I t is estimated that more than 20,000 federal mandate due to the - - PDF document

BY BRENT FEWELL

Special to the Legal and PLW

I

t is estimated that more than 20,000 bodies of water throughout the country

• r nearly 40 percent of the nation’s

waterways are too polluted to meet water quality standards. That figure compares to nearly 34 percent

• f Pennsylvania’s 83,000 miles of surface

waters that have been surveyed and judged to be in poor condition. Water quality impairment in Pennsylvania, in particular, can be attributed to a number of sources, such as acid mine drainage, urban storm water runoff, land development, forestry, agriculture and municipal and industrial dis-

• chargers. Pollutants, like metals, nutrients,

sediments, ammonia, pH and other ubiqui- tous pollutants such as PCBs and chlor- dane, often are the culprits. In an effort to address water quality concerns, the U.S. EPA and the Pennsylvania DEP continue to move forward with their Total Maximum Daily Loading (“TMDL”) initiative, with the stated goal of restoring degraded waters. TMDLs are best described as pollution budgets for lakes, rivers, and streams where control technologies have failed to achieve designated water quality standards. They represent an aggregate of all waste loads from sources of any kind, including natu- rally occurring sources, plus a margin of safety to reflect uncertainty of the total

• loading. Put another way, TMDLs are an

attempt to numerically quantify a water body’s natural capacity to effectively assimilate a given amount of pollution. While TMDLs have been required since the late 1970s, only in recent years has the program reached new prominence as a result of a spate of lawsuits against the EPA and states. Over the past decade, nearly 40 lawsuits have been filed in 38 states to force the EPA and the states to move more aggressively to address water quality prob- lems and to develop and implement the TMDL program required by the federal Clean Water Act. Because of the controver- sies surrounding the program, last fall Congress cutoff all funding to the EPA to prevent its implementation. In turn, the Bush Administration halted implementation

• f the July 2000 final TMDL rule until

April 2003 to allow Congress and the EPA more time to evaluate the direction of the

• program. Similarly, the D.C. Circuit Court
• f Appeals agreed to stay litigation involv-

ing the July 2000 rule, pending further

• rder of court, as long as the EPA moves

diligently to address the litigated issues in new rulemaking. Prior to these developments, the July 2000 rule had been sharply criticized by both industry and environmental groups. In particular, the most contentious aspect of the rule is whether states would be required to develop implementation plans for each

• TMDL. States have generally opposed this

federal mandate due to the significant time and costs required to prepare implementa- tion plans. As well, lingering questions remain regarding the very mechanisms needed to implement this complex pro-

• gram. As well, forestry and agricultural

interests, which Congress has long exempt- ed from federal water regulations, have taken strong exception to the EPA’s effort to regulate their activities by requiring states to list all impaired waters, regardless of the source of pollution, and forcing states to take steps to address the sources of pollu- tion. Other more pointed criticism, highlight- ed in a recent General Accounting Office report, has been aimed at the EPA and its highly varied process by which “impaired waters” are identified. Section 303(d) of the Clean Water Act requires states to submit to the EPA every two years a list of waters that are not meeting state standards. The GAO report points out that what one state deems impaired, others may not. This is particu- larly problematic for interstate watersheds. Case in point, the Missouri River, which separates Nebraska and Iowa is deemed impaired by Nebraska (for pathogens), but not by Iowa. This type of inconsistency clearly has hampered the effectiveness of the national program. The TMDL program is one of the more significant and expensive environmental initiatives proposed in recent years and its impacts (both positive and negative) will be long-lasting. In this regard, the Association

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THE OLDEST LAW JOURNAL IN THE UNITED STATES

Up a Dirty Creek Without a Paddle

Getting Your Pollution Budget to Pass the Bar

ENVIRONMENTAL SUPPLEMENT, A SUPPLEMENT TO THE LEGAL INTELLIGENCER, PHILADELPHIA, APRIL 2002

BRENT FEWELL is an

associate with Jones Day Reavis & Pogue in Pittsburgh and focuses his practice on environmental

