FERC Rules on Several Core Reliability Compliance Issues: New Orders Address Cybersecurity, Registration, and Contingency Planning

The National Law Review published an article recently by Stephen M. SpinaJ. Daniel Skees, and John D. McGrane of Morgan, Lewis & Bockius LLP regarding New FERC Rules on Reliability Compliance:

At FERC’s open meeting on April 19, 2012, FERC approved several orders addressing core aspects of Reliability Standards compliance, including cybersecurity Reliability Standards, compliance registration, and contingency planning issues. The newly approved cybsersecurity Reliability Standards significantly increase the scope of facilities subject to those requirements, the compliance registration decisions clarify the jurisdictional boundary between distribution and transmission facilities, and the planning orders represent a rejection of NERC’s approach to planning for firm load loss following a single contingency.

Cybersecurity: FERC Approves Version 4 CIP Reliability Standards

In Order No. 761, FERC approved Version 4 of the Critical Infrastructure Protection (CIP) Reliability Standards. Under Version 4, the risk-based assessment methodology previously used to identify the Critical Assets that must be protected under the CIP Reliability Standards is replaced with a list of “bright-line” criteria for identifying Critical Assets, contained in Attachment 1 to CIP-002-4. These criteria, FERC concluded, “will offer an increase in the overall protection for bulk electric system components that clearly require protection, including control centers.” In the order, FERC established a deadline of March 31, 2013, for NERC to submit the Version 5 CIP Reliability Standards, which will address the remaining directives from Order No. 706, in which FERC approved the original CIP Reliability Standards. The project site for the Version 5 CIP Reliability Standards is located online.

Compliance Registration: FERC Addresses Distribution/Transmission Distinction

In City of Holland, 139 FERC ¶ 61, 055 (2012), FERC rejected the City of Holland, Michigan, Board of Public Works’ appeal of NERC’s decision to register the City of Holland as a Transmission Owner and Transmission Operator. In reaching this decision, FERC rejected the City of Holland’s assertion that its facilities are distribution facilities, and therefore not part of the definition of “Bulk Electric System” and not subject to registration. FERC explained that the City of Holland’s facilities perform a transmission function, transporting power from the City of Holland’s generation facilities or importing power from other sources over high-voltage lines before stepping the voltage down for distribution to end users. In reaching this decision, FERC also thought it relevant that the facilities at issue do not serve load from a single transmission source, can experience bi-directional flows, and are above the voltage level generally considered distribution voltage.

Commissioner Cheryl A. LaFleur dissented on the grounds that this order depends on the fundamental, yet unsettled question of what facilities are considered “local distribution” under Section 215 of the Federal Power Act (FPA) and therefore outside of FERC’s jurisdiction. As explained in Commissioner LaFleur’s dissent, FERC has in the past identified the criteria for identifying local distribution facilities under Section 201(b) of the FPA, which uses language identical to Section 215, but FERC chose not to apply the Section 201(b) criteria in addressing the City of Holland’s appeal. Commissioner LaFleur asserted that if FERC believes that Congress intended to create different classes of local distribution facilities, FERC has the “burden of demonstrating that this is a reasonable interpretation of the statute.”

In U.S. Department of Energy, Portsmouth/Paducah Project Office, 139 FERC ¶ 61,054 (2012), FERC granted the Portsmouth/Paducah Project Office’s appeal of its registration as a Load-Serving Entity (LSE). FERC had previously remanded this registration, and in ruling on NERC’s subsequent decision upholding the registration, concluded that NERC had failed to support registration as an LSE because NERC had not shown that the lessees and contractors working at the Portsmouth/Paducah Project Office are separate end-use customers to whom the Portsmouth/Paducah Project Office provides electricity. FERC explained that the Ohio Valley Electric Corporation, which sells to the Portsmouth/Paducah Project Office under a state retail tariff, is the appropriate LSE.

Contingency Planning: FERC Demands Stringent Criteria for Planned Load Loss Following a Single Contingency

In Order No. 762, FERC rejected NERC’s proposed revisions to “Note b” in TPL-002-0b, which explains when a Transmission Planner or Planning Authority can plan for the interruption of firm load to meet system reliability requirements following a single contingency. Under NERC’s proposal, these entities could plan for load shedding following a single contingency so long as they documented such planning and considered alternative solutions in an open and transparent stakeholder process. FERC concluded that the proposal failed to satisfy FERC’s earlier directives on this issue and did not present an “equally effective and efficient alternative.” According to FERC, the proposed Note b process “is vague, potentially unenforceable and may lack safeguards to produce consistent results.” The parameters for the proposed stakeholder process, FERC concluded, do not provide a meaningful limitation on the ability to curtail firm load following a single contingency. Furthermore, the conditions under which such interruptions are appropriate remain undefined, threatening the basic system performance objectives of the NERC Transmission Planning Reliability Standards, risking system reliability.

In Transmission Planning Reliability Standards, Notice of Proposed Rulemaking, 139 FERC ¶ 61,059 (2012), FERC proposed to remand NERC’s proposal to combine the four current Transmission Planning Reliability Standards into a single new standard, TPL-001-2. According to FERC, footnote 12 to Table 1 in this proposed standard, which governs planning for the interruption of firm load following a single contingency, presents the same concerns as the Note b issues that led FERC to reject a similar proposal in Order No. 762 (described above). This footnote, which only requires a documented plan developed through an open and transparent stakeholder process that considers alternatives, does not define the parameters governing the decision to plan for the loss of firm load following a single contingency. While FERC noted several improvements in the standard, because of concerns with footnote 12, FERC proposed to find that TPL-001-2 does not meet the statutory criteria for approval. Comments will be due 60 days after the Notice of Proposed Rulemaking is published in the Federal Register. In the Notice of Proposed Rulemaking, FERC requested comments on several transmission planning issues in addition to the core concern regarding planned load curtailments.

Copyright © 2012 by Morgan, Lewis & Bockius LLP

More Wisconsin DNR Permit Streamlining: Piers, General Navigable Waterway Permits, and Environmental Permit Notice Procedures — Governor Walker Signs 2011 Wisconsin Act 167

On April 2, 2012, Governor Walker signed into law 2011 Wisconsin Act 167 (the Act), the latest legislative effort to streamline the Wisconsin Department of Natural Resources (DNR) permitting process. The Act’s primary focus is on the substance and procedures of navigable waterway permitting under Wis. Stat. ch. 30, especially piers, with additional revisions to the public notice procedures of the air, wastewater, solid and hazardous waste, and remedial action statutes.

The revisions made by the Act take effect on August 1, 2012 for all but a few of the pier provisions which are effective immediately upon publication (noted below).[1]

A. Chapter 30 Navigable Waterway Permitting

These amendments fall into four broad categories: piers, grading permit exemptions, general permits and individual permits.

1. Piers

The DNR’s regulation of piers on navigable waterways has been a matter of controversy and legislative attention for many years. Act 167 is the latest installment.

In 2004, Wisconsin enacted a major legislative reform package called the “Jobs Creation Act”, making significant revisions to the sections of Wis. Stat. ch. 30 that govern permits for activities affecting navigable waterways. The Jobs Creation Act formalized three permit categories: exemptions, general permits, and individual permits; and established related time frames, hearing and appeal procedures. To implement these legislative directives, the DNR embarked on a major rulemaking effort to adopt general permits and establish the criteria and procedures for issuance of individual permits. Significant revisions to the rule addressing piers, NR 326, were proposed but not enacted with the remainder of the rules due to public controversy over the proposed revisions. See our Client Alert on the Jobs Creation Act.

The DNR continued its efforts to revise and update NR 326 with respect to piers and pier standards, but to no avail. Ultimately, the Legislature stepped in and enacted 2007 Wisconsin Act 204, resolving the debate by exempting smaller piers from the need to obtain a permit and creating a cut-off date and pier registration process for larger piers. These larger piers could also be exempt from the permit requirement if they were placed before February 6, 2004 (i.e., they were “grandfathered”) and registered with the DNR by April 1, 2011. 2011 Wisconsin Act 25 subsequently extended the registration date to April 1, 2012.

Effective immediately,[2] Act 167 has eliminated the February 6, 2004 “grandfathering” date and the entire pier registration process for the larger piers.[3]The existing exemption for smaller piers is maintained with minor clarifying revisions to the language.

As a result of Act 167, the following piers are exempt from the requirement to obtain a permit:

  1. The pier meets the following criteria:

a. No more than 6’ wide and extends no further than to a point where the water is 3’ deep or deep enough to moor a boat;

b. No more than two boat slips for the first 50’ of riparian owner’s shoreline footage and no more than one boat slip for each additional 50’ of footage; and

c. A loading platform may be more than 6’ wide if the surface area of the platform is no more than 200 sq. ft.[4]

  1. The pier does not meet the criteria listed under sub. 1, but is an existing pier (i.e., was placed on the bed of the waterway before April 17, 2012[5]) regardless of whether or not it has been registered, UNLESS:

a. The DNR notified the riparian owner before April 17, 2012[6] that the pier is “detrimental to the public interest”; or

b. The pier “interferes with the riparian rights of other riparian owners.”[7]

Further, the DNR is prohibited from taking enforcement action against the riparian owner of any pier if the DNR issued either a permit or a written authorization for the pier and the pier is in compliance with that permit or authorization,[8] and a pier owner may relocate or reconfigure the pier so long as the pier is not enlarged.[9]

2. Grading permit exemption

Act 167 has also eliminated the need to obtain duplicative state permits to move dirt on the bank of a navigable waterway. Wis. Stat. s. 30.19 regulates grading activities on the waterway bank. Wis. Stat. ch. 283 regulates the management of stormwater from land disturbing activities (e.g., construction). Both of these provisions are directed at protecting water quality from dirt that is disturbed and can run off as a result of site work.

Effective August 1, 2012, land grading activity on the bank of a navigable waterway is exempt from the requirement to obtain a s. 30.19 permit if it is authorized by a stormwater discharge permit issued under s. 283.33. If the land grading is authorized by a county permit issued under its shoreland zoning ordinance, it is similarly exempt from the requirement to obtain an s. 30.19 grading permit from the DNR.[10]

3. General permits

If a regulated project or activity is not exempt from the requirement to obtain a permit, it must be authorized by either a general permit or an individual permit. General permits are written to cover any number of projects or activities that can meet a standardized set of criteria, whereas an individual permit is written specifically for that project. As a result, general permits are ultimately time savers. Changes made in Act 167 maximize the DNR’s authority to issue general permits under ch. 30 and streamline the process for doing so.

The Act maximizes the DNR’s authority to issue general permits by expanding the universe of activities for which the DNR can issue general permits to include any activity regulated under ch. 30.[11] The Act streamlines the process for doing so by exempting general permits from the definition of “rule”,[12] eliminating the lengthy and cumbersome procedure for adopting rules, and replacing that procedure with a public comment period and a newly-created legislative committee review process.[13]

Any general permit must contain requirements and conditions that assure the activity being authorized “will cause only minimal adverse environmental impacts, will not materially interfere with navigation, and will not have an adverse impact on the riparian property rights of adjacent riparian owners.”[14]

Once a general permit is issued, the process works like this: If you believe your activity meets the eligibility criteria you apply to the DNR for “coverage” under the general permit no less than 30 days before beginning the activity. If the DNR does not request more information or otherwise inform you that your activity does not qualify for the general permit within that 30-day period, the activity is considered authorized and you are legally free to proceed. The DNR may make one request for additional information during that 30-day time period; if the DNR does so, the time it takes you to provide that information is added to the 30 days the DNR has to respond to your application.[15]

Once issued, a general permit is valid for five years. Regardless of the expiration date of a general permit, an activity authorized under a general permit remains authorized for five years from the date of coverage or until it is complete, whichever occurs first. The DNR is authorized to renew, modify and revoke general permits following the same procedures used to issue the general permit initially.[16]

The net effect of these revisions is to invest the time initially in developing and issuing the general permits so that as many activities as possible can be authorized using these streamlined procedures. For activities that don’t meet the general permit criteria, an individual permit option remains available.

