ESFPA E-News

NY Court Upholds Denial of Air Permit on Climate Change Grounds 

A New York court’s ruling to uphold a decision by the state’s Department of Environmental Conservation’s to deny a natural gas-fired power plant a permit on climate-change grounds could have enormous consequences, writes Reed Smith partner Peter Trimarchi. While the case is likely to be appealed, if it holds up it would grant the DEC and other state agencies extensive power to reject permits for any project materially increasing GHG emissions, he says.

A New York trial court’s ruling to uphold a decision by the New York State Department of Environmental Conservation (DEC) to deny a natural gas-fired power plant a key air permit on climate-change grounds could have serious consequences. Although the decision remains subject to appeal, if affirmed it will grant enormous power to state agencies to deny permits and other approvals under the Climate Leadership and Community Protection Act (CLCPA), the state’s comprehensive climate change statute.

This decision strongly reinforces the need for all businesses in New York to be aware of the statute’s scope and impact.

The CLCPA is a comprehensive statute that requires the nearly complete decarbonization of New York’s economy by 2050. Among its aggressive requirements are a statutory obligation for the state to obtain 100% of its electricity from emissions-free sources by 2040, and a requirement that the DEC establish statewide greenhouse gas (GHG) emissions limits applicable to all sectors of the economy.

CLCPA Section 7(2) also requires administrative agencies to determine whether proposed actions may be inconsistent with, or interfere with, those emissions limits. If they are, Section 7(2) requires the agency to provide a detailed statement of justification for the action notwithstanding the inconsistency and identify applicable alternatives or mitigation measures.

Challenges to DEC Authority

In 2019, the owner of the Danskammer Generating Station in Newburgh, N.Y., filed an application with the DEC for a new Title V air permit, which would authorize the replacement of its existing natural gas-fired equipment with new, more efficient equipment. On Oct. 27, 2021, the DEC rejected Danskammer’s application on the grounds that the replacement project would increase GHG emissions from the facility (due to more frequent dispatch).

By reaching this decision, the DEC effectively asserted that it has the authority to deny a permit application under Section 7(2) if the proposed action would be inconsistent with or interfere with the statewide GHG emissions limits established under the CLCPA.

Danskammer appealed, and the New York State Supreme Court, Orange County (New York’s trial-level court), upheld the DEC’s decision. The key question in the case was whether the DEC acted beyond its authority in actually rejecting the permit, versus just requiring alternatives and/or GHG mitigation measures.

Danskammer argued that Section 7(2) did not expressly authorize the DEC to deny a permit when proposed actions will interfere with CLCPA’s goals, and that by doing so, it usurped the authority of the State Board on Electric Generation Siting and the Environment (which, under the Public Service Law, has the authority to determine whether power plants should be built in the state).

Court Upholds DEC’s Authority

In its decision, the court found that the DEC’s denial of the permit was within the scope of its authority under the CLCPA. While the court acknowledged that Section 7(2) did not expressly authorize regulatory agencies to deny permits, it did not expressly forbid them from doing so, either. It therefore found it necessary to analyze the Legislature’s intent in enacting the law to determine whether agencies have the authority to deny permits under Section 7(2).

The court noted that, in enacting the CLCPA, the Legislature determined that climate change was not a developing or potential problem that might arise in the future, but instead is currently adversely affecting the state’s economic well-being and environment. It is therefore a “currently existing, urgent problem,” allowing the court to draw the “reasonable inference and conclusion” that the statute does in fact authorize the DEC to deny a permit based on its finding that the proposed action will interfere with the CLCPA’s goals of achieving the state’s GHG emissions standards.

While the case is likely to be appealed, if it were to hold up it would grant to the DEC and other state agencies enormous power to reject permits for any project that they find will materially increase GHG emissions. This would include not just air permits, but other permits issued by the DEC and other agencies, including, but not limited to, wastewater permits, water quality certifications issued under the Clean Water Act, and determinations of consistency with the Coastal Zone Management Act.

It will remain to be seen how the DEC will wield this new-found power. The DEC has recently approved expansions of manufacturing facilities that increase the use of fossil-fuels in the state, which seems at odds with the denial of Danskammer’s permit in this case. Businesses of all varieties should closely monitor the DEC’s use of this authority over the next two years until it promulgates binding regulations to implement the act.

California Extended Producers Responsibility Act Passes

Last week the California Legislature passed a modified Extended Producers Responsibility (EPR) Act that excludes paper from joining a Producer Responsibility Organization ad paying for the collection, recovery and recycling of paper.  On June 30^th Governor Newsome signed the law.  The changes to the EPR legislation reflect amendments worked on by the American Forest & Paper Association (AF&PA) which are similar to those EPR suggestions ESFPA and AF&PA were working on for the New York EPR legislation.  This is the first EPR bill passed to include an off-ramp for materials with high recycling rates, and sets a new positive precedent for other states working on EPR legislation to consider.

New York’s EPR proposals have not passed either house and we will likely see new or amended legislation in the next legislative session beginning in January.  In the meantime, we will continue to to work with AF&PA and others on getting some legislative language favorable to paper. To date we have done very similar outreach and advocacy efforts in New York and we will continue to advance these efforts through the fall.

