Reining In Stormwater Regulation

"And I wonder, still I wonder, who'll stop the rain."                  

                                               Creedence Clearwater Revival

 

As environmental issues go, stormwater regulation is not a high priority for many environmental practitioners. Maybe it should be, because EPA seems to be obsessed by it. In the last year, among other things, EPA has:

On the litigation front, cases involving stormwater compliance have been popular. Of the five environmental cases from the Ninth Circuit that sought (and have been granted) review by the U.S. Supreme Court  for next term, three of them relate to stormwater regulation.

For residential and commercial developers, stormwater regulations have been expensive to address, but 20 years of practice have allowed many of them to adapt to the existing requirements. EPA's attempt to introduce numeric effluent limits in the new permit caused a few moments of panic until EPA was forced to withdraw them.

However, a change was made in the permit that has gone unnoticed and has the potential to impact the cost of construction.  The new requirements for stormwater discharges at construction sites can be found at 40 C.F.R. Part 450. At Section 450.21, there are requirements relating to “effluent limitations reflecting the best available practicable technology available.” Buried in this section is a fairly innocuous provision that simply requires the developer and builder to, “unless infeasible, preserve topsoil.”

The reason to preserve topsoil at construction sites is two-fold. First, it has more organic material than denser soils so it allows faster growth of vegetation which, in turn, works to slow down the runoff of stormwater from a site. Second, it acts like a sponge to soak up the rain before it is allowed to run into a gully or ditch and, eventually, to a stream or river. For development of a construction site, however, topsoil has a serious drawback – it's in the way. Topsoil does not provide a solid enough base for roads or buildings and, therefore, the developer frequently finds it necessary to scrape the property of all topsoil before installing any streets, driveways or permanent structures.

While I cannot speak to the rest of the country, in the Midwest, this typically means that the topsoil is removed and is often not replaced, but is used for berms around the site. Respreading it is too costly and would usually affect the final grade of the development.  Rather, when it comes time to put vegetative cover on the open areas, sod (with its own layer of topsoil) is used.  The new permit requirement will change that practice.  The definitional problem that will need to be addressed by every state is the meaning of "preserve" as used in the permit.

Perhaps the term means that areas of a development that are not going to have a structure or street should not have the topsoil removed. As a practical matter, that would be impossible. Virtually every development site of any size requires grading to even the slopes and to account for drainage. The term might mean that whatever topsoil was in existence prior to the disturbance of the site, would need to be returned to the site. As a practical matter, this would be difficult to do. Some areas of a site might have a few inches of topsoil, while other areas might have several feet. Grading in anticipation of replacing the topsoil with what was preexisting would, at least arguably, be infeasible.

As the NPDES Permit for each state comes up for renewal, the issue of how to comply with this requirement will need to be addressed. The permits could simply incorporate the language into the terms of the revised permit, but this would provide virtually no guidance to developers or, more importantly, to the MS4 cities that will be called upon to enforce the requirement.

In Iowa, the General Permit for Construction Sites will need to be updated on October 1, 2012. The Iowa Department of Natural Resources has spent considerable time pondering this problem and has come up with a solution. The IDNR has decided to create, in essence, a safe harbor for compliance. The proposed rule provides that disturbed areas that will not have streets, driveways or structures located on them will require a minimum of four inches of topsoil (which can include the topsoil found in the sod). This amount of topsoil fits well with other building requirements and is a significant sponge for purposes of soaking up rainwater. There is an exception to the four inch requirement for those sites which did not have four inches of topsoil prior to disturbance. If a developer believes that the site has less than four inches of topsoil, he/she can complete a soil survey prior to disturbing any soils and, if the topsoil is less than four inches at any given location, the developer is only required to return that amount of topsoil at the conclusion of the development.

The Iowa solution is far from ideal. While it has the advantage of providing certainty, it does so at what may be a very steep cost. Estimates have not yet been made on the additional cost of returning topsoil to each lot, but there will certainly be added expenses that will add to home ownership costs at a time that the industry needs to be finding ways to reduce costs. On the other hand, it is preferable to an undefined requirement that a developer “preserve topsoil unless infeasible,” which simply invites litigation.

Over the course of the next twenty-four to thirty-six months, virtually every state will need to address this issue. If EPA chooses to make stormwater compliance a priority, and there is every indication that it will, the new permits will result in a significant change in the way developments are built and priced. Adding these costs to help reduce what amounts to less than 1% of the surface water contamination problem is questionable, but it's here. Since we're not going to stop the rain, or the EPA, I would suggest that we need to help our state regulatory agencies come up with a reasonable, and workable, solution.

