TVA Settlement, BP Annual Meeting, Chevron CEO Interview & AEP Argument (by Bob Percival)

On Thursday April 14 the U.S. Justice Department announced that the Tennessee Valley Authority (TVA) will close 18 old coal-fired electrical generating units at three power plants in settlement of litigation by states and environmental groups charging the TVA with violations of the Clean Air Act's new source review (NSR) provisions. The plants, which are more than 50 years old, have operated for decades without modern pollution control equipment because they were grandfathered-in when the 1970 Clean Air Act (CAA) was adopted. The idea was that they eventually would be replaced by generating units that would have new pollution controls required by the Act, but the TVA continued to renovate the old plants to take advantage of the CAA's failure to control existing sources. The settlement covers all of the power plants targeted by a state common law nuisance suit brought by North Carolina. Eight of the generating units that will be shut down at two power plants initially had been ordered in January 2009 to install new pollution control equipment due to North Carolina' lawsuit. North Carolina ex rel. Cooper v. Tennessee Valley Authority, 593 F. Supp. 2d 812 (W.D.N.C. 2009). However, in July 2010 the U.S. Court of Appeals overturned this decision, erroneously ruling that as long as the power plants were in compliance with the CAA they could not be nuisances at common law. North Carolina ex rel. Cooper v. Tennessee Valley Authority, 615 F.3d 291 (4th Cir. 2010) (see August 1, 2010 blog post).

What may have spurred the settlement was the filing of a petition for Supreme Court review of the Fourth Circuit's decision. While the TVA generally has independent litigating authority, when a case goes to the Supreme Court the Solicitor General (SG) must weigh in and the SG's office repeatedly had sought extensions of the deadline for its reply to the state's cert petition. Presumably the SG's office consulted EPA which may have insisted that TVA settle the NSR litigation. The settlement will reduce TVA's emissions of sulfur dioxide by 97% below 1977 levels and nitrogen oxides by 95%. TVA also will spend between $3 and 5 billion to upgrade pollution controls at plants that it will continue to operate.

On April 14 BP held its annual meeting of shareholders in London. Protesters covered in what looked like oil greeted the shareholders as they filed into the meeting. The father of Gordon Jones, a worker who had been killed when the Deepwater Horizon oil platform exploded and caught fire, took the microphone and argued that the company could have prevented his son's death. This prompted BP CEO Robert Dudley to read out the names of the 11 workers who were killed by the blowout. Other protesters sought to disrupt the meeting to draw attention to BP's development of Canada's tar sands. Kiran Stacey & Sylvia Pfeifer, BP Shareholders Shaken by Invasion of Motley Protesters, Financial Times, April 15, 2011. Twenty-five percent of BP shareholders voted against the re-election to BP's board of Sir Bill Castell, chair of the board's safety committee.

Last week Chevron's CEO John Watson gave an interview to Kimberley Strassel of the Wall Street Journal where he argued that renewable energy is too expensive to be a significant supply source and that because America has taken "affordable energy for granted" it will need a lot more oil, coal and natural gas. He also strongly attacked EPA's effort to regulate emissions of greenhouse gases. Apparently the interview did not touch on whether Watson believes in Chevron's massive "We Agree" advertising campaign or how he feels about the $8.6 billion judgment against the company for pollution in Ecuador. Kimberley Strassel, Oil WIthout Apologies, Wall St. J., April 16-17, 2011, at A11.

Today the U.S. Supreme Court heard oral argument in American Electric Power v. Connecticut, a case involving whether a federal common law nuisance lawsuit by several states can be brought against utilities operating large coal-fired powerplants. The case initially was brought by the states in 2004, dismissed as a political question by a federal district judge in 2005, and then reinstated by the U.S, Court of Appeals for the Second Circuit in 2009 (see Sept. 27, 2009 blog post). I attended the oral argument and will provide more details in my next blog post. A transcript of the argument is available online at: http://www.supremecourt.gov/oral_arguments/argument_transcripts/10-174.pdf

Last Wednesday Alan Miller from the International Finance Corporation, who is one of the co-authors of my environmental law casebook, attended the Nats/Phillies game with me. On the second to the last pitch of the game I caught a foul ball hit by Pudge Rodriguez (unfortunately he struck out on the next pitch with the tying and winning runs on base and the Phillies won 3-2). On Thursday evening I attended a Fulbright Association reception at the Colombian embassador's residence.

I am currently experiencing technical difficulties posting to my parallel blog at: www.globalenvironmentallaw.com, which contains more photos. I started doing parallel postings because the Chinese government's firewall sometimes would block one of the two websites. Now I have another reason to be glad that I have been doing cross postings.