Category Archives: General Observations

General comment on environmental issues

N.C. Water Quality Legislation (2023)

December 14, 2023. Having regained a veto-proof majority in the state legislature, the N.C. General Assembly returned to a very aggressive effort to influence environmental rules in 2023. The annual Appropriations Act (House Bill 259), the N.C. Farm Act of 2023 (Senate Bill 582) and the Regulatory Reform Act of 2023  (House Bill 600) all contained provisions weakening existing environmental protections and in some cases preventing adoption of new standards. This post covers the  most significant legislation affecting state water quality protections:

AQUACULTURE PERMITTING

Replace the existing NPDES General Permit for aquaculture operations. The Clean Water Act requires a National Pollutant Discharge Elimination System (NPDES) permit for any release of waste to surface waters.  North Carolina has developed a number of  NPDES “general permits” to cover wastewater discharges from facilities engaged in similar activities and producing wastewater with similar characteristics. NPDES General Permit  NCG530000 covers wastewater from seafood packing and rinsing; aquaculture operations; and other activities producing similar wastewater. A facility can be covered under the general permit by meeting conditions in that permit; otherwise, the facility can apply for an individual NPDES permit tailored to the operation. 

Section 14 of Senate Bill 582 directs DEQ and the EMC to replace the current general permit (in effect since December 1, 2021) with the previous version of NCG530000. Reverting to the earlier permit will eliminate water quality monitoring requirements for nitrogen and phosphorus that were added to the permit in 2021.  Aside from the environmental implications of eliminating water quality monitoring for nutrients released from aquaculture operations, the provision raises another legal question and policy question: Does the provision violate the N.C. Constitution by allowing the legislature to intervene directly in the issuance of environmental permits?

Under the N.C. Constitution, the legislature adopts the laws under which state agencies operate, but responsibility for implementing those laws rests with executive branch agencies like DEQ.  The issuance of an NPDES permit (whether a general permit or an individual permit) is clearly within the authority and responsibility of the executive branch.  A legislative directive to modify or replace a specific permit appears to cross a significant constitutional line.   Aside from the constitutional  issue, legislative intervention in a permitting action sets a precedent for direct political intervention in permit decisions.  

ANIMAL OPERATIONS

Groundwater compliance boundaries for animal operations.  A little background — North Carolina’s groundwater protection program requires a state permit for the release of  pollutants to groundwater. Permitted waste disposal facilities (such as landfills)  have a groundwater  “compliance boundary” that (for most facilities)  extends 250 feet from the waste disposal area. Inside the compliance boundary,  pollutants in groundwater may exceed groundwater quality standards; beyond the compliance boundary, groundwater must meet all standards. Permits require regular groundwater monitoring inside and outside the compliance boundary to ensure groundwater standards are met.

There have long been concerns that animal waste systems such as swine waste lagoons and spray fields may result in groundwater contamination. But unlike other types of waste disposal facilities,  animal waste systems have not been required to routinely monitor for groundwater impacts.  State permits for animal operations have only required groundwater monitoring under very narrow circumstances.

This session, the legislature amended the animal waste system permitting law, G.S. 143-215.10C,  to  require a groundwater compliance boundary at animal operations:

“[animal operations] shall have a compliance boundary as may be established by rule or   permit for various categories of animal waste management systems and beyond which       groundwater quality standards may not be exceeded.”

The provision also directs the Environmental Management Commission  (EMC) to require investigation and corrective action (such as remediation)  if a facility violates groundwater standards beyond the compliance boundary. (See: House Bill 600, Sec.15). The provision may lead to an interesting rule-making process,  since implementation of a compliance boundary and corrective action require groundwater monitoring and animal operations have strongly resisted monitoring in the past.

 1,4 DIOXANE

Health Risk Assessment and Technology Review. The legislature directed DEQ to do a human health risk assessment of 1,4 dioxane in drinking water based on peer-reviewed studies and report back to the legislature by May 1, 2024. The purpose of the state study is unclear.  In 2020, EPA finalized a human health risk assessment for 1,4 dioxane that concluded  1,4 dioxane has  adverse effects on humans and is a likely human carcinogen.  That risk assessment focused largely on worker exposure, although it also considered public exposure to 1,4 dioxane in consumer products and surface water. In July 2023,  U.S. EPA released a Draft Revised Risk Determination for 1,4 dioxane for public comment. The  revised risk determination  evaluates risk associated with additional pathways for exposure, including  exposure to 1,4 dioxane in drinking water. The revised draft risk assessment finds that 1,4 dioxane in drinking water presents an unreasonable risk to human health.

The state study provision also directs the N.C. Collaboratory at UNC-CH to evaluate technologies commercially available to remove 1,4 dioxane from wastewater effluent at different flow volumes and report its findings on the technical and economic feasibility;  limitations of each treatment technology; and a cost benefit analysis to the legislature by May 1, 2024. (See: House Bill 600, Sec. 9)

STORMWATER.  Continuing a ten-year pattern, the legislature amended  state stormwater law to further limit state and local government stormwater control requirements. Most of the stormwater amendments appear in the 2023 Regulatory Reform Act (House Bill 600):

Treatment of stormwater from impervious areas added as part of a redevelopment project.  G.S. 143-214.7(b3)  already prevented stormwater permitting agencies from requiring new stormwater controls for existing developed areas included in a redevelopment project. But the law expressly allowed permitting agencies to require treatment for stormwater from impervious surface added during redevelopment. That authority remains in the law, but the 2023 amendment  inserts new language allowing the developer to  “elect” to provide stormwater treatment for new impervious area  — seeming to create a conflict within the law. As a result, It isn’t clear whether treatment of stormwater from new impervious area can still be required or is entirely optional. (See: House Bill 600, Sec. 2)

Prohibit stormwater permit conditions related to adjacent property.  Under a new subpart added to  G.S. 143-214.7,  DEQ  cannot require a new permit applicant to take any action with respect to an “unaffiliated adjacent property” or condition issuance of a new permit on action to be taken by an existing permit holder with respect to an unaffiliated adjacent property.  It isn’t clear what real world situation the new provision addresses since the state stormwater program has never required a developer to install stormwater controls on adjacent property. The provision may be intended to prevent DEQ from requiring a new development project to adequately treat stormwater entering the development site from another property, but more background will be needed to understand the provision’s impact. (See: House Bill 600, Sec. 2)

Exempt private streets from post-construction stormwater requirements. The provision directs the  EMC to exclude linear transportation projects that are: 1.  part of a common plan of development;  and 2. not constructed by DOT or a municipality from the calculation of built-on area for purposes of stormwater management. As a practical matter, that means private subdivision streets would not be included in calculation of stormwater runoff from the development and as a result the stormwater system would not be sized or designed to manage the stormwater from those surfaces. (See: House Bill 600, Sec. 4).

Exempt airport construction borrow sites and staging areas from Neuse buffer certification requirements. State stormwater standards already provided special consideration for  airport facilities particularly with respect to mandatory stream buffers. The new provision redefines “airport facilities” to include borrow sites and staging areas for airport-related construction . Under the provision, construction of borrow sites and staging areas within a stream buffer will not require prior approval normally granted through issuance of a certification for the activity under 15A NCAC 2B.0611(b). The provision requires mitigation of the buffer impacts consistent with the Neuse buffer rules, but it is not clear how buffer impacts will be measured and mitigation calculated in the absence of DEQ certification.  (House Bill 600, Sec. 21).

Timelines for review of state stormwater permits. Amends G.S. 143-214.7 to add timelines for DEQ review of stormwater permit applications. DEQ staff must do a completeness review within 10 days of receiving the application. If the application is complete, a 70-day technical review period begins. The provision also sets out specific requirements and timelines for DEQ to request additional information once the technical review begins. The provision directs that permits should be issued for a term not to exceed 8 years. (See: House Bill 259, Sec. 12.12.)

