What You Can Say about RECs is Regulated by the FTC

Businesses who generate renewable energy, say, by using solar panels, but sell the Renewable Energy Credits (RECs) for the renewable energy they generate shouldn’t claim they “use” renewable energy. The Federal Trade Commissions has advised that such a claim would be deceptive.

The guidance from the FTC is not new, but as renewable energy becomes more prevalent, increasingly businesses are making claims about their green energy. This guidance from the FTC may seem counterintuitive, but it is consistent with the longstanding position of the federal agency.

The Federal Trade Commission issued revised “Green Guides”, 16 CFR Part 260, in 2012 that are intended to help ensure that claims made by businesses about the environmental attributes are truthful and non-deceptive under Section 5 of the FTC Act, 15 U.S.C. 45.1. The Guides are administrative interpretations of the law. Therefore, they do not have the force and effect of law and are not independently enforceable. The FTC, however, can and has taken action under the Act if a business makes an environmental claim inconsistent with the Guides

Among the relevant language in the Green Guides is, §260.15 Renewable energy claims,

(d) If a marketer generates renewable electricity but sells renewable energy certificates for all of that electricity, it would be deceptive for the marketer to represent, directly or by implication, that it uses renewable energy.

That express language is clear. But if there was any doubt as to what is intended that uncertainty is assuaged by the following explanatory example provided in the Green Guides,

Example: A toy manufacturer places solar panels on the roof of its plant to generate power and advertises that its plant is “100% solar-powered.” The manufacturer, however, sells renewable energy certificates based on the renewable attributes of all the power it generates. Even if the manufacturer uses the electricity generated by the solar panels, it has, by selling renewable energy certificates, transferred the right to characterize that electricity as renewable. The manufacturer’s claim is therefore deceptive. It also would be deceptive for this manufacturer to advertise that it “hosts” a renewable power facility because reasonable consumers likely interpret this claim to mean that the manufacturer uses renewable energy. It would not be deceptive, however, for the manufacturer to advertise, “We generate renewable energy, but sell all of it to others.”

Despite that being the law, the environmental industrial complex regularly articulates that buying RECs can create market demand for clean energy sources. In describing LEED credit NC-v4 EAc7: Green power and carbon offsets, a U.S. Green Building Council associated vendor claims, “the benefits of renewable energy are well understood by the general public, and so pursuing this credit can help you advertise your commitment to environmental responsibility.” That statement is problematic and the related advertisement requires caution to not run afoul of the FTC.

This is not simply an instance of Detective Pikachu being “in” while True Detective is “out” but is about the FTC and state attorneys general policing environmental claims sua sponte. Moreover, there have been claims by tenants against landlords arising from green power that would not pass FTC muster.

There is concern that the Green Guides not only go too far but have not kept pace with the marketplace and need to be corrected and updated where today some of the guidance results in the federal government inhibiting truthful marketing in the misguided name of the FTC being a policeman wielding prior restraint in the name of truth in advertising.

As renewable energy, including onsite solar installations, become more common so too will questions about what can be claimed about that green power and those installations.

An HREC is Not a REC in a Phase I Environmental Site Assessment

I review a large number of Phase I environmental site assessments, and year in, year out, the largest number of questions I field are about Historical Recognized Environmental Conditions.

The environmental professionals who perform those assessment generally do not take heed of Eduardo Galeano’s quote, “History never really says goodbye. History says, ‘see you later.’”

By way of background, a Phase I environmental site assessment is the process of evaluating a property’s environmental conditions and assessing potential liability for contamination. And one might assume that since the EPA issued rule, for what constitutes all appropriate inquiries, provides that ASTM International Standard E1527-13 Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process is consistent with the requirements of the EPA rule and can be used to satisfy the statutory requirements, there would be few, if any, questions, .. just follow ASTM E1527-13!?

However, both because of the very large number of Phase I environmental site assessments conducted each year and the huge dollar implication of the associated real estate transactions when prospective purchasers are seeking protection from potential liability under the Comprehensive Environmental Response, Compensation, and Liability Act (the Superfund law) as an innocent landowner, a contiguous property owner, or a bona fide prospective purchaser, there are questions. And the most frequently asked questions I field are about Historical Recognized Environmental Conditions.

ASTM E1527 – 13 describes an Historical Recognized Environmental Condition as ..

a past release of any hazardous substances or petroleum products that has occurred in connection with the property and has been addressed to the satisfaction of the applicable regulatory authority or meeting unrestricted use criteria established by a regulatory authority, without subjecting the property to any required controls.”

Some context is likely useful. A Recognized Environmental Condition (a REC) is “the presence or likely presence of any hazardous substances or petroleum products in, on, or at a property: (1) due to any release to the environment; (2) under conditions indicative of a release to the environment; or (3) under conditions that pose a material threat of a future release to the environment.”

And an Historical Recognized Environmental Condition is distinct from the Controlled Recognized Environmental Condition (a CREC) which applies to an environmental condition on a site that has received regulatory closure but are still subject to controls. A CREC is a subset of a REC.

