*Erika Spanton

The United States District Court for the Western District of Washington and Washington Pollution Control Hearings Board recently ruled that in the context of transportation facilities, the scope of Washington’s former 2015 and current 2020 Industrial Stormwater General Permit (ISGP) are limited to only the portions of the facility involved in specified auxiliary operations, not the entire transportation facility. 

The decisions are a rejection of Ecology’s position and an earlier Western District of Washington ruling.  The ISGP’s clarified scope under these recent decisions can be significant for many transportations facilities, resulting in modified regulated areas and lower compliance costs.

APM Terminals Tacoma Decision

On a motion for summary judgment, the United States District Court for the Western District of Washington in Puget Soundkeeper Alliance v. APM Terminals Tacoma, LLC, No. 3:17-cv-055016 BHS, 2020 WL 6445825, 2020 U.S. Dist. LEXIS 205576 (W.D. Wash. Nov. 3, 2020) ruled that the scope of Washington’s 2020 ISGP in the context of transportation facilities is limited to stormwater discharges from “[o]nly those portions of the facility that are either involved in vehicle maintenance (including vehicle rehabilitation, mechanical repairs, painting, fueling, and lubrication), equipment cleaning operations, airport deicing operations, or which are otherwise” specifically identified under federal regulations as “associated with industrial activity,” not the entire transportation facility.^[1]

In 2017, Puget Soundkeeper Alliance (PSA) brought a citizen suit under the Clean Water Act^[2] (CWA) against the Port of Tacoma (the Port), among other parties. Under its third amended complaint, PSA alleged that the Port was in violation of the 2015 ISGP and a related Agreed Order with the Department of Ecology (Ecology). Some of PSA’s specific claims centered on whether stormwater discharges from the wharf portion of the property were regulated by the ISGP. The Port moved for summary judgment, arguing that stormwater discharges from the wharf were not associated with industrial activities as defined under the 2015 ISGP and therefore were outside the scope of regulated stormwater discharges.

Section 301 of the CWA generally prohibits the discharge of a pollutant from a point source to a water of the United States without a National Pollutant Discharge Elimination System (NPDES) permit (or in the case of dredged or fill material a Section 404 permit).^[3] Despite section 301’s broad prohibition, federal CWA regulations only require stormwater discharges associated with specific categories of industrial activity set forth at 40 C.F.R. § 122.26(b)(14)(i)–(xi) to be covered under a permit.^[4] Relevant in this case was the following category:

Transportation facilities classified as Standard Industrial Classifications 40, 41, 42 (except 4221-25), 43, 44, 45, and 5171 which have vehicle maintenance shops, equipment cleaning operations, or airport deicing operations. Only those portions of the facility that are either involved in vehicle maintenance (including vehicle rehabilitation, mechanical repairs, painting, fueling, and lubrication), equipment cleaning operations, airport deicing operations, or which are otherwise identified under paragraphs (b)(14) (i)–(vii) or (ix)–(xi) of this section are associated with industrial activity.^[5]

In Washington, authority for administering the NDPES program has been delegated to Ecology by the Environmental Protection Agency (EPA).^[6] As issued by Ecology, the ISGP sets forth a number of requirements applicable to stormwater discharges covered by the permit. On request from the district court, Ecology provided an amicus brief supporting PSA’s position regarding the scope of covered activities, arguing that the permit applied to the entire footprint of the facility and not just the areas where transportation activities occur.^[7]

The district court, however, rejected Ecology and PSA’s position, and determined that the plain language of the ISGP unambiguously limited the scope of transportation facility regulation to the scope of the federal regulations—i.e., to only those portions of the facility that are involved in vehicle maintenance, including vehicle rehabilitation, mechanical repairs, painting, fueling, and lubrication, equipment cleaning operations, and airport deicing operations—and not the entire facility, fence line-to-fence line.^[8] The district court further concluded that because no regulated industrial activities occurred on the wharf, PSA’s claims pertaining to the same should be dismissed.^[9]