  

(This entry is cross-posted at American College of Environmental Lawyers).

RELATED POSTS: Stormwater Limitations On Hold . . . For Now

Stormwater Regulation of Developed Sites Coming?

Rapanos, Guidelines and Deference: Wetlands Beware

The Supreme Court's last determination of what wetlands are subject to the Clean Water Act and hence may not be filled without a permit, left behind a matted mess. In Rapanos v. United States, the 4-1-4 opinion articulated two tests for when a wetland constitutes a water of the United States.  In the plurality opinion, wetlands must have “a continuous surface connection to bodies that are waters of the United States.”  Justice Kennedy's swing vote decision for the plurality's remand stated that while there needed to be a connection, it would be sufficient if there was a “significant nexus” with the waters of the U.S.; that is, it would be sufficient if the wetlands, alone or in combination with other lands in the region, would significantly affect the chemical, physical and biological characteristics of the U.S. waters. So which test should be applied?

Since Rapanos, the Seventh and Eleventh Circuits have found that Justice Kennedy’s test must be met under a “weakest link” theory – it is the narrowest grounds for the Supreme Court’s decision in Rapanos. On the other hand, the First, Eighth and recently the Third Circuits have held that if the wetlands can meet either test set forth in Rapanos, then the fill would be in violation of the Clean Water Act.

EPA and the Corp of Engineers, deciding that they needed to "clarify" things, issued a proposed guidance document to help identify waters subject to Clean Water Act jurisdiction.  The Agencies added that the proposed guidance would result in more waters being brought within their jurisdiction - a statement that is the political equivalent of poking a bear with a stick.  Predictably, the proposed guidance quickly came under attack as being an attempt by EPA and the Corp to expand their jurisdiction and to promulgate rules without following proper procedure. 

The "clarification" guidance also did not sit well with several Republican members of Congress -- John Mica, Bob Gibbs, James Inhofe and Jeff Sessions.  On November 8, 2011, these four Congressmen wrote a letter to EPA and the Army Corps of Engineers. They noted that EPA had apparently decided not to finalize the draft guidance but, rather, that the Agencies were planning to address the scope of CWA jurisdiction via rulemaking. The authors commended the agencies for deciding to follow the rulemaking procedure, but lamented that if they were simply going to incorporate the guidance documents into the rulemaking, the Agencies had effectively (and improperly) prejudged the issue, particularly given their view that the guidance “misconstrues or manipulates the legal standards announced in the Supreme Court decisions.”

The letter goes on to “encourage” the agencies to start the rulemaking process fresh, open the matter to an advanced notice of proposed rule-making to obtain public input, and to do a cost-benefit analysis of whatever proposed rule is developed. The authors sincerely hoped that the agencies would not make a “mockery of the rule-making process under the Administrative Procedure Act.”

Perhaps there is more to the letter than a gentle reminder that the Agencies shouldn't consider mocking the law.  If EPA promulgates the rule rather than issues a guidance, the inevitable challenge will be much more difficult because of the deference (frequently referred to as Chevron deference) that will attach to the rule. Deference is a powerful weapon in any agency's arsenal and anyone who seeks to diminish the power of an agency would do well to find a way to challenge that deference.   In this case, the letter is preemptively making the case that if the final rule looks like the guidance, it proves that EPA prejuged the outcome, that the rule should be thrown out and that it would be a "mockery" to allow deference to save it. Given the recent decisions regarding  deference, it just might work.  And if it does, letter-writing will be back in vogue.

(This entry is cross-posted at American College of Environmental Lawyers)

 RELATED POST: An Agency Must Earn Deference

Storm Water Effluent Limitations On Hold . . . For Now

In several prior posts, I have discussed the intended regulation by EPA of stormwater runoff from construction sites through the use of a numeric effluent limitation of 280 NTUs. When we last visited the topic, the National Association of Home Builders had challenged the 280 NTUs limit and, when unable to provide scientific support for the draft rule, EPA withdrew the limit. Then, in December of 2010, EPA submitted a proposed rule to revise the turbidity limit to the Office of Management and Budget.

On August 17, 2011, EPA withdrew the proposal from OMB. EPA “has decided to seek additional treatment performance data from construction and development sites before proposing a revised numeric turbidity limit.” It will be publishing a Federal Register notice soliciting data sometime in the near future.

