One small step for Cape Wind, one giant leap for domestic offshore wind development?

March was a significant month for the Cape Wind project: the utility-scale wind farm proposed for the waters off of Cape Cod would be the first of its kind in the United States. Last month, Cape Wind secured an additional $400 million in financing, bringing its total fundraising to $1.3 billion or about half of the project’s estimated cost of $2.5 billion.[i] The project also prevailed last month in federal court, defeating numerous challenges to federal agency authorizations of the project.[ii] The wind farm has seen well-organized and well-funded opposition since its proposal in 2001.[iii] After more than a decade of litigation, the project may be approaching a crucial turning point. As a Cape Wind press release puts it: “The Court soundly rejected the plaintiffs’ request to vacate the granting of the nation’s first offshore wind lease by the Department of the Interior to Cape Wind.”[iv] But opponents also characterize the outcome as a win for their side too, seeing their narrow gains in the lengthy opinion as further obstructing progress on the planned wind installation.[v]

Plaintiffs in the consolidated case, Pub. Employees for Envtl. Responsibility v. Beaudreu, included a variety of environmental groups, individuals, a Massachusetts township, the Wampanoag Tribe of Gay Head (Aquinnah), and a citizens’ group backed and co-chaired by billionaire industrialist William I. Koch (Alliance to Protect Nantucket Sound). This diverse group brought a litany of charges against several government agencies, including alleged violations of the Administrative Procedure Act (APA); the Endangered Species Act (ESA); the National Environmental Policy Act (NEPA); the Migratory Bird Treaty Act; the Outer Continental Shelf Lands Act (OCSLA); the Clean Water Act (CWA); the Energy Policy Act of 2005; and the Rivers and Harbors Act.[vi]

The court granted summary judgment to the defendants on most of plaintiffs’ challenges, including disposing of arguments regarding alternative locations and technology, navigational safety, historic preservation, sea turtles, and the adequacy of the project’s environmental impact statement (EIS) and biological opinions. Plaintiffs did, however, prevail on two administrative claims.

The court granted summary judgment to the plaintiffs on their claims that the Fish & Wildlife Service (FWS) violated the ESA by failing to make an independent determination as to whether a “feathering operation adjustment” was a reasonable and prudent measure.[vii] The FWS delegated decisionmaking regarding the determination to Cape Wind and to the Bureau of Ocean Energy Management (BOEM). But FWS did not provide any indication that their finding that the measure was not reasonable and prudent since “it modifies the scope of [a] project in a manner that is adverse to the project’s stated purpose and need” was based on an independent determination.[viii] Judge Walton explained:

While collaboration is encouraged, the Joint Consultation Handbook does not support the notion that the FWS should have deferred to the BOEM or Cape Wind when discarding the operational adjustment at issue without at least making clear that it was doing so based on its own independent determination of the issue.[ix]

The court remanded to the FWS to make such an independent determination.

The court also granted summary judgment to the plaintiffs on claims that the National Marine Fisheries Service (NMFS) violated the ESA by failing to issue an “incidental take statement” for North Atlantic right whales. The NMFS did not include an incidental take statement, even though North Atlantic right whales have appeared in the area of the proposed project as well as along routes to be taken by project vessels. “And while the biological opinion states that the ‘NMFS [ ] concluded that the proposed action is not likely to adversely affect right … whales and, therefore, is not likely to jeopardize the[ir] continued existence,’ NMFS1534, the NMFS did not state that incidental take would not occur or was ‘not anticipated.’” Thus, since an incidental take “may occur,” the court concluded that the failure by NMFS to include an incidental take statement with its biological opinion was arbitrary and capricious. The court remanded to NMFS for the issuance of an incidental take statement concerning the take of right whales with its biological opinion, in compliance with the ESA.[x]

The wind project’s latest win comes on the heels of another key victory. In January, the D.C. Circuit upheld the Federal Aviation Association’s (FAA) no hazard determination in the Cape Wind proposal. The FAA “found that the turbines, individually and as a group, would neither exceed the obstruction standards in 14 C.F.R. § 77.17 nor have a physical or electromagnetic radiation effect on the operation of air navigation facilities.”[xi] The FAA’s no hazard determination meant, the court concluded, that no further NEPA analysis was required by the FAA, and that if additional NEPA analysis were to be conducted by FAA it would be duplicative of NEPA analysis being undertaken by the Department of the Interior.

These recent court opinions suggest that opponents of Cape Wind are running out of court options. The Cape Wind saga has been a case study on the use of the courts to stall a locally unpopular project. And what’s more, the opposition in Cape Cod came with a war chest, thanks to billionaire William Koch – a man who owes his fortune to fossil fuels.[xii] So the failure to persuade the courts to put a stop this project is meaningful.[xiii] It would seem the courts are shifting this debate back to the experts in the various federal agencies, inserting themselves only where judicial intervention may be necessary to ensure regulatory compliance.

Indeed, developers have returned to Long Island as a potential site for offshore wind projects. Previous proposals for the New York area have failed (including a proposed wind farm near Long Island that was to be built by FPL Energy but ballooned in cost and never manifested, and more recently, a stalled 350 MW project offshore of the Rockaway Peninsula considered as a “Wind Collaborative” between the local utilities and other stakeholders). But Deepwater Wind, a developer currently looking to site a farm off of Long Island, has already found success in the region, constructing a pilot project off the Rhode Island coast. [xiv] The five-turbine 30 MW demonstration project is located off of Block Island, and could be the first offshore wind farm to generate power in the United States.[xv]

Cape Wind would be the first large-scale offshore wind farm in the United States. The comprehensive opinion finding in favor of Cape Wind and deferring to the federal agencies’ determinations on all but two claims may foreclose not only future challenges to the Cape Wind project, but also to other large-scale offshore wind proposals like the Deepwater proposal for Long Island as well. It would seem the outcome in the most recent Cape Wind courtroom battle has narrowed the scope of possible challenges to future offshore wind proposals, at least for comparable sites in the Mid-Atlantic.

