EPA To Exercise Enforcement Discretion on Boiler MACT Deadlines

From Michael Cooke of GT Tampa:

On Wednesday, January 18th, by letter to Senator Ron Wyden of Oregon, the EPA advised that it would exercise enforcement discretion with respect to the 2011 notification deadlines for existing boilers and incinerators that have passed while the EPA’s administrative stay of its March 2011 new rules has been pending. This step is being taken due to the January 9, 2012, decision of U.S. District Court Judge Paul Friedman which vacated the administrative stay, a decision I discussed in my previous post. After analyzing the court’s decision, EPA has stated that it will issue a “no action assurance letter” shortly that informs sources it will not enforce any of the notification requirements for new or existing boilers that arise under the 2011 rule.   The EPA letter further states that it believes that noncompliance by existing sources with the 2011 rule “would be unlikely to warrant” civil enforcement action by third parties, but, in any event, such an action would require 60-days prior notice to EPA which would give EPA sufficient time to take further steps to address those impacts. With respect to new boilers and incinerators, the EPA concludes that there are no sources subject to requirements other than the notification obligations which now are being reconsidered. But EPA noted that, if it becomes aware of other permitting or compliance challenges for new sources as a result of the stay being vacated, EPA will issue a 90-day stay under the Clean Air Act or a longer stay under the Administrative Procedures Act (“APA”) consistent with the district court’s opinion on stays under the APA. Finally, the letter states that EPA recognizes that industry needs sufficient time to comply with these standards and that, subject to public comment, EPA intends to reset the “compliance clock” when it finalizes the rules which it reproposed last December.

Air Turbulence

From Michael Cooke of GT Tampa:

EPA and the federal courts have been busy with air issues in December and January, and the results have created substantial uncertainty for sources planning compliance efforts. These actions include two new air toxics rules for electric utilities (the “Mercury and Air Toxics Standard,” or “MATS”), issued by EPA in mid-December; a federal district court order issued in early January 2012 that vacated and remanded the “Delay Notice” EPA had issued to postpone the effectiveness of the Major Source Boiler MACT and Commercial and Industrial Solid Waste Incineration (“CISWI”) unit standards ; and an order of the U.S. Court of Appeals for the D.C. Circuit staying the effectiveness of the final Cross-State Air Pollution Rule that was issued by EPA on August 8, 2011. These actions affect a wide range of stationary air sources, including cement kilns, electric generating units, solid waste incinerators, and numerous industrial, commercial and institutional boilers. Regulated entities, understandably, are struggling to assess the impacts of them and make appropriate compliance plans. 

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Declaratory Judgments Under Superfund

Thirty years after enactment, lawyers and courts remain somewhat at sea over when declaratory judgments must be granted under the federal Superfund statute, when they may be granted, and when they should not be granted.  Beginning from the Court of Appeals for the Second Circuit's December 19 decision in New York v. Solvent Chemical Co., No. 10-1026-cv(L), in this month's column in the Legal Intelligencer / Pennsylvania Law Weekly, I consider this confusing area.  Declaratory Judgments and Superfund Eyed by 2nd Circuit, 34 Pa. L. Weekly 1184 (Dec. 27, 2011).  To read the column, click here

CEQ Issues Draft Guidance to Promote Efficient NEPA Environmental Reviews

From Melissa Meirink of GT Denver:

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.

Pennsylvania Legislature Proposes Amendments to the Oil and Gas Act

In this month's Pennsylvania Law Weekly / Legal Intelligencer column, I discuss Pennsylvania Senate Bill 1100 and Pennsylvania House Bill 1950.  The bills, which implement many of the recommendations made by Pennsylvania Governor Tom Corbett's Marcellus Shale Advisory Commision, propose significant amendments to Pennsylvania's Oil and Gas Act intended to address Marcellus Shale gas development.

To read the column, click here.

U.S. Department of State to Delay Decision on Keystone XL Pipeline in Order to Assess Different Pathway Through Nebraska

From Todd Sumner of GT Tallahassee:

On November 10, 2011, the U.S. State Department announced during a press briefing that it was delaying its decision on the proposed Keystone XL oil pipeline in order to assess other pathways through Nebraska. The 1700 mile crude oil pipeline which would run from the Alberta Oil Sands region in Canada and ultimately terminate at refineries along the Texas Gulf Coast would also traverse over the shallow water Ogallala aquifer in Nebraska's Sand Hills region.

While the State Department released the final Environmental Impact Statement for the proposed oil pipeline on August 26, 2011, since that time opposition to the proposed route has expanded including Nebraska Governor Dave Heineman (R) due to the proposed route over the Ogallala aquifer. The Nebraska Governor had already called a special session of the Nebraska legislature for the crafting of pipeline siting/approval legislation that will be further vetted during the week of November 14th. The State Department is now to be looking at alternative routes of the Keystone pipeline that would avoid or minimize impacts to the Nebraska Sand Hills region. The alternative pipeline route review will be conducted as a supplemental environmental impact statement and the State Department's final decision on the proposed pipeline is estimated to conclude sometime following the 2012 presidential election.

