A federal appellate court may have complicated EPA and industry efforts to pull back the agency's landmark stormwater discharge limit for construction sites, leaving the door open to some states implementing EPA's standard in their permits despite the agency having acknowledged flaws in the limit. In other stormwater news, a new stakeholder coalition is calling on EPA to develop guidelines for how local governments can establish fee programs to defray stormwater management costs.

Pending litigation could test EPA's landmark guidance that opens the door to regulators requiring discharge permits for a broader universe of animal feedlots. Meanwhile, EPA is poised to approve Ohio's effort to allow its agriculture agency, rather than its environmental agency, to permit feedlots – a move that may set a precedent for other states.

EPA is suggesting that it may further delay a final decision on its landmark plan to retroactively veto an already-issued water permit for a West Virginia mining project, though a federal judge is asking the agency to justify its plan.

In This Issue . . .

Court Rejects EPA Bid To Vacate Strict Construction Discharge Water Limit
An appeals court has rejected EPA and industry requests to vacate the agency's remanded strict numeric discharge limit for the construction industry while the agency revises the limit, a move that could put states in a difficult situation of implementing a limit in general permits that EPA has acknowledged is based on a flawed analysis.

Key Alliance Urges EPA To Craft Guide For Imposing Stormwater Fees
A group of experts from a diverse array of backgrounds is calling on EPA to develop guidelines for how states and municipalities can establish fees for impervious surfaces to defray the cost of managing stormwater runoff amid growing efforts by the agency to clamp down on harmful runoff.

Oral Arguments On CAFO Rule Could Provide Test Of New EPA Guidance
Upcoming oral arguments in litigation challenging EPA's 2008 Clean Water Act (CWA) permitting rule for concentrated animal feeding operations (CAFOs) could provide industry an opening to also test new agency guidance on CAFOs, which EPA developed as part of a settlement with environmentalists who were also challenging the 2008 rule.

EPA Nearing Approval Of Novel Ohio Farm Agency CAFO Permitting Power
EPA is nearing an expected approval of Ohio's novel bid to shift delegated Clean Water Act (CWA) permitting authority for some farms from the state's environment department to its agriculture agency, with EPA telling stakeholders it is powerless to stop the move despite activists' concerns about it leading to weaker permits for agriculture.

EPA Criticizes States' Chesapeake Bay Cleanup Plans, Releases TMDL
EPA is criticizing draft plans submitted by Chesapeake Bay states on how they will meet strict new federal cleanup goals, charging most of the plans are short on details and long on empty promises – a harsh assessment by EPA in an escalating fight between states and the agency over how to make often-costly cuts in nutrient and sediment pollution.

EPA Sees Further Delay On Landmark Veto Decision For Mountaintop Mine
EPA's landmark decision on whether to veto an already-issued permit for a controversial mountaintop mine in West Virginia likely will be delayed until next year, according to recently filed agency briefs on the issue, drawing new industry complaints that the agency is unnecessarily obstructing the permit and delaying potential court review.

Developers Appeal Ruling That Sidesteps CWA Permit Cost Concerns
Developers are appealing a recent district court ruling that dismisses their concerns over Clean Water Act (CWA) permitting costs and says the U.S. Army Corps of Engineers must primarily focus its CWA section 404 permit reviews on how construction could affect wetlands and water quality.

New Studies Underscore Competing Pressures On EPA Over Gas Fracking
Two new studies are highlighting the competing pressures EPA faces as it prepares a study on the natural gas extraction practice known as hydraulic fracturing, or fracking, with industry touting a recent study that warns that EPA's study could end the booming industry while activists are warning of the severe health effects of chemicals used in the practice.

Court Rejects EPA Bid To Vacate Strict Construction Discharge Water Limit

An appeals court has rejected EPA and industry requests to vacate the agency's remanded strict numeric discharge limit for the construction industry while the agency revises the limit, a move that could put states in a difficult situation of implementing a limit in general permits that EPA has acknowledged is based on a flawed analysis.

The U.S. Court of Appeals for the 7th Circuit in a Sept. 20 order clarified that it was remanding the agency's effluent limitation guideline (ELG) for turbidity -- a measure of water's clarity -- for construction stormwater, but rejected EPA's request to vacate the limit. However, the court noted that "EPA may make any changes to the limit it deems appropriate, as authorized by law."

The order could put a number of states that are planning to include the limit in revised general permits in a difficult situation because they may feel bound to follow the limit even though EPA has acknowledged that it is flawed, one industry source says. State permits could be vulnerable to the same legal arguments made against EPA's limit, according to the source, who said EPA should resolve the situation by quickly withdrawing the limit.

However, a source with the Washington State Department of Ecology says the state likely will not include the limit in its permit as planned because it would be difficult to stand by the data the limit is based on when EPA itself has questioned it.

The court's decision is the latest in a series of events stemming from the agency's December 1 issuance of its ELG for runoff from construction sites. The rule phases in a 280 nephelometric turbidity units (NTU) limit and requires "passive" filtering technologies to meet the limit, among other stormwater requirements.

Industry filed suit Dec. 28 in National Association of Home Builders (NAHB), et al. v. EPA, challenging several aspects of the agency's ELG for construction sites, including the turbidity limit, which industry argued was illegally based on a measurement of pollution, not a pollutant itself, and based on an incorrect analysis of the data.

The Small Business Administration's Office of Advocacy also filed an April 20 petition asking the agency to soften its stormwater discharge limits, arguing that the limits are too low, are based on faulty data and would cost more than 10 times as much as EPA estimates.

