2014 Saw A Wave of Environmental Law Changes (Daily Journal)
By David Metres, K. Oehlschlager
December 19, 2014
The following article was originally published in the Los Angeles/San Francisco Daily Journal on December 19, 2014. ©2014 Daily Journal Corporation. Reprinted with permission.
2014 Saw A Wave of Environmental Law Changes
By David Metres and Kathryn Oehlschlager
The past year saw several developments in environmental law at both state and federal levels, particularly regarding water supply, water quality and regulation of greenhouse gas emissions. As federal regulators tightened the reins on air emissions from power plants, California saw a major shift in the regulation of water supply. Meanwhile, controversy over hydraulic fracturing rages on, with industry hoping to access deposits in the Monterey Shale without running afoul of California's new regulatory scheme. The wave of significant change will no doubt ripple into 2015 and beyond.
Water Rights and Quality
Water was on everyone's minds in California this year, with extreme drought conditions spawning a litany of lawsuits and driving comprehensive reform of groundwater law. Most notably, a sea change is occurring in the regulation of groundwater - which accounts for about a quarter of California's water supply and which, until now, went almost entirely unregulated.
In April, the Legislature passed the Sustainable Groundwater Management Act, creating a brand-new, comprehensive regulatory program designed to ensure California's groundwater is "managed sustainably for long-term reliability and multiple economic, social and environmental benefits for current and future beneficial uses." The act will be implemented primarily through local groundwater sustainability agencies that will have authority to track groundwater extraction, impose extraction and well-drilling limitations, allocate water to individual users, and collect fees from users for program implementation.
Meanwhile, a superior court judge found that the rarely invoked public trust doctrine applies to groundwater in the agriculture-heavy region of Scott Valley in Siskiyou County. Although the court stopped short of finding that the doctrine applies to groundwater in general - instead limiting it to extraction of groundwater that harms "the public's right to use those navigable waters for trust purposes" - the threat of litigation looms large, as plaintiffs will undoubtedly seek to apply the doctrine to groundwater in other parts of the state.
Regarding surface water, in April the State Water Resources Control Board finalized the long-awaited revision to the National Pollutant Discharge Elimination System permit that regulates stormwater discharges associated with industrial activity, known as the "Industrial General Permit." The revision - changing the requirements for the first time in 17 years - will undoubtedly yield a new wave of citizen suits against the over 10,000 industrial facilities that operate under the permit.
Finally, at the federal level, Clean Water Act jurisdiction continues to make regulatory waves, with the Environmental Protection Agency and the U.S. Army Corps publishing a proposed rule further defining the term "waters of the United States," delineating the scope of waters subject to federal jurisdiction. Although the EPA says the revision provides "greater clarity" with respect to which waters are subject to federal regulation, the regulated community doesn't agree. They say the rule relies on flawed science, goes beyond congressionally granted authority, and is inconsistent with the two seminal Supreme Court cases on the subject: SWANCC v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001), and Rapanos v. U.S., 547 U.S. 715 (2006). The rule is still in draft form but, if adopted, will profoundly change the contours of the federal government's regulation of waters and wetlands.
In the first days of 2014, California began implementing its comprehensive fracking law. The California Department of Oil, Gas and Geothermal Resources (DOGGR) issued interim regulations, effective Jan. 1, 2014, requiring anyone planning to engage in well fracturing in California to, among other things, certify well integrity, provide advance notice to DOGGR and neighbors, and disclose all chemicals used to fracture the well.
The bill has been lauded by many as an admirable compromise between industry and environmental groups, but fracking opponents are pushing for a moratorium. And while that battle continues in Sacramento, local governments have addressed the issue head-on. San Benito and Mendocino Counties passed bans on hydraulic fracturing and similar practices in November, but - as expected - industry is fighting back. An oil exploration company appears poised to sue in San Benito, having presented a $1.2 billion claim to the County Board of Supervisors for lost extraction opportunities on land within the county. In this long-anticipated battle, the company is expected to argue that the local ban is an improper exercise of police power and is preempted by the comprehensive framework established by Senate Bill 4.
