Becker's Iowa Environmental Law Update : Iowa Environmental Lawyer & Attorney : Charles Becker : Belin McCormick P.C. Law Firm : IA Regulatory Compliance, Site Cleanups

The principle of "polluter pays" for environmental contamination and the activity of land development have always been uneasy bedfellows.  The most recent example of a sleepless night can be found in the New Jersey federal district court case of Bonnieview Homeowner’s Association v. Woodmont Builders, LLC.  In a foreshadowing of things to come, Judge Deberoise’s opening line, in that case says:

This matter involves a dispute over the environmental contamination of an area of land in Montville, New Jersey, where a fruit orchard was operated in the mid-twentieth century and which was later developed into a residential neighborhood.

There is not a single well-read developer that doesn’t understand that by the end of the opinion, this is a tragedy of epic proportions.

The facts of Bonnieview HOA are the ones that every developer fears. A seemingly innocuous parcel of ground is ripe for development in the lovely city of Montville, New Jersey. At some point in the past, the property had been an apple orchard, though a Phase I Environmental Site Assessment failed to note that the orchards may have used pesticides which may have contaminated the soils.

The developer of the site, in an effort to provide the finest of “natural homesites” with a “great place to raise children” removed the topsoil from the site, stockpiled it, built the homes and returned the topsoil to the site for the lawns. No testing of the soils was done before or during the process, but, as luck (and tragedy) would have it, the soils were heavily contaminated with metals and pesticides.

The Plaintiff homeowner’s association, after discovering the facts, brought action against the developers and others contending that:

[B]y clearing the topsoil, stockpiling it, then spreading it over the Residential Lots, the Defendants caused the pesticide contamination to spread “ubiquitously across the Residential Lots” and into areas previously not contaminated, and to be extended from the surface into the subsurface soil.

Liability under CERCLA, the federal statute that requires cleanup of contaminated property, for a person operating on the property (such as a developer) requires that the operations occur at a time during which there was a disposal of a hazardous substance. In this case, there was no question that the pesticides in the soil constituted a hazardous substance. The open question was whether the mere movement of the previously contaminated soils constituted “disposal.” The Court conducted an analysis of the case law and found:

Woodmont Builders’ movement of the contaminated soils on the Residential Lots may be considered a “disposal” under CERCLA.

Ironically, the members of the Plaintiff homeowner’s association that had moved soils to put in swimming pools, driveways, etc. were also found to be liable for response costs.

It is important to note that the Court acknowledged that the developers were not liable as arrangers (due to the recent holding of Burlington Northern Railroad) but found that the developers were liable based on operator liability, which does not require knowledge of the presence of a contaminant for liability to be imposed.

There are several other interesting aspects of the case, but the fact that a developer (or a homeowner) who moves around soil that turns out to be contaminated can be responsible for response costs is the most problematic. Environmental attorneys who practice in the area of CERCLA are not particularly surprised at the outcome, but I haven't met a developer yet who isn't shocked.  It is yet another instance where the “polluter pays” principle means (tragically) very little.

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                             The SCARLETT Letter of Operator Liability
 

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On October 16, 2009, EPA drew a line in the sand regarding mountaintop mining. With regard to the Spruce No. 1 Service Mine Permit located in Logan County, West Virginia, EPA informed Arch Coal, Inc. that it was beginning the process that could result in the rescission of its Clean Water Act permit.  Although the mine had a validly-issued permit from the Corps of Engineers, EPA believes that it has broad authority to veto the Corps' issued permit if it finds that serious water quality damage may occur and that there are methods to avoid such damage.   In the words of William Early, the acting regional administrator for EPA in Region III:

We recognize the issued permit contains several provisions that may be intended to address water quality and mitigation based upon information and data available at the time [of the issuance of the Clean Water Act Section 404 permit]. However, in light of new data and information since permit issuance, EPA remains concerned with much of the analysis set forth in your letter, particularly as it relates to the potential for adverse water quality impacts, further avoidance and minimization measures, the potential for accumulative impacts, and identification and enforceability of success criteria for mitigation.

