Monthly Archives: June 2013

Removing State Protection for Isolated Wetlands

June 26, 2013: An earlier post talked briefly about a section of Senate Bill 638 (N.C. Farm Act  of 2013) that would eliminate water quality protection for isolated wetlands by excluding wetlands that fall outside federal Clean Water Act jurisdiction from the definition of “waters of the state”. Although the language has changed somewhat, the bill approved by the Senate last month still has the effect of removing water quality protection from wetlands that fall outside federal permitting jurisdiction.  The limit on federal jurisdiction has nothing to do with the value of the wetland — it has to do with how the U.S. Constitution divides responsibility between the  federal  government and the states. Congress’ authority to regulate interstate commerce has been the constitutional basis for federal environmental laws, so Clean Water Act permitting programs only apply to navigable waters (including tributaries and wetlands connected to those waters). Wetlands that have no connection  to navigable waters  fall entirely under state jurisdiction. Section 20 of Senate Bill 638 (as it passed the Senate)  would remove state protection for those “isolated” wetlands and allow the wetlands to be filled, excavated or used for waste disposal without a water quality permit.

As noted in the earlier post, the wetlands provision appears in a farm bill but developers may get most of the benefit. Since then, I have looked back at the state’s isolated wetlands rules and found that most (and possibly all) agricultural activities are already exempt.  The isolated wetlands permitting rule, 15A NCAC 2H.1301, has a list of exemptions from the permit requirement and the first is for  “[a]ctivities that are described in 15A NCAC 02B .0230”.  The activities described in 15A NCAC 02B.0230 include:

     (1)  normal, on-going silviculture, farming and ranching activities such as plowing, seeding,   cultivating,minor drainage and harvesting for the production of food, fiber and forest products, or upland soil and water conservation practices…

(2)  maintenance, including emergency reconstruction of recently damaged parts, of currently serviceable structures such as dikes, dams, levees, groins, riprap, breakwaters, causeways, and bridge abutments or approaches, and transportation structuresand other maintenance, repairs or modification to existing structures as required by the NC Dam Safety Program;

(3)  construction and maintenance of farm or stock ponds or irrigation ditches.  In addition, new pond construction in designated river basins with riparian buffer protection regulations also must comply with relevant portions of those regulations;

(4)  maintenance of drainage ditches, provided that spoil is removed to high ground, placed on top of previous spoil, or placed parallel to one side or the other of the ditch within a distance of 20 feet and spoils are placed in a manner that minimizes damages to existing wetlands; and ditch maintenance is no greater than the original depth, length and width of the ditch;

(5)  construction of temporary sediment control measures or best management practices as required by the NC Sediment and Erosion Control Program on a construction site…; and

(6)  construction or maintenance of farm roads, forest roads, and temporary roads for moving mining equipment where such roads are constructed and maintained in accordance with best management practices…

The existing agricultural exemptions are so broad, that it is difficult to think of anything that may still be a problem for farmers — but at the very least an amendment intended to protect agricultural activity could be much narrower than the language adopted by the Senate. Having easily passed the Senate, the bill is now in the House where the path has become a little rockier. It appears that the N.C. Homebuilders Association has been lobbying hard for the provision, but a new version of the bill approved by a House Judiciary subcommittee this morning dropped the wetland language. The bill now goes to the House floor; an effort to amend the bill to restore language excluding isolated wetlands from water quality permitting requirements is likely.

N.C. Senate Intervenes in Fracking Issue

June 25, 2013: In May, the state’s Mining and Energy Commission (MEC) held up a draft rule requiring disclosure of  chemicals used in hydraulic fracturing  because of objections from lawyers representing energy contracting giant  Halliburton. The draft rule approved by the MEC’s Environmental Standards Committee would have required drilling companies to disclose all of the chemicals used in fracking fluid to staff in the Department of Environment and Natural Resources.  Consistent with the state’s Public Records Act, the rule protected trade secret information from disclosure to the public.  Halliburton wanted the ability to withhold trade secret information even from DENR staff unless the information was needed to respond to natural resource damage or a health threat. An earlier post talked about the controversy over disclosure of hydraulic fracturing chemicals and trade secret protection in more detail.

Today, the Senate’s Agriculture and Environment Committee approved a new version of House Bill 94 (Amend Environmental Laws) that resolves the issue in Halliburton’s favor. DENR Assistant Secretary Mitch Gillespie indicated DENR’s support. The new language, in Section 7 of the revised bill (not yet available on the General Assembly website), allows anyone covered by the shale gas legislation to withhold information on a chemical  used in hydraulic fracturing fluid by simply claiming that  the information is a trade secret. Once the drilling operator or supplier claims trade secret protection, DENR can only obtain the  information by request of the Secretary to “respond to a situation that endangers public health or the environment”.  The bill allows the trade secret claim to be challenged in the N.C. Business Court by the Department , another state agency,  a local government emergency response official, or the owner of the well site or property immediately adjacent to the well site.

