Energy and Environment Monitorwww.eem.jacksonkelly.com

EPA Reconsiders 8-Hour Ozone Air Quality Standards

On September 16, 2009, the U.S. Environmental Protection Agency (EPA) announced that it would reconsider the 8-hour ozone standards that were adopted in 2008. EPA announced the reconsideration in a press release and notice filed in a lawsuit pending in the United States Court of Appeals for the District of Columbia Circuit, Mississippi v. EPA, No. 08-1200 and consolidated cases (D.C. Cir.). According to the press release and notice, EPA intends to sign a proposed ozone NAAQS by December 2009, and to promulgate a final ozone NAAQS by August 2010. If EPA tightens the ozone standards, more areas of the country will be found to be in violation. States will be required to prepare plans for these areas outlining how they will achieve the standards, and sources in areas violating the standards will be required to undertake additional control measures. Manufacturing facilities and other businesses with emissions sources will tend to avoid locating in these areas. 

In March 2008, EPA strengthened the ozone standards by lowering them from 0.08 parts per million (ppm) to 0.075 ppm (73 Fed. Reg. 16436; March 27, 2008). In addition to changing the level of the standards, EPA specified the level of the standard to the third decimal.  An area would meet the 2008 standards if the three-year average of the annual fourth-highest daily maximum 8-hour average at every ozone monitor is less than or equal to the level of the standard (i.e., 0.075 ppm). The previous standard, set in 1997, was 0.08 ppm but because ozone is measured out to three decimal places, the standard effectively became 0.084 ppm as a result of rounding.   

Environmental groups and industry as well as a number of states and other governmental entities sued EPA. Environmental groups contend that the change was not sufficiently stringent, and industry argues that tightening the standard was unnecessary. The litigation has been held in abeyance since March of this year at the request of EPA to allow the EPA officials appointed by the Obama Administration to review the ozone NAAQS to determine whether the standards should be maintained, modified, or otherwise reconsidered. 

In announcing the reconsideration, EPA explained it was taking this action “to ensure [the standards] are scientifically sound and protective of human health”. EPA Administrator Jackson tied the reconsideration to the national health care debate and stated: “Reconsidering these standards and ensuring acceptable levels of ground-level ozone could cut health care costs and make our cities healthier, safer places to live, work and play.” In the notice filed in the D.C. Circuit, EPA further states it “has concerns regarding whether the revisions to the primary and secondary NAAQS adopted in the Ozone NAAQS Rule satisfy the requirements of the Clean Air Act….” The press release specifically notes that EPA’s Clean Air Scientific Advisory Committee (CASAC) recommended stronger standards, i.e., 0.06 – 0.07 ppm.  

Primary standards are set to protect human health. Secondary standards are set to protect public welfare and take into consideration such factors as crop damage, architectural damage, damage to ecosystems, and visibility in scenic areas. As stated in the press release, CASAC recommended in 2006 a primary standard in the range of 0.06 to 0.07 ppm and, in addition, a secondary standard in a form that would accumulate data over an entire growing season. Specifically, CASAC recommended that EPA set an index, such as 10 to 20 ppm per hour, to be measured by aggregating ozone measurements over at least the three summer months exhibiting the highest cumulative ozone levels.  

EPA’s own scientists concurred with CASAC’s recommendations. For the primary standard, the EPA Final Staff Paper recommended a range of levels from below 0.080 ppm down to 0.060 ppm and further recommended specifying the level of the standard to three decimal places. For the secondary standard, the Final Staff Paper recommended a standard that is cumulative, weighted total of daily 12-hour exposures over a three-month period within the growing season and a range from 21 ppm-hours to 7 ppm-hours. 

In 2008, EPA established the primary standard at 0.075 ppm and made the secondary standard identical to the proposed primary 8-hour standard. (73 Fed. Reg. 16436; March 27, 2009). Based upon 2004-2006 air quality data, 345 counties violated the 2008 ozone NAAQS. That same data indicates that the number of violating counties would have been 510 if EPA had set the NAAQS at 0.700 ppm, 594 if EPA had set the NAAQS at 0.065 ppm, and 614 if EPA had set the NAAQS at 0.060 ppm. Indeed, only 20 counties had design values of 0.060 ppm or less. See: http://www.epa.gov/air/ozonepollution/pdfs/2008_03_design_values_2004_2006.pdf. While air quality has improved since 2004-2006, these numbers provide an approximate idea of the number of counties likely to be found in violation of any revised standards.  

