Unanimous US Supreme Court Decision Takes a Hard Look at “Critical Habitat”

By Latham & Watkins LLP on February 21, 2019 Posted in Environmental Regulation

The decision gives landowners and developers a powerful tool to protect their interests and raises the bar for future critical habitat designations in unoccupied habitat.

By Janice Schneider, Nikki Buffa, and Brian McCall

The Supreme Court’s unanimous ruling in Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 586 U.S. (2018) has important implications for landowners facing “critical habitat” designations under the Endangered Species Act (ESA) for areas that are unoccupied by listed species. The timing of this decision likely means the US Fish and Wildlife Service (FWS) will incorporate it into forthcoming final regulations the FWS is currently promulgating.

Background

In Weyerhaeuser, the US Supreme Court considered two main questions:

Can critical habitat include areas where the species cannot currently survive?
Is the FWS determination not to exclude a particular piece of land as critical habitat reviewable by a court?

China Issues Draft of Comprehensive Chemical Substances Regulation

By Latham & Watkins LLP on February 14, 2019 Posted in Chemical Regulation, China

China’s MEE is seeking comment on new chemical regulation framework, which includes a comprehensive environmental risk assessment.

Paul A. Davies, Ethan Prall, and R. Andrew Westgate

In January 2019, China’s Ministry of Ecology and Environment (MEE) issued a draft Regulation on Environmental Risk Assessment, and Control of Chemical Substances (the Chemical Substances Regulation or CSR) in conjunction with 20 other ministries and agencies, including the Supreme People’s Court, the National Development and Reform Commission, and the Ministry of Commerce. MEE is seeking comment on the draft regulation through February 20, 2019, which is available in Chinese only.

This draft regulation is significant because it represents China’s first comprehensive regulation of environmental risks from chemical substances, similar to the Toxic Substances Control Act in the United States or the Registration, Evaluation, Authorization, and Restriction of Chemicals Regulation (REACH) in the European Union. In the past, China’s chemical regulations, such as Order 7 issued by the former Ministry of Environmental Protection (also known as China REACH), have been more narrowly focused on requiring the registration of “new chemical substances” and on the import and export of toxic chemicals. As discussed below, the draft CSR incorporates not only most of the existing chemical registration requirements under Order 7, but would also introduce additional requirements creating a broader new chemical regulation framework. Continue Reading

CARB Workshop Previews Upcoming Heavy-Duty Diesel Changes

By Latham & Watkins LLP on February 1, 2019 Posted in Air Quality and Climate Change

CARB continues to drive lower NOx emissions for heavy-duty engines and vehicles on the road.

By Arthur Foerster and Reed McCalib

On January 23, 2019, the California Air Resources Board (CARB) held a public workshop to discuss the agency’s ongoing regulatory emissions overhaul for on-highway, heavy-duty diesel engines and vehicles. Based on the agency’s position that reducing oxides of nitrogen (NOx) from heavy-duty vehicles is necessary to attain air quality standards, CARB staff made clear the agency’s intention to “dramatically lower emissions” and to ensure emissions remain low throughout the vehicles’ operational lives. CARB staff indicated that the agency will work collaboratively with the EPA and its “Cleaner Trucks Initiative” to develop harmonized national requirements. (For a more in-depth look at this initiative, please see Latham’s previous blog post.) Staff stressed, however, that CARB will adopt new, more stringent rules regardless of what EPA does and expects to do so on a more accelerated timeline than EPA. CARB is undertaking what it says is a necessary “multi-pronged holistic approach” and intends to release draft rules later this year on a number of regulatory fronts, including more stringent standards, greater durability, and more testing.

More Stringent Standards

CARB staff reiterated the agency’s intention to lower the NOx emissions standard for new, on-highway heavy-duty diesel engines by as much as 90% below the current standard of 0.2 grams per brake horsepower hour (g/bhp-hr). Although CARB staff have not settled on a specific number, they indicated a target range of 0.015 to 0.035 g/bhp-hr. According to staff, the CARB-funded research being performed by the Southwest Research Institute (SwRI) to assess the feasibility of lower NOx emissions is not complete. The SwRI research results, along with other data such as cost impacts, will determine the new NOx standard expected later this year. Continue Reading

German Government Commission Agrees to Phase Out Coal Power Plants By 2038

By Latham & Watkins LLP on January 30, 2019 Posted in Air Quality and Climate Change, Energy Regulatory, European Environmental and Public Law, Power, Oil, Gas and Minerals, Project Siting and Approval

The Coal Commission’s phase-out proposal includes a €40 billion federal spending package for affected states.

