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University of Tulsa College of Law Masters of Jurisprudence Fall 2016 Karriem Harris “Prospects for municipal wastewater as a viable and limitless energy commodity and its ‘public trust’ implications as expressly and impliedly construed under the Oklahoma Energy Security Act and the Oklahoma Energy Initiative Act: Statutory, regulatory and common law considerations of reclaiming energy from municipal sludge as would be

Energy Law Thesis_Karriem Harris

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Page 1: Energy Law Thesis_Karriem Harris

University of Tulsa College of Law Masters of Jurisprudence

Fall 2016Karriem Harris

“Prospects for municipal wastewater as a viable and limitless energy commodity

and its ‘public trust’ implications as expressly and impliedly construed

under the Oklahoma Energy Security Act and

the Oklahoma Energy Initiative Act: Statutory, regulatory and common

law considerations of reclaiming energy from

municipal sludge as would be pursued under

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Contents

Description page number

Contents

1. Abstract3-5

2. Background6-8

3. State Statutory Provisions8-14

4. State Constitutional Provisions14-17

5. Federal Statutory Provisions 17-20

6. Administrative Provisions20-24

7. Common Law Precedent 24-27

8. Oklahoma Common Law Applicability 28-33

9. Analysis34-43

10. Addressing the Social Restraint of Public Perception 44-46

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11. Conclusion46-50

ABSTRACT

Studies have shown that recent technological breakthroughs in wastewater energy recovery

processes can yield a virtually limitless supply of clean, sustainable biomass and biomass-

derivative energy potential to meet state and municipal energy demand.1

As defined by the U.S. Department of Energy (DOE), renewable energy includes biomass.2

In comparison to states which have aggressively pursued renewable energy development,

Oklahoma has taken a more casual approach in its incorporation of renewable energy sources

(particularly with respect to biomass) into the state’s power grid. Though the technologies and

processes associated with energy reclamation from wastewater are starting to gain more and

more "traction" and notoriety nationwide, Oklahoma has not made any significant investment,

economically or otherwise, into incorporating these renewable energy processes and

technologies into Oklahoma’s energy matrix. Renewable energy sources, notably those

harnessed from biomass (and more specifically sludge materials) must compete with the more

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dominant model for energy: oil, natural gas and coal. Since the pivot-point for transition of

Oklahoma's energy matrix is primarily influenced by cost, it is my belief that any vigorous and

sustained efforts made in Oklahoma to increase utilization of biomass renewables such as

municipal sludge will inevitably gain more attention as the methods and processes of recovering

energy from these sources becomes more and more cost-effective.3

______________________________________________________________________________

1 John W. Clark, Water Supply and Pollution Control 566-567 (International Textbook Company 2d ed. 1971).

2 Joseph P. Tomain & Richard D. Cudahy, Energy Law in a nutshell 516 (WEST 2d ed. 2011)

3 Id.

Furthermore, Oklahoma still has not passed legislation which extends its renewable energy

goals beyond the year 2015; And despite recent technological breakthroughs and scientific

advancements in the understanding of harnessing wastewater energy potential, biomass energy

recovery from municipal wastewater has been given near null interest and consideration in

Oklahoma.

The Oklahoma Energy Security Act4 (hereafter referred to as the “OESA”) of 2010 and the

Oklahoma Energy Initiative Act5 (hereafter referred to as the “OEIA”) of 2012 both provide the

adequate statutory framework for wastewater energy resource development and recovery in

Oklahoma.

The purpose of this paper is to show that incorporating a hybrid energy system from municipal

wastewater into Oklahoma's power grid is feasible both from a statutory and regulatory

perspective, and that the OESA and the OEIA not only encourages such energy integration, but

also underscores the premise of this paper that Oklahoma is burdened with a trust obligation

with respect to the development of renewable energy such as that which could be feasibly and

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economically recovered from municipal wastewater and integrated into the state’s energy

system.

This paper will also make the assertion that, under U.S. common law jurisprudence, the public

interest standard applies to public utilities,6 though the extent of that applicability varies from

state to state. The OESA explicitly, and the OEIA impliedly, obligates Oklahoma towards

allotting an ever-increasing portion of its total energy supply towards renewable sources, and

_____________________________________________________________________________________________________________________

4 Oklahoma Energy Security Act, 17 OK Stat § 17-801.4 (2010), available at (Oklahoma Energy Initiative Act)http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=459329.

5 Oklahoma Energy Initiative Act, 17 OK Stat § 17-802.2 (2012), available at http://law.justia.com/codes/oklahoma/2015/title-17/section-17-802.2.

6 Joseph P. Tomain & Richard D. Cudahy, Energy Law in a nutshell 169 (WEST 2d ed. 2011).

that this obligation has its origins in the Public Trust Doctrine. In this paper, the assertion that

energy recovery from sludge materials not only satisfies the ‘public interest’ standard, but has

vested within itself an inherent public interest value which obligates the state towards diligently

pursuing municipal sludge7 as a viable energy alternative.

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_____________________________________________________________________________________________________________________________________________________________

7 In this paper the terms sludge and wastewater will be used interchangeably.

I. BACKGROUND

Though studies have shown that it is common for wastewater treatment plants to consume a

considerable amount of electricity, the organic matter contained in sewage contain chemically

bound energy which allow for energy recovery, specifically by yielding hydrogen-generated

power from the sludge. Sludge, a form of biomass, is essentially residue leftover from various

separation processes employed during treatment of wastewater. Biomass is broadly defined by

the U.S. Department of Energy as any organic matter, including municipal waste, which is

available on a renewable basis.8 Biomass is converted to methane gas through the decomposition

of this organic matter. The energy harnessed from biomass is originally stored solar energy (from

photosynthesis). It is this ‘stored solar energy’ which can be recovered from the municipal

wastes.9

Incinerating biomass waste matter has been shown to possess the energy-potential to yield clean,

sustainable energy thru chemical and biological processes that convert organic, solid matter to

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methane and hydrogen gas. Harvesting this form of renewable energy has become increasingly

economical in recent years due to technological advances in recovery processes. Standard

wastewater energy potential recovery processes can be supplemented by incineration of

dehydrated sludge in a boiler feeding into a steam turbine or generator thus yielding an

additional quantity of electricity. These processes are both technologically feasible and

economical for harvesting renewable energy from municipal wastewater.

________________________________________________________________________________________________________________________________ _____________________________

8 John W. Clark, Water Supply and Pollution Control 566 (International Textbook Company 2d ed. 1971).

9 Joseph P. Tomain & Richard D. Cudahy, Energy Law in a nutshell 524 (WEST 2d ed. 2011).

Biochemically, anaerobic digestion (or the process of digesting sludge) is essentially a

destructive process which yields recoverable energy [conceptually much in the same way as

fission yields energy from the destruction of the atom]. The two stages of anaerobic digestion are

(i) hydrolysis and conversion to organic acids by bacteria and (ii) gasification of organic acids to

methane and carbon dioxide by bacteria.10

The entire process of sludge digestion consists of a primary, secondary and tertiary stage. The

secondary phase of the process offers the best prospect for energy recovery because it is this

phase which yields roughly ninety percent (90%) organic matter (compared to roughly 65%

organic matter from the primary stage). It is this “organic matter” which bacteria [vital for

anaerobic digestion] thrive.

One of the end-products of anaerobic digestion is methane. Methane is a high-energy gas. It is

this inert but high energy gas which gives much credibility to the prospect of feasibly recovering

energy from municipal sludge.

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In many municipalities, a much higher demand on the waste management system has resulted

from rapid population growth and industrial expansion. Waste handling and disposal in many

growing municipalities has become a daunting task in recent years, with a major portion of waste

plant operations and maintenance costs derived from the actual disposal of sludge materials.

These problems will only become more and more complex as already densely populated

municipalities continue to experience population spikes.11

______________________________________________________________________________

10 John W. Clark, Water Supply and Pollution Control 567 (International Textbook Company 2d ed. 1971).

11 John W. Clark, Water Supply and Pollution Control 566 (International Textbook Company 2d ed. 1971).

One of the pivotal environmental and public interest concerns with respect to wastewater

management is the high water-demand that secondary wastewater treatment has on the

environment. It is estimated that roughly 120 million gallons of water per day is needed at a

typical plant for secondary treatment of wastewater. Though sludge characteristically maintains

its fluid properties, sludge containing lesser water content is also less costly with respect to

disposal.12 So, the significant amounts of water required for these processes not only raise crucial

environmental and ecological concerns, but also show how these processes can be an economic

liability.13

Another looming concern with respect to the environment is how these sludge materials can

potentially pollute the air, land, or the oceans after disposal.14

II. STATE STATUTORY PROVISIONS

The OESA, originally proposed and submitted by Oklahoma Senator Tom Ivester, established a

renewable energy goal for Oklahoma’s electric utilities of fifteen percent (15%) of the total

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electricity-generation capacity in Oklahoma to be produced from renewable sources by the year

2015. Though the original bill (bill 1241) required utility providers to incorporate at least 30

percent (30%) of their electricity from clean, renewable sources by the year 2020 and 65 percent

(65%) from natural gas,15 the amended bill included goals that failed to extend past the year

________________________________________________________________________________________________________________________________________________________________________

12 John W. Clark, Water Supply and Pollution Control 568 (International Textbook Company 2d ed. 1971).

13 John W. Clark, Water Supply and Pollution Control 566 (International Textbook Company 2d ed. 1971).

14 Id.

15 Oklahoma Gov. Brad Henry signs Okla. Energy Security Act, The Associated Press, May 27, 2010, http://newsok.com/article/3464198.