During the interim period of reconsideration, EPA “will propose to stay the 2008 standards for the purpose of attainment and nonattainment area designations.” The Fact Sheet states that the stay of the 2008 standards for the purpose of area designations “will allow states and EPA to prepare for an accelerated ozone designation process for the reconsidered standards to be completed by August 2011.” If the air quality in a geographic area meets or does better than the national standard, it is called an attainment area. Areas that do not meet the national standard are called nonattainment areas. Identification of these areas as attainment or nonattainment is referred to as the designations process. 

The Clean Air Act provides state governors with an opportunity to submit letters to EPA identifying those areas within their respective states that they recommend be identified as nonattainment, i.e., those areas that are not achieving the NAAQS.   Under the Clean Air Act, EPA must establish a deadline for state recommendations “but not later than 1 year after promulgation of a new or revised [NAAQS]”. CAA § 107(d)(A). The Clean Air Act further provides that the EPA Administrator shall promulgate final designations “as expeditiously as practicable, but in no case later than 2 years from the date of promulgation of the new or revised [NAAQS]”.    Such period may be extended for up to one year if the EPA Administrator has insufficient information to promulgate the designations.   CAA § 107(d)(B). 

Following the promulgation of the 2008 NAAQS, and based on air quality data collected from monitors at location in urban and rural settings, states submitted recommendations for areas to be designated attainment, nonattainment, or unclassifiable in March 2009. Originally EPA was scheduled to issue final designations no later than March 2010, unless there was insufficient information to make these designation decisions. In that case, EPA was scheduled to issue designations no later than March 2011. Now, EPA will issue the final designations by August 2011, or one year and five months after the earlier of the two original deadlines.  

EPA’s Fact Sheet states that the “reconsideration will be based on the scientific and technical record used in the March 2008 review.” While EPA may try to discourage interested parties from submitting additional information, it is reasonable to anticipate that interested parties will seek to have the record reopened for the submission of the latest scientific information . 

The Fact Sheet also indicates that 8-hour ozone attainment state implementation plans (SIPs) will now be due December 2013. Attainment SIPs set forth states’ plans for achieving the NAAQS. Under the Clean Air Act, attainment SIPs are due “no later than 3 years from the date of the nonattainment designation.” CAA §172(b). Under EPA’s original schedule SIPs would have been due March 2013 if EPA promulgated final designations in March 2010. While states will now have an additional 10 months or until December 2013 to submit their attainment SIPs, the states will have less time as a practical matter to prepare their SIPs and will likely have to address additional areas in their attainment SIPs and develop and implement additional control requirements on sources to achieve standards that are expected to be more stringent. 

EPA also addresses implementation of any new standards in the press release and promises to “move quickly” to implement them. Given EPA’s accelerated rulemaking schedule, it seems likely that states may be in the awkward position of preparing their SIPs without the benefit of guidance or rulemaking on implementation of any revised NAAQS. 

Significantly, EPA does not propose a stay of the 2008 standards during reconsideration. Thus, while EPA reconsiders the ozone NAAQS, the current ozone standards of 0.075 ppm remain in place. EPA promises to work with states, local governments and tribes to ensure that air quality is protected during the interim period of reconsideration. For example, the Fact Sheet addresses New Source Review, the permitting program for construction and modification of mew and existing major sources, announcing that “EPA will continue to require permitting of new and modified air pollution sources under the Prevention of Significant Deterioration (PSD) program for the 2008 ozone standards.”  

Additionally, if EPA does not stay the 2008 standards, and does not otherwise address section 126 petitions, downwind states may petition EPA under section 126 of the Clean Air Act for a finding that major sources located in downwind states emit nitrogen oxides (NO_x) and volatile organic compounds (VOCs), the precursors to ozone, in violation of the prohibition on interstate transport of air pollution. Under section 126 of the Clean Air Act, if EPA were to make such a finding, then major existing sources may operate no more than 3 months after such finding unless the source complies with emission limitations and compliance schedules established by EPA but in no case may the source continue to operate more than 3 years after the date of such finding.  

Deadlines for nonattainment areas to achieve a more stringent ozone NAAQS will depend upon the severity of the ozone air quality problem and each area’s classification as marginal, moderate, serious, severe, or extreme. Briefly, the worse the ozone air quality is in an area, the more stringent the control requirements are and the longer the time period is for the area to achieve the NAAQS. Further, a nonattainment designation tends to discourage business development.  

