Ashes to Ashes; Waters to Waters – The Death of EPA’s Water Transfer Rule?

Posted on April 8, 2014 by Robert M Olian

On March 28, 2014, a federal district court vacated EPA’s “Water Transfer Rule,” which had sought to clarify EPA’s position that transfers of water between navigable bodies of water do not require NPDES permits. See Catskill Mountains Chapter of Trout Unlimited, Inc. v. United States Environmental Protection Agency (SDNY, 3/28/2014). The Water Transfer Rule, codified at 40 CFR  § 122.3(i), was the presumptive culmination of a long and meandering trail of EPA regulatory interpretation, guidance memoranda and judicial opinions, including a trip to the United States Supreme Court in the case of South Florida Water Management District v. Miccosukee Tribe of Indians, 541 U.S. 95 (2004).

The Catskill ruling is notable in several respects. First, it came from a district court. After the Supreme Court ruled, in Decker v. Northwest Environmental Defense Center, that district courts, rather than appellate courts, have jurisdiction in certain situations to review such regulations -- even if the suits are brought years after the rules were promulgated, the Eleventh Circuit held in Friends of the Everglades v. EPA that it lacked original jurisdiction over a challenge to the water transfer rulemaking, a ruling that the Supreme Court declined to review.

Second, the district court did not stay its ruling pending appeal, though appeal is a virtual certainty. Thus, the permit status of various water transferors who relied on the rule (irrigation districts, dam operators, water utilities, etc.) is now in limbo until a higher court reviews the Catskill decision or EPA promulgates a temporary fix. Any such fix, by the way, may be hard to come by in light of the district court’s expressed views about EPA’s misinterpretation of Congressional intent.

Third, the opinion contains language about the definition of “navigable waters” that does not quite align with EPA’s and the Corps’ imminent release of a Notice of Proposed Rulemaking addressing that very definition.

At this time, then, the only certainty is that litigation over the Water Transfer Rule will continue to flow. 

The National Environmental Policy Act: What Constitutes Segmentation and a “Direct” Environmental Impact?

Posted on February 14, 2014 by Thomas Hnasko

On February 11, 2013, the United States District Court for the District of New Mexico denied a Motion for Preliminary Injunction filed by the Village of Logan, seeking to compel the Bureau of Reclamation (“BOR”) to perform an environmental impact statement (“EIS”) for the Ute Lake Diversion Project in eastern New Mexico. The BOR issued an environmental assessment (“EA”), which failed to analyze the foreseeable impacts to Ute Lake based on the design capacity of the intake structure to withdraw 24,000 acre-feet per year (“af/yr”). The BOR contended that, while contracts had been issued to deliver the full 24,000 af/yr of water, the project which it funded was limited to withdrawals from the lake of only 16,450 af/yr. Significantly, the environmental and socioeconomic impacts of 16,450 af/yr paled in comparison to the projected impacts resulting from withdrawals of 24,000 af/yr.

The briefs in the Tenth Circuit present an issue of first impression under NEPA. That is, can the BOR defer an analysis of certain impacts it knows will occur in the future, and summarily discuss those deleterious impacts under the rubric of “cumulative” rather than “direct” effects? According to the Department of Justice, Logan’s complaint about the matter is only one of “nomenclature,” and it should not matter whether the effects are deemed “direct” or “cumulative.” In response, Logan argues that the difference is one of substance, as an analysis of “cumulative” effects of a project does not require a comparison of the project to reasonably available alternatives, whereas an analysis of foreseeable “direct” effects, i.e., withdrawals up to the capacity of the intake structure, would require a vigorous comparison to available alternatives. These alternatives, which received only a one-half page discussion in the EA’s section on cumulative effects, include retirement of wasteful irrigation groundwater rights to augment municipal water supplies in eastern New Mexico. According to Logan, allowing the BOR to analyze a plainly foreseeable “direct” effect as merely “cumulative” would result in the illegal segmentation of the project. If such a result were sanctioned, there would be no NEPA analysis ever undertaken of the effects between 16,450 af/yr and 24,000 af/yr.

Oral argument is scheduled for March 17, 2014.

Square Pegs in Round Holes

Posted on February 7, 2014 by Richard Glick

The Western states face two reciprocating and overarching problems in water resources policy.  First, water is an increasingly scarce resource facing sharply competitive needs. Climate change is projected to put even more strain on water supplies. Second, most streams listed as water-quality impaired in the West are designated as such for issues related to the biological integrity of the waterway. The combination of aggressive human use of waters, manipulation of stream channels, and failure to control agricultural runoff has resulted in widespread degradation of aquatic habitat.

The primary impediment to addressing these related issues arises from dated legal constructs designed to achieve different objectives in eras with markedly different economies. In other words, trying to apply these constructs to today’s problems is like attempting to fit square pegs into round holes.

The doctrine of prior appropriation governs water rights everywhere in the West.  It was developed in the 19th century to promote mining and agriculture—both water intensive enterprises—in arid climates. The doctrine provides that the first to physically take control of the water and put it to beneficial use has priority over later comers. Thus, the oldest water rights with the highest priorities are mostly agricultural, and many streams have become over-appropriated during the past century. So where does a growing community go for new water supplies? And what about maintaining sufficient high-quality flows instream for healthy fisheries?

The problem is made more acute by the formidable costs and regulatory uncertainty of developing major water storage projects. Many cities seek to acquire or share in old agricultural water rights through direct payments to water right holders or they finance irrigation system improvements for more efficient use of water. Such water marketing approaches free up water for municipal use, while reducing pressure to remove still more water from oversubscribed streams. But if a legislature could have anticipated then what we know now, might it a century ago have considered systems that allocate water based more on maximum public value and efficient use, rather than simply priority in time?

The Clean Water Act was enacted over 40 years ago to address toxic discharges of industrial and sewage wastewater to rivers and lakes.  Dramatic events like the spontaneous ignition of the Cuyahoga River drove public demand for government intervention, leading to the new law. The Act has done a remarkable job of cleaning up end-of-pipe discharges (point sources), but has largely failed at controlling more diffuse sources of pollution (nonpoint sources) from stream channelization, devegetation of riparian habitat and agricultural runoff. Thus, many streams today are impaired by turbidity, nutrient loading, and higher temperatures.

Since the Act does not provide enforcement tools for nonpoint sources, regulatory agencies use the authority available to them to ratchet up controls on point sources. One solution to this problem is water-quality trading, in which a point source permittee can take watershed-restorative action upstream to correct a nonpoint pollution problem in order to meet escalating permit requirements. This approach can yield better ecological outcomes at lower cost. But if Congress were drafting the Clean Water Act today, any rational approach would address the problem of diffuse sources of pollution.

It seems unrealistic to expect substantive changes to either the law of prior appropriation or the Clean Water Act any time soon. Aside from the politics, changes to prior appropriation raise significant constitutional questions to the extent property rights are affected. In the meantime, we’ll have to continue looking for creative workarounds. This circumstance makes interesting work for lawyers, but is hardly the optimal approach to effective water resource use and protection.

Storm Water Management by a Regional Sewer District: Was It a Power Grab or a Logical Extension of Existing Powers?

Posted on February 5, 2014 by Michael Hardy

In the mid 1970’s, the City of Cleveland and some fifty plus surrounding communities created a sewer district now known as the Northeast Ohio Regional Sewer District (“NEORSD”) to handle sanitary and industrial discharges into Lake Erie, and several rivers, including the Cuyahoga.  Over time, however, the Cleveland area experienced considerable urban sprawl,  creating vast expanses of impervious surfaces in the form of parking lots and large clusters of office, shopping, Big Box, commercial and industrial facilities.  With the conversion of green space to impervious roofs and parking facilities, some of the communities began to experience more flooding and erosion problems.   Indeed, the Cleveland Metroparks, known as the “Emerald Necklace”  because of the park lands situated in the flood plains of the Cuyahoga, Chagrin, and Rocky Rivers, was particularly hard hit from the storm water runoff originating in the nearby suburbs.

