The following student post is by Erica Shell (B.A., Vanderbilt University; M.A., University of Detroit Mercy; J.D., Wayne State University Law School, expected 2015). While in law school, Erica participated in the Transnational Environmental Law Clinic, as well as Moot Court, the Journal of Law in Society, and the Pace National Environmental Law Moot Court team. She also interned at the United States District Court for the Eastern District of Michigan and a large Detroit law firm, where she will be returning to practice next fall. Erica was one of the clinic Wayne Law clinic students working on issues ranging from the New International Trade Crossing to petroleum coke. Her article on improving regulatory strategies for petroleum coke storage and transportation will appear in an upcoming issue of the Michigan Environmental Law Journal.
Many Metro Detroit residents remember the massive piles of black rubble and dust that appeared alongside the Detroit River in mid 2013. Others have noticed recent political ads featuring more black dust and describing the connection between two billionaire brothers and a Michigan candidate for United States Senate. Alongside fellow clinic students Paul Stewart, Patrick Tully and Ben McCoy, I explored the range of issues surrounding petroleum coke, often referred to as “petcoke.”
Petcoke is a product created when petroleum manufacturers process heavy tar sands oil, or bitumen, into more readily usable products. By heating bitumen to extremely high temperatures, petcoke collects on the sides and bottom of the container while usable oil floats to the top. My work with the clinic identified a number of issues related to petcoke production, storage, and transportation in Michigan.
Even though petcoke can be sold in competitive markets around the world, producers rely on pollution control tax exemptions from the Michigan government to subsidize its production. They obtain these exemptions by characterizing petcoke as a byproduct, despite their ability to resell petcoke on an open market. These tax subsidies allow producers to undercut the price of traditional coal.
According to Michigan law, pollution control tax exemptions should not be awarded when the machine or facility in question produces marketable product. Part 59, PA 451 of 1994 notes that the air pollution control exemption applies only to equipment installed “for the primary purpose of controlling or disposing of air pollution.” This definition excludes “equipment acquired or installed for the benefit of…a business.” Where equipment serves a mixed business and pollution control purpose, the amount of the exemption shall be “reduced by the gross annual commercial or productive value derived from any materials captured or removed.” Despite the fact that Detroit’s petcoke represents a marketable commodity, at least one petroleum refinery located in Metro Detroit has received the entire requested exemption.
Petcoke’s storage has also caused a number of problems in the Metro Detroit region, most notably those resulting from the infamous Detroit River pile. Dust and debris from the pile created particulate air pollution and a nuisance for area residents and businesses. Clinic students participated in submitting public comments to the Detroit Zoning Board of Appeals (ZBA) and appearing at hearings. The ZBA eventually determined that the pile’s owner could not store the petcoke in the open like other bulk products such as sand, salt or limestone.
In other jurisdictions, including the City of Chicago, specific storage and transportation requirements apply to petcoke. For my upcoming article, I examined several of these regulations and suggested a number of improvements to Michigan law. One key improvement would be to standardize requirements throughout petcoke’s lifecycle. At each stage from production to ultimate sale, petcoke should be stored thoughtfully to avoid community environmental impacts observed in Detroit.
The opportunity to explore various facets of environmental law represents an immense opportunity for Wayne Law students. Clinic students take up causes not as frequently taken up by the private bar. The clinic’s clients range from community interest groups to environmental nonprofits. This opportunity to work with organizational and nonprofit clients is unique to the Transnational Environmental Law Clinic. Not only do clinic students advocate for social and environmentally just development outcomes, but they also actively participate in Detroit’s redevelopment.