Type: Development Article

Vol. 51-2 Water Quality

Water Quality

Citizens Using the Courts to Enforce Zero Discharge Limits for Plastic Pellets

In the last decade, a surge of cheap shale gas has driven growth in the domestic plastics industry.[1] Shale gas is one of plastic’s key ingredients, and Texas produces 23% of the national total.[2] Texas, Louisiana, and Oklahoma have seen an influx of plastics manufacturers.[3] New plants are being built across an area deemed “Cancer Alley,” raising concerns about further pollutants.[4] Citizen suits concerning waterborne, plastic pellets have set a low bar for proving plastic contamination in effluent emissions. These decisions have effectively enforced a plastic-pellets zero-discharge limit under the Clean Water Act (CWA), and state agencies are following along.

In 2019, the District Court for Southern District of Texas issued a declaratory judgment finding that a Formosa Plastics facility violated a CWA permit issued by the Texas Commission on Environmental Quality (TCEQ).[5] TCEQ has the authority to issue Texas pollutant discharge permits, referred to as Texas Pollutant Discharge Elimination System (TPDES) permits.[6] In San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corporation, the TPDES permit at issue prohibited the discharge of floating solids “in other than trace amounts.”[7] The plaintiffs, a group of citizens and an NGO, alleged that the permitted facility had been discharging plastic pellets and powder that exceeded that limit.[8]

The court looked to the Webster’s Dictionary definition of “trace,” essentially determining it meant “barely discernible.”[9] The court also referred to an expert witness’s “trace amount” interpretation as contaminants that are “‘not easily identifiable in the environment . . . very difficult to detect . . .  and often take[] advanced instrumentation to concentrate them for analysis.’”[10] The court’s trace amount interpretation essentially means that any plastic a person could see or collect was excessive and violated the permit. To meet this standard, the plaintiffs submitted “photographs, videos, and 30 containers containing 2,428 samples of plastics in gallon zip lock bags and plastic bottles of plastic pellets.”[11] The court relied on this to find that the plastic discharges were beyond trace amounts, violating the TPDES permit and damaging the affected area’s recreational, aesthetic, and economic value.[12] Formosa was required to pay $50 million to improve technologies for preventing plastics in wastewater and fund offsetting environmental projects.[13]

This case suggests an emerging zero-discharge standard for waterborne plastic. Under the “trace amounts” interpretation accepted by the court, any person can show a CWA violation by simply hauling bags of collected plastic into court. If the plastic is able to be collected with human hands and be seen with human eyes, then it is not “barely discernible.” It does not take as much volume for solid plastic to have these qualities as required for a liquid or particulate contaminant. While the Texas Administrative Code demands a scientific process for measuring a water body’s toxicity, radioactivity, temperature, PH, or bacterial health, measuring the water’s physical plastic amount seems to be a blunt tool. Plastic pellet manufacturers, formers, and transporters should be aware of the enforcement potential if a single pellet in the water can be seen or collected.

However, this does not mean that the court’s interpretation exceeds regulators’ current goals. As the court pointed out, the TCEQ conducts visual inspections of water to determine whether discharges exceed “trace amounts.”[14] The Texas Administrative Code’s Chapter 37 sets out aesthetic parameters for surface water, mandating that water be “essentially free of floating debris[,] . . . suspended solids[, and] . . . settleable solids.”[15] TCEQ gave a presentation at the Surface Water Quality Advisory Workgroup meeting on June 29, 2020, clarifying that none of the 155 TPDES permits for plastic pellet manufacturers authorized any amount of plastic pellets to be discharged into receiving waters.[16] The agency has proposed measures to clarify this prohibition including updating the Texas Administrative Code’s Chapter 37 to explicitly prohibit plastics’ discharge, update wastewater permits, and require a set of Best Management Practices for handling plastics.[17]

Decisions like Formosa are not themselves driving administrative change, but are a signal that citizen groups are using litigation to stop plastic pollution more quickly than administrative or legislative solutions are formalized. Eliminating waterborne plastics is a growing priority for citizen groups and legislators. The Save Our Seas 2.0 Act (SOS Act) was signed on December 18, 2020, and focuses on marine ecosystems’ contamination and plastic ingestion by marine fauna.[18] The Break Free From Plastic Pollution Act (BFPPA) was introduced on March 25, 2021, with the goal to “shift the burden of cleanup to the corporations that produced the plastic[] . . . .”[19] Whether these legislative efforts will bring about meaningful change remains to be seen, as the SOS Act has been criticized for its measured approach and the BFPPA has failed to garner bipartisan support.[20] Whatever their outcome, they will move slower than many activists prefer, making the courts the most expedient battleground to stop plastic pollution.

The Formosa ruling may have invited a surge in CWA citizen suits over plastic contamination. Citizen groups have recognized that standards such as “trace amounts” require less plastic-contamination scientific evidence than discharge limits on other contaminants. Individually-collected waterborne plastics may become the preferred method of proof against plastic manufacturers. A District of South Carolina pending case affirmed that the plaintiffs have standing partially based on a similar production of plastic pellet bags.[21] In 2020, Formosa Plastics faced a permit challenge where the plaintiff citizen group cited the individually collected plastic in San Antonio to evidence a misconduct pattern.[22]

Now, in 2021, Formosa is facing a public challenge by environmental justice groups to stop the construction of a $9.4 billion complex in Baton Rouge, Louisiana’s, “Cancer Alley.”[23] The case emboldening local activism was not accidental. Following the decision, the plaintiff activists drove the plastic pellets that had been used as evidence to Baton Rouge.[24] The activists placed the pellet boxes outside the homes of four chemical industry lobbyists with notes reading “we have delivered this package . . . as a reminder—Louisiana does not need any more pollution, plastics, or otherwise.”[25]

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.

Graham H. Pough is a second-year student at The University of Texas School of Law and Senior Editor of the Texas Environmental Law Journal.

 

[1] Steven Mufson, Huge Plastics Plant Faces Calls for Environmental Justice, Stiff Economic Headwinds, The Wash. Post (Apr. 19, 2021), https://www.washingtonpost.com/climate-environment/2021/04/19/huge-plastics-plant-faces-calls-environmental-justice-stiff-economic-headwinds/.

[2] Frequently Asked Questions (FAQs) Which states consume and produce the most natural gas?, U.S. Energy Info. Admin., https://www.eia.gov/tools/faqs/faq.php?id=46&t=8 (last visited May 4, 2021).

[3] See Dan Glaun, The Plastic Industry is Growing During COVID. Recycling? Not So Much, Austin PBS (Feb. 17, 2021), https://www.pbs.org/wgbh/frontline/article/the-plastic-industry-is-growing-during-covid-recycling-not-so-much/; see also Jamie Smith Hopkins, Minuscule Pellets Keep Escaping Plastic Manufacturing Sites, Part of a Bigger Dilemma: How Can We Fix Plastic Waste Problems Amid a Production Boom?, The Ctr. for Pub. Integrity (June 13, 2019), https://publicintegrity.org/environment/pollution/pushing-plastic/as-the-world-grapples-with-plastic-the-u-s-makes-more-of-it-a-lot-more/.

[4] Mufson, supra note 1.

[5] San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp., 2019 WL 2716544, at *26 (S.D. Tex. June 27, 2019).

[6] Tex. Water Code § 26.027.

[7] Formosa, 2019 WL 2716544 at *3.

[8] Id.

[9] Id. at *7.

[10] Id. at *8 (quoting an expert witness).

[11] Id. at *11.

[12] Id. at *10.

[13] Port Wells & Ellen Gilmer, Formosa Settles Plastic Pellet Water Suit for $50 Million, Bloomberg Law (Oct. 15, 2019), https://news.bloomberglaw.com/environment-and-energy/formosa-settles-plastic-pellet-water-suit-for-50-million.

[14] Formosa, 2019 WL 2716544 at *3.

[15] 30 Tex. Admin. Code §307.4(b)(2)–(3).

[16] TCEQ Surface Water Quality Standards Advisory Work Group Meeting, Tex. Commission on Env’t Quality 10 (2020), https://www.tceq.texas.gov/assets/public/permitting/waterquality/standards/2021revision/ips-stakeholder-meeting-6-30-2020-2.pptx.

[17] Id.

[18] See generally Save Our Seas 2.0 Act, Pub. L. No. 116-224, 134 Stat. 1072 (2020) (“To improve efforts to combat marine debris, and for other purposes.”).

[19] Merkley, Lowenthal Lead Introduction of Congress’ most Comprehensive Plan to Protect Americans’ Health From Growing Plastic Pollution Crisis, Jeff Merkley U. S. Senator for Or. (Mar. 25, 2021), https://www.merkley.senate.gov/news/press-releases/merkley-lowenthal-lead-introduction-of-congress-most-comprehensive-plan-to-protect-americans-health-from-growing-plastic-pollution-crisis-2021.

[20] Greta Moran, The House Just Passed Another “Save Our Seas” Act. Here’s Why It Won’t., The Intercept (Oct. 7, 2020), https://theintercept.com/2020/10/07/save-our-seas-bill-plastics-pollution/.

[21] Charleston Waterkeeper v. Frontier Logistics, LP, 488 F.Supp.3d 240, 253 (D.S.C. Sept. 21, 2020).

[22] Plaintiffs’ Motion for Summary Judgment at 15, Center for Biological Diversity v. U.S. Army Corps of Engineers, WL 6041625 (D.D.C. 2020).

[23] Mufson, supra note 1.

[24] Id.

[25] Id.

Vol. 51-2 Water Rights & Utilities

Water Rights & Utilities

Delivery Credit of Evaporated Water: Texas v. New Mexico

Introduction

On December 14, 2020, the United States Supreme Court resolved a six-year-long deliver-credit dispute under the Pecos River Compact between Texas and New Mexico.

The Court held that New Mexico’s motion seeking delivery credit was timely.[1] On the merits, it held that New Mexico is entitled to the delivery credit of evaporated water stored at the request of Texas.[2]

The Pecos River Compact

The Pecos River originates in New Mexico and flows south into Texas, emptying into the Rio Grande River.[3] To equitably apportion the Pecos River’s water use, Texas and New Mexico signed the Pecos River Compact in 1948,[4] and, one year later, Congress approved the Compact to “‘provide for the equitable division’” and “‘remove causes of present and future controversies.’”[5] The Compact determines the amount of water that New Mexico has to deliver to Texas annually using an inflow-outflow method.[6] After some early disputes, in 1987 the Supreme Court issued a decree setting out the states’ rights and appointed a disinterested River Master to make the calculations.[7] Later, the Court integrated the River Master’s Manual as part of its amended decree and required the River Master to abide by the Manual when making the calculations.[8]

The Current Dispute

The current case’s dispute is rooted in a tropical storm that caused heavy rainfall in the Pecos River Basin in the fall of 2014.[9] The rain filled Red Bluff Reservoir in West Texas, just south of the New Mexico border.[10] In November, Texas’s Pecos River Commissioner wrote to his counterpart in New Mexico, requesting that New Mexico store Texas’ portion of the flow until Red Bluff Reservoir was ready to take it.[11] The New Mexico commissioner agreed and explained that the water “belongs to Texas” and that “‘[e]vaporative losses . . . should thus be borne by Texas’”.[12] Before the correspondence, the Bureau of Reclamation ordered New Mexico to hold the water in the Brantley Reservoir for safety concerns.[13] The flow was finally released to Texas in August 2015 and significant water had evaporated.[14]

The River Master did not calculate the water loss in his preliminary report but outlined a procedure for resolving this dispute.[15] According to the procedure, either state could file a motion to the River Master if they could not reach an agreement on a joint proposal.[16] In 2018, New Mexico filed a motion because negotiations between the states eventually broke down.[17] The River Master granted delivery credit for New Mexico, and Texas quickly moved for Supreme Court review, invoking the Court’s original jurisdiction.[18]

The Arguments of Texas and New Mexico

Texas argued that New Mexico forfeited the right to object to the River Master’s 2015 calculations by failing to follow the Manual’s deadlines, and that the River Master lacked authority to retroactively modify past reports without both states’ consent.[19] Texas claimed that the River Master erred in applying equitable tolling and in permitting New Mexico’s untimely request because the Manual deadlines are jurisdictional.[20]

Texas also argued that only limited circumstances under the Compact allow apportionment of evaporative losses occurring in New Mexico: under Article VI, the water is “unappropriated floodwater” or under Article XII, for consumptive use by the federal government when storing water “for use in” Texas.[21] Texas reasoned that because the water was not constructively held for use in Texas, Article XII does not apply.[22] Because the River Master decided the water was not unappropriated floodwater, Article VI does not apply.[23]

New Mexico argued that the equities weigh heavily in New Mexico’s favor.[24] It alleged that because the Court had “inherent authority to manage its amended decree” and the River Master’s authority was derived directly from the Court, he was empowered to take actions necessary to fulfill his duties, including adjusting deadlines and adopting procedures to address novel accounting issues.[25] A narrow interpretation of the River Master’s functions would defeat both the purpose for which the River Master was appointed and the Compact’s aim to promote interstate comity.[26] New Mexico argued that its motion was timely because it relied on the River Master’s devised procedure.[27] New Mexico further argued that “the plain language of the Compact, Amended Decree, and Manual” required Texas to bear the loss, and the record supported the River Master’s determination.[28] It framed the remedy it sought as a “one-time credit,” which was not a retroactive modification of the Manual but a correct application of equitable tolling doctrine.[29]

The Court’s Decision

The Court agreed with the River Master’s determination and denied Texas’s motion for review.[30] The Court disagreed with Texas’s first argument that the request was untimely.[31] It reasoned that because Texas had not objected to the River Master’s negotiation procedure, “it cannot run away from the procedure it agree[d] to.”[32] The Court ruled that the amended decree’s objections’ deadlines are not jurisdictional.[33]

On the merits, the Court agreed with New Mexico and the United States that the water was stored in New Mexico at Texas’s request.[34] The Court looked at the text of § C.5 of the Manual, which states:

If a quantity of the Texas allocation is stored in facilities constructed in New Mexico at the request of Texas, then . . . this quantity will be reduced by the amount of reservoir losses attributable to its storage, and, when released for delivery to Texas, the quantity released less channel losses is to be delivered by New Mexico at the New Mexico-Texas state line.[35]

The Court found that the stored water was part of the “Texas allocation” because the water would have flowed across the state line and counted toward Texas’s allocation but for the storage at Texas’s request.[36] The Court also found that New Mexico stored the water, clarifying § C.5 does not purport to define “stored” any way other than its ordinary meaning. The Court further found that Texas made the storage request.[37] In conclusion, the Court held that the text of § C.5 and the record evidence of the states’ correspondence established that the delivery credit should be granted to New Mexico.[38]

Justice Alito concurred in part and dissented in part.[39] He agreed that New Mexico did not forfeit any objection to the 2014 report but thought the River Master did not have the authority to change the amended decree.[40] He would have vacated and remanded the case because the relevance of Texas’s request for storage and New Mexico’s agreement with that request was unclear.[41]

Conclusion

The Court based its judgment on the Manual’s text and the correspondence between the Texas and New Mexico Pecos River Commissioners. It left some questions unaddressed. In the footnotes, the Court listed aspects of the River Master’s decision that were left unaddressed, which limited the case’s precedential value:[42] The Court did not reach the question of whether the River Master will have the authority to alter the amended decree. As Justice Alito pointed out, this may be inviting future problems. Moreover, the Court did not rule either on issues related to “unappropriated floodwaters” in the Complaint’s Article III or “consumptive use of water by the United States” in Article XII, leaving the interpretation of specific Compact terms open.

