Six 5th Circuit Judges Oppose USFWS’s Critical Habitat Designation: Sounds Like Certiorari to Me

The 5th Circuit Court of Appeals just denied en banc review in a case involving the Fish & Wildlife Service’s designation of critical habitat for the dusky gopher frog.  There are only 100 of these “shy” frogs left, and none of them live in the area in Louisiana designated as critical habitat by the FWS.

The focus of the panel decision – and both the panel dissent and the dissent from the denial of en banc review – was whether private land could be considered critical habitat for the dusky gopher frog if no frogs live in the area and the area could not currently support the frog.

The panel majority, relying significantly on Chevron deference, decided that the FWS reasonably concluded that the answer was yes.  The two dissents thought Chevron inapplicable, because the case turned “essentially on statutory construction, not on deference to administration discretion or scientific factfinding.”

It’s a close case.  I think that the panel majority probability got it right, but I can imagine that the Supreme Court might disagree and I wouldn’t be shocked if they granted certiorari.

I can’t resist pointing out that both dissents need a lesson in logic, which I hereby graciously provide.  The dissents argued that land cannot be essential to the frog if the frog doesn’t actually live there.  That’s a logical non-sequitur.  Just because the frog doesn’t currently live in Louisiana doesn’t mean that the area designated as critical habitat isn’t essential – necessary – critical – to the frog’s survival.  There are only 100 dusky gopher frogs left.  As the panel opinion noted:

The Service [found] that designating the occupied land in Mississippi was “not sufficient to conserve the species.” The Service explained that “[r]ecovery of the dusky gopher frog will not be possible without the establishment of additional breeding populations of the species,” and it emphasized that it was necessary to designate critical habitat outside of Mississippi to protect against potential local events, such as drought and other environmental disasters.  The Service therefore determined that “[a]dditional areas that were not known to be occupied at the time of listing are essential for the conservation of the species.”  In sum, all of the experts agreed that designating occupied land alone would not be sufficient to conserve the dusky gopher frog.

In short, if the frog would become extinct without the land in Louisiana as habitat, then that land is critical habitat.  It may be that it’s too late to save the dusky gopher frog.  That would be too bad.  I think it’s rather cute.  More to the point, the ESA doesn’t really have a “don’t bother; it’s too late” provision.

Climate Change Will Increase Peak Energy Demand By More Than We Thought: More Storage, Perhaps?

In an interesting study just published in the Proceedings of the National Academy of Sciences, the authors predict that climate change will have a more significant impact on peak energy demand than had previously been understood.  They conclude that, in a business as usual case, peak demand will increase 18%, leading to a need to spend $180B (in current dollars) to meet that increased peak demand.

The authors acknowledge that their estimates are based on current infrastructure and that the development of energy storage could play a role in mitigating the need for new generation sources to meet peak demand.

This is why storage should actually be thought of as a form of generation.  It’s also why my biggest take-away from this article is that the need for a robust storage market is even more important than we had already realized.

The Conservative Uphill Slog for a Carbon Tax

Earlier this week, the Climate Leadership Council rolled out The Conservative Case for Carbon Dividends (note the absence of the “T” word in that title!).  It’s a serious proposal and, if we lived in a world of facts, rather than alternative facts, it would be a useful starting point for a discussion.

Here are the highlights:

  • A gradually increasing carbon tax, starting somewhere around $40/ton.
  • Return of all revenue from the tax to citizens through dividend checks.  The CLC predicts that the 70% of Americans with lowest income would receive more in dividends than they would pay in taxes.
  • Border carbon adjustments.
  • Elimination of existing carbon regulations.  It’s not clear what this would cover, but it would include at least the Clean Power Plan.  It would also include elimination of tort liability (presumably limited to tort liability related to claims concerning climate change).

I’d sign up for this today, but I’m not exactly one of the people that needs convincing.  According to GreenWire (subscription required), former Secretary of State James Baker, who led the public presentation of the report, acknowledged that attaining enactment of the proposal would be an “uphill slog.”  I think that’s putting it mildly.  The CLC members are basically a who’s who of the old-line GOP mainstream – precisely the types that President Trump appears to have consigned to the dustbin of history.

