2022 TOP 10 BLOG

The National Flood Insurance Program and the Growing Cost of Natural Disasters in the Era of Climate Change

VJEL Staff Editor: Cameron Briggs Ramos

Faculty Member: John Echeverria

 

Introduction

Accelerating climate change due to the accumulation of greenhouse gases in the atmosphere magnifies both the severity and financial costs of natural disasters, particularly flooding. This trend poses a major challenge for the National Flood Insurance Program, a U.S. government program designed to ensure that citizens gain access to the flood insurance they need and can afford while also reducing the vulnerability of properties and communities to flooding over the long-term. In the year ahead, it will be interesting to watch the Biden administration’s effort to perform this difficult balancing act with the launch of the new “Risk Rating 2.0” program.

The Rising Tide of Disasters

Higher global temperatures are being reflected in warmer ocean waters, which in turn are increasing the frequency and severity of storm events. Climate change also increases precipitation variability in general, with more rainfall occurring in fewer, high-intensity events. Increased rates of precipitation, in particular in the Midwest and Eastern United States, are projected to lead to more frequent and more severe flooding in the years ahead.

In coastal areas, rising sea levels exacerbate the vulnerability of individual homes and communities to severe storms and flooding attributable to climate change. The National Oceanic and Atmospheric Administration (NOAA) that global sea level rose 0.14 inches per year between 2006 and 2015 and that in 2020 global sea level reached 3.6 inches above the level in 1993. Eastern coastline communities face a 400%–1,100% increase in hightide flooding days due to the rise in global sea level. Storm surges building on top of these high tides pose a particular threat to these coastal communities, which comprises 40% of the total population in the contiguous United States.

The United States is already experiencing more severe—and more costly— storm events. In 2020, there was a record-breaking number of 22 natural disasters in the United States, inflicting a total cost of $99 billion. In 2021, 18 separate climate disasters have occurred, with 4 of these events being catastrophic hurricanes and tropical storms. While the number of events this year has not superseded those in 2020, the cost of these separate disasters has already surpassed the costs of the 2020 disasters. So far in 2021, post-disaster costs have amounted to $104.8 billion. Two of the costliest storms in the United States over the last decade were Superstorm Sandy in 2012 and Hurricane Harvey in 2017. The World Meteorological Organization estimated that economic losses inflicted by Superstorm Sandy totaled $54.47 billion and $96.94 billion for Hurricane Harvey.

In accord with these estimates of the overall costs of recent storms, the number and size of insurance claims filed under the National Flood Insurance program have increased dramatically. In recent years, the cost of insurance payouts has greatly exceeded the amount received in insurance premiums. As a result, FEMA has accumulated a debt to the U.S. Treasury of over $20 billion as of 2021, despite Congress having canceled $16 billion in previous FEMA debt in October 2017.

The NFIP Framework

Congress created the National Flood Insurance Program in 1968 based on the perception that private insurers were unable and/or unwilling to offer policy coverage to owners of flood-prone properties. At the same time, conscious even then of the rising costs of disaster relief, Congress sought to use the “carrot” of federally-backed insurance to induce property owners and local governments to improve resilience in the face of flood risk and thereby lower federal disaster relief costs in the long run. The program, including determinations of insurance costs, is managed by the Federal Emergency Management Agency (FEMA), which oversees a network of approximately 50 private insurance companies that directly market insurance policies to the public. FEMA prepares and periodically updates flood maps that delineate coastal and riverine areas subject to the risk of flooding and help homeowners understand the risk of flooding. While participation in the NFIP is voluntary, flood insurance is generally required if a person wishes to secure a mortgage to purchase a structure in a mapped floodplain.

Some critics of the NFIP have argued that FEMA has not set insurance rates at a high enough level to reflect the risk associated with occupying flood-prone land or to allow the federal government to cover the costs of payouts under the flood insurance policies. In 2012, in response to these concerns, and with strong support from many environmentalists and advocates of “free market” solutions to environmental problems, Congress enacted the Biggert-Waters Flood Insurance Reform Act, which directed FEMA to raise insurance rates to actuarially sound levels. This legislation quickly generated a firestorm of political protests from coastal property owners who faced very rapidly escalating insurance premiums. In addition, critics of the legislation contended that the steep increases in premiums placed a particularly severe and unfair burden on low- and moderate-income families.

In response to these concerns, in 2014, Congress adopted the Homeowner Flood Insurance Affordability Act (HFIAA), which rolled back most of the major provisions of the 2012 legislation. The HFIAA extended grandparented rates to certain long-established flood plain uses and directed FEMA to create an affordability framework to ensure that flood insurance remained affordable.

Over the ensuing years, Congress has engaged in an extended debate over how to accomplish a comprehensive reform of the NFIP to make the program financially self-sustaining, resolve the affordability problem, and address the new challenges posed by the increased risk of flooding due to climate change. So far, these efforts have come to naught. Since 2017, Congress has enacted 17 stop-gap reauthorizations of the NFIP, and the next deadline for reauthorization is looming on December 3, 2021.