The case’s precedential value was further limited by the fact that a River Master was involved. For cases without the appointment of a River Master, the case does not provide much guidance for water-right lawyers.

Emily Willms Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Zhu Wen is a second-year student at The University of Texas School of Law and Staff Editor of the Texas Environmental Law Journal.

 

[1] Texas v. New Mexico, 141 S. Ct. 509, 514–15 (2020).

[2] Id. at 516.

[3] Id. at 512.

[4]Pecos River Compact, Office of the State Eng’r, https://www.ose.state.nm.us/Compacts/Pecos/isc_pecosCompact.php (last visited May 3, 2021).

[5] Texas v. New Mexico, 141 S. Ct. at 512.

[6] Id.

[7] Texas v. New Mexico, 482 U.S. 124, 137(1987).

[8] Texas v. New Mexico, 485 U.S. 388, 381 (1988).

[9] Texas v. New Mexico, 141 S. Ct. at 513.

[10] Id.

[11] Id.

[12] Id.

[13] Id. at 516.

[14] Id. at 513.

[15] Id.

[16] Id.

[17] Id. at 514.

[18] Id. at 514.

[19]Motion for Review of River Master’s Final Determination at 16, Texas v. New Mexico, 141 S. Ct. 509, 513 (2020).

[20] Id. at 20.

[21] Id. at 27.

[22] Id.

[23] Id.

[24] State of New Mexico’s Response to Texas’s Motion for Review of River Master’s Final Determination at 15, Texas v. New Mexico, 141 S. Ct. 509, 513 (2020).

[25] Id. at 19.

[26] Id.

[27] Id. at 33.

[28] Id. at 34.

[29] Id. at 27.

[30] Texas v. New Mexico, 141 S. Ct. 509, 512 (2020).

[31] Id. at 514–15.

[32] Id. at 515.

[33] Id.

[34] Id.

[35] Id. at 513 (emphasis in original).

[36] Id. at 515.

[37] Id. at 156.

[38] Id.

[39] Id.

[40] Id.

[41] Id.

[42] Id.

 

Vol. 51-2 Washington Update

Washington Update

Affordable Clean Energy Rule Vacated by the D.C. Circuit and What Could Be Next Under the Biden Administration

Introduction

President Biden campaigned on reforming the United States’ approach to addressing climate change. The “Biden Plan” includes, among other things, a goal to “ensure the U.S. achieves a 100% clean energy economy and reaches net-zero emissions by no later than 2050.”[1]

On President Biden’s first day in office, he issued numerous climate-related executive orders and took executive actions to advance this goal. As a result, the U.S. rejoined the Paris climate agreement,[2] federal agencies are required review all new and proposed Trump regulatory changes,[3] the Keystone XL pipeline permit was revoked[4], and oil and gas leasing in the Arctic National Wildlife Refuge was paused.[5]

While these executive orders could be implemented immediately, President Biden is likely to push for new legislation and engage in new rulemaking. In particular, President Biden is expected to address President Barack Obama’s Clean Power Plan (CPP) and President Donald Trump’s intended CPP replacement—the Affordable Clean Energy Rule (ACE Rule), which the U.S. Court of Appeals for the D.C. Circuit recently struck down.

ACE Rule as a Replacement to the Clean Power Plan

In 2015, the Obama Administration enacted the CPP to regulate power plants’ greenhouse gas (GHG) emissions.[6] Deriving its authority from the Clean Air Act’s Section 111(d), the CPP established budgets (or targets) for each state’s GHG emissions generation and directed each to develop GHG emissions-reduction plans statewide.[7] The CPP effectively required each state to create plans that would phase out coal from power plants and increase renewable energy generation. The goal was to decrease the power sector’s emissions so that 2030’s emissions are 32% less than 2005’s emissions.[8]

The plan faced legal challenges almost immediately after it was unveiled. These challenges were consolidated in a case brought before the D.C. Circuit. In February 2016, during the pendency of the case’s appeal, the Supreme Court issued an order that stayed the CPP’s implementation, pending a decision on the merits by the D.C. Circuit.[9] President Trump was elected before the D.C. Circuit could rule, and his administration replaced the CPP with the ACE Rule.

The ACE Rule emphasized a much narrower reading of the CAA’s authority. The Rule, finalized in June 2019, also repealed the CPP on the grounds that it unlawfully required states “to consider emission reductions through generation shifting,” like moving generation away from coal.[10] Instead, the ACE Rule emphasized heat rate improvements (or efficiency improvements) that could be achieved “inside the fence” of each regulated electric generating unit.[11]

Just prior to President Biden’s inauguration, the D.C. Circuit vacated the ACE Rule and its plan to relax power plants’ GHG emissions’ restrictions.[12] The Court called the ACE Rule a “fundamental misconstruction” of the CAA,[13] and rejected the Trump Administration’s narrow reading of its statutory authority as “not supported by the text, let alone plainly and unambiguously required by it.”[14]

Specifically, the Court rejected the Trump Administration’s CAA interpretation that Section 111(d) constrained emissions reduction methods to site-specific, inside-the-fence locations (i.e., “at and to the source”).[15] Instead, the Court reasoned that “Congress imposed no limits on the types of measures the EPA may consider beyond three additional criteria: cost, any non-air quality health and environmental impacts, and energy requirements.”[16]

Importantly, on February 22, 2021, the D.C. Circuit granted EPA’s request to partially stay its decision as it applied to the Trump EPA’s CPP repeal.[17] As a result, the CPP did not immediately go back into effect, leaving a clear path for the Biden EPA to develop a new rule limiting power plants’ GHG emissions.

A former Obama Administration legal counsel, Jody Freeman, called the ruling a “massive win” and argued that Biden “could go on the offense” immediately in crafting a new power plant plan.[18]

Potential Next Steps for the Biden Administration

The vacating of the ACE Rule grants the Biden administration an opportunity to develop a new regulatory structure to address the power industry’s GHG emissions. So long as the D.C. Circuit decision is upheld, the Biden Administration is not required to go through the extensive regulatory process of repealing the ACE Rule.

The Biden administration has indicated that it does not intend to revive the CPP.[19] During Biden’s EPA Administrator nominee’s, Michael Regan, confirmation hearings, Mr. Regan testified that the EPA would draw on the lessons from the CPP and ACE Rules, and that the current lack of an existing standard “‘presents a significant opportunity for the [EPA] to take a clean slate and look at how [to]] best move forward.”[20] At the time of this development’s drafting, the Biden Administration had not set forward a regulatory or legislative plan to address GHG emissions from power plants, though one is certainly expected during the President’s term.

Potential Obstacles to the Biden Administration

Though the D.C. Circuit struck down the ACE Rule, the Rule may not be entirely finished. Its proponents can mount challenges to prolong its life. Among their options, the litigants could petition for panel reconsideration of remedy or petition for rehearing en banc. Following the D.C. Circuit’s final decision on these appeals, the litigants could also appeal to the U.S. Supreme Court. These appeals’ outcomes may allow the ACE Rule to remain in place pending resolution of the hearing.

Conclusion

Regardless of whichever path the Biden Administration may take in replacing the CCP and ACE Rule, one outcome is certain: there will be continued legal battles. Any replacement rule issued by the Biden administration, even if accounting for legal concerns previously articulated by CPP opponents, will still likely be subject to extensive legal challenges in the D.C. Circuit, and if necessary, before the Supreme Court.

Jacob Arechiga is a Special Counsel in Duane Morris LLP’s Austin, Texas, office. His practice is focused on complex commercial matters, particularly those in the energy and electric power industries.

Matthew T. Goldstein is a third-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] The Biden Plan for a Clean Energy Revolution and Environmental Justice, Joe Biden, https://joebiden.com/climate-plan/ (last visited May 1, 2021).

[2] See Statement on Acceptance of the Paris Agreement on Climate Change on Behalf of the United States, Daily Comp. Pres. Doc. (2021).

[3] See Exec. Order No. 13990, 86 Fed. Reg. 7037 (Jan. 20, 2021).

[4] Id.

[5] Id.

[6] See U.S. Env’t Prot. Agency, Overview of the Clean Power Plan: Cutting Carbon Pollution from Power Plants 3 (2021), https://archive.epa.gov/epa/cleanpowerplan/fact-sheet-overview-clean-power-plan.html.

[7] Id.

[8] Id.

[9] West Virginia v. Env’t Prot. Agency, Order in Pending Case, 15A773 (Feb. 9, 2016).

[10] Repeal of the Clean Power Plan; Emission Guidelines for Greenhouse Gas Emissions From Existing Electric Utility Generating Units; Revisions to Emission Guidelines Implementing Regulations (“ACE Rule”), Final Rule, 84 Fed. Reg. 32,520, 32,523-32,524 (July 8, 2019).

[11] U.S. Env’t Prot. Agency, Fact Sheet: Overview of the Final ACE Rule 1, https://www.epa.gov/sites/production/files/2019-06/documents/bser_and_eg_fact_sheet_6.18.19_final.pdf .

[12] Am. Lung Ass’n v. Env’t. Prot. Agency, 985 F.3d 914, 930 (D.C. Cir. 2021).

[13] Id.

[14] Id. at 951.

[15] Id. at 945.

[16] Id. at 946.

[17] Order, Am. Lung Ass’n v. Env’t Prot. Agency, No. 19-1140, 2021 U.S. App. LEXIS 1333 (D.C. Cir. Feb. 22, 2021).

[18] Lisa Friedman, Court Voids a ‘Tortured’ Trump Climate Rollback, The New York Times (Jan. 19, 2021), https://www.nytimes.com/2021/01/19/climate/trump-climate-change.html.

[19] Jean Chemnick, Biden won’t revive Obama’s Clean Power Plan. So Now What?, E&E News (Feb. 9, 2021), https://www.eenews.net/stories/1063724547.

[20] Id.

Vol 51-2 State Casenote

State Casenote

Lyle v. Midway Solar, L.L.C., 08-19-00216-CV, 2020 WL 7769632 (Tex. App.—El Paso Dec. 30, 2020, pet. filed)

Introduction

On December 30, 2020, the Eighth Court of Appeals in, El Paso, Texas, affirmed in part, reversed in part, and remanded a district court’s decision granting Midway Solar, L.L.C. and Gary Drgac’s motions for partial summary judgment.[1] Because the mineral estate owners had no plans to develop the estate, the court ruled that the breach of contract ach and trespass claims were not ripe for review.[2] Additionally, it determined that certain waiver agreements clouded these owners’ title.[3]

Background

The Lyles owned a portion of an undeveloped mineral estate located on a 315-acre land tract (Section 14).[4] Their ownership derived from a 1948 deed, in which the tract’s owners transferred surface ownership to a third party while reserving the mineral interest to themselves.[5] The Lyles had never leased their interest to a developer and had no plans to develop the mineral estate themselves.[6] When the case was heard, Gary Drgac owned Section 14’s surface rights and had no interest in the mineral estate.[7] In October 2015, Drgac entered into a lease with Midway Solar, L.L.C., allowing it to build a solar energy facility on a portion of Section 14 and other adjoining tracts of land in which he had an ownership interest.[8] Midway later obtained waiver agreements from the mineral interest owners in the adjoining tracts.[9] These waivers relinquished the owners’ rights to use the leased areas’ surface for mineral exploration, and while some agreements purported that the owner had mineral rights in Section 14, no owner actually did.[10] Midway subsequently corrected this error and attached a “Disclaimer of Interest” to all of the waivers.[11]

After the solar facility’s construction, the Lyles sued Midway, Drgac, and the surface waiver signers, alleging breach of contract and trespass, and seeking a declaration quieting title in their mineral estate.[12] They sought damages for the trespass and breach of contract claims for the diminished value of their mineral estate as well as an injunction to remove the facility portions that were encroaching on their mineral interest and easement rights.[13] The trial court granted Midway and Drgac’s partial summary judgment motions as to the quiet title, breach of contract, and trespass claims.[14] The Lyles appealed.

The Trespass and Breach of Contract Claims

The court’s analysis started with the question of whether the accommodation doctrine applied.[15] The court explained that the accommodation doctrine was meant to balance mineral estate owners’ and surface estate owners’ rights when the estates have been severed by conveyance.[16] Quoting the Texas Supreme Court, it stated that the doctrine “holds that the ‘mineral and surface estates must exercise their respective rights with due regard for the other’s,’ and has in general provided a ‘sound and workable basis’ for resolving conflicts between ownership interests.”[17] However, the court also made clear that because Texas public policy favors freedom of contract, the accommodation doctrine will not apply to cases in which the express deed or contract terms determines the parties’ rights.[18] Taking both the interests of balancing respective owners’ rights and freedom of contract into account, the court articulated that “when the parties’ deed or contract is silent or unclear on the parties’ respective rights, or when there is substantial disagreement regarding the parties’ intent in the terms used in a deed, the accommodation doctrine will be applied.”[19]

The Lyles argued that the accommodation doctrine should not apply, pointing to a deed provision they claimed expressly described the parties’ rights.[20] The provision provided that “[g]rantors further reserve unto themselves . . . the right to such use of the surface estate . . . as may be usual, necessary or convenient in the use and enjoyment of the oil, gas, and general mineral estate . . . .”[21] Conceding that courts have found the terms “necessary” and “convenient” too imprecise to prevent the accommodation doctrine’s application, the Lyles argued that the word “usual” expressed the grantor’s intent to reserve the right to use vertical drilling—the usual drilling method at the time the deed was signed.[22] The court rejected this argument. First, it pointed out that the deed did not use the term “usual” in the specific context of drilling methods. Second, it noted that the deed did not make clear whether the term was intended to apply to the methods of extracting minerals at the time it was signed (1948) as those methods might evolve over time.[23] Because of this, the court reasoned that there was “room for substantial disagreement as to what the grantors meant in using that term.”[24]

After determining the accommodation doctrine applied, the court considered what it deemed to be the centerpiece of the dispute: the question of whether the Lyles must have been currently using or planning to use the surface of their estate for mineral development in order for their claim to be ripe for review.[25] The Lyle’s argued that because they had already suffered damages as a result of Midway’s solar facility construction—namely, a decrease in the mineral estate’s value—their claims were ripe for review.[26] In response, Midway claimed their facility’s interference with the mineral estate was only potential, and argued that until there is actual interference, the Lyles could not unilaterally dictate the surface’s use.[27]