By Jörn Kassow and Patrick Braasch

A German government-appointed body, known colloquially as the “Coal Commission”, has agreed to end coal-fired power generation by 2038. In an effort to meet Germany’s climate goals under the Paris Agreement, the Coal Commission proposes to gradually reduce Germany’s current coal power capacity of 42.6 GW to 30 GW by 2022 and 17 GW in 2030. A review is scheduled in 2032 to decide whether to bring forward the final phase-out from 2038 to 2035.

Coal-burning provided for 40% of Germany’s power mix in 2017, which is well above the EU-28 average of 21% in 2016, and was exceeded only by Bulgaria (45%), Greece (46%), the Czech Republic (54%), and Poland (81%). Coal-fired power plants accounted for 28% of Germany’s total CO2 emissions in 2016, while generating 70% of the energy sector’s total emissions in the same year. Germany will also close its last nuclear plants in 2022, which, as of 2017, still provided for 12% of the power mix. All considered, the country will see a fundamental change in its energy production landscape in the coming years. Continue Reading

Circular Economy and End of Waste Status: French Government Issues Criteria and Procedures

By Latham & Watkins LLP on January 23, 2019 Posted in Chemical Regulation, Contaminated Properties & Waste, European Environmental and Public Law

Waste producers must comply with new criteria and procedures for objects and products to benefit from end of waste status.

By Paul Davies

The French government has developed many measures to foster circular economy approaches. Most recently, a Ministerial Order of 11 December 2018 (Order) sets out criteria and procedures to end the waste status of certain objects and chemical products, to encourage their preparation for re-use.

The French Code of the Environment[i] defines “preparing for re-use” as “checking, cleaning or repairing recovery operations, by which products or components of products that have become waste are prepared so that they can be re-used without any other pre-processing.”

The Order requires that the objects and products meet specific criteria in order to benefit from the end of waste status. The criteria relate to:

The nature of the object or product
Techniques and treatment processes
Qualities and properties of objects and products resulting from such treatments
Contractual conditions subject to which such objects and products will be sold
Operator’s obligations in relation thereto (traceability)

California Court of Appeal Agrees Two Activities Constitute One CEQA Project

By Latham & Watkins LLP on January 16, 2019 Posted in California, CEQA, Environmental Litigation, Environmental Regulation, Project Siting and Approval

CEQA Case Report: Understanding the Judicial Landscape for Development[I]

By Christopher W. Garrett, Daniel Brunton, James Erselius, and Derek Galey

In a published decision issued June 12, 2018, County of Ventura v. City of Moorpark, Case No. B282466, the California Court of Appeal rejected part of the County of Ventura and the City of Fillmore’s (Petitioners’) appeal and affirmed the trial court’s decision that a beach restoration project undertaken by Broad Beach Geologic Hazard Abatement District (BBGHAD) and a related settlement agreement with the City of Moorpark (City) were exempt from CEQA review.

In summary, the court determined:

Two separate activities can constitute one “project” under CEQA so long as those activities serve a single purpose, have the same proponents, and are inextricably linked.
Courts do not balance the policies served by statutory exemptions against the goal of environmental protection because the legislature has already determined that the policy benefits of the exemption outweigh the benefits of environmental review.

The trial court determined that the beach restoration project and the related settlement agreement between BBGHAD and City were a single statutorily exempt project. Petitioners appealed on the grounds that even if the beach restoration was exempt, the settlement represented a separate, non-exempt project that was not properly reviewed under CEQA.

CARB Workshop Will Address Potential Changes to NOx Standards

By Latham & Watkins LLP on January 15, 2019 Posted in Air Quality and Climate Change

The public event marks CARB’s next step to promulgate new, lower NOx standards for heavy-duty engines and vehicles.

By: Arthur Foerster and Reed McCalib

Background

On Wednesday, January 23, 2019, the California Air Resources Board (CARB) will hold a public workshop in Sacramento focusing on potential regulatory changes that would lower oxides of nitrogen (NOx) emissions for new, on-highway heavy-duty vehicles and engines. Members of the public may attend the workshop in person or via webcast. (Event details are included at the end of this article.)

