Category Archives: Water

Discussion of water pollution, water supply and the law of water rights

The McCrory Administration Remakes the N.C. Water Quality Program

June 25, 2013:   The N.C. water quality program has been innovative, award-winning and a frequent target of complaints — complaints about  excessive regulation and complaints about poor customer service. The complaints probably result in part from the reach of water quality rules. Over the last 15-20 years,  water quality programs have expanded to address pollution that gets to rivers and streams indirectly —  in runoff from parking lots, roads, lawns and agricultural activities, for example. The expanded scope of the water quality program responded to specific state water quality problems and a new (beginning in the 1990s)  federal focus on “nonpoint sources”.  (The term “nonpoint source” distinguishes these indirect sources of water pollution  from “point sources”, such as pipes and ditches,  that directly discharge waste to rivers, lakes and streams.) In the 1970s and 1980s, the Division of Water Quality  mostly regulated municipal wastewater systems and industrial discharges to rivers and streams.  A simple subdivision development only needed a water quality permit if the  construction involved filling a wetland or stream.  Since the 1990s,  water quality rules have had a much greater effect on real estate development, agriculture, and even the activities of individual property owners.  Any regulatory program that touches so many citizens and activities will generate controversy and complaints — some legitimate and  others not.

The McCrory administration has begun moving toward a major reorganization of the  water quality programs in DENR’s Division of Water Quality (DWQ). It is not yet clear what the state’s water quality program will look like in the end or even what the McCrory administration wants to achieve,  but Secretary John Skvarla has been publicly and harshly critical of the Division of Water Quality’s customer service. Word has  started to get out about  first  steps in reorganization of the division.  Both the division director and deputy director  have recently  taken new assignments;  former director Chuck Wakild  will retire in August.  Reports are that the first reorganization move will be to transfer all  stormwater programs from the Division of Water Quality  to the Division of Energy, Mineral and Land Resources effective  August 1 2013.  The transfer will have a big impact — the Division of Water Quality now manages a number of different state and federal stormwater programs.  State stormwater programs include coastal stormwater  rules designed to protect the quality of shellfish waters and stormwater requirements associated with the Neuse River, Tar-Pamlico River, Falls Lake and Jordan Lake nutrient rules. Federal  stormwater programs  (Clean Water Act programs delegated to the state by EPA)  issue permits for municipal and industrial stormwater discharges and construction stormwater permits for active construction sites.

The Division of Energy, Mineral and Land Resources (DEMLR)  has no stormwater experience  (other than a supporting role in  DWQ’s issuance of construction stormwater permits)  and no experience managing  federal  Clean Water Act programs. Taking on the stormwater programs will greatly increase the portfolio of a division already struggling to meet the enormous workload associated with shale gas rule making.  The move will also separate  federal  stormwater programs from other federal Clean Water Act permitting programs delegated to DWQ, requiring a bit more effort to coordinate water quality strategies that require control of both point and nonpoint pollution sources. It appears that the remaining DWQ  programs will become part of an expanded Division of Water Resources.

As the McCrory administration  moves forward with reorganization plans, a few things to watch for and think about:

— Will the reorganized programs have enough  staff to  review permits, inspect  projects,  enforce  environmental  laws and meet federal grant requirements? Even in the construction stormwater program where there has long been a cooperative agreement between DWQ and DEMLR’s sediment program,  merging staff from the two divisions does not yield a single program with enough staff to meet its responsibilities under state and federal law.  Budget cuts in the sedimentation program over the last five years have take too great a toll.  The temptation to use reorganization as a way to cut positions will be great; it should only be done if the new organization can continue to meet all of its state and federal responsibilities. The same holds true for transfer of DWQ programs to the Division of Water Resources; some programs in the two divisions  appear to do similar things, but in reality have very different purposes.  Reorganization decisions will need to keep those different  program functions in mind.  Staffing levels also affect the federal grants that support much of the water quality program;  state-funded staff positions provide much of the required state match for federal grant dollars and at a certain point eliminating state-funded positions jeopardizes the federal funding.

— Will reorganization decisions maintain all of the functions needed to meet Clean Water Act requirements?  Permits are only a small part of the state’s federal Clean Water Act responsibilities. The state must also have an ongoing water quality planning program  that regularly reviews water quality standards; identifies rivers, lakes and streams that are not meeting water quality standards;   develops  plans to improve water quality; and develops best management practices to reduce nonpoint source pollution.

The Division of Water Quality’s water quality planning program provides much of the information and analysis needed to meet the planning requirements of the Clean Water Act.  Planning programs may appear less critical than permitting, but the planning program provides the monitoring data needed to evaluate the effectiveness of water quality rules, pinpoint pollution problems,  and develop the right solution. A planning program that meets federal requirements is also necessary for the state to  have a delegated Clean Water Act permitting program.

— Will the reorganization maintain the expertise needed to evaluate water quality trends, find solutions to impaired water quality, provide good advice to permit applicants, and advocate the state’s position on water quality policy to EPA? Many water quality programs (especially the delegated federal programs) are very complex. Water quality staff need to understand both the science and the law to help permit applicants through the process. There are also times that EPA and the state will disagree on an issue that affects a Clean Water Act permitting program;  DENR will need the knowledge and experience to make a case for the state’s position.

— Will changes that affect federal Clean Water Act programs require EPA approval? The answer  will depend on what kind of changes are made (to organization structure, staffing and program functions)  and how the existing program description approved by EPA was written. Generally, program changes have to be submitted to EPA for approval along with a certification by the Attorney General that the water quality program continues to meet requirements of the Clean Water Act.

N.C. has made tremendous gains in water quality over the last 20 years. Some of the more visible signs of progress have been better management of swine waste, innovative approaches to stormwater control, creation of GIS tools to better predict stream and wetland impacts, and development of river-basin water quality plans that provide a big picture of water quality conditions, threats and trends. One of the real challenges of environmental protection programs is that success often means avoiding a problem — success is the swine waste lagoon that doesn’t fail, the fish kill that doesn’t happen, drinking water supplies unaffected by algae. The challenge for the McCrory administration will be to improve what needs to be improved in the state’s water quality programs without undermining their effectiveness. Water supply will be key to the state’s economic future — and the quality of the water is as important as the quantity.

