The Nickel Report

Recent federal court decisions continue to show that Article III standing can be a formidable defense to environmental citizen suits, particularly following the Supreme Court’s decision Spokeo v. Robins, 578 U.S. 330 (2016) (vacating decision below and emphasizing that an alleged injury in fact must be “concrete and particularized”).  Just last week, for example, a North Carolina federal court dismissed on standing grounds almost all of the plaintiffs’ Clean Air Act citizen suit claims asserted against the University of North Carolina at Chapel Hill (UNC).  Center for Biological Diversity v. University of North Carolina, No. 1:19-CV-1179, 2021 U.S. Dist. LEXIS 163459 (M.D.N.C. Aug. 30, 2021).  In their complaint, the plaintiffs asserted nine claims, including seven for alleged failures to maintain records, inspect equipment, report permit deviations to government authorities, and monitor pollution controls, as required by UNC’s Title V permit.  On summary judgment, the plaintiff citizen groups offered declarations from two members who alleged “health, aesthetic, and recreational interests in air quality in Chapel Hill and the areas around UNC’s campus.”

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants that reach navigable waters by way of groundwater.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s conclusion that a discharge permit is required where pollutants reaching navigable waters are “fairly traceable” to a point source.  It set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).

In Southern Appalachian Mountain Stewards et al. v. Red River Coal Co., Inc., 2021 WL 1182464 (4th Cir. Mar. 30, 2021), a unanimous Fourth Circuit panel recently affirmed a district court holding that an operator cannot be held liable under the Surface Mining Control and Reclamation Act (Surface Mining Act) for a discharge that is otherwise shielded from liability by the Clean Water Act (CWA).  The court’s opinion expressly relied on the Sixth Circuit’s decision in Sierra Club v. ICG Hazard, LLC, 781 F.3d 281 (6th Cir. 2015), which reached the same conclusion.

In April 2020, the Supreme Court issued its opinion in County of Maui v. Hawaii Wildlife Fund et al., 140 S. Ct. 1462 (2000), vacating the Ninth Circuit’s decision.  The appeals court had affirmed a district court’s finding of Clean Water Act (“CWA”) liability for the County’s alleged failure to obtain a discharge permit for subsurface releases of pollutants into groundwater that conveys pollutants to navigable waters.  In vacating the judgment below, the Supreme Court rejected the Ninth Circuit’s “fairly traceable” test and set forth a new standard for determining when a source needs an NPDES permit:  “the statute requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge.”  Id. at 1468 (emphasis added).  In other words, “an addition falls within the statutory requirement that it be ‘from any point source’ when a point source directly deposits pollutants into navigable waters, or when the discharge reaches the same result through roughly similar means.”  Id. at 1476 (emphasis added).

On January 15, 2021, the Texas Commission on Environmental Quality (“TCEQ”) received approval to implement the National Pollutant Discharge Elimination System (“NPDES”) program for oil and gas discharges. [1]  Generally, as a result of this approval, applicants for NPDES permits for produced water, hydrostatic test water, and gas plant effluent will only require a single TCEQ authorization rather than authorizations from both the Railroad Commission of Texas (“RRC”) and the U.S. Environmental Protection Agency (EPA) as previously had been required. [2]

On November 27, 2020, the US Environmental Protection Agency (“EPA”) published notice that the Texas Commission on Environmental Quality (“TCEQ”) has applied to the US EPA for National Pollutant Discharge Elimination System (“NPDES”) program authorization for discharges of produced water, hydrostatic test water and gas plant effluent. [1] TCEQ’s application (“Application”) was filed in response to a bill passed during the last Texas legislative session that required TCEQ to submit to EPA no later than September 1, 2021, a request for NPDES permitting authority for discharges of produced water, hydrostatic test water and gas plant effluent associated with oil and gas activities currently under the jurisdiction of the Railroad Commission of Texas (RRC). [2] Under this legislation, state authority to regulate these discharges will transfer from the RRC to TCEQ upon EPA’s grant of NPDES permitting authority to TCEQ. Should EPA grant NPDES permitting authority to TCEQ for these discharges, a prospective permittee would generally only need to obtain a single TCEQ authorization (rather than an authorization from both the RRC and EPA). [3]

On March 2, 2020, the Environmental Protection Agency (EPA) proposed its new Multi-Sector General National Pollutant Discharge Elimination System Permit (MSGP), which authorizes the discharge of stormwater associated with industrial activity. 85 Feb. Reg. 12,288 (March 2, 2020). The 2015 MSGP expires on June 4, 2020. The MSGP authorizes stormwater discharges associated with a wide range of facilities and activities, including oil and gas, mining and mineral processing and manufacturing, among other operations.

