Category Archives: Air

The Federal Budget and North Carolina’s Environment

March 24, 2017.  Last week, the Trump administration released the Trump Budget Blueprint which describes in very general terms the President’s budget proposals for federal agencies.  The Blueprint just opens the debate on the 2018 federal budget.  Congress will significantly influence the final budget and members from both parties have already expressed concern about some of Trump’s proposed budget cuts.   Percentage-wise, the deepest cuts in the Trump Budget Blueprint affect the Environmental Protection Agency.  As background for the coming federal budget debate,  this blogpost looks at the potential impact of the Trump budget plan on key state environmental protection programs.

Based on preliminary reports, the North Carolina Chapter of the Sierra Club provided a guide to the potential impact of the Trump budget the day before actual release of the Budget Blueprint. (Full disclosure — I assisted in preparation of the Sierra Club report.)  For each  major state environmental protection program, the report shows the percentage of the program budget currently funded by federal grants and the impact of cuts identified in the Trump budget plan. The report also provides information on other  DEQ activities supported by  federal grants that may be eliminated under the Trump administration’s  budget plan.

I want to focus on information in the Sierra Club report about impacts to Clean Air Act, Clean Water Act and Safe Drinking Water Act programs in North Carolina.   EPA  has delegated federal permitting and enforcement authority under those laws to the state’s Department of Environmental Quality (DEQ). EPA provides oversight to ensure the state programs meet federal requirements,  but DEQ has responsibility for day to day implementation.  DEQ issues Clean Water Act permits for wastewater discharges; Clean Air Act permits for  air emissions and air pollution control equipment; and Safe Drinking Water Act permits for public water systems.  DEQ also enforces water quality, air quality and drinking water standards.  In return for the state taking on those federal permitting and enforcement responsibilities, EPA provides program implementation or “categorical” grants to partially offset the cost.

The Trump Budget Blueprint does not provide detail on many cuts, but specifically proposes a 45% reduction in the EPA categorical grants that support basic state Clean Water Act, Clean Air Act and Safe Drinking Water Act programs. The tables below put the proposed cut in the context of each delegated program’s budget. Some notes on the numbers:

♦ “Total Need” means the complete budget (from all funding sources) for the delegated Clean Air Act, Clean Water Act and Safe Drinking Water Act program.

♦  Both the “total need” and federal funding numbers come from the certified state budget for the 2016-2017 fiscal year.

♦  These numbers only cover the EPA categorical grants for the delegated federal permitting/enforcement programs.  The numbers do not reflect separate federal grants for targeted research or pollution reduction projects like  the Albemarle-Pamlico National Estuary Program. Some of those federal grants reportedly have been targeted for elimination in Trump administration budget plans.

♦ The proposed federal funding cuts shown below are higher than those show for these same programs in the Sierra Club report because the final Trump Blueprint increased the percentage reduction over those reported earlier.

N.C. Clean Air Act Implementation

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$4,854,105 $2,482,845  50% – 45%

Clean Water Act Program Implementation 

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$14,160,554 $6,662,950   50%  -45%

Safe Drinking Water Act Program Implementation 

Total Need Federal Grant % Federally Funded Proposed Federal Funding Cut
$5,870,612 $3,316,895 50% – 45%

In sum: EPA grants provide 50% of the funding for each of the major environmental permitting and enforcement programs delegated to the state under federal law. A 45% reduction in the federal grant would result in a cut of nearly 25% to each of those state programs.  As discussed in an earlier post, many N.C. environmental protection programs have already experienced significant reductions in state funding since 2009-2010. The water quality program has been particularly hard hit.

Deep cuts to the federal grants would force the state to decide whether to make up the loss of federal funds with increased state appropriations from tax revenue or higher permit fees. The alternative would be to accept further erosion of those programs. The question may be particularly acute for the air quality program which is now entirely supported by the federal grant and permit fees.

You can find the entire Sierra Club report here .

NOTE: The original blog post has been revised to more accurately describe the release date for the Sierra Club guide and to note that information on  percentage reductions to these particular programs changed (for the worse) after release of the Sierra Club report. 

Pigs and The Civil Rights Act of 1964

March 7, 2017.  In one of his earliest actions as North Carolina’s Secretary of Environmental Quality, Michael Regan sent a  letter to the editor publicly responding to a U.S. Environmental Protection Agency (EPA)  “letter of concern” about N.C. swine farms.   EPA sent the letter as part of an ongoing investigation of a  2014 environmental justice complaint against the N.C. Department of Environmental Quality (DEQ)  under Title VI of the Civil Rights Act of 1964. The complaint filed by Earth Justice, the Rural Empowerment Association for Community Help (REACH) and the Waterkeeper Alliance argued that a state permit for swine waste systems discriminates against African-Americans, Latinos and Native Americans by allowing members of those minority communities to be disproportionately harmed by air and water pollution associated with the swine waste.

An attempt at mediation of the complaint failed in 2016. The break down in negotiations led  to a new allegation that DEQ violated federal rules against intimidating a person who has complained of discrimination.   In 2016,  EPA resumed active investigation of both complaints. (See this NC Policy Watch story for a helpful timeline of action on the complaint.) EPA’s January 12, 2017 letter of concern identifies gaps in the state’s environmental justice response and also recommends steps DEQ should take to resolve the complaint.

This is the first of two blog posts looking at the intersection of civil rights law and environmental protection programs. The first blog post will describe the legal basis for  the environmental justice movement and some of the practical challenges of applying civil rights law to environmental permitting decisions.  A later blog post will provide more detail on the Earth Justice/REACH/Waterkeeper Alliance  complaint and EPA’s recommendations.

The Civil Rights Act of 1964 and the environment.  Under Title VI of the Civil Rights Act of 1964, no person “can be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance” based on race, color or national origin. (See 42 U.S.C. § 2000d.)  The anti-discrimination law applies to any state agency receiving federal grant funding, including DEQ programs to implement the Clean Air Act, Clean Water Act, Safe Drinking Water Act and other federal environmental laws.

Federal rules applying the Civil Rights Act to  EPA-funded agencies  (40 CFR Part 7) provide a little more detail, but focus on discrimination in employment, contracting and location of public infrastructure.  Those  nondiscrimination requirements mirror conditions on many other types of federal contracts and grants.  The rules also require state programs to designate a person to receive discrimination complaints and to provide a grievance procedure.

Over time, a movement developed to  give greater meaning to language in the Civil Rights Act  guaranteeing the “benefits” of federally funded environmental protection programs without regard to race, color or national origin. The environmental justice movement grew out of concern that minority communities had been denied the benefits of environmental protection in several ways, including:

♦ Disproportionate siting of facilities associated with environmental risk (such as  hazardous waste facilities)  in minority and low income communities.

♦ Greater exposure of minority residents to high levels of pollution and environmental contamination.

♦ Weak enforcement of environmental standards in minority and low income communities.

Over the last thirty years,  a number of studies have looked at the relationship between race,  income and risk of exposure to environmental harm. The National Institute of Environmental Health Services has published a bibliography of studies related to environmental justice that can be found here .

Environmental permitting as a civil rights issue.    Many histories of the environmental justice movement cite EPA’s permitting of a  hazardous waste landfill in a majority  African-American community in  North Carolina as an early environmental justice flashpoint. See: EPA’s environmental justice timeline and the federal Department of Energy’s brief  history of the environmental justice movement.  The 1982 construction of the Warren County landfill, built for disposal of PCB-contaminated soil,  highlighted a new civil rights question:  Do permit decisions made under racially neutral environmental standards still result in a greater pollution burden on minority and low income communities?   

The political and legal battle over the Warren County landfill raised two interconnected issues common to many environmental justice controversies: 1.  Was the decision to put the PCB landfill  in a community with a largely  minority population (greater than 60% African-American) influenced by race?  The concern was not that state officials had an affirmative intent to harm African-Americans, but that the state rejected more suitable sites to  put the landfill in a community where residents had little political power to resist. 2. Did the U.S. EPA permit for the landfill fail to provide adequate safeguards against environmental harm?

Immediately after construction of the Warren County landfill,  two members of Congress asked the General Accounting Office (GAO) to look at the  first question.  The GAO study of hazardous waste landfills in  eight southeastern states (including North Carolina)  found in part :

There are four offsite hazardous waste landfills in [the] eight States. Blacks make up the majority of the population in three of the four communities where the landfills are located. At least 26 percent of the population in all four communities have income below the poverty level and most of this population is Black..