Significantly, an Historical Recognized Environmental Condition is not a REC. To be clear an Historical Recognized Environmental Condition is not a recognized environmental condition for the purposes of a Phase I environmental site assessment.

It is almost that simple. For a past REC to be determined an Historical Recognized Environmental Condition, the release or other condition must have been previously cleaned up or now meet current regulatory standards without clean up.

Additionally, in the event of prior regulatory intervention related to the condition, that the final action not require use restrictions or engineering controls (restrictions on using water for drinking or a cap or the like).

A good example of an Historical Recognized Environmental Condition that is very common is when a regulatory agency issues a “no further requirements” determination as an UST is properly abandoned in place.

And to be an Historical Recognized Environmental Condition, the condition must meet current regulatory standards.

Note, some conditions identified as an Historical Recognized Environmental Condition under the prior version ASTM E1527-05 will no longer meet this determination under the revised express language of current, 2013, version ASTM E1527-13.

Again, an Historical Recognized Environmental Condition (an HREC) is not a Recognized Environmental Condition for the purposes of a prospective purchaser seeking protection from potential liability under CERCLA.

FTC Finds Truly Organic is Not

By way of a federal court order that became final last month, Truly Organic Inc. and its founder will pay $1.76 million to settle a Federal Trade Commission greenwashing complaint alleging that their nationally marketed bath and beauty products are neither “certified organic” nor “vegan” as falsely claimed.

According to the FTC’s complaint, in this era when many consumer purchases are influenced by environmental claims, since at least 2015, the defendants advertised, labeled, offered for sale, and sold a range of personal care products to consumers, including haircare products, body washes, lotions, baby products, personal lubricants, and cleaning sprays. The products fall into two categories: First, those that Truly Organic “makes” by buying wholesale bath and beauty products and adding ingredients designed to increase their visual appeal; and second, bath bombs and soaps that they “buy as finished products” from online wholesalers and resell at a substantial markup.

Truly Organic sold products nationwide using its own website and voracious social media accounts. The company also sold through third-party websites, including prominent retailers like urbanoutfitters.com, nordstrom.com, and aerie.com, providing third parties with marketing materials used to market and sell Truly Organic products.

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts or practices in or affecting commerce.”

The complaint alleged that to induce customers to buy Truly Organic products, the defendants used a variety of fraudulent statements that implied their products either are wholly organic or certified organic in compliance with the USDA’s National Organic Program. These deceptive statements included claims that Truly Organic products contain “100% Organic Ingredients,” are “certified organic,” are “USDA . . . organic,” are “100% organic,” or are “Truly Organic.”

The FTC contended, however, that the defendants’ products actually contain ingredients that are not organic, with the non-organic ingredients included only in lists that are buried among other text on product labels and websites.

Further, this is not about organic calamansi juice being “in” and organic celery juice being “out” but that some Truly Organic products incorporated non-organic ingredients that could have been organically sourced, including non-organic lemon juice.

Other Truly Organic products contain non-organic ingredients that the USDA does not even allow in organic handling, such as the chemicals cocamindopropyl betaine and sodium cocosurfactant.

In addition, according to the complaint, some Truly Organic products, such as their bath bombs and soaps, contain no organic ingredients at all, as they come as finished products from wholesalers who do not offer organic products. The complaint alleged that none of the defendants’ products have been certified organic in compliance with the USDA. Truly Organic also falsely advertised products as vegan, even though certain products contain non-vegan ingredients like honey and lactose.

Marketers don’t get to greenwash.

And outrageously, the defendants also admitted they continued to supply marketers and internet influencers with product labels featuring the false certifications for months after resolving a 2016 USDA investigation, and, through 2018, continued to endorse and upload influencer videos to Truly Organic’s YouTube channel containing “certified organic,” “USDA organic,” and “vegan” claims. During this time, the complaint alleged that the defendants regularly bought hundreds of gallons of bath, beauty, and home products they knew did not contain 100 percent organic ingredients, added ingredients to increase their visual appeal, repackaged them, and deceptively sold them to consumers as organic.

The court order settling the FTC’s charges contains both conduct and monetary provisions. First, the order prohibits Truly Organic and Maxx Harley Appelman (.. it is significant the FTC also pursued a claim against the principal of the company) from making deceptive claims, including false or unsubstantiated claims, that any good or service: (1) is wholly or partially organic; (2) contains or uses organic ingredients; (3) is certified organic; (4) is vegan; or (5) has been evaluated by any third party, including one affiliated with the USDA organic program, based on its environmental or health benefits or attributes.

Second, the order bars the defendants from making any representation about the environmental or health benefits of any good or service, unless it is non-misleading, true at the time it is made, and is supported by competent and reliable scientific evidence.

Third, the order prohibits the defendants, in connection with the sale of any good or service, from providing anyone else with the means and instrumentalities that would enable them to make any representation prohibited by the order.

