Good News for States and Surface Coal Mine Operators in Recent Department of Interior Announcement

Posted in Coal, Mining

On April 13, the Acting Director of the U.S. Department of Interior, Office of Surface Mining Reclamation and Enforcement (OSMRE) announced that OSMRE will be reinitiating formal programmatic consultation with the U.S. Fish & Wildlife Service, pursuant to Section 7(a)(2) of the Endangered Species Act (ESA) and 50 CFR § 402.16, with respect to OSMRE’s implementation of Title V of the Surface Mining Control and Reclamation Act ( SMCRA). Today’s action is an acknowledgment that the recent disapproval and nullification of OSMRE’s Stream Protection Rule (SPR) by recent operation of the Congressional Review Act also in turn, nullified both the Dec. 16, 2016, Programmatic Biological Opinion and Conference Opinion on the Office of Surface Mining Reclamation and Enforcement’s Regulatory Program as Modified by the Issuance and Implementation of the Final Regulation (2016 BiOp).

Given that it would have been unlawful for OSMRE to have allowed the 2016 BiOp to continue in place, OSMRE today withdrew the 2016 BiOp and advised States that they may continue to rely on the 1996 Biological Opinion and Conference Report (1996 BiOp) and the 1996 Incidental Take Statement (ITS) for the exemption of take. In addition, while the reinitiated consultation is underway, OSMRE has developed interim guidance for the state regulatory authorities to ensure that all appropriate regulations, the requirements from the 1996 BiOp, and the Terms and Conditions listed in the Incidental Take Statement associated with the 1996 BiOp are followed.

This is good news for the major western and midwestern coal-producing states and mine operators, as the 2016 BiOp explicitly superseded and replaced the previous Biological Opinion issued in 1996 that imposed significantly less onerous conditions on SMRCA permits and other actions relating to ESA compliance.

A GT Shareholder represents the State of North Dakota in its federal court challenge in to the OSMRE’s Stream Protection Rule. While that Rule was invalidated recently under the Congressional Review Act, a related action by the U.S. Fish & Wildlife Service would have effectively allowed the SPR to live on and greatly impair surface coal mining in states across the country. Today, DOI took steps to stop that result.

In a Historic Decision to Ban All Metals Mining, El Salvador Appears to Have Closed the Door on OceanaGold

Posted in Mining

On March 29, 2017, legislators in El Salvador passed a much-anticipated bill prohibiting all mining for gold and other metals. The results of the vote were unanimous and cross-party: 69 in favor, none against, and no abstentions. The bill makes El Salvador the first country in the world to institute such a blanket ban on metals mining.

The bill is succinct but comprehensive. With the exception of a transition period for small scale gold mining artisans, the law decrees an immediate, permanent ban on all exploration, extraction, and processing of metals, whether underground or above-ground. The prohibition includes exploration, extraction, or processing ore with techniques that involve cyanide of mercury – commonly used techniques in Central and South America. No license applications or old permits will be grandfathered in under the bill, which is scheduled to take effect one week after its publication in the official governmental gazette.

This new legislation comes at the heels of a lengthy investor state dispute settlement (ISDS) case between OceanaGold and the Salvadoran government. As detailed in my November 2014 blog post, Environmental Regulation and Investor State Dispute Settlement Clauses – OceanaGold and El Salvador, Pacific Rim – since acquired by the Australian-Canadian mining firm OceanaGold — filed a complaint in 2009 against El Salvador under the ISDS clause of the Dominican Republic-Central American Free Trade Agreement (CAFTA). Pac Rim Cayman LLC v. Republic of El Salvador (ICSID Case No. ARB/09/12). Pacific Rim, a Canadian company, originally discovered a gold mine site (El Dorado) along the Lempa River in 2002. In its complaint, Pacific Rim alleged that the investor-friendly former Salvadoran government encouraged it to spend “tens of millions of dollars to undertake mineral exploration activities” only to then institute a moratorium and withhold necessary permits once valuable deposits were discovered. Salvadoran officials stated that Pacific Rim failed to get government approval for its Environmental Impact Study, did not submit a required feasibility study, and did not meet land title and permission-to-mine requirements.