 

-Daniella Roseman is a General Member on MJEAL. She can be reached at droseman@umich.edu.

 


[i] Erin Ailworth, Cape Wind secures $400 million in financing, The Boston Globe (Mar. 26, 2014), http://www.bostonglobe.com/business/2014/03/26/cape-wind-secures-million-financing/tsSLCZCrijgAdUQHZFcgjM/story.html.

[ii] Pub. Employees for Envtl. Responsibility v. Beaudreu, No. 10–1067 (RBW) (DAR), No. 10–1073, No. 10–1079, No. 10–1238, 2014 WL 985394, at *42 (D.D.C. Mar. 14, 2014).

[iii]E.g., Katharine Q. Seelye, Koch Brother Wages 12-Year Fight Over Wind Farm, The New York Times (Oct. 22, 2013), http://www.nytimes.com/2013/10/23/us/koch-brother-wages-12-year-fight-over-wind-farm.html?pagewanted=all&_r=0 (Profiling William Koch’s efforts to stop the Cape Wind project).

[iv] Cape Wind Wins Major Legal Victories, Cape Wind (Mar. 14, 2014), http://www.capewind.org/news1349.htm.S

[v] Barry Cassell, Cape Wind Says Partial Loss in Court not a Major Setback, RenewableEnergyWorld.com, (Mar. 17, 2014), http://www.renewableenergyworld.com/rea/news/article/2014/03/cape-wind-says-partial-loss-in-court-not-a-major-setback (“The court has validated that federal agencies have taken unacceptable shortcuts in their review of Cape Wind.”).

[vi] See Public Employees, 2014 WL 985394 at *1.

[vii] Such an adjustment would cause the turbine rotors to face the wind and stop spinning in order to reduce the risk of collision with the turbines by roseate terns and migrating piping plovers. Public Employees, 2014 WL 985394 at *25.

[viii] See Public Employees, 2014 WL 985394 at *25; see also Cassell, supra note v (noting that Cape Wind has resisted the feathering adjustment as one that would “destroy the economic feasibility” of the proposed project.).

[ix] Public Employees, 2014 WL 985394 at *26.

[x] Id. at *30.

[xi] Town of Barnstable, Mass. v. F.A.A., 740 F.3d 681, 686 (D.C. Cir. 2014).

[xii] Seelye, supra note iii.

[xiii] See, e.g., Lewis Milford, Court Rules for Cape Wind, Ending a Decade of Failed Opposition, Huffington Post (Mar. 18, 2014, 9:38 AM), http://www.huffingtonpost.com/lewis-milford/court-rules-for-cape-wind_b_4979589.html.

[xiv] Claude Solnik, Deepwater Wind proposing wind farm off Montauk coast, Long Island Business News (Mar. 28, 2014), http://libn.com/2014/03/28/deepwater-wind-proposing-wind-farm-off-montauk-coast/.

[xv] Id.

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Government Clashes with Property Owners Over Unused Railroad Tracks

The conflict between private property and public land is nothing new. Property rights have shaped the way in which American society was structured from the moment Europeans reached the New World. Although there have been instances where conservationists have been able to use property rights to their advantage, such as in buying up land that houses sensitive environments, the relationship between conservation and property has typically been rocky. For example, legislation such as the Endangered Species Act allows the federal government to require landowners to preserve critical habitats on their land at the expense of uninterrupted use. Property owners are understandably resistant to this type of intervention, which is often justified in the name of preservation for future generations. On March 10, 2014, the Supreme Court of the United States addressed a case where the federal government wanted to convert railroad tracks into public use trails through private property.  The Court came down on the side of the property owners.

The Marvin Brandt Revocable Trust owns a significant amount of land in the Medicine-Bow Routt National Forest. Some of this land contained railroad track easements owned by the federal government. The United States Forest Service wanted to continue a trail through the family’s land on these federally owned easements, with permission of the railroad and the National Forest Service. The family argued that the land could only be used for railroad purposes, and could not be converted to another public use at the will of the government. After the trust lost in two lower court decisions, the Supreme Court held that after five years of non-use as railroad tracks, these easements reverted to the owner of the property. As such, the Forest Service could not use them as a part of their trail program.

The trail in question is part of the Rails-to-Trails movement that began in the 1980s when railroad transport was beginning to fall into disuse. The government did not want to lose the transportation network for fear that it may one day become useful, so they amended the National Trails System Act to include a procedure called “railbanking.” This procedure allows public or private agreements between track owners and trail builders to convert the land into a public trail until the railroad might need it again.

