Vol. 52-1 Federal Casenote

Federal Casenote 

United States Fish and Wildlife Services et. al. v. Sierra Club, Inc.

 Background 

This case arose when the Sierra Club submitted Freedom of Information Act (FOIA) requests for records concerning consultations between the United States Environmental Protection Agency (EPA), and the U.S. Fish and Wildlife Service and National Marine Fisheries Services (together, the Services).[1] The primary document considered by the Court’s decision is a “draft biological opinion” prepared by the Services’ staff pertaining to EPA’s proposal concerning “cooling water intake structures.”[2]

Between 2011 and 2013, EPA promulgated a proposed rule regarding “cooling water intake structures” to minimize potential harm to marine animals that are protected under the Endangered Species Act (ESA).[3] The Services’ prepared a “draft biological opinion” that determined the 2013 rule would still jeopardize the animal populations at risk.[4] As such, decisionmakers at the Services’ determined that more consultation and work with the EPA was necessary to develop a sufficient proposal.[5] Following this, the EPA abandoned its initial 2013 rule and began development on a new proposed rule, which was finalized in 2014.[6] There was never an official draft or final opinion issued on EPA’s 2013 proposal.

Sierra Club sued the Services and claimed that the Services’ invocation of the deliberative process privilege was a way of shielding their draft opinions that ultimately expressed their final view on EPA’s 2013 rule.[7] The Ninth Circuit affirmed, agreeing with Sierra Club’s argument.[8] Judge Wallace dissented on the Ninth Circuit’s opining that “the drafts were part of the ongoing consultation process,” and protected by the privilege which is relevant to the Court’s decision here.[9] 

Court’s Analysis 

The Court began its analysis with the purpose of the deliberative process privilege. Specifically, the Court established that the deliberative process privilege exists to encourage candid discussions between agencies, resulting in an improved decision-making process, and to prevent agencies from operating under a microscope.[10] It follows that the deliberative process privilege must protect documents that are indeed deliberative and pending. The privilege, however, does not extend to a final decision, as the deliberations are complete at that point.[11]

            The fact that a document is not followed by any further drafts or deliberations does not, alone, make the document itself a final document because “[s]ometimes a proposal dies on the vine.”[12] This is what happened with the Services’ “draft biological opinion” on the EPA’s 2013 rule–it died on the vine.[13] In making this determination, the court pointed to various factors regarding the Services’ “draft biological opinion” on EPA’s 2013 proposed rule.

First, and most importantly, the Court pointed to the fact that the Services’ never formally approved or adopted the opinion, nor did they send the EPA their opinion on the proposed 2013 rule as is typical practice when for draft and final biological opinions.[14] The Court actually pointed to this as a further indication that the “draft biological opinion” at question in this case was more likely a “draft of a draft” because of the Services’ internal determination that further work needed to be done before even issuing a draft opinion.[15]

Next, the Services and the EPA had an agreement to allow for further changes following the circulation of the “draft biological opinion” to the EPA.[16] Because the drafts were allowed to change following EPA’s opportunity to comment, then the “draft biological opinion” could not have exhibited the agencies’ final decision on the matter and as such, was deliberative.[17]

Moreover, in determining the finality of an opinion, courts must examine whether the opinion led to any “direct and appreciable legal consequences” as is a necessary result of an agency’s final opinion on a matter—the practical consequences of a decision is not indicative of an opinion’s finality.[18] Here, there were no legal consequences of the Services’ internally, unapproved draft opinion—nothing from the draft opinion made its way into practice either at the Services or at the EPA, nor was either agency tied to anything within the draft opinion.

The Court confirms, nonetheless, that agencies cannot simply “stamp every document ‘draft,’” to protect their decisions, because the inquiry that the courts make is a functional inquiry rather than a formal one.[19]  In other words, the court will have to examine the facts of each individual case to make a determination as to whether or not a “draft” opinion is indeed considered by the agency to be “draft,” or if it is rather a final opinion and thereby not protected by the deliberative process privilege. The Court does not indicate how future courts should make this determination. 

 Implications of the Decision 

The Supreme Court’s decision broadens the scope of what is considered a “draft” document for the purposes of applying the deliberative process privilege. However, the Court left the scope of the decision rather open-ended, meaning that it will come down to the district and appellate courts to determine what documents fall under the exclusion. In turn, this will likely lead to circuit splits in how to treat certain kinds of documents under deliberative process privilege. Following such a split, forum-shopping may arise as a concern.

As the Court indicated in the decision, courts will have to examine exactly how an agency treats a document to see if it reflects its final view on the subject in question and if the document results in any appreciable change to the legal requirements or actions of an agency. For example, a proposed rule that an agency informally adopts that alters how the agency responds to a situation could be seen as final, even if there was no “final opinion” issued concerning the adoption of the new rule. 

This will likely result in an increased strain on the judiciary, requiring a case-by-case review and determination as to whether a document is indeed a “draft” and thus protected by the deliberative process privilege or if the agency treated the document as final by publishing the rule or by enforcing the changes required by the rule, and, as such, not protected.

            Regardless, the decision provides agencies with more freedom in their use of the deliberative process privilege to protect draft work product. This could very likely increase internal deliberations within agencies and increase the candor of intra-agency discussions regarding forthcoming rules or decisions. Furthermore, agencies may be more willing to increase their solicitation of public comments and input since internal deliberations on such comments will be protected, even when pulling together a draft opinion in response to public comments. However, as the Sierra Club suggested, this is a double-edged sword as this increased candor and usage of the deliberative process privilege could result in government agencies being less forthcoming in working with non-agency groups.[20] This is especially true if an opinion results in the abandonment of the proposed rule and further intra-agency deliberations, as in the case of the proposed rules in US Fish and Wildlife v. Sierra Club.

 

Amy Rodriguez is an Assistant Attorney General for the State of Texas. Her work centers on counseling state agencies on prosecution and defense litigation strategy. She is a 2017 graduate of the University of Texas School of Law.

Evan Kudler is a 2L who joined TELJ in his fall 1L year. He is from El Dorado Hills, California and studied Economics at the University of California, Santa Barbara for undergrad. Before coming to law school, he worked at Pacific Gas & Electric Company in San Francisco working on the decarbonization effort of the electricity sector. He will be joining Baker Botts Environmental litigation group this summer before he goes off to get his LLM in Global Environment and Climate Change Law at the University of Edinburgh in the fall. He hopes to focus his work on the intersection between environmental justice and climate change.

 [1] U.S. Fish and Wildlife Service et. Al. v. Sierra Club, Inc., 141 S. Ct. 777, 784-85 (2021) [hereinafter “US Fish and Wildlife”].

[2] Id. at 785.

[3] Id. at 784.

[4] Id.

[5] Id.

[6] US Fish and Wildlife, supra note 1, at 784.

[7] Id.  at 785.

[8] Id. (holding that the “draft biological opinions…represented the Services’ final opinion that the EPA’s 2013 proposed rule was likely to have an adverse effect on certain endangered species.”).

[9] Id.

[10] See id.; see also Department of Interior v. Klamath Water Us­ers Protective Assn., 532 U. S. 1, 8 (2001) (determining in relevant part that “officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news.”).

[11] US Fish and Wildlife, supra note 1, at 786.

[12] Id. “[Dying] on the vine” simply means that the rule was neither denied or approved, and, for the case herein, the Services did not officially adopt an opinion nor was an opinion issued to EPA on EPA’s proposed 2013 rule.

[13] Id. at 788

[14] Id.

[15] Id.

[16] US Fish and Wildlife, supra note 1, at 787.

[17] Id.

[18] Bennett v. Spear, 520 U.S. 154, 170, 178 (1997) (holding that a final biological opinion “leads to direct and appreciable legal consequences…[when it] alters the legal regime to which the action agency is subject.”).

[19] US Fish and Wildlife, supra note 1, at 788.

