In this month’s Pennsylvania Law Weekly column, I discuss the incentives and legal risks for green building in Pennsylvania.
Co-authored with Ana Montalban of Greenberg Traurig’s Public Finance practice, the article gives an overview of the U.S. Environmental Protection Agency’s proposed Clean Power Plan as well as some of the ways in which Pennsylvania has already positioned itself as a leader in green development and emissions reduction incentives. The article highlights certain challenges and uncertainties clients should be aware of as they prepare to take advantage of the development-friendly environment created by the Clean Power Plan.
To read Incentives and Legal Risks for Green Building in Pennsylvania, click here.
Last week, EPA issued guidance to its Regional Administrators that addresses some of the questions raised by the decision in Utility Air Regulatory Group v. United States Environmental Protection Agency, 134 S.Ct. 2427 (U.S. June 23, 2014) (“UARG”). As discussed in our posts of June 23rd and July 14th, that decision raised several issues that must be clarified, including how to treat requirements in states that have adopted the Tailoring Rule approach and how to apply the prevention of significant deterioration (“PSD”) permitting provisions to modifications of major sources of emissions.
For example, several states have adopted EPA’s Tailoring Rule approach into their state implementation plans (“SIPS’) and EPA has approved many of those SIP provisions. Although EPA notes that it will no longer apply or enforce federal provisions, including EPA approved SIP provisions, that require a source to obtain permits if GHGs are the only pollutant involved. Many state level requirements, however, remain in effect until further actions are taken and may trigger permitting requirements under state law despite the UARG decision.
In light of this, EPA noted the need for Regional personnel to confer with local, state, and tribal permitting authorities and with applicants to explore plans to respond to the UARG decision. The document notes that while some state laws might automatically be modified based on the Supreme Court decision, EPA does not read the UARG decision as precluding states that have adopted GHG permit requirements into their SIPs from retaining those requirements. This makes it critical for facilities undergoing any permitting actions now, or in the near future, to coordinate closely with state, local, and tribal agencies and with EPA.
In addition, EPA has always recognized the PSD permitting program should not be triggered by de minimis increases in emissions of PSD pollutants, and it developed significance levels for purposes of determining when net emissions increases are more than de minimis. The Court in UARG expressly stated EPA may require “anyway sources” to comply with GHG BACT “only if the source emits more than a de minimis amount” of GHGs. The Court noted the 75,000 tons per year (“TPY”) threshold of the Tailoring Rule might be considered a de minimis threshold if EPA justifies that level.
In the July 24th guidance memorandum, EPA states that it intends to continue applying BACT to GHG at “anyway sources” and, pending further developments, to process PSD permit applications for “anyway sources” using a 75,000 tpy C02e (and greater than zero on a mass basis) threshold to determine whether a permit must include a BACT limitation for greenhouse gases.
In February 2012, Pennsylvania adopted comprehensive revisions to its Oil and Gas Act known as “Act 13.” Among the changes was an expanded preemption of local regulation of oil and gas activities. Prior law prohibited municipalities from regulating “how” oil and gas development would proceed, but permitted zoning control over “where” development could occur. Act 13 imposed a uniform set of rules for local ordinances governing oil and gas. It also provided that the Public Utility Commission would decide in the first instance whether a local ordinance complied. Municipalities with non-complying ordinances would not share in fees paid by natural gas developers.
In December 2013, the Supreme Court invalidates that super-preemption as a violation of the Environmental Rights Amendment to the Pennsylvania Constitution. Robinson Twp. v. Pa. Pub. Util. Comm’n, 83 A.3d 901 (Pa. 2013). That left open the question whether the PUC would continue to have the power to review ordinances.
Today, the Commonwealth Court on remand held that the PUC review provisions were inextricably bound up with the unconstitutional preemption provisions, and so were not severable. They are invalid as well.
This leaves us back at “where-not-how” preemption and conventional judicial review of local ordinances in court. While the PUC could opine on ordinances before they were enforced or even enacted, judicial review requires final action in most cases.
The Commonwealth Court’s opinions are here.
A trial court in Albany, New York has landed another blow against high-volume hydraulic fracturing (“HVHF”) in New York by tossing two lawsuits (decisions available here and here) brought by property owners and a bankrupt operator challenging New York’s failure to complete its environmental review of high-volume hydraulic fracturing in a timely manner. This comes a little more than a week after New York’s highest court upheld the right of local governments to use land use laws to restrict or ban HVHF within their jurisdiction.
