Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

Clean Ohio Council has expanded the types of eligible projects that can receive funding under the Clean Ohio Revitilization Fund (CORF).  Parks, urban waterfronts, solar and wind projects are now eligible for funding so long as these projects take place on a brownfield. 

This change will create greater competition begining in Round 10 of the program.  

Three Grant Tracks Under CORF

For round 10 of the CORF, applicants can now seek funding under three different development scenarios:

1. Known End Use Track- $3 million for projects with a use of the property identified as part of the application.
2. Redevelopment Read Track- $2 million for projects on land believed to be primed for redevelopment, but with no specific end use identified. 
3. Sustainable Reinvestment Pilot Track- $1.5 million for sustainable Infrastructure, which includes certain park projects and green infrastructure, urban waterfronts, and cleanfields and brightfields (Wind and Solar projects).

The CORF program has funded very good projects which have always been classic brownfield redevelopment projects, such as the following:

• Construction of new commercial or industrial facilities on a brownfield property
• Expansion of existing industrial and manufacturing facilities onto contaminated land
• Refurbishment and/or renovation of existing structures for reuse

The classic redevelopment projects with known end users have become less frequent in recent rounds.   In order to increase the number of applicants, the Clean Ohio Council decided to create the Known End User Track.  This allowed clean up of brownfields in key locations in hopes of attracting development on these parcels.

Perhaps because the State fears future reductions in applications submitted for CORF, the Clean Ohio has decided to expand eligible projects far beyond the classic brownfield redevelopment project.

Sustainable Reinvestment Pilot Track

In Round 10 of the program, there will be up to $8 million available for these projects.  Here are some of the key aspects of the Sustainable Reinvestment Pilot Track:

• Can only get a maximum of $1.5 million in funding
• Must be on a brownfield
• Can spend the grant funds on demolition, clean up and infrastructure activities
• Infrastructure expenditures are capped at $400,000
• For this track, the definition of "infrastructure" is expanded to include:
  • pathways
  • structures used to manage stormwater
  • wetlands
  • stream restoration
• 25% Match is required, and the following can be used as match:
  • park amenities
  • plants, trees, landscaping, urban gardens
  • solar panels and components
  • wind turbine components
  • green roofs
• Projects must meet the following for infrastructure or new construction:
  • Follow sustainable best practices
  • LEED
  • Green Infrastructure Guidelines
  • Local ordinance mandating all future construction on the project property meet LEED guidelines for a period of 10 years

Parks and Waterfront Restoration Projects Now Eligible

Under the new track, parks and urban waterfronts redevelopments can also be projects.  This subcategory is called the Signature Parks, Sustainable Infrastructure and Urban Waterfronts category.  All park and waterfront projects must meet the following:

•  80% of area must be greenspace or public space
• max 20% of area can be used for parking
• deed restrictions good for 10 years
• commitment for maintenance and stewardship
• Signature Parks or Sustainable Infrastructure must be a minimum of 1.5 acres
• Urban Waterfront projects must be a minimum of 1.0 acre

Cleanfields/Brightfields (Wind and Solar)

Nothing is provided in the Round 10 CORF policies regarding restrictions on this subcategory of the Sustainable Reinvestment Track.  However, if you review the scoring methodology the Council will use to evaluate these projects, the following a key considerations:

• project site has grid access with a participating electric company; or
• project will result in net-metering for an existing entity
• the electric generation site will be a minimum of 25 acres

Impact of New Track

Clean Ohio has not increased funding by $8 million.  Rather, the Council decided to make up to $8 million of the total $23 million available in CORF Round 10 available for the new Sustainable Reinvestment projects. For future applicants, this change likely means increased competition. 

While grant funding for wind, solar, parks and urban stream restoration is understandable, the Clean Ohio program is moving away from classic brownfield redevelopment projects.  The core of the program has always been to remove the barriers to commercial and/or industrial reuse of contaminated land.  In essence, with more competition less money will be available for these classic clean up projects.

