Tag Archives: Water Quality

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:

  1. 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.
  2. 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.
  3. 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).
  4. 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.

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. 

The State of the Environment Department: By the Numbers

January 12, 2017. Governor Roy Cooper inherits an environment department that looks very different than it did four years ago. The new Department of Environmental Quality (DEQ) is much smaller in size and scope than the old Department of Environment and Natural Resources (DENR).  Since 2011, legislators have moved conservation and research programs out of the department.  DEQ’s environmental protection programs  lost non-regulatory conservation and research partners like Soil and Water Conservation, Forestry, Parks and Recreation and the Museum of Natural Sciences.

The environmental programs remaining in DEQ also lost a significant number of positions.  The incoming administration will face some immediate challenges in providing timely permit reviews, inspections and compliance assistance with staffing at levels inadequate to respond to an upturn in economic activity.

About the numbers. The numbers below come from information provided by DEQ during the transition between the McCrory and Cooper administrations; reports submitted to the legislature by DENR/DEQ; and legislative budget documents.

Environmental programs experienced some position reductions in  2009-2010 due to recession-driven budget cuts; those cuts tended to focus on vacant positions. Since 2011, the nature of the position cuts have changed.  Instead of setting a budget reduction target and giving the department flexibility to meet it,  the legislature increasingly identified specific positions for elimination or focused cuts on particular programs in the department. Many of the targeted reductions affected water quality programs (including stormwater and sedimentation control) and multi-agency staffing in the department’s seven regional offices.

DEQ by the numbers:

18%   Percentage reduction in water quality and water resources staff.

41% Percentage reduction in water quality/water resources staff in DEQ regional offices. The seven regional offices house staff from multiple DEQ programs. Staff based in the regional offices do initial site visits for permit applications; provide technical assistance; and inspect permitted facilities for their respective programs.  A 2011 budget provision specifically targeted the regional offices for position cuts: 3 administrative positions; 6 positions in the Asheville Regional Office; and another 21 positions among the seven regional offices to be either eliminated or shifted from state funds to another funding source. The cuts in regional office staff came on top of program-specific position cuts, further reducing program staff and limiting the number of staff geographically accessible to the public.

45%   Percentage reduction in state sedimentation program staff since 2008; staffing levels fell from 65 in 2008-2009 to 36.9 in 2015-2016. The sedimentation program implements the state law requiring erosion control measures on active construction sites to prevent sediment from reaching rivers, lakes and streams.

12,000  The number of construction sites the state sedimentation program staff has  responsibility for monitoring.

Every 12-14 Months: Frequency of state inspection of  sedimentation sites based on current staffing levels.

2 Years. The average time required to issue  a Clean Water Act wastewater discharge permit. (The National Pollutant Discharge Elimination System or “NPDES” permits.)

42%  The percentage of industrial discharge NPDES permits that have expired and not yet been renewed with updated permit conditions.

34%  The percentage of major municipal NPDES permits that are expired and need renewal.

20% Reduction in Division of Coastal Management staff since 2010. DCM  issues permits for major development projects affecting coastal resources; supports public beach access projects;  and manages the state’s coastal reserve sites for research and education activities.

40% Reduction in core Division of Marine Fisheries staff since 2011. (The figure does not reflect the Shellfish Sanitation staff moved into DMF from the Division of Environmental Health in 2012.)

27.9 Administrative positions eliminated department-wide since 2015. (Budget, purchasing, IT, personnel, and public information staff.)

9%    Percentage of DEQ’s authorized positions that are currently vacant (161). By comparison, the much larger Department of Environment and Natural Resources had only 40 unfilled positions in the summer of 2012.

3  Programs or services entirely eliminated through budget cuts since  2009:  the Neuse River Rapid Response Team (provided response to fish kills and pollution incidents in the Neuse River); the Office of Environmental Education; and the Division of Water Quality’s well drilling team (drilled monitoring wells used to investigate groundwater quality/quantity).

Some of the consequences. Loss of staff has already lengthened some  permitting times and the department’s permitting programs are not in a good position to respond to increased development activity as the economy continues to improve. Staff reductions have also affected DEQ’s ability to provide compliance assistance and enforce environmental laws. The U.S. Environmental Protection Agency (EPA) has expressed concern about the failure of federally delegated programs in DEQ to follow the department’s enforcement policy.  EPA has also questioned the  adequacy of the state’s stormwater program.

Fact-Checking the History of Coal Ash Regulation in N.C.

July 27, 2016. Misunderstanding history makes it more likely  the same mistakes will be made again. In that spirit, a fact-check of recent DEQ statements1 about the history of coal ash regulation in North Carolina:

“In 2007, a previous administration changed landfill laws and specifically exempted coal-ash ponds from many environmental requirements.”

