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August 18, 2011

NYCDEP Report Discusses Economic and Environmental Impacts of Shutting Down Indian Point Energy Center

By: Mark Lebel — Filed under: Emerging Issues, New York Environmental Law, Renewable Energy & Energy Development — Posted at 4:31 pm

The New York City Department of Environmental Protection (“NYCDEP”) recently released a report discussing the economic and environmental effects of a hypothetical retirement of Indian Point Energy Center (“Indian Point”), which comprises two large nuclear generation units in Cortlandt, New York in the Lower Hudson Valley.  The report discusses some of the negative implications of shutting down such a major generator of electricity.  Nuclear power results in no air pollution and has low marginal costs to generate electricity.  As a result, the report concludes that most potential replacements for Indian Point would result in higher electricity prices and more air pollution.  The report estimates that retiring Indian Point could increase costs to consumers across New York State by up to 10%, or over $1 billion dollars per year, starting in 2016.  The report also found that retiring Indian Point could result in substantial increases in local air pollutants and greenhouse gases.

In order to continue operating over the long term, Indian Point needs to be re-licensed by the U.S. Nuclear Regulatory Commission and needs a new water quality certificate from the New York State Department of Environment Conservation.  New York Governor Andrew Cuomo’s longstanding position is that Indian Point should be shut down because of the risks that it may pose to nearby populations, including those in New York City.

Gov. Cuomo recently signed legislation that reinstates Article X of the Public Service Law.  Article X centralizes and streamlines the siting approval process for new power plants in New York.  Part of the justification for this legislation was that streamlining siting approval would make it easier to replace Indian Point.

Entergy, the owner of Indian Point, continues its campaign to re-license the plant; notable public relations efforts include maintaining a dedicated twitter feed and reportedly attempting to hire former Mayor Rudolph Giuliani to be a spokesman for the safety of the plant.

Sive, Paget & Riesel represents the Town of Cortlandt in the ongoing state and federal proceedings relating to Indian Point’s proposed relicensing.

Mark Lebel is a Summer Associate at Sive, Paget & Riesel


August 8, 2011

EPA, Environmental Groups Pursue New Sources of Fracking Regulation

With the Environmental Protection Agency (“EPA”) largely barred from regulating hydraulic fracturing (“fracking”) under the Safe Drinking Water Act, regulatory proponents have turned their attention to alternate means of controlling the industry’s environmental impacts.  Last month, EPA proposed the first federal rules limiting air emissions from fracking operations, and on August 4, a coalition of environmental groups petitioned EPA to require the testing and disclosure of fracking fluids under the Toxic Substances Control Act (“TSCA”).  Others have turned to the courts to compel greater environmental review of fracking’s impacts, with a new suit filed in the United States District Court for the Eastern District of New York late last week.    

On July 28, 2011, EPA proposed a suite of new Clean Air Act rules governing the emission of volatile organic compounds (“VOCs”), sulfur dioxide, and air toxics from oil and gas extraction and transmission activities, including the first federal air standards for hydraulically fractured wells.  During fracking, VOC emissions are often elevated during “flowback” periods, when fluids injected into wells return to the surface carrying contaminants that can evaporate into the air.  EPA’s proposed rules would require wells to separate and capture natural gas and hydrocarbons during flowback, reducing emissions of VOCs by an estimated 95 percent.

Additional EPA rules may be forthcoming in response to a petition filed last week by Earthjustice on behalf of over 100 non-profit groups.  The petition asks EPA to issue regulations under TSCA requiring manufacturers and processors of “chemical substances and mixtures used in oil and gas exploration or production,” including fracking fluids, to conduct testing on the toxicity and environmental and health impacts of their products and disclose the results to EPA.  If the petition is denied, Earthjustice has suggested it would challenge EPA’s determination in court.

Fracking regulation is also moving forward on the state and regional level, with the Delaware River Basin Commission (“DRBC”) – a regional body consisting of four states and the Army Corps of Engineers – proposing rules governing hydraulic fracturing siting and operations in New York, New Jersey, Pennsylvania, and Delaware.  New York Attorney General Eric Schneiderman has filed suit in federal court seeking to enjoin the finalization of those rules pending the preparation of an Environmental Impact Statement under the National Environmental Policy Act (“NEPA”).  On August 4, the Delaware Riverkeeper Network, Hudson Riverkeeper, and National Parks Conservation Association brought a similar suit in the same court.  Unlike New York, however, the environmental groups named DRBC as a defendant.   

The U.S. Department of Justice (“DOJ”), on behalf the Army Corps of Engineers and other federal defendants, recently announced its plans to move to dismiss New York’s lawsuit on sovereign immunity, standing and ripeness grounds.  There are also questions as to whether the proposal of a regional body is a “major federal action” governed by NEPA – an argument that DOJ reserved the right to raise at a later date as an additional ground for dismissal.  A pre-motion conference on DOJ’s request for dismiss is scheduled for Wednesday, August 10.

August 4, 2011

Proceed With Caution: New Land Banks Should Carefully Manage Liability for Past Contamination

On July 29, 2011, Governor Cuomo signed a law authorizing local governments to create not-for-profit corporations to act as land banks with respect to vacant, abandoned, or tax-foreclosed property.  These non-profit land banks will have the ability to sell property free and clear of prior tax liens.  However, the new law does not insulate these newly created non-profits from liability for site contamination.

Newly created land banks will need to exercise caution in acquiring abandoned and foreclosed property, which are often contaminated from historic industrial activity.  Such contamination may have been a factor contributing to the abandonment of the property, particularly in economically depressed areas.  Federal and state laws can impose strict liability on owners of contaminated property to address the actual or potential release of hazardous substances.   Although these laws provide a defense to government entities acquiring property involuntarily or through eminent domain, such defenses do not appear to be available to a land bank.  Land banks would be well advised to consider this risk and to protect themselves by conducting due diligence investigations before taking title (in order to qualify for certain statutory defenses to liability) or by delaying taking title until a developer or other entity has been identified with the financial capacity and willingness to assume environment liability for past contamination.