Posts in Category: Energy

All the high fives money can buy

As much as the natural gas industry complains about the costs of environmental compliance, it spends a great deal of time and money fighting to keep hydraulic fracking unregulated, and its claims of safety and economic prosperity unquestioned. Their campaign to put a happy face on this harmful technology is designed to stifle the growing movement to ban fracking across the country: to date, at least 76 local and state governments have passed laws banning the practice within their borders.

As Wenonah Hauter over at Huff Post observed, the industry spent over $145 million lobbying Washington in 2010, making it one of the top five industries spending big money to buy influence — and it seems to be working: In January 2011, bipartisan congressional members of the Natural Gas Caucus opposed proposed U.S. Department of Interior rules to disclose fracking chemicals used on public lands; this caucus’ 83 members received a combined $1,742,572 in campaign contributions from the oil and gas industry between 2009 and 2010, according to a Propublica investigation.

By now, you may have seen an industry ad like this, talking up gas as a means of American energy independence and prosperity, but what they don’t say is that there are plans to export it to China and India — and profits too, as these companies are increasingly multinational or even foreign-owned.

Their hired PR guns also come out blazing when unfavorable coverage of the industry erupts, as it did in the New York Times, when reporter Ian Urbina exposed industry insider emails questioning the favorable forecasts the industry has put out on fracking — one insider going so far as calling drilling leases “Ponzi schemes.” As Politico reports, John Hanger, once secretary of the Pennsylvania Department of Environmental Protection and now an environmental consultant, compared Urbina to Judith Miller and Jayson Blair, saying “This is not their [the Times‘] first rogue reporter.”

The Marcellus Shale Coalition (whose members have a financial stake in fracking the Marcellus shale) spent a total of $1.8 million on its PR initiatives in 2009, while the Independent Petroleum Association of America (IPAA) has an $8 million budget, according to the Pittsburgh Tribune-Review. One of IPAA’s initiatives is Energy in Depth, a web site devoted to debunking the documentaryGasland.

Now, the American Petroleum Institute (API) is poised to spend $20 million on an “advocacy campaign”. We don’t know for sure, but given the industry’s difficulties in defending fracking over recent months, we bet this money will go towards a campaign that will continue to spin fracking as a safe means of achieving prosperity and energy security.

How does the industry keep contamination under wraps? It pays settlement fees to families whose water has been contaminated by shale gas drilling — fees that hinge on the landowner signing a confidentiality agreement to keep details about the case from government agencies, the media and the public.

As highlighted in a recent New York Times article, the industry pays to keep details of the public safety problems associated with gas drilling hidden from government agencies that could do something to regulate it. This has been happening for decades, and it allows the industry to continue using one of its most disingenuous talking points: that there have been no documented cases of contamination from gas drilling.

In May, New York Attorney General Eric T. Schneiderman sued federal agencies to provide a full environmental review of fracking in the Delaware River Basin since it could affect the drinking water of nine million New Yorkers.

API, IPAA and the US Oil & Gas Association intervened in the case, arguing that its members would be adversely affected. But two of the 10 federal agencies sued by Schneiderman have actually supported further review of fracking — the National Park Service and the U.S. Fish and Wildlife Service.

Recently, Wellsburg, West Virginia rescinded a ban on shale gas drilling. It appears that one reason for this might be that Chesapeake Energy recently rescinded its funding for the community’s school music program in direct response to the ban. $30,000 might not seem like a lot, but for a struggling rural school system, it certainly is no small potatoes.

A more straightforward example of how the industry buys influence beyond Washington is in New York State, where the oil and gas industry spent $1,204,567 lobbying against fracking moratorium bills in 2010, outspending groups supporting the bills 4 to 1.

Spending big money to influence policy in New York paid off for the industry. The New York Department of Environmental Conservation released a report early last month suggesting that 85 percent of the Marcellus Shale be opened up to fracking, and Governor Andrew Cuomo appears to be on board.

The industry hires academic shills who prepare reports that shine a rosy light on the industry — while glossing over serious concerns. In June, an MIT report titled, “The Future of Natural Gas” was funded by the oil and gas industry. As they write on their site:

In FY 2010, MIT’s industry-sponsored research totaled $111 million. More than 800 firms now work with MIT, both in Institute-wide programs such as the Industrial Liaison Program and the MIT Energy Initiative and in smaller collaborations… More than 180 companies partner with the program to improve their access to MIT and advance their research agendas [emphasis added].

Penn State also recently released a pro-fracking report funded by the Marcellus Shale Coalition. Media Matters for America recently took the New York Post to task for citing the report in an editorial supporting fracking, without mentioning the industry group that actually paid for it.

This happens all too often, and is a way for the industry to launder credibility for its position through third-party academic institutions.

At a June hearing in Washington, Pennsylvania, numerous landowners who had leased their land to gas drillers appeared at a hearing to talk about the benefits of fracking. But it’s what got them there that’s the interesting story: they were offered Pirates tickets, in addition to hotel rooms and travel expenses. That was one way the industry assured that the spaces at the hearing would be filled with pro-drilling voices.

It’s not much better in Washington, D.C. At the July 13 meeting of the Natural Gas Subcommittee of the Secretary of Energy, Advisory Board Safety on Shale Gas Development, the industry overwhelmed the proceedings (click here to see testimony.)

Microeconomics of Green Jobs

Does a particular green policy create more jobs than it destroys?

A policy is green if it lowers our use of resources and/or environmental impact.  If a green policy is also a net creator of jobs, everyone should agree that it is a good policy. It should be implemented.  End of story.  Green policies which destroy jobs, on the other hand, will require further analysis as to whether the environmental and health benefits outweigh the economic losses.  That’s a question which requires putting relative value on various benefits, and cannot be resolved purely by economic reasoning.  But  the first point bears repeating: if a green policy is also net job creator, everyone should agree that it is a good policy and should be implemented.  Identifying those policies is simple.

Which Policies are Net Job Creators?

There are two ways a policy can increase or decrease economic activity and hence number of jobs.

  1. Jobs can be created or destroyed by substituting labor for capital, energy, and/or other resources in production.
  2. If a policy increases economic efficiency, it will increase economic activity and create jobs. If it decreases economic efficiency, it will reduce economic activity and destroy jobs.

Substituting Labor for Energy or Capital

Marginal rate of Technical Substitution.

Image Source: Wikipedia

A basic tenet of microeconomics is that there is a tradeoff between capital, labor and natural resources such as energy in the production function. In particular, you can substitute capital for labor (by mechanization) or labor for capital (by using shovels and picks instead of bulldozers.) Now add energy into the mix: you can substitute fossil energy for either capital or labor to attain the same production.

For example, a hybrid car.  It substitutes capital and resources (in the form of an electric motor and batteries) for energy (less fuel consumed to do the same work.) A bus substitutes labor (the bus driver) for capital, resources and energy (lots of cars and fuel consumed.) A green building substitutes labor (better architecture/construction) and some resources (extra insulation) for energy.

From this perspective, any policy that promotes the substitution of labor for energy will create green jobs, since you get more work and less energy consumed. Shifting people out of their cars and onto mass transit will create jobs because there will have to be drivers and people managing the transit system, where before no one was paid to drive. To the extent that the transit system can be paid for out of the reduced fuel costs and car ownership costs of the former drivers turned riders, the number of jobs created will be a pure economic gain.

Multiplier Effects

Which brings us to the other major potential source of jobs from green policies: economic multiplier effects.

To the extent that green policies improve economic efficiency by overcoming the barriers to cost effective green solutions, these policies will result in greater economic activity, and hence more jobs. The strongest critique of “green jobs” initiatives is that they simply shift economic activity from out-of-favor “brown” sectors to more politically correct green ones. Yet when a policy improves economic efficiency, it does not just shift jobs and capital around in the economy: it creates economic activity and jobs.

Not all green policies improve economic efficiency. For example, subsidies for not-yet-economic types of renewable energy like wave power and solar installations may be justifiable on the grounds that they are helping to promote needed future technologies, but they probably come at a net cost to near-term jobs (even if they may create more jobs in the long term by allowing the creation of new types of businesses.)

On the other hand, policies to promote energy efficiency will be strong net creators of jobs, because the cost of energy efficiency is typically only a fraction of the cost of the energy saved. The very existence of opportunities to save significantly on energy bills at modest cost is proof that the energy market is inefficient. In an efficient market, all such opportunities would have already been taken.

After the energy efficiency measure has been installed, the cost savings can be used for useful economic activity, rather than wasted on unneeded fuel. This money will then spur additional activity and stimulate jobs.

Using Fossil Resources to Stimulate Growth is Like Stimulating Growth With Debt

Short term jobs (green or otherwise) should not be the only consideration when forming policy. A short term focus on jobs today can end up doing long term economic harm. For instance, if we spend too much borrowed money to create jobs today, the long term drag on the economy caused by paying back the debt will leave everyone worse off.

