Environmental Law ReSource : Environmental Lawyer & Attorney : Reed Smith Law Firm : Climate Change, Sustainability

This post was written by Christopher L. Rissetto and Robert Helland.

On May 15th, the Senate gave final approval, by a vote of 83-14, to S. 601, the Water Resources Development Act of 2013. As we indicated previously, any legislation authorizing additional funds for water infrastructure projects is remarkable in these times of sequestration. In this case, credit the difference, in large part, to two factors: (1) the Senate-passed WRDA bill does not include any earmarking but instead authorizes all “ready-to-go” water development projects, i.e. those with both a completed Report from the Chief of the Army Corps of Engineers and a referral to Congress by the Corps (Section 1002); and (2) the Harbor Maintenance Trust fund, which funds all water projects, has a healthy surplus of almost $7 billion.

Please click here to read the full post written by our Global Regulatory Group colleagues.

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This post was written by Michael Eden

On June 4, 2013, Nebraska Governor Dave Heineman signed into law a bill (LB104) designed to incentivize the development of renewable energy in the state by exempting certain purchases of renewable energy equipment and other project costs from the state’s 5.5 percent sales tax. The bill defines sources of renewable energy to include wind, solar, geothermal, hydroelectric and transmutation of elements. Under the new law, prospective renewable energy developers will be required to invest a minimum of $20 million in qualified property in the state to be eligible for the exemption. Separate proposals to limit the benefit of the exemption to those spending a percentage of project costs using Nebraska-made materials, and to those spending a percentage of gross revenues earned with Nebraska businesses or individuals, both fell flat and are not included in the final law. The bill falls under the Nebraska Advantage Act of 2006 and takes effect immediately. The complete text of the new law can be found here: http://nebraskalegislature.gov/FloorDocs/Current/PDF/Final/LB104.pdf.

Nebraska wind continues to be a largely untapped resource. According to the Department of Energy, Nebraska has the fourth-best wind energy resource in the country with more than 900,000 MW of wind energy potential – more than 120 times the amount of power needed to meet the state’s needs. However, Nebraska is currently ranked 26th in wind energy production, with 459 MW of installed capacity– far less than neighboring Iowa with 5,137 MW. Neighboring states such as Iowa, Kansas and Oklahoma have similar sales tax exemptions for purchases made in connection with the development of renewable energy. The new law comes at a time when TradeWind Energy of Lenexa, Kansas, is considering the investment of $300 million to 400 million to develop the 200 MW Rattlesnake Creek wind project in Dixon County in northeastern Nebraska. Nebraska is a public power state, and producers of electricity are required to offer at least 10 percent of the generation from a project to Nebraska utilities.
 

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This post was written by Peter Zaman, Nicholas Rock, Jennifer Smokelin and Laith Najjar

Last week, Reed Smith attorneys attended CarbonExpo 2013. For those unfamiliar with CarbonExpo, it is the largest carbon market event of the year. Although there are now US and Asian events of a similar format, the European event (hosted in Cologne and Barcelona in alternate years) is the largest and most widely attended. According to the organizers, last year, there were 1800 attendees, this year there were 2070 attendees. This no doubt reflects the end results of the market consolidation process that took place between 2010-2012 and suggests that there is probably room for some growth in the market following that consolidation. This was the first year that Reed Smith was represented, in force, at CarbonExpo. There were attendees from Reed Smith’s Energy and Natural Resources Practice Group: Peter Zaman, Nick Rock and Laith Najjar (all London) and Jennifer Smokelin (Pittsburgh). Reed Smith were one of the only two law firms exhibiting at CarbonExpo.

We noticed a strong positive interest in the California market. Price indicators per ton have been promising and offsets are expected to be at a premium, triggering interest in legal advice on the California market. Also, on the margins of CarbonExpo, the International Emissions Trading Association (IETA) organized a meeting of its California Drafting Working Group which is presently tasked with the drafting of a standard emissions master trading agreement for the California market. Reed Smith is involved in this drafting effort and can report that significant progress was made on the draft agreement.

On the international side, the recent positive notes from China about adopting a cap on their emissions and the beginning of its own domestic voluntary scheme seems to have increased optimism for progress towards an international global agreement by 2015 to replace the Kyoto Protocol. The EU Emission Trading Scheme (EU ETS) remains in the doldrums until such time there is a fix for the excess allocation in Phase 3. We understand that legislative proposals from the European Commission are due in July 2013. On a final note, these positive sentiments did move EU ETS price up for the highest they have been in the last 14 weeks.

