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Center for Energy Studies | Research Paper

Finding 'Win-Wins' From Environmental Litigation Losses

June 22, 2023 | Jim Blackburn, Jennifer Borski
Austin Capitol

Table of Contents

Author(s)

Jim Blackburn
Baker Institute Rice Faculty Scholar | Professor in the Practice of Environmental Law
Jennifer Borski
Research Lawyer

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    Blackburn, Jim and Jennifer Borski. 2023. Finding Win-Win From Environmental Litigation Losses. Research paper no. 06.22.23. Rice University's Baker Institute for Public Policy, Houston, Texas. https://doi.org/10.25613/w9wn-6m03.

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TexasEnvironmentCommunity environmentPollutionPlastics

No one likes to be sued, and no one likes to lose a lawsuit. But sometimes losses can turn out to be wins. In this paper, we look at two cases from the Texas coast: These cases involved post-decision agreements that we view as sustainability steps — they both repair the damage done by litigation and provide a springboard for longer-term solutions based on cooperation rather than adversarial competition.

In the first case, the Aransas Project (TAP) filed a citizens’ suit in 2010 under the federal Endangered Species Act of 1973 alleging that the water allocation decisions of the commissioners of the Texas Commission on Environmental Quality (TCEQ) killed 23 endangered whooping cranes.[1] TAP won a major decision at the District Court level, but that victory was short lived as the decision was overturned by the 5th Circuit Court of Appeals, and the U.S. Supreme Court declined to review that decision.[2] Not long after, TAP had an opportunity to litigate against the principal intervenor, the Guadalupe-Blanco River Authority (GBRA) in another matter, but instead, the parties decided to work together on mutual goals. That decision has led to some ground-breaking changes in the way at least one water agency in Texas does business.

The second case involves a citizens’ suit by the San Antonio Bay Estuarine Waterkeeper against Formosa Plastics. It alleged a violation of the terms and conditions of the wastewater discharge permit issued to Formosa, which regulated the company’s discharge of water into Lavaca Bay and Cox’s Creek.[3] Formosa lost in Federal District Court and subsequently entered into a consent decree to resolve the remaining penalty issues — the decree set up a process for Formosa to take various actions to resolve the alleged violation. Although there has been an appeal concerning the interpretation of certain language in the consent decree,[4] Formosa has appeared to comply with the agreement and has significantly improved its ability to compete and survive in today’s rapidly changing plastic market.

Both cases offer us insight into the complex future that all citizens of the Texas coast and the United States will soon encounter, a future that will bring major changes to business as usual on the coast.

The Aransas Project Case

First, we’ll examine the litigation concerning the whooping cranes. In 2010, the case of The Aransas Project (TAP) v. Bryan Shaw et al. was filed in federal district court in the Southern District of Texas, Corpus Christi division, and was assigned to Judge Janis Jack.[5] The trial started in 2012, and in the following year the judge decided in favor of TAP. The decision found that the action of the Texas Commission of Environmental Quality Commissioners led to the death of 23 whooping cranes, and an order was issued that a habitat conservation plan (HCP) be prepared to prevent this from happening again.[6]

Background

The whooping crane flock mentioned in the suit is the world’s only naturally-occurring wild flock[7] and spends its winters in the Aransas National Wildlife Refuge in Texas.[8] San Antonio Bay — also known as the Guadalupe Estuary —neighbors the refuge and provides critical habitat for the whooping crane.[9] The estuary receives freshwater inflows primarily from the San Antonio and Guadalupe Rivers, whose surface waters the state of Texas owns and holds in trust for citizens of the state.[10] The estuary is shown in Figure 1 including key bay systems.

 

Figure 1 — Map of the Guadalupe River Basin

Blackburn-Texas+Env-060723-Fig01
This map shows the relative location and physical extent of the Guadalupe and Blanco Rivers, including key bays comprising the wintering habitat of the last wild flock of endangered whooping cranes in the United States.
Source Guadalupe-Blanco River Authority

 

 

The Texas Commission of Environmental Quality has sole jurisdiction to regulate diversion and use of state water.[11] As the regulatory and permitting authority, TCEQ oversees diversions which directly affect the availability of fresh water to users and wildlife throughout the state.[12] During a severe drought in the winter of 2008, the carcasses of four cranes were found within the refuge.[13] Necropsies performed on two of the birds revealed their causes of death as emaciation along with other factors.[14] A further 19 cranes allegedly died during that season.