Economic growth fueled by the extraction of non-renewable resources — natural gas, oil, coal — is no different from economic growth fueled by debt. When we extract these resources and use them, we increase economic activity today, but their non-renewable nature means that we lose the opportunity to extract and use them tomorrow. Hence, the economic stimulus today comes at the cost of a recession tomorrow, and the future recession will generally be larger than today’s stimulus, since improving technology should allow us to get more benefit from each unit of resource in the future.

Using renewable resources to stimulate growth does not have this problem: Tapping the wind or the sun for energy today does nothing to diminish the wind or sun tomorrow. Hence, to the extent a green job relies on renewable resources and a brown job relies on fossil resources, the green job should be preferred every time, even before taking the environmental benefits into account.

Policy Implications

If we only consider job creation, the focus on policy should be on creating jobs and economic activity, with a preference for green jobs, since those impose less of a cost on future economic activity than jobs based on extractive industries.

Green jobs can be created either by substituting labor for energy and capital, or by reducing energy waste so that the money previously wasted on energy can be put to more productive uses. For policy makers who wish to create green jobs, the implications are clear.

Green job programs should focus on two types of opportunities:

  1. Industries where labor can usefully be substituted for energy or capital, like mass transit.
  2. Breaking down the barriers to energy efficiency which can stimulate economic activity by allowing money that would otherwise have been wasted.

The converse is also true: if the goal is to create jobs and stimulate economic activity, subsidies and other policies which encourage the substitution of capital and energy for labor should be ended, especially those subsidies which encourage the extraction of non-renewable resources which only create jobs today at the cost of future jobs.

The most cost effective policies for creating jobs will be those that break down the barriers to the adoption of cost-effective green technologies, especially energy efficiency. Ironically, most energy subsidies have gone into capital intensive sectors such as nuclear and extractive sectors such as oil and gas.

A very cost effective way to produce jobs would then simply be to remove subsidies from fossil fuels and nuclear energy and redirect them towards the most cost effective clean technologies.

Increased support for and promotion of public transit could do much more to reduce our dependence on imported oil than support for domestic natural gas drilling (which will only make us more dependent on imported oil in the future by using up domestic resources sooner) while also creating jobs.

Meanwhile, energy efficiency programs such as cash for caulkers can cost-effectively reduce energy bills and free up money for other sorts of consumption while also creating jobs in the depressed housing sector.

Sex, Drugs, and the Public Trust

Let’s talk about this.  From the beginning, there was no private ownership of water.  Under Roman law, tidewaters (like rivers and seas) and submerged lands (stream beds and shoreline) were community property, held in trust by the state for the benefit of the public.  This approach to water management endured for most of human history.  Consider, for example, 13th century Spain.  Las Siete Partidas, the laws of Spain set forth by Alfonso the Wise, recognized public rights in navigable waterways.  In England, this principle evolved into the common law public trust doctrine: the king held all waterways and submerged lands, not for himself, but rather “as trustee of a public trust for the benefit of the people” for uses like commerce, boating, and fishing.

After the American Revolution, each of the original states succeeded to this sovereign right and duty.  Each became trustee of the tide and submerged lands within its boundaries for the common use of the people.  Subsequently admitted states, like California, have the same sovereign rights under the equal footing doctrine.   That is, title to lands under navigable waters is held by the state in trust for the public good.  These lands are not alienable, as the public’s interest in them cannot be extinguished.

II. Purpose of the Public Trust

The Supreme Court described the nature of a state’s title to its tide and submerged lands in 1892, and although courts have reviewed tidelands trust issues many times since then, the Court’s premise remains fundamentally unchanged: a state’s title to its tide and submerged lands is different from that to the lands it holds for sale.  “It is a title held in trust for the people of the State that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing” free from obstruction or interference from private parties.  Illinois Central R.R. Co. v Illinois (1892) 146 U.S. 387, 452.  In other words, the public trust is an affirmation of the duty of the state to protect the public’s common uses of its waterways.

Are what are these common uses?  Traditionally, public trust uses were limited to water-bourne commerce, navigation, and fishing.  In more recent years, however, the California Supreme Court has said that the public trust embraces the right of the public to use the navigable waters of the state for bathing, swimming, boating, and general recreational purposes.  It is flexible enough to accommodate changing public needs, such as the preservation of the lands in their natural state for scientific study, as open space and as wildlife habitat.  The administrator of the public trust “is not burdened with an outmoded classification favoring one mode of utilization over another.”

The state legislature, acting within the confines of the common law public trust doctrine, is the ultimate administrator of the trust and often may be the ultimate arbiter of permissible uses of trust lands.  All uses, including those specifically authorized by the Legislature, must take into account the overarching principle of the public trust doctrine that trust lands belong to the public and are to be used to promote public rather than exclusively private purposes.  For this reason, the legislature cannot commit trust lands to private development because it would be abdicating its duty as a trustee.   Within these confines, however, the legislature has considerable discretion.

 The legislature speaks to the issue of permissible uses when it assigns trust lands to local governments.  Statutory trust grants are not all the same–some authorize the construction of ports and airports, others allow only recreational uses and still others allow a broad range of uses.

A further and often complicating factor is that granted and ungranted lands already may have been developed for particular trust uses that are incompatible with other trust uses or may have become antiquated. Some tidelands have been dedicated exclusively to industrial port uses, for example, and in these areas, recreational uses, even if also authorized by the trust grant, may be incompatible.  Similarly, tidelands set aside for public beaches may not be suitable for construction of a cannery, even though a cannery may be an acceptable trust use.  Piers, wharves and warehouses that once served commercial

navigation but no longer can serve modern container shipping may have to be removed or converted to a more productive trust use.  Historic public trust uses may have been replaced by new technologies.  Antiquated structures on the waterfront may be an impediment rather than a magnet for public access and use of the waters.  Public trust uses may and often do

conflict with one another.  The state and local tidelands grantees, as administrators of their

 

 

10Illinois Central Railroad v. Illinois, supra, at 452-53.

 

respective public trust lands, are charged with choosing among these conflicting uses, with the Legislature as the ultimate arbiter of their choices.

For all these reasons, a list of uses or a list of cases without more may not be as useful as an analysis of public trust law applied to a specific factual situation.

III. The Leasing of Tidelands

 

 

A few principles established by the courts are instructive in analyzing under the public trust doctrine the leasing of public trust lands for particular uses.  For example, it was settled long ago that tidelands granted in trust to local entities may be leased and improved if the leases and improvements promote uses authorized by the statutory trust grant and the public trust.  Leases for the construction of wharves and warehouses and for

railroad uses, i.e., structures that directly promote port developme nt, were approved early in the 20th century.11   Later, leases for structures incidental to the promotion of port commerce, such as the Port of Oakland’s convention center, were held to be valid because although they did not directly support port business, they encouraged trade, shipping, and commercial associations to become familiar with the port and its assets.12   Visitor-serving facilities, such as restaurants, hotels, shops, and parking areas, were also approved as

appropriate uses because as places of public accommodation, they allow broad public

 

 

 

 

11San Pedro etc. R.R. Co. v. Hamilton (1911) 161 Cal. 610; Koyner v. Miner (1916) 172

Cal. 448; Oakland v. Larue Wharf & Warehouse Co. (1918) 179 Cal. 207; City of Oakland v. Williams (1929) 206 Cal. 315.

 

12Haggerty v. City of Oakland (1958) 161 Cal.App.2d 407, 413-414.

 

access to the tidelands and, therefore, enhance the public’s enjoyment of these lands historically set apart for their benefit.13

These cases provide three guidelines for achieving compliance with the public trust when leasing tidelands for construction of permanent structures to serve a lessee’s development project:  (1) the structure must directly promote uses authorized by the statutory trust grant and trust law generally, (2) the structure must be incidental to the promotion of such uses, or (3) the structure must accommodate or enhance the public’s enjoyment of the trust lands.  Nonetheless, when considering what constitutes a trust use, it is critical to keep in mind the following counsel from the California Supreme Court: The objective of the public trust is always evolving so that a trustee is not burdened with outmoded classifications favoring the original and traditional triad of commerce, navigation

and fisheries over those uses encompassing changing public needs.14

 

 

 

 

 

 

 

 

 

 

 

IV. Promotion of Trust Uses and Public Enjoyment of Trust Lands

 

 

 

 

 

 

13Id. at p. 414; Martin v. Smith (1960) 184 Cal.App.2d 571, 577-78.

 

14National Audubon Society v. Superior Court, supra, at p. 434.

