Environment, Land Use & Natural Resources

On March 20, 2013, the U.S. Supreme Court held in a 7-1 decision that Clean Water Act permits are not required for stormwater runoff from logging roads. The decision in Decker v. Northwest Environmental Defense Center defers to the Environmental Protection Agency’s long-standing interpretation of its Industrial Stormwater Rule and reverses a Ninth Circuit decision that would have resulted in NPDES permit requirements for countless new sources.

The U.S. District Court for the District of Rhode Island has vacated its 2010 summary judgment decision in Ashland Inc. v. GAR Electroforming, 729 F. Supp. 2d 526 (D.R.I. 2010), just days after receiving an amicus memorandum by the United States in support of a motion to vacate filed by United Technologies Corporation (UTC).

The broad expansion of onshore oil and gas production in the nation’s numerous shale formations has created an expansion of federal, state and local laws to address the environmental issues associated with this production. The new drilling techniques being employed to capture oil and gas from the nation’s shale formations, primarily hydraulic fracturing and horizontal drilling, are subject to a wide array of environmental laws to protect groundwater, surface water, the atmosphere and sensitive natural resources such as wetlands and wildlife. This article highlights some of the most important federal environmental regulations being developed to address these impacts.

On January 8, 2013, the U.S. Supreme Court held unanimously in L.A. County Flood Control District v. NRDC that the flow of polluted stormwater from an improved portion of a navigable waterway into an unimproved portion of the same waterway is not a discharge of pollutants under the federal Clean Water Act. The Court’s decision reaffirms its 2004 holding in South Florida Management District v. Miccosukee Tribe of Indians¹ and overturns a Ninth Circuit ruling that could have significantly altered the permitting and enforcement scheme for stormwater and flood control, particularly for engineered structures conveying water within a single water body. The Court declined NRDC’s call for it to address broader questions relating to liability for stormwater pollution under Clean Water Act permit terms and focused only on the narrow discharge issue on which it granted review.

New decision makes each insurer responsible for loss if any part occurred during policy period, and bars allocation of damage to the insured.

Senate Bill 226 was enacted in 2011 to streamline review of infill development projects under the California Environmental Quality Act (CEQA), directing the Natural Resources Agency to adopt standards for eligible projects by January 1, 2013. On July 27, 2012, the agency issued proposed S.B. 226 guidelines for public comment, due September 10, 2012. If adopted, the proposed guidelines promise substantially faster and simpler approval of infill projects, eliminating repetitive review of issues already addressed in planning-level evaluations. However, it remains to be seen whether local governments will conduct the detailed planning-level reviews and adopt “uniformly applicable development policies or standards” as needed to realize the benefits of streamlining.

Recent federal court decisions regarding the application of the criminal enforcement provisions of the Migratory Bird Treaty Act (MBTA) to the operations of oil and gas exploration and production facilities have resulted in conflicting interpretations of the Act. These decisions are significant for the oil and gas industry as well as other industries whose operations can impact migratory birds.

On January 3, President Obama signed into law the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (a title strongly influenced by current political issues). This act, sponsored as H.R. 2845 by Representative Bill Shuster (R-Pa.), brings sweeping changes to the nation’s pipeline safety law, imposing a variety of new design, construction, testing, operation, maintenance, and emergency response requirements for the nation’s 2.3 million miles of pipelines for natural gas, petroleum, and hazardous liquids.

By enacting House Bill 3328, the Texas Legislature added a new Subchapter S to Chapter 91 of the Texas Natural Resources Code. The new law directed the Texas Railroad Commission (hereinafter "Commission") to promulgate new rules requiring the disclosure of the composition of the hydraulic fracturing fluids used in wells for which drilling permits are issued by the Commission on or after February 1, 2012, when the new rules take effect.

In this article, Pillsbury Environment, Land Use & Natural Resources senior associate William A. Wilcox, Jr. and partner Jeffrey A. Knight address the impact of the National Environmental Policy Act (NEPA) on public-private ventures (PPVs). They demonstrate that early planning and coordination is essential in order to make use of opportunities to streamline and expedite the NEPA review process for PPV projects while ensuring adequate protections against legal challenges.

The DC Circuit has vacated and remanded the Federal Aviation Administration’s (FAA) no hazard determinations for 130 wind turbines in Nantucket Sound, finding that the FAA failed to follow its own handbook in determining whether the proposed turbines would have a “substantial adverse effect” on air navigation.

The California Environmental Quality Act is a cornerstone of the state’s environmental protection program, requiring public agencies to review the impacts of both private development and public infrastructure projects. However, developers and local governments have long complained that costly and time-consuming environmental impact reports and ensuing litigation can jeopardize even environmentally desirable projects, such as infill development and renewable energy. On October 4, the Governor signed the last of three “streamlining” bills intended to address these concerns.¹ Hailed by some as promoting jobs, attacked by others as undercutting CEQA, these bills actually offer only limited benefits, under such restrictive conditions that few projects will qualify. Thus their effect on project development likely will be less than advocates claim and critics fear, while their effectiveness at generating jobs remains to be seen.

