Environment, Energy, and Resources Law: The Year in Review 2012

420 Pages·2017·3.98 MB·English

ISBN: 978-1-61438-988-0
ISSN: 1946-9640

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ABA SECTION OF ENVIRONMENT, ENERGY, AND RESOURCES
2012–2013

COUNCIL
Executive Committee
Chair
ALEXANDRA DAPOLITO DUNN

Chair-Elect Vice Chair Secretary Budget Officer
WILLIAM L. PENNY STEVEN T. MIANO SONYA L. CHANNING J. MARTIN
BASKERVILLE

Education Officer Membership and Publications Officer Immediate Past Chair
PETER C. WRIGHT Diversity Officer SETH A. DAVIS IRMA S. RUSSELL
PAMELA E. BARKER

Section Delegates to the ABA House of Delegates
LEE A. DEHIHNS, III and SHEILA SLOCUM HOLLIS

Council Members
ROBIN K. CRAIG JEFFERY S. DENNIS JONATHAN W. KAHN
AMY L. EDWARDS TRACY D. HESTER LYLE DAVID LARSON
FRANCINE MARIE FFOLKES ROGER R. MARTELLA, JR. KAREN MIGNONE
HOWARD KENISON JAMES M. STUHLTRAGER REBECCA WRIGHT PRITCHETT
JOHN P. MANARD, JR. KAREN M. WARDZINSKI

Special Committee on The Year in Review Chair: JOHN E. THORSON
Section Director: DANA JONUSAITIS

THE UNIVERSITY OF TULSA COLLEGE OF LAW
EDITORIAL BOARD

Faculty Advisor: ROBERT BUTKIN
Student Editors
Managing Editor
ERIN POTTER
Executive Editors
ALAN BARKER DANIELLE DAVIS KIMBERLY WENDELL

Senior Staff
DEREK NORRIS
Staff
MITCHELL S. ARNOLD KURT BAUMGAERTNER ADAM BENDER
MATTHEW COMEAUX AUBRA DRYBREAD JOEL P. JOHNSTON
BRYAN LOWER TROY MCPHERSON SAM PERRINE
This page is intentionally left blank.
SUMMARY OF CONTENTS

Introduction ................................................................................................................... xvii
Highlights of The Year in Review 2012...................................................................... xviii
Environmental Committees
Chapter 1 • Agricultural Management ...........................................................................1
Chapter 2 • Air Quality ..................................................................................................7
Chapter 3 • Endangered Species ..................................................................................30
Chapter 4 • Environmental Disclosure .........................................................................37
Chapter 5 • Environmental Enforcement and Crimes ..................................................43
Chapter 6 • Environmental Litigation and Toxic Torts ...............................................50
Chapter 7 • Environmental Transactions and Brownfields ..........................................60
Chapter 8 • Pesticides, Chemical Regulation, and Right-to-Know .............................75
Chapter 9 • Superfund and Natural Resource Damages Litigation .............................85
Chapter 10 • Waste and Resource Recovery ................................................................99
Chapter 11 • Water Quality and Wetlands .................................................................106
Energy and Resources Committees
Chapter 12 • Energy and Environmental Markets and Finance .................................121
Chapter 13 • Energy and Natural Resources Litigation .............................................129
Chapter 14 • Energy and Natural Resources Market Regulation ...............................144
Chapter 15 • Energy Infrastructure and Siting ...........................................................161
Chapter 16 • Forest Resources ...................................................................................168
Chapter 17 • Hydro Power .........................................................................................175
Chapter 18 • Marine Resources..................................................................................181
Chapter 19 • Mining and Mineral Extraction .............................................................193
Chapter 20 • Native American Resources ..................................................................202
Chapter 21 • Nuclear Law ..........................................................................................213
Chapter 22 • Oil and Gas ...........................................................................................218
Chapter 23 • Petroleum Marketing ............................................................................257
Chapter 24 • Public Land and Resources ...................................................................267
Chapter 25 • Renewable, Alternative, and Distributed Energy Resources ................273
Chapter 26 • Water Resources ...................................................................................280
Cross Practice Committees
Chapter 27 • Alternative Dispute Resolution .............................................................307
Chapter 28 • Climate Change, Sustainable Development, and Ecosystems ..............313
Chapter 29 • Constitutional Law ................................................................................338
Chapter 30 • International Environmental and Resources Law .................................349
Chapter 31 • Science and Technology .......................................................................366
Chapter 32 • Smart Growth and Green Buildings ......................................................371
Council Related Committee
Chapter 33 • Ethics.....................................................................................................377
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TABLE OF CONTENTS

