Category Archives: Water

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

GenX in the State Budget

June 18, 2018. Instead of acting on the GenX bill described in an earlier post, the legislature inserted GenX provisions into the state budget bill (Senate Bill 99). The provisions adopted in the budget differ from those in House Bill 972/Senate Bill 724 in several key ways:

♦ The budget provision expressly makes a Governor’s order appealable through an administration hearing. (The earlier post noted that a Governor’s order would likely be appealable under the state’s Administrative Procedures Act even if the bill did not specifically mention appeal rights.)

♦ Language has been added to c;larify that the grant of new enforcement power to the Governor does not prevent DEQ and the Environmental Management Commission from also using their existing enforcement power under other state laws to address PFAS. The new language eliminates confusion about the impact on DEQ’s ongoing enforcement cases against Chemours and confirms that DEQ can still go directly to court in future enforcement cases if necessary.

♦ The budget provision reduces the funds appropriated to the UNC Environmental Policy Collaboratory from $8 million to just over $5 million and limits the scope of funded water quality research. Instead of supporting non-targeted monitoring for a broad range of unregulated pollutants, the funds could only be used for monitoring of PFAS.

♦ Funding for monitoring of Cape Fear Public Utility Authority’s water supply has similarly been limited to monitoring for PFAS.

♦ The budget dropped funding for additional resources in the Department of Health and Human Services to evaluate health risks associated with unregulated water contaminants. The earlier House and Senate GenX bills had earmarked over $500,000 for DHHS; under the budget bill, DHHS receives no funding for toxicology and epidemiological study of contaminants in North Carolina’s water supply sources.

Funding proposed for DEQ did not change. DEQ will receive $1.3 million in new funding related to PFAS contamination, although new staff positions created with the funding must be time-limited rather than permanent. The budget also provides funding for a mass spectrometer to be used in analyzing water samples for PFAS. The budget provision, however, specifies a particular type of mass spectrometer that does not have as much technical capacity to identify other unregulated contaminants as DEQ had recommended.

The budget provision continues to require a person (or company) responsible for PFAS contamination to provide an alternative water source to the well owner. The responsibility only exists if releases of the pollutant caused the well contamination. Requiring a causal connection between the pollution release and the well contamination follows the approach taken under existing state groundwater protection rules. It is different from 2016 coal ash legislation that required Duke Energy to provide alternative water supply to well owners within a 1/2 mille perimeter around every coal ash pond even if coal ash disposal had not been proven to be the cause of the well contamination.

What do the changes mean? Since the new Governor’s authority can trigger an administrative appeal (which may take a year or more to reach a final decision), it doesn’t provide a more direct or effective remedy than DEQ’s existing authority to request a court order. As a result, it isn’t likely the new authority will be used often if at all.

Narrowing the focus of the water quality monitoring funded through the UNC Environmental Policy Collaboratory to PFAS has a mixed effect. Investigation of PFAS contamination will receive more resources, but none of the appropriated funds will go to identification of other unregulated contaminants in N.C. water supplies.

Removal of the DHHS funding leaves the department with extremely limited staff resources to evaluate human health risk when regulatory agencies or researchers identify a new unregulated contaminant in a water supply source.

Status. Governor Cooper vetoed the budget bill on several grounds. The House and Senate have overridden the veto, allowing the bill — including the revised GenX provisions — to become law.

GenX Legislation and Unintended Consequences

May 18, 2018. Yesterday, the N.C. House and Senate introduced identical bills in another attempt to legislatively address the impact of GenX (a perflourinated compound) on the Cape Fear River and drinking water wells. See an earlier post for background on the GenX issue. In September of 2017, the Department of Environmental Quality (DEQ) filed a lawsuit against The Chemours Company under existing water quality laws and reached a partial consent order that requires Chemours to end all wastewater discharges of GenX to the river from its Fayetteville facility. The consent order reserves DEQ’s right to ask the court to order Chemours to take additional actions related to GenX groundwater contamination and other violations. DEQ has also reviewed Chemours’ air emissions, which may be another source of surface and groundwater contamination as GenX returns to the ground in rainwater. Based on monitoring results, DEQ has notified Chemours of an intent to modify the plant’s air quality permit. Copies of documents related to the enforcement actions can be found on DEQ’s Chemours enforcement webpage.

The two new bills, House Bill 972 and Senate Bill 724, appropriate money to address GenX and other per- and poly-fluoroalkyl substances (PFAS), but also change environmental enforcement law and require specific steps to address GenX groundwater contamination. This post focuses on the possible unintended consequences of provisions in the bill that affect environmental enforcement and remediation.

Section 1 of each bill creates a specific enforcement provision for contamination caused by GenX or other PFAS by adding a new paragraph to an existing enforcement law, G.S. 143-215.3, authorizing the Governor to order a facility to stop operations resulting in release of GenX or other PFAS. Although the intent may be to provide a quick response to PFAS pollution, the provision may actually slow or undercut DEQ’s ability to pursue enforcement actions against Chemours or a future source of PFAS pollution.

Under existing water and air quality laws, DEQ can direct a facility to stop an illegal wastewater discharge or emission of air pollutants by issuing a Notice of Violation or compliance letter. If the violator fails to comply within the time allowed or DEQ believes the violation creates an imminent threat, DEQ can file a lawsuit and ask for a court-enforced injunction requiring compliance. Last year, DEQ used that authority (see G.S. 143-215.6C) to file an action in superior court against Chemours. The lawsuit has already resulted in a partial consent order to end all wastewater discharges of GenX to the Cape Fear River. Since then, DEQ has continued to investigate the scope of GenX groundwater contamination and has issued compliance letters to Chemours requiring initial steps to address sources of groundwater contamination (such as stormwater drainage). DEQ has the ability to go back to court if Chemours fails to follow through. As the permitting agency DEQ can also address both water and air quality impacts by changing the terms of the Chemours’ permits. DEQ has already notified Chemours of the department’s intent to modify the facility’s air quality permit, presumably to reduce air emissions of GenX.

The new provision in H972 and S724 would allow the Governor to issue an administrative order to shut down releases of GenX or other PFAS. On its face, a Governor’s order sounds like a quicker and more direct way to stop the release of these pollutants. In reality, any order could be appealed in an administrative hearing and the administrative law judge has the power to prevent the order from going into effect until there has been a final decision on the appeal. Although the bills don’t mention the possibility of an administrative appeal, the state’s Administrative Procedures Act (APA) creates that right. (See G.S. 150B-23 for the law on appealing state actions.) An administrative appeal can take as much as a year, slowing enforcement. Under existing water and air quality enforcement laws, DEQ can go directly to court for an injunction instead of issuing an order potentially leading to an administrative appeal hearing.

The new provision raises questions about both the path forward on existing Chemours enforcement actions and the impact on future state enforcement actions in response to release of PFAS from other facilities.

With respect to DEQ’s ongoing Chemours enforcement actions, one question is whether the legislature intends the new provision to be the exclusive remedy for Chemours’ violations, overriding DEQ’s ability to go directly to the courts for an injunction. In the absence of clear legislative language to the contrary, courts can interpret more recent and more specific laws to override earlier and more general laws. The risk would be that a court may interpret the new enforcement provision specifically addressing PFAS pollution to override existing but more general water/air quality enforcement laws. At the very least, the legislation needs to be clear about the relationship between the Governor’s new power and DEQ’s existing authority to go directly to court for an injunction. If the new provision becomes the only enforcement path, the legislation could slow rather than accelerate enforcement against Chemours.

There may also be a need to harmonize the Governor’s power with DEQ’s permitting authority under the Clean Water Act and Clean Air Act. An order affecting wastewater discharges or permitted air emissions will likely require modification of facility permits. Under federal delegations of permitting authority to DEQ, significant modification of a permit usually triggers requirements for public notice and EPA review.