 

Figure 2 — A Weakened Whooping Crane at the Aransas National Wildlife Refuge

Blackburn-Texas+Env-060723-Fig02
Tom Stehn, the person responsible for whooping crane management at the Aransas National Wildlife Refuge in 2009, with a weakened whooping crane that later died while being attended to by refuge personnel. Among the causes of death identified at necropsy was malnutrition.
Source U.S. Fish and Wildlife Service[15]

 

 

The Aransas Project was subsequently formed as a nonprofit; its primary objective is to protect the whooping crane and its habitat.[16] TAP sued on behalf of itself and its members, alleging that TCEQ officials had violated the Endangered Species Act.[17] At the heart of TAP’s complaint was that the defendants’ inefficient performance of their duty in managing water diversion in the San Antonio and Guadalupe River systems violated the Endangered Species Act by harming and harassing cranes in the flock and causing the deaths of 23 cranes.[18]

Issues at Trial

This district court dispute centered upon the importance of freshwater inflow to the production of blue crabs — these crabs comprise the majority of the diet of the whooping crane flock that winters in the Aransas area.[19] Blue crabs require specific salinity levels in the bays, i.e., certain amounts of freshwater inflow.[20] This flock had grown from a low of 17 birds in the late 1930s to a population of over 230 at the time of the loss of 23 birds in 2008. The major issues in dispute included:

  • Did 23 cranes die in the winter of 2008-2009?
  • Could the cranes adapt to the presence of fewer blue crabs by seeking other food sources?

Another key issue at trial was that the major drought in 2008 reduced the amount of freshwater inflow into the designated critical habitat of the whooping crane and so reduced the inflow to blue crabs, which the cranes rely on as their primary food source.[21]

Because of this causal relationship, Judge Jack found that the water management activities of the TCEQ caused a “take”[22] of whooping cranes — a violation of Section 9 of the Endangered Species Act — by altering their behavior through habitat modification, depriving them of food and water resources, and ultimately, leading to malnourishment and death.[23]

Judge Jack’s decision was appealed to the 5th Circuit Court of Appeals in New Orleans.[24] Here a decision authored by Judge Edith Jones reversed the district court decision on the grounds that the chain of causation was too weak to support a finding that a “taking” occurred in violation of the act.[25] Of key concern to the 5th Circuit was the number of steps between water management decisions and the alleged death of the cranes. Specifically, the court found that because the deaths of one or more whooping cranes is too remote from TCEQ’s permitting withdrawal of water from the San Antonio and Guadalupe Rivers, the TCEQ could not be held liable for a take or for causing a take under the Endangered Species Act.[26] On appeal, the U.S. Supreme Court declined to review that decision, ending this litigation.[27]

Working Together Post Litigation

After the Supreme Court’s decision, a new, more promising phase began. Representatives from the Guadalupe-Blanco River Authority (GBRA), the principal intervenor in The Aransas Project (TAP) v. Bryan Shaw et al., and TAP met in Seguin, Texas to discuss issues. A suggestion was made by Molly Cagle, an attorney for the GBRA, that, rather than heading back to the courtroom, maybe it was time for the parties to work together to try to identify solutions to the whooping crane situation and GBRA’s obligation to meet public water supply demands. The basis for a potential shared vision was set at that meeting. It was later recorded in a written statement signed in February 2016 and revised in a second agreement in November 2016.

Joint Investigation into Habitat and Water. The revised vision identifies several concepts to be jointly investigated, divided into habitat and water.

  • From a habitat standpoint, investigations are to focus on providing sufficient habitat for the flock as its numbers grow toward 1,000 individuals — this is the level specified by the U.S. Fish and Wildlife Service’s Recovery Plan for downlisting[28] of the cranes to threatened status[29] — along with evaluating the Guadalupe River delta as a location for expanded habitat.
  • From a water standpoint, the focus is on 1) the availability of water for bay and estuarine inflows and the growing human population in the region, and 2) studies to determine the needs of the estuarine system of San Antonio Bay.

Breakthrough Idea: Habitat Conservation Plan. It is unusual for an environmental group and a water resource agency in Texas to mutually work toward solutions on very difficult issues such as endangered species protection and water supply enhancement. Despite the willingness of the parties to work cooperatively, there were initial difficulties when early efforts to implement the agreement’s aims failed to get to the heart of the issues and had limited success. Then the GBRA suggested a breakthrough concept that made the discussion move forward in a positive manner.