Looking Forward

In the absence of comprehensive legislative reform, the Biden administration is currently focusing on improving agency implementation of the existing NFIP. In response to the Homeowner Flood Insurance Affordability Act’s mandate to FEMA to create an “affordability framework,” in 2018, FEMA published “An Affordability Framework for the National Flood Insurance Program” with three elements: (1) improving communication to policyholders and potential NFIP participants; (2) developing targeted assistance to policyholders based on their financial status; and (3) examining community work that mitigates flood insurance costs. To carry out the goal of assisting low-and-moderate income families, the “Build Back Better” agenda currently before Congress proposes spending $208 million to assist low-income individuals in purchasing flood insurance and an additional $150 million to help low-income individuals implement flood risk mitigation plans.

The Biden administration is also in the process of rolling out a new NFIP risk-assessment initiative labeled “Risk Rating 2.0.” The Risk Rating 2.0 assessment relies on new technology to assess relative flood risk based on a number of variables such as flood frequency, possible flood types, and property characteristics. Relevant property characteristics include the property’s distance to water, the property’s elevation, and the cost of rebuilding the property. The hope is that this intensive analysis of risk factors will generate premium rates that more accurately and fairly reflect flood risks at different locations. At the same time, the Risk Rating 2.0 initiative recognizes the potential impacts of rate increases on families and will work within the current statutory requirement that premium increases do not surpass 18% per year. In addition, premium discounts will be offered to policyholders in communities participating in the Community Rating System, which encourages communities to adopt effective community floodplain management practices to mitigate flood risks. Premiums discounts will also be offered to policyholders who implement mitigation tools on their properties, such as elevating structures. Rates generated by the Risk Rating 2.0 Initiative applied to new policies starting on October 1, 2021 and will apply to remaining policies being renewed on or after April 1, 2022.

Whether these initiatives will effectively make insurance more widely available, encourage insurance rates that are sounder from an actuarial perspective, and help contain long-term disaster relief costs remains to be seen. As climate-related natural disasters become more frequent, the need for the federal government to support opportunities for individual property owners and communities to build resilience will become ever more critical.

2022 TOP 10 BLOG

State by State: Setting Farmed Animal Welfare Standards

VJEL Staff Editor: Bailey Soderberg

Faculty Member: Pamela Vesilind

 

2022 is set to be a landmark year for the animal welfare movement in the United States. Both Massachusetts and California are attempting new regulations that could affect the quality of life for pigs, calves, and hens across the country. Each state passed citizen-initiated ballot measures that take effect on January 1, 2022, impacting the use of cruel confinement methods like gestation crates for breeding sows, battery cages for laying hens, and veal crates for calves. However, looming legal challenges and legislative delays threaten the adoption of these animal welfare regulations.

Ballot Initiatives 

In 2016, Massachusetts voters approved Question 3. As an indirect initiated state statute, Question 3 required proponents to gather a certain amount of citizen signatures in support before the statute was sent to legislature, and further signatures were required to place the measure on the ballot after legislative review. The resulting law prohibits confinement of an egg-laying hen, breeding sow, or veal calf in a space that “prevents the animal from lying down, standing up, fully extending its limbs, or turning around freely.” A controversial provision requires all shelled eggs, whole pork, and whole veal sold in Massachusetts to meet this space requirement, whether produced in-state or out-of-state. Business owners must rely in good faith on a written certification (or guarantee of compliance) by a supplier or face a civil penalty up to $1,000 for each violation.

Massachusetts’ confinement standards mirror those in a 2008 California ballot initiative, Proposition 2. In 2018, Proposition 2 was amended by Proposition 12. As of 2015, California law prohibited the sale of shelled eggs produced in facilities that do not meet minimum space requirements; this was extended to liquid eggs in 2020. Restrictions on the sale of veal from crated calves also began in 2020. Sales restrictions on whole pork, requiring the most significant industry alterations, will be effective on January 1, 2022. This mandate spotlights a split in the pork industry. It favors Cargill, Inc., which phased out sow gestation crating in company-owned and contract farms by early 2015. Smithfield Foods, the U.S. division of China-based WH-Group, made limited progress in converting to group housing. But Tyson Foods and Seaboard Farms resisted, even defying pressure from shareholders. 

For decades, animal advocates campaigned to end cruel farming practices like gestation crates, battery cages, and veal crates. Since 2008, a dozen other states have phased out one or more of these industry practices. California and Massachusetts were first to support the production standards by banning the in-state sale of non-complying products. Washington joined in 2019, phasing out battery cages and prohibiting egg sales from those facilities in 2024. With the exception of California’s $1 billion U.S. egg industry, in-state space requirements do not significantly impact the agricultural sector in Massachusetts and California because most of their pork, veal, and eggs are imported from other states.