[20] Sierra Club warns that there is a risk of agencies overusing the term “draft” for purposes of protecting internal deliberations, even if the agency practically intends for such an opinion to be a final decision.

Vol. 51-2 Federal Casenote

Federal Casenote

Biden’s Broad Climate Plan: The Implications of Executive Order 14008

In January, President Biden issued a broad and far-reaching executive order (EO) aimed at taking a government-wide approach to reducing climate change.[1] EO 14008, titled “Executive Order on Tackling the Climate Crisis at Home and Abroad,” addresses climate change by tightening existing environmental, natural resource, and energy policies and directing federal agencies to invest in sustainable technologies.[2] The EO’s broad climate action approach also has policy implications for non-environmental and non-natural resource-related law areas, including significant implications for foreign and national security policy.[3] Among the most significant directives set out by the EO are (1) a pause on new oil and gas development leasing on federal lands; (2) federal fossil fuel subsidy elimination; (3) prioritization of federal investment in clean energy sources and technologies; and (4) an environmental justice initiative that calls for the federal government to direct 40% of climate-action-allocated funds to benefit particularly disadvantaged communities.[4] This initiative would involve investment in federal programs and initiatives such as “clean transit, workforce development, and pollution remediation.”[5]

The EO showcases Biden’s stricter approach to climate action compared to the previous administration’s de-regulatory efforts. As a result, President Biden’s EO is likely to have wide implications for fossil fuel development, land use, and energy policy. Correspondingly, the EO is anticipated to affect ongoing litigation and spark new litigation related to climate action, mitigation, oil and gas development, and environmental justice.[6]

One of the EO’s major implications is the review and potential reversal of the previous administration’s de-regulatory policies. During the new administration’s first days, the Environmental Protection Agency (EPA) requested that the Department of Justice stay or delay any ongoing litigation involving regulations enacted by the Trump Administration.[7] The Biden Administration is likely to revisit the previous administration’s relaxation of rules governing the National Environmental Policy Act (NEPA) and the Clean Water Act (CWA), both of which are currently the subject of ongoing litigation.[8] Under NEPA, the former president moved to limit federal-permitted projects’ environmental reviews and climate impacts.[9] This move sparked litigation centering around the scope of the government’s obligation under NEPA to assess a project’s impacts on domestic and global climate change.[10] As for the CWA, Trump rescinded the Clean Water Rule, a 2015 EPA regulation defining the CWA’s federally protected waters.[11] In its place, the Trump Administration created a new rule defining “waters of the United States” (WOTUS) to narrow the CWA’s jurisdiction over federally protected waters.[12] This rule was met with opposition. While some conservative interests argued the rule was still too far-reaching and should exclude non-navigable, intermittent wetlands and streams, environmental non-governmental organizations (ENGOs) challenged the rule on grounds that it improperly broadened waste treatment exemptions.[13] Similarly, several indigenous tribes challenged the rule on the basis that it impermissibly threatens critical waterways.[14] Numerous states requested a freeze of the new WOTUS rule, reasoning that the EPA and the U.S. Army Corps of Engineers issued the rule in violation of the CWA.[15] However, outcomes varied across states. While the U.S. District Court for the Northern District of California denied injunctive relief for lack of injury, a U.S. District Court for the District of Colorado judge granted a freeze of the new rule for the state.[16] However, as of March 2, 2021, the U.S. Court of Appeals for the 10th Circuit vacated the Colorado district court’s stay of the rule, holding that the court overreached in granting the injunction as Colorado did not show the requisite injury to confer standing.[17]

The Biden Administration is anticipated to reverse rules related to fuel economy and GHG emission standards and federal-land oil-and-gas leasing.[18] In 2019, the Trump Administration replaced the Obama-era Clean Power Plan with the Affordable Clean Energy (ACE) Rule.[19] While the new ACE rule was vacated by the D.C. Circuit court on January 19, 2021, this ruling is likely to spur new litigation as the Biden EPA takes measures to revise and potentially expand the CAA’s Section 111(d)’s scope.[20] The Dakota Access Pipeline (DAPL) is also a current litigation subject, and President Biden may use his discretion to either shut down the pipeline temporarily, to compel further environmental review, or call for the pipeline’s removal.[21] In February, the administration’s interior secretary nominee acknowledged job losses as a potential shutdown consequence, but the Biden Administration’s stance on the DAPL remains unclear.[22]

As the Biden Administration takes steps to tighten these areas’ regulations, future litigation is projected to follow. Lawsuits filed by regulated entities and oil and gas stakeholders opposed to increased regulation and compliance costs are likely to occur. Additionally, ENGOs, other NGOs, or private citizens may pursue litigation to challenge the new regulations’ or initiatives’ inadequacies.[23] Presently, some oil and gas industry stakeholders have already filed suit in response to the EO’s lease moratorium.[24] Shortly after its passage, The Western Energy Alliance, consisting of oil and gas companies, filed suit to challenge the Order on the grounds that the president went beyond his authority.[25] The group also threatened to bring suit under the Mineral Leasing Act and the Federal Land Policy Management Act.[26] Other oil and gas industry regulated entities and stakeholders are likely to challenge the Biden Administration’s actions on similar grounds. In March, the Petroleum Association of Wyoming joined The Western Energy Alliance’s bid to block Biden’s leasing moratorium, arguing that it threatened Wyoming’s oil and gas development.[27]

Several lawmakers have also expressed their concern with the EO, with Texas Governor Greg Abbott threatening future litigation opposing Biden’s pause on oil and gas leasing in federal lands. Governor Abbott issued his own EO in response, citing regulatory overreach.[28] The executive order mandates that state agencies “‘use all lawful powers and tools’ to oppose federal actions they believe threaten the state’s energy industry—including ‘identify[ing] potential litigation.’”[29] Although Abbott conceded that, as Texas oil and gas leasing occurs chiefly on state-managed lands, Texas would be generally unaffected by the moratorium.[30] However, the governor asserted his belief that the Biden Administration is likely to impact the Texas energy industry and threatened to fire state officials who do not comply with his mandate.[31] Similarly, Utah Governor Spencer Cox stated his concern about the moratorium: “Two-thirds of our lands are public lands managed by the federal government . . . [the] order curtails future investment in Utah, weakens rural Utah’s economy and keeps many Utahns from being able to provide for their families.”[32] Utah lawmakers, including Senators Mitt Romney and Mike Lee, subsequently introduced the Protecting our Wealth of Energy Resources (POWER) Act.[33] The POWER Act bars the president and his appointees from blocking leasing or permitting in federal lands without Congress’s authorization.[34]

Several ENGOs are also pursuing litigation, challenging Biden’s mitigation plans’ inadequacies. Recently, nonprofit organizations, including The Center for Biological Diversity, Sierra Club, and Natural Resources Defense Council, filed a formal notice to the Biden administration challenging nationwide permits (NWPs) issued during the Trump Administration’s final days.[35] The NWPs threaten to “allow hundreds of thousands of discharges of dredged or fill material into the nation’s waters and wetlands from oil and gas development, pipeline and transmission-line construction, and coal mining” in violation of the Endangered Species Act.[36] Previously, the U.S. Fish and Wildlife Service and National Marine Fisheries Service determined that such permitting could also have an impact on several animal species, such as migratory birds, whooping cranes, and Florida manatees.[37] While environmental groups acknowledged the Biden administration’s plans to review NWPs issued by the previous administration in accordance with EO 13990 “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” they expressed intent to file suit if the U.S. Army Corps of Engineers fails to fulfill its duty to consult in granting NWPs.[38] Similar litigation from other public interest organizations is likely to follow.

