June 18, 2013
The Regional Greenhouse Gas Initiative (“RGGI”) raised a record $124.4 million in its June 5, 2013 carbon emissions auction, with the clearing price of emissions allowances reaching a three-year high of $3.21 per ton of carbon dioxide (“CO2”). The increase reflects expectations that the nine-state, cap-and-trade regime for power plant CO2 emissions will impose more stringent emissions limitations in 2014, as proposed earlier this year.
RGGI is the first market-based regulatory program in the United States aimed at reducing greenhouse gas emissions from power plants, originally established in 2005 by a Memorandum of Understanding between seven states in the Northeast and Mid-Atlantic regions. RGGI held its first carbon auction in September 2008, with emissions allowances selling for $3.07 per ton. Between 2010 and 2012, however, the combination of relatively modest emissions caps, reduced electricity demand due to the economic recession, and an increase in lower-carbon power generation spurred by low natural gas prices depressed the price of RGGI emissions allowances and raised questions about the future of the program.
In response to those trends, in February 2013 RGGI concluded a two-year program review with a series of proposed changes to the trading program, including a 45 percent reduction in the regional CO2 cap from 165 million tons in 2013 to 91 million tons in 2013. RGGI also released an Updated Model Rule implementing those proposed changes, which must be implemented by each RGGI state this year. After 2014, the RGGI cap is expected to decrease 2.5 percent each year from 2015 to 2020, requiring additional emissions reductions from regulated entities.
The next RGGI carbon emission allowance auction is schedule for September 4, 2013. For more information on RGGI and state and federal climate regulation, contact Jeffrey Gracer.
June 3, 2013
Fresh Direct, the direct delivery retail grocer, has proposed relocating its operations from Long Island City to the Harlem River Yards and occupying space originally intended for the New York Wholesale Flower Market. A coalition of community groups challenged the project’s approvals, alleging violations of the State Environmental Quality Review Act (“SEQRA”) and challenging the constitutionality of the sublease by Harlem River Yards Ventures, Inc. (“HRYV”) to Fresh Direct, as well as the overlease between HRYV and the New York State Department of Transportation (“NYSDOT”). On May 24, 2013, Bronx Supreme Court Justice Mary Ann Brigantti-Hughes dismissed the hybrid petition-complaint in its entirety and denied the challenger’s motion for leave to amend. Sive, Paget & Riesel represented HRYV in the litigation.
The decision upheld the environmental review undertaken by the lead agency, the New York City Industrial Development Agency (“NYCIDA”), and concluded that the NYCIDA had appropriately issued a negative declaration after taking the required “hard look” at the Project’s environmental impacts. In particular, the Court sustained the NYCIDA’s determination that no supplemental environmental impact statement (“SEIS”) was required because Fresh Direct’s projected traffic impacts would be no greater than those which would have been generated by the previously approved wholesale flower market. The Court also held that the extant EIS, which dated from 1993, was not required to be supplemented, in part, because the relevant traffic data had been updated in the environmental assessment relied upon by the NYCIDA. Given an increasing number of lawsuits demanding preparation of an SEIS due to the passage of time, it is noteworthy that the Court adhered to the rule that the mere passage of time alone is not a sufficient basis for securing such relief.
The constitutional attack against the overlease was dismissed as time barred. The attack on the HRYV – Fresh Direct sublease, while timely, was dismissed for failure to plead any legally cognizable claim against the over-landlord, NYSDOT. Leave to amend was denied as futile.
For further information, contact Steven Barshov, who was lead counsel for HRYV.
May 13, 2013
On May 2, 2013, the Third Department of the New York State Supreme Court, Appellate Division, upheld a municipal zoning ordinance banning “all activities related to the exploration for, and the production or storage of, natural gas and petroleum,” in the case of Norse Energy Corporation USA v. Town of Dryden.