The court ultimately decides that the question of whether Midway must accommodate the Lyles’ potential property use before they actually seek to use it is not directly addressed by prior case law.[28] Instead, the court suggests that “the answer to that question lies in a proposition of logic, as much as one of law.”[29] As the court formulated it, the Lyles had the surface-use right, but only as an adjunct to their mineral estate.[30] If they exercise this right to develop the minerals, then Midway must yield to the extent required by the accommodation doctrine.[31] If this right is not exercised, then there is nothing for Midway to accommodate.[32] Put more succinctly, “until the Lyles seek to develop their minerals, Midway owes no duty to the Lyles respecting the surface usage.”[33] The court implied that any other result would lead to damages that were too speculative, as the damages calculation based on a diminution of the mineral estate’s value could vary significantly depending on when the Lyles attempted to develop or market the estate.[34] While the court conceded that such a calculation may become necessary once the Lyles attempt to develop the estate, it stressed that “[t]here is simply no logic in allowing trespass damages today for a mineral estate that may never be developed.”[35]

Quiet Title Claims

The Lyles also argued that the surface waiver agreements Midway obtained from the adjacent-land-tracts mineral owners created a cloud on their title. They claimed that because the agreements purported to relinquish the right to use Section 14’s surface for mineral developments, they implied that they held such rights.[36] The Lyles thus sought a judgment declaring the waivers invalid and void.[37] In response, Midway argued that the waivers did not create a cloud on the Lyle’s title, and even if they did, Midway removed the cloud by correcting some of the waivers and adding a Disclaimer of Interest to all.[38]

In rendering its judgment, the court split the waiver agreements into three categories. In the first, the mineral owners stated that they owned a mineral interest in certain lands described by Midway’s leases; these leases covered Section 14.[39] Because the owners claimed an interest in Section 14 that they did not have—the invalidity of which could only be discerned by extraneous documents’ use—the court ruled that the agreements cast a cloud on the Lyles’ title.[40]

The second category consisted of agreements that stated the mineral owners “had interests under some portion of or all of” the lands described in the Midway leases.[41] Because an exhibit attached to the agreements expressly stated that the mineral owners had interests only in lands not including Section 14, the court ruled that these waivers did not constitute a cloud on the Lyles’ title.[42]

The third set of waivers was comprised of agreements essentially the same as those in the second category, except no exhibit clarifying the owners’ interests was attached.[43] Though Midway eventually altered these agreements by crossing out references to Section 14, the court found that these agreements still cloud the Lyles’ title because none of these alterations were done in accordance with the Property Code.[44]

According to the court, Midway’s filing of the Disclaimer of Interest did not prevent any of the agreements from clouding the Lyles’ title.[45] The Disclaimer only stated that the agreements did not grant Midway any mineral-estate-development rights under Section 14 because it was the mineral owners who purported to claim an interest in Section 14 rather than Midway.[46] The court concluded that the Disclaimer of Interest did not correct the problem.[47]

Conclusion

The appeals court concluded that the trial court did not err in granting summary judgment on the trespass and breach of contract claims, but that its dismissal should have been made without prejudice.[48] Additionally, the court determined that the trial court erred in granting summary judgment to Midway and Drgac on the Lyles’ claim for quiet title as it pertained to certain waiver agreements but did not err in granting the same as it pertained to others.[49]

Stacie M. Dowell is associate counsel for the Trinity River Authority of Texas and works on a wide variety of legal issues spanning contract, employment, business, property, and water law.

Samuel G. Dreggors is a third-year student at The University of Texas School of Law and Staff Editor of the Texas Environmental Law Journal.

 

[1] Lyle v. Midway Solar, L.L.C., No. 08-19-00216-CV, 2020 WL 7769632 at *1 (Tex. App.—El Paso Dec. 30, 2020, pet. filed).

[2] Id. at *12.

[3] Id. at *13–*15.

[4] Id. at *1.

[5] Id.

[6] Id.

[7] Id.

[8] Id. at *2.

[9] Id. at *3.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Id. at *3–*5.

[15] Id. at *6.

[16] Id.

[17] Id. (quoting Coyote Lake Ranch, L.L.C., v. City of Lubbock, 498 S.W.3d 61, 63 (Tex. 2016)). 

[18] Id. at *7.

[19] Id.

[20] Id. at *7.

[21] Id.

[22] Id. at *7–*8.

[23] Id. at *8.

[24] Id.

[25] Id. at *9.

[26] Id.

[27] Id. at *11.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id.

[37] Id. at *12.

[38] Id.

[39] Id. at *13.

[40] Id.

[41] Id. at *14.

[42] Id.

[43] Id.

[44] Id. at *14–*15.

[45] Id. at *15.

[46] Id.

[47] Id.

[48] Id. at *16.

[49] Id.

Vol. 51-2 Recent Publications

Recent Publications

Review of Noah M. Sachs, Toxic Floodwaters: Strengthening the Chemical Safety Regime for the Climate Change Era

Introduction

In Toxic Floodwaters: Strengthening the Chemical Safety Regime for the Climate Change Era, Noah M. Sachs discusses the seldom-discussed risks posed by toxic chemicals’ release from storage facilities as a result of flooding.[1] Sachs defines “toxic floodwaters” as the dangerous floodwaters that flow through industrial sites and transport a mixture of contaminants (e.g. toxic chemicals, oil, sewage) to nearby communities.[2] As floods grow more frequent and severe, as a result of climate change, and rising sea levels become more imminent,[3] vulnerable communities face increased flooding and exposure to hazardous waste threats.[4]

Sachs’s article is separated into three sections.[5] First, Sachs examines toxic floodwaters’ threat. Then, he compares private versus public legal remedies’ suitability to combat the danger of toxic floodwaters and argues that public law is the better approach. Finally, he proposes specific changes to the existing chemical safety regime to better protect against these toxic floodwaters.

Examining Toxic Floodwaters

Sachs first documents some of the unique toxic-floodwaters challenges, which are most effectively studied in the aftermath of hurricanes, when toxic contaminant spread is the most intense and perceptible.[6] Hurricane Katrina first brought attention to contaminated floodwaters after researchers studied the release of oil and toxic chemicals and their effect on nearby communities.[7] Sachs also notes the long-term health risks of those Hurricane Harvey affected.[8] Yet, studying toxic-floodwaters effects is difficult because waters are rarely tested at the high water mark during a flood, when the risk of human exposure is greatest.[9]

It remains clear, however, that toxic-flooding harms are not borne equally across racial and class lines. The risk that a given facility poses to a community depends on the site’s substances’ volume and toxicity and those substances’ storage conditions.[10] Communities of color and low-income residents of low-lying areas are the most vulnerable to toxic floodwaters.[11] This is due in part to a transportation lack, which makes evacuation during a flood less practical.[12] For the same reason, elderly communities and small children are especially at risk. Children also have a higher proportion of skin surface area to body weight, making them physically vulnerable.[13]

Private Law Versus Public Law

Sachs then compares private and public legal solutions. Private law, which has been the main mechanism to address contaminant discharge, relies heavily on common law areas such as tort law, where behavior is modified by a facility’s perceived liability risk in the event of a disaster. Sachs argues that, unlike the private mechanisms such as tort liability or the insurance premium costs, public law might provide a more direct incentive to take preventive steps against floodwater dangers.[14] In his analysis, Sachs draws heavily on factors set out by the economist, Steve Shavell, to support a public law approach.[15] Sachs notes that toxic floodwaters create a magnitude of harm that exceeds potentially liable firms’ assets and that it is difficult to trace the harm’s source once contaminants mix and leave a facility during a flood.[16] Furthermore, injured community members may not promptly bring a tort claim, because chemical exposure effects may not manifest for years.[17] Once community members eventually bring a tort suit, they face the difficulty of proving causation and a facility’s failure to meet a standard of reasonable care in storing chemicals during a destructive flood.[18] Therefore, Sachs argues, the threat of tort liability is insufficient and unlikely to deter firms from unsafe storage practices.[19] Sachs examines government regulatory mechanisms and their success in preventing unsafe practices and mitigating vulnerable communities’ chemical exposure resulting from flooding.

Proposed Regulations

Finally, Sachs proposes specific regulatory changes that could help prepare for toxic floodwaters’ inevitable crises.[20] Sachs advocates a shift from the historical regulatory focus on toxic chemicals’ intentional discharge that reaches consumers and workers to a focus on chemical storage and accidental releases.[21] For example, current statutes limit what can be discharged, but not where facilities can be sited, which, if regulated, could prevent future toxic floodwaters.[22] Additionally, toxic floodwaters arise from chemical storage, not just chemical waste. Many otherwise harmless but commercially useful chemicals might be hazardous as chemical waste during a flood.[23] Therefore, the 1976 Resource Conservation and Recovery Act (RCRA), which regulates only the storage of hazardous waste, is inadequate.[24]

Sachs argues that, first, policymakers should compile an inventory of the most dangerous chemical storage facilities that are flood-exposed, so that they may be inspected before chemicals are discharged.[25] Then, he proposes three steps: Establish federal standards that cover non-oil substances and accidental discharges; update requirements for emergency planning and notifying vulnerable communities by, for example, strengthening the 1986 Emergency Planning and Community Right to Know Act (EPCRA); and prohibit new facilities in at-risk areas.[26]

Conclusion

Sachs’s article raises an issue that requires urgent attention. Not only will climate change increase the frequency of hurricanes and rainfalls generally, but rising sea levels will submerge coastal areas.[27] Beyond correcting for toxic floodwater disasters that manifested during recent hurricanes, aggressive steps must be taken to prevent the crises on the horizon.

Sachs’s article also overcomes a very common challenge: When existing protocols are clearly inadequate, it can still be difficult to demonstrate that new ones will fill the gap. However, Sachs carefully illustrates our current public law mechanisms’ very clear shortcomings and offers concrete improvements. By creating an inventory of the most dangerous facilities and taking simple but aggressive steps to update our current regulatory regime, we might effectively mitigate some of toxic floodwater dangers that will otherwise be gravely exacerbated by future climate catastrophes.

Josh Katz is a partner at Bickerstaff Heath Delgado Acosta LLP and represents public and private entities before agencies and in state and federal court in the areas of environmental law, municipal law, water rights, and utilities.

Jackson R. Bright is a third-year student at The University of Texas School of Law and Staff Editor of the Texas Environmental Law Journal.

 

[1] Noah M. Sachs, Toxic Floodwaters: Strengthening the Chemical Safety Regime for the Climate Change Era, 46 Colum. J. Env’t L. 73 (2020).

[2] Id. at 75.

[3] See Melissa Denchak, Flooding and Climate Change: Everything You Need to Know, Natural Resources Defense Counsel (Apr. 10, 2019), https://www.nrdc.org/stories/flooding-and-climate-change-everything-you-need-know.

[4] Sachs, supra note 1, at 75.

[5] Id. at 79.

[6] Id. at 80.

[7] Id. (citing Danny Reible, Hurricane Katrina: Environmental Hazards in the Disaster Area, 9 Cityscape 53 (2007)).

[8] Id. at 83 (citing Juanita Constible, The Emerging Public Health Consequences of Hurricane Harvey, NRDC: Expert Blog (Aug. 29, 2018), https://perma.cc/5CXZ-EXX9).

[9] Id. at 85.

[10] Id. at 86.

[11] Id. at 84.

[12] Id. (citing Adrian Florido, Why Stay During a Hurricane? Because It’s Not As Simple As ‘Get Out’, NPR (Oct. 18, 2018), https://perma.cc/5VCF-7DJB).

[13] Id. at 84–85 (citing World Health Organization, Summary of Principles for Evaluating Health Risks in Children Associated with Exposure to Chemicals 22 (2011)).

[14] Id. at 95.

[15] Sachs summarizes Shavell’s four factors to analyze liability-based versus regulatory approaches as “the knowledge gap between firms and regulators, the risk-producing party’s ability to financially cover any damage claims, the likelihood that firms may not face the threat of suit for harm done, and the relative administrative costs of relying on private law or public law.” Id. at 95–96 (citing Steven Shavell, Liability for Harm versus Regulation of Safety, 13 J. Legal Stud. 357 (1984)). 

[16] Id. at 98.

[17] Id. at 101.

[18] Id. at 101–02.

[19] Id. at 100–01. 

[20] Id. at 106.

[21] Id. at 78.

[22] Id. at 106.

[23] Id. at 107 (citing Agents Classified by the IARC Monographs, Volumes 1-127, Intl. Agency for Research on Cancer, https://perma.cc/Y56R-RZWF (last visited May 2, 2021); Known and Probable Human Carcinogens, Am. Cancer Soc’y, https://perma.cc/2ZQS-SKPX (last visited May 2, 2021)).

[24] Id. at 107.

[25] Id. at 108.

[26] Id. at 109.

[27] Id. at 89.

Vol. 51-2 Natural Resources

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.

 

[1] Sierra Club v. Fed. Energy Regulatory Comm’n, 867 F.3d 1357, 1363 (D.C. Cir. 2017).

[2] Id.

[3] Sierra Club, 867 F.3d at 1374.

[4] Petition for Panel Rehearing, Sierra Club, 867 F.3d 1357 (D.C. Cir. 2017) (Nos. 16-1329, 16-1387).

[5] Order, Sierra Club, 867 F.3d 1357 (D. C. Cir. 2017) (No. 16-1329) (denying the petition for rehearing).

[6] Motion of Intervenor-Respondents for 90-Day Stay of Issuance of Mandate, Sierra Club, 867 F.3d 1357 (D.C. Cir. 2017) (No. 16-1329).

[7] Id.

[8] Response of Petitioners Sierra Club et al., Sierra Club, 867 F.3d 1357 (D. C. Cir. 2017) (Nos. 16-1329, 16-1387).

[9] Order, Sierra Club, 867 F.3d 1357 (D. C. Cir. 2017) (No. 16-1329) (granting FERC’s motion to stay the mandate’s issuance).

[10] Id.

[11] Fla. Se. Connection, LLC, 163 ¶ 61,233 (2018).

[12] Dominion Transmission, Inc. 163 ¶ 61,128 (2018).

[13] Letter from Maya K. van Rossum, Del. Riverkeeper, Del. Riverkeeper Network, to Kimberly D. Bose, Sec’y, Fed. Energy Regulatory Comm’n (May 26, 2018) (on file with FERC).

[14] Letter from Barbara D. Underwood, Attorney Gen. of N.Y., N. Y. State Office of the Attorney Gen., to Kimberly D. Bose, Sec’y, Fed. Energy Regulatory Comm’n (July 10, 2018) (on file with New York Attorney General’s Office).

