EPA Proposes to Use Science to Identify Waters of the United States. I’m Shocked, Shocked.

Last week, EPA and the Army Corps proposed a new rule to define what constitutes “waters of the United States.”  Déjà vu all over again.

Under the proposal, the agencies:

are exercising their discretionary authority to interpret “waters of the United States” to mean the waters defined by the longstanding 1986 regulations, with amendments to certain parts of those rules to reflect the agencies’ interpretation of the statutory limits on the scope of the “waters of the United States” and informed by Supreme Court case law. Thus, in the proposed rule, the agencies interpret the term “waters of the United States” to include: traditional navigable waters, interstate waters, and the territorial seas, and their adjacent wetlands; most impoundments of “waters of the United States”; tributaries to traditional navigable waters, interstate waters, the territorial seas, and impoundments that meet either the relatively permanent standard or the significant nexus standard; wetlands adjacent to impoundments and tributaries, that meet either the relatively permanent standard or the significant nexus standard; and “other waters” that meet either the relatively permanent standard or the significant nexus standard. The “relatively permanent standard” means waters that are relatively permanent, standing or continuously flowing and waters with a continuous surface connection to such waters. The “significant nexus standard” means waters that either alone or in combination with similarly situated waters in the region, significantly affect the chemical, physical, or biological integrity of traditional navigable waters, interstate waters, or the territorial seas (the “foundational waters”).

I think that the agencies did a pretty good job in tying their science-based approach to specific language in the statute in an effort to defuse arguments that the proposal goes beyond the reach of the statute.  What SCOTUS will make of WOTUS is another matter.

My friend Jeff Porter just wrote an excellent post about the proposed rule in which he refers to “that pesky commerce clause.”  Notwithstanding Jeff’s excellent post, I just don’t see the Commerce Clause as an obstacle (which is not the same as whether SCOTUS will use the Commerce Clause as an excuse to kill a rule that a majority doesn’t like).  Assuming for the moment that the science is right, does anyone really think that the Commerce Clause is not sufficiently expansive to provide the agencies with authority to protect these waters?  My SCOTUS nomination isn’t coming any time soon, but it just seems obvious to me that this regulation is not unconstitutional.

I think that the statutory interpretation issue is closer.  The question there is what a court does when the clearly expressed requirements of the statute mandate this kind of rule, but promulgating the rule just seems to stretch the term “navigable waters” beyond what anyone can really imagine as the limits of that term.

Another Reminder How Difficult It’s Going to Be to Get to Net Zero

Yesterday, the Baker administration announced that the Transportation Climate Initiative is dead in Massachusetts, at least for now.  This is not a surprise, particularly after Governor Lamont’s statement that there is no political support for TCI in Connecticut.  It is difficult to implement a region-wide program to reduce carbon emissions from transportation fuels when only one state in the region is prepared to do so. 

The administration tried to put the best face on the failure of TCI, suggesting that money from the infrastructure bill will help Massachusetts improve its transportation system in a way that will reduce GHG emissions.  Good luck with that.  The infrastructure bill money is great, but it’s barely going to make a dent in GHG emissions

The problem is pretty simple.  People aren’t willing to pay the cost to eliminate GHG emissions from transportation.  Unfortunately, the cost of those emissions keeps piling up every time anyone fills their gas tank.  The problem has a name.  It’s not new or complicated.  It’s called an externality.  We’re not avoiding the cost associated with carbon in fuels by failing to implement TCI.  We’re just incurring the cost in extreme weather and rising sea levels, rather than by paying more for gas at the pump.

That’s not a good long-term tradeoff.

Infrastructure Investment and Jobs Act Part 2: Investing in Transmission

This is the second post in our series on the recently enacted Infrastructure Investment and Jobs Act, covering how the Act invests in strengthening our electric grid, which could better prepare us for the shift from fossil fuel generated electricity to renewable power.

To decarbonize our energy system, electrify transportation and buildings, and drastically reduce our contribution to climate change, we’ll need to develop and deploy significant wind,… More

Infrastructure Package Makes New Investments in the Electric Transportation Future

The Infrastructure Investment and Jobs Act signed into law today not only makes critical investments in our core infrastructure, it creates several new programs to support the increasing electrification of the transportation sector.

