Tuesday, April 29, 2014

Supreme Court Upholds EPA Interstate Air Pollution Regulations

The Supreme Court has upheld EPA regulations requiring reductions in SO2, NOx, and fine particle emissions in 28 states stretching from Texas to New York.

The regulations, known as the “Cross-State Air Pollution Rule” or “Transport Rule,” are intended to reduce interstate transport of air pollutants, and were enacted under the “Good Neighbor Provision” of the Clean Air Act, which requires states implementing federal Clean Air Act requirements to enact measures to avoid contributing “significantly” to nonattainment of air quality standards in other states. EPA adopted Federal Implementation Plans (FIPs) to meet the Good Neighbor Provision’s requirements after it concluded that the measures adopted  in the 28 State Implementation Plans (SIPs) at issue were inadequate.

The majority opinion, authored by Justice Ginsburg, concludes that EPA acted within its discretion in adopting a federal rule for cross-border pollution, and reverses a D.C. Circuit decision vacating the rule. Citing the plain meaning of the Clean Air Act, the Court rejects the argument that EPA was required to provide the states with an opportunity to revise their SIPs before adopting federal regulations. The Court also upholds EPA’s decision to take cost into account in allocating emissions reductions among upwind states. The majority opinion was authored by Justice Ginsburg and joined by Justices Roberts, Kennedy, Breyer, Sotomayor and Kagan. Justice Alito took no part in the consideration of the case. 

In his dissent, Justice Scalia (joined by Justice Thomas) argues that EPA abused its discretion by failing to give states an opportunity to modify their SIPs to meet the requirements of the Good Neighbor Provision before issuing federal implementation plans, and also took issue with EPA’s consideration of cost in setting emissions limits for upwind states, which he argues is prohibited by the plain language of the statute.

The lead case is EPA v. EME Homer City Generation, L.P., No. 12-1182.

-- Chris Jensen and Morgan Gilhuly

For more information, please contact Chris Jensen at cdj@bcltlaw.com, (415) 228-5411, or Morgan Gilhuly at rmg@bcltlaw.com, (415) 228-5460.

Friday, April 18, 2014

D.C. Circuit Upholds Most of Portland Cement MACT, Vacates “Unavoidable Malfunction” Defense

In a unanimous ruling issued earlier today, the D.C. Circuit largely upheld EPA regulations governing emissions of toxic air pollutants from Portland cement plants, while vacating a provision that created an affirmative defense for “unavoidable” equipment malfunctions.

The regulations, issued in February 2013, set limits for emissions of particulate matter, mercury, hydrochloric acid, and hydrocarbons from Portland cement manufacturing facilities. 

In rejecting several arguments advanced by environmental organizations challenging the regulations, the court held that EPA reasonably interpreted the Clean Air Act to allow the Agency to consider compliance costs in setting “beyond-the-floor” MACT limits for toxic air pollutants.  The court also rejected the argument that Section 112(d)(7) of the Clean Air Act should be interpreted as an anti-backsliding provision and held that EPA acted reasonably in extending the compliance date for all pollutants covered by the regulations when it revised the standard for particulate matter in the 2013 rule.

However, the court concluded that the creation of an affirmative defense for “unavoidable” equipment malfunctions exceeded EPA’s statutory authority.

The lead case is Natural Resources Defense Counsel v. EPA, Case No. 10-1371.

--Chris Jensen

For more information, contact Chris Jensen at cdj@bcltlaw.com, or (415) 228-5411.

Wednesday, April 16, 2014

D.C. Circuit Upholds Power Plant Mercury and Air Toxics Standards

The D.C. Circuit has upheld a 2012 EPA rule limiting air toxics emissions from coal- and oil-fired power plants.  The rule, commonly known as the Mercury and Air Toxics Standards, or “MATS,” requires new and existing coal- and oil-fired power plants to reduce emissions of mercury, arsenic, chromium, and other toxic air pollutants.