Then, EPA in an Aug. 13 filing asked for a remand and vacatur of the turbidity limit, saying it "improperly interpreted the data" underlying the strict turbidity limit. The court in an Aug. 24 order granted the remand but was silent in the vacatur. Industry filed a Sept. 9 motion asking for clarification about whether the limit was vacated, and the court in a Sept. 20 order said that it was not, but that EPA was free to revise it.

Difficult Situation

The industry attorney says that the court's decision could create a difficult situation for states because the turbidity limit is still on the books and states may feel legally obligated to promulgate that limit. However, states that issue general permits with the 280 NTU limit would be subject to the same arguments that the limit is arbitrary and capricious that industry made in the suit against EPA's ELG, the source says.

EPA has indicated it plans to reach out to states to tell them that they are revising ELG, the source says. But since EPA sought a vacatur instead of defending the rule, EPA should quickly initiate a rulemaking to withdraw the turbidity limit, the source adds. "They admitted they are wrong so it would be odd for them not to want to clarify this," the source says.

But industry in its request for clarification from the court said a rulemaking to remove the limit could be "lengthy and unpredictable, and Petitioners would have no reassurance that EPA ultimately could achieve the administrative removal of the 280 NTU numeric limit before it becomes applicable to the regulated construction industry."

An EPA spokesperson says in an e-mail that the 280 NTU limit is still legally in effect since the court chose not to vacate it. But the spokesperson added, “EPA is acutely aware of the need to deal with the current numeric limit and is actively considering several options.  EPA hopes to soon communicate next steps to our stakeholders, including states and affected industry.”

A number of states, including Maryland, Washington and Oregon, have proposed to revise their general permits for the construction industry and include EPA's 280 NTU limit for turbidity. But states are facing opposition in light of EPA's decision to reconsider the limit.

For example, the NAHB filed comments on the Washington Department of Ecology's proposed revisions of its general permit, which planned to incorporate the 280 NTU limit. In comments filed Sept. 10 -- before the court's decision not to vacate the limit -- the group said that the state should remove the limit from the permit and warned, "Indeed, if EPA is unable to defend the adoption of the 280 NTU, absent of any new data or analysis, the Washington Department of Ecology is similarly limited."

The Building Industry Association of Washington and the City of Longview both asked the department to withdraw the limit and King County said it is "presuming that the 280 NTU language will be removed, and the turbidity language will revert back to the language in the current 2005 permit."

However, the Puget Soundkeeper Alliance in Sept. 10 comments backed the 280 NTU turbidity limit and urged the department to apply it to all permittees instead of just those that have sites that are 10 acres or larger.

The source with the Washington Department of Ecology says the state will likely not include the 280 NTU turbidity limit, though the source notes the issue is still in flux because of the court decision and because the permit is not yet final. "When EPA questions its own analysis, it makes it very hard to use the data resulting from its analysis and stand by it," the source says. The department has been in regular contact with EPA Region 10 about the issue, according to the source, who says the final general permit will be published on Dec. 16 and will go into effect in January.

The Oregon Department of Environmental Quality took comment on its proposed general permit until Sept. 28 and the existing permit expires Nov. 30. The Maryland Department of Environment took comment on its proposed general permit until Aug. 2. -- Kate Winston

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Key Alliance Urges EPA To Craft Guide For Imposing Stormwater Fees

A group of experts from a diverse array of backgrounds is calling on EPA to develop guidelines for how states and municipalities can establish fees for impervious surfaces to defray the cost of managing stormwater runoff amid growing efforts by the agency to clamp down on harmful runoff.

The Sept. 15 report, "Charting New Waters: A Call to Action to Address U.S. Freshwater Challenges," was drafted over the course of two years by a wide array of stakeholders organized by the Johnson Foundation, culminating in a summit in June that included representatives from the manufacturing, technology, agriculture, water utility and other industries, as well as representatives from the environmental community and local government.

EPA deputy water chief Nancy Stoner, along with White House environment chief Nancy Sutley, also attended the summit and helped inform the development of the report.

Among the report's many recommendations are a call for EPA to develop a guidance consistent with recommendations laid out by the National Academy of Science's National Research Council in their 2009 report "Urban Stormwater Management in the United States," which calls for guidance to inform local governments on how to establish fees for impervious surfaces in order to fund the cost of stormwater management and improve water quality through stormwater management practices.

"The EPA needs to also create the right conditions for the testing and evaluation of new pollution control technologies and strategies in order to accelerate innovation and reduce financial, environmental and other risks to investors and communities," the report reads. "For example, the EPA could develop guidelines about how to design and calculate site-based impervious area fees to facilitate broader implementation of this cutting-edge approach, which is already driving innovative stormwater solutions in cities like Philadelphia and Washington, DC."

Philadelphia and Washington, DC, already charge fees for stormwater runoff management and have in place a variety of "green infrastructure" incentives to encourage property owners to reduce the amount of impervious surface in their jurisdictions in order to reduce the volume of water that has to be collected and treated. Philadelphia Mayor Michael Nutter explained at a Sept. 15 press event unveiling the Johnson Foundation report that the city's "new approach encourages landowners to manage their own stormwater, or pay the city to take care of it."

But stormwater fees have been the source of some controversy in recent months, after the Government Accountability Office sent a letter to the DC Water and Sewer Authority (DC Water) informing them that they viewed the city's stormwater fee as a tax, and therefore the city would be unable to levy those fees on federal buildings within DC Water's service area because of the federal government's sovereign immunity from taxation by local government.

