Colorado’s Responsibility to Protect the Public and the Environment from Adverse Impacts of Oil and Gas Development By GWC Senior Fellow Robert Hallman

Oil and gas (O&G) production in Colorado is growing largely through development of wells using hydraulic fracturing (pumping millions of gallons of water, sand and chemicals under high pressure) coupled with horizontal drilling at distances extending one to three miles from the wells. (The entire process in now commonly referred to as “fracking.”)

The search for the most productive areas increasingly involves proposals to locate multiple well pads in urban, suburban and exurban areas exposing communities to industrial-scale operations and related environmental, public health and safety, economic, and social impacts.

In response, various impacted parties have urged the Colorado Oil and Gas Conservation Commission (the Commission) to expand and/or strengthen its environmental, safety, siting, and public participation rules applicable to O&G projects; and many local governments have sought to ban or otherwise regulate fracking through home rule and/or land use/zoning authority.

The Law

The Colorado Oil and Gas Conservation Act (the Act) established the Commission to regulate O&G operations “so as to prevent and mitigate significant adverse environmental impact on the air, water, soil, or biological resources resulting from oil and gas operations to the extent necessary to protect public health, safety, and welfare, including protection of the environment and wildlife resources, taking into consideration cost effectiveness and technical feasibility.” It also directs the Commission to promulgate rules “in consultation with the department of public health and environment [DPHE]…, to protect the health, safety and welfare of the general public in the conduct of O&G operations.”

The Act further states that it is in the public interest “to foster the responsible, balanced development, production and utilization of… oil and gas… in a manner consistent with the protection of public health, safety and welfare, including protection of the environment and wildlife resources….”

The current Commission interprets the Act to mean it is required to balance a number of competing policies with protection of the environment, public health, and safety. The Commission’s “balancing test” has come under increasing scrutiny as environmental and safety issues have increased. The effects of climate change, explosions and leaks caused by pipelines, and a variety of community impacts associated with industrial-scale fracking have grown in number and intensity. In January, the Colorado Supreme Court agreed to review whether the balancing test satisfies the requirement to protect public health, safety and the environment in Colorado Oil and Gas Conservation Commission, American Petroleum Institute, and Colorado Petroleum Association v. Xiuhtezcatl Martinez, et al, 17SC297 (the Martinez Case).

The Martinez Case

In November 2013, a group of concerned citizens requested that the Commission adopt a rule to suspend issuance of permits for O&G projects until it determined, based on the best available science and independent third-party confirmation, that drilling can be done without impairing Colorado’s atmosphere, water, wildlife and land resources, adversely impacting human health, and contributing to climate change.

After holding a hearing and receiving an opinion from the Attorney General (AG) that found the proposed rule was beyond the Commission’s “limited statutory authority,” the Commission denied the request. A key reason was its conclusion that the proposed rule would require the Commission to “readjust the balance crafted by the General Assembly” under the Act. The Commission cited the AG’s opinion as “the primary basis of the Commission’s denial.”

Petitioners appealed and in February 2016, the Colorado District Court (Denver) affirmed the Commission’s denial. In March 2017, the Colorado Court of Appeals, in a two to one decision, held that the Commission erred in construing the Act to require a balancing test and reversed the District Court’s decision.

The Appellate Court did not address the merits of the proposed rule and remanded the matter for further proceedings consistent with its opinion.

The majority acknowledged the Act’s intent to foster “balanced development, but held that the statutory language, “ ‘in a manner consistent with’ does not indicate a balancing test but rather a condition that must be fulfilled.” Additionally, the majority found that the Commission’s obligation to prevent and mitigate significant adverse environmental impacts “to the extent necessary” to protect the public “evidences a similar intent to elevate the importance of public health, safety and welfare above a mere balancing….”

In May 2017, six of the seven Commission members voted to appeal the Appellate Courts ruling to obtain clarity. The Governor opposed an appeal, claiming the ruling was not a significant departure from current practice. The AG disagreed and sought review by the Supreme Court, arguing that the Appellate Court adopted a novel view of the Act by rejecting the Commission’s balancing test in favor of mandating that development be regulated subject to protection of the environment, public health, and safety.

The AG’s issue for review by the Supreme Court was stated as follows: “When the Commission engages in rule-making, is it permitted to disregard the Act’s policy of fostering O&G development in Colorado?” However, in granting review the Supreme Court reframed the issue asking whether the Appellate Court erred in determining that the Commission misinterpreted the Act as requiring a balance between O&G development and public health, safety, and welfare.

Discussion

Based on the plain language of the Act, its legislative history, and established principles of statutory construction, the Appellate Court’s decision appears sound. For example, the word “balanced” appears once in the legislative declaration and only modifies development, production and utilization of O&G. Balanced O&G activities are declared to be in the public interest only if they proceed in a manner consistent with protection of public health, safety and welfare, and the environment. Treating such protection as one of many policies to be weighed, as opposed to a mandate applicable to O&G operations is unwarranted. Moreover, the AG’s opinion relied on by the Commission to support a balancing test is conclusory at best and circular at worst, including citing the Commission’s use of the balancing test in a 2008 rulemaking to implement 2007 amendments to the Act for support of the balancing test in the Martinez Case.

In any event, no matter how the legislative declaration is interpreted, the Act’s substantive provisions, set forth above, establish a clear mandate for the Commission, in some cases in consultation with the Colorado Department of Public Health and Environment (CDPHE), to develop environmental, public health, safety, and welfare protections for O&G operations without reference to fostering development or any other competing policies.

This mandate authorizes the Commission—as the expert agency regarding O&G operations—to supplement and expand the array of requirements to protect the environment, and public health, safety, and welfare applied to the O&G industry by other responsible federal and state agencies. It would be unreasonable at best to conclude that, having granted such powers to the Commission, the legislature intended the Commission to weaken or even avoid adopting such measures that it deems necessary to “foster” development. It would also fly in the face of established environmental protection, public health and safety policy and practice.

Claiming, as Judge Booras does in her dissenting opinion, that the direction to the Commission in one substantive provision to consider cost effectiveness and technical feasibility supports a general balancing test is unpersuasive. Cost effectiveness and technical feasibility are required considerations only to the extent they relate to assessing proposed environmental protection measures and do not encompass the broad economic implications and “many other factors” (largely unspecified) that the Commission claims it must consider. Also, as the Appellate Court noted, the statutory direction for the Commission to prevent and mitigate environmental impacts “to the extent necessary” to protect the public and environment belies any intent to mandate a regulatory balancing test.

The AG and the Appellate Court minority opinion argue that the Supreme Court’s 2016 decisions determining that local fracking bans and moratoria were preempted by state law support the view that the statewide interest in developing O&G resources trump or at least must be balanced against any environmental, public health and safety concerns. This claim is baseless. The issue in those cases was the extent to which local governments can regulate adverse impacts of O&G projects. The court did not address the nature and extent of the Commission’s authority to promulgate regulations, including whether it is required to balance protections with fostering development.

Whatever the Supreme Court holds in the Martinez case, its decision may be significantly affected by the results of the November 2018 elections for Governor, AG, and state legislature, each of which has a variety of opportunities to impact actions by the Commission. Earlier this year, for example, a bill to codify the Appellate Court decision passed by the House of Representatives died in the State Senate.

Robert Hallman is a GWC Senior Fellow, and a Fellow at the Center on Global Energy Policy at Columbia University. The author includes his thanks to GWC Student Fellow – Griffin Hay – for his research assistance.

Navajo Generating Station: An Opportunity for Renewable Energy Project Finance By CU Law Student Gregor McGregor

Immensity is the abiding feature of the Colorado Plateau. During this year’s Advanced Natural Resources Seminar, our group was struck again and again by the sheer magnitude of the region’s features. Sleeping Ute Mountain, Shiprock, and Bears Ears greeted us outside Durango. These figures remained our companions on the horizon as we travelled vast distances through New Mexico, Arizona, and Utah. In a topography of deep canyons, sheer cliffs, and broad skies, the size of Navajo Generating Station (NGS) seems almost appropriate as it towers above Page, Arizona.