Environmental Impacts

Improved standards in animal agriculture are crucial to the health of animals, humans, and the environment, especially considering concentrated animal feeding operations (CAFOs) produce most animal products in the United States. With the COVID-19 pandemic continuing into 2022, zoonotic diseases pose an ongoing threat to humans and animals. CAFOs threaten to foster the next pandemic, confining thousands of animals in industrial buildings. High stress, injuries, and waste buildup weaken their immune systems, creating a perfect environment for pathogens to travel rapidly and replicate efficiently. Moreover, close confinement and concentration of animals contaminates surrounding water, soil, and air. Large-scale livestock operations create excessive waste, often used as fertilizer in nearby fields or stored on the premises. Soils become overloaded, causing buildups of nutrients like nitrates that seep into surface and groundwater. Runoff from rain spreads waste even farther, with phosphorous fostering harmful algal blooms in lakes and oceans. Beyond methane emitted from animals themselves, animal waste releases damaging amounts of ammonia into the air.

Legal Challenges

Food and agriculture corporations challenged state animal welfare regulations alleging Dormant Commerce Clause (“DCC”) violations. The DCC doctrine is a court-made test inferred from Congress’s Article I, Section 8 authority to “regulate Commerce… among the several states.” Over time, courts developed an implied prohibition against state laws that “substantially burden interstate commerce” or regulate out-of-state producers differently from in-state producers. The common test, from Pike v. Bruce Church, Inc., balances state interests served by non-discriminatory state laws against the law’s burden on interstate commerce.

 Animal agriculture associations and farming states have resorted to the courts, attempting to defeat welfare standards they argue are impermissibly coercive. Some challenges failed on procedural grounds, like lack of personal jurisdiction and subject matter jurisdiction. In Indiana v. Massachusetts and Missouri v. California, state plaintiffs attempted to invoke the Supreme Court’s original jurisdiction to evaluate a DCC challenge. At the direction of the Supreme Court, Solicitor General Noel Francisco filed a brief on behalf of the United States for both the Massachusetts case and the California case, emphasizing that the Supreme Court only grants original jurisdiction for cases or controversies between states in rare circumstances. The Supreme Court declined the plaintiffs’ motions in both cases in 2018 and 2019.

 In Iowa Pork Producers Association v. Bonta, the plaintiff claimed California’s sale ban on non-compliant pork violates the DCC, due process, and equal protection, among other provisions. The suit failed because the pork producers sued in Iowa. To assert authority over a non-resident defendant, a court must establish personal jurisdiction, requiring a party have minimum contacts with the forum that comport with “fair play and substantial justice.” The federal district court in Iowa found that California did not intentionally pass Proposition 12 to harm Iowa, the law was not aimed at Iowa, and the brunt of the harm would not affect Iowa. Ultimately, minimum contacts did not exist to justify exercising personal jurisdiction over California.

 So far, only two cases against the sale bans cleared procedural hurdles and proceeded to the merits of a DCC challenge. In North American Meat Institute v. Becerra, the U.S. District Court for the Central District of California denied North American Meat Institute’s (“NAMI”) motion to preliminarily enjoin California’s veal and pork sales laws from taking effect after determining NAMI failed to show a likelihood of success on the merits. The court decided Proposition 12 is not discriminatory because it does not have a discriminatory purpose or effect and treats in-state and out-of-state producers equally. Further, the court was skeptical of NAMI’s claim that California is impermissibly imposing its own animal production standards on industries in other states—called “extraterritorial regulation.” The court decided the plaintiff’s claims were “ultimately a complaint about the cost of complying with Proposition 12’s requirements.” The regulations change only how meat is produced, not where the meat is produced. On appeal, the Ninth Circuit Court of Appeals affirmed. In 2021, the Supreme Court denied certiorari.

 The Ninth Circuit also reviewed a pork industry challenge against Proposition 12 in National Pork Producers Council v. Ross. The court addressed the National Pork Producers Council’s (“NPPC”) main argument of impermissible extraterritorial regulation, determining that states “may require out-of-state producers to meet burdensome requirements” without infringing on the DCC. While the court acknowledged cost increases might occur, it determined costs incurred by production changes do not substantially burden interstate commerce. “Proposition 12 will have dramatic upstream effects and require pervasive changes to the pork production industry nationwide,” but NPPC failed to state a violation of the DCC. NPPC appealed to the Supreme Court, which is likely to consider the petition before the end of 2021.

Beyond litigative efforts, members of the pork industry lobbied for delays. In October 2021, the Massachusetts House passed a bill to update the 2016 Question 3 ballot initiative with specific square-foot measurements. The amendment would also delay implementation of the regulations specifically related to the sale of pork. If the Senate supports the bill, the provision instating a pork sale ban would be delayed until 2023. Estimates indicate less than 4% of pork producers are currently in compliance and prepared for the original January 2022 deadline.

Despite ample notice and multiple years to update facilities, animal agriculture industry members resisted change and challenged regulations in courts. Now, instead of working on compliance, producers are taking advantage of the pandemic, global supply chain delays, and price inflations to justify their reluctance to adhere to new animal welfare standards.

Looking Forward 

Environmentalists often overlook animal suffering in favor of environmental topics centered around human interests. To improve the environment effectively, we must address the environmental and ethical implications of exploiting farmed animals. While measures imposed by the sale bans may provide incremental improvements, their value lies in the potential to define future state action in regulating food systems and animal welfare. Ballot measures could help citizens take charge of decision-making and push environmental or animal interests to form laws. The survival of Proposition 12 and Question 3 could solidify the use of voter initiatives to determine food and animal law policies that reflect the changing values of our society.