4. Individual permits

Act 167 makes a few revisions to the procedures for issuance of individual permits, also designed to tighten up the timelines. The primary revisions conform these procedures to the procedures included in the recently-enacted Wetlands Reform Bill (2011 Wisconsin Act 118) so that the procedures for navigable waterway permits issued under ch. 30 and for wetland water quality permits issued under ch. 281 are the same.

Here is how it all works:[17]

a. Within 30 days of receipt of the individual permit application, the DNR determines if the application is complete/incomplete:

  • If complete, THE DNR notifies the applicant and the date of that notification becomes the “date of closure”; the date of closure drives subsequent deadlines as described below.
  • If incomplete, the DNR notifies the applicant of the deficiency/ies within the same 30-day time period; the DNR is limited to one request for additional information within the same 30-day time period; within 10 days of receipt of the requested information, the DNR notifies the applicant if the application is complete/incomplete (if still incomplete, the DNR and applicant can agree to additional information the applicant will provide); the date of this second notification becomes the date of closure.
  • If the DNR fails to meet this 30-day or 10-day time period, the date of closure becomes the last day of either the 30-day or 10-day time period.

b. Within 15 days of the date of closure, the DNR issues the public notice of pending application.

  • The notice may include notice of a public hearing if the applicant requests it.
  • If not, any member of the public may request a public hearing within 20 days of issuance of the public notice; or with or without a request, the DNR may decide to hold a public hearing if it determines “there is significant public interest” to do so.
  • The DNR must issue a public notice of the hearing within 15 days of receipt of a hearing request or its own decision to hold a hearing; the public comment period closes 10 days after the hearing is held.

c. Within 20 days after the public comment period has ended if a hearing is held, or within 30 days after the public comment period has ended if no hearing is held, the DNR issues its decision to either issue or deny the permit.

d. If the DNR fails to comply with these time periods, the permit is considered to be issued and the activity may proceed, although the DNR may impose terms and conditions on the permit “that are consistent with the applicant’s basic proposal.”[18]

The DNR’s decision to issue or deny the permit is subject to challenge in either or both an administrative contested case hearing under ch. 30 and judicial review under ch. 227. The ch. 30 contested case procedures were significantly revamped in the Jobs Creation Act (2003 Wisconsin Act 118). Those procedures remain intact under Act 167[19] and are summarized in our Client Alert on the Jobs Creation Act.

B. Public Notice Procedures for Ch. 30 and Other Environmental Statutes

Act 167 also brings the DNR’s public notice procedures into the digital age by requiring the DNR to:

  1. Create an electronic notification system to provide public notice;[20]
  2. Post public notices on the DNR website;[21]
  3. Post on the DNR website any navigability determinations DNR makes – which may be relied upon;[22]
  4. Post (to the greatest extent possible) the current status of any application for a permit under chs. 30, 281 to 285, or 289 to 299, and any hearings scheduled on the application.[23]

Importantly, the Act also specifies that the date on which the DNR first posts the public notice on its website is the date the notice is considered to be issued, for purposes of permits to be issued under ch. 30,[24] Wisconsin Pollutant Discharge Elimination Systerm permits to be issued under ch. 283,[25] air construction and operation permits to be issued under ch. 285,[26] solid and hazardous waste facility approvals to be issued under chs. 289 and 291,[27] and remedial actions to be authorized under ch. 292.[28]

C. Other revisions

  1. Act 167 makes other revisions which address:
  2. Repair of boathouses[29]
  3. Expedited procedures for approval of low hazard dams[30]
  4. Bridge standards[31]
  5. Use of air dispersion modeling for minor source determination[32]

The DNR staff will use the time between now and August 1 to create application forms, internal procedures and guidance, and otherwise prepare to implement these statutory directives. For more information, please contact the author of this client alert.



[1] Section 131 of the Act provides that the Act is effective on the first day of the forth month after publication, with the exception of certain provisions involving piers which become effective the day after publication. Publication is expected to be April 16, 2012. Thus the majority of the Act will be effective August 1; those limited pier provisions are expected to be effective on April 17, 2012.

[2] See Endnote 1

[3] s. 30.12(1k)(b) as amended

[4] s. 30.12(1g)(f)

[5] See Endnote 1

[6] See Endnote 1

[7] s. 30.12(1k)(b)1m. and 2.

[8] s. 30.12(1k)(cm)

[9] s. 30.12(1k)(e)2.

[10] s. 30.19(1m)(f) and (g)

[11] s. 30.206(1)(am)

[12] s. 227.01(13)(rt)

[13] s. 30.206(5m)

[14] s. 30.206(1)(am)

[15] s. 30.206(3)(a)

[16] s. 30.206(1)(b)

[17] s. 30.208(2)-(4)

[18] s. 30.208(2)(d)

[19] s. 30.209

[20] s. 30.206(2b)(a)

[21] s. 30.206(2b)(a)

[22] s. 30.102(1)

[23] s. 30.102(2), 299.l7

[24] s. 30.206(2b), 30.208(5)(bm)

[25] s. 283.39(lm), 283.63(1)(a)

[26] s. 285.61(5)(c), 285.62(3)(c)

[27] s. 289.25(3), 289.41(1m)(g)1., 291.87(3)

[28] s. 292.31(3)(f)

[29] s. 30.121

[30] s. 31.12(5)

[31] s. 84.01(23)

[32] s. 285.63(11)

© MICHAEL BEST & FRIEDRICH LLP

U.S. Announces Innovative Clean Air Agreement For Industrial Flares With Marathon Petroleum Company

Recently The National Law Review published an article by the U.S. Environmental Protection Agency regarding a New Clean Air Agreement:

The U.S. Environmental Protection Agency (EPA) and the Department of Justice today announced an innovative environmental agreement with Ohio-based Marathon Petroleum Company that already has significantly reduced air pollution from all six of the company’s petroleum refineries. In a first for the refining industry, Marathon has agreed to state-of-the-art controls on combustion devices known as flares and to a cap on the volume of waste gas it will send to its flares. When fully implemented, the agreement is expected to reduce harmful air pollution by approximately 5,400 tons per year and result in future cost savings for the company.

“Today’s agreement will result in cleaner air for communities across the South and Midwest,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “By working with EPA, Marathon helped advance new approaches that reduce air pollution and improve efficiency at its refineries and provide the U.S. with new knowledge to bring similar improvements in air quality to other communities across the nation.”

“This agreement is a great victory for the environment and will result in cleaner and healthier air for the benefit of communities across the country in Illinois, Kentucky, Louisiana, Michigan, Ohio and Texas,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. “By spurring corporate ingenuity, this settlement will dramatically reduce emissions from all 22 flares at Marathon’s six refineries.”

The settlement is part of EPA’s national effort to reduce air pollution from refinery, petrochemical and chemical flares. A flare is a mechanical device, ordinarily elevated high off the ground, used to combust waste gases. The more waste gas a company sends to a flare, the more pollution occurs. The less efficient a flare is in burning waste gas, the more pollution occurs. EPA wants companies to flare less, and when they do flare, to fully combust the harmful chemicals found in the waste gas.

A consent decree filed today in the U.S. District Court in Detroit resolves Marathon’s alleged violations of the Clean Air Act. As part of the effort to reach this agreement, Marathon, under the direction and oversight of EPA, spent more than $2.4 million to develop and conduct pioneering combustion efficiency testing of flares and to advance the understanding of the relationship between flare operating parameters and flare combustion efficiency.

In addition, beginning in 2009, Marathon installed equipment, such as flow monitors and gas chromatographs, to improve the combustion efficiency of its flares. To date, Marathon has spent approximately $45 million on this equipment and projects, and plans to spend an additional $6.5 million. Marathon also will spend an as yet undetermined sum to comply with the flaring caps required in the consent decree.

At the same time, Marathon indicates that the equipment it already has installed is saving it approximately $5 million per year through reduced steam usage and product recovery. Marathon also projects additional savings through the operation of the equipment to be installed in the future.

From 2008 to the end of 2011, the controls Marathon installed eliminated approximately 4720 tons per year of volatile organic compounds (VOCs) and 110 tons per year of hazardous air pollutants (HAPs) from the air. An additional 530 tons per year of VOCs and 30 tons per year of HAPs are projected to be eliminated in the future.

Under the agreement, Marathon will also implement a project at its Detroit refinery to remove another 15 tons per year of VOCs and another one ton per year of benzene from the air. At an estimated cost of $2.2 million, Marathon will install controls on numerous sludge handling tanks and equipment.

Marathon’s six refineries are located in: Robinson, Ill.; Catlettsburg, Ky.; Garyville, La.; Detroit; Canton, Ohio; and Texas City, Texas. Together, the refineries have a capacity of more than 1.15 million barrels per day.

Marathon, headquartered in Findlay, Ohio, will pay a civil penalty of $460,000 to the United States.

The consent decree is subject to a 30-day public comment period and final court approval.

More about the settlement: http://www.epa.gov/compliance/resources/cases/civil/caa/marathonrefining.html

More about EPA’s civil enforcement of the Clean Air Act: http://www.epa.gov/compliance/civil/caa/index.html

More about EPA’s refinery initiative: http://www.epa.gov/compliance/resources/cases/civil/caa/oil/

© Copyright 2012 United States Environmental Protection Agency

Supreme Court Broadens the Types of Federal Agency Actions That Can Be Challenged in Court

Recently an article by Jerry Stouck and David B. Weinstein of Greenberg Traurig, LLP regarding the  Types of Federal Agency Actions that can be Challenged in Court was published in The National Law Review:

GT Law

The Supreme Court recently held, in Sackett v. Environmental Protection Agency, that “compliance orders” unilaterally issued by the EPA, which the agency contended were informal directives not subject to judicial review, qualify as “final” agency actions that can be challenged in court under the Administrative Procedure Act (APA). The decision is not limited to EPA compliance orders, although many hundreds of those are issued each year, which now will be subject to judicial review. Sackett applies more broadly because it expands the types of federal agency actions that will be deemed final, and thus subject to judicial challenge, under the APA. Any agency action that has coercive legal effect, and no established avenue for agency-level review, is now potentially challengeable under Sackett.

The APA authorizes federal courts to enjoin or set aside agency action that is arbitrary, capricious, or contrary to law, and to compel agency action unlawfully withheld or unreasonably delayed. In any such case, however, it is a jurisdictional requirement that the agency action be “final.” The rationale is that courts should not interfere with ongoing agency decision-making. Such finality is relatively clear when a party challenges a regulation or an order resulting from formal agency adjudications (e.g., license or permit proceedings). But most actions of federal regulatory agencies fall into neither category, and instead constitute what practitioners call “informal” agency adjudication. EPA compliance orders are in that category; they do not result from any well-defined agency proceeding. So are many other types of agency directives and procedures.

Sackett involved a couple who, in the course of developing a residential lot they owned into a home site, filled in part of the lot with dirt and rock. Unbeknownst to the Sacketts, their lot contained wetlands that the EPA considered to be within federal regulatory jurisdiction under the Clean Water Act (CWA). If that were true, the Sacketts could not lawfully fill the wetlands without a federal permit. The EPA issued a compliance order containing “Findings and Conclusions” that the lot did in fact contain wetlands subject to EPA jurisdiction. The order also directed the Sacketts to restore the lot in accordance with an EPA work plan and to provide EPA with access to the lot and to records concerning conditions at the lot.

