Tag: environment

Water, Water, Everywhere: The Clean Water Act

If it isn’t already, water should be on your mind this year.  The excitement of Scituate storm surge and coastal flooding aside, the region – and the U.S. as a whole – is facing a slew of legal developments that may change how citizens, businesses, and governments operate under the federal Clean Water Act and similar state programs.  In particular, the scope of Clean Water Act jurisdiction is in play following a pair of Supreme Court decisions, as is the potential delegation of permitting authority to Massachusetts and New Hampshire, two of only four states in which the EPA administers permitting under the National Pollutant Discharge Elimination System (NPDES).

Clean Water Act Jurisdiction

Since well before Samuel Taylor Coleridge penned those famous lines in the Rime of the Ancient Mariner – “Water, water, every where, / Nor any drop to drink” – people have worried about access to clean water.  It makes sense, then, that the Clean Water Act is one of our oldest environmental laws, with its origins in the Rivers and Harbors Act of 1899.  The Rivers and Harbors Act – the nation’s very first environmental law – imposed the first “dredge and fill” requirements, made it illegal to dam rivers without federal approval, and prohibited the discharge of “any refuse  matter  of  any  kind  or  description” into “any  navigable  water  of  the  United  States, or  into  any  tributary  of  any  navigable  water.”

The Federal Water Pollution Control Act of 1948, with major amendments in 1961, 1966, 1970, 1972, 1977, and 1987, largely superseded the Rivers and Harbors Act and resulted in what we know today as the federal Clean Water Act (CWA).  And although today’s statute is very different from its 1899 precursor, one thing has remained constant: an intense and lasting fight over the scope and jurisdiction of federal regulation.  Federal CWA jurisdiction is premised on the Commerce Clause of the U.S. Constitution, and prohibits (without a permit) “dredge and fill” activities and the discharge of pollutants into “navigable waters,” which the CWA defines as “the waters of the United States.”  But what, exactly, are “waters of the United States”?

The 1870 Supreme Court decision in The Daniel Ball held that waterways were subject to federal jurisdiction if they were “navigable in fact.”  But what has never been clear is the extent to which non-navigable waters, like certain tributaries to navigable waters or wetlands, constitute “waters of the United States” such that they are subject to federal regulation.

The Supreme Court Punts (Again)

The 2006 Supreme Court decision in Rapanos v. United States represented a key turning point in CWA jurisdiction, holding that certain remote wetlands are not subject to CWA jurisdiction.  But the decision was badly fractured, with no majority of justices agreeing on a single standard for determining what, exactly, constitute “waters of the United States” such that the CWA applies.  Minor chaos ensued, as regulators and courts applied varying interpretations of Rapanos in permitting decisions and enforcement actions.

In 2015, the Obama administration attempted to clarify the scope of CWA jurisdiction by promulgating a rule known as the “Waters of the United States” (or “WOTUS”) rule that attempted to define exactly which waters were regulated by the CWA.  That rule, which was based on Justice Anthony Kennedy’s “significant nexus” test in the Rapanos decision, was quickly challenged by 31 states, numerous industries, and landowner groups.  At bottom, challengers argued that the WOTUS rule represented significant federal overreach and extended CWA jurisdiction well beyond what the Commerce Clause allows. The numerous appeals were consolidated into a single Sixth Circuit case, National Association of Manufacturers v. Department of Defense (NAM), and in late 2015 the Sixth Circuit stayed the WOTUS rule pending resolution of legal challenges.

But on January 22, 2018, the Supreme Court unanimously held that federal District Courts – not appellate courts – have jurisdiction over challenges to the WOTUS rule.  While the CWA generally requires challenges to CWA rules to be brought in district courts, there are seven situations where courts of appeal have jurisdiction.  In this case, the government argued that the challenge should be heard in the courts of appeal, under CWA Sections 1369(b)(1)(E)-(F) which allow appellate courts to hear cases related to the approval of certain effluent limits or permits, respectively.  Petitioners, on the other hand, maintained that the case should be heard in federal district court in the first instance.  In a procedural victory for the petitioners, the Supreme Court held that the WOTUS rule does not qualify for direct appellate review under CWA Sections 1369(b)(1)(E)-(F).  Following this decision, future challenges to the WOTUS rule will be brought in federal district courts, potentially with divergent outcomes around the country.  Appeals of those decisions will move to the courts of appeals, where there is yet again the possibility for inconsistency.  The upshot is a longer litigation timeline – and continued jurisdictional uncertainty – before the Supreme Court will have another chance to address the appropriate scope of CWA jurisdiction.

In the meantime, the Trump administration is working on a replacement rule for the WOTUS rule that is likely to apply the less expansive jurisdictional test described by Justice Antonin Scalia in Rapanos.  Under that interpretation, only tributaries that are “relatively permanent, standing or flowing bodies of water,” and only wetlands with a continuous surface connection to a “water of the United States” are themselves “waters of the United States” subject to CWA jurisdiction.  And on February 6, 2018, EPA and the Army Corps of Engineers promulgated a rule delaying implementation of the WOTUS rule until February, 2020.  That action preserves the Rapanos status quo (such as it is) until EPA can craft a new rule.  Ultimately, it is likely that any WOTUS replacement rule will be challenged, and the Supreme Court will then have a chance to revisit its decision in Rapanos and redefine federal jurisdiction under the CWA, a process that could easily extend past 2020.

Defer much?

On February 26, 2018, the Supreme Court weighed in again on the Clean Water Act, this time by refusing to take up a challenge to a 2017 decision by the Second Circuit that upheld a 2008 EPA rule exempting water transfers from CWA permitting requirements.  Water transfers happen when water from one waterbody is diverted into another waterbody, such as diverting a stream into a nearby lake or reservoir. Drinking water systems have conducted water transfers for decades, and EPA has never required NPDES permitting for such transfers.  But in 2008, in response to pressure by environmental groups to require NPDES permits for water transfers, EPA adopted the Water Transfers Rule expressly exempting such transfers from NPDES permitting.

Environmentalists and states challenged the Water Transfers Rule, arguing that moving water from one waterbody to another requires a permit if the “donor” water contains pollutants that would have the effect of degrading the receiving water.  Both the Obama and Trump administrations defended the rule, arguing that it preserved long-standing practice and was justified by EPA’s ability to interpret CWA requirements.  Ultimately, the Second Circuit deferred to EPA and allowed the rule to stand.  In turn, the February 26 decision by the Supreme Court allows the Second Circuit decision to stand, thereby affirming the validity of the Water Transfers Rule.  The case was widely seen as a test for Justice Neil Gorsuch, who has expressed hostility to the deference doctrine and EPA regulations alike.  By declining to hear the case, the Court has deferred that test for another day.

Who’s in Charge?

Under a process known as “delegation,” states may assume permitting and other authority under the CWA.  To-date, 46 states have received such delegation from EPA, and all but Massachusetts, New Hampshire, Idaho, and New Mexico now administer their own NPDES permitting programs.  In the absence of delegation, EPA manages the Clean Water Act and NPDES program in those four states, which often overlap and may duplicate separate state law requirements.

New Hampshire is currently evaluating whether to seek CWA delegation from EPA, and has established a legislative commission to explore its options.  And as we have previously reported, Massachusetts has explored CWA delegation in the past, but those efforts largely fizzled out.  But both of these efforts may have new life: the EPA, under Administrator Pruitt, is very focused on “cooperative federalism” and with EPA seeking to slash its budgets, CWA delegation is likely on EPA’s radar as an action item over the next several years.  And, in late 2017, MassDEP Commissioner Martin Suuberg expressed strong support for CWA delegation, as has Governor Baker.  Whether delegation will become a reality for Massachusetts or New Hampshire is anyone’s guess, but regardless of the outcome 2018 is shaping up to be an interesting year for water law.

 

© 2018 Beveridge & Diamond PC
This post was written by Brook J. Detterman of Beveridge & Diamond PC.

D.C. Circuit Amends Opinion on EPA’s Definition of Solid Waste Rule

On March 6, 2018, the United States Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued a ruling amending its July 7, 2017 opinion on challenges to the U.S. Environmental Protection Agency’s (EPA or Agency) 2015 rule on the Definition of Solid Waste (DSW) (the 2015 Rule). See American Petroleum Institute v. EPA, No. 09-1038 (D.C. Cir. 2018) (API Opinion). The 2015 Rule revised a DSW Rule promulgated by EPA in 2008 (the 2008 Rule). See KEAG Bulletin No. 2014-98, dated December 17, 2014. Both industry and environmental groups challenged the 2015 Rule. SeeKEAG Bulletin No. 2017-12, dated July 13, 2017. In the D.C. Circuit’s 2017 opinion, the court upheld some aspects of the 2015 Rule and vacated others. Id.