As part of the review, I would suggest that someone needs to ask a few questions: Is the stormwater program broken?  Does it really need fixing?  Is an industry that accounts for less than 1% of the water quality issues in the country really worth this kind of time and effort?  Are we actually going to get an improvement in water quality commensurate with the $10 billion dollar annual price tag on new construction that the limit would bring?

I’m hoping that EPA doesn't feel like it must continue down this path just because it started down this path.

 

RELATED POSTS: 

Stormwater Regulations Are Flawed: EPA Needs A Do-Over

The Train's A-Comin': More Stormwater Rule Changes

Stormwater Regulation of Developed Sites Coming?

New Stormwater Regulations Rain Down on Developers

 

 

Environmental Innovation: The Good Kind of Salt

Solar energy, as an alternative energy source, has been making great strides in many areas of the country. Some particularly progressive states have promoted it by giving subsidies for solar construction, even though those states are not the most optimal location for solar collection. It is one of those energy technologies that can be used almost anywhere.

There are two methods of collecting solar energy: solar photovoltaic (PV) and concentrated solar power (CSP).  PV systems, as are seen on roofs of houses, convert sunlight directly into energy;  CSP systems use mirrors to concentrate the sun's beams to a central point which heats water to drive turbines.  One major drawback for both types of solar power has been the unfortunate law of nature that the sun doesn't shine all day.  That problem has now been solved, at least for CSP systems.   

The Andasol Power plant, a CSP solar power plant in Spain, can now pump out electricity for up to 24 hours from solar collection. The trick is to melt salt.

The plant has 2,650 mirrors that are used to concentrate solar beams on a boiler located in the center of the array. The solar power is used to melt salt during the peak hours of production. The liquid salt can be stored while retaining 99% of its heat, which is then used to boil water for steam power. This occurs throughout the day and night. The Spanish plant is estimated to generate about 110GWh per year. This compares to about 40GWh per year for plants not having the storage capacity. That is an environmental innovation that's worth watching.
 

When All Appropriate Inquiry Isn't

                                      

                                   “Be afraid. Be very afraid.”
                                                    Genna Davis in
The Fly

 

In November of 2006, a remarkable thing happened – EPA allowed for the purchase of contaminated real estate without ownership liability. A change in the rule allowed a person buying real estate to assert the Bona Fide Prospective Purchaser Defense, the Innocent Landowner Defense or the Contiguous Property Owner Defense. The rain stopped, the clouds parted and the sun shined.

Surprisingly, EPA did not demand all that much in return. It set out concise rules about what needed to be included to conduct "all appropriate inquiry" (AAI) and permitted the use of a Phase I Environmental Site Assessments (compliant with ASTM 1527-05) to qualify for the protection. Apparently, some consultants have trouble reading.

In a recent investigation conducted by the United States EPA Office of Inspector General, a review of 35 Phase I Reports was undertaken to see if they satisfied the requirements of AAI. Low and behold, every one of them – 100% – failed. Every one of them left out something that must be addressed under the AAI protocol.

Among the findings:

• Seven reports failed to have a statement regarding data gaps;

• None of them included the Statement of Qualifications of the Environmental Professional;

• All of them left out the EP opinion statement in the Conclusion that is required;

• In the most baffling finding of all, nine were not signed by the EP.

So of the 35 reports received, none passed. Is this so devastating?  In the context of the Brownfields program that was being reviewed, maybe not.  But these Phase I reports were the same reports that we order up every day for real estate purchases.  Would it really be a problem if the Environmental Professional forgot to include one of the listed items? 

Imagine your client comes to you and says she wants to buy a site that was previously a manufacturing facility. The Phase I identifies the past use of toluene at the facility and finds evidence of a release. Your client purchases the property and undertakes all requirements necessary to satisfy the Bona Fide Prospective Purchaser Defense.  Five years later, a toluene plume, identified as originating from the site, is threatening the drinking water supply for the city of Puppyville. EPA investigates and determines that the prior owner is bankrupt. Your client, having used the site very successfully and profitably as the home office of a mortgage foreclosure company, is the only one around who might be able to pay for the clean-up. She refuses and asserts the Bona Fide Prospective Purchaser Defense.