Mr. Early’s concern, as stated in the letter, is that the operation of the mine “may result in unacceptable adverse impacts to fish and wildlife resources.” He noted that the project allows for the construction of six valley fills for placement of excess spoil material generated through the surface coal mining activities and that there were only minimally acceptable methods to minimize impacts to aquatic resources. In EPA’s view, “there is the potential for [the mine’s] associated discharges to cause further stream degradation.” Early also noted that the existing permit fails to contain adequate measures to mitigate environmental damage and does not set out what procedure would be appropriate if water-quality impacts would happen to occur.

The action of EPA is notable in several respects:

• It is the first time that EPA has threatened to rescind a permit for a project that had been previously authorized.
• Since 1989, only one other project has received a Section 404(c) veto from EPA.
• Prior to 1989, a total of eleven projects have received a veto, none of which involved mining.

Additionally, it is interesting to note that EPA's review is purportedly based on "new data and information since permit issuance,"  a process that took almost ten years.  Some might wonder wherther it is new evidence or a new administration that is driving the review and, if it is the latter, what impact will it have on business to know that the fundamental rules of the game (such as revoking already issued permits) can be changed every four or eight years? 

Though environmentalists may look on the EPA action as an indicator that the EPA under Obama is going to be much more aggressive against mountaintop mining, perhaps this is not really the best test case for that proposition. This site was, after all, one of the very few sites that even the Bush-era EPA was reluctant to give a glowing review. In June of 2006, during the comment period for the permit for the Spruce Mine, the site received a ranking of “EC-2,” which equates to “Environmental Concerns and Insufficient Information.”  Further, in its statement, EPA "emphasizes that the Spruce No. 1 represents an unusual set of circumstances we do not expect to be repeated again."

While it is a significant first step, what action is taken by this EPA for the remaining seventy-eight mountaintop mining permits will be much more telling.

RELATED POST:  Switchback Regulation and Mountaintop Mining: The Wrong Path?
 

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There is a global-warming parade going on and everyone seems to want to join in.  Well, not everyone.  The U.S. Chamber of Commerce has staked out its position that the assertion that global warming is harmful to human health is something that should not simply be assumed, but should be proven, before trillions of dollars are spent “fixing” it. Not an irrational position, but one which has caused five large companies to pull their support for the Chamber, the most visible being Nike and Apple. The question that should be asked is why -- why have the companies chosen to walk away from the Chamber?

Someone Else Is Better?

It certainly couldn’t be that they will be better represented by some other lobbying group. The U.S. Chamber of Commerce spent $26 million in lobbying in 2009, which is double any other single entity. Historically, the Chamber has had, and spent, a lot of money and has been effective in Washington, D.C.

Difference of Opinion?

Could it be that these companies philosophically disagree with the Chamber and are willing to cut off their nose to spite their face? Well, Catherine Novell (V.P. of Worldwide Government Affairs at Apple) did say:

We strongly object to the Chamber’s recent comments opposing the EPA’s effort to limit greenhouse gases. . . .  Apple supports regulating greenhouse gas emissions, and it is frustrating to find the Chamber at odds with us in this effort.

Nike, who relinquished its Chamber board seat but has not yet quit the group, said:

We believe that on this issue of climate change, the Chamber has not represented the diversity of perspective held by the board of directors.

General Electric and Johnson and Johnson have also issued statements that they disagree with the Chamber’s climate policy.

Certainly these companies, with their collective millions of shareholders, might choose to walk away from a $26 million lobbying force based on principle and righteous indignation. That’s possible. But perhaps something else is at work.

That's Where The Money Is?

Another possible explanation might be that they are doing what all companies strive to do — they are trying to sell their products to the greatest possible number of consumers. Perhaps these huge, market savvy companies believe that their customers believe that climate change is a fact that does not need debating and that these customers just might be offended by any one (or any company) that thinks otherwise. These companies have seen what happens when a company appears to be anti-environment, and it simply isn’t worth the risk. Of course, the Chamber doesn’t sell shoes or computers or contact lenses so they don’t need to worry about what the consumer might believe. But the Apples of this world do.

