BP Trial to Open, Brazilian Court Drops Chevron Criminal Charges, EC Refers Sweden & Greece to ECJ, EU Reduces Carbon Allowances (by Bob Percival)

Tomorrow morning a trial to determine civil penalties and natural resource assessment damages for the 2010 Deepwater Horizon oil spill is expected to open in federal district court in New Orleans.  Judge Carl J. Barbier will preside over the bench trial.  The first phase of the trial will focus on whether BP, Transocean or Halliburton were simply negligent or grossly negligent in their actions that resulted in the spill. If they were simply negligent, the Clean Water Act specifies a civil penalty of $1,100 per barrel of oil spilled.  If they were grossly negligent the penalty can be up to $4,300/barrel.  The second phase of the trial, scheduled to begin in September, will focus on how much oil was spilled.  The U.S. government argues that 4.9 million barrels were spilled, but BP claims that only 3.1 million barrels were spilled.  Last week the federal government agreed that BP will not be penalized for the 810,000 barrels of oil it recovered.  Thus, potential civil penalties now range from $4.5 billion to $17.6 billion.  The states of Louisiana and Alabama also are participating in the trial as plaintiffs and three other Gulf states are seeking additional damages, which has complicated settlement talks.  It was reported over the weekend that the federal government and the states have offered BP a $16 billion settlement.   

Last week a Brazilian court dropped criminal charges against Chevron and Transocean for the November 2011 oil spill in the Frade field off the coast of Brazil.  As discussed previously in this blog (see, e.g., August 5, 2012 blog post), the spill released only 3,700 barrels of oil from the seabed, but Brazilian authorities reacted harshly, threatening criminal prosecution against the companies and several of their executives whose passports were confiscated by Brazilian authorities.  A civil suit seeking up to $20 billion in damages for this spill, which was less than one thousandth the size of the BP spill, is still pending.

Last week it was announced that six of the 177 underground tanks containing radioactive waste at the Hanford Nuclear Reservation in eastern Washington state are leaking.  The U.S. Department of Energy previously had revealed that one of the tanks was leaking between 150 and 300 gallons of radioactive waste per year.  Hanford was built by the federal government during the 1940s and was operated for decades to support nuclear weapons production.

On February 21 the European Commission (EC) announced that it had referred Sweden and Greece to the European Court of Justice (ECJ) for failing to comply with previous environmental judgments. Sweden was referred for failing to comply with a 2012 order requiring it to issue licenses to control pollution from a steel mill and an iron ore mine.  Greece was referred for failing to shut down 78 landfills that allegedly continue to operate in violation of EU legislation.  The EC proposed a daily penalty of more than 71,000 Euros for each day the landfills continue to operate following a second ruling against Greece.

On February 19, by a vote of 38-25, the environmental committee of the European Parliament approved, as expected, a plan to reduce the supply of carbon allowances to be offered at auction during the next three years (see Feb. 18, 2013 blog post).  A total of 900 million tons of allowances that would have been auctioned from 2013 to 2015 now would be auctioned in 2019 and 2020.  The plan is designed to shore up the price of the allowances in the EU’s cap-and-trade program.  It still needs approval from the full Parliament and EU member states. With allowances currently selling for less than 5 Euros per ton the EU cap-and-trade program for carbon currently provides little incentive for industries to switch to cleaner fuels. Stanley Reed, Europe Is Poised to Bolster Carbon Trading, N.Y. Times, Feb. 20, 2013, at B7.

Last week the U.S. Food and Drug Administration (FDA) appointed longtime tobacco control advocate Mitch Zeller to be director of its Center for Tobacco Products. Zeller, who previously had worked in the FDA’s Office of Tobacco Program, was an executive at the American Legacy Foundation from 2000 to 2002.  When I co-taught a seminar on tobacco control in 2001, Zeller was one of our guest speakers. His appointment hopefully signifies that the FDA will be more aggressive in implementing its authority under the Family Smoking Prevention and Tobacco Control Act, which was signed into law by President Obama in June 2009.