The new provision also limits issuance of a Governor’s order in several ways that don’t apply when DEQ exercises its existing water quality and air quality enforcement authority:

♦ An order could only be issued for a facility that has an NPDES (wastewater discharge) permit. The order could not be used for a completely unpermitted source or to address air emissions causing PFAS pollution if the source doesn’t also have an NPDES permit.

♦ An order could not be issued unless the facility had received more than one Notice of Violation in the previous two years.

♦ DEQ has to make efforts to eliminate the unauthorized discharges for at least a year before an order can be issued.

The conditions were clearly written to cover Chemours. But if a PFAS pollution problem arises at another facility, the provision could hamstring DEQ’s ability to act unless and until all three conditions have been met. Again, this creates a significant problem if the new provision becomes the only enforcement remedy for addressing PFAS pollution.

Many of the concerns raised by Section 1 could be addressed by clarifying that existing environmental enforcement laws/rules implemented by DEQ continue to apply, making the new provision an additional tool rather than the only remedy for PFAS pollution. Even then, it may be necessary to provide guidance on how issuance of a Governor’s order affects both pending and future DEQ enforcement actions under those existing laws.

This section of H972 and S724 has a sunset date of December 31, 2020, which means it would be automatically repealed on that date unless the legislature acts to extend it.

Sec.4(a) Directs DEQ to develop a plan to assess and remediate groundwater and surface water contamination associated with PFAS. Again, the legislation doesn’t explain how the provision affects DEQ’s existing authority especially with respect to groundwater contamination. State groundwater rules require the person who caused the contamination to develop under DEQ supervision – and pay for – a plan to assess and remediate groundwater contamination. The bill language does not mention state groundwater rules or the polluter’s responsibility for assessment and remediation; it appears to put the entire responsibility for an assessment and remediation plan on DEQ. This is likely another unintended result that could be fixed by cross-referencing existing rules describing the polluter’s responsibility for assessment and remediation.

As a practical matter, this is a bigger issue for groundwater assessment and remediation than for surface water pollution. DEQ can often assess surface water impacts by taking in-stream samples and eliminate the impact by simply stopping or reducing the discharge. Determining the extent of groundwater contamination and implementing a groundwater cleanup plan can be much more time, labor and money-intensive.

One other note. Section 2 of the bill authorizes DEQ to order a person responsible for contaminating a drinking water well with GenX or another PFAS to provide a permanent alternative water supply to the well owner. The language looks very similar to the alternative water supply provision in 2016 coal ash legislation. The difference: the coal ash provision required Duke Energy to provide an alternative water supply to every well owner within 1/2 mile of a coal ash impoundment; the GenX provision applies to individual wells on a case by case basis. DEQ would need to order Chemours to provide alternative water supply to an individual well owner based on data linking the well contamination to Chemours as the source. Again, the GenX provision doesn’t mention existing state groundwater rules that already require the person who caused groundwater contamination to “mitigate any hazards resulting from exposure to the pollutants” and restore groundwater to meet state standards. (15A NCAC 2L.0106). On a quick review, the GenX alternative water supply provision seems to be consistent with existing state groundwater rules but does not necessarily provide a speedier path to alternative water supply. In either case, the burden is on the state to establish the cause and effect link between Chemours’ activity and contamination of individual wells.

Making Polluters Pay

March 14, 2018. To follow on the last blogpost, some background on a polluter’s legal responsibility to pay for environmental damage and limits on the state’s ability to use penalties to fund environmental protection programs.

Scope: The issue has come up in response to GenX , but this blogpost should not be taken as legal advice with respect to pending or future GenX litigation. The blogpost also focuses on what the state can require a polluter to pay under its authority to enforce federal or state environmental laws. A person harmed by pollution (such as groundwater contamination) can also sue and ask a court to order compensation for individual injury or property damage. Different legal principles govern those personal injury/property damage cases.

The Prompt. In January, the North Carolina House of Representatives passed House Bill 189 to legislatively address GenX and other emerging contaminants. In addition to creating a number of studies, the bill proposed to appropriate $2.4 million to the Department of Environmental Quality (DEQ) for wastewater permitting, water quality monitoring, and analysis of emerging contaminants. Senate President pro Tem Phil Berger had a very negative reaction to the proposed appropriations:

“[H 189] leaves North Carolina taxpayers holding the bag for expenditures that should be paid for by the company responsible for the pollution, fails to give [the Department of Environmental Quality] authority to do anything they can’t already do and authorizes the purchase of expensive equipment that the state can already access for free.”

The Senate refused to consider the House bill in January, but adopted its own version of H 189 when the legislature reconvened briefly in February. The Senate version included new appropriations, but funds directed to DEQ could only be used for purposes identified in the bill (such as a historical study of the state’s wastewater permitting program). The Senate bill did not allow DEQ to use any of the appropriated funds for wastewater permitting, compliance inspections, water quality monitoring, or purchase of analytical equipment, suggesting that Senator Berger has held to the position that the polluter should cover most of the cost of GenX response. Note: The House and Senate versions of H189 have not been reconciled so no GenX legislation has passed and it is unlikely the legislature will return to the issue again before the next regularly scheduled legislative session in May.

Can the state require a violator to contribute to the cost of environmental permitting, water quality monitoring, inspections of permitted facilities, or other regular program activities?

No. The N.C. Constitution (Article 9, Sec. 7) requires that the proceeds of “all penalties and forfeitures and of all fines collected in the several counties for any breach of the penal laws of the State” must be used exclusively to support the public school system. In the 1990s, the N.C. Supreme Court ruled that all state civil penalties –including those for environmental violations — must go to the “school fund”. In 2005, the court ruled that environmental agencies cannot enter into a settlement agreement that allows a violator to put funds toward a third-party project to conserve natural resources or improve the environment in place of a penalty. In the court’s eyes, the payment continues to be a “penalty” assessed in response to a specific violation of environmental rules and the money must go the school fund. (The 2005 case on funding of an “environmental enhancement project” as a substitute for a civil penalty is N.C. School Boards Association v. Moore.)

Although the court has not ruled on this specific question, the same principle seems to apply to requiring a violator to provide funds to support state environmental program activities in place of or in addition to a civil penalty. Once a payment becomes associated with a specific violation, the N.C. Supreme Court is likely to view it as a “penalty” for purposes of the N.C. Constitution. In that case, the money would have to go to the public schools rather than to environmental protection programs.

Permit fees can be used to support basic permitting, enforcement, and monitoring activities and many state environmental permitting programs have graduated permit fee schedules based on the type and size of the permitted facility. Making compliance history another factor in setting permit application/renewal fees probably would not conflict with N.C. Constitution — although it also may not generate significant additional revenue for environmental programs.

Can the state require the company responsible for pollution to pay anything other than a civil penalty?

