2013 MID-YEAR ENVIRONMENTAL LAW UPDATE

By Diane Kindermann, William W. Abbott, Glen Hansen and Katherine J. Hart

Welcome to Abbott & Kindermann’s 2013 Mid-Year Environmental update. This update discusses selected litigation, regulations / administrative guidance and pending legislation, on both the federal and state levels, in the following general areas of environmental law: (A) Water Supply, (B) Water Quality, (C) Wetlands, (D) Air Quality, (E) Endangered Species, (F) NEPA, (G) Mining / Oil & Gas, and (H) Cultural Resources.

A.                Water Supply

County of Siskiyou v. Superior Court (Environmental Law Foundation), ___ Cal.App.4th ___, 2013 Cal. App. LEXIS 468 (2013).

Real parties in interest Environmental Law Foundation, Pacific Coast Federation of Fishermen’s Associations, and Institute for Fisheries Resources (collective, “RPI”) filed a petition for a writ of mandate in Sacramento County, seeking to halt the issuance of well-drilling permits for nonadjudicated groundwater within the Scott River sub-basin in Siskiyou County. RPI alleged that the authority of the State Water Resources Control Board (“Board”) to protect and manage public trust resources extends to the protection of the described groundwater resource and that the County of Siskiyou (“County”), which has a duty to protect public trust resources, must act to protect and manage the groundwater resource through monitoring, regulating, and limiting extractions of groundwater. RPI alleged that the County is not protecting the Scott River from “injurious extractions of interconnected groundwater through their pattern and practice of issuing new well drilling permits (not subject to the adjudication) without any analysis of the impacts” to the detriment of the fish and wildlife of the Scott River. RPI sought injunctive, mandamus, and declaratory relief that recognized the authority of the Board to protect such groundwater under the public trust doctrine, and to compel the County to put in place a well-drilling permit or management plan to protect public trust resources.

The County demurred to the petition on the grounds that the Siskiyou Superior Court issued a decree in 1980 that adjudicated “all surface water rights in the Scott River stream system” and “all rights to ground water that is interconnected with the Scott River,” and reserved jurisdiction to thereafter “review its decree and to change or modify the same as the interests of justice may require.” RPI responded that the relief sought in this case is limited to “groundwater not previously adjudicated within the Scott River sub-basin,” which consisted of “wells or sumps to be constructed ‘at least 500 feet from the Scott River or at the most distant point from the river on the land that overlies the interconnected groundwater, whichever is less.” Thus, RPI argued that they do not request a reopening of the 1980 adjudication. The County also moved to change venue based on the argument that groundwater constitutes real property, and under Code of Civil Procedure section 392, subdivision (a)(1), actions involving right or interest to real property must be tried in the superior court in the county where the property is located. The trial court overruled the demurrer and denied the motion to change venue. The County sought a writ of mandate challenging both decisions. 

The Court of Appeal denied the County’s writ petition. The court first held that the doctrine of exclusive concurrent jurisdiction did not apply here: “The question of whether [County] must follow the public trust doctrine to monitor groundwater extractions that are not subject to the 1980 adjudication is not a matter necessarily related to the 1980 decree. There is no evidence the public trust doctrine was even considered in the formulation of the 1980 decree. Nor are the issues in the petition ‘substantially the same’ as the issues adjudicated in the 1980 decree. In the 1980 decree, the court sought to determine water rights to groundwater interconnected with the Scott River. The petition asks the court to determine whether or not the Board and Siskiyou have the authority under the public trust doctrine to protect public trust resources. The petition argues Siskiyou has failed to consider the public trust doctrine in issuing permits for wells used to extract groundwater interconnected with the Scott River.” 

Next, the Court of Appeal held that the trial court did not abuse its discretion in denying the County’s motion to change venue. The court explained that the primary thrust of RPI’s action is the regulatory authority of the Board over the application of the public trust doctrine to interconnected ground and surface water. This case was not an action that fit within the provision of CCP §39 “[f]or the recovery of real property, or of an estate or interest therein, or for the determination in any form, of that right or interest, and for injuries to real property” or “[f]or the foreclosure of all liens and mortgages on real property.”   This matter involved the regulatory authority of the Board and the County, not any relief against individual water rights holders. Therefore, the trial court did not abuse its discretion in maintaining venue in Sacramento County.

Administrative Draft BDCP Chapters Released, As Opposition to BDCP Intensifies.

Between March and May 2013, the California Natural Resources Agency publically released the Administrative Draft Bay Delta Conservation Plan (BDCP), which includes the proposal to build two giant water diversion tunnels through the Delta region. A public meeting to discuss the Administrative Draft is scheduled for July 17, 2013, in Sacramento.

However, on May 23, 2013, the Delta Protection Commission, a state agency made of primarily of local governmental officials from throughout the five-county Delta region, voted to oppose the BDCP on the ground that the plan is not supportive of the Delta.

The battle over the BDCP is taking on the characteristics of the typical Northern vs. Southern California water war. On the one hand, 12 Members of Congress from Central and Southern California and Senator Diane Feinstein (all Democrats) signed a letter to the Secretary of the Interior and Governor Brown in May 2013 expressing their “continued support for the Bay Delta Conservation Plan (BDCP) process” and how “half measures” are unacceptable.   On the other hand, 6 Members of Congress from Northern California (also all Democrats) repeated late in May 2013 that they were staunchly opposed to the BDCP, as currently drafted.     

