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Vol. 36, No. 6 - February 13, 2015
EPA’s FY16 Bid To Expand Public-Private Water Projects Faces Opposition
Water utilities are pushing back on EPA’s fiscal year 2016 proposal to expand public-private water infrastructure
projects including potentially expanding a novel pilot effort in Maryland, a move they see as a bid by the agency to
justify its plan to cut $53 million from its combined clean water and drinking water state revolving funds (SRFs).
In a fact sheet from utilities, including drinking water and wastewater systems, they attack EPA’s budget for cutting
millions from the SRFs to help fund programs that funnel private capital into water infrastructure projects, including the
agency’s recently announced Water Finance Center that will promote public-private partnerships (P3s).
The center “has no statutory basis and was recently created to focus on public-private partnerships and preparation
continued on page 6
‘Gift’ Of Preemption Could Secure Industry Backing On TSCA Reform Fees
Giving the chemical sector a long-sought “gift” of preempting state chemical programs as part of Toxic Substances
Control Act (TSCA) reform legislation could secure the sector’s backing for a comprehensive industry fee program that
would amply fund a robust new EPA chemicals program created by reform, stakeholders are suggesting.
“Preemption is a big gift,” Alexandra Dunn, executive director of the Environmental Council of the States (ECOS)
— representing many state environmental agencies — told a Feb. 5 panel discussion on TSCA reform.
Dunn noted that state agencies, several of which have chemical management programs stricter than EPA’s regime,
are currently unwilling to accept preemption of their own toxics regulations because there is not a robust and wellcontinued on page 10
‘Downstream’ Gas Operators Seek EPA Credit For Voluntary Methane Cuts
“Downstream” operators of natural gas transmission pipelines will likely seek credit and cost-recovery from EPA
for their voluntary efforts to reduce methane emissions, which could potentially ease their obligations under the
agency’s planned methane rules for the sector, a gas transmission sector source says.
“For pipeline operators, if they go down the road of voluntary programs” such as working to reduce methane
through EPA’s voluntary Natural Gas Star program that encourages practices to cut emissions, “they’re going to want
reassurance of complete recovery,” particularly if the agency opts to pursue an existing source rule down the road, and
because the operators are already subject to rate recovery controls, says the source. The Department of Transportation,
continued on page 14
EPA’s Doubts On Minnesota Discharge Permit Highlight Groundwater Debate
EPA concerns over Minnesota’s preliminary plans to craft a discharge permit for a tailings basin — which the
agency says would unlawfully allow discharges for pollutants to surface water in excess of water quality standards
(WQS) through groundwater seepage at the basin — illustrate ongoing debate over when such groundwater connections
require permit limits.
Environmentalists say how the state decides to address EPA’s concerns in the final permit is potentially precedentsetting because it could serve as a guide for how regulators can address seepage that leads through underground
hydrology to surface waters.
continued on page 16
Inside
WATER: OMB May Accelerate WQS Rule Review Ahead Of CWA Jurisdiction Policy ...................... page 3
CLIMATE: McCabe Again Signals Eased ESPS Targets But Touts Fund To Do ‘More’ ...................... page 8
LITIGATION: Advocates Eye EPA Suit To Force Strict Stormwater Permits Under TMDLs .............. page 13
AIR: EPA Defends Authority For Novel Boiler MACT ‘Energy Assessment’ Mandate ....................... page 18
WASTE: EPA Defends Exposure Considerations In Novel Dioxin Cleanup Standards ..................... page 21
House Panel Approves EPA Cyanotoxins Bill, Punts On Dedicated Funding
A House panel has approved legislation that would require EPA to develop a strategy for managing the risks of cyanotoxins
in drinking water, but lawmakers rejected an amendment favored by Democrats that would dedicate specific funds to the effort.
EPA is declining to take a position on the bill but is pledging to finalize this spring health advisories to assist drinking
water utilities in protecting customers from the toxins that can be produced by nutrient-fueled harmful algal blooms.
The House Energy & Commerce environment and economy subcommittee approved H.R. 212 by unanimous voice
vote Feb. 5. The full committee is scheduled to mark up the bill Feb. 12. Relevant documents are available on
InsideEPA.com. See page 2 for details. (Doc. ID: 178663)
The bill would require EPA to develop and submit to Congress within 90 days a strategic plan for “assessing and
managing the risk associated with cyanotoxins in drinking water,” to establish a list of which cyanotoxins are harmful to
human health when present in drinking water — including the known adverse effects of those cyanotoxins and the factors
that caused them to proliferate — and to develop health advisories for those on the list as well as technical guidance and
assistance for states in monitoring the cyanotoxins.
It would also require the agency to enter into “cooperative agreements” and provide technical assistance to states and
public water systems to help them manage risks posed by algal toxins.
Although the panel voted to pass the bill, introduced by Rep. Bob Latta (R-OH), it failed to address concerns
expressed by several House Democrats during the hearing that the bill would not be able to fully address cyanotoxin
contamination in drinking water without dedicated funding.
“The H.R. 212 cooperative agreements do not provide funding,” said Rep. Paul Tonko (D-NY), the subcommittee’s
ranking member. “The presidential budget request includes funding for drinking water infrastructure, but that funding is
already far outpaced by need.” The Obama administration has proposed funding the drinking water state revolving loan
fund (DWSRF) at $1.186 billion in fiscal year 2016, an increase of $279 million over current levels.
Tonko proposed an amendment to further increase the DWSRF by $10 million for each fiscal year from FY16-18 to
help implement H.R. 212, but the amendment failed by voice vote.
Rep. Lois Capps (D-CA) also expressed concerns that the bill would not adequately prevent future harmful algal
bloom (HAB) outbreaks like the one in Lake Erie in August 2014.
“Developing a strategic plan would be helpful, but H.R. 212 does nothing to help local communities actually implement it. They know what needs to be done, but if you don’t have the wherewithal you can’t do it. H.R. 212 is only the first
step,” Capps said, adding that she hopes to hold further hearings on the bill’s implementation. She also plans to reintroduce a bill she has introduced in previous sessions of Congress that would create a new grant program to provide
funds to local drinking water utilities to implement “resiliency and mitigation” strategies.
Drinking water groups are backing the legislation as a good first step but also say additional controls on agricultural
runoff are needed. — Amanda Palleschi
Background Documents For This Issue
Subscribers to InsideEPA.com have access to hundreds of documents, as well as a searchable archive of
back issues of Inside EPA. The following are some of the documents available from this issue of Inside EPA.
For a full list of documents, go to the latest issue of Inside EPA on InsideEPA.com. For more information about
InsideEPA.com, call 1-800-424-9068.
Documents available from this issue of Inside EPA:
„ Army Corps Recommends Further Nutrient Reductions For Bay TMDL (177801)
„ EAB Backs EPA’s Power To Permit ‘Satellite’ Sewers (178665)
„ Environmentalists, Industry Offer Defenses Of EPA’s CISWI Air Rule (178737)
„ Environmentalists Pursue Host Of Water Conductivity Suits (178415)
„ Environmentalists Threaten Suit To Force Strict Local Stormwater Permits (178747)
„ EPA, Advocates Raise Concerns Over Planned Minnesota Discharge Permit (178822)
„ EPA Defends Fuel Testing Policy From Ethanol Producers’ Legal Attacks (178830)
„ EPA Files Final Brief In ‘Major’ Source Boiler MACT Suit (178824)
„ EPA Finalizes Dioxin Cleanup Plan For River Floodplain (178716)
„ EPA Seeks Input On Petitions To Regulate nPB As Air Toxic (178649)
„ GAO Identifies ‘High Risk’ Issues For Federal Government (178823)
„ House Panel Approves Legislation Targeting Cyanotoxins (178663)
„ States, Industry Outline Latest Legal Arguments Against EPA’s CSAPR (178681)
„ Utilities Critique EPA’s Plan To Fund Public-Private Water Projects (178821)
Not an online subscriber? Now you can still have access to all the background documents referenced in this issue through
our new pay-per-view Environmental NewsStand. Go to www.EnvironmentalNewsStand.com to find out more.
2
INSIDE EPA - www.InsideEPA.com - February 13, 2015
Facing Petition Deadline Suit, EPA Seeks Input On nPB Air Toxics Listing
EPA is seeking input on halogenated solvents producers’ petition asking the agency to list the chemical n-Propyl
Bromide (nPB) as a Clean Air Act air toxic, weeks after the companies threatened EPA with a deadline suit to force a
response to their years-old request for the listing that would trigger air toxics rules for the substance.
In a notice slated for publication in the Feb. 6 Federal Register, the agency says that it now deems the 2010 petition
from the Halogenated Solvents Industry Alliance (HSIA) to be complete and is seeking public comment for 30 days on
the push to add nPB to the regulated list of air law hazardous air pollutants (HAPs). EPA says it also deems complete a
separate petition filed by New York in 2011 seeking an nPB listing, and seeks comment on both. Relevant documents are
available on InsideEPA.com. See page 2 for details. (Doc. ID: 178649)
Deeming the listing petitions complete “means they provide sufficient information to assess the human health impacts
on people living in the vicinity of facilities emitting nPB,” the agency says.
As a result of that determination, the agency invites the public to provide comment on its technical review of the
listing request, including submitting additional data such as information on sources, emissions, exposure and health
effects. Once the technical review is complete, EPA will decide whether to propose listing nPB as a HAP or whether to
issue a notice rejecting the petitions, and will publish that decision in the Register.
The Clean Air Act’s section 112(b)(1) includes a list of HAPs from a wide range of industrial and other sources that
have been associated with adverse health effects, including cancer. HAPs are regulated through EPA’s maximum achievable control technology (MACT) air toxics standard. The law allows groups to petition the agency to add new substances
to the list of HAPs, which would trigger MACT rules for those air toxics.
A halogenated solvents industry source has previously said there is a justification for listing nPB as a Clean Air Act
HAP because it is “as least as toxic by any measure as other chemicals on the list.”
The chemical is marketed as a replacement for a number of chemicals produced by HSIA’s members, including
trichloroethylene, perchloroethylene and methylene chloride — all substances regulated as HAPs.
EPA notes in the Register notice that, “Based on the chemical and physical properties of nPB, petitioners claim that
nPB is carcinogenic, has toxic reproductive effects, and is a neurotoxin. HSIA’s petition estimated cancer incidence by
estimating emissions from five facilities that use nPB. HSIA also used the site specific data as input for air dispersion
modeling to develop anticipated lifetime cancer risk that would occur beyond facility boundaries.”
HSIA first filed its HAP listing petition with EPA on Oct. 28, 2010, but the agency deemed the petition incomplete
because of missing information on emissions estimates, modeling procedures, and a lack of sufficient citations on adverse
human health effects. HSIA on Nov. 30, 2012, then submitted additional data to the agency which EPA says satisfied its
concerns over the completeness of the petition.
Frustrated by the agency’s years of delay in responding to the petition, HSIA on Dec. 19 filed a notice of intent to sue
EPA giving it 60 days notice that it would pursue a deadline suit to force a reply.
EPA in the Register notice does not mention the deadline lawsuit threat, but does say that it now considers the
separate petitions for listing filed by HSIA and the New York Department of Environmental Conservation years ago to be
complete, and is starting a formal review process of the requests. — Anthony Lacey
OMB May Accelerate WQS Rule Review Ahead Of CWA Jurisdiction Policy
State officials say the White House is pushing to finish pre-publication review of EPA’s long-awaited final rule for
how states should craft water quality standards (WQS) before it begins review of a final rule to define Clean Water Act
(CWA) jurisdiction, fearing a lack of resources to process two highly controversial water rules at the same time.
A state source says the administration is seeking to avoid simultaneous review of the two regulations, out of concern
that if the White House Office of Management & Budget (OMB) takes up the CWA jurisdiction rule before completing its
work on the WQS policy, one of the regulations will be sidelined due to the limited resources.
To achieve that goal, the water standards rule would likely have to clear OMB by early spring — or the administration would need to delay submitting its jurisdiction regulation for White House review.
“The concern is that the water quality standards rule has no legal deadline. And if it ends up getting behind the
[jurisdiction] rule it just may never come out, because OMB will be overwhelmed with the review process,” the source
says.
The final WQS rule, which EPA sent for OMB review Jan. 8, will update federal regulations governing a wide range of
state water policies required by the CWA, including antidegradation requirements, procedures for allowing variances from
strict WQS, restrictions on waterbodies’ designated uses and the conditions under which EPA will promulgate federal standards when it determines a state’s rules to be “inadequate” (Inside EPA, Jan. 16).