 

Installations not directly connected with water-related commerce are appropriate trust uses when they must be located on, over or adjacent to water to accommodate or

foster commercial enterprises.  Examples include oil production facilities, freeway bridges and nuclear power plants.15   Hotels, restaurants, shops and parking areas are appropriate because they accommodate or enhance the public’s ability to enjoy tide and submerged lands and navigable waterways.  The tidelands trust is intended to promote rather than serve as an impediment to essential commercial services benefiting the people and the ability of the people to enjoy trust lands.16

Nevertheless, the essential trust pur poses have always been, and remain, water

 

 

related, and the essential obligation of the state is to manage the tidelands in order to implement and facilitate those trust purposes for all of the people of the state.17

Therefore, uses that do not accommodate, promote, foster or enhance the statewide public’s need for essential commercial services or their enjoyment tidelands are not appropriate uses for public trust lands.  These would include commercial installations that could as easily be sited on uplands and strictly local or “neighborhood-serving” uses that confer no significant benefit to Californians statewide.  Examples may include hospitals,

supermarkets, department stores, and local government buildings and private office

 

 

 

15See Boone v. Kingsbury (1928) 206 Cal.148, 183; Colberg, Inc. v. State of California ex rel. Dept. Pub. Work, supra, at pp. 421-22; and Carstens v. California Coastal Com. (1986) 182

Cal.App.3d 277, 289.

 

16Carstens v. California Coastal Com., supra, at p. 289.

 

buildings that serve general  rather than specifically trust-related functions.

 

 

V. Mixed-Use Developments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17Joseph L. Sax, AThe Public Trust in Stormy Western Waters,@ October 1997.

 

Mixed-use development proposals for filled and unfilled tide and submerged lands have generally consisted of several structures, including non-trust use structures or structures where only the ground floor contains a trust use.  While mixed-use developments on tidelands may provide a stable population base for the development, may draw the public to the development, or may yield the financing to pay for the trust uses to be included in the development, they ought not be approved as consistent with statutory trust grants and the public trust for these reasons.  These reasons simply make the development financially attractive to a developer.  Projects must have a connection to water-related activities that provide benefits to the public statewide, which is the hallmark of the public trust doctrine. Failure to achieve this goal, simply to make a development financially attractive, sacrifices public benefit for private or purely local advantage.  A mixed-use development may not be compatible with the public trust, not because it may contain some non-trust elements, but

because it promotes a “commercial enterprise unaffected by a public use”18  rather than

 

promoting, fostering, accommodating or enhancing a public trust use.19   That use, however, need not be restricted to the traditional triad of commerce, navigation and fishing.  It is an evolving use that is responsive to changing public needs for trust lands and for the benefits

 

 

18City of Long Beach v. Morse (1947) 31 Cal.2d 254, 261.

 

19Haggerty v. City of Oakland, supra, at pp. 413-14.

 

these lands provide.20

 

Moreover, commercial enterprises without a statewide public trust use may violate the terms of statutory trust grants.  Typically, grants allow tidelands to be leased, but only for purposes “consistent with the trust upon which said lands are held.”  This term is not equivalent to “not required for trust uses” or “not interfering with trust uses.”  Since leases of tidelands must be consistent with statutory trust grant purposes, leases which expressly contemplate the promotion of non-trust uses rather than trust uses would not comply with

the terms of the trust grants.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20National Audubon Society v. Superior Court, supra, at p. 434.

 

For these reasons, non-trust uses on tidelands, whether considered separately or part of a mixed-use development, are not mitigable.  That is, unlike some environmental

contexts where developments with harmful impacts may be approved so long as the impacts are appropriately mitigated by the developer, in the tidelands trust context, mitigation of a non-trust use has never been recognized by the courts.  To the contrary, the California Supreme Court has said that just as the state is prohibited from selling its tidelands, it is similarly prohibited from freeing tidelands from the trust and dedicating them to other uses

while they remain useable for or susceptible of being used for water-related activities.21

 

 

VI.         Incidental Non-Trust Use

All structures built on tide and submerged lands should have as their main purpose the furtherance of a public trust use.  Any structure designed or used primarily for a non- trust purpose would be suspect.  Mixed-use development proposals, however, frequently justify non-trust uses as “incidental” to the entire project.  The only published case in California in which a non-trust use of tidelands has been allowed focused on the fact that the real or main purpose of the structure was a public trust use and that the non-trust use would be incidental to the main purpose of the structure.22   In this context, the court noted

that because the real or main purpose of the structure was to promote public trust uses, non- trust groups could also use the facility, but the non-trust uses must remain incidental to the

 

 

 

 

21Atwood v. Hammond (1935) 4 Cal.2d 31, 42-43.

 

22Haggerty v. City of Oakland, supra, at p. 413.

 

main purpose of the structure.23   This is the state of the law, and it is supported by good policy reasons as well.  If the test for whether a non-trust use i s incidental to the main purpose of a development were not applied on a structure-by-structure basis, pressure for more dense coastal development may increase as developers seek to maximize the square feet of allowable non-trust uses.  Disputes may arise as to how to calculate the square footage attributable to the proper trust uses versus non-trust uses, with open waterways and

parking garages likely being the dominant trust uses and structures being devoted to non- trust uses.

It is beyond contention that the state cannot grant tidelands free of the trust merely because the grant serves some public purpose, such as increasing tax revenues or because the grantee might put the property to a commercial use.24   The same reasoning applies to putting tidelands to enduring non-trust uses by building structures on them.  Accordingly, the only enduring non-trust uses that may be made of tidelands without specific legislative authorization are those incidental to the main trust purpose applied on a structure-by- structure basis.  Each structure in a mixed-use development on tidelands must have as its primary purpose an appropriate public trust use.  If its real or main purpose is a trust use, portions of the structure not needed for trust purposes may be leased temporarily to non- trust tenants, provided that the non-trust use is incidental to the main purpose of the

structure.

 

 

 

23Ibid.

 

VII. The Role of the Legislature

 

 

The Legislature is the representative of all the people and, subject to judicial review, is the ultimate arbiter of uses to which public trust lands may be put.  The Legislature may create, alter, amend, modify, or revoke a trust grant so that the tidelands are administered in a manner most suitable to the needs of the people of the state.25   The Legislature has the power to authorize the non-trust use of tidelands.  It has done so rarely, and then on a case- specific basis.26   Many of its actions have been a recognition of incidental non-trust uses or of a use that must be located on the tidelands. When these legislative actions have been challenged in court, the courts, understandably, have been very deferential, upholding the actions and the findings supporting them.27

The Legislature has provided a statutory framework for the leasing of tidelands for

non-trust uses by the cities of Long Beach and San Francisco grounded on findings that the tidelands are not required for (San Francisco) or not required for and will not interfere

 

 

 

 

 

 

 

24National Audubon Society v. Superior Court, supra, at p. 440.

 

25City of Coronado v. San Diego Unified Port District (1964) 227 Cal.App.2d 455, 474.

 

26For example, in Chapter 728, Statutes of 1994, the Legislature authorized tidelands in

Newport Beach to continue to be put to non-trust uses for a limited term after it was determined that the tidelands had been erroneously characterized and treated as uplands by the city due to incorrect placement of the tidelands boundary.

 

27See, e.g., Boone v. Kingsbury, supra, at p. 183 and City of Coronado v. San Diego

Unified Port District, supra, at pp. 474-75; but see Mallon v. City of Long Beach (1955) 44

Cal.2d 199, 206-07, 212.

 

with (Long Beach) the uses and purposes of the granting statute.28   Where, as in these two statutes, the Legislature has authorized in general terms the use of tidelands for non-trust purposes, the statutes’ provisions must be interpreted so as to be consistent with the paramount rights of commerce, navigation, fishery, recreation and environmental protection.  This means that the tidelands may be devoted to purposes unrelated to the common law public trust to the extent that these purposes are incidental to and

accommodate projects that must be located on, over or adjacent to the tidelands.  These non-trust uses are not unlimited, for there are limits on the Legislature’s authority to free tidelands from trust use restrictions.29

To ensure that the exercise of the Long Beach and San Francisco statutes is

 

 

consistent with the common law public trust, the tidelands to be leased for non-trust uses must have been filled and reclaimed and no longer be tidelands or submerged lands and must be leased for a limited term. The space occupied by the non-trust use, whether measured by the percentage of the land area or the percentage of the structure, should be relatively small. Finally, any structure with a non-trust use should be compatible with the overall project. Findings such as these are necessary because legislative authorizations to devote substantial portions of tidelands to long-term non-trust uses have generally been considered by the

 

 

 

 

 

28Ch. 1560, Stats. 1959; Ch. 422, Stats. 1975. These statutes also provide for, inter alia, the lease revenues to be used to further trust uses and purposes.

 

29Illinois Central R.R. Co. v. Illinois, supra, at pp. 452-54.

