Law and the Environment : Environmental Lawyer & Attorney : Foley Hoag Law Firm : Boston, Washington D.C.

As part of its efforts to control the impact of mountaintop removal mining, EPA has implemented a number of changes – both procedural and substantive – into how § 404 permit applications for such activities will be reviewed. None of these changes have gone through notice and comment rulemaking. As we previously noted, Judge Reggie Walton already expressed skepticism about EPA’s mountaintop removal guidance. Last week, in the latest decision in National Mining Association v. Jackson, Judge Walton shot down EPA’s “Enhanced Coordination Process”, or ECP, for reviews of section 404 permit applications.

Although EPA described the modifications as the types of procedural changes that are within agencies’ inherent authority, Judge Walton was having none of it. He concluded that EPA’s authority under the CWA is subject to certain unambiguous limitations. 

The statutory language explicitly establishes the Secretary of the Army, acting through the Corps, as the permitting authority, which strike the Court as an express limitation. … The statute is therefore not ambiguous…. Thus, if a responsibility involving the permitting process has not been delegated to the EPA by Congress, that function is vested in the Corps as the permitting authority.

Under the Multi—Criteria Resource Assessment, or MCIR [don’t ask me why it’s “MCIR” and not “MCRA”], EPA, not the Corps, initially applies § 404(b) guidelines, and EPA directs the Corps how to process mountaintop removal § 404 permit applications.  To Judge Walton, these changes exceed EPA’s statutory authority under the CWA.

Judge Walton also concluded that the ECP, including the MCIR violated EPA’s obligation to provide notice and an opportunity to comment on the change in rules that the ECP represents. For those of you who are not APA geeks, the APA exempts from the obligation to provide notice and comment “rules of agency organization, procedure, or practice.” While the ECP sounds procedural – after all, the word “process” is in the label – Judge Walton concluded that the rules were substantive and required notice and comment under the APA. To Judge Walton,

The fact that the creation of the MCIR Assessment removed the task of applying the 404(b)(1) guidelines to pending permits from the Corps and bestowed it upon the EPA signifies a substantive, rather than a procedural, change to the permitting framework. … [I]t is apparent that the MCIR Assessment and the EC Process “effectively amend” the Section 404 permitting process by conferring additional reviewing authority on the EPA – authority that the statute reserves for the Corps. American Mining therefore compels a finding that the MCIR Assessment and the EC Process are legislative rules. 

Another day, another defeat for EPA. The APA lives.

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The fight about guidance and rules is in the news again. Yesterday, EPA finalized its guidance on Clean Water Act permitting with respect to mountaintop mining. As most of our readers know, EPA issued Interim Guidance in April 2010. In January 2011, in National Mining Association v. Jackson, Judge Reggie Walton, while denying plaintiff’s preliminary injunction, signaled that he thought that EPA’s Interim Guidance probably was a legislative rule that should have gone through notice and comment rule-making.

Judge Walton’s decision did not deter EPA, which finalized the guidance without significant changes. As the Legal Planet blog – a supporter of the guidance – noted, “the only differences between the interim guidance and this final one are cosmetic.” What are the nature of those cosmetic changes? They emphasize the flexible, non-binding nature of the guidance, hoping to fare better in the next round of judicial review than the agency did in defending the Interim Guidance. 

EPA reiterates that this guidance is guidance and not a rule. The CWA provisions and supporting regulations described in this document contain the legally and practically binding requirements. This guidance does not substitute for those provisions or regulations and is not itself a regulation. It does not impose legally or practically binding requirements on EPA, the Corps, or the regulated community, and may not apply to a particular situation depending on the circumstances. Any decisions regarding a particular permit will be based on the facts relevant to that permit and will be evaluated in accordance with the applicable statutes, regulations, and case law. Interested persons are always free to raise questions regarding the recommendations in this guidance in a particular situation. EPA will consider whether or not the recommendations or interpretations in this guidance are appropriate in each situation based on the statutes, regulations, and case law. The use of language such as “recommend,” “may,” “should,” and “can” is intended to describe agency policies and recommendations, while the use of mandatory terminology such as “must” and “required” refers to existing requirements under the CWA, its implementing regulations, and relevant case law.

The real trick about guidance is that it is not what EPA says in the document that matters; it is how EPA actually utilizes the guidance in practice. It is in some respects similar to the distinction between a facial constitutional challenge to a regulation and an “as applied” challenge. If EPA actually implements this document as a guide to its decision-making, then it is guidance. If EPA line staff implement it by rote, then it’s a rule. In other words, if it walks like a duck, it’s a duck, even if it does not talk like one.

Time will tell whether the courts believe EPA’s protestations that this really is just guidance. Time will also tell whether EPA implements this as guidance or implements it as a rule.

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I posted recently that EPA actually seems to be listening to comments from the regulated community and has changed course in some cases in response to those comments. The release by EPA and the Army Corps yesterday of their long-awaited revised guidance implementing the Supreme Court’s Rapanos decision confirms that EPA is in listening mode. Although I am not normally a fan, this new version seems an appropriate use of guidance.

