Regulation

Report on Carbon Capture and Storage from the House

February 20, 2014 22:37
by J. Wylie Donald

Would an 80% premium steer you away from an energy source that was low-carbon, naturally abundant in the United States, not subject to the vicissitudes of weather, incapable of nuclear meltdown and accompanied by a well-established infrastructure?  Suppose the premium was only 40%?

Hearings last week before the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigation explored that topic in connection with the development of carbon capture and storage technology. In prepared remarks Dr. Julio Friedmann, Deputy Assistant Secretary for Clean Coal with the Department of Energy, delivered an update on the status of CCS.

Coal fuels approximately 40% of the nation's energy needs.  "Because it is abundant, the clean and efficient use of coal is a key part of President Obama's all-of-the-above energy strategy."  A central component of the President's program is the Clean Coal Research Program, which " is designed to enhance [the nation's] energy security and reduce environmental concerns over the future use of coal by developing a portfolio of cutting-edge clean coal technologies."  To accomplish this the Department of Energy is focusing on research to capture carbon dioxide directly from the fuel stream (pre-combustion), from the stack gas (post-combustion) and from combustion in nearly pure oxygen (oxy-combustion, which yields nearly pure CO2 and water, which are easily separated). 

Dr. Friedmann went on to discuss the Regional Carbon Sequestration Partnerships, which are investigating the viability of CCS projects in a variety of circumstances.  "Together, the Partnerships form a network of capability, knowledge, and infrastructure that will help enable geologic storage technology to play a role in the clean energy economy. They represent regions encompassing 97 percent of coal-fired CO2 emissions, 97 percent of industrial CO2 emissions, 96 percent of the total land mass, and essentially all the geologic storage sites that can potentially be available for geologic carbon storage.”

Last, Dr. Friedmann addressed the commercialization of CCS.  This has two components:  the operation of CCS facilities, and the utilization of the captured CO2.  The idea behind utilization in activities such as enhanced oil recovery and algae production is to "provide a technology bridge" which can smooth the  " transition to the deployment of the large-scale, stand-alone geologic sequestration operations that will ultimately be needed to achieve the much larger emissions reductions required ..."  As for those operations, Dr. Friedmann acknowledged dozens of projects, including 5 he listed by name, where CCS is being tested in commercial environments.

But the real interest of the committee, at least as reported in the trade press, was in cost. As reported  in Power and Power Engineering International,  Dr. Friedman  advised that implementing CCS "looks something like a 70% or 80% increase on the wholesale price of electricity."  Second generation technologies could cut that in half. But half is still a 40% increase.

Some might pull the plug on CCS right now.  If it is going to raise the price by 40%, that is simply too much.  To our mind, however, that is antediluvian thinking.  Regulation of carbon dioxide emissions is already happening. Climate change is not taking a wait-and-see approach. Inexorably the earth warms, the oceans rise, the world of yesterday is not the world of tomorrow. CCS has a place at the energy banquet. 

Further, before turning off CCS, it is useful to consider the costs of the alternatives.  The Energy Information Administration has calculated the "levelized" cost of various energy sources. "Levelized cost is often cited as a convenient summary measure of the overall competiveness of different generating technologies. It represents the per-kilowatthour cost (in real dollars) of building and operating a generating plant over an assumed financial life and duty cycle."  Two things relevant here come out of the EIA table.  First, among dispatchable power (i.e., power that can respond when it is needed), with or without CCS, the most cost-effective power source is natural gas.  Second, when non-dispatchable power is included, even with CCS, coal is more cost-effective than offshore wind and both photovoltaic and thermal solar. 

In other words, if the issue is solely cost, coal loses to natural gas and the effect of CCS does not change the outcome.  If the issues are non-cost values, then coal with CCS comes to the table with green credentials, high power density, dispatchable output, good jobs, national security bona fides, and installed infrastructure, many of which coal's renewable competition cannot match. 

Carbon Dioxide | Regulation | Utilities

Wind Project "Take" Permits Extended to 30 Years - Eagles Nonplussed

January 7, 2014 10:52
by J. Wylie Donald

Tomorrow bald and golden eagles will sleep less soundly.  On January 8 the Fish and Wildlife Service’s new rule revising the regulations for permits for the taking of golden eagles and bald eagles goes into effect.  According to the FWS, “This change will facilitate the responsible development of renewable energy and other projects designed to operate for decades, while continuing to protect eagles consistent with our statutory mandates.”

Eagles and other migratory birds are a substantial threat to wind projects and not because they will cause turbine blades to fail.  Rather, turbine blades (and to a lesser extent, towers, guy wires, transmission lines and other constructions in the air space) can be lethal to birds.  This poses a serious problem for wind energy companies as birds are legally protected by the Migratory Bird Treaty Act (16 U.S.C. §§ 703-712) and eagles further protected by the Bald and Golden Eagle Protection Act (16 USC §§ 668-668d)

Duke Energy Renewables, Inc. recently ran afoul of these requirements at its 176 turbine Campbell Hill and Top of the World wind projects in Wyoming, where at least 14 golden eagles died between 2009 and 2013.   In November Duke accepted a plea agreement in “the first ever criminal enforcement of the Migratory Bird Treaty Act for unpermitted avian takings at wind projects.”  It included:

• Fines - $400,000 
• Restitution - $100,000 to the State of Wyoming
• Community Service - $160,000 payment to the National Fish and Wildlife Foundation for eagle preservation projects
• Conservation funding - $340,000 to a conservation fund for the purchase of land or conservation easements
• Probation – five years
• Compliance Plan – implementation of a plan at a cost of $600,000 per year with “specific measures to avoid and minimize golden eagle and other avian wildlife mortalities at company’s four commercial wind projects in Wyoming.”
• Permit – required application for a Programmatic Eagle Take Permit.