The Town of Dryden passed the ordinance in 2011 amid concerns about the environmental impact of high volume hydraulic fracturing, or “fracking,” in the Marcellus Shale. The ordinance was challenged by Anschutz Exploration Corporation, an oil and gas exploration company that owned leases covering approximately 22,200 acres of land in the Town of Dryden. Anschutz – which later assigned its interest in the leases to Norse, the appellant in the case – argued that Dryden’s ordinance was preempted by a provision of New York’s Oil, Gas, and Solution Mining Law (the “OGSML”), which states that the OGSML supersedes “all local laws or ordinances relating to the regulation of the oil, gas and solution mining industries . . . .” New York Environmental Conservation Law 23-0303(2). Anschutz (and later Norse) argued that this preemption clause prevents municipalities from using their zoning powers to ban fracking within their borders, while Dryden argued that the zoning provision was not the type of regulation targeted for preemption by the OGSML.
Since the OGSML does not define what it means by “regulation of the oil, gas and solution mining industries”, the court in Norse Energy Corporation examined the legislative history of the law in order to determine whether the Town’s zoning ordinance fell within the ambit of the preemption clause. The court ultimately concluded that the OGSML was aimed at “insur[ing] uniform statewide standards and procedures with respect to the technical operational activities of the oil, gas and mining industries”, and not to regulate where those activities could take place. Hence the OGSML would preempt a local law that attempted to regulate the actual operation of a natural gas well, but, the court held, it did not “usurp the authority traditionally delegated to municipalities to establish permissible and prohibited uses of land within their jurisdictions.”
This decision has important implications for fracking in New York State. According to Earthjustice, an environmental group involved in the litigation, over 150 municipalities in New York have passed zoning ordinances banning or restricting fracking within their borders; in fact, a similar ordinance passed by the town of Middlefield was upheld by the same court on the same day. Another group, FracTracker, has compiled a table of municipal zoning actions on fracking in New York state, showing 55 bans and 105 moratoria on fracking, as well as several municipalities that have passed resolutions in favor of fracking. The Norse Energy Corporation decision could encourage other municipalities to pass their own zoning resolutions restricting or banning fracking within their borders.
For more information about hydraulic fracturing and zoning matters, please contact Steve Barshov.
May 6, 2013
On April 16, the United States Environmental Protection Agency (“EPA”) took a significant step towards finalizing its long-pending guidance on the evaluation and response to vapor intrusion from contaminated soil and groundwater, releasing an updated draft of the guidance for public comment. The guidance, which EPA first released in draft form in 2002, is anticipated to have significant impacts for the owners, operators, and potential purchasers of sites contaminated by solvents, petroleum, and other volatile organic compounds (“VOCs”), as well as any parties responsible for such contamination.
What sites are at risk of vapor intrusion?
Vapor intrusion, the migration of hazardous vapor from contaminated soil or groundwater into buildings, is of greatest concern at sites contaminated by VOCs , such as the chlorinated solvents perchloroethylene (“PCE” or “Perc”) and trichloroethylene (“TCE”), as well gasoline constituents. Vapor can enter a building because of cracks in the foundation, openings around pipes or electrical wires, and heating and ventilation systems that decrease indoor air pressure, creating conditions that draw in vapor.
How have environmental regulators addressed vapor intrusion in the past?
In response to new evidence of human health risks and potential explosion hazards from vapor intrusion, EPA released draft vapor intrusion guidance under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and Resource Recovery and Conservation Act (“RCRA”) in 2002. At the time, EPA stated that “as the state-of-the-science improves, this guidance will be revised as appropriate.”
Over the following decade, however, the draft guidance was neither finalized nor revised, and individual states began to fill the regulatory gaps left by EPA. New York’s Department of Environmental Conservation (“DEC”) and Department of Health issued their own vapor intrusion guidance, and DEC began a formal re-evaluation of hundreds of contaminated sites – many of which had already been remediated and delisted – for new vapor risks. In December 2009, EPA’s Inspector General reported that the absence of final EPA guidance had “[impeded] EPA’s efforts to protect human health at sites where vapor intrusion risks may occur,” and urged EPA to finalize its 2002 draft.
What changes did EPA propose in its revised vapor intrusion guidance?
In response to the Inspector General report, last month EPA released a pre-publication draft of its final vapor intrusion guidance for public review and comment. The updated document incorporates a number of revisions from the 2002 draft, including:
- A new, online calculator for determining generic and site-specific screening levels –contaminant concentrations where vapor intrusion is believed to present risk and additional investigation or mitigation is warranted;
- New recommendations for preemptive mitigation and early action at certain sites before a full vapor intrusion analysis is complete;
- New guidance on the use of deed restrictions and other institutional controls to restrict land uses or activities that could otherwise result in unacceptable exposure to the vapor intrusion pathway
- A separate guidance document addressing petroleum vapor intrusion from underground storage tanks, which was not covered in EPA’s 2002 guidance.
