EPA’s Rules Related to Carbon Emissions and Climate Change Prompt A New Focus By The Opposition

EPA’s new rules for limiting emissions of carbon dioxide for both existing power plants and proposed plants have prompted at least two substantive reports by public policy institutes focusing on the economic aspects of the proposals. The Beacon Hill Institute at Suffolk University and The Heritage Foundation have recently published reports that estimate the potential costs, particularly in terms of jobs, associated with the adoption of these regulations. These reports can be viewed here (Beacon Hill) and (Heritage Foundation).

The Heritage Foundation report has apparently generated the greatest interest due to its effort to detail the number of jobs that the regulations may cost each state. Thus, a recent article on www.al.com covering several Alabama news sources, noted that the regulations may cost Alabama as many as 10,700 jobs or about 4.14% of the State’s manufacturing employment. (Wake Up Call al.com 2/20/15 ). Overall, the Heritage Foundation estimates that over a half million manufacturing jobs will be lost nationwide

Although the very issue of climate change continues to have prominent deniers, the arguments put forth by those who oppose climate change regulations seem to be edging away from absolute denial of the science supporting the fact of any change in the earth’s average temperature and towards the potential economic and social impacts of the issue. Until fairly recently, there has been a vocal group of individuals with scientific credentials who openly rejected the scientific basis for the position that the world’s climate is warming. As scientists have moved to a general consensus that the problem is real, the argument has generally moved from outright denial that the earth’s temperatures are rising to one that questions the cause. Many who originally denied that there was any climate change now acknowledge that temperatures are increasing, but argue that the cause is primarily the result of a natural climate cycle and not the result of human activity such as through the combustion of coal. Even that debate tends to be between scientists and senior policy-makers. These recent studies may indicate a further shift towards more practical aspects of climate change issues: the impacts of the various regulatory proposals the situation has prompted. Regardless of whether the estimates of costs, particularly in jobs, are valid, the fear of the loss of jobs in significant numbers seems much more likely to raise concerns on the part of the general public than has a debate between scientists.


Alabama Continues to Evaluate Water Use and Availability Issues

A combination of factors in Alabama has raised concerns about the reliability of adequate water in various parts of the State in the event of prolonged droughts or significant withdrawals. Industrial users and public water systems would be well advised to become familiar with, and participate in, current efforts by State government and the Legislature to address these problems.

Alabama has an abundance of surface stream mileage, and historically has had the water to fill those stream beds. In fact, Alabama is said to have more navigable channels than any other state. (A Treasure Taken For Granted). However, the availability and volume issues that have driven the long-running dispute between Alabama, Georgia, and Florida (the “Water Wars”) have gradually, but increasingly, manifested themselves in Alabama, including areas not directly affected by the river basins that have been the focus of the interstate disputes.

Unlike most states in the region, including specifically Georgia and Florida, Alabama does not have a system of permitting for water withdrawals. Instead, it only monitors water withdrawals above certain volumes through a system of registration and certification managed by Alabama’s Office of Water Resources. (OWR). The lack of a statutory system regulating water withdrawal and use leaves water users and prospective users to rely on the common law riparian rights system adopted by the State’s Courts in the Nineteenth Century. While the historic abundance of surface and ground water has spared the State from many serious fights over water access and rights, increasing use associated with both public and private growth signals a possible change and the consequent need for a more formal system of water allocations.