Nonetheless, hope springs eternal and we have to start somewhere.

EPA Wins Another Round In PSD Litigation: More Evidence that the Program Is Flawed.

Last Monday, in a comprehensive, 189-page opinion, Judge Rodney Sippel ruled that Ameren Missouri had violated EPA’s PSD regulations by failing to get permits for upgrades in 2007 and 2010 at its Rush Island facility.  As I noted when Judge Sippel denied cross-motions for summary judgment, the result is not really a surprise.

Moreover, Judge Sippel’s decision is not based on any extreme reading of the law.  For example, on the critical issue of the applicability of the routine maintenance defense, Judge Sippel found that the projects at Rush Island were not routine, even at the industry level, let alone the project level.  The Court’s bottom line?

Based on the evidence presented at trial, I conclude that the projects cannot be considered routine maintenance under the law. The Rush Island boiler refurbishments at issue were the most expensive boiler projects ever performed on an Ameren boiler. They involved the redesign and replacement of major boiler components that were intended to improve the performance of the units and enable them to burn coal they were not originally intended to burn. They were the first such replacements in the history of each unit, are rarely done at any unit in the industry, and the combination of boiler replacements has rarely, if ever, been done in the industry. Under the appropriate legal standards, every factor of the routine maintenance test weighs heavily against classifying the work as routine maintenance, repair, and replacement.

Ouch.  These are the types of factual conclusions – particularly when made at the end of a painstaking and detailed review of the evidence – that are granted significant deference by appellate courts.  I might also note that, even though these projects began after DOJ’s PSD/NSR enforcement initiative, Ameren Missouri referred to the projects internally as “major modifications.”  Oops.

Thus, notwithstanding speculation in the trade press about how this decision will fare under the Trump administration, I just can’t see this case being reversed, and the Sierra Club has already vowed to step in, should DOJ somehow change course.

I’m still not a fan of the PSD program or DOJ’s enforcement efforts, however.  It remains one of Congress’s worst compromises and a prime example of how not to regulate.  Put simply, why would we decide to regulate existing facilities only when they make significant upgrades that make them more efficient?  Wouldn’t it make more sense to regulate the existing facilities that remain inefficient?

In a sane world, we would have fixed this long ago.

Trump Signs Executive Order Expediting Environmental Permitting for High Priority Infrastructure

In one of the first acts of his presidency, Donald Trump signed an Executive Order entitled “Expediting Environmental Reviews and Approvals for High Priority Infrastructure Projects”, with a stated goal of streamlining environmental permitting for infrastructure projects.

The order establishes a process by which the Chairman of the Council on Environmental Quality may be petitioned to designate an infrastructure project as “high priority”.  The Chairman may decide whether a given project should be so designate based on the project’s “importance to the general welfare, value to the Nation, environmental benefits, and other factors.”  Upon such designation, the Chairman must establish “expedited procedures and deadlines” for completion of all environmental reviews and approvals.  All federal agencies must comply with the established deadlines.  If the deadlines are not met, the head of the agency must provide a written explanation to the Chairman regarding the cause of the delay and outlining steps to complete review as soon as possible.

The order states that the expedited schedule established by the Chairman must be “consistent with law”, so the extent to which a permitting timeline could be compressed would depend on the underlying statutory and regulatory framework.

The order provides a few hints as to which types of projects might be deemed high priority, including “improving the U.S. electric grid and telecommunications systems and repairing and upgrading critical port facilities, airports, pipelines, bridges, and highways.”

The Conservative Case For Chevron Deference

With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs.  Put simply, I don’t get it.  There are at least two good reasons why conservatives should prefer Chevron deference to no deference.

First, the alternative is for courts to decide all questions of agency authority.  But haven’t conservatives railed against unelected judges for years?  Bureaucrats are unelected, but at least they work for the elected President.  Isn’t EPA more likely to be responsive to President Trump than federal judges would be?

Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community.  Anyone ever heard of “Regulatory Capture”?

The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.  

