Becker's Iowa Environmental Law Update : Iowa Environmental Lawyer & Attorney : Charles Becker : Belin McCormick P.C. Law Firm : IA Regulatory Compliance, Site Cleanups

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 They noted that EPA had apparently decided not to finalize the draft guidance but, rather, that the Agencies were planning to address the scope of CWA jurisdiction via rulemaking.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

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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

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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

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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

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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'

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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.

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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
 

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If someone moves a hazardous substance from their property to a property owned by another and the substance is released into the soil or groundwater, that party can be liable for the resulting damages under a theory of arranger liability under CERCLA. The tough question is usually the level of proof necessary to show that the party caused such a transfer. In the recent case of DVL, Inc. v. General Electric Co., et al., the United States District Court for the Northern District of New York set a rational, but surprisingly high, bar for that proof.

Before setting out the facts, I should point out that the Court acknowledged that there is a relaxation of traditional causation principles under CERCLA:

[T]he party seeking costs need only show that there was a release or threatened release, which caused incurrence of response cost, and that the defendant generated hazardous waste at the cleanup site. What is not required is that the government (or another authorized party) show that a specific defendant’s waste caused incurrence of cleanup costs. CERCLA thus “relaxes” but does not eliminate the causation requirement: a plaintiff need not show a causal link between that particular waste and the response costs the plaintiff incurred, but it must demonstrate that a defendant deposited hazardous waste at the site in question.

While the Court was agreeable to allowing the use of circumstantial evidence to prove the relaxed causation standard, it found that such evidence did not exist in this case.

In DVL, Inc., the plaintiff owned property that was 150 feet “down-gradient” from a property owned and operated by General Electric for the production of capacitors and electrical components. It was undisputed that the GE site was contaminated with polychlorinated biphenyls (PCBs). Although GE never owned or operated any portion of the DVL site, the DVL site was found to be heavily contaminated with PCBs. (DVL had made no investigation of the site when it purchased the property for $500,000 in foreclosure in 2002).

Despite the fact that the DVL property was down-gradient from the GE site, two monitoring wells placed between the properties consistently tested non-detect for PCBs. As such, if the contamination was traveling to the DVL site from the GE site, it apparently was not doing so via the tested aquifer. As a result, there were only two remaining possibilities: the contaminant was being physically transported from the GE site and allowed to be released on the DVL site or the contaminant was moving next door via storm water runoff.

With regard to the physical transportation theory, the plaintiff could produce no evidence that anyone from GE had transported materials to the DVL site. Although there was some testimony that electrical transformers containing PCBs could have leaked on the DVL site, there was no showing that they were GE transformers.

Turning to the possibility of surface water transport, the testimony showed that such water did, in fact, flow from the GE property to the DVL site but there was no proof that the water contained any PCBs. The Court noted:

DVL has not presented an expert to opine that [the surface water had PCB contamination] and that this migration of surface water explains the contamination at the DVL site. In the absence of eyewitness testimony or other direct evidence, and without expert opinion linking GE to the contamination at the DVL site, the circumstantial evidence DVL cites does not provide the Court with a basis for denying GE’s Motion for Summary Judgment.

The case is an interesting read for causation in lateral migration cases because it is a situation that so often arises. The question in these cases is always: How did the contamination get from there to here? For the plaintiff, the clean wells between the properties presented an almost insurmountable problem because if the contamination was not traveling underground, how else could it have been conveyed from the upstream property? The Court’s answer was likely the correct one; that is, either someone must have seen the release of the hazardous substance from a GE activity (either the delivery of the hazardous waste onto the property or the sale of a GE transformer that was seen leaking) or expert testimony would need to be used to fill the gap regarding the unknown delivery. For example, if storm water transported the contamination from the GE site to the DVL site, testing might establish that the contamination was confined to the surface runoff paths and the contamination was greatest on the surface and at the property border and decreased away from property border and at depth. While expert testimony is never cheap, the plaintiff was seeking the recovery of cleanup costs that were in excess of $1 million dollars. (I should note that it is possible that this analysis was done and an expert could not support the theory, though the opinion does not give that impression).

While the Court gave lip service to the prior case law that there is a “relaxed standard” for arranger liability under CERCLA, it certainly did not give the plaintiff in this case much benefit of the doubt, even though the Court was simply considering a motion for summary judgment. The Court made it clear that for arranger liability, you must show how the defendant’s hazardous material got from there to here -- and for this showing, close is not good enough.

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

                                   Burlington Northern: The Shell Game of Shipping

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With little fanfare and in as subdued a manner as possible, EPA has significantly changed the face of stormwater regulation in the United States.

In a November 22, 2002 memorandum by the Director of the Office of Wetlands, Oceans and Watersheds, EPA declared that “EPA expects that most water quality based effluent limits for NPDES-regulated municipal and small construction stormwater discharges will be in the form of best management practices, and that numeric limitations will be used only in rare instances.”  That is, EPA’s policy was that for a small construction and municipalities, it would be a very rare instance in which numeric limitations would be placed on stormwater discharges.  Rather, regulation would rely on the use of best management practices and, if these were followed, the construction site and/or municipality would be in compliance with the regulations.  By a memorandum dated November 12, 2010, issued by the Office of Wastewater Management, that policy has now been turned on its head.

According to the new policy, since 2002, the regulated community and stake holders have gained “more experience and knowledge.”  Apparently as a result of this experience and knowledge,

EPA now recognizes that where the NPDES authority determines that MS4 discharges and/or small construction stormwater discharges have the reasonable potential to cause or contribute to water quality standards excursions, permits for MS4s and/or small construction storm water discharges should contain numeric effluent limitations where feasible to do so.  EPA recommends that NPDES permitting authorities use numeric effluent limitations where feasible as these types of effluent limitations create objective and accountable means for controlling stormwater discharges.

EPA’s policy change is dramatic.  Going from a subjective standard of “best management practices” to an objective standard of numeric limitations will fundamentally change the way that discharges are regulated and will add significantly to the cost of construction and municipal services.

Moreover, EPA has not provided any guidance on what the numeric limitations should be.  In a recent instance in which EPA decided to pick a numeric limitation for construction site runoff, the Agency was challenged and was unable to defend its choice of 280 NTUs as a numeric turbidity limit.  As a result, it was forced to withdraw the numeric limitation.

For those who don’t see this as a radical change in the regulatory scheme, I would note the comments of Alexandra Dunn, the Executive Director and General Counsel of the Association of State and Interstate Water Pollution Control Administrators, who told the BNA Environment Reporter:

This is an important memorandum that could represent a fairly dramatic shift in the program.  If it is, we are going to have to have more conversations with EPA.  We have heard from states that the memo poses some concerns for them.  We are still digesting it.  This raises some questions.  Our initial reaction is concern.

Ms. Dunn added that state officials were caught by surprise and not aware that EPA was planning these significant policy changes.  She said that the Association is intending to meet with EPA in December.

There is no real debate over whether water quality needs to be improved.  Just looking at the list of more than 40,000 impaired waters tells us that.  Rainfall has an impact on what ends up in those waters and since rain falls everywhere, it needs to be regulated if water quality is to be addressed.  But there is a practical component to this regulation.  The vast sums required to corral mother nature need to be spent where they have a real impact. Over the past five years or so, EPA has spent an inordinate amount of time, money and effort addressing a very small aspect of stormwater regulation -- construction sites and municipalities -- which has resulted in dramatic increases in costs of goods and services with a disproportionately small impact on water quality.  If you want clean water in the United States, further regulating point sources, particularly constuction and municipalities, is not the answer.  Until the large, non-point sources are addressed, we are not addressing the real problem.  And until then, coming up with yet more, onerous regulation that even EPA can't get right, probably isn't the best solution.

RELATED POSTS:  Agricultural Runoff Comes Under Scrutiny

                                   The Rain's A-Comin"

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Iowa, like so many other states having a large agricultural-based economy, has water quality problems.  With the amount of fertilizer used for crops and the quantity of manure created by animals, it isn't hard to understand why one top official at the Iowa Department of Natural Resources recently said that that there is a "fight between agriculture and water quality."

Despite this disadvantage, EPA has to regulate Iowa (and the other ag-based economies) just like all of the other states.  To that end, EPA just concluded its review of Iowa's designated use changes to its Water Quality Standards and has, not surprisingly, found them wanting.  Of the 127 use designations considered,  EPA disapproved the proposed water changes for 57 water bodies while approving 69 water bodies. 

In commenting on those sites that were disapproved, EPA explained:

EPA's review of many of Iowa's UAAs identified the following six recurring situations associated with the data submitted for the assessed water body segments: 1) instances where the depth data did not support removing the Class Al primary contact recreational use or depth data is discounted due to perceived "elevated flow"; 2) instances where a public comment indicated a Class Al primary contact recreational use is attainable, yet the state removed the Class Al use; 3) instances where there was no data to support a change in designated use; 4) instances where data collected outside the recreational season do not support removing the Class A 1 primary contact recreational use; 5) instances where the UAAs and/or supporting data contains significant errors making it difficult to review the recommendation; and 6) instances where a general use, rather than an aquatic life use, is recommended despite the presence of water. For these situations, the data and information provided in the submission were not adequate to provide the necessary scientific and technical rationale to support changing the designated use from Class Al to Class A2 or to remove an aquatic life use. Therefore, EPA must disapprove changing the designated use from Class Al to Class A2 for the waters listed in Tables EPA 3 -5.

The errors noted seem to be of the type that a little money could solve. Problem is, there's no money.  Every Iowa DNR Director has lamented this fact for years. And with a newly elected Republican governor, operating in a farm state, with few funds, it will be interesting to see what a new DNR Director can do in the new year.   

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Water scarcity world wide is well known, and is a growing problem.  But how about here?  Water wars in the western United States have been common for many decades. Over that period of time, the allocation of scarce water resources has developed through court cases and legislative mandates to create a complex and expensive allocation scheme.

