Attorney Sanders says Kentuckians for Better Transportation report $316.5 million motor fuel taxes for UST cleanups diverted to state general fund.

According to Kentuckians for Better Transportation, the Petroleum Storage Tank Assurance Fund, a tank remediation program and oil company indemnity fund for oil companies, is financed with a 1.4 cent per gallon levied on motor fuels. Normally, the gas tax generates about $44 million annually. Money in the fund is regularly swept into the state's General Fund to shore up the state's finances.

Members of Kentucky’s General Assembly apparently have no qualms about “sweeping fuel tax money out of the Petroleum Storage Tank Assurance Fund and into the General Fund. The motor fuel tax is intended to do two specific tasks: (1) clean environmental contamination from leaking underground storage tanks; and (2) help owners and operators of service stations meet the financial responsibility requirements in federal law.

The amount of money taken from this restricted fund is no small potatoes. In 2008, $81.5 million dollars in fuel tax dollars intended for the Petroleum Storage Tank Assurance Fund were diverted to the General Fund. In 2006, some $60.2 million dollars of fuel taxes collected for the fund were diverted. Including the current transfer, a total of $316.5 million has been diverted to the General Fund from the Petroleum Storage Tank Assurance Fund since its creation.”

The statute setting up this fund is clear and concise in its language: “It is the intent of the General Assembly that a state fund be created to assist petroleum storage tank owners or operators in complying with the federal financial responsibility requirements promulgated under federal regulations and to assist petroleum storage tank owners or operators in cleaning up contamination caused by a release.” There is nothing fancy or convoluted in the words setting up this tax on motor fuels or the intended purpose of this tax money.

Second, the 1.4 cent per gallon tax on motor fuels sold in Kentucky is supposed to be divided in the following manner: the financial assurance account shall receive four-tenths of one cent ($0.004) from the one and four- tenths cent ($0.014) paid on each gallon of gasoline and special fuels received in this state pursuant to KRS 224.60-145. The correct action account shall receive one cent ($0.01) from the one and four-tenths cent ($0.014) paid on each gallon of gasoline and special fuels received in this state pursuant to KRS 224.60-145.

The question is how is the General Assembly legally sweeping millions of dollars of these fuel tax dollars into the state’s general fund? Well, KRS 224.60-145 (5) reads:

Within thirty (30) days of the close of fiscal year 2001-2002 and each fiscal year thereafter, the state budget director shall review the balance of each account to determine if a surplus exists. "Surplus" means funds in excess of the amounts necessary to satisfy the obligations in each account for all eligible facilities, to satisfy future liabilities and expenses necessary to operate each account, and to maintain an appropriate reserve in the financial responsibility account to demonstrate financial responsibility and compensate for third-party claims. The state budget director shall report the determination to the Interim Joint Committee on Appropriations and Revenue. After a determination that a surplus exists, the surplus shall be transferred to a restricted account and retained until appropriated by the General Assembly.

Any person or entity who is, or has been, waiting months upon months on the state’s approval of payment from the Petroleum Storage Tank Assurance Fund for corrective action required at a gas station must wonder how the state budget director determined that a surplus of funds in the account. It begs the notion of what accounting standards are being employed in Frankfort.

Kentucky environmental attorney Sanders says USACE grants permit to Alaskan gold mine to dump mining wastes into lake.

Kensington gold mine in southeast Alaska has been granted a green light by the U.S. Army Corps of Engineers to dump millions of tons of finely ground waste material into a nearby lake. The project has been the subject of a national environmental fight over whether navigable lakes and rivers can be used as dump sites for toxic mine tailings.

The corps last week announced it was extending Coeur Alaska's permit until 2014 and said that the mining company could construct a tailings storage facility in Lower Slate Lake, below the gold mine.

The U.S. Supreme Court this year upheld the project, but U.S. EPA urged the Corps of Engineers to take a second look at the lake disposal plan in July 2009. The EPA and several conservation organizations have advocated that mine operators think about turning the waste material into a paste and depositing it on land on the other side of the mine.

The company declined this disposal option and will instead fill in a portion of the lake with the mine tailings that are the same size and consistency of talcum powder. According to web site for the Kensington Gold Mine, the site has been the subject of 900 environmental studies, extensive public input and agency review.

Environmental attorney Sanders predicts big changes for electric grid in future as a result of Ninth Circuit decision on transformer efficiency.

A recent Ninth Circuit U.S. Court of Appeals’ decision set up an agreement by the U.S. Department of Energy to review existing energy efficiency standards for electricity distribution transformers, the gray boxes mounted on utility poles. The agreement occurred in the case of People of California v. US Dept. of Energy. The state of California, Earthjustice, the Sierra Club and the Natural Resources Defense Council (NRDC) filed the lawsuit against DOE.

As a result of the appellate decision, DOE will also propose changes to maximize future savings three years earlier than it is otherwise required. The agreement is expected to speed up efforts to increase the efficiency and the cost-saving potential of energy transmission in the United States.

The transformers lawsuit was filed by the environmental groups in December 2007, challenging the Bush Administration’s weak energy efficiency standards. The states of California, New York, Connecticut, and New Jersey and the city of New York filed a similar lawsuit.

I predict that this case will have a major, far reaching impact on the electric grid in the U.S. Far too much electrical energy is wasted on the transmission side, and President Obama is gun ho for energy efficiency. So, look for USDOE to take advantage of this opportunity to push for more energy efficient transformers in the near future.

Kentucky environmental attorney Sanders says US DOE issues subpoena to AeroSys, Inc., for information on energy efficiency standards.