The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court.  Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.

Why, then, did the Appeals Court reverse the District Court and affirm the rule?  Chevron deference, of course.

Conservatives, be careful what you wish for.

Stop the Presses: NPDES Permitees Must Comply With Their Permits

Earlier this month, the 4th Circuit Court of Appeals concluded that NPDES permit holders must comply with all of the terms of their permits.  I’m not sure why this should be earthshattering news, but the case does have some relevance for defining the scope of the permit shield.

The case involved the Fola Coal Company and the recurring issue of high conductivity resulting from surface coal mining operations.  Fola Coal was issued an NPDES permit by the West Virginia Department of Environmental Protection.  In applying for the permit, Fola Coal disclosed the conductivity issue.  The permit did not contain any numerical limits on conductivity.  Fola Coal thus took the position that, since its permit did not specifically limit conductivity, and it had fully disclosed the conductivity issue, it was entitled to the permit shield, protecting it from claims related to conductivity.

Unfortunately for Fola Coal, its permit did contain an explicit provision prohibiting it from causing any violation of water quality standards.  As the Court made clear, the permit shield provision does not protect permittees who comply with numerical limitations in their permit.  Rather, it protects permittees who comply “with the express terms of the permit.”  Since the permit expressly required compliance with water quality criteria and since the District Court found that Fola Coal’s conductivity discharges had caused violations of water quality criteria, the permit shield did not apply and Fola Coal was subject to enforcement.

Case over.

The NSR Regulations Still Make No Sense: The 6th Circuit Reverses the DTE Decision Based on a 1-Judge Minority Opinion

Last week, the 6th Circuit Court of Appeals reversed – for the second time – a District Court decision granting summary judgment to DTE Energy in the United States’ case alleging that DTE Energy had violated EPA’s NSR regulations.  According to the 6th Circuit, EPA has authority to bring an enforcement action against DTE Energy, notwithstanding that the regulations don’t provide for EPA review of DTE Energy’s emissions projections prior to construction and also notwithstanding that the project did not in fact result in a significant net emissions increase.

One might well be surprised by the result, but the result itself is not the most surprising part of the case at this point.  What’s really surprising is that the United States won the case even though only one of the three judges on the panel agreed with EPA’s position.

How could such a thing happen, you might ask?  Here’s the best I can do.  Judge Daughtrey, author of the panel opinion, believes that EPA has the authority to second-guess DTE’s estimates if they are not adequately explained.  Judge Rogers disagreed and dissented.  Judge Batchelder also disagreed with Judge Daughtrey’s views, pretty much in their entirety.  However, Judge Batchelder concluded that she had already been outvoted once, in the first 6th Circuit review of this case and she felt bound to follow the decision in DTE 1.  The law remains an ass.  

Even were Donald Trump not about to nominate a Supreme Court justice, I’d say that this case is ripe for an appeal to the Supreme Court and, if I were DTE, I’d pursue that appeal vigorously and with a fairly optimistic view of my chances.

And once again, I’ll suggest that the very fact that the NSR program can repeatedly thrust such incomprehensible cases upon us is itself reason to conclude that the entire program is ripe for a thorough overhaul – or perhaps elimination.

EPA Wins a Round Against CLF in Residual Designation Authority Litigation

Earlier this week, Judge Mary Lisi, of the District Court of Rhode Island, dismissed the Conservation Law Foundation’s Residual Designation Authority law suit against EPA.  CLF had asked the Court to order EPA to require permits from stormwater dischargers alleged by CLF to be contributing to exceedances of the Total Maximum Daily Load established by Rhode Island for certain impaired water bodies. spectacle-pond

CLF alleged that EPA’s approval of the TMDLs constituted a determination that certain stormwater dischargers were contributing to exceedances of water quality criteria and that the controls on these dischargers are necessary to meet the TMDL and thus attain the water quality criteria.