Until recently, however, states located east of Nebraska seemed to have plenty of water for all necessary uses. That may be changing.  New products and new methods created over the past 20 years, combined with hotter weather, are causing a concern in many states. Of the 2000 gallons of water that we use per person per day in the U. S., 95% of that is found in the water costs to create energy, manufacture products and grow, harvest and market our food.  For example, to put one cup of coffee on the table, growing the coffee bean crop, cleaning the beans, manufacturing and transpoting the coffee and marketing the product, results in the use of 37 gallons of water -- its water footprint.  Recognizing that differing methods of calculation can result in differing results, consider, the following:

• A single serving of almonds requires 12 gallons of water to produce;
• A single serving of watermelon requires 100 gallons;
• A single egg requires 120 gallons;
• A loaf of bread requires 150 gallons;
• One car requires 39,000 gallons;
• One latte requires 53 gallons;
•A 20 pound bag of dog food requires 4,000 gallons;
• One dollar’s worth of grain requires 14,000 gallons;
• One dollar’s worth of cotton requires 13,000 gallons;
• One dollar’s worth of electricity requires 450 gallons;
• One dollar’s worth of paint requires 140 gallons;
• One pound of beef requires 1,799 gallons;
• One pound of sheep requires 731 gallons;
• One pound of pork requires 576 gallons;
• One pound of chicken requires 468 gallons;
• One gallon of milk requires 880 gallons;
• One gallon of wine requires 1,008 gallons;
• One gallon of beer requires 689 gallons;
• One gallon of coffee requires 880 gallons;
• One pound of corn requires 108 gallons;
• One kilowatt hour of natural gas consumes .1 gallons;
• One kilowatt hour of coal consumes .15 gallons;
• One kilowatt hour of oil consumes 1.01 gallons;
• One kilowatt hour of solar power consumes .26 gallons;
• One kilowatt hour of hydropower consumes 20.92 gallons;
• One kilowatt hour of biomass energy consumes 66.57 gallons;
• One t-shirt requires 400 gallons;
• 500 sheets of paper requires 1,321 gallons;
• One pound of chocolate requires 3,170 gallons;
• One pair of jeans requires 1,800 gallons; and finally
• One liter of bottled water requires 3 liters.

Is there really a reason for concern about water availability east of the Missouri River?  I would note that between 1995 and 2004, of all of the wells in Iowa, 43% showed decreases in water levels with only 7% showing increases. The remaining 50% showed no change.  In Wisconsin, there have been pockets of local water shortages with litigation between communities over how much water is available. Due to their degraded condition, President Obama has proposed $475 million for the Great Lakes Restoration Initiative.  In 2004, Ohio had its own water "war zone."  North and South Carolina have fought over the Catawba River.  The Georgia legislature is looking into moving its northerrn border 1.5 miles into Tennessee to take in part of the Tennessee River, while the city of Orme, Tennessee has had periods when water was available for only three hours each day.  And Atlanta has been threatened with simply running out of municipal water.

My point to this is that if there are water concerns in Iowa, Wisconsin, Tennessee and Ohio, you can be sure that many states are going to be looking at something that had been previously taken for granted – water availability. If there is even the perception that the availability of water is at risk (and I think there is), you can expect to see legislative and/or regulatory responses.  And with those legal changes will come changes in the commercial and industrial make-up of the states.  It's something worth watching.

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EPA seems to have had a problem with a fundamental lesson we all learn by fifth grade:  Do your homework.

On November 23, 2009, EPA imposed new stormwater discharge rules for construction sites. For the first time, a numeric turbidity limit of 280 NTUs would be imposed on the discharge from these sites. The cost of compliance, according to the National Home Builders Association and Small Business Administration, would exceed $10 billion dollars. NAHB promptly filed suit.

The matter is now before the U.S. Court of Appeals for the 7th Circuit.  As is customary, the Department of Justice is representing the EPA.  According to NHBA, in preparing the case, DOJ requested that its client, EPA, "defend the numeric limit."  EPA apparently then admitted to several flaws and improper interpretation of the data.  Based on this information and in a very unusual move, the DOJ filed a motion with the Court to vacate that part of its final rule relating to the average daily turbidity level of 280 NTUs. EPA requested a “partial vacature of the final rule and remand of the record.” In the words of DOJ:

Based on EPA’s examination of the dataset underlying the 280-NTU limit it adopted, the Agency has concluded that it improperly interpreted the data and, as a result, the calculations in the existing administrative record are no longer adequate to support the 280-NTU effluent limit. EPA therefore wishes to re-examine that number through a narrowly-tailored notice-and-comment rulemaking and, if necessary, revise that portion of the limit before proceeding with its defense of the rule.

DOJ also asked the Court to hold the remainder of the case in abeyance for 18 months.  The motion was granted by the Court on August 24, 2010.  As a result, the 280 NTU rule has been stricken, and the remainder of the rule is still in force and effect.  This means that while additional regulation in the form of increased "best management practices" will be enforced (which several states had already imposed), there will be no numeric turbidity limit on the stormwater discharge.

So who really benefits from EPA’s action? It seems to me there are two groups. First, it is very good news for the building industry.  The 280 NTU rule would have imposed huge additional costs with marginal benefits during the industry's darkest hour.  Hopefully, EPA will do a more thorough review its second time around. 

The second group which is benefited is the U.S. Chamber of Commerce (and the other entities which have challenged EPA on its Endangerment Finding). As we all know, the U.S. Chamber of Commerce is contending that the EPA is wrong on finding that green-house gases present a substantial risk of harm to human health and welfare. The Chamber contends that the science simply does not support EPA. EPA contends that the science is overwhelming and that the Chamber is wrong. EPA’s current admission that it may have misinterpreted the data for imposing the 280 NTU limit, significantly undermines EPA's credibility, particularly from a public relations perspective (in an election year).

In conducting rulemaking, EPA must be right (or at least defensible) on the science and its interpretation of scientific data -- every time. Its rules can impose millions of dollars in compliance costs and penalties. Challenging an EPA determination is time consuming and extremely expensive. The Agency has the time, funds and duty to make sure that their regulations are supported. When EPA finds it necessary to file a motion in a pending action which essentially admits that it did not do sufficient due diligence to determine if its review was correct, the impact to its credibility is huge. Some people might start asking themselves if EPA was wrong about its interpretation of the data on something as significant as the stormwater discharge rules, could it also be wrong about the science regarding climate change. Or what about the science supporting the new lead paint rules? Or even what about . . . . ? EPA has all the time in the world to pass its rules and it will deflect most challenges if it consistently, methodically and verifiably bases the rules on sound science and takes the time to review and properly interpret the data. As soon as it concedes that it has not done its homework, there are all sorts of people who will be happy to take it to school.

UPDATE:  On  September 20, 2010 the Seventh Circuit issued an Order, in response to a Motion for Clarification or Reconsideration, which  will cause some confusion for the states.  This Order failed to specifically vacate the 280 NTU limit.  Therefore, until further action is taken at the District Court or by EPA, the limit still remains as part of the rule.  Presumably EPA intends to change the NTU limit in the future, but for states that are working to modify their rules to be in compliance, this presents a dilemma. 

FURTHER UPDATE:  On November 1, 2010, EPA issued a final rule to stay the numeric limitation of 280 NTU for the "Construction and Development Effluent Limitation Guideline."  If EPA receives no adverse comments, the rule will become effective in 60 days, thus eliminating the dilemma for the states that are in the process of changing their rules.  EPA is planning to revisit the numeric limit and propose a final rule by May 30, 2011.

RELATED POSTS: New Stormwater Regulation Rain Down On Developers

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

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Whether we like it or not, we are a dirty society.

Every day, millions of cars drip hazardous materials onto various streets and parking lots and emit hazardous fumes from tail pipes. Every day we pave roads and roof tops with tar that is full of hazardous materials. Every day factories, industrial sites and machinery send out clouds of hazardous smoke into the atmosphere. As luck, and nature, would have it, rain then falls and washes them all away. Since 1990, this act of nature has been regulated.  Two recent cases indicate that stormwater regulation may apply to many more sites than previously thought.

In Northwest Environmental Defense Center v. Brown, the 9th Circuit Court of Appeals held that the discharge of pollutants from ditches, culverts and channels that collect storm water runoff from logging roads required the issuance of an NPDES permit. Logging was determined to be an “industrial activity” and, therefore the roads and their drainage systems leading to and from that activity constituted a point source that required the issuance of a permit.

In another case, United States v. Washington State Department of Transportation, the District Court for the Western District of Washington, ruling on cross motions for summary judgment,  was asked to find that the Washington DOT was liable for designing state highways with storm water collection and drainage structures which allowed hazardous substances, particularly phosphorus, to be deposited into Commencement Bay, a listed Superfund site. EPA argued that the Washington DOT “arranged for disposal (of a hazardous substance) by designing, constructing and operating drainage systems whose sole function was to collect highway runoff and dispose of it into nearby water-bodies."  The Court was persuaded:

WSDOT arranged for disposal of hazardous substances. It is undisputed that WSDOT designed the drainage systems at issue. Designing is an action directed to a specific purpose. The purpose was to discharge the highway runoff into the environment. WSDOT had knowledge that the runoff contained hazardous substances and that there was an actual release of the hazardous substance into the environment. WSDOT argues that it did not have control over the hazardous substances. However, it did have control over how the collected runoff was disposed of. WSDOT did design the drainage system and, as noted by the U.S., WSDOT has the ability to redirect, contain, or treat its contaminated runoff. For the foregoing reasons, WSDOT is an arranger under 42 U.S.C. § 9607(a)(3).

While WSDOT argued that the runoff was a federally permitted release under its NPDES permit pursuant to 42 U.S.C. 9607(j), the Court held that there was a question of fact on whether the WSDOT was in compliance with the permit and whether there was a release outside the scope of the permit.

Based on these two cases, the scope of storm water regulation seems to have dramatically increased. All haul roads and streets within an industrial complex would require an NPDES permit; tar covered roofs having storm water runoff directed to ditches and into streams would have a similar requirement; and asphalt-based highways, streets and parking lots that could ever be near a Superfund site now or in the future, would be similarly situated.  It should be noted that these cases are consistent with EPA's goal of considerably more stormwater regulation in the near future. 

