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WOTUS Woes - Federal Judge Remands Obama-Era CWA Rule
by outdoorwire. 06/11/19 06:29 PM
Sidley Environmental Trends
by outdoorwire. 06/11/19 06:21 PM
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All About Water
06/11/19 06:29 PM
Last week, a federal district judge in Texas remanded the Obama-era Waters of the United States rule to the EPA and U.S. Army Corps of Engineers (US ACE), citing the agencies’ failure to use proper procedure when publishing the rule.

​The 2015 rule, generally referred to as WOTUS, allowed for a drastic increase to the reach of the Clean Water Act (CWA), in part, by defining “waters of the United States” to include waters adjacent to waters that had traditionally been considered covered by the CWA. Under the WOTUS definition, the CWA’s jurisdiction extended to any area where water is found at any time so long as that water flows on the surface or below the surface to an otherwise recognized WOTUS. Application of WOTUS has been delayed by litigation in courts around the country, and the EPA under the current administration has worked to defang or dismantle the rule.

​In the most recent court decision regarding WOTUS, the Southern District of Texas ruled that EPA and US ACE violated the Administrative Procedure Act when they promulgated WOTUS. The proposed version of the rule, on which the public was invited to comment, defined adjacent waters in terms of a hydrologic connection, but the final rule defined adjacent in terms of distance. The court found that the altered definition in the final rule deviated from the proposed rule in a way that interested parties could not have reasonably anticipated, leading to a final rule that was different in kind and degree from the proposed rule. In addition, the agencies received scientific studies that served as a basis for the rule after the comment period for the rule had ended, meaning interested parties had no opportunity to comment on the studies.

​Notably, the court did not vacate the WOTUS rule. Instead, the court remanded the rule to the agencies for corrections to the administrative procedure. While the rule has been in court, the current EPA has published a proposed rule to rescind the Obama-era version of WOTUS, and the EPA reports that it anticipates taking a final action on that proposal this summer.

The attorney general of Texas hailed the court’s decision as a win for property owners hoping to avoid federal regulation of ponds, puddles, and streams. However, environmental groups were quick to point out that the decision said nothing about whether WOTUS protected too many waters inappropriately – it was only a procedural ruling.

The lesson, as is often the case, is to stay tuned. No matter what the final status of WOTUS, it will have a significant effect on the scope and impact of the CWA.

Source: Lexology
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Access Roundtable
06/11/19 06:21 PM
Topics discussed this week include:

EPA to allow sales of higher ethanol fuel in the summer
EPA finalizes guidance on PM2.5 requirements
Clean Water Rule remanded by one federal court, held in effect by another
EPA Administrator issues memo on cost-benefit analysis in rulemakings

EPA to allow sales of higher-ethanol fuel in the summer. On May 30, the Environmental Protection Agency (EPA) released its final rule to allow the sale of gasoline blended with up to 15% ethanol, known as E15, year-round. This final rule effects a 2018 directive from the White House to extend the Clean Air Act one-pound-per-square-inch Reid Vapor Pressure waiver that currently applies to E10 (gasoline containing up to 10% ethanol) during the summer ozone season (i.e., May 1 to September 15). In so doing, EPA is interpreting E15 to be “substantially similar” to Tier 3 E10 certification, under CAA § 211(h)(4), and making several other regulatory changes to allow E15 to be made, sold and distributed in parity with E10. Second, EPA has adopted renewable identification number (RIN) market reforms to discourage the accumulation of market power. EPA will now require public disclosure of RIN holdings by an individual exceeding specified limits and will require reporting of additional price and affiliate data.

EPA finalizes guidance on PM2.5 requirements. On May 30, EPA issued final guidance on fine particulate matter (PM2.5) precursor demonstrations. The guidance is intended to allow state, local and tribal air agencies to develop optional PM2.5 precursor demonstrations in line with the PM2.5 State Implementation Plan (SIP) Requirements Rule for areas designated as nonattainment for any PM2.5 National Ambient Air Quality Standard (NAAQS). Under the PM2.5 SIP Requirements Rule, air agencies could submit an optional precursor demonstration designed to show that precursor emissions from a source within a specific PM2.5 nonattainment area do not contribute significantly to PM2.5 levels that exceed the NAAQS in that area. If EPA approves the demonstration, then that precursor might be excluded from certain control requirements otherwise applicable.

