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Flint – the lessons we are learning: no longer out of sight – out of mind

22 Jan 2016

watertankIt seems the whole Country is talking about Flint.  There is justifiable outrage about the process, the horrible impact on the community and the failures to detect and swiftly respond to the Flint water crisis.  There has been a lot of finger pointing about who is responsible but little discussion about preventing this from happening again (as Governor Snyder promised).  Here are seven questions that I think people will,or should be, thinking about as the initial furor dies down:

1. Was using Flint River water a bad idea or a good idea that went horribly wrong?  The Flint water crisis was a failure of execution.  The Flint River was known to be a poor quality water source but that doesn’t mean that the decision to switch to the River was wrong from the start.  Without getting too far down the blame game – it is clear that in June of 2013 (almost 9 months before the water switch), the then-Emergency Manager hired an engineering firm to figure out how to manage the Flint River water.  There has been, to my knowledge, zero discussion of what that firm, Lockwood, Andrews & Newnam, did or what they were qualified to do.  Had they done their job properly and advised the City and Emergency Manager properly, either Flint would’ve not made the switch or would’ve treated the water properly.  I expect that there will be hearings about this eventually.

2. Who should be preventing such problems?  In short, the EPA, the MDEQ, the Michigan Department of Public Health and the local government.  Governor Snyder’s own Task Force concluded that the MDEQ dropped the ball – stating that there was: (1) a culture of minimalist “technical compliance”  that failed to focus on the intent of the laws MDEQ was charged to implement; (2) a failure to respond in both substance and tone to the public’s concerns; (3) a failure to understand the federal lead and copper rule, particularly focusing on optimizing corrosion control – reportedly MDEQ told Flint that treatment for corrosion control was not needed until after two six month monitoring periods had been completed.

Allegations that MDEQ dropped bad results from its water testing seem to reflect the Governor’s Task Force’s concerns and, along with allegations that the Michigan Health Department hid lead health data, may lead to criminal charges.  Reports that both the Michigan Attorney General and the federal Justice Department are investigating may be leading some to have sleepless nights.

The EPA also bears responsibility – they recently (and almost certainly in response to Flint) released this Memorandum clarifying the requirement of corrosion control for communities with 50,000 or more residents.  Larger still is the assertion that EPA staff knew before June of 2015 that Flint wasn’t using required corrosion control and that a staff memo on the topic was buried.  On January 21, EPA issued a fairly scathing letter and emergency order to the State and City and so, “working together” seems a bit far off.

Both the State of Michigan and the EPA have established task forces and working groups looking at the causes of, and responses to, the Flint situation -my question is will there be correction at the agencies and better communication between them or will nothing change?

3. What about the rest of the State?  The Flint situation has further weakened the public’s trust in government’s ability to protect them.  Will this lead to people in Detroit, Lansing, Grand Rapids and elsewhere to question if their water systems are protective of human health?  Given that the nascent Great Lakes Water Authority (which serves almost half the State’s residents) is just getting off the ground and its system has parts dating back to the 1800s, will there be additional testing and assurances given that the tap water we all thought was safe really is?  For your information, here is a 2014 DWSD report that reflects “acceptable” amounts of lead in Detroit’s drinking water at taps they evaluated.

4. How to improve governmental transparency?  Governor Snyder released 274 pages of emails and, for the most part, my review reflects that the Governor was out of the loop until late September of 2015 and then, he began to mobilize the State to respond. Why it took until January for him to issue a disaster proclamation and seek Federal aid is not clear.  The Governor could have stonewalled on his emails but in the face of public pressure, he released them.  Some have made hay out of the fact that he did not release his 2013 emails – when the decision to switch the water source was made.  I doubt there’s anything there but agree that he should release those as well.  One thing that should come out of this is an amendment to Michigan’s Freedom of Information Act to remove the blanket exemption from the Governor and his aides.  In the interest of good government, the inner workings of the highest levels of the administration should be open to the public as much as the inner workings of any of the State’s agencies.  Michigan is only one of two states to have such a blanket exemption and I think it’s time for that to change.