[15] Jeffrey M. Karp, FERC Continues to Forge Its Own Path in Considering Climate Impacts in Pipeline Applications, Lexology (Jan. 14, 2019), https://www.lexology.com/library/detail.aspx?g=b7aab6c4-9fa1-422f-bb57-8d6b95e1d46f.

[16] N. Plains Res. Council v. U.S. Army Corps of Engineers, 454 F.Supp 3d 985, 996 (D. Mont. 2020).

[17] Supreme Court Revives Clean Water Act General Permit for Pipeline and Utility Line Projects, Perkins Coie (July 15, 2020), https://www.jdsupra.com/legalnews/supreme-court-revives-clean-water-act-12507/.

[18] Id.

[19] Motion for Partial Stay Pending Appeal by Transcanada Keystone Pipeline, LP and TC Energy Corporation, N. Plains Res. Council, 454 F.Supp.3d 985 (D. Mont. 2020).

[20] Order Amending Summary Judgment Order and Order Regarding Defendants’ Motions for Stay Pending Appeal, N. Plains Res. Council, 454 F.Supp.3d 985 (D. Mont. 2020).

[21] Application for a Stay Pending Appeal to the Unites States Court of Appeals for the Ninth Circuit and Pending Further Proceedings in this Court, N. Plains Res. Council, 454 F.Supp.3d 985 (D. Mont. 2020) (No. 19A-1053).

[22] Id.

[23] Motion for Leave to File Brief, N. Plains Res. Council, 454 F.Supp.3d 985 (D. Mont. 2020) (No. 19A-1053).

[24] Order, N. Plains Res. Council, 454 F.Supp.3d 985 (D. Mont. 2020) (No. 19A-1053) (granting the application for stay in part).

[25] Id.

[26] Press Release: In Yet Another Blow to Keystone XL, Supreme Court Rejects Bid to Revive Key Water Crossing Permit, Northern Plains Resource Council (July 6, 2020), https://northernplains.org/press-release-scotus-rejects-nw12-construction/; States sue Biden in bid to revive Keystone XL pipeline, Associated Press (Mar. 17, 2021), https://apnews.com/article/joe-biden-donald-trump-ken-paxton-lawsuits-montana-0cf1a378a99ade52cd8b24bb61313ba9.

[27] Northern Plains Resource Council v. U.S. Army Corps of Engineers, U.S. Chamber Litig. Ctr. (Sept. 23, 2020), https://www.chamberlitigation.com/cases/northern-plains-resource-council-v-us-army-corps-engineers.

[28] Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 440 F.Supp.3d 1 (D.D.C. 2020).

[29] Id. at 8.

[30] Id.

[31] Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 471 F.Supp.3d 71, 88 (D.D.C. 2020).

[32] Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 2020 U.S. App. LEXIS 25580 (D.C. Cir. 2020).

[33] Id.

[34] Brief for Appellant at 20, 32, 33, 34, Standing Rock Sioux Tribe, 2020 U.S. App. LEXIS 25580 (D.C. Cir. 2020) (No. 20-5201).

[35] United States Army Corps of Engineers’ Status Report, Standing Rock Sioux Tribe, 2020 U.S. App. LEXIS 25580 (D.C. Cir. 2020).

[36] Notice of Intent To Prepare an Environmental Impact Statement for an Easement to Cross Under Lake Oahe, 85 Fed. Reg. 55,843 (Sept. 10, 2020).

[37] The Standing Rock Sioux Tribe’s Litigation on the Dakota Access Pipeline, EarthJustice, https://earthjustice.org/features/faq-standing-rock-litigation (last visited May 2, 2021).

[38] Plaintiff’s Motion for Clarification and a Permanent Injunction, Standing Rock Sioux Tribe, 2020 U.S. App. LEXIS 25580 (D.C. Cir. 2020).

[39] Todd Neeley, States, Ag Battle for Dakota Access Pipeline—DTN, AgFax (Dec. 15, 2020), https://agfax.com/2020/12/15/states-ag-battle-for-dakota-access-pipeline-dtn/.

[40] Cliff Rothenstein et al., A New Normal? Trump Administration Retooling Of Core NEPA Elements, K&L Gates (July 23, 2020), https://www.klgates.com/a-new-normal-trump-administration-retooling-of-core-nepa-element-7-23-2020.

[41] Id.

[42] Id.

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] Cong. Research Serv., The Congressional Review Act (CRA): Frequently Asked Questions 1 (2020).

[48] Jennifer Adams et al., Environmental Law outlook under a Biden Administration, Lexology (Nov. 9, 2020), https://www.lexology.com/library/detail.aspx?g=d709f96f-8d10-41db-b2fa-8ebaae16e632.

[49] Id.

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. 51-2 Air Quality

Air Quality

Contested Air Permit Leads to Filing of Civil Rights Complaint with EPA

Introduction

In 2014, Valero Refining submitted an application to amend air permit 2501A for the Fluid Catalytic Cracking Unit (FCCU) at its Manchester (Houston) refinery.[1] The application sought to consolidate several New Source Review (NSR) authorizations pertaining to the existing emission levels’ operation.[2] The application also requested the permit reference hydrogen cyanide (HCN) existing emissions in response to pending EPA action about such emissions’ regulation under the National Emission Standards for Hazardous Air Pollutants (NESHAPS) program.[3] Following public notice issuance met with significant opposition from Hispanic groups and elected officials, public meetings were held on June 4, and September 20, 2018.[4] Based on Valero’s direct referral request, the application was transferred to the State Office of Administrative Hearings, which held a preliminary hearing to establish jurisdiction and parties and then referred the case for mediation.[5] The mediation was successful and the agreement’s terms, including significant reductions in allowable HCN emission rates, were forwarded to the Texas Commission on Environmental Quality (TCEQ) on March 15, 2021.[6] However, as discussed below, the public notice, comment, and public meetings processes during the application’s pendency led to significant criticism of the TCEQ, the complaint’s filing with the EPA under the federal Civil Rights Act of 1964 Title VI, and proposed TCEQ public-participation-rules changes.

Title VI generally

Title VI of the Civil Rights Act of 1964 provides that no program receiving federal funds, which includes the TCEQ, may discriminate against people based on their race, color, or national origin.[7] It directs individual agencies to hold hearings to determine if a program is not complying with the non-discrimination requirement.[8] If determined noncompliant, the agency advises the program of its status and may seek to bring them into compliance voluntarily.[9] If the program remains out of compliance, the agency may file a written report to the relevant House and Senate committees and then terminate the program’s funding.[10]

EPA’s Title VI Enforcement Mechanism

The EPA enforces Title VI and other civil rights laws through its External Civil Rights Compliance Office (ECRCO).[11] ECRCO does not conduct proactive compliance reviews of funded programs, but investigates complaints received from citizens or whistleblowers.[12] Title VI complaints can be submitted through an online form[13] and must identify the discriminating entity and allege the Title VI violation.[14] Complaints must be filed within 180 days of the last discriminating act.[15] The EPA’s regulations provide that the agency has 180 days to respond to a complaint.[16]

EPA’s Actual Enforcement

The EPA has historically failed to respond to most Title VI discrimination claims.[17] In 2015, five environmental groups—which included the Sierra Club of Texas—filed a complaint in a Californian U.S. District Court[18] alleging the EPA failed to respond to their Title VI complaints.[19] The court ruled in the groups’ favor at summary judgement.[20] The EPA settled with the complainants, agreeing to respond more quickly to the five groups’ Title VI complaints.[21]

In late 2019, environmental groups, including the Sierra Club of Texas, filed a Title VI complaint against the TCEQ based on the public participation process in connection with the Valero permit amendment application.[22] The complaint alleged the TCEQ had failed to offer adequate language interpretation at public meetings, which were held primarily in Spanish speaking areas.[23] ECRCO accepted the complaint, and the TCEQ, the EPA, and the environmental groups entered into settlement discussions.[24] Additionally, a petition for the adoption of rules was filed with the TCEQ, and on December 18, 2019, the TCEQ directed that a rule-making proposal be developed. On November 3, 2020, an Informal Resolution Agreement was signed by the EPA and the TCEQ. Following three stakeholder meetings in October 2020, the TCEQ approved proposed rules for publication in the Texas Register on March 10, 2021.[25]

 

John Turney is retired Senior Counsel of Richards Rodriguez & Skeith and represented regulated companies in a variety of environmental and administrative matters before the TCEQ and other regulatory agencies.

June Hormell is a second-year student at The University of Texas School of Law and Symposium Director for the Texas Environmental Law Journal.

 

[1] Tex. Comm’n on Env’t Quality, Consolidated Notice of Receipt of Application and Intent to Obtain Air Permit, Notice of Preliminary Decision, and Notice of Public Meeting, Permit Number 2501A 1 (2018), https://www.tceq.texas.gov/assets/public/comm_exec/pm-ph/notices/2018
/2018-09-20-valero-refining-texas-lp-2501a-napd-pm.pdf.

[2] Valero Refining-Texas L.P., TCEQ New Source Review Permit Amendment Application 1-1 (2014), https://valeroapps.valero.com/public/filings/Houston-Air/01%20Valero%20NSR%20Permit%202501A%20Amendment%20Application%20(combined).pdf.

[3] Id. at 1-1, 55.

[4] Keith Rushing, Isabel Segarra Trevino, & Yvette Arellano, Texas Environmental Agency Faces Charges of Federal Civil Rights Violations, EarthJustice (Nov. 12, 2019), https://earthjustice.org/news/press/2019/texas-environmental-agency-faces-charges-of-federal-civil-rights-violations.

[5] See Valero Refining-Texas L.P., Permit No. 2501A Amendment – Addition of HCN Emission Limit Application Supplement, Final Draft Permit- Requested Revisions from SOAH Mediation 1 (2021), https://valeroapps.valero.com/public/filings/Houston-Air/12%20Submittal%20Letter_HC%20Agreement%203-15-21.pdf.

[6] Id.

[7] Civil Rights Act of 1964, Pub. L. No. 88-352, § 601, 78 Stat. 241, 252–53 (codified as amended at 42 U.S.C. § 2000d).

[8] Civil Rights Act of 1964, Pub. L. No. 88-352, § 602, 78 Stat. 241, 252–53 (codified as amended at 42 U.S.C. § 2000d); 42 U.S.C. § 2000d.

[9] Id.

[10] Id.

[11] External Civil Rights Compliance Office (Title VI), Env’t Prot. Agency, https://www.epa.gov/ogc/external-civil-rights-compliance-office-title-vi (last updated Feb. 22, 2021).

[12] U.S. Env’t Prot. Agency Office of Inspector Gen., Improved EPA Oversight of Funding Recipients’ Title VI Programs Could Prevent Discrimination 10 (2020), https://www.epa.gov/sites/production/files/2020-09/documents/_epaoig_20200928-20-e-0333.pdf.

[13] Filing a Discrimination Complaint Against a Recipient of EPA Funds, Env’t Prot. Agency, https://www.epa.gov/ogc/external-civil-rights-compliance-office-title-vi (last updated Feb. 22, 2021).

[14] Id.

[15] Id.

[16] 40 C.F.R. § 7.115 (2020).

[17] Order Granting in Part and Denying in Part Plaintiffs’ Motion for Summary Judgment; and Denying Defendants’ Rule 12 Motion to Dismiss and Granting Alternative Motion for Summary Judgment as to the Sixth Claim For Relief at 2, 29, Californians for Renewable Energy v. Env’t Prot. Agency 4:15-cv-03292-SBA (2018) (No. 93, 98, 108); Padres Hacia Una Vida Mejor v. McCarthy, 614 F. App’x 895, 897 (9th Cir. 2015) (noting that the EPA routinely failed to meet the 180 day deadline to address a Title VI complaint and that in the plaintiff’s case the EPA did not resolve its complaint until seventeen years after it was submitted); Rosemere Neigh. Ass’n v. Env’t Prot. Agency, 581 F.3d 1169, 1175 (9th Cir. 2009); Tracy Haugen, Evaluation of the EPA Office of Civil Rights 9 (2011), https://www.documentcloud.org/documents/723416-epa-ocr-audit.html.

[18] Id. at 1.

[19] Id.

[20] Id.

[21] Neil Carman & Cyrus Reed, Civil Rights Complaint Leads TCEQ to Open Rulemaking On Language Access For Public Input in Environmental Permitting Decisions, Sierra Club Lone Star Chapter (Sept. 23, 2020), https://www.sierraclub.org/texas/blog/2020/09/civil-rights-complaint-leads-tceq-open-rulemaking-language-access-for-public#:~:text=In%20late%202019%2C%20the%20environmental,Club%20in%20developing%20new%20rules.

[22] Id.

[23] Id.

[24] Id.

[25]TCEQ Seeks Input on Public Notice and Participation Requirements, Tex. Comm’n Env’t Quality, https://www.tceq.texas.gov/assistance/resources/the-advocate-1/tceq-seeks-input-on-public-notice-and-participation-requirements (last updated Oct. 10, 2020); see Tex. Comm’n Env’t Quality, Commission Approval for Proposed Rulemaking Rule Project No. 2020-018-039-LS  (2021), https://www.tceq.texas.gov/assets/public/legal/rules/rule_lib/proposals/20018039_pex.pdf.

