As 2017 draws to an end, we wanted to thank everyone that follows our Corporate Environmental Lawyer blog. 2017 has been an interesting year and we have enjoyed providing information on critical environmental, health and safety issues for the regulated community. As part of the year in review, we thought it might be interesting to highlight the most popular posts from each of the four quarters in 2017.
- Trump Administration: 2017 Insights
- New State 1,4-Dioxane Drinking Water Standard-New York Threatens to Take Action if U.S. EPA Doesn’t
- World Water Day: Wednesday, March 22, 2017--Jenner & Block Announces Special Water Series
- Trump Administration Issues Freeze on New and Pending Rules – Halting Dozens of Recent EPA Rules
- Great Lakes Compact Council Holds Hearing on Cities Initiative Challenge to Waukesha Diversion of Lake Michigan Water
- Federal Judge Orders Dakota Access Pipeline to Revise Environmental Analysis; Leaves Status of Pipeline Construction Undecided
- Litigation in D.C. Circuit Court Put on Hold While EPA Reconsiders 2015 Ozone Air Quality Standards
- Attorney-Client Privilege Does Not Protect Communications with Environmental Consultants
- News of OECA’s Demise May be Greatly Overstated
- EPA Announces Proposed Rule to Rescind ‘Waters of the United States’ Rule
- Court Decision Remanding FERC’s Evaluation of GHG Emissions May Derail $3.5B Pipeline
- Hurricane Harvey and Act of God Defense—Viable Defense or Futile Prayer
- Who is in Charge of Protecting the Environment—The Role of U.S. EPA and State Environmental Agencies During a Hurricane
- Shell Latest Target of CWA Climate Change Citizen Suit
- New Climate Change Lawsuit: Publicity Stunt or Reasonable Effort to Protect California Property Owners?
- Cities Risk Ratings Downgrade for Failure to Address Climate Change Risks
- Dumpster Diving Results in $9.5M Penalty Recovery for California
- Following Keystone Pipeline Oil Spill, Judge Orders Parties to Prepare Oil Spill Response Plan for Dakota Access Pipeline
- EPA Publishes Proposed Rule on Reporting Requirements for the TSCA Mercury Inventory
- Imagine a Day Without Water
We look forward to continuing to blog on breaking environmental, health and safety issues and we are sure that we will have plenty to blog about in 2018. Warmest wishes for a wonderful holiday season.
Steve Siros and Allison Torrence
Following Keystone Pipeline Oil Spill, Judge Orders Parties to Prepare Oil Spill Response Plan for Dakota Access Pipeline
As we previously reported on this blog, in June, Federal District Court Judge James Boasberg found that the U.S. Army Corps of Engineers (the Corps) did not fully comply with the National Environmental Policy Act (NEPA) when it granted easements to the Dakota Access Pipeline (DAPL) to cross Lake Oahe, a federally regulated water in North Dakota. Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 16-cv-01534 (June 14, 2017). In light of that ruling, Plaintiffs, the Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe (the Tribes) asked the court to vacate the DAPL’s permits and easements and enjoin further operations until the Corps fully complies with NEPA. In October, Judge Boasberg denied the Tribes’ request and allowed DAPL to continue operations while the Corps completes its supplementary NEPA analysis.
Following the October ruling allowing operations to continue, in November, the TransCanada Keystone Pipeline leaked an estimated 210,000 gallons of crude oil in South Dakota. Following this widely report pipeline oil spill, on December 4, 2017, Jude Boasberg ordered DAPL owner, Dakota Access, LLC, the Corps and the Tribes to “coordinate to finalize an oil-spill response plan affecting Tribal resources and lands at Lake Oahe.” Judge Boasberg also ordered Dakota Access, with input from the Tribes, to hire an independent third-party engineering expert to conduct a compliance audit of the DAPL. Both the oil spill response plan and the compliance audit report must be submitted to the court by April 1, 2018.
In addition, Dakota Access was ordered to submit bi-monthly reports to the court providing detailed information with respect to the segment of the pipeline crossing Lake Oahe. These bi-monthly reports will include:
- Inline-inspection run results or direct-assessment results performed on the pipeline during the reporting period;
- The results of all internal-corrosion management programs and any actions taken in response to findings of internal corrosion;
- Any new encroachment on the right‐of‐way during the reporting period;
- Any new integrity threats identified during the reporting period;
- Any reportable incidents that occurred during the reporting period;
- Any leaks or ruptures that occurred during the reporting period;
- A list of all repairs on the segment made during the reporting period;
- Ongoing damage-prevention initiatives on the pipeline and an evaluation of their success or failure;
- Any changes in procedures used to assess and monitor the segment; and
- Any company mergers, acquisitions, transfers of assets, or other events affecting the management of the segment.