DRBC Releases Final Draft Regulations on Natural Gas Development

From Adam Silverman of GT Philadelphia:

This week, the Delaware River Basin Commission (“DRBC”) released its final draft natural gas development regulations in anticipation of a final vote on whether the DRBC will adopt the regulations. The vote is scheduled for November 21, 2001. There is some reason to believe that the Commission vote may not be unanimous, which would be a rare occurrence. If adopted, the regulations will end a moratorium imposed on drilling for natural gas within the Delaware River watershed, which supplies water to Philadelphia and New York City. Since first introducing draft regulations in 2010, the DRBC received nearly 70,000 comments from the public, some of which were reportedly incorporated into subsequent drafts of the regulations. 

The final draft regulations would permit the drilling of 300 wells within the watershed, provide setback requirements, and increase financial assurance requirements to, in certain cases, $5MM per well up to $25MM for multiple-well sites. State regulations will determine the construction and operation of individual wells and pads but water sources for well pads require approval by the DRBC. The regulations also limit the discharge and storage of wastewater and fracking fluid within the watershed. The DRBC plans to reassess the regulations after 18 months. 

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Recurring Issues With NSR and PSD Enforcement

In this month's Pennsylvania Law Weekly / Legal Intelligencer column, I discuss United States v. EME Homer City Generation, No. 11-19 (W.D. Pa. Oct. 12, 2011), and Jackson v. EME Homer City Generation, No. 11-28 (W.D. Pa. Oct 13, 2011), and the recurring issues related to the enforcement of the Clean Air Act's new source review (NSR) and prevention of significant deterioration (PSD) programs.

To read the article, click here.

10th Circuit Upholds Sharp Restrictions of Clinton-Era Roadless Rule in Forests

From Jeffrey Collier of GT West Palm Beach:

On October 21st, the U.S. Forest Service and environmental advocates successfully defended the Clinton administration's Roadless Area Conservation Rule ("Roadless Rule"), winning a decision by the U.S. Court of Appeals for the 10th Circuit requiring a district court to vacate its nationwide injunction against the rule.  See Wyoming v. U.S. Dep't of Agriculture (USDA), No. 09-8075 (10th Cir. Oct. 21, 2011).

The state of Wyoming, with support from the Colorado Mining Association, had won a decision in the U.S. District Court for the District of Wyoming on claims that the Roadless Rule violated the Wilderness Act and the National Environmental Policy Act ("NEPA") by creating de facto wilderness areas and by doing so without following NEPA procedural requirements.  The Roadless Rule eliminated prospects for almost any road construction on about 58.5 million acres of federal land.

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Pennsylvania DEP Issues Draft Guidance on the Aggregation of Air Sources

As mentioned earlier, I recently dedicated my monthly column for the The Legal Intelligencer/Pennsylvania Law Weekly to an examination of two Pennsylvania Environmental Hearing Board appeals which address aggregation of air emission sources under the Clean Air Act and the Pennsylvania Air Pollution Control Act. 

This week the Pennsylvania Department of Environmental Protection (PADEP) has issued draft technical guidance on this issue.  PADEP's draft guidance addresses how to determine when two operations in the oil and gas business constitute a single "source" for purposes of regulation under the federal and state air statutes.  Sources that emit more than a threshold amount of a pollutant (typically 250 tons/year for each pollutant) are subject to a somewhat onerous permitting requirement before being constructed or modified (that is, nonattainment new source review or Prevention of Significant Deterioration new  source review). 

The draft guidance interprets longstanding (but confusing) federal requirements that apply a three part test:  two well pads, compressor stations, or processing plants constitute a single "source" if (a) they are in the same industry, (b) they are under common control, and (c) they are "contiguous" or "adjacent."  The PADEP guidance focuses (properly) on whether two facilities in the natural gas industry under control of the same or  related entities are "contiguous" or "adjacent."  PADEP will not generally "daisy chain" facilities along a gathering system, nor will it allow the pipelines to establish contiguity.  It will consider surface facilities as a single source if they are within a quarter-mile and more distant facilities as a single source on a case-by-case basis.

De Novo Review in the Pennsylvania Environmental Hearing Board

In this month's Pennsylvania Law Weekly / Legal Intelligencer column, Sabrina Mizrachi and I consider the recent Pennsylvania Environmental Hearing Board (EHB) decision, Consol Pennsylvania Co. v. Department of Environmental Protection, EHB Docket No. 2010-030-R (Pa. Env. Hrg. Bd. Aug 26, 2011).  We use Chief Judge Thomas W. Renwand's opinion as a chance to review the sometimes confusing jurisdictional and procedural principles of the EHB.

