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

The Obama Administration proposal for funding the Great Lakes, known as the Great Lakes Restoration Initiative (GLRI), has cleared a key House-Senate conference committee.  The legislation would provide $475 million for a comprehensive Great Lakes restoration and protection initiative.  The funding would be targeted toward the most critical environmental concerns facing the Great Lakes, including invasive species, toxic sediments, non point source pollutants and wildlife habitat loss.

While its wonderful news that increased funding is being directed toward the Great Lakes, there are key components of the legislation that could leave a large portion of the federal money unspent.  Those key components relates to clean up of contaminated sediment under the Legacy Act (the primary vehicle for providing federal funding for removal of sediments).

A recent U.S. EPA Inspector General Report was highly critical of the pace of clean up under the Legacy Act. 

Contaminated sediment is a massive problem in the Great Lakes. There is an estimated 75 million cubic yards of contaminated sediment. To date, under the Legacy Act, five sediment projects have been completed removing 800,000 cubic yards of contamination.  This represents about 1% of the problem.  As stated in the report, at the current pace, it would take more than 77 years to complete all the contaminated sediment projects in the Great Lakes.  

Now this is where I part ways with the Inspector General Report.  The IG placed the blame for the slow pace of contaminated sediment clean up on the lack of management within the Great Lakes National Program Office (GLNPO).  The real story is the lack of resources at the state and local level.

Cost of removal of contaminated sediment is estimated at $3 billion in federal, state, and local funds. The Legacy Act includes the requirement for a 35% local share before federal funds can be used for clean up. 

Sediment projects carry large price tags. Even a small sediment project can cost millions of dollars. While at least five project have been able to cobble together required 35% match, in some cases it took 5-10 years to generate the funds.  In many other instances there are simply not the resources to develop the required 35% match. 

The inability to generate this level of funding can be attributed to:

• Limited amount of companies with money to pursue who contributed to the contaminated sediment problem (known as PRPs); 
• Even if PRPs are identified, complex legal actions or settlements must be pursued which can slow the process for years;
• Furthermore, the current strain on local and state governments due to economic considerations, especially in the Midwest, makes state/local funding unlikely

As long as the millions in funding for sediment clean up in GLRI includes the 35% local share requirement, major portions of the federal money could remain sitting unused.  Statutory changes to the Legacy Act are needed to provide authority to waive or reduce the 35% local share if it can be demonstrated, for instance that:

• There are no or few PRPs;
• The project should be fast tracked based on human health or environmental risks:
• Local or State governments are constrained on their ability to contribute more of the local share

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In March of this year Canada and the United States submitted a bi-national proposal to reduce emissions from ships at ports.  The proposal marked the culmination of years of study of the costs and benefits of requiring emission reductions from ocean going vessels.  However, the proposal never mentions the Great Lakes and includes no analysis of the costs or benefits of extending the requirements to the region.  

Now, in a separate proposed rule making issued on August 28th,  U.S. EPA has proposed to expand the costly shipping regulations to include the Great Lakes region.  The proposed expansion would in essence amend the bi-national proposal even though no formal application has been submitted to the governing international body.  In addition, EPA has not provided a study of the costs/benefits of extending the regulations to the Great Lakes.

Background on North American Emission Control Area

In March 2006, President Bush and Canadian Prime Minister Harper agreed to prepare a bi-national application to the International Maritime Organization (IMO) to designate nearly all of North America's coastlines as an Emission Control Area (ECA).  Ships that enter the ECA are required to reduce emissions through a combination of cleaner burning fuel and air pollution controls. (see, U.S. EPA's frequently asked questions on ECAs)

On March 30, 2009, U.S. EPA submitted the final ECA application to the IMO.  The U.S.-Canadian ECA application included years of work and study of the ship traffic, anticipated air pollution reductions as well as the projected costs of the proposed controls.  A thorough explanation of the studies can be found in the application.  However, the ECA application does not include any studies or evaluation of the shipping traffic or costs in the Great Lakes region.  In fact, no where in the document is the term Great Lakes even found.

[Below are the charts showing the proposed emission reductions as well as the proposed ECA]

 Figure 1- Proposed ECA included in the March 2009 application to the IMO.  Green line denotes area covered by the ECA.

Figure 2- Chart shows the phase in of sulfur limitations on fuel as well as air pollution controls requirements.  Lower sulfur fuel will reduce fine particle pollution in port cities.

The proposal requirement to move from fuel with a 15,000 parts per million (ppm) sulfur content to a clean fuel with only a 1,000 ppm sulfur content amounts to a 98% reduction.  The overall costs of the regulations to the shipping industry is $3.2 billion, with the largest costs being fuel switching at $1.9 billion.

The proposal assumes that ships will reduce the cost of compliance by carrying two fuel tanks.  One tank would contain the much dirtier high-sulfur fuel which would utilized at sea outside the ECA.  Once the ship enters the ECA, it would switch to the low-sulfur fuel.