The last is directly tied to tomorrow’s rule.  “Take” is defined in the regulations as “pursue, shoot, shoot at, poison, wound, kill, capture, trap, collect, destroy, molest, or disturb.” 50 CFR § 22.3.  “Programmatic take” is “take that is recurring, is not caused solely by indirect effects, and that occurs over the long term or in a location or locations that cannot be specifically identified.”  Id.  The regulations at 50 CFR § 22.26 provide for permits to take bald eagles and golden eagles when the taking is associated with, but not the purpose of, an otherwise lawful activity.  Programmatic permits authorize take that “is unavoidable even though advanced conservation practices are being implemented.”  The new rule commentary notes that permits may authorize “lethal take … such as mortalities caused by collisions with wind turbines, powerline electrocutions, and other potential sources of incidental take.”

Under the current rule, a take permit was good for only 5 years, which inserted much uncertainty into wind farm projects.  The new rule permits wind energy developers to obtain a take permit that runs for 30 years, 50 CFR § 22.26(i), which “better correspond[s] to the operational timeframe of renewable energy projects.”  The risk that a wind project will cause unforeseen harm to eagles during this much longer period is mitigated by a new requirement for 5 year reviews, in which the FWS “will determine if trigger points specified in the permit have been reached that would indicate that additional conservation measures ... should be implemented to potentially reduce eagle mortalities, or if additional mitigation measures are needed.”  Id. at § 22.26(h).  Additional actions that might be taken as the result of the review could be permit changes, including implementation of additional conservation measures and updating of monitoring requirements.  Id.  Even suspension or revocation of the permit is possible.  Id.

That the FWS is serious about protecting eagles is demonstrated by the enforcement action against Duke.  But the FWS also recognizes that development is necessary.  The 30 year permit period appears to be a reasonable compromise (unless one is an eagle).

Regulation | Wind Energy | Utilities

The Top 6 at 12: Highlights of the Top Climate Change Legal Stories in the Second Half of 2013

January 1, 2014 00:01
by J. Wylie Donald

2013 has drawn to a close; here is our take on the top six climate change legal stories in the last six months.
 
1.  Climate Change Assessments - Blockbuster legislation may have been evaded once more but that has not stopped those in the trenches. Assessments of climate change risk are becoming more routine. For example, the September 2013 Record of Decision for the Gowanus Canal Superfund Site required assessment of “periods of high rainfall, including future rainfall increases that may result from climate change” in implementing certain aspects of the cleanup remedy.  Another example was provided by the Department of Housing and Urban Development, which in November required in its second round of community block grants for disaster relief that prospective grantees consider in their Comprehensive Risk Analysis “a broad range of information and best available data, including forward-looking analyses of risks to infrastructure sectors from climate change and other hazards, such as the Northeast United States Regional Climate Trends and Scenarios from the U.S. National Climate Assessment, the Sea Level Rise Tool for Sandy Recovery, or comparable peer-reviewed information."  Even the Nuclear Regulatory Commission looked at climate change with regard to its September draft generic environmental impact statement for the long-term continued storage of spent nuclear fuel. 

2.  Low Carbon Fuel Standards - In Rocky Mountain Farmers Union v. Corey the Ninth Circuit reversed several district court rulings limiting under the “dormant Commerce clause” the California Air Resources Board’s Low Carbon Fuel Standard.  Although the Commerce clause of the Constitution, U.S. Const., art. I, § 8, cl. 3. “does not explicitly control the several states,” it "has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.’” Rocky Mountain at 31 (citation omitted). California’s Low Carbon Fuel Standard supported carbon dioxide emission reduction “by reducing the carbon intensity [i.e., the amount of carbon dioxide emitted per unit of energy produced] of transportation fuels that are burned in California.”  It thus potentially burdened producers of ethanol in the Midwest and petroleum producers outside California, but that did not matter.  Specifically, the court held that the LCFS was not facially impermissibly discriminatory in favor of ethanol, was not improperly extraterritorial and did not discriminate against petroleum fuels.  Accordingly, California is still on its path to a reduction in the carbon intensity of its fuels by 10% by 2020, as mandated by the 2006 Global Warming Solutions Act.

3.  The Cost of the Grid - On November 14, the Arizona Corporation Commission ruled that Arizona's net metering program should spread the cost of maintaining a reliable grid among all of Arizona Public Service's customers, including its rooftop solar customers. Up to that point rooftop solar customers were paid for the electricity they provided to the grid at retail rates, without any adjustment for the cost of the grid. The Commission concluded that this resulted in a "cost shift" from customers that were paying for the grid, to rooftop solar customers, who weren't.  APS put on a good case demonstrating that rooftop solar customers were substantially benefitting from the grid by drawing power at night, during cloudy weather and during the periods of daylight when solar power production did not exceed the customer's needs. Many have criticized solar power as unfairly subsidized. In Arizona at least, one of those subsidies is being addressed.

4.  New Carbon Dioxide Emission Standards - Following over 2.5 million comments, EPA rescinded its proposed rule governing carbon dioxide emissions from new coal-fired power plants.  In its place it proposed on September 20 a rule setting CO2 emission standards for new large natural gas power plants (1,000 lbs/MW-hr), new small natural gas power plants (1,100 lbs/MW-hr), and new coal-fired power plants (1,100 lbs/MW-hr).  From our perspective, the most significant facet of this new rule is that it actually will apply to plants that are being built.  The withdrawn proposed rule only applied to new coal plants, which EPA concluded would not be built anyway before 2030.  Equally significant, as pointed out in EPA’s news release  on the proposal, is that “EPA has initiated outreach to a wide variety of stakeholders that will help inform the development of emission guidelines for existing power plants.”

5.  The Fifth Assessment Report of the Intergovernmental Panel on Climate Change – The IPCC’s Working Group I issued The Physical Science Basis, its part of the Fifth Assessment Report.  Working Groups II and III will publish in 2014.  Among other things WG I concluded:  "Unequivocal evidence from in situ observations and ice core records shows that the atmospheric concentrations of important greenhouse gases such as carbon dioxide, methane, and nitrous oxides have increased over the last few centuries."  "The temperature measurements in the oceans show a continuing increase in the heat content of the oceans.  Analyses based on measurements of the Earth's radiative budget suggest a small positive energy imbalance that serves to increase the global heat content of the Earth system.  Observations from satellites and in situ measurements show a trend of significant reductions in the mass balance of most land ice masses and in Arctic sea ice. The ocean's uptake of carbon dioxide is having a significant effect on the chemistry of sea water."  But if one remains skeptical, this consensus view of the world’s leading climate scientists should not cause one alarm, the climate change skeptics have not thrown in the towel.  For example, according to one website, “climate science as proclaimed by the IPCC is a morass where what is scientific knowledge cannot be easily separated from speculation and what is wrong.”  One won't find seafarers plying the Northern Sea Route in the skeptic camp, however.  Russia logged a record year of transits in 2013 (over 200), up from just 4 in 2010. 