Vol. 51-1 Water Rights

Water Rights

Groundwater Permitting

Introduction

Under Texas law, a person’s property rights include ownership of groundwater beneath his or her property.[1] A recent Fifth Circuit case concluded these property rights are subject to Fifth Amendment takings claims.[2] In Stratta v. Roe, the Fifth Circuit reversed and remanded a district court’s dismissal of a landowner’s claim that a groundwater-conservation district (GCD) violated the Constitution’s Equal Protection and Takings clauses by allowing a city to drain groundwater from underneath the landowner’s property without compensation.[3]

Stratta v. Roe

The Brazos Valley Groundwater Conservation District (BVGCD) is a state political subdivision that manages, protects, and conserves water resources within its jurisdiction.[4] Both the Texas Constitution and the Texas Water Code provide for such GCDs,[5] which create groundwater-management plans regulating water production and conservation, govern water use, study water quantities flowing into and out of aquifers, and minimize waste.[6] Under this authority, BVGCD created new rules in December 2004 governing landowners’ groundwater production.[7] Through spacing requirements and production limitations, BVGCD regulates the amount of water landowners can withdraw from a well.[8] The rules differentiate between existing wells, new wells, and wells with historic use[9]  and regulate groundwater pumpage apply in each category.[10] For instance, the rules cap the amount of allowable production for new wells based on a formula that calculates the number of contiguous acres required to be assigned to the well site.[11]

Almost a week after BVGCD’s new rules took effect, the City of Bryan drilled a well on a 2.7-acre land tract located less than 3,000 feet from appellant Fazzino’s property.[12] The city applied for a permit to operate the well at a groundwater-production rate of 3,000 gallons per minute (gpm).[13] Under the currently-enacted rules, the city would have been required to own a 649-acre tract to pump water at that rate from a “new” well.[14] However, BVGCD classified the city’s well as an “existing” well—one for which drilling or significant development began before the effective date of the rules[15]—and conditionally granted the permit, authorizing production of 4,838 acre-feet annually at the requested rate.[16] BVGCD later reissued an identical conditional permit in 2013, despite the fact that there was no growth of city acreage around the well and even though, before the rules took effect, the well at most existed “in the form of ‘significant development,’ at least on paper.”[17] Had the city’s well been classified as a “new” well, the rules would have capped the well’s maximum allowable production at over fifteen times less than what the conditionally-granted permits allow.[18]

BVGCD created the new rule’s spacing and production requirements to minimize “the drawdown of the water table and the reduction of artesian pressure, to control subsidence, to prevent interference between wells, to prevent degradation of water quality, and to prevent waste.”[19] However, as the new rules do not apply to the city’s well, they do not operate to protect Fazzino from the potential threat of dissipation from the city’s pumping; as water comes from a well, it creates a cone-of-depression impact, and Fazzino’s property is within the city well’s anticipated cone of depression.[20] Fazzino filed a complaint challenging BVGCD’s designation of the well as an “existing” or “historical use” well, but the State Office of Administrative Hearings found that he did not have standing to assert such a claim.[21] Therefore, in an effort to “offset” the production, Fazzino applied for a permit to operate the well on his larger piece of property at the same groundwater-production rate as the city.[22] BVGCD twice denied Fazzino’s request, citing insufficient acreage—Fazzino owned 26 contiguous acres, but like any “new” well owner, he must own or control 649 acres to support production at the requested 3,000 gpm rate.[23] Fazzino then sued BVGCD and its directors under 42 U.S.C. § 1983, alleging violations of the Equal Protection and Takings clauses.[24]

Jurisdictional Objections

Eleventh Amendment Immunity

First, the Fifth Circuit held that the district court erroneously concluded that BVGCD is an arm of the state and immune from suit in federal court under the Eleventh Amendment.[25] A court looks to six factors identified in Clark v. Tarrant County to determine whether a governmental agency qualifies for Eleventh Amendment immunity.[26] The first Clark factor considers whether state statutes and case law view the agency as an arm of the state.[27] The Fifth Circuit held that a GCD is a political subdivision rather than a state agency, and most political subdivisions are not entitled to this immunity.[28] Because one of Eleventh Amendment’s goals is to protect state treasuries, the second Clark factor considers the source of the entity’s funding.[29] The Fifth Circuit concluded that GCDs lack any meaningful financial relationship with the Texas treasury—weighing against immunity.[30] The third Clark factor considers the entity’s degree of local autonomy.[31] While GCDs have broad authority to make and enforce rules,[32] the Texas Water Development Board and the Texas Commission on Environmental Quality provide assistance,[33] and the Texas Water Development Board must approve local groundwater management plans.[34] A state auditor[35] and the state legislature also occasionally audit GCDs’ operations.[36] The Fifth Circuit reasoned that all these facts considered together “at most merely offset each other.”[37]

The fourth Clark factor considers whether the entity deals mostly with local rather than state problems.[38] The fact that an entity deals with local problems suggests that it is not an arm of the state.[39] Because GCDs can exercise their authority only within their territorial boundaries, the Fifth Circuit reasoned this factor weighed against granting immunity to BVGCD.[40] The Fifth Circuit set aside the fifth and sixth Clark factors, considerations of whether the entity has authority to sue and be sued in its own name and its right to hold and use property, because all parties and the district court agreed they weighed against granting immunity.[41] The Fifth Circuit thus concluded that the district court erred in dismissing the landowners’ action for lack of jurisdiction in this regard.[42]

Ripeness for Adjudication

Second, the Fifth Circuit concluded that, contrary to the district court’s findings, Fazzino’s takings claim was ripe for adjudication.[43] The district court had relied on Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, a case recently overturned by the Supreme Court, in its dismissal of Fazzino’s takings claims as unripe.[44] The Fifth Circuit reasoned that not only had Fazzino already pursued available administrative remedies, but the Supreme Court had also held that a property owner can bring a federal-court claim at the time he or she suffers a violation of Fifth Amendment rights, and a landowner is said to have suffered such a violation when the government takes his or her property without just compensation.[45]

Abstaining under Burford

Third, the Fifth Circuit concluded that the district court abused its discretion when it decided to abstain under Burford.[46] Burford allows a federal court to dismiss cases presenting “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar” or if “its adjudication in a federal forum ‘would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial state concern.’”[47] A Burford analysis involves five considerations.[48] Fazzino’s claims allege constitutional violations, satisfying the first consideration—whether the cause of action arises under federal or state law—in favor of federal jurisdiction.[49] The second consideration involves “whether the case requires inquiry into unsettled issues of state law or into local facts.”[50] The district court reasoned there was an unsettled issue in state courts pertaining to the applicability of Texas oil and as common law to GCDs’ regulations.[51] However, the Fifth Circuit reasoned that the Texas Supreme Court has already settled that landowners own the groundwater beneath their properties and that such ownership “may be enforced in takings law and under doctrines of equal protection.”[52]

Because Fazzino asked that BVGCD either apply its rules equally to landowners or give landowners just compensation, the Fifth Circuit reasoned his lawsuit “poses little threat to the general state interest,” the third Burford consideration.[53] The fourth consideration involves the state’s need for a coherent policy, here regarding groundwater regulations.[54] Because GCDs are “decentralized” and “fragmentary” to enforce their own rules in their local areas, the Fifth Circuit concluded Fazzino’s lawsuit does not threaten a coherent policy.[55] Lastly, the Fifth Circuit reasoned that the fifth consideration involving the presence of a special state forum for judicial review did not apply because state courts review GCD decisions.[56]

Merits of the Case

The district court dismissed Fazzino’s takings and equal protection claims because it concluded “they rested on unsettled questions” regarding the application of oil and gas law to a landowner’s rights in groundwater beneath his or her property.[57] However, the Fifth Circuit concluded that the law is settled enough for Fazzino’s claims to be heard because such a formulation of his claims “is at too high a level of generality.”[58]

Takings Clause

The Fifth Circuit recognized that Fazzino’s property rights “constitute whatever he has that BVGCD may not constitutionally ‘take’ without compensation.”[59] The Texas Supreme Court in Edwards Aquifer Authority v. Day held that a landowner’s property rights, subject to takings claims, include ownership of the groundwater beneath his or her land.[60] Indeed, the Texas Water Code specifies that nothing in the code can be “construed as granting the authority to deprive or divest a landowner . . . of the groundwater ownership and rights” described in the section.[61] It requires groundwater districts, like BVGCD, to consider many factors in permitting groundwater production, including the effect on the supply and other permit holders.[62] Thus, giving groundwater owners their fair shares involves more than considering surface area.[63] Fazzino claimed BVGCD “took” his groundwater without compensation when it allowed the City of Bryan to drain water from an area far outside its surface ownership, including the surface area of Fazzino’s property.[64] The Fifth Circuit reasoned it to be the task of the district court to assess whether BVGCD’s groundwater regulation scheme resulted in a “taking” of Fazzino’s interest.[65]

Equal Protection Clause

The Fifth Circuit concluded that Fazzino’s property rights provide “the baseline by which to determine whether he has been treated ‘unequally’ by the district vis a vis the City’s permit.”[66]  The Texas Water Code requires GCDs like BVGCD to consider groundwater ownership and rights and to develop rules that are fair and impartial.[67] Indeed, one of the purposes of groundwater regulation is to afford fair shares to owners in common reservoirs.[68] Fazzino alleged that BVGCD unequally applied its new rules by exempting the City of Bryan from the production limit’s surface-area formula while enforcing it against Fazzino, resulting in what the Fifth Circuit considered “dramatic” results.[69] Fazzino also alleged that BVGCD had no rational basis for treating him differently, implying the disparate treatment resulted from the relationship between BVGCD board members and the City of Bryan.[70] A class-of-one equal protection claim like this involves “whether the plaintiff was ‘intentionally treated differently from others similarly situated’” and “whether there was a ‘rational basis’” for the difference.[71] Because Fazzino sufficiently alleged disparity and intentional conduct, the Fifth Circuit reasoned the allegations’ substance needs to be tested by discovery and further proceedings, and it reversed the dismissal.[72]

Emily Willms Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Rachel C. Nipper is a third-year student at The University of Texas School of Law and Managing Editor of the Texas Environmental Law Journal.

 

[1] Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 817 (Tex. 2012).

[2] Stratta v. Roe, 961 F.3d 340, 359 (5th Cir. 2020).

[3] Id. at 346.

[4] Id.; Home Page, Brazos Valley Groundwater Conservation Dist., https://brazovalleygcd.org/ (last visited Nov. 25, 2020).

[5] Tex. Const. art. XVI, § 59(b); Tex. Water Code Ann. §§ 36.0015, 36.011.

[6] Stratta, 961 F.3d at 347.

[7] Id. 

[8] Id.

[9] Brazos Valley Groundwater Conservation Dist., Rules of the Brazos Valley Groundwater Conservation Dist., Rule 1.1 (Nov. 9, 2017) [hereinafter Brazos Valley Rules].

[10] See, e.g., Brazos Valley Rules, supra note 9, at Rule 7.1(c), Rule 8.3(g). 

[11] Id. at Rule 7.1(c).

[12] Stratta, 961 F.3d at 346, 347.

[13] Id. at 347.

[14] Id. 

[15] Brazos Valley Rules, supra note 9, at Rule 1.1(16). 

[16] Stratta, 961 F.3d at 348.

[17] Id.

[18] Id.

[19] Brazos Valley Rules, supra note 9, at Rule 6.1(a).

[20] Stratta, 961 F.3d at 348.

[21] Id.

[22] Id.

[23] Id.

[24] Id. at 350.

[25] Id. 

[26] Id. at 350.

[27] Clark v. Tarrant Cty., Tex., 798 F.2d 736, 744 (5th Cir. 1986).

[28] Stratta, 961 F.3d at 352.

[29] Clark, 798 F.2d at 744.

[30] Stratta, 961 F.3d at 354. 

[31] Clark, 798 F.2d at 744.

[32] Tex. Water Code Ann. § 36.101(a).

[33] Id. § 36.1071(c).

[34] Id. § 36.1072.

[35] Id. § 36.061.

[36] Id. § 36.302.

[37] Stratta, 961 F.3d at 355.

[38] Clark, 798 F.2d at 745.

[39] Stratta, 961 F.3d at 355.

[40] Id.

[41] Id. at 356.

[42] Id.

[43] Id.

[44] Id.; see Williamson Cty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), overruled by Knick v. Twp. of Scott, Pennsylvania, 139 S. Ct. 2162 (2019).

[45] Stratta, 961 F.3d at 356.

[46] Id. at 358.

[47] Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 707 (1996).

[48] Stratta, 961 F.3d at 357.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] Stratta, 961 F.3d at 358.

[54] Id.

[55] Id.

[56] Id.

[57] Id. at 358–59.

[58] Id. at 359.

[59] Stratta, 961 F.3d at 359.

[60] Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, 817 (Tex. 2012).

[61] Tex. Water Code Ann. § 36.002(c).

[62] Id. § 36.113(d)(2).

[63] Day, 369 S.W.3d at 841.

[64] Stratta, 961 F.3d at 360.

[65] Id.

[66] Id. at 359.

[67] Tex. Water Code Ann. § 36.101(a)(2)–(3).

[68] Day, 369 S.W.3d at 840.

[69] Stratta, 961 F.3d at 361.

[70] Id.

[71] Id. at 360.

[72] Id. at 361.

Vol. 51-1 Washington Updates

Washington Updates

Executive Order to Accelerate the Nation’s Economic Recovery by Expediting Infrastructure Investments

Introduction

On July 4, 2020, President Trump issued the Executive Order entitled Accelerating the Nation’s Economic Recovery from the COVID-19 Emergency by Expediting Infrastructure Investments and Other Activities (“EO”).[1] The EO’s stated intent is to streamline regulations, thus limiting regulatory delays, in response to the economic crisis resulting from the COVID-19 pandemic.[2] The EO instructs federal agencies to use emergency powers to expedite project approvals, directing they should: (1) use their emergency authority and statutes’ emergency provisions to expedite projects; (2) provide a report listing expedited projects; and (3) provide status updates with further reports due every thirty days.[3]

This article discusses the content of the EO, and its requirements on agencies to encourage accelerated infrastructure development. Part I discusses the EO and the requirements that agencies must meet. Part II discusses the effects of the EO on industry and the environment. Part III discusses the future potential impact of the EO.

PART I: REQUIREMENTS OF THE EO

The EO instructs various federal agencies to exercise emergency authority provisions to expedite decision making, providing instructions that agencies should follow as well as reporting requirements that the agencies must undertake.[4]

In Sections 3–5, the EO designates steps that specific executive departments must take to expedite project development.[5] Listed are the Secretaries of Transportation, the Army, Defense, the Interior, and Agriculture.[6] Each department must “expedite work on, and completion of, all authorized and appropriated [projects] that are within the authority of the Secretaries.”[7] These projects include “highway and other infrastructure projects,” “civil works projects,” “and infrastructure, energy, environmental, and all natural resources projects,” depending on the Secretary’s authority.[8]

The EO requires the Secretaries to provide reports. Each Secretary must provide a “summary report[] listing all such projects that have been expedited . . . to the [Office of Management and Budget (OMB)] Director, the Assistant to the President for Economic Policy, and the Chairman of [the Council of Environmental Quality (CEQ)]” within thirty days of the EO.[9] Within thirty days of the first report, the Secretaries must “provide a status report to the [same officials] that shall list any additions or other changes.”[10] Reports are continuously required “at least every thirty days for the duration of the national emergency.”[11]

In Sections 6–8, the EO instructs agency heads to apply various environmental statutes’ emergency provisions.[12] The EO specifically addresses the National Environmental Policy Act’s (NEPA) emergency regulations and emergency procedures, the Endangered Species Act’s (ESA) emergency consultation, and the Clean Water Act’s (CWA) and other statutes administered by the U.S. Army Corp of Engineers’ (the Corps) emergency regulations and nationwide permits.[13] All agencies must “identify planned or potential actions to facilitate the Nation’s economic recovery that may be subject to the” NEPA and ESA emergency provisions, with the Corps also being subject to additional requirements under the CWA.[14]  The agencies are required to provide summary status reports on thirty-day intervals, outlining planned or potential actions to various cabinet secretaries and other individuals exerting oversight.[15]

The EO’s Section 9 requires agencies to “review all statutes, regulations, and guidance documents that may provide for emergency or expedited treatment . . . with regard to agency actions pertinent to infrastructure, energy, environmental, or natural resource matters.”[16] After, agencies must “identify planned or potential actions, including actions to facilitate the Nation’s economic recovery, that may be subject to emergency or expedited treatment.”[17] These actions must be listed in a summary report “to the OMB Director, the Assistant to the President for Economic Policy, and the Chairman of CEQ.”[18] Updated reports are also required every 30 days under this section.[19]

PART II: PURPOSES AND EFFECTS OF THE EO

The Trump Administration has made several efforts to expedite the process of approving infrastructure projects. As stated in the EO, it is another step towards “reforming and streamlining [the approval process which the Administration refers to as] an outdated regulatory system that . . . [has] hindered American infrastructure investments.”[20] Infrastructure permitting often “takes years of planning and construction.” [21] The EO’s goal is to accelerate this time-consuming process and provide project developers a means to avoid this lengthy process.[22]

It is still unclear if, how, and to what extent, agencies will implement these expedited procedures and whether project developers will want such expedited review and approval of its projects. Some are concerned that the EO could not survive a legal challenge, with commentators noting that “the legal support for the . . . EO appears dubious and likely to be challenged.”[23] As such, projects accelerated under the EO may “be subject to increased scrutiny and heightened litigation risk from third parties,”[24] as courts have applied the relevant emergency powers narrowly in the past.[25] The judiciary has limited the use of these powers to projects responding to emergencies that posed an “imminent hazard to human health and the environment.”[26] While certain developers are wary of possible legal challenges, some projects are moving forward under the EO, including an oil-drilling project in Alaska and a private spaceport in Florida.[27]

Environmental organizations have voiced their own concerns, arguing the EO will allow projects to avoid environmental regulations and that expedited approval will harm the environment.[28] Gina McCarthy, former EPA Administrator, and the current President and CEO of the Natural Resources Defense Council, stated: “Abusing emergency powers to deep-six necessary environmental reviews is utterly senseless. . . . Getting rid of them will hit those who live closest to polluting facilities and highways the hardest.”[29] The Center for Biological Diversity also expressed its concerns in a letter to the Trump Administration.[30] The Center said that it would seek litigation if the Administration did not revoke the order.[31] Litigation that may emerge from the Center and other organizations is likely to slow projects that seek to be accelerated. It remains to be seen whether the costs and time lost in litigation outweigh the EO’s benefits.

