Environmental Law Update

Probate & Property Magazine: Volume 27 No 04

Environmental Law Update Editor: Scott E. Hitch, Burr & Forman LLP, 171 17th Street, N.W., Suite 1100, Atlanta, GA 30363, scott.hitch@burr.com.

Environmental Law Update provides information on developments in environmental law as they apply to property, trust, and estate matters. The editors of Probate & Property welcome information and suggestions from readers

EPA’s Rivers and Streams Assessment Concludes Only 21% of the Nation’s Rivers and Streams Are in Good Biological Condition

The Environmental Protection Agency (EPA) has issued for public comment a draft of its most recent National Rivers and Streams Assessment (NRSA). The assessment involved sampling over 1,900 points along wadeable waterways in the contiguous 48 states during 2008 and 2009. It updates a similar study done in 2004. The draft assessment is available at http://water.epa.gov/type/rsl/monitoring/riverssurvey/upload/NRSA0809_Report_Final_508Compliant_130228.pdf.

Among the key findings: 55% of the nation’s river and stream miles do not support healthy populations of aquatic life, with phosphorus and nitrogen pollution and poor habitat the most widespread problems. An additional 23% of river and stream miles are in only fair condition. Only 21% of stream miles are considered to be in good condition, which represents a mileage reduction of 7% compared to data from the 2004 NRSA.

The leading problems identified in the study involve nutrient pollution and habitat degradation. High levels of phosphorous were identified in 40% of the water miles studied, and 27% have high levels of nitrogen. Among the problems caused by these elements are algae blooms and related conditions that can deplete in-stream oxygen levels.

Activities adjacent to river and stream banks have also adversely affected water conditions. This is primarily due to the reduction or removal of vegetative cover as development proceeds along waterways. The removal of vegetation eliminates or reduces a natural buffer that serves to inhibit the deposit of nutrients (phosphorous and nitrogen), and it contributes to erosion that sends sediments into adjacent waters. Sedimentation smothers aquatic life and tends to make natural channels shallower. Over time, this causes floodplains to expand and increases the risk of and damage from flooding.

There are also human health implications associated with conditions identified in the study. Among them, almost 10% of the studied waterways contain enterococci bacteria at levels exceeding those considered protective of human health. Over 13,000 miles of the waterways studied contain mercury in fish tissue at levels that pose risks to human health.

No Permit Required for Timber Harvesting

The Supreme Court’s March 20, 2013, decision in Decker v. Northwest Envtl. Def. Ctr., 133 S. Ct. 1326 (2013), is good news for the logging industry. The Clean Water Act (CWA) and EPA’s Silvicultural Rule (Regulation) do not require National Pollutant Discharge Elimination System (NPDES) permits for discharges of channeled stormwater runoff from logging roads. Permits are required for logging operations that involve rock crushing, gravel washing, log sorting, and log storage facilities.

Georgia-Pacific West had a contract with the state of Oregon to harvest timber from a state forest. When it rained, water ran off two logging roads into ditches, culverts, and channels that discharged into nearby rivers and streams. The discharges usually contained sediment, which can harm fish and other aquatic organisms.

The majority opinion held that EPA had made a reasonable interpretation of the CWA and the Regulation to exempt the discharge. The Court generally defers to an agency’s interpretation of its own regulation “unless that interpretation is ‘plainly erroneous or inconsistent with the regulation.’” Id. at 1337. Another reason to accord deference to EPA is that the agency’s current view is not a change from prior practice or a post hoc justification adopted in response to litigation. EPA has consistently followed the view that this type of discharge does not require NPDES permits. EPA’s decision also exists against a background of state regulation, and EPA could have reasonably concluded that further federal regulation would be duplicative or counterproductive. The state of Oregon has developed a comprehensive set of best practices to manage stormwater runoff from logging roads. These practices include rules mandating filtration of stormwater before it enters rivers and streams, requiring logging companies to construct roads using surfacing that minimizes the sediment runoff, and obligating firms to cease operations when such efforts fail to prevent visible increases in water turbidity.