In the notice filed in the pending litigation in the D.C. Circuit, EPA promises to discuss the notice with the other parties in the litigation “in an effort to reach an agreement on a proposal to govern future proceedings”. Under a previous court order, the parties have until October 16, 2009, to reach agreement. If the parties in the litigation are unable to reach agreement, EPA will move for a remand of the ozone NAAQS and the D.C. Circuit may grant the remand motion.  

For additional information on EPA’s reconsideration of the 2008 ozone NAAQS, contact Gale Lea Rubrecht at 304-340-1200 or galelea@jacksonkelly.com. This article was authored by Gale Lea Rubrecht, Jackson Kelly PLLC. For more information on the author see here.

USEPA Announces Program For “Enhanced Review” of Central Appalachian Clean Water Act §404 Permits

On September 14, USEPA briefed the coal industry on the status of its review of 108 applications for Clean Water Act 404 “fill” permits associated with central Appalachian mining that were pending before the Corps of Engineers as of March 31, 2009. The same day, USEPA released a “preliminary” list of permits that will undergo “enhanced review.” To the dismay of industry, USEPA announced that it is requiring further review of all applications still pending associated with surface mines—a number it puts at 79.

In June, USEPA and the Corps released a Memorandum of Understanding (“MOU”). There were over 150 permits backlogged with the Corps as a result of an injunction issued in March 2007 in West Virginia. See OVEC v. Corps of Engineers, 479 F. Supp. 2d 607 (S.D. W.Va. 2007). When the Fourth Circuit reversed that decision earlier this year (556 F.3d 177 (4th Cir. 2009)), the Obama USEPA worked to slow the flow of those backlogged permits—even though most had already been reviewed by USEPA.   The MOU was the vehicle for slowing the flow of the new permits.  

In the MOU, USEPA indicated that there were 48 permit decisions that the Corps identified as imminent. Even though USEPA had already commented on these permit applications under the Bush administration, the Obama administration desired to review them again. After reviewing these 48 applications, USEPA announced that it had no further objections to 42 of them. The other 6 were to be subjected to “enhanced review.” Of those 6 applications, only one has been issued, and that one has conditions on discharges contributing to conductivity that effectively allow USEPA to shut down the operation without having to exercise its “veto” authority under CWA 404(c). 

Also in June, the Corps identified another 108 applications that had already been subject to public notice, but for which a final permit decision was not yet imminent. These were to be reviewed by USEPA using a new screening tool called MIRA to decide which would be subjected to “enhanced review” by USEPA.  

On September 14, USEPA advised that there are only 79 (of the list of 108) permits for surface mines still pending, and that all of them have preliminarily been slated for “enhanced review” as a result of the “MIRA” review. USEPA breaks the group of 79 into 3 groups: 1) those in Kentucky (49 of the 79) that cannot be reviewed yet because they await application of a cumulative impacts assessment model developed for use in Kentucky; 2) those that require minimal additional information to allow USEPA to complete its review; and 3) those for which substantial additional information is required.  

USEPA will accept “comments” on the list of 79 permits for 14 days from September 14. Thereafter, it will finalize its list. Then the Corps will advise USEPA when it is ready to discuss each of the “listed” permits. After that notice, the Corps and USEPA will have 60 days in which to resolve their differences. If they cannot resolve their differences, then the Corps must give USEPA ten days’ notice of its intention to issue a permit so that USEPA can initiate its 404(c) “veto” authority before the permit is issued.  

See http://www.jacksonkelly.com/jk/images/mou%20process.jpg for an overview of the progression proposed by the MOU. 

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.

Future of Arch Mine Faces Uncertainty

The recent administration change at EPA has injected new uncertainty into the mining industry. EPA is charged with securing the goals of the Clean Water Act “CWA,” but the Army Corps of Engineers (“Corps”) is given the responsibility for issuing permits for the discharge of dredged or fill material. The CWA vests in EPA, however, the right to oversee the Corps’ permitting decisions and provides two primary methods for EPA to delay and/or stop permit issuance. Pursuant to CWA Section 404(q), EPA may delay permit issuance by “elevating” proposed individual permits to the Corps’ Headquarters for high level review, or it may veto permit decisions pursuant to Section 404(c).  

