Sidley Environmental Trends

Topics discussed this week include:

  • “Exceptional events” rule upheld.
  • New York City climate change tort suit dismissed.
  • Courts of appeal rule on pipeline projects.
  • EPA revises coal ash disposal rules.
  • BLM announces end to compensatory mitigation requirements.
  • Environmental group appeals stay of 2015 Waters of the U.S. Rule.

“Exceptional events” rule upheld. On July 20, the U.S. Court of Appeals for the District of Columbia Circuit rejected environmental groups’ challenge to an EPA rule allowing exemptions for emissions from natural events when determining compliance with National Ambient Air Quality Standards (NAAQS) for particulate matter and ozone. The environmental groups claimed that EPA had improperly defined “exceptional events” and illegally excluded man-made emissions. According to the Petitioners, many of the rule’s exemptions are not “natural,” creating a “significant loophole” exempting, among other things, dust from roads and forest fires caused by human activity. Congress amended the Clean Air Act in 2005, requiring EPA to issue new regulations accounting for air emissions from natural events. EPA issued regulations addressing exceptional events in 2007, but then amended the rules in 2016 to exclude “reasonably controlled” man-made emissions from the NAAQS, leading to the environmental groups’ petition for review. The D.C. Circuit, however, found that EPA reasonably included exceptional events where both humans and nature contribute to their cause, such as roadway dust, so long as reasonable efforts are used to control the cause.

New York City climate change tort suit dismissed. A federal court has dismissed New York City’s public nuisance lawsuit against five major oil companies alleging that their marketing of petroleum products are responsible for the city’s current and future climate change damages. In its July 19 ruling, the court held that the question of what to do about global climate change is one for the political branches, not the courts. The court also rejected the City’s argument that it was only pursuing a public nuisance claim against the oil companies’ introduction of petroleum products into commerce, finding that the suit’s claim for climate change damages could only arise from greenhouse gas emissions, not merely marketing a product. As such, since greenhouse gas emissions cross state boundaries, the City’s public nuisance claim was necessarily one of federal common law. Thus, since the Clean Air Act speaks “directly to the question” of how domestic greenhouse gas emissions are regulated, the City’s federal common law tort suit was displaced. New York City has filed a notice of appeal of the decision to the Second Circuit.

Courts of appeal rule on pipeline projects. In decisions issued on July 27, two U.S. Courts of Appeal have ruled on challenges by opponents to pipelines designed to serve the east coast with important natural gas fuel supply. In City of Boston Delegation v. Federal Energy Regulatory Commission, the D.C. Circuit removed a hurdle to an Algonquin project to upgrade its pipeline system, finding the Commission had properly conducted its environmental review of the project under the National Environmental Policy Act (NEPA). By contrast, in Sierra Club v. U.S. Forest Service, which is one of several court proceedings related to the Mountain Valley Pipeline project, the Fourth Circuit held the Forest Service’s decision to amend the relevant resource management plan failed to comply with NEPA and the National Forest Management Act — and a Bureau of Land Management right-of-way decision did not comply with the Mineral Leasing Act. The court remanded the case back to the agencies for further proceedings.

EPA revises coal ash disposal rules. In a rule published July 30, EPA began what will be a long process to revise standards for coal ash disposal under the Resource Conservation and Recovery Act by promulgating the first of a series of expected revisions to EPA’s 2015 Coal Combustion Residuals (CCR) Rule. The rulemakings will bring the pre-existing CCR Rule in line with the 2016 Water Infrastructure Improvements for the Nation (WIIN) Act, but these revisions are only “part one, phase one” of the process. The WIIN Act ordered EPA to alter the original scheme of coal ash regulation that established a nationwide policy enforced through citizen suits. EPA proposed a series of changes to the program but only finalized four aspects of the proposal: (1) an 18-month delay of closure actions for unlined sites; (2) a groundwater monitoring waiver program for operators that establish that pollutants cannot seep into surface waters or sources of drinking water; (3) health-based standards for cobalt, lead, lithium and molybdenum; and (4) allowing states with an EPA-approved permitting program to certify facility compliance. The agency may finalize the remaining revisions in two or more future rulemakings. EPA stated that, while it is still considering many technical issues related to the proposed rule, it proceeded with “part one, phase one” because operators needed more time to identify ash disposal sites.

BLM announces end to compensatory mitigation requirements. The U.S. Bureau of Land Management (BLM) issued a guidance memorandum announcing that it will no longer require offsite compensatory mitigation for the approval of projects on federal public lands. Project proponents may still offer voluntary compensatory mitigation but BLM may not “explicitly or implicitly suggest” that mitigation is required for project approval. Instead, BLM will focus on ensuring environmental protections at the project site. BLM stated that the Federal Land Policy and Management Act does not authorize BLM’s historic compensatory mitigation practices and cited a 1995 internal legal analysis that compared the practice to “thinly veiled blackmail” which was “offensive to fundamental notions of fairness and administrative law.” The memo explained that BLM’s compensatory mitigation practices have, at times, lacked any clear nexus between the mitigation and the public lands at issue but that project proponents had no means to resist demands for compensatory mitigation. The memo does not effect compensatory mitigation requirements by other agencies, such as the U.S. Army Corps of Engineers.

Environmental group appeals stay of 2015 Waters of the U.S. Rule. The Southern Environmental Law Center (SELC) appealed to the Eleventh Circuit a Southern District of Georgia ruling that enjoined the Clean Water Rule (2015 Rule), a 2015 rulemaking by EPA and the U.S. Army Corps of Engineers (Corps) re-defining “Waters of the United States” under the Clean Water Act. Several states challenged the 2015 Rule and the court’s injunction applies to each of the petitioning States: Alabama, Florida, Georgia, Indiana, Kansas, Kentucky, North Carolina, South Carolina, Utah, West Virginia and Wisconsin. SELC intervened in the litigation, arguing that the 2015 Rule is necessary to protect waters and wetlands under the Clean Water Act. The district court, however, agreed with the state petitioners in finding that they were substantially likely to demonstrate that the 2015 Rule exceeded EPA’s authority. Even without the court’s injunction, however, the 2015 Rule will not take effect in any state as EPA has delayed its effective date until 2020. Environmental groups are challenging the regulation delaying the effective date in New York, South Carolina and Washington federal district courts. The United States is not appealing the Georgia district court’s injunction. Instead, it has argued that courts should defer ruling on challenges to the 2015 Rule until EPA and the Corps can finish their reconsideration process.