To address storm water and erosion problems that were “regional” in scale, the NEORSD developed a program in 2010 that included the payment of fees by all property owners based on the amount of impervious surface areas, like driveways, parking areas, and roof tops.  The NEORSD expected to use these funds on projects that would alleviate flooding and stream erosion.  But there was no unanimity among the member communities of the NEORSD about the need for, or the type of program that the district wished to implement.  Approximately ten of those communities objected, in large part because their geographical  elevations were such that they likely would never benefit from the preventive measures.   Moreover, many of those communities already had their own expensive, capital intensive storm water systems.  Furthermore, a significant number of commercial property owners objected because of the hefty fees that they would pay based on the parking lots and roof structures they maintained.

To validate the regional program, the NEORSD filed a declaratory judgment action in the Court of Common Pleas in Cuyahoga County, where it prevailed.  But the dissenting communities and commercial property owners appealed, and secured a two to one appellate reversal in 2013.  The appeals court concluded that the sewer district did not have the authority to address storm water unless it was also contaminated with sewage.  The court of appeals did not reach the merits of the claim that the storm water fees were illegal taxes. (The NEORSD had billed approximately $35,000,000 in fees  by the time of the appeals court decision.)

The NEORSD has appealed the decision to the Ohio Supreme Court, with significant amicus support.  The dissenting communities and the commercial property owners have urged the Ohio Supreme Court to decline to hear the case, and claim that the legislative process in the General Assembly is the proper place to balance the political considerations that might be involved in a fee supported regional storm water management plan.  They claim that the current plan is nothing more than power grab and illegal tax by an unelected and unaccountable body.  The NEORSD, on the other hand, argues that the storm water problems know no political boundaries, and thus its regional, holistic approach is far superior to the piecemeal, community by community approach that previously existed.

As of this note, the Ohio Supreme Court has not decided whether it will take the case.  The underlying court of appeals decision can be accessed here.

A SWING AND A MISS -- The First Reported Challenge to Water Quality Trading is Dismissed for Lack of Standing

Posted on January 24, 2014 by Allan Gates

EPA has touted water quality trading for more than a decade as a viable tool for combating water pollution, particularly pollution due to excess nutrients and sediment.  But the Clean Water Act contains no express authority for water quality trading or offsets, and some environmental groups view trading as a “license to pollute” that violates the Clean Water Act’s promise to eliminate the discharge of pollutants into waters of the United States.

Last month a federal district court issued a final ruling in the first reported challenge to the legality of water quality trading.  The court dismissed the action without reaching the legality of water quality trading.   Instead, the court held that the plaintiff environmental groups (Food and Water Watch and Friends of the Earth) lacked standing and that EPA’s  “authorization” of trading in the Chesapeake Bay TMDL was not a final agency action.  Food and Water Watch v. EPA, No. 1:12-cv-01639 (D.D.C. decided December 13, 2013).

Although the court’s decision did not address the substantive legality of water quality trading, the case still presents four interesting aspects that may prove instructive on what to expect in future challenges.

First, environmental groups split over the question of joining the challenge to water quality trading.  It is widely rumored that Food and Water Watch actively solicited support from environmental groups involved in Chesapeake Bay issue but met with stiff resistance. It appears that the other environmental groups’ support for the Chesapeake Bay TMDL overrode any interest they might otherwise have had in supporting a challenge to the legality of water quality trading.

Second, the defense of water quality trading made for strange bedfellows.  Three parties intervened as defendants.  One was a group representing municipal point source dischargers who support the Chesapeake Bay TMDL (National Association of Clean Water Agencies).  Two were non point source groups who are actively challenging the legality of the Chesapeake Bay TMDL in another case (American Farm Bureau and National Association of Home Builders).  The non-point source representatives argued that the trading component of the Bay TMDL would be important and valuable to their members if their challenge to the validity of the Bay TMDL in the other case was unsuccessful.

Third, the court’s decision on standing, ripeness, and the question of final agency action suggests it may be difficult to litigate the basic legality of water quality trading until a program is fully established and permits allowing credit for trades are issued.  EPA argued successfully that no actual or imminent injury to the plaintiffs was caused by the Chesapeake Bay TMDL’s express reference to trading as a means for meeting the waste load allocations.  According to this argument, the TMDL did not compel any trades; it simply acknowledged that states in the Chesapeake Bay watershed might use trading as a tool in developing permits that implement the TMDL.  Carrying this argument to its logical conclusion, one could envision the possibility that there would be no basis for private party standing to challenge the legality of a trading program until after a stream has been listed as impaired, a TMDL has been performed, a trading program has been established, and permits have been issued allowing credits for trades within the program.  Litigating the legality of water quality trading at such a late stage would presumably face a significant task in unwinding the momentum of such a fully developed administrative structure.

Fourth, given the success of EPA’s standing and ripeness arguments, it seems unlikely that there will be any definitive judicial ruling on the legality of water quality trading any time soon.  The partisan division in Congress makes clarifying legislative action even less likely.  As a consequence, EPA’s success in defending against the Food and Water Watch lawsuit may have the ironic result of postponing the day when states and permit holders will have a clear and definitive answer regarding the basic legality of water quality trading.

A Card Laid Is A Card Played: EPA Is Subject To Sackett Review Even After Withdrawing An Enforcement Order

Posted on December 19, 2013 by Theodore Garrett

In Sackett v. EPA, the Supreme Court held that pre-enforcement review is available to challenge an order concluding that parties had violated the Clean Water Act by filling a wetland without a permit.  Practitioners have wondered whether, in response to Sackett, EPA would take steps to avoid review, such as by issuing warning letters instead of orders.  In a recent case, EPA employed another tactic.  EPA withdrew an enforcement order, hoping thereby to avoid judicial review under Sackett by claiming that the case was now moot.  Not so fast, a court in West Virginia concluded, EPA’s position is still reviewable.    Alt v. EPA, 2013 WL 5744778 (N.D. W.Va. No. 2:12–CV–42, Oct. 23, 2013), available here

In the Alt case, EPA issued an enforcement order against Lois Alt, the owner of a poultry farm, on the grounds that Alt failed to obtain a Clean Water permit for storm water discharges that allegedly contained manure.  Alt filed suit in U.S. District Court in West Virginia challenging the EPA order based on the Supreme Court’s Sackett decision.  The American Farm Bureau intervened because of concern over EPA’s position on agricultural storm water.  

Subsequently, EPA withdrew the order against Alt, nominally because Alt had taken steps to remedy environmental harm -- or did EPA foresee an unhappy ending in court?  In any event, EPA filed a motion to dismiss the lawsuit as moot.  Alt opposed EPA’s motion to dismiss, arguing that EPA would likely resume its unlawful conduct after the case is dismissed.  The district court denied the motion on the grounds that EPA had not changed its underlying position concerning whether the discharges were agricultural storm water exempt from permit requirements.  The district court noted that EPA reserved the possibility of reissuing the order if there was a significant change in the poultry farm’s operations, and the intervenors showed that EPA’s alleged assertion of authority can be expected to continue.  In short, EPA’s position was reviewable even though the order that provoked the lawsuit had been withdrawn  by EPA.  As Jimmy Reed said in his classic blues song, “You can run, but you can’t hide.”

If that wasn’t enough to ruin EPA’s day, the court went on to reach the merits of EPA’s position concerning the need for a NPDES permit and granted summary judgment for Alt.  The court held that no permit was required because the discharges were exempt as “agricultural storm water discharges.”  The court rejected EPA’s argument that the discharges did not have an agricultural purpose, concluding that the poultry operation was agricultural, that the incidental manure was related to the raising of poultry, and that the runoff from the farm was storm water caused by precipitation.

The Alt decision is significant both for its review of an EPA position underlying an order that had been withdrawn and for its decision concerning the agricultural storm water exemption.

“Waters of the U. S.” - What’s Not to Understand?