At the summary judgment hearing, your client concedes that the only thing standing between her and clean-up liability is the fact that she conducted AAI by performing a Phase I Environmental Site Assessment prior to buying the property. EPA agrees that if the Phase I is valid, the defense would be available. However, EPA points out that the Phase I did not include the Statement of Qualifications of the Environmental Professional. As it turns out, the Environmental Professional that conducted the Phase I is the same one who received the Environmental Professional of the Year Award for the past five years, but he concedes that his office manager failed to include the Statement in this particular report.

You be the judge. Is the Puppyville drinking water supply protected or does Ms. Mortgage Foreclosure get to keep her money?

The teaching point of the OIG Report is that your client might not have the protection that was bargained for due to some pretty basic mistakes. For those who think that it is the consultant’s job to provide a Phase I ESA that is AAI compliant, you’re right. However, if the consultant is uninsured or underinsured, being right will be of little consolation to your client. And your client might very well look for someone else to blame.

As an aside, I feel compelled ask the question: What in the world prompted EPA to conduct the study in the first place? I am sure it wasn’t to confirm that if they ever needed to void a Phase I ESA in the future, they will likely be able to do so. I'm not that cynical. So why? I don’t know, but it’s why I’m afraid – very afraid.

 

 

Moving Day Blues For EPA

After having a new building constructed for it 10 years ago, EPA’s Region 7 Headquarters is preparing to move out of the heart of Kansas City, Kansas to a nearby suburb, Lenexa . . . and a lot of people are very upset about it.

The move will take 600 EPA regional office employees out of a building that has done great things for Kansas City’s urban core and will move them to an abandoned Applebee’s headquarters in the suburb. I have had the dubious pleasure of being at the current headquarters many times and I always thought it was a great building and a great location.

The debate is devolving into a classic he-said, she-said argument. Each side is pointing at the other and it is all playing out in the newspapers and internet. No one really knows all the facts as to whether the landlord was demanding some outrageous sum or the General Service Administration (which negotiates these leases) was making unreasonable demands. Until all the facts are known, you just cannot condemn either side.

However, there was a statement made that I think is worth noting. Charlie Cook, a spokesman for G.S.A., reportedly said that the decision was purely a matter of economics:

We worked with them on several different terms and rates from what they were proposing. After several attempts, we thought it would be irresponsible to accept the offers that were made.

We’re the stewards of the federal tax dollars, and we can’t just sign a lease based on what’s popular with some. We have to stick to our principles.

To me, that sounds like the overriding consideration in making the siting decision was money and, if so, EPA has done itself a huge disservice.  Most things that are good for the environment are more expensive than those that are not – it's always cheaper to skip installing the liner at a landfill; it is a huge cost savings to dump hazardous waste in a stream rather than take it to a treatment facility; and if a business wants to save money, avoiding the installation of air scrubbers would do the trick. But the idea is that a cleaner environment sometimes requires expenditures beyond what is convenient. 

If it was someone else, say Microsoft or Ford or Aetna, would we be having this discussion? Probably not. But EPA is not a private company. EPA is in charge of the environment. Even if it can consider only the economics, it shouldn’t.  There should be some sort of a cost-benefit analysis, not just a cost analysis.

As I said, it does not appear that all of the facts have been provided to us. If EPA has balanced all of the environmental factors as well as the economic ones and has decided that the move is warranted, then the agency should make its case. But if it has done that, we haven’t seen it.

I should add that this is not just a credibility issue. If EPA can use the defense that it costs too much to consider the environment, then businesses should be granted that same exemption. And if that argument catches on, EPA is not going to need any headquarters.

Awarness-Raising Blogs

The good folks at Online-Accredited-Colleges.org have compiled a list of climate change blogs that is very impressive.  Their introduction says:

Climate change is an issue that affects all of us as a collective.  With our 50 top climate change blogs, we endeavored to provide the best and most current information on climate change issues, effects, and legislation being passed.  Overall, the blog spots offer a wide range of information, some from PhD recipients, and others from young people just trying to make a difference in their world.  Videos, links, commentary, and news stories help to foster a group based platform for change.

The blogs are not just about making a point; they are a call to action for the rest of the world and an illustration that changes need to be implemented . . . and soon.  So without further delay, here are the 50 most informative blogs about climate change today.

It's an extremely diverse list and I'm proud to be included.  Give it a look if you want to  find current and thoughtful posts on climate change issues.  Somewhere down the line, the environment will likely be glad that you did. 