Deadlines

Applications are due to your local library by January 14, 2011 as a part of the scheduled Round 10 of the Clean Ohio Revitalization Fund. Approved applications will be announced in May 2011. 
 

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A coalition of business groups, including the National Association of Manufacturers, have filed a request to block the effectiveness of EPA's climate change rulemaking.  The business groups have filed a motion seeking a stay of the effectiveness of EPA regulations that will soon require stationary sources (factories, utilities and boilers) to reduce greenhouse gas (GHGs) emissions from those sources beginning in 2011.

There are two interesting strategic decisions that emerge from the brief filed seeking a stay of EPA's GHG rules:

• Business groups are not trying to block the mandatory GHG rules pertaining to motor vehicles; and
• The stay would not be of EPA's Tailoring Rule, but would seek to block any legal ability to begin regulating GHGs from stationary sources

The Clean Air Act requires all sources emitting above 100/250 tons per year of a regulated pollutant to go through federal permitting- EPA's New Source Review Program.  EPA adopted the Tailoring Rule to raise those thresholds that EPA asserts would otherwise apply once it finalized its regulation of GHGs from vehicles.

It is the premise that the vehicle rules trigger regulation of stationary sources that the business groups are challenging in this motion.  This from the brief filed seeking a stay:

Movants offer a distinct request for a partial stay that would enable EPA to
realize its goal of imposing GHG emission limits on cars while preserving the status quo for stationary sources. Specifically, Movants request the Court stay the effects of the Tailpipe Rule, Tailoring Rule, and PSD Interpretive Rule on stationary sources, such that GHG emissions are not subject to PSD and Title V pending this appeal.  Movants do not request a stay of the Tailpipe Rule as applied to cars.

Business groups challenge EPA assertion on two separate grounds:

Emissions of a pollutant triggers PSD permitting if, and only if, the pollutant is subject to a NAAQS and the source is located in an attainment area for that pollutant. GHGs are not such a pollutant, so GHG emissions alone cannot trigger PSD permitting.

The very impetus for the Tailoring Rule’s revision of statutory thresholds was EPA’s recognition that requiring sources to obtain PSD permits solely based on GHG emissions is “absurd” and inconsistent with Congress’s vision for the PSD program. Congress did not enact the CAA to bring any part of the American economy to a dead stop, and EPA’s interpretation of the CAA threatening that result is unreasonable, arbitrary, and capricious. In addition, EPA’s view that GHGs are subject to regulation under the PSD program—which is plainly focused on local air quality—is unreasonable. Congress never intended the PSD program to regulate pollutants like GHGs.

Business groups had no alternative but to seek a stay given the ramifications of EPA embarking on this regulatory path.  Typically, you would ask to stay the effectiveness of a specific rule.    However, delaying the legal effectiveness of the Tailoring Rule would arguably subject all businesses to the ridiculously low permitting thresholds 100/250 tons in the Clean Air Act. 

As result, business group are challenge the very premise the EPA had to enact the Tailoring Rule because otherwise the 100/250 ton thresholds would take effect after enactment of the vehicle tailpipe rule.

The only concern is if the Court agrees, in part, with the business group's arguments.  First, the Court may say a stay can only be granted of a specific rule.  Second, the Court may agree EPA went too far but provide a different result.

Let's remember no one was asking the Court to throw out the Clean Air Interstate Rule (CAIR).  What happens if the Court agrees EPA has no authority to change the statutory thresholds in the Clean Air Act (100/250 tons per year), but agrees the vehicle rule automatically triggers PSD regulation of GHGs?

While litigation is necessary with so much at stake, it is also very unpredictable.  Let's hope the Court gets this one right by looking at the real world implications of its decision.

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By all accounts, Republicans are set to enjoy major gains in both the House and Senate following midterm elections.  Speculation is that the Republicans could likely regain control of the House and could even get close in the Senate.