6.  Climate Change Liability Lawsuits - For the first time since 2005, when Comer v. Nationwide Mutual Insurance was filed, there is no climate change liability lawsuit on the docket anywhere. All have been defeated. Comer was the last to succumb, with its opportunity to file a petition for certiorari expiring on or about August 14.  The IPCC Fifth Assessment establishes climate change is not going away, but we will have to wait to see if anyone is going to attempt to make someone pay for it.

Carbon Dioxide | Climate Change | Regulation | Solar Energy | Utilities | Year in Review

EPA Excludes Carbon Dioxide Waste Streams from RCRA - A (Very Small) Step Forward for CCS

December 26, 2013 09:42
by J. Wylie Donald

The Congress may be dysfunctional but the administrative agencies are still moving the ball.  A case in point is last week’s Christmas present from EPA to the carbon capture and storage community.  On December 17 EPA issued its final rule, Hazardous Waste Management System: Conditional Exclusion for Carbon Dioxide (CO2) Streams in Geologic Sequestration Activities.  In so doing, EPA provided “regulatory clarity to help facilitate the implementation of [CCS] technology in a safe and responsible way.”

Carbon capture and storage is a technology with three distinct steps: 

1. “the capture and compression of the CO2 stream from fossil-fuel power plants or other industrial sources,”
2. ”[the transportation of] the CO2 stream (usually in pipelines as a supercritical fluid) to an on-site or off-site location,” and
3. “inject[ion] underground for purposes of sequestration.”

The new rule addressed the third element.  The rule had been foreshadowed by a 2010 recommendation from the government’s Interagency Task Force on Carbon Capture and Storage.  The Task Force, instituted by President Obama, “was charged with proposing a plan to overcome the barriers to the widespread, cost-effective deployment of CCS within ten years,” and in its report assessed the progress and impediments to developing carbon capture and storage as a viable technology to combat climate change.  Among other things, the Task Force recommended that EPA ““propose a Resource Conservation and Recovery Act (RCRA) applicability rule for CO2 that is captured from an emission source for purposes of sequestration.”  The goal was a final rule by 2011.  EPA was only two years late, which in the current climate should probably be considered timely.

Carbon dioxide is not a listed RCRA waste.  Nevertheless there was concern that substances derived from the source materials and the capture process could render the carbon dioxide stream a characteristic RCRA hazardous waste.  Accordingly, RCRA regulations potentially applied.  EPA concluded, however, that RCRA regulation was not necessary because the stream being injected already was being regulated by Department of Transportation requirements for pipeline operations and EPA permitting requirements for underground injection in UIC Class VI injection wells.  “[E]limination of exposure routes through these requirements, which are implemented through a [Safe Drinking Water Act] UIC permit, will ensure protection of human health and the environment such that RCRA subtitle C regulation would be duplicative and unnecessary.” “The UIC Class VI requirements are designed to ensure that the CO2 streams (which may include low concentrations of hazardous constituents) remain isolated in the injection zone and confined by confining zones in an appropriate, well-characterized geologic setting that is continuously monitored to ensure that the CO2 streams remain in the injection zone. “

Thus, advocates for CCS should be heartened that EPA has removed a potential impediment to deployment of CCS.  But the realities of CCS implementation may make all this for naught.  The Task Force report notes that ”the incremental costs of new coal-fired plants with CCS relative to new conventional coal-fired plants typically range from $60 to $95 per tonne of CO2 avoided.”  With no federal program limiting CO2 emissions, the incentive to incur such costs is vanishingly small.  EPA acknowledges this in its comments:  “based upon current market conditions and the existing regulatory framework (i.e., lack of Federal legislation), it appears unlikely that there would be any significant expansion in CCS management for CO2 over the next several years.”   Simply stated, lack of RCRA regulation is not going to be the trigger that unleashes  a wave of CCS projects.

Carbon Dioxide | Regulation

Battles over Stormwater: Maryland Counties Fight the 'Rain Tax'

November 7, 2013 23:22
by J. Wylie Donald

It's not secession like Colorado but three Maryland counties are staging their own Fort Sumter. This past Tuesday the Carroll County Council  received a notice from the State that the County did not appear to be meeting its obligations under the 2012 Stormwater Management – Watershed Protection and Restoration Program Act.  Penalties of $10,000 per day were threatened. Frederick and Harford Counties have received similar letters.  The County fathers (and mothers) have been nonplussed. As quoted in the Baltimore Sun, Frederick County Commissioner Billy Shrive responded:  "I've been dealing with bullies since I was in kindergarten, and I don't tolerate it."

Under the Act (Md. Env. 4-202.1) Baltimore City and the 9 Maryland counties and with the most significant runoff into the Chesapeake Bay were obligated to take steps to mitigate their stormwater discharges. One requirement was to put in place a funding mechanism for such improvements (the stormwater remediation fee, or the rain tax, depending on your perspective). Carroll County declined to establish any mechanism. Frederick County set a fee of one cent per real estate parcel. Harford County set what appeared to be a reasonable fee, but then whacked off 90% of it pending further study. The State was not amused - hence the letters and threats.

What is this so-called rain tax?  Each county is permitted to set up its own parameters but basically the idea is to address the amount of stormwater runoff a property generates and assess a fee accordingly.  As set forth in the statute, the fee is to be "based on the share of stormwater management services related to the property and provided by the county or municipality."  A county may set a flat fee, set a fee based on impervious surfaces, or use some other method. 

In Baltimore City the essential element is the amount of impervious surfaces on a property. Simply stated, that is roofs and pavement, but it also could include gravel roads and decks, but not include graveled settling basins or decks that drain to landscaping below.  The City is using aerial photographs as the basis for calculation of impervious surface square footage. This is converted to Equivalent Residential Units to establish the fee.