Following the issuance of the court’s 2017 opinion, petitions for rehearing were filed by the American Petroleum Institute, EPA, environmentalists, and other industry groups. API Opinion at 2. After reviewing the petitions, the court amended its decision in three ways: (1) it severed and affirmed EPA’s removal of the spent catalyst bar from the vacated portions of the Verified Recycler Exclusion (VRE), (2) it vacated “Legitimacy” Factor 4 in its entirety, and (3) it clarified the regulatory regime that replaces the now-vacated Factor 4. Id.

With respect to spent petroleum catalysts, the court granted industry’s request to exclude these catalysts from strict hazardous waste regulation for third‑party recyclers. In its original opinion, the court vacated the VRE from the 2015 Rule, and reinstated the Transfer-Based Exclusion (TBE) from the 2008 Rule. See KEAG Bulletin No. 2017-12, dated July 13, 2017. Spent catalysts were excluded from RCRA under the VRE, but not in the TBE. Id. In the court’s reconsideration of whether spent catalysts should be granted an exclusion, the court cited EPA’s various statements on catalysts and found that EPA’s revised containment standard, which the court upheld despite eliminating other aspects of the VRE, is sufficient for spent catalysts to be included in the TBE. Id. at 6-8.

Legitimacy Factor 4 is one of the four criteria the EPA applies to determine if recycling of hazardous secondary materials is legitimate and not sham recycling. Factor 4 requires that a recycled product be comparable to or lower in contaminant levels than a legitimate product or intermediate, and if the former contains higher levels of contaminants, it requires additional procedures and tests (a.k.a., the “toxics along for the ride” test). Id. at 8; see also KEAG Bulletin No. 2017-12, dated July 13, 2017. In its original opinion, the court found those additional procedures to be unauthorized under RCRA and vacated Factor 4 “insofar as it applies to all hazardous secondary materials via § 261.2(g),” which is the section of the RCRA rules that defines sham recycling. See KEAG Bulletin No. 2017-12, dated July 13, 2017. Nevertheless, Factor 4 still applied to those specific exclusions in which it was specifically included. Id. In its amended opinion, the court vacated Legitimacy Factor 4 under all circumstances, even those written into specific exclusions. API Opinion at 9.

Finally, the court clarified the effect of its vacating Factor 4. Id. at 9-10. The net result is that (1) the 2015 version of Factor 4 is vacated (in its entirety); (2) the 2015 change making the legitimacy factors applicable to all exclusions remains; (3) Factor 3 remains mandatory per the 2015 changes; and (4) the 2008 version of Factor 4, which requires only that the factor be “considered,” replaces the now-vacated 2015 version. Id. at 10.

 

©2018 Katten Muchin Rosenman LLP
This post was written by Danny G. Worrell of Katten Muchin Rosenman LLP.

EPA Issued Proposed Rule to Add Hazardous Waste Aerosol Cans to Universal Wastes Regulated under RCRA

On March 6, 2018, the U.S. Environmental Protection Agency (EPA) issued a proposed rule (pre-publication version available here) to add hazardous waste aerosol cans to the category of universal wastes regulated under the federal Resource Conservation and Recovery Act (RCRA) regulations (Title 40 of the C.F.R., Part 273), entitled Increasing Recycling: Adding Aerosol Cans to the Universal Waste Regulations.  EPA cites as authority for this change Sections 2002(a), 3001, 3002, 3004, and 3006 of the Solid Waste Disposal Act, as amended by RCRA, as amended by the Hazardous and Solid Waste Amendments Act (HSWA).  EPA states the streamlined Universal Waste regulations are expected to:

  • Ease regulatory burdens on retail stores and other establishments that discard aerosol cans by providing a clean, protective system for managing discarded aerosol cans;
  • Promote the collection and recycling of aerosol cans;
  • Encourage the development of municipal and commercial programs to reduce the quantity of these wastes going to municipal solid waste landfills or combustors; and
  • Result in an annual cost savings of $3.0 million to $63.3 million.

As aerosol cans are “widely used for dispensing a broad range of products” including pesticides, the proposed rule may have implications for chemical companies that create and distribute pesticide products marketed in aerosol cans.  Hazardous waste aerosol cans that contain pesticides are also subject to Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) requirements, including compliance with the instructions on the product label.  Under 40 C.F.R. Section 156.78, a flammability label statement is required for pressurized pesticide product products that states “Do not puncture or incinerate container,” but EPA’s 2004 determination (that will be posted to Docket No. EPA-HQ-OLEM-2017-0463 on www.regulations.gov for this proposed rule) allows for the puncturing of cans.  The proposed rule states:

  • EPA issued a determination that puncturing aerosol pesticide containers is consistent with the purposes of FIFRA and is therefore lawful pursuant to FIFRA section 2(ee)(6) provided that the following conditions are met:
    • The puncturing of the container is performed by a person who, as a general part of his or her profession, performs recycling and/or disposal activities;
    • The puncturing is conducted using a device specifically designed to safely puncture aerosol cans and effectively contain the residual contents and any emissions thereof; and
    • The puncturing, waste collection, and disposal, are conducted in compliance with all applicable federal, state and local waste (solid and hazardous waste) and occupational safety and health laws and regulations.
  • EPA anticipates that this 2004 FIFRA determination would not be affected by the proposed addition of hazardous waste aerosol cans to the universal waste rules.

Comments will be due 60 days after the proposed rule’s publication in the Federal Register.

 

©2018 Bergeson & Campbell, P.C.
Read more news on the National Law Review Biotech Type of Law page.

Army Corps of Engineers Issues Draft Guidance on Section 408 Permission Requests, Solicits Comments

On January 23,  2018, the United States Army Corps of Engineers (Corps) issued Draft Engineering Circular (EC) 1165-2-220, Policy and Procedural Guidance for Processing Requests to Alter U.S. Army Corps of Engineers Civil Works Projects Pursuant to 33 U.S.C. § 408 (Draft EC).  Comments on the draft circular are due March 7th, but there are reports that the comment deadline may be extended to April 6th.

The Draft EC,  once finalized, will replace existing guidance on the permission process required by Section 14 of the Rivers and Harbors Act of 1899, as amended and codified in 33 U.S.C. § 408 (Section 408).  The Draft EC consolidates existing guidance on Section 408 permissions and makes numerous changes to the existing guidance, including revising the test for when a Section 408 permission will be required, announcing general terms and standards that will be applied to all Section 408 permissions, and prescribing new timeframes for the Section 408 review process.  The comment period provides an opportunity for entities that need Section 408 permissions to address specific concerns with the Section 408 process and to advise the Corps on how to better streamline the Section 408 process.

Background

Section 408 requires that any proposed occupation or use of an existing Corps civil works project be authorized by the Secretary of the Army.  Examples of civil works projects include levees, dams, sea walls, bulkheads, jetties, dikes, wharfs, piers, and wetland restoration projects funded by or built by the Corps.  The Corps may grant such permission if it determines the alteration proposed will not be “injurious to the public interest” and “will not impair the usefulness” of the civil works project.  Under Corps policy, a Section 408 permission will not be issued before decisions on Clean Water Act Section 404 permits and Rivers and Harbors Act Section 10 permits are made.

Section 408 review may be required in a wide variety of situations.  For example, a Section 408 permission was required for the Dakota Access Pipeline, a crude oil pipeline, to cross 2.83 miles of federal flowage easements and approximately 0.21 miles of federally-owned property.  In addition, Section 408 review may be required where the Corps’ only connection to the project is funding, such as a wetland restoration project.

Section 408 permissions have become a significant issue in recent years because they have the potential to significantly delay projects.  The Corps has limited capacity to review Section 408 permission requests because such requests are not handled by the Corps’ regulatory program.  In the event that a Section 408 permission is required, the Corps may not have the staff resources to review the request unless the applicant pays for such a review.  Under the authority of Section 214 of the Water Resources and Development Act (WRDA) of 2000, the Corps may accept funds from non-Federal public entities to expedite the review and evaluation of a Section 408 request.  Under the 2016 WRDA, funding privileges were extended to certain private entities.  It should be noted that the recent Presidential “infrastructure legislative outline” that was released on January 12, 2018 along with the President’s budget would allow any non-federal entity to pay for expedited review and evaluation of a Section 408 request.

The Corps previously issued EC 1165-2-216 in 2014 on Section 408 permissions and since that time has issued a number of interim memoranda to improve the Section 408 permission process.  The Draft EC, once finalized, will replace EC 1165-2-216 as well as all interim memoranda, and will be effective for two years.

Proposed Changes to Section 408 Permission Process

Key changes proposed under the Draft EC include the following:

Program Governance Changes.  The Draft EC updates the Section 408 program governance.  It commits the Corps to conduct an internal audit of its decisions to examine whether Section 408 is being implemented consistently.  It provides for the creation of a database, which will be partially available to the public, as a tool for requestors to be informed about the status of their requests.

Section 408 Applicability Changes.  The Draft EC clarifies the geographical limitations on the applicability of the Section 408 permission process.  The Section 408 process applies to the lands and real property interests identified and acquired for a Corps project.  The Draft EC clarifies that, within navigable waters, the Section 408 process applies to alterations proposed to submerged lands and waters occupied or used by a Corps project.  The Draft EC process may be applied to alterations proposed in the vicinity of a Corps project that occur on or in submerged lands and waters that are subject to the navigation servitude.

