The events relating to the BP oil spill in the Gulf of Mexico continue metaphorically to parallel the relationship between the courts and environmental review under the National Environmental Policy Act (NEPA) with regard to deep water oil drilling off the north coast of Alaska. Shortly after BP installed a temporary cap on its blown-out well beneath the Gulf of Mexico and began a days long pressure test of the integrity of the well, the U.S. District Court in Alaska issued an order having a similar effect on oil drilling planned by Shell Oil in the ocean off Alaska’s coast. On July 21, 2010, U.S. District Judge Ralph R. Beistline, issued an order determining that the Minerals Management Service (MMS) (recently renamed Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE)) of the U.S. Department of the Interior had failed adequately to consider certain issues in its Final Environmental Impact Statement (FEIS) prepared under NEPA for the sale of an oil and gas lease in the Chukchi Sea off the coast of Alaska.
California yesterday commenced a lawsuit seeking to prevent the Federal Housing Finance Agency and its arms Fannie Mae and Freddie Mac from interfering with California’s implementation of the PACE (Property Assessed Clean Energy) program for financing the greening of existing structures. The lawsuit is intended to prevent implementation of recently announced policies that could significantly deter future use of the PACE program and delay or prevent clean energy retrofits of existing residential and commercial buildings. That interference could also cost California clean energy businesses income and jobs.
The PACE program, which has been encouraged by the federal Department of Energy, allows property owners to finance energy efficiency or renewable energy improvements to their property by long term borrowing on publicly issued low interest bonds that are repaid on their property tax bills. The program is designed to remove high upfront costs of green improvements as a primary reason for property owners foregoing retrofits that are, in the long run, financially sound for the operation of their property and good for the environment.
Property owners rely on the protection afforded by the Takings Clause of the Fifth Amendment to the U. S. Constitution to shield them against the government improperly interfering with their property rights. The Takings Clause requires “just compensation” to be given to the property owner if the government takes property for public use. For example, if the government takes a person’s land to build a public park, the government must pay him the value of the land. A decision this month by the U.S. Supreme Court adds new uncertainty to that protection by ruling that the property owner must show that the property right allegedly taken was sufficiently “established” under state law.
Shortly after the preceding blog entry was posted, President Barack Obama announced that he was suspending exploration of two locations off the coast of Alaska and suspending for six months the issuance of new permits to drill deepwater wells. He also noted that current laws and practices do not ensure “adequate environmental review” and invited Congress to work with his administration to “address these issues as soon as possible.”
As a BP oil well in the Gulf of Mexico continues to prove, at the rate of thousands of barrels of oil per day, that modern technology is no fail-safe against disastrous environmental mishaps, it provides a metaphor for a risk of malfunction in the legal system on which the public also depends to prevent such disasters. The ongoing massive leak in the Gulf of Mexico is the result of the failure of a series of human and technological safeguards intended to prevent uncontrolled releases of oil and gas from occurring. The final element in that series of protections is a mechanical device known as a blowout preventer, a device designed to detect a leak and automatically plug the oil well to stop further release of oil and gas. In the Gulf of Mexico, the well’s blowout preventer should have triggered and clamped the wellhead closed. It failed for reasons apparently not yet known.
The public depends on a similar system of safeguards to prevent approval of drilling permits that do not incorporate adequate protections against the risks of environmental disasters like that in the Gulf of Mexico. The public looks primarily to legislation and governmental administrative agencies for protection against environmental mishaps. For offshore drilling, the Minerals Management Service of the United States Department of the Interior has primary responsibility for environmental review. When it fails, the public looks to the courts as the legal equivalent of a “blowout preventer.” The courts are supposed to detect a failure in the administrative process and stop a project before an inadequately addressed environmental risk is realized.