Is it just me or is the regulation of Mother Nature getting a bit out of hand? Are we really going to compel these kinds of regulatory costs without seeing what kind of incremental impact is taking place?  For better or worse, it looks like that's where we are going.  I guess all the regulated community can do is to pray for dry weather. 

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

                              Applying Stormwater Rules To Existing Facilities

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On August 3, 2010, several environmental groups, led by the Center for Biological Diversity, filed a petition with EPA seeking a ruling from the Agency to ban the use of lead in hunting ammunition and fishing tackle.  As noted by the petition, EPA has authority under the Toxic Substances Control Act (“TSCA”) to regulate chemical substances that “present an unreasonable risk of injury to health or the environment.” (15 U.S.C. § 2601). 

EPA has declared that lead is a toxic substance and has regulated it in other instances, most recently with regard to lead-based paint.  According to the CBD petition (page 3), requiring the use of non-toxic shot gun shot, bullets and fishing gear can be accomplished by having EPA prohibit the manufacture, processing or distribution in commerce of the chemical substance for a particular use as allowed under 15 U.S.C. § 2605(a)(2)(A)(i).

In setting out its case, the petitioners contend that there are hundreds of scientific studies showing the danger of lead in the environment for both wildlife and human health.  Interestingly, the petitioners acknowledge that EPA is specifically prohibited from regulating ammunition or firearms under TSCA (petition at page 3), but they contend that lead can be banned from ammunition and lures if there are alternatives that are commercially available that are non-toxic:

The petitioners have waited until non-toxic alternatives have become available to submit this petition in an effort to clearly indicate that this petition is not an attempt to regulate ammunition or fire arms.

I have trouble seeing how the fact that there are alternatives means it is not an "attempt to regulate ammunition."  It seems to me that it's an "attempt to regulate ammunition via alternatives," but maybe that's just the nit-picker in me.  In any event, a quick response was made by sporting groups. The National Shooting Sports Foundation, Inc., through President Steve Sanetti, stated:

There is simply no scientific evidence that the use of traditional ammunition is having an adverse impact on wildlife populations that would require restricting or banning the use of traditional ammunition beyond current limitations, such as the scientifically based restriction on water fowl hunting.

In support he cites the fact that the number of breeding pairs of bald eagles in the United States increased 724% between 1981 and 2006.

Further, fishing proponents have objected on the basis that the cost of reasonable alternatives are three to ten times as expensive as their lead counterparts.  Objection has also been made on the grounds that there is very little evidence that lead shot or lead lures have caused human health issues.

EPA has 90 days to issue its ruling either accepting or rejecting the petition.  If it is accepted, there will be an opportunity for public comment. While EPA received little opposition to its lead paint rules and virtually no opposition to phasing out the use of lead wheel weights for balancing car tires, this new proposal is different – these are hunters and fishers. For these groups, when you mess with ammunition and lures, you're messing with religion (or, at the very least, a commandment). 

I think that this might be an interesting debate to watch.

UPDATE:  It appears that EPA has decided not to consider a lead ban for bullets, but lead fishing sinkers are still at risk.  The fisher-people of the country have until September 15th to voice their opposition, or switch to a more innovative form of fishing.   
 

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Obtaining information can be costly.  In the area of stormwater regulation, it is an expense that EPA wants to pass on to a chosen few.

As previously reported, EPA held six "listening sessions" in early 2010 to consider:

• Expanding the area subject to federal stormwater regulations;

• Establishing specific requirements to control stormwater discharges from new development and redevelopment;

• Developing a single set of consistent stormwater requirements for all MS4s;

• Requiring MS4s to address stormwater discharges in areas of existing development through retrofitting the sewer system or drainage area with improved stormwater control measures; and

• Exploring specific stormwater provisions to protect sensitive areas.

EPA has decided to go forward and is proposing to survey owners and developers of newly developed sites, NPDES permitting authorities, owners and operators of MS4s and transportation-related MS4 entities.  These are revised questionnaires from those originally proposed in October of 2009.  EPA intends to propose a rule to control stormwater from, at a minimum, newly developed and redeveloped sites and to take final action no later than November 2012. 

Turning to the burdens associated with obtaining the requested information, EPA says:

• The number of potential respondents is 5,516;
•  It will take an average of 30 hours to complete;
•  The total cost of compliance will be $7,000,000;
•  There will be 167,669 hours expended; and
•  The long questionnaire for owners will take 73 hours at a cost of $3,435.

EPA contends that it has the authority to compel responses under sections 304(i), 308 and 402(c) of the Clean Water Act.  Even if EPA has the authority to take this information without compensating the parties for the time and money they will expend to comply (under threat of criminal prosecution if they don't respond), should it?  Maybe it would be wise to expend some resources on determining whether other non-point sources (which account for more than 70% of water pollution) should receive scrutiny before adding yet more regulation to relatively small contributors. 

In any event, you have until June 9, 2010  to comment on EPA's need for the information, the accuracy of the burden estimates and suggestions on how to reduce the burden (presumably such suggestions should be constructive and physically possible).

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

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It appears that the Obama EPA believes that it's pretty hard to measure something if you don't put a number on it.  We're seeing this philosophy play out in the area of imposing discharge limits, where it has become clear that EPA prefers numeric standards over narrative or descriptive standards.

For example, for more than fifteen years, stormwater discharge permitting from construction sites has relied on the use of “best management practices” or the installation of barriers to slow down runoff (such as silt fences or detention basins). When this was properly done, the stormwater regulations were routinely viewed as being satisfied. That has now changed. EPA, for the first time, has imposed a discharge standard of 280 NTUs on stormwater leaving the construction site. The proposed numeric standard was going to be 13 NTUs, but, after participants at public hearings pointed out that this was virtually impossible to meet, EPA switched to 280 NTUs.

Similarly, EPA has, for the first time, implemented a numeric standard for suspended solids that may enter streams from mountaintop mining sites. The solids will be measured through stream conductivity, with a cap of 500 uS/cm. According to EPA Administrator Lisa Jackson, there are “no or very few valley fields that are going to meet this standard.” EPA is taking public comment on this proposed standard until December 1, 2010 but has made it effective immediately.

Moving to air regulation, EPA has finalized a greenhouse gas emission limit from cars and light trucks at an average of 250 grams per mile of carbon dioxide in 2016. This would be the first nation-wide greenhouse gas emission limit to be adopted by the United States.

For anyone who thinks that this trend is going unnoticed by those who watch this sort of thing, I would point out that Sierra Club has renewed its request to EPA to set, for the first time, numeric water quality standards for nitrogen and phosphorus. Nitrogen and phosphorus are the primary pollutants in the dead zone found in the Gulf of Mexico.  Should EPA be inclined to impose such a numeric standard, and if recent attempts to regulate non-point sources are successful, the change could have an immediate impact on farming, which, while being the primary source of income in many states, is also the primary source of nitrogen and phosphorus contamination in lakes, streams and rivers.

Businesses should take note of this direction. Numeric standards can be very difficult on regulated entities. These standards are much easier to enforce than descriptive or narrative standards and they eliminate all discussions of what is fair or reasonable or necessary based on differences in circumstances or locales. Except in the actual creation of the standard, there is no cost/benefit analysis employed. The only question is whether the discharge of the regulated substance is above or below the regulated level, and where that number is put can determine whether you are in, or out of, business.

RELATED POSTS: New Stormwater Regulatuions Rain Down on Developers 

                             Stormwater Regulation of Developed Sites Coming?

                             Agricultural Runoff Comes Under Scrutiny

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Storm water runoff from agricultural property has long been a problem for water quality, primarily because there is virtually no regulation of that runoff. That might be changing.

In a new report issued by the Environmental Law and Policy Center and the Mississippi River Collaborative, there is a discussion of agricultural runoff and a review of the regulatory programs in California, Delaware, Iowa, Kentucky, Maryland, Oregon and Wisconsin. Among other things, the report emphasizes something that is frequently espoused by clean water advocates. That is:

Nonpoint source pollution is the greatest threat to water quality in the United States, yet neither states nor the federal government has taken adequate steps to diffuse that threat. Nonpoint source pollution is one of the most pervasive forms of water pollution and is not directly regulated the Clean Water Act. (Page 3).

According to the Report, since agricultural runoff is a large contributor to water pollution,

Current approaches to protect water quality will not succeed in controlling nitrogen and phosphorus pollution. The Clean Water Act explicitly exempts agricultural storm water runoff and irrigation return flows from regulatory requirements under the Act and its National Pollution Discharge Elimination System (NPDES) program. Discharges from Concentrated Animal Feeding Operations (CAFOs) are covered by the NPDES permit program, but under U.S. EPA CAFO rules, many CAFOs may not seek NPDES coverage because they do not “propose to discharge.” In practice, this means that manure from these facilities is supplied to land, where storm water runoff is exempt from regulation. Consequently, the largest contributors of nitrogen and phosphorus are scarcely regulated at the federal level and pollution problems continue to worsen. (Page 2).

The Report goes on to examine the limited regulation found in the seven reviewed states and then analyzes the various practices that could be used by the states to control nonpoint pollution. Those five practices are:

• Vegetative buffer requirements
• Land application setbacks
• Winter manure application prohibitions
• Livestock exclusion requirements
• Fall fertilizer restrictions

According to the Report, these are “basic, common-sense practices that should be followed by all agricultural operations.” So why aren’t they?

There are any number of possibilities, but the most obvious is that states that rely heavily on agriculture for their economies are not going to impose expensive restrictions on farming practices. This is certainly a valid consideration and, historically, there have been enough of those states to prevent a change on the federal level and with regard to the individual states, there are enough state legislators that are concerned about rural economies that it is difficult to make radical changes on the state level.  There are some indications that the sacredness of these cows may be changing.

