Jenner & Block

Environmental and Workplace Health & Safety Law

April 19, 2018 Can Blockchain Technology Disrupt Renewable Energy Finance?

 By Matthew G. Lawson  Blockchain

In 2016, the world underwent its largest ever annual increase in renewable power by adding an estimated 161 gigawatts of capacity in renewable power generation. The increased stemmed from a world-wide investment of USD $240 billion in renewable energy, marking the seventh straight year that the world’s investment in renewable power sources topped $200 billion dollars. Despite the world’s growing investment in renewable power, an estimated 1.2 billion people still live without access to electricity. Individuals without electricity must supplement their energy needs through fuel based lighting and heating. Burning these sources is not only more expensive relative to many forms of renewable power, but also results in the release of toxic fumes and black carbon, which are major contributors to local air pollution and climate change.

So why the disconnect between the world’s rapidly growing supply of more affordable renewable energy and the large quantity of individuals left relying on expensive and dirty alternatives? According to Renewables 2017 Global Status Report, the problem primarily stems from an inability of traditional electricity grids to provide power to these populations. With roughly 80% of those without power living in rural areas, it simply is technologically or economically infeasible to extend traditional grid networks to many of the residents. In cases where the grid has been extended, the added cost of additional infrastructure and energy transport waste can price residents out of purchasing power.

The solution to this problem could be Distributed Renewable Energy (“DRE”) systems combined with Blockchain technology. In short, DRE systems generate and distribute power to local users independent of a centralized grid. The systems often consist of module solar panels or small-scale wind turbines and operate on a Pay-As-You-Go (PAYG) network that allows energy users to pay for only the energy they use on an ongoing basis. In order to manage the creation of PAYG networks, several companies are now turning to Blockchain technology. Blockchain, best known for its use in cryptocurrencies like Bitcoin, functions as a public ledger that allows massive amounts of data to be securely stored and accessed by the general public without a centralized platform. According to one company’s recently released white paper, utilization of Blockchain technology can spur the development of DRE systems by allowing those seeking power generation to connect seamlessly with potential financiers on a global basis without the need for utility companies or governmental bodies acting as a central coordinator. The company’s platform aims to allow applicants, from a single business owner to large-scale communities, to propose energy generating projects, which can be viewed and approved by a community of financers anywhere in the world. Approval of a project, construction of the DRE system, and even future payments for energy use are all conducted utilizing the Blockchain platform.

While the use of Blockchain technology is originating in areas typically underserved by traditional electrical grids, proponents argue that the platform’s built-in efficiencies will result in the technology one day competing with traditional utility owned grids on a worldwide basis. In fact, some companies are already taking steps towards this goal. For example, a microgrid is currently being installed in Brooklyn, New York, which will allow users to generate and sell renewable energy throughout their neighborhood. While it is still unclear what larger role DRE systems will play in future energy networks, the marriage between DRE and Blockchain creates a new playing field for alternative energy generation and delivery.

TAGS: Air, Climate Change, Greenhouse Gas, Sustainability

PEOPLE: Steven R. Englund

April 17, 2018 CWA Regulation of Groundwater: Circuit Split or U.S. EPA Rulemaking?

Siros By Steven M. Siros   Discharge

Recent decisions from the Fourth and Ninth Circuitsfinding that the Clean Water Act (“CWA”) could regulate discharges into groundwater that ultimately migrate into navigable waterwaysmay prompt U.S. EPA to revisit its position that the CWA applies to discharges from a “point source via ground water that has a direct hydrologic connection to surface water.” On April 12, 2018, the Fourth Circuit concluded that a release from pipeline that impacted groundwater that ultimately discharged to a nearby creek could trigger liability under the CWA.  See Upstate Forever v. Kinder Morgan Energy Partners, L.P. (4th Cir. April 12, 2018). This decision follows on the heels of a Ninth Circuit decision affirming a district court's decision allowing a CWA citizen suit to proceed that alleged CWA violations associated with sanitary wastewater discharges through permitted underground injection wells that ultimately discharged into the ocean. See Hawai’i Wildlife Fund v. County of Maui (9th Cir. Feb. 1, 2018). Defendants are likely to seek Supreme Court review of both the Fourth and Ninth Circuit decisions.