The Sacketts, who believed their lot did not contain wetlands subject to the CWA, requested a hearing before the EPA, which the agency refused to provide. The Sacketts then filed suit, but the lower courts dismissed it, finding that the compliance order did not qualify as final agency action under the APA. Thus, the Sacketts were unable to initiate a judicial proceeding to resolve the dispute over whether their wetlands were subject to the CWA. But if the EPA later went to court to enforce its compliance order, the government contended that statutory per-day penalties owing from the Sacketts would double, and that obtaining a necessary permit would be more onerous under applicable regulations. In essence, therefore, the EPA compliance order was coercive — if the Sacketts “voluntarily” complied with the order, they would avoid the double penalties and the additional permitting requirements.

That coercive effect was central to the Supreme Court’s reasoning in holding that the compliance order was a final agency action, subject to judicial review. The coercive effect of the EPA compliance order in Sackett is also what makes the decision potentially applicable to other, similarly-coercive agency directives and procedures. Under the test articulated by the Court in a 1997 decision, Bennett v. Spear, agency action is “final” for APA purposes if it both “determines rights and obligations” and marks the “consummation” of the agency’s decision-making process. The Court in Sackett found the former requirement satisfied because “legal consequences” flowed from the compliance order, i.e., the doubling of the statutory penalties and tightening of the wetlands permitting requirements. The government contended, however, that even though the EPA refused the Sacketts’ request for a hearing, the compliance order was not the end of the Agency’s decision-making process. The government pointed to a portion of the order that invited the Sacketts to “engage in informal discussion” with the EPA regarding the order’s terms and requirements and/or any allegations in the order that they believed to be inaccurate. The Court rejected this argument, and found the compliance order sufficiently final, because it conferred no “entitlement” to further Agency review. The Court concluded that the “mere possibility” that an agency might reconsider as a result of informal discussions “does not suffice to make an otherwise final agency action nonfinal.”

Underlying the Sackett decision is a concern, expressly noted by the Court, that agencies should not be allowed to “strong-arm . . . regulated parties into ‘voluntary compliance’ without the opportunity for judicial review.” When regulated parties face such strong-arming at the hands of federal agencies they should now consider whether, pursuant to Sackett, judicial redress is available under the APA.

©2012 Greenberg Traurig, LLP

USEPA Proposes to Retain Current GHG Thresholds in Step 3 of the Tailoring Rule

Recently an article by Energy and Public Utilities Group of Schiff Hardin LLP regarding the USEPA’s GHG Thresholds appeared in The National Law Review:

As the D.C. Court of Appeals heard an unprecedented two days of oral argument on challenges to USEPA’s suite of greenhouse gas (“GHG”) regulations, USEPA issued an advance copy of yet another GHG regulation-the third step of its GHG permit Tailoring Rule (“Proposed Step 3 Rule”). Advance copy of Docket No. EPA-HQ-OAR-2009-0517 available at www.epa.gov/nsr/ghgdocs/TRStep3_Proposal_FRN.pdf. Proposed Step 3 retains the current GHG permitting thresholds for the Prevention of Significant Deterioration (“PSD”) and Title V Operating Permit Programs under the Clean Air Act (“CAA”). The proposal is consistent with USEPA’s phased-in approach to tailor the requirements of the CAA to apply to only the largest emitters. In so doing, USEPA recognizes that state agencies are not ready to handle a bigger permitting program.

In 2010, USEPA committed to complete action on a Step 3 rulemaking by July 1, 2012, and to make Step 3 effective on July 1, 2013. Steps 1 and 2 of the Tailoring Rule were promulgated in May 2010, applying only to the largest sources of GHG emissions. In that rule, USEPA stated that it would take comment and consider whether to include smaller sources or lower the trigger for applicability in Step 3. In the Proposed Step 3 Rule, USEPA determined that “the permitting authorities are not significantly better positioned now” to process more GHG permits than they were in May 2010, so USEPA proposes to retain the current applicability thresholds promulgated under Steps 1 and 2.

The thresholds for determining GHG PSD applicability are as follows:

  • Step One:
    • Starting January 2, 2011, GHGs must be addressed in Title V permits for all sources that are otherwise subject to Title V permitting requirements based on their emissions of non-GHG pollutants.
    • In addition, PSD requirements apply to GHGs for projects that increase net GHG emissions by at least 75,000 tons per year (“tpy”) carbon dioxide equivalent (“CO2e”), but only for projects that are “major modifications” as a result of an increase in emissions of a regulated, non-GHG pollutant.
  • Step Two:
    • Starting July 1, 2011, some stationary sources that would not otherwise require Title V or PSD permits require such permits solely as a result of emitting GHGs.
    • Stationary sources that emit or have the potential to emit at least 100,000 tpy CO2e (and 100 tpy GHGs on a mass basis) are subject to Title V permitting requirements.
    • Stationary sources that emit or have the potential to emit at least 100,000 tpy CO2e (and 100 or 250 tpy GHGs on a mass basis, depending on the source) constitute “major stationary sources” under the PSD regulations. New stationary sources over the 100,000 tpy CO2e threshold are subject to PSD requirements for their GHG emissions. In addition, projects that increase net GHG emissions by at least 75,000 tpy CO2e are “major modifications” (assuming other elements are met and no exclusions apply), whether or not those projects would constitute “major modifications” based on an increase of any other pollutant.

USEPA also proposed two changes to streamline the permitting program under Step 3.

The first is to extend the use of the plantwide applicability limit (“PAL”) to GHG permitting. The source would apply for a PAL that would apply to the entire source rather than specific emissions points. This alteration would allow facilities to alter emissions units without triggering new permitting requirements, provided that emissions levels do not exceed the PAL. The added flexibility allows companies to respond to changing market conditions while streamlining permitting.

The second change would create the regulatory authority for USEPA to issue synthetic minor permits for GHGs where the agency is the PSD permitting authority. Under this approach, a GHG source could agree to an enforceable GHG emissions limit set below a level that would trigger PSD permitting requirements. Such a limit might be an hourly or daily fuel consumption limit, for example. USEPA proposes to give itself and its designated agents the ability to issue synthetic minor permits for GHG and potential GHG emitters. USEPA stated that many state and local permitting authorities already have the ability to issue such synthetic minor permits.

The proposal solicits comments on whether streamlined approaches could be appropriate for some source categories and requests that commenters provide detailed proposals for those source categories. For example, general permits could be considered for some. USEPA solicits comments on which source categories would be candidates for the creation for a Potential to Emit (“PTE”) specific rule or guidance; input on whether such a rule should target specific source categories or be made broadly available; and comments on the appropriate structure and requirements for such a rule.

The proposal requests comment on a number of other PSD program concepts, including permitting burden on state agencies, presumptive BACT and “empty” Title V permits. The proposal has not yet been published in the Federal Register but USEPA states that the comment period for the Proposed Step 3 Rule will end on April 20, 2012. A public hearing will be held on March 20, 2012 in Arlington, Virginia.

This brief summary does not address the many permitting decision nuances and requested comments reflected in the agency action, so careful reading of the proposed rule is suggested. For more information about the Tailoring Rule, please see our prior updates: “USEPA Issues Final Tailoring Rule” and“Greenhouse Gas Reporting and Permitting Deadlines in 2011”.

© 2012 Schiff Hardin LLP

Increasing Offshore Wind Projects: A Focus on Regulatory Authority

I. Introduction: The Rise of Offshore Wind Projects

Meeting the challenges of environmental sustainability and climate control will require unprecedented advances in the global energy market through regulatory consistency, policy incentives, and economic integration.  Energy conservation and environmental preservation are important to all human welfare.  The current energy structure, on a global level, has contributed significantly to the drastic climate fluctuations as well as environmental destruction.  Now that the impacts of fossil fuel consumption have become significant, a diversified energy structure is needed to ensure sustainability.[i]  The United States needs to become more invested in alternative renewable energy sources in order to curb the impacts caused from fossil fuel consumption which include: environmental degradation, pollution, death, exhaustion, depletion, etc.

The energy demand in the United States as well as the rest of the world will continue to increase with industrialization, advancements in technology and population growth.  While energy consumption rates skyrocket to never-before-seen heights, access to fossil fuels becomes more difficult and more expensive.  Global development and energy demands will continue as newly industrialized countries become competitive with developed countries, and yet the global arena lacks an authoritative body to manage our precious fossil fuels.  The United States should not hesitate in decreasing its dependency on fossil fuels and increasing renewable energy development.

As a result of rising concerns about energy prices, supply uncertainties, and adverse environmental impacts, the United States has taken a new approach to its energy structure by working towards developing renewable energies and generating more energy from domestic sources, while trying to lessen the environmental impacts.[ii]  This approach calls for a cohesive system of agency regulation and management to streamline the permitting process for alternative renewable energy resources, especially offshore wind projects.

The potential energy generation from offshore, renewable resources is substantial and implementation is essential for environmental sustainability and responsible environmental resource management.[iii]  For example, an offshore turbine is capable of producing fifty percent more electricity than an onshore turbine of the same size because offshore winds are stronger and more constant. [iv] The potential for U.S. offshore wind electricity is estimated to be more than 900,000 megawatts, a figure equal to the United States’ current production capacity.[v]  The public needs to become educated on environmental impacts caused by fossil fuel consumption and the potential for renewable resources to mitigate those impacts.  In turn, the public needs to pressure those agencies responsible for energy production to promote consistent and dependable methods for permitting renewable energy resource development.

In April 2010, the BP oil spill, the largest accidental oil spill in American history, caused irreparable damage to the water supply, marine wildlife and the entire ecosystem of the Gulf of Mexico.  The actual damage caused by exploiting fossil fuel resources, in addition to the potential risks and unpredictable long-term impacts, provides sufficient motivation to move in the direction of promoting renewable energy resources, which pose relatively zero risks.[vi]  However the current national energy structure is exactly the opposite.  Renewable energy projects coming online are sadly minimal and the United States and other nations continue to pursue fossil fuel projects.

Part II discusses how the United States has delegated jurisdiction over the ocean to various agencies and provides an overview of the conflicts that exist among agencies with regard to jurisdiction over the ocean.  Part III provides a case specific analysis of the permitting process for an offshore wind project and the difficulty of satisfying the requirements of the environmental review process.  This section also suggests that the federal government should create new legislation for managing offshore wind projects, as well as for other renewable energy resources.  Finally, Part IV offers recommendations that the federal government and the public should pursue initiatives and existing practices in the fossil fuel arena to be applied to the renewable energy arena, as to protect the health and economic stability of the United States.