Finally, the order imposes a $1.76 million judgment against the defendants. The FTC filed the proposed order in the U.S. District Court for the Southern District of Florida, and it has now been entered by the court.

“To know if a product is ‘truly’ organic, consumers have to rely on companies to be truthful and accurate,” according to Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection. “That’s why we’ll hold companies accountable when they lie about their products being organic, especially when they’ve used fake certificates and ignored USDA warnings.”

Government to Allow Less Lead in Drinking Water

EPA is expected to publish this week in the Federal Register the first proposed regulatory revisions to the National Primary Drinking Water Regulation for lead in more than 30 years.

The United States has made tremendous progress in lowering children’s blood lead levels (.. children are a good data set analogous to the broader population). As a result of multiple Federal laws, including the 1973 phase-out of lead in automobile gasoline, the 1978 Federal regulation banning lead paint for residential use, and the 1995 ban on lead in solder in food cans, the median concentration of lead in the blood of children aged 1 to 5 years dropped from 15 micrograms per deciliter in 1976–1980 to 0.7 micrograms per deciliter in 2013–2014, a decrease of 95%.  Although childhood blood lead levels have been substantially reduced there is overwhelming evidence to conclude that there are still adverse health effects associated with low-level lead exposure.

After the successes of those regulatory bans on lead, today drinking water is the largest controllable source of lead exposure in the U.S.

Lead enters drinking water mainly from corrosion of lead containing plumbing materials. Lead was widely used in plumbing materials until Congress banned its use in 1986, and there are an estimated 6.3 to 9.3 million homes served by lead service lines in thousands of communities nationwide, in addition to millions of older buildings with lead pipes, solder, fittings or service connections across the U.S. (.. and yes, PVC pipes also contain lead compounds that can leach into drinking water).

Since the implementation of the 1986 lead rule, drinking water exposures have declined significantly, resulting in major improvements in public health. For example, the number of the nation’s large drinking water systems that have exceeded the action level of 15 parts per billion (ppb) has decreased by over 90% and over 95% of the all water systems have not reported an action level exceedance in the last 3 years.

Despite this progress, there is a compelling need to modernize and improve the rule because there is no safe level of lead in drinking water.

Based on the pre-publication version, the proposed rule focuses on 6 key areas, requiring community water systems to:

  1. Identifying the most impacted areas by requiring water systems to prepare and update a publicly-available inventory of lead service lines and requiring water systems to “find-and-fix” sources of lead when a sample in a home exceeds 15 ppb.
  2. Strengthening drinking water treatment by requiring corrosion control treatment based on tap sampling results and establishing a new lower trigger level of 10 ppb (e.g., trigger is described below).
  3. Replacing lead service lines by requiring water systems to replace the water system-owned portion of the lines when a customer chooses to replace their portion of the line. Additionally, depending on their level above the trigger level, systems would be required take line replacement actions.
  4. Increasing drinking water sampling reliability by requiring water systems to follow new, improved sampling procedures and adjust sampling sites to better target locations with higher lead levels.
  5. Improving risk communication to customers by requiring water systems to notify customers within 24 hours if a sample collected in their home is above 15 ppb. Water systems will also be required to conduct regular outreach to the homeowners.
  6. Better protecting children in schools and child care facilities by requiring water systems to take drinking water samples from the schools and child care facilities served by the system.

That is, this is not a residential issue only. Some months ago I published a blog, Is There Lead in the Drinking Water of Your Green School? Among the issues raised in that post is why lead is found in the drinking water of some newly constructed LEED certified schools.

EPA’s proposal does not change the existing action level of 15 ppb. However, EPA is proposing for the first time a new lead trigger level of 10 ppb, which would compel water systems to identify actions that would reduce lead levels in drinking water. EPA’s new 10 ppb trigger level will enable systems to react more quickly should they exceed the 15 ppb action level in the future. These actions could include reevaluating current water treatment or conducting a pipe corrosion control study. Significantly systems above 10 ppb but below 15 ppb would be required to set an annual goal for conducting replacements and conduct outreach to encourage resident participation in replacement programs. Water systems above 15 ppb would be required to annually replace a minimum of 3% of the number of known or potential lines in the inventory at the time the action level exceedance occurs.

Critics have complained that requirement to replace a minimum of 3% of lead impacted lines annually, down from a requirement of 7%, could raise health risks, but EPA is clear that the changes will result in more line replacements, including because the proposed rule removes the many exemptions that currently stall line replacements. Moreover, those critics ignore the new lower 10 ppb trigger for lead reduction activities; a lower floor that should be applauded. 10 ppb is not simply a ‘90s grunge is “in” versus a ‘70s tailoring is “out” trend, but rather the lower floor that has major implications.

Lead is drinking water is much more than only a Flint, Michigan problem. Last year the EPA described lead as the number one environmental public health hazard in the U.S.

Again, to be clear, there is no safe level of lead in drinking water. Period.

That government operated water utilities deliver water containing lead is not acceptable.