Chapter 1
AGRICULTURAL MANAGEMENT ............................................................................ 1
I. SELECTED EPA ACTIONS ON CONCENTRATED ANIMAL FEEDING OPERATIONS............. 1
A. Revision of CAFO Clean Water Act Regulation .................................................... 1
B. EPA Withdraws Proposed Rule for CAFO Reporting ........................................... 1
C. Solicitation for Comments on Revisions to Federal CAFO Regulations ............... 1
D. Controversy over EPA’s use of Aerial Surveillance of CAFOs ............................. 2
E. EPA Oversight of Iowa’s CAFO Regulation ......................................................... 2
II. GENETICALLY ENGINEERED CROPS AND ANIMALS ....................................................... 2
A. NEPA Challenges to USDA Regulations of Genetically
Engineered (GE) Crops ......................................................................................... 2
B. USDA Permits for Field Trials of GE Crops and Animals .................................... 3
C. Challenges to Planting of GE Crops on Federal Wildlife Refuges........................ 4
D. Bayer Settlement and Trials Concerning Liberty Link Rice .................................. 5
III. FEDERAL FARM BILL .................................................................................................... 5
IV. FARM BILL CONSERVATION COMPLIANCE CASE ........................................................... 6
V. SELECTED STATE AND LOCAL ACTION INVOLVING AGRICULTURE ................................ 6
A. California Amends Clean Air Act State Implementation Plan for Pesticides ........ 6
B. Urban Agriculture Developments .......................................................................... 6

Chapter 2
AIR QUALITY .................................................................................................................. 7
I. JUDICIAL DEVELOPMENTS ............................................................................................ 7
A. Title I – Federal (FIPs) and State Implementation Plans (SIPs), Conformity,
Federal Facilities ................................................................................................... 7
B. Title I – Displacement of Common Law Claims .................................................... 9
C. New Source Review (NSR), Prevention of Significant Deterioration (PSD),
New Source Performance Standards (NSPS) ...................................................... 10
D. Title II – Mobile Sources and Fuels..................................................................... 11
E. Title III – Hazardous Air Pollutants .................................................................... 12
F. Title V – Permitting.............................................................................................. 12
G. Civil and Criminal Enforcement .......................................................................... 13
H. Citizen Suits ......................................................................................................... 13
I. Procedural Issues ................................................................................................ 14
II. REGULATORY DEVELOPMENTS ................................................................................... 14
A. Title I – Federal (FIPs) and State Implementation Plans (SIPs), Conformity,
Federal Facilities ................................................................................................. 14
B. New Source Review (NSR), Prevention of Significant Deterioration (PSD),
New Source Performance Standards (NSPS) ...................................................... 20
C. Title II – Mobile Sources and Fuels..................................................................... 22
D. Title III – Hazardous Air Pollutants .................................................................... 24
E. Title V – Permitting.............................................................................................. 26
F. Title VI ................................................................................................................. 26
G. Greenhouse Gas Emissions ................................................................................. 27