II. Regulatory Background of Offshore Management – Jurisdictional Conflict Among Agencies

In 1945, President Truman proclaimed that the United States had jurisdiction and control over the U.S. Continental Shelf and the natural resources on the shelf and of the subsoil.[vii]  Enacted in 1953, the SLA gave coastal states jurisdiction and control over the sea and the submerged lands, extending three nautical miles seaward from the coastline.[viii]  However, SLA reserved the federal rights to “commerce, navigation, national defense, and international affairs.”[ix]  OCSLA, enacted shortly after SLA, codified the Truman Proclamation and delegated to the Secretary of the Interior authority over exploration and development on the Outer Continental Shelf (OCS), submerged lands seaward from each states’ territory.[x]  It is now established law that the seabed of the ocean beyond three miles from the shore and on the OCS is within U.S. territorial water and under exclusive federal jurisdiction.[xi]  The OCSLA, delegated authority to the Department of the Interior to issue oil and gas leases, but it did not delegate authority over renewable energy development on the OCS.[xii]

Over the last decade, the delegation of federal authority to manage environmental regulations and oversee the development of offshore projects has created confusion among several agencies.  Prior to 2005, the Army Corps of Engineers (Corps) was responsible for permitting offshore wind projects pursuant to the Rivers and Harbors Act.[xiii]  However, under the Energy Policy Act of 2005, the Secretary of the Interior was given the power to grant leases, easements, and rights-of-way on the Outer Continental Shelf (OCS) for renewable energies.[xiv]  In 2006, the Secretary of the Interior delegated its authority to the DOI’s Mineral Management Service (MMS).[xv]  The Corps, however, retained its authority over permitting offshore projects.[xvi]

In response to confusion between MMS and the Corps as to who had exclusive authority over offshore renewable energy projects, the DOI and the Federal Energy Regulatory Commission (FERC) signed a Memorandum of Understanding (MOU) that gave MMS exclusive jurisdiction over offshore wind energy projects on the OCS.[xvii]  The MOU charged MMS with conducting environmental reviews and ensuring that offshore wind projects comply with other federal agency requirements, including requirements under NEPA.[xviii]

The CEQ is charged with specific duties to carry out NEPA’s standards, including the duty to suggest, “national policies to foster…environmental quality to meet…goals of the Nation.”[xix]  Under NEPA, federal agencies such as MMS are required to submit to CEQ a statement detailing any potential environmental impacts of any “major Federal actions significantly affecting the quality of the human environment.”[xx]

The Energy Policy Act of 2005 authorized the Department of the Interior (DOI) to issue leases, easements, or right-of-ways for alternative energy projects on the OCS.  Prior to 2005, MMS had been responsible for managing oil, natural gas, and other resource activities on OCS lands.  Under the Energy Policy Act of 2005, MMS became respo­­­nsible for managing alternative energy-related activities, including renewable resources, on OCS lands.[xxi]  MMS became the lead agency to coordinate the permitting process, and to monitor and regulate alternative energy production.[xxii]  MMS is charged with ensuring that projects are in conformity with NEPA before permits are issued.  Therefore MMS and its predecessors must comply with NEPA when considering applications, such as the Cape Wind application discussed below.[xxiii]

The statement detailing environmental impacts, required by the CEQ, can take the form of an environmental impact statement (EIS),[xxiv]a thorough assessment of the environmental impacts, or an environmental assessment (EA),[xxv]which is more conciseimpact statement.  The EIS must include: (1) the environmental impacts of the proposed action, (2) alternatives to the proposed action; and (3) “any irreversible and irretrievable commitments of resources which would be involved in the proposed action should it be implemented.”[xxvi]  MMS recognizes that offshore wind projects will significantly affect the human environment, therefore requiring an EIS instead of an EA.[xxvii]

MMS published the Renewable Energy and Alternative Uses of Existing Facilities on the Outer Continental Shelf (Rules),[xxviii]which requires two additional environmental reviews before MMS issues a commercial lease for an offshore wind project.[xxix]  Under the Rules, a lessee is required to submit a Site Assessment Plan (SAP) before conducting a site assessment and then was required to submit a Construction and Operations Plan (COP) before beginning construction.[xxx]  Both the SAP and the COP must undergo a NEPA review.[xxxi]  After the SAP is approved, a five-year site assessment term begins, during which the lessee assesses the potential impacts of the project’s activities and prepares the COP.[xxxii]

However to reduce the review time, MMS decided that the SAP and COP could be submitted simultaneously.[xxxiii]  If the SAP introduces additional information not included in the initial EIS, a second environmental review is required.[xxxiv]  Another environmental review is required when the COP is submitted.[xxxv] MMS, initiated an interim policy to make the environmental review more efficient, under which resource data collection facilities “could be considered and authorized for installation and operation on the OCS before promulgation of final rules.”[xxxvi]

The Rules for permitting offshore wind projects were unsurprisingly similar to the regulatory process for oil and gas leasing since MMS was the lead agency for both.[xxxvii]  The Rules allowed for leasing of commercial development on the OCS, and allowed for the issance of right-of-ways and right-of-use easements necessary to support renewable energy projects.[xxxviii]  Commercial leases enable the lessee to deliver power by including the right to a project easement, allowing the lessee to install transmission cables.[xxxix]  The Rules also require environmental reviews to be consistent with the CZMA.[xl]  The CZMA was enacted, “to preserve, protect, develop, and where possible, to restore or enhance, the resources of the Nation’s coastal zone.”[xli]  Congress gave states the authority to establish management programs, in accordance with CZMA, to oversee the development of offshore projects in and adjacent to the state’s territorial lands.[xlii]  However a project may be exempt from the state’s program if it serves national interests and is consistent with the CZMA.[xliii]

In an effort to streamline the environmental review process, that has substantially prolonged, or completely stopped, some energy development programs, on June 18, 2010, MMS was reorganized and renamed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).[xliv]  BOEMRE met with the same challenges of the environmental review process as MMS, and its response yielded similar deficiencies.  As a result, the federal agency was reorganized again.  On October 1, 2011, BOEMRE was replaced by the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE).[xlv]  BOEM is now responsible for the environmental review process and for managing responsible development of offshore resources other than oil and gas.[xlvi] BSEE is responsible for the oversight of offshore oil and gas operations.[xlvii]  BOEM consolidates all relevant information that developers of offshore wind projects must consider when applying for lease permits and complying with the steps necessary to begin construction.[xlviii]

III. Cape Wind

Cape Wind Associates, LLC (Cape) began its consistently-obstacle-ridden journey to develop a wind energy plant on Horseshoe Shoal in Nantucket Sound, Massachusetts, in November 2001.  Cape filed a permit application with the Corps to construct a scientific measurement device station (SMDS) to monitor and assess the potential impacts of the wind farm.[xlix]  The U.S. Court of Appeals for the First Circuit upheld the Corps’ regulatory authority to permit Cape’s construction of the SMDS, which would collect data for five years.[l]  The Corps issued a permit to Cape under section 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 401, for the construction of the SMDS after determining that the project posed no threat to marine and avian life and that it would aid navigation.[li]

In addition to the permit, the Corps issued an EA and a Finding of No Significant Impact (“FONSI”) pursuant to NEPA requirements.[lii]  The United States Court of Appeals for the First Circuit affirmed the district court’s decision that the Corps’ did not violate its authority in issuing the permit for the SMDS.[liii]  Once Cape tackled the hurdle of getting the first permit, the State of Massachusetts added more challenges, prolonging the project and risking Cape Wind’s financial stability.

After the Corps granted the permit, Massachusetts, represented by Ten Taxpayers Citizen Group, et al., challenged the issuance of the permit claiming the state rather than the federal government had jurisdiction over the project.[liv]  However, the United States Court of Appeals for the First Circuit affirmed the district court’s dismissal of the complaint on the basis that the project fell under federal jurisdiction and Massachusetts statutes were therefore inapplicable to the Cape’s project.[lv]  The court recognized the general rule that rights to offshore seabeds are reserved to the federal government as an incident of national sovereignty.[lvi]

On November 21, 2002 Cape submitted a separate application to the Corps for a permit to construct and operate an offshore wind energy plant.  Cape planned to install and operate of 170 offshore wind turbine generators (WTGs) to generate up to 420 megawatts (MW) of renewable energy.[lvii]  The Corps determined that an EIS was required for the project, the first proposal of its kind in the United States at the time. Subsequent to the EIS, construction of the project was intended to start in 2004.[lviii]  The EIS was to include an assessment of alternatives to the project, including: the no action alternative; alternative wind park locations, including offshore versus upland; submerged cable route alternatives; alternative landfall and overland cable route locations, and alternative connections to a transmission line.[lix]

Also included in the EIS were “analyses of impacts associated with construction, operation, maintenance and decommissioning of the WTGs on resources.”[lx]  The Corps recognized that the EIS should also include analyses of the projects with regards to the Endangered Species Act of 1973, the Magnuson-Stevens Fishery Conservation and Management Act, the National Historic Preservation Act of 1966, the Fish and Wildlife Coordination Act of 1958, CZMA, CWA, the Rivers and Harbors Act of 1899, the OCSLS, and applicable Executive Orders.[lxi]

However, when MMS became responsible for the environmental review process in 2005, it assumed authority over the Cape project.  Therefore Cape became subject to a new review under MMS that was practically governed by the same principles as the review undertaken by the Corps.  MMS assumed lead federal responsibility and initiated its own independent environmental review pursuant to NEPA.  Therefore that which was accomplished in the first four years of the permitting process became practically irrelevant and Cape was pushed back to where it started in 2001.  It was not until May 2006 that MMS announced its Notice of Intent (NOI) to prepare an EIS for the Cape project.[lxii]  The EIS was to include all that which was required under the Corps review well as analyses of avian species, marine mammals, shellfish resources, essential fish habitat, commercial and recreational fisheries, air and water quality, visual impact, noise assessment, alternative sites, marine archeological and cultural resources, air and sea navigation, local meteorological conditions, sediment transport patterns, local geological conditions, and economic impacts.[lxiii]

In addition to requiring the EIS, MMS invited participation by cooperative agencies and commenced a 45-day comment period, pursuant to NEPA, to allow “Federal, State, tribal, and local governments and other interested parties to aid the MMS in determining the significant issues, potential alternatives, and mitigating measures to be analyzed in the EIS and the possible need for additional information.”[lxiv]  MMS invited qualified government entities to inquire about cooperating agency status for the Cape Wind EIS.[lxv]  However those cooperating agencies’ input neither enlarges nor diminishes the final decision-making authority of any other agency involved in the NEPA process.[lxvi]  Unqualified agencies could still comment during the normal public input phases of the NEPA/EIS process.  MMS announced that alternatives to the proposal would be considered in the EIS.[lxvii]

MMS published the Cape Wind draft EIS in January 2008 and the final EIS and in 2009, MMS announced the release of the Final Environmental Impact Statement (FEIS) for the Cape project, noting that it had “assessed the physical, biological, and social/human impacts of the proposed project and 13 alternatives.”[lxviii] In 2010, MMS announced its Notice of Availability of an Environmental Assessment and Draft Finding of No New Significant Impact (FONNSI) for Public Review and Comment for the Cape project.[lxix]  On April 28, 2010, the Department of Interior announced the availability of the Record of Decision (ROD) for the Cape Wind Project.[lxx]  With the ROD, Cape’s future was the brightest it had since it had overcome many obstacles, and yet the project was challenged again in 2010. But again, the Supreme Court of Massachusetts upheld the project for satisfying its requirements and meeting applicable standards.[lxxi]  Since the project was at its final stages when MMS was reformed into BOEMRE and then subsequently BOEM, Cape did not have to undergo additional reviews but continues to face criticism, even after construction began.

Construction of the offshore wind plant finally commenced in 2011.[lxxii]  The project is still being challenged for failing to meet certain requirements under NEPA and other environmentally protective provisions.  From start to finish Cape has had to endure a decade of challenges in dealing with regulatory inconsistency, jurisdictional conflicts, and from proponents claiming to promote environmental protection.  Not many investors would be attracted to a project that needed at least ten years before completion, not to mention the additional time needed to make a return on the investment.  It is hard to reconcile the goals of those challenging a renewable energy project as being concerned with environmental protection with the fact that no fossil fuel project has faced such challenges to delay construction for a decade.  It would seem more logical that proponents claiming to promote environmental protection would be supportive of renewable energy production and would focus their efforts on delaying fossil fuel production, such as offshore oil rigs that have the potential for a blow out that would devastate the marine life and surrounding environments as witnessed by the BP oil spill.

IV. Progressive Policy Initiatives Need to Progress

With the reorganization and restructuring of the controlling agencies, the environmental review process need not be met with similar obstacles apparent throughout history.  The United States Department of Energy (DOE) recognizes a potential for wind energy to contribute 20% of United States electricity by 2030, if significant obstacles are overcome.[lxxiii] These obstacles include: 1) improving turbine technology, 2) changing transmission systems to deliver the energy to the grid system, 3) expanding markets to purchase and use it, 4) policy development and 4) environmental regulation. [lxxiv]  Concentrated, domestic wind energy has enormous potential to supply electricity, but its maximum effectiveness has only occurred in localized areas such as Nantucket Sound because of wind patterns and jurisdictional battles.  Recent advanced technological enhancements have improved performance and the industry is gaining some momentum but the governmental agencies need to make substantial changes.