There are lots of things knowledgeable Maryland practitioners can do to help their clients navigate the intricacies of the Act. Indeed, they can make their clients real money.  At a Maryland Bar Association Environmental Law Section meeting yesterday a consultant explained how over $100,000 was saved for one client in pushing for exemptions, credits and applicable definitions.

But there was a larger lesson as well that would apply to any jurisdiction where storm sewers exist. A representative of Blue Water Baltimore noted that with climate change, the 100-year storm is now the 25-year storm. This is a common mantra and useful to keep in mind even if inaccurate. The 100-year storm is now the 25-year storm in some places. In other places it is now the 200-year storm. This is because with climate change some places will become drier and some wetter.  For practitioners counseling their clients, in becoming-wetter locales one should be paying attention to the age of the storm sewer infrastructure and considering whether it is sized for increased flows; also of importance is the effect of an infrastructure failure on the business plan. In becoming-drier locations one should apply converse thinking and further be skeptical of assessments or assertions of the need for oversized storm sewers. 

Creedence Clearwater Revival asked "Who'll Stop the Rain?" We submit it is the wrong question.  Stormwater creates problems because of its velocity and its volume.  Modern society packs down and covers the earth so that rain cannot percolate in and thus, for example, a small stream carrying stormwater is greatly amplified.  To mitigate velocity and volume is going to cost money.  Thus a better question would be:  Who'll Pay for the Rain?   

Climate Change Effects | Regulation

In Issuing Executive Order No. 41, Governor Markell Rejects Any Need to Choose Between Mitigating Climate Change and Supporting Economic Growth

September 13, 2013 21:39
by Mike Kelly  & Jameson Tweedie

Yesterday, Governor Jack Markell issued Executive Order No. 41, “Preparing Delaware for Emerging Climate Impacts and Seizing Economic Opportunities from Reducing Emissions.”  In many climate change discussions there exists an implied or overt assumption that society must choose between the economy and the climate.  Consistent with a theme that has resurfaced throughout his tenure as Governor, in Executive Order No. 41 Governor Markell explicitly rejects that choice:  “initiatives to responsibly reduce greenhouse gas emissions and prepare Delaware for climate impacts present significant economic development and employment opportunities in infrastructure construction, energy efficiency, clean energy, and advanced transportation.”

Executive Order No. 41 consists of three main components.  First, it establishes a Governor’s Committee on Climate and Resiliency (the “Committee”).  The composition of the Committee itself is noteworthy as it is clear this effort is not “mere puffery,” rather the Committee will include many of the key cabinet heads, including the Secretaries of the Departments of Natural Resources and Environmental Control (“DNREC”), Agriculture, Transportation, Health and Human Services, Safety and Homeland Security, and State, as well as the Directors of the Delaware Economic Development Office, the Office of Management and Budget, the Delaware State Housing Authority, and the Office of State Planning Coordination.

Second, the Committee, chaired by the Secretary of DNREC, shall develop a “an implementation plan to maintain and build upon Delaware’s leadership in responsibly reducing greenhouse gas emissions,” as well as recommendations for actions by agencies and local governments.  The plan and recommendations must be delivered to the Governor by the end of 2014, with the implementation plan updated annually thereafter.  Noteworthy are the requirements which Governor Markell mandates for the plan, overtly rejecting the notion that advancing the economy and planning for, and reducing, climate change must be at odds.  The plan “shall ensure that efforts have a positive effect on the State’s economy, including advancing the strategy of securing cleaner, cheaper, and more reliable energy, improving public health outcomes, increasing employment in Delaware, strengthening Delaware’s manufacturing capabilities, and enhancing Delaware’s overall competitiveness” (emphasis added).  This mandate that the climate change plan achieve positive economic results is framed by the plain acknowledgment of the significant risks facing Delaware from climate change and sea level rise.  These risks include that:

  • Delaware has the “lowest average land elevation in the United States and significant population living along 381 miles of shoreline,” putting Delaware at risk for coastal erosion, storm surge, flooding, saltwater intrusion, and tidal wetland losses.
  • Delaware’s critical infrastructure is at risk from climate change.
  • Delaware’s groundwater aquifers are at risk from saltwater intrusion.
  • Delaware’s $8 billion agriculture industry “could be significantly impacted by increasingly variable temperatures, precipitation, extreme weather events, and droughts.”
  • Delaware’s $6 billion tourism industry is vulnerable to climate change and sea level rise.

The Governor makes clear his belief that mitigating climate change and pursuing economic growth are not mutually exclusive.  Indeed, he plainly considers the joint goals of positive economic and climate outcomes as a logical next step from the successes already achieved in Delaware, including Delaware’s role within the Regional Greenhouse Gas Initiative, Delaware’s reduction of greenhouse gas emissions “by more than any state in the nation (29.7% from 2000 to 2010),” and Executive Order No. 18, which sought to reduce the climate change impacts of State Government, and which the Governor asserts not only significantly reduced the climate-related impacts of State Government, but at the same time “result[ed] in millions of dollars of savings.”

Third, and likely with the most immediate on-the-ground consequences (rather than future planning), Executive Order No. 41 requires that “all state agencies shall adhere” (emphasis added) to certain flood hazard mitigation and sea level rise adaptation requirements.  These include:

  • Requiring all state agencies to “incorporate measures for adapting to increased flood heights and sea level rise in the siting and design of projects for construction of new structures and reconstruction of substantially damaged structures and infrastructure” to avoid and minimize flood risks, and, wherever “practical and effective” shall use natural systems or green infrastructure to “improve resiliency to flood heights, erosion, and sea level rise.”
  • Requiring structures within Federal Emergency Management Agency (“FEMA”) special flood hazard areas to be “designed and constructed with habitable space at least 18 inches above current base flood elevation” and, in addition, requiring structures within areas designated by DNREC to be vulnerable to sea level rise inundation to be “designed and constructed to account for sea level changes anticipated during the lifespan of the structure” (emphasis added).
  • Requiring all state agencies to “consider and incorporate the sea level rise scenarios set forth by the DNREC Sea Level Rise Technical Committee into appropriate long-range plans.”