The ELPC Report appears to be making a big splash and it comes at a fortuitous time -- the interest in the environment seems to be increasing and will likely continue for at least the next three years.

Also, in the Iowa Environmental Protection Commission’s Annual Report and Recommendations, issued on January 19, 2010, the EPC issued its recommendations for future legislative action saying:

New legislation to address non-point source pollution from agriculture and urban runoff is needed. Non-point sources of pollution are the major contributor to nutrient and bacterial impairment of Iowa’s water and these sources must be controlled to achieve Iowa’s clean water goals.

(It should be noted that the EPC’s admonition was ignored in that the Iowa legislature ended its 2010 session yesterday without passing any new environmental laws).

Finally, the Des Moines Register immediately reported on the ELPC Report and noted that Wayne Gieselman, Iowa Department of Natural Resource’s Administrator of Environmental Services, said that the requirement of no-crop zones along streams together with voluntary buffer-stripped programs, “could gain traction in Iowa if the federal government put up enough cash for rental payments to farmers.”

This is all to say that it may be that there is a new found willingness to consider what used to be off limits. But as with everything political, it will take time -- and, undoubtedly, money. 
 

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In an earlier post, I noted that EPA was in the process of setting its enforcement priorities for the years 2011 through 2013. At the time, the Agency had fifteen areas of possible consideration. EPA has finalized its list and out of the fifteen areas under consideration, they chose five and added a sixth area not previously considered.

The areas that have been chosen for the final cut are:

• Keeping Raw Sewage and Contaminated Storm Water Out of our Nations’ Water – This enforcement initiative will focus on reducing discharges from combined sewer overflows, sanitary overflows and municipal separate storm sewer system. EPA will be requiring various commitments from cities to implement solutions to the problems caused by aging urban infrastructure. For many municipalities, this means huge and expensive construction projects will need to be undertaken in the very near future;
• Preventing Animal Waste from Contaminating Service and Ground Waters – Concentrated animal feeding operations generate a large amount of manure which can end up being discharged into surface waters or seep into ground water. EPA intends to strengthen its enforcement focus on existing large and medium sized facilities that are not in compliance with permitting regulations;
• Cutting Toxic Air Pollution that Affects Communities’ Health – Hazardous air pollutants have been determined to present significant threats to human health. This enforcement initiative will focus on industrial and commercial facilities that are allowing excess emissions;
• Reducing Widespread Air Pollution from the Largest Sources, Especially the Coal-Fired Utility, Cement, Glass and Acid Sectors –Many industries have ignored the New Source Review and Prevention of Significant Deterioration requirements when building new facilities or making significant modifications to existing facilities. This national enforcement initiative will target these emissions, particularly at coal-fired utility, cement, glass and acid plants;
• Reducing Pollution from Mineral Processing Operations – Mountaintop mining has not gone unnoticed by EPA. Mining and mineral processing facilities pose high risk to human health and the environment with many of the sites already being on the Super Fund National Priorities List. This initiative will seek to bring these facilities into compliance;
• Assuring Energy at Extraction Sector Compliance with Environmental Laws – This is a new topic for EPA. The initiative indicates that EPA understands that a push for “clean energy” sources can result in a dirty environment. A particular area of scrutiny will be oil and gas extraction as well as coal mining.

Those that got knocked off of the list include environmental justice, Indian country drinking water, marine debris, RCRA enforcement, RCRA financial assurance, pesticides at day care facilities, industrial surface impoundments, wetlands and worker safety for agricultural pesticides.

Businesses should be aware of the final priority list because EPA has, in the past, followed it when deciding where to place its emphasis (and enforcement funds).  While I doubt that the mining, oil, gas, coal-fired utilities, CAFOs or industries producing hazardous air pollutants are going to be particularly shocked by the initiatives targeting them, some municipalities may be very unpleasantly surprised by their next visit from EPA.

RELATED POST:  EPA Has Its Priorities

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The Clean Water Act is complex and rule intensive.  As such, it is easy to forget the purpose of the Act -- clean water.   The Eighth Circuit recently had an opportunity to remind us of that purpose in the case of Service Oil, Inc. v. U.S. EPA.

For those who practice in the area of property development and storm water regulation, the facts were not surprising.  Service Oil began construction of a Stamart Travel Plaza on more than five acres of land in Fargo, North Dakota. As soon as earth was turned, the site became a potential “point source” under federal law. The storm water discharges from the site were deposited into Fargo’s storm sewer system which then went into the Red River of the North. As a result of this discharge, the site was required to obtain an NPDES permit. The North Dakota Department of Health was authorized to issue the NPDES permits and required that a Notice of Intent to obtain such a permit had to be submitted at least 30 days prior to the start of construction.

In October of 2002, EPA and the North Dakota Department of Health officials inspected the Stamart site and found that no Notice of Intent had been filed, which was quickly corrected by Stamart.  As luck would have it, there was apparently no rain fall that occurred at the site between the time that development commenced and the time Stamart was able to get its Notice of Intent on file. Though the state officials were satisfied, EPA continued its review and determined that Stamart had also failed to conduct site inspections as required by state law.

In bringing its action against Stamart, EPA sought an $80,000 administrative penalty based on two acts: (1) Stamart’s failure to file its Notice of Intent in a timely manner and 2) Stamart’s failure to conduct timely inspections. The majority of the penalty ultimately assessed by the Administrative Law Judge was for the failure to properly file the Notice of Intent. The ALJ found that Section 1318 of the Clean Water Act had record-keeping requirements supported by regulations that required the preconstruction submission of a completed permit application.

On appeal, the Court agreed that the Clean Water Act prohibits discharges without a permit.  It also agreed that it is logical that the regulations provide for permit applications to be submitted prior to any initial discharge. The Court focused on the fact that the regulations required that a person who proposes a new discharge must submit its application before the date on which the discharge is to commence. However, the statute’s requirements, by its terms, applies to a point source. In the words of the Court:

Failure to comply with [the requirement of submitting an application before discharge] cannot be a violation of section 1318(a) because that statute’s record-keeping requirements are expressly limited to “the owner or operator of any point source.” Before any discharge, there is no point source. (Emphasis added).

The Eighth Circuit was simply emphasizing that EPA does not regulate “point sources.” Rather, a point source is just a defined term which determines whether the regulatory scheme might apply to that source. If the source is not deemed to be a point source (such as agricultural runoff), then the regulatory scheme does not apply to it. If it is defined to be a point source (such as a construction site), then the regulations do apply, but only after there has been a discharge.  Since the statute gives jurisdiction only over actual water discharges, a developer cannot be penalized for failing to take out a permit, at least not until a discharge event, such as storm water runoff, has actually occurred.

To emphasis this point, the Court quoted an earlier Second Circuit case:
 

The Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges—not potential discharges, and certainly not point sources themselves. (Emphasis in original).

So does this mean the developer can avoid filing a Notice of Intent or obtaining a permit?  The Court, recognizing that EPA might be concerned that it lacks regulatory authority to assess administrative penalties for failing to submit a timely permit application, offered these words of consolation:

Prudent builders know that permits do not issue over night and that storm water discharges can happen any time after the start of construction makes the site a point source. They will apply and obtain permits before starting construction to avoid penalties for unlawful discharges that may prove to be severe. That is the regulatory regime Congress crafted.

In other words, developers take note -- counting on the Farmer's Almanac is probably not a sound business plan. 

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A key aspect of being effective is figuring out what needs your attention right now and what can wait until later. EPA seems to understand this.  Every three years, EPA creates a set of national enforcement priorities setting out the areas in which it will focus its inspections, compliance assistance and enforcement actions over the course of those three years. It provides for interesting reading.

For example, the priorities for the years 2008, 2009 and 2010 were:

• Air toxics

• New source review/prevention of significant deterioration

• Concentrated animal feeding operations

• Municipal combined sewer and sanitary sewer overflows

• Storm water
• 
Mineral processing
• 
Financial responsibility
• 
Indian country

The Agency is in the process of setting its priorities for 2011, 2012 and 2013. To identify the possible areas of consideration, EPA collected information from the various regions, states, tribes, associations and the public. Based on the information it received, EPA created the following list of candidates for the upcoming enforcement priorities:

• Air Toxics – EPA is proposing to continue to focus on leak detection and repair and the presence of hazardous air pollutants near schools;
• Concentrated Animal Feeding Operations (CAFOs) – this initiative would focus on the regulation of surface water runoff carrying animal waste into waterways. There is no discussion of air or odor issues;
• Environmental Justice – a review of burdens that pollution has disproportionately placed on vulnerable populations including children, communities of color, Native Americans and the poor;
• Indian Country Drinking Water – it has been determined that the level of noncompliance of public water systems in Indian country is significantly hirer than at comparable public water systems outside of Indian country. This initiative would attempt to identify the reasons why and find a method of correcting those deficiencies;
• Marine Debris – this would focus on debris that is improperly discharged into a water way. Enforcement of current regulations and cleanup activities would be key components of the initiative. It is viewed as a good fit to address along with municipal runoff issues;
• Mineral Processing – mineral processing and mining use strong chemicals and generate large volumes of waste for disposal. Over the past decade, significant damage has been done to the environment from these operations. This initiative would focus on inspections and sampling by EPA;
• Municipal Infrastructure – the storm water and sanitary sewer piping for many cities is outdated and frequently causes discharge events. This initiative would require significant modifications and repairs to many of the city systems;
• New Source Review/Prevention of Significant Deterioration – EPA has determined that many air pollutant sources have made operational changes that have resulted in increased air emissions, but failed to obtain proper permitting. The industrial sectors which will be reviewed are coal-fired electric utilities, cement manufacturing facilities, sulfuric and nitric acid manufacturing facilities, glass manufacturing facilities and lime manufacturing sites;
• RCRA Enforcement – increased emphasis on cleanups of contaminated facilities and creation of a nationally consistent approach to enforcement at all RCRA facilities;
• RCRA Financial Assurance – increased enforcement of determining that sufficient funds are set aside for response and closure of RCRA facilities;
• Resource Extraction – various forms of resource extraction, such as mountaintop mining and oil and gas development, have caused increased concerns about a rise in levels of air pollution and water quality degradation. This initiative would increase the focus on the regulation of these resource extraction activities under CAA, CWA and SDWA, with emphasis on federal lands and Indian Country;
• Pesticides at Day Care Facilities – a study done in 2001 of wipe samples from indoor services at day care centers identified at least one pesticide in every day care center studied. Some centers had up to ten different kinds of pesticides in use. This initiative would investigate the use and effect of pesticides at day care centers;
• Surface Impoundments – many industrial facilities use surface impoundments to treat or store non-hazardous liquid and solid waste which can contaminate surface water, groundwater and air. Additionally, hazardous waste storage in such impoundments without a RCRA permit is a violation of law. EPA estimates there are 18,000 surface impoundments operating and that inspection and oversight is a worthwhile initiative;
• Wetlands – recent studies show a pattern of wetland loss under the Clean Water Act which justifies an enforcement initiative;
• Worker Protection Standards for Agricultural Pesticides – studies show that farm worker families have a higher level of pesticide exposure than non-farm worker families. In light of the number of farm workers and pesticide applicators, an initiative of inspections for both product and use compliance is necessary.