LexisNexis Top Environmental Blogs

Well, the votes are in and I passed the audition!

LexisNexis has announced their "Top 50 Environmental Law & Climate Change Community Blogs for 2011" and they included my effort.  I want to thank my mom and dad, my wife, my dog, my favorite pen, my uncle Albert, his dog (Pickles) . . . .  Actually, thanks to everyone who took the time to read the various blogs and to vote.

And thanks in advance to all of you who are going to go to the others on the list to start following those posts.  There is a lot of great information out there that will help us all understand the environmental issues a little better and, in the end, that's how change happens.

(Now where did I put that pen).  

   

 

Ignoring The Storm Water Elephant

The picture on the left shows a farm field. The picture on the right could be a site being prepared for residential construction. Both of them receive rainfall, both of them allow runoff of sediments and contaminants and both of them impact the quality of surface water in nearby streams. What is the difference between the two? The picture on the right costs about $3,000 per acre more for storm water regulatory compliance than the picture on the left.

 

Lisa Jackson, the U.S. EPA Administrator, was in Iowa a few days ago with Agricultural Secretary Tom Vilsack (Iowa’s former Governor). She was visiting some farms to review runoff issues. After visiting the farms, Ms. Jackson told reporters:

I am ruling out the need for us to move directly to a regulatory mechanism when we have folks stepping up and are willing to do the conservation measures. 

Ms. Jackson believes that farmers are adequately addressing the issue of fertilizer runoff into water ways on a voluntary basis and they do not require regulatory oversight. While others may disagree, I will defer to Ms. Jackson's expertise.  My problem is that Ms. Jackson apparently has no such faith in land developers.

Six days ago, EPA released a draft permit that will further increases the regulation of discharge of storm water from construction sites. If all of the effluent limitation rules are put into place, it has been estimated that nearly one billion dollars in annual costs will be incurred at those sites. This is in addition to the existing costs of storm water regulation.  While current stormwater compliance costs can vary depending upon the regulatory scheme of the particular state and whether construction is occurring within an MS4 city, a rough estimate would place it at about $3,000 per acre in increased construction costs for compliance with the existing regulations.  The proposed new regulations will add to those costs.

Before concluding that this is a small amount to pay, bear in mind that these costs will be passed on to the home owner. A study conducted by the National Association of Home Builders found that for each $1,000 increase in home building costs, a certain number of potential buyers will be “priced out” of the market. This number varies from city to city, but for Des Moines,  a $1,000 increase will bump 522 people out of a home purchase. (In La Crosse, Wisconsin only 10 people will be priced out; in Atlanta, Georgia 4,022 people are affected).

So why not make the trade-off?  Well, because of that pesky thing called cost/benefit analysis.  These costs are being imposed on an industry that contributes less than 1% to the surface water contamination problem, while agricultural runoff creates well in excess of 50% of that problem.  For the dollars being expended and the loss of home sales, it is not possible to receive any significant benefit.

But even if you could justify the expenditure, my question is, why should there be there such a huge discrepancy in dealing with these two groups? I'm happy to agree with Ms. Jackson that agricultural runoff does not need the heavy hand of federal regulation and its accompanying costs. However, if she is not going to address the elephant in the room, it seems a bit unfair to require the expenditure of such huge sums to sweep up the peanut shells.

 

RELATED POSTS:

Guidelines for Cost Benefit Analysis -- So It Begins

Agricultural Runoff Comes Under Scrutiny

More Stink About Agricultural Runoff

 

Arranger Liability Under CERCLA: Just a State of Mind

During the 1990s, there was an interesting string of Superfund actions that addressed what turned out to be a common problem. Many products that contain hazardous materials are shipped in 55 gallon drums. When the drums arrive at their destination, usually a manufacturing facility, the product is used. The question is, what do you do with the empty drums? Since many facilities have no use for the drums, there developed a business that was willing to accept the drums, clean them up and resell them. The problem was that the drums often contained some of the hazardous material. The drums were “RCRA empty,” but that designation allows some material to remain in the drum. Many of these refurbishing companies were a bit . . . lax . . .  in their cleanup procedure and the residual product ended up on the ground. When the contamination was discovered, the company was often unable to pay for the cleanup.  EPA would review all the records of the company and usually pursued the top 10 drum suppliers.  These top 10 suppliers formed a committee, looked through the receipts and went after the other 500 -- or 5000 -- customers who had supplied the facility with drums. EPA was extremely successful in its endeavor and a large number of these “drum-and-barrel” facilities were cleaned up by thousands of unsuspecting companies that had sent the barrels to the facilities only to find, many years later, that mishandling of the barrels cost them a lot more money and time.

