U.S. EPA Issues Final Regulations Governing Cooling Water Use At Power Plants And Industrial Facilities
By: Steven M. Siros
On May 19, 2014, U.S. EPA promulgated final regulations that established requirements for cooling water intakes at existing power plants and industrial facilities. After almost 20 years of attempting to adopt rules under Section 316(b) of the Clean Water Act, U.S. EPA's new regulations, which apply to existing facilities that withdraw more than 2 million gallons of water per day from waters of the United States and use at least 25% of that water for cooling purposes, require affected facilities to implement one of seven options intended to minimize potential adverse environmental impacts (primarily impingement and entrainment). The facilities are not allowed, on their own initiative, to select one of these seven options. Instead, the permitting authority (U.S. EPA or the state) will evaluate specific information provided by the regulated facility and then select the appropriate technology from the seven options. It is important to note that the regulators must consider whether the benefits justify the costs and it might be the case that no controls are necessary if the costs are not justified by the benefits.
The rule (which is 559 pages and accompanied by a 339-page biological opinion from U.S. Fish and Wildlife Service), is the culmination of litigation by several environmental groups and six states that challenged final regulations setting national performance standards in 2004. After several years of litigation, U.S. EPA entered into a settlement agreement pursuant to which it agreed to promulgate final regulations in 2014. Early indications are that industry is generally satisfied with the final rule; environmental groups, however, including the Natural Resources Defense Council have already announced their intention to file a court challenge to the rule. One can only wonder whether it will be another decade before these regulations are truly finalized.
As part of the "Environmental & Energy Cert. Petition Watch" project, in the past several weeks, the following EHS-related petitions have been filed, denied, or granted. For a full list of EHS-related cert. petitions submitted from August 2013 through the present (as of May 25, 2014), click here.
Lower Court: 9th Cir.
Subject: Clean Water Act
Question(s) Presented: (1.) Does Calderon v. Thompson, 523 U.S. 538 (1998) bar a circuit court from reconsidering an issue after the time in which to seek rehearing in the circuit court and certiorari in this Court has passed, and where this Court relied on the finality of the circuit court decision in exercising its jurisdiction? (2.) Can a multi-jurisdiction municipal storm-water permit issued under the Clean Water Act be construed to impose liability on a co-permittee without evidence that the co-permittee discharged pollutants in violation of the permit, where federal regulations provide that each co-permittee is only responsible for its own discharges and where the monitoring specified in the permit measures pollutants discharged by multiple upstream sources without any means to measure the contribution of any individual co-permittee?
Lower Court: 8th Cir.
Subject: Clean Air Act
Question(s) Presented: Whether the Eighth Circuit applied the incorrect standard of review and erred in upholding EPA's assertion of authority to overrule the reasonable policy and technical decisions made by the State of North Dakota in its Visibility Program state implementation plan, contrary to the authority delegated to the State under the Clean Air Act, 42 U.S.C. §§ 7401 et seq., and in conflict with decisions of this Court and other federal courts of appeals establishing the division of federal-state jurisdiction under the Act.
Lower Court: 10th Cir.
Subject: Clean Air Act
Question(s) Presented: The Regional Haze Program of the Clean Air Act allocates to the States the task of fashioning and then implementing plans to improve the aesthetic quality of air over certain federal lands. The question presented is whether, despite that allocation of powers to the States, the United States Environmental Protection Agency may nonetheless conduct a de novo review of the State of Oklahoma's plan, in conflict with both the limited authority granted to the agency under the Act and decisions of this and other courts that have recognized the primary role given to the States in implementing the Clean Air Act.
On May 14, Kansas Governor Sam Brownback signed a bill directing the State Secretary of Labor to study and make recommendations by January 2015 regarding whether the State should assume responsibility for regulating workplace safety and health. The move is widely seen as the first step toward the State supplanting the authority of the Federal Occupational Safety and Health Administration (OSHA) to regulate occupational safety and health. Section 18 of the Occupational Safety and Health Act of 1970 allows states and territories to develop and enforce safety and health standards provided the state program is at least as effective as the federal program. Currently 25 states and two territories operate state plans. OSHA is responsible for establishing and enforcing workplace safety and health standards in the remaining states and Washington, D.C.
The bill tasks the Secretary with identifying the agreements necessary to implement a state plan, reviewing methods to finance a state plan, determining what personnel and statutory and regulatory changes are necessary to implement a state plan, and identifying the interactions with the federal government necessary to transfer authority for regulation from the Federal Occupational Safety and Health Administration to the State.