Resulting trails have a variety of benefits, and seemed like the perfect fix to preserve the railroad network while creating something productive. Health benefits include greater public access to exercise trails and green space, especially in lower-income neighborhoods without many parks where abandoned tracks are often found. The trail system also provides the economic benefit of connecting areas of varying socio-economic wealth, which promotes community development. Transportation infrastructure also improved in many urban areas. For example, the Atlanta Beltline, which is currently in the process of being converted into a multi-use path, allows users to bike or walk short distances that would take infinitely longer in the infamous Atlanta traffic. Trails through national forests or other conservation areas also promote tourism and education about conservation goals. Furthermore, trails have a variety of environmental benefits, such as providing links between fragmented habitats, and improving wetland systems.[i]

These trails have not gone without criticism.  Many of the railroad tracks, such as the ones contested in the Supreme Court case, run through what is otherwise private property in federally-owned easements. An easement is a property right to use someone else’s piece of land for a specific purpose, such as access to the easement owner’s land, or in this case, for railroad tracks. The government owns the easement in question that runs through the family’s land and had the power to assign use of the tracks on its easement to railroad companies. Property owners draw a distinction between this agreed use, and simply allowing the government to do whatever it wishes with the land, especially something that will allow public access to private land.

The Supreme Court agrees with the property owners. The Court seemed extremely concerned about the possibility that some railroad easements go right through people’s homes, saying that this intrusion is unreasonable for any but the initial agreed use.[ii] This contention seems suspect both because the United States government does not have a central database of land that it owns under such circumstances[iii] and because the people who hypothetically built houses on easements are still undertaking a significant risk.

Others criticize that the government is spending exorbitant amounts of money to settle property claims with landowners whose plots abut the trails. In 2013, the government spent $49 million on such claims.[iv] For a project that was supposed to be almost cost-free, that is a lot of money. Additionally, scholars have pointed out that the government is not even getting a deed for this money. So the taxpayers are not paying for the government to buy land for trails.[v]

The real question underlying all of this is whether the benefits are worth the costs. Is the court siding with private property owners when the policy and benefits point the other way? Both the environmentalist and the outdoorsman in me say of course. But legally, there is a long history of protecting private property. Our country was built on this system. And the lone dissenting vote of Justice Sotomayor, shows that the Court is in agreement. Property comes first.

 

-Rachael Westmoreland is a General Member on MJEAL. She can be reached at rwestmor@umich.edu.



[i] Benefits of Rail-Trails, Rails-to-Trails Conservancy (Apr. 9, 2014), http://www.railstotrails.org/ourWork/trailBasics/benefits.html.

[ii] Bill Chappell, Family Trust Wins Supreme Court Fight Against Bike Trail, The Two Way- Breaking News from NPR (Mar. 10, 2014), http://www.npr.org/blogs/thetwo-way/2014/03/10/288584936/family-trust-wins-supreme-court-fight-against-bike-trail.

[iii] Id.

[iv] Jenna Greene, Rail-to-Trails Program Costly to Taxpayers; what could go wrong adapting old railway lines for recreation?, Nat. Law J. (2013).

[v] Id.

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Concerns Raised by the Wave of Hydrofracking in the US

Hydraulic fracturing, more commonly known as “hydrofracking,” is a controversial mining technique that allows natural gas and oil industry developers to reach otherwise unattainable deposits of shale gas.[i] There are varying techniques currently in use, but the general process involves pumping fluids at high pressures into underground wells to force out either oil or natural gas.[ii] The composition of this ‘fluid’ is generally unknown because disclosure is not required by industry groups, but it is estimated that some fluid mixtures may contain up to 29 different carcinogens.[iii] The Environmental Protection Agency (“EPA”) is in the process of actively researching hydrofracking techniques and potential human health effects with a focus on groundwater contamination.[iv]

Hydrofracking took off in the United States in the early-2000s, when the public health and environmental effects of the process were still largely unknown. Since then, there have been various problems with groundwater contamination, leading to people being exposed to an array of chemical compounds, as well as other anecdotal evidence of unforeseen consequences including earthquakes in Ohio and flammable faucets.[v] This type of ‘unconventional natural gas’ development has grown steadily in the United States. According to the EPA, in 1998, unconventional natural gas techniques comprised 28 percent of total U.S. natural gas production versus 50 percent in 2009.[vi]

Environmentalists and various opposition groups are calling for a halt on hydrofracking until the human health and environmental impacts are completely assessed and discussed seriously before moving forward.[vii] These groups feel that adherence to the precautionary principle is crucial, calling for mitigation techniques and remedies to pollution and other potential problems to be handled at the outset rather than as remedial measures.[viii]

There are a variety of legal issues that come with the advent of hydrofracking – while the practice is not particularly new, the application to directional drilling is new along with the sheer growth of the industry. Environmental effects of hydrofracking include air pollution, groundwater depletion and contamination, surface water pollution, soil erosion and sedimentation, among others.[ix] These diverse issues present a jurisdictional problem: both the environmental hazards and broader effects of the oil and natural gas resources are variously national, statewide, regional, and local.[x] Thus, the pervasive nature of hydrofracking activity presents the unanswered question, which level of authority should regulate – federal, state or local?[xi]

Another area of legal concern is the scope and effectiveness of the Safe Drinking Water Act (“SDWA”) in protecting against contamination due to hydrofracking. The SDWA is set up “to ensure the integrity and safety of public water for human consumption,” focusing mainly on toxic substances.[xii] EPA sought to regulate hydrofracking under the SDWA, and conducted a study of hydrofracking and potential impacts on underground sources of drinking water, concluding that injection of hydrofracking fluids posed a minimal threat, yet said that some chemicals can lead to environmental concerns.[xiii] Since this study, Congress passed the Energy Policy Act of 2005, which essentially left a loophole open so that states only have to obtain permits before drilling when diesel fuel is involved.[xiv]