Cynthia Giles, EPA’s Assistant Administrator for Enforcement and Compliance Assurance, spoke at the National Environmental Justice Advisory Council on January 29, 2010. At that time, Ms. Giles indicated that the fifteen new enforcement areas for consideration were likely too many and that, when finally published, there will likely be fewer than nine initiatives for the 2011 through 2013 period. She also indicated that air toxics emissions, large animal feeding operations and new source review violations will likely make the cut for the national enforcement priorities.

It is important for businesses and legal practitioners to carefully note the final list of initiatives. At least over the past three years, a great deal of the EPA’s enforcement activities have been conducted on the topics that they identified as initiatives and there is every reason to believe that this will continue in the future. To be forewarned . . . .

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A recent guest editorial in the Des Moines Register makes an interesting observation about water quality in agricultural states -- it stinks.

The authors state that Iowa has a double standard concerning sewage. That is, there are significant and costly regulations for point sources, such as municipal and industrial wastewater treatment facilities that discharge into rivers and streams, but virtually no regulation of non-point discharges, like the transporting and spreading of manure on farmland that then washes off into the waterways. According to the authors:

If state officials hope to stop the degradation of Iowa’s waters, it does not make sense to ignore the agricultural component, which accounts for at least 90 percent of our water pollution.

To be sure, it’s hard to argue against cleaner water. But is it fair to impose a new regulatory and financial burden on cities and urban industries, while continuing to allow industrial agriculture to spread untreated sewage into the land?

The authors conclude that the agricultural, non-point sources should be held to the same standard as point sources and suggest that agricultural discharges should be required to pass through a wastewater treatment facility, though the article fails to mention the staggering cost of that proposal.

It’s certainly an interesting point, and it is not unique to Iowa or the United States. The Clean Water Act has always given a free ride to non-point pollution sources. Though it may make no scientific sense to say that a 40-acre field that has agricultural runoff is somehow different from a 40-acre field that is being prepared for a subdivision, that has been the regulatory scheme for decades. And it has been true despite the fact that, as pointed out by the authors, the vast majority of water contamination can be attributed to non-point sources.

In the past, even the mention of imposing such costs on agriculture, a significant employer in many state economies, was political suicide -- and maybe it will continue to be. But as EPA and state environmental agencies begin to force more and more costly regulation on point sources (for example, storm water runoff from construction sites), those same sources are going to start pressing the question of why non-point sources, which are significantly larger polluters, are virtually exempt from expensive regulation. It may be that it’s going to become harder and harder to keep this cow sacred. At a minimum, it’s going to make for an interesting debate. 
 

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Let there be no question: EPA is very serious about adding significantly to the requirements imposed on developers, cities, homeowners and businesses relating to stormwater discharges from development and redevelopment sites.  Either that, or someone in the stormwater section forgot to take a break for the holidays.

EPA has decided that it will hold five "listening sessions" designed to elicit input as to whether it should "strengthen stormwater regulations and to establish a comprehensive program to reduce stormwater from new development and redevelopment."  Bear in mind that this is in addition to the proposal to send a 61-page questionnaires to 1000 developers seeking financial and project information. 

The press release for the listening sessions provided the following description:

EPA seeks input on the following preliminary regulatory considerations: expand the area subject to federal stormwater regulations; establish specific requirements to control stormwater discharges from new development and redevelopment; develop a single set of consistent stormwater requirements for all municipal separate storm sewer systems; require those sewer systems to address stormwater discharges in areas of existing development through retrofitting the sewer system or drainage area with improved stormwater control measures; and explore specific stormwater provisions to protect sensitive areas.

The sessions will be held:

·         January 19, 2010, 10 a.m. to 3 p.m. at EPA Region 5 Office, 77 W. Jackson Blvd., Chicago

·         January 20, 2010, 10 a.m. to 3 p.m. at EPA Region 9 Office, 75 Hawthorne Street, San Francisco, Calif.

·         January 25, 2010, 10 a.m. to 3 p.m. at EPA Region 8 Office, 1595 Wynkoop Street, Denver, Colo.

·         January 26, 2010, 10 a.m. to 3 p.m. at EPA Region 6 Office, 1445 Ross Avenue, Suite 1200 Dallas, Texas

·         January 28, 2010, 10 a.m. to 3 p.m. at EPA HQ Office, Ariel Rios Building, 1200 Pennsylvania Ave. NW, Washington, D.C.

The public can register by going to the Web site below.

EPA will accept written comments on the preliminary rulemaking considerations until February 26, 2010.

More information on listening sessions, the potential rule and instructions for submitting written comments: http://www.epa.gov/npdes/stormwater/rulemaking

Those who will be affected need to take this initiative very seriously.  According to the FederalRegister, EPA is relying heavily on a report of the National Resource Council entitled "Urban Stormwater Management in the United States."  This document is a light read of 529 pages and it advocates a fundamentally new system of stormwater regulation which would impose additional costs and substantially greater regulatory oversight, particularly for cities.  The new system discussed by NRC would apply not only to "building on previously undeveloped sites, but also to redeveloping and retrofitting existing development" (page 406).  Rather than apply to individual sites, the new permitting system would be "watershed based" (pages 346, 387 and 419).  That is, the entire watershed, wherever it is located, would be the permitted area, requiring heavy involvement by cities.  According to the report:

At the heart of the proposal for a new system of regulating discharges to the nation's waters is issuing permits to groups of municipalities in a watershed operating as co-permittees under a lead permittee.  Furthermore, the proposal envisions these municipal permittees assuming responsibility for and implementing the permits for all public and private dischargers in their jurisdiction. (Page 411).

This is your chance.  Written comments can be made or, if you're near one of the five cities, you can go and be heard (so long as you sign up by January 15th and you limit your comments to three minutes).  Speak now or forever hold your stormwater.

Related Posts: Stormwater Regulation of Developed Sites Coming?

                       New Stormwater Regulations Rain Down on Developers

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Recently, EPA promulgated new regulations for stormwater discharges from construction sites which, for the first time, will place a numeric limit of 280 NTU on discharges from those sites during construction. The regulations have drawn criticism but, since they will be phased in over four years, it is unlikely that any change will be made in the near future. Apparently not satisfied with addressing the runoff from construction sites, EPA has indicated that it will consider limitations for runoff which occurs at construction sites after completion of the development (otherwise known as post-construction runoff discharge). That is, EPA is considering requiring significant limits and the maintenance of controls on stormwater coming off of newly developed and redeveloped sites which will be regulated forever, not just during the period of construction.

To have a sound basis for these limits, EPA needs to collect information. It is proposing to do this by distributing a questionnaire to about 1000 developers. EPA plans to mail the 61-page questionnaire around April 2010 for response within 60 days. A response will be mandatory and failure to respond could result in civil or criminal enforcement.

The questionnaire is designed to collect financial, environmental and technical data about projects covering the period of 2005 to 2009. Some of the information to be collected includes:

1. The company’s balance sheet and income statements for 2005-2009;

2. For 10 completed projects, the Notice Of Intent permit number, number of acres, start and end dates of the projects, types of soils and capital costs for each project;

3. Land acquisition, development, financing and sales costs for each project.

A signed certification stating that the responder is aware that there are “significant penalties for submitting false information, including the possibility of fines and imprisonment” is found at the end of the form. EPA’s own estimate is that the information collection will cost just over $4,000,000 and will take the typical company 53 hours to complete the questionnaire.

I understand that EPA has broad power to obtain information.  Usually that power is used when a company is suspected of wrongdoing, but that isn’t what is happening here. EPA is trying to do a study to see if the required placement and maintenance of controls for stormwater being discharged from a development . . . forever . . . can be justified. You’ll need to determine for yourself whether the data being collected will aid in making that determination.

In any event, if you want to be heard on whether this is a good way for EPA to determine whether if, and to what degree, stormwater runoff controls and limits should be imposed after a project is completed, now is your chance. You have until December 29, 2009, to give EPA your 2¢ worth.  It may be the best 2¢ you ever spent.

Related Post: New Stormwater Regulations Rain Down on Developers

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

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Stormwater runoff from construction sites has been an area of environmental regulation that received only passing attention until sometime around 2004.  In that year, EPA inspected a large retail facility, found multiple violations and imposed heavy fines.  Since then, EPA has expended significant resources to ensure compliance with the regulations. 

In 2008, EPA determined  that the existing regulations were insufficient and proposed additional  regulations.  The proposed rules were put out for public comment and on November 23, 2009,  EPA handed down new, technology-based guidelines. For developers and home builders, it wasn’t good news. The new regulations, found at 40 C.F.R. Part 450, impose two new requirements:

1.    Construction site owners and operators that disturb one or more acres must use best management practices to ensure that soil disturbing during construction activities will not pollute nearby waters;

2.    Construction sites that disturb 20 acres or more at one time (later being reduced to 10 acres) must monitor discharges from the site and prevent discharges that exceed 280 nephelometric turbidity units (NTUs) from leaving the site.

