19 September 2017

Sidley Environmental Trends

Topics discussed this week include:

  • Environmental groups and attorneys general challenge delay of civil penalty increases for automakers.
  • Interior seeks to streamline environmental impact statements.
  • Landowner suit claims FERC eminent domain powers are unconstitutional.
  • EPA will reconsider coal ash disposal rule.
  • EPA postpones compliance with power plant effluent limitations.
  • Environmental groups threaten suit to compel oil and gas methane regulations.

Environmental groups and attorneys general challenge delay of civil penalty increases for automakers. A coalition of environmental groups and five state attorneys general filed petitions for review in the Second Circuit of a July 2017 decision by the National Highway Traffic Safety Administration (NHTSA) to indefinitely stay an increase in civil penalties pending reconsideration. The rule under reconsideration would nearly triple penalties for automakers that fail to meet corporate average fuel economy (CAFE) standards, raising them from $5.50 for every tenth of a mile below the standard to $14. NHTSA initially promulgated the increase in response to the 2015 Federal Civil Penalties Inflation Adjustment Act. The current civil penalty was first promulgated in 1997. Automakers petitioned NHTSA to reconsider the rule, arguing that inflation was incorrectly calculated and that some automakers will not be able to comply with the 2016 and 2017 standards without carrying over credits from earlier years. Afterward, the automakers estimated that the industry could be hit with as much as $1 billion in civil penalties per year.

Interior seeks to streamline environmental impact statements. An internal Department of Interior (Interior) memorandum from Deputy Secretary David Bernhardt informed employees that all environmental impact statements (EIS) created under the National Environmental Policy Act (NEPA) shall not exceed 150 pages, excluding appendices. It recommends that environmental reviews stick to core issues and avoid “amassing unnecessary detail.” Where projects are “unusually complex,” they may be up to 300 pages, but approvals from high-level managers will be required. The memorandum also establishes a “target” of one year to complete an EIS. The memorandum is in line with a series of Trump administration executive orders and other policy statements seeking to expedite environmental and other permitting reviews for infrastructure projects. Restricting page limits, however, carries some legal risk. When NEPA was first implemented during the 1970s, an EIS could generally be under 100 pages. Since then, regulations and courts have dramatically expanded the environmental issues that lead agencies must frequently review. Today, when an EIS is challenged in court, both agencies and project sponsors cite to the hundreds or even thousands of pages of environmental analysis in an EIS as evidence that the agency considered all of the relevant issues.

Landowner suit claims FERC eminent domain powers are unconstitutional. Landowners living near the routes of two planned pipelines filed suit in the D.C. Circuit arguing that the Federal Energy Regulatory Commission (FERC) allows pipelines to unconstitutionally use eminent domain for land seizures. They claim that FERC’s process for obtaining a Certificate of Public Convenience and Necessity never requires a determination that a pipeline would serve a “public use,” a constitutional prerequisite for authorizing the use of eminent domain. The suit also argues that the “public convenience and necessity” standard is too lenient to establish a “public use” and that neither the Constitution nor Congress envisioned such delegation of eminent domain powers to private companies. Although the plaintiffs own lands near the routes of the Atlantic Coast Pipeline and Mountain Valley Pipeline, neither of which has yet to receive a Certificate of Public Convenience and Necessity, the lead plaintiff is Bold Alliance, a Nebraska-based environmental group created to oppose the Keystone XL pipeline.

EPA will reconsider coal ash disposal rule. In a letter addressed to the Utility Solid Waste Activities Group (USWAG) and AES Puerto Rico, EPA Administrator Scott Pruitt stated that he will grant their petitions for reconsideration of 2015 regulations governing coal ash disposal and storage. Although Administrator Pruitt did not identify what aspects of the regulations will be reconsidered, a subsequent EPA press release stated that changes to coal ash regulation through the Water Infrastructure for Improvements to the Nation Act played a role in granting the petitions. Any changes to the regulations will have to be proposed through notice-and-comment rulemaking. The Department of Justice revealed the intention to reconsider the regulations in a filing to the D.C. Circuit, which is hearing challenges to the rules by USWAG and AES Puerto Rico as well as environmental groups. The United States is seeking to postpone oral arguments in that case and to put the case in abeyance during the reconsideration process.

EPA postpones compliance with power plant effluent limitations. Electricity generating plants will have an additional two years to comply with 2015 effluent limitation guidelines governing metal discharges in wastewater. The EPA notice, citing new information that was not in the original rulemaking record, gives plant owners until November 2020 to implement more stringent requirements based on revised best available technology and pretreatment standards for bottom ash transport water and flue gas desulfurization wastewater. The notice stated that, after EPA issued the 2015 guidelines, additional information called into question the costs and technical ability of plants to comply with the standards. Any substantive revisions to the standards would require an additional notice-and-comment rulemaking. Several industry groups and individual companies are challenging the 2015 rule in the Fifth Circuit. The court has been holding those challenges in abeyance since last month.

Environmental groups threaten suit to compel oil and gas methane regulations. Seven groups filed a notice of intent to sue EPA if it does not issue new regulations to limit methane emissions from existing oil and gas operations. The letter cites EPA’s 2015 oil and gas methane regulations for new and reconstructed sources as triggering a mandatory duty to regulate the same emissions from existing sources. EPA, however, is reconsidering the 2015 rules, has already proposed to extend their compliance dates by two years and withdrew its information collection requests to gather data for existing source regulations. Despite withdrawing the information requests, the groups claim that EPA has more than enough data and several white papers to begin work on new regulations. A group of state attorneys general filed a similar notice and threat of suit in June.

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