The agency is under no statutory or court-enforced deadline to take final action on the WQS rule. But if the administration is determined to release the final rule before addressing CWA jurisdiction it would likely require review to
conclude before the end of winter in order to fit with the timeline EPA has set out for that rule, as EPA Administrator Gina
INSIDE EPA - www.InsideEPA.com - February 13, 2015
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McCarthy has pledged to finalize the CWA jurisdiction rule in the spring.
EPA and the Army Corps of Engineers, which are jointly developing the jurisdiction rule, had earlier set a selfimposed deadline of April for final action, but at a Feb. 4 joint hearing of the House Transportation & Infrastructure
Committee (T&I) and the Senate Environment & Public Works Committee (EPW), McCarthy said that because of the
volume of comments submitted on the proposal, regulators may miss that target.
“Certainly this spring, but we’re not giving a specific time frame. We’ll take the time to go through the comments,”
she said in response to a question from Rep. Bob Gibbs (R-OH) on the agencies’ timeframe. Spring formally begins in
March and ends in June.
Since OMB review normally lasts approximately 90 days — though in some cases it can take more or less time —
the WQS rule could be released from review no later than the end of March in order to create an adequate buffer for the
jurisdiction rule to be released before summer.
EPA has given little indication of how the rule it eventually releases might differ from the proposal issued in
September 2013. That version of the rule drew push-back from both industry groups and environmentalists, suggesting
litigation over the final rule if it is similar to the proposal.
But the state source says the agency appears to be focusing more on states’ comments — which were critical of some
parts of the rule but stopped short of threatening legal action — than on those from other stakeholders.
“Because it’s a state-run program, my understanding is that the Office of Water took the state comments very seriously. They had a working group of states during the comment period to try and hash out some of the concerns when the
agency was free to talk,” the source says.
In general, states urged the agency to revise its proposal to expand their discretion, and to more clearly define state
regulators’ responsibilities under the proposed rule. For instance, many comments from states urged EPA to revise a
requirement for a waterbody whose designated use is withdrawn to be assigned the “next highest” attainable use. They
noted that some states do not have a clear hierarchy of uses, and in some cases there might not be another viable use for a
given body of water.
“There isn’t always another category — if you remove it there’s not always something to replace it with. There’s
going to be some addressing of that,” the state source says.
By contrast, industry levied an array of legal threats against the proposed rule in its comments in early 2014, in
particular targeting new restrictions on how states select “high-quality” or “Tier 2” waters subject to antidegradation
policies. All states are required to develop such policies, but EPA has set few standards for such policies and allows them
to be published in non-binding guidance rather than regulation.
“[T]he proposed rule, if adopted, would upset the balance struck in the CWA by unjustifiably expanding EPA’s
limited statutory authority over the states’ discretion in protecting and managing [their] waters,” the National Mining
Association wrote in its comments (Inside EPA, Jan. 24, 2014).
Environmentalists in their comments sought stricter standards for antidegradation as well as targeting a part of the
proposal that would raise the bar for when the agency determines that state water quality standards are inadequate and
require federal preemption, charging the plan is “completely contrary” to CWA requirements that the agency review state
standards (Inside EPA, Jan. 31, 2014). — David LaRoss
States Fault EPA’s Rejection Of Air Plans In Bid For Court To Scrap CSAPR
States opposed to EPA’s Cross-State Air Pollution Rule (CSAPR) emissions trading program are urging the U.S.
Court of Appeals for the District of Columbia Circuit to vacate the rule, saying it is based on a faulty justification of
implementing CSAPR by rejecting as no longer valid plans for meeting an earlier air trading program.
The novel argument claims that EPA violated the Clean Air Act by determining that the plans dependent on the
predecessor program known as the Clean Air Interstate Rule (CAIR) were illegal and had to be replaced with CSAPR
compliance plans following a D.C. Circuit ruling that found fault with CAIR’s legality. EPA argued that CAIR plans were
no longer valid, but the states counter that the court only remanded and never vacated CAIR.
Power industry groups are also urging the court to scrap CSAPR, filing a new brief in remaining litigation over the
rule that claims EPA erred in how it calculated emissions control mandates under the program.
The various arguments are detailed in a pair of reply briefs filed Feb. 6 in EME Homer City Generation L.P., et al. v.
EPA, et al., which is consolidated litigation over challenges to various technical provisions and other aspects of CSAPR.
The rule is a nitrogen oxides (NOx) and sulfur dioxide (SO2) air trading program covering 28 states, and was designed to
replace the Bush-era CAIR after the D.C. Circuit remanded that rule to EPA. The briefs are available on InsideEPA.com.
See page 2 for details. (Doc. ID: 178681)
The D.C. Circuit said that CAIR — which was also a NOx and SO2 cap-and-trade policy — had several legal flaws,
though the court never vacated the rule. The Obama administration instead developed CSAPR as its response to the
remand, though the replacement policy was then mired in years of legal challenges.
In a 2-1 ruling in 2012, a three-judge panel of the court in EME Homer City vacated CSAPR and rejected as unlaw-
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INSIDE EPA - www.InsideEPA.com - February 13, 2015
ful EPA’s process of implementing the rule through federal implementation plans (FIPs) imposed on states before giving
states the chance to craft state implementation plans (SIPs) to implement it.
States said they should have been allowed to first determine their air law “good neighbor” mandate to cut
interstate transport of emissions that are hindering downwind states from attaining EPA’s national ambient air
quality standards (NAAQS) for particulate matter (PM) and ozone, as SO2 reductions help cut PM and NOx cuts
reduce ozone levels.
EPA then appealed the case to the Supreme Court, which issued a 6-2 decision in April that upheld the overall
legality of CSAPR but remanded the case to the appellate court to resolve a host of other challenges the original EME
Homer City ruling never addressed. Observers have predicted that none of the remaining suits pose the risk of the D.C.
Circuit again vacating the rule, but that is the precise outcome that some states are seeking.
EPA in briefing has strongly defended its rules, saying it was justified in its approach for rejecting or approving state
interstate air plans and did not exceed its authority with the pollution caps it imposed in FIPs (Inside EPA, Jan. 23).
The agency has the support of environmentalists, a handful of states that need the rule’s pollution cuts to attain
federal air standards, and “clean” utilities that generate much of their power from energy sources that have lower emissions than coal, such as natural gas. For example, the clean utilities in a brief in EME Homer City last month faulted the
rule’s opponents for trying to claim the high court ruling undermines several provisions of CSAPR (Inside EPA, Jan. 30).
In a Feb. 6 reply brief, the state and local authorities opposed to the rule, however, argue that the D.C. Circuit
never vacated CAIR and therefore CSAPR was implemented by invalidating CAIR-based air plans that were in fact
legitimate.
The states — including Alabama, Florida, Kansas and Texas — say the agency was wrong to rescind existing, EPAapproved good neighbor SIPs and FIPs that were dependent on CAIR. They claim EPA acted illegally by revoking CAIR
plans and in their place imposing federal plans to implement CSAPR’s trading program.
They say that although the D.C. Circuit initially determined it would vacate CAIR, it never issued the mandate and
instead merely remanded it to EPA pending a replacement trading program. Therefore, the states argue, CAIR SIPs and
FIPs were valid both before and after the D.C. Circuit’s 2008 ruling in North Carolina v. EPA that remanded CAIR to
EPA, and the agency had no basis to disapprove them to make way for the new program.
One of the major lingering questions that the D.C. Circuit must resolve in EME Homer City is the legality of EPA’s
disapproval of air plans that relied on emissions cuts from CAIR, which the agency achieved using an air law SIP errorcorrection mechanism that it says allows it to replace SIPs that are no longer air law compliant.
Texas and other states opposed to the rule have previously argued this mechanism cannot apply to SIPs that were
correct at the time of approval. The states in their new brief say that “The North Carolina mandate . . . ensured that CAIR
would not be vacated but would rather continue in full force and effect.”
Hence, “Both before and after North Carolina, CAIR was thus a binding legislative rule defining the applicable
good-neighbor SIP requirements for the covered States and requiring EPA to approve those States’ CAIR-compliant
SIPs,” they say. And even had this not been the case, North Carolina addressed only CAIR-dependent FIPs, not SIPs
crafted by the states, they argue, and those plans were therefore still valid when approved.
The states then reiterate previously raised arguments against CSAPR, including that EPA can only disapprove valid
SIPs and amend them through the Clean Air Act’s “SIP Call” procedure, giving states the opportunity to comment on the
required changes and allowing them time to comply.
They also repeat claims that EPA failed to give independent meaning to the air law’s good neighbor requirement that
upwind emissions not “interfere with maintenance” of NAAQS in downwind areas.
EPA says it used distinct methodology to calculate both the “significant contribution” of upwind states to NAAQS
nonattainment downwind, and also the interference with maintenance of NAAQS in areas that at one time, but no longer,
have been designated “nonattainment.” The states disagree, saying that EPA’s methodology in fact imposes obligations on
upwind states based on their linkage to downwind areas that have never been designated nonattainment.
EPA misread the air law, interpreting it to require mitigation of upwind emissions that “will,” in the future, threaten
downwind areas with NAAQS attainment problems, say the states. This forward-looking view of the law is incorrect, the
states add. They say that EPA erred procedurally by making dramatic changes to CSAPR between its proposal and the
final version. These necessitated fresh public comment that was not sought by EPA, they argue.
Also, Kansas and Indiana argue that EPA was wrong to initiate rulemakings to impose CSAPR FIPs before the
agency had formally disapproved the states’ existing SIPs.
Meanwhile, industry groups and labor unions opposed to CSAPR in a separate Feb. 6 reply brief echo the states’
complaints about other aspects of CSAPR, notably EPA’s calculation of which upwind areas must cut emissions to ensure
air quality in downwind states.
EPA’s interpretation of the Supreme Court’s view of “overcontrol” — cutting upwind emissions more than required
to meet NAAQS downwind — is incorrect, industry says, as many areas are overcontrolled.
Industry and labor unions in their reply brief say that EPA has overcontrolled many downwind areas needlessly. This
is the result of flawed methodology and the agency’s refusal to cross-check its computer-modeled analysis of upwind
INSIDE EPA - www.InsideEPA.com - February 13, 2015
5
areas’ linkages to downwind areas with actual air quality monitoring data, they argue.
They also claim that EPA fundamentally misreads the Supreme Court’s view of overcontrol as outlined in its CSAPR
ruling. “EPA contends that no upwind State is overcontrolled so long as any downwind location will have attainment
problems, even if the upwind State is not linked to that location, and that EPA may impose ‘uniform cost thresholds’ even
when they require a State to reduce more emissions than necessary to resolve all attainment problems at the downwind
locations to which it is linked,” they say.
“These contentions — which would mean that no State could ever have a valid as-applied overcontrol challenge —
are inconsistent with the standard adopted by the Supreme Court for showing overcontrol,” they say. The high court said
upwind areas cannot be controlled by more than the level required to ensure NAAQS compliance in every downwind area
to which they are linked, they say. — Stuart Parker
Water Utilities Fight Proposed FY16 SRF Cuts . . . begins on page one
for implementing WIFIA, all at the expense of the [clean water] and [drinking water] SRF programs,” the sheet says.
Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 178821)
President Obama’s proposed FY16 budget would boost EPA’s overall funding by $452 million from its current level
of $8.139 billion to $8.591 billion. The proposal includes a request for $5 million “to begin developing the information
necessary to lay the groundwork” to implement the Water Infrastructure Finance and Innovation Act (WIFIA). Congress
in 2014 authorized WIFIA, a five-year pilot program to water infrastructure projects and would give low-interest loans to
entities for large water and wastewater projects, but did not appropriate funds for it (Inside EPA, Feb. 6).
Obama is also floating a $332 million cut to the clean water SRF taking it down to $1.116 billion compared to its
current level of $1.448 billion. The drinking water SRF would receive a $279 million boost, taking it from its current
level of $906 million up to $1.186 billion. Combined, overall SRF funding would be cut by $53 million.
Stakeholders have argued that the SRFs are a more efficient use of infrastructure funding than P3s, however, and
expressed concerns in the weeks before EPA’s budget proposal that the White House would seek to divert appropriations
from the revolving funds to private infrastructure bonds and other P3 financing mechanisms.
Congress in recent appropriations bills has rejected White House proposals for major cuts to the SFRs, but the fate of
EPA’s budget including the SRFs is in doubt in FY16 compared to previous years thanks to the GOP control of the
Senate. Republicans in the House backed major reductions to the revolving funds in FY15 and FY14.