Yes, but generally only the cost of response to the specific pollution incident and the environmental harm that it caused:

Natural resource damages. Several state and federal laws allow the state to recover for injury to the state’s natural resources. The compensation goes to the state as trustee for natural resources — such as fish and wildlife — held by the state for the use of all of its citizens. A patchwork of laws allow recovery of natural resource damage; some apply only to particular kinds of environmental harm (fish kills, for example) or specific types of pollution events (such as an oil spill). The Clean Water Act does not include a specific provision for natural resource damage caused by a wastewater discharge that does not involve oil or a “hazardous substance”; most chemicals found in a wastewater discharge, including GenX, are not EPA-listed hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) allows state natural resource damage claims for harm specifically caused by a spill of oil or an EPA-listed “hazardous substance”. N.C. law has a somewhat broader provision that allows DEQ to require compensation for natural resource damage caused by any release of pollutants that results in a fish kill or injury to wildlife. In those cases, the state recovers only the value of the natural resource lost — not program costs. Under the state law allowing recovery of damages for injury to fish and wildlife, the amount of damages is based on a Wildlife Resources Commission estimate of the value of the lost fish or wildlife. [N.C. General Statute 143-214.3(7).]
Cost of State response to a spill of oil or an EPA-listed hazardous substance. N.C. General Statute 143-215.88 allows the state to recover the cost of state response to a spill. An example of state costs would be initial emergency response, such as putting booms in the water to control an oil spill. These are usually costs the state incurs early in spill response when the source of the spill may not be known. Later, the polluter would be expected to carry out the response.
Investigative costs. Under several state laws, DEQ can recover the costs of investigating a pollution incident. These laws only apply to costs associated with the specific event and not the costs of maintaining DEQ’s ongoing inspection/compliance/pollution monitoring programs.
Measures to eliminate a threat to public health and safety; clean-up groundwater and soil contamination; or restore other kinds of environmental damage (such as wetlands disturbance) caused by a violation. Most environmental laws, including the Clean Water Act, make restoration of environmental harm the responsibility of the violator. Both EPA and the state water quality programs have the authority to seek a court order to stop an unlawful discharge and require the violator to take steps to prevent future unlawful discharges. Under state law, DEQ routinely requires violators to cleanup groundwater and soil contamination caused by a pollution incident. These expenditures are different from the kind of environmental enhancement or conservation projects struck down in N.C. School Boards Association v. Moore because they are limited to addressing the direct impact of a specific violation.

What does this mean for funding a better state response to GenX and other emerging contaminants?

The N.C. Constitution does not allow DEQ to use the proceeds of any penalty for violation of environmental laws and rules — or anything that looks like a substitute for a penalty — to support environmental protection programs. Past N.C. Supreme Court decisions suggest the court would view assessment of environmental program costs against a violator as another form of penalty that must also go to the public schools. Given the constitutional provision, funds to strengthen the state’s response to emerging contaminants like GenX will largely have to come from state appropriations, permit fees and EPA grants.

New Legislative Activity on GenX

January 12, 2018. When the N.C. General Assembly convened on January 10, the House unanimously adopted House Bill 189 – a bill described by House members as a first step toward improving the state response to unregulated water pollutants.

GenX and the path to House Bill 189. EPA began studying the effects of perfluorinated compounds (used in products such as firefighting foam, water repellants and Teflon) more than fifteen years ago. EPA worked with chemical companies to phase-out the two most common compounds, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), because of concerns about persistence in the environment and human health risk. In 2009, Dupont began manufacturing another type of perflourinated compound, GenX, as a replacement for PFOA. The Chemours Company now operates the GenX manufacturing facility in Fayetteville North Carolina which is located upstream of drinking water intakes for Cape Fear Public Utility Authority (serving Wilmington/New Hanover County) and several smaller water systems.

GenX has uncertain health and environmental risks and no federal standards exist to guide state permitting and enforcement action. EPA has not adopted a drinking water standard for GenX, identified the compound as a priority water pollutant, or set effluent guidelines for discharge of the chemical under a Clean Water Act wastewater discharge permit (the National Pollutant Discharge Elimination System or “NPDES” permit). EPA has indicated a concern that GenX may share some of the environmental and health risks associated with PFOA and PFOS. GenX is one of many “emerging” or “unregulated” contaminants that can be released to the environment. An earlier blogpost described the major federal environmental laws touching on manufacture, use and discharge of chemical compounds like GenX and the gaps in those laws.

The path to House Bill 189 began with the 2016 discovery of GenX in drinking water systems using the Cape Fear River as a water supply source. Later, GenX was also found in private drinking water wells near the Fayetteville facility. Public concern about the health effects of GenX and the adequacy of federal/state regulation of contaminants like GenX created pressure for legislative action. In August 2017, the General Assembly appropriated funds to Cape Fear Public Utility Authority and to UNC-Wilmington to study GenX and water treatment options. The legislation, described here, made no substantive changes to state law and allocated no funding to programs in the Department of Environmental Quality (DEQ) and the Department of Health and Human Services (DHHS) responsible for enforcing water quality standards and establishing health guidelines for exposure to environmental contaminants. The state House of Representatives, however, created a Select Committee on River Water Quality to further study the issue of unregulated contaminants between legislative sessions. The substance of House Bill 189 came out of the House select committee’s work.

House Bill 189. The bill does not break new ground in water quality law, but directs DEQ to undertake several studies that could lead to recommendations for future legislation on unregulated contaminants. The bill also proposes to allocate additional state funds to the issue. Although prompted by GenX, the bill’s provisions apply more broadly to GenX and other unregulated contaminants. By section:

Sec. 1 Science Advisory Board review of the DHHS process for setting health goals for contaminants and new health goals set by the department. In 2017, DEQ reconstituted the department’s existing Science Advisory Board to provide additional expertise in setting health goals for exposure to unregulated contaminants. Health goals represent the concentration of a contaminant considered safe for humans based on studies of both immediate, acute effects (such as illness, organ damage, skin irritation or respiratory distress) and long-term effects (primarily increased cancer risk). H 189 supports DHHS consultation with the Board on health goals and goes further to require DHHS to notify the Science Advisory Board before issuing a new health goal. The bill then focuses on the process for setting health goals, directing the Science Advisory Board to study the DHHS process and make recommendations. Legislative interest in the process for setting health goals may have arisen from recent controversies over use of health goals to advise property owners on the safety of well water affected by contaminants associated with coal ash. Both legislators and industry representatives have sometimes questioned the scientific basis for a health goal as well as the appropriateness of using a non-regulatory health goal to guide regulatory decisions such as groundwater cleanup and the obligation to provide alternative water supply. See earlier posts concerning controversy over health goals for contaminants associated with coal ash here and here.

Sec. 2 A study of the Clean Water Act permitting program for wastewater discharges. The bill directs DEQ to study specific issues in the NPDES permitting program: 1. Whether NPDES permit applications require sufficient information about pollutants in the wastewater to be discharged; 2. Monitoring, sampling, and analytical requirements for wastewater dischargers; 3. The process for setting standards or discharge limits for contaminants when there is not an existing state or federal standard; and 4. The timeliness and thoroughness of permit reviews. A report must be provided to the legislature by April 1, 2018. Parts 2 and 3 of the study likely reflect business/industry interest in the process for setting NPDES permit conditions. That could lead into a debate over how much DEQ can require through individual permit conditions versus going through a rule making process to set generally applicable permit standards.

Sec. 3. Interstate exchange of information about pollutants entering North Carolina rivers. DEQ has been directed to better coordinate interstate exchange of information about pollutants entering river basins that North Carolina shares with neighboring states (West Virginia, Virginia, South Carolina, Georgia, and Tennessee).

Sec. 4. Notice of illegal discharges and the presence of unregulated contaminants in surface waters. This section of the bill creates another DEQ study; this study would focus on: 1. The adequacy of existing laws requiring notice of an illegal discharge of untreated waste or wastewater; and 2. DEQ’s process for informing the legislature and the Environmental Management Commission of the presence of an unregulated contaminant for which no state or federal discharge standard has been set. A report must be provided to the legislature by April 1, 2018.

Sec. 5. Water system liability for the presence of an unregulated contaminant in drinking water. The School of Government at UNC-CH will report to the legislature on the potential civil liability of a water system that distributes water contaminated by a pollutant for which no discharge standard has been set under state or federal law and any difference in liability exposure between public and private water utilities.

Sec. 6. Appropriation of funds to support activities related to unregulated contaminants. H 189 proposes to appropriate just over $1.3 million in one-time funding for water quality sampling; NPDES permitting; air quality sampling and analysis of atmospheric deposition of GenX; and sampling of groundwater, soil and sediment for GenX and other emerging contaminants. The money would come from unused funds originally appropriated for other purposes, including pilot nutrient management projects in the Jordan Lake watershed.