EPA is currently re-reviewing a substantial number of CWA 404 permits issued or in the process of being issued to mine operators and is requesting that the Corps suspend, revoke, or modify permits that, in some cases, have already undergone extensive review and revision under the previous administration. One such is example is the permit issued to Arch’s subsidiary, Mingo Logan, for its Spruce No. 1 Mine. Arch's Spruce No. 1 permit has undergone a longer and more thorough review by the public and the Army Corps of Engineers ("Corps") than has an application for any other mine in central Appalachia—including those permits affirmed by the Fourth Circuit. The original application was submitted by Mingo-Logan’s sister company, Hobet Mining, Inc., and called for a larger mine, more valley fills, and the filling of more jurisdictional waters of the U.S. Operations under that permit were enjoined after environmental groups filed a lawsuit in the Southern District of West Virginia. As a consequence of that action, the Corps retracted a previously proffered nationwide permit, and Hobet advised the Corps that it would not oppose the preparation of an Environmental Impact Statement ("EIS").  

An EIS is required by the National Environmental Policy Act ("NEPA") whenever a federal agency proposes undertaking an action that could significantly affect the environment. Actions requiring federal approval fall into the category of a federal undertaking; hence, the Corps is often required to prepare an EIS for CWA section 404 fill permits. The EIS is a highly detailed document describing the positive and negative environmental impacts of an action, as well as alternatives to the action. An EIS takes years to complete and is typically thousands of pages in length. Throughout the process, EPA participated extensively in the review of the permit. On January 22, 2007—approximately eight years after the application was first submitted—the Corps issued a Clean Water Act §404 Permit to Mingo Logan for its Spruce No. 1 Mine, along with the Corps’ Record of Decision. Shortly thereafter, an environmental group filed a law suit against the Corps, challenging their decision to issue a permit to Mingo Logan pursuant to §404 of the CWA for the Spruce No. 1 Mine. While the challenge to the Spruce No. 1 Mine permit was pending, the Fourth Circuit issued its decision in OVEC v. Aracoma in early 2009, wherein it rejected nearly identical legal challenges to a permit for which no EIS was performed; meaning the Court upheld the issuance of a 404 permit which was not subject to nearly the level of scrutiny the Spruce No. 1 permit has undergone.  

The Aracoma decision seemingly cleared the way for Arch’s subsidiary, Mingo Logan, to continue mining at the Spruce No. 1 Mine. On September 3, 2009, however, EPA sent a letter to the Corps asking that it reconsider its decision to issue the permit, despite the fact that EPA worked hand-in-hand with the Corps for nearly a decade to define the scope of the permit that the Corps eventually issued. Additionally, on September 11, EPA announced that 23 of the 404 permits issued within West Virginia deserve even more scrutiny by EPA. Despite the investment entailed in the decade-long process of acquiring its 404 permit, Arch is now subject to the uncertainty of not knowing whether it will ever be able to recoup its investment in the Spruce No. 1 Mine, despite complying with the applicable laws to the Corps’ and EPA’s (at the time) satisfaction. 

This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.

EPA Proposes Greenhouse Gas Reporting Rule

    EPA Administrator Lisa Jackson signed a Final Mandatory Reporting of Greenhouse Gases Rule on September 22, 2009. The rule requires reporting of greenhouse gas (GHG) emissions from large sources and suppliers in the United States, and is intended to collect accurate and timely emissions data to inform future policy decisions. 

    The final rule, not yet published in the Federal Register, will apply to “fossil fuel suppliers and industrial gas suppliers, direct greenhouse gas emitters and manufacturers of heavy-duty and off-road vehicles and engines.” It will not require control of greenhouse gases but will require that sources above threshold levels monitor and report emissions.  

    Suppliers of fossil fuels or industrial greenhouse gases, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year of GHG emissions will be required to submit annual reports to EPA reporting emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), sulfur hexafluoride (SF6), and other fluorinated gases including nitrogen trifluoride (NF3) and hydrofluorinated ethers (HFE). 

    In its public announcement of the rule, EPA states that “EPA’s new reporting system will provide a better understanding of where GHGs are coming from and will guide development of the best possible policies and programs to reduce emissions.” Specifics about the rule can be found at: www.epa.gov/climatechange/emissions/ghgrulemaking.html.   

    This article was authored by Skipp Kropp, Jackson Kelly PLLC. For more information on the author see here.

Water Quality Based Effluent Limitations

Many factors go into determining water quality based effluent limits for permit renewals under the WV NPDES program. First, the permit writer determines the Reasonable Potential (RP) of a pollutant to exceed the applicable water quality criteria. Permit writers use the “Reasonable Potential” Procedures of Chapter 3.3 of EPA’s Technical Support Document for Water Quality Based Toxics Control, available here.  

Past analytical data will impact the RP determination. If there is large variability in the data, the RP calculation will result in the determination that Reasonable Potential exists. Another important factor for past analytical data is the method detection limit (MDL). If the parameter is below the MDL, half of the MDL will be used in the calculations. High MDLs will not work to your advantage in RP calculations.