On President's Day (February 18) the Library of Congress opened to the public the historic reading room in its Jefferson Building.  For a slideshow of photos I took of this awesome building during the open house go to:  http://www.youtube.com/watch?v=SJHd7hNVrxY.

State of Union Stresses Climate, Key EU Allowance Trading Vote, Chinese Refiners Face Mandate, Fish on Drugs, North Sea Gas Leak (by Bob Percival)

President Obama delivered his 2013 State of the Union Message to a joint session of Congress on Tuesday February 12.  Environmentalists were pleasantly surprised that the President devoted a substantial portion of his speech to energy and climate issues.  The President began on an upbeat note by declaring that "After years of talking about it, we are finally poised to control our own energy future.” Obama noted that domestic oil production was at its highest level in 15 years while domestic natural gas production is at its highest level ever.  U.S. fuel economy standards will double “the distance our cars will go on a gallon of gas” and domestic solar and wind energy capacity has doubled.  Due in part to the economic slowdown, “over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.” But Obama declared, “for the sake of our children and our future, we must do more to combat climate change.” The President noted that “the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.”

The President then urged Congress to enact cap-and-trade legislation to control greenhouse gas emissions.  Republican Senator John McCain visibly squirmed in his seat when Obama praised his since-repudiated support for this “bipartisan, market-based solution to climate change.”  But since there is no realistic prospect of the current Republican-controlled House approving such legislation today, Obama pledged that “if Congress won’t act soon to protect future generations, I will” by taking executive action “to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”  The President pledged further support for wind and solar energy and for speeding up new oil and gas permits.  He proposed to devote a portion of funds from oil and gas permits to create “an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.”  Finally he announced “a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years” by providing states with funds to encourage the construction of more efficient buildings.  

In the Republican response Senator Marco Rubio of Florida showed how sharp the partisan divide has become on energy and environmental issues.  Declaring that “any time anyone opposes the President’s agenda, he and his allies usually respond by falsely attacking their motives,” Rubio made the following puzzling statement that apparently was a reference to climate change: “When we point out that no matter how many job-killing laws we pass, our government can’t control the weather – he accuses us of wanting dirty water and dirty air.”  While conceding that “solar and wind energy should be a part of our energy portfolio,” Rubio opposed “wasting more taxpayer money on so-called ‘clean energy’ companies like Solyndra.” Instead, he argued for increased domestic production of coal, oil and natural gas.

On February 19 the environmental committee of the European Parliament will take a crucial vote on whether to delay the sale of 900 million tons of carbon allowances for its cap-and-trade program from 2013-2016 to 2019-2020.  The delay is being proposed because of fears that the EU carbon trading system could collapse due to an oversupply of allowances.  Allowances that sold for 25 Euros per ton in 2008 are now selling for around 5 euros per ton.  The decision may have important consequences for plans to link the EU carbon market with the Australian and California cap-and-trade programs.  Australia’s carbon price is currently fixed until 2015 when it will be allowed to float when Australia links to the EU market.  Carbon Markets: Extremely Troubled Scheme, Economist, Feb. 16, 2013, at 75.

As China struggles to cope with its worst air pollution, pressure is mounting to require the state-owned oil company Sinopec to reduce the sulphur content of its petroleum.  Current Chinese regulations allow as much as 150 ppm sulphur in petroleum, compared to European standards of 10 ppm.  Sinopec owns half of China’s refining capacity, but it is losing money on refining operations because of government price controls on the sale of refined petroleum and diesel products.  China’s State Council has decreed that permissible levels of sulphur in fuel will be reduced to 10 ppm for diesel fuel in June and for petroleum in December 2013.  It is estimated that this will cost Sinopec between $4.8 billion and $6.4 billion to upgrade its refineries.  Oil in China: Smog and Mirros, Economist, Feb. 16, 2013, at 68.