Clean Water Rule remanded by one federal court, held in effect by another. On May 28, the U.S. District Court for the Southern District of Texas held that the Clean Water Rule, or the Waters of the United States Rule (WOTUS), was too different in the final version from the proposed version. In particular, the court noted that the final rule was “the first time that the agencies gave notice that they intended to define adjacency by precise physical distance-based criteria — rather than the ecologic and hydrologic criteria in the proposed rule.” The court called the change “significant [because] it alters the jurisdictional scope of the act.” The court also noted that EPA and the Army Corps of Engineers, the agencies issuing WOTUS, released a final version of a key scientific report after the public comment period for the rule was already closed. According to the court, this report was “the most critical factual material used to support the final rule.” Thus, the public was deprived of a meaningful opportunity to comment, in violation of the Administrative Procedure Act. The rule was remanded to EPA and the Army Corps, who are already working toward replacing the rule by the end of the year. Separately, on May 29, the United States District Court for the Northern District of Oklahoma held that the rule could remain in place in Oklahoma, rejecting arguments that the rule should be stayed in that state because it would cause “irreparable harm.”

EPA Administrator issues memo on cost-benefit analysis. On May 21, EPA Administrator Andrew Wheeler issued a memo directing agency leadership to develop rules for notice and comment that outline how benefit-cost considerations will be applied to future rulemakings. The memo outlines four principles for EPA offices to follow: (i) ensuring the agency balances benefits and costs in regulatory decision-making, (ii) increasing consistency in interpreting statutory terminology (e.g., practical vs. appropriate vs. feasible), (iii) providing transparency in the weight afforded to various factors in regulatory decisions and (iv) promoting best practices in technical analyses following sound economic and scientific principles.

Source: Lexology
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Access Roundtable
06/11/19 06:12 PM
The Commission on Catastrophic Wildfire Cost and Recovery (“Commission”) has released a draft report assessing the issues surrounding catastrophic wildfires in California and recommending major changes to the law (“Draft Report”). The Draft Report builds upon the concepts to address wildfire risk previously outlined in the “Wildfires and Climate Change: California’s Energy Future” report by Governor Gavin Newsom’s wildfire strike force. The Commission is set to discuss, consider, and hear public comment on the Draft Report at its June 7, 2019 meeting in Sacramento, CA.

The Commission was established last year by Senate Bill 901 (Dodd) and is required to provide a report to the Legislature and the Governor “containing its assessment of the issues surrounding catastrophic wildfire costs and damages, and making recommendations for changes to law that would ensure equitable distribution of costs among affected parties” on or before July 1, 2019. The Governor has previously called for wildfire legislation to be passed before lawmakers take a month-long summer recess on July 12, 2019.

The Draft Report consists of an executive summary compiled by Commission staff and three individual workgroup reports (each prepared by a different pair of Commissioners) focused on (1) utility wildfire liability, (2) wildfire funding mechanisms, and (3) homeowners insurance and wildfire mitigation issues. The Draft Report makes the following major recommendations for consideration before entire Commission at the June 7 meeting:

Inverse Condemnation Standard – The Draft Report recommends changing the current strict liability standard under the doctrine of inverse condemnation for electric and water utilities to a fault-based negligence standard. However, the Draft Report does not address previous concerns regarding the constitutionality of any such legal change from the Legislature or how it would be accomplished. Additionally, the Governor and some Legislators have already expressed hesitations since the release of the Draft Report regarding whether they will take up the recommendation to change the current strict liability framework at this time.
Prudent Manager Standard – The Draft Report presents three options for reforming the prudent manager standard applied by the California Public Utilities Commission in evaluating cost recovery applications for wildfire costs: (1) shifting the burden of proof for showing prudent management, (2) refining and shifting the weighting of existing factors for cost recovery, or (3) creating a limitation on shareholder liability if shareholders make an upfront contribution to a Wildfire Victims Fund.
Electric Utility Wildfire Board – The Draft Report proposes to establish an Electric Utility Wildfire Board which consolidates governance of all utility catastrophic wildfire prevention and mitigation into a single entity separate from the California Public Utilities Commission. This entity would set and enforce safety standards, and implement, administer and adjudicate fault-based standards for both investor-owned utilities and publicly-owned utilities.
Wildfire Victims Fund – Absent changes to the strict liability application of inverse condemnation, the Draft Report recommends establishing a large and broadly sourced Wildfire Victims Fund (“Fund”) to socialize wildfire costs more quickly and equitably and maintain the health of the state’s utilities. The Draft Report recommends that participation in the Fund be voluntary, with the Fund paying claims in excess of the mandated, combined commercial insurance and deductible, up to a cap. The claims paying capacity of the Fund would be structured as a “layer-cake” or “tower” of different forms of claims paying capacity.
Insurance – The Draft Report makes a number of insurance-related recommendations, including to preserve the State’s risk-based approach to pricing insurance, improve the California FAIR Plan, and increase the claims cap for the California Insurance Guarantee Association. The Draft Report also makes several recommendations to create new or extended requirements for insurers and the California Department of Insurance with respect to wildfire risk, including the enactment of new data gathering obligations.
Wildfire Mitigation – The Draft Report makes several recommendations regarding wildfire mitigation, including: (1) establishing a Wildfire Vulnerability Risk and Reduction Coordinator within the Governor’s Office of Planning and Research, (2) increasing State investment in wildfire prevention and mitigation efforts, (3) making private property maintenance laws more consistent, (4) clarifying the responsibility of local firefighting capacity when local governments approve new developments, and (5) establishing a development fee for new construction in the wildland-urban interface.

Source: Lexology
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All About Water
06/11/19 05:42 PM
Months ago, in the face of “unacceptably high” risk to the Colorado River’s complex system of reservoirs, US Bureau of Reclamation Commissioner, Brenda Burman, indicated that if the seven Colorado River Basin States could not agree to a drought contingency plan (DCP), then the federal government would post a notice in the federal register seeking comments from the states on the best course of action, and then unilaterally decide how to manage the river under fast-approaching shortage conditions. On March 19, 2019, with the endorsement of the US Department of the Interior, the seven Basin States and key stakeholders formally submitted the Colorado River Basin DCP to Congress for immediate implementation. In response to their March 19 letter, Congress invited the Basin States’ representatives to testify on March 28, 2019 on the need for the DCP.

During their testimony, the Basin States and Commissioner Burman aligned in characterizing the DCP as necessary to avoid crisis. Commissioner Burman described the Colorado River as the “most vital resource to the environment and the economy of the Southwest,” and contended that the DCP was a “seven-year insurance policy” designed to avert crisis, not a plan to keep the basin out of inevitable shortage. There was also a consistent recognition among Basin State Representatives that climate change is driving shortages and a lack of predictability on the Colorado River. John Entsminger, of the Southern Nevada Water Authority, pointed out that the Western United States’ high snowpack in 2018-19 should be taken as evidence of the wide fluctuations in weather patterns that are expected to accompany climate change, rather than the end of a decades-long drought.

As the Basin representative for Colorado, and Squire Patton Boggs attorney and policy advisor, James Eklund pointed out during his Congressional testimony, the DCP provides tools to strategically manage water resources above Lake Powell, allowing more storage in Lake Powell and more operational flexibility throughout the system. Eklund also testified “It’s business as usual for applicable Records of Decision and Biological Opinions under the National Environmental Policy Act and the Endangered Species Act. Nor are we asking you to enlarge or add to the Secretary of the Interior’s authority – quite the opposite: Any Upper Basin demand management program will be at the discretion and under the control of the respective states, implemented under state law.”