Posted on November 26, 2013 by Rick Glick

EPA and the Army Corps of Engineers continue their ongoing effort to bring clarity to the tangled mess wrought by the Supreme Court in Rapanos v. U. S. In that 2006 case, a fractured Court issued five separate opinions on the jurisdictional reach of the Clean Water Act.  Congress didn’t help in the first place by extending such jurisdiction to “navigable” waters, defined in the Act as “waters of the United States” without further elucidation.  EPA and the Corps have developed new rules now under review by the Office of Management and Budget prior to release for public comment.

The agencies and the courts have long struggled with a workable definition of “waters of the United States,” particularly in the context of filling wetlands.  The Supreme Court previously held that wetlands adjacent to navigable waters are jurisdictional because of their ecological connection to those waters, but isolated wetlands in the Pacific Flyway are not.  In Rapanos, a four member plurality in an opinion by Justice Scalia limited jurisdiction to areas that are wet with flowing or standing water on a more or less regular basis, which would exclude many areas that appear dry but meet the agency definition of wetlands.  The determinative fifth vote, however, was from Justice Kennedy, who applied a different test, requiring only a “significant nexus” between the navigable waterways and the wetland. 

Since Rapanos, many courts have been unable to discern guiding precedent and adopted hybrids of the Scalia and Kennedy tests. In the meantime, the agencies on two occasions have adopted guidance to help permit writers and the regulated community recognize jurisdictional wetlands.  The agencies’ latest effort would go beyond guidance to rules having the force of law. 

The rules define jurisdictional waters of the United States to include categories of wet areas, such as tributaries of navigable waterways.  The rules would exclude drainage ditches excavated on uplands or other artificially wet areas, such as waste treatment systems or irrigated lands.  The expectation is that by establishing by rule categories of jurisdictional waters that per se have a significant nexus to navigable waters, the cost of permitting and litigation would decrease, while certainty for land developers would increase. 

The rules are based on a report by EPA staff that compiles and synthesizes peer-reviewed scientific research on the relationship between tributaries, wetlands and open waters.  The report is under review by EPA’s Science Advisory Board, and EPA has said the rules would not be released for public comment until that review is complete. 

Still, the fact that the rules were developed before the report and Science Advisory Board review is complete has drawn criticism from Congressional Republicans.  They charge that the report is just window dressing for EPA doing what it wants.  In a letter dated November 13 to EPA, the Senate and House Western caucuses urge EPA to withdraw the rule “based on the devastating economic impacts that a federal takeover of state waters would have.”

The prospect of having rules in place to define jurisdictional waters is, on its face, a positive development because of the uncertainty that now pervades this area.  However, in addition to Congressional resistance, the goal of avoiding litigation will likely prove elusive.  If challenged, the agencies will be entitled to a measure of deference once the rules are adopted, but we can safely predict there will be many challenges.  

Once the rules clear OMB and the Science Advisory Board, they will be published for public comment.  Watch this space for updates.

The Water Rich Adjust to a New Water Reality

Posted on November 13, 2013 by Andrew Brown

Water management issues have become much more serious in recent years.  Even Minnesota – the Land of 10,000 Lakes – is coping with limited water resources.  Recent state reports have warned a growing number of parts of Minnesota will soon face groundwater shortages, especially during drought periods due to increasing water use and the potential effects of climate change.  

In Minnesota, the responsibility to ensure the State maintains an adequate supply of water resources falls primarily upon the Department of Natural Resources (“DNR”).  Since 1937, the DNR Commissioner has regulated water use through a water appropriations permit program.  In implementing the appropriations program, the DNR Commissioner is granted broad authority to assess cumulative impacts and sustainability.  Although there is no specific definition in state law, the DNR has defined “sustainable water use” as “the use of water to provide for the needs of society, now and in the future, without unacceptable social, economic, or environmental consequences.” 

To manage groundwater conflicts, the Minnesota Legislature in 2010 authorized the DNR to designate “groundwater management areas” and develop water use plans for these designated areas.  The DNR is now in the process of implementing this new law.  Last year, the DNR undertook a process to develop a groundwater strategic plan to designate and implement groundwater management areas.  In kicking off the planning process, the DNR acknowledged that both the Department and water users have traditionally operated under the assumption that water was plentiful and limits were seldom necessary.  The DNR now recognizes, however, that it has the authority to change the permitting system to shift away from such generous assumptions and to make determinations intended to promote sustainability even if those determinations result in the denial of some allocation requests.

The DNR is now seeking input from stakeholders in the development of the state-wide strategic plan.  The DNR has also identified three potential groundwater management areas but the specific boundaries have not been delineated.   In fact, defining the groundwater management boundaries will be one of the toughest issues in implementing the new law, as DNR is weighing whether boundaries should be based on underlying aquifers, distribution of current and future use, watershed boundaries, or even community boundaries.  

As water management issues become more serious, Minnesota’s groundwater management area program presents one potential model for other policymakers and regulators who must tackle these tough issues.

Cooling Water Intake Rules – Will This Turkey Arrive for the Holidays?

Posted on November 7, 2013 by Molly Cagle

Quoting our colleague Philip Ahrens, “We shall see” indeed.

Invoking force majeure due to the 16-day government shutdown, EPA has again (for the third time) delayed the issuance of the Clean Water Act 316(b) rules past the November 4, 2013 deadline most recently agreed to in its settlement with Riverkeeper.  It remains to be seen if EPA will deliver the 316(b) rules on November 20, 2013 – just in time for a little light reading over your turkey dinner – or seek a further extension with Riverkeeper.  EPA and environmentalists are now in talks for a new deadline, so you can probably head home to enjoy your  turkey and sides at Thanksgiving without toting home a Federal Register package to disrupt your holiday.

Advocates for a more stringent set of rules appear to have used the latest delay to secure political support from a group of House Democrats that recently encouraged EPA Administrator Gina McCarthy to require power plants and other industrial facilities to install closed-cycle cooling water technologies not just to save local ecosystems, but also to respond to climate change.  According to the elected officials, “Closed-cycle cooling structures would ensure greater energy grid security and reduce ecological harm in a warming world.”  That’s a pretty incredible statement all around given that, although the cooling water intake rules have been embroiled in a multi-decade-long saga of regulations and litigation about entrainment and impingement of fish, they have never been about a meaningful assessment of the ecological impact of various entrainment and impingement rates in various types of water bodies.  In fact, the proposed rule completely failed to take into account significant variations in different types of waterbodies.

Given the proposed 316(b) rules, EPA is unlikely to jump on the closed-cycle cooling bandwagon and abandon a more flexible approach.  The Democratic Congressmen say in their letter that flexibility unfairly burdens state environmental protection agencies.  Environmentalist say that the flexible approach will bring more litigation because the proposed approach is not lawful.  Industry groups continue to prefer flexibility as it allows them options such as upgraded screens, barrier nets, reduced intake velocity, fish return systems – technologies that would lead to reduced impingement and entrainment but cost far less than retrofitting plants with cooling towers and other high-energy technologies.  So industry too remains primed for challenge.  At stake is the potential for hundreds of millions of dollars of upgrades for an ill-defined environmental benefit.  

While it’s anyone’s guess when the rules will come out, it does seem reasonable to predict that whenever they emerge, the lawsuits will follow.

Carbonless Copy Paper Does Not Always Produce a Carbon Copy

Posted on October 22, 2013 by Linda Benfield

In 2009, CERCLA practitioners were thrilled to finally have a new Supreme Court case to work and play with.  Even better, Burlington Northern & Santa Fe Railway Co. v. United States, 129 S. Ct. 1870 waded into the murky area of “arranger” liability.  However, two recent cases addressing the potential arranger liability of NCR for the same business practices but at two separate sites, and both relying on Burlington Northern, illustrate that in this area the Supreme Court has just given us more language to argue about.

Both cases addressed the same business arrangements:  NCR’s sale of a PCB emulsion to paper coaters, their sale of coated paper back to NCR, and the resulting contamination when recyclers deinked the paper and released PCBs into major water bodies from 1954 to 1971.  The cases even relied upon the same language from Burlington Northern – that “an entity may qualify as an arranger … when it takes intentional steps to dispose of a hazardous substance.” 