Early efforts to consider disproportionate impacts to minority communities in environmental permitting.   An Executive Order and Memorandum on Environmental Justice issued by President Clinton in 1994 represents one of the first federal efforts to address environmental justice in permitting.  The goal of the Executive Order and memo, which directly applied only to federal agencies,  was to   “prevent…minority communities and low-income communities from being subject to disproportionately high and adverse environmental effects”. The memo directed federal agencies to:

  1. Include impacts to minority and low income communities as part of  environmental review.  Environmental impact statements prepared  under the National Environmental Policy Act (NEPA) should evaluate the human health, economic and social effects on minority  and low-income communities and require mitigation of significant impacts.
  2.  Reach out to the community.  During the environmental review, the federal agency should consult with the community about potential effects and mitigation measures and make meetings, documents and notices easily accessible.
  3. Consider air quality impacts of federal agency actions on minority and low-income communities.  EPA should  ensure that review of the air quality impacts of a  proposed federal action includes consideration of the  impact on minority and low-income communities. 
  4. Provide access to information.  Federal agencies should provide  minority and low income communities with  access to public information on  human health,  environmental planning, regulatory requirements and enforcement standards. 

In short, the executive order and memo focused on process —  outreach, information, analysis of impacts and mitigation.  It did not change any environmental permitting standards.

What does the Civil Rights Act of 1964 require of federally-funded state environmental permitting programs? EPA has struggled to provide clear guidance to the states on how to apply the Civil Rights Act of 1964 in state environmental permitting programs.  A 2014 EPA plan, Considering Environmental Justice in Permitting , set out a roadmap for considering environmental justice in federal and state permitting. EPA’s implementation plan proposed several years of additional work  with a goal of completing work on the guidance in 2017.

The challenges.  Addressing environmental justice concerns in permitting  has some basic challenges:

♦ Civil rights laws and environmental protection laws speak different languages. Civil rights law focuses on discrimination based on race, color or nationality;  environmental laws and rules set permitting standards based on public health and ecological impacts without regard to community demographics.  An environmental permitting standard may not always be effective, but on its face the standard applies the same way in wealthy subdivisions, poor neighborhoods, and low income communities.

♦ Permitting agencies rarely have the authority to decide where a proposed  facility will be located.  DEQ cannot decide that a swine farm or  landfill or hazardous waste storage facility would best be located here rather than there.  As the permitting agency, DEQ responds to a permit application that proposes a specific type of facility in a particular location. DEQ can deny the permit — but only if the project would violate  environmental standards in state law or rules and those standards do not make community demographics a  permitting criteria. Instead, the standards focus on environmental and public health impacts without regard to the nature of the community likely to be affected.

♦  Race-neutral factors like the availability of suitable land and land cost often drive the permit applicant’s site selection.  Large acreage at low cost often correlates to rural land, low income communities and a greater impact on minority populations.

What permitting programs can do. State environmental permitting programs can use the kind of outreach described in the Clinton memo to actively bring minority residents into the permitting process.  Many state environmental programs now also have permit criteria that include consideration of  the cumulative impacts of proposed and existing facilities  in the community.  That allows the permitting agency to look beyond the individual impact of a proposed facility and prevent environmental harm caused by clustering multiple  pollution sources in a minority or low income community.

Does the Civil Rights Act require more? The environmental justice  complaint about N.C. swine farms and EPA’s letter of concern suggest the state’s obligations may go further. More about that in the next post.

Court Refuses to Stay EPA Rule Reducing Power Plant CO2 Emissions

January 24, 2016.     An earlier post described the basic requirements  of a new federal rule  (the Clean Power Plan) requiring existing  power plants to reduce carbon dioxide (CO2) emissions.   Note: That post described the draft rule out for public comment in  2014; the final  rule approved by the U.S. Environmental Protection Agency in August  2015 differed from the draft rule  in some details — including the specific  state  CO2  reduction targets — but the basic requirements did not change.

North Carolina’s Department of Environmental Quality (formerly DENR)  opposed the rule early on and in October of 2015 joined 23 other states in a lawsuit challenging the final rule.  (More on the McCrory administration’s objections to the EPA rule here.)   Both the states and several business/industry groups  attacking the rule in separate lawsuits  asked the federal court to issue a preliminary injunction  (or “stay”) to prevent EPA from implementing  the Clean Power Plan rule until the lawsuits are resolved.

On January 21, the federal Court of Appeals for the District of Columbia denied all requests to stay implementation of the Clean Power Plan rule. The court’s  order did not discuss the basis for denial in detail; the court simply said the requests failed to meet the high standards for issuance of a preliminary injunction, citing the U.S. Supreme Court decision in  Winter v. Natural Resources Defense Council (2008).  First,  the court must be persuaded that the plaintiff is ultimately likely  to win the case. A court will not give a  plaintiff the immediate advantage of a stay restricting the defendant’s actions if the plaintiff’s arguments are unlikely to win out in the end.  Even if the court finds the plaintiff has a likelihood of winning the case, the court will not issue a stay unless the plaintiff also shows that:

The plaintiff is likely to suffer irreparable harm if the court doesn’t issue a preliminary injunction. In this case, the plaintiffs  had to convince the court that allowing EPA to move ahead with implementation of the Clean Power Plan rule  would cause immediate harm to the plaintiffs and that  harm could not be remedied by a later ruling in the plaintiffs’ favor.

The balance of equities tips in the plaintiff’s favor.  In very simplified terms,  the plaintiffs had to show that a stay would do more good than harm.

An injunction is in the public interest.  The public interest standard can work in favor of either the plaintiff or the defendant depending on the case. In the Winter v. Natural Resources Defense Council case, the U.S. Supreme Court decided that a preliminary injunction was not in the public interest because it would have restricted a particular type of military training exercise.

Since the Court of Appeals for the D.C. Circuit did not provide specific reasons for refusing to stay the Clean Power Plan rule,  it is impossible to know exactly which of those standards the plaintiffs failed to meet.  The decision doesn’t necessarily mean the court thinks the state and business/industry plaintiffs have a weak case against the rule; failure to meet the other criteria could also lead to denial of a stay.  It is probably safe to say, however,  that the court did not believe the states or the business/industry plaintiffs  will  be harmed by allowing the Clean Power Plan rule to go into effect.

In asking for a stay, the states  identified two kinds of harm —  waste of state resources to comply with a federal rule that may be struck down by the courts and a much more nebulous harm to state sovereignty.  On the question of potentially wasted state resources, EPA pointed out: 1. the federal rule gives states until 2018  to develop a state plan to meet the CO2 reduction targets;  and  2. a state can also simply opt out and let EPA develop a CO2 reduction plan for its electric utilities.  The first actual CO2 reduction target comes several years after approval of  the state plans. The court seemed persuaded that the long planning and implementation timeline means states will not have to sink major, unrecoverable costs into Clean Power Plan compliance before the lawsuits are resolved.

It is hard to know what the court made of the somewhat novel argument that immediate implementation of the Clean Power Plan rule  would irreparably harm state sovereignty.  EPA pointed out that the Clean Power Plan rule gives states a lot of flexibility in developing plans to meet the  CO2 emissions reduction targets.  It is also difficult to argue the Clean Power Plan rule attacks state sovereignty without going to the next — much more radical step — of arguing that the federal government has no authority to regulate to protect air quality in the first place.   In any case, if the federal court strikes down the Clean Power Plan rule as either unconstitutional or beyond EPA’s statutory authority that would seem to adequately  remedy any hypothetical harm to  state sovereignty.

The Court of Appeals agreed to expedite the Clean Power Plan lawsuits and set the case for hearing on June 2, 2016.

Practical effects — States will continue to face a 2018 deadline for submission of  CO2 reduction plans. In one way, the impact on  N.C.  will be minimal  because the state  is  already on a fast track to submit a  plan to EPA in  2016.  The catch, however, is that the plan proposed by N.C.’s Department of Environmental Quality relies entirely on tighter emissions limits for a small set of existing coal-fired power plants and will only result in a fraction of the CO2 reductions the federal rule requires.  See another post  for background on the McCrory administration’s intent to submit a plan that does not take  credit for CO2 reductions associated with  increased renewable energy generation and energy efficiency improvements already required under  state law.  The shortfall in CO2 reductions in the plan being prepared by DEQ will almost certainly result in EPA disapproval.  Given the federal court’s denial of a stay, N.C.’s decision to deliberately fast track an unapprovable plan may mean  the state will have to revisit the plan sooner rather than later.

Challenging Environmental Permits

November 17, 2015.  The  U.S. Environmental Protection Agency (EPA) recently warned the  North Carolina Department of Environmental Quality (DEQ) about the possible consequences of inappropriately restricting  citizen appeals of  Clean Water Act (CWA)  and Clean Air Act (CAA) permits.  For news reports  on EPA’s  letter to DEQ Secretary Donald van der Vaart see the N.C. Coastal Review here and the Raleigh News & Observer here. The EPA letter of October 30, 2015 expressed concern about  two recent  cases in which an administrative law judge  ruled in favor of DEQ without conducting a full hearing on the permit appeal.  In each case, the judge  concluded that conservation organizations challenging a state-issued permit failed to show the permit decision “substantially prejudiced” their rights — a threshold requirement under state law.  EPA believes the decisions conflict with federal laws and rules that guarantee the right of citizens to appeal Clean Water Act and the Clean Air Act permits.  EPA noted that the conflict could jeopardize North Carolina’s delegated authority to issue federal water quality and air quality permits. This post will focus on the permitting programs involved in the cases that caught EPA’s attention   —  Clean Air Act operating permits for  large air pollutant sources  (Title V permits) and Clean Water Act wastewater discharge  permits  (National Pollutant Discharge Elimination System or “NPDES” permits).