In 2012, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) found that Pacific Rim, as a Canadian company, could not invoke CAFTA. The company changed its claim, accusing El Salvador instead of violating its own investment law. From Sept. 15-22, 2014, ICSID held a hearing regarding whether El Salvador was required to issue a gold mining license to OceanaGold. OceanaGold sought either a green light for the El Dorado mine project or approximately US$300 million in compensation from the Salvadoran government. In October 2016, ICSID found in favor of El Salvador and ordered OceanaGold to pay the country US$8 million in legal costs. In March 2017, ICSID ordered OceanaGold to pay the US$8 million immediately or face the addition of 2-5 percent monthly interest.

El Salvador has since modified its investment law in an attempt to prevent disputes like the long-running OceanaGold case. Last week’s mining legislation may achieve multiple goals including increasing environmental protection, tying up loose ends in the OceanaGold case, and making a decisive statement regarding the country’s mining moratorium. This legislative development seems likely to end any hopes OceanaGold had of being able to develop or sell its El Dorado project.

EPA Takes Steps to Regulate Use and Disposal of Mercury

Posted in Chemicals, EPA, Mercury

On Wednesday, March 29, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register making available the first national Mercury Inventory. 82 Fed. Reg. 15522 (March 29, 2017). The Mercury Inventory is part of a multi-faceted effort by Congress and EPA to regulate use and disposal of mercury, and to ban exports of mercury from the United States.

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The 5th Circuit Issues Order Leaving Intact its Judicial Stay on the EPA Regional Haze Rule

Posted in Air, EPA, Oklahoma, Texas

On March 22, 2017, the U.S. Court of Appeals for the 5th Circuit continued its stay of EPA’s Regional Haze Rule. Texas et al. v. U.S. Environmental Protection Agency, No. 16-60118 (Mar. 22, 2017). The EPA rule would have required power plants in Texas and Oklahoma to install costly and potentially unnecessary upgrades to their generators. Last July, the 5th Circuit granted Texas’ stay motion while rejecting the EPA’s motion to dismiss or transfer, explaining that the plan was likely unlawful, and the costs of compliance with the rule would increase rates for Texas consumers as well as endanger grid reliability if power plants were forced to close. In entering the new order, the court agreed that Texas and Oklahoma had demonstrated a substantial likelihood that the EPA had exceeded its statutory authority when it disapproved the Texas and Oklahoma implementation plans and imposed a federal implementation plan. The court did reject the petitioners’ effort to have the entire rule vacated, and instead granted EPA’s request to remand the rule for reconsideration at the administrative level. This order is not a final decision on the merits, however, and merely maintains the stay in effect. 

 

Cooperative Federalism and the Shifting State of Environmental Regulation

Posted in Federal, Regulatory

Among the numerous goals announced thus far by President Donald Trump and his advisors is the significant reduction of administrative regulations that negatively impact states’ rights and make some innovation and corporate business practices more costly and time consuming. The new administration’s message has been that federal agencies are ignoring the boundaries Congress set when creating them and have abused their mandates, and they must be reined in. In other words, federal agencies need to stop doing so much regulating.

Restricting the scope of federal regulation will presumably make compliance with the rules easier, through increased transparency and simplicity, and lawmaking power will be returned to the sole control of Congress, where the administration believes it belongs. In addition, the new administration believes overactive federal agencies have been limiting the rights of individual states.  The administration’s view is that control needs to be decentralized to allow for states to act as independent sovereigns, making decisions and issuing and enforcing regulations in keeping with their own best interests and individual attributes.  President Trump’s actions to further these goals include his issuance of a regulatory moratorium shortly after his inauguration, and his appointment of agency leaders who support states’ rights and a limited central government.

Read more from my article in The Legal Intelligencer supplement, PA Law Weekly by clicking here.

Legislative Proposal for New Dutch Asbestos Regulations

Posted in Environment, GT Alert, Real estate

On Feb. 3, 2017, the Dutch government sent a legislative proposal to amend the Dutch Environmental Management Act (Wet milieubeheer) regarding asbestos to the Dutch House of Representatives.1 If this legislative proposal becomes law, new and more far-reaching obligations to remove asbestos will be introduced for the owners of Dutch real estate.

The Required Removal of Asbestos Roofs and Other Far-Reaching Requirements

The legislative proposal provides for a statutory basis for further governmental decrees on the removal of asbestos roofs. Previously, on the March 3, 2015, a draft decree to amend the Asbestos Removal Decree 2005 was sent to the chairmen of the Dutch Senate and of the Dutch House of Representatives. This draft decree anticipates the statutory prohibition of asbestos roofs as of 2024.