2015.16 Though the 2015 goals have been exceeded, Oklahoma lawmakers still have not made

any amendments to the now expired renewable energy legislation.

The impetus behind the OESA was to set Oklahoma on a path to reduce dependence on foreign

oil and to strengthen the state’s economy through renewable energy projects and initiatives.17

The OESA had also set out to “expand development of domestic energy and renewable energy

production and increase the ability to export Oklahoma’s domestic energy and renewable energy

resources to the rest of the United States.”18

The Oklahoma legislature declared renewable energy development to lie within the scope of the

public interest; and that both promotion and satisfaction of this public interest standard is pivotal

in order to maximize efficient utility of the state’s natural resources.19

Again, as noted verbatim in the statute:

There is hereby established a renewable energy standard for

the state that will serve as a goal for the year 2015. The

renewable energy standard shall be a goal that fifteen

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______________________________________________________________________________

16 Oklahoma Energy Security Act, 17 OK Stat § 17-801.4 (2010), available at http://www.oscn.net/applications/oscn/DeliverDocumen t.asp?CiteID=459329.

17 Oklahoma Energy Security Act, 17 OK Stat § 17-801.4 (2010), available at http://www.oklegislature.gov/osstatuestitle.html.

18 Oklahoma Energy Security Act, 17 OK Stat § 17-801.2 (2010), available at http://law.justia.com/codes/oklahoma/2014/title-17/section-17-801.2/.

19 Oklahoma Energy Security Act, 17 OK Stat § 17-801.4(a)(b) (2010), available at http://www.oscn.net/applications/oscn/DeliverDocumen t.asp?CiteID=459329.

percent (15%) of all installed capacity of electricity

generation within the state by the year 2015 be generated

from renewable energy sources.20

Prudency on behalf of the Oklahoma legislature included specific provisions for the utilization of

sludge materials. The provision reads:

For purposes of this (Oklahoma Energy Security Act)section,

qualifying renewable energy resources shall include:

Biomass, which projects may include agricultural crops,

wastes, and residues, wood, animal and other degradable

organic wastes, municipal solid waste, and landfill gas.21

The Oklahoma legislature has also implemented a state-wide program to fund projects and

initiatives that help reduce air pollution in the region, namely the “Oklahoma Energy Efficiency

and Emission Reduction Program” of 2008.22

§27A-2-3-109(b):

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The Oklahoma Legislature finds that any activity or project

that reduces regional air pollution is desirable and

advantageous and serves a compelling public interest.

________________________________________________________________________

20 Id.

21 Id.

22 Oklahoma Energy Efficiency and Emission Reduction Program, 27A OK Stat § 27A-2-3-109 (2008), available at http://law.justia.com/codes/oklahoma/2014/title-27a/section-27a-2-3-109/.

Further, improved air quality enhances the health and

quality of life for the citizens of Oklahoma, helps maintain

the abundant natural beauty and resources of the state, and

fosters the economic well-being of the state...

§27A-2-3-109(c)(1):

Any funds made available for the Oklahoma Energy Efficiency

and Emission Reduction Program shall be used by the

Department for matching grants to governmental and

nongovernmental entities in Oklahoma to encourage the

implementation of recognized air pollution reduction

measures.23

The Oklahoma legislature has already embarked on an ambitious plan to harness renewable

energy from cedar wood (another form of biomass)24, so it could be conceivable to go as far as

creating legislation that would specifically target “municipal sludge” as a means to supplement

energy demand in Oklahoma. But creating “municipal sludge” legislation for purposes of

renewable energy may be viewed by some Oklahoma lawmakers as legislatively and

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administratively burdensome considering the existence of other more familiar (in terms of

current application) sources of biomass (i.e. wood, agricultural products such as corn, etc.)

______________________________________________________________________________

23 Id.

24 Legislative intent - Use of cedar trees and residue as renewable energy source, 17 OK Stat § 17-801 (2010), available at http://law.justia.com/codes/oklahoma/2014/title-17/section-17-801/.

for potential energy recovery. Unnecessarily compounding to the bureaucracy is not in the best

interest of Oklahoma’s present and future renewable energy aspirations, nor would it likely be

advantageous politically and in terms of the practicality of actual enforcement and management

if regulation rules and state renewable energy statutes became too “bulky” and overly

burdensome. Considering issues of federalism and some of the more recent pre-emption battles

between the states and the federal government, Oklahoma lawmakers may find it more effective

to take a more “lean” approach when crafting renewable energy legislation as to avoid

replicating the same resource management complexity that some states have resisted and sought

to outright reject from the federal government on legal and constitutional grounds.

In contrast to the “heavy-handed” approach state’s most often associate with federal government

mandates, Oklahoma has, at least statutorily, adopted renewable energy legislation which is

simple, concise and which [at least theoretically] gets to the “heart of the matter” with respect to

specific renewable energy objectives. If past behaviour is any indication of future conduct, it

would seem that Oklahoma lawmakers will likely not depart from the statutorily minimalist

tendencies of their legislative predecessors.

The OEIA is a state program crafted to help promote and advance “new and existing energy

research and development efforts related to Oklahoma's renewable energy objectives.25

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_____________________________________________________________________________________________________________________

25 Oklahoma Energy Initiative Act, 17 OK Stat § 17-802.2 (2012), available at http://law.justia.com/codes/oklahoma/2015/title-17/section-17-802.2.

Oklahoma’s renewable energy objectives include:

1. Energy policy and economic analysis

2. Energy system optimization

3. Renewable energy integration into the electrical grid

4. Advancing research and development programs

5. Establishing Oklahoma as a regional resource and clearinghouse for transformative

energy technologies in the areas of traditional and renewable energy resources

6. Coordinating with the Oklahoma Department of Commerce to enhance venture capital

investment in energy-related research and business opportunities

7. Promoting seed funding that can be leveraged against state, federal, and private-source

funding to establish sufficient start-up resources26

Since this initiative may receive legal and/or administrative assistance from “any state agency or

public entity”27, the program’s implementing staff, the Oklahoma Energy Initiative Board (herein

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referred to as the “Board”), is at liberty to function virtually autonomous under the provisions

and within the statutory boundaries of the OIEA in satisfying its objectives.28

_____________________________________________________________________________________________________________________

26 Id.

27 Id.

28 Oklahoma Energy Initiative Act, 17 OK Stat § 17-802.2 (2010), available at http://law.justia.com/codes/oklahoma/2015/title-17/section-17-802.2.

The Board has within its statutory authority to “distribute funding” from the Oklahoma Energy

Initiative Revolving Fund29 for programs and activities that it undertakes in order to satisfy the

goals and objectives of the OEIA.30 The Board is also authorized to receive donations from any

private person or entity for the purpose of satisfying OEIA objectives.31

III. STATE CONSTITUTIONAL PROVISIONS

With respect to unappropriated public lands that lie within state borders, and the utilization of

these unappropriated lands [as broadly construed under provisions of the Oklahoma Constitution

for purposes of recovering and/or harnessing renewable energy], article I, section 3 of the

Oklahoma Constitution reads:

The people inhabiting the State do agree and declare that

they forever disclaim all right and title in or to any

unappropriated public lands lying within the boundaries

thereof, and to all lands lying within said limits owned or

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______________________________________________________________________________

29 Oklahoma Energy Initiative Revolving Fund, 17 OK Stat § 17-802.4(a) (2012), available at http://law.justia.com/codes/oklahoma/2014/title-17/section-17-802.4/.

30 Oklahoma Energy Initiative Revolving Fund, 17 OK Stat § 17-802.3(e) (2012), available at http://law.justia.com/codes/oklahoma/2014/title-17/section-17-802.3/.

31 Oklahoma Energy Initiative Revolving Fund, 17 OK Stat § 17-802.4(c) (2012), available at http://law.justia.com/codes/oklahoma/2014/title-17/section-17-802.4/.

held by any Indian, tribe, or nation; and that until the

title to any such public land shall have been extinguished

by the United States, the same shall be and remain subject

to the jurisdiction, disposal, and control of the United

States.32

Though the aforementioned constitutional provision is impliedly more applicable to harnessing

renewable energy from sources such as wind, solar and wood products (i.e. cedar trees), public

works projects such as those involved in reclaiming energy from sludge materials could also,

albeit hypothetically, fall under the auspices of section I-3 if the state or any private entity

proposed to construct works on unappropriated lands within state borders. It would be prudent

for the state or any private entity to have more than a casual familiarity with section I-3 before

commencing actual planning and capital and material resource allocation with the anticipation

that unappropriated lands could be acquired and utilized under the same standard Oklahoma

property rights laws and land lease rules that are applied in similar works where zoning

regulations and land-use permitting is prerequisite. Though it is highly unlikely that the state

would either overlook or not already have knowledge of the restrictions explicitly stated within

section I-3 before embarking on a public works project, exercising due diligence in considering

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the aforementioned constitutional provision would undoubtedly prevent significant waste of time

and waste in the allocation of state and/or private material and capital resources.

