion with the general rule interpreting police power statutes broadly to effectuate their purposes, because this decision means that there will be some circumstances in which there is a violation with no remedy, even where the impacts of that violation are still being felt, or seen, or inhaled, today. However, the decision is careful and thoughtful and I wouldn’t automatically assume that it will be reversed on appeal. Not a good day for EPA.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As some of our clients know all too well, I am spending much time these days defending citizen suits. As federal and state agency budgets get slashed, we’re only going to see more such suits, unless a Tea Party-controlled Congress amends the relevant statutes to cut back on citizen suit provisions. 

In a move that will facilitate citizen enforcement, EPA announced last week that it has yet again upgraded its Enforcement and Compliance History Online, or ECHO, data base. As Cynthia Giles, EPA’s Assistant Administrator for Enforcement said:

EPA is committed to providing the public with easy to use tools that display facility compliance information and the actions EPA and the states are taking to address pollution problems in communities across the nation. EPA is proud to announce our latest effort under the President’s White House Regulatory Compliance Transparency Initiative and we will continue to take steps to make meaningful enforcement and compliance data available as part of an open, transparent government.

In other words, if we don’t have the resources to sue the polluters, we’ll at least try to make sure that NGOs do. 

It’s difficult to be against increased transparency – and I’m not. I will note, though, that ECHO is not perfect. I frequently see mistakes when I review information about our clients. I certainly would advise clients to review ECHO periodically to ensure that they know what information EPA is providing to the public about their compliance status.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As Greenwire reported, the Inspector General of the EPA recently released a report criticizing how the agency followed (and deviated from) procedures in publishing the Technical Support Document that underpinned its December 2009 Endangerment Finding.  The IG was instructed to conduct this review at the order of Senator Inhofe (R-OK), the ranking Republican on the Senate Committee on Environment and Public Works.  The review, which cost nearly $300,000, examined only whether EPA followed its own procedures and those of the Office of Management and Budget (OMB), and did not analyze the validity of the scientific or technical information used to support the endangerment finding.  Although news of the report is likely to reinvigorate GOP criticism of the endangerment finding and the climate change regulations that followed, the IG repeats throughout the report that it is an evaluation of data quality procedures, not the quality of the data itself or the conclusions that EPA reached.  Plus, as EPA highlighted in its response to the IG's report, the peer-reviewed studies conducted since the endangerment finding only serve to strengthen the validity of the science that EPA relied upon.

The key conclusion the IG reached is that the Technical Support Document (TSD), in which EPA summarized the results of the leading scientific assessments on climate change, did not meet the OMB’s peer-review requirements. The problem turns on whether the TSD was a “highly influential scientific assessment” -- defined in the OMB regulations as an assessment that could have an impact on the public or private sector of more than $500 million in one year or is novel, controversial or precedent setting.   Such assessments require more attention to peer review, and agencies have to follow specific peer review procedures laid out by the OMB and certify that they have done so. 

The IG concluded the TSD was a "highly influential scientific assessment" because EPA weighed the strength of the available science and chose what information to include.  In summarizing the world of data down to a manageable document, the IG argues, EPA made choices that qualify as science. EPA officials, on the other hand, argue that the TSD does not meet this threshold, since it does not contain any new science or conclusions.  Instead, it's more of an annotated bibliography, summarizing findings from prior studies, all of which had been extensively peer-reviewed. 

The EPA’s Peer Review Handbook allows use of already-peer-reviewed studies to support EPA decisions, so long as the EPA checks to see whether the earlier peer review meets its standards. The IG criticizes that EPA didn’t certify to this double-checking in any of its publicly released documents.  Additionally, although the EPA did have the TSD reviewed by a panel of 12 climate change scientists before publishing it, the IG concludes that this did not meet the OMB requirements for a “peer review” because the review results and EPA response were not publicly reported, and one of the twelve panelists was an EPA employee.   

The story that EPA failed to follow its own procedures in analyzing the science behind this critical decision certainly reads well, and could be very potent fuel to add to anti-EPA rhetoric.  But my conclusion is that this dispute seems manufactured, or at the very least, far too focused on form over function and style over substance. Although the quality of data in science is a real issue, the primary issue here seems to be that EPA could have been better at showing its work, rather than a question of whether it, or the world's climate scientists, did the work to begin with.  

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The abandonment of any discussion of climate change in Washington has not been followed in Massachusetts. Yesterday, Rick Sullivan, the Secretary of Energy and Environmental Affairs, released the Massachusetts Climate Change Adaptation Report, providing the fruits of a lengthy process in Massachusetts to look at the impacts of climate change on five areas: Natural Resources and Habitat; Key Infrastructure; Human Health and Welfare; Local Economy and Government; and Coastal Zone and Oceans. 

Certainly, the summary of potential impacts in Massachusetts is not a pretty picture – speaking metaphorically, anyway; many of the pictures in the report actually are pretty cool. For those who want a quick idea, take a look at the 100-year flood in downtown Boston under the high emissions scenario, on page 20 of the Report.

The trick is in choosing adaptation strategies that are cost-effective in the face of some substantial uncertainties. To give them credit, the Report’s authors are aware of the difficulties. We’ll see what happens when regulators start to consider concrete implementation of particular strategies that may limit development in certain areas or impose additional costs or requirements.

While the Report is too long to summarize here, a few highlights are worth noting:

*  An emphasis on combining mitigation and adaptation – look for more requirements to use low impact development approaches and to meet LEED building standards

*  A recommendation to increase buffer zones – do we take land out of development because it may be needed for flood control in 50 years?

*  Assessment of ways “to discourage and avoid siting in current and future vulnerable areas.” How do we decide what constitutes a vulnerable area and over what time horizon? Do we forbid construction? Require extensive insurance and rely on the market to control investment?

*  Consideration of the development of guidance “to fully implement” existing requirements that new buildings for “non-water-dependent uses” under Chapter 91 “be designed and constructed to … incorporate projected sea level rise during the design life of buildings.” Given existing requirements to devote the ground floor of such buildings to “facilities of public accommodation”, perhaps we could simply require owners to devote the first floor to salt water swimming pools!

Levity aside, this is serious stuff. The projections are certainly scary. That doesn’t make the regulatory decisions easy, however. Decisions regarding time horizons, discount rates, and how much to rely on regulations versus market incentives will be difficult, but getting them right will be critical to ensure that appropriate adaptations are made without adapting ourselves out of all economic growth.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last year, I compared EPA’s Interim Guidance on Considering Environmental Justice During the Development of an Action to Rube Goldberg – and that was only EJ Guidance on Rulemaking. Now EPA has issued its comprehensive Plan EJ 2014. I still find the resources devoted to this subject by EPA and the convolutions it is going through to analyze the issue to be stunning.

I also still think that my simple analysis from last year is not too simplistic. Here’s the way EPA’s job is supposed to work:

1.         Congress passes environmental protection laws for EPA to implement.

2.         Those statutes generally provide for EPA to set standards with something like “an adequate margin of safety.”

3.         EPA does its job.

There are two significant theoretical issues which could give rise to legitimate concerns about disparate environmental impacts. One is if, as a result of political disenfranchisement, what are known as EJ communities cannot adequately participate in the environmental regulatory process. I don’t doubt that this happens, though I’m skeptical about how often and statistics about the number of solid waste transfer stations in poor or minority communities doesn’t make the case for me. In any case, the broad issue is beyond the capability of EPA to solve and it shouldn’t try. That’s what the Civil Rights Act is for. Moreover, a significant piece of the problem is addressed just by increased disclosure and transparency that is happening anyway, through developments in the electronic, i.e., web-based, dissemination of information.

The other concern frequently raised is the one of cumulative impacts, and it receives a lot of attention in Plan EJ 2014. That one, I really don’t buy. Cumulative impacts are already addressed as appropriate in the EPA organic statutes. That’s what nonattainment with NAAQS and resulting state implementation plans are all about. If an area is in compliance with the NAAQS, that should be the answer. If they are not, everyone contributing to that exceedance gets ratcheted down. If the NAAQS is not sufficiently protective (ozone, anyone?), lower it. The same is true for the Clean Water Act. That’s what water quality criteria and the TMDL process are for. If a water body complies with WQCs, it should be considered safe. If not, dischargers into that water body get ratcheted down. 

I could continue, but I won’t. 

My final pet peeve about EJ is the continuing discussion regarding what Plan EJ 2014 calls “equitable development and place-based initiatives.” As I noted in another post on the EJ issue, EPA is, to put it lightly, somewhat optimistic when it thinks that its EJ efforts can help spur economic development in EJ communities. EJ can be used to say no to economic development in poor or minority communities, but it cannot say yes. EPA cannot make capital go where it does not want to go. 

Prudent developers work with communities. They don’t need EJ rules to tell them that local support is better than local opposition. However, ask those developers most known for working with local communities and I doubt you’d find one who thinks that EPA or state or local EJ rules or guidance help facilitate development in any way, shape, or form.

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

In an interesting decision issued today, in Zoning Board of Appeals of Holliston v. Housing Appeals Committee, the Massachusetts Appeals Court held that a local zoning board of appeals cannot use vague local environmental concerns as a basis for denying a comprehensive permit under the Massachusetts affordable housing statute, Chapter 40B. As those practicing in this area know, Chapter 40B consolidates all local permitting before the zoning board of appeals. The board can deny permits based on local needs, but there is a presumption that the need for affordable housing trumps local needs if the stock of affordable housing is less than 10% of total housing in the municipality.

There is no dispute that the stock of affordable housing was less than 10% in Holliston. Nonetheless, the ZBA in Holliston denied on the project, asserting environmental concerns about existing contamination, wetlands protection, and stormwater. The essence of the case was that, as the Court noted, plans submitted to the ZBA are generally preliminary. Details get filled in later. Here, the developer basically said that it would comply with Chapter 21E and the Massachusetts Contingency Plan and obtain a condition of no significant risk, and that it would comply with the Wetlands Protection Act and stormwater requirements and subject its detailed plans to review by the local Conservation Commission and DEP at a later date. The Town said that this was not sufficient. 

Judge Kafker (a former Foley associate, I feel compelled to note) made short work of the Board’s arguments. With respect to the contamination, the Court noted that there in fact is no local by-law that even purports to regulate the scope of remedial work. Since the ZBA review is limited to local concerns, it essentially was without jurisdiction to review the remedial plans. 

With respect to wetlands and stormwater, Holliston has a local bylaw and regulations that are more stringent than the state requirements. However, as the Court noted, the Board “failed to demonstrate that the safeguards the local by-law provides to wetlands interests over and above the protections afforded by the WPA outweigh the community’s need for low or moderate income housing.” Noting that Chapter 40B “curtails” local authority, the Court provided the coup de grace:

It is not enough to simply point out a lack of compliance with local regulations or complain that the local board’s power has been taken away. The board must show that the impacts on the local wetlands outweigh the local need for affordable housing.

The notion that 40B trumps local by-laws is not new. However, this case is the most comprehensive analysis that I have seen regarding the interplay between Chapter 40B and local environmental regulations. The short answer? Local environmental bylaws and regulations do not justify a NIMBY denial of affordable housing projects.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Following EPA’s decision last week to scrap its reconsideration of the 2008 ozone National Ambient Air Quality Standard, the parties to the litigation challenging the 2008 standard are back in court. This week, EPA submitted a brief to the Court of Appeals, which was pretty much a six-page version of Roseanne Roseannadanna’s “Never mind.” After telling the Court for years that it should defer to EPA’s reconsideration process – a decision on which was always just around the corner, until EPA decided it wasn’t – EPA has now told the Court that it is time to brief the merits of the challenges to the 2008 standard of 0.075 ppm.

As I noted last week, EPA has already made the argument that the Court of Appeals does not have jurisdiction in this case. If that argument fails, I cannot wait to see what argument EPA will make on the merits. The Clean Air Science Advisory Committee said that 0.075 ppm was not sufficiently stringent, the Court of Appeals has said that EPA cannot willy-nilly ignore CASAC, and EPA itself pretty much said in 2010 that the standard cannot be any higher than 0.070 ppm. I don’t envy the DOJ lawyers who will be writing that brief.

The problem for the environmental group challengers is whether there is any practical remedy at this point. The Court cannot promulgate its own NAAQS. All it can really do is impose a schedule on EPA to correct the 2008 standard. It doesn’t take much analysis to conclude that there is likely no reasonable deadline the Court could impose that would result in a new ozone standard any earlier than the 2013 date towards which EPA is already pointing. I foresee some awkward moments for the DOJ lawyers and some very firm finger-wagging by the Court, to the effect of “We really, really expect you to issue a new standard in 2013.”

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Regional Greenhouse Gas Initiative (RGGI) celebrated its third anniversary by holding its 13th quarterly auction of carbon dioxide allowances on Wednesday.   As today's Market Monitor report highlights, although the number of bidders was up, the percentage of allowances purchased was down.  Thirty-one bidders purchased just under 18% of the 42,189,685 current compliance period allowances offered for sale by the 10-state group (including New Jersey).  These allowances, with vintage dates from 2010 and 2011, can be used by electric generators in the current compliance period, which will end in December.  The previous low for demand for these allowances dates from the last auction in June, where 25 bidders bought only 30% of the available allowances, also at the floor price of $1.89.  

The states other than New Jersey then held an auction offering 1.8 million allowances from vintage year 2014, which can be used to comply in the next compliance period, from 2012-2014.  In perhaps the most direct sign of uncertainty for the future of RGGI, no one bid on these allowances. 

Per the Market Monitor report, there were not any market barriers to bidding in the auction of future compliance period allowances.  Bidders were just not interested.  The future of RGGI could seem  uncertain to would-be-bidders, between member states' reconsidering their involvement -- for instance, New Hampshire's Senate recently failed to overturn a veto by the Governor of a bill that would have removed the state from the program -- and RGGI, Inc.'s ongoing comprehensive review of the program for the new compliance period. 

In addition, the compliance entities, who are estimated to own 97% of the allowances in circulation, might feel that they have enough allowances already.  In the press release accompanying the monitor report, Maine's Public Utilities Commissioner chalked the low sales of the auction up to reduced emissions across the RGGI region, arguing that the states' investment in energy efficiency have worked.  With lower emissions, fewer allowances are needed.  Since RGGI allows banking, but not borrowing, extra allowances from the 2009-2011 compliance period can be used in the 2012-2014 period, but not the other way around.  As a consequence, the over-allocation of allowances to this early period could make sales of RGGI allowances in the second compliance period sluggish, even without the added political uncertainty.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, SouthCoastToday and the Herald News both reported that a large expansion by Meditech of its facility in Freetown was on life support, after the Massachusetts Historical Commission required Meditech to strip the top two feet of soil from 21 acres and sieve it for archeological artifacts, at a projected multi-million dollar cost. The Herald News quoted various local leaders calling the MHC’s decision “incomprehensible…arbitrary…bizarre… and unacceptable.” What they did not point out, and what is even more troubling than just the decision here, is that the best description of the MHC action is simply this: business as usual. 

It’s telling that the state MEPA office approved the project, but that MHC is the stumbling block – and that Representative Michael Rodrigues was quoted as saying that

I’ve had several conversations with [Assistant Secretary of State] Michael Maresco. He told me the secretary is not going to meet with me or the applicants, and they have to comply with what his office dictates.”

People both in and out of government have been complaining – quietly – for years about the fiefdom known as MHC. Even the MEPA office cannot get MHC to play nice. Why has the criticism been so quiet? Because the MHC is located within the Secretary of State’s office. Because we live in a one-party state and Secretary of State likely has the job for life, if he wants it. Because state legislators don’t even want their name associated with a bill that would limit MHC’s authority or move it out of the Secretary of State’s office into some part of the administration managed by our actual Governor. Because developers fear retribution from the MHC.

Is the likely failure of the Meditech project going to the catalyst for real change at MHC? One can only hope. It’s time for the legislature, the administration, municipalities, and the private sector collectively to rise up and say "I'M AS MAD AS H___, AND I'M NOT GOING TO TAKE THIS ANYMORE!"

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Yesterday, in commenting on the court battle over EPA’s reconsideration of the ozone NAAQS, I said that I would be surprised if EPA doesn’t issue the new standard within six months. Oops. My bad. Today, President Obama directed EPA to give up on the reconsideration effort. It’s difficult not to be cynical about the White House decision. As much as I admire Cass Sunstein, his letter to EPA providing the basis for the White House decision is not persuasive. Basically, it makes two points. 

First, EPA has to review the NAAQS every five years. Since this cycle began in 2008, EPA would have to review any new standard in 2013. Therefore, why bother? Why not just wait until 2013? The problem with that argument is that the review of the NAAQS is extremely complicated and cumbersome. It’s always going to take much of the five-year cycle. Sunstein’s argument, pushed to its logical conclusion, could result in the NAAQS never being updated, because, by the time EPA is ready to act, it will be so near the time for the next review that the decision would always be deferred to the next round.

The second argument is that the Administration has implemented a number of major initiatives to improve air quality, many of which will reduce ozone in the atmosphere. That’s certainly true, but the real answer to that is, so what? Setting the NAAQS is not a regulatory action; it is merely EPA’s statement as to how high ozone concentrations can get before ozone poses a risk. Regulatory actions may follow from that, but they’re distinguishable. If some of the other actions EPA has taken will reduce ozone levels, that’s not a reason to stop the reconsideration process. In fact, that only suggests that additional regulatory actions necessary to comply with the standard won’t be as expensive as they might otherwise have been, because prior regulatory efforts will have already achieved part of the necessary reductions.

I may have been wrong about EPA’s issuance of a new ozone standard, but I’ll nonetheless go out on a limb and make another prediction – it won’t be long before the environmental petitioners return to the Court of Appeals and request that the Court order EPA not only to continue with the reconsideration process, but to issue a new standard asap. Alternatively, they can go back and simply revive their challenge to the Bush administration standard of 0.075 ppm. If they can get the court to conclude that a standard above 0.070 ppm (or even lower) is arbitrary and capricious, we may still see a lower standard. 

If I were really cynical, I might conclude that that is in fact the Administration’s hoped-for outcome. That way, they get the lower standard, but without the political heat, because they can blame it on the court.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This week, EPA filed a brief with the D.C. Circuit Court of Appeals, arguing that, notwithstanding its fourth delay in issuing a decision on its reconsideration of the NAAQS for ozone, the court cannot and should not order EPA to issue a decision. Industry shouldn’t get too excited, however. In the same brief, EPA telegraphed pretty clearly, consistent with its 2010 proposed rule, that it remains on track to significantly decrease the ozone standard from the 0.075 ppm standard promulgated by the Bush administration in 2008.

As most readers know, the Bush standard was higher than that suggested by EPA’s own Clean Air Science Advisory Committee, or CASAC. In a parallel case, the D.C. Circuit found EPA’s fine particulate standard arbitrary and capricious, largely because it had ignored CASAC’s recommendations. Given the decision in the fine particulate case, and, presumably, the Obama administration’s own views on the appropriate standard, it is not surprising that EPA embarked on a reconsideration effort, rather than trying to defend the Bush standard.

In January 2010, EPA proposed that the standard should be in a range from 0.060 ppm to 0.070 ppm. However, notwithstanding CASAC’s views, the new standard remains hugely controversial and EPA has had difficulty in finalizing the rule. EPA missed an August 2010 deadline to publish a final rule, and then an October 2010 target, and then a December 31, 2010 target, and then a July 29, 2011 target. When EPA, after missing the most recent target, would not even give a date, but instead only informed the court and the parties that a final rule would be issued "shortly", the environmental petitioners, including the American Lung Association, asked the court to order EPA to issue the final rule.

EPA’s opposition is straightforward. First, it argues that the Court of Appeals has no jurisdiction over citizen claims that EPA is late in issuing such rules. Second, EPA claims that it has been “diligent” in its reconsideration effort and that the final rule will indeed be issued “shortly.” 

It’s difficult to avoid the conclusion that EPA was, to put it mildly, overoptimistic in its reports to the court regarding how long the reconsideration process would take. They should have known better. That being said, I wouldn’t be surprised if the Court continues to give EPA at least some more time to reach a decision. After all, the court cannot issue a standard itself. What would surprise me would be if EPA does not manage to issue the new standard sometime in the next six months or so. They’ve been boxed in by CASAC and any standard above 0.070 ppm would probably be found to be arbitrary and capricious. 

The ever-reliable internet attributes the “wheels of justice” quote to Sun Tzu. No matter how slowly it grinds, EPA is going to have to issue a rule at some point. It would be best to get it out as far in advance of the election as possible. Moving from Sun Tzu to Shakespeare, “if it were done when 'tis done, then 'twere well It were done quickly.” 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When EPA issued its preliminary plan in May for review of its regulations, I said that the proof would be in the pudding. Well, EPA has now issued its final plan. My review? The pudding tastes ok, but it doesn’t taste as good and it’s not as filling as it could be.

My major complaint with the preliminary plan was its failure to target the single biggest area for reform – those areas where EPA still relies on command and control regulation. Obviously, statutes dictate EPA’s approach in many cases, but not all. There is much more friendly generic language on this score in the final plan. For example, EPA now states that:

To supplement traditional compliance approaches, EPA plans to routinely structure federal regulations and permits as effectively as possible to achieve compliance, through adequate monitoring requirements, public disclosure, information and reporting mechanisms, and other structural flexibilities, including self-certification, and third-party verification.

Unfortunately, specific example of proposed changes to rely on self-certification and third-party verification are few and far between in either EPA’s “early action” or “longer term” lists of potential reforms. Why couldn’t EPA have included one simple bullet? Why couldn’t EPA simply have directed each program to review its statutory authority to shift from technology-based or other command and control approaches to performance standards and market based approaches?

It is telling that only 1 of 35 specific proposals relates to Superfund, which remains purely a command and control program – and even that item concerns only National Priorities List rules, not how cleanups are selected and overseen. I don’t see any provisions in CERCLA that would prevent EPA from revising the NCP to identify risk-based standards for different media and allow PRPs to meet those standards in whatever cost-efficient manner they can identify.

True regulatory reform is clearly not going to happen overnight. EPA’s current plan probably qualifies as a step in the right direction, but it’s not much more than a baby step.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the SJC issued its eagerly awaited decision in Ten Persons of the Commonwealth v. Fellsway Development. I think that the SJC probably got it right. It says something about MEPA jurisprudence, however, that the decision is good for neither citizen plaintiffs nor for developers. I’d suggest that the legislature go back to the drawing board, but it won’t happen and, if it did, I wouldn’t trust the legislature to get it right.

Fellsway Development involves an proposed development within the Middlesex Fells Reservation. After running into certain obstacles, the developers reconfigured their project to avoid the need for any permits and thus any MEPA review. To do so, they eliminated any roadway changes that would have required approval from the Department of Conservation and Recreation. DCR initially concluded that it still had to perform some roadway changes itself in order to mitigate adverse traffic impacts. EEA, in turn, concluded that such changes by DCR would constitute financial assistance to the project, which would bring it back into the MEPA universe.

Fellsway Development had a creative solution to that determination. It entered into an MOU with DCR pursuant to which DCR would do the work, so the project would not require a permit, but Fellsway Development would pay for the work, so that it would not be receiving any financial assistance. EEA blessed the deal with an advisory opinion concluding that MEPA review would not be required.

The unhappy citizen protectors of the Reservation were not so pleased. They sued, arguing that the advisory opinion was wrong, and that the MOU constituted both a form of permit and that it constituted improper “segregation” of the project, because, whatever Fellsway Development said, the roadway improvements were really a necessary part of the project.

Following its decision in Cummings v. Secretary of Environmental Affairs, the SJC concluded that the EEA Secretary is not subject to suit under Chapter 214, § 7A, because he cannot cause “damage to the environment” by making a flawed ruling under MEPA. This decision is almost certainly right under Cummings, but that doesn’t mean that it’s not nuts. In traditional administrative law terms, this case – and all MEPA cases – are about whether the Secretary’s decision was arbitrary and capricious. How is it that our case law has thus determined that the Secretary is not a proper party to the case?

The SJC also handed one victory to developers, by making clear that Chapter 231A, the declaratory judgment statute, does not provide standing to citizen plaintiffs. The court reiterated that:

We discern nothing in MEPA’s language, purpose, or administrative scheme, however, to suggest a legislative intent to confer standing on residents who bring suit alleging a generalized harm to nearby property.

Unfortunately, this was largely a pyrrhic victory for the developers, because the SJC concluded that the citizens had stated a claim under Chapter 214 7A, adequately alleging that DCR and Fellsway Development had violated MEPA by improperly segmenting the project. In a backhanded compliment, the SJC stated that “we do not suggest that the Secretary’s opinion [that no MEPA review was required] is unpersuasive.” Instead, the Court just fell back on the generous pleading requirements of Rule 12. While giving a nod to recent decisions imposing more rigorous pleading requirements – “We look beyond the conclusory allegations of the complaint” – the SJC nonetheless concluded that “plaintiffs have pleaded facts sufficient to support a claim that the DCR and the developers delayed specific roadway alterations, which might otherwise require a permit, in order to ‘phase or segment a Project to evade, defer or curtail MEPA review.’”

What’s the bottom line? 

1.                   The Secretary still will not be a party to cases asserting his/her MEPA decisions were wrong.

2.                   Developers remain at risk of having projects delayed because courts bend over backwards to give those challenging MEPA or permitting decisions their day in court.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As the deadline passed last week for submitting comments on EPA’s Utility MACT rule, it’s worth taking a big picture look at how the commenters line up. Big utility groups, such as the Edison Electric Institute and the American Public Power Association are looking for EPA to delay the rules. The basic argument is that it is going to take a long time to comply. EEI states that so many facilities will require extensions that the number of requests will create a backlog that will itself essentially create compliance problems.

However, it is not just environmental and public health groups that filed comments in support of the MACT rule. Exelon, which has a large nuclear fleet, submitted comments in support of the rule. In fact, Exelon referred to the “overblown critique” of the Utility MACT proposal, stating that the “lack of a national standard for toxic emissions continues to be a barrier to investment in new, cleaner generation capacity.” Industry supporters are not limited to Exelon. The Clean Energy Group, which includes PG&E, Calpine, and other generators with large gas fleets, also focused on the “business certainty the electric sector needs to move forward with capital investment decisions.” 

In looking at these comments, it is worth keeping in mind that the Utility MACT rule is only one of nine rules under development by EPA that would impose costs on coal-fired power plants. This confluence of rules is has been referred to as the “train wreck” for coal-fired power plants. While the Utility MACT rule may impose the greatest costs – and achieve the greatest benefits, according to EPA – many are concerned about the cumulative impact on coal-fired capacity. Earlier this week, the Congressional Research Service attempted to debunk the train wreck perspective:

The primary impacts of many of the rules will largely be on coal-fired plants more than 40 years old that have not, until now, installed state-of-the-art pollution controls. Many of these plants are inefficient and are being replaced by more efficient combined cycle natural gas plants, a development likely to be encouraged if the price of competing fuel – natural gas – continues to be low, almost regardless of EPA rules.

