Environment, Governor Roy Cooper

Cooper administration’s dump of 19,000 documents shows who knew what when about the Atlantic Coast Pipeline

Gov. Roy Cooper and Secretary of the Environment  Michael Regan discussed a controversial agreement with Dominion Energy about the Atlantic Coast Pipeline, but in a review of the first 1,854 pages of a public records request, there is no evidence of a pay-to-play agreement for a key water quality permit.

However, there are 17,000 documents to go.

The information was included among the more than 19,000 pages of documents that Gov. Cooper’s office provided to lawmakers, the media and other records requesters yesterday at 5:30 p.m.  The media and some environmental advocates had requested the records 10 months ago.

This fall, lawmakers formed a Joint Government Operations subcommittee, which, after several attempts to informally get records from the governor, filed a formal public records request. The subcommittee also hired Eagle Intel, a private firm of three former special agents — one FBI and two IRS — to investigate the governor’s office and the circumstances behind the MOU.

In a letter, Gov. Cooper’s office told lawmakers earlier this month that the records would be provided by Dec. 20.

A year ago, on Dec. 11, 2017, Ken Eudy, senior adviser to Gov. Cooper, asked to meet with Regan and William McKinney, the governor’s legal counsel, about an “outline of an agreement” — the Memorandum of Understanding. That MOU, which is non-binding, established a voluntary $57.8 million fund to boost economic development and renewable energy projects in the eight counties along the 160-mile route through eastern North Carolina. The governor, not the legislature, would have ultimately decided how the money was spent.

“I want to make sure we’re aligned internally,” Eudy wrote to Regan and McKinney.

Regan was concerned about the environmental damage — to waterways, wildlife habitats and forests — that pipeline construction could cause. The permitting process for all aspects of the ACP had been lengthy. DEQ had repeatedly asked Dominion, which co-owns the ACP with Duke Energy, for more information before ultimately granting the water quality permit.

“Michael, the governor has been especially firm that we need to achieve the environmental protections that you and the department believe you need.” The MOU went through several drafts; at one point, the fund figure was $80 million.

The governor’s office publicly released the final MOU on Friday Jan. 26, 2018, at 12:53 p.m. — just 21 minutes after DEQ had announced it was granting the water quality permit.

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The timing proved to be problematic. It immediately stoked suspicions among environmental advocates and Republican lawmakers — a rare alliance — that the fund was essentially payment for the permit.

Throughout the summer, lawmakers asked DEQ officials in committee meetings about their knowledge of the MOU. On several occasions, Division of Water Resources Director Linda Culpepper told lawmakers that she didn’t know about the MOU, “and I’m the one that signed that 401 [water quality permit] certification. I didn’t know about that fund [until] I saw it in the media after I had signed that permit, and it had been issued.”

Assistant Secretary of the Environmental Sheila Holman also told lawmakers she didn’t know about the MOU. None of the emails included in the first 1,854 pages was sent to either Culpepper or Holman. The only DEQ leadership involved in these emails was Regan and Deputy Secretary Doug Heyl.

The governor’s office, though, did know the timing of DEQ’s permit approval. Communications Director Sadie Weiner and Deputy Chief of Staff Julia White edited the DEQ press before it was released.

The fund has been fallow since its inception. In the summer, the legislature then commandeered control of the fund, passing a law that diverted the money to public school districts along the route. None of the money has been disbursed. Construction on the ACP has been halted because the Fourth Circuit of Appeals recently vacated a federal permit that would have allowed the pipeline to cross two national forests. The court ruled that Forest Service officials had “abdicated its responsibility to preserve national forest resources.”

Environment

Duke Energy asks DEQ for six-month extension to close coal impoundments at Sutton

During Hurricane Florence, flood waters from Sutton Lake in Wilmington surrounded Duke Energy’s natural gas plant there, forcing the utility to temporarily shut it down. The utility is citing the historic storm, plus Hurricane Matthew in 2016, as well as other factors, to its need for an extension to close the coal ash impoundments at the plant. (Photo: Duke Energy)

Citing two hurricanes, new and unexpected state requirements, and the challenges of removing the remnants of an old cypress forest in the bottom of a coal ash basin, Duke Energy has asked state environmental regulators for a deadline extension to excavate and close its impoundments at the Sutton plant in Wilmington.

In a 16-page letter to the NC Department of Environmental quality, the utility detailed the difficulties it has encountered over the past four years, as well as its measures to overcome them. If the extension is granted, the new date for closure would be February 2020, six months beyond the original deadline of August 2019.

The utility says it had crews working 20 hours a day, six days a week, in part to dredge the 760,000 cubic yards of material from the 1971 ash basin. Nonetheless, 240,000 cubic yards of dredge material remain, plus 987,500 cubic yards in 1984 basin.

The state’s Coal Ash Management Act allows the secretary of the environment to extend the closure deadline if compliance “can’t be achieved by application  best available technology found to economically reasonable at the time  and would produce serious hardship without equal or  greater benefits to the public.”