On June 15, 2010, EPA withdrew a conditional exclusion from regulation under the hazardous waste rules of the Resource Conservation and Recovery Act (RCRA) for Emission Comparable Fuel (ECF), which had become effective on January 20, 2009.

“Because plaintiffs bear the burden of proving breach, and because there is no evidence of breach, Chevron is entitled to summary judgment. In addition, even if plaintiffs could show a duty and breach, the nondisclosure claim fails for lack of causation.”

—U.S. District Court Order

“The legal case, argued by Pillsbury Winthrop Shaw Pittman, follows favorable rulings [secured by Pillsbury] against opposing environmental groups in three other federal courts.”

—The Sacramento Bee

On March 22, 2010, the U.S. Environmental Protection Agency (EPA) released a “pre-publication” version of its proposed mandatory greenhouse gas (GHG) reporting requirements for facilities that inject carbon dioxide (CO₂) underground for the purpose of long-term geologic sequestration or to enhance oil and gas recovery.¹ The rule proposes a tiered reporting approach. The first tier establishes a set of reporting requirements that would cover all facilities that inject CO₂ underground. The second tier consists of additional requirements that would apply only to geologic sequestration (GS) facilities, including development of a site-specific monitoring, reporting, and verification (MRV) plan, and utilization of a mass balance approach to report the amount of CO₂ geologically sequestered.

Co-head of Pillsbury’s energy industry team Robert A. James, senior environment, land use & natural resources associate Stella Dorman and energy partner Joseph H. Fagan co-author this article, in which they describe the key commercial aspects of the U.S. oil sector, the energy policy, key laws and regulations concerning oil activities, oil reservoir ownership and mineral rights, and oil exploration and production, and health and safety rules, and other issues affecting the oil regulation industry. Reproduced with permission from Law Business Research. The article, “United States,” was first published in Getting the Deal Through - Oil Regulation 2010 in 29 jurisdictions worldwide (published in March 2010; contributing editor Craig Spurn, Blake Cassels & Graydon LLP).

An overview of Pillsbury's Environment, Land Use & Natural Resources practice highlighting the experience and capabilities of one of the nation's preeminent environmental practices.

Cases That Made a Difference: This 32-page color brochure highlights some of the significant matters handled by Pillsbury litigators in 2009, including cases on behalf of the City of New York, Guantanamo detainees, and across a wide range of industries and clients.

“For once, economic development can be advanced in unison with environmental protection. We appreciate the [U.S. district] court’s judgment on our project.”

—Bill Cramer, Vice Chairman of the Panama City-Bay County Airport Authority, MarketWatch, October 30, 2008

“The perchlorate plume polluting the Rialto-Colton Groundwater Basin is believed to be about six miles long, and to spread at a rate of about three feet per day, according to city officials. ”

—The Riverside Press-Enterprise, March 17, 2008

Previous Client Alerts have discussed the Environmental Protection Agency's amendments to the July 17, 2002 major revisions to the Spill Control and Countermeasure (SPCC) rules.¹ On November 13, 2009, EPA published its latest changes.² The SPCC rules (located at 40 CFR Part 112) affect almost all non-transportation-related facilities that handle significant quantities of oil or petroleum products in their day-to-day operations and which, due to their location, could reasonably be expected to discharge harmful quantities of oil into navigable waters in the event of any release or spill. The effective date of these revisions is January 14, 2010, and the date by which these new SPCC rules must be implemented remains November 10, 2010.

On August 31, 2009, the Environmental Protection Agency (EPA) published a Notice of Data Availability (NODA) and request for comments on a number of issues generated by the agency's July 25, 2008 Notice of Proposed Rulemaking regarding the EPA's plans to regulate the geologic sequestration of carbon dioxide (CO₂) under the Safe Drinking Water Act.¹ EPA requests that any comments filed in response to this NODA be submitted by October 15, 2009.

The Seventh Circuit U.S. Court of Appeals recently ruled that an environmental clean-up obligation under the Resource Conservation and Recovery Act ("RCRA") is not dischargeable in bankruptcy, even when the debtor no longer has any internal clean-up operations and would have to contract a third party to provide such services at significant cost.

The State of California is on the verge of issuing registered warrants, or IOUs, to its creditors. These registered warrants will have important implications for financial institutions and entities that do business with the State. This client alert addresses some of the challenges that the issuance of registered warrants will present to State creditors and financial institutions, drawing from the State’s previous experience with registered warrants.

The purpose of the Department of Energy Loan Guarantee Program, originally authorized in Section 1703 of the Energy Policy Act of 2005, is to encourage early commercial use of new or significantly improved technologies in energy projects. The American Recovery and Reinvestment Act, signed into law on February 17, 2009, added a new Section 1705 to the EPAct, intended both to increase significantly the amount of funds available under the Loan Guarantee Program and to expand the types of eligible projects. An important issue for applicants is the timing and potential delay inherent in any required review under the National Environmental Policy Act.

As discussed in an earlier Client Alert, the Environmental Protection Agency has extensively revised and amended the Spill Prevention, Control and Countermeasure (SPCC) Plan rules, which affect almost all facilities that handle large quantities of oil and petroleum products in their day-to-day operations. EPA is authorized to issue these rules by Section 311(j)(1)(C) of the Clean Water Act, and they are published at 40 CFR Part 112¹.