That move spurred Sen. Ben Cardin (D-MD), who chairs the water subcommittee of the Senate Environment & Public Works Committee, to draft S. 3481, which amends the Clean Water Act to explicitly require federal agencies not to consider stormwater fees as taxes subject to sovereign immunity. The Senate environment committee June 30 approved the bill with bipartisan support but it is not clear whether it will be debated on the Senate floor this Congress.

In addition to calling for EPA guidance, the report also urges federal agencies to better coordinate their water quality and water quantity management authorities, and calls for the creation of a U.S. Freshwater Resources Commission that would, among other things, "develop an integrated characterization of the water quality and quantity challenges facing the nation to create a platform for its examination" of water resources.

The report also calls for EPA to promote "integrated watershed-based management strategies and partnerships" and to "seek opportunities to expand the application of successful cross-jurisdictional governance models," echoing an ongoing effort by EPA in its development of an interstate total maximum daily load for nutrient pollution in the Chesapeake Bay watershed. In order to facilitate such partnerships, the report says, EPA should "increase financial and technical assistance to states" to help them implement the standards laid out in the Clean Water Act.

The report also calls for the Department of Agriculture (USDA) to improve its implementation of the Food, Conservation and Energy title of the 2008 farm bill, which includes funds for reducing nonpoint nutrient runoff from farms. "We recommend that the USDA make adjustments to its rulemaking and implementation of the 2008 Farm Bill Conservation Title programs to increase their effectiveness in catalyzing environmental stewardship and watershed-scale environmental outcomes," the report says.

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Oral Arguments On CAFO Rule Could Provide Test Of New EPA Guidance

Recent oral arguments in litigation challenging EPA's 2008 Clean Water Act (CWA) permitting rule for concentrated animal feeding operations (CAFOs) could provide industry an opening to also test new agency guidance on CAFOs, which EPA developed as part of a settlement with environmentalists who were also challenging the 2008 rule.

Farm industry groups used oral arguments Oct. 5 in the U.S. Court of Appeals in the 5th Circuit in National Pork Producers Council, et al. v. EPA, et al., where they will argue that EPA is overstepping its statutory boundaries by requiring CAFO operators to prove that they do not discharge in order to avoid permit requirements. When CAFOs must apply for a water act permit is a key point of contention between industry, environmentalists, and the agency, with a long history of litigation over what exactly the CWA requires.

The pending case is part of a consolidation of challenges where several farm industry groups as well as environmentalists sued EPA over its 2008 CAFO rule. Earlier this year, EPA settled part of the suit with environmentalists, crafting a draft guidance on when CAFOs have a "duty" to seek clean water act discharge permits, a controversial topic that industry says is moot because a federal appellate court ruled in 2005 that CAFOs have no duty to seek permits.

While the pork industry stakeholders did not have the legal opening to directly address the EPA guidance released as part of the agency's partial settlement of the case, a source following the case says the poultry industry could have legal grounds to discuss the guidance.

Industry in oral arguments is generally looking for the 5th Circuit to reaffirm what the 2nd and 8th circuits have done and find there is no duty to apply for a CWA permit, the source says. "EPA has illegally shifted the burden of proof" to the CAFOs to show that they do not discharge, the source says. "EPA has adopted a position of guilty until you prove yourself innocent."

EPA in its briefs has argued that the livestock industry's argument in the case is essentially an attempt to avoid regulation. "The alternative regulatory regime envisioned by the petitioners is one in which CAFOs (and, presumably, any other point sources) avoid the scrutiny of the permit application process, avoid effluent limitations, avoid public review and participation, and thereby essentially avoid regulation of pollutant discharges altogether," EPA says.

There are several consolidated cases in the upcoming 5th Circuit arguments, and separate industries have each been allotted extra time to individually respond to EPA arguments. Included in the suit are: National Pork Producers Council; American Farm Bureau Federation; Oklahoma Pork Council; United Egg Produces; North Carolina Pork Council; National Chicken Council; U.S. Poultry & Egg Association; Dairy Business Association, Inc.; and the National Milk Producers Federation

A 2003 version of EPA's rule put the onus on industry to demonstrate their facilities do not discharge or they must otherwise seek a permit. But the 2nd Circuit ruled in Waterkeeper Alliance v. EPA that such an approach exceeds EPA's statutory authority because Congress reserved EPA's permitting authority for actual discharges and the agency must show that when requiring a permit.

The 2008 rule requires CAFO owners on a case-by-case basis to determine whether a CAFO discharges or proposes to discharge -- the two conditions that require a permit.

EPA released draft guidance May 28 as part of a May 25 settlement with environmentalists. Industry sources say the guidance was finalized without industry consultation, a move to which they object. The guidance is intended to clarify what CAFO operators must do to in order to be exempt from CWA permitting requirements, hinging on a footnote in the Waterkeeper ruling that EPA and environmentalists say opened the door to the agency creating a presumption that large CAFOs "actually" discharge and therefore must seek permits.

But even before EPA issued the guidance, the agency launched a series of inspections and enforcement actions against CAFOs in key agricultural regions as a way to increase the number of facilities subject to CWA permit requirements. While CAFOs must currently decide individually whether they will discharge and request a permit from EPA, an agency finding of discharges means the CAFO must apply for a CWA permit.

According to the guidance, the "owner or operator of a CAFO should make an objective assessment of the operation to determine whether the CAFO will discharge based on a site-specific evaluation of the actual design, construction, operation, and maintenance of the facility." Considerations include climate, hydrology, "and other characteristics beyond the operator's control that affect whether the CAFO will discharge given the design, construction, operation, or maintenance of the CAFO."