The only effort so far to remove this loophole is the proposed Fracturing Responsibility and Awareness of Chemicals Act of 2011, which would impose two avenues of federal regulation.[xv] First, it would repeal the hydrofracking exemption mentioned above in the SDWA to include “the underground injection of fluids or propping agents pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities”.[xvi] This would then require EPA to monitor and issue permits, requiring state underground injection control programs that previously did not need a permit to acquire one. This bill died at the end of the 112th Congress, and was reintroduced on June 11th, 2013 in the Senate.[xvii]

The Clean Water Act (“CWA”) was put in place to restore and maintain the physical, chemical and biological integrity of waters of the United States.[xviii] The CWA further prohibits the discharge of “point source” pollution into the “waters of the United States,” without a permit acquired from EPA through the National Pollution Discharge Elimination System (“NPDES”).[xix] Hydrofracking produces tremendous amounts of wastewater which, mentioned above, may contain many different contaminants. The EPA generally defers to the various state permitting authorities, though the issue of permitting again implicates the jurisdictional issues of hydrofracking.[xx]

As hydrofracking is a novel and developing technique to mine oil and natural gas, there are a variety of other legal problems besides those mentioned here. The resolution of these issues depends on many factors, including the economic costs of permitting, environmental remediation efforts, and the interplay of federal, state and local actors. With new legislation pending in the Senate, the future of hydrofracking activities is currently uncertain.

 

- Christina Bonanni is a General Member on MJEAL. She can be reached at cdbon@umich.edu

 


[i] Hydraulic Fracturing (Hydrofracking), Pace Law Library, http://libraryguides.law.pace.edu/content.php?pid=227170&sid=1880060 (last visited April 1, 2014).

[ii] Id.

[iii] Goldfarb, Ben, Hydrofracking Poses Serious Risks to Human Health, PolicyMic, December 22, 2011, http://www.policymic.com/articles/2985/hydrofracking-poses-serious-risks-to-human-health.

[iv] Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, U.S. Environmental Protection Agency, EPA/600/R-11/122. http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/FINAL-STUDY-PLAN-HF_Web_2.pdf (November 2011).

[v] Supra, note ii.

[vi] Supra, note iv.

[vii] Supra, note iii.

[viii] Id.

[ix] John R. Nolon and Steven E. Gavin, Symposium: The Law and Policy of Hydraulic Fracturing: Addressing the Issues of the Natural Gas Boom, 63 Case W. Res. 995 (2013).

[x] Id.

[xi] Id.

[xii] 42 U.S.C. § § 300f-300j-26.

[xiii] Supra, note iv.

[xiv] Id.

[xv] Id.

[xvi] Id.; H.R. 1084, 112th Congress. (2011).

[xvii] s.1135: FRAC Act, https://www.govtrack.us/congress/bills/113/s1135 (last visited April 1, 2014).

[xviii] 33 U.S.C. § § 1251-1387 (2006).

[xix] Id.

[xx] Supra, note viii.

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China’s “War Against Pollution”

Environmental protection will be a hot topic at this year’s annual session of the National People’s Congress (NPC) of China. Premier Li Keqiang’s government work report, given at the opening of the NPC on March 5, 2014, listed nine “Major Tasks for 2014,” including the goal of “building China into a beautiful homeland with a sound ecological environment.”[1] To that end, Li has “declare[d] war against pollution.”[2] NPC Chairman, Zhang Dejiang, echoed Li’s proclamation, informing delegates, “We will revise the Environmental Protection Law and the Air Pollution and Control Law to improve environmental protection and management so that emissions of all pollutants are strictly supervised.”[3]

Improving the environment is consistent with the goals in China’s 12th Five Year Plan (2011-2015).[4] And legislation is one of the major solutions to China’s environmental problems. As China enters into the fourth year the Plan, the public will be watching the NPC closely to see whether progress toward the goal will be made, particularly in regard to decreasing air pollution.

Air pollution in China has been a major concern, both on a national and international level. China is home to 16 of the world’s twenty most polluted cities and produces a third of the greenhouse gas output on Earth.[5] According to a report by the Asian Development Bank, a mere 1% of China’s 500 largest cities were able to meet the World Health Organization’s air quality standards in 2012.[6]

February 25, 2014 marked the sixth consecutive day that Beijing’s air quality index met the “hazardous” level, according to the U.S. Embassy.[7] Pollution levels reached “501 micrograms per cubic meter, well above the World Health Organization’s safe limit of 25.”[8] Smog consistently engulfed many cities in China due to staggering levels of pollution, leading a professor at China Agricultural University to declare a “nuclear winter,”[9] while others are referencing an “airpocalypse.”[10]

Meanwhile, public discontent within China has been increasing. In a historic move in February 2014, Li Guixin, a resident of Shijiazhuang, the capital of Hebei, became the first citizen to bring suit against the government for “failing to curb air pollution” in accordance with the law.[11] Li claims he was unable to participate in outdoor activities this winter due to the horrendous atmospheric conditions,[12] and seeks $1,600 in damages from the Shijiazhuang Municipal Environmental Protection Bureau.[13] However, while Article 26 of China’s Constitution indicates a governmental interest in protecting the environment, the Constitution does not entitle individual citizens to a specific environmental right.[14] It is therefore uncertain whether the court will even entertain Li’s lawsuit.[15] Nonetheless, the bold action has drawn further attention to the government’s policies and spurred greater scrutiny of existing laws and their execution.