Water utility level replacement of lead impacted water lines is incredibly efficacious. Most Americans will not drink only certified bottled water. But they should use a ‘point of use’ certified filter on all tap water and flush the water to reduce exposure to lead from household and school building plumbing.

Comments on the proposed rule must be received within 60 days of being published. And beginning today, use a filter on the tap water at home and work!

ESG Disclosure Simplification Act Passes Committee But Will Fail

On September 20, 2019, the Financial Services Committee in the U.S. House of Representatives passed H.R. 4329, the ESG Disclosure Simplification Act of 2019.

The bill would require all public companies to disclose “environmental, social, and governance [ESG] metrics” as material information about the company. Although there is little if any chance that the bill will become law given the current politics in Washington, DC, the bill’s passage in the House Committee highlights that issues of ESG disclosures continuing to be pressing.

H.R. 4329 would require every public company to disclose to shareholders “a clear description of the views of the issuer about the link between ESG metrics and the long-term business strategy of the issuer.”

The Bill if enacted would also create a new permanent Sustainable Finance Advisory Committee that must within 180 days of first meeting submit to the SEC “recommendations about what ESG metrics” the SEC should require be disclosed. But again, there is no realistic scenario under which this becomes law.

However, issues of ESG live on. Governments in Europe have been pushing businesses to make ESG disclosures for years. There is no similar push in the U.S., except for this and similar legislation; all rightly doomed to fail. On this side of the ocean, a small but vocal number of investors evaluate their stock portfolios by matters that include ESG metrics. That private, non governmental response to the fact that many American investors actually believe issues of “energy and the environment” are among the top priorities, takes up a lot of virtual space in social media, and is a positive.

Numbers are difficult to quantify but one of the world’s largest investment banks, based in Europe, has said that by 2020 it expects half of assets managed by investment companies to have expressed ESG considerations. That number, on a global basis, seems overly optimistic.

The broad lack of widespread public disclosures, utter lack of standardized metrics, and complete lack of enforceable goals makes it difficult accept that ESG metrics will be widely considered in in the U.S. Without any of those three, much, if not most, of the ESG information in the market is at best misinformation. And such creates potential liability for companies making ESG disclosures; if not also some silly results, including maybe the most ridiculed, when last year a major U.S. real estate company very publicly announced its principal ESG “environmental initiative” banning meat from its offices and expense accounts.

In the realm of securities disclosures it is often not enough to be correct. In a year when ‘redefining motherhood’ is in and ‘redefining masculinity’ is out, setting priorities not to mention articulating solutions, is fraught with risk.

This law firm regularly advises public companies about environmental and sustainability including matters that may be subject to the company’s disclosure obligations including annual reports on form 10-K, as well as matters of ESG reporting.

The failure of H.R.4329, the ESG Disclosure Simplification Act of 2019, is not only all but certain, but is not a bad thing.

This is an instance where the marketplace should control and not Congress. More and additional government regulation, micromanaging this discreet set of metrics that may not be material suitable for public disclosure will only stifle and limit good business practices that result in environmental progress. Capitalism has and will drive progress. If public companies determine that investors desire ESG disclosures, management will evaluate the risk and respond.

That market driven decision making will not only drive ESG disclosures, which can be a good thing, and also fuel an underlying environmental stewardship of the planet made possible by today’s technological advances enabled by capitalism, .. all in a positive way that no new law could accomplish.

We can save the planet with capitalism.

LEED Offers Companies a Response to Declining Bird Populations

Condor in the Cordillera Huaywuash, Peru

In response to a much publicized new study on North American bird populations that appeared in the journal Science last month, we received a significant number of inquiries from businesses about what an appropriate response might be from a responsible company?

The study found “cumulative loss of nearly three billion birds since 1970, across most North American biomes, signals a pervasive and ongoing avifaunal crisis.” Since 1970, the researchers estimated, the North American bird population had declined by roughly 29%. The study was published with its own hashtag #BringBirdsBack that was successful in garnering a large public reaction on social media and otherwise to “an overlooked biodiversity crisis.”

So, what is an ethically oriented response for a company?

We have suggested for some businesses an ideal response can be voluntary compliance with the LEED v4.1 Bird collision deterrence credit that aims to “reduce bird injury and mortality from in-flight collisions with buildings.”

The U.S. Green Building Council’s LEED green building rating system is widely accepted and while LEED certification certainly has its advantages, our advice is that a very good response can be to enact company practices complying with this single LEED credit. The credit publicly available at the USGBC website, has three requirements:

There are new v4.1 versions of the credit for new construction as well as existing building. 1. For new construction, companies should develop a building façade to make the building and site structures visible as physical barriers to birds (.. yes, including ‘bird safe glass’). 2. For all buildings, including existing structures, limit the duration of interior and exterior lighting. Exterior building fixtures that are not necessary for safety, building entrances, and circulation can be automatically shut off from midnight until 6 a.m. The credits allow for manual override capability for after hour use. And 3., the credit requires a three year monitoring plan to identify and document locations where repeated bird strikes occur such that potential design solutions can be implemented. The credit language is here.

