Background

The popularity of craft beer has been steadily increasing as more people want to support small, local businesses and desire a more complex tasting beer. As demand for craft beer has increased, so has supply. By the end of 2016, there were over 5300 craft breweries in America, with another 2000 in the planning stages—a seventeen percent increase from 2015. The Brewers Association categorizes an American craft brewery as “small” if less than six million barrels a year, “independent” if less than twenty-five percent of the brewery is owned or controlled by a non-craft brewer industry member, or “traditional if the majority of beer derives flavor from traditional brewing ingredients and their fermentation).

While beer lovers the world over can appreciate a good craft beer, behind the industry lies a slew of adverse environmental consequences. One of the most pressing environmental issues craft breweries are facing is the processing and disposal of wastewater. When brewery wastewater is dumped into public waters without being treated, it can cause plant, algae, and bacteria growth, which all lead to reduced oxygen levels and can eventually lead to the eutrophication of a body of water, making it uninhabitable to most aquatic life. This is mostly an effect of the solid waste in brewery wastewater – including spent grains, yeast, and hops – that can weigh up to fifty pounds per barrel of beer produced.

Production and Regulation

Water is the most essential part of the brewing process. Not only does water make up about ninety percent of the actual finished product, it is used in every part of the production process from growing hops to cleaning the equipment after a brew. As a result, one barrel of beer takes about seven barrels of water to create using traditional methods. Accordingly, breweries use an enormous amount of water. The United States produces more than twenty million barrels of beer a year, and although craft breweries only contribute to twenty percent of total U.S. production, the craft brewing industry can potentially place a huge strain on water supplies. However, craft breweries have shown themselves to be sustainably minded and oriented toward conservation. Many craft brewers have been able to decrease the amount of water used in production from seven barrels to just three per barrel of beer.

The Clean Water Act (“CWA”) regulates the discharging of all pollutants discharged into United States waters. The CWA has specific requirements for discharging industrial waste into publically-owned water treatment facilities. Unlike most domestic wastewater, brewery wastewater is high in sugar, alcohol, solids, and temperature which municipal water treatment plants were not designed to process. For this reason, breweries are often required to pre-treat their wastewater before sending it to municipal treatment plants. Violating the Clean Water Act can lead to enormous fines, which can cripple a craft brewery as most are relatively small businesses. Yuengling, a major craft brewery out of Pennsylvania, was recently charged with allegedly violating the CWA by the Department of Justice for not pre-treating its wastewater. Although both parties entered into a consent decree—a settlement agreement where the defendant does not admit liability—the brewery still had to pay 2.8 million dollars in penalties for violating the CWA as part of the settlement. Aside from the CWA, municipal water regulations may also affect craft breweries by limiting certain types of pollution such as: biochemical oxygen demand (BOD), chemical oxygen demand (COD), total suspended solids (TSS), total dissolve solids (TDS), and pH. Such local regulations can also carry huge fines if violated.

Wastewater Treatment Advances

Managing wastewater is one effective way that craft breweries have found to reduce overall water consumption – saving water and simultaneously reducing costs of operations. Bear Republic Brewing Company out of Sonoma, California has installed a bio-electrically enhanced wastewater treatment mechanism called EcoVolt in response to the crippling drought that California breweries are facing. EcoVolt is unique as the first and only industrial-scale, bio-electrically enhanced treatment system. The system introduces electrically active organisms that eliminate up to ninety percent of the biological oxygen demand—a pollutant. The system also converts carbon dioxide into biogas—mixtures of gases—hat can be used to generate heat and electricity for Bear Republic’s production process. EcoVolt allows Bear Republic to reuse around twenty-five percent of its wastewater, which cuts down the amount of water used for production to 3.5 barrels per barrel of beer instead of the traditional seven. As an added benefit, the system cuts Bear Republics’ baseload electricity use in half. Savings in both water and energy use have cut the brewery’s operational costs by hundreds of thousands of dollars annually. As Bear Republic has proven, installing new wastewater treatment systems is an effective way to save water and simultaneously reduce costs of operations in the long run. However, it is often too expensive for smaller microbreweries to install.