The second requirement sets out, for the first time, a numeric standard on discharge from construction sites. EPA’s original proposal was to have a numeric limit of 13 NTUs, which is a very clean discharge. During the comment period, EPA was informed that a limit of 13 NTUs would increase the cost of construction by $15,000 to $45,000 per acre. The final standard of 280 NTUs, while more lenient, will add some significant costs to new construction.

A few items of note about the 280 NTU limit:

1.   If the rainfall is in excess of the 2-year, 24-hour storm event, then the limit does not apply.  In effect, such a large rainfall is treated as a bypass event;

2.    If less than 20 acres (or, later, 10 acres) is disturbed at one time, then the limit does not apply.  As soon as a developer goes over 20 acres of open area, the limit kicks in until there is a drop below 20 acres, in which case the limit no longer applies;

3.    In counting the 20 (or 10) acres, the develop must count all of the acres within the same common plan of development or sale even if the open acres are not contiguous;

4.    The developer can test the effluent multiple times over the course of the day, but the average of those test results must be less than 280 NTUs to avoid a violation;

5.   The BMP requirement applies at all times and is not tied to the 280 NTU limit.

Because the new requirements are a significant departure from the existing regulations, they will be phased in:

1.    Construction sites that disturb 20 acres or more at one time will need to monitor beginning 18 months after the effective date of the rule;
 

2.    Construction sites that disturb 10 acres or more at one time will need to monitor beginning four years after the effective date of the rule.

For states that have not been delegated NPDES authority and that use the federal storm water construction permits (Idaho, Massachusetts, New Hampshire, New Mexico and the District of Columbia), this means that the monitoring will begin August 1, 2011, and February 1, 2014. States that have been granted authority and periodically receive approval for the program will have a delay of the effective date. In the past, EPA has allowed the states to phase in new rules in accordance with their permit renewal dates. For example, Iowa’s storm water construction permit will be renewed on or about October 1, 2012. Therefore, Iowa’s compliance dates for the new requirements could be April 1, 2014, and October 1, 2016. We’ll have to wait to see if this interpretation is allowed for these new rules.

The changes imposed by the new rule couldn’t have come at a worse time, but, to some extent, EPA had no choice. The rule changes were in response to a court order that compelled EPA to makes changes by December 1, 2009. The question that remains is whether the new rules are sensible. That question is for another post.

RELATED POSTS: Stormwater Regulation of Developed Sites Coming?

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

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Many thanks to Michael Foti at Attorney.org for including this blog in the list of "Top Environmental and Land Use Law Blogs."  The primary focus of Attorney.org is to raise awareness and take stands on pressing issues in an effort to fight for change.  They have decided to focus some of their resources on the environment and land use and have spent what appears to be a considerable amount of time researching the available law blogs. 

If you like to see good writing on very current environmental issues, take a look at the list that Attorney.org has put together.  The posts by those authors will make you laugh and make you cry.  But most of all, they'll make you think.  And in this environmental age, there's a lot of thinking--and acting--that needs to be done.

I'm proud to be included in the list and I would encourage you to look at all of the others found there. They deserve your attention and support.

RELATED POST: Best Environmental Law Blogs

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On October 16, 2009, EPA drew a line in the sand regarding mountaintop mining. With regard to the Spruce No. 1 Service Mine Permit located in Logan County, West Virginia, EPA informed Arch Coal, Inc. that it was beginning the process that could result in the rescission of its Clean Water Act permit.  Although the mine had a validly-issued permit from the Corps of Engineers, EPA believes that it has broad authority to veto the Corps' issued permit if it finds that serious water quality damage may occur and that there are methods to avoid such damage.   In the words of William Early, the acting regional administrator for EPA in Region III:

We recognize the issued permit contains several provisions that may be intended to address water quality and mitigation based upon information and data available at the time [of the issuance of the Clean Water Act Section 404 permit]. However, in light of new data and information since permit issuance, EPA remains concerned with much of the analysis set forth in your letter, particularly as it relates to the potential for adverse water quality impacts, further avoidance and minimization measures, the potential for accumulative impacts, and identification and enforceability of success criteria for mitigation.

Mr. Early’s concern, as stated in the letter, is that the operation of the mine “may result in unacceptable adverse impacts to fish and wildlife resources.” He noted that the project allows for the construction of six valley fills for placement of excess spoil material generated through the surface coal mining activities and that there were only minimally acceptable methods to minimize impacts to aquatic resources. In EPA’s view, “there is the potential for [the mine’s] associated discharges to cause further stream degradation.” Early also noted that the existing permit fails to contain adequate measures to mitigate environmental damage and does not set out what procedure would be appropriate if water-quality impacts would happen to occur.

The action of EPA is notable in several respects:

• It is the first time that EPA has threatened to rescind a permit for a project that had been previously authorized.
• Since 1989, only one other project has received a Section 404(c) veto from EPA.
• Prior to 1989, a total of eleven projects have received a veto, none of which involved mining.

Additionally, it is interesting to note that EPA's review is purportedly based on "new data and information since permit issuance,"  a process that took almost ten years.  Some might wonder wherther it is new evidence or a new administration that is driving the review and, if it is the latter, what impact will it have on business to know that the fundamental rules of the game (such as revoking already issued permits) can be changed every four or eight years? 

Though environmentalists may look on the EPA action as an indicator that the EPA under Obama is going to be much more aggressive against mountaintop mining, perhaps this is not really the best test case for that proposition. This site was, after all, one of the very few sites that even the Bush-era EPA was reluctant to give a glowing review. In June of 2006, during the comment period for the permit for the Spruce Mine, the site received a ranking of “EC-2,” which equates to “Environmental Concerns and Insufficient Information.”  Further, in its statement, EPA "emphasizes that the Spruce No. 1 represents an unusual set of circumstances we do not expect to be repeated again."

While it is a significant first step, what action is taken by this EPA for the remaining seventy-eight mountaintop mining permits will be much more telling.

RELATED POST:  Switchback Regulation and Mountaintop Mining: The Wrong Path?
 

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Traveling up a mountain is never an easy proposition -- thin air, cold temperatures and those dizzying roads that whipsaw back and forth for miles.  While I recognize the need for switchback roads to convey the traffic, I have trouble using them as a model for environmental regulation, but it seems that that is where we are today; that is, changing environmental policy 180 degrees with each change of administration.  A case in point is Coeur Alaska, Inc. v. SEACC and EPA's recently announced initiative relating to mountaintop mining.

                                                 THE COEUR ALASKA CASE

The last time we saw  Coeur Alaska, the company had just won their case before the United States Supreme Court and could fill a lake with sludge from their mining operations. They were allowed to do so because a Bush-era EPA policy, as set forth in a director's memorandum, said that it was acceptable for the Corp of Engineers to issue the permit without applying the performance standards of the Clean Water Act to the fill material.  The Court deferred to EPA's interpretation because it was "not plainly erroneous or inconsistent with the regulation[s].”

Here we are, eighty-one days since the decision and all you can say is what a difference a few days make.

                                                MOUNTAINTOP MINING REVIEW
 

On September 11th, EPA declared that all seventy-nine pending permits for mountaintop removal mining would be sent back for additional review under the term of the Clean Water Act. EPA’s concern is that these operations would “likely cause water quality impacts.”

Lisa Jackson, the EPA Administrator, attempted to emphasis that this was an "enhanced coordination process" between EPA and the Army Corps of Engineers and that it was not a change in policy. With all due respect to Ms. Jackson, I think she misspoke. It isn’t a change in law, but it is certainly a change in policy. She said as much when she told the Tampa Bay Press: “The whole permitting process had become a bit toothless.” In a year’s time, this EPA will have every molar, bicuspid, canine and incisor back in place (the jury is still out on the wisdom teeth).

                                                             THE IMPACT

The problematic holding of the Coeur Alaska case isn’t only what Coeur Alaska won, but how it won it. The Supreme Court reaffirmed that EPA has great discretion in all things environmental. In that case, the holding worked to the advantage of the business.  However,  that ruling (and others) also gives EPA the ability to quickly reverse the environmental policies of the past eight years.  I agree that to the victor goes the spoils and that changes in many areas are appropriate.  My concern is that when there is another change in EPA (one of those few guarantees in life), the road will almost certainly take a hard turn, this time to the right.  And when the inevitable happens, it will turn back yet again.

In the end, maybe switchback regulation is as necessary as switchback roads.  But while both will get you where you want to go, they certainly expend a lot of energy, and costs, to get there.  So what's the alternative?  Maybe something more permanent, like a tunnel or legislation, is preferable.  Sure they both have up front costs, but at least you minimize the whipsaw effect (that is so hard on brakes and business planning).

RELATED POSTS:  The Supreme Court and the Environment: Who Did They Really Help?

                              COEUR ALASKA, INC. VS. SEACC: When Is A Lake Really a Landfill?

                              ENTERGY CORPORATION VS. RIVERKEEPER, INC.

                              Clean Water and Mountaintop Mining No Longer Mix

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With a new sheriff in town, environmental change is a foregone conclusion. The only questions are how and when will change be made. Rules that are created to give effect to environmental statutes are where we can find the real heart and soul of environmental protection. Every modern-day president that has taken office has realized that he has a lot more power to quickly cause policy changes via rulemaking than through the ponderous process of legislation. As I have said before, President Obama is no exception and is already in the process of making significant changes to the environmental rules.

The only problem with the use of this power is that it does have some minimal safeguards in place – and apparently they were exceeded.

In April, Secretary of the Interior Ken Salazar asked the U.S. District Court for the District of Columbia to remand and vacate the Stream Buffer Zone rule. This was an 11th-hour rule change made by President Bush which made it easier to discharge water taken from mountaintop removal into streams. Salazar decided that this was a bad public policy and, according to him, it did not pass the “smell test.”