Also, a competing plan called the “Portfolio-Based BDCP Conceptual Alternative” has emerged. That alternative consists of one smaller water tunnel and other measures that are more conservation oriented. That alternative is backed by a diverse group that includes The Bay Institute, the Contra Costa Council, Defenders of Wildlife, Environmental Entrepreneurs, the Planning and Conservation League, the Natural Resources Defense Council, the San Diego County Water Authority, Alameda County Water District, Contra Costa Water District, East Bay Municipal Utility District, Otay Water District, the City of San Diego and the San Francisco Public Utilities Commission. Promoters of that alternative alleges that it could produce “superior benefits at a similar or lower cost to water users and the public, and at reduced levels of environmental impacts,” by doing the following:

  • Increased water exports from the Bay-Delta in wet years and smaller water exports in dry years;
  • A North Delta diversion facility and tunnel for 3,000 cubic feet of water per second (as opposed to 9,000 cfs in the current BDCP);
  • Major statewide investments in water recycling, urban conservation, groundwater cleanup, capturing storm water and other local water supply development;
  • Improved physical connections between water agencies in the Bay Area, Central Valley and Southern California to aid the movement of water and to use infrastructure more efficiently;
  • New surface and/or groundwater storage south of the delta for storing wet-year deliveries for use in subsequent dry years;
  • Levee upgrades to protect people and infrastructure in the delta;
  • Delta floodplain and tidal marsh restoration on approximately 40,000 acres.

For more information:

http://baydeltaconservationplan.com/BDCPPlanningProcess/KeyAnnouncements.aspx

http://www.sacbee.com/2013/05/24/v-print/5446259/delta-protection-commission-opposes.html

http://www.acwa.com/news/delta/congressional-delegation-expresses-support-bdcp

http://www.acwa.com/sites/default/files/news/delta/2013/05/05-22-13_bdcp_support_process_letter.pdf

http://www.ibabuzz.com/politics/2013/05/30/house-members-blast-browns-delta-water-plan/?utm_source=feedly&utm_medium=feed&utm_campaign=Feed%3A+PoliticalBlotter+%28Political+Blotter%29

http://www.acwa.com/news/delta/coalition-calls-portfolio-based-alternative-be-analyzed-bdcp

 B.                 Water Quality

U.S. Supreme Court Decides NPDES Permit Is Not Required For Stormwater Discharges From Logging Roads.

On March 20, 2013, the U.S. Supreme Court in Decker v. Northwest Environmental Defense Center, (Mar. 20, 2013, Nos. 11-338 and 11-347) ___ U.S. ___, 2013 U.S. LEXIS 2373, handed down its much-anticipated opinion regarding stormwater runoff from logging roads. The Northwest Environmental Defense Center (“NEDC”) filed suit in September 2006 alleging that the defendants caused discharges of channeled stormwater runoff into two Oregon waterways without a proper NPDES permit. The U.S. District Court for the District of Oregon dismissed the suit for failure to state a claim, concluding that NPDES permits were not required because the ditches, culverts, and channels were not point sources of pollution under the Clean Water Act and the Silviculture Rule.

On appeal, the Ninth Circuit reversed the lower court decision, holding these conveyances to be point sources under the Silviculture Rule. The Ninth Circuit also concluded that the discharges were an industrial activity as defined in the Industrial Stormwater Rule.

Three days prior to oral arguments, the EPA finalized amendments to the Industrial Stormwater Rule that sought to clarify the types of silviculture activities that would require an NPDES permit. The amended regulation specified four activities that would fall within the NPDES process: rock crushing, gravel washing, log sorting, and log storage facilities.

The Court discussed whether the EPA’s interpretation of the Industrial Stormwater Rule was entitled to deference or whether the agency’s interpretation was “plainly erroneous or inconsistent with the regulation.” The Court acknowledged that the EPA had been consistent in its view that these types of discharges did not require NPDES permits. Furthermore, the EPA’s interpretation that the references to “facilities,” “establishments,” “manufacturing,” “processing,” and an “industrial plant” extends only to traditional industrial buildings or other relatively fixed sites was a reasonable interpretation. For these reasons, the Court reversed the Ninth Circuit decision and concluded that stormwater runoff from logging activities does not require an NPDES permit.

For more information:

http://blog.aklandlaw.com/2012/12/articles/water-quality-wetlands-clean-water-act/epa-tells-supreme-court-its-actions-were-suboptimal-but-the-oral-argument-on-the-challenge-to-epas-silvicultural-rule-raises-more-questions-than-it-answers/#more

EPA Cannot Establish TMDL for Stormwater as Proxy for Sediment

The U.S. District Court for the Eastern District in Virginia held that the U.S. Environmental Protection Agency did not have the authority under the Clean Water Act (“CWA”) to regulate flows of stormwater into a creek because stormwater did not qualify as a pollutant under the Act. In Virginia Department of Transportation v. U.S. EPA, 2013 U.S. Dist. LEXIS 981 (2013), EPA had established a total maximum daily load (“TMDL”) limiting stormwater flow rate into the creek in order to reduce the amount of sediment entering the creek. EPA viewed stormwater flows as a proxy for sediment, a pollutant under the CWA. The court focused on the plain language of the CWA in determining that EPA had exceeded the scope of its authority. The court explained: “EPA is authorized to set TMDLs to regulate pollutants, and pollutants are carefully defined. Stormwater runoff is not a pollutant, so EPA is not authorized to regulate it via TMDL. Claiming that the stormwater maximum load is a surrogate for sediment, which is a pollutant and therefore regulable, does not bring stormwater within the ambit of EPA's TMDL authority.”

Recently Adopted Waste Discharge Requirements for Growers Challenged

On December 7, 2012, the Central Valley Regional Water Quality Control Board (“Regional Board”) adopted a discharge permit for irrigated agricultural lands within the Eastern San Joaquin River watershed. (Order No. R5-2012-0016, Waste Discharge Requirements General Order for Growers in the Eastern San Joaquin River Watershed that are Members of the Third-Party Group (“WDR”).) The WDR seeks to implement the irrigated lands regulatory program for the watershed and rescinds the previously issued conditional waiver of waste discharge requirements for that area.

Three suits were filed against the WDR on January 7, 2013. Petitioners Asociación de Gente Unida por el Agua (“AGUA”) filed a claim on anti-degradation grounds. AGUA cited its recent successful challenge of waste discharge requirements for the discharge of dairy waste in Asociación de Gente Unida por el Agua v. Central Valley Regional Water Quality Control Board (2012) 210 Cal.App.4th 1255.