Delegation of Clean Air Act and Clean Water Act permitting.  EPA has authority to issue both Title V permits and NPDES permits, but Congress also allowed EPA to  delegate permitting authority to a state with an approved permitting program.  All 50 states have approved Title V permitting programs; 46 of the 50 states have approved NPDES permitting programs. N.C. has long had delegated permitting authority  for  both programs. Delegation gives the state some flexibility in program implementation and allows permit applicants to  interact with state rather than federal staff on permitting and enforcement issues.

Requirements for approval of a delegated program.  The  CAA, CWA  and rules adopted by EPA set  standards for state program approval.  Basically, the standards require a state program to include requirements and protections consistent with  federal law.  After initial approval, the state must continue to meet those standards; otherwise,  EPA can withdraw program approval and take over permitting in the state.  EPA’s October 30, 2015 letter concerned the requirement for state programs to provide opportunity for judicial review of permit decisions.

The federal rule on NPDES program approval, 40 CFR 123.30,  requires the state to provide an opportunity for judicial review of final permit decisions comparable to review available in federal court for a federal  NPDES permit decision. The rule goes on to say:

A State will not meet this standard if it narrowly restricts the class of persons who may challenge the approval or denial of permits (for example, if only the permittee can obtain judicial review, if persons must demonstrate injury to a pecuniary interest in order to obtain judicial review, or if persons must have a property interest in close proximity to a discharge or surface waters in order to obtain judicial review.)

A similar requirement applies to Title V permitting programs delegated to states under the Clean Air Act.  Under  40 CFR 70.4 (b)(3)(x),  a state Title V program must:

Provide an opportunity for judicial review in State court of the final permit action by the applicant, any person who participated in the public participation process provided pursuant to § 70.7(h) of this part, and any other person who could obtain judicial review of such actions under State laws.

Note that “any person who participated in the public participation process”  could mean literally  anyone who commented during the public notice and comment period before issuance of the permit.

The North Carolina cases that attracted EPA’s attention. The EPA letter mentioned two recent N.C. permit appeals —

♦   N.C. Coastal Federation, et al v. N.C. DENR, Division of Air Quality and Carolinas Cement Company LLC (appeal of the air quality permit issued to Carolinas Cement Company for a cement plant near Wilmington known as the Titan plant). In a series of three  appeals,  four conservation organizations challenged the initial air quality permit for the  Titan plant issued in 2012 and two sets of permit modifications approved in 2013.  State law allows any “person aggrieved” by a permit decision to file a petition for a hearing; the petition for hearing must include “facts tending to establish that the agency …. has deprived the petitioner of property, has ordered the petitioner to pay a fine or civil penalty, or has otherwise substantially prejudiced the petitioner’s rights”. (G.S. 150B-23). In effect, the law requires a petitioner to identify some harm.

The petitions for hearing noted that members of the four conservation organizations live, work, boat and fish  in the area  around  the Titan plant site and argued that air emissions and mercury deposition from the plant would affect their quality of life, health and recreational activities.  In each of the three cases, the administrative law judge agreed the petitioners were “persons aggrieved” by the permit decision but nevertheless ruled that petitioners failed to show the permit decision substantially prejudiced their rights.  The most recent  decision also concluded that the two earlier administrative decisions settled the question of petitioners’ failure to show substantial prejudice so the issue would not be reconsidered in the context of the last permit modification. The decision has been appealed to the N.C. Court of Appeals.

♦ Pamlico-Tar River Foundation and N.C. Coastal Federation v. N.C. DENR, Division of Water Resources and Martin Marietta Materials Inc. (appeal of an NPDES permit to discharge wastewater from a Martin Marietta quarry to Blounts Creek).   The two organizations appealing the permit submitted affidavits that the wastewater discharge would interfere with  members’ use and enjoyment of the waters of Blounts Creek for fishing and  recreation; hamper education and environmental restoration efforts undertaken by the organizations; and affect the economic interests of two organization members operating water-related businesses on Blount’s Creek.  The administrative law judge’s decision dismissed the permit appeal on the grounds that the petitioners were not “persons aggrieved” by the permit decision and had failed to show substantial prejudice to their rights. A Beaufort County superior court judge overruled this decision and sent the permit appeal back to the administrative law judge.

EPA clearly believes the restrictive decisions on standing in these cases conflict with the very broad right to judicial review of permitting decisions under the Clean Water Act and Clean Air Act.  A DEQ  statement in response to media questions about the October 30 letter characterized the EPA concerns as a misunderstanding of state law. In each case, the judges’ rulings had come at the request of DEQ.

The North Carolina Response to EPA’s Clean Power Plan Rule

July 26, 2015.  In one way, the proposed  U.S. Environmental Protection Agency (EPA) rule to limit carbon dioxide (CO2) emissions from power plants  — expected to be final in August — looks like a typical air quality rule. The Clean Power Plan rule sets state by state reduction goals for a pollutant (CO2) from a particular set of of sources (electric generating facilities).  But the rule takes an unusual and  innovative approach to meeting those goals. The rule identifies  four components  (or “building blocks” in EPA rule-speak ) of a plan to reduce CO2 emissions associated with power generation : 1. reducing power plant CO2 emissions (the traditional Clean Air Act approach); 2. energy efficiency measures; 3. increased  electric generation from renewable energy sources;  and 4. transition of electric generation facilities from coal to natural gas.   In effect, the rule aims to lower CO2 emissions per kilowatt hour used and allows the  states to take credit for CO2 emissions avoided through increased energy efficiency and by shifting electric generation to energy sources with low or no CO2 emissions.

The proposed EPA rule requires each state to submit a plan for meeting its CO2 reduction target by June 30, 2016. The state plan can rely on any or all of the four “building blocks” in the EPA rule; it can also include measures that fall outside those categories as long as the plan achieves the CO2 reduction target for regulated electric generation facilities. If a state fails to develop a plan, EPA can create a federal plan for the state.  An earlier post  provides more detail on the  proposed federal rule.

The McCrory administration has opposed the Clean Power Plan rule in  written comments and in testimony before Congressional committees. In part,  the administration has argued that the Clean Air Act does not authorize EPA to issue  a rule that relies on measures — such as energy efficiency and increased reliance on renewable energy — that go beyond limiting  pollutant emissions from regulated power plants.  Last week,  the practical implications of  that   position became more clear when DENR  Secretary Donald van der Vaart  told a Senate committee that  the McCrory administration intends to resist the flexibility offered under the federal rule and submit a CO2 reduction plan  based entirely on requiring additional CO2 emission reductions at  power plants.

The Secretary’s comments came  as a state Senate committee debated House Bill 571, which requires DENR to develop  a state CO2 reduction plan with the participation of the public and the electric utilities. DENR did not support House Bill 571, but the bill passed the House with a bipartisan majority and the support of  the state’s major electric utilities and environmental organizations. Last Wednesday, the  Senate Agriculture and Environment Committee took up a substitute draft of  H 571 that would prohibit DENR from taking any action or expending any state resources on development of a CO2 reduction plan until all legal challenges to the federal rule had been resolved or until July 1, 2016 (whichever came later).  Asked to comment on the proposed substitute bill,   Secretary van der Vaart  indicated that DENR  would prefer to submit a CO2 reduction plan by June 30, 2016 as required under the federal rule — but a plan based entirely on reducing  power plant emissions.

Based on the Secretary’s statement, the McCrory administration response to the Clean Power Plan rule puts the state in a strange place:

♦  DENR has argued for an interpretation of  the Clean Air Act that would force the federal rule to be more rigid and offer the state less flexibility to meet CO2 reduction targets.   (A number of environmental law experts disagree with this narrow interpretation of EPA authority; the issue will likely have to be settled in court.)

♦  Based on this narrow interpretation of EPA authority, DENR intends to develop a state CO2 reduction plan that relies entirely on further reducing  CO2 emissions from power plants even though existing  state policies have North Carolina on a path to achieve much (if not all)  of the necessary reductions through increased renewable energy generation, greater energy efficiency, and  transition of power plants from coal to natural gas.  Although DENR has not provided an analysis of the state’s ability to meet the state’s CO2 reduction target based on those existing policies, others have. You can find one (an analysis by the Natural Resources Defense Council)  here.