The guidance lays out what CAFOs should look to in an "objective assessment," including proximity of the farm to waters of the United States -- which are subject to CWA requirements -- and whether they are upslope; climatic conditions, such as precipitation; discharge history; the type of waste storage system; how mortalities are managed; drainage of the production area; and other considerations.

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EPA Nearing Approval Of Novel Ohio Farm Agency CAFO Permitting Power

EPA is nearing an expected approval of Ohio's novel bid to shift delegated Clean Water Act (CWA) permitting authority for some farms from the state's environment department to its agriculture agency, with EPA telling stakeholders it is powerless to stop the move despite activists' concerns about it leading to weaker permits for agriculture.

The Ohio Department of Agriculture (ODA) Sept. 15 submitted to EPA a list of enacted and proposed changes to state regulations to address concerns EPA had previously raised in proposing to approve the permitting shift to ODA from the Ohio Environmental Protection Agency (OEPA), and to enact requirements from EPA's 2008 revision to its federal CAFO rules.

Activists oppose the move because they believe ODA cannot fulfill its mission of promoting the state's agriculture industry while protecting the environment with adequate CWA National Pollutant Discharge Elimination System (NPDES) permits. Critics of the move also fear it will spur similar requests from other states.

But an EPA source says the agency is likely to sign off on Ohio's request once its completes informal consultations with the state over the proposed changes to ensure they meet CWA requirements. Environmentalists say that EPA officials have told them the agency lacks CWA authority to block the move, because nothing in the law stipulates that a state with delegated authority to implement the water law must give that power to its environment department rather than another agency.

Officials from EPA Region V -- covering Ohio and other Midwest states -- are informally consulting with ODA over the proposed state rule changes. Once that is complete, the state will need 90 days to go through a formal public rulemaking process implement the changes, after which EPA appears likely to issue its approval.

"In the end, our decisions are based on enacted statutes and rules, so we'll certainly need to see what comes out the other end of the state process," the EPA source says, noting that the consultations should smooth approval of the shift because the state will know what rule changes are necessary before it makes them. "As a general matter, it's a negative outcome for a state to go through a rulemaking process . . . only to have the EPA say we don't like it."

When EPA finalizes its decision, Ohio will become the first state where an agriculture agency -- rather than an environment department -- has sole authority to issue NPDES permits for concentrated animal feeding operations (CAFOs). The shift also will be unique in that it will be the first time a state shifts authority over NPDES permitting from one agency to another after the program has been up and running at the state level.

The EPA source says there is no deadline to complete the informal consultation process and could not predict how long it would take. Ohio first requested shifting NPDES authority in 2006, and EPA initially proposed approving it in 2008 but then requested additional changes to incorporate a subsequent rulemaking EPA issued in 2008 making changes to its CAFO permit requirements that was completed after approval was first proposed.

Necessary Expertise

State environmental groups have urged EPA not to approve the shift, arguing that ODA does not have necessary expertise to run a NPDES program and that excessive nutrient pollution in state waters that studies have attributed to runoff from CAFOs shows that authority over the program should stay with environmental regulators.

"Segmenting and outsourcing the nation's comprehensive water permitting program, to agencies other than those whose mission is environmental protection, is a questionable idea under any circumstances, but doing so now in the face of growing water quality problems makes this idea incomprehensible," more than a dozen local environmentalists argued in a Feb. 5 letter sent to EPA Administrator Lisa Jackson.

"Recent action in Indiana and Florida to abate non-point source pollution and regulate nutrient loading to waters suggests that these issues can be effectively addressed through agencies which possess the expertise to effectively administer water quality programming. The Ohio EPA is the last vestige of responsible, science-based regulatory oversight for the water quality impacts of CAFOs in Ohio," the letter says.

But activists acknowledge EPA may be powerless to stop the shift. "They may be right. I don't think there's anything in the law that says" that CWA programs must be delegated to an environment agency, one environmentalist says. "The state of Ohio could assign the NPDES program to their Department of Mental Health if they wanted to, as long as the Department of Mental Health did all the things you're supposed to do for a Clean Water Act program."

Even so, environmentalists argue that ODA's mission to promote the state's agriculture industry conflicts with the CWA's focus on protecting water quality, even if there is nothing in the law that would prevent it from being granted delegated authority. "If the . . . agriculture department has said all the right things and passes all the right regulations and has the resources to actually do what they say they're going to do, well then, yeah, it's probably going to be a tough case for EPA not to go along with it," the environmentalist says. "On the other hand, given that the fox is applying to guard the chicken house, I do think you have to look at that more closely than if Mother Theresa were applying for the job."

Expected approval of the Ohio shift -- the timing of which remains unclear -- comes as a blow to environmentalists who thought they had made an effective case that giving ODA authority over protecting water quality would fundamentally conflict with its broader mission. "Frankly the passage of time [since EPA's initial proposal to approve the shift] made us very hopeful that there would be a denial," one Ohio activist says.

A source with the Ohio chapter of the Sierra Club says the organization has collected public records of ODA enforcement actions showing that the agency collected only $30,000 in fines between 2002 and 2009 for violations of state regulations it enforces for CAFOs, predicting that enforcement of CWA violations would be similarly lax.

Another Ohio activist claims that ODA typically allows CAFOs to apply more manure to the ground than should be allowed in state regulations and does not respond nearly as quickly to citizen complaints as OEPA does. "[T]hey say one thing and they do another, and basically the only ones in Ohio that have done anything for us are the Ohio EPA."

