Environmental and Approvals

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By Claudia O’Brien, Bob Wyman, Joel Beauvais, Stacey VanBelleghem, Bridget Reineking, and Kimberly Leefatt

On March 28, 2017, President Donald Trump signed an executive order (EO) directing executive departments and agencies to review regulations that potentially burden the development or use of domestically-produced energy resources. This EO sets the stage for what could become a series of sweeping reversals of the Obama Administration’s greenhouse gas (GHG) reduction and climate change polices. In particular, the order lays the groundwork for reform of the Clean Power Plan (CPP) and the new source pollution standards for new, modified and reconstructed power plants (NSPS).

The issuance of this EO kicks off a long and complex process for EPA to review both the CPP and NSPS, draft and publish proposals to revise or rescind the rules, accept notice and comment on the proposals, address comments on the proposals, and then issue final rules. Regardless of whether EPA proposes to suspend, revise, or rescind the rules, legal challenges are sure to follow. The outcome of these rulemakings and subsequent litigation will be consequential for the future of federal regulation of GHGs under the Clean Air Act (CAA).

By Joshua T. Bledsoe and Max Friedman

Big changes appear to be imminent for California’s Low Carbon Fuel Standard (LCFS).

As discussed in greater detail in our recent post, the LCFS currently is the subject of two interrelated legal challenges commonly known as POET I and POET II. Here we provide an update on recent proceedings before the California Court of Appeal for the Fifth Appellate District (Court of Appeal) in POET I. These proceedings concern the California Air Resources Board’s (ARB) attempts to comply with a peremptory writ of mandate (the Writ) that primarily required ARB to remedy violations of the California Environmental Quality Act (CEQA) that occurred during promulgation of the original LCFS regulation.

On March 20, 2017, three days before oral argument occurred, the Court of Appeal issued a tentative ruling in the POET I Writ appeal. The tentative ruling alerted the parties that the Court of Appeal intended to overturn the Superior Court’s discharge of the Writ and suggested that some or all of the existing LCFS regulatory regime was in jeopardy. The tentative ruling found that ARB failed to comply with the Writ by excluding from its CEQA analysis information relating to nitrogen oxide (NOx) emissions from biodiesel, resulting in the utilization of an improper baseline for measuring NOx emissions. The tentative ruling also found that ARB’s treatment of NOx emissions was not a “good faith” attempt at corrective action because it relied on an objectively unreasonable interpretation of the CEQA term “project.” The Court of Appeal then further underscored its dim view of ARB’s response to the Writ: “ARB’s actions do not appear to be a sincere attempt to provide the public and decision makers with the information required by CEQA and omitted from the earlier documents.”

By Joel Beauvais, Claudia O’Brien, Stacey VanBelleghem and Bridget Reineking

Over the past four decades, compliance with the ozone National Ambient Air Quality Standards (NAAQS) has proven to be among the most costly of Environmental Protection Agency (EPA) regulations. EPA tightened the primary and secondary ozone standards to 70 parts per billion (ppb) in late 2015, which will likely result in more areas of the country being identified as failing to attain the standards. Areas designated “nonattainment” face significant consequences, ranging from regulatory constraints on existing emission sources to expensive emission offset requirements for new or expanded facilities.  

Companies avoid the most rigid requirements and significant costs when the areas in which they operate are designated “attainment.” Companies still have a window of time to engage in EPA’s area designation process and avoid unnecessary nonattainment designations. Even in areas where monitoring data conclusively demonstrates nonattainment, companies can act to mitigate costs and secure operational flexibility. These strategies require engagement at the federal, state and local levels to support adaptable and efficient compliance mechanisms in SIP revisions after the designation process is finalized.

By Joel Beauvais and Claudia O’Brien

President Donald Trump, on February 28, signed an executive order (EO) directing the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (the Corps) to issue a proposed rulemaking for notice and comment to rescind or revise their joint 2015 Clean Water Rule, also known as the Waters of the United States or “WOTUS” rule. The rule was intended to clarify the jurisdictional scope of the Clean Water Act. Shortly after the EO was issued, the EPA and the Corps issued a notice indicating their intent to review and either rescind or revise the rule.

