Tag: clean water act

Settling Accounts from the BP Gulf Oil Spill

800px-Defense.gov_photo_essay_100506-N-6070S-819By Elinor Tarlow — October 29 at 6:22 p.m.

More than four years ago, BP’s Macondo well exploded, killing 11 men and spewing millions of barrels of oil into the Gulf of Mexico. The surrounding waterways and marine life still bear the scars of the explosion: brightly colored coral colonies have turned brown and dull, some species of fish have developed heart and other deformities, and more than 900 bottlenose dolphins have been found dead or stranded since the explosion.

Although the Gulf States currently lack sufficient resources to assess the extent of the environmental damage and to remedy it appropriately, two recent legal developments lay the groundwork for distributing long-awaited funds to the states.

First, earlier this month, the Treasury Department finalized rules governing a trust fund that will distribute money to the Gulf States for environmental and economic restoration. Certain state and local governments may now apply for grants to support the recovery of communities affected by the oil spill.

The fund, which Congress established in June 2012 as part of the RESTORE Act, will receive 80 percent of the administrative and civil penalties paid to the United States under the Clean Water Act (CWA) by the parties responsible for the oil spill. A portion of these penalties will be distributed among five Gulf States—Florida, Mississippi, Alabama, Louisiana, and Texas.

Although there is currently $653 million available in the trust fund (from the $1.4 billion in fines Transocean paid in an earlier settlement), significantly more funding likely will come from another source—the CWA civil fines that BP will have to pay for its contribution in causing the oil spill.

Second, U.S. District Judge Carl Barbier recently issued a decision that provides some indication of how much money BP will have to pay for violating the CWA and, therefore, how much money the Gulf States ultimately will receive from the fund.

Under the CWA, a polluter must pay civil penalties of $1,100 for each barrel of oil spilled. The CWA provides an enhancement penalty, which imposes fines that are nearly four times as much per barrel if the polluter was “grossly negligent” in causing the spill.

Last month Barbier found that BP’s conduct leading up to the oil spill constituted “gross negligence.” Barbier defined “gross negligence” as similar to recklessness—“an extreme departure from the care required under the circumstances or a failure to exercise even slight care”—and found that because deepwater drilling is such an inherently risky operation, BP employees fell below this standard in two ways. First, Barbier determined that two BP employees were “grossly negligent” when they ignored the results of a critical safety test and decided not to investigate or notify anyone of the clear indications that the well was not safe to drill. Second, Barbier also found that a series of eight actions, including BP’s decision to drill the final 100 feet of the well with little or no margin, cumulatively constituted “gross negligence.”

As a result of Barbier’s determination, BP may pay civil fines under the CWA for as much as $18 billion. Barbier will conduct proceedings to determine the exact amount in January 2015.

This money, though, likely will not become available to the Gulf States anytime soon. In part because the fine is so large, BP will try to challenge Barbier’s determination of gross negligence and the ultimate penalty assessment. BP initially set aside only $3.5 billion for its civil fines under the CWA—roughly one-fifth of what Barbier could impose. And such a substantial fine could significantly affect the company’s economic outlook. To put the fine in context, $18 billion in penalties would be $6 billion more than BP collected in profits in 2012.

Indeed, BP has already appealed Barbier’s decision, alleging his opinion improperly relied on expert evidence that was excluded at trial. BP is now asking Barbier either to revise his ruling to exclude that evidence or to hold a new trial to allow BP to support its position. And BP has stated that, when Barbier begins the penalty proceedings, it will try to show that its conduct merits a penalty less than the $18 billion maximum.

The finalization of rules for the trust fund and Barbier’s decision to expose BP to enhanced penalties under the CWA are important steps in channeling much-needed money to the Gulf States for environmental restoration. But these are merely first steps. As BP winds its way through the court system, it may be some time before the Gulf States know exactly how much money they will be allocated and when they will have access to such funds. In the meantime, the fate of the Gulf States’ waterways and marine life hang in the balance.

Pebble Mine and EPA’s Veto Authority Under the Clean Water Act

Yellowstone_CaravelloBy Cecilia Segal -— October 7 at 9:50 a.m.

Since 2011, the Pebble Limited Partnership (“PLP”) has been attempting to build a large-scale copper and gold mine in the Bristol Bay watershed in southwestern Alaska.[1] The mine proposal includes an open pit mine, a tailings facility, a power generating station, a deepwater port, and substantial transportation infrastructure, and is slated to operate for at least 20–25 years.[2] Though exact design specifications have not yet been determined, the mine is expected to be one of the largest open pit mines in the world.[3] In light of recent developments, however – including a rare move by EPA to invoke its veto authority under § 404(c) of the Clean Water Act – the mine’s future is in serious doubt.

