Most of our past Blog posts have been focused on current events, analysis of new trends, and breaking news.  Today, we are sharing some news that is eight months old but that offers a potential and promising path for getting things done.  Some of you may already know of a not-very publicized policy memo distributed by James Dalton, USACE’s Director of Civil Works.  This policy memo takes a creative approach in giving direction to MSCs (“major subordinate commands,” or “divisions” in plain English) and districts.  That approach is: If you can’t get done what you need to get done, and the reason is a policy that we at USACE have adopted, then we will allow you to waive the policy so long as you have a good reason. This, is a good idea!

Today, US EPA proposed a rule to roll back the Obama Administration’s rule to control methane emissions from the oil and gas industry. Methane emissions from the oil and gas industry are equivalent to the emissions of one-quarter of all cars in the US, according to US EPA data. Methane emissions are also known to be 25 times more potent than carbon dioxide in contributing to climate change. Overall, methane is responsible for 10 percent of all US greenhouse gas emissions. US EPA has decided to lift the rules that would have controlled for methane emissions, which would have required monitoring, limiting leaks and regular leak inspections for new wells, storage tanks, pipelines and other transmission infrastructure.

The oil and gas industry is reportedly split on the decision. Some argue that “a lack of government backed minimum requirements to curb emissions could undermine the argument that natural gas is a cleaner fuel.”

In a recent unpublished decision, In the Matter of Spill Fund Lien, DJ No. 129570-02, the Appellate Division held that the New Jersey Department of Environmental Protection (“NJDEP”), through the Spill Fund Administrator (the “Administrator”), could file a Spill Act lien against the property of a person in any way responsible for a discharged hazardous substance (“person in any way responsible”). The court also found that NJDEP’s “lien contest” guidance, the procedure for challenging Spill Act liens, satisfied procedural due process requirements. This decision removes a potential ground for challenging Spill Act liens, expands the universe of persons against whom a Spill Act lien can be filed, and may even expand the universe of persons against whom NJDEP can level treble damages claims.

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In a recent opinion, the Ninth Circuit held that the California Public Utilities Commission’s (CPUC) Renewable Market Adjusting Tariff (Re-MAT) program and alternative Qualifying Facility (QF) standard offer contract (Standard Contract) were preempted by federal law. The Re-MAT program and Standard Contract required California utilities to purchase energy from certain QFs with capacities up to three and twenty megawatts (MWs), respectively. The court found that the program and the contract violated the Public Utility Regulatory Policies Act of 1978’s (PURPA) pricing requirements. The decision, Winding Creek Solar LLC v. Peterman, USCA Case Nos. 17-17531 and 17-17532 (9th Cir. 2019) demonstrates that PURPA continues to maintain a floor from which state regulatory programs must encourage the development of renewable energy from small producers. In 2018 and prior to Winding Creek, the CPUC instituted a rulemaking to consider adoption of a new Standard Contract but has not yet taken action. Winding Creek reemphasizes the importance of that proceeding for ensuring that California has a PURPA-compliant program in place for utilities to purchase QF-produced energy.

On Friday, August 9, the Environmental Protection Agency (“EPA”) unveiled a pre-publication version of a notice of proposed rulemaking (“NOPR”) to clarify state water quality certification (“certification”) procedures under Section 401 of the Clean Water Act (“CWA”) to allow for increased regulatory certainty in federal licensing and permitting activities, and particularly authorization of infrastructure projects.  EPA Administrator Andrew Wheeler announced on Friday that the “proposal is intended to help ensure that states adhere to the statutory language and intent of Clean Water Act.”  The NOPR proposes substantive changes to the scope of state water quality certification authority under the CWA and the procedures governing these certifications, focusing on the plain language of the statute and at times departing from prior case law precedent.

Significant components of the NOPR are summarized below.  EPA has established a 60-day period for public comment on the proposed rule, from the date of publication in the Federal Register.  In light of the substantial modifications to the scope, substance and procedures related to state water quality certification, the NOPR presents a unique opportunity for utilities, manufacturers, developers, and other regulated business entities to help shape a significant regulatory program. 

On August 12, 2019 the U.S. Fish Wildlife Service (“USFWS”) and National Marine Fisheries Service (“NMFS”) (collectively, the “Services”) released pre-publication versions of three final rules that are expected to significantly affect the applicability and implementation of the Endangered Species Act (“ESA”).  These regulations relate to the process and standards for listing species and designating critical habitat, the scope of protections for threatened species, and the process for consultations with federal agencies under Section 7.

Most people would not associate flood insurance with the protection of endangered species. But over the past decade, the Federal Emergency Management Agency (FEMA) has been the target of multiple lawsuits alleging that the agency has violated the Endangered Species Act by not considering the impacts of its flood insurance program on endangered species and their habitat.

[This topic will be discussed at the Floodplain Management Association conference in San Diego from September 3-6, 2019. Here is a link to the conference registration.]

In the latest round of litigation, a federal court in California has struck down as arbitrary and capricious an analysis by FEMA that its administration of the National Flood Insurance Program (NFIP) was not likely to adversely affect endangered or threatened species or habitat.

On July 19, 2019, the D.C. Circuit issued its decision in Idaho Conservation League v. Wheeler, upholding US EPA’s decision not to issue financial responsibility requirements for the hardrock mining industry under Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  The requirements, if adopted, would have cost the hardrock mining industry an estimated $111 to 171 million per year.

In our prior coverage of Kisor v. Wilkie, we predicted that the Court would impose “greater scrutiny” on “administrative agencies’ . . . interpretation of their regulations.”  And the Court did.  The Court’s decision will affect every aspect of the federal government’s regulation of environmental, safety, and health.

At the end of its term, the US Supreme Court issued its opinion in Kisor v. Wilkie—upholding but limiting Auer deference.  Auer instructs that courts must defer to an agency’s construction of its own regulation unless that interpretation is “plainly erroneous or inconsistent with the regulation.”  (Indeed, under Auer (before Kisor), the US Supreme Court upheld regulations even when the interpretation was not “the best one.”) Auer deference, however, will work much differently going forward.