Who is likely to be impacted by EPA’s new guidance?
EPA’s guidance is specifically addressed to sites being evaluated pursuant to CERCLA and RCRA, and it is expected to influence the scope of remedial investigations, risk assessments, and remedy selection at such sites. Moreover, because many CERCLA sites where remediation is complete must undergo five-year reviews for remedial effectiveness, consideration of vapor intrusion could reveal new public health risks and trigger additional mitigation requirements.
The guidance will also have impacts extending beyond CERCLA and RCRA. Vapor intrusion is an increasingly common topic in environmental due diligence for real estate transactions, and Phase I Environmental Site Investigations often analyze possible vapor intrusion pathways. EPA’s new screening levels and recommended mitigation measures are likely to inform negotiating positions and risk allocation at sites where vapor intrusion is suspected. Vapor intrusion could also give rise to toxic tort liability, with plaintiffs relying upon EPA guidance and other regulatory standards to establish a violation of the defendant’s standard of care. Finally, because vapor intrusion may impose new costs at previously-remediated sites, the guidance could lead more property owners to pursue “reopener” environmental insurance policies covering expenses incurred after a “No Further Action” or “Construction Complete” letter has been issued by state or federal environmental regulators.
How can I submit comments on EPA’s new guidance?
Comments on EPA’s revised vapor intrusion guidance may be submitted online at http://www.regulations.gov/#!docketDetail;D=EPA-HQ-RCRA-2002-0033 through May 24, 2013.
For more information about EPA’s guidance or other issues relating to vapor intrusion, contact Christine Leas or Jonathan Kalmuss-Katz.
April 19, 2013
On April 5, EPA proposed a rule changing the effluent limitation guidelines for stormwater discharges from construction and development point sources.
Why is EPA Changing the Standard?
These changes reflect the terms of a settlement agreement between EPA and the Wisconsin Builders Association, the National Association of Home Builders and the Utility Water Act Group resolving the 7th Circuit lawsuit, Wisconsin Builders Association v. EPA, No. 09-4413 (7th Cir. 2012). The groups challenged the EPA’s 2009 Effluent Limitations Guidelines for the Construction and Development Industry, known as the 2009 C&D Rule, arguing that the rule was unworkable and attempts at compliance with effluent limitations guidelines could cost stakeholders up to $10 billion annually.
Who is Affected by these Changes?
The 2009 C&D Rule applies only to stormwater discharged during construction, which generally includes clearing, grading and excavation. Owners and operators of construction sites with one acre or more of land disturbance are subject to regulation and would be affected by the changes incorporated in the proposed rule.
What are the Changes?
The EPA acknowledged that the numeric turbidity requirements in the 2009 C&D Rule were flawed, and stayed implementation until additional information could be gathered. Pursuant to the Wisconsin Builders Association settlement, the proposed rule entirely eliminates numeric turbidity limits. The proposed rule additionally gives permittees more flexibility in adopting stormwater controls by specifically defining “infeasible” to allow consideration of industry practice as well as cost. EPA has also incorporated common-sense explanations of how the rule should be applied. For example, the requirement to minimize soil compaction is now explicitly inapplicable in areas where the site’s function requires soil compaction, such as foundation pads for buildings or roads; similarly, the requirement to stabilize certain areas does not apply to areas whose function necessitates that they not be stabilized. These changes, and others, reflect the continuing evolution of the standards for stormwater management under the Construction General Permit.
How Does This Affect Construction in New York?
In New York, the Department of Environmental Conservation (DEC) has authority to administer the NPDES program under its SPDES permit system. DEC has already adopted many of the 2009 C&D Rule requirements in its Construction General Permit (GP-0-10-001) and the New York State Stormwater Management Design Manual (2010). Discussion of the effect of the current proposed rule on the DEC Construction General Permit will be forthcoming in another blog post shortly.
EPA is accepting comments on the proposed rule through May 31, 2013.
For more information on stormwater regulation contact Michael Bogin or Maggie Macdonald.