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Drytech, NFAs, and ISRA Triggers: The ultimate clingy relationship

Posted in Compliance, Contamination, Court Cases, ISRA, New Jersey, Real estate

Have you ever wanted to escape a clingy and annoying relationship? In terms of environmental compliance, triggering New Jersey’s Industrial Site Recovery Act (ISRA) can evoke the same feelings of frustration.  N.J.S.A. 13:1K (­­­­1993). The recent Drytech, Inc. v. State of New Jersey, in particular, highlighted the pesky and recurrent nature of ISRA.

ISRA applies to owners and operators of industrial business operations that intend to sell or transfer their property. It requires that the owner or operator investigate the environmental condition of the property and complete any remedial activity necessary prior to the sale or transfer of a property (the triggering event). Drytech confirmed that ISRA compliance is required regardless of whether the environmental condition of the property has changed since the last triggering event.

Each triggering event requires the owner or operator to, at a minimum, hire a Licensed Site Remediation Professional (LSRP) to conduct a Preliminary Assessment (PA) and, if necessary, perform a Site Investigation (SI) and any remediation. The result of this process ends with a Response Action Outcome (RAO) certifying the property has no environmental issue on site and is compliant with ISRA. In addition to the annual fees of $900 assessed by the New Jersey Department of Environmental Protection (NJDEP) when ISRA is triggered, there are the costs associated with hiring an LSRP to conduct a thorough investigation, which can be a costly surprise if IRSA is triggered unknowingly.

In practice, ISRA’s triggering events occur repeatedly for the same property, and often without incident of any known environmental hazard (e.g., a spill) since the last investigation. This repetition of triggering events can require repeated investigations of the property under ISRA, despite a known lack of contamination on the site.

Drytech involved the applicability of ISRA’s LSRP requirement and annual fees for a manufacturer that had received three No Further Action Letters (NFA)—the precursor to the RAO –which indicated all environmental issues at the site had been addressed. The NJDEP abandoned the NFA letters in 2012. The court found that the NFA letters were no longer valid and that the manufacturer was required to hire an LSRP to certify the facility was ISRA compliant. The effect of this holding confirmed ISRA’s applicability even in instances where it is clear no environmental hazard exists on a site.

This case additionally highlighted the LSRP’s discretionary power to exercise “independent professional judgment.” The LSRP conducted a PA, but required an SI before granting the manufacturer an RAO, despite acknowledging there were no areas of concern on site not previously addressed. The SI was estimated to cost in excess of $12,000. The court found that such action was within the LSRP’s powers, as the NFAs were not binding on the LSRP. The takeaway from this finding is that in cases where it is clear no environmental hazard exists on site, there is still a risk that a property owner will be required to do more than the minimum requirements under ISRA to receive an RAO.

Corporations with industrial property in New Jersey should be mindful of ISRA when engaging in routine business decisions that may trigger the regulation. Often, business considerations dictate multiple transactions that trigger ISRA. However, careful attention can help mitigate this concern.

President Trump Signs Resolutions Eliminating Regulatory Requirements

Posted in Coal, Federal, Mining, Oil & Gas

Last week, President Donald J. Trump signed two congressional resolutions overturning rules that impact the energy extraction and mining industries. On Tuesday, February 14, President Trump signed a resolution eliminating a June 2016 SEC rule that required companies engaged in the commercial development of oil, natural gas, or minerals to disclose payments, including taxes, royalties and fees, made to foreign governments. Supporters of the rule, promulgated under the Dodd-Frank Act, claimed it was aimed to root out potential corruption, but critics feared that it would hurt U.S. businesses’ ability to compete with foreign energy and mining companies by imposing significant compliance costs.

On February 16, the President signed another resolution that overturned the Department of Interior’s “Stream Protection Rule.”  The rule was intended to define the phrase “material damage to the hydrologic outside the permit area” as used in the Surface Mining Control and Reclamation Act (SMCRA) at 30 U.S.C. § 1260(b)(3).  It imposed several new monitoring and permitting requirements for coal mines, and was widely criticized by the coal industry for its likely effect on jobs.

These laws mark just the second and third times that the Congressional Review Act of 1996, 5 U.S.C. § 801 et seq. (CRA), has been used successfully to overturn a federal regulation. (The first successful use occurred in 2001 when President George W. Bush signed a congressional resolution overturning an OSHA ergonomics rule.)