Although EO 14008’s impacts remain to be seen, the quick influx of litigation pursued by energy companies, stakeholders, and nonprofit organizations and public interest groups suggests that the Biden Administration’s sweeping climate action plan is likely to be the subject of continuing litigation. As the Biden Administration seeks to advance its plan and execute the EO initiatives, by reversing or revising the previous administration’s de-regulatory approach and by launching new regulatory programs and initiatives, Biden’s climate action plan is likely to face challenges in the courts from multiple angles.

Amanda Halter is managing partner of the Houston office of the international law firm of Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural Resources practice section and co-leader of the firm’s Crisis Management team. Amanda helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, and project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

Jessica A. Villalon is a third-year student at The University of Texas School of Law and Senior Editor of the Texas Environmental Law Journal.

 

[1] Exec. Order No. 14,008, 86 Fed. Reg. 7619 (Jan. 27, 2021).

[2] Dissecting the Biden Climate Executive Order, Brownstein Hyatt Farber Schreck (Feb. 1, 2021), https://www.bhfs.com/insights/alerts-articles/2021/dissecting-the-biden-climate-executive-order.

[3] Id.

[4] Exec. Order No. 14,008, 86 Fed. Reg. 7619 (Jan. 27, 2021).

[5] Sheila McCafferty Harvey et al., Biden’s Climate Blitz, Pillsbury (Jan. 29, 2021), https://www.pillsburylaw.com/en/news-and-insights/bidens-climate-blitz.html.

[6] Ann Navaro and Ryan Eletto, Changes to Expect in Environmental Litigation Under Biden, Energy Legal Blog (Jan. 5, 2021), https://www.energylegalblog.com/blog/2021/01/05/changes-expect-environmental-litigation-under-biden.

[7] Douglas Sanders, United States: President Biden’s Environmental Age, Global Compliance News (Feb. 21, 2021), https://globalcompliancenews.com/united-states-president-bidens-environmental-agenda-comes-into-focus-08022021/.

[8] Navaro and Eletto, supra note 6.

[9] Marianne Lavelle, Trump Moves to Limit Environmental Reviews, Erase Climate Change from NEPA Considerations, Inside Climate News (Jan. 9, 2020), https://insideclimatenews.org/news/09012020/trump-nepa-environmental-review-changes-climate-change-infrastructure-pipelines/.

[10] Climate Change Litigation on the Horizon with Trump Environmental Overhaul, King & Spalding (Jul. 20, 2020), https://www.kslaw.com/news-and-insights/climate-change-litigation-on-the-horizon-with-trump-environmental-overhaul.

[11] Clean Water Rule: Definition of “Waters of the United States”, 80 Fed. Reg. 37,053 (June 29, 2015).

[12] Pamela King & Hanna Northey, Who’s suing over Trump’s WOTUS rule?, E&E News (Jun. 24, 2020), https://www.eenews.net/stories/1063446011.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] 10th Circuit Vacates District Court Stay of Trump WOTUS Rule In Colorado, Inside EPA (Mar. 2, 2021), https://insideepa.com/daily-news/10th-circuit-vacates-district-court-stay-trump-wotus-rule-colorado.

[18] Navaro and Eletto, supra note 6.

[19] Hillary Aidun et al., Climate Reregulation in a Biden Administration 17 (2020), https://climate.law.columbia.edu/sites/default/files/content/Climate%20Reregulation%20in%20a%20Biden%20Administration.pdf.

[20] Brook Detterman et al., D.C. Circuit Vacates Trump ACE Rule: What’s Next for Power Plant CO2 Regulation?, Beveridge & Diamond (Feb. 4, 2021), https://www.bdlaw.com/publications/d-c-circuit-vacates-trump-ace-rule-whats-next-for-power-plant-co2-regulation/.

[21] Navaro and Eletto, supra note 6.

[22] Audrey Conklin, Biden interior pick on Dakota Access Pipeline shutdown: ‘If something shuts down, then jobs can be lost’, Fox Business (Feb. 25, 2021), https://www.foxbusiness.com/economy/biden-interior-haaland-dakota-access-pipeline.

[23] Navaro and Eletto, supra note 6.

[24] Nathaniel Custer et al., President Biden’s Climate Change Order Sets Agenda for Energy Policy, JD Supra (Feb. 2, 2021), https://www.jdsupra.com/legalnews/president-biden-s-climate-change-order-6715617/.

[25] Id.

[26] Id.

[27] Petroleum Association joins lawsuit challenging Biden’s leasing pause, Wyoming Tribune Eagle (Mar. 18, 2021), https://www.wyomingnews.com/news/local_news/petroleum-association-joins-lawsuit-challenging-biden-s-leasing-pause/article_00863715-fa61-502d-b7ba-d7182846e685.html.

[29] Id.

[30] Id.

[31] Id.

[32] Amy Joi O’Donoghue, Biden’s leasing ban provokes outrage, praise and lawsuit in Utah, Deseret News (Jan. 29, 2021), https://www.deseret.com/utah/2021/1/29/22256776/bidens-leasing-ban-provokes-outrage-praise-lawsuit-in-utah-energy-oil-gas-politics-economy-climate.

[33] Id.

[34] Id.

[35] Brett Wilkins, Green Coalition Threatens to Sue Biden Administration Over Trump-Era Permits That ‘Jeopardize’ Wildlife, Common Dreams (Feb. 8, 2021), https://www.commondreams.org/news/2021/02/08/green-coalition-threatens-sue-biden-administration-over-trump-era-permits-jeopardize.

[36] Id.

[37] Id.

[38]Ctr. for Biological Diversity, 60-Day Notice of Intent to Sue: Violations of the Endangered Species Act regarding the Nationwide Permit Program 1 (Feb. 8, 2021), https://www.biologicaldiversity.org/programs/biodiversity/pdfs/2-4-2021-NWP-NOI-with-attachments.pdf.

Vol. 51-1 Federal Casenotes

Federal Casenotes

Cooperation or Retaliation: California’s Recent Push for Electric and Zero Emissions Vehicles Highlights the Trump Administration’s Attack on Clean Air Act Waivers

Introduction

After a record-smashing six weeks of wildfires, heat waves, and even some black-outs in California and the western U.S., on September 23, 2020, California Governor Gavin Newsom issued Executive Order N-79-20 (EO), declaring California’s intent to accelerate the transportation sector’s energy transition by setting a goal that all cars and trucks sold in the state be zero-emission by 2035 and medium- and heavy-duty vehicles by 2045.[1] Subsequently touted as a “ban on gas-guzzlers”[2] for its attention-grabbing zero emissions vehicles targets, not to mention its signing atop a Ford Mustang Mach-E electric crossover,[3] the order directed state agencies to plan for, encourage, and develop broader build-outs of sustainable transportation infrastructure and called for rulemaking to protect communities and workers from oil extraction impacts.[4] The EO reflects Governor Newsom’s latest effort to ensure that California meets its GHG reductions targets by challenging deadlines.[5]

Many industry and political commentators have used the headline “Newsom bans gas-powered cars by 2035,” even though the EO does not in fact impose a ban, reflecting some fear that the goals could be unrealistic and end up hurting California businesses and consumers.[6] However, some California automotive industry workers approve of the EO, recognizing that it is not a ban and may help Californians solve their transportation emissions problem.[7] Notwithstanding the support of some proponents, the major takeaway from the EO is that California is in for a steep climb to equip its power grid to handle the projected increase in electric vehicles (EVs).[8]

While the EO directs state agencies—including the California Public Utility Commission (CPUC), responsible for ratemaking and regulation of the state’s Investor Owned Utilities—to “accelerate deployment of affordable fueling and charging options for zero-emission vehicles,” “update the biennial statewide assessment of zero-emission vehicle infrastructure,” and “develop a Zero-Emissions Vehicle Market Development Strategy . . . that ensures coordinated and expeditious implementation of the system of policies, programs and regulations necessary to achieve the goals and orders established by this Order,” it stops shy of addressing how the demand and supply will be balanced to meet the new goals.[9] The CPUC and the California Air Resources Board (CARB) have their work cut out in attempting to juggle all of California’s energy, population, and pollution regulations while paving the way for 100% EV sales.[10] The EO appears to presuppose further developments on battery storage technology and EV cost reduction.[11]

