On Tuesday July 20, U.S. district judge William M. Nickerson gave the Maryland Environmental Law Clinic a key preliminary victory in its lawsuit against Perdue Farms Inc. for polluting the Chesapeake Bay through illegal disposal of chicken waste. The judge rejected Perdue’s claim that because the farmers it contracts with to raise chickens are the actual NPDES permit holders, Perdue should be exempt from liability for violations of the Clean Water Act (CWA). Instead, the court held that “integrators” like Perdue could be held liable for violations of the CWA because of their level of control over the farmers who raise the integrator’s chickens. As a result of this decision,, the case will proceed to trial on the merits. This lawsuit is what sparked efforts by the poultry industry to have the Maryland clinic’s funding cut by the Maryland General Assembly, as resported in this blog on March 28 2010, a move that backfired badly when the national legal community came to the defense of the clinic. A copy of this decision is available on my parallel blog at: www.globalenvironmentallaw.com (July 25th post).
Senate majority leader Harry Reid (D-Nev) announced this week that he will abandon efforts to have the U.S. Senate vote on cap-and-trade legislation to control greenhouse gas (GHG) emissions this year. Senator Reid concluded that there is not enough time to round up the necessary votes to pass such legislation, which cleared the House in June 2009. This is disappointing to environmentalists, particularly since it comes at a time when Washington, D.C. is experiencing a record heat wave and the Gulf states are enduring the worst environmental catastrophe in U.S. history due to the BP oil spill. If this legislation cannot pass under these circumstances, it seems likely that EPA will be left to regulating GHG emissions under the old Clean Air Act, which is not ideally suited to accomplishing this goal.
Ironically, Senator Reid’s decision was announced just as the governments of the two countries with the greatest carbon emissions per unit of energy use - the Australian and Chinese governments -- announced plans to limit their countries’ GHG emissions. On Friday new Australian Prime Minister Julia Gillard announced that companies would get credit for early reduction in carbon emissions prior to the adoption of comprehensive cap-and-trade legislation. The Chinese government revealed that it plans to establish a program for trading carbon allowances as part of its next five-year plan in order to meet its Copenhagen Accord commitment to reduce China’s energy intensity. Li Jing, Carbon Trading in Pipeline, China Daily, July 22, 2010 (http://www.chinadaily.com.cn/bizchina/2010-07/22/content_11034422.htm). Australia emits more than one kilogram of CO2 for every kilowatt hour of energy it uses, while China emits more than 0.85 kgCO2/kWh. By contrast the U.S. emits only 0.6 kgCO2/kWh. Slash Bills and Save the World, Financial Times, July 17-18, 2010.
Last week the International Energy Agency (IEA) announced that in 2009 China had passed the U.S. as the world’s leading consumer of energy. The IEA estimates that China used 2.252 billion tons of “oil equivalent,” 4 percent more than the U.S. which consumer 2.17 billion tons. However, on a per capita basis China’s consumption is only about a third of that of most industrialized nations, according to the IEA. The China government disputed the IEA’s calculations, claiming that China used only 2.146 billion tons, leaving the U.S. as the leading energy consumer. The IEA responded that China has not provided adequate data to substantiate its claim.
On Tuesday July 20 I had dinner with a delegation of ten Chinese judges, journalists, lawyers and environmental officials who are visiting the United States on a tour arranged by the Beijing office of the Natural Resources Defense Council (NRDC). The delegation had visited EPA’s Environmental Appeals Board to watch an argument in a case involving the application of the Rapanos decision in an EPA enforcement action. On Wednesday the group headed to New York to visit NRDC’s headquarters and to meet with U.S. Court of Appeals Judge Denny Chin, the newest member of the Second Circuit. China currently is battling a major oil spill of its own as a result of a pipeline explosion in Dalian. The spill has made the Chinese public painfully aware of the inadequacy of existing oil spill response efforts. As a result of the Chinese spill, I wrote a new version of the article I had written last week about the BP oil spill for a weekly Chinese news magazine in Guangzhou.
On Friday July 23 a court in the Netherland imposed a fine of one million Euros on the oil trading firm Trafigura for illegal export of hazardous wastes that killed 16 people and injured thousands of others in the Ivory Coast in 2006. The court ruled that Trafigura had acted illegally when the ship it had hired to transport the waste - the Probo Koala -- left the port of Amsterdam with the waste after balking at the cost of disposing it in the Netherlands. Trafigura previously had settled a lawsuit brought in London on behalf of the victims of the waste disposal in the Ivory Coast as discussed in the blog post of September 20, 2009.
On Tuesday July 20 the Senate Judiciary Committee approved the nomination of Elena Kagan to be an Associate Justice of the U.S. Supreme Court by a vote of 13-6. At her confirmation hearings the few questions dealing with environmental issues involved two Supreme Court decisions: the Court’s 2008 decision in Exxon Shipping Co. v. Baker, which slashed the punitive damages Exxon must pay for the March 1989 Exxon Valdez oil spill, and the Court’s 2006 decision in Rapanos v. United States, which made it more difficult for the federal government to require a permit for developments affecting wetlands. Kagan seemed familiar with the former, but she stated that she had never read the Rapanos decision. Senator Franken volunteered to explain Rapanos to her, but then immediately realized that it would be futile.
On Thursday July 22 President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition to the provisions on conflict minerals and securities fraud litigation by foreigners discussed in this blog last week, the legislation boosts compliance with the formerly voluntary Extractive Industries Transparency Initiative (EITI) (see http://eiti.org/). Section 1505 of the legislation requires the Securities and Exchange Commission to issue regulations requiring companies developing oil, natural gas or minerals to disclose annually the type and total amounts of payments made to foreign governments in connection with such development projects. Section 750 of the legislation creates a new Interagency Working Group to oversee the development of carbon trading markets. The group is to consist of the Chairman of the Commodity Futures Trading Commission (CFTC), the Secretary of Agriculture, the Secretary of Treasury, the chairman of the SEC, the EPA Administrator, the chairman of FERC, the commissioner of the Federal Trade Commission and the administrator of the Energy Information Administration. They are to submit a study by January 2011 on how to ensure efficient, secure and transparent carbon markets. Section 751 of the legislation also requires the CFTC to establish a 9-member “Energy and Environmental Markets Advisory Commission.”