In any case, what’s the argument against promulgation of these rules on the same time frame? Isn’t that a good thing? There may be coal-fired plants which could sustain the capital investment required to comply with Utility MACT, but not the added cost of cooling water intake improvements to comply with new Clean Water Act requirements or the added cost of new disposal requirements if coal ash is regulated as a hazardous waste. Isn’t it better to know about all of these rules up front, so that facilities can plan for the total cost of all the rules? Wouldn’t a facility have legitimate cause to complain if the rules were instead issued seriatim, so that the facilities did not know about the full range of regulatory compliance costs when they make the decision whether to invest to comply with the first rule or instead to shut down?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Environmental Protection Agency proposed a rule yesterday that would exempt carbon dioxide injected into underground carbon capture & storage (CCS) wells from regulation as hazardous waste, so long as the CO₂ is held in wells designated for that purpose under the Safe Drinking Water Act.  In its press release announcing the program, EPA noted that the purpose of the regulation -- as well as its prior rulemakings under the Clean Air Act to require emissions reporting by CCS facilities, and the Safe Drinking Water Act to require appropriate siting, construction and monitoring of CCS wells -- was to reduce barriers to the use of CCS and promote the technology, which has yet to be proven at a commercial scale.  If the EPA is behind it, what more could CCS need? 

The interagency task force charged with evaluating barriers to CCS concluded in a report released last year that the chief obstacle for CCS was regulatory uncertainty, since most of our environmental laws do not contemplate such a technology.  The task force recommended that EPA implement regulatory changes such as this hazardous waste clarification. 

But the biggest barrier remains -- without comprehensive climate legislation and a price on carbon, there is no stable framework to encourage investment.  And this barrier is taking its toll.  This uncertainty is why AEP recently shelved plans to build a $668 million CCS retrofit on its Mountaineer coal-fired electric plant in West Virginia.

Although the outlook for CCS projects within the U.S. is thus uncertain, the United Nations' support of the technology could prompt some CCS projects in developing nations.  E&E reports today that a decision to allow CCS projects to be eligible for credits under the Clean Development Mechanism may soon be forthcoming, if technical issues such as monitoring and verifying reductions, and environmental safety and insurance coverage can be resolved.  

Other international organizations are also jumping on the CCS bandwagon.  A recent report by the International Energy Agency's Greenhouse Gas R&D Program touts the potential benefits of combining CCS with biomass facilities, particularly in Asia and Latin America.  The IEA theorizes that because the plant life used to make biomass fuels absorbs CO₂ from the atmosphere, subsequent storage of the CO₂ released from highly efficient biomass processes could actually reduce global atmospheric concentrations of carbon.  It's like how celery has negative calories.

The report asserts that we technically have the potential to annually remove from the atmosphere up to 10 gigatons of CO₂ -- or about 1/3 of annual global emissions -- through the use of biomass integrated gasification combined cycle plants and CCS.  A more economically-feasible implementation of these nascent technologies would still lead to reductions of 3.5 metric gigatons of CO₂ annually.  Notably, even this "feasible" scenario assumes that CO₂ will be priced at 50 euros ($71) per ton, worldwide.  Even in dreams of what could be, the development of CCS still has to face the obstacle of the price on carbon.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It’s easy enough to complain about EPA; I’ve even been known to do it on occasion. However, in Massachusetts, we have a different problem. We let local municipalities regulate all sorts of matters in which they have no expertise.  We even delegate to municipalities the implementation of our state Wetlands Protection Act. That’s how we end up with cases such as Lippman v. Conservation Commission of Hopkinton. Lippman didn’t make any new law, but it does illustrate what havoc local boards can wreak. 

The Lippmans wanted to build a single family house on land subject to the WPA. They filed the requisite notice of intent. The Conservation Commission held several hearings. On June 16, 2008, there was a motion to close the hearing and issue an order of conditions. It failed. On June 30, there was motion to deny the order. That too failed. The chair announced that the commission was deadlocked and would not decide. On July 14, the Lippmans received a formal letter announcing the deadlock and notifying them of their appeal rights. On July 28, the commission decided to deny the order, but failed to issue any decision. 

On July 30, 2008, the Lippmans requested a superseding order of conditions from DEP, which is the appropriate course when the local commission fails to act. On September 11, the commission “purported” – the court’s word – to issue a formal denial. Notwithstanding this purported denial, DEP issued a superseding order on September 22, 2008.

Faced with the commission’s denial and DEP’s superseding order, the Lippmans’ sought a declaratory judgment that the commission action was void and the superseding order controlled. Although the Lipmman lost in Superior Court, the Appeals Court reversed:

Where a conservation commission does not issue its decision within the required twenty-one day period and the applicant appeals to the DEP, it is the DEP’s superseding order that controls; any late-issued decision of the commission is without effect.

Why does this fairly trivial case matter? For one thing, it’s worth remembering that the Lippmans sought authority to build one single-family house more than three years ago. The commission failed to act more than three years ago. Only now has a court decided in their favor. Indeed, an appeal was filed concerning the superseding order. That appeal was stayed pending the court decision, but now will have to be heard before the Lippmans can actually build.

My firm anecdotal view is that this case is emblematic of the types of results one gets from local boards. However much one may complain about EPA, its decisions are more comprehensible, more predictable, and more transparent than one often gets from local boards. 

Three or four years to get approval to build one single-family house? Cases such as this are recruitment ads for the Tea Party.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

According to EPA, buildings account for 36 percent of total energy consumption and 65 percent of electricity consumption in the United States. In the absence of comprehensive legislation that would put a price on carbon, which would give building owners direct incentives to implement cost-effective efficiency measures, a number of jurisdictions have started looking into and in some cases implementing requirements that at least commercial buildings be subject to energy efficiency ratings.

Last week, the Institute for Market Transformation (now isn’t that a name to put fear into the hearts of Tea Party members) released a report on the state of building rating programs in the United States. It makes interesting reading. First, while California, Washington, and Massachusetts have either enacted rating legislation are considering some kind of program, most of the action on building ratings isn’t even at the state level, it’s at the local level. This differs from EPA mileage or Energy Star ratings.

Second, most of these programs are triggered by some kind of transaction involving the building, such as sales, leases, and financings. Using a transaction trigger is understandable in that it avoids the avalanche of complaints that would likely follow any program that applied broadly to all buildings over a certain size. However, at a time when the real estate industry just led us into the worst downturn since the great depression, and prices are still low in many markets, I can certainly imagine some in the real estate industry being concerned about imposition of additional requirements that might discourage real estate transactions.

A related point is that, in markets where much of the building stock is old, many in the real estate industry are concerned that such ratings will be like putting a scarlet letter – perhaps an I for “inefficient” – on older buildings.

The IMT report describes rating and disclosure as a:

market-based policy tool to help overcome informational barriers to energy efficiency. Systematically assessing or “rating” building energy performance puts important information in the hands of owners and operators, helping them identify opportunities to improve energy efficiency. Disclosing ratings empowers tenants, investors and banks to identify and compare the energy performance of buildings, unlocking the market’s ability to drive demand and competition for energy-efficient space. The premise mirrors transparency rules in other market sectors, such as nutritional labels on food and fuel economy ratings on vehicles, which are recognized around the world as consumer protections and keystones of free and fair enterprise.

Real mom and apple pie stuff. Who could be agin’ it. Sarcasm aside, I’m not even against it (or agin’ it). The question though, is which market failure building ratings are trying to address. If the purpose of the rating program is simply to address the information failure described above, then it should unambiguously be a good thing. Indeed, if that is the case, all other things being equal, such programs should actual lead to increases in prices, as previously unrealized but available cost-effective efficiencies are implemented.

However, if the purpose is to impose on building owners the cost of the externality created by building energy consumption, one would expect building prices to decrease compared to those in jurisdictions that do not force building owners to internalize that externality, and I would suggest that a local patchwork of such regulations would not be a good thing.

I don’t even know if would be feasible to do an econometric study examining the impact of such programs on building prices. They are a lot of variables for which an economist would have to control. It will be interesting to follow this issue over the next few years. I’m keeping an open mind at this point. I don’t doubt that there are market failures resulting from imperfect information. If the programs are truly focused on remedying those failures, they might be a long-term boon – and reduce GHG emissions a bit on the side.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After the death of Waxman-Markey, and given the current political climate, cap and trade is the Legislation Which Shall Not Be Named. Instead, there is discussion of either a renewable electricity standard (RES) or clean electricity standard (CES), and the talking points for supporters concern energy security and the growth of a clean energy economy, not climate change (also known as the Reality Which Shall Not Be Named). 

Either an RES or an CES would spur use of alternatives to fossil fuels in electricity generation and would lead to decreases in CO₂ emissions. However, as a report issued yesterday by the Congressional Budget Office highlighted, neither an RES nor a CES could reduce carbon emissions in as cost-effective a manner as could a cap and trade system. Moreover, a cap and trade program would ensure a certain level of GHG reductions, while the GHG impact of any particular RES or CES program would be uncertain.

I still don't understand how a market-based regulatory approach that originally had to be sold to skeptical environmentalists because it was seen as a "license to pollute" has become the poster child for government overreaching. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The fight about guidance and rules is in the news again. Yesterday, EPA finalized its guidance on Clean Water Act permitting with respect to mountaintop mining. As most of our readers know, EPA issued Interim Guidance in April 2010. In January 2011, in National Mining Association v. Jackson, Judge Reggie Walton, while denying plaintiff’s preliminary injunction, signaled that he thought that EPA’s Interim Guidance probably was a legislative rule that should have gone through notice and comment rule-making.

Judge Walton’s decision did not deter EPA, which finalized the guidance without significant changes. As the Legal Planet blog – a supporter of the guidance – noted, “the only differences between the interim guidance and this final one are cosmetic.” What are the nature of those cosmetic changes? They emphasize the flexible, non-binding nature of the guidance, hoping to fare better in the next round of judicial review than the agency did in defending the Interim Guidance. 

EPA reiterates that this guidance is guidance and not a rule. The CWA provisions and supporting regulations described in this document contain the legally and practically binding requirements. This guidance does not substitute for those provisions or regulations and is not itself a regulation. It does not impose legally or practically binding requirements on EPA, the Corps, or the regulated community, and may not apply to a particular situation depending on the circumstances. Any decisions regarding a particular permit will be based on the facts relevant to that permit and will be evaluated in accordance with the applicable statutes, regulations, and case law. Interested persons are always free to raise questions regarding the recommendations in this guidance in a particular situation. EPA will consider whether or not the recommendations or interpretations in this guidance are appropriate in each situation based on the statutes, regulations, and case law. The use of language such as “recommend,” “may,” “should,” and “can” is intended to describe agency policies and recommendations, while the use of mandatory terminology such as “must” and “required” refers to existing requirements under the CWA, its implementing regulations, and relevant case law.

The real trick about guidance is that it is not what EPA says in the document that matters; it is how EPA actually utilizes the guidance in practice. It is in some respects similar to the distinction between a facial constitutional challenge to a regulation and an “as applied” challenge. If EPA actually implements this document as a guide to its decision-making, then it is guidance. If EPA line staff implement it by rote, then it’s a rule. In other words, if it walks like a duck, it’s a duck, even if it does not talk like one.

Time will tell whether the courts believe EPA’s protestations that this really is just guidance. Time will also tell whether EPA implements this as guidance or implements it as a rule.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, AEP announced that it was putting on hold its plans to develop commercial scale carbon capture and storage technology at its Mountaineer plant in New Haven, West Virginia. As explanation, AEP cited the uncertain status of U.S. climate policy. More specifically, AEP CEO Michael Morris noted that it is difficult to get regulatory approval to recover CCS capital costs until GHG reductions are required. 

Well, duh. 

It’s understandable that, in a world where putting a price on carbon emissions has become The Policy Which Shall Not Be Named, those who are trying to move technology forward look to other policy instruments, such as federal grants or subsidies, or tax provisions. A robust clean energy standard would provide increased incentives for technologies covered by the standard, but it is hardly the most efficient approach economically.

To this simple country lawyer’s mind, it’s not really that complicated. I can’t expect those who doubt the reality of climate change to support climate policy. For those who do, at some point we’ve got to recognize that there is no way to reduce carbon emissions, protect industry, and hold consumers harmless. The whole point is that carbon emissions are a negative externality – a cost that no one has been paying. Until we make someone pay those costs, its unrealistic to think that we can really encourage the technologies we need to develop to reduce carbon emissions.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, in Center for Biological Diversity v. EPA, Judge Henry Kennedy reminded us that, in thinking about whether the existing Clean Air Act requires EPA to address climate change, the actual words of the statute matter. The scope of the climate problem does not obviate the need to parse individual provisions of the CAA and Massachusetts v. EPA did not resolve all issues. 

CBD petitioned EPA to regulate GHG emissions from nonroad engines and vehicles, under § 213 of the CAA, and from aircraft engines, under § 231 of the CAA. EPA did issue advanced notices of proposed rulemakings in response to the petitions, but CBD sued, arguing that EPA has not gone far enough. 

The court rejected CBD’s claims regarding nonroad engines, because § 213 provides only that

If the Administrator determines that any emissions not referred to in [a prior paragraph] from new nonroad engines or vehicles significantly contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, the Administrator may promulgate (and from time to time revise) such regulations as the Administrator deems appropriate . . . .

To the court, the “if” and “may” language, combined with the overall structure of § 213, mandates a conclusion that EPA does not have an obligation to make an endangerment finding with regard to nonroad engines. Even so, as the court noted, EPA does have an obligation to respond fully to CBD’s petition, and EPA’s ultimate action on the petition will itself be subject to judicial review.

With respect to the petition under § 231 regarding airplane engines, the different language of that section compelled a different conclusion.  

The Administrator shall, from time to time, issue proposed emission standards applicable to the emission of any air pollutant from any class or classes of aircraft engines which in his judgment causes, or contributes to, air pollution which may reasonably be anticipated to endanger public health or welfare.

Again looking at the specific language of the statute, including the use of the mandatory “shall,” the court concluded that EPA cannot refuse to make endangerment findings.

The simple lesson from the case? The specific language of the statute matters. The bigger lesson? Unless Congress acts, the courts are going to be requiring EPA to take action with respect to GHG emissions under existing CAA authority. 

We’re thus left in the same bind we’ve been in since Waxman-Markey collapsed. EPA does not have the authority that it and the environmental community want and it cannot regulate GHG efficiently. At the same time, EPA does have authority that conservatives wish it did not have. True climate skeptics may never be convinced, but it still seems that a deal should be possible among environmentalists and conservatives who acknowledge the reality of climate change.

Hope springs eternal.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, EPA finalized the Cross-State Air Pollution Rule, or CSAPR, which was the Transport Rule, which had been the Clean Air Interstate Rule. (EPA must have decided that CSAPR results in a more mellifluous acronym.)

The rule is almost too big to describe, except in its broadest terms. EPA has provided a summary of costs and benefits, but even EPA’s summary does not really explain how the rule will be implemented.

The rough numbers at least give some idea of the scope of the rule and the problem it is addressing. EPA estimates that the rule will reduce SO₂ emissions by 73% from 2005 levels starting in 2012 and will reduce NO_x emissions by 54%. These reductions will eliminate more than 10,000 premature deaths annually, according to EPA’s analysis. Total monetized economic benefits are up to $280 billion annually. EPA estimates annual compliance costs to be only $800 million, though that does not include $1.6 billion in annual costs already being incurred to comply with CAIR. Nonetheless, EPA is going to be able to show any court reviewing this rule an extremely favorable cost-benefit analysis.

I’d be shocked if this rule doesn’t survive judicial review, assuming it is challenged. The D.C. Circuit opinion striking down CAIR pretty much told EPA what to do – it has to implement a rule that ensures that each state meets its own emissions limit. EPA has done that, allowing basically free trading within states, and allowing interstate trading – so long as each state lives within its cap. Given the requirements of the Clean Air Act, it’s hard to see how EPA isn’t required – let alone permitted – to issue at least something very like this rule.

The irony is that the Republicans in Congress who oppose all of EPA’s rules – Representative Mike Simpson (R. ID.) called EPA the “scariest agency in the federal government” – had it in their power to allow EPA to regulate in a more cost-effective manner. Three pollutant legislation that would have allowed interstate trading was on the table in 2009 and 2010. It even had some Republican support. However, now the approach seems to be that it’s better to oppose all environmental legislation, even if that includes legislation that would be unambiguously better than what’s on the books today. 

Oh, well.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

For those of you who left early for the holiday weekend (You know who you are – and more power to you!), I thought I would note that EPA issued a final rule on Friday, deferring application of the Tailoring rule to biomass facilities for three years. The deferral responds to a petition from the National Alliance of Forest Owners. NAFO asserted that

there is near-universal recognition that CO2 emitted from combustion of fuels derived from biomass should be excluded from GHG regulations because production and combustion of such fuels do not increase atmospheric CO2 levels. 

Of course, EPA received comment suggesting that this may not uniformly be the case and that “the use of certain types of biomass as fuel could increase atmospheric CO₂ levels.” EPA’s bottom line? 

The net atmospheric impact of biogenic CO₂ emissions is complex enough that further consideration of this important issue is warranted.

EPA did not specifically mention what is known as the Manomet Report, which served as the basis for the decision by Massachusetts not to grant renewable energy credits, or RECs, for many biomass projects. Nonetheless, it remains notable that EPA made the deferral decision in order to avoid putting a major roadblock in the industry’s way, while Massachusetts refuses to call most biomass renewable – thus putting a major roadblock in the industry’s way. 

I understand federalism (I think). I don’t see RGGI and other state or regional GHG regulatory efforts as inconsistent with federal policy and they can provide some useful lessons. However, I don’t see any federalism advantage here. These policies are simply working at cross-purposes in an area where uniformity should certainly be the goal.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As I noted earlier this month, the Supreme Court denied GE’s certiorari petition seeking to challenge the constitutionality of EPA’s use of unilateral administrative orders issued under section 106 of CERCLA. It thus comes as something of a surprise that the Court today accepted a certiorari petition in Sackett v. EPA. The Sackets are appealing a decision by the 9^th Circuit Court of Appeals holding that pre-enforcement review is not available to challenge unilateral administrative orders issued by EPA pursuant to section 319 of the Clean Water Act. Lest anyone think that this is simply the Court reining in that liberal 9^th Circuit, the 9^th Circuit decision followed the lead of all four other circuit courts that have already addressed the question.

So, not only did the Supreme Court grant cert. in a CWA case even though it denied cert. challenging a very similar provision under CERCLA, it did so without a circuit split to resolve.

CERCLA’s order provision does differ slightly from that of the CWA. CERCLA explicitly prohibits pre-enforcement review; the CWA does not. It seemed to me that, while I am firmly on the side of the challengers as to the practical import of unilateral orders, EPA’s legal authority remains fairly solid. As the Court of Appeals noted, even in the absence of a specific statutory prohibition, judicial review is prohibited as long as preclusion “is fairly discernible in the statutory scheme.” Given the distinction between orders and civil enforcement, which is separately provided for in the CWA, and that the CWA does provide for judicial review of civil penalties imposed by EPA, a fair reading of the statute would seem to preclude pre-enforcement review of orders. This conclusion is buttressed by the purpose of the order provision, which is allow EPA to move quickly in particular cases, and the legislative history, which also seems to support preclusion.

The Court’s order granting cert. identified two questions – both the statutory interpretation question and the assertion that a ban on pre-enforcement review violates the due process clause. However, the constitutional claim is precisely what the Court refused to hear in the GE case. Obviously, that is not binding precedent, but why would the Court deny cert. to GE only to grant it three weeks later to the Sacketts?

Whatever the answer, there is a lot riding on this case. Notwithstanding the denial of cert. in the GE case, if the Supreme Court allows pre-enforcement review of orders under the CWA, it will have repercussions beyond the CWA. The CAA order provision would certainly be on shaky ground and, if the Court’s opinion were predicated on constitutional concerns rather than statutory interpretation, CERCLA’s order authority would seem to fail as well.

I should be telling my clients not to get their hopes up, but it's hard not to get one's hopes up.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the Supreme Court announced its decision in American Electric Power v. Connecticut, holding that EPA’s authority to regulate greenhouse gases under the Clean Air Act displaced federal common law nuisance claims. I have always thought that the displacement argument was correct, so the decision is not really a surprise (and the 8-0 decision and crisp opinion only confirm that view). The decision is nonetheless important and, notwithstanding a few limitations, rather sweeping.

The Court’s analysis was straightforward. The creation of federal common law by courts is “unusual” and

[W]hen Congress addresses a question previously governed by a decision rested on federal common law,” the “need for such an unusual exercise of law-making by federal courts disappears.”

Next, displacement of federal common law is not the same as preemption of state law, because there are no federalism issues. Thus, the test for displacement is “simply whether the statute ‘speak[s] directly to [the] question’ at issue.” Therefore, what EPA does in response to the congressional mandate is irrelevant to displacement. It is the CAA that matters. As the court noted, if EPA does not set emission limits, the CAA allows the plaintiffs to petition EPA to do so and EPA’s response to that petition is subject to judicial review. In short,

the relevant question for purposes of displacement is “whether the field has been occupied, not whether it has been occupied in a particular manner.”

The Court also provided a forceful argument for judicial restraint in these kinds of cases:

            It is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order.

The decision did not address whether these or other plaintiffs could bring actions under state nuisance law, but I would not put a lot of money on those cases succeeding. The decision also does not address cases such as Kivilina v. ExxonMobil, in which the plaintiffs do not seek regulation, but only damages. However, I’m skeptical about the survival of those cases as well.

The real question following yesterday’s decision is whether Republicans in Congress will read it carefully. Will they continue to press to eliminate EPA’s authority to regulate greenhouse gases? Doing so would revive public nuisance suits, unless the legislation also barred federal courts from hearing such cases.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This week, in Webster v. USDA, Judge John Bailey of the Northern District of West Virginia rejected a challenge to the Environmental Impact Statement filed for a USDA flood control project. The decision is not particularly startling and does not break new ground, but it does serve as a reminder just how limited judicial review under NEPA is supposed to be – and just how often that limitation is honored only in the breach, by judges who don’t like particular projects or don’t want to be known as the judge who approved a particular project if something later goes wrong.

As Judge Bailey pointed out:

NEPA does not … impose any substantive environmental obligations upon agencies; it “merely prohibits uninformed – rather than unwise – agency action.”

Just to be clear, Judge Bailey was not off on a frolic and detour here; the quoted language is from the Supreme Court decision in Robertson v. Methow Valley Citizens Council. Moreover, in determining whether the agency committed a reversible “clear error of judgment,” the court

must take a holistic view of the agency’s assessment; “[c]ourts may not ‘flyspeck’ an agency’s environmental analysis, looking for any deficiency, no matter how minor.”

How many federal judges have the restraint to reject a challenge to an EIS, where he/she finds the EIS thorough, but is convinced that the project is “unwise”? And how many practitioners have the experience of judges “flyspecking” a holistically sound EIS, looking for some kind of reversible error, because they had some underlying concern about the substance of the project?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After a relatively quiet period, there were a number of items of interest on the air/climate front this week. First, AEP announced that upcoming pollution controls would result in shutting down 6,000 megawatts of coal-fired capacity, or 25% of its coal fleet. AEP also announced that it would spend $6 billion to $8 billion in bringing the rest of its fleet into compliance.

On the flip side of this issue, the Bipartisan Policy Center issued a report concluding that compliance with the various EPA rules in the works (Clean Air Transport Rule, Utility MACT Rule, coal combustion ash rule, Clean Water Act intake structure rule, and NSPS for GHG) would not have a significant impact on electric system reliability. The quick summary is that most of the plants that will close are uncontrolled, older, smaller, plants that already don’t run much, particularly with natural gas prices low. The report acknowledges that some of these small plants are important in addressing peak loads in some areas, but concludes that concerns in those areas can be addressed with appropriate planning.

Next came news that EPA has reached agreement to delay its second round GHG NSPS proposal from July 26, 2011 to September 30, 2011 – though the final rule is still targeted for May 26, 2012. EPA has received extensive comment on this issue and my take is that there is no hidden agenda here; EPA is just trying to take those comments into account and be responsive, where possible.

Finally, former Representative Bob Inglis, whose support for action on climate change was sufficient to get him defeated by a Tea Party Candidate in the GOP primary in 2010, has announced formation of what is described as a “conservative coalition” to address climate change. Money quote:

Conservatives typically are people who try to be cognizant of risk and move to minimize risk. To be told of risk and to consciously decide to disregard it seems to be the opposite of conservative…. What I hope to do is be part of an effort that calls conservatives to return to conservatism and to turn away from the populist rejection of science.

All I can say is that I wish former Representative Inglis the best of luck in that endeavor.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Demand for allowances in the nation's only cap-and-trade program for carbon dioxide emissions fell sharply last week.  At the 12th Quarterly Auction of the Regional Greenhouse Gas Initiative (RGGI), held on June 8th,  70% of the current compliance period allowances went unsold.  As the RGGI Market Monitor Report highlights, with only 25 bidders participating in the auction of the 2009-2011 compliance period allowances, only 30% of the 42 million allowances offered for sale by the 10-state group (including New Jersey) were actually purchased at the floor price of $1.89.  Demand for future allowances, good for the 2012-2014 compliance period, fared only slightly better, with the 5 participants in that auction buying just over 50% of the 1.86 million allowances offered by the still-participating states (minus New Jersey, which supplied allowances for the 2009-2011 auction, but not the 2012-2014 auction) also at the floor price of $1.89.  

This sharp drop in the sale of allowances at auction is surprising, particularly given that the last auction, held in March, sold out of allowances for the first time since Auction #8.  The number of participants who qualified to bid at the March and June auctions did not differ much -- 49 and 47, respectively -- but the number of participants who actually submitted bids fell sharply, from 36 to 25.  An even more significant difference is the number of allowances that each of these bidders bought.  For instance, while the top two bidders in March bought over 10 million allowances each, the top bidders in June bought just 2.6 million and 1.9 million respectively. 

As yesterday's ClimateWire highlighted, theories about the causes of this surprising drop abound.  My favorite is that companies regulated by RGGI already have most of the allowances they will need to cover their emissions in the compliance period ending in December, and these unsold allowances are primarily due to the excess supply under the RGGI cap.  Other theories cite to New Jersey's recent announcement that it would withdraw from the program by the end of the year as a sign to would-be-buyers that the program is threatened.  But New Jersey's break with RGGI will not be as quick as initially reported.  The official letter from New Jersey's Commissioner of the Department of Environmental Protection outlines that the state will continue to participate in the allowance auctions for calendar year 2011, as it did in the June auction last week, and that regulated power plants in New Jersey are not being relieved of their obligation to hold sufficient allowances to cover their emissions in the initial compliance period, which ends on December 31, 2011. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Only this week did I catch up to a letter to HHS Secretary Sebelius by more than 60 members of Congress asking that HHS perform further review of the National Toxicology Program’s 12^th Report on Carcinogens before it is formally released. The specific concern is the conclusion in the draft RoC that styrene is “reasonably anticipated to be a carcinogen.” I readily confess that I don’t know enough about styrene to have a view whether the draft’s conclusion is appropriate. 

According to the Congressional letter, styrene has many important uses, including a number that contribute to environmental protection. I’ll plead ignorance on the benefits of styrene, as well as the risks. 

What I do know is that the structure of environmental regulation in the United States causes these debates to be fought out in the wrong arena, over the wrong questions. The problem is that we have basically an all or nothing approach to chemical regulation in the United States. If something is toxic or carcinogenic, it gets lumped in with all other compounds that are toxic or carcinogenic, and regulated without regard to its benefits. One result is that those who want to use the substance are forced to make gatekeeping arguments to keep the compounds out of the system altogether.

Wouldn’t it make more sense to have a regulatory system that took into account the benefits of substances in determining how they are regulated? I want to be clear that I am not suggesting that economically valuable compounds should be given a regulatory pass, but a system that is not capable of incorporating the value of substances being regulated is inherently flawed. In fact, a system which considered the benefits of compounds in their regulation could in some cases result in more stringent regulation – even if a compound is of only marginal risk, if it provides no benefit as compared to safer alternatives, I would be perfectly happy to see such compounds regulated out of existence.