Regardless of technological feasibility, the fact remains that it is now and, unless overturned by California’s legislature or a court, will remain,[12] California’s policy that all in-state automobile sales should be sales of zero emissions vehicles (ZEVs) by 2035.[13] Governor Newsom has instructed CARB to continue refining, “to the extent consistent with State and federal law,”[14] its regulations mandating certain percentages of annual vehicle sales consist of ZEVs.[15] However carefully Governor Newsom treaded the line between the executive and legislative action by calling upon CARB to go no further than the law already allows, the EO clearly did not emerge in a political vacuum. The EO comes in the midst of a political fire-storm over California’s status as the nation’s air pollution control technology driver.[16]

Clean Air Act Waivers – Past and Present

California has been able to set its own mobile source air emissions standards, “to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare,” since 1977.[17] Since then, other states have been able to voluntarily conform their regulations to California’s, rather than the federal, standard.[18] The U.S. Environmental Protection Agency (EPA) has historically granted California waivers, required under the Clean Air Act § 209 to set air emissions standards more stringent than the EPA’s, to include ZEV standards[19] and, more recently, GHG standards.[20] That is, recent EPA and National Highway Transportation Safety Administration (NHTSA) rulemaking reinterpreted those portions of the Energy Policy and Conservation Act of 1975 pertaining to national fuel economy standards as preempting the State’s ability “to limit or prohibit tailpipe GHG emissions or establish ZEV mandates.”[21]  That rulemaking premised its conclusion on another recent determination by the EPA— that California, and thereby the 177 States,[22] cannot obtain the § 209 waivers that regulated GHGs and set ZEV targets.[23] Litigants challenging the rulemaking in federal court called attention to the rulemaking’s litany of faults and over-reaches under the federal Administrative Procedure Act and National Environmental Policy Act; perhaps most salient is the charge that the EPA and NHTSA did not adequately address their sudden reversal of decades of collaboration between California, the federal government, and industry.[24] They simply read broad preemptive effects (extending to tailpipe emission standards historically set by California and adopted by the 177 States) into the Energy and Policy Conservation Act’s national fuel economy regulations portion and bolstered their interpretation by giving a new restrictive view of California’s § 209 waivers.[25] Adding to the pressure is discord within the regulated community, with some automakers decrying the governor’s decision[26] and some staunchly in support[27]; the fight over California’s waivers and mobile source emissions targets has never been more fierce.

Predictably, given that the tumult between the EPA and the NHTSA and California, the 177 States, and industry has spilled from the administrative realm to the judicial,[28] Andrew Wheeler, the EPA Administrator, responded a few days after the EO’s issuance with a barrage of accusatory and conclusory statements in a letter to Governor Newsom.[29] The thrust of this letter—that California’s electric grid and charging infrastructure is not prepared to scale up to support an increasingly electric vehicle fleet—has reverberated across the media landscape.[30] Citing recent blackouts as evidence, the EPA Administrator envisions scenarios where the state is forced to choose between keeping the A/C on in the hot summer and powering California’s transportation sector.[31]

Renewable energy proponents point out, though, that there is a perfectly good explanation as to why 400,000 customers recently lost power during some of the hottest weather on record across the West and Great Basin:

Critics of renewable energy such as President Trump point to the state’s supposed over-reliance on solar and wind power. The criticism is misplaced, however. The outages the California ISO ordered during a heat wave Aug. 14 and 15 were the product of an unusual combination of circumstances. These included the unexpected shutdown of a natural gas-fueled generating plant, an unexpected delay in returning a second plant to service, smoke from wildfires that reduced the generating capacity of solar units, and the regional nature of the heat wave, which increased air conditioner use in states that ordinarily would be exporting electricity to California.[32]

While these circumstances may recur and may become likelier with climate change affects, citing to the first “capacity-driven outages since the energy crisis of 2000 and 2001”[33] as evidence of ongoing failure lacks resonance. At its heart, though, Wheeler’s letter exemplifies the battle between federal and state control over energy policy. The Administration’s view is that when California regulates GHG emissions from mobile sources, it acts beyond its delegated scope under the CAA.[34] Litigation awaits, while imperatives to address climate change mount.[35] 

Conclusion

The resolution of this discord between federal and state has significant potential implications for acceleration of the clean energy transition and the regulation of air pollutants. Moreover, how California fares in this dispute will have impacted each of the 177 States and opposes the narrative that uniform standards are necessary to ensure smooth industrial function across the many states. The argument goes, if each state has a different emissions standard, we’ll need to make a different car for every state: A classic slippery slope. The history of mobile source regulation under Section 209 shows the exact opposite: states are left free to choose either the federal standard or adopt California’s more stringent standards. The issues that conflicting standards create has not risen yet, save in the limbo that the rulemaking and subsequent laws have created.[36] Likewise, automakers have been and are ready to collaborate both with California and the 177 States to market low-emission vehicles and with the federal government to market higher emissions vehicles that “customers desire,”[37] reinforcing the conclusion that the previous cooperation between the states and the federal government under the CAA was successful.[38] 

Governor Newsom’s EO is a bold experiment on climate change action given Congress’s hesitancy to setting national mobile source emissions standards. Meanwhile, the NHTSA and the EPA may fail in their assault on California’s regulatory approach, both through strained reinterpretation of the CAA and by publicly denigrating the EO, as much of the world, including the auto industry, is rapidly embracing both the imperatives and opportunities of the clean energy transition.

Amanda Halter is managing partner of the Houston office of the international law firm of

Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural

Resources practice section and co-leader of the firm’s Crisis Management team. Amanda

helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, an project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

 

Matthew Frederick is a third-year student at The University of Texas School of Law and a senior editor of the Texas Environmental Law Journal.

 

[1] Exec. Order N-79-20, Exec. Dep’t – State of Cal. (Sep. 23, 2020), [hereinafter Executive Order].

[2] Cal Matters, Will Gov. Newsom’s ‘Audacious’ Ban on Gas Guzzlers Help Trump Win in Midwest? Times of San Diego (Sep. 26, 2020), https://timesofsandiego.com/politics/2020/09/26/will-gov-newsoms-audacious-ban-on-gas-guzzlers-help-trump-win-in-midwest.

[3] Audrey LaForest, California’s fossil fuel ban likely in for long fight; 2035 ZEV goal up against the election and logistics, Automotive News (Sep. 28 2020), https://www.autonews.com/regulation-safety/californias-fossil-fuel-ban-likely-long-fight.

[4] Executive Order, supra note 1.

[5] California Global Warming Solutions Act of 2006, Cal. Health & Safety Code § 38500; see 17 Cal. Code Regs. § 95460 (2020) (regulating methane capture and flaring at municipal landfills as part of fulfilling the state’s climate objectives).

[6] LaForest, supra note 3.

[7] Id.

[8] Michael Hiltzik, Will California have enough electricity for all its EVs? Yes – but it will take work, LA Times (Oct. 1, 2020), https://www.latimes.com/business/story/2020-10-01/california-electricity-evs; see also Wheeler Criticizes California, China Plans for Reducing Greenhouse Gases, Inside EPA Weekly Report (Sept. 24, 2020).

[9] Executive Order, supra note 1, at §§ 3–5.

[10] Hiltzik, supra note 8.

[11] Id.

[12] See John C. Duncan, Jr., A Critical Consideration of Executive Orders: Glimmerings of Autopoiesis in the Executive Role, 35 Vt. L. Rev. 333, 362–63 (2010) (indicating that congressional acquiescence to presidential executive orders “amounts to ratification,” thereby permitting the inference that gubernatorial executive orders remain in effect until overturned by the state legislature or, of course, future governors).