The Court disagreed, finding that approval of the TMDLs does not by itself constitute a decision by EPA that any stormwater source or sources necessarily have to be regulated.  Seems right to me.  Here’s what the relevant EPA regulations say.  They require an NPDES permit when:

(C) The Director, or in States with approved NPDES programs either the Director or the EPA Regional Administrator, determines that storm water controls are needed for the discharge based on wasteload allocations that are part of “total maximum daily loads” (TMDLs) that address the pollutant(s) of concern; or

(D) The Director, or in States with approved NPDES programs either the Director or the EPA Regional Administrator, determines that the discharge, or category of discharges within a geographic area, contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States.

The Court reviewed the TMDL reports and EPA’s decision and concluded that:

Nothing in the EPA approval document indicates (1) that EPA has conducted its own analysis or fact finding; that (2) that EPA has made an independent determination that the stormwater discharge into Mashapaug Pond contributes to a violation of water quality standards.

I agree, but I think that there’s an even simpler path to the same decision.  If EPA had intended to require a permit any time it approved a TMDL, then the regulations could simply have said that an NPDES permit is required “for any stormwater discharge to a water of the United States for which a TMDL has been established.”  The regulations don’t do that.  Instead, they contemplate a two-step process.  First, the TMDL is established.  Only if the TMDL is established, and only if, after that, EPA determines that “storm water controls” are needed…”, is a permit required.

Because EPA has not made the second-step determination, it has no non-discretionary duty to require permits.

It will be interesting to see what impact this decision has on other RDA litigation around the country.

EPA Adds Vapor Intrusion to Hazard Ranking. Can You Say “Deck Chairs on the Titanic?”

EPA has finally issued a final rule including vapor intrusion in the Hazard Ranking System.  The good news is that this is appropriate, because VI is one of the few real hazards regulated by the Superfund program.  The bad news is that the Superfund program is so hopeless that promulgation of the rule will probably substantially multiply the cost of addressing VI without buying an ounce of additional public health protection.

In a blog post more than five years ago, I provided a rant that I feel has stood the test of time.  In that post, I asked why Superfund was ill-suited to address VI, even though it’s precisely what EPA should be doing.

Why should this be so? Could it be because CERCLA is the last bastion of almost totally pure command and control regulation? Might CERCLA remedy decisions take less time if EPA did not have to select remedies, but instead only identified appropriate cleanup standards and let PRPs select the remedy? Might cleanups get implemented faster if the PRPs’ obligation was simply to meet cleanup standards and provide sufficient information to EPA or 3rd party auditors to demonstrate that the cleanup standards have in fact been met?

I hope that the new administration doesn’t roll back this rule while leaving CERCLA in place, because that would be backwards.  I hope instead that the administration leaves the rule in place, but takes a hard run at really reforming CERCLA.  The administration could work with Congress to amend CERCLA to provide that EPA would promulgate cleanup standards for different media and then allow PRPs to attain those standards without direct government oversight.

This is, of course, not a massive right-wing plot.  Many left-leaning states, including the great Commonwealth of Massachusetts, have done exactly that.  Massachusetts has been operating a privatized system for more than 20 years.  If CERCLA were thus amended, I think I could die, or at least retire, happy.  

And I won’t even try to pretend that this clip is really relevant, but it just seemed right.

Some Regulations to Reduce GHG Emissions Probably Won’t Be Rolled Back By the New Administration.

This week, the Department of Energy finalized regulations to increase energy efficiency for central air conditioners and heat pumps.  heat-pump-acThe regulations apply to products manufactured or imported into the United States beginning in 2023.  DOE estimates that, over the following 30 years, the regulations will reduce GHG emissions by 188.3 million metric tons, and will also result in similarly substantial reductions in emissions of conventional pollutants.

Given the timing, I’ve already been asked whether these regulations won’t just be rolled back by the new administration.  I’m assuming not.  The regulations were the product of a negotiated rulemaking and they are supported by the manufacturers.  Was there some implicit coercion to bring the manufacturers to the table?  I don’t know, though it’s certainly possible.  Might some manufacturers have second thoughts?  I suppose so.  Nonetheless, given the amount of time and effort put into these regulations, I still think that they’ll stick.

All of which raises two points.  First, it’s an important reminder that not all environmental regulations are promulgated by DEP and the best way to reduce emissions is to reduce electricity demand.