• law. He may be

reached by e-mail at bafewel@jonesday.com

• f State and Interstate Water Pollution

Control Administrators has estimated the costs to develop TMDLs nationwide over the next 15 years is between $670 million to $1.17 billion. However, cost estimates for implementation and compliance range from $906 million annually, under a more flexible TMDL program, to upward of $4.34 billion annually, under the less flexible, July 2000 rules. The Bush Administration is in apparent agreement with those that believe that the July 2000 rule imposes too high a price tag

• n states and the regulated community with-
• ut guarantee of success. In November,

Tracy Mehan, assistant administrator for water at the EPA, appeared before the U.S. House of Representatives’ subcommittee on water resources and environment to discuss the administration’s vision for a new

• approach. Signifying the changes to come,

Mehan remarked, “I think we all agree that it makes little sense to invest a lot of time and money into developing TMDLs that do not contribute to improving the nation’s water quality . . . and we are engaged in a number of efforts designed to help make TMDLs more effective.” In an effort to improve the program, EPA administrator Christine Todd Whitman has initiated reform measures to improve long-term per- formance and maximize coordination between the EPA and the states. Specifically, the EPA is committed to helping states develop better water quality data, improve

• ngoing monitoring efforts and assessment

methodologies, increase programmatic con- sistency and intergovernmental cooperation, and provide the guidance and tools neces- sary to develop and implement TMDLs in a cost-effective manner. In fact, in an apparent effort to create some political distance between past contro- versies and future reform, the EPA is expect- ed to change the name of the TMDL rule to the “Watershed Rule.” While this would at first blush appear to be form over function, the EPA has also indicated that it will revive a provision of the Clean Water Act that required a “continuing planning process” of the impaired waters program, which might address many of the concerns hampering the TMDL rule. In another positive development, the EPA is now promoting state-based pollutant trad- ing programs that would add flexibility and capitalize upon developing environmental

• markets. According to Mehan, “trading is an

innovate way for water quality agencies and community stakeholders to develop com- monsense, cost effective solutions . . . and is another tool for communities to grow and prosper while retaining their commitment to water quality.” Closer to home, when the DEP proposed its TMDL regulations in 1998, it included an option for trading. However, after substantial opposition by various environmental groups, the provision was eventually deleted from the final rule. Many states, such as Pennsylvania, are developing TMDLs on a separate schedule as a result of court settlements. The DEP, under a 1997 consent decree, has been

• rdered to complete nearly 600 TMDLs by

the year 2009. Midway through, the DEP appears to be ahead of schedule for com- pleting nearly 250 TMDLs, 40 percent of the total required, by the end of 2003. Since 1997, the DEP has focused on the more sim- ple TMDLs, such as single pollutants and single sources. However, as the program has matured the DEP has been forced to tackle the complicated watersheds where a host of point and non-point sources are contributing to water quality problems. Industry and municipal discharges, in par- ticular, are beginning to feel the impact of this program as they seek to renew water discharge permits or expand their opera-

• tions. For example, as facilities in proximity

to impaired waters renegotiate the terms and conditions of their permits, some are likely to witness substantial reductions in effluent limits for targeted pollutants. Similarly, facilities might observe restrictions on new

• r expanded operations with the potential to

increase a targeted pollutant. TMDLs will also impact facilities that lack water dis- charges but have significant air emissions containing mercury or other airborne pollu- tants that might be contributing to impaired surface waters. Some facilities also may be unfairly penalized when nearby industrial

• perations violate TMDLs and “expend” the

budget for a particular pollutant. Although both point and non-point sources are targets

• f this program, it is inevitable that most of

the regulations will fall upon point sources, even though non-point sources may be con- tributing to the majority of water quality