For several years scientists have been concerned about the potential effects of water pollution from pharmaceutical drugs discarded by humans.  They now are examining how pharmaceuticals affect the behavior of fish found in waters contaminated with them.  A study published last week in Science magazine found that perch exposed to the anti-anxiety drug oxazepam changed their behavior in three significant ways.  The fish started swimming alone instead of in schools, they took greater risks by swimming into novel environments, and they were greedier in pursuing sources of food. T Brodin, J. Fick, M. Jonsson & J. Klaminder, Dilute Concentrations of a Psychiatric Drug Alter Behavior of Fish from Natural Populations, 339 Science 814 (Feb. 15, 2013) (online at: http://www.sciencemag.org/content/339/6121/814).  Scientists believe this could cause profound ecological impacts as fish on drugs wipe out other populations or become more vulnerable to predators from their riskier behavior.

Last week the French oil company Total disclosed the results of its investigation of the source of the natural gas leak in its Elgin-Franklin field in the North Sea that started on March 25, 2012 (see April 8, 2012 blog post).  Due to the leak, Total has shut down for nearly a year production from the field, which accounted for 7 percent of British production.  The Total report blames the leak on corrosion caused by the interaction of bromine in the fluid used in the well and grease on the threads of the well casing.  It also noted that the Hod gas formation that is more than 3,000 feet above the Fulmar formation that was being drilled started releasing gas unexpectedly, making the accident unforeseeable.  The leak was plugged after two months and no one was injured.  A total of 238 workers were evacuated due to fears of a catastrophic explosion and fire.  British authorities are still investigating the leak.  Total hopes to escape penalties and eventually to be able graduyally to restart production using more conservative extraction methods. Stanley Reed, Total Discloses Origins of a Gas Leak in the North Sea, N.Y. Times, Feb. 16, 2013, at B6.

On Valentines Day Professor Zhao Huiyu and her daughter Jennifer returned to China after spending a year in Baltimore while Professor Zhao served as a visiting environmental law scholar at the University of Maryland Carey School of Law.  I unfortunately was required to spend two days on jury duty in D.C. and thus was unable to say a final goodbye in person to Professor Zhao.  However, she went to the Maryland law library and took a final photo of herself standing next to the poster of me that the library has on display.  The photo appears above. 

Mexican Lead Recycling, Japan Whaling Subsidies, EHP Report, China Update, Nuclear Power, Broder Tesla Road Trip (by Bob Percival)

On February 4 the North American Commission on Environmental Cooperation (CEC) released a draft report harshly criticizing the export of spent lead acid batteries (SLAB) from the U.S. to Mexico.   The CEC, which was created by the North American Free Trade Agreement (NAFTA), includes representatives from the U.S., Mexico and Canada.  The report found that between 2004 and 2011, U.S. net exports of SLABs to Mexico increased by 449 to 525 percent.  It is estimated that 20 percent of all lead acid batteries in the U.S. eventually end up in Mexico for recycling through methods that are poorly regulated.  Activists argue that U.S. lead recyclers emit more than 30 times as much lead from their Mexican plants than from similar plants they operate in the U.S.  A copy of the CEC’s report Hazardous Trade? An examination of US-generated Spent Lead Acid Battery exports and secondary lead recycling in Mexico, the United States and Canada is available online at: http://www.cec.org/Page.asp?PageID=924&SiteNodeID=1075.

The International Fund for Animal Welfare reported on February 6 that the Japanese government has provided nearly $400 million in subsidies in recent years to prop up the country’s declining whaling industry, including funds diverted from tsunami relief.  The report argues that whaling is a dying industry in Japan and that the country would be better off economically by abandoning an industry that now employs fewer than 1,000 people.  The report notes that the industry plans to ship only 2,400 tons of whale meat this year, less than half the level of 2011.  Japan has defied an international moratorium on commercial whaling by killing more than 14,000 whales for what it calls “research purposes” since the moratorium took effect in 1986.  Hiroko Tabuchi, Japan Subsidy For Whaling Is Challenged,” N.Y. Times, Feb. 7, 2013, at A12. The report, The Economics of Japanese Whaling, is available online at: http://www.ifaw.org/sites/default/files/economics-of-japanese-whaling-japan-ifaw.pdf. 