The industry and property owner challenge was brought pursuant to New York’s Little NEPA, known as the New York State Environmental Quality Review Act, or SEQRA. Citing a well-established line of case law, the court found that the petitioners lack standing to bring the action because they did not allege an injury that fell within the “zone of interest” of SEQRA. Specifically, the court held that challenges under SEQRA had to allege an injury that was environmental, and not solely economic in nature. Here, the industry and property owners clearly alleged economic and not environmental injury. While the court observed that application of the rule in this instance might very well lead to the State’s inaction to remain unchallenged, the court found that it was constrained by applicable case law.
At first blush it would appear that this decision would provide government agencies wide (and judicially unreviewable) latitude to delay action on a permit application or other request for governmental action subject to an environmental review under SEQRA. However, there are instances in the SEQRA case law where courts have found an unreasonable delay in completion of the SEQRA review process improper. The somewhat anomalous result in these HVHF challenges may be explained by the pleading strategy of the petitioners in this specific case, which sought relief solely for alleged violations of New York’s environmental review statute. Had petitioners consisted solely of persons or entities that applied for drilling permits and who pleaded their challenge as an alleged failure to timely process a permit under the State’s Oil, Gas and Solution Mining Law the result, at least as to standing, would likely have been different.
As Michael Cooke noted in his post the following day, on June 3 EPA proposed its “Clean Power Plan” that EPA estimates would, if adopted and implemented, cut greenhouse gas emissions from existing electricity generating units by 30% from 2005 levels. 79 Fed. Reg. 34,829 (June 18, 2014). A few weeks later, as Mike again noted, the Supreme Court decided that EPA could impose technology-based GHG emission controls on new or modified emission sources, provided that the trigger for new source review came from new emissions of some other pollutant. Utility Air Regulatory Group v. United States Environmental Protection Agency, 82 U.S.L.W. 4535 (U.S. June 23, 2014).
The uncertainty and upheaval in greenhouse gas regulation has caused some to focus on the opportunities to advocate for more favorable rulemaking or to litigate the regulators’ authority to impose obligations at all. However, if you think about it, any pervasive GHG regulation has to create winners and losers. Some businesses are going to be able to capitalize on these changes. Lawyers should not forget the unglamorous and apolitical role of advising clients on how to do as well as possible under the new rules. That is the subject of my column this month in Pennsylvania Law Weekly. Read Carbon Emissions, the Supreme Court, and Business Opportunity, 37 Pa. L. Weekly 650 (July 15, 2014), by clicking here.
This post follows up on today’s earlier post on the New York Court of Appeals’ decision in Wallach v. Dryden and Cooperstown Holstein Corp. v. Middlefield.
In a 5-2 vote, New York’s highest court – the Court of Appeals – upheld the power of local governments to ban, through adoption of local laws, high-volume hydraulic fracturing. The Court made its ruling in the face of broad statutory language in New York’s Oil, Gas and Solution Mining Law (OGSML) that preempts “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries.” The Court relied heavily on its 1987 decision in Matter of Frew Run Gravel Products v. Town of Carroll, 71 N.Y.2d 126 (1987), in which the court, interpreting a preemption provision contained in the State’s mining law, drew a distinction between laws regulating how mining is conducted versus laws regulating where the activity could take place. The court found that the seemingly broad language contained in the OGMSL preemption provision only spoke to laws regulating “the actual operations of the oil and gas industries.” The Court thus rejected the Industry Appellants’ main argument that a ban does constitute the regulation of actual operations. The court found that, while local zoning bans would “undeniably have impact on the oil and gas enterprises,” the bans at issue regulated land use in general and did not attempt to regulate the details, procedures and operations of the oil and gas industries. The court drew heavily on its view that the regulation of local land use is “one of the core powers of local governance.”
The New York Court of Appeals has just released its decision upholding the right of local governments to enact bans on high volume hydraulic fracturing. The court held that the State’s Oil, Gas and Solution Mining Law “does not preempt the home rule authority vested in municipalities to regulate land use.” The decision can be found here.
The Massachusetts Department of Environmental Protection (MassDEP) recently finalized a substantial overhaul of its contaminated site cleanup regulations, the Massachusetts Contingency Plan (MCP), 310 CMR 40.0000. These revisions significantly modify the regulatory process for reporting and remediating contaminated properties in Massachusetts.
