|
Columnists
Regulatory
Developments
Michael
C. Ford Attorney Polsinelli
Shughart, PC
Ninth
Circuit Impairs NPDES Permitting
Feb/March
2008
Environmental decisions from the
Ninth Circuit are almost always interesting, though often short-lived.
1 The court’s recent decision interpreting NPDES
requirements2 is a showstopper for its far reaching
implications for prospective permittees, and water quality improvement
efforts. The decision involves Arizona’s own Carlota Copper project,
but it is not just about mining (although it certainly attests to the
potential difficulties in permitting a new hard rock mine in the United
States). It poses an enormous roadblock to many new dischargers in the
Ninth Circuit (which includes Arizona), and possibly beyond.
Carlota’s project involves
construction of an open pit copper mine near Miami, Arizona, with
associated processing facilities, and waste rock piles. Carlota’s
quest to obtain regulatory approvals for the project began over a decade
ago, and has involved an alphabet soup of regulatory agencies and
environmental decision documents, including ADEQ, EPA, USFS, ACOE, EIS,3
EA,4 TMDL,5 SEA,6
ROD, FONSI,7 EAB8 and SSS,9
as well as a who’s who phalanx of anti-mining extremist groups.10
In the NPDES subplot to the
saga, Carlota sought to obtain permit coverage for storm-water runoff
from its waste rock piles, a type of discharge routinely covered by a
general permit for industrial storm-water (e.g. MSGP 2005).11
However, early in the process (ca. 1997!), Carlota reluctantly acceded
to EPA’s request to apply for an individual permit. EPA’s concerns
stemmed in part from the fact that Pinto Creek had been designated as
"impaired" for copper, due primarily to discharges from
abandoned mines in the drainage, including the "Gibson Mine"
site. 12
EPA’s permit regulations
include a provision restricting the issuance of permits for new
discharges to a water not meeting applicable water quality standards,
which states:
No permit may be issued:
***
(i) To a new source or a new
discharger, if the discharge from its construction or operation will
cause or contribute to the violation of water quality standards. The
owner or operator of a new source or new discharger proposing to
discharge into a water segment which does not meet applicable water
quality standards … and for which the State … has performed a
pollutants load allocation for the pollutant to be discharged, must
demonstrate, before the close of the public comment period, that:
(1) There are sufficient
remaining pollutant load allocations to allow for the discharge; and
(2) The existing dischargers
into that segment are subject to compliance schedules designed to
bring the segment into compliance with applicable water quality
standards.13
Carlota and EPA agreed to
include a special condition in Carlota’s NPDES permit whereby Carlota
would be required to undertake a cleanup project at the Gibson Mine
prior to discharging from its operations. The project was designed to
substantially improve runoff from the Gibson Mine site, and water
quality in Pinto Creek, by removing the identified major sources of
copper contamination in the drainage. The water quality benefits of this
project are projected to dwarf any pollutant contribution of Carlota’s
operations, thereby "offsetting" the discharges allowed by its
permit.
Under the offset concept,
Carlota’s discharge would not be construed as "causing or
contributing" to the impairment of the receiving water, rendering
the remainder of the regulation (load allocations and compliance
schedules) inapplicable. This approach is consistent with EPA’s
longstanding interpretation of its own regulations, and is designed to
encourage innovative approaches to improving water quality, while
allowing discharges with a net-positive water quality impact. The NPDES
permit was issued in July, 2000.
The NGOs challenged the permit
at every juncture, first forcing the permit to be withdrawn while the
agencies undertook additional assessment, and then challenging it before
the Environmental Appeals Board after EPA reissued the permit in
February, 2002. (Ironically, the ongoing NGO challenges delayed for many
years the cleanup of the acknowledged major source of contamination in
the drainage at the Gibson Mine, and the water quality improvements
provided for in the permit). The EAB issued an exhaustive decision in
2004 upholding the permit, which was then followed by the subject appeal
to the Ninth Circuit.
Before the Ninth Circuit, EPA
and Carlota argued that the 122.4(i) restrictions were not applicable
because Carlota’s operation would not "cause or contribute"
to the impairment given the offset provided by the Gibson Mine cleanup
condition.14 EPA/Carlota also argued that even if the restrictions
applied, the conditions were met because the TMDL study EPA completed
includes sufficient load allocations to allow Pinto Creek to meet
applicable water quality standards, and because EPA had included
appropriate discharge limitations in the permits it had issued to other
discharges along the creek.
The three judge panel of the
Ninth Circuit15 rebuffed EPA/Carlota at every turn, concluding
that the 122.4(i) restrictions prohibit any quantity of discharge
from a new source/new discharge to an impaired water whatsoever,
regardless of any offsets, unless a TMDL has been performed
demonstrating load allocations will be met (query how exactly an agency
could make such a demonstration), and EPA has imposed at least
"compliance schedules" on all dischargers to the impaired
water (not just permitted, point sources).16 In doing so, the
court accorded absolutely no deference to EPA’s interpretations of its
own regulations, and in fact did not so much as mention this
well-accepted principle of judicial review.