[13] Executive Order, supra note 1, at § 1 (“It shall be a goal of the State that 100 percent of in-state sales of new passenger cars and trucks will be zero-emission by 2035. It shall be a further goal of the State that 100 percent of medium- and heavy-duty vehicles in the State be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. It shall be further a goal of the State to transition to 100 percent zero-emission off-road vehicles and equipment by 2035 where feasible.”).

[14] Executive Order, supra note 1; see, e.g., A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (“. . . the recuperative efforts of the federal government must be made in a manner consistent with the authority granted by the Constitution.”).

[15] Cal. Health & Safety Code § 43018(a) (2020).

[16] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, California et. al. v. Chao et. al., No. 1:19-cv-02826 (D.D.C 2019); California et. al. v. Wheeler et. al., No. 20-1357 (D.C. Cir. 2020).

[17] Motor and Equipment Mfrs. Ass’n v. Env’t Prot. Agency, 627 F.2d 1095, 1110 (D.C. Cir. 1979) (evaluating congressional intent in amending the Clean Air Act to include a waiver provision for California in 1977).

[18] Pub. L. No. 95-95, § 129(b), 91 Stat. 685, 750 (1977).

[19] E.g., 58 Fed. Reg. 4,166 (Jan. 13, 1993); see 71 Fed. Reg. 78,190, 78,190-91 (Dec. 28, 2006); see also 76 Fed. Reg. 61,095, 61,095-96 (Oct. 3, 2011); see also 78 Fed. Reg. 2,112, 2,114-15 (Jan. 9, 2013).

[20] Cal. Health & Safety Code § 42823, 43018.5; 74 Fed. Reg. 32,744 (Jul. 8, 2009).

[21] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[22] The 13 so-called 177 States are: Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

[23] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, Chao et. al., No. 1:19-cv-02826.

[24] See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (finding that administrative agencies decisions’ reversing long-term regulatory policy face a higher standard of review); Complaint, Chao et. al., No. 1:19-cv-02826 (referencing the interplay between Section 209, waivers, and 177 states in setting mobile source emissions targets; explaining EPA/NHTSA’s reassertion of argument that failed in federal courts (Green Mountain and Central Valley) about applicability of waiver provisions to GHG/ZEV regulations).

[25] Complaint, Chao et. al., No. 1:19-cv-02826.

[26] LaForest, supra note 3 (citing Chevy and other manufacturers who haven’t adopted tougher standards under the agreement to cut vehicle emissions).

[27] Id. (citing Ford and other manufacturers who have embraced collaboration with California).

[28] Chao et. al., No. 1:19-cv-02826; Wheeler et. al., No. 20-1357.

[29] Andrew R. Wheeler, Letter to Governor Gavin Newsom (Sep. 28, 2020), https://ww2.arb.ca.gov/sites/default/files/2020-10/Wheeler_to_Newsom_9-28-2020.pdf [hereinafter Letter].

[30] Wheeler Warns California Over Plan to Ban New Gasoline Cars in 2035, Inside Cal/EPA (Oct. 2, 2020).

[31] Letter, supra note 29.

[32] Hitzik, supra note 8.

[33] Id.

[34] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[35] Kyoto, COP 22, other climate benchmarks that the U.S. has committed itself to have elapsed, and the Trump Administration is in the process of withdrawing from the Paris Climate Accord.

[36] Complaint, Chao et. al., No. 1:19-cv-02826; Preemption Rule, 84 Fed. Reg. 51310 (Sep. 27, 2019).

[37] Laforest, supra note 3.

[38] See Pub. L. 95-95, Title II, §§ 207, 221, Aug. 7, 1977, 91 Stat. 755, 762; Pub. L. 101-549, Title II, § 222(b), Nov. 15, 1990, 104 Stat. 2502.

Vol. 50-2 Federal Casenote

By Amanda Halter and Meredith Luneack

Federal Casenote

Not A Drop to Drink: Water Scarcity and Climate Change

Consequences at the US-Mexico Border

Introduction

Climate change is a cognizable, widely recognized source of insecurity globally.[1] At the US-Mexico border, climate change is already negatively impacting the ability of inhabitants to access and control water at this crucial boundary area. As climate change intensifies, the Rio Grande and Colorado Rivers—the primary sources of water for much of the US-Mexico border—will likely face increasing aridity and heightened water insecurity and demand.[2] Climate scientists predict that, if greenhouse gas emissions continue unabated, there is a ninety-nine percent chance that a “mega-drought” will hit the Southwest region of the United States before the end of the twenty-first century.[3] One study concluded that, as drought occurs and becomes more severe and more likely, these conditions will negatively impact both northern Mexico water supplies and groundwater recharge.[4] Water scarcity will potentially displace millions of people; scientists predict that lack of water and extreme temperatures may force residents living in the border region may be forced to move within the next eighty years.[5]

The Issue and Compiling Factors

Six million residents and two million acres of farmland in the Rio Grande Valley on the eastern end of the US-Mexico border rely on the Rio Grande River as their primary water source; yet, the Rio Grande remains one of the most endangered rivers in the country.[6] Scientists predict that residents of the Rio Grande Valley will face a water supply shortage of 600,000 acre-feet (or, 1.955106e+11 liquid gallons) by 2060.[7] This reduction will likely result in conflict over the remaining water resources amongst farmers, ranchers, and residents of the quickly-urbanizing region. Already, this conflict has begun. According to one 2015 study, five of the irrigation districts serving about 340,000 acres of farmland in the Rio Grande Valley were at “the highest risk of needing push water”[8] during periods of drought.[9] This uptick in agricultural water needs runs up against human consumers of water in the Valley, thirty-five percent of whom live below the poverty line.[10] According to the same study, “there are likely to be significant public health and economic impacts” if cities in the Valley cannot secure water for their residents.[11]

The public health impact could likely be even more acute in border colonias. These unincorporated, low-income neighborhoods often sit far from established cities and towns and lack access to typical municipal services such as water and electricity hookups.[12] In colonias along the border in New Mexico, residents rely on hand-dug wells for drinking water, which cannot access water as deeply as professionally-installed wells.[13] Because of this, when the water table drops below the deepest point of colonia wells during the hottest months of the year, colonia residents do not have access to any groundwater whatsoever.[14] The State of New Mexico faces some of the most acute water stress in the world, comparable to that of the United Arab Emirates.[15]

Thus, how should water resources be distributed between residential and agricultural consumers? What is the correct crisis response if an aquifer dries up? Such questions are even more complicated for border states; due to their immediate proximity to Mexico and their reliance on shared water resources, solutions to water scarcity problems inherently must be binational and reflective of the intertwined nature of water dependence. Texas and Mexico alone share fifteen aquifers, for example.[16] The population concentration along the border only exacerbates the problem; there are fourteen discrete “binational urban systems” that feature dense, interconnected populations that are particularly vulnerable to water scarcity.[17] The potential for systemic water scarcity along the entire US-Mexico border is magnified when meaningful water management and climate change policies are not pursued and implemented.