New Belgium Brewing Company out of Fort Collins, Colorado utilizes a different treatment process than Bear Republic. New Belgium uses microbes to consume residual biomass leftover from the brewing process. Aside from cleaning the water, the microbes also produce methane that is collected and turned into electricity that powers New Belgium’s production process. After being exposed to the microbes, the water is sent through an aerobic digester, which breaks down any remaining organic matter through the use of oxygen. New Belgium claims that its wastewater comes out so clean after the aerobic digestion process that the brewery could legally discharge it directly into the nearest river if it so wished.

As of now, wastewater is generally banned for human consumption, however Clean Water Services in Oregon is trying to change that. Oregon regulations have long allowed treated wastewater to be used for the industrial processes of the brewing process, but not as a part of the final product to be consumed. Clean Water Services petitioned the state for permission to use wastewater that has been treated with the company’s “high-purity” treatment system in beer, and were granted limited permission to do so. As a test run, Clean Water Services gave its treated wastewater to the Oregon Brew Crew, whose members made small batches of beer for a sustainable water brewing challenge. The company has recently installed its “high-purity” system at the four wastewater treatment plants it owns and operates in the Portland area, and the purity of the water exceeds even the most stringent standards for water quality. Clean Water Services is so confident in the effectiveness of its treatment system that it claims it can turn sewage into drinking water.

Conclusion

Although craft brewing is a water-intensive process, the industry has fortunately proven itself to be highly water conscious and dedicated to conservation. Most craft breweries are installing advanced wastewater treatment systems to offset both costs of production and costs to the environment. Although such options still remain relatively expensive, advanced wastewater treatments have proven to be a financially strategic option for those craft breweries that can afford it. Furthermore, such treatment options have the potential to cut a craft brewery’s water use in half, and in places where it may soon be legal to include wastewater in the finished product, water use could potentially be cut even further. Especially in the West, where drought periodically plagues the land, it is important that these advances in wastewater treatment continue to proliferate.

Jeremy Frankel

Image: Craft Beer Sampler. Flickr user QuinnDombrowski, Creative Commons.

 

Sources

Bear Republic Brewing Company and Cambrian Innovation Unveil Pioneering Wastewater Treatment to Energy System, Cambrian Innovation (Jan. 15, 2014), http://cambrianinnovation.com/bearrepublic_announcement.

Cassanra Profita, Why Dump Treated Wastewater When You Can Make Beer With It?, NPR (Jan. 28, 2015), http://www.npr.org/sections/thesalt/2015/01/28/381920192/why-dump-treated-wastewater-when-you-could-make-beer-with-it.

Hannah Fish, Effects of the Craft Beer Boom in Virginia: How Breweries, Regulators, and the Public Can Collaborate to Mitigate Environmental Impacts, 40 Wm. & Mary Envtl. L. & Pol’y Rev. 273 (2015).

Home Brew Competition to Feature Beer Made with Water from Wastewater Treatment Plant, Clean Water Services (Sept. 7, 2016), https://www.cleanwaterservices.org/newsroom/2016/home-brew-competition-to-feature-beer-made-with-water-from-wastewater-treatment-plant.

James Tilton, Drinking Beer is Not a Conservation Measure, U. Denv. Water L. Rev. (Nov. 24, 2015), http://duwaterlawreview.com/drinking-beer-not-a-conservation-measure.

K.C. Cunilio, An In-Depth Look at Yuengling’s 10 Million Dollar Clean Water Act Settlement, Porchdrinking.com (July 28, 2016), https://www.porchdrinking.com/articles/2016/07/18/in-depth-look-yuenglings-10-million-dollar-clean-water-act-settlement.

RJ Alexander, Sustainable Craft Brewing: The Legal Challenges, TriplePundit (June 6, 2012), http://www.triplepundit.com/2012/06/legal-issues-in-beer-brewing.

 

 


Alaska Wilderness League v. Jewell, 788 F.3d 1212 (9th Cir. 2015) (affirming the district court’s ruling that: (i) the Bureau of Safety and Environmental Enforcement’s approval of the challenged oil spill response plans was not arbitrary and capricious; (ii) the Endangered Species Act did not require the Bureau of Safety and Environmental Enforcement to consult with any environmental agencies before approving oil spill response plans; (iii) the Bureau of Safety and Environmental Enforcement was entitled to Chevron deference for its interpretation of the Oil Pollution Act; and (iv) the National Environmental Policy Act did not require the Bureau of Safety and Environmental Enforcement to do an environmental impact statement before approving an oil spill response plan).

