August 18, 2011
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
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
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.
July 22, 2011
A recent federal lawsuit in upstate New York signals increased litigation over vapor intrusion claims, which are already subject to regulatory attention and frequent re-openers of prior cleanups by the New York State Department of Environmental Conservation (“DEC”).
In one of the first cases of its kind in New York, on June 24, 2011, CAEUSA Inc. (“CAE”), a supplier of flight simulators and related products, filed a federal lawsuit against neighboring property owners, seeking $2.1 million in response costs and damages for soil vapor contamination allegedly arising from releases of solvents on neighboring properties. As a result of soil vapor issues in Endicott, NY and elsewhere, DEC is reviewing, and in many cases, reopening, prior remediation approvals to address soil vapor contamination.
CAE asserts that, in 1998, it expended approximately $4 million on remediation of soil contaminated with chlorinated solvents at its property near Binghamton, New York pursuant to consent orders with DEC. CAE later sold that property but retained contractual responsibility for pre-closing contamination. In 2003, DEC began an extensive investigation of the intrusion of soil gas and soil vapor into properties neighboring the former CAE site. Based on that investigation, DEC installed more than 120 vapor mitigation systems in the neighboring properties.
According to the complaint, DEC is seeking $2.1 million from CAE for its costs in investigating the soil vapor contamination and installing the vapor mitigation systems. In its complaint, CAE alleges that necessary remediation of its property was conducted and that its site is not contributing to the soil vapor contamination of the neighboring properties, where vapor mitigation systems were installed as a result of DEC investigation. CAE alleges that current and past owners and operators of manufacturing and commercial properties neighboring the former CAE site are responsible for the off-site soil vapor conditions.
CAE’s complaint presents data showing that soil vapor associated with the plaintiff’s property is minimal in contrast with very high levels at and emanating from the defendants’ properties. It also presents detailed allegations de-linking the soil vapor contamination from any residual groundwater contamination that could be connected to CAE. CAE’s lawsuit signals that courts will now be forced to grapple with the complicated issues faced by DEC with respect to soil vapor intrusion: the complexities of site data, the evidence needed to pursue parties for vapor intrusion, and the reopening of cleanups previously approved and closed by the agency.
Sive, Paget & Riesel represents a number of property owners on vapor-intrusion evaluations and re-openings. For more information on this topic, please contact Christine Leas, Jeffrey Gracer or Michael Bogin.
July 1, 2011
On July 1, the New York State Department of Environmental Conservation (“DEC”) issued a revised Draft Supplemental Generic Environmental Impact Statement (“SGEIS”) recommending that high-volume hydraulic fracturing (“fracking”) be banned in the New York City and Syracuse drinking water watersheds but that fracking be allowed to proceed, subject to strict regulation, on private property. Fracking uses high-pressured water, combined with chemicals, to release natural gas present underground in shale formations.
The revised Draft SGEIS contains recommendations to mitigate the environmental effects of fracking. These recommendations, which would make approximately 85 percent of the Marcellus Shale accessible to natural gas production, include the following:
- Fracking would be prohibited in the New York City and Syracuse watersheds, including a buffer zone;
- Drilling would be prohibited within primary aquifers and within 500 feet of their boundaries;
- Surface drilling would be prohibited on state-owned land, including parks, forest areas and wildlife management areas;
- Fracking will be permitted on privately held lands under “rigorous and effective controls”; and
- DEC will issue regulations to codify these recommendations.
DEC’s present recommendations depart from those contained in an earlier 2009 Draft SGEIS, which would have permitted drilling in the New York City and Syracuse drinking water watersheds, and which would have allowed surface drilling for high-volume fracking in primary aquifers and on public forests, wildlife areas, and parkland. In December 2010, then-Governor David Paterson ordered DEC to revise the initial Draft, taking into consideration the voluminous public comments that had been submitted. This order was understood to impose a de facto moratorium on new permits until the issuance of the revised draft.
The import of DEC’s present findings to stakeholders such as upstate residents, downstate residents, municipalities, and industry cannot be fully understood without a thorough review of the revised Draft SGEIS, which is over 900 pages long. As with many comprehensive studies, the devil will be in the details. The revised Draft SGEIS will be posted on DEC’s website on July 8, 2011, and will be open for public comment for 60 days beginning in August. It is expected that another round of extensive public comments will follow.
As of July 1, DEC has posted an Executive Summary of the revised Draft SGEIS and other related information online. This website should contain the entire revised Draft SGEIS by July 8.
Click here for more information about hydraulic fracturing in New York.
June 23, 2011
As part of a deal at the end of the current legislative session, the New York Legislature has passed the “Power NY Act of 2011,” a sweeping energy bill negotiated between Governor Andrew Cuomo and legislative leaders. Section 12 of the new law reauthorizes and modernizes Article X of the Public Service Law, which expired on January 1, 2003, governing the siting and approval of power plants in New York.