WATER SUPPLY WATERSHEDS

 Water supply watershed redevelopment.  Amends G.S. 143-214.5(d3) to allow redevelopment of nonresidential properties to exceed water supply watershed density limits without providing stormwater treatment for any increased density (as compared to the previous land use). As amended, the law would allow redevelopment at increased density without stormwater treatment based on either the preexisting density or the increase in density. (See: House Bill 600, Sec. 1)

Density exception for two local government jurisdictions. The legislature created a new exception for Iredell County and the Town of Mooresville that would allow up to 20% (instead of 10%) of the water supply watershed outside WS I and the critical areas of WS II, III and IV to be developed at up to 70% impervious area. Creation of an exception to an environmental rule for two named local governments may be inconsistent with a provision in the N.C. Constitution prohibiting “local acts” related to public health.  In any case, the provision creates a special advantage for two named local governments that was not based on any evaluation of the impact on drinking water quality. (See: House Bill 600, Sec. 5)

WASTEWATER DISCHARGE 

Discharge of domestic wastewater to low and no flow streams. Amends G.S. 143-215.1 to add a  new subsection (c8) allowing discharge of domestic wastewater to low or no flow streams. “Domestic wastewater” generally refers to wastewater from plumbing fixtures in residences and other buildings; it includes human waste and wastewater from kitchens, baths and  laundry facilities. “Domestic wastewater” does not include wastewater from industrial processes.  G.S. 143-215.1 (c8)  will allow discharge of domestic wastewater that meets specific water quality standards set out in that subpart of the law. Those standards  are very tight with respect to conventional pollutants (such as fecal bacteria and nitrates), but the law does not address all potential pollutants.  For example, there are no standards for toxic pollutants and the law prohibits state permit writers from imposing additional conditions to address pollutants not addressed in the provision.  (See: House Bill 259,  Sec. 12.9)

WATER QUALITY CERTIFICATION 

Issuance of water quality certifications for dredging and energy projects. Under Section 401 of the Clean Water Act, an applicant for a federal permit must provide a certification from the state that the permitted project will be consistent with state water quality standards. The provision puts new restrictions on state issuance of Section 401 Water Quality Certifications for state-funded maintenance dredging projects  and projects involving distribution or transmission of energy or fuel (including natural gas, diesel, petroleum, or electricity):

  • DEQ must determine completeness of the Section 401 application within 30 days.
  • A decision to issue or deny the certification must be made within 60 days if no public    hearing is required or within 90 days if there is a hearing.
  • Conditions on the Section 401 certification are limited to those necessary to ensure that proposed discharges of pollutants will comply with state water quality requirements

STUDY WATER QUALITY STANDARDS.  

Narrative water quality standard.  Some background — State water quality rules set specific numerical water quality standards for many pollutants. But since new pollutants of concern emerge over time, the rules also include  a “narrative standard” for toxic pollutants that do not yet have a numerical standard in rules. The “narrative standard” provides specific technical guidance to permitting staff on how to calculate a numerical standard for the pollutant.  Most recently, DEQ has used the narrative standard rule, 15A NCAC 2B.0218,  to calculate a water quality standard for 1,4 dioxane which (as noted above) is a likely human carcinogen. The numerical value derived from the rule then becomes the reference point for limiting discharges of the pollutant to surface waters. The narrative standard provides a predictable, scientifically based method for setting a water quality standard for an emerging pollutant until a numerical standard can be incorporated into the rules — a process that can take several years.

A provision in the Regulatory Reform Act of 2023 requires the EMC to study  narrative water quality standards and report to the legislature by June 1, 2024. The study will include review of the methods for setting a water quality standard under the rule; narrative standards adopted by other states;  and U.S. EPA requirements for adoption of narrative standards. The EMC is to report its findings, including any recommendations for legislative action, to the Joint Legislative Commission on Governmental Operations. (House Bill 600, Sec. 8). The study likely responds to legal action by several local governments challenging use and enforcement of the narrative standard to limit discharges of 1,4 dioxane.

DREDGING MORATORIA

Restriction on dredging moratoria. The legislature amended G.S. 113-229 (the State Dredge and Fill Act) to add a new subsection limiting the ability of state agencies to suspend authorization for dredging in state waters to protect aquatic resources. Dredging moratoria are often seasonal, corresponding to fish spawning activity.  The new provision limits dredging moratoria unless the restriction on dredging activity is required under the Clean Water Act, Endangered Species Act, or other applicable federal law. (House Bill 600, Sec. 10.5)

DEQ’s  Division of Coastal Management issues the permits required under the State Dredge and Fill Act, but the permits also involve review by other environmental and natural resource agencies  including the state water quality program. Most dredging moratoria enforced in N.C. have been adopted under state law authority to protect fisheries habitat and particularly primary nursery areas. It is not clear whether all of the existing  state moratoria on dredging are required by federal laws and rules.

This is another instance of the General Assembly deciding that North Carolina has no need or interest in protecting state natural resources apart from meeting requirements of federal law.

Wetlands

Limit state water quality protection of wetlands. A provision in Senate Bill 582 directs the EMC to define “wetlands” for purposes of state water quality regulations to include only wetlands within the federal permitting jurisdiction of U.S. EPA and the U.S. Army Corps of Engineers under the Clean Water Act. The effect of the provision is to limit all state water quality protections to wetlands with a surface connection to rivers, lakes and streams that are “waters of the U.S.”  The definition change affects state rules that set water quality standards limiting discharge of pollutants to wetlands as well as rules permitting placement of fill material in wetlands.

Limiting state wetlands protection to wetlands in federal Clean Water Act jurisdiction will exclude wetlands that have a groundwater rather than surface connection to  water bodies. It may also exclude wetlands separated from surface waters by a manmade structure and those with a seasonal rather than consistent surface connections. The full extent of the impact on state wetlands will depend on interpretation of the recent U.S. Supreme Court decision in Sackett v. U.S. EPA which significantly restricted federal wetlands jurisdiction. The N.C. Attorney General’s Office has advised the EMC and DEQ that the new state law provision has the effect of voiding state legislation enacted in 2015 that authorized state permitting requirements for basin wetlands and bogs. (See: Senate Bill 582, Sec. 15). Much more detail on the state wetlands provision can be found in earlier posts here and here.

Wetlands Protection Update

October 30, 2023.  An earlier post described the interaction of new state limits on wetlands protection and a U.S. Supreme Court decision reducing federal Clean Water Act (CWA) jurisdiction over streams and wetlands. (See State Law: Removing Wetlands from “Waters of the State”.) This post provides an update on federal implementation of the Sackett decision and new information on the impact of the wetlands provision in the N.C. Farm Act (Senate Bill 582/ Session Law 2023-63).

Federal Implementation of the decision in Sackett v. EPA. In  Sackett v. EPA, a plurality of four justices issued an opinion striking down rules adopted jointly by the U.S. EPA and the U.S. Army Corps of Engineers defining Clean Water Act jurisdiction over streams and wetlands. (The other five justices split between several dissenting opinions.)

In Sackett, the court held that “waters of the United States” — which defines the extent of Clean Water Act regulations —  only applies to surface waters useful for interstate commerce (my  shorthand description of the categories of waters listed more specifically below) and tributaries to those waters that are “relatively permanent, standing, or continuously flowing”. To be consistent with the Sackett decision, EPA has amended the CWA jurisdiction rule to limit federal jurisdiction over tributaries and wetlandsThe Sackett standard appears to eliminate federal jurisdiction over ephemeral streams that flow only in response to precipitation.  Jurisdiction over  intermittent streams and other seasonal water bodies will likely require field interpretation of the Sackett criteria. Stay tuned for future litigation over those determinations. The restriction on CWA jurisdiction over tributaries has significant water quality implications.  Nationally, an estimated 59% of streams  would be classified as intermittent or ephemeral. The percentage is much higher (89%) in arid western states.  Most of those streams ultimately flow into permanent water bodies.

In Sackett, the U.S. Supreme Court  also interpreted the Clean Water Act  to apply only to wetlands that have a continuous surface connection to water bodies otherwise in federal jurisdiction. Under the decision,  wetlands must be physically  “indistinguishable” from those waters to be covered by federal CWA jurisdiction. (Slip opinion, Sackett v. EPA,  p. 27.)  The new federal rule makes several changes in response to this restriction on federal wetlands jurisdiction:

1. The “significant nexus” standard, which had extended federal jurisdiction to wetlands with a significant water quality relationship to jurisdictional waters  (such as a groundwater connection), has been removed from the rule.  

2. Wetlands located near jurisdictional surface waters, but physically separated by a manmade structure (such as a berm), will no longer be considered jurisdictional based on being “adjacent” to waters of the United States. 