In a 2-1 decision, the D.C. Circuit rejected a variety of challenges from industry and environmental groups, including a challenge to EPA’s conclusion that it was not required to consider costs in determining whether regulation of electric utilities is “appropriate and necessary” under Clean Air Act § 112(n)(1)(A).  While acknowledging that cost of compliance plays an explicit role in setting “beyond-the-floor” MACT standards and indirectly influences the determination of MACT floors, the majority deferred to the EPA’s determination that it is reasonable to make the initial decision to list the utilities as sources of hazardous air pollutants without taking cost into consideration.

In his dissenting opinion, Judge Kavanaugh argued that the term “appropriate” necessarily implied that costs should be taken into account in making the listing decision, citing EPA’s own regulatory impact analysis, which estimated the cost of implementing the rule at $9.6 billion.

The lead case is White Stallion Energy Center, LLC v. U.S. Environmental Protection Agency, D.C. Circuit Case No. 12-1100.

-- Chris Jensen

For more information, please contact Chris Jensen at cdj@bcltlaw.com or (415) 228-5411.

California Finalizes Drinking Water Standard for Hexavalent Chromium

On April 15, 2014, the California Department of Public Health (CDPH) submitted the Final Statement of Reasons for the Hexavalent Chromium Maximum Contaminant Level (MCL) to the Office of Administrative Law.  No significant changes were made to the draft MCL of 10 ppb (µg/L) released by CDPH in August 2013, despite the receipt of approximately 18,000 comments on the proposal.  The MCL will become effective on July 1, 2014, once it is approved by the Office of Administrative Law. 

Prior to the draft hexavalent chromium MCL released by CDPH in August 2013, both California and federal law set a drinking water standard for total chromium, but neither California nor federal law set a drinking water standard specifically for hexavalent chromium.  The hexavalent chromium MCL in California will precede any drinking water standard for hexavalent chromium under federal law.

As previously discussed here and here, the hexavalent chromium MCL establishes the drinking water standard that water purveyors must meet in order to serve potable water to consumers.  Under existing California law, once the MCL is effective, public water purveyors will need to begin sampling for hexavalent chromium to meet the requirements of the California Safe Drinking Water Act (SDWA) and report the samples to CDPH.  If the samples exceed the MCL, purveyors have reporting obligations to customers and may be required to take a water source out of service under circumstances specified in the SDWA.

The publication of the hexavalent chromium MCL follows from an order issued by the Alameda County Superior Court requiring CDPH to set the MCL, previously discussed hereSee Natural Res. Def. Council v. Cal. Dep’t of Public Health, No. RG12-643520 (Alameda Sup. Ct. July 26, 2013). 

Although there had been discussion in recent weeks regarding including an extended grace period for compliance with the hexavalent chromium MCL for water purveyors, which would have triggered an extension of the comment period on the MCL, no extended grace period was included in the final version of the hexavalent chromium MCL.  More extended grace periods are frequently provided by the federal Environmental Protection Agency when establishing drinking water standards.  The California MCL provides for a six-month implementation period before compliance monitoring must begin, and an additional year to meet the standard, but one commenter indicated that a “lawsuit seeking to stay application of the MCL” would result if an extended grace period was not provided.
 
Barg Coffin will continue to monitor California’s efforts to develop a drinking water standard for hexavalent chromium as well as any litigation that challenges the new standard.
The Final Statement of Reasons is available here.

Rick Coffin and Dave Metres

For more information, please contact Rick Coffin at rcc@bcltlaw.com, (415) 228-5420, or Dave Metres at dmm@bcltlaw.com, (415) 228-5488.