The GBRA’s boundaries are made up of the 10 counties that include the Guadalupe and Blanco Rivers that rise in the Hill Country of Texas and flow to the Gulf Coast. Due to the karst features[30] of the Hill Country, numerous springs exist that support a wide range of endangered species — in addition to the whooping crane, this includes various salamanders and river mussels, birds such as the golden cheeked warbler, and down on the coast, Kemp’s ridley sea turtle and the piping plover.

The breakthrough idea was for the GBRA to prepare a habitat conservation plan (HCP) covering the entire river system and addressing all species. The purpose of an HCP is to mitigate for potential impacts caused by the implementing agency. HCPs were first introduced in the Endangered Species Act of 1973 and intended to be written guidance on how to mitigate the impacts of human activities on the ecosystems of endangered and threatened species.

This suggestion is in line with the GBRA’s express mission of conserving and preserving the waters within the Guadalupe River Basin and TAP and other stakeholders in this large watershed responded positively to it.

Development of a Basin-Wide Habitat Conservation Plan. The GBRA has now undertaken the development of a basin-wide HCP, down the entirety of the Guadalupe River, from the headwaters in Kerr County to the San Antonio Bay. The river serves as habitat to 18 federally endangered species and eight federally threatened species, as well as numerous candidate species being considered for endangered status. Because increased population growth has occurred and is projected for the Guadalupe River Basin, along with expanded stress on the river as a resource, the formation of this HCP is a welcome response to protect the endangered and threatened species that depend on the Guadalupe River for their continued existence.

The plan has begun by addressing essential conservation strategies for important species such as the whooping crane, freshwater mussels, and salamanders, while also acknowledging the necessity of addressing population growth and commercial development within the Guadalupe Basin. Beyond the environmental triumph, this HCP secures GBRA’s role as a local leader, as the plan offers other utilities, municipalities, industries, and individuals the opportunity to join this process under provisions defined in the Endangered Species Act.

To undertake such a unique and comprehensive HCP, GBRA sought the financial support and counsel of the U.S. Fish and Wildlife Service as well as many stakeholders in addition to TAP. In April 2019, the board of directors for GBRA approved a resolution of support for the HCP — this included an estimated total project cost of $3.25 million, with $1 million in federal grant funds administered by the Texas Parks and Wildlife Department (TPWD). GBRA has contracted Austin-based environmental consulting firm Blanton & Associates to move the project forward. Development of the HCP is anticipated to continue over the next three to five years, with expected deployment by the end of 2025.

Technical Advisory Group. A technical advisory group (TAG) for the plan has been formed and had its first formal meeting in October 2022. That meeting consisted of a discussion of the TAG’s role in supporting project goals like minimizing and mitigating any take of endangered species and allowing for others in the basin to seek coverage under GBRA’s permit. Beyond that, the most recent Guadalupe River Authority Habitat Conservation Plan (GRHCP) stakeholder meeting occurred in December 2022. A preliminary list of covered activities, including water supply impoundment, wastewater treatment, and GRHCP implementation and other conservation activities, was introduced at that meeting. GRHCP’s intended hydrological modeling approaches for measuring surface water quantity and quality were also discussed.

Species To Be Covered. Three species of salamander, as well as the monarch butterfly, piping plover, red knot, eastern black rail, golden cheeked warbler, and of course, the whooping crane, are among the GRHCP’s proposed covered species. Three species of mussels, including the Guadalupe orb and the Guadalupe fatmucket, both of which are found only in the Guadalupe River Basin, may also be covered by the GRHCP.

Evaluation and Monitoring of Activities That May Trigger Takes. According to a technical memorandum released in September of 2022, the GBRA and the HCP Project Team will continue to assess the activities of the GBRA and others in the area and their potential effect on covered species.[31] To evaluate the effects of activities covered by the HCP, the team will proceed by developing a suggested habitat interference threshold and other metrics for triggering a take, estimating frequency of takes, and developing conservation procedures. These procedures are based on an examination of the conditions under which water diversions from the Guadalupe River may affect flows in the river that disturb the habitat for covered species and the conditions under which wastewater discharges to receiving streams in the Guadalupe River Basin may have negative repercussions for covered aquatic species or their habitats.

In addition, the GBRA and the HCP Project Team will move forward by evaluating site-specific activities to determine where GBRA owned and/or operated facilities may affect covered species and connect with those second parties participating in activities that may be eligible for permitting to catalog, report, and evaluate their activities and associated takes.