3.  The reference to  ‘‘interstate wetlands’’ as a stand-alone category of jurisdictional wetlands has been removed.

Under the new federal jurisdiction rule  that went into effect on September 12, 2023, the Clean Water Act will apply only to:

      ♦  Waters used or capable of being  used in interstate or foreign commerce

      ♦  Tidal waters

      ♦ The territorial seas

      ♦ Interstate waters

      ♦ Impoundments of waters that are otherwise defined as waters of the United States (such as a reservoir created by damming a flowing river)

      ♦ Tributaries of the waters listed above as long as the tributaries are “relatively permanent, standing or continuously flowing”

      ♦ Wetlands that have a continuous surface connection to  waters that fall into one of the categories above. 

Filling jurisdictional waters or wetlands requires a federal permit under Section 404 of the CWA and  most litigation over the definition of “waters of the United States” has been driven by property owners/developers seeking to fill wetlands for construction.   But “waters of the United States” also  defines the scope of Clean Water Act restrictions on water pollution. It is not entirely clear how the loss of jurisdiction over wetlands and non-permanent tributaries will affect the NPDES permitting program. There is earlier case law holding that discharge of pollutants to a non-jurisdictional stream or to groundwater with a surface water connection requires an NPDES permit if those pollutants will reach jurisdictional waters.

Scope of North Carolina Legislation Limiting Wetlands Protection.

The Sackett decision actually emphasizes language  in the Clean Water Act  that notes “the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution”.  In limiting federal CWA jurisdiction, the court expressly deferred to broader state authority to protect waters and wetlands: “Regulation of land and water use lies at the core of traditional state authority”. (Slip opinion, Sackett v. EPA, p. 23). But just as the Sackett decision restricted federal water pollution authority in deference to the states, the N.C. General Assembly limited  state water quality protections for wetlands to those falling in federal Clean Water Act jurisdiction.

Senate Bill 582 became state law on June 27, 2023 over the Governor’s veto. Confusion over the intended effect of the wetlands provision led me, as Chair of the N.C. Environmental Management Commission, to ask the Department of Environmental Quality (DEQ) to advise the EMC on implications for state water quality rules.  In consultation with the Attorney General’s Office, DEQ confirmed that Session Law 2023-63 entirely eliminates state water quality protections for wetlands that fall outside federal regulatory jurisdiction, including  basin wetlands and bogs that had previously been covered by  a 2015 state wetlands permitting law. The DEQ memorandum  also confirmed that the new law affects enforcement of state water quality standards restricting discharge of pollutants to wetlands.

Session Law 2023-63 does not affect application of state water quality standards to surface waters  such as streams.  Existing state laws requiring permits for discharge of pollutants and placement of fill material will continue to apply to streams and other surface waters  in the state independent of CWA jurisdiction. The new federal jurisdiction rule will magnify the impact of Session Law 2023-63  on state wetlands, however. As noted above,  federal jurisdiction over tributaries will shrink under the Sackett criteria. Consistent with the Sackett decision,  the conforming EPA rule also removes CWA jurisdiction over wetlands adjacent to non-jurisdictional tributaries.  Under Session Law 2023-63,   those wetlands will  also lose state water quality protections.

It is still unclear whether the General Assembly intended Senate Bill 582 to have such wide-ranging impact on state wetlands.  The Sackett decision certainly expanded the impact of  Senate Bill 582 beyond what would have been anticipated when the bill was filed. It is possible that Session Law 2023-63  will be modified as a result, but that seems unlikely to happen before adjournment of the 2023 legislative session.  Other nearby states, including Virginia, have already take steps to ensure that state waters and wetlands that now fall outside Clean Water Act jurisdiction will be protected by state water quality laws.

State Law: Removing Wetlands from “Waters of the State”

June 7, 2023 — In an unfortunate sequence of events, the U.S. Supreme Court has issued a decision significantly limiting  federal Clean Water Act regulation of wetlands  just as the N.C. General Assembly has been moving legislation to limit state water quality protection for wetlands.

First, some background. Historically, states had the primary responsibility for protecting state waters from pollution. But in 1972, Congress adopted the Clean Water Act and asserted federal jurisdiction over  “waters of the United States” to create a national water pollution control program.  The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) share responsibility for implementing the Clean Water Act.  Jointly adopted EPA/Corps rules define “waters of the United States” and in doing so establish the scope of  federal jurisdiction to enforce Clean Water Act permitting requirements for both the discharge of pollutants to waters and depositing fill material in waters.

Legal warfare over the “waters of the U.S.” definition has now raged for decades — in large part because of the convergence of two factors: 1. The  EPA/Corps definition of  “waters of the U.S.”  included many wetlands; and 2.  Section 404 of the Clean Water Act prohibits placing fill material in  waters of the United States without a permit from the Corps. Given the definition of “waters of the U.S.”, Section 404 became a hurdle for development of some properties.

The Sackett Decision. After decades of lawsuits and several previous federal court decisions, the U.S. Supreme Court  issued an opinion two weeks ago that greatly limits federal  Clean Water Act jurisdiction over wetlands. The Supreme Court case, Sackett v. EPA, involved a Corps of Engineers enforcement action against an Idaho couple for  filling  wetlands without a Section 404 permit. The Corps determined that wetlands on the Sackett property  — which were adjacent to a ditch that drained to a stream that flowed into a large lake — were “waters of the U.S.” that could not be filled without a permit.

The Sacketts challenged the Corps enforcement action and the U.S. Supreme Court ruled against the Corps jurisdictional determination. All nine justices agreed that the Sackett property fell outside the scope of “waters of the U.S.”, but the justices splintered on the legal basis for ruling in the Sacketts’ favor. A number of justices concluded that the Sackett property fell outside federal jurisdiction even under current  EPA/Corps rules defining “waters of the U.S.” But a plurality of four justices issued an opinion striking down the current EPA/Corps jurisdiction rules entirely, finding the  rules to be inconsistent with the intent of the Clean Water Act. The four justices ruled that the Clean Water Act extends:

to only  those “wet-lands with a continuous surface connection to bodies that are ‘waters of the United States’ in their own right,” so that they are “indistinguishable” from those waters.

Sackett v. EPA, 598 U.S. _____ (2023)  p. 27.

Under existing EPA/Corps rules, wetlands without a continuous surface connection to a body of water could still be “waters of the U.S.” as long as the wetland had  a significant “nexus” to surface waters — such as a hydrological connection through groundwater.  The sweeping decision by the four Supreme Court justices in Sackett means many of those wetlands will likely fall outside federal regulatory jurisdiction in the future.  Wetlands separated from surface water by an artificial barrier such as a road or berm may also fall out of federal regulatory jurisdiction.  The ruling has significant implications for North Carolina wetlands long assumed to be covered by the Clean Water Act — such as the pocosins (large freshwater swamps) in eastern North Carolina that may have only a groundwater connection to surface waters. 

Back home. Before the Supreme Court issued the Sackett decision,  the North Carolina Senate proposed legislation to limit state water quality regulation of wetlands to only those wetlands that fall under federal Clean Water Act jurisdiction.  Senate Bill 582 ( North Carolina Farm Act of 2023)  includes a provision that would prevent water quality rules  that apply to “waters of the state” from applying to wetlands that are not  “waters of the United States” regulated under the federal Clean Water Act:

SECTION 15.(c) Implementation. – Wetlands classified as waters of the State are restricted to waters of the United States as defined by 33 C.F.R. § 328.3 and 40 C.F.R. § 230.3. Wetlands do not include prior converted cropland as defined in the National Food Security Act Manual, Fifth Edition, which is hereby incorporated by reference, not including subsequent amendments and editions.

At the time Senate Bill 582 was introduced, the gap between federal wetlands jurisdiction and state wetlands jurisdiction was relatively small, but significant; the Sackett decision just made the gap much larger.

Senate Bill 582 has serious implications for  wetlands falling out of federal jurisdiction (and the waters to which they connect). For example, state law requires a permit before anyone can

Cause or permit any waste, directly or indirectly, to be discharged to or in any manner intermixed with the waters of the State in violation of the water quality standards applicable to the assigned classifications or in violation of any effluent standards or limitations established for any point source, unless allowed as a condition of any permit, special order or other appropriate instrument issued or entered into by the Commission under the provisions of this Article.

G.S. 143-215.1 (a)(6). Under the Senate bill, that requirement would not apply to wetlands that fall outside federal regulatory jurisdiction because they would no longer be considered  “waters of the state”.   The result could be that unprotected wetlands will become conduits for  water pollution to reach groundwater and surface water. Lack of any state or federal permit requirement may also  result in the  filling of  wetlands that provide flood control and filter stormwater.

The issue for North Carolina. 

