Obama Administration Suffers Environmental Setback

On February 9, 2016, the United States Supreme Court dealt the Obama administration a setback when it temporarily blocked the Obama administration’s efforts to regulate emissions from coal-fired power plants in its attempt to combat global warming. In a 5-4 opinion, with the Court’s four liberal members dissenting, the Court granted a request by 29 states, along with dozens of corporations and industry groups, to temporarily halt an Environmental Protection Agency (“EPA”) regulation[1] before the matter was fully considered by a federal appeals court.

The EPA issued the challenged regulation in 2015. The regulation requires states to make major cuts to greenhouse gas pollution generated by electric power plants, which happen to be the United States’ largest source of greenhouse gases. The aim of the regulation is to transform the generation of electricity in the nation by cutting emissions from existing power plants by a third by 2030, by closing hundreds of heavily polluting coal-fired plants, and by increasing production of wind and solar power.

The 29 states challenging the regulation filed suit to stop its implementation because they contend the rule is unlawful, exceeds EPA’s authority, and constitutes an unlawful invasion of the State’s historic powers.

The Supreme Court’s decision to issue the stay was a shocking development. The Court has never halted a regulation before review by a federal court of appeals.

The Circuit Court of Appeals has expedited the case and scheduled oral argument for June 2, 2016.

 

[1]  80 Fed Reg. 64,662 (October 23, 2015), “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units.”

Georgia Department of Revenue Proposes Conservation Tax Credit Rule Changes

The Georgia Department of Revenue Income is proposing a change to the Tax Division Rule on conservation tax credits. Interested parties seeking to comment on the proposed Rule should review the notice for further guidance. The notice and an exact copy and synopsis of the proposed Rule may be found on the Department’s website at:

https://etax.dor.ga.gov/inctax/newregs/10-16-12__Rule_560-7-8-_50_Conservation_Tax_Credit.pdf

 

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.

Approaching Compliance Dates: Stationary Engines

Compliance dates for the National Emission Standard for Hazardous Air Pollutants (NESHAP) for Reciprocating Internal Combustion Engines (RICE), 40 CFR 63 Subpart ZZZZ, for existing sources are soon approaching. In 2010, EPA expanded the applicability of this rule to control hazardous air emissions not only from new engines but also existing engines, regardless of whether those engines are located at major source or area (minor) sources of HAPs.

Types of engines covered include non-emergency engines used for power generation (including peak shaving), emergency backup power generators, and emergency fire pumps.  Many of these engines are exempt from air quality permitting but are still subject to the RICE NESHAP.

Diesel fueled engines have a compliance date of May 3, 2013, and natural gas and gasoline fueled engines have a compliance date of October 19, 2013.

Key requirements of the RICE NESHAP include:

• Emissions control requirements for certain types of non-emergency engines.

• Operation and maintenance (O&M) and work practice requirements for emergency engines and certain types of non-emergency engines.

• Limits on non-emergency running hours for emergency engines.

• Record keeping requirements.

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.

D.C. Circuit Vacates EPA’s Cross-State Air Pollution Rule

On August 21, the D.C. Circuit Court of Appeals, in EME Homer City Generation, L.P v. EPA, F.3d (D. C. Cir. 2012), vacated the Cross-State Air Pollution Rule (CSAPR, also known as the “Transport Rule”) and remanded the rulemaking proceeding to EPA. The D.C. Circuit directed EPA to continue to administer the Clean Air Interstate Rule (CAIR) “pending implementation of a valid replacement”.

Judge Brett Kavanagh wrote for the Court:

Here, EPA’s Transport Rule exceeds the agency’s statutory authority in two independent respects. First, the statutory text grants EPA authority to require upwind States to reduce only their own significant contributions to a downwind State’s nonattainment. But under the Transport Rule, upwind States may be required to reduce emissions by more than their own significant contributions to a downwind State’s nonattainment. EPA has used the good neighbor provision to impose massive emissions reduction requirements on upwind States without regard to the limits imposed by the statutory text. Whatever its merits as a policy matter, EPA’s Transport Rule violates the statute. Second, the Clean Air Act affords States the initial opportunity to implement reductions required by EPA under the good neighbor provision. But here, when EPA quantified States’ good neighbor obligations, it did not allow the States the initial opportunity to implement the required reductions with respect to sources within their borders. Instead, EPA quantified States’ good neighbor obligations and simultaneously set forth EPA-designed Federal Implementation Plans, or FIPs, to implement those obligations at the State level. By doing so, EPA departed from its consistent prior approach to implementing the good neighbor provision and violated the Act.

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.