If you would like to discuss opportunities in the California carbon market or the international market, please contact your Reed Smith environmental team contact.
 

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This post was written by Christopher L. Rissetto, Robert Helland, Lawrence A. Demase, Peter Cassidy, David W. Wagner

Last week, a Reed Smith client alert discussed pending legislation and possible regulatory responses related to chemical plant safety, in the aftermath of the recent West, Texas fertilizer plant explosion. The pressure to act continues to build. Most recent developments include a letter sent this week from Congressman Mike Pompeo (R-KS-4) to the U.S. Environmental Protection Agency (USEPA) addressing several issues, including: the scope of its authority to regulate chemical plant security under the General Duty Clause of the Clean Air Act; the EPA’s authority to mandate the use of “inherently safer technologies”; and its regulatory plans related to chemical plants. The Congressman also brought up these issues during testimony on May 16 by USEPA Acting Administrator Bob Perciasepe before the House Energy and Commerce Committee, Subcommittee on Energy and Power.

As we explained in the alert, it is the view of many – especially in the environmental community – that the General Duty Clause [Section 112(r)(1)] already provides the EPA with the authority to prevent the release of dangerous chemicals by requiring the use of “inherently safer technologies” i.e., replacing a chemical or chemical process when the use of that chemical is considered to be too dangerous. The EPA has not yet adopted this view - Acting Administrator Perciasepe did not commit to any position during his testimony on May 16 – but the possibility remains that the EPA might do so at any time. The letter from Rep. Pompeo underscores the concern of many lawmakers to such an interpretation of the General Duty Clause and follows legislation he sponsors, H.R. 888, the General Duty Clarification Act, which would prohibit USEPA from regulating “inherently safer technologies.”

As investigators continue to look at the explosion in Texas, the chances remain high that Congress and the EPA will take additional action on chemical plant safety.
 

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This post was written by Timothy J. Nagle, Paul Bond and Amy S. Koch

Introduction

“Electric Grid Vulnerability: Industry Responses Reveal Security Gaps,” by the staffs of U.S. Reps. Ed Markey (D-Mass.) and Henry Waxman (D-Cal.), resulted from a survey of more than 100 utilities. The report and the contemporaneous House Energy and Commerce Committee hearing on “Cyber Threats and Security Solutions” are indicators of the level of legislative and regulatory attention to these issues. The report’s findings included:

• Attacks on critical infrastructure, including energy, are up 68 percent from 2011 levels
• Many utilities reported “daily,” “constant,” or “frequent” attempted cyber attacks ranging from phishing to malware infection to unfriendly probes
• The rate of cyber attacks against American corporate and government infrastructure is on the rise and unlikely to abate

Click here to read the full entry written by members of the Global Regulatory Enforcement Practice Group and Energy and Natural Resources Industry Group.

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This post was written by Christopher L. Rissetto, Robert Helland, Lawrence A. Demase, Peter Cassidy, David W. Wagner

Introduction

The global demand for natural resources continues unabated. As revenues increase and profits soar in the face of this demand, there has been a resurgence of “resource nationalism” with resource-rich host states seeking greater control or a larger share of the revenue generated from its resources.

The issue of chemical plant safety has long been a target of environmental, and other, groups concerned with operational safety, as well as protection from terrorist intentions. The recent explosion at a Texas fertilizer plant provides further impetus to these groups, to some in Congress and with the Executive Branch agencies to act now on mandating at least some level of heightened safety standards. Rules are already in place requiring (1) chemical facilities to develop “risk management plans” that detail the potential effects of an accidental chemical release and outline the steps that are to be taken to prevent or address such an event; and (2) facilities identified as “high risk” to develop an effective site security plan. Safety and security concerns, whether from a release of chemicals that harms the public or from terrorist threats, add further pressure in support of a greater federal response; it may be that now is the time when new requirements are established. In this client alert, we identify pending legislation and possible regulatory responses for chemical plant safety, and discuss their potential for enactment.

To read the full entry, please click here.

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This post was written by Jennifer Smokelin and Jamon Bollock

This client alert serves as an executive summary for a supplementary white paper, The Basics of Transacting in Offsets under AB 32, and will assist clients in addressing offset transaction risks.

