MDEQ requests access regardless of previous environmental reports showing no levels of contamination.  While the prior reports do not constitute a final closure of a LUST site, they may demonstrate that these old sites do not pose a threat.  Presumably, the MDEQ’s effort will result in a reduction in the number of listed contaminated sites throughout Michigan.

If an owner requests additional information, such as a work plan, or somehow delays a response to the request, the MDEQ may classify such a response as a “denial”.  In the case of a denial for access, the MDEQ will refer the matter to its Compliance and Enforcement Section for further evaluation.  The MDEQ may then conduct a liability determination, which may take several months, to determine if the owner is a liable party.  If liable parties are identified, the MDEQ will issue a request under Part 213 for the owner to conduct an initial assessment report or a final assessment report regarding the open LUST release.

If a liable party cannot be found, the site will revert to “orphan” status and the State will continue to spend resources to investigate the LUST release at the site.  Court proceedings may be necessary to obtain access.

The MDEQ will typically not provide a complete work plan to the Owner when it requests site access due to time and budget constraints.  The owner is typically allowed to take split samples of soil or groundwater samples.  Owners have an option to conduct additional work at their sites to control information and otherwise acquire information relevant to the MDEQ’s request.  Where time has lapsed and other contaminants may become relevant, it is important to enlist the support of a competent environmental consultant as well as a lawyer to determine the best course of action.

Although the agencies tried to make it a general discussion on oil and gas, the presentation and most of the questions from the audience focused on the controversial topic of fracking….and it was clear the local police and the agencies were prepared for potential trouble as there were six conservation officers and three police cruisers in the parking lot.  (A clear difference from other DNR/DEQ presentations I’ve attended in the past!) Despite the controversial topic, decorum was maintained and there were no disturbances.

The issue of fracking has been getting a lot of press recently but companies have been doing it in Michigan in a lesser but somewhat comparable form since 1952. Since that time more than 10,000 fracking wells have been installed in Michigan, mostly in a geological formation called the “Antrim Shale.” Since 1925 a total of 60,000 oil and gas wells have been drilled; of those 4,500 have been for oil, 11,000 have been for gas and 3,000 have been for gas storage.

About 80% of the wells drilled in Michigan (and the U.S.) recently have been fracking wells and the natural (methane) gas produced from those wells have caused the price of natural gas to plummet in the U.S. to $2 per million British thermal units (compared to $10 in the U.K.)   According to some analysts (as noted in this recent Washington Post article), this gas boom is fueling a revival in American manufacturing – something we desperately need in this country. 

Naturally, this flush of inexpensive gas doesn’t come without weighty public policy issues, and the issues the attendees focused on during last night’s forum are the same being raised elsewhere in the country: contamination of groundwater aquifers and depletion of fresh groundwater. 

According to the DEQ, vertical fracking wells use between 50,000 to 100,000 gallons while some horizontal wells (like most of the current wells) can use up to 20 million gallons of water.  In comparison, total water withdrawals in Michigan in 2010 amounted to 267 billion gallons. (However, the DEQ admitted that most of the later amount returns to the environment while the millions of gallons of water used in fracking are permanently removed from and never return to the watershed due to the contaminants in it.)  Although groundwater used for oil and gas production are exempt from Michigan’s water withdrawal legislation, the Supervisor of Wells issued Well Instruction 1-2011 which allows the DEQ to use Michigan’s water withdrawal assessment tool to determine if a proposed gas well will have an adverse impact on stream flow.  If such an impact is identified, the DEQ does not issue a permit. 

The DEQ also asserted that claims about “flaming tap water” (as seen on YouTube) due to fracking are false and the instances where it has occurred are not due to the fracturing of bedrock but methane leaking around improper well casings (or methane naturally seeping into an overlying aquifer).  According to the DEQ, Michigan’s well casing requirements prevent this from happening. In Michigan, drillers are required to use several corrosion resistant metal casings (conductor, surface, intermediate, and production casings) that are cemented together to seal off the well from the surrounding environment. (A diagram of the typical well is depicted to the right.)

If these requirements are followed, according to the DEQ, the risk of a well contaminating groundwater is very low. 

All in all I think the DEQ/DNR did a good job at trying to explain the issues and point out some facts to ameliorate the public’s concerns but I don’t think the issues, especially the water withdrawal issue, will be going away any time soon.  As with everything, the goal will be trying to find the right balance.

