Archive for the ‘Environmental Justice’ Category

Do We Have Your Attention Now?

via WikiMedia Commons

via WikiMedia Commons

Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully. – Samuel Johnson

Nobody ever said it would be easy. There’s lots of natural gas in the ground. We’ve been siphoning it up from the ground for years. But supplies dwindled as traditional fields yielded less and less gas. Fracking has brought a new production bonanza to states around the Union. Inevitably, protests have come hand in hand with increased production. This summer has been dubbed #FearlessSummer by environmentalists opposed to the extraction and carbon energy industries.

Fracking is dirty work. It can pollute ground water, endangering wells and agricultural water, and it produces a tremendous amount of waste. The byproduct of fracking is a wicked stew of proprietary chemicals and water used to force natural gas out of its ancient hiding places underground.

One of the sources of particular ire in the environmental circles is the seeming impunity with which energy companies have been able to pursue natural gas over hill and under dale. The companies rely on eminent domain to site their drilling rigs, and have been largely shielded from liability for environmental damage they have caused while feeding the country’s unquenchable demand for energy.

XTO Energy, a subsidiary of ExxonMobil settled with the Environmental Protection Agency over a 50 thousand gallon spill of fracking slurry at one of its storage tanks in Pennsylvania. Without admitting liability, it agreed to pay a $100,000 fine and implement a more rigorous waste water management regime. It also hauled away some 3,000 tons of contaminated soil.

All well and good as far as the Feds and XTO were concerned. Environmentalists,  not so much. Also not so pleased – the Pennsylvania state Attorney General. Last Tuesday, Attorney General Kathleen Kane filed criminal charges against XTO over the 2010 spill. Not civil. Criminal. That’s a first. No other Marcellus Shale production company has ever faced criminal charges.

Environmentalists are giddy over the prosecution, comparing it to the genteel supervision the company has received from state regulators. Energy industry representatives went ballistic, as well they might, accusing Kane of doing some polluting of her own – of the business environment – and sending a “chilling message” to the energy business.

But Kane’s office insists it wasn’t going off half-cocked. “The prosecutorial powers of this office are used carefully and with great consideration,” First Deputy Attorney General Adrian R. King Jr. said through a spokeswoman. “We closely examine the facts and the applicable law in each case and proceed accordingly.” And Kane’s office didn’t arrive at the charges by itself. It was a grand jury that handed down the charges.

Settlements like the one XTO reached with federal regulators are just a cost of doing business for an enormous company like ExxonMobil. Criminal charges, on the other hand, take the risk/benefit calculation to a whole new level. The Pennsylvania charges have ignited a furor and are sure to be fought by an industry red in tooth and claw. But as the good doctor observed to his friend Boswell, the gallows sharpens the mind. The prospect of standing in the dock is likely to do the same for the captains of the energy industry.

 

 

National Flood Insurance and Jersey Shore Demographics

Photo by U.S. Fish & Wildlife Service, some rights reserved.

Back in 1968, Congress stepped into the flood insurance market to provide coverage where private insurers would not. Today, taxpayers back $527 billion of assets in coastal flood plains insured by the National Flood Insurance Program. Run by the Federal Emergency Agency, the program paid out $16 billion of claims for Katrina; Sandy-related claims could reach $12 billion. The program is already $18 billion in debt, as sum the government acknowledges will probably never be covered by higher premiums.

Besides the program’s cost, what is the issue? In New York alone, 200,000 people live less than four feet above the high tide level. Nationwide, the number of people living in flood-prone areas has been increasing, so each natural disaster damages more property and displaces more people than the last. An op-ed in Thursday’s New York Times opines that the time for the federal government to subsidize the insuring of homes and businesses in high-risk flood zones is long past. If property owners cannot find flood insurance on the private market, which in many cases they cannot, they should bear that risk instead of transferring it to the federal government.

One of the implications of changing federal flood insurance would be increased cost of living in coastal areas. Another Times article covers how Sandy and the coming National Flood Insurance Program rate hikes will make “seaside living, once and for all, a luxury only the wealthy can afford.” Building requirements for homes in newly mapped flood hazard zones could effect a demographic shift in the northeast, because much of the development encouraged by subsidized insurance would only be affordable to wealthy buyers.

The wisdom of subsidizing status quo demographics on the Jersey Shore to the tune of $18 billion aside, the point of reducing or eliminating federal flood insurance would be to end the cycle of natural disaster and expensive rebuilding without internalizing the risks of development in flood-prone coastal areas, which in light of recent events are certainly expanding. This is a step toward affordable environmental risk-management most people can back in good conscience.

Supreme Court Backs Away Slowly From Chevron/Ecuador Dispute

Photo by Lita V. Some rights reserved.