Judge Boasberg explained the reasoning behind his decision as follows:
Recent events have made clear, moreover, that there is a pressing need for such ongoing monitoring. Earlier this month, the Keystone Pipeline leaked 210,000 gallons of oil in Marshall County, South Dakota.…The spill occurred near the boundaries of the Lake Traverse Reservation, home of the Sisseton Wahpeton Oyate Tribe, thus highlighting the potential impact of pipeline incidents on tribal lands.
Dakota Access must file these detailed reports beginning December 31, 2017, and every 60 days thereafter until the remand is complete. The Corps anticipates completing its supplemental NEPA analysis by April 2018, at which point the court will determine whether the Corps has fully complied with NEPA.
In a November 28, 2017 report, Moody’s Investors Service warned cities and states that they faced the risk of a credit rating downgrade if they were not proactive in planning to mitigate the risks of climate change. The Moody’s report listed six indicators that it used to assess the exposure and overall susceptibility of states and municipalities to the physical effects of climate change, including share of economic activity derived from coastal areas, hurricane and weather damage as a share of the economy, and the share of homes in a flood plain. Based on these indicators, Florida, Georgia, Mississippi, and Texas were the states most at risk from climate change. Although Moody’s couldn’t point to a specific state or municipality whose rating was (or might be) downgraded as a result of a failure to plan for climate change, the Moody’s report clearly sets the stage for such downgrades in the future.
U.S. EPA’s Office of Superfund Remediation and Technology Innovation (“OSRTI”) recently indicated that it may be looking to the Great Lakes National Program Office’s (“GLNPO”) sediment cleanup program for best practices that might be applicable to Superfund cleanups. OSRTI’s evaluation of GLNPO’s sediment program is consistent with comments submitted by responsible parties and cleanup contractors that U.S. EPA should give more consideration to leveraging public and private funds in Superfund cleanups. The Great Lakes Legacy Act established the GLNPO, which has been working closely with states, local government entities and other stakeholders to address sediment issues at 31 areas of concern in the Great Lakes area. U.S. EPA’s website notes that the Great Lakes Legacy Act program has invested approximately $338 million to address these sediment impacted sites while leveraging an additional $227 million from non-federal parties. Whether this approach can achieve similar results at other Superfund sites remains to be seen, but such flexibility would appear to be consistent with Administrator Pruitt’s priority to more quickly and economically address CERCLA sites.
A new GAO Report finds that DOD failed to report drinking water-related violations for 16 of its installations and that overall compliance rates were lower for DOD-treated drinking water systems. The Report also noted DOD has made some progress in addressing emerging contaminants in its drinking water, specifically including perfluorooctane sulfonate (PFOS), perfluorooctanoic acid (PFOA), and perchlorate.
The Report identified different compliance rates between DOD-treated water systems and non-DOD-treated water systems. Just one percent of individuals who received non-DOD-treated water from military installation systems were served by systems with EPA or local health violations. However, 11 percent of individuals who received DOD-treated drinking water were served by systems with such violations. DOD has taken steps to limit individuals’ exposure to some chemicals, including providing alternative water supplies and installing water treatment systems.
The Report recommends the following key actions to improve DOD’s data, reporting, and oversight of drinking water requirements:
- Identify and implement any necessary changes to DOD’s environmental compliance policy to clarify DOD’s reporting requirements for violations of health-based drinking water standards;
- Identify and implement actions to increase understanding at Army, Navy and Air Force installations and commands about DOD’s reporting requirements for violations of health-based drinking water regulations; and
- Review reported compliance data to identify the reasons for any differences in the number of violations of health-based drinking water regulations between DOD’s two types of public water supplies and take action to address the causes of any differences.
DOD concurred with each of these recommendations.
On November 1, 2017, the United States District Court of Appeals for the D.C. Circuit rejected the Sierra Club's National Environmental Policy Act (“NEPA”) challenges to the Department of Energy’s (“DOE”) authorization of export of liquefied natural gas from three facilities in Louisiana, Maryland, and Texas. The court noted that its decision in Sierra Club v. U.S. Department of Energy (Freeport), 867 F.3d 189 (D.C. Cir. 2017) was largely determinative of the Sierra Club’s challenges to the LNG exports from these three facilities. In the Freeport decision, the court agreed that DOE had provided a reasoned explanation as to why DOE believed the indirect effects pertaining to increased gas production were not reasonably foreseeable. The court also found that DOE did not violate NEPA when declining to make specific projections regarding the environmental impacts associated with the increased production. The Freeport court also acknowledged that DOE had adequately considered the downstream greenhouse gas emissions resulting from the indirect effects of the LNG exports.