Sec. 7 Additional funding. The House proposes to appropriate an additional $479,736 in recurring funds from the state’s General Fund to DEQ for water quality sampling and analysis related to GenX and other unregulated contaminants and $537,000 from the state’s Contingency and Emergency Fund for analytic equipment (presumably a mass spectrometer) to evaluate emerging contaminants.

Impact of H 189. The bill does not set any new legal standards for discharge of unregulated contaminants to North Carolina waters or expand the existing authority of DEQ and DHHS to respond to unregulated contaminants. Instead, the bill mandates several studies that could lay the groundwork for future legislative action. House members stressed that the bill represents just a first step toward improving state response to unregulated contaminants.

Aside from the $537,000 earmarked for the mass spectrometer, the appropriations proposed in H 189 essentially offset another $1.8 million reduction in the DEQ budget for the 2017-2019 biennium. As a result, the appropriations do not represent an actual increase in DEQ’s budget from 2015-2017 levels. An earlier blogpost noted the impact of past budget cuts on the water quality program. DEQ had a two-year backlog of wastewater discharge permit renewals in December 2016 — before the reductions required in the most recent budget. The Chemours permit to discharge wastewater to the Cape Fear River from the Fayetteville Works fell in the category of permits overdue for review and renewal. The GenX controversy has also shown a brighter light on the additional burden on the state water quality program — in expertise, research capability, and analytical equipment — to address a contaminant for which no federal standard has been set.

So the appropriations in H 189 are helpful in offsetting additional DEQ budget cuts, but do not provide a net increase in funding. The appropriations also provide no additional resources to DHHS, which has significant responsibility for assessing and advising on the health impacts of an unregulated contaminant.

Senate response. The Senate adjourned without considering House Bill 189. A statement from Senate President pro tem Phil Berger criticized the bill as ineffective and seemed to oppose the appropriations:

“[H 189] leaves North Carolina taxpayers holding the bag for expenditures that should be paid for by the company responsible for the pollution, fails to give [the Department of Environmental Quality] authority to do anything they can’t already do and authorizes the purchase of expensive equipment that the state can already access for free.”

It isn’t clear which expenditures in H 189 the Senate wants to shift to the polluter or how that could be done. Most of the H 189 appropriations cover basic state water quality monitoring, permitting and compliance work. NPDES permit fees cover a percentage of permitting costs, but those fees do not vary based on a facility’s violation history. The legislature has also tended to view fee increases very skeptically out of concern for the impact on business and industry. A person responsible for illegally contaminating surface water or groundwater can be held financially responsible for cleanup costs and steps to minimize health impacts (such as providing bottled water to the owner of a contaminated well) , but state law does not currently require a violator to pay any additional amount toward support of basic regulatory activities.

Senator Berger’s statement indicated the Senate may take up legislation related to GenX in the next regular legislative session that begins in May.

GenX: The State Enforcement Case

November 14, 2017. An earlier post discussed some of the issues surrounding detection of a perflourinated compound known as GenX in the Cape Fear River and in water systems using the river as a drinking water source. On September 7, 2017, the Department of Environmental Quality (DEQ) issued a Notice of Violation and filed a legal complaint against the Chemours Company alleging violations of the federal Clean Water Act and state groundwater rules related to GenX. This post looks at the specific allegations in the state enforcement case. ( A copy of the entire complaint can be found on DEQ’s GenX webpage.)

One piece of background information — Dupont began manufacturing GenX at the Fayetteville Works in 2009, but transferred the operation and associated environmental permits to the Chemours Company in 2015. The sequence of events surrounding GenX begins under Dupont management, but the enforcement case names only the Chemours Company — the current owner and permit holder — as defendant.

The enforcement case against Chemours makes two basic claims:

1. Chemours violated the Clean Water Act by discharging GenX to the Cape Fear River under a water quality permit that did not authorize any discharge of GenX. The state claims neither Dupont nor Chemours told DEQ that wastewater discharged from the Fayetteville Works to the Cape Fear River would contain GenX and other perflourinated compounds. According to the complaint, state water quality staff understood that the GenX manufacturing plant opened in 2009 would use a “closed loop” system and dispose of all wastewater off-site. In fact, a consent agreement between the U.S. Environmental Protection Agency (EPA) and Dupont under the Toxic Substances Control Act (TSCA) only allowed manufacture of GenX under conditions requiring Dupont to effectively eliminate GenX from both the wastewater discharge and air emissions associated with the manufacturing process.

The complaint alleged that Chemours, in applying for its most recent National Pollutant Discharge Elimination System (NPDES) permit under the Clean Water Act, did not tell DEQ that other operations at the Fayetteville Works generated wastewater containing GenX as a byproduct. (The implication is that Dupont had also failed to disclose the presence of GenX as a byproduct when applying for earlier water quality permits.) Chemours discharged wastewater from those operations to the Cape Fear River.

DEQ alleges Chemours violated the Clean Water Act by failing to tell state permit writers that wastewater from the Fayetteville Works contained GenX (and other perflourinated compounds) and by discharging GenX to the Cape Fear River under an NPDES permit that did not authorize discharge of those compounds.

2. Chemours violated state groundwater standards. According to the DEQ complaint, Chemours’ hazardous waste permit has required groundwater monitoring since at least 2003 and included sampling for PFOA (the older perflourinated compound replaced by GenX ). After detection of PFOA in the Cape Fear River in 2015, DEQ required supplemental groundwater monitoring to determine whether groundwater at the Fayetteville Works could be the source. It isn’t clear from the complaint whether the hazardous waste permit required monitoring for PFOA from the beginning and expanded the scope in 2015 or first required PFOA in 2015. DEQ did not specifically require monitoring for GenX until August of 2017. The initial sampling detected GenX in 13 of 14 monitoring wells on the grounds of the Fayetteville Works.

Under state rules, the groundwater standard for any contaminant that does not occur naturally is the lowest measurable level (the “practical quantification level” or “PQL”) unless the rules set a higher standard based on evaluation of health and environmental risk. Since GenX does not occur naturally and state rules set no other standard, the allowable concentration of GenX would be the PQL of 10 nanograms/liter (equivalent to 10 parts per billion). The 2017 monitoring detected levels of GenX ranging from 519 ng/ltr to 61,300 ng/ltr. All five wells located adjacent to the Cape Fear River had levels of GenX exceeding 11,800 ng/ltr. DEQ found the test results documented widespread groundwater contamination on the Fayetteville Works site exceeding both the 10 ng/ltr groundwater standard and the threshold for human health effects identified by the state Dept. of Health and Human Services (140 ng/ltr level).

Status of the enforcement case. The DEQ complaint asked, in part, that Chemours immediately stop any discharge of GenX and related compounds to the Cape Fear River. On September 8, 2017 (the day after filing the enforcement case), DEQ entered into an agreement with Chemours to resolve the discharge issue. Under a partial consent agreement, Chemours agreed to continue voluntary measures undertaken early in the summer to prevent discharge of process wastewater containing GenX to the Cape Fear River. The partial consent agreement also required Chemours to take similar steps to prevent discharge of two other perflourinated compounds from the “single source of significance” of those compounds at the Fayetteville Works.

The partial consent agreement did not resolve all potential violations at the Fayetteville Works. The consent agreement did not address any of the groundwater standard violations alleged in DEQ’s September 7, 2017 complaint. DEQ also expressly reserved the right to take additional enforcement action in the event of future unpermitted discharges or violations associated with other chemicals. In fact, DEQ issued a new Notice of Violation to Chemours today based on a previously unreported spill at the Fayetteville Works. That NOV alleges that Chemours violated its NPDES permit by failing to notify DEQ of an October 6, 2017 spill of dimer acid flouride ( a precursor to GenX) from the manufacturing line.

Still to come. With respect to the groundwater violations, DEQ’s September complaint asked the court to order Chemours to:

♦ Remove, treat or control any source of perflourinated compounds at the Fayetteville Works that could contribute to groundwater contamination. Consistent with state groundwater rules, that would need to be done under a plan approved by DEQ.