The Draft EC clarifies how emergency situations should be addressed under Section 408.  Emergency alterations performed on a Corps project pursuant to Public Law (PL) 84-99 do not require a Section 408 permission, but urgent alterations that do not fit within the definition of emergency under PL 84-99 may require a Section 408 permission.  PL 84-99 authorizes the Corps to undertake activities, including disaster preparedness, “advance measures” to prevent or reduce flood damage from imminent threat of unusual flooding, emergency operations, rehabilitation of flood control works threatened or destroyed by flood, protection or repair of federally authorized shore protective works threatened or damaged by coastal storm, and provisions of emergency water due to drought or contaminated source.  The Draft EC indicates that when an alteration cannot be performed pursuant to PL 84-99, Corps districts can reprioritize and expedite reviews as appropriate given the urgency required for each specific situation.

The Draft EC identifies certain activities that will not require a Section 408 permission.  As under the existing guidance, non-federal sponsor activities that are included in an operation and maintenance (O&M) manual for the project do not require Section 408 permission.  The Draft EC also provides that a Section 408 permission is not required if a non-federal sponsor is performing activities on a Corps project that restores such project to the physical dimensions and design of the constructed project.  Although a Section 408 permission will not be required, the project sponsor may still need to coordinate with the Corps.  In addition, under the Draft EC, a Section 408 permission is not required for geotechnical explorations that comply with the Corps’ drilling requirements.

The Draft EC recognizes that the requirements of Section 408 may be fulfilled by another process.  For example, where a project requires a real estate outgrant—an authorization of the use of real property managed by the Corps—or a Rivers and Harbors Act of 1899 Section 10 permit that covers the same scope and jurisdiction as a Section 408 permission, a separate Section 408 permission is not required.  What is not addressed in the Draft EC is whether a Section 408 permission will be required to conduct O&M on a non-Corps project for which a Section 10 was previously issued.

Procedural Changes.  The Draft EC identifies new procedures for seeking a Section 408 permission.  Under the existing guidance, there are two options for review under Section 408—a single-phase review and a categorical review.  In a single-phase review, all information for a Section 408 permission is submitted at the same time.  In a categorical review, the Corps performs an analysis of impacts and environmental compliance in advance for a common category of activities.  When a Section 408 permission request meets the criteria of the categorical permission, the Section 408 permission may be granted under a simplified validation process.  To add flexibility, particularly for projects that involve multiple stages of engineering or construction, the new guidance allows for a multi-phased review.  The Draft EC also removes the requirement that plans and specifications be, at a minimum, 60% complete to initiate the Section 408 review process.

The Draft EC incorporates new timelines for a Section 408 review that are provided in the 2016 WRDA.  When a Corps district receives a Section 408 request, the district must respond within 30 days, informing the requestor that the submission was complete or specifying what additional information is required.  The Draft EC does not speak to the Corps’ failure to respond within 30 days.  If a completeness determination is made, the Corps district has 90 days to render a decision.  If the district cannot meet the 90 day timeline, it can provide an estimated date of a final decision.  If that estimate extends beyond 120 days, the Corps must provide congressional reporting.

Click here for a side-by-side chart comparing the Draft EC to the legislative provision on Section 408 developed by our firm’s Corps Reform Working Group and the legislative provisions on Section 408 that are contained in the President’s “infrastructure legislative outline”.

 

© 2018 Van Ness Feldman LLP
This post was written by Jenna R. Mandell-Rice and Brent Carson of Van Ness Feldman LLP.

EPA Sees New Challenges Ahead for Superfund

EPA released a four-year “strategic plan” on February 12 that continues to emphasize the EPA Superfund environmental clean-up program as one of Administrator Scott Pruitt’s top priorities.  While it has been clear since last summer’s Superfund Task Force report that the agency’s new leadership wants to accelerate Superfund site cleanups, the agency’s new strategic plan reveals for the first time that EPA also sees emerging challenges ahead for Superfund.

“A number of factors may delay cleanup timelines,” the agency wrote in its strategy document.  These factors include the “discovery of new pathways and emerging contaminants” such as vapor intrusion and per- and polyfluoroalkyl substances (PFAS), and new science such as “new toxicity information or a new analytical method.”

According to the strategic plan, the emergence of this kind of new information can reopen previously settled remedy determinations – and the Superfund sites that still remain on the National Priorities List (NPL) already tend to be the harder cases, with more difficult patterns of contamination and more complex remedies.  EPA flagged in particular its waste management and chemical facility risk programs, where “rapidly changing technology, emerging new waste streams, and aging infrastructure present challenges[.]”

It remains to be seen whether the agency’s cautions in the Superfund section of its strategy document represent a meaningful shift in the agency’s frequently-stated intention to reinvigorate the Superfund program.  Early in his tenure, Mr. Pruitt charged his Superfund Task Force with generating a series of recommendations centered around Mr. Pruitt’s goals for Superfund: faster cleanups, the encouragement of cleanup and remediation investments by PRPs and private investors, and a process centered on stakeholder engagement and community revitalization.  In December, in response to one of the Task Force’s recommendations, the agency released a list of 21 high-priority NPL sites that Mr. Pruitt targeted for “immediate and intense attention,” according to an EPA press release.  The cautionary notes in this week’s strategic plan are a subtle shift in tone for EPA.

At the same time, the document also sets forth a plan for improving the consistency and certainty of EPA’s enforcement activities in the regulated community.  It remains to be seen how EPA intends to achieve consistency while being responsive to state and tribal interests.

These goals, of course, will depend on the details of implementation, which are not set forth in the strategic plan.  And such details will depend on the agency’s budget, which remains in flux for 2019 and beyond.  For example, EPA’s proposed budget for fiscal year 2019 sought a roughly $327 million cut in the Superfund program, but the funds were added back into the budget proposal as part of last-minute budget agreement reached in Congress last week, securing the program’s funding in the short-term.   Last year, the administration proposed a 30% cut in the agency’s funding  but Congress balked and eventually approved a budget that cut roughly 1%.

 

© 2018 Beveridge & Diamond PC
This post was written by Loren Dunn of Beveridge & Diamond PC.

Bye, Bye Birdie: Summary and Analysis of the Trump Administration’s Recent Policy Change of the Migratory Bird Treaty Act

I. Background

Just over a month ago, on December 27, 2017, the United States Solicitor’s office issued a Memorandum Opinion reversing the Obama-era policy of interpreting the Migratory Bird Treaty Act (“MBTA”) to include “unintentional” or “incidental” takings of migratory birds. Under the new interpretation, the federal agencies under the Department of the Interior (or the “Department”) will no longer be able to threaten or impose criminal liability with respect to the MBTA for any activity which unintentionally or incidentally impacts migratory birds.

For nearly 20 years, federal agencies1 have used the threat of criminal prosecution under the MBTA as leverage to impose costly mitigation on any activities requiring NEPA compliance or some sort of permit from a federal agency. At the same time, because MBTA does have a meaningful “take permit” regime, refusing to commit that even with such costly mitigation such projects were protected from criminal liability. As a practical matter, these mitigation requirements have increased the costs of infrastructure development, renewable energy development, and mining projects which traverse federal lands or have a federal nexus such that agency approval of some sort is required.

With this policy change, the Trump Administration has removed the threat of federal prosecution. However, it stops short of alleviating the costly mitigation obligations because of the outstanding requirements of a 2001 Executive Order and the protections required with respect to companion federal statutes, such as the Endangered Species Act and the Bald and Golden Eagle Protection Act. As outlined herein, the Memorandum Opinion relieves some pressure but leaves federal agencies with tools to continue to impose costly mitigation requirements aimed at preventing “incidental” or “unintentional” takes of migratory birds. In other words, absent revocation of the 2001 Executive Order, the Memorandum Opinion is merely lip service with respect to reducing cost impediments to infrastructure development, renewable energy development, and mining projects which traverse federal lands or have a federal nexus such that agency approval of some sort is required.

II. What is an “M-Opinion” and What Does the December 27, 2017, M-Opinion Actually Accomplish?

Many environmental organizations have expressed dismay at the December 27, 2017, M-Opinion, claiming that it will lead to a “parade of horribles” with respect to migratory birds.2  

Ostensibly, some of the hyperbole is aimed at drumming up “rage donations.3 However, to understand the impact of the M-Opinion, one must first take the time to understand exactly what an M-Opinion can and does do and what it cannot and does not accomplish. Notably, the M-Opinion in question did not, and cannot, repeal and replace the 2001 Executive Order directing agencies to impose mitigation to impacts associated with intentional and unintentional takings of migratory birds. This simple, indisputable, fact obviates the fear mongering.