What implications could this change in the political landscape have for climate change regulation?

We have already seen the Senate scrap all efforts at a cap and trade bill this summer.  Based upon Senator Reid's comments that a "piecemeal" approach is on tap, its more than likely cap and trade is off the table for the foreseeable future.

With cap and trade's dim future, all eyes have been shifting toward U.S. EPA promulgation of climate change regulations.  EPA has already finalized greenhouse gas standards for vehicles and will require consideration of greenhouse gases from major stationary sources beginning in 2011 (Tailoring Rule). 

Congressional Efforts to Stop EPA

With renewed focus on EPA's efforts, Republicans made lead the charge toward blocking EPA's actions through budget maneuvers or by directly blocking the effectiveness of the EPA regulations. (See Reuter's article)

• Budget Bill Prohibition-  Republicans could include in an appropriations bill a ban on the use of EPA funds to administer climate change regulations. 
• Block EPA Authority or Delay it- Earlier this year, the Senate debated legislation that would directly block EPA from implementing its rules by undermining its Endangerment finding.  Another alternative was floated by Senator Rockefeller- delay EPA's implementation for two years which would take us to the next Presidential Election. There were 47 out of 100 votes in the Senate supporting a delay in implementation of EPA's climate change regulations.  Its hard to imagine this issue will not be revisited after the midterm elections.

Effectiveness of an Appropriations Blockage 

The utility of a budgetary blockage of EPA's authority to implement the climate change regulations should be seriously questioned.  As discussed below, a budget provision prohibiting expenditures doesn't remove the requirements from the books.  Industry will still have to comply with the Tailoring Rule even if EPA can't use funds to enforce it.

The strategic limitations on use of the appropriations tool was pointed out in a Congressional Research Service in an extensive report:

The regulatory restrictions in appropriations bills that have been enacted during the last 10 years illustrate that Congress can have a substantial effect on agency rulemaking and regulatory activity... These appropriations provisions can prevent an agency from developing a proposed rule, from making a proposed rule final, or from implementing or enforcing a final rule. However...these appropriations provisions cannot nullify an existing regulation (i.e., remove it from the Code of Federal Regulations) or permanently prevent the agency from issuing the same or similar regulations. Therefore, any final rule that has taken effect and been codified in the Code of Federal Regulations will continue to be binding law — even if language in the relevant regulatory agency’s appropriations act prohibits the use of funds to enforce the rule. Regulated entities are still required to adhere to applicable requirements (e.g., installation of pollution control devices, submission of relevant paperwork), even if violations are unlikely to be detected and enforcement actions cannot be taken by federal agencies.
 

Such an appropriations maneuver could mean businesses must prepare PSD permit applications that address greenhouse gases only to have those permits sit at EPA because it is legally prohibited from paying staff to review them.

Hopefully the real world implications of Congressional efforts to block EPA will be considered.  There is no doubt a strong effort will be made after the midterms to block EPA climate change regulations.  Without passage of legislation that directly addresses the issue, maybe...just maybe litigation is a better alternative than tricky legislative tactics. 

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On June 4, 2010, U.S. EPA released its much anticipated proposed standards for industrial boilers to reduce hazardous air pollutants ("HAPs").   Since their release, EPA has faced an outcry that the proposed standards are "fundamentally flawed" or "unachievable."

So what is the controversy?

EPA's boiler standards are supposed to reflect the application of the maximum achievable control technology (“MACT”). 

What is MACT?

MACT requires the maximum reduction of hazardous emissions, taking cost and feasibility into account.  The MACT must not be less than the average emission level achieved by controls on the best performing 12 percent of existing sources, by category of industrial and utility sources.

I highlighted a couple key terms in U.S. EPA's definition. 

Cost and Feasibility-  Unlike other EPA standards, cost and feasibility in achieving the standards are relevant.  Many argue cost of compliance with proposed standards will be dramatically too high.