♦  Relying  entirely on lowering power plant emissions could  make meeting the CO2 reduction target more difficult and more costly for electric utilities and consumers. Again, DENR has not provided a comparative analysis of the cost of relying entirely on power plant pollution controls versus  a comprehensive CO2 plan that takes credit for energy efficiency measures, renewable energy generation and transitioning power plants from coal to natural gas.

Most states have started planning to meet the  CO2 reduction targets. Even in coal-producing states where political opposition to the EPA rule tends to be highest,  state air quality agencies have begun sketching out CO2 reduction scenarios in case the rule survives the expected legal challenges. Only one state — Oklahoma — has prohibited its environmental agency from developing a plan. A recent Washington Post story  reported that even coal-dominated states like Kentucky seem confident of meeting the  CO2 reduction target thanks in part to recent investments in renewable energy generation. It isn’t clear that any state other than North Carolina has decided to develop a plan based solely on CO2 reductions at coal-fired power plants.

Which leaves something of a public policy mystery. A state with significant advantages in renewable energy, energy efficiency and already on the road to transitioning power plants from coal to natural gas seems to have settled on a policy that throws those advantages away. Instead of working with electric utilities, consumers and environmental organizations to develop the most cost-effective  CO2 reduction plan for the state, DENR intends  to unilaterally develop a plan based entirely on reducing power plant emissions.  It isn’t clear why or what that policy choice could cost the state.

Note: The Senate committee approved the substitute draft of House Bill 571 on Wednesday, but offered to continue talking to DENR about the content of the bill. The bill was pulled off the Senate calendar last Thursday; when the bill  reappears on the Senate calendar, there may be amendments as a result of the ongoing discussions.

Update: The original post has been revised to make it clear that state CO2 reduction plans can also rely on measures other than those covered by the  four “building blocks” identified in the EPA rule.

Regulatory Reform 2015: A New NC Senate Proposal

July 13, 2015. Before leaving for the Fourth of July holiday, the N.C. Senate turned a minor House bill into a vehicle for major changes to environmental rules.  The Senate had already proposed changes to environmental standards in a regulatory reform bill (Senate Bill 453) that has not yet passed the Senate; in individual Senate environmental bills; and in the Senate budget bill.  The House has not yet voted on many of the earlier Senate proposals. The Senate version of House Bill 765  may be the most aggressive regulatory reform legislation to date —  putting constraints on air quality rules; creating new immunity from environmental enforcement actions; reducing air quality monitoring; changing laws on remediation of contaminated property; and  proposing outright repeal of the state’s electronics recycling law. In response to DENR concerns, the Senate delayed some proposed changes to stormwater and environmental permitting requirements to allow for study.  Reportedly, the floor amendments adopted by the Senate eliminated DENR objections to the remainder of the bill which continues to have far-reaching implications for state environmental policy:

Sec. 1.4 allows a state agency to automatically recover attorneys fees from a person who unsuccessfully challenges a state action on environmental grounds. A citizen or organization challenging a state construction project or an environmental permitting decision could be at significant financial risk —  a risk that would not be shared by citizens challenging state actions for other reasons.

Sec. 4.2 repeals the state law requiring computer and television manufacturers  to pay fees that support local electronics recycling programs. It isn’t clear that all of the city and county electronics recycling programs could survive the loss of state recycling fee revenue. State law would continue to prohibit disposal of discarded televisions and computers in landfills; the question is whether there would continue to be electronics recycling programs in all 100 counties.

Sec. 4.7 makes changes to state laws allowing risk-based remediation of environmental contamination. A risk-based remediation allows the person responsible for the contamination (the “responsible party”) to do a partial cleanup of  groundwater and soil contamination by relying on land-use controls to limit future exposure to contaminated soils or groundwater remaining on the site.  The biggest changes:

1. Sites where contamination has already migrated onto adjacent properties would become eligible for a risk-based cleanup.  Existing law  does not allow a risk-based cleanup if contamination has migrated off the property where it originated  because of the additional complication of managing exposure on property the responsible party does not control. The Senate provision allows a  responsible party  to do a risk-based cleanup on adjacent property with the property owner’s permission. The provision does not require land use controls on the adjacent property to prevent future exposure to remaining contamination — normally a necessary condition of a risk-based cleanup. Existing remediation standards may allow DENR to disapprove a risk-based cleanup unless the entire area has appropriate land use controls, but the new Senate provision on risk-based cleanup of adjacent property is silent on the issue.

2. The bill removes existing statute language that limits risk-based remediation to contaminated sites reported to DENR  before the risk-based remediation law went into effect in 2011, allowing   lower-cost, risk-based remediation as an alternative for future pollution events.

Sec. 4.9 changes a state law providing incentives for redevelopment of contaminated property (or “brownfields”).  The state Brownfields Redevelopment Act uses the term “prospective developer” to describe a person eligible for liability protection and economic incentives under the law.  The term excludes anyone who caused or contributed to the contamination. The Senate proposes to redefine the term to cover a  “bona fide prospective purchaser”, a “contiguous landowner” and an “innocent landowner” as defined in the federal Small Business Liability Relief and Brownfields Redevelopment Act (amending the Comprehensive Environmental Response, Compensation and Liability Act or “CERCLA”). In CERCLA, the terms describe categories of landowners who have acquired  property contaminated by hazardous substances, but have no legal liability for the contamination. Generally, the definitions cover landowners who acquired the property after the contamination occurred and have no relationship to a person (or company) responsible for the contamination.

All of the federal definitions referenced in the Senate provision concern liability for “hazardous substance” contamination as defined in CERCLA. CERCLA defines “hazardous substance” to include a specific list of compounds and unlisted substances with similar characteristics.  The definition also excludes some substances  — most notably petroleum and natural gas products — with similar health and environmental risk. (Other federal laws address contamination caused by petroleum spills and leaks.)

In  redefining  “prospective developer” based on CERCLA terms, the Senate provision also eliminates language in the existing definition that excludes a person who caused or contributed to contamination on the site. The question is whether those changes, in combination,  could give a property owner responsible for contamination unrelated to a CERCLA  “hazardous substance”   liability protection and other benefits under the state Brownfields law. That result would be inconsistent with the original intent of the Brownfields Redevelopment Act and undermine the state’s ability to require cleanup of environmental contamination.

Sec. 4.14  would allow private engineers to self-permit onsite wastewater systems (such as septic systems), eliminating the need for a local health department permit.  (The provision does not affect wastewater systems that discharge to the land surface or to rivers, lakes and streams; those systems require permits from DENR.)  The property owner’s engineer would have to give the local health department a notice of intent to construct the wastewater system and a final post-construction report, but the engineer would be completely responsible for design and installation.  The provision also allows the engineer to use wastewater system technology that has not been approved by the State “at the engineer’s discretion”.

In place of health department enforcement of on-site wastewater standards, the bill puts the burden on the property owner to sue the engineer or soil scientist if the wastewater system fails.  The risk to the property owner is that problems may develop several years after installation, leading to an expensive fight over the  cause of the failure  — bad engineering; inappropriate siting; improper installation; or lack of maintenance. Treating a failed wastewater system as a problem strictly between the engineer or soil scientist and property owner also overlooks the possible impact on other property owners and the public.  A septic system located too close to a water supply well may contaminate the well; a failing wastewater system can contribute pollutants to already stressed streams and lakes. Although the bill requires the engineer to give notice of the proposed construction to the local health department,  it isn’t clear that the provision allows the health department to prevent installation of an engineer-approved system however poorly designed or improperly sited.

Sec.4.15 changes state review of applications for innovative or experimental onsite wastewater systems. For the most part,  the bill  seems to replace state approval of experimental waste treatment systems with reliance on national certification of the technology.

Sec. 4.18 reduces  state protection of isolated wetlands by limiting the application of state water quality permitting rules  to basin wetlands and bogs — excluding other isolated wetlands from environmental protection. DENR has identified seven other categories of isolated wetlands: Coastal Isolated Wetlands, Seep, Hardwood Flat, Non-Riverine Swamp Forest, Pocosin, Pine Savanna, and Pine Flats.  Note: “isolated wetlands” are wetlands that do not have any connection to surface waters that fall under federal Clean Water Act jurisdiction.

Sec. 4.19 allows more development to be considered “low density” under coastal stormwater rules, raising the low density limit from 12% built-upon area to 24% built-upon area. The significance of the change is that low density projects do not require engineered stormwater controls. The bill also eliminates one trigger for compliance with coastal stormwater rules — the addition of 10,000 square feet or more of built-upon area as part of a non-residential development.  The Senate provision would trigger coastal stormwater standards for both residential and non-residential projects based on the need for a sedimentation plan (required for disturbance of one acre or more) or a Coastal Area Management Act permit. Before adoption, the Senate amended the effective date for Sec. 4.19 in response to DENR concerns about the coastal stormwater changes. The provision would go into effect on July 1 2016 to allow for study in the interim.