2022 TOP 10 BLOG

Tracking the Biden Administration’s Whole-of-Government Approach to Equity and Environmental Justice

VJEL Staff Editor: Zachary Handelman

Faculty Member: Amy Laura Cahn

 

In his first week in office, President Biden issued several executive orders directed at undoing the Trump Administration’s environmental policies and ensuring that federal decisions advance equity, civil rights, racial justice, and equal opportunities for all. One order, E.O. 13985, creates the first federal whole-of-government equity agenda and directs federal agencies to implement equity concerns into their administrative actions. Another order, E.O. 14008, outlines a government-wide plan to tackle the climate crisis. These two orders aim to fundamentally transform the federal government’s approach to equity and environmental justice. This whole-of-government approach includes directing an unprecedented number of resources towards communities subject to historic neglect, disinvestment, and discrimination by the government and private entities. Given the interconnectedness of equity and environmental justice, these two orders will likely have an overlapping impact on federal agencies, particularly the Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA). It will be essential to monitor how these agencies and the White House coordinate and implement their ambitious mandates heading into year two of the Biden Administration.

Overview of Executive Orders 13985 and 14008

E.O. 13985 directs federal agencies to review their programs and policies to determine whether they perpetuate systemic barriers to underserved communities. The E.O. mandates the advancement of equity for “People of Color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality.” By January 20, 2022, each agency must complete a plan to address the systemic barriers to these affected communities. This planning process shall involve meaningful consultation and engagement with members of those communities. Ultimately, this January 20 deadline will reveal the concrete policy and program changes that each agency will take to advance equity for People of Color and other underserved communities.

E.O. 14008 addresses a broad range of climate policies and initiatives with a focus on environmental justice. This order amends the Clinton era E.O. 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations). E.O. 12898 was widely recognized at the time for bringing attention to the environmental justice movement. However, it has since been criticized by Environmental Justice advocates for its lack of substantive requirements and enforcement by federal agencies. E.O. 14008 revises E.O. 12898 to establish environmental justice performance metrics and annual performance scorecards. These revisions are intended to hold agencies accountable for meeting the goals and requirements of Biden’s executive orders.

E.O. 14008 also created two important government initiatives: Justice40 and the Climate and Economic Justice Screening Tool. The Justice40 initiative directs 40% of federal investments to flow to disadvantaged communities. The Climate and Economic Justice Screening Tool will be a geospatial map that identifies and highlights disadvantaged communities to support the allocation of federal funds to these communities. Taken together, Executive Orders 13985 and 14008 address important, overlapping issues facing People of Color and other underserved communities. They set ambitious goals that will require serious investment, but still leave a lot of unanswered questions for agencies and the public.

Equity and Environmental Justice in the USDA and EPA

It will be important to monitor how the EPA and USDA implement their mandates under Executive Orders 13985 and 14008. These two agencies have particularly complex histories with racism and discrimination. BIPOC (Black, Indigenous, and People of Color) farmers have long received a significantly lower share of USDA benefits and services than white farmers, while disproportionately suffering from the adverse environmental health impacts of the agriculture industry. Meanwhile, BIPOC neighborhoods have long borne the brunt of disproportionate environmental burdens, unprotected by existing environmental laws. For decades, EPA has failed to comply with its duties under Title VI of the Civil Rights Act and E.O. 12898 by persistently declining to investigate complaints of civil-rights violations in communities of color.

Climate change will only exacerbate the challenges facing underserved communities. Whether these two agencies can rewrite these narratives, while addressing the need for climate action, will require a systematic transformation that endures long after the Biden Administration. While Biden’s executive orders set the stage for this kind of shift, it will be up to each agency to assess their unique needs, goals, and capabilities.

Federal agencies have taken different approaches to address equity and systemic barriers under E.O. 13985. In June of 2021, the USDA issued a more general Request for Information (RFI) for public input on advancing racial justice and equity within the agency. The RFI indicates that the USDA is establishing a Racial Equity Commission to gather public input and identify barriers that People of Color face in accessing USDA programs. On October 7, 2021, USDA published a fact sheet listing its equity accomplishments since the inception of Biden’s executive orders. This list includes multiple initiatives to use COVID-19 relief funds to support socially disadvantaged farmworkers.

However, some of USDA’s efforts might be impacted by a legal grey area regarding agency actions that provide aid to socially disadvantaged groups. In February 2021, Congress passed the Emergency Relief for Farmers of Color Act which directed USDA to forgive the debts of socially disadvantaged farmers—defined as having been “subjected to racial or ethnic prejudice.” The law currently faces 13 lawsuits by white farmers across the country challenging the law as relying on a race-based classification. The lawsuits will determine the future of this monumental piece of legislation, and the USDA will have to wait to administer the program’s funds until the courts resolve the lawsuits. Because race is such an essential factor in equity and environmental justice issues, the lawsuits may have ramifications beyond this one USDA program. Any actions taken pursuant to Executive Orders 13985 and 14008 may be subject to similar constitutional challenges. The USDA still has a long way to go to remedy the effects of past discrimination and 2022 should provide more guidance on how the agency intends to integrate equity and environmental justice into its programs and policies.

