Split Decisions over EPA Water Rule, Australian Premier Seeks to Limit Environmental Lawsuits, Shell Suspends Arctic Drilling Due to Weather (by Bob Percival)

Classes started last week at the University of Maryland Carey School of Law.  I have a wonderfully diverse group of students in my flagship Environmental Law survey course.  This year for the first time I also will be teaching a Special Topics course in Environmental Law for undergraduates on our College Park campus.  That course will start tomorrow.

In the last few weeks three federal district courts in the U.S. have weighed in on legal challenges to EPA’s new rule clarifying the reach of federal jurisdiction over “waters of the United States.”  EPA is attempting to clear up enormous confusion that has prevailed since the U.S. Supreme Court split 4-1-4 in the Rapanos v. U.S. cases in 2006.  In that decision Chief Justice Roberts expressly invited EPA to issue new rules clarifying the reach of its jurisdiction and indicated that they would be entitled to deference under the Court’s Chevron doctrine.  On August 26 Judge Irene Keeley of the Northern District of West Virginia dismissed a lawsuit challenging the new rule on the grounds that it should have been brought in the U.S. Court of Appeals. On August 27 Judge Lisa Wood of the Southern District of Georgia dismissed another lawsuit challenging the rules on the same rationale.  However, on August 27 Judge Ralph Erickson of the federal district court for North Dakota issued an injunction blocking the rules from taking effect in the 13 states who has sued in his court.   The Clean Water Act gives the courts of appeals jurisdiction to hear challenges to “any effluent limitation or other limitation”.  Judges Keeley and Wood declared that the EPA rules fall into the category of “other limitation,” but Judge Erickson disagreed because it “places no new burden or requirements on the States.” Why he went on to find that it would cause the states irreparable harm justifying an injunction is hard to understand.

As reported in this bog on August 8, on August 6 an Australian court reversed approval of the Carmichael Coal Mine and Rail Project that environmentalists argued will threaten the Great Barrier Reef.  The decision was based on the Environment Department’s failure to consider impacts on endangered reptiles in the vicinity of the project.  Angered by the decision, Prime Minister Tony Abbott is now pushing legislation to prevent judicial review of similar lawsuits by environmentalists.  He is arguing that otherwise Australia will be paralyzed by “lawfare,” a curious new term that he claims characterizes the U.S. legal system where environmentalists are able to use litigation to tie up the government in knots.

On August 19 I was interviewed live on the Australian Broadcasting Company’s nightly news program “The World.”  Anchor Beverley O’Connor interviewed me about the decision by the U.S. government to allow Royal Dutch Shell to drill for oil in the Chukchi Sea off the northern coast of Alaska.  The interviewed is online at: http://iview.abc.net.au/programs/world/NU1512H165S00#playing, but unfortunately the link apparently is only viewable from Australia.

Last week Shell suspended its drilling in the Arctic due to an impending storm that was predicted to bring high winds expected to produce very heavy seas. Next week President Obama will visit Alaska to emphasize the impact climate change is having on that state.

On August 17, Norway’s sovereign wealth fund announced that it would exclude four companies from its investment portfolio because they were insufficiently green.  The fund barred investments in South Korea’s Posco and Daewoo International Corporation and Malaysia’s IJM Corporation Bhd. and Genting Bhd.  The fund explained that it made the decisions “due to an unacceptable risk that the companies are responsible for severe environmental damage as a result of conversion of tropical forest into oil palm plantations.” These companies join a list of more than 60 other companies who have been placed off limits for investments by the fund for reasons including that their activities cause environmental damage or that they produce land mines, tobacco, nuclear weapons, or violate human rights.

On Thursday I leave for Jakarta, Indonesia, where I will be participating in the 13th annual Colloquium of the IUCN Academy of Environmental Law from September 7-12.  Two Maryland law students, a recent grad, and my summer global environmental justice fellow will be presenting papers along with me at the conference.  We also are bringing Maryland law filmmaker John Brosnan to produce a film of the conference.

China Chemical Conference, Tianjin Disaster, Japan Restarts Reactor, Former BP Head Criticizes Shell Arctic Drilling (by Bob Percival)

I am now back in the U.S. after my latest trip to China.  On Monday August 10 I was a speaker at a conference on “Chemical Regulation in China and the U.S. “ at Shanghai Jiaotong University’s KoGuan School of Law.  I made an hour-long presentation about the history of chemical regulation in the U.S. and the progress of legislation to update the Toxic Substances Control Act.  Wu Jian, who is responsible for chemical regulation for Shanghai’s Environmental Protection Board, then discussed the state of chemical regulation in China.  Participants in the conference included regulatory affairs managers from 22 chemical companies, including multinational companies such as Dow, Corning, BASF, Fuji and Syngenta.  Following our presentations, there was a frank and lively discussion session that focused on enforcement problems in China (e.g., a typical complaint was that MEP was enforcing the regulations - one company official asked Mr. Wu what a company should do when it becomes convinced that a competitor is using a chemical that has been imported illegally).

