Diving into the Murky Depths

Top Issues in water quality in 2004

• By Sarah Klahn
• Jan 01, 2004

In 2004, the U.S. Environmental Protection Agency (EPA) and the U.S. Supreme Court will again be the primary forces behind water quality trends. For once, predicting the likely course of the Supreme Court may be easier than predicting EPA's course, given that the agency's new administrator had little experience with EPA-related environmental issues as governor of Utah. Among the water quality issues on the horizon in 2004:

• Water supply and water quality issues;
• New National Pollutant Discharge Elimination System (NPDES) permitting initiatives;
• The legal scope of the NPDES program;
• Interpretation of the scope of agency jurisdiction over "waters of the United States;" and
• Security and infrastructure funding issues.

Water Supply Issues as an Element of Future Water Quality Challenges
This topic may seem a strange way to begin a discussion of water quality trends, but make no mistake, the issues of water quantity and quality are inextricably tied. For most of the country's population, concerns over the quantity of water available for use is a relatively new concept. However, anyone who followed the Southern California dispute in 2002-2003 over the Colorado River Quantification Settlement Agreement (QSA), an on-again-off-again resolution to a part of the long-running dispute over Colorado River allocation amongst the Lower Basin states, got a taste of the way we in the West sort out our differences over water allocation. Much of the Western United States is short on water and, in relative terms, long on human population. It was this disparity between supply and demand that caused Western settlers 150 years ago to allocate water through a system of "first in time, first in right." An older, or more "senior" right, is entitled to water in times of shortage when a younger, or more "junior" right, will be shut off.

By contrast, the Eastern United States has historically had the luxury of ignoring water quantity issues because the supply of water exceeded demand. In the East, water has traditionally been allocated through a system of riparian rights, which came to this country from England with the colonists. Under the riparian rights system, those who own property on the bank of a stream have the right to use the water going past their land; in some instances, this has been modified by the requirement that the right to use must be "reasonable."

It is an oversimplification to say that all Eastern states rely solely on a system of strict or modified riparian rights; however, it does not oversimplify the situation to say that few, if any, Eastern states have a comprehensive water allocation system in place. As a result, after a years-long drought and continued population growth, water demands are beginning to outstrip supply, and 2004 will likely bring more disputes over quantities of water to the Eastern United States. One ongoing dispute involves the states of Georgia, Alabama and Florida over the ACF (Apalachicola-Chattahoochee-Flint) river system and has been in and out of court, to Congress and back, for years. Other disputes that were re-awakened in 2003 and will continue for sometime include the dispute between Maryland and Virginia over rights to use the Potomac River, which flows between the states. South Carolina is a state that is not actively involved in a water dispute, but it has announced an intention to begin negotiations with its neighbors, North Carolina and Georgia, over the allocation of rivers that run interstate to avoid long-running and costly litigation.

Further complicating attempts to impose water allocation schemes are decades long patterns of use upon which state officials must overlay any water regulation. Although Eastern states don't have the law of "first in time, first in right," traditional water users can be expected to resist efforts to change their patterns of use. As Eastern states begin the process of "catching up" to their Western neighbors in water allocation and administration, water quality issues are likely to intrude increasingly into the management and allocation discussion. While superficially the current disputes may appear to involve only quantities of water, many, including the ACF dispute and the Potomac River dispute, are fundamentally about water quality. For example, Alabama and Florida don't just want to receive a particular quantity of water, they'd like to receive a usable quality of water that Atlanta's ever-increasing sewage discharges interfere with. This complex interaction between questions of quality and quantity may be the most important nationwide trend in water quality.

Reinvention of the NPDES Permitting Process?
Another important trend is the reshaping of the NPDES program. EPA has several initiatives at the guidance stage that highlight the continued importance of the Clean Water Act as a regulatory mechanism in the United States. In August of 2003, EPA sought public comment on its "Draft Watershed-Based National Pollutant Discharge Elimination System (NPDES) Permitting Implementation Guidance" (Watershed Guidance). EPA's "watershed approach" to discharge permitting includes consideration of watershed-scale impacts to water quality, multiple dischargers and the possibility of pollutant-trading to enhance watershed level NPDES permits. EPA's guidance describes the process as similar to that recommended for development of Total Maximum Daily Loads. The poster child for the Watershed Guidance is the watershed permitting involving total nitrogen for publicly owned treatment works (POTWs) discharging to Long Island Sound. Each of the 79 facilities maintained its own permit covering non-nitrogen constituents, but was placed under a general permit for nitrogen-related constituents. Trading of nitrogen credits was allowed, under certain conditions, including annual facility performance. The Watershed Guidance followed, by several months, the agency's announcement of its Water Quality Trading Policy, and substantially incorporates the elements of the trading policy.