The Department of the Interior can communicate using many different methods, each of which requires different formalities before issuance and results in a different amount of influence and authority (e.g., regulations, policies, guidance, memoranda, directives, and opinions). Some agency publications are advisory, some are specifically tailored to a particular case, and others are intended to reach everyone affected by a federal statute overseen by the Department or the agencies thereunder. The “M-Opinion” is one of the latter.

An M-Opinion (a “Memorandum Opinion”) is a written opinion issued by the Solicitor for the Department of the Interior on a particular topic that constitutes the Department’s official legal interpretation on a matter within its jurisdiction. M-Opinions are binding on all other offices and divisions within the Department of the Interior. Once issued, an M-Opinion can only be withdrawn, overruled, or modified by the Solicitor, the Secretary of the Interior, or the Deputy Secretary.

The MBTA was enacted in 1916 to respond to the overwhelming amounts of hunting that were devastating migratory bird populations. It is codified at 16 U.S.C. § 703. Section (a) of the MBTA makes it a crime to, “at any time, by any means or in any manner, to pursue, hunt, take, capture, kill,” or attempt to do so to “any migratory bird, any part, nest, or egg of any such bird….” The U.S. Fish and Wildlife Service has defined “take” to mean “to pursue, hunt, shoot, wound, kill, trap, capture, or collect” or attempt to do so.

Violations of the MBTA are criminal offenses:  some misdemeanors, some felonies. Misdemeanor violations of the MBTA are “strict liability” offenses, which means that it does not matter whether the offender intended to violate the statute. So, if a hunter shoots a bird believing it to be nonmigratory, but it turns out to actually be migratory, his intent or belief is irrelevant. By taking a migratory bird, he committed a federal crime.

On its face, the MBTA might seem easy enough to follow: don’t hunt or kill migratory birds out of season. But look at the language again—the MBTA forbids killing a migratory bird “by any means or in any manner.” Does that language extend to migratory birds that die after landing in retention ponds meant to contain toxic waste? Or to the birds that run into windmills (killing approx. 174,000 birds/year) or buildings (303.5 million)? What if you hit a bird with your car (causing an estimated 200 million bird deaths/year)? If your cat kills a pigeon (which is migratory and, thus, falls under the MBTA), have you committed a federal crime? (Cats kill an estimated 2.4 billion birds/year). These sorts of activities which aren’t meant to kill birds, but do anyway, are referred to commonly as “incidental take” or “unintentional take.”

Prosecutors began filing criminal charges under the MBTA based on incidental take more than 40 years ago. The MBTA has been amended a few times since then, but incidental take was not directly addressed by the statute4. Interpretations differ. On the one hand, it seems extreme to impose criminal charges against the owner of an energy project, but on the other, the MBTA seems written to protect migratory birds and power lines kill an estimated 30 million birds each year. The text of the statute seems like it is aimed at hunting and poaching, but it also expands the scope to killing birds “by any means. Courts across the country have split as to whether incidental take can trigger strict liability.

In an effort to resolve the discrepancy, the Solicitor issued M-Opinion 37041 in January 2017, which affirmed that incidental take wasprohibited under the MBTA. That M-Opinion was suspended by the new Acting Secretary of the Interior in February 2017. Then on December 22, 2017, the Deputy Solicitor issued a new M-Opinion, M-37050, which withdraws and replaces the old opinion and decrees that the MBTA does not extend to incidental take.

When boiled down, the analysis in the new M-Opinion (hereinafter referred to simply at the “M-Opinion”) interprets the statute differently in four significant ways:

  • First, the M-Opinion affirms that a violative action must have some intent behind it to take or kill a bird, i.e. “purposeful and voluntary affirmative acts directed at reducing an animal to human control.” [p. 22]. Driving a car, erecting a windmill, or owning a cat are not actions designed to kill birds, even if it is likely or foreseeable that some birds will die. But shooting a gun, setting a trap, knocking down a nest, those are all acts with some intent behind them to kill or capture. The latter actions will have strict liability applied against them, but the former actions will not. The old opinion applied strict liability to all actions.
  • Second, the M-Opinion gives a different interpretation of the statutory language.5  The old opinion interpreted the relevant language to prohibit any activity that kills a bird “by any means, in any manner.” But the new M-Opinion declares that such a broad reading cannot have been what Congress intended. Instead, the “any means, any manner” language should be more narrowly applied only to intentional acts aimed at the bird. In other words, any means or manner of an intentional act aimed at a bird (e.g. guns, bows, air rifles, nets, lasers, or any other creative ways to take the bird) will violate the statute.
  • Third, the M-Opinion looked at the legislative history of the MBTA and concluded that the MBTA was only ever intended to regulate overhunting, not to protect bird habitats or control any action that might have an incidental impact on migratory birds.
  • Finally, the M-Opinion disagreed as to the effect of subsequent legislation on the MBTA. For example, the old opinion relied on the 2003 legislation that authorized any incidental take by the military. Why, it reasoned, would that manner of incidental take need an explicit authorization unless every other form of incidental take was not authorized under the MBTA? But the new M-Opinion says that the 2003 legislation was at best a precautionary measure that did not change the scope or language of the MBTA itself. The M-Opinion reasons that if Congress wanted to incorporate incidental take into the MBTA, it would do so directly and not by such a vague reverse inference.
    • Similarly, the M-Opinion explains that a 2001 Executive Order from President Clinton, which expanded the definition of “take” to include incidental take, was only part of a direction as to how agencies should focus their energies, not an attempt to expand the scope of the MBTA itself (nor could an executive order change the text of a Congressional law). [p. 32]

Ultimately, the M-Opinion comes back to the Constitution and a common sense rationale. Due process under the Constitution requires that we be able to reasonably understand whether an action we take would constitute a crime. But the Opinion reasons that if incidental take constituted a criminal act, no one could know whether or not they would commit a crime from day to day.  The scope of liability “is virtually unlimited.” [p. 33]. Even if they drove a car while obeying all traffic laws or built a building or power line in compliance with all of the relevant regulations, if doing so killed a bird they would have committed a crime punishable by imprisonment. Only the prosecutor’s discretion would keep that person from jail. The M-Opinion warns that such a broad interpretation of the MBTA would not be constitutional.

The M-Opinion concludes that including incidental take within the scope of the MBTA makes the statute vague to the point of absurdity. It points out that even if a developer completely complies with the Fish and Wildlife Service’s MBTA Guidelines, compliance with those guidelines does “not provide enforceable legal protections” based on that compliance and the developer may still be prosecuted should bird death occur. [p. 38-39]. It “is literally impossible” to know what is required under the law if the MBTA includes incidental take, and that does not comply with the Constitution’s guarantee of due process. Id.

III. “Bird is [still] the Word” ”—the M-Opinion Falls Short of Relieving Developers Required to Traverse Federal Lands or Secure a Permit or Approval from a Federal Agency from Mitigating Impacts Associated with “Unintentional” or “Incidental” Impact to Migratory Birds

Just because incidental take is not a criminal violation of the MBTA doesn’t mean that federal agencies will suddenly allow an incidental “open season” to occur. Those agencies will still work to minimize unintentional impacts to migratory birds. And those agencies will also still be required to analyze and approve the environmental impact of projects before they can be approved. Put simply, if the agency doesn’t believe that enough is being done to prevent incidental take, it can and will require the developer to employ mitigation measures even without the threat of criminal prosecution. If developers don’t comply, the agencies won’t issue the relevant permits or decisions needed for a particular project to proceed.

This reality is somewhat acknowledged by the M-Opinion’s discussion of the 2001 Executive Order. The Opinion distinguished the 2001 Clinton Executive Order (“EO-13186” or the “2001 Executive Order” or “Executive Order 13186”)6 as only providing internal guidance to federal agencies, not interpreting the MBTA. But that Executive Order remains in effect, thereby reducing the overall efficacy of the M-Opinion.

The scope of Executive Order 13186 includes “unintentional take,” and defines it as “take that results from, but is not the purpose of, the activity in question.” Section 2(c). The 2001 Executive Order required each federal agency to enter into a Memorandum of Understanding to define the term “action” with respect to each agencies responsibilities under the 2001 Executive Order and that “that shall promote the conservation of migratory bird populations.” 2001 Executive Order at Section 3.