The Supreme Court decision in Sackett only interpreted how  the Clean Water Act  defines the scope of  federal jurisdiction over wetlands. The court did not find that wetlands outside federal jurisdiction do not require environmental protection and in fact stressed the  role of states in protecting water quality.

The State of North Carolina — not Congress and not the U.S. Supreme Court — has the responsibility to protect North Carolina waters. In light of the Sackett decision, the state needs to decide whether and how to protect the water quality, ecological and flood control functions of wetlands that fall outside federal jurisdiction. The decision can’t be out-sourced to the federal government.

Cautionary notes. 

The Sackett decision means EPA and the Corps will have to develop new guidelines for determining federal jurisdiction consistent with the court’s ruling.  Past experience indicates that could take months; the Sackett rule will require guidance on interpretation and application to varying situations on the ground.  In the meantime, it appears the Corps of Engineers has put jurisdictional determinations under Section 404 of the Clean Water Act on hold which will likely slow some development projects.

Other federal and state laws will continue to apply to activities impacting wetlands even if Section 404 permit requirements don’t.   In the 1990s, a federal court struck down an EPA/Corps  rule requiring a Section 404 permit for any activity (such as mechanized ditching) that could result in the incidental fallback of fill material into waters or wetlands.   After the federal court  struck down the “incidental fallback” rule,  several North Carolina developers rushed to ditch and drain wetlands in the coastal area on the assumption that no Section 404 permit would be needed — only to find themselves on the wrong side of state Sedimentation Act enforcement actions.

For state policy makers, the breadth of the Sackett decision means the provision in Senate Bill 582 limiting  state water quality protections for wetlands  will have consequences that were likely not intended when the bill was introduced.

U.S. Supreme Court v. EPA Climate Rule

July 12, 2022 — On June 30, the U.S. Supreme Court issued a decision striking down an Obama era  rule regulating carbon dioxide (CO2) emissions from existing power plants. The decision in West Virginia v. EPA held the Obama administration’s Clean Power Plan Rule exceeded EPA’s  authority under the Clean Air Act.  The decision is important for what it did and what it didn’t do.

Three key takeaways from the court’s decision:

  1. The Court did not rule that EPA lacks authority to regulate greenhouse gas emissions from power plants or other sources. Section 111 of the Clean Air Act authorizes EPA to address air pollution from both new and existing sources if the pollutant endangers public health or welfare. A 2007  Supreme Court decision (Massachusetts v. EPA)  held that CO2 and other greenhouse gasses meet the definition of an air pollutant under the Clean Air Act.  In 2009,  EPA made a finding that six greenhouse gasses endanger public health and welfare because of their contribution to climate change. The West Virginia v. EPA decision does not undermine either the Massachusetts v. EPA decision or EPA’s 2009 endangerment finding.
  2. The West Virginia v. EPA decision held that the method EPA chose to set CO2 emission limits for existing power plants in the Clean Power Plan Rule exceeded EPA authority under Section 111(d) of the Clean Air Act.
  3. In finding that EPA exceeded its authority, the Court relied on the “major questions doctrine”.  The Court indicated that clear Congressional authorization will be required when the breadth of  an agency action has such “economic and political significance” that it raises questions about Congressional intent to grant such broad power.  That part of the decision will affect future EPA actions beyond those addressing greenhouse gas emissions and  has implications for all federal agencies.

Background on the Clean Power Plan Rule and the basis for the Court’s decisions below.

The  Clean Power Plan Rule.  Under Section 111 of the Clean Air Act,  EPA has authority to regulate proposed new sources of a pollutant that “may reasonably be anticipated to endanger public health or welfare”. Section 111 requires EPA to set the emission limit for the pollutant based on  the “best system  of emissions reduction” after taking into consideration cost, other health and environmental impacts and energy needs. In 2015,  EPA  proposed CO2 emission limits for new power plants based on a combination of the use of high efficiency processes and carbon capture technology.

The  West Virginia v. EPA decision did not affect EPA’s CO2 emission limit for new power plants.  But when EPA has set a standard for new sources of a pollutant, Section 111(d)  allows EPA to direct states to set performance standards for existing sources in the same category.   Given the practical difficulty and potential cost of retrofitting existing sources, Section 111(d) allows flexibility in setting  those performance standards.  EPA’s practice  has been to develop guidelines for state performance standards under Section 111(d) based on the “best system of emissions reduction”,  but taking into consideration the cost and energy impacts specific to existing sources.

EPA’s  Clean Power Plan Rule  set out guidelines for state adoption of CO2 performance standards for existing power plants. EPA based the CO2 emission limit on a combination of three CO2 reduction measures: 1.Heat rate improvements that would cause coal-powered plants to burn coal more efficiently; 2. A shift in power generation from coal to natural gas-fired plants; and 3. Additional shifting of energy generation from coal or natural gas to renewable sources such as solar and wind energy. In taking that approach, EPA acknowledged that  heat rate improvements at individual coal-fired plants would have very limited benefit, making a shift in energy generation necessary to achieve significant reductions in CO2 emissions.

EPA concluded that electric utilities could reasonably reduce reliance on coal generation from 38% of total power generation to 27% by 2030 and calculated a CO2 emission limit for existing power plants based on that assumed level of generation shifting from coal to natural gas and renewable energy.

The “Major Question”.  The U.S. Supreme Court decision in West Virginia v. EPA focused on EPA’s use of generation shifting as a basis for setting CO2 emission limits for existing power plants. The Court noted EPA’s past practice of  setting emission limits based on pollution reduction technologies or operating conditions that could be implemented at an individual plant. The Court held that EPA’s novel approach to setting a CO2  emission limit and the potential economic impact on  the entire power generation system required specific Congressional authority:

Precedent teaches that there are “extraordinary cases” in which the “history and the breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion, provide a “reason to hesitate before concluding that Congress” meant to confer such authority. [Citations omitted.] Under this body of law, known as the major questions doctrine… the agency must point to “clear congressional authorization” for the authority it claims.

Given the absence of express Congressional authority to use generation shifting to limit CO2 emissions, the Court held EPA had exceeded its authority in adopting the Clean Power Plan Rule.

The Court admits that the major questions doctrine overrides normal rules of statutory interpretation. In other words, the Court can use the doctrine to find no authority for an agency regulation even if the normal rules of statutory interpretation may support the agency action.  In West Virginia v. EPA, the Court leaned heavily on the novelty of using generation shifting to reduce pollution and projections that forcing a shift from coal to natural gas and renewable sources could raise energy costs. The Court didn’t exactly find that Congress failed to authorize generation shifting as a system of pollution reduction. Instead, the Court  talks about “doubting”  or being “skeptical” that Congress intended to authorize EPA to require generation shifting given the possible cost and impact on the power system.

The Dissent. The three dissenting justices, in an opinion written by Justice Kagan, noted that Section 111 directs EPA to select a system of pollution reduction rather than a pollution control technology. The dissenters noted that EPA has used cap and trade programs  — which allow an individual facility to purchase pollution reduction credits from another source  instead of implementing control technology — as part of a system for reducing emission of other pollutants.

The dissenting justices argued that Section 111(d) gave EPA  authority to include a shift in power generation as part of a system of reducing CO2 emissions from power plants. The dissent also questioned the majority’s leap to a new and broad application of the  “major questions” doctrine instead of applying the normal rules of statutory construction.

Questions about the Major Questions Doctrine.   The decision in West Virginia v. EPA  states (and uses) the  “major questions” doctrine more broadly than previous cases. The breadth could be problematic  given the lack of guidance in the decision on how to apply what appears to be a very subjective standard.  Based almost entirely on the fact that the generation-shifting in the Clean Power Plan Rule represented a new  approach to pollution reduction, the Court

[doubted]  that “Congress  . . . intended to delegate . . . decision[s] of such economic and political significance,” i.e., how much coal-based generation there should be over the coming decades, to any administrative agency.

The “economic and political significance” of an agency’s exercise of authority could be very much in the eye of the beholder. In 1964, Justice Potter Stewart attempted to explain how the Supreme Court distinguished Constitutionally protected free speech from unlawful obscenity by saying “I shall not today attempt further to define the kinds of material I understand to be embraced [by the terms pornography or obscenity]…[b]ut I know it when I see it…” The major questions doctrine may be similar.  The West Virginia v. EPA decision doesn’t indicate what criteria for economic and political significance the Court will use to decide whether the doctrine applies.  Apparently, the Court will know economic and political significance when it sees it.