Moving Forward

Benefits for the Water Resources Agency. The GBRA has stated that its primary considerations in developing the GRHCP are “to provide greater certainty in its ability to meet future water supply and wastewater treatment needs, while providing protections for threatened and endangered species in the Guadalupe River Basin.”[32] This melding of purposes reflects a nearly unprecedented compromise by both sides — a recognition by GBRA of the important goal of the original adversarial proceeding and an equally important acknowledgment by TAP of the water agency’s responsibility to respond to population growth in its service area.

Assuming that this HCP unfolds as proposed, it will be a major step forward for a water resources agency like the GBRA. Rather than encountering endangered species issues somewhat randomly in disputes and litigation, the HCP provides a very organized way for the agency to anticipate problems and formulate specific remedies to implement within the watershed in an attempt to protect the species and avoid “takes” in the future.

The HCP also includes a proposal for permits to be issued that would allow “incidental takes,” assuming that the HCP requirements were being met. An incidental take is one that occurs incidental to an otherwise lawful activity.[33] Such permits will only be granted if the covered activity is otherwise lawful, non-federal, and such activity is under the direct control of the permittee.[34]

Outcome for The Aransas Project. TAP’s pleadings in the original litigation asked for the court to order the preparation of an HCP. While the scope of the HCP now being pursued is much larger than that originally envisioned by TAP — covering a much larger geographic area and many more species — the basic issues regarding whooping crane protection are going to be set out in the HCP. Although TAP was the losing party in the litigation, it has found another way to achieve its goal — to protect the whooping cranes.

One Final Thought. We note that the GBRA’s decision to pursue a habitat conservation plan, and the partnership between GBRA and TAP, was a much better result than the initial court order, which would very likely have been the basis of continuing disputes for decades to come. It is a good example of the way that some remedies can be achieved voluntarily when they might never be achieved under force and duress. And it is worth noting that Darrell Nichols, the new general manager and CEO of the GBRA, has indicated his interest and willingness to enter into a revised version of the 2016 agreement. This is an important step to ensuring continuity of vision and purpose.

The Formosa Plastics Case

The second case under discussion began in 2018, when the San Antonio Bay Estuarine Waterkeeper[35] led by Diane Wilson sued Formosa Plastics, alleging liability under the federal Clean Water Act of 1972 and violations of Formosa’s TPDES (Texas Pollutant Discharge Elimination System) wastewater discharge permit.[36] Diane Wilson was recently awarded the Goldman Environmental Prize, at least in part for her role in the litigation discussed in this paper, litigation that was beautifully considered and presented. But that is only one aspect of this interesting controversy that unfolds from litigation under the citizen suit provision of the federal Clean Water Act.

The Clean Water Act’s purpose is to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.”[37] The associated TPDES permit prohibited the discharge of “floating solids or visible foam in other than trace amounts” and imposed mandatory reporting requirements on Formosa regarding violations from its wastewater pipe and stormwater outfalls.[38]

Background: The Formosa Complex

Formosa Plastics operates a 2500-acre plastics complex in Point Comfort, Texas, about halfway between Houston and Corpus Christi. Originally constructed in the early 1980s, the facility has had several major expansions since then. Today, the facility operates over 20 production units in five business divisions—olefins, polyolefins, vinyl, specialty polyvinyl chloride, and chlor-alkali. Products manufactured there include ethylene, polyethylene, propylene, polypropylene, vinyl chloride, polyvinyl chloride, chlorine, caustic soda, ethylene dioxide, and ethylene glycol. It uses predominantly natural gas both as a raw material and a fuel source. A layout of the Point Comfort facility is shown in Figure 3.

 

Figure 3 — Layout of the Formosa Plastics complex, Point Comfort, Texas

Blackburn-Texas+Env-060723-Fig03
Aerial image of the Formosa Plastics complex at Point Comfort, Texas. The frontage along State Highway 35 is just over one mile in length and the frontage along Farm to Market (FM) 1593 is over two miles, giving an indication of the scale of this facility.
Source Google Earth

 

 

The Litigation

Main Issue of Litigation. It was undisputed that Formosa discharged plastics into Lavaca Bay and Cox Creek — these are waterways essential to both human life and wildlife, as they serve as an ecosystem for various aquatic species that support the commercial fishing and recreation industries.[39]

The main issue addressed in litigation was the interpretation of the phrase “no floating solids ... in other than trace amounts” and the interpretation of that phrase with regard to plastic particles in the wastewater discharge.[40]