Additional information about the location and type of wells currently in Michigan can be accessed here and the DEQ’s GIS database (GeoWebFace) of oil and gas related information can be accessed here. 

Tax increment financing (“TIF”) is used by many owners of property to finance previously incurred eligible environmental costs.  In essence, TIF uses increased tax revenue to reimburse owners for eligible costs.  Developments of obsolete or contaminated property often result in an increase in the taxable value of real property which, in turn, cause additional tax revenue to be generated.  Under a Brownfield TIF arrangement, instead of a source of additional funding for governments, the incremental increase in the tax revenue is used to pay eligible costs incurred by a developer through a reimbursement agreement with the local community.

Now that the City of Detroit has an EFM, those involved in Brownfield Plans should be aware of potential consequences.  The new EFM, Kevyn Orr, has yet to use his incredibly broad legal powers to invalidate Brownfield plans or reimbursement agreements or portions of them in Detroit, but he has started to use these powers to assert control over union contracts (see Detroit News, 4/23/13).  A unilateral termination of the entire agreement or portions of it are clearly within his powers.  This means that developers counting on reimbursement through a TIF arrangement may be disappointed when a EFM terminates such arrangements.

A strategy that might be employed by an EFM, based on our sources, is to request a status report from each person benefitting from a Brownfield plan or reimbursement agreement.  If the audit shows little or no economic benefit to the local community, the agreements could be terminated and TIF would no longer be available and, as a result, the governmental entity would not be obligated to reimburse those owners for such costs.

It might be wise for Brownfield plan beneficiaries to consider how to respond when such questions are asked.  Further, it may be important for one to proactively communicate directly with the EFM to stave off any potential for such documents to be terminated or rejected.  We will continue to monitor not only Detroit’s situation but others as EFMs are appointed for governments throughout Michigan.

At issue was an ongoing dispute over the discharge of channeled stormwater runoff from logging roads in Oregon’s Tillamook State Forest.  This stormwater is generated when rain runs off of logging roads and travels from ditches onto rivers and streams depositing sediments.    The Northwest Environmental Defense Center (NEDC) sued logging and paper companies that were lawfully logging in the State Forest; alleging that they had violated the Clean Water Act.  Specifically, the NEDC alleged that the stormwater run-off from an active logging road constituted an unpermitted discharge of a pollutant from a point source, that posed a risk to endangered species and aquatic life.

In 2007 the District Court in Northwest Environmental Defense Center v Brown, 476 F.Supp.2d 1188 (D. Or., 2007) held that NPDES permits were not required because the channels that received the stormwater were not point sources under the Clean Water Act and that the “Silvicultural Rule” did not require a permit pursuant to 40 CFR §122.27(b)(1).  In 2011 the U.S. Court of Appeals (Ninth Circuit) reversed this ruling and held that, in fact, these logging roads were point sources and were not exempt from permitting requirements under the applicable industrial stormwater rules.  [See Northwest Environmental Defense Center v Brown, 640 F.3d 1063 (9th Cir. 2011.]

The U.S. Supreme Court accepted the EPA’s position that the logging roads did not constitute an industrial activity and the roads were only related to the harvesting of raw material for which a NPDES Permit was not required.  The Court in giving deference to EPA’s opinion, agreed that the water conveyance at issue did not directly relate to the “manufacturing, processing, of raw materials, storage areas at an industrial plant” (40 CFR §122.26(b)(14).   For that reason, the Supreme Court reversed the Ninth Circuit decision and held the activity did not come within the scope of the industrial stormwater rule.

Justice Scalia issued a separate opinion dissenting in part, with the majority opinion, on the issue of giving deference to the EPA’s interpretation of a regulation, when it is at odds with the natural reading of the regulation.

The American Forest and Paper Association has come out in support of the decision and repeated its position that runoff from logging roads has been successfully regulated through best management practices employed by the industry for over 35 years.

It is interesting to note that in advance of oral arguments before the Supreme Court, the EPA clarified in the “Silvicultural Rule” and stated that NPDES permit requirement do apply to logging operations that involve rock crushings, gravel washing, log sawing and log storage.  These are all activities enumerated in the Silvicultural Rule.  In response, the NEDC has filed a petition to review this rulemaking by EPA.

