The Nickel Report

On December 20, 2019, the Supreme Court of The Netherlands ruled in a climate case brought against the state by Urgenda, a non-governmental organization for “a fast transition towards a sustainable society.” The Court of Appeal and the Court of The Hague had previously ruled on Urgenda's claims. In both instances, the courts granted Urgenda's claim that the Dutch state should reduce emissions of CO2 from its territory by at least 25% by the end of 2020. The Supreme Court rejected the state’s appeal and confirmed the ruling.

On January 22, 2020, the Texas Senate Committees on Natural Resources and Economic Development and Water and Rural Affairs (Senate Committees) held a joint hearing to consider Lt. Governor Dan Patrick’s 2019 interim legislative charge related to one of the most pressing matters facing the state—future water supply issues. This interim charge requires that these legislative committees make recommendations to promote the state’s water supply, including the development of new sources. The recommendations made will be the subject of consideration when the Texas Legislature reconvenes in 2021 and will inform future legislative initiatives. While a broad range of water supply topics was discussed during the hearing, notably, the subject of produced water, including opportunities for reuse within and outside the oil field, continues to be a focal point under review by state policymakers.

Grocery shopping, you stand in the dairy section. The milk in front is dated three days out, but you see the milk toward the back is dated ten days out. You push aside the “three-day” milk and grab a half-gallon of the organic, one-percent “ten-day” milk. You may have just contributed to “food waste.” If food waste were a country, it would be the third largest source of greenhouse gas (GHG) emissions, behind only China and the United States.

While food waste has been an issue for some time (the statistic above has been circulating since at least 2011), the last 18 months have seen the United States government taking a more active role in the subject. In October 2018, the United States Environmental Protection Agency (EPA), United States Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA), (collectively, the Agencies) signed a formal agreement increasing their collaboration and coordination regarding the reduction of food waste as part of a newly announced Winning on Reducing Food Waste initiative (Federal Agreement).

How can sitting still in the Northeast potentially land you in a world of trouble under the Federal Clean Air Act (CAA) and corresponding state laws? Quite easily, if you happen to be in or leave a vehicle with its engine on and the vehicle itself is not in motion for more than a few minutes. That is the definition of “unnecessary vehicle idling” in many jurisdictions.

Across the Northeast and elsewhere, unnecessary vehicle idling is, subject to certain nuances and exceptions, generally prohibited. Recently, violators have come under attack by non-governmental organizations. State penalties vary, but the potential exposure can be severe, especially when the statutory maximum available penalties are calculated pursuant to the Federal CAA and compounded on a per-violation/per-day basis. Accordingly, owners and operators of all forms of trucking and transit companies should not sit still and should take proactive measures to educate or reeducate vehicle schedulers and operators alike on these anti-idling requirements.

Over the last decade, phase one of the Clean Air Act’s regional haze program cost companies (primarily electric generating companies) hundreds of millions of dollars in compliance costs and caused the early closure of a number of facilities. The program is just now entering the initial stages of its second planning period, with major implementation activities expected over the next few years. Unsuspecting companies are finding themselves the targets of the program’s requirements for the first time. In states that have taken early action—Arizona, New Mexico, North Dakota, Oregon and Washington—there has been a shift in attention from older power plants to oil and gas operations and manufacturing facilities in the pulp and paper, cement, and minerals sectors, among others. Even companies that have been through this regulatory process before are facing difficult new questions due to major rule changes enacted in 2017, changes to guidance and key technical documents, and a new focus on statutory provisions addressing “reasonable progress” that were not often used in the past. Hunton Andrews Kurth LLP partner Aaron Flynn has assisted numerous clients in dealing with regional haze issues. In this video, partner Allison Wood interviews Aaron regarding the recent developments in the regional haze program and regarding how companies can best position themselves as states and EPA decide on the next round of emission control requirements.

Since the first Gulf of Mexico rig was installed in 1947, over 12,000 offshore oil and gas platforms have been installed globally. A 2016 study forecasts 600 will require decommissioning by 2021 and 2,000 more by 2040 at a cost of US$210 billion. Many newer platforms are sited in deeper waters, facing higher decommissioning costs and complexity.