While many see a need for some type of action, the effort has been slow to build in the State. Recently, however, there is a renewed focus increasing the prospect for some type of change. In 2008, the Alabama Legislature created the Permanent Joint Legislative Committee on Water Policy and Management (the “Joint Legislative Committee”). (Act 2008-164 SJR28). In 2011, Governor Bentley created the Alabama Water Agencies Working Group (“AWAWG” – Homepage)to assess water resource programs and policies in the State and provide policy options and recommendations. AWAWG submitted its initial report on December 1, 2013. (First Report) And the Joint Legislative Committee has periodically conducted hearings around the State to assess the need for legislative solutions. In a recent interview (here), Senator Arthur Orr, the current chair of the Joint Legislative Committee discussed the future work of AWAWG and potential activity by the Legislature. While his prediction that the Legislature will take water management issues up in a piecemeal, rather than comprehensive, manner has drawn attention, perhaps the more significant point is that Alabama might take any action at all. The fact that the Legislature has appropriated $2 million for AWAWG to conduct detailed assessments of water resources and potential shortfalls indicates that this is a serious effort.

It appears likely that these ongoing actions by AWAWG and the Legislature will result in significant changes to Alabama law governing the withdrawal and use of water and including such issues as interbasin transfers and return discharges. It would be wise for users of water resources, particularly those who make significant withdrawals, to pay careful attention and participate in this process as it moves forward over the next few months in Alabama.

Florida to Sue Georgia over impact to Apalachicola Bay

Earlier this month, the State of Florida announced it will be filing a lawsuit in September in  the U.S. Supreme Court seeking to limit Georgia’s consumption of water from the Chattahoochee and Flint River Basins through an injunction. Florida claims that the unchecked consumption of the upstream water flows have negatively impacted Apalachicola Bay by increasing the salinity of the Bay, particularly in the summer and fall months. The reduction in the salinity is blamed for the reduction in the oyster population. Apalachicola Bay produces 90% of Florida’s oyster supply and 10% of the US domestic supply and is claimed to have the highest density of amphibians and reptiles north of Mexico. All the rivers discharging into the Bay draw from an approximate 20,000 sq. mile total watershed. The news release published by the Florida Department of Environmental Protection states that Georgia/Atlanta’s water consumption is expected to double to 705 million gallons per day by 2035. Previous negotiations between Georgia, Alabama and Florida have clearly failed to find a compromise acceptable to all three states.

For more information on environmental law topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.

Alabama Joins Those Jurisdictions Holding PRP Letter to be “Suit” under CGL Policy

In answering a certified question from a federal district court, the Alabama Supreme Court concluded that action by the Environmental Protection Agency (“EPA”) naming an insured as a Potentially Responsible Party (“PRP”) satisfied the definition of “suit” under the insured’s Comprehensive General Liability (“CGL”) policy.  See Travelers Casualty and Surety Co. v. Alabama Gas Corp., No. 1110346 (Ala. Sup. Ct. Dec. 28, 2012).

From shortly after World War II through the early 1980’s, Alabama Gas Corporation (“Alagasco”) maintained CGL policies with Travelers Casualty and Surety (“Travelers”).  Alagasco had owned and operated a manufactured gas plant in Huntsville, Alabama until 1949, when it conveyed the plant site to the City.  During its period of operation, Alagasco allegedly caused the discharge of hazardous substances.

In 2008, the EPA sent an information request to Alagasco, and later named Alagasco as a PRP.  In turn, Alagasco notified Travelers of potential liability issues and requested Travelers’ coverage position.  Travelers declined to provide a defense, instead taking the position that the communications from the EPA did not constitute a “suit” so as to impose a duty to defend.  The term “suit” was not defined in the policy.

Alagasco filed a lawsuit against Travelers in federal court in July, 2010 seeking a declaratory judgment that Travelers’ duty to defend arose once EPA named Alagasco as a PRP.  Answering the certified question, the Alabama Supreme Court held that the EPA’s designation of Alagasco as a PRP satisfied the “suit” requirement in the CGL policy.  The Court reasoned that the PRP letter amounted to a “suit” because of the significant ramifications attendant to PRP status, including potentially severe penalties for failure to comply with cleanup directives.  Additionally, the Court analyzed the large body of case law developed nationally over the meaning of the term “suit,” which has come to include arbitration proceedings and “all kinds of coercive administrative actions.”