An ODA source defends the department's record, noting that the ODA already has delegated authority from EPA to implement various pesticide regulations. The source also says that ODA performs regular semi-annual inspections of CAFOs, compared to OEPA, which only performs an inspection following a complaint, and already enforces state regulations that in some areas exceed the CWA, such as groundwater monitoring requirements. Furthermore, the source notes, "We fully expect to be carefully monitored by US EPA if they do approve authorization" of the NPDES program.

Although environmentalists fear that EPA approval of the Ohio request will prompt other states to file similar requests with the agency, sources say those fears might be unfounded. Oregon and Washington state contemplated similar efforts several years ago, but the agriculture and environment departments in those states ultimately abandoned plans to shift delegated authority over NPDES permits, according to sources in both states.

Instead, the agencies negotiated agreements between themselves that gave the agriculture departments a role in permitting decisions while leaving final authority to issue the permits with the environment departments, the sources say. "We have not found a reason why it would be effective or important for us to do that, other than a lot of workload with a little bit of return," an Oregon agriculture department source says.

One industry source also questions the wisdom of expanding such shifts, noting that local farmers tend to enjoy friendly, cooperative relationships with their local agriculture departments that could become more adversarial if those departments take on additional permitting and enforcement responsibilities. -- Nick Juliano

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EPA Criticizes States' Chesapeake Bay Cleanup Plans, Releases TMDL

EPA is criticizing draft plans submitted by Chesapeake Bay states on how they will meet strict new federal cleanup goals, charging most of the plans are short on details and long on empty promises – a harsh assessment by EPA in an escalating fight between states and the agency over how to make often-costly cuts in nutrient and sediment pollution.

At the same time, EPA Sept. 24 released its landmark plan, or total maximum daily load (TMDL), for limiting nutrients and sediment to the Chesapeake Bay. The draft TMDL for the region -- including six states and the District of Columbia -- is an effort to advance the Obama administration’s initiative to clean up the long-polluted Chesapeake Bay. The initiative is expected to be a national guide for the agency, which, like states, has struggled make gains cleaning up nitrogen and phosphorus pollution, which causes hypoxic “dead zones” and chokes out aquatic life.

The agency released the draft TMDL after a Sept. 22 Federal Register notice detailed plans to hold a series of public meetings and take comment on the measure.

EPA plans to finalize the TMDL — which contains load and wasteload allocations setting pollution budgets for different sources in the various watersheds — by December 2010, along with state-crafted Watershed Implementation Plans (WIPs) for implementing control requirements.

Assessments of the six states and District of Columbia's draft WIPs, submitted in early September, accompany the TMDL. The WIPs are plans describing how the states plan to meet strict watershed pollution limits for nitrogen, phosphorus and sediment. But the agency says the plans are largely deficient, lacking details and rely on voluntary programs with no plans to expand or make deeper cuts to nutrients.

One environmentalist, Rena Steinzor, president of the Center for Progressive Reform, lauded EPA's efforts, noting that the agency “seems to mean business.” “The message EPA Administrator Lisa Jackson is clearly intending to deliver to the states should be clear: there’s a new sheriff in town, and she means business,” Steinzor says in a Sept. 24 blog post.

EPA and industry – and increasingly states – are at odds over where it is necessary to implement costly pollution cuts and who should pay for them. The concept of implementation plans prompted controversy when first touted by the Clinton administration, drawing strong opposition from state officials who charged the requirements were too rigid, and that it is impossible to predict environmental and economic conditions in the future, making it difficult to come up with the implementation measures.

Legally, EPA can require that a state meet a TMDL, but the agency does not have statutory authority to require the WIPs.

Taking Hard Line With States

But EPA is taking a hard line with states, saying that they need to be much more specific and commit to much stronger plans if they are to make the pollution reductions demanded by the agency's TMDL. The agency has charged Virginia, Pennsylvania, New York, Delaware and West Virginia with having “serious deficiencies” in their plans, including short-sighted stormwater plans, limited cuts in pollution from concentrated animal feeding operations (CAFOs), and plans that simply do not meet EPA's targets for pollution reduction. EPA says Maryland and the District of Columbia's plans have “some minor deficiencies.”

EPA Region III Administrator Shawn Garvin says in a Sept. 24 statement, “We are hopeful that the jurisdictions will provide a greater level of assurance in their final plans, so that EPA can reduce the federal measures in the final TMDL. EPA strongly prefers to achieve the necessary pollution reductions through the state plans rather than federal actions because the states have more flexibility and can achieve reductions from a wider range of sources than EPA.”

EPA's efforts mire the agency in an escalating fight, as industry critics argue that the agency may lack legal authority to craft the TMDL and state officials in Virginia and elsewhere charge the agency may lack legal authority to require states to implement actions to meet the TMDL.

And while some environmentalists say pending bipartisan legislation crafted by Sen. Benjamin Cardin (D-MD) is urgently needed to codify EPA's authority on the Bay cleanup effort, other environmentalists oppose the bill, saying that if passed, it will set a bad precedent undermining the Clean Water Act (CWA).

Under a deal with GOP members, Cardin's legislation would prohibit EPA from imposing water quality requirements on the agricultural industry beyond those included by a state in its WIP.

Agricultural sources of water pollution are key to EPA's complaints about several of the states' plans. In Virginia, the state “removed all regulatory drivers that could compel increased implementation of priority practices,” the report says. The plan has ambitious goals, EPA's report says, that could be hard to meet without a regulatory driver. And the state does not have plans to do inspections to prove that farms have actually implemented best management practices for which they have been paid.