Decision and Consent Decree. In a powerful decision, federal Judge Kenneth Hoyt ruled that Formosa had violated its permit by discharging plastic pellets and was liable under the Clean Water Act for these discharges.[41] Six months later (in December 2019), the court approved a consent decree settling the remaining matters in the case.[42]

Consent Decree Requirements

Financial Requirements, Engineering Updates. The consent decree required Formosa to pay $50 million into a mitigation trust to fund local environmental projects. The consent decree also required Formosa to upgrade its process water and stormwater systems,[43] and request zero discharge of plastics in its TPDES permit. Per the consent decree, “plastics means visible plastic pellets, flakes, or powder produced at the Formosa Point Comfort Plant.” The consent decree further required that Formosa provide additional financial contributions to the mitigation trust if plastics are discharged from the facility after the effective date of the consent decree. This requirement continues today while Formosa continues to implement the terms of the consent decree alongside Waterkeeper.  Discharges are determined through either new discharges of plastics through stormwater outfalls, or through sampling results at a Wastewater Sampling Mechanism (WSM). The WSM, a system designed by Waterkeeper and agreed to by Formosa, consists of two sampling methods. The first method automatically takes samples of Formosa’s wastewater discharge stream if the WSM detects that plastics may be present. Additionally, the WSM contains a second sampling method, a net filtration system, designed to capture plastics that may be present in the wastewater discharge stream. To date, this is the largest citizen Clean Water Act lawsuit settlement in history. Although there has been an appeal about the consent decree to clarify Formosa’s obligations, the consent decree is still in effect and being implemented.[44]

Mitigation Trust Fund. San Antonio Bay Estuarine Waterkeeper remains an active participant in all stages of the consent decree settlement process, including sitting on the board of the mitigation trust fund. The consent decree stated that the initial $50 million payout was to be distributed over five years to seven projects.[45] According to the decree, the breakdown of funds is:

  • $20 million to the Federation of Southern Cooperatives (“the Federation”), a non-profit organization with offices throughout the South, to form a Matagorda Bay Fishing Cooperative (“the Cooperative”), and netting or transportation cooperatives if necessary to support the Fishing Cooperative, under a project called the Matagorda Bay Cooperative Development Project (“the Project”).[46]
  • $10 million in total for the development, protection, operation, and maintenance of Green Lake Park.[47]
  • $750,000 to the Port Lavaca YMCA to fund camps for children and teenagers in the area, focused on educating youth about the importance of being a good steward of the local ecosystems and teaching outdoor education and recreation activities.[48]
  • $2 million to Calhoun County for erosion control and beach restoration at Magnolia Beach. Funds may be used for the purchase and use of clean and uncontaminated fill material, planting of native plants, necessary construction to prevent future erosion, and necessary maintenance to prevent beach erosion.[49]
  • $1 million to the University of Texas Marine Science Institute (UTMSI) Nurdle Patrol.[50] The money will be used to support the Nurdle Patrol and for workshops and meetings, and to provide scholarships for attendance, food, transportation, and expenses at conferences.[51]
  • $5 million for an Environmental Research Mitigation Project providing for funding for environmental research regarding the Bay Systems or the river deltas in Calhoun or Jackson Counties feeding into those systems. Funding may be distributed for environmental research topics including, but not limited to, ecology, pollution, fisheries, or habitat and wildlife restoration of the ecosystems.[52]
  • $11,250,000 to the Matagorda Bay Mitigation Trust, and any additional sums paid by Formosa or returned to the trust for redistribution.[53]

Remediation of Neighboring Ecosystems. Formosa also agreed to significant remediation efforts in Cox Creek and Lavaca Bay, with the remediation process developed in conjunction with Formosa, Waterkeeper, and an agreed-upon Remediation Consultant. Cox Creek borders the facility to the east, while Formosa’s wastewater pipe discharges into Lavaca Bay to the west of the facility. The Cox Creek phase of the remediation is well underway, and includes shoreline surface cleaning and excavation to remove plastics, along with re-vegetation. It appears that this phase of the remediation will be completed by the end of summer 2023. The Lavaca Bay remediation plan is still in the design phase. Overall, the goal of remediation is to remove most plastics from the environment while protecting the Cox Creek and Lavaca Bay ecosystems. Formosa must continue to work with Waterkeeper to ensure that remediation is conducted in accordance with the terms of the consent decree while maximizing consideration for the environment.