______________________________________________________________________________

32 Okla. CONST. art. I, § 3., available at http://www.oklegislature.gov/ok_constitution.html.

Article IX of the Oklahoma Constitution established the Oklahoma Corporation Commission in

1907 (hereafter referred to as the “Commission”), and the Oklahoma legislature gave the

Commission authority to regulate public service utilities as well as those entities whose activities

affect the public interest within the bounds of the Commission’s constitutional and statutory

authority to promulgate agency rules.33

Under section IX-20 of the Oklahoma Constitution, an injury claim allegedly resulting from the

Commission’s “services, practices, rules or regulations” may be filed directly with the Oklahoma

Supreme Court. The provision reads:

An appeal may be taken by any party affected, or by any

person deeming himself aggrieved by any such action, or by

the State, directly to the Supreme Court of the State of

Oklahoma.34

Section IX-20 goes on to read:

An appeal from an order of the Corporation Commission

affecting the rates, charges, services, practices, rules or

regulations of public utilities, or public service

corporations, shall be to the Supreme Court only, and in all

appeals to which the State is a party it shall be

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______________________________________________________________________________

33 Oklahoma Corporation Commission History, OCCWEB.COM, http://www.occeweb.com/Comm/commissionhist.htm (last visited Oct. 25,

2016).34 Okla. CONST. art. IX, § 20., available at http://www.oklegislature.gov/ok_constitution.html.

represented by the Attorney for the Corporation Commission,

and the Attorney General, or his duly authorized

representative.35

The legal basis for the grant of Commission regulatory jurisdiction (and any state resource

management agency) was established in 1877 by the U.S. Supreme Court in Munn v. Illinois.36 In

this marquee case, the United States Supreme Court upheld a ruling by a lower court that the

activities of a private business or entity becomes a public entity subject to state regulation when

those activities affect the public interest.

IV. FEDERAL STATUTORY PROVISIONS

The Public Utility Regulatory Policies Act (“PURPA”), which was birthed from the energy crisis

of the 1970’s,37 is a federal statute which is intended to promote and advance the use of

renewable energy.38 PURPA’s three-fold objective is:

1. Electric utility energy conservation 

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______________________________________________________________________________

35 Id.

36 Munn v. Illinois, 94 U.S. 113 (USSC. 1876), available at https://scholar.google.com/scholar_case?case=6419197193322400931&q=munn+v.+illinois&hl=en&as_sdt=6,37&as_vis=1.

37 See Fred Bosselman, Energy, Economics and the Environment 10, 614-615 (FOUNDATION PRESS 3d ed. 2010).

38 Electric Power Supply Association, What is PURPA?, https://www.epsa.org/industry/faqs/?fa=purpa (last visited Oct. 25, 2016).

2. Optimization of electric facility and resource use

3. Implementing a rate scheme that is fair, reasonable and not unduly discriminatory39

PURPA also requires that electric utilities purchase power from co-generators. So in essence,

PURPA laid the foundation that put smaller power generators on more of an ‘even playing field’

with larger utilities, while possibly also indirectly encouraging private investment into small and

even mid-sized power generation. This means that, with respect to Oklahoma expanding its

renewable energy portfolio, the prospect of attracting private investment could not only help

foster in biomass renewables such as municipal sludge into Oklahoma’s overall energy mix, but

that this “greater role” could potentially evolve long-term into biomass renewables such as

sludge [idealistically] replacing (rather than merely supplementing) the more dominant model for

energy production in the state. Private investment could also have an advantage over a public

works project because private enterprise would likely be better suited, at least in terms of

marketing strategy, in enhancing the image and highlighting the appeal of municipal sludge as a

beneficial and viable energy source.

Another key piece of federal legislation which was aimed to expand the use of biomass resources

such as municipal sludge is Title II of the Energy Security Act (“ESA”), or the Biomass Energy

and Alcohol Fuels Act (“BEAFA”) of 1980. In addition to the BEAFA, the Solar Energy

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______________________________________________________________________________

39 Public Utilities Regulatory Policies Act (PURPA), USLEGAL.COM,

https://energylaw.uslegal.com/government-regulation-and-programs/purpa/ (last visited Nov. 25, 2016).

Research, Development and Demonstration Act (“SERDDA”) of 1974 authorizes and funds

research into the processes of biomass energy conversion and energy recovery. The Resource

Conservation and Recovery Act (“RCRA”) of 1976 created a joint federal-state program to study

how renewable energy could be recovered from solid wastes.40 The DOE has several research

programs, including the Office of the Biomass Program, which specifically targets biomass (such

as sludge materials) for energy recovery. One of the main objectives of the DOE’s biomass

research is to transform biomass resources such as sludge materials into a cost-efficient

alternative, thus potentially attracting and inducing participation among the private sector.41 This

program is also devoted to reducing the nation’s dependence on the natural resources that

comprise the more dominant model of energy in the U.S.: oil, natural gas and coal. The program

also has an ambitious but feasible goal of creating a new domestic bioenergy sector that supplies

electric power to local and regional energy consumers.42

The Energy Independence and Security Act of 2007, another piece of federal energy legislation,

has goals which includes moving the U.S. toward more firm energy independence and energy

security, as well as increasing the nations aggregate renewable energy output.43

______________________________________________________________________________

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40 See id. at 9

41 Joseph P. Tomain & Richard D. Cudahy, Energy Law in a nutshell 526 (WEST 2d ed. 2011).

42 Joseph P. Tomain & Richard D. Cudahy, Energy Law in a nutshell 527 (WEST 2d ed. 2011).

43 U.S. Environmental Protection Agency, Summary of the Energy Independence and Security Act – Public Law 110-140 (2007), available at https://www.epa.gov/laws-regulations/summary-energy-independence-and-security-act. (Aug. 2, 2016).

Oklahoma is currently a beneficiary of the American Recovery & Reinvestment Act (“ARRA”).

This federal program has already significantly supported Oklahoma in developing clean energy

projects. The ARRA, thru renewable energy investment, is also helping ensure that Oklahoma

maintain a robust energy-centric economy and overall economic vitality in the region and the

nation. Thru AARA funding, Oklahoma has already procured $2.4M for the development of a

geothermal project.

It is feasible to assert that a renewable energy project involving energy-recovery from municipal

sludge would also likely deserve similar ARRA funding, especially given the fact that a

municipal sludge project contributes to both the energy security and the economic vitality of the

state and the nation.44

V. ADMINISTRATIVE PROVISIONS

Oklahoma Administrative Code 165:35-39-2 states that Renewable Energy Credits are “non-

tangible energy commodities in the United States that represent proof that 1 megawatt-hour

(MWh) of electricity was generated from an eligible renewable energy resource.” Since

municipal sludge is classified as biomass, Renewable Energy Certificates could conceptually be

used for local or regional power generation from municipal wastewater.

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______________________________________________________________________________

44 Department of Energy, Recovery Act State Memos – Oklahoma (2010), http://energy.gov/sites/prod/files/edg/recovery/documents/Recovery_Act_Memo_Oklahoma.pdf.

Though renewable energy recovery to meet fuel-demand in the state is not the discussion of this

paper, for purposes of highlighting the connection between biomass [such as the type under

discussion in this paper] and the public interest standard as promulgated by the Commission, it is

appropriate to point out Oklahoma Administrative Code (hereafter referred to as “O.A.C.”)

165:45-23. O.A.C. 165:45-23-1 is an administrative rule which establishes “fair and

reasonable”45 cost-recovery criteria as established by the Commission for implementation of

programs that promote energy efficiency as it relates primarily to switching from “rate regulated

natural gas to rate regulated electricity”46 or vice versa. Approved programs include:

(a) “programs or measures that promote renewable

technologies such as biomass-derived methane…, or

(b) in the event after notice and hearing, such programs or

measures are shown to promote the goals of the Commission

pursuant to this Subchapter and/or otherwise to be in the

public interest.”

Prior to the expiration of the 2015 renewable energy goal, the OESA required the Commission to

report annually to the legislature regarding “progress made to reach the goal of 15 percent of

______________________________________________________________________________

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45 Oklahoma Administrative Code 165:45-23-1 (2009), available at http://www.oar.state.ok.us/viewhtml/165_45-23-1.htm.

46 Oklahoma Administrative Code 165:45-23-3 (2009), available at http://www.oar.state.ok.us/viewhtml/165_45-23-3.htm.

electricity to be generated from renewable energy sources.”47 In response to this reporting

requirement, the Commission created a system that allowed Oklahoma power generators to

report generation power source information online. The objective behind this online reporting

system was, and is, to collect the data necessary for calculation of the State’s renewable energy

percentage standard.

Of the 38 electricity generation facilities that complied with the online reporting requirement,

three (3) of those were biomass facilities. Any future biomass facility would also be required by

the Commission to report information regarding power generation sources and capabilities.

The OESA directs the Commission to determine the annual renewable energy percentage by

dividing the aggregate of renewable electricity generation in Oklahoma by the total of all

electricity generation in Oklahoma. The Commission has also factored in “energy efficiency and

demand side management measures” towards the fifteen percent (15%) renewable energy goal.