The EPA has more experience in administering environmental justice initiatives due to its central role in administering E.O. 12898, but has still struggled to integrate environmental justice across the agency and government. Moreover, under the Trump administration, the EPA was severely curtailed by budget cuts, internal politics, and efforts to undermine environmental justice initiatives. With this backdrop in mind, it will be important to monitor EPA’s progress on these issues during the Biden Administration.

Since January, EPA has stepped up its initiatives related to equity and environmental justice. EPA continues to roll back Trump era rules and regulations, while promulgating new regulations to address PFAS and other toxic pollutants and directing funds to environmental justice communities. The agency also recently concluded a public comment period on its FY 2022-2026 Strategic Plan. This plan includes several performance goals and strategies related to advancing environmental justice and civil rights. Most recently, EPA Administrator Regan completed a week-long “Journey to Justice” tour to hear firsthand from residents of historically marginalized communities in Mississippi, Louisiana, and Texas.

EPA and USDA’s complicated histories with environmental justice leave many questions yet to be answered. Given the expansive reach of E.O. 13985, how will EPA and USDA determine which communities fall under the definitions of underserved and disadvantaged communities? How will current litigation impact strong action on equity? Will the actions of the prior administration affect the agencies’ abilities to address these issues before the next election? Answers to these questions should become clearer in January once the EPA, USDA, and other agencies publish their racial equity plans under E.O. 13985.

Looking Forward for 2022

2021 began by welcoming a new presidential administration to the White House. This change in administration may be looked back on as ushering in a new era of federal action on climate and equity. President Biden’s executive orders set the stage for a whole-of-government approach to addressing the needs of underserved and overburdened communities. 2022 will be even more important, as agencies are directed to begin implementing programs and policies according to these executive orders. At this time, many questions remain to be answered. Will agency actions which factor historic racial discrimination be subject to constitutional constraints? Will agencies have sufficient enforcement authority and resources to enact their programs and policies? Will People of Color and other underserved communities have the power and opportunity to shape how policy impacts their lived experiences? This coming year will provide the public with a better understanding of how effective the federal government will be at addressing equity and environmental justice under the Biden administration.

VJEL Staff Editor: Taylor Tavormina

Faculty Member: John Echeverria

 

Looming United States Water Wars

 

States have long had disputes over the use of interstate waterbodies with neighboring states, but the number of these disputes is now at an all-time high and the number of these disputes may well increase in the future. Water covers over 70% of Earth’s surface, but only a tiny fraction of this water is accessible fresh water suitable for human use. Moreover, much of the United States population is concentrated in relatively arid parts of the country. In addition, the latest reports from the U.S. Climate Science Program predict lower precipitation in many parts of the country during certain periods of time. A predictable consequence of these trends is more legal conflict between States over shared water resources.

 

Background

 

Congress on rare occasion steps in to resolve water disputes between States through legislation. The most common method for resolving interstate water allocation disputes are interstate compacts or so-called equitable apportionment proceedings. If States can agree over allocation of water supplies between themselves, Congress can approve the agreements pursuant to the Compact Clause and make them binding on the States. When States fall into disagreements over how to read a compact, they can turn to the U.S. Supreme Court for help, which has original and exclusive jurisdiction over all lawsuits between different States. In the absence of a compact, States can file suit against neighboring States directly in the Supreme Court to obtain an equitable apportionment of interstate waters. Resolving interstate water disputes is very difficult and time-consuming. The Court routinely appoints Special Masters, who are often retired lawyers or law professors, to handle the cases on a day-to-day basis and make recommendations to the Court.

 

The following interstate water cases currently pending before the Supreme Court show the complexity and diverse character of these dispute.

 

Supreme Court Litigation

 

Mississippi v. Tennessee, Supreme Court Case No. 143

In 2014, the State of Mississippi sought permission from the Supreme Court to proceed with a case against the State of Tennessee arising from the City of Memphis’s alleged over-pumping of water the Sparta-Memphis aquifer that underlies the two states—as well as other states in the region. Mississippi contends the city’s intensive pumping has created a “cone of depression” in the aquifer causing water to flow from beneath Mississippi across the state line to Tennessee. The case is pathbreaking because it is the first interstate water case to focus on interstate allocation of groundwater. The case is also unusual because the States do not even agree on the nature of their dispute. Mississippi has not sought a traditional equitable apportionment because it claims absolute ownership of “its” groundwater and contends Tennessee has engaged in a “trespass” upon its rights. Tennessee, by contrast, defends by arguing that equitable apportionment doctrine should apply to interstate aquifers in the same way it applies to interstate surface waters. Tennessee suggests Mississippi’s case must be rejected because Mississippi has made no equitable apportionment claim. The Special Master, following years of fact finding and legal argument, is poised to issue a report in the near future, setting up the issues for presentation to the Supreme Court.