EPA Proposed Regulation to Extend ECA to Internal Waters Including the Great Lakes

On August 28, 2009 U.S. EPA issued a proposed rule titled "Control of Emissions From New Marine Compression-Ignition Engines at or Above 30 Liters Per Cylinder."   The preamble to the regulations includes the following statement regarding the proposed ECA:

However, our recent proposal for ECA designation that was submitted to IMO, although intended to protect air quality in U.S. ports and internal areas, does not explicitly state that it applies to internal waters. Therefore, we are proposing regulatory text under the authority of APPS, in order to avoid confusion on whether vessels must meet ECA requirements in internal waters. The text clarifies that the ECA requirements generally apply to internal waters, such as the Mississippi River and the Great Lakes, that can be accessed by ocean-going vessels. Vessel emissions in these waters affect U.S. air quality to an equal, if not greater extent that emissions taking place in coastal waters. Specifically, the proposed rule would require compliance with the fuel sulfur requirements and the NOX emission standards of Regulations 13, 14, and 18 in internal waters. (emphasis added)

While there is no doubt cleaner ships in the Great Lakes would improve air quality.  The issue is that U.S. EPA appears to be amending the bi-national application to the IMO without any supporting information.  The IMO ECA application does not include costs for the Great Lakes shipping fleet which is of a different make up than those traveling to ocean ports on the coasts.  

For example, the IMO ECA application estimates compliance costs will be reduced through fuel switching between high sulfur and low sulfur fuel.  However, that will not be an option for ships traveling in the Great Lakes which will always be within the ECA.  Also, the Great Lakes fleet tend to be smaller in size than some of the large vessels that enter the coastal ports.  No analysis has been performed on the costs and benefits given the different make up of the Great Lakes fleet. 

Smaller marine engines are already required to use lower sulfur fuel under the Nonroad Diesel Rule (finalized June 29, 2004).  It is possible that the proposal to extend the ECA to the Great Lakes would have negligible impacts because ships tend to be smaller.  However, without any analysis of the Great Lakes fleet is it impossible to make this determination.

U.S. EPA proposed rule was issued on August 28, 2009 and the Agency has allowed public comments only until September 28, 2009.

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Today, EPA Administrator-designate Lisa P. Jackson distributed a memo to all employees of EPA.  The memo outlines her and President Obama's philosophy of environmental protection.  The memo is an interesting demarcation of the major changes that are coming in the realm of environmental protection. 

Some priorities Ms. Jackson is very upfront about, such as addressing Climate Change (which notably was identified as the number 1 priority in her memo).  Other policy perspectives are a little less straightforward, but inferences can be made.  Here are my take aways from the memo.

1. Climate Change is a major priority-  The President made reference to it in his inaugural speech.  It is no mistake that its the first bullet on EPA-designate Jackson's list of priorities.  Notably, she includes the following statement:  "As Congress does its work, we will move ahead to comply with the Supreme Court's decision recognizing Pea's obligation to address climate change under the Clean Air Act"  STAY TUNED ON THIS ONE>>>
2. Science will be at the forefront-  Many environmental groups felt that the Bush Administration put science secondary to their end regulatory goals.  The memo is a clear statement that this will change.  What could be the impact?  For one, look for even stronger federal air quality standards (NAAQS) for ozone and fine particles. 
3. Resurgence in Environmental Justice- A very thorny issue and one difficult to address through regulation.  However, the memo mentions making  "people disproportionately impacted by pollution" a priority.  Perhaps they will try to tackle this more aggressively.
4. CAIR-  I may be out on a limb on this one.  In the "improving air quality" priority, Jackson states "we will plug the gaps in our regulatory system as science and the law demand."  I think this is a vague reference to a much stronger CAIR program.
5. Brownfield Redevelopment-  U.S. EPA may put even more emphasis on brownfield programs as a means to accelerate clean up of contaminated sites.  Jackson was criticized in New Jersey for the slow clean ups.  I think the statement -"turning these blighted properties into productive parcels and reducing threats to human health and the environment means jobs and investment in our land" -can't be anything other than a reference to a strong brownfield program.
6. Money for the Great Lakes?-  In the memo, Jackson says the "Agency will make robust use of our authority to restore threatened treasures such as the Great Lakes and the Chesapeake Bay."  I am intrigued at the term "robust use of our authority" in connection with the Great Lakes.  Is this a reference to enforcement rather than the Great Lakes Restoration Plan?
7. Don't underestimate the amount of change coming-  President Obama's buzz word was change.  I don't think there is any area that is about to see more change than environmental regulation in the next four years.  Fasten your seat belts...

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Senators Stabenow and Feingold are trying to build support for Great Lakes funding in the economic stimulus package being developed.  The following letter is being circulated as a way of showing support for inclusion of funding. 

The letter highlights the traditional areas identified for Great Lakes Restoration- contaminated sediment, combined sewer overflows and eco restoration. 

 

Dear Majority Leader Reid and Minority Leader McConnell:

As you move forward with an economic recovery package for our nation, we strongly urge that you include funding that will protect and promote jobs by restoring and protecting one of our most important natural resources – the Great Lakes. In particular, we urge you to provide funding for the Great Lakes Legacy Act, the Clean Water State Revolving Fund, and the Great Lakes Fish and Wildlife Restoration Act. These investments will put people to work cleaning up toxic sediments in our region’s rivers and harbors, ending decades of sewer overflows into 95 percent of our nation’s fresh surface water, and restoring hundreds of acres of vital wetlands and habitat.