However, with respect to the PCB cleanup of the Fox River, the federal district court for the Eastern District of Wisconsin held that NCR had “knowledge alone” and was not liable as an arranger.  The court found that even though NCR knew that remnants - “broke” - contained the emulsion and released PCBs when recycled, “there was no evidence that NCR had any purpose in selling its emulsion to [a coater] other than to produce a commercially viable product.  Broke was simply not part of the equation.”  This court viewed the arrangements as the sale of a useful product. Appleton Papers Inc. and NCR Corporation v. George A. Whiting Paper Co.  Across Lake Michigan and 15 months later, the federal district court for the Western District of Michigan held the opposite - that NCR was liable as an arranger for the PCB cleanup of the Kalamazoo River.  The court focused on NCR’s efforts to encourage recycling of the broke, and found that “not later than 1969, NCR understood the  … broke .. was no longer anything but waste and was no longer useful to any paper recycler who understood the true facts as NCR did.” Georgia-Pacific Consumer Products LP, et al, v. NCR Corporation, et al.  Given the size of the cleanup bills in both rivers, keep an eye out for the appellate decisions.

Section 316(b) of the Clean Water Act – Cooling Water Intake Requirements – Update on EPA and State of Maine Actions

Posted on October 21, 2013 by Philip Ahrens

Section 316(b) of the Clean Water Act requires that the location, design, construction and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.  Although the statutory language is straight-forward, EPA continues to face – and create – enormous difficulties in promulgating the rules to implement Section 316(b).

The latest in a series of rulemaking efforts began on April 20, 2011 when EPA published a proposed rule to protect fish from being killed at water intake structures that withdraw at least 2,000,000 gallons per day from waters of the United States and use at least 25% of that water exclusively for cooling purposes.  Pursuant to a judicial Settlement Agreement with the environmental group Riverkeeper and other organizations, EPA was required to issue the revised rule by July 27, 2012. 

When EPA was unable to issue its new rule by the court-approved date, it entered into a Second Amendment to the Settlement Agreement with Riverkeeper and other organizations.  That Agreement required that “Not later than June 27, 2013, the EPA Administrator shall sign for publication in the Federal Register a notice of its final action pertaining to issuance of requirements for implementing Section 316(b) of the CWA at existing facilities.” 

On June 18, 2013, nine days before the June 27 deadline for publication of notice of final action, EPA initiated Endangered Species Act (ESA) Section 7 consultation with the National Marine Fisheries Service and the Fish and Wildlife Service.  EPA has been criticized for many years for its failure to initiate Section 7 ESA consultation during rulemaking.  With the agreement of Riverkeeper and the other plaintiffs, a revised Settlement Agreement now allows a delay in the issuance of the final rule until November 4, more than four months after the June 27, 2013 deadline. 

Although the revised Settlement Agreement allows time for Section 7 consultation, it does not appear to allow time for review of the rule by the White House Office of Information & Regulatory Affairs. 

Given the delays that have been experienced to date on this rule, coupled with the delays engendered by the government shutdown, it seems doubtful that EPA will be able to meet the new November 4, 2013 deadline for issuance of its cooling water intake rule.  We shall see.

Illicit PCB Dumping Prompts Emergency Regulation

Posted on October 1, 2013 by Thomas Lavender

On September 25, 2013 the South Carolina Department of Health and Environmental Control (SCDHEC) filed an emergency regulation in response to multiple occurrences of illegal dumping of substances containing polychlorinated biphenyls (PCBs) into multiple sewer systems across the State. The Emergency Regulation took effect immediately upon filing and remains in effect for ninety (90) days.  SCDHEC acknowledged the existence of an ongoing investigation into the origin of the materials, including state and federal authorities.  SCDHEC noted that there was currently no known impact to public health or any confirmed discharge to surface water bodies.  It is also believed that publicly-owned treatment works (POTWs) in states bordering South Carolina have recently detected PCBs in their systems.

In August, SCDHEC had acknowledged that PCBs had been detected in several POTWs in the Greenville-Spartanburg area of the State.  Concurrent with the filing of the Emergency Regulation, the agency announced that PCBs had now been detected in a POTW in the Columbia, SC area.

Some South Carolina wastewater treatment systems are permitted for the land application of their sludge.  Based on the suspected criminal activity, DHEC has determined the need for specific regulations limiting the land application of sludge containing detectable levels of PCBs.  The Emergency Regulation addresses the land application of sludge from wastewater treatment systems and specifically limits land application to sludge containing no detectable levels of PCBs and requires increased testing of sludge, regardless of disposal method, to aid in identifying illegal dumping suspects.  SCDHEC has also informed all of the state’s class III landfill operators and waste water treatment plants of the matter, and provided them guidance regarding proper disposal and reporting any suspicious activity.

SCDHEC issued a Be On the Lookout (BOLO) alert through the State Law Enforcement Division to heighten awareness among law enforcement of illegal dumping and solicit the help of local law enforcement agencies.

Shoot First -- Ask Questions Later

Posted on September 26, 2013 by Mark Walker

“Shoot first, ask questions later” is how Congressman Chris Stewart described EPA’s efforts to link groundwater contamination to hydraulic fracturing.  Stewart is the Chair of the Environmental Subcommittee of the House Committee on Science, Space and Technology, chairing the July 24 hearing on “Lessons Learned:  EPA’s Investigations of Hydraulic Fracturing.”  Specifically at issue was the EPA’s investigation in Pavillion, Wyoming.

In December, 2011, the EPA issued a “draft” report which concluded that hydraulic fracturing in the Pavillion, Wyoming gas field had caused pollution of the deep drinking water aquifer.  The draft report was based upon sample results from two EPA monitor wells and was issued without peer review or stakeholder input.

There were serious flaws with EPA’s work.  For starters, EPA failed to complete the monitor wells according to its own guidelines.  Annular sealants were not properly installed, allowing cement to impact the water quality.  A landowner’s complaint that EPA had an anti-freeze leak during drilling operations was not disclosed in the draft report.  EPA exposed the wellbores to painted low-carbon steel casing and welding materials, which are known to contain various organic and metal compounds, yet the report inaccurately stated that stainless steel casing had been used.  Moreover, several of the constituents which the EPA attributed to hydraulic fracturing fluids (e.g. glycols, 2-butoxyethanol and phenols) are known to be associated with the high pH cement that the EPA used to complete the wells.  The bottom line is that the EPA’s own operations introduced the contaminants that it blamed on hydraulic fracturing fluids.

Subsequent testing by the USGS was unable to verify the EPA’s results.  The USGS was unable to find some of the compounds that EPA claimed were present, and other constituents were found at significantly lower levels.  The USGS was unable to sample one of the two wells due to improper well construction.

The EPA has now walked away from its flawed study, turning the entire investigation over to the State of Wyoming.  The EPA has stated that the draft report will not be peer reviewed or finalized, and that the results will not be used in its national hydraulic fracturing study.  Nevertheless, the EPA’s handling of Pavillion has cast doubt over the EPA’s national investigation of hydraulic fracturing intended to develop regulatory policy for unconventional reserves, causing Chairman Stewart to conclude, “given EPA’s rush to judgment in Wyoming…we should question whether the Agency’s ongoing study is a genuine, fact-finding, scientific exercise, or a witch-hunt to find a pretext to regulate.”

Great Lakes – Great Waste

Posted on September 13, 2013 by David Ullrich

The world’s largest source of surface fresh water is surrounded by a number of nuclear plants that have been generating power and waste for well over 30 years.  Although the region has had the benefit of the power, it also has the legacy of low, medium, and high level waste that has been accumulating at these plants over the years.  There is great concern over this situation because the lakes are the source of drinking water for over 30 million people.

