Posts for January 6, 2010

UMA COMMENTS ON PROPOSED EPA CONSENT DECREE

January 6, 2010

The UMA Air Quality Subcommittee has reviewed the proposed consent decree from EPA in the matter of WildEarth Guardians v. Jackson, a civil action. They found several very serious issues for Utah manufacturers in the civil action and EPA proposal to consent. The following are the comments prepared by the UMA Air Quality Committee and submitted by UMA.

The Utah Manufacturers Association (“UMA”) appreciates the opportunity to submit comments on the proposed Consent Decree in WildEarth Guardians v. Jackson, Civil Action No. 09-cv-02109-MSK-KLM (D.Colo). The UMA consists of Utah companies engaged in manufacturing in the State of Utah and includes regulated sources of air emissions. The resolution of the issues raised in the litigation and in the proposed Consent Decree directly affect the UMA members.

We have a number of significant concerns with regard to the proposed Consent Decree and its implementation, which are as follows:

1. EP does not have a mandatory duty under section 110(k)(5) of the Clean Air Act to require Utah to revise it State Implementation Plan (“SIP”). One of the allegations made by WildEarth Guardians in the litigation as articulated in the proposed Consent Decree is “that EPA has failed to undertake a mandatory duty under section 110(k)(5) of the CAA, 42 U.S.C. § 7410(k)(5), to require Utah to revise the Utah breakdown rule.” EPA has no such mandatory duty under section 110(k)95) or any other provision of the Clean Air Act.

Section 110(k)(5) provides in relevant part:

• Whenever the Administrator finds that the applicable implementation plan for any area is substantially inadequate to attain or maintain the relevant national ambient air quality standard . . . or to otherwise comply with any requirement of this chapter, the Administrator shall require the State to revise the plan as necessary to correct such inadequacies. . . .

Section 110(k)(5) does not require EPA to make an inadequacy finding; rather, it provides that if EPA makes such a finding, it then shall require to State to revise the SIP. See, e.g., Natural Resources Defense Council, Inc. v. New York State Dept. of Envt’l Conservation, 700 F. Supp. 173, 179 (S.D.N.Y. 1988). Given that no such finding has been made, there is no merit to the allegation of failure to perform a mandatory duty. It follows, then, that EPA would prevail if the issue were litigated. Accordingly, UMA recommends that EPA not finalize the proposed Consent Decree and that the matter go to trial on the merits if the plaintiffs insist on pursuing the claim.

2. The proposed Consent Decree was negotiated without any significant input or involvement of the Utah Division of Air Quality (“DAQ”). The proposed Consent Decree is intended to resolve a citizen’s suit brought in federal court in Colorado to challenge the provisions of Utah’s approved SIP concerning excess emissions resulting from the breakdown of pollution control equipment. It is our understanding that, notwithstanding the federal Clean Air Act’s emphasis on a partnership between EPA and the states in administering and enforcing the Act, the State of Utah was neither brought in as a party to the litigation nor was the State included in the negotiations leading to the proposed Consent Decree.

Section 101 of the Clean Air Act, 42 U.S.C. § 7401, sets forth Congressional findings and the purpose of the statute. Among other things, Section 101(a) states:

• The Congress finds –
  . . . .
  (3) that air pollution prevention . . . and air pollution control at its source is the primary responsibility of States and local governments: and
  
  (4) that Federal financial assistance and leadership is essential for the development of cooperative Federal, State, regional, and local programs to prevent and control air pollution.
  
  42 U.S.C. § 7401(a)(3) and (4).

The UMA believes that the exclusion of the DAQ from the negotiations is fundamentally unfair and violates the spirit, if not the letter, of the Clean Air Act’s stated intent to involve the states in preventing and controlling air pollution as articulated in section 101(a). Therefore, we urge EPA not to approve the proposed Consent Decree unless and until the DAQ has had ample opportunity to join in the negotiations.

3. There is nothing in the proposed Consent Decree to suggest that EPA will include the State of Utah in its deliberations with regard to whether the excess emissions rule in the Utah SIP is “substantially inadequate” under section 110(k)(5) of the Clean Air Act, 42 U.S.C. § 7410(k)(5). EPA’s exclusion of the DAQ from the negotiations on the Consent Decree gives little reason to hope that the DAQ will be consulted in the determination of whether the SIP provisions at issue are substantially inadequate under section 110(k)5).

There are a number of issues that need to be considered in a section 110(k)(5) determination. For example, one of the principal issues is whether the SIP provisions at issue have interfered or will interfere with the attainment and maintenance of the National Ambient Air Quality Standards. See Michigan Dept. of Environmental Quality v. Browner, 230 F.3d 181, 185 (6th Cir. 2000). The DAQ should be allowed to provide evidence on this and other issues before EPA makes a determination.

4. All affected stakeholders should be given the opportunity to provide input into any determination by EPA under section 110(k)(5). The ultimate configuration of rules governing how excess emissions from unavoidable breakdowns are to be treated will have direct and immediate implications for the regulated community in the State of Utah. The UMA strongly urges EPA to seek stakeholder input early in any section 110(k)(5) process. This could be done by the convening of a formal stakeholders’ group to work with EPA. Such a group would consist of representatives of the regulated community, the public and the State. We believe that the DAQ has an especially important role to play in the process as explained in (2) above.

Thank you for your consideration of these comments.

