Senate Bill Proposes Major Market-Based Remodel of Cap-and-Trade Program

California’s cap-and-trade program withstood a battle in court, and now the Legislature is proposing changes to the controversial program.  Senator Bob Wieckowski (Democrat – District 10), Chair of the Environmental Quality Committee, has authored Senate Bill 775 (“SB 775”) which would extend the cap-and-trade program to 2030 with modifications.  The existing cap-and-trade program, established under Assembly Bill 32 (2006) or the California Global Warming Solutions Act (“Act”), expires in 2020.  The Act requires the State Air Resources Board (“ARB”) to approve a statewide greenhouse gas emissions limit equivalent to 1990 greenhouse gas emissions level to be achieved by 2020, and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030, as outlined in Senate Bill 32 (2016).

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Sacramento Superior Court Finds Chromium 6 Water Standard Not Economically Feasible

On May 5, 2017, the Sacramento Superior Court issued a decision that the state’s water regulation, when it comes to the hexavalent chromium, also known as Chromium 6 (or Chrom-6) water standard, is not economically feasible and must be withdrawn. A copy of the Court’s Order can be read here.

In 2014, the California Department of Public Health (CDPH) set a new state drinking water standard, or maximum contaminant level (MCL), for Chromium 6 at 10 parts per billion (ppb). Pursuant to the Safe Drinking Water Act (SDWA), CDPH is specifically directed to establish a MCL for Chromium 6. “[T]o the extent technologically and economically feasible,” the standard shall “avoid any significant risk to public health.” (Health & Saf. Code 116365(b)(3)). In terms of economic feasibility, CDPH is directed to “consider the costs of compliance to public water systems, customers, and other affected parties…” (Id.)

Petitioners California Manufacturers and Technology Association and Solano County Taxpayers Association – as do many other private and public entities – believe the MCL is too stringent and that compliance would be prohibitively expensive. Petitioners filed a lawsuit and asked the court to order CDPH to withdraw the standard due to economic infeasibility and to adopt a new standard at a level that would be economically feasible for Chromium 6. Petitioners primary claim is that CDPH violated the SDWA by failing to adopt an MCL that is economically feasible, and by failing to properly consider the cost of compliance to public water systems, customers, and other affected parties.

The Court found that while several of the points CDPH makes in opposition to Petitioners’ claims are well taken, CDPH ultimately failed to convince that it adequately considered whether the MCL it set was economically feasible. It is unclear whether CDPH will file an appeal.

In order to sufficiently eliminate Chromium 6 to comply with CDPH’s proposed regulation, small, medium and large water systems would have spent considerable costs. Those costs would have been passed on to California consumers.

At this time, the State Water Board is reviewing the order and will update its website when it can provide details as to the range of impacts resulting from this decision. While the MCL is withdrawn, the existing standard for total chromium will continue to limit Chromium 6 to 50 parts per billion.

Another Retailer Shells Out for Hazardous Waste Violations: Big Lots Ordered to Pay $3.5 Million

Following closely on the heels of Dollar General’s hazardous waste settlement (about which we reported in our April, 19, 2017 blog post), another discount retailer has been held to account in a big way for its failure to properly manage its waste streams.  On April 21, 2017, a San Bernardino County Superior Court Judge ordered Big Lots Stores, Inc. (“Big Lots”) to pay $3.5 million in civil penalties and costs for environmental violations.  The order is the result of an investigation into the disposal of hazardous waste by Big Lots at its distribution center and its 206 California stores over the past several years.  The lawsuit was brought by 35 District Attorney’s Offices and two City Attorney’s Offices in California.

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This is the third update on environmental regulatory and legal developments in Los Angeles and adjacent counties, as well as the Southern San Joaquin Valley.  We welcome your comments and updates.

South Coast Air Quality Management District

*Governing Board Shift:  New Governing Board Member Sheila Kuehl replaced Mike Antonovich, returning the Board to a Democratic Majority.  Ms. Kuehl calls upon the South Coast Air Quality Management District (District) to use its full regulatory power, and she has strong ties with the California Legislature.  New emphases now include further regulations of stationary facilities, such as warehouses and shopping malls that are considered “indirect sources” of air emissions because they attract emissions from cars and trucks, as well as a termination of the RECLAIM Program.  Questions on the latter include when (2025, 2023, 2031?), treatment of credits from shutdowns, and how companies that invested in long-term credits will be dealt with.  In addition, the District wants to achieve the NOx shave under RECLAIM and at the same time sunset the Program.  Collaterally, the District is pushing the California Air Resources Board (CARB) and US EPA to do their “fair share” to regulate mobile sources so that further efforts to improve air quality will not be piled on the backs of stationary businesses.

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First Quarter CEQA Update in Under 60 Seconds

Okay, maybe slightly longer than 60 seconds.  The point being, though, that CEQA case updates really should not read like law school case briefs.  Long discussion of the lower court’s findings?  No thank you.  Point/counterpoint for each and every argument made by petitioners?  No one has time for that.  Get in, get out and move on with some useful knowledge — that’s the goal for this update on CEQA cases in the first quarter of 2017.