Currently, Ontario Power Generation (OPG) has a proposal for a deep geologic repository (DGR) for low and intermediate level radioactive waste at their Bruce Nuclear facility near Kincardine, Ontario.  The waste comes from the Bruce facility, as well as OPG’s Darlington and Pickering plants.  It is currently stored above ground    The DGR would be 680 meters below the surface of the ground and about one kilometer from the shores of Lake Huron.  Kincardine offered to serve as a host community for the DGR, and no other potential sites have been considered.  There has been extensive outreach in the Kincardine area over the past 10 years about the proposal, and some limited amount in Michigan.  Only recently has the broader Great Lakes community become aware of the proposal and some significant concerns have been raised, primarily the proximity to Lake Huron and the lack of consideration of other sites.  In addition, there is concern that this would be a precedent for more disposal sites for not only low and medium level waste, but also the high level waste from spent fuel.  The proposal is under review by a Joint Review Panel formed by the Canadian Nuclear Safety Commission and the Canadian Environmental Assessment Agency.

Although OPG has done extensive engineering and geological work, the fundamental question is whether a disposal site should be located so close to one of the Great Lakes, the source of drinking water for over 30 million people.  Also, should just one site be considered for something as significant as this?  Some have argued that there should be no more nuclear plants on the Great Lakes until an acceptable disposal solution has been found.  The reason the nuclear plants are there in the first place is the abundance of available cooling water.  It seems ironic that the convenience of locating the disposal site next to the plant to limit transportation of the waste, also results in the waste staying close to Lake Huron.  We should be able to do much better than this in the 21st Century.

Those Dam Polluters!

Posted on August 23, 2013 by Rick Glick

The Columbia and Snake River federal network of dams, and the abundance of low cost electricity it produces, has long been the cornerstone of the Pacific Northwest manufacturing economy.  It has also supported another industry—the legions of lawyers fighting over the environmental effects.  The latest iteration is an attack brought by Columbia Riverkeepers against the Army Corps of Engineers for oily discharges from the dams.

Riverkeepers filed lawsuits in U. S. District Courts in both Oregon and Washington alleging that oils released from the dams are discharges of pollutants for which a National Pollutant Discharge Elimination System (NPDES) permit is required under the Clean Water Act (CWA).  The oils are used for lubricating turbine equipment, which Riverkeepers allege are released every day through spillways and penstocks at Bonneville, John Day, McNary, Ice Harbor and other federal dams.  The suits seek declaratory and injunctive relief, mandating that the Corps secure NPDES permits.

Oily discharges are common among hydroelectric facilities.  For the most part these are minor releases, though the complaint does allege a spill of 1,500 gallons of transformer oil containing PCBs from the Ice Harbor Dam on the Snake.  Most privately owned dams in the region operate under general permits encompassing the small-volume releases.  A few have NPDES permits.

As I have noted in prior blogs, courts have held that dams are “nonpoint” sources of pollution, which do not require a NPDES permit.  These holdings were in the context of dams merely passing through pollution flowing into reservoirs from upstream sources, as opposed to adding pollutants.  However, there have been cases where the discharge below the dam was not simply a pass through, and the court found a permit was required.

In relation to the ongoing litigation over the dams’ effect on salmon spawning, rearing and, migration, the Riverkeepers case will not likely have a significant effect on Corps operations.  Even if the suit is successful, oily discharges can be managed, if not wholly eliminated.  These cases should settle.

The Ghost of Offshore Boundaries Past

Posted on July 24, 2013 by James Palmer Jr.

At the 2013 Offshore Technology Conference in Houston, nobody was really surprised to hear Gulf Coast and Alaska Governors calling for an expansion of offshore drilling activity and streamlined permitting processes.  But, more than a few were probably surprised to hear the Governors of North Carolina, South Carolina, and Virginia echo the same sentiments, especially because drilling activity offshore these three states is currently banned by Presidential edict.
 
As the post-BP offshore drilling debate marches on, there just might be some interesting wrinkles down the way between and among the allied states that support a resurgence of seaward exploration and production operations.  One possibility deserves a passing note.
 
During its 2011 Regular Session, the Louisiana Legislature passed, and the Governor signed into law, Act No. 336, which extended the offshore boundary of the State from the current three geographical (nautical) miles to three marine leagues (nine geographical miles), as measured from the coastline.  At its June 2012 meeting, the Louisiana Wildlife and Fisheries Commission followed suit by formally adopting the legislative mandate and conforming its marine regulatory jurisdiction accordingly.  The new boundary created by Act No. 336 by its terms is subject to recognition by Congress or the courts.
 
While a Louisiana official was quoted in the media afterwards as saying that Mississippi and Alabama should join Louisiana and launch the same initiative against the federal government, the Mississippi Commission on Marine Resources, at its July 2012 meeting, adopted a Resolution opposing the action of its Louisiana counterpart.  Thus, the issue was joined at that point, at least at the state agency level.  But, not to be outdone in statutory law, the Mississippi Legislature, in its 2013 Regular Session, amended Section 3-3-1, Mississippi Code of 1972 Annotated, through the adoption of HB 1072, which mimics the 2011 Louisiana legislation by extending the boundary of Mississippi offshore territorial waters from three geographical miles to three marine leagues.  This legislation became effective on July 1, 2013.
 
For perspective, a history lesson is necessary.  In a stunning decision in 1947, followed by two more in 1950, the United States Supreme Court decreed that coastal states have no claim to any submerged lands offshore.  Because these decisions directly impacted not only the states along the Atlantic, Pacific, and Gulf Coasts, but those along the Great Lakes, as well, the adverse reaction to them was swift and strong.  After several years of wrangling, Congress passed the Submerged Lands Act (the Act) in 1953 to undo what the Supreme Court had done.
 
Of the three major components of the Act (i.e. lands under navigable inland waters; tidelands; and lands under the open sea), the centerpiece is a Congressional grant of state title to, and jurisdiction over, certain offshore areas.  Specifically, states along the Atlantic and Pacific Coasts were granted submerged lands extending three geographical miles seaward of their respective coastlines.  The Great Lakes States were granted submerged lands extending to the international boundary.  States along the Gulf of Mexico were granted submerged lands extending not less than three geographical miles nor more than three marine leagues seaward of their respective coastlines. 
 
But, there the Congress stopped.  Except to define the term "coastline" as "the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters," the law gives no specific geodetic references or methodologies for its delimitation.  And, the ultimate decision regarding the respective offshore domains of the five states bordering the Gulf of Mexico was left to be determined by the courts. Simply put, the Act thus set the stage for more court battles to follow.

In 1960, the Supreme Court determined that the Submerged Lands Act boundaries for Louisiana, Mississippi, and Alabama should extend three geographical miles seaward from their respective coastlines.  The Court further determined that the Submerged Lands Act boundaries for Texas and the Gulf Coast of Florida should extend three marine leagues seaward from their respective coastlines, because of the different histories of admission to the Union of these two states.   But, as with the Congress, the Supreme Court made no attempt to delimit the respective "coastlines" for any of the five Gulf Coast states, which inevitably led to even further protracted litigation.
 
Following the 1960 Supreme Court decision, several bills were introduced in the Congress to amend the Act to specifically grant to Alabama, Mississippi, and Louisiana submerged lands extending three marine leagues from their respective coastlines.  These efforts failed.

The next eruption of litigation targeted the Mississippi Sound.  In April 1971, the United States for the first time publicly disclaimed the inland-waters status of Mississippi Sound by publishing a set of maps depicting several irregularly shaped polygons between the mainland and the barrier islands that were denoted "enclaves of high seas," the submerged lands underlying them thus belonging to the federal government.  The States of Mississippi and Alabama were once again launched into litigation against the United States. 
 
In 1985, the Supreme Court trounced the federal government by adopting the Special Master's determination that Mississippi Sound constitutes a "historic bay" and thus is inland waters in its entirety.  Further, the Court also adopted the Special Master's determination that the "coastline" is the line of ordinary low water on the south shore of the barrier islands.  The Court then directed the parties to prepare a proposed final decree and submit it to the Special Master for consideration by the Court.  This process, which took another seven years, involved Supplemental Decrees in which the baselines for establishing the coastlines of both Alabama and Mississippi, described using point-to-point geodetic coordinates, were approved by the Court and set out in the decrees.
 