Note: A new version of House Bill 94 (Amend Environmental Laws) came up in the Senate Agriculture and Environment Committee this  morning. The bill included a new section that directs DENR to combine the Division of Water Quality with the Division of Water Resources.  The senator presenting the bill indicated that DENR had asked for the reorganization authority, but the details of the bill language do not match up with reported plans for moving the stormwater programs to the Division of Energy, Mineral and Land Resources.  The version of House Bill 94 approved by the committee shifts the stormwater programs to the Division of Water Resources with other water quality programs. Either the DENR plan has changed or the bill needs a little more work.

Weakening Environmental Standards for Landfills

June 8, 2013:  On Thursday, the Senate’s Agriculture and Environment Committee approved a radically rewritten version of  Senate Bill 328 (Solid Waste Management Reform of 2013) in very short order.  The bill undoes  a number of environmental standards adopted in a  2007 rewrite of the state’s landfill permitting laws, weakening protections for  parks, wildlife refuges, wetlands,  endangered species habitat and sensitive or high quality surface waters. It also changes some longstanding environmental standards for landfill operation that predate the 2007 law.

A little history first. In 2006, the Department of Environment and Natural Resources (DENR) received  several  permit applications from private waste management companies proposing construction  of  new and  very large landfills in the coastal area of the state.  Reacting to the controversy over those landfill proposals, the N.C. General Assembly put a one-year moratorium on landfill permitting to allow time for a study of permitting standards.   After the study, the General Assembly adopted a major piece of legislation,  Session Law 2007-550, that set new landfill permitting standards, including setbacks from wildlife refuges, parks and gamelands;  increased   bonding requirements for landfill operators; and  stronger standards for leak prevention and detection. The bill also, for the first time, created a state solid waste disposal tax and dedicated the tax revenues to recycling programs and cleanup of contamination from old,  unlined landfills.

Waste management companies fought the solid waste disposal tax and opposed some of the new environmental standards.  A  Raleigh-based company, Waste Industries, U.S.A.,  sued to challenge the final law. (Some of the new landfill standards affected plans for a large Waste Industries landfill  near Dismal Swamp State Park and Dismal Swamp National Wildlife Refuge in Camden County.)   In 2012, the North Carolina Court of Appeals ruled against Waste Industries and upheld the law. Senate Bill 328  appears to be a new  effort by landfill developers and operators to legislatively undo many of the standards adopted in 2007 and change some  requirements that were in place long before  2007.

Senate Bill 328 changes specific to landfill design, construction and operation are described in more detail below.  Among the most important  would be repeal of several standards for denial of a landfill permit. The Department of Environment and Natural Resources (DENR) would no longer be able to deny a  permit because construction or operation of the landfill would cause significant damage to parks, wilderness areas, habitat for threatened and endangered species, critical fisheries habitat or other natural and historic areas of regional and statewide significance. (See Sec. 2). Instead,  a permit could be denied only if  the landfill would  be located in critical habitat for threatened or endangered species; in a historically or archaeologically sensitive site of more than local significance; or within 1500 feet of a national or state park, forest, wilderness area, recreation area, a segment of the Natural and Scenic Rivers system, a  National Wildlife Refuge, a wildlife preserve or management area, critical fisheries habitat, or other high quality waters. (See Section 3 of the bill).

The changes mean that DENR could  only consider location of the landfill itself and not impacts from construction and operation in making a permit decision. Removing those grounds for permit denial will also make it difficult for DENR to put conditions on construction and operation of the landfill to protect those natural resources.  As a result, the bill would leave some very sensitive   resources  vulnerable to damage from landfill construction and operation. With respect to habitat for threatened and endangered species,   failure to consider damage from construction and operation may make the bill inconsistent with requirements of the federal Endangered Species Act.

The bill also:

—  Repeals the requirement for  an environmental impact statement (EIS) for  new landfills.  (Section 3).   Repeal of this language would remove the EIS requirement in the solid waste statutes, but does not exempt local government landfill projects from the  State Environmental Policy Act (SEPA).  SEPA requires an EIS for any state-permitted project that  involves expenditure of public funds or use of public lands and may have a significant impact on the environment.  The odd result could be  an EIS for public projects, but not for commercial landfill projects that may be as large or larger.

— Eliminates the requirement for any buffer between a waste disposal unit (the actual landfill cell where solid waste is deposited) and wetlands.   The change could allow  waste disposal immediately adjacent to wetlands that are directly connected to surface waters.  (Section 3)

— Reduces the buffer required between landfills and national wildlife refuges, state parks, and gamelands managed by the N.C. Wildlife Resources Commission to 1500 feet. (Section 3).  The 2007 law required a buffer of five  miles from a National Wildlife Refuge, two miles from a state park, and one mile from state gamelands. Those buffer requirements reflected the recommendations of parks and wildlife officials,  but waste management companies saw the 2007 buffers as a legislative  attempt to kill specific landfill projects.

— Allows construction of a landfill in wetlands that fall outside federal Clean Water Act jurisdiction. (Section 3). Many court cases and law review articles have tried to clarify the line between federal and state wetland jurisdiction, but one possible result of the bill would be to allow  landfill construction in “isolated” wetlands  that  may not have a direct connection to surface waters,  but have a connection to groundwater.

— Eliminates the requirement for regular cleaning of leachate collection lines.  (Section 3).

— Raises the maximum landfill height from 250 feet to 300 feet, but creates additional closure and vegetative cover requirements for landfills of greater than 100 feet in height.  (Section 3).