Sec. 4.24 requires repeal of the state’s heavy duty vehicle idling rules. The rule, 15A NCAC 2D.1010, limits excessive idling of heavy duty vehicles as another way to reduce the impact of vehicle emissions on air quality.

Sec. 4.25 requires the state Division of Air Quality to remove air quality monitors that are not specifically required by the U.S. Environmental Protection Agency. The provision would significantly reduce the number of air quality monitors used to assess air quality and demonstrate compliance with federal ambient air quality standards.

Sec. 4.30 deals with mitigation of stream impacts  permitted under Sec. 404 of the Clean Water Act. Under Sec. 404,  many projects involving deposition of fill material in surface waters  require a federal permit. In most states,  the U.S. Army Corps of Engineers issues the 404 permits. The Clean Water Act requires an applicant for a  404 permit to provide the Corps with a certification (under Sec. 401 of the Act) that the project will be consistent with state water quality standards.  The Senate provision affects state issuance of the 401 Certification in two ways. First, it prevents DENR from using the 401 Certification to put stream mitigation conditions on a project impacting less than 300 feet of stream without making specific findings — even if the mitigation requirement simply matches mitigation required under the federal 404 permit. The provision also limits state requirements for stream mitigation to a 1:1 ratio of stream impact to mitigation provided; in some cases, that will result in less mitigation than the Corps will require for the 404 permit. Since the permit applicant will have to meet federal mitigation conditions in any case, the reason for these new restrictions on parallel state mitigation conditions isn’t clear.

Sec. 4.31 completely eliminates state mitigation requirements for isolated streams (that is, streams that fall outside federal Clean Water Act permitting jurisdiction).

Sec. 4.37 makes changes to riparian buffer rules. The provision requires the buffer on an intermittent stream to be measured from the center of the stream rather than normal high water level. The most significant change allows unlimited development in a riparian buffer as long as the project complies with state stormwater requirements. The change appears as an amendment to a stormwater statute and does not directly refer to riparian buffer rules adopted by the Environmental Management Commission. Other bills that propose changes to riparian buffer requirements specifically list the rules affected — such as the Neuse River and Jordan Lake rules.  Since this provision makes no reference to the riparian buffer rules, it may be intended to apply only to buffers required under the state’s minimum stormwater standards and local stormwater ordinances. It isn’t clear.

The bill also includes several provisions that appeared earlier in other Senate bills. Sec. 4.1 makes another run at putting environmental audit/self-disclosure immunity into state law. The Senate had included those same provisions in Senate Bill 453; see an earlier  post for more detail. Sec. 4.3 and Sec. 4.4 repeat limitations on state adoption and enforcement of federal air quality standards already approved by the Senate in Senate Bill 303; see previous posts  here and here.

The extensive Senate changes to House Bill 765 mean the bill now goes back to the House for a vote on concurrence. If the House refuses to accept all of the Senate changes, the bill goes to a conference committee. The General Assembly will be back in session this week, but it isn’t clear what priority the House will give H 765.

Should N.C. Stop Enforcing Federal Air Quality Standards?

April 25, 2015. Since an earlier post briefly described Senate Bill 303 (Protect Safety/Wellbeing of N.C. Citizens), the bill has passéd the Senate in a form that could  put the state’s delegated Clean Air Act permitting and enforcement programs at risk. The bill  passed by the Senate:

♦  Requires a 3/5 vote to of the Environmental Management Commission (EMC) to adopt state rules consistent with federal New Source Performance Standards (NSPS); these  Clean Air Act standards apply to large, stationary sources of air pollutants such as power plants.

♦ Requires a 3/5 vote of the EMC  to adopt new federal hazardous air pollutant (HAP) standards as state rules. The hazardous air pollutant standards regulate emissions of  toxic air pollutants such as mercury and arsenic.

♦ Requires legislative review and approval of all state rules adopting federal air pollution standards.

♦ Prevents the state Division of Air Quality from enforcing existing NSPS and hazardous air pollutant standards after January 1, 2016 unless the EMC has readopted all of those standards under the new requirements for a 3/5 vote of approval and legislative review.

A story  by Gabe Rivin  in N.C. Health News reports that the Department of Environment and Natural Resources  (DENR) supports the bill and  quotes DENR Assistant Secretary Tom Reeder describing the bill as benign. According to the story,  a DENR spokesperson did express concern about the provision that could end state enforcement of existing federal air quality standards on January 1, 2016. (That provision was added to the bill in a floor amendment.)

Failure to adopt and enforce federal Clean Air Act standards could have  serious implications for the state’s delegated Clean Air Act permitting and enforcement authority.   North Carolina  currently has full delegation of authority from the U.S. Environmental Protection Agency (EPA) for Clean Air Act programs.  (All 50 states have taken on full or partial delegation under the Clean Air Act.)  Failure  to adopt a new federal standard may have a greater or lesser impact on the state’s delegated authority depending on the type of rule.  An end to all state enforcement of federal NSPS and hazardous air pollutant standards would presumably require EPA to withdraw the state’s delegated authority entirely.

Whatever the impact of Senate Bill 303 on state rulemaking, federal air quality standards will continue to apply to sources in North Carolina.   If the state refuses to enforce a federal standard, EPA will step in and do it.  Senate Bill 303 cannot free N.C. industries and utilities from compliance with federal air quality standards. On the other hand,  loss of state delegation under the Clean Air Act may disadvantage those industries and utilities in two ways: 1. permitting and enforcement matters would have to be resolved with EPA rather than a state agency;  and 2.  regulated sources may lose the benefit of  flexibility in permitting and enforcement allowed to states implementing federal requirements through a delegated program.

It isn’t clear who  Senate Bill 303 would  benefit. Assistant Secretary Reeder’s comments suggest the bill could help the department avoid new, burdensome Clean Air Act responsibilities. But the one example offered  —  a new NSPS standard for wood heaters — is entirely enforced by EPA through third-party certification of  manufacturers.  (Find EPA information on enforcement of the wood heater standard here.) Since EPA does not delegate enforcement of the wood heater rule to the states, there is no real danger the state would  be required to visit homes to inspect wood heaters.

The state already has the ability to decline new federal rule delegations and to give up existing delegations under the Clean Air Act.  It seems the kind of decision best made deliberately and after a clear-eyed assessment of the  consequences  — not as a side-effect of failure to adopt a rule by a supermajority.

Update: The original post has been updated to add a link to the EPA webpage on enforcement of the wood heater standard.

Correction: The post has been updated to correctly identify the publication in which Gabe Rivin’s story appeared — N.C. Health News.

N.C. General Assembly: 2015 Environmental Bills

April 15, 2015.   The final bill introduction deadline  fell  yesterday for bills that don’t affect finance or appropriations,  so it is a good time  to look at the environmental bills  introduced and awaiting action. The General Assembly can also amend environmental laws  in the budget bill or by completely rewriting a bill on an entirely different subject, but with that warning in mind:

House Bill 795 SEPA Reform  would  greatly  limit the number of  projects requiring an  environmental impact statement (EIS) under the state’s Environmental Policy Act (SEPA).   Adopted in 1971, SEPA requires an  EIS  for projects that potentially have a significant environmental impact, need a state approval (such as a permit), and involve either the use of public funds or use of public lands.  Unlike its federal counterpart (the National Environmental Policy Act  or “NEPA”), the state law  has never applied to  privately funded development projects no matter how significant the environmental impact. To require an EIS under the state law, there must be public investment ( which could mean either state or local government funding) or use of public land.  Typical projects requiring an EIS in the past would be  a new wastewater treatment plant; a county landfill; a major development project on state-owned submerged lands; or activities on state parkland.

House Bill 795 proposes to  limit SEPA review  to projects involving $20 million or more in public funding or land-disturbing activity affecting 20 acres or more of public land.   It is difficult to know what percentage of projects required to do an EIS in the past would avoid  SEPA review under the amended law, but it is reasonable to assume that many public  projects fall below the $20 million threshold. Controversial proposals for use of state parks and tidelands could also avoid SEPA review because — whatever the other impacts of the project —  an EIS would only be required for land-disturbing activity that permanently alters the landscape and affects 20 acres or more. For projects that exceed the new size and funding thresholds, House Bill 795 provides additional  SEPA exemptions  for projects receiving  certain types of state approvals. Some of the approvals listed in the bill, such as a certificate of convenience and necessity for a  public utility infrastructure project,  do not  involve  any environmental review.  (That particular exemption also doesn’t seem to serve a purpose;   the “public utilities” that need a certificate of convenience and necessity are by definition not owned or operated by a governmental  entity and  don’t involve public funds.)

For projects that would still require an EIS under the amended law, the bill also limits the scope of the EIS.  Under the bill,  the EIS would only describe direct project impacts — eliminating consideration of indirect and cumulative impacts.

