Topic: Natural Resources

Natural Resources & Land Use

Carbon Sequestration and Class VI Well Primacy

Introduction

The public has become increasingly interested in carbon capture and storage (CCS) as the United States transitions to net-zero carbon emissions.[1] A form of CCS that American entities have recently focused on is geologic sequestration of carbon, where carbon dioxide (CO2)  is captured and stored underground in wells.[2] The underground injection of CO2 is subject to regulation under the Safe Drinking Water Act and requires entities to obtain a permit to inject the carbon.[3] In most states, the Environmental Protection Agency (EPA) is the primary entity for obtaining permits for Class VI wells, which are necessary for geologic sequestration.[4] Like other classes of wells, however, states may obtain primacy, or primary enforcement and permitting authority,[5] and some believe that state primacy will streamline the permitting process.[6]

Streamlining the process could alleviate industry hesitation in seeking permits, since the current process is subject to potential delays as the majority of applications are reviewed by the EPA.[7] Removing this hesitation could increase the implementation of CCS, as monetary incentives have made the technology much more appealing.[8] The Inflation Reduction Act, passed in August 2022, raised the 45Q tax credit for geologic CO2 storage from $50 to $85 per metric ton.[9] Encouragingly, incentives also exist to help states gain primacy. The Infrastructure and Investment Jobs Act provides for a $50 million grant program to support states seeking primacy over Class VI wells.[10]

These incentives will hopefully function together to achieve the desired goal of investment in geologic sequestration. Texas has shown interest in obtaining primacy over these wells with the hope of streamlining the permit process and encouraging business investment.[11] Texas is in the process of amending its rules governing Class VI wells to meet federal standards and applying for primacy.[12] On the heels of these moves, the largest carbon capture plant in the world restarted operations in Texas.[13] If the state’s application is approved, more industry will likely be attracted to the state and geologic sequestration business will continue to develop.

Geologic Sequestration and Class VI Well Primacy

Geologic sequestration stores CO2 underground in rock formations.[14] Natural gas companies have used underground injection of CO2 for both enhanced gas recovery and enhanced oil recovery.[15] Underground injection of CO2 for geologic sequestration, however, is a more recent interest, with EPA publishing its final rule establishing a new class of wells for geologic sequestration in 2010.[16] The regulations associated with Class VI wells were designed to protect underground drinking water sources and address “siting, construction, operation, financial responsibility, testing and monitoring, . . . and site closure.”[17]

To inject carbon dioxide into a Class VI well and sequester it, an entity must apply for a permit. EPA initially has primacy over all Class VI well applications, but states may apply for primacy.[18] Currently, only two states have applied for and received Class VI primacy—North Dakota and Wyoming.[19] To obtain primacy, states must make it through four steps: “(1) pre-application; (2) completeness review and determination; (3) application evaluation; and (4) final rulemaking and codification.”[20]

Texas’ Move Toward Primacy

Texas has initiated the process for gaining primacy over Class VI wells.[21] Currently, however, EPA retains primacy.[22] As such, interested entities must apply for permits through both EPA and the Railroad Commission, the state agency in charge of regulating Class VI wells.[23] If Texas’s application for primacy is approved, the Railroad Commission will be the sole agency that entities in Texas must submit permit applications to. Texas is hopeful that applications running solely through one agency, instead of two, will streamline the permitting process, encourage the CCS business, and complement the state’s oil and gas industry.[24] The state may also have been encouraged by the grant program supporting state primacy in the Infrastructure and Investment Jobs Act.[25]

Texas took its first big step toward primacy on May 3, 2022, when the Railroad Commission voted to (1) publish “proposed amendments to its rules implementing the state program for geologic storage of anthropogenic CO2 and incorporating federal requirements,” (2) submit a pre-application for primacy to EPA, and (3) “request[ed] that the [Texas] Governor formally ask EPA for Class VI UIC well program approval.”[26] After publishing its proposed amendments on May 3,[27] the Railroad Commission quickly made headway on the next action, submitting its pre-application on May 31, 2022.[28] The agency’s proposed amendments were approved on August 30, 2022.[29]  Finally, Texas submitted its application for primacy on December 19, 2022.[30]

Texas is not the only state seeking primacy for Class VI well permits; Louisiana has also applied and is waiting on a decision from EPA.[31] While there is currently only one Class VI Well application pending for Texas, there are 15 pending applications for Louisiana.[32] In response to a request by Louisiana’s governor asking for the status of Louisiana’s primacy application, an EPA spokesperson stated that EPA is still reviewing both Louisiana’s and Texas’ applications for primacy.[33] It is unclear how long the application process will take.[34] The EPA has not stated a timeline, and North Dakota’s and Wyoming’s applications are not consistent reference points—those applications took approximately five years and nine months, respectively.[35]