The Outer Continental Shelf Lands Act (“OCSLA”) outlines the procedure for exploration and development of oil and gas resources offshore. This process has four stages. First, the Secretary of Interior creates a five-year leasing program under which operators may search and mine for oil and gas. Second, the Secretary must approve the leases under agreed upon terms and conditions. Third, the lessee must provide the Secretary with a plan of exploration and an Oil Spill Response Plan (“OSRP”) pursuant to the Clean Water Act (“CWA”). Fourth, after searching for oil and gas, and successfully finding either, the lessee has must submit a production and development plan to the Secretary for approval.

At the third stage, the Secretary of the Interior has delegated its power to the Bureau of Safety and Environmental Enforcement (“BSEE”) to approve OSRPs to prevent and respond to oil spills. The CWA requires these plans at four levels: national, regional, local, and individual. At the individual level, owners and operators must propose an OSRP for approval that outlines their response to a potential “worst case discharge” of oil or some other hazardous substance.

Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively “Shell”) acquired three leases for offshore exploration and production—two leases in the Beaufort in 2005 and 2007, and one in the Chukchi Seas in 2008. Shell complied with all regulations at the time for intended exploration, but due to the Deepwater Horizon oil spill in 2010, the Secretary of the Interior placed a temporary moratorium on all offshore drilling. The United States Department of Interior required owners and operators to provide new information in all OSRPs after the moratorium ended. To comply with the new criteria, Shell updated its OSRPs for its three leases. BSEE approved the updated Beaufort and Chukchi Seas OSRPs.

Alaska Wilderness League, a coalition of environmental groups, sued Secretary of Interior, Sally Jewell, in her official capacity because of the approval of Shell’s three OSRPs. Shell intervened as a co-defendant. On cross-motions for summary judgment, the United States District Court for the District of Alaska (“district court”) ruled in favor of Jewell and Shell. Alaska Wilderness League appealed to the United States Court of Appeals, Ninth Circuit (“Court”). The Court reviewed the granting of summary judgment de novo and reviewed the record of the agency’s action under the arbitrary and capricious standard.

First, Alaska Wilderness League argued BSEE’s approval of the OSRPs was arbitrary and capricious because Shell assumed it would be able to recover ninety to ninety-five percent of any oil spilled in either of the seas via mechanical means. A figure that Alaska Wilderness League claimed was unrealistic and that Shell failed to support with any evidence. The Court did not agree with Alaska Wilderness League’s interpretation, finding instead that Shell could store, not recover, ninety to ninety-five percent of any spilled oil. Further, the Court found that BSEE did not rely on this information in approving Shell’s OSRPs. Therefore, the Court found that the record did not support Alaska Wilderness League’s argument. Accordingly, the Court concluded BSEE’s approval of the OSRPs was not arbitrary and capricious.

The Court next addressed Alaska Wilderness League’s argument that BSEE failed to consult with other agencies in order to comply with the Endangered Species Act (“ESA”). The Court disagreed. The Court reasoned that ESA only triggers consultation when the agency’s involvement is discretionary, and, in this case, BSEE’s approval of the OSRPs was non-discretionary. Therefore, the Court held that ESA did not require BSEE to do a consultation.

The Court then went through a two-step Chevron deference analysis to assess BSEE’s interpretation of the applicable sections of the CWA. At step one of its Chevron analysis, whether the statute in question is ambiguous, the Court found that the CWA was ambiguous in both its structure and its language. The Court found the CWA has ambiguous language because of three pertinent sections: (i) 33 U.S.C. § 1321(j)(5)(A)(i) requires an operator to “prepare and submit . . . a plan for responding, to the maximum extent practicable, to a worst case discharge;” (ii) § 1321(j)(5)(D) lists six requirements that the OSRP “shall” meet; and (iii) § 1321(j)(5)(E)(iii) states that if the OSRP meets all six requirements, then BSEE “shall” approve it.