The pollution in China also has a global effect, and regularly contributes to the air quality problems in countries such as the United States. According to a study done in 2006, “On a daily basis, the export-related Chinese pollution contributed, at a maximum, 12-24% of sulfate concentrations over the western United States.”[16] Despite the efforts of countries like the U.S. to curb its own pollution, without reform, and as the world’s largest emitter of greenhouse gases, China has the potential to wreck further havoc not only to its own environment, but to the environments of other countries as well.[17]

However, potential solutions to China’s air pollution do exist. Allowing for and strengthening responses the laws may result in improved air quality. In the U.S., citizen groups have been successful in achieving changes in law and policy. If citizens in China were allowed to bring action against the government, as Li Guixin has done, perhaps the government would be held more responsible for its actions or inactions in the area of environmental protection.

In addition, some have suggested that judicial and executive responses could be held under stricter scrutiny.[18] The judiciary, economically dependent on local government and wrought with corruption and pressures to ignore the law, is not as accountable as it should be in upholding the laws.[19] Moreover, as the allegations by Li Guixin highlight, perhaps the enforcement of environmental laws by local officials could be more stringent and regulated by more oversight.[20]

A major solution is through the amendment of the existing environmental protection law in China. The speeches given on the opening day of the NPC session would appear to indicate the government’s apparent commitment to making this a top priority. This year, the Ministry of Environmental Protection is expected to propose an “Air Pollution Prevention Law” for review.[21] The current draft imposes fines on local governments for failing to meet targets for air pollution reduction.[22] If the threat of harsh sanctions is effective, perhaps citizens such as Li Guixin will not have to resort to taking independent actions against the government to improve the air quality.

In addition, individual citizens of China could be held to higher standards through legislation. Although factories and plants are major contributors to the smog, Chinese citizens each add to the pollution through their energy and consumption habits, as well as their selected methods of transportation. In the absence of established laws and policies, individual citizens have the opportunity to recognize problems and make their own decisions on whether and how to take independent steps toward a solution. But perhaps self-monitoring and individual initiatives to reduce air pollution are not possible without the threat of legal ramifications.

And although the government is responsible for creating and amending China’s environmental laws and regulations, perhaps there are other parties, such as foreign purchasers, who could share responsibility for China’s predicament. Questions have been raised as to what extent China should be held accountable for its air pollution as compared to countries to which China exports goods.[23] For example, a study in 2006 found that “36% of anthropogenic sulfur dioxide, 27% of nitrogen oxides, 22% of carbon monoxide, and 17% of black carbon emitted in China were associated with production of goods for export… About 21% of export-related emissions [of each pollutant] were attributed to China-to-US export.”[24] So even though Chinese factories and plants are at fault for the harmful emissions, other countries and corporations in those foreign countries have in a way encouraged China’s increase in pollution: either indirectly by demanding more products from China or directly by moving their production of goods overseas to China.

Officials have claimed that the “war on pollution” will be waged during this year’s annual session of the NPC. But it remains to be seen whether the Environmental Protection Law and the Air Pollution and Control Law will be amended or if any new laws will be approved. Both in China and abroad, the public will be watching the government’s actions carefully, in the hopes that its effects will drastically reduce, or at least curb, the current condition of air pollution. However, to have the greatest impact on improving its air quality, China must look not only to legislative solutions, but also to improving executive and judicial responses to the laws and policies, as well as potentially holding other parties, such other countries and their corporations, responsible for the problem.

 

-Dayna Chikamoto is a General Member on MJEAL. She can be reached at dchikam@umich.edu.



[1] Didi Kirsten Tatlow, China Declares “War Against Pollution”, N.Y. Times, Mar. 5, 2014, http://sinosphere.blogs.nytimes.com/2014/03/05/china-declares-war-against-pollution/?_php=true&_type=blogs&_php=true&_%20type=blogs%20&ref=environment&_r=1.

[2] Id.

[3] Zhang Hong, Pollution and Food Safety to Top Legal Agenda This Year, Zhang Deijang Tells NPC Delegates, South China Morning Post, http://www.scmp.com/news/china/article/1444270/pollution-and-food-safety-top-legal-agenda-year-zhang-dejiang-tells-npc (last updated Mar. 10, 2014).

[4] David Stanway, Water, CO2 the Priorities for China’s 5-year Plan, Reuters, Mar. 3, 2011, http://www.reuters.com/article/2011/03/03/us-china-environment-idUSTRE72214Y20110303.

[5] Beina Xu, China’s Environmental Crisis, Council on Foreign Relations, http://www.cfr.org/china/chinas-environmental-crisis/p12608 (last visited Mar. 18, 2014).

[6] Id.

[7] Julia Makinen, Toxic Smog Hangs Over Large Swarth of China but Many Ignore Threat, L.A. Times, Feb. 25, 2014, http://www.latimes.com/world/worldnow/la-fg-wn-china-air-pollution-20140225,0,2798618.story?page=%201#axzz2vbxZUMPS.

[8] Sean Breslin, China’s Smog Continues to Worsen; Now Being Called a ‘Nuclear Winter’, The Weather Channel, http://www.weather.com/news/science/environment/beijing-china-dangerous-smog-20140227 (last visited Mar. 18, 2014).

[9] Breslin, supra note 8.

[10] Xu, supra note 5.

[11] Sui-Lee Wee, Chinese Man Becomes First to Sue Government Over Severe Smog, Reuters, Feb. 25, 2014, http://www.reuters.com/article/2014/02/25/us-china-pollution-idUSBREA1J18E20140225.

[12] Id.

[13] Makinen, supra note 7.