Puget Soundkeeper Alliance v. Ecology Decision

The district court’s above opinion appears to conflict with an earlier decision under the 2010 ISGP, Puget Soundkeeper Alliance v. BNSF Railway Co.,No. 2:09-cv-1087-JCC, (W.D. Wash. Apr. 11, 2011), in which the district court ruled on reconsideration that the 2010 ISGP did in fact regulate transportation facilities beyond vehicle maintenance areas, equipment cleaning operations, and airport deicing operations.^[10] Unlike in APM Terminals, the district court in BNSF Railway determined the plain language of the 2020 ISGP was ambiguous as to whether Ecology intended to regulate activities beyond the scope of the federal regulation.^[11] The court then looked to extrinsic evidence to conclude that Ecology intended an expanded scope.^[12]

The PCHB addressed this apparent conflict when ruling on a motion for summary judgment in Puget Soundkeeper Alliance v. Ecology, finding the “APM Terminals analysis more persuasive” and rejecting the analysis applied in BNSF Railway.^[13] Following an analysis similar to APM Terminals, the PCHB rejected Ecology’s argument that the 2020 ISGP permit expanded the scope of coverage to entire transportation facilities and ruled that the plain language of the 2020 ISGP clearly limits the scope of coverage for transportation facilities to the same scope confirmed in APM Terminals.

Impact of the Decisions

It remains to be seen if the PCHB or courts will continue to find APM Terminals more persuasive and whether Ecology will seek to more clearly expand the reach of the ISGP as applied to transportation facilities. Ecology’s authority to increase the scope of regulated transportation sector stormwater discharges is uncertain. If Ecology pursues that option, the expansion may be subject to legal challenges.

The decisions may also impact the scope of purported regulated stormwater discharges in other jurisdictions as well. For example, Oregon’s recently reissued 2021 industrial stormwater general permit deviates from prior permit versions by attempting to regulate all transportation sector stormwater discharges—not just those associated with vehicle maintenance shops, equipment cleaning operations, or airport deicing operations. In doing so, Oregon’s Department of Environmental Quality (DEQ) reasoned that “Washington State Ecology’s industrial stormwater general permit also regulates the entire footprint of industrial facilities.” However, that support for Oregon’s change in the scope of its industrial stormwater general permit no longer stands. It remains to be seen if DEQ will reconsider and/or entities will challenge the expanded scope in light of Washington’s recent decisions.

*Erika Spanton is an attorney at Beveridge & Diamond, P.C. in  Seattle, and  represents clients in environmental litigation matters, including climate change lawsuits, Clean Water Act citizen suits, and actions under state water quality laws, CERCLA, and state Superfund statutes. Her regulatory practice focuses on water matters, including stormwater regulation, SPCC compliance, fisheries, and aquaculture.

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[1] Puget Soundkeeper All. v. APM Terminals, 2020 U.S. Dist. LEXIS 205576 at*29.

[2] See 33 U.S.C. § 1301 et seq.; 33 U.S.C. § 1365 (Citizen Suit provisions).

[3] See 33 U.S.C. § 1311(a).

[4] This is true unless the discharges qualify for a no exposure certification or other exemption.

[5] 40 C.F.R. § 122.26(b)(14)(viii). The regulations provide that for facilities with 4221-4225 Standard Industrial Classifications, permits are required regardless of whether there are the above-mentioned auxiliary operations or not.  Id. at § 122.26(b)(14)(xi).

[6] Puget Soundkeeper All. v. APM Terminals Tacoma, LLC, 2020 U.S. Dist. LEXIS 205576 at *8.

[7] Id. at *26.

[8] Id. at *29.

[9] Id.

[10] Puget Soundkeeper All. v. BNSF Railway Co. slip op. at *2.

[11] Id. at *2–3.

[12] Id. at *3.

[13] PCHB No. 19-089c, at 18 (Mar. 23, 2021).

