EPA/Corps Adopt “Waters of the U.S.” Rule: What’s Next?

Posted on May 28, 2015 by Rick Glick

Today EPA and the Army Corps of Engineers released a prepublication version of the final rule defining “waters of the United States,” the jurisdictional trigger under the Clean Water Act.  The term needs defining because the Act extends to navigable waters and adjacent wetlands, but it is often not clear how some streams or wetlands relate to a navigable waterway, and the Supreme Court has provided conflicting guidance. 

So, the agencies have attempted to clarify.  With the new definition they hope to reduce the number of case-by-case jurisdictional determinations and litigation, but they understand full well the controversial nature of the rule, having received over a million comments on the draft published on April 21, 2014.  In response, EPA and the Corps today also released a battery of public relations offerings —press release, fact sheets, blogs, op-ed pieces—to explain and defend the rule.  The controversy will not end here.

As previously reported in this space, the impetus for the rule is uncertainty created by a 2006 Supreme Court decision in Rapanos.  In that case, a 5-4 split Court held that the government had overstepped its authority, but failed to issue a majority opinion.  Instead, four justices, led by Justice Scalia, proposed a rule in essence requiring that the subject waters or wetlands be free flowing and obviously wet.  The concurring opinion by Justice Kennedy would instead look for a “signficant nexus” between a wetland and a navigable waterway.  The lower courts have struggled ever since to discern a clear jurisdictional definition.

At first glance, the final rule does not veer much from the draft.  For a comprehensive analysis of the draft rule, including the cases leading up to the rule, see the American College of Environmental Lawyers report for the Environmental Council of the States.  Although EPA and the Corps have declared that the rule does not represent a major policy shift, a diverse ACOEL writing team—made up of experts in academia, non-profit organizations, and private practice—had differing opinions.  Some saw a sea change in federal policy, while others believed the draft rule was simply a restatement of existing policy. 

Congress has been fulminating about government overreach since the draft rule was published.  On May 12, 2015 the House passed HR 1732, the Regulatory Integrity Protection Act, in an effort to block the final rule.  If the Senate passes the bill, Congress will need to muster the votes to override a certain presidential veto.

Although the purpose of the final rule is to provide some certainty as to the scope of Clean Water Act jurisdiction, it is highly likely to be challenged by industry groups in the courts.  That means years of litigation and appellate review across the country, ultimately landing once again before the Supreme Court.  Whether we get clarity this time from the Court remains to be seen.

EPA Is Not an Expert in Determining Electric System Reliability

Posted on May 7, 2015 by Seth Jaffe

The D.C. Circuit Court of Appeals just reversed and remanded EPA’s rule allowing backup generators to operate for up to 100 hours per year as necessary for demand response. It’s an important decision that could have lessons for EPA and the regulated community across a wide range of circumstances, including eventual challenges to EPA’s proposed GHG rule.

demand response

EPA said that the rule was necessary to allow demand response programs to succeed while maintaining grid reliability.  Commenters had argued that, by encouraging greater use of uncontrolled backup generators, EPA’s rule makes other generators less economic, thus creating a negative feedback loop, with less and less power generated by controlled units, resulting in greater and greater need for uncontrolled backup generators. Here’s what the Court concluded:

  1. EPA failed adequately to respond to the commenters’ arguments. Noting that “an agency must respond sufficiently to “enable [the court] to see what major issues of policy were ventilated,” the Court instead found that EPA “refused to engage with the commenters’ dynamic markets argument."
  2. To the extent EPA did respond, it was “self-contradictory”, arguing that it was not justifying the regulation on reliability grounds, even though the final rule said that it was based on reliability concerns.
  3. The 100-hour rule was based on faulty evidence. EPA relied on evidence that backup sources had to be available at least 60 hours to participate in a PJM “Emergency Load Response Program.”  However, PJM itself noted that this minimum does not apply to individual engines.
  4. Finally, and perhaps most importantly, while EPA justified the rule on reliability grounds, the Court stated that:

grid reliability is not a subject of the Clean Air Act and is not the province of EPA.

This last issue is the part of the opinion that could have some bearing on judicial review of EPA’s GHG rule.  The Court noted that there was no evidence that FERC or NERC had participated in the backup generator rule or provided comments to EPA.  When, during the course of the rulemaking, a commenter suggested that EPA work with FERC, this was EPA’s response:

the rulemaking’s purpose was to address emissions from the emergency engines “and to minimize such pollutants within the Agency’s authority under the CAA. It is not within the scope of this rulemaking to determine which resources are used for grid reliability, nor is it the responsibility of the EPA to decide which type of power is used to address emergency situations.”

This statement did not make the Court happy:

EPA cannot have it both ways it [sic] cannot simultaneously rely on reliability concerns and then brush off comments about those concerns as beyond its purview. EPA’s response to comments suggests that its 100-hour rule, to the extent that it impacts system reliability, is not “the product of agency expertise.”

And why is this relevant for the GHG rule?

First, because EPA had better consult with FERC and NERC, so that it can defend any statements it makes in the GHG rule about its impact, if any, on reliability.  Second, it’s clear that the court will not show deference to EPA’s conclusions about reliability, since that is not within the scope of EPA’s expertise.

Where Have all the Buffers Gone?