If we had to pick a theme for first quarter CEQA cases, it would be simple: don’t stick your head in the sand, do explain yourself, and all will be fine.  Why this theme?  Continue reading and find out in these case summaries. Continue Reading

Retailers Beware! Dollar General Just Hit with $1.125 Million Judgment for Improper Hazardous Waste Handling and Disposal

Here’s another major reminder to retailers to know their waste streams and to make sure they are being managed and handled properly.  On Monday, Kern County Superior Court Judge Sidney P. Chapin ordered Dollar General (Dolgen California) and its subsidiary corporations to pay $1.125 million as part of a settlement of a civil/environmental prosecution.  The April 17, 2017 judgment was announced by the Yolo County District Attorney, along with 31 other California District Attorneys as part of a significant civil settlement.  A harbinger of the increasingly aggressive stance local prosecutors are taking with respect to household hazardous waste disposal claims, the civil enforcement lawsuit was filed just one week prior, on April 11, 2017, in Kern County by a group of 38 of California’s 58 counties.  Dollar General operates about 13,320 stores in 43 states, including a significant number in California.

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New Forecast in California: An End to the Drought (For Now!) in Most Counties

On April 7th, Governor Jerry Brown issued an executive order that lifts the drought emergency in fifty-four of the fifty-eight California counties. After six years of a prolonged drought in California, Executive Order B-40-17 lifts the drought emergency in all California counties except Fresno, Kings, Tulare and Tuolumne.

While the drought is declared over for many regions, Executive Order B-40-17 makes clear that water conservation efforts are not. Instead, “our changing climate requires California to continue to adopt and adhere to permanent changes to use water more wisely and to prepare for more frequent and persistent periods of limited water supply.” When the drought emergency was in effect, Governor Brown ordered a statewide 25% cut in urban water use, and the state responded by coming in quite close, by reducing water use by more than 22% between June 2015 and January 2017. In stating this “drought emergency is over,” the Governor also broadcasted what many Californians have come to know: “the next drought could be around the corner. Conservation must remain a way of life.”

In continued water conservation efforts in California, Executive Order B-40-17 provides that the State Water Resources Control Board will continue to maintain and develop permanent prohibitions on wasteful water use such as watering lawns in a manner that causes runoff, hosing off sidewalks, driveways and other hardscapes, as well as irrigating ornamental turf on public street medians.

As for the continued drought response in Fresno, Kings, Tulare, and Tuolumne counties, the Executive Order states that the California Department of Water Resources and the State Water Resources Control Board “will accelerate funding for local water supply enhancement projects and will continue to explore if any existing unspent funds can be repurposed to enable near-term water conservation projects.”

So, California has turned the corner for this drought from which many lessons have been learned and adaptive measures undertaken by public and private water users. Hopefully these lessons and measures are remembered for when the next drought arrives, and even improved upon to help weather the next set of storms and lack thereof.

CARB Wins Again on Cap-and-Trade, But Is It Really in Any Danger of Losing?

As the sands shift on federal climate change policy, California’s cap-and-trade program survives to fight another day.  Yesterday, a California Court of Appeal upheld the program because it does not impose a tax subject to the two-thirds supermajority vote requirement under Proposition 13.  The Court also affirmed the California Air Resources Board’s (CARB) authority to auction GHG emissions allowances.  For the ins and outs of the decision and prior coverage of the case, pop on over to Renewable + Law for a great post by my colleagues, Allison Smith and Parissa Florez.

Now, stating the obvious here: a lot is riding on this case.  The cap-and-trade program has generated billions of dollars in fees and the program plays a crucial role in California’s goal to cut GHG emissions.  Those fees don’t get paid with monopoly money, but instead hit the bottom line of companies across many different industries.  Of course, some consider the fees to be a small price to pay to prevent flooding, the sixth mass extinction, and in their view, the end of the world. On a level that hits closer to home for many readers of this blog, the challenge to the cap-and-trade program has added to the uncertainty of how to address GHG emissions for development projects subject to CEQA.  As previously discussed by my colleague, Tom Henry, reliance on the cap-and-trade program appears to be one of the few approaches to a legally defensible CEQA GHG analysis.

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On the Chopping Block this Week: Obama Mitigation Policies for Natural Resources

I should start writing a regular segment titled “On the Chopping Block this Week.” While Congress’ hands seem to be tied, the President surely doesn’t have the same problem with overturning policies from the Obama Administration.  This week was no exception, with the release of Trump’s Executive Order on Energy Independence and Interior Secretary Zinke’s related Secretarial Order 3349.

While my renewable energy friends ponder the fate of climate change policies and the Clean Power Plan, bugs and bunny lovers (and haters too!) should take note of the Orders’ call to review (and most likely rescind) Obama’s natural resources mitigation policies. Check out this analysis by a few of my fish and wildlife colleagues for great insights into the Orders’ impact on USFWS/NMFS and ESA mitigation policies.

The first 100 days certainly have been a wild ride so far, but I may just get whiplash from all of these policy changes!

ARB Adopts GHG Emission Standards for Oil and Gas Facilities; Operators Wary of Costs

On March 23, 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”).  The Methane Regulations impose emission controls on offshore and onshore oil production and processing facilities and at natural gas compressor stations, underground storage facilities, and gathering and boosting stations.

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