Projects  exempted from the EIS requirement would still need  any necessary environmental permits, but permit reviews tend to be more narrow than an EIS. The EIS looks beyond one set of permitting standards to evaluate the environmental impacts of the project as a whole — which can include consideration of noise, traffic, endangered species, historic sites, and effects on minority and low income communities as well as natural resource impacts. Projects that require a federal permit could still trigger NEPA review; what the state may lose is an opportunity for the same comprehensive review and public input on projects that do not require a federal permit —  which may include some landfill projects and inter-basin transfers.

THE OMNIBUS BILLS (AMEND ENVIRONMENTAL LAWS AND REGULATORY REFORM)

In every recent legislative session, the General Assembly has enacted an Amend Environmental Laws bill  and a Regulatory Reform bill. Both bills become vehicles  for multiple changes to environmental laws. See an earlier post for a description of Senate Bill 453, the Regulatory Reform Act of 2015.

At the moment, House Bill 593 (Amend Environmental Laws-2) only  contains provisions amending  state law on reimbursement of third-party damage claims by the state’s petroleum underground storage tank (UST)  trust funds.  (The UST trust funds can reimburse UST owners for up to $1,000,000 in third-party claims for property damage or personal injury resulting from a petroleum release.)  The amendments require the UST owner to provide specific documentation of the third party damage claim; add definitions of “third party”, “bodily injury” and “property damage”;  and provide more  direction on how to calculate  compensation for  property damage.

It is the  nature of  both the Regulatory Reform and Amend Environmental Laws bill to pick up baggage as the session goes along.  Expect new versions of each bill  as the bills move through committee.

Note: This bill is Amend Environmental Laws-2 because  House Bill 157 (Amend Environmental Laws) has already been enacted into law as Session Law 2015-1. H 157 generally made uncontroversial and technical changes to solid waste laws, the Coal Ash Management Act and other environmental laws. The one provision in H 157 that  created some controversy amended a state law requiring the Environmental Management Commission to adopt air toxics rules for hydraulic fracturing sites.The bill replaced the requirement with language authorizing the EMC to adopt  air toxics  standards for fracking sites  if necessary to protect public health, safety, welfare and the environment.

AIR QUALITY

Senate Bill 303  Protect Safety/Wellbeing of N.C. Citizens  prohibits state enforcement of any federal standards for wood heaters used for home heating.  The bill  is interesting as an example of  state legislation intended to nullify  a federal standard.  In February, EPA adopted updated performance standards for wood heaters. Federal air quality rules have included standards for wood heaters since 1988; the new rule updates the standards to reflect changes in technology and to  regulate  wood-burning boilers and wood-burning furnaces as well as wood stoves.   The  revised  standards only apply to newly manufactured wood heaters, phase in over several years and do not affect fireplaces (at all) or wood heaters already in use.  An EPA fact sheet provides an overview of the rule.  Generally, N.C.’s delegated authority to implement Clean Air Act programs  requires the state  to adopt and enforce federal new source performance standards, but EPA has not delegated enforcement of the wood heater rule to the states.

House Bill 169  Limit Motor Vehicle Inspections  eliminates motor vehicle emissions inspections in six counties  (Burke, Granville, Haywood, Rutherford, Surry and Wilkes). Forty-eight of N.C.’s 100 counties require annual emissions inspections as part of the state’s plan to meet the  federal ozone standard under the Clean Air Act. Recently, the Department of Environment and Natural Resources (DENR) issued a  report concluding that emissions inspections could be eliminated in as many as 28-31 counties without  violating either the current ozone standard or the stricter ozone standard EPA  will  finalize by the end of the year. Given the DENR report, expect the number of counties  the bill removes from the emission inspection program to increase.  Since the emissions inspection program has been used to meet a federal air quality standard, any change by the General Assembly must have EPA approval.

House Bill 172 Fracking – Protecting the Public requires the Environmental Management Commission to adopt rules establishing best management practices and  leak detection and repair standards to  minimize air emissions from natural gas operations. The bill approaches the related problems of wasted natural gas and  air pollution by focusing on  ways  to minimize unintended releases resulting from leaky equipment or inefficient practices during exploration, development, production, processing and compression of the natural gas.

House Bill 571 Implementation of Carbon Dioxide Regulations requires DENR  to begin work on a plan to comply with new federal regulations reducing carbon dioxide (CO2) emissions from power plants. EPA’s Clean Power Plan rule sets a CO2 reduction goal for each state, but states have flexibility in the mix of power plant emission reductions, renewable energy generation, and energy efficiency measures used to meet the goal.  Find  more background on the federal rule here. Each state  must  submit a plan for meeting its   CO2 reduction goal by June 2016, although EPA can extend the deadline if the plan needs legislative approval or relies on a multi-state strategy.  DENR does not appear to have any effort underway to develop a plan. Instead, DENR has both  questioned the legal basis for the federal rule and urged EPA to delay implementation until lawsuits  challenging the rule  have been resolved. House Bill 571 appears to be intended to push DENR to begin  work  on a CO2 reduction plan and do it in a way that provides for  input from both stakeholders and the public.

COAL ASH

House Bill 448 Extend Coal Ash Structural Fill Moratorium  The Coal Ash Management Act of 2014 put new, stricter standards in place for large projects using coal ash as structural fill .  ( “Large” means > 8,000 tons per acre or > 80,000 tons total).   But the law made few change to existing standards for smaller structural fill projects. Instead, the 2014 bill put a moratorium on permitting smaller structural fill projects  until August 1, 2015 to allow time for DENR and the Environmental Management Commission to study the standards for those projects.  The law required a report back  to the General Assembly by January 15, 2015.  The EMC discussed an interim report in  January,  but the interim  report didn’t address the adequacy of existing structural fill standards for small projects. The interim report indicated that a final report would be released in April; it doesn’t appear that a final report has been issued yet.  In the absence of a report on the adequacy of the existing structural fill standards and recommendations, House Bill 448 would extend the moratorium on permitting smaller projects until August 1, 2016.

COASTAL ISSUES

House Bill 151 Property Insurance Ratemaking Reform is not strictly speaking an environmental bill, but deals with use of models projecting catastrophic losses as a result of a hurricane or other natural disaster in setting property insurance rates. The bill would continue to allow use of models, but would require the results of more than one model to support a property insurance rate change.  The bill is interesting given the longstanding tension between the economic benefits of coastal development and the externalized costs of building in natural hazard areas.

House Bill 302 Strengthen Oyster Industry  requires the Division of Marine Fisheries to study the state’s shellfish lease and franchise programs and make recommendations for changes necessary to increase shellfish  aquaculture on the North Carolina coast. The bill also expands on existing law requiring DMF to plan and construct  oyster sanctuaries in the  Albemarle and Pamlico Sounds; sets new civil penalties for interference with oyster cultivation; and makes other changes designed to increase oyster production. State funding for creation of oyster habitat has seen a steep decline in recent years; some additional resources will likely be needed to make the oyster sanctuary program a reality.

House Bill 346 Counties/Public Trust Areas extends to counties the  authority to enforce local ordinances in public trust areas and particularly on the state’s ocean beaches.  Municipalities already have this authority.

CONTAMINATED SITES

Senate Bill 301 DOT/Purchase of Contaminated Land would exempt the N.C. Department of Transportation from a law enacted in 2013 that  effectively prohibited state agencies from purchasing property with environmental contamination.  As noted in a earlier post about the 2013 law,  the General Assembly may not have realized the far-reaching effects.   Environmental contamination is widespread and state policies allowing polluters to do limited, “risk-based” remediation of groundwater contamination mean the contamination will persist well into the future. The 2013 law exempted the UNC system campuses from the restriction; NCDOT has asked for the same exemption — presumably because the law makes acquisition of property for highway construction more difficult.

INFRASTRUCTURE

Senate Bill 397 Open and Fair Competition Water and Wastewater would prevent a state or local government from “preferring” one type of piping material  for use in a  water, sewer or stormwater infrastructure project receiving state funds.  I don’t know the story behind the bill,  but usually legislation attempting to  change a state agency’s policy about  use of a particular product or system has been introduced in response to complaints by  a  vendor.

RENEWABLE ENERGY

The General Assembly’s internal debate over renewable energy development continues. In 2013,  the Republican majority in the General Assembly split over attempts to repeal both the Renewable Energy Portfolio Standard (REPS) and the state’s tax credit for investment in renewable energy projects. In the end, a bipartisan majority declined to repeal the incentives for renewable energy development — in large part, because renewable energy had become one of the bright spots in the state’s economic recovery. See an earlier post on the end of the 2013 fight over the REPS.