PART III: THE FUTURE OF THE EO

The November 2020 Presidential election probably determined the EO’s future. The president has the power to revoke Executive orders. The President can revoke Executive Orders alone.[32] Because former Vice President Joe Biden won the election, he is likely to revoke the order and may even impose more stringent standards on expedited projects in the future. A shifting standard poses an additional complication for projects that hope to benefit from the EO.

 

Jacob Arechiga is a Special Counsel in Duane Morris LLP’s Austin, Texas office. His practice is focused on complex commercial matters, particularly those in the energy and electric power industries.

Kylan MacLeod is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] Exec. Order No. 13927, 85 Fed. Reg. 35165 (June 4, 2020).

[2] Id.

[3] See id. at 35165–70.

[4] See id.

[5] See id. at 35166–67.

[6] Id.

[7] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35166–67 (June 4, 2020).

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id. at 35167–69.

[13] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35167–69 (June 4, 2020).

[14] Id.

[15] Id.

[16] Id. at 35169–70.

[17] Id. at 35169.

[18] Id.

[19] Exec. Order No. 13927, 85 Fed. Reg. 35165, 35170 (June 4, 2020).

[20] Id. at 35165.

[21] Rachel L. Lipinski, Jonathan D. Simon, & Tyson C. Cade, Executive Order Seeks to Promote Economic Recovery by Expediting Environmental Reviews for Project Development, Van Ness Feldman LLP (June 8, 2020), https://www.vnf.com.

[22] Exec. Order No. 13927, 85 Fed. Reg. 35165 (June 4, 2020).

[23] United States: Trump Administration Issues Executive Order Seeking to Expedite Environmental Reviews for Infrastructure Projects, Baker McKenzie (June 12, 2020), https://www.bakermckenzie.com [hereinafter Trump Administration].

[24] Lipinski et al., supra note 20.

[25] Trump Administration, supra note 20.

[26] Id.

[27] See Rebecca Beitsch & Rachel Frazin, Major Drilling Projects Among Dozens Fast-Tracked after Trump Order, The Hill (Sept. 2, 2020), https://thehill.com/policy/energy-environment/514809-major-drilling-projects-among-dozens-fast-tracked-after-trump-order; see also FAA Fast Tracks EIS, Will not Seek Comments, News-Leader (Sept. 22, 2020), https://www.fbnewsleader.com/regional/faa-fast-tracks-eis-will-not-seek-comments#:~:text=The%20Federal%20Aviation%20Administration%20has,fast%20track%20the%20licensing%20decision.

[28] See, e.g., Mark Drajem, NRDC: Trump Tries to Throw Out Environmental Reviews While Nation in Crisis, NRDC (June 4, 2020), https://www.nrdc.org/media/2020/200604; see also Letter from the Center for Biological Diversity to President Donald Trump (June 9, 2020), https://www.biologicaldiversity.org/campaigns/esa_attacks/pdfs/NOI-to-President-Trump-regarding-his-violations-of-the-Endangered-Species-Act.pdf [hereinafter Letter]. .

[29] Drajem, supra note 28.

[30] Letter, supra note 28.

[31] Id.

[32] Vivian S. Chu & Todd Garvey, Congressional Research Service: Executive Orders: Issuance, Modification, and Revocation, 7 (2014).

Vol. 51-1 Solid Waste

Solid Waste

Important remaining steps in the EPA’s PFAS Action Plan

The Environmental Protection Agency’s (EPA) current approach to regulating per- and polyfluoroalkyl substances (collectively, PFAS) neither sets a drinking water standard for these two common PFAS nor does it declare them to be hazardous substances.[1] Detectable levels of PFAS in the human body are associated with numerous negative health outcomes, including serious forms of cancer.[2] However, the EPA has made modest strides to regulate individual PFAS. In 2018, it announced a comprehensive plan to address PFAS pollution.[3]

Background on PFAS

PFAS refers to a class of per- and polyfluoroalkyl substances.[4] The chemical properties of PFAS —specifically the chains of strong carbon-fluorine bonds—makes them highly resistant to water, oil, and heat.[5] These properties make PFAS useful in a wide variety of commercial and industrial applications, including in non-stick pans and electronics manufacturing.[6] However, because of their strong carbon-fluorine bonds, PFAS can bioaccumulate and are highly environmentally persistent.[7] When a chemical is environmentally persistent, it degrades very slowly or not at all, extending the period in which the chemical can affect human and environmental health.[8] For example, PFAS were detected on an Air Force base twenty years after firefighting foam containing PFAS was used there.[9]

Because of their wide use and environmental persistence, PFAS contamination is widespread.[10] In the United States, it is estimated that 99% of people have PFAS in their blood, based on representative blood serum testing.[11] PFAS have also been detected in locations as remote as the Arctic Circle and the Tibetan Plateau.[12] People are exposed to PFAS in a variety of ways.[13] For instance, non-stick cookware and water- and stain-resistant textiles are an avenue for household exposure.[14] Workers in industrial facilities are exposed through common industrial processes or from fire suppression systems.[15] Firefighting foam containing PFAS is a source of contamination for groundwater, as are other point sources such as landfills.[16] Plants and animals that bioaccumulate PFAS are a source of exposure when humans eat them.[17] Even breastmilk is an exposure vector for PFAS in infants.[18]

PFAS are associated with a wide variety of negative health effects; however, different varieties and concentration levels of PFAS have different effects on the body.[19] Notably, PFAS can affect puberty, birth weight, immune functioning, and thyroid activity, and they can even cause liver disease and testicular and kidney cancer.[20] Unfortunately, “for most [varieties of] PFAS[,] there is limited or no toxicity information.”[21]

Previous EPA Actions Regarding PFAS

Despite widespread contamination and the risk of environmental persistence and bioaccumulation, regulating PFAS has not been straightforward. The EPA successfully eliminated the production of two PFAS chemicals—perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS)—through voluntary phase-out programs.[22] Under the EPA’s PFOA Stewardship program, eight manufacturers and processors met the program goal of eliminating PFOA manufacture and use by 2015.[23] A similar PFOS phase-out started in 2000 after the scope of exposure was discovered.[24] Although PFOA and PFOS are still detectable in serum samples, the concentration has decreased substantially between 1999–2016.[25]

Although it was successful, the PFOA Stewardship program was voluntary and addressed only one out of hundreds of PFAS.[26] In contrast with the PFOA Stewardship program, the current plan to address PFAS is more comprehensive and significantly wider in scope.

PFAS Action Plan

In February of 2019, the EPA released its PFAS Action Plan (the Action Plan) which details the administration’s approach to address PFAS regulation challenges.[27] EPA Administrator Andrew Wheeler characterized the Action Plan as “the most comprehensive cross-agency plan ever to address an emerging chemical of concern” and declared nearly a year after its release that the EPA was “aggressively” implementing the plan.[28]

The Action Plan includes approximately twenty agency actions including: setting short- and long-term research goals, communicating with the public and other stakeholders regarding PFAS risks, developing of toxicity assessments for seven additional PFAS, setting national drinking water standards for PFOA and PFOS, and declaring PFOA and PFOS “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).[29] While the EPA has already met some of the Action Plan goals such as setting guidelines for groundwater quality, [30] the agency has not taken two critical actions: setting drinking water standards and declaring PFOA and PFOS “hazardous substances.” [31]

EPA has failed to set adequate drinking water standards for PFOS and PFOA.

The EPA met its deadline to set guidelines for groundwater quality, but it has not established PFOA and PFOS drinking water regulations.[32] Critically, the EPA has not set a Maximum Contaminant Level (MCL), an enforceable standard under the Safe Drinking Water Act (SDWA), which would empower the EPA and states to address PFOA and PFAS.[33]

In December 2019, the EPA released its interim recommendation on groundwater contaminated with PFOA or PFOS.[34] It eventually finalized the goal for remediation of groundwater sources at 70 parts per trillion (ppt).[35] The EPA’s decision is consistent with its 2016 Lifetime Drinking Water Health Advisory (2016 Health Advisory) at 70 ppt for PFOA and PFOS.[36] However, if the EPA relies on the 2016 Health Advisory when setting the MCL, the standard may be insufficient to protect human health. [37]

The Agency for Toxic Substances and Disease Registry (ATSDR) created a toxicological assessment of PFOA and PFOS that suggested the 70 ppt guideline for PFOA and PFOS would be insufficient to protect human health. [38] The ATSDR assessment estimated the maximum exposure to PFOA and PFOS that would not cause any harmful effects.[39] In creating the 2016 Health Advisory and setting the 70 ppt guideline, the EPA factored in a maximum safe exposure estimate for PFOA and PFOS, which were 6.7 and 10—higher than those estimated by the ATSDR.[40] The ATSDR estimate was similar to the estimate used by New Jersey when defining its pending state-wide MCL.[41] New Jersey set its MCL at 14 ppt and 13 ppt for PFOA and PFOS, respectively.[42] The ATSDR assessment suggests that the appropriate level of PFOS and PFOA is significantly lower than the EPA is currently suggesting.[43]

Some states have set their own MCLs for PFOA and PFOS which are significantly more strict than the EPAs Health Advisory figure.[44] The MCL for PFOA and PFOS are 12 ppt and 15 ppt in New Hampshire, 10 ppt and 40 ppt in California, 10 ppt and 10 ppt in New York, 8 ppt and 16 ppt in Michigan, and 14 ppt and 13 ppt in New Jersey under a pending rule.[45] Together with the ASTDR study, the trend among states suggests that 70 ppt would be an insufficient standard for drinking water despite the 2016 Health Advisory.[46]

The EPA has failed to designate PFOA and PFOS “hazardous substances.”

Both the Action Plan and remarks by EPA Administrator Scott Pruitt at the PFAS Summit in 2018 expressed EPA’s intent to designate PFOA and PFOS as hazardous substances.[47] The EPA’s Action Plan update, released in February of 2020, reiterated that it was moving forward in the process of designating PFOA and PFAS as hazardous substances.[48]

Because PFOA and PFOS are not yet designated as hazardous substances, many affected communities have been unable to access the resources available under CERCLA, including private causes of action.[49] For example, the Air Force has refused to clean-up contamination from PFOA- and PFOS-containing firefighting foam in Georgia, New Mexico, and Michigan because PFOA and PFOS are not hazardous substances as defined under CERCLA.[50] The Navy successfully moved to dismiss a suit for medical costs in Pennsylvania by arguing that, because PFOA and PFOS were not hazardous substances, the plaintiff had no cause of action.[51]

Legislative Actions Related to PFAS

The EPA has been working towards designating PFOA and PFOS hazardous substances since the 2018 PFAS Summit.[52] In the meantime, legislators became impatient. In January of 2020, the United States House of Representatives passed the PFAS Action Act of 2019 (the PFAS Action Act).[53] If the PFAS Action Act became law in its current form, it would designate PFOA and PFOS as hazardous substances, bypassing the administrative process that the EPA has delayed for the past two years.[54] Additionally, the act would give the EPA five years to make a determination on designating the hundreds of remaining PFAS—a significant acceleration of the current regulation rate.[55] The PFAS Action Act would also require the EPA to regulate the substances under the SDWA.[56] While it has only been referred to the Senate Committee on Environment and Public Works, the current administration has expressed its opposition to the legislation.[57] The Trump Administration rejected the PFAS Action Act as undermining the administrative processes built into CERCLA and other federal regulation.[58]

Conclusion

The EPA has made some strides in addressing PFAS exposure in the United States. The PFOA Stewardship program successfully reduced the manufacture of PFOA, and the EPA has released groundwater standards for some PFAS levels. However, the EPA has not taken two critical steps in the Action Plan: setting MCLs for PFOS or PFOA and designating PFOS and PFOA as hazardous substances under CERCLA. Setting an MCL for PFOS and PFOA would create an enforceable standard under SDWA. Additionally, because PFOA and PFOS have not been designated hazardous substances, CERCLA and other remedial statutes remain out of reach for affected communities, and contaminated sites will continue to affect human and environmental health. PFAS can cause a variety of negative health effects including reduced immune functioning and cancer, and the EPA has not met the bold goals stated in the PFAS Action Plan.

Alisha Mehta is an attorney in the Environmental and Legislative section of Jackson Walker’s Austin office. She focuses on permitting and water matters, including real estate developers and special utility districts and counsels clients on transactional and regulatory issues before the Public Utility Commission of Texas.

Nicholas D. Ray is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1]  Basic Information on PFAS, Env’t Prot. Agency, https://www.epa.gov/pfas/basic-information-pfas (last visited Dec. 12, 2020) [hereinafter Basic Information].

[2] Id.

[3] U.S. Env’t Prot. Agency, EPA’s Per- and Polyfluoroalkyl Substances (PFAS) Action Plan 9 (2019) [hereinafter Action Plan].

[4] Basic Information, supra note 1.

[5] Action Plan, supra note 3, at 11.