Beginning in 2014, Duke Energy transported by rail its first 2 million tons of ash to the Brickhaven mine in Chatham County for structural fill. (This was also controversial: Several citizens groups sued, claiming that new cells were being built to accommodate the ash, and those area should be subject to stricter solid waste permit requirements. The case is still in the courts.)

In 2015, Duke had planned to build a new onsite landfill for 5 million tons of ash from the impoundments, the utility said in its letter, estimating it could excavate 200,000 to 225,000 tons of ash per month, half of which would go to Brickhaven.

But in April 2016, DEQ announced a new policy to conduct an environmental justice review for each ash landfill, which set construction back six months. Nonetheless, Duke says it completed Cells 5 and 6 ahead of schedule, and received leachate permits for the landfill. But as more “air space” opened up in the landfill, it took on more rain, plus water draining from the ash itself. This increased. the amount of leachate from the landfill that needed to be treated.

New state rules requiring a 50-foot buffer on the basin dikes was also “unexpected,” the utility said, adding it could not excavate all of the ash from those dikes until the state approved their removal. That left 125,000 tons of ash, surrounded by water, in the buffer zone of the dikes. Duke then had to “excavate the material” in a less efficient manner.

And finally, last June, the dredgers encountered in the 1971 basin five acres of stumps from an old cypress forest. The debris clogged the machinery, setting the project back another three weeks.

The agency will hold a public meeting on Duke’s request on Jan. 14 at 6 p.m. at Cape Fear Community College, 502 N. Front St., in Wilmington. The public can also comment on the proposal through Feb. 4. Submit them by email to publiccomments@ncdenr.gov. Include the term “Sutton Variance Request” in the email’s subject line.

 

agriculture, Courts & the Law, Environment

Judge tosses punitive damages claims in hog nuisance case

The punitive damages phase of the most recent hog nuisance trial against Smithfield Foods had lasted just a half-day before the judge pulled the plug.

Yesterday a jury found Smithfield had committed a nuisance against its neighbors of Sholar Farm in Sampson County and awarded eight plaintiffs compensatory damages. During the punitive phase, which began yesterday afternoon, plaintiffs’ attorney Michael Kaeske presented his case to the jury that Smithfield had acted with “willful and wanton disregard” for the neighbors — not just those on Herring Road, but throughout the state — and for more than 20 years.

But this morning, as Kaeske tried to enter seven exhibits into the record for the jury to review, Senior District Court Judge David Faber allowed only three to be admitted into evidence. Faber then ruled there wasn’t enough evidence for the jury to assess punitive damages. Case closed. The jury went home.

The purpose of punitive damages is to deter future bad behavior by the defendant — and that of other potential defendants who might consider comporting themselves the same way. Nine factors play into the question of whether to award these damages, including the duration of the misconduct and the defendant’s awareness of it.

During the opening statements for the punitive phase, held yesterday afternoon, Kaeske told the jury, backed by more than 20 years’ of articles, memos and documents, that Smithfield had known odor was a problem at its hundreds of farms. The company’s lobbyists and proxies at the NC Pork Council had helped craft pivotal legislation to give the industry even more power to site farms wherever it pleased and to undercut regulations on odor and water discharge.

“This is the way we finish the job,” Kaeske told the jury.

But the job now goes unfinished. Throughout the trial, Faber never hid his contempt for Kaeske’s argumentative style of questioning. But yesterday, the judge sighed, grumbled and told the courtroom that the case needed to end soon. Faber disallowed any mention that Smithfield is owned by a Chinese conglomerate; nor could Kaeske discuss the ample salaries of Smithfield executives. Kaeske had presented this information in previous trials to prove that Smithfield could well afford to upgrade its waste lagoon and sprayfield technology.

“Those are emotional arguments,” Faber said, dismissing Kaeske’s request.

Jim Neale of McGuireWoods, representing Smithfield, objected to many of Kaeske’s statements. In fact, Neale argued, unsuccessfully, that the word “Smithfield” should even be uttered because technically the Sholar Farm is owned by Murphy-Brown. However, Murphy-Brown is wholly owned by Smithfield — and, even the judge agreed, that fact had been central to the first phase of the case.

To underscore the Smithfield-Murphy-Brown connection, Kaeske asked his first witness, Don Butler, a former director of Smithfield Foods, about the signage in front of each farm. Yes, Butler said, Smithfield had replaced all the signs that read “Murphy-Brown” or “Carroll’s” or any of the companies it had bought. Now all of the signs say “Smithfield.”

And so on, for more than two hours of objections, overrulings and sustainings, until the judge, jury and courtroom observers were exhausted.

This morning, Judge Faber unveiled a prewritten statement as he called off the punitive phase of the case. No amount of Kaeske’s protestations changed the judge’s mind. By 11 o’clock, the jury had been sent home.

The next case, also overseen by Judge Faber, is scheduled for January.

 

Environment, Governor Roy Cooper, Legislature

Private firm to investigate Gov. Cooper’s Atlantic Coast Pipeline deal: “We have no political agenda”

A private firm formed by three former federal agents will investigate Gov. Roy Cooper’s controversial memorandum of understanding with Dominion Energy over the Atlantic Coast Pipeline.