Utilizing a third party created LEED credit (although in this instance originally drafted by the American Bird Conservancy) can provide a credible response mitigating risk of criticism for greenwashing, that can be touted in corporate sustainability claims including in ESG reporting (yes, public companies are including bird safe policies in public reporting). Be aware LEED water use reduction credits are frequently used to articulate potable water reduction requirements.

But there are issues with allowing public sentiment reacting to the environmental issue of the minute to dictate corporate, or for that matter public, policy.

A 2014 study, conducted by scientists from the Smithsonian Institution and the Fish and Wildlife Service, estimated that between 365 million and 988 million birds are killed in the United States every year as a result of building collisions. But that study concluded that building collisions, driven by the increased use of glass building facades, are second to cats as the greatest threat to birds. But banning housecats does not make a good business response.

It is suggested that green building programs, like LEED, encourage using natural light to reduce energy use and encourage green views, result in the use of more glass as a building skin. And windows are no friends to birds as we all know from the popular old Windex television ad. Moreover, in a published report, the Urban Green Council, a chapter of the USGBC indicates “today, almost all large, complex buildings make the same trade off:  they add more glass (leading to an energy penalty), and make up for it with superior mechanical systems.” In response to that collateral damage of the environmental kind. USGBC now awards up to one point on its LEED scale for the adoption of bird collision deterrence mitigation.

So yes, it is an unintended consequence of LEED green building that creates the solution to this environmental issue of the day.

But there is no nationwide repository of bird casualties or injuries, so estimating the scope of this is difficult. It is widely perceived that building collisions, and particularly collisions with windows, are a major threat to birds, with estimates swinging widely. A recent literature search published in The Condor, based on 23 studies, estimates that between 365 and 988 million birds are killed annually by window collisions in the U.S., with roughly 56% of mortality at buildings 4 to 11 stories, 44% at buildings 1 to 3 stories, and less than 1% at skyscrapers. But keep into in mind there are only about 21,000 buildings 12 stories or higher in the U.S. versus over 123 million 1 to 3 story buildings, so statistically only 24 birds might perish each year at any one skyscraper (and that number is likely artificially high because only a small percentage of those skyscrapers are located in bird flyways).

How many birds can actually be saved by a building implementing the LEED credit is debatable but remember the task is an ethically oriented response for the large number of businesses that contacted our office this month, reacting to the overwhelming public outcry on social media and otherwise to the 3 billion birds that vanished.

However, on a personal note I spent most of August trekking and climbing across the Cordillera Huaywuash in Peru, where I saw nearly a hundred Andean condors (.. including the condor in the photo above), one of the bird types that have flourished, according to the journal Science study, increasing in population by more than 200%, in the Americas since the 1970s.

Greenbuild – The Target Rich Environment for Green People

I am often asked, “how can I expand my green building business?” And I have offered the same response for more than a decade – attend the Greenbuild International Conference and Expo (.. yes, you will have to talk with people while you are there).

This year Greenbuild is in Atlanta from November 19 thru 22 with some of the best original programming on “disaster prep” (.. more than food prep).

Greenbuild has become much more than only “green building” as sustainability has become woven into the fabric of business, the conference has evolved into the watering hole for leaders across the entire environmental industrial complex.

I do not claim any particular knowledge or skill in business marketing. But Greenbuild has been a prime source of new clients for my environmental law practice focusing on sustainability and green building law practice (.. okay, this blog is actually our number one source of new clients, but Greenbuild is second)!

I have attended a lot of Greenbuilds. Actually my first U.S. Green Building Council “Green Building Conference” (.. yes, pre Greenbuild) held in conjunction with the National Institute of Standards in Gaithersburg, Maryland in 1994 had only 450 people in attendance. While attendance in recent years is off a bit from the huge Greenbuild the first time the conference was in Boston in 2008, with 27,995 attendees (.. that was a party!), last year the 15,373 attendees in Chicago dwarfed the first Greenbuild in 2002 when a mere 4,189 people gathered in Austin.

Those 15,373 attendees last year were from 91 countries, despite the internationalization of LEED and several worldwide Greenbuild expos across the globe.

Greenbuild attracts all types of wild things across the environmental industrial complex; not just owners of green buildings. Last year 35% of those in Chicago were from architecture or engineering firms, 22% were developers or builders, 7% were utilities, and 8% were manufacturers, not to mention the very large numbers of professionals offering services and consulting, including, yes, a respectable assemblage of real estate attorneys.

And Greenbuild is sustainable. My favorite factoid reported by Informa Exhibitions (.. USGBC sold Greenbuild some years ago) is that each participant produced 5.1 lbs. of waste; of which more than 86% was diverted. And if that number does not excite you, Informa tracked and reported the alternative fact that total water footprint of the event was 5,537,275 gallons.

Last year there were 350 exhibitors on the 100,000 square feet Expo Floor. It is all but impossible not to encounter new vendors and innovative suppliers and this year with two happy hour events on the Expo Floor that will be “the place” to connect with colleagues and network with complete strangers. Educational activities abound with more than 200 formal sessions.