This session, one focus is on the scheduled sunset of the renewable energy tax credit on January 1, 2016. There are bills in both the House and the Senate to extend the tax credit;  House Bill 454  extends the tax credit until January 12021 and Senate Bill 329 extends the tax credit to January 1, 2020.  Opponents of the tax credit have introduced a bill, Senate Bill 372, that essentially retains the existing January 1, 2016 sunset,  but provides a “safe harbor” for investors who have made substantial outlays on projects not  in service  by the sunset date. Those taxpayers would have an additional year  (until January 1, 2017) to claim the tax credit.

UPDATE:  House Bill 681 would sunset the REPS requirement early, ending in 2018  with a  standard requiring  6% of retail sales of electricity to be generated from renewable sources. The current law requires that  electric public utilities generate 12.5% of retail sales from renewable energy source by 2021 and thereafter.

A Citizen’s Guide to Climate Change, Part I: Temperature

January 30,  2015. Controversy over EPA’s proposed carbon reduction rule (see an earlier post)  has again focused attention on the  climate change debate.  This post will look at global  temperature trends as reported by the National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautic and Space Administration (NASA).

The most recent temperature data. In  2014, the average combined land and sea surface temperature on Earth reached the highest level since modern record-keeping began in the 1880s.   The latest temperature data can be found in the National Oceanic and Atmospheric Administration (NOAA)   2014  Global Climate Report here. Similar results reported by  NASA can be found here. Although NOAA and NASA use somewhat different baselines and methods, the two agencies reached very similar results. NASA calculated an increase of 1.4 ° (F) over the historical baseline; NOAA found an increase of 1.24° (F). Both found that higher ocean temperatures made a slightly greater contribution to the total increase than land surface temperatures.

The  chart below has been adapted from a NOAA Chart showing the ten warmest years on record based on the global average temperature. All of those years, with the exception of one, have occurred since 2000.  The third  column shows the increase in temperature by reference to the historical average (1880-2014).

Rank (1=Warmest) Year Increase (Fº)
2014  +1.24
2 (Tie) 2010/2005  + 1.17
4 1998  +1.13
5 (Tie) 2013/2003  +1.12
7 2002  +1.10
8 2006  +1.08
9 (Tie) 2009/2007  +1.06

Some temperature fluctuation from year to year can be accounted for by El Nino (warming) and La Nina (cooling) trends in the Pacific Ocean, but the 2014 high occurred under neutral El Nino conditions.  Find the original NOAA chart and other information about NOAA’s  2014 temperature analysis here.

NOAA also provides a bar chart showing the trend in global temperature over the entire period

Comparison to past temperature variation on Earth. Scientists have estimated average global temperature during past warming and cooling  periods based on a variety of natural records — glacial ice, tree rings, geological formations, and fossils. There have been periods in the past when Earth’s average temperature was much higher than it is now.  But once Earth cooled down from a hot rock to  a planet capable of supporting life,  the warming event that followed the last ice age occurred  very slowly.  See NOAA’s  introduction to  climate history here.   The overviews of historical climate studies provided by NOAA and by NASA’s  Climate Observatory  put  context around recent temperature increases:

♦  Earth’s average temperature varies from year to year in response to many influences,  but in recent  decades, the cooler years have represented “noise” in an overall upward trend.

♦ Earth’s climate has been relatively stable for much of the history of human civilization (the past 10,000 years).

♦ The last significant warming period (which  began around 11,000  years ago) led to an increase in the Earth’s average surface temperature of between 7° – 12° F.  That warming occurred very gradually  over a period of about 5,000 years and then another cooling trend began.

♦  The current warming trend began in the 20th century and temperature increases are happening  10  times  times faster than the last  ice age  warming period. (NASA).

For more detail on climate history, both the NASA and NOAA  sites provide links to the scientific studies used as references.

Do these increases in global temperature matter?  An increase of 1.4° F over the average global surface temperature seems — and is —  small, but  even small increases can affect patterns of plant and animal life.  In 2012,  the  U.S. Department of Agriculture released an updated U.S.  plant  hardiness zone map.  The map divides the U.S. into  zones based on the average annual low temperature;  going from north to south, each zone on the map represents  a 10° increase in the average low temperature. By comparison to the 1990 map, the new map shows a half-zone shift (or  5° F) toward the warmer zones. USDA has been careful to say the data sets for the 1990 and 2012 maps differed in a number of ways — the new map reflects data from more  locations and use of more sophisticated technology as well as additional years of data.  But the shifts are consistent with the general trend in global temperature data since the 1980s and suggest that farmers and gardeners  may already be seeing changes affecting plant life.

While a  1.2°- 1.4° increase in the average temperature over 30 years may already be affecting   the environment, concern about rising global temperature really focuses on the future. Two of the greatest concerns:

1. The rapid pace of warming and the unknown stopping point. Earth’s last major ice age warming event took place over a period of 5,000 years and at a time before modern human civilization and reliance on large-scale agricultural production.   Earth’s current  warming  is occurring  at a much faster rate (as much as 10 times faster), increasing the risk that plant and animal life may not be able to adapt quickly enough to changing temperature regimes. While Unites States agriculture has not been harmed by  the  1.2 – 1.4 ° (F) increase in recent decades,  it could be much more difficult to maintain agricultural productivity in the face of continuing, rapid temperature increases.  Other, warmer,  parts of the globe will be much more vulnerable to agricultural disruption because of temperature increases. Temperature increases can also   affect other human food sources like fisheries.

2. The chain-reaction effect of rapid warming on other parts of the human environment. The chain reaction talked about most often:

Higher global temperaturemelting of land ice ⇒more rapidly rising sea levelsflooding of coastal areas.

The potential for accelerated sea level rise gets attention because of the direct risk to human populations. In 2010, 39%  of the population of the U.S. lived in a shoreline county;  more than half of the population lived within  50  miles of an ocean shoreline. (Source: U.S. census data as reported in NOAA’s State of the Coast Report.)  As a result, accelerated sea level rise could affect some  of the most highly populated areas in the United States.

Note: NASA’s Vital Signs of the Planet website provides visualizations of  changes in the extent of sea ice and land ice.

How reliable is the data?   Temperature records date back to the 1880s and the amount and quality of the data has only gotten better.  NASA describes the records used in the Goddard Institute of Space Sciences temperature calculations this way:

The GISS analysis incorporates surface temperature measurements from 6,300 weather stations, ship- and buoy-based observations of sea surface temperatures, and temperature measurements from Antarctic research stations. This raw data is analyzed using an algorithm that takes into account the varied spacing of temperature stations around the globe and urban heating effects that could skew the calculation. The result is an estimate of the global average temperature difference from a baseline period of 1951 to 1980.

Next: The role of carbon dioxide and other “greenhouse” gasses in raising global temperature.

North Carolina and EPA’s Proposed Carbon Rule

September 30, 2014. On June 2, the U.S. Environmental Protection Agency  released  a draft rule to reduce  carbon dioxide (CO2)  emissions from power plants.  Gov. Pat McCrory’s administration has taken a number of opportunities  to  question the legal basis for the  rule. An earlier post described  a presentation by DENR Deputy Secretary Don van der Vaart  to the N.C.  Energy Policy Council soon after EPA  released the draft rule in June.  DENR actually began staking out a position in opposition to the proposed carbon rule even earlier. (See the DENR website for a number of agency policy documents related to the carbon rule.)  Each time, DENR focused on legal arguments — challenging EPA’s authority to regulate a power plant’s CO2  emissions under Section 111 of the Clean Air Act —  rather than the actual impact of the rule on the state and its electric utilities.

Evaluating the impact of the rule on an  individual state can  be challenging because the rule takes an innovative approach to reducing CO2. Instead of putting the burden and cost of CO2 reductions entirely on the power plants,  the rule tries to harness  other  trends in energy generation — increased  reliance on renewable energy;  adoption of  energy efficiency standards for buildings, appliances and equipment; and a shift in generation from coal-fired plants to natural gas units — to help lower CO2 emissions associated with power generation.  Many of those trends developed in response to other environmental concerns (stricter  air quality  standards for ozone and particulates) or economic incentives (the lower cost of natural gas). EPA’s proposed  carbon rule builds on those trends to also drive down CO2 emissions associated with power generation.

Steps  North Carolina has taken over the last 10-15 years to increase renewable energy  generation and energy efficiency seem to put  the state  in a favorable position to meet the CO2 reduction goal in the rule and come out the other side with competitive energy costs.  This post is intended to provide some  (very basic) background on how the rule works and to  identify the questions that need to be answered to understand what more the state may need to do to meet the CO2 reduction goal in the proposed rule.

BASICS OF THE CLEAN CARBON RULE

♦ The rule only addresses CO2 emissions associated with electric generating units (EGUs) that burn fossil fuels; the rule does not affect industrial sources of CO2.

♦ The rule sets a carbon reduction goal for each state in the form of a rate – pounds of carbon dioxide emitted per megawatt hour of electricity generated or CO2/MWh.