—  Limits the landfill operator’s responsibility to assess  a release of landfill leachate  and take corrective action unless  leachate reaches the compliance boundary. (Section  5).   Leachate is water that  percolates through the  landfill, picking up contaminants from the waste material. Permits for waste disposal sites often allow  groundwater standards to be exceeded immediately  under a waste  disposal site as long as the groundwater meets all standards at a designated compliance boundary. For  landfills  permitted since 1983, the compliance boundary is generally 250 feet from the waste disposal site or 50 feet inside the property line (whichever is closer).  Corrective action requirements for landfills have been in place for many years and  always required the landfill operator to take steps to stop an ongoing leak or spill. The Senate Bill 328 language is so broad that it could be interpreted to excuse the operator from doing even that unless leachate actually reaches the compliance boundary. Excusing a landfill operator from corrective action to stop an ongoing  release of leachate  under any circumstances would likely be inconsistent with federal solid waste rules.

— Eliminates a requirement that vehicles carrying solid waste must be leak proof and instead requires only that  vehicles be “designed to be leak resistant”, changing a standard for transport of solid waste that has been in place for 25 years. (Section 7).

— Removes the minimum financial assurance requirement. Senate Bill 328 would still require financial assurance to cover closure of the landfill as well as assessment and cleanup of any spills or leak, but  removes the statutory floor of $2 million and gives DENR complete discretion to set the amount of the financial assurance.

One  part of the bill has impacts beyond landfill construction and operation. Section 6   would prevent  the Environmental Management Commission from reviewing state groundwater standards more often than every five years. Groundwater standards guide permitting of many  activities  that present a risk of groundwater contamination and provide the benchmark for  groundwater remediation.  Slowing the revision of groundwater standards may have unintended consequences for industry generally, since new research on health impacts sometimes provides support for a less stringent groundwater standard.

The bill makes other changes, but I will stop there. Senate Bill 328 will be on the Senate calendar for June 11.

Cross-Over Continued: Repeal of Jordan Lake Water Quality Rules

May 15, 2013:    Yesterday, the  Senate Agriculture and Environment Committee approved a new version of  Senate Bill 515 (the  ironically named Jordan Lake Water Quality Act)  to  repeal state  rules adopted to address  water quality  problems in Jordan Lake. The problems come from excess nutrients (nitrogen and phosphorus) that  can cause algal blooms affecting the smell and taste of the water. (Smell and taste are important to Triangle communities taking water from the lake for drinking water supply.) In hot summer conditions, algal blooms  also contribute to fish kills.  Reducing nutrient pollution can be a real environmental policy challenge because of the number of different  nutrient  sources —  wastewater discharges, stormwater runoff from developed areas, agricultural activities — and the need to ask upstream communities to spend money  for water quality improvements that do not directly benefit their citizens. The Jordan Lake rules came out of years of work by the state’s  Division of Water Quality to understand  how much nitrogen and phosphorus reaches the lake from different sources and  identify the reductions needed to  improve the lake’s water quality.  Development of the rules involved  nearly two years of meetings with a stakeholder group  that  included local government officials, the N.C. Farm Bureau, wastewater system operators, the N.C. Homebuilders Association, the N.C. Realtors Association and others.  After the Environmental Management Commission adopted final rules for the Jordan Lake watershed in 2008, the General Assembly  modified the rules through session laws adopted in  2009. (See S.L. 2009-216 and  S.L. 2009-484.)  The revised Jordan Lake rules finally went into effect in August of 2009, but the rules allowed several years for local governments in the  watershed to improve wastewater treatment and  create stormwater programs needed to reduce nutrient loading to the lake.

Although most local governments in the Jordan Lake watershed began moving to  meet nutrient reduction targets set in the rules,   local governments in the Haw River arm of the  watershed  (including Greensboro and Burlington) continued to push back. Objections from those  local governments led to legislation in 2010, 2011 and 2012 to extend the time allowed for  upgrading wastewater treatment and creating (or modifying) local stormwater programs.  The current dates for compliance with the wastewater and stormwater requirements of the Jordan Lake rules come from legislation adopted by the General Assembly in 2011 and 2012.   Section 14 of  Session Law 2011-394   extended the  time  for completion of wastewater treatment plant improvements to December 31,  2016.  (The actual completion date could be  as late as  December 31, 2018   if the wastewater system receives state  approval of the  improvement  plan by the end of 2016). In 2012, the General Assembly pushed back the deadline for creation of local stormwater programs in the Jordan Lake watershed to August 10, 2014 at the earliest. The actual date could be later depending on the schedule for renewal of a city’s existing Clean Water Act stormwater permit.  For reasons too convoluted to go into here, identical  provisions  delaying  development  of local  stormwater programs  appeared in Section 9 of  Session Law 2012-200 and Section 11 of  Session Law 2012-201.

The latest repeal effort  again  comes from communities in  Guilford and Alamance counties that want to avoid the cost of  wastewater treatment improvements and stormwater controls needed to reduce the amount of nitrogen and phosphorus reaching Jordan Lake from the Haw River. The primary bill sponsors are Sen. Rick Gunn ( who represents Alamance and Randolph counties) and  Sen.Trudi Wade (Guilford County).  The bill would immediately repeal the entire set of Jordan Lake nutrient management rules and provide no replacement other than a legislative study to develop new rules. One of the reasons offered by Sen. Gunn in committee was the failure of the 2009 Jordan Lake  rules to improve water quality in the lake. There was no mention of the  fact that  the General Assembly had  extended the  compliance  timelines in the rules. Given that many measures required under the Jordan Lake rules may not be in place for another three or more years, the lack of water quality improvement to date should not be a surprise.

The bill aims for a technological solution based on mitigation of pollution at the lake  — and without the need for pollution reductions upstream.  In response to a question in committee, Sen. Gunn could not say whether effective technologies exist or at what cost. It is difficult to imagine technologies so effective that  no upstream nutrient reductions would be needed, although it  may be possible to   shift  the balance between treatment technology at the lake and upstream pollution reductions. If new mitigation and treatment technologies exist, one difficult environmental policy question will remain — who pays for water quality improvement in Jordan Lake?    The Triangle communities that take water from Jordan Lake  and rely on the lake as a recreation area may resist an effort to put the entire cost of upstream pollution on their citizens.