 

Texas v. New Mexico, No. 141.

In 1938, the States of Colorado, New Mexico, and Texas signed the Rio Grande Compact allocating this important river that not only supplies water to the region but also serves as the international boundary between the United States and Mexico. In 2014, Texas initiated a compact enforcement action in the Supreme Court alleging that New Mexico has allowed surface water diversions and pumping of hydrologically connected groundwater in certain locations along the river in violation of the Compact, reducing the volume of water reaching Texas. New Mexico countered by asserting that it has acted within its rights under the Compact. To make matters more complicated, the United States has intervened on the side of Texas and contends that New Mexico’s compact violations impair its ability to deliver water in accord with a treaty between the United States and Mexico. Following a 2018 decision affirming the right of the United States to intervene in the case, the Supreme Court sent the case back to the Special Master for fact finding which is currently ongoing.

 

Florida v. Georgia, No. 142.
For several decades the States of Florida and Georgia engaged in ultimately fruitless efforts to form a compact dividing up the flows of the Apalachicola-Chattahoochee-Flint River System, which flows from the northern tip of Georgia southward to Apalachicola Bay in Florida. In 2012, in the wake of this failure, the State of Florida initiated a case before the Supreme Court seeking an equitable apportionment of the river. The case was assigned to a Special Master who, after years of deliberation, concluded that Florida’s case should be dismissed. In 2018, in a 5-4 decision, the Supreme Court rejected the Special Master’s recommendation, ruling that he had applied too high a standard of review in determining whether Florida was entitled to relief. The Court remanded the case for further proceedings before a second Special Master, who issued a comprehensive report in December 2019, again recommending that Florida’s case be dismissed. The second Special Master concluded that Florida failed to prove that upstream diversions harm the oyster fishery in Apalachicola Bay and that granting a water allocation to Florida would not produce benefits in Florida that outweigh the economic costs in Georgia. The Special Master submitted the report to the Supreme Court, which is expected to schedule oral argument or otherwise take action in the near future.

 

Texas v. New Mexico, No. 1949
In 1949, Congress approved the Pecos River Compact between the States of New Mexico and Texas. Over the years the Pecos River Compact has given rise to several conflicts that have required Supreme Court attention; in particular, faced with intractable deadlock on the Pecos River Commission, the Supreme Court took the unusual step of appointing a permanent “River Master” to oversee implementation of the compact. The latest controversy arising from this compact involves an interesting but relatively narrow “accounting” question. In 2014-2015, after a tropical storm drenched the region, the State of Texas asked New Mexico to store excess flood waters in a reservoir in New Mexico on a temporary basis. While the water sat in the reservoir in New Mexico, its volume inevitably shrank as a result of evaporation. After the water was eventually released downstream, the question arose whether the water loss due to evaporation should be charged to New Mexico or Texas. The States attempted to resolve this accounting dispute between themselves, but that effort failed. They referred the issue to the Water Master, who ruled in favor of New Mexico. On October 5, 2020, the first day of the new term, the Supreme Court heard oral argument on Texas’s challenge to the River Masters’ conclusion. The Court is expected to issue its decision soon.

 

Problems

 

The current process in the United States for resolving interstate water disputes has some serious weaknesses. First, it has become increasingly difficult to establish new interstate water allocations. Members of Congress avoid enacting legislation to resolve interstate water conflicts because of their understandable reluctance to intrude in essentially regional conflicts. No States have successfully negotiated new compacts apportioning interstate waterways since 1978. In recent decades, States have not had any better luck with equitable apportionments, and it now seems unlikely the outcome in Florida v. Georgia will break this pattern. The Supreme Court has been more successful in resolving disputes over how to interpret interstate compacts. However, these proceedings are often time-consuming and expensive. It might be questioned whether some compact enforcement cases, such as the pending accounting dispute arising from the Pecos River Compact, are worthy of the time and attention of the Supreme Court. The Court has broad discretion over whether to agree to adjudicate interstate water cases within its original jurisdiction and the Court may well be reluctant to expand its water docket. Meanwhile, the Nation’s growing population and the increasing risk of serious drought due to climate change, raise the prospect that interstate water conflicts will become more frequent. It is debatable whether the current system for resolving interstate water conflicts is adequate to deal with the nation’s looming water wars.

 

Importance and Looking Forward

 

Water scarcity is an ever worsening problem and can lead to growing conflicts between States over their shared waters. This looming challenge highlights the importance of achieving national and international progress in controlling carbon emissions and capping the pace of climate change. Many communities in the United States already have made impressive progress in conserving water, and redoubled efforts to reduce water use can help avoid future interstate water conflicts. It is worthwhile to consider how to reform the process for resolving interstate water conflicts, including reducing the cost, time, and effort that are invested in these cases. Negotiation, mediation and arbitration are all techniques that can potentially expedite the resolution of these disputes. Enhanced data collection and stream flow modelling capabilities can reduce uncertainties and thereby enhance the prospects for informal resolution of interstate water conflicts.