Effect on State Greenhouse Gas Policies. The West Virginia v. EPA decision doesn’t have any effect on state authority to regulate greenhouse gas emissions. State environmental agencies operate under authority granted by state law rather than federal law. The Clean Power Plan Rule never went into effect as a result of  lawsuits challenging the rule and the Trump administration’s later effort to repeal it. So at present no federal rule compels the state to act, but  nothing prevents the state from acting on its own.

Update: The title of this post has changed.

DEQ Nominee Disapproved by Senate Committee — What Now?

June 2, 2021 — After a month long delay,  the Senate Agriculture, Energy and Environment Committee voted along party  lines today to disapprove Governor Cooper’s nominee to be Secretary of the Department of Environmental Quality.  The committee held a hearing on the nomination of Dionne Delli-Gatti a month ago, but took no action on the nomination. Today,  the committee voted to disapprove the nomination on a motion by Sen. Paul Newton. Sen. Newton, a former president of Duke Energy’s North Carolina operations,  expressed dissatisfaction with Delli-Gatti’s earlier responses to questions about Cooper administration policies on matters of particular interest to Duke Energy. Sen. Newton described as “disqualifying”  Delli-Gatti’s failure to articulate Cooper’s policy on expansion of natural gas in the state and lack of familiarity with the proposed Mountain Valley natural gas pipeline project. The committee chair denied requests by Democratic committee members to give Ms. Delli-Gatti an opportunity to respond to Sen. Newton’s criticism and answer additional committee questions.

The General Assembly  amended state law to require Senate confirmation for appointed department heads in 2016 after Cooper defeated incumbent Republican Pat McCrory in the governor’s race. (See: Section 38 of Session Law 2016-126 amending N.C. General Statute §143B-9.)  After taking office, Governor Cooper filed a lawsuit to challenge the confirmation requirement as an unconstitutional interference with the exercise of the Governor’s executive powers.   In a  December 21, 2018 opinion, the N.C. Supreme Court  held  that the confirmation requirement did not violate the N.C. Constitution’s guarantee of separation of powers between the Governor as chief executive and the legislature. Cooper v. Berger, 371 NC. 799 (2018).

What now?  The committee vote serves as a recommendation to the full Senate; it does not end the  confirmation process.  But Republican opposition to Delli-Gatti’s nomination appears to be set. Senate President pro tem Phil Berger called on Governor Cooper to withdraw the nomination prior to an anticipated vote on the Senate floor tomorrow.

As amended in 2016, G.S. 143B-9 indicates that a department head cannot continue to serve once the Senate has adopted a disapproval resolution.  The law specifically says that  a department head who is appointed when the legislature is not in session may only serve in the position until either the legislature has voted to disapprove the appointment or has adjourned the next session of the General Assembly for at least 30 days without approving the nomination.  That language seems to foreclose the possibility of a defeated nominee continuing to serve as acting department head until the Senate confirms a new appointee — although the courts have never been called on to interpret the law.

If the Senate follows through on the disapproval resolution  (or Governor Cooper withdraws the nomination), this will be the first instance of the legislature failing to confirm a governor’s appointee.

UNC Nutrient Study: It’s Deja Vu All Over Again (Apologies to Yogi Berra)

January 6, 2020. On December 23, 2019, the UNC Policy Collaboratory released a legislatively mandated report on nutrient pollution in Jordan Lake.  The short version: A three year, multi-million dollar study has confirmed the science and policy underlying the 2009 Jordan Lake water quality rules.

Background.  In 2002, the North Carolina Environmental Management Commission (EMC) designated Jordan Lake as having impaired water quality due to excess nutrients  (nitrogen and phosphorus) contributing to algal blooms in the lake. The EMC and  water quality staff  in the Department of Environmental Quality (DEQ) spent seven years developing a nutrient management strategy to address water quality standard violations in Jordan Lake as required by the federal Clean Water Act and by state water quality  laws.   In 2009, the EMC adopted rules to implement the final nutrient management strategy.  Following guidelines in state law, the rules required all major nutrient sources — wastewater treatment plants, agricultural operations,  runoff from new development activity and previously developed areas  — to take steps to reduce nutrient releases to the lake.  The 2009 nutrient management strategy set goals for nitrogen and phosphorus reduction to be met by a combination of wastewater treatment plant upgrades, agricultural best management practices and stormwater controls including riparian buffers along rivers and streams.

Later in 2009,  the legislature adopted the first of.a series of acts revising or delaying implementation of the Jordan Lake nutrient rules in response to complaints from  local governments and  real estate development interests.  Communities in the Haw River watershed, including Burlington and Greensboro,  voiced particularly strong objections to the rules. In 2013,  legislators directed the water quality program to test an unproven in-lake technology to reduce algal growth as a possible substitute for nutrient reduction rules and appropriated $1.35 million to support the pilot project. (See an earlier post about the “Solar Bee” pilot project.)   In 2016, the legislature created the N.C. Policy Collaboratory at UNC-CH  and appropriated $500,000 a year for three years for the Collaboratory to study  and make recommendations concerning Jordan Lake water quality.  In the meantime,  the legislature appropriated $1.3 million in 2017 for another DEQ pilot project to test algaecides and phosphorus-locking technologies to control algal growth. Both  the Solar Bee and algaecide pilot projects failed. The nutrient management rules have continued to be suspended for completion of the UNC study. 

UNC Findings. The overall conclusions of the UNC report support the findings underlying the EMC’s 2009 nutrient management strategy:

♦ An effective nutrient reduction strategy requires measures to reduce both nitrogen and phosphorus releases to the lake.

♦ The sources of nutrient loading to Jordan Lake are nearly evenly divided between point sources (wastewater treatment plant discharges) and non-point sources (runoff from developed areas and agricultural operations). Non-point sources are a slightly greater contributor to nutrient loading.

♦ The Haw River contributes the greatest nutrient load to Jordan Lake, but other factors affecting movement and concentration of nutrients cause sources in the Upper New Hope arm of the lake to have a disproportionate impact on lake water quality. The 2009 EMC rules reflected a similar conclusion and required sources in the  Upper New Hope Arm of Jordan Lake to achieve greater nutrient reductions than sources in the Haw River watershed — a 35% nitrogen reduction versus an 8% reduction by Haw River communities.

♦  Runoff from developed land contains 10 times the concentration of nutrients than undeveloped lands; areas developed before 1980 generate significantly higher nutrient concentrations than those developed later.

♦ Wastewater treatment plant upgrades provide the most cost effective nutrient reduction  (in terms of pounds of nutrients removed per dollar invested). Riparian buffers and conservation of undeveloped lands are among the most cost-effective methods of reducing non-point source nutrient loading.

New lake and watershed models developed as part of the UNC study built on earlier models used by the EMC to develop the 2009 rules. The new modeling provides additional insight into the contribution of wastewater infrastructure to nutrient loading in response to storm events.

The UNC  report also concludes that measures to reduce new nutrient releases to Jordan Lake will show the greatest benefit over the long term because lake sediments have stored nutrients over time and release those nutrients back to the water column.

 UNC Study Recommendations.   First, the gaps. The recommendations don’t directly  address specific requirements of the  2009 Jordan Lake rules although most of the study’s findings support the scientific foundation and basic structure of the rules.  The UNC study reinforces the need to  reduce  both wastewater discharges of nitrogen and phosphorus and non-point source runoff  of nutrients to Jordan Lake. The study documents that non-point sources (runoff from developed areas and agriculture) account for more than 50% of the nutrient loading to Jordan Lake; developed areas contribute much more to nutrient loading than undeveloped areas;  and maintenance of vegetated buffers between developed areas and streams is one of the most cost-effective ways to reduce nutrient loading from non-point sources.

The lead recommendation in the UNC report is largely political; it focuses on how to  fund nutrient reduction strategies.  The legislature directed UNC to look at funding mechanisms in response to the objections of upstream communities in the Jordan Lake watershed  — particularly in the Haw River arm of the lake — to the cost of nutrient reduction measures  benefitting downstream communities. In response, the report identifies a water allocation fee  on local governments that receive drinking water from Jordan Lake as a possible funding mechanism.