Regulatory agencies have no choice; they have to regulate under uncertainty. On many compounds, we are not going to be certain how significant the risk may be. Let’s remember that the lead industry fought the phase-out of leaded gasoline, arguing that the risks had not been clearly established. That being the case, the agencies are going to have to make judgments, such as whether styrene is “reasonably anticipated to be a carcinogen.” Moreover, I think it is appropriate that the agencies’ scientific judgments be given some level of deference by courts. 

Let’s have the debate where it belongs. If styrene is reasonably anticipated to cause cancer, what are its benefits and, given those benefits, what level of regulation is appropriate?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As much as I’ve always found EPA’s use of unilateral administrative orders under Section 106 of CERCLA to be offensive, I still expected EPA’s authority to withstand challenge. As I noted previously, not every law that is unfair is unconstitutional. At least for now, the issue has probably been laid to rest. Yesterday, the Supreme Court denied GE’s petition for certiorari seeking to appeal the D.C. Circuit’s rejection of its claim that EPA’s exercise of its unilateral order authority is unconstitutional. 

CERCLA has been constitutional for almost as long as Francisco Franco has been dead – and they’re both likely to remain that way.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The uncertain and often lengthy time to get permitting decisions is always near the top of the list of industry complaints. Section 165 of the Clean Air Act provides some relief by requiring certain permit decisions to be made within one year. Last week, in Avenal Power Center v. EPA, District Judge Richard Leon, in what may comfortably be described as a strongly-worded opinion, held that EPA may not circumvent the one-year limit on permit decisions by carving out from the one-year period the time spent by the Environmental Appeals Board reviewing EPA’s permit decision. 

In March 2008, Avenal Power filed an application for a PSD permit necessary to construct a new gas-fired power plant in the San Joaquin Valley in California. When EPA had not issued a decision within two years, Avenal sued. In February 2011, Gina McCarthy, head of EPA’s air office, announced that EPA would issue a permit decision by May 27, 2011. However, Judge Leon found EPA’s commitment to be “disingenuous,” because EPA's permit decision would be subject to EAB review, and EPA acknowledged that EAB review could take 6-18 months.

Judge Leon’s analysis was, in keeping with the statutory language, quite simple. Section 165 requires permit decisions within one year. EPA’s decision to provide appeals of permits to the EAB is a creature of regulation, not statute. The notion that EPA’s regulatory process could trump the statutory requirements is, to Judge Leon, “absurd.”

It is axiomatic that an act of Congress that is patently clear and unambiguous - such as this requirement in the CAA - cannot be overridden by a regulatory process created for the convenience of an Administrator, no matter how much notice and comment preceded its creation. "The rulemaking power granted to an administrative agency charged with the administration of a federal statute is not the power to make law. Rather it is the power to adopt regulations to carry into effect the will of Congress as expressed by the statute."

EPA apparently tried to persuade the court that section 165 is sufficiently ambiguous to give EPA discretion regarding whether it must squeeze the EAB process into the one-year time frame. Judge Leon’s response to what he called EPA’s “self-serving misinterpretation of Congress’s mandate”?

"Horsefeathers!"

One parochial note for my Massachusetts readers: Massachusetts DEP has recently announced that its permits – although labeled as “Final” – are not final until DEP's own internal adjudicatory hearing process has been completed. Massachusetts law has nothing comparable to Section 165 of the CAA, so MassDEP’s interpretation adds the insult of delay inherent in adjudicatory proceedings to the injury caused by the length of the normal permit process..

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When President Obama issued Executive Order 13,563, on Improving Regulation and Regulatory Review, it was not obvious whether the Order was simply an attempt to protect the President’s right flank or whether the agencies would respond substantively. Yesterday, EPA released its Preliminary Plan for Periodic Retrospective Reviews of Existing Regulations. Initial review of the Plan suggests that EPA has taken the task seriously and has made some constructive suggestions. To me, however, they missed the elephant in the room and therefore cannot be given better than a B grade at this point.

There is a lot of good stuff in the plan, which is certainly too long to summarize here. The highlights from where I sit include the following:

• Increased use of electronic reporting. This falls in the category of “now why didn’t I think of that?” Telling point? EPA has put use of e-manifests under RCRA in the long-term action, rather than early action, category, while acknowledging that this was proposed in 2004. How hard is some of this stuff?

• Improved transparency, i.e., increased public disclosure of compliance and other regulatory information. Cynical translation? If we can provide more information to the public, citizen suits will be easier and we can do less government enforcement. Still, hard to argue with.

• Coordination of emission reduction regulations across multiple pollutants. Interestingly, EPA has put this in the early action category. Although EPA identified the pulp and paper industry specifically, this has to be thought of mainly as a longer-term project. Well worth it, however long it takes.

• Encouraging innovative technology. Who could be against it? This is probably the most important issue, precisely because it is here that the Plan is the weakest. I think that EPA has largely missed the point, because it has not correctly defined the problem. The single action EPA could take that would have the most impact on encouraging innovative technology would be to get out of the command and control business once and for all. The highest priority of this regulatory review should be for EPA to identify areas where it can move from command and control regulation to performance-based standards. A fruitful initial target? CERCLA and the NCP. EPA does not have to privatize Superfund cleanups as several states have done; that would require legislation. Even without privatization, it could simply set standards for what constitutes a significant risk and require PRPs to eliminate such risks. I promise, innovation will follow. Not only that, but EPA could eliminate a significant percentage of its existing CERCLA staff, or redirect that staff to more productive uses. 

EPA is taking comment on the proposed plan, at least through June 27, 2011. Get your comments in here. I am the eternal optimist, though the 7-year delay in implementing an e-manifest program should probably give me some pause as to how quickly EPA can really reform.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In an interesting decision issued late last week in Industrial Communications and Electronics v. Town of Alton, the First Circuit Court of Appeals held that private citizens who had intervened to defend a local zoning limit on cell tower height could continue to do so, notwithstanding that the cell tower provider and the municipal defendant were prepared to settle the case. 

Industrial Communications sought to build a 120’ cell tower in Alton, New Hampshire. The Local zoning by-law would have limited the tower to 71’. The Town’s Zoning Board denied a variance. Industrial Communications did not appeal the denial. Instead, it sued in federal court, seeking to take advantage of the preemption provisions of the Telecommunications Act of 1996. Nearby residents, the Slades, intervened as defendants in the federal action.  

After initially defending the case, the Town negotiated a settlement with Industrial Communications that would allow a 100’ tower. The District Court concluded that, where the original defendant was no longer defending the case, the Slades had no rights themselves to continue to defend the denial of the variance. 

The Court of Appeals noted that the Slades could not compel the Town to continue to defend the denial of the zoning variance. “A government entity is free as a defendant to decline to defend or settle on the best terms it can get.” However, the Court noted, intervenors can usually continue to litigate, as long as they have Article III standing. The Slades alleged that a taller tower would impair their views and cause both economic and aesthetic harm. 

Thus, the court had to balance the rights of parties to settle a case with the rights of the intervenors to continue to litigate. To the Court, the determining factor was that the Slades

have a legal interest under state law in the protection that the zoning laws afford to their property; specifically, they could sue in state court to overturn the variance if it were granted unlawfully…. What is at issue here is not merely a private settlement … but, by virtue of the court’s adoption and entry of a consent decree, a legally operative judgment that overrides state law and the Slades’ rights under state law that would prevail unless overridden by the decree. Given that Article III requisites are established, the Slades are entitled to resist the entry of a decree that terminates their protectable rights unless a violation of the Act is proven.

While Industrial Communications alleged that the denial of the variance violated the Telecommunications Act, the District Court never made a finding to that effect – once it approved the settlement, the court thought that no such findings were necessary. The Court of Appeals therefore remanded the case, giving the plaintiff an opportunity to prove a violation and the Slades an opportunity to deny it.

Although the provisions of the Telecommunications Act may be unusual, cases of federal preemption of state and local environmental laws are not. Industrial Communications makes clear that, even where a state or municipality does not want to defend the local law or regulation, individual citizens who can establish standing may have a right to do so themselves.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Late last week, the Massachusetts Department of Energy Resources (DOER) filed with the Joint Committee on Telecommunications, Utilities, and Energy of the state legislature proposed final amendments to the Renewable Portfolio Standard (RPS) regulations governing the eligibility of woody biomass facilities and fuels to qualify to earn renewable energy credits (RECs).  DOER originally issued a draft of these regulations in September 2010, and made revisions after receiving written comments and holding 2 public hearings.  In addition to the revised regulations, DOER issued a regulatory package containing two sets of guidance in the forms of Excel spreadsheets, the Guideline for the Calculation of Overall Efficiency and Lifecycle GHG Analysis and the Guideline for the Determination of Forest Derived Eligible Biomass Woody Fuel. The Joint Committee has 30 days to review the rules and submit its comments to DOER for additional review. DOER hopes to promulgate the final rules early this summer.

At a time when the EPA appears to be favoring biomass a fuel (with actions like exempting it from the tailoring rule for 3 years), Massachusetts is making it very difficult to qualify “electricity only” biomass as renewable and eligible for RECs, as the rules strongly favor combined heat and power uses.   While the proposed changes to the regulation do not ban the development of biomass facilities in Massachusetts, they do set a very high bar to qualify for renewable energy credits under the RPS – so high that many believe that large scale biomass units may not be viable absent significant technological advances. Under the regulation, the term Eligible Biomass Fuel will include things like woody pellets, agricultural waste and by-products, food or vegetative material, algae and biogases, but officially excludes Construction and Demolition Waste.

Eligible Biomass Woody Fuel, the largest subset of eligible fuels, is now limited to forest-derived residues from timber operations, limited thinnings and invasive growth; forest salvage from storms or pest infestations; non-forest derived residues from lumber mills and woodworking shops, trees removed in converting forests to agricultural, residential or commercial uses (so long as all other permits have been obtained), yard wastes, and maintenance of parks and rights of way. The final category of Eligible Biomass Woody Fuel is “dedicated energy crops” which includes wood (but not cellulosic fuel) that has been purposefully grown to produce fuel, but contains a remarkably broad restriction that the trees may not have been grown in a place that “sequestered significant amounts of carbon” such as a forest, or on land that has the potential to support crops grown for human consumption as food. 

Biomass units are required to provide to DOER in their applications a lifecycle analysis of greenhouse gas emissions (GHG) and demonstrate emission reductions of at least 50% over 20 years compared to a new, combined-cycle natural gas generator using the most efficient commercially available technology. DOER will provide a standard analytical methodology in another set of guidance to accompany the Statement of Qualification Application. Under both the proposed regulations and Guidance #1 on GHG lifecycle analysis, facilities must account for direct emissions from production of the fuel stock and delivery to the biomass facility, as well as indirect emissions from land use changes, and temporal changes in forest carbon sequestration and emissions resulting from biomass harvests, regrowth, and avoided decomposition.

One new provision added since the September draft requires that the amount of forest-derived biomass material eligible to be removed be limited based on soil types and as set forth in Guidance #2 on Forest-Derived Fuel.  The regulation and guidance set a cap by percentage of weight of the total amount of material harvested from the site, ranging from zero (for very poor quality soils) to 40% (for highly productive soils) – the rest of the biomass harvested must be left in the forest for soil nutrient retention. To effectuate this requirement, foresters will have to develop a soil map for each harvest area and determine the maximum eligible biomass tonnage that can be removed. The September draft had set this cap at 15% across the board.

Both the September draft and this week’s proposed final rules require that biomass units meet a minimum overall efficiency rate of 40%, determined based on the biomass input heat content of the fuel, and accounting for GHG emissions associated with fuel refining and processing.  If operating at that level of efficiency, the unit will receive one-half REC for each MWh of generation. Units operating at an overall efficiency of 60% and above would receive a whole REC credit for each MWh they generate, and units between 40 and 60% would receive a proportional fraction of a REC.

Under the revised regulations, electricity generated by a unit that is used on-site (“behind-the-meter”) is included in the calculations of the unit’s overall efficiency. “Merchantable bio-products” (chemicals like additives and lubricants) created from the woody fuels at an on-site bio-refinery will also be netted out in calculating overall efficiency.  Finally, and perhaps most significantly, productive use of the large quantities of heat generated by the biomass facilities, so long as it falls within the defined term “useful thermal energy” under the regulation, will also be included in the overall efficiency calculation.  However, the revised regulation clarifies that any thermal energy used to dry or refine green woody biomass for use as a fuel will not count towards overall efficiency.  

Biomass generating units that have already secured their Statement of Qualifications will also have to demonstrate compliance with the new regulation. They must prove use of Eligible Biomass Woody Fuel by 2013, and comply with all provisions, including the requirement for overall efficiency, by 2015.

 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Anyone who does development knows the subtle and not-so-subtle quid pro quos that are sometimes exacted by local planning boards. In Massachusetts, a decision issued on Tuesday by the Appeals Court has emphasized that there are limits to what planning boards may require in return for approval of subdivision plans. 

In Collings v. Planning Board of Stow, the developer was seeking to build a subdivision that included a 1,300 foot street ending in a cul-de-sac (known, with more directness, simply as dead-ends when I grew up in New Jersey). The Stow by-law limits cul-de-sacs to 500 feet, but provides that waivers can be granted. The Planning Board granted the requested waiver, but made it subject to a requirement that the developer devote at least 10% of the subdivision land to open space. Moreover, the Board required that the land be offered to the Town’s Conservation Commission or a land trust.

As plaintiffs noted, Massachusetts law prohibits, as a condition of approval of a subdivision, a requirement to dedicate land to the public use “without just compensation.” The Board ignored this provision. The Land Court actually did address it, but found that a quid pro quo is acceptable. In other words, dedication of land without just compensation is ok, so long as there is consideration, i.e., the developer got a waiver he was not otherwise entitled to obtain.

Not so, said the Appeals Court. To the appeals court, waivers may only be conditioned on requirements that go to the purpose behind the underlying requirement. The purpose of the limitation on cul-de-sacs is to address public safety concerns, particularly related to access for fire fighting vehicles. Thus, the Board requirement to install sprinklers in all of the subdivision houses was reasonable. The open space requirement, on the other hand, was “inconsistent with the intent and purpose of the subdivision control law.” 

The Court acknowledged the bargaining that takes place between developers and towns.

While it may be true that the subdivision control process … doubtless often involves negotiation between the developer and the town, the power of a planning board is limited to the authority “clearly and specifically given by the statute.”

The bottom line?

That waivers from some of the subdivision rules and regulations are required does not authorize a planning board to exact conditions expressly prohibited by § 81Q, and unrelated to the regulation sought to be waived….

Finally, the court emphasized that towns may not use these types of requirements to circumvent the eminent domain process, which is the constitutionally required means of taking private property:

We cannot resist the conclusion that, however worthy the objectives, the conditions imposed attempt to achieve a result which properly should be the subject of eminent domain.”

Will Collings prevent municipalities from overreaching in the future? Unlikely. Most developers know that they need to get along with planning boards. Nonetheless, it’s nice to know that there are some limits.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

New MassDEP Commissioner Ken Kimmell has launched a regulatory reform effort at DEP. As everyone knows, Ken did an outstanding job as EEA General Counsel and I expect he will be an outstanding DEP Commissioner. I hope he succeeds and I fully support the regulatory reform initiative. However, he does have one major problem – his staff, other than his senior staff, doesn’t believe in it. Street level bureaucracy is not an abstract intellectual concept; it’s something the regulated community deals with every day. When the Commissioner starts rolling out reform initiatives, even if they are protective of the environment, will his staff be on board? I’m skeptical, as everyone who represents clients before DEP has reason to be.

For today’s cautionary tale about how DEP really operates, I’m going to have to disguise a few facts in order to protect the innocent; reprisals against my clients are not good for business. However, here are the basics.  The client has a 21E site, a state superfund site. They are operating a small treatment system in a residence to ensure that the residence is not impacted by a source area plume. The site has a temporary solution and as recently as 2008 DEP agreed that the site posed no significant risk. Notwithstanding the review in 2008 and the absence of any changes since then, DEP conducted an audit in 2011.

The treatment system off-gases small amounts of VOCs. DEP guidance – argh, guidance alert – states that off-gas treatment is not required if emissions of VOCs will be less than 100 pounds per year. Analysis of site data indicates that the system here releases less than a tenth of a pound per year – less than a thousandth of the threshold.  DEP’s response? They still want an assessment of the potential risks associated with emissions from the treatment system. The results? Both the non-carcinogenic Hazard Index and the carcinogenic excess lifetime cancer risk are more than four orders of magnitude – that’s a factor of 10,000 – below the no significant risk threshold. 

I love anecdotes; it’s one of the beautiful freedoms of blogging that we get to pick and choose our data. However, I am quite confident that every one of my readers in the private sector will have at least five stories of their own that are equally horrific. Moreover, while this is just one story, it does exemplify several aspects of the street level bureaucracy problem.

Guidance only works one way. Regulated entities are bound by it, but the agency feels free to require additional work, even if what the regulated party has done complies with the guidance.

MassDEP employees don’t trust their own system. Even though there was no hint of a risk here, the agency just couldn’t quite believe it. They are so concerned about being blamed for false negatives that they will do anything to eliminate them, regardless of the cost of false positives or the cost of the additional work that they require.

Which brings me to the last problem – DEP routinely assigns a value of $0 to costs that will be borne by the regulated community. Why not require a little more testing in order to provide an extra level of comfort that things are really, really, really, really (one “really” for each order of magnitude) safe?

Until these issues are addressed – and doing so in the face of civil service requirements is a Sisyphean task – regulatory reform is something of a quixotic ideal – though one still worth pursuing.

Good luck, Ken.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I posted recently that EPA actually seems to be listening to comments from the regulated community and has changed course in some cases in response to those comments. The release by EPA and the Army Corps yesterday of their long-awaited revised guidance implementing the Supreme Court’s Rapanos decision confirms that EPA is in listening mode. Although I am not normally a fan, this new version seems an appropriate use of guidance.

First, it is not a unilateral effort to expand agency jurisdiction. Instead, it responds to the Supreme Court Rapanos decision. Given the lack of a majority decision, Rapanos certainly left both regulators and the regulated community scratching their heads. Moreover, although one of my concerns about guidance is that it can ossify, that is not the case here. The new guidance replaces EPA’s prior Rapanos guidance, issued in 2008.  EPA is entitled to conclude that the prior guidance did not accurately reflect the limits of CWA jurisdiction after Rapanos.

Significantly, in response to substantial pre-issuance pressure to shelve the guidance and instead pursue notice and comment rulemaking, EPA and the Corps have agreed both to take comment on this guidance and to undertake formal rulemaking. Thus, the guidance will serve only to clarify EPA’s and the Corps’ current interpretation pending issuance of a rule.                                                         

On the merits, the guidance seems to be a reasonable interpretation of Rapanos. Everyone knows that Justice Kennedy’s “significant nexus” test is not a model of clarity – that’s why guidance is appropriate. Regulated industries benefit from greater clarity – even if more wetlands will be found to be jurisdictional – because uncertainty imposes its own costs. While the American Farm Bureau Federation has already complained about the new guidance, I think we need to distinguish between complaints about the guidance per se and complaints which really go to the scope of the CWA itself. 

If the guidance itself is too long for you, EPA has provided a useful summary. The summary of the summary? The following waters are protected by the Clean Water Act:

• Traditional navigable waters
• Interstate waters
• Wetlands adjacent to either traditional navigable waters or interstate waters
• Non-navigable tributaries to traditional navigable waters that are relatively permanent, meaning they contain water at least seasonally
• Wetlands that directly abut relatively permanent waters

In addition, the following waters are protected by the Clean Water Act if a fact-specific analysis determines they have a "significant nexus" to a traditional navigable water or interstate water:

• Tributaries to traditional navigable waters or interstate waters
• Wetlands adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters
• Waters that fall under the "other waters" category of the regulations. The guidance divides these waters into two categories, those that are physically proximate to other jurisdictional waters and those that are not, and discusses how each category should be evaluated.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

For those of you who thought that the sky was about to fall in EPA as part of the budget battle, I’m able to report that EPA survived sufficiently intact to continue to issue new rules. Today, EPA proposed a draft revised construction general permit, or CGP, for stormwater discharges from construction sites disturbing at least one acre (or less, if the project is part of a common development plan that is greater than one acre). The revised CGP would replace the current CGP which is set to expire on June 30. EPA has proposed to extend the current CGP through January 31, 2012, in order to give it time to promulgate the new CGP in final form. 

The revised CGP does make some changes. The most notable changes, summarized in EPA's Q&A on the proposal, are intended to incorporate into the CGP the provisions of EPA’s February 2010 effluent limitations guidelines rule, known as the C&D rule. These changes include new requirements concerning:

Sediment and erosion controls

Soil stabilization

Pollution prevention

Inspections

Stormwater pollution prevention plans (SWPPPs)

Buffer zones

The buffer zone requirement was included in the C&D rule, but EPA is now proposing to add significant flesh to the bones. Specifically, the rule would require a minimum fifty-foot buffer between the construction site and any waters of the United States which are located either on or immediately adjacent to the site. The rule would provide flexibility to allow the permittee to substitute additional sediment and erosion controls for some or all of the buffer, so long as the controls “achieve the equivalent sediment load reduction as an undisturbed naturally vegetated, 50-foot buffer.”

For my Massachusetts readers, the 50-foot buffer will seem very similar to the buffer zone already required under the MA Wetlands Protection Act regulations. The jurisdictional scope of the CGP will not be identical to Wetlands Act jurisdiction, but they should be fairly similar.

Comments on the proposed rule will be due 60 days following Federal Register publication.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Anyone who has ever tried to challenge a regulation in Massachusetts knows that it is an uphill battle. Just how tilted the playing field is was reinforced late last month in the decision in Pepin v. Division of Fisheries and Wildlife, rejecting a challenge to DFW’s “priority habitat” regulations. The case involves the Eastern Box Turtle, perhaps the most common of state-listed species.

As our Massachusetts readers know, MESA is similar to, but has some significant differences from, the federal ESA. Fundamentally, MESA prohibits taking “endangered” or “threatened” species or species “of special concern.” The statute provides for a rather cumbersome process by which DFW may designate “significant habitat" in order to protect listed species. Whether it is because the process is too cumbersome, or whether it is because the statute provides that property owners may petition for compensation resulting from a taking of their property following designation of significant habitat, DFW simply doesn’t utilize the process.

Instead, DFW has created regulations concerning “priority habitat,” a term not found in the statute. The priority habitat regulations provide somewhat more flexibility and, importantly, do not have a procedure for compensating landowners for regulatory takings. After part of his property was designated as priority habitat, Pepin sued DFW, claiming that the priority habitat regulations were beyond DFW’s authority under MESA. 

Judge Sweeney of the Land Court was having none of it. First, she noted that MESA gives DFW residual authority to promulgate “any regulations necessary to implement the provisions of this chapter.” Moreover, the statute does not preclude DFW from establishing a second category of protected habitat.  With that as background, Justice Sweeney rehearsed the litany of cases with which Massachusetts lawyers are all too familiar. 

The party challenging the validity of an agency’s regulations bears a formidable burden. This Court gives substantial deference to the agency’s expertise and statutory interpretation, applies all presumptions in favor of the validity of administration action, and declares a regulation void only if its provisions cannot by any reasonable construction be interpreted in harmony with the legislative mandate. 

Given this case law, it is not surprising that Judge Sweeney concluded that MESA does not unambiguously prohibit the priority habitat regulations and that the regulations are consistent with legislative intent. 

Of course, the priority habitat regulations do effectively make a nullity of the MESA provisions regarding significant habitat, but what’s a little nullity among friends. Heads the agency wins; tails the regulated industry loses. What’s new?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I’m beginning to feel like a broken record, but the drumbeat of the anti-guidance crowd is not letting up. Earlier this week, the Waters Advocacy Coalition, which is a group of farm and industry trade groups, sent a letter to EPA and the Army Corps of Engineers, requesting that EPA and the Corps withdraw their plan to issue further guidance on the interpretation of “navigable waters” post-Rapanos. It’s not surprising that this group would oppose the guidance. What is most interesting – and persuasive – about the letter, though, is this quote from the draft guidance itself:

the agencies expect that the number of waters found to be subject to the CWA jurisdiction will increase significantly compared to practices under the 2003 SWANCC guidance and the 2008 Rapanos guidance.

To me, it would seem a defining characteristic of guidance that it not alter the jurisdictional scope of laws and regulations. That’s what laws and regulations are for. Guidance, on the other hand, to the extent is does have a role, is to guide those affected by regulation, to assist them in their understanding of legal requirements – not to change the scope of those requirements. I think that, by inclusion of this sentence in the draft guidance, EPA and the Corps have made the strongest possible argument against issuing the guidance. 

Perhaps even more notable was the resolution passed last week by the Environmental Council of the States objecting to EPA’s use of interim guidance and rules. Specifically, the resolution states that

EPA should minimize the use of interim guidance, interim rules, draft policy and reinterpretation policy and eliminate the practice of directing its regional or national program managers to require compliance by states with the same in implementation of delegated programs.

EPA should not use its objection authority when based entirely or in part on interim guidance, interim rules, draft policy or reinterpretation policy.

ECOS, of course, is generally on EPA’s side of the fence. The resolution is powerful evidence that EPA’s use of guidance is not simply to facilitate understanding of applicable laws and regulations, but as a substitute for the regulatory process itself – as a way to impose new binding rules.

Taken together, the ECOS resolution and the text of the proposed revision to the post-Rapanos guidance make a compelling case that EPA’s use of guidance has strayed far from true guidance and is in fact often an end-run around the regulatory process.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this week, EPA announced its long-awaited revised proposal for a cooling water intake structure rule for existing facilities. Praise is much less interesting than criticism, and thus less conducive to entertaining blog posts, but I’m afraid EPA has left me no choice. Within the confines of what the Clean Water Act requires, EPA seems to have gotten this one pretty much right.

EPA has a useful summary of the rule here. I could certainly quarrel with aspects of the rule, but the basic structure makes sense. It applies to facilities that take at least 25% of their water from an adjacent waterbody and use more than 2MGD/day. Limits are imposed on total fish impingement, though facilities can meet an alternative standard by limiting approach velocity to 0.5 feet per second. EPA has gotten out of the command and control business, at least for existing units. Facilities that withdraw at least 125 MGD would have to perform studies leading to site-specific standards to address entrainment concerns.  Finally, new units that increase generating capacity would be have to used close-cycle cooling (or something equivalent).

One measure of EPA’s success here may be that environmental NGOs are already criticizing the proposal because, instead of setting immovable national standards, the rule would give too much discretion to state permitting authorities. 

It really is worth noting that the 316(b) proposal is only one of several in which EPA has listened to the concerns of industry and revised rules or proposed rules in response to those concerns. First, EPA revised its proposed Tailoring Rule to raise the jurisdictional thresholds to exclude additional smaller sources. Then, it revised the boiler rule in response to concerns that its original proposal really wasn’t feasible. Now, it has avoided a one size fits all rule for CWIS, allowing site-specific factors to come into play. 

