Environmental Law

An Injunction in the Des Moines Water Works Lawsuit Won’t Hurt Farmers, Here’s Why Not

September 15, 2015
Environmental Law, Food and Agriculture

James Meinert, MJLST Lead Managing Editor

Last spring, the public water utility for the Des Moines, Iowa metro area filed suit in federal court alleging that agricultural drainage districts are emitting nitrates to the Raccoon River in violation of the Clean Water Act (CWA). The utility’s remedy under the citizen suit provision of the CWA would be an injunction; and in the alternative, the utility’s associated common law claims could yield injunctive relief and damages (The utility’s private nuisance claim in particular seems likely to survive pre-trial dispositive motions, if not win outright at trial, as Iowa Code § 657.2(4) makes it a nuisance to “render[] unwholesome . . . the water of any river . . . to the injury or prejudice of others.”). Most commentators have focused on the novel CWA claim, that nitrate pollution flowing from tile drain outlets is point source pollution and thus subject to NPDES permitting just like a factory outfall. If successful, the CWA claim would categorize nitrate pollution from tile drains as a third type of flow off agricultural fields that is separate from otherwise exempt “agricultural stormwater” and “return flows from irrigated agriculture” (33 U.S.C. § 1362(14)).

The utility has been criticized by the Governor of Iowa, State senators, and farming associations, for not collaborating with the upstream farming communities, and for not waiting to see if they State’s two year old nutrient reduction strategy will lead to lower pollution over time. Is this a real dichotomy—suing versus working collaboratively?

The CWA has never had a strong regulatory regime for nonpoint source pollution. Section 303 says that “States shall” complete a number of planning activities: first, decide what uses each water should have (wildlife habitat, recreation, drinking water, etc.); then set water quality standards protective of those uses; then maintain lists of waters impaired under these standards; and finally calculate total maximum daily loads (TMDLs) the impaired waters could receive and still be clean enough for their use (33 U.S.C. § 1313(d)). There is no actual implementation or regulatory requirement for nonpoint sources. After the TMDL, there are federal grants to identify best management practices, and more grants for parties who volunteer to implement the identified activities. These are in addition to grant money farmers could receive from USDA to implement similar practices through EQIP or CRP contracts, but all of the implementation measures are voluntary.

Iowa has largely completed the planning steps, the Raccoon River has TMDLs for nitrates, and specifically tailored best management practices for the watershed, but traditionally Iowa has not spent its federal grants directly at pollution on farm fields, but rather on broader projects like a K-12 state-wide education program to foster a “culture of conservation,” or creating wetlands areas upstream of lakes to mitigating silting and nutrient-based algae blooms.

There is an entire sector of Iowa’s economy surrounding the study and development of agricultural practices, however, there has been little governmental urgency in directing resources towards implementation of agricultural conservation practices for water quality improvement. In 2010, Iowa voters approved a constitutional amendment to create a 3/8ths of one percent state sales tax to fund water quality initiatives and to protect natural areas. However, the State legislature has yet to collect any revenue through the tax. Iowa even has its own grant funding program to pay farmers to implement water quality practices under the nutrient reduction strategy. But Governor Branstad has vetoed attempts by the legislature to fund those programs, last year vetoing the $22.4 million the Iowa house and Iowa senate agreed to appropriate for water quality initiatives.

In the world of Clean Water Act regulation of nonpoint source pollution, a lawsuit is the only way to get everyone to the table to get something done. In the 1980s and 1990s, most states completely ignored the impaired waters lists and TMDL requirements until citizens filed lawsuits in 35 states arguing progress was so slow that States and EPA had violated duties under the act. In general, courts held a duty was breeched only if the States and EPA truly did nothing, a low standard to meet, but nonetheless, EPA settled most of the suits and entered court-administered consent decrees to promulgate tens of thousands of TMDLs across the country. In the DMWW suit, the utility asks the court to “frame an injunction that permits sufficient flexibility for the Drainage Districts to comply with the injunction without undertaking an unreasonable burden.” Under such a request, the parties would be negotiating a binding timeline for farmers to take advantage of otherwise voluntary measures. If Governor Branstand doesn’t veto the State legislature’s appropriation for water quality grants this coming year farmers could implement best practices on the taxpayer’s dime, something Iowa voters asked for years ago. The utility could try for specific requirements like that all landowners physically abutting the Raccoon River make every effort to enroll in state and federal grant programs to conserve land and improve water quality. But whether the requirements are buffer strips funded by USDA Conservation Reserve Program contracts, or best practices from Iowa’s nutrient reduction strategy, that’s for the utility and farmers to negotiate in settlement conference.