[6] Id. at 9–12.

[7] Id. at 9.

[8] Id.

[9] Danni Cui, Xuerong Li, & Natalia Quinete, Occurrence, fate, sources and toxicity of PFAS: What we know so far in Florida and major gaps, 130 TrAC Trends in Analytical Chemistry 115976 (2020).

[10] See Action Plan, supra note 3, at 1.

[11] Id.

[12] Jianjie Fu et. al., Occurrence, temporal trends, and half-lives of perfluoroalkyl acids (PFAAs) in occupational workers in China, 6 Sci. Reports 38039 (2016).

[13] Action Plan, supra note 3, at 12.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id. at 13.

[20] Id.

[21] Id. at 10.

[22] Id. at 9, 14.

[23] Id. at 14.

[24] Alissa Cordner et. al., Guideline levels for PFOA and PFOS in drinking water: the role of scientific uncertainty, risk assessment decisions, and social factors, 29 J. of Exposure Sci. & Env’t Epidemiology 157, 158 (2019).

[25] See U.S. Ctr. Disease Control & Prevention, Fourth National Report on Human Exposure to Environmental Chemicals, Updated Tables, January 2019, Volume 1, 405–407, 413–415 (2019).

[26] Action Plan, supra note 3, at 12.

[27] Id. at 9.

[28] Aggressively Addressing PFAS at EPA, Env’t Prot. Agency https://www.epa.gov/newsreleases/
aggressively-addressing-pfas-epa (last visited Dec. 12, 2020); Multimedia: PFAS National Leadership Summit, Administrator Pruitt’s Remarks at PFAS Summit, Env’t Prot. Agency, https://archive.epa.gov
/epa/newsroom/multimedia-pfas-national-leadership-summit.html (last updated Mar. 2, 2020).

[29] Action Plan, supra note 3, at 3–7.

[30] U.S. Env’t Prot. Agency, EPA PFAS Action Plan: Program Update 8 (2020) [hereinafter Program Update].

[31] Pamela Goodwin et. al., INSIGHT: EPA Moves Toward Setting Drinking Water PFAS Health Standard, Bloomberg Law (Apr. 9, 2020), https://news.bloomberglaw.com/environment-and-energy/insight-epa-moves-toward-setting-drinking-water-pfas-health-standard.

[32] Program Update, supra note 30, at 9.

[33] Goodwin et. al., supra note 31.

[34] Id.

[35] Id.

[36] Id.

[37] Cordner et. al., supra note 24.

[38] Annie Snider, White House, EPA headed off chemical pollution study, Politico (May 14, 2018), https://www.politico.com/story/2018/05/14/emails-white-house-interfered-with-science-study-536950.

[39] Cordner et. al., supra note 24.

[40] Id.

[41] Goodwin et. al., supra note 31.

[42] Id.

[43] Cordner et. al., supra note 24.

[44] Goodwin et. al., supra note 31.

[45] Id.

[46] Cordner et. al., supra note 24.

[47] Aggressively Addressing PFAS at EPA, supra note 28.

[48] Program Update, supra note 30, at 9.

[49] Sharon Lerner, Did the White House Stop the EPA From Regulating PFAS?, The Intercept (Sept. 29 2020), https://theintercept.com/2020/09/29/epa-white-house-pfas-pfoa-pfos/.

[50] Id.

[51] Id.

[52] Aggressively Addressing PFAS at EPA, supra note 28.

[53] PFAS Action Act of 2019, H.R. 535, 116th Cong. (2020).

[54] Id. at § 2(a).

[55] Id. at § 2(b).

[56] Id. at § 5.

[57] Office of Mgmt. and Budget, Statement of Administration Policy H.R. 535 – PFAS Action Act of 2019 2 (2020).

[58] Id.

Vol. 51-1 Recent Publications

Recent Publications

EPA Rule: Navigable Water Protections Rule and Ongoing Litigation

Introduction

The Clean Water Act (CWA) is the primary United States federal law governing water pollution. Under the CWA, the federal government has jurisdiction over all “navigable waters,” which the Act defines as “the waters of the United States, including territorial seas.”[1] The CWA does not further define navigable waters or the waters of the United States (WOTUS). Instead, a combination of Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers regulations and U.S. Supreme Court decisions have defined and redefined WOTUS, thereby determining what waters fall within CWA federal regulatory jurisdiction.[2]

The most recent update to the definition of WOTUS came in the EPA’s publication of the Navigable Waters Protection Rule (NWPR), which took effect June 22, 2020, and replaced the 2015 Clean Water Rule (CWR).[3] The NWPR reduces the scope of the CWA and limits federal jurisdiction to waters that are sufficiently and visibly connected to traditionally navigable waters.[4] Predictably, the NWPR faces several legal challenges in federal district court. The challenges fall into two main categories. In the first category, which this article broadly labels as those with conservation interests, the plaintiffs are states, environmental groups, and tribes.[5] These conservation plaintiffs are challenging the NWPR’s interpretation of WOTUS as waters with a physical, surface water connection to traditional navigable waters as a violation of the Administrative Procedure Act (APA) because a majority of the U.S. Supreme Court has already rejected that definition.[6] In the second category, which this article broadly labels as those with industry interests, the plaintiffs are agricultural groups.[7] These industry plaintiffs are challenging on the grounds that the CWA specifically regulates navigable waters, which Congress meant to mean waters that are navigable-in-fact, while the NWPR includes bodies of water that are not themselves navigable.[8] This article provides a brief background of the recent changes to the definition of WOTUS and an overview of the ongoing legal challenges to the NWPR.

Recent History of WOTUS: Rapanos v. U.S., Clean Water Rule, and Navigable Water Protection Rule

In Rapanos v. U.S., the U.S. Supreme Court’s most recent holding on the CWA and WOTUS, the Court issued a four-Justice plurality opinion that the CWA only provided jurisdiction over waters with a continuous surface connection to traditional jurisdictional waters.[9] Writing for the plurality, Justice Scalia defined WOTUS to mean “relatively permanent, standing, or continuously flowing bodies of water” and specifically excluded intermittent or ephemeral bodies of water resulting from precipitation.[10] Wetland and other remote waters, Scalia reasoned, were not within federal jurisdiction unless they had “continuous surface connection” to a relatively permanent WOTUS, “making it difficult to tell where the water ends and the wetland begins.”[11] A mere hydrologic connection to a body of water within federal jurisdiction under the CWA, the plurality held, was insufficient for a water body to fall within federal jurisdiction.

Justice Kennedy, in his concurring opinion, articulated the analysis of the Court’s prior WOTUS holdings and defined a WOTUS as a body of water with a significant nexus to a water that falls within federal jurisdiction.[12] Because Congress enacted the CWA to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters,” Justice Kennedy reasoned that bodies of water fall within federal jurisdiction under the CWA if they “significantly affect the chemical, physical, and biological integrity of other covered waters.”[13] According to Justice Kennedy’s significant nexus test, a body of water falls within federal jurisdiction if it has hydrological connection significant enough to affect the water quality of traditional navigable waters.[14]

Rapanos provides the basis for both the CWR and the NWPR. In the CWR, the EPA formalized Justice Kennedy’s significant nexus test to determine jurisdictional waters under the CWA on a categorical and case-by-case basis.[15] Per the CWR, “significant nexus means that a water, including wetlands, either alone or in combination with other similarly situated waters in the region, significantly affects the chemical, physical, or biological integrity of” traditionally navigable waters.[16] This includes categorical waters, such as wetlands adjacent to other waters and noncontinuous tributaries, and waters not otherwise excluded by the rule on a case-by-case basis.[17] The NWPR dispenses with the CWR’s implementation of Kennedy’s significant nexus analysis and instead presents a federal jurisdiction over “those waters and wetlands that maintain a significant surface water connection to traditional navigable waters.”[18]

Challenges to the NWPR

The NWPR was challenged in two federal district court cases on April 27, 2020, six days after the final rule was published.[19] In the first case, Chesapeake Bay Found. v. Wheeler, plaintiffs with conservation interests challenged the rule on the grounds that its interpretation of WOTUS violated the APA and was too narrow.[20] Eight similar cases have since been filed in different district courts.[21] In the second case, New Mexico Cattle Growers’ Association v. EPA, plaintiffs with industry interests challenged the rule on the grounds that its interpretation of WOTUS was too broad, as it provided federal jurisdiction over waters not navigable-in-fact.[22] Two other similar cases have since been filed.[23]

Plaintiffs with conservation interests, have filed the nine suits challenging the NWPR seeking to have the rule overturned for being too narrow.[24] The plaintiffs’ reasoning in each complaint is similar.[25] For example, in California v. Wheeler, the complainant states argued that the NWPR violates the APA by applying Justice Scalia’s plurality opinion in Rapanos.[26] In Rapanos, a minority of the Court agreed with Justice Scalia that the CWA only extends federal jurisdiction to “relatively permanent, standing or continuously flowing bodies of water.”[27] While Justice Kennedy agreed with the result, he did not agree with the reasoning and instead would have relied on the significant nexus test to determine the outcome.[28]  As a result, the complainant states argued that the court should enjoin the NWPR because the rule is improperly “based on the plurality opinion in Rapanos even though a majority of the Justices in Rapanos found that the plurality’s interpretation of ‘waters of the United States’ was inconsistent with the CWA’s text and purpose.”[29] In Wheeler, the U.S. District Court for the Northern District of California denied the plaintiffs’ request for an injunction on the grounds that the complainants were likely to fail on the merits.[30] In Colorado v. EPA, however, the U.S. District Court for Colorado enjoined the NWPR, reasoning that it was in the public interest to maintain the status quo while the case was decided on the merits.[31] Both cases were appealed and all nine cases are ongoing.[32]

The three cases brought by plaintiffs with industry interests argue that the courts should enjoin the NWPR because it defines navigable waters too broadly.[33] They allege that the term navigable waters in the CWA is similar to the phrase “navigable capacity of the waters of the United States” in the Rivers and Harbors Act of 1899, and Congress, therefore, intended them to be interpreted in the same way.[34] The language in the Rivers and Harbors Act applies to navigable-in-fact waters that can be used for transportation in commerce, and plaintiffs argue that the CWA should not extend to waters that do not meet that same threshold.[35] Because the NWPR allows for federal jurisdiction over waters that are not navigable-in-fact, the plaintiffs ask the courts to hold that the rule is an unlawful interpretation of the CWA.[36] The U.S. District Court for Oregon dismissed one such lawsuit for lack of standing.[37] The two other cases are ongoing.[38]

Uncertainty and the Possible Patchwork Definition of Jurisdictional Waters

Uncertainty about the WOTUS definition and, therefore, what waters are under federal jurisdiction is likely to continue for the near future. While the NWPR is active in every state except for Colorado, eleven cases challenging the rule are ongoing in different jurisdictions. If federal district or circuit courts reach different conclusions, as courts already have in Colorado and California, it would create an unpredictable patchwork of jurisdictional waters rules across the country.[39] The definition of WOTUS and the corresponding scope of federal jurisdiction will remain uncertain at least until the ongoing cases challenging the NWPR reach their conclusions and potentially long afterwards.

Joshua Katz is an attorney at Bickerstaff Heath Delgado Acosta LLP in Austin, TX. He practices in the areas of environmental law, administrative law, water law, electric utility regulation, and civil litigation.

Caleb Ray is in his fourth and final year of a dual degree program pursuing a Master of Global Policy Studies from the LBJ School of Public Affairs and a JD from the University of Texas School of Law. He is an Articles and Notes Editor for the Texas Environmental Law Journal.

 

[1] 33 U.S.C. § 1362(7).

[2] About the Waters of the United States, Env’t Prot. Agency, https://www.epa.gov/nwpr/about-waters-united-states (last visited Nov. 26, 2020).

[3] The Navigable Waters Protection Rule: Definition of “Waters of the United States,” 85 Fed. Reg. 22,250, 22250 (Apr. 21, 2020).

[4] Id. at 22,252.

[5] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[6] See, e.g., Wheeler, 467 F.Supp.3d at 873; Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[7] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[8] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[9] Rapanos v. U.S., 547 U.S. 715, 739 (2006).

[10] Id. at 716.

[11] Id.

[12] Id. at 759; see also Solid Waste Agency of N. Cook County v. U.S. Army Corps of Eng’rs, 531 U.S. 159 (2001); U.S. v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985).

[13] Rapanos, 547 U.S at 780 (quoting 33 U.S.C. § 1251(a)).

[14] Id. at 784.

[15] Clean Water Rule: Definition of “Waters of the United States,” 80 Fed. Reg. 37,055–56 (June 29, 2015).

[16] Id. at 37,106.

[17] Id. at 37,105–06, 37,018.

[18] The Navigable Waters Protection Rule: Definition of “Waters of the United States, 85 Fed. Reg. 22,250, 22,252 (Apr. 21, 2020).

[19] First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr, 27, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); 85 Fed. Reg. 22250.

[20] Complaint at 24–25, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020). 

[21] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[22] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019).

[23] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[24] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[25] See id.

[26] Cal. v. Wheeler, No. 3:20-cv-03005 at *6 (N.D. Cal. 2020).

[27] Rapanos, 547 U.S. at 716.

[28] Id. at 716.

[29] Complaint, Cal. v. Wheeler, No. 3:20-cv-03005 (N.D. Cal. May 1, 2020).

[30] Cal. v. Wheeler, No. 3:20-cv-03005 at *8 (N.D. Cal. 2020).

[31] Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 at *1313 (D. Colo. 2020).

[32] See Cal. v. Wheeler, 467 F.Supp.3d 864 (N.D. Cal. June 19, 2020); Colo. v. Env’t Prot. Agency, No. 1:20-cv-01461 (D. Colo. June 19, 2020); Complaint, Chesapeake Bay Found. v. Wheeler, No. 1:20-cv-01064 (D. Md. Apr. 27, 2020); Complaint, Conservation Law Found. v. Env’t Prot. Agency, No, 1:20-cv-10820 (D. Mass. Apr. 29, 2020); Complaint, S.C. Coastal Conservation League v. Wheeler, No. 2:20-cv-01687 (D.S.C. Apr. 29, 2020); Complaint, Navajo Nation v. Wheeler, No. 2:20-cv-00602 (D.N.M. June 22, 2020); Complaint, Pascua Yaqui Tribe v. Env’t Prot. Agency, 4:20-cv-00266 (D. Ariz. June 22, 2020); Complaint, Puget Soundkeeper All. v. Env’t Prot. Agency, No. 2:20-cv-00950 (W.D. Wash. June 22, 2020); Complaint, Env’t Integrity Project v. Wheeler, No. 1:20-cv-01734 (D.D.C. June 25, 2020).

[33] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[34] Complaint at 5, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Oct. 22, 2019) (quoting Rivers and Harbors Act, 33 U.S.C. § 403).

[35] Id.

[36] Id. at 5, 22.