To read the article, click here.

Governor Corbett Outlines Plan for New Standards, Fees on Shale Drilling

Pennsylvania Governor Tom Corbett announced that he will present a plan to the General Assembly that will implement numerous recommendations proposed by the Marcellus Shale Advisory Commission (Commission), including an impact fee on wells and more rigorous standards on hydraulic fracturing.  The impact fee would subject each well to a fee of up to $40,000 in the first year, $30,000 in the second, $20,000 in the third, and $10,000 in the fourth through tenth year, adding up to a potential $160,000 per well.  Seventy-five percent of the revenues collected from these fees would be distributed to the counties and municipalities in which drilling is taking place, with the vast majority of the remainder going to the Pennsylvania Department of Transportation for infrastructure and maintenance of roads in those same counties.

The proposed standards would increase well setback distances from wells and waterbodies, increase penalties and bond requirements, and expand gas operators' "presumed liability" for impairing water quality from 1,000 to 2,500.

Governor Corbett created the Commission by Executive Order in March in order to create a plan for developing the Marcellus Shale responsibly, and on July 22 the Commission issued its final report, which included 96 policy recommendations.

New York Issues Draft Fracking Regulations for Public Comment

In July, the New York State Department of Environmental Conservation ("NYSDEC") released its draft Supplemental Generic Environmental Impact Statement ("SGEIS") on horizontal drilling.  As we explained in more detail earlier, the draft SGEIS included draft regulations, which would impose "rigorous and effective controls" on hydraulic fracturing.  In September, NYSDEC supplemented its SGEIS, adding mitigation measures addressing socioeconomic, community character, visual, noise and transportation impacts.

NYSDEC has now issued its draft regulations, which are the same as those released in July, for public comment.  The public comment period will conclude December 12, and four public hearings are being held in November in Dansville, Binghamton, Sheldrake and New York City.

EPA Adopts Plan to Address Environmental Justice Issues

From Samantha Corson of GT Philadelphia:

Seventeen years after President Clinton issued an Executive Order on the issue, The United State Environmental Protection Agency ("EPA") has returned to the issue of environmental justice with the adoption of Plan EJ 2014.  Environmental justice is the moniker used to describe efforts to consider whether exposure to environmental risks are distributed evenly throughout society (and in particular, to ensure the fair treatment of low income, minority and indigenous populations).  Through Plan EJ 2014, EPA intends to take community characteristics and demographics into account in its regulatory decision-making.

EPA takes pains to underscore that Plan EJ 2014 is not a rule or guidance document, but instead is a "strategy" to integrate environmental justice into EPA's activities.  The vast majority of Plan EJ 2014 summarizes implementation plans for five "Cross-Agency Focus Areas" and four "Tools Development Areas."  The Cross-Agency Focus Areas include strategies to incorporate environmental justice concerns into rulemaking, permitting, compliance and enforcement, support for community-based action groups and fostering administration-wide action on environmental justice.  Plan EJ 2014 also explores scientific, legal, information management and financial "tools" that can be developed or refined to support EPA's efforts to evaluate and address environmental and health inequities among overburdened communities.  Plan EJ 2014 concludes with a discussion of EPA's intention to support existing EPA programs that pursue environmental justice goals and the EPA's intention to improve its civil rights program.

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President Obama Returns Ozone Rule to EPA

From Julie Kendig of GT Orlando:

On Friday, September 2, 2011, Cass Sunstein, of the Executive Office of the President, Office of Management and Budget, returned the draft final rule, "Reconsideration of the 2008 Ozone Primary and Secondary National Ambient Air Quality Standards," to EPA with the statement that the President does not support finalizing the rule at this time.  In his transmittal letter to EPA, Mr. Sunstein stated that the draft rule warrants reconsideration and emphasized three points.  First, EPA is required to revisit the national ambient air quality standards in 2013 and the issuance of a new rule late in 2011 would be problematic because the standards are required to be revisited shortly thereafter.   Second, the transmittal letter expressed concern that the currently proposed standards are based upon a review of scientific literature from 2006.  Updated research is being performed which could better meet the requirements of Executive Order 13563 which states that our regulatory system "must be based on the best available science."  Finally, the transmittal letter noted other recent rules promulgated by EPA to address air quality issues and quoted various executive orders regarding the regulatory system.  Mr. Sunstein also described his general directive from the President to work with agencies to minimize regulatory costs and burdens. 

Reaction to the decision to return the draft rule has been mixed.  The U.S. Chamber of Commerce's CEO Thomas Donahue issued a statement including the following: “This an enormous victory for America’s job creators, the right decision by the President, and one that will help reduce the uncertainty facing businesses. It’s also a big first step in what needs to be a broader regulatory reform effort."   The Sierra Club Executive Director and the Natural Resources Defense Counsel President, among other environmental group leaders,  have issued statements critical of the decision.