Reviving a federal Clean Water Act (“CWA”) lawsuit, the U.S. Court of Appeals for the Fourth Circuit held that an indirect discharge – such as a discharge to ground water – may fall within the scope of the CWA, if the indirect discharge is sufficiently connected to navigable waters to be covered under the CWA. The decision was issued on April 12, 2018, in the case, Upstate Forever et al. v. Kinder Morgan Energy Partners LP, et al. The facts were unusual for a citizen suit, in that the citizen group plaintiffs were targeting discharges to ground water. Plaintiffs alleged that defendants were in violation of the CWA because defendant (or “Kinder Morgan”) discharged pollutants into navigable waters without obtaining a National Pollutant Discharge Elimination System (“NPDES”) permit. The source of the alleged discharge is a gasoline spill: in 2014, “over 369,000 gallons of gasoline spilled from Kinder Morgan’s underground pipeline, which extends over 1100 miles through parts of the eastern United States.” Slip Op. at 8. According to plaintiffs, the “gasoline pollutants from the pipeline are seeping into navigable waters as defined by the CWA.” Id. Kinder Morgan subsequently repaired the pipeline, and has recovered at least a portion of the spilled gasoline.
On March 7, 2018, the California Division of Oil, Gas and Geothermal Resources (“DOGGR,” or “Division”) published a notice to operators (“NTO”) regarding updated guidelines for oilfield water quality data. The NTO outlines procedures for submission of oilfield water quality data by operators, including required notices, injectate samples, formation water samples, documentation and final report and certification processes.
On March 8, 2018, California regulators reached a settlement agreement with Home Depot wherein the retail giant agreed to pay $27.84 million for various hazardous waste violations. The State hit Home Depot with penalties for alleged violations identified during inspections occurring between 2013 and 2015, due to improper disposal of certain types of waste, including batteries, aerosol cans, paints, and electronic devices. Attorney General Xavier Becerra reported that the settlement amount equated to about $16 million in civil penalties, $9 million toward environmental protection and compliance, and nearly $2 million to cover costs. The State alleged that Home Depot violated California’s Hazardous Waste Control Law, and California’s Unfair Competition Law because “such conduct gives Home Depot a competitive advantage over other regulated entities that are complying with the law.”
Stoel Rives’ Oil & Gas Team has been monitoring bills introduced by California legislators since the beginning of the 2017-2018 legislative session. Below are the latest updates on the bills our team has been following during the first half of the current legislative session. In addition, we have included new bills introduced during the second half of the current legislative session.
The following is a list of bills either vetoed by the Governor or chaptered into law at the end of the first half of the current legislative session. A summary of such bills can be found here.
- AB 1197 (Limón, D): Oil spill contingency plans: spill management teams. Chaptered into law on October 8, 2017.
- AB 1328 (Limón, D): Oil and gas: water quality. Chaptered into law on October 13, 2017.
- AB 1472 (Limón, D): Public lands: assignments and transfers; oil, gas and mineral leases. Vetoed by the Governor on July 25, 2017.
- AB 1647 (Muratsuchi, D): Petroleum refineries: air monitoring systems. Chaptered into law on October 8, 2017.
- SB 44 (Jackson, D): State lands: coastal hazard and legacy oil and gas well removal and remediation program. Chaptered into law on October 8, 2017.
- SB 724 (Lara, D): Oil and gas: wells and production facilities. Chaptered into law on October 10, 2017.
On February 22, 2018, California Attorney General Xavier Becerra announced that the Department of Justice is opening an environmental justice office within the Environment Section: the Bureau of Environmental Justice (“Bureau”). “The Bureau’s mission will be to protect people and communities that endure a disproportionate share of environmental pollution and public health hazards.” Using existing federal and state statutes, the Bureau will accomplish its mission through targeted oversight, investigation, and enforcement actions.
According to the press release, the Bureau’s oversight and enforcement work will focus on:
- Ensuring compliance with the California Environmental Quality Act (“CEQA”) and land use planning laws;
- Remediating contaminated drinking water;
- Eliminating or reducing exposure to lead and other toxins in the environment and consumer products;
- Challenging the federal government’s actions that repeal or reduce public health and environmental protections; and
- Penalizing and preventing illegal discharges to air and water from facilities located in communities already burdened disproportionately with pollution.
On February 12, 2018, the California Department of Conservation (“DOC”) issued a public notice announcing revisions to the text of the proposed regulations in the rulemaking for California Underground Gas Storage Projects. This rulemaking follows a saga of rulemakings for underground gas storage projects in the state – both emergency and general rulemakings – which all began in early 2016. The rulemakings were spurred by the underground gas storage leak at the Aliso Canyon facility in southern California, which was discovered on October 23, 2015 and continued leaking until February 2016.
On February 1, 2018, the U.S. Court of Appeals for the Ninth Circuit upheld the district court’s decision, finding that the County of Maui violated the Clean Water Act (“CWA”) when it discharged treated effluent into underground injection wells, which then allowed the effluent to seep into the Pacific Ocean. The Ninth Circuit panel held that the wells were required to obtain National Pollutant Discharge Elimination System (“NPDES”) permit coverage because the discharge from the wells was “fairly traceable” from the discharge point (point source) to a navigable water.
California’s process to challenge thermal power plants will likely be put to the judicial test in the coming years. The California Court of Appeal has granted publication of its recent opinion in Communities for a Better Environment v. State Energy Resources Conservation and Development Commission, (Dec. 22, 2017, No. A141299) __Cal.App.5th __, which reverses the trial court’s dismissal of a complaint by environmental groups Communities for a Better Environment and Center for Biological Diversity (collectively “Communities”), challenging the constitutionality of the limited judicial review available for thermal power plant licenses issued in California. You can find our previous post detailing Communities’ complaint here.
In January 2014, the Alameda County Superior Court dismissed Communities’ claims that statutory provisions of California’s power plant siting law, the Warren-Alquist Act, violated article VI, section 10 of the California Constitution. Under this unique facet of the Warren-Alquist Act, any challenge to a decision by the California Energy Commission on a thermal power plant license must be appealed directly to the California Supreme Court. (Cal. Pub. Resources Code, § 25531(a).) The trial court sided with the Energy Commission and the California State Controller, who argued that the case was not grounded in any actual existing controversy among Communities and the Commission, sought an advisory opinion only, and was not ripe for review. The trial court concluded that Communities had failed to meet its burden to show how its complaint could be amended to state a justiciable cause of action, and, thus, it dismissed the matter with prejudice and entered judgment in favor of the Energy Commission and the Controller.
In early January 2018, the U.S. Environmental Protection Agency (“EPA”) decided to halt previous proposals to stay methane rules for new and existing landfills. The Obama Administration’s EPA issued the final New Source Performance Standards (“NSPS”) and Emissions Guidelines (“EG”) for municipal solid waste landfills on August 29, 2016 (jointly “Methane Rules”). These updates to the NSPS were promulgated to reduce emissions of methane-rich landfill gas from new, modified and reconstructed municipal solid waste (“MSW”) landfills. EPA’s current announcement to desert plans for an administrative stay comes after the EPA announced a 90-day administrative stay for the Methane Rules, which went into effect on May 31, 2017.
In March 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”), which impose emission controls for oil and gas facilities across the state. Following the state rulemaking process, ARB and the San Joaquin Valley Air Pollution Control District (“Air District”) – and the Air District’s regulated stakeholders – jointly determined that local administration of the program would provide for more effective and expeditious implementation at a lower cost to businesses in the Air District. Thus, in December 2017, the Air District adopted a registration program (Air District Rule 2260) to implement ARB’s regulations.