Everything about NGS is immense: its gas stacks reach 775 feet into the sky; it has a nameplate capacity of 2,250 MW; it uses 50,000 acre-feet (over 16 billion gallons!) of water annually; consumes 8 million tons of coal annually; and its construction included 800 miles of new 500 kV transmission lines. The NGS was constructed to pump 500 billion gallons of water uphill from Lake Havasu to Phoenix and Tuscon through the Central Arizona Project.

Yet, this 44-year-old vestige of the Plateau’s “big build-up” is about to fall prey to the changing economic realities. In 2015, the utilities who operate the plant voted to end operations. The cost of retrofitting the plant to meet environmental standards was no longer economic. A regional drop in the price of electricity on the spot-market, driven by cheap natural gas-fired electricity, meant the operators were losing tens of millions of dollars by continuing operations. Despite some investment group interest, and hearings on the Hill, the NGS will likely close in December of 2019.

Continued operation of the NGS is economically and environmentally unadvisable. Renewable energy development offers an alternative in line with the Navajo land ethic and conception of intergenerational responsibility. As Nicole Horseherder, a Navajo activist, said during hearings in Washington D.C., “burning coal is uneconomic and can no longer compete against cleaner, cheaper and far more culturally appropriate sources of power, such as the solar and wind resources that are plentiful on the Navajo Nation.”

Positive Developments in Indian Law for Investment

The closure of the NGS may also mean the closure of the Kayenta Mine, which is the dedicated fuel source for the plant. Together, these sites provide millions of dollars and between 700 and 3000 jobs to the Navajo and Hopi Nations. The environmental benefits from closing the plant and the economic advantages reaped by the utilities will come at a deep cost to the surrounding communities and tribal governments. However, developments in Indian law and the remaining infrastructure present are a major opportunity for renewable energy development.

Anyone who works in Indian law, energy law, or project finance knows how complex each of these fields are independently. This complexity only increases as you mix and match topics. What the NGS site provides, besides abundant solar potential, is a simplified route around many of the typical requirements for developing energy projects on Tribal lands.

Since 2000, Federal Indian law has been steadily empowering tribes to make their own decisions on leasing and developing their own lands. These acts permit tribes with adequate environmental and procedural safeguards to make contract and leasing decisions for themselves. Previously, leases were subject to approval by the Secretary of the Interior under the Federal Government’s trust responsibility to the tribes, adding as much as two years to the typical leasing process. 

The ability of the Navajo to approve their own leases greatly reduces the complexity involved in partnering with the nation to build a renewable energy plant. Because a renewable site does not implicate the removal of minerals, these leasing decisions are the major bureaucratic hurdle to project developers. Renewable energy also circumvents three major legislative acts and the up to eighteen Bureaus and offices within the Department of the Interior that are involved in mineral development on Indian land. All of this means reduced costs and more profitable future projects.

NGS Site Advantages for Site Control and Access, Permitting

Depending on the terms of agreement to reclaim the NGS site, the Navajo Nation will control access to the facility site, the electric railway to the Kayenta Mine, and lands encompassing the mine. The area is already developed with the necessary easements and physical infrastructure for future projects, and the Navajo Nation is a single entity to negotiate with. The water, and water-bearing infrastructure, needed to construct and operate a renewable energy site are already available, and transmission infrastructure already exists and capacity is secured by the tribe for 35 years in the current operating lease. These assets amount to $121 million of already-existing and necessary infrastructure for energy projects in the area.

Permitting is simplified by developments in Indian law, but also by the existence of the NGS. The current lease provides that the site will be remediated for industrial use. The much-less intensive infrastructure of a renewable energy-site is also unlikely to trigger any new environmental controls against the backdrop of 44 years of coal operation. Pre-existing transmission capacity is also a major boon to re-development. Generally, each locality transmission lines pass through must issue an individual permit before a company can approach the state utilities commission for final approval and begin construction. The Power Company of Wyoming has been working since 2005 to permit 730 miles of transmission for its own 3,000 MW wind project. This is added time and money a new project could avoid by using the NGS site.

A Chance for Reclamation and Future Development

When a project company seeks financing for a new facility at the NGS site, it will benefit in myriad ways from the prior existence of the coal plant. Reduced project and transaction costs will drive down the price of doing business, giving a project a better chance of profitability in the future.

A shift to renewable energy at the NGS site is unlikely to match the coal plant and mine in megawatts, jobs, or income. However, it does present an incredible opportunity for development companies and the tribes to reclaim economic benefits and contribute to a clean-energy future. The Navajo already operate the first tribally-owned solar facility, a 27.3 MW solar array, outside the town of Kayenta. Installing panels at the NGS site would continue Navajo leadership in renewable energy, and set conditions for increased energy development on tribal lands.

Gregor MacGregor is an active-duty Captain in the United States Army attending law school through the Funded Legal Education Program. All views contained in this post are his own and do not reflect the position of the U.S. Army, Department of Defense, or Federal Government of the United States. Gregor McGregor is a rising 3L at Colorado Law. 

Collaborating for a Greener Future: How Colorado Encourages Better Energy Decisions By CU Law Student Austin Flanagan

Most states have separate agencies responsible for environmental protection and energy planning, making collaboration between agencies a necessity to ensure that energy and environmental decisions do not undermine the achievement of one another’s goals. Collaboration between agencies promotes efficient planning, a clearer understanding of issues and solutions, and greater accountability with agencies cross-referencing each other’s work. Here, I draw on interviews from several state agency officials to analyze Colorado’s current collaborative framework and ways to secure that framework for the future.

The dominant threats to collaboration are agencies’ competing interests (e.g. a different weighing of economic and environmental impacts), a new administration taking office that emphasizes an adversarial rather than cooperative framework, and turnover in agencies that results in weaker inter-agency relationships.

Colorado agencies currently collaborate for three main reasons: The Clean Air – Clean Jobs Act mandates it, the Governor set a tone for it, and agency officials see the benefit in it (cultivated by strong inter-agency relationships). It is all three of these factors which have contributed to Colorado’s successful collaborative structure.

Though Colorado’s agencies have achieved successful cooperation historically, this cooperation was strengthened with the passage of the Clean Air – Clean Jobs Act in 2010. The Act is the primary piece of state legislation that requires energy and environmental agencies to collaborate. The Act encourages more natural gas production along with other “low emitting resources” and the retirement of coal-fired plants, which historically accounted for over half of Colorado’s energy production. The Act mandates all rate-regulated utilities that own coal plants to submit to the public utilities commission (PUC) an emission reduction plan. The PUC will then allow the Department of Public Health and Environment (CDPHE) to comment on the utilities plan. The CDPHE analyzes the plans to ensure compliance with state and national emission standards. The CDPHE’s Air Quality Control Commission then has an opportunity to incorporate the plans into the regional haze element of Colorado’s State Implementation Plan (which is required by federal law).

The Act furthered Colorado’s cooperative environment by setting ambitious emission goals and mandating coordination between certain agencies. The act itself was the product of collaboration – it had broad bipartisan support from stakeholders on all sides including private energy corporations, conservation groups, and government officials.

Building on the momentum of the Clean Air – Clean Jobs Act, Governor Hickenlooper was quick to set forth a tone of collaboration. The Governor has continuously expanded on the goals set forth in the Act. He made clear that Colorado’s economy and environment depend on clean energy. With this in mind, the governor ensured that state officials collaborate to meet energy goals.