Imposing a fee on downstream communities experiencing pollution of their drinking water supply by upstream pollutant sources would likely be controversial. It would also represent a significant policy change. Most state water quality programs impose  pollution reduction costs primarily on  the pollution source.  A number of existing state nutrient reduction programs in other river basins have followed that model. Communities in the Neuse River basin (including Raleigh) have implemented nutrient reduction programs similar to those required in the Jordan Lake rules for more than 20 years.  Those communities have absorbed the costs of pollution reductions to reduce nutrient-enrichment problems downstream in the coastal Neuse River estuaries.

Among the other UNC recommendations:

♦ Build local government support for nutrient management measures by emphasizing the local as well as downstream benefits.

♦ Review the existing state water quality standard for nutrient over-enrichment. DEQ has already asked a science advisory panel to review the current standard which is based on chlorophyl a concentrations. The UNC report recommends continuing the review and considering whether additional water quality parameters should be considered and applied depending on the uses of different sections of Jordan Lake.

♦ Consider relocation of sewer infrastructure to reduce the risk of leaks to streams and implement programs to address failing septic systems. (The 2009  Jordan Lake rules allowed local governments to include programs to address failing septic systems as one tool to meet nutrient reduction targets.)

♦ The recommendations highlight the value of land conservation as a tool for reducing nutrient loading. The recommendations do not mention the study conclusion that riparian buffers represent one of the most cost-effective ways to reduce non-point source nutrient loading.

♦ The report concludes that the relatively small amount of agricultural production  in the Jordan Lake watershed makes the Jordan Lake agricultural trading program ineffective.

The Takeaway.  Ten years and several million dollars later, the UNC report on Jordan Lake supports the decision by the EMC and the Department of Environmental Quality to develop a nutrient management strategy based on reduction targets for all of the major nutrient sources in the watershed — wastewater dischargers, development activity and agriculture. The report also confirms a number of the key scientific principles behind the rules — including  imposition of greater reduction targets on sources in the Upper New Hope arm of Jordan Lake and requiring reductions from both point and non-point sources.

The new lake and watershed models developed under the UNC study  build on those used to develop the 2009 Jordan Lake rules and provide additional  insights on the contributions of sewer infrastructure and septic systems. The study raises questions about the efficacy of the existing agricultural trading program.

Compared to the underlying studies, the executive summary has a decidedly political tilt — emphasizing the potential to reduce costs on upstream pollution sources by assessing a fee on downstream water users and downplaying legislatively unpopular — but cost effective — use of riparian buffers.

Editorial Comment.  The EMC and water quality program staff worked for  seven years to develop a fair and effective nutrient reduction program for Jordan Lake based on science and mediated by input from all of the affected parties. Rule development included several rounds of consultation with those potentially affected by the rules — local governments, developers, farmers, water users.   The UNC report supports the science behind the EMC nutrient strategy and  implicitly emphasizes the importance of implementing the strategy as soon as possible since the benefits  will only be realized over time.

The state has already lost nearly 10 years. The Jordan Lake nutrient strategy can — and should — be regularly reviewed and adapted based on new information. The UNC study suggests some areas for ongoing work. Nothing in the UNC study supports further delay.

One stakeholder is quoted in the report as saying:

It’s important not to look at the experience of Jordan and say, “oh, what this shows is that we can’t approach things with the Clean Water Act lens, we can’t approach things through rules, a nutrient management strategy lens.” That isn’t broken. What’s broken is the political system in the state.

2019 Legislation: Environmental and Energy Laws

December 27, 2019. A  short list of environmental and energy law changes compared to recent years:

Fisheries.   As interest in  shellfish aquaculture has increased, so have concerns about the impact of the rapidly evolving aquaculture industry on water recreation and navigation.  Senate Bill 648   creates a new framework for management of aquaculture operations by allowing the Division of Marine Fisheries (DMF) to designate  “shellfish aquaculture enterprise areas” where water bottom and water column leases can be issued for shellfish aquaculture. Similar to water use zoning, the concept gives DMF the ability to direct shellfish operations toward areas already approved for the purpose instead of  simply responding to a lease application for any location of the applicant’s choosing.

The bill has some weaknesses. It doesn’t provide guidance on siting shellfish aquaculture enterprise areas.  The bill requires notice and a public hearing prior to designation of an aquaculture enterprise area, but relies on the limited notice requirements in existing statutes authorizing individual bottom and water column leases. Those existing public notice provisions in G.S. 113-202 (bottom leases)  and G.S. 113-202.1 (water column leases) only require notice by newspaper publication.  The statutes do not require direct notice to either the local government or to  owners of property along the affected shoreline.

Senate Bill 648 also creates a pilot project for shellfish aquaculture leasing in Pamlico Sound while imposing  moratoria on approval of new open-water shellfish aquaculture leases in  New Hanover County and Bogue Sound. At the same time, the bill makes it possible for DMF to approve operations to grow seed oysters and clams in marinas (which under existing shellfish rules have been closed to any type of shellfish propagation), which may relieve some pressure for new open water aquaculture leases.

Water Quality.  House Bill 812  (Nutrient Offset Amendments) provides more flexibility in projects to mitigate nutrient loading from wastewater dischargers. The amendments allow nutrient offsets for  permitted NPDES discharges to be provided EITHER  in the same hydrologic area (the current requirement) OR  at a location downstream of the discharge, but upstream of the water body subject to regulations to address excess nutrient loading. For stormwater and other nutrient sources, the law continues to require nutrient offsets in the same hydrologic area.

Section 3 of House Bill 206  (Various Transportation Changes)  requires the EMC to exempt a broader range of airport-associated development from the Neuse River riparian buffer rules. The Neuse buffer rules require vegetated buffers along streams in the Neuse River basin as a tool for reducing nutrient runoff  and excess nutrient loading to downstream estuaries. Since airport facilities also have to meet Federal Aviation Administration siting criteria,  current EMC rules exempt certain aviation-related facilities from buffer requirements and allow others to impact the buffer with mitigation.

Under the existing EMC rule,   “airport facilities” allowed to impact the buffer include structures directly related to aviation operations such as runways, terminals, maintenance buildings, administrative buildings, onsite airport parking, navigation markers,  and beacons.  The EMC rules do not exempt satellite facilities such as off-site parking or hotels, rental car facilities and other commercial development. H 206 directs the EMC to revise and broaden the definition of  “airport facility” in the rules to allow the riparian buffer exemption to apply to development of those airport-associated commercial facilities.

On-Site Wastewater.  Regulations on siting and design of on-site wastewater systems (such as septic systems) have both a public health and environmental protection purpose. The rules exist to prevent direct exposure to untreated wastewater and contamination of groundwater and nearby rivers, streams and lakes.  House Bill 268 (Amend On-Site Wastewater Laws) is a somewhat mis-titled bill that actually disapproves more than 40 rules concerning on-site wastewater systems  and reclaimed water systems amended by the Commission for Public Health in 2018. The bill may be one of the broadest exercises of the legislature’s power to disapprove agency rules since the legislature claimed that  authority under the State’s Administrative Procedure Act.

Legislative disapproval means the amended rules cannot go into effect;  prior versions of the rules remain in place in the meantime. The bill creates a task force to report back to the legislature in February 2020 on rules to replace those amended in 2018.  One purpose of the  task force (as set out in the bill ) is to make recommendations “to prevent the implementation of rules and ordinances and enforcement against the use of on-site wastewater treatment and dispersal systems in non-sewered areas of the State”.  

The disapproval bill responded to concerns from homebuilders and realtors that the amended rules will make it more difficult to develop some areas using onsite wastewater systems. In part, the controversy seems to be a continuation of past conflicts over how easy (or hard) it should be to approve innovative onsite wastewater systems for use in areas that are not appropriate for a conventional septic tank system. 

Renewable Energy.  House Bill 329 (Renewable Energy Amendments) makes several relatively minor changes to energy laws.  Section 1 of the bill exempts electric vehicle charging stations from the definition of “public utility” as long as the owner simply resells electricity supplied by a regulated public utility. Otherwise, sale of  electricity by a charging station could lead to  regulation of the facilities by the N.C. Utilities Commission under laws applied to Duke Energy and other electricity providers.

Section 2 requires the Environmental Management Commission (EMC) to establish a new regulatory program “to govern (i) the management of end-of-life photovoltaic modules and energy storage system batteries and (ii) decommissioning of utility-scale solar projects and wind energy facilities” by January 1, 2022.  The bill lists a number of issues for the EMC to consider in developing rules, including whether system components have the characteristics of hazardous waste and preferred methods of end of life management (i.e., reuse, recycling, or disposal as solid waste).