As highlighted in the “The Oklahoma Corporation Commission’s 2014 Report On the Oklahoma

Energy Security Act” sent to the Oklahoma legislature,48 energy efficiency and demand side

management comprised less than one-quarter of the fifteen percent (15%) renewable energy

goal.49

______________________________________________________________________________

47 Id. at 4.

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48 Oklahoma Corporation Commission, THE OKLAHOMA CORPORATION COMMISSION’S 2014 REPORT ON THE OKLAHOMA ENERGY SECURITY ACT (2015), http://www.occeweb.com/pu/PUD%20Reports%20Page/2014%20Report%20on%20Renewable%20Energy%20Goals%20Final.pdf

49 See id. at 4.

Another regulatory provision, §27A-2-6-401, that may be applicable and prerequisite to

constructing and operating a public utility works which involves recovering energy from

municipal sludge, includes a permit requirement for change in either the “treatment, storage, use

or disposal” of municipal sludge.

§27A-2-6-401(a) reads:

No person shall construct or let a contract for any

construction work of any nature for a municipal treatment

works, nonindustrial wastewater treatment system, sanitary

sewer system or other sewage treatment works, or for any

extension thereof, or make any change in the manner of

nonindustrial wastewater treatment or make any change in the

treatment, storage, use or disposal of sewage sludge without

a permit issued by the Executive Director.50

In addition to monitoring Oklahoma’s air quality and implementing both state and federal Clean

Air Acts to “reduce emissions”51, the Oklahoma Department of Environmental Quality (DEQ)

also has a Water Quality Division which is responsible for issuing discharge permits, in

compliance with the National Pollutant Discharge Elimination System (“NPDES”) for any

industry or municipality whose activities involve or include the discharge or disposal of

______________________________________________________________________________

50 Construction of treatment or sewer systems or changes in treatment, storage, use or disposal of sludge, 27A OK Stat § 27A-2-6-401 (1963), available at http://law.justia.com/codes/oklahoma/2014/title-27a/section-27a-2-6-401/.

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51 Oklahoma Department of Environmental Quality, Air Quality (Dec. 2, 2016), http://www.deq.state.ok.us/aqdnew/index.htm.

treated wastewater. Permits are also available for industrial facilities whose disposal activities

include surface impoundment of municipal sludge.52

As eluded to under the section “State Constitutional Provisions”, the Commission has been

sanctioned by the state to regulate retail electric service in Oklahoma. Within the scope of the

Commission’s regulatory responsibility are the areas of “rates” and “service reliability” of three

investor-owned electric utilities providing retail electric service to much of the State. The major

three electric utilities providing power to much of Oklahoma, Empire District Electric Company,

Oklahoma Gas and Electric Company and Public Service Company of Oklahoma, could

conceivably embark on initiatives to generate and transmit biopower from municipal sludge.

Public utilities which fall either under municipal or federal jurisdiction are exempt from

Commission regulation. The Commission's three elected commissioners rule on regulatory

matters within the Commission’s jurisdiction. Rulings made by the Commission can be contested

and appealed thru the Oklahoma Supreme Court.53

VI. COMMON LAW PRECEDENT

With respect to assigning a public interest value, the dissenting justices in Alliance To Protect

______________________________________________________________________________

52 Oklahoma Department of Environmental Quality, Wastewater Permits (last visited Nov. 25, 2016), http://www.deq.state.ok.us/wqdnew/opdes/index.html.

53 Oklahoma Corporation Commission – Public Utility Division, Electric Utilities (last visited Nov. 25, 2016), http://www.occeweb.com/pu/puregelectric.htm.

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Nantucket Sound, Inc. v. U.S. Dep't of the Army made no distinction between a wind power plant

located off the east coast in Horseshoe Shoals, Massachusetts and standard offshore oil drilling

even though wind energy and other renewable energy projects inherently offer benefits to the

public.54

Though states usually differ in specificity as to how and to what extent the Public Trust Doctrine

is applied to state resources, the common thread amongst states is that natural resources, and by

extension renewable energy resources, do possess an inherent public interest value, and that no

state constitutional or statutory provision, state administrative rule or judicial decree should ever

ignore, overlook, degrade, violate, unduly interfere with or seek to invalidate these state-owned

and state-managed public interest values. In many efforts made by the states to protect public

trust interests, state courts typically not only apply the common law Public Trust Doctrine but

relevant state constitutional and/or statutory provisions as well. In theory, any constitutional

amendments and statutory provisions could “fill any void space” left behind by the more

generally applicable Public Trust Doctrine by expressly obligating Oklahoma towards specific

and quantifiable renewable energy goals, and more specifically, commitment to significant

resource development and [if necessary] infrastructure expansion for public works projects that

involve energy reclamation from municipal sludge. But any serious commitment on behalf of

______________________________________________________________________________

54 Alliance to Protect Nantucket Sound, Inc. v. U.S. Dep't of the Army, 398 F.3d 105 (1st Cir. 2005), available at https://scholar.google.com/scholar_case?case=13433074905168630643&q=Alliance+To+Protect+Nantucket+Sound,+Inc.+v.+U.S.+Dep%27t+of+Army&hl=en&as_sdt=6,37.

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the Oklahoma legislature to energy reclamation from municipal sludge must be specific and must

be quantifiable [just as the OESA was with respect to Oklahoma’s overalll renewable energy

goal]. Municipal sludge as a viable option for energy development in Oklahoma must involve a

concerted, collaborative and measurable approach as a prerequisite to not only meeting any state

objectives with regard to energy reclamation from municipal sludge, but to also ensure that these

efforts are sustainable and endure for the benefit of future Oklahomans.

In Citizens for Responsible Wildlife Management v. State, the Washington Court of Appeals held

in 2004 that the state of Washington was obligated to consider public trust values in its

management of natural resources; and that the state, in the exercise of its regulatory authority

thru either executive order or legislation, should give not only reasonable but significant

consideration to how and to what extent its policy-making will bear on future citizens.55

In Kelley v. 1250 Oceanside Partners, the Hawaii Supreme Court held in 2006 that the state of

Hawaii was under both a common law and state constitutional obligation to enforce measures to

preserve the state's natural and water resources for the benefit of future citizens of the state.56

In 2016, the U.S. District Court in Indiana first applied municipal code under Indiana law to

settle a municipal contractual dispute in Highland TH, LLC v. City of Terre Haute.57

______________________________________________________________________________

55 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1029-1030 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34. (citing Citizens for Responsible Wildlife Mgmt. v. State, 103 P.3d 203, 207-08 (Wash. Ct. App. 2004)).

56 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1030 (2012 ) (citing Kelley v. 1250 Oceanside Partners, 140 P.3d 985 (Haw. 2006)).

57 HIGHLAND TH, LLC v. City of Terre Haute, No. 2: 15-cv-00196-JMS-DKL (S.D. Ind. Aug. 10, 2016), available at https://scholar.google.com/scholar_case?case=17824445214785945918&q=Highland+TH,+LLC+v.+City+of+Terre+Haute+&hl=en&as_sdt=6,33.

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Indian law states that an appropriation must be made as a prerequisite to the city being bound by

any contract obligations to render funds for services agreed upon. In addition to the required

appropriation by the city board, no representative of the city may “obligate the city to any extent

beyond the amount of money appropriated” for any department or individual representative, and

any contractual obligation that violates this code is deemed null and void except where there is a

clear statutory exception.58

Purely as an academic matter and also as an attempt to add further clarity to the concept of

"municipal obligations" and its implicit link to the public trust (referenced by the court in

Highland), Indiana Code § 36-4-8-12(b) reads:

(a) This section does not prohibit:

(1) the city works board from making long term

contracts for utility services under IC 36-9; or

(2) a department from issuing bonds or other

obligations authorized by law.

(b) Except as provided in subsection (c), a city

department, officer, or employee may not obligate the city

to any extent beyond the amount of money appropriated for

that department, officer or employee. An obligation made in

violation of this section is void.59

_____________________________________________________________________________________________________________________

58 IND. CODE ANN. § 36-4-8-12(b) (Acts 1980, P.L.212, SEC.3) (Amended by P.L.30-2012, SEC.2), available at http://law.justia.com/codes/indiana/2012/title36/article4/chapter8.

59 Id.

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VII. PUBLIC TRUST APPLICABILITY UNDER OKLAHOMA

JURISDICTION

Now, what might this mean for Oklahoma undertaking in the development of renewable energy

from municipal sludge? Well, it means that, despite the inherent public trust value in any

potential project to reclaim energy from municipal sludge, Oklahoma state courts would likely

look to similar express provisions in applicable municipal code [that parallels the aforementioned

Indiana code] to settle any potential claims that might result from an alleged non-payment or

under-payment of monies either allocated or planned for allocation for services rendered by a

private party or entity under a PSA. Here, the public interest is implied on the general common

law standard of exercising sound economic judgment due to the overtly fiscal nature of the

alleged claim and its potentially adverse effect on the public, particularly those citizens who

reside within the jurisdictional boundaries of the municipality party to the PSA.60

Oklahoma's parallel municipal code to IC § 36-4-8-12 [which was referenced by the court in

Highland],61, 62 and one which could indirectly bear on the ultimate success of a public works

project to recover energy from municipal sludge, is Oklahoma Code §11-17-101(a), which reads:

A.  Any act of a municipal governing body which

provides...for appropriating monies shall not be valid

______________________________________________________________________________

60 See id. at 26 (referencing Highland).

61 Id. at 27.

62 See id. at 26 (referencing Highland).

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unless a majority of the governing body of the municipality

votes in favor of the action.  The municipal governing body

may not appropriate or draw any order on the treasurer for

monies unless the same has been appropriated in the manner

provided by law or ordered in pursuance of some object

provided for by law.63

Furthermore, §11-17-104 reads:

Any governing body member who intentionally votes to

appropriate money or to allow any bill or claim which is

not authorized by law shall be personally liable to the

municipality for the amount of such money appropriated, or

bills or claims allowed, with costs of suit, in an action

before any court of competent jurisdiction.64

Measures that restrict activities, such as conflicts of interest, which would not only significantly

impede the evolution of the public trust as it relates to measures to reclaim energy from

municipal sludge (a well as efforts to harness energy from other renewable sources) but also

erode public confidence in the administrative state in-general, are also prescribed under

Oklahoma law.