Pursuant to EO-13186, in April 2010, the Bureau of Land Management and Fish and Wildlife Service entered into the MEMORANDUM OF UNDERSTANDING between the U.S. Department of the Interior Bureau of Land Management and the U. S. Fish and Wildlife Service To Promote the Conservation of Migratory Birds (the “BLM-FWS MOU”). The BLM-FWS MOU provides that BLM will, “[i]n coordination with the FWS, develop conservation measures and ensure monitoring of the effectiveness of conservation measures to minimize, reduce or avoid unintentional take.” Paragraph G. Paragraph I provides that the BLM will “[i]ntegrate migratory bird conservation measures, as applicable, into . . . renewable (wind, solar, and geothermal) energy development NEPA mitigation. This will address habitat loss and minimize negative impacts.” Additionally, the BLM-FWS MOU defines “Action” as “any action, permit, authorization, collaborative effort, program, activity, project, official policy, rule, regulation or formal plan directly carried out by the agency.” Paragraph IX. Finally, the BLM-FWS MOU defines “take” as “to pursue, hunt, shoot, wound, kill, trap, capture or collect or attempt to pursue, hunt, wound, kill, trap, capture or collect (50 CFR Section 10.12).” Paragraph IX. It goes on to note that the “Executive Order further defines take to include intentional take, meaning take that is the purpose of the activity in question, and unintentional take, meaning take that results from, but is not the purpose of, the activity in question.” Id. Finally, it states that “[b]oth intentional and unintentional take constitute take as defined by the regulation.” Id. Consequently, the BLM-FWS MOU makes clear that anybody seeking a federal permit or right-of-way from the BLM will be required to continue to integrate mitigation measures to address impacts to migratory birds, both intentional and unintentional/incidental impacts.7

Summarily, the M-Opinion clarifies that criminal liability for “taking” a migratory bird under the MBTA will not extend to the unintentional or incidental impacts to migratory birds. However, the M-Opinion fails to address the seemingly inconsistent definitions of “take” contained in the agency MOUs with FWS executed pursuant to the 2001 Executive Order. Ultimately, because of the 2001 Executive Order and the MOUs executed as a result therefrom, all the M-Opinion did was remove the threat of criminal prosecution from the quiver of arrows used by federal agencies to impose mitigation requirements. Removal of the threat of criminal prosecution may allow project proponents to have more candid discussions regarding mitigation without the fear and threat of federal criminal prosecution. But federal agencies can (and likely will) still condition approvals and permits on the inclusion of the same panoply of mitigation requirements it always has, at the same cost.

The M-Opinion should be further amended to reconcile the inconsistency between its interpretation of the MBTA and the definition of “take” under the MBTA contained in the 2001 Executive Order and the agency MOU executed pursuant thereto. Absent such a clarification, there will continue to be confusion as to the scope of the MBTA with respect to whether a federal agency can require costly mitigation of incidental or unintentional impacts associated with infrastructure development, renewable energy development, and mining projects which traverse federal lands or have a federal nexus such that agency approval of some sort is required.

References:

1 As used herein, “federal agency” or “federal agencies” shall only include those federal agencies under the Department of the Interior.
2 See e.g. http://www.audubon.org/news/the-white-house-turns-its-back-americas-birds (last visited January 26, 2018).
3 https://www.npr.org/2017/03/26/520854771/the-resistance-faces-a-new-question-what-to-do-with-all-that-money (last visited January 26, 2018); https://www.gq.com/story/the-rise-of-the-rage-donation (last visited January 26, 2018)
4 Congress did, however, adopt a regulation in 2003 that authorizes the incidental take of migratory birds during military training exercises.  50 C.F.R. § 21.15.
5 Bear in mind that section (a) of the statute is a single sentence containing 230 words. The question of whether and how a single clause should apply to another clause within that sentence can make a significant difference in statutory interpretation.
6 Executive Order 13186 is available online at https://energy.gov/sites/prod/files/nepapub/nepa_documents/RedDont/Req-EO13186migratorybirds.pdf (last visited January 29, 2018)
7 The M-Opinion applies to all agencies under the Department of the Interior, which can be found online at: https://www.usa.gov/federal-agencies/u-s-department-of-the-interior (last visited January 29, 2018).  The other agencies have MOUs that likewise define “take” under the MBTA to include incidental or unintentional impacts to migratory birds.  See e.g. Bureau of Reclamation and FWS MOU, https://energy.gov/sites/prod/files/2013/10/f3/Final%20signed%20MOU%20-%20Migratory%20Birds_0.pdf (last visited January 29, 2018) (“Executive Order 13186 further defines take to include intentional take, meaning take that is the purpose of the activity in question, and unintentional (or incidental) take, meaning take that results from, but is not the purpose of the activity in question.  Both intentional and unintentional take constitute take as defined by the MBTA.”); National Park Service and FWS MOU, https://www.nature.nps.gov/biology/migratoryspecies/documents/MBMOUNPSSigned041210.pdf (last visited January 29, 2018) (“Executive Order 13186 further defines take to include intentional take, meaning take that is the purpose of the activity in question, and unintentional (or incidental) take, meaning take that results from, but is not the purpose of the activity in question. Both intentional and unintentional take constitute take as defined by the MBTA.”); Office of Surface Mining, Reclamation and Enforcement and FWS MOU, https://www.osmre.gov/lrg/docs/2016_MOU_Migratory_Bird_Conservation.pdf (last visited January 29, 2018) (“Executive Order 13186 further defines take to include intentional take, meaning take that is the purpose of the activity in question, and unintentional (or incidental) take, meaning take that results from, but is not the purpose of the activity in question. Both intentional and unintentional take constitute take as defined by the MBTA.”).

Copyright © 2018 Ryley Carlock & Applewhite. A Professional Association. All Rights Reserved.
This post was written by Jason Cassidy and Samuel Lee Lofland of Ryley Carlock & Applewhite.
More environmental news is available on the National Law Review’s Environmental Law page.

Climate Change and Trends in Global Finance

On December 12, French President Emmanuel Macron, joined by President of the World Bank Group, Jim Yong Kim and the Secretary-General of the United Nations, António Guterres, hosted the One Planet Summit highlighting public and private finance in support of climate action. The summit’s focus centered on addressing the fight against climate change and ensuring that climate issues are central to the finance sector.

The summit’s most notable event was perhaps the announcement that insurance giant Axa would be dumping investments in and ending insurance for controversial U.S. oil pipelines, quadrupling its divestment from coal businesses, and increasing its green investments fivefold by 2020. Axa’s plans echo those of BNP Paribas, who, in mid-October, announced that it would terminate business with companies whose principal activities involve exploration, distribution, marketing, or trading of oil and gas from shale or oil sands. The bank also ceased financing projects that are primarily involved in the transportation or export of oil and gas. These moves themselves follow controversy over the Dakota Access pipeline in the U.S. from mid-March that resulted in ING’s $2.5 billion divestment in the loan that financed the pipeline.

These measures prefigure what might be a more conspicuous trend of large institutional investors moving more rapidly away from fossil fuel investments and into green investments. In mid-December, the World Bank said it would end all financial support for oil and gas exploration by 2019. Around the same time, New York Governor Andrew Cuomo revealed a plan for the state’s common retirement fund, with over $200 billion in assets, to cease all new investments in entities with significant fossil-fuel related activities and to completely decarbonize its portfolio. Recently, HSBC pledged $100 billion to be spent on sustainable finance and investment over the next eight years in an effort to address climate change. Additionally, JP Morgan Chase committed $200 billion to similar clean-minded investments, Macquarie acquired the UK’s Green Investment Bank, and Deutsche Bank and Credit Agricole both made exits from coal lending. As the landscape of global finance shifts, it will be important to monitor how funds, banks, and insurers address the issues related to climate change.

 

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President Trump Announces Withdrawal from Paris Agreement on Climate Change

President Trump announced on Thursday his intention to initiate a formal withdrawal of the United States from the Paris Agreement, a global agreement designed to address climate change by reducing greenhouse gas (“GHG”) emissions. The President indicated that the United States would move forward with the pull-out and possibly attempt to re-negotiate the agreement in order to get “terms that are fair to the United States.”  President Trump frequently discussed pulling out of the Paris Agreement while on the campaign trail, citing concerns regarding its potential impact on the American economy, particularly the energy sector.

While the President’s intentions are clear, the path forward is less obvious. The U.S. cannot immediately exit the Paris Agreement and several nations, including Germany, France, and Italy, announced in a joint statement that “that the Paris Agreement cannot be renegotiated.”  In addition to announcing withdrawal from the Paris Agreement, President Trump also indicated that the U.S. would immediately halt the remaining $2 billion of the $3 billion in aid to developing countries pledged by President Obama as a part of the Green Climate Fund, which also is a component of the UNFCCC.

The Paris Agreement’s formal processes does not allow for a notice of withdrawal to be submitted until November 4, 2019, after which it will take one year for such notice to become effective. Assuming adherence to this process, the earliest the U.S. can formally withdraw from the Paris Agreement is November 5, 2020, one day after the next presidential election.  Because the Agreement’s only binding obligations are certain reporting requirements, the withdrawal is viewed by some as a symbolic gesture, since any federal GHG reduction measures resulting from the Paris Agreement would still need to be pursued through domestic legislation or regulatory action.  As a practical matter, irrespective of the Paris Agreement the administration can—and likely will—take steps to alter federal climate change policy.

Paris Agreement Background

The Paris Agreement builds on the United Nations Framework Convention on Climate Change (UNFCCC), a treaty signed by President George H. W. Bush and ratified by the United States Senate in 1992. The Paris Agreement was adopted in December 2015 as part of the twenty-first session of the Conference of the Parties (COP21) to the UNFCCC.  Following its initial adoption, President Obama ratified the Paris Agreement as an “executive agreement” on September 3, 2016.  The Paris Agreement was ultimately signed by 195 parties, ratified by 146 nations and the European Union, and entered into force on November 4, 2016.