One last wrinkle. The Jordan Lake rules exist in part to meet a federal Clean Water Act requirement. Under federal law, North Carolina’s water quality program must have a plan to reduce the discharge of excess  nutrients  that  hurt water quality  in Jordan Lake. The plan currently approved by the U.S. Environmental Protection Agency (EPA) has  been based on the 2009 Jordan Lake nutrient rules. Those rules share the cost and regulatory burden among all of the sources that contribute to the lake’s  water quality problem — wastewater discharges, stormwater runoff  (both near the lake and upstream), and agricultural activities. Without an alternative plan approved by EPA, the Clean Water Act would force the  nitrogen and phosphorus reductions to come entirely from  sources that require Clean Water Act permits — largely the wastewater treatment plants in the Jordan Lake watershed. That could actually increase reductions required from Greensboro and Burlington wastewater treatment plants, since  sources that fall outside Clean Water Act permitting requirements would not contribute to  overall nutrient reductions.

Senate Bill 515 is on the Senate calendar today.

A Rush of Environmental Legislation

May 12, 2013: The bill “cross-over” deadline arrives this week. By May 16, most  bills  must pass either the House or the Senate and “cross over” to the other chamber  to avoid sudden death. (There are exceptions for finance bills, budget bills and constitutional amendments.) Because of the deadline, bills have been flying out of committees and to the House and Senate floor — leading to a flurry of posts. Two more bills that came out of committee last week (and are scheduled for votes this evening on the Senate or House floor):

Senate Bill 638 (N.C. Farm Act of 2013) makes  a  significant change to state water quality law by excluding  any wetland that is not considered “waters of the United States” from protection under the  state’s water quality permitting requirements.  The bill  takes a term (“waters of the United States”)   that  describes  federal  Clean Water Act  jurisdiction and  uses it  to  remove state protection for  wetlands that fall outside federal jurisdiction.  For reasons that mostly have to do with limits on federal authority under the Commerce Clause of the U.S. Constitution, not all state waters or wetlands are considered “waters of the United States”.  The limit on federal jurisdiction has nothing to do with the  importance of the wetland — it has to do with how the Constitution divides responsibility between the  federal  government and the states. The change in definition would mean that  someone could fill or discharge pollutants to wetlands that fall outside federal jurisdiction without any water quality  permit from the state. In committee, the change was described as one intended to help farmers, but developers are likely to benefit more.

House Bill 677 (Local Government Regulatory Reform)  came out of the House Regulatory Reform Committee. Language in the bill could interfere with efforts  to  keep the state’s urban areas in compliance with the  federal air pollution standard for ozone.  Meeting the ozone standard will be an increasing challenge as  population grows  and the ozone standard becomes tighter.  An area that fails to meet the ozone standard risks losing federal highway funding and new industrial development projects.  House Bill 677  prohibits cities and counties from adopting an ordinance that “[r]equires an employer to assume financial, legal, or other responsibility for an employee’s carbon footprint, which may result in the employer being subject to a fine. fee, or other monetary, legal, or negative consequences”.   Although the intent of House Bill 677 isn’t completely clear (and there was little committee discussion), the  bill  could  affect local programs to reduce  motor vehicle emissions that account for as much as 70% of the ozone pollution in urban areas. For example, a Durham  ordinance  requires large employers to do certain things to reduce commuter miles traveled by employees   in an effort to  reduce motor vehicle emissions.  The question is whether House Bill 677 will take away some tools that fast-growing urban areas like Durham can now use to stay  in compliance with the ozone standard.

Night of the Living Dead: Board and Commission Reorganization

In House Bill 1011 (Government Reform and Reorganization Act). the  boards and commission reorganization bill rises and walks again.  An earlier bill, Senate Bill 10,  died  when the House refused to adopt  compromise language negotiated with the Senate. The new bill came out of the House Rules Committee last week and quickly passed on the House floor.   Changes to the environmental commissions:

Coastal Resources Commission

— Reduces  the number of CRC members from  15 to 13;  nine members would be appointed by the Governor and  four by legislative leaders

— Eliminates  one at-large seat and the seat on the CRC currently designated for a representative of a  state or national conservation organization.

— Limits the number of CRC members who receive income from real estate development or construction. Seven of thirteen seats on the CRC  would have to be  filled by individuals “who do not derive any significant portion of their income from land development, construction, real estate sales, or lobbying and do not otherwise serve as agents for development related business activities”.

— Requires that all CRC  members be N.C. residents and either  reside or  own property in the coastal area

— Makes the transition to new appointees in two steps.  The bill would end the terms of all  CRC members  on June 30, 2013  with the exception of  the four members who have existing terms ending June 30, 2014.  Those four members are now in seats designated for commercial fishing,  wildlife or sports fishing, local government  and one of the three at-large seats.

Environmental Management Commission

—  Reduces  the number of EMC members to 15; nine members would be appointed by the Governor and six by legislative leadership.

— The bill keeps most of the categories for appointment to the EMC that appear in the existing statute (although in some cases, the number of EMC members in a given category may be reduced or categories have been combined). The bill eliminates the seat currently designated for a member  with public health experience and the seat for a member with experience in local government pollution control activities.

— The terms of all current EMC members would  end  on June 30, 2013. Eight new members will initially be appointed to two year terms and the remaining seven members to four year terms (to stagger the  terms). After the first set of new appointments, all members will be appointed to serve four-year terms.

The  bill also removes conflict of interest language in the EMC appointment statute. See N.C. General Statute 143B-283(c).  Both the Clean Air Act and the Clean Water Act   have conflict of interest standards  for members of state boards and commissions with  authority to issue federal permits. Under N.C. law, the EMC  has both air quality and water quality permitting authority. Although  the commission has delegated most permit decisions to DENR,  the EMC  still makes some permit and enforcement decisions (such as approval of major variances and civil penalty remissions requests.) To have  — and keep —  delegated permitting authority, North Carolina must meet the federal conflict of interest standards.  The sentence to be repealed closely tracks federal  Clean Air Act language requiring any state commission that approves permits or enforcement orders to have a majority of members who “represent the public interest and do not derive any significant portion of their income from persons subject to permits or enforcement orders under [the delegated air quality permitting program]”. An effort to amend the bill on the House floor to reinstate the conflict of interest language failed.