Following the Ninth Circuit decision, on February 20, 2018, U.S. EPA issued a notice seeking comment by May 21, 2018 on whether it should review and potentially revise its previous positions on groundwater discharges; specifically, whether it is consistent with the CWA to subject discharges to jurisdictional surface waters via groundwater to CWA permitting. U.S. EPA also is seeking comment on whether some or all of such discharges are addressed adequately through other federal authorities, existing state statutory or regulatory programs, or through other existing federal regulations and permit programs. It will be interesting to see where U.S. EPA ultimately comes out on this issue; U.S. EPA filed an amicus brief urging the Ninth Circuit to affirm the district court's decision that discharges reaching navigable waters through groundwater are covered by the CWA. However, statements in U.S. EPA’s request for comments would seem to suggest that U.S. EPA is rethinking its position on this issue.  We will continue to follow and provide updates as this process unfolds. 

TAGS: Climate Change, Sustainability, Water

PEOPLE: Steven R. Englund, Steven M. Siros

March 30, 2018 U.S. EPA Removes Portion of Former Refinery Site from NPL: Precursor to More Expedited CERCLA Cleanups?

Siros

 

By Steven M. Siros Pacific Coast Pipeline

After almost 30 years having been listed on the NPL, U.S. EPA has removed the surface portion of the 55-acre Pacific Coast Pipeline site from that distinctive list.  Since being added to the NPL in 1989, more than 42,000 cubic yards of contaminated soils have been removed from the site and a multi-layer cap has been installed. The groundwater portion of the site will still remain on the NPL in order to address benzene and protect drinking water and agricultural wells.

One goal of EPA Administrator Pruitt’s Superfund Task Force was to improve and expedite site cleanups and accelerate full and partial deletions for sites that meet all applicable requirements. “The partial de-listing of the Pacific Coast Pipeline site is an example of EPA’s commitment to accelerate the remediation of contaminated sites and transform them into productive assets for the community,” said Pruitt.

Whether this partial NPL deletion is a precursor of U.S. EPA taking a more streamlined approach to CERCLA cleanups remains to be seen, but it would appear to be a step in the right direction.

TAGS: Climate Change, Hazmat, Sustainability, Water

PEOPLE: Steven R. Englund, Steven M. Siros

March 27, 2018 Townships Look to Take the Air Out of Wind Farm

 By Matthew G. Lawson  Wind

NextEra Energy Resources LLC (“NextEra”), the largest generator of wind energy in North America, is currently locked in legal disputes with local townships over its new wind energy project, the “Tuscola Wind III Energy Center.”  NextEra’s subsidiary, Tuscola Wind III LLC (“Tuscola”), plans to construct the 55 turbine wind farm across the Fairgrove, Almer, and Ellington Townships of Tuscola Country, Michigan.  The project, if completed, will be the third wind farm constructed by NextEra in Tuscola County.  The proposed $200 million dollar wind farm is projected to supply wind energy for up to 50,000 homes.

After reaching agreements with nearly 100 landowners to secure land for the project, Tuscola submitted a Special Land Use Permit (“SLUP”) to the local townships for construction and operation of the wind farm.  However, two of the townships, Almer and Ellington, denied the permits and enacted one year moratoriums on the construction of wind farms.  According to Tuscola, its permits were blocked by newly elected members of the Townships’ Boards who were affiliated with a regional anti-wind citizens advocacy group.  The company alleged that the organization was engaged in a systematic effort to block the Tuscola project and that the group had used “tactics of intimidation, threats of lawsuits, referenda, and recalls . . . in an effort to prevent the development of wind projects.”

The company is now fighting back.  In lawsuits filed in the Eastern District of Michigan, NextEra is seeking to have the Board of Trustees’ denial of the SLUP overturned.  On November 3, 2017, the district court issued its first decision on the matter, affirming the denial of the SLUP by the Almer Township.  The court found that the Township’s Board had properly denied the application after it determined that the purposed wind farm would violate Almer’s noise zoning ordinance. The court noted that although Almer’s noise ordinance was admittedly ambiguous, the Board should be provided deference to interpret the meaning of its own ordinance.  Finding that the board’s interpretation of the ordinance was reasonable, the court elected not to overturn the decision.

