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May 2013

IEC Supports IL Fracking Bill

Grayson_Lynn_COLORBy E. Lynn Grayson

 

The IEC's Executive Director, Jennifer Walling, yesterday announced in an editorial in Crain's Chicago Business that the IEC supports Illinois fracking bill, SB 1715. While IEC does not support high-volume horizontal hydraulic fracturing, this appears to be a compromise position to ensure fracking operations move forward subject to meaningful environmental regulations.

In her editorial, Ms. Walling addressed two critical points:

First, although the extraction potential of oil and gas through fracking in Illinois is unknown, oil and gas companies already have leased thousands of acres of mineral rights in southern Illinois. There is considerable evidence new fracking technology is already occurring here and it will be expanding in the near future.

The second critical fact is that Illinois has almost no regulations governing fracking. Without legislation to stringently regulate fracking, Illinois is in a highly vulnerable position. Current mining and extraction laws in Illinois are horrifically inadequate to regulate this new, highly industrialized fracking process, putting Illinois property owners at risk for the same sort of water contamination that has happened in other states. Illinois law today does not require water testing either before or after fracking. We have no setback laws governing how closely wells can be placed near homes or schools, rivers or lakes, parks or natural areas.

In short, fracking can occur anywhere in Illinois today.

While SB 1715 is compromise legislation, key provisions are included that were sought by a coalition of environmental groups such as:

  • Waste water must be stored in closed-loop tanks rather than open pits, except in rare emergency circumstances.
  • Well and surface water must be tested before fracturing and must be monitored after fracturing. If contamination is shown, the operator is presumed liable and must rebut that presumption.
  • Robust opportunities for public participation and opportunities for citizen suits to enforce the law.
  • Strong well construction standards.
  • Full disclosure of chemicals – even trade secrets must be disclosed to the Illinois Department of Natural Resources and health care professionals.
  • Ban on injecting diesel compounds, setbacks, well-plugging requirements, a required water management plan which includes total water usage, and natural gas flaring requirements to minimize air pollution.

The preferred course of action for the IEC would have been passage of a fracking moratorium. Since a moratorium was not a political reality, the IEC is supporting proposed SB 1715 to regulate fracking operations. In lending IEC's support, Ms. Walling noted:

"Our support for these safeguards does not represent an endorsement of fracking. However, with risky fracking operations legal today, hundreds of thousands of acres leased for drilling, and evidence the drilling has already begun, it is essential for the Legislature to pass tough restrictions immediately to protect our communities. SB 1715 ends the possibility of high-risk unregulated fracking occurring in Illinois and we support it."


Wal-Mart Pleads Guilty And Agrees To Pay $82M Fine For Improper Disposal Of Hazardous Substances

Siros_Steven_COLORBy Steven M. Siros

 

On May 28, 2013, Wal-Mart entered a guilty plea with respect to charges filed by the Department of Justice alleging that Wal-Mart violated the Clean Water Act (CWA) at its stores in California and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) at a recycling and repackaging facility located in Missouri. With respect to its California stores, Wal-Mart pleaded guilty to the illegal dumping of corrosive and hazardous liquid wastes into drains that led to publicly owned treatment works at multiple retail stores in Alameda, Contra Costa, Del Norte, Lake, Mendocino, Monterey, Napa, Sonoma, and Santa Clara counties. Wal-Mart agreed to pay $60 million to resolve the California CWA charges. With respect to its recycling and repacking facility in Missouri, Wal-Mart pleaded guilty to violations of FIFRA. According to the plea agreement, Wal-Mart failed to properly train its employees with respect to the required handling of pesticides that were returned to Wal-Mart. Wal-Mart is alleged to have sent these pesticides to its recycling warehouse in Missouri where the pesticides were mixed together and then offered for sale to customers in containers that were not labeled with the required registration, ingredients, or use information for the pesticides. Wal-Mart agreed to pay $14 million to resolve the Missouri charges.

Finally, Wal-Mart entered into a consent order with U.S. EPA pursuant to which Wal-Mart is required to implement a comprehensive, nationwide environmental compliance agreement to manage hazardous waste generated at its stores. The agreement includes requirements to ensure adequate environmental personnel and training at all levels of the company, proper identification and management of hazardous wastes, and the development and implementation of Environmental Management Systems at its stores and return centers. Compliance with this agreement is a condition of probation imposed in the above-referenced criminal cases. As part of this consent order, Wal-Mart also agreed to pay a $7.6 million civil penalty. To see a copy of the consent order, please click here.