Chapter 3
ENDANGERED SPECIES ............................................................................................ 30
I. LEGISLATIVE DEVELOPMENTS .................................................................................... 30
II. ADMINISTRATIVE DEVELOPMENTS ............................................................................. 30
III. JUDICIAL DEVELOPMENTS .......................................................................................... 31
A. Section 4: Listings, Critical Habitat Designation, and Recovery Plans .............. 31
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B. Section 5: Habitat Acquisition ............................................................................. 33
C. Section 6: State Cooperative Programs............................................................... 33
D. Section 7: Federal Agency Conservation Duty, Jeopardy Standard
Consultations, and Incidental Take Statements ................................................... 33
E. Section 9: Take Prohibition ................................................................................. 36
F. Section 10: Permits and Experimental Populations ............................................ 36
G. Section 11: Enforcement, Citizen Suits, Standing, and Jurisdiction Issues ......... 36
H. Miscellaneous ESA Topics and Related Federal and State Laws ....................... 36
Chapter 4
ENVIRONMENTAL DISCLOSURE ........................................................................... 37
I. OVERVIEW ................................................................................................................ 37
II. HYDRAULIC FRACTURING DISCLOSURE ...................................................................... 37
A. Federal Activity ................................................................................................... 37
B. State Activity ........................................................................................................ 38
C. Public Group Activity .......................................................................................... 38
III. SEC ENFORCEMENT ACTIONS AND SHAREHOLDER CLASS ACTIONS........................... 39
IV. SHAREHOLDER RESOURCES ........................................................................................ 40
V. STOCK EXCHANGE ACTIVITY ...................................................................................... 41
VI. FEDERAL ACCOUNTING STANDARDS BOARD (FASB) ACTIVITY ................................. 42
VII. EPA’S DE-EMPHASIS ON VOLUNTARY DISCLOSURE ................................................... 42
Chapter 5
ENVIRONMENTAL ENFORCEMENT AND CRIMES ........................................... 43
I. ENVIRONMENTAL ENFORCEMENT RESULTS FOR 2012 .............................................. 43
II. ENVIRONMENTAL ENFORCEMENT INITIATIVES FOR 2012 ............................................ 44
III. NOTABLE SUPREME COURT CASES ............................................................................. 44
A. Sackett v. Environmental Protection Agency ....................................................... 44
B. Southern Union Co. v. United States ................................................................... 45
IV. SUMMARY OF OTHER SIGNIFICANT CASES .................................................................. 46
A. Criminal Cases .................................................................................................... 46
B. Civil Cases ........................................................................................................... 48
Chapter 6
ENVIRONMENTAL LITIGATION AND TOXIC TORTS ...................................... 50
I. DEEPWATER HORIZON: SETTLEMENTS AND DECISIONS ............................................ 50
II. CLIMATE-BASED TORT ACTION .................................................................................. 51
III. TRESPASS ................................................................................................................... 53
IV. EXPERTS/CAUSATION ................................................................................................. 54
V. FRACKING ................................................................................................................... 56
VI. DAMAGES ................................................................................................................... 56
VII. CLASS ACTIONS .......................................................................................................... 57
VIII. OTHER TORT-BASED ACTIONS ................................................................................... 57
Chapter 7
ENVIRONMENTAL TRANSACTIONS AND BROWNFIELDS ............................. 60
I. PARENT AND SUCCESSOR LIABILITY ......................................................................... 60
A. Parent Liability .................................................................................................... 60
B. Successor Liability ............................................................................................... 61
II. INDIVIDUAL LIABILITY ............................................................................................... 62
III. CONTRACTUAL LIABILITY .......................................................................................... 63
IV. BANKRUPTCY ............................................................................................................. 64
V. LENDER LIABILITY ..................................................................................................... 65
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VI. BROWNFIELDS ............................................................................................................ 66
A. Cases .................................................................................................................... 66
B. Legislative Update ............................................................................................... 67
VII. ENVIRONMENTAL INSURANCE .................................................................................... 68
VIII. INSTITUTIONAL CONTROLS ........................................................................................ 69
IX. ENVIRONMENTAL INVESTIGATIONS/DUE DILIGENCE .................................................. 70
A. Changes and Proposed Changes to the ASTM International
(ASTM) Standards ............................................................................................... 70
B. Environmental Due Diligence for Hydraulic Fracturing Operations ................. 71
X. IMPACT OF BUILDING ISSUES ON TRANSACTIONS ........................................................ 72