EPA’s underlying theory for this recovery was that all persons are responsible for hazardous materials from “cradle-to-grave.” It's one of those catch-phrases that rolls off the tongue so easily.  It means that once you buy a hazardous material, you are responsible for every drop of it until its final disposition either by incorporation into a product or by arranging for its proper disposal.

A recent case from the Federal District Court of Connecticut (which will certainly be repeated) illustrates that a lot can happen in a decade or two.

In the case of Schiavone and Harbor Circles, LLC v. Northeast Utilities Service Company, the defendants, from 1971 through 1978, would obtain and drain electrical transformers of their PCB-containing oil. They then sold the transformers to a scrap yard. Not surprisingly, the sale contract made no reference to the residual PCBs or the disposal of hazardous substances.  As you would guess, the scrap yard was eventually identified as a clean up site for PCBs and the suppliers of the scrap transformers were pursued. The Court first noted that the plaintiff failed to show that the transformers supplied to the scrap yard had any PCBs left in them. However, the Court went on to say that even if PCBs had been included, it would not matter. The District Court stated:

It is undisputed that the defendants had a specific purpose of disposing of used transformers, and in the case of the sales to Kasden, by selling them as scrap metal.  The defendants have produced evidence that would support a conclusion that their specific purpose with respect to their dealings with Kasen did not extend beyond that, i.e., to disposing of any oil that was In the transformers or any PCBs that were in such oil. . . .

[T]he defendants’ specific intent to dispose of the transformers themselves is not enough to make them “arrangers” under Section 9607(a), even if the defendants had knowledge that oil was in the used transformers when they sold them to Kasden. [Citing to Burlington Northern v. United States]. The plaintiffs have produced no evidence that could support a conclusion that the defendants had as a purpose in their dealings with Kasden disposing of transformer oil containing PCBs.

The Court sustained the defendants’ motion for summary judgment because the intent element of arranging for disposal could not be established even if the actual release could be.  Put another way, if an inevitable release is certain to happen based on the product supplied, but the supplier really hopes that the certainty will not occur, then the supplier is not responsible for the release. State of mind, particularly one rooted in fantasy, is a wonderful thing.

Still, it's hard to criticize Judge Thomson’s conclusion. It certainly fits with the holding of Burlington Northern. After all, if you intend no harm, why should you have to pay for it when it happens?  In slightly different terms, I have gotten the same question from my five-year old. It is a bit disturbing to know that he now has the backing of the Supreme Court.  

My only question is, now what? Are these orphan sites going to be cleaned up by EPA? Doesn’t this just shift the cost of cleanup from the refurbishing company to the public? Don’t get me wrong, perhaps that's the "fair" result. I just think someone should tell Congress while they are considering reauthorization of the Superfund tax

And while we’re at it, do the thousands of individuals and companies who paid to clean up the old drum-and-barrel sites get their money back? I’m just wondering.

 

RELATED POSTS:

R.I.P. Superfund Arranger Liability: 1980 - 2010

Burlington Norther (Part 1): The Shell Game Of Shipping

 

Stormwater Memo Mulligan

Once again, EPA finds that it must reconsider its position and has decided to allow the public to comment on a recently issued memorandum. On November 12, 2010, EPA issued a memorandum relating to TMDLs and storm water permits. It was designed to replace a 2002 memorandum regarding the same topics.

The most important discussion found in both of the memoranda relates to the requirement of numeric effluent limitations for storm water discharges. The 2002 memorandum says that such limitations would be “rarely used.” Much to the chagrin of storm water permitees everywhere, the 2010 memorandum completely reverses this position and states that if a site has the reasonable potential to cause or contribute to water quality standards excursions, the storm water discharge permits for MS4s and construction sites “should contain numeric effluent limitations where feasible to do so.”

One problem with the 2010 memorandum is that it was created without public input. As a result, EPA has decided that it will solicit comments until May 16, 2011, for anyone who wants to be heard. EPA will then decide, by August 15th, whether to retain the memorandum without change, reissue it with revisions, or withdraw it. My suggestion is that the regulated community should take EPA up on its offer because the imposition of numeric limitations will likely have a large cost component with little to no commensurate benefit.