In West Virginia, EPA says that the state is relying on existing conservation programs with no indication that they will do anything but increase conservation tillage. And they note the state's CAFO plan has not been approved by EPA, and suggest more detail on manure transport and better coordination with poultry farmers.

EPA says Pennsylvania “does not have an acceptable coordinated and comprehensive” animal feeding operation compliance and enforcement strategy, and suggests that the state expand its plan to smaller dairy farms and engage more poultry operators.

EPA is also demanding stringent stormwater reductions in several states, including use of Residual Designation Authority (RDA). RDA – the use of CWA authority to require previously unpermitted private entities to get stormwater permits and limit runoff of nutrient and sediment pollution – has come into use only recently, by EPA Region I in the northeast. EPA suggests its use in Virginia, West Virginia, New York and Maryland.

In several states, EPA says that they need to have a clear understanding as to how they will enforce stormwater regulations and require accountability from permitted entities.

Meanwhile, the agency says Delaware's plan “totally abdicates to state and federal [stormwater] rulemakings, and the scope, objectives and timing of the rulemaking isn't even clear. Is it just erosion and sediment control or is it more broadly municipal stormwater?” the plan asks. In Delaware and other states, EPA demands a retrofit program to cut stormwater discharges.

And while they may be difficult to achieve, EPA is making a new push for states to deal with the waste of septic systems and the likely nutrient runoff they require.

Several states in their WIPs complained that they would not be able to achieve EPA's pollution cut goals without additional funding, but in its reviews of the plans, EPA repeatedly charges the states to show how they will overcome their funding problems.

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EPA Sees Further Delay On Landmark Veto Decision For Mountaintop Mine

EPA's landmark decision on whether to veto an already-issued permit for a controversial mountaintop mine in West Virginia likely will be delayed until next year, according to recently filed agency briefs on the issue, drawing new industry complaints that the agency is unnecessarily obstructing the permit and delaying potential court review.

The agency is also refusing to release a regional administrator's draft recommendations for the permit, but a federal judge Oct. 4 agreed with industry concerns and ordered the agency to file a brief by Oct. 8 justifying its decision not to share the recommended determination with anyone else.

At issue is the Spruce No. 1 mine in Logan County, WV. The Army Corps of Engineers in 2007 issued a “dredge-and-fill” permit for the mine, under section 404 of the Clean Water Act (CWA), but EPA earlier this year proposed to veto that permit, invoking its veto authority for the first time to address an already-issued permit, as part of the Obama administration's broader suite of efforts to limit the environmental impact of surface coal mining in Appalachia. Environmentalists sued the Corps over the permit, and under an agreement worked out in litigation, Mingo Logan Coal Company, the company that owns the mine, has agreed to limit its activities at the Spruce site while the lawsuit proceeds.

The case, Ohio Valley Environmental Coalition (OVEC) et al. v. U.S. Army Corps of Engineers et al., in the U.S. District Court for the Southern District of West Virginia, has been on hold while EPA finishes the veto proceedings. With the current stay in the case scheduled to expire Oct. 22, the government is telling the court it expects EPA to spend nearly four more months deliberating before finalizing the veto under its CWA section 404(c) authority and predicts it will again ask the court to stay the case until then.

After the Oct. 4 status conference, U.S. District Judge Robert C. Chambers ordered DOJ to submit its motion to keep the case on hold by Oct. 15 and for Mingo Logan to respond by Oct. 22. Chambers also extended the existing stay beyond Oct. 22, subject to further order.

According to briefs filed on EPA's behalf by the Justice Department (DOJ), Region III sent a recommended determination to EPA headquarters Sept. 24, triggering a 60-day clock for a decision. But according to an Oct. 4 status update DOJ filed in OVEC, such deadlines are “often extended for an additional 60 day period, to a total of 120 days."

The update also notes that regulators likely will ask for another stay in the proceedings, but notes that because of further potential deliberations between EPA, the Corps and the mining company as well as EPA's ability to extend decision deadlines for cause, “it is difficult to predict with any certainty the exact date when the 404(c) process may be concluded.”

EPA Region III Administrator Shawn Garvin, whose territory includes West Virginia, Sept. 24 sent to EPA headquarters his recommended final determination on the Spruce veto but the agency is refusing to release it publicly, citing exceptions to the Freedom of Information Act (FOIA) that allows agencies to keep internal deliberations secret.

But Chambers, in his Oct. 4 order, required EPA to file a brief by Oct. 8 justifying its decision not to share the recommended determination with anyone else. A source familiar with the conference says the judge sounded skeptical of EPA's decision to withhold the recommendation.

Chambers order appeared to respond to concerns raised by Mingo in its Oct. 4 brief charging that EPA is misapplying the FOIA exception and urged the court to at least impose further limits on any additional stays it may grant in the case.

The company says the court should not stay the case beyond Nov. 24 to prevent EPA from further delaying a decision on the veto. The company also says the court should order EPA to hand over a copy of Garvin's recommended determination because “there is no basis either in this action or in the Freedom of Information Act for withholding its disclosure, and only early disclosure will allow the parties to engage in meaningful consultation.”

Mingo Logan says EPA is misapplying a FOIA exemption to avoid releasing Garvin's recommendations, because federal regulations guiding the veto process require the recommendation to become part of the final agency decision, which either affirms, modifies or rescinds the recommendation rather than being composed from scratch. “The Regional recommendation is thereby not an internal memorandum reflecting the personal views of agency personnel that would irreparably harm the decision-making process if revealed to the public. Instead, it is designed to be an integral part of the Administrator’s final decision, and thereby cannot qualify for the deliberative process privilege in civil litigation or Exemption 5 to a FOIA request,” the company argues (emphasis in original).

