December 13, 2010
EPA can enforce its climate change regulations while litigation challenging those regulations is pending, a federal appeals court ruled last Friday. The denial of a motion to stay the implementation of EPA’s rules removed one of the final barriers to implementation of the Agency’s first-ever stationary source greenhouse gas (“GHG”) limits, which are scheduled to begin phasing in on January 2, 2011.
In the motion for a stay, coalitions of industry, state, and other challengers argued that the climate rules were unlawful and would cause irreparable injury if not enjoined. Without addressing the merits of the regulations themselves, the D.C. Circuit Court of Appeals found that the challengers had not shown that “certain” harm would “directly result” from the rules’ implementation, as required for a stay.
This ruling means that EPA’s rules are likely to take effect as scheduled, as legislation that would delay or freeze funding for EPA’s stationary source GHG regulations is not expected to pass before Congress adjourns this month. The incoming Congress may take up similar legislation next year, either as a stand-alone measure or an amendment to a spending bill. In the meantime, EPA is in the process of finalizing rules to ensure that its forthcoming stationary source GHG controls only affect certain new and modified facilities emitting at least 75,000 tons of GHGs annually. These implementing rules are currently being reviewed by the White House Office of Management and Budget, and are scheduled to take effect before EPA’s January 2 regulatory deadline.
The suits against EPA’s suite of greenhouse gas regulations will be heard by a single three-judge panel on the D.C. Circuit, with briefing scheduled to begin next year. While that litigation is pending, the Supreme Court will hear arguments on whether EPA’s challenged climate rules displace federal common law remedies aimed at addressing global warming.
For more information on climate-related litigation and regulations, contact Jeffrey Gracer.
December 9, 2010
On November 29, 2010, the New York State Assembly passed a bill imposing a state-wide moratorium on new authorizations for hydraulic fracturing. An identical bill was passed in the New York State Senate in August. The bill, which has been sent to Governor Paterson for signing, suspends until May 15, 2011 the issuance of new permits “for the drilling of a well which utilizes the practice of hydraulic fracturing for the purpose of stimulating natural gas or oil in low permeability natural gas reservoirs, such as the Marcellus and Utica shale formations.” The purpose of the moratorium is to “afford the state and its residents the opportunity to continue the review and analysis of the effects of hydraulic fracturing on water and air quality, environmental safety and public health.”
Hydraulic fracturing uses high-pressured water, combined with chemicals, to release natural gas present underground in shale formations. The use or proposed use of this process has raised concerns across the country that this process has contaminated, or will contaminate, drinking water supplies. Both the New York State Department of Environmental Conservation (“DEC”) and the federal Environmental Protection Agency (“EPA”) are currently undertaking studies of the environmental impacts of hydraulic fracturing. However, the EPA study will not be complete by the end of the moratorium, and the DEC study may not be complete by then either.
DEC is reviewing the environmental impacts of hydraulic fracturing in New York through the preparation of a Supplemental Generic Environmental Impact Statement (“SGEIS”) pursuant to the State Environmental Quality Review Act (“SEQRA”). DEC released a Draft SGEIS on September 30, 2009. The Final SGEIS has not yet been released. In April 2010, the DEC announced that the watersheds supplying drinking water to New York City and Syracuse would be excluded from the final study, placing these areas in a regulatory limbo that some have characterized as a de-facto ban on drilling in those areas.
The EPA’s study, the initial results of which are expected to be released in late 2012, focuses on effects of hydraulic fracturing on public drinking water supplies. The agency has recently sought information from natural gas companies through information requests and a subpoena about the chemical composition of fluids used in the hydraulic fracturing process, data on the impacts of the chemicals on human health and the environment, standard operating procedures at their hydraulic fracturing sites, and the locations of sites where fracturing has been conducted.
As might be expected, several environmental advocacy groups praised the moratorium, while representatives from the natural gas industry criticized it, stating that it would jeopardize jobs and state tax revenue and noting that natural gas companies would first seek to drill in states that could offer a more “hospitable” regulatory environment.
November 19, 2010
On November 9, the U.S. Environmental Protection Agency (“EPA”) subpoenaed Halliburton for its failure to answer the agency’s request for information regarding the chemical contents of its hydraulic fracturing processes, and potential human health and environmental impacts of hydraulic fracturing.
In conjunction with public meetings held from July to September, EPA issued information requests in September to nine hydraulic fracturing service providers for information regarding their hydraulic fracturing processes. Except for Halliburton, every company timely complied with EPA’s information request or agreed to submit the information by December.
As a result of Halliburton’s failure to respond, and because EPA’s plan is to have initial results by the end of 2012, EPA subpoenaed Halliburton to submit information by December 1, 2010 regarding the hydraulic fracturing fluid it uses; data and studies in the company’s possession regarding: impacts of its hydraulic fracturing products on human health and the environment; process of hydraulic fracturing operations for natural gas extraction; and sites that use its fracturing fluid.