[14] Ying Shen, Combating Climate Change: China’s Efforts on Environmental Legislation, The Envtl. L. Rep., http://elr.info/news-analysis/44/10153/combating-climate-change-china’s-efforts-environmental-legislation (last visited Mar. 18, 2014).

[15] Wee, supra note 11.

[16] Jintai Lin et al., China’s International Trade and Air Pollution in the United States, Proceedings of the National Academy of Sciences of the United States of America (Jan. 21, 2014), http://www.pnas.org/content/early/2014/01/16/1312860111.full.pdf.

[17] Xu, supra note 5.

[18] Shen, supra note 14.

[19] Id.

[20] Id.

[21] Michael Standaert, China Outlines Environmental Action in ‘War’ on Air, Water and Soil Pollution, Bloomberg BNA, http://www.bna.com/china-outlines-environmental-n17179882762/ (last visited Mar. 18, 2014).

[22] Id.

[23] Lin et al., supra note 16.

[24] Id.

 

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Michigan’s “Very Serious Consequences” Test: Zoning Standards and Natural Resource Extraction

In Lyndon Township, a major dispute is brewing between McCoig Materials, Inc. (McCoig) and concerned community members over a proposed gravel mine.  Located in the northwest corner of Washtenaw County, Lyndon Township is a rural community with a small population (2,720), few businesses, and abundant nature areas. The proposed mine location near the junction of M-52 and Territorial Road falls on land that abuts county-owned Park Lyndon and 20,500-acre Waterloo-Pinckney Recreation Area, a state-owned network of forests, lakes, and trails that is a recreational destination for outdoor enthusiasts.

McCoig has applied for a permit to operate a Mineral Mining Operation (MMO), including a variance request that would enable them to operate a gravel mine on land zoned as rural-residential.[1] In compliance with Lyndon Township’s Zoning ordinance[2] and Ordinance 21[3], a specialized ordinance that regulates the extraction of sand gravel and other earthen materials, McCoig provided the following documents: A hydrological review, environmental assessment, endangered species report, spill prevention control and containment plan, and a preliminary hauling route from the mine to US-94.[4]

The proposed gravel mine raises an array of environmental, safety, health, and economic concerns that have mobilized local residents to collectively take action to “Deny the Mine”.[5] On March 13th, a public meeting soliciting community perspectives drew around 500 people. The crowd of opposition included Jeff Daniels, Hollywood actor and resident of the nearby town of Chelsea, and multiple scientists and lawyers who are contributing their time and expertise pro bono.[6]

The legal side of this local dispute is fascinating, confusing, and unsettled. In 2006, the State legislature passed the Michigan Zoning Enabling Act (Public Act 110). The 2006 Act was silent as to what standard of review planning commissions should utilize when evaluating zoning requests that concern natural resource extraction.  However, common law had an established standard from Silva v. Ada Township, a 1982 Michigan Supreme Court case.[7] Silva established a “very serious consequences” test as the “standard for determining the validity of zoning which prevents the extraction of natural resources.”[8]

All zoning must bear a “direct and substantial relation to the . . . public health, safety, morals, and general welfare, or the community as a whole.”[9] In order to comply with this mandate and substantive due process, courts have construed that a zoning ordinance must be reasonable. Silva held that when a zoning law affects one’s ability to mine valuable natural resources, the “very serious consequences” rule must be applied to determine the ordinance’s reasonableness. The “very serious consequences” test established a presumption in favor of resources extraction- any zoning that prevents natural resources extraction is invalid unless very serious consequences would ensue.[10]

The Silva court reasoned that “preventing the extraction of natural resources harms the interest of the public. . . by making natural resources more expensive”.[11]  Since the cost of natural resources is largely dictated by transportation costs, a mine location proximately located to the extracted resource’s destination  lowers the (transportation and thus) production costs of the resource, which translates into a public interest- a lower price for the resource on the marketplace. Taken in aggregate, Silva establishes a two-prong test: (1) a subjective test where “the landowner must show that by extracting the resource he or she can reasonably hope to operate at a personal profit,” and (2) a balancing test where the degree of public demand for the resource extracted is compared to the consequences to the community.[12] In effect, the “very serious consequences” test elevates a generalized public interest in inexpensive natural resources over all other conceivable interests that may be particular to local communities.[13]

In 2010, the Michigan Supreme Court overruled Silva, holding in Kyser v. Township that the “very serious consequences” test violated separation of powers and was preempted by the Michigan Zoning Enabling Act (2006).[14] The court found that the test impinged on separation of powers because zoning is a constitutionally-mandated legislative function.[15] The effect of very serious consequences was that the court, not a legislative body, created state-wide public policy; “Michigan’s constitution directs the legislature, not the judiciary, to provide for the protection and management of the state’s natural resources.”[16] Additionally, the court interpreted that the legislative intent of the zoning enabling act was to empower local government to regulate land use, including the review process for natural resource extraction.[17] The court determined that the legislature did not intend for natural resource extraction to have a presumption of validity unless “very serious consequences” would occur.[18]

The Kyser court questioned the validity of two underlying premises of the serious consequences rule to come to that conclusion: (1) that natural resource extraction is preferred to other types of land use, and (2) that the public is always harmed by preventing the extraction of natural resources.