Only time will tell whether Governor Markell can achieve his dual goals of climate change action and economic growth, but Executive Order No. 41 demonstrates that he is well aware of the challenges and confident in his administration’s ability to achieve both goals.  His experience in the private sector and his economic track record since taking office in 2009, in the midst of the Great Recession, indicate that his climate change policies, and his optimism that they can be positive forces for economic growth, are based on pragmatism, science and economics, not ideology.

Climate Change | Regulation | Rising Sea Levels

Fourth Circuit Rejects Manipulation of Judicial Process As Ocean Manhandles Homes

August 19, 2013 22:56
by J. Wylie Donald


Can a community condemn shorefront cottages where the beach has eroded at 8 feet per year and the cottages interfere with emergency responders traveling along the beach?  Based on the Fourth Circuit's decision at the end of last month in Sansotta v Town of Nags Head we just don't know. What we do know is that a municipality cannot play both ends of the law against the middle to address the problem.

Let us explain.  Nags Head is a shore community of about 2500 souls (soaring to 40,000 in the summer) on North Carolina's Outer Banks. Municipal ordinances provide that a building suffering storm damage or erosion damage may be a public nuisance where it is in danger of collapsing, where there is a likelihood of personal or property injury, or where the structure is on public trust or public land.  Nags Head Ordinance 16-31(6) (a), (b), (c).  A 2009 storm washed away much of the sand around six cottages leaving their septic tanks exposed. The Town declared the cottages nuisances under Ordinance 16-31(6)(b) and (c) and required their abatement. Demolition was the only way to satisfy the ordinance but the homeowners did not comply and the Town assessed fines accruing at $100 per day.  The homeowners sued. (Twenty other cottages were also declared nuisances resulting in at least two other suits. See Town of Nags Head v. Toloczko, 863 F. Supp. 2d 516 (E.D.N.C. 2012); Town of Nags Head v Cherry, Inc., 723 S.E.2d 156 (N.C. Ct. App. 2012).)
 
The suit was originally filed in state court with claims sounding in both state and federal law. The Town removed to federal court.  Both parties moved for partial summary judgment.  The trial court dismissed and the homeowners appealed.

The Fourth Circuit affirmed the trial court's dismissal of the equal protection and procedural due process claims; however, the court of appeals reversed the trial court's dismissal of the takings claim.

Fourteenth Amendment Procedural Due Process.  Due process requires that before one is deprived of life, liberty or property, a constitutionally fair process must be imposed. Here, while the homeowners asserted constitutionally protected interests in the money to pay the fines and the cottages themselves, the Town never deprived them of those interests. First, the fines were never paid. Second, the Town's "regulatory actions do not constitute a deprivation of property because they represent limitations on the use of property that 'inhere in the title itself, in the restrictions that background principles of the State's law of property and nuisance already place upon land ownership.'" Sansotta at 14.  "By acting to abate what it believed was a nuisance, the Town simply kept the Owners from using their property in a way that was prohibited by law." Id. at 15. 

Fourteenth Amendment Equal Protection. The homeowners asserted that they were treated differently than the 14 other cottages that were also located in the public trust area. This was true but it did not matter. The Town had a valid reason for treating the cottages differently:  they were closer to the ocean and obstructed the passage of emergency vehicles to a greater extent.  "Notwithstanding the Owners' contentions about all parts of the beach being valuable, different parts of the beach may present different issues with regard to public safety.  Hence, the difference in the locations of the cottages on the beach is a legitimate basis for treating them differently."  Id. at 20. 

Fifth Amendment Takings. The homeowners asserted that their property was taken without just compensation. However, the homeowners had not completed the process of pursuing their compensation claim under state law. This was fatal to a federal claim, which required that a "plaintiff must first have sought compensation 'through the procedures the State has provided for doing so.'" Id. at 21.  In state court, however, the homeowners could assert a taking, even though they had not completed the compensation process.  "[U]nder San Remo Hotel[, L.P. v. City & Cnty. of San Francisco, 545 U.S. 323, 346 (2005)], a plaintiff may bring a takings claim in state court without having already been denied compensation by the state, if he also brings his state-law claim for just compensation." Id. at 23.  And here was the rub:  the Town had removed the case from state court, where the homeowners takings claim was ripe. But in so doing, the Town asserted the claim became unripe in federal court. Id. at 24.

The Court of Appeals was not willing to "judicially condone[] manipulation of litigation." Id. at 25.  The requirement for a federal court to wait until the state court has ruled on a just compensation claim, was a "prudential" not a "jurisdictional" requirement.  State courts have more experience in land use matters than federal courts, but that "does not mean that federal courts are incapable of handling them."  Id. at 25.  "A defendant implicitly agrees with this conclusion when he removes a case involving such a state or municipal law to federal court."  Id. at 25-26. Thus, the court refused to apply the state court litigation requirement and reversed the trial court's dismissal of the takings claim. "Based on our conclusion that a state and its political subdivisions waive the state-litigation requirement by removing a case to federal court, the district court erred in dismissing the Owners' takings claim as unripe." Id. at 35.

We find three things of moment in this case and its decision:

First, Nags Head is just one small community on the Atlantic littoral beset by rising sea levels. Yet it has spawned at least three cases that have been litigated to the appellate level.  We can expect many more.

Second, the issues in the rising sea level cases are going to get right down to fundamentals. Constitutional rights will be invoked. This of course suggests the Supreme Court will get involved. We note that it already has.  See Stop the Beach Renourishment, Inc. v. Florida, 560 U.S. 2606 (2010).

Third, one of the homeowners' takings claim was based on "redefining private property as public land." Id. at 21 n.16. Observe that the states own the land below mean high water (or mean low water in some cases). As the oceans rise, the states' claims to more and more of the current landowners' shorefront will increase. Is it the case, then, that that is a taking?  If it is, then states better start setting aside some substantial funds to pay just compensation that they cannot avoid. 

The front cover of this month's National Geographic premiers Rising Seas, How They Are Changing Our Coast Lines.  In North Carolina, they are living (and litigating) that.