Climate Change and Air Quality
Efforts to address climate change continued to make headlines in 2014. In November, President Barack Obama and Chinese President Xi Jinping signed a historic "Joint Announcement on Climate Change," forging a union between the U.S. and China - the world's two largest greenhouse gas emitters - to work together on climate change efforts. The announcement commits both countries to achieving significant reductions in greenhouse gas emissions by 2025 and 2030 and sets the stage for a broader multilateral agreement at the 2015 Paris meeting of the United Nations Climate Conference.
This year, on the heels of 2013's carbon pollution standard for new power plants, the EPA released the proposed Clean Power Plan, which would be the first federal rule to regulate carbon dioxide emissions from existing power plants. If finalized, commentators have predicted that the standard and the plan - along with the Mercury and Air Toxics Standards - could render new coal power plants financially infeasible.
The Supreme Court also weighed in on climate change issues. In Utility Air Regulatory Group v. EPA, 134 S.Ct. 2427 (2014), the court invalidated the EPA's "tailoring rule" related to regulation of greenhouse gas emissions from stationary sources. The court ruled that the EPA cannot require a source to obtain a Clean Air Act permit on the sole basis of its potential greenhouse gas emissions. The court, however, affirmed the agency's decision to require emissions controls for greenhouse gases emitted by sources otherwise subject to Clean Air Act permitting requirements.
Early in the year, a federal appeals court upheld the EPA's Mercury and Air Toxics Standards for power plants, which set emissions limits for mercury and particulate matter for over 600 power plants nationwide at an estimated cost of $9.6 billion annually. The Supreme Court agreed to review the case in November, and a decision is expected in 2015. In another win for the EPA, the Supreme Court also upheld the Cross-State Air Pollution Rule in EPA v. EME Homer City Generation, 134 S. Ct. 1584 (2014), deferring to the EPA's technical expertise.
TCE Remediation and Vapor Intrusion
Rarely does regulatory action significantly impact as many sites as EPA Region 9's reassessment of trichloroethylene (TCE), an organic solvent that is a chemical of concern at over 800 of the 1320 federal Superfund sites in the U.S. For the past decade, regulators evaluated potential exposure to TCE via vapor intrusion - volatilization of chemicals into overlying buildings - using standards based upon the impacts of TCE via long-term exposures (25 years or greater).
On July 9, EPA Region 9 issued a memorandum - without conducting any public review-reinterpreting prior toxicology to conclude that there is a significant public health concern associated with very short periods of exposure (i.e., days) to very low concentrations of TCE. The memo sets exposure limits that are orders of magnitude lower than current state and federal workplace regulations for exposure to TCE and calls for drastic measures, such as evacuation of existing buildings, where necessary to protect public health. Even though the toxicology upon which the memo relies is very controversial, California regulators have now adopted it, and the cost of investigations at TCE sites has skyrocketed.
Finally, some of the biggest news of the year related to wildlife came in September with the release of the Desert Renewable Energy Conservation Plan by state and federal regulators. If finalized, the DRECP would establish a renewable energy and conservation plan governing over 22 million acres of land in Southern California. Unprecedented in scope and complexity, the plan is emblematic of the move toward landscape-scale conservation planning efforts as a tool to conserve imperiled species while providing certainty for states, counties, and regulated entities.
Many observers expect that 2014 will be looked back on as a groundbreaking year in climate change policy - including an international accord, federal greenhouse gas regulations, and significant court decisions. In California, the year will be especially remembered for water issues: extreme drought, a $7.5 billion water bond, big changes in groundwater law, and regulation of hydraulic fracturing. Taken together with new developments related to vapor intrusion, landscape-scale conservation plans, and air quality regulation, 2014 has been a year to remember.
Kathryn L. Oehlschlager is a partner with Barg Coffin Lewis & Trapp LLP and David M. Metres is an associate with the firm.