This tone of collaboration is enhanced by agency officials who see a general benefit in collaborating. Most of these agencies coordinate on a daily basis – sharing information and collaborating to solve complicated dilemmas. “Our jobs are to think through, beyond our spaces, what are the broader implications of a given proposal or issue…” A representative from the Colorado Energy Office, explained. “The end goal is to reach the best decision for all Coloradans and collaboration is the best way to do that.”

For instance, when the CDPHE considers a rule to set stricter emission standards for vehicles, it brings in many other agencies (often three or more) for consultation. The rule is refined in accordance with that input and consultation with other agencies continues throughout the process. This collaboration occurs despite the absence of a legislative mandate requiring cooperation.

Despite these successes, collaboration in Colorado is highly dependent on the preferences of agency actors and the governor. A new administration could enhance this collaborative framework, but it could also choose to appoint adversarial agency heads and set a tone of isolation. Or it could set an agenda that promotes adversarial interest within the agencies (as opposed to the shared interest in the Clean Air – Clean Jobs Act). It is this uncertainty which poses the biggest threat to Colorado’s collaborative environment.

Other states have taken note of this threat and implemented safeguards to ensure consistent collaboration. Some have merged agencies so that environmental and energy decisions are made by the same actors. For instance, Vermont streamlined the siting of wind power by housing all decision-making power in one agency. This agency is charged with balancing environmental concerns while ensuring economic benefits in promoting wind power. Vermont and other states with merged agencies have recognized that environmental concerns are the catalyst to energy policy.

Colorado’s Clean Air – Clean Jobs Act did well to bring agencies together in order to achieve the state’s energy and emission goals. The Act serves as a backstop to ensure there is a baseline of collaboration between certain agencies in reaching emission standards. It is certain today that the actors within these agencies go far beyond the Act’s mandate to reach the best energy and environmental decisions – whether this will be certain in the future is less evident. With this in mind, Colorado might consider strengthening its collaborative structure through additional state mandates or by merging agencies.

Austin Flanagan is a rising 3L at Colorado Law and a GWC Research Assistant.

2018 GWC Summer Conference What Lies Beneath: Reason to Care (and be Excited) About Groundwater Use and Management in the Southwest

Event Video

Presentations Day 1-Session 1

Gil Barth-Essential Science

Leonard Konikow-Western Groundwater

Sharon Megdal-The Governance Conundrum

Presentations Day 1-Session 2

Bonnie Colby-Groundwater Trading

Cleave Simpson-Rio Grande/San Luis Valley

Sam Routson-Diamond Valley

Mike Young-Diamond Valley

Sam Routson and Mike Young Documents

Diamond Valley Groundwater Management Plan

Sharing Groundwater

Unbundling Water Rights

Groundwater Sustainability Plan: Working Draft

Presentations Day 1-Session 3

Burke Griggs-Interstate Groundwater Compacts

Noah Hall-Mississippi v. Tennessee Blog Post

Heather Whiteman Runs Him-Agua Caliente Decision

Robert Adler-Groundwater Conduit

Presentations Day 2-Session 4

Reagan Waskom-South Platte

Jim Holway- AZ Groundwater

Stefanie Morris-California’s SGMA

Presentations Day 2-Session 5

Dominic DiGiulio-O&G and Groundwater in Pavillion, WY

Dave Kreamer-Uranium Mining in the Colorado Plateau

Holly Richter-San Pedro River

Eloise Kendy-Colorado River Delta Restoration

Presentations Day 2-Session 6

Amy Steinfeld-Cadiz on the Fast Track

Courtney Hemenway-ASR Applications in the South Denver Metro

Stephanie Pincetl-Groundwater and a Sustainable L.A.

Scott Reinert-The El Paso Experience

 

“The Shock of the Real”: Twelve Law Students, Nine Days, and One Unforgettable Adventure By 2018 CU Law Graduate Amanda Biedermann

The 2018 Advanced Natural Resource Seminar students with GWC Executive Director Alice Madden

“Out there is a different world, older and greater and deeper by far than ours, a world which surrounds and sustains the little world of men as sea and sky surround and sustain a ship. The shock of the real . . . For a few moments we discover that nothing can be taken for granted . . . and our journey here on earth, able to see and touch and hear in the midst of tangible and mysterious things-in-themselves, is the most strange and daring of all adventures.”

Edward Abbey wrote this excerpted quote in his book, Desert Solitaire, fifty years ago; however, Abbey’s words still ring true today and capture the recent experience of a group of second and third year law students from the University of Colorado Law School, who embarked upon a memorable trip to the Colorado Plateau region over the 2018 spring semester break period. This field trip is a required part of the Advanced Natural Resources Seminar offered at CU Law for upper level law students. In this seminar, the students study historical, literary, and scientific materials and analyze current problems relating to natural resources law over the course of a semester. Each year the seminar focuses on a different area within the American public lands system, and culminates in a field trip to visit that location.

This year, the seminar group traveled to the Colorado Plateau region, which covers an estimated 140,000 square miles within western Colorado, northwestern New Mexico, southeastern Utah, and northern Arizona. This region is rich in cultural and biological diversity, containing numerous tribes and various ecosystems, as well as the greatest concentration of U.S. National Park Service units outside Washington, DC, including nine national parks and 18 national monuments. The seminar students ventured out of the classroom and into the wilderness to learn about the region’s intricate and interconnected issues relating to natural resources, energy, and environmental law. During the week and a half they spent together exploring this region, the students journeyed through four different states, meeting with a variety of legal experts and community leaders in the field to learn about differing perspectives regarding public land protection, tribal interests, wildlife management, and cultural preservation.

This trip came at an opportune time for the students to witness first-hand the complicated nature of public land management, as many of the public land areas and national monuments in Plateau states are under scrutiny by the federal government. The students observed this struggle first-hand as they met with a variety of professionals in the region, ranging from non-profit leaders committed to preserving and protecting public lands in their most natural state, to government officers from the Bureau of Land Management, who have been assigned the challenging task of balancing multiple uses of government land. The students also learned about the vital importance of tribal participation in public land management as they hiked their way through the Canyon of the Ancients National Monument, Comb Ridge (once a part of the originally-designated Bears Ears National Monument) and the Ute Mountain Ute Tribal Park, all of which are important sites for Native American tribes. In fact, a trip highlight for many of the students was an afternoon spent with Nicole Horseherder, a founding member of Black Mesa Water Coalition and member of Navajo Nation, who lead the students on an excursion through Navajo reservation land and discussed the various economic and environmental issues tribal members are facing in the region. Hiking through land now deprived of its main water source and interacting with the tribal members advocating against the commercial interests accused of taking the water, the students experienced emotions and thoughts that can never be truly developed within the confines of the classroom environment. While shocking, the injustices the students observed affirmed their commitment to their legal career paths and served as an inspiration to continue to advocate for vulnerable communities.

The students delved further into the complicated nature of competing interests by continuing their road trip to Northern Arizona to learn about both past challenges and future opportunities regarding the region’s energy sources by touring the Glen Canyon Dam, the Marble Canyon proposed dam site, and the soon-to-close Navajo Generating Station. During this stretch of the trip, the group spent several nights at Kane Ranch, a restored 19th century ranch house now owned by the Grand Canyon Trust, hiking around the Kaibab National Forest to observe sustainable grazing techniques and drought management methods. The trip culminated in a visit to witness and discuss the recent changes resulting from increased development around Moab and Canyonlands.

Reflecting back on their trip, the students have a new perspective on and appreciation for the historical issues of the Colorado Plateau, as well as a passion to help enact change to improve the future of this region. While many of the students came into the trip with extensive background knowledge regarding natural resources law and public land issues, the field trip afforded the students the opportunity to witness first-hand the effects of legal and policy decisions that are often made far away from the people and places they actually impact. Public land management is often convoluted and complex, with no easy or apparent solutions to difficult choices. However, these future leaders, now more than ever after their experiences on their field trip, understand the crucial importance of protecting these valuable areas so that others can have their own adventures in these special places and gain a new respect for America’s unique public land legacy.