The U.S. Department of Energy issued a subpoena to AeroSys, Inc. to obtain data necessary to determine whether certain AeroSys commercial air conditioners and heat pumps comply with relevant Department of Energy (“DOE”) energy efficiency standards. The subpoena seeks detailed information about how AeroSys certified its compliance with applicable DOE standards and how it marketed its products.

Yesterday's action reflects the Obama Administration’s commitment to strengthen appliance efficiency standards that will save consumers millions of dollars and reduce greenhouse gas emissions across the country. President Obama and Secretary Chu have moved aggressively to clear the backlog of energy efficiency standards for appliances and reinforce the Department’s efforts to save energy for American consumers and businesses.

In February 2009, President Obama tasked the Department of Energy with quickening the pace of energy conservation standards for appliances, while continuing to meet legal and statutory deadlines. Since then, the Department of Energy has announced a series of efficiency standards, including an announcement in June that increased efficiency requirements for certain fluorescent and incandescent lamps, saving consumers between $1 and $4 billion per year.

There seems to be big trouble at this company and Secretary Chu is going kick some serious butt, if the company has been fibbing on its products' energy efficiency ratings. You can bet on it.

Kentucky environmental attorney Sanders says US EPA pops six entities for violations of Clean Water Act.

US EPA issued Consent Agreements and Final Orders (CA/FOs) against six entities throughout the Southeast for violations of the Clean Water Act (CWA). The defendants in Georgia, Kentucky, North Carolina and South Carolina agreed to come into compliance and pay a combined total of $207,500 in civil penalties.

Five entities were cited for alleged stormwater-related violations of the CWA. Polluted stormwater runoff is a leading cause of impairment to the nearly 40 percent of surveyed U.S. water bodies which do not meet water quality standards. Over land or via storm sewer systems, polluted runoff is discharged, often untreated, directly into local water bodies.

The settlements and associated penalties include:

• Capital City Club, for violations at the Brookhaven Golf Course in Atlanta, Ga. (civil penalty of $157,500);
• Grand Communities, Limited, for violations at its Granite Spring subdivision in Cold Spring, Ky. (civil penalty of $12,000);
• Chase-Reese-Carlisle, LLC, for violations at its Steeplechase subdivision in Richwood, Ky. (civil penalty of $5,500);
• Louisburg Plaza, LLC, for violations at its Louisburg subdivision in Louisburg, N.C. (civil penalty of $5,000); and
• BBS Builders and Development Co., LLC, for violations at its Mitchiner Hills subdivision in Clayton, N.C. (civil penalty of $15,000).

A settlement was also reached with Greenwood Metropolitan District, which agreed to pay a civil penalty of $12,500, for exceeding the Whole Effluent Toxicity (WET) requirements of its National Pollutant Discharge Elimination System permit at the wastewater treatment plant in Greenwood, S.C.

WET is the total toxic effect of effluent measured directly with a toxicity test. It is a useful parameter for assessing and protecting against aggregate impacts from the discharge of pollutants.

Kentucky environmental attorney Sanders confirms that US EPA has an agreed order on consent with Wisconsin Plating of Racine for CAA violations.

U.S. EPA Region 5 has reached an agreement with Wisconsin Plating of Racine (formerly Racine Plating Co.) on alleged Clean Air Act violations at the company's facility at 620 Stannard St., Racine, Wis.

The agreement, which includes a $30,000 penalty, resolves EPA allegations that Wisconsin Plating violated EPA regulations regarding control of hazardous air pollutant emissions from solvent cleaning machines. The company uses the hazardous air pollutant trichloroethylene in its vapor degreaser. EPA learned of the alleged violations from the company's semi-annual report required by the national emissions standard for hazardous air pollutants.

Breathing or drinking high levels of trichloroethylene may cause nervous system effects and liver and lung damage. It is used mainly as a solvent for cleaning metal and plastic parts.

Kentucky environmental attorney Sanders says Michigan flooded with $1 billion in grants for new battery technology projects.

President Obama announced that $1 billion in grants were awarded to companies and universities based in Michigan. Reflecting the state’s leadership in clean energy manufacturing, Michigan companies and institutions are receiving the largest share of grant funding of any state.

Two companies, A123 and Johnson Controls, will receive a total of approximately $550 million to establish a manufacturing base in the state for advanced batteries, and two others, Compact Power and Dow Kokam, will receive a total of over $300 million for manufacturing battery cells and materials.

Large automakers based in Michigan, including GM, Chrysler, and Ford, will receive a total of more than $400 million to manufacture thousands of advanced hybrid and electric vehicles as well as batteries and electric drive components.

Three educational institutions in Michigan, the University of Michigan, Wayne State University in Detroit, and Michigan Technological University in Houghton in the Upper Peninsula, will receive a total of more than $10 million for education and workforce training programs to train researchers, technicians and service providers, and to conduct consumer research to accelerate the transition towards advanced vehicles and batteries.

Kentucky attorney Sanders asks what happens to clunker cars traded in under the CARS program?

The CARS Act requires that the trade-in vehicle be crushed or shredded so that it will not be resold for use in the United States or elsewhere, as an automobile. The entity crushing or shredding the vehicles in this manner will be allowed to sell some parts of the vehicle prior to crushing or shredding it, but these parts cannot include the engine or the drive train.

Indeed, car dealers must destroy the engines of every vehicle they take in through the Car Allowance Rebate System (CARS) Program, formerly known as “Cash for Clunkers.” The Engine Disablement Procedures for the CARS Program call for dealers to drain all engine oil from the trade-in vehicle, re-install the oil drain plug, add two quarts of the sodium silicate solution, replace the oil fill cap and run the engine at 2000 rpm until the engine stops.

The agency has tested this method at its Vehicle Research and Test Center and found it safe, quick, and effective, according to the NHTSA Final Rule for CARS.