Especially notable in the $1.2 trillion package are the investments in electric vehicle charging stations, clean-powered buses, and electric-powered ferries. These investments include:

  • Creating new grants to build out electric vehicle charging station networks
  • Funding to modernize the primarily diesel-fueled fleet of school buses with electric or alternative fuel buses
  • Funding to state and local governments to procure electric or low emissions ferries

Electric Vehicle Charging / Fueling Infrastructure

To support the nationwide buildout of electric charging and alternative fueling stations,… More

Will We Ever Stop Overestimating the Cost of Complying with Environmental Regulations?

Earlier this week, Greenwire (subscription required) had an interesting story about the role that EPA’s estimate of the cost to comply with the Mercury and Air Toxics Standards rule played in the politics and judicial review of the rule.  It turned out that compliance costs were much less than originally estimated by EPA – let alone by industry.  Unfortunately, the $9.6 billion price tag originally put on the MATS rule lived on, even after it was clear that that number was way off.

I’ve noted before that the history of efforts to estimate the cost of EPA rules tells a consistent story – they are almost always biased high.  And that’s not just industry’s estimates; EPA repeatedly overestimates the cost to comply with its rules.  There have been efforts to figure out why this happens so regularly.  I think that the most significant reason is pretty obvious.  People forget that markets work.  When EPA promulgates new rules that appear to carry big price tags, smart people get to work and figure out more cost-effective ways to comply.

This issue has significant resonance in the current moment, when we are facing a climate crisis that requires what is basically a complete reboot of a significant portion of our economy.  There are many who argue that we simply cannot afford the cost to reach a zero carbon economy.  Even aside from the totally legitimate riposte that we can’t afford not to do so, I feel pretty confident that, if we do succeed in making the necessary changes, we’ll find out that, not only have the benefits far exceeded the costs, but that the costs will have turned out to be much less than we currently expect them to be.

Local Regulation of Fossil Fuel Pipelines (or The Little City That Could)

With all the attention focused on the Keystone pipeline and the disputes over local regulation of fracking, it’s easy to overlook the small city of South Portland, Maine (population 26,000), which just prevailed in the First Circuit in a challenge to its regulation of an international oil pipeline that originates in Montreal and ends in South Portland Harbor.  (Full disclosure: I represented the city in this case.)

When Portland Pipeline Corporation (“PPLC”)(whose parent company was owned at the time at the time by ExxonMobil,… More

2021 Marked by SEC Focus on Climate-related Disclosures

With the third quarter coming to a close and year-end reporting just around the corner, public companies should be giving careful thought to the evolving landscape for climate-related disclosures. While it did not promulgate any new rules in 2021 regarding these disclosures, the SEC has been actively commenting on climate change disclosures, and new rules are almost certainly on the way.

Since 2010, the SEC has made clear that its existing disclosure regime requires issuers to assess and,… More

EPA Will Reconsider the Ozone NAAQS — What Is An Adequate Margin of Safety, Anyway?

On Friday, EPA announced that it was reconsidering its 2020 decision to leave the National Ambient Air Quality Standards for ozone unchanged.  The reconsideration will be based on the existing record.  The notice does not identify any specific perceived flaws in the 2020 decision.  However, EPA stated that it:

will reconsider the decision to retain the ozone NAAQS in a manner that adheres to rigorous standards of scientific integrity.

The tone of the notice does seem to be full of portent.  I am sure that I am not the only reader who thinks that the likelihood that EPA will affirm the 2020 decision is approximately zero.

I support the reconsideration and there seems little doubt that the literal terms of the statute require a lower ozone NAAQS.  Otherwise, the phrase “adequate margin of safety” would have little meaning.

On the other hand, government regulation is about making hard choices – and the structure of the Clean Air Act leaves us without a mechanism to make those hard choices.  The NAAQS-setting process is supposed to be purely scientific.  And once the NAAQS are set, EPA is required through the SIP process to assure that they are attained.