Amanda Biedermann is a 2018 CU Law Graduate

Amid Coal-Plant Closures, Navajo Nation and Hopi Tribe Face Economic Transition By CU Law Student Lauren Sakin

Despite President Trump’s promise to end “the war on coal,” the Hopi and Navajo Nations are facing the inevitable transition away from a coal-dependent economy due to the upcoming closure of the Navajo Generating Station (NGS) and Kayenta Mine. The Trump administration maintains that its policies will revive coal. However, so far such efforts have achieved little success. The Federal Energy Regulatory Commission (FERC) rejected the administration’s proposal requiring utility companies to subsidize and stockpile coal. Tribes and communities across the country must therefore plan, whether sooner or later, for a future without conventional coal. Colorado Law Professor Sarah Krakoff has begun to explore these issues, which will form part of her continuing research agenda. Ideally, a future without NGS and Kayenta Mine would provide opportunities for the Navajo Nation and Hopi Tribe to diversify their economies while safeguarding their land and resources. The idea of a “Just Transition,” which would provide funding for lost revenue and jobs as well as a long-term plan to create an economically and environmentally sustainable economy, has gained traction in some quarters. Colorado Law and the GWC stand ready to provide research to support such a solution, if it is a path that the Tribes themselves choose.

What Does the Colorado Plateau Mean to the University of Colorado Law School?

Recently, Colorado Law students experienced first-hand NGS’s impacts on the Navajo Nation. GWC’s executive director, Alice Madden, taught a capstone course on the history, diversity, and natural resources of the region. The seminar included a week-long road-trip on the Colorado Plateau where students met tribal leaders, attorneys, and national parks managers. According to student Gregor MacGregor “meeting people who have to make the decision and live with the decision” allows University of Colorado law students to tie together law, policy, and the people it affects.

During the trip, students met with Navajo environmental activist Nicole Horseherder, who has been an integral part of advocating for a transition that will benefit the Navajo people and their lands. According to Nicole, “everybody is tethered to this [coal] plant. Because so much water is being used and so much of the resources are being dedicated to that plant, we can’t really do anything else.” Therefore, she sees her primary role as educating the Navajo community so that they can mobilize themselves towards a self-sufficient future without NGS. Nicole’s vision is that by moving NGS to renewables, the Navajo will regain control of valuable natural resources needed for local development.

A Proposed Transition to Clean Energy.

Currently, the most environmentally and economically sustainable transition option is to replace NGS with sources of renewable energy. The topography of the region combined with the declining solar construction costs makes NGS a desirable location to install renewables. Navajo Nation President Russell Begaye has negotiated title to the rights of the transmission lines after the closure of NGS. These rights will allow the Navajo people to decide how they want to develop energy infrastructure on their land.

The initial construction and ongoing electricity generation of solar and wind energy facilities will increase the number of local jobs and replace some, though not all, of the lost tribal revenue. Careers in solar power are increasing nationwide and at a faster rate than the fossil fuel sector. Renewable energy projects on Navajo Nation that repurpose the use of the coal power transmission lines offer the Hopi and Navajo tribes an opportunity for economic and infrastructure development. If combined with transitional support from the federal government and a broader plan for a diversified economy, renewable projects could be an anchor for a sustainable future.

Utility-scale solar projects providing energy to the Navajo and Hopi tribes are already underway and providing significant economic activity. The Kayenta Solar Farm, owned by the Navajo Tribal Utility Authority (NTUA) and Salt River Project (SRP), opened in August 2017. The construction of the solar farm employed approximately 236 tribal members, paying over $5.2 million to the workforce and an estimated $15.6 million in revenue to the Navajo Nation. Additionally, SRP provided 4,700 hours of specialized solar utility construction training. In January, the owners agreed to build the second phase of the project. Hopefully, this is a promising first step to make Navajo and Hopi Nations clean energy producing Tribes.

A successful transition will start with the construction of renewable projects while the power-plant begins to scale back. Collaborative planning initiatives from tribal and state governments could hasten development and attract the business investment required to fund projects. The transition to renewable energy sources will not be simple. Funding will be difficult to obtain, and technological developments are still required to make renewables a stable source of electricity. However, the closure of NGS presents a perfect opportunity to implement these changes.

At this time, NGS closure looks inevitable, and the question to ask is how to accomplish environmental sustainability while establishing social and economic justice for the Navajo and Hopi? Optimistically, a successful and just transition in the four-corners will pave the way for coal communities across the country, whether in Indian country or otherwise. The Getches-Wilkinson Center, Colorado Law, and our faculty and students hope to be a part of this larger Just Transition movement.

Lauren Sakin is a rising 2L at Colorado Law, and a GWC Research Assistant

Advising the EPA: The Insidious Undoing of Expert Government By CU Law Professor Sharon B. Jacobs

This post originally appeared on the Harvard Law Review Blog

The modern administrative state was built on the promise of expertise. As James Landis argued in his New Deal-era defense of the bureaucracy, expert agencies are needed to effectively oversee the behavior of sophisticated industry actors. Consistent with Landis’s vision, government agencies today are populated by subject matter experts. Thus, the Environmental Protection Agency (EPA) employs biologists and chemists while the Nuclear Regulatory Commission employs physicists and reactor systems engineers. Increasingly, agencies have also sought the advice of outside experts. These outside experts form advisory committees, task forces, work groups, and boards that review agencies’ internal decisions and provide recommendations and advice.

The federal government now makes use of upwards of 1,000 such committees. Sheila Jasanoff has called them a “fifth branch” of government. In the 1970s, congressional concern about the proliferation of advisory committees produced the Federal Advisory Committee Act of 1972 (FACA). FACA imposes reporting and transparency requirements on federal advisory committees. In addition, the Act states that advisory committees should be “fairly balanced in terms of the points of view represented and the functions to be performed.”

On Halloween, EPA Administrator Scott Pruitt issued a new directive entitled “Strengthening and Improving Membership on EPA Federal Advisory Committees.” The directive states that no member of an EPA advisory committee shall “be currently in receipt of EPA grants” or be “in a position that otherwise would reap substantial direct benefit from an EPA grant.” A memorandum accompanying the directive explained that direct receipt of EPA grants “can create the appearance or reality of potential interference” with members’ abilities to “independently and objectively” serve.

That justification is superficially appealing. But the directive’s outward concern with impartiality masks an effort to rebalance advisory committee membership to favor industry representatives over academics. By preventing EPA grantees from serving on advisory committees, the agency is likely disqualifying some of the country’s ablest scientists. Those dismissed from the EPA’s advisory commissions in the wake of the directive include researchers from Harvard, Stanford, and the University of Southern California. In contrast to academics, industry scientists need not seek EPA grants because their research is funded by their employers. They are thus unaffected by the directive. Industry membership on advisory boards raises impartiality concerns of its own. But Administrator Pruitt’s directive ignores this source of potential bias completely.

Moreover, the insinuation that receiving a grant from the EPA renders an advisory board member impartial is misleading. The EPA estimates that in the past three years, members of its Science Advisory Board, Clean Air Scientific Advisory Committee, and Board of Scientific Counselors received a combined total of more than $77 million in direct EPA grant funding. But that figure, by itself, proves nothing. The EPA already employs a conflicts screening process. According to one former member of EPA’s Scientific Advisory Board, advisory commission members are given a conflict of interest form to fill out for each separate issue discussed. If a conflict is identified, the member is immediately recused.