Federal Endangered Species Act Changes

The Biden Administration has sharpened its focus on putting their stamp on the “Endangered Species Act” (ESA) and the extent of its reach.  We have already reported on the potential redesignation of the Northern Long Eared bat (NLEB) as “endangered” by the U.S. Fish and Wildlife Service (USFWS).   Such an action could trigger a variety of land-use restrictions that would hinder the wood products industry along with a number of other sectors. In response, some federal lawmakers have proposed legislation to maintain the flexibility offered by the currently existing 4(d) rule regarding harvesting protocols where the NLEB is found.  In mid-June, industry allies, Reps. Bruce Westerman (R-AR) and Pete Stauber (R-MN) introduced the “Endangered Species Flexibility Act,” also known as the “Bat Bill.”  The legislation would enshrine the NLEB 4(d) rule and common-sense guard rails around the scope of endangered species regulations. 

The US Fish & Wildlife Service (USFWS) is also taking another look at how critical habitat for endangered species is considered in the permitting process.  On June 24, USFWS published a notice in the Federal Register formally rescinding a Trump-era regulation that defined habitat as acreage currently occupied by a protected species. This is the latest iteration of a years’ long legal back and forth between the courts and federal agencies on this issue.  In 2018, for example, the Supreme Court noted that the ESA does not include a “baseline definition” of “habitat,” thereby creating uncertainty with respect to the scope of ESA protections.  In late 2020, the Trump Administration published their definition of “critical habitat” that confined the scope of ESA protections to areas where endangered plants and animals could currently be found.  The 2020 rule change drew broad support from forest landowners who claimed that it promoted their conservation efforts.  Environmental groups criticized it, however, and argued that the narrow definition undermined the intent of the ESA.  In 2022, the pendulum appears to be swinging back to positions favored by critics of the current regulation.

Add to this that NY has its own Endangered Species Act and the confusion just grows.  As we reported last week we have been communicating with DEC Division of Fish & Wildlife and are hoping we can get consideration of our forest related positions on endangered species.  We will keep this up as we watch the federal stage unfold.

House Appropriators Move Biomass “Carbon Benefits” Measure

Late last week, the House Appropriations Committee’s Interior Subcommittee approved its Fiscal Year 2023 Interior, Environment and Related Agencies appropriations bill. The measure includes a biomass energy provision that has long been an FRA policy priority. Like last year’s version, the House bill features somewhat problematic language that characterizes forest-based biomass energy as having “carbon benefits” but does not define it as carbon neutral. Since 2017, statutory language has been reauthorized annually through the appropriations process that directs the Environmental Protection Agency (EPA), Department of Energy (DOE), and the U.S. Department of Agriculture (USDA) to recognize the carbon neutrality of biomass energy in any federal energy and environmental policymaking. Working with our federal affiliate organizations last year, we prevailed in having this carbon neutrality directive reauthorized for 2022. According to our colleagues at the Forest Resources Association, Senator Susan Collins (R-ME) has been our champion in the upper chamber on reauthorizing the carbon neutrality rider. She has pledged to lead on this issue—reauthorizing the more definitive “carbon neutrality” language- once again for the 2023 appropriations cycle.

Supreme Court Limits EPA Authority to Regulate Emissions

Last Thursday, the Supreme Court (SC) ruled that the Environmental Protection Agency (EPA) cannot regulate greenhouse gas emissions from power plants under the Clean Air Act. The lawsuit was filed by 18 states that sued the EPA over President Obama’s Clean Power Plan that would have required utilities to reduce carbon emissions in the electric sector and phase out coal in favor of renewable energy. Opponents of the decision say it will severely limit the EPA’s ability to regulate greenhouse gas emissions. Supporters of the decision say it will allow reliable energy sources to continue to be used until more efficient and affordable renewable energy sources become available. What about Waters of the U.S. (WOTUS): The decision could influence a pending case that the high court will hear in October to define EPA’s authority to expand the definition of WOTUS.  As reported earlier we have signed onto an Amicus Brief on WOTUS and we signed onto comments on the Clean Air Act.

Log-A-Load for Kids Fund Drive Begins at Boonville

For 25 years, New York State Log-A-Load for Kids has participated in a nationwide program to support Children’s Miracle Network Hospitals, and the NYS Committee (i.e. the Mowrey Family) is once again reaching out to the forestry community for support.   

One way to participate is at the 2022 NYS Woodsmen’s Field Days. There will be many events going on, including fund drives and raffles. The Committee is looking for donations of goods, services, or loads of firewood to be raffled off at the Woodsmen’s Field Days as well as time at any of the booths. 

Any and all items donated are greatly appreciated and help raise thousands of dollars for children in need. Promotional items with company logos are popular and make excellent game prizes. Monetary donations will be used either for the purchase of supplies or will go directly to your local CMN Hospital. 

In celebration of New York Log-A-Load for Kids’ 25th anniversary, we are also asking our donors to please consider an additional 25% contribution. We’d like to make this a big year! 

Every donation makes a difference. If you are interested in donating or volunteering, please contact Gabriella Ferrera at gabriella@esfpa.org or Eileen Mowrey at emowrey12@gmail.com .