Notwithstanding the Freeport decision, the Sierra Club continued to challenge DOE’s authorizations for LNG exports for these three facilities, arguing that DOE’s reliance on an Environmental Assessment that found no significant impact (as opposed to an Environmental Impact Statement) is contradicted by evidence in the record. The court rejected this argument, noting that an agency’s finding of no significant impact will only be reversed if the decision was arbitrary, capricious, or an abuse of discretion which the court concluded was not supported by the record evidence. The Sierra Club also argued that DOE failed to consider the distributional impacts when evaluating “public interest” under the Natural Gas Act. However, the court noted that DOE had in fact considered the distributional impacts of the LNG exports.
Following this judgment, the Sierra Club will have lost all four petitions it filed against the DOE relating to NEPA assessments for LNG exports. The Sierra Club also lost all four of its petitions challenging FERC’s approval of these LNG exports. Please click here for a copy of the court’s November 1st decision.
Today recognizes the third annual Imagine a Day Without Water event to raise awareness and educate America about the value of water. Over 500 organizations, cities, water authorities, and corporations have joined together once again to focus attention on the importance of this valuable resource and the critical need to upgrade and improve water infrastructure throughout the U.S.
No water to drink, or even to make coffee with. No water to shower, flush the toilet, or do laundry. Hospitals would close without water. Firefighters couldn't put out fires, and farmers couldn't water their crops. Some communities in America already know how impossible it is to try to go a day without our most precious resource: water.
The 2017 Infrastructure Report Card published by the American Society of Civil Engineers provided an overall grade of a D+ for the status and condition of U.S. infrastructure. Particularly as to drinking water, the Report Card noted the following:
- One million miles of pipes deliver drinking water and most date from the early 20th century with a 75-100 year lifespan
- Over 240,000 water main breaks occur annually
- Over $1 trillion dollars is the estimate needed to maintain/upgrade/expand service to meet water demands over the next 25 years.
Can you imagine a day without water? In the context of your business and its operations, please consider the resources available from these two organizations that address the following water-related considerations, including conditions and capacity, funding, public safety, future needs, and resilience and innovation.
On September 26, 2017, EPA announced its new Smart Sectors program, a program aimed at easing the regulatory burden on industry. The official notice for this program was published in the Federal Register on September 26th (82 FR 44783), with a correction published on September 29th (82 FR 45586). EPA explained the purpose behind the Smart Sectors program in the notice:
EPA’s Smart Sectors program will re-examine how EPA engages with industry in order to reduce unnecessary regulatory burden, create certainty and predictability, and improve the ability of both EPA and industry to conduct long-term regulatory planning while also protecting the environment and public health.
EPA has initially identified 13 sectors of industry to work with under this program, based on each sector’s potential to improve the environment and public health:
Jenner & Block is pleased to report that Sam Hirsch, former Acting Assistant Attorney General and Principal Deputy at the U.S. Department of Justice’s Environment and Natural Resources Division (ENRD), has returned to the Firm as a Partner in our Washington, DC office. Sam was formerly an attorney with Jenner & Block until 2009 when he moved to the U.S. Department of Justice, where he served as Deputy Associate Attorney General before taking on his most recent role. During his time at ENRD, Sam was primarily responsible for litigation and policy work relating to the prevention and cleanup of pollution, environmental challenges to federal programs, stewardship of public lands and natural resources, property acquisition, wildlife protection, and Indian rights and claims. As Acting Assistant Attorney General and Principal Deputy, he oversaw the drafting of more than 200 briefs, including more than 40 U.S. Supreme Court cert-stage, merits, and amicus briefs, as well as more than 150 appeal-recommendation memos to the Solicitor General. These briefs and memos dealt with cases in all 13 federal circuits and covered nearly the entire range of federal environmental and natural resources statutes, including the Clean Air Act, the Clean Water Act, the National Environmental Policy Act (NEPA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or Superfund), the Oil Pollution Act, the Resource Conservation and Recovery Act (RCRA), the Safe Drinking Water Act, the Endangered Species Act, the Migratory Bird Treaty Act, the Marine Mammal Protection Act, and the Lacey Act.