The statement seems to be referring to the Solid Waste Management Act of 2007 which amended landfill siting and construction standards.  Two provisions related to coal ash landfills, but nothing in the law directly addressed coal ash ponds. Coal ash was not the main focus of the 2007 law, which responded to several controversial applications to construct new landfills for household waste and construction debris. As a result, the law  focused on concerns specific to those  proposals — impacts on wildlife refuges and parks; the size and height of waste disposal areas; separation from groundwater; and guarantees the landfill owner could pay for  environmental remediation.

The first of two provisions in the 2007 law affecting coal ash allowed utilities to construct a lined coal ash landfill on top of an old coal ash disposal site under specific standards. The second provision exempted coal ash landfills on the site of a coal-fired power plant from some of the new landfill siting requirements.   Coal ash landfills located on power plant sites continued to be regulated as industrial landfills under standards that required liners;  groundwater monitoring; and setbacks from waters and wetlands. The Department of Environment of Environment and Natural Resources (“DENR”) did not request either coal ash provision.

“In 2009, the state exempted Duke Energy from having to show that its coal-ash ponds were structurally sound. If that information had been required, the corroded pipe under the Dan River coal ash pond might have been found and the spill avoided.”

In 2009, the General Assembly actually repealed a state Dam Safety Act exemption for coal ash impoundments. See Session Law 2009-390.   Before 2009,  coal ash ponds had been entirely exempt from the dam safety law.  Repeal of the exemption made coal ash impoundments subject to the dam safety law  for the first time — requiring compliance with dam safety standards; regular state inspections; and DENR review/approval of plans for expansion or repair.

DEQ’s statement may be focused on language in the 2009 legislation that allowed existing coal ash impoundments to “… be deemed to have received all of the necessary approvals  from [DENR]  and the Commission for Dam Safety for normal operation and maintenance”. In effect, the law allowed impoundments built before repeal of the exemption to continue to operate as if the state had permitted the original construction.  Those impoundments, however, would be inspected going forward and required to comply with dam safety orders to address structural deficiencies.  On balance, the 2009 legislation greatly increased rather than diminished state oversight of coal ash impoundments under the Dam Safety Act.

The Dam Safety Act amendments did not cause state and federal regulators to miss critical information about the Dan River stormwater pipe that later ruptured. Both the U.S. Environmental Protection Agency (EPA) and DENR dam safety staff became aware of the stormwater pipes at the Dan River impoundment in 2009-2010. Before inspecting N.C. impoundments as part of the federal response to the TVA coal ash disaster,  EPA asked electric utilities to provide information on  structural conditions at each impoundment site in the state. Maps of the Dan River site that Duke Energy provided to state and federal inspectors incorrectly identified the stormwater pipes as concrete rather than corrugated metal.   The error meant state and federal inspectors did not have complete and accurate information as background for the inspections,  but not because the 2009 law allowed electric utilities to shield information about the impoundments — it didn’t.

Note:  It later became clear that internal Duke Energy inspection reports had flagged the metal pipes at Dan River for attention as early as the 1980s. In accepting a plea deal to a large federal penalty for the Dan River spill,  Duke Energy acknowledged a pattern of neglect that included failure to take the advice of its own engineers in 2011 and 2012 to do camera inspections of the stormwater pipes.

“In 2010 federal regulators required leaks from all coal ash ponds to be evaluated. No action was taken in North Carolina for three years.” 

By 2010,  EPA  had taken several steps to get a better handle on coal ash impoundments. In 2009, EPA  launched the nationwide effort to assess the structural integrity of coal ash impoundments.   Based on information provided by the electric utilities, EPA did on-site inspections of  eight higher risk  N.C. impoundment sites in 2009-2010 including the Dan River facility.  Inspectors from the state’s water quality, waste management and dam safety programs accompanied EPA on most of those inspections.  Also in 2009-2010, state dam safety inspectors did an initial dam safety inspection of every coal ash impoundment as the first step in bringing those impoundments under the Dam Safety Act.

On a different track, EPA  provided new guidance to states on permitting  discharges  from coal ash impoundments under the Clean Water Act ; the new guidance recognized that  discharges could result from seeps and leaks through impoundment walls.  In 2010-2012, the state water quality program began increasing  groundwater monitoring requirements for coal ash ponds and  revising stormwater permits for impoundment sites. It may be that state programs gave higher priority to  structural impoundment problems, groundwater contamination and stormwater permitting in 2010-2012 and lower priority to  addressing the water quality impacts of leaks. It is difficult to know without more information.