PLP maintains that the project can coexist with the surrounding environment. Many disagree with this contention. The Bristol Bay watershed is a delicate ecosystem, providing spawning grounds for all five species of Alaska salmon and habitat for over 40 species of mammal and 190 species of birds.[4] Most notably, the watershed is home to the world’s largest sockeye salmon run.[5] The watershed also supports subsistence activities for 25 communities of Alaska Natives [6]; the Native village of Newhalen, for example, averages a 700 pound per capita harvest each year.

With so much at stake, the mine has understandably attracted a great deal of controversy. Indeed, the opposition has expanded beyond the traditional environmental organizations to include celebrities like Robert Redford and jewelry giant Tiffany’s. Ultimately, petitions from several federally recognized tribes and concerned individuals led the U.S. Environmental Protection Agency (“EPA”) to conduct an assessment of the mine’s potential environmental impacts on the region.

In January 2014, EPA released its final assessment. Following that assessment, EPA issued a Proposed Determination in July 2014 to bar development of the Pebble mine, citing the “high ecological and economic value of the Bristol Bay watershed and the assessed unacceptable environmental effects that would result from such mining.”[7] EPA provided a period for public comment on the proposal and held public hearings throughout Alaska. The author of this blog post attended the hearing in Anchorage on August 12, 2014.

EPA’s Proposed Determination rests on its authority under § 404 of the Clean Water Act (“CWA”). Although the mine would be located on state land, it is nonetheless subject to federal permitting requirements. Specifically, because the mine construction would require a significant amount of dredging, PLP must obtain a permit under § 404 of the CWA. These permits are issued by the U.S. Army Corps of Engineers. Under § 404(c), however, the EPA may prohibit or restrict fill activities if it determines that a project would have an “unacceptable adverse effect” on fishery habitat, including spawning and breeding areas.[8] Though sparingly used – EPA has only taken advantage of this provision on 13 occasions – the D.C. Circuit recently upheld EPA’s “veto” authority in Mingo Logan Coal Company v. EPA.[9]

Here, EPA’s use of the § 404(c) veto unleashed a new flurry of controversy and immediately sparked litigation – particularly because EPA’s actions occurred before PLP had applied for the § 404 permit. On May 22, 2014, for instance, PLP filed suit in federal court, arguing that EPA’s Proposed Determination was a “preemptive veto” and seeking an injunction to halt EPA’s process entirely. But on September 26, 2014, the District Court judge dismissed the suit.[10] Because EPA’s Proposed Determination was not a final agency action, the court held, PLP’s suit was premature.[11]

While PLP intends to challenge EPA’s final determination – which must be issued by February 4, 2015 [12] – the future of the project has been thrown into doubt. A number of factors signal the project’s demise, including significant costs and delays, heated public outcry, a loss of investors, EPA opposition, and a tailings pond breach at a similar mine in British Columbia in August, 2014. Given the project’s “near-moribund state,” it may not be capable of surviving the slew of permit application and review processes it must undergo prior to construction. Such a result would be a significant win for EPA and might encourage more use of its veto authority under § 404(c).

[1] See U.S. E.P.A., Proposed Determination of the U.S. Environmental Protection Agency Region 10 Pursuant to Section 404(c) of the Clean Water Act, Pebble Deposit Area, Southwest Alaska, ES-2 (July 2014), available at http://www2.epa.gov/sites/production/files/2014-07/documents/pebble_es_pd_071714_final.pdf [hereinafter “Proposed Determination”].
[2] See Proposed Determination at ES-2.
[3] Proposed Determination at ES-2.
[4] U.S. E.P.A., An Assessment of Potential Mining Impacts on Salmon Ecosystems of Bristol Bay, Alaska: Executive Summary, 6 (January 2014), available at http://www.epa.gov/ncea/pdfs/bristolbay/bristol_bay_assessment_final_2014_ES.pdf [hereinafter “Final Assessment”].
[5] Proposed Determination at ES-1.
[6] Proposed Determination at ES-1.
[7] Proposed Determination at ES-1; 79 Fed. Reg. 42,314 (July 21, 2014).
[8] 33 U.S.C. § 1344(c).
[9] 714 F.3d 608, 609 (D.C. Cir. 2013), cert. denied, 134 S.Ct. 1540 (2014).
[10] Pebble Ltd. P’ship v. EPA, No. 3:14-cv-0097-HRH , slip op. at 15 (D. Alaska Sept. 26, 2014).
[11] Id. at 14–15.
[12] 79 Fed .Reg. 56,365, 56,365 (Sept. 19, 2014).

