The New York State Budget (FY 2014/2015): How Did the Environment Fare?
Posted on May 23, 2014 by Gail Port
Recently, Governor Cuomo and the NY State Legislative leaders struck a $140 billion budget deal for FY 2014-2015. Historically, the budget process in New York is messy (sometimes very messy), protracted (with the budget often being late, sometimes very late) and largely plays out behind-the-scenes among the "three men in the room" (Governor Cuomo, Speaker Silver and Senate Co-Leader Dean Skelos). Nevertheless, the FY 2014/2015 budget was passed on time this year and without too much background noise.
How did the environment fare you ask? That might depend on who you ask. Parks advocates were declaring victory and applauding the infusion of $92.5 million in park capital funds, (which the State Senate initially had rejected) for repairs and restoration at New York's state parks and historic sites. This is the third year of robust capital funding for parks after several years of severe cuts in parks funding, although Park state officials had identified more than $1 billion of required park rehabilitation projects across the state. On the environmental front, notwithstanding some modest successes in the budget process, the environmental community largely believes the new budget falls short when it comes to protecting the environment, making New York more sustainable and preparing New Yorkers for the challenges of climate change. Moreover, many of the so-called advocacy successes were, in reality, merely successful efforts to beat down some pretty bad ideas.
1. The Environmental Protection Fund (the "EPF"): The EPF was established in 1993 to fund environmental projects that protect the NYS environment and enhance communities, including in the areas of open space (such as purchasing land for the NYS Forest Preserve), parks, recreation, historic preservation and restoration, habitat restoration, farmland conservation and solid waste management (including upgrading of municipal sewage treatment plants). The EPF, which once stood at $255 million but suffered deep cuts during the recession when it was raided to support the State's General Fund, was increased in the FY 2014/2015 budget to $162 million, a $9 million increase over last year's funding level, continuing the progress toward restoring the EPF. The environmental community had sought an increase to $200 million.
2. Brownfields Clean-up Program: No consensus was reached among the Assembly, Senate and Governor during the budget process on the needed reforms to the Brownfield Clean-up Program ("BCP") and extension of the BCP tax credits deadline. Unless the Legislature and Governor can agree on a bill before the end of the legislative session in mid-June, the program will expire at the end of 2015. Negotiations are continuing on a compromise bill and there are at least 4 competing proposals currently on the table.
3. Reauthorization of the State Superfund Program: The budget agreement did not include new funding for the State's Superfund program. It is hoped that this issue will be taken up along with a BCP bill and funding.
4. Clean Energy: Proposals from the Assembly and Senate to divert to the General Fund up to $218 million from the New York State Energy Research and Development Authority ("NYSERDA") budget, which supports clean energy projects, energy-related job creation and greenhouse gas emissions reduction, were defeated.
5. Pesticides: The Governor had proposed to significantly gut the Pesticide Sales and Use Reporting Law. The Senate refused to go along with the Governor's proposals, whereas the Assembly proposed to modernize the law. No consensus was reached so the law remains in effect.
6. Diesel Emissions Reduction Act ("DERA"): The Governor and Assembly acquiesced to the Senate's desire to delay the deadline for compliance with New York's DERA by one year. Accordingly, the State now has until the end of 2015 to bring the State's fleet into compliance with the Act.
7. Mass Transit/the Metropolitan Transportation Authority: The final budget diverts $30 million in funds dedicated for mass transit to pay State debt, a disappointing loss at a time of record mass transit ridership.
Overall, one might characterize the final budget as being good for the environment mostly because of what it did not accomplish than for what ultimately was included in the FY 2014/2-15 budget.
Tags: New York State FY 2014/2015 Environmental Budget
Brownfields | Energy | Infrastructure | News Updates
Virgin Petroleum Product Quandary in Rhode Island
Posted on May 22, 2014 by Richard Sherman
A case working its way through the Rhode Island state court system, Power Test Realty Co. Ltd. Partnership v. Sullivan, No. PC 10-0404 (R.I. Super. Ct. Feb. 19, 2013), poses a dilemma regarding the obligation to remediate releases of virgin petroleum product.