I remain one of the few who believe in stringent regulation and the use of cost-benefit analysis in getting there.  I still think that the CAA is flawed and I don’t think I can improve on the discussion of those flaws that I provided at the time of EPA’s decision in 2020 to retain the 2015 ozone NAAQS.

Still whistling in the wind, I fear.

More Action By EPA on PFAS; The Bad News Keeps Piling Up.

The news about PFAS keeps piling up, and the trend is pretty clear – none of it is good for manufacturers and significant users.  There were two important items this week.

First, EPA published its human health toxicity assessment for “GenX chemicals,” also known as hexafluoropropylene oxide (“HFPO”) dimer acid (and don’t forget its ammonium salt!).  EPA has pegged HFPO’s toxicity at 7-100 times higher than that of other PFAS compounds for which assessments already exist, such as PFBS, PFOA, and PFOS.  It’s probably worth noting that GenX was developed to replace PFOA.  Because it’s a shorter chain molecule, the expectation was that GenX would pose less environmental risk.

Oh, rats.

The second development this week was that EPA announced it was commencing a rulemaking to propose adding all of the compounds mentioned above as hazardous constituents in what is known as “Appendix VIII” to the hazardous waste regulations at 40 CFR Part 261.  Adding the PFAS compounds to Appendix VIII subjects them to potential corrective action requirements.  It’s also safe to say that the listing in Appendix VIII is simply the first step towards listing them as hazardous wastes under RCRA and hazardous substances under CERCLA.

It’s going to be some time before we really have our arms around the total tab for addressing PFAS contamination, but it’s definitely not going to be a small number.

The Trump 401 Certification Rule is Vacated — Does Anyone Actually Care If Section 401 Works?

Late last week, Judge William Alsup vacated the Trump-era EPA amendments to the regulations governing water quality certifications under section 401 of the Clean Water Act.  EPA had requested remand, and made clear that it disagreed with the amendments promulgated in 2020, but it opposed vacatur.

Whatever one’s view of the merits of the 2020 rule, from the court’s perspective, faced with EPA’s current statements indicating substantial disagreement with significant elements of the 2020 rule, and the 9th Circuit’s case law strongly suggesting that vacatur is appropriate in similar contexts, it’s hard to disagree with Judge Alsup’s decision.  I would not bet money on the likelihood that the appeal of Judge Alsup’s decision will succeed.

However, whatever one’s position may be on vacatur, the underlying question of how to make the 401 certification process work better remains relevant.  And whatever one’s position may be on the 2020 rule, does anyone really think that the 401 process worked well under the 1971 rule that was restored by Judge Alsup’s ruling?  I don’t agree with Andrew Wheeler on very many topics, but his description of the 401 rule as “trapping projects in a bureaucratic Groundhog Day” is hard to argue with.

In many respects, the 401 rule is similar to the fight over the NEPA regulations.

  • Step 1 – We have a rule that doesn’t work, and which needlessly inhibits good projects as well as bad.
  • Step 2 – The Trump administration amends the rule. The new rule combines a few good things with much that could rightly be criticized.
  • Step 3 – Either the courts or the Biden administration, or both, throw out the bathwater and the baby.

Is there any hope for an acknowledgement that these processes really do need reform, and that reform is not just a code word for something nefarious?  Even if these processes are not a bureaucratic Groundhog’s Day, they are absolutely subject to abuse by those who oppose projects for reasons that are grounded more in private interest than in public interest.

If we’re going to site needed projects to advance a clean economy for the 21st Century, we’re going to have to make these processes work better.  That means protecting the environment, ensuring environmental justice, and, yes, removing obstacles to the development of worthy projects.

The Law Is An Ass, RCRA Edition

Late last month, the 9th Circuit Court of Appeals ruled that a public water supplier could be liable in a citizens’ suit brought under the imminent and substantial endangerment provisions of RCRA, where the plaintiff alleged that the groundwater used by the supplier had been contaminated by the disposal of hexavalent chromium by a wood treatment facility upgradient of the supplier’s well field.

