The Nickel Report

When most Americans think about the traditions of presidential transitions, they recall the oath of office, the prior president and family leaving the White House, the inaugural parade, the balls with their beautiful gowns and sharp tuxedos, and more. What they more than likely don’t think about, much less even know about, are other happenings in the White House and in the agencies that run our government. While the peaceful transfer of power is a hallmark of the American political system, it is not without controversy, particularly where the outgoing president is a member of a different political party with remarkably different political views than the incoming commander in chief.

New lawsuits filed in the US Courts of Appeal are seeking to upend a fundamental tenet of the Clean Air Act (CAA or the Act) Title V operating permit program—i.e., that the program does not itself impose new substantive requirements but rather has the purpose of identifying, in a single document, the CAA requirements that apply to a source. These lawsuits have been filed in the D.C. Circuit, the Fifth Circuit, and the Tenth Circuit challenging EPA orders issued in response to various third-party professional environmental advocacy groups’ requests that EPA object to Title V permits proposed for several industrial facilities in Utah and Texas. In the orders, EPA clarified that the Title V permitting and petition process set forth in 42 U.S.C. § 7661d(b)(2) is not the appropriate forum to second-guess preconstruction authorizations issued under Title I of the Act and incorporated into a facility’s Title V permit. 

A second district court has agreed that challenges to the 2015 Waters of the United States (WOTUS) Rule are likely to succeed on the merits. The US District Court for the Southern District of Georgia issued an order on June 8 enjoining the WOTUS Rule in 11 states. Georgia v. Pruitt, No. 2:15-cv-00079 (S.D. Ga. 2018). The rule was previously enjoined by the US District Court for North Dakota in 13 states. North Dakota v. U.S. EPA, 127 F. Supp. 3d 1047 (D.N.D. 2015). The US Environmental Protection Agency (EPA) and the US Army Corps of Engineers (Corps) (“the Agencies”) recently promulgated a new applicability date for the 2015 WOTUS rule (Applicability Rule), preventing its implementation until February 2020, but there have been several lawsuits challenging the Applicability Rule. Now, regardless of the outcome of challenges to the Applicability Rule, the 2015 Rule cannot be applied in 24 states[1] until a court issues a final decision on the merits, either upholding or invalidating the Rule, or the Agencies finalize a repeal and/or replacement of the 2015 Rule.

The Corps Struggles to Balance Competing Constitutional and Statutory Duties

Federal agencies must often balance competing policy concerns and legal requirements. This process may be difficult and fraught with intense public feedback, and frequently results in litigation. The U.S. Army Corps of Engineers (the Corps) has found itself in the hot seat over how it manages the nation’s rivers, pitting its obligations under the Endangered Species Act (ESA) against private property rights. Litigation in the federal courts may soon determine whether, and if so how, responsible the federal government is for unintentional or incidental flooding when the government manages rivers for the benefit of listed species. These cases also bring to the fore a burning question: When can government agencies be held responsible for natural events? With the increase in climate change-related litigation nationwide, this issue will likely only rise in prominence.

California is considering the first-in-the-nation general industrial stormwater permit incorporating Total Maximum Daily Load (TMDL)-related numeric action levels (TNALs) and numeric effluent limitations (NELs). These new standards have the potential to further ramp up federal Clean Water Act (CWA) citizen suit litigation. Under the State Water Resources Control Board’s (State Board) proposed amendment to its stormwater general industrial permit (IGP), a “Responsible Discharger” whose stormwater discharge exceeds an applicable NEL automatically will be in violation of the IGP. Unless it complies with the permit’s existing exceedance response action process, it also will be in non‑compliance if its discharge exceeds an applicable TNAL.

Recognizing these consequences, and the difficulties some dischargers have complying with existing IGP requirements, the State Board is proposing two alternative compliance options. Touted as an effort to promote green infrastructure and water reuse, these options could revamp how industry manages stormwater. Both alternatives involve capture and reuse of the runoff from the 85th percentile 24-hour storm event, with the difference being the stormwater retention location. Under the “on-site” option, retention occurs at the facility. Under the “off-site” option, retention occurs at the local publicly owned treatment works (POTW).