Climate Change Effects | Climate Change Litigation | Regulation | Rising Sea Levels

'Deferral Rule' is Derailed - Biogenic Greenhouse Gas Emitters Stand By to Be Regulated

July 19, 2013 09:27
by J. Wylie Donald

The greenhouse gas rule you’ve never heard of, the Deferral Rule, was shot down (barely) by the D.C. Circuit last week.  See Center for Biological Diversity v. Environmental Protection Agency, No. 11-1101 (D.C. Cir., July 12, 2013).   The opinion offers a wonderful primer on greenhouse gas rulemaking and describes the Timing Rule, the Tailpipe Rule and the Tailoring Rule.  It also explains in great detail numerous doctrines concerning agency rulemaking.  And it balances on the edge of a knife.  There is an opinion (Tatel, J.).  There is a concurring opinion (Kavanaugh, J.) that joins the opinion but goes even further, and which additionally states that “I believe, contrary to this Circuit’s precedent, that the PSD statute does not cover carbon dioxide.”  Opinion at 24.  And last, there is a detailed dissent (Henderson, J.) that addresses the arguments of the opinion to good effect.  If one is looking for definitive guidance this opinion will not suffice.

Even without the Court’s decision, the rule would have died a year from now anyway.  The rule we are talking about is found at 76 Fed. Reg. 43,490, Deferral for CO2 Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs.  To those less tied to formality, it is the Deferral Rule.  Under the Deferral Rule, EPA delayed for three years regulation as stationary sources under the Clean Air Act emitters of “biogenic”  carbon dioxide while it further assessed the subject.  Biogenic CO2, is biologically derived CO2, as opposed to CO2 derived from fossil fuels.  It includes emissions from burning landfill methane, combustion of municipal biologically derived solid waste, fermentation processes for ethanol manufacturing and the burning of biomass. 

Biogenic CO2 is not discernably different in the atmosphere from that derived from fossil fuels.  Its difference lies in its context.  Biogenic CO2, when considered over time, may have a neutral or even reducing effect on total CO2 emissions because, for example, while the burning of biomass releases CO2, the growing of biomass pulls CO2 out of the atmosphere and sequesters it.  On the whole, facilities burning biomass might actually result in less CO2 emissions.  The purpose of the Deferral Rule was to permit EPA to spend some more time studying biogenic CO2 so as to avoid issuing regulations that accomplished little.

In its rulemaking EPA offered three doctrines as justifications for its rule:  the de minimis, one-step-at-a-time, and administrative necessity doctrines.  The de minimis doctrine allows an administrative agency to grant regulatory exemptions ”when the burdens of regulation yield a gain of trivial or no value.”  Opinion at 13.  The one-step-at-a-time doctrine allows an agency to proceed in a “piecemeal fashion.”  Id.  And the administrative necessity doctrine allows an agency to “avoid implementing a statute by showing that attainment of the statutory objectives is impossible.” Id. at 15-16.  The absurd results rule, which EPA set forth in its brief, rejects the interpretation of a statute that would produce an absurd result.  Id. at 17. 

The Court rejected all four theories.  The de minimis doctrine only applied to permanent exemptions, as the EPA conceded.  Id. at 13. Accordingly, it did not apply.  The dissent disagreed.  It saw the exception as available, particularly when the statute “expressly does not regulate “minor” sources that cause little harm because they release below-threshold levels of pollutants.”  Id. at 35.

Application of the one-step-at-a-time doctrine was found to be arbitrary and capricious because EPA did not set out how it intended to achieve the statutory goal:  “We simply have no idea what EPA believes constitutes ‘full compliance’ with the statute.  In other words, the Deferral Rule is one step towards … what?  Without a clear answer to that question, EPA has no basis for invoking the one-step-at-a-time doctrine.”  Id. at 15.  The dissent was not buying:  “just as EPA proceeded gradually in regulating GHGs under the Tailoring Rule, EPA has delayed its regulation of a specific GHG via the Deferral Rule.  The fact that EPA is required to take action does not preclude it from phasing in the action using the step-at-a-time method.”  Id. at 33.

The Court found fault with the administrative necessity theory because EPA did not explore what the Court referred to as the “middle-ground option,” requiring permitting except where the source took steps to reduce its biogenic CO2 emissions.  Because EPA had an “obligation to adopt the narrowest exemption possible, it should have explained why it rejected an option that would have reduced emissions from sources the Deferral Rule permanently exempts.”  Id. at 16-17. 

Last, there was the absurd results rule, which EPA sought to apply “because ‘emissions of CO2 derived from certain forms of biomass may not only fail to endanger public health and welfare, but in fact may benefit the public by reducing the net emissions of CO2,’ …[and] it would run afoul of congressional intent to regulate them.” Id. at 17-18. The Court found, however, that EPA did not utilize this rule in its rulemaking, notwithstanding passing references.  Simply put, “[t]hese passing references [fell] far short of satisfying EPA’s ‘fundamental’ obligation to ‘set forth the reasons for its actions.’”  Id. at 18.

The concurrence, as noted above, did not believe CO2 was even regulated by the statute.  But that had been previously decided to the contrary and “that’s water over the dam in this Court.”  Id. at 25.  As to the issue before him, that answer was easy:  “EPA simply lacks statutory authority to distinguish biogenic carbon dioxide from other forms of carbon dioxide.”  Id. at 21.  In sum, EPA was required to address emissions of CO2 and there was no part of the statute that allowed “EPA to exempt  … emissions of a covered air pollutant just because the effects of those sources’ emissions on the atmosphere might be offset in some other way.”  Id. at 22. 

The last point raised by the dissent, in our view, sums up the entire case:  what was the point?  The dissent would have dismissed because the case was not ripe.  First, it needed to be fit for review.  The rule was temporary and by July 2014 EPA would either have let the rule expire or issued a new rule, one that the petitioners might like, but certainly one that would have been informed by the additional three years of research.  Id. at 38.  Second, deferring decision would work no real hardship to petitioners.  Only one facility had been identified as being able to avoid permitting as a result of the Deferral Rule.  The dissent pointed out that the facility enjoyed no more than the previous status quo:  “the hardship of which the petitioners complain is hyperbolically overblown.  The Deferral Rule does not deregulate scores of polluters.  Instead, it temporarily maintains the theretofore long-time status quo for a limited number of stationary sources that – until July 1, 2011 – had never been subject to regulation as a major source under PSD.”  Id. at 42.