Blaming the victim doesn’t quite cover this.  The law, as Mr. Bumble said, is an ass. 

The majority opinion actually thought that this was a relatively simple and straightforward case.  The statute makes liable those who “contribute” to the “transportation” of a solid waste that causes an endangerment.  The defendant was manifestly transporting a solid waste, i.e., hexavalent chromium, through its pipes.  The plaintiff alleged that this created a substantial endangerment.

Not so simple, said Judge Tashima in dissent.  As Judge Tashima noted, the 9th Circuit, in the Hinds Investments case, held that RCRA:

requires that a defendant be actively involved in or have some degree of control over the waste disposal process to be liable under RCRA.

While the majority tried to distinguish Hinds on the ground that it applied only to generator liability, and not transporter liability, I think that Judge Tashima has much the better of the argument.  I won’t even get into how bizarre it is that a public water supplier might be found liable for creating an imminent and substantial endangerment when the basis for the claim is that the defendant supplied water that complied with Safe Drinking Water Act standards.  The law is twice an ass.

I have no idea whether the City of Vacaville has any stomach for further litigation, or whether the Supreme Court would ever take this case, but I’m reasonably confident that, were SCOTUS to hear it, its views would not be the same as those of the 9th Circuit majority.

How To Straighten the Long and Winding Road that We Call NEPA

So CEQ has proposed to amend the NEPA regulations in order to eliminate some of the changes made by the Trump Administration in 2020.  Important changes include:

  • explicit consideration of indirect impacts
  • renewed emphasis on consideration of cumulative impacts
  • elimination of the requirement that there be “a reasonably close causal relationship” between a proposed action and a potential impact, and
  • a greater willingness to allow regulators to look at the “purpose and need” that a project will address, rather than leaving the purpose and need to the project proponent.

I get the reason for the changes and I don’t oppose them.  However, the environmental community is kidding itself if it thinks that there’s a magic wand that will ensure that projects get the kind of environmental review they need without any risk that NEPA will be used as a sword by those who want to stop projects, often for reasons that have nothing to do with the public interest, and not solely as a shield by those seeking to protect the environment.

CEQ has made clear that last week’s proposal was just the first step in a two-part reform effort.  Bloomberg (subscription required) reports that phase 2 could address ways to make the NEPA process work more effectively.  I’ll believe it when I see it.

There are good reasons why the U.S. Chamber of Commerce has little credibility on NEPA issues, but this statement by Chad Whiteman at the Chamber could as easily have been made by wind or solar energy producers, or countless others looking to build the green infrastructure that we’re going to need for a net-zero economy that works for everyone:

By rolling back some of the most important updates to our antiquated permitting process, the new proposed NEPA rule will only serve to slow down building the infrastructure of the future. Important projects that address critical issues like improving access to public transit, adding more clean energy to the grid and expanding broadband access are languishing due to continued delays and that must change.

There are certainly places and projects where we simply need more review.  However, we often don’t need more review; we need better review.  Let’s hope that the smart folks at CEQ can figure out how to straighten out the long and winding NEPA road.

There’s No Doubt What EPA Staff Thinks Should Be the Result of EPA’s Reconsideration of the PM2.5 NAAQS

Late last week, EPA released an external review draft of the “Supplement to the 2019 Integrated Science Assessment for Particulate Matter.”  For those of you who don’t recall, the original Integrated Science Assessment was the report by EPA scientists that very clearly called for a decrease in the National Ambient Air Quality Standard for PM2.5.  It was criticized by the Chair of the Clean Air Act Science Advisory Committee and ignored by Administrator Wheeler, who decided to retain the current PM2.5 NAAQS, even as the evidence continued to pile up supporting a more stringent PM2.5 standard.

Well, in June of this year, EPA announced that it was revisiting that decision.  In support of EPA’s review, EPA staff have provided this supplement to the 2019 assessment.  The short version?  The evidence has continued to continue to pile up.  Here’s the summary of the summary:

This Supplement to the 2019 PM ISA finds that recent studies further support, and in some instances extend, the evidence that formed the basis of the causality determinations presented within the 2019 PM ISA.