Mingo Logan also notes in its status report that “EPA currently maintains a website on which it has posted the Regional 'recommended determinations' issued in every single instance where it issued a final § 404(c) determination.”EPA did not immediately respond to a request for comment, but the agency previously told the Charleston Gazette that it was not releasing the recommendation because “it is not a final decision on this matter and it is part of the internal and deliberative process.”

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Developers Appeal Ruling That Sidesteps CWA Permit Cost Concerns

Developers are appealing a recent district court ruling that dismisses their concerns over Clean Water Act (CWA) permitting costs and says the U.S. Army Corps of Engineers must primarily focus its CWA section 404 permit reviews on how construction could affect wetlands and water quality.

The U.S. District Court for the District of Columbia ruled June 30 in Sierra Club v. Lt. Gen. Robert L. Van Antwerp, et al. that when the Corps reviews section 404 permit applications, water quality implications must be the key consideration, the Corps must avoid simply taking the word of a developer as to the extent of the proposed construction's impacts, and potential increased costs for the developer should not be a reason to avoid more stringent requirements.

Sierra Properties and other development groups that were intervenors in the case filed a notice of appeal Aug. 30 to the U.S. Court of Appeals for the D.C. Circuit, but the appellate court has not yet issued a briefing schedule.

The district court says the ruling is another in a long line of judicial rebuffs to Corps permit reviews. The court granted environmentalists' claims under the CWA and the National Environmental Policy Act (NEPA), ordering the Corps and the developer intervenors to either jointly or separately submit proposed remediation plans. But the court struck down environmentalists' Endangered Species Act claims.

An environmentalist says activists hope the case will prompt the Obama administration to review the Corps' mission of protecting wetlands through issuing dredge-and-fill permits under section 404 of the CWA.

"We think the case has rather broad significance for how the Corps and EPA should be conducting these 404 reviews," the environmentalist says. "When a developer comes in and makes representations about what is or is not economically viable . . . [it is] incumbent of the federal government to investigate that with an independent and open mind," the source says.

Nevertheless, the source says it "appears a lot of these judicial decisions fall on deaf ears." One would hope that one rather stern ruling from a federal judge after another would "at some point . . . get the attention of higher ups . . . in the Obama administration."

The court in its order said that the Corps broadly failed its duties under NEPA and the CWA, and further castigated the agency: "Unfortunately, this is a familiar course of action for the Corps when processing permit applications. As another member of this Court has stated, the Corps 'resorted to arbitrary and capricious meaning -- manipulating models and changing definitions where necessary -- to make this project seem compliant with [CWA] and [NEPA] when it is not.' The record here shows a similarly disturbing pattern," the decision from Judge Royce Lambert says.

Other judges have "repeatedly chastised the Corps for being overly deferential to the regulated parties," the environmentalist says, allowing them to dictate what kinds of remediation they can manage. "At the same time, Judge Lambert essentially told these guys that they have to do an environmental impact statement," the source says, which the "Corps never does."

The environmentalist charges that the Corps "looks at its job fundamentally as giving out permits," and suggests "perhaps it's not the agency that can ever carry out this mission." The environmentalist charges that an "effective federal oversight role should have brought the parties together to ameliorate the impacts" of the project.

At issue in the case is the plain definition of the word cost, where the court says the Corps inappropriately allowed confusion between what was reasonable cost, and what is economic for the company. The "preamble to the 404 Guidelines confirms the plain meaning of the term 'cost,'" the court says. The notice explains that "the word 'cost' was used instead of the word 'economic.' This is because the term economic might be construed to include consideration of the applicant's financial standing, or investment, or market share, a cumbersome inquiry which is not necessarily material to the objectives of the Guidelines," the ruling says.

The developers in the case have planned a 500-acre shopping center, including retail stores, banks, hotels, restaurants, theaters, offices, and multi-family housing. The development would be situated on wetlands that would need to be filled, thus requiring a CWA permit. The disagreement between the parties is in what must be done to mitigate the damage to the environment, and what is an acceptable cost for the developer to endure.

During an initial review, the DC District court ordered the Corps to re-evaluate its permit for the land, under the understanding that there had been discharges of pollutants to waters of the United States. After review, the Corps issued virtually the same permits, which the court ruled violated NEPA by failing to require an environmental impact statement "and by failing to otherwise take a 'hard look' at the project's adverse impacts and potential alternatives, and that the Corps did not require practicable alternatives to ensure no significant degradation of Cypress Creek.

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New Studies Underscore Competing Pressures On EPA Over Gas Fracking

Two new studies are highlighting the competing pressures EPA faces as it prepares a study on the natural gas extraction practice known as hydraulic fracturing, or fracking, with industry touting a recent study that warns that EPA's study could end the booming industry while activists are warning of the severe health effects of chemicals used in the practice.

The American Petroleum Institute (API) recently highlighted a Sept. 14 study, “The Global Gas Challenge,” by the consulting and financial services firm Ernst & Young, that generally predicts a rosy future for the industry but warns that EPA's pending study on fracking's environmental impacts could end the boom.

“Investments in shale gas developments may dry up if hydraulic fracturing were to be outlawed or significantly limited as a result of the findings of the [EPA] study,” Ernst & Young says.