Under the Rhode Island equivalent of CERCLA, virgin petroleum product is exempt from the definition of hazardous substances. R.I.G.L. 23-19.14-3(c), (i). Releases of virgin petroleum product are therefore not subject to the imposition of joint, several, strict and retroactive liability. One would accordingly expect that any obligation to remediate virgin petroleum product releases would be based on causation. Rhode Island oil pollution statutes and regulations appear to impose liability based on causation only.
Nevertheless, the Rhode Island Department of Environmental Management and the Rhode Island Superior Court have taken the position that (1) the obligation of a current landowner to remediate a release of virgin petroleum product that occurred before acquisition of title arises on the theory that the term "discharge" under the state oil pollution statute includes "leaching" and (2) leaching of pre-acquisition petroleum product into the groundwater constitutes a passive and continuing discharge for which the current landowner is liable to remediate.
The Superior Court held that causation is irrelevant under the state oil pollution control statute and regulations. This ruling clearly contradicts the intent of the legislature to carve out virgin petroleum product from a no-fault liability scheme.
This case of first impression is now before the Rhode Island Supreme Court on a writ of certiorari, Docket No. SU-13-0076. Practitioners await with interest how the Court will work its way through this issue. Stand by for some tortured reasoning if the Superior Court ruling is upheld.
Tags: Rhode Island, oil pollution, hazardous waste, litigation
Litigation | State
What is this NY Green Bank?
Posted on May 21, 2014 by Eileen Millett
With a heap of fanfare, in mid-February, New York's Governor Cuomo announced that the NY Green Bank is open for business. Cuomo began ramping up his clean energy policy last summer, with the appointment of Richard Kauffman, as New York's chairman of energy and finance, and Chair of the New York State Energy Research and Development Authority (NYSERDA). Kauffman was the former U.S. Energy Secretary Steven Chu's senior advisor on clean energy finance. NY's energy and finance chair is making it clear that government subsidies alone have not been successful in creating a robust clean energy marketplace. Kauffman believes that government could encourage the development of private sector capital markets by helping to foster a demand for a low carbon economy. The creation of new Green Banks could lead to permanent, steady and reliable financing for clean energy efficiency projects, and create clean-energy jobs along the way. It's a win- win for everyone, ensuring a low carbon future and building long-term economic prosperity. New York is not alone, the United Kingdom has a national Green Investment Bank, and in the U.S., Connecticut, Vermont and Hawaii, have Green banks. New York expects that NY Green Bank will advance the state's clean energy objectives.
Established in June 2011, Connecticut's Clean Energy Investment Authority was the first state green bank, the first of its kind in the country. On the federal level, the Green Bank Act of 2014 was first introduced in April, in the U.S. House of Representatives by Congressman Chris Van Hollen of Maryland, and Senator Chris Murphy of Connecticut introduced a companion bill in the Senate, as well. In 2009 a bill passed the House, but not the Senate. The Green Bank Act of 2014 would establish a Federal Green Bank with a maximum capitalization of $50 billion from Green Bonds and the authority to co-fund the creation of state-level Green Banks with a low-interest loan of up to $500 million. The legislation provides for the Green Bank to be supported with $10 billion in "Green Bonds" issued by the Treasury; it will have a 20 year charter and will be able to acquire another $40 billion from Green Bonds. Passing the Green Bank Act of 2014 would give all states the option to receive funds from the federal government to assist with financing on a local level and to encourage the movement to a clean energy future. This appears to be yet another arena where the states will take the lead and eventually the federal government will follow.
NY Green Bank is a state sponsored investment funding institution created to attract private funds for the financing of clean energy projects. Mainly, it is a public-private financing institution having the authority to raise capital through various means ― including issuing bonds, selling equity, legislative appropriations, and dedicating utility regulatory funds ― for the purpose of supporting clean energy and energy efficiency projects. NY Green Bank got started with an initial capitalization of $218.5 million, financed with $165.6 million of uncommitted funds raised through clean energy surcharges on the State's investor owned utility customers, or idle clean energy ratepayer funds, combined with $52.9 million in auction proceeds from emission allowances sales from the Regional Greenhouse Gas Initiative (RGGI). The $218. 5 is meant to be a first step in capitalizing the $1 billion NY Green Bank initiative announced by the governor in his 2013 State of the State address.