Effects of the Consent Decree on Formosa

Formosa has had a negative impact both financially and reputationally from this adverse decision. However, the process of working under a consent decree has offered an opportunity for Formosa to comply with its requirements in a way that allows for a more positive outcome for the company than might have been expected when the litigation began.

Stormwater System Will Help Protect against Future Flooding. The consent decree requires Formosa to design a stormwater system to handle a five-year storm event. For Formosa’s facility, this is 6.8 inches of rain in 24 hours. In order to achieve this requirement, Formosa consulted with engineers to design and implement underground culverts and collection systems, along with a stormwater pond system (Figure 4), all designed to hold a minimum of 10.5 inches. This engineered design will satisfy the consent decree’s stormwater requirements and help alleviate effects of significant rainfall events well beyond what is required by the consent decree. Because of this expansive stormwater system, flooding within the facility becomes much less of a risk, which is critical to the facility’s operations and safety, and helps minimize the risk of plastics being discharged from the facility.

This is important given the effects of climate change. Rainfall data for the Texas coast indicate that the frequency of intense storm events is increasing at a significant rate. Although every industry on the Texas coast will be impacted by these future higher rainfall levels, currently there is no requirement to design stormwater systems to cope with the likelihood of larger water quantities. The Consent Decree process gave Formosa the opportunity to build a system better prepared to handle the anticipated increase in rainfall levels. This means that flooding within the plant becomes much less of a risk for Formosa than for many other plastics and refinery facilities that lack the ability to handle these larger storm events.

 

Figure 4 — Stormwater Collection Ponds Under Construction at Formosa Plastics

Blackburn-Texas+Env-060723-Fig04
This illustration shows in light blue the stormwater collection ponds currently under construction at Formosa Plastics adjacent to Cox’s Creek. Once complete, these ponds will span 160 acres and be able to contain a rainfall event of 10.5 inches in 24 hours.
Source Image courtesy of Formosa Plastics

 

 

Modifications to Water Treatment System to Remove Plastics. Efforts to improve process wastewater quality begin at Formosa’s production units. Formosa is modifying its treatment systems of its process wastewater streams (see Figure 5) in order to remove plastics before the water reaches the facility’s Combined Water Treatment Plant (CWTP). In order to prevent plastics from entering CWTP, Formosa has implemented various filtration methods. New technologies are continuously being tested, including magnetic particle polarization. Progress continues to be made but is still in advanced testing stages.

Formosa also implemented temporary ultrafiltration (filtration to 0.04 micron) to treat water leaving CWTP prior to its discharge into Lavaca Bay. However, the WSM’s net samples continue to indicate the presence of plastics despite the wastewater discharge stream being generally free and clear. Membrane bioreactors and reverse osmosis capacity are currently under construction for long-term treatment solutions. Membrane bioreactors prevent the passage of particles the size of microorganisms. A reverse osmosis filter has a pore size of approximately 0.0001 micron, which has shown to be effective in removing protozoa and bacteria. Combined, these systems will allow process water reuse and recycle, further reducing the demands being placed on the wastewater discharge system. Formosa anticipates that these advanced systems will be online by late 2024, with the goal to ultimately address nanoparticles, well below the visible level.

 

Figure 5 — Illustration of Changes Being Made to Formosa’s Water Treatment Facilities

Blackburn-Texas+Env-060723-Fig05
Illustration of changes being made to Formosa’s facilities, including the addition of aeration tanks, a membrane bioreactor (MBR) system, and a reverse osmosis (RO) system to improve the wastewater discharge system. 
Source Image courtesy of Formosa Plastics

 

 

The key point here is that when these improvements are complete, Formosa will likely be at the forefront of both stormwater management and process wastewater treatment.

The impact of these improvements will also be important from a water supply standpoint. By creating such massive stormwater storage facilities, the opportunity now exists to recycle stormwater and use it within the plant, reducing the plant’s reliance on surface water sources. Similarly, by reaching a very high level of plastics removal and utilizing reverse osmosis, the plant will be in a position to recycle and reuse much of the process water in addition to the stormwater. 

Formosa will achieve zero discharge of stormwater, which will be a landmark on the Texas coast. It will recycle a substantial portion of its water use, reducing its demand for surface water, and is supporting Matagorda Bay in a way that no other bay on the Texas coast is supported. 

The work required to comply with the court order is in many ways the start of a discussion surrounding future challenges facing the company — a future that holds challenges such as reducing the carbon footprint and the demands of the circular economy on the plastics industry. Today, Formosa appears ready to tackle these challenges. The consent decree has set up the company to be above the curve for future demand.