Just so I don’t lose all my credibility with my clients, I must note that there remain areas in which EPA seems completely tone-deaf regarding reasonable regulatory reforms. The last bastion of soviet-style command and control known as the Superfund program certainly springs to mind. However, while I doubt EPA will get much credit for it, it is only fair to acknowledge that there does seem to be at least something of a pattern unfolding here. Whether this is really a change in EPA’s DNA or whether it is simply a response to current political realities, only time will tell. Whatever the cause, it’s certainly welcome.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

I’ve spent a lot time in this space arguing for increased use of cost-benefit analysis and cost-effectiveness analysis before environmental regulations are promulgated. As difficult as it can be, there’s simply no avoiding it. If we don’t do so explicitly, we do so implicitly – and I vote for explicitness, every time.

The opposition to cost-benefit analysis usually comes from the left, based on concerns that the cost-benefit requirement will hamstring regulators and that the benefits will be understated. The right is normally seen as a fan of cost-benefit analysis.  Now, however, the notion of cost-benefit analysis is being challenged from the right – though I doubt that they would acknowledge it. North Carolina has just passed a law prohibiting until July 1, 2012 promulgation of new regulations that would cost more than $500,000, unless they either result from “a serious and unforeseen threat to the public health, safety, or welfare,” or they are required by federal or state statute or federal regulation. 

Do the North Carolina legislature and Governor Perdue realize that they have just said that cost-benefit analysis doesn’t matter? We don’t want any new regulations if they cost $500,001, even if they have $10 million in benefits? My economist friends must be going nuts, though at least the scorn heaped upon them is now equally balanced on the right and left.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

The issue of guidance v. regulation has been in the news a lot recently. Recently, the anti-guidance side got what some might consider unwelcome assistance from John Graham, who reviewed regulations in the Bush White House. Graham was quoted as saying that:

The whole idea of guidance not being a rule -- there has to be an arrow shot right through the heart of that. [Congress should pass legislation] to make sure that things that look like a duck and quack like a duck are a duck.

Of course, I agree with John Graham about guidance. The only problem is that most observers think that Graham would like to put an arrow through the heart of the real ducks as well. It’s one thing to oppose guidance, because guidance is almost always an effort to impose further regulations without the protections inherent in the regulatory process. It’s another matterif you oppose the regulatory process as well.

Regulations masquerading as guidance? I’m opposed. Regulations imposed that aren’t as cost-effective as they could be? Let’s do better. Throw out the baby with the bathwater? Probably not a good idea.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If anyone had any doubts about the significance of the conventional pollutant regulations that EPA would be rolling out, even in the absence of a full cap-and-trade program for GHG, Wednesday’s release of EPA’s revised power plant MACT proposal should go a long way towards eliminating those doubts. As most readers know, the rule replaces the Bush-era MACT rule that would have created a trading program.

The rule poses a problem for critics of EPA. While arguments can be made about the feasibility of some of the standards and the cost to comply, they cannot credibly allege that it is a back-door effort to regulate coal out of existence. The rule is required by statute and the courts already rejected EPA’s attempt to implement a trading program for mercury.

Apparently, EPA acknowledges that this rule will result in the shut-down of approximately 10 GW of coal-fired capacity, though EPA is taking the position that most of that capacity would shut down for other reasons.

As to substance, the rule is too long – the currently available version weighs in at 946 pages – to describe here. EPA has a reasonably helpful summary, though it doesn’t describe the actual standards. Suffice it to say that, given the absence of a trading program, and the imposition of very low emission standards for mercury and PM (or non-mercury metals), control technology will be necessary to comply with the standards. I don’t think that there’s any such thing as low mercury or low PM coal. The days of uncontrolled coal units are coming to an end.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last month, in discussing the Administration’s brief in the American Electric Power case, I praised the nuanced and persuasive approach that the Administration took in seeking reversal of the 2^nd Circuit opinion allowing the states' public nuisance climate litigation to go forward. The states seeking to prosecute the law suit have now filed their brief and it turns out that they also do nuance. I still think that the Supreme Court will reverse, however.

I’m not going to get into the standing issue. I don't believe that the states should have standing, but it’s not obvious, given the result in Massachusetts v. EPA, that the Supreme Court will agree.

I find the displacement issue more interesting. The 2^nd Circuit held that the Clean Air Act had not displaced federal common law, because EPA wasn’t actually regulating GHG. Of course, EPA has reversed course and, at least until the GOP in the House has its way, it does now regulate GHG under the CAA. As a result, as the Administration put it in its brief:

Although EPA has not yet done precisely what plaintiffs demand here…, that is not the relevant test. … The question is whether the field has been occupied, not whether it has been occupied in a particular manner.

The plaintiff states disagree. In what is probably a shrewd concession, the states acknowledge that, were EPA to issue new source performance standards for GHG, such standards would displace federal common law, because, while they would not directly subject existing facilities to controls, they would lead to follow-on regulation by EPA requiring states to impose GHG standards on existing plants. Until existing plants are regulated, according to the states, common law has not been displaced. Thus, the states argue, the Supreme Court should either affirm the 2^nd Circuit or simply dismiss the appeal – the states further acknowledge that, on remand, the District Court could reasonably stay the nuisance case to see if EPA in fact issues NSPS for GHG.

Shrewd and nuanced, but I’m still not buying it. I think that once EPA’s GHG regulatory program came into effect, federal common law was displaced. Of course, I don’t get a vote, so we’ll have to wait for the Supreme Court to decide the case.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

While EPA remains under attack by the GOP-majority House, that doesn’t mean that coal is off the hook. To the contrary, coal remains under attack itself. A number of recent stories demonstrate the multi-pronged effort by those who want to reduce or eliminate use of coal. For example, the Environmental Integrity Project and two Texas-based NGOs just filed suit against the Lower Colorado River Authority's Fayette Power Project, alleging violations of NSR/PSD requirements and exceedances of particulate limits in the plant’s permit. There is no doubt that there is a concerted effort by NGOs to make life difficult for coal. Thus, even if Congress succeeds in muzzling EPA to some extent, citizen suits will only proliferate, unless Congress also amends the CAA and other environmental statutes to eliminate citizen suit provisions.

Next up? A report that TransAlta Corp. has reached an agreement with the State of Washington to shut down Washington’s last coal-fired power plant. The agreement gives TransAlta until 2020 and 2025, respectively, to shut the two boilers at the plant. The story serves as a reminder that, even aside from NGOs, some states are looking to phase out coal-fired generation.

Let’s not forget that coal mining is under attack as well. Here too, notwithstanding Congressional efforts to protect coal mining, NGOs remain active. Daily Environment just reported that a federal judge issued a temporary restraining order against Highland Mining Co., ordering it to stop work on its 635-acre Reylas Surface Mine in Logan County, West Virginia. The suit alleges violations of NEPA and § 404 of the CWA.

Finally, we have the economic side of the issue. One factor coal has always had on its side – until recently – was its cost advantage over natural gas. With that cost difference eroded, simple economics may do what years of environmental enforcement couldn’t. Thus we have John Rowe of Excelon, which, of course, has almost no coal assets, asserting that EPA regulation will not kill coal, but only drive out old, inefficient plants. Heck, we even have the Wall Street Journal asking whether coal is “The Energy of the Past.”

Time will tell, but it is at least plain that the current GOP ascendancy has not solved all of coal’s problems.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

With cap and trade legislation dead in Congress, and the EPA's greenhouse gas regulations under siege in both the legislature and the courts, the Obama Administration is doing just about the only thing left to address climate change: adapt.

Actually, the science indicates that adaptation will be necessary regardless of how aggressively we are able to reduce greenhouse gas emissions. It’s only a matter of how much adaptation. A recent report by the U.S. Global Change Research Program found that the average air temperature in the continental U.S. has already risen by more than 2ºF over the last 50 years, a trend that is expected to continue. Impacts will include more frequent heat waves and high-intensity precipitation events, more prolonged droughts, and sea level rise, among other changes. Many sectors of the U.S. economy – and many aspects of the federal government – will be affected. To take just a couple of the most obvious examples, the U.S. Department of Interior owns one-fifth of the land in the country and 35,000 miles of coastline, making adaptation a critical aspect of its long-term management strategies. The Department of Health and Human Services must prepare for new health threats related to heat waves, changes in disease vectors etc.

In order to guide federal agencies in addressing these adaptation needs, the White House Council on Environmental Quality released Implementing Instructions for Federal Agency Climate Change Adaptation Planning on Friday. In short, these instructions require agencies to analyze their vulnerabilities to climate change and to develop an adaptation plan by mid-2012 which address impacts on “Federal services, operations, programs and assets.”  

A key question for many readers of this blog is whether these agency adaptation plans will translate into new federal regulation. While it is too early to tell exactly what form the plans will take, federal adaptation activities already underway mostly involve research, efforts to protect government property (e.g. National Parks), infrastructure (e.g. federal highways, levees), and services (e.g. hydropower generation, disaster relief) or outreach to support local adaptation efforts. A good summary of these ongoing activities is provided in a recent Pew Center report. 

On the other hand, it’s hard to imagine that this planning won’t ultimately result in some regulatory changes. For example, research on changing species distributions (see, for example, the Forest Service “Climate Change Bird Atlas”) is likely to have implications for regulation under the Endangered Species Act. Air and water standards intended to protect human health and ecological criteria can also be expected to shift to take climate change into account. For example, EPA’s water program has already developed a climate change response strategy which includes a mandate to evaluate effluent guidelines “to determine NPDES permitting needs and assess the need for new or revised technology-based performance standards.” Thus, the more adaptation that is required, the more the burden of compliance with this new type of “climate regulation” will fall to property owners, operators of industrial facilities, and others. Especially if the Obama Administration’s efforts to mandate reductions of greenhouse gas emissions at their source continue to be thwarted, it should get interesting when the voices of this new regulated community begin to be heard in Washington.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Vapor intrusion is the issue de jour at federal and state Superfund sites. On the federal side, EPA announced in January that it was considering adding vapor intrusion criteria to its calculation of hazard ranking scores. Frankly, as a concept, it’s hard to dispute. In fact, aside from when actual public water supplies are contaminated, indoor air is probably about the only risk associated with Superfund sites that we should care about. Every analysis EPA has ever done has shown that risks associated with Superfund sites are otherwise overestimated and it is not a cost-effective place to be putting environmental protection dollars. The question of course is how to go about regulating indoor air.

MassDEP is attempting to answer this question at the state level as we speak. In December, MassDEP released its draft vapor intrusion guidance document. The Guidance, including appendices, totals 142 pages and 2.2 MB of pdf files. You probably know where I’m headed with this. How can any set of documents that long be appropriate for guidance, you may ask. Like Tevye in Fiddler on the Roof, I’ll tell you. I don’t know.

Today, NAIOP provided MassDEP with 54 single-spaced pages of comments on the draft guidance. Kudos to NAIOP’s 21E Committee, and particularly Ned Abelson, for truly herculean efforts in putting together these comments. The problems I identify below are all described in detail in the NAIOP comments.

There are many substantive issues with the Guidance. Here are two high-level ones:

It would be another step away from the risk-based program that Massachusetts pioneered almost 20 years ago. Whatever MassDEP officials may say, there’s a lot of evidence that those actually running the program simply don’t trust the privatized risk-based system that has been such a success.

The Guidance will make it very difficult for sites with even potential VI issues to achieve regulatory closure. The difficulty in obtaining closure will, in turn, discourage brownfields redevelopers from pursuing VI sites. The disincentive will, in turn, mean that fewer sites will actually be cleaned up. How will that achieve MassDEP’s goals?

In any case, how can this possibly be implemented as guidance? Simply put, anyone who thinks that the Guidance will not be rigidly implemented by MassDEP is delusional. My favorite discussion of this issue is contained in the 2000 Appalachian Power decision. In dismissing EPA’s contention that the guidance document at issue in that case was not binding, the Court said this in response to EPA’s reference to its boilerplate statement that the guidance created no rights: 

“[R]ights” may not be created but “obligations” certainly are…. The entire Guidance, from beginning to end – except the last paragraph – reads like a ukase.

Here’s just one example, to wrap up an already overly-long post. In determining whether basements should be evaluated for VI purposes as living spaces, the Guidance provides that “any basement with at least seven feet of head room in an occupied residential dwelling should be considered a living space.” What’s the likelihood that any street-level bureaucrat at MassDEP will ever allow any basement with at least seven feet of headspace to be considered as anything other than a living space? 

Sounds like a rule to me. Sounds like regulation – not guidance. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As almost everyone knows by now, EPA finally issued its long-awaited final rule on Boilers, Commercial and Industrial Solid Waste Incinerators (CISWI), and Sewage Sludge Incinerators (SSI) yesterday. The rule is too complicated even to summarize here. EPA has a useful fact sheet for that purpose.

I’d like to focus on a few broader issues. The rule has widely been seen as the Obama administration’s first formal acknowledgment of the anti-regulation political climate currently sweeping Washington. Indeed, the Times began its story as follows:

Responding to a changed political climate and a court-ordered deadline, the Obama administration issued significantly revised new air pollution rules on Wednesday that will make it easier for operators of thousands of industrial boilers and incinerators to meet federal air quality standards.

It’s not obvious to me that the instant punditry analysis is correct. EPA had received an enormous number of comments on the rule prior to the November elections. The regulated community had made a fairly strong case that the proposed standards simply couldn’t be met. EPA faced a real possibility of losing in court if it went forward with the proposed rule. Only time will tell if EPA has truly developed a new-found concern for the economic impacts of its rules.

Regardless of the reason for EPA’s change of heart, I think it is fair to say that the rule represents a triumph of the rule-making process. EPA issued a proposed rule, took thousands of comments, and – whatever its motivation – changed the rule in response to the comments, making compliance significantly less costly, while still achieving most of the benefits of the original proposal. 

The boiler rule was never one that could have been issued as guidance – it was statutorily mandated, for one thing – but I think that the boiler rule still provides a stark contrast with agency development of guidance. Guidance is not subject to the formal notice and comment process. Moreover, even where agencies do take comment on guidance documents, the very flexibility guidance supposedly provides makes agencies less responsive to comments. They can always say that the guidance will be interpreted flexibly in light of adverse comments.

Finally, to the extent that the economic concerns were part of EPA’s motivation, I can only say, hurray! Not simply because EPA considered the cost of the rule, but because EPA considered the cost-effectiveness of the rule. EPA can almost always generate an analysis demonstrating that the benefits of a rule exceed its costs, but that’s not really the proper criterion. If EPA could obtain 90% of the benefits of a rule with an alternative rule that would impose only 10% of the costs, I would vote for the alternative rule. If the boiler rule represents one small step towards increased use of cost-effectiveness analysis by EPA, then it will be worth its costs, even aside from the substantial health benefits EPA projects to result from its implementation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, I discussed EPA’s efforts to “muddle through” on climate change in the absence of comprehensive legislation. This week, I think it’s the Clean Water Act’s turn. If there were any regulatory situation which required some serious muddling through at the moment, interpretation of the Supreme Court’s Rapanos decision almost is a match for the current climate mess. As most of my readers know, Rapanos was a 4-1-4 decision which left EPA, the Corps, developers and environmentalists fairly equally perplexed

Most stakeholders have assumed that Kennedy’s concurring opinion, requiring a “significant nexus” between wetlands and traditional navigable waters before those wetlands are subject to jurisdiction under the CWA, is the law of the land at this point. That is the approach adopted in the Rapanos Guidance issued by EPA and the Corps in 2007. 

A recent decision by the 4^th Circuit Court of Appeals, in Precon Development Corporation v. Army Corps of Engineers, illustrates just how muddled post-Rapanos interpretation has become. The decision in Precon – reversing the District Court – found that the Corps had not built a record sufficient to establish that the wetlands which Precon sought to develop were jurisdictional under the CWA. 

There were two technical issues in Precon. Precon lost what one might have thought would be the more significant issue – the Corps’ finding that, although only 4.8 acres were really at issue in this case, and Precon’s entire development includes 166 acres of wetlands, 448 acres of “similarly situated” wetlands would be examined for a substantial nexus to navigable waters. Precon ultimately won, however, because the Court concluded that the Corps’ record did not contain enough physical evidence to support its determination that a significant nexus exists between the 448 wetland acres and the downstream navigable water. 

The Court’s conclusion raised two issues of broad concern to stakeholders. First, the Court granted little deference to EPA’s conclusion on the significant nexus issue. The Corps argued that its conclusion that there was a significant nexus between the site wetlands and the downstream navigable waters was a factual conclusion. However, the Court concluded that the significant nexus determination was not factual. The Court stated that:

The question is instead whether the Corps’ findings were adequate to support the ultimate conclusion that a significant nexus exists. This legal determination is essentially now a matter of statutory construction, as Justice Kennedy established that a “significant nexus” is a statutory requirement for bringing wetlands adjacent to non-navigable tributaries within the CWA’s definition of “navigable waters.”

Well, this is certainly a nice question of administrative law. The significant nexus issue may now be the ultimate legal question. Nonetheless, I would guess that most wetlands scientists and hydrologists would say that this is largely a factual question. Even if the agency is applying its judgment to answer that question, it’s the type of judgment that requires technical expertise – expertise to which courts have traditionally deferred.

The second of the Court’s important pronouncements was that it would not give the EPA/Corps Rapanos Guidance deference under Chevron. Why not?

Because – although it could – the Corps has not adopted an interpretation of “navigable waters” that incorporates this concept through notice-and-comment rulemaking, but instead has interpreted the term only in a non-binding guidance document.”

Isn’t it timely, then, that EPA and the Corps sent a draft new Rapanos guidance to OMB in December, and GOP leadership in the House is proposing language in a continuing resolution that would preclude EPA from using any funds “to implement, administer, or enforce a change to a rule or guidance document pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act (33 U.S.C. 1251).” Perhaps EPA and the Corps should take half a loaf. Why not agree to shelve the guidance and instead proceed with notice-and-comment rulemaking to clarify Rapanos? At least then the Courts might grant EPA and the Corps more deference in implementation.  It’s already been almost five years since Rapanos was issued. EPA and the Corps can hardly argue that it’s necessary to go the guidance route because they don’t have the time to proceed through the full regulatory process.

Enough muddling through. Take the time to do it right and issue regulations. Then, maybe the muddle will abate. (Can one abate a muddle?)

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As readers of this blog know, the question of guidance v. regulation is one near and dear to my heart. I generally disfavor guidance, because I think it offers none of the protections of the regulatory process and almost none of the flexibility that guidance is supposed to provide. Two issues are of particular concern. First, guidance is not supposed to announce new rules – only clarifying interpretation of existing rules. However, we all know what a slippery slope that can be. Second, notwithstanding the purported flexibility of guidance, how often do regulators on the street – those actually using the guidance, rather than those writing it – treat guidance exactly like regulations and expect the regulated community to follow it to the letter?

The problem was brought to the forefront again recently by the decision in National Mining Association v. Jackson, in which Judge Reggie Walton in the District Court for the District of Columbia stated that EPA’s mountaintop mining guidance likely exceeded EPA’s authority. Although Judge Walton denied plaintiffs’ request for an injunction because they had not demonstrated irreparable harm, he made clear that the plaintiffs are likely to prevail on the merits. Addressing the core issues I noted above, he stated that the EPA mountaintop mining guidance

Qualified as final agency action because, despite the representation that it is an interim document, it is nonetheless being applied in a binding manner and has been implemented in its current version even though the EPA continues to receive comments about it. Therefore,… it appears that the EPA is treating the Guidance as binding.

Judge Walton went on to conclude that the various documents at issue constitute “legislative rules because they seemingly have altered the permitting procedures under the Clean Water Act by changing the codified administrative review process.” He also found that the documents exceeded EPA’s authority, because they ignored “EPA’s limited role in the issuance of Section 404 permits.”

Relatively hard on the heels of the National Mining Association decision, Daily Environment Report this week covered efforts by industry groups to prevent EPA from issuing guidance interpreting the Supreme Court’s Rapanos decision regarding the scope of Clean Water Act jurisdiction over “waters of the United States.” I’m sorry, but does anyone think that such “guidance” would not be treated in practice as having the finality of regulation? If, under such guidance, certain types of situations are considered to be “waters of the United States,” does anyone doubt that such situations will be subject to CWA permitting requirements 100% of the time? 

Agencies officials generally make two arguments in favor of guidance. One is simply to ask for recognition of the practical reality that getting formal notice and comment rulemaking accomplished is very difficult and often impractical in the modern world. The second is that guidance provides flexibility. However, if the regulators want the rest of us to recognize the practical realities involved in promulgating regulations, then they must recognize the practical reality that guidance almost always immediately ossifies and that those implementing it treat it as gospel. There is often little in it for the regulated community.

Until Rand Paul succeeds in dismantling the modern administrative state, the debate will continue.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Back in my public policy days, there was much discussion of “muddling through.” When I look at recent developments on the climate and air regulation front, I just see a muddle. First, we have Gina McCarthy, saying that EPA wants to walk before it runs, and assuring utility executives that New Source Performance Standards for GHG emissions will not have a “dramatic effect.” McCarthy further said that EPA will take a “common sense approach,” comparing it to EPA’s approach to the GHG BACT guidance, which she described as “not overly ambitious.”

At the same time, the first PSD permit for GHG has been issued, to Nucor Corporation's direct reduced iron manufacturing facility in Louisiana. While praising Nucor for utilizing DRI technology, which apparently generates lower GHG emissions than plants utilizing coke, and while acknowledging that this was one of the first GHG PSD applications, EPA raised two concerns that may be troubling to permittees. First, the permit would require a package of good combustion practices, but did not include a numerical limit for GHG emissions. EPA commented that the permit had not justified why a numerical limit would not be feasible. 

Second, EPA noted that the permit did not provide a basis for the conclusion that carbon capture and sequestration, or CCS, would not be feasible for this project. EPA’s comments referred to EPA’s December 2010 GHG BACT guidance as noting that CCS is generally available for iron and steel manufacturing facilities.

To EPA, the BACT guidance may be common sense. However, to the regulated community, it creates uncertainty. Uncertainty means risk. Risk means costs. Will EPA insist on numerical standards? What are those standards going to be? Based on the EPA's comments regarding CCS, it appears that EPA may be intending to treat the GHG BACT guidance as having the force of regulation. If so, we are stuck with the worst of both worlds – the absence of the protection provided by notice and comment rulemaking and the absence of the flexibility in utilizing guidance, rather than regulation. 

Moreover, EPA does not appear to understand the scope of the uncertainty created by such actions. EPA may allow the Nucor facility to proceed without CCS, once the permit application is amended to include an explanation of the infeasibility of CCS. However, there is no point in requiring such an analysis unless there is some possibility that CCS may be required. The regulated community – and state regulators – are left wondering under what circumstances CCS would be considered feasible. The same is true with the analysis of coal and natural gas. It’s difficult to read the BACT guidance without concluding that, under some circumstances, BACT for coal might be gas. However, we don’t know yet what those circumstance would be. 

On the other side of the aisle, as it were, we have the muddle that is Congressional opposition to EPA GHG regulation. Fred Upton, Chair of the House Energy and Commerce Committee, has described the NSPS standards as a “backdoor attempt to implement their failed job-killing cap-and-trade scheme.” Sadly, I only wish it were so. He seems to think that describing NSPS standards as a “cap-and-trade” scheme is the worst kind of insult. However, he’s got it backwards. First, unlike the cap-and-trade plan, the NSPS regulations are required under the existing Clean Air Act as interpreted by the Supreme Court in Massachusetts v. EPA. Second, cap-and-trade was proposed precisely because it has been demonstrated to be an economically efficient way to attain pollution reductions. It’s really only fair to describe it as job-killing if you don’t believe in anthropogenic climate change. (I’m too tired to go there today.) If Congress doesn’t want EPA to kill jobs, then give it the tools to regulate as efficiently as possible. 

Moreover, as noted in the Daily Environment Report, while Congress is up in arms about EPA climate rules, Congress is extremely unlikely to limit EPA’s authority to issue the Clean Air Mercury Rule and Clean Air Transport Rule, both of which are going to have more significant impact on power generators and electricity prices than GHG NSPS.

Occupying the middle ground – if not the muddle ground – is Senator Rockefeller, attempting the most delicate of balancing acts. While still complaining about EPA’s veto of the mountaintop removal permit for the Spruce No. 1 mine and backing legislation which would delay EPA’s GHG rules for two years, Rockefeller criticized “EPA-bashing.” Rockefeller’s view is apparently just that coal is important, coal cannot survive serious GHG regulation without CCS, and CCS requires more time. We’ll see how his dance plays back home and with the Chamber of Commerce. I thought that we are now against backing particular technological solutions and I certainly believe that sooner or later, we're just going to have to bite the bullet and put a price on carbon.

For now, though, I guess we’re just muddling through.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

This week, the United States filed its brief in American Electric Power v. Connecticut. The brief is a nicely nuanced and persuasive argument for dismissal of plaintiffs’ public nuisance claims against five large power generators. The brief is nuanced in that it acknowledges that plaintiffs have Article III standing – allowing the Court to avoid reaching a constitutional standing issue – and provides a vehicle for the Court to avoid reaching the political question doctrine issue.

Instead, the brief makes two fairly simply points – and makes them convincingly. First, the brief argues that plaintiffs’ lack “prudential standing,” because their complaint raises “generalized grievances more appropriately addressed in the representative branches.” As the brief notes:

Global climate change will potentially affect the property interests of most landowners. And the effects of climate change will not be limited to landowners; they will also be felt by individuals, corporations, and governmental entities throughout the Nation and around the world. … The problem is not simply that many plaintiffs could bring such claims and that many defendants could be sued. It is also that essentially any potential plaintiff could claim to have been injured by any (or all) of the potential defendants.

A court – when no statute or regulation is in place to provide guidance – is simply not well-suited to balance the various interests of, and the burdens reasonably and fairly to be borne by, the many entities, groups, and sectors of the economy that, although not parties to the litigation, are affected by a phenomenon that spans the globe.

The brief is even more convincing in demonstrating that the common law claims have been displaced by the regulatory actions that EPA has taken under the Clean Air Act since Massachusetts v. EPA.   Specifically, it doesn’t matter that EPA’s regulation doesn’t do what the plaintiffs are seeking in the litigation:

Although EPA has not yet done precisely what plaintiffs demand here…, that is not the relevant test. … The question is whether the field has been occupied, not whether it has been occupied in a particular manner.

Moreover, and this is the crux of the displacement argument, the brief notes that:

Plaintiffs’ attempt to secure court-ordered emissions reductions from emitters of their choosing on their own schedule would be plainly inconsistent with EPA’s systematic, phased approach.

Interestingly, the brief makes the point that:

Displacement also occurs when an agency, whose comprehensive statutory authority to regulate the subject matter has been triggered, decides to postpone or even forgo the imposition of regulatory standards, where the decision is made through the exercise of that authority on the basis of a weighing of relevant considerations under the statutory scheme. [My emphasis.]

This is one issue that could come back to haunt both the government and global warming skeptics in Congress. As you will probably infer from my description of the brief, I expect the United States to win this case. However, while the prudential standing issue is persuasive, I think that the displacement is much the stronger argument – but only because EPA has in fact done something about GHG. What’s notable about the language in the brief is that, even if EPA were to make a formal decision to postpone GHG regulation under the CAA, such an decision would justify continued displacement of public nuisance claims, under the theory of the government’s brief. On the other hand, if Congress were to amend the CAA to preclude EPA regulations – and unless the legislation specifically precluded nuisance claims as well – such action would then revive the potential for nuisance claims, which is probably the last outcome that power generators would want to see.