One of the first lessons that most Superfund practitioners learn is that it is no easy task to prevent EPA from placing a site on the National Priorities List. The NPL is the “list of national priorities among the known or threatened releases of hazardous substances, pollutants or contaminants throughout the United States.”[1] It “contains the most serious uncontrolled or abandoned hazardous waste sites.”[2] There are nearly 1,350 sites on the NPL today. Since the first list was issued in 1980, only 399 – or, on average, ten per year – have been deleted. That is only two per state in a decade (on average). The pace of EPA’s decision-making on proposed deletions is protracted, if not glacial. And looking to the courts for relief from the stigma of having a site on the NPL rarely bears fruit.

It therefore surprised and may even have delighted some practitioners when the DC Circuit decided, in Genuine Parts Company v. EPA, No. 16-1416 (D.C. Cir. May 18, 2018), to overturn EPA’s decision to list the West Vermont Drinking Water Contamination Site on the NPL.

On May 14, 2018, the Department of Energy Office of Electricity Delivery & Energy Reliability released its Multiyear Plan for Energy Sector Cybersecurity. The plan is significantly guided by DOE’s 2006 Roadmap to Secure Control Systems in the Energy Sector and 2011 Roadmap to Achieve Energy Delivery Systems Cybersecurity. Taken together with DOE’s recent announcement creating the new Office of Cybersecurity, Energy Security, and Emergency Response (“CESER”), DOE is clearly asserting its position as the energy sector’s Congressionally-recognized ...

2018 is turning out to be a banner year for nationally applicable developments—both judicial and administrative—with regard to National Ambient Air Quality Standards (“NAAQS” or “Standards”) for ozone. As the year began, EPA was proceeding with implementation of the ozone NAAQS that it set in 1997 and 2008 in accordance with a rule that it had promulgated in 2015 describing requirements for State Implementation Plans (SIPs) and the transition from the 1997 NAAQS to the more stringent 2008 one. 80 Fed. Reg. 12264 (Mar. 6, 2015) (2015 SRR). The Trump administration was reviewing the prior administration’s 2015 decision further tightening the NAAQS to determine whether those more stringent NAAQS should be maintained, modified or reconsidered. To allow the Trump administration to complete that review, the DC Circuit placed in abeyance litigation challenging the 2015 Standards as either too stringent or too lenient. Murray Energy v. EPA, No. 15-1385 (D.C. Cir. Oct. 26, 2015). EPA had designated most of the country attainment/unclassifiable for the 2015 NAAQS, but had not made designations for other areas. 82 Fed. Reg. 54232 (Nov. 16, 2017).

In a decision issued on April 12, 2018, a Fourth Circuit panel held (2-1) that (1) even though a pipeline leak has been repaired and remediation is ongoing under the supervision of the state environmental agency, environmental groups have standing to sue the pipeline owner, and (2) plaintiffs’ allegation that groundwater continues to carry discharged pollutants to jurisdictional waters through a “direct hydrological connection” supports liability under the Clean Water Act.

Read the full report on PipelineLaw.com.

On May 17, 2018, the Federal Energy Regulatory Commission (Commission) held its May 2018 open meeting. Highlights of the meeting include:

PURPA

In his opening remarks, Chairman McIntyre announced that the Commission would soon be turning to a review of its long-standing policies under the Public Utilities Regulatory Policies Act of 1978 (PURPA). He noted that the Commission had initiated a review of these policies in 2015-2016 and had held a technical conference on certain PURPA issues in 2016.  He has directed Commission staff to restart the initiative so the Commission can determine what, if anything, should be done to improve and update the policies.  The other commissioners were supportive of this initiative.  Commissioner Powelson pushed for an expedited review of the PURPA policies, referencing the previously developed record.  Commissioner Glick indicated that any changes to policies should address issues raised not only by industry, but also by qualifying facility developers.  The commissioners also acknowledged that more substantial changes to PURPA would have to be addressed by Congress.