Petitioners San Joaquin County Resource Conservation District, California Farm Bureau, and the Southern San Joaquin Valley Water Quality Coalition, among others, filed suit alleging the Regional Board abused its discretion in adopting the WDR. The claim alleged violations of the California Environmental Quality Act (“CEQA”) and the Porter-Cologne Water Quality Act (“Porter-Cologne”).

Petitioners California Sportfishing Protection Alliance and California Water Impact Network also allege violation of the State Board’s anti-degradation policy, the State Board’s Nonpoint Source Policy, Porter-Cologne, and CEQA.

The petitions are available at: http://www.swrcb.ca.gov/public_notices/petitions/water_quality/petitions.shtml

Draft NPDES Industrial General Permit

The Industrial General Storm Water Permit regulates the storm water discharges from specific industrial sectors. Approximately 9,000 individual facilities are covered by the current permit. In 2012, the State Water Resources Control Board (“SWRCB”) made a number of changes to the Draft Industrial NPDES permit, including (1) numeric effluent limits were removed because SWRCB staff acknowledged that they lack information necessary to set them; (2) flexibility was added to the minimum BMP’s; (3) maximum inspections and visual observations were reduced from 361 to 49; and (4) a natural background report potential was added to reach Level 2 Numeric Action Level (NAL) exceedance status. The SWRCB anticipates that a new 2013 Draft Industrial General Permit and supporting documents will be released in July 2013, beginning a written comment period. Also a public hearing will likely be held in August 2013 for written comments on the new draft requirements. SWRCB staff anticipates that adoption of the Industrial General Permit will take place in late 2013 or early 2014, with an effective date of January 1, 2015. The new 2013 Draft Industrial General Permit and related documents will be posted here when available: http://www.waterboards.ca.gov/water_issues/programs/stormwater/industrial.shtml.

Lake Tahoe Water Quality Management Plan Approved.

The U.S. Environmental Protection Agency approved the Clean Water Act Section 208 Lake Tahoe Water Quality Management Plan, which provides a comprehensive framework for water quality management in the Lake Tahoe basin and includes provisions for land coverage limits. Managing the amount of impervious surfaces in the Lake Tahoe watershed, called land coverage, is a critical component of protection plans. Since 1987, the coverage rules meant some home improvements and expansions were infeasible. New ordinances were adopted by Tahoe Regional Planning Agency (“TRPA”) in December 2012 to create incentives for completing environmental improvements and upgrades to many of the Region’s older homes. According to TRPA, more than 90 percent of existing homes and businesses pre-date newer environmental guidelines and approximately 22,000 residential properties do not have certified water quality Best Management Practices (“BMPs”) to control erosion and filter stormwater. While all properties have been required to complete BMPs, most property owners install them only when they carry out a renovation or expansion project, which makes remodeling and reinvestment good for the lake because more of the existing development in the watershed becomes protected by BMPs. The EPA’s recent action completes the amendment process and brings into effect TRPA’s new ordinances. For the first time in a generation many properties with high capability soils may be able to plan for a modest expansion. Says TARPA’s Jeff Cowen: “These are properties that have been locked in place for generations by rules on land coverage and we think we will get a significant amount of environmental improvement and water quality restoration by having more properties come in and do their best quality management practices,” says Cowen.

For more information:

http://www.trpa.org/documents/press_room/2013/Coverage_Rules_6-20-2013.pdf

http://www.capradio.org/articles/2013/06/20/epa-relaxes-tahoe-rules/

Construction Stormwater Permit Technical Notices Available

The State Water Resources Control Board has made available technical notices regarding implementation and interpretation of the Construction General Permit (“CGP”). Issue 2013.1 covers how to average pH values for reporting and options for meeting stabilization criteria in the CGP. 

For more information: http://www.waterboards.ca.gov/water_issues/programs/stormwater/gen_const_faq.shtml

State Water Board Releases Nitrate Report

The State Water Resources Control Board (“State Water Board”) released its report containing recommendations to address nitrate-contaminated groundwater. The report was issued as part of efforts by the State Water Board to develop pilot projects focusing on nitrate contamination in groundwater in the Tulare Lake Basin and Salinas Valley.

The report cites agricultural activities as the largest source of nitrate contamination. The report relies on independent studies conducted by UC Davis, input from public meetings and stakeholder groups, and the Interagency Task Force as the foundation for its 15 recommendations. According to the report, the most critical recommendation is that a new funding source be established to ensure access to safe drinking water for all Californians. Many of the recommendations require a stable funding source in order to be effective.

For more information: http://www.waterboards.ca.gov/water_issues/programs/nitrate_project/index.shtml

 C.                Wetlands

Court of Appeals For D.C. Circuit Rules That, 4 Years After The USACE Issues A Section 404 Permit, The EPA May Withdraw The Disposal Site Specification In The Permit.

The Mingo Logan Coal Company (“Mingo Logan”) applied to the United States Army Corps of Engineers (“Corps”) for a permit under section 404 of the Clean Water Act (“CWA”), 33 U.S.C. § 1344, to discharge dredged or fill material from a mountain-top coal mine in West Virginia into three streams and their tributaries. The Administrator of the United States Environmental Protection Agency (“Administrator” or “EPA”) has “veto” authority over discharge site selection under CWA subsection 404(c), 33 U.S.C. § 1344(c). While EPA expressed the “significant and unavoidable environmental impacts” that were not adequately described in the draft Environmental Impact Statement for the project, EPA nevertheless declined to pursue a subsection 404(c) objection. EPA stated in an email to the Corps that the EPA had “no intention of taking [EPA’s] concerns any further from a Section 404 standpoint.” Without any objection from EPA, the Corps issued the permit to Mingo Logan on January 22, 2007, and approved the requested disposal sites for the discharged material. The permit expressly advised that the Corps “may reevaluate its decision on the permit at any time the circumstances warrant” and that “[s]uch a reevaluation may result in a determination that it is appropriate to use the suspension, modification, and revocation procedures contained in 33 CFR 325.7.” The permit made no mention of any future EPA action. 