If the permit writer determines a pollutant has a Reasonable Potential, the permit writer utilizes an Excel workbook to determine Water Quality Based Effluent Limits (WQBEL). Sometimes this spreadsheet is referred to as the “Black Box.” The Black Box determines the WQBEL based on the most stringent water quality standard.  

The spreadsheet is not available on the WVDEP website, but a copy can be requested from the permit writer.  

Data elements that go into the spreadsheet include the following: past analytical data, stream mixing zones/background concentration and translators for dissolved metals.  

Past Analytical Data:
The past analytical data can impact the WQBEL calculations in a number of ways. If the past data has large variability, this will impact the WQBEL. It is important to identify potential outlier samples at the time of analysis and repeat the analysis if possible.  

Again, if the analytical values are below the MDL, half the detection limit will be used in the calculations. High MDLs will not work to your advantage in WQBEL calculations.

Translators:
Some metal water quality criteria are in dissolved form. Metal translators are available for aluminum, arsenic, cadmium, chromium, copper, lead, nickel, silver and zinc. Without a translator study, it is assumed that 100% of the total recoverable form of the metal is in the dissolved form. A site-specific translator can be developed for a facility. US EPA has developed a guidance document for calculating a site-specific translator, available here. Site-specific metal translators can be as low as 0.30.  

Many metals have very low water quality criteria. Clean sampling techniques should be used in the collection of all samples for metals. US EPA Method 1669 provides guidance on minimizing contamination during sampling, available here.  

Before a translator study is undertaken by a permit holder, a sampling plan should be developed and shared with the permit writer. Any comments from the permit writer should be incorporated into the plan.  

Once the translator study is completed a permit modification can be requested.  

Mixing Zones/Background concentration:
A mixing zone is essentially a zone in the receiving stream that dilutes the discharge to meet water quality criteria. The existing background concentration of pollutant must be known immediately upstream of the discharge to grant a mixing zone. If a mixing zone is not used, the water quality standard will be applied at the end of the pipe. The WVDEP’s Water Quality Standards/Mixing Zone Implementation Guidance (June 30, 1997), available here, can aid the development of a background water quality sampling plan or a mixing zone studies.

Before a background or mixing zone study is undertaken by a permit holder, a sampling plan should be developed and shared with the permit writer. Any comments from the permit writer should be incorporated into the plan.  

Once the background study is completed, a permit modification can be requested.  

Future permits:
It should be noted that report only monitoring requirements could result in future water quality based effluent limits. The data collected will be used at the next permit renewal to determine reasonable potential for water quality criteria exceedances. The issues identified for past analytical data should be applied to report only monitoring requirements. 

This article was based on the NPDES Seminar attended on September 17, 2009 by author Joyce Gentry, Acacia Environmental Group LLC. For more information on the author see here.

Uniform Environmental Covenants Act (UECA) Program Moving Forward

The Uniform Environmental Covenants Act (UECA) program in West Virginia came into existence on July 2, 2008, West Virginia Code §22-17. UECA was developed to allow risk-based closure of contaminated sites. These sites are likely to have land use covenants (LUCs) associated with the property following closure of the site by the West Virginia Department of Environmental Protection (WVDEP). LUCs, such as restricting the property to exclude residences or prohibiting groundwater wells are a common practice for contaminated sites using human health and ecological risk-based closure. West Virginia had no standard procedure for attaching LUCs to property deeds. UECA will provide a standard practice (hence-Uniform) for covenants placed upon the property. Additionally, there is a provision for the property owner to conduct inspections of the property on a regular basis to monitor compliance with the LUCs and report those inspections to the WVDEP after site characterization, remedial design and implementation of the remedial measures have been completed. There is a provision to discontinue the inspections, if it is determined that the inspections are no longer necessary to protect human health and ecological receptors.

UECA is very similar to the West Virginia Voluntary Remediation Program (VRP) administered by the WVDEP. The VRP became effective on July 1, 1997. The VRP also allows for closure of contaminated sites using risk-based technology and has been successful in redevelopment of numerous contaminated properties that otherwise would not have been remediated or redeveloped. Below is a comparison of major components of the VRP and UECA requirements. 

VRP

·     Under the VRP, successful closure of the site results in a Certificate of Completion (COC) for all potential historical environmental impacts that can be identified at the site and thus results in screening for an expanded analytical parameter list. The COC is a legal document that limits the ability of the regulatory agencies from re-opening of the site for regulatory enforcement.

