Legislators relax Coastal Zone Act restrictions

Changes not expected to directly impact Sussex
August 8, 2017

There's been a lot of buzz about a 1971 law governing Delaware’s coastal areas, which legislators recently voted to loosen in favor of economic growth.

House Bill 190 is intended to amend Delaware’s historic Coastal Zone Act to allow the redevelopment of 14 industrial sites, 13 of which are in New Castle County.

Because none of those sites are in Sussex County, the bill, which was signed by Gov. John Carney Aug. 2, has no direct impact on county businesses or operations. Environmentalists with the Inland Bays Foundation invited Ken Kristl, director of the Environmental & Natural Resources Law Clinic at Widener University Delaware Law School, to a July 11 meeting to provide a briefing on the Coastal Zone Act, recent amendments and how industry along the coast will be affected.

What is the Coastal Zone Act?

The Coastal Zone Act was passed June 28, 1971, under the leadership of Gov. Russell Peterson, to protect the resources of Delaware’s coastal region by limiting heavy industry and bulk-product transfer along the shoreline. The act established a Coastal Zone to delineate protected areas, which were then governed by regulations passed in 1999, 28 years after the act was signed into law.

The Coastal Zone protects marshes, beaches and habitats along the Delaware River, Delaware Bay, C&D Canal, Atlantic Ocean and Inland Bays, in some places reaching as far inland as 2 miles. Its inland boundary varies, and the zone also covers some areas of open water.

Legislators' take on HB 190

All Sussex County legislators voted in favor of House Bill 190, with the exception of Sen. Gary Simpson. Here’s what a few had to say:

Gary Simpson: “The potential impact is that there could be a spill some place that would harm the coastline, and certainly the coastline makes up a large portion of my district. I think that while it certainly could lead to greater economic development, it needed six months or a year more of public input to make sure we were doing it right.”

Rich Collins: “I'm hoping and praying it will provide some jobs and economic opportunity. I honestly think Delaware signed the death warrant for its economy however many years ago when that Coastal Zone Act was put in. I'm not afraid to say there won't be some negative aspects, but I prefer some prosperity.”

Harvey Kenton: “It's going to create jobs and clean up the area that is contaminated. To me it's a win-win-win.”

Ernie Lopez: “The bill is going to enable the states and corporations to go into abandoned sites that are currently polluted and redevelop contaminated sites so we can restart in areas where there was already heavy industry, instead of developing new sites. I think in the long run, there will be more economic development for the entire state, and the state as a whole will be better off.”

Pete Schwartzkopf: “This was a hard decision for me. They first have to clean up the sites, and then they'll be subject to the environmental controls we have now. For me, it was a balancing act. I voted in favor of trying to bring good-paying jobs back to our state.”

Steve Smyk: “Even though it's not affecting Sussex County at all, there's jobs that already exist in New Castle County staffed by Sussex Countians. This is going to help the economy, and the nay-sayers that are saying it's going to introduce pollution, I believe that there's greater controls now, there's greater science to it and I think this is going to be a win-win.”

When the act was passed, it was hailed as a measure to protect the coastline from oil spills and other industrial pollution. It strictly prohibited any new heavy industry or bulk-product transfer operations within the Coastal Zone. Still, existing industrial sites were grandfathered, meaning they could continue operations within the site's existing footprint. Expanding heavy industry or establishing new manufacturing operations in the Coastal Zone are allowed, but require permits.

How does it regulate?

The Coastal Zone Act regulates four major activities: Heavy industry, bulk-product transfer, manufacturing and nonconforming uses.

Heavy industry is defined as a site of 20 acres or more that uses equipment such as smokestacks, tanks or chemical-processing equipment. Examples include oil refineries, steel manufacturing plants and chemical plants.

Bulk-product transfer facilities are defined as operations with a port or dock that move large quantities of oil, grain, gas and minerals from land to water, or from water to land within the Coastal Zone.

Manufacturing sites are where organic or inorganic substances are converted into new products. A chicken processing plant, for example, could be considered a manufacturing operation.

Nonconforming uses specifically refers to the 14 sites grandfathered into the Coastal Zone Act. Thirteen are in New Castle County, while the 14th is in Kent County. They are all heavy industry sites, allowed to continue operating under the law. Any expansion or change in use requires a state permit.

What is House Bill 190?

House Bill 190, known as the Coastal Zone Conversion Permit Act, passed the House June 20 with a vote of 34-7; it passed the Senate June 29 with a vote of 18-2. 

The bill, now that it has been signed into law, will allow redevelopment of the 14 grandfathered sites and will permit "alternative or additional heavy industry" at those sites through a new conversion permit process. The bill bars construction of new oil refineries or paper mills, Kristl said.

Any grandfathered sites that had a dock by the time the Coastal Zone Act was passed also could apply for new bulk-transfer operations, an activity prohibited elsewhere in the Coastal Zone. Liquefied natural gas transfers are not permitted under the new bill.

The bill requires companies to seek a conversion permit and outline potential environmental and economic impacts, comply with state and federal clean-up programs, provide a sea-level rise plan, offset any negative environmental impacts, provide "evidence of financial assurances" and submit an application that requires additional information about operations.

Kristl said financial assurances could be proof of an insurance policy, or placing a significant amount of money in escrow up front. Specific definitions of these requirements will be included in regulations, which DNREC must develop by Oct. 1, 2019.

How did the bill change the Coastal Zone Act?

House Bill 190 loosens the act's prohibition on new heavy industry and bulk-product transfer activities, although only on the 14 grandfathered sites. Kristl said, of those sites, nine are in use, three are scheduled to be redeveloped in ways not subject to the 1971 law, one is the Metachem Superfund site, leaving only one site that could qualify as an idle site.

Other than on these grandfathered sites, heavy industry and bulk-product transfer operations remain prohibited. Manufacturing operations are still allowed in the Coastal Zone, with a permit.

Companies can apply for a conversion permit now that Carney has signed the bill, but regulations governing the new permit may not immediately be available, Kristl said. It's unclear how that process would play out, he said.

Impacts on Sussex County

Kristl questioned whether House Bill 190 was "the beginning of the end" of the Coastal Zone Act, and said future impacts could come if legislators decide to make more changes to the act to loosen its restrictions on businesses.

Chris Bason, executive director at the Delaware Center for the Inland Bays, said any environmental disasters that may occur as a result of new bulk-product transfer sites or heavy industry operations in New Castle County could potentially affect the Delaware Bay ecosystem, which could have a ripple effect on the Inland Bays or ocean coast.

"The extent of the risk of contamination from the amendment is probably very small, but you really can't speculate or estimate about that because we don't know what the result of the amendment is going to be," Bason said. "There's a lot of ecological connection between the [Delaware] Bay and the Inland Bays. But without any information, it's impossible to assess the risk."

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