Ironically, environmentalists couldn't have a better friend than the Chamber right now.  With each vocal defection, the inevitability of climate change legislation grows a little closer.

I’ve said it before: "An Inconvenient Truth" gave global-warming advocates a free pass. The parade of environmental reform has started and the huge elephant that is public opinion has already lumbered past the question of whether there is global warming and whether it is bad for us and has moved on to the question of what could be the cure. Right or wrong, it is too late to turn the elephant (or the donkey) around. Apple, Nike and P&G recognize this fact. One has to wonder if the Chamber will accept it and realize that the only way to affect the parade is to get in front of the elephant.

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                             The Most Important Environmental Law Case                  

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When discussing global warming and attempting to calculate greenhouse gas (GHG) emissions, a fact that is frequently overlooked is that energy use is a zero-sum game. That is, most forms of machinery require an input of energy. It can be electricity for a toaster, a gas flame in a furnace or gasoline into a car. Frequently, you can change the form of the energy, say by switching from a gas furnace to an electric furnace, but you still need to produce the energy to run the furnace. If producing the electrical energy to run the furnace produces more GHGs than running the furnace on gas, then you haven’t gained anything for the GHG environment.
 

In a recent post, I said that the plug-in or all-electric car might save the world based on the fact that it has zero GHG emissions and that we have now reached the tipping point for electric cars because they are fast enough to be credible.  A concerned reader pointed out  that I had "forgotten the basic fact that all-electric cars require ELECTRICITY" and that we will "simply trade one evil for another."  My response?  In the words of  Pat Paulson, “Picky, picky, picky.”  Well, OK, maybe the point needs to be addressed.

So, do plug-in or all-electric cars have a net positive effect on reducing GHGs emissions?  Let me suggest five reasons for the answer being yes.

1. Tesla Says So

Elon Musk, the chairman of Tesla Motors, provides an analysis of how his all-electric car compares to other vehicles, assuming that the electricity is produced via natural gas fueled electrical generation. According to his analysis, the natural gas CO2 emissions in power plant production are one-quarter of the Honda Hy-brid CNG. In essence, a car engine is not nearly as efficient (at least with respect to GHG production) at creating energy as is a power station that produces electricity. I realize that he is biased, but his reasoning seems plausible.

2. Others Say So

Musk isn't alone.  The calculations are that even if the electricity is generated by coal-fired plants, the GHG reductions would be 50%.  In combination with the other advantages of the elimination of pollutants and elimination of oil dependence, that's pretty good.

 3. Wind And Solar Are Coming

Additions to coal-fired electrical generation are here and  growing. Cap-and-trade will force it. International politics will force it. Environmentalists will force it.  And for every kilowatt of electricity produced by wind or solar, the benefit of the all-electric car multiplies.

Advances are also being made in the storage of solar and wind energy through, for example, compressed air storage and improvements in batteries.

4. Action Is Already Being Taken

The ability to have a practical energy delivery system is more than just theoretical. Solar installer Solar City has built  four solar electric-car charging stations along U.S. Route 101 between San Francisco and Los Angeles. Fully charging the Tesla, which has a range of 250 miles, costs about $4.

5. What's The Down Side?

There appears to be no feasible argument that the stand-alone, gas powered engine of every car could possibly be better for the GHG environment than an engine that is electrically powered.  Even if it is a break-even scenario (which isn't supported by the facts), why would anyone be against the all-electric car?  It will always be easier to increase electrical generation at a power plant than it will be to make adjustments to every gas engine.

Now that the electric car has shown that it is more than a glorified golf cart, it is on its way.  And all indications are that it will be a significant net reduction for GHG emissions.  If so, it will be interesting to see what impact it has on the need for extensive and expensive environmental regulation.

RELATED POST: Global Warming and Fast Cars -- A Perfect Match
 

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