Very truly yours,

Thomas E. Bingham
President

E-WASTE RECYCLING GONE BAD

January 6, 2010

An effort is underway in the Utah Legislature to make manufacturers responsible for the funding an E-Scrap (E-Waste) recycling program. Proponents cite programs in many other states following this model. UMA has objected to the concept of burdening manufacturers with the cost of a state-wide program and was successful in getting the interim committee on Energy, Natural Resources and Environment to shelve the proposal last year.

UMA has met with proponents to see if there is a way to establish a program to properly dispose of electronic waste to prevent it from entering landfills and causing pollution to the environment. However, the proposal remains largely the same with emphasis on placing the burden for funding on manufacturers. Proponents suggest that since no electronic end-user manufacturers operate in Utah this is not a threat to Utah manufacturers. UMA continues to raise the concern that such programs have a way of evolving into areas never intended by the originators. Utah does have manufacturers who produce component parts for electronic devices that would be covered under the proposed Utah statute.

Representative Becky Edwards has agreed to sponsor the bill in the 2010 General Session and has asked UMA to help craft a definition that would protect Utah’s manufacturers from liability under the proposal for manufacturers to fund the recycling program. In light of what appears to be happening in some other states, UMA wonders if that is really possible. A case in point is the e-waste program now adopted by New York City that has become very punitive and demonstrates how well-intentioned programs can go astray. Below is a description of a law suit joined by the National Association of Manufacturers against New York City’s door to door recycling program. New York State’s law never anticipated such a movement when originally passed.

Validity of New York's oppressive e-waste law. An NAM-led coalition of business groups filed an amicus brief on December 11 in support of litigation seeking a preliminary injunction against New York City's onerous electronic waste law. The law mandates that manufacturers of computers, monitors, TVs, laptops and other equipment set up door-to-door collection programs and collect a prescribed amount of discarded products every year, or pay a stiff fine. It also imposes retroactive liability for products already sold, and requires manufacturers to pick up products made by other manufacturers. Distributors, retailers, consumers and the City of New York are not responsible for sharing in the cost of this waste collection program. The NAM brief warns that the proliferation of state and local statutes such as this law would impose a severe burden on manufacturers in violation of the Commerce Clause. Consumer Electronics Association v. City of New York (S.D.N.Y.).

GLOBAL WARMING LITIGATION

January 6, 2010 – NAM in the Courts

The NAM on December 4 joined a brief arguing that global warming is a political question to be addressed through the policymaking branches of government. We want the U.S. Court of Appeals for the Fifth Circuit to review and reverse a three-judge panel decision in this major public nuisance case. The plaintiffs, Mississippi residents and property owners, allege that the emissions from more than 150 energy and manufacturing companies increased global warming and contributed to the severity of damages resulting from Hurricane Katrina. Our brief argues that the plaintiffs' theory of liability would dramatically expand tort law beyond anything ever recognized because of the tenuous link between the alleged conduct and the alleged harm. Comer v. Murphy Oil U.S.A. (5th Cir.).

OBAMA TO AID IN HEALTHCARE DEBATE

January 6, 2010

President Obama is being quoted in Washington as saying he will take an active part in the debate to reconcile the healthcare bills from the House and Senate. He is saying he will call parties together to work out differences and craft a bill that he can sign. What he has NOT promised is to make it a non-partisan activity as promised during his campaign. It appears the only lawmakers to be invited to the table will be democrats.

SEVERANCE TAX ON COAL: A BAD IDEA

January 6, 2010 – Utah Taxpayers Association

Whenever state revenues fall, the tax and spend lobby cast about for any tax increase they can justify, and imposing a severance tax on coal always seems a convenient target. However, those who advocate for a coal tax seem to always forget that the Legislature has repeatedly studied severance taxes on Utah coal, and has always come to the same conclusion: they are a bad idea.
According to the office of Legislature Research and General Counsel, the Legislature thoroughly studied severance taxes on coal in 1976, 1982 and again in 1990. Those studies all note that Utah coal comes from deep mines, which makes it more expensive to extract than coal from other states.

Ninety-three percent of Utah coal is used to generate electricity. Because the electric generating market is very competitive, an increase in the price of Utah coal, in the form of a severance tax, would simply shift coal purchases from Utah mines to mines in other states. Moreover, most of the power plants that use Utah coal are regulated utilities, where the utility recovers ALL of their production costs through the rates paid by power consumers. In other words, Utah ratepayers would pay all of the severance tax on coal.

Some advocates for severance taxes on coal claim foreign demand for Utah coal will prop up Utah mines, even if Utah imposes a severance tax on coal. The evidence simply does not support that claim. According to an April 6, 2008 article in the Salt Lake Tribune, “Utah’s coal industry has not been able to capitalize much on the surging global demand for its product because no western US ports are shipping coal to Asia. The March 2007 closure of the Port of Los Angeles coal terminal effectively put an end to already shrinking exports to Japan and China.” Instead, Asian demand for coal is largely being fed by Australia and Indonesia.

With all of these competitive pressures, Utah coal mining companies are already feeling pinched. The number of Utah mines has decreased from 13 in 2006 to 8 in 2009. And the amount of coal extracted from Utah mines has similarly decreased from 26,131 tons in 2006 to an estimated 21,700 tons in 2009.

Given this already shrinking base, and the very competitive markets in which Utah coal is traded, Utah policy makers cannot expect a severance tax on coal to be a reliable source of revenue. If anything, the trajectory of Utah’s coal mines suggest that any severance tax on Utah coal would accelerate their demise, and the jobs and other economic benefits those mines offer.