The 1958 UN Convention on the Continental Shelf and 1972 London Convention broadly prohibited ocean “dumping.” Subsequent frameworks recognize exceptions permitting in situ offshore structure decommissioning consistent with internationally recognized standards. The 1982 UN Convention on the Law of the Sea (UNCLOS), for example, requires member states adopt rules no less stringent than the London Protocol, amending the original Convention to allow deliberate placement of subsea structures in defined circumstances. Thus, in situ offshore platform decommissioning has been recognized as conforming with governing treaties and legal frameworks.

An independent panel of academics, engineers and other experts, in November 2019, released a draft set of international standards for tailings storage facilities (TSF). During mining operations, ore is reduced into sand-sized particles and mixed with water before the valuable minerals are removed and the remaining milled rock slurry—called tailings—flows to the TSF, an engineered impoundment. It is estimated there are over 3,500 TSFs globally.

The driver for these draft international standards is two recent catastrophic failures of TSFs in Brazil. In January, a TSF owned and operated by Vale in the state of Minas Gerais, near Brumadinho, collapsed, sending a tidal wave of mid and other debris downstream that killed over 250 people. Another TSF owned and operated by Samarco failed in Minas Gerais at Mariana in November 2015, killing 19 people and spreading pollutants over 400 miles of surface waters, eventually reaching the Atlantic Ocean.

The reach of the CWA is “notoriously unclear.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (Alito, J., concurring). It can be difficult for a landowner to understand whether wetlands or a small creek on his or her parcel, for example, are federal waters that require a Clean Water Act (CWA) permit before the landowner can begin work to build a home, develop the property, or cultivate the land. Last week, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) (together, the Agencies) issued a new, long-awaited final rule, titled the “Navigable Waters Protection Rule,” which seeks to streamline and clarify the geographic scope of federal CWA jurisdiction.

On January 9, 2020, the Council on Environmental Quality (CEQ) released its highly anticipated proposed rule to improve its National Environmental Policy Act (NEPA) regulations. The proposed changes would be the first comprehensive amendment of the NEPA regulations since their original publication in 1978. CEQ’s proposed changes are designed to streamline and speed the NEPA review process, clarify important NEPA concepts, and codify key guidance and case law. CEQ’s Proposal is informed by comments it received on last year’s Advanced Notice of Proposed Rulemaking.

NEPA requires that federal agencies analyze the environmental effects of their proposed federal actions. This means that virtually any project that requires a federal permit or authorization could be required to undergo a NEPA review. Development of broadband infrastructure, roads, bridges, oil and gas pipelines, and renewable energy facilities are just a few examples of the types of activities that could trigger NEPA. A NEPA review can take significant agency and applicant resources, can substantially delay permits and can provide a basis for a federal court challenge to the project.

Companies that manufacture or import products containing one or more of 20 common chemicals may soon be required to disclose those activities and pay fees to offset the United States Environmental Protection Agency’s (EPA) review of those chemicals under the Toxic Substances Control Act (TSCA). In December 2019, EPA finalized its list of 20 high-priority chemicals for risk evaluation and potential regulation under TSCA:

• Formaldehyde, a chemical commonly used in building products and as a preservative;
• Five phthalates used as plasticizers in products like plastic pipes, toys, food packaging, cosmetics and medical/dental products (BBP, DBP, DEHP, DIBP and DCHP) and one chemical used to make phthalates (phthalic anhydride);
• Three flame retardants (TBBPA, TCEP and TPP) and a chemical sometimes used in the manufacture of flame retardants and fire extinguishers (ethylene dibromide);
• A fragrance additive found in perfumes, cosmetics and other consumer products (HHCB, also known as galaxolide);
• Seven chlorinated solvents found in products like cleaning solutions, paint thinners and glues (1,1-dichloroethane, 1,2-dichloroethane, 1,2-dichloropropane, o-dichlorobenzene, p-dichlorobenzene, trans-1,2-dichloroethylene and 1,1,2-trichloroethane); and
• A chemical used to manufacture synthetic rubber (1,3-butadiene).