• impairment. In the end, the program will

require many facilities to invest in costly control equipment to meet waste load reduc- tions or cases where the capital costs are too high, to shut down operations altogether. Without a trading program, TMDLs invariably will place an arbitrary cap upon development and economic growth in certain key watersheds. Theoretically, the program also places the DEP in the unfortunate posi- tion as final arbiter of meting out a pollution budget among competing point and non- point sources — both spatially and temporal-

• ly. This scenario alone raises some very

unique legal and equitable questions. What factors, for example, will or should the DEP use to determine which companies and industries will receive pollution allowances and how much of the budget should each stakeholder receive? In addition, if the entire pollution budget for a watershed is allocated among existing sources, how will this impact future economic growth and interests? Will “late-comers” be shut out entirely or will they be accommodated in some fashion? As

• ne can see, the practical effect of establish-

ing pollution budgets creates a host of com- plex questions, and ones the private market seems best prepared to handle. Fortunately for regulators and stakehold- ers alike, the TMDL initiative naturally lends itself to a cap-and-trade system due to its tractable and well-defined trading bound-

• aries. Watersheds, composed of rivers,

streams and lakes, are easily identified and can be readily monitored with the help of nearby communities. The success of the pro- gram hinges on the ability of stakeholders to capitalize upon an effective and organized watershed trading system. Targeted river basins, such as the Schuylkill, Delaware and Susquehanna, affecting Reading, Lancaster, Pottstown, Norristown, Williamsport, Milton, Carlisle and Harrisburg, have high densities of point source discharges, inter- spersed among significant non-point sources and would benefit immensely from the flexi- bility of a trading system. Currently, the Pennsylvania Environmental Council is working closely with the DEP and various stakeholders (e.g., agriculture, industry, municipal dischargers)

• n a pilot project in the Conestoga Valley,

near Lancaster, to develop a trading program. This project is going very well, according to Andrew McElwaine, president and CEO of

• PEC. In fact, the PEC is hoping this spring to

roll out the program and encourage stake- holders to begin buying into the trading pro-

• gram. However, McElwaine believes it is

critically important to the overall success of this project that the trading include enforce- able trades between point and non-point sources.

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Many are hoping that the EPA’s proposed revisions to the July 2000 rule, expected later this year, will contain some provision and support for a trading system. Once the EPA’s rules are finalized, however, stakeholders will have few opportunities to provide mean- ingful input to the overall direction of the TMDL program. As a practical matter, stake- holders should continue to monitor which water bodies are listed on or are proposed to be added to the DEP’s 303(d) list. The revised list is due this October. Similarly, they should assess the nature and reliability

• f the data upon which the TMDLs are

based, methodology for data collection, loading calculations and predictions, imple- mentation plans, and control technologies or best management plans being proposed to fix the problem. As new TMDLs are proposed, the DEP is required to provide public notice in the Pennsylvania Bulletin along with a 30- day comment period. Depending upon the nature of comments and the controversial nature of a TMDL, the DEP may decide to hold public hearings. Companies that currently have permitted facilities or sources that could be the target

• f the EPA and DEP, should carefully assess

the implications of the TMDL initiative on their respective operations. Facilities whose NPDES permits or air permits are up for renewal over the next several years should pay close attention to this matter because current effluent or emission limits may be subject to even further reductions. Facilities should first determine whether the water into which it discharges (or is considering dis- charging into) is listed on the DEP’s 303(d) list or is being considered for listing. Once established, it is important to determine what pollutant(s) (e.g., pH, iron, cadmium, beryli- um, mercury, zinc, nutrients, suspended solids, sedimentation, oil and grease, PCBs, etc.) are impairing the water quality and to understand how the targeted pollutants may impact your facility’s ability to operate. Last, be familiar with all potential sources or pol- lutants (both point and non-point air and water sources) that could be contributing to the same impaired body of water and antici- pate how these sources may impact your facility’s permit, continued operations or future expansion plans. •

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