In our view, substantively, this decision accomplished little.  A rule that was going to expire next year, expires this year.  Parties seeking to rely on a decision by esteemed arbiters of the law find the arbiters completely at odds with one another.  But that may be the true significance of Center for Biological Diversity.  Notwithstanding that “the task of dealing with global warming is urgent and important at the national and international level,” id. at 25, consistency of approach is by no means assured in any arena, including the courts.

Carbon Dioxide | Carbon Emissions | Greenhouse Gases | Regulation

Top 6 at 6: Highlights of the Top Climate Change Stories in the First Half of 2013

July 1, 2013 00:01
by J. Wylie Donald

Another six months have passed and it is time for our semi-annual look at climate change and its intersection with the law.  Here are some highlights of the last six months:

1.  The Administration’s Focus.  After months of silence in the 2012 presidential campaign, President Obama rejuvenated his administration’s commitment to addressing climate change.  We heard in his inaugural address:   “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.”  He carried this forward in his State of the Union address less than a month later: “I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago.  But if Congress won’t act soon to protect future generations, I will.  (Applause.)  I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”     And in a speech this past Tuesday the promises took another step toward reality when the President outlined his “climate action plan.” 

Recognizing the logjam in Congress, the Administration's plan is based on authority the executive branch already has. The salient points include:  1) further restrictions on powerplant greenhouse gas emissions (notably addressing coal); 2) promotion of resilience and adaptation with respect to weather-related calamities; 3) additional permitting of renewable energy facilities on public lands; and 4) engagement in the international arena on climate change such as working out a global free trade agreement on clean energy technologies.   The goal is a reduction of U.S. greenhouse gas emissions by 17%.  The Wall Street Journal called these “sweeping climate policies.”  We will see; with no new authority, Gina McCarthy’s nomination to head EPA held up, and the bounty of natural gas unleashed by fracking, greenhouse gas reduction may be achieved by the market, see Leveraging Natural Gas to Reduce Greenhouse Gas Emissions,  not governmental efforts.  

2. 400 PPM.  On May 9, Mauna Loa Observatory of NOAA’s Earth System Research Laboratory reported that the average weekly value of atmospheric carbon dioxide at the observatory had reached 400 ppm, a level unsurpassed in 3 million years.  The world collectively ignored the number, treating it more like an insignificant decimal, 0.0004, which it was (a decimal, not insignificant).  We don’t think anyone will dispute that there are three ways to interpret this number:  it’s bad, it’s good, it’s neither.  Climate scientists are unanimous that it’s bad.  There is nothing saying it’s good.  Which means the justification for not taking action on climate change is that the ever increasing levels, and the ever increasing rate of accumulation, of carbon dioxide in the atmosphere (see the graphs by the observatory), are of no consequence.  US Airways will probably side with the climate scientists - it canceled 18 flights as a result of the record-breaking temperatures in the southwest this past weekend. 

As a footnote, we note that Mauna Loa’s number is an average, and is subject to refinement.  As it turned out, the 400 ppm number was refined a few weeks later to 399.89.  

3.  Free Trade.  In 2009 Ontario enacted its Green Energy Act to promote renewable energy in the province.  One approach is the adoption of a feed-in tariff (mandatory above-market rates for electricity derived from renewable resources).  This had successfully been pioneered in Germany.  Ontario legislators also saw the opportunity to spur job growth by giving subsidies to businesses that sourced their wind turbines and solar panels in Ontario (i.e., “domestic content”).

Japan jumped on this protectionism immediately and sought consultations with Canada under the General Agreement on Tariffs and Trade and the World Trade Organization. The consultations were ineffective and Japan requested a panel to hear the dispute concerning Ontario’s “domestic content requirements," with which renewable energy generators were required to comply "in the design and construction of electricity generation facilities in order to qualify for guaranteed prices” under the feed-in tariff program.

Last December the panel ruled in favor of Japan on the domestic content requirements. Canada appealed and this May the appellate panel affirmed. Ontario's energy minister has confirmed that Ontario will abide by the WTO decision and revise its Green Energy Act.   We conclude that free trade remains colorblind.

4. Climate Change Liability Lawsuits.  For seven years now, the first wave of climate change liability lawsuits have roiled the legal waters.  It bears remembering that in October 2009, the plaintiffs in these cases rode the crest of the wave.  The Second Circuit had reversed the trial court’s dismissal in Connecticut v. American Electric Power (AEP), and the Fifth Circuit likewise overturned the Southern District of Mississippi’s dismissal of Comer v. Murphy Oil USA.  Plaintiffs had standing; the political question doctrine did not apply.

Things have gone badly for the plaintiffs since.  All readers of this blog know of the Supreme Court’s decision in AEP, stifling the plaintiffs’ case under the doctrine of displacement.  This year two more decisions confirmed the Judicial Branch’s hostility to these claims.  Comer made it back to the Fifth Circuit, where dismissal was summarily affirmed on the doctrine of res judicata.  And the last of the original quadriga, Native Village of Kivalina v. ExxonMobil Corp., found its petition for certiorari denied in April,  thus leaving the Ninth Circuit’s affirmance of dismissal unchanged.

The only reed left for the plaintiffs is the granting of a petition for certiorari in Comer, a prospect we deem unlikely, if only because the appeal would be based on a purely procedural question of little likelihood of being repeated and of little relevance to the larger climate change issues.

