Late last week, the Oregon Department of State Lands denied the State of Wyoming’s request to challenge the Department’s denial of Ambre Energy’s application for a removal-fill permit. (We were following this case at the end of August.) The Department said that Wyoming lacked standing because it had not shown how it would be adversely affected by the permit denial. The decision was based in part Wyoming’s failure to submit  comments on the Department’s review of the application and in part on Wyoming’s inability to show how it would be harmed by “the authorized project.” In other words, under the Department’s interpretation of Oregon regulations, for standing purposes, you have to be the applicant, an adjacent landowner, a commenter, or someone harmed by the project; you don’t have standing if you are harmed only if the project does not proceed.

The Applicant’s and Port of Morrow’s requests for hearings were granted, so the case marches on, although without the fascinating interstate commerce arguments that Wyoming would have brought to the table. Okay, yes, I’m a sucker for  constitutional law questions.

This week has been a week of catching up, so some of this may be old news to you, but maybe you have a tall stack of things you aspire to read someday and you’ll have some sympathy…

St. Mary’s Cement Inc. Against the EPA
Out of the Sixth Circuit, by way of Michigan, a case is brewing that pits St. Mary’s Cement Inc. against the EPA. Why am I reading it? Because the Michigan in question is my hometown, Charlevoix, Michigan, and the cement plant in question is the former Medusa Cement plant that we photoshopped out of all of my childhood pictures of days at  Lake Michigan (before photoshop was a thing). I digress. St. Mary’s has taken its fight over the application of an EPA rule that requires it to retrofit one of its plants with technology to control emissions of nitrogen oxides and sulfur dioxide to the Sixth Circuit. The case involves the distinction between reconstructing existing facilities (thereby subjecting them to the NSPS emissions limits) and modifying facilities, which are not regulated (if they weren’t already) unless there is an emissions increase. The relevance of the distinction is that if the Medusa plant was reconstructed in 1978, then it was not “in existence” on August 7, 1977, and cannot be subject to “best available retrofit technology” emissions limits (the so-called BART-eligibility rule). Nostalgia alone will keep me following this debate. The St. Mary’s Cement Brief is here and has a well-written, fairly straightforward history of the development of the PSD and NSPS regulations.

Markle Interests v. U.S. Fish and Wildlife
From the Eastern District of Louisiana is the 49 page decision in Markle Interests v. U.S. Fish and Wildlife. The decision was issued on August 22, just two days after the court heard oral argument, and it’s clear to even the casual reader (of 49 pages!) that the Court was not excited to be ruling for the defendants. The case involves one of our locals, Weyerhaeuser, as a plaintiff in a battle over FWS final designation of critical habitat for the dusky gopher frog (formerly known as the Mississippi gopher frog). In the words of the court, the government’s action is “remarkably intrusive and has all the hallmarks of governmental insensitivity to private property.” So what of this government action and what might it portend for us in the northwest? FWS designated as “critical habitat” land unoccupied by the gopher frog but that might become habitat. If this is true in Louisiana, it’s especially impactful in our western forest land, where northern spotted owls and marbled murrelets might find habitat.

Murray Energy Corp.’s Lawsuit Against the EPA
And, from West Virginia, an order refusing to dismiss Murray Energy Corp.’s lawsuit against the EPA. The Court held that the Murray had adequately plead that the Clean Air Act imposes a non-discretionary duty on the EPA to evaluate job losses as a result of enforcing the act, including losses that might be caused by plant closure. (The Clean Air Act section in question is § 321(a), which says that the EPA “shall conduct continuing evaluations of potential loss or shifts of employment… [including] threatened plant closures or reductions in employment allegedly resulting from such administration or enforcement” of the CAA. As the court explains, the word “shall” is a command that leaves little, if anything, to discretion.)

Note from Doug Steding:

This post arose out of a meeting over coffee with James Peale and Jackie Gruber, where we discussed Ecology’s recent Remedial Action Grant rulemaking. James and Jackie highlighted Maul Foster & Alongi, Inc.’s deep experience representing public entities in the pursuit of Remedial Action Grant money. Michael Stringer at Maul Foster was the lead author of this post.

One of my hopes when I started this blog a few years back was that it would become a forum for discussion of current environmental issues, and I appreciate Maul Foster taking the time to compose this post. I think you’ll find their perspective and insight useful in understanding the new Remedial Action Grant rule:

The Department of Ecology has finalized new Administrative Rules that set the guidelines for the Remedial Action Grant program. This robust grant program (ranging from $50-65M/biennium in the last 10 years) is the primary funding source for publicly lead cleanups of contaminated sites in the State. The Administrative Rule update implements reforms of the Model Toxics Control Act passed last year in Senate Bill 5296.

So what do these changes mean to the local governments that rely on these grants? Ecology has prepared a fact sheet summarizing the changes. Below are some of the changes that are likely to have the most important implications for local governments.

Recognition of the Economic Importance of Cleanup
As so clearly shown in the transformation of South Lake Union, the financial incentive of redevelopment can be a powerful driver of cleanup. Ecology’s Toxics Cleanup Program has historically operated on a “worst first” policy of prioritizing resources to address sites with the greatest threat to human health and the environment. The new rule provides additional factors for prioritization of grant funds including economic potential for redevelopment, as well as:

  • Environmental justice—Whether a project is located in disproportionately impacted community
  • Ability for a grant to expedite cleanup
  • Ability to leverage other public or private funding for cleanup and reuse
  • Distribution of grants throughout the state

Predictability and Certainty for Large Cleanups
For local governments, taking on large scale, multi-year cleanups, the current grant program poses a fundamental challenge. These governments take on a legal requirement to conduct cleanups, that may cost millions of dollars and take years to complete, but the state can only allocate funds to be used in the current biennium. This creates the potential for local government to be left in a lurch in out years of a lengthy and expensive cleanup. Several changes have been made to provide more certainty and reduce financial risk.