5. Will Michigan change the Emergency Manager law?  Many on the left have castigated the Governor for the Emergency Manager law he championed, arguing that it is unfair and improperly denies the public their voting rights and right to elected representation.  While I am not going to debate that here, it appears that the Flint Emergency Managers (there were several of them during the time in question – itself a problem) operated in an informational vacuum. This letter from the Emergency Manager in March of 2014 reflects a decision to use the Flint River rather than Detroit Water and appears to have been made without public consultation or comment.  I can see calls to change the law here based on Flint’s experience.  Certainly, better oversight of Emergency Managers is a must.

6. What about the infrastructure?  Governor Snyder announced that he  is convening a commission to study Michigan’s infrastructure needs, threats, opportunities and costs. The commission will be charged with recommending action items and investments to protect our health and well-being. Top priorities will include: water and sewer infrastructure, energy and electrical grids, broadband modernization, and upgrading the aging Soo Locks. The commission will lay the groundwork for state and municipal actions to take place.  Bluntly, this is long overdue and, candidly, given how poorly Michigan’s recent road funding process went, I’m dubious about whether this will make a difference with our State Legislature.  This needs to be the State government’s number one priority.  However, given the political damage Governor Snyder has suffered, it seems that a program of major infrastructure investment is a long shot – necessary but unlikely.  Will our “fix on failure” approach continue? Given that estimates to fix the Flint water system run to $60 Million Dollars (or more), and the Detroit/Great Lakes system into the hundreds of millions, if not billions, do we have the intestinal fortitude to invest in the future and in our health and that of our children? Do we need to replace the lead pipes or is it acceptable to rely on corrosion control treatment?

7. Will anyone going to jail?  Many people have said “this is criminal” and under federal and State law, prosecutors will be looking to see if there was “reckless disregard of the consequences,” “gross negligence” or an “intentional failure to obtain or follow proper regulatory approval or direction” which may lead to possible criminal charges.  The failure to use corrosion control seems a likely focal point as it might satisfy one or more of the above standards – but the facts still need to come out.  It seems that the strongest argument for criminal charges may be the altering of reports or data, covering up the lead results or obstructing the investigation. Certainly, civil lawsuits will abound (and have begun) and civil penalties may be imposed but, generally, making a mistake, even one of this gigantic magnitude with these horrendous consequences is unlikely to support a criminal conviction.  That’s why we have ballot boxes.

Michigan alternative electrical generation – Henry Ford is not a good analogy

5 Oct 2015

utility workA recent op ed in Crains Detroit Business argued that legislation pending in Lansing regarding Michigan’s electrical system is wrongheaded. The authors focus on the proposed elimination of the renewable portfolio standard (RPS requiring 10% of Michigan’s electricity be generated by renewables by this year) by the legislation and argue that the legislation will cost Michigan energy jobs. They argue that  Henry Ford wouldn’t have built his automobiles here if there wasn’t a legislative infrastructure to support buyers of his cars.  I think I agree with the authors that we should retain the RPS, but their argument doesn’t persuade me. I believe that the future will include a greater mix of sources of electricity. It will not be simply large power coal-fired plants owned by large utilities providing us electricity.

However, without any historical discussion, they suggest that Henry Ford located his operations in Michigan because somehow the regulatory climate supported buyers of his cars, because in their words Lansing didn’t “kowtow” to the horse and buggy industry and paved streets and put up traffic lights. That’s simply not true.  Detroit’s mayor Hazen Pingree began a push to pave streets in the 1890’s and Ford didn’t begin production of his Model T until 1908 (making over 10,000 of them in 1909).  The traffic light wasn’t patented until 1918 and reportedly the first one was installed in Detroit in 1920 – again, well after Mr. Ford had begun his operations (in 1920, Ford reportedly manufactured 1 Million cars worldwide).

As most students of Detroit history know, the automobile industry focused on Detroit because Henry Ford was from here, there was a history of manufacturing, and there was easy access to raw materials. There was no amazing roadway system which led Ford to conclude “this is the place to build the automobile.”  In short, it was an accident of luck, history, geography and economics. I think a better analogy is the railroads, which required a dedicated infrastructure as Congress wanted to open the western United States to commerce and did so by granting rights, privileges and land so that the railroads could establish their “grid” at a lower cost.