The Paris Agreement directs signatory nations to develop voluntary GHG reduction measures, known as “Intended Nationally Determined Contributions,” which convert to “Nationally Determined Contributions” (NDCs) after a nation ratifies the Paris Agreement.  The Paris Agreement further provides for periodic updates to NDCs in order to continually “enhance” emission reductions targets.  The Paris Agreement’s only binding provisions are reporting obligations largely governed by the UNFCCC and “global stocktakes” that occur every five years.  These reporting measures were designed to help track total carbon emissions and progress towards meeting each NDC.  However, actual attainment of an NDC is voluntary and the Paris Agreement has no legally binding enforcement mechanism. The Paris Agreement also directs wealthier nations to help developing nations reduce GHG emissions and adapt to the impacts of climate change, but again these actions would be taken on a voluntary basis.

What happens next?

The UNFCCC made a formal statement in response to President Trump’s announcement that it “regrets” the decision of the United States to withdraw from the Paris Agreement, and that it remains open to discussion of the rules and modalities currently being negotiated for implementation of the Paris Agreement.  At the same time, the UNFCCC stated that the Paris Agreement has been “signed by 195 Parties and ratified by 146 countries plus the European Union [and] cannot be renegotiated based on the request of a single Party.”  Based on this statement and similar statements from France, Germany, Italy, and other nations, it appears that any near-term renegotiation of the Paris Agreement is unlikely.

Regardless of whether the United States is a party to the Paris Agreement, multinational corporations will still be subject to GHG reduction programs in other nations as those nations attempt to fulfill their NDCs. In addition, France and other nations have indicated the possibility of imposing a carbon tax on American imports from certain industries if the United States does formally withdraw from the Paris Agreement.

Under the Paris Agreement, the United States established its NDC as a goal of reducing GHG emissions 26-28 percent below 2005 levels, by 2025, and to make “best efforts” to reduce emissions by 28 percent. It is important to note that the U.S. is in the first sustained period where greenhouse gas emissions have decreased while economic growth has increased, largely the result of increased reliance on natural gas, improved vehicle fuel economy, state and regional GHG programs, and growth in renewable energy.  These factors are likely to persist even if the U.S. leaves the Paris Agreement.  And even in the absence of U.S. commitments under the Paris Agreement or additional federal action, U.S. GHG emissions are expected to decline by about 15-18 percent below 2005 levels by 2025.

The federal Clean Power Plan was one measure that was expected to further reduce U.S. GHG emissions. However, that program is subject to ongoing legal challenges and has been stayed by the U.S. Supreme Court.  There also are various lawsuits underway seeking to compel the federal government to take action on climate change. See e.g., Juliana v. United States, No. 6:15-cv-01517-TC (D. Or. Nov. 10, 2016).   Apart from litigation, the Trump Administration has indicated a willingness to modify the Clean Power Plan (should it be upheld) and reconsider other federal regulations and programs directed at GHG emissions and climate change, such as motor vehicle emissions standards.  These processes will take time to play out and, in combination with ongoing state-level programs, will ultimately determine the course of climate change policy in the United States for the remainder of the Trump Administration.

This post was written by Brook J. Detterman, Leah A. Dundon and Kristin H. Gladd of Beveridge & Diamond PC.

San Mateo Gardens Teaches College District a Lesson on Picking Thorny Subsequent Review Procedure

The California Supreme Court recently addressed an important California Environmental Quality Act (CEQA) issue: Who decides whether CEQA’s subsequent review provisions are applicable when there are changes to an adopted project? Subsequent review provisions include a subsequent Environmental Impact Report (EIR) or Negative Declaration (ND), a supplemental EIR, or an addendum to an EIR or ND.  When a project that has been reviewed and finalized under CEQA is altered, what type of review process under CEQA is required, if any?  As we said before on Friends of the College of San Mateo Gardens v. San Mateo County Community College District et al., (2016) 1 Cal.5th 937 (Friends of the College), the Court determined that the lead agency makes this determination.  The question that the lead agency should be analyzing is whether the original document “retains some informational value” – if it does, then CEQA’s subsequent review procedures apply.  Should the lead agency’s decision be challenged, then the Court must decide whether “substantial evidence” supports the lead agency’s conclusion.

The First District Court of Appeal thus took up applying this standard on remand. In Friends of the College of San Mateo Gardens v. San Mateo County Community College District et al., (2017 WL *1829176) (San Mateo Gardens), the Court of Appeal upheld the San Mateo County Community College District’s determination that it could proceed under CEQA’s subsequent review provisions.  The District had previously analyzed its project, including the demolition or renovation of some buildings on a San Mateo college campus, through a mitigated negative declaration (MND).  After a failure to obtain funding for renovations to the “Building 20 complex,” the District altered the project to include demolition of Building 20 and its associated gardens (the centerpiece of the dispute) and to renovate two other buildings that were previously slated for demolition.  The District determined that these changes would “not result in a new or substantially more severe impact than disclosed” in the original MND, and thus proceeded to adopt the alteration through a subsequent review procedure document called an addendum.

The Court of Appeal held that the District’s decisions to proceed by CEQA’s subsequent review procedures was supported by substantial evidence. The relevant changes only altered the treatment of three buildings while leaving alone plans to demolish 14 others with attendant mitigation measures.

That the District could proceed by CEQA’s subsequent review procedures, however, only answers the first question. The subsidiary, and more “critical” issue, is “to determine whether the agency has properly determined how to comply with its obligations under those provisions.” Friends of the College, 1 Cal.5th at 953.  In other words, which subsequent review procedure is correct to use.  The Court of Appeal held that a more rigorous standard of review is applicable at this second step when a project is originally accompanied by a negative declaration than when an approved project is originally analyzed through an EIR.  This more rigorous standard looks to whether the negative declaration will require a “major revision.”  A major revision is required when “there is ‘substantial evidence that the changes to a project for which a negative declaration was previously approved might have a significant environmental impact not previously considered in connection with the project as originally approved.’ ” San Mateo Gardens, 2017 WL *1829176 (quoting Friends of the College, 1 Cal.5th at 959).  If the project was previously analyzed through an EIR, however, the agency may proceed without a subsequent EIR so long as substantial evidence supports the agency’s conclusion that no major revisions to the original document are necessary.

It is at this critical second step that the District failed. The Court of Appeal determined that there was substantial evidence that the altered project might have a significant “aesthetic impact”, which is a cognizable environmental impact under CEQA.  The “Building 20 complex” demolition would include removal of gardens which were of particular value to the college community for aesthetic purposes.  The Court of Appeal therefore concluded that the District violated CEQA in analyzing the altered project through an addendum when a subsequent EIR or MND was necessary.

The takeaway from this case is that lead agencies will have to be especially keen on determining the impact of project changes when the original project is adopted by a negative declaration. While the original document may retain some residual “informational value,” and thus allow CEQA’s subsequent review procedures, it may be difficult to show that project changes do not require some type of further environmental review. It is the lead agencyiess responsibility to determine the need for and type of further review, but that decision must be based upon substantial evidence.

This article was written by David H. McCray and Jacob P. Duginski of Beveridge & Diamond P.C.

Trump Order Sets Up Rollback of Obama Energy and Climate Action

clean power planOn Tuesday March 28, President Donald Trump signed an Executive Order that takes the first step in rolling back executive actions that had been undertaken by the Obama Administration to address climate change and energy resource development.  The far-reaching order directly revokes or rescinds certain presidential and regulatory actions and directs the review and potential subsequent rescission or revision of other key programs and regulations administered by a variety of agencies.  However, it does not go as far as the Trump Administration might have in uprooting the underpinning of the federal government’s climate authority—the Environmental Protection Agency’s (EPA) 2009 endangerment finding—or in walking away from the international process to address climate change as codified in the 2015 Paris Agreement.  Moreover, implementation of the measures outlined in the Executive Order will likely take significant additional time and process to fully implement and will almost certainly be challenged in the courts.

The Executive Order directs EPA to reconsider its climate-related energy sector regulations.

1.  Clean Power Plan

Most prominently, the Executive Order directs EPA to immediately review the Clean Power Plan, a regulation promulgated pursuant to section 111(d) of the Clean Air Act that is intended to limit greenhouse gas emissions from existing power plants.  The Executive Order directs EPA to “as appropriate” initiate rulemaking to suspend, revise or rescind the rule and related actions.  Following the issuance of the Executive Order, EPA Administrator Scott Pruitt signed a Federal Register notice announcing that EPA is reviewing and, “if appropriate, will initiate proceedings to suspend, revise or rescind the Clean Power Plan.”