As I have said before on this issue, be careful what you wish for.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Although I do try to be entertaining, I don’t normally post items solely for their humor value, but I have to admit, I loved EPA’s press release announcing its "National Bed Bug Summit.” I just want to know, do those who attend in person get free rooms? Little goody bags of approved pesticides when they check in?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last month, I noted that, in the absence of comprehensive climate legislation, U.S. carbon policy would be a mish-mash of several elements – including more NSR enforcement. In fact, Phillip Brooks, director of EPA’s Air Enforcement Division, had just told an ALI/ABA forum that EPA’s NSR enforcement initiative is alive and well and he predicted more closures of old coal plants as a result of EPA’s NSR enforcement. Earlier this month, proving that Brooks meant what he said, the United States sued Ameren Corporation, alleging NSR violations at Ameren’s Rush Island facility in Festus, Missouri. 

Apparently, I am not the only person who has noticed the connection between NSR enforcement and efforts to make life generally more difficult for coal plants. (Perhaps Mr. Brooks should not have been so explicit in his ALI/ABA remarks.) This week, Missouri Republican Senator Roy Blunt wrote to Lisa Jackson, criticizing the Ameren enforcement action and describing it as “another backdoor method used by the EPA to broadly penalize the use of coal in the United States.”

Blunt also criticized the “tsunami” of regulations by EPA that will increase the cost of coal-fired electricity generation. We had previously noted the Credit Suisse report which predicted the closure of more than 50 gigawatts of coal-fired capacity. Blunt referred to a study by the North Electric Reliability Corporation which made a similar prediction.

As my readers know, I dislike the NSR program and the enforcement initiative. I do think that many of these projects, often 15, 20, or 25  or more years ago, truly were thought routine, even if EPA may be able to persuade a court that they were not “Routine Maintenance” within the meaning of the regulations. The NSR program is certainly not a cost-effective way to regulate. However, NSR is part of the statute, EPA believes in it, and the case law is, from EPA’s perspective, at worst ambiguous and at best favorable. I expect that EPA would be pursuing many of these cases, even if climate change were not an issue and CO₂ not considered a problem. 

Is EPA sad that its NSR enforcement has the collateral impact of making coal less economic so that small coal-fired plants retire early, thus reducing GHG emissions? I doubt it. Does the climate change issue increase EPA’s enthusiasm? Perhaps so. The question is whether this added motivation is relevant. EPA’s intent may not be relevant to the courts, but it certainly looks as though it is relevant to Congress.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In Cool Hand Luke, Paul Newman is sentenced to two years on a chain gang for cutting the heads off of municipal parking meters.  The Mingo Logan Coal Company wants to cut the top off of 3.5 square miles of West Virginia mountaintop. This week, EPA gave the company's Spruce No. 1 Mine proposal the death penalty, using its authority under § 404(c) of the Clean Water Act to veto a permit issued by the Army Corps of Engineers in 2007. As EPA noted in its press release, this is only the 13^th time in 38 years that EPA has utilized § 404(c) to veto a permit.

EPA’s decision resulted in howls of protest, not just from the mine’s owner, but also from the two Senators from West Virginia. Joe Manchin, who famously campaigned with an advertisement in which he shot a purported copy of cap-and-trade legislation, described EPA’s decision as a “shocking display of overreach.” 

EPA’s characterization was slightly different. The agency summarized the mine’s impacts as follows:

Burying more than 35,000 feet (more than 6 miles) of high-quality streams under mining waste, which will eliminate all fish, invertebrates, salamanders, and other wildlife that live in them;

Polluting downstream waters as a result of burying these streams, which will lead to unhealthy levels of salinity and toxic levels of selenium;

Causing downstream watershed degradation that will kill aquatic wildlife, impact birdlife, reduce habitat value, and increase susceptibility to toxic algal blooms;

Inadequately mitigating for the mine’s environmental impacts to high-quality streams , by using mining ditches, for example, to offset the functions provided by these natural streams; and

Failure to consider cumulative watershed degradation resulting from past, present, and future mining in the area.

While I’m sure that the owner will dispute some of EPA’s characterization, my money’s on EPA, overreach or not. The impacts of mountaintop mining are substantial and I don’t see a court rejecting EPA’s conclusion that they are, in this case, “unacceptable.”

To bring the situation back to Cool Hand Luke, what EPA and the mining companies have here is a failure to communicate, and EPA is the one in the Strother Martin role, wielding a very painful veto hammer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Justice Brandeis famously suggested that states may “serve as a laboratory” for the rest of the country. If this is so, I think it is fair to say that U.S. EPA has not accepted the results of the biomass experiment conducted in Massachusetts. Last year, following receipt of a study regarding the GHG emission implications of various types of biomass fuels, Massachusetts decided to severely restrict the circumstances in which biomass would be considered a renewable fuel.

Earlier this week, EPA decided not to go along with the restrictive approach taken by Massachusetts, and granted a petition to stay application of GHG permitting to biomass facilities, while EPA further studies the issue. Specifically, EPA promised to amend the tailoring rule to exempt biomass facilities for three years. In a letter EPA Administrator Lisa Jackson sent to Senator Stabenow as part of the announcement, Jackson stated that:

biomass can be part of a national strategy to reduce dependence on fossil fuels, and efforts are underway to foster the expansion of renewable resources and promote biomass as ways of addressing climate change and enhancing forest management.

It’s one thing for a state to differ from the federal government or other states on matters of policy. However, my guess is that the federal EPA and the great Commonwealth of Massachusetts have pretty much the same policy goal – reduction of greenhouse gas emissions. This is really a question of science. Does use of biomass help reduce GHG emissions? Shouldn’t the answer be the same everywhere?

I’m not a scientist and cannot comment on the reliability of the Massachusetts biomass study. (And I should disclose that our firm has represented the proponent of one of the biomass plants in Massachusetts.) However, it does seem to me that this is one area in which a uniform national policy is the right approach. Let’s give EPA the three years that it apparently needs to sort out the issue, and then have one policy applicable nationwide.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

With everyone in agreement that cap-and-trade legislation is dead in Congress for the near term, attention is now turning to whether Congress might be able to pass some kind of renewable or clean energy standard. In fact, even Thomas Donahue, President of the U.S. Chamber of Commerce, sworn foe of cap-and-trade legislation, is saying that the Chamber could support some kind of climate change legislation – presumably a CES including nuclear power – as long as the legislation precludes EPA regulation of GHG under existing authority. 

For those who are taking the half a loaf approach to climate legislation, I recommend this post by Rob Stavins at Harvard and Dick Schmalensee at MIT, which compares cap-and-trade legislation with CES legislation. The piece is a remarkably cogent short analysis of the issue, so I hate to excerpt something which can be read in a few minutes. Nonetheless, for the lazy among my readers, the bottom line is that:

Carbon cap-and-trade has been killed in the Senate, presumably because of its costs. Renewable electricity standards or clean energy standards would accomplish considerably less and would impose much higher costs per ton of emissions reduction than cap-and-trade would. This does not sound like a step forward.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this week, the United States brought another NSR/PSD enforcement action, this time concerning the Homer City Plant, in Pennsylvania. The suit itself isn’t big news, though it’s helpful to have periodical reminders that the NSR enforcement initiative remains active at EPA and DOJ; it is a significant part of the government’s arsenal against traditional pollutants.

It’s also important to remember that, in the absence of comprehensive climate legislation, the NSR enforcement initiative has become part of the government’s climate strategy. The plant spokesman stated that the plant is “positioned quite well to succeed in whatever environment we might be looking at in the future." However, Randy Francisco, Pennsylvania representative for the Sierra Club's "Beyond Coal" campaign (and doesn’t the name say it all), had a different view: 

I don't think it's worth it to put the money into it to clean it up. This is one of the dirtiest plants in the country, and it really just needs to be put to bed.

Why do I describe this as a fine mess and how did we get here? To mix my comedic metaphors, we have met the enemy and he is us. It’s a mess, because the PSD/NSR program is a clunky, awkward, and vague program and, whatever the merits of the specific legal questions in the various suits, EPA can’t really deny that its interpretation of the program has not been a model of consistency. It’s a mess because it’s difficult to achieve programmatic results through enforcement. It’s a mess because using PSD enforcement to make coal more expensive so that coal plants will shut down and stop emitting GHGs is hardly an efficient way to regulate GHGs. 

Why are we the enemy? Simple. Because the environment would be cleaner and the economy stronger with comprehensive climate legislation combined with significant changes to the NSR/PSD program and we haven’t figured out a way to get there.

The result? No one’s happy (except, perhaps, some busy environmental lawyers and some politicians who can find opportunities for grandstanding). EPA and environmentalists aren’t happy, because we don’t have comprehensive climate legislation. Large emitters aren’t happy, because they are left with the collateral damage of PSD/NSR, a program that should be allowed to die a quiet death.

For those of us who live in the trenches of these battles, at least one detail in the complaint is worth noting.  The United States brought suit, not only against the current owner and operator of the Homer City plant, but also against New York State Electric and Gas Corporation and Pennsylvania Electric Co., both of which owned the plant prior to 1998. Why the emphasis? Because it’s more than six years ago and therefore outside the statute of limitations for the government’s penalty claims. Indeed, the government seeks penalties only from the current owner/operators. Nonetheless, it seeks injunctive relief against NYSEG and PENELEC, even though they’ve had no connection to the plant in more than 12 years. The complaint states that:

They can be ordered to fund and implement contracts with third-party vendors who design, fabricate, and install the air pollution control equipment at issue. They can also take various actions to mitigate their past illegal pollution such as purchasing air pollution credits known as “allowances.”

A fine mess we’ve gotten ourselves into.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It may be an apocryphal story, but my understanding as to why so many small municipal landfills in New Hampshire ended up on the NPL is that some bright light in the Granite State thought that Superfund was a public works program and that the fund would pay for the landfill closures. The result? Small towns became PRPs, responsible for Superfund response costs which, in some cases, approximated their annual municipal budget.

I recall going to a public meeting concerning EPA’s preferred alternative at one site. At most sites, the public pleads for EPA to require more cleanup – because someone else will be paying, of course. Here, the public was begging for less cleanup, because they thought that they had better ways to spend the money. Even if the money had to be devoted to public health and safety, they were confident that spending money on traffic lights and police and fire departments would yield a greater return.

I was reminded of this episode by EPA’s announcement last week of the release of guidance recommending the removal of PCB-containing light ballasts from schools. According to a report in the Wall Street Journal, New York City estimates that the cost to remove the ballasts will be $1 billion. Anyone think that NYC might have a better use for $1 billion in school spending?

There are really two points to this story. The first is that legislation in response to panics is not a good idea. The notion that there are special legislative provisions for PCBs, unlike the myriad of other toxic chemicals which are handled under provisions of general application is, to use a technical term, nuts. It has led to a separate PCB program within EPA which, in the bureaucratic nature of things, has to justify its existence, leading to costly recommendations such as those made last week.

Second, what if it really would be better to spend money on fire trucks, or traffic lights, or anti-drug programs in schools? To be fair to EPA, this is not a question the agency is tasked with answering. However, shouldn’t somebody be asking and answering such questions before regulations with such potential consequences are promulgated? 

This is not about cost-benefit analysis, which simply asks whether the benefit of the requirement is worth its costs. It’s not even cost-effectiveness analysis, at least as EPA normally thinks about it. Such analysis would normally only try to determine the most cost-effective way to eliminate PCBs. I’m after something deeper. Even after we’ve determined the most cost-effective way to eliminate PCBs from light ballasts, I want to know how much that would cost, how much risk reduction it would achieve, and whether more risk reduction could be obtained by spending the money elsewhere. 

I can dream, can’t I?

• Email This
• Print
• Comments (3)
• Trackbacks
• Share Link

And you thought that the explanation was just partisan gridlock in Washington? According to a study that has been accepted for publication in Environmental Research Letters, it will be somewhere between 120 years and 550 years before losses caused by Atlantic tropical storms can be statistically attributed to anthropogenic climate change. It’s important to note that this study is not by climate skeptics; nor are the authors opposed to Congressional action. They are simply pointing out that it’s damn hard to attribute causation to specific storms or on short time scales. As they note in their conclusions:

Based on the results from our emergence time scale analysis we urge extreme caution in attributing short term trends (i.e., over many decades and longer) in normalized US tropical cyclone losses to anthropogenic climate change. The same conclusion applies to global weather-related natural disaster losses at least in the near future. Not only is short term variability not ‘climate change’ (which the IPCC defines on time scales of 30 to 50 years or longer), but anthropogenic climate change signals are very unlikely to emerge in US tropical cyclone losses at time scales of less than a century under the projections examined here.

Our results argue very strongly against using abnormally large losses from individual Atlantic hurricanes or seasons as either evidence of anthropogenic climate change or to justify actions on greenhouse gas emissions. There are far better justifications for action on greenhouse gases. Policy making related to climate necessarily must occur under uncertainty and ignorance. Our analysis indicates that such conditions will persist on timescales longer than those of decision making.

Do I wish that Congress had bitten the bullet and passed comprehensive climate change legislation? Of course. However, no one can dispute that there will be some significant short term costs, even if there are also opportunities in moving towards the new energy economy. It is difficult enough for Congress to look past the next election. Asking Senators and Representatives to look past the next century? Perhaps, instead of asking why legislation did not pass, we should take comfort from the fact that it got as close as it did.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In what might not be an overstatement, Seth has described Massachusetts' Global Warming Solutions Act (GWSA), as "the future of everything".  If so, welcome to the future of the future of everything.  The GWSA requires the Executive Office of Energy and Environmental Affairs (EEA) to set a 2020 goal for state-wide reductions of greenhouse gas emissions, and, before January 1, 2011, to create a plan outlining how to get there.  Just in time, EEA yesterday released the Clean Energy and Climate Plan for 2020, which sets the 2020 emissions goal at 25% below 1990 levels (the maximum reductions authorized by the GWSA) and outlines how the Commonwealth will comply with that limit. 

The 2020 Plan announces a portfolio of policies in five categories – buildings, electricity, transportation, non-energy emissions, and cross-cutting policies (essentially agency procedures that do not fit into the other categories) – representing the suite of policies that the Patrick-Murray administration is committed to pursuing over the next four years, to work toward the 2020 emissions limit.  Together, the policies could result in as much as a 33% reduction of greenhouse gases below 1990 levels, and set the groundwork for the 80% reductions required by 2050 under the GWSA.  EEA also predicts that these policies will reduce Massachusetts’ reliance on imports of energy and fuels, and create or maintain 42,000 to 48,000 jobs in Massachusetts in 2020.

For a summary of specific points included in the 2020 Plan, keep reading after the jump.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Today, EPA announced settlements of litigation with states and environmental groups which will require EPA to promulgate New Source Performance Standards for greenhouse gas emissions from electric generating units and refineries. EPA will thus give those of us who practice in this area an opportunity to decide which program we find more cumbersome and ill-suited to regulate GHGs, the PSD/NSR program or the NSPS program.

As with the PSD/NSR regulations, I remain sympathetic to EPA in that, once you take Massachusetts v. EPA as a given, and if you accept the logic of the Endangerment Finding, then it is difficult to see how EPA can avoid these regulations. Moreover, EPA has described its expected set of performance standards as “modest” – though modesty, of course, is in the eyes of the beholder. 

Nonetheless, it’s not surprising that opponents of GHG regulation see this as another stick in the eye. Here is what Senator Murkowski’s spokesman, Robert Dillon, had to say:

The administration used the threat of EPA regulations as a cudgel to force Congress to pass cap and trade. It was a strategy that failed.  You've opened Pandora's box now. You've let the agency loose with these new regulations when they're interpreting the law.

Of course, it’s EPA’s job to interpret the law. That doesn’t make me happy about it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It says something about where our politics are today when Republican Senator Lindsey Graham has to ask that question. Of course, there’s reason to wonder what the answer is. It was certainly not intentional irony when, shortly after this story appeared about Senator Graham, Senator Rockefeller announced that he has given up on legislation that would delay implementation of EPA GHG rules because the bill has lost Republican support. The reason? It’s not that the Republicans are opposed to the delay; it’s just that it’s more important to the Republicans that they be able to make political hay out of the issue when they are in the majority next term. Then there’s Texas Representative Joe Barton, who has made it his mission to save the incandescent light bulb. I wonder what he would say if he had a horse shoe factory in his district?

Political prognostication is neither my strong point nor the purpose of this blog. I note only that, while the Democrats are in retreat now, it was only two years ago that many were predicting a lengthy time in the minority for the Republicans. Senator Graham seems to be one of the few taking the long view:

I'm concerned that if the Republican Party doesn't embrace the idea [that] it's OK to clean up the air, we're gonna lose young people forever, Graham told ClimateWire. Whether you like it or not, young people are environmentally sensitive. I happen to like it.

At a practical level, Senator Graham’s concerns seem focused in the short run on legislation that would enact some kind of clean energy standard, or CES – like an RES, but including nuclear energy and clean coal. In many ways, imposing a CES or RES seems like more of an interference in the market than simply putting a price on carbon, which is what free market economists would say is necessary to internalize an externality. However, with climate legislation dead for the near term, and with a focus on jobs, CES legislation might have some chance of moving forward. 

Will it pass? I’ll leave the prognostication to others.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As a follow-up to last week’s post, if you want a handy-dandy rundown of what U.S. carbon policy looks like in the absence of comprehensive federal legislation, take a look at the presentation I gave last week to the Harvard Electricity Policy Group, which summarizes federal, regional, and state regulatory efforts – many of which are not explicitly directed at CO₂ – that are likely to have significant impacts on U.S. CO₂ emissions. Thanks to Amy Boyd, who did the lion’s share of the work on this one.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Bill Hogan at the Kennedy School (shameless plug for alma mater) kindly asked me to speak at a meeting this week of the Harvard Electricity Policy Group. I’ve titled my talk “Carbon Policy When There Is No Carbon Policy.” Several items that came across the wires in the past few days buttress the theory behind my presentation, which is that our current carbon policy really is “A little bit of this, a little bit of that.” 

First, Phillip Brooks, director of EPA’s Air Enforcement Division, told an ALI/ABA forum that EPA’s NSR enforcement initiative is alive and well and that it expects to continue to send out information requests to potential enforcement targets concerning those targets operation and maintenance activities. Brooks predicted more closures of old coal plants as a result of EPA’s NSR enforcement.

Second, a report just released on the economic impact of air emissions supports EPA’s Transport Rule, asserting that each dollar spent on upwind emissions reductions results in $50 to $100 dollars in avoided environmental costs in downwind states. Greenwire subtly noted that the research was funded by Excelon, which owns the largest fleet of nuclear power plants in the nation.

Third, the Ninth Circuit Court of Appeals just affirmed a decision by the San Joaquin Valley Air Pollution Control District to require construction companies to assess the indirect air emissions resulting from construction projects and potentially to reduce such such emissions or pay a mitigation fee. The decision in National Association Of Home Builders v. The San Joaquin Valley Unified Air Pollution Control District is likely to provide additional momentum to state and local efforts to regulate land use decisions as a way to reduce sprawl and, as a result, GHG emissions.

So, what’s our carbon policy today? A little bit of enforcement of existing regulations, a little bit of new federal regulations of traditional pollutants, and a potentially increasing dose of state and local land use regulation.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Bismarck is supposed to have said that:  "Laws are like sausages, it is better not to see them being made.” EPA apparently disagrees, and has launched a new web site, known as Reg Stat, in order “to increase the transparency of regulatory activity.”

It’s a potentially helpful website. It has some useful data on the types of regulations EPA is pursuing (mostly air during the past five years; what a shock!) and how long it takes to promulgate them (too long; the average regulation takes almost three years to get out the door). I think that the “Regulatory Gateway,” containing information about regulations still in progress, may be the most helpful part of the site. For those not intimately familiar with every step EPA takes, the Regulatory Gateway will be a handy one-stop shopping location to find out where pending rules stand.

Personally, I think I’d rather see sausage being made, but since I do get paid to know what EPA is doing, it’s nice to see EPA trying to make information more available.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When EPA creates a web page solely addressing one stormwater settlement, you can safely assume that EPA thinks it is important and is trying to send a message. Thus, EPA’s announcement earlier this week of a settlement with Beazer Homes to resolve allegations that Beazer Homes violated federal stormwater requirements at construction sites in 21 – count ‘em, 21 – states should make everyone in the construction industry sit up and take notice.

The settlement requires Beazer Homes to pay a penalty of $925,000 (mostly to EPA, but some to each of the states). EPA estimated a price tag for the injunctive relief of almost $9,487,384. Basically, the consent decree simply requires Beazer Homes to comply with stormwater regulations, but EPA has imposed certain management requirements on Beazer Homes to ensure that compliance really will happen. Beazer Homes must develop an overall stormwater compliance program, designate a nationwide stormwater compliance manager, and also identify division-level compliance managers who must inspect every construction site within their jurisdiction at least quarterly to ensure that individual sites are in compliance. 

Stormwater is clearly one of EPA’s top priorities. The press release for the Beazer Homes settlement states so explicitly:

Keeping contaminated stormwater out of America’s waters is one of EPA’s national enforcement initiatives.

As concerns about nutrients increase, and EPA faces pressure from citizen groups regarding TMDLs for nutrients, we should only expect more such announcements. An ounce of prevention might be worth $9,487,384 of cure (not including a penalty).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The 10th auction in the Regional Greenhouse Gas Initiative (RGGI) was held on December 1st.  In honor of this significant round number, I give you the top 10 interesting facts about the 10th RGGI Auction, all of which are based on today's market monitor report:

10)  In the Auction, 24,755,000 allowances from the 2009-2011 compliance period sold for $1.86 each (the floor price);

9)  That amount is only 57% of the 2009-2011 allowances offered for sale, the lowest yield from a current compliance period auction;

8)  38 entities bid on these current compliance period allowances, down from 45 in September and 51 in March;

7)  The generators subject to RGGI compliance and their affiliates (collectively "compliance entities") purchased 97% of the current compliance period allowances sold;

6)  1,172,000 allowances from the second compliance period (2012-2014) were also sold at $1.86 (the floor price);

5)  That amount is 57% of the 2012-2014 allowances offered for sale -- the lowest yield to date for this vintage of allowances -- and 100% of them were bought by just 4 compliance entities;

4)  In the 10 RGGI auctions, taken together, compliance entities have purchased 85% of all allowances sold;

3)  Due to trading on the secondary market, after the 10th auction purchases are settled, compliance entities will hold 95% of all RGGI allowances in circulation;

2)  All together, the 10 RGGI auctions have brought in more than $777.5 million for the 10 RGGI states;

and

1)  The RGGI states have collectively invested about 80% of the RGGI funds in strategic energy programs, most of which involve energy efficiency improvements in homes and businesses.   RGGI has created a website compiling the states' announcements on the success stories from these investments.

The next RGGI auction will be held March 9, 2011.  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

An adjudicatory hearing decision issued by MassDEP in September just came to my attention. The decision in the case, In the Matter of Town of Plymouth, is worth reading for those of you interested in the emerging issues related to concerns over nutrients and how nutrient discharges will be regulated in groundwater or surface water discharge permits.

What caught me eye about the decision, however, wasn’t its substance, but was instead its procedural history. The Town of Plymouth first obtained a permit for the groundwater discharge from its municipal wastewater treatment plant in 2000. The Eel River Watershed Association appealed that permit. (For my out-of-state readers, such permits are appealed administratively in Massachusetts.) Dispositive motions were filed in 2003 – but were never acted on. 

Although the Recommended Final Decision by the hearing officer (which was adopted by the MassDEP Commissioner) doesn’t provide the entire history, one assumes that Plymouth timely filed a renewal application before the permit’s 2005 expiration date. It took MassDEP until 2008 to issue a permit renewal – at which time the dispositive motions in the appeal of the 2000 permit were still pending. 

Not surprisingly, the Town of Plymouth and MassDEP filed motions to dismiss the appeal of the 2000 permit as moot, once the new permit was in effect. Equally unsurprisingly, those motions were granted. To give MassDEP its due, it has worked hard in recent years to shorten the time needed to resolve adjudicatory appeals. It is noteworthy that MassDEP issued the decision dismissing the appeal of the 2008 permit within two years. Nonetheless, it is sort of chilling that the resolution of a permit appeal can extend beyond the life of the permit being challenged.

Justice delayed is…, oh, never mind.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

One thing supporters of coal will be thankful for tomorrow is this week's announcement by the Environmental Protection Agency (EPA) that it has finalized two rules governing the underground sequestration of carbon dioxide.  Both rules are designed to support and facilitate the commercial development of safe, large-scale carbon capture and storage (CCS) technologies, perceived by many to be the best hope for the future use of coal.

The first rule creates a new "Class VI" injection well under EPA's Underground Injection Control Program through the the Safe Drinking Water Act.  Elements of the rule are based on the existing regulatory framework, but tailored to address the unique issues carbon dioxide can create, such as the fact that it floats and moves within subsurface formations, and corrodes its surroundings when combined with water.   Although CCS has been used on a smaller scale for years, such as to facilitate enhanced recovery of oil, the large volumes that are anticipated to be injected as part of a full-scale deployment of the technology present different issues entirely.

The rule provides guidance on some, but not all, of the areas highlighted as in need of further support in the August report of the Interagency Task Force on CCS.  For instance, the rule outlines characteristics for siting CCS wells, requirements for construction and operations, automatic shutoff systems.  It also provides a recommended 50-year monitoring program post-injection as well as clarifying financial responsibility requirements for emergencies, site closure and cleanup.  The rule also provides considerations for transitioning Class II permits for existing enhanced recovery wells to Class VI, based primarily on whether the primary purpose is assisting with the recovery of oil or long-term storage of the CO₂ itself.

The second rule finalizes the requirements for CCS ventures under the mandatory greenhouse gas reporting rule (Subparts RR and UU of 40 CFR Part 98).  The rule requires permit holders to create a plan to monitor, report and verify the amount of CO₂ sequestered, using a mass-balance approach, and could lay the groundwork for those captured tons to become valuable offsets under future policies.  The reporting requirement begins in 2011.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Daily Environmental Report noted earlier this week that Bob Perciasepe, EPA Depute Administrator, has told the National Environmental Justice Advisory Council that environmental justice is the “largest remaining challenge” that EPA must address systematically. This is not particularly surprising, since Lisa Jackson has made EJ a priority.

However, I was left nearly speechless by the statement in Daily Environment Report that Perciasepe indicated that

Polluted communities are also not likely to be targeted for business investment, meaning those communities have limited economic opportunities in addition to disproportionate pollution burdens.”

Once again, I’m left wondering what planet EPA is from. Those in the private sector would be stunned by linking the need for EJ with the need for more economic development in poor communities. EJ can be a real issue. Where racial minorities suffer disproportionate burdens because of their race, everyone should be concerned.

At the same time, however, EPA has to realize that EJ requirements are far more likely to retard economic development than encourage it. Where EJ concerns prevent economic development because organized groups label them as LULUs, or Locally Unwanted Land Uses, that may be an EJ success, but it doesn’t contribute to economic development. We can’t wave a magic wand and make the private sector want to site a nice clean office park in a distressed area, just because the residents would prefer that to some slightly messier use.

Even where properties are already contaminated, my experience is that EJ concerns are more likely to discourage redevelopment than encourage it. Brownfields properties are challenging enough without an additional layer of EJ review. One would think that anyone cleaning up contaminated property for almost any kind of economic development would be welcomed by the communities surrounding such properties. However, EJ requirements too often scare aware Brownfields developers. Again, this may be an EJ victory and it may be what the communities want, but to suggest that systematic integration of EJ issues into EPA’s programs will increase economic development in poor communities is, to put it gently, wishful thinking.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The cap in the nation's first mandatory cap-and-trade system is probably set too high.  As reported by ClimateWire this morning, it seems increasingly likely that participants in the Regional Greenhouse Gas Initiative (RGGI) will easily meet and beat RGGI's ultimate goal, even without any changes or reductions actually caused by the program.