There are at least two risks in withholding information on the chemicals used in hydraulic fracturing fluid from state regulators until after a problem has arisen: 1. In a real-time emergency — such as a major spill or fire –  it may be difficult to  get the necessary information from the drilling company (or its supplier) quickly enough; and 2.  the length of time between completion of the well and discovery of a hidden  problem (such as groundwater contamination) may make it difficult to get accurate information at all. With respect to groundwater contamination, it is not clear how the state can have an effective water quality monitoring program for hydraulic fracturing operations if the industry can  unilaterally withhold information on the chemicals used in the fracking  fluid.

The  trade secret protection provided for fracking chemicals in House Bill 94 also goes beyond the confidentiality provisions in the state’s Public Records Act. The Public Records Act already requires state agencies to keep  trade secrets confidential and G.S. 62-152(3) provides a definition of “trade secret”.  Although the Public Records Act protects trade secrets from disclosure to the public, it does not allow a business or industry to withhold trade secret information from state regulators. By authorizing drilling companies to withhold information from regulators, House Bill 94 allows  the natural gas industry a degree of  secrecy that appears to be unprecedented under the N.C. Public Records Act.  The House Bill 94 language also restricts challenges to  a trade secret claim by limiting who can bring a challenge.  The Public Records Act allows anyone to challenge a claim that information must be kept confidential as a trade secret; the House Bill 94 language appears to bar challenges by news media, nonprofit organizations, nearby (but not immediately adjacent) property owners and  any number of other interested parties. Another early post discussed the state’s Public Records Act and existing protection for trade secrets.

The McCrory Administration Remakes the N.C. Water Quality Program

June 25, 2013:   The N.C. water quality program has been innovative, award-winning and a frequent target of complaints — complaints about  excessive regulation and complaints about poor customer service. The complaints probably result in part from the reach of water quality rules. Over the last 15-20 years,  water quality programs have expanded to address pollution that gets to rivers and streams indirectly —  in runoff from parking lots, roads, lawns and agricultural activities, for example. The expanded scope of the water quality program responded to specific state water quality problems and a new (beginning in the 1990s)  federal focus on “nonpoint sources”.  (The term “nonpoint source” distinguishes these indirect sources of water pollution  from “point sources”, such as pipes and ditches,  that directly discharge waste to rivers, lakes and streams.) In the 1970s and 1980s, the Division of Water Quality  mostly regulated municipal wastewater systems and industrial discharges to rivers and streams.  A simple subdivision development only needed a water quality permit if the  construction involved filling a wetland or stream.  Since the 1990s,  water quality rules have had a much greater effect on real estate development, agriculture, and even the activities of individual property owners.  Any regulatory program that touches so many citizens and activities will generate controversy and complaints — some legitimate and  others not.

The McCrory administration has begun moving toward a major reorganization of the  water quality programs in DENR’s Division of Water Quality (DWQ). It is not yet clear what the state’s water quality program will look like in the end or even what the McCrory administration wants to achieve,  but Secretary John Skvarla has been publicly and harshly critical of the Division of Water Quality’s customer service. Word has  started to get out about  first  steps in reorganization of the division.  Both the division director and deputy director  have recently  taken new assignments;  former director Chuck Wakild  will retire in August.  Reports are that the first reorganization move will be to transfer all  stormwater programs from the Division of Water Quality  to the Division of Energy, Mineral and Land Resources effective  August 1 2013.  The transfer will have a big impact — the Division of Water Quality now manages a number of different state and federal stormwater programs.  State stormwater programs include coastal stormwater  rules designed to protect the quality of shellfish waters and stormwater requirements associated with the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake nutrient rules. Federal  stormwater programs  (Clean Water Act programs delegated to the state by EPA)  issue permits for municipal and industrial stormwater discharges and construction stormwater permits for active construction sites.

The Division of Energy, Mineral and Land Resources (DEMLR)  has no stormwater experience  (other than a supporting role in  DWQ’s issuance of construction stormwater permits)  and no experience managing  federal  Clean Water Act programs. Taking on the stormwater programs will greatly increase the portfolio of a division already struggling to meet the enormous workload associated with shale gas rule making.  The move will also separate  federal  stormwater programs from other federal Clean Water Act permitting programs delegated to DWQ, requiring a bit more effort to coordinate water quality strategies that require control of both point and nonpoint pollution sources. It appears that the remaining DWQ  programs will become part of an expanded Division of Water Resources.

As the McCrory administration  moves forward with reorganization plans, a few things to watch for and think about:

Will the reorganized programs have enough  staff to  review permits, inspect  projects,  enforce  environmental  laws and meet federal grant requirements? Even in the construction stormwater program where there has long been a cooperative agreement between DWQ and DEMLR’s sediment program,  merging staff from the two divisions does not yield a single program with enough staff to meet its responsibilities under state and federal law.  Budget cuts in the sedimentation program over the last five years have take too great a toll.  The temptation to use reorganization as a way to cut positions will be great; it should only be done if the new organization can continue to meet all of its state and federal responsibilities. The same holds true for transfer of DWQ programs to the Division of Water Resources; some programs in the two divisions  appear to do similar things, but in reality have very different purposes.  Reorganization decisions will need to keep those different  program functions in mind.  Staffing levels also affect the federal grants that support much of the water quality program;  state-funded staff positions provide much of the required state match for federal grant dollars and at a certain point eliminating state-funded positions jeopardizes the federal funding.