Posted on May 6, 2015 by Kenneth Warren

When selecting best management practices (BMPs) to protect streams during and following construction, riparian buffers are often considered the most effective option.  These permanently vegetated areas alongside waterbodies can capture, infiltrate and control stormwater flow, filter contaminants, stabilize stream banks and otherwise help protect and restore waterbodies and the ecological functions they support.  Recognizing the particular importance of riparian buffers located adjacent to exceptional value and high quality waters designated for special protection, the Pennsylvania Department of Environmental Protection (PADEP), like many other state environmental regulatory agencies, adopted regulations prohibiting earth disturbance activity within 150 feet of a special protection waterbody.  The regulations further required a property developer to protect or establish a riparian forest buffer under certain circumstances where waters in the project’s watershed fail to attain their designated uses.  

And then along came the Pennsylvania legislature.  Faced with objections from homebuilders and other developers to restrictions on use of their properties, the legislature enacted Act 162 of 2014 to provide developers with additional options.  Under Act 162, a developer who requires an NPDES stormwater construction permit may disturb land within 150 feet of a special protection waterbody if it implements BMPs “substantially equivalent” to a riparian buffer or a riparian forest buffer.  If the earth disturbance would occur in a special protection watershed within 100 feet of a surface water, the developer must also offset any reduction of the total square footage of the buffer zone that would have been utilized as a BMP with a replacement buffer.  The replacement buffer must be created in the same drainage area as the disturbed buffer and be as close as feasible to the area of disturbance at a ratio of one-to-one.  

In response to the passage of Act 162, PADEP recently published interim final guidances on equivalency demonstration and offsetting.  The equivalency demonstration guidance requires each developer disturbing earth within 150 feet of a special protection water to implement BMPs that reduce loadings of pollutants including total suspended solids, total phosphorous and nitrate.  In addition, the developer must show that its BMPs are functionally equivalent to a riparian buffer or forested buffer by providing, among others, habit for wildlife and vegetation, flood attenuation, channel stability and support of aquatic food webs.  Under the buffer offsetting guidance, a replacement buffer should be composed of native, diverse tree and shrub vegetation and preferably be installed at a location that receives runoff with characteristics similar to or more degraded than the runoff that the replaced buffer would have encountered.  

While many regulatory regimes afford environmental agencies discretion to grant waivers and exceptions to buffer protection requirements, Pennsylvania has by statute granted developers the option of using substantially equivalent BMPs, supplemented where necessary by offsetting.  PADEP has drafted guidances with stringent criteria for demonstrating equivalency and offsetting, but the guidances have yet to be finalized let alone judicially reviewed.  Experience in administering Act 162 will reveal whether, under PADEP’s watchful eye, equivalency and offsetting can uniformly serve as effective substitutes for a prohibition on development near special protection waters.  In the meanwhile, some healthy skepticism is in order.  

OKLAHOMA SURPASSES CALIFORNIA IN EARTHQUAKES

Posted on May 1, 2015 by Mark Walker

Oklahoma has quietly earned the dubious distinction of earthquake capital of the Lower 48, having surpassed California last year.  In 2014, Oklahoma had 585 earthquakes of magnitude 3.0 or higher compared to California’s 180.  The cause of this dramatic rise in seismic activity, and whether it is induced by human activity, particularly by oil and gas operations, has been the subject of much discussion and scientific study.

When I last blogged about this subject (June 2014) the U.S. Geological Survey (USGS) and the Oklahoma Geological Survey (OGS) had just issued a joint warning of the increased risk of a M5.5 or greater earthquake in central Oklahoma, stating that the science suggests that a “likely contributing factor” to the increase in earthquakes is injection of oilfield wastewater into deep geologic formations.  Despite several sensational articles implying that industry has exercised undue influence over the OGS and its scientific conclusions, on April 21, 2015, the OGS issued a statement in which it reiterated the view that “the primary suspected source of triggered seismicity is…from the injection/disposal of water associated with oil and gas production…the OGS considers it very likely that the majority of recent earthquakes…are triggered by the injection of produced water in disposal wells . . . .”

On April 23, 2015, the USGS released a new report which again noted the connection between earthquakes and certain deep disposal wells, but concluded that, “induced seismicity does not occur near every disposal well, so it is important that we continue to study and learn more about how these earthquakes are generated…These changes may be related to oil and gas exploration activity but they also may depend on physical processes, which are poorly understood…many questions remain”.

As the science develops, the Oklahoma Corporation Commission (OCC), which regulates oil and gas wastewater disposal wells in Oklahoma under the SDWA Underground Injection Control program, has taken an aggressive approach.  The OCC has identified “areas of interest”, which are areas within 10 kilometers of any earthquake swarm.  Eight areas of interest encompassing approximately 112 square miles have been identified.  On March 12, 2015, the OCC sent letters to operators who dispose of oilfield wastewater into the deep Arbuckle formation within these areas of interest directing that they provide information from which it can be determined whether such disposal is in communication with the underlying crystalline basement rock.  If it is, the OCC is requiring that disposal into the Arbuckle be discontinued.  Failure to produce the information results in immediate curtailment of disposal by 50%.

With the downturn in crude oil prices, most companies have dramatically cut back on drilling and completing new wells.  This downturn itself may provide a scientific opportunity to see if reduced oilfield activity produces fewer earthquakes in Oklahoma.