 

courts as tantamount to alienation.30

 

 

In several out-of-state cases, specific, express legislative authorizations of

 

 

incidental leasing of publicly-financed office building space to private tenants solely for the purpose of producing revenue have been subject to close judicial scrutiny, although they did not involve tidelands trust use restrictions.31   One case involved construction of an international trade center at Baltimore’s Inner Harbor with public financing where

legislation expressly permitted portions of the structure to be leased to private tenants for the production of income.  Another was a condemnation case where the statute authorizing the New York Port Authority to acquire a site on which to build the World Trade Center was challenged on the basis that it allowed portions of the new structure to be used for no other purpose than the raising of revenue.   In both cases, opponents of the projects argued that a publicly financed office building should not be permitted to have any private commercial tenants even though the respective legislatures had expressly allowed incidental private use of each building.  The state courts in both Maryland and New York held that so long as the primary purpose of the office building was for maritime purposes connected with the port,

legislation authorizing the leasing to private tenants was valid.32   Although both cases

 

 

involve challenges to financing and condemnation statutes and do not involve the public

 

 

 

30Atwood v. Hammond, supra, at p. 42; see also Illinois Central R.R. Co. v. Illinois, supra,

at pp. 454-53.

 

31Lerch v. Maryland Port Authority (1965) 240 Md. 438; Courtesy Sandwich Shop, Inc. v. Port of New York Authority (1963) 12 N.Y.2d 379.

 

32Ibid.

 

trust, they are instructive because they demonstrate the importance to the courts, even in

 

 

the context of public financing and condemnation, that when a portion of a structure is to be leased for the purpose of raising revenues to offset expenses, this incidental non-public leasing must have been legislatively authorized.

VIII. Exchanges of Lands

 

 

Situations where a local government or a private party acquires a right to use former trust property free of trust restrictions are r are.33   In order for such a right to be valid, the Legislature must have intended to grant the right free of the trust and the grant must serve the purpose of the trust.  Public Resources Code section 6307 is an example of the rare situation where abandonment of the public trust is consistent with the purposes of the trust. Section 6307 authorizes the Commission to exchange lands of equal value, whether filled or unfilled, whenever it finds that it is “in the best interests of the state, for the improvement of navigation, aid in reclamation, for flood control protection, or to enhance the configuration of the shoreline for the improvement of the water and upland, on

navigable rivers, sloughs, streams, lakes, bays, estuaries, inlets, or straits, and that it will not substantially interfere with the right of navigation and fishing in the waters involved.” The lands exchanged may be improved, filled and reclaimed by the grantee, and upon adoption by the Commission of a resolution finding that such lands (1) have been improved, filled, and

reclaimed, and (2) have thereby been excluded from the public channels and are no longer

 

 

 

 

33National Audubon Society v. Superior Court, supra, at p. 440.

 

available or useful or susceptible of being used for navigation and fishing, and (3) are no longer in fact tidelands and submerged lands, the lands are thereupon free from the public trust.  The grantee may thereafter make any use of the lands, free of trust restrictions.

In order for such an exchange of lands to take place, the Commission must find that the lands to be exchanged are no longer available or useful or susceptible of being used for navigation and fishing, taking into consideration whether adjacent lands remaining subject to the trust are sufficient for public access and future trust needs; that non-trust use of the

lands to be freed of the public trust will not interfere with the public’s use of adjacent trust lands; and that the lands that will be received by the state in the exchange not only are of equal, or greater, monetary value but also have value to the tidelands trust, since they will take on the status of public trust lands after the exchange.  Only then can the Commission find that the transaction is in the best interests of the state, that the exchange of lands will promote the public trust and that it will not result in any substantial interference with the public interest in the lands and waters remaining.

Consider the Alternative

The Bureau of Land Management (BLM) and United States Forest Service (USFS) recently considered four alternatives for a drilling proposal in the Pinedale Resource Area of the Wyoming Range. In the Draft Environmental Impact Statement (DEIS), BLM rejected two alternatives as unreasonable. The remaining two alternatives – including the alternative selected by BLM – were substantially identical. None of the alternatives included what I would consider reasonable environmental protection for watersheds and habitat.

BLM has the authority — and, according its own guidance documents, a duty —  to consider an alternatives that impose stringent environmental protections.  This position has ample support in the case law interpreting an agency’s responsibility to “objectively evaluate all reasonable alternatives” under the National Environmental Policy Act (NEPA).

The purpose and scope of a project define the range of alternatives that must be considered in an EIS. BLM is required to “take environmental values into account” in carrying out its regulatory functions for oil and gas development. It also has a substantive duty to “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” Given that the rights granted in an oil or gas lease are explicitly “subject to” BLM’s right to condition development for its environmental purposes, measures to protect watersheds and fish are consistent with the purpose and scope of any proposal to drill on a lease. Therefore, to the extent that these measures are feasible and effective, they are reasonable alternatives and should be fully analyzed in the EIS.

I. The Alternatives Requirement

BLM must “rigorously explore and objectively evaluate all reasonable alternatives” when formulating a DEIS so that reviewers may evaluate their comparative merits. The alternatives section must also include a discussion of appropriate mitigation measures. While NEPA does not require the agency to analyze alternatives it has in good faith rejected as too remote, speculative, impractical, or ineffective, it does require the development of information sufficient to permit reasoned choice of environmental protections. Accordingly, the existence of a reasonable, but unexamined, alternative renders the EIS inadequate.

TU’s desired alternative would likely be considered a “reasonable” alternative. An alternative is “reasonable” only if it falls within the agency’s statutory purposes. For BLM, the alternative must fall within its duties under the Mineral Leasing Act (MLA) and Federal Land and Policy Management Act (FLMPA). The FLPMA directs BLM to “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” The MLA requires BLM to “regulate all surface-disturbing activities conducted pursuant to any lease . . . in the interest of conservation of surface resources.” Thus, an alternative that would impose strict protections for watersheds and fish habitat is reasonable because it is consistent with BLM’s responsibilities under these statutes.

 

 

II. Seminal Cases Discussing the Alternatives Requirement

 

A. Methow Valley – Duty to discuss mitigation measures

 

The Supreme Court confirmed an agency’s duty to consider adequate mitigation measures under NEPA in Robertson v. Methow Valley Citizens Council. in Methow Valley, the plaintiffs challenged a Forest Service permit for a ski resort in a national forest. The Court held that the requirement that an agency consider mitigation measures is implicit in “NEPA’s demand” and CEQ regulations. The omission of a “reasonably complete discussion” of mitigation measures would undermine NEPA’ s action-forcing function. Without such a discussion, the Court added, neither the agency nor other interested groups or individuals could properly evaluate the severity of the adverse effects of the action.

NEPA’s requirement to discuss mitigation, however, ends with the discussion. There is no substantive requirement that a complete mitigation plan be actually formulated or adopted. Methow Valley rejected the Ninth Circuit decision that the Forest Service had the duty to develop necessary mitigation measures before it could issue a permit for the ski resort.

Despite this holding, Methow Valley’s emphasis on the need to discuss mitigation measures in impact statements reinforces the importance of mitigation in the NEPA process, and supports TU’s desire to require BLM to consider environmental alternatives in the future. Indeed, lower federal courts now give discussion of mitigation measures careful attention. Methow Valley’s reliance on CEQ’s interpretation of the Act also strengthens the role of CEQ in defining the impact statement process and what it should contain, including discussion of adequate mitigation measures.

 

B. Calvert Cliffs – NEPA’s Alternatives Requirements

NEPA actually contains two provisions requiring a discussion of alternatives. The provision requiring the preparation of impact statements requires a discussion of “alternatives to the proposed action.” Another provision, § 102(2)(E), requires agencies to “study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.”

The importance of both alternatives requirements was emphasized in the first landmark case on NEPA, Calvert Cliffs’ Coordinating Committee, Inc. v. Atomic Energy Commission. The court noted that the alternatives requirements seek—

 

to ensure that each agency . . . takes into proper account all possible approaches to a particular project . . . which would alter the environmental impact and the cost-benefit analysis. Only in that fashion is it likely that the most intelligent, optimally beneficial decision will ultimately be made.

 

Courts have held that agencies must comply with the alternatives requirement in § 102(2)(E) even when they do not have to prepare an impact statement. Although the alternatives requirement in § 102(2)(E) imposes somewhat different responsibilities and may be more rigorous than the requirement to discuss alternatives in an impact statement, courts often view the two alternatives requirements as interchangeable. Nonetheless, Calvert Cliffs lends further support to TU’s desire for the BLM to consider environmental alternatives in the future by recognizing the purpose and importance of both alternatives requirements.

 

C. California v. Block – Inadequate Range of Alternatives

The opinion in State of California v. Block contains an extension discussion of the duty to consider an adequate range of alternatives. In Block, the Plaintiffs challenged the EIS informing the Forest Service’s decision over which portions of a 62 million-acre national forest should remain roadless and designated wilderness. The Service considered 11 alternatives, ranging from the extremes of all wilderness to no wilderness. In between the extremes, however, none of the alternatives considered allocating more than 33% of the roadless area to wilderness. In holding that this was inadequate, the Ninth Circuit emphasized that an agency need not consider every alternative or alternatives that are unlikely to be implemented for legitimate reasons, but, equally, it must not ignore important alternatives or bias in its evaluation by arbitrarily narrowing the range of options considered.

The Block court held the Service should have considered the alternative of allocating more than one-third of the land to the wilderness category. It noted that the agency’s failure to consider this alternative was “puzzling,” especially as all 62 million acres of the forest met the criteria for wilderness. The court was also troubled that the agency’s selection of alternatives dictated an “end result” in which nonwilderness designations exceeded wilderness designations by a substantial margin.