Will reorganization decisions maintain all of the functions needed to meet Clean Water Act requirements?  Permits are only a small part of the state’s federal Clean Water Act responsibilities. The state must also have an ongoing water quality planning program  that regularly reviews water quality standards; identifies rivers, lakes and streams that are not meeting water quality standards;   develops  plans to improve water quality; and develops best management practices to reduce nonpoint source pollution.

The Division of Water Quality’s water quality planning program provides much of the information and analysis needed to meet the planning requirements of the Clean Water Act.  Planning programs may appear less critical than permitting, but the planning program provides the monitoring data needed to evaluate the effectiveness of water quality rules, pinpoint pollution problems,  and develop the right solution. A planning program that meets federal requirements is also necessary for the state to  have a delegated Clean Water Act permitting program.

Will the reorganization maintain the expertise needed to evaluate water quality trends, find solutions to impaired water quality, provide good advice to permit applicants, and advocate the state’s position on water quality policy to EPA? Many water quality programs (especially the delegated federal programs) are very complex. Water quality staff need to understand both the science and the law to help permit applicants through the process. There are also times that EPA and the state will disagree on an issue that affects a Clean Water Act permitting program;  DENR will need the knowledge and experience to make a case for the state’s position.

— Will changes that affect federal Clean Water Act programs require EPA approval? The answer  will depend on what kind of changes are made (to organization structure, staffing and program functions)  and how the existing program description approved by EPA was written. Generally, program changes have to be submitted to EPA for approval along with a certification by the Attorney General that the water quality program continues to meet requirements of the Clean Water Act.

N.C. has made tremendous gains in water quality over the last 20 years. Some of the more visible signs of progress have been better management of swine waste, innovative approaches to stormwater control, creation of GIS tools to better predict stream and wetland impacts, and development of river-basin water quality plans that provide a big picture of water quality conditions, threats and trends. One of the real challenges of environmental protection programs is that success often means avoiding a problem — success is the swine waste lagoon that doesn’t fail, the fish kill that doesn’t happen, drinking water supplies unaffected by algae. The challenge for the McCrory administration will be to improve what needs to be improved in the state’s water quality programs without undermining their effectiveness. Water supply will be key to the state’s economic future — and the quality of the water is as important as the quantity.

Note: A new version of House Bill 94 (Amend Environmental Laws) came up in the Senate Agriculture and Environment Committee this  morning. The bill included a new section that directs DENR to combine the Division of Water Quality with the Division of Water Resources.  The senator presenting the bill indicated that DENR had asked for the reorganization authority, but the details of the bill language do not match up with reported plans for moving the stormwater programs to the Division of Energy, Mineral and Land Resources.  The version of House Bill 94 approved by the committee shifts the stormwater programs to the Division of Water Resources with other water quality programs. Either the DENR plan has changed or the bill needs a little more work.

Landfill Update

June 20, 2013:  Yesterday, the Senate Finance Committee approved a revised version of Senate Bill 328 (the Solid Waste Management Reform Act of 2013). The new bill draft undoes some of the changes to existing solid waste laws proposed in earlier versions of the bill. The bill:

— Reinstates the requirement for an Environmental Impact Statement (EIS) for landfills.

— Adds a modified requirement for inspection and cleaning  of leachate lines  (requiring inspection every five-years and cleaning as needed in place of the current requirement for annual cleaning).

— Removes earlier bill language that would have allowed waste disposal in wetlands that are not  protected under federal law; the bill still eliminates the current  200 foot buffer between waste disposal areas and wetlands.

— Returns to existing limits on landfill size, removing language that would have increased the maximum landfill height from 250 to 300 feet.

Unfortunately, the new version of Senate Bill 328 provides even less protection for endangered species habitat and other sensitive areas than the previous bill draft.  The new version still repeals language in the solid waste laws that allows DENR to deny a landfill permit based on significant damage to:

“ecological systems, natural resources, cultural sites, recreation areas, or historic sites of more than local significance…[including] national or State parks or forests; wilderness areas; historic sites; recreation areas; segments of the natural and scenic rivers system; wildlife refuges, preserves, and management areas; areas that provide habitat for threatened or endangered species; primary nursery areas and critical fisheries habitat designated by the Marine Fisheries Commission; and Outstanding Resource Waters designated by the Environmental Management Commission.”

But the  bill also drops earlier Senate Bill 328 language that would have prevented landfills from being located in critical habitat for a threatened or endangered species or in a historically or archaeologically sensitive site.  The only protection for important natural resources appears in one provision that requires a 1500 foot setback between a landfill and  a national or State park, a designated Natural and Scenic River, a  National Wildlife Refuge, critical fisheries habitat or Outstanding Resource Waters.