5th Circuit SIP Decision May Have Broader Applicability

On August 13, the Fifth Circuit Court of Appeals issued its decision in State of Texas v. EPA, No. 10-60614 (5th Cir. Aug. 13, 2012), affirming Texas’s State Implementation Plan (SIP) allowing for “flexible permits.” Under Texas’s Flexible Permit Program, a facility may make modifications without agency review so long as aggregate emissions do not exceed an emissions cap for the facility. The case could have broader implications across the country, if other courts adopt the Fifth Circuit’s reasoning to allow increased flexibility in state air permitting programs. In this case, the Court determined that if a SIP meets the statutory criteria of the Clean Air Act, then the EPA must approve the SIP.  Rejection based on non-statutory preferences is not allowed.

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.

White House Announces Expedited Schedule for Renewable Energy Projects

On August 7, the White House announced an expedited approval schedule for seven solar and wind projects on federal and tribal lands in Arizona, California, Nevada and Wyoming totaling 5,000 megawatts (MW) of energy-producing capacity, an amount sufficient to power roughly 1.5 million homes.

Three of the proposals would be first to come on line. The Quartzsite, McCoy and Desert Harvest solar energy facilities represent a combined 1,000 MW of capacity, and are on schedule for approval this year. Another project announced is the 3,000 MW Chokecherry and Sierra Madre wind energy project in Carbon County, Wyoming, which would be the largest in North America.

If approved on schedule, the seven projects would add to the 7,200 MW of renewable energy the Obama administration already has permitted on federal lands and would help exceed a goal set by the 2005 Energy Policy Act to permit 10,000 MW of renewable energy by 2015.

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.

Gibson Guitar Corp. Agrees to Resolve Investigation Into Lacey Act Violations

On August 6, 2012, Gibson Guitar Corp. entered into a criminal enforcement agreement with the United States, resolving a criminal investigation into allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India.  The Lacey Act prohibits the importation into the United States of plants and plant products that have been harvested and exported in violation of the laws of another country.

The agreement requires Gibson to pay a penalty amount of $300,000 and provides for a community service payment of $50,000 to the National Fish and Wildlife Foundation to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry. Gibson also agreed to implement a compliance program and to withdraw its claims to the wood seized in the course of the investigation, including Madagascar ebony from shipments with a total invoice value of $261,844.

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.

EPA Issues Final Step 3 Tailoring Rule

On July 12, EPA issued its Final Step 3 Tailoring Rule, announcing that EPA has decided not to lower the greenhouse gas (GHG) permitting levels and therefore will not be including additional, smaller sources in the PSD/Title V permitting programs at this time.  77 Fed. Reg. 41,300 (2012).

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.

D. C. Circuit Upholds EPA GHG Emissions Rules

On June 26, the D.C. Circuit Court of Appeals rejected industry petitions challenging the Environmental Protection Agency’s (EPA) rules limiting greenhouse gas emissions, finding that none of the challengers had standing to bring suit. Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012).

The petitions targeted EPA’s “tailoring” rule, which requires major polluters to obtain permits for their greenhouse gas emissions; the “tailpipe” rule, which sets standards for greenhouse gas emissions from cars and light-duty trucks beginning in the 2012 model year; and the “timing” rule, which limits greenhouse gas emissions from stationary sources. The three judge panel dismissed the petitions, upholding each of these rules.

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.

Supreme Court Reverses Criminal Fine

On June 21, the U.S. Supreme Court issued its opinion in Southern Union Co. v. United States, 132 S. Ct. 2344 (2012). The 6-3 decision overturned an $18 million criminal penalty for the illegal storage of mercury on the grounds that facts used to increase the amount of the monetary penalty were not proven to a jury beyond a reasonable doubt.

Southern Union argued that imposing any penalty greater than the one-day RCRA maximum criminal fine of $50,000 would be unconstitutional under Apprendi v. New Jersey, 530 U. S. 466 (2000). Apprendi holds that the jury-trial guarantee of the Sixth Amendment requires that the government prove beyond a reasonable doubt any fact (other than the fact of a prior conviction) that increases the maximum punishment authorized for a particular crime.

After trial, Southern Union argued that the jury verdict only supported imposing a monetary fine for one day of violation. The District Court held that Apprendi applies to criminal fines as well as other punishments, but concluded that the jury found a 762-day violation. The District Court imposed a fine of $6 million and a “community service obligation” of $12 million.

On appeal, the First Circuit disagreed with the District Court that the jury necessarily found a violation of 762 days, but affirmed the sentence because it held that Apprendi does not apply to criminal fines.

The Supreme Court reversed and remanded, holding that the rule of Apprendi applies to the imposition of criminal fines.

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.