However, Sen. James Inhofe (R-OK), chair of the Environment & Public Works Committee, in a statement on
President Obama’s budget proposal criticized the president for proposing SRF cuts while seeking $239 million to fund
mandatory and voluntary policies designed to cut carbon dioxide emissions. His statement signals that the GOP might
focus its preferred budget cuts away from the water infrastructure programs.
While the White House is urging cuts to its overall SRF appropriations, the agency is investigating new, alternative ways to fund water infrastructure with P3s — most recently at a Jan. 23 meeting between Region 1 Administrator
Curt Spalding, other regional officials and the private infrastructure firm Corvias Group, where the parties discussed an
expansion of the P3 program Corvias is involved with in Prince George’s County, MD.
According to a source with knowledge of the meeting, Spalding and EPA staffers said their goal was “to start the
process of determining whether there are some places they could apply” the P3 model developed in Maryland.
Although there was no firm commitment to move forward, “There were some areas and projects that they started
thinking out loud about,” according to the source.
The Prince George’s County framework — which EPA has touted as a model, including at a “Clean Water Finance
Dialogue” meeting June 24 in New York City — funds the construction and maintenance of new stormwater infrastructure
by a private company through bonds guaranteed by the SRF.
In the long term, repayment on the debt is expected to come from fees assessed by the local government, but third
parties — such as a transit center, homeowners or business districts also under compliance requirements that could
benefit with partnering with a local jurisdiction through a P3 — could also share in project repayment costs.
While the program underway in Maryland is focused on implementing a watershed-level plan for improving
waterbody health by reducing stormwater discharges, the source says only the core financing mechanisms of the program
would be applied to pilots in other regions. “That was part of the conversation — how do we take this framework and
adjust it to fit with the way the stormwater management process works in our states. . . . We emphasized that the P3 model
is flexible enough to basically be able to take whichever planning mechanism that the state does and compare it against
the public-private partnership model of financing,” the source says.
A Region 1 spokesman did not respond to a request for comment on the meeting.
P3 financing could come through WIFIA, which was authorized by Congress in 2014 for a five-year pilot but has yet
to be funded and would give low-interest loans to entities for large water and wastewater projects, or from the finance
center, which is supported by general appropriations for EPA rather than a specific Congressional authorization and is
designed to help municipal and state governments use federal grants to attract more private capital into projects.
A White House fact sheet says the center will issue a new type of bond called a qualified public infrastructure bond
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(QPIB), which will “expand the scope” of private activity bonds (PABs) to include financing for a wider range of
projects. PABs are tax-exempt bonds issued by state and local governments that can be used by a private entity conducting a project in the public interest or by a government entity for certain P3s.
But the center’s creation drew opposition from environmentalists and some utility groups that argued P3s should not
supplant the SRFs as a preferred financing mechanism. Wastewater sector and drinking water sources said ahead of the
White House’s budget proposal that stakeholders consider SRFs more efficient amd were concerned that funding for the
new municipal bonds in particular could siphon money away from the SRFs.
Meanwhile, environmental groups that oppose the use of P3s to finance water infrastructure projects say
another major difference between PABs and QPIBs is that the new bonds would be exempt from the alternative minimum
income tax, creating new tax breaks for private investors.
A bipartisan panel organized by the House Transportation & Infrastructure Committee found last year that P3s can
offer significant benefits in some cases but says there is little data on how they can work for drinking water and wastewater projects and they should not be thought of as the solution to infrastructure funding challenges.
The Sept. 17 report said that “P3 procurements have the potential to deliver certain high-cost, technically complex
projects more quickly or in a different manner than would otherwise occur under traditional procurement and financing
mechanisms.” But these projects can only address a small portion of the nation’s infrastructure needs, and adequate
federal investment in infrastructure remains necessary, the report continued. — David LaRoss
GOP Senators’ Attacks On EPA Climate Rules Could Aid Future Challenges
Republicans are targeting EPA’s authority to issue its greenhouse gas (GHG) rules for power plants, offering at a
recent Senate hearing several legal and practical critiques of the policies that could lay the groundwork for legislative and
legal challenges after the rules are completed.
The Feb. 11 hearing is the first on EPA’s existing source performance standards (ESPS) and companion new source
power plant rules since the GOP took control of the Senate.
Environment & Public Works Committee (EPW) Chairman James Inhofe (R-OK) says he will hold several more
oversight hearings on the rules featuring state officials, climate scientists and other federal agencies.
The oversight hearings could achieve multiple objectives for GOP senators, including providing political messaging
for base supporters, helping critics’ litigation over the rules and winning targeted changes to soften the rules.
Republicans have been hesitant to date to discuss legislative options they could use to weaken the rules, though
Majority Leader Mitch McConnell (R-KY) has vowed to use an array of tools, including appropriations bills, to block
EPA’s climate efforts.
Several panel Republicans at the hearing made it clear that they strongly oppose the ESPS, and their criticisms
appear aimed at undermining the rule rather than improving it. “It’s something that many of us here oppose and are going
to continue to try to dismantle,” said Sen. John Barasso (R-WY).
Inhofe added: “We’re going to do what we can to keep my people in Oklahoma from incurring the largest tax
increase in history for something that is not really occurring,” referencing his belief that humans do not contribute to
climate change.
Acting EPA air chief Janet McCabe — the hearing’s sole witness — largely reiterated agency announcements about
the ESPS and rules for new and modified sources, mentioning several times that the agency is weighing millions of
comments when asked about EPA’s thoughts on specific issues in the rule.
However, in an exchange with Sen. David Vitter (R-LA), McCabe also indicated for the first time that the agency
plans to promulgate a final federal implementation plan (FIP) for states that do not submit adequate compliance plans
within one year of proposing it.
“We’ll have a proposed FIP out in the summer, and I would expect we would have that finalized within a year,” she said.
EPA has previously said it would issue a proposed FIP by mid-summer — around the same time it finishes the ESPS
and rules for new and modified sources — but officials had not previously said when they would finalize the federal plan.
Vitter noted that the timeline is “perfectly consistent with this direction and advice” from a June 2013 email from the
Natural Resources Defense Council (NRDC) to EPA that laid out the legal case for finalizing a backstop FIP even before
the deadline for states to submit their own compliance plans. Under that scenario, the email said, EPA could finalize the
FIP as long as it does not “implement” controls until a reasonable time after a state misses its deadline.
EPA’s plan to finish the FIP a year after it is proposed would roughly coincide with states’ deadlines to submit an
initial ESPS compliance plan in the summer of 2016, though many states are expected to request year-long extensions for
their final plans, and states could receive an extra two years if they are working on multi-state approaches.
But McCabe rejected the idea that NRDC spurred the idea of crafting a backstop FIP. “We get a lot of detailed advice
from a lot of people,” she said. “The notion of a federal implementation plan is fully laid out in the Clean Air Act, and
that is what is motivating us to think about the need for a backstop federal plan.”
NRDC’s David Goldston in a Feb. 11 statement pushed back on the charges from Vitter and other Republicans, saying,
INSIDE EPA - www.InsideEPA.com - February 13, 2015
7
“We made recommendations to the agency, and sometimes EPA found them helpful. The senators’ efforts to stifle debate should
disturb anyone who wants to participate in the democratic process, regardless of where they stand on climate action.”
Offering one potential legal attack on the ESPS, Sen. Dan Sullivan (R-AK) also cited the recent Supreme Court
ruling in Utility Air Regulatory Group v. EPA, a case he said undermines EPA’s power plant rules.
That ruling, which struck down a portion of EPA’s tailoring rule for GHG permits, found that “EPA’s interpretation is
also unreasonable because it would bring about an enormous and transformative expansion of EPA’s regulatory authority
without clear congressional authorization.”
“I think you’re doing exactly what the [Supreme Court] reprimanded you for doing in its recent case,” Sullivan said.
“You are taking significant power under the Clean Air Act that’s dramatically expanded, that’s dramatically expanding
your powers over the U.S. economy without clear Congressional authorization.”
McCabe rejected the notion that the ESPS “dramatically expands” its authority. “I believe that the rule we have
proposed and that we’re going through comment on today is squarely based on our authority in the Clean Air Act,” she
replied, adding, “I believe we are following what the Clean Air Act requires.”
Democrats largely praised the ESPS for curbing GHGs that cause climate change, and also defended EPA’s statutory
authority for the rule. “This is a situation where the Clean Air Act requires you to act,” ranking member Barbara Boxer
(D-CA) said. “It doesn’t require [Congress] to act, it requires you to implement the act, unless we repeal the Clean Air
Act. I haven’t heard anyone say that they want to repeal the Clean Air Act. If they do, bring it on.”
Boxer added that EPA must “follow the law” and follow Supreme Court holdings that found carbon dioxide to be
included as a “pollutant” under the air law. “If you didn’t do your work, you would be sued for not doing it, am I right?”
“In all likelihood,” McCabe said.
“I think so, because I know some of the folks who would do it, including me, probably,” Boxer said.
Barrasso, whose state is a major exporter of coal and electricity, also touched on a major legal criticism of the
new source performance standards (NSPS), arguing that the recent Energy Department (DOE) decision to scrap funding
for the FutureGen carbon capture sequestration (CCS) plant shows the technology is not “adequately demonstrated” as
the Clean Air Act requires.
“How can the federal government require the private sector to build CCS power plants under your proposed rule
when it can’t even build a CCS plant on its own?” he said.
The NSPS’ emission standard for new coal plants is based on an emissions level achieved by a plant using partial
CCS, but the rule technically would not require use of the technology. “The rule in no way requires anybody to build
anything in particular, including CCS,” McCabe replied.
Barasso also referenced a recent report from the National Coal Council — a DOE advisory group — that argued
CCS was not adequately demonstrated. “The energy experts are telling DOE that CCS isn’t adequately demonstrated. My
question is, is the EPA really listening?”
McCabe said EPA is “paying attention to all the input we’ve gotten” on the NSPS. “I’ll note that since last fall there
has been a plant operating, using CCS at 90 percent capture. That is moving along as everybody expected. That’s a
technology that’s out there in use, and that’s certainly not the only example.”
McCabe was referencing SaskPower’s recently launched Boundary Dam CCS project in Canada, a facility that
sources have said will be a key piece of evidence EPA will use to justify its NSPS, given recent significant construction
delays and cost overruns at Southern Company’s Kemper plant in Mississippi. — Lee Logan
McCabe Again Signals Eased ESPS Targets But Touts Fund To Do ‘More’
EPA’s top air official Janet McCabe is again signaling the agency is likely to ease controversial interim greenhouse
gas (GHG) reduction targets in its proposed GHG rule for existing power plants, but says President Obama’s proposed $4
billion climate fund for fiscal year 2016 will help achieve emissions cuts beyond whatever is required in the rule.
“However [the guidelines] end up being finalized, in terms of the goals that EPA sets, the time frame that we set,
there’s more that can be done,” McCabe said during a Feb. 5 meeting of the National Association of State Energy
Officials (NASEO) in Washington, DC.
Her comments provide an early indication that the administration may seek to use the proposed $4 billion incentive
fund for states that go beyond their GHG targets as a way to address concerns that may result if or when EPA softens the
proposed rule’s interim emissions targets, which are shaping up as a premiere dispute between utility officials and
environmentalists (Inside EPA, Feb. 6).
Under the proposed existing source performance standards (ESPS), EPA set interim targets that must be met on an
average basis between 2020 and 2029 before states must meet a final 2030 limit. But many critics charge that the interim
targets are too steep, making it difficult to comply. Many have urged the agency to eliminate the interim targets and allow
states to only meet much more achievable 2030 targets.
But environmentalists strongly oppose this approach, saying it will not result in adequate emissions reductions and
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INSIDE EPA - www.InsideEPA.com - February 13, 2015
would allow cumulative emissions to increase relative to the proposed ESPS.
In her comments to the NASEO meeting, McCabe reiterated the agency’s desire to create a smooth “glide path” and
to avoid electric grid reliability issues when finalizing its GHG standards.
She said the agency is looking “very, very closely” at the issue, adding that the administration’s request in its fiscal
year 2016 budget for the $4 billion fund reflects that the rule would set a floor for carbon reductions in the power sector.
McCabe cited the interim targets as the issue EPA heard about the most in formal comments and meetings.
The agency has heard “concerns that the interim goals that we set required some states to do almost as much as they
need to do in 2030, by 2020,” she said.