Initially promulgated in 1988, the MCP has evolved considerably in the intervening 25 years. Earlier amendments to the MCP incorporated ground-breaking regulatory approaches such as the use of Licensed Site Professionals (LSPs) to oversee response actions and risk-based closure standards. While not without its faults, the MCP has been generally viewed as a successful regulatory program that facilitated Brownfields redevelopment in Massachusetts.
To its credit, MassDEP recognized that there was still room for improvement. Based on public input first solicited in March, 2012, MassDEP targeted five reform objectives: (i) eliminate unnecessary permits; (ii) streamline the site classification and deed restriction procedures; (iii) facilitate site closure; (iv) improve disclosure of site closure conditions; and (v) update reporting and remediation standards. The resulting revisions to the MCP including the following points, (which roughly follow the order a site proceeds through the MCP – reporting, remediation, and closure):
- Changes to Standards. Both the Reportable Concentrations (which trigger the obligation to report a release) and the Method 1 Standards (which are the non-site-specific closure standards) have been updated. For some contaminants (e.g., TCE, lead and PCBs), these standards have become more stringent, and for others (e.g., other heavy metals), these standards have become less stringent.
- Tier Classification. MassDEP has simplified the ranking system used to indicate the risks posed by a reported release. Previously, higher risk sites (designated as Tier I) were required to obtain a permit from the Bureau of Waste Site Cleanup – that requirement has been dropped. In addition, the numerical scoring system used to rank sites has been replaced with a list of four criteria – sites that meet any one of those four criteria trigger a Tier I ranking.
- Timelines. Except in the case of an Imminent Hazard condition or other releases triggering Immediate Response Actions, the MCP provides a fair degree of flexibility for responding to releases and moving a site through the MCP “system.” However, the MCP does impose timelines for completing various phases of the cleanup. The revisions extend several of the MCP’s interim timelines, but sites must still achieve a Permanent or Temporary Solution within six years after reporting of the release.
- Historic Fill. The revised MCP further clarifies when contamination associated with fill does not require remediation – an important issue for many urban Brownfield sites. To qualify as Historic Fill, the fill must have been placed before 1983 (when M.G.L. c. 21E was enacted), and must meet six other criteria regarding its origin. If the fill meets the definition of Historic Fill, it will now be considered a “background” condition that does not require remediation.
- Activity and Use Limitations (AULs). These deed restrictions allow for a risk-based site closure, by eliminating uses or activities inconsistent with the remediation outcome (e.g., no residential use at sites remediated to industrial use standards). The good news is that MassDEP has eliminated unnecessary paperwork associated with AULs (the so-called AUL Opinions prepared by LSPs, which were previously recorded with an AUL). The bad news is that MassDEP must now be notified whenever a property subject to an AUL is sold.
- Non-Aqueous Phase Liquids (NAPL). NAPL is a condition associated with petroleum releases and results from the presence of petroleum as a separate phase liquid. Previously, the presence of more than 0.5 inches of NAPL constituted an exceedance of an Upper Concentration Limit, which categorically precluded a Permanent Solution closure. The revised MCP removes this NAPL Upper Concentration Limit to allow for a Permanent Solution closure for NAPL sites, assuming certain performance standards concerning contaminant mobility and source control/elimination are met.
- Source Control. Eliminating or controlling contaminant sources is one of the key performance standards for site closure under the MCP. MassDEP has added additional details to that performance standard, primarily directed to sites with releases of volatile organic compounds (VOCs) that can contribute to indoor air impacts.
- Site Closure. Under the MCP, releases that achieve a Condition of No Significant Risk to current and future foreseeable uses qualify for a Permanent Solution, while releases that present a Condition of No Significant Risk to current uses only qualify for a Temporary Solution (and remain subject to several continuing obligations). Previously, Permanent Solutions were classified as one of six Class A or Class B Response Action Outcomes, and Temporary Solutions were classified as one of two Class C Response Action Outcomes. The revised MCP has replaced the eight classes of Class A, B and C Response Action Outcomes with three regulatory endpoints: Permanent Solutions with No Conditions, Permanent Solutions with Conditions and Temporary Solutions. Permanent Solutions with Conditions apply to sites relying on AULs to eliminate future risks, undeveloped sites where residual groundwater contamination may present indoor air risks to future buildings, sites contaminated with Historic Fill, sites with elevated contamination under roadways or railroads, and sites with residual contamination where best management practices are required to minimize risks from gardening. Temporary Solutions remain subject to certain continuing obligations (e.g., five-year reviews) until the release achieves a Condition of No Significant Risk for current and future foreseeable uses.