Without any permitting standard that protects sensitive areas,  information from an  EIS that shows construction or operation of the landfill will significantly damage a  park, wildlife refuge, endangered species habitat, historic or archaeological site will just be interesting reading. The bill will leave DENR with little or no ability to actually use that information to deny a permit or to put conditions on the permit to protect conservation areas, public recreation areas, endangered species habitat and other sensitive resources.

House v. Senate Budget on Environmental Policy

June 15, 2013: A comparison of the House and Senate budget bills continued (again, not a comprehensive list).

Policy and organization changes the House and Senate agree on; these also have related   money provisions:

●  Transfer the State Energy Office from the Department of Commerce to the Department of Environment and Natural Resources.

●  Move Clean Water Management Trust Fund staff into the Department of Environment and Natural Resources. (There are  differences in the way the House and the Senate would organize the conservation trust funds after the transfer.)

●    Allow the state Division of Marine Fisheries to enter into a  joint  enforcement agreement with the National Marine Fisheries Service.  Under the agreement,  the  state marine patrol would receive federal  funds  to enforce  federal  fisheries regulations in federal waters.

●  Require owners of small, noncommercial underground petroleum storage tanks (such as home heating oil tanks and on-farm gasoline storage tanks) to pay a $1,000 deductible and a 10% copay for assessment and cleanup of a spill or leak. Currently, the state’s Noncommercial UST Trust Fund pays the full cost of assessment and cleanup; the tank owner only pays for removal of the leaking tank.

Things to be resolved in conference:

●  How to  fund conservation and parks. The Senate budget transfers all revenue from the deed stamp tax (which has been dedicated to the Parks and Recreation Trust Fund and the Natural Heritage Trust Fund) to the state’s General Fund and then appropriates a smaller amount for parks and conservation programs  supported by the trust funds. The House budget continues to dedicate revenue from the deed stamp tax  to trust funds for parks and conservation — 75%  to the Parks and Recreation Trust Funds (no change) and 25% to the Clean Water Management Trust Fund (eliminating the Natural Heritage Trust Fund).

●   Elimination of the Uwharrie Regional Resources Commission. The House budget bill proposes to repeal the Uwharrie Regional Resources Act, which would have the effect of eliminating the Uwharrie Regional Resources Commission.  The Commission was created largely to advocate for and support a state  takeover of the Alcoa hydropower plants on the Yadkin River.

●  Creation of a new Oregon Inlet Land Acquisition Task Force to study the possibility of acquiring federal lands on either side of Oregon Inlet for purposes of building jetties to stabilize Oregon Inlet.  See an earlier post on the Senate  proposal here.

●   Changes to board and commission appointments. The Senate put changes to the Environmental Management Commission and Coastal Resources Commission appointment statutes into  the budget bill. The House budget bill does not include anything on board and commission appointments, but  a separate House  bill (House Bill 1011) has very similar language.

●  Whether to continue to dedicate some tax revenues to specific programs or bring all revenue into the General Fund to be allocated by the legislature on a year to year basis. The Senate budget  reclaims revenue from a number of  special taxes for the state’s General Fund and replaces the dedicated funding from those taxes with year to year appropriations  — generally at lower funding levels.   I have already talked about the Senate proposal to transfer deed stamp tax revenue to the  General Fund. The Senate budget does the same thing with  the scrap tire disposal tax, the white goods disposal tax and a portion of the solid waste disposal tax. Those taxes now directly support  recycling, waste reduction,  and solid waste management programs.  The Senate budget  transfers the  revenue from those waste disposal taxes to the  General Fund to be allocated by the legislature.  That diversion of tax revenue raises a bit of a bait and switch issue. The taxes were originally justified as necessary to pay for appropriate waste disposal and recycling;  transferring revenue from the disposal taxes to the General Fund weakens that link.

House v. Senate Budget on Funding for Environmental Programs

June 15, 2013: The N.C. House has adopted a  budget bill, giving a  better  picture of the shape a final state budget may take. Next step will be a conference committee to resolve the differences between the House and Senate budgets; the compromise bill that comes out of the conference committee then has to be approved by both the House and the Senate to become final. The time available to reach a compromise — two weeks; the new state fiscal year  begins July 1. (If an agreement can’t be reached by July 1, the legislature usually adopts a “continuing resolution” that allows state agencies to continue to function under a temporary spending plan.)

You can usually assume that budget cuts, appropriations and  policy provisions  that are the same in the House and Senate budget bills will also  be in the final budget bill.  This post focuses on decisions about  money — program cuts and appropriations; another post will talk about policy differences in the two budget bills.  Overall, the House budget makes somewhat smaller reductions to programs in the Department of Environment and Natural Resources than the Senate budget. (An earlier post explains why the Senate budget — which at first glance seems to increase the DENR budget — actually cuts the budget for existing  programs.)  The list below is not comprehensive; you can find the entire House version of the budget bill (Senate Bill 402) on the General Assembly website.