·     Requires an application fee and reimbursement costs for DEP employee’s time and expenses associated with the project.

·     Requires a signing of a Voluntary Remediation Agreement (VRA) and use of a Licensed Remediation Specialist to manage the project. Detailed risk assessment in accordance with USEPA protocols must be performed.

·     Requires extensive QA/QC and laboratory data validation. 

UECA

·     Under UECA, successful closure results in a No Further Action at this time (NFA) for specific environmental impacts associated with an identified environmental release such as a Leaking Underground Storage Tank (LUST) site. This generally results in a limited analytical parameter list. The NFA would allow the regulatory agency to re-open the site, if environmental conditions warrant and does not provide the broader protection of the COC.

·     Requires reimbursement costs for DEP employee’s time and expenses associated with the project. There is no initial application fee, as is the case with the VRP.

·     Requires signing of an Agreement For Investigation And Remediation Activities Under W.VA. Code §22-17 & §22-22B (UECA Agreement) and use of a Licensed Remediation Specialist to manage the project. Detailed risk assessment in accordance with USEPA protocols must be performed. (same as VRP)

·     Requires extensive QA/QC and laboratory data validation. (same as VRP)

The UECA program is currently being developed by the WVDEP. The UECA Agreement became available for use in August 2009. The UECA Agreement and the Uniform Environmental Covenant Act are available through the WVDEP website at www.wvdep.org. 

At this time, no site has officially entered the UECA program, with a signed UECA Agreement. This program will provide another tool to effectively remediate contaminated sites. Each contaminated site must be evaluated for its own characteristics to determine if it would be more cost effective or logistical to use UECA, the VRP, or remediate to conventional numerical clean-up standards, which was often the only option, prior to existence of the VRP and UECA. Such factors as spreading costs over time, problems with off-site impacts that may affect neighboring properties, future land use, cost of remedial alternatives and liability issues are just a few of the considerations when determining which program may best fit your situation. 

This article was authored by William Chambers, Acacia Environmental Group LLC. For more information on the author see here.

Renewable Fuels Update

    One of the more controversial components of the Energy Independence and Security Act (EISA) of 2007 and implementing regulations is that renewable fuels produced at plants where construction had not commenced as of December 17, 2007, must achieve lifecycle greenhouse gas emission reductions (GHG) over “baseline lifecycle greenhouse gas emissions”. For corn ethanol the reduction is to be 20%; for advanced biofuel – 50%; for biomass-based diesel fuel – 50%; and for cellulosic biofuel - 60%. The Act defines “baseline lifecycle greenhouse gas emissions” as “the average lifecycle greenhouse gas emissions, as determined by the Administrator, after notice and opportunity for comment for gasoline or diesel fuel (whichever is being replaced by renewable fuel), sold or distributed as transportation fuel in 2005”. EISA §201(1)(C). “Lifecycle greenhouse gas emissions” is the “aggregate quantity of greenhouse gases (including direct emissions and significant indirect emissions such as significant emissions from land use changes), as determined by the Administrator, related to the fuel lifecycle, including all stages of fuel and feedstock production and distribution from feedstock generation or extractions through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass volumes for all the greenhouse gases are adjusted to account for the relative global warming potential”. EISA §201(1)(H).  

    EPA looks not only at the GHGs released when fuels are combusted, but also the GHGs released due to production and transportation of feedstocks, direct and indirect land use changes associated with energy crop production and production blending and distribution of fuels. 

    The most controversial of these issues is land use changes. In theory, at least, as corn-ethanol (as an example) production increases, farmers will expand production into forest and grass lands to make up for the grains diverted from food to fuel resulting in a potential increase of carbon emissions.  

    In order to increase the likelihood that agricultural fuels would meet the required GHG emission reduction, a number of farm state democrats in the House of Representatives were able to insert the so-called Peterson Amendment into the Waxman-Markey American Clean Energy and Security Act, HR 2454 (ACES).¹ The amendment, which has not been approved by the Senate, excludes international indirect land use changes from the calculation of lifecycle greenhouse emissions for renewable fuels and exempts 1 billion gallons of renewable fuel from biomass-based diesel. 