Proponents of state control point to opportunities for a more productive, cooperative relationship between business and a regulatory agency more in touch with local needs. Critics cite additional costs to the State and concerns about weaker enforcement. Whether Kansas ultimately moves forward with a state plan remains to be seen. If it chooses to do so, it will be the first state seeking initial approval of a full state plan in nearly 40 years . . . and the first in the 21st century.
The bill can be found here.
U.S. EPA recently announced that it is in the process of developing new electronic tools to utilize the data collected by its Toxics Release Inventory (TRI) to better focus its enforcement efforts. According to Steven Knizner, acting director of U.S. EPA's TRI Program Division, U.S. EPA's TRI program "is not just about releases but what is being done to prevent releases." U.S. EPA's TRI program covers more than 650 chemicals and requires that chemical manufacturers report releases of listed chemicals into the environment (including permitted releases).
These new electronic tools are intended to assist U.S. EPA in evaluating reported TRI data and identify reporting violations and/or allow US. EPA to prioritize its enforcement activities in particular regions or industries. We will continue to report on U.S. EPA's efforts with respect to its TRI program and these new electronic tools.
As we previously reported, several Jenner & Block EHS lawyers authored chapters in the Illinois Institute for Continuing Legal Education's (IICLE) publication titled Environmental Law in Illinois Corporate and Real Estate Transactions 2014 Edition. The electronic (PDF) versions of these chapters are now available online:
- Chapter 3, Environmental Considerations in Corporate and Real Estate Transactions, E. Lynn Grayson, Jenner & Block LLP, Chicago;
- Chapter 4, Lender Liability Under Environmental Laws for Real Estate and Corporate Transactions, Gabrielle Sigel and Alexander J. Bandza, Jenner & Block LLP, Chicago;
- Chapter 5, Illinois Environmental Forums, Steven M. Siros and Seth J. Schriftman, Jenner & Block LLP, Chicago; and
- Chapter 10, Treatment of Environmental Obligations in Bankruptcy, Christine L. Childers, First American Bank, Elk Grove Village, and Keri L. Holleb Hotaling, Jenner & Block, Chicago.
The entire publication is available from IICLE here.
Carbon Disclosure Project Report Provides Real Examples that Illustrate the Expensive Impact of Climate Change on Major Corporations
The Carbon Disclosure Project (CDP) released a report last Friday that updates its survey on how S&P 500 companies assess physical risks from climate change. Reported risks affect companies in all economic sectors and include damage to facilities, reduced product demand, lost productivity and necessitated write-offs, often with price tags reaching millions of dollars.
The CDP report is an interesting read because it spans many sectors and provides real examples that illustrate the variety of impacts that climate change has on major corporations, along with their associated cost. Notable examples include:
- Consolidated Edison, Inc. disclosed that its costs related to Superstorm Sandy exceeded $431 million;
- Dr. Pepper Snapple Group, Inc. estimated that weather, climate-change, and water-availability uncertainties placed $2.5 billion of its sales at risk;
- HP noted a 7% revenue decline following the 2011 floods in Thailand;
- Sempra Energy disclosed that, due to wildfires in San Diego, its financial exposure from claims and settlements has exceeded its $1.1 billion of liability insurance coverage;
- Starwood Hotels & Resorts Worldwide, Inc. noted that an increased demand for air conditioning at its properties in non-OECD countries, where generators are often needed because local energy grids cannot reliably handle the demand, could cause a $20 million increase in annual cooling costs alone; and
- Union Pacific reported an 11% decline in corn shipments affecting its freight revenue as a result of droughts in 2012.
The report can be found here here.
This report, Gaining Ground - Corporate Progress on the Ceres Roadmap for Sustainability (report), evaluates how well 613 of the largest, publicly traded U.S. companies are integrating sustainability into their business systems and decision-making. The report – a collaboration between Ceres and Sustainalytics – assesses corporate progress across the four strategic areas first outlined in 2010 in the Ceres Roadmap for Sustainability: Governance, Stakeholder Engagement, Disclosure and Performance.
Ceres and Sustainalytics last evaluated these companies in the 2012 report, The Road to 2010, where companies were placed into one of four performance "tiers." Two years later, the Gaining Ground report reveals that while there is progress being made by an increasing number of companies and sectors, Ceres believes it is still not seeing the speed of change that is required – or the scale of innovation that is possible. Incremental progress in tackling global climate change and other sustainability threats is simply not enough.