“In 2011 the state gave Duke Energy approval to use Sutton lake, a recreational area in Wilmington, as a dumping ground for coal ash.” 

Sutton Lake has not been used for coal ash disposal. Coal ash from the Sutton Power Plant went into one of two coal ash impoundments;  outlets release water from the impoundments to Sutton Lake. Another outlet releases water from Sutton Lake to the Cape Fear River.  The earliest Clean Water Act permit for the Sutton Plant accessible on the DEQ  website (from 1996)  treated the outlet to the Cape Fear River as the permitted discharge point and applied effluent standards there. Although the permit also put water quality limits on discharges from the coal ash impoundments to Sutton Lake, the lake was regulated as a cooling pond — part of the wastewater treatment system — rather than as “waters of the State” protected under the Clean Water Act.  Every renewal of the 5-year Clean Water Act permit from 1996 through  2011 continued that approach. Apparently water quality staff revisited the question of whether Sutton Lake should be treated as a cooling pond or as “waters of the State”  in  2011, but decided to maintain the approach used in earlier permit renewals. In 2014, the department (now the Department of Environmental Quality) looked at the issue again and concluded — correctly, I think — that the permit should be modified to treat Sutton Lake as “waters of the State” and put effluent limits on discharges to the lake. It isn’t clear why the water quality program and the Environmental Management Commission reached a different conclusion in issuing and renewing earlier permits.

“For many years Duke Energy monitored the water under its ponds and found hundreds of samples that did not meet groundwater standards. Again, no action was taken. In fact, the prior administration created a policy instructing regulators not to fine Duke if the company said it would correct the problem.”

The state water quality program  first began requiring comprehensive groundwater monitoring for coal ash constituents in 2009-2010, imposing new groundwater monitoring conditions as Clean Water Act discharge permits for the impoundments came up for renewal.  The new conditions covered key contaminants associated with coal ash and required groundwater monitoring to be done under a state-approved plan to insure monitoring wells would be appropriately placed to detect violations.  Given the  time required to install monitoring wells and collect a full cycle of monitoring results, little data  showing a  groundwater standard violation related to coal ash would have been available before 2010.  None of the groundwater violations cited in DEQ’s  2014 enforcement action concerning the Sutton Power Plant predate 2009;  most come from the period between 2010 and 2014.

Before 2009-2010, most of the state’s coal ash impoundments operated without significant groundwater monitoring for decades.  Electric utilities built many of the impoundments in the 1960s and 1970s  before any environmental regulations applied.  In the late 1970s,  the state began issuing federal Clean Water Act permits for discharges from the impoundments to rivers, lakes and streams. Environmental regulation focused on the quality of water discharged from the upper layers of the ash ponds to surface waters rather than the coal ash itself.  In the 1980s-1990s, the state began putting  groundwater monitoring conditions on the discharge permits, but the monitoring focused on very basic parameters. For the Sutton Plant,  those parameters were:   water level,  pH, chlorides, iron, arsenic, selenium and total suspended solids. Groundwater concerns had not yet focused on contaminants specifically associated with coal ash.

Groundwater concerns increased after 2000 as EPA continued to lay the groundwork for a federal coal ash disposal rule. In 2006, electric utilities began voluntarily  monitoring for contaminants associated with coal ash in the face of pressure from environmental organizations and expected federal rulemaking.  Most of the data from the voluntary monitoring could not be used in state enforcement actions.  Under state groundwater rules, a violation exists only if the impoundment causes an exceedence of groundwater standards at or beyond a compliance boundary around the pond.  (For most N.C.  impoundments, the compliance boundary is set 500 feet from the edge of the pond.)  Wells used by the utilities for the voluntary groundwater monitoring had not been placed to document groundwater standard violations at the compliance boundary.  But based on the voluntary monitoring results,  the state water quality program  put broader groundwater monitoring conditions on impoundment permits and required monitoring to be done under a state-approved well-siting plan to insure the data could be used for future enforcement.

The enforcement policy mentioned in the DEQ statement refers to 2010 groundwater enforcement guidance developed by water quality staff.  Since the expanded groundwater monitoring requirements applied to facilities that had operated for many years without monitoring, the water quality program developed a policy that put the enforcement emphasis on remediation of contamination rather than assessment of penalties for activities that had been unregulated  or lightly regulated for much of the facility’s history.

What the fact-checked history suggests:

It is difficult to contain environmental impacts 20 to 40 years after the fact. Both state and federal regulators struggled to understand and address problems associated with a method of coal ash disposal electric utilities had already invested in and become reliant on by the time environmental impacts became a concern.