China’s Toxic Rice Bowl

Grayson_Lynn_COLORBy E. Lynn Grayson

 

This weekend as many celebrated Rachel Carson's birthday, we remembered her environmental work and the landmark publication of her book, Silent Spring. In doing so, we should be reminded of how far environmental protection efforts have advanced in the U.S. and continue to progress in addressing both existing but also new challenges. While some are frustrated or disappointed at the lack of progress on key environmental concerns,  appreciating how far we have come with environmental protection initiatives is easier to view when compared to the performance of other countries such as China. Con sider the following news story regarding cadmium contamination.

This weekend, The Wall Street Journal published an editorial titled, China's Toxic Rice Bowl. The editorial addressed the contamination of rice with cadmium – a heavy metal that causes cancer, kidney failure and other diseases.

In China, heavy industry is responsible for dumping cadmium into rivers. Cadmium contamination has been detected not only in rice crops but has caused fish kills, contaminated water supplies and caused acute cadmium poisoning in entire villages.

According to The Wall Street Journal, the full extent of soil contamination is unknown and activists who expose polluters are regularly imprisoned. Local officials protect mines and factories that provide revenue, both legitimate and corrupt. Likewise, officials allow farmers to continue to grow and to sell their contaminated rice crops to avoid any relocation or compensation that may be required.

While environmental challenges remain to be addressed in the U.S., there are regulatory, civil and criminal systems in place to manage and respond to problems, both government initiated as well as citizens' actions. Moreover, U.S. businesses have made environmental protection a priority for many years and often are the champions of improved and new environmental and sustainability intiatives.

For many reasons, China's governmental systems as well as private industry there appear unable to effectively respond to growing environmental threats and food safety challenges.

 

Pesticide Use Data Now Available From USGS

Grayson_Lynn_COLORBy E. Lynn Grayson

 

The USGS recently made available detailed maps identifying annual usage of 459 pesticides throughout the U.S. The Pesticide National Synthesis Project manages pesticide data from 1992-2009 and provides specific statistics associated with pesticide use per crop and within each county.

The maps were developed for use in national and regional water-quality assessments. The USGS data was collected from surveys of farm operations and USDA statistics on annual harvest-crop acreage. This information was used to calculate use rates for each crop per year.

These maps show interesting information about the nature of pesticide use around the country. Data includes insight into the quantity of pesticide use per U.S. county as well as the specific crop growing in the same area.

The usage maps for all 459 pesticides can be accessed at http://water.usgs.gov/nawqa/pnsp/usage/maps/compound_listing.php.


EPA Promotes "Soil Gas Safe" Approach to Potential Vapor Intrusion Concerns

Grayson_Lynn_COLORBy E. Lynn Grayson

 

EPA recently announced at the Brownfields 2013 conference that the Agency was in favor of preemptive vapor intrusion control systems when constructing new buildings, particularly at brownfield sites. A "soil gas safe" community is one where all buildings use devices that minimize or prevent vapor intrusion, according to EPA's Henry Schuver.

Many brownfield projects face chemical vapor intrusion (VI) concerns. Controls for the prevention of soil gas intrusion into indoor air are a relatively low-cost and quick addition to most new developments and bring value to the buildings involved, according to Roux Associates. EPA supports a "soil gas safe" approach that highlights the benefits of preventing all soil gas/vapor intrusion, particularly for cases where there is some potential for chemical VI to be present. 

The Agency's advocacy of preemptive mitigation is a positive step in promoting redevelopment of impacted sites and other brownfield properties. If completed as part of the routine construction process, mitigative measures, such as aerated permeable floors, are protective of human health and may minimize any perceived stigma associated with brownfield redevelopment projects.