[37] N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Aug. 7, 2020).

[38] See First Supplemental Complaint, N.M. Cattle Growers’ Ass’n v. Env’t Prot. Agency, No. 1:19-cv-00988 (D. N.M. Apr. 27, 2020); Second Amended Complaint, Or. Cattlemen’s Ass’n v. Env’t Prot. Agency, No. 3:19-cv-00564-AC (D. Or. May 4, 2020); First Supplemental Complaint, Wash. Cattlemen’s Ass’n. v. Env’t Prot. Agency, No. 2:19-cv-00569-JCC (W.D. Wash. May 1, 2020).

[39] See, e.g., Congressional Research Service, “Waters of the United States” (WOTUS): Current Status of the 2015 Clean Water Rule 6 (2018) (explaining that the 2015 Clean Water Rule is in effect in twenty-two states and enjoined in twenty-eight states).

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. 51-1 Air Quality

Air Quality

New Air Quality Permit in Brownsville, Texas

Background

On March 24, 2016, Texas LNG Brownsville LLC (Texas LNG) submitted an application to the Texas Commission of Environmental Quality (TCEQ) for a new air quality permit authorizing construction of a natural gas liquefaction and export terminal, to be located in the Brownsville Ship Channel in Cameron County, Texas.[1] Texas LNG’s facility is one of three such facilities to be constructed in the area. Emissions from such facilities, predominantly those from pipeline-quality natural gas, include nitrogen oxides (NOx), carbon monoxide (CO), volatile organic compounds (VOC), sulfur dioxide (SO2), particulate matter (PM) at 10 and 2.5 micrograms, and hydrogen sulfide (H2S).[2] The operation would not be a major source requiring review under the federal Prevention of Significant Deterioration new source review program.[3] The TCEQ’s Executive Director (ED) issued a draft permit for Texas LNG’s application.[4] Following a public meeting, the TCEQ received comments and requests for a hearing, and ultimately, Vecinos Para el Bienestar de la Comunidad Costera (Vecinos), and the City of Port Isabel (Port Isabel), among others, were admitted as protestant parties.[5] The protestants argued that the draft permit was deficient and should be rejected, or, alternatively, that it should be revised to better protect air quality, human health, and property.[6] Nonetheless, the Administrative Law Judges (ALJs) recommended that the TCEQ approve the draft permit with one revision.[7]

Proposal for Decision

Burden of Proof and Prima Facie Demonstration

Texas LNG’s application was filed after September 1, 2015, making it subject to Texas Government Code § 2003.047(i-1)–(i-2) (SB 709),[8] which states:

(i-1)     [I]n a contested case regarding a permit application referred under Section 5.556 [of the Water Code] . . . the draft permit prepared by the [ED], the preliminary decision issued by the [ED], and other sufficient supporting documentation in the administrative record of the permit application establishes a prima facie demonstration that:

  1. the draft permit meets all state and federal legal and technical requirements; and
  2. a permit, if issued consistent with the draft permit, would protect human health and safety, the environment, and physical property.

(i-2)      [A] party may rebut a demonstration under Subsection (i-1) by presenting evidence that:

  1. relates to . . . an issue included in a list submitted under Subsection (e) in connection with a matter referred under Section 5.556, Water Code; and 
  2. demonstrates that one or more provisions in the draft permit violate a specifically applicable state or federal requirement.[9]

Under SB 709, the ED’s draft permit on Texas LNG’s application established a prima facie demonstration and created a presumption that the permit, if issued, would meet all legal and technical requirements.[10] This shifts the burden of production onto the protestants in a contested case; however, the ultimate burden of proof remains with the ED and the applicant to prove by a preponderance of the evidence that the applicant satisfies all applicable requirements.[11] The protestants, therefore, may rebut the presumption by presenting evidence related to a referred issue and demonstrating that the draft permit violates an applicable state or federal requirement.[12] The ALJs concluded on two issues that the Protestants failed to overcome the prima facie demonstration established by the ED’s Draft Permit.[13] On the third issue, the ALJs concluded that the Protestants overcame the prima facie demonstration only in part.[14] 

The ALJs rejected Port Isabel’s contention that draft permits issued without clear adherence to the application review process should not be granted the presumption of compliance set forth by SB 709.[15] Port Isabel asserted several deficiencies in the application review process,[16] including that Texas LNG’s permit had been passed off by two different permit engineers over the course of two years, and that no engineer was available during the response to comments or permit contest who could vouch for the permit’s technical review adequacy.[17] The only documentation of a technical review was the “Construction Permit Source Analysis & Technical Review,” which lacked any date of completion or signature.[18] Port Isabel argued that such a review is essentially a draft memo and should not be considered a prima facie demonstration under SB 709.[19] Nonetheless, the ALJs found that SB 709 creates a presumption and shifts the burden of production so long as the TCEQ reviewed the application and held an open meeting.[20]

Referred Issues and ALJ Analysis

The following three issues were referred for hearing:

1. Whether the Draft Permit contained adequate conditions to protect against adverse effects on the health and safety of Port Isabel’s residences and employees, including sensitive subgroups;

(2) Whether the Draft Permit contained adequate conditions to protect against adverse effects on plants, marine and aquatic organisms, animals, wildlife . . .[and]

(3) Whether [Texas LNG’s application] properly calculated and addressed potential emission sources, emission rates, and background concentrations . . . .[21]

Air Quality Analysis and Air Dispersion Modeling (Issue 1)

Port Isabel argued that Texas LNG was required under the Texas Clean Air Act (TCAA) and Title 30, Section 116.11 of the Texas Administrative Code to conduct a Modeling and Effects Review Applicability (MERA) analysis and that emissions of benzene from flares were not adequately detailed in Texas LNG’s MERA analysis.[22] Texas LNG contended that a MERA analysis was not required for emissions from ‘“boilers, engines, or other combustion units fueled only by pipeline-quality natural gas’ and from ‘flares, heaters, thermal oxidizers, and other combustion devices burning gases only from onshore crude oil and natural gas processing plants.’”[23] Nonetheless, Texas LNG conducted a MERA analysis and contended that emissions from the plant met the law’s applicable requirements.[24] Both parties’ experts testified about the adequacy of the MERA analysis calculations, and some evidence existed that, if speciated, the benzene flare emissions  would not have met applicable law.[25] 

The ALJs found that Texas LNG’s facility qualified for an exemption in MERA for boilers, engines, and other combustion units fueled by pipeline-quality natural gas, and that the benzene-admissions did not rebut the prima facie demonstration that the permit met all legal requirements.[26]

Wildlife and Vegetation Impacts (Issue 2)

Port Isabel argued that Texas LNG failed to inform the TCEQ of how closely located the site is to the Laguna Atascosa National Wildlife Refuge, and it should have conducted an ecological risk assessment and bioaccumulation study to determine the true impact on the refuge.[27] Texas LNG contended that the TCEQ only requires applicants to submit a U.S. Geological Survey map, and that Texas LNG did so.[28] Furthermore, Texas LNG contended that its facility was compliant with the Environmental Protection Agency’s (EPA) secondary National Ambient Air Quality Standards (NAAQS), which the TCEQ uses to evaluate the environmental impacts of facilities.[29] Secondary NAAQS are set at levels protective of public welfare, including impacts on soils, water, crops, vegetation, animals, wildlife, visibility and climate.[30] Texas LNG also argued that a sufficient ecological risk assessment was already adequately conducted by the Federal Energy Regulatory Commission in its preparation of the site’s Environmental Impact Statement.[31]

Port Isabel’s expert testified that even if the facility was in compliance with secondary NAAQS, the NAAQS “‘are not protective for nitrogen and sulfur deposition into the environment’ or for ‘the bioaccumulation of persistent organic pollutants or heavy metals.’”[32] The EPA has recognized that NOx and SO2 have interrelated impacts on plants, soils, lakes, and streams, and that there is scientific support for developing a standard to limit acidifying deposition of these pollutants to sensitive aquatic ecosystems.[33] Texas LNG’s expert also testified that the EPA has questioned whether secondary NAAQS standards should be revised but that they have not been revised yet.[34]

The ALJs found that Texas LNG performed the required modeling to demonstrate compliance with secondary NAAQS.[35] Even with scientific evidence of the interrelated impacts of NOx and SO2, without EPA revision to the NAAQS, the ALJs determined that Texas LNG had no duty to self-impose additional restrictions.[36] Therefore, Texas LNG’s application met the requirements of applicable law.

Emissions Controls and BACT Analysis (Issue 3)

Vecinos, joined by Port Isabel, argued that Texas LNG failed to demonstrate use of the Best Available Control Technology (BACT) required under the TCAA.[37] The TCEQ defines BACT as:

An air pollution control method for a new or modified facility that through experience and research, has proven to be operational, obtainable, and capable of reducing or eliminating emissions from the facility, and is considered technically practical and economically reasonable for the facility.[38]

In determining whether a control option is BACT, the TCEQ requires that applicants compare emissions reduction performance levels to those of options previously accepted as BACT in recent reviews for the same industry.[39] The TCEQ implements a three-tiered approach in BACT analysis.[40] Crucially, Tier I requires that sites implement BACT, but allows owners to consider the cost effectiveness of a given control option.[41] In contrast, Tier III requires owners to implement control options with the Lowest Available Emissions Rate (LAER) without consideration of costs.[42] Texas LNG’s facility was subject to Tier I review.

Vecinos asserted various faults with Texas LNG’s BACT demonstration. Vecinos argued that Texas LNG’s demonstration, which described the BACT comparison with previously accepted BACT as a case-by-case basis between entire sites, ignored the specialized meaning of the term “facility” within the TCAA as a “discrete or identifiable structure, device, item, equipment, or enclosure that constitutes or contains a stationary source. . .”[43] That is, Vecinos argued that Texas LNG must demonstrate that it will implement BACT on each “facility” on its site. Vecinos then listed four facilities that Texas LNG failed to implement BACT—flares, hot oil heaters, thermal oxidizers, and fugitive emissions controls.[44] The ALJs only agreed with Vecinos that Texas LNG had failed to consider BACT on hot oil heaters and the discussion of the heaters is illustrative of BACT considerations generally.[45]

Texas LNG proposed the use of hot oil heaters with emissions limits of NOx of 0.024 lb/MMBtu, which exceeded the limit of 0.01lb./MMBtu described in TCEQ’s current BACT requirements.[46] Vecinos argued that Texas LNG failed to perform a proper BACT analysis by failing to consider the hot oil heaters implemented at Freeport LNG, which were permitted in 2011 for a NOx emissions limit of 0.006 lb./MMBtu.[47] Texas LNG contended that the Freeport LNG was subject to LAER, the more restrictive technology standard for nonattainment areas, and that comparison of the two facilities was inapt.[48] The ALJs concluded that although Freeport LNG is subject to LAER, use of LAER control methods would be consistent with BACT under Tier I so long as the control method was economically feasible,[49] and proposed that the draft permit be revised to require Texas LNG to apply the more stringent limit to its hot oil heaters.[50] At its meeting on May 6, 2020, the TCEQ approved the Proposal for Decision, including the revised emission limit, and entered an order issuing the permit.[51]

Conclusion

Ultimately, Texas LNG’s permit survived the contest despite the ALJs noting several deficiencies in the application process. In each case, the ALJs noted that the relevant evidence presented by the Protestants did not overcome the presumption established by SB 709. The contest illustrates the high bar a protestant now faces in contesting a permit once a draft has been approved by the ED. Port Isabel recently filed suit in the Travis County District Court against the TCEQ regarding the issuance of the permit to Texas LNG.[52]

John Turney is retired Senior Counsel of Richards Rodriguez & Skeith and represented regulated companies in a variety of environmental and administrative matters before the TCEQ and other regulatory agencies.

Maxwell W. Anderson is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.

 

[1] Proposal for Decision, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 1 (2020) [hereinafter PFD].

[2] Id. at 2, 11.

[3] Id. at 20.

[4] Id.

[5] Id.

[6] Id.

[7] Id. at 20.

[8] Act of Sept. 1, 2015, 84th Leg., R.S., ch. 116 §§ 1, 5, 2015 Tex. Sess. Law Serv. (S.B. 709), at 1 (codified at Tex. Gov’t Code § 2003.047).

[9] Id.

[10] PFD, supra note 1, at 4.

[11] Id.

[12] Tex. Gov’t Code § 2003.047(i-1)–(i-3).

[13] PFD, supra note 1, at 16–17, 24.

[14] Id. at 55 (stating that “the ALJs find that the Application properly calculated emissions sources and established appropriate conditions related to control technologies, with the exception of the hot oil heaters.”).

[15] Id. at 8.

[16] Closing Argument of the City of Port Isabel, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 2–6 (2020).

[17] Id. at 3.

[18] Id.

[19] Id. at 6.

[20] PFD, supra note 1, at 8.

[21] Id. at 6.

[22] Id. at 13.

[23] Id. at 11.

[24] Id.

[25] PFD, supra note 1, at 12–16.

[26] Id. at 16.

[27] Closing Arguments of the City of Port Isabel, Texas, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 16–17 (2020).

[28] PFD, supra note 1, at 18.

[29] Id. at 19; see also Reviewing National Ambient Air Quality Standards (NAAQS): Scientific and Technical Information, Env’t Prot. Agency, https://www.epa.gov/naaqs (last visited Dec. 3, 2020).

[30] PFD, supra note 1, at 19.

[31] Id. at 19, 21–22.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id. at 24

[37] Id.; see also Tex. Health & Safety Code § 382.0518(b).

[38] 30 Tex. Admin. Code § 116.10(1).

[39] PFD, supra note 1, at 27.

[40] Id. at 25.

[41] Id. at 28

[42] Id.

[43] Id. at 29; see also Tex. Health & Safety Code § 382.003(b); 30 Tex. Admin. Code § 116.10(4)).

[44] PFD, supra note 1, at 31.

[45] Id. at 55.

[46] Id. at 41.

[47] Id. at 44.

[48] Id.

[49] Id. at 46.

[50] Id. 

[52] See City of Port Isabel v. Tex. Comm’n on Env’t Quality, D-1-GN-20-004044 (Dist. Ct., Travis Cty., Tex. Aug. 5, 2020).

Vol. 50-2 Water Rights

By Emily Williams Rogers, Kimberly Kelley and Patrick Maloney

Water Rights

Texas Flood-Controlled Reservoirs

Introduction

Houston is located at the junction of the Buffalo Bayou and the White Oak Bayou, which drains into the Galveston Bay. As a result, Houston has a history of flooding and is familiar with flooding hazards. In response, Congress created flood control measures with the Rivers and Harbors Act of 1938.[1] Through this Act, the U.S. Army Corps of Engineers (the Corps) built both Addicks and Barker Dams and connected them to the Buffalo Bayou as part of an extensive flood control effort.[2] The purpose of the program was to protect Houston as it existed at the time the law passed, namely downtown Houston and the areas nearby.