Representative Tom McClintock (R-CA 4th District) observed during the hearing, “we’d be well advised to show a little humility and defer do the judgment of the seven basin states.” Congress heeded this advice. On April 8, 2019, bipartisan legislation authorizing the US Department of Interior to implement the DCP easily passed through Congress, setting the Basin States up to accomplish their articulated goal of executing DCP agreements by April 22, 2019. There is urgency to have legislation by the end of April because doing so will trigger the Water Scarcity Plan, which will allow the United States’ southern neighbor, Mexico, to store water in Lake Mead during the next water year, allowing operational flexibility of the Colorado River. Last week, President Trump signed the bill, a mere week after the bill passed through Congress.

While the DCP is by no means a panacea, it keeps the door open for more constructive solutions and proactive river management. As drought and the effects of climate change impact the Colorado River Basin, communities brace for a drier and less certain future, which will require innovation and likely lead to future litigation over water supply, water quality, ecosystems, and other issues. The DCP is one of many efforts to proactively manage a multi-state resource and avert regional crisis.

Source: Lexology
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Legal Issues
05/22/19 06:55 PM
Ninth Circuit Rejects Enviro Challenge to Forest Service’s Motorized Big Game Retrieval Plan

On May 6, 2019, the U.S. Court of Appeals for the Ninth Circuit rejected environmental groups’ challenges to travel management plans issued by the U.S. Forest Service (Service) pursuant to the Service’s Travel Management Rule in three Ranger Districts in the Kaibab National Forest: the Williams, Tusayan and North Kaibab Ranger Districts. WildEarth Guardians, et al. v. Provencio, No. 17-17373 (9th Cir. May 6, 2019). The court of appeals concluded that the Service’s actions were not contrary to the Travel Management Rule and complied with the National Environmental Policy Act (NEPA) and the National Historic Preservation Act (NHPA).

Pursuant to the Travel Management Rule, the Service specifies a road system in national forest areas together with restrictions on the types of vehicles that can be used and the manner in which those vehicles can be used. In the three Ranger Districts at issue, the Service crafted travel management plans outlining the extent to which motorized traffic off of designated routes could be employed for camping and for retrieval of certain types of legally hunted and tagged big game. The plaintiffs — several environmental groups — challenged the Service’s actions because the affected roads were in areas that allegedly contained protected species. The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of the Service.

The appellate court found that the Service’s plans did not violate the Travel Management Rule because the new restrictions were a limited use of motorized vehicles on a defined set of roads and did not contravene the plain terms of the Rule.

As to plaintiffs’ NEPA claims, the court of appeals upheld the Service’s decision to issue an Environmental Assessment as opposed to an Environmental Impact Statement (EIS). An EIS was not required because the Service rationally concluded that the environmental effects were not sufficiently significant to require preparation of an EIS:

In reaching its conclusions that none of the impacts cited by Plaintiffs were sufficiently significant to require the preparation of EISs, the Forest Service did not “rel[y] on factors Congress did not intend it to consider, ‘entirely fail[] to consider an important aspect of the problem,’ or offer[] an explanation ‘that runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’” … Instead, the evidence in the record indicates that, although the EAs acknowledged that motorized big game retrieval might have negative impacts on the environment, the Forest Service’s determination that these impacts would not be significant evinced “a rational connection between the facts found and the conclusions made.” … Therefore, its conclusions were not arbitrary and capricious, and the Forest Service did not violate NEPA by declining to prepare EISs based on the plans’ environmental impacts.

Slip op. at 28 (citations omitted).

The court also rejected the plaintiffs’ assertion that the Service’s actions contravened the NHPA:

The NHPA—and NEPA—“create obligations that are chiefly procedural in nature.” … Even if cultural resources might be harmed as a result of motorized big game retrieval, that fact alone does not indicate that the Forest Service violated the NHPA. The Forest Service conducted the required prefield work, consulted with the appropriate entities, and reached a determination consistent with the evidence before it—in short, satisfied its procedural obligations.

Slip op. at 42 (citations omitted).