The EO and the agencies’ notice signal a potential move to substantially narrow the jurisdictional scope of the Clean Water Act (CWA). This is a critical issue for many sectors of the economy and environmental protection and has been the subject of uncertainty and litigation since the statute was enacted in 1972 — with the U.S. Supreme Court having issued three major decisions on the subject.

By Joshua T. Bledsoe and Max Friedman

Two related cases, advancing in parallel, have the potential to upend California’s Low Carbon Fuel Standard (LCFS), whether via full suspension of the LCFS or carving out diesel fuels from the deficit and crediting regime.[1]

Both cases involve challenges by POET, LLC (POET), a South Dakota-based ethanol producer, against the LCFS rules adopted by the California Air Resources Board (ARB). ARB first adopted LCFS rules in 2009 and amended them in 2011, but these rules successfully were challenged by POET, leading the California Court of Appeal for the Fifth Appellate District (Court of Appeal) on July 15, 2013, to find deficiencies in ARB’s California Environmental Quality Act (CEQA) review process.  The Court of Appeal issued a peremptory writ of mandate (Writ) in this case (POET I), requiring ARB to remedy legal defects in the initial adoption of the regulation, but opting to leave the LCFS in place while ARB reworked its analysis and repeated the necessary procedural steps and substantive analysis.  Over the next two years, ARB reviewed and revised the LCFS, before re-adopting the regulation on September 25, 2015.  Shortly thereafter, on October 30, 2015, POET once again brought suit in Fresno County Superior Court (Superior Court) to challenge the re-adopted regulations (POET II), arguing that ARB both failed to comply with the Writ issued in POET I and that it violated CEQA, the California Administrative Procedure Act (APA), and the Health & Safety Code.

By John Heintz, Lucas Quass, and Steven Mach

On February 2, 2017, the Los Angeles Regional Water Quality Control Board (the Regional Board) approved a Revised Memorandum of Understanding (the 2017 MOU) between the City of Malibu (the City), the Regional Board, and the State Water Resources Control Board (the State Board) to extend the compliance deadlines for the Los Angeles Region Basin Plan amendment prohibiting new discharges from or construction of septic systems in the Malibu Civic Center area (the Basin Plan Prohibition). The 2017 MOU is the second amendment to an MOU initially entered in 2011[i] between the City and the Regional Board that, among other things, adjusted the timing of compliance with the Basin Plan Prohibition.

Background

On November 5, 2009, the Regional Board passed the Basin Plan Prohibition. The Regional Board justified this controversial prohibition by citing the alleged contribution of on-site wastewater discharges to the impairment of water resources in and around Malibu’s Civic Center. The State Board approved the Regional Board-adopted Basin Plan Prohibition on September 21, 2010, and it became effective in December 2010. In addition to prohibiting the development of any new on-site wastewater disposal systems (OWDSs), the Basin Plan Prohibition requires the phasing-out of discharges from existing OWDSs in the Malibu Civic Center area by November 5, 2015 (for commercial dischargers), or by November 5, 2019 (for residential dischargers).

By Andrea Hogan, Lucas Quass, John Morris and Steven Mach

On January 13, 2017, the US Supreme Court granted certiorari for an appeal that will allow the Court to determine the proper jurisdiction for litigation challenging the Clean Water Rule (the Final Rule).[1] The federal Clean Water Act (CWA) provides for original jurisdiction in the Circuit Courts of Appeal for certain categories of actions taken by the US Environmental Protection Agency (EPA). By accepting review of the appeal, the Court will now decide whether to affirm the Sixth Circuit Court of Appeal’s assertion of original jurisdiction over litigation challenging the Final Rule, and in doing so, the Court will set the stage for consideration of Final Rule litigation on the merits. As a result of the Supreme Court’s grant of certiorari, on January 25, 2017, the Sixth Circuit Court of Appeal granted a motion to hold in abeyance the litigation over the Final Rule until the US Supreme Court reaches a decision regarding jurisdiction.