 

VJEL Staff Editor: Madison Hertzog

Faculty Member: Jim Murphy

To Rebuild or Not to Rebuild? An Examination of NEPA and the Environmental Regulatory State

 

Where to begin? It is commonplace that a change of administration comes with alterations in law and policy. But when did a change in administration become synonymous with the systematic dismantling of the environmental regulatory state? To date, the Trump Administration has rolled back or reversed 104 major environmental policiesincluding those safeguarding clean water, air, and wildlife.

 

An apt example is the National Environmental Policy Act of 1970 (NEPA). NEPA was among the first of many laws intended to address a series of nationwide environmental crises a half-century ago where rivers were so polluted they were on fire; cities were choked with smog; and species like the bald eagle and gray wolf were at the brink of extinction.

 

NEPA expressly places environmental concerns at the forefront of federal decision-making. It requires that all federal agencies proposing a major agency action significantly impacting the quality of the human environment conduct a series of environmental assessments prior to acting. NEPA also established the Council for Environmental Quality (CEQ) within the Executive Office of the President to ensure that agencies comply with the terms of the Act and any proposed amendments to NEPA.

 

The text of NEPA itself is quite brief. As such, much of NEPA law and implementation derives from regulations promulgated in 1978 and supported by five decades of case law. Among other things, the 1978 regulations required extensive consideration of the direct, indirect, and cumulative impacts of agency actions and provided opportunities for robust public participation. Yet in July 2020, the CEQ finalized rules that upend the 1978 NEPA regulations to the praise of industry but over the objections of a vast majority of over 1.1 million public commenters.

 

Despite the Trump Administration’s claim that the final rule modernizes NEPA by increasing transparency, promoting early public involvement, and generally fast-tracking the review process, one doesn’t have to look too closely to realize this characterization misrepresents the new NEPA. Instead, the final rule is a nod to the oil and gas industry and its sympathizers who have long complained that NEPA review takes too long and imposes unnecessary restrictions upon projects. The primary effect of the new NEPA regulations is to transform NEPA from a look before you leap statute into a meaningless check-the-box exercise that fails to consider impacts and shortcuts public input.

 

Specifically, the final rule narrows the definition of “major federal agency action,” restricting the number of action that will even be subject to NEPA. It also seeks to substantially limit the universe of affects considered by agencies by removing references to “cumulative” and “indirect” effects well as segmentation of projects in order to avoid review. Additionally, the new rule vastly expands the ability of agencies to identify categories that do not need an environmental assessment. Furthermore, it places an artificial constraint on the time agencies may take to do reviews and limits the page length of such reviews without providing additional resources to meet these tight deadlines.

 

The practical effects of these new rules are that far fewer projects will undergo any form of NEPA review. Those projects that are subject to NEPA will undergo an artificially truncated process that makes public participation harder and fails to require the review of important environmental impacts like climate change.

 

The NEPA rule is just one example. There have also been multiple rollbacks crippling the Clean Water Act, Clean Air Act, Endangered Species Act, and many other bedrock environmental protections. Many of these regulatory rollbacks are in current litigation, and thus far, the challengers have won all but a handful of cases.

Given the massive extent of these rollbacks, reconstructing the regulatory state will be challenging for the Biden Administration. Take the NEPA example. The unfortunate reality is that the Biden CEQ cannot simply wave a wand and restore the 1978 rule. Instead, it must reinstate the 1978 NEPA through the formal rulemaking process, which takes time and resources. It is also possible that the Biden Department of Justice stops fighting court challenges to the rollbacks and either settles or withdraws these cases. However, that path may not avoid the need for rulemaking because the reviewing judge may order it anyway.

 

Another option is for the new Congress to use the Congressional Review Act (CRA) to pass legislation to overturn the CEQs amendments to NEPA. To be eligible for consideration, a rule must have been enacted within LX legislative days of a presidential election. Functionally, the CRA allows Congress to reconsider and, if necessary, overturn newly issued rules. Once a rule is overturned, the promulgating agency is prohibited from issuing any new rules that can be considered substantially similar. NEPA is one of many acts that would be eligible for reconsideration under the CRA. Use of the CRA would almost certainly depend on both the Biden Administration and a Democratic Congress. This will come with the political cost of convincing conservative Democrats to support the reversal—and there will likely be many tough asks of these lawmakers—as well as the risk of restricting the agency’s options for future rulemaking.

 

But a deeper question to consider is whether it is ideal to simply restore these regulations. For a variety of reasons, a return to the previous rules would be politically expedient and more protective than the rollbacks—but doing so may be a lost opportunity. However, many of the previous regulations were written decades ago and do not directly address currently pressing challenges, like climate change and environmental justice.

 

Although the Trump Administration is responsible for single handedly dismantling a large portion of the environmental regulatory state, it is possible this could provide a time for a proper reset. The laws and regulations attacked are old and while effective, may be imperfect tools for addressing twenty-first century challenges. A regulatory rebuild properly done could fix that.

