29 July 2019

Sidley Environmental Trends

Topics discussed this week include:

  • Interest groups kick off challenges to EPA’s Affordable Clean Energy rule
  • D.C. Circuit upholds EPA decision not to impose new financial assurance requirements on hardrock mining operators
  • Fourth Circuit vacates Atlantic Coast Pipeline permit
  • EPA declines to ban the pesticide chlorpyrifos
  • Maryland high court holds that state agency supersedes county zoning boards on solar zoning

Interest groups kick off challenges to EPA’s Affordable Clean Energy rule. On July 8, the American Lung Association and the American Public Health Association filed a petition in the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) for review of the Environmental Protection Agency’s Affordable Clean Energy (ACE) rule under the Clean Air Act (CAA). As we previously reported, Environmental Protection Agency (EPA) has recently taken three steps to address greenhouse gas emissions (GHGs) from existing fossil-fuel-fired electricity generating units (EGUs) — (1) repealing the Clean Power Plan (CPP) promulgated under the Obama administration, (2) promulgating the ACE rule to address GHGs from coal-fired EGUs and (3) promulgating implementing regulations designed to guide states in developing their own GHG emissions limits for existing sources. The CPP had taken a “beyond the fenceline” approach, which sought to require regulated sources to implement a “best system of emissions reduction” (BESR) that looked beyond those technologies that could be implemented at the facility itself. In ACE, the EPA has taken the opposite approach, applying an “inside the fenceline” interpretation of the CAA that would require operators to focus on emission controls that can implemented at their individual sources in implementing BESR. Coming the same day as EPA published its three rules in the Federal Register, the interest groups’ petition may be the first of many legal challenges to ACE.

D.C. Circuit upholds EPA decision not to impose new financial assurance requirements on hardrock mining operators. On July 19, the D.C. Circuit held that the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) does not require EPA to impose financial assurance requirements on hardrock mining operators. In Idaho Conservation League v. Wheeler, petitioners sought review of EPA’s 2018 decision not to require such financial assurance. As we have explained, CERCLA requires EPA to promulgate rules for certain classes of facilities to “establish and maintain evidence of financial responsibility.” The purpose of this provision is to limit the need to use CERCLA funds for any future remediation that might be necessary. In declining to require financial assurances for hardrock mining operations, EPA explained that existing federal and state requirements adequately ensured that hardrock mining operators were financially viable, reducing any risk that the federal government would have to use CERCLA funds to remediate hardrock mining sites. Several environmental groups petitioned for review. The petitioners asserted that CERCLA required EPA to consider the potential risks to human health and the environment in determining whether to promulgate financial assurance requirements. EPA responded that the agency need only consider financial risks and that any such financial risks would be addressed by separate federal and state requirements on hardrock mining operators. The D.C. Circuit deferred to EPA’s interpretation and declined to require EPA to issue financial assurance requirements.

Fourth Circuit vacates Atlantic Coast Pipeline permit. On July 26, the U.S. Court of Appeals for the Fourth Circuit vacated a permit issued to developers of the Atlantic Coast Pipeline — a proposed 600-mile pipeline between West Virginia and North Carolina — by the Fish and Wildlife Service (FWS) under the Endangered Species Act (ESA). In Defenders of Wildlife v. U.S. Department of the Interior, petitioners sought review of the agency’s decision to grant the permit, arguing that it was arbitrary and capricious. Under the ESA, FWS is required to consider whether a proposal may jeopardize certain endangered species. When a project might lead to the incidental taking (i.e., killing or harming) of members of that species, the agency is required to set limits on the number of each species that the project might take. Here, the FWS issued a report setting incidental take limits for the Atlantic Coast Pipeline project. Petitioners challenged the agency’s limits, however, asserting that FWS’ assumptions in reaching those limits were flawed, and the Fourth Circuit agreed, finding that the FWS’ take limits were arbitrary and capricious.

EPA declines to ban the pesticide chlorpyrifos. On July 18, EPA announced its decision not to ban the pesticide chlorpyrifos. As we reported in May, California banned chlorpyrifos, and a lawsuit in the U.S. Court of Appeals for the Ninth Circuit sought to force EPA to act on a longstanding petition to do the same at a national level. Other states — notably Hawaii and New York — have also taken action to ban the pesticide. In its denial notice, EPA explained that it had concluded that the petition to ban chlorpyrifos was not adequately “supported by valid, complete, and reliable evidence.” Nonetheless, EPA explained that it will continue to study the pesticide as part of its registration review.

Maryland high court holds that state agency supersedes county zoning boards on solar zoning. On July 15, the Maryland Court of Appeals held that a state agency — the Public Service Commission (PSC) — has the final say on the location of solar power projects instead of local zoning commissions. In Board of County Commissioners of Washington County, Maryland v. Perennial Solar, LLC, a solar energy company questioned whether a county zoning board had the final say over its solar project. Initially, the company sought (and received) a variance from the zoning board, only to face a judicial challenge from neighboring landowners. Rather than seek to affirm the zoning board’s decision, the solar energy company argued that the court lacked jurisdiction over the neighboring landowners’ challenge because the PSC’s decision to permit the project preempted any decision by the zoning board. The trial court agreed that the PSC’s decision preempted any action by the zoning board, and the Court of Special Appeals affirmed. The county sought certiorari on the question of whether state law preempted local zoning authority with respect to solar energy generating systems. The Court of Appeals unanimously affirmed the lower court’s decision, effectively placing decisions on the location of solar projects in the hands of the PSC.

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