Disallowing advisory committee service by agency grant recipients will not necessarily lead to ideological “stacking” of committees. But the directive’s application has already resulted in more substantial industry membership on EPA advisory committees. There have also been committee leadership changes. Dr. Peter Thorne, whose University of Iowa webpage identifies him as a co-investigator on an EPA-funded study, was recently replaced as chair of the EPA’s Science Advisory Board by Dr. Michael Honeycutt, lead toxicologist for the Texas Commission on Environmental Quality. Dr. Honeycutt has broken with the scientific consensus by questioning the need to reduce smog levels. One of his arguments? Most people spend 90% of their time inside, where smog is less likely to affect them.

Administrator Pruitt’s directive is of concern to those who value advisory committees’ scientific integrity (and some lawmakers have already expressed their displeasure). But is it illegal? Any legal challenge must overcome several hurdles. The first, and most easily surmounted, is that the APA limits judicial review to “final agency action.” The EPA’s directive is likely final under Bennet v. Spear, which requires that the action “mark the ‘consummation’ of the agency’s decisionmaking process” and be one “from which ‘legal consequences will flow.’” As the D.C. Circuit has held, even informal guidance like this directive can be deemed final when it reflects a settled agency position. This directive is binding on its face and has immediate legal consequences for advisory committee members. While Administrator Pruitt was careful to note that he was “reserv[ing] the right to exercise my discretion to depart from the procedures set forth in this directive,” that statement is probably not enough to deprive the directive of finality.

The second hurdle is Article III standing. Under the governing test, plaintiffs must demonstrate to a court’s satisfaction that the directive has caused them a cognizable injury. They must also show that a verdict in their favor will redress that injury, at least in part. The most obvious candidates to challenge the directive are advisory board members who were dismissed due to their EPA grant funding or EPA grant recipients who were potential appointees prior to the directive’s issuance. As the 10th Circuit has explained, “Standing predicated upon denial of a fair opportunity to compete for a position or contract is well established.”. Alternatively, environmental groups like the NRDC and the Sierra Club may be able to invoke the ideas of organizational standing and procedural injury to challenge the directive on their members’ behalf. The Fifth Circuit has held that entities with an interest in the accuracy of particular agency decisions have standing to challenge advisory committee irregularities under FACA, although in that case the challenge came from regulated industry rather than from regulatory beneficiaries.

On the merits, one possible challenge to the directive is that it violates FACA’s requirement that advisory committees be “fairly balanced.” As one commentator has noted, the courts are divided on whether this requirement is justiciable. The Ninth Circuit observed that FACA does not “articulate what perspectives must be considered when determining if the advisory committee is fairly balanced,” and thus provides no meaningful standard for judicial review. However, the D.C. Circuit, Tenth Circuit, and Fifth Circuit have reached the opposite conclusion. In a case called Cargill v. United States, the Fifth Circuit not only found the “fairly balanced” requirement justiciable, but it also found that appointing agency grantees to serve on advisory boards at the Department of Health and Human Services (HHS) was not a violation of FACA. “Moreover,” the court concluded, “if HHS were required to exclude from peer review committees all scientists who somehow had been affiliated with the department, it would have to eliminate many of those most qualified to give advice.”

Per Cargill, therefore, status as a grant recipient is not disqualifying under FACA. But arguing that the EPA is not permitted to disqualify grant recipients is much harder. FACA’s “fairly balanced” edict is worded broadly enough to give agencies significant latitude in selecting advisory commission members. A facial challenge to EPA’s directive would likely fail, since there undoubtedly exist qualified members of academia not in receipt of EPA grants. More likely to succeed are as-applied challenges to the makeup of specific EPA advisory committees on the basis of industry over-representation. There is some evidence, however, that courts are inclined to defer to an agency’s selection of advisory committee members.

Plaintiffs might also challenge the directive as arbitrary and capricious under the Administrative Procedure Act (APA) or as a violation of FACA. Courts assessing agency action under the APA’s arbitrary and capricious standard ask, in part, whether an agency has articulated a rational connection between the facts found and the choice made. There is a powerful argument here that EPA’s focus on one version of independence (from the EPA itself) while ignoring another version of independence (from regulated industry) was arbitrary. It could also be argued that the equation of grant receipt with bias is itself an arbitrary conclusion, especially in light of the Fifth Circuit’s Cargill opinion.

Because Administrator Pruitt’s directive was announced on Halloween, it seems fitting to invoke the Celtic origins of that holiday, on which Celtic druids would make predictions about the future. My gloomy prediction is that this directive is not the last blow to agency expertise and unbiased science that we will see from the Pruitt EPA. Advocates should pursue judicial solutions where possible, but the surest remedy for such violations is political. Scott Pruitt is unfit to lead the EPA and should be replaced at the earliest possible opportunity.

Sharon B. Jacobs is a Professor at CU Law and a member of the GWC Board.

 

The Looming Battle over the Antiquities Act By CU Law Professor Mark Squillace

This post originally appeared on the Harvard Law Review Blog

On December 4, 2017, President Trump announced his long-anticipated decisions to shrink two major national monuments in southern Utah. Trump shrunk the Bears Ears National Monument designated by President Obama at the end of 2016 from 1.35 million acres to 201,786 acres, a reduction of about 85%. The Grand Staircase Escalante National Monument was reduced by approximately 46%, from 1.87 million acres to a little more than one million acres. And more reductions at other monuments are expected to follow. In terms of reversing public land protections, these decisions are unprecedented in scale. Nothing comes even close.

Trump’s decisions have set the table for the most dramatic legal fight over the Antiquities Act since the Supreme Court unanimously upheld President Theodore Roosevelt’s 1908 designation of the Grand Canyon National Monument in 1920. So, how did we get here, and how is this battle likely to play out?

The History of the Antiquities Act

The original impetus for the Antiquities Act was a concern about looting of ancient artifacts from public lands. The looters were not only pothunters but also included major museums such as the American Museum of Natural History. In 1900, under pressure from archaeologists and their societies, three separate bills were introduced into the House Committee on Public Lands chaired by Iowa congressman John Lacey. These bills ranged from the very broad to the quite narrow. While all were designed to protect ancient artifacts, one would have allowed the President to set aside lands for their scenic beauty or to protect natural wonders, another would have simply made it a federal crime for individuals to harm antiquities on public lands, and the last would only have granted the Secretary of the Interior the power to set aside small tracts of public lands not exceeding 320 acres. Lacey sent these bills to Interior for review. Interior supported congressional efforts to stop looting, but the agency favored a broader bill that would have authorized the President to designate national parks “for their scenic beauties [and] natural wonders,” as well as to protect ancient ruins and “other objects of scientific or historic interest.” Congressman Lacey and some members of his committee pushed back against the Interior bill and over several years a compromise emerged that removed the authority to designate national parks, but retained the language from the original Interior proposal allowing the president to designate objects of historic or scientific interest. See generally, Mark Squillace, The Monumental Legacy of the Antiquities Act of 1906, 37 Ga. L. Rev. 473, 478–85 (2003) (hereafter, Monumental Legacy).

As enacted, the Antiquities Act authorizes the President—

to declare by public proclamation historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest that are situated upon the lands owned or controlled by the Government of the United States to be national monuments, and may reserve as a part thereof parcels of land, the limits of which in all cases shall be confined to the smallest area compatible with proper care and management of the objects to be protected. . . .

54 U.S.C. § 320301.

Theodore Roosevelt was President when Congress passed the Antiquities Act in 1906, and he wasted no time employing the new law, designating four national monuments that year, five more in 1907, and eight more in 1908 and 1909 before he left office. Monumental Legacy at 489–91. Perhaps the most important of these was the more than 800,000-acre Grand Canyon National Monument designated in 1908. Grand Canyon was important not only because it protected one of our most prized national treasures but also because it spawned the lawsuit that sustained the President’s power to designate large landscapes as national monuments.