In ruling on the question, the D.C. Circuit Court said that, as discerning as Mr. Salazar’s nose might be, there is a right way and a wrong way to remove the odor. And Mr. Salazar’s attempt was the wrong way. In the words of the Court:

Here, the federal defendants seek a remand and vacation of the SBZ Rule without a determination on the merits that the SBZ Rule is legally deficient.

The Court finds no precedent to support the proposition that it should reward and vacate the SBZ Rule under the circumstances presented here. Moreover, the National Mining Association has the better argument that granting the federal defendants’ motion would wrongfully permit the federal defendants to bypass established statutory procedures for repealing an agency rule. The Administrative Procedures Act requires government agencies to follow certain procedures, including providing for public notice and comment, before enacting or amending a rule. An agency must follow the same procedure in order to repeal the rule.                        

In other words: Sheriff, the law says you have to have a town meeting before you close the saloon, so have the town meeting before you close the saloon.

It seems unlikely that the requirement that there be notice and an opportunity to comment will change the outcome in any manner, other than to slow things down a bit. But telling the sheriff that the law also applies to him is probably a good reminder that there’s a difference between a sheriff and, say, a king.

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I have read, with interest, several posts that describe the most recently concluded United States Supreme Court term as being a miserable year   for environmental interests. The authors point out that of the five cases addressing the environment, all of them resulted in reversals of decisions that had favored environmentalists. Based on this scorecard, the posts are quick to label the majority of members of this Supreme Court as being hostile to the environment and pro-business. Glenn Sugameli, an attorney with the environmental group Earth Justice, went so far as to say that he believes that the Court put on “pro-business blinders.”
 

While the outcome of the cases certainly did not advance environmental interests, I find it difficult to refer to the outcomes as pro-business. In fact, in three of the cases, the Court deprived the business community of what it needs most.
 

Businesses necessarily rely upon predictability. They need to know, to the greatest extent possible, that the rules of the game are not going to constantly shift. They need to know that government will not make major changes in the regulatory scheme and that they can plan future  purchases, hiring, markets, expansion and the like on rules that are not subject to daily variation. This is critical in the area of environmental regulation where a change in the rules can shift millions of dollars in costs. Business owners understand that there will always be some changes, but they expect it to occur through a cumbersome and combative process (a/k/a Congress). In short, they hope for some level of stability. By this measure, the Supreme Court did not do business a favor during this term.
 

In my previous post relating to Entergy Corp. v. Riverkeeper, Inc., I noted that the end result was that the Court has now accorded broad deference to EPA to determine when and where the agency will employ the use of a cost-benefit analysis. In a similar vein, I noted that in the Coeur Alaska, Inc. v. SEACC case, the Court deferred to EPA’s interpretation as found in an unpublished memorandum authored by the Director of EPA’s Office of Wetlands, Oceans and Watersheds.  In both of these cases, the Supreme Court was making it clear that EPA can change the rules as it sees fit and without public comment.  In several articles written about the Coeur Alaska case, the comment was made that, although the environmentalists lost that case, there would be an easy fix by asking the present administration to take action (presumably without the need for public comment) to repeal the interpretation of the rule that allowed the Supreme Court to rule in favor of Coeur Alaska.  

In Winter v. NRDC, Inc., the Court ruled that the needs and prior practices of the Department of the Navy should receive deference. As in Entergy and Coeur Alaska, this case resulted in substantially strengthening the hand of the governmental entity.
 

Though it is an admittedly small sample, I believe that the best way to label this Court is pro-government when it comes to environmental questions. Given the complexities of environmental regulation, I can’t say that I’m surprised at the rulings which, in effect, simply defer to the expertise of the agency.  What does surprise me is that the Roberts Supreme Court believes that making federal agencies more powerful and less accountable is a good result.
 

Moreover, the impact on many types of businesses is likely going to be significant in light of the political climate. It is an understatement to say that the Obama  administration’s view of environmental regulation is significantly different  from the view held by the Bush administration. With this Court’s seal of approval, changes in EPA regulations, guidance documents and unpublished memos are going to come fast and furious. If anyone really believes that it is “pro-business” for the Supreme Court to tell EPA that it has discretion to change the rules whenever it desires and without notice or public comment, I would question their definition.
 

I believe I can safely guarantee that a change in the presidency, like death and taxes, is a certainty at some time in the future. When that happens, the rules will change yet again. And for business, the lack of certainty, or at least relative stability, is anything but “pro-business.”
 

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In its final environmental ruling for this term, the United States Supreme Court went up against the fishes.  The fishes lost.

In Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, the plaintiff mining company sought to pipe a slurry of 210,000 gallons of process wastewater and 1,440 tons of tailings each day to the bottom of Lower Slate Lake. The parties to the litigation agreed that the activities would fill the lake with solids and destroy all aquatic life. Upon conclusion of the mining operations, Coeur Alaska proposed to cap the tailings with four inches of native material and restore and expand the lake.

Since the lake was a water of the United States, Coeur Alaska needed a permit to discharge the slurry. The difficulty here was that the Clean Water Act provides for two distinct methods of getting a discharge permit. Under Section 404 of the Act, the Corp of Engineers can issue permits for discharge of “fill material," with EPA having the right to veto. Fill material is defined to be any material "that has the effect of . . . [c]hanging the bottom elevation of water."  For discharges of anything other than fill, Section 402 of the CWA requires EPA to issue permits pursuant to the effluent limitations of the Act. 

As one might imagine, EPA and the Corps occasionally disagree on who has jurisdiction, and such was the case with mining tailings.  In 2002, the Corps and EPA promulgated a regulation that defined fill material to include “tailing or similar mining-related materials.”  Still, the regulation failed to identify whether the fill material, that was subject to the Corps jurisdiction, needed to meet performance standards.

In a 2004 internal memorandum written by Diana Regas, the Director of EPA’s Office of Wetlands, Oceans and Watersheds during the Bush administration, Ms. Regas declared that EPA’s performance standards did not apply to discharges of fill material.

Based on this information, Coeur Alaska sought a discharge permit from the Corps of Engineers rather than EPA. The Corps determined that any environmental damage would be temporary and issued the permit. SEACC challenged the Corps decision and won at the 9th Circuit, but lost before the Supreme Court.

In a 6-3 decision, the High Court held that the terms of the CWA were ambiguous. The Court said:

Because Congress has not “directly spoken” to the “precise question” of whether an EPA performance standard applies to discharges of fill material, the statute alone does not resolve the case.

Since the statute did not provide the answer, the Court attempted to determine congressional intent.  However, they found another road block in that there was no such indicia.  Next, the Court looked to agency regulation, but found it to be ambiguous. Stepping down one more rung, the Court looked to the subsequent interpretation of the regulation by EPA and found Ms. Regas' internal EPA memo that the performance standards do not apply to fill material.  The Court declared that the memo did not satisfy the Court's previous ruling in Chevron v. NRDC on what can be accorded deference by a court, but went on to say: 

The Memorandum presents a reasonable interpretation of the regulatory regime. We defer to the interpretation because it is not “plainly erroneous or inconsistent with the regulation[s].”

With that, the Supreme Court reversed the 9th Circuit and allowed Lower Slate Lake (presumably to be renamed Much Higher Slate Lake in the near future) to be filled with the slurry.

It must be said that this Court searches very hard for guidance. On the central question of whether performance standards apply to discharges of fill material, they found that:

• The statute had not “directly spoken” to the “precise question;”
• There was no indicia of Congressional intent;
• Agency regulations were ambiguous; and
• One internal agency memo, that had not been subject to public comment and which did not meet the Court’s previous cases to merit deference, was sufficient to justify the discharge.

That is one heck of a memo. For all those low level staffers and department heads who think that no one reads anything that they put in their reports, Ms. Regas would beg to differ. Those memos can have some real clout.

I would note that the oral arguments, as well as references in the opinion, indicated that several members of the Court were consoled by the fact that EPA had veto power and it did not exercise it in this case. If EPA didn’t see the need to veto it, why should the Court?  I suppose there are any number of ways to answer that question. Suffice it to say that a majority of this Supreme Court, reviewing a Bush-era EPA decision, felt that the answer was that it shouldn’t.
 

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I just noticed an interesting new law that was passed in the District of Columbia.  As of July 1, coal tar pavement dressings and sealants cannot be used or sold.  It was also banned in Austin, though that ban has been criticized. The D.C. ban, which is part of the District's storm water regulation, is designed to prevent polycyclic aromatic hydrocarbons (PAHs) from being washed off of parking lots and entering streams, rivers and Chesapeake Bay.  It was determined that the dust coming from parking lots sealed with coal tar products have concentrations of PAHs that are 80 times higher than the dust from unsealed parking lots.  While there is an alternative to the coal tar product, it has its deficiencies. 

For the entrepreneurial type out there, this is a trend worth following.  It used to be that we would allow  the conscience of the consumer to choose the environmentally better product.  When that didn't work, because most consumers buy the cheapest and/or most effective product (which is not often the environmentally friendliest choice), at least two legislatures came up with an alternative -- ban the product. This same reasoning can be found in the banning of phosphorus containing fertilizer. 

I'm not trying to be critical here, I'm just trying to point out a trend.  I would say that perhaps the next product to be considered could be char-broiled hamburgers, but my guess is that the burger lobby is a little stronger than the coal tar pavement dressing lobby.  But that's just a guess.

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I’ve noticed that a number of cities around the country are considering passing ordinances that would ban plastic bags at grocery stores.

I thought we were done with this discussion. Okay, I’ll end it now. As between paper grocery bags and plastic ones, plastic is the better choice for the environment. There, that one’s done.

Next topic: What does the term “better” mean?

That’s the real question, isn’t it? Like so many things environmental, what is "better" depends a lot on what you count.