Molly Barker and Ankur Tohan*

Carbon regulation in Washington is about to get more complicated. In March 2021, the Washington State Department of Ecology (DOE) issued a conceptual framework^[1] and draft rulemaking language^[2] for public comment on Greenhouse Gas Assessments for Projects (the “GAP Rule”).^[3] The release of the GAP Rule may—as a result of providing the first framework of its kind in the state for evaluating carbon footprints on major industrial projects—lay the groundwork for more enforceable carbon regulations. The GAP Rule may also increase competition on low carbon project design or may prompt the allocation of more corporate dollars toward mandated mitigation measures.

Applicability and Standardized Criteria

The GAP Rule is intended to standardize criteria regulators and lead agencies use to evaluate industrial and fossil fuel projects.^[4]  The GAP Rule’s criteria only apply to either (1) new projects or facilities, or (2) changes to existing facilities. To trigger the application GAP Rule criteria, an emission threshold of 10,000 metric tons of carbon dioxide equivalent or more per year must be met. Notably, the GAP Rule will not apply to housing development projects, highway and road projects, passenger rail projects, projects that meet a categorical exemption under the Washington State Environmental Policy Act (SEPA), projects that have already completed SEPA environmental review, and non-project proposals (like rulemaking, policies, or development regulations).^[5] Once threshold criteria are met, regulators and lead agencies will use standardized benchmarks to assess project impacts. These criteria include ascertaining global warming potential, calculating energy consumption and generation, calculating lifecycle emissions, and identifying methods for carbon mitigation of a given project.^[6] The GAP Rule, however, will not determine whether a particular project should be approved by the regulators, as that falls outside the scope of the purpose of the GAP Rule.

Components of GAP Rule

Operation of the GAP Rule is intended to include three steps. The first is the initial screening process, which determines whether the rule applies to a facility based on its potential to emit greenhouse gases (GHGs). The second step is an environmental assessment (EA), which includes (i) a facility analysis, (ii) a life cycle analysis, and (iii) an energy analysis. The facility analysis assesses on-site emissions of the facility at the core project infrastructure (including construction, operation and decommissioning); the life cycle analysis (LCA) evaluates the facility’s actual emissions, including inputs and outputs both upstream and downstream; the energy analysis reviews how the project may change energy flow, use, supply, output or load. The third step involves developing a mitigation plan that explains what offsetting measures will be taken based on the findings in the EA report.^[7]

The GAP Rule is unique, in part, because of the LCA and energy analysis undertaken under the EA. The LCA is geographically far reaching: the upstream boundary captures the point of resource extraction or acquisition within its emissions evaluation, and the downstream boundary captures either the point of combustion (if the output is an energy product) or the point of first potential use (if the output is a non-energy product). The energy analysis is more qualitative than the LCA in that it evaluates if the project will create a new type or form of an energy supply or a new route of an existing energy supply.^[8]

Finally, the mitigation plan is intended to quantify a certain amount of GHG emissions to be mitigated per year. This calculation will be based on the GHG footprint of the project as determined in the EA. Mitigation will be allowed through purchasing offsets through pre-approved carbon markets or through funding projects directly. If the latter mitigation approach is chosen, the mitigation project must have a nexus to the proposed project and must prioritize either minority communities of color, low-income communities, tribal communities, or communities disproportionately affected by climate change or otherwise affected by the project. The mitigation cannot be part of the proposed project’s original design and operational plan.^[9]

Impact of GAP Rule

The GAP Rule will impact the SEPA review process and it will provide a more standardized and expansive set of tools from which to evaluate a project’s carbon footprint.  Additionally, the GAP Rule may ultimately necessitate a separate permit from DOE that could be issued following a Mitigated Determination of Nonsignificance or following a full EIS.