If Texas’ application for primacy is approved, the Railroad Commission’s rules, which would be at least as stringent as federal standards, will be the sole regulations that entities must abide by for Class VI wells. The rule revisions that were approved in August 2022 amend Part 1, Title 16, Chapter 5 of the Texas Administrative Code.[36] Significant modifications to the rules were made to meet the same stringency as federal standards and to meet the federal administration’s environmental justice goals, including to:

1. 1. 1. 1. Improve program and permit transparency.  For example, draft permits and draft permit fact sheets will be posted on the Railroad Commission’s website.  Each fact sheet will include, among other things, the type of facility, the source and quantity of carbon dioxide proposed to be injected and stored, and a description of the procedures for reaching a final permit decision.
         2. Define key terms so they are consistent with federal tax credits for these projects.
         3. Require additional data from the permit applicant. For example, applicants must identify the source(s) of carbon dioxide that will be captured by the project. This requirement was added to ensure the collection of more accurate carbon emission data and to help inform advancements in carbon sequestration strategies.
         4. Provide appropriate notice to environmental justice and limited English-speaking households. This new requirement is consistent with the Biden administration’s focus on environmental justice.[37]

Comments made by EPA on the August 2022 rules indicate that while most of the rules are sufficient, stringency concerns remain.[38]

Conclusion

Federal support for climate goals and state primacy have increased incentives for investment in geologic storage and for states to obtain primary jurisdiction over relevant programs. Texas has made significant progress toward being one of the few states with Class VI well primacy. If Texas gains primacy over Class VI wells, it could achieve its goal of attracting more CCS industry to the state.

Francesca Eick is a Senior Associate with Baker Botts in Austin. Ms. Eick’s practice focuses on regulatory compliance, permitting, litigation, and transactions involving environmental, land use, natural resource, and energy issues. Ms. Eick has advised public and private clients on matters relating to a range of environmental statutes including the Clean Water Act (CWA), the Endangered Species Act (ESA), the Clean Air Act (CAA), and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

Shelby Thompson is a 3L from Austin, Texas. She attended Texas A&M University before coming to The University of Texas School of Law. Shelby joined TELJ during her 2L year and plans on practicing environmental law.

Natural Resources & Land Use

Updates on Effect of County of Maui Decision on CWA Litigation

Introduction

            The Supreme Court’s 2020 opinion in County of Maui v. Hawaii Wildlife Fund communicated a material change in the interpretation of the Clean Water Act’s application to wastewater pollutants. This article reviews the Court’s holding, describes subsequent administrative actions, and reviews recent litigation applying the Court’s holding in lower courts.

County of Maui and Functional Equivalent Test

In 2020 the Supreme Court issued an opinion in County of Maui v. Hawaii Wildlife Fund to determine whether a permit from the EPA is required where a pollutant originating from a point source enters navigable waters via a non-point source.[1] In the case before the Court, a suit was brought for Clean Water Act violations against the County of Maui’s operation of a wastewater reclamation facility.[2] The city’s facility was pumping treated water (the pollutant) hundreds of feet underground into wells that traveled through groundwater into the Pacific Ocean, a navigable water.[3] The court was faced with the issue that a narrow reading of the statute establishes a loophole circumventing the intent of the statute, since groundwater eventually leads to navigable waters.[4] However, too broad of a reading would require permitting in many cases Congress did not intend the EPA to regulate.[5] The court ultimately held that a permit is required when there is a direct discharge or where there is the “functional equivalent of a direct discharge.”[6] To assist in determining whether a discharge is a functional equivalent the court laid out seven factors to be considered: “(1) transit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the  amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the  navigable waters, (7) the degree to which the pollution (at that point) has maintained its specific identity.”[7] The Court noted that the first two factors of time and distance are likely to be the most important in a functional equivalent analysis.[8]

EPA Guidance Memorandums

On January 14^th, 2021, the Trump administration issued a guidance memorandum on the County of Maui decision. This memorandum is not legally binding. It added an eighth factor: “the design and performance of the system or facility from which the pollutant is released.”[9].  The Biden administration then rescinded the guidance on September 15^th, 2021, through another memorandum sent by EPA Assistant Administrator for the Office of Water, Radhika Fox.[10] The September memorandum found the January guidance’s addition of an eighth factor to be inconsistent with the Court’s opinion by introducing an inquiry into the intent of the accused polluter.[11] In addition, the September memorandum stated the EPA will engage in “site-specific, scientific-based evaluations” to determine if discharges meet the functional equivalent standard of County of Maui.[12]

County of Maui on Remand

Since County of Maui, cases involving the use of the functionally equivalent test it articulated have been fact-specific and often require the use of experts.[13] In County of Maui on remand, the District Court of Hawaii, determined that the county had violated the permit requirement of the Clean Water Act by meeting the functional equivalent standard.[14]  The facts the court found most persuasive were the short distance and transit time.[15] The distance was about half a mile from point source to the ocean.[16] The transit time from point source to the ocean had a minimum of 84 days and average of 14 to 16 months.[17] The court also noted no reconsideration was needed due to the inclusion an additional factor, the volume of the discharge, in its analysis.[18] The court did not give weight to the County’s argument that the nitrogen within the wastewater was diluted by the time it reached the ocean.[19] Instead of taking the county’s requested approach of measuring the nitrogen as the pollutant, the court considered the wastewater to be the pollutant.[20]

Conservation Law Found., Inc. v. Longwood Venues & Destinations, Inc. 