Recognizing the difficult nature of the environmental review process, BOEMRE introduced the “Smart from the Start” wind energy initiative, to identify suitable areas for wind energy projects on the OCS.[lxxv]  The two primary purposes of the initiative are to 1) provide decision makers with the most current data, by calling for public and expert inputs, and 2) to streamline the issuance of leases and approval of site assessment activities, in accordance with the DOI and CEQ regulations implementing the provisions of NEPA.[lxxvi]  Another purpose of the initiative is to identify areas that are most suitable for offshore wind energy projects.[lxxvii] The initiative “focuses on the identification and refinement of areas on the OCS that are most suitable for renewable energy development,” and “utilizes coordinated environmental studies, large-scale planning processes, and expedited review processes within these areas to achieve an efficient and responsible renewable energy leasing process.”[lxxviii]

If the initiative is successful, it should reduce the time, expense, and energy required to complete the environmental review requirements while still promoting environmentally safe activities.  Initiatives such as this should be pursued in order to provide developers with efficiency and success, while providing the nation with a more diverse energy scheme and loosening the nation’s dependency on fossil fuel resources.  This goal is countered by the Energy Policy Act of 2005.  The Act is dedicated to supporting oil and gas production by providing incentives to developers, but the Act neglects to give wind energy equal support.[lxxix]  There are other provisions, though not as supportive as those for the fossil fuels, dedicated to geothermal and hydroelectric energy.[lxxx]  However there should be specific details under the act, or a similar act, supporting wind energy production, which is the largest contributor of electricity among the renewable energies.  Wind energy should be given the same initiatives, if not more, than fossil fuels.

The DOE established the Federal Energy Management Program (FEMP) to help federal agencies obtain funding for energy efficiency, renewable energy, water conservation, and greenhouse gas (GHG) management projects.[lxxxi]  The DOE recognized the risk of federal energy projects temporarily stopping or completely stopping because Congressional appropriations, alone, were insufficient to fund federal energy project needs’ to meet federal requirements.[lxxxii] Additional funding options include energy savings performance contracts (ESPCs), utility energy service contracts (UESCs), power purchase agreements (PPAs), and energy incentive programs.[lxxxiii]  However in constructing a scenario where federal contributions would be feasible for the future, the DOE neglected to compare the scenarios for renewable energy projects to fossil fuel energy plans and neglected to lay out an action plan which would benefit the renewable energy market.[lxxxiv]  The DOE, through the FEMP, should extend ESPCs, UESCs and PPAs to potential renewable energy projects such as Cape to foster the development and production of sites so that renewable energy markets can become competitive with fossil fuel markets and in turn attract investors and establishing a perpetual cycle leading to a diversified national energy structure.


Special Thanks to Eric Hull.

[i]Jared Wiesner, A Grassroots Vehicle for Sustainable Energy: The Conservation Reserve Program & Renewable Energy, 31 WM. & MARY ENVTL. L. & POL’Y REV. 571, 588(2006).

[ii]ENERGYEFFICIENCY ANDRENEWABLE ENERGY, U.S.DEP’T OF ENERGY, 20% WIND ENERGY BY 2030: EXECUTIVESUMMARY 1(May 2008), available athttp://www1.eere.energy.gov/wind/pdfs/42864.pdf.

[iii]W. MUSIAL & S.BUTTERFIELD, FUTURE FOR OFFSHORE WIND ENERGY IN THE UNITED STATES 7 (National Renewable Energy Laboratory 2006), available at http://www.nrel.gov/docs/fy04osti/36313.pdf.

[iv]Bent Ole Gram Mortensen, International Experiences of Wind Energy, 2 ENVTL. & ENERGY L. & POL’Y J. 179, 207 (2008).

[v]Supra note 6.

[vi]Potential risks for wind projects include: visual obstructions, noise obstructions, frequency and flight obstructions, placement in marine and avian habitats, cleanup if a wind turbine falls over or into waters, etc.

[vii]Proclamation No. 2667, 3 C.F.R. 40 (1945).

[viii]43 U.S. §§ 1301-1315 (2011).

[ix]Id. § 1314(a).

[x]Id. § 1331-1356.

[xi]Ten Taxpayer Citizens Group v. Cape Wind Associates, LLC, 373 F.3d 183 (1st Cir. 2004) (citing 420 U.S. 515, 522); see also 43 U.S.C. §§ 1301, 1331(a).

[xii]43 U.S.C.§ 1337(a).

[xiii]ADAM VANN, CONG. RESEARCH SERV., RL 32658, WIND ENERGY: OFFSHORE PERMITTING 5 (2008), available athttp://www.cnie.org/NLE/crs/abstract.cfm?NLEid=254; 33 U.S.C. §§ 407-687.

[xiv]43 U.S.C. § l337(p)(l) (2011) (“The Secretary … may grant a lease, easement, or right-of-way on the outer Continental Shelf.. . if those activities .. (C) produce or support production, transportation, or transmission of energy from sources other than oil and gas.”).

[xv]Renewable Energy and Alternate Uses of Existing Facilities on the Outer Continental Shelf, 74 FR 19638-01.

[xvi]43 U.S.C. § l337(p)(9). (“Nothing in this subsection displaces, supersedes, limits, or modifies the jurisdiction, responsibility, or authority of any Federal or State agency under any other Federal law”).

[xvii]See Memorandum of Understanding Between the U.S. Department of the Interior and the Fed. Energy Regulatory Comm’n (Apr. 9, 2009), available athttp://boemre.gov/regcompliance/MOU/PDFs/DOI_FERC_MOU.pdf.

[xviii]Id.

[xix]42 U.S.C.A. § 4344 (2011).

[xx]Id. at § 4332.

[xxi]Outer Continental Shelf, Headquarters, Cape Wind Offshore Wind Development 2007, 71 FR 30693-01.

[xxii]Id.

[xxiii]Outer Continental Shelf, Headquarters, Cape Wind Offshore Wind Development 2007, 71 FR 30693-01.

[xxiv]An EIS is “a detailed written statement as required by section 102(2)(C) of [NEPA].” 40 C.F.R. § 1508.11(2010).

[xxv]An EA is “a concise public document for which a Federal agency is responsible that serves to: (1) [b]riefly provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact[;] (2) [a]id an agency’s compliance with the Act when no environmental impact statement is necessary[;] [and] (3) [f]acilitate preparation of a statement when one is necessary.” Id. § 1508.9(a).

[xxvi]42 U.S.C. § 4332(2)(C).

[xxvii]Id.

[xxviii]Supra note 38.

[xxix]Id. at 19,685-6 (“We chose this approach for a commercial lease because there are two distinct phases for commercial development for renewable energy projects: (1) A site assessment phase, where a lessee may install a meteorological or marine data collection facility to assess renewable energy resources; and (2) a generation of power phase, which includes construction, operations, and decommissioning.”)

[xxx]See 30 C.F.R.285.611 (2010) (describing NEPA information required to be submitted in conjunction with SAP); 30 C.F.R. §285.646 (describing NEPA information required to be submitted in conjunction with COP).

[xxxi]Preamble to the Rules, supra note 21, at 19670.

[xxxii]Peter J. Schaumberg & Angela F. Colamaria, Siting Reneable Enargy Projects on the Outer Continental Shelf: Spin, Baby, Spin!, 14 Roger Williams U. L. Rev. 624, 634-35 (2009).

[xxxiii]Supra note 54.

[xxxiv]Id, at 19690.

[xxxv]Id.

[xxxvi]Request for Information and Nominations of Areas for Leases Authorizing Alternative Energy Resource Assessment and Technology Testing Activities Pursuant to Subsection 8(p) of the Outer Continental Shelf Lands Act, as Amended. 72 F.R. 62674 (2007).

[xxxvii]Stephanie Showalter & Terra Bowling, Offshore Renewable Energy Regulatory Primer (Nat’l Sea Grant L. Center), July 2009, at I, available athttp://nsglc.olemiss.edu/offshore.pdf.

[xxxviii]Preamble to the Rules, supra note 21, at 19647.

[xxxix]Id.

[xl]Id. at 19691tbl.2.

[xli]16 U.S.C. § 1452(1) (2011).

[xlii]Id. § 1451(i)-(m).

[xliii]Id. § 1456(d).

[xliv]U.S. Dep’t of the Interior, Change of the Name of the Minerals Management Service to the Bureau of Ocean Energy Management, Regulation, and Enforcement, Order No. 3302 (June 18, 2010) available athttp://www.doi.gov/deepwaterhorizon/loader.cfm?csModule=security/getfile&PageID=35872.

[xlv]30 C.F.R. § 585.100 (“The Secretary of the Interior delegated to the Bureau of Ocean Energy Management (BOEM) the authority to regulate activities under section 388(a) of the EPAct. These regulations specifically apply to activities that: (a) Produce or support production, transportation, or transmission of energy from sources other than oil and gas; or (b) Use, for energy-related purposes or for other authorized marine-related purposes, facilities currently or previously used for activities authorized under the OCS Lands Act.”).

[xlvi]The Reorganization of the Former MMS. The Bureau of Ocean Energy Management. 2011. Available at http://boem.gov/About-BOEM/Reorganization/Reorganization.aspx.

[xlvii]Id.

[xlviii]Id. § 585.102.

[xlix]Alliance To Protect Nantucket Sound, Inc. v. U.S. Dept. of Army, 288 F. Supp. 2d 64, 78 (D. Mass. 2003) aff’d, 398 F.3d 105 (1st Cir. 2005).

[l]Id. at 66-78.

[li]Ten Taxpayers Citizen Group v. Cape Wind Associates, LLC, 278 F.Supp.2d 98, 99 (D. Mass. 2003).

[lii]Supra note 72.

[liii]Alliance To Protect Nantucket Sound, Inc. v. U.S. Dept. of Army, 398 F.3d 105, 115 (1st Cir. 2005).

[liv]Id.

[lv]Ten Taxpayer Citizens Group v. Cape Wind Associates, LLC, 373 F.3d 183, 185 (1st Cir. 2004).

[lvi]Id. at 188-89.

[lvii]Intent To Prepare a Draft Environmental Impact Statement (DEIS) for Proposed Cape Wind Energy Project, Nantucket Sound and Yarmouth, MA Application for Corps Section 10/404 Individual Permit, 67 FR 4414-01; compare with Outer Continental Shelf, Headquarters, Cape Wind Offshore Wind Development 2007, 71 FR 30693-01 (stating the proposal was for 130 WTGs generating approximately 454 MW).

[lviii]Id.

[lix]Id.

[lx]Id. (Resources included: recreational and commercial boating and fishing activities, endangered marine mammals and reptiles, birds, aviation, benthic habitat, aesthetics, cultural resources, radio and television frequencies, ocean current.)

[lxi]Intent To Prepare a Draft Environmental Impact Statement (DEIS) for Proposed Cape Wind Energy Project, Nantucket Sound and Yarmouth, MA Application for Corps Section 10/404 Individual Permit, 67 FR 4414-01 (“To the fullest extent possible, the EIS will be integrated with analyses and consultation required by the Endangered Species Act of 1973, as amended (Pub. L. 93-205; 16 U.S.C. 1531, et seq.); the Magnuson-Stevens Fishery Conservation and Management Act, as amended (Pub. L. 94-265; 16 U.S.C. 1801, et seq.), the National Historic Preservation Act of 1966, as amended (Pub. L. 89-655; 16 U.S.C. 470, et seq.); the Fish and Wildlife Coordination Act of 1958, as amended (Pub. L. 85-624; 16 U.S.C. 661, et seq.); the Coastal Zone Management Act of 1972, as amended (Pub. L. 92-583; 16 U.S.C. 1451, et seq.); and the Clean Water Act of 1977, as amended (Pub. L. 92-500; 33 U.S.C. 1251, et seq.), Section 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. 403 et seq.); the Outer Continental Shelf Lands Act (Pub. L. 95-372; 43 U.S.C. 1333(e))”).