Solving the CSO Conundrum: Green Infrastructure and the Unfulfilled Promise of Federal-Municipal Cooperation

By Caswell F. Holloway, Carter H. Strickland, Jr., Michael B. Gerrard, and Daniel M. Firger

Faced with mounting infrastructure construction costs and more frequent and severe weather events due to climate change, cities across the country are managing the water pollution challenges of stormwater runoff and combined sewer overflows through new and innovative “green infrastructure” mechanisms that mimic, maintain, or restore natural hydrological features in the urban landscape. When utilized properly, such mechanisms can obviate the need for more expensive pipes, storage facilities, and other traditional “grey infrastructure” features, so named to acknowledge the vast amounts of concrete and other materials with high embedded energy necessary in their construction. Green infrastructure can also provide substantial co-benefits to city dwellers, such as cleaner air, reduced urban temperatures, and quality of life improvements associated with recreation areas and wildlife habitats.

This Article examines the opportunities and challenges presented by municipal green infrastructure programs in the context of Clean Water Act (“CWA”) enforcement by the U.S. Environmental Protection Agency (“EPA”). First, it explores new thinking in urban sustainability and identifies opportunities for greater federal-municipal cooperation in the management of environmental problems, including stormwater runoff. Second, it unpacks the challenges presented by the relative inflexibility of federal environmental enforcement in the context of urban stormwater management under the CWA, and compares the differences between traditional federal approaches and newer local initiatives in terms of adaptability, responsiveness to community needs, preferences and trade-offs, cost effectiveness, and innovation. Third, it describes a recent consent agreement between New York State and New York City, identifying key features and best practices that can be readily replicated in other jurisdictions. In recent years, EPA has taken big steps forward to encourage and support municipal green infrastructure initiatives, including the release of its Integrated Municipal Stormwater and Wastewater Planning Approach Framework. The Article concludes with a specific proposal for further regulatory and policy reform that would build upon this framework to develop truly comprehensive, municipally-led plans to prioritize infrastructure investments that improve public health and the environment.

Cite as: Caswell F. Holloway et al., Solving the CSO Conundrum: Green Infrastructure and the Unfulfilled Promise of Federal-Municipal Cooperation, 38 Harv. Envtl. L. Rev. 335 (2014).

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Sackett v. EPA

By Turner Smith and Margaret Holden

The Supreme Court has historically maintained a complicated, tumultuous relationship with Clean Water Act cases. However, on March 21, 2012, the Court aligned in rare form to issue a unanimous, clear opinion in Sackett v. EPA. The decision establishes Administrative Procedure Act judicial review for Administrative Compliance Orders under the Clean Water Act. This Comment argues that while the decision changes the face of Clean Water Act enforcement law, it does so without affecting other administrative or environmental laws and with virtually no practical effect on Clean Water Act enforcement programs.

Cite as: Turner Smith and Margaret Holden, Comment, Sackett v. EPA, 37 Harv. Envtl. L. Rev. 301 (2013).

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The Geography of Trading Ecosystem Services: A Case Study of Wetland and Stream Compensatory Mitigation Markets

By Philip Womble & Martin Doyle

With the exception of greenhouse gas trading programs, environmental markets are prisoners of their own geography — and with good reason. Climate change is a global phenomenon, and so carbon markets can be geographically all-inclusive — a ton of carbon dioxide emitted in Beijing has the same effect as a ton of carbon dioxide emitted in New York. Other environmental markets are more nuanced. Markets for water quality, biodiversity, endangered species, fisheries, air quality, and aquatic resources, to name a few, must recognize that the commodities they trade exist at particular geographic scales, and set appropriate spatial limits on the redistribution of environmental quality. The size of geographic trading areas has significant implications for the economic viability of markets and the ecological quality of their offsets.

U.S. wetland and stream mitigation markets, which emerged in the 1980s, provide perhaps the most established empirical example of how environmental markets function. This Article presents the first systematic assessment of the federal and state laws, regulations, guidance, and operating practices that shape the geographic size of U.S. wetland and stream markets. This Article first addresses the history of these geographic restrictions under the Clean Water Act, the importance of spatial context for ecosystem functions and services, and the economic-ecological tradeoffs implicated by geographic trading limits. Then, based on the results of the assessment, this Article argues that regulators should increase their transparency and consistency in setting geographic trading limits. It also presents a framework for using more specific geographic limits for different types of wetland and stream offsets to enhance a market’s ecological and economic stability. Lessons from setting geographic limits for wetland and stream markets can be applied to other, nascent environmental markets.

Cite as: Philip Womble & Martin Doyle, The Geography of Trading Ecosystem Services: A Case Study of Wetland and Stream Compensatory Mitigation Markets, 36 Harv. Envtl. L. Rev. 229 (2012).

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