Importantly, the Executive Order cannot and did not itself rescind the Clean Power Plan.  This must be done by EPA, through the same notice-and-comment rulemaking process used to promulgate the rule in the first place, which could take up to a year.  A final rule rescinding or revising the Clean Power Plan rule will almost certainly be challenged by states and environmental organizations.

The Clean Power Plan is currently subject to challenge in the D.C. Circuit and has been stayed by the Supreme Court.  The Executive Order directs the Department of Justice (DOJ) to inform the D.C. Circuit of EPA’s plans and ask the court to put those challenges on hold while EPA takes action to rescind or revise the rule. Late Tuesday night, DOJ filed a motion requesting that the D.C. Circuit hold its proceedings in abeyance.  This request likely will be challenged by environmental groups, states, and businesses that have supported the Clean Power Plan.

2.  Carbon Pollution Standards Rule

The Executive Order directs EPA to review and, as appropriate, suspend, rescind or revise its Carbon Pollution Standards Rule, which sets emission limits for new, modified and reconstructed power plants.  Most significantly, this rule establishes a limit on carbon dioxide emissions from new coal-fired power plants that is achievable only if such a plant installs carbon capture technology.  Following issuance of the Executive Order, EPA Administrator Scott Pruitt signed a Federal Register notice announcing EPA’s review and intent to suspend, revise, or rescind the Carbon Pollution Standards Rule as appropriate. As with the Clean Power Plan, any revision or repeal of the rule must be done through notice-and-comment rulemaking and will most likely be subject to legal challenge in the D.C. Circuit.

The Carbon Pollution Standards Rule is currently subject to challenge at the D.C. Circuit.  The Executive Order directs DOJ to notify the court of EPA’s plans and ask the court to put the challenges on hold while EPA takes action to reconsider the rule.  Late Tuesday night, DOJ filed a motion requesting that the D.C. Circuit hold its proceedings in abeyance. As with the request related to the Clean Power Plan, this request likely will draw opposition from those entities that have supported the Carbon Pollution Standards Rule.

3.  Oil and Gas Sector Methane Emission Limits

The Executive Order directs EPA to review and, as appropriate, suspend, rescind or revise a 2016 rule establishing new source performance standards limiting methane emissions from new, modified, and reconstructed sources in the oil and gas sector.  That rule covers equipment, processes, and activities in the onshore production, gathering, transmission, and storage segments of the sector, and also expands upon a 2012 regulation directed at limiting emission of volatile organic compounds (VOCs). Among other things, the rule requires performance of a rigorous protocol for leak detection and repair (LDAR) on a periodic basis.  The rule is currently being challenged in the D.C. Circuit, and the Executive Order directs DOJ to request the case be suspended pending reconsideration of the regulation.  The Order also directs EPA, “if appropriate” and “as soon as practicable,” to suspend, rescind, or revise “any rules and guidance issued pursuant to” its oil and gas methane rule.  The impact this directive will have on EPA’s voluntary Methane Challenge Program and Control Technique Guidelines for VOC emissions from the oil and gas sector—policies that were included in the Obama Administration’s Methane Strategy (which the Executive Order also rescinds, as discussed below)—is uncertain.  For more details about the oil and gas methane new source performance standards, see our VNF alert here.

The Executive Order directs the Department of the Interior to reconsider specific energy-related regulations and policies.

1.  Coal Leasing Program Review and Coal Leasing Moratorium

The Executive Order directs the Department of the Interior (DOI) to amend or withdraw Secretarial Order 3338, which called for the Bureau of Land Management (BLM) to prepare a programmatic environmental impact statement (PEIS) to analyze potential leasing and management reforms to the federal coal leasing program.  Among other topics, the PEIS was to address the process, timing, and location of leasing; whether existing bonus bid, rent, and royalty payment policies provide a fair return to the United States; and the climate change and other impacts of coal development and use. The BLM published a scoping report in January 2017 summarizing the issues raised in meetings and public comments during the scoping period that began in March 2016, and the issues, including preliminary reform options, to be considered in the PEIS.

The Executive Order further directs DOI to suspend a moratorium that the Obama Administration BLM had placed on the leasing of new coal development on federal land while the agency reconsidered the coal leasing program. Unlike some of the other actions specifically identified in the Executive Order, the coal leasing moratorium and environmental review of the coal leasing program can be suspended without going through notice-and-comment rulemaking.

Recognizing “the critical importance of the Federal coal leasing program to energy security, job creation, and proper conservation stewardship” and “finding that the public interest is not served by halting the Federal coal program for an extended time” and that a PEIS is not necessary to consider potential improvements to the program, on March 29, Secretary of the Interior Ryan Zinke issued Secretarial Order 3348 revoking Secretarial Order 3338, halting further activity on the PEIS, and reopening the coal leasing program. Simultaneously, DOI established a Royalty Policy Committee to regularly advise the Secretary on the fair market value of, and collection of revenues from, energy and mineral resource development on federal and Indian lands.

2.  Fracking Rule

The Executive Order directs DOI to review and, if appropriate and as soon as practicable, suspend, revise, or rescind BLM’s March 26, 2015 final rule entitled “Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands.”   The final rule imposed certain requirements related to well integrity, surface waste water management, and disclosure of details regarding the composition of hydraulic fracturing fluids.  The final rule had been vacated by the U.S. District Court for the District of Wyoming, but that decision is currently on appeal in the U.S. Court of Appeals for the Tenth Circuit.  Wyoming v. Jewell, No. 15-8134 (10th Cir. filed June 24, 2016).  The Executive Order directs DOJ to inform the court of this order and seek “appropriate relief,” such as requesting that the case be suspended or otherwise stayed pending DOI’s reconsideration of the regulation.

3.  Waste Prevention Rule

The Executive Order directs DOI to review and, if appropriate, suspend, revise, or rescind BLM’s final rule on the prevention of waste of natural gas from venting and flaring.  On November 18, 2016, BLM issued a final rule, entitled “Waste Prevention, Production Subject to Royalties, and Resource Conservation,” intended to reduce natural gas waste and air pollution resulting from onshore flaring, venting, and leaks by oil and gas production on federal and tribal lands, and to provide a beneficial return on public resources for states, tribes, and federal taxpayers.  The final rule, among other things, prohibits the venting of natural gas except in limited circumstances; requires operators to capture most of their gas after accounting for specified volumes of allowed flaring; and imposes rigorous LDAR protocols for limiting equipment leaks.   The final rule took effect January 17, 2017, after an unsuccessful attempt by several states and industry groups to enjoin implementation of the rule in federal court in Wyoming.   Western Energy Alliance et al. v. Jewell, No. 2:16-cv-00280 (D.Wyo. filed Nov. 15, 2016).  However, litigation concerning the final rule is ongoing, and the Executive Order directs DOJ to seek appropriate relief from the court, such as requesting the case be suspended pending reconsideration of the regulation, which the agency had already done.

Additionally, the House of Representatives has passed, but the Senate has not yet taken up, a joint resolution of disapproval under the Congressional Review Act that would rescind this rule and limit BLM’s authority to issue a substantially similar regulation in the future.

4.  Non-Federal Oil and Gas Rights Rules

The Executive Order calls for DOI to review and, as appropriate, suspend, rescind or revise two final rules related to non-federal oil and gas rights on National Park Service (NPS)-managed lands and Fish and Wildlife Service (FWS)-managed refuges.

The first rule, issued by NPS on November 4, 2016, and entitled “General Provisions and Non-Federal Oil and Gas Rights,” updated the regulations (called the “9B regulations”) that govern private and state-owned oil and gas rights in the National Park System, which had not been updated since being promulgated more than 37 years ago.  The final rule, which took effect December 5, 2016, eliminated provisions that previously exempted more than 300 oil and gas operations and requires all operators, except those in Alaska, to comply with the 9B regulations.  The final rule also eliminated the cap on financial assurances, and strengthened enforcement authority by incorporating existing NPS penalty provisions.

The second rule, issued by FWS on November 14, 2016, and entitled “Management of Non-Federal Oil and Gas Rights,” updated the regulations governing the exercise of non-Federal mineral rights located outside of Alaska within the National Wildlife Refuge System (NWRS), which had not been updated since being promulgated more than 50 years ago.  The final rule, which took effect December 14, 2016, instituted a permitting process for new operations; requirements related to well-plugging and reclamation; operating standards; and provisions for fees, financial assurances, and penalties.

Resolutions of disapproval have been introduced in the House of Representatives that would rescind both of these rules under the Congressional Review Act.

The Executive Order directs federal agencies to review regulations that burden domestic energy development.

In addition to directing review of specifically-identified regulations and policies at EPA and DOI, the Executive Order directs all “executive departments and agencies” to review and report on “all existing regulations, orders, guidance documents, policies, and any other similar agency actions” that “necessarily obstruct, delay, curtail, or otherwise impose significant costs on the siting, permitting, production, utilization, transmission, or delivery of” domestic energy resources.  The Executive Order directs agencies to pay “particular attention to oil, natural gas, coal, and nuclear energy resources”; it does not specifically mention renewable energy.  “Executive department and agency” is not defined, and the application of this requirement to independent agencies is not clear.