NY Green Bank is a division of the NYSERDA, a public benefit corporation aimed at helping New York State meet its energy goals: reducing energy consumption, promoting the use of renewable energy sources, and protecting the environment. Globally, we have seen natural gas and renewables gaining ground at the expense of crude oil and coal.
On April 10, I had the pleasure of hearing Alfred Griffin, the President of the Green Bank, and Greg Hale, Senior Advisor to the Chairman of Energy and Finance Office of the Governor of NY, speak at a roundtable sponsored by Environmental Entrepreneurs (E2). They explained that NY Green Bank was created in December 2013, when a Public Service Commission (PSC) order, provided for its initial capitalization. The order was issued in response to a petition filed by NYSERDA seeking clean energy funds. Griffin and Hale see the $1 billion dollar investment fund as breaking down barriers for projects that are currently neglected. NY Green Bank, however, is not there to provide operating capital, it is there for project capital. They are seeking credit worthy projects and looking to promote standardization. These types of clean energy projects will be a bridge to private markets, eventually not requiring any public subsidy, and ultimately becoming sustainable. NY Green Bank will need impactful deals to demonstrate market success. In the clean tech space, investors are setting investment targets for private equity activity. Residential rooftops are among the type of projects being considered. The bank, for example, would work with a private partner to seed investment in a solar power company for solar panel construction at a specific site. The money would be directed for the panels not salaries or operating expenses. Given the global makeup of energy consumption, energy investors here and abroad are looking to leverage growth opportunities to decide where to invest growing dollars to take advantage of shifts in the energy market. New York state, although, not first, is situated right where it should be.
Tags: Energy
Energy | Governmental Policy | State | Sustainability
Welcome to the Mad-Hatter's Tea Party: Resource Economics and Ground Water Contamination
Posted on May 20, 2014 by Donald Stever
The old adage, jokingly told by my college Economics 101 prof, that "economics is not a science but rather a black art", is amply borne out by disputes between warring factions of resource economists that are playing out in ground water contamination natural resource damages litigation in New Jersey, Puerto Rico, and elsewhere. The issue: how to value contaminated ground water. So far, the few courts that have actually looked at this issue have been skeptical of the "creative" economics propounded largely by the plaintiff bar.
In one corner, we have the classical economists, usually retained by the defendants' bar, who argue that ground water must be valued based on the impairment of an economic use, such as potable fresh water that could otherwise be consumed or ground water that could otherwise be used for crop irrigation or for industrial process uses. They call this "use value." Let's say that we have a facility that contaminates ground water that is naturally salty, does not meet the federal SDWA secondary drinking water standards, and is not migrating beneath anybody else's property, or generally any ground water that is not impacting any offsite user. These economists argue that this water should not be valued for its loss as potential drinking water or other uses and thus the cost of replacing it should not be considered, leaving the monetary resource value of this water to be zero.
In the other corner we have the "creative" guys, typically retained by plaintiffs. They advance several theories upon which to predicate large monetary values for contaminated, but unused and unusable, ground water. Here are three:
Benefits Transfer: Under this theory, clean ground water has an inherent "value" to people, called by its proponents "existence value" and thus whether it is used or not, or anybody suffers actual harm or not, is irrelevant. The proponents of this theory rely on several, mostly old, studies in which groups of people were asked what they would pay to have assurance that their own ground water supply would be free of contamination. For example, would they contribute to the cost to construct a treatment facility? These economists then use an algorithm to calculate a per-gallon "value" of the contaminated ground water using the monetary values derived from those studies. This approach ignores real-world concepts of economic value, substituting for it a sort of fictional "gestalt" value.
Resource Equivalency Analysis: This approach borrows from techniques appropriately used to value damaged wetlands or plant or animal habitat. Its proponents also assume that ground water has inherent economic ("existence") value. They first calculate the volume of contaminated groundwater over time, and attempt to determine what it would cost to purchase an amount of land sufficient to "protect" an equivalent volume of ground water elsewhere in perpetuity. Although this approach works for habitats, it has all kinds of problems when applied to ground water. For example, in one recent case the economist's "equivalent" resource was a fresh water aquifer, which he was projecting as equivalent to a saline portion of the same aquifer, ignoring the fundamental meaning of the word "equivalency." Additionally, protecting ground water resources by preserving land also provides extraneous environmental benefits — such as providing habitat — which the theory seems to ignore. Furthermore, it is very difficult to determine appropriate land values.