On February 5 the journal Environmental Health Perspectives (EHP) published a report advocating increased emphasize on preventing cancer through reducing human exposure to toxics in the environment and workplace.  The report, for which I am one of the coauthors, is an outgrowth of the World Health Organization (WHO) conference I participated in during March 2011 in Asturias, Spain.  The other authors include top epidemiologists and public health experts from six countries.  The article reports that nearly 13 million new cases of cancer and 7.6 million cancer deaths occur each year.  It notes that the cancer policies of most countries focus almost exclusively on early detection, diagnosis, and treatment with scant attention to primary prevention through reducing environmental and occupational exposures to carcinogens.  The article advocates for the development of an “evidence-based global vision and strategy for the primary prevention of environmental and occupational cancer.” The article, which is entitled “Environmental and Occupational Interventions for Primary Prevention of Cancer: A Cross-Sectorial Policy Framework,” is available online at: http://ehp.niehs.nih.gov/2013/02/1205897/.  EHP is a monthly journal of peer-reviewed research and news published with support from the National Institute of Environmental Health Sciences, National Institutes of Health, U.S. Department of Health and Human Services.

On February 6 the British Medical Journal Open published a study showing that exposure to ground-level ozone may cause a significant increase in premature births and pre-eclampsia among pregnant women.  Pre-eclampsia is a condition involving increased blood pressure that can cause seizures and strokes endangering the lives of women and their babies.  The study was based on a review of the medical records of 121,000 Swedish women. It found no evidence of a relationship between ozone exposure and fetal growth.  When President Obama directed EPA to delay strengthening of the U.S. national ambient air quality standard for ozone in 2011, he pledged that a new standard would be adopted in 2013.  The study, which is authored by David Olsson, Ingrid Mogren and Bertil Forsberg, is entitled “Air Pollution Exposure in Early Pregnancy and Adverse Pregnancy Outcomes: A Register Based Cohort Study.”  It is available online at: http://bmjopen.bmj.com/content/3/2/e001955.full

China’s new leadership is scrambling to respond to a variety of challenges, including levels of winter air pollution that have made the ambient air at times seem like an airport smoking lounge.  China’s state-owned oil company Sinopec announced last week that it would increase by 50 percent (to $4.8 billion) its annual investment to improve the quality of petroleum produced at its refineries.  Tom Orlik, Crude Treatment by Sinopec, Wall St. J., Feb. 6, 2013, at C14. Last week China’s State Council pledged to reduce the income gap between rich and poor in China by increasing taxes on corporations and the wealthy and spending more on programs to assist low-income groups.  China’s National Bureau of Statistics estimated last month that levels of income inequality in China were almost as bad as in the U.S. (Gini coefficient of .47 in China versus .48 in the U.S.).  Independent estimates give China a much greater level of income inequality than in the U.S. (Gini coefficient of .61).  Liyan Qi and William Kazer, China Tackles Income Divide, Wall St. J., Feb. 6, 2013, at A8. Hewlett Packard announced last week that it would follow Apple’s lead in improving working conditions in Chinese companies that are part of its supply chain. 

On February 7 representatives of nine northeastern states participating in the Regional Greenhouse Gas Initiative (RGGI) proposed new limits on greenhouse gas (GHG) emissions for 2014.  The new limit of 91 million tons is a 45 percent reduction from this year’s allowed level of 165 million tons, but it reflects the actual level of current emissions.  The level of GHG emissions allowed in the future will decline by 2.5 percent annually.  This is expected to increase the price of RGGI emissions allowances from the current $1.93/ton by $2 per ton each year until it reaches $10/ton in 2017.  The states participating in RGGI are Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island, and Vermont.  Felicity Barringer, States’ Group Calls for 45% Cut in Amount of Carbon Emissions Allowed, N.Y. Times, Feb. 8, 2013, at B4.