Ralph Henry Cameron was a mining claimant and Arizona politician who was using the General Mining Law of 1872 to exploit tourists by charging them a dollar to pass through his mining claims on the Bright Angel Trail. Cameron’s enterprise ran afoul of Santa Fe Railroad, which had opened a hotel on the south rim of the Grand Canyon. Complaints from its guests who wanted to hike the trail down to the Colorado River prompted the Railroad to ask Interior to investigate Cameron’s claims. In 1909, just one year after the monument had been designated, Interior Secretary James Garfield determined that Cameron’s claims were not valid. Nonetheless, Cameron refused to vacate the land, however, and the federal government subsequently sued to evict him. Cameron responded by asserting that his mining claims were valid and, further, that the President lacked the authority to designate the Grand Canyon under the Antiquities Act. Monumental Legacy at 490–92. In a unanimous decision in Cameron v. United States, the Supreme Court disagreed, noting that the Grand Canyon was plainly an object of scientific interest as “it is the greatest eroded canyon in the United States if not the world.”

Over its long history, the Antiquities Act has been used many times by Republican and Democratic presidents to protect both small historic sites, as well as large tracts of public land. Although presidents may not designate national parks, Congress has repeatedly signaled its support for these presidential monuments by redesignating many of the most remarkable ones as national parks. In addition to the Grand Canyon, President Roosevelt set aside the Mt. Olympus National Monument, which is now part of Olympic National Park. Zion National Park was first protected by William Howard Taft as Mukuntuweap National Monument. Woodrow Wilson established Sieur Du Monts, now Acadia National Park. William Harding set aside Bryce Canyon, Calvin Coolidge protected Glacier Bay, and Herbert Hoover set aside Saguaro, Death Valley, and Arches — all now protected as national parks. Monumental Legacy at 493-494.

Decades of Disagreement

Despite their enormous popularity with the general public, national monument designations have historically attracted their fair share of controversy. Woodrow Wilson cut the more than 600,000 acre Mt. Olympus National Monument nearly in half, allegedly to provide timber to support the war effort, but almost certainly also to appease the timber industry and Forest Service, which had opposed the monument. See Carten Lien, Olympic Battleground: Creating and Defending Olympic National Park 51–52 (2000). Wilson’s decision created an outcry from the nascent environmental movement and ultimately, much of that land was restored to protected status when Congress created the Olympic National Park in 1938.

When Franklin Roosevelt created the Jackson Hole National Monument, now part of the Grand Teton National Park, local politicians were outraged. A young Teton County Commissioner, Cliff Hansen, who later became a U.S. Senator, drove an illegal cattle drive through the new monument and helped persuade congress to adopt the only amendment ever enacted to the Antiquities Act, banning new monuments in the State of Wyoming. 54 U.S.C. § 320301(d). Much later, Hansen and other local opponents of the monument acknowledged that their opposition to the monument had been a mistake. Monumental Legacy at 498, n.159.

Observed from this backdrop, the current controversy over the two big monuments in Utah, and several others that appear to be in Trump’s sights, is not especially new. What is different today is the commitment of monument supporters to fight to preserve the public land protections that the original monuments represent. On the very day of Trump’s announcements two lawsuits were filed over the Bears Ears decision — one by local native tribes and another by environmental groups. More lawsuits followed over both Bears Ears and Grand Staircase-Escalante. At the time of this writing, three lawsuits over Bears Ears were all in front of Judge Chutkan in the Federal District Court for the District of Columbia. A lawsuit filed by the Grand Staircase-Escalante Partners over the Grand Staircase-Escalante decision has been assigned to Judge Sullivan in the same court.

Key Questions Facing Courts Today

These cases raise fascinating legal questions involving both process and substance. On the process side is the fundamental question of how the court should approach the litigation. The Supreme Court has made clear that the President is not an agency for purposes of the Administrative Procedure Act, and thus the court lacks a clear roadmap for how to proceed with the case. Two particular questions stand out. First, what is the standard of review in such cases? And second, should the courts resolve these cases on the administrative record made to support the President’s decisions, or should courts hold an evidentiary hearing to ascertain whether the proclamations are consistent with the requirements of the law?

Regarding the scope of review, it seems likely that the court will follow the lead of the federal district court in Wyoming in a pre-APA case that challenged the Jackson Hole National Monument. In Wyoming v. Franke, the court found that it had “a limited jurisdiction to investigate and determine whether or not the Proclamation is an arbitrary and capricious exercise of power under the Antiquities Act so as to be outside of the scope and purpose of that Act . . . .” The court admitted that “if a monument were to be created on a bare stretch of sage-brush prairie in regard to which there was no substantial evidence that it contained objects of historic or scientific interest, . . . [it] would undoubtedly be arbitrary and capricious . . . . ” But the court found sufficient “evidence of experts and others as to . . . objects of historic and scientific interest” that it was bound to uphold the decision even if it did not fully agree with it. If one were to apply this standard to the original Grand Staircase and Bears Ears proclamations, then it seems likely that they would be found to comply with the law. Both proclamations contain a detailed description of the cultural, biological, geological, and historic resources that Presidents Clinton and Obama intended to protect. And, while a future President might reasonably disagree with these decisions, one would be hard pressed to describe the original decisions as arbitrary.

As for the record, President Clinton’s Secretary of the Interior Bruce Babbitt transmitted detailed memorandum to the President to support the original Grand Staircase-Escalante proclamation. President Obama’s Interior Secretary, Sally Jewell sent to the President a similar memorandum to support the Bears Ears proclamation. Although these memoranda were not released to the public, they laid out the case for the monuments, and included a comprehensive bibliography of sources deemed to support the monument designation. It does not appear that Secretary Zinke has made any effort to refute these memoranda, although he did prepare an undated memorandum for the President addressing 27 separate monuments that had been designated since 1996. So, the court could require and the parties could agree that these, along with any publicly released documents and any additional documents prepared by the Trump Administration, should be recognized as the administrative record for purposes of judicial review. This would obviate the need for a hearing on the original and subsequent proclamations, which could easily cascade out of control.

Somewhat surprisingly, the primary rationale put forth in the Trump proclamations for shrinking the Bears Ears and Grand Staircase-Escalante monuments was that the Obama and Clinton proclamations were not limited to the smallest area compatible with the protection of the objects identified in the original proclamations. This kind of reasoning is not necessarily new. In a 1938 opinion, Attorney General Cummings appears to use it to justify acquiescing to monument modifications, even as he found that the President lacked the authority to abolish a monument altogether. 39 U.S. Op. Atty. Gen. 185. But given the substantial mountain of evidence marshalled to support the original proclamations and the limited scope of judicial review suggested by Wyoming v. Franke, and likely to be followed in these new cases, the government will find it difficult to defend the new decision on the “smallest area compatible” grounds alone.

On the other hand, and notwithstanding the language in the new proclamations, Trump will likely argue that he has the authority to shrink a monument created by a predecessor irrespective of whether the original monument was valid. This is the legal issue that has captured the attention of legal scholars and commentators, at least since the day that Trump was elected.

I have previously argued, first in 2003, and more recently in a joint article published last year, that Presidents lack the authority to modify or revoke monuments decisions issued by their predecessors. The basic argument is straightforward. The Property Clause of the constitution gives Congress plenary authority over public lands. While the Antiquities Act may delegate power to the President to “reserve” public lands as national monuments, the Supreme Court has made clear that delegations of congressional power must be construed narrowly. And because the Antiquities Act says nothing of the authority to modify or revoke a reservation once made, the statute is properly construed to grant “one-way” authority.

Reinforcing this point is the sharp contrast between the Antiquities Act and other contemporaneous statutes such as the Forest Service Organic Administration Act and the Pickett Act of 1910. Both of these statutes authorized the President to withdraw public land for particular purposes and both gave the President the additional authority to revoke and/or modify these withdrawals. As Attorney General Cummings wrote in the 1938 opinion referenced earlier, “the Executive can no more destroy his own authorized work, without some other legislative sanction, than any other person can.”