Specifically, the Court found the text ambiguous as to whether BSEE has the discretion to consider any additional environmental factors in making its determination of an OSRP. The Court found that the “maximum extent practicable” language in § 1321(j)(5)(A)(i) suggested the agency had discretion in its approval of an OSRP. However, the Court also found §§ 1321(j)(5)(D) and 1321(j)(5)(E)(iii) to be a laundry list of requirements that an OSRP must meet. If an OSRP meets those requirements, then BSEE must approve the plan; removing any agency discretion. Additionally, the Court found the statute’s structure ambiguous because of the discretionary language in one section, and the rigid language in the one following it. The Court found this difference created “a statute whose halves do not correspond to each other – giving rise to ambiguity that calls for Chevron deference.” Under this finding of ambiguity, the Court found it must defer to BSEE’s interpretation of the statute as long as its interpretation is reasonable.

The Court then underwent the second step of the Chevron analysis to determine whether BSEE’s interpretation was reasonable. Courts must defer to an agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable. The Court found that BSEE’s interpretation of the statute was reasonable. BSEE argued that § 1321(j)(5)(A)(i) mandated it to promulgate regulations that help operators follow the OSRP requirements listed in § 1321(j)(5)(D). Then, separately, § 1321(j)(5)(D)-(E) lists exactly what the OSRP shall include and the agency shall approve. The Court agreed with BSEE’s interpretation that the statute mandated the agency to publish regulations to outline how operators can comply with the list. The Court also agreed with BSEE’s interpretation that it could not consider anything more than the list when granting an OSRP. The Court, having found BSEE’s interpretation to be reasonable, deferred to the agency’s interpretation.

The Court also found that BSEE’s interpretation was consistent with longstanding agency policy. The Court explained how BSEE has a history of regulating in conformity with the goals of the Oil Pollution Act that amended the CWA. The legislative history of the Oil Pollution Act suggests that Congress meant to create specific requirements of OSRPs, not guidelines open to interpretation by the courts or agencies.

Lastly, the Court addressed Alaska Wilderness League’s four additional arguments. First, Alaska Wilderness League argued that the similarity in language between the requirements listed in § 1321(j)(5)(E) and the section of the statute governing federal response plans to spills subjected the approval of OSRPs to ESA consultation. However, the Court disagreed with this interpretation. Under the sections of the statute governing federal response plans, an ESA recommendation may prompt agency action, but the plan “shall include, but not be limited to” a number of factors. This federal response plan requirement, unlike that in § 1321(j)(5)(E), does not limit the factors to those listed.

Second, Alaska Wilderness League argued that the regulations contain no language to support approval of the OSRPs just because they address the clean up plan to some degree. The Court quickly dismissed this argument. The Court found that the statute states that the purpose of the OSRP is to prepare a response plan for an accident at sea resulting in release of oil, and that Congress ordered these plans be in compliance with “the Oil Pollution Act’s amendments to the Clean Water Act.” The Court deferred to BSEE’s interpretation that the OSRPs were sufficient and justly approved, despite any explicit language governing BSEE’s decision.

Third, Alaska Wilderness League argued that BSEE had discretion over whether OSRPs met the criteria in § 1321(j)(5)(E), thus triggering ESA consultation. The Court found this argument to be at odds with previous Supreme Court’s rulings. The Supreme Court previously held that “ESA cannot defeat an agency’s nondiscretionary statutory directive.” The Court held that BSEE’s act of granting OSRPs was nondiscretionary, and so it did not trigger any interagency review under ESA.

Lastly, Alaska Wilderness League claimed that BSEE violated the National Environmental Policy Act (“NEPA”) by failing to do an environmental impact statement (“EIS”) before approving the OSRPs. Under NEPA, all federal agencies must conduct an EIS before conducting any “major Federal action” that significantly affects the environment. However, the Court noted that there is an exception to this requirement when the environmental impact is the result of a decision over which the agency had no discretion. The Court ruled that because BSEE had no discretion over the approval of the OSRPs under the statute, it also had no discretion over the environmental impacts, making BSEE exempt from performing an EIS.

Accordingly, the Court affirmed the district court’s ruling.

D.W. Nelson, Senior Circuit Judge, dissenting.

Senior Circuit Judge Nelson agreed with the majority’s ruling that BSEE acted appropriately when it approved the OSRPs in question, but dissented to all other aspects of the majority opinion. Specifically, the dissent agreed with Alaska Wilderness League’s contention that BSEE’s action was discretionary, triggering an ESA consultation.

The dissent also disagreed with the majority’s finding that BSEE was exempt from performing a NEPA analysis. The dissent did not agree with the majority’s interpretation of the NEPA exception. The dissent argued that as a regulator of environmental consequences “the [BSEE] did in fact possess the kind of discretion that necessitated NEPA review.”