The white paper offers an in-depth discussion of the following:

• "Primary" vs. "Secondary" markets for offsets
• Options and strategies for buying offset credits
• Benefits and challenges of buying offset credits

To access the white paper, please click here.

To read the full client alert, please click here.

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On Thursday, May 23rd Reed Smith's Energy and Natural Resources group presented on cap and trade, with a primary focus on the May 2013 auction. Further, we discussed recent trends and developments, business risks in the primary market and proposed regulatory changes in the carbon offset market, and how those issues affect the California carbon market.

California Cap and Trade Update
With a Spotlight on Offset Issues

Topics:   

• Auction Comments
• Hot issues at CARB
• Offset Update: Business risks in the primary market and proposed regulatory changes (Fall 2013)

The slides and audio are available here for download. 

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This post was written by Edward V. Walsh, III

Chemical manufacturers, distributors and employers of all types need to take note of new Occupational Safety and Health Administration (OSHA) requirements contained in OSHA’s recently modified hazard communication standard (HCS). The modifications make the new HCS consistent with the United Nations Globally Harmonized System of Classification and Labeling of Chemicals (GHS). The United States now joins the EU and numerous other countries in making this move.

Note that currently 27 states or U.S. territories have OSHA-approved plans. These states have six months from the publication of the new standard to adopt comparable versions. State governments may also enact federally approved plans that impose stricter (but not less strict) requirements on employers. Businesses must be aware of any such state rules and adjust their programs accordingly.
 

To read the full entry, please click here.

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This post was written by Peter Cassidy and Joseph Otoo

Introduction

The global demand for natural resources continues unabated. As revenues increase and profits soar in the face of this demand, there has been a resurgence of “resource nationalism” with resource-rich host states seeking greater control or a larger share of the revenue generated from its resources.

Ernst & Young has recently ranked protectionism by governments through resource nationalism as the number one risk for mining companies in 2013. This alert looks at the impact of risks associated with resource nationalism on infrastructure projects and how those risks might be mitigated.

To read the full entry, please click here.

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This post was written by Peter Zaman

Unlike most traded commodity markets, the market for trading carbon credits or emissions allowances in the EU is not one based on its utility, usage or consumption. A carbon credit is not used in manufacturing processes or consumed like power or grain. Its market is entirely an invention of policy as implemented through legislation and regulation with a view to reducing the carbon emissions in the EU. Any demand for a carbon credit or emission allowance (“allowances”), is also therefore a creation of those legislative and regulatory processes. That process has left the EU Emissions Trading Scheme (“EU ETS”), today in its third phase, moribund with an over-supply of allowances.

To read the full entry, please click here.

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This post was written by Mark A. Mustian.

If you have been involved in a property with contamination, you are likely aware of the concerns associated with the release of volatile vapors into the indoor air space of buildings located on or near the contamination. Volatile organic chemicals such as trichloroethylene, petroleum compounds, and even inorganics such as mercury, may all emit vapors which can become trapped inside of buildings. These vapors present both short and long-term health concerns, and in certain circumstances even create a risk of fire or explosion. Because such vapors may migrate offsite to neighboring properties, they may create the risk of a third party lawsuit as well. Both the U.S. Environmental Protection Agency (EPA) and various state agencies have recognized the potential environmental impacts of vapor intrusion (VI) for many years, and have developed a patchwork procedure for evaluating and mitigating these impacts.

EPA first addressed this issue formally in November, 2002, when EPA’s Office of Solid Waste and Emergency Response (OSWER) issued Draft OSWER Guidance for Evaluating the Vapor Intrusion to Indoor Air Pathway from Groundwater and Soil (Subsurface Vapor Intrusion Guidance). This document, which has never been finalized, was intended as a tool to help people conduct screening evaluations and determine if VI at a particular site posed an unacceptable risk to human health. The document did not provide recommendations for either delineating the extent of the risk or procedures to eliminate the risk. Since this draft guidance was published, numerous sites across the country have been evaluated and mitigated to reduce or eliminate potential risks. This work, along with research by private and government groups, has lead to a greatly improved understanding of the issues involved in assessing and managing VI. In 2009, EPA’s Office of the Inspector General (OIG) recommended that OSWER evaluate the 2002 report and update it to reflect the current understanding of VI evaluation and remediation. The new draft guidance documents are the result of the 2009 recommendation.