VJEL Staff Editor: Brad Farrell

Faculty Member: Rachel Stevens

Unearthing Virtual Pipelines

 

The oil and gas pipeline network in the United States stretches nearly three million miles, with another 21,500 miles currently proposed or under construction. Since July 2020, however, frontline communities and environmental advocates successfully challenged the most significant of these proposed pipelines: Keystone XL, Dakota Access, and Atlantic Coast. The 2,600-mile Keystone XL pipeline hit a major roadblock when the Supreme Court upheld an orderissued by a Montana federal court to stay the pipeline. Simultaneously, Dominion Energy announced the cancellation of the Atlantic Coast pipeline project and the U.S. District Court for the District of Columbia ordered the Dakota Access pipeline to shut down pending further environmental review, handing down a victory to the Standing Rock Sioux Tribe and other groups opposing the pipeline. Meanwhile, the significant reduction in travel due to COVID-19 has sunk oil demand and prices and led to a glut of petroleum as oil and gas companies opt to keep their products moving rather than decrease production.

 

Confronting these legal battles and shifting economics, oil and gas companies are rapidly moving their products above ground, turning to trucks, trains, and tankers—known as “virtual pipelines“—to transport and store oil and gas on roads, rails, and waterways. Since the pandemic began, California residents witnessed dozens of oil tankers idling just offshore from the Port of Los Angeles being used for floating storage of 20 million barrels of oil. Gulf Coast residents confronted a flotilla of nearly 20 tankers, including very large crude carriers, floating offshore from Saudia Arabia waiting to unload in U.S. ports. Inquiries from oil and gas companies for available truck and train transport has also intensified since the pandemic.

 

Undoubtedly, environmentalists have had success making pipeline challenges the frontline in the fight against fossil fuels and climate change. But these legal victories are short lived if oil and gas companies revert to virtual pipelines which last made significant national headlines in 2014, before the Dakota Access pipeline was in service and before President Obama rejected the Keystone XL pipeline. The Association of American Railroads estimates that carloads of crude oil on U.S. railroads peaked in 2014 at 493,146, falling sharply the next few years as the Trump Administration fast tracked traditional pipelines.

 

This shift to virtual pipelines is moving forward without public scrutiny or environmental review, even though the associated safety and environmental risks may be more detrimental than traditional pipelines. Shipping crude oil and gas via virtual pipelines may have greater environmental costs than traditional pipelines because trains and trucks emit ground level air emissions, burn diesel fuel, and have a greater risk of spilling in populated areas. One study of crude-oil-by-rail transported out of North Dakota estimates that the “air pollution and greenhouse gas costs are nearly twice as large for rail as for pipelines.”

 

Virtual pipelines also present well documented safety risks. Truck brakes and exhaust systems can heat to upwards of 1,000 degrees Fahrenheit, temperatures that would easily ignite leaking natural gas in the event of a leak or a crash. A truck driver in New York fell asleep at the wheel and careened down an embankment, leaking natural gas.  In July of 2013, a major accident in Quebec killed 47 people. Another accident in Alabama started an inquiry into the lack of oversight on virtual shipping methods. This boom in train and truck oil transportation has directly correlated to increased spills. In 2013 alone, more gallons of oil spilled due to rail accidents than the previous total from 1975 to 2012.

 

These hazardous transportation methods are regulated by the Pipeline and Hazardous Materials Safety Administration (PHMSA) which issues special permits and writes specifications for these tank cars, as well as for all highway, railroad, and barge tanks carrying hazardous materials. Companies can receive special permits to transport compressed gas on the roadways by showing their canisters withstand front, rear, and side-impact as well as rollovers. This permitting process currently does not involve an environmental review under the National Environmental Policy Act (NEPA) that would otherwise require a “hard look” at the virtual pipeline’s environmental impacts. Gas transported in these PHMSA certified containers reaches more geographic areas than traditional pipelines could, expanding the demand and infrastructure related to natural gas without evaluating the environmental impact of the virtual pipeline.

 

The transportation of highly flammable substances by virtual pipeline may be entering a new boom now that the PHMSA promulgated a rule in August 2020 that allows railways to transport liquified natural gas—leading some to worry about “bomb trains” rolling through neighborhoods. Virtual pipelines may also prolong the life of oil and gas by expanding into to new regions like New England, where the terrain will not support traditional pipeline development.

 

Looking ahead, a move to virtual pipelines may accelerate under the new Biden Administration as oil and gas companies seek new forms of transportation that avoid environmental review. Although president-elect Biden will seek to expand the renewable energy market in all 50 states, he campaigned on a promise that he will not ban fracking. If the Biden Administration opposes traditional pipelines, like the Obama Administration, then oil and gas companies will simply pivot to road and rail distributions. To mitigate this shift to virtual pipelines, federal and state governments must incentivize renewable energy to levels that upset the status quo and reverse the Trump Administration’s environmental rollbacks. Otherwise, oil and gas companies will continue building fossil fuel infrastructure through virtual pipelines that avoid environmental review and present serious risks to public health, safety, and the environment. The pipeline wars have made significant strides in the battle against fossil fuels by blocking what will hopefully be obsolete energy infrastructure, but without federal leadership and policies that incentivize renewable energy the benefits of those fights are not fully realized.