On January 20, 2009, a rule went into effect that added a new regulatory exclusion to the rules which define "solid waste" and implement Subtitle C of the Resource Conservation and Recovery Act ("RCRA"), 42 USC Section 6901, et. seq. The regulations have long included exclusions for comparable fuel and synthesis gas. In the new rule, EPA added a new category of excluded fuel to 40 C.F.R. § 261.38 that EPA calls "emission-comparable fuel," or, "ECF."

The effective date for the revisions to the EPA's Spill Prevention Control Rules, which was to be February 3, 2009, has been postponed. The new EPA Administrator has chosen this rule for "additional assessment of policy and legal issues" to comply with a Presidential memorandum issued on January 20, 2009, and a directive issued by the Office of Management and Budget on January 21, 2009. The new effective date for the rules is January 14, 2010.

In a recent flurry of activity, the U.S. Environmental Protection Agency (EPA) has taken a series of important actions regarding its Spill Prevention Control and Countermeasure (SPCC) rules. First, EPA vacated its 2002 definition of "navigable waters" to comply with the recent ruling in American Petroleum Institute v. Johnson, 541 F. Supp. 2d 165 (DDC, 2008), and reinstated the agency's original 1973 definition. Next, EPA requested comments on its latest proposal to amend the dates by which SPCC-regulated facilities must prepare or amend their SPCC Plans in response to the substantive changes the agency is making to these rules. Comments on this proposal are due by December 26, 2008. Finally, EPA has published a final rule which revises, amends and clarifies the SPCC program itself. These amendments and revisions are effective on February 3, 2009.

On August 1, 2008, the Environmental Protection Agency (“EPA”) announced its interim approach for applying the Audit Policy to new owners of regulated facilities. The interim approach is designed to give additional incentives to new owners of facilities to participate in the audit program. The key elements of the interim approach that EPA unveiled last week are: 1) the definition of “new owner” under the policy; 2) the duration of new owner status; 3) penalty calculation for new owners; and 4) the application of normal Audit Policy conditions to new owners.

On July 15, 2008, the U.S. Environmental Protection Agency (“EPA”) proposed new regulations under the Safe Drinking Water Act (“SDWA”) to regulate the underground injection of carbon dioxide for the purpose of safe, long-term underground storage or “geologic sequestration” of this greenhouse gas. These new rules would establish a new class of underground injection control (“UIC”) injection wells, Class VI, to regulate the geologic sequestration of carbon dioxide “beneath the lowermost formation containing an underground source of drinking water.” The regulations are intended to settle questions on how carbon sequestration can proceed, but raise a number of issues that industry.

On June 1, 2008, the European Chemicals Agency (ECHA) began accepting pre-registration submissions for all “phase-in” substances under REACH, the European Union’s new chemical safety regulation. Pre-registration allows companies to continue manufacturing or importing chemical substances into the European Union pending the later submission of a full registration dossier. However, following the close of the pre-registration period on December 1, 2008, chemical substances cannot be manufactured or imported into the European Union in quantities exceeding one ton without first undergoing the full registration process, which may be costly and time consuming.

Read about some recent work Pillsbury has completed for clients and how these deals exemplify the skills and experience of our firm's 100+ real estate attorneys.

On June 19, 2006, a sharply divided U.S. Supreme Court issued its highly anticipated decision regarding the scope of jurisdiction under federal Clean Water Act Section 404 governing filling of wetlands and other discharges of dredged or fill material into “waters of the United States.” The Court overruled the Sixth Circuit Court of Appeals and rejected assertion of jurisdiction by the U.S. Army Corps of Engineers (“Corps”) over wetlands located on lands owned by Michigan developers John Rapanos and June and Keith Carabell.

The Ninth Circuit recently held in San Luis Obispo Mothers for Peace v. Nuclear Regulatory Commission, No. 03-74628, 2006 WL 1511889 (9th Cir. June 2, 2006) (“Mothers for Peace”) that, as a matter of law, the Nuclear Regulatory Commission (“NRC”) erred in determining that the National Environmental Policy Act (“NEPA”) does not require the agency to consider the potential environmental impacts of terrorist attacks at nuclear facilities. This decision departs from precedent in major respects. If the Ninth Circuit’s reasoning is adopted by other agencies and courts, environmental review under NEPA and equivalent state laws could be affected for a wide range of industrial and public projects that may be seen as terrorist targets. Project developers, licensees and license applicants, and investors should be aware of this decision and consider appropriate steps to address any new licensing risks.

The widely anticipated “All Appropriate Inquiries” rule, issued yesterday by the U.S. Environmental Protection Agency, sets out the standard for environmental diligence by property purchasers in order to qualify for certain defenses to liability under the federal “Superfund” law. While some requirements originally proposed by EPA were not included, the final rule will likely increase the time and cost of due diligence in many property transactions, but will increase certainty for buyers seeking the protection of the “Superfund” law defenses. The rule becomes effective in one year, on November 1, 2006.