  • Extended Grant Agreements—For projects forecasted to span multiple biennia with costs over $20M, Ecology can provide an extended grant agreement that essentially guarantees funding in future. The state share of total project costs is limited to 50% for these extended grant agreements.
  • Funding Priority—The rules require Ecology to allocate Remedial Action Grant funds in the following order of priority:
    • Existing Extended Grant Agreements
    • Ongoing cleanups conducted under Agreed Orders and Consent Decrees
    • Only after these first two categories of needs are met, can new projects be funded

Limited Opportunity for New Projects?
While these changes address the fundamental financial concern of local governments taking on large cleanups, it may have the unintended consequence of making it more difficult for Ecology to meet the needs of small projects that are driven by real estate opportunities. For example, if a city or port has the opportunity to acquire a vacant, contaminated property, it will have to wait until the annual grant cycle comes around to apply for funding. Many property transactions are based on short windows of opportunity and the need to wait months to even apply, let along obtain a grant, may scuttle the deal. If an application is submitted, it will fall to the bottom of the priority list no matter how contaminated the site or how strong the redevelopment potential because Ecology has required itself to fund existing projects first.

There are a number of more detailed, but important changes to the Remedial Action Grant program in the updated rule. For the most part, these are all positive, much needed changes to update a highly effective program to changing needs. Time will tell if these reforms also come with unintended consequences.

As directed by Governor Inslee back in July, the Washington Department of Ecology released a preliminary draft rule that will ultimately lead to the amendment of Washington’s Water Quality Standards for toxics. This is the next step in a multi-year process under which Washington is adjusting its WQS to account for a higher fish consumption rate. The documents released today include:

1. Draft rule language for toxics;

2. Draft rule language for implementation tools, such as variances, intake credits, and compliance schedules;

3. A preliminary draft cost benefit and least burdensome alternative analysis;

4. A memorandum explaining why the proposed rule is exempt from the requirement under the Regulatory Fairness Act to prepare a Small Business Economic Impact Statement (because Ecology has concluded that the proposed rule amendments do not impose cost on existing businesses in any industry);

5. A preliminary implementation plan after the rule is adopted;

6. An overview of key decisions made in the rule amendments; and

7. A SEPA determination of significance and scoping notice.

The rule language for the toxics criteria is consistent with what we’ve expected, and covers 96 total chemicals. The new fish consumption rate under the proposed rule is 175 grams per day, and the excess cancer risk changes from one-in-a-million to one-in-one hundred thousand. And, consistent with Governor Inslee’s announcement in July, where the application of these new variables results in a greater numeric criterion as compared to the old WQS for toxics (the values in the National Toxics Rule), the new criterion will default to the old NTR number, which, as characterized by Ecology, means that there will be no new standards that are less protective of human health as the old standards. The three exceptions to this framework are arsenic, copper and asbestos, all of which will have new criteria based on the Safe Drinking Water Act. In addition, the rule has a narrative criteria that address chemicals not included on the list of 96 for which numeric criteria are proposed.

The implementation tools are also what we expected. Those tools include a new section that allows for intake credits that account for pollutants already present in water that are simply passing through a permitted facility; a new definition and rule language related to compliance schedules, which deletes the current ten year limit on such schedules (consistent with recent changes to RCW 90.48.605 made by the legislature); and new rule language defining a “variance” and establishing minimum qualifications for granting variances to individual dischargers.

However, what caught my eye in all of the above documents was the draft cost-benefit analysis. One of the main controversies surrounding this process was the potential for new criteria based on a higher fish consumption rate to cause many dischargers to not be able to meet the revised standards, for instance, municipal dischargers projected that standards based on the 175 gram per day rate (and an excess cancer risk of one in a million) would have resulted in unattainable standards for many municipal wastewater treatment plants. Governor Inslee’s proposal back in July to adjust the excess cancer risk upward by a factor of ten was in response to these types of concerns. The draft cost-benefit analysis contains a detailed analysis of the projected impacts on a number of permitted dischargers, and concludes that, of the 415 (183 industrial and 232 municipal) permit holders in Washington, none would be impacted. The draft cost-benefit analysis also concludes that 55 waterbodies will be listed as impaired under Section 303(d) of the CWA (which leads to the development of Total Maximum Daily Loads or “TMDLs”) as a result of the adoption of the new WQS, but 50 of the 55 waterbodies did not have NPDES permitted dischargers on them–leading Ecology to conclude that only three dischargers would be impacted by the change in 303(d) listings.

Ecology also looked at the benefits to fish consumers associated with the new rule. This is sure to be a controversial subject during the comment period that opens in January. Ecology went through an exercise where it calculated that the new rule would result in cancer risk reductions valued at $6 million to $90 million (related to reduced mortality from cancer) and reduced treatment costs of $400 thousand to $2 million. These benefits, according to Ecology, far outweigh the costs of the rule.

The public comment period for the proposed rule opens in January, timed with the legislative session, where the Governor will be pursuing a broader agenda to address toxics in the environment from sources not regulated by the Clean Water Act. We’ll keep reporting on developments as they come up.