Wasteful Use: This is my favorite. In a pending litigation, a plaintiff economist named Kevin Boyle asserted that extracting contaminated seaside ground water from beneath an industrial facility, treating it to remove contaminants pursuant to a RCRA corrective action permit, and discharging the treated water to the ocean, constitutes a "wasteful use" of the extracted ground water. His argument was premised on returning the treated water to the aquifer and thus making it available for use, instead of discharging the water to the ocean. But the aquifer in question was naturally salty, on the edge of the ocean, naturally flowed out under the ocean, and the recharge area would have been entirely within the property of the industrial defendant. He calculated his "wasteful use" value as the per gallon rack price of an equivalent volume of desalinated water sold to the public by the local water utility.
Stay tuned, sports fans. Surely more to come.
Tags: NRD, Ground Water, Common Law Torts
CERCLA | Litigation
Don't Even Try to Bring THAT Kind of Regulatory Takings Case
Posted on May 16, 2014 by Margaret (Peggy) N. Strand
In 2012 and 2013, the Supreme Court issued several decisions recognizing claims for regulatory takings that observers believed might indicate a shift toward greater protection of private property rights. In Arkansas Game and Fish Comm'n v. United States, 568 U.S. ___ (No. 11-597, Dec. 4, 2012), the Supreme Court upheld a claim for a temporary taking based on flooding associated with a Corps of Engineers project, discussed here. And in Horne v. Department of Agriculture, 569 U.S. ___ (No. 12-123, June 10, 2013), under very unusual circumstances, the Supreme Court allowed the takings claim to be presented as a defense to government regulatory action. The 2013 decision in Koontz v. St. Johns River Water Management District, 570 U.S. ___ (No. 11-1447, June 25, 2013), concerned mitigation requirements associated with land development in Florida, discussed here and here. Shift in judicial approach to greater protection of property rights? Maybe not.
During the same time period, the Court of Appeals for the Federal Circuit held that a landowner could not claim a taking arising out of denial by the Corps of an application for approval of a wetland mitigation bank. Hearts Bluff Game Ranch, Inc. v. United States, 669 F.3d 1326 (Fed. Cir. 2012). This lesser-known decision addresses a fundamental aspect of takings law — what is the property interest that is protected by the takings clause? Apparently it matters whether you have a permit denial (and can seek compensation) or a denial of a government approval of a benefit (which confers no compensable property right).
A wetlands mitigation bank is a property where wetlands have been enhanced or restored or otherwise improved. The mitigation bank credits generated by those efforts are available as compensatory mitigation for impacts authorized under Corps permits issued under Section 404 of the Clean Water Act. Unlike dredge or fill of wetlands or streams that require a Section 404 permit, the mitigation bank is not approved by permit. Rather, under regulations, the mitigation bank is reviewed by the Corps, EPA and other federal and state agencies, known as the Interagency Review Team (IRT). Subject to IRT review, the Corps and the mitigation banker sign a Mitigation Banking Instrument (MBI) that approves the mitigation bank. The MBI contains terms such as the size and nature of the wetland enhancement or restoration that will occur on the bank property. The MBI also establishes the credits for the bank, i.e., the marketable element that can be sold to a wetland permit applicant who needs to provide compensatory mitigation.
Despite this seemingly complicated process, the situation can be simplified in this way: Mr. Black, owner of Blackacre, wants to fill wetlands on his property to build homes. Mr. Black must obtain a Section 404 permit from the Corps and likely will need mitigation to offset what he fills. Ms. White, owner of Whiteacre, wants to restore and enhance wetlands on her property, and use that enhancement as a basis to offer credits for wetland compensation to those who need to mitigate their impacts to wetlands, like Mr. Black. Ms. White needs to go through the mitigation banking regulatory process for her approvals. Her MBI will authorize the planned "ecological development" of her property.
Comparing the Hearts Bluff decision to more standard regulatory takings law, if Mr. Black's application for a permit is denied, he may be able to sue the United States for compensation for the taking of his property. If Ms. White's application for approval of the mitigation bank is denied, the Federal Circuit says she has no compensable property interest.