The authors of the op ed pay short shrift to the discussion of the legislation’s other major change – elimination of net metering, but it appears that they view this as problematic also. Net metering is the current system whereby individuals and small businesses that generate their own electricity can sell it back to the grid.  The net metering issue is not over whether individual electricity generators can or should sell power back to the grid – rather, it’s what should be the price of that sale. Currently, individual generators can sell power back to the grid at the retail price of electricity charged by the utilities. This has been a boon for encouraging individuals and others to put up wind turbines and solar cells. The ability to sell excess electricity at the same price that the utility charges certainly means a faster payback which means more people will invest in it.

Utilities argue that this is a subsidy and they’re right.  Individual generators do not have to meet regulatory requirements relating to the power that they generate, nor do they have the costs of ensuring long-term reliability or the overhead costs of delivering power to consumers.  If you took your home-grown tomatoes to Kroger or Meijer, would you expect the law to require the store to buy them from you and at the same price the store sells tomatoes? Of course not.  In my view, the question is not whether there should be an incentive for individuals to create distributed power but, rather, how much of an incentive is fair to incentivize distributed power generation and fair to those who will continue to depend on the existing grid that will need upkeep.

We have an infrastructure in place that requires maintenance and upgrading for the 21st-century.  This is not a problem with a simple one-size-fits all-solution. The Legislature needs a more nuanced approach than simply blowing up the current system, but let’s get the arguments right.

Dire Straits – Crude Oil under the Great Lakes – what will the Courts do about a 61+ year old pipeline?

2 Oct 2015

pipelineEnbridge (the operator of the pipeline that leaked into the Kalamazoo River in 2010) has been assuring the State that there is no reason to worry about its pipelines under the Straights of Mackinac.  A 2014 University of Michigan report concluded that because of mixed currents, within 20 days of a spill from one of the two pipelines, oil would cover a roughly 50 mile stretch between Beaver Island in Lake Michigan to the West and as far Southeast as Rogers City in Lake Huron.  This news catalyzed an effort by the State to review its 62 year old agreement allowing the two pipelines which reportedly carry some 23 million gallons of oil under the Straits of Mackinac each day.

In June a state panel issued a 64-page Michigan Petroleum Pipeline Task Force Report which expressed unease with Enbridge’s assertion it could use the pipelines forever.  The report concluded that the Task Force had “inadequate information at this time to fully evaluate the risks.”   The Task Force recommended independent studies of the risks, alternatives for the safe transport of oil, and an accounting of the costs of responding to a spill from Enbridge Line 5 (the pipelines that flow under the Straits.

It seems as if Michigan’s regulators are not so willing to take Enbridge at its word.  The Attorney General has begun asking Enbridge for documentation and re-requesting when he does not get everything he asked for.  Enbridge appears to have jumped at the change to sign an agreement not to pump heavy crude (the problem in the 2010 spill) through the Straits without giving the State 180 days notice. This cost them nothing as they weren’t using the pipelines for heavy crude and had no plans to do so.  This gave the Task Force the chance to check the first item off its “to do list.”  Enbridge also rushed into place a “dress rehearsal” for a spill which made the front pages of the newspapers. Of course, this exercise was planned and Enbridge’s vendors themselves admit that in some cases equipment would have to be brought from Detroit – a 5 hour car trip in good weather.

While the federal government largely controls pipeline operations, the State’s negotiators in the 1950’s did an OK job with the easement they drafted (see here). The easement has some shortcomings like a bond of $100,000 and a flat insurance amount of $1 Million and no reopeners for changed regulations but it also requires the pipeline to “eliminate any oil or substance which may escape” from a leak or break and to indemnify the State from all damages or losses and the insurance required must be acceptable to the State covering the pipeline’s liability.  Particularly in light of the recent Volkswagen environmental scandal, it seems as if Michigan is taking its environmental stewardship of the Great Lakes even more seriously than usual.  The problem is that unless there is some evidence of a breach of the easement’s standards (as has been alleged regarding the spacing of the pipeline supports) or an imminent threat of a release, there isn’t much that State regulators can do.