♦ Fully assess the extent of groundwater contamination and develop a plan to address the groundwater contamination. (Again, both the assessment and corrective action plans would be subject to DEQ approval).

It does not appear that Chemours has an approved groundwater assessment plan yet and the groundwater corrective action plan can only be developed once the assessment has been done. In the meantime, DEQ has directed Chemours to provide an alternative source of drinking water to 50 households near the Fayetteville Works whose water supply wells have been contaminated by perflourinated compounds.

DEQ’s September complaint focused on actions necessary to stop the discharge of GenX to the Cape Fear River and address groundwater contamination, but state law also authorizes DEQ to assess civil penalties for these violations. The maximum civil penalty for each violation of state water quality laws or rules is $25,000 and if a violation continues over a period of time, state law authorizes DEQ to assess daily penalties. (N.C. General Statute 143-215.6A.) The actual penalty amount per violation depends on a number of factors set out in the law, including the extent of harm and whether the violation was intentional. In the case of a continuing violation, DEQ would also have to decide what time period merits daily penalties. DEQ usually develops the penalty assessment separately from legal action to obtain compliance and has not yet proposed penalties for the Chemours violations.

The Legislative Response to GenX

September 10, 2017. At the end of its most recent one-week session, the N.C. General Assembly added GenX provisions to an existing bill, House Bill 56 (Amend Environmental Laws), and passed the bill with little discussion. Section 20 of H 56:

Amends the state budget to give $185,000 to Cape Fear Public Utility Authority (CFPUA) — $100,000 to study water treatment methods to remove GenX from the water supply and $85,000 for ongoing monitoring of water withdrawn from the Cape Fear River.
Allocates $250,000 to UNC-Wilmington to “identify and quantify GenX and measure the concentration of the chemicals in the sediments of the Cape Fear River, the extent to which the chemical biodegrades over time or bioaccumulates within local ecosystems, and what risk the contaminant poses to human health”. The provision requires a final report from these studies by April 1, 2018.
Directs UNC-Chapel Hill to develop a proposal to (i) identify and acquire digital environmental monitoring and natural resource data and digitize analog data; (ii) create an online, searchable public database of water quality permits, permit applications, and supporting documents; and (iii) create a system for electronic filing of permit applications. The provision also directs UNC-CH to study the feasibility of housing the database at UNC rather than with the permitting agencies in the Department of Environmental Quality (DEQ).
Requires DEQ to report back to the legislature if the department has not issued a Notice of Violation to any person or company for discharge of GenX into the Cape Fear River by
September 8.

The bill does not allocate any additional funding to either DEQ or the Department of Health and Human Services (DHHS). Governor Cooper had requested $2.5 million for the two departments to provide more resources for water quality monitoring; inspection of permitted facilities; permitting (and particularly elimination of the backlog in permit renewals); and development of health advisories for unregulated contaminants. Instead, DEQ faces a $1.8 million budget reduction for 2017-2018, continuing a trend of repeated cuts to the department’s budget over the last 10 years. (See an earlier blogpost for the effect of those budget reductions.)

How will House Bill 56 affect efforts to address GenX? The bill supports efforts by Cape Fear Public Utility Authority to identify treatment systems capable of removing GenX from the water; increase water quality monitoring; and learn more about the impact of GenX. Much of the funding would offset the cost of efforts already underway by CFPUA.

Cape Fear Public Utility Authority had begun pilot testing use of granular activated carbon and ion exchange systems to remove GenX from the water several weeks before. The $100,000 appropriation to study water treatment alternatives could reimburse CFPUA for past and future expenses incurred in the pilot testing. The funding would not be sufficient to actually upgrade water treatment in the water systems affected by GenX contamination.

Cape Fear Public Utility Authority had also entered into a one-year contract with UNC-Wilmington for just under $65,000 to analyze raw water and treated water samples for additional perflourinated compounds and to advise the utility on water treatment. House Bill 56 does not specifically describe the intent of the $85,000 appropriation for water supply monitoring, but the funds could cover the existing CFPUA/UNC-W contract. (The water quality monitoring would supplement, but not replace, monitoring done by the Department of Environmental Quality.)

The $250,000 in funding directed to UNC-Wilmington to study GenX would support new research and could generate important information about persistence of GenX in the environment and public health risk. The 6-month timeframe for the study, however, allows only a very short time to gather data and reach conclusions.

The UNC-Chapel Hill feasibility study for a digitized public database of water quality permit information would be the first step in a very long term project. Creating a permitting database outside the permitting agency will raise a number of legal, practical, policy and funding issues: how to protect confidential information in permit applications (such as trade secrets); cost of digitizing analog data and creating a new database; and the complications of maintaining a database (or databases) to meet the very different needs of permit writers and the public. Whatever the outcome of the study, the benefits of increased public access to permitting databases would likely be far in the future and require funding not provided in House Bill 56. [Note: Currently, anything in the permit file that is not protected by state confidentiality laws can be obtained through a public records request.]

What has been left undone? None of the funding in the bill would go toward keeping GenX and other unregulated contaminants out of the Cape Fear River and other water supply sources. Only state and federal regulators can adopt water quality standards for the Cape Fear River and set permit limits for the discharge of GenX and other emerging contaminants to the river; local water systems do not have that power.

The bill does not address the lack of resources in DEQ and DHHS to evaluate the health and environmental risk of compounds like GenX before contamination of a water supply causes a crisis. GenX issue is only the most recent of several controversies over unregulated contaminants in North Carolina water supplies. Just within the last four years, the state has faced similar concerns about hexavalent chromium in drinking water wells and 1,4 dioxane in the Haw River. In each instance, state agencies had to develop guidance on safe levels of the contaminant in the absence of a clear federal standard and decide how to use the risk analysis in state permitting and enforcement decisions.

The weakness of the GenX response in House Bill 56 is that it reacts to water supply contamination without taking steps to prevent it. Once a contaminant has entered a water supply source, water systems — and their customers — shoulder the financial burden of using technology to reduce contamination to safe levels through water treatment. The bill also focuses narrowly on GenX rather than the broader problem of emerging contaminants affecting state water supplies. Nothing in the bill strengthens the state’s ability to detect other emerging contaminants in water supply sources; enforce water quality permit conditions; or assess health and environmental risk.

Next steps. As of today, the Governor had not yet signed or vetoed House Bill 56; the Governor’s decision could be affected by any number of provisions in the bill beyond those responding to GenX. DEQ has taken an enforcement action against Chemours based on both discharge to GenX to the Cape Fear River and detection of GenX in groundwater on the site. (More about the enforcement action in the next blogpost.)

The Laws in the Background of the GenX Issue

August 21, 2017. In June, residents of southeastern North Carolina learned of a previously unknown contaminant in the Cape Fear River; a study undertaken by an N.C. State University researcher documented the presence of the perflourinated compound known as “GenX” in a report published in December 2016. The river provides drinking water for Wilmington-New Hanover County and other water systems.

The U.S. Environmental Protection Agency (EPA) began studying the effects of perfluorinated compounds used in firefighting foam, water repellants, Teflon, and other products more than fifteen years ago. EPA worked with chemical companies to phase-out the two compounds most commonly used, perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), because of concerns about persistence in the environment and human health risk. In 2000, 3M Corporation announced a phaseout of PFOS. Under a 2006 agreement with EPA, eight companies committed to phase out PFOA by 2015. In 2009, Dupont began manufacturing GenX, a chemically distinct perflourinated compound, at its Fayetteville plant as a replacement for PFOA. (The Chemours Company, a Dupont spin-off, now operates the Fayetteville plant.)