“The idea [in setting the interim limits] was we wanted to make sure that progress was being made, but we recognize
that a lot of these [compliance strategies] do take a lot of time to put in place,” she said. “So the idea of a glide path was
to provide a glide path. We’re certainly looking at this very, very closely.”
She added that some groups have noted potential grid reliability concerns tied to steep reductions early in the ESPS
compliance period. Many of those concerns are “hooked in large part to how quickly reductions would have to happen,”
she said. “The president’s very clear direction to us is that reliability is an issue of first order in finalizing this rule, and
we are committed to that.”
EPA has earlier hinted that it could soften the interim goals, offering two ways to do so in an October notice of
data availability. McCabe also mentioned that notice in an EPA blog post pushing back on the notion that the ESPS would
threaten reliability.
Those signals could reassure utilities that EPA will ultimately soften the interim targets to make it easier for states to
achieve their final 2030 limits, though they could spark concern among environmentalists that the rule’s collective GHG
reductions could be undermined.
Robert Sussman, a consultant and former EPA senior policy counsel, earlier said that he expects EPA to soften the
interim targets somewhat, but that stakeholders have “persuasively argued” that EPA’s renewable energy assumptions can
be increased and there is room for a greater increase in natural gas use.
That means the 2030 targets “are certainly not going to be any less stringent than they are in the proposal, and they
may even be a little more stringent,” he said.
Similarly, the Center for Climate and Energy Solutions (C2ES) in Dec. 1 comments to EPA supported a proposed
change to phase-in targets associated with greater gas use — which would have the effect of softening the interim limits
— but said “we are not suggesting that any change to this effect should loosen the 2030 targets or the cumulative effect of
the Proposal over the course of the next decade.”
C2ES added: “If the interim targets are loosened, we recommend that EPA consider ways to tighten the final targets
such that there is no net increase in cumulative emissions between 2020 and 2030 relative to the Proposal.”
In addition to her comments on the interim targets, McCabe said the agency likely will bless “modular” multi-state
plans that only cooperate on certain issues, such as renewable energy and energy efficiency, and that EPA would issue
guidance on how to evaluate end-use efficiency gains when the ESPS is finalized in mid summer.
EPA’s air chief told the NASEO conference that while states are interested in broad regional compliance plans,
“many states feel like that’s a very big undertaking, to do something that’s very formal,” given that multiple state agencies
and governors would have to reach agreement.
But she said several states have asked “whether we would be open to sort of partial multi-state agreements.”
That approach has been prominently championed by California, which has suggested cooperating with other Western
states on issues such as renewable generation or efficiency — perhaps through tradable credits — while maintaining
separate state compliance plans and targets.
“Our reaction all along has been we’re open to anything in that regard — as long as we can all follow the strands of
spaghetti when we’re ultimately trying to figure out where reductions have happened and whether states are being able to
successfully implement their plan,” McCabe said.
A group of 10 Western states previously endorsed the concept of using such “modular” agreements for compliance,
and called on EPA to support the approach while not specifically committing to using those agreements in final compliance plans.
During a Jan. 29 event at the Bipartisan Policy Center, Arizona Department of Environmental Quality Director Henry
Darwin said he doesn’t believe “there’s enough time to develop multi-state plans, but I do think we need to do multi-state
collaboration.” He specifically cited the option of trading renewable energy credits, and said states and utilities should
work together to develop a system for such credits.
McCabe at the NASEO event also noted there is “a lot of interest in EPA helping to clarify and set a baseline for
what’s expected for credible” evaluation, monitoring and verification programs for energy-efficiency.
Such verification programs will be needed to help states track how much avoided generation — and thus GHG
emissions — they can take credit for in state plans due to efficiency programs, especially for states using rate-based
targets. “We understand this is absolutely essential foundational information,” McCabe said. “We are committed to
having something out around the time of the final rule on that.” — Lee Logan
INSIDE EPA - www.InsideEPA.com - February 13, 2015
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Stakeholders Debate TSCA Reform Fees . . . begins on page one
funded federal alternative. “As the conversation matures, that’s an important connection to make.”
Ernie Rosenberg, president and CEO of the American Cleaning Institute, told the same panel while there currently is
“no nexus between the preemption and fee discussions, I do think they inevitably will converge.”
Fellow panelist Herb Estreicher, of law firm Keller and Heckman, added, “I think industry would be happy to pay
user fees if they had a strong preemption provision,” suggesting a potential “trade off.”
EPA has long maintained that any legislation to overhaul the decades-old TSCA must include a mechanism for a
sustained source of funding for the agency to implement the bill’s new provisions. And agency officials indicated last year
that existing budget levels would likely produce between 10-20 chemical assessments per year — far less than what is
needed to tackle the thousands of chemicals that are already in the marketplace.
The funding issue raises questions including “What is the hook, what is industry getting, and what is the tollbooth for
collecting fees?” Rosenberg asked at the discussion on “The Price of Reform: Models for Financing TSCA 2.0,” hosted
by law firm Akin Gump Strauss Hauer & Feld and the Environmental Law Institute.
The issue of preempting state chemicals programs has long been a major hurdle to advancing TSCA reform, with
previous Republican-led bills drawing opposition from Democrats for blocking state efforts.
Sen. Barbara Boxer (D-CA) while chair of the Environment & Public Works Committee (EPW) in the 113th Congress refused to hold a markup on a bipartisan TSCA reform bill introduced by then-EPW ranking member Sen. David
Vitter (R-LA) and the late Sen. Frank Lautenberg (D-NJ) until her concerns about preemption were addressed. A compromise was not reached and TSCA reform did not advance in the Senate last year.
Similarly, divisions in the House over the preemption issue helped to kill the lower chamber’s TSCA reform push last
year. Rep. John Shimkus (R-IL), chair of the Energy & Commerce Committee’s environment panel, says he will start
anew on crafting a TSCA reform bill this year in a bid to win more Democratic support.
Some TSCA reform stakeholders have suggested the merits of crafting a TSCA reform bill first and punting a debate
over the bill’s preemption language until agreement is reached on all other aspects of the bill.
For example, Claudia Polsky, deputy attorney general with the California attorney general’s office, at a Jan. 27 ELI
event said, “The possibility of preemption has to be the last ask,” as the level of preemption that states could accept must
be viewed against potentially stricter EPA chemical rules under such a bill.
But Dunn acknowledged that the panel discussion “might be onto something with tying the fee” issue to the level of
preemption in a reform bill, which could finally resolve the long-running issue.
A potential agreement to preempt state programs in exchange for industry support of a comprehensive new fee
program to pay for implementing whatever EPA chemicals program would be created under a TSCA reform bill could
also help end prolonged uncertainty over how to pay for toxics law reform.
Panelists at the recent discussion questioned whether preemption could serve as incentive for industry to accept
user fees that would partially fund EPA safety determinations and other assessments on chemicals.
Similarly, other stakeholders voiced the concern that the TSCA framework does not provide similar incentives for
manufacturers to pay for reviews of chemicals already in the marketplace.
In contrast, under federal pesticide laws and the European Union’s REACH chemical safety program, a substance
must be registered or approved before being distributed in the marketplace.
Proponents of TSCA reform have suggested various options for addressing the funding issue for TSCA reform. For
example, industry-financed models used to pay for Food & Drug Administration drug approval programs, as well as
EPA’s own pesticide registration program — which sets fixed deadlines for regulatory action in exchange for user fees —
have been suggested as possible models for a TSCA fee structure.
“I don’t think current TSCA is set up for user fees at all,” Martha Marrapese, an attorney with the firm Keller and
Heckman, said during the discussion.
She noted that under the current TSCA framework, user fees would allow one company to pay a fee for a safety
assessment that competitors using the same substance could then take advantage of.
Richard Denison, senior scientist with Environmental Defense Fund, said that under the reform bills introduced last
Congress “I think there are hooks” for applying user fees, such as notification by companies of active manufacture and
reviews for substances designated “high-priority.”
ECOS’ Dunn suggested that one possible incentive for industry to partially fund EPA safety research might be driven
by the concern frequently cited by chemical manufacturers of states stepping increasingly into the regulatory arena with
their own toxics programs absent a strong federal program.
Last Congress, two Democratic TSCA reform drafts circulated in the form of marked-up bills addressed funding
mechanisms in an attempt to resolve the issue.
For example, a redlined draft House Democrats floated of a bill crafted by Shimkus contained a fee provision, and
Boxer also floated her own revisions to the Vitter-Lautenberg bill that would have directed EPA to determine “reasonable
fees.” Both the S. 1009 and Shimkus bills were silent on the issue of funding.
The Democratic models, however, did not propose to clearly set specific percentage of chemical reviews that the fees
10
INSIDE EPA - www.InsideEPA.com - February 13, 2015
would finance, Mark Duvall, of Beveridge & Diamond, pointed out at the legal discussion. He said that the plans would
instead “punt to EPA to set quote, reasonable, unquote, fees.”
ECOS’ Dunn said that TSCA reform proponents should begin thinking about whether a reform bill should set up a
fee structure or leave to the agency, the latter of which she said could “leave EPA in a complete vacuum and years and
years of litigation of the reasonableness” of the fee system the agency establishes.
Pat Casano, senior counsel at General Electric, also pointed out that it must be clear what sort of EPA chemical
assessments the fees would be supporting, noting that the agency’s Integrated Risk Information System reviews are far
lengthier and more costly than the TSCA “work plan” chemical reviews the agency conducts.
“We need to be very clear about what it is we want to fund, what kinds of assessments we want to pay for, what we
mean by robust . . . all that needs to be defined,” Casano said.
Some stakeholders also raised concerns that a user fee might face Republican opposition because it might be viewed
as a tax of sorts. “There’s a very practical concern here,” Duvall said, noting that if a fee is considered a tax, a reform bill
might have to go through the congressional finance committees in addition to environmental panels, facing additional
GOP scrutiny. — Bridget DiCosmo
EPA Crafts New Water Conductivity Method Following Advocates’ Pressure
EPA says it is crafting a field-based conductivity methodology for states to use in developing criteria for adoption
into water quality standards (WQS), following months of pressure from advocates for a uniform federal conductivity
policy but falling short of their push for a rule to codify the conductivity benchmark into water permits.
Environmentalists have long said there is uncertainty about whether EPA is using its conductivity benchmark following an appellate court ruling that upheld the benchmark but limited its application. As a result, advocates have in recent
months pursued various case-by-case Clean Water Act (CWA) permit challenges aiming to force use of the benchmark,
and have scored wins in suits challenging permits for discharges violating the benchmark.
Conductivity is a measure of salinity and the benchmark is the touchstone of the agency’s CWA contested guidance
for how states should permit mountaintop mining operations in Appalachia.
A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit last July upheld the guidance
in National Mining Association (NMA), et al. v. Gina McCarthy, et al., but limited its application, saying state permit
writers are “free to ignore” the guide’s advice when crafting state discharge permits. The court also said the agency may
not use the guide as a basis for enforcement for alleged violations of CWA permitting requirements.
But since the ruling, “it’s unclear what EPA is doing on the benchmark,” one environmentalist says, noting that
uncertainties include whether the agency is using the benchmark in permit reviews.
A second environmentalist says they are not aware of any permit in which EPA has objected in its review on the
grounds that there is no value for conductivity, selenium or the other benchmarks in the guidance.
In response to questions, an EPA spokesman says that mining projects are evaluated on a case-by-case basis to
address conductivity concerns, and permit reviews are “informed by appropriate science-based methods,” including the
benchmark, or “other levels as determined appropriate for specific streams.”
But the spokesman says that EPA is currently drafting a recommended field-based method for states to develop
ambient aquatic life water quality criteria for conductivity.
“Once final, states and authorized tribes located in any region of the country may use the method to develop field-based
conductivity criteria for adoption into water quality standards. The method would not impose any binding water quality criteria
on any state, but instead would provide recommendations to states as they develop such criteria,” the spokesman says.
EPA plans on releasing a draft for public comment in 2015, the spokesman says.
Absent a new formal EPA policy on the issue, environmentalists have targeted discharge permits for mining
operations in Appalachian states by filing site-specific permit challenges in district courts for failing to set numeric limits
for conductivity and other pollutants on the grounds that they violate state narrative water quality standards.
Environmentalists argue that their ongoing legal efforts to raise the conductivity issue in case-by-case CWA permit
fights should push the agency to ensure consistent use of the benchmark nationwide.
The second environmentalist says a recent federal district court ruling, Ohio Valley Environmental Coalition (OVEC)
et al v. Fola Coal Company, LLC, “should really embolden EPA to start implementing its guidance” given that it represents the first time a federal judge has weighed in with detail on the agency’s scientific support for the numeric limits.
Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 178415)
In a Jan. 27 memorandum order and opinion, Chief Judge Robert Chambers of the U.S. District Court for the
Southern District of West Virginia, Charleston Division, found a preponderance of evidence indicating that surface
mining “causes or materially contributes to high conductivity in adjacent streams and that, controlling for other potentially confounding factors, the unique ionic mixture of alkaline mine drainage is scientifically proven to cause or materially contribute to a significant adverse impact to the chemical or biological components of aquatic ecosystems.”
Chambers writes that the environmental group’s theory of causation is supported by EPA’s benchmark, and granted
INSIDE EPA - www.InsideEPA.com - February 13, 2015
11
deference to the agency’s “scientific determinations made within its area of expertise so long as the agency’s reasoning
and conclusions are rational — a hurdle easily cleared by the Benchmark.”
The district court ruling follows an agreement that environmental groups reached with industry to require a coal
company to comply with EPA’s numeric limit of 300 microsiemens per centimeter (uS/cm) of conductivity as the level at
which operators would be required to adopt best management practices to protect aquatic life was earlier this year upheld
by an appellate court but with limited application.
The proposed Dec. 15 consent decree would resolve the remedy phase of Ohio Valley Environmental Coalition
(OVEC), et al. v. Elk Run Coal Company, et al., in which the U.S. District Court for the Southern District of West
Virginia at Huntington in a landmark ruling acknowledged harms to water quality and aquatic life from excessive levels
of conductivity due to mining.
Industry, appealing the initial ruling to the U.S. Court of Appeals for the 4th Circuit, argued that discharges from its
sediment ponds were in compliance with the effluent limits for the pollutants regulated by West Virginia Department of
Environmental Protection under its delegated authority to issue federal discharge permits.
However, the 4th Circuit rejected the appeal in October. The appeal was discretionary because the remedy phase was
still proceeding at the district court level
Elk Run Coal Company and Alex Energy have agreed to take steps to
achieve a passing water quality score for receiving streams at four of their West Virginia mining operations by Aug. 1,
2019. The agreement would require meeting the numeric limit, or by installing a treatment system design to meet the
limit, unless the state were to adopt its own conductivity values, according to the legal pact.
In Elk Run, where industry pursued a defense based on whether the groups followed the appropriate process for
establishing causation, and in NMA v. EPA, which was decided based on whether the mining guidance was final agency
action under Administrative Procedure Act — neither case reviewed the science for the benchmark. But the district court
in Fola Coal examined the science underlying the benchmark.
Environmentalists are also pursuing another case against Fola Coal Company in the same district court, OVEC
v. Fola Coal II, which is slated for trial June 2, involving discharges from its operation in Clay County, WV.
Environmentalists claim that the discharges says runoff into a tributary of Elk River, causing conductivity and sulfate
levels of the waterbody to violate the state’s narrative standards.
In a Dec. 10 notice of intent to sue (NOI), Sierra Club, Ohio Valley Environmental Coalition, and the West Virginia
Highlands Conservancy charge that Hobet Mining’s Mud River watershed operations are in violation of the federal and
state Surface Mining Control and Reclamation Act (SMCRA) and the state’s mining control law (WVSMCRA), citing
discharges of conductivity, sulfates and other pollutants.
“If, within sixty days, Hobet does not bring itself into full compliance with SMCRA, the regulations promulgated
under SMCRA, and the WVSMCRA, as well as its mining permits, we intend to file a citizen’s suit in federal court
seeking an injunction and compelling Hobet to come into compliance with the applicable statutes, regulations, and
permits,” the groups say in the NOI.
And in a novel Jan. 29 ruling in the U.S. District Court for the Eastern District of Tennessee in Defenders of Wildlife,
et al. v. Jewell, et al., the court held that environmentalists have standing to pursue an Endangered Species Act (ESA)
challenge on the basis that federal agencies ignored “mounting evidence” that high conductivity levels harm two listed
species, the blackside dace and Cumberland darter, in two mines permitted by Office of Surface Mining (OSM).
The groups charge that OSM issued these mining permits without completing site-specific and species-specific
Endangered Species Act consultations with the U.S. Fish and Wildlife Service,” improperly relying on a 1996 biological
opinion which generally addressed surface mining in Tennessee under SMCRA.
The ruling, which appears to be the first in an ESA challenge involving conductivity, preserved the groups’ ability to
bring the challenge, finding that “upon consultation with the Fish and Wildlife Service, the OSM could impose measures
revising the reclamation plan to reduce post-mining, high-conductivity wastewater discharges.” — Bridget DiCosmo
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INSIDE EPA - www.InsideEPA.com - February 13, 2015
Advocates Eye EPA Suit To Force Strict Stormwater Permits Under TMDLs
Environmentalists are planning to sue EPA unless the agency issues new Clean Water Act (CWA) permits for currently unregulated stormwater runoff in five New England watersheds governed by CWA total maximum daily load
(TMDL) cleanup plans, ramping up advocates’ push to force EPA to tighten its national stormwater policy.
If the environmentalists succeed in either pressuring the agency to change its policy or through a lawsuit, it could set
a precedent for other watersheds. “Right now we haven’t really looked farther than these watersheds. But there are a lot
of TMDLs, that’s for sure. I wouldn’t doubt that there are more out there like this — maybe thousands,” says an attorney
with the Conservation Law Foundation (CLF), one of the groups threatening the potential suit.
TMDLs are a calculation of the maximum amount of a pollutant that a waterbody can receive and still safely meet
water quality standards. In order to satisfy the terms of a TMDL, state or EPA regulators have to issue CWA discharge
permits that will ensure the total TMDL limit is not exceeded. Environmentalists say that the TMDLs for the New
England watersheds effectively require permit writers to regulate stormwater in the areas.
In Feb. 10 letters to EPA, CLF and other environmentalist groups say they will ask a federal district court to force the
agency to exercise its little used “residual designation authority” (RDA) to mandate stormwater discharge permits for
“commercial, industrial, institutional, and high density residential” properties near Massachusetts’ Charles River and
Rhode Island’s Mashapaug Pond and Spectacle Pond, unless the agency voluntarily moves to issue those permits by April
11. Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 178747)
“The Administrator has failed to notify commercial, industrial, institutional, and high density residential stormwater
dischargers in the Charles River Watershed that they shall obtain permits . . . These failures violate the Administrator’s
nondiscretionary duties subject to citizen-suit enforcement,” the Charles River letter says.
A ruling for the environmentalists would trigger new requirements for property owners to control stormwater runoff
from their facilities, potentially including mandates for on-site retention as well as other mitigation practices — similar to
the action sought by CLF, Sierra Club and the Natural Resources Defense Council in 2014 petitions.
The letters claim that when EPA approved TMDLs for the waterbodies that included findings that stormwater runoff
was contributing to poor waterbody health, the agency “determined that these discharges contribute to violations of water
quality standards and that additional controls are needed to address stormwater pollution.”
CLF says that under EPA’s water permitting rules, the agency has no choice but to require property owners to seek
National Pollutant Discharge Elimination System (NPDES) permits after making such a finding.
“EPA’s regulations spell out what the Administrator must do when she determines that a stormwater discharger
requires a permit. . . . these regulations require that ‘the Regional Administrator shall notify the discharger in writing of
that decision and the reasons for it, and shall send an application form with the notice,’” the Rhode Island letter says,
quoting from EPA’s rules for requiring individual NPDES permits on a case-by-case basis for facilities that do not
normally require them, “because of their contributions to water pollution.”
While environmentalists have only sent notices related to the Massachusetts and Rhode Island suits, the CLF
attorney says there are likely many other active TMDLs with similar language that could be the subject of other citizen suits.
The Feb. 10 letters grew out of CLF’s petitions with other environmentalist groups that asked EPA regions to
voluntarily expand their stormwater permit programs by invoking RDA, which allows the agency to designate additional
commercial and municipal sources, such as parking lots, to be subject to NPDES requirements.
Those petitions, in turn, were filed after the agency indefinitely halted a long-pending rule to require on-site
stormwater retention at newly built facilities nationwide.
EPA rejected the petitions, saying environmentalists had not provided enough data to justify a categorical determination and that granting the petitions would result in massive new permitting burdens.
But CLF is now arguing that in at least some watersheds, EPA has already made the determinations that trigger RDA
mandates, and that the agency lacks discretion on whether or not to issue permits in those areas.
“In the response we received from Region 1, they said they had already determined that stormwater was a major
problem in these watersheds. So we decided to look closely at what those determinations entailed, and this is what we
found,” says the CLF attorney.
The source continues that although the Feb. 10 letters include residential areas, the environmentalists plan to focus
on commercial and large institutional facilities in other actions.
“When we refer to high-density residential it’s because of the way that TMDL was structured. In our petition we said
institutional and industrial facilities needed attention, but the Charles River TMDL didn’t label them the same way,” the
attorney says.
Meanwhile, environmentalists are continuing to seek stronger general stormwater permits at the state level,
and to petition state governments to tighten their stormwater permit programs, in lieu of stricter action from EPA.
For instance, CLF is petitioning Vermont to require NPDES stormwater permits for individual properties that
generate polluted runoff.
The petition submitted late last year asks state regulators to hold that properties that release runoff are “point source
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dischargers” subject to the CWA permit regime, rather than “nonpoint sources” that can only be regulated directly through
state programs.
“[T]he completely unregulated dischargers . . . present obvious candidates for NPDES permitting,” CLF’s petition
says.
In other regions, environmentalists are also pursuing challenges against new permits that they feel are not strict
enough. Most prominently, in Maryland, Waterkeeper, Sierra Club, the Natural Resources Defense Council and other
groups are litigating at least four separate cases against the state Department of the Environment over state-crafted
municipal separate storm sewer system (MS4) permits where the advocates are asking state courts to require timelines for
the discharges to meet water quality targets.
Key to the cases is judges’ interpretation of the CWA mandate for MS4s to reduce pollution in stormwater discharges
“to the maximum extent practicable (MEP).”
Environmentalists have argued that the MEP standard effectively requires MS4s to meet numeric targets for water
quality, while industry has insisted that it can only be held to require facilities to follow best management practices in
minimizing pollution. — David LaRoss
Gas Sector Seeks Credit For Methane Cuts . . . begins on page one
which regulates pipelines, says a key consideration in ratemaking is ability of operators to recover costs and provide a
profit to investors — which could be affected any new regulation of operators’ emissions.
Pipeline operators have developed a “heavy reliance” on voluntary programs to cut emissions from “blowdowns” and
other practices, and are likely to seek “complete credit and cost-recovery” for any EPA mandates to reduce methane
emissions “given that transmission pipelines are subject to rate recovery,” the source adds.
EPA originally issued a new source performance standard (NSPS) for the oil and gas sector that only affected new
drilling operations emitting volatile organic compounds (VOCs) but did not regulate methane. But the agency announced
last month that it plans to craft a revision to the NSPS to also impose direct methane limits, which could subject downstream operations — which unlike upstream sources do not emit VOCs — to some first-time controls.
Further, although the agency says it is not developing a methane rule for existing sources, environmentalists and
others say the NSPS revision will trigger a Clean Air Act mandate for such a policy. Downstream operators fear this
would impose strict new air mandates on years-old pipelines targeting their emissions.
The industry source argues that the downstream sector, which in addition to transmission pipeline operations includes
gas storage, will urge EPA to fully credit existing voluntary steps taken to cut methane under either the Clean Air Act
section 111(b) NSPS or a potential future section 111(d) existing source rule.
EPA will impose the new source methane limits with an air law section 111(b) new source performance standards
rulemaking. Under the law, once EPA sets regulations for new and modified sources under section 111(b), the agency
“shall prescribe regulations” that would require states to craft plans for meeting standards for existing sources — as the
agency is doing in its existing source performance standards for the power sector.
The legal language has alarmed many in industry who oppose and existing source rule and say the air law gives EPA
broad discretion on a timeline for acting on those sources even after proposing a 111(b) rule.
EPA chief Gina McCarthy told reporters during a Jan. 16 roundtable at agency headquarters in Washington, D.C. that
the Clean Air Act does not include a deadline for EPA to develop existing source regulations. She added that “The most
important thing to realize is if existing sources aggressively reduce their emissions then it’s not clear that there will be
cost-effective reductions that will necessitate regulation on existing facilities.”
Environmentalists, however, say EPA cannot indefinitely hold off on existing source regulations, suggesting that one
option to force the rulemaking might be a lawsuit claiming an “unreasonable delay” under the Administrative Procedure
Act for the existing source rules. That could tee up a legal debate likely to play out as EPA works to issue its proposal to
curb methane from new and modified sources by its anticipated summer target.
“EPA is legally required to set methane standards for existing sources when it has set the standards for new sources,”
one environmentalist says of the relevant language in the air law.
Environmentalists say an existing source rule is significant for the transmission and processing sector because those
sources tend to be replaced much less frequently than upstream sources such as production wells. That likely means that
the majority of emissions would come from existing sources because there are less “new and modified” sources to trigger
controls, and many downstream operations were not covered by the 2012 NSPS.
A second industry source says the threat of new regulations puts additional “pressure” on EPA to develop a
definition of “modified” that could capture the types of downstream sources it wants to regulate. The transmission official
says that while it is unclear how EPA will approach “modified” sources, historically the issue has been a “bone of
contention” over the power plant rules, and “my guess is it will be the same issue.”
The first industry source says for several years, 1,000 miles per year of transmission lines were being constructed to
keep pace with the rapid expansion in shale gas production, but that the additions now trend toward smaller pieces.
In EPA’s Jan. 14 announcement of its methane strategy, the agency also said it plans to develop guidelines to help
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states curb ozone-forming pollutants such as VOCs from existing sources in areas out of attainment with the agency’s
ozone national ambient air quality standards, and in the Ozone Transport Region of states with high ozone levels.
But the environmentalist says the ozone guidelines “don’t get at downstream sources,” adding that some transmission
sources “are a continuous problem” because they consist of small pieces of equipment such as pneumatics and compressors that move gas through transmission lines but are not subject to the guidelines because they emit little VOC emissions, and therefore should be regulated for their methane pollution.
But the gas sector continues to push back on the need for direct regulation of its methane emissions, with the American Petroleum Institute (API) touting a recent field study that it says undermines the case for such controls.
In that study, researchers from Colorado State University, Carnegie Mellon University and Aerodyne Research took
measurements of methane emissions at 45 transmission and storage facilities throughout the country, in collaboration with
Environmental Defense Fund, Dominion, Dow Chemical, Enable Gas Transmission Company, Kinder Morgan, Columbia
Pipeline Group, TransCanada and Williams.
At the 45 sites sampled, just two sites accounted for almost as much methane as the other 43 sites combined. The
higher emissions at the two sites were likely due to a faulty valve, says a Feb. 10 press release by the Interstate Natural
Gas Association of America (INGAA) on the study just published in the journal Environmental Science & Technology.
API’s Senior Director of Regulatory and Scientific Affairs Howard Feldman in a Feb. 10 statement touted the study
as helping make the industry’s case against methane rule.
“EPA’s own analysis shows that new methane regulations announced by the Obama administration are unnecessary in
view of the dramatic progress the oil and natural gas industry is already making in reducing emissions,” Feldman said.
“New regulations on methane emissions may score positive headlines and political points, but they may also undermine
President Obama’s overall climate goals, as well as job-creating energy development. Regulatory policy should be based
on science, not politics.”
The gas sector is “taking concrete steps to reduce methane emissions from their systems and have made commitments
to find ways to curb releases even further,” INGAA said in its statement.
The study “indicates a need to focus methane management measures on sites and equipment with the highest emissions profile,” INGAA President and CEO Don Santa noted in the press release, saying the study is “very consistent” with
steps operators are voluntarily taking to reduce emissions.
A similar study by the same researchers published in the journal at the same time measured methane emissions at 114
gathering facilities and 16 processing plants, finding that the distributions were skewed among gathering facilities, with
30 percent of facilities contributing 80 percent of the total emissions. — Bridget DiCosmo
GAO Says Climate, Toxics Still Government ‘High Risks’ Despite Progress
The Government Accountability Office (GAO) says management of climate change risks and EPA’s ability to asses
toxic chemicals remain “high risk”areas requiring Congress and the administration to act, despite some progress such as
President Obama’s crafting of climate change policies and EPA’s bid to improve toxics management.
In a Feb. 11 report, “High Risk Series: An Update,” GAO describes the status of programs of concern that were
included in a similar 2013 report. “Solutions to high-risk problems offer the potential to save billions of dollars, improve
service to the public, and strengthen government performance and accountability,” it says. The report is available on
InsideEPA.com. See page 2 for details. (Doc. ID: 178823)
GAO first listed the financial risks of climate change’s adverse impacts as a high risk for the federal government in
the 2013 report, a major finding that was seen as boosting calls for EPA to regulate greenhouse gas (GHG) emissions.
The agency has developed several GHG and fuel economy rules for vehicles, and Obama has proposed his Clean Power
Plan that includes proposed climate rules for both existing and newly constructed power plants.
On managing climate change risks, GAO says the June 2013 Climate Action Plan and November 2013 Executive
Order 13653 on Preparing the United States for the Impacts of Climate change show how federal agencies have made
some progress on better organizing across agencies, within agencies and among different levels of government.
But this leadership needs to be sustained and include an increased focus on implementing the federal plans, the report
says.
“While individual agency actions are necessary, a centralized national strategy driven by a government-wide plan is
also needed to reduce the federal fiscal exposure to climate change, maximize investments, achieve efficiencies, and
better position the government for success,” GAO says. But “[t]he challenge is to develop a cohesive approach at the
federal level that also informs state, local and private-sector action,” the report adds.
Among the “many” areas that GAO says may need additional attention are incorporating climate change information
into infrastructure planning processes and determining how to account for climate change in National Environmental
Policy Act analyses; providing the best available climate-related information to decision makers at all levels and assisting
them in translating available climate-related data into information that officials need to made decisions; and addressing
potential gaps in satellite data.
The GAO report says its recommendations echo many of the same actions outlined in a November 2014 report to
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President Obama from the State, Local and Tribal Leaders Task Force on Climate Preparedness and Resilience.
On the separate high risk issue of managing toxic chemicals, the report says EPA has not fully addressed
recurring issues concerning the clarity and transparency of its development and presentation of draft Integrated Risk
Information System (IRIS) assessments, and has not addressed other long-standing issues regarding the availability and
accuracy of current information to IRIS users.
GAO says “EPA needs to work with Congress to ensure that the resources dedicated to IRIS activities are sufficient
to maintain a viable IRIS database of chemical assessments that are produced in a timely manner.”
Additionally, EPA should continue to use its independent scientific advisory boards “to monitor and independently
validate the effectiveness and sustainability of EPA’s IRIS assessment process — including the changes made to the IRIS
process in response to the National Academies’ suggestions.”
The report notes that in the absence of congressional reform of the Toxic Substances Control Act (TSCA), EPA has
been working since 2009 on using its existing authorities to better regulate chemicals. And the 2013 report found EPA had
made progress in implementing its new approach.
But EPA needs to take additional action, GAO says. EPA and Congress need to ensure that the resources dedicated to
TSCA activities are sufficient to effectively implement TSCA, and “EPA must also demonstrate progress toward fully
utilizing existing TSCA authorities, identifying needed legislative changes, and continuing to work with Congress to
facilitate these legislative changes to TSCA,” the report says.
For example, EPA has not clearly articulated how it will address challenges associated with obtaining toxicity and
exposure data needed for risk assessments, and placing limits on or banning chemicals under existing TSCA authorities,
the report says. — Lara Beaven
EPA’s Permit Doubts Highlight Groundwater Debate . . . begins on page one
“The real question here is if pollution from the mine’s tailings basin seeps out and ends up in surface water, can
regulators pretend that groundwater standards are the only ones that apply,” one environmentalist says.
Environmentalists expect the Minnesota Pollution Control Agency (MPCA) to issue in mid-February a formal draft
permit for public comment for the Minntac tailings basin in Mountain Iron, MN, which is managed by U.S. Steel.
EPA outlined its concerns to state regulators in a Dec. 19 letter from EPA Region 5 National Pollutant Discharge
Elimination System (NPDES) program branch chief Kevin Pierard.
“We are concerned that this draft permit as written does not address, under MCPA’s approved National Pollutant
Discharge Elimination System program and in accordance with the Clean Water Act (CWA), all discharges to surface
waters from this tailings basin,” Pierard writes. Relevant documents are available on InsideEPA.com. See page 2 for
details. (Doc. ID: 178822)
At the root of EPA’s concerns is language in the state’s preliminary draft permit and accompanying fact sheet
indicating that runoff occurs through seepage at the basin, causing exceedances of WQS for surface water, which Pierard
says in the letter means a NPDES permit must include extensive and specific controls and definitive timeframes for
curbing such discharges.
“Based on this and facts supporting this conclusion, the CWA requires a NPDES permit for all such discharges to
surface waters from the tailings basin,” the letter says, noting that while the basin is operating under the original 1987
permit, that permit did not consider the full extent of the possible discharges to surface water.
“In the years between expiration of that permit and today the discharges to surface waters have continued and are
better understood,” Pierard writes.
The permitting dispute follows a federal court ruling from last year finding that a Hawaii wastewater reclamation plant discharged pollutants into the Pacific Ocean via underground springs, largely seen as highlighting the need for
courts to clarify how CWA jurisdictional claims via groundwater connections are decided — a key question emerging
from EPA’s proposed jurisdiction rule.
In that case, the U.S. District Court for the District of Hawaii in its May 30 ruling in Hawaii Wildlife Fund v. County
of Maui says that while it granted the environmental plaintiffs’ motion for partial summary judgment because a dye tracer
test showed effluent migrating from the plant to the ocean, establishing CWA jurisdiction in similar cases absent such
tests is a murkier issue.
Observers said the ruling is likely to shed more light on how jurisdictional determinations involving groundwater are
made, given that EPA and the Army Corps of Engineers’ proposed rule seeking to clarify the scope of the water law
clearly exempts groundwater as being covered by the CWA but also acknowledge that waters with “shallow subsurface
connections” to traditionally navigable waters may be jurisdictional.
The district court in Hawaii Wildlife Fund cited a 2006 U.S. Court of Appeals for the 9th Circuit ruling, Northern
California River Watch v. City of Healdsburg, which is seen as upholding the possibility of regulating groundwater under
the CWA when it serves as a medium through which pollutants are channeled into jurisdictional waters.
Minnesota’s draft permit would supersede the previous permit, issued in September 1987 but still covering the
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facility because of a state law allowing an expired permit to continue to apply as long as the facility applies for a new
permit, though a minor permit modification was done in 2010 to allow for construction of a seep collection and return
system.
The preliminary draft permit would cover the approximately 8,700-acre facility, which includes the basin, the
drainage area contributing surface runoff to the basin, and wastewater disposal systems within the area, as well as part of
the processing plant area.
But as EPA points out in the letter, MPCA’s proposed approach would “establish a compliance schedule that does not
set a date by which compliance with surface water quality standards will be achieved nor does it describe the steps
necessary to achieve compliance with these standards.”
In a Dec. 19 letter, the group Water Legacy has raised similar concerns to those of EPA, saying it appears the permit
would take the position that seepage cannot be regulated under the CWA, despite what the groups says is years of
hydrologic data showing a connection through which sulfates and other pollutants enter surface water.
Specifically, the group takes issue with the monitoring locations in the draft permit plans, saying they are not designed to ensure identification and control of pollutants at the nearest points where Minntac Tailings Basin discharges
daylight to surface water.
“In the face of clear evidence of the hydrological connection between Minntac Tailings Basin pollutants and surface
waters, regulation under the Clean Water Act NPDES program is required to protect beneficial uses in connected surface
waters under applicable law,” the group says, citing the Hawaii Wildlife Fund ruling. — Bridget DiCosmo
EAB Backs EPA’s CWA Permitting Authority For ‘Satellite’ Sewer Systems
EPA’s Environmental Appeals Board (EAB) in a new order is backing the agency’s authority to require Clean Water
Act (CWA) discharge permits for municipal “satellite” sanitary sewer systems that collect wastewater from different
entities and send it on to treatment plants, years after EPA dropped plans for a satellite sewer system CWA rule.
The board’s unanimous Feb. 4 order rejects claims by four Massachusetts towns that EPA exceeded its powers by
including their sewer systems into a single National Pollutant Discharge Elimination System (NPDES) permit for the
publicly owned treatment work (POTW) that treated the collected wastewater. The towns could now appeal the order to
federal appeals court, but at press time it was unclear whether they plan to do so. The order is available on
InsideEPA.com. See page 2 for details. (Doc. ID: 178665)
Under the CWA, “the term ‘treatment works’ includes ‘sewage collection systems, pumping, power and other
equipment, and their appurtenances’ and ‘sanitary sewer systems.’ . . . the Towns’ satellite sewage collection systems and
the permitted facility comprise the POTW, which discharges from a point source,” says the EAB’s order, which rejects the
towns’ petition for review of the permit in the case In re: Charles River Pollution Control District.
The case revived conflict over the agency’s aborted 2010 effort to craft formal rules for municipal satellite collection
systems, which regulators held listening sessions on but shelved due to budget constraints.
EAB upheld in its order a NPDES permit crafted by EPA Region 1 for the Charles River POTW that requires the
four towns to upgrade their sewer infrastructure to prevent permit exceedences in wet weather. It rejected arguments from
the towns that their sewer systems are legally separate from the POTW, and that their transfers of wastewater to the
treatment plant are not “discharges” subject to permit requirements under the CWA.
While the definition of POTW set out in CWA section 212 includes collection systems, the towns argued in their
briefs that section 212, which deals with funding for infrastructure improvements, is not meant to apply to the law’s
permitting program.
But EAB held that cross-referencing in the CWA and in EPA’s rules between the two sections, as well as others covering
pretreatment requirements for treatment plants, shows that the definition was intended to apply broadly and allowed the satellite
permit that covered the towns’ sewer collection systems and the POTWs to which they delievered their wastewater.
“EPA clearly intended the definition of POTW to encompass the CWA section 212 definition for purposes of both the
NPDES and the pretreatment programs,” the board says.
In rejecting the towns’ claim that they are “indirect” dischargers exempt from permit mandates, the judges applied a
narrow reading of the water law’s definition of the term.
“Sources of indirect discharges are ‘industrial users.’ In this case, the satellite sewer collection systems collect and
convey wastewater from domestic sources to the POTW treatment facility, and there is no indication that the satellite
sewer collection systems are industrial users,” the order says.
The EAB judges also backed EPA’s decision to craft the permit under review even though it never received a formal
permit application from the four towns, instead responding to an application from the Charles River district by crafting a
permit that included the towns as co-permittees without first warning them of their new status.
Although members of the panel appeared critical of the agency’s permitting decision at Dec. 11 oral arguments, they
said in the Feb. 4 order that EPA’s decision to categorize the towns as co-permittees without early warning of that
decision was not ideal, but it was legal.
“The Board agrees with the Towns that more advance notice would be preferable but finds no legal error in the
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Region’s approach. A better practice would be for the Region to notify potential co-permittees individually of their status,
in advance of the permit proceeding, rather than announcing it by issuance of a draft permit because the public comment
period may be as short as thirty days,” the order says.
Finally, the board denied arguments the petitioners raised that EPA’s claims that it can issue permits like the one for
Charles River amount to a new legislative rule that should have undergone notice and comment, and pointed to the
aborted 2010 rule as evidence that the agency lacks authority to do so without a rulemaking.
But EAB rejected that argument, holding that “the Region is not imposing a new duty on the satellite collection
systems because that duty has always existed. The document merely is ‘reminding’ the systems of their duties under the
statute.” — David LaRoss
EPA Defends Authority For Novel Boiler MACT ‘Energy Assessment’ Mandate
EPA is defending its Clean Air Act authority for its novel requirement in its boiler air toxics rule that industrial
facilities conduct one-time “energy assessments” to improve boiler efficiency, a mandate that could affect a host of EPA
policies given its potential to encourage reductions in air toxics, energy use and greenhouse gases (GHGs).
In a Feb. 11 final brief in ongoing litigation over EPA’s maximum achievable control technology (MACT) air toxics
rule for larger “major” source boilers, the Department of Justice (DOJ) on the agency’s behalf says the assessments are a
legitimate measure for EPA to require beyond the “MACT floor” — the rule’s minimum emissions standard. The brief is
available on InsideEPA.com. See page 2 for details. (Doc. ID: 178824)
Under the Clean Air Act’s air toxics program, EPA can choose to impose “beyond-the-floor” measures if it deems this
necessary and cost-effective to reduce health risks, according to the brief.
The suit over the major source boiler MACT is proceeding in the U.S. Court of Appeals for the District of Columbia
Circuit in parallel with litigation over EPA’s air toxics rule for smaller “area” source boilers, as well as suits over a related
rule for commercial and industrial solid waste incinerators (CISWI) and a regulation defining waste used in combustion,
which determines whether facilities fall under the MACT or CISWI rule.
In the major source boiler MACT suit, United States Sugar Corporation, et al. v. EPA, et al., industry groups are
challenging the rule for setting excessively stringent standards beyond air law mandates. Major sources emit more than 10
tons per year (tpy) of one hazardous air pollutant (HAP) or 25 tpy of a combination of HAPs.
One part of the rule industry opposes is the requirement to conduct an energy assessment to measure the energy
consumption not just of the boiler itself, but of related equipment within an industrial facility.
Industry has argued that this is regulatory overreach, and that EPA has exceeded its statutory authority by regulating
equipment beyond the source category at issue, but DOJ rejects those claims.
The assessments include energy conservation measures and management practices. Their purpose “is to identify
processes and practices that will reduce or conserve energy consumption because ‘[i]mprovement in energy efficiency
results in decreased fuel use which results in a corresponding decrease in emissions (both HAP and non-HAP) from the
[boiler],’” DOJ says in its new brief, citing language in EPA’s final rule.
EPA in the rule says, “the scope of assessment is based on energy use by discrete segments of a facility and not by a
total aggregation of all individual energy using elements of a facility.”
DOJ in its brief therefore notes that the obligation for the energy assessments is not entirely open-ended, but is
instead tied to the components of the facility that together serve to increase or decrease HAPs. As such, the assessments
“cannot be considered to be beyond EPA’s authority,” DOJ argues. “While emissions are generally measured at the boiler
or other combustion equipment from which hazardous pollutants emanate, Congress did not limit EPA’s regulatory
authority to that specific combustion equipment,” the brief says.
Also, DOJ notes, the assessments are not unduly expensive, and facilities are not forced to take steps to reduce
energy use in line with the assessments’ findings. Boiler owners and operators “are expected to voluntarily use the results
of the assessment to increase the energy-efficiency and cost-efficiency of their boiler system.”
While reducing toxics and other traditional air pollutants through increased energy efficiency is a stated goal of the
assessments, EPA in its final rule also acknowledged that the addition of certain control technologies to limit toxics from
some boilers may lead to a rise in energy use and increased GHG emissions. Making boilers more efficient would
therefore serve to counteract this by reducing energy consumption and GHGs.
DOJ in its brief also rejects various other arguments industry groups have raised against the boiler MACT. For
example, DOJ again defends EPA’s method of setting MACT on a “pollutant-by-pollutant” basis, which EPA says is the
only legal and practical way to set sufficiently tough emissions limits. Industry says this approach leads to standards that
often no one source can meet.
Also, DOJ says EPA is correct not to take periods of startup, shutdown and malfunction into account when setting
MACT floors, as to do so would be “impracticable.”
DOJ also rejects environmentalists’ criticisms that its use of carbon monoxide (CO) as a “surrogate” for other
pollutants is inappropriate, because it underestimates toxic emissions, and hence is illegal. CO is an “overly conservative
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surrogate because elevated CO levels can persist when all the organic compounds have been destroyed,” DOJ says.
EPA also again defends its use of a statistical method called the Upper Prediction Limit when calculating
MACT floors. Environmentalists say the method is not an “average” of the best performing units’ emissions, as
required by the air law, but DOJ says the technique is legitimate to account for variability in sources’ performance
over time. — Stuart Parker
Advocates, Industry Raise Competing Defenses Of EPA’s Incinerator Air Rule
Environmentalists and industry groups are raising competing defenses of EPA’s emissions rule for commercial and
industrial solid waste incinerators (CISWI), filing new legal briefs that aim to undermine each others’ arguments about
alleged flaws in the rule — one of several combustion rules currently being litigated in a federal appeals court.
The CISWI rule is part of a package of regulations that also includes maximum achievable control technology
(MACT) air toxics rules for large “major source” and smaller “area source” boilers, and a rule defining which materials
are classed as “fuel” eligible for use in boilers and which are “waste” that must be incinerated. All are being litigated in
parallel proceedings ongoing in the U.S. Court of Appeals for the District of Columbia Circuit (Inside EPA, Jan. 30).
In the CISWI litigation, known as American Forest & Paper Association (AF&PA), et al. v. EPA, et al., various
industry organizations, including AF&PA, the American Petroleum Institute and the American Chemistry Council, and
environmental groups, including Earthjustice, Sierra Club, Clean Air Council and others, filed competing briefs Feb. 9.
Relevant documents are available on InsideEPA.com. See page 2 for details. (Doc. ID: 178737)
The brief filed by industry groups defends various aspects of EPA’s incinerator emissions rule faulted by the advocacy organizations, while environmentalists defend EPA against industry attacks on the rule.
In their brief, environmentalists defend EPA’s use in the rule of some methods that have frequently been challenged
by industry in court. For example, they defend EPA’s consideration of the pollutant content of waste as a factor in
determining which incinerators are the cleanest-emitting. EPA under the rule sets MACT air toxics standards by measuring the performance of the 12 percent least-polluting sources in a given category.
Industry argues in the case that EPA must set the MACT “floors,” or minimum emissions standards, without allowing
cleaner-emitting “inputs” to affect its calculation. Environmentalists in their brief counter that, “The Clean Air Act does
not permit EPA to exclude units with cleaner inputs from the floor calculations,” because MACT must be set based on the
lowest emissions “actually achieved in practice.”
Environmentalists also defend EPA setting the MACT standards on a “pollutant-by-pollutant” basis, which they
insist is the only way to interpret the air law, as to do otherwise would require calculating MACT floors using sources
that only meet the 12 percent threshold for some pollutants but not others.
Industry says that taking such an approach ignores reality, as in many rules no existing single unit maximizes reductions of all the pollutants it emits. But the environmental groups in their brief say “EPA was correct to base floors on the
best-performing incinerators for each regulated pollutant, rather than attempting to base floors on unidentified incinerators that are somehow ‘best’ for all pollutants at once,” and say the air law mandates this approach.
They further defend EPA’s decision not to allow emissions averaging across different sources, which industry has
advocated. Air law section 129, regulating CISWIs, refers to emissions “units” and hence “unambiguously precludes
compliance through facility-wide averaging,” according to the brief.
After the D.C. Circuit in earlier litigation ruled regulatory exemptions for periods of startup, shutdown and malfunction (SSM) illegal, EPA has sought to remove such exemptions from various air rules, prompting industry to call for such
periods of higher pollution to be taken into consideration when EPA sets the MACT floors themselves. EPA denies that it
must do so, and environmentalists in their brief agree.
They say that, procedurally, industry cannot simply incorporate claims that the CISWI standards are “unachievable”
by reference from the related lawsuits over the boiler MACT standards.
Also, EPA is correct to reject industry’s push for “work practice standards” to cover SSM periods, rather than
tougher numeric emissions limits, because “EPA correctly concluded that it lacks statutory authority to set work practice
standards for CISWI,” which are regulated under a different air law section than boilers, they say.
The broad industry coalition including AF&PA and other groups in its Feb. 9 brief defends EPA’s CISWI rule
from criticisms that environmentalists have raised over various other provisions.
For example, industry says that EPA correctly excluded “burn-off ovens” from the regulation. EPA said it lacked
enough data on these, and industry now says that because these ovens clean equipment by burning off contaminants,
rather than incinerating waste, they are correctly excluded from the rule.
Also, EPA can legitimately use statistical techniques called the Upper Prediction Limit or Upper Limit (UPL/UL)
when setting MACT floors to reflect the likely performance of regulated units in the future, industry argues.
EPA says this is a realistic approach that accounts for variability in performance, but environmentalists counter that it
violates the air law requirement to use a true “average.”
Although the D.C. Circuit remanded a sewage sludge incinerator rule to EPA in 2013 over the UPL/UL issue,
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industry groups say the agency has since fully explained itself and satisfied that remand.
Industry groups further argue that EPA was correct to allow a 30-day averaging period when using continuous
emissions monitoring systems, which they say reflects variability in performance and does not, as environmentalists
claim, weaken the standard.
Also, industry groups say EPA had no obligation to set tougher standards that go “beyond” the MACT floor. The court
“should grant EPA appropriate deference on these and other technical determinations, including standard-setting and its decision
that beyond-the-floor standards were not achievable considering the relevant statutory factors,” they argue. — Stuart Parker
Ahead Of 2017 Assessment, Groups Eye More Chesapeake Bay Controls
Ahead of a planned 2017 reassessment of the Chesapeake Bay cleanup plan, environmentalists are beginning to
target advanced wastewater treatment techniques as a key strategy in offsetting the loss of a substantial trap for sediment
and nutrients that is nearly full.
But any push for tighter discharge limits for publicly owned treatment works (POTWs) is likely to meet with stiff
opposition from treatment plants, which have long argued they should not bear the brunt of nutrient reductions when
agriculture and other nonpoint sources are the largest contributors to bay pollution.
The additional reductions are necessary because three hydroelectric dams in the lower Susquehanna River, which had
been capturing sediment and nutrients for decades, have reached their limit, according to a draft report prepared last fall
by the Army Corps of Engineers and the Maryland Department of the Environment (MDE). The Susquehanna River is the
bay’s largest tributary. The report is available on InsideEPA.com. See page 2 for details. (Doc. ID: 177801)
The draft Lower Susquehanna River Watershed Assessment (LSRWA) report, which the Corps and Maryland expect
to finalize this summer, calls for further study on the dams’ effects on water quality in the Chesapeake Bay and recommend that watershed implementation plans (WIPs) states developed for the cleanup plan’s third phase in 2018 reflect the
results of the assessment.
EPA anticipated the need to re-assess sediment accumulation at the dams, particularly at Conowingo dam, the largest
of the three, during the 2017 mid-point assessment, writing into the 2010 total maximum daily load (TMDL) main report
and supporting technical appendix T that the agency “would consider adjusting the Pennsylvania, Maryland, and New
York sediment and associated nutrient load reduction obligations based on the new delivered loads to ensure that they
were offsetting any new loads of sediment and associated nutrients being delivered to Chesapeake Bay,” according to the report.
A source from the LSRWA team says the Chesapeake Bay Program partners will ultimately decide “how any increased [nutrient and sediment] loads will be divided . . . and how they are achieved,” but the source added that all seven
WIPs could be modified to mitigate for the dams’ diminished capacity to store sediment and nutrients.
“We don’t know how this is going to play out, and that is the point of the mid-point assessment,” the source says. “If
we feel that is the best way to do it, then that will be the decision we make.”
An environmentalist source says reducing nutrients and sediment upstream of the dams “is the obvious answer,”
although the source adds “there are a lot of ways that we could get reductions from loads into the bay . . . theoretically
going beyond Susquehanna watershed.”
The Army Corps and MDE determined that the primary impact on water quality comes from the nutrients associated
with the sediment rather than the sediment itself, saying that reducing nutrient pollution into the upper Susquehanna River
is the most cost-effective option.
Wastewater treatment facilities in Pennsylvania’s portion of the Chesapeake Bay watershed are already undergoing $1.4 billion of system upgrades to meet TMDL wasteload allocations for sediment and nutrient discharges into the
Susquehanna River. But the environmentalist source says additional opportunities exist to limit nutrient pollution in
upgrading wastewater facilities to enhanced nutrient reduction (ENR), a process that is more sophisticated and more
expensive than the biological processes currently in place.
“It probably wouldn’t be the only thing that needs to be done,” the environmentalist source says. The solution would
need to involve multiple strategies because “clean up plans are already fairly aggressive for every state, so there isn’t a lot
of room for more.”
The environmentalist source says a plan could also include “thinking even more creatively about looking at things
like oysters and mussels” which filter nutrients and sediment, but environmentalists are “reluctant to say let’s do more
oyster stuff” because of uncertainties regarding effectiveness. “A lot of it is also limited by dollars,” the source says.
But a Pennsylvania wastewater treatment source says the focus of nutrient reductions should be on agriculture, which
contributes 54 percent of the state’s nitrogen and 59 percent of the state’s phosphorus pollution to the Chesapeake Bay,
compared to the wastewater sector’s contribution of 9 percent of the state’s nitrogen and 17 percent of the state’s phosphorus pollution to the bay.
Adding ENR to POTWs would only reduce the wastewater sector’s nutrient contribution by “single-digit percentages,” the source says.
“We’re not the biggest contributor of any of those things. So to come back to the sewer plants and say you need to
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INSIDE EPA - www.InsideEPA.com - February 13, 2015
get more phosphorus out, it’s not going to dent what is coming out of nonpoint sources,” the wastewater source says. “It’s
time for reductions to come from other sectors. There’s not a lot left from sewer treatment plants.”
The wastewater source says that ENR has been estimated to cost “another $1.4 billion plus” and additional upgrades
would likely raise rates for the facilities’ users, noting that the original upgrades came with rate increases.
“All of them saw their bills increase, but some of them saw significant increases. Sometimes bills doubled, and more,
because it was pretty costly to go in and do that,” the wastewater source says. — Chris Cotelesse
EPA Defends Exposure Considerations In Novel Dioxin Cleanup Standards
EPA is defending its recently finalized goals for removing dioxin from a Michigan river floodplain, saying its
reliance on exposure data to craft site-specific cleanup standards is consistent with agency policy, though advocates argue
the numbers are inadequate and say EPA is paving the way for inconsistent cleanup standards around the country.
In a Jan. 8 Enforcement Action Memorandum for the Tittabawassee River floodplain, posted to a recently updated
website, EPA finalizes cleanup standards for dioxin-contaminated soil in maintained residential areas and other land areas
to protect against exposures to dioxin through human contact with and incidental ingestion of soil. Relevant documents
are available on InsideEPA.com. See page 2 for details. (Doc. ID: 178716)
Last fall, environmentalists objected to EPA’s proposed cleanup levels of 250 parts per trillion (ppt) in residential
areas and 2,000 ppt in other land areas, including farms, commercial areas, parks and a wildlife refuge, saying they fail to
adequately account for various exposure pathways and are far weaker than a 50 ppt limit EPA floated for the site in 2012.
And environmentalists are continuing to raise concerns about the finalized plan, saying it reveals the limitations of
the risk assessment process and that finalizing the cleanup goals before completing human health and ecological risk
assessments is “illogical.”
EPA in the memo acknowledges that the floodplain soil may pose imminent risk to public health and the environment
if not cleaned but defends its decision to finalize without change its proposed remediation plan.
“Because there are valid site-specific exposure values, use of EPA’s 50 ppt screening level is not required or appropriate,” EPA says in the Jan. 8 response to comments document, attached to the enforcement action memo. EPA and the
Michigan Department of Environmental Quality (DEQ) “believe that the Cleanup Numbers are protective for people who
come in contact with Floodplain soil.”
The memo says agency staff along with DEQ will continue to evaluate other potential pathways of exposure at the
site, including consumption of food raised in the floodplain, and may propose other cleanup options in the future. But the
agency also adds that exposure through consumption of animal products is not likely to be a concern because that
pathway does not appear to be typical in the floodplain.
DEQ, in formal comments on the proposed cleanup plan, had raised concerns that the remediation would not protect
against potential risks from consuming animal products raised in the area (Inside EPA, Dec. 26).
EPA and DEQ are working with Dow Chemical Co., the responsible party for the cleanup, on the overall
Saginaw-Tittabawassee River and Bay site. The floodplain cleanup is being closely watched by environmental
groups who say EPA’s handling of the site could set a precedent for how the agency considers site-specific factors in
implementing its non-cancer risk estimates for dioxin, crafted in EPA’s 2012 Integrated Risk Information System
(IRIS) assessment.
Dioxin is a category of persistent and accumulative chemicals inadvertently created through industrial processes that
involve incineration and also through the burning of trash and forest fires. It was a primary ingredient in the herbicide
Agent Orange used during the Vietnam War.
Environmentalists have long urged EPA to strengthen dioxin cleanup requirements and generally praised the 50 ppt
limit EPA floated in 2012, which was significantly more stringent than a 1,000 ppt limit that EPA set in 1998. The 2012
IRIS assessment of dioxin’s non-cancer risks was part of a reassessment of dioxin’s health risks that the agency announced in 2009, though IRIS has yet to complete the cancer portion of that assessment.
EPA’s February 2012 IRIS non-cancer risk assessment of 2,3,7,8-tetrachlorodibenzo-p-dioxin, the most toxic form of
the compound, set an oral reference dose (RfD) — or amount below which EPA expects no adverse health effects if
ingested daily for a lifetime — of 0.7 picograms per kilogram bodyweight per day (pg/kg-day)e-1, from which the agency
derived the 50 ppt cleanup standard, floated for the site in 2012.
With the non-cancer RfD from the 2012 IRIS assessment and default exposure factors, EPA set screening values
of 50 ppt for residential soil and 730 ppt for commercial or industrial soil, the memo says. But EPA also says the agency
“has an expectation that the Regions often will prefer site-specific data that can be used to adjust these values using sitespecific exposure factors instead of the default exposure factors.”
The EPA memo also says that considering exposure is consistent with agency practice. The cleanup goals for the
Tittabawassee River floodplain are based on risk of contact exposure and incidental ingestion, and account for sitespecific information on exposure and absorption, such as weather data showing floodplain soil is frozen or snow covered
for parts of the year, which limits exposures, and Dow studies showing various factors may limit the extent to which
INSIDE EPA - www.InsideEPA.com - February 13, 2015
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contamination is absorbed into animals.
In the Jan. 8 memo, EPA says that human health and ecological risk assessments are required for the site but have not
yet been completed. But the agency adds that Dow and others have conducted detailed investigations of the floodplain to
support the response proposal, which was released public comment Aug. 6.
According to the memo, EPA and DEQ will continue to evaluate potential risks, including from eating animals or
animal products raised or caught in the floodplain or from secondary chemicals of concern, and identify other potential
response actions as appropriate.
In the response to comments, EPA also says that Dow is required to develop a monitoring plan for future land use at
the site and implement institutional controls to prevent exposures through consumption of animal products. Although EPA
does not anticipate exposure through consumption of animal products will be a pathway of concern, EPA, DEQ and Dow
have agreed to set up a process to inventory properties for agricultural uses and take action, if necessary.
While environmentalists, in comments, have criticized EPA’s use of Dow studies to reduce a default oral soil
bioavailability factor, the agency says an independent science advisory panel overseen by DEQ reviewed the study
designs and results of the industry-funded studies on bioavailability.
EPA’s default oral soil bioavailability factor, or relative bioavailability (RBA) of 1, assumes 100 percent of dioxins
present in contaminated soil could interact with an animal or human that ingested the soil, causing harm. In deriving
cleanup goals for the site, EPA and DEQ considered Dow studies of RBA of dioxin in soil and set a RBA of 0.43 for use
with EPA’s 2012 non-cancer RfD.
Environmentalists are continuing to raise concerns about the cleanup plan, including that the cleanup goals are
inadequate to protect public health, and that the plan focuses too narrowly on contact exposures with and incidental
ingestion of soil while ignoring other pathways, such as fish consumption.
A source with the Center for Health, Environment and Justice (CHEJ) says the cleanup plan reveals limitations of the
risk assessment process, arguing that weakening the 50 ppt screening level standard five fold to the 250 ppt limit because
of site-specific factors is inappropriate.
That the limit is based in part on Dow studies suggests future cleanups around the country will vary based on a
responsible party’s ability to develop site-specific information and influence cleanup decisions, rather than on consistent
nationwide policy aimed at protecting public health.
The source also says EPA should not have delegated future monitoring and institutional controls at the site to Dow.
Additionally, the source says, local residents should have been involved in setting the cleanup goals, rather than simply
being given an opportunity to comment on the decision after it had been proposed.
“The people who bear the risk should have an opportunity to decide what the number is, not just the opportunity to
comment on the decisions that others have made,” the source says.
A second environmentalist who is familiar with the site tells Inside EPA that some stakeholders have not been told
EPA finalized the proposal in early January and has completed a document responding to public comments.
The source called EPA’s finalizing the cleanup goals before completing human health and ecological risk assessments
“completely out of sequence and illogical.” And by focusing the cleanup plan on one contaminant, dioxin, and one
exposure pathway, EPA went against the current trend in federal risk assessment of seeking to account for the cumulative
effects of exposure to multiple chemicals from multiple pathways of exposure, the source says.
The decision to focus on exposures through contact with and accidental ingestion of soil is particularly surprising, the
second environmentalist says, given that EPA has long said fish consumption is the pathway of greatest concern for
exposure to dioxin and other chemicals of concern present at the site. — Dave Reynolds
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