The Service claimed the range of alternatives selected was adequate because the decisional criteria used to evaluate alternatives were diverse. The court disagreed. It held that the numerical values used to apply the criteria were not explained, that the cutoff points for designation varied from one alternative to the other, and that the agency could not emphasize decisional criteria over the actual results they generated. Other cases have similarly held an agency may not skew its alternatives in favor of a certain result.

 

D. Legacy Parkway – Failure to evaluate alternatives to protect habitat

The Great Salt Lake (“GSL”) and the wetlands surrounding its shoreline provide critical habitat for migratory birds. The Legacy Parkway, the first segment of a much longer proposed road extending along Utah’s Wasatch Front, would traverse fourteen miles along the GSL shoreline. Commenters urged the lead agencies to consider alternative means of meeting regional travel demand, including other highway alignments, mass transit, and land use planning, that could have lessened the parkway’s destruction of bird habitat. The Army Corps of Engineers refused to evaluate these alternatives in the EIS, apparently because they would have increased the cost of the project.

The EIS recommended as the preferred alternative a freeway design that would erase 114 acres of GSL wetlands. This was less than the 188 acres under the most damaging proposed route, but still more than under the least damaging alternative identified in the EIS. The Tenth Circuit found the EIS inadequate on three main grounds: (1) failure to consider a narrower right-of-way for the proposed road, which would have reduced wetland impacts; (2) failure to consider a proposed light rail as a less damaging practicable alternative; and (3) failure to evaluate wildlife impacts properly.

The litigation ended with a settlement between the environmental plaintiffs and the agencies. The road was redesigned to meander around wetlands and other sensitive areas, to prohibit most trucks, and to have a speed limit of fifty-five miles per hour. Slower speeds and the absence of trucks will reduce highway noise dramatically, reducing disturbance to birds in the GSL habitats.

 

III. The purpose and need of lease development on federal lands, generally

 

A. BLM’s environmental purpose

BLM should also examine TU’s environmental alternative because it is required to examine methods of protecting the environment by its enabling legislation.” While BLM’s authorities direct the agency to maximize oil and gas recovery, development is not its sole purpose. The MLA and FLPMA establish policy and requirements to protect the natural environment. These include the policy that the public lands be managed to protect ecological and water resources, provide habitat for fish, and to provide for outdoor recreation. Specifically, the MLA directs BLM to “regulate all surface-disturbing activities conducted pursuant to any lease . . . and determine reclamation and other actions as required in the interest of conservation of surface resources.” Moreover, the FLPMA requires that BLM, in managing the public lands, “take any action necessary to prevent unnecessary or undue degradation (UUD) of the lands.” Thus, the agency must take any action needed to prevent any activities, even if the activities are necessary for extracting minerals, that would unduly harm the public land.

 

B. The rights granted in an O&G lease are subject to BLM’s environmental purpose

Oil and gas leases grant the lessee the right to extract any oil or natural gas that may be found on the lease. However, an oil and gas lease does not grant an unqualified right to development. Under the standard modern O&G lease (post-1984) and BLM’s § 3101.1-2 regulation (1988), BLM has made any development of the lease or the removal of oil or gas “subject to” a number of provisions that allow BLM to protect the natural environment.

Many of these retained rights are grounded in BLM’s mandatory environmental protection obligations. The lease provides that the holder’s extraction right is subject to the agency’s need to comply with its responsibilities under FLPMA and MLA, any other applicable laws, regulations, and formal orders in effect when the lease is issued. The § 3101.1-2 regulation further makes the lease subject to any “reasonable measures” the BLM might impose to reduce the adverse environmental impacts of development. BLM’s “reasonable measures” authority is specifically reserved by section 6 of the modern lease. BLM can use this authority to condition its approval of drilling projects on reasonable environmental protections. Conditions for protecting watersheds and habitat may include regulating the timing of operations and the siting and design of facilities, as well as specification of the rates of oil and gas development and production. BLM can even prohibit development if the environmental impacts are substantially different or greater than normal. In short, BLM has ample authority to regulate the time, place, and manner of drilling activities.

If BLM fully exercised that authority, it could considerably reduce the harms of mineral extraction on watersheds and habitat. It could dictate the pace of development, require directional drilling and “closed-loop” fluid systems, confine operations to prescribed areas, or even suspend lease development in the interest of conserving these resources.

 

IV. Recent Cases

 

A. Otero Mesa (10th Cir. 2009) – closing entire grassland to lease development

The 10th Circuit held that the BLM was required to analyze an alternative that imposed strict environmental protections in Mtn. Oil & Gas Ass’n v. Watt. It recently reaffirmed that holding in a case similar to TU’s facts here. In 1997, an exploratory well struck natural gas on the Otero Mesa. O&G companies responded by nominating over 250,000 acres in the area for federal leases, and BLM determined the increased development interest required a new resource management plan. BLM conducted a large-scale land management planning process for O&G development in Sierra and Otero Counties, where the Mesa is located. The plan-level EIS recommended opening the majority of the Mesa to development, subject to a stipulation that only 5% of the surface of the Mesa could be in use at any one time.

The EIS analyzed five possible alternative management schemes for development in the area, three of which were fully analyzed. The other two were eliminated without further analysis.

Both eliminated alternatives would have increased the level of environmental protection for the entire plan area beyond any of the fully analyzed alternatives. One would have imposed a blanket ban on minerals development leasing; the other, through a “no surface occupancy” (“NSO”) stipulation allowing minerals development only by slant drilling from non-BLM lands. These alternatives were “considered initially but eliminated prior to further analysis” based on BLM’s conclusion that adopting a plan which so limited development would be arbitrary and capricious under FLPMA’s multiple-use mandate. BLM also discounted one of the three alternatives analyzed in the Draft EIS, the “No-Action Alternative,” as inconsistent with its own policies.

Thus, BLM was left with two possible management schemes, “Alternative A” and “Alternative B.” Of the two, Alternative A placed fewer restrictions on development, and BLM selected it as the preferred alternative. Alternative A opened 96.9% of the plan area but placed limitations on possible development, subjecting 58.9% of the area to a combination of NSO stipulations, controlled surface use stipulations, and timing stipulations. More importantly, Alternative A subjected 116,206 acres of the Otera Mesa to an NSO provision limiting disturbances to any 5% of the surface area of a leased parcel at a given time, regardless of location. BLM crafted this NSO restriction “[t]o protect portions of the remaining desert grassland community by minimizing habitat fragmentation.”

BLM refused to consider closing the entire Otero Mesa to O&G development, because it believed that a complete restriction on drilling violated the concept of managing for multiple use.

The Tenth Circuit rejected that argument, and decided that an alternative of closing the entire Mesa fell within BLM’s statutory mandate. The FLPMA requires BLM to manage public lands under the principle of multiple use. “Multiple use” means

 

a combination of balanced and diverse resource uses that takes into account the long-term needs of future generations for renewable and nonrenewable resources, including, but not limited to, recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values.

 

The court emphasized that multiple use does not direct BLM to prioritize development over other uses. And it does not require that every use be accommodated on every piece of land. If all the competing demands reflected in FLPMA were focused on one particular piece of public land, in many instances only one set of demands could be satisfied. For example, “a parcel of land cannot both be preserved in its natural character and mined.” Accordingly, BLM’s multiple use duty did not mean that drilling must be allowed on the Mesa. Development is a possible use, which BLM must weigh against other possible uses – including conservation to protect environmental values, which are best assessed through the NEPA process. Because BLM had not assessed an alternative of closing the Mesa to drilling activities, it had failed to analyze an adequate range of alternatives.

In short, this case decided that an alternative of closing an entire area to lease development is consistent with BLM’s statutory purpose, and that the multiple use duty is not a sufficient reason to exclude more protective alternatives from consideration. Accordingly, Otero Mesa squares on all fours with the facts presented by TU in this memo, and can be cited as supporting authority.

 

B. Anglers of the Au Sable (D. Mich. 2008) – alternative to protect trout

The court in Anglers of the Au Sable considered BLM’s and the Forest Service’s obligations under NEPA where a company was seeking to drill exploratory wells. . The court found that the agencies failed to “objectively evaluate all reasonable alternatives” by not considering greater protections for trout habitat. The range of alternatives considered in the EIS was deficient for two reasons. First, the no action alternative was improperly rejected because the Forest Service felt it was obligated to approve drilling. The court held, however, that none of the Service’s authorities require approval of a leaseholder’s proposed mineral extraction, foreclose a decision of No Action, or place the Service’s objectives at odds with environmental preservation. Additionally, the court noted that the plain language of 43 C.F.R. § 3161.2, which directs BLM to require that operations protect environmental quality, “makes it clear that approval is not appropriate in all cases, particularly cases where the project poses a threat to environmental quality.”