However, on September 3, 2009, EPA wrote the Corps requesting it "use its discretionary authority provided by 33 CFR 325.7 to suspend, revoke or modify the permit is-sued authorizing Mingo Logan Coal Company to dis-charge dredged and/or fill material into waters of the United States in conjunction with the construction, operation, and reclamation of the [mine],” based on “new information and circumstances . . . which justif[ied] reconsideration of the permit.” The Corps responded that there were “no factors that currently compell[ed it] to consider permit suspension, modification or revocation.” Nevertheless, the EPA went forward with formal process for a determination to restrict or prohibit the discharge of dredged and/or fill material at the mine “consistent with our authority under Section 404(c) of the Clean Water Act.” On January 13, 2011, EPA formally withdrew the specifications of two of the streams as disposal sites, thereby prohibiting Mingo Logan from discharging into them.

Mingo Logan filed an action challenging EPA’s withdrawal of the specified sites on the grounds that (1) EPA lacked statutory authority to withdraw site specification after a permit has issued, and (2) EPA’s decision to do so was arbitrary and capricious in violation of the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 et seq. The U.S. District Court for the District of Columbia granted summary judgment to Mingo Logan on the first ground without reaching the second.   The District Court concluded EPA “exceeded its authority under section 404(c) of the Clean Water Act when it attempted to invalidate an existing permit by withdrawing the specification of certain areas as disposal sites after a permit had been issued by the Corps under section 404(a).” EPA appealed. On April 23, 2013, a 3-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit reversed the District Court and remanded the case. 

The Court of Appeals held in Mingo Logan Coal Company v. EPA, 714 F.3d 608 (D.C.Cir. 2013), that the EPA has the statutory authority under CWA section 404(c) “to withdraw a disposal site specification post-permit.” The Court of Appeals noted that subsection 404(c) authorizes the Administrator, after consultation with the Corps, to veto the Corps’s disposal site specification. The statute provides that the Administrator “is authorized to prohibit the specification (including the withdrawal of specification) of any defined area as a disposal site, and . . . to deny or restrict the use of any defined area for specification (including the withdrawal of specification) as a disposal site”—“whenever he determines” the discharge will have an “unacceptable adverse effect” on identified environmental resources. The court explained that such statutory language not only grants EPA “a broad environmental ‘backstop’ authority over the [Corps’] discharge site selection”; and such language “imposes no temporal limit on the Administrator’s authority to withdraw the Corps’ specification but instead expressly empowers him to prohibit, restrict or withdraw the specification “whenever” he makes a determination that the statutory “unacceptable adverse effect” will result.” Furthermore, “because the Corps often specifies final disposal sites in the permit itself--at least it did here, … EPA’s power to withdraw can only be exercised post-permit,” and a contrary interpretation would “render subsection 404(c)’s parenthetical ‘withdrawal’ language superfluous.” Thus, the court held that “the unambiguous language of subsection 404(c) manifests the Congress's intent to confer on EPA a broad veto power extending beyond the permit issuance,” which is an interpretation that EPA has “consistently maintained … for over thirty years.”

Mingo Logan argued that EPA’s and the Court of Appeal’s interpretation would trample on provisions in the CWA “that are intended to give permits certainty and finality.” However, the court responded: “[T]he Administrator retains authority to withdraw a specified disposal site ‘whenever’ he determines such effects will result from discharges at the sites. And when he withdraws a disposal site specification, as he did here, the disposal site’s ‘terms and conditions specified’ in the permit are in effect amended so that discharges at the previously specified disposal sites are no longer in ‘[c]ompliance with’ the permit--although the permit itself remains otherwise in effect to the extent it is usable.” 

On June 7, 2013, Mingo Logan filed a petition for rehearing en banc in order to have the case heard by all of the judges on the Court of Appeals for the D.C. Circuit on the grounds that EPA’s and the panel’s interpretation is “breathtaking,” “audacious,” “unprecedented” and “wrong.” That petition for rehearing is currently pending.

For more information:

http://wvrecord.com/news/s-3960-federal-court/260680-mingo-logan-coal-argues-for-rehearing-of-revoked-permit-case

The State Water Resources Control Board Releases Its Preliminary Draft Wetland Area Protection Policy.

Under the Federal Clean Water Act Section 404 (33 U.S.C § 1344), the “discharge of dredged or fill material into navigable waters at specified disposal sites” are restricted without a permit from the U.S. Army Corps of Engineers (“USACE”). (33 U.S.C § 1344(a); 33 C.F.R. § 323.2(d)(1).) After several court decisions narrowing the reach of federally jurisdictional waters, the State Water Resources Control Board (“SWRCB”) in 2008 formally recognized a need to protect surface waters in California no longer protected under the Federal Clean Water Act Section 404 program.

Under California’s Porter-Cologne Water Quality Control Act (Cal. Water Code § 13000 et seq.), SWRCB’s jurisdiction extends beyond the scope of the Federal Clean Water Act to “any surface water or groundwater” (emphasis added). Thus, SWRCB’s jurisdiction under Porter-Cologne extends beyond jurisdictional waters of the United States and may include isolated water not protected under the Federal Clean Water Act.

The SWRCB is implementing its Wetland and Riparian Area Protection Policy in three phases. The current Phase 1 effort is called the “Wetland Area Protection and Dredge and Fill Permitting Policy.” The purpose of Phase 1 is to protect all waters of the State, including wetlands, from dredge and fill discharges. It includes a wetland definition and associated delineation methods, an assessment framework for collecting and reporting aquatic resource information, and requirements applicable to discharges of dredged or fill material. As part of that Phase 1, the SWRCB released a Preliminary Draft Wetland Area Protection Policy (“Policy”) on January 28, 2013. According to the SWRCB, the Policy release is for informational purposes only since it is still moving through the process of internal review. The Policy is scheduled to be released with an environmental review document later in 2013 for public comment. The Policy includes four elements: (1) a wetland definition; (2) a wetland delineation method; (3) a wetland assessment and monitoring framework; and (4) authorization procedures for dredge and fill discharges to waters of the state.