Some of the funding decisions the House and Senate budget bills agree on:

●   End the Sustainable Communities Task Force and eliminate the one position in DENR that supports the Task Force. (The task force worked on guidelines for transportation, housing, open space and other development policies to support neighborhoods and communities.)

●  Provide more funding and up to four new positions to support the Mining and Energy Commission’s work on shale gas regulation

●   Make additional reductions in the state  program to restore shellfish habitat and rebuild the state’s oyster fishery (already significantly cut in earlier budget years).

●  Provide $1.1 million in one-time funding for observers to monitor the impact of commercial fishing  practices  on endangered sea turtles. The “at sea” observer program  is required under an agreement between the state and the U.S. Fish and Wildlife Service (which enforces the Endangered Species Act)  to keep the gill net fishery open.

●   Eliminate funding for the Adopt a Trails program.

●   Fund two new positions in the Division of Waste Management to  investigate areas with known groundwater contamination and

●  Appropriate $3.5 million for the Noncommercial UST Trust Fund.  The Fund pays to  cleanup petroleum leaks and spill from small, noncommercial underground storage tanks (such as home heating oil tanks and on-farm gasoline tanks.)

● Provide state match money to draw down federal funds for the drinking water and wastewater revolving loan funds. (The two revolving loan funds make very low interest loans available to local government water and sewer systems for infrastructure improvements.)

● Eliminate state appropriations for the N.C. Biofuels Center.

●  Eliminate state funding for Partnership for the Sounds (a private, nonprofit organization that promotes environmental education, ecology-based tourism, and sustainable development in the Albemarle-Pamlico region).

● Cut operating funds for the N.C. Zoo, but provide new money to repair and replace the Zoo trams.

 Some of the things that are different and will need to be worked out in the conference committee:

● Funding for the  Clean Water Management Trust Fund. The House funds CWMTF through appropriations  and a new allocation of  25% percent of the deed stamp tax.   The Senate budget  eliminates all funding for CWMTF, creating a new Land and Water Conservation Fund that is a hybrid of CWMTF and the Natural Heritage Trust Fund.

● The House appropriates $3.6 million for maintenance dredging in shallow draft navigation channels,  funded by an allocation from the Highway Fund.

● The House budget increases a number of fishing license and  permit fees;  the increased fee revenue would fund the at-sea observer program in 2014-2015 and later years.

● The Senate eliminates all funding for the N.C. Rural Economic Development Center and gives $4 million  to DENR for a new water and sewer infrastructure grant program to take the place of a similar program now run by the Rural Center. The House budget continues to fund the Rural Center.

● The Senate eliminates state  funding for the N.C  Museum of Forestry  in Whiteville and proposes to sell the museum to either the town or to Columbus County for $1. The House budget continues state funding for the museum.

Compromise on LEED Certification

The bill proposing to prevent state construction projects  from   seeking  “green building” certification  under LEED  standards  (House Bill 628) appears to be moving toward a compromise.  An earlier post described the controversy over  LEED standards for wood products.  Yesterday, the Senate Agriculture and Environment Committee approved a  new – and entirely rewritten – version of  House Bill 628.  You can find the new bill draft here. The Senate version of House Bill 628 does two things:

  1.  The bill adds entirely  new  language on  energy efficiency standards for state construction projects. The Senate bill  would  change existing law to only require state construction projects to meet more aggressive energy efficiency standards adopted by the General Assembly  in 2008  if the result would be a net savings in construction and operating costs.  To calculate “net savings”, the bill uses construction costs added to operating costs for the first ten years after completion (as compared to building the same structure without meeting the energy efficiency standards).   The committee heard some concerns about using ten years of operating costs to calculate net savings.  Apparently most energy efficiency construction contracts use 15-20 years as the time period for recovery of costs and calculation of net savings.  Senator Tommy Tucker, who offered the amended bill language in committee, said that he would be willing to consider a different time period as long as it is reasonable.
  2. The bill completely replaces the original House Bill 628 language on acceptable  “green” building certification.  The Senate version would allow state construction projects to  use any energy efficiency/environmental design rating system that  “(i) provides certification credits for, (ii) provides a preference to be given to, (iii) does not disadvantage, and (iv) promotes building materials or furnishings, including masonry, concrete, steel, textiles, or wood that are manufactured or produced within the State”.   The LEED rating system seems to meet that requirement by  providing  specific credits for use of  regional  materials. You can find the list of LEED credits available for new building construction/major renovation projects here.    A new commercial building must meet basic  LEED  requirements  and earn a minimum of 40 points on a 110-point  rating  scale to get  LEED certification. Use of wood products meeting  Forest Stewardship Council standards  can provide one  point, but use of regionally sourced  building materials can provide  two  points  (if 20% of the building materials meet the regional material standard).