Hearts Bluff sought approval for a 4000 acre mitigation bank in Texas. The land was located where the planned Marvin Nichols Reservoir might be sited, a proposed reservoir that has a long history in Texas. Hearts Bluff also sued in state court. After consulting with the state and evaluating the potential site, the Corps denied the application for mitigation bank approval, citing reasons that do not appear in the takings decisions.
Any regulatory takings claim faces a number of hurdles. What is unusual about Hearts Bluff is that the court held that the company had no "cognizable property interest."
The Federal Circuit focused on its two-part test for evaluating takings claims. "First, as a threshold matter, the court determines whether the claimant has identified a cognizable Fifth Amendment property interest that is asserted to be the subject of the taking. . . .Second, if the court concludes that a cognizable property interest exists, it determines whether that property interest was 'taken.'" Id. at 1329. The court stopped at step one, finding that there was no property interest.
The court adopted the government's position that Hearts Bluff "was never entitled to operate a mitigation bank solely by virtue of its ownership of the land and that it did not have a property right in access to the mitigation banking program because the program is entirely a creature of the government and subject to pervasive and discretionary government control." Id. at 1330. The mitigation banking program, said the court, "is run exclusively by the Corps, subject to its pervasive control, and no landowner can develop a mitigation bank absent Corps approval. Mitigation banking in its entirety would not exist without the enabling government regulations. Under our precedent, therefore, the Corps' discretionary denial of access into the Corps program cannot be a cognizable property interest." Id. at 1331.
The court relied on precedent where the claimant owned property but not the particular right to use the property as it asserted. For example, in Air Pegasus of D.C., Inc. v. United States, 424 F.3d 1206 (Fed. Cir. 2005), the court had held that a helicopter operator had no takings claim when a federal "flight restriction" essentially destroyed its business. There are not many cases in this area, and many of them deal with personal property, rather than real property. These decisions do not turn on the distinction between a government permit and a government benefit, but rather delve into whether the claimant's property carried with it the right to pursue the particular "end goal."
In short, while Hearts Bluff certainly owned the real property, its ability to "develop" it as a mitigation bank was not a "right" that could be taken by the Corps' denial of its application. It was not such a right because the government essentially created the end use (mitigation banking).
It's been a long time since my law school days, but the "bundle of sticks" that I was taught constitute real property rights should include the right to seek governmental approval for the owner's preferred uses, regardless of whether the government program is new, old, established by regulations, or described in a statute. The government does not always commit a taking by denying such uses, but it is troubling that property rights should depend on which government program is involved.
Tags: Takings, Wetlands
Regulation | Supreme Court
Beware the Specter of Debarment
Posted on May 8, 2014 by Tom Sansonetti
Debarment is the process whereby the federal government can permanently prevent a company from doing business with the federal government or suspend a company from doing business with the federal government for a period of years. The debarment process has been available for decades to the United States to be used against companies or persons whom the government believes are untrustworthy. For instance, removal from EPA's list of violating facilities requires agency evaluation of corporate attitude. But the Obama Administration has broadened the scope of the process to potentially ensnare many an unsuspecting entity.
The debarment process as it currently exists has resulted in the following scenarios:
A. An oil company in the Rocky Mountain region settled a regulatory violation with the Department of the Interior's Bureau of Land Management and as part of the agreement paid a substantial seven figure fine and adopted new procedures designed to prevent a reoccurrence of the violation and a two-year period of probation. Imagine the surprise of the company's managers and in-house lawyers when eighteen months after the settlement was executed, they received a Notice of Debarment for a three-year period preventing the use of their federal leases requiring new permits.
B. A wind farm owner that was convicted for killing bald eagles discovered that the company could not sell future electricity production to a federal facility.
C. An oil and gas company that pleaded guilty to a Clean Water Act spill faced debarment from being able to bid on federal oil and gas leases for five years.
Companies or persons found to be in violation of civil or criminal statutes or departmental regulations are subject to debarment. While in egregious cases debarments can be perpetual, most debarments are for a period of three to nine years. Debarments do not affect a company's current government contracts, but do affect renewals of those contracts or the need for new permits on federal lands. The debarments are company-wide. Consequently, the above-mentioned wind farm owner also could not sell its electricity produced from its coal fired power plants to federal facilities.