Wildlife Resources Commission

— Shortens the term for Governor’s appointees to the WRC from  six years to four years. (Members appointed on the recommendation of legislative leadership will continue to serve two-year terms.)

— The terms of all current WRC members would end on June 30, 2013.

— About one-half of the  Governor’s new appointees would be appointed to two-year terms and the remainder to four-year terms (to create staggered terms). After the initial appointments, all Governor’s appointees would be appointed to four-year terms.

Halliburton, Fracking and the N.C. Public Records Act

May 3, 2013: The Raleigh News and Observer  reports today on Halliburton’s opposition to a draft North Carolina rule on disclosure of chemicals used in hydraulic fracturing. The Mining and Energy Commission’s Environmental Standards Committee had approved the draft rule for consideration by the full commission today. Commission chair, Jim Womack, told committee members yesterday that the rule would not be taken up by the commission as planned because of objections from Halliburton lawyers.

State law (G.S. 113-391)  specifically directs the  Mining and Energy Commission  to adopt rules for:

“Disclosure of chemicals and constituents used in oil and gas exploration, drilling, and production, including hydraulic fracturing fluids, to State regulatory agencies and to local government emergency response officials, and, with the exception of those items constituting trade secrets, as defined in G.S. 66‑152(3), and that are designated as confidential or as a trade secret under G.S. 132‑1.2, requirements for disclosure of those chemicals and constituents to the public.” G.S. 113-391(a)(5)(h).

You can find more here  on protection of  trade secret information under the  confidentiality provisions of the N.C. Public Records Act.

The draft rule approved by the MEC’s Environmental Standards Committee would have required oil and gas operations to disclose all chemicals used in hydraulic fracturing fluid to the Department of Environment and Natural Resources soon after fracturing the well.  Under the draft rule, information considered to be a “trade secret” under the state’s Public Records Acts would not be disclosed to the public. Based on the news story and other accounts of the committee meeting on Thursday, Halliburton objects to disclosure of trade secret information even to state regulatory staff except in response to actual environmental harm or a specific health concern.

An earlier post talked about the implications of only requiring  disclosure of trade secret information to  regulators after environmental damage or health effects have occurred.  There are at least two potential problems: 1.  in the aftermath of an emergency (such as a spill, leak or fire),  it would take more time to get information to state and local emergency responders;  and 2. groundwater contamination may not be discovered for years after an undetected  leak or spill occurs and lack of complete state records on the chemicals used to fracture wells  will  make it difficult to identify the contamination source.

The current controversy over the chemical disclosure rule raises several legal and policy questions for DENR and the Mining and Energy Commission:

●   Would a rule allowing the operator to withhold trade secret information from state regulators be consistent with G.S. 113-391? The law clearly protects trade secret information from disclosure to the public, but seems to intend disclosure to state regulators and in some circumstances to local emergency response agencies.

●   Is there reason to protect oil and gas industry trade secrets to a greater degree than trade secret information from other industries? Many state agencies receive trade secret information  and the Public Records Act allows that  information to be protected from public disclosure. The Public Records Act does not allow other industries to withhold information  needed by  state regulators on the grounds that the information is a trade secret.

● What is the right balance between the industry’s interest in holding information on hydraulic fracturing chemicals very close and the state’s need to understand and address risks to surface water, groundwater and public health?

● Can the state meet its responsibilities with something less than full disclosure of the chemicals used to fracture oil and gas wells?

May Day at the General Assembly: Environmental Bills

May Day: An ancient celebration of spring.  “Mayday” : an international distress call. 

There will be lots of activity on significant environmental legislation today at the N.C. General Assembly:

Renewable Energy.  Rep. Mike Hager will attempt to revive House Bill 298 repealing the state’s renewable energy portfolio standard (REPS). Earlier posts on the REPS bill can be found here and here. The bill will be back in the House Public Utilities and Energy Committee at noon. A  motion to approve the bill failed in the same committee last week by a 5-vote margin, but the committee never voted to disapprove the bill.  A  story by John Murawski in today’s Raleigh  News and Observer suggests little change in the lineup for and against the bill. Conservative political organizations (including Americans for Prosperity) and anti-tax crusader Grover Norquist continue to push for repeal of the renewable energy standard as part of a national political strategy that has little to do with the costs and benefits of  repeal  in  North Carolina. Some key House lawmakers  still  oppose the bill because the renewable energy standard has brought new private investment and jobs to the state. A Senate version of the  REPS repeal bill  (Senate Bill 365) will get a first hearing in the Senate Finance Committee today. Rarely does an issue so clearly require a legislator to choose between the state’s interest and a position being promoted  by national political organizations.

Regulatory Reform. Senate Bill 612 (Regulatory Reform Act of 2013) will be up for a floor vote in the Senate this afternoon.  See an earlier post on bill language essentially repealing Neuse and Tar Pamlico River buffer requirements and a  more recent  post about  a provision requiring  environmental agencies to repeal state rules that are more stringent than federal regulations on the same subject. (Putting those two proposals in the same bill is interesting all by itself since the Neuse and Tar Pamlico buffer rules are critical parts of  federally required and federally approved state plans to reduce nutrient pollution in the two river systems. It appears that even a federal requirement may not be enough to save environmental rules in some cases.)

The idea  that  state environmental rules  can simply track federal regulations  really misreads  federal environmental law. Senate Bill 612  assumes that federal agencies have adopted environmental regulations that can be simply picked up and applied by the state and that isn’t the case. Federal regulations alone would not, in most cases, be enough to make for a functioning   environmental permitting program  — or one that actually responds to the state’s needs.   All federal environmental laws  assume — and in many cases require —  that individual states will tailor the  federal  program to  address conditions in the state. (Since you won’t find estuaries in Arizona, that state’s Clean Water Act program does not look like  North Carolina’s program.)  This misunderstanding of the relationship between federal law and state environmental  rules means the most likely outcome of the Senate Bill 612 repeal requirement  will be conflict and confusion. It is unclear why the Senate chose to use a sledge-hammer rather than focus regulatory reform efforts on issues actually raised by citizens in comments to the Joint Committee on Regulatory Reform or through the rule review process  created  in G.S. 150B-19.2.