For more information:

http://www.swrcb.ca.gov/water_issues/programs/cwa401/wrapp.shtml

D.                Air Quality

Lawsuits to Stop Cap-And-Trade Auction As Unconstitutional And Against AB 32

The California Chamber of Commerce filed a lawsuit against the California Air Resources Board (“CARB”) on November 13, 2012, in Sacramento County Superior Court (case no. 34-2012-80001313), on the ground that the California Global Warming Solutions Act of 2006 (Assembly Bill 32) does not authorize the California Air Resources Board to impose fees other than those needed to cover ordinary administrative costs of implementing a state emissions regulatory program. 

On April 16, 2013, the related case of Morning Star Packing Co. et al. v. California Air Resources Board was filed in Sacramento Superior Court Case (case no. 2013-80001464) by several petitioners, including a processor of bulk tomato products, an oil company, the California Construction Trucking Association, the Loggers Association of Northern California, the Construction Industry Air Quality Coalition, the National Tax Limitation Committee and individuals. Pacific Legal Foundation represents the petitioner. In Morning Star, the petitioner alleges that “[t]he revenues CARB has collected and intends to collect by auctioning emission allowances constitute illegal taxes levied on Californians in violation of the California Constitution, while the auctions generating such revenues are not authorized by AB 32.” Petitioner also alleges that the legislation enacted in 2012 to allocate the funds raised by the cap-and-trade auction is also unconstitutional because such legislation did not meet the 2/3rds requirement.

The CalChamber and Morning Star cases were consolidated, and a hearing on the merits on both cases is scheduled for August 28, 2013. 

Truckers Continue Legal Battle Against CARB

The California Construction Trucking Association (“CCTA”), formerly the California Dump Truck Owners Association (“CDTOA”), filed a lawsuit against the California Air Resources Board (“CARB”) in 2011 challenging CARB’s diesel engine regulations. The U.S. District Court dismissed the case, finding that the U.S. EPA was an indispensable party to the litigation and that the District Court no longer had jurisdiction over the case. CCTA filed their appeal with the Ninth Circuit on February 13, 2013.

For more information: http://dockets.justia.com/docket/circuit-courts/ca9/13-70562/

CARB Offset Rules Upheld by Superior Court

The cap-and-trade system developed by the California Air Resources Board (CARB) to implement the Global Warming Solutions Act of 2006 (AB 32) involves two types of compliance instruments: allowances and offsets. CARB issues allowances; one allowance gives someone the right to emit one ton of carbon. An offset, on the other hand, is created when a project not covered by AB 32’s requirements chooses to reduce its carbon emissions so it can sell the carbon savings to a covered project/operation; the covered project can then offset the non-covered project’s reduced emissions against its own carbon emissions. The objective is to outsource carbon reductions to those entities that can accomplish those reductions in the least costly fashion.

A key feature of offsets is that the additional reduction in carbon is supposed to be triggered by the financial incentive of being able to sell the offset to a polluter. CARB decided to adopt a standards-based approach to determining whether a project was eligible for an offset; if a project attained all relevant performance standards for that particular type of project…

Citizens Climate Lobby and Our Children’s Earth Foundation v. California Air Resources Board, Case No. CGC-12-519554 (“Citizens Climate Lobby”)____________________

New Regulation of Mobile Farm Equipment in San Joaquin Valley

In March 2013, the California Air Resources Board (CARB) held two public workshops to gain input on strategies to achieve both near-term and long-term reduction of diesel emissions from mobile farming equipment, such as tractors, harvesters, and combines. The initial rulemaking is aimed at enabling the San Joaquin Valley Air Pollution Control District (District) to attain compliance with the 8-hour ozone standard in the 2007 State Implementation Plan (SIP). The emphasis will be on incentivizing through subsidies the replacement of older equipment with the cleanest available technology (mainly Tier 3 off-road engines).

The second rulemaking involves developing strategies for the District to comply with the new eight-hour ozone standard that will have to be met under the next SIP. (The SIP is to be developed in 2014 and submitted to U.S. EPA in 2015.)  The San Joaquin Valley is not the only region of the State in need of a new SIP, but is the only region where controls on farming equipment are seen as a necessary component of achieving the required ozone reductions. Strategies aimed at achieving emission reductions for mobile farming equipment under the new SIP will likely be highly reliant on public-sector incentives, including financial subsidies to help fund acquisition of the cleanest technologies available.

For more information: http://www.arb.ca.gov/newsrel/newsrelease.php?id=414

E.                 Endangered Species Act

Federal Courts deny preliminary injunction against Mudflow Vegetation Management Project in the Shasta-Trinity National Forest

In Conservation Congress v. U.S. Forest Service, ___ F.3d ___, 2013 U.S. App. LEXIS 11900 (No. 12-16452, June 13, 2013), the Ninth Circuit Court of Appeals upheld a decision by the United States District Court for the Eastern District of California that denied a preliminary injunction sought by a plaintiff environmental group to enjoin the U.S. Forest Service’s authorization of a timber sale known as the Mudflow Vegetation Management Project in the Shasta-Trinity National Forest in California. Plaintiff alleged that federal agencies failed to adequately evaluate the effects of the Mudflow Project on the Northern Spotted Owl’s critical habitat in violation of the Endangered Species Act. The Ninth Circuit first held that the appeal was not rendered moot by a new 2013 habitat designation, and subsequent reinstatement of informal consultation between the United States Forest Service and the Fish and Wildlife Service, because that new designation and consultation continue the same governmental action challenged in the lawsuit; namely, the approval of the Mudflow Project without conducting a cumulative effects analysis. The appeals court also held that the District Court did not abuse its discretion when it determined that plaintiff failed to show a likelihood of success on the merits as to its Endangered Species Act claim that federal defendants arbitrarily or capriciously approved the Mudflow Project.

Delta Fish Species Population Resumes Decline

Beginning in 2002, populations of six fish species residing in the Sacramento-San Joaquin Delta began a drastic decline. The wet winter of 2011 improved aquatic habitat, leading to a halt in the decline. In the most recent fall midwinter trawl-net survey of the Delta, the gains made in 2011 have now been lost.