A. Vapor Intrusion Cases ......................................................................................... 72
B. Lead-Based Paint ................................................................................................. 73
C. PCBs .................................................................................................................... 73
Chapter 8
PESTICIDES, CHEMICAL REGULATION, AND RIGHT-TO-KNOW ............... 75
I. TOXIC SUBSTANCES CONTROL ACT (TSCA) ............................................................. 75
II. PESTICIDES ................................................................................................................. 77
A. Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) ........................... 77
B. Endangered Species Act (ESA) ............................................................................ 78
III. EMERGENCY PLANNING AND COMMUNITY RIGHT-TO-KNOW ..................................... 79
IV. NANOTECHNOLOGY .................................................................................................... 80
V. HYDRAULIC FRACTURING (HF) .................................................................................. 81
VI. GENETICALLY ENGINEERED (GE) PRODUCTS ............................................................. 82
VII. GREEN CHEMISTRY ..................................................................................................... 83
Chapter 9
SUPERFUND AND NATURAL RESOURCE DAMAGES LITIGATION .............. 85
I. SUPERFUND: ADMINISTRATIVE AND REGULATORY DEVELOPMENTS .......................... 85
II. SUPERFUND: JUDICIAL DEVELOPMENTS ...................................................................... 85
A. Applicability and Constitutional Issues ............................................................... 85
B. Jurisdiction .......................................................................................................... 86
C. Standing ............................................................................................................... 86
D. Elements of Liability ............................................................................................ 87
E. Liability of Particular Parties ............................................................................. 87
F. Joint and Several Liability: Divisibility ............................................................... 89
G. Private Cost Recovery, Contribution and Contribution Protection .................... 90
H. Allocation and Indemnification ........................................................................... 92
I. Defenses ............................................................................................................... 93
J. Recoverable Response Costs (Including Attorneys’ Fees) .................................. 96
K. Claims Against the Government, Including Section 106(b) Actions ................... 97
L. NPL ...................................................................................................................... 98
M. Preemption ........................................................................................................... 98
N. Miscellaneous ...................................................................................................... 98
III. NATURAL RESOURCE DAMAGES ................................................................................. 98
Chapter 10
WASTE AND RESOURCE RECOVERY ................................................................... 99
I. LITIGATION DEVELOPMENTS .................................................................................... 99
A. Southern Union Co. v. U.S. .................................................................................. 99
B. National Solid Wastes Management Association v. City of Dallas ..................... 99
C. Campbell County v. Royal ................................................................................. 101
D. American Eagle Waste Industries, LLC v. St. Louis County ............................. 101
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E. Gracie Point Community Council v. New York State Department of
Environmental Conservation ............................................................................. 102
F. E-Waste Cases ................................................................................................... 103
G. Developments in Cases Reported in the 2011 Annual Report ........................... 104
II. REGULATORY DEVELOPMENTS ................................................................................. 105
A. State Requirements for E-Waste ........................................................................ 105
B. Non-Hazardous Secondary Materials Rule ....................................................... 105
C. Coal Combustion Residuals Regulations ........................................................... 105
Chapter 11
WATER QUALITY AND WETLANDS .................................................................... 106
I. JUDICIAL DEVELOPMENTS ........................................................................................ 106
A. Clean Water Act (CWA) Section 303 Water Quality Standards ........................ 106
B. CWA Section 303(d) – Total Maximum Daily Loads (TMDLs) ......................... 108
C. CWA Sections 304 and 306 – Criteria and Guidelines and
Performance Standards ..................................................................................... 109
D. CWA Section 309 – Enforcement ....................................................................... 109
E. Section 401 – State Certification ....................................................................... 110
F. CWA Section 402 – National Pollutant Discharge Elimination
System (NPDES) ................................................................................................ 111
G. CWA Section 404 – Wetlands ............................................................................ 114
H. CWA Section 505 ............................................................................................... 115
II. ADMINISTRATIVE DEVELOPMENTS ........................................................................... 117
A. CWA Section 303 – Water Quality Standards ................................................... 117
B. CWA Section 303(d) – Total Maximum Daily Loads (TMDLs) ......................... 117
C. CWA Sections 304 and 306 – Criteria and Guidelines, and Performance
Standards ........................................................................................................... 117
D. CWA Section 402 – National Pollutant Discharge Elimination