[lxii]Continental Shelf, Headquarters, Cape Wind Offshore Wind Development 2007, 71 FR 30693-01.

[lxiii]Cape Wind: America’s First Offshore Wind Farm on Nantucket Sound. 2011.Available at http://www.capewind.org/article72.htm.

[lxiv] Continental Shelf, Headquarters, Cape Wind Offshore Wind Development 2007, 71 FR 30694. (In 2006, the Cooperating Agencies on the Cape Wind project EIS included: United States Fish and Wildlife Service, Cape Cod Commission, United States Department of Energy, United States Coast Guard, United States Department of the Interior/Office of Environmental Policy and Compliance, Wampanoag Tribe of Gay Head, Federal Aviation Administration, Massachusetts Coastal Zone Management, Massachusetts Environmental Policy Act Office, National Oceans and Atmospheric Association/National Marine Fisheries Service, United States Environmental Protection Agency, United States Army Corps of Engineers.)

[lxv]Id. Under guidelines from CEQ, qualified agencies and governments are those with “jurisdiction by law or special expertise.”

[lxvi]Id.

[lxvii]Id.

[lxviii]Environmental Assessment Prepared for Proposed Cape Wind Energy Project in Nantucket Sound, MA, 75 FR 10500-01.

[lxix]Id.

[lxx]Id.

[lxxi]See ALLIANCE TO PROTECT NANTUCKET SOUND, INC., et al., Town of Barnstable, and Cape Cod Commission, Petitioners, v. ENERGY FACILITIES SITING BOARD, Department of Environmental Protection, Cape Wind Associates, LLC, et al., Respondents; Town of Barnstable and Cape Cod Commission, Plaintiffs-Appellants, v. Massachusetts Energy Facilities Siting Board, and Cape Wind Associates, LLC, Defendants-Appellees., 2010 WL 3612847 (Mass.).

[lxxii]America’s First Offshore Wind Farm on Nantucket Sound: The true cost of electricity. December, 2011. Available at http://www.capewind.org/article32.htm.

[lxxiii]Id.

[lxxiv]Id.

[lxxv]Commercial Wind Lease Issuance and Site Characterization Activities on the Atlantic Outer Continental Shelf (OCS) Offshore Rhode Island and Massachusetts, 76 FR 51391-01.

[lxxvi]Id.

[lxxvii]Id.

[lxxviii]Id.

[lxxix]42 U.S.C. §§ 15902-15912 (2011).

[lxxx]42 U.S.C. §§ 15872, 15881 (2011).

[lxxxi]ENERGY EFFICIENCY AND RENEWABLE ENERGY, U.S. DEP’T OF ENERGY, FEDERAL ENERGY MANAGEMENT PROGRAM (July 2011), available athttp://www.nrel.gov/docs/fy11osti/52085.pdf. DOE SCIENTIFIC AND TECHNICAL INFORMATION, Alternative Financing for Energy Efficiency and Renewable Energy: Quick Guide (May 1, 2009). Available athttp://www.nrel.gov/docs/fy11osti/52085.pdf.

[lxxxii]Id.

[lxxxiii]Id.

[lxxxiv]Id.

© 2012 Kiboni Yarling

One Individual and 20 Organizations Receive Inaugural Climate Leadership Awards

An article by U.S. Environmental Protection Agency recently was published in The National Law Review regarding Climate Leadership Awards:

WASHINGTON:  the U.S. Environmental Protection Agency (EPA), the Association of Climate Change Officers (ACCO),the Center for Climate and Energy Solutions (C2ES) (formerly the Pew Center on Global Climate Change), and The Climate Registry (TCR) named the winners of the inaugural Climate Leadership Awards. The awards recognize corporate, organizational, and individual leadership in addressing climate change and reducing carbon pollution. From setting and exceeding aggressive emissions reduction goals to reducing the emissions associated with shipping goods, these organizations are improving efficiency, identifying energy and cost saving opportunities, and reducing pollution.

“The inaugural winners of the Climate Leadership Award have demonstrated aggressive greenhouse gas (GHG) management actions and climate-related strategies,” said Daniel Kreeger, ACCO’s Executive Director. “The exemplary climate response exhibited by these organizations is a testament to the visionary leadership and innovation within their executive suite and workforce. The thought and action leadership of these award winners is a model for all companies, government entities, academic institutions and individuals for which to strive to achieve.”

“Corporate leadership is essential to meeting our climate and energy challenges,” said C2ES President Eileen Claussen. “We jo

in EPA in applauding the first winners of the Climate Leadership Award. These companies demonstrate every day that it’s possible to shrink your carbon footprint without compromising your bottom line. Their accomplishments will inspire other companies to act, and will contribute to strong, sensible policies benefiting both our economy and our climate.”

“The Climate Registry congratulates the inaugural Climate Leadership Award winners on their impressive achievements,” said David Rosenheim, the executive director of TCR. “As we transition in the next few years to a low carbon economy, these organizations will undoubtedly reap the benefits of taking aggressive action to reduce their carbon risk.”

Organizational Leadership: Recognizes organizations for exemplary leadership both in their internal response to climate change and through engagement of their peers, competitors, partners, and value chain:

  • IBM
  • San Diego Gas & Electric

Individual Leadership: Recognizes an individual for outstanding efforts in leading an organization’s response to climate change:

  • Gene Rodrigues, Director of Customer Energy Efficiency and Solar at Southern California Edison

Supply Chain Leadership: Recognizes organizations for actively addressing emissions outside their operations:

  • Port of Los Angeles
  • SAP
  • UPS

Excellence in GHG Management (Goal Achievement): Recognizes organizations for aggressively managing and reducing their GHG emissions:

  • Campbell Soup Company
  • Casella Waste Systems
  • Conservation Services Group
  • Cummins Inc.
  • Fairchild Semiconductor
  • Genzyme
  • Hasbro
  • Intel Corporation
  • International Paper
  • SC Johnson

Excellence in GHG Management (Goal Setting): Recognizes organizations for establishing aggressive GHG reduction goals:

  • Avaya
  • Bentley Prince Street
  • Campbell Soup Company
  • Ford Motor Company
  • Gap Inc.
  • Ingersoll Rand

The awards will be presented tonight at the inaugural Climate Leadership Conference in Fort Lauderdale, Fla. The conference will bring together leaders from business, government and academic institutions who are interested in exchanging best practices on how to address climate change while simultaneously running more competitive and sustainable operations.

More information about the Climate Leadership Awards and award winners:http://epa.gov/climateleadership/awards/2012winners.html

© Copyright 2012 United States Environmental Protection Agency

Energy & Clean Tech Connections – Recent Washington D.C. Updates

Recently in The National Law Review an article regarding Energy & Clean Tech Federal Updates by Thomas R. Burton, III of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.:

On Capitol Hill, the administration promoted energy-related matters in the third week of February while Congress was in recess for the Presidents’ Day holiday. While speaking to college students in Miami February 23, President Obama criticized the pro-drilling approach of Republicans and the reluctance of the oil and gas industry to relinquish its rights to $4 billion a year in tax breaks, which the President has called for zeroing out in his fiscal year 2013 budget request.

Separately, the administration acknowledged that gas prices are rising faster and earlier this year than ever before and is using this issue to remind Americans that developing clean, alternative energy sources is critical. Also, after two years of speculation, Treasury Secretary Timothy Geithner last week unveiled the administration’s proposal for tax reform. Among other provisions, including reductions in the corporate and manufacturing tax rates, the proposal would make the tax credit for the production of renewable electricity permanent.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Energy and Environment Update, February 19, 2012

Recently published in The National Law Review was an article by David J. Leiter and Sarah Litke of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding a Compilation of Energy and Evironment Updates:

Energy and Climate Debate

President Obama on February 13 sent Congress a $3.8 trillion budget request for fiscal year 2013 that, after a week of hearings and analysis, is likely to continue fueling debates over spending and taxes through the end of the year. One of the most interesting highlights of the budget includes the president’s varied ways of encouraging clean energy and infrastructure spending this year as the country works to boost the economy and create jobs.

In line with his State of the Union call for an all of the above energy strategy, the president’s budget request calls for an elimination of $4 billion in fossil fuel subsidies and a shift in funding from decreasing military actions in Iraq and Afghanistan to infrastructure projects. Though numerous entire department budgets remain relatively static, clean energy, climate, and environment issues are important components and priorities of the request, which encourages developing new clean energy, advancing research and development funding for clean energy, and promoting advanced manufacturing and jobs.

On the tax front, the administration proposes extending the production tax credit for wind facilities and the investment tax credit for wind facility properties to properties placed in service in 2013; the budget would also provide an additional $5 billion for the Advanced Energy Manufacturing Tax Credit (48C). The request would expand the tax credit for plug-in electric vehicles and remove the cap on the number of vehicles per manufacturer that can receive the credit, while also proposing a new tax credit for medium and heavy duty vehicles.

The emphasis on clean energy funding in the Department of Energy’s overall $27.2 billion funding request is high. Last Monday, the president proposed spending $2.3 billion, a 29 percent increase, on renewable energy and energy efficiency programs in the agency’s FY2013 budget. The request also includes increased support for advanced manufacturing (up 150 percent from $115.6 million to $290 million) and the department’s Advanced Research Projects Agency – Energy initiative, and at the same time, the agency is not seeking further loan authority or credit subsidies for its loan guarantee program.

President Obama proposed trimming the Environmental Protection Agency’s fiscal 2013 budget by $105 million, marking the third time the administration has sought to cut the agency’s funding to compensate for rising deficit. The request would give the agency $8.3 billion, a 1.2 decrease from the $8.4 billion Congress provided in its omnibus spending package last year. The largest cuts would come from the Drinking Water and Clean Water State Revolving Funds.

The FY2013 budget proposal for the Agriculture Department provides $6.1 billion in direct loans, for energy initiatives, through the Rural Utilities Service program. Up to $2 billion would be used to help reduce carbon dioxide emissions from fossil fuel power plants, with the balance being used to support rural renewable energy generation, transmission, and distribution.

Though approval of any budget may need to wait until the lame duck session at the end of the year Senate Majority Leader Harry Reid (D-NV) has told Senate appropriators to be ready with fiscal year 2013 bills soon, as he may have to fill floor time this summer with funding or Law of the Sea Treaty debates.

In addition to the budget, the other big piece of congressional action last week occurred February 17 when both houses voted to pass legislation extending a 2 percentage point cut in the employee side of the payroll tax cut through the end of 2012 and repealing billions of dollars in recent changes to corporate estimated tax payments. The House voted 293-132 to pass the bill (H.R. 3630), and the Senate followed soon thereafter to approve the measure on a 60-36 vote. The bill’s passage is particularly significant because lawmakers on both sides of the aisle were forced to accept that it would be politically impossible to find $93.2 billion in acceptable offsets to pay for the payroll tax portion of the bill before the March 1 expiration. The bill also extends federal unemployment insurance benefits and the doc fix, but does not include extensions of any other popular expired or expiring tax breaks, including the 1603 grants in lieu of tax credits program or the production tax credit.

In other news, Speaker of the House John Boehner announced last week that he would delay a vote on the $260 billion energy and transportation bill until after the Presidents’ Day recess. Part of the delay is in the need to find new offsets, as the payroll tax cut deal uses the reduction in pension benefits that was in the highway bill. Speaker Boehner also acknowledged that some members of his caucus have concerns with the plan, and with few Democrats likely to support the legislation, Republicans might not have had the votes. On the other hand, the House passed a plan, 237-187, February 16 to approve the Keystone XL pipeline and expand drilling offshore and in ANWR. Acting on one portion of the much larger transportation and infrastructure strategy, the House also approved amendments directing 80 percent of Clean Water Act citations over the BP oil spill to Gulf restoration efforts, approving a geothermal exploration project, and quickening environmental reviews for renewable energy projects on public lands. Despite roadblocks, including the introduction of many amendments, Senate Democrats vowed last week to finish work on their highway bill (the Moving Ahead for Progress in the 21st Century Act, S. 1813) after they return from the Presidents’ Day recess.