The absence of a power plant siting law has been cited by some as one important reason why there has been scant development of power plants in New York in recent years, including alternative energy sources. (Others have cited the poor economy as the primary roadblock to new power plant development.)
Like its predecessor, the new version of Article X aims to centralize and streamline the siting approval process, although the threshold for application of the law has been lowered from 80 to 25 megawatts. The law creates and vests permitting authority with the New York State Board on Electric Generation Siting and the Environment (“the Board”). Seeking to balance the need for local input in siting decisions with the obstacles posed by “NIMBY” opposition to new power plants, the statute provides that two local residents will be part of the Board for each proceeding. The other five members of the Board will all be State officials. The law also provides for “intervenor funding” which will enable municipalities and other local parties to participate in all phases of the administrative review, including the mandated adjudicatory hearing.
The Board is given authority to override local laws and ordinances if they are “unreasonably burdensome.” Unless otherwise agreed to by an applicant or extended due to a “material and substantial amendment to the application” or “extraordinary circumstances,” Board decisions must be rendered within a year of the application being deemed complete.
Article X displaces the State Environmental Quality Review Act (SEQRA) process for covered projects, but mandates several environmental analyses of the facility’s impacts. These analyses include a “cumulative air quality analysis” of the combined effects from the proposed facility, other proposed sources and all existing sources; a description of the demographics of the surrounding community; and a description of “reasonable and available” alternative locations. It also requires the Board to find that the project minimizes or avoids disproportionate impacts on the surrounding community.
There are significant differences between the new version of Article X and the expired version. The lower 25 megawatt threshold will allow smaller projects to be covered by the law and may particularly benefit developers of wind projects, which in most cases would not have been covered by the expired version. The increased emphasis on environmental justice impacts addresses concerns stated by environmental groups. Current applicants for local and state permits for a power plant may elect to be covered by the new law.
In what appears to be the first legislative enactment that specifically and directly addresses greenhouse gas emissions, Section 21 of the Power NY Act requires the Department of Environmental Conservation to promulgate regulations “targeting reductions in emissions of carbon dioxide” for new power plants with a capacity of 25 megawatts or more.
Mark LeBel is a Summer Associate at Sive, Paget & Riesel, P.C.
June 20, 2011
Dealing a blow to climate change tort litigants, the Supreme Court ruled 8-0 on June 20, 2011 that Congressional authorization of greenhouse gas (“GHG”) limits has displaced federal common law suits seeking GHG reductions. The Court’s decision in American Electric Power v. Connecticut reversed the Second Circuit Court of Appeals’ ruling that allowed a group of states, cities and land trusts – including New York State and New York City – to pursue federal public nuisance claims against the nation’s largest electric utility GHG emitters.
Justice Sotomayor, who sat on the Second Circuit panel that initially heard the case, recused herself from the Supreme Court’s deliberations. Although the ruling on displacement of federal common law claims was unanimous, the remaining justices were equally divided over whether federal jurisdiction even existed. Four members of the Court (presumably Justices Alito, Roberts, Thomas and Scalia) would have barred the suit on standing or other jurisdictional grounds, while four others (presumably Justices Kagan, Breyer, Ginsburg and Kennedy) affirmed plaintiffs’ standing. (Slip. Op. at 6.) This split – which upholds the Second Circuit’s finding of the plaintiffs’ standing – dates back to the Supreme Court’s 2007 climate change decision, Massachusetts v. EPA, where by a 5-4 margin the Court affirmed the state petitioners’ standing and upheld EPA authority to regulate GHGs under the Clean Air Act.
Justice Ginsburg – part of the five-member majority in Massachusetts v. EPA – authored the latest climate decision. Without deciding whether federal common law could redress GHG-related claims in the absence of Congressional action, she wrote that “any such claim [in this case] would be displaced by the federal legislation authorizing EPA to regulate carbon-dioxide emissions.” (Slip. Op. at 9.) Rejecting the states’ argument that displacement should not apply until EPA actually regulated the sources in question, which it has yet to do, Ginsburg answered: “The critical point is that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law.” (Slip. Op. at 12.)
The Supreme Court decision does not necessarily foreclose all future climate change tort suits. The Court did not determine whether federal law has preempted state common law remedies, as this issue was not decided below or briefed before the Supreme Court. (Slip. Op. at 15-16.) That issue was left open for consideration on remand. Moreover, the Court’s displacement-based decision could be revisited should Congress withdraw or otherwise interfere with EPA’s existing climate change authority, as several opponents of EPA regulation have proposed in recent years.
On Thursday, June 30th, the New York City Bar Association’s Environmental Law Committee and International Environmental Law Committee, the Environmental Law Institute, and the Center for Climate Change Law at Columbia Law School are sponsoring a debate on the Supreme Court’s decision at 6:00 p.m. in the Great Hall of the New York City Bar Association. Event information and registration are currently available online.
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