Citing higher costs and extended delays, Centrica on February 4 canceled its option to own 20 percent of four new nuclear power plants to be built in Britain.  France’s state-owned EDF, which is planning to build the plants, is now in negotiations with China’s Guangdong Nuclear Power Corporiation to pick up Centrica’s interest.  The following day the U.S. electric utility Duke Energy announced that it would decommission its Crystal River nuclear power plant rather than paying more than $3 billion to repair it. The World Nuclear Industry reported in July 2012 that 59 nuclear power plants were under construction, 44 of them in Brazil, Russia, India and China.  Thirteen of these plants have been listed as “under construction” for 10 years or more.  Liam Denning, Best to Go Nuclear in the BRICS, Wall St. J., Feb. 6, 2013, at C14.

On Monday I was in Boston to give a demonstration of the electronic version of my Environmental Regulation casebook at Suffolk University Law School.  I flew up to Boston from D.C. on Monday morning and had lunch with Chip Price, vice president and general manager of VitalSource (http://www.vitalsource.com/pages/home.aspx), the company that digitized my casebook for Aspen Publishing (Chip also by coincidence happens to be my brother-in-law).  We discussed the latest developments in electronic textbook publishing, which helped me prepare for my presentation at Suffolk later in the afternoon. After having dinner with my Aspen editor on Monday night, I flew back to Baltimore on Tuesday morning.  

Today’s New York Times has an article by environmental reporter John Broder describing his failed attempt to drive in freezing weather from Washington to Boston in an all-electric Tesla S.  Broder’s plan was to recharge the vehicle at the 480-volt Supercharger stations Tesla installed in December at I-95 service plazas in Newark, Delaware and Milford, Connecticut.  Broder notes that the car is a “technological wonder” that “has won multiple car-of-the-year awards and is, many reviews would have you believe, the coolest car on the planet.”  However, after a stop in New York City, Broder had a scare when the car nearly did not make it to the Milford supercharger station on its remaining charge.  After charging it there Broder then drove 79 miles to Groton and spent the night at a place where he did not try to charge the car overnight.  The next morning in 10-degree weather Broder had to recharge the vehicle using normal power and did not charge it long enough to make it back to the Milford supercharger, thus necessitating a tow.  John M. Broder, Stalled Out on the Electric Highway, N.Y. Times, Feb. 10, 2013, at A11.  Alternative energy haters already are seizing on this story to denounce electric vehicles.  Moral of the story: Tesla owners should not plan lengthy road trips, particularly in very cold weather that reduces battery range.  When I ordered my Tesla in December it was not with any plans to drive it to Boston, but rather to use it for my commute between D.C. and Baltimore.  When I want to go to Boston, I simply will do what I did on Monday (and have always done), which is to fly there.

On Wednesday Professor Zhao Huiyu gave a guest lecture on Chinese environmental law in my Global Environmental Law seminar.  Following the class, Maryland’s Environmental Law Program hosted a farewell wine and cheese reception for Professor Zhao, who will be returning to China this week after a year in residence at the law school.  On Thursday Professor Zhao and I each gave presentations on Chinese environmental law to students in a course being taught jointly at Johns Hopkins University and Nanjing University in China.  The course, which is entitled “Comparison of Environmental Challenges and Governance in China and the United States,” is usually taught via videoconferencing with China.  Because the spring semester has not yet started in China, the students were all in Baltimore with a professor in China participating through Apple’s Facetime program.

On Friday I received approval from U.S. Customs and Border Protection to be a member of their Global Entry Program.  This program designates me as a pre-approved, low risk traveler, who can now avoid lines at Customs when re-entering the U.S. simply by going to a kiosk.  The kiosk will scan my fingerprints to see if that match the fingerprint scan I gave Customs during my interview on February 8.  When driving over the border from Canada or Mexico I can now flash the equivalent of an EZ-Pass card without stopping.  Enrollment in the Global Entry Program also gives me automatic enrollment in the TSA Pre-Check Program that means I no longer will have to remove my shoes, belt, or laptop during domestic travel.  My annual membership fee is being paid by United Airlines as a perk of having achieved 1K status. 