Thus, the three-geographical-mile offshore submerged lands boundary for these two states, granted under the Act and subsequently established by the Supreme Court in its 1960 decision, was then precisely determinable.  At last, in 1992, after over three decades of fighting over the federal-state submerged lands boundary for Alabama, Mississippi, and Louisiana, the Supreme Court put the matter to rest – until now.
 
Whether or not the 2011 Louisiana legislation and/or the 2013 Mississippi Legislation will actually lead to any changes in the current offshore submerged lands boundaries of these states remains to be seen.  As already noted, attempts over a half century ago to accomplish the same objective as that of Act No. 336 and HB 1072 failed.

Quite obviously, both Alabama and Texas have considerable vested interests in the actions now taken by their neighboring states.  Less obvious, though, is the prospect that, if Congressional action is mounted in furtherance of either Act No. 336 or HB 1072, nobody should be surprised if any of the East Coast or West Coast states (or Alabama), which were also granted three-geographical-mile offshore submerged lands boundaries under the Act, might be heard to say, "Me, too."

Doin’ the Dunes: What Will They Cost ? – Part II

Posted on July 19, 2013 by Joseph Manko

On June 13, 2013, I posted a blog regarding how to compensate New Jersey beach owners who have an easement condemned on their property to allow the Corps of Engineers to construct dunes.  In the blog, I indicated that the trial court and Appellate Division in New Jersey had excluded testimony on the value that the dunes would bring to the property as a “special benefit”, determining that dunes provided a “general benefit” for not only the property owner but all of the other owners who may be affected, as well as the state of New Jersey, and therefore would not be taken into account in determining the condemnation value for the easement.  At the same time, the New Jersey legislature was considering a bill that would specifically require recognition of these “special benefits” and Governor Christie was criticizing beach owners who would not cooperate in helping forestall the damages that such beachfront owners would incur from future “Sandy” storm events.

On Monday, July 8, 2013, the New Jersey Supreme Court, in a unanimous decision, reversed the Appellate Division and remanded the case for the jury to consider the value of the protection afforded by the dune, a “special benefit”, which obviated the need for the legislature to speak to the issue. 

The bottom line is that in constructing dunes on the 127 mile coastline, the property owners are “not going to be paid a windfall for [their] easement[s]”, according to Governor Christie.

While it remains to be seen how the lower court will now value the easement, from the standpoint of protection against rising sea levels and catastrophic floods, the recognition that dunes will benefit coastal owners appears to this author to be a step in the right direction.  

New Water Wars in Oregon’s Klamath Basin

Posted on July 9, 2013 by Martha Pagel

These are sad times in Oregon’s Klamath Basin.  The state is making national headlines again over water wars pitting farmers and ranchers irrigating lands above Upper Klamath Lake against the Klamath Indian Tribes.

The Klamath area first made front page national news in 2001, when farmers and ranchers protested the removal of water from irrigation in order to protect threatened sucker fish under the federal Endangered Species Act (ESA).  This time, the headlines stem from an unprecedented “call” for water to serve a time immemorial water right granted to the Klamath Tribes.  Under principles of the prior appropriation doctrine in place in Oregon and most western states, seniority matters, and time immemorial is the ultimate priority date. 

The current problem was a long time in the making. After more than 38 years of administrative proceedings, the Klamath Basin General Stream Adjudication finally reached a critical legal juncture in March, 2013 that allowed historic water use claims to be enforced for the first time.  At that time, the Oregon Water Resources Department (OWRD) issued its long-awaited “Findings of Fact and Final Order of Determination” (FFOD) summarizing the state’s proposed disposition of more than 730 claims.

The FFOD included the state’s quantification of treaty-based reserved water rights for the Klamath Tribes to ‎support fishing and gathering activities in Upper Klamath Lake and its tributaries.  Although the instream flow and lake level amounts claimed by the ‎Tribes and approved by OWRD are still subject to further judicial review, the state is obligated ‎to respond to the Tribes’ call unless and until a court stays the action. ‎

As a result of the call, OWRD has already begun the process of shutting off water diversions for all other upper basin water right holders to the extent needed to fully satisfy the Tribes’ approved claims.  This means a loss of water for thousands of acres of irrigated farmland and other junior uses including domestic water for homes, stock water, and even the lodge at Crater Lake National Park.  The regulation system is based strictly on priority dates; however, OWRD has taken emergency action to allow continued water deliveries for human consumption and stock water.

At this point, a coalition of upper basin water users has petitioned for a judicial stay of the FFOD’s enforcement.  A hearing was held on July 3, and a decision is expected soon.  If the stay is not approved, the upper basin lands will remain dry and the economic losses will be substantial.  With nearly 40 years to prepare, it is sad that the affected interests were not able to reach some level of negotiated agreement before the battle lines were drawn.  Although both Tribal and non-Tribal water users have expressed interest in a negotiated solution, ‎there is no settlement process currently underway, and the war rages on.‎

The Reach of Sackett v. EPA: Impacts Beyond Clean Water Act Compliance Orders

Posted on June 19, 2013 by Theodore Garrett

When Sackett was decided by the Supreme Court, an uncharted issue was the extent to which the decision would be extended to make pre-enforcement review available to EPA orders under  other statutes.  EPA has now acknowledged that Sackett has a long reach. 

As previously reported, the Supreme Court in March 2012 issued its long awaited decision in Sackett v. EPA. In a unanimous decision, the Court held that the Sacketts may bring a civil action under the Administrative Procedure Act to challenge EPA’s compliance order. The court rejected the government’s argument that EPA is less likely to use orders if they are subject to judicial review, saying that “[t]he APA’s presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all.”

When I reported on this decision earlier, I noted that it will be important to see how EPA responds and what if any changes are made to EPA’s practice and procedure for issuing orders under other statutes.

EPA has now formally acknowledged that the Sackett decision has implications for other statutes.  In a memorandum dated March 21, 2013, EPA’s Office of Enforcement and Compliance Assurance has concluded that it is important to advise recipients of EPA unilateral orders under other programs of their opportunity to seek pre-enforcement judicial review of such orders. 

In particular, EPA has directed enforcement staff to immediately begin adding the following language to typical unilateral orders under FIFRA, Clean Air Act, Safe Drinking Water Act and EPCRA: 

“Respondent may seek federal judicial review of the Order pursuant to [insert applicable statutory provision providing for judicial review of final agency action.]” 

The foregoing language applies, inter alia, to stop sale, use or removal orders under FIFRA §13, stop work or compliance orders under Clean Air Act §§113(a) and 167, and emergency and compliance orders under EPCRA §§ 325(a). 

With respect to compliance and corrective action orders under RCRA §§3008(a), 3008(h), 9003(h) and 9006(a), EPA’s Memorandum directs enforcement staff to include language advising respondents that they may seek administrative review in accordance with 40 CFR Part 22 or 24 as applicable. 

EPA’s March 21, 2013 Memorandum states that EPA believes that the reasoning in Sackett does not lead EPA to believe that similar language is appropriate for unilateral orders issued under statutory authorities other than those discussed in the Memorandum, and it is noteworthy that the EPA Memorandum makes no reference to unilateral orders under CERCLA. 

Justice Scalia’s opinion in Sackett had little difficulty in disposing of the government’s argument that the Clean Water Act should be read as precluding judicial review under the APA, 5 U. S. C. §701(a)(1). The APA creates a presumption favoring judicial review of administrative action, and the Court concluded that nothing in the Clean Water Act’s statutory scheme precludes APA review.  EPA undoubtedly believes the CERCLA is different because of the provisions in §§113(h) that deprived the courts of jurisdiction to review challenges to removal or remedial actions selected or orders issued under §106 unless one of five exceptions applies. 