Potential Solutions

The federal governments of both Mexico and the United States have recognized the need for a bilateral response to water management. Bilateral cooperation, political and scientific, as well as agreements, formal and informal, are the best available tools for navigating an increasingly complex resource management future, and there are noteworthy successes, too. For example, the Climate Assessment for the Southwest (CLIMAS), a National Oceanic and Atmospheric Administration (NOAA) program housed at the University of Arizona, often works with Mexican academic counterparts, such as the Colegio de Sonora and the Universidad de Sonora, on climate science research undertakings.[18]

Furthermore, the International Boundary and Water Commission (IBWC) is successfully pursuing binational cooperation in water management. With a Mexican section based in Ciudad Juarez, Chihuahua, and an American section based in El Paso, Texas, the IBWC is a binational body charged with monitoring and managing the implementation of water-related treaties between the United States and Mexico.[19] While the IBWC boasts a thick catalog of treaties and evidence of cooperation and agreement between the United States and Mexico—the IBWC in its original form was created soon after the original drawing of the border line in the Treaty of Guadalupe Hidalgo[20]—critics have characterized it as anachronistic and insufficiently responsive to the modern environmental challenges that face binational negotiators today.[21] An audit of much of the IBWC’s recent work reveals that it perhaps best functions as a mechanic rather than as a strategist; that is, it is calibrated to implement the specifications of a broader water policy, not to create the policy itself. As such, despite its staying power as a source of binational negotiation, the IBWC may not be the right place to turn for a source of policy when faced with imminent water scarcity (though it is certainly a major player in policy fulfillment); this is perhaps exemplified by the fact that the majority of the American IBWC Commissioners have had professional and academic backgrounds in engineering, hydrology, geology, and topography.[22]

If broader policy is not in the wheelhouse of the IBWC Commissioners, then perhaps it belongs in a more political sphere. The Agreement on Cooperation for the Protection and Improvement of the Environment in the Border Area (the “La Paz Agreement”), signed in 1983 by then-U.S. President Ronald Reagan and Mexico’s President Miguel de la Madrid, is the chief political-level agreement made between the two countries that still shapes and underscores modern approaches to water management and environmental protection more broadly at the border. The stated objective of the La Paz Agreement is to “establish the basis for cooperation between the Parties for the protection, improvement and conservation of the environment and the problems which affect it, as well as to agree on necessary measures to prevent and control pollution in the border area, and to provide the framework for development of a system of notification for emergency situations.”[23] Functionally the La Paz Agreement has served as a launching pad for a number of binational programs aimed at environmental protection and water conservation, including most recently the Border 2020 initiative, launched as a partnership between the American Environmental Protection Agency (EPA) and Mexico’s Secretaría del Medio Ambiente y Recursos Naturales (SEMARNAT).[24]

Introduced in 2012, Border 2020 set out to achieve a number of “sustainable development” goals, one of which was to improve access to clean drinking water for the inhabitants of the border region.[25] Border 2020 also made explicit mention of involving stakeholders from all levels as program partners, implementing a regional, “bottom-up” approach to goal setting and implementation.[26] Border 2020 works primarily through grant-funded initiatives financed by the North American Development Bank (NADB), and regional EPA offices oversee its implementation, providing resources and accountability for the community-level programs working on water protection and conservation.[27]

Despite its lofty goals, the Border 2020 initiative has been plagued with a number of problems, including insufficient reporting on outcomes, a lack of transparency, and failure to monitor important environmental indicators, according to the EPA Inspector General (IG) office. Chief among these challenges is the absence of meaningful documentation of progress. Regarding the composition of regional action plans meant to keep track of the grant-funded programs, for example, the IG reported that they were frequently inconsistent in format, lacked the requisite information, or failed to provide updated information.[28] The EPA also failed to share any metrics on success with the public, or any information on which programs received grants and whether or not they were successful.[29] Finally, despite the initiative’s stated goal of protecting the environment and public health in the border region, Border 2020 has failed to track how its work, or lack thereof, has affected the area’s environmental health; the most recent overview available on the environmental conditions at the border is a 2016 interim report.[30] Many of these failures can be attributed to a lack of funding; according to the IG, the EPA reported that it did not have the resources to track progress in the way that it should, and that “[w]ithout an additional means to track established Border 2020 Program environmental indicators, the program remains unable to determine whether it is accomplishing its stated goals and objectives.”[31]

A Holistic Approach

But because the above agreements are between countries as equal partners, cooperation and inclusion must be not only vertical, with regional and municipal stakeholders, but respected in good faith horizontally by both country partners. Such respect is difficult to consistently achieve, as political turnover occurs much more quickly in both countries than it often takes to achieve meaningful progress. Additionally, consistent violation of binational agreements can decrease goodwill between signatories; for example, some critics argue that the American pursuit of the construction of a border barrier across administrations violates the letter and spirit of the La Paz Agreement.[32] Is there a happy medium between the granular consistency of the IBWC and the political volatility of the La Paz Agreement and its ilk? With so many stakeholders with so many interests at so many levels, it is difficult to conceive of an agreement that could possibly take all perspectives into account. But perhaps as the danger of aridity and water shortages becomes increasingly stark and imminent, interests will coalesce, and differences between stakeholders will not matter as much as the existential need to secure water, in a sustainable way, for those living at the US-Mexico border.

Amanda Halter is managing partner of the Houston office of the international law firm of Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural Resources practice section and co-leader of the firm’s Crisis Management team. Amanda helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, and project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

Meredith Luneack is a third-year student at The University of Texas School of Law and a senior editor of the Texas Environmental Law Journal.

 

[1]               The National Security, Military, and Intelligence Panel on Climate Change of The Center for Climate and Security, A Security Threat Assessment of Global Climate Change 6 (Feb. 2020). 

[2]               Naveena Sadasivam, One of the Fastest Growing Regions of the US Could Run Out of Water, Quartz & The Tex. Observer (Aug. 21, 2018), https://qz.com/1353697/one-of-the-fastest-growing-regions-of-the-us-could-run-out-of-water/. 

[3]               Robinson Meyer, A Mega-Drought is Coming to America’s Southwest, The Atlantic (Oct. 11, 2016), theatlantic.com/science/archive/2016/10/megadroughts-arizona-new-mexico/503531/.

[4]               Margaret Wilder et al., In Assessment of Climate Change in the Southwest United States: A Report Prepared for the National Climate Assessment ch. 16 (G. Garfin et al. eds., Island Press 2013).

[5]               Meyer, supra note 3.

[6]               Zoe Schlanger et al., In a Warming World, The Fight for Water Can Push Nations Apart—Or Bring Them Together, Quartz & The Tex. Observer (Aug. 16, 2018), https://qz.com/1353831/in-a-warming-world-the-fight-for-water-can-push-nations-apart-or-bring-them-together/.

[7]               Sadasivam, supra note 2.

[8]               Id. “Push water” is a source of surplus water to be tapped into during periods of drought. 

[9]               Id.

[10]             Jason Cohen, Rio Grande Valley Tops List of “America’s Poorest Cities”, Texas Monthly (Jan. 21, 2013), https://www.texasmonthly.com/articles/rio-grande-valley-tops-list-of-americas-poorest-cities/.

[11]             Sadasivam, supra note 2.

[12]             Daniel Salinas, Drinking Water Along The US-Mexico Border Threatened by Global Warming, KBPS San Diego (Jun. 12, 2017), https://www.kpbs.org/news/2017/jun/12/drinking-water-along-us-mexico-border-threatened-g/. 

[13]             Id.

[14]             Id.

[15]             Morgan McFall-Johnsen, New Mexico faces extreme water scarcity on par with the United Arab Emirates. Experts warn more ‘day zeros’ are looming, Business Insider (Aug. 7, 2019), https:// www.businessinsider.com/new-mexico-faces-extreme-water-stress-2019-8.

[16]             Schlanger, supra note 6. 

[17]             Greg Garfin et al., Assessment of Climate Change in the Southwest United States, Southwest Climate Alliance 343 (2013). 

[18]             Id.

[19]             Nicole T. Carter et al., U.S.-Mexican Water Sharing: Background and Recent Developments, Congressional Research Service 5 (2017).

[20]             History of the International Boundary and Water Commission, Int’l Boundary & Water Comm’n, https://www.ibwc.gov/About_Us/history.html, (last visited Mar. 15, 2020).

[21]             Helen Ingram & David R. White, International Boundary and Water Commission: An Institutional Mismatch for Resolving Transboundary Water Problems, 33 Nat. Res. J., 153, 153 (1993). 

 

[22]             History of U.S. Section Commissioners, Int’l Boundary & Water Comm’n, https://www.ibwc.gov/About_Us /Commish_History.html (last visited Apr. 6, 2020).