March 15, 2013
On April 4, 2013, experts in environmental law, environmental policy, local government, planning, engineering, and environmental science will convene at Hofstra University in Hempstead, NY to discuss lessons learned in the wake of Superstorm Sandy. This conference will examine the significant flaws that Sandy revealed in New York’s housing, transit and electric power systems and infrastructure, and the legal implications of addressing those vulnerabilities and climate-change-related impacts. The panelists will discuss how making communities more resilient will require a rethinking of physical changes to the environment and also a reconsideration of local, federal and state land use and environmental laws and regulations. Insurance and risk management have played, and will continue to play, a central role in response and recovery; those topics, as well as sources of funding for rebuilding and mitigation, will also be addressed.
The conference is co-sponsored by Sive, Paget & Riesel, P.C., the American Bar Association Section on Environment, Energy, and Resources, and the New York State Bar Association. SPR principals Steven Barshov, Michael Bogin, and Pamela Esterman will participate in the conference as co-chairs, moderators, and speakers.
For more information about the conference and to register, please visit the conference website.
January 23, 2013
The United States Environmental Protection Agency (“EPA”) recently finalized the first of several pending guidance documents and regulations governing the evaluation and mitigation of vapor intrusion at contaminated sites, a growing area of focus that has thus far been regulated primarily on the state level. EPA’s new guidance requires regional EPA offices to address vapor intrusion risks during the five-year reviews for most completed Superfund cleanups.
Vapor intrusion, the migration of hazardous vapor from contaminated soil or groundwater into overlying buildings, is of greatest concern at sites contaminated by volatile organic compounds (“VOCs”), such as chlorinated solvents perchloroethylene (“PCE” or “Perc”) and trichloroethylene (“TCE”), as well as several non-chlorinated gasoline components. In 2002, EPA issued draft guidance governing the investigation of vapor intrusion at Resource Recovery and Conservation Act (“RCRA”) corrective action, Superfund, and Brownfield sites, but it has yet to finalize that document. The 2002 Draft Guidance did not cover vapor intrusion from petroleum releases at underground storage tank (“UST”) sites, and a recent scientific analysis for EPA concluded that “screening for [petroleum vapor intrusion, or “PVI”] using the same methodology for chlorinated hydrocarbons is overly conservative; a different approach is needed for PVI.”
EPA’s latest guidance covers only Superfund sites where the selected remedy leaves residual amounts of hazardous substances at concentrations that do not allow for unlimited use and unrestricted exposure, thus requiring five-year reviews of remedial protectiveness. As part of that five-year review process under the federal Superfund law, EPA plans to gather data on existing and potential vapor intrusion pathways, assess the protectiveness of the selected remedy in light of any such pathways, and “if issues are identified that may prevent the response action from being protective, now or in the future … [to document] these issues and the follow-up recommendations and actions … in the five-year review report.” This analysis could result in the “re-opening” of longstanding Superfund remedies to address vapor intrusion, similar to a re-evaluation process that New York State initiated in 2006 at chlorinated VOC contaminated sites overseen by the state Department of Environmental Conservation (“DEC”).
While EPA’s recent guidance provides a series of questions for use in evaluating potential vapor intrusion risks, it does not detail screening and testing procedures for sites where vapor intrusion is suspected. Those topics were addressed in EPA’s 2002 Draft Guidance, which remains under review and is anticipated to be finalized in 2013. EPA’s draft did not supersede state vapor intrusion guidance, which could be incorporated into Superfund remedial plans if the state where the site is located sets more stringent standards than EPA. It is also not yet clear how EPA’s vapor intrusion screening levels will interact with the Occupational Safety and Health Administration’s Permissive Exposure Levels (“PELs”), which contain a separate set of standards for indoor air contamination at workplace facilities.
Finally, last year EPA solicited comment on potential rules that would account for vapor intrusion concerns in the ranking and listing of Superfund National Priorities List (“NPL”) sites, although the agency has yet to formally propose those regulations.
Owners and operators of drycleaners, gas stations, and other properties potentially impacted by VOCs, as well as anyone considering the purchase or sale of such sites, are the most likely be affected by the forthcoming vapor intrusion developments. For more information on vapor intrusion analysis and regulation, on both the state and federal level, please contact Christine Leas or Jonathan Kalmuss-Katz.
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