Specifically, each agency is directed to submit a plan outlining how it will conduct its review to the Office of Management and Budget (OMB) within 45 days.  Draft reports detailing the actions reviewed and including recommendations to address the burdens those actions impose on domestic energy production are due to OMB within 120 days, and final reports are due within 180 days.  Identified regulations that are rescinded can be used by the agency to comply with the President’s Regulatory Review Executive Order (for details on this order see our alert, here).

The Secretary of the Interior already has issued Secretarial Order 3349 commencing DOI’s review, requiring DOI bureaus and offices to submit reports within 21 days identifying regulations, orders, guidance documents, policies, and any other similar agency actions that burden energy development.  DOI has further committed to developing a department -wide plan within 35 days.

The Executive Order directs the Council on Environmental Quality to rescind guidance incorporating climate change into environmental reviews.

The Executive Order directs the Council on Environmental Quality (CEQ) to rescind its final guidance encouraging federal agencies to consider impacts from greenhouse gas emissions and climate change in environmental reviews pursuant to the National Environmental Policy Act (NEPA).  The final guidance, issued August 5, 2016, characterized climate change as a “fundamental environmental issue” and recommended that federal agencies consider the potential effects of a proposed action and related activities on climate change, using reasonably foreseeable, direct and indirect greenhouse gas emissions as a “proxy” for assessing impacts.  Although not binding or otherwise legally enforceable, federal agencies typically strive for compliance with NEPA guidance documents, and courts may afford greater weight to interpretations and guidance issued by CEQ.

This guidance can be revoked without having to go through notice or comment or other administrative procedures.  However, the Executive Order does not preclude federal agencies from continuing to consider the impacts of federal action on climate change in order to mitigate litigation risk when conducting environmental reviews.

The Executive Order rescinds the Interagency Social Cost of Carbon Guidance.

The social cost of carbon is a metric for quantifying the costs of greenhouse gas emissions and the benefits of policies that reduce greenhouse gas emissions.

The Obama Administration convened an Interagency Working Group, led by OMB, to implement a uniform range of values for agencies to use when quantifying impacts of carbon dioxide emissions and emission reductions—the “Social Cost of Carbon for Regulatory Impact Analysis” (SCC).  Similar guidance documents have been developed for two other greenhouse gases: methane, and nitrous oxide.  The SCC has largely been used to comply with executive orders requiring agencies to analyze impacts of regulations.  In some instances, agencies have used the SCC to set the stringency of regulatory actions in order to comply with statutory obligations.

The Executive Order disbands that Working Group and rescinds the uniform SCC guidance and related documents.  Based on court precedent, at least some agencies will likely still be required to consider the quantified benefits of greenhouse gas reduction in their rulemakings. See Ctr. for Biological Diversity v. NHTSA, 538 F.3d 1172 (9th Cir. 2008); High Country Conservation Advocates v. U.S. Forest Serv., 52 F. Supp. 3d 1174 (D.Colo. 2014).

The Executive Order directs agencies to instead rely on long-standing cost-benefit analysis guidance outlined in OMB Circular A-4 when quantifying the costs of greenhouse gas emissions or benefits of greenhouse gas emission reductions.  Whereas the cost ranges required under the interagency SCC guidance included the impacts of greenhouse gas emissions on a global basis, OMB Circular A-4 directs agencies to primarily evaluate a rule’s costs and benefits only as they impact the United States.  This different direction, along with a number of other important technical changes, will likely result in agencies attributing much lower monetized benefits to actions that reduce greenhouse gases, if such quantification is performed at all.

The Executive Order revokes certain other energy- and climate change-related executive orders, presidential memoranda, and frameworks.

The Executive Order directly revokes the following four executive orders and presidential memoranda signed by President Obama related to energy and climate change.

First, the Presidential Memorandum on Mitigating Impacts on Natural Resources from Development and Encouraging Related Private Investment directed agencies to more fully develop and implement requirements for the mitigation of adverse impacts from development and other activities on land, water, wildlife, and other ecological resources. Among other things, the memorandum established a mitigation hierarchy (avoid, minimize, then compensate); set a “net benefit goal” or, at a minimum, a no net loss goal for natural resources; emphasized large-scale or landscape-level planning and mitigation; and directed a number of agencies to take certain, specified actions to strengthen mitigation policies.  As noted above, following the Executive Order, the Secretary of the Interior issued Secretarial Order 3349 which, in part, revokes Secretarial Order 3330, “Improving Mitigation Policies and Practices of the Department of the Interior,” dated October 13, 2013, and directs a review of all actions taken pursuant to that order and the revoked Presidential Memorandum for possible reconsideration, modification, or rescission. This review will include the U.S. Fish and Wildlife Service’s recent Mitigation Policy, dated November 21, 2016, and Endangered Species Act Compensatory Mitigation Policy, dated December 27, 2016.

Second, the Presidential Memorandum on Power Sector Carbon Pollution Standards directed EPA to conduct a rulemaking to regulate greenhouse gas emissions from the power sector.  Rescinding this is consistent with the Executive Order’s direction to suspend, rescind or revise the Clean Power Plan and Carbon Pollution Standards Rule.  It also leaves open the possibility that EPA will only repeal, but not replace, these two rules.

Third, the Presidential Memorandum on Climate Change and National Security established a framework and directed agencies to take actions to ensure that climate change-related impacts are fully considered in the development of national security doctrine, policies, and plans.

Fourth, Executive Order 13653 (Preparing the United States for the Impacts of Climate Change) directed federal agencies to take steps to prepare for climate change impacts and to support state and local resilience efforts, and established a State, Local, and Tribal Leaders Task Force on Climate Preparedness and Resilience.

The Executive Order also rescinds the Obama Administration’s Climate Action Plan, which identified addressing climate change as a priority and established a framework for doing so across federal agencies, and the Obama Administration’s Methane Strategy, a framework for addressing emissions of methane across a number of federal agency programs.  Rescinding these documents will have no independent legal effect and can be done with no further process.

The Executive Order directs agencies to review and, as appropriate, suspend, rescind, or revise regulations, orders, guidance documents, policies, and any other similar agency actions made in furtherance of these executive orders, presidential memoranda, and frameworks.  Such actions may require notice-and-comment rulemaking.  As noted above, DOI already has initiated its review, requiring that departments identify all such actions issued pursuant to them or currently under development within 14 days, identify actions that should be reconsidered, rescinded, or revised within 30 days, and submit to the Deputy Secretary draft revised or substitute actions within 90 days.

The Roads Not Taken

Finally, the Executive Order is notable for two actions that it does not take.

It does not direct reconsideration of, or even discuss, EPA’s 2009 finding that greenhouse gas emissions cause air pollution which endangers public health and welfare (the “endangerment finding”).  This finding was made under the Clean Air Act in response to the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007) (holding that greenhouse gases are an “air pollutant” under the Clean Air Act) and upheld by the D.C. Circuit, Coalition for Responsible Regulation v. EPA, 684 F. 3d 102 (D.C. Cir. 2012).  The endangerment finding serves as the necessary factual and legal predicate authorizing EPA to adopt greenhouse gas regulations under the Clean Air Act.  Doing so would have called into question not only EPA’s energy-related greenhouse gas regulations targeted for repeal or revision by the Executive Order, but also regulations under Clean Air Act section 202 limiting greenhouse gas emissions from passenger cars and trucks, and heavy duty vehicles and its requirement that large new and modified stationary sources install the best available control technology to limit greenhouse gas emissions pursuant to the Clean Air Act Prevention of Significant Deterioration program.

Second, the Executive Order does not direct the State Department to withdraw the United States from the Paris Agreement or otherwise mention that agreement.  However, this silence cannot be interpreted to mean that the United States will remain and continue to participate in the Paris Agreement in the manner set forth by the Obama Administration.  For example, if the Trump Administration reverses or significantly revises the policies targeted by the Executive Order, it will be difficult, if not impossible, to achieve the level of emission reductions that correspond to the U.S. pledge under the Paris Agreement.  This pledge—referred to as the U.S. “Nationally Determined Contribution” (NDC)—is a 26 percent reduction in greenhouse gas emissions below 2005 levels by 2025, and requires periodic updating of the greenhouse gas emissions reductions pledged under the NDC to assure the achievement of the Paris Agreement’s goals.  Accordingly, the Executive Order might presage a future action by the Trump Administration either to withdraw from the Paris Agreement or to submit a revised NDC with a significantly lower greenhouse gas reduction pledge.

The Executive Order calls for a large number of specific actions from a wide variety of agencies.  How agencies go about implementing those actions and the outcome of the inevitable legal challenges to those actions remains to be seen.

ARTICLE BY Kyle W. Danish, Stephen C. Fotis, Tyson C. Kade, Frances Bishop Morris, Jonathan D. Simon & Avi B. Zevin of Van Ness Feldman LLP

© 2017 Van Ness Feldman LLP