Those who support presidential power to modify monuments claim that the power to reserve public lands as national monuments implicitly encompasses the power to reverse those decisions, just as presidents can modify and rescind executive orders and agencies can modify or rescind their regulations. But a President who issues or modifies an executive order is exercising direct executive power granted under Article II of the Constitution. And an agency that modifies or rescinds rules is doing so pursuant to the express rulemaking authority granted under the Administrative Procedure Act to “formulat[e], amend[], or repeal[] a rule.” They also point to the fact that Presidents have in the past modified monuments, as if past practice is enough to justify an otherwise illegal act. But because none of these decisions has ever faced a judicial challenge, their legality has never actually been tested. Moreover, until the recent decisions on Grand Staircase-Escalante and Bears Ears, no president has attempted to modify a monument since Congress enacted the Federal Land Policy and Management Act (“FLPMA”) in 1976. That turns out to be an important event for understanding the Antiquities Act.

FLPMA came about as a result of recommendations from the Public Land Law Review Commission in a report released in 1970. Among other things, that report recommended consolidating all of the public land withdrawal authorities, including the Antiquities Act, into a general withdrawal provision contained in the new law. While Congress accepted most of the Commission’s recommendations, it explicitly chose to retain the Antiquities Act, and it further made clear in the House Report on the final bill, that FLPMA “would … specifically reserve to the Congress the authority to modify and revoke withdrawals for national monuments created under the Antiquities Act.” H.R. Rep. 94-1163 (1976).

Critics complain that the legislative history of FLPMA cannot be used to interpret the Antiquities Act. This argument misses the mark for two reasons. First, the Antiquities Act is clear on its face. The gloss of FLPMA’s legislative history merely reinforces the most logical reading of the text of the statute. Second, while FLPMA does not amend the Antiquities Act, it was an important vehicle for reviewing and reconsidering all of the federal government’s authorities to withdraw and reserve public lands for particular purposes, including the Antiquities Act. Thus, debates around FLPMA should be understood and respected for reflecting Congress’ views about public land withdrawals generally, including its views on the continuing importance of the Antiquities Act as an instrument for furthering public lands policy.

While the technical legal arguments that favor a narrow reading of the President’s authority under the Antiquities Act are compelling, they risk obscuring the important policy reasons that might have persuaded Congress to limit the President’s Antiquities Act power in one direction. Federal public lands face constant risks of undue degradation by mining claimants and other mineral developers, by ranchers grazing livestock, and by off-road vehicle users, among others. The Antiquities Act allows a President to protect the status quo on public lands and prevent their further degradation until Congress decides to do something else with those lands. This one-way protection policy has worked remarkably well. While Congress has abolished several minor monuments over the years, it is telling that it has never abolished or shrunk any significant national monument. On the contrary, when Congress takes action on monuments, it is often to expand them and elevate their status to that of a national park.

Ultimately, of course, the last word on the myriad legal issues raised by the recent proclamations on Grand Staircase-Escalante and Bears Ears will come from the federal courts, and predicting the outcome of litigation is always fraught with risk. But even if the case is closer than I suspect it will be, the special place that our public lands hold in the hearts and minds of the American people will not likely be lost on the courts, and could, in the end, tip the scales in favor of their protection.

Mark Squillace is a CU Law Professor and a member of the GWC Board.

Saving Coal: A Tale of Two Agencies By CU Law Professor Sharon B. Jacobs

This post originally appeared on the Harvard Law Review Blog

Generating electricity from coal is a dirty business. Coal mining and power production release toxic heavy metals like mercury, respiratory irritants like sulfur dioxide and particulates, and large volumes of heat-trapping gases like carbon dioxide and methane. Nevertheless, the current administration has made no secret of its desire to “save” coal. Its latest effort involved a little-used statutory provision that allows an executive agency to dictate the focus of an independent regulator.

The effort began this past fall when Secretary Rick Perry’s Department of Energy (DOE) issued a Notice of Proposed Rulemaking (NOPR) that would provide guaranteed payments in wholesale energy markets to “fuel-secure” power plants. “Fuel-secure” plants were defined as those with a 90-day supply of fuel on-site, a requirement that only coal and nuclear power can satisfy. Troublingly, the DOE provided no legal justification for its proposed rule. Instead, it argued that the “resiliency” of the nation’s power grid was “threatened” by what it called the “premature retirement” of these power plants. Even that claim is vulnerable to critique. As the Rhodium Group has shown using the DOE’s own data, only 0.00007% of major electricity disruptions nation-wide from 2012–2016 were in fact caused by fuel supply problems.

Curiously, the DOE itself has no authority to finalize such a rule. Instead, its proposed rule directed the Federal Energy Regulatory Commission (FERC) — the ostensibly independent regulatory agency that oversees wholesale electricity markets — to finalize the proposal. So how can the DOE tell FERC what to do? It all goes back to the Department of Energy Organization Act of 1977. That Act created the DOE and transformed the Federal Power Commission into FERC. The Act placed FERC within the DOE but labeled it an “independent agency” and made its commissioners removable by the president only for “inefficiency, neglect of duty, or malfeasance in office.”

Section 403 of the Act, codified at 42 U.S.C. §7173(a), gave the Secretary of Energy authority “to propose rules, regulations, and statements of policy of general applicability with respect to any function within the jurisdiction of [Federal Energy Regulatory] Commission . . . .” The DOE first invoked this authority in 1979 during the nationwide fuel oil shortage, proposing a rule that would allow one-year authorizations to transport natural gas if the DOE certified the gas would be used to displace fuel oil. FERC issued a final rule based on this proposal. While the recent NOPR asserted that the DOE has “subsequently acted under section 403 on several occasions by publication of a NOPR in the federal register,” it did not elaborate. My search revealed only one additional invocation of the provision: in 1985, the DOE proposed a rule setting certain natural gas prices (which also resulted in publication of a final rule). Additionally, in 2000, the DOE considered invoking its authority to propose a rule imposing mandatory electric reliability standards. However, it did not ultimately propose such a rule.

According to 42 U.S.C. §7173(b), once the DOE proposes a rule, FERC must “consider and take final action” on the proposal “in an expeditious manner in accordance with such reasonable time limits as may be set by the Secretary for the completion of action. . . .” In this case, the DOE ordered FERC to take final action on the rule within 60 days. FERC subsequently sought, and the DOE granted, a one-month extension of the deadline.

The statute does not require FERC to adopt the Secretary’s proposal–only to take “final action.” This “final action” could be the adoption of the proposed rule without modification, adoption of a modified form of the proposal, or a decision not to adopt the proposed rule in any form. The DOE has limited recourse if FERC elects not to finalize its proposed rule. Pursuant to another section of the statute, “[t]he decision of the Commission involving any function within its jurisdiction . . . shall not be subject to further review by the Secretary or any officer or employee of the Department [of Energy].” On January 8th, two days before its deadline, FERC respectfully declined to finalize the DOE NOPR. There was no way FERC could have adopted this proposed rule with a straight face. FERC needs a reason to intervene in competitive power markets. Under the Federal Power Act, it must find that the existing market rules are unjust, unreasonable, discriminatory or preferential in order to invalidate them. Not only did the DOE fail to invoke any part of this triggering language, the defenses it did offer of its proposal rang hollow. Commissioner Richard Glick, in his concurrence, noted that the DOE’s “own staff Grid Study concluded that changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid’s reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid.”