Those 2018 demographics are proof that Greenbuild is the largest green building gathering each year and unquestionably the par excellence opportunity for business development among “green people.”

Greenbuild 2019 in Atlanta will be “the” target rich environment for green people this year. It is your chance to not only rub elbows with USGBC CEO Mahesh Ramanujam, the man to know, but also the thousands of others who make a living in the environmental industrial complex.

It is just over 58 days until this once a year excelsior (.. Stan Lee’s battle cry) opportunity to enlarge your green building business.

For those who will complain that this blog post is shameless promotion, that may be true, but it is also correct that Greenbuild has been a prime source of new clients for my environmental law practice for more than a decade! LEED is still ground zero for green building. It has become all but a spiritual movement, with more than 98,000 registered and certified projects participating in LEED across 167 countries and territories. Every day, 2.6 million square feet of building space certifies to LEED.  I won’t promise attending will be a quest for self discovery or that you will meet your next spouse among one of the more than 14,000 individual USGBC members, but if you want to benefit from that business volume and be in the room with more sustainable business leaders than will gather any of place or time this year, you need to be at Greenbuild.

As a reader of my blog, if you email me before Greenbuild, I will gladly buy you a cup of coffee or other libation at an Atlanta watering hole. I made a similar offer in past years and had a great time meeting a lot of very fun people for drinks. I hope to see you in Atlanta in November.

EPA Rolls Back Proposed “Waters of the United States” Definition

Last Thursday the EPA and Department of the Army announced that the agencies are repealing a 2015 rule that had proposed to expand the definition of “waters of the United States” under the Clean Water Act.

Despite claims from some activists that “the sky is falling” with this change in environmental regulation, the real impact will be little more than the acorn that fell on Chicken Little’s head, because the agencies are at the same time recodifying the longstanding and accepted regulatory definition of waters of the United States that existed prior to the June 29, 2015 rule (that sought to expand what is “navigable water”). To be clear what is being repealed was a proposed rule that never went into effect.

With this final repeal, the agencies will implement the pre 2015 regulations, which are currently in place in more than half of the states (i.e., there are some states, tribal and local governments with their own definitions of jurisdictional waters). This September 12, 2019 final rule takes effect 60 days after publication in the Federal Register.

In announcing the final rule, in advance of it being published, the agencies described that they are repealing the 2015 rule for four principal reasons:

First, the agencies conclude that the 2015 rule did not respect the legal limits on the scope of the agencies’ authority under the Clean Water Act as intended by Congress. Second, the agencies conclude that in promulgating the 2015 rule the agencies failed to adequately consider and accord due weight to the policy of the Congress in Clean Water Act section 101(b) to “recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution” and “to plan the development and use . . . of land and water resources.” 33 U.S.C. 1251(b). Third, the agencies repeal the 2015 rule to avoid interpretations of the Clean Water Act that push the envelope of their constitutional and statutory authority absent a clear statement from Congress authorizing the encroachments of federal jurisdiction over traditional State land-use planning authority. Lastly, the agencies conclude that the 2015 rule’s distance-based limitations suffered from certain procedural errors and a lack of adequate record support.

With this final rule, the regulations defining the scope of federal Clean Water Act jurisdiction will be those portions of the federal law as it existed before the amendments promulgated in the 2015 rule, being the 1986 regulatory definition at 40 CFR 230.3(s).

The 2015 rule “clarifying” the scope of “waters of the United States” was a politicization of science that would have resulted in tens of millions of new acres of privately owned land being removed from productive use and placed under the jurisdiction of the federal government.

For those uninitiated in the moving target clarifying what are “navigable waters of the United States,” defining where those waterways begin and end has since the enactment of the 1899 Rivers and Harbors Act been the subject of disputes between the federal government and land owners (predating the modern environmental movement).

There has been perversion of what are “waters of the United States.” From the 1970s through the 1990s, federal courts as well as the agencies interpreted an expanded bigger moving upstream scope of Clean Water Act jurisdiction as necessary to and consistent with the Act’s goals of protecting water quality. Supreme Court decisions in 2001 and 2006 held that the scope of navigable waters must be interpreted more narrowly. The justices in the Rapanos v. United States, 547 U.S. 715 (2006) decision were clear the agencies exceeded their authority but split on how this was to be accomplished. The agencies have been working since the Supreme Court decisions to provide clarification and predictability in the procedures used to identify waters that are, and are not, covered by the Clean Water Act. The 2015 Rule, and this new rulemaking effort, reflect the agencies’ efforts (.. under very different political times) to provide that needed certainty and predictability.

This was a signature issue for the President in the 2016 election. This current action follows the February 28, 2017, Presidential Executive Order on “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.” The Order states that it is in the national interest to ensure that navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of Congress and the states under the Constitution. It also directs the EPA and the Army to review the existing Clean Water Rule for consistency with these priorities and publish for notice and comment a proposed rule rescinding or revising the rule, as appropriate and consistent with the law. Further, the Order directs the agencies to consider interpreting the term “navigable waters,” in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos.