The annual fall count of six species, including the endangered Delta smelt, began in 1967. The abundance of these six species is considered to be a good indicator of the Delta’s ecological health. One species, threadfin shad, is not native to the Delta, but is nonetheless considered an important indicator of estuary health. Threadfin shad set a record population low during the 2012 survey.

The reason for the decline is unknown. Some cite the relatively low amount of precipitation in 2012 for the decline. Others, meanwhile, contend that water diversions for crops and human consumption are to blame. Water agencies that divert water from the Delta blame water pollution, habitat loss, and invasive species for the decline.

In December 2012, the U.S. Fish and Wildlife Service ordered pumping reductions to protect Delta smelt. The pumping reduction was in response to a large amount of smelt becoming entrained at the pumps. Fish and Wildlife staff said the pumping reductions helped protect smelt as the number of smelt killed declined drastically following the pumping reduction.

More information on the trawl-net survey results can be found at: http://www.dfg.ca.gov/delta/projects.asp?ProjectID=FMWT

 F.                 NEPA

Ninth Circuit Affirms Previously Approved Project Did Not Require Additional NEPA Review Following Period of Inactivity

In Center for Biological Diversity v. Salazar, 706 F.3d 1085 (9th Cir. 2013), the Ninth Circuit Court of Appeals held that the Bureau of Land Management (“BLM”) did not violate the National Environmental Policy Act (“NEPA”), Federal Land Policy and Management Act (“FLPMA”), or its own mining regulation (43 C.F.R. §§ 3809 et seq.) by allowing mining operations to resume following a 17-year period of inactivity. The decision is favorable for mining projects whose initial commencement of mining operations was previously subject to NEPA review and federal agency approval.

The case involved a uranium mine located in Mohave County, Arizona, approximately six and a half miles north of Grand Canyon National Park. The mine, known as the Arizona 1 Mine, was approved for exploration and development of mining claims by BLM in 1984. Importantly, the approved plan of operations included provisions in the event of an extended period of non-operation prior to completion of mining activities. The mine was actively worked until 1992 when the mine was placed on standby status. While the mine was inactive, ownership changed through sales and mergers. During the period of inactivity, the owners maintained the buildings, property, bonds, and taxes pursuant to the approved plan of operations.

In 2007, the mine owner notified BLM of its intent to resume mining operations. BLM directed the owner to obtain new air and water permits from state agencies, update its financial guarantee covering mine reclamation, and obtain various approvals from Mohave County. Before full mining operations began, environmental groups filed suit claiming that the 17 year period of inactivity rendered the approved plan obsolete and that NEPA requires BLM to supplement its prior Environmental Assessment.

The district court ruled in favor of BLM, finding that the operations plan was not ineffective and that BLM need not prepare supplemental NEPA documentation. The district court ruled in BLM’s favor on CBD’s other claims as well. CBD appealed.

The Ninth Circuit affirmed the lower court’s decision, holding that although approval of the 1988 operations plan was a “major Federal action” triggering NEPA review, the action was completed at the time the plan was approved. As such, the operational plan was not part of an ongoing major Federal action and no supplemental review was needed because NEPA review had been completed and the action approved. CBD argued that BLM’s requirement that the mine operator seek new air and water permits and other local approvals converted the mining operations to an ongoing action, but the Court disagreed.

This case is important for confirming that an agency cannot be required to perform supplemental NEPA review with respect to project approval decisions that have already been finalized, even where new information surfaces regarding the project’s environmental impacts. Also notable in the opinion is the holding that updating a financial guarantee is a ministerial action rather than a major Federal action triggering NEPA review. Finally, the opinion recognizes that a lead agency may use a Categorical Exclusion (“CE”) for actions that may fall within the CE guidelines and need only examine whether “extraordinary circumstances” exist that would prevent the use of a CE. Thus, this case furthers the efficiency of utilizing NEPA CE’s where available.

For more information: http://cdn.ca9.uscourts.gov/datastore/opinions/2013/02/04/11-17843.pdf

OPR Releases Draft Handbook for Joint NEPA/CEQA Review

In March 2013, The Governor’s Office of Planning and Research (“OPR”) released for public review a draft handbook for integrating NEPA and CEQA review. The document, NEPA & CEQA: Integrating Federal and State Environmental Review, was developed jointly by State and Federal agencies to improve the process when a project is required to meet the requirements of both statutes.

The handbook discusses the similarities and differences between NEPA and CEQA, acknowledging that the conflicts often result in confusion, delay, and legal vulnerability. The handbook also contains a section of common questions and answers, a framework for coordinating among multiple agencies, and specific guidance regarding projects seeking license from the California Energy Commission. Comments on the draft document were received by OPR through April 19, 2013.

For more information: http://opr.ca.gov/docs/NEPA_CEQA_Draft_Handbook_March_2013.pdf

G.                Mining / Oil & Gas

U.S. District Court Orders Greater Environmental Review of Oil/Gas Leases Over “Fracking” Concerns.

The fight over hydraulic fracturing (i.e., “fracking”) in California arises over the Monterey Shale formation, which the U.S. Government estimates contains as much as 15.4 billion barrels of oil, equal to 64% of the nation’s total shale oil reserve. A study by University of Southern California estimates that fracking would create 500,000 jobs in the State over the next several years and $24.6 billion in tax revenue in 2020 alone. Governor Jerry Brown calls it a “fabulous economic opportunity.”   However, an attorney for the Center for Biological Diversity expresses the concerns of the environmental community when he describes that oil as a “carbon bomb,” adding, “People have to start saying, ‘Nope, it stays in the ground,’ because of climate change, and that line ought to be drawn in California.”   Furthermore, many people are concerned about the risks of groundwater contamination and even seismic activity caused by fracking. Not surprisingly, the fight over fracking is taking place in the courts in California.