In the First Circuit, the Longwood litigation immediately felt the effects of County of Maui as it was remanded to comply with the Court’s ruling. The First Circuit vacated its November 2019 decision in Conservation Law Found., Inc. v. Longwood Venues & Destinations, Inc., and remanded it to be consistent with the County of Maui ruling[21]. The Longwood case on remand was never decided; it ultimate settled for $369,000 and a replacement of the wastewater treatment facility.[22]

Black Warrior River-Keeper, Inc. v. Drummond Co.

In Black Warrior River-Keeper, Inc. v. Drummond Co., the Alabama Northern District Court applied the County of Maui  functional equivalent test to discharges of acid mine drainage into the Locust Fork of the Black Warrior River to determine if Drummond required a permit.[23] The plaintiff bringing the case presented evidence showing “contaminated groundwater from the lower dam reaches the Locust Fork in as little as 1.5 to 4.4 days.”[24] In addition, the plaintiff was able to show a relatively short distance from the point source to the navigable water, due to the proximity of the lower dam and spillway to the Locust Fork.[25] The defendant Drummond presented no evidence to contradict this data provided by plaintiff.[26] Drummond unsuccessfully attempted to argue the volume of groundwater leaked from the site was an insignificant quantity and therefore would not require permitting.[27] The court granted the plaintiff summary judgment on the matter due to an inability to generate a genuine dispute on the time and distance factors of the County of Maui functional equivalent test.[28]

Cottonwood Env’t. L. Ctr. v. Big Sky Water & Sewer Dist.,

The Cottonwood Env’t. L. Ctr. v. Big Sky Water & Sewer Dist. case involves a scenario in which Big Sky District (defendant) collects treats water for treatment at its Water Resources Recovery Facility (“WRRF”), which is alleged to have polluted runoff flowing through a drain into the groundwater which then flows into the West Fork of the Gallatin River.[29] On February of 2022, the presiding judge in Cottonwood gave both parties several factual questions to be answered in thirty words or less to shed light on how the County of Maui factors apply to the case at hand.[30] After the responses to these questions were received the judge denied both parties’ motions for summary judgement as a question still exists as to whether the WRRF underdrain pipe contributes to the functional equivalent of a direct discharge.[31]

Parris v. 3M Co

The most recent case, Parris v. 3M Co is currently being decided in Georgia and is likely to hinge on the court’s ruling of whether the defendant (Trion) meets the functional equivalent test of County of Maui.[32] Still in the preliminary stages of litigation, Trion has yet to offer any explanation as to why their PFA discharges would not meet the functional equivalent test.[33] The opposing party has yet to produce any evidence, but alleges that Trion’s disposition of PFAs through the groundwater have entered Racoon Creek thereby violating the Clean Water Act.[34] The judge ruled against Trion’s motion to dismiss this matter.[35] As this case moves forward one can expect intense evidentiary discovery in line with similar County of Maui cases.

 

Jared Mezzatesta is a 3L from New Jersey. He studied Political Economy at the University of Michigan and is passionate about fair housing. He clerked for Weil Gotshal & Manges LLP. 

 

David Klein is a Principal of Lloyd Gosselink Rochelle & Townsend, P.C. and is the Chair of the Environmental and Natural Resources Law Section of the State Bar of Texas.  David represents public and private clients in water quality, water rights, water districts, and water utility service matters.

 

Natural Resources & Land Use

NPS Responses to Overcrowding in National Parks Post-Lockdown

 Introduction          

            As the federal government and states have loosened COVID-19 lockdown restrictions and allowed greater opportunity for recreation, National Parks (Parks) have become increasingly inundated with visitors. The National Parks Service (NPS) has reported severe congestion in many of the nation’s most popular Parks, echoed by major news outlets and Park visitors.[1] This overcrowding has done more than just diminish the experience of visitors—it has harmed the Parks’ natural resources.[2] NPS has implemented a reservation system, capped the number of visitors and cars allowed in each Park, and levied additional fees, but these policies have not been uniformly applied and overcrowding remains an issue.[3] 

            The actions taken by NPS over the last year to minimize overcrowding raise concerns over the potential conflict with NPS’s legal mandate under the National Parks Service Organic Act (Organic Act) and its ability to levy additional fees under the Federal Land Recreation Enhancement Act (FLREA). 