The second is to wonder about the answer to two related questions.  How did this happen and why doesn’t it happen more often?

Did Trump’s Election Increase the Odds of NPDES Delegation in Massachusetts? I Sure Hope So.

As I noted last spring, the Baker administration had filed legislation to support NPDES delegation to Massachusetts.  At the time, I supported the delegation effort and pleaded with my friends in the environmental community to support it.  Sadly, my pleading fell on deaf ears and the legislation was not enacted.

In supporting the legislation, I pointed out that it would be foolish to oppose delegation on the ground that a Democratic administration in Washington would do a better job protecting the environment from evil polluters than a Republican administration in Boston.  sauce for the goose

Occasionally, I’m right.  On November 8, we held an election.  Now, the shoe is on the other foot, the chickens have come home to roost, and what’s sauce for the goose is also sauce for the gander.  In other words, do my friends in the environmental community still think that federal EPA will do a better job enforcing the Clean Water Act in Massachusetts than the Baker administration?

I hope that the administration promptly refiles the necessary legislation and that it is promptly enacted.

Does MassDEP Have Authority to Regulate Electric Generating Emissions Under Section 3(d) of the GWSA? I’m Not So Sure.

As I have previously noted, I sympathize with the difficulties faced by MassDEP in trying to implement the SJC decision in Kain.  However, that does not mean that MassDEP can simply take the easy way out.  After rereading Kain, I have come to the conclusion that DEP’s proposal to limit GHG emissions from electric generating facilities in Massachusetts would in fact violate Kain, rather than constitute a means of compliance with Kain.

As a reminder, Kain challenged MassDEP’s failure to promulgate regulations under § 3(d) of the Global Warming Solutions Act, gwsa-2which required MassDEP to “promulgate regulations establishing a desired level of declining annual aggregate emissions limits for sources or categories of sources.”

MassDEP argued, in part, that the RGGI regulations, promulgated under § 3(c) of the GWSA, satisfied the 3(d) requirement.  The SJC disagreed, but the basis for its disagreement is important and I don’t think that MassDEP has read Kain as carefully as it should have.  In short, I think that the SJC concluded that §§ 3(c) and (d) are separate and distinct.  In other words, while regulations under § 3(c) do not satisfy § 3(d), it is also true that the two sections are intended to regulate different types of sources, and that electric generating sources are simply not subject to regulation under § 3(d).

What is the evidence for this conclusion?  The opinion is replete with it (all emphases are mine):

[The GWSA], § 3 (c), specifically carves out a separate process by which emissions levels and limits associated with the electric sector are established in consultation with the secretary and the Department of Energy Resources and are to take into account the RGGI.[23] By doing so, the Legislature recognized that a significant part of the electric sector would already be subject to regulations associated with the RGGI.  The RGGI is also addressed extensively in G. L. c. 21A, § 22, lending further support to the conclusion that the Legislature intended to treat emission reductions associated with the electric sector differently from other reductions in other sectors of the economy.

The department asks us to read the statutory provisions together, as directing the department to promulgate regulations establishing “a desired level of declining annual aggregate emission limits,” G. L. c. 21N, § 3 (d), and with respect to the electric sector, “tak[e RGGI] into account,” G. L. c. 21N, § 3 (c).  We disagree, as this reading ignores the Legislature’s intent that regulations related to electric sector be treated differently from regulations promulgated under § 3 (d).

I’m sorry, but this sure sounds to me as though the SJC understands the GWSA to regulate electric generating sources under § 3(c) and all other sources under § 3(d). Here’s a rhetorical question that makes the point.  How could the electric sector be treated differently from regulations promulgated under § 3(d) if in fact it is regulated under § 3(d)?

Finally, this reading has the virtue of making the SJC decision Kain less at odds with the actual goals of the GWSA.  As the Court noted, the legislature acknowledged RGGI in § 3(c).  Why would the legislature “specifically carve[] out a separate process by which emissions levels and limits associated with the electric sector are established” if it anticipated that the electric sector could also be regulated under § 3(d) in a way that is fundamentally inconsistent?