5.  Ursus Maritimus.  On March 1 the D.C. Circuit in In re Polar Bear Endangered Species Act Litigation  affirmed the district court’s dismissal of challenges to the Fish and Wildlife Service’s designation of the polar bear as threatened under the Endangered Species Act because “due to the effects of global climate change, the polar bear is likely to become an endangered species and face the threat of extinction within the foreseeable future.” The polar bear’s friends (environmental groups) sought to have the bear listed as “endangered.”  Ursus maritimus’s less-than-friends (the State of Alaska and hunting groups), urged that no listing was appropriate.  The standard in such reviews is relatively simple:  “Our principal responsibility here is to determine, in light of the record considered by the agency, whether the Listing Rule is a product of reasoned decisionmaking.”  The Court found that it was, holding specifically the the Listing Rule rests on a three-part thesis: the polar bear is dependent upon sea ice for its survival; sea ice is declining; and climatic changes have and will continue to dramatically reduce the extent and quality of Arctic sea ice to a degree sufficiently grave to jeopardize polar bear populations. See Listing Rule, 73 Fed. Reg. at 28,212. No part of this thesis is disputed and we find that FWS’s conclusion – that the polar bear is threatened within the meaning of the ESA – is reasonable and adequately supported by the record.”

As arctic resource development progresses as the ice retreats, the polar bear's Endangered Species Act listing is sure to take on larger significance, both as a model for the preservation of other arctic species, and as a tool to block development.

6.  Compressed Natural Gas (CNG). On June 13 the Fifth Circuit affirmed the district court's decision in Association of Taxicab Operators USA v. City of Dallas. In the case the local taxicab organization challenged a city ordinance that allowed CNG-fueled taxicabs “head-of-the-line” privileges at Love Field in downtown Dallas. Plaintiff's theory was that section 209(a) of the Clean Air Act, which prohibits states and their political subdivisions from adopting emission standards for motor vehicles, preempted the ordinance either directly or by implication. The Fifth Circuit did not agree. Traditional police powers of the state were preserved to the state by section 209(d) of the Clean Air Act. More importantly, an ordinance granting head-of-the-line privileges, on its face did not set an emission standard, as required by the statute.  As to any implied preemption, the ordinance may have influenced taxicab operators to alter their behavior, but it did not compel them to do so. Less than 7% of Dallas's taxicabs served Love Field and the only place CNG cabs had head-of-the-line privileges was at Love Field; there were plenty of other places for gasoline powered cabs to pick up fares. Accordingly implied preemption did not apply either. 

One of our themes in a world beset by climate change is that there will be winners and there will be losers. Little did taxicab operators know they would be both.

Maryland Reassesses Local Sea Level Rise: More of Us Are Going to Get Wet

June 26, 2013 22:14
by J. Wylie Donald

We have looked at Delaware's perspective on rising sea levels several times in recent months.  Now it is Maryland's turn.  Today a panel of experts led by the University of Maryland Center for Environmental Science issued an update to Maryland's 2008 assessment:   Updating Maryland's Sea Level Rise Projections.  The conclusion is disturbing.  In the passage of just five years, the anticipated sea level rise in the mid-Atlantic states now exceeds the previous high range.

The origin of the report is  Governor Martin O’Malley’s December 28, 2012 Executive Order on Climate Change and “Coast Smart” Construction, which called for updated sea level rise projections based on "an assessment of the latest climate change science and federal guidance."  Maryland has the fourth longest tidal coastline in the continental United States and loses 580 acres every year  to shore erosion.  Id. "Thirteen Chesapeake Bay islands once mapped on nautical charts have been lost." Id.  The State has 450 facilities and 400 miles of roads within areas likely to be impacted within the next 100 years.  Id.  Hence its interest in rising seas.

And the seas are rising, faster than they have before.  More and better data confirm this. 

(1) the 20th century experienced the highest rate of sea-level rise in the last 2,000 years;
(2) global mean sea level (GMSL) rose at an average rate of 1.7 mm yr-1 during the 20th century based on tide gauge records and an average of 3.2 mm yr-1 from 1993 to the present based on satellite measurements;
(3) rates of melting of the Greenland and West Antarctic ice sheets accelerated; and
(4) sea level is likely to rise more than estimated by the IPCC 2007 assessment.

Update at 3.  With respect to the mid-Atlantic region, "relative sea-level rise of 7-8 mm yr-1 has been measured at Maryland tide gauges between 2002 and 2011", although scientists consider this period too short to identify a trend.  Update at 7.

Sea levels are eminently local attributes and affected by much more than the flows from the melting of arctic ice and the warming of the oceans.  The researchers considered, among other things

  • the amount of water being stored behind dams or pumped out of groundwater aquifers (expected to be a net addition over the next century);
  • the weakening gravitational effect of melting arctic ice masses that "counter-intuitively result[] in sea-level decline in nearby polar regions and sea-level increase in tropical regions";
  • glacial isostatic adjustment, which is the rebound of land once weighed down by the glaciers, as well as the subsidence of the "forebulge" of unglaciated lands at the front of the glacier;
  • the slowing of the Gulf Stream, which has the effect of causing coastal waters to rise; and
  • the increase in tidal ranges and storm surges, which are amplified by rising sea levels in an enclosed body of water like Chesapeake Bay.

In case all of that was a little complex, the researchers obligingly "put it all together."  The best estimate of sea level rise in Maryland by 2050 is 1.4 feet, with a range of 0.9 to 2.1 feet; by 2100 it is 3.7 feet with a range of 2.1 to 5.7 feet.  Update at 15.  To put this in perspective, the best estimates in the 2008 Maryland Climate Action Plan (p 53) were by mid-century a range of 0.6 feet to 1.3 feet or by 2100 2.7 to 3.4 feet.   Now the best estimate exceeds the high range of only five years ago.

As Governor O'Malley put it in his executive order, "The State of Maryland must take action now to ensure that State infrastructure investments in vulnerable coastal areas are "Coast Smart" - fiscally wise and structurally sound."  We couldn't agree more.

In closing, we don't often look far out into the future in this blog because its intended focus is the practical here-and-now impacts of climate change on the practice of law.  But the Update offered a sobering perspective on the unshakeable legacy our action or inaction today leaves to our children and grandchildren:

differences in 21st century emissions trajectories begin to have significant consequences for the rate of sea-level rise toward the end of this century and result in even greater differences during the next. In other words, steps taken over the next 30 years to control greenhouse gas emissions and stabilize global temperatures during this century will largely determine how great the sea-level rise challenge is for coastal residents in subsequent centuries. There is not much they could do then to slow sea-level rise because of the inertia of ocean warming and polar ice sheet loss.  Update at 11.

Regulation | Rising Sea Levels


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