Monday, April 7, 2014

CEQA Alert: Court of Appeal Addresses Inadequate Blight/Urban Decay Mitigation and Energy Impact Analyses

In California Clean Energy Committee v. City of Woodland (opinion filed 2/28/14; partial publication ordered 4/1/14), the Third Appellate District ruled that the City of Woodland violated the California Environmental Quality Act  (CEQA) when it approved a “super-regional retail center” by relying on inadequate measures to mitigate urban decay effects, rejecting a mixed-use alternative without adequate support for its infeasibility finding, and failing to adequately analyze the energy impacts of the project.

The project at issue proposed annexation of 154 acres of farmland to the City of Woodland and re-zoning of that land from “agricultural” to “general commercial” as part of the development of a regional commercial center that would include over 800,000 square feet of retail space, 100,000 square feet of office space, three hotels, four restaurants, and an 80,000 square foot auto mall. 

In approving a scaled-down version of this “super-regional retail center” project, the City concluded that the project would result in physical deterioration and urban decay of retail centers in other parts of the City, including the City’s downtown area.  The City adopted mitigation measures to address these effects, including:
  1. requiring the developer to prepare market studies and urban decay analyses for future site-specific projects,
  2. requiring the developer to contribute funds to develop a “retail strategic plan and implementation strategy” for the City’s downtown area, and 
  3. requiring the City to coordinate with the owner of a local mall that would be impacted by the development, to develop a “strategic land use plan” for the mall. 
The Court of Appeal ruled that these mitigation measures were inadequate because they were too speculative and/or did not commit the City to any actual mitigation to reduce the urban decay effects associated with the project.  

The Court also held that the City violated CEQA by rejecting a mixed-use alternative to the project on the ground that it was environmentally inferior to the proposed project, where the administrative record contained no evidence to support this conclusion—the Draft and Final EIRs had both rejected the mixed use alternative on the basis of economic infeasibility rather than environmental inferiority. 

Finally, the Court held that the City violated CEQA by failing to adequately analyze the energy impacts of the proposed project—specifically, the City failed to adequately analyze transportation, construction and operational energy impacts and failed to consider renewable energy options for the project. 

-- Don Sobelman and Nicole Martin

For more information, contact Donald Sobelman at (415) 228-5456, des@bcltlaw.com, or Nicole Martin at nmm@bcltlaw.com, (415) 228-5435.

Friday, April 4, 2014

California Water Board Finalizes New Water Quality Requirements for Industrial Facility Storm Water Discharges

For the first time in 17 years, industrial facilities in California must contend with a new set of legal requirements controlling storm water.  On April 1, 2014, the California State Water Resources Control Board (State Board) formally adopted the final draft of the general NPDES permit that regulates storm water discharges associated with industrial activity, known as the “Industrial General Permit.” 

The new Industrial General Permit imposes additional permitting requirements and expands the scope of the Permit to cover new categories of industrial facilities.  Facility and EHS managers should review the new permit and ensure their facilities are on-track to be in compliance when the new Permit becomes effective on July 1, 2015.   Failure to comply with the new Permit could expose facilities to regulatory action by the State Board and the Regional Water Quality Control Boards, or result in a citizen group lawsuit under the Clean Water Act.

As discussed previously by Barg Coffin attorneys here, here, and here, the new Industrial General Permit will impose mandatory best management practices (“BMPs”), require increased sampling and monitoring, and mandate technical reports and action plans if monitoring shows that storm water discharges exceed certain pollutant concentrations. 

According to the State Board, there are over 10,000 California industrial facilities currently enrolled under the previous Industrial General Permit, and each will need to confirm that their operations and practices comply with the new requirements. 

Additionally, for the first time, some facilities not previously subject to regulation will be required to notify the State Board that their industrial activities are not exposed to rain water and will not discharge to storm drains in order to obtain an exemption from the substantive requirements of the Industrial General Permit.

Additional information is available on the State Board website, and the Order adopting the Industrial General Permit (2014-0057-DWQ) is available here.

-Don Sobelman and Dave Metres

For more information, please contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com, or Dave Metres at (415) 228-5488, or dmm@bcltlaw.com