Water System Management.  House Bill 488 (transferring the Asheville water system to the Buncombe County Metropolitan Sewer District)  has come out of a conference committee to resolve differences between House and Senate versions of the bill. See an earlier post for background on the Asheville controversy.   The Senate has approved the conference report; the conference report does not appear on today’s House calendar yet, but could be added. Note: The Buncombe County MSD  had a major sewer spill yesterday;  the details (such as cause and the total amount of raw sewage spilled to the French Broad River)  are not yet clear. The spill caused me to look at House Bill 488 again and it turns out that the bill does not condition transfer of the Asheville water system on the MSD’s compliance with environmental standards or on actual transfer of the water system’s operating permit to the MSD.

Regulatory Reform 3.0

April 29, 2013:  Last Thursday, the N.C. Senate’s Committee on Commerce approved a new version of Senate Bill 612 (Regulatory Reform Act of 2013) — the third in a series of “regulatory reform” bills developed since Republicans gained control of both houses of the General Assembly in the 2011. The bill may be on the Senate calendar tonight.

The bill attempts too  much  to describe in one post, but  the  most significant provisions would  repeal stream buffer requirements in the Neuse River and Tar-Pamlico River basins  and  require  repeal or modification of any state rule  that “imposes a more restrictive standard, limitation, or requirement” than a federal law or rule on the same subject. ( See an earlier post  for more detail on the  Senate Bill 612 stream buffer language.) The idea of prohibiting  state agencies from adopting rules (particularly environmental rules) that  go beyond minimum  federal requirements has been around for awhile. The Regulatory Reform Act of 2011     ( Session Law 2011-398 )  prohibited  state environmental  agencies — and only environmental agencies — from adopting  more restrictive standards or requirements  than federal rules on the same subject.   The  law had exceptions  for  rules to address a “serious and unforeseen threat to public health, safety or welfare” and rules required by state law, federal law, state budget policy or a court order.  Even then, the General Assembly had an eye on existing rules as well. The same legislation directed all state agencies to provide the Joint Select Regulatory Reform Committee with a list of existing rules and indicate for each rule whether the rule was mandated by federal law and whether the  rule was more stringent than an analogous federal regulation. (The session law defined analogous to mean that a federal rule regulated the same conduct or activity.)

The Regulatory Reform Act of 2012 (Session Law 2012-187)    did  not follow up on the reports  submitted in the fall of 2011.  Senate Bill 612 also ignores the information submitted by state agencies in 2011. Instead of using the 2011 reports to focus regulatory reform efforts, Senate Bill 612 directs state environmental agencies — and only environmental agencies —  to  repeal or modify any rule that exceeds minimum federal requirements unless the rule fits under one of  the exceptions set out in the 2011 legislation for new rules.  The bill  also takes away the authority of  city and county governments to adopt local ordinances that go beyond state and federal environmental standards.

It isn’t clear how   legislators  mean to interpret the Senate Bill 612 provisions. Even the most detailed federal environmental regulations (like those adopted by EPA under the Clean Air Act and Safe Drinking Water Act) have gaps that need to be filled by state rules.  Federal regulations often lack  detail on program implementation, such as record-keeping and monitoring  requirements. Sometimes the gaps are more substantive; environmental and public health issues of great concern  in North Carolina have not always been national priorities.  Most  federally delegated or authorized  environmental programs  operate under federal regulations  that are much  less detailed than  the Clean Air Act and Safe Drinking Water Act standards. The  state’s  water quality,  solid waste and coastal management programs  all operate under federal  laws  that  create  a framework for state regulatory programs, but  for the most part leave development of specific environmental standards to the state.  For those programs, it will be  difficult to directly compare state rules to federal regulations and determine what is more or less stringent.

So,  the Senate Bill 612 language  raises a number of questions:

— Where fairly detailed federal  standards  exist, would the bill require repeal of state rules that address gaps in the federal regulations?   Or can state rules go beyond  federal regulations to  describe the content of a complete permit application or establish specific  monitoring  and record-keeping requirements?

— In programs that operate under a federal framework for regulation that  leaves  specific standard-setting largely to the state agency (with federal oversight),  will Senate Bill 612 require repeal of  types of standards and requirements not specifically  identified  in the   federal regulations?   Will  the state’s water quality program, for example,  be limited to using regulatory  tools provided under the Clean Water Act (such as wastewater discharge permits) to solve  a water pollution problem? Or can the program continue to address all major water pollution sources and use innovative approaches not contemplated in the federal rules?

— Does the exception for rules addressing a  “serious and unforeseen threat to public health, safety and welfare”    allow state rules to go beyond minimum federal requirements because of particular conditions  in the state or in response to concerns that may not have come up in development of the federal regulation? Or will the General Assembly take the position that if EPA doesn’t think putting a petroleum underground storage tank (UST)  near a drinking water well is a problem, then it must not be a problem?

The  2011 DENR report  to the Joint Legislative Committee on Regulatory Reform identified a number of state environmental rules that go beyond the requirements of  federal rules on the same subject. From a quick review, I found some examples of state rules that may have to be repealed under Senate Bill 612 :

● State waste management rules  requiring minimum separation from groundwater for land application of septage (to prevent groundwater contamination) and maximum slopes for land application sites (to prevent runoff to surface waters).

● State rules requiring water systems to  treat drinking water with excessive levels  of iron and manganese; both can cause discoloration of skin and teeth, as well as odor and taste problems.  Federal rules have only “advisory” standards for manganese and iron and do not require water systems to provide treatment to improve the water quality.