Awaiting an Important Decision on the Gulf of New Mexico “Dead Zone” Lawsuit

September 5, 2015
Environment, Environmental Law, EPA

Allison Kvien, MJLST Managing Editor

In 2013, the U.S. Environmental Protection Agency was ordered to set limits on nitrogen and phosphorous levels in U.S. waterways. These nutrients contribute to the loss of oxygen and cause what is called hypoxia to occur in the water, killing marine life. This year, the “dead zone” in the Gulf is larger than Connecticut and Rhode Island combined. While this is larger than average, it is not a record. The oxygen levels are so low in this zone that it was reported that even starfish are suffocating.

An appeals court recently decided that the district court should determine, based on the Clean Water Act (CWA), whether the EPA gave adequate reasons for its refusal to set limits on the nutrients in U.S. waterways. Environmental groups, such as the NRDC, are optimistic that the original ruling requiring the EPA to set nutrient limits will be reaffirmed by the district court.

This CWA ruling is analogous to the 2007 Supreme Court Clean Air Act (CAA) case, Massachusetts v. EPA, which ruled that the EPA must have good reasons, based on the CAA, for refusing to regulate greenhouse gases (GHGs). The Supreme Court found that the EPA’s rationale for not regulating GHGs was inadequate and required the EPA to come back with a reasonable basis for not regulating GHGs in order to avoid being forced to regulate GHGs.

If the outcome of this CWA lawsuit is that the EPA is required to regulate nutrients causing the enormous hypoxia zone, the EPA will embark on a hugely collaborative journey to set appropriate limits for these nutrients all over the country. For instance, the NRDC reports that Chicago, over one thousand miles away from the Gulf, was found to be the single largest contributor to the “dead zone” in the Gulf.

Recent Developments Affecting the “Fracking” Industry

February 11, 2015
Environment, Environmental Law

Neal Rasmussen, MJLST Staff Member

In “Notes from Underground: Hydraulic Fracturing in the Marcellus Shale” from Volume 12, Issue 2 of the Minnesota Journal of Law, Science & Technology, Joseph Dammel discussed the then current state of hydraulic fracturing (“fracking”) and offered various “proposals that protect public concerns and bolster private interests.” Since publication of this Note in 2011, there have been major changes in the hydraulic fracturing industry as more states and cities begin to question if the reward is worth the risk.

Since 2011, required disclosures of the fluids used in fracking have become effective in fourteen additional states, increasing the overall number of states that require disclosures to twenty. While required disclosures have alleviated some concerns, many believe this is not enough and have pushed to ban fracking outright. Vermont was the first state to do so in 2012. Although progressive, the ban was more symbolic as Vermont contains no major natural gas deposits. However, in late 2014 New York governor Andrew Cuomo made a landmark decision by announcing that fracking would be banned within New York State. Many cities have begun to pass bans as well, including Denton Texas, right in the heart of oil and natural gas country. Citing concerns about the potential health risks associated with the activity, Florida could be the next state to join the anti-fracking movement. In late 2014, two Florida senators introduced a bill that sought to ban all fracking activities and a state representative introduced a similar bill in the beginning of 2015.

The bans have not been without controversy. The fracking industry has challenged many of the local bans arguing the bans are pre-empted by state laws and exceed the cities authority. After Denton passed its local ban, the Texas Oil & Gas Association filed an injunction arguing the city did not have authority to implement such a ban. It yet to be seen if the injunction will be successful but if the results in Colorado are any indication, where local fracking bans have been overturned due to state preemption, the fracking industry should be confident. Until or unless there is a major federal decision on fracking regulations, the fracking industry will be required to juggle the various state and local regulations, which are becoming less friendly as fracking becomes more controversial nationwide.