Sam was involved in all phases of the Deepwater Horizon litigation, including helping structure the global settlement, which directed more than $8.1 billion toward restoring damaged natural resources in the Gulf of Mexico. He also drafted portions of the criminal plea agreements that created the National Academy of Sciences' $500 million Gulf Research Program, which funds and conducts studies and projects to enhance oil-system safety, human health, and environmental resources in the Gulf of Mexico and other U.S. outer-continental-shelf regions that support oil and gas production.
Sam may be reached at (202) 637-6335 or email@example.com. Welcome back Sam!
On Thursday, September 14th, from 5 pm to 7 pm, environmental attorneys and professionals will come together for a networking reception at Jenner & Block's offices in Chicago. Complimentary food and drinks will be provided thanks to the event’s sponsors. This is the third year Jenner & Block has hosted this event, which continues to grow every year. Jenner & Block will be joined by a number of bar associations and organizations:
- CBA Environmental Law Committee
- CBA Young Lawyers Section Environmental Law Committee
- ISBA Environmental Law Section
- ABA Section of Environment, Energy, and Resources
- Air & Waste Management Association Lake Michigan States Section
- DRI Toxic Tort and Environmental Law Committee
Jenner & Block partner Allison Torrence is a former Chair of the CBA Environmental Law Committee and will be giving brief welcome remarks.
Details for this event are below. If you would like to join us at this reception, please RSVP here.
Environmental Attorney Reception
September 14, 2017 | 5:00 pm to 7:00 pm
Jenner & Block Conference Center | 45th Floor | 353 N. Clark St. | Chicago, IL 60654
Who is in Charge of Protecting the Environment--The Role of U.S. EPA and State Environmental Agencies During a Hurricane
Following Hurricane Harvey, and with the pending landfall of Hurricane Irma, the manner and degree to which federal and state agencies coordinate environmental protection duties may seem chaotic and disorganized. However, there is a specific protocol that guides these federal agencies in taking steps to protect the environmental in anticipation of and following a hurricane.
As brief background, in 1988, the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the “Stafford Act”) was promulgated in an effort to establish an orderly process pursuant to which the Federal Government provides disaster and emergency assistance to State and local governments. At the request of the Governor of an affected State, the President may declare a major disaster or emergency. For example, on September 4, 2017, Florida Governor Rick Scott declared a state of emergency in anticipation of Hurricane Irma. Shortly thereafter, President Trump declared a major emergency. Upon declaration of such a major disaster or emergency, the President appoints a Federal Coordinating Officer (“FCO”), a FEMA official who is charged with coordination of Federal assistance to the affected State and local governments.
FEMA’s primary focus is protection of human life and the majority of federal resources are obviously directed towards that goal. However, FEMA also works closely with other agencies such as U.S. EPA and state environmental agencies to implement emergency response activities focused on protecting the environment. FEMA has established numerous Emergency Support Functions (ESFs), which provide the structure for coordinating interagency support for a Federal response to declared disasters and emergencies. U.S. EPA has been designated as the ESF Coordinator for Emergency Response # 10—Oil and Hazardous Materials Response.
Here are some key environmental issues that federal and state agencies focus on during a natural disaster such as a hurricane:
As the cleanup, rebuilding, and recovery continues in the aftermath of Hurricane Harvey, there has been increasing news coverage about the environmental consequences resulting from impacts of this devastating storm in Texas. We have all seen the coverage on the Arkema SA chemical plant explosion and fire in Crosby, Texas, as well as this weekend’s news that 13 Superfund sites in the Houston area have been flooded and are experiencing possible damage. What we have not heard much about is action on the part of the Texas Commission on Environmental Quality (TCEQ) to do its part to allow residents and their commercial and industrial businesses to recover.
Last week, TCEQ issued a Request for Suspension of TCEQ Rules that may prevent, hinder, or delay necessary action in coping with Hurricane Harvey. The rules suspended in order to manage Hurricane Harvey impacts address regulatory obligations related to air, water, storage tank, fuel and waste management. In addition, TCEQ has developed a Hurricane Response webpage and made clear the Agency's priority is the recovery efforts helping to restore water and wastewater services as well as to assess damage, manage debris, and bring other critical services back online.
Most substantive federal environmental laws and their implementing regulations also provide emergency exemptions that can be triggered following any natural or manmade disaster to ensure laws do not interfere with rescue and recovery efforts. Most emergency exemptions require a declaration or finding on the part of the United States Environmental Protection Agency (EPA) or of another high-ranking government official. We will address EPA's Hurricane response actions in future blogs.