First, it is not a unilateral effort to expand agency jurisdiction. Instead, it responds to the Supreme Court Rapanos decision. Given the lack of a majority decision, Rapanos certainly left both regulators and the regulated community scratching their heads. Moreover, although one of my concerns about guidance is that it can ossify, that is not the case here. The new guidance replaces EPA’s prior Rapanos guidance, issued in 2008.  EPA is entitled to conclude that the prior guidance did not accurately reflect the limits of CWA jurisdiction after Rapanos.

Significantly, in response to substantial pre-issuance pressure to shelve the guidance and instead pursue notice and comment rulemaking, EPA and the Corps have agreed both to take comment on this guidance and to undertake formal rulemaking. Thus, the guidance will serve only to clarify EPA’s and the Corps’ current interpretation pending issuance of a rule.                                                         

On the merits, the guidance seems to be a reasonable interpretation of Rapanos. Everyone knows that Justice Kennedy’s “significant nexus” test is not a model of clarity – that’s why guidance is appropriate. Regulated industries benefit from greater clarity – even if more wetlands will be found to be jurisdictional – because uncertainty imposes its own costs. While the American Farm Bureau Federation has already complained about the new guidance, I think we need to distinguish between complaints about the guidance per se and complaints which really go to the scope of the CWA itself. 

If the guidance itself is too long for you, EPA has provided a useful summary. The summary of the summary? The following waters are protected by the Clean Water Act:

• Traditional navigable waters
• Interstate waters
• Wetlands adjacent to either traditional navigable waters or interstate waters
• Non-navigable tributaries to traditional navigable waters that are relatively permanent, meaning they contain water at least seasonally
• Wetlands that directly abut relatively permanent waters

In addition, the following waters are protected by the Clean Water Act if a fact-specific analysis determines they have a "significant nexus" to a traditional navigable water or interstate water:

• Tributaries to traditional navigable waters or interstate waters
• Wetlands adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters
• Waters that fall under the "other waters" category of the regulations. The guidance divides these waters into two categories, those that are physically proximate to other jurisdictional waters and those that are not, and discusses how each category should be evaluated.

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Last week, EPA proposed to veto a permit for the No. 1 Spruce Mine in West Virginia. Yesterday, EPA went much farther, announcing new guidance – effective immediately – which will impose numeric water quality based effluent limits, or WQBELs, on effluent from surface mining projects. EPA has at least tentatively concluded that high conductivity resulting from discharges of mountaintop fill has adversely affected streams downstream of surface mining operations.

The guidance is fairly straightforward – and for those to whom is it not sufficiently simple, EPA has provided a six-page summary version. Basically, EPA has concluded that permits for mountaintop mining must contain WQBELs that will ensure that in-stream conductivity levels do not exceed 500 microsiemens per centimeter (500 uS/cm). If modeling suggests that mining activities will result in any level above 300 uS/cm, “EPA should work with the permitting authority to ensure that the permit includes conditions that protect against conductivity levels exceeding 500 uS/cm.”

If you’re wondering what those levels mean and how big an impact the requirement to impose WQBELs will have, E&E Daily reported that EPA Administrator Jackson stated last evening that there are "no or very few valley fills that are going to meet this standard."

Though the guidance is effective immediately, EPA is characterizing it as a proposal and will take comment until December 1, 2010.

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Last week, I noted that Gina McCarthy, EPA’s Assistant Administrator for Air and Radiation, suggested that, in the short run, the most significant pressure on inefficient energy sources would come, not from climate change legislation or from EPA GHG regulations, but instead from all of the conventional pollutant regulations that EPA expects to promulgate that will make use of coal much more expensive. While Gina was referring to a variety of air regulations, such as CAIR, MACT rules, and SIP revisions following a more stringent PM standard, even Gina may have been too narrowly focused. Today, EPA announced that it was proposing to veto a mountaintop mining permit issued to the Spruce No. 1 Surface Mine, in West Virginia.

The proposed veto was based on a number of interrelated concerns, including impacts on water quality and fish and wildlife, an inadequate mitigation plan, and the cumulative impacts of Spruce No. 1 and other mining operations in the aptly named Coal River basin. The cumulative impact issue must, by itself, terrify mine owners.

I’m sure that EPA made this decision (rightly or wrongly) on the merits under the Clean Water Act. Nonetheless, does anyone think that Gina McCarthy - and Administrator Jackson - are not aware of the broader picture? Even if they were not, the environmental organizations that are looking to end use of coal certainly are. When one piles CAIR and mercury and increasingly stringent particular standards on top of limitations on mountaintop mining, the phrase that occurs to me is indeed “cumulative impact.” However, it’s the cumulative impact of all of these regulations and regulatory decisions on those using – or financing – coal plants that set me thinking. Perhaps that’s why a separate story in today’s GreenWire was headlined “Coal: Outlook grim for new power plants”

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