Debarment proceedings are administered by the various Offices of Debarment, located within each cabinet department, with the closest responsibility for enforcing the law that was violated. Thus, the Department of the Interior's Office of Debarment (staffed by the Inspector General's personnel) handles violations of fish and wildlife, public lands and Indian law. Environmental Protection Agency lawyers in the grants and debarment program handle debarment proceedings authorized by Section 508 of the Clean Water Act or Section 306 of the Clean Air Act.
Upon the entry of a federal court judgment or consent decree a representative of the Department of Justice, often an Assistant United States Attorney, forwards the document to the appropriate cabinet department's Office of Debarment. The government deems debarment proceedings to be separate from the underlying litigation. Agreements to avoid debarment may not be a condition of any plea bargain or consent decree. Adverse outcomes after executive branch debarment hearings may be appealed to a federal district court under deferential Administrative Procedures Act standards.
Tags: Debarment
Clean Air Act | Clean Water Act | Endangered Species Act | Enforcement | Environmental Protection Agency | Litigation
Anadarko Petroleum Agrees to $5.15 Billion Settlement for Environmental Cleanup Claims
Posted on May 7, 2014 by Donald Shandy
Anadarko Petroleum Corporation ("Anadarko") and its Kerr-McGee unit, which Anadarko purchased in 2006, has entered into a settlement agreement with the United States, whereby Anadarko/Kerr-McGee agreed to pay $5.15 billion for a vast array of environmental clean-ups around the country. The settlement represents the largest environmental enforcement recovery on record by the Department of Justice.
The settlement stems from the bankruptcy of Tronox, a spinoff company created by Kerr-McGee for its chemical operations in 2006. When Tronox declared bankruptcy in 2009, the United States and co-plaintiff Anadarko Litigation Trust (a litigation trust created to pursue Tronox's claims on behalf of its environmental and torts creditors) asserted fraudulent conveyance allegations against Anadarko and Kerr-McGee, along with certain of its affiliates. In December 2013, the U.S. Bankruptcy Court for the Southern District of New York found that the historic Kerr-McGee fraudulently conveyed assets to the "new" Kerr-McGee (a new corporate entity with the same name), leaving its legacy environmental liabilities behind in the old company (renamed Tronox and spun off as a separate company), with the intent to evade its debts —including liabilities for environmental clean-up at numerous sites across the country. The court stated that "there can be no dispute that Kerr–McGee acted to free substantially all its assets … from 85 years of environmental and tort liabilities." In re Tronox Inc., 503 B.R. 239, 280 (Bankr. S.D.N.Y. 2013).
Under the terms of the settlement agreement, the litigation trust and Anadarko/Kerr-McGee mutually agree to release all claims against each other. Additionally, the United States government and Anadarko/Kerr-McGee have provided mutual covenants not to sue.
As a result of the settlement agreement, it is anticipated that the funds will be allocated to a number of clean-ups, which will include:
• $1.1 billion paid to a trust charged with cleaning up contaminated sites around the county, including the Kerr- McGee Superfund Site in Columbus, Mississippi
• $1.1 billion paid to a trust responsible for cleaning up a former chemical manufacturing site in Nevada that contaminated Lake Mead
• Approximately $985 million paid to the U.S. Environmental Protection Agency (EPA) to fund the clean-up of approximately 50 abandoned uranium mines on land of the Navajo Nation
• Around $224 million paid to the EPA for clean-up of thorium contamination at the Welsbach Superfund Site in Gloucester, New Jersey
Tags: Anadarko, Kerr-McGee, Tronox
Litigation | Pollution
CSK Tribes to Acquire Kerr Dam in Montana
Posted on May 5, 2014 by Irma S. Russell
Last month, after 30 years of negotiations between the parties, an arbitration decision set the price to be paid by the Confederated Salish Kootenai Tribes (CSK) to PPL Montana to acquire the Kerr Dam. The tribes expect the dam -- the first major hydroelectric facility owned by a tribal entity -- will serve as a driver for economic development for tribal members, residents of the Flathead Reservation, and the surrounding area. The dam will operate under the same licensing requirements applicable to PPL Montana and will sell energy generated by the dam on the open market. The dam has the generating capacity of 194 megawatts, standing at 205 feet high and 541 feet long.