Second, the agencies impermissibly limited the range of alternatives to only those that would meet [the O&G company’s] project objectives, rather than alternatives that might better serve the agencies’ [environmental] goals.” In short, Au Sable confirmed that the rights of a mineral leaseholder are subject to BLM’s environmental obligations. When operations are proposed on a lease, BLM must interpret and perform its obligations in light of the policies established by NEPA.

 

C. Oregon Natural Desert – resource management alternatives

BLM’s impact statement for its Southeast Oregon Resource Management Plan violated NEPA by failing to consider alternatives that would have closed more acreage to off-road vehicles.

The EIS analyzed seven alternatives. With regard to ORV use, the alternatives varied almost entirely by the amount of land allocated between open and limited-use categories. Importantly, BLM never considered closing a significant amount of land to ORVs, nor did it consider an option geared toward protecting wilderness values from ORV use. The most protective limited-use category restricted ORVs to existing routes in wilderness areas and imposed seasonal closures to protect wildlife. But every alternative exposed more land to some type of ORV use than was previously permitted. For example, BLM’s recommended alternative opened approximately 20,000 acres of previously closed land to some ORV use. With regard to grazing, BLM considered only one alternative with substantial restrictions, and did not consider limiting grazing in areas with wilderness characteristics outside of designated wilderness.

 

D. Northern Alaska – adequate range of alternatives

Environmental plaintiffs challenged the adequacy of the EIS prepared by the BLM for its plan to offer long term oil and gas leases in the NWPA of Alaska. The leases would enable the oil companies to undertake exploration to determine what sites could be developed for productive drilling. The Ninth Circuit determined that BLM had adequately examined a range of viable alternatives.

The plaintiffs argued that BLM violated NEPA by failing to consider an alternative proposed by the Audubon Society in developing its recommended course of action in the EIS. The Audubon alternative recommended that BLM add four new special areas and, therefore, make 35 percent of the high oil potential area unavailable for leasing. Although BLM chose not to consider the Audubon alternative itself, the preferred alternative it did adopt included some similar protections. The court decided that BLM’s explanation that the Audubon alternative as a whole was inconsistent with the NWPA project and statutory mandates, coupled with BLM’s willingness to incorporate several recommendations into the preferred alternative, was a sufficient explanation for its refusal to consider entire Audubon proposal. Since BLM adopted components of the Audubon alternative, the BLM adequately examined a range of viable alternatives in preparing the FEIS.

Significantly, the court also concluded that BLM can condition permits for drilling on implementation of environmentally protective measures, and it can reject a proposal altogether if a particularly sensitive area is sought to be developed and mitigation measures are not available.

 

V. Conclusion

 

In short, BLM is required to “take environmental values into account” in carrying out its regulatory functions for oil and gas development. It also has a substantive duty “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” And given that the rights granted in an oil or gas lease are explicitly “subject to” BLM’s right to condition development for its environmental purposes, measures to protect watersheds and fish are consistent with the purpose and scope of any proposal to drill on a lease. Therefore, to the extent that these measures are feasible and effective, they are reasonable alternatives and should be fully analyzed in the EIS.

 

Green Building is the Bomb Diggity

If you have not already felt the impact of emerging green laws and policies aimed at enhancing the energy efficiency of buildings, fear not: you soon will. As of January 2011, green laws, executive orders, ordinances, and incentives affecting buildings had been implemented in at least 45 states, 58 counties, 384 cities and towns, and dozens of federal agencies and education districts.

The increased emphasis on greening new and existing buildings is due to several interrelated factors, including high energy prices, increased focus on reducing dependence on fossil fuels, and the benefits of an environmentally friendly public profile.

If you own or lease real estate, or plan to construct new buildings or acquire or renovate existing buildings, green laws should be in the front of your mind. You’ll need to understand applicable developments to comply with new requirements and, if desired, take advantage of available incentives.

So.  This post discusses (1) how these laws and policies incentivize green practices in buildings; (2) the costs and benefits associated with green buildings; (3) why the next trend in green law will likely focus on energy audits and retrofitting for existing buildings; and (4) why you should not wait to consider greening your real estate.

Incorporating Green Practices

Initially, green laws, policies, and incentives applied only to new and significantly renovated government buildings. They later expanded to include new commercial buildings and major renovations of existing nongovernmental buildings. More recently, some jurisdictions have expanded mandates to require nongovernmental owners of existing buildings to evaluate and even retrofit their structures to improve energy efficiency.

Traditionally, governments used local building codes to control the construction and occupancy of buildings. These codes outline the minimum standards to ensure the protection of public health, safety, and welfare. Although the minimum standards increase over time, building codes do not mandate or encourage any standard above these minimums.

The green building movement aspired to improve these minimum standards by introducing more environmentally conscious design and construction elements. In the early 1990s, the movement achieved national momentum, primarily through the Energy Star and the Leadership in Energy and Environmental Design (LEED) programs.  Energy Star and LEED largely are compatible; the principal difference is that Energy Star focuses solely on energy efficiency, and LEED more broadly emphasizes building design and operation.

Energy Star Certification

The EPA and the Department of Energy (DOE) jointly administer Energy Star to promote energy efficiency and greenhouse gas reduction. Over the past two decades, the program has expanded to improving energy performance in almost every type of building.  In 1995, the program began to offer the Energy Star label to new homes that were generally twenty to thirty percent more efficient than the DOE’s national model energy code (now part of the International Energy Conservation Code). Currently more than one million new homes have been Energy Star qualified, together saving an estimated $270 million in utility bills annually.

LEED Certification

The nonprofit US Green Building Council (USGBC) developed LEED to promote sustainability. Introduced in the mid
1990s, LEED is now the most widely recognized program in the national and international green building community. Between 2008 and 2009, ten states enacted laws requiring that large new government buildings receive LEED or equivalent certification.

The certification programs provide building owners with a framework for implementing a wide variety of green building elements to enhance their structure’s design, construction, operations and maintenance. The LEED building elements are grouped into five main areas: sustainable site development; water savings; energy efficiency; materials selection; and indoor environmental quality. Each owner may choose its own unique blend of design elements to achieve LEED certification.

LEED certification is granted if the building achieves a certain number of points based on the number and degree of LEED elements incorporated into its design. The four levels of LEED certification are Certification (40–49 points), Silver (50–59 points), Gold (60–79 points), and Platinum (80–110 points).

Costs and Benefits of Green Buildings

The primary costs of green building occur upfront: the expenses of construction and certification. These costs are significantly outweighed by benefits of greening a building.

Costs

The costs of incorporating green building elements into a structure vary widely because of the broad range of possible design elements. Standard return on investment can be calculated for certain elements, like enhancements relating to water and energy efficiency. However, other elements are more difficult to evaluate, like adding bicycle racks or increasing daylight or views from interior building spaces.

The costs of obtaining certification under Energy Star or LEED typically falls under three categories: (1) application and registration fees; (2) consultants’ and architects’ additional fees to manage the process; and (3) extra design, research, commissioning, or energy modeling costs required for certification.

Benefits

Companies can derive a number of other benefits from following the design elements of LEED or similar programs, even if certification is not sought or achieved. These benefits include financial incentives, increased asset valuation, and lower operating expenses, expedited construction procedures, and positive public perception.

Financial Incentives

Some jurisdictions provide financial incentives for attaining LEED or similar certification and, in some cases, even for incorporating green elements from those programs without achieving formal certification. Incentives may include rebated or reduced permit fees or application costs, reduced or waived taxes, or zoning allowances to permit larger buildings than otherwise allowed.

Increased Asset Valuation and Lower Operating Expenses

According to USGBC, an up-front investment in green building design yields life-cycle savings of ten times the initial investment amount, and typically affords improved air quality, more access to natural light, and other benefits over conventional buildings. When compared to conventional buildings in the same market, surveys cited by USGBC show that green buildings tend to have a higher valuation, leasing rates, and resale prices.

Valuation may be further impacted in the future as energy audit and efficiency information becomes increasingly public. As discussed below, jurisdictions are starting to require building owners to perform energy audits and make the results public. In response, ASTM International recently released ASTM E2797, a standard to provide a uniform means of collecting, compiling, analyzing, and reporting building energy performance data for lenders, buyers, and tenants.

Expedited Construction Procedures

Companies that achieve LEED or equivalent certification, particularly at the higher levels, can go through the various stages of the development process on an expedited basis. This can translate to reduced construction and carrying costs and to the faster receipt of income from the building’s sale or rental. For example, Los Angeles and San Francisco offer expedited plan review and permitting for projects seeking LEED certification.

Positive Public Perception

Designing and constructing a building with green principles provides an opportunity for public relations and advertising. Local media and governments, and green certification organizations like USGBC, frequently highlight these developments, including through awards or features on Web sites or in print.

Energy Audits and Retrofitting for Existing Buildings

The next wave of green laws and policies is expected to incentivize and even require that existing buildings be evaluated and retrofitted to improve energy efficiency. Some jurisdictions already require that energy audits be prepared for existing large buildings.