After the Q & A at the conference brought home how poorly Chinese chemical control regulations were enforced in practice, I was not surprised on Thursday morning to learn of the explosions caused by illegally stored chemicals that killed more than 100 people in Tianjin.  All the regulations requiring listing and reporting of chemicals proved ineffective because the companies storing extremely toxic chemicals did not comply with them.  Chinese friends suspect that corruption is the main explanation for the disaster.  Ironically, the disaster occurred the day after China’s Ministry of Environmental Protection had proudly reported that the number of environmental emergencies in China had fallen from 63 in the first six months of 2014 to 48 in the first six months of 2015.

In yet another depressing indication that China’s upgrade of its environmental laws has not had its intended effects, the Chinese government has ordered restrictions on vehicle use and factory shutdowns beginning on August 20 to reduce pollutants that will be in the air on September 3 when Chinese President Xi Jinping presides over a parade to celebrate the 70th anniversary of the end of World War II.   One would hope that as environmental law matures in China, the expedient of temporary closings polluting factors would no longer serve as a major pollution control strategy.

Despite strong local opposition, Japan last week restarted the first nuclear powerplant in the country since the meltdown at Fukushima Daiichi in March 2011.  The Kyushu Electric Power Company restarted one reactor at its Sendai nuclear powerplant in southwestern Japan.  For the last two years all of  Japan’s nuclear powerplants have been shut down as the government trieda to absorb lessons from the Fukushima Daiichi disaster. Among the protesters at the Sendai site was Naoto Kan, prime minister at the time of the disaster, who now has become an anti-nuclear activist.

Last week Australia announced its pledge to reduce greenhouse gas emissions in the runup to COP-21 in Paris in December.  The government promised to reduce emissions by between 26 and 28% from 2005 level by the year 2030.   The government announced thtat it plans to meet this goal without reinstating the carbon tax that it repealed.

Last week Lord Browne, former CEO of BP, harshly criticized Shell Oil for its risky Arctic oil drilling activities. In an interview with the BBC, he argued that drilling in the Arctic was too risky and too costly and would damage Shell’s long-term reputation.  Lord Browne noted that the Arctic environment is “much more fragile than other environments.” As the price of oil plunged to just above $40/barrel last week, Shell’s Arctic drilling looks increasingly foolish. 

Last week a coalition of red states filed suit against EPA’s Clean Power Plan, even though it had not yet appeared in the Federal Register, rendering their lawsuits once again premature.  The petitioners asked the panel of the D.C. Circuit that dismissed their initial lawsuits as premature to issue an order staying the EPA regulations.  If such an order were granted, it would create a huge incentive for filing frivolous, premature lawsuits in an effort to forum shop for a sympathetic panel of judges.  olous, premature lawsuits in an effort to forum shop for a sympathetic panel of judges. 

Russia Makes Vast Arctic Claim, Aussie Coal Project Delayed, China Steps up Enforcement, Shanghai Children's Lead Levels Plunge, China Trip (by Bob Percival)

In a new submission to the United Nations Commission on the Limits of the Continental Shelf, the Russian government on August 3 claimed sovereignty over more than 460,000 miles of the Arctic.   A similar bid by Russia in 2001 was rejected for insufficient evidence.  Russia’s claim, which is based on its contention that its continental shelf extends beyond the North Pole, is rejected by the other countries with territory bordering on the Arctic.  In 2007 a Russian submarine planted a flag on the seabed under the North Pole.

As reported last week, EPA announced its final rules for controlling greenhouse gas (GHG) emissions from existing powerplants on August 3.  Known as the Clean Power Plan, the regulations are designed to reduce GHG emissions from this sector by 32% over 2005 levels by 2030.  I gave five press interviews on the regulations and wrote an online oped supporting them.

On August 6 an Australian court reversed approval of the Carmichael Coal Mine and Rail Project that environmentalist argue will threaten the Great Barrier Reef.  The decision reportedly was based on the Environment Department’s failure to consider impacts on endangered reptiles in the vicinity of the project.  The decision is expected to delay, but not necessarily kill, the $12.1 billion project by the Indian firm Adani. 