    On another front, EPA has published a notice of the availability of documents pertaining to the expert peer review record completed on the Renewable Lifecycle Greenhouse Gas Fuel Standard Program (RFS2) Emissions GHG Analysis Due to Increased Biofuel Production. 74 F.R. 41359 (August 17, 2009). The peer review analysis was conducted to determine whether the modeling proposed to be used by EPA in calculating GHG lifecycle emissions was appropriate. The reviewers were selected by an EPA contractor. According to EPA, most of the comments concerned: 

    1. The use of equilibrium as opposed to partial equilibrium models;

    2. Problem areas in EPA’s modeling approach;

    3. Issues presented by the integration of EPA’s chosen models;

    4. Whether to increase detail of the model; and

    5. Suggestions for improving the models. 

Largely, the review group agreed with EPA’s approach. The criticisms noted by one or more reviewers included proper incorporation of spatial data into the analysis, integration of emission factors used in the models utilized by EPA and lack of forestry sector analysis. 

    In addition, a number of problems were noted with the linking of partial equilibrium models. For example, two models predicted different changes in crop and livestock production and exports. Other inconsistent areas included rice methane emissions, indirect land use changes in response to switchgrass, estimates of reductions in crop demand, the calculation of agricultural production emissions, particularly nitrous oxide, and emission factors in domestic and international analysis. 

    Each of the reviewers suggested changes to EPA’s modeling approach. The document is available at www.regulations.gov. 

This article was authored by James R. Snyder, Jackson Kelly PLLC. For more information on the author see here.

________________

[1] EPA has estimated that over a 30-year period corn ethanol could have much as a 26% reduction in GHG emissions compared to petroleum fuels, but also could increase GHG emissions by as much as 34% depending upon whether electricity for the ethanol production facility is generated from natural gas or coal. Representative Peterson is from Minnesota which produces a great deal of ethanol, but where 62% of the electricity is generated from coal. 

Coalbed Methane Ownership Continues to Develop in Kentucky

The law concerning coalbed methane (“CBM”) ownership continues to develop in Kentucky. Most recently, the Hopkins Circuit Court issued an order on May 29, 2009 in Bowles v. Hopkins Co. Coal, LLC, No. 06-CI-000395, holding that the Plaintiffs, the owners of all non-coal minerals, could produce the CBM located in coal mining voids, but only when such production does not interfere with mining operations, or when all coal mining operations have ceased. In determining whether mining operations have ceased, the Court stated that even though all coal may be mined from beneath a property, the coal owner is still entitled to use the voids to transport coal or for "any legitimate purpose" so long as the mining operation is ongoing. 

As to these issues, the Hopkins Circuit Court decision is in harmony with The United States District Court for the Western District of Kentucky. The Western District held in Michael F. Geiger, LLC v. United States, 456 F. Supp. 2d 885 (W.D. Ky. 2006), that the CBM located in mine voids can be produced by a non-coal owner, and that coal owners are still entitled to use the voids for any legitimate purpose so long as the mining operation is ongoing. 

However, the May 29, 2009 order of the Hopkins Circuit Court leaves unchanged the Court's February 13, 2009 determination that CBM is owned by the coal estate so long as CBM remains within the coal seam and, if the CBM migrates from the coal seam or vein, it is then subject to capture by the gas owners. Conversely, the Western District determined that CBM located within the coal seam was not owned by the coal estate. 

    The Plaintiffs in Bowles v. Hopkins Co. Coal, LLC filed notice of appeal on June 26, 2009. The appeal marks the first time that the issue of CBM ownership will be heard by an appellate court in Kentucky. Appellate courts in several other states have already considered the issue, but no clear majority opinion has emerged. 

This article was co-authored by Kevin McGuire and Mary Beth Naumann, Jackson Kelly PLLC. For more information on the authors see (McGuire) here and (Naumann) here. 

EPA Releases a Notice of Data Availability (NODA) for Geologic Sequestration of Carbon Dioxide

On August 24, 2009, Peter S. Silva, Assistant Administrator for Water signed this Notice of Data Availability (NODA). In addition to this NODA, the EPA is also opening a 45 day public comment period once the NODA is published in the Federal Register. This NODA and public comment period is in response to the proposed “Federal Requirements Under the Underground Injection Control (UIC) Program for Carbon Dioxide (CO₂) Geologic Sequestration (GS) Wells” (73 FR 43492), which was published on July 25, 2008 and the comments from the last related public comment period which was closed on December 24, 2008.

 

The proposed regulation suggested a new class of injection well (Class VI) and technical criteria for permitting GS wells. These technical criteria include criteria for geologic site characterization, area of review and corrective action, well construction, operation mechanical integrity testing, monitoring well plugging, post-injection site care, and site closure. These technical criteria were formed based on current UIC regulations, but with modifications due to the unique nature of CO₂ injection for GS. The proposal is available online at http://www.epa.gov/fedrgstr/EPA-WATER/2008/July/Day-25/w16626.htm. 