Could Changes for NEPA be on the Horizon

February 11, 2015
Environment, Environmental Law

Allison Kvien, MJLST Staff Member

The National Environmental Policy Act (NEPA) was one of the first broad, national environmental protection statutes ever written. NEPA’s aim is to ensure that agencies give proper consideration to the environment prior to taking any major federal action that significantly affects the environment. NEPA requires agencies to prepare Environmental Impact Statements (EISs) and Environmental Assessments (EAs) for these projects. NEPA is often criticized for its inability to be effective in the courts for environmental plaintiffs looking for review of federal agency actions. Environmental petitioners who have brought NEPA issues before the Supreme Court have never won.

The Court has never reversed a lower court ruling on the ground that the lower court failed to apply NEPA with sufficient rigor. Indeed, as described at the outset, the Court has not even once granted review to consider the possibility that a lower court erred in that direction and then heard the case on the merits. The Court has instead reviewed cases only when NEPA plaintiffs won below, and then the Court has reversed, typically unanimously.

Because environmental plaintiffs have never won before the Supreme Court on a NEPA issue, many view the statute as a weak tool and have wanted to strengthen or overhaul NEPA.

According to a recent report from the Environmental Law Reporter, President Obama is now “leaning on NEPA” for the work he hopes to accomplish in improving the permitting process for infrastructure development, but it does not look like he is working to improve NEPA itself,

The president’s initiative has identified a number of permitting improvements, but it does not include a serious effort to force multiple agencies to align their permitting processes. A key to forcing multiple agencies to work together on project reviews and approvals is found in an unlikely place: NEPA. The statute is overdue for a makeover that will strengthen how it identifies and analyzes environmental impacts for federal decisionmakers. In doing so, it can provide the framework that will require multiple agencies to act as one when reviewing large projects.

Though Obama’s proposal may not address improvements for NEPA itself, could it help those who have long wished to give NEPA an overhaul? This is not the first time in the last couple years that the President has talked about using NEPA. In March 2013, Bloomberg released news that Obama was, “preparing to tell all federal agencies for the first time that they should consider the impact on global warming before approving major projects, from pipelines to highways.” With NEPA being key to some of President Obama’s initiatives, could there be more political capital to address some changes for NEPA that have been long-wanted? There might be some hope for NEPA just yet.

Expert Testimony May Put BP in Deepwater as It Enters the Trial’s Penalty Phase

January 29, 2015
Environmental Law

Catherine Cumming, MJLST Staff Member

Though the Deepwater Horizon spill occurred nearly five years ago, the civil trial over disaster’s environmental and economic effects continues. This past week, the U.S. government continued to build its case against BP, arguing that BP should pay the maximum Clean Water Act penalty of $13.7 billion. The Federal prosecutor brought in expert witnesses to describe the spill’s devastating environmental and economic effects on the Gulf. In addition to arguing that BP deserves to pay the $13.7 billion penalty, the Federal prosecutors believe that BP can pay this fine. To support its argument, the U.S. government brought in financial expert Ian Ratner to testify that BP is financially able to pay the Clean Water Act Penalty. While BP is fighting for a lower penalty of approximately $3.19 billion, the statutory minimum, Ratner’s financial analysis supports a higher penalty. In fact, BP’s assets have increased since the 2010 spill. As of June 30, 2014, BP’s assets totaled $315 billion, “up from the $236 billion the year before the spill.”

On Monday, January 26, the trail resumes and BP begins calling its witnesses. It is likely that BP will continue to argue, “that the court should consider BP XP and its resources, rather than those of the larger parent group [BP], when determining a penalty. The smaller drilling subsidiary [BP XP] is the named defendant in the case.” Anadarko, a co-owner of the failed oil well, argues “it had no role in the operation of the well and should not have to pay anything.” The briefs are expected to be filed in April with a ruling from U.S. District Judge Carl Barbier to follow.

As the trial progresses and Deepwater Horizon spill nears its five year anniversary, readers should look at The BP Blowout and the Social and Environmental Erosion of the Louisiana Coast, which discusses the troubles the Gulf and its communities faced before the spill as well as how the spill exacerbated these issues. Daniel A. Farber believes that the situation of the Gulf is a preview of future problems that the United States and world will face in years to come. Farber writes “there are many small initiatives that can cumulatively begin to make inroads on the Gulf’s problems, including, most obviously, efforts to ensure that the BP oil spill is not followed by similar disasters.” Though MJLST published this article in 2012, Farber’s analysis and proposal are pertinent in today’s environmental and economic discussions, particularly those related to the legislature’s actions regarding the Keystone XL Pipeline.