The basic arc of state and federal regulation looks like this: In the 1970s,  state and federal regulators focused on discharges from existing coal ash ponds to surface waters. There was a quiet period between issuance of the first Clean Water Act discharge permits for coal ash impoundments in the late 1970s through the 1990s.  Regulators assumed the electric utilities were maintaining the impoundments properly and indicators of  groundwater contamination associated with coal ash had not reached critical mass. EPA began working on a federal coal ash disposal rule in the late 1990s, but abandoned the proposed rule in 2000 in the face of strong political opposition. Between 2000 and 2008, troubling data on groundwater and surface water pollution associated with coal ash ponds accumulated and the 2008 TVA spill undermined confidence in the electric utilities’ maintenance of impoundments.  Both state and federal regulatory efforts accelerated in 2008-2009, leading to state permitting changes and renewed efforts to adopt a federal coal ash disposal rule. (EPA finalized the federal rule in 2015.)

The issues surrounding coal ash have not been the responsibility of any one administration or a single branch of government. The history spans multiple governors of both political parties and legislative as well as executive action.  Coal ash provisions in the 2007 Solid Waste Management Act came out of direct negotiation between the electric utilities and legislators.  In  2009, the General Assembly repealed the Dam Safety Act exemption for coal ash impoundments,  but did not move a bill to set comprehensive state standards for coal ash disposal out of committee.

Leaps in state law on coal ash  management followed specific crises — the coal ash impoundment exemption from the Dam Safety Act survived until the 2008 TVA spill put a spotlight on poor maintenance. In  2009, the  General Assembly had no interest in moving comprehensive coal ash disposal legislation; that only changed after the 2014 Dan River coal ash spill .

By 2009, accumulating evidence of groundwater contamination and other water quality concerns led the state water quality program to use existing permitting authority to require more groundwater monitoring around coal ash impoundments and increase stormwater requirements. Those  efforts to use existing permitting tools more effectively laid the foundation for later groundwater enforcement actions.

 

 1 The statements  in bold appeared in  a recent letter by DEQ Assistant Secretary Tom Reeder to the Raleigh News and Observer.

House-Senate Compromise on Watershed Rules

June 30, 2016. The House has begun debate on a  compromise version of the 2016-2017 budget bill (House Bill 1030) that resolves differences between House and Senate budget proposals. The new budget bill includes a modified version of a Senate provision on watershed-based water quality rules. See an earlier post  for more on the original Senate provision in Sec. 14.13 of the budget bill. The significant pieces of the compromise provision:

The scope  of the budget provision has been reduced. The new version of Sec. 14.13 only applies to nutrient rules adopted for the Falls Lake and Jordan Lake watersheds.

The provision no longer sunsets existing nutrient rules. The budget provision still funds a UNC study of nutrient rules (focused on the Falls Lake and Jordan Lake rules) and directs the Environmental Management Commission to review and readopt  those nutrient management rules based on recommendations from the study.  But the bill no longer automatically sunsets existing rules.

The UNC study of nutrient management strategies.  The budget provision now funds the study for six years at $500,000 per year ($3 million for the entire study) and has separate report-back dates for the two watersheds — December 31, 2018 for  Jordan Lake and December 21, 2021 for Falls Lake. In part, the provision requires UNC to compare water quality trends  in Falls Lake and Jordan Lake to implementation of the different parts of the nutrient strategies. Since a number of the nutrient rules have not yet gone into effect because of legislative delays, evaluating the effectiveness of the rules based on water quality trends will be difficult. That is particularly true for wastewater discharge limits and stormwater controls that have never been implemented or only partially implemented in the two watersheds.

Delayed implementation of the Jordan Lake and Falls Lake rules. The provision further delays implementation of the nutrient management rules until at least 2019 for the Jordan Lake watershed and 2022 for the Falls Lake watershed.

DEQ study of in-situ technologies to address nutrient-related water quality problems. The budget provision continues to require a DEQ study of in situ technologies to reduce nutrient problems — now focused on algaecides and phosphorus-locking technologies. The DEQ study will be entirely separate from the UNC study of nutrient management strategies and  receives a separate appropriation of  $1.3 million for a trial of in situ technologies.    The final report will be due on March 1, 2018.

Exclusion of areas within the Jordan Lake watershed from stormwater requirements. The compromise  budget includes a new  subsection 14.13(f)  that says new impervious surface added in the Jordan Lake watershed between July 31, 2013  and December 2020 (after study and readopting of the rules as required under the budget provision) should not be counted as built-upon area for purposes of developing nutrient reduction targets under the Jordan Lake stormwater rules.  It isn’t entirely clear what this means.