EPA Draft National Strategy to Prevent Plastic Pollution. The Environmental Protection Agency (EPA) released a Draft National Strategy to Prevent Plastic Pollution on April 21, 2023, requesting public comments on how best to address plastic pollution within the United States.[54] Arguably, no other company will be as prepared as Formosa to address such concerns as they have been focused on decreasing plastic pollution from their facilities since 2019 and the signing of the consent decree. 

The EPA Draft Strategy, an out-growth of the agency’s National Recycling Strategy, sets out three objectives to address the plastic pollution problem; (1) reduce pollution during plastic production, (2) improve post-use materials management and (3) prevent trash and micro/nanoplastics from entering waterways and remove escaped trash from the environment.[55] The document seeks to establish potential measures needed to prevent the release of plastic waste into the environment, a mission that Formosa has been working on for almost four years thanks to the consent decree.

Without the loss of the original Waterkeeper lawsuit, Formosa would likely not be at the forefront of the EPA initiative, well positioned to be a leader in the industry on a nationwide scale.

Conclusion

Litigation is often viewed as destructive, negative, wasteful, or even specious. And while it should not be necessary to resort to the courts to achieve societal benefits, sometimes litigation can spur positive change. The two cases we’ve studied in this paper show how former adversaries in litigation can move beyond their legal disputes with creativity and the right attitude:

  • The Aransas Project case was started to protect one type of bird on the Texas coast and has led to a habitat conservation plan that will help protect numerous endangered species living in a broad river basin.
  • Initially aimed at stopping plastic pollution from an industrial complex, the Formosa Plastics case has also resulted in several projects to support the local waterway ecosystem and its community while showing manufacturers how enhanced flood control and water recycling can benefit both their business and the environment.

Both decisions provided the impetus for longer-term solutions that are steps toward sustainability based on cooperation rather than adversarial competition.

Author Bios

Jim Blackburn is a Professor in the Practice of Environmental Law in Civil and Environmental Engineering Department at Rice where he also serves as a Faculty Scholar at the Baker Institute. Mr. Blackburn was the lead litigation attorney for The Aransas Project and has sued Formosa Plastics in the past as well as working on several settlement agreements with Formosa and undertaking research contributed to by Formosa Plastics regarding the future of the plastics industry.

Jennifer Borski is a graduate of South Texas College of Law and recently passed the examination to become a member of the State Bar of Texas. She is working with Mr. Blackburn as a research lawyer. 

Endnotes


[1] Aransas Project v. Shaw, 930 F. Supp. 2d 716 (S.D. Tex 2013), https://casetext.com/case/aransas-project-v-shaw-2.

[2] Aransas Project v. Shaw, 756 F.3d 801 (5th Cir. 2014), https://casetext.com/case/aransas-project-v-shaw-3.

[3] San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp., No. 6:17-CV-0047, 2019 U.S. Dist. LEXIS 108082 (S.D. Tex. June 27, 2019), https://casetext.com/case/san-antonio-bay-estuarine-waterkeeper-v-formosa-plastics-corp.

[4] San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp. Tex., 852 F. App'x 816 (5th Cir. 2021), https://casetext.com/case/san-antonio-bay-estuarine-waterkeeper-v-formosa-plastics-corp-tex.

[5] Aransas Project v. Shaw, 930 F. Supp. 2d 716, 725 (S.D. Tex. 2013).

[6] Aransas Project, 930 F. Supp. 2d at 779.

[7] The whooping cranes at Aransas are the only self-sustaining wild population of whooping cranes, a naturally occurring flock that breeds in Canada and winters in Texas. There are also three reintroduced populations that have been formed with the help of captive breeding programs: https://www.allaboutbirds.org/guide/Whooping_Crane/overview#.

[8] Aransas Project, 930 F. Supp. 2d at 722.

[9] Aransas Project, 930 F. Supp. 2d at 723.

[10] Aransas Project, 930 F. Supp. 2d at 723.

[11] Aransas Project, 930 F. Supp. 2d at 725.

[12] Aransas Project, 930 F. Supp. 2d 716.

[13] Aransas Project, 930 F. Supp. 2d at 761.

[14] Aransas Project, 930 F. Supp. 2d at 764.

[15] Morgan Smith, “The Big Whoop,” Texas Tribune, March 11, 2010, https://www.texastribune.org/2010/03/11/environmental-group-will-sue-tceq-in-federal-court/.