While the easement gives the State some say over what Enbridge does, ultimately,  Michigan and federal law will  apply.  As noted by the Task Force, Michigan law gives the State a lot of power after there’s been a spill from a pipeline but not nearly as much over a threatened spill.  The law allows the State to step up and deal with a “threat of release” but there are precious few cases explaining what that means.  When dealing with a “threat” – even one with consequences as potentially huge as a release into the Straits of Mackinac, the Courts have demanded  quite a bit before granting any sort of injunctive relief.  It’s fair to say that unless the pipeline actually begins to leak, there is almost nothing the Courts will do under Michigan law except to hold Enbridge to the somewhat vague terms of a 60+ year old easement.

 

 

What I did on my summer vacation – Michigan’s water heritage

18 Sep 2015

eagleThis summer, Michigan’s Office of the Great Lakes (OGL) released its draft Water Strategy for the State of Michigan – and has been holding review sessions throughout the Summer to discuss it.  The Strategy discusses a number of ideas and sets goals including: protecting and restoring aquatic ecosystems, ensuring clean and safe waters, supporting water-based recreation, promoting water-based economies and investing in water infrastructure.

While there are many worthwhile goals and ideas, today, I’m going to focus on the goal of supporting water-based recreation.  Michigan is a water paradise with more boats than just about any other state, the longest freshwater coastline in the Country, nice beaches (see here) and you’re never more than 6 miles from a Great Lake, an inland lake or a river or stream.

As the summer drew to a close,my family spent a weekend in the quad cities area of Michigan and we spent a morning at the Shiawassee National Wildlife Refuge.  The Refuge contains more than 9,800 acres of marsh, bottomland hardwood forest, and grasslands.  It’s known locally as the Shiawassee Flats and includes a number of rivers which flow into the Shiawassee River which meets the Tittabawassee River to form the Saginaw River.

We spent our morning with Captain Wil Hufton of Johnny Panther Quests.  He runs an “eco-tour” business and took us up and down the Refuge and it was a lot of fun and very interesting. We saw hawks, egrets, herons and many other birds. The highlights were definitely seeing bald eagles in the wild as well as deer running along the river bank. Wil told us about the history of the area from the logging days through Michigan’s industrial era all the way to today. He educated us about changes in the river system and the challenges the system faces and has overcome.

Jon Allan, the  Director of the OGL, has spoken a lot about getting back in touch with our aquatic roots.  Now, I can see what he’s talking about.  I know my family enjoyed our eco-tour t and I would highly recommend taking a Johnny Panther eco-tour if you have plans to be in the Saginaw area some early morning or late evening.

 

What do Tom Brady and every dispute with an environmental agency have in common?

13 May 2015

 A friend of mine recently pointed out that if Tom Brady appeals the punishment against him, the process is spelled out in the NFL Collective Bargaining Agreement (see here). Buried at Article 46 (between injury protection and union security), is the process for appealing a sanction by the Commissioner.  For appeals of everything other than unnecessary roughness and unsportsmanlike conduct (which have a slightly different, slightly more pro-player process), the Commissioner, after consulting with Union’s Executive Director, appoints one or more hearing officers. If that seems to unfairly stack the deck against Brady, well, you’re not alone in that opinion.

However, Tom Brady isn’t alone in this situation.  Before a company or person “aggrieved” by an agency decision may appeal that decision to the Courts, typically, she must “exhaust” her administrative remedies and process and create a record for review by the Courts. So, if your permit has been pulled or conditions have been imposed on you that you think are unfair, before you ever get to see a judge, you must, in Michigan, typically proceed through what’s called a “contested case.” Under the  Michigan Administrative Procedures Act,  the agency itself or one or 1 or more hearing officers designated and authorized by the agency to handle contested cases, are required to be the presiding officer in a contested case. While the law does say that hearings are to be conducted impartially, it does seem odd that an employee of the agency whose decision one is appealing gets to sit in judgment on that appeal and is the one to control the making of an administrative record that a court would review.