Since 2002, cleanups funded under the Great Lakes Legacy Act have removed nearly a million cubic yards of toxic sediments from rivers and harbors in the Great Lakes. These cleanups—a priority under the Great Lakes Regional Collaboration plan—are creating thousands of jobs and opportunities for additional economic development in Detroit, Cleveland, Milwaukee, Buffalo, Gary, Duluth and other Midwest urban areas. By investing $262.0 million in 2009 and an additional $240.0 million in 2010 for toxic sediment cleanup projects, which were identified by our states, we can put thousands of people to work in struggling urban areas throughout our region. According to our states, these projects are ready to go and spending these funds can immediately begin to create jobs and economic activity in our region, with lasting impacts.

Another job-generating opportunity is investing in the Clean Water State Revolving Fund. By investing in clean water infrastructure, we can put people to work tackling an important challenge of our times: aging water infrastructure and associated environmental, public health, and economic costs. It is estimated that for each $1 billion invested in clean water infrastructure, 47,000 jobs are generated. We recommend that the recovery package invest $10 billion in the Clean Water State Revolving Fund, resulting in 470,000 jobs nationally. In the Great Lakes region alone, a $10 billion national investment translates into $3.7 billion for the region and over 170,000 jobs that can establish a modern and environmentally sound water infrastructure system.

The negative economic impacts of aging infrastructure are well documented throughout the region and nation: from sewage-related closures every summer at Great Lakes beaches and water-borne illnesses and deaths to road damage, such as sinkholes caused by breaking water infrastructure. Old and ailing waste water treatment facilities are the cause of more than 23 billion gallons of raw sewage entering the Great Lakes in 2006. Stresses on our aging infrastructure are further compounded—until Congress acts—by reduced stream and wetland protections under the Clean Water Act as a result of recent Supreme Court decisions, further taxing water infrastructure that must compensate for lost natural filtration and water storage functions, for example. Also, climate change is expected to bring heavier rains that will inundate overtaxed waste water systems and lead to increased untreated sewage overflows in the Great Lakes. Addressing all of these threats will ensure the economic vitality of the Great Lakes and the nation’s resources, which we all depend on for jobs, drinking water, and quality of life.

We also support investing in ecosystem restoration programs, such as the U.S. Fish and Wildlife Service’s Great Lakes Fish and Wildlife Restoration Act program, to fund wetlands and habitat projects. Restoring habitat, aquatic ecosystems, and wetlands not only can reduce the overall cost of water infrastructure projects; they also contribute to our state’s hunting, fishing, and wildlife watching economies. These projects will also immediately generate jobs on par with other infrastructure pursuits--a $130 million dollar investment in ready-to-go restoration projects in the Great Lakes region will generate nearly 3,000 jobs.

We look forward to supporting legislation that builds economic opportunity and puts people back to work while enhancing environmental quality. Investing in clean water infrastructure, toxic sediment remediation, and habitat restoration accomplishes all three goals. We urge you to include these investments in the recovery package that we will consider next year.

Sincerely,

cc: Senator Boxer, Chairman, Environment and Public Works
Senator Inhofe, Ranking Member, Environment and Public Works

(Photo: flickr vice48sr5005/everystockphoto.com)

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With Michigan and Pennsylvania's passage of the Compact, all of the Great Lake States have now endorsed it.  The next step is to go to Congress for ratification.   While the press has almost exclusively concentrated on the diversion aspects of the Great Lakes Compact, there are other provisions that could have important ramifications for businesses.  Ohio has yet to pass enabling legislation that will grant authority to the Ohio Department of Natural Resource to implement other important aspects of the Compact, most notably regulation of water withdraws. 

The driving force behind the Compact was to ban diversions to other States and Countries.  But the Compact also requires each of the eight states to establish a regulatory program for new or increased withdraws from the Great Lakes basin. Ohio's enabling legislation will decide critical issues such as- how much water must be withdrawn before a permit will be required?  The Compact sets a default number of 100,000 gallons per day (gpd).  Other states have established higher thresholds, such as 1,000,000 gpd.

Another critical question - what type of review is required if a business triggers the need for a withdraw permit?  The Compact contains very broad language that requires a review of impacts to the Great Lake basin from which the withdraw takes place.  However, the Compact grants the states a tremendous amount of discretion to establish the level of review associated with new withdraws.  For example, Ohio could prohibit issuance of a withdraw permit if the proposed project would result in decreased flow in a tributary of Lake Erie.  Ohio could also require a detailed review of the impacts to the ecosystem if a withdraw is allowed.

While focus has rightfully been on protecting this tremendous freshwater resource from being diverted elsewhere, there are important policy questions that still remain unanswered.  How Ohio and the other Great Lake States regulate withdraws within their states will arguably have a more direct and immediate impact on its constituents. 

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