Source: Lexology
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Access Roundtable
05/22/19 06:44 PM
New U.S. Office of Management and Budget Memo Changes Processes for Data in Agency Rulemakings and Other Actions

On April 24, 2019, the U.S. Office of Management and Budget (OMB) issued a memorandum to executive departments and agencies that revises the standards for information used in regulatory functions (Memorandum) with potentially dramatic consequences for the scientific studies and analyses used in certain rulemaking, risk assessments and policy or guidance documents. The Memorandum updates OMB’s Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility and Integrity of Information Disseminated by Federal Agencies, 67 Fed. Reg. 8452 (Feb. 22, 2002) (2002 Guidelines), which interpreted agency responsibilities under the Information Quality Act, 44 U.S.C. § 3516. Agencies, including the Environmental Protection Agency (EPA), the Department of the Interior, the Food and Drug Administration (FDA), and the Department of Health and Human Services have their own information quality guidelines that implement OMB’s 2002 Guidelines.

The 2019 Memorandum directs agencies to expand peer review processes, to increase public access to data, to ensure reproducibility of analyses and to make the request for correction process more responsive. The majority of the changes apply to “influential information,” which the 2002 Guidelines define as information that could have a substantial impact on important public policy or private-sector decisions. Agencies retain discretion to designate which information is influential without review by OMB.

In the environmental context, “influential information” could include analyses supporting Clean Air Act standards for certain pollutants, chemical risk assessments or other rules or policy documents related to substances or pollutants of high public concern.

In the FDA setting, agency guidance has defined “influential information” as “disseminated information that results from or is used in support of agency actions that are expected to have an annual effect on the economy of $100 million or more or will adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities.” FDA has explained that because this definition pertains to the information rather than to the action the information may support, even where an FDA action is itself very important, individual pieces of information supporting it may or may not be considered “influential.” FDA has cited the information disseminated with respect to quality mammography standards and to hazard analysis and critical control point procedures for the safe and sanitary processing and importing of juice as two examples of influential information.

Key aspects of the recent Memorandum:

Increased access to data. The 2002 Guidelines require that influential analyses must be disseminated with sufficient details to allow third-party reproduction with specific details on the uses and limitations of data sets. The Memorandum now directs agencies to provide wider access to data, models and analyses used for influential information, as well as any specialized computer code used, if consistent with applicable law and policy. Additionally, agencies should provide the underlying assumptions, uncertainties and probabilities associated with influential information. This may mean that parties interested in rulemaking may have even greater access to data sets used by agencies and their contractors in those proceedings.

Expanded peer review processes. The Memorandum instructs agencies to ensure compliance with the OMB’s Final Information Quality Bulletin for Peer Review, issued in 2004. Compliance with the bulletin was already required under the Information Quality Act, but OMB suggests in the Memorandum that “only some agencies have robust peer review mechanisms.” Agencies have existing obligations to conduct peer review of influential scientific information and send annual reports of completed peer reviews to OMB. The Memorandum instructs agencies to increase reviewers’ focus on objectivity of data and requires a second round of peer review if there are substantial changes based on the first. These requirements could make rulemakings more time-intensive where influential information is involved.

Requests for correction. The Memorandum seeks to limit agencies to 120 days to respond to requests for correction from the public that challenge whether the agency has complied with applicable guidelines for disseminating information. It also includes a provision for peer review and OMB review of responses to requests for correction as well as a general prohibition of the same agency staff responding to the request for corrections as worked on the subject of the request. Parties interested in rulemaking may find that this increases agency responsiveness when challenging whether data or analyses conform to applicable guidelines.

In sum, OMB’s new Memorandum may facilitate third-party review of data and analyses when preparing comments on proposed regulations or risk assessments. Private parties interested in pending agency decisions should take note of the rules that apply to data and analyses used by agencies in those proceedings and be prepared to file requests for correction when necessary. These new peer review and request for correction requirements may lengthen certain rulemaking or other proceedings but also provide more opportunities to ensure that agency actions are based on appropriate information.

Source: Lexology
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