State Agency Deference Under PURPA

January 29, 2015
Administrative Law, Environmental Law

Doug Kincaid, MJLST Staff Member

Recently, in Exelon Wind L.L.C. v. Nelson, 766 F.3d 380 (5th Cir. 2014), the Fifth Circuit Court of Appeals (Fifth Circuit) held that state agencies are entitled to deference under the Public Utilities Regulatory Policies Act of 1978 (PURPA) – a cooperative federalism regulatory scheme. The case revolved concerned the Texas Public Utilities Commission (PUC), which claimed that under state law a wind farm generating intermittent power (“non-firm”) power could not enter into a legally enforceable obligation (LEO) under Texas law, and that such an obligation was not required under PURPA. Unable to enter into a fixed price agreement, the generator was subject to highly variable market prices, increasing the financial risk of the project dramatically.

The Federal Energy Regulatory Committee (FERC) responded by declaring that federal law required all qualifying facilities under PURPA have the option to enter into a LEO. The Fifth Circuit, faced with competing state and federal interpretations, upheld the state interpretation despite the fact that FERC authored the relevant statutes. Because wind and solar energy, by nature, cause scheduling difficulties and extra costs to state agencies overseeing regional energy grids, an incentive may exist for other state agencies to follow the PUC’s lead. The Fifth Circuit’s holding in Exelon frustrates renewable energy development by refusing renewable generators the option to enter into LEOs and expands the deference state agencies are entitled to in a cooperative federalism regulatory scheme.

To the extent federal and state agencies disagree on the interpretation of a cooperative federalism statute, district courts are fragmented and little scholarship exists regarding how to resolve these conflicts. In determining whether to defer to a state agency’s interpretation of federal law, five out of six federal circuits which have considered the issue elected to give state agencies no deference. The underlying basis for federal deference in these cases was a sentiment favoring federal supremacy. The Fourth Circuit, an outlier, granted deference to state agencies citing state agency expertise in tailoring federal regulations to local conditions. Here, the Fifth Circuit in Exelon v. Nelson created a novel line of reasoning on this issue.

In relevant part, PURPA states that “Each qualifying facility shall have the option either: (1) To provide energy. . . based on the purchasing utility’s avoided costs calculated at the time of delivery; or (2) To provide energy or capacity pursuant to a legally enforceable obligation.” The plain meaning of this language, under traditional principles of statutory interpretation, creates a mandatory choice vested in the qualifying facility. The Fifth Circuit, however, read the statute as a bare-bones framework on which state agencies can project any regulation not expressly denied by the statutory language. Because PURPA contains no specific language addressing the obligation of firm or non-firm generators to form LEOs, the PUC regulation presents no facial conflict with PURPA.

The creative judicial interpretation employed to circumvent the mandatory choice interpretation reveals that the Fifth Circuit treated state sovereignty as a controlling concern in the examination of conflicting state and federal agency interpretations. A previous holding in F.E.R.C. v. Mississippi, 456 U.S. 742 (1982), held that PURPA subtly circumvents the anti-commandeering doctrine by allowing states to “comply with the statutory requirements by issuing regulations, by resolving disputes on a case-by-case basis, or by taking any other action reasonably designed to give effect to FERC’s rules.” Perceiving a potential Tenth Amendment conflict caused by forcing state governments to implement FERC’s PURPA regulations, the court hesitated to “wade unnecessarily into such murky waters” and instead elected to defer to the PUC. Exelon v. Nelson may remain an outlier, but considering the importance of state and federal agency cooperation in the energy sector, granting deference to state agency interpretations on constitutional grounds could have a significant effect on energy law. Nonetheless, in terms of implementation of PURPA, the court’s ruling is a setback for renewable energy and may require legislative action to clarify the intent of the law.

PURPA serves to promote renewable generation by creating a mandatory purchase provision for small generation facilities, an increasingly important function considering the massive carbon footprint of the power sector. The holding in Exelon v. Nelson reduces FERC’s power to promote renewable power. A simple legislative fix would preserve state implementation authority under PURPA while eliminating the state’s ability to frustrate renewable energy development through state regulations dictated by purchasing utilities.