Outstanding Questions Remain

There remain uncertainties surrounding implementation of the proposed Gap Rule. For example, should out-of-state GHG emissions associated with projects be included in EAs? And should out-of-state mitigation measures be allowed and, if so, what will need to be shown to prove that in-state mitigation is not available (and should that be a prerequisite)? Finally, if a proposed project supports de-carbonization, should its otherwise required mitigation measures be reduced or eliminated; and, if so, how will project proponents or DOE define, determine, and demonstrate a carbon-supporting project that should receive such treatment or exemption?

The GAP Rule will undoubtedly provide fertile ground for companies to invest in carbon reducing technologies at the outset of project planning.

*Molly Barker an associate at the K&L Gates LLP in its environmental, land use and natural resources group. She is a member of the environment, land and natural resources practice group. Molly’s practices focuses on environmental regulatory compliance, contaminated sites, renewable energy permitting and development, and natural resource issues. Molly’s energy experience ranges from permitting matters in front of the Federal Energy Regulatory Commission and state power siting boards, to preparing solar power purchase agreements for clients working to reduce their overall carbon footprint. She regularly works with timber and agribusiness clients on conservation efforts and natural resource issues. She also advises during the environmental due diligence period on a variety of mergers and acquisitions.

* Ankur Tohan is a partner in the firm’s Seattle office and a practice group coordinator for the firm’s global environment, land and natural resources practice group. Ankur’s practice focuses on energy infrastructure and natural resource development, compliance counseling, and defense of governmental and citizen enforcement actions. With an emphasis on renewable energy development and carbon management, Ankur advises a variety of industries on issues related to energy transition, expanding opportunities in the blue economy, as well as the impact of shifting carbon policies. Ankur is one of the editors for the firm’s Carbon Quarterly – an industry focused publication looking at key developments in the carbon space around the United States.

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[1] Washington Dep’t of Ecology, Draft GAP Rule Conceptual Framework for Informal Review Greenhouse Gas Assessment for Projects (GAP) Rule Washington Administrative Code (WAC) 173-445 (March 2021), https://ecology.wa.gov/DOE/files/36/36bdb605-225d-4a74-9edd-8bc600714977.pdf. [hereinafter Draft Conceptual Framework].

[2] Washington Dep’t of Ecology, Draft GAP Rule Language For Informal Review: Greenhouse Gas Assessment for Projects (GAP) Rule Washington Administrative Code (WAC) 173-445 (March 2021), https://ecology.wa.gov/DOE/files/3b/3b625dfc-8fe8-4125-a395-b43f0c620376.pdf. [hereinafter Draft GAP Rule].

[3] Washington Dep’t of Ecology, Chapter 173-445 WAC rulemaking webpage, available at https://ecology.wa.gov/Regulations-Permits/Laws-rules-rulemaking/Rulemaking/WAC-173-445 (Last visited August 3, 2021).

[4] Washington Dep’t of Ecology, Draft GAP Rule Conceptual Framework for Informal Review Greenhouse Gas Assessment for Projects (GAP) Rule Washington Administrative Code (WAC) 173-445 (March 2021), https://ecology.wa.gov/DOE/files/36/36bdb605-225d-4a74-9edd-8bc600714977.pdf, at 7.

[5] Id.

[6] Id. at 18–26.

[7] DOE, Conceptual Framework at 18–31.

[8] Id. at 22–23.

[9] Id. at 27–30.

Roger Wynne*

Yim I and Yim II, issued in November 2019, clarified two aspects of constitutional law key to land use disputes in Washington courts. When considering regulatory takings and substantive due process claims, the Washington Supreme Court has always held the Washington Constitution provides no greater protection than the U.S. Constitution, and that a claim under either Constitution should be subject to the same analysis. But for decades the Court applied analyses—to federal and state claims alike—at odds with the federal analyses. Consistent with the Court’s long-standing intent, Yim I and Yim II realigned Washington’s approach with federal law.

Continue reading “Regulatory Takings and Substantive Due Process in Washington after Yim I and Yim II” →