But the Endocrine Disruption Exchange (TEDX), an advocacy group concerned about harms from chemicals, recently unveiled a new study highlighting concerns about the risks of chemicals used in fracking. “There may be long-term health effects that are not immediately recognized,” the TEDX study says.

Fracking requires drillers to inject large amounts of water and chemicals underground to crack shale deposits and release natural gas. The practice has allowed the industry to tap into previously unavailable gas reserves, significantly boosting supplies of the fuel at a time when many view it as a bridge fuel necessary to achieve a low-carbon future.

But environmentalists and others are increasingly concerned about the environmental impacts of the practice, especially since Congress, in the 2005 energy law, exempted fracking from EPA regulatory oversight.

In the face of growing concerns, Congress last year asked EPA to again study hydraulic fracturing, in lieu of passing a bill that would have restored the agency's regulatory authority. EPA is now seeking comment on the scope of the study, which is expected to be complete in 2012.

The Ernst & Young report, released at the World Energy Congress in Montreal, says the greatest concern about the growth of the domestic shale gas industry, which widely uses fracking to reach previously inaccessible gas supplies, is possible negative impacts from the pending EPA study.

“The main factor that is likely to inhibit the projected growth in shale gas production is new environmental legislation,” the report says. “A comprehensive study is currently being undertaken by [EPA] into the impact of hydraulic fracturing on water quality and public health. Investments in shale gas developments may dry up if hydraulic fracturing were to be outlawed or significantly limited as a result of the findings of the study.”

Unconventional Natural Gas Business

In a press release unveiling the report, an Ernst & Young official says the unconventional natural gas business “may have already” changed the overall supply and demand balance in North America, and perhaps globally. “It's possible we could be onto something big, but there are many uncertainties including growing environmental concerns, technology challenges, water availability and land issues,” the official says.

Among those raising concerns about the health and environmental risks of fracking is TEDX, which Sept. 21 released its own study of the chemicals used in fracking. The study, partly funded by EPA, concludes “toxic chemicals are used during both the fracturing and drilling phases of gas operations, that there may be long-term health effects that are not immediately recognized, and that waste evaporation pits may contain numerous chemicals on the Superfund list,” according to its abstract. TEDX indicates that study was accepted for publication in the International Journal of Human & Ecological Risk Assessment earlier this month.

TEDX researchers compiled a list, as of May, of some 944 chemicals used in fracking operations in the United States. They were able to find 95 percent or more of the ingredients for 131 of the chemicals, and TEDX researchers were able to locate health and safety information from material safety data sheets for a little more than half of these chemical ingredients. Of these, the study indicates that “more than 75 percent of the chemicals on the list can affect the skin, eyes and other sensory organs, the respiratory system, the gastrointestinal system and the liver. Over half the chemicals show effects in the brain and nervous system.” More than a quarter of the chemicals were carcinogens. And about 37 percent are volatile and can become airborne.

At the same time, EPA earlier this month held its final round of meetings seeking public input on the scope of the fracking study.

At a Sept. 13 meeting in Binghamton, NY, the environmental group Riverkeeper released a new report, “Fractured Communities,” to highlight case studies of environmental harm caused by, or suspected to be due to, fracking. These include well blowouts, drinking water contamination, illegal discharges, surface water spills, improper wastewater treatment, gas migration, permit violations, and air, geologic and surface water impacts.

Also at the hearing, a resident of Dimock, PA, presented evidence that her drinking water well was contaminated by natural gas drilling chemicals, similar to findings of a separate EPA study conducted in Pavillion, WY, though the agency has not yet determined the cause of the contamination there and is working with the Bureau of Land Management and state agencies to reach a conclusion, though sources say that may not be possible.

The Riverkeeper report, which is designed to help inform EPA's study, also contains wide-ranging recommendations, including asking the EPA inspector general (IG) to resume its investigation “into the potential mishandling of information associated with the agency's 2004 study of fracturing and coalbed methane which has been widely criticized as politically motivated and scientifically flawed.” The IG began its investigation after an EPA whistleblower raised questions about the conclusions of the original EPA study, which found that fracturing did not need to be regulated. But the IG probe was put on hold shortly after Congress exempted fracking as part of energy legislation enacted in August of 2005. One source familiar with the IG's initial work said the office “decided there was no longer a cause for investigation” after Congress granted the exemption.

Riverkeeper also says EPA must “ensure that its current study on hydraulic fracturing remains scientifically sound, unbiased and free of political pressure from any special interest. The agency should stand by its commitment to use a lifecycle analysis approach in order to measure the diverse range of impacts that result from gas drilling and the current study should lead the way for other long-term scientific assessments on this and other important environmental issues.”

One source familiar with the report says the case studies are designed to help EPA go forward with its study and provide support for a broad lifecycle approach, rather than a narrow look only at the fracturing aspect of drilling, as industry is seeking. EPA should not just study the practice of fracturing but look “at all the potential impacts of hydraulic fracturing operations, including site preparation, water withdrawals, wastewater treatment, gas migration and all the ways water may become contaminated,” the source says.

Meanwhile, EPA's Science Advisory Board (SAB) is seeking comment on nominees to serve on an ad hoc panel to review the fracking study, which is being headed by EPA's Office of Research & Development. SAB posted a list of potential nominees Sept. 20 and will take comment through Oct. 1 before making a final decision on panelists.

SAB's Environmental Engineering Committee provided advice to EPA in June on its fracking scoping document, which the agency is accepting comment on through Sept. 28. The new ad hoc panel will provide independent advice to EPA on the study in 2012, SAB says.

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