Congress sets forth in PURPA’s text three express purposes: “to encourage (1) conservation of energy supplied by electric utilities; (2) the optimization of the efficiency of use of facilities and resources by electric utilities; and (3) equitable rates to electric consumers.” Congress should enact a fourth purpose for PURPA: “to encourage” renewable resources and long-term reduction of carbon emissions. Pursuant to this change, the purpose of PURPA would in fact change very little as renewable energy is already a key component of the statute. State regulations singling out renewable generators would be necessarily rejected in federal or state court pursuant to the express will of Congress. The amendment would honor the structure of cooperative federalism inherent to PURPA by balancing the state role of implementation with the federal role of enforcement, while strengthening the benefits derived by renewable generators from the mandatory purchase requirement.

In sum, Exelon v. Nelson presents a new and potentially significant holding on cooperative federalism – a staple legislative tool in today’s agency intensive power sector. It remains to be seen whether this case will bear significantly on future agency deference or remain an outlier, but the holding certainly calls into question the ability of renewable energy generators to enter into LEOs under PURPA. To counteract this negative effect, Congress should make “encouraging renewable resources and long-term reduction of carbon emissions” an express goal of PURPA, cementing the purpose that the statute already serves.

Small-Scale Hydropower Provides Renewed Hope for Energy Policy

January 20, 2015
Environmental Law

Catherine Cumming, MJLST Staff Member

As 2015 begins, many worry that the Republican majority in both the House and Senate will adversely effect energy policy over the next few years. With a scheduled Senate committee hearing and vote this week on the Keystone XL pipeline and pledges to “delay or derail the Obama administration’s clean air proposals,” these worries are justified. However, hydropower, the United States’ largest renewable energy resource provides hope for U.S. energy policy through bipartisan legislature and industry aimed at harnessing small-scale hydropower on existing infrastructure.

In 2013, the legislature unanimously passed the Hydropower Regulatory Efficiency Act (H.R. 267) and the Bureau of Reclamation Small Conduit Hydropower Development and Rural Jobs Act (H.R.678). H.R. 267 was passed in an effort to streamline the Federal Energy Reserve Commission’s (FERC) regulatory process and promote the development of small-scale hydropower projects. H.R. 267 and H.R. 678 “hit a rare bipartisan sweet spot” because they “shrank federal bureaucracy” and increased the potential for renewable energy production through the utilization of existing infrastructure. H.R. 678 was passed to expedite “small hydropower development at existing Bureau of Reclamation-owned canals, pipelines, aqueducts, and other manmade waterways.”

While proponents of hydropower are pleased with the Act, many, especially small-scale producers, are looking for more from the Republican-controlled legislature. The bills and their legislative history focus heavily on the number of unutilized dams in the U.S. as well as the potential for micro hydropower production. While the bills are helpful in increasing the development of small-scale hydropower, further legislature is needed to ease the regulatory process. In a recent NPR story on hydropower legislation, Kurt Johnson, head of the Colorado Small Hydropower Association, described the bills as “a kitchen knife gently cutting the government’s red tape, when what is really needed is a machete.” However, even with a Republican controlled House and Senate, taking a “machete” to FERC’s regulatory process is unlikely. This February, FERC’s amended regulations conforming to the bills become effective, easing the regulatory process for qualifying small-scale hydropower facilities.

Despite recent reform to the hydropower regulatory regime and bipartisan recognition that hydropower is an underdeveloped resource, 2014 showed a shift in hydropower and energy policy. Traditionally, hydropower has been the United States’ largest renewable energy source, but in 2014, annual non-hydropower renewable generation usurped hydropower generation for the first time. In a recent report, the U.S. Energy Information Administration (EIA) projected decrease of 4.4% in conventional hydropower generation, but a 5.1% increase in non-hydropower renewables, including wind, solar, and geothermal. The 2014 removal of the Elwha Dam on the Olympic Peninsula in Washington State highlighted another shift in hydropower, as large-scale hydropower projects and their externalities are under scrutiny. As a result of this heightened scrutiny and the potential for unutilized infrastructure on America’s waterways, the hydropower industry and legislature is looking to implement smaller, noncontroversial projects.