The CRA requires federal agencies to submit rules to Congress for review and allows Congress to vote to overturn the regulation within approximately 60 legislative days. The CRA also prohibits the issuing agency from issuing a rule that is “substantially in the same form” as the prior rule unless the rule is specifically authorized by a subsequent law. 5 U.S.C. § 801(b)(2). Given how seldom the CRA has been utilized, courts have yet to weigh in on what constitutes a rule “substantially in the same form.” But legal challenges are likely to arise – if not now, then in a subsequent administration – as the CRA is used more often. 

In the coming weeks, President Trump’s administration is poised to invoke the CRA to overturn other regulations issued late in President Obama’s Administration. In fact, the Department of Interior’s “Methane and Waste Prevention Rule” was recently overturned by Congress pursuant to the CRA and awaits the president’s signature.

We will continue to provide updates as this (and other rules affecting the energy sector) are considered for review.

 

Help! The DEP Guidance Document I Need is Missing!

Posted in DEP, Guidance Documents, Pennsylvania

The Pennsylvania Department of Environmental Protection (“DEP”), as is typical of government agencies, regularly releases guidance documents explaining how to interpret or apply its programs and regulations. Once drafted and again once finalized, these documents are published in DEP’s Online Library, where they can be accessed through browser searches or directly through the eLibrary.  But what do you do when you can’t find a particular guidance document you’re pretty sure exists?  A colleague or consultant may ask you to clarify a technical point and refer to a document by name or description, or you may need to verify the proper procedure for a risk assessment; your next step is to perform a browser search or check the applicable folder in DEP’s eLibrary.  With any luck, the document is easily found, but some searches result in no returns or broken links.  DEP’s website sometimes contains draft guidance documents, but no final version.

DEP’s guidance documents serve as useful tools in understanding the Department’s regulations. They can provide insight regarding the appropriate procedures for completing testing or remediation of a site, or submitting required paperwork or reports to the Department.  Guidance documents are often helpful in the resolution of legal disputes, providing answers to questions left open by regulations.  In many cases, these documents serve as key documents in completing a project or wrapping up a matter.  In some cases, however, diligent searches for particular guidance prove fruitless.  This may mean the desired document has been rescinded.

The DEP’s Policy for Development and Publication of Technical Guidance sets out the procedures for its development of guidance documents; these procedures also govern the rescission of such guidance.  When developing technical guidance, DEP staff must first draft the guidance document for several levels of internal review and approval.  After approval of a draft guidance document by the Department’s Policy Office, the draft, including a request for public comment, is published in the eLibrary and in the Pennsylvania Bulletin.  At the conclusion of the public comment period, DEP staff reviews any comments received.  Subject to Policy Office review, the final guidance document is then published in the eLibrary and the PA Bulletin.

If a DEP Bureau Director determines that an existing guidance document is no longer necessary, that guidance document can be rescinded. Similar procedures for developing guidance are followed, with one significant difference—the rescission process lacks a notice and comment period.  Upon deciding to rescind a guidance document, the Bureau Director must submit a Notice of Intent to Rescind Guidance to DEP’s Policy Office.  This Notice consists of a short memo identifying the guidance intended for rescission and describing why rescission is sought and the effects rescission will have.  This Notice must be published in the PA Bulletin.  After receiving Policy Office approval of an intended rescission, the Bureau Director shall publish a Notice of Rescission in the PA Bulletin.  This Notice is very brief, identifying the guidance document’s DEP ID Number, title, description, and effective date.  The rescinded guidance document is then removed from DEP’s eLibrary with little fanfare.  When searching for a DEP guidance document you believe may have been rescinded, therefore, checking the PA Bulletin may provide verification or lead you to replacement guidance, alleviating the need for and frustration of repeated searching.

New York State Proposes Revisions to Its Environmental Review Regulations

Posted in NEPA, New York, Real estate

Late last month the New York State Department of Environmental Conservation (DEC) proposed to revise its Part 617 regulations, which are the rules governing the conduct of environmental impact review under New York’s “Little NEPA,” known as the State Environmental Quality Review Act (SEQRA). The proposal was officially noticed in today’s issue of the New York State Register and DEC’s Environmental Notice Bulletin. The proposed rules offer alterations in a number of key areas:

Lessening the Type I Threshold

Under SEQRA, all possible actions fall into one of three classes: Type I actions, which are presumed to have an environmental impact requiring an Environmental Impact Statement (EIS), Type II actions, which are presumed to not have an impact and are exempt from further SEQRA review, and unlisted actions. Both Type I and unlisted actions require an environmental assessment to determine whether an EIS is required. To reduce some uncertainty and promote new policy goals, DEC has changed the requirements so that fewer actions fall in the unlisted gray area. The rules propose lowering a number of thresholds for what would be deemed Type I actions, sweeping in a greater number of residential subdivision and parking lot projects than under current regulations.