Key findings in this recent report include:
- Boards of Directors are not taking enough responsibility for overseeing sustainability efforts.
- A growing number of companies are incorporating sustainability performance into executive compensation packages.
- Companies are increasingly engaging investors on sustainability issues.
- Stakeholders are not consistently involved in the sustainability planning process.
- More companies are actively engaging employees on sustainability issues.
- While many companies are taking action to reduce GHG emissions, few have set time-bound targets.
- Companies are not doing enough to address water risks, especially in stressed regions.
- Additional innovation is needed to drive sustainable products and services.
- More companies are setting clear sustainability standards for suppliers.
This report evaluates the sustainability performance of 613 U.S. companies, which represent nearly 80 percent of the total market capitalization of all public companies in the country. This report evaluates how well 613 of the largest publicly traded companies in the U.S. are meeting the expectations outlined in the Ceres Roadmap. It is intended to allow companies to assess their performance against their peers and to see what businesses are doing across economic sectors.
According to Ceres, the information here is critical for investors because it reveals how well prepared, or in many cases, how poorly prepared, individual companies are to thrive in an economy being profoundly shaped by sustainability risks and opportunities.
The report is available at www.ceres.org/gainingground.
By: Steven M. Siros
In what constitutes the largest penalty for violations of the Toxic Substances Control Act ("TSCA") at a single site, a titanium product manufacturer agreed to pay $13.75 million to settle the Government's claims relating to the improper disposal of PCBs at a site in Henderson, Nevada. According to the allegations in the Government's complaint and accompanying consent decree, Titanium Metals Corporation is alleged to have improperly manufactured and then disposed of PCBs at its titanium manufacturing facility in violation of the TSCA regulations. In addition to agreeing to pay $13.75 million, Titanium Metals also agreed to complete the investigation and remediation of the improperly disposed PCBs. The estimated cost for this investigation and remediation is $7 million.
By: E. Lynn Grayson
The District of Columbia (DC) is one of the greenest areas with a number of requirements in place for energy conservation and greener new construction. A new report shows that DC is considering even more aggressive green initiatives than those already on the books. According to new research from the report, it is clear that if an owner has sufficient tax appetite, tax credits and renewable energy credits, the return on green investment is approximately 30%, whereas the return on investment for energy efficiency alone was in the range of 5-12%.
To advance the industry into the next era of green design, DC's Department of the Environment sought to understand the costs and benefits associated with net zero energy, net zero water and Living Buildings. The purpose of the Net Zero and Living Building Challenge Financial Study: A Cost Comparison Report for Buildings in the District of Columbia report was twofold. First, to investigate costs, benefits and approaches necessary to improve building performance in the District of Columbia from LEED Platinum to zero energy, zero water and Living Building status. Second, to advise District government on policy drivers related to deep green buildings and to analyze the opportunities for the District to offer incentives to advance most rapidly toward zero energy, zero water and Living Buildings.
The report concludes a new policy framework is required if the building industry is to embrace net zero and Living Buildings at scale. To accelerate adoption, this research suggests DC develop a comprehensive roadmap that addresses all of the following issues over time and illustrates a clear pathway to DC's aggressive 2032 goals. The roadmap should consider these key recommendations from the study:
- Define net zero.
- Consider community-level approaches.
- Encourage transition to outcome-based energy codes.
- Establish new and modify existing financial incentives to encourage deep savings.
- Address limitations of the grid and acknowledge the changing role of utilities.
DC is considering policy and incentive options to go beyond existing mandates for energy conservation and new construction. While the construction premium is high, it appears the economic return may be even greater.
The study is available at http://newbuildings.org/sites/default/files/ZNECostComparisonBuildingsDC.pdf.
By: Gabrielle Sigel
On May 6, 2014, the U.S. Global Change Research Program released the Third U.S. National Climate Assessment, titled "Climate Change Impacts in the United States" ("the Assessment"). The Assessment was three years in the making and was based on the work of more than 300 experts from academia, government, business, and NGOs.
The 800-plus page Assessment contains twelve overall findings, which are incorporated into six chapters on various environmental or societal sectors, such as urban systems and Indigenous Peoples. The Assessment also evaluates climate change impacts by region of the country, including a discussion of effects on the coasts of ocean and internal waterways. The twelve key findings are:
- Global climate is changing and this is apparent across a wide range of observations.
