Volume: 51.2

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.