For example, and by way of suggestion only, someone might want to take EPA to task on its belief “that there has been an incremental evolution of the storm water permits program and the TMDL program that has been occurring since 2002, such that numeric effluent limitations are no longer as rare as they were in 2002.” I, for one, would like to see the numbers. It seems to me that, at a minimum, tens of thousands of storm water permits are issued nationwide every year. I would certainly agree with EPA that in 2002, those permits that included numeric effluent limitations were very few. The question is how many such permits were issued in 2010? Let’s say it’s 500 (which I think is way too high). I would suggest that such permits are “rare” even in 2010.

Someone else might want to comment that even if a numeric effluent limitations are no longer as rare as they were in 2002, so what? Is there some reason for fixing a system that isn’t broken? Has someone shown that there is a big advantage to be gained? If following the numeric limitations is 2 or 5 or 10 times the cost of the narrative limitations, is that a sensible trade-off?

Yet others might take issue with EPA’s flippant comment that the memorandum does not constitute a

regulation itself, nor does it change or substitute for those provisions and regulations. Thus, it does not impose legally binding requirements on EPA, States, or the regulated community nor does it confer legal rights or impose legal obligations upon any member of the public.

Someone might want to say to the EPA, “really?” If the memorandum is not legally binding and it does not confer legal rights or any obligations on anyone and it cannot be relied upon, then why are we wasting our time? And will public comment suddenly make the memorandum binding? (Note: While I certainly hope that EPA is correct in saying that it has no impact, the United States Supreme Court might disagree with that assessment as it did in last term’s case of Coeur Alaska, Inc. v. SEACC.  In that case, the Supreme Court went so far as to say that an unpublished memorandum could be used to reverse a decision by the 9th Circuit that had prohibited a company from turning a lake into a landfill.  I wonder if EPA knows about that case.)

In any event, it’s your time to be heard.  Use it wisely.

 

RELATED POSTS:

EPA Stormwater Policy Explodes Quietly

Coeur Alaska v. SEACC

More Stink About Agricultural Runoff

In December 2009, EPA commenced rule-making efforts to consider changes to the stormwater regulations, including the setting of numeric limits for pollution caused by construction related to new development and redevelopment. Current plans are for EPA to propose the rule in late 2011 and have it finalized in 2012. As I have previously posted, the change is unexpected, significant and expensive.

Much of the weight of the revised rules will fall on MS4 cities. As a result, two groups that oversee environmental issues for states and cities have provided some preliminary comments to the EPA. Each of these comments are interesting in their own right and raise many issues related to the proposed changes. For our purposes here, I want to focus on just one of those issues: the proposed expansion of the geographical areas to be regulated.

In this regard, the National Association of Clean Water Agencies commented:

NACWA is generally supportive of efforts to bring previously unregulated discharges within the NPDES permitting structure . . . . NACWA is particularly supportive of expanding the NPDES stormwater program to currently unregulated sources if it is done as part of an overall watershed approach to permitting that looks at all sources of water quality impairment, including agricultural runoff.

In a second set of comments provided by NACWA to EPA, they state:

[Bringing previously unregulated discharges into the NPDES program] is necessary to effectively manage any watershed and would help to level the playing field by making currently exempt discharges responsible for the quality of the stormwater rather than placing all of the burden on existing Phase I and Phase II communities and construction sites.

In a comment provided by the Environmental Council of the States, there is a more subtle approach:

EPA proposes several options to expand the geographical areas beyond the current “urbanized area boundary” coverage. Among these options is the use of Metropolitan Statistical Areas and other techniques that will greatly increase the areas covered by this rule. Some of these options might even justify coverage in rural areas. Is it the agency’s intent to broaden the scope of this rule beyond areas dense human population?

In each of these comments, the point being made is that agricultural runoff needs to be regulated. While compliance with the current narrative standards for stormwater would be difficult for most farming operations, a numeric standard on nitrogen and phosphorus would likely have a dramatic impact on the cost of farming.

The point of all of this is to identify that EPA has, once again, “stepped in it.” Entities like the Farm Bureau, the National Pork Producers Association and every Republican will begin the process of turning this into a political question. Farm-state Congresspersons (and lobbyists) will be heard loudly and often and more accusations of overreaching by EPA will be made.  Still, the forces that are calling for non-point source regulation are beginning to increase and organize.  They don't seem to be at a tipping point yet, but each time EPA imposes additional regulation on point sources, more people seem to point at agriculture and say "what about them?"