William James Tilton

Image: Deepwater Horizon oil spill, Gulf of Mexico. Flickr user Green Fire Productions, Creative Commons.


Askins v. Ohio Dep’t of Agric., 809 F.3d 868 (6th Cir. 2016) (holding that i) the Clean Water Act’s citizen suit provision does not apply to notification requirements; ii) the Clean Water Act’s notification requirement is not a condition of a National Pollutant Discharge Elimination System permit; iii) the Clean Water Act does not permit a cause of action against non-polluting regulators for violations of procedural regulations; and iv) the U.S. Environmental Protection Agency’s decision not to hold a hearing was not a failure to perform a non-discretionary duty, and as such was not actionable under the Clean Water Act).

This was an appeal from The United States District Court for the Northern District of Ohio, which dismissed all of appellants’, Larry and Vickie Askins (“Askinses”), claims.  The Ohio Environmental Protection Agency (“Ohio EPA”) administers the National Pollutant Discharge Elimination System (“NPDES”) under the U.S. Environmental Protection Agency’s (“U.S. EPA”) approval.  In 2001, the Ohio legislature authorized the Ohio Department of Agriculture (“ODA”) to apply to the U.S. EPA to transfer authority from Ohio EPA to ODA, so that ODA could administer part of the state-NPDES program.  The Clean Water Act (“CWA”) permits such a transfer, but requires the U.S. EPA’s permission prior to transfer.  The Askinses alleged that the transfer took place in 2001, while the Ohio EPA didn’t seek permission until some five years later.  As such, the Askinses sued under the CWA’s citizen suit provision, alleging various violations of the CWA.

The lower court held that the Askinses failed to state a claim under the CWA, the U.S. EPA did not fail to perform a non-discretionary duty under the CWA, and the U.S. EPA, the Ohio EPA, and the ODA did not violate the CWA.  The Askinses appealed to the Sixth Circuit Court of Appeals (“Court”), arguing that the CWA’s citizen suit provision permitted their cause of action.

First, the Court considered whether the Askinses could maintain a citizen suit action for a violation of the CWA’s notice requirement under Section 1314.  The Court reasoned that the notice requirement at issue is not an enumerated provision requiring compliance, and as such, the citizen suit provision does not encompass alleged violations of the requirement.

Next, the Court considered whether the notification requirement was a “condition.”  The Court concluded that the notification requirement serves as a timing mechanism, which triggers a state’s ability to apply to administer the NPDES program, as opposed to a substantive requirement.  Further, the notification requirement referred to EPA approval of a state’s permit program, not a state’s approval of individual permits.  Finally, the Court concluded that the Askinses’ reading of the notification requirement as a condition was contradictory to NPDES requirements, specifically that state and federal permit conditions be the same.  As such, the Court held that the CWA’s notification requirement is not a permit “condition.”

Third, the Court determined whether there existed a private cause of action against regulators for violations of procedural regulations.  The Court concluded that if Congress intended the citizen suit provision to permit the Askinses’ claim, it would have included language in the explicitly enumerated circumstances permitting suit.  Further, if the citizen suit provision were so expansive as to permit this claim, the provision’s remedies would give it more teeth than the U.S. EPA itself has, by way of the provision’s shorter notice period and availability of civil penalties and costs.  This is not the case because Congress intended the citizen suit provision to supplement the regulators’ authority.  Finally, cases that considered other, identical citizen suit provisions reached the same conclusion as this Court.  Therefore, the Court held, the CWA citizen suit provision did not permit a private right of action against a non-polluting regulator for procedural violations.

Finally, the Court considered whether the U.S. EPA failed to perform a non-discretionary duty.  The Court held that the CWA does not require the U.S. EPA to hold a hearing.  Should the U.S. EPA choose to hold a hearing, the CWA requires it to withdraw approval of a state-NPDES program after hearing, proper notice, and time to address the issue.  That is to say, the CWA does not require a hearing in the first place; therefore it is not a non-discretionary duty.  The U.S. EPA did not hold a hearing in the present case, so no non-discretionary duties arose.  Thus, the CWA did not permit the Askinses’ citizen suit.

Accordingly, the Court affirmed the lower court’s dismissal for lack of subject-matter jurisdiction.

Tim Berrier