 Overcrowding National Parks – Before, During, and After Lockdown

            Even before the pandemic, Parks were frequently overcrowded to the detriment of both recreation and conservation.[4] In 2019 alone, over 327.5 million people visited the nation’s 400 Parks, marking a 2.9% increase from 2018.[5] That is consistent with the relatively steady increase in visitation over NPS’s lifespan.[6] This continued growth compounds the concerns of scholars, who have described visitation rates as intolerably high as early as 2009.[7]  

            During the COVID lockdown, starting in March 2020, most Parks closed through the end of April, with many staying closed over the summer as well.[8] These closures decreased visitation by more than 100 million compared to 2019, with varied drops depending on each State’s lockdown guidelines. [9] Nevertheless, most of the Parks that saw a precipitous drop in visitation saw their attendance return to 2019 levels or higher by Fall of 2020.[10] Nearly half of all recreational visitors in 2020 were concentrated in the nation’s top twenty-three most popular Parks, forecasting the overcrowding that has become the norm for Parks in 2021.[11]

            While the 2021 visitation statistics for all Parks are unavailable (NPS attributes the delay to the pandemic) there have been widespread reports of overcrowding and a few targeted statistics about visitation increases in select Parks.[12] In early June, an NPS spokesperson warned that NPS was “anticipating one of [their] busiest summers ever in the most popular destination—Nationals Parks[.]”[13] This prediction has proven accurate. As the superintendent of the Grand Teton National Park noted in late August, “[e]very month except one has been record setting in terms of visitation numbers since the August before.”[14] The nation’s most popular Parks like Acadia, Grand Canyon, Joshua Tree, and Yellowstone, are bearing the brunt of this surge and the damage that comes with it.[15] 

            The high concentration of visitors at these Parks have pushed NPS to attempt to diffuse recreational visitors over the other 400 Parks in America.[16] Encouragement, however, has not been enough to solve overcrowding. NPS has also taken direct measures to curtail access to the Parks with the highest congestion. NPS has instituted reservation systems on recreation.gov to cap the amount of daily visitors and balance visitation over the course of the day.[17] Some Park administrators, rather than implement a reservation system, simply set a cap for either the number of people or the number of cars allowed in the Park or particular areas.[18] In some cases, NPS has instituted additional fees to bring motor vehicles onto Park grounds or to roam backcountry areas.[19] 

 Legality of NPS Responses

            According to NPS’s legal mandate under the Organic Act, the Service “shall promote and regulate” use of the Parks “to conserve the scenery, natural and historic objects, and wildlife . . .  and to provide for the enjoyment of the scenery, natural and historic objects, and wild life in such manner and by such means as will leave them unimpaired for the enjoyment of future generations.”[20] This language has commonly been read to create dichotomous goals for NPS: to promote the public’s recreational enjoyment of the Parks and to leave the Parks unimpaired for future generations.[21] These goals have occasionally conflicted, most notably regarding the use of motorized vehicles on Park grounds.[22] Where enjoyment of the Parks has clashed with NPS’s requirement to preserve the Parks’ relatively unimpaired condition for future generations, NPS has repeatedly attempted to balance the two concerns, resulting in legal challenges to NPS decisions.[23]

            NPS and the courts have clarified that while both promoting recreation and preserving natural resources must be accounted for in NPS decisions, the latter takes supremacy.[24] As long as NPS considers promoting enjoyment of the Parks, courts grant broad deference to enact policies that limit the impairment of natural resources.[25] Given this broad deference, it is unlikely that the reservation systems or visitor caps would be deemed arbitrary and capricious since these decisions are meant to limit overcrowding. Furthermore, as balancing the visitor rates across all Parks will decrease congestion, improve views, and decrease noise pollution, doing so should also promote the enjoyment of the Parks for all recreation visitors.[26]

            The fee increases, on the other hand, will be subject to the FLREA’s requirements. As long as the Park in question follows the procedure for increasing a fee outlined by the FLREA, the increase will likely not be found arbitrary and capricious.[27] Under the FLREA, Parks interested in levying additional fees must “provide the public with opportunities to participate in the development of or changing of a recreation fee.”[28] Although an “opportunit[y] to participate” is not defined in the statute, NPS has an internal (albeit non-binding) fee-collection manual that details the steps a Park needs to follow.[29] In the case of a fee increase at the Great Smokey Mountains National Park, undergoing a notice and comment period, coupled with direct notice to chambers of commerce and public officials, satisfied the FLREA.[30] As such, as long as any Park interested in a fee increase satisfactorily “provide[s] the public with opportunities to participate[,]” in the same vein as the Great Smoky Mountains National Park, then the fee increase will likely not be ruled arbitrary and capricious.