The discovery of an unregulated chemical with uncertain health and environmental risks in a water supply source created a high level of concern in the affected communities. It has also drawn attention to gaps in the safety net of federal environmental regulations with implications for all unregulated contaminants in water supplies. In many ways, the GenX controversy parallels the earlier controversy in North Carolina over hexavalent chromium (a contaminant associated with coal ash) in drinking water wells. In each case, the absence of a federal standard — or EPA’s failure to update a standard based on current science — left the state struggling to evaluate health risk and develop an appropriate regulatory standard.

A number of news organizations have provided detailed coverage of the GenX controversy and Cape Fear Public Utility Authority posts key documents and monitoring results online . This post will focus on the key federal laws involved and the gaps in those laws that the state may need to fill. Although I will use the GenX issue as an example, this blogpost should not be interpreted as an assessment of legal claims or liabilities associated GenX contamination in the Cape Fear River.

Toxic Substances Control Act (TSCA). EPA regulates manufacture and importation of chemicals under the Toxic Substances Control Act of 1976. Two of the key requirements of the law:

♦ Section 5 requires manufacturers to give EPA notice before manufacturing a new chemical. (EPA maintains a Toxic Substances Inventory of previously approved chemicals.) Based on review of information submitted with the notice, EPA may find the new chemical is “not likely to represent an unreasonable risk” and approve manufacture. But if EPA doesn’t have sufficient information to evaluate environmental and health effects or if the lack of information creates an unreasonable risk of harm, EPA can issue an order requiring additional testing or limiting release of the chemical to the environment. Concern that GenX may have risks similar to those already associated with PFOA and PFOS caused EPA to enter a 2009 consent order that (among other conditions) required Dupont to effectively eliminate release of GenX in wastewater and air emissions from the manufacturing operation.

♦ Section 8 of TSCA requires chemical manufacturers and distributors to inform EPA of any information the company obtains that would reasonably support a conclusion that a chemical presents a substantial risk of injury to health or the environment. In 2005, EPA used Section 8 of TSCA to assess a penalty against Dupont for withholding information the company had on the environmental and health effects of PFOA. That EPA action ultimately led to the phaseout of PFOA and development of alternatives like GenX.

Regulatory Gaps –TSCA covers chemicals manufactured or imported into the United States. It does not apply to a chemical by-product of a manufacturing or industrial process. The TSCA consent order for GenX limits release of GenX to the environment by the manufacturer, but not the discharge of GenX unintentionally created as a result of an unrelated manufacturing or industrial process. As a result, TSCA can’t address all contaminant sources. The TSCA review process also puts EPA in the position of constantly chasing the next generation of potential contaminants.

Safe Drinking Water Act. EPA has adopted national drinking water standards for 88 contaminants. Public water systems must monitor for those contaminants and insure that water delivered to its customers meets the national standard for each regulated contaminant. Given the number of compounds used in manufacturing or produced as a by-product of industrial activities, national drinking water standards clearly do not exist for many contaminants. EPA has not adopted a drinking water standard for GenX or any other perfluorinated compounds. EPA has issued a health advisory for PFOA and PFOS (combined) of 70 parts per trillion based on longterm exposure, but a health advisory is not an enforceable drinking water standard. EPA has also said that the PFOA/PFOS health advisory does not apply to other perflourinated compounds like GenX.

EPA continues to study the need for a national drinking water standard for perflourinated compounds. Under the Safe Drinking Water Act, EPA’s decision will be based on: likelihood the contaminants will be found in drinking water; the health effects; and the technical/economic feasibility of treating the water to reduce any health risk. It isn’t clear whether EPA will propose a drinking water standard for PFOA/PFOS and the decision to develop a standard for next generation alternatives like GenX would be even further in the future.

Regulatory Gaps — EPA has not adopted a national drinking water standard for every contaminant that may be detected in a water source or in a public water system; some existing drinking water standards do not reflect the most recent science. In the absence of a drinking water standard, an EPA health advisory can provide guidance to the states on safe levels but health advisories do not exist for all contaminants. Many of the environmental and human health risks associated with PFOA and PFOS have been known for 10-15 years, but EPA has not yet proposed a drinking water standard and only issued a health advisory based on long-term exposure in 2016. In the absence of a national drinking water standard or health advisory, presence of significant levels of a contaminant in water supplies may require the state to develop a benchmark for safe drinking water.

Clean Water Act. The Clean Water Act protects surface waters like lakes and rivers by requiring a permit to discharge waste to those waters. National Pollutant Discharge Elimination System (NPDES) permits allow wastewater treatment plants and industries to discharge wastewater meeting specific pollutant limits. Like other states, North Carolina has assumed responsibility for issuance of NPDES permits in the state.

EPA has set technology-based wastewater limits for individual categories of industries, including chemical plants. But those limits do not cover all pollutants or every possible waste stream. In the absence of an existing EPA limit or when faced with a new type of waste stream, the state permit writer must set a limit on a case-by-case basis based on factors set out in the Clean Water Act. That puts responsibility on the state water quality agency to determine the appropriate limits for these unregulated pollutants.

Regulatory Gaps — Existing state and federal water quality standards and guidelines for permitting wastewater discharges do not address every potential pollutant. In the absence of federal effluent guidelines for a particular pollutant, the burden will be on the state water quality permitting agency to look at any existing information on the environmental and health effects to set a permit limit.

The challenge for the state. These federal laws create frameworks for approval of the manufacture and use of chemicals; release of chemicals to the environment in wastewater; and protection of drinking water sources. But the EPA standards adopted under those laws are not comprehensive and often lag behind the emergence of new contaminants or evolving science on risk. When an unregulated contaminant affects a drinking water source, the responsibility for dealing with the immediate environmental and public health concerns falls on the state.

2017 NC Legislative Session in Review: The Budget

July 16, 2017. A few notes on the final state budget which became law following legislative override of the Governor’s veto.

Funding for Environmental Protection Programs. The final budget continues a 7-year trend of annual reductions in environmental protection programs. (See an earlier post describing the impact of those earlier reductions.) The most significant new cuts to programs in the Department of Environmental Quality (DEQ) affect:

Energy Programs. The budget takes almost $1 million from energy programs. The budget reduces pass-through funding for university-based energy centers from around $1 million to a total of $400,000 divided equally between centers at Appalachian State University and North Carolina A& T University. North Carolina State University’s Clean Energy Technology Center will receive no funding. The budget also eliminates 3 of 5 positions in DEQ’s Energy Office.

Regional Offices/Division of Environmental Assistance and Customer Service. DEQ’s seven regional offices house frontline permitting, compliance and technical assistance staff for multiple environmental programs including water quality, water resources, air quality and waste management. Since 2011, the legislature has made the regional offices a particular target for reductions in positions and funding. The 2017 budget reduces appropriations supporting DEQ’s Division of Environmental Assistance and Customer Service by $500,000 and requires DEQ to meet the cut in part by eliminating one position in each of the seven regional offices. The Division of Environmental Assistance and Customer Service is a non-regulatory program that provides technical assistance to businesses on water conservation, energy efficiency, waste reduction and other measures to improve environmental compliance.

Conservation Funding. Most funding for conservation programs, such as the Clean Water Management Trust Fund and the Parks and Recreation Trust Fund now go through the Department of Natural and Cultural Resources budget. The Department of Agriculture and Consumer Services also manages some conservation funds through the Farmland Preservation Trust, which purchases conservation easements on agricultural lands. Conservation funding in both departments generally remained stable. The legislature increased funding for the Clean Water Management Trust Fund and the Parks and Recreation Trust Fund, earmarking a combined $1 million of the increase for an acquisition project on Archer’s Creek (Bogue Banks). The budget also allocates an additional $2.6 million to the Wildlife Resources Commission for acquisition of gamelands and an additional $2 million to the Farmland Preservation Trust Fund.