A footnote on the issue of LEED certification and  use of N.C.  wood products: There has been an ongoing fight over what should count as “sustainable” forestry. (See the earlier post  on a recent complaint filed with the Federal Trade Commission about  “green” labelling for wood products.) Setting that aside,  concerns about the  impact of LEED certification on use of N.C. wood products  may   also come  from  the  way architects translate LEED standards into specifications for individual construction projects   The  House bill sponsor, Representative Michele Presnell,  used an example of major renovations at Tryon Palace (a colonial era building in New Bern) where the material specifications required use of wood products meeting Forest Stewardship Council  standards. Although major wood producers are located within a stone’s throw of Tryon Palace,  Representative Presnell said  they were closed out of bidding because none of those producers operate under FSC  standards.   I don’t have any direct knowledge of the specifications for the Tryon Palace project, but if that happened it seems to be an unnecessary result even under LEED standards. With a 110-point rating system, there are many different ways to reach the  40 points needed for LEED certification.  It is possible to reach  LEED certification without relying on the one point for wood products at all. (And the wood products credit only requires that 50% of the permanent wood products used in the building meet the FSC  standard.)

A conversation between the N.C. forest products industry and the state chapter of the American Institute of Architects about how specifications for LEED projects can be written to support use of N.C. products might benefit the industry even more than legislation.

House Bill 628 is on the Senate calendar today and will then go to a conference committee to work out the differences between the House and Senate versions.

Weakening Environmental Standards for Landfills

June 8, 2013:  On Thursday, the Senate’s Agriculture and Environment Committee approved a radically rewritten version of  Senate Bill 328 (Solid Waste Management Reform of 2013) in very short order.  The bill undoes  a number of environmental standards adopted in a  2007 rewrite of the state’s landfill permitting laws, weakening protections for  parks, wildlife refuges, wetlands,  endangered species habitat and sensitive or high quality surface waters. It also changes some longstanding environmental standards for landfill operation that predate the 2007 law.

A little history first. In 2006, the Department of Environment and Natural Resources (DENR) received  several  permit applications from private waste management companies proposing construction  of  new and  very large landfills in the coastal area of the state.  Reacting to the controversy over those landfill proposals, the N.C. General Assembly put a one-year moratorium on landfill permitting to allow time for a study of permitting standards.   After the study, the General Assembly adopted a major piece of legislation,  Session Law 2007-550, that set new landfill permitting standards, including setbacks from wildlife refuges, parks and gamelands;  increased   bonding requirements for landfill operators; and  stronger standards for leak prevention and detection. The bill also, for the first time, created a state solid waste disposal tax and dedicated the tax revenues to recycling programs and cleanup of contamination from old,  unlined landfills.

Waste management companies fought the solid waste disposal tax and opposed some of the new environmental standards.  A  Raleigh-based company, Waste Industries, U.S.A.,  sued to challenge the final law. (Some of the new landfill standards affected plans for a large Waste Industries landfill  near Dismal Swamp State Park and Dismal Swamp National Wildlife Refuge in Camden County.)   In 2012, the North Carolina Court of Appeals ruled against Waste Industries and upheld the law. Senate Bill 328  appears to be a new  effort by landfill developers and operators to legislatively undo many of the standards adopted in 2007 and change some  requirements that were in place long before  2007.

Senate Bill 328 changes specific to landfill design, construction and operation are described in more detail below.  Among the most important  would be repeal of several standards for denial of a landfill permit. The Department of Environment and Natural Resources (DENR) would no longer be able to deny a  permit because construction or operation of the landfill would cause significant damage to parks, wilderness areas, habitat for threatened and endangered species, critical fisheries habitat or other natural and historic areas of regional and statewide significance. (See Sec. 2). Instead,  a permit could be denied only if  the landfill would  be located in critical habitat for threatened or endangered species; in a historically or archaeologically sensitive site of more than local significance; or within 1500 feet of a national or state park, forest, wilderness area, recreation area, a segment of the Natural and Scenic Rivers system, a  National Wildlife Refuge, a wildlife preserve or management area, critical fisheries habitat, or other high quality waters. (See Section 3 of the bill).

The changes mean that DENR could  only consider location of the landfill itself and not impacts from construction and operation in making a permit decision. Removing those grounds for permit denial will also make it difficult for DENR to put conditions on construction and operation of the landfill to protect those natural resources.  As a result, the bill would leave some very sensitive   resources  vulnerable to damage from landfill construction and operation. With respect to habitat for threatened and endangered species,   failure to consider damage from construction and operation may make the bill inconsistent with requirements of the federal Endangered Species Act.

The bill also:

—  Repeals the requirement for  an environmental impact statement (EIS) for  new landfills.  (Section 3).   Repeal of this language would remove the EIS requirement in the solid waste statutes, but does not exempt local government landfill projects from the  State Environmental Policy Act (SEPA).  SEPA requires an EIS for any state-permitted project that  involves expenditure of public funds or use of public lands and may have a significant impact on the environment.  The odd result could be  an EIS for public projects, but not for commercial landfill projects that may be as large or larger.