The MSGP authorizes discharges in only those states where EPA is still the NPDES permitting authority (Idaho, Massachusetts, New Hampshire and New Mexico), Indian country, US Territories and other select jurisdictions. However, most states model their state-specific industrial stormwater permits on the EPA’s MSGP, which makes this permit important as the trendsetter.

On January 22, 2020, the Texas Senate Committees on Natural Resources and Economic Development and Water and Rural Affairs (Senate Committees) held a joint hearing to consider Lt. Governor Dan Patrick’s 2019 interim legislative charge related to one of the most pressing matters facing the state—future water supply issues. This interim charge requires that these legislative committees make recommendations to promote the state’s water supply, including the development of new sources. The recommendations made will be the subject of consideration when the Texas Legislature reconvenes in 2021 and will inform future legislative initiatives. While a broad range of water supply topics was discussed during the hearing, notably, the subject of produced water, including opportunities for reuse within and outside the oil field, continues to be a focal point under review by state policymakers.

One of the Supreme Court’s recurring environmental law topics is the scope of Clean Water Act (CWA) jurisdiction. Various aspects of CWA jurisdiction and implementation have been addressed over the years by the Court, including the meaning of “navigable waters” in U.S. v. Riverside Bayview Homes, Inc. (1985); Solid Waste Agency of N. Cook Cnty v. Army Corps of Eng’rs (2001); and Rapanos v. U.S. (2006), and judicial review of agency actions related to the applicability of the CWA dredge and fill permit program in Sackett v. EPA (2012) and U.S. Army Corps of Eng’rs v. Hawkes Co. (2016). Most recently, the Supreme Court heard oral argument on November 6 in County of Maui v. Hawai’i Wildlife Fund, et al., a case that addresses the applicability of the CWA’s prohibition on “point source” discharges to “navigable waters” to releases from point sources to groundwater. The Court granted certiorari to address whether releases from point sources that are carried to navigable waters by groundwater are regulated under the federal NPDES permit program or under state non-point source management programs.

Under the Clean Water Act’s National Pollutant Discharge Elimination System (NPDES) and California’s Porter-Cologne Water Quality Control Act, industrial facilities in California are required to obtain coverage under the state’s NPDES general permit for discharges associated with industrial storm water activities (General Industrial Permit) or justify why they are exempt. For regulated facilities, including manufacturing facilities, landfills, mining operations, steam electric power generating facilities, hazardous waste facilities, and oil and gas facilities, failure to obtain coverage under the General Industrial Permit is a potential violation of the Clean Water Act (in addition to state law), which could expose the owner or operator of the facility to potential civil penalties of up to $54,833 per day. Enforcement, however, largely is dependent upon agency inspections or enforcement by citizen groups. Based on estimates by the California Coastkeeper Alliance, many facilities in California may have failed to enroll in the industrial storm water permit program.

The Texas Commission on Environmental Quality (TCEQ) is moving forward with steps necessary to seek delegation of the federal National Pollutant Discharge Elimination System (NPDES) permitting program for produced water discharges. In doing so, Texas will be joining similar efforts underway or under consideration in the neighboring states of Oklahoma and New Mexico. Should EPA delegate such NPDES authority and separately take action to address the restrictive federal regulatory framework now in effect for onshore produced water discharges, this would result in streamlined and expanded beneficial reuse options for produced water in the key oil and gas producing states in the country.

The US Environmental Protection Agency (EPA) recently released its latest National Compliance Initiatives (NCIs), which aim to focus the Agency’s enforcement arm, the Office of Enforcement and Compliance Assurance (OECA), on areas of significant environmental violations and other opportunities for the greatest environmental benefit through increased compliance with environmental laws. In a memorandum issued June 7, 2019, enforcement chief Susan Parker Bodine advised the Agency’s regional offices of the NCIs for upcoming fiscal years 2020 through 2023.

A new decision curtails agency discretion to approve total maximum daily loads for impaired waterbodies and sets a precedent that may lead to more stringent National Pollution Discharge Elimination System (NPDES) permit limits.

Total maximum daily loads (TMDLs) have been described as “pollution budgets” for impaired waterbodies. A permitting authority developing a TMDL typically considers all known sources of the pollutant at issue (including contributions from point and non-point sources) as well as the relevant characteristics of the waterbody (such as flow rates) and determines how much pollutant the waterbody can receive without exceeding applicable water quality standards. Once a TMDL is adopted for a specific pollutant that is adversely affecting a waterbody, the permitting authority (either a delegated state or EPA) will use the TMDL to derive NPDES permit limits for facilities that are sources of the pollutant.