China Air Pollution, Nigerian Lead Poisoning, Texas Coal Mine, Cod Harvest Slashed & Macworld (by Bob Percival)

China’s air pollution problems continued to command headlines last week. The thick smog in Beijing forced airlines to cancel flights because of poor visibility.  The Chinese government temporarily forced some factories to close to reduce emissions and it ordered government cars to cut back on travel.  To be sure, atmospheric conditions this winter have caused huge smog problems in many parts of the world.  Salt Lake City and Kabul also experienced emergency levels of air pollution in the last few weeks.  But air pollution in China has been so severe that it is causing many to argue for a fundamental rethinking of the country’s air pollution control strategies.  In remarks on January 29 that were broadcast nationwide, outgoing Chinese Premier Wen Jiabao stated: “Recent smoggy weather is affecting people’s production and their health.  We should take certain and effective measures to accelerate industrial restructuring, and push forward energy conservation and emissions reduction.”  One unusual illustration of how bad pollution in Eastern China has become is provided by reports that pollution so impaired visibility in Zhejiang province that a furniture factory was on fire for four hours before anyone noticed. Aaron Back & Josh Chin, Wen Urges Clean-Air Action As China’s Skies Clog Again, Wall St. J., Jan. 30, 2013. 

Last week Nigerian President Goodluck Jonathan pledged to release $4 million in funds that had been frozen for more than a year in order to clean up severe lead pollution that killed more than 400 residents of seven villages in the Nigerian state of Zamfara.  The lead was released into the environment when gold-bearing rock that contains high concentrations of lead was grinded and melted by villagers in wildcat gold mining operations.  An additional 1,500 Nigerian children were found to have high levels of lead poisoning in what is considered to be the world’s worst outbreak of lead poisoning.  Yet this has received very little publicity except from the NGO Doctors Without Borders. Donald G. McNeil, Jr., Nigeria: Money Promised to Clean Up Lead That Killed Hundreds of Children, N.Y. Times, Jan. 30, 2013.

On January 29 Texas officials approved a new coal mine in Maverick County that will fuel power plants across the border in Mexico.  By a 2-1 vote the Texas Railroad Commission rejected complaints from Texans that the mine will cause air and water pollution in Texas primarily to benefit Mexican companies.  The mine will be owned by Dos Republicas, a U.S.-based company controlled by Mexican firms.  The company argues that it will create 60 jobs in Texas.  Ana Campoy, Texas Approves Border-Area Coal Mine, Wall St. J., Jan. 30, 2013, at A2. 

On January 30 the New England Fisheries Management Council voted to slash 2013 cod fishing quotas sharply in an attempt to save the fishery.  The Commission cut the legal harvest of cod by 77 percent in the Gulf of Maine and by 55 percent on Georges Bank.  Fishermen were strongly opposed to the cuts, while some environmentalists argued that the state of the fisheries was so dire that they should be closed entirely to fishing.

On Wednesday night I flew to San Francisco for the annual Macworld/iWorld Conference.  For many years I have been a regular participant in these conferences, which in the past featured some truly historic moments.  In January 2007 I watched Apple’s founder, the late Steve Jobs, unveil the iPhone and in January 2008 the Macbook Air.  I also fondly recall the 2005 conference where Apple’s Keynote presentation program, which I now use religiously, was launched and everyone in the audience received a free copy of it.   The conferences no longer feature the drama of Apple product announcements.  Instead this year’s opening program featured actor Ashton Kutcher, who never met Jobs, describing what it was like to play Jobs in the movie “Jobs” that will be released in April.  On Friday Fred Armisen of Saturday Night Live and Portlandia discussed his comedy sketches involving Apple products and his brief encounter with Jobs.  Macworld will never be the same without Apple and Jobs, who died in October 2011.  Although the conference has diminished considerably in size, there still were many valuable things to learn from presentations concerning the use of Apple technology in both education and everyday life without all the distractions of the former hoopla. ize, there still were many valuable things to learn from presentations concerning the use of Apple technology in both education and everyday life without all the distractions of the former hoopla.