RGGI's initial aim was to cut CO₂ emissions from large power plants in the 10-state region to 10% below 2005 levels by 2018.  This plan involved two stages: one with the cap stabilized at 180 million tons CO_2e from 2009-2014, and the second, from 2015-2018, with a cap declining by 2.5% each year.   However, in the two years that the program has been in action, emissions have already declined to 33% below 2005-levels.   Although the decline has been commonly attributed to the economic downturn, NYSERDA found that fuel switching by power suppliers from coal and petroleum to natural gas (cheaper than it was in 2005) has in fact had the greatest impact, contributing 31.2% of the decline. 

At a meeting on November 12, RGGI, stakeholders gathered to hear briefings on projections for future emissions, why the carbon footprint was overestimated thus far, and what changes need to be made to RGGI going forward.  Consultant IGF International reported that although emissions in the region are predicted to grow steadily into the future, they will stay well below RGGI's initial reduction target through 2030, even without additional reductions caused by the energy efficiency and renewable energy programs funded by RGGI itself.  Their data suggests that the RGGI cap would have to be tightened from 10% reductions by 2018 to 22% or higher, for the cap-and-trade system to have any impact at all. 

The RGGI member states are currently involved in evaluating the program, and could make changes to the cap, as well as the rest of the program, before the second compliance phase begins in 2012. It will be interesting to see what decisions they make over the next year.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

EPA has finally released it long-awaited PSD and Title V Permitting Guidance for Greenhouse Gases, also known as the GHG BACT Guidance. E&E News quoted Gina McCarthy as saying that GHG permitting would be “business as usual” and that the transition to issuing PSD permits for GHGs would be relatively smooth. 

Not.

It’s certainly true that the GHG BACT Guidance says nothing particularly new about how permitting agencies should perform BACT reviews. Giving credit where credit is due, I’ll complement EPA for using plain English and describing the basic BACT process about as cogently and concisely as I’ve seen. The BACT Guidance also heavily emphasizes the use of energy efficiency measures in attaining BACT for GHGs, as has been expected. That should provide at least some comfort to the regulated community.

Having praised the BACT Guidance, I’ll now do my best to bury it. I just don’t think anyone can truly say that it actually provides any guidance to either state permitting agencies or the regulated community regarding what in fact will constitute BACT. In fairness to EPA, I think that’s because they don’t know, but that’s hardly a comforting thought. It’s got to be worrisome to regulated facilities that they are now subject to a requirement to demonstrate BACT for GHG when they make a major modification at their facility and they simply don’t know what it will take to comply with the GHG requirements.

Take, for example, EPA’s discussion of when an agency requirement to evaluate a particular control option might be considered to “redefine the source.” The BACT Guidance discusses this issue for six pages, but provides what seems to me to be no guidance at all. The Guidance repeats the bromide that

EPA has recognized that a Step 1 list of options need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source proposed by the permit applicant. BACT should generally not be applied to regulate the applicant’s purpose or objective for the proposed facility.

However, the Guidance then ominously states that permitting agencies must

take a ‘hard look’ at the applicant’s proposed design in order to discern which design elements are inherent for the applicant’s purpose and which design elements may be changed to achieve pollutant emissions reductions without disrupting the applicant’s basic business purpose.

If that doesn't send chills down the spines of engineers everywhere, I don’t know what will.  Similarly, the guidance says that "EPA continues to believe that permitting authorities can show in most cases (my emphasis) that the option of using natural gas as a primary fuel would fundamentally redefine a coal-fired electric generating unit."  Unfortunately, the guidance then notes that where a power plant already combusts another fuel, such as for start-up purposes, it would be appropriate to evaluate whether use of that fuel might be BACT.

The Guidance is too long to summarize fully in a blog post, but I do want to leave you with one image, courtesy of EPA. In discussing the requirement to identify energy efficiency options, the Guidance helpfully states that not “every conceivable improvement that could marginally improve the energy efficiency of the new facility” need be listed. In making this concession, EPA cited to Sierra Club v. EPA, which “recognized the undesirability of making the BACT analysis into a ‘Sisyphean labor where there was always one more option to consider.’”

We can only hope that EPA and state permitting agencies really take those words to heart as this process unfolds. I’m not optimistic.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Almost all – 46 – states have delegated programs under the Clean Water Act. One criterion that EPA must determine has been satisfied before approving delegation is that the state has the ability to "abate violations of the permit … including civil and criminal penalties and other ways and means of enforcement."

EPA’s regulations provide that this criterion will be met if :

State law allows an opportunity for judicial review that is the same as that available to obtain judicial review in federal court of a federally-issued NPDES permit. A State will not meet this standard if it narrowly restricts the class of persons who may challenge the approval or denial of permits….

With respect to citizen suits, this language seems fairly clear. As long as the state does not impose heightened standing requirements, the same opportunity for judicial review exists.

When EPA approved delegation of the NPDES program to Alaska, notwithstanding that Alaska has a version of the so-called “English Rule,” which requires that losing parties pay fees to the winners, various citizen groups challenged the delegation, on the ground that the Alaska fee shifting provision means that, as a practical matter, Alaska restricts access to the courts in ways not permitted under the CWA. Last week, in Akiak Native Community v. United States Environmental Protection Agency, the 9^th Circuit Court of Appeals upheld the delegation. 

I actually wish that the Court had gone further than it did. As noted above, I think that, in the absence of different standing requirements, there is a comparable “opportunity” for judicial review. Instead, the Court’s decision was more limited, holding only that, as a result of certain limits on Alaska’s application of the fee-shifting rule, the plaintiffs had not met their burden to establish that EPA’s decision was arbitrary and capricious. Indeed, the Court noted that EPA could potentially reverse the delegation if it later finds in practice that Alaska courts are applying the fee-shifting provisions in ways that discourage citizen plaintiffs.

I just want to know – what’s so bad about fee-shifting?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I’ve always thought that implementation of EPA’s GHG rules for stationary sources was inevitable in the absence of climate change legislation. The Supreme Court told EPA that GHGs are a pollutant under the Clean Air Act. Given the decision in Massachusetts v. EPA, EPA’s subsequent regulatory moves have been pretty much unavoidable. 

Since the statute seems to mandate GHG regulation, only Congressional action could block the rules. While a House majority seemed plausible, even before the election, getting 60 votes in the Senate always seemed a much stiffer proposition. Moreover, one could always expect an Obama veto, if legislation precluding EPA’s rules somehow were to get through Congress. Now, I’m not so sure.

If it turns out that there are enough coal state Democrats to move the legislation through the Senate, and if the supporters keep attaching the legislation as a rider to bills that the Administration does want, it may become difficult at some point for Obama to continue to veto it. A more tantalizing possibility is that the GOP might use such legislation as a bargaining chip with Obama over energy legislation, agreeing to support energy legislation, but only if Obama agrees to a prohibition on EPA GHG rules for stationary sources. In that situation, would Obama throw the GHG rules under the bus? Now that’s an interesting scenario.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Stop the presses: According to the Daily Environment Report, EPA’s director of the Office of Federal Activities, Susan Bromm, has acknowledged that concerns about climate change and environmental justice are “contributing to the size, cost, and time-consuming nature of environmental impact statements….” Nonetheless, Ms. Bromm apparently asserted that these "analyses do not have to be overwhelming,” and she blamed, at least in part, agencies which “overreact to the fear of litigation.”

Not surprisingly, a speaker on the same panel from DOT felt otherwise. According to Helen Serassio, an attorney at DOT:

We’ve gotten to the point where they’re kind of out of control.

Ya’ think?

The notion that agencies are overdoing environmental reviews under NEPA because they are unreasonably concerned with potential litigation would strike many as absurd. It’s so easy for a judge, who doesn’t want to be the one who approved a nuclear plant that later has some kind of disaster, to say that the EIS wasn’t sufficiently thorough. For any worst case analysis, there’s always something worse, and for any nervous judge, it’s just too easy to ask for that additional analysis.

What’s lost from the discussion is any perspective, any sense that compliance with NEPA costs money and that delay of important projects imposes its own set of costs. I’m a supporter of NEPA. The requirement to assess environmental consequences of federal decisions certainly improves those decisions. However, those reviews do come with costs attached and, from where I sit, the judicial thumb is firmly on the side of more review at this point, without regard to any kind of cost-benefit analysis. As Ms. Serassio said:

We’ve gotten to the point where they’re kind of out of control.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Is mercury a local problem or not? For years, power plant operators have claimed that mercury deposition is really a global problem. Environmentalists have pointed to studies arguing that hot spots affected by local emissions do exist. This week, according to the Cape Cod Times, John Colman, a USGS researcher – hardly likely to be a shill for the power industry – is going to report results of a study showing that mercury accumulation in both soil samples and fish tissue are comparable in Cape Cod and the Olympic Peninsula in Washington. Given prevailing wind directions, it’s hard to find a local source for mercury on the Olympic Peninsula.

According to the Cape Cod Times, Mr. Colman said that "the idea that burning coal is screwing up fish all over the Northern Hemisphere is kind of terrifying.” And I’ll bet that the United States power generation industry finds it terrifying that it may have to make very substantial – and costly – reductions in mercury emissions even though US emissions are about 5% of the world total and may not have a significant impact on the US environment.

I’m not discounting the need for regulation in the United States. Mercury is a real toxin. However, it would also be wrong to ignore the global aspect. To regulate the US power generation industry because doing so will solve a significant public health and environmental problem is one matter. To regulate the US power generation industry because we have to send a signal to the world that we are willing to regulate ourselves in order to persuade China to control mercury from its own coal-fired power plants is another. When the state of our nation is such that businesses are looking to put “China-Free” labels on their products, it will not be easy to persuade a significant segment of the population to support costly mercury controls when there is evidence that a substantial part of the problem stems from cheap coal-fired energy in China that delivers a twofer – allowing China to make goods more cheaply, while exporting its mercury pollution downwind to the United States.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As Superfund practitioners know, federal NPL sites are generally settled on the basis that the PRPs will first attain interim cleanup levels, though final cleanup levels are not determined until EPA is actually ready to issue its certification of completion of the remedy. Moreover, EPA insists that, should any ARARs change during the course of the cleanup, whatever standards are in effect at the time of site closure will be applied.

We saw the impact of this on the ground in 2001, when EPA revised the Safe Drinking Water Act maximum contaminant level, or MCL, for arsenic from 50 ppb to 10 ppb. The new MCL became an ARAR for Superfund, and the expected date to attain cleanup standards suddenly got pushed back at a number of Superfund sites.

Even at the time, it was not clear that 10 ppb was the last word. EPA’s proposed rule had provided for a 5 ppb standard, but EPA eased off in response to public comment; small water suppliers can have great difficulty in attaining a 5 ppb standard. 

Earlier this year, EPA announced the availability of a new toxicological review of arsenic. That review suggested greater cancer risks from arsenic. Yesterday, EPA’s Science Advisory Board issued a report generally supportive of the new toxicological review. If the result is a further tightening of the MCL, more stringent cleanups, through the ARARs process, will follow ineluctably. 

I don’t normally post about developments this far from concrete regulatory changes. However, given the way the Superfund cleanup process works, PRPs negotiating cleanups of sites with arsenic groundwater contamination have to begin to factor this issue into their strategy now, because it’s not too early to starting thinking about cleanup cost estimates for alternative - meaning lower - arsenic MCLs.

Having put you on notice, I now have to tell one war story; if you don’t feel the need for a war story, you can stop reading here. In 1991, I was involved in negotiating the settlement for the cleanup of the Coakley Landfill Site, in southern New Hampshire. The federal government was a PRP. In Coakley, the government made a substantial (seven figure) contribution to the settlement. However, because the private PRPs had argued in negotiations with EPA that there was no need to treat groundwater – notwithstanding that the ROD remedy selected by EPA required groundwater treatment – the federal government as PRP insisted on getting a refund of the share of its payment attributable to the groundwater remedy, should EPA finally certify completion of the remedy without there ever having been an active groundwater treatment system in operation.

A few years later, the PRPs indeed persuaded EPA to eliminate active groundwater treatment. At the time, the expected date for certification of completion was 2007. In 2001, EPA changed the arsenic MCL from 50 ppb to 10 ppb. I don’t need to tell you that there is an arsenic issue at the Coakley Site. Now, the expected date for certification of completion is 2021. If, before then, EPA were to further lower the arsenic MCL, who knows what will happen to the expected date for certification of completion? The private PRPs may never have to reimburse the federal government!

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last March, I noted that Gina McCarthy’s belief that, in the near term, the biggest impact on GHG emissions would come from EPA’s traditional regulatory programs, rather than through GHG regulation. A report recently released by Credit Suisse indicates that she might be right. Looking at EPA’s upcoming promulgation of the Clean Air Transport Rule and the mercury MACT rule, Credit Suisse predicts that between 50 and 69 gigawatts of old coal plants will be retired between 2013 and 2017 as a result of implementation of the two rules. Credit Suisse also predicts that approximately 100 gigawatts of capacity will require significant additional investment to comply with the rules.

For those with money to invest, Credit Suisse recommends clean plants in dirty markets – a not surprising conclusion. 

For those more interested in the regulatory side of things, it is worth noting that the Credit Suisse analysis is admittedly fairly simplistic. They pretty much just looked at small plants lacking scrubbers as candidates for closure. As the report puts it:

environmental control costs are non-linear (they’re more expensive on a unit of capacity basis at a small coal plant) and because these plants are generally older and less efficient in energy conversion.

Without details about individual plants, the Credit Suisse approach is certainly reasonable. I note only that, where plants are not closed, installation of scrubbers for SO₂ or SCRs for NO_x actually increases GHG emissions, because scrubbers and SCR require additional station service, making the plants less efficient to operate than previously. Overall, I don’t doubt that the closure of coal plants will outweigh the decrease in efficiency in the coal plants that remain operational, but both effects should be included in any analysis of the impact of the Transport Rule and the MACT rule on GHG emissions.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

One of the first lessons I learned as a summer associate, more years ago than I care to remember, is that the probability of a successful estoppel claim against the government is approximately the same as the probability that there is a Santa Claus. After the recent decision from the District of New Jersey in FMC Corporation v. American Cyanamid, the probability of a successful estoppel claim may still be low, but it isn’t zero. 

FMC involves claims concerning the Higgins Farm Superfund Site, in Franklin, New Jersey. According to the decision, FMC contacted the State of New Jersey in 2001 in order to obtain information concerning the scope of its potential liability. One of the questions involved natural resource damages. New Jersey determined that it would not assess NRD for the site and that conclusion was communicated by telephone to FMC in late 2002. As settlement negotiations continued, in 2003, New Jersey actually provided to FMC a copy of the memorandum that had been prepared documenting that no NRD would be assessed. 

The reason for the determination apparently was a NJDEP policy that, where no off-site groundwater contamination existed, no NRD would be assessed. However, that policy changed later in 2003, after a change in administration at NJDEP. Ultimately, in 2006, NJDEP filed suit against FMC seeking natural resource damages. In responding to FMC’s motion to dismiss, NJDEP made the argument most of us would expect:

the doctrine of waiver should not be applied under these circumstances [because] a government agency may change policies for the benefit for the public without creating rights in parties who claim to have relied on the old policy.

The Court wasn’t buying it. While acknowledging that “the application of waiver or estoppel principles to government actions is to be most strictly limited,” the Court concluded that New Jersey had expressly waived its right to recover NRD. It was significant to the Court that NJDEP did not qualify the waiver in any way. Given the absence of qualifying language, the Court concluded that to allow NJDEP to bring NRD claims after such an unqualified waiver “would serve to completely alter the calculus of the litigation and undermine settlement negotiations that parties engage in with the State.”

The biggest lesson of FMC will probably be for government attorneys – make sure you qualify your waivers. Nonetheless, it does suggest that, at least in the right case, the government will be held to its promises. 

Merry Christmas, FMC.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

As EPA begins to regulate nanomaterials more aggressively, but as concerns remain regarding EPA regulatory efforts, private efforts to regulate nanomaterials continue. ASTM recently announced that it is forming a new subcommittee on Nano-Enabled Consumer Products. The focus of the subcommittee will be on uses of nanomaterials containing silver. In particular, ASTM noted that it would be considering the following possibilities:

Standards for measurement of silver in textiles and liquids (including atomic spectroscopy to  assess mass)

Standards for evaluating the form of silver in textiles and liquids (including: electron microscopy to evaluate size, shape and chemical composition; ultraviolet-visible spectrophotometry to evaluate size using surface plasmon resonance absorbance)

Standards for assessment of nanosilver exposure potential from use of textile and liquid consumer products (including: release from consumer products in biological fluids [skin surface, lung, gastrointestinal tract]; release from consumer products in environmental matrices [air, water, soil] throughout a product lifecycle).

There is little doubt that nanomaterials are a brave new world – one which indeed scares some people, notwithstanding nanotechnology’s promise. We are also entering into a brave new world of nanotechnology regulation – one which scares me a bit, notwithstanding my recognition that some careful regulation of nanomaterials may be appropriate.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In a crisply written opinion by Judge Posner, the 7^th Circuit Court of Appeals just reversed a district court judgment against Cinergy in the NSR case involving Cinergy’s power plant in Wabash, Indiana, and directed that judgment enter for Cinergy. It is not obvious that the case will have wide applicability, but it is certainly worth noting.

The first key issue in Cinergy was whether proposed new projects would be subject to NSR review if they were expected to result in an increase in annual emissions or only if they would result in an increase in the hourly emissions rate. In an earlier ruling, the 7^th Circuit decided that annual emissions, rather than the hourly rate, was the appropriate test provided for in the statute and regulations.

However, when the case came to trial, a twist occurred. The jury only found violations with respect to four projects. All of those projects occurred between 1989 and 1992 – and during that time, Indiana’s SIP stated that the applicable test was whether a project would result in an hourly emissions rate increase. Even more complicated, EPA had approved the SIP, even though it also told Indiana that the SIP had to be changed. Indiana had apparently changed its rules prior to 1989, but failed to submit a SIP modification until 1994. The Court ruled that EPA must be held to the SIP that it approved and that was in effect at the time of the projects.

The Clean Air Act does not authorize the imposition of sanctions for conduct that complies with a State Implementation Plan that EPA has approved. The EPA approved Indiana’s plan with exceptions that did not include [the improper test.]

Calling EPA’s approval of the SIP a “blunder,” the Court said that EPA must live with it.

It’s not obvious that this decision will have much relevance outside cases in Indiana involving projects implemented during the time Indiana’s SIP contained the wrong test. However, it is a lesson that the details do matter – in particular, the details of the relevant SIP.

The second aspect of the case is also a lesson in the nitty-gritty of litigation – and may have broader applicability. With respect to NOx emissions [it is not clear why the NOx allegations were not controlled by the prior part of the decision], EPA relied on two experts to testify that the projects would result in increases in annual emissions. However, both experts relied on a formula used for baseload power plants. Unfortunately for EPA, the Wabash facility is a cycling plant, not a baseload plant. The model used by EPA's experts assumes that an increase in capacity would result in a proportionate increase in output. However, that assumption is not valid for a cycling plant. The Court thus ruled that the experts’ opinions should not have been admitted; without them, EPA had no evidence of increased emissions and judgment had to enter for Cinergy.

This aspect of the case provides a cautionary lesson for the government (though I wouldn’t start dancing in the street if I were defending one of these cases). I think that there has been a sense that, if the government wins the legal battle on the issue of annual emissions v. hourly emissions rate and wins the routine maintenance argument, then the defendants are sunk. This case is a reminder that the facts still matter and that the government has to prove its case based on evidence regarding the specific projects being challenged.

What a notion.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Earlier this week, I posted about the dire prospects for climate change legislation following the fall elections. The alternative to legislation has always been regulation under existing Clean Air Act authority, so it’s appropriate as a follow-up to briefly examine the pressures on EPA as it moves forward with its stationary source GHG regulations. Two headlines from the trade press today brought home just what a tightrope EPA is walking.

The first headline, from the Daily Environment Report, was to the effect that a “Ban on New Source Construction [Is] Possible In States Without Greenhouse Gas Permitting.” Specifically, Raj Rao, of EPA's Office of Air Quality Planning and Standards, said states that have not taken steps to implement permitting requirements by Jan. 2 could face the construction ban.

The second headline might be described as a corollary of the first. Today’s GreenWire notes that “New rules spark bipartisan fury in midterm elections.” Well, duh. Is it any surprise that in the face of continuing unemployment near 10%, regulations that even EPA acknowledges might result in construction bans in some states would be a topic of debate in congressional elections? In fact, the GreenWire piece was not even primarily about the GHG regulations and made no mention of the potential construction ban. It was largely about other EPA rules, such as the boiler MACT rule.

I have a certain amount of sympathy for EPA on this one. As I’ve noted previously, to a certain extent, EPA is just doing its job. On GHGs, it really has no choice but to regulate. While I have doubts about the legality of the Tailoring Rule, the alternative is only more onerous. The boiler MACT rule is another matter – and is complicated enough to warrant several posts of its own. However, EPA’s options are limited given the stringent provisions Congress itself wrote – and a Republican President signed into law. On conventional pollutants, the science is driving EPA towards lower and lower NAAQS, and more stringent rules on emitters follow like night follows the day.

Just so my friends in the regulated community don’t think I’ve gone soft, I will point out that it is at the least disingenuous for Administrator Lisa Jackson to say, as she was quoted in GreenWire, that:

The Clean Air Act does not place our need to increase employment in conflict with our needs to protect public health.

Somehow, that message has never gotten to the EPA and DOJ lawyers briefing appeals of EPA regulations, where those opposing the regulations say that they are uneconomic, while EPA's invariable rejoinder is that the Clean Air Act doesn't allow for the consideration of the cost of regulations in deciding how stringently to regulate.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It’s been obvious for some time that Republican victories in next month’s elections will only make it more difficult to pass climate legislation. However, perhaps the most telling reminder of the difficulty in passing climate legislation came last week from the Democrats, not the GOP. Governor Joe Manchin, running for Senator Byrd’s seat, was endorsed by the West Virginia Coal Association. Among the bullets noted in the press release, the WVCA noted that:

Governor Manchin opposes any form of Cap & Trade legislation that threatens the jobs that our coal mining families depend on for their livelihoods. 

The press release also notes that Manchin would work to pass legislation prohibiting EPA from regulating carbon using existing Clean Air Act authority. According to Greenwire, Bill Rainey, the President of the WVCA stated that “we've witnessed this governor put his finger in the chest of EPA officials."

In fact, given that he is from West Virginia, it appears that Manchin has been a good governor and would probably be a good senator – someone who could perhaps work across the aisle with senators like Lindsey Graham. However, while Tea Party types often talk about RINOs – Republicans in Name Only – environmentalists have to look at someone like Governor Manchin and think that, at least on climate change, he’s a DINO.

The environmentalists’ problem, even aside from potential losses in November, is that, on climate change, a newly-elected Senator Manchin would not be the only DINO.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If environmental lawyers have been wondering when they’re going to get their share of economic stimulus, it’s time to stop wondering. Last week, Cynthia Giles, EPA’s Assistant Administrator for Enforcement and Compliance Assurance, announced that her office would be focusing on higher impact cases.  Giles also noted that, by the end of this month, EPA would have more than 200 criminal investigators.

If it weren’t for one statement by Giles, I don’t think that this would be news. Enforcement numbers always fluctuate. Environmental and watchdog groups always criticize EPA and state agencies when the numbers go down, and EPA and state agencies always respond to that criticism.

What caught my eye, however, was this. According to the Daily Environment Report, Giles said that the best measure of the effectiveness of EPA’s enforcement efforts is

how many people are charged and how many people are convicted, and on those scores I think we're doing pretty well.

Sorry. I don’t buy it. If everyone’s complying, then no one gets charged and no one gets convicted. I’m not naïve. Not everyone does comply and vigorous enforcement is necessary to ensure that compliance does happen. In fact, most of my clients are large corporations who comply with environmental laws and they often appreciate vigorous enforcement, because it helps ensure a level playing field. 

At the same time, however, it’s important to recognize that enforcement numbers don’t particularly correlate with the level of compliance. Nor are they a good measure of whether environmental agencies are doing their job well. Instead, enforcement numbers are mostly just red meat to advocacy groups who either want scalps, want to pressure agencies to do more, or both.

Giles’s remarks may be good news for environmental lawyers, but that doesn’t mean that more enforcement is the best use of government resources to increase environmental protection.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A recent amendment to the EPA’s Mandatory Reporting of Greenhouse Gases Rule (40 CFR part 98) requires companies that report their emissions to also provide information on corporate ownership,  North American Industry Classification System (NAICS) codes, and whether any of the emissions come from a cogeneration unit. The goal behind collecting this information is to gain a better understanding of the aggregate greenhouse gas (GHG) emissions from corporations and specific industry sectors, and identify potential differences in emissions between otherwise similar facilities due to cogeneration. Such information can be used to guide future GHG regulations and mitigation strategies. The rule was signed by Administrator Jackson last week and is to be published the Federal Register shortly. 

The final rule requires facilities and suppliers reporting GHG emissions (large industrial facilities that emit 25,000 metric tons or more per year, plus suppliers of fossil fuels and industrial gases, and a few others) to include, in their first annual GHG emission report due on March 31, 2011,  the name and address of each US parent company and a breakdown of the percentage share that each parent owns. It also requires the facilities to report any NAICS codes that apply to the facility – both the primary code as well as any others that are appropriate.

The third requirement takes the form of a checkbox indicating whether the report includes emissions from a cogeneration unit, defined by EPA as “a unit that produces electrical energy and useful thermal energy for industrial, commercial, or heating or cooling purposes, through the sequential or simultaneous use of the original fuel energy.”  In the final rule, EPA notes that there are no current programs that require facilities to identify whether they have cogeneration units – EPA’s Combined Heat and Power Partnership is only a voluntary program, and while the Energy Information Administration collects information on cogeneration from power generators greater than 1 megawatt, this program likely does not cover all of the facilities and suppliers subject to 40 CFR part 98.

The information collected on cogeneration through this rule is just a start, and useful primarily to merely identify the facilities using cogeneration. As EPA correctly notes, the information likely will not be sufficient to determine the quantity of GHG emissions occurring from particular NAICS sectors or cogeneration units within an individual reporting facility, or the degree to which cogeneration emissions at the applicable facilities displace onsite use of fossil fuel or other emissions from centralized electric generation. Nonetheless, information on the types and characteristics of facilities that use cogeneration could be important to the future development of GHG mitigation strategies.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Technology geeks such as myself love nanotechnology. I think it’s the future of everything – including the solution to environmental problems ranging from climate change to Superfund cleanups. However, there are concerns about the toxicity of nanomaterials.

Last Friday, EPA took a significant step in the regulation of nanomaterials by publishing significant new use rules – SNURs – for both single- and multi-walled carbon nanotubes. Any person manufacturing, importing, processing, or using SWCNT or MWCNT (and you’ve got to love nanotechnology, if only for the proliferation of new acronyms), will be subject to the SNURs. The SNURs are based on consent agreements EPA had previously entered into with the original manufacturer of the nanotubes. Redacted copies of the consent agreements can be found at EPA's regulation page.  