♦ Instead of setting a CO2 emission limit for each EGU, EPA proposed a statewide average CO2 emission rate – allowing the goal to be met in part by shifting electric generation from high to low emission units; increasing renewable energy and nuclear generation; and creating “savings” through energy efficiency measures.

♦ The rate is based on net generation (electricity delivered to the grid) rather than gross generation measured at the EGU. Net generation excludes energy used at the power plant to run fans, pumps, motors and pollution control devices.

♦ The rule sets a final goal for each state to meet in 2030 and interim goals for 2020-2029.

♦  CO2 reduction goals differ from state to state. In calculating the goals, EPA considered the existing mix of electric generation facilities in each state (nuclear, coal, natural gas) and each state’s potential for  increased renewable energy generation and growth in energy efficiency savings.

HOW EPA CALCULATED STATE REDUCTION GOALS (THIS IS REALLY IMPORTANT)

State goals are not based on simply requiring  fossil-fuel burning power plants to reduce their CO2 emissions per megawatt hour from 2012 levels.  Although  EPA used the EGU’s 2012 reported emissions of CO2 as one factor in calculating  the goals, it is not quite correct to describe 2012 as the “base year” for reductions.   The state goals represent something different — reductions in EGU emissions combined with a shift in electric generation capacity to cleaner sources (such as renewable energy and nuclear power) and increases in energy efficiency. More about the rate calculation below.

To set the state CO2 emission rate goals, the EPA rule adjusted the  2012 calculation of CO2/MWh in two ways:

1. EPA reduced the net CO2 emissions  reported by regulated EGUs in 2012 (the numerator in the CO2/MWh equation) by assuming those units can achieve a 6% improvement in heat efficiency. In states where there are both coal-fired plants and natural gas plants, EPA adjusted the numerator again if any natural gas plant in the state operated at less than 70% utilization. Assuming  every natural gas plant could operate at 70% utilization, EPA shifted a corresponding amount of electricity generation from  coal-fired plants to the underused natural gas plants and and adjusted the pounds of CO2 emitted to reflect the natural gas plants’ lower CO2 emissions rate.

So the numerator in the goal represents pounds of CO2 emitted by  the state’s existing power plants after each individual plant has become more heat efficient and after power generation across the entire system has been  reallocated  to better utilize low-emission natural gas units. Both adjustments reduce the amount of CO2 generated by the EGUs  below the amount actually reported  in 2012.

2. EPA then adjusts the denominator in the CO2/MWh equation to spread the pounds of CO2 generated  by the EGUs across the megawatt hours generated by all electric generating sources in the state and megawatt hours of electric generation saved through energy efficiency measures. The denominator becomes:  total megawatt hours generated by the EGUs + new renewable energy generating capacity + new or preserved nuclear generation capacity + an estimate of annual avoided power generation associated with demand-side energy efficiency.  (“Preserved” nuclear power refers to  an existing nuclear plant operating beyond a previously announced closure date.)

The final 2030 CO2 emissions goal as a rate =

Net CO2 emissions for regulated EGUs – 6% heat efficiency*
Total net MWh (EGUs + renewable energy + new/preserved nuclear + avoided generation)

* In some cases there has also been an adjustment for under-utilized natural gas plants.

Although the rule does not propose CO2 reductions from any baseline year, EPA has estimated the rule will result in a 30% reduction in CO2 emissions as compared to 2005.

THE NORTH CAROLINA CO2 REDUCTION GOAL

The proposed  2030 goal for North Carolina is  992 lbs CO2/ MWh. By comparison, North Carolina’s electric generating units reported 2012  emissions  of  1647 lbs CO2/ MWh. (Source: Congressional Research Service report.) The EPA rule would require North Carolina to reduce CO2 emissions from:

1647 lbs of CO2 per megawatt hour  of electricity generated by fossil fuel EGUs

to

992 lbs of CO2 per megawatt hour of electricity generated by fossil fuel EGUs + estimated new renewable energy generation+ new or preserved nuclear capacity+ electricity generation avoided by energy efficiency measures

The Clean Power Plan goal does not require  North Carolina power plants to reduce CO2 emissions by 40%.  The rule requires the state’s  electric generation  system  as a whole to  meet demand for electric power at a 40% lower rate of CO2 emissions.

MEETING THE GOAL

The draft EPA  rule  requires  states to  use four “building blocks” to comply; the building blocks correspond to the factors EPA used to calculate each state’s  CO2 reduction goal:

1. Increased heat efficiency at EGUs —  EPA has  assumed each EGU can achieve  6% improvement in heat efficiency.

2. Increased “dispatch” of power generation from higher emission coal-fired units to lower emission Natural Gas Combined Cycle (NGCC) plants —   EPA has assumed every NGCC  unit can be operated at 70% utilization.

3. Increased generation of electricity from renewable sources and new or preserved nuclear generation.  EPA has estimated the  potential for growth in renewable energy generation and new or preserved nuclear generation individually for each state.

4. Energy efficiency measures to lower demand,  measured by  megawatt hours of generation avoided. EPA set a  goal of increasing demand-side efficiency by 1.5% annually.

The individual building block goals set out for each state are not requirements. EPA  used  these assumptions and estimates  to calculate  each state’s  CO2 reduction goal, but  the rule allows a state to weight the  building blocks differently in  its  compliance plan.  For example,  difficulty meeting EPA’s expectations  for demand-side energy efficiency can be offset  by increasing renewable energy generation (or vice-versa).

RELYING ON EXISTING PROGRAMS

Media reports have  reflected a lot of confusion about the impact of the proposed rule on states like North Carolina that have already taken significant steps to increase renewable energy and energy efficiency.   The proposed federal rule actually stresses  reliance on programs already in place and gives the states  credit for expanded renewable energy generation or growth in energy efficiency as a result of  existing programs.

In talking about the final state emission rate goals,  the rule notes that  “EPA is also proposing that measures taken by a state or its sources after the date of this proposal, or programs already in place, and which result in CO2 emission reductions at affected EGUs during the 2020-2030 period, would apply toward achievement of the state’s CO2 goal.” 

The rule makes a similar statement about renewable energy generation:  “We note that with the exception of hydropower, the renewable energy generation levels represent total amounts of renewable energy generation, rather than incremental amounts above a particular baseline level. As a result, this RE generation can be supplied by any RE capacity regardless of its date of installation.”

Table 6 in the proposed rule  shows North Carolina’s 2012 renewable energy generation as 2% and a proposed final 2030 goal for North Carolina of  10%.  The  N.C. Utilities Commission has reported that North Carolina electric utilities met the first state Renewable Energy Portfolio Standard (REPS) goal of  3% of retail electricity sales in 2012. The final goal under the existing state law will be 10% of retail sales for electric membership corporations/ municipal systems  (by 2018) and 12.5% of retail sales for the electric public utilities (by 2021).  Under the EPA rule, the state will get credit for any new or expanded renewable energy generation in 2014 or later as a result of the existing state REPS requirement.

Since the state REPS goal requires electric utilities to continue to increase renewable energy generation and energy efficiency through 2021,  the increases realized between 2014 and 2021 will also move North Carolina toward the federal goal. To know whether the proposed carbon rule will require the state to do more on renewable energy, the state will need a gap analysis.  The analysis will have to separate  renewable energy generation from energy efficiency savings; the two have been combined in the state REPS goal, but are calculated separately under the federal rule.

The federal rule sets a goal of having every state achieve a 1.5% annual incremental savings based on  demand-side energy efficiency measures.  EPA assumes that states already realizing  a 1.5% in annual incremental savings  will continue  and  maintain that rate through 2029 — giving states that engaged in energy efficiency measures early full credit for the incremental energy savings achieved through existing programs. To understand how close North Carolina may already be to meeting the  carbon rule’s  energy efficiency goal, the state will need to calculate the incremental annual  demand side savings that can be attributed to the state REPS goal and  add incremental savings associated with other energy efficiency programs (such as energy efficiency standards incorporated in the State Building Code).

THE QUESTION

The big  question to be answered is this: How far will North Carolina’s existing renewable energy and energy efficiency programs go toward closing the gap between 1647 lbs CO2/MWh generated by EGUs that burn fossil fuels  and 992 lbs CO2/ MWh generated by power plants+ renewable energy + new/preserved nuclear + generation avoided by energy efficiency?

It appears the remaining gap may be small, giving  North Carolina  an advantage over states that haven’t adopted policies supporting renewable energy generation and energy efficiency.   If so, the advantage will be economic as well as environmental by holding down increases in state energy costs.

RESOURCES

Text of the Clean Carbon Rule (from the June 18, 2014 Federal Register notice)

Congressional Research Service Report: State CO2 Emission Rate Goals in EPA’s Proposed Rule for Existing Power Plants, Jonathan Ramseur, Specialist in Environmental Policy, July 21, 2014.

2013 NC Utilities Commission Annual Report Regarding Renewable Energy and Energy Efficiency Portfolio Standard in North Carolina