EPA has issued in draft form two guidance documents. One document is the comprehensive guidance for assessing vapor intrusion, making risk management decisions and implementing mitigation. This document, the OSWER Final Guidance for Assessing and Mitigating the Vapor Intrusion Pathway from Subsurface Sources to Indoor Air (Final VI Guidance), is intended to replace the 2002 draft Subsurface Vapor Intrusion Guidance document. For petroleum hydrocarbons that arise from releases at Subtitle I underground storage tank (UST) systems, EPA has developed a companion to the Final VI Guidance. The companion guidance document, Guidance For Addressing Petroleum Vapor Intrusion At Leaking Underground Storage Tank Sites (OUST Guidance), provides information and guidance about how vapor intrusion should be assessed for petroleum hydrocarbons at petroleum UST sites and brownsfield sites with similar characteristics. The OUST Guidance is intended to supplement the Final VI Guidance, and both documents would be applicable to petroleum sites. The OUST Guidance was prepared as a result of the 2009 OIG report which noted that the 2002 draft guidance did not address vapor intrusion at petroleum sites and recommended the preparation of guidance for UST sites.

According to EPA, the Final VI Guidance is intended for use at any site being evaluated by EPA pursuant to CERCLA or RCRA, EPA’s brownfield grantees, or state agencies with delegated authority to implement CERCLA or RCRA where vapor intrusion may be of potential concern. However, it is likely that the concepts and procedures developed in this guidance will be adapted for use at any site where VI is of concern.

The Final VI Guidance and OUST Guidance is intended to address the issues recommended in the 2009 OIG report. These issues include:

• Updated toxicity values.
• A recommendation(s) to use multiple lines of evidence in evaluating and making decisions about risks from vapor intrusion.
• How risks from petroleum hydrocarbon vapors should be addressed.
• How the guidance applies to Superfund Five Year Reviews.
• When or whether preemptive mitigation is appropriate.
• Operations, maintenance, and termination of mitigation systems.
• When institutional controls (ICs) and deed restrictions are appropriate.

Affected parties to this guidance could include property developers, local and state regulatory agencies, land owners, consultants, and Potentially Responsible Parties (PRPs) at CERCLA sites. When finalized, these documents, even though they have no regulatory authority, will likely establish the “standard of care” going forward and determine how properties with VI issues are evaluated and remediated. It is important that interested parties evaluate these document and address any issues or concerns during the comment period. EPA will accept comments on the draft documents through May 24, 2013.

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This post was written by Christopher L. Rissetto and Robert Helland.

It’s been more than four years since President Obama signed the American Recovery and Reinvestment Act of 2009 (“Recovery Act”) into law February 17, 2009 (Public Law 111-5). Yet questions and issues regarding the spending of energy-related Recovery Act funding continue. The latest includes an audit from the Department of Energy Office of Inspector General that found problems with the use of Recovery Act funding in the Industrial Carbon Capture and Storage Program. In addition, the Vice Chair of the House Energy and Commerce Committee, Marsha Blackburn, has introduced legislation imposing additional restrictions on companies that receive federal funding from the Department of Energy,drafted in response to reports that at least one bankrupt recipient of Recovery Act funds is selling its assets to a Chinese auto manufacturer. Both of these events - along with the fact that millions in Recovery Act funding has still not been spent - indicate that both Congress and the Executive Branch will continue to pay attention to the spending of funds for renewable and energy-efficiency projects for some to come.

To read the full entry, please click here.

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On Thursday, March 21st presenters from London, California and Pennsylvania spoke about compliance with environmental regulations affecting products. They discussed recent domestic and international requirements related to material sourcing, product design, use, and disposition.

With U.S. manufacturers, distributors and retailers faced with increasing environmental regulation of products, this program was designed to help regulated entities understand the prohibitions, restrictions and requirements they need to know. In particular, key requirements and legal developments were addressed:

• The SEC's conflict minerals regulations
• California's Green Chemistry Law
• The European Union's Restriction on Hazardous Substances (RoHS) and REACH laws
• Product takeback, especially electronic waste legislation

The slides are available for download. To watch the video presentation please click here.

Be sure that we will monitor and analyze these issues and many other environmental and energy issues through the year on our blog and in future teleseminars.

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