While the hearing officer in Tom Brady’s case results from a negotiated agreement, it does seem that foxes guarding the henhouses is the order of the day and some are only now realizing that perhaps we should reconsider what looks like a fair process on the surface appears skewed when one scratches only a little below the surface.

What will be the top stories of 2015?

23 Jan 2015

edit_calendar_ssk_47433454Happy new year!  I know it’s almost February but as this is my first blog post of the year, I thought (particularly after hearing the State of the Union and the State of the State speeches)  I’d predict the big stories of 2015 in no particular order:

  • Wetland Rules – the EPA and the Army Corps of Engineers finally proposed rules in 2014  to address the fallout of the Rapanos case.  The proposal was met with a firestorm of disapproval, particularly from the farming world.  Will they ever finalize them?
  • Brownfield TIF Legislation – after all that work last year, will the Legislature take up streamlining this program and expanding it to allow Michigan to be even more competitive in redeveloping brownfields?
  • EPA Greenhouse Gas Rules vs. Congress – in September, 2013, EPA issued a proposal for carbon pollution from new power plants; in June  2014, EPA issued a proposal to cut carbon pollution from existing power plants – the GOP and coal and oil interests in Congress have fought this for some time.  Will the rules be adopted and enforced?  Will there be enough time for electricity generators to get alternative plans in place before being forced to shutter their oldest, least efficient and most polluting plants?
  • Keystone Pipeline – President Obama and Congress have been locked in a politically charged dispute over the Keystone XL pipeline for almost 3 years now – he seemed to indicate in the State of the Union that he’d veto legislation – will he?
  • Energy Policy – Governor Snyder has pushed for an energy policy, legislation is expected this year and the Governor recently mentioned an intention to develop a new energy agency that would make Michigan more competitive for business.  What that will entail in light of the likely changes due to federal regulations will be interesting to see – will Michigan upgrade or discard its renewable portfolio standard? Can Michigan reduce electrical cost while improving both reliability and environmental performance?
  • Water Policy – the Governor’s long-awaited great lakes policy is expected this year.
  • Pipelines – in addition to the Keystone pipeline, there has been a lot of interest in pipelines in, under and around the Great Lakes – could there be federal and state changes there?
  • Detroit’s Water Authority – it is supposed to morph into a regional authority – as I said previously, the easy part was getting to the agreement last year – will the hard work succeed or will it fail, causing major shockwaves for roughly half of the State’s population?

Gas taxes, electrics and hybrids – is Michigan paying attention?

17 Dec 2014

Tesla

A sharp, environmentally friendly car, but also a “free rider”?

Everyone agrees that Michigan’s roads are in awful shape.  Everyone seems to agree on the amount of money to get them into good shape and keep them there (an additional $1.2 Billion a year – although MDOT argues that it may be closer to $2 Billion/year).  What no one seems to be able to agree on is how to pay for that.  With a week left to go this year (and I wonder why they aren’t working through the 31st on this), the House has passed two bills and the Senate has passed another.

Michigan, desperate to fund much-needed road repairs, appears unwilling to take on this issue

The first House bill would amend the General Sales Tax Act to eliminate, over 6 years, the sales tax on motor fuels. The proposed exemption would first reduce the portion of the sales tax that existed before the approval of Proposal A on March 15, 1994. After January 1, 2021, eligible fuel would be exempt from the sales tax. The Legislature’s own financial analysis shows reductions in State and local revenue by approximately $1.1 billion by fiscal year 2021-2022.  The second bill would amend the Motor Fuel Tax Act to replace the current excise taxes on gasoline and diesel fuel with a single excise tax that would be adjusted annually.  The current gasoline fuel tax is 19 cents per gallon and under the bill, the tax rate could go up every year but could not exceed 32.5 cents.

the number of miles driven is a good proxy for wear and tear on the roads but I wonder if there should be some weighting based on, well, vehicle weight

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