And EPA has undertaken what might be described as a “pre-rebuttal” of the likely criticisms by those who think that the evidence does not establish causation between PM concentrations and increased mortality and morbidity:

Across epidemiologic studies examining both cardiovascular effects and mortality, sensitivity analyses as well as individual studies, further inform uncertainties in the evidence base (i.e., copollutant confounding, control for confounders such as temporal trends and temperature, and the concentration-response [C-R] relationship). Such analyses increase confidence in the relationship for both short- and long-term PM2.5 exposures and both health effect categories, and further support the causality determinations presented in the 2019 PM ISA. (My emphasis).

As I noted previously, I agree with the Trump EPA on only one aspect of the NAAQS-setting process; it takes way to long.  EPA has to make a new PM2.5 defensible in court, but it should not take two more years to do so.  The evidence has piled high enough.

Maui’s “Functional Equivalent” Test: Courts Are Still Feeling Their Way

Earlier this month, the 9th Circuit vacated the District Court judgment in a Clean Water Act citizens’ suit, because the basis for the judgment had been undermined by the Supreme Court decision in MauiThe decision is not a surprise, given that Maui explicitly rejected the prior 9th Circuit test for when discharges to groundwater are subject to the NPDES permitting regime.  It nonetheless is a useful reminder that the Supreme Court really did create a new test and that none of the prior tests remain good law.  It doesn’t mean that all recent district court decisions will necessarily be vacated, but it does mean that those district court decisions will only remain valid if the judge happened to make factual findings that either clearly include – or exclude – the defendant’s discharge from the realm of being a “functional equivalent” to a direct discharge to surface water.

In Corona Clay, the defendant had conceded that its discharge ultimately reached surface water.  Under the then-applicable 9th Circuit test, that admission was sufficient for the court to conclude that pollutants in surface water were “fairly traceable” to the discharge.  Unfortunately for the plaintiffs’, the Supreme Court made clear in Maui that a discharge may be fairly traceable to a defendant’s discharge without being the “functional equivalent” of a direct surface water discharge.

I have been and remain a supporter of the Maui decision.  Still, I have to admit that its critics are correct that, at least in the short run, it’s going to significantly increase the transaction costs devoted to resolving disputes regarding when discharges to groundwater require an NPDES permit.

Boston Regulates Building GHG Emissions: The Next Few Years Will Be Very Interesting

Last week, the Boston City Council approved amendments to the Building Energy Reporting and Disclosure Ordinance.  The changes are being referred to as “BERDO 2.0”, which almost understates the scope of the revisions.  As indicated by its name, since its original enactment, BERDO only dealt with reporting and disclosure.  Now, however, Boston will be imposing limits on GHG emissions from large buildings.

The limits will first be effective in 2025, with the limits declining every five years until they reach zero by 2050.  Significant negotiations went into the final version of BERDO 2.0 and the Council made real efforts to include some flexibility in the standards.  These provisions include:

  • Opportunities to utilize “blended” emissions standards, both within buildings and across building portfolios.
  • The ability to apply for an “Individual Compliance Schedule.”
  • The ability to apply for a “Hardship Compliance Plan.”
  • Use of Renewable Energy Certificates as a compliance mechanism
  • An alternative compliance payment provision – the initial cost will be set at $234/ton of CO2!
  • The Air Pollution Control Commission has authority to suspend some or all of the requirements of BERDO 2.0 upon finding that:

a significant obstacle interferes with implementation or that implementation has a significant negative effect on Energy cost burdens, equitable access to housing or other factors set for in the Regulations.

There’s no doubt that decarbonizing buildings is going to be one of the toughest climate nuts to crack.  I’m still skeptical that a patchwork of local regulations is the right way to go about it.  That concern is heightened when the Review Board that has significant responsibility for implementing BERDO 2.0 is going to be dominated by community representatives who will not necessarily have significant technical expertise.  Still, we have to start somewhere, and sooner rather than later.

Anyone want to join the betting pool on when the first request to suspend some part of the BERDO 2.0 requirements will be submitted?