 

This NODA contains preliminary field data from the Department of Energy-sponsored Regional Carbon Sequestration partnership projects, the results of GS-related studies conducted by the Lawrence Berkeley National Laboratory (LBNL), and additional GS-related research. This notice discusses previous comments and presents and alternative the Agency is considering related to the proposed injection depth requirements for the proposed Class VI wells. Information about the former proposal and current notice is available online at http://www.epa.gov/ogwdw000/uic/wells_sequestration.html.

 

According to the notice, the EPA is standing by their commitment to work with state co-regulators to address regulatory issues related to GS. This is important because each state’s geology and energy environment could allow for different ways GS to be developed.

 

Available within this docket (EPA-HQ-OW-2008-0390) are the following:

 

§ Substantial literature on CO₂ injection and storage

§ Ongoing research

§ Research from LBNL which was focused on impacts to groundwater by CO₂ injection and mismanagement

§ Information on DOE sponsored Regional Carbon Sequestration Partnership projects including:

o    Escatawpa, MS: Southeast Regional Carbon Sequestration Partnership (SECARB)

o    Aneth Field, Paradox Basin, UT: Southwest Regional Partnership on Carbon Sequestration (SWP)

o    Pump Canyon Site, Near Archuleta, NW: Southwest Regional Partnership on Carbon Sequestration (SWP)

 

After publication in the Federal Register, comments must be received on or before the 45 day limit. There are no plans to extend this comment period. In addition to the public comment period, a public hearing will be held in Chicago, IL on September 17, 2009. For specific information on registering for the public hearing, visit http://gshearing.cadmusweb.com/.

 

This article was authored by Rachel Shanteau, Acacia Environmental Group LLC. For more information on the author see here.

Fourth Circuit Reverses “Blackwelder” Test For Granting Preliminary Injunctions

   In the case of The Real Truth About Obama, Inc. v. Federal Election Commission, No. 1977 (4th Cir. Aug. 5, 2009) (http://www.fec.gov/law/litigation/rtao_ac_opinion_deny_pi.pdf), the Fourth Circuit Court of Appeals substantially tightened the test for obtaining preliminary injunctions. Prior to its recent ruling, the standard for obtaining a preliminary injunction in the Fourth Circuit examined first the balance of hardship among the parties. Thus, the first step in the process was for the Court to balance the likelihood of irreparable harm to the plaintiff against the likelihood of harm to the defendant. If the analysis resulted in an imbalance in the plaintiff’s favor, then the Court merely had to determine whether the plaintiff raised questions on the merits of the case so serious, substantial, difficult and doubtful as to make them fair ground for litigation. See Blackwelder Furniture Co. of Statesville v. Seilig Manufacturing Co., 550 F.2d 149 (4th Cir. 1977).  

    In The Real Truth About Obama, the Court observed that its Blackwelder standard now stands in fatal tension with the United States Supreme Court’s decision in Winter v. Natural Resources Defense Council, Inc., 129 S. Ct. 365 (2008). In Winter, the Supreme Court articulated clearly what must be shown to obtain a preliminary injunction, stating that the plaintiff must establish: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer irreparable harm in the absence of injunctive relief; (3) that the balance of equities tips in its favor; and (4) that an injunction is in the public interest. Winter, 129 S. Ct. at 374. The new preliminary injunction test in the Fourth Circuit, which follows the decision in Winter, alters the Blackwelder standard as follows: 

•    First, the plaintiff must make a clear showing that it will likely succeed on the merits at trial. (In Blackwelder, the Fourth Circuit instructed that the likelihood of success requirement be considered, if at all, only after a balancing of hardships.) 

•    Second, the plaintiff must make a clear showing that it is likely to be irreparably harmed absent preliminary relief. (Blackwelder, on the other hand, required that the courts balance the irreparable harm to the respective parties, requiring only that the harm to the plaintiff outweigh the harm to the defendant.) 

•    Third, courts should pay particular regard to the public consequences of employing the extraordinary remedy of injunction. 

•    Fourth, while Winter articulates four requirements, each of which must be satisfied, Blackwelder allowed requirements to be conditionally redefined as other requirements were more fully satisfied so that granting or denying a preliminary injunction depended upon a “flexible interplay” among all the factors considered.  

This article was authored by Robert G. McLusky, Jackson Kelly PLLC. For more information on the author see here.