At a time when the residents of Texas need the best of their government, TCEQ is providing an excellent example of support, help, and a willingness to do what is right under the circumstances. Kudos to TCEQ!
Following the disaster that has unfolded in Texas as a result of the unprecedented flooding caused by Hurricane Harvey, affected businesses might be asking whether they might be able to avail themselves of the “Act of God” defense that is embodied in several federal environmental laws and the Texas Health and Safety Code. If ever an event qualified as an “Act of God,” many would likely agree that Hurricane Harvey falls into that category. However, if the experience of Hurricane Katrina provides any guidance, regulated entities are likely to face substantial hurdles triggering the “Act of God” defense for releases attributable to Hurricane Harvey.
Although not defined in the Texas Health and Safety Code, CERCLA defines an “Act of God” as the “unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented, or avoided by the exercise of due care or foresight.” 42 U.S.C. §9601(1). The Oil Pollution Act of 1990 contains a verbatim definition of “Act of God.” 33 U.S.C. §2701(1).
One might ask how many times the “Act of God” defense has been successfully asserted, and the answer is that there is not a single reported case where that defense has been successful.
On August 28, 2017, Shell Oil Company became the latest target of a Clean Water Act citizen suit lawsuit filed by the Conservation Law Foundation (“CLF”). Coming on the heels of the unfolding disaster in Texas caused by Hurricane Harvey, this most recent lawsuit alleges that Shell’s stormwater pollution prevention plan for its Providence, Rhode Island Terminal is inadequate in that it fails to account for sea level rise, increased precipitation generally, and the increased frequency of storms that CLF alleges will occur due to climate change. This latest lawsuit follows a previously filed citizen suit by CLF against Exxon under both the Clean Water Act and Resource Conservation and Recovery Act relating to Exxon’s Everett Terminal located in Everett, Massachusetts. A hearing on Exxon’s pending motion to dismiss is currently set for September 12, 2017.
Events like Hurricane Harvey will provide continuing fodder for what is likely to be sharp increase in citizen suits being filed by environmental organizations seeking to advance their agendas in light of the current regulatory climate.
The Department of Homeland Security (DHS) announced yesterday its plans to waive numerous environmental laws to allow more expedient construction of barriers and roads in the vicinity of the international border near San Diego. The decision was signed by then DHS Secretary John Kelly and applies to a 15-mile border segment in San Diego where the Agency plans to upgrade fencing and build border wall prototypes.
DHS issued the waiver pursuant to its authority in Section 102 of the 2005 Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). This law grants the DHS Secretary a number of authorities necessary to carry out DHS’s border security mission. Citing this authority, the DHS notice makes clear that these infrastructure projects will be exempt from complying with critically important environmental laws such as the National Environmental Policy Act, the Endangered Species Act, the Clean Water Act and other laws related to wildlife, conservation, cultural and historic artifacts, and the environment.
This action has been under consideration by DHS and the subject of much discussion among environmental activists. The Center for Biological Diversity already sued DHS earlier this year seeking an updated environmental review of the southern border infrastructure projects.
According to yesterday’s notice, “…while the waiver eliminates DHS’s obligation to comply with various laws with respect to the covered projects, the Department remains committed to environmental stewardship with respect to these projects. DHS has been coordinating and consulting—and intends to continues to do so—with other federal and state agencies to ensure impacts to the environment, wildlife, and cultural and historic artifacts are analyzed and minimized, to the extent possible.”
Even in the wake of everything ongoing in D.C with the new Administration, this action is extraordinary and inconsistent with typical federal government practices, except in the case of an emergency or other exigent circumstances. The final decision will appear in the Federal Register soon.
The Trump Administration signaled its plans to renegotiate the 1994 North American Free Trade Agreement (NAFTA) by issuing the Summary of Objectives for the NAFTA Renegotiation this month. President Trump committed to renegotiate NAFTA in order to obtain more open, equitable, secure, and reciprocal market access with our two largest export markets in Canada and Mexico.
Environmental considerations currently are managed in a side agreement to NAFTA, but one of the Administration’s priorities is to incorporate environmental provisions into the new NAFTA. The Summary outlines 13 environmental issues to be addressed as part of the renegotiation process:
- Bring the environmental provisions into the core of the agreement, rather than in a side agreement.
- Establish strong and enforceable environmental obligations that are subject to the same dispute settlement mechanism that applies to other enforceable obligations of the agreement.
- Establish rules that will ensure that NAFTA countries do not waive or derogate from the protections afforded in their environmental laws for the purpose of encouraging trade or investment.