After considering arguments by the tribes and PPL Montana, a panel of the American Arbitration Association set $18,289,798 as the price to be paid by the CSK to acquire the dam. This price includes $16.5 million for the existing plant and $1.7 million for required environmental mitigation and was the original price agreed to by the parties in a negotiated deal in 1985. The tribes had argued to the panel that $14.7 million would be a fair price while PPL Montana maintained the tribes should pay close to $50 million for the dam.
The arbitration decision is a culmination of a long history of the construction and operation of the dam. Negotiation for purchase has been going on since 1984 when the 50-year lease terminated. Understanding the debates surrounding the dam requires some explanation. In 1934 a subsidiary of the Montana Power Company began construction on the Kerr Dam on tribal lands on the Flathead River despite opposition from members of the Flathead Indian Reservation. In 1938 the construction was completed and named after the then CEO of Montana Power Co., Frank Kerr. The construction financing for the project included a 50-year term lease that provided for lease payments to the tribes for the dam, which is located on tribal lands and uses tribal resources.
The arbitration decision indicated that the purchase can occur after September 5, 2015. Energy Keepers, a federally chartered corporation owned by the tribes is expected to tender the purchase money early in September 2015. The CSK Tribes hopes to develop the dam as a self-sustaining energy source for the tribes as well as a revenue source. The Tribal Council is expected to choose a new name for the dam after the transfer.
In 2011 the tribes competed for and received a federal grant, which was available for energy projects. The grant money funded a feasibility study to assess energy efficiency improvement projects and to implement energy conservation measures in existing tribal facilities. The grant funding also supported the development of an organizational structure to acquire the dam.
Not all tribal members supported acquisition of the dam. The arbitration process ran from February 3 to March 3, and some tribal members have objected that lack of notice means that public comment should be allowed at this time. Additionally, some tribal members have noted in the media the need for caution in going forward. For example, some have emphasized that, after the purchase, the dam will no longer be a taxable asset and tax support for schools in the area will be lost or will need to be funded from other sources. Preparation for the transition to tribal ownership has begun, and the tribes are working with current employees at the dam who are tribal members and searching for engineers and information technology employees.
Tags: Hydroelectric, Montana, DOE, Kerr Dam
Energy | Renewable | Tribal Rights
Pioneering Environmental Law: Remembering David Sive (1922-2014)
Posted on May 2, 2014 by Nicholas Robinson
Before environmental law existed, David Sive knew that the law could protect forests and fields, abate pollution of air and water, and restore the quality that humans expected from their ambient environments. He fashioned legal arguments and remedies where others saw none. His commitment to building a field of environmental law is exemplary, not just historically, but because we shall all need to emulate his approach as we cope with the legal challenges accompanying the disruptions accompanying climate change.
David Sive learned to love nature by hiking and rambling from parks in New York City to the wilderness of the Catskill and Adirondack Mountains. He carried Thoreau's Walden into battle in World War II in Europe, and read William Wordsworth and the Lake poets while recuperating from wounds in hospitals in England. He had a mature concept of the ethics of nature long before he began to practice environmental law.
His early cases were defensive. He defended Central Park in Manhattan from the incursion of a restaurant. He rallied the Sierra Club to support a motley citizens' movement that sought to protect Storm King Mountain from becoming a massive site for generating hydro-electricity on the Hudson River. Scenic Hudson Preservation Conference v. Federal Power Commission [FPC] (2d Cir. 1965), would become the bell-weather decision that inaugurated contemporary environmental law. The case was based on the multiple use concepts of the Progressive Era's Federal Power Act. The FPC (now FERC), had ignored all multiple uses but the one Con Edison advanced. When the Court of Appeals for the Second Circuit held that citizens had the right to judicial review to require the FPC to study alternative ways to obtain electricity, as well as competing uses for the site, the court laid the basis for what would become Section 102(2)(c) of the National Environmental Policy Act (NEPA).