- Some extreme weather and climate events have increased in recent decades, and new and stronger evidence confirms that some of these increases are related to human activities.
- Human-induced climate change is projected to continue, and it will accelerate significantly if emissions of heat-trapping gases continue to increase.
- Impacts related to climate change are already evident in many sectors and are expected to become increasingly disruptive across the nation throughout this century and beyond.
- Climate change threatens human health and well-being in many ways.
- Infrastructure is being damaged by sea level rise, heavy downpours, and extreme heat; damages are projected to increase with continued climate change.
- Water quality and water supply reliability are jeopardized by climate change in a variety of ways that affect ecosystems and livelihoods.
- Climate disruptions to agriculture have been increasing and are projected to become more severe over this century.
- Climate change poses particular threats to Indigenous Peoples' health, well-being, and ways of life.
- Ecosystems and the benefits they provide to society are being affected by climate change. The capacity of ecosystems to buffer the impacts of extreme events like fires, floods, and severe storms is being overwhelmed.
- Ocean waters are becoming warmer and more acidic, broadly affecting ocean circulation, chemistry, ecosystems, and marine life.
- Planning for adaptation…and mitigation…is becoming more widespread, but current implementation efforts are insufficient to avoid increasingly negative social, environmental, and economic consequences.
Key response steps recommended by the Assessment include adaptation, mitigation, additional research, and decision-making integrating adaptation and mitigation measures. This Assessment also recommends a "sustained assessment process," rather than developing reports periodically, as has happened in the past.
After detailing the significant negative impacts of climate change throughout the country, the Assessment's companion "Highlights" report concludes more optimistically that "the amount of future climate change and its consequences will still largely be determined by our choices, now and in the near future. There is still time to act to limit the amount of climate change and the extent of damaging impacts we will face."
The Assessment was prepared under the oversight of the National Climate Assessment and Development Advisory Committee, which was established at the end of 2010 by the U.S. Department of Commerce. A National Climate Assessment must be conducted every four years pursuant to the 1990 Global Change Research Act, which has resulted in prior assessment reports being released in 2000 and 2009.
As part of the “Environmental & Energy Cert. Petition Watch” project, in the past week, the following EHS-related petitions have been filed, denied, or granted. For a full list of EHS-related cert. petitions submitted from August 2013 through the present (as of Apr. 20, 2014), click here.
Lower Court: 9th Cir.
Subject(s): Administrative Procedure Act; National Environmental Policy Act
Question(s) Presented: (1.) Whether federal courts lack jurisdiction under the Administrative Procedure Act to review an agency action that is arbitrary and capricious or an abuse of discretion when the statute authorizing the action does not impose specific requirements governing the exercise of discretion. (2.) Whether federal agencies can evade review of their actions under the National Environmental Policy Act by designating their actions as "conservation efforts", when the record shows that the action will cause significant adverse environmental effects. (3.) Whether an agency commits prejudicial error when it makes materially false statements in an environmental impact statement, and then asserts that it would have made the same decision even if the false statements had been corrected.
Lower Court: D.C. Cir.
Subject: Clean Air Act
Question(s) Presented: (1.) Whether the lower court's refusal to require EPA to justify the revised 2008 NAAQS as being "not lower or higher than is necessary" can stand in light of that decision's conflict with Whitman. (2.) Whether the lower court's agreement with EPA that the 1997 findings were irrelevant to the 2008 revision can stand in light of EPA's obligation under this Court's decision in FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009), to justify changed findings that underlie changed regulation.
Lower Court: 2d. Cir.
Subject: Clean Air Act
Question(s) Presented: (1.) Whether a claim is ripe when it is predicated on a plaintiffs potential future injury and mere good faith intent to take steps in 15 to 20 years that could, depending on a chain of uncertain events, cause the plaintiff to suffer an actual injury some day in the future. (2.) Whether the federal oxygenate mandate in the Clean Air Act Amendments of 1990, 42 U.S.C. § 7545 (2000), preempts a state-law tort award that imposes retroactive liability on a manufacturer for using the safest, feasible means available at the time for complying with that mandate.
Lower Court: 5th Cir.
Subject: Federal Power Act
Question(s) Presented: Whether the Federal Power Act preempts Petitioners' property damage tort and takings claims caused by the operation of the licensee of a FERC-licensed dam project, where the provisions of the FPA have explicitly saved and reserved such claims to the property owners.