In Center for Biological Diversity v. Bureau of Land Management (N.D.Cal., No. 11-06174) 2013 U.S. Dist. LEXIS 52432, the U.S. District Court for the Northern District of California held on March 31, 2013, that the U.S. Bureau of Land Management (“BLM”) violated the National Environmental Policy Act when the BLM decided to sell four oil and gas leases for approximately 2,700 acres of federal land in Monterey and Fresno Counties without first preparing an Environmental Impact Statement. On cross-motions for summary judgment, the court found that the Environmental Assessment of the leases conducted by BLM in 2011 (“EA”) was erroneous as a matter of law because the BLM unreasonably relied on a 2006 proposed resource management plan/final environmental impact statement to arrive at a conclusion that no more than one exploratory well would be drilled in the total area of the leases. The court found that such a projection was not reasonable in light of the dramatically increased fracking activities in shale oil areas that even the BLM observed. The court noted, “The evidence before BLM showed that the scale of fracking in shale-area drilling today involves risks and concerns that were not addressed by the [2006] general analysis of oil and drilling development in the area.” While the EA briefly discussed fracking, the BLM improperly reserved its analysis of the impacts of fracking until applications for a permit to drill were submitted in the future. The court explained: “[I]t was unreasonable for BLM not to at least consider reasonable projections of drilling in the area that include fracking operations ….” Furthermore, the possible health risks from the chemicals involved in fracking, combined with the leased parcels’ proximity to important water resources, “should have been properly considered” by the BLM. The court concluded: “BLM argues that the effects of fracking on the parcels at issue are largely unknown. The court agrees. But this is precisely why proper investigation was so crucial in this case. BLM’s dismissal of any development scenario involving fracking as ‘outside of its jurisdiction’ simply did not provide the ‘hard look’ at the issue that NEPA requires.” The court will consider remedies in the case at a hearing that is scheduled for August 6, 2013. 

For more information:

http://news.nationalgeographic.com/news/energy/2013/05/130528-monterey-shale-california-fracking/

http://www.nytimes.com/2013/06/02/us/california-oil-and-ag-face-rift-on-fracking.html?pagewanted=all&_r=0

U.S. Bureau of Land Management Postpones Oil/Gas Lease Auctions Over Fracking Concerns, And Proposes New Fracking Rules For Federal Lands.

BLM announced that it would postpone all oil and gas lease auctions in California until at least October 2013. Although the official reasons cited for the postponement include budgetary issues, a key reason is likely the court’s ruling in the Center for Biological Diversity case, above.    Furthermore, the BLM issued a revised proposed rule on May 16, 2013, regarding fracking on federal and Indian lands for oil and gas production in response to over 177,000 public comments to the original proposed rule issued in 2012. Among other things, the revised rule provides more guidance on the disclosure of the chemicals used in the fracking process, and the trade secret protections for chemical compositions of the fracking fluids. Public comments may be submitted on the proposed regulations through June 2013.

For more information:

http://bigstory.ap.org/article/blm-postpones-oil-gas-lease-auctions-calif

http://www.blm.gov/wo/st/en/info/newsroom/2013/may/nr_05_16_2013.html

http://online.wsj.com/article/SB10001424127887324767004578488821344316236.html?mod=rss_opinion_main

http://www.blm.gov/pgdata/etc/medialib/blm/wo/Communications_Directorate/public_affairs/hydraulicfracturing.Par.91723.File.tmp/HydFrac_SupProposal.pdf

U.S. Environmental Protection Agency Studying Impacts Of “Fracking” On Drinking Water and Groundwater.

At the request of Congress, the U.S. Environmental Protection Agency is conducting a study to better understand any potential impacts of fracking on drinking water and ground water. The first progress report was released in December 2012. The EPA extended its deadline for the public to submit data and scientific literature to inform EPA's research until November 15, 2013. A final draft report is expected to be released for public comment in 2014.

For more information:

http://www2.epa.gov/hfstudy

“Fracking” Regulation Included In Pending Legislation In U.S. Senate

United States Senators Bernard Sanders and Barbara Boxer introduced Senate Bill 332 (“Climate Protection Act of 2013”) on February 14, 2013. Included in that bill is Section 301, which would require that, both before and after fracking operations are conducted, the person conducting the fracking operations must disclose to the applicable state a list of chemicals that are intended to be/have been used in any underground injection during the fracking operations.  

For more information:

http://beta.congress.gov/bill/113th-congress/senate-bill/332

Department of Conservation’s Division of Oil, Gas and Geothermal Resources Proposing New “Fracking” Regulations.

The California Department of Conservation’s Division of Oil, Gas and Geothermal Resources (“DOGGR”) released a “discussion draft” of regulations regarding the fracking process in December 2012. Those “discussion draft” regulations include provisions for pre-fracturing well testing, advance notification, monitoring during and after fracturing operations, disclosure of materials used in fracturing fluid, trade secrets, and storage and handling of hydraulic fracturing fluids. 

For more information:

http://www.conservation.ca.gov/dog/general_information/Documents/121712NarrativeforHFregs.pdf

http://www.conservation.ca.gov/dog/general_information/Pages/DDraftHFRegs.aspx

Legislation To Regulate “Fracking” Pending In California Legislature.

Several bills related to fracking were introduced in the California Legislature in 2013. On May 30, 2013, the Assembly rejected Assembly Bill 1323 on a bipartisan basis. AB 1323 would have placed a moratorium on fracking in the state until regulations adopted by DOGGR take effect. Thus, the only piece of fracking legislation in California that is still alive is Senate Bill 4 (Pavley (D-Agoura Hills), which passed the Senate on May 29, 2013, and is pending in the Assembly. Among other things, SB 4 would do the following: (1) Requires DOGGR to promulgate fracking regulations by January 1, 2015; (2) Requires that DOGGR receive 72-hour notice of a fracking job in order to witness the event; (3) Establishes a fracking permit system; (4) annual reporting to the Legislature on status of fracking in California; (5) Requires notification of property owners within 1,500 feet of the wellhead, or within 500 feet from the horizontal projection of all subsurface portions of the designated well to the surface, that hydraulic fracturing will occur; (6) Requires the Secretary of the Natural Resources Agency to commission a study on effects on water quality, air quality, and waste disposal of hydraulic fracturing, and as of January 1, 2015, no fracking permits can be issued until the scientific study is completed; (7) Requires disclosure of the chemical content of all fracking fluids to DOGGR, which chemical data DOGGR could share, as necessary with other regulators, emergency responders and health professionals; (8) Modifies the oil and gas production fee calculation to include the governmental costs associated with fracking activities and regulation; (9) Allows trade secret protection under the existing Uniform Trade Secrets Act; however, the supplier of the fracking fluid would still be required to disclose information to DOGGR, the trade secret would not be part of the public record, and DOGGR would not be permitted to disclose the trade secret information unless disclosure is necessary and required to protect health and safety; (10) Requires DOGGR to operate a Web site that makes available to the public all fracking fluid composition and disposition by January 1, 2016.