Conclusion

            Overcrowding remains a serious concern at National Parks which, given the increasing rate of visitors over the last thirty years, will remain a concern unless NPS fundamentally changes the way it regulates visitation. The implementation of reservation systems, hard caps on visitors, and additional fees are all important steps, but more are necessary. 

            To further encourage Americans to visit some of the lesser-known and visited Parks, Congress recently allocated approximately $1.7 billion to NPS over the next five years to repair and modernize the transit systems in and around Parks.[31] Furthermore, in 2021, the Department of the Interior will invest $1.6 billion to “address critical deferred maintenance projects and improve transportation and recreation infrastructure in national parks . . . ” alongside other public land projects.[32] In theory, these repairs will provide visitors better access to the parks and other public lands, reducing emissions and congestion in some of the most visited parks.[33] Whether this will be enough to functionally alleviate some of the issues associated with NPS’s estimated $12 billion repair backlog remains to be seen.[34]

Adam Greiner is a third-year law student at the University of Texas School of Law. Before coming to Texas, Adam went to undergrad in his home state of Virginia at the College of William and Mary, where he studied History and Global Business. Adam has been a staff editor for the Texas Environmental Law Journal since the beginning of his second year, and is interested in working in mass tort and complex commercial litigation after he graduates.

Francesca Eick is an Associate with Baker Botts in Austin. Ms. Eick’s practice focuses on regulatory compliance, permitting, litigation, and transactions involving environmental, land use, natural resource, and energy issues. Ms. Eick has advised public and private clients on matters relating to a range of environmental statutes including the Clean Water Act (CWA), the Endangered Species Act (ESA), the Clean Air Act (CAA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

 [1] See, e.g., Brody Ford, National Parks Are So Crowded That Congress Is Getting Involved, Bloomberg, July 29, 2021, https://www.bloomberg.com/news/articles/2021-07-29/national-parks-are-so-crowded-that-congress-is-getting-involved; Allison Pohle, National Parks Are Overcrowded and Closing Their Gates, Wall St. J., June, 13, 2021,   https://www.wsj.com/articles/national-parks-are-overcrowded-and-closing-their-gates-11623582002; Khristopher J. Brooks, After a Year of Pining, Visitors are Overcrowding National Parks like Yellowstone and Yosemite, CBS News, June 18, 2021, https://www.cbsnews.com/news/national-parks-overcrowding-yellowstone-yosemite/. 

Natural Resources

Updates on ESA & NEPA Litigation

Case Updates 

In 2017, the United States Army Corps of Engineers (Corps) reissued Nationwide Permit 12 (NWP 12), which was then challenged in Sierra Club v. Federal Energy Regulatory Commission.[1] The D.C. Circuit remanded the case to FERC for preparation of an environmental impact statement (EIS) on August 22, 2017.[2] According to the D.C. Circuit, FERC needed to provide more information on the pipeline’s downstream greenhouse gas emissions.[3] Subsequently, FERC filed a panel rehearing petition on October 6, 2017.[4] On January 31, 2018, the D.C. Circuit denied the decision’s rehearing.[5] As a result, the pipeline project developers filed a motion on February 6, 2018, for a 90-day stay of the mandate’s issue.[6] Along with a request to expedite FERC’s reissuance of the project authorization certificates, the developers argued several points: FERC has already resolved the environmental review deficiencies that were originally brought up by the court, vacatur will cause significant irreparable economic and environmental harms, staying the mandate helps avoid irreparable harm during preparation of and disposition of a writ of certiorari petition, and this mandate’s stay is justified, even under the traditional test for a stay pending appeal.[7]

The petitioners responded, opposing the stay for the following reasons: no good cause exists to allow FERC and the developers to avoid vacatur using the stay, the court should not pre-determine whether FERC’s additional environmental review complies with the court’s remand order, and there is no irreparable harm to consumers or the environment; and the developers’ economic harm does not justify delaying the mandate.[8]

On March 7, 2018, the court granted FERC’s motion to stay the mandate’s issuance.[9] The mandate was withheld through March 26, 2018.[10] On March 14, 2018, FERC reauthorized the pipeline project after concluding that the downstream-greenhouse gas emissions quantification does not change the project’s environmental acceptability and notified the D.C. Circuit of its issued order on March 23, 2018.[11]

In May 2018, FERC denied a rehearing regarding its certificate of public convenience and necessity issuance for two New York natural gas facility projects.[12] Shortly thereafter, the Delaware Riverkeeper Network requested FERC to rescind its order due to FERC violating NEPA by failing to adequately consider climate change impacts created by the pipeline infrastructure decision-making.[13] By July of 2018, the New York Attorney General had sent a letter to FERC warning the agency that by denying the rehearing request in May, the agency was uncharacteristically departing from its tradition of evaluating downstream greenhouse gas emissions from natural gas infrastructure projects’ environmental impacts.[14] As a result, the New York Attorney General concluded that FERC’s rehearing denial was procedurally and substantively wrong.[15]

Nationwide Permit 12

In Northern Plains Resource Council v. U.S. Army Corps of Engineers, the Northern Plains Resource Council argued that the Corps acted arbitrarily and capriciously in issuing the Keystone XL Pipeline’s NWP 12, and that the Corps should have consulted with the U.S. Fish and Wildlife Service on whether NWP 12 jeopardizes endangered species under the Endangered Species Act (ESA).[16] This case’s outcome could significantly change the extent to which the Corps and other parties can obtain and rely upon such permits in the future.