- Establish rules that will ensure that NAFTA countries do not fail to effectively enforce their environmental laws through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the parties.
- Require NAFTA countries to adopt and maintain measures implementing their obligations under select Multilateral Environmental Agreements (MEAs) to which the NAFTA countries are full parties, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora.
- Establish a means for stakeholder participation, including commitments for public advisory committees, and a process for the public to raise concerns directly with its government if they believe it is not meeting its environmental commitments.
- Require NAFTA countries to ensure access to fair, equitable, and transparent administrative and judicial proceedings for enforcing their environmental laws, and provide appropriate sanctions or remedies for violations of their environmental laws.
- Provide for a framework for conducting, reviewing, and evaluating cooperative activities that support implementation of the environmental commitments, and for public participation in these activities.
- Establish or maintain a senior-level Environmental Committee, which will meet regularly to oversee implementation of environmental commitments, with opportunities for public participation in the process.
- Combat illegal, unreported, and unregulated (IUU) fishing, including by implementing port state measures and supporting increased monitoring and surveillance.
- Establish rules to prohibit harmful fisheries subsidies, such as those that contribute to overfishing and IUU fishing, and pursue transparency in fisheries subsidies programs.
- Promote sustainable fisheries management and long-term conservation of marine species, including sharks, sea turtles, seabirds, and marine mammals.
- Protect and conserve flora and fauna and ecosystems, including through actions by countries to combat wildlife and timber tracking.
Critics note that the above environmental considerations look much like the provisions in the now defunct Trans-Pacific Partnership that many environmental advocates opposed.
The first round of talks on the possible renegotiation of NAFTA is scheduled to take place in Washington August 16-20. The Summary confirms that “…the new NAFTA will be modernized to reflect 21st century standards and will reflect a fairer deal, addressing America’s persistent trade imbalances in North America.” While part of the agenda, it does not appear that environmental considerations will be a critical portion of these upcoming negotiations.
New Climate Change Lawsuit: Publicity Stunt or Reasonable Effort to Protect California Property Owners?
Answering this question is likely to engender significant debate, depending on which side of the global warming conundrum one finds oneself. However, a recent lawsuit by two California counties and one California city is likely to prompt such a debate which will play out in California state court. On July 17, 2017, Marin County, San Mateo County, and the City of Imperial Beach filed separate but similar environmental lawsuits in California state court claiming that 37 oil, gas, and coal companies caused (or will cause) billions of dollars in climate-change related damages as a result of their extraction and sale of fossil fuels in California. The multi-count complaints allege a variety of state common law claims, including public nuisance, negligent failure to warn, and trespass. The complaints contend that as result of the activities of these defendants, sea levels will rise which will cause billions of dollars in losses to each of the plaintiffs.
These cases represent the latest in what has been to date a series of unsuccessful efforts to hold energy companies responsible for future speculative damages associated with alleged future environmental impacts associated with climate change. These cases will likely be subject to early dispositive motions seeking to have these cases thrown out of court at an early stage. We will continue to follow these cases and provide additional updates.
New research confirms that the quality of environmental, social and corporate governance (ESG) disclosures is greatly improved when companies use the Global Reporting Initiative (GRI) Sustainability Reporting Framework. The Governance & Accountability Institute, Inc. (G&A), the data partner for GRI, also confirms that more companies than ever before are developing and disclosing sustainability reports.
In the first year of its study in 2010, G&A found that 80% of leading U.S. large-cap companies did not publish sustainability reports. The trend has changed over time with 53% of the S&P 500 companies reporting in 2012; 72% reporting in 2013; 75% reporting in 2014; 81% reporting in 2015; and 82% reporting in 2016.
To explore the quality of sustainability reports, G&A worked with The CSR-Sustainability Monitor (CSR-S Monitor) research team at the Weissman Center for International Business, Baruch College/CUNY. The CSR-S Monitor evaluated sustainability reports using a scoring methodology that categorizes the content of each report into 11 components referred to as “contextual elements” including: Chair/Executive Message; Environment; Philanthropy & Community Involvement; External Stakeholder Engagement; Supply Chain; Labor Relations; Governance; Anti-Corruption; Human Rights; Codes of Conduct; and Integrity Assurance. Companies using the GRI framework consistently achieved average contextual element scores higher than the companies not using the GRI for their reporting meaning, in part, that the data provided was of a higher quality and overall more helpful to stakeholders.
Sustainability reporting and ESG disclosures are on the rise. The trend clearly is to encourage and promote more standardized sustainability reporting helping companies provide more reliable, consistent and material information to the public.