In direct response to Kyser, the state legislature amended Section 205 (which previously had no mention of natural resource extraction) of the Michigan Zoning Enabling Act by passing Public Act 113 (2011).  The act codified the “very serious consequences” test from Silva and added six considerations to help determine whether very serious consequences will result from mineral extraction.[19]

  1. The relationship of extraction and associated activities with existing land uses
  2. The impact on existing land uses in the vicinity of the property
  3. The impact on property values in the vicinity of the property and along the proposed hauling route serving the property, based on credible evidence
  4. The impact on pedestrian and traffic safety in the vicinity of the property and along the proposed hauling route serving the property
  5. The impact on other identifiable health, safety, and welfare interests in the local unit of government
  6. The overall public interest in the extraction of the specific natural resources on the property.

McCoig’s proposal is currently under consideration by the township planning commission and a date for a vote has not yet been set. The planning commission faces mounting pressure from both sides and a considerable fear of getting sued by McCoig if they deny the zoning request and MMO. The front page of Lyndon Township’s website contains the following disclaimer: “Please understand that the township’s authority to regulate MMO’s is very limited.”  Michigan State Legislators have greatly reduced township control by passed Act 110 of 2006.”[20] In the fiscal year ending on June 30, 2013, Lyndon Township drew in just $716,447 in revenue.[21] Lacking both the financial or personnel resources of McCoig, Lyndon is hoping to avoid a litigation from either side.

Regardless of whether Lyndon Township decides grant or deny McCoig’s proposal, the losing side will likely file a lawsuit. I believe that factually, a strong case can be made that the mine would have very serious consequences on Lyndon Township and neighboring Chelsea. Joel Blum, a University of Michigan Professor of Earth and Environmental Science questioned the thoroughness of McCoig’s hydrological report. He raises the concern that mining activities, which would convert the highest elevation point in Washtenaw County into a 50-foot lake, could contaminate wells in the surrounding area through facilitating the release of arsenic into the groundwater.[22] Additionally, at the March 13th public meeting, the thoroughness and veracity of McCoig’s endangered species report was challenged.[23]

From a safety and economic perspective, McCoig’s proposed hauling route is particularly troublesome. Each day, the gravel mine is expected to fill eighty truckloads that will travel to I-94 via M-52, passing straight through Chelsea’s quaint downtown. Chelsea residents and business owners have voiced concerns about traffic congestion, pedestrian safety, smells and debris, and a harmful impact on business revenue and property values. The culmination of environmental, health, safety and economic impacts strongly indicate that the McCoig mine poses very serious consequences to Lyndon Township and the city of Chelsea.

With Lyndon Township’s vote date not set, the timetable for this dispute is unclear. Stay tune to local media for ongoing coverage of this dispute!

 

-Hazel Blum is a General Member on MJEAL. She can be reached at hblum@umich.edu.



[1] Residents express concern over proposed storage facility in Lyndon Township, Lisa Allmendinger, http://www.twplyndon.org/Documents/attachments_2010_12_06/Chapter%205%20-%20R-R%20Rural%20Residential%20District.pdf.

[5] “Deny the Mine” is a slogan displayed on lawn signs around Lyndon Township.

[6] Jeff Daniels joins nearly 500 residents opposing new sand mine near Chelsea, Ben Freed, http://www.mlive.com/news/ann-arbor/index.ssf/2014/03/jeff_daniels_joins_about_500_r.html.

[7] Silva v. Ada Twp., 330 N.W.2d 663 (1982).

[8] Silva at 664.

[9] Alderton v. City of Saginaw, 116 N.W.2d 52, 55-6 (1962).

[10] Ryan (Dissenting), Silvia at 668.

[11] Silva at 666.

[13] See supra, note 10.

[14] Kyser v. Twp., 786 N.W.2d 543 (2010).

[15] Id at 556.

[16] Id.

[17] Id. at 559.

[18] Id. at 560.

[20] Supra, note 4.

[21] Township of Lynson, Report on Audit of Financial Statements, http://www.michigan.gov/documents/treasury/811080LyndonTwp20131220_443707_7.pdf.

[22] Supra, note 6 (Additionally, I must disclose that Joel Blum is my father and I have spoken to him about the issue).

[23] Very generalized questions were raised about thoroughness of the endangered species report. The report concluded that the proposed area of vegetation removal is not critical habitat for local endangered and threatened species. The report can be found at http://www.twp-lyndon.org/Documents/Appendix%20B.2%20%20Threatened%20and%20Endangered%20Species%20Report.pdf.

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Wealth, Enjoyment, and How Our Society Measures Success

Cost-Benefit Analysis (CBA) has been a mainstay of the regulatory state since the Reagan administration issued Executive Order 12,291 in 1981. Despite vigorous criticism, the CBA policy first introduced by Reagan has remained largely untouched by subsequent administrations.[i] Most recently President Obama issued his own Executive Order, reaffirming CBA practices under his administration. While CBA is the standard tool used for evaluating new regulations, many scholars have proposed alternative methods that they claim to be preferable to CBA.[ii] Recently John Bronsteen, Christopher Buccafusco, and Jonathan S. Masur proposed one such alternative to CBA: Well-Being Analysis (WBA). Although WBA claims to use the power of social psychology to innovate the tools available for regulators, it falls short of being the answer to the CBA problem.