While these regulatory concepts are not inconsistent with the Clean Water Act, application of the Watershed Guidance and trading policy to permit holders could change the face of NPDES permitting substantially. However, these new initiatives offer opportunities for abuse; the concept looks simple and effective, but the devil is in the details. For example, discharges in watersheds experiencing serious water quality degradation or pollutant loading issues are not necessarily proper candidates for EPA's new water quality trading policy. Yet dischargers in water quality-challenged watersheds are likely to push hardest for this species of regulation to avoid expensive treatment upgrades or permitting restrictions. The Long Island Sound general permit approach provides a workable paradigm for resolving difficult issues in water quality-challenged waters. To its credit, EPA's proposals appear to reflect an agency concern that water quality trading and watershed permitting be applied only in appropriate circumstances after sufficient inquiry into the water quality effects of such permitting approaches.

Reach of NPDES Permitting
While EPA is looking at new approaches to permitting, the U.S. Supreme Court will consider the scope of the NPDES program generally. On appeal this term is the decision by the 11th Circuit, Miccosukee v. South Florida Water Management District, 280 F.3d 1364 (11^th Cir. 2002), which imposed an NPDES permit requirement on the South Florida Water Management District for a 960-cubic-feet-per-second (cfs) discharge of raw water from one canal to another for flood control purposes within the management district. Water rights and states rights interests argued vigorously in their briefing that allocation of water was explicitly left to the states under the Clean Water Act, and that the act should not be interpreted to impose federal permitting requirements on state water allocation. In addition to appealing to the Court's states' rights bent, these interests have suggested a parade of horribles from expanding NPDES requirements to water allocation activities. With less hand-waving, environmental, tribal and some local water users have argued more practically in Miccosukee and other similar cases including Northern Plains Resource Council v. Fidelity 325 F.3d 1155 (9th Cir. 2003) that if water allocation activities add pollutants to receiving waters, an NPDES permit is required. The Court will likely make its decision based on the distinction between "pollutants," which are regulated under the Clean Water Act, and "pollution," which is subject only to the nonpoint source provisions of the act. A decision is expected during 2004.

Section 404 Permitting Issues
In January of 2003, EPA and the Army Corps of Engineers, with which EPA shares jurisdiction over section 404 of the Clean Water Act, announced an advanced notice of proposed rule-making (ANPRM) regarding the appropriate definition of "waters of the United States" for section 404 permitting purposes in light of the U.S. Supreme Court's decision in Solid Waste Agencies of Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC). SWANCC involved denial of a section 404 permit because the waters to be impacted by dredge or fill materials were used by migratory birds. SWANCC challenged agency jurisdiction on the basis that the wholly intrastate and isolated nature of the water was insufficient, whether or not migratory birds used the water. The Supreme Court agreed and invalidated the so-called "Migratory Bird Rule," under which the Corps had asserted jurisdiction in SWANCC's case. Two years later, the ANPRM is designed to begin a public discussion about an appropriate definition of "waters of the United States." This ANPRM requested input from the public on the definition of "waters of the United States" and information regarding the likely impact on water resources from the SWANCC decision.

The ANPRM announcement was also accompanied by a joint-agency memorandum describing agency policy over asserting jurisdiction on wholly intrastate, isolated waters. Although the SWANCC decision was limited to invalidating the Migratory Bird Rule asserted as a basis for section 404 jurisdiction, the agencies have determined that the decision called into doubt other regulatory definitions of "waters of the United States" used by agencies to assert jurisdiction under the Clean Water Act generally. Among the regulatory definitions from which the agencies are cautiously backing away is one announced at the same time as the Migratory Bird Rule, which provides for agency jurisdiction over waters used by endangered species. Prior to asserting Clean Water Act jurisdiction based solely on endangered species uses of waters, personnel must get permission from agency headquarters. An ANPRM is a cautious means of proceeding, a kind of administrative testing of the waters. By the deadline of April 15, 2003, the agencies received over 3,000 comments. EPA's next step will probably be to respond to the ANPRM comments with a proposed rule, upon which it will take comment. Whatever the nature of EPA's and Corps' conclusions regarding the reach of agency jurisdiction over "waters of the United States," it is sure to be challenged in court.