[23]             Agreement on Cooperation for the Protection and Improvement of the Environment in the Border Area, U.S.-Mex., art. I, Aug. 14, 1983, 35 U.S.T. 2916. 

[24]             U.S. Envtl. Prot. Agency & Mex. Sec. of Env. & Nat. Res., EPA-160-R-12-001, Border 2020: U.S.-Mex. Envtl. Program (2012).

[25]             Id. at 1.

[26]             Id. at 8.

[27]             U.S. Envtl. Prot. Agency Off. of the Inspector Gen., 20-P-0083, Border 2020: Mgmt. Controls Needed to Verify and Rep. Border 2020 Program Accomplishments 3 (Feb. 18, 2020).

[28]             Id. at 8–9.

[29]             Id. at 10–11.

[30]             Id. at 9.

[31]             Id. at 10.

[32]             Oscar Ibanez & Stephen P. Mumme, U.S.-Mexico Environmental Treaty Impediments to Tactical Security Infrastructure Along the International Boundary, Nat. Res. J., 817-18 (2009). 

Vol. 50-1 Federal Casenotes

By Amanda Halter and Matthew Frederick

Federal Casenotes

Cooperation or Retaliation: California’s Recent Push for Electric and Zero Emissions Vehicles Highlights the Trump Administration’s Attack on Clean Air Act Waivers

Introduction

After a record-smashing six weeks of wildfires, heat waves, and even some black-outs in California and the western U.S., on September 23, 2020, California Governor Gavin Newsom issued Executive Order N-79-20 (EO), declaring California’s intent to accelerate the transportation sector’s energy transition by setting a goal that all cars and trucks sold in the state be zero-emission by 2035 and medium- and heavy-duty vehicles by 2045.[1] Subsequently touted as a “ban on gas-guzzlers”[2] for its attention-grabbing zero emissions vehicles targets, not to mention its signing atop a Ford Mustang Mach-E electric crossover,[3] the order directed state agencies to plan for, encourage, and develop broader build-outs of sustainable transportation infrastructure and called for rulemaking to protect communities and workers from oil extraction impacts.[4] The EO reflects Governor Newsom’s latest effort to ensure that California meets its GHG reductions targets by challenging deadlines.[5]

Many industry and political commentators have used the headline “Newsom bans gas-powered cars by 2035,” even though the EO does not in fact impose a ban, reflecting some fear that the goals could be unrealistic and end up hurting California businesses and consumers.[6] However, some California automotive industry workers approve of the EO, recognizing that it is not a ban and may help Californians solve their transportation emissions problem.[7] Notwithstanding the support of some proponents, the major takeaway from the EO is that California is in for a steep climb to equip its power grid to handle the projected increase in electric vehicles (EVs).[8]

While the EO directs state agencies—including the California Public Utility Commission (CPUC), responsible for ratemaking and regulation of the state’s Investor Owned Utilities—to “accelerate deployment of affordable fueling and charging options for zero-emission vehicles,” “update the biennial statewide assessment of zero-emission vehicle infrastructure,” and “develop a Zero-Emissions Vehicle Market Development Strategy . . . that ensures coordinated and expeditious implementation of the system of policies, programs and regulations necessary to achieve the goals and orders established by this Order,” it stops shy of addressing how the demand and supply will be balanced to meet the new goals.[9] The CPUC and the California Air Resources Board (CARB) have their work cut out in attempting to juggle all of California’s energy, population, and pollution regulations while paving the way for 100% EV sales.[10] The EO appears to presuppose further developments on battery storage technology and EV cost reduction.[11]

Regardless of technological feasibility, the fact remains that it is now and, unless overturned by California’s legislature or a court, will remain,[12] California’s policy that all in-state automobile sales should be sales of zero emissions vehicles (ZEVs) by 2035.[13] Governor Newsom has instructed CARB to continue refining, “to the extent consistent with State and federal law,”[14] its regulations mandating certain percentages of annual vehicle sales consist of ZEVs.[15] However carefully Governor Newsom treaded the line between the executive and legislative action by calling upon CARB to go no further than the law already allows, the EO clearly did not emerge in a political vacuum. The EO comes in the midst of a political fire-storm over California’s status as the nation’s air pollution control technology driver.[16]

Clean Air Act Waivers – Past and Present

California has been able to set its own mobile source air emissions standards, “to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare,” since 1977.[17] Since then, other states have been able to voluntarily conform their regulations to California’s, rather than the federal, standard.[18] The U.S. Environmental Protection Agency (EPA) has historically granted California waivers, required under the Clean Air Act § 209 to set air emissions standards more stringent than the EPA’s, to include ZEV standards[19] and, more recently, GHG standards.[20] That is, recent EPA and National Highway Transportation Safety Administration (NHTSA) rulemaking reinterpreted those portions of the Energy Policy and Conservation Act of 1975 pertaining to national fuel economy standards as preempting the State’s ability “to limit or prohibit tailpipe GHG emissions or establish ZEV mandates.”[21]  That rulemaking premised its conclusion on another recent determination by the EPA— that California, and thereby the 177 States,[22] cannot obtain the § 209 waivers that regulated GHGs and set ZEV targets.[23] Litigants challenging the rulemaking in federal court called attention to the rulemaking’s litany of faults and over-reaches under the federal Administrative Procedure Act and National Environmental Policy Act; perhaps most salient is the charge that the EPA and NHTSA did not adequately address their sudden reversal of decades of collaboration between California, the federal government, and industry.[24] They simply read broad preemptive effects (extending to tailpipe emission standards historically set by California and adopted by the 177 States) into the Energy and Policy Conservation Act’s national fuel economy regulations portion and bolstered their interpretation by giving a new restrictive view of California’s § 209 waivers.[25] Adding to the pressure is discord within the regulated community, with some automakers decrying the governor’s decision[26] and some staunchly in support[27]; the fight over California’s waivers and mobile source emissions targets has never been more fierce.

Predictably, given that the tumult between the EPA and the NHTSA and California, the 177 States, and industry has spilled from the administrative realm to the judicial,[28] Andrew Wheeler, the EPA Administrator, responded a few days after the EO’s issuance with a barrage of accusatory and conclusory statements in a letter to Governor Newsom.[29] The thrust of this letter—that California’s electric grid and charging infrastructure is not prepared to scale up to support an increasingly electric vehicle fleet—has reverberated across the media landscape.[30] Citing recent blackouts as evidence, the EPA Administrator envisions scenarios where the state is forced to choose between keeping the A/C on in the hot summer and powering California’s transportation sector.[31]

Renewable energy proponents point out, though, that there is a perfectly good explanation as to why 400,000 customers recently lost power during some of the hottest weather on record across the West and Great Basin:

Critics of renewable energy such as President Trump point to the state’s supposed over-reliance on solar and wind power. The criticism is misplaced, however. The outages the California ISO ordered during a heat wave Aug. 14 and 15 were the product of an unusual combination of circumstances. These included the unexpected shutdown of a natural gas-fueled generating plant, an unexpected delay in returning a second plant to service, smoke from wildfires that reduced the generating capacity of solar units, and the regional nature of the heat wave, which increased air conditioner use in states that ordinarily would be exporting electricity to California.[32]

While these circumstances may recur and may become likelier with climate change affects, citing to the first “capacity-driven outages since the energy crisis of 2000 and 2001”[33] as evidence of ongoing failure lacks resonance. At its heart, though, Wheeler’s letter exemplifies the battle between federal and state control over energy policy. The Administration’s view is that when California regulates GHG emissions from mobile sources, it acts beyond its delegated scope under the CAA.[34] Litigation awaits, while imperatives to address climate change mount.[35] 

Conclusion

The resolution of this discord between federal and state has significant potential implications for acceleration of the clean energy transition and the regulation of air pollutants. Moreover, how California fares in this dispute will have impacted each of the 177 States and opposes the narrative that uniform standards are necessary to ensure smooth industrial function across the many states. The argument goes, if each state has a different emissions standard, we’ll need to make a different car for every state: A classic slippery slope. The history of mobile source regulation under Section 209 shows the exact opposite: states are left free to choose either the federal standard or adopt California’s more stringent standards. The issues that conflicting standards create has not risen yet, save in the limbo that the rulemaking and subsequent laws have created.[36] Likewise, automakers have been and are ready to collaborate both with California and the 177 States to market low-emission vehicles and with the federal government to market higher emissions vehicles that “customers desire,”[37] reinforcing the conclusion that the previous cooperation between the states and the federal government under the CAA was successful.[38] 

Governor Newsom’s EO is a bold experiment on climate change action given Congress’s hesitancy to setting national mobile source emissions standards. Meanwhile, the NHTSA and the EPA may fail in their assault on California’s regulatory approach, both through strained reinterpretation of the CAA and by publicly denigrating the EO, as much of the world, including the auto industry, is rapidly embracing both the imperatives and opportunities of the clean energy transition.