In addition to their Administrative Procedure Act argument, Sacketts also maintained that EPA’s issuance of the compliance order deprived them of due process in violation of the Fifth Amendment.  Because the APA disposed of the matter, the Supreme Court did not reach the Fifth Amendment issue.  Interestingly, before it granted certiorari in Sackett, the Supreme Court denied certiorari to review a decision by the D.C. Circuit rejecting arguments made by General Electric that CERCLA §106 orders violate the due process clause.  Stay tuned.

Sooners Beat Longhorns in Red River Bowl

Posted on June 18, 2013 by Rick Glick

In a unanimous decision issued June 13, the Supreme Court put an end to a parched Texas municipal utility’s bid to secure an Oklahoma water right.  In Tarrant Regional Water District v. Herrmann, the Court rejected every argument Tarrant advanced to access Red River basin water on the Oklahoma side.

The fabled college football rivalry between the Texas Longhorns and Oklahoma Sooners is not the only long simmering regional contest.  Dividing the waters of the Red River between Texas, Oklahoma, Arkansas and Louisiana has been a source of tension through much of the twentieth century, until the states entered into a Compact in 1978, approved by Congress in 1980.  The Compact took 20 years to negotiate. 

At issue is a provision under the Compact that guarantees a minimum flow from a certain reach of the river to Louisiana, which lacks adequate storage facilities.  The provision gives each state an equal share in the water from that reach.  Tarrant, which serves the fast-growing Fort Worth area, had hoped to access water in an Oklahoma tributary before the water reached the Red River, as the river’s water quality is not suitable for domestic use when it enters Texas.  

Failing in its attempt to purchase water from Oklahoma, Tarrant Regional Water District filed a water right application with the Oklahoma Water Resources Board.  Knowing that Oklahoma law prohibits out of state use of water rights, Tarrant simultaneously filed an action in U. S. District Court.  The district argued that the Compact preempts state water law, but the Court found nothing in the Compact to compromise the sovereign right of states to manage their waters.  Absent an express provision in the Compact that allows signatories to access water across state lines, the states are free to regulate their waters as they see fit. 

The states of Oregon and Washington entered into a compact in 1915, ratified by Congress in 1918, to regulate commercial fishing rights.  In light of the Tarrant decision, would expansion of the compact to deal with other regional water issues make sense?  For example, Washington and Idaho allow diversions of Lower Columbia River water for agriculture, whereas Oregon has not, citing fishery concerns.  While the effect of the Federal Columbia River Power System on salmon has been hotly contested, and regional solutions attempted, perhaps a coordinated approach among the Northwest states with regard to Lower Columbia water use could bring about equities and protect fish.  The Tarrant decision can be read to provide assurance that state prerogatives and rights are preserved even under a compact, unless the states decide it is in their mutual best interest to provide otherwise.

Doin’ the Dunes: What Will They Cost?

Posted on June 13, 2013 by Joseph Manko

How appropriate was the name “Sandy”, which hit the New Jersey shore, leaving in its wake a $30 billion cleanup/rebuild price tag.  Climate change experts agree that such catastrophic storms will continue to occur in the future and that adaptation is essential to confront repetitions.

So it is in New Jersey where all 3 branches of government have suggested ways in which to do so.  First, Governor Christie has gone on record as being “not in favor of using eminent domain to kick people out of their homes”.  He therefore proposes to spend $300 million to acquire key beach homes on the Ocean and Monmouth County shorelines.

Second, and most interesting to environmental and land use attorneys, is the U.S. Army Corps of Engineers’ (Corps) pursuit of acquiring easements along the New Jersey shore lines on which to construct and maintain 2-story high sand dunes.  This program, begun in 2003 and contemplated to last 50 years, is focused on 14 miles of New Jersey’s barrier islands at an estimated cost of $144 million. (The Corps’ estimate does not recognize the issues raised here.)  The wild card in the Corps’ approach is how much needs to be paid in compensation for the property owners’ easement, including a partial loss of ocean view.  This is the issue moving through the New Jersey legislature and, more importantly, its courts. In the most recent case, Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, Judge E. David Millard, the lower court judge, was faced with the question whether the compensation award for an easement on 1/3 of the Karans’ beachfront property, on which the Corps built a 22 foot high sand dune which partially obstructed their ocean view, should be reduced by the resultant benefit of protection from future storms provided by the dunes – or whether the general benefit to others, and the entire state of New Jersey, made such a “special benefit” to the Karans not recognizable under existing New Jersey case law.   Finding such “special benefit” not consistent with prior law and extremely speculative to calculate, Judge Millard  instructed the jury not to make any such reduction in the $375,000 award.  The New Jersey Superior Court Appellate Division affirmed the result, Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, 45 A.3d 983 (2012) .  The New Jersey Supreme Court granted certification to the Borough and heard two hours of argument on May 20, 2013.

Third, while all this was going on, a bill was introduced in the New Jersey Senate in March 2013 which, if enacted, would allow the Court to consider the “special benefit” which dunes would afford to the affected homeowners.  Whether the bill ever becomes law, as well as questions as to its constitutionality and its effect on New Jersey case law would certainly emerge – as will be the question as to whether the New Jersey Supreme Court will take notice of the bill in rendering its decision.

Issues such as these will clearly impact the cost of climate change adaption, especially so with the threat of the anticipated rising of sea levels and recurring coastal storms to island properties.  Stay tuned.

Tenth Circuit to Decide Whether NEPA Requires Impacts from Water Diversion Project to Be Analyzed Based On Maximum Achievable Diversions

Posted on May 13, 2013 by Thomas Hnasko

On February 11, 2013, the United States District Court for the District of New Mexico denied a Motion for Preliminary Injunction filed by the Village of Logan, seeking to compel the Bureau of Reclamation (“BOR”) to perform an environmental impact statement (“EIS”) for the Ute Lake Diversion Project in eastern New Mexico.  The BOR issued an environmental assessment (“EA”), which analyzed the impacts from the diversion project based on the withdrawal of only 16,450 acre-feet per year (“af/yr”), despite the fact that the intake structure capacity is 24,000 af/yr.  The BOR contended that the intake structure did not have sufficient pumping capacity and other infrastructure to achieve 24,000 af/yr.

At the preliminary injunction hearing, Logan presented evidence that the Interstate Stream Commission of New Mexico (“ISC”), as the putative owner of the water rights within Ute Lake, had contracted to sell 24,000 af/yr and that the engineering analysis demonstrated sufficient existing capacity within the intake structure to accommodate withdrawals of 24,000 af/yr.  Consequently, similar to analyses required under other environmental laws, including the Clean Air Act, Logan argued that the impacts from the proposed project must be analyzed based on the maximum achievable withdrawal capacity of the intake structure.

The difference in the severity of impacts, based on 24,000 acre-feet withdrawals and 16,450 acre-feet withdrawals, was significant.  The EA conceded that, at 24,000 acre-feet per year, the minimum fisheries pool in Ute Lake – established to provide a minimum necessary habitat for recreational fishing – would be breached at least 20% of the time over a 30-year period.  Allowing the fisheries pool to be breached for at least 6 years over the life of the project created inter-related economic impacts, including significantly decreased property values on the shoreline, decreased tax receipts for the community, lost jobs, and significantly declining revenue for the New Mexico Department of Game and Fish.

The district court ruled that the EA, together with its finding of no significant impact (“FONSI”), was not arbitrary and capricious based on the assumption that the withdrawals would only reach 16,450 af/yr.  The Court stated that, “If in the future, more infrastructure is added to facilitate further withdrawals, primary analysis of the environmental impact may be undertaken then.”  The Court did not state whether such a “primary analysis” would occur within or outside of NEPA, and who would be responsible for initiating such an analysis.  Moreover, assuming that the Court meant an analysis of “direct impacts” by the phrase “primary analysis,” it is unclear how such an analysis would not suffer from predetermination under NEPA.  After all, the intake structure would already be built and there could not be any serious consideration of viable alternatives to the project.