Clean Water Rule’s Broad Application

EPA and the US Army Corps of Engineers (Corps) jointly issued the Final Rule to define “waters of the United States” (WOTUS), a threshold term that delimits CWA’s scope and application. The Final Rule has broad application. It defines jurisdictional waters not only for Section 404 of the CWA (permitting for dredge and fill operations) but also under Section 303 (addressing water quality standards and maximum daily loads); Section 311 (relating to oil spill prevention and response); Section 401 (concerning state water quality certifications); and Section 402 (establishing the National Pollutant Discharge Elimination System (NPDES) permit program). Critics of the Final Rule argue that it expands federal jurisdiction significantly beyond the bounds of court precedent interpreting the CWA’s statutory mandate. We previously published a Client Alert that discusses the Final Rule’s scope and implications in greater detail.

By Michael Feeley, Winston Stromberg, Ann Claassen, Lucas I. Quass, John Morris, and Samantha Seikkula

On December 12, 2016, EPA published the final Formaldehyde Standards For Composite Wood Products Rule (the Rule) in the Federal Register. The compliance date for most aspects of the Rule is December 12, 2017, with a sell-through provision for wood composite products manufactured or imported prior to that date. The Rule limits formaldehyde emitted into the air from certain composite wood products, which are products made by binding strands, particles, fibers, veneers, or boards of wood together with adhesives.  Domestic and foreign companies operating in the U.S. use composite wood products to manufacture a wide variety of consumer products such as furniture, flooring, cabinets, children’s toys, and more.

EPA promulgated the Rule to implement the 2010 Formaldehyde Standards for Composite Wood Products Act (the Act), which Congress enacted as Title VI of the Toxic Substances Control Act (TSCA). The Act established emission standards that mirror the California Air Resource Board’s (CARB) Phase II standards for composite wood products—including hardwood plywood (HWPW), medium-density fiberwood (MDF), and particleboard (PB).[1]  Similar to the California requirements, the new federal Rule regulates composite wood products from initial manufacture to final sale by (1) imposing emissions restrictions; (2) regulating product labeling, chain of custody, non-compliant product sell-through, recordkeeping and enforcement; and (3) requiring certification by EPA-approved third-party certifiers (TPC) that conduct quality assurance activities, emissions testing, inspections and auditing services.

By Sara Orr, Jennifer Roy and Francesca Bochner

On December 14, 2016, the US Fish and Wildlife Service (FWS) finalized its proposed revisions to the Eagle Rule (Final Rule) and released its Record of Decision (ROD). The Final Rule allows companies and others to obtain 30-year incidental take permits under the Bald and Golden Eagle Protection Act of 1940 (the Act) in exchange for committing to conservation measures designed to reduce impacts to eagles.

As discussed in our previous articles (here and here), this is FWS’ second attempt at revising the Eagle Rule to allow for 30-year permit terms. The draft version of the revisions and the Draft Programmatic Environmental Impact Statement (DPEIS) were originally released on May 2, 2016. FWS accepted public comments on the proposed revisions and DPEIS until July 5, 2016, receiving over 700 comments from other agencies, public interest groups, industry organizations, and private citizens.

By Sara Orr, Jennifer Roy and Francesca Bochner

On July 5, 2016, the public comment period closed for the US Fish and Wildlife Service’s (FWS) proposed revisions to the rules authorizing eagle take permits under the Bald and Golden Eagle Protection Act (Eagle Act) and accompanying Draft Programmatic Environmental Impact Statement (PEIS), paving the way for FWS to complete and release a final rule, possibly as early as the end of this year.

FWS originally released the revised proposed rules on May 6, 2016, as discussed more fully in our previous post. FWS received over 700 comments on the proposed revisions and Draft PEIS from other agencies, public interest groups, industry organizations, and private citizens.