More recently the GSA issued a report of its evaluation of three different green building certification programs: LEED, Green Globes and the Living Building Challenge.  The GSA concluded that while each program has certain relevant applications, none meets all of the Federal government’s needs. Throughout 2012, the GSA’s Discussion Group collected public comments on its evaluation which can be reviewed at the link above.

On February 5, 2013, the GSA published a notice in the Federal Register (78 Fed Reg. 8145), seeking additional comments on the following GSA findings:

• Federal reliance on the private sector for the green building certification systems saves government resources. 

• Federal guidance should be developed that identifies the credits/points that all agencies should focus on. As part of this, the GSA determined that only one system should be relied upon at the agency level and use of multiple systems should be based on a finding that the agency’s structure supports it. The GSA also determined that the systems are flexible enough to develop applications to all building types if the Federal agencies have the right direction on how to use them.

• The Federal sector should stay current with the evolution of green building certification systems. As part of this process, the GSA made the following additional findings: that the Federal sector should adopt a new version of a system within one year of its finalization; that the major Federal real property holders should periodically review green building certification systems, and the GSA should coordinate with the Department of Energy and Defense in its evaluation of these systems. 

• The Federal government should work with green building certification system owners to ensure better alignment with Federal needs.

Interested parties have 60 days after publication of the February 5, 2013 notice (i.e., April 5, 2013) to provide their comments on the findings. 

The Supreme Court recently agreed to hear arguments in the matter of

The Tarrant case is a dispute between Texas (Tarrant, Texas Regional Water District) and Oklahoma over water located in the Red River. The Texas Water District believes it has a right to access water in the Red River in Oklahoma pursuant to an agreement signed by Texas, Oklahoma, Arkansas and Louisiana (the “Red River Compact”).  Siding with Oklahoma, the lower agreed that Texas is only guaranteed a certain minimum downstream flow under the Compact. In this context, the case appears to have very little to do with the compacts governing water use within the Great Lakes basin.

However, it’s the Water District’s constitutional argument that the Great Lakes States and Canada should pay attention to.  The Water District claims that the “protectionist” character of the Red River Compact violates the dormant Commerce Clause of the U.S. Constitution.  The Commerce Clause of Article 1 of the U.S Constitution gives Congress the exclusive authority to regulate interstate commerce.  The dormant Commerce Clause is the legal theory that because Congress regulates interstate commerce, States cannot enact legislation that unreasonably restricts interstate commerce and prevents States from being “protectionist” with their natural resources.

According to the Water District, the Supreme Court has consistently required that Congress unambiguously acknowledge and approve a statute’s or a Compact’s unreasonable restrictions on interstate commerce and cited Sporhase v. Nebraska, 458 U.S. 941 (1982) and South-Central Timber v. Wunnicke, 467 U.S. 82 (1984) in support of its position.  In the Water District’s view, Congress has to explicitly approve the restrictive nature of the Compact and Congress’ intent cannot be gleaned by looking at the restrictive language in the Red River Compact as a whole.  

The two main compacts affecting the Great Lakes are the Great Lakes Charter and the Great Lakes St. Lawrence River Basin Water Resources Compact.  A detailed description of the scope of each is beyond the intent of this article, but the following provides a brief summary of each: 

• Great Lakes Charter / Annex 2001.  Established a cooperative arrangement between the Great Lakes States and Ontario and Quebec whereby each party agreed to provide notice to each other and to consult on any proposed diversions of water from the Great Lakes Basin. 

• Great Lakes – St. Lawrence River Basin Sustainable Water Resources Agreement / Great Lakes St. Lawrence River Basin Water Resources Compact.  Established the structure that the Great Lakes States and Provinces use to manage water withdrawals from the Great Lakes Basin.  In particular, the agreements call for an outright ban on new diversions of water from the Basin and grant only limited withdrawals for use by communities within the Basin.  The agreements are managed by two governing bodies:  the Great Lakes – St. Lawrence Water Resource Regional Body and the Great Lakes – St. Lawrence River Basin Water Resources Council.  Congress consented to and approved the Water Resources Compact in 2008 by enacting Public Law 110-342.