______________________________________________________________________________

63 11 OK Stat § 11-17-101(a) (1984), available at http://law.justia.com/codes/oklahoma/2014/title-11/section-11-17-101.

64 11 OK Stat § 11-17-104 (1977) (effective July 1, 1978), available at http://law.justia.com/codes/oklahoma/2014/title-11/section-11-17-104/.

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Oklahoma Code §11-8-113 reads:

A.  Except as otherwise provided by this section, no

municipal officer or employee, or any business in which

the officer, employee, or spouse of the officer or employee

has a proprietary interest, shall engage in:

1.  Selling, buying, or leasing property, real or

personal, to or from the municipality;

2.  Contracting with the municipality. 65

Furthermore, §11-35-101 provides that:

Any municipality...may extend its[electricity transmission]

lines, mains, and channels together with necessary

appurtenances beyond the corporate limits of the

municipality.66

In an effort to satisfy public trust principles, the Oklahoma legislature has endowed public works

projects, including electricity utilities as well as intermediaries (i.e. electric cooperatives),67 with

the statutory right to condemn private property,68 with the upper-limit to the scope of the

______________________________________________________________________________

65 11 OK Stat § 11-8-113(a) (effective Nov. 1, 2012), available at http://law.justia.com/codes/oklahoma/2014/title-11/section-11-8-113.

66 11 OK Stat § 11-35-101 (effective Nov. 1, 1987), available at http://law.justia.com/codes/oklahoma/2015/title-11/section-11-35-101/.

67See Dairyland Power Cooperative v. Brennan,248 Minn. 556, 82 N.W.2d 56 (1957), available at https://scholar.google.com/scholar_case?case=14465841826455498513&q=Dairyland+Power+Cooperative+v.+Brennan,248+Minn.+556,+82+N.W.2d+56+(1957)&hl=en&as_sdt=6,37.

68 Public Service Co. v. B. WILLIS, CPA, 155 P.3d 845, 2007 O.K. C.I.V. A.P.P. 18 (Okla. Civ. App. 2006) (citing the state of Oklahoma’s authority to condemn private property pursuant to 27 O.S.2001 § 7), available at https://scholar.google.com/scholar_case?case=11782158399035580327&q=Pub.+Serv.+Co.+v.+Willis&hl=en&as_sdt=6,37&as_vis=1.

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condemnation being only that it is for public use and that just and reasonable compensation is

made for the taking.69 Any assertion by the condemning entity that the taking was for "public

use" can be contested by any affected private party or entity and is subject to judicial review.70

As in Oklahoma Gas and Elec. Co. v. Beecher, the burden of proof shifts to the affected party

when the condemning entity declares that the exercise of the condemnation was out of public

necessity. The party contesting the condemnation under the "public necessity" declaration will

now carry the burden of proof and must show beyond a reasonable doubt that the taking was not

for public use.71

In keeping with Oklahoma's eminent domain standard established by the Oklahoma Court of

Civil Appeals in 2010 in Tuttle v. Jefferson Power & Improvement Co., electric utilities

(including those which could conceivably integrate energy recovered from municipal sludge) and

intermediaries are granted the right to condemn private property as long as the proposed use(s)

(i.e. generation, right-of-way easement for transmission lines, etc.) is consistent with the Public

Trust Doctrine (namely benefiting the public) and that the electricity transmitted will primarily

benefit Oklahoma end-users.72

______________________________________________________________________________

69 Okla. CONST. art. II, § 23, available at http://law.justia.com/constitution/oklahoma/II-23.html.

70 Okla. CONST. art. II, § 24 (taking for a public use is a judicial question), available at http://law.justia.com/constitution/oklahoma/II-24.html.

71 Oklahoma Gas and Elec. Co. v. Beecher, 256 P.3d 1008, 2011 O.K. C.I.V. A.P.P. 1 (Okla. Civ. App. 2010) (citing Delfeld v. City of Tulsa, 1942 OK 402, ¶ 39, 131 P.2d 754, 761), available at https://scholar.google.com/scholar_case?case=17842921394384998024&q=Oklahoma+Gas+and+Elec.+Co.+v.+Beecher+AND+delfeld&hl=en&as_sdt=6,37.

72 Oklahoma Gas and Elec. Co. v. Beecher, 256 P.3d 1008, 2011 O.K. C.I.V. A.P.P. 1 (Okla. Civ. App. 2010) (citing Tuttle v. Jefferson Power & Improvement Co., 1912 OK 232, 122 P. 1102), available at https://scholar.google.com/scholar_case?case=17842921394384998024&q=Oklahoma+Gas+and+Elec.+Co.+v.+Beecher+AND+delfeld&hl=en&as_sdt=6,37.

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A utility's right to convey lands to other public or private entities is also protected under

Oklahoma common law if the nature and intent of the conveyance is primarily for the enjoyment

of state citizens rather than for the primary benefit of private interests.73

In 1892, the U.S. Supreme Court, in Illinois Central R. Co. v. Illinois, referenced section 3 of an

1823 Act of the Illinois Legislature entitled "An act to provide for the improvement of the

internal navigation of this State", which states:

That the said state, under the authority of the legislature

thereof...shall have power to sell and convey the whole or

any part of the said land and to give a title in fee simple

therefor to whomsoever shall purchase the whole or any part

thereof."74

But this authority to convey publicly held lands to private persons or entities is limited under the

common law Public Trust Doctrine which restricts conveyances that would have an adverse

impact on other competing public interest values. As stated by the court in Illinois Central:

______________________________________________________________________________

73 Oklahoma Gas and Elec. Co. v. Beecher, 256 P.3d 1008, 2011 O.K. C.I.V. A.P.P. 1 (Okla. Civ. App. 2010) (citing Delfeld v. City of Tulsa, 1942 OK 402, 131 P.2d 754), available at https://scholar.google.com/scholar_case?case=17842921394384998024&q=Oklahoma+Gas+and+Elec.+Co.+v.+Beecher&hl=en&as_sdt=6,37.

74 Illinois Central R. Co. v. Illinois, 146 U.S. 387, 13 S. Ct. 110, 36 L. Ed. 1018 (1892), available at

https://supreme.justia.com/cases/federal/us/146/387/case.html.

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There can be no irrepealable contract in a conveyance of

property by a grantor in disregard of a public trust, under

which he was bound to hold and manage it.75

In Nat’l Audubon Soc’y v. Superior Court of Alpine Cnty., the California Supreme Court held

that because the state must manage its natural resources (namely Mono Lake) in such a manner

which best benefits the public and which is in accord with the Public Trust Doctrine, permits to

divert water away from Mono Lake were invalid.76

In US v. Tonawanda Coke Corp., Justice Coffey, in dissention to a Clean Water Act reporting

violation ruling, contended that a public trust obligation does not exist where a person or entity

was not placed in the position by the public to comply with any public trust obligation.

Following Justice Coffey's rationale in Tonawanda, a public trust obligation was never violated

"because that person or entity did not occupy a fiduciary or quasi-fiduciary position with respect

to the public."77 But in 1928, the U.S. District Court in Georgia ruled in United States v. Snook

that an environmental manager for an oil refinery did occupy a “position of trust with respect to

the public” because the matters under regulation had the potential to significantly impact the

health and safety of the general public.78

______________________________________________________________________________

75 Illinois Central R. Co. v. Illinois, 146 U.S. 394, 13 S. Ct. 110, 36 L. Ed. 1018 (1892), available at

https://supreme.justia.com/cases/federal/us/146/387/case.html.

76 Nat’l Audubon Soc’y v. Superior Court of Alpine Cnty. (Mono Lake Case), 658 P.2d 709 (Cal. 1983), available at http://lawreview.law.ucdavis.edu/issues/45/3/topic/45-3_owen.pdf.

77 US v. Tonawanda Coke Corp., 5 F. Supp. 3d 343, 2014 B.L. 71521 (W.D.N.Y. 2014) available at https://scholar.google.com/scholar_case?case=14038185269672827066&q=US+v.+Tonawanda+Coke+Corp&hl=en&as_sdt=6,37.

78 United States v. Snook, 24 F.2d 844 (N.D. Ga. 1928), available at https://scholar.google.com/scholar_case?case=4109963504529068027&q=United+States+v.+Snook&hl=en&as_sdt=6,37.