Surprisingly, the budget did not include state funds to match a federal Department of Defense (DOD) challenge grant of $9.2 million to acquire conservation lands to provide buffers around military installations. DOD announced award of a Readiness and Environmental Protection Integration (“REPI”) grant to North Carolina earlier this year for acquisition of buffers around the Dare County Bombing Range and endangered species habitat near Camp Lejeune. The federal award anticipated a state contribution of an additional $10.1 to be put toward the projects. The final state budget failed to earmark any funding for the state match. The Clean Water Management Trust Fund and other state conservation agencies could provide some of the state match, but in the absence of a legislative earmark the REPI projects would be competing with other applications for those grant funds.

Special provisions. As usual, the budget bill (Senate Bill 257 ) includes a number of “special provisions” that change existing law. Those include:

Air quality. The budget allows DEQ to use fees from automobile emissions inspections to support any part of the air quality program. Previously, inspection fee revenue could only be used to implement the automobile inspection and maintenance program. In the past, the legislature has tilted toward keeping inspection and maintenance fees as low as possible while still providing adequate reimbursement to inspection stations. The 2017 provision divorces the fees from the needs of the vehicle inspection and maintenance program for the first time.

The budget also requires legislative approval of DEQ’s plan to use approximately $90 million the state will receive from the Environmental Protection Agency’s national settlement of an air quality enforcement case against Volkswagen. (The case concerned VW’s installation of software to defeat vehicle emissions control systems.) Funds from the settlement will be divided among the states and must be spent for purposes specifically allowed under the EPA settlement agreement. The agreement gives states a number of options and the legislature clearly wants to influence DEQ’s decision about use of the funds.

Solid Waste. The budget shifts $1 million from a fund for assessment/cleanup of contamination caused by old, unlined landfills to the City of Havelock to be used for “repurposing” property previously owned by a recycling company. (See Sec. 13.3) Phoenix Recycling operated on property just beyond the city limits, but closed in 2000 as a result of environmental violations. In 2012, the City of Havelock received a state grant to assess environmental contamination on the property. In 2015, Havelock’s city manager advised the town council that if the city acquired the property, it could be eligible for up to $550,000 in federal “Brownfield” grant funds under an EPA program to support cleanup and redevelopment of contaminated sites. In 2016, the city acquired the property and annexed it into the city. It isn’t clear whether the city ever applied for the federal Brownfields grant. The 2017 budget provision would instead provide state funding for redevelopment of the property. A Progressive Pulse blogpost provides a good overview of how the earmarking of these funds for the Phoenix Recycling property will reduce funds available to cleanup other, higher priority contaminated sites.

Another provision (Sec. 13.4) allows the owner of an old, unlined landfill site to exclude the property from a state program to cleanup contamination from “pre-1983” landfills. (Modern standards for solid waste landfills went into effect in 1983). Under the provision, the owner can remove property from the state cleanup program by accepting liability for any contamination and providing financial assurance to address contamination. Financial assurance would not be required if the landfill had received solid waste from a local government (which was often the case). This is a very odd provision in several ways:

♦ Under current law, DEQ has responsibility for assessment and cleanup of pre-1983 landfill sites; revenue from a statewide solid waste disposal tax pays for the remediation. Under the new provision, a property owner would waive state responsibility for cleanup and potentially accept environmental liability they might not otherwise have.

♦ The provision has not been restricted to sites that present a low environmental risk; the only limitations seem to be the property owner’s willingness to take on the liability and ability to provide financial assurance if required.

♦ The provision describes the opt-out as a “suspension” of the state cleanup program for as long as the person owns the property. That clearly means the state itself would not undertake any assessment or cleanup activity on the site, but the law does not suspend enforcement of state groundwater standards and other environmental remediation requirements. Those programs normally seek remediation by the person(s) responsible for the contamination; under the new provision, the property owner must volunteer for the liability whether they contributed to the contamination or not.

♦ The implication of a “suspension” is that the state may again have responsibility for the site if it changes ownership in the future. Suspending environmental remediation until a change of ownership could simply delay necessary cleanup activities without regard to environmental risk.

It isn’t clear why a property owner would ever choose to do this.

The budget bill also requires a study of DEQ’s use of revenue from the solid waste disposal tax. The opt-out in Section 13.4 may be a hint of additional changes to the solid waste disposal tax and the state cleanup program for pre-1983 landfills.

Water Quality: Nutrient Pollution. The (now annual) budget provision concerning nutrient management strategies directs DEQ to use $1.3 million to test use of algaecides and phosphorus-locking technologies as an alternative to state rules imposing tighter wastewater limits and stormwater controls to address excess nutrients in Falls Lake and Jordan Lake. Those rules have been temporarily suspended by the legislature. (For background on the nutrient rules, see a previous post; the proposal for an automatic sunset of the nutrient rules described in the earlier blogpost was ultimately replaced by legislation further delaying implementation of the rules and a university-based study.) Based on discussion in committee, legislators had a specific technology developed by a North Carolina-based company in mind.

The Federal Budget and North Carolina’s Environment

March 24, 2017. Last week, the Trump administration released the Trump Budget Blueprint which describes in very general terms the President’s budget proposals for federal agencies. The Blueprint just opens the debate on the 2018 federal budget. Congress will significantly influence the final budget and members from both parties have already expressed concern about some of Trump’s proposed budget cuts. Percentage-wise, the deepest cuts in the Trump Budget Blueprint affect the Environmental Protection Agency. As background for the coming federal budget debate, this blogpost looks at the potential impact of the Trump budget plan on key state environmental protection programs.

Based on preliminary reports, the North Carolina Chapter of the Sierra Club provided a guide to the potential impact of the Trump budget the day before actual release of the Budget Blueprint. (Full disclosure — I assisted in preparation of the Sierra Club report.) For each major state environmental protection program, the report shows the percentage of the program budget currently funded by federal grants and the impact of cuts identified in the Trump budget plan. The report also provides information on other DEQ activities supported by federal grants that may be eliminated under the Trump administration’s budget plan.

I want to focus on information in the Sierra Club report about impacts to Clean Air Act, Clean Water Act and Safe Drinking Water Act programs in North Carolina. EPA has delegated federal permitting and enforcement authority under those laws to the state’s Department of Environmental Quality (DEQ). EPA provides oversight to ensure the state programs meet federal requirements, but DEQ has responsibility for day to day implementation. DEQ issues Clean Water Act permits for wastewater discharges; Clean Air Act permits for air emissions and air pollution control equipment; and Safe Drinking Water Act permits for public water systems. DEQ also enforces water quality, air quality and drinking water standards. In return for the state taking on those federal permitting and enforcement responsibilities, EPA provides program implementation or “categorical” grants to partially offset the cost.

The Trump Budget Blueprint does not provide detail on many cuts, but specifically proposes a 45% reduction in the EPA categorical grants that support basic state Clean Water Act, Clean Air Act and Safe Drinking Water Act programs. The tables below put the proposed cut in the context of each delegated program’s budget. Some notes on the numbers:

♦ “Total Need” means the complete budget (from all funding sources) for the delegated Clean Air Act, Clean Water Act and Safe Drinking Water Act program.

♦ Both the “total need” and federal funding numbers come from the certified state budget for the 2016-2017 fiscal year.

♦ These numbers only cover the EPA categorical grants for the delegated federal permitting/enforcement programs. The numbers do not reflect separate federal grants for targeted research or pollution reduction projects like the Albemarle-Pamlico National Estuary Program. Some of those federal grants reportedly have been targeted for elimination in Trump administration budget plans.

♦ The proposed federal funding cuts shown below are higher than those show for these same programs in the Sierra Club report because the final Trump Blueprint increased the percentage reduction over those reported earlier.