Importantly, however, FERC did not frame its response as a loss for the DOE. While it declined to adopt the DOE’s proposed rule, it simultaneously initiated a new proceeding to look at resilience in wholesale power markets. In fact, the Commission seemed to go out of its way to placate the DOE. It stressed in the decision’s first paragraph that “we appreciate the Secretary reinforcing the resilience of the bulk power system as an important issue that warrants further attention.” Only a few sentences later, it assured the DOE that “[t]he resilience of the bulk power system will remain a priority of this Commission.” Commissioner Neil Chatterjee went further in his concurrence, “applaud[ing] Secretary Perry’s bold leadership in jump-starting a national conversation on this urgent challenge.”

What was FERC’s strategy in responding to the NOPR? Perhaps the Commission’s Republican majority, all of whom are recent appointees of President Trump, share Secretary Perry’s concerns about coal and nuclear retirements (or at least about wholesale market “resiliency”). While this particular proposal was indefensible, they might ultimately seek to adopt a better-considered, better-defended rule that identifies an actual problem with wholesale market pricing mechanisms and seeks to remedy it.

A second possibility is that none of the five FERC commissioners (with the possible exception of Commissioner Chatterjee) wish to adopt a rule pricing the “resiliency” attributes of power plants in wholesale markets. Despite this, they may want to keep on the DOE’s good side. FERC must have been aware that the media would characterize its failure to adopt the DOE’s proposal as a loss for the administration. Here are just a few of the headlines that followed FERC’s denial: “Perry says NOPR; FERC Says Nope (To Propping Up Coal) (Forbes); “Rick Perry’s Proposed Coal Bailout Just Died an Unceremonious Death: FERC says “nope” to the NOPR” (Vox); “Critics slam Perry after FERC blocks his ‘crazy Hail Mary’” (Greenwire). FERC may have softened its denial in an effort to mitigate this negative coverage. As I have written elsewhere, even independent regulatory commissions must conserve political capital. FERC may be exercising what Alexander Bickel called the “passive virtues” — placating the DOE in order to shield itself from greater scrutiny and interference.

Secretary Perry has already threatened to pursue other options under the Department of Energy Organization Act, the Federal Power Act and other authorities to support coal plants. Consider this scenario: nothing technically prevents the DOE from invoking Section 403(a) over and over again, monopolizing FERC’s agenda and preventing it from getting any other work done. Although the provision has been invoked infrequently in the past, this is an administration that seems determined to buck convention. The prospect of the provision’s more regular use, coupled with DOE’s abuse of its 403(a) authority in issuing this legally indefensible proposal, suggests that 403(a) has outlived its usefulness. While it may have been helpful as the fledgling agencies sought to understand and clarify their respective powers in the aftermath of reorganization, today its risks outweigh its benefits. It permits an executive agency headed by a member of the president’s cabinet (DOE) to set the agenda for an independent, expert regulator (FERC). Let us hope this is the last we will see of it.

Sharon B. Jacobs is a Professor at CU Law and a member of the GWC Board.

Can Tribes and Environmental Groups Ensure Agencies Properly Evaluate Private Interests on Public Lands? By Getches-Wyss Fellow, Michelle White

After a long history of disposal and extractive exploitation on federal public lands, Congress codified protection of broader public values by passing comprehensive reform in the Federal Lands Policy and Management Act (FLPMA) of 1976. A recent decision from the Ninth Circuit calls into question the ability of parties with environmental interests to ensure public lands agencies properly evaluate private economic interests on public lands that may pre-date FLPMA.

Three public lands professors from the University of Colorado Law, Sarah Krakoff, Mark Squillace and Charles Wilkinson, signed on to an amicus brief supporting a petition by the Grand Canyon Trust (GCT) for en banc review of a Ninth Circuit decision. An Arizona district court and Ninth Circuit panel denied the GCT and Havasupai Tribe standing to challenge the Forest Service’s decision to allow a uranium mine to operate on public land withdrawn by Secretary Salazar. The brief, signed by Eric Biber of UC Berkeley, expressed concern that the original decision made several fundamental legal errors that could have far-reaching effects on standing, particularly in the public lands and environmental law context.

As discussed in the Ninth Circuit’s opinion upholding the Secretary’s authority to make the withdrawal, uranium mining was popular in the United States in the late 1970s through early 1980s. A decrease in demand in the 1990s caused the closure of many Arizona mines. However, a spike in prices recently rekindled interest in the deposits and former mines surrounding the Grand Canyon National Park. As of 2009, over 10,000 mining claims had been located around the Grand Canyon National Park. In response to renewed interest in uranium, then Secretary of the Interior Ken Salazar began a process to determine if he should exercise authority under the Federal Land Policy and Management Act (FLPMA) and withdraw land around the Grand Canyon from operation of the Mining Law of 1872.

In January 2012, after public comment and publication of an Environmental Impact Statement, the Secretary issued a Record of Decision (ROD) withdrawing 1,006,545 acres of federal land. The withdrawal protected the Grand Canyon’s watershed from new mining activities and allow time for research on potential adverse impacts from mining activities. In order to conduct uranium mining on the withdrawn lands, a miner must have “valid existing rights.” Subsequently, the GCT, along with the Havasupai Tribe and several environmental non-profits, challenged a Forest Service determination that a particular uranium mine, shuttered since 1986, had valid existing rights and could resume mining operations on the withdrawn land.

Affirming the district court, the Ninth Circuit denied petitioners’ standing to challenge the Forest Service’s determination under the “zone-of-interest” test. The circuit held: (1) the GCT’s claim arose under the Mining Law, not FLPMA, and (2) because the Mining Law serves interests that “are frankly economic,” the GCT’s environmental and recreational interests did not meet the zone-of-interest test. Therefore, the panel denied the GCT standing. Amici (Environmental and Natural Resource Law Professors), filed a brief supporting en banc review, expressing concern about the panel’s zone-of-interest analysis.

Amici argued that the panel erred by misstating the GCT’s cause of action and using an overly restrictive view of the interests sufficient to meet a zone-of-interest test. The first error is particularly vexing. FLPMA, not the Mining Law, gives the Secretary withdrawal authority and limits that authority from affecting valid existing rights. If a miner continued to mine on withdrawn lands without valid existing rights, FLPMA would be violated, not the Mining Law. The Forest Service, by allowing mining on withdrawn land in absence of valid existing rights, would violate its duties under FLPMA, not the Mining Law. Despite this reality, and citing to no authority, the panel concluded that because FLPMA does not define “valid existing right,” the GCT’s claim arose under the Mining Law. Amici pointed out that statutes commonly refer to and borrow terms from other statutes, but that does not transform the cause of action to the secondary statute. In essence, the panel’s decision focused on how mining rights are created while ignoring the focus of the GCT’s claim – how mining rights are limited. 

Second, analyzing what satisfies the zone-of-interest test under the Mining Law, the panel recognized that limitations on mining rights protect the interests of those with competing claims. But, the panel differentiated between property interests and environmental interests and held the limitations did not protect environmental interests. This holding ignored the Supreme Court’s controlling zone-of-interest precedent, Data Processing. From Data Processing on, the Supreme Court has repeatedly and explicitly held that Congress need not have had in mind the exact interests of those affected by the statutory limitation. Rather, plaintiffs can share Congress’s interest in enforcing the limitation, so long as they meet other traditional requirements of standing.

If the panel’s opinion stands, it may allow parties to question opponent’s standing in a variety of public lands lawsuits. For example, FLPMA, the Wilderness Act, and the Wild and Scenic River Act are all statutes enacted by Congress to protect interests in public lands that are not private and economic, and all preserve valid existing rights. The panel’s opinion appears to make it impossible for a member of the public to ensure agencies properly preserve the public interests contained in FLPMA in situations where they conflict with private, economic rights that may predate the statutory protection of public values. It is unclear exactly how broad the negative effects from the opinion may be; however, from the line of cases starting with Data Processing, the financial industry could also be impacted. As argued by Amici, the holding conflicts with Supreme Court and Ninth Circuit precedent in an area of law that is already rife with confusion, and is therefore appropriate for en banc review.