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VIII. ANALYSIS

Aside from further highlighting and extrapolating common law precedent, there are cases that

give insight into the feasibility and practicality of private sector participation in the business of

energy reclamation from municipal sludge. In Highland, a sludge-to-diesel processing plant

("Powerdyne") signed a Purchase and Sale Agreement (“PSA”) which included a contract

provision which obligated that the City “deliver waste activated sludge…to Powerdyne for

[processing] into diesel fuel.” Included in the PSA was a provision that also stipulated that the

City “buy the diesel fuel back from Powerdyne.”79

In regards to the sheer practicality of a full-scale biomass initiative, Oklahoma lawmakers (as

well as potential private investors) can also glean insight from partnerships cultivated between

companies overseas and their native governments. A state water company in Sao Paulo, Brazil

has plans to operate a thermoelectric plant fuelled by biogas recovered from sewage sludge. The

plant is planned for full-scale operation by 2019 and will be located near a local sewage

treatment plant. The electricity generated is projected to furnish roughly seventy-five percent

(75%) of the operational power of the waste treatment plant while also eliminating five-hundred

(500) metric tons of sewage sludge landfill waste.80

The Canadian government has allocated up to $500,000 in grants to power generators to

transition to biomass fuel sources, as well as for current biomass energy companies to expand

operations.81

______________________________________________________________________________

79 See id. at 26.

80 Michael Kepp, Brazil Water Company to Turn Sewage Into Biogas, Bloomberg BNA – Energy and Climate Report, Aug. 8, 2016, available at

http://0-news.bna.com.library.utulsa.edu/clln/display/story_list.adp?mode=ep&frag_id=95242346&item=topic3&prod=clln. 81 Canada, Manitoba governments fund bioenergy projects, BIOMASS MAG. (Jan. 26, 2016), http://biomassmagazine.com/articles/12829/canada-manitoba-governments-fund-bioenergy-projects.

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From looking at specific cases under U.S. jurisprudence where a state abdicated a whole or a

portion of the energy resource recovery and processing responsibility over to a private entity (as

in the Highland case), it is likely that a [hypothetical] municipal wastewater energy recovery

project in Oklahoma would be contracted out to the expertise of a private entity probably thru the

same standard notification and bidding process which precludes most other government-private

sector service agreements.

As eluded to in Tuttle v. Jefferson Power & Improvement Co. [discussed in the previous section],

the public trust obligation is not lost or diminished in any fashion on the hypothetical grounds

that whole or portions of the energy recovery project is undertaken by a private entity.82 Though

(in this hypothetical scenario) the private entity is not serving in an “intermediary” capacity as

would an electric cooperative per se,83 the state is still not relieved from its public trust

obligations. In other words, the mere participation of a private entity in any whole or portion of

the energy recovery process does not in any way discharge the state from its fiduciary role as

trustee to vital public resources. Public trust applicability is still valid even though any

[hypothetical] private contractor or employee is not an official government employee as was the

defendant (a general superintendent of a county water district) in United States v. White because

the [hypothetical] private contractor [in our scenario] would likely be entrusted by the state with

“special discretion’ under Oklahoma law or with a state “permit, license [or] contract” as a pre-

condition to actual work being done on behalf of the state;84

______________________________________________________________________________

82 See id. at 31 (eminent domain right exercised by private entity contracted with municipality and upheld in Tuttle).

83 In re Condemnation by Dairyland Power Cooperative, 82 N.W.2d 56, 248 Minn. 556 (1957), available at https://scholar.google.com/scholar?hl=en&q=Dairyland+Power+Cooperative+v.+Brennan&btnG=&as_sdt=6%2C37.

84 United States v. White, 270 F.3d 356, 371-73 (6th Cir. 2001), available at https://casetext.com/case/us-v-white-32.

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and so, Oklahoma would likely not be alienated from its fiduciary responsibilities merely based

on the aforementioned scenario and any assertion of public trust inapplicability would likely be

void of any common law precedent.

Though there may be substantial advantages, at least from a business and marketing standpoint,

in placing energy reclamation from sludge material under the state’s free-market ‘umbrella’ and

into the hands of a private entity, Oklahoma must obviously remain cautious and vigilant in

preventing the internal occurrence of potentially malignant and detrimental conduct, such as

conflicts of interest. Conflicts of interest, both in the legislative process and within the state

resource management hierarchy, would not only significantly impede the evolution of the public

trust as it relates to measures to reclaim energy from municipal sludge (a well as efforts to

harness energy from other renewable sources), but also erode public confidence in the

administrative state’s ability to effectively and equitably manage state resources as prescribed

under Oklahoma law. Any dissolution of public confidence in Oklahoma’s regulatory integrity

would undoubtedly undermine the state’s administrative credibility and cause a gradual but

definite implosion of the entire state resource management regime.

Public trust could also be breached if other public interest values are impaired as a result of the

state or any private contractor or operator [acting on behalf of the state] failing to follow proper

safety rules or procedures,85 or if the alleged harm was done in bad faith.86

______________________________________________________________________________

85 US v. Tonawanda Coke Corp., 5 F. Supp. 3d 343, 2014 B.L. 71521 (W.D.N.Y. 2014) (citing United States v. Turner, 102 F.3d 1350, 1360 (4th Cir.1996)), available at https://scholar.google.com/scholar_case?case=14038185269672827066&q=US+v.+Tonawanda+Coke+Corp&hl=en&as_sdt=6,37.

86 US v. Tonawanda Coke Corp., 5 F. Supp. 3d 343, 2014 B.L. 71521 (W.D.N.Y. 2014) (citing United States v. White, 270 F.3d 356, 371-73 (6th Cir.2001)), available at https://scholar.google.com/scholar_case?case=14038185269672827066&q=US+v.+Tonawanda+Coke+Corp&hl=en&as_sdt=6,37.

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In instances where an environmental hazard occurred (i.e. spill, leakage or any other significant

release of sludge materials) as a result of neglect by a private entity not contracted by the state

(and therefore not under any public trust obligations), the state would likely conduct a remedial

investigation [through the Oklahoma Department of Environmental Quality or “DEQ”] in order

to quantify the severity of the environmental harm (i.e. whether the environmental harm was de

minimus…or not), to determine the proper dollar amount of any fines and to determine

appropriate remedial action so the harm can be mitigated.87 So Oklahoma does have proper

regulatory measures in place to ensure that actions conducted either by the state or by any person

or entity acting on behalf of or in accord with the state satisfies the state’s public trust standard.

The OESA does expressly assign a public interest value to renewable energy, and that this vested

public interest value includes the state’s efficient use of its natural resource base.

§17-801.4(a):

The Legislature declares that it is in the public

interest to promote renewable energy development in

order to best utilize the abundant natural resources

found in this state.88

So, a firm public trust value is expressly vested within the ‘four corners’ of renewable energy

legislation in Oklahoma, and that the potential public trust value explicitly stated in the

_____________________________________________________________________________________________________________________

87 US v. Tonawanda Coke Corp., 5 F. Supp. 3d 343, 2014 B.L. 71521 (W.D.N.Y. 2014), available at https://scholar.google.com/scholar_case?case=14038185269672827066&q=US+v.+Tonawanda+Coke+Corp&hl=en&as_sdt=6,37.

88 Oklahoma Energy Security Act, 17 OK Stat § 17-801.4(a) (2010), available at http://www.oscn.net/applications/oscn/DeliverDocumen t.asp?CiteID=459329.

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aforementioned statutory provision, at least with respect to the potential of energy recovery from

municipal sludge, would not [conceptually] be promoted over any other existing public trust

values, including those public trust values either explicitly or impliedly stated in state

environmental statutory provisions. Considering the fact that, at lease historically, natural

resource development in the U.S. primarily benefited present generations at the expense of future

generations,89 satisfying public trust criteria as a matter of state law and policy is definitely a step

in the right direction. Issues of environmental and ecological stewardship, human health, energy

sustainability and economic vitality are all tenets of the Public Trust Doctrine. With respect to

Oklahoma energy policy, the common law public trust doctrine also has the capacity to provide

an upper-limit on activities related to the planning and operation of municipal wastewater

energy-recovery projects; so that states can be equipped with the proper statutory and

administrative mechanisms in order to avoid the possibility of unduly interfering with other

public trust values; so that other periphery public interest concerns (namely aesthetic values) are

not ignored by the state’s quest for renewable energy from municipal wastewater.

Not only does the public interest provision drafted into the OESA settles the issue of statutory

protection of the public trust, but the provision also offers the least number of potential

environmental and resource allocation conflicts for energy recovery from municipal sludge in

comparison to other renewable projects such as wind, solar and hydropower. Unlike wind and

solar projects, energy recovery from municipal sludge would not require the acquisition and

______________________________________________________________________________

89 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1063 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

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utilization of a significant number of surface acreage. Even though the tension that arises among

federal and state jurisdictions with respect to federal lands can make it difficult for states to

manage the complexities of several jurisdictions,90 any potential project development in

Oklahoma that involved reclaiming energy from municipal sludge would likely not require

substantial surface acreage as does wind and solar projects;91 and so there would be no pressure

or necessity for Oklahoma to have to consider federal lands for biomass energy development

since non-federal lands in the state are in ample supply for such development and because a

municipal wastewater energy reclamation project would not be nearly as land-intensive as other

forms of renewable energy development.

Furthermore, even though wind, solar and hydropower all possess an inherent public interest

value as well,92 these projects would be capable of peak energy production only during certain

hours of the day and/or during specific seasons of the year. The longterm, uninterrupted

availability of municipal sludge gives this renewable energy resource a bonus advantage over

other more seasonally and time-of-day fluctuating (in terms of raw supply) forms of renewable

energy such as wind, solar and hydropower.