The decision is significant because it signals Alabama’s acceptance of the modern legal trend, adopted by at least ten other states, defining the “suit” requirement in a CGL policy to include agency actions short of the commencement of formal legal proceedings.  As this decision provides the potential for a duty to defend not only PRP letters but similar administrative proceedings, it may be favorable to insured businesses in Alabama with either a CGL or a professional liability policy.

For more information on environmental law topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.

ADEM Reconsiders Its Effort to Require Remediation Agreements

The Alabama Department of Environmental Management (ADEM) has apparently ended its effort to require payment of fees to review groundwater assessments and remediation plans, at least for the time being.  Approximately a year ago, ADEM’s Groundwater Program initiated a process attempting to require the execution of formal Remediation Agreements as a part of assessment requirements for releases which threatened or impacted the groundwater.  This was prompted by recent reductions in appropriations by the State’s Legislature to the Department.  While much of ADEM’s funding comes from the federal government through U.S. EPA, most of the funds for the Groundwater Program come from State revenues.

Historically, whenever a spill or release of a pollutant enters soils, and consequently may threaten groundwater, the Groundwater Branch has required the responsible operator to assess the extent of the release and, where necessary, to conduct remediation activities.  This process generally commences with the Department requiring the submission of an assessment plan.  The resulting assessment report helps determine whether any additional activities, including remediation and groundwater monitoring might be required.  Any and all of those actions would result in additional reports which must be reviewed by the Groundwater Branch as a part of its oversight activities for the site.  Until recently, the Groundwater Branch had sufficient resources to conduct this oversight, but recent budget constraints apparently prompted the Branch to seek reimbursement of these oversight costs from responsible entities using Remediation Agreements.  These agreements generally proposed that the responding party pay the costs associated with the review of all reports as well as the other costs the Branch incurred in its oversight of the particular remediation activity.

There were several fundamental problems with this effort.  First, the format of the agreements and accompanying cover letters gave the impression that execution of the agreements and payment of the fees were mandatory, although there were serious questions about ADEM’s authority to require them.  Second, the terms of the agreement were open ended.  And third, the amount of the fees was not specified.  Some recipients raised these and related concerns with the Department, including its Office of General Counsel.  After a series of exchanges, primarily with the OGC, it appears that the Department will not continue to pursue the idea, at least for the immediate future.  ADEM has acknowledged, at least implicitly, that it may not be able to require the payment of fees for this work without some regulatory changes, including the establishment of a fee schedule similar to those it has enacted for many of its other regulatory programs.

For more information on environmental law topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.

Welcome to Burr & Forman’s Environmental Law Matters Blog!

The complex system of environmental laws and regulations impact our clients’ businesses in a variety of contexts. Our attorneys regularly counsel clients on environmental legal issues arising in business strategy, regulatory compliance, permitting, transactions and resolution of disputes. Land conservation, historic preservation, brownfield redevelopment, environmental remediation, recycling, greenhouse gas, climate change, and regulation of air, water and wastes, all have the potential to pose challenges to corporate or real estate transactions. Our attorneys have a long history of handling such matters, and handling environmental cases in state and federal courts.  We have launched this blog to help our clients keep up with news, statutory changes, legal opinions and practical tips involving all areas of environmental law.

Because many of the laws relating to the regulation of environmental issues are state-specific, we will focus on developments in Burr & Forman’s Southeastern footprint of Alabama, Florida, Georgia, Mississippi, and Tennessee. However, we will also cover any particularly impactful or interesting events in other parts of the country and at the Federal level.

We hope that our clients, as well as other interested parties, will find this blog informative and entertaining and will make it a regular part of their reading. If you ever have a question about something on the blog or have an environmental legal issue, feel free to contact any of Burr & Forman’s Environmental team members, and we will be happy to assist you. If you need help in a state outside of Alabama, Florida, Georgia, Mississippi, or Tennessee, let us know. We have aligned our firm with trusted practices across the country and around the world, and we will get your questions answered at the right law firm.

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