[16] Aransas Project, 930 F. Supp. 2d at 724.

[17] Aransas Project, 930 F. Supp. 2d at 725.

[18] Aransas Project, 930 F. Supp. 2d at 726.

[19] Aransas Project, 930 F. Supp. 2d at 725.

[20] Aransas Project, 930 F. Supp. 2d at 753–754.

[21] Aransas Project, 930 F. Supp. 2d at 725.

[22] The term “take” means to “harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct”: 16 U.S.C. § 1532.

[23] Aransas Project, 930 F. Supp. 2d 716.

[24] Aransas Project v. Shaw, 756 F.3d 801 (5th Cir. 2014).

[25] Aransas Project, 756 F.3d at 824.

[26] Aransas Project, 756 F.3d 801.

[27] Aransas Project, 756 F.3d at 821.

[28] “Listed species” are those designated as either endangered or threatened in the U.S. under the Endangered Species Act, so “downlisting” refers to designation going from endangered to threatened: see https://www.epa.gov/endangered-species/endangered-species-species-information-factsheets. Endangered species have been categorized as very likely to become extinct in their known native ranges in the near future whereas a threatened species is any species which is likely to become an endangered species in the foreseeable future.

[29] U.S. Fish and Wildlife Service, “International Recovery Plan Whooping Crane,” Third Revision, March 2007, https://ecos.fws.gov/docs/recovery_plan/070604_v4.pdf.

[30] For an introduction to the Texas Hill Country’s karst topography, see: https://texashillcountry.com/karst-topography-texas-hill-country/.

[31] Technical Memorandum, “Covered Activities for the Guadalupe River Habitat Conservation Plan and Incidental Take Permit,” Guadalupe-Blanco River Authority, September 9, 2022, https://gbra.wpenginepowered.com/wp-content/uploads/2022/12/GRHCP-Covered-Activities-Technical-Memo-220909.pdf.

[32] https://www.gbra.org/environmental/habitat-conservation-plan/.

[33] https://www.fisheries.noaa.gov/permit/permits-incidental-taking-endangered-and-threatened-species.

[34] https://www.gbra.org/wp-content/uploads/2022/07/grhcppresentation20220628.pdf.

[35] San Antonio Bay Estuarine Waterkeeper is a local chapter of the New York environmental group Waterkeeper Alliance. For more information see: https://sanantoniobaywaterkeeper.org/.

[36] Waterkeeper, No. 6:17-CV-0047 at *2.

[37] Clean Water Act of 1972, 33 U.S.C. § 1251.

[38] Waterkeeper, No. 6:17-CV-0047 at *6–7.

[39] Waterkeeper, No. 6:17-CV-0047at *28.

[40] Waterkeeper, No. 6:17-CV-0047 at *15–16.

[41] Waterkeeper, No. 6:17-CV-0047 at *30.

[42] Consent Decree, San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp. (No. 6:17-cv-0047, S.D. Tex., December 06, 2019), https://mbmtrust.com/media/oxrhnrph/final-consent-decree-signed_12-06-2019.pdf.

[43] A broad definition of “process water” is “water used in industry, manufacturing processes, power generation and similar applications”: https://www.veoliawatertechnologies.com/en/applications/process-water.

[44] San Antonio Bay Estuarine Waterkeeper v. Formosa Plastics Corp. Tex., 852 F. App'x 816 (5th Cir. 2021).

[45] Waterkeeper Consent Decree, No. 6:17-cv-0047.

[46] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.56.

[47] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.57.

[48] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.58.

[49] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.59.

[50] A nurdle is “a plastic pellet which serves as raw material in the manufacturing of plastic products.” For more information about nurdles and the Nurdle Patrol see: https://nurdlepatrol.org/. There is also a Nurdle Patrol app: https://utmsi.utexas.edu/blog/entry/new-nurdle-patrol-app.

[51] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.60.

[52] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.61.

[53] Waterkeeper Consent Decree, No. 6:17-cv-0047 at IV.E.62.

[54] EPA, Draft National Strategy to Prevent Plastic Pollution, April 21, 2023, https://www.epa.gov/system/files/documents/2023-04/Draft_National_Strategy_to_Prevent_Plastic_Pollution.pdf.

[55] EPA, Draft National Strategy to Prevent Plastic Pollution.

 

 

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.

 

 

© 2023 by Rice University’s Baker Institute for Public Policy
https://doi.org/10.25613/w9wn-6m03
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