Congress

Solyndra Subpoenas

After spending the last week threatening to subpoena senior White House officials as part of an investigation of loan guarantees for Solyndra, House Republicans cancelled a February 17 Energy and Commerce Subcommittee on Oversight and Investigations vote to authorize the subpoenas. The group reached a deal to have some of the officials answer questions instead.

CES Forthcoming

Senate Energy and Natural Resources Chairman Jeff Bingaman (D-NM) will introduce legislation setting a national clean energy standard during the week of February 27. The senator is also likely to introduce at some point this session an industrial energy efficiency bill similar to legislation (S. 1639) that he has previously introduced.

Senators Send Energy Tax Letter

Senators Olympia Snowe (R-ME), Jeff Bingaman (D-NM), Dianne Feinstein (D-CA), John Kerry (D-MA), Maria Cantwell (D-WA), and Tom Carper (D-DE) sent a letter to Treasury Secretary Tim Geithner and Acting Director of the Office of Management and Budget Jeffrey Zients February 10 encouraging them to advance tax policies that improve energy efficiency and support clean energy incentives. Specifically, the senators asked the administration to include a performance based residential energy efficiency tax credit, an extension of the new energy efficient homes tax credit, and the simplification of the energy efficient commercial building deduction in the president’s budget request for fiscal year 2013. The group also asked that the administration work with them to develop a set of policies that offers long-term support to the clean energy and energy efficiency sectors, are fiscally responsible, and maintain clean energy jobs in the US.

Inquiry Into Solyndra Aspects of Prologis Conditional Loan Guarantee

On February 17, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Rep. Cliff Stearns (R-FL), head of the oversight subcommittee, are launching an inquiry into the conditional approval of Prologis Inc.’s $1.4 billion loan guarantee for its Project Amp which involved installing Solyndra solar panels, despite concerns of Solyndra’s viability.DOE then issued a statement defending the Prologis loan guarantee.

Legislation Introduced

Senator David Vitter (R-LA) introduced legislation (S. 2100) February 13 to suspend sales of petroleum products from the Strategic Petroleum Reserve until certain conditions are met.

Congressman Charlie Bass (R-NH) introduced the Smart Energy Act (H.R. 4017) February 15 to spur innovations in energy efficiency technology by targeting the federal government’s energy usage and by providing more opportunities for private industry to use energy efficient technologies and systems.

The same day, Representative Ed Markey introduced three pieces of legislation (H.R. 4024, H.R. 4025, and H.R. 4026) to suspend approval of liquefied natural gas export terminals; allow the Secretary of Interior to accept bids on new oil and gas leases on Federal lands only from bidders certifying that all natural gas produced pursuant from such leases be offered for sale in the United States; and to reauthorize the Low-Income Home Energy Assistance Program for fiscal years 2013 through 2016.

Administration

Chinese VP Visit

President Obama and Vice President Joe Biden met with Chinese Vice President Xi Jinping February 14 to discuss a wide range of issues the two countries share. Speaking at a lunch at the State Department, the vice president praised cooperation taking place between the two countries, but also added that it can only be “mutually beneficial if the game is fair,” listing areas of tension in the relationship including intellectual property rights, trade, Chinese currency manipulation, technology transfer, and an uneven competitive playing field.

Department of Agriculture

Ethanol Production

Agriculture Secretary Tom Vilsack told the Senate Agriculture, Nutrition, and Forestry Committee February 15 that domestic production of corn ethanol is fast approaching the 15 billion gallon annual gap set by the 2007 renewable fuel standard, but that achieving an even larger quota for non-corn-based advanced biofuels will require a concerted federal effort. He said that without significant progress on the advanced biofuels, it will be impossible to reach the 36 billion gallon total biofuel requirement by 2022. Secretary Vilsack also reiterated that the United States has the potential to produce more than a billion tons of biomass each year to be used for fuel, electricity generation, and other energy applications by mid-century without harming farm and forestry products, and a billion tons of biomass contains energy equal to 30 percent of current annual domestic petroleum consumption. The USDA is hoping to hasten advances in non-ethanol biofuels through programs such as the Biomass Research and Development Initiative, which funds studies on harvesting, transporting, and storing raw feedstock for later conversion to biofuels.

Crop Insurance Cuts Defended

Agriculture Secretary Tom Vilsack appeared before the Senate Agriculture Committee February 15 for the first of several farm bill hearings this year. During the hearing, he defended proposed cuts to crop insurance, saying they were necessary to preserve nutrition funding. The committee will hold its next farm bill hearing February 28 to focus on conservation programs.

Ethanol Group Asks for Tax Provisions in Farm Bill

In a February 14 letter to Senators Debbie Stabenow (D-MI) and Pat Roberts (R-KS), chairwoman and ranking member of the Senate Committee on Agriculture, the Advanced Ethanol Council asked that the farm bill for 2012 include an extension of both the Cellulosic Biofuels Producer Tax Credit and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property. The letter was sent as the committee continues work on a farm bill and a hearing specifically on farm bill related energy issues.

Department of Commerce

Satellites Top Priority

National Oceanic and Atmospheric Administrator Jane Lubchenco said February 16 that satellites to monitor weather and climate are the highest administration funding priority for fiscal year 2013. About $1.8 billion of the agency’s $5 billion budget would be used for polar orbiting and geostationary weather satellite systems as well as satellite systems for measuring sea level and potentially damaging storms. A portion of the agency’s more than $500 million research and development budget would fund Arctic research on climate change projections as well as marine sensor technologies to monitor and address algal blooms and ocean acidification.

Department of Defense

Army Corps to Streamline Renewable Permitting Structure

On February 21, in a scheduled Federal Register notice, the U.S. Army Corps of Engineers will issue two new nationwide permits, NWP 51 and NWP 52, authorizing land- and water-based renewable energy projects while also reissuing 48 existing permits. The permits will reduce the number of renewable energy generation projects that need Section 404 individual permits, with NWP 51 covering all components of land-based generation and NWP 52 covering water-based hydrokinetic and wind projects.

Department of Energy

$6.5 Million for Tribal Energy

On February 16, Energy Secretary Steven Chu awarded $6.5 million to 19 tribal clean energy projects as part of the administration’s commitment to strengthening partnerships with Tribal Nations and supporting tribal energy development. The competitively selected projects will allow tribes to advance clean energy within their communities by assessing local energy resources, developing renewable energy projects, and deploying clean energy technologies while saving money and creating new jobs.

Water Heater Plant Opens

The Department of Energy applauded the opening of General Electric Appliance’s new revitalized manufacturing facility in Louisville, KY, February 15, that will produce its highly efficient new water heaters. The company moved the operation from China, where it had been producing a former version of the appliance, to the newly opened plant – the first to open in the Appliance Park in over 50 years. The plant revitalization was partially funded through a $24.8 million manufacturing tax credit.

Efficient Lighting Standards

The Department of Energy’s Commercial Building Energy Alliances announced February 15 new voluntary energy-saving specifications for lighting troffers – rectangular overhead fixtures used in commercial buildings – and parking lot and structure lighting. The specification provides minimum performance levels for LED and fluorescent troffers used in commercial buildings, delivering energy savings of 15 to 45 percent. It also sets an optional section on lighting controls, which can increase savings up to 75 percent.

$1.3 Million for Efficiency Training

The Energy Department and the Department of Commerce’s National Institute of Standards and Technology Manufacturing Partnership Program announced February 16 up to $1.3 million for training programs to provide commercial building professionals with critical skills needed to optimize building efficiency, reduce waste, and save money. The programs will help to reach the Better Buildings Initiative goal of improving energy efficiency nationwide in commercial and industrial buildings by 20% by 2020. Applications are due March 30.

Efficiency Data Centers Webcast

The Department of Energy’s Federal Energy Management Program will present a live webcast March 1 titled Achieving Energy Efficient Data Centers with New ASHRAE Thermal Guidelines. The session will benefit professionals interested in operating data centers at wider environmental ranges and greater efficiencies to reduce energy, capital, and maintenance costs.

Department of Interior

Budget Request Defended

During a February 15 hearing before the House Natural Resources Committee, Interior Secretary Ken Salazar defended the agency’s energy regulations and efforts to balance development of energy and water resources. The agency’s strategy would prepare for new rules on oil and gas drilling, less oil shale leasing, and ecosystem conservation plans.

Department of State

Short Lived Pollutants Coalition

Secretary of State Hillary Clinton announced February 16 that she would joint with Environmental Protection Administrator Lisa Jackson and ministers from Bangladesh, Canada, Mexico, Sweden, and Ghana to announce a coalition dedicated to reducing short-lived climate pollutants. These pollutants include methane, hydrofluorocarbons, and black carbon. Studies have shown that inexpensive controls on methane, HFCs and black carbon could cut half a degree Celsius from the projected global temperature increase by 2030 and avoid millions of deaths annually during the same time frame. The head of the United Nations Environmental Programme will serve as the secretariat for the coalition – and other nations will have the opportunity to join at the next meeting of UNEP on April 23 in Stockholm. The Climate and Clean Air Coalition to Reduce Short Lived Climate Pollutants will have a first year budget of $5 million, and the U.S. has committed to contributing $12 million over the first two years of the effort. The coalition will seek to raise public awareness of short-lived climate pollutants and drive increased public and private mitigation efforts.

Environmental Protection Agency

E15 Progresses

Bringing it one step closer to legal domestic distribution, he Environmental Protection Agency announced February 17 that it had found that E15 caused no significant health effects. The agency approved the fuel for use in late model vehicles last year but has not yet completed final registration of the fuel as required under the Clean Air Act. The agency’s finding comes less than two weeks after the House Science, Space, and Technology Committee voted to require an additional 18 month study by the National Academy of Sciences before it could register the fuel blend for use in vehicles.

Comments to Backup Generating Engines Proposal

An Environmental Protection Agency proposal aimed at resolving a 2010 legal challenge brought by EnerNOC Inc. and EnergyConnect Inc. received numerous comments last week concluding that the plan to allow stationary engines generating electricity to quadruple their annual operations would increase air pollution and skew competition in electricity markets. Under the proposed settlement agreement, the agency would revise air toxics standards to allow reciprocating internal combustion engines to increase their demand response operations to 60 hours a year, up from 15 hours.

Mercury Standards

The Environmental Protection Agency published final mercury and air toxics standards for power plants February 16, and industry groups and states are expected to challenge the “appropriate and necessary” finding. Lawsuits must be filed in the U.S. Court of Appeals for the District of Columbia Circuit by April 16. Three suits were filed against the agency of the first day, by the National Mining Association, the National Black Chamber of Commerce, and White Stallion Energy Center. Additionally, Senator James Inhofe (R-OK) filed a disapproval resolution nullifying the agency’s mercury rule on February 16.

Comments on Vehicle Emission Rules

In comments received to proposals from the Environmental Protection Agency and the National Highway Traffic Safety Administration to set greenhouse gas emissions and fuel economy standards for model year 2017 through 2025, car manufacturers have expressed support for the rule, but expressed concern that they will not be able to sell the more expensive vehicles, and also suggested that the two agencies consider additional, periodic technical evaluations of the standards in addition to the planned midterm review. The final rules are expected in August.

Ethanol Exemption Arguments Heard

The U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments February 13 in lawsuits challenging an Environmental Protection Agency rule exempting some ethanol facilities from a requirement to demonstrate that they reduce lifecycle greenhouse gases. A coalition of meat industry groups argued that removing the exemption would force some plants to close, reducing the demand for corn used to feed livestock. The Energy Independence and Security Act of 2007 only intended to exempt gas and biomass fired ethanol plants built between 2008 and 2009 from the 20 percent lifecycle standard for those two years, but the agency’s March 2010 rule implementing the renewable fuel standard made the exemption permanent.