— Eliminates the requirement for any buffer between a waste disposal unit (the actual landfill cell where solid waste is deposited) and wetlands.   The change could allow  waste disposal immediately adjacent to wetlands that are directly connected to surface waters.  (Section 3)

— Reduces the buffer required between landfills and national wildlife refuges, state parks, and gamelands managed by the N.C. Wildlife Resources Commission to 1500 feet. (Section 3).  The 2007 law required a buffer of five  miles from a National Wildlife Refuge, two miles from a state park, and one mile from state gamelands. Those buffer requirements reflected the recommendations of parks and wildlife officials,  but waste management companies saw the 2007 buffers as a legislative  attempt to kill specific landfill projects.

— Allows construction of a landfill in wetlands that fall outside federal Clean Water Act jurisdiction. (Section 3). Many court cases and law review articles have tried to clarify the line between federal and state wetland jurisdiction, but one possible result of the bill would be to allow  landfill construction in “isolated” wetlands  that  may not have a direct connection to surface waters,  but have a connection to groundwater.

— Eliminates the requirement for regular cleaning of leachate collection lines.  (Section 3).

— Raises the maximum landfill height from 250 feet to 300 feet, but creates additional closure and vegetative cover requirements for landfills of greater than 100 feet in height.  (Section 3).

—  Limits the landfill operator’s responsibility to assess  a release of landfill leachate  and take corrective action unless  leachate reaches the compliance boundary. (Section  5).   Leachate is water that  percolates through the  landfill, picking up contaminants from the waste material. Permits for waste disposal sites often allow  groundwater standards to be exceeded immediately  under a waste  disposal site as long as the groundwater meets all standards at a designated compliance boundary. For  landfills  permitted since 1983, the compliance boundary is generally 250 feet from the waste disposal site or 50 feet inside the property line (whichever is closer).  Corrective action requirements for landfills have been in place for many years and  always required the landfill operator to take steps to stop an ongoing leak or spill. The Senate Bill 328 language is so broad that it could be interpreted to excuse the operator from doing even that unless leachate actually reaches the compliance boundary. Excusing a landfill operator from corrective action to stop an ongoing  release of leachate  under any circumstances would likely be inconsistent with federal solid waste rules.

— Eliminates a requirement that vehicles carrying solid waste must be leak proof and instead requires only that  vehicles be “designed to be leak resistant”, changing a standard for transport of solid waste that has been in place for 25 years. (Section 7).

— Removes the minimum financial assurance requirement. Senate Bill 328 would still require financial assurance to cover closure of the landfill as well as assessment and cleanup of any spills or leak, but  removes the statutory floor of $2 million and gives DENR complete discretion to set the amount of the financial assurance.

One  part of the bill has impacts beyond landfill construction and operation. Section 6   would prevent  the Environmental Management Commission from reviewing state groundwater standards more often than every five years. Groundwater standards guide permitting of many  activities  that present a risk of groundwater contamination and provide the benchmark for  groundwater remediation.  Slowing the revision of groundwater standards may have unintended consequences for industry generally, since new research on health impacts sometimes provides support for a less stringent groundwater standard.

The bill makes other changes, but I will stop there. Senate Bill 328 will be on the Senate calendar for June 11.

Back to Shale Gas

June 5, 2013 –The House Committee on Commerce and Job Creation  approved a new version  of Senate Bill 76  (the 2013  bill on  shale gas production and offshore energy development); you can find the House bill draft here.  This post focuses on the shale gas provisions; a separate post will talk about changes dealing with offshore energy development.

The biggest change affecting shale gas development is that the House joins the Senate in backing away from  the current law (adopted just last year) that delays permitting of  hydraulic fracturing and horizontal drilling until the General Assembly acts to remove a moratorium on those activities. Like the Senate bill, the House bill draft allows the Department of Environment and Natural Resources (DENR)   to start issuing permits for hydraulic fracturing on March 1 2015. The difference is that the House  version  would require another action by the General Assembly to make those permits effective.   It isn’t clear what benefit comes from issuing permits but  requiring legislative action to make the permits effective – except that it may provide employment for  lots of lawyers. The problems:

— Rules for horizontal drilling and hydraulic fracturing may not be in effect by March 1 2015 and nothing in the bill  requires  all of the rules to be in effect before DENR starts issuing permits. (Note:The final Senate version of the bill allowed DENR to delay  issuance of permits  until all rules were in effect, but without further action by the General Assembly.)  Even if the Mining and Energy Commission (MEC) adopts all of the rules for shale gas development by October 1 2014 (as required under the 2012 legislation),   state law requires several more steps before the rules can go into effect.  First, rules   have to be approved by the Rules Review Commission (RRC); even if a rule receives RRC approval, any legislator  can  introduce a bill to disapprove a controversial rule.  Those steps could delay rules for many months after adoption by the MEC. The worst case (in terms of timing) —  rules that do  not get  Rules Review Commission  approval by the end of  December 2014   may not go into effect until  the  summer of 2016.    The bill needs to clearly explain  whether permits will be issued even  if all of the rules are not actually in effect on March 1 2015.  If that is not the intent, the bill should give DENR authority to deny permits or defer permit decisions until the rules go into effect.