This is a case I’d enjoy litigating.

EPA Surrenders in the Regional Haze Dispute With Texas

As I noted when the 5th Circuit Court of Appeals stayed EPA’s disapproval of Texas’s regional haze regional-haze-2plan, EPA had pretty much no chance of winning. Although the parties then stayed the litigation to talk settlement, EPA announced yesterday that it was seeking a voluntary remand of the final rule. You don’t have to be privy to any confidential information to draw the conclusion that a certain election on November 8 rather drastically reduced EPA’s leverage in those negotiations. I assume that Texas just pretty much pulled the plug.

EPA’s status report to the Court announcing its intention to seek a voluntary remand says little about EPA’s reasoning – but it says enough:

In light of the Court’s July 15 Opinion and the fact that the parties’ settlement discussions were unsuccessful, EPA intends to seek a voluntary remand of the final rule in this Court.

Translation? We lost the injunction. We were going to lose on the merits. Trump’s victory eliminated any incentive Texas had to compromise. We have no options left. Discretion is the better part of valor.

It looks as though we may have seen the first concrete implications of the election on environmental policy.

DEP Is Trying to Implement Kain. How Are They Doing?

When the Supreme Judicial Court ruled in Kain that § 3(d) of the Global Warming Solutions act requires MassDEP to promulgate emission limits for multiple source categories, requiring declining annual emissions enforceable in Massachusetts, I sympathized with the difficult task MassDEP was given.  To DEP’s credit, they are working hard, determined to get draft regulations out by mid-December.

I still sympathize, but evidence to date only demonstrates further that Kain was a mistake and it’s forcing a waste of resources at MassDEP and a misallocation of attention if we really want to attain further significant GHG reductions in Massachusetts.  The ways that the approach required by Kain is flawed are almost too numerous to mention – certainly in one blog post.  Here’s one contrarian’s quick summary – regulations promulgated under § 3(d) will have almost no impact on the GWSA’s GHG reduction goals.

According to MassDEP’s background materials on the § 3(d) regulatory effort, by 2013, the Commonwealth had reduced GHG emissions by 19.7% below 1990 levels, leaving 5.3% more to reach the 25% target.  There are three logical targets to find the remaining reductions:  buildings, transportation, and power plants.

MassDEP is not currently proposing to regulate buildings under § 3(d), which is understandable, because it would be nearly impossible to do so in a way that would comply with the SJC’s interpretation of § 3(d).  MassDEP is planning to promulgate regulations for the transportation sector, but more than 75% of the reductions will come from regulations separate from § 3(d).

So what about power plants?  MassDEP proposes both a Clean Energy Standard and a declining emission cap for fossil fuel generation facilities.  The CES would not satisfy § 3(d) and is not being promulgated under § 3(d).  The declining cap will be under § 3(d).  Unfortunately, because the cap is limited to Massachusetts facilities, it does not play well with RGGI.  In fact, while a facility could technically comply with both RGGI and with the proposed Massachusetts cap, the Massachusetts regulations would make RGGI functionally irrelevant in Massachusetts.  I thought that the point of RGGI was to demonstrate the power and efficiency of interstate trading.  What if facilities in Maryland can reduce emissions more efficiently than a Massachusetts facility?  Too bad.

Finally, I take issue with the required annual declining cap.  I recently came across this picture, electric-lightwhich makes my point.  We’re not going to solve climate change by 2.5% annual reductions in power plant emissions.  The only way to comply with an annual 2.5% reduction is to keep burning gas, but burn less of it.  On the other hand, the only way to solve climate change is to establish long-term goals that provide the incentive for research to develop disruptive technologies.  Instead of 2.5%/year, the requirement should be something like 12.5% over five years, or 25% over ten.

Bottom line?

The rules MassDEP plans to promulgate pursuant to § 3(d) would make almost no difference in GHG emissions.  The one 3(d) rule that would do so would undermine the interstate trading benefits of RGGI.  Section 3(d) is a side-show which is distracting from the hard work of really reducing GHG emissions.