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The Year Ahead in Energy and Environmental Law: Ten Issues to Follow in 2010

January 14, 2010

1. EPA’s Regulation of Greenhouse Gases

With Congress bogged down in competing climate proposals and mid-term elections looming, we expect the most significant near-term developments in climate change to be coming from EPA. Using existing authority under the Clean Air Act, EPA has already published an endangerment finding, required annual reporting, and proposed regulations for regulating GHG emissions from vehicles and stationary sources. Thousands, or even tens of thousands, of facilities could be affected by the new regulations, including both small and large businesses;

2. NEPA Review of Climate Impacts

CEQ is reportedly developing regulations or guidance that will require GHG emissions to be analyzed -- and alternatives considered -- for any development requiring a federal permit or approval. Many states and local municipalities have already enacted similar requirements, and dozens of lawsuits have been filed challenging the adequacy of the climate analysis contained in EIS and other review documents. Some states with substantive environmental impact review requirements (such as California’s CEQA and Washington’s SEPA) are likely to require specific mitigation for the climate impacts of any substantial new project;

3. Water Rights

Many of the most promising alternative energy technologies require large amounts of water, often in arid regions. Certain solar technologies, for example, which concentrate sunlight and require a lot of land, are ideally suited for desert regions of the Southwest, where water is least available. Nuclear plants use and discharge large amounts of heated water, often to sensitive marine waters and rivers. Hydroelectric plants produce clean energy, but may threaten fish. As we move away from fossil fuels and toward so-called “clean” technologies, we will be trading one set of environmental challenges for others;

4. Superfund In Transition

Well-settled assumptions about Superfund were thrown out the widow in 2009 by the Supreme Court’s Burlington Northern decision. The Court gave a narrow reading to “arranger liability” and held that parties could avoid the imposition of joint and several liability where a “reasonable basis” to apportion liability exists. Parties at multi-party Superfund sites with long histories of industrial operations - and many orphan parties - are particularly considering whether to undertake cleanups now that their liability for contamination they did not cause has been put at issue and their ability to recover their costs from other parties has been reduced.

5. New Rules for Oceans and Fisheries

The Obama Administration’s work on fisheries and ocean policy in 2009 shows that there may be significant changes in how federal areas of the ocean are used and federal fisheries are managed in 2010 and beyond. In June, the President established an Interagency Ocean Policy Task Force, led by the White House Council on Environmental Quality, to develop recommendations for a national ocean policy that ensures protection of the nation’s oceans, coasts, and the Great Lakes. At the end of 2009, the Task Force released a call for “ocean zoning” that could potentially determine where off-shore energy projects could be developed. With the appointment of respected marine scientist Dr. Jane Lubchenco to head the National Oceanic and Atmospheric Administration (“NOAA”), the Administration further signaled its commitment to tackling tough scientific and management issues. In December, NOAA released a policy promoting the use of “catch shares” – a system that divides up and allocates percentages, or shares, of the total allowable catch to individual fishermen or fishing groups – in federal fisheries management programs.[1] Because the new national policy endorses transitioning to the widespread use of catch share programs “wherever appropriate,” there will likely be debate in 2010 regarding whether catch shares are suited to particular fisheries and, if so, how to ensure that those programs are efficient, fair, and reliable.

6. New Energy Legislation – Even Without a Climate Bill

The American Clean Energy Leadership Act (“ACELA,” S.1462), sponsored by Senator Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, has components of the American Clean Energy and Securities Act (“ACES”) -- the climate change bill passed last spring by the House – but without the controversial cap-and-trade provisions. Like ACES, the bill would provide funding incentives for deployment of clean energy technologies, impose a national renewable portfolio standard, establish energy efficiency programs and promote smart grid technologies. In other respects, ACELA goes beyond ACES – providing more robust support for nuclear power and provisions for oil and gas development.[2] If climate legislation falters, this could be the bill to watch;

7. The ESA Remains Controversial, and There Will Be Efforts to Change It

In 2008, the Bush administration promulgated a rule that allowed federal agencies conducting, permitting or financing projects to decide on their own whether the projects would adversely affect listed species and require consultation with federal resource managers under Section 7 of the ESA.[3] In 2009, the Departments of Commerce and Interior revoked that rule, restoring the status quo to the consultation process. In 2009, the USFWS announced that, in 2010, it may attempt to revise the ESA, potentially changing key definitions governing consultation and critical habitat.[4] The USFWS has not yet proposed any rules or made any formal announcements explaining what those rules might entail, but the chances are good that new rules will be announced in 2010;

8. More Efforts to Define the Reach of the Clean Water Act

The courts continued to struggle in 2009 with defining the scope of federal Clean Water Act authority, based on a lack of clear guidance in the Supreme Court’s 2006 Rapanos decision. Barring a return trip to the Supreme Court, the best chance for bringing greater clarity to the situation in 2010 may be federal legislation. With Congress deadlocked on climate change, this could be the year Congress enacts the Clean Water Restoration Act (“CWRA”), S.787. If the CWRA passes, EPA would begin to regulate water quality, stormwater discharges, water supply and infrastructure, and all other activities that have the potential to create water pollution in newly covered waters.

9. Greater Regulation of Nutrient Discharges

The coming year will likely see more regulation of nutrient discharges, including nitrogen and phosphorus. Because nutrient discharges are typically from non-point sources, traditional end-of-pipe technology is ineffective, and regulators have turned to the TMDL program under the federal Clean Water Act as a tool to reduce nutrient loadings. Regulators are experimenting with water quality trading programs, which Congress has proposed for the Chesapeake Bay;[5] and numeric water quality criteria for nutrients.

10. More Climate Change Litigation

Undeterred by the absence of federal climate change legislation, litigants have sought to force reductions in GHG emissions through the courts. Last year saw cases brought under NEPA, the Clean Air Act and the ESA. This year we can expect more of the same. A relatively new development is the use of federal common law claims. Both the Second Circuit and the Fifth Circuit allowed federal common law nuisance claims based on alleged climate change damages to proceed, rejecting arguments that the cases raised non-judiciable political questions. The Ninth Circuit currently has an appeal pending before it which presents the same issue.

[1] See Sea Change? NOAA Seeks Public Comment on New Policy for Allocating Fishery Resources, Marten Law Environmental News (Jan. 6, 2010).

[2] A comprehensive comparison of ACES and ACELA from the Pew Center on Global Climate Change is available here.

[3] 73 Fed. Reg. 78,272 (Dec. 16, 2008).

[4] See A. Winter, ESA Overhaul a ‘Work in Progress’ for Obama Admin, N.Y. Times (Dec. 24, 2009).

[5] Chesapeake Bay Bill Proposes to Improve Water Quality Through a “Cap and Trade” Program , Marten Law Group Environmental News (Dec. 2, 2009).

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