Rather than rehash all the literature, I’ll just give you the highlights and you can decide:

• In 1999, 14 million trees were cut down to produce the 10 billion paper grocery bags used by Americans in that year;
• Paper sacks generate 70% more air and 50 times more water pollutants than plastic bags;
• It takes 594 BTUs of energy to produce a plastic bag and 2,511 BTUs for a paper bag;
• It takes 91% less energy to recycle a pound of plastic than it takes to recycle of pound of paper;
• In today’s landfills, neither plastic nor paper will degrade;
• It takes 12 million barrels of oil to produce the 100 billion plastic bags used in the U.S. annually;
• The average American family accumulates 60 plastic bags in only four trips to the grocery store.

With regard to one of the primary reasons to ban plastic bags -- the killing of animals -- David Santillo, a Greenpeace marine biologist, told the Times of London:

It's very unlikely that many animals are killed by plastic bags.  The evidence shows just the opposite.  We are not going to solve the problem of waste by focusing on plastic bags. It doesn’t do the Government’s case any favours if you’ve got statements being made that aren’t supported by the scientific literature that’s out there. With larger mammals, it's fishing gear that's the big problem.  On a global basis, plastic bags aren't an issue.  It would be great if statements like these weren't made.

Given the energy costs (and the CO2 implications), I would say that the plastic bag wins. At a minimum, it’s a wash and wouldn’t justify a change in the law. 

But in the end, that’s not really the point. Some would say that everything we throw away causes some level of harm to the environment.  (My belief that all landfills are just future archaeological treasure troves hasn't really caught on).  That’s why there is so much discussion about the bag debate being a false choice. If you deem it desirable to reduce the amount of environmental damage, you don’t do it by choosing one bad thing over another. In this case, that would just increase the use of paper bags, which is "worse" for the environment.  You do it by eliminating the waste stream all together. You do it by finding a way to get rid of the disposable bag.

The cities that are talking about passing laws to ban plastic bags are missing the point by ignoring the science.  Moreover, they are missing a golden opportunity.  If there is the political will to outlaw plastic bags, certainly there is the will to devise a solution that actually gets rid of the waste stream.     Maybe the bag debate isn't the most pressing environmental issue of the day.  But (and this is important for politicians) it is a visible one.  It's time to get creative.  Just don't make the problem worse by banning plastic bags. 

 RELATED POSTS: The Grocery Bag Dilemma: Some Suggested Solutions

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U.S. EPA Region 1 (Iowa is in Region 7) has recently issued two rulings relating to stormwater discharge permitting that could have a huge impact on existing businesses. In these two instances, EPA has decided, for the first time, to regulate stormwater runoff from impervious cover (such as parking lots and large buildings) from existing developments, regardless of how long they have been in existence.

In the first instance, EPA analyzed the Charles River Watershed in Massachusetts and determined that the impairment of the river was being caused by existing impervious cover from sites having two acres or more of impervious cover. As a result, the Massachusetts Department of Environmental Protection will be issuing stormwater permits to existing, previously unregulated businesses.
 

In the second instance, EPA determined that the Long Creek Watershed in Portland, Maine had a similar problem. Therefore, the Maine DEP will be issuing stormwater permits to any business which meets a one acre impervious cover limitation.

The states are currently promulgating the final rules that will determine exactly what will be required by their respective permits. Presumably, the permits will mandate that those properties which affect the watershed and are above the threshold impervious area limit will be required to, in some manner, treat the runoff from those areas prior to discharge into the impaired water.

Given the number of impaired waters in Iowa and across the country, the implications of these decisions is staggering. Until these rulings, stormwater permitting had applied only to a limited number of industrial facilities, new construction sites and MS4 cities. Should this rule be applied in Iowa, it will mean that fairgrounds, race tracks,commercial sites and retail facilities, to name a few, could be required to find a way to capture and treat the stormwater runoff coming from their facility, even if they have been in existence for 10, 20 or 50 years.

One lesson here is don’t buy asphalt futures – dirt parking lots will be making a comeback!
 

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I mentioned earlier that an important finding in Entergy v. Riverkeeper  was that EPA can now decide when it will use cost-benefit analysis in environmental regulation (unless "categorically prohibited"), the standard to be applied to that analysis (strict or loose) and that it may change that standard without notice.  I thought that the ruling was significant in that it put the power to use (and to quickly change the standard for) cost-benefit analysis firmly in the hands of the EPA Administrator, with all the political nuances therein.  Fearing that mine might be a somewhat cynical take on the decision, I thought it might be a good idea to seek a second opinion -- what did the losers think of the ruling?

The New York Times reported that Alex Matthiessen, the president of Riverkeeper, said:

We are disappointed, of course, that the court did not affirm the lower court's judgment in it its entirety, but nonetheless pleased that the court agreed that EPA is not required to use cost-benefit analysis and left it up to EPA on remand to decide to what extent, if any, cost-benefit analysis should be used in regulating cooling water intake structures.  We are looking forward to working with EPA's new administrator, whom we are confident will agree that the Bush EPA regulations failed to satisfy the Clean Water Act's mandate that the adverse environmental impacts of cooling water intake structures be minimized.

Since EPA has not commented on the ruling, one might wonder why Mr. Matthiessen is so "confident."  It is likely that it has something to do with the fact that Lisa Jackson has a new job.  Ms. Jackson, formerly head of the New Jersey's Department of Environmental Protection, is now the Administrator of EPA.  New Jersey was one of six states that joined in the Entergy case -- in support of Riverkeeper.

Ms. Jackson has excellent credentials and I have no doubt that she will be a great administrator of an Agency that is going to be very busy for four or more years.  It must be helpful for her to know that on something as fundamental as the use of cost-benefit analysis, it's pretty much up to her as to when, and to what degree, it will be applied.                               

Sometimes it's funny how things work out.                            

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 Chalk this one up to old dogs and new tricks.

In a previous post, I discussed the politics of environmental law and the fact that, as a general matter, the Republican philosophy of environmental law is to consider costs versus benefits while the Democratic approach places considerably more emphasis on protecting the environment and much less on the cost of doing so. In many ways, this is at the heart of the differences between the parties when it comes to environmental regulation.

Since 1995, however, this difference hasn’t been very heavily debated because Republicans controlled Congress and, for the last eight years, the White House. During that time, EPA’s use of cost-benefit analysis has been fairly consistent. Not surprisingly, with a new sheriff in town (Democratic President and Democratic Congress), it has quickly become apparent that there will be significant changes in all aspects of environmental regulation. But given EPA’s historical use of cost-benefit analysis, how can it go about changing its tune? Let me ask it another way: If the President and this Congress want to make a change in environmental enforcement so that cost-benefit analysis plays a significantly reduced role, will it be like turning a barge or a speedboat? In light of the Entergy Corp. case, my guess is the latter.

In Entergy Corp. v. Riverkeeper, Inc., the United States Supreme Court addressed the issue of cost-benefit analysis in environmental regulation. Those who work in the area of the Clean Water Act are well aware of the five statutory standards found throughout the Act which are applicable to various situations. Those five standards are: 1) BTA (Best Technology Available); 2) BPT (Best Practicable Technology); 3) BATEA (Best Available Technology Economically Achievable); 4) BADT (Best Available Demonstrated Technology); 5) BCT (Best Control Technology). (I’ve always been consoled by the fact that each and every one of these standards is the “best”). If you did not have all of these committed to memory, don’t be embarrassed. The Court actually found it necessary to add an appendix to its opinion which set out the definition of the terms.

In the case, the Court was confronted with the question of whether the use of the BTA standard should include a balancing of costs against benefits. After conducting an analysis of the statutory language, the Court finally found that the choice is up to EPA. The Court could not identify any prohibition against EPA including a cost-benefit analysis in setting health and safety standards under BTA if it chose to do so. In the words of the Court:

 [I]t was well within the bounds of reasonable interpretation for the EPA  to  conclude that cost-benefit analysis is not categorically forbidden.

The Court then went on to look at what the EPA’s BTA standard actually was and determined that, historically, EPA had employed the standard that technology would not be required if the cost was “wholly disproportionate to the environmental benefit to be gained.” However, the standard employed in the case at bar was that the changes would not be required if the costs of compliance were “significantly greater than” the benefits of complying with the applicable performance standards. In discussing the change in terminology by EPA between these two standards, the Court said:

While the EPA’s prior “wholly disproportionate” standard may be somewhat different from its current “significantly greater than” standard, there is nothing in the statute that would indicate that the former is a permissible interpretation while the latter is not.

Maybe it’s been a slow month, but I find these statements very interesting. First, the Court found that use of the cost-benefit analysis is permitted because it isn’t “categorically forbidden.” Then the Court recognized that EPA has changed its standard, but approved the use of either one.

The partial concurrence and dissent by Justice Breyer took the Court to task. He agreed that the EPA could include a cost-benefit component but he felt that if EPA was employing a new and different test, it was incumbent on EPA to adequately explain why it had changed its standard. Since it had not done so, Justice Breyer would have ordered a remand to EPA so that EPA could either apply the traditional “wholly disproportionate” standard or provide an adequately reasoned explanation for the change.

It seems to me that Justice Breyer has a point. If EPA is going to change its standards (which could be change that would be either looser or tighter) from what it has been using for the past 5 or 10 years, maybe it should be required to explain itself. Maybe applying a particular standard on a business is tough enough without the possibility of that standard changing each time there is a change in the administration and/or the head of EPA. Maybe there is something to be said for consistent application of the environmental laws so that business can at least plan and prepare. Naaah...said the United States Supreme Court.

In my mind, the significant holding of the Entergy Corporation case is that on something as fundamental as the use and proper application of cost-benefit analysis, EPA has discretion to employ that analysis (unless categorically prohibited) and EPA (read that to be each new EPA administrator) can modify that standard with impunity and without notice. While the decision certainly allows an agency, in this case EPA, to quickly adjust to new political realities, it wreaks havoc with business planning.

I started this post by referencing the old-dog-new-tricks maxim. However, I would like it understood that I am certainly not calling EPA an old dog. All I'm trying to say is that EPA’s ability to change its standards without notice does seem to be a new trick . . . and that it’s a shame that the majority of the Court didn’t require EPA to notice up and justify the change before it bit someone with it.

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