On November 15, less than one week after being issued the subpoena, Halliburton announced that it will publicly disclose information about the chemicals used in its fracturing fluids on a portion of its website it is calling a “microsite.” The company stated as follows:
Halliburton has just made available new web pages to emphasize our forthright disclosure of the additives and constituents that are used for several typical wells in Pennsylvania. We believe this effort represents an important and substantive contribution to the broader long-term imperative of transparency.
While the initial focus of the additive disclosure pages is limited to activities taking place in Pennsylvania, where development of the Marcellus Shale is already well-underway, the Company is committed to continuing to provide hydraulic fracturing fluid disclosure information for every U.S. state in which Halliburton’s fracture stimulation services are in use.
The New York Times has reported the new website shows that many of the fracturing chemicals are benign, such as the food additive guar gum, which is used in as a thickener in ice cream. However, several hazardous chemicals, such as microbiocide agents, are also listed. Some environmental groups, such as the Natural Resource Defense Council, believe that the website is insufficient because it does not fully disclose information on a site-by-site basis. Id. As of the date of this post, the website only included information on water and foam fracturing formulations in Pennsylvania and foam fracturing formulations in the Northeast. The site does not include most of the information required by EPA’s subpoena.
November 12, 2010
In anticipation of new greenhouse gas (“GHG”) restrictions set to take effect on January 2, 2011, the Environmental Protection Agency (“EPA”) released guidance on the GHG permitting determinations for new and modified power plants, industrial facilities, and other stationary sources.
The guidance is directed at regulated entities and state agencies, which have been delegated authority to implement the permitting provisions of the Clean Air Act. Next year, New York and most other states will begin to phase in GHG regulations for certain new and modified stationary sources. The EPA plans to take over GHG permitting in those states that refuse to adopt the GHG rules or are not prepared to do so.
A “tailoring” regulation finalized by EPA last June raised the emissions threshold for the new GHG limits. From January 2 through June 30, 2011, the regulations only cover stationary sources whose construction or modification would increase annual GHG emissions by at least 75,000 tons of carbon-dioxide equivalent and would also trigger the Clean Air Act’s Prevention of Significant Deterioration provisions for other pollutants. Starting in July, construction or modification that increases annual GHG emissions by at least 100,000 tons of carbon-dioxide equivalent could also trigger GHG control requirements.
EPA’s new guidance adopts a flexible interpretation of the “best available control technology” requirements for GHGs. While supporting the consideration of add-on technologies like carbon capture and sequestration systems, the agency acknowledges that such technologies present “significant logistical hurdles” that may render them inappropriate at the present time (GHG Guidance, p. 38). Control technologies are also most commonly selected based on the permit applicant’s primary purpose or objective, so the Clean Air Act would typically not require an applicant for a coal-fired power plant to switch to a less carbon-intensive fuel (e.g. natural gas or renewable energy) (id. at 29).
Instead, sources that trigger the GHG permitting requirements are more likely to be required to implement energy efficiency improvements, which are promoted throughout EPA’s guidance. For instance, EPA notes that “an applicant proposing to build a new facility that will generate its own energy with a boiler could also consider ways to optimize the thermal efficiency of a new heat exchanger that uses the steam from the new boiler” (id. at 32). Other options for GHG reductions include the use of certain types of biomass or implementation of a source-wide Environmental Management System.
The new guidance may impact sources not directly covered by the new GHG controls. With respect to permitting decisions for other pollutants, EPA instructs applicants and authorities to “consider how the control strategies under consideration may affect GHG emissions,” and certain control technologies may be rejected in part based on their projected contribution to climate change (id. at 42).
As implementation of its GHG regulations draws closer, however, EPA’s efforts are facing serious legal and legislative challenges. Suits pending in the D.C. Circuit seek to overturn several EPA rules regulating GHGs under the Clean Air Act, including the tailoring rule. In the Senate, meanwhile, a legislative proposal would delay EPA’s stationary source regulations for another two years.
November 9, 2010
Governor-elect Andrew Cuomo released a 160-page environmental agenda for New York on Saturday, October 30, three days before he was elected to be New York’s next Governor on January 1st, 2011. The document allows some insight into the vision and priorities of the next administration with regard to the environment.
One of the most significant components of the agenda is an overall vision of promoting and talking about environmental protection in the context of economic development in the State. It emphasizes that “environmental protection can benefit our economy—creating green jobs while reducing pollution …”[1] The environmental agenda, like other parts of Cuomo’s published agenda for reforming New York State, proposes review and reform of the state’s environmental bureaucracy to maximize environmental protection and coordination among agencies, and create cost savings. The Governor-elect would task the state’s Spending and Government Efficiency Commission with this review of existing agencies and procedures.[2]
The document also suggests that Governor-elect Cuomo will be as much about the carrot as the stick when it comes to promoting conservation. He proposes a “Cleaner Greener Communities Competitive Grant Program” to help create incentives for sustainable communities, encourage smart growth, and reduce sprawl. The grants would support innovative comprehensive regional plans which incorporate sustainability, transportation, emissions and efficiency issues into the planning framework.[3] Where the funds for such a grant program will come from is not spelled out.