Security Issues
Security remains an important if indefinable issue for local governments. To address perceived water system vulnerability issues following 9/11, Congress passed a bill entitled "Drinking Water Security and Safety" as part of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. This statute requires all public water systems serving populations greater than 3,300 to engage in self-examination to identify areas of vulnerability and emergency response plans.

EPA has supported these efforts with training sessions offered across the country, in an effort to minimize the expense of this mandate on local water systems. In addition, EPA and the Centers for Disease Control (CDC) are required to develop methods to detect contamination or disruption of water supplies. EPA's training sessions have been well attended; more may be scheduled in 2004. EPA and CDC are in the midst of developing the Water Security Research and Technical Support Action Plan (Research Action Plan), which was scheduled to undergo peer review by the National Research Council in late 2003. No public announcement of the Research Action Plan is expected, although it is likely to be disseminated to water utility officials across the country.

Infrastructure Funding Issues
The nation's wastewater systems are aging, and some have put the capital needs to keep pace with wastewater treatment needs at $400 billion by the year 2019. This is the so-called funding "gap," but as EPA has acknowledged, the "gap" terminology is misleading because it suggests a fixed shortfall of funding when in fact, the longer it takes to replace and upgrade aging sewer and water systems the more expensive and complex it is likely to be. In 2002, EPA's contribution to wastewater infrastructure needs was around $2 billion, and the fiscal 2004 budget will likely bring little in the way of funding increases. For utilities that have engaged in forethought and planning, the funding challenges are being met. For example, in 1990 Newark, N.J., came to grips with its water and wastewater improvement needs: as much as one-third of Newark's 170-mile collection system was brick and city officials estimated it would cost around $50 million to modernize the system. With a package of EPA grants, rate hikes, bonds and low-interest state loans, Newark is in the midst of system improvements.

However, a repeat of Newark's funding package, which was heavy on federal dollars, isn't likely given the federal government's current budgeting practices. Instead, "asset management," a buzzword often heard in the infrastructure funding-gap discussion, is likely to become more important as utilities look for ways to stretch scarce dollars without drastic rate increases. Endorsed by consultants at EPA's January 2003 Water Infrastructure Forum meeting, asset management amounts to long-term strategic planning by utilities, including everything from acquisition and management of raw water supplies, water and wastewater delivery systems, plant capacity issues and system upgrades.

While most prudent water and wastewater utilities have been engaged in some version of "asset management" for years, a ballooning federal deficit and falling tax revenues at all levels of government suggest that "asset management" will become an important means to address water and wastewater infrastructure systems in crisis. Congress introduced several bills during 2003 addressing water and wastewater infrastructure challenges, and the American Society of Civil Engineers' annual "report card" called for tripling spending, from $2 billion to around $6 billion, for the State Revolving Loan funds for each of the next five years as a means to get the most pressing infrastructure problems resolved.

Impact of a New EPA Administrator
With the Republicans in charge in Washington, the identity of the EPA administrator may be beside the point. However, to the extent that environmental issues are an issue in the 2004 presidential election, Mike Leavitt's appointment as EPA administer will be a piece of any political analysis of Bush-era environmental policies. Former Utah Governor Leavitt is the first Westerner appointed to head EPA and his appointment was characterized by one Western journalist as analogous to posting a gold fish at a junkyard instead of a guard dog. The appointment, said journalist Ed Marston "makes no sense." In Leavitt's defense, he showed a broad "green" streak in his involvement in Western environmental issues and, if he can bring his consensus-building style to disputes regarding polluted rivers, brownfields and Superfund sites, among other things, EPA will have an excellent leader. In addition to the NDPES permitting issues and agency jurisdiction issues described above, Administrator Leavitt will have to grapple with how to respond to the challenge of administering the Superfund program with scarce tax dollars instead of an industry-funded trust fund, which Congress recently let expire. His handling of the Superfund challenge may indicate his willingness to take on infrastructure funding issues, for which there appears to be some support in Congress.

This article originally appeared in the 01/01/2004 issue of Environmental Protection.