The central issue on appeal is whether a federal agency may postpone part of its NEPA analysis to some unspecified time in the future, despite the fact that the capacity of the project, and the ability to withdraw 24,000 af/yr, is likely a “foreseeable” impact as defined in the Council on Environmental Quality regulations.

“Whenever”: EPA’s Continuing Power to Withdraw Dredge-and-Fill Permits

Posted on May 1, 2013 by Lisa Heinzerling

On April 23, a panel of the D.C. Circuit unanimously held in Mingo Logan Coal Co. v. EPA that the Clean Water Act gives EPA the authority to withdraw permits previously granted under section 404 of the Act.  The case emerged from EPA’s determination that the discharge of mining waste from the Spruce No. 1 mine in West Virginia into certain streams and tributaries would have an unacceptable adverse effect on environmental resources.  Based on this determination, EPA withdrew the Army Corps of Engineers’ prior specification of these streams and tributaries as disposal sites for the waste from mountaintop removal.

Several features of the case are striking.  First, the decision has obvious – and obviously important – implications for the ongoing debate over mountaintop removal and its irredeemable environmental impacts.  No longer can the argument be made that a permit, once issued, gives the permittee the power, in perpetuity, to blast the tops off of mountains and dump them into streams.

Second, the decision rested, for the most part, on a single word: “whenever.”  The Clean Water Act states that the Administrator of the EPA may withdraw the specification of a disposal site for dredge-and-fill material “whenever” she determines that it will have an “unacceptable adverse impact” on certain environmental resources.  The court took Congress, literally, at its word, and held that “whenever” means whenever – that is, even if EPA finds unacceptable adverse impacts after a permit has issued, the agency has the authority to pull the permit.

Third, as if to make certain its own holding is unambiguous, too, the court five times stated that the Clean Water Act unambiguously authorizes EPA to withdraw permits after they are issued.  EPA’s current interpretation of the Act is thus not changeable by a future administration.

Should permittees fear that “whenever” will become wherever?  It is worth remembering that EPA’s decision on the Spruce No. 1 mine was the first time EPA had – ever! – withdrawn a previously issued permit, in the 40-year history of the Clean Water Act.  Whether EPA will be emboldened by this decision, or will continue to mostly allow existing permits to stand, remains to be seen.

Another Temporary Truce in the Arkansas/Oklahoma Water Wars

Posted on April 25, 2013 by Allan Gates

After decades of sparring over nutrient loading in the Illinois River, and following several short term extensions of a previous truce, Arkansas and Oklahoma recently executed an agreement, the “Second Statement of Joint Principles and Actions”, that establishes a procedural framework for attempting to resolve their long running trans-boundary water quality dispute.

The Illinois River heads up in a rapidly developing section of Northwest Arkansas and flows west into a comparatively undeveloped portion of Northeast Oklahoma, where the river is designated by state statute as a scenic river.  For more than two decades Oklahoma has worked to reduce the amount of nutrients, and particularly phosphorus, discharged into the Illinois River watershed.  In 2002 Oklahoma adopted a numeric water quality criterion for Total Phosphorus that many considered impossible to attain in a developed watershed.  In an effort to avoid litigation over the validity of the numeric criterion, Arkansas and Oklahoma entered into an agreement in 2003 known as the Statement of Joint Principles and Actions.  This agreement provided, among other things, that:  (i) Oklahoma would postpone for 10 years the date on which the numeric criterion would be fully effective; (ii) Arkansas sources would take a number of steps to reduce phosphorus discharges; and (iii) Oklahoma would review the existing numeric criterion, with an opportunity for Arkansas representatives to participate, before the end of the ten year period to determine whether the numeric criterion should be changed.

The ten year truce created by the Statement of Joint Principles and Actions was originally scheduled to expire in July 2012.  During the ten year period Arkansas sources made significant progress in reducing the amount of phosphorus they discharged in the watershed.  As a result, phosphorus levels in the Illinois River began to decline and most observers agreed that conditions in the river were significantly improved.  Towards the end of the ten year period Oklahoma undertook a review, with full participation by representatives of Arkansas, EPA, and the Cherokee Nation.  The review ended in a sharply divided report, with Oklahoma representatives stating that no change in the numeric phosphorus criterion was warranted and Arkansas representative stating that significant change was necessary.

As the end of the ten year truce approached, officials from Arkansas and Oklahoma began negotiations once again on how to avoid litigation.  Focus on the potential for costly litigation was sharpened by the fact that EPA had publicly commenced work on a Phosphorus TMDL for the entire Illinois River watershed.  After several agreements on short term extensions of the July 2012 deadline, Arkansas and Oklahoma reached agreement in February 2013 on a Second Statement of Joint Principles and Actions.  This new agreement provides, among other things, that Arkansas and Oklahoma will fund a joint three year water quality study using EPA protocols to determine the threshold Total Phosphorus levels at which shifts in algal species or biomass production occur that result in undesirable aesthetic or water quality conditions.  Oklahoma and Arkansas agree in the Second Statement to be bound by the findings of the joint study, and Oklahoma agrees to adopt a new numeric criterion for Total Phosphorus in the Illinois River if the results of the joint study are significantly different from the existing criterion (i.e., more than -0.010 mg/l or +0.010 mg/l than the existing .037 mg/l criterion).  During the term of the Second Statement of Joint Principles and Actions, both states agree not to initiate or maintain litigation contrary to the terms of the agreement, and the statute of limitations on all claims is extended.  Oklahoma agrees that it will postpone for the duration of the new agreement the date on which its existing, hotly disputed numeric criterion is to be fully effective.

EPA was not a party to the negotiation of the new agreement and it has not announced any formal position on its effect.  It is not clear what impact the new agreement will have on EPA’s work to develop a TMDL for Phosphorus in the Illinois River watershed or on the various NPDES permits for POTWs on the Illinois River that are currently pending review in EPA Region 6.

Can We Please Talk About Outcomes For A Change???

Posted on April 22, 2013 by Rick Glick

I get it that environmental groups place strict compliance with regulatory controls at a premium.  After all, the standards are designed to be protective of the resource, and they are The Law, which must be obeyed. 

But I sometimes find it dismaying when people conflate immediate, measured, and guaranteed compliance with ecological outcomes.  They are not the same.  I have been in settlement discussions in which I propose that we first come to agreement on what’s best for the resource, and then figure out how to make that fit into the regulatory framework, but have had few takers.  The number is the number is the number.

A recent example arises in the context of water quality trading.  EPA policy promotes alternative means of achieving regulatory compliance that promise environmental results at least as good as conventional, engineered approaches, and at lower cost.  For example, if discharge water temperatures are the problem, riparian shade tree planting could substitute for mechanical chillers.  Of course, measureable cooling would be deferred by many years while the trees grow, but the ancillary benefits of watershed restoration to habitat and ecosystem function are intuitive and compelling.  This approach is supported by academia, government, and many in the NGO community.  Some though are skeptical.

The City of Medford, Oregon, is embarking on a riparian vegetation approach to reduce temperatures at its wastewater treatment outfall, in full cooperation with Oregon DEQ.  A regional NGO, Northwest Environmental Advocates, however, has raised objections.  In a letter dated March 15, 2013, NEA asks EPA to examine DEQ’s implementation of the water quality trading policy with reference to Medford.  NEA questions allowance of “credits” for watershed restoration work that upstream nonpoint sources would have to do anyway, and asserts that no credits should be allowed until the new trees actually yield shade.

The problem is that the upstream nonpoint sources are not obligated by law to restore riparian vegetation; they just need to adopt best management practices to avoid further degradation.  More to the point, restoration of the watershed will simply not occur without the funding provided by a point source with a regulatory problem to solve, such as Medford.  By denying the City credits, the incentive to use a watershed approach disappears.  Similarly, if no credits are awarded until the trees are grown, funds that could go toward watershed restoration will be diverted to engineered controls on temperature.  As DEQ Director Dick Pedersen so aptly puts it, “[i]f we ever build a chiller at the expense of ecosystems, we’ve failed.”