● State rules requiring a public water system to notify  the  owner  if routine water system monitoring  finds  a drinking water standard violation or high levels of fecal coliform bacteria in a water sample from a building. Federal rules only require water systems to provide notice to customers  if the water system overall violates Safe Drinking Water Act standards. Since  a water system can  exceed drinking water  standards at some number of  individual monitoring locations without  being in violation as a system (the exact number varies depending on the size of the water system and number of monitoring sites), the federal rules do not require the water system to notify  individual  property owners of  a problem  confined to a particular site. The state notice rule was adopted in 2006 after complaints that local water systems did not notify  citizens of high lead  levels in their drinking water after it was detected in routine water systems monitoring.

● Rules  prohibiting  location of a petroleum  underground storage tank (UST) within  100 feet from a  well serving the public or within 50 feet of any other well used for human consumption.

● Rules requiring setbacks for land application of all wastewater residuals (both sewage sludge and other solids  from wastewater treatment) and setbacks for disposal of coal combustion byproducts. The  rules include setbacks from property lines, public and private drinking water supplies, other water supply wells, and surface waters.

● Limits on emissions of  three toxic air pollutants (arsenic, beryllium and chromium)  by   industrial, medical, hazardous waste and sewage sludge incinerators.

It isn’t clear that these are the kind of “regulatory reforms”  that the General Assembly actually wants to see.

You can find the full report at:  http://www.ncdenr.gov/c/document_library/get_file?uuid=00ccda5a-8c0d-4579-a7d5-f0af4b1474f3&groupId=2444522

Note: Why the General Assembly believes  environmental rules  to be a greater burden on North Carolina citizens than other types of regulation will be  a subject for another day.

The Legislative Game of Jenga

Jenga: A game of skill played with a stack of wooden blocks. Each player removes a block from the stack and balances it on top, creating a taller and increasingly unstable  tower  as the game progresses. (Hat tip to the  Wikipedia  entry for a simple explanation.)  As you may have guessed, the goal  is to not be the player who causes the tower to collapse.

Since the  1990s, the state has adopted several very complex sets of  water quality rules in response to  excess nutrients  in the Neuse  River, the Tar-Pamlico River and  the Falls Lake and Jordan Lake reservoirs. Excess nutrients  in the water (such as nitrogen and phosphorus) can  cause algal blooms and — particularly in hot weather — lead to large fish kills. In a reservoir, algal blooms may also  affect drinking water quality and increase water treatment costs.

Section 5 of Senate Bill 612 (Regulatory Reform Act of 2013)   would pull one block out of the   carefully  balanced  tower of  nutrient management rules in  the Neuse River and Tar-Pamlico River basins by  effectively  eliminating  stream buffer requirements.   Stream  buffer rules  have been  part of the Neuse River nutrient management strategy from the beginning.  Every  set of state nutrient  rules since 1997  builds on the foundation of the Neuse strategy and all include stream buffers as a  critical block.  Before pulling a block out of the tower, it  is worth looking back at how the tower was built.

The history of the stream buffer rules begins with development of a nutrient management strategy for the Neuse river basin in the late 1990s.  In 1995,   the  N.C. General Assembly responded to a series of large fish kills in the Neuse River estuary and a toxic algae scare by directing the state’s  Environmental Management Commission (EMC) to adopt rules to reduce nitrogen loading in the Neuse by at least 30% (Session Law 1995-572).   To reach the reduction goal, the EMC  allocated the reduction (in pounds of nitrogen)  among  the  largest  nitrogen sources in the river basin. The allocation was done by source category (wastewater dischargers, agricultural operations and developed areas)  based on the  nitrogen contribution from each type of source.

The final Neuse rules required  large  wastewater  treatment plants  to  reduce  the amount of nitrogen being discharged to rivers and streams;  set up a nutrient trading system to allow  wastewater dischargers to generate and trade credits for additional nitrogen reductions; required farmers to develop best management practices to reduce nutrient runoff from row crop agriculture and  animal operations; and required  maintenance of  vegetated buffers along streams in the river basin.  Just as  tighter wastewater discharge standards and agricultural best management practices reduce nutrient  loading from those sources,  stream buffers  reduce nutrient loading from developed areas by allowing  trees and shrubs  to  absorb nitrogen  in runoff from developed areas. The  EMC then modified  an  earlier  nutrient management strategy  for the Tar-Pamlico River  to add stormwater and stream buffer  requirements  similar to those adopted for the Neuse. By August 1, 2000, stream buffer rules were in effect in both the Neuse and the Tar-Pamlico river basins.

Section 5 of Senate Bill 612 appears to be identical to language supported by the N.C. Homebuilders Association and the N.C. Association of Realtors in 2012.  The proposed exemption is very broad.  It  would exempt   all private property from the buffer rules as long as there was a plat  of the property on record with the Register of Deeds before August 1, 2000.  (The language does not limit the exemption to  residential lots or to lots shown on an approved subdivision plat; it appears that any type of  recorded map  could  qualify a property for the exemption.)  In 2012, concern about this same language led to  compromise legislation.  Session Law 2012-200   extended a stream buffer  exemption that already existed  in the coastal  area to all waterfront lots in the Neuse and Tar-Pamlico river basins.  The exemption (which applies to residential lots platted before August 1, 2000)  allows development activity in the stream buffer if  the lot is too small for construction of a single-family home (and  onsite wastewater system if needed) entirely outside the buffer.

The risk in pulling the buffer rules out of the nutrient management strategy entirely  is that the nitrogen and phosphorus reductions provided by the stream buffers would be lost. Since both rivers have been listed as having  impaired water quality because of excess nutrients,  the  federal  Clean Water Act requires the state to reduce nutrient loading to the rivers.  Loss of the nutrient reductions provided by stream buffers will simply shift more of the burden (and cost) of nutrient reduction to  other sources — local government wastewater treatment plants, industrial wastewater dischargers,  and agricultural operations.