The Governments of Canada and the United States recently released the State of the Great Lakes 2017 Highlights Report. Overall, the Report characterizes the condition of the Great Lakes as Fair and Unchanging. While progress to restore and protect the Great Lakes has been made, including the reduction of toxic chemicals, challenges remain with issues such as invasive species and nutrients.
The “Fair and Unchanging” assessment is based upon an evaluation of nine Great Lakes Indicators of Ecosystem Health including:
- Drinking Water
- Fish Consumption
- Toxic Chemicals
- Habitats and Species
- Nutrients and Algae
- Invasive Species
- Groundwater Quality
- Watershed Impacts and Climate Trends
Of particular note, the Report found that the status of protecting the Great Lakes against invasive species was Poor and the trend was that conditions would further deteriorate. To date, over 180 aquatic non-native species have become established in the Great Lakes Basin including the Sea Lamprey, Zebra Mussels, and Purple Loosestrife. Economic impacts from invasive species exceed more than $100 million annually in the U.S. alone.
The Report marks the 45th anniversary of the signing of the Great Lakes Quality Agreement committing Canada and the United States to work together to restore and protect the water quality and aquatic ecosystem health of the Great Lakes. The nine indicators of ecosystem health are supported by 44 sub-indicators, measuring such things as concentrations of contaminants in water and fish tissue, changes in quality and abundance of wetland habitat, and the introduction and spread of invasive species. More than 180 government and non-government Great Lakes scientists and other experts worked to assemble the available data supporting the Report and its findings. The Report identifies status for each indicator as good, fair, poor, or undetermined.
D.C. Circuit Provides Additional Clarity on Federal and State Roles in Natural Gas Pipeline Permitting
On Friday, June 23, 2017, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision in a long-running dispute between the developer of an interstate natural gas pipeline project and New York State environmental regulators concerning a federal water quality permit that must be obtained before project construction may begin. Millennium Pipeline Company v. Basil Seggos, et al., D.C. Cir. No. 16-1415 (June 23, 2017). The decision provides additional clarity regarding the interplay of Federal and State permitting authorities with respect to interstate natural gas pipeline infrastructure, and the role of the courts in adjudicating disputes with State permitting agencies.
The pipeline project at issue is a proposed 7.8 mile extension of Millennium Pipeline’s existing interstate natural gas pipeline in southern New York. The extension will serve a new natural gas-fired power plant. To construct the project, Millennium must obtain a “certificate of public convenience and necessity” from the Federal Energy Regulatory Commission (“FERC”) pursuant to Section 7 of the Natural Gas Act (“NGA”), 15 U.S.C. § 717f(c). The NGA requires that FERC ensure that all proposed interstate natural gas pipeline projects comply with all applicable federal, state, and local regulations, including environmental regulations. 15 U.S.C. § 717b(d). FERC granted Millennium a certificate of public convenience and necessity, conditioned on Millennium obtaining a Clean Water Act (“CWA”) water-quality certificate pursuant to section 401 of the CWA, 33 U.S.C. § 1341(a)(1), since its project would cross several streams.
On June 27, 2017, EPA Administrator Scott Pruitt announced that EPA and the Army Corps of Engineers will be publishing a proposed rule (the Recodification Rule) that would rescind the Obama Administration’s definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA). EPA states that the Recodification Rule is necessary to “ensure certainty as to the scope of CWA jurisdiction on an interim basis” while EPA and the Army Corps of Engineers conduct “a substantive review of the appropriate scope of ‘waters of the United States’”.
As we previously reported on this blog, the WOTUS Rule (a/k/a the Clean Water Rule) was promulgated by the Obama Administration in 2015, and was the latest attempt to define the jurisdictional limits of the CWA. The CWA limits its jurisdiction to “navigable waters”, which are obliquely defined in the CWA as “the waters of the United States, including the territorial seas.” 33 U.S.C. § 1361(7). The precise definition of “waters of the United States” has been a controversial and well-litigated issue for years.
Federal Judge Orders Dakota Access Pipeline to Revise Environmental Analysis; Leaves Status of Pipeline Construction Undecided
On June 14, 2017, U.S. District Judge James Boasberg, of the U.S. District Court for the District of Columbia, issued an opinion in the case of Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, 16-cv-01534, finding that the U.S. Army Corps of Engineers (the Corps) did not fully comply with the National Environmental Policy Act (NEPA) when it granted easements to the Dakota Access Pipeline (DAPL) to cross Lake Oahe, a federally regulated water. Plaintiffs in the case, The Standing Rock Sioux Tribe and the Cheyenne River Sioux Tribe, both have Reservations that border Lake Oahe. Indeed, when Lake Oahe was created by the Corps in 1958 via a dam constructed on the Missouri River, the lake covered approximately 56,000 acres of the Standing Rock Reservation and 104,420 acres of the Cheyenne River Tribe’s trust lands.
