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Competing agendas clash in AK permitting Differing resource priorities, climate change concerns seem set to increase litigation over permit approvals as GHG debate heats up Alan Bailey Petroleum News
Uncertainty may not be what businesses like, but uncertainty is probably what businesses will find, as various interest groups spar over competing agendas and opinions in the permitting of Alaska projects.
And at the Seminar Group’s Permitting Strategies in Alaska seminar, held in Anchorage on Jan. 15, lawyers representing different positions on the spectrum of environmental discourse described their views on where the permitting situation in Alaska has reached and where it is heading.
Jeffrey Leppo, a lawyer with major experience in supporting permit applications and a managing partner in law firm Stoel Rives LLP, characterized the current permitting situation in Alaska as “a very litigious time,” involving a confluence of different natural resource interests and evolving environmental policies.
“Just about every major permitting decision that is made in the next year is going to get challenged,” Leppo said.
Driving the uncertainty But, with little likelihood of anything around the current climate change debate in the United States being resolved in 2010, issues involving climate change legislation, regulation and litigation will drive much permitting uncertainty, an uncertainty compounded by a proliferation of climate change-driven challenges involving the use of the Endangered Species Act in Alaska.
“At a minimum, these things are going to complicate permitting in Alaska,” Leppo said.
And climate change considerations are already essential components of any environmental review under the National Environmental Policy Act, he said. NEPA is the federal legislation that often leads to the preparation of environmental assessments and environmental impact statements.
On the other hand, there are signs of the blurring of hitherto sharp distinctions in the debate over environmental protection, as Native corporations, for example, become active in pursuing natural resource-based projects.
“There may be … more of a focus on what’s a responsible development, less on development-no development alternatives,” Leppo said.
And published scientific data have become increasingly important in adding strength to arguments, on either side, over permit approvals.
“I don’t think that all is lost, at all,” Leppo said: It will continue to be possible to permit projects.
“It has always been the case … that … you (need) to be thoughtful in your permitting strategy, to think not only about what you want, but what others are thinking about your projects, to involve the various interests that have a stake in the outcome … and then be persistent,” Leppo said.
Administrative law principle Peter Van Tuyn, a partner with Bessenyey and Van Tuyn LLC who has represented environmental conservation groups and Alaska Native groups in Alaska-related litigation, emphasized the legal importance of the administrative law principle, a principle involving the delegation of expertise within government administration to specialist government agencies for the implementation of environmental law.
In effect, the government agencies act along similar lines to trial courts, with people presenting evidence for or against a permitting case, Van Tuyn said. Several different groups may present evidence to the agency, and the agency will struggle to establish the truth from all of the information, to come up with a decision.
As a consequence of the administrative law principle, a court will, in general, only overturn an agency permitting decision if the court determines that the decision was “arbitrary, capricious or contrary to law,” Van Tuyn said, adding that the terms “arbitrary” and “capricious” imply that an agency decision was in some way irrational.
The hard questions And the need to ensure that an agency decision is viewed as rational puts the onus on people applying for permits to not ignore the hard questions relating to the activities that they want to carry out.
If someone has a hard question in a permitting situation and tries to gloss over the question or perhaps ignore or avoid it, there is a significant possibility of an appeal court finding that the regulating agency acted in an arbitrary or capricious manner when approving a permit, Van Tuyn said.
“That’s why NEPA’s such an incredibly powerful statute,” Van Tuyn said. “… It doesn’t mandate the least environmentally damaging alternative be chosen. It just mandates that you ask the hard questions … In asking the hard questions and in the struggle that you go through in trying to come up with the rational answer for them — that is where projects can get improved so that their environmental impacts are … eliminated or minimized as best you can.”
Being realistic And in working through the permitting process, it is especially important for people to ensure that promises they make match reality, Van Tuyn said. People need to be realistic, he said.
“Those promises made by yourself, or possibly others, can trip you up later on,” he said.
For example, Alaska politicians of both major parties and the oil industry have often claimed that Alaska has the most stringent oversight in the world over the oil and gas industry, that Alaska takes great pride in protecting the environment and that oil companies can operate nowadays with minimal environmental impact, Van Tuyn said.
But there have been recent oil spills on the North Slope; there has also been a tug grounding incident in Prince William Sound; there were problems responding at night to a recent Adak fuel spill incident; and then there was the recent major oil spill from a well blowout offshore Australia, Van Tuyn said.
Van Tuyn questioned what the history of these recent incidents might say in terms of oil spill risks in a region such as the Chukchi Sea.
“What does that lead an agency to do?” Van Tuyn asked. If people don’t answer these hard questions realistically, they leave themselves open to lawsuits.
Climate change Tom Lindley, a partner with Perkins Coie LLP, spoke at the seminar about climate change, a topic of critical importance to the energy industry and an issue that is starting to have a major impact on the regulation of industrial activity.
In the United States there is a dramatic division in opinion on climate change between the country’s two major political parties, while worldwide there is a general acceptance of the prevailing theory of greenhouse gas-fueled global warming, Lindley said. But, regardless of what people’s beliefs are in the climate change debate, climate change regulation is coming and people are going to have to deal with it when permitting projects.