In February of 2011, American gas giant Chevron (you know, the one with the cute cartoon cars) was ordered to pay $8.6 billion in pollution damages to by a provincial court the relatively small city of Lago Agrio, Ecuador, which claimed that Chevron (the 2nd largest oil company in the U.S.) had done irreparable damage to the area between 1964 and 1992 under the Texaco banner, another oil company that Chevron now owns. The lawsuit was launched in 1993, and the area affected by the damages has since come to be known as “the Amazon Chernobyl.” Chevron at the time responded by calling the ruling “illegitimate and unenforceable,” countering by suing the plaintiffs (the indigenous villagers of Lago Agrio) for racketeering, and requesting a stay of judgment from an international tribunal in the Hague. A federal judge in New York issued an injunction on the dispute in March 2011, blocking any enforcement on the judgment, which was later overturned by the 2nd U.S. Circuit Court of Appeals on January 26th, 2012.

Fast forward to yesterday, October 9th, 2012. The U.S. Supreme Court heard Chevron’s appeal, and ultimately ruled that it would not intervene and block the collection of legal penalties and damage fees, which now total $18.2 billion, as the original $8.6 billion figure was doubled by the Ecuadorian court when Chevron failed to make a public apology. The Supreme Court ruling came despite the fact that Chevron was backed by the National Association of Manufacturers and the U.S. Chamber of Commerce. The fight over environmental reparations will now continue in district courts in New York, Brazil, and Canada, and may end up back at the Supreme Court before a final verdict is reached. If Chevron is strong-armed into paying the $19 billion in damages, it will be the largest judgment of its kind in history.

Read our previous coverage of this case here.

SEC Requires Disclosure of Energy Company Payments to Foreign Governments

The Securities and Exchange Commission on Wednesday approved rules requiring oil and mining companies to disclose payments made to foreign governments. The rule, under Section 1504 of the Dodd-Frank financial reform law (see the full text here through our Dodd-Frank Tracker), requires SEC-listed oil, natural gas, and mining companies to reveal payments to governments related to projects in their countries, including the type and amount of each payment and their totals every year. Money for production licenses, taxes, royalties, among other payments, fall under the rules.

The SEC vote was 2-1 for the rule, but a two-year battle has been raging behind the scenes. Human-rights groups and the oil industry threw their efforts at influencing the final rule. Groups like Oxfam American and the Revenue Watch Institute joined with other anti-poverty and human rights groups to build public pressure on the SEC to approve the draft rules proposed in 2010. They argued that greater disclosure helps ensure that revenues from energy and mining provide public benefit. Secretary of State Hillary Clinton, noting that the EU is considering similar provisions because of Section 1504, lent her weight toward strong rules.

Oil companies, through the influential American Petroleum Institute, demanded that the SEC scale back the rules from their draft phase. They said the rules would make them less competitive, especially when competing with state-owned firms like Russia’s Gazprom and the China National Petroleum Company. They sought provisions such as allowing aggregate payment information by country, and exemption if host countries prohibited such disclosure.

Both sides agree that the goal of the rules is worthy: The “resource curse,” leaving many energy-rich countries in Africa impoverished by corruption and conflict, must be addressed. In favor of the rule, Luis Aguilar, Democratic SEC member, called on the late Supreme Court Justice Louis Brandeis’s saying that “sunlight is the best disinfectant.” But Republican member Daniel Gallagher argued that an SEC rule is a strange way to achieve social and foreign-policy goals.

The rules don’t leave much middle ground, and the SEC estimates that the rule will carry industry-wide compliance costs of up to $1 billion initially, with annual costs between $200 million and $400 million. The only bone thrown to energy companies is a small one: By leaving out any specific definition of the word “project” (emphasized in the section of the rule entitled ‘Definition of the word “project”’), companies have some discretion in applying the rule to their business.

EPA’s Environmental Justice Efforts Not Quite Up to Snuff, GAO Says

Photo by scottrozic. Some rights reserved.

Last time we touched on the topic of Environmental Justice, the DOE was kicking off The State of Environmental Justice in America 2011 conference. Also in attendance was the EPA, who has been a key federal player in the EJ field ever since Executive Order 12898 charged the EPA with not only promoting environmental justice through its own actions, but helping provide other agencies with guidance on developing environmental justice strategies.

And how has that been going?

Now, we’re not ones to point fingers (well, not always), but the GAO has always been happy to. In a recently released report, the GAO concludes that, “without additional progress […], EPA cannot assure itself, its stakeholders, and the public that it has established a framework to effectively guide and assess its efforts to integrate environmental justice into the fabric of the agency.”

Two months ago, the EPA released Plan EJ 2014 – a “roadmap that will help EPA integrate environmental justice into the Agency’s programs, policies, and activities.” But sometimes even a roadmap could use a roadmap. According to the GAO, the EPA has not developed performance measures for eight of its nine Plan EJ 2014 implementation plans.