Depending on how the Supreme Court rules in the Tarrant case, if the Red River Compact falls, it could put the Great Lakes Compacts on shaky ground.   Although Congress approved the Compact in Public Law 110-342 in 2008, it did not make any statement that it was explicitly authorizing the Compacts’ unreasonable restraint on interstate commerce.  Although such an intent could be inferred from Congress’ approval of a Compact that clearly calls for a ban on out-of-Basin diversions, this is the type of argument that the Tarrant case has called into question.  Therefore, if the Supreme Court adopts the position of the Texas Water District in the Tarrant case, the Great Lakes Water Resources Compact could be subject to a challenge by a non-Great Lakes State that was interested in establishing a pipeline from the Great Lakes to an arid out-of-Basin area. 

Such an outcome could be like manna from heaven for southern arid States as they might argue like the Water District in the Tarrant case:

“ [The strain on western water supplies] makes appropriations by arid western states from water rich neighboring states essential, but by encouraging the ‘tendencies toward economic balkanization’ that the Commerce Clause was intended to prevent, the decision below may make such appropriations effectively impossible. Localities blessed with substantial water reserves now are free, under the Tenth Circuit’s rule, to hoard water while their immediate neighbors go dry.”  Pet. at 26.

Clearly, with water supplies becoming more scarce in arid States, they have an increased interest in tapping into States with abundant water resources.  We will track this case and provide more information when it becomes available. 

Apparently what 99% of the populace would probably consider to be one of the primary benefits of electric vehicles is considered a dangerous condition by the Feds. According to NHTSA the reason the rule is necessary is because some studies have shown that during “low-speed maneuvers” an electric vehicle is 1.38 more times likely than a normal combustion engine to be involved in a collision with a pedestrian and 1.33 times more likely to be involved in a collision with a cyclist. Further, if the rule is implemented, NHTSA claims that it will result in 2,800 fewer injuries (not each year mind-you) over the lifetime of a model year of vehicle. (By contrast, bicycles (equally quiet) cause 1,000 injuries per year in New York City alone.)

One would think that electric vehicle manufacturers would be lining up to oppose the rules but that isn’t necessarily the case. A whole EV “drive tone” market has popped up overnight and you can listen to samples of some of them by Googling “electric vehicle tones”.  You can listen to some EV tones being considered by Ford here.  Personally, I’m hoping for cars with a light saber-like sound.

The press release, notice of proposed rulemaking and environmental assessment can be accessed here. The public has 60 days to submit comments on the proposed rule. Comments can be submitted online at: http://www.regulations.gov or by mail to: Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm W12-140, 1200 New Jersey Avenue, S.E., Washington, D.C. 20590.

A party undertaking a remediation can now make a formal request for a “Certificate of Completion” to the MDEQ.  The applicant would complete a form, which is to be prepared by the MDEQ and will be made available on the MDEQ’s website.  The MDEQ can either grant the Certificate, deny the request, or notify the submitter that there is insufficient information on which the Department can make a decision.  The Department shall specify what information is missing and is necessary for a decision.  In the event of a denial, the Department is to provide specificity as to the reasons for the denial.

The amendments set forth an initial review period by the MDEQ of 150 days upon receipt of the form.  There is only a 90 day review period in the event the submitter is requesting the Certificate of Completion after completing an MDNR approved remedy remedial action.  In the event the Department fails to provide notice within the review time periods provided, a response activity is considered approved.

In the event there is a denial by the Department of a request for a Certificate of Completion, the amendments provide the submitter with opportunities to pursue an appeal of the MDNR’s decision to the Response Activity Review Panel.  The submitter would file a petition appealing the decision to the MDEQ Director and pay a fee of $3,500.

In the December 2010 amendments to Part 201, the process for issuing a No Further Action Letter (NFA) was first developed.  The NFA Letter has been only granted in a few occasions, and has generally been reserved for small clean-ups achieving residential criteria.  This was not consistent with the intended purpose of the NFA review process, and the MDEQ has, at least informally, suggested it is more open now to the evaluation of No Further Action Reports upon completion of more remedial action projects.

By contrast, the NFA review process is much more complex than the request for a Certificate of Completion.  If a party is concerned about the administrative costs associated with pursuing an NFA Letter, the Certificate of Completion does provide a much needed acknowledgement from MDEQ and a defined “end point” for parties undertaking clean-up.

The recent amendments to the provisions associated with the NFA request is a clarification that a party can pursue an NFA letter for a specific portion of a whole site, or  specific media or exposure pathway.  While many believe that the NFA provisions as originally drafted did allow for such limited requests, it took these amendments to make that clarification.