Following the recent Copenhagen international climate change conference, viewed by many as a failure, it is difficult to say whether the future will see a global system for managing greenhouse gas emissions. On the other hand, there may well be regional systems, with the United States driving what happens in North America.
“Canada and Mexico both want to work with us … and the larger the (carbon) market, the more economically efficient it is,” Lindley said.
Congressional action At the national level, Congress has been wrestling with both House and Senate bills for introducing a U.S. cap-and-trade system for greenhouse gases — the House bill passed the House in 2009, while the Senate bill has been tabled, its future uncertain in 2010.
Bills in both houses have clean energy components, Lindley said.
If cap-and-trade legislation does pass, that will particularly impact coal-fired power stations, driving a need for carbon capture and sequestration technology, with potential use of the carbon dioxide in, for example, enhanced oil recovery from oil fields and the production of biofuels. One Oregon coal-fired plant has already announced that it will close rather than install new emissions controls, Lindley said.
Meantime, the Obama administration is focusing on research into clean energy technologies. But this type of incentives-based approach to dealing with climate change has not so far achieved much, Lindley said.
And, in the absence of a U.S. cap-and-trade system for greenhouse gases, the Environmental Protection Agency has moved ahead with the regulation of carbon dioxide under the Clean Air Act — on Dec. 7 the agency finalized its endangerment finding for the gas, with the likely outcome being new federal regulations such as tailpipe standards for vehicles and the consideration of greenhouse gases in industrial air emissions permitting.
However, many people think that regulation through the Clean Air Act is an inefficient way of managing carbon dioxide emissions, and that new federal legislation specific to greenhouse gas emissions would be a preferable route, Lindley said.
“It’s one of the reasons why there is some belief that legislation will in fact pass,” Lindley said. “… You’ve got many large industry sources now supporting revised … climate legislation that will pre-empt the Clean Air Act, take it out of the picture.”
Meantime, some regions within North America have been forging ahead with their own moves to do something about greenhouse gases and there are moves to establish international standards for the reporting of greenhouse gas emissions.
Court actions But, in the absence of national legislation or international agreements on greenhouse gas emissions, the courts will likely drive what happens in the immediate future.
“There will be more judicial action before there’s active federal legislation or international agreement,” Lindley said.
There has already been legal action in relation to the protection of animals such as the polar bear and the ribbon seal; there are several lawsuits against coal-fired power plants and there are challenges at the state level, seeking greenhouse gas consideration in environmental reviews.
And the Clean Water Act has now come into play in the debate over carbon dioxide emissions, because of concerns about ocean acidification. In fact, Washington State has been required to list its coastal waters as impaired under the CWA, because of carbon dioxide acidification, Lindley said.
People are especially concerned about where all of this is heading in terms of common law, the form of law relating to claims of nuisance or neglect, he said.
“Common law … is really I think is what has people scared these days, in some ways on both sides. No one quite knows where it will go,” Lindley said. For example, appeals courts have recently been upholding nuisance complaints under federal common law against major greenhouse gas emitters.
Environmental view Rebecca Noblin, an Anchorage-based attorney with the Center for Biological Diversity, the environmental organization closely associated with moves to list under the Endangered Species Act various animals that use Arctic Sea ice, presented her views on the climate change and greenhouse gas emission situation.
People need to view environmental laws and environmental permitting as a means of improving projects, Noblin said.
“Most if not all of us want to live in a world where we still have polar bears and walruses and clean air and clean water,” she said.
People are seeing a drastic loss of Arctic Sea ice as the world’s climate warms, with the rate of ice loss exceeding most model predictions, she said. And that spells trouble for many Arctic species that rely on the sea ice, including polar bears, walrus and several species of ice seal.
Hence the listing in 2008 of the polar bear as threatened, and the petitions to list other Arctic marine mammals.
When reviewing permit applications, government agencies need to consider the impact of projects on a listed species in conjunction with the impact of climate change on the species, Noblin said. And then there may be impacts from the project on the climate change that is affecting the species habitat, she said, adding that case law indicates that this is the type of issue that the Endangered Species Act is intended to address.
Marine Mammals Protection Act The Center for Biological Diversity would also like government agencies to take into account whether a species is impacted by climate change when applying the Marine Mammals Protection Act in reviewing proposed project activities, Noblin said.
Noblin also commented on the question of applying the Clean Water Act to the acidification of seawater by carbon dioxide, saying that increasing acidity in the oceans is causing, among other things, the erosion of corals and the inhibition of shell growth of creatures like oysters.
She also commented on the Clean Air Act, saying that this act has achieved success in regulating pollutants, with benefits that greatly outweigh the act’s costs. The CAA can be used to regulate greenhouse gases, she said.
“There’s a record of the regulated industries thinking it’s a lot worse than it is,” Noblin said. In fact, when the CAA was originally passed, anticipated negative impacts on the economy failed to materialize. On the other hand, the act forced the use of new technologies that had a major impact on air quality, she said.
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