GAO is recommending that EPA develop a clear strategy to define key environmental justice terms; conduct a resource assessment; articulate clearly states’ roles in ongoing planning and future implementation efforts; and develop performance measures to track the agency’s progress in meeting its environmental justice goals.

GAO believes that the recommended actions will help EPA ensure clear, consistent, and measurable progress as it moves forward in implementing Plan EJ 2014.

Environmentalists vs…Carbon Cap-and-Trade?

Photo by West Point Public Affairs. Some rights reserved.

A recent Update from ML Strategies (a consulting affiliate of law firm Mintz Levin) tipped us off to an interesting case that pits California’s proposed carbon cap-and-trade system against two environmental justice groups.

Environmentalists were largely united in their excitement over the passage of California’s Global Warming Solutions Act (more popularly known as AB 32), which was signed into law by Governor Schwarzenegger in 2006. The Act directed the California Air Resources Board (CARB), to develop regulations and market mechanisms that would help the state meet its goal of a 25% reduction in greenhouse gas emissions by 2020.

However, the cap-and-trade program that CARB proposed as part of its implementation of AB 32 created a sharp rift among those environmentalists. While many were elated to see the plan take shape, some saw the cap-and-trade program as the “industry-preferred” approach – one that does not require polluters to reduce emissions, rather allowing them to buy “reductions” from other polluters. Opponents of cap-and-trade argue that these polluters are “disproportionately located in low income communities of color.” A 2010 study by the University of Southern California affirms this argument.

In 2009, a group of individuals, along with attorneys from the two environmental justice groups, Center on Race, Poverty & the Environment and Communities for a Better Environment, filed a lawsuit against CARB, arguing that it had violated the California Environmental Quality Act (CEQA) when it failed to analyze and consider alternatives to the cap-and-trade program prior to implementation of AB 32.

(It’s interesting to note that representatives from both the Center on Race, Poverty & the Environment and Communities for a Better Environment sit on CARB’s Environmental Justice Advisory Committee, though perhaps this speaks to the limited influence the Committee ultimately has on CARB’s implementation plans.)

Less than two months ago, a San Francisco Superior Court judge ruled in favor of the petitioning environmental justice groups, and enjoined CARB from any further implementation of AB 32 until it “has come into complete compliance with its obligations under its certified regulatory program and CEQA.”

Pursuant to the judge’s decision, the petitioners were ordered to submit proposed documents (“Writ of Mandate”) to finalize the Court’s order. As explained in the accompanying letter, these proposals limit the scope of the injunction to include only the development and implementation of the cap-and-trade program, in order to allow “the good part” of AB 32 to move forward.

Federal Presence at Environmental Justice Conference

Image courtesy of WILPF. Some rights reserved.

Yesterday, the Department of Energy (DOE) announced that it had “kicked off” The State of Environmental Justice in America 2011, a conference held in Washington, D.C., that runs through tomorrow, April 29th.

Environmental justice, as defined by the conference itself, is “the fair treatment and meaningful involvement of all people—regardless of race, ethnicity, and income or education level—in environmental decision making.”

If it hadn’t been for this announcement, I wouldn’t have known that DOE even had programs devoted to environmental justice. I can’t vouch for the efficacy of the programs, but they have high aspirations:

The Department of Energy (DOE) is committed to environmental justice. We take it seriously. It is a Department-wide activity with Department-wide responsibility. Fair treatment is how we conduct business at DOE. Several of the Department’s Operating Principals memorialize this commitment. We endeavor in all we do to treat people with the dignity and respect they deserve, while keeping our commitments and ensuring safe, secure and environmentally responsible operations.

Well, with one caveat – if you want environmental justice from the DOE, you’d better come prepared:

Meaningful involvement requires that our stakeholders have a working knowledge of the subject matter under discussion, as well as the process for conducting the discussion. In order to be productive participants, all stakeholders must be versed in the subject matter and understand the rules of the process. Otherwise, their participation will not be meaningful.

A little more digging revealed that these programs were developed pursuant to Presidential Executive Order 12898, which was issued in 1994 by Bill Clinton and ordered each and every Federal agency to “make achieving environmental justice part of its mission.” As a part of the Order, the EPA was made head of an Interagency Working Group to help provide other agencies with guidance on developing environmental justice strategies and “identifying disproportionately high and adverse human health or environmental effects on minority populations and low-income populations.” You can read more about the EPA’s environmental justice efforts here.

As for the conference, this year’s theme is “Building the Clean Energy Economy with Equity,” and, in addition to the DOE, brings together representatives from federal agencies such as the Department of Agriculture, the Department of the Interior, and the EPA, as well as participants from academia, business and industry, nonprofits, religious organizations, and local activists.

On the agenda? “Environmental Justice and Lessons Learned from the Gulf Coast Oil Spill,” “Energy Sources & Tribal Matters,” and “Health Disparities” are just some of the panels and discussions offered at this year’s event.

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