Cuomo’s environmental agenda supports the continuation of New York’s Brownfield Cleanup Program (“BCP”), including the tax credits component, while streamlining the BCP process to ensure its effective use on those sites that need it most.[4] The document does not address the State’s participation in the Federal Superfund program, from which current Governor David Paterson has proposed to withdraw.
On Marcellus Shale, the Cuomo agenda takes a middle road, stating that “New York State must ensure that, if and when the Shale’s natural gas is obtained, it does not come at the expense of human health or have adverse environmental impacts.”[5] Potential impacts to watersheds are given special mention, suggesting that drilling in the New York City watershed and other watersheds will be given enhanced scrutiny. On another energy-related issue, Cuomo restates a longstanding position that Indian Point nuclear plant be shut down.[6]
Cuomo also proposes a review of the State Environmental Quality Review Act (“SEQRA”) process to expand SEQRA considerations to include environmental justice, and strengthen the current Environmental Justice Policy “so it gives more robust assurance that adequate consideration is given to environmental justice.”[7]
While budget and political realities will no doubt impact Cuomo’s implementation of his agenda, the Governor-elect’s proposed agenda nonetheless provides a window into his environmental policy preferences in advance of his taking office on January 1st. This preview suggests a potential that the new administration will take a broader view of environmental protection that goes beyond regulation to promoting smart growth and sustainable development as part of an overall statewide focus on economic development.
- Download a copy of the agenda here (pdf)
[1] Cuomo 2010, Cleaner Greener NY, at 1 (2010).
[2] Id. at 7.
[3] Id. at 91-92.
[4] Id. at 94.
[5] Id. at 96.
[6] Id. at 95.
[7] Id. at 97-98.
October 20, 2010
On October 14, the Environmental Protection Agency (“EPA”) released a Draft Management Plan for Siting Renewable Energy on Potentially Contaminated Land and Mine Sites. The draft plan is open to public comment through November 30, 2010.
The plan outlines 20 steps that EPA has recently taken or will take over the next two years to promote renewable energy development on contaminated properties. Upcoming steps include new guidance on the siting of such facilities while clean-up is ongoing, the consideration of new tools to address liability concerns related to renewable energy development at contaminated sites, and the incorporation of financial incentives for such redevelopment into existing loan, grant and tax incentive programs.
EPA will also be selecting pilot communities to serve as models for different types of renewable energy development at contaminated facilities. The agency plans to solicit applications for these pilot projects in early 2011.
The draft plan is part of EPA’s ongoing RE-Powering America’s Land initiative, launched two years ago to “identify Brownfields, RCRA, Superfund, landfill and abandoned mine land with wind, solar, biomass and geothermal development potential” and collaborate with public and private stakeholders to encourage such re-development. The initiative has produced maps overlaying EPA-tracked sites in New York with generation and siting potential for wind energy, photovoltaic solar energy, biopower facilities and biorefinery facilities.
September 23, 2010
The past few weeks have seen new developments in EPA’s initiative to study the effects of hydraulic fracturing on public drinking water supplies. Hydraulic fracturing uses high-pressured water, combined with chemicals, to release natural gas present underground in shale formations. The use or proposed use of this process has raised concerns across the country that this process has contaminated, or will contaminate, drinking water supplies.
On September 9, EPA announced that it had issued a voluntary information request to nine natural gas companies, seeking information on the chemical composition of fluids used in the hydraulic fracturing process, data on the impacts of the chemicals on human health and the environment, standard operating procedures at their hydraulic fracturing sites, and the locations of sites where fracturing has been conducted. The request was made in the context of limited public knowledge about the exact composition of hydraulic fracturing fluids; according to the New York Times, “most companies that make the fluids used in hydraulic fracturing have declined to disclose their formulas, arguing that the exact components are trade secrets.” Not surprisingly, industry’s lack of transparency with respect to the composition of hydraulic fracturing fluids has engendered concern, anxiety, or suspicion among advocacy groups and residents of areas affected by hydraulic fracturing.
In its Information Request, EPA seeks the information within thirty days and has indicated that it may treat certain data as Confidential Business Information at a company’s request, protecting such information from public disclosure. Adding teeth to its request, EPA alludes to a potential for litigation should the companies fail to provide a proper response. Industry representatives have indicated that the natural gas companies will cooperate with EPA’s request.
On September 13-14, EPA convened a public meeting in Binghamton, NY to discuss the scope and methods of its hydraulic fracturing study. About 500 people attended, reflecting a high level of concern, from a range of perspectives, about hydraulic fracturing and natural gas development. Although pre-hearing rallies reflected the passion with which people on all sides of the issue view the prospect of natural gas development via hydraulic fracturing, EPA was commended for “running a meeting in a way to keep the discourse civil and the comments, for the most part, on the substance.”
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