CHAPTER 3 THE REGULATION OF INDUSTRIAL SITE SELECTION IN WESTERN STATES

• Jurisdiction: United States

Western Land Use Regulation and Mined Land Reclamation
(Nov 1979)
CHAPTER 3
THE REGULATION OF INDUSTRIAL SITE SELECTION IN WESTERN STATES
Marilyn S. Kite ^*
Laramie, Wyoming

INDEX

SYNOPSIS

I. INTRODUCTION

II. RATIONALE FOR SOUND INDUSTRIAL SITE PLANNING BY STATES

A. Advantages

B. Criteria for Sound Industrial Site Planning by States

III. EXISTING SITING SCHEMES

A. Types of Statutes

1. Facility Siting Acts

2. Land Use Planning Acts

3. Traditional Environmental Regulations Affecting Industrial Site Selection

B. Western States siting Requirements

1. Wyoming

a. Industrial Siting

b. Land Use Planning

2. Nevada

3. Colorado

4. North Dakota

5. Montana

6. Utah

7. New Mexico

IV. STREAMING OF FACILITY SITING—RECOGNITION OF THE PROBLEM INHERENT IN MULTILEVEL PLANNING

A. Colorado

B. Wyoming

V. FEDERAL RESPONSE TO NEED FOR STREAMLINING THE SITING PROCESS

VI. CONCLUSION

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I. INTRODUCTION

One of the first considerations that arises in a proposal to construct an industrial facility is location. Perhaps the question of location is second only to the identification of a demand for the product to be produced. As the Western states have increasingly become the location chosen by energy developers, those states have become more sensitive to the question of industrial site selection.

Western states have promulgated a multitude of statutes and regulations granting to their agencies and local governments the power to control the siting of mines and industrial facilities within their respective jurisdictions. Land use and siting acts have been adopted which impose an additional tier in the complex regulatory system of state and federal agencies that affects the construction of mines and industrial facilities.¹ Because of the cost of transporting coal or other minerals from a mine site to conversion or milling facilities, even statutes which affect only the construction of such facilities and power lines will have a significant effect on the profitability and feasibility of mineral extraction.²

The issues in site selection are different from those faced by operators in traditional environmental regulation. Historically ,a facility simply had to demonstrate that it could meet objective, technology-based standards limiting the discharge of pollutants into the environment or requiring restoration of disturbed lands. Industrial site selection regulations are generally based upon more subjective and public policy oriented standards. The question usually is reduced to a decision of whether the site chosen is "acceptable" and "compatible" with surrounding land uses, and whether all possible socio-economic and environmental impacts are mitigated.

As the Western states began to experience more intense impacts of booming development of the area's natural resources, state legislatures perceived a need to create a regulatory process which would have the ability to review the overall impacts of a proposed industrial development, including the cumulative impacts of numerous facilities, and to make a judgement on the advisability of the selection of a particular site for development. Emerging from this effort were industrial siting schemes and increased land use planning authority

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aimed at regulation of the selection of industrial sites in the West.

Land use and siting statutes often require input from other state agencies concerned with environmental issues and, in addition, independent consideration of environmental factors. This overlap of jurisdiction results in in conflicting assessments of the environmental, economic, or social impact of a single proposed facility by agencies with differing responsibilities and perspectives. Land use and siting statutes have expanded the traditional approach to regulate the economic and social impact of a facility. The costs of alleviating some of these impacts have been placed on the facilities either directly through requiring the operator to pay for housing and other support systems³ or indirectly through severance taxes on the mineral.⁴

Compliance with these new site selection regulations presents new problems and challenges for the developers of the area's natural resources. Understanding the subjective criteria and designing the proposed facility to comply with those criteria can be a more difficult task than achieving compliance with explicit numerical standards based upon technology. Obvious problems of duplication and overlapping jurisdiction are created by the site regulation process. This paper will examine the rationale for regulation of site selection, the elements of the site selection regulations, the schemes created by certain representative states and the federal and state responses to the increasingly complex process of industrial site selection, emphasising site selection for mineral development.