Best Performing 12%-  As discussed below, many assert EPA's methodology for developing the top 12% performing sources is fundamentally flawed.  They assert EPA simply "cherry picked" certain sources and unfairly based its limits on too small of a data pool.

Controversy Builds

On August 2nd, 100 members of Congress submitted a letter to Administrator Jackson asking EPA reconsider its proposed boiler MACT standards:

EPA should use a method to set emission standards that is based on what real world best performing units can achieve.  EPA should not ignore biases in its emissions database, the practical capabilities of controls or the variability in operations, fuels and testing performance across many regulated sectors.

Impact on Biomass Industry

One group strongly opposing EPA is proposal is the biomass industry which believes the proposal unfairly lumps biomass in with all other fuels.  The biomass industry has indicated the standards, if finalized, could prevent the development of additional biomass sources.  The National Alliance of Forest Owners (NAFO) provides the following description of EPA's flawed MACT methodology:

EPA explains that “[f]or each pollutant, we calculated the MACT floor for a subcategory of sources by ranking all the available emissions data from units within the subcategory from lowest emissions to highest emissions, and then taking the numerical average of the test results from the best performing (lowest emitting) 12 percent of sources.” 75 Fed. Reg. at 32019.This “pollutant-by-pollutant ” approach to determining MACT is not appropriate because it results in standards that do not reflect the performance of the best performing boilers for any fuel source. 

The CAA requires that EPA set standards based on the performance of actual
“sources.” Yet EPA’s analysis does not reflect the performance of any actual sources. Instead, it is a compilation of the best data, for each pollutant, regardless of which source the data came from. As a result, the proposed rule’s limits are unnecessarily stringent. They do not reflect the variability that occurs in real-world.

There is no denying EPA failed to look at fuel types when establishing standards.  Rather, EPA went pollutant by pollutant and looked for the smallest emissions without considering the fuel being used in the boiler.

Genreal Industry Concerns

The biomass industry is just one of many industry sectors strongly opposing the rules.  The American Chemistry Council described the rules as "fundamentally flawed" in their comments:

“EPA’s faulty methodology begins with pollutant-by-pollutant analyses that select a different set of ‘best performing sources’ for each pollutant. In other words, EPA ‘cherry picks’ the best data in setting each standard, without regard for sources. The result is a set of standards achieved by a hypothetical set of ‘best performing’ sources able to maximize emission reductions for each hazardous air pollutant (HAP), rather than standards representative of actual performance of real sources. EPA’s approach produces unachievable standards."

How is EPA cherry picking its data?  Industry says EPA uses a limited data set of emissions from sources in establishing the standards. EPA has failed to test enough sources to truly reflect each category of sources.  Without a full or adequate data set, EPA is skewing the top 12% of best performing sources. It really becomes the top 12% of sources EPA tested, which can be a small percentage of boilers in use.

Furthermore, Industry argues EPA failed to account for variations critical when establishing a MACT standard.  Boilers can vary in design, pollution controls and fuels utilized. Industry argues these variations should have been considered in evaluating the top 12% performing sources.

[For more insight into industry's general concerns here is a link to Ohio Chamber Comments]

Regulators Echo Industry Concerns

Industry is not alone in strongly criticizing EPA proposal.  Ohio EPA filed its own comments on the U.S. EPA proposed boiler MACT standards supporting the notion EPA's methodology is flawed:

Limited Data Concerns:

[EPA's] analysis seems to only utilize emission performance data from a limited number of sources and in some cases as few as one or two sources.  At a minimum a NESHAP standard needs to be based on the performance of five sources or all sources if fewer than five in a category.

Emission Standard Methodology

The emission limits proposed in the rule seem to be based on the lowest demonstrated emission rates within a source category (based on a limited number of sources) and does not directly evaluate control efficiency of equipment.  Using the emission rate approach may not identify the sources demonstrating the highest control efficiencies, but rather may simply reflect low fuel content of the pollutants.  In this case, resulting emission limits can be more stringent than achievable for sources utilizing certain fuels.