EPA Air Pollution Permitting Regulations Vacated—Project Delays Expected

The recent decision in Sierra Club v. EPA, 705 F.3d 458 (D.C. Cir. 2013), vacated all of EPA’s rules on Significant Monitoring Concentrations (SMCs), as well as some (the Prevention of Significant Deterioration (PSD) portion) of the Significant Impact Levels (SILs) for particulate matter in air emissions measuring 2.5 micrometers in diameter or smaller (PM2.5). As a result permit applicants have fewer screening tools available when seeking exemption from analysis and monitoring requirements under the Clean Air Act (CAA).

The CAA requires EPA to set National Ambient Air Quality Standards (NAAQS) for harmful pollutants at levels necessary to protect public health and welfare. Under the act, EPA must designate areas as attainment, nonattainment, or unclassifiable for each NAAQS. States have primary responsibility for implementing the NAAQS and must submit a state implementation plan (SIP) specifying how the state will achieve and maintain compliance.

In 1977, Congress amended the CAA to add PSD provisions to protect the air quality in national parks and similar areas of special scenic or recreational value, and in areas where pollution was within the NAAQS, while assuring economic growth consistent with such protection. When Congress enacted the PSD provisions, it established maximum allowable increases over baseline concentrations—also known as “increments”—for certain pollutants. For other pollutants, Congress delegated to EPA the task of promulgating PSD regulations. For pollutants that the EPA began regulating after Congress enacted the PSD provisions, which includes PM2.5, the EPA must promulgate PSD regulations within two years of establishing the NAAQS for that pollutant.

The PSD provisions also establish requirements for preconstruction review and permitting of new or modified sources of air pollution. CAA § 165(a) lists the requirements that a permit applicant must meet before starting construction, which include acquiring a PSD permit for the facility. Specifically, the applicant must demonstrate that emissions from construction or operation will not cause or contribute to any violations of the increment more than once per year, or to any violation of the NAAQS ever.

In order to make the demonstration required under section 165(a), the applicant for a PSD permit must conduct an analysis of the ambient air quality at the proposed site and in areas that may be affected by emissions from the facility for the relevant pollutants. This analysis must include continuous air quality monitoring data gathered to determine whether the facility will exceed either the increments or the NAAQS. The CAA further mandates collection of this data for one year before the applicant applies for a permit unless a state, in accordance with EPA regulations, determines that a complete and adequate analysis for such purposes may be accomplished in a shorter time period. The results of the analysis must be made available to the public at the time of the public hearing on the application for a PSD permit.

The CAA requires states to address the PSD provisions in their SIPs. EPA has promulgated extensive regulations setting forth requirements and guidelines on how SIPs are to implement the PSD provisions. For states without an EPA-approved SIP, EPA has promulgated separate regulations implementing the PSD provisions.

In 1997, EPA revised its NAAQS to include standards for PM2.5, and in 2006 it revised the PM2.5 NAAQS. In 2007, EPA proposed a rule establishing increments for PM2.5. In the rulemaking at issue in Sierra Club, EPA also proposed two screening tools that would exempt a permit applicant from some of the air quality analysis and monitoring required under the act and regulations: significant impact levels (SILs) and significant monitoring concentrations (SMCs).

In the SIL rule for PM2.5, EPA defined a numeric value of the impact a proposed major source or modification may have on the NAAQS or PSD increment. This numerical value, measured in micrograms per meter cubed (μg/m3), is the level of ambient impact below which EPA considers a source to have an insignificant effect on ambient air quality. According to the rule, “a source that demonstrates its impact does not exceed a SIL at the relevant location is not required to conduct more extensive air quality analysis or modeling to demonstrate that its emissions, in combination with the emissions of other sources in the vicinity, will not cause or contribute to a violation of the NAAQS at that location,” an analysis EPA terms the cumulative impact analysis or the cumulative air quality analysis.

In 1980, EPA adopted regulations that exempt sources from preconstruction monitoring requirements, if the source can demonstrate that its ambient air impact is less than a value known as the SMC. In the rule establishing a SMC for PM2.5, EPA explained that “[i]f a source can show through modeling of its emissions alone that its impacts are less than the corresponding SMC, there is little to be gained by requiring that source to collect additional monitoring data on PM2.5 emissions to establish background concentrations for further analysis.” EPA proposed different methodologies for establishing a value for the SMC.