In terms of substance, the rules include both a worker protection component, requiring impervious clothing and use of full-face respirators in certain contexts, and a requirement to prevent releases of the nanotubes to water.  Uses in which the nanotubes have been fully reacted or enclosed in a polymer matrix are exempt from the rules.

If nanomaterials really hold the promise that we hope, we’re going to start seeing many more of these rules in the next few years. It must say something that we can track the progress of a new technology by the number of regulations issued by EPA, but I don’t think I’ll go there today.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Discussion of the Smart Grid usually focuses on efficiencies that may be achieved by a system that responds to real time information about energy production, distribution and consumption. But the development of this advanced digital infrastructure, with two-way capabilities for communicating information, controlling equipment, and distributing energy, also presents some legitimate information security and privacy concerns. For example, a disgruntled employee or a terrorist with the right computer skills could penetrate a network and alter load conditions to destabilize the grid in unpredictable ways. The grid may also be compromised by inadvertent events such as equipment failures and natural disasters. 

On the privacy side, the Smart Grid will greatly expand the amount of data that can be monitored, collected, aggregated and analyzed. For example, information about specific appliances and generators used by consumers can be tracked from the electric information “signatures” they produce. The driver of an electric vehicle will also leave an electrical roadmap of her travels. 

In response to these concerns, the National Institute of Standards and Technology (NIST) released guidance earlier this month entitled Smart Grid Cyber Security Strategy and Requirements. The three-volume guidance document is intended for “Smart Grid stakeholders” including vendors of energy information and management services, equipment manufacturers, utilities, system operators, network specialists and regulators. 

• Volume 1 presents a risk assessment framework and describes high-level security requirements;
• Volume 2 focuses on privacy issues in personal dwellings and recommends how entities that participate in the Smart Grid might address these issues; and
• Volume 3 is a compilation of supporting analyses and references.

Kudos to anyone who can decipher the NIST’s “Logical Reference Model” pictured below. Nevertheless, the guidance provides a useful framework for addressing these complex issues.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When clients are threatened with citizen suits – and particularly when the threatened litigation involves a matter where EPA or a state regulatory agency is heavily involved, the clients always want to know why they can’t somehow get rid of the citizen suit, given that EPA is on the case. The answer is that they can – but only in limited circumstances.

The recent decision in Little Hocking Water Association v. DuPont confirmed this answer in the context of RCRA. The Little Hocking Water Association provides public water to certain communities in Ohio, directly across the Ohio River from a DuPont plant which uses , also known as PFOA or C8 – also known as the contaminant du jour. According to the complaint, the Little Hocking wells have among the highest concentrations of C8 of water supply wells anywhere and its customers have among the highest C8 blood levels anywhere. Little Hocking Water Association thus sued DuPont under RCRA’s citizen suit provision, claiming that DuPont’s release of C8 had created an “imminent and substantial endangerment."

Section 7002 of RCRA contains provisions precluding such citizen suits if either EPA or a state “has commenced and is diligently prosecuting” an action under RCRA to abate the endangerment. In the DuPont case, releases of C8 from the DuPont facility had been the subject of at least two administrative orders on consent entered into by DuPont and EPA. However, consent orders aren’t the same as “an action” under § 7002 or § 7003 of RCRA – and they thus do not preclude a citizen suit.

DuPont tried the next best argument – that EPA had primary jurisdiction over the regulation of C8 – and that the existence of EPA’s regulatory authority and the issuance of the consent orders meant that the courts should defer to EPA. DuPont’s argument was that a court could not fashion a remedy in the case without essentially establishing a new cleanup standard for C8 and that doing so is the job of EPA, not the courts.

The Court gave the primary jurisdiction argument short shrift. As the Court noted, using the doctrine of primary jurisdiction in citizen suits would dramatically reduce the scope of such suits. Since Congress provided a citizen suit mechanism – and provided very specific, discrete, circumstances in which citizen suits are precluded – it doesn’t make sense to use primary jurisdiction to establish another defense, particularly where the defense would almost eliminate the remedy. 

The bottom line? If you don’t want to face a citizen suit (and you’re not in compliance), get yourself sued by EPA or your state regulatory agency. The mere existence of EPA or state regulation, even if requirements are embodied in a consent order, is not enough.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On a day when ClimateWire reported that thousands of walruses are stuck on land because their usual summer home – sea ice – has disappeared, I’m beginning to wonder whether EPA’s stationary source GHG rules are similarly at risk. It may not be difficult for EPA to brush off a fairly over the top letter from Texas which basically asked EPA “What part of ‘hell no” don’t you understand?”

However, today Greenwire reports that Governor Freudenthal of Wyoming – a Democrat – is asking EPA to defer enforcement of GHG stationary source regulation. So is Ben Grumbles, head of the Arizona Department of Environmental Quality. Grumbles may be a Republican, but he was head of the water office under the Bush EPA, so he has to have some idea of the legal pressure for EPA to regulate GHGs following Massachusetts v. EPA. 

In addition to these latest requests from the states, ClimateWire had a separate story today which noted that Senate efforts to bar EPA from regulating GHG may still be alive and that Democrat Senators Nelson and Dorgan may support attaching the legislation to the EPA appropriations bill. Readers of this blog know that I am a fan of Senator Graham’s willingness to consider climate legislation, but EPA has to be worried if it is counting on Senator Graham’s prediction that the amendment will fail.

I have long said that EPA’s regulations are here to stay, because they are not only defensible, they are - in some form, at least - pretty much mandated by Massachusetts v. EPA. However, where the prevailing metaphor for the November elections is that of a GOP tsunami, one has to wonder whether there is a realistic possibility that, one way or another, EPA regulation of GHG under existing authority could be subject to significant delay.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The Regional Greenhouse Gas Initiative (RGGI) auction program celebrated its second birthday this week by holding the 9th regional auction of CO₂ allowances.  As today's report highlights, the auction brought a bittersweet first for the 10-state program: unsold allowances from both the current and future regulatory periods.  Bidders bought only 75% of the 45.6 million 2010-vintage allowances offered and just 61% of the 2013-vintage allowances, with both auctions closing at the mandatory floor price of $1.86.   Not surprisingly, given these results, participation in the auction was down -- the 2010 auction garnered bids from 45 entities, 92% of whom were regulated generators or their affiliates, down from March's relatively robust participation of 51 bidders.   According to today's report, regulated entities have purchased 84% of all allowances sold in Auctions 1-9, and through trading on the secondary market, will hold 95% of the allowances in circulation, once the allowances sold in Auction 9 are distributed.

Under the RGGI rules, the leftover allowances from this week's auctions may be sold at a future date, or a state may choose to retire them.  Since many people believe RGGI allowances to be over-subscribed, retiring some or all of these leftover allowances might be one way for the RGGI states to re-balance the market and encourage further reductions in emissions. 

Even at the floor price, the RGGI proceeds keep growing.  In the last 2 years, the auctions have brought in $729, 281,959 for the 10 states, who are collectively investing 80% of the funds in state-based energy programs: 60% in energy efficiency programs, 10% to accelerate deployment of renewable energy technologies, and 10% to direct consumer benefit programs, such as assistance to low-income ratepayers.  RGGI, Inc. noted in its press release accompanying the market monitor report the hopes that this "auction and invest" design will be a model for a national program as well as other regional programs like the Western Climate Initiative and the Midwest Greenhouse Gas Reduction Accord. Since regional programs are likely to be the model for the foreseeable future, this certainly seems like a possibility.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Sometimes, the headline writes the story. EPA’s TMDL program under the Clean Water Act has been the subject of so much litigation since its inception that EPA has a web page devoted to the status of litigation on the establishment of TMDLs.

Bringing things close to home, the Conservation Law Foundation and the Coalition for Buzzards Bay filed suit late last month, challenging implementation by MassDEP and EPA of the TMDL program for certain embayments on Cape Cod and Nantucket. (Full disclosure time – this firm represents the CBB on unrelated matters.)

The law suit claims that MassDEP erred in determining the waste load allocation, or WLA, in establishing the TMDLs for the embayments, because it failed to identify septic systems, stormwater systems, and wastewater treatment systems as point sources. (Since we also represent wastewater treatment system operators – though none that are the subject of these TMDLs – I think that, like Joe Friday, this is going to be a “Just the facts, ma’am,” post.)

With respect to stormwater systems, MassDEP determined that systems located less than 200 feet from the embayments were point sources, but that those farther away were not. The basis for this determination, according to the complaint, was that the more proximate systems in fact discharge to surface waters, whereas the more distant ones discharge to groundwater, so that there is no point source discharge to surface water. 

The complaint does not identify the basis for MassDEP’s conclusion that septic systems are not point sources, but presumably it is also based on a conclusion that the systems discharge to groundwater and thus are not point sources of surface water pollution.  

Without commenting on the merits – just the facts, ma’am – I will note that a determination that septic systems and stormwater drainage systems that discharge initially to groundwater are point sources under the CWA would have dramatic consequences for the regulation of nutrient pollution under the CWA. In situations where there are industrial sources of these pollutants, those industrial sources might be quite pleased to have someone else bear share of the burden of reductions necessary to meet the TMDL. Given the brouhaha over how state agencies would cope with permitting hundreds or thousands of new stationary sources under EPA’s Clean Air Act PSD program for GHGs, however, I cannot imagine that MassDEP – or other state environmental agencies – would eagerly assume the responsibility for permitting septic systems.

Why do I foresee more litigation in the TMDL program’s future?

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

I have previously expressed my distaste for public nuisance litigation to require reductions in GHG emissions. It cannot be more than a tactic in a war to the plaintiffs, because the chaos resulting from regulation of a global problem through a series of individual law suits has to be obvious to everyone. Now, apparently, that chaos is also obvious to the Obama administration, because it has filed a brief with the Supreme Court, asking the Court to accept a certiorari petition filed by the defendants in American Electric Power v. Connecticut, the 2^nd Circuit case in which the Court of Appeals held that the nuisance claims could proceed. 

The United States cited two reasons why the government should take the case and vacate the appellate decision. First, the brief states that the petitioners failed to demonstrate “prudential standing.” In other words, while they may have Article III standing, federal courts should “refrain from adjudicating ‘generalized grievances more appropriately addressed in the representative branches.’” As the brief notes:

The problem is not simply that many plaintiffs could bring such claims and that many defendants could be sued. Rather, it is that essentially any potential plaintiff could claim to have been injured by any (or all) of the potential defendants. The medium that transmits injury to potential plaintiffs is literally the Earth’s entire atmosphere – making it impossible to consider the sort of focused and more geographically limited effects characteristic of traditional nuisance suits….

Second, and perhaps more importantly, the administration has argued that EPA’s recent regulatory efforts with respect to GHG, including the mobile source rule and the PSD / Title V rules for stationary sources – which occurred after the 2^nd Circuit decision – have “displaced” federal nuisance law. Since the Second Circuit specifically addressed the displacement argument and found for the plaintiffs in part precisely because EPA had not yet regulated GHG, EPA’s intervening regulatory actions certainly would seem to provide a basis for remanding the 2^nd Circuit decision. I think that’s an easy call for the Supreme Court to make.

Perhaps not surprisingly, the plaintiffs’ attorneys were dismayed by the filing of the brief.  According to GreenWire, Matt Pawa, one of the plaintiffs’ attorneys, said that:

We feel stabbed in the back. This was really a dastardly move by an administration that said it was a friend of the environment. With friends like this, who needs enemies?"

My take is a little different. Why don’t the plaintiffs’ attorneys thank the administration for promulgating the various GHG regulations, admit that the nuisance cases were a tactic to move Congress and the administration, claim a partial victory, because they at least got EPA moving, fold up their tents, and go home.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.”

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

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 19^th 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.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The good news is that EPA is relying on good science. The bad news is that the science says things will keep getting worse.

After several months of review, on July 29, EPA denied 10 petitions to reconsider its 2009 Endangerment Finding for Greenhouse Gases under Section 202(a) of the Clean Air Act. The petitions, which were filed by, among others, the attorneys general of Texas and Virginia and the US Chamber of Commerce, pointed to errors in the 2007 report by the Intergovernmental Panel on Climate Change and the University of East Anglia “Climategate” email scandal as examples of how the science underpinning EPA’s ruling may have been flawed or skewed.  A number of petitioners have vowed to appeal the ruling.

In rejecting the petitions, the EPA confirmed, in a 217-page denial and 360-page response to each charge, that there are no scientific or other bases to change its finding that climate change caused by emissions of greenhouse gases threatens public health and the environment. As the denial concluded, the evidence proving climate change is a human-caused problem remains “robust, voluminous and compelling.”   

The science supporting the Finding has also been reinforced by recent additional major science assessments. One of these is this week’s report by NOAA on the State of the Climate, which, though it is a rigorous and solid report, is one depressing read.  The report draws on the work of more than 300 scientists from 160 research groups in 48 countries, taking observations from the top of the atmosphere to the depths of the ocean, all of which reach the same conclusion – our climate is unmistakably changing. The report looks at 10 measurable planet-wide indicators -- all of which are moving quickly in the direction they should not.  Among the notable conclusions and statistics are that the decade of the 2000s was the warmest yet and the average temperature on Earth has grown a full degree Fahrenheit over just the past 50 years.

People may be unhappy about the conclusions and may disagree about appropriate policies to address climate change, but the probability that a court will overturn the Endangerment Finding seems approximately zero.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

EPA has just released its Interim Guidance on Considering Environmental Justice During the Development of an Action. I can’t say I’m excited. The broad issue is probably too complex for a blog post, but the simple version is as follows:

1.                   Congress passes environmental protection laws for EPA to implement.

2.                   Those statutes generally provide for EPA to set standards with something like “an adequate margin of safety.”

3.                   EPA does its job.

Contrast the simplified model process shown above with this diagram from the Interim Guidance.

Trust me; it wouldn't help if it were legible (though you can find the legible version in Appendix B to the Interim Guidance if you want).  Now contrast this model process with Rube Goldberg’s design for a Self-Operating Napkin. 

Might there be a reason why people are leery of large federal bureaucracies?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Now that the Senate has put an end to speculation about a federal cap-and-trade program, the laboratory of the states and patchwork of regional regulation seem even more important.   The Western Climate Initiative (WCI) will likely involve a little of both.

Yesterday, the WCI Partner Jurisdictions (seven US states and four Canadian provinces) unveiled their comprehensive strategy for a cap-and-trade program with the goal of reducing regional greenhouse gas emissions by 15% below 2005 levels before 2020. The program is planned to begin in 2012, although apparently only California, New Mexico, Quebec, Ontario, and British Columbia are on track to have trading systems operational by that date. Even so, these two states and three provinces account for 70 percent of the greenhouse gas emissions the WCI partners produce.

The report recommends standards for regulations governing allowances, creation and use of offsets, credits for early action reductions since 2007, and other design features of a cap-and-trade program, but does not itself dictate specific regulations. Instead, the regional goal will be reached through individual states’ and provinces’ implementation of separate programs that supply allowances for quarterly regional auctions. While this individualized approach makes sense given the wide diversity of settings and the fact that WCI crosses not only state but national boundaries, it does leave a large number of factors up to the individual jurisdictions.  

Among the details that are undecided is how many allowances will be at play (a critical issue and lesson learned from the implementation of RGGI). Each state or province will adopt its own budget and determine how allowances within that budget will be distributed to emitters – through allocations, direct sales or auctions. In yesterday's report and a more detailed one from early July, WCI recommends that each jurisdiction’s 2012 allowance budget be the expected 2012 actual emissions, rather than starting with an initial cut, but then begin to decrease (at a rate to be set by each jurisdiction), with another increase in 2015 when the cap expands to cover transportation fuels and residential and commercial fuels as well.  

Offsets would be more tightly defined by the regional structure: an offset certificate issued by a WCI partner jurisdiction must meet all recommended offset criteria and result from a project located in Canada, the US or Mexico. It is recommended that each jurisdiction restrict the use of offset certificates to 49% of aggregate emissions reductions – such a limit will be expressed as a portion of each emitter’s emissions that may be covered by offset certificates or allowances from other programs.  

The WCI partner jurisdictions seem to have adopted a number of RGGI’s features, including a quarterly regional, single-round, sealed-bid auction structure, 3-year compliance periods, unlimited banking of allowances, and an auction floor price.  But as the report notes, the partner jurisdictions expect auctions to be only one component of allowance distribution – different from RGGI, where nearly 100% of allowances are auctioned.  The portion of allowances that each jurisdiction submits to the quarterly regional auctions may vary across jurisdictions and may also change over time.  Such flexibility could allow each jurisdiction to address competitiveness and leakage issues more directly than a regional plan. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

My apologies if this post is a mash note to Judge Wilkinson. Sometimes a decision is written with such clarity and simplicity that you have to sit up and take notice. Such is the case with yesterday’s decision in North Carolina v. TVA, reversing the District Court decision imposing an injunction against four TVA plants that would have required installation of additional controls for NO_x and SO₂ , notwithstanding the absence of any allegation that the plants were violating their permits under the Clean Air Act. My apologies also to my friends in the environmental community and the Massachusetts AG’s office, who supported the District Court decision, but I have a hard time seeing this decision as anything other than the death knell for this kind of public nuisance litigation.

My only complaint with the opinion is that second paragraph of the decision is such a cogent summary that it’s not obvious to me that the decision needed to go on for another 30 pages. That paragraph states:

This ruling was flawed for several reasons. If allowed to stand, the injunction would encourage courts to use vague public nuisance standards to scuttle the nation’s carefully created system for accommodating the need for energy production and the need for clean air. The result would be a balkanization of clean air regulations and a confused patchwork of standards, to the detriment of industry and the environment alike. Moreover, the injunction improperly applied home state law extraterritorially, in direct contradiction to the Supreme Court’s decision in International Paper Co. v. Ouellette, 479 U.S. 481 (1987). Finally, even if it could be assumed that the North Carolina district court did apply Alabama and Tennessee law, it is difficult to understand how an activity expressly permitted and extensively regulated by both federal and state government could somehow constitute a public nuisance. For these reasons, the judgment must be reversed.

While I will thus leave the bulk of the opinion to readers particularly interested in the subject, one other paragraph stands out for me. After discussing the contours of public nuisance litigation, Judge Wilkinson noted that:

while public nuisance law doubtless encompasses environmental concerns, it does so at such a level of generality as to provide almost no standard of application. If we are to regulate smokestack emissions by the same principles we use to regulate prostitution, obstacles in highways, and bullfights, see Keeton, supra, at 643-45, we will be hard pressed to derive any manageable criteria. As Justice Blackmun commented, "one searches in vain . . . for anything resembling a principle in the common law of nuisance."

There’s no question in my mind that this decision is the end of public nuisance litigation as a viable cause of action for traditional pollutants, where those pollutants are comprehensively regulated under a federal statute. Moreover, it certainly provides a roadmap for dismissal of public nuisance claims concerning GHG emissions. As I noted last year in discussion Connecticut v. AEP, even though the 2^nd Circuit allowed GHG nuisance claims to proceed, part of its argument was that there is no comprehensive federal regulatory scheme with respect to GHG. Its argument clearly suggested that, once such regulations are in place, public nuisance defendants might have better luck. The promulgation of the Tailoring Rule now means that public nuisance defendants can point to North Carolina v. EPA and say that the federal rules have displaced the common law of nuisance. I think that they will probably win that argument. They certainly should.

Thank you Judge Wilkinson.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Climate change legislation is dead for now. I won’t pretend it’s not depressing, even though I avoid the political channels and ignore the rhetoric. For those of us who haven’t refudiated climate change science, it’s a victory for the pessimists and evidence that Congress has a hard time addressing long-range problems, even if consequential.

With respect to regulation of GHG, it’s the worst of both worlds and no one should be happy (which is why I held out hope until the end that cooler heads would prevail). We’re still going to have regulation of GHG, the mechanism being EPA’s recently promulgated Tailoring Rule for GHG. One word. Ugh. Does this really make climate skeptics happy? Do they really think that they will somehow succeed in rolling back the Tailoring Rule? I don’t think so. On the other hand, we don’t have an economy-wide cap-and-trade or carbon tax regime. Are environmentalists happy? I still don’t think so. 

I’m left feeling a little like Rodney King. Certainly, the issue isn’t going to go away before the next Congress is sworn in.

As I have noted before, however, problems with climate change legislation don’t mean that Congress can’t enact legislation further regulating traditional pollutants. The three-pollutant bill now before the Senate already has a Republic co-sponsor, Lamar Alexander. Now, according to a report in E&E Daily, even Senator Inhofe is stating that he’s interested in working with Democrats to move three-pollutant legislation. Given the failure to move GHG legislation, hell is likely to get hotter before freezing over, but if Inhofe can really be brought on board, there’s no reason why legislation couldn’t pass.

Three-pollutant legislation shares one significant feature with the GHG issue. Like GHG regulation, efficient regulation is hampered by limitations in existing law, as we saw with the D.C. Circuit’s rejection of the trading regime in the CAIR regulations, and EPA’s much more limited trading program in the Transport Rule. Senator Voinovich, another Republican that three-pollutant legislation supporters would like to have with them, noted as much, saying that the transport rule would be a "stringent and inflexible regime." New legislation could provide for a more robust trading regime. We’ll see if that’s enough to bring Republicans on board.

I sure hope so. Right now, all we’ve got is a GHG regulatory program that won’t do much for climate change, but will cause my clients endless headaches, and a Transport Rule that’s probably the best EPA can do on traditional interstate pollution, but not nearly as cost-effective as it might be with new legislative authority. I remain an optimist, but sometimes it’s difficult.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, in City of Pittsfield v. EPA, the First Circuit Court of Appeals affirmed denial of a petition by the City of Pittsfield seeking review of an NPDES permit issued by EPA. The case makes no new law and, by itself, is not particularly remarkable.  Cases on NPDES permit appeals have held for some time that a permittee appealing an NPDES permit must set forth in detail in its petition basically every conceivable claim or argument that they might want to assert. Pretty much no detail is too small. The City of Pittsfield failed to do this, instead relying on their prior comments on the draft permit. Not good enough, said the Court. 

For some reason, reading the decision brought to mind another recent appellate decision, General Electric v. Jackson, in which the D.C. Circuit laid to rest arguments that EPA’s unilateral order authority under § 106 of CERCLA is unconstitutional. As I noted in commenting on that decision, it too was unremarkable by itself and fully consistent with prior case law on the subject.

What do these two cases have in common? To me, they are evidence that, while the government can over-reach and does lose some cases, the deck remains stacked overwhelmingly in the government’s favor. The power of the government as regulator is awesome to behold. Looking at the GE case first, does anyone really deny that EPA’s § 106 order authority is extremely coercive? Looking at the Pittsfield case, doesn’t it seem odd that a party appealing a permit has to identify with particularity every single nit that they might want to pick with the permit? Even after the Supreme Court’s recent decisions tightening pleading standards, the pleading burden on a permit appellant remains much more substantial than on any other type of litigant.

Why should this be so? Why is it that the government doesn’t lose when it’s wrong, but only when it’s crazy wrong? 

Just askin’.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On July 6, 2010, the United States Environmental Protection Agency (“EPA”) released a proposed rule, dubbed the “Transport Rule”, which would replace the Clean Air Interstate Rule (“CAIR”). As you likely recall, in 2008 the D.C. Circuit Court of Appeals, in North Carolina v. EPA, found that CAIR had a number of fatal flaws and remanded it to the Agency. (Due to its environmental benefits, the Court agreed to leave CAIR in effect while EPA worked on addressing its concerns).  

EPA has clearly attempted to address the problems identified in North Carolina v. EPA. Most significantly, while the Transport Rule still contains a trading component, trading is limited and the Rule ultimately requires that each state provide the reductions required to mitigate that state’s contribution to the interstate air transport problem. At 1,300 pages, the Rule is too long even to summarize here. For a quick summary, take a look at our Client Alert. You might also want to take a look at EPA’s helpful Fact Sheet and presentation summary for slightly more detail.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Not surprisingly, the secondary market price for Regional Greenhouse Gas Initiative (RGGI) allowances fell for the 4th quarter of 2009, as noted by RGGI Market Monitor Potomac Economics in their recent report.  Trading in RGGI allowances futures declined from 319 million allowances in the third quarter of 2009 to 127 million in the fourth quarter, despite the number of firms participating remaining the same.  Futures prices also declined 8% -- from $2.45 to $2.25.   Even so, futures prices remain notably higher than the clearing prices of the RGGI auctions, which were $2.19 and $2.05, respectively, in the September and December 2009 auctions.

One reason for the continuing decrease in RGGI allowance prices, both through auction and on the secondary market, is the steep decline in CO₂ emissions from the RGGI-subject power plants.   As highlighted in a recent report by Environment Northeast, due to the economic crisis, fuel switching energy efficiency programs, and renewable energy, emissions from those plants have fallen 34% since the start of the program, to just above 120 million tons of CO₂.  This is well below the current RGGI cap of 188 million tons, and even below RGGI's ultimate 2018 goal of 10% reductions from 2005 levels. As such, RGGI allowances will likely remain a surplus commodity well into the future. 

Even given these facts, though, RGGI allowances are far from worthless.  Particularly given that the House-passed ACES bill, as well as all of the front-runner energy and climate bills possibly considered by the Senate have contained provisions for the exchange of federal allowances for RGGI allowances, even the RGGI allowances that might not be needed by RGGI-covered entities could still be worth their weight in federal CO₂ credits sometime in the future.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Sometimes, the practice of environmental law just takes my breath away. A decision issued earlier last month in United States v. Washington DOT was about as stunning as it gets. Ruling on cross-motions for summary judgment, Judge Robert Bryan held that the Washington State Department of Transportation had “arranged” for the disposal of hazardous substances within the meaning of CERCLA by designing state highways with stormwater collection and drainage structures, where those drainage structures ultimately deposited stormwater containing hazardous substances into Commencement Bay -- now, a Superfund site -- in Tacoma, Washington.  

I’m sorry, but if that doesn’t make you sit up and take notice, then you’re just too jaded. Under this logic, isn’t everyone who constructs a parking lot potentially liable for the hazardous substances that run off in stormwater sheet flow? 

For those who aren’t aware, phosphorus, the stormwater contaminant du jour, is a listed hazardous substance under Superfund. Maybe EPA doesn’t need to bother with new stormwater regulatory programs. Instead, it can just issue notices of responsibility to everyone whose discharge of phosphorus has contributed to contamination of a river or lake.

The Court denied both parties’ motions for summary judgment regarding whether the discharges of contaminated stormwater were federally permitted releases. Since the Washington DOT had an NPDES permit, it argued that it was not liable under § 107(j) of CERCLA. However, as the Court noted, even if the DOT might otherwise have a defense, if any of the releases occurred before the permit issued – almost certain, except in the case of newer roads – or if any discharges violated the permit, then the Washington DOT would still be liable and would have the burden of establishing a divisibility defense. 

If one were a conspiracy theorist, one might wonder if EPA were using this case to gently encourage the regulated community to support its recent efforts to expand its stormwater regulatory program. Certainly, few members of the regulated community would rather defend Superfund litigation than comply with a stormwater permit.

You can’t make this stuff up. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

When we blogged about the Mandatory Greenhouse Gas Reporting Program regulations last fall, we noted that the EPA had excluded from the final regulations emission source categories such as wastewater treatment plants and underground coal mines that were initially included in the draft rules.  No longer. Yesterday, EPA finalized regulations requiring an estimated 680 facilities in the four sectors of underground coal mines, industrial wastewater treatment systems, industrial waste landfills and magnesium production facilities to begin collecting emissions data on January 1, 2011, and submit their first annual report in March 2012. Despite being few in number, these facilities, which primarily emit methane, are responsible for about 1% of national greenhouse gas emissions.  As in the existing reporting rules, 40 CFR Part 98, these businesses are required to report their emissions to EPA if they emit 25,000 metric tons CO₂ equivalents or more per year.  