Revised Recycling Rates

The Environmental Protection Agency revised last week its 2010 study of municipal solid waste generation, recycling, and disposal, using a more consistent methodology that brought the recycling rate of PET containers up from 21 to 29.2 percent and increased the national recycling rate to 34.1 percent. According to the revised analysis, the recycling rate of selected consumer electronics also fell from 26.6 percent to 19.6 percent.

Superfund Budget Request

The Environmental Protection Agency’s fiscal year 2013 budget request included a proposed $33 million cut, down to $532 million, for the remedial superfund program. This cut would halt new cleanups, create a backlog of 35 new construction projects, and hamper EPA’s ability to reach its goal of completing 93,400 superfund remedial site assessments by 2015. EPA requested $1.176 billion, $38 million less than last year, for the entire superfund program, including administration, research and technology development.

Activists File Suit Against EPA on Particulate Rule

On February 14, the American Lung Association and the National Parks Conservation Association filed a suit in the U.S. District Court for the District of Columbia seeking to compel the Environmental Protection Agency to conduct a five-year review of the national ambient air quality standards for fine particulate matter in line with existing deadlines. The rule setsthe standard for fine particles, 2.5 microns in diameter and smaller, and this challenge follows a similar suit recently filed by a coalition of 11 states. The suit asks for an order compelling EPA to complete the required review no later than Oct. 15, 2012.

Briefing Seeks to Vacate CSAPR

On February 14, the San Miguel Electric Cooperative Inc., along with Industrial Energy Consumers of America, the Southeastern Legal Foundation Inc., and Putnam County, GA, filed a brief asking the U.S. Court of Appeals for the District of Columbia Circuitto vacate the Environmental Protection Agency’s Cross-State Air Pollution Rule on the grounds that the agency has done an insufficient evaluation of how various power plant emissions regulations will affect compliance options. The briefing argues that EPA did not address the effects of an unreliable electric grid on communities’ health and welfare.

Navistar to Appeal Heavy Duty Diesel Engine Ruling

On February 17, Navistar Inc., filing in the U.S. Court of Appeals for the District of Columbia Circuit, appealed a federal court’s dismissal of Navistar’s suit seeking to compel the Environmental Protection Agency to recall certain heavy-duty diesel engines from model-year 2010.

Nuclear Regulatory Commission

Challenge to Plant Approval Dismissed

On February 17, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit dismissed a petition by the Blue Ridge Environmental Defense League asking that the court review internal documents related to the Nuclear Regulatory Commission’s decision to reinstate construction permits for the Tennessee Valley Authority’s Bellefonte Units 1 and 2 in Alabama. The court said it did not have the authority to review internal documents related to the NRC approving TVA’s request to reinstate the plants’ construction permits in March 2009. Based on current economic conditions and new EPA regulations, TVA decided to resume building the 1,260 MW Bellefonte Unit 1 at a cost of $4.9 billion and an estimated completion date sometime between 2018 and 2020.

States

NY Fracking Bills

The New York State Legislature is considering bills to limit fracking in natural gas drilling while the Department of Environmental Conservation prepares to issue final rules to control the practice. More than two dozen bills on fracking have been introduced in the current legislative session, including measures to ban or place a temporary moratorium on fracking, grant local governments authority to prohibit fracking, and permit fracking waste to be classified as hazardous.

CA Office Supports Cap and Trade

The California Legislative Analyst’s Office released a report February 9 supporting the design of the state’s economywide greenhouse gas emissions trading program while offering suggestions to improve the operation of the program. The report concluded that in designing the program, the California Air Resources Board made a reasonable effort to balance the policy tradeoffs inherent in programs involving emissions leakage, offset credits, enforcement, and market volatility and oversight, and recommended changes that would shift the liability for failed offset credits from users to producers of the offset projects and eliminate holding limits on allocations.

Cape Wind PPA

On February 15, as part of the proposed merger agreement between utility companies Northeast Utilities and NSTAR, the Massachusetts government is requiring the merged entity to enter into a 15-year contract to purchase 27.5% of the proposed Cape Wind’s electricity. The whole agreement must be approved by the Massachusetts and Connecticut governments, with decisions expected in April, and the merger’s Cape Wind provision is contingent on the project breaking ground by 2016. The 130-turbine project is expected to produce up to 468MW of energy once fully operational.

State Renewable Portfolio Standards Driving Industry

On February 15, panelists participating in a webinar hosted by the American Council on Renewable Energy concluded that state renewable portfolio standards were currently driving the renewable energy industry, but even that may be insufficient to ensure the industry’s survival in the next decades in the face of expiring tax provisions at the federal level and the loss of Treasury’s cash grant program.

International

EU ETS Aviation List Updated

The European Commission published an updated list February 11 of airlines and aviation companies subject to the European Union’s Emissions Trading System for greenhouse gases. The new list includes Norway and Iceland as program participants. On February 16, the Commission found that the revisions would be considered only if European Union member states indicate that they are likely to back the changes.

 UN Secretary General Urges Focus on Sustainability in Business

On February 14, U.N. Secretary-General Ban Ki-moon, in a speech at the opening of a three-day global summit of business leaders preparing for theRio+20conference in Brazil in June, asked that the world’s business community should do more to promote sustainability and to work with U.N. programs of that nature like the Global Compact corporate responsibility initiative. He also suggested that as many representatives of the business community as possible join the Corporate Sustainability Forum, to be held on the sidelines of Rio+20, exploring innovative public-private sustainability partnerships. 

EU Ship Fuel Standards

On February 16, the European Parliament’s environment committee voted 48–15 to follow the United State’s example and surpass International Maritime Organization standards by only permitting ships using fuel with very low levels of sulfur. Since January 2012, the IMO has restricted sulfur in marine fuel to 3.5%, with the limit scheduled to decrease to 0.1% for sensitive “sulfur emission control areas” (SECAs) in 2015 and to 0.5% for all areas in 2020. Under this proposal, the EU would pursue the same strategy as the US, which has surpassed the IMO regulations by designating most of the water within 200 miles of the national shoreline as SECA. The committee approved the draft legislation, proposed by the Commission in July 2011, and it will become final once the European Parliament, scheduled to vote on the measure in May, and the EU Council agree on the regulations.

Mexican Climate Initiatives

Mexican President Felipe Calderón’s administration, via a 2007 climate change strategy and 2009’s Special Climate Change Program, is working to meet its 2020 target for a 30% reduction of carbon dioxide emissions from baseline projections. Mexico has minimum goals in place to cut 50 million metric tons annually in greenhouse gas emissions starting in 2012. Mexico is also aiming to increase its renewable power capacity to 5,700MW by 2017.

Miscellaneous

CCS Making GHG Progress

The Center for Climate and Energy Solutions released a study February 14 finding that projects that capture and store carbon dioxide emitted by coal-fired power plants and industrial processes are slowly making a dent in greenhouse gas emissions. The report, A Greenhouse Gas Accounting Framework for Carbon Capture and Storage Projects, concluded that the 15 large projects now either in operation or under construction around the world have the capacity to store more than 35 million tons of CO2 annually, and the center touted the report as the first comprehensive framework for calculating the degree to which such projects can actually reduce global emissions.

KPMG Report on Environmental Costs of Business

On February 14, KPMG released Expect the Unexpected: Building Business Value in a Changing World arguing that external environmental costs in 11 surveyed sectors rose from $566 billion in 2002 to $846 billion in 2010and those costs are doubling every 14 years. Climate change, water and energy scarcity, and volatile fuel prices will all drive up the cost of doing business while providing new business opportunities, according to the report.

Pacific Northwest Transportation & Climate Change Report

On February 3, the Region X Northwest Transportation Consortium released the report Climate Change Impact Assessment for Surface Transportation in the Pacific Northwest and Alaska evaluating potential impacts on Alaska and the Pacific Northwest’s transportation infrastructure from climate change, and suggesting possible adaption responses. The Consortium consists of the Alaska Department of Transportation & Public Facilities, Idaho Transportation Department, Oregon DOT, and Washington state DOT, as well as the University of Alaska Transportation Center, National Institute for Advanced Transportation Technology, OTREC, and TransNow. The report analyzed 5 pilot projects sponsored by the Federal Highway Administration that explore infrastructure vulnerability and risk assessment as well as a case study designed to identify Alaska, Idaho, Oregon, and Washington’s critical road, rail, and airport infrastructure.

ACEEE Study of Ratepayer Funding

The American Council for an Energy-Efficient Economy released a report called A National Survey of State Policies and Practices for the Evaluation of Ratepayer-Funded Energy Efficiency Programs analyzing the oversight of utilities’ ratepayer-funded energy efficiency programs in 44 states and the District of Columbia. Utilities oversee 37% of the programs, utilities and the utility regulatory commission together monitor the programs in 36% of the states, and the government or a third-party are responsible in the remaining 27%. Independent contractors or consultants conduct evaluation studies in 79% of the states, with the remaining 21% using utility or government agency staff. Among the surveyed states, 45% have statutory requirements for the evaluation of programs, with the same number relying on orders from regulatory commissions, and 10% have no formal policy requirement. The report also shows a range of 6 to 15 cents per kilowatt-hour for adding new electricity supply, but only a 1.6 to 3.3 cent per kilowatt-hour cost range for efficiency improvements. Per capita, Vermont and Massachusetts spend the most on energy efficiency at $58 per capita, whereas California spends $40, Connecticut $39, and Minnesota $38. The report called for evaluation and reporting guidelines and greater transparency, while stopping short of recommending a national standard given concerns about implementation, among other things.

University of Texas Fracking Study

On February 16, the Energy Institute at the University of Texas at Austin released a study finding that hydraulic fracturing has no direct connection to groundwater contamination and that many reports claiming fracking-related contamination involve the mishandling of fracking wastewater or above-ground spills. The Energy Institute had assistance from the Environmental Defense Fund in developing the study’s scope of work and methodology, but the study did not examine Environmental Protection Agency data related to a natural gas field in Pavillion, WY whose fracking activities the agency says is responsible for groundwater contamination.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

CEQ Issues Draft Guidance to Promote Efficient NEPA Environmental Reviews

Recently posted in the National Law Review  an article by attorney Melissa C. Meirink of Greenberg Traurig, LLP regarding the draft guideance issued by the Council on Environmental Quality (CEQ):

GT Law

The Council on Environmental Quality (CEQ) recently issued draft guidance designed to promote more efficient environmental reviews of projects subject to the National Environmental Policy Act (NEPA). NEPA is a procedural statute that requires federal agencies to consider the environmental impacts of their proposed actions before deciding to adopt a proposal or to take action. NEPA is triggered when there is a major federal action significantly affecting the quality of the human environment. Although the current NEPA-implementing regulations provide methods for preparing efficient and timely environmental reviews, the CEQ’s proposed guidance will emphasize and clarify those methods. Specifically, the guidance outlines the following principles for agencies to follow when conducting a NEPA review:

  • NEPA encourages simple, straightforward, and concise reviews
  • The NEPA process should begin early and should be integrated into project planning
  • NEPA reviews should adopt, use, and incorporate existing documents and studies
  • Targeted scoping can assist to focus environmental reviews on appropriate issues
  • Agencies should develop expeditious timelines for environmental reviews
  • Agencies should respond to comments in proportion to the scope and scale of the environmental issues raised

In addition, the draft guidance clarifies that many provisions of the existing regulations referring to an environmental impact statement (EIS) can also apply to an environmental assessment (EA).  The draft guidance also provides measures to eliminate duplication of efforts and to promote better interagency interaction.

The draft guidance would promote a clear and more streamlined environmental review process under NEPA that would benefit agencies, project proponents, and others interested in the NEPA process.  The CEQ is accepting public comment on the draft guidance until January 27, 2012. 

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