Impact on Fuel Types

EPA's approach may be eliminating certain fuels from use in industrial boilers.  For example, midwest coal with higher sulfur or mercury content.  Or in the case of biomass, wood feed stocks that have already have lower hydrogen chloride (HCL) content, may not be able to remove additional quantities to achieve the low standards EPA is proposing.

Conclusion

EPA's rule impacts such a huge portion of industry and commercial operations.  It should be carefully crafting a set of standards that are achieveable as well as flexible. Two final points:

•  Not all pollution controls are appropriate for every sized boiler;
• Restricting fuel types by establishing standards that discount pollutant content of those fuels does not reflect "real world" practices that NESHAP standards are intended to reflect.

(Photo:  U.S. EPA website)

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U.S. EPA has released its fiscal year 2011 request for proposals (RFP) for brownfield assessment and clean up grants.   There is a relatively short window of opportunity to file your application- the deadline is October 15, 2010. 

[Click here for access to U.S. EPA's RFP for the brownfield assessment, clean up and revolving loan]

There is a total of $92.9 million available.   While the RFP allows for greater funding under certain circumstances, the basic limit is $200,000 per site for assessment or clean up.  EPA is required to expend 25% of the total amount available for sites contaminated with petroleum. 

Ohio is lucky to have one of the best state brownfield grant programs- Clean Ohio.  Often Clean Ohio is a better option than pursuing the U.S. EPA grant funding because U.S. EPA's program is a national competition.  However, there are certain circumstances that make the U.S. EPA brownfield grant program potentially a better option than Clean Ohio.

COAF Clean Up Funding Exhausted for this Fiscal Year

The Ohio Dept. of Development announced that it is no longer providing funding under the Clean Ohio Assistance Fund (COAF) for clean up of brownfields in fiscal year 2011.  However, assessment funding remains.

COAF can provide provide up to $750,000 in funding for clean up of brownfields.  Projects are evaluated and grants awarded on a rolling basis. 

Clean Ohio Revitalization Fund (CORF) is still available to fund clean up.  It provides up to $3 million in funding per site.  However, a 25% match is required and there are only two CORF rounds per year which typically are competitive.  Therefore, for smaller clean up projects looking for funding in the next year, U.S. EPA's program may be the better option.

Abandoned or Vacant Gas Stations

Under the Clean Ohio policies, removal and clean up of BUSTR (Bureau of Underground Storage Tank Regulation) regulated storage tanks and remediation of leaks from such tanks are not eligible costs under either the Clean Ohio Assistance Fund (COAF) or the Clean Ohio Revitalization Fund (CORF).

For local governments that are trying to deal with abandoned or vacant gas stations in their communities, the U.S. EPA brownfield grant may be their best option.  Communities can seek money for sampling of the site to determine if contamination exists. 

The fear of the unknown (whether contamination exists) acts as a strong deterrent to purchase and redevelopment by private parties.  Once sampling data has been generated, it removes one more impediment to purchase and redevelopment of the site.

Of course if sampling reveals contamination, this can act as a major obstacle to redevelopment.  However, communities can secure clean up funding for these sites under the U.S. EPA program.

Community Assessment Grants

U.S. EPA's program may also be better for communities that are interested in creating a brownfield inventory of various sites within their jurisdiction.  Also, U.S. EPA's program is great for local communities that want to create and fund their own local brownfield assessment programs. 

For example, in Northeast Ohio, the Northcoast Brownfield Coalition was created using U.S. EPA funding.  The Coalition is made up of  the Cuyahoga County Board of Commissioners, the City of Cleveland, the Cleveland-Cuyahoga Port Authority and the Northeast Ohio First Suburbs Consortium.  The Coalition makes provides local grant funding for brownfield projects in Northeast Ohio in amounts up to $30,000.

Below are the applicable limits for assessment grants under the U.S. EPA program:

(Photo:  everystockphoto peasap)

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