The Chinese Ministry of Environmental Protection (MEP) reported last week on environmental enforcement during the first six month of 2015. MEP reported that it had shut down 9,300 companies and suspended work at another 15,000 during this six-month period.  Nearly 300 companies were fined a total of 236 million RMB ($38 million).  Managers of companies were prosecuted in 740 cases and 57 government officials were punished for enforcement failures.   Beginning on January 1 new amendments to China’s basic environmental law took effect that were designed to improve enforcement.  The amendments authorize public interest lawsuits and provide for daily penalties for violators.  The Qingdao Maritime Court recently agreed to hear a public interest lawsuit against ConocoPhillips and China National Offshore Oil for an oil spill in Bohai Bay that occurred in 2011.  The lawsuit was brought by the China Biodiversity Conservation and Green Development Foundation.  Previously the court had refused to accept a lawsuit by the All China Environment Federation on behalf of fisherman harmed by the spill. 

Because enforcement in China is largely left to local officials, China’s small Ministry of Environmental Protection (MEP) summoned the leaders of ten cities to encourage them to step up enforcement.   Some companies have pushed back against enforcement.  Claiming that local enforcers failed to follow proper procedures, the Shaanxi Coal Chemical Energy Company in Xianyang has refused to pay 15.8 million RMB ($2.5 million) in fines,  Zheng Jinran, Companies, Officials Punished for Failure to Control Pollution, China Daily, Aug. 6, 2015, at 1. 

The Supreme People’s Procurate (SPP) last week announced that, as part of an effort to step up criminal enforcement of food safety laws, it will target corrupt officials who take bribes to protect violators.  The SPP reported a 136% increase in arrests of food safety violators in the last year.

A two-year study of 2,144 chlidren in the greater Shanghai area found a 75% drop in lead levels in the children's blood during the last 20 years.  The study, conducted by researchers from China’s Ministry of Education and the Shanghai Key Laboratory of Children’s Environmental Health at Shanghai Xinhua Hospital, credited the phaseout of gasoline additives in 1997 with the dramatic reduction.  Average blood lead levels plunged from 83 micrograms per liter to 20 microgram per liter.  However, these levels are still above the 10 micrograms per liter average found in children in the U.S.  Cai Wenjun, Lead Levels in Kids Drop 75% in 20 Years, Shanghai Daily, Aug. 6, 2015, at 5.  In the last two weeks levels of ozone have replaced PM2.5 as the major air pollution concern in Shanghai.  At one point they reached a level of 246 micrograms per cubic meter of air at one point, far above the World Health Organization’s recommended limit of 100 micrograms per cubic meter.

I am currently in Hong Kong, which experienced its hottest day in history yesterday when temperatures hit 97 degrees Fahrenheit.  Air pollution levels were unusually high, which authorities attributed to unusual air circulation caused by Typhoon Soudelor.  Today I visited the June 4 Museum in Kowloon which documents the Tiananmen Square Massacre on June 3-4, 1989.  The Hong Kong press reports that when Taylor Swift’s new album 1989 goes on sale on the mainland the authorities may require her to delete “1989 T.S.” from the label for fear that it will be a reminder of those tragic events.

EPA Finalizing Clean Power Plan, Chesapeake Sea Grasses Rebound, Price Plunge Slashes Oil Company Earnings, Antarctica Talk & China Trip (by Bob Percival)

The U.S. Environmental Protection Agency’s long-awaited Clean Power Plan to control emissions of greenhouse gases (GHGs) from existing power plants will be issued in final form on Monday August 3.  Since EPA proposed the regulations in June 2014 it has received more comments on them that it has ever received on any proposed regulations in the agency’s 45-year history.  The final regulations include some significant changes from the agency’s initial proposal, indicating that EPA listened carefully to the avalanche of comments it received.  The regulations are being issued pursuant to §111(d) of the Clean Air Act, which allows the agency to require states to regulate a pollutant for which it has established a new source performance standard if it is not already regulated as a criteria air pollutant with a national ambient air quality standard (NAAQS) or as a hazardous air pollutant subject to a national emissions standard for hazardous air pollutants (NESHAP). EPA is setting emissions targets for states that in the aggregate will reduce GHG emissions by 32 percent from 2005 levels by 2030.  