On May 15, 2019, EPA released its draft Study of Oil and Gas Extraction Wastewater Management under the Clean Water Act (Draft Study). The Draft Study addresses the results of an extensive review initiated last year to evaluate the management of oil and gas wastewaters generated at onshore facilities and to assess the need for additional discharge options for onshore oil and gas wastewater under the Clean Water Act (CWA).^[1] Although EPA has not yet adopted any recommendations for regulatory action, it is evident that EPA is continuing to take a hard look at the merits of authorizing broader discharges of produced water to surface waters than those currently allowed for onshore discharges under the CWA effluent guidelines (and generally referred to as the zero discharge standard).^[2] See 40 CFR Part 435, Subpart C. EPA is now requesting additional public comment on the Draft Study by July 1 of this year with the goal of finalizing it and determining next steps this summer.

Can permitted, well-operated septic systems at vacation resorts give rise to liability under the Clean Water Act (CWA)? That is the question an Environmental Non-Governmental Organization (eNGO) is asking a federal district court to decide in two cases pending in Massachusetts federal court.

For decades, the precise scope of the Clean Water Act’s point source permitting program has been the subject of much controversy.  Over the past several years, the question of whether that program—known as the National Pollution Discharge Elimination System (“NPDES”)—regulates discharges to groundwater that is hydrologically connected to surface water has produced a number of conflicting decisions and a torrent of commentary and public debate.  The Fourth and Ninth Circuits recently concluded that the NPDES program regulates such discharges under certain circumstances, while the Sixth Circuit reached the opposite conclusion, setting up potential review of the issue in the United States Supreme Court.  See Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637 (4th Cir. 2018); Haw. Wildlife Fund v. Cty. of Maui, 886 F.3d 737 (9th Cir. 2018); Ky. Waterways All. v. Ky. Utils. Co., No. 18-5115, 2018 WL 4559315 (6th Cir. Sept. 24, 2018); Tenn. Clean Water Network v. Tenn. Valley Auth., No. 17-6155, 2018 WL 4559103 (6th Cir. Sept. 24, 2018).

Continuing its vanguard approach to environmental regulation, California is poised to incorporate Total Maximum Daily Load (TMDL)-specific requirements into its industrial storm water general permit (IGP). TMDLs are pollutant- and water body-specific and establish the maximum amount of a pollutant a water body can receive while meeting water quality standards. Once effective, these new requirements will provide additional avenues of attack for the already active Clean Water Act citizen suit docket.

The U.S. Court of Appeals for the Second Circuit in July issued a long-awaited decision in the case Cooling Water Intake Structure Coalition v. U.S. Environmental Protection Agency (EPA), upholding the EPA’s 2014 Rule establishing requirements pursuant to Clean Water Act (CWA) section 316(b) for cooling water intake structures (CWIS) at existing facilities. The court also upheld the biological opinion (BO) and incidental take statement (ITS) issued by the U.S. Fish and Wildlife Service and National Marine Fisheries Service (the Services) on the 2014 Rule.

The Second ...

California is considering the first-in-the-nation general industrial stormwater permit incorporating Total Maximum Daily Load (TMDL)-related numeric action levels (TNALs) and numeric effluent limitations (NELs). These new standards have the potential to further ramp up federal Clean Water Act (CWA) citizen suit litigation. Under the State Water Resources Control Board’s (State Board) proposed amendment to its stormwater general industrial permit (IGP), a “Responsible Discharger” whose stormwater discharge exceeds an applicable NEL automatically will be in violation of the IGP. Unless it complies with the permit’s existing exceedance response action process, it also will be in non‑compliance if its discharge exceeds an applicable TNAL.

Recognizing these consequences, and the difficulties some dischargers have complying with existing IGP requirements, the State Board is proposing two alternative compliance options. Touted as an effort to promote green infrastructure and water reuse, these options could revamp how industry manages stormwater. Both alternatives involve capture and reuse of the runoff from the 85th percentile 24-hour storm event, with the difference being the stormwater retention location. Under the “on-site” option, retention occurs at the facility. Under the “off-site” option, retention occurs at the local publicly owned treatment works (POTW).

On Monday, the Trump Administration released an ambitious legislative proposal that aims to stimulate $1.5 trillion in new infrastructure investment over the next 10 years, expedite the federal permitting process, address rural infrastructure needs, and prepare the American workforce for the future. To accomplish those goals, the proposal includes aggressive recommendations to streamline key federal environmental review and permitting processes for infrastructure projects. In addition to traditional forms of infrastructure, such as roads, bridges, and airports, the Legislative Outline for Rebuilding Infrastructure in America addresses drinking and wastewater systems, energy infrastructure, veterans’ hospitals, and Brownfields and Superfund sites.