System (NPDES) ................................................................................................ 119
III. LEGISLATIVE DEVELOPMENTS .................................................................................. 120
A. CWA Section 303 – Water Quality Standards ................................................... 120
B. CWA Section 303(d) – Total Maximum Daily Loads (TMDLs) ......................... 120
Chapter 12
ENERGY AND ENVIRONMENTAL MARKETS AND FINANCE ...................... 121
I. LEGIT EMIT: CALIFORNIA LOW CARBON FUEL STANDARD VS. THE DORMANT
COMMERCE CLAUSE ................................................................................................. 121
II. NOX/SO2 ALLOWANCE TRADING SCHEME VACATED ................................................ 122
III. INNOVATIVE AND ADVANCED TECHNOLOGY GREENHOUSE GAS CREDIT FOR
HEAVY DUTY VEHICLES AND ENGINES ..................................................................... 124
A. Introduction ....................................................................................................... 124
B. GHG Regulatory Background ........................................................................... 124
C. Innovative Technology Credits .......................................................................... 124
D. Advanced Technology Credits ........................................................................... 125
E. Conclusion ......................................................................................................... 125
IV. INCREASING TREND IN JOINT VENTURES BETWEEN DOMESTIC AND FOREIGN
OIL COMPANIES ........................................................................................................ 126
V. IMPLICATION OF FOREIGN INVESTMENT IN SHALE EXPLORATION AND
PRODUCTION ............................................................................................................ 127
A. Introduction ....................................................................................................... 127
B. Discussion .......................................................................................................... 127
C. Future Implications ........................................................................................... 128
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Chapter 13
ENERGY AND NATURAL RESOURCES LITIGATION ...................................... 129
I. LITIGATION OVER INTERNATIONAL ENERGY AND RESOURCES OPERATIONS ............. 129
A. Claims for Tortious Interference and Award of $66.5 Million in Actual
Damages in Connection with Failed Oil and Gas Project in Bulgaria
Upheld on Appeal .............................................................................................. 129
B. Court Finds that Sovereign Immunity Compelled the Dismissal of the
Plaintiffs’ Lawsuit Against the Republic of Iraq, and that the “Commercial
Activity” Exception was not Available Under the Facts Presented................... 130
C. Court Resolves Dispute Over the Manner for Selecting Arbitrators for a
Three-Party Dispute Under an Arbitration Clause that Appeared Designed
for Only Two-Party Disputes ............................................................................. 131
D. Court Finds that a Series of Prior Lawsuits Over the Same Subject Matter
Precluded the Plaintiffs’ Present Suit and that Sanctions Were Appropriate ... 132
E. Based Upon the Doctrine of forum non conveniens, Court Finds that
Negligence Suit Filed in the Texas Courts Should be Dismissed and Refiled
in the Courts of Peru .......................................................................................... 133
F. Court Affirms Order Dismissing Case for Lack of Personal Jurisdiction ......... 135
G. Court Affirms Dismissal of RICO Claims Against Arbitration Counsel ............ 136
II. OTHER SELECT ENERGY AND NATURAL RESOURCES LAWSUITS ............................... 136
A. Court Addresses the Extent to Which Oil and Gas Royalty Auditors
Employed by the Federal Government may File qui tam Suits Using
Information Obtained, and Previously Disclosed to the Government,
as Part of Their Job Responsibilities for the Government ................................. 136
B. Court Denies Motion to Dismiss Complaint Alleging Violations of
Securities Laws and Misrepresentations by Coal Mining Company
Concerning its Safety and Compliance Record and Practices .......................... 137
C. Rulings Entered in the Litigation Concerning the Deepwater Horizon
Oil Spill in the Gulf of Mexico in 2010 .............................................................. 138
D. Suits Related to the Deepwater Horizon Oil Spill Filed by Plaintiffs
Alleging that the Defendant Companies Used Their Contributions in
Dealing with the Incident but did not Compensate Them .................................. 140
E. Hollywood Intersects with the Deepwater Horizon Oil Spill ............................ 142
F. Reserve Pits Used in Commercial Oil Development are Found to be
Outside the Reach of the Migratory Bird Treaty Act ......................................... 142
G. Applying Illinois law, Court Rejects Attempt to Convert a Letter of Intent
that Expressly Disclaimed any Binding Effect into an Enforceable Contract ... 143
Chapter 14
ENERGY AND NATURAL RESOURCES MARKET REGULATION ................ 144
I. ELECTRICITY MARKETS ............................................................................................ 144
A. Federal Developments ....................................................................................... 144
B. State Developments: Efforts to Promote/Curtail Renewables, Increase
In-State Capacity, or Other Relevant Developments ......................................... 148
II. NATURAL GAS DEVELOPMENTS ................................................................................ 151
A. FERC Enforcement Actions Under Natural Gas Act Section 5 ......................... 151
B. Natural Gas Export Issues – Liquefied Natural Gas ......................................... 151
C. Natural Gas Pipeline Security Issues ................................................................ 152
D. Gas/Electric Interdependence............................................................................ 153
E. Impact of Commodity Futures Trading Commission Regulations on the
Natural Gas Pipeline Sector .............................................................................. 153
III. FERC ENFORCEMENT AND DODD-FRANK UPDATE ................................................... 154
A. Ongoing FERC Enforcement Actions ................................................................ 154
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