— If the General Assembly intends for DENR to start issuing permits under rules that have been adopted but are not yet in effect, what does the permit holder have?  Will the permit holder be able to claim a legal right to operate under the permit  — even if the permit was issued under rules that never go into effect as originally adopted? The new bill  draft doesn’t say what happens if the legislature changes some of the rules for shale gas development after the permit has been issued but before the permit goes into effect.

— State law only allows 60 days to file a permit  appeal with the Office of Administrative Hearings and the clock begins to run as soon as DENR provides notice of the permit decision. Permits can be appealed by third parties  such as neighbors, local governments, and environmental organizations. Permit applicants sometimes  appeal  permit conditions. Does the clock on an appeal start when DENR issues the permit or when the General Assembly makes the permit effective?

Issuance of permits without all of the hydraulic fracturing rules actually  in effect  creates a significant risk of  confusion, uncertainty and legal conflict.  That  is probably  not the desired result. If the General Assembly intends to go down the road of permitting hydraulic fracturing without  final rules in effect, the bill needs to  resolve  the questions that follow from that decision.

Other changes made  in the House draft:

The House bill draft removes Senate language that would have allowed underground injection of wastewater from hydraulic fracturing operations.

The bill restores the registration requirement for “landmen”  (people who handle real estate transactions related to oil and gas drilling sites). The Senate bill proposed to drop the registration requirement  enacted in  2012.

The bill makes several changes and clarifications to bonding requirements.

The bill also adds still more studies to the three already required under the 2012 legislation – including a study on the appropriate amount of severance tax  for shale gas extraction and a study on creation of a restitution fund to cover damage to property owners  as a result of fraud or misrepresentation.

The bill  makes minor changes to the Mining and Energy Commission appointment statute. It eliminates the seat for the Assistant Secretary for Energy in Commerce —  most likely in anticipation of the energy program  moving  to DENR as proposed by Gov. McCrory.  The bill would also add a seat for a  landowner in the Triassic Basin (to be appointed by the Governor)  and eliminate language requiring that the  Commission for Public Health member who serves on the MEC must have  knowledge of waste management.

Both the Governor’s Office and DENR  indicated  support for  the House version of Senate Bill 76. The bill next goes to the House Environment Committee.

Note: The original post has been  modified to make it clear that the version of Senate Bill 76 adopted by the Senate allowed DENR to delay issuance of permits for hydraulic fracturing and horizontal drilling until all rules were in effect.

More Conflict Over Sustainable Forestry

June 2, 2013

An earlier post talked about the conflict over sustainable forestry practices behind House Bill 628.

The bill would prevent any new state building project from seeking certification under Leadership in Energy and Environmental Design (LEED) standards for “green” buildings. The reason — few North Carolina timber producers meet the LEED standard for wood, making their  wood products less competitive for projects seeking LEED certification.   The unusual thing about the conflict is that it has nothing to do with laws or rules.  The decision to seek LEED certification as a “green” building is voluntary on the part of the builder.  A timber operation can decide  to follow the forestry practices necessary to meet the LEED standard for wood products — or not.  House Bill 628 is part of a larger effort by the timber industry to be more competitive in supplying wood for  “green” building projects, but under  a competing set of forestry practice standards developed by the Sustainable Forest Initiative — a program  created  by the forest products industry.

On Saturday, the New York Times reported that ForestEthics  and Greenpeace have filed a complaint with the Federal Trade Commission (FTC) charging that the Sustainable Forest Initiative  defrauds the public by  certifying wood and paper products as environmentally sustainable.  The FTC has responsibility for enforcing truth in labeling standards and has found itself in the middle of a number of controversies over “green” product claims. In October 2012, the FTC  released new  guidelines for  “green” product labeling that for the first time include recommended standards for certification programs.

The ForestEthics/Greenpeace complaint  argues that wood products from operations following  Sustainable Forest Initiative standards  are no more environmentally sustainable than other wood products. The two organizations particularly criticize the standards  as allowing overuse of pesticides and clear-cutting and providing too little protection for endangered species. The complaint also claims that the Sustainable Forest Initiative board cannot be considered an independent “green” product certification agency under the  new FTC guidelines because of the  influence of the timber industry.  You can find the full New York Time article here.

The FTC complaint is just the most recent in a series of  skirmishes involving ForestEthics and the Sustainable Forest Initiative. There is no question that the  forest products industry started the Sustainable Forest Initiative; it  began  as a program developed by  the American Forest and Paper  Association.  The Sustainable Forest Initiative certification program now operates as separate nonprofit organization with a governing board that includes representatives of environmental organizations.  ForestEthics argues  that organizational separation from the industry association did not  eliminate  timber industry  influence over the Sustainable Forest Initiative, citing the makeup of the board and its reliance on industry funding. You can find a list of current Sustainable Forest Initiative board members here.

The New York Times reported that it could be months before the public learns whether the FTC has opened a formal investigation of the ForestEthics/Greenpeace complaint.

In the meantime, House Bill 628 has passed the House.  On the Senate side, the bill has been referred to the  Agriculture and Environment Committee.