At a subcommittee meeting today, lawmakers announced they had hired Eagle Intel, based in Wilmington, to conduct the investigation. The firm, composed of Frank Brostrom, Tom Beers and Kevin Greene, incorporated last year. Brostrom worked for the FBI, and Beers and Greene for the Internal Revenue Service. Their areas of expertise focused on tax evasion and financial and political corruption, as well as organized crime and terrorism cases.

This is not a criminal probe, but a civil one, prompted by legislative oversight, said Sen. Harry Brown, a Republican from Onslow County.

The firm charges $100 an hour for its services, but until the investigation is under way, it’s unknown what the final cost will be.

Under the non-binding MOU signed by Cooper and Dominion nearly a year ago, the Virginia-based utility and Duke Energy, co-owners of ACP, LLC, would pay $57.8 million for economic development and renewable energy projects along the 160-mile route through eastern North Carolina. The announcement of the MOU coincided by just hours with the Department of Environmental Quality’s granting of a key water quality permit for the project.

Republican lawmakers then introduced and passed House Bill 90, which funneled the money away from its original purpose and toward public schools in the affected counties. However, no money has been disbursed yet. The Federal Energy Regulatory Commission has not issued its final construction permits for part of the route in North Carolina, which would trigger half of the amount to be due.

The other half of the money would be payable when the ACP is completed. That could take years. Last week, a federal appeals court halted all construction on the 600-mile pipeline over US Fish and Wildlife’s questionable assessment of the project’s potential damage to endangered species.

DEQ and the governor’s office have denied working in tandem on the timing of the permit and the MOU. But Republican lawmakers want Eagle Intel to determine if the MOU involved “pay-to-play” — that the voluntary monetary contribution smoothed the way for the water quality permit.

Lawmakers, led by a Republican majoriy, informally requested documents from the governor’s office and DEQ about the MOU, but never received them, despite multiple inquiries. They filed a formal public records request last month. (Environmental advocates and the media, including Policy Watch, likewise filed records requests from the governor and received no documents of significance; the requests have yet to be completely fulfilled.)

Sen. Floyd McKissick, a Durham Democrat on the panel that hired Eagle Intel, said the governor’s office and DEQ are expected to provide documents by Dec. 20. “I think it’s premature to investigate,” McKissick said.

But the governor’s office, as if to say, “touche’,” filed its own records request with lawmakers. In a document dated today, Dec. 12, Kristi Jones, the governor’s chief of staff, formally asked for voluminous information that could reveal whether Republican lawmakers’ concerns are legitimate or merely a power play. Among the governor’s request is communications among legislators, staff and any third parties, including the state Republican Party, executive director Dallas Woodhouse and chairman Robin Hayes.

The agents, who were present at today’s subcommittee meeting, emphasized that they have “no political agenda, no dog in the fight.”

“We will follow where the facts lead us,” Brostrom said.

According to voter registration records, Brostrom and Greene are registered Republicans; Beers is unaffiliated.

Environment

Appellate court orders construction to halt along all 600 miles of Atlantic Coast Pipeline

All construction has stopped along the 600-mile route of the Atlantic Coast Pipeline, including in North Carolina, after a Fourth Circuit Court of Appeals ruling last Friday.

The basis for the court’s stay is the risk pipeline construction presents to four endangered species: the Indiana bat, Clubshell mussels, Rusty-Patched Bumblebee and the Madison Cave Isopod.

These species are found along a 100-mile stretch in Virginia and West Virginia.

Three plaintiffs — Defenders of Wildlife, the Sierra Club and the Virginia Wilderness Committee — have sued the Department of the Interior and the US Fish and Wildlife Service over their Biological Assessments and Incidental Take Permits related to the ACP.

Co-owned by Dominion Energy and Duke Energy, Atlantic Coast Pipeline, LLC, is not a defendant, but has intervened in the case.

Incidental Take Permits allow for a certain number of endangered or threatened species to be “harassed” or killed during the construction of a project. Although the four species mentioned in the case haven’t been found along the North Carolina route, more than two dozen, rare, threatened or sensitive species live in the forests, streams and rivers here. Among them are the Neuse River Waterdog, the Green Floater, Rafinesque’s Big-Eared Bat, Red-Cockaded Woodpecker, the Atlantic Pigtoe and the Carolina Fatmucket.

The project has been the target of several successful legal challenges, many of them based on federal permits and decisions that the court has found substantively lacking.

Atlantic Coast Pipeline spokesperson Aaron Ruby issued a statement on the project’s website, saying that the court’s stay should not extend to North Carolina.

We respectfully but strongly disagree with the court’s decision. We believe this stay is not only unwarranted, but overly broad. We are filing a motion for emergency clarification on the scope of the court’s decision.

We do not believe there is any basis for the court to stay the entire Biological Opinion, which authorizes all 600 miles of the project. The issues in this case involve a much narrower scope of the project covered under the Incidental Take Statement – only four species and roughly 100 miles in West Virginia and Virginia. We will have more clarity on the scope of the court’s stay and its impact on the project when the court responds to our motion.