Cost-benefit analysis provides regulators with a convenient tool to weigh the benefits of a new regulation against its burdens. This analysis is made particularly salient because CBA allows all costs and benefits to be measured with the same dollar metric. Basically, CBA weighs a person’s willingness to pay for a benefit of a new policy against his or her willingness to accept burdens introduced by a new regulation. Once dollar amounts are assigned to the benefits and costs of a regulation, regulators can easily quantify the net benefit of a proposed regulation.[iii]

Without a crystal ball, regulators must rely on CBA to determine if a proposed regulation is worthwhile. As a tool, CBA is easy to administer and provides a concrete way to measure the value of a regulation. CBA provides a one-size-fits-all approach for analyzing every sort of agency regulation; in this way, CBA acts as quality control among agencies, ensuring that any and all regulation analysis is conducted uniformly. CBA therefore creates a sort of scientific standardization in agency activity. The consistency and quality control offered by CBA also allows agencies to be transparent. The uniform application of CBA allows outsiders to understand exactly how a potential new regulation is being evaluated.

Although CBA is standard practice for regulators, it has consistently been criticized. CBA is primarily an economic tool, which many critics find incompatible with what CBA attempts to quantify. For example, CBA requires a dollar amount to be placed not only on human health but also on the value of a human life. Many critics have bemoaned that placing a dollar amount on things like human life is morally suspect and scientifically haphazard. “A particular life may have one value to the individual, another to his or her family, and still another to society at large.”[iv]

The consistent and vocal criticism of CBA has led many theorists to propose alternatives to CBA. Recently, Bronsteen et al, proposed well-being analysis (WBA) as a viable replacement for CBA. WBA heavily relies on hedonic psychology, which examines how individuals experience enjoyment in life. Instead of focusing on CBA’s willingness to pay vs. willingness to accept, WBA measures how much more or less a person would enjoy their life due to the effects of a regulation. “WBA simply adds up the positive experiences of life that individuals stand to lose or gain under a given project.”[v] WBA proponents argue that with advancements in hedonic psychology, a person’s enjoyment of positive experiences can be quantified into well-being units. They further argue that data about sense of well-being can be accumulated and analyzed with more or less the same, if not better, accuracy and efficiency as CBA.[vi]  Ultimately, WBA proponents argue that WBA presents the same benefits as CBA, but avoids CBA’s pitfalls introduced by wealth and monetization metrics.[vii]

Although WBA perhaps offers an alternative to CBA, it seems WBA is susceptible to many of the same criticisms as CBA. While WBA uses well-being units as a metric instead of dollars, it is unclear if well-being is in fact a better measure than money. Despite the change in metric units, the criticism that some things simply can’t be quantified remains. Additionally in some ways, enjoyment seems as superficial a measure as buying power. Intriguingly, WBA proponents note that increases/decreases in wealth are logarithmically proportional to a person’s increased sense of satisfaction.[viii] The link between wealth and enjoyments perhaps demonstrates that well-being and wealth have more in common than WBA would care to admit. Mainly, wealth and enjoyment are both transient measures of success that can vary over time. And in some sense, both wealth and enjoyment can only minimally represent a policy’s or a society’s success.

Generally speaking, WBA and CBA share a common foundation. CBA has been largely criticized as being misguided by placing a dollar amount on invaluable things, like human life. While WBA does not place a dollar amount on human life, it does place a number on it, albeit a number representing wellness units. By using superficial measures and building on the same foundation of systematic quantification, it seems that WBA and CBA share much in common.

In many respects, the commonalities between WBA and CBA allow WBA to be a good alternative to CBA. While WBA can offer a familiar type of analysis for regulators, it also shares many of CBA’s advantages. And, WBA proponents argue, WBA is a more sensitive tool that can better measure the effects of regulations.[ix] Ultimately, WBA advocates urge that the data provided by WBA and/or CBA are mere starting points for regulators.[x] They infer that it is the job of ultimate policy makers (assumingly the executive and legislative branches) to ensure that justice, fairness, and human dignity are considered.[xi] But this regulatory scheme depicts a regulatory state where the ends justify the means. It would perhaps be better to have an analytical regulatory tool that reflects our society’s normative values of justice, fairness, and equality.

While WBA presents an interesting development in the cost-benefit analysis debate, it is unclear how novel an approach it really is. WBA’s similarities to CBA make it an alluring analytical method. But its resemblance to CBA also suggests that WBA may not be a true alternative to CBA. Ultimately, the debate over CBA and the development of WBA would benefit from a candid evaluation of the normative values that animate U.S. law and regulation, in the hopes that one day, our regulators’ analytical methods are consistent with the ideals our society strives toward.

 

-Jessica L. Shaffer is a General Member of MJEAL. She can be reached at shjess@umich.edu

 



[i] Helen G. Boutrous, Regulatory Review in the Obama Administration: Cost-Benefit Analysis for Everyone, 62 Admin L Rev 243, 248 (2010). See also Michael A. Livermore, Can Cost-Benefit Analysis of Environmental Policy Go Global?, 19 NYU Envtl LJ 146, 151 (2011).

[ii] Michael A. Livermore, Can Cost-Benefit Analysis of Environmental Policy Go Global?, 19 NYU Envtl LJ 146, 163 (2011).

[iii] Michael A. Livermore, Can Cost-Benefit Analysis of Environmental Policy Go Global?, 19 NYU Envtl LJ 146, 161-63 (2011).

[iv] W. Kip Viscusi. Fatal Trade Offs. 17-19 (1992).

[v] John Bronsteen et. al., Well-Being Analysis vs. Cost-Benefit Analysis, 62 Duke LJ 1603, 1645 (2013).

[vi] Id. at 1664.

[vii] Id. at 1645.

[viii] Id. at 1640.

[ix] Id.

[x] Id at 1640.

[xi] Id. at 1616. See also, Exec. Order No. 13,563, 3 C.F.R. 215 (2012).

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