N.C. Clean Air Act Implementation

Total Need	Federal Grant	% Federally Funded	Proposed Federal Funding Cut
$4,854,105	$2,482,845	50%	– 45%

Clean Water Act Program Implementation

Total Need	Federal Grant	% Federally Funded	Proposed Federal Funding Cut
$14,160,554	$6,662,950	50%	-45%

Safe Drinking Water Act Program Implementation

Total Need	Federal Grant	% Federally Funded	Proposed Federal Funding Cut
$5,870,612	$3,316,895	50%	– 45%

In sum: EPA grants provide 50% of the funding for each of the major environmental permitting and enforcement programs delegated to the state under federal law. A 45% reduction in the federal grant would result in a cut of nearly 25% to each of those state programs. As discussed in an earlier post, many N.C. environmental protection programs have already experienced significant reductions in state funding since 2009-2010. The water quality program has been particularly hard hit.

Deep cuts to the federal grants would force the state to decide whether to make up the loss of federal funds with increased state appropriations from tax revenue or higher permit fees. The alternative would be to accept further erosion of those programs. The question may be particularly acute for the air quality program which is now entirely supported by the federal grant and permit fees.

You can find the entire Sierra Club report here .

NOTE: The original blog post has been revised to more accurately describe the release date for the Sierra Club guide and to note that information on percentage reductions to these particular programs changed (for the worse) after release of the Sierra Club report.

Changing Cleanup Standards for Leaking USTs

Oct. 26, 2016. In June, the Department of Environmental Quality (DEQ) released new guidance on remediation of groundwater contamination caused by leaking petroleum underground storage tanks (USTs). The guidance document significantly changes the approach to remediation of high risk UST sites. Under rules adopted by the Environmental Management Commission (EMC), groundwater contamination at high risk UST sites must be remediated to meet state groundwater quality standards if that is feasible. 15A NCAC 2L.0407(b).

The new guidance directs environmental consultants to assume the cleanup standard for most high risk sites will be “Gross Contaminant Levels”, which represent contamination at levels as much as 1000 X the groundwater protection or drinking water standards. The guidance raises a number of questions about the impact of more limited cleanup on groundwater and property owners; consistency with EMC rules; and whether the new guidance should have gone through rulemaking to allow for public comment and adoption by the EMC.

UST Rules. The UST program operates under “risk-based” remediation rules that allow less groundwater remediation on sites posing a low risk to public health, safety and the environment and require more extensive remediation on high risk sites. Existing UST rules require petroleum-contaminated sites to be classified as high, intermediate or low risk based on site conditions and assign a cleanup standard to each risk classification. High risk sites must be remediated to meet the state’s groundwater protection standards to the extent feasible. The groundwater standards set limits for individual contaminants at the level safe for unrestricted use of the groundwater — including use as a drinking water supply. Intermediate risk UST sites only have to be remediated to “Gross Contaminant Levels”, which allow contamination at levels as much as 1000 X the groundwater protection standard or drinking water standard to remain at the end of remediation. Low risk sites may not require any remediation even though contaminant levels greatly exceed groundwater protection standards.

Under existing rules adopted by the Environmental Management Commission, UST risk classifications are based on a snapshot of conditions around the petroleum release and the likelihood that petroleum contamination will reach water supply wells or create some other imminent health, safety or environmental hazard. Under EMC rules (15A NCAC .0406), a UST site is considered “high risk” if:

(a) a water supply well… has been contaminated by the release or discharge;

(b) a drinking water well is located within 1000 feet of the contamination source;

(c) a water supply well not used for drinking water is located within 250 feet of the source;

(d) the groundwater within 500 feet of the contamination source could be a future water supply source because there is no other source of water supply;

(e) the vapors from the discharge or release pose a serious threat of explosion due to accumulation of the vapors in a confined space; or

(f) the discharge or release poses an imminent danger to public health, public safety, or the environment.

New DEQ guidance on high risk sites.
North Carolina Petroleum UST Rel ease Corrective Action Phase Project Management: A Calibrated Risk-Based Corrective Action Decision & Implementation Guide, effective June 1, 2016, moves away from the principle of remediating groundwater at high risk UST sites to meet state groundwater protection standards. Instead, the guidance assumes most sites classified as “high risk” can be remediated only to Gross Contaminant Levels (GCLs).

The guidance document cites data indicating that groundwater contamination plumes contract over time, reducing risk to nearby wells that have not already been contaminated. Based on state laws directing DEQ to consider factors that limit risk to nearby wells, DEQ has directed remediation companies to assume older high risk UST sites can be remediated to Gross Contaminant Levels. Under the new guidance, the key factor will be the stability of the contaminant plume. If the plume has stabilized or become sufficiently predictable for DEQ to conclude the contamination does not represent an expanding threat, the cleanup will largely rely on “monitored natural attenuation” of the contamination (natural reduction in contaminant concentrations over time) and the cleanup standard will be based on the GCLs.

A few observations about the new guidance:

♦ The guidance document acknowledges the new remediation guidelines have been driven by a lack of sufficient state funds to fully remediate even high risk UST sites.

♦ The idea of reviewing high risk classifications based on the age of the site and stability of the plume makes sense, but the new guidance appears to focus on just one risk factor — proximity of the UST’s petroleum release to existing water supply wells. The guidance shifts to much more limited cleanup as long as the plume has stabilized and/or alternative water supply is available to well owners affected by petroleum contamination.

The guidance does not appear to consider another factor listed in the Environmental Management Commission’s risk classification rule — whether groundwater within 500 feet of the UST release may be needed as a future water supply. In areas where groundwater represents the only local water supply source, the EMC risk classification rule intended to protect the groundwater as a potential water supply even in the absence of existing water supply wells. The new guidance document seems to focus solely on the potential impact to existing wells.

♦ Reliance on GCLs as the final cleanup standard means higher levels of petroleum contamination remain in the groundwater at the completion of remediation. In the absence of extended monitoring, making GCLs the default remediation standard for plumes close to existing water supply wells or in areas where water supply wells may be installed in the future transfers risk from the UST owner to nearby property owners. UST risk classifications rely on a snapshot of conditions around the petroleum release. A change in conditions can lower risk (as the guidance document assumes), but conditions can also change in ways that increase risk. Installation of a new water supply well or changed use of an existing well can affect the behavior of the contaminant plume, exposing well users to petroleum contamination. Given that possibility, greater monitoring of high risk sites remediated only to gross contaminant levels may be needed.

♦ Since the guidance document changes implementation of the UST rules, it likely would be considered a “rule” under the state’s Administrative Procedure Act. In addition to creating a presumption that gross contaminant levels will be the cleanup standard for all UST sites — a departure from the existing EMC rule — the guidance document establishes specific triggers for reexamination of an existing site classification. The new DEQ guidance may or may not be good policy, but any policy generally applicable to UST owners and operators would be considered a rule and the Environmental Management Commission has rule-making authority over the UST program. Failure to use the rule-making process also sidesteps any opportunity for comment by UST owners/operators, remediation companies, adjacent property owners or other members of the public on the potential impact of the changes.

♦ The change in UST remediation standards is only the latest step back from protection of groundwater as a water supply resource important to the state’s future. A significant number of North Carolinians rely on groundwater for water supply either; around 50% of the population drinks water from private water supply wells or well-based water systems. Farms often rely on water supply wells for irrigation and water supply for animals. In recent years, the direction of state policy has moved consistently toward less remediation of groundwater contamination because of the cost to the state or the cost to the polluter. The question is whether those cost/benefit calculations given enough consideration to the long-term costs of groundwater contamination.

SmithEnvironment Blog

Environmental Law and Policy from a North Carolina Point of View

Category Archives: Water

GenX in the State Budget

GenX Legislation and Unintended Consequences

Making Polluters Pay

New Legislative Activity on GenX

GenX: The State Enforcement Case

The Legislative Response to GenX

The Laws in the Background of the GenX Issue

2017 NC Legislative Session in Review: The Budget

The Federal Budget and North Carolina’s Environment

Changing Cleanup Standards for Leaking USTs

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