Amanda Halter is managing partner of the Houston office of the international law firm of

Pillsbury Winthrop Shaw Pittman, a member of the firm’s Environmental & Natural

Resources practice section and co-leader of the firm’s Crisis Management team. Amanda

helps companies resolve environmental liabilities and negotiate compliance conditions, as well as manage financial and reputational losses associated with a crisis. Her experience includes a diverse array of environmental regulatory, litigation and crisis matters, including contamination investigations and remedial actions, natural resource damages assessments and claims, environment, health and safety compliance counseling, mass toxic tort actions, permitting and planning for large-scale industrial projects, an project impacts mitigation and restoration strategies. Amanda is a native of Houston, a graduate of Rice University and The University of Texas School of Law.

 

Matthew Frederick is a third-year student at The University of Texas School of Law and a senior editor of the Texas Environmental Law Journal.

 

[1] Exec. Order N-79-20, Exec. Dep’t – State of Cal. (Sep. 23, 2020), [hereinafter Executive Order].

[2] Cal Matters, Will Gov. Newsom’s ‘Audacious’ Ban on Gas Guzzlers Help Trump Win in Midwest? Times of San Diego (Sep. 26, 2020), https://timesofsandiego.com/politics/2020/09/26/will-gov-newsoms-audacious-ban-on-gas-guzzlers-help-trump-win-in-midwest.

[3] Audrey LaForest, California’s fossil fuel ban likely in for long fight; 2035 ZEV goal up against the election and logistics, Automotive News (Sep. 28 2020), https://www.autonews.com/regulation-safety/californias-fossil-fuel-ban-likely-long-fight.

[4] Executive Order, supra note 1.

[5] California Global Warming Solutions Act of 2006, Cal. Health & Safety Code § 38500; see 17 Cal. Code Regs. § 95460 (2020) (regulating methane capture and flaring at municipal landfills as part of fulfilling the state’s climate objectives).

[6] LaForest, supra note 3.

[7] Id.

[8] Michael Hiltzik, Will California have enough electricity for all its EVs? Yes – but it will take work, LA Times (Oct. 1, 2020), https://www.latimes.com/business/story/2020-10-01/california-electricity-evs; see also Wheeler Criticizes California, China Plans for Reducing Greenhouse Gases, Inside EPA Weekly Report (Sept. 24, 2020).

[9] Executive Order, supra note 1, at §§ 3–5.

[10] Hiltzik, supra note 8.

[11] Id.

[12] See John C. Duncan, Jr., A Critical Consideration of Executive Orders: Glimmerings of Autopoiesis in the Executive Role, 35 Vt. L. Rev. 333, 362–63 (2010) (indicating that congressional acquiescence to presidential executive orders “amounts to ratification,” thereby permitting the inference that gubernatorial executive orders remain in effect until overturned by the state legislature or, of course, future governors).

[13] Executive Order, supra note 1, at § 1 (“It shall be a goal of the State that 100 percent of in-state sales of new passenger cars and trucks will be zero-emission by 2035. It shall be a further goal of the State that 100 percent of medium- and heavy-duty vehicles in the State be zero-emission by 2045 for all operations where feasible and by 2035 for drayage trucks. It shall be further a goal of the State to transition to 100 percent zero-emission off-road vehicles and equipment by 2035 where feasible.”).

[14] Executive Order, supra note 1; see, e.g., A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (“. . . the recuperative efforts of the federal government must be made in a manner consistent with the authority granted by the Constitution.”).

[15] Cal. Health & Safety Code § 43018(a) (2020).

[16] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, California et. al. v. Chao et. al., No. 1:19-cv-02826 (D.D.C 2019); California et. al. v. Wheeler et. al., No. 20-1357 (D.C. Cir. 2020).

[17] Motor and Equipment Mfrs. Ass’n v. Env’t Prot. Agency, 627 F.2d 1095, 1110 (D.C. Cir. 1979) (evaluating congressional intent in amending the Clean Air Act to include a waiver provision for California in 1977).

[18] Pub. L. No. 95-95, § 129(b), 91 Stat. 685, 750 (1977).

[19] E.g., 58 Fed. Reg. 4,166 (Jan. 13, 1993); see 71 Fed. Reg. 78,190, 78,190-91 (Dec. 28, 2006); see also 76 Fed. Reg. 61,095, 61,095-96 (Oct. 3, 2011); see also 78 Fed. Reg. 2,112, 2,114-15 (Jan. 9, 2013).

[20] Cal. Health & Safety Code § 42823, 43018.5; 74 Fed. Reg. 32,744 (Jul. 8, 2009).

[21] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[22] The 13 so-called 177 States are: Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.

[23] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019); Complaint, Chao et. al., No. 1:19-cv-02826.

[24] See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (finding that administrative agencies decisions’ reversing long-term regulatory policy face a higher standard of review); Complaint, Chao et. al., No. 1:19-cv-02826 (referencing the interplay between Section 209, waivers, and 177 states in setting mobile source emissions targets; explaining EPA/NHTSA’s reassertion of argument that failed in federal courts (Green Mountain and Central Valley) about applicability of waiver provisions to GHG/ZEV regulations).

[25] Complaint, Chao et. al., No. 1:19-cv-02826.

[26] LaForest, supra note 3 (citing Chevy and other manufacturers who haven’t adopted tougher standards under the agreement to cut vehicle emissions).

[27] Id. (citing Ford and other manufacturers who have embraced collaboration with California).

[28] Chao et. al., No. 1:19-cv-02826; Wheeler et. al., No. 20-1357.

[29] Andrew R. Wheeler, Letter to Governor Gavin Newsom (Sep. 28, 2020), https://ww2.arb.ca.gov
/sites/default/files/2020-10/Wheeler_to_Newsom_9-28-2020.pdf [hereinafter Letter].

[30] Wheeler Warns California Over Plan to Ban New Gasoline Cars in 2035, Inside Cal/EPA (Oct. 2, 2020).

[31] Letter, supra note 29.

[32] Hitzik, supra note 8.

[33] Id.

[34] Preemption Rule, 84 Fed. Reg. 51,310 (Sep. 27, 2019).

[35] Kyoto, COP 22, other climate benchmarks that the U.S. has committed itself to have elapsed, and the Trump Administration is in the process of withdrawing from the Paris Climate Accord.

[36] Complaint, Chao et. al., No. 1:19-cv-02826; Preemption Rule, 84 Fed. Reg. 51310 (Sep. 27, 2019).

[37] Laforest, supra note 3.

[38] See Pub. L. 95-95, Title II, §§ 207, 221, Aug. 7, 1977, 91 Stat. 755, 762; Pub. L. 101-549, Title II, § 222(b), Nov. 15, 1990, 104 Stat. 2502.