Section 3  amends the law governing how the N.C. Utilities Commission  sets avoided cost rates for an electric utility’s purchase of power from a small power producer. The law, G.S. 62-156,  generally takes into consideration the electric utility’s need for additional capacity and the availability/reliability of energy provided by the small power producer.  The law already provides an alternative mechanism for determining capacity need with respect to energy purchased from swine and poultry operations with waste-to-energy systems by reference to G.S. 62-133.8. The 2019 amendment extends special treatment with respect to capacity need to certain small hydroelectric projects (those with total capacity less than or equal to 5 MW). In effect, the change appears to lock in the renewal of existing power purchase agreements between electric utilities and small hydropower producers that were in effect as of July 27, 2017.

Boards and Commissions.  Senate Bill 381  (Boards and Commissions) amended the appointment statutes for the Clean Water Management Trust Fund Board and for the Parks and Recreation Trust Fund Board to give the Governor a majority of appointments to those boards.  S 381 continues a series of  legislative acts necessary to comply with the 2016 N.C. Supreme Court decision in McCrory v. Berger.  In that decision, the court  held that the Governor must have the power to appoint a majority of the members of any board or commission that exercises executive authority. See an earlier post  for more about the court’s decision.

S 381 also amended the Clean Water Management Trust Fund statutes to expressly give the Fund authority to accept FEMA funds for hazard mitigation and to disperse funds for projects to reduce flood risk.

Vetoed Bills.  For the first time since 2011, the legislature lacked a veto-proof majority in both chambers.  As a result, a  number of bills containing provisions related to environmental protection remain in limbo because the legislature has not yet voted to override Governor Cooper’s veto. The legislature could attempt to override those vetoes in 2020. The content of the vetoed bills will be discussed in a separate post.

Environmental Budget Cuts in NC: 2008-2018

December 12, 2019.  On December 5, the Environmental Integrity Project (a national nonprofit organization) issued a report on state funding for environmental protection programs. The report, The Thin Green Line,  looks at staffing levels and funding for environmental programs between 2008 and 2018 in the lower 48 states.

In addition to providing funding and position numbers for each state, the report profiles five states — including North Carolina.  During the period covered by the report, N.C. environmental programs experienced one of the highest levels of cuts to both operating budgets and staff in the country. The legislature made significant reductions even as the state’s population grew, the overall state budget increased and the state faced new environmental challenges.

Before highlighting  the findings related to North Carolina, a note about the report’s methodology.  The report compares  2018 funding levels to both 2008 dollars and inflation-adjusted 2008 dollars.  The percentage increase or decrease in funding calculated for each state represents the change from inflation-adjusted 2008 funding.

Funding and position numbers only reflect resources for environmental protection programs;  the report did not include parks and recreation or fish and wildlife agencies. Budget numbers do not include infrastructure programs, such as the drinking water and wastewater loan and grant programs. The report excluded the capital spending because it varies year to year depending on grant cycles and does not support  basic pollution control activities such as permitting, inspections and compliance actions.

Key findings related to North Carolina’s environmental protection programs:

♦ Adjusted for inflation, N.C. environmental programs experienced a 34% reduction in operating funds between 2008 and 2018.

 2008 Funding   Inflation Adjusted 2008  Funding   2018 Funding
 $116 million  $136 million   $90 million

♦ During the same period, staff levels in N.C. environmental protection programs fell by 35%, from 1,051 in 2008 to 675 in 2018.

♦ As environmental protection programs experienced significant cuts, the total state budget actually grew by 8%.

The level of reduction in  both operating funds and staff put North Carolina among only six states nationwide that experienced  reductions of greater than 30%. A number of states increased funding and staff.

The North Carolina profile in the EIP report notes that the reductions occurred against a backdrop of ongoing problems associated with large animal operations; the need to address pollution at coal ash disposal sites; repeated flood events; and vulnerability to sea level rise.  The report does not mention another resource intensive environmental issue that arose during this time period — water pollution associated with emerging contaminants such a GenX and other per- and polyfluoroalkyl substances (PFAS).

A January 2017  post on this blog provided a snapshot of some of the program level impacts of budget reductions by the end of 2016. The EIP report picks up on one of the impacts mentioned then — the backlog of water pollution permits  and permit renewals awaiting state review. As noted in the EIP report, permitting backlogs can create pressure to issue approvals without sufficient review.  The report doesn’t mention another problem — facilities may continue to operate under permit conditions that do not reflect current environmental standards.

The EIP report notes that even as many states cut environmental programs,  Congress reduced staff levels at EPA by 16% and cut EPA’s operating budget by 17% (nearly $1 billion a year).  In combination, the federal and state budget/staff reductions make effective and timely environmental enforcement much more difficult.

The full report can be found on the Environmental Integrity Project website at https://www.environmentalintegrity.org.

2019 Legislation: The Budget

December 4, 2019.  The 2019 legislative session was distinguished by its slow pace and  lack of movement on significant legislation until very late in the session. The session finally ended in late October — and then reconvened to take up redistricting.  

The session failed to produce a comprehensive two-year budget. Governor Cooper vetoed the budget bill passed by the two chambers (H 966).  Although the House voted to override the veto, the Senate has not taken an override vote. In the absence of a comprehensive budget bill,  the legislature adopted several smaller appropriation bills to provide continued funding for state agencies.  House Bill 111 (Session Law 2019-242) provided base-budget funding for a number of state agencies, including the Department of Environmental Quality (DEQ).

The irregular budget process means fewer details on spending;  the appropriations bills generally focus on top-line numbers. There is no equivalent of the joint appropriations committee report that always accompanies the budget bill to provide  detailed information on funding/staff changes at the program level.

DEQ Top Line Budget Numbers:  The table below compares 2018 budget numbers for DEQ to the funding included in H 111 for the 2019-200 fiscal year. Note: “Receipts” includes both fees and grant funding.  “Appropriated” funds  represent monies allocated to DEQ by the legislature from the state’s general fund for the 2019-2020 fiscal year; that figure can include both continuing program funding and one-time appropriations for a specific purpose.

Receipts    Appropriated       Total
2018: $154,234,668 2018 $95,647,490    2018: $249,882,158
2019: $114,576,705 2019: $114,576,705  2019: $193,918,082
  (-$39,657,963)         (-$16,306,113)  (-$55,964,076)

The figures show an overall reduction of $55, 964,076 in funding for DEQ programs by comparison to 2018 numbers — around 20%. The reduction reflects a $39,657,963 reduction in receipts and a reduction of $16,306,113 in state appropriated funding. The level of funding also falls nearly $20 million short of the funding provided in the vetoed budget bill.

The drop in receipts likely reflects in part the normal timing of grant cycles rather than an unusual reduction in funding. Otherwise, the fact that H 111 only funds the “base budget” — the cost of maintaining current funding levels for ongoing operations — accounts for the difference.  As a continuation budget, H 111 appropriated no new money on either a one-time or continuing basis.

Additional Appropriations. Several other bills include additional appropriations for particular purposes, many related to disaster relief.

Senate Bill 429 (Disaster Recovery) appropriates $8 million to DEQ for disaster-related water and wastewater infrastructure projects, cleanup, coastal management planning and dam safety activities. Another $11.5 million will go into DEQ’s Coastal Storm Mitigation Fund to offset the cost of beach and dune restoration projects. A local government can receive up to $2.5 million  in project funding and the provision waives local cost sharing.

Other funds appropriated in Senate Bill 429:

$2 million to UNC’s N.C. Policy Collaboratory to study flooding in Eastern North Carolina and measures to increase resiliency in flood-prone communities. The provision requires the Collaboratory to develop a flooding and resiliency implementation plan and report back to the legislature’s Emergency Management Oversight Committee by December 1, 2020.

$1 million to the Wildlife Resources Commission for removal of derelict and abandoned vessels from coastal waters.

$3 million in new funding to DEQ  for grants to Surry County for three infrastructure projects. These appropriations do not appear to be disaster-related.)

House Bill 200  (2019 Storm Recovery) includes $17.6 million in state matching funds needed to draw down the next award of federal grants for the Clean Water State Revolving Fund and the Drinking Water Revolving Loan Fund. Those state/federal revolving loan programs provide low and zero-interest loans to local governments for water and wastewater treatment systems.

Off the Table (For Now).  The unresolved conflict over House Bill 966 means that several provisions in the budget bill have fallen off the table at least for the time being. House Bill 966 appropriated about $15 million in new money for water/wastewater infrastructure. It also directed infrastructure funding to specific projects — including a $15 million project in King, N.C.  and $5.1 million in funding for infrastructure projects in other communities.