 

RELATED POSTS:

Agricultural Runoff Comes Under Scrutiny

Clean Water, Agriculture and Sacred Cows

The Train's A-Comin'

 

                            

                            
 

Top 50 Environmental Law Blogs

A big thanks to LexisNexis for including my effort in their initial nomination list for the top 50 environmental law and climate change blogs for 2011.  Given the company I am keeping, it's a real honor. 

Take a look at the list and you'll see that there are many great writers saying a lot of things about the environment that need to be said. You don't have to agree, but you'll hear all sides and you'll be a lot better informed about these important issues.  That's what a really good blog is supposed to do and LexisNexis has given you an excellent start on finding them.

The Devil, The Detail and Cost Benefit Analysis

On January 18, 2011, President Obama signed an Executive Order that addresses regulatory reform. Among other things, all federal rules affecting business will be reviewed to see if they are “outmoded, ineffective, insufficient or excessively burdensome.” Prominent in the Order is a directive that:

Each agency must, among other things: (1) propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the cost of cumulative regulation; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior of manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

In other words, the agencies are to do a cost/benefit analysis of their regulations. This is not a new requirement, but it is interesting that the President would choose this time (just before the State of the Union Address) to reiterate the principle.

Perhaps not surprisingly, the EPA has decided to modify its method of determining the value of a human life when it comes to regulatory analysis. In a draft White Paper issued on December 10, 2010, EPA sets out its new formula. I’ll leave it to you to decipher the sixty-two page tome, but you should be happy to know that you are worth more today than you were last year. (While perhaps a consoling thought, one should consider the source). 

One notable aspect of the Paper is that EPA proposes to add a 50% “cancer differential” to arrive at the appropriate life valuation. In effect, this says that dying is costly but dying of cancer is 50% costlier than the risk of dying in other ways. That increased risk, then, must be calculated into the cost/benefit analysis.

There is no question that applying cost/benefit analysis to regulatory reform is necessary and appropriate. Like so many economic tools, however, the devil is in the detail; that is, what you count (and don’t count) becomes the real fighting issue. As a general rule, one side tends to emphasize the hard costs of environmental regulation while the other attempts to put a dollar value on the benefits of the regulation.  Benefits tend to be the harder side of the equation because many are intangible or unquantifiable (like "human dignity" and "fairness" - newly added by the President), with the "value of life" being high on the list.  For the fourteen economists who can decipher it, the White Paper changes the way that value is computed.   And don't forget that the U.S. Supreme Court has recently said that it is up to the agency to determine what to include in a cost/benefit analysis for regulatory purposes.  

My only comment about the change is that we shouldn't get too exited (or buy more life insurance) just yet -- we likely will be considered for "re-valuation" in two or six years.

 

RELATED POST:  Entergy Corporation v. Riverkeeper, Inc.

Charging for Rain on the Federal Plain

 

Regulation of stormwater runoff is a requirement handed down from Congress to the states and from the states to the cities.  For many years, EPA has placed stormwater regulation on its list of priorities, which is not going to change any time soon. Since many point sources are located within city limits, it is the cities that find themselves scrambling to come up with funds to maintain the necessary infrastructure and staff needed to comply with the regulations.

Not unexpectedly, cities have found this to be an ever-increasing expense in a time of decreasing revenues.  For this reason, many cities have taken this expense out of the general fund obligation and have created, or are creating, stormwater utilities that allow a fee to be imposed on each assessable property within city limits (with some restrictions). While this has certainly been helpful to a municipality’s budgeting process, it has always been a bit frustrating that federal facilities within city limits get a free ride because of their exemption from state or city-imposed assessments. This has now changed.

In the waning hours of the 2010 lame-duck congressional session, an amendment to the Clean Water Act was passed (S.3481) which allows municipalities to require stormwater fees to be assessed against federally owned roads, buildings and structures. The measure was signed into law on January 4, 2011.

The change will be good news for cities. Though it will not be a large dollar amount, it will compel the federal government to help fund the huge, unfunded mandate required by the stormwater regulations. Maybe if some pain is felt by the Fed it will encourage EPA to get serious about the real elephant in the room -- nonpoint sources.  Until then, cities should accept the invitation to collect stormwater fees from federal facilities located within their city limits.   

 

RELATED POSTS: EPA's Hit List For 2011-2013

                                   EPA Has Its Priorities