The OESA does expressly acknowledges the public interest as a necessary standard that would

[hypothetically] serve as both a baseline and an upper-limit to any effort made by the state [or

entities acting on its behalf] to harness municipal sludge to supplement energy demand. The due

______________________________________________________________________________

90 Carl Ullman, Water Rights and Water Law: Indian Reserved Water Rights (Nov. 7, 2016) (unpublished comment) (lecture notes from the University of Tulsa College of Law).

91 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1040 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

92 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1060, 1073 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

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consideration given by the Oklahoma legislature as to the applicability of the Public Trust

Doctrine with respect to state energy development is plain and clear from the canon. It is

unquestionable that, at lease statutorily, that the public interest is a permanent fixture within the

context of energy development in the state. It is also without contention that this fixed role of the

public interest, specifically as it relates to energy recovery from municipal wastewater, will

likely ensure a steady balancing between varying public interest values while also confining

activities related to energy recovery from municipal wastewater within what the state considers

to be ‘environmentally responsible’, as defined under Oklahoma statute. Since the provisions

outlined under the OEIA allow the state to optimize energy resources, advance energy policy and

establish the state as a regional leader in renewable resource development, an implied public

interest value can be inferred from its statutory objectives. It is clear that the Oklahoma

legislature has assigned a public interest value to renewable energy. And since the OEIA is

essentially the “operating arm” of the OESA, the same public interest value that is attached to

the OESA can be conferred to the OEIA. In other words, the OEIA, by extension, is vested with

the same public interest value that is expressly attributable to the OESA. The identification of the

OESA and the OEIA with the Public Trust Doctrine has its origins in the “syngenetic”

relationship between these two statutes.

The Oklahoma Energy Efficiency and Emission Reduction Program also acknowledges the

veracity of the public trust standard.

§27A-2-3-109(b):

The Oklahoma Legislature finds that any activity or project

that reduces regional air pollution is desirable and

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advantageous and serves a compelling public interest .93

The statute goes on to list some of the fringe benefits of satisfying the specific public interest

value of “improved air quality”.

§27A-2-3-109(b) continues:

Further, improved air quality enhances the health and

quality of life for the citizens of Oklahoma, helps maintain

the abundant natural beauty and resources of the state, and

fosters the economic well-being of the state…94

So, it is clear that, at least from the perspective of the Oklahoma legislature, satisfying the

requirements under the Public Trust Doctrine with respect to air quality yields a desirable and

non-arbitrary outcome.

Table 1. Public Trust Under the Oklahoma Energy Efficiency and Emission Reduction Program

Improving Air Quality Under the Oklahoma Energy Efficiency and Emission Reduction Program:

1. Health and quality of life → Vested Public Trust Value

2. Aesthetic value → Vested Public Trust Value

3. Abundant natural resources → Vested Public Trust Value

4. Economic vitality → Vested Public Trust Value

___________________________________________________________________________________________________________________________________________________________________________________________

93 Oklahoma Energy Efficiency and Emission Reduction Program, 27A OK Stat § 27A-2-3-109(b) (2008), available at http://law.justia.com/codes/oklahoma/2014/title-27a/section-27a-2-3-109/.

94 Id. at 41.

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By expressly including public trust values into renewable energy policy, the Oklahoma

legislature has shown its intent to gradually reshape the state’s energy landscape into one that

considers present and future energy and energy-related issues such as energy sustainability,

environmental stewardship, human health and economic growth. While the Oklahoma

legislature’s attempt to balance a wide array of public trust values may seem rudimentary at face-

value, the effort to strike a delicate balance between varying public interest values is exactly the

positive momentum the state needs in order to ensure that any efforts to recover energy from

municipal wastewater (and other biomass sources) is environmentally sound and economically

prudent. It is apparent that the OESA, Oklahoma’s primary renewable energy legislation, is

inherently and inextricably coupled with the Public Trust Doctrine. It is likely, from express

language drafted into the OESA, that renewable energy development and the public trust will

remain inseparable into the foreseeable future. It is quite feasible to assume that the balancing of

public trust values more thru express statutory language will likely make the policy-making and

drafting process [as it relates to renewable energy, and more specifically energy from municipal

wastewater] more transparent. More transparency also likely has the unintended consequence of

allowing for a more complete and thorough judicial review of state renewable energy

legislation.95 The OESA, and more impliedly the OIEA, both ensure that public trust values will

continue to remain subject to statutory protection and that pursuit of either state-sanctioned or

privately funded energy-recovery from municipal wastewater projects will not unduly interfere

or substantially impair existing and competing public interest values.

_____________________________________________________________________________________________________________________

95 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1072 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

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There are also administrative provisions that draw a ‘non-casual’ link between renewable energy

development in Oklahoma (and more specifically biomass-derived methane) and the Public Trust

Doctrine. As mentioned under the section titled “Administrative Provisions”, Oklahoma

Administrative Code 165:45-23-4 also includes a public trust provision with respect to

Commission-approval of cost-recovery for energy efficiency programs that involve fuel-

switching to biomass-derived methane sources. Commission-approved energy efficiency

programs, for purposes of cost-recovery for fuel-switching, includes “measures that promote

renewable technologies such as biomass-derived methane…or [programs that] are shown to

promote the goals of the Commission…or otherwise to be in the public interest.”96

Again, the public interest is explicit within the language of the aforementioned administrative

rule; and like the OESA it draws a bold and direct link between the public interest and renewable

energy resources “such as biomass-derived methane.” As mentioned earlier in our discussion of

the most common method employed to convert municipal sludge into usable energy, one of the

end-products of this conversion process is methane. Methane is a relatively non-reactive but high

energy gas. It is methane’s high energy but non-reactive characteristics that makes energy

conversion from municipal wastewater a likely and practical prospect for renewable energy

recovery and transmission in Oklahoma.

_________________________________________________________________________________________________________________________________________________________________________________________

96 Oklahoma Administrative Code 165:45-23-4 (2009), available at http://www.oar.state.ok.us/viewhtml/165_45-23-4.htm.

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IX. ADDRESSING THE SOCIAL RESTRAINT OF PUBLIC PERCEPTION

The environmental justification as a basis for biomass energy development does not always

prevent the failure of a project. “Interactive communication, public participation and collective

learning” are all factors that contribute to the ultimate success (or failure) of a biomass

development project.97 Biomass energy development in the UK, such as a proposal to build a

wood gasification plant, faces significant opposition from the public primarily due to the public’s

relative unfamiliarity with biomass energy.98 Public acceptance or rejection is determined

primarily by public confidence in the state regulatory system. As mentioned under the

“Analysis” section of this paper, private enterprise may be best suited to carry the burden of

public persuasion due to the advantage that many private entities would conceivably have in

making biomass energy recovery processes appealing to the public thru effective marketing

strategies.99 Failure to effectively market renewable energy sources such as municipal sludge

would almost inevitably undermine biomass energy reclamation initiatives because unfavourable

public perception would inhibit public reception of such initiatives.100 In addition to weak public

relations strategies, others factors that can contribute to public opposition to biomass energy

projects include “location of the plant, perceived risks,” negative environmental impacts and

perceived hazards to local aesthetic values;

_____________________________________________________________________________

97 Bishnu Raj Upret, National renewable energy policy and local opposition in the UK: the failed development of a biomass electricity plant , 26 Biomass and Bioenergy 61, 61-69 (2004), available at http://www.sciencedirect.com/science/article/pii/S0961953403000990.

98 See id.

99 See id.

100 Nicolas C. Bronfman, Raquel B. Jimenez, Pilar C. Arevalo & Luis A. Cifuentes, PUBLIC ACCEPTANCE OF ELECTRICITY GENERATION SOURCES: THE ROLE OF TRUST IN REGULATORY INSTITUTIONS, 26 ENERGY & ENVIRONMENT 349, 351 (2015), available at https://www.researchgate.net/publication/279244870_Public_Acceptance_of_Electricity_Generation_Sources_The_Role_of_Trust_in_Regulatory_InstitutiIns?enrichId=rgreq-2f8535a9fda53da838e74f18f5ac756f-XXX&enrichSource=Y292ZXJQYWdlOzI3OTI0NDg3MDtBUzozMDIxNzcxNTc4Nzc3NjBAMTQ0OTA1NjA1NjgxMA%3D%3D&el=1_x_2&_esc=ppublicationCoverPd.

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and these public concerns are not typically overlooked simply due to apparent economic and job

benefits to the local area.101 The Oklahoma state legislature, as well as energy developers, should

not show apathy in identifying the varying layers that comprise “integrity-based” and

“competence-based” public confidence in the state resource management regime and how it can

skew social acceptability.102

Though public perception and acceptance is not an operative legal doctrine and is typically given

consideration by the courts only after precedential common law standards have been exhausted,

public “risk and benefit perceptions” should be addressed even if that means only locally.103

As stated previously, the private sector will likely possess the necessary marketing expertise to

maneuver through and around the commonality of public perception.