H 966 had included another provision redirecting $2 million from a DEQ fund to address contamination associated with poly- and perflourinated (PFAS) compounds such as GenX to a number of unrelated projects.  Over  $800,000 of the PFAS funding would have been used to extinguish a conservation easement in a Burlington park that had generated mitigation credits for N.C. Department of Transportation projects. (That provision was described in an earlier post.)

For the time being, the new infrastructure funding will not be available and funds in the PFAS Recovery Fund will remain dedicated to that purpose.

Hurricane Florence: Deja Vu All Over Again

September 23, 2018.   A serious storm accompanied by flooding has many environmental impacts and most are all too familiar to North Carolina from past storms.  Once the immediate rescue phase has ended, the Department of Environmental Quality (DEQ)  has a larger role in hurricane response than the public may realize. Some of the environmental challenges:

♦  Disabled water treatment and wastewater treatment systems. Large storms can disable environmental infrastructure like water and sewer systems because of lost power, inundation by flood waters or runoff overwhelming the sewage collection system. Any of those impacts can result in release of contaminants, including untreated sewage.

♦  Disposal of storm debris.  Wind damage and flooding creates a huge volume of storm debris: downed trees; construction debris; drywall and flooring removed from flooded homes; sodden carpet; ruined furniture and appliances; animal carcasses; and hazardous materials like paint, solvents, pesticides and other chemicals. Debris from older structures may contain asbestos. DEQ’s Division of Waste Management (DWM) works with local governments to pre-approve new landfills for vegetative waste and non-hazardous construction debris before a storm hits.  But hazardous materials damaged or uncovered by the storm can complicate and slow debris removal because those materials need to be separated for disposal. Improper disposal of hazardous materials can cause groundwater or surface water contamination; burning hazardous materials with other debris may expose nearby residents to dangerous air quality conditions and create a risk of explosion.  Failing to separate and properly dispose of hazardous materials also has a cost;  the Federal Emergency Management Agency (FEMA) will not  reimburse the state for debris collection and disposal that violates federal hazardous waste laws. Unfortunately, storms never sort debris and efforts to clean out flooded homes often create piles of trash that include both hazardous and non-hazardous materials.

♦  Release of contaminants from landfills and dumps (legal and illegal) inundated by floodwaters; spills from above-ground and underground petroleum storage tanks; and releases from other types of chemical storage facilities.  The U.S. Environmental Protection Agency (EPA) emergency response program works with the state DWM and Division of Water Resources (DWR) to  respond to these environmental incidents.

♦ Clearing debris from rivers, streams and drainage ditches.  Large storms also deposit downed trees, limbs, and other debris into streams, rivers and drainage ditches obstructing flows.  Removal of debris from streams and rivers  may require a federal permit under Section 404 of the Clean Water Act. (Any method of removal that would disturb the stream bottom or riverbed requires a permit.) The U.S. Army Corps of Engineers issues the Section 404 permits, but  state water quality and coastal management staff also have a role and frequently help determine whether the permitting requirements apply to a particular stream or drainage feature. DEQ provides a guidance document on stream clearing to help citizens understand how to do the work without violating federal rules.

♦  Animal waste. Updated information on swine waste lagoons (as of noon on September 22, 2018):

Animal Operations – Swine Lagoons

Category Total # Facilities/Lagoons
Structural Damage 5 facilities/5 lagoons
Discharges (Overtopping) 28 facilities/34 lagoons
Inundation, no indicated discharges 7 facilities/9 lagoons
Freeboard 0″ 10 facilities/12 lagoons
Freeboard 0-3″ 25 facilities/35 lagoons

The table above comes from DEQ’s Dashboard. The first category, waste lagoons with structural damage, need repair to stop the release of swine waste through the damaged  lagoon wall. Lagoons that are overtopping (the second category) have been inundated by flood waters and are spilling wastewater mixed with floodwater over the top of the lagoon wall. The other three categories describe swine waste lagoons that are full or nearly full, but not actively releasing wastewater to the environment.

All of these lagoons (and an unknown number of additional lagoons with only slightly more storage capacity) may continue to be a concern for weeks or months beyond the storm. The problem is this:  the entire swine waste management system depends on the ability to regularly spray wastewater from the lagoon onto a crop as fertilizer. Spraying down the lagoon level makes room for storage of new waste coming from the hog houses.  State permits for lagoon and sprayfield systems limit spraying to the amount the receiving crop can use as a nutrient (to avoid contaminating groundwater with excess nitrogen or phosphorus) and prohibit spraying swine waste on already-saturated ground to avoid runoff.  Under those permit conditions, spraying down lagoon levels may not be possible for some period time after the storm has ended because surrounding agricultural lands remain saturated.  In the past, the tension between a need to lower lagoon levels to prevent additional breaches and the environmental impact of spraying wastewater on saturated soil has led to some difficult and controversial policy decisions. Farms have also sometimes needed to remove animals for a period of time because of the lack of waste storage capacity.

Although poultry operations get less media attention than the swine farms, flooding also sweeps poultry waste into floodwaters and creates similar problems for post-storm land application of poultry waste onto agricultural fields.

Coal ash releases. Historically, much of the coal ash produced by coal-burning power plants in N.C. has been disposed of in open ponds that work on the same principle as the swine waste lagoons – solids go to the bottom of the pond and water levels are lowed periodically by pumping from the top layer of water. The difference is that Duke Energy has Clean Water Act permits allowing discharge of water from the top of the coal ash ponds into a nearby river, lake or stream.  Permit conditions  limit the volume to levels that will not cause a violation of water quality standards in the water body receiving the discharge. Hurricane Florence has already caused a significant breach in the dam separating Sutton Lake from the Cape Fear River. The lake receives a wastewater discharge from the Sutton plant’s coal ash pond. DEQ has also documented erosion/wash-out of coal ash from older, now vegetated coal ash basins at the Lee Plant (Goldsboro). DEQ has posted video of the Sutton site and photographs of washover from the Lee ash basin on the Dashboard coal ash page.

Going forward, the question will be what kind of repair/restoration/remediation may be required to address the coal ash releases.

Disposal of dead animals. Disposal of a large number of animal carcasses following a storm has environmental implications, but falls under the responsibility of  the State Veterinarian in the Department of Agriculture and Consumer Services. To date, the Agriculture department has reported over  3 million poultry and more than 5,000 swine killed by Florence and those numbers may rise.  Under state law (G.S. 106-403), dead animals can be buried under three feet of soil or disposed of in any other way approved by the State Veterinarian.  Some of the alternative disposal methods used in the past include composting (particularly of poultry); rendering for use in animal feed; and incineration.  In the past, burial has raised  concern about potential for groundwater contamination since many of the large animal operations affected by flooding are located in southeastern counties with naturally high water tables.   Although G.S. 106-403 requires a burial site to be at least 300 feet from a  “flowing stream or other public body of water”, the law doesn’t expressly take groundwater impacts into consideration.

Dam failures and landslides.  DEQ’s Division of Energy, Mineral and Land Resources responds to dam safety emergencies and oversees repair/reconstruction work under the state’s Dam Safety Act. The same division has a role in responding to landslides. Heavy rains associated with Florence caused several landslides in mountain counties that closed roads, but thankfully did not cause any deaths.

Rebuilding.  Looking beyond storm response and cleanup, rebuilding in coastal areas becomes a significant permitting challenge for state water quality and coastal management agencies.  Once floodwaters recede,  staff in the state Division of Coastal Management (DCM) helps FEMA do initial damage assessments to distinguish repairable buildings from those that have more than 50% structural damage and require reconstruction. Some number of the  heavily damaged/destroyed  structures will  raise  policy issues about whether or  how to allow rebuilding.  Older, “nonconforming”  structures that did not meet current building code, zoning or coastal development rules before the storm may  not be able to meet those standards to rebuild.  Some of the most difficult post-storm reconstruction decisions involve buildings that cannot meet current stream buffer or oceanfront setback requirements.

DCM uses special emergency permits developed in response to past storms to allow routine reconstruction to begin quickly. The emergency permits cover reconstruction of buildings and accessory structures (such as docks) that can be rebuilt in their previous location and within the same footprint.

Update note: The original blogpost has been revised to clarify that the dam between Sutton Lake and the Cape Fear River breached rather than the coal ash pond.