An energy audit surveys a building’s features and mechanical systems to assess overall energy usage and to identify and price out both inefficiencies and measures to improve them. Following the path of other green building requirements, the early mandates of retrofit initiatives applied to government buildings but they are beginning to be applied to commercial and other categories.

Local Government Initiatives

Only a few leading jurisdictions have mandated energy audit and retrofitting for private buildings, such as New York City (NYC) and San Francisco. However, these initiatives are expected to become more commonplace and increasingly mandatory in coming years.

In December 2009, NYC enacted the Greener, Greater Buildings Plan, which requires large private buildings and certain city buildings to track, assess, and publicly report their energy and water use. The audit report must identify the costs and savings associated with all reasonable efficiency and retrofit measures; although retrofits are not (yet) required, building owners must retro commission (or “tune-up”) existing systems to ensure efficiency. Buildings that are Energy Star or LEED certified are exempt from these requirements.

In December 2010, San Francisco adopted an ordinance requiring owners of non-residential buildings over 10,000 square feet to conduct an energy audit and submit a report every five years. That audit report must identify retrofitting or retro-commissioning alternatives that could pay for themselves in five years.

Why Companies Should Consider Greening Real Estate Now

The design, construction, and operation of buildings continue to green as a result of improved technology and industry practice, amended building codes, the influence of LEED and Energy Star and available benefits and incentives. Taken together, these factors continually set a higher “floor” for the performance of green buildings. At the same time, revised Energy Star and LEED standards continually raise the “ceiling” for sustainable green development by recognizing the most cutting-edge green elements. As this cycle continues, today’s cutting edge will become tomorrow’s standard practice.

When designing or renovating a building, you should consider the costs and benefits of green building elements and whether to seek Energy Star or LEED certification. Attaining such certification could exempt your company from, or at least delay its need to comply with, future energy audit or retrofit mandates.

By exploring these issues now, you may be able to take advantage of funding opportunities, tax credits, and other incentives to defray the costs associated with green building construction or retrofitting.

Powder River Basin update

WildEarth Guardians v. Salazar (D.D.C. May 8, 2011):

A federal district court in Washington, D.C., dismissed part of a suit brought by several environmental nonprofits concerning the federal government’s decision to put coal mining leases in Wyoming’s Powder River Basin up for sale. The court dismissed the portion of the lawsuit that alleged that the decision by the BLM in March 2010 to issue two coal leases was inappropriate because the agency never recertified the area as a “coal production region,” holding that this was a challenge to the BLM’s decision to decertify the Powder River Basin in 1990, and that the six-year statute of limitations had passed. The court held that the plaintiffs could petition the BLM to recertify the basin as a coal production region (the plaintiffs have done this, and the BLM rejected their suit; they filed a separate action on April 18, see below, challenging this). The other claims remain, which include allegations that the BLM violated the National Environmental Policy Act (NEPA) by, among other things, failing to address climate change impacts once the coal is burned.

On Apr. 4, 2011, the environmental plaintiffs filed suit against the DOI, alleging that it failed to properly plan leasing in the Powder River Basin in Wyoming. The lawsuit alleges that that DOI and the BLM violated the Administrative Procedure Act by refusing to manage the area as a “coal producing region.” Such a designation would put more regulatory requirements on the BLM to plan the management of leases instead of managing them under the current competitive leasing process. According to the complaint, the basin produces about 42 percent of the country’s coal. The complaint was filed two weeks after DOI announced four further lease sales for 758 million tons of coal, as well as four records of decision offering for development coal tracts in the basin estimated to produce 1.6 million tons of coal.

American Electric: CAA preempts the new federal common law

Connecticut v. American Electric Power (June 20, 2011)

In an 8-0 opinion, the U.S. Supreme Court held that federal common law nuisance claims cannot be brought against utilities for their greenhouse gas emissions given that the Clean Air Act and EPA regulations displace federal common law in this area. The lawsuit alleged that under common law, the companies’greenhouse gas emissions constitute a public nuisance in contributing to climate change. The plaintiffs sought injunctive relief requiring each power company to cap its greenhouse gas emissions and reduce them by a specified percentage each year. The district court dismissed the lawsuit in 2005, holding that the claims represented a political question not under the jurisdiction of the courts. In 2009, the Second Circuit reversed, holding that the plaintiffs could proceed with their lawsuit.

The Court affirmed in part and reversed in part.  It held that at least some plaintiffs had Article III standing under Massachusetts v. EPA,which permitted state to challenge refusal of EPA to regulate greenhouse gas emissions, and no other threshold obstacle barred review.  Significantly, the Court flatly rejected the argument that a claim for damages caused by climate change represented a political questions beyond the jurisdiction of the courts.

Second, the Clean Air Act (CAA) and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon dioxide emissions from fossil-fuel fired power plants.  However, the Court left open the possibility that such a claim under state nuisance law, leaving that issue for consideration on remand.

Why Virginia Uranium won’t buy insurance

Since their profits depend on making sure they end up on the right side of every transaction, insurance companies are proxies for all kinds of modern dilemmas.

For example, when they started factoring global warming in their underwriting, even as America was neck deep in a useless and political argument, it was a sign that their mathematicians had already decided it was a real problem.

This week, the folks from Virginia Uranium held an editorial board meeting for the Hampton Roads newspaper right before their appearance before the Virginia Beach City Council.

They were there to debunk the city-sponsored study showing that uranium mining in Pittsylvania County could imperil the water supply for a million people in Hampton Roads.

A Virginia Uranium-sponsored counterstudy concluded instead that the risk was “essentially zero.”

Which raises the question: If there’s no risk, it should be easy to buy insurance to guarantee the people of Virginia clean water.

That is, after all, how insurance works. If there’s no risk, there’s almost no cost to insure against it. When a star insures her physical assets, for example, the cost of that publicity stunt is low because the risk is, too.

Virginia Uranium’s representatives spent almost an hour explaining how the Virginia Beach study got it all wrong.

How there’s no way that their mine could lead to contamination in the city’s water. That not even a hurricane could wash mine tailings into the reservoir.

That’s when one reporter asked the insurance question: So, would you like to buy a policy?

It was an absurdist question with a real point: Put your money where your risk analysis is.

But Walter Coles Jr. and the scientist who reached the zero risk conclusion, Alan Kuhn, looked uncomfortable.

That’s not how these things work, they responded. That’s a regulatory issue. Companies don’t insure populations from risk.

Why not?

We could get rid of all that pesky regulation if corporations like Virginia Uranium would shift the risk from taxpayers to themselves. If companies would pay the real cost of the dangers they present. If they would insure bystanders against the catastrophes they might cause.

That’s about when the earthquake shook from a fault a few miles from the North Anna Nuclear Power Station. I’m sure there was no connection.

Uranium and Water

Uranium mining and milling produces massive amounts of toxic waste. Virtually all uranium mining in the U.S. has occurred in sparsely populated regions of Nevada and New Mexico, where rainfall is often below 15 inches per year. Still, according to the EPA, tailings have contaminated the groundwater at almost all U.S. mill sites. In a rainy state, like Virginia, the toxic runoff would pose an unprecedented danger. According to the EPA,

Water is perhaps the most significant means of dispersal of uranium and related …[radioactive materials] in the environment from mines and mine wastes….Uranium is very soluble in acidic and alkaline waters and can be transported easily from a mine site.

Uranium’s radioactive components, particularly radium and radon, are highly soluble in water, which would be a dangerous experiment for a state like Virginia with over 42 inches of rain per year.

Fans of uranium mining acknowledge that uranium mining has had “shameful legacy in terms of human and environmental devastation.” As noted by the Natural Resources Defense Council in recent comments to the Nuclear Regulatory Commission:

The history of uranium recovery and management in the United States (and, indeed around the globe) is replete with environmental damage, serious worker safety and health abuses, and harm to entire communities….Additionally, most of the environmentally damaged sites have not received adequate cleanup of past harms, and for what little cleanup has been done, most of the cost has been borne by taxpayers rather than the companies and associated beneficiaries of the uranium mined.

In “Exposure Pathway and Health Effects Associated with Chemical and Radiological Toxicity of Natural Uranium: A Review,” (2005) Dr. Doug Brugge and others at the Tufts University School of Medicine noted:

Currently, the EPA lists 23 National Priorities List (NPL) sites where uranium is a contaminant of concern …. Uranium, however, is explicitly excluded from the scoring system that is used to place sites on the NPL precluding most abandoned mines from being listed.

For more about environmental and human health impacts from different types of mining, even after studies promised minimal or no impact, go here.

Health Impacts

Numerous health problems are associated with uranium and its associated decay products. These include cancer from radon, birth defects and kidney problems from uranium, bone cancer and leukemia from radium, and lung and skin cancer from arsenic.

According to the EPA website

There are four principal ways (or exposure pathways) that the public can be exposed to the hazards from this waste.”