High Court Refuses to Take Up Kivalina Climate Suit

Holleb_Hotaling_Keri_COLORBy Keri L. Holleb Hotaling

 

On May 20, 2013, the United States Supreme Court denied the Alaska town of Kivalina’s petition for writ of certiorari in its public nuisance lawsuit against Exxon Mobil Corp. and other energy companies. Kivalina contended that the energy companies were injuring the small Eskimo village by causing global warming and a commensurate sea level rise, and, as a result, inhabitants were forced to leave and relocate further inland. Because the Supreme Court has opted not to hear the case, the Ninth Circuit’s ruling in favor of the energy companies will stand. The Ninth Circuit largely followed the reasoning of the Supreme Court in American Electric Power Co., Inc. v. Connecticut, ---U.S.---, 131 S. Ct. 2527, 180 L. Ed. 2d 435 (2011), in affirming the dismissal of the action by the district court and finding that the Clean Air Act (“CAA”) displaced Kivalina’s claim for $400 million in damages to fund a relocation project. (SeeNinth Circuit Affirms Dismissal of Federal Common Law Nuisance Claim for Global Warming.”) Kivalina urged the Supreme Court in its February petition that the case be controlled by Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008), which held that the Clean Water Act, a statute like the CAA, did not displace a federal common law damages claim. The case is Native Village of Kivalina, et al. v. Exxon Mobil Corp., et al., Case Number 12-1072, U.S. Supreme Court.

New Report Concludes Cities Face Water Scarcity

Grayson_Lynn_COLORBy E. Lynn Grayson

 

The Columbia University Water Center, Veolia Water and Growing Blue have issued a new report titled America's Water Risk: Water Stress and Climate Variability. The report examines water risk by evaluating both existing demand as well as variations in renewable water supply. The report offers a means to estimate water risk and map it for the U.S. at a county level. The report highlights on a U.S. map that severe water stress will occur over much of the agricultural belt of the Midwest as well as the arid regions of California and Arizona.

The measures of water risk are estimated using over sixty years of precipitation and the current water use pattern for each county. Two risk metrics are developed to capture the influence of within year dry periods (Normalized Deficit Index – NDI) and of drought across years (Normalized Deficit Cumulated – NDC). The NDI is computed as one number for each year using historical daily rainfall data for the area and current daily water needs. It measures the maximum cumulated water shortage each year during the dry period that needs to be provided for from groundwater or from surface water storage or transfers from other areas. The NDC is computed as one number over the historical climate record. It represents the largest cumulative deficit between renewable supply and water use over the entire period. Consequently, it reflects the stress associated with multi-year and within-year drought impacts at a location.

An infographic from Growing Blue summarizes the report findings and key data provided. It emphasizes the increased risk of water scarcity in cities and counties as climate change increases drought potential.

The report, America's Water Risk: Water Stress and Climate Variability, is available at http://growingblue.com/wp-content/uploads/2013/05/GB_CWC_whitepaper_climate-water-stress_final.pdf.


More Wind Power Into PJM Region Could Save $7B Annually

Grayson_Lynn_COLORBy E. Lynn Grayson

 

A new report completed by Synapse Energy Economics on behalf of Americans for a Clean Energy Grid (ACEG) concludes adding more wind power to the PJM region can lower gas and coal consumption and reduce regional wholesale energy market prices saving nearly $7B per year by the mid-2020s. The new report, issued May 9, 2013, is titled The Net Benefits of Increased Wind Power in PJM.

Key findings are

  1. Increased installation of wind power resources in the PJM region at roughly double the levels specified by existing RPS statutes lead to annual production cost reductions that range from $14.5 to $14.9 billion per year. This result, arising from the use of the ProSym production cost modeling tool, is based on a set of reasonable assumptions concerning future carbon costs in the electric sector, load, coal retirement levels, natural gas resource additions, improved transmission system infrastructure, and natural gas prices.
  2. Consumers see significantly improved emission profiles in the wind scenarios. Carbon, SO2 and NOx emissions are all reduced.
  3. The incremental costs to achieve these production cost gains ranges from $7.6 to $8.0 billion per year by 2026. This indicates that in general a planned expansion of wind power in the region will lead to net benefits for consumers.
  4. The energy market price impact of a high wind case is seen to be relative high in non-summer months, and market prices in the summer period are high in the wind cases. PJM consumers could be exposed to these market prices, but to the extent that PJM consumers pay for the incremental wind power assumed for the wind scenarios, consumers are hedged against those market prices. We assume that all production cost efficiency gains seen in this analysis flow to consumers, and all required investments are borne by consumers. We also note that the Eastern interconnection-wide nature of the energy modeling leads to a relative increase in exports from PJM in the wind cases, compared to the base case (with PJM net imports).