For more information:

http://articles.latimes.com/2013/feb/13/local/la-me-0213-fracking-20130213

http://capradio.org/4949?utm_source=feedly&utm_medium=feed&utm_campaign=Feed%3A+CapitalPublicRadioLatestNewsRSS+%28Capital+Public+Radio%3A+Latest+News+RSS%29

http://blogs.sacbee.com/capitolalertlatest/2013/06/single-fracking-bill-remains-before-california-legislature.html

http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0001-0050/sb_4_cfa_20130528_175207_sen_floor.html

 Senate Bill 447, Regarding Mines For Approved Aggregate Sources, Is Pending In The Assembly.

The California Legislature is currently considering two key bills related to mining. Senate Bill 447 (Lara-Long Beach) would improve processes for listing and de-listing mines from the State’s 3098 list for approved aggregate sources. SB 447 passed out of the Senate and is pending in the Assembly Natural Resources Committee. 

For more information:

http://www.leginfo.ca.gov/pub/13-14/bill/sen/sb_0401-0450/sb_447_bill_20130701_status.html

New Director Confirmed for California’s Department of Conservation

On January 14, 2013, the California State Senate confirmed Mark Nechodom as Director of California’s Department of Conservation. Prior to his appointment by Governor Jerry Brown, Nechodom spent many years working in various roles with the U.S. Department of Agriculture.

H.                Cultural Resources

Court Dismisses Ocotillo Wind Energy Facility Challenges

On February 27, 2013, the U.S. District Court for the Southern District of California in Quechan Tribe of the Fort Yuma Indian Reservation v. United States Department of the Interior et al., 2013 U.S. Dist. LEXIS 27069 (S.D. Cal. Feb. 27, 2013), rejected the Quechan Tribe’s suit challenging the proposed Ocotillo Wind Energy Facility (“OWEF”) Project. The Tribe brought suit in 2012 claiming that the Bureau of Land Management’s (“BLM”) approval of a Record of Decision (“ROD”) for the project violated the National Historic Preservation Act (“HNPA”), Federal Land Policy and Management Act (“FLPMA”), and the National Environmental Quality Act (“NEPA”).

In its NHPA claim, the Tribe alleged that BLM failed to identify all historic resources prior to approval of the ROD, and failed to consult the Tribe. The court reviewed the administrative record and determined that archaeological surveys were conducted in the area of direct impact, thus satisfying the requirement for identifying historical resources. The court also found that BLM sought to engage the Tribe throughout the development process. In fact, the Tribe was invited to and participated in archaeological surveys.

The Tribe’s FLPMA claim alleged that the OWEF Project does not comply with the limited use designation within the California Desert Conservation Area (“CDCA”) Plan, violates the Visual Resource Management (“VRM”) standards, and will result in unnecessary and undue degradation of public land. The court rejected these claims finding that the Tribe failed to demonstrate that the OWEF Project would significantly impact sensitive resources. The court considered that numerous mitigation measures, a reduction in the number of turbines, and the small project footprint all contributed to the basis of BLM’s decision to adopt the ROD.

The Tribe alleged that BLM was required to analyze six energy projects planned for the CDCA within a single environmental impact statement (“EIS”). The court held that the Tribe failed to show sufficient connection between the project that would support the need for combined analysis. Finally, the court held that BLM’s analyses and conclusions were not arbitrary, capricious, or an abuse of discretion.

On February 27, 2013, the U.S. District Court also dismissed Desert Protective Council v. U.S. Department of the Interior, No. 12cv1281-GPC(PCL) (S.D. Cal. Feb. 27, 2013), a companion case to the Quechan Tribe lawsuit. The Plaintiffs, an environmental group and a labor union, alleged violations of NEPA, FLPMA, and the Bald and Golden Eagle Protection Act (“BGEPA”). The Plaintiffs challenged the availability and adequacy of scientific studies that supported BLM’s decision.

The court rejected the Plaintiffs’ arguments deferring to BLM’s scientific methodology. Citing the BLM’s robust and comprehensive administrative record of the agency’s studies and actions, the court deferred to BLM’s expertise in the subject matter.

I.                   Miscellaneous

New Leadership for Environmental Organizations

California State Senator Jerry Hill (D-San Mateo) was confirmed in January 7, 2013 as the new chair of the California Senate Committee on Environmental Quality. The Committee on Environmental Quality routinely considers bills on water and air pollution, toxic materials, and other environmental concerns. The selection was made by Senate Pro Tem Darrell Steinberg (D-Sacramento) as replacement for Sen. Michael Rubio who resigned in February. Sen. Hill has been involved in environmental affairs for many years, serving on the California Air Resources Board and the Bay Area Air Quality Management District.

For more information:

http://sd13.senate.ca.gov/news/2013-01-07-jerry-hill-confirmed-chair-state-senate-s-democratic-caucus-and-banking-committee

 On March 4, 2013, President Barack Obama nominated Gina McCarthy to replace outgoing EPA chief Lisa Jackson. McCarthy currently serves as EPA’s Assistant Administrator for the Office of Air and Radiation. McCarthy’s appointment requires Senate confirmation. The Senate Committee on Environment and Public Works approved McCarthy’s nomination, and sent the matter to the Senate floor, where a hold is on her nomination vote.

For more information:

http://articles.washingtonpost.com/2013-05-16/national/39303593_1_senate-vote-gina-mccarthy-committee

If you have any questions about this article, contact Diane Kindermann, William Abbott, Glen Hansen or Katherine Hart. The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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