It has been over 40 years since the Cuyahoga River caught fire spurring the 1972 passage of the Clean Water Act. The law was intended to target big, point source pollution like sewage leaks and oil spills, and the continuing efforts to use a definition of navigable water from the 1899 Rivers and Harbors Act to describe the scope of the Clean Water Act, not only does not well serve the potable water issues of the day, and are not only junk science, but silly talk.

This is a positive step toward what is properly “navigable waters of the United States” and maybe best characterized as back to the future, in it will no doubt be challenged in the courts and is a long way from being final.

Read the prepublication version of this final rule.

Radon Caused More Than 21,000 Deaths Last Year

Radon causes more than 21,000 lung cancer deaths in the U.S. every year. Despite that it is totally preventable, radon is the number one lung cancer killer in nonsmokers.

Radon is widely described as the primary source of indoor and household air pollution in the U.S.

High radon levels are found in every state. Levels can vary widely, even from home to home in the same neighborhood.

Radon is a noble gas that comes from the natural breakdown of uranium, phosphate and a number of common minerals in soil and water and gets into the air you breathe. Radon typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Radon can also enter your home through well water. Your home can accumulate radon inside.

Nearly one out of every 15 residences in the U.S. is estimated by EPA to have an elevated radon level of 4 picocuries per liter, or pCi/L, or higher. 4 pCi/L is the EPA action level for radon, but there is no (minimum mandatory) federal cleanup standard or the like because this inorganic compound is naturally occurring.

There is no real question that radon causes cancer. There is genuine dispute about at what level radon is carcinogenic. The science is clear at high levels, but low dose radon risk assessment gets a bit fuzzy?

EPA recommends, if you are buying a home have it tested for radon. A satisfactory radon test should be a contingency in every contract of sale.

For a new home, ask if radon-resistant construction features were used and if the home has been tested.

There is no known safe level for exposure to radon, but EPA recommends you fix a home if the radon level is 4 pCi/L or more. Be aware that the World Health Organization recommends countries adopt a reference level for radon at 2.7 pCi/L, significantly below EPA’s 4 pCi/L. Again, all of this is not without controversy. There are other cost benefit studies that EPA has reviewed questioning evidence of limiting exposure below 8 picocuries?

There is no doubt there is radiation risk even at low levels. Radon levels less than 4 pCi/L still pose a human health risk, and in many cases, may be reduced at very modest cost for testing and fixing the home.

This more “the sun” than “a black hole.”

Simple and inexpensive retrofits have been shown to reduce radon levels on average by 50% in houses. The techniques may also lower levels of other soil gases and decrease moisture problems.

First you may wish to find out if you are buying a home in a high radon area. The EPA’s map of radon zones shows which areas have the greatest potential for elevated indoor radon readings.

Radon mitigation features can be easily and inexpensively installed with common building practices and materials. The techniques may vary for different foundations and site requirements, but the basic elements are:

Gas Permeable Layer. This layer is placed beneath the slab or flooring system in new construction to allow the soil gas to move freely underneath the house. In many cases, the material used is a 4 inch layer of clean gravel. This gas-permeable layer is used only in homes with basement and slab-on-grade foundations; it is not used in homes with crawlspace foundations.

Plastic Sheeting. Plastic sheeting seams sealed is placed on top of the gas permeable layer and under the slab to help prevent the soil gas from entering the home. In crawlspaces, the sheeting is placed over the crawlspace floor.

Sealing and Caulking. All below-grade openings in the concrete foundation floor are sealed in existing homes to reduce soil gas entry into the home.

Vent Pipe. The preferred retro fit for an existing home is a 3 inch gas tight or PVC pipe installed from the gas permeable layer through the house to the roof to safely vent radon and other soil gases above the house.

Curiously, existing green building certification systems (e.g., LEED, Green Globes, IgCC, etc.), almost to the one, while purporting to give gravitas to indoor air quality, do not adequately make provision for matters of radon, despite the inorganic compounds recognition as “the” primary source of indoor air pollution. And there are very few, if any, mandatory radon laws across the U.S.

You cannot see, smell, or taste radon. But according to the EPA, radon causes about 21,000 lung cancer deaths per year; deaths that are 100% preventable. Testing is the only way to find out your home’s radon levels. EPA and the Surgeon General recommend testing all homes for radon.

State Law Trumps on Location of Solar Panels

There will be a brief hiatus in regular blog posts during the month of August. I am in Peru walking slowly up the very big hill that is Siula Grande (.. in lieu of blog posts, read the book or watch the movie, “Touching The Void” about the first guys to summit this mountain).

“Here comes the sun, and I say, It’s all right” is how a new decision on solar energy generating stations by Maryland’s highest court begins, quoting The Beatles song, “Here Comes the Sun.”