When Consolidated Edison Company decided to build a huge hydroelectric power plant on Storm King, the northern portal to the great fiord of the Hudson River Highlands, citizens and local governments were appalled. This was no "NIMBY" response. Con Ed had forgotten that these fabled Highlands inspired the Hudson River School of landscape painting. This artistic rendering of nature in turn inspired the birth of America's conservation movement of the late 19th century. The Hudson also instrumental to the historic birth of this nation; here the patriots' control of the Highlands had kept the British from uniting their forces, and here soldiers from across the colonies assembled above Storm King for their final encampment as George Washington demobilized his victorious Army. The Army's West Point Military Academy overlooks the River and Storm King.
David Sive and Alfred Forsythe formed the Atlantic Chapter in the early 1960s, despite heated opposition from Californians who worried the Club would be stretched too thin by allowing a chapter on the eastern seaboard. David Sive chaired the Chapter, whose Conservation Committee debated issues from Maine to Florida. He represented the Sierra Club, pro bono, in its intervention in the Storm King case, and other citizens brought their worries about misguided government projects or decisions to him.
David Sive represented similar grassroots community interests in Citizens Committee for the Hudson Valley v. Volpe (SDNY 1969), affirmed (2d Cir. 1970). Transportation Secretary Volpe had approved siting a super-highway in the Hudson River adjacent to the shore in Tarrytown and Sleepy Hollow, to accommodate Governor Nelson Rockefeller's proposal to connect his Hudson estate to the nearby Tappan Zee Bridge. Without the benefit of NEPA or any other environmental statutes, which would be enacted beginning in the 1970s, and relying upon a slender but critical provision of a late 19th century navigation law, after a full trial in the US District Court for the Southern District of New York, David Sive prevailed against the State and federal defendants. He won major victories on procedure, granting standing to sue, and on substance, a ruling that the government acted ultra vires. David Sive saved the beaches, parks and marinas of the Hudson shore.
Public interest litigation to safeguard the environment was born in these cases. Public outrage about pollution and degradation of nature was widespread. In September 1969, the Conservation Foundation convened a conference on "Law and the Environment," at Airlie House near Warrenton, Virginia. David Sive was prominent among participants. His essential argument was that "environmental law" needed to exist.
On December 1, 1970, Congress enacted the NEPA, creating the world's first Environmental Impact Assessment procedures and establishing the President's Council on Environmental Quality (CEQ). The CEQ named a Legal Advisory Committee to recommend how agencies should implement NEPA chaired by US Attorney Whitney North Seymour, Jr. (SDNY). This Committee persuaded CEQ to issue its NEPA "guidelines" on the recommendation of this Committee. That year launched the "golden age" of NEPA litigation. Courts everywhere began to hear citizen suits to protect the environment.
David Sive went on to represent citizens in several NEPA cases, winning rulings of first impression. In 1984, he reorganized his law firm, Sive Paget & Riesel, to specialize in the practice of environmental law. From the 1970s forward, NEPA allowed proactive suits, no longer the primarily defensive ones of the 1960s. "Citizen suits" were authorized in the Clean Air Act, Clean Water Act and other statutes.
David Sive knew that without widespread support among the bar and public, these pioneering legal measures might not suffice. He became a founder of the Natural Resources Defense Council (NRDC), which became one of the nation's pre-eminent champions of public environmental rights before the courts. To continue the Airlie House conference precedent, he institutionalized the established professional study of environmental law, as a discipline, through creation of the Environmental Law Institute (ELI). With ALI-ABA (now ALI-CLE) he launched nationwide continuing legal education courses to education thousands of lawyers in environmental law, a field that did not exist when they attended law school. He devoted an active decade to teaching law students in environmental law, as a professor at Pace Law School in New York.
This month, the Intergovernmental Panel on Climate Change (IPCC) released the second part of its Fifth Assessment Report. The IPCC summaries of peer-reviewed scientific investigation suggest that law will confront problems even more challenging than those that David Sive addressed. New legal theories and remedial initiatives will be needed that do not exist today. The wisdom of ecologist Aldo Leopold can inform the next generation. Globally, others carry on David Sive's role, such Attorney Tony Oposa in the Philippines or M. C. Mehta in India. The law can cope with rising sea levels, adaptation to new rainfall patterns, and other indices of climate change, but it will take individual commitment to think deeply about environmental justice in order to muster the courage to think and act tomorrow as David Sive did yesterday.
Tags: NEPA, FERC, conservation
Conservation | Education | Environmental Justice | Litigation | NEPA | Pro Bono