Under  federal Clean Water Act requirements, the state has an obligation to cap discharges of any pollutant causing impaired water quality. These caps (called a Total Maximum Daily Load  or “TMDL”) must be approved by the U.S. Environmental Protection Agency. The Jordan Lake rules cap nutrient loading at a level necessary to address impaired water quality in the Jordan Lake reservoir; meeting the TMDL  requires a reduction  in nutrient loading  from the   baseline years  of 1997-2001. The rules then allocate the reductions proportionately to the different arms of Jordan Lake and to major nutrient sources in those watersheds – wastewater dischargers, stormwater runoff from developed areas, and agricultural activities.

So  the new Sec. 14.13(f) raises several issues –

  1. The new subsection  is written as though local governments in the Jordan Lake watershed develop their own stormwater nutrient reduction targets and can change the reduction target by excluding newly developed areas.  In reality, the reduction targets have been based on  allocation of the  reductions required  to meet the Jordan Lake TMDL under  EMC rules and a watershed model developed by DEQ.
  2. It  assumes that the nutrient reduction target assigned to stormwater would change based on development over this 7-year time period, but the target is based on reduction from the historic baseline of 1997-2001. The one thing that changes by delaying implementation of the Jordan Lake stormwater rules is that more areas will fall under requirements for stormwater retrofits of existing development rather than stormwater rules for new development projects.
  3. If the intent is to exclude these recently developed areas from future implementation of  Jordan Lake stormwater rules for new or existing development, DEQ may have to allocate greater reductions to other nutrient sources in order to meet the Jordan Lake TMDL approved by EPA.

A new cross-reference to Chesapeake Bay stormwater measures. Another new subsection, Sec. 14.13(i),  requires the state to allow stormwater measures approved by the Chesapeake Bay Commission for use in meeting the Chesapeake Bay  TMDL to also be used to meet the Jordan Lake  and Falls Lake TMDLs  based on the same nutrient reduction credit allowed under the Chesapeake Bay program.  The Chesapeake Bay Program (rather than the Chesapeake Bay Commission) maintains the Chesapeake Bay TMDL model and seems to be the gatekeeper for pollution reduction credits included in the model. Credits for nutrient removal under the Chesapeake Bay model  will likely turn out to be a range based on the type of stormwater measure; the area; the volume of stormwater treated; etc. It isn’t immediately clear  what — if any — stormwater measures would be authorized under this provision that are not already allowed under state rules.

The Future of Watershed-Based Water Quality Rules

June 22, 2016. A controversial water quality provision in the N.C. Senate’s proposed budget would repeal (and perhaps replace –that is less certain) all state rules adopted over the last twenty years to address pollution problems caused by excess nutrients.  Sec. 14.13 in the Senate version of House Bill 1030 further delays full implementation of the Falls Lake and Jordan Lake rules; creates a  $2 million study of nutrient management programs; and repeals all existing water quality rules addressing nutrients pollution effective December 31, 2020.

The Senate Proposal.  The provision requires the state’s Environmental Management Commission (EMC) to adopt new nutrient management rules based on the study results, but repeals all  existing rules at the end of 2020  even if no alternative  rules are in place.  In addition to Jordan Lake  and Falls Lake, the repeal/replace provision would affect water quality rules in the Tar-Pamlico River Basin; the Neuse River Basin; the Catawba River Basin; the Randleman Reservoir watershed; and the endangered species management plan in the Yadkin-PeeDee River’s Goose Creek watershed. It would also apply to any other riparian buffer requirements identified by the Department of Environmental Quality (DEQ).   Still hoping for an alternative to  rules, the Senate budget also appropriates $500,000  to  study use of freshwater mussels to reduce the water quality impact of excess  nutrients.

In most cases, state nutrient management rules also satisfy a federal Clean Water Act requirement to reduce the discharge of a pollutant (in this case nitrogen and/or phosphorus) causing impaired water quality. In North Carolina’s  “nutrient sensitive” river basins and watersheds,  the U.S. Environmental Protection Agency (EPA)  has approved the nutrient reduction targets in state rules as meeting Clean Water Act  requirements.   To achieve the reduction targets, the rules require reductions in nutrient  discharges by wastewater treatment plants and nutrient runoff from agriculture and development activities. Walking away from the nutrient reduction targets has implications for Clean Water Act enforcement and the state’s delegated water quality permitting programs.

Although the Goose Creek rules rely on similar pollution reduction tools (including riparian buffers and stormwater controls),  those rules protect endangered species habitat.  The rules resulted from a lengthy negotiation with the  U.S