So far, several district court rulings have applied a stricter adherence standard to NEPA regulations. If this pattern continues, the Corps may potentially be more limited in its ability to issue NWPs, which will be particularly detrimental to the oil and gas industry. Furthermore, upcoming court decisions may also limit the Corps’ regulatory authority. The Corps has argued that while the ESA requires the Corps to conduct programmatic consultation with relevant wildlife agencies before issuing a NWP, the Corps was justified in failing to do so, because general permit conditions that require site-specific consultation remove the need for programmatic consultation; yet, a Montana district court rejected this argument.[17] In an April 2020, ruling by the same district court, the Corps’ regulatory approach described above was deemed “an unlawful ‘delegation’” of the agency’s regulatory authority.[18]

A Montana federal court issued an order on the parties’ motions for summary judgment on April 15, 2020. Subsequently, a motion for a partial stay pending appeal was filed.[19] In May 2020, the Court held that NWP 12 is vacated regarding new oil and gas pipelines pending environmental statutes and regulations consultation and compliance, but it remains in place regarding non-pipeline construction activities and routine maintenance; and the Corps cannot authorize any new oil and gas pipeline dredge or fill activities pending completion of required NWP 12 actions, but the Corps can still authorize dredge and fill activities for non-pipeline construction activities or routine maintenance.[20]

On June 15, 2020, the Corps requested the Supreme Court to stay regarding a pending district court appeal. The pending appeal would enjoin new oil and gas pipelines’ authorization under NWP 12 due to failure to comply with the ESA.[21] The Corps contends that the district court had no justification to set aside NWP 12, that national equitable relief was improper, that the order was issued without fair notice, and that the order lacked sound basis in the ESA.[22] On June 23, 2020, eighteen states, including Texas and West Virginia, filed a motion for leave to file an amicus brief.[23]

On July 6, 2020, the Supreme Court granted the application to stay in part.[24] More specifically, the Court denied the Keystone XL pipeline’s approval to proceed under NWP 12, but issued a partial stay as it applies to other pipelines.[25] Along with the Supreme Court’s decision, other difficulties exist in completing the Keystone XL, such as various legal challenges, an unpredictable oil market, and the current revocation of its permit by the Biden Administration, which is currently being litigated.[26] Furthermore, various business groups filed an amicus brief on September 23, 2020, asking the Ninth Circuit to reverse the district court’s evaluation of the Corps’ decision to issue NWP 12.[27]

While the Supreme Court’s stay on a nationwide injunction on new oil and gas pipelines narrows the law’s application, the Court’s decision to maintain the Keystone XL pipeline’s injunction sharpens the ESA’s “teeth” for long-term, endangered species protection.

Dakota Access Pipeline

On March 25, 2020, a federal district court judge struck down permits for the Dakota Access Pipeline, as requested by the Standing Rock Sioux Tribe.[28] The district court cited the recent case, National Parks Conservation Association v. Semonite, in its reasoning that the Corps left too many questions unanswered about the permit’s environmental impacts under NEPA.[29] According to the court, approving the permits would be “‘highly controversial’” under NEPA, given that the Corps provided unrebutted expert critiques on leak-detection systems, operator safety records, adverse conditions, and worst-case discharge.[30] After assessing government violations, a District of Columbia federal district court judge determined, on July 6, 2020, that the pipeline should be shut down.[31] Rather than shut down the pipeline, however, the D.C. Circuit Court of Appeals issued an order in August 2020 that allows oil to continue flowing for the time being.[32]

Additionally, the D.C. Circuit Court of Appeals resolved another administrative stay in August 2020 by vacating the Lake Oahe pipeline permit.[33] The Corps decided to challenge many of the district courts’ actions, including overturning the Corps’ NEPA findings, ordering an EIS, and vacating the permits and shutting down the pipeline.[34] The pipeline’s EIS process started in early September[35] and comments were due by October 26, 2020.[36] Tribes, congress members, state governments, the Corps, and the Dakota Access pipeline (DAPL) all filed federal briefs and had oral argument on November 4, 2020, during which parties discussed, before the D.C. Circuit Court of Appeals, whether the lower court erred in concluding that the federal regulators’ DAPL oil project approval did not meet NEPA standards.[37]