Not to abuse the Jenga metaphor,  but the  General Assembly  has again been asked to  pull a block from  the center of the tower  blindfolded — that is, without being able to see the relationship of one block to the others.  The state’s nutrient management rules are not sacred and untouchable; they were not handed down on stone tablets.  But in developing nutrient management strategies for the Neuse and the Tar-Pamlico river basins,  state environmental programs  began  moving toward something like negotiated  rulemaking — trying to  find the right balance with all of the parties (public and private) at the table. Those other parties also need  a seat at the table before a decision is made to significantly change the rules.

Senate Bill 612 raises two questions. The first:  Can the state solve nutrient problems in the Neuse and Tar-Pamlico rivers without using stream buffers to reduce reduce runoff from developed areas? The second  has implications well beyond the Neuse and Tar-Pamlico rivers: How will the General Assembly  respond to political pressure to change  a rule  in a way that benefits  just one of the many businesses, industries, local governments, and nonprofit organizations who compromised to solve a complicated environmental problem?

The answer to the second question will affect  the state’s ability to   deal with other difficult environmental issues in the future. (Competition for water supply comes to mind.)

The N.C. General Assembly, Water System Operator

The N.C. General Assembly seems to be increasingly tempted to intervene in the operation of local — and particularly municipal — water and sewer systems. Is  this a good idea?

Last year,   Senate Bill 382  tried to  require the City of Durham to extend water service to a  development project outside the city limits.    Senate Bill 382  started  legislative life as  a tax bill, but in  the last few days of the 2012  legislative session  it became the  vehicle for  a House proposal to  legislatively approve a water line extension for a specific development project. (Durham had  refused the developer’s  request for water service in part because of   the high cost of extending a water line to the project.) Senate Bill 382 ultimately failed, but local conflicts over water service  continue to tempt legislators to intervene.

This year, three western legislators have introduced  a bill that would force the City of Asheville to turn its  water system over to the Metropolitan Sewerage District of Buncombe County (MSD).  You will not find any mention of the City of Asheville or the  Metropolitan Sewerage District  by name –the bill avoids naming the parties by using a generic description that happens to only apply to them — but  House Bill 488 is the latest in a series of skirmishes over control of  the Asheville water system.  The history behind the Asheville water system conflict is  long and complicated, but — as in Durham — some amount of the friction has to do with the relationship between water service and development.

One long-standing issue  has to do with  water rates  for Asheville water system customers who live outside the city limits.  Asheville is the only city in the state prohibited by law from charging water customers outside the city a higher rate — a common practice of other municipalities.  (Higher rates may be used to recover higher costs of providing the service or to offset some of the additional taxes paid  by in-town customers.) Just as friction over a development decision  led to the Durham controversy, the history of the Asheville water system  includes a  thread of  concern about the city’s  ability to use water system decisions to influence  development outside the city. Until last year, extension of water and sewer service gave cities a strong basis for forced  annexation and fear of annexation seems to have created some of the tension  between Asheville and surrounding areas.  Although the annexation process has changed,  cities like Durham and Asheville can still find themselves in conflict with developers and county officials over  development conditions tied to extension of city services or (as in the Durham case)  denial of  service  to a new development outside the city limits.  In short, decisions about extension of water and sewer service  touch two hot buttons —   money  and regulation of new development.

These conflicts have a  very direct connection to environmental protection. Water and sewer  systems are creatures of environmental and public health regulation;  environmental protection programs fund water and sewer infrastructure in many North Carolina communities.   Like many other cities,  Asheville and Durham have the challenge of  expanding water service to accommodate new development  while also maintaining or replacing the aging  infrastructure  that serves existing residents.   The land use regulations sometimes attached to extension of water and sewer service can  provide a number of environmental protection benefits, but maintaining the  fiscal health of a water system has its own environmental  value. Decisions about when and how to extend water or sewer service can have significant  financial  implications; a financially strained system will have much more difficulty providing the maintenance needed to meet public health standards and avoid environmental damage.

To run  a water or sewer system responsibly, local officials   sometimes  have to make controversial decisions about service, rates and financing.  It becomes even harder to make  a tough decision knowing the General Assembly may step in and reverse it.    Forcing the transfer of infrastructure from a city without providing for compensation — as in the case of Asheville — particularly sends the wrong message to cities  that need to invest in water or wastewater infrastructure.  Legislation affecting the  capital assets of a water or sewer system also carries the additional risk of  undermining planning and financing for system improvements.

These bills  raise another question — is it in the General Assembly’s power to force an extension of water and sewer service or to divest a city of its water system.? The answer isn’t clear to me. Local governments are  subdivisions of the state — the General Assembly can change municipal boundaries and expand or contract the authority of cities. It is less clear that the General Assembly can directly intervene in decision-making about a water and sewer system without circumscribing local government authority. In 2012, Senate Bill 382 attempted to compel an expansion of the Durham water system without actually changing the law governing the City of Durham’s authority to operate a water system. House Bill 488 directs the City of Asheville  to transfer ownership of its  water infrastructure also without  changing state laws  authorizing cities to own and operate water and sewer utilities. (The sections of House Bill 488 that require the transfer of property from Asheville to the MSD  do not amend existing statutes governing local government water and sewer systems.   The sections of the bill that enact new  statutes to cover the operation of metropolitan water and sewer districts allow, but do not require,  transfers of property between cities or counties and a district.)

Article II, Section 24 of the  N.C. Constitution prohibits the General Assembly from adopting a piece of legislation relating to “health, sanitation or the abatement of nuisances”  that applies  to  only one local jurisdiction. Since water systems fall into  all three categories, the Constitution seems on its face  to prohibit  the  General Assembly from reaching down to make decisions related to an individual water system. Legislators frequently try to draft around the Constitutional restrictions on local acts by using language that appears to be generic, but in fact only describes a single city or county. At some point, the fiction simply becomes too strained.

For  constitutional law junkies: Since state law treats cities as “persons” for many purposes, can city property be taken (even by the State) without compensation? Would the U.S. Supreme Court consider a city to be a “person” under the Fifth Amendment’s just compensation clause? A research project for another day.