Areas where the threshold for a Type I action was changed include:

  • Large residential subdivisions, defined as 200 units or more in a municipality of less than 150,000, 500 units for a municipality with a population between 150,000 and 1 million, and 1000 units in a municipality with a population above 1 million
  • Parking lots adding:
    • 500 additional spaces for a municipality with a population of less than 150,000
    • 1000 additional spaces for a municipality with a population greater than 150,000
  • For actions near landmarked or registered historic places, or near sites that have been determined to be eligible for listing on the State Register of Historic Places, any activity that meets 25 percent of a given threshold for an action is considered a Type I action. This cuts back Type I coverage, which previously swept in all activities near landmarks and historic places.

Expanding the List of Type II Exempt Actions and Promoting Smart Growth

DEC also added a number of new actions to the list of Type II projects, eliminating the need for an environmental review of lower impact activities like reusing a building or selling property by public auction. The list of proposed actions also evidences a clear policy preference toward encouraging both environmentally friendly and socially equitable development, reducing the regulatory burden for green infrastructure, solar energy, and affordable housing projects. It also includes favorable treatment for “infill” development projects that are considered smart growth because they avoid suburban sprawl. These revisions are significant as they represent a new approach to the Type II exempt list, focusing not merely on the lack of impact from such actions, but also seeking to release certain types of development that are deemed environmentally or socially preferred from more exhaustive environmental review.

Some key new type II actions include:

  • Retrofit of an existing structure or facility to incorporate green infrastructure;
  • Installation of fiber-optic or other broadband cable technology in existing highway or utility rights of way
  • Installation of cellular antennas or repeaters on an existing structure that is not subject to federal, state, or local landmarking
  • Subdivisions of four or fewer lots involving less than 10 acres of land
  • Development on a “previously disturbed” site within a “municipal center”
  • Reuse of a commercial or residential structure where the use is consistent with zoning
  • Anaerobic digesters

Scoping

Scoping—the previously optional public process under which the lead agency determines what issues need to be assessed in an EIS—will no longer be optional under the new SEQRA rules. This is currently the practice under New York City’s rules; if adopted this would be the practice throughout the state.

Limiting Factors to be Considered in Order to Expedite Environmental Review

One of the greatest complaints about the SEQRA process is that it moves too slowly. The proposed SEQRA revisions do not include changes that will significantly address that problem, but do attempt a few minor revisions that may in certain instances result in a slightly shorter review. The addition of mandatory scoping is employed to limit what would be required in a subsequently-published EIS to the issues identified in such scope. Under the regulations as currently written, tremendous uncertainty exists as to whether an EIS sufficiently identifies all potential areas of environmental concern; even if a lead agency engages in optional scoping, a draft EIS could still be found inadequate for failing to address a concern that was raised after the scoping process ended. Moreover, under current rules, a lead agency can reject a draft EIS even if they meet the requirements outlined by the optional scoping process. The new rules attempt to address those uncertainties.

First, the draft rule proposes that “Information submitted following completion of the final scope and not included by the project sponsor in the draft EIS cannot be the basis for the rejection of a draft EIS as inadequate.” This means that any issues raised after the final scope was produced would be treated as comments to the EIS, permitting a project sponsor to address those concerns after the fact.

The rules also attempt to further clarify what constitutes an “adequate” EIS. Under the proposed rules, an EIS “is adequate with respect to scope and content for the purpose of commencing public review if it meets the requirements of the final written scope, section 617.9(b) of this Part, and provides the public and involved agencies with the necessary information to evaluate project impacts, alternatives, and mitigation measures.” This revision is aimed at addressing the rare cases where a lead agency refuses to certify a draft EIS as complete for the purposes of commencing public review even though the matters specified in the scope have been addressed.

Finally, the proposed rule revisions provide that if an agency rejects a DEIS for inadequacy, they must accept a subsequently filed DEIS if it meets the list of deficiencies they provided upon review, avoiding circumstances where agencies seek to move the goal posts in successive iterations of preliminary draft EISs.

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