On October 16, 2020, the Standing Rock Sioux Tribe renewed its request for an injunction to shut down the pipeline, for which a motion was briefed and ready by December 2020.[38] Additionally, fourteen states filed briefs claiming that shutting down the DAPL will significantly damage the Midwest’s agricultural economies because it will be more expensive to ship grain.[39]

Potential Impacts of Updated NEPA Regulations

Five key NEPA-regulations alterations that went into effect on September 14, 2020, include: EIS reports are restricted to two years for completion and EA reports to one year; the “major federal actions” definition creates a limit that excludes smaller projects from review; categorical exclusions pooling allows different agencies to use other agencies’ historically used categorical exclusions; cumulative impacts are not considered in environmental studies, but rather only the reasonable alternatives and impacts in close proximity to the relevant project; and comments are only considered if they are “exhaustive.”[40]

While current regulations are likely to change under the Biden Administration, the Trump Administration’s regulatory alterations currently include narrower NEPA criteria for infrastructure projects. One of the regulations narrows what constitutes a “major federal action.”[41] This rule alteration will not only exclude many nonfederal or minimally federal-funded projects from NEPA review, but will also exclude projects whose effects are attributed to a long causal chain.[42] For instance, Sierra Club v. FERC may not have been heard by a court under the updated NEPA rules, because the court might consider the Sierra Club’s contentions regarding climate change and downstream greenhouse gas emissions too indirect and geographically remote to necessitate NEPA review.

The updated rules also eliminate cumulative impact consideration.[43] In Sierra Club v. FERC, the case outcome largely depended on the project’s cumulative impacts analysis.[44] Narrowing NEPA criteria gradually eliminates the breadth of NEPA review. Furthermore, lack of consideration for indirect factors like climate change can limit the extent to which courts are able to identify trending fact patterns in their environmental impact analyses. When the plaintiffs moved for summary judgement in November 2019 in Northern Plains Resource Council v. U.S. Army Corps of Engineers, they contended that the Corps failed to evaluate greenhouse gas emissions’ indirect and cumulative effects allowed by Nationwide Permit 12.[45] Under the new rules, a court facing similar facts to those in Northern Plains might not consider said factors under NEPA, making an injunction issuance less likely. Under the altered rules, it is also possible that there will be less consideration of the structural soundness of future infrastructure projects. For instance, it is no longer necessary under NEPA to analyze whether a rise in sea level will submerge particular infrastructure project’s structures.[46]

However, the Trump Administration’s NEPA regulations’ rollback is not immune to the Congressional Review Act (CRA), which Congress can use to overturn rules issued by federal agencies, which may happen now that the Democratic party controls both congressional houses.[47] President Biden will likely continue to bolster environmental protection by creating new standards, editing current standards, and ramping up enforcement.[48]

Bipartisanship might become a cornerstone for the current administration to achieve its environmental goals. More than that, a growth in bipartisan solutions may also lead to better representation of the American populace. Lastly, support for, and the growth of, the renewable energy industry will likely continue to increase under the Biden Administration.[49]

Patrick Leahy is an Associate at Baker Botts (Austin) and he works on a variety of environmental litigation matters at the administrative, state, and federal levels, permitting, regulatory compliance, and transactional support matters.

Bahar B. Sahami is a third-year student at The University of Texas School of Law and Senior Editor of the Texas Environmental Law Journal.

By Patrick Leahy and Neha Singh

Natural Resources

Rapanos and the New Definition of “Waters of the United States”

Introduction

The Clean Water Act (CWA) defines “navigable waters” as “the waters of the United States, including the territorial seas,” hereafter referred to as WOTUS.[1] Through the CWA, Congress directed the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the Corps) to protect “navigable waters.”[2] The Navigable Waters Protection Rule regulates these waters and the tributary systems that flow into them.[3] A clear definition of “waters of the United States” is necessary to determine the scope of federal jurisdiction over bodies of water and wetlands.[4] By redefining WOTUS, the rule restricts federal jurisdiction to only those waters that are sufficiently and visibly connected to traditionally navigable waters or seas.[5] This article discusses the reasoning behind the redefinition of WOTUS.

Background

The United States Supreme Court issued its opinion on WOTUS in Rapanos v. United States.^[6] Justice Scalia, writing for a four-justice plurality, interpreted “waters of the United States” to include “only those relatively permanent, standing or continuously flowing bodies of water,” and only those wetlands with a “continuous surface connection” to jurisdictional bodies “so that there is no clear demarcation between ‘waters’ and wetlands.”^[7] Essentially, the plurality held that an adjacent wetland is not within WOTUS just because that wetland has “a mere hydrologic connection” with the jurisdictional water.[8]

In his concurring opinion, Justice Kennedy took a different and broader interpretive approach. He stated that there is a “significant nexus” when tributaries or wetlands, “either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity” of traditionally covered bodies of water typically understood as navigable.[9] This created the “significant nexus” test, which originates from a combination of the Court’s decisions in Solid Waste Agency of Northern Cook County (SWANCC) v. United States Army Corps of Engineers and United States v. Riverside Bayview Homes, Inc.[10] The Court in SWANCC interpreted the Court’s decision in Riverside Bayview Homes as supporting a significant nexus theory: “it was the significant nexus between the wetlands and ‘navigable waters’ that informed [the Court’s] reading of the CWA in Riverside Bayview Homes.”[11] Rather than the surface-connection approach advanced by the plurality, Justice Kennedy articulated a test that gauges whether the wetlands that the EPA and the Corps’ seek to regulate have a significant enough negative impact on navigable waters.