The report suggests the following next steps to achieve these proposed cost savings through increased reliance on wind power:

  1. Assume large scale retirements of coal plant resources throughout the Eastern Interconnection, not just in the PJM region. A rebalancing of capacity requirements in each major area would be necessary to ensure resource adequacy.
  2. Conduct iterative runs of the production cost modeling by incrementally stepping up transmission system transfer capacities, and simultaneously reducing the overall planning reserve margin, to optimize the tradeoffs between building more transmission and building sufficient balancing capacity with new gas-fired resources.
  3. Continue to test production cost effects on different combinations of increased demand-side resources, including energy efficiency and demand response. Given the relatively high summer period prices and transmission congestion during those periods, it appears that non-wind related constraints can lead to increasing production costs, since summer wind output is relatively low in the model.
  4. Test the effects of multiple combinations of increasing wind, solar and energy efficiency resources.
  5. Test varying potential cost profiles for offshore wind and solar resources.
  6. Examining PJM boundary interactions, and assess the extent to which different import/export flow patterns are influenced by resource decisions within and outside of PJM.

PJM Interconnections is a regional transmission organization that coordinates movement of wholesale electric in all or parts of DC, IL, IN, KY, MD, MI, NJ, NC, OH, PA, TN, VA and WV.

Synapse Energy Economics, Inc. is a research and consulting firm that specializes in energy, economic and environmental topics.

Americans for a Clean Energy Grid supports policies that will modernize the U.S. electric power network. The new report is available on ACEG's website at http://cleanenergytransmission.org.

Compliance With FIFRA Regulations Provides Defense From Product Liability Lawsuit

Siros_Steven_COLORBy Steven M. Siros

 

An Indiana appellate court recently affirmed summary judgment on behalf of The Dow Chemical Company and Dow AgroSciences, LLC (collectively "Dow"), in a personal injury lawsuit premised on alleged design defect and failure to warn claims. See Gresser et al. v. The Dow Chemical Company, Inc., et al. (Ind. Ct. App. April 30, 2013). Plaintiffs purchased a home that had been treated with the pesticide, Dursban TC. Shortly after moving into the home, plaintiffs allegedly experienced adverse health impacts that they attributed to the pesticide. Plaintiffs therefore filed product liability claims against Dow and negligence claims against the pesticide applicator.

Dow filed for summary judgment, arguing (1) that the Dursban was not a defective product and (2) that plaintiffs' claims were preempted under federal law. The trial court granted summary judgment, finding that Dursban was not a defective product and that plaintiffs' claims were preempted. On appeal, the Indiana appellate court noted that Indiana's Product Liability Act ("IPLA") provides a rebuttable presumption that a product is not defective where, before the sale, the manufacturer complies with all applicable codes, standards, regulations or specifications established by an agency of the United States or Indiana. Because Dow had registered the pesticide in compliance with the applicable FIFRA regulations, the court found that Dow was entitled to a statutory presumption that its product was not defective. Plaintiffs presented no admissible evidence to rebut this presumption, and therefore, the court found that Dow was entitled to summary judgment under the IPLA.

With respect to Dow's alternative preemption argument, however, the court found that the trial court's grant of summary judgment on this ground was improper. The court cited to Dow Chemical Co. v. Ebling, 753 N.E.2d 633 (Ind. 2001), noting that "the use of state tort law to further the dissemination of label information to persons at risk clearly facilitates rather than frustrates the objectives of FIFRA and does not burden an applicator's compliance with FIFRA."

To see a copy of this opinion, please click here.


Law360 Q&A With Lynn Grayson

Grayson_Lynn_COLORBy E. Lynn Grayson

 

Law360's Q&A series asked:

  1. What is the most challenging case you have worked on and what made it challenging?
  2. What aspects of your practice area are in need of reform and why?
  3. What is an important issue or case relevant to your practice area and why?
  4. Outside your firm, name an attorney in your field who has impressed you and explain why?
  5. What is a mistake you made early in your career and what did you learn from it?

View the latest Law360 Q&A for environmental law insights on Superfund reform, water scarcity and environmental law practice tips.