The proposed DAPL will be nearly 1,200 miles long and will move more than half a million gallons of crude oil from North Dakota to Illinois every day (at a rate of 13,100 to 16,600 gallons per minute). DAPL will cross Lake Oahe 0.55 miles north of the Standing Rock Reservation and 73 miles north of the Cheyenne River Reservation. Both Tribes use Lake Oahe for drinking water, agriculture and industrial activities, and consider the waters to be “sacred”.
EPA recently extended the effective date of the final reporting and recordkeeping requirements for certain chemical substances when they are manufactured or processed at the nanoscale. EPA has delayed the effective date of the January 12, 2017 final rule from May 12, 2017 to August 14, 2017.
Industry sought to repeal the rule, or at a minimum, obtain an extension of the effective until EPA adopts guidance explaining how to comply with the new two-fold requirements including: 1) companies that make, import or process a distinct or “discrete” form of a nanoscale chemical at some time in the future are to provide information to EPA (135 days before they make, import or process the chemical or within 30 days of deciding to manufacture or process the chemical); and 2) companies must comply with a one-time obligation to report information known or reasonably attainable regarding any nanoscale chemicals made or processed at any time during the past three years. Based upon the information EPA receives, the Agency could decide to require new toxicity, exposure or other data or it could decide to impose restrictions on commercial activity.
Nanomaterials—a diverse category of materials defined mainly by their small size—often exhibit unique properties that can allow for novel applications but also have the potential to negatively impact human health and the environment. Some nanomaterials: more easily penetrate biological barriers than do their bulk counterparts; exhibit toxic effects on the nervous, cardiovascular, pulmonary and reproductive systems; or have antibacterial properties that may negatively impact ecosystems.
Regulation of nanomaterial has created conflict between industry and environmental groups. The Nanomanufacturing Association suggests the rule is a de facto permitting program, while environmental groups believe the rule is long overdue and its impacts are limited by the authorities and procedures already existing under the Toxic Substances and Control Act (TSCA), the federal statute authorizing the new rule. Nanomaterials are used in a variety of commercial and industrial applications including paints, coatings, resins and a host of consumer products ranging from washing machine parts to lithium ion batteries.
A number of scientific organizations have called for the need for the kinds of information on nanomaterials EPA will now be able to collect including the National Academy of Science and the National Nanotechnology Initiative. At this time, it is unclear if the EPA draft guidance will be finalized before the effective date of the new rule.
Exelon and Jenner & Block partnered today with the Alliance for the Great Lakes to cleanup 12th Street Beach, near the Adler Planetarium. Team members worked together to police the beach front picking up and disposing of waste and other discarded materials. The litter was identified, logged, recorded and weighed to aid in understanding the short term and long term impacts we are having on the Great Lakes and the many ecosystems that rely upon them.
The Alliance for the Great Lakes Adopt-a-Beach program promotes working together to protect the Great Lakes through beach cleanups and other community projects. For more than 25 years the Adopt-a-Beach program has worked to keep Great Lakes shorelines healthy, safe, and beautiful. The program is largest of its kind in the region. Adopt-a-Beach touches all five Great Lakes with volunteers from all eight Great Lakes states.
Thanks to our friends at Exelon for including us in this special environmental outreach!
Today we celebrate World Environment Day—a global celebration of nature and a day to reconnect with the places that matter most to you. Initiated in 1972, World Environment Day is the United Nations' most important day for promoting worldwide awareness and action for protection of the environment. Since it began in 1974, it has grown to become an international platform for public outreach that is widely celebrated in over 100 countries.
This year's host country is Canada where the official celebrations will take place and the 2017 theme is connecting people to nature encouraging all of us to get outdoors and into nature.
There is greater international awareness and attention focused on the protection and preservation of the environment than ever before. Everyone understands the critical environmental concerns ranging from the politics of the Paris Climate Agreement, the adverse impacts of plastic waste in our oceans, to the international focus on water quality and quantity. World Environment Day is a time to reflect upon and appreciate that the welfare of the planet, including the economic viability of its many nations, depends on the collective efforts we make to protect, preserve and conserve our natural resources and the environment.
Learn more about World Environment Day and efforts around the world to celebrate and improve the environment.