“The first is the diffusion of radon gas directly into indoor air if tailings are misused as a construction material or for backfill around buildings. When people breathe air containing radon, it increases their risk of developing lung cancer.”

Second, radon gas can diffuse from the piles into the atmosphere where it can be inhaled and small particles can be blown from the piles where they can be inhaled or ingested.”

“Third, many of the radioactive decay products in tailings produce gamma radiation, which poses a health hazard to people in the immediate vicinity of tailings.”

“Finally, the dispersal of tailings by wind or water, or by leaching, can carry radioactive and other toxic materials to surface or ground water that may be used for drinking water.”

In 2007, the Colorado Medical Society resolved that it “opposes the practice of in-situ and open pit mining of uranium due to the adverse health impact of radioactively contaminated water on our agriculture, livestock and civilian population.” In his 2007 testimony before Congress, Dr. Brugge described “uranium ore … [as] a toxic brew of numerous nasty hazardous materials.”

According to the EPA’s TENORM Report, “Water is perhaps the most significant means of dispersal of uranium and related [radioactive materials] in the environment from mines and mine wastes…Uranium is very soluble in acidic and alkaline waters and can be transported easily from a mine site.” This is bad. No state in which rainfall exceeds evaporation has ever allowed uranium mining within its borders. If Virginia allows uranium mining, it would be the first.

Contaminated Water

Water is used (and contaminated) in the milling process. In addition, rain falling on waste products from the mining and milling processes picks up radioactive and other toxic elements which can end up and remain in surface and ground waters for thousands of years. In the 1980s, Marline Uranium estimated that the waste pile from their proposed Virginia operation would cover 930 acres, 100 feet deep.

Mining and milling the proposed Coles Hill site in Pittsylvania County would generate hundreds of acres of radioactive waste and contaminate millions of gallons of water. To mine uranium safely, hundreds of millions of gallons of contaminated and radioactive water will have to be prevented from running into Virginia streams or leaching into the ground water. Virginia’s most populous communities lie downstream of the uranium leases filed in the 1980s.

Map of Drinking Water Resources downstream of 1980s N. Piedmont Leases.

Map of Drinking Water Resources downstream of Coles Hill.

Virginia’s Acute Rainfall Events

Not only does the Virginia Piedmont have greater annual rainfall than other uranium mining communities, it also has greater acute rainfall events. Two of the top five most intense 12-hour storms in the United States occurred in the Virginia Piedmont.

Map of 12-hour storm events.

Twenty-seven inches of rain fell on Nelson County in 1969. Twenty-nine inches fell in Madison County in 1995. Significant flooding also happened in Pittsylvania County in 1996 during Hurricane Fran.

View home video footage & map of the flooding event.

As noted by Elizabeth Haskell in her dissent to the recommendation of the Uranium Subcommittee/Uranium Administrative Group: “In Virginia’s wet climate where water is discharged from the site and filters through tailings, the transmittal of radiation to people through streams and the groundwater is a major issue.”

Conclusion

This experiment should not be conducted on Virginia. Virginia should take no action to initiate or sanction a study of uranium mining until the proponents of mining provide reviewable information demonstrating that mining and milling have been undertaken in five places with climate, geology, and population density similar to Virginia and in such a manner as to safeguard the environment, natural and historic resources, agricultural lands, and the health and well-being of citizens of those communities.

Uranium Mining Maps
Here are some maps related to uranium mining in Virginia, courtesy of the Piedmont Environmental Council.

Counties with Former Uranium Mining Leases in the Virginia Piedmont
Map showing counties with former uranium mining leases located in Virginia’s Piedmont.
Drinking Water Sources Downstream from Proposed Coles Hill Uranium Mining Site
Map showing drink water sources located downstream from the proposed Coles Hill Uranium Mining site.
Former Uranium Mining Leases in Pittsylvania County, Virginia
Map showing former uranium mining leases in Pittsylvania County, VA.
Properties with Former Uranium Mining Leases and Downstream Water Supplies – Southside Region
Major water supplies in Southside are located downstream from properties with former uranium mining leases. There are major safety concerns over mining uranium in wet climates such as Virginia’s, which could have disastrous effects on water supplies.
Properties with Former 1980s Uranium Mining Leases and Downstream Water Supplies – Piedmont region
Major water supplies in the Piedmont are located downstream from properties with former uranium mining leases. There are major safety concerns over mining uranium in wet climates such as Virginia’s, which could have disastrous effects on water supplies.
Properties with Former 1980s Uranium Mining Leases and Downstream Water Supplies-Impact on Frederickburg
Map showing former uranium mining leases and downstream water supplies in Virginia near Fredericksburg.
Proposed 930-acre uranium tailings storage View 12 and 3
Maps showing a proposed 930-acre uranium tailings storage, overlayed on a map of downtown Richmond, Virginia.
Potential Uranium in Virginia
A map showing potential uranium located in Virginia.
Water Supplies Potentially Impacted by Uranium Mining
View water supplies in the Piedmont and Southside regions of Virginia that would be potentially impacted by uranium mining. This map also includes properties with former uranium mining leases.

VA Uranium Backstory

In the 1980s, uranium leases were filed on thousands of acres of land in Virginia including Fauquier, Orange, Culpeper, and Madison Counties, stretching along the Piedmont to Pittsylvania in Southside Virginia.  At that time, the Commonwealth undertook an extensive study of uranium mining. It was costly, time consuming, and divisive. When it was over, the General Assembly and Governor decided it was in the best interests of the people to maintain a moratorium on uranium mining in Virginia.

A new corporation, Virginia Uranium, Inc., is seeking to lift the moratorium.  Although the primary focus on the uranium debate has been on the Coles Hill site in Pittsylvania County, most of Virginia’s population would be impacted by uranium mining, especially areas downstream or downwind of mining sites.

Mining

There are three forms of uranium mining: open pit mining, deep mining; and in situ leaching. Open pit mining creates large holes dug into the ground to remove the ore and waste rock which impedes ore extraction. This method is frequently used when the desirable ore is close to the surface. The mining operation planned in Pittsylvania County in the 1980s would have been a 110-acre hole, 850 feet deep. Deep mining creates shafts dug into the ground to reach ore at deeper levels. In the last decade, in situ leaching has become more widely used. In situ leaching uses a solution that is injected into underground uranium deposits to extract the uranium from the other minerals. The liquid, now pregnant with uranium, is pumped to the surface where the uranium is taken out of the solution. This process is repeated until all of the uranium is extracted. Information available to PEC indicates that pit mining most likely will be used in Pittsylvania with the possibility of some deep mining, as well.

Milling

Uranium milling involves extracting uranium from mined ore. The ore is crushed into sand size particles and the uranium is leached out. The uranium then is precipitated out of the leaching solution and dewatered, dried, and packaged. Through the extraction process, uranium is concentrated into a product referred to as “yellowcake.” In situ leaching is a combined mining and milling operation.

Tailings

Enormous quantities of radioactive waste are generated by uranium mining and milling, with only 2 to 4 pounds of concentrated uranium oxide yellowcake obtained from each ton of ore taken out of the ground. The resulting waste, or tailings, contain 85% of the original radioactivity and remain radioactive for hundreds of thousands of years. Tailings can contain several hazardous substances, including radium (which decays to produce radon) selenium, molybdenum, uranium, and thorium. The mill tailings and the mill tailings effluent are highly radioactive and acutely hazardous. The Congressional testimony of Dr. Doug Brugge, of the Tufts School of Medicine, described uranium ore “as a toxic brew of numerous hazardous materials.” For the full transcript of Dr. Brugge’s testimony, go here.
According to EPA’s Technologically Enhanced Naturally Occurring Radioactive Materials (TENORM) document, most tailings piles are located in arid areas of the western U.S where low precipitation decreases the potential for water contamination.
Still, even out West, there are problems with water management around uranium mines. Because uranium is highly soluble, surface and ground water are the most significant means of dispersal of uranium and technically enhanced naturally occurring radioactive materials from mines and mine wastes. Water coming into contact with these wastes must therefore be treated or contained – millions of gallons of water for thousands of years. Read more about water management in the TENORM document, above.

Radioactive Properties of Key UraniumIsotopes, U.S. Department of Energy, Argonne National Laboratory, EVS, August 2005.

The National Research Council is involved in a study to examine the scientific, technical, environmental, human health and safety, and regulatory aspects of uranium mining, milling, and processing as they relate to Virginia. The purpose of this study is to assist the Commonwealth in determining whether uranium mining, milling, and processing can be undertaken in a manner that safeguards the environment, natural and historic resources, agricultural lands, and the health and well-being of its citizens.

The study results are not due out until December 2011. Yet, Virginia Uranium, the company that was the main proponent of the study, has announced that it is already preparing legislation to lift the uranium ban during the next session of the General Assembly.

This suggests that the study is only a pretext for Virginia Uranium. Virginia Uranium, their lobbyists and their friends in the General Assembly appear ready to move forward, no matter the cost to Virginia’s health and environment.