In addition to overcoming potential negative public perception, there is also the public relations

‘obstacle’ of biomass energy initiatives such as municipal sludge leaving a relatively larger

impact on the local environment than zero-emission sources such as wind and solar. In some

____________________________________________________________________________________________________________________________

101 Bishnu Raj Upreti, Conflict over biomass energy development in the United Kingdom: some observations and lessons from England and Wales, 32 Energy Policy 785, 785-800 (2004), available at http://www.sciencedirect.com/science/article/pii/S0301421502003427, available at http://www.sciencedirect.com/science/article/pii/S0301421502003427.

102 Richard R. Plate, Public Perceptions of Using Woody Biomass as a Renewable Energy Source, 48 Journal of Extension 1, 1-2 (2010), available at https://joe.org/joe/2010june/pdf/JOE_v48_3a7.pdf.

103 Nicolas C. Bronfman, Raquel B. Jimenez, Pilar C. Arevalo & Luis A. Cifuentes, PUBLIC ACCEPTANCE OF ELECTRICITY GENERATION SOURCES: THE ROLE OF TRUST IN REGULATORY INSTITUTIONS, 26 ENERGY & ENVIRONMENT 349, 365 (2015), available at https://www.researchgate.net/publication/279244870_Public_Acceptance_of_Electricity_Generation_Sources_The_Role_of_Trust_in_Regulatory_InstitutiIns?enrichId=rgreq-2f8535a9fda53da838e74f18f5ac756f-XXX&enrichSource=Y292ZXJQYWdlOzI3OTI0NDg3MDtBUzozMDIxNzcxNTc4Nzc3NjBAMTQ0OTA1NjA1NjgxMA%3D%3D&el=1_x_2&_esc=pppublicationCoverP.

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instances, public sentiment towards biomass energy development is equal to or less than that of

fossil fuel energy sources such as natural gas.104

Nevertheless, despite certain, potential public relations ‘hurdles’, efforts in Oklahoma to reclaim

energy from municipal wastewater seems tenable (at least conceptually) purely based on the

renewable nature of such initiatives and due to the fact that the technology necessary for such

endeavours is readily available at reasonable cost to potential developers. Furthermore, the U.S.

Department of Energy (DOE) estimates that the U.S. can feasibly produce roughly one billion

tons of “non-food biomass” by the year 2030, which would subsequently create a viable

bioeconomy and reduce dependence on fossil fuels by thirty percent (30%).105

X. CONCLUSION

Human health, energy independence, a strong economy, as well as the protection and

preservation of scenic vistas, wildlife, and land and water resources are all important and non-

dilutable facets of the Public Trust Doctrine.106 Since energy recovery from municipal sludge has

the potential to not only promote and advance public trust objectives but also settle competing

public trust interests, it is quite within the realm of reason to attach a public interest

______________________________________________________________________________

104 Richard R. Plate, Public Perceptions of Using Woody Biomass as a Renewable Energy Source, 48 Journal of Extension 1, 2 (2010), available at https://joe.org/joe/2010june/pdf/JOE_v48_3a7.pdf.

105 Office of Renewable Energy and Energy Efficiency, ENERGY.GOV, http://energy.gov/eere/bioenergy/accomplishments-and-successes.

106 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1023 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

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value to municipal wastewater as a potential and viable source of renewable energy. In contrast

to the more dominant model of energy production in Oklahoma (which primarily sought to

benefit present generations without considering the cost and detriment to future generations)107,

renewable resources such as municipal wastewater contain the bonus value of not only satisfying

present energy demand, but also meeting that demand in the most environmentally responsible

way that current technology allows. Energy security and a strong economy undoubtedly possess

inherent public interest values.108 Municipal wastewater energy-recovery can not only put the

state on the right path towards economic development and energy independence, but also help

ensure that the cost and the detriment of energy development to future Oklahoman’s remains

negligible.

Though courts are usually hesitant in applying a federal ‘public trust’ standard in the

adjudication of “challenges to renewable energy projects” without having any clear and explicit

constitutional or common law premise,109 there are facets of the common law standard of ‘public

trust applicability’ that are discernible from the canon of federal environmental statutes such as

the Resource Conservation and Recovery Act (“RCRA”) and the Clean Water Act (“CWA”).

Furthermore, some legal scholars contend that there is no legal precedent that restricts public

trust applicability to federal action and that the concept of public trusteeship can be construed

from federal environmental and federal energy legislation.

____________________________________________________________________________________________________________________________

107 See id. at 38.

108 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1039 (2012) (a position taken by the state of Maryland as a premise for the evolution and promotion of renewable energy law), available at http://scholarship.law.umn.edu/faculty_articles/34.

109 Alexandra B. Klass, Renewable Energy and the Public Trust Doctrine, 45 U.C. Davis L. Rev. 1021, 1069 (2012), available at http://scholarship.law.umn.edu/faculty_articles/34.

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While it is true that “no single change would enable the United States to meet its energy

needs”,110 prudency and pragmatism would likely dictate that efforts to designate an ever-

increasing percentage of Oklahoma’s aggregate energy supply to biomass sources should include

municipal sludge, and that that such incorporation is both economically and environmentally

desirable.

Within Oklahoma’s statutory framework the public trust standard as it relates to renewable

energy development is much more than merely discernible, and Oklahoma common law is not

the only source for settling competing public interest values and for determining the applicability

of the public trust standard as it relates to renewable energy development.

It is also clear from this analysis that both the OESA and the OEIA adequately and explicitly

define the nature and the extent of the public interest standard as it relates to renewable energy

development in Oklahoma; and that renewable energy development, namely from municipal

sludge, is itself endowed with its own, distinct public interest value.

The common law test of ‘public trust applicability’ is an organic and dynamic legal concept; and

while variance with respect to the nature and the extent of its applicability is state-specific, the

social nuances of public perception is a common thread that can also play an important role in

either restricting or advancing state biomass initiatives [such as the type under discussion in this

paper].

______________________________________________________________________________

110 Nicolas C. Bronfman, Raquel B. Jimenez, Pilar C. Arevalo & Luis A. Cifuentes, PUBLIC ACCEPTANCE OF ELECTRICITY GENERATION SOURCES: THE ROLE OF TRUST IN REGULATORY INSTITUTIONS, 26 ENERGY & ENVIRONMENT 349, 365 (2015), available at https://www.researchgate.net/publication/279244870_Public_Acceptance_of_Electricity_Generation_Sources_The_Role_of_Trust_in_Regulatory_InstitutiIns?enrichId=rgreq-2f8535a9fda53da838e74f18f5ac756f-XXX&enrichSource=Y292ZXJQYWdlOzI3OTI0NDg3MDtBUzozMDIxNzcxNTc4Nzc3NjBAMTQ0OTA1NjA1NjgxMA%3D%3D&el=1_x_2&_esc=pppublicationCoverP.

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Though any fruitful manifestation of private sector involvement in reclaiming energy from

municipal sludge in Oklahoma is speculative at-best, private entities are likely best suited to

effectively and competently maneuver through and around the subtleties of public perception

through tactful and transparent marketing strategies which clearly highlight not only the benefits

of but also the good will behind such endeavours.

Oklahoma’s fiduciary obligation to its citizens with respect to any potential energy development

from municipal sludge is a standard that will likely continue to demand further analysis and

clarification from courts and from legal scholars, particularly as states wrestle with balancing

competing public interest values while figuring out how best to assimilate the Public Trust

Doctrine into their respective and applicable statutory and regulatory scheme as it relates to the

development and integration of renewable energy resources such as municipal wastewater.

The prospects for transforming bio-waste into clean energy are quite remarkable. In addition to

energy independence and the economic incentives of creating a viable bioenergy sector, the reuse

of wastewater as a renewable energy source would also help local water managers resolve the

issue of high water-demand that characterizes secondary wastewater treatment processes; which

would subsequently help eliminate pollutants to air, land and oceans from the disposal of sludge.

The fact that wastewater treatment plants remain continuously operational is also worth noting

because it is this characteristic which should give energy recovery from municipal sludge and the

prospects for a bioeconomy serious and preferential consideration by the Oklahoma legislature

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over other forms of renewable energy development.111

Making the Public Trust Doctrine a central point of emphasis with respect to the OESA and the

OEIA helps in both settling the clash (i.e. whether one public trust value can be subjugated to

another) and understanding the relational and cohesive nature of competing ‘public trust’ values

as it specifically relates to state efforts to reclaim energy from municipal sludge.

Both the OESA and the OEIA contain substantive measures which can help facilitate significant

movement toward municipal sludge as a renewable energy source in Oklahoma and guide the

state towards fulfilling its role as fiduciary trustee while concurrently restraining the state from

discharging that same public trust duty as it relates to the development of renewable energy

resources such as municipal sludge. Prioritizing energy development from municipal sludge

while ensuring that such efforts are congruent with Oklahoma’s public trust standard is

fundamental to overall advancement of such initiatives.

_____________________________________________________________________________________________________________________________________

111 Randall Hackley, Water Infrastructure: Sludge Treatment at U.K. Facility Helps Transform Wastewater into ‘Black Gold’, Bloomberg BNA – Water Law and Policy Monitor, Sept. 24, 2014, available at http://0 news.bna.com.library.utulsa.edu/wrrn/WRRNWB/split_display.adp?fedfid=52224492&vname=wrrnotallissues&wsn=510176000&searchid=28429483&doctypeid=1&type=date&mode=doc&split=0&scm=WRRNWB&pg=0.

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