According to the agency’s public notice, CARB staff will discuss potential regulatory updates, challenges, and implementation strategies as the agency pushes for ever-lower emission standards. In particular, staff will discuss durability demonstration requirements, a supplemental certification test cycle for low-load operations, zero emission credits, in-use testing protocols, longer useful life and warranty periods, warranty claim reporting, lower particulate matter (PM) emissions, and NOx emissions tracking. Staff will also provide updates on ongoing low-NOx demonstration projects and will explain next steps in the rulemaking process. Continue Reading

GIS Owners in California Must Comply With SF6 Regulation

By Latham & Watkins LLP on January 11, 2019 Posted in California, Energy Regulatory

Gas-insulated switchgear owners face easy-to-miss, CARB-enforced emissions requirements.

By JP Brisson, Aron Potash, R. Andrew Westgate, Kimberly D. Farbota, and Christopher C. Antonacci

Since 2011, the California Air Resources Board (CARB) has regulated sulfur hexafluoride (SF6) emissions from gas-insulated switchgears (GIS). CARB’s SF6 Regulation applies to all entities that own GIS, including many entities that do not otherwise emit and report greenhouse gas (GHG) emissions such as wind farms, solar parks, and geothermal plants. Accordingly, some companies may not have realized that they are subject to the SF6 requirements. The SF6 Regulation includes emission rate limits, mandatory operating procedures, and recordkeeping and reporting requirements, as well as providing for monetary penalties in the event of a violation.

Background on SF6 Gases

SF6 is used in GIS equipment to protect electrical power plants and distribution systems by insulating circuits and interrupting electric currents. Since the initial use of SF6 in the 1950s, SF6-containing circuit breakers, transformers, switches, fuses, and other equipment have been used regularly because SF6 is non-flammable, non-corrosive, non-toxic, and an effective arc suppressant, which allows SF6 equipment to have a small footprint and be relatively low maintenance. GIS containing SF6 gases are typically found in most if not all substations and at many power generating facilities, including natural gas plants, wind farms, solar parks, and geothermal plants.

Amendments to CEQA Guidelines Now in Effect

By Latham & Watkins LLP on January 10, 2019 Posted in Air Quality and Climate Change, California, CEQA, Environmental Regulation, Project Siting and Approval, Water Quality and Supply

California Natural Resources Agency adopts final amendments to CEQA Guidelines, providing additional clarifying revisions to GHG impacts, baseline, and deferral of mitigation amendments.

By Marc Campopiano, Winston Stromberg, and Samantha Seikkula

The California Office of Administrative Law recently approved a suite of amendments to the CEQA Guidelines, which are now in effect. Latham wrote about these amendments last year, when the Natural Resources Agency began the rulemaking process under the Administrative Procedures Act. During this rulemaking process, the California Natural Resources Agency (Agency) considered comments on the proposed amendments from members of the public, responded to those comments, and made some slight revisions to the amendments. The final adopted text of the amendments is available here.

Relevant revisions to the amendments made during the rulemaking process include:

Section 15064.4 (Greenhouse Gas (GHG) Impacts): The Agency clarified that a project’s incremental contribution to climate change impacts should not be compared to state, national, or global GHG emissions to determine whether the project’s emissions are cumulatively considerable. Further, if using consistency with state goals and policies as a means to determine significance, the lead agency should explain how the project’s emissions are consistent with those goals.
Section 15125 (Baseline): The Agency clarified that the procedural requirement to justify a baseline other than existing conditions does not apply to reliance on historic conditions. Rather, the procedural requirement applies only to use of future conditions as a sole baseline.
Section 15126.4 (Deferral of Mitigation): The Agency proposed to clarify when mitigation may be permissibly deferred until after project approval, consistent with case law. In response to comments, the Agency clarified that if details are deferred, a lead agency must identify at least the types of measures that are known to be feasible and that will achieve an adopted performance standard — rather than simply provide a list of possible mitigation actions that will be considered, analyzed, and potentially incorporated.

Additionally, the Agency’s shift in approach for assessing a project’s potential transportation impacts from Level of Service to Vehicle Miles Traveled will apply prospectively as described in CEQA Guidelines section 15007. A lead agency may elect to be governed by the new Section 15064.3 immediately, but beginning on July 1, 2020, the requirements to analyze Vehicle Miles Traveled will apply statewide.