But Justice Stevens—writing for the four-justice dissent—stated that the EPA and the Corps decided “that wetlands adjacent to tributaries of traditionally navigable waters preserve the quality of our Nation’s waters” and that EPA and the Corps’ decision “to treat these wetlands as encompassed within the term ‘waters of the United States’ is a quintessential example of the Executive’s reasonable interpretation of a statutory provision.”[12] The dissent declared that “waters” in “waters of the United States” is an ambiguous term, and the EPA and the Corps have “reasonably interpreted” federal jurisdiction to cover “nonisolated wetlands.”[13] Justice Stevens essentially eschewed a need for a separate test altogether, as long as federal jurisdiction over wetlands is reasonable under the CWA.

In 2015, in response to the Court’s interpretation of WOTUS in Rapanos, the EPA and the Corps provided a new basis for federal jurisdiction by applying Justice Kennedy’s “significant nexus” test in the clarifying document “Clean Water Rule: Definition of ‘Waters of the United States.’”^[14] In support of Justice Kennedy’s test, the EPA and the Corps used the EPA’s “Connectivity Report,” a synthesis of 1,200 peer-reviewed articles on hydrologic connection.[15] According to the EPA and the Corps’ interpretation of the “significant nexus” test, waters under federal jurisdiction included ephemeral tributaries, their adjacent wetlands, and other waters that EPA and the Corps decided were jurisdictional using a categorical or case-by-case basis.[16] The 2015 Clean Water Rule addressed the major issue in Rapanos: can the connection between jurisdictional waters and adjacent wetlands be underground?  The EPA and the Corps incorporated certain accepted scientific principles of hydrology into the definition of jurisdictional waters and rejected the surface-connection theory as stated by the plurality in Rapanos.[17] 

Developments since Rapanos

In February 2017, President Trump issued an Executive Order directing the EPA and the Corps to conduct a rulemaking in order to redefine CWA jurisdiction “in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States.”^[18] On October 22, 2019, the EPA and the Corps published a final rule to repeal the 2015 rule defining “waters of the United States.”[19] The final rule repealing the 2015 rule was published in the Federal Register on October 22, 2019, and became effective on December 23, 2019.^[20]

On January 23, 2020, the EPA and the Corps finalized the new “Navigable Waters Protection Rule,” redefining WOTUS to comply with the president’s order, which became effective on June 22, 2020.[21] The final rule excludes from the definition of WOTUS, “groundwater, including groundwater drained through subsurface drainage systems; ephemeral features that flow only in direct response to precipitation, including ephemeral streams, swales, gullies, rills, and pools” and “waste treatment systems,” among others.[22] More generally, the rule states that federal jurisdiction will be restricted to those waters and wetlands that “maintain a sufficient surface water connection to traditional navigable waters or the territorial seas.”[23] This is the end, for now, of the “significant nexus” test within the CWA. Rather than a hydrological or ecological connection, the only connection that will allow for federal regulation over other waters and wetlands is one that is surface level.

In the final rule, the EPA and the Corps assert that “ensuring that States and Tribes retain authority over their land and water resources […] helps carry out the overall objective of the CWA and ensures that the agencies are giving full effect and consideration to the entire structure and function of the Act.”[24] The EPA and the Corps cite Justice Scalia’s opinion in Rapanos in support: “clean water is not the only purpose of the statute. So is the preservation of primary state responsibility for ordinary land-use decisions.”[25] While clean water may not be the only purpose of the CWA, it is arguably the primary one. However, because the EPA and the Corps “recognize that science cannot dictate where to draw the line between Federal and State waters,” perhaps ensuring clean water through scientific processes has become less important.[26]

While this new rule recently became effective, how it is implemented will most certainly be influenced by the Supreme Court’s recent decision in County of Maui v. Hawaii Wildlife Fund interpreting Rapanos and establishing the “functional equivalent” test for indirect discharges into WOTUS.[27]

Patrick Leahy is an Associate at Baker Botts (Austin) and works on a variety of environmental litigation matters at the administrative, state, and federal levels, permitting, regulatory compliance, and transactional support matters.

Neha Singh is a second-year student at The University of Texas School of Law and a staff member of the Texas Environmental Law Journal.