II. RATIONALE FOR SOUND INDUSTRIAL SITE PLANNING BY STATES.

Sound industrial site planning and selection on the state level has several advantages for both the developer and the public. The difficulty is structuring the process to minimize unnecessary delay, duplication, and confusion. It is helpful to first examine the advantages of advance site planning and then to identify preferred criteria for a sound site selection system.

A. Advantages.

The obvious benefit to the operator of sound advance industrial site planning is allowing him to plan exploration,

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property acquisition, and design of the proposed development with a general understanding of the geographical areas acceptable for industrial development. If that understanding is accurate and based upon sound information, it could reduce the amount of time delays, unnecessary expenditures, and organized local opposition. If acceptable sites for mineral development are identified with public participation in advance, opposition to the location of a facility should be reduced.⁵ Typically, environmental groups question the general location of a facility, not its ability to comply with substantive regulations. In addition, advance site selection would serve to eliminate those areas in which compliance with substantive environmental restrictions would be difficult if not impossible, such as in limited air sheds and near water quality limited streams or historical sites.

Further, sound advance planning should reduce the need for changes in substantive requirements applied to a facility after it has commenced construction. If the regulators have examined and approved proposed industrial sites in advance, they will be more likely to identify the necessary substantive requirements from the outset instead of reacting after-the-fact to an actual proposal.

Regulations which alter or limit the uses to which property can be put may potentially subject the landowner to an unconstitutional taking of his property.⁶ The owner of industrial land or minerals may be subjected to a substantial economic loss by a decision which excludes his property from an inventory of approvable industrial sites. Furthermore, the owners of land which is chosen as an approved site may enjoy a windfall. Without considering the constitutionality of specific decisions, it can be stated as a general rule that advanced industrial site planning minimizes these unequitable consequences by giving advance notice to the developer of those areas that are acceptable for the planned use and reducing the chance that substantial funds will be spent on unacceptable sites.

The U.S. Constitution also prohibits state and local regulations which are an unreasonable burden on interstate commerce. The Supreme Court has affirmed this prohibition in recent decisions on the validity of environmental legislation. Legislation which impacts on interstate commerce is valid if, and only if, it is perceived as counteracting a burden on the state caused by the interstate commerce.⁷ The interstate

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commerce issue will emerge when state and local decisions affecting commerce are made under facility siting acts or land use authority, especially those relating to interstate electrical transmission lines or coal slurry pipelines. Commerce clause problems can be anticipated during preplanning to avoid litigation at the time an interstate project is proposed. Furthermore, preplanning may allow for states to enter into interstate compacts or similar agreements which allow the coordination of the selection of corridors for pipelines or transmission lines which must cross state borders.

Another constitutional restriction on state and local regulation of industrial site selection which may be avoided with sound site planning is the Supremacy Clause. This provision has been interpreted to authorize the pre-emption of state laws specifically in areas substantially regulated by federal law if the state law is inconsistent with the administration of the federal law. The potential for conflict arises when state siting acts conflict with federal regulations which control a particular industry or federal land use planning efforts.⁸ Pre-emption could be claimed if land use decisions of a state deprive the federal government of revenues from its mineral lands.⁹ The possibility of pre-emption also arises when a siting act or land use act is applied to an industry that is expressly regulated by the federal government and the state and federal measures cannot be reconciled.¹⁰ In Colorado, the issue has emerged in the context of a county's attempts to regulate the activities of an intrastate company which was subject to a comprehensive and pre-emptive federal regulatory scheme.

Pre-emption may occur through the Federal Land Policy and Management Act ("FLPMA")¹¹ which requires the Secretary of the Interior to develop and maintain land use plans for public lands. The authority to develop and maintain the plans has been delegated to the Bureau of Land Management which has recently issued a series of...