This case is instructive beyond Maryland’s borders because it involves the intersection of states’ efforts to promote solar energy generation as part of its renewable energy policies, and county governments’ local planning and zoning prerogatives. The Maryland Court of Appeals found state environmental law preempts local zoning authority with respect to solar energy generating stations.

Perennial Solar, LLC filed an application in September, 2015 and was successful in obtaining a zoning special exception and variance to construct a solar panel farm on two contiguous rural agricultural properties totaling 86 acres.

While a petition for judicial review, filed by opponents of the solar generating station, was pending, Perennial filed a motion for pre appeal determination challenging the subject matter jurisdiction of the Circuit Court for Washington County on the ground of state law preemption by implication. After a hearing, the circuit court granted Perennial’s motion, holding that local zoning authority is preempted by state environmental law.

Washington County and the aggrieved landowners appealed the decision of the circuit court to the Court of Special Appeals. In a reported opinion, the intermediate appellate court applied Maryland case law outlining the applicable factors when considering the doctrine of implied preemption. Perennial Solar, 239 Md. App. 380. The Court of Special Appeals noted that “preemption by implication occurs when a local law ‘deals with an area in which the [General Assembly] has acted with such force that an intent by the State to occupy the entire field must be implied.’” Id. at 386

This appeal to Maryland’s highest court followed. That court has frequently explained that Maryland state law may preempt local law in one of three ways: (1) preemption by conflict; (2) express preemption; or (3) implied preemption.

In the instance, the state statute, Public Utility § 7-701, et seq., was originally enacted in 2004 to facilitate the State’s transition to renewable energy sources. That statute has been amended and altered several times, including to create and increase Maryland’s renewable portfolio standard.

Some who question this decision point out that the statute does not even define solar “generating station,” so how could it preempt such a solar panel installation?

But the Court in this 7 – 0 decision, applying the principles of implied preemption to PU § 7-207, found it is clear that the legislature intended to vest final authority with the State Public Service Commission for the siting and location of generating stations requiring a Certificate of Public Convenience and Necessity from that State body. The Court expressly held, the statute manifests the general legislative purpose to create an all-compassing statutory scheme of solar energy regulation.

Interesting the most important analysis of whether the General Assembly has acted with such a force in this field that local zoning authority over generating systems is impliedly preempted, is buried in the dicta in this 38 page opinion considering a secondary factor, that during the 2019 legislative session, the General Assembly once again considered this very matter. Specifically, the legislature considered H.B. 1227/S.B. 997, which would have amended PU § 7-207(e) to require that the PSC receive from local government “a written statement that the proposed generating station conforms with all applicable county or municipal zoning land use requirements” before the PSC could issue a CPCN for a solar photovoltaic system or wind system. Recognizing that HB 1227 would alter the PSC’s preemptive authority, the Fiscal and Policy Note associated with HB 1227 stated that “[i]n practical terms, the bill establishes local preemption authority for the siting of solar and wind facilities in the State.” Id. Notably, had HB 1227 been enacted, local zoning approval would have been required as a condition precedent to PSC approval and local zoning would have preempted the PSC’s approval on matters related to the siting or location of solar facilities. But with this appeal pending, HB 1227 was defeated in the 2019 session.

Despite being relegated to dicta in the opinion, that recent legislative history was arguably the most significant fact in terms of preemption analysis and the Court could have relied upon it. With full knowledge of this pending case, the legislature could have changed the law and it did not.

In context, this is the same legislature that some years ago made it the law that All Solar Panels are Pervious in Maryland, for the purposes of zoning, construction and stormwater; in a Solomonic public policy balancing act between water quality and energy, where the importance of onsite renewable energy won out.

It is clear that the high court reached the right legal conclusion, but the larger issue is that many see this as a bad law and terrible public policy? This is not the same as location of a utility scale power plant or transmission lines that benefit the greater public good. Onsite alternative energy generation and distributed small generation systems not only do not offer the same overwhelming good benefit, but often have unintended consequences when small power generating systems litter yards, small and large across the country, that impact quality of life. Many are surprised that the legislature did not act in the 2019 session to correct this questionable energy public policy that usurps the near 100 year old historical convention of local land use control.

Environmentalists are concerned that this very broad articulation of preemption went far further than was necessary to reach this result and will result in unintended consequences, including that a county pesticide ban in Montgomery County, Maryland will, by this rationale, be overturned when the case is heard by this court.

This state environmental law that trumps local zoning law is a horrible example of government choosing winners and losers in sources of power generation. It is more than just the state putting it thumb on the scale when the court, which has policy making authority as the highest court in the state, backed bad energy policy.

All of that observed, there is no doubt that existing PU § 7-207 preempts by implication local zoning authority approval for the siting and location of solar generating stations which require a certification from the state PSC. And the 38 page decision in Board of County Commissioners of Washington County v. Perennial Solar, LLC, the first opinion authored by Judge Brynja M. Booth since she joined the court in April, is an excellent treatise not only on preemption, but also renewable energy siting.

Here comes the sun across Maryland.

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