Though hydropower generation decreased in 2014, the legislature recognizes that there is tremendous growth potential for hydropower in America’s future. In fact, the new Chair of the Senate Committee on Energy and Natural Resources, Senator Lisa Murkowski, is on the record for calling hydropower an “undeveloped resource.” Senator Murkowski’s statement is supported by many recent studies, which indicate the potential for increased hydropower generation and job growth in the United States. In addition to its potential for the development of new, clean energy generation and jobs, small-scale hydropower legislation provides renewed hope for energy policy in a Republican-controlled legislature.

Republicans Win, Earth Loses

November 22, 2014
Environmental Law

Vinita Banthia, MJLST Staff Member

The results of last Tuesday’s midterm elections were somewhat of a victory for climate-change deniers around the country. In Iowa, Joni Ernst, a long-time climate change denier beat Democratic candidate Bruce Braley in the race for Senate. Ernst has remarked that she has “not seen proven proof that [climate change] is entirely man-made.” Meanwhile Colorado elected climate change skeptic Cory Gardner over Mark Udall and Oklahoma elected one of the environment’s biggest enemies: James Inhofe. Inhofe has long believed that the dangers of climate change are a hoax and recently wrote a book expressing the same sentiment. Ironically, Inhofe will also serve as the new chair of the Senate Environment and Public Works Committee.

At the United Nations Climate Summit on September 23, 2014, President Obama pledged to world leaders that the United States is committed to doing its part in reducing carbon emissions while also maintaining economic growth. This extended Republican majority in the House will push back President Obama’s Climate Action Plan and the nation’s environmental policy, and will increase resistance to the Environmental Protection Agency’s heightened regulations, but will not entirely seize efforts on that front because the White House remains dedicated to advancing its climate change agenda and the President’s veto will prevent drastic changes in the current law and policy.

In the last year, the U.S. has reduced its carbon production more than any other nation, and the President continues to push this trend to meet his office’s goal of reducing carbon emissions to 17% below 2005 levels by 2020. As part of the Climate Action Plan, the White House aims to work with states and companies to cut the amount of carbon emissions from power plants, which will be the one of the biggest step in reducing carbon emissions in the nation’s history. In addition, new actions are being taken to encourage and implement alternative sources of energy (such as hydroelectric, solar and wind power generators) which will save consumers $10 billion on their bills and reduce carbon pollution by 300 million metric tons by 2030.

Finally, the U.S. aims to work with private companies to reduce hydrofluorocarbons (HFCs) in similar ways as they limited ozone-depleting chemicals such as chlorofluorocarbon (CFC). In addition to taking measures domestically, the U.S. is working with developing nations to find sustainable and clean ways to build infrastructure and create economic growth. For example, the President has formed partnerships with African farmers to implement sustainable agricultural practices.

Despite the recent elections of many Republicans who fail to appreciate the immediate dangers of climate change, many environmentalists, including David Doniger of the Natural Resources Defense Council, say that this kind of climate denial could have a negative impact on the party’s popularity in the long run. Colbert Report host, Stephen Colbert mocked several Republicans for adamantly denying the man-made nature of climate change while they repeatedly disclaimed that they are “not scientists.” Republicans adhering to this view ignore the glaring evidence linking human activity to the drastic rise in sea levels, global temperatures, and loss of biodiversity, without proposing alternative causes for these phenomena.

According to a recent poll conducted by the New York Times, over 54% of Americans believe that some part of global warming is caused by human activity–the greatest number in American history to share this belief. The Chicago Council on Global Affairs poll found that more than 70% of Americans believe climate change is an important threat to the interests of the country, and half of the respondents felt that the government needs to do more to curb the its effects.

As suggested by Senator Bernie Sanders from Vermont, most Republicans’ denial of the dangers of climate change is based on political pressure from their supporters in industries that contribute to environmental degradation. Since much of the Republican campaign funds come from some of the largest polluters , it is unlikely that Republican candidates will expressly change their views unless these culprit industries, such as the fossil fuel industry, move away from these damaging processes and adopt sustainable practices. This change may only be had by incentivizing “green” processes such as efficient and renewable energy sources, which is a key aspect of President Obama’s Climate Action Plan. Hence, even though the current House might try to push the Action Plan behind schedule, the nation is heading toward a more sustainable and green future whether James Inhofe and his fellow Republicans are onboard or not.

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