The final rule also clarifies EPA’s decisions on the remaining categories: EPA will exclude ethanol production and food processing from distinct subparts requiring reporting, as well as suppliers of coal (at least for now).  However, these types of facilities are still required to report emissions under other subparts of the rule, if they meet the reporting threshold of 25,000 metric tons CO_2e per year. In addition, now that EPA has made final decisions on "all outstanding source categories and subparts" from last year's draft rule, additional sectors can only be added through new rulemaking.

EPA also released proposed rules reflecting what data submitted by facilities under the greenhouse gas reporting program will be released to the public and what will be withheld as confidential business information. EPA hopes to have these rules in place before the 10,000 facilities that produce about 85% of the nation’s emissions submit their first reports in March 2011. 

As you may recall, the greenhouse gas reporting rules require both direct emitters and suppliers of fuels and industrial gases to report.   For the “direct emitters,” EPA proposes to release information such as the facility name and physical address, emissions, methodology and data used to calculate the emissions, and test and calibration methods, but withhold as confidential business information data on production, throughput, or raw materials that are not inputs to the emissions equations. As the emissions reported by the suppliers of fuels and industrial gases are not emissions from their own facilities, but potential emissions from the eventual use of their products, the individual companies' reports are less important than the overall figures.  As such, EPA proposes a balancing approach – making sector-by-sector determinations and releasing data about emissions only when it would not cause substantial harm to the businesses’ competitive position. (Specifics on how data will be treated are available here.)   Comments are due 60 days after the proposed rules are published in the federal register.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the Supreme Court issued its decision in Monsanto v. Geertson Seed Farms, the big NEPA case before the Court this term. The District Court had struck down the decision by the Animal and Plant Health Inspection Service to completely deregulate roundup ready alfalfa (RRA). That decision was not actually under appeal. The appeal concerned only the scope of the injunction issued by the District Court, which precluded APHIS from issuing any kind of deregulation decision without completing an Environmental Impact Report (EIS) and similarly issued a nationwide injunction against planting of RRA alfalfa prior to completion of an EIS. The District Court decision had been upheld by the Ninth Circuit Court of Appeals.

The Supreme Court reversed, and vacated the injunction. I’ve got to say, Supreme Court decisions in environmental cases have often puzzled me in recent years, but it is difficult to read this one and not feel its inevitability and obviousness. This case really shouldn’t be news. The Court decided in Winter v. Natural Resources Defense Council (the Navy sonar training case) that the standard for injunctions in NEPA cases is not any different from that in any other case. In other words, injunctions are not automatic – or even presumed – in NEPA cases. Instead, the party seeking the injunction must satisfy the traditional four-factor test in order to obtain relief.

In Monsanto, the Court simply put the final nail in the coffin of the idea NEPA is somehow different. Citing to cases suggesting that the standard may be more lenient under NEPA, the Court yesterday said that:

The statements quoted above appear to presume that an injunction is the proper remedy for a NEPA violation except in unusual circumstances. No such thumb on the scales is warranted. … It is not enough for a court considering a request for injunctive relief to ask whether there is a good reason why an injunction should not issue; rather, a court must determine that an injunction should issue under the traditional four-factor test….

Here, the Court concluded that an injunction prohibiting even partial deregulation of RRA was overbroad. Moreover, because no one challenged the District Court decision striking down APHIS’s original deregulation decision, those opposing use of RRA will have another opportunity to go to court and seek an injunction in the future, should APHIS again try to deregulate RRA without having first complied with NEPA.

The lesson? If you want an injunction for a NEPA violation, you better be able to demonstrate that the balance of equities and the public interest are on your side.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Two seemingly unrelated reports last week serve as a reminder that coal remains very much under siege. First, Earthjustice, on behalf of a number of environmental organizations, filed a petition with EPA under § 111 of the Clean Air Act requesting that EPA identify coal mines as an emissions source and, consequently, establish new source performance standards for coal mine emissions of methane and several other categories of pollutants. 

Second, as Daily Environment reported, the Army Corps of Engineers suspended use of Nationwide Permit 21 for the six states in the Appalachian region, covering Kentucky, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. The decision means that, at least for now, mountaintop removal mining operations in these states will have to apply for and obtain individual Clean Water Act permits, rather than relying on the Nationwide permit.

Other significant regulatory actions affecting the long-term economics of coal include EPA’s decision to tighten regulation of coal combustion residuals, whether through identification of CCR as a hazardous waste or through regulation under RCRA subtitle D – with the current betting being on listing of CCR as a hazardous waste, and EPA’s Tailoring Rule, which will focus initial regulation of GHG emissions on large stationary sources, the most obvious of which are large coal-fired power plants.

All of these actions are nominally independent, but if anyone thinks that at least the NGOs such as the Center for Biological Diversity and Earthjustice don’t see these as related actions the cumulative goal of which is to end use of coal, they’re just not paying attention. Does Lisa Jackson feel the same way? I doubt she’ll ever tell us, but I think I know the answer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, the Supreme Court decided, 8-0, in Stop the Beach Renourishment v. Florida Department of Environmental Protection, that a Florida law which allows the State DEP to fill in submerged land (owned, under Florida law, by the State), and then to cut off the littoral owners’ rights to accretion of the beach front without paying compensation, was not a taking requiring compensation under the 5^th Amendment. The decision was fairly easy, even for the property rights wing of the court, because it concluded that Florida law had always provided for such a result, so that the action by the DEP did not change the private owners’ preexisting rights.

However, the decision masks both continuing deep divisions on the Court concerning Takings Clause issues and confusion, if not incoherence, in the Justices' thinking.  As I noted when the Court took the case, the Court in Lucas distinguished state regulatory action limiting owners’ use of the property from “restrictions that background principles of the State’s law of property and nuisance already place upon land ownership.” I think it's a specious distinction. We used to regulate by common law of nuisance. Now we regulate by statute and regulation. Why should the common law be treated differently by the Supreme Court for Takings Clause purposes than statutes or regulations? 

In yesterday’s decision, four members of the Court answered this question. It turns out, according to Justices Scalia, Alioto, Roberts, and Thomas, that judicial changes to the common law may also subject the government to a regulatory takings claim. The reason? It is that, according to Justice Scalia, “the Constitution was adopted in an era when courts had no power to ‘change’ the common law.” News to me. I hadn’t realized that there was a halcyon day when the common law was fixed and perfect. Thus, it turns out, common law restrictions on property avoid the taking label only if they existed as of the time of the Constitution.

Justices Kennedy, Sotomayor, Breyer, and Ginsburg concurred in the judgment (Stevens did not participate), but stated that it was premature to try to determine when judicial decisions might provide grounds for a takings claim. Justice Kennedy did emphasize that the plain language of the Takings Clause does not address what are now known as regulatory takings: 

The Framers most likely viewed this Clause as applying only to physical appropriation pursuant to the power of eminent domain.

Of course, Justice Kennedy is right on this score – a point somehow ignored by Justice Scalia in his originalist approach to constitutional interpretation. 

I normally represent private property owners and there are certainly times when, it appears to me, the government tries to achieve what might be noble objectives on the backs of private owners, simply because it doesn’t want to bear the cost.  Nonetheless, I think that this issue isn’t that complicated and the proper resolution would eliminate most takings claims. If a private use of land unreasonably imposes costs on neighbors or the public, then that use can be restricted, either by courts or by regulatory agencies, without payment of compensation. That type of regulation simply isn’t a taking. And, yes, the definition of “unreasonable” may change over time. That’s life in the big city – or the beachfront. Get over it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It may be time to learn a new acronym.  The 10 RGGI states, plus Pennsylvania and Washington DC have banded together to create the Transportation and Climate Initiative (TCI) -- a group that has pledged to create a plan to address the estimated 30% of greenhouse gas emissions on the eastern seaboard caused by the transportation sector. 

In a Declaration of Intent released Wednesday, the leaders of the environmental, transportation and energy agencies of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Washington DC, pledged to develop and implement a three-year work plan that outlines how the region can cut greenhouse gases from vehicles and improve efficiency of regional transportation systems.   The TCI builds on RGGI (which does not itself regulate fuels or transportation, but began the states' collaborative efforts on the issue of greenhouse gas emissions) and the 11-states' low carbon fuel memorandum of understanding signed in December.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Product stewardship is definitely in vogue. The Daily Environment Report has just noted that the United State Conference of Mayors has adopted a resolution calling for “Extended Producer Responsibility For Products.” I understand the arguments in favor of product stewardship. From an economic point of view, the disposal costs associated with products and product packaging can be seen as an externality. Internalizing those costs would give manufacturers and distributors incentives to minimize those costs, through reduced packaging or changes in design/manufacturing that would reduce the costs associated with product disposal.

Nonetheless, I’m skeptical of the USCM resolution and wonder about how “producer responsibility” will actually get implemented on the ground. The USCM resolution describes the “costs paid by local governments to manage products,” traditionally seen as a core governmental function, to be “in effect, subsidies to the producers of hazardous products and of products designed for disposal.” Language like this might reasonably lead one to conclude that the Mayors’ concern isn’t product stewardship, but just reducing local DPW budgets.

Taxes on the cost of disposal might cause manufacturers to change their processes to reduce the amount of waste associated with the end of their products’ life, but what if the most efficient way to handle such waste is still through centralized collection and disposal by municipalities? Perhaps one of my more informed readers will tell me how product stewardship can be operationalized to provide the appropriate incentives on manufacturers to reduce the life-cycle cost of their products while still leaving the handling and disposal of waste products where they can still be performed most efficiently. 

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

EPA held a public hearing this week on its proposed MACT standards for industrial boilers. The issue may not be as sexy as climate change, but it’s an important rule and not just for those operating industrial boilers. For example, the cement industry has burned 50 million tires – including steel belts – according to its own data. EPA wants to classify such tires as a solid waste, rather than a fuel, which would subject cement kilns to incinerators standards. This has the Rubber Manufacturers Association up in arms. (Query: Does the Michelin Man have arms?)

Industry representatives say that the standards simply can’t be met, arguing that EPA cherry-picked the best performance for different air contaminants across a range of facilities, but ignored data showing that no facilities can actually meet all of the standards. According to the Daily Environment Report, Matthew Todd of the American Petroleum Institute described the proposal as “Franken-MACT.”

I suspect that EPA is going to be very skeptical of these claims. Rightly or wrongly, EPA’s view is that industry tends to cry wolf regarding the feasibility of complying with new regulatory standards. In any case, EPA also tends to think of technology-forcing as part of its mission. Time will tell on this one, regarding both EPA’s willingness to meet industry at least part way and industry’s ability to comply with the standards.

The tire issue, which is merely one example, also calls to mind EPA’s current debate regarding regulation of coal combustion residuals. How does EPA balance what it regards as fidelity to statutory requirements with the need to encourage beneficial and economic reuse of what would otherwise be waste materials? At this point, EPA’s thumb appears to be on the regulatory side of the scale, rather than the reuse side. Not surprising, but not necessarily encouraging. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A week after the Senate’s rejection of the Murkowki resolution last week, where does climate change stand in Congress? The defeat of the resolution is not the end for those who don’t want EPA to regulate under existing authority. Senator Rockefeller hopes to get to the floor a bill that would delay EPA regulation of stationary sources for at least two years, but keep in place the mobile source compromise reached last year. Rockefeller has stated that he hopes to get the votes of some Senators who opposed Murkowski’s resolution.

What about cap-and-trade legislation? Notwithstanding the President’s stated commitment to getting it passed, it’s not obvious that the votes are there. Senator Lieberman, one of the sponsors, is now saying that the bill deserves a debate, notwithstanding the absence of 60 votes. Not exactly an encouraging prognosis for those who want legislation to be enacted.

I’ve got to say, it looks as though paralysis remains the word of the day. The Senate may be the world’s greatest deliberative body, but with respect to climate change, it’s difficult to see anything other than sound and fury, signifying nothing, for the near term. 

And that’s two Shakespeare quotes in one month.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In the Regional Greenhouse Gas Initiative's (RGGI) eighth auction of CO₂ credits on June 9th, the clearing prices were the lowest yet – $1.88 for 2009-2011 credits and the auction floor of $1.86 for 2012-2014 allowances.  Despite these low prices, the auctions still brought in some $80 million.  In total, cumulative RGGI proceeds to be used by the 10 participating states for renewable energy, energy efficiency and low-income energy assistance programs now total $662.8 million.

RGGI's announcement of the auction results highlights some of the specific programs in which the states have invested, and the returns we are already seeing from these investments.  For example, in Connecticut, electric and gas energy efficiency programs, funded in part by RGGI proceeds, are producing more than $4 for every $1 invested.  New York reports a return greater than 8 to 1 for its investments in renewable energy systems.  And the predictions are even larger:  Massachusetts reports that energy efficiency programs, funded in part by RGGI, will generate roughly $6 billion in consumer energy savings in Massachusetts over the next 3 years. 

On the whole, the RGGI states are investing around 60% of the proceeds from the auctions in energy efficiency.  Energy efficiency measures such as building retrofits, heating system replacements and appliance upgrades are predicted to shave 20 to 30% off consumers' utility bills over the next few years. States are also investing in large-scale renewable energy development as well as programs to deploy distributed generation, such as solar energy and hot water systems on  homes, schools, and businesses.

Although participation and prices were both down for this second auction of 2010, all 2010 vintage and 2013 vintage allowances available for purchase were sold – a change from the previous two auctions, in which supply for allowances to be used in the 2012-2014 compliance period outpaced demand.   Perhaps due to the drop in the number of entities participating, electric generators subject to RGGI purchased 92% of the 2010 vintage allowances – up from 85% in March's auction – and 100% of the 2013 vintage allowances.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Last week, EPA released its Clean Watersheds Needs Survey 2008 Report to Congress. I have three immediate reactions to the Report. The first is that there are a lot of needs out there. The Report’s bottom line is that there is currently an expected shortfall of $298 billion over the next 20 years for clean water infrastructure. As Congress turns from short-term stimulus spending to long-term concerns about the deficit, it’s difficult to see Congress being eager to hear National Association of Clean Water Agencies Executive Director Ken Kirk say that

the federal government must become a long-term partner in developing a sustainable funding mechanism to address the growing infrastructure funding gap.

My second reaction is that I’m skeptical of these numbers. I don’t doubt the big picture funding gap, but it’s clear in a quick review that different states report these numbers differently. For example, as readers of this blog know, both EPA and Massachusetts DEP are making big pushes to increase stormwater regulation in Massachusetts. However, the Report states that, while Massachusetts has almost an overall $8 billion shortfall, its stormwater needs are only $41 million. The Report further states that Massachusetts needs literally zero money for stormwater conveyance infrastructure and only $22 million for treatment systems. Pennsylvania, on the other hand, apparently needs $6 billion for stormwater infrastructure. 

As much as I love my adopted state, I’m doubtful that Massachusetts is that far ahead of Pennsylvania. I sure hope that, before spending decisions are made, someone takes a closer look at these numbers.

My third reaction is one of fear, particularly on the stormwater front. Nationally, the overall shortfall associated with stormwater is nearly $43 billion. We’ve already seen in Massachusetts efforts to push stormwater compliance costs onto private landowners. With that sort of shortfall, the pressure to do so can only increase, particularly as local governments are starved for revenue. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

By now we are all familiar with the criteria for robust carbon offsets:real, additional, verifiable, enforceable, permanent.  But what exactly do those criteria mean?  And how should a cap-and-trade program be designed to ensure that they are met?  

Earlier this month the three regional U.S. greenhouse gas programs released a white paper which sets out their answers. In Ensuring Offset Quality: Design and Implementation Criteria for a High-Quality Offset Program, representatives of the Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord provided their consensus view on key offset policy design and implementation components.  They concluded that offsets provide an important compliance flexibility that reduces the cost of cap-and-trade programs, allows for more varied emissions reduction opportunities, and ultimately enables the pursuit of more aggressive emissions reduction targets. This all comes with a stern warning: if offset projects do not achieve the five tenets listed above, the one-to-one relationship between substituting emissions reductions outside the cap for those under the cap is destroyed, and environmental benefits of the cap-and-trade program are undermined. The paper emphasizes additionality as the most important criterion ¾ offset programs must guarantee that the project “would not have happened anyway in the absence of the economic incentive created by the compliance obligation created by the cap-and-trade program.

The paper favors an approach where the validity of offsets is determined through standardized requirements rather than project-by-project determinations of which offsets can be used for compliance. Both the Kyoto Protocol’s Clean Development Mechanism and the European Union’s original offset program relied on a project-by-project system, while the climate change bill recently released by Senators Kerry and Lieberman and the ACES bill passed by the House last year are more reliant on standardized requirements.

The principles advanced in the white paper are useful, but they are still theoretical.The challenge remains to develop standardized guidelines that will address tricky issues such as guaranteeing the permanence of an afforestation offset, where there is always the chance of a forest fire, or ensuring the additionality of a landfill methane capture project, when regulations or the market may have demanded it anyway. Perhaps that is why we have the states as laboratories ¾ including the very states that drafted this paper ¾ as we wait for federal climate legislation to become a reality. The consensus announced in the white paper could certainly form the basis for a federal offsets scheme, but the regional programs don’t seem to be holding their breath.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In 1972, Christopher Stone published his seminal book “Should Trees Have Standing?” That same year, Justice Douglas posed essentially the same question in his dissent in Sierra Club v. Morton, in which he argued that inanimate objects should have standing “to sue for their own preservation.”

I hadn’t thought of this for some time, but was reminded of the issue by an article in GreenWire this week, reporting on a study which has concluded that kudzu, an invasive species which is, one might say rhetorically, taking over the southeastern United States, increases NO_x levels and thus leads to the formation of ground-level ozone. Indeed, the study concluded that if kudzu does in fact take over – to the point where it covers all non-urban, non-agricultural soil – the number of areas exceeding the ozone NAAQS would increase by more than one-third.

Now, what’s the point of this other than the opportunity for a snappy headline? Perhaps nothing. I love a snappy headline. On the other hand, the report does serve as a useful reminder that environmental science and policy are really complicated. I do not use this complexity to suggest that the government should not act in the face of uncertainty, but I do believe that it can serve as a useful reminder of the limits of our knowledge and the appropriateness of a prudent caution before we assume we know all the answers. 

At a practical level, can EPA set up an offset program that would allow new sources of NO_x to move forward if they remove a certain number of acres of kudzu? After all, no one likes kudzu, anyway.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

It now appears that Senator Murkowski’s resolution disapproving EPA’s endangerment finding will come to a vote in the Senate sometime in June. The complexity of the political dynamic is highlighted by the speculation regarding what such a vote will mean.  On the one hand, there are those who argue that a significant number of votes for the resolution will mean that climate change legislation is dead. On the other hand, Senator Graham has now predicted that the resolution will pass precisely because most Senators do want to pass a climate bill.

As a logical matter, Senator Graham is right. Being against EPA regulation of GHG under existing authority doesn’t necessarily mean that one is opposed to climate change legislation. Indeed, my guess at this point is that at least a plurality and probably a majority of the regulated community supports climate change legislation, but thinks that regulation of stationary sources under existing authority would be a bad idea. 

In terms of practical politics, however, it seems likely that there may be very little correlation between Senators’ views on climate change legislation and their vote on the Murkowski resolution. Some senators may vote for it because on the merits they think that GHG should be regulated pursuant to specific legislation enacted by Congress. However, many will just be taking a stand against any government regulation of climate change. On the other side, there may be many Senators who would prefer that climate change be addressed through legislation, but since legislation is not guaranteed, want to be certain that some kind of regulatory program is in place. 

Of course, it’s also important to remember that the Murkowski resolution would not just preclude regulation of stationary sources. Because it would disapprove the endangerment finding, it would also jeopardize the carefully negotiated agreement on mobile sources. They aren’t very many people who want to reopen that agreement, I assume.

The world’s greatest deliberative body? We’ll see about that.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

First Kerry-Lieberman, then the Tailoring Rule – a busy week for climate change. Senator Kerry certainly did not miss the coincidence. He called the release of the Tailoring Rule the “last call” for federal legislation. I’ve noted before the leverage that EPA regulation would provide, but this is the most explicit I’ve seen one of the sponsors on the issue.

As to the substance, there are not really any surprises at this point. EPA is certainly working to soften the blow of GHG regulation under the PSD program. Here are the basics (summarized here):

January 2, 2011 – Facilities obtaining PSD permits for pollutants other than GHGs after that date will need to meet BACT for GHG (whatever that may be) if their GHG emissions will increase by at least 75,000 tpy.

July 1, 2011 – New facilities with emissions of at least 100,000 tpy of GHG will need to obtain a PSD permit and meet BACT (whatever that may be) for GHG, even if they do not need a PSD permit for other pollutants. Modified facilities with increases of at least 75,000 tpy will have to obtain a PSD permit and meet BACT (whatever that may be) for GHG, even if they do not need a PSD permit for other pollutants.

July 1, 2012 – EPA will conclude a further rulemaking to address smaller sources. EPA has already committed to not regulate sources with GHG emissions below 50,000 tpy and further stated that permits would not be required for smaller sources before April 30, 2016.

As I’ve subtly hinted above, we still don’t know what EPA thinks BACT for GHG may be. EPA has at least suggested that, with respect to coal plants, BACT may be Integrated Gasification Combined Cycle, or IGCC, and with respect to IGCC plants, BACT may be natural gas. If so, we’re not going to see many traditional coal plants permitted after this rule takes effect.

What about opposition to the rule? It’s near certain that someone will challenge it. While environmental groups support it and have suggested that opponents may not have standing, I’m skeptical. I think it likely that someone with standing will challenge it. I also think that there is a reasonable chance that the rule is overturned, because it’s not obvious to me that the courts will buy the “administrative necessity” argument. The more fundamental point is that I’m not sure it matters. If the Tailoring Rule is struck down, a court is still unlikely to vacate the rule. Instead, the court is likely to keep the Tailoring Rule in place, while giving EPA time to figure out how to comply with conflicting mandates in a way that doesn’t bring the world as we know it to an end.

At bottom, the problem isn’t the Tailoring Rule. The problem is that Massachusetts v. EPA makes regulation of GHG under the existing Clean Air Act inevitable absent congressional action. In other words, John Kerry is right; the Tailoring Rule is last call for the climate bill. I happen to agree with opponents that regulation of GHG under existing authority will be a nightmare. Even exempting small sources, PSD is just a terrible way to go – one of the last vestiges of command and control regulation and a nearly incomprehensible one, at that.

However, given Massachusetts v. EPA, Congress really only has two ways to fix the problem. The first would be to pass climate legislation. The second would be to pass legislation to preclude EPA regulation of GHG under existing authority. Right now, neither alternative seems likely, but once EPA rules are in effect, they’ll both be more tempting. We’ll see which we Congress moves.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

So, Kerry Lieberman (Graham?), also known as the American Power Act, is here. What does it mean?

My immediate reaction is that, in a big picture sense, they got it just about right. The fundamental issue, which was previously acknowledged by Senator Graham (can we start calling him “he who must not be named?”), is that we’re not going to solve the energy independence or climate change problems unless we put a price on carbon. This bill does that.

Frankly, the rest of the issues really only matter either to particularly constituencies or, as a related concern, to particular members of Congress. What are some of these other issues and how would they be handled in this bill? We’ll be getting a more detailed client alert out shortly, and if you can't wait, you can review the short summary or the section by section analysis, but here’s the very quick version.

Basic cap-and-trade provisions –

Goal is to reduce CO₂e by 4.75 percent of 2005 levels by 2013 and 83% by 2050, with interim targets in 2020 and 2030

EPA administrator will set allowance numbers to reach those targets

Only facilities emitting >25,000 tpy CO₂e will be subject to the program

Generating facilities are subject to the program in 2013; manufacturing facilities will not be subject until 2016.

Initial price floor of $12/ton and price ceiling of $25/ton

Limits on who can participate in the carbon market to avoid market manipulation

Allowances used primarily to cushion consumers from energy price increases, but also to support various industries

Includes a “WTO-consistent border adjustment mechanism.” In the absence of a global agreement, tariffs will be imposed on countries without similar GHG controls

Nuclear power – lots of help for the nuclear industry

Off-shore drilling – Provides substantial revenue sharing to certain coastal states, but allows states to prohibit leasing within 75 miles of their coastline

Coal – significant support for carbon capture and sequestration

Renewable energy – Does not include a national renewable energy standard, or RES, though does provide for federal assistance to encourage development of renewable energy technology

Preemption – preempts state cap-and-trade programs, but not other state regulation of GHG. Precludes EPA regulation:

No listing of GHG as criteria pollutants based on climate change impacts

No listing as hazardous air pollutants based on climate change impacts

Limitation – but not complete preemption – of GHG regulation under existing NSR authority

Don’t yell at me if this list does not include your favorite provision. This is a blog, not a treatise. As to the big political picture, I still think that, if Senator Graham can be brought back on board, there is a reasonable chance that this bill passes. If not, then I’m pretty skeptical. 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

EPA is proceeding with its plan to establish a new program to regulate stormwater discharges from new development and redevelopment, with a target date for a final rule by November 2012. The next step: the reissuance of draft mandatory questionnaires that, once finalized, will be sent to various stakeholders, including approximately 738,000 owners and developers of residential, industrial and commercial sites. According to EPA, the “target population for the Owner/Developer Questionnaires is all development establishments in the United States,” as defined by 8 NAICS codes (see Part A.4 of EPA’s Supporting Statement for further information on whether your business would be covered).

The questionnaires request detailed information about real estate improvements during the last five years as well as the financial characteristics of development companies and their projects. There are two versions of the Owner/Developer questionnaire, but only the longer version -- which will be sent to “selected recipients” -- seems to address the types of stormwater controls actually used, or the cost of those controls, in any detail. Thus, while the longer questionnaire will present an additional burden for its recipients, it will also allow developers to report key information for the regulated community, including the cost-effectiveness and context of stormwater controls (e.g. soil types, urban vs. rural settings). 

Among other stakeholder groups, EPA will also send questionnaires to owners and operators of municipal separate storm sewer systems (MS4s) and to National Pollutant Discharge Elimination System (NPDES) permitting authorities. That means that one party that apparently won’t have to fill out a questionnaire is the Massachusetts DEP, which, along with 4 other states and the District of Columbia, does not have NPDES permitting authority. Particularly in light of MA DEP’s own recent stormwater proposal, EPA might consider asking all state environmental authorities about the scope of their current and planned regulatory efforts with respect to stormwater, so as to better coordinate state and federal programs. 

We’re pleased that EPA is making an effort to base its regulatory proposal on good information. Nevertheless, developers should watch the rulemaking process carefully between now and 2012. The 30 day public comment period on the draft questionnaires ends June 9, 2010.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Environmentalists have been pushing for years to overturn the Bevill Amendment and get coal combustion residuals (CCR) regulated as a hazardous waste. The failure of an impoundment at the TVA facility in Kingston, Tennessee, in 2008 almost guaranteed that EPA would do something to regulate CCR. Like Hamlet, however, EPA seems to be having trouble making up its mind. Earlier this week, EPA announced two different potential regulatory approaches, one regulating CCR as a hazardous waste under RCRA Subtitle C and one regulating CCR as non-hazardous waste under Subtitle D of RCRA.