The agency has removed from the target-setting process the fourth of its four proposed “building blocks” - demand-side energy efficiency improvements.  This should eliminate some of the most vociferous legal objections to the regulations that contended that the agency had no authority to include this in the regulations.  EPA also increased the flexibility afforded states, placing more emphasis on regional, rather than individual state, calculations of emissions rates.  It also has delayed for two years from 2020 to 2022 the initial start date for compliance by power plants, which will make it more difficult for companies to argue that they face irreparable harm if the regulations are not stayed.  Initial state plans will be due in September 2016, but states that provided a reasonable explanation for needing more time can obtain extensions to September 2018.  At the same time EPA is keeping incentives for early action by states to reduce emissions by investing in renewable energy sources.  Although Senate majority leader Mitch McConnell has been urging states to “just say no” to EPA, the Washington Post reports that most states, including McConnell’s home state of Kentucky, are planning to comply with the regulations.  Joby Warrick, Outrage Over EPA Emissions Regulations Fades as States Find Fixes, Washington Post, July 23, 2015.  EPA’s regulations include a Federal Implementation Plan (FIP) for states that refuse to submit their own plans, but it is eschewing use of the sanctions provided under the Clean Air Act for states that fail to comply, such as the withholding of federal transportation funds.  Thus, it will be very hard for opponents to argue that the regulations trample federalism concerns.

There will be fierce rhetoric attacking EPA’s regulations, as now routinely occurs whenever the agency adopts national regulations.  Republican presidential candidate Marco Rubio, who two years ago said that EPA was “carpet bombing” the economy, was already on TV today arguing that the rules would be “catastrophic” for single moms.  But, revealingly, he revisited the former talking point that China is doing nothing to control its emissions, which now could not be more false.  There also will be a multiplicity of legal challenges to the rules.  Industry groups were so eager to challenge them that they sued EPA last year before the rules were even issued.  The industry lawsuits were tossed out of court last year as being premature.  With the changes EPA made between its proposed and final rule, the agency is on even firmer legal footing, despite what its critics will say.

On July 30 officials from Maryland and Virginia announced that for the second year in a row Chesapeake Bay sea grasses rebounded significantly.  A survey conducted by the Virginia Institute of Marine Sciences found that Chesapeake sea grasses covered 27% more of the Bay bottom in 2014 than in  2013. The survey found that underwater grasses covered 75,835 acres of the Bay, an increase from 59,711 acres in 2013.  The Bay-wide restoration goal is 185,000 acres. 

Major multinational oil companies reported last week that their earnings had fallen to the lowest levels in a decade, due to the low price of crude oil.  Several companies also announced layoffs and sharp cuts to their capital spending, reflecting a conclusion that lower oil prices are here to stay for an extended period. ExxonMobil reported a 49% decline in profit, which sent its stock tumbling.  Chevron’s stock also plunged after the company reported that its profit dropped 89%.  Crude oil prices are hovering just above $50/barrel, less than half the level that prevailed last year.  This makes it all the more puzzling why Royal Dutch Shell is continuing to pursue drilling in the Arctic where it will not be profitable without oil prices above $75/barrel.  

On Tuesday July 28 I gave a “Hot Topics” lecture at Vermont Law School on “Environmental Law in the ‘Last Place on Earth’.”  The lecture compared the unique legal regime that protects the environment in Antarctica with the situation in the Arctic, where a rush is on to development.  I noted the New York Times story that appeared last week (Ian Urbina, A Renegade Trawler, Hunted for 10,000 Miles by Vigilantes, N.Y. Times, July 28, 2015) that reported how the private group Sea Shepherd hunted a vessel caught illegally fishing in Antarctica for 110 days before it was scuttled by the Spanish criminal syndicate that owned it. This represents another example of emerging action by NGOs to assist with the enforcement of environmental law, a significant element in the growth of global environmental law. 

On July 30 Professor Zhao Huiyu of Shanghai Jiatong University’s KoGuan School of Law gave a “Hot Topics” lecture at Vermont Law School on China’s new public interest litigation law.  She presented some fascinating new data on how the law is operating as Chinese courts accept public interest cases that they previously would have refused.  Professor Zhao and I left Vermont to drive to Boston after the final class of our Comparative U.S./China Environmental Law course on Thursday afternoon.  Even though her flight from Boston back to Shanghai was not until very early Friday morning, it left before mine.  I had a flight back to D.C. on the 9pm Thursday U.S. Air shuttle.  The flight left more than 3 hours late after midnight, flew half way to D.C., and then was ordered to return to Boston because Reagan National Airport had closed.  I spent the night on a bench at Logan Airport because the hotels were all full and then returned to D.C. on the 8AM shuttle on Friday morning. On Tuesday I will fly to Shanghai to complete my service for the year as a high level visiting foreign expert.