In the final rule issued on October 10, 2010, EPA adopted and set values for both SILs and SMCs for PM2.5. The legal basis it relied on was Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979), which held that an administrative agency’s de minimis authority to establish categorical exemptions from statutory commands may be permissible as an exercise of agency power, when it is inherent in the statutory scheme, and such authority would permit overlooking circumstances that in context may fairly be considered de minimis. Further, unless Congress has been extraordinarily rigid, there is likely a basis for an implication of de minimis authority to provide exemption when the burdens of regulation yield a gain of trivial or no value. But that implied authority does not apply to situations in which the regulatory function does provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs. Applying this de minimis authority, EPA explained that when a source’s ambient impact does not exceed the SIL or SMC—that is, is de minimis—it considers additional analysis and modeling to yield information of trivial or no value for the impact of the proposed source or modification.

In adopting the SMCs, EPA emphasized that it retained discretion to determine when it may be appropriate to exempt a proposed new major source or modification from the ambient monitoring data requirements under the PSD rules.

Unlike the PSD regulations, the new source review and permitting regulation did not use the SILs to exempt a source from conducting a cumulative air quality analysis. Instead, it states that a proposed source or modification will be considered to cause a violation of a NAAQS when that source or modification would, at a minimum, exceed the SIL in any area that does not or would not meet the applicable NAAQS.

Faced with the Sierra Club’s argument that the agency exceeded its de minimis authority in promulgating the SILs for PSDs, EPA conceded that the regulation was flawed and requested the vacatur and remand. The discretionary distinction between the rules was critical, with the court ultimately vacating the SILs for PSD regulations because they allowed permitting authorities to automatically exempt sources without showing the facility will not cause or contribute to a violation of NAAQS. The SILs for new source review and permitting were allowed to stand because they did not allow the permitting authorities to grant discretionary exemptions.

Likewise, in vacating EPA’s SMCs for PM2.5, the court found that EPA did not have de minimis authority because Congress was “extraordinarily rigid” in mandating preconstruction air quality monitoring. The court read the CAA as a mandate that a PSD permit applicant undertake preconstruction monitoring. Instructive in its analysis was Congress’s use of the word “shall” in each sentence and that Congress provided only one exception to the monitoring requirement—a shorter monitoring period, suggesting that no other exceptions were intended. The court also rejected EPA’s argument that there is a virtual presumption of inherent agency authority to grant de minimis exceptions, noting its circularity. Even if a virtual presumption existed, that presumption is rebutted by an extraordinarily rigid statutory mandate. The court further noted that the exemption would frustrate Congress’s intent that monitoring results be made available to the public at the time of the hearing for the PSD permit. A permitting authority cannot know if there is a violation of a NAAQS or an increment unless preconstruction monitoring establishes the existing ambient concentrations of PM2.5. Finally, to allow EPA to retain (and delegate to the state) discretion on when such an exemption would apply allows the authorities to engage in impermissible cost-benefit analysis, which was expressly rejected in Alabama Power, absent a congressional grant of such authority under a fair reading of the specific statute, considering its aims and legislative history.

The Sierra Club decision will likely slow down the permitting process for new major sources and modifications.

President Nominates Gina McCarthy to Run EPA

President Obama has formally nominated Gina McCarthy to be the next administrator of the U.S. Environmental Protection Agency. McCarthy brings to the position notable experience at both the state and federal levels. She joined EPA in 2009 and currently serves as assistant administrator for the Office of Air and Radiation. Before joining EPA, she served as director of state environmental agencies in both Connecticut and Massachusetts, the latter in the administration of former governor Mitt Romney. Her background in working for both Democratic and Republican administrations has given her a reputation of being fair minded and willing to listen to the views of all those affected by EPA policies and regulations.

In her role as chief of EPA’s Air Programs, she supervised the development of regulations for new coal-fired power plants. As a part of the Administration’s expected emphasis on global warming, McCarthy is expected, if confirmed, to lead an effort by the agency to develop additional rules related to greenhouse gases emitted from existing power plants.

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