On March 13, 2018, the district court reached a markedly different result in Tuscola’s parallel suit against the Ellington Township.  Here, the District Court overturned the Ellington Township’s denial of the SLUP.  Unlike the Almer Township Board, it appears Ellington’s Board refused to even consider the merits of Tuscola’s SLUP, and relied entirely on its newly enacted moratorium to block consideration of the application.  The Court concluded that the township’s moratorium was an inappropriate suspension of its zoning ordinance, and was thus void.  Therefore, the Board could no longer rely on the moratorium as a reason to refuse to consider the SLUP application.  Left open by the decision was whether Ellington could successfully deny the SLUP on other grounds or what timeframe the township had to approve/deny the permit.  Interestingly, the Ellington decision arrived exactly one day after the district court reaffirmed its earlier holding in the Almer case (Both decisions were authored by the same Judge). 

Finally, in the newest twist, landowners of property proposed for the Tuscola Wind III site have now filed suit in Tuscola County Circuit Court seeking a court order to ouster the newly elected board members alleged to be part of the anti-wind organization. The ultimate resolution of Tuscola’s dispute may end up relying in part on the success of this new suit.

TAGS: Air, Climate Change, Sustainability

PEOPLE: Steven R. Englund, Anne Samuels Kenney (Andi)

March 23, 2018 Congressional Spending Bill Provides Boost to EPA, DOE in Rebuke to Trump Administration Budget

As we previously reported on here, the Trump Administration earlier this month proposed a $2.7 billion budget reduction for U.S. EPA. However, Congress has passed a spending bill that rejects reductions to both U.S. EPA and the Department of Energy.  Trump signed the bill today.

As reported here, as to the U.S. EPA, Congress proposed holding the agency’s funding at $8.1 billion, even with the 2017 level.

And, at the DOE

  • $6.2 billion for the Department of Energy’s Office of Science, an $868-million jump from the 2017 level. Trump had sought to cut its budget to just under $4.5 billion.
  • The omnibus includes an increase of nearly $1.5 billion in DOE clean energy funding, including a 14% increase to the renewable energy and efficiency office, and a 16% increase at the Advanced Research Projects Agency-Energy (ARPA-E). Trump had sought to cut the renewables office by 65% and eliminate ARPA-E.
  •  The Office of Fossil Energy would increase by 10%, the nuclear office by 19%, science office by 16%, and the energy office by 8%. The loan programs office would be preserved, as would funding for carbon capture and storage. 

These avoided spending cuts and/or spending increases are an encouraging sign for environmentalists and other clean tech advocates.

TAGS: Climate Change, Sustainability

PEOPLE: Alexander J. Bandza

March 15, 2018 In the Absence of Any Federal Movement, States Continue to Attempt to Legislate Carbon Rules or Taxes

By Alexander J. Bandza CO2

As reported in Salon and Law360 (sub. req.), states, the “laboratories of democracy,” continue to attempt to experiment with legislation carbon rules or taxes. Washington and Oregon are the latest examples, although such efforts have so far failed. Washington’s proposal would have taxed carbon emissions, whereas Oregon’s proposal would have established a cap-and-trade program.

After the Washington tax bill failed, a coalition of environmental, community and labor groups filed a proposed citizens’ initiative that would put a price on carbon emissions. The proposal would charge $15 per metric ton of carbon content of fossil fuels and electricity sold or used in the state starting in 2020. It would increase by $2 a year in 2021 until the state meets its carbon emissions reduction goal for 2035.

As of February of this year, as reported in Law360 (sub. req.), 10 states have released bills to combat climate change and raise revenue by using the tax system, with some 30 different bills in play. According to this report, the range of carbon taxes are from $5-35/ton (bills in Vermont set the base rate at $5 per ton of carbon while bills in New York set it at $35 per ton).

These state-level efforts underscore the challenge of convincing the public and a broad base of stakeholders to act on a problem that Congress first tried to address over a decade ago, most famously through the McCain-Lieberman Climate Stewardship Act of 2003 and the Waxman-Markey American Clean Energy and Security Act of 2009. Interestingly, it may be this patchwork of state-level action that induces Congress to act sometime in the future.

TAGS: Air, Climate Change, Greenhouse Gas, Sustainability

PEOPLE: Alexander J. Bandza