- Vapor Intrusion (VI). The MCP’s approach to controlling the migration of VOC contaminants from soil or groundwater into indoor air continues to evolve. MassDEP has revised the MCP to acknowledge the role that sub-slab depressurization systems (SSDS) can play in mitigating VOC impacts to indoor air. Site where SSDS have been employed to eliminate a VOC exposure pathway to indoor air now qualify for a Permanent Solution with Conditions – Permanent Solutions for such sites were not previously allowed. Of course, there is a catch: the Permanent Solution conditions will include obtaining a separate permit, addressing financial assurance requirements, using remote telemetry to monitor the SSDS, and complying with notification and certification requirements.
These revisions went into effect on June 20, 2014. MassDEP is in the process of preparing guidance documents to address various aspects of these revisions, which it will publish in the coming months.
How these regulatory revisions may affect particular contaminated properties in Massachusetts varies significantly, depending on that site’s regulatory status and current or future uses. Parties currently engaged in site remediation, Brownfield redevelopment, or looking to buy or sell contaminated property in Massachusetts should confer with their environmental advisors to evaluate how the revised MCP may affect their projects and transactions.
Written by Steven C. Russo and Robert M. Rosenthal
On June 19th, the New York Legislature passed the Community Risk and Resiliency Act in both houses by wide margins. The Act would likely be submitted to the Governor in the next two months for signature. The Act has a laudable goal, to seek to encourage advance planning for extreme weather events and to promote the consideration of climate change effects when state agencies fund projects or issue permits. It mandates agency consideration of climate change risks, including sea level rise, storm surges, and flooding, in connection with certain specified state agency funding and permitting decisions. For example, the Act would inject consideration of climate change adaptation into the green infrastructure programs administered by the New York State Department of Environmental Conservation (“NYSDEC”), including the Clean Water and Drinking Water Revolving Fund programs and the Environmental Protection Fund. The Act would also require NYSDEC to consider climate change impacts in the context of major permits issued under the Uniform Procedures Act, which encompasses most major environmental permits sought by applicants, including Clean Water Act SPDES permits, RCRA treatment, storage and disposal siting permits, and Clean Air Act permits. The requirement to consider climate adaptation would also apply in connection with any funding or permit decisions that require a review under the New York State Smart Growth Infrastructure Act, which applies to a number of state agencies, including NYSDEC, the New York State Department of Transportation, the Thruway Authority and the Dormitory Authority of the State of New York.
In addition, the Act requires NYSDEC and the Department of State (“DOS”) to work together in preparing model local laws concerning climate risk and to make such model laws available to municipalities. The Act also requires the DOS and DEC to develop additional guidance on the use of resiliency measures that utilize natural resources and natural processes to reduce risk, and to adopt regulations establishing science-based state sea level rise projections by January 1, 2016.
The original bill was prompted by above-average temperatures and extreme storms such as Superstorm Sandy and Hurricanes Irene and Lee. Projections anticipate that the sea level rise will exceed the global average, which could result in a significant increase in the number of coastal flood events in the northeast. However, in a number of instances the studies required by this now passed bill would merely codify an analysis that is typically already undertaken pursuant to existing agency policy or the requirements of SEQRA. For example, NYSDEC already considers climate change adaptation as part of its funding and permitting actions, both pursuant to the New York State Environmental Quality Review Act and pursuant to the NYSDEC’s Commissioner’s Policy on Climate Change (CP-49). Thus, from the perspective of NYSDEC, the bill, if signed into law by the Governor, would merely convert an already-administered agency policy into a mandate required by statute. By contrast, the bill’s greatest impact would be felt by those state agencies that do not currently require consideration of climate change adaptation in the context of their funding and permitting decisions.
In a split decision, the U. S. Supreme Court ruled on Monday June 23rd that the U.S. Environmental Protection Agency (“EPA”) does not have authority under the federal Clean Air Act to require major source permits based solely on emissions of greenhouse gases. Specifically, the Court said that the agency may not treat greenhouse gases as a pollutant for purposes of defining a “major emitting facility” (or a “modification” thereof) in the context of prevention of significant deterioration (“PSD”) permits for major sources of emissions or for purposes of defining a “major source” in the operating permit (Title V) context. The Court ruled, however, that EPA may continue to treat greenhouse gases as a “pollutant subject to regulation under this chapter” for purposes of requiring BACT for so-called “anyway” sources (i.e., sources that are subject to PSD permitting due to their emissions of other pollutants). Justice Scalia wrote the opinion for the Court. There were a number of concurring and dissenting opinions as to various parts.