The Carlota court’s
interpretation of the 122.4(i) discharge restriction, if it survives
appeal, may effectively prohibit the issuance of NDPES permits,
including general permit authorizations, to new dischargers on impaired
waters. The § 122.4(i) restriction applies to state NPDES program,
including Arizona’s,17 and thus the decision could affect
NPDES programs beyond those in the Ninth Circuit. As in most states,
Arizona has many water segments not meeting applicable standards (over
100), and the process of developing TMDLs takes years due to, among
other factors, the challenges of gathering sufficient data in a desert
environment. This fact is aptly illustrated by Pinto Creek, where the
TMDL process has been ongoing for over 10 years. The process of
developing "compliance schedules" for every discharger on an
impaired segment, as mandated by the Carlota court, could take many more
years, and in fact may not be possible under NPDES authorities, which
extends to point sources, but not non-point sources.
The decision could be broader
still if construed to apply to all types of new point source discharges
(process- and storm-water), including storm-water from construction
projects. The decision also severely undermines any incentive for
prospective permittees to undertake innovative offset projects to
improve water quality (such as Carlota has done at the Gibson Mine),
which will have a detrimental impact on water quality. Prospective new
dischargers impacting impaired segments would be left to engineer
facilities to a "no discharge" standard (rarely a guarantee,
due to the potential for floods or malfunctions/breakdowns, etc.), hope
for extraordinary agency efforts to develop the requisite TMDLs and
compliance schedules for all dischargers (often a practical
impossibility due to budgetary and workload realities), move the project
elsewhere, or abandon it altogether.
Carlota filed a petition for
rehearing with the Ninth Circuit on January 18, 2008, but the Department
of Justice (on behalf of EPA), in another surprising development,
unfortunately declined to file its own petition. Amicus briefs
are due February 5, 2008 (after this article went to press), and at
least a few stakeholder groups should file in support of Carlota, given
the drastic and far reaching impacts of the decision. We can expect to
hear this Spring as to whether the full Ninth Circuit will reconsider
the case, or Carlota will be left with a last resort petition to the
Supreme Court.
Footnotes:
1 19 of 22 9th Circuit cases
reviewed by the Supreme Court last term were reversed or vacated. http://www.latimes.com/news/opinion/la-oe-fitzpatrick11
jul11,0,6274474.story?coll=la-opinion-rightrail.
2 Friends of Pinto Creek v. EPA,
No. 05-70785, slip op. 13505 (9th Cir. Oct. 4, 2007).
3 Final Environmental Impact
Statement for Carlota Copper Project, U.S. Department of
Agriculture, Forest Service, Tonto National Forest, July 1997.
4 Supplemental Environmental
Assessment (EA), Final Section 404(b)(1) Evaluation, Public Interest
Review, Section 404 of the Clean Water Act [33 USC 1344], Permit
Application Number: 944-0899-MB, Applicant: Carlota Copper Company, United
States Army Corps of Engineers, January 1998;
5 Total Maximum Daily Load
for Copper in Pinto Creek, Arizona, U.S. Environmental Protection
Agency, Region 9, April 2001.
6 National Pollutant
Discharge Elimination System (NPDES) Permit Conditions for the Carlota
Copper Project, Gila and Pinal Counties, Arizona, Supplemental
Environmental Assessment, EPA, May 2001.
7 Amended Record of
Decision/Finding of No Significant Impact Statement, U. S. Forest
Service, and Supplemental Environmental Assessment, U.S. Army Corps of
Engineers, and Supplemental Environmental Assessment, U.S. Environmental
Protection Agency, for the Carlota Copper Project, U.S.
Environmental Protection Agency, Region IX, February 2002.
8 In re Carlota Copper
Company, NPDES Appeal Nos. 00-23 & 02-06, Environmental Appeals
Board , September 2004.
9 Draft Pinto Creek
Site-Specific Water Quality Standard for Dissolved Copper, Salt River
Watershed – HUC# 15060103-018, Gila, Maricopa and Pinal Counties,
Arizona, ADEQ, March 2007.
10 E.g. National Wildlife
Federation, Arizona Wildlife Federation, Grand Canyon Chapter of the
Sierra Club, Mineral Policy Center, Maricopa Audubon Society.
11 Carlota’s storm-water
retention basins would contain either the 10-year/24-hour or
100-year/24-hour storm event, so discharges would only occur during
larger rain events.
12 After further study, ADEQ has
since concluded (too late for purposes of this case, as Carlota’s bad
luck would have it) that Pinto Creek would not meet applicable water
quality standards due to natural background conditions alone, and
recently proposed a higher "site specific" copper standard for
Pinto Creek to reflect natural conditions. Supra, fn. 9.
13 40 C.F.R. § 122.4 (2000).
14 Also in the category of
post-decision developments, the Gibson Mine reclamation work was
recently completed, thanks in no small part to Carlota’s decision to
fulfill the condition in reliance on the EAB’s opinion upholding the
permit.
15 Opinion by Judge Hug
(appointed by President Carter), joined by Judges Gould and Tashima
(appointed by President Clinton).
16 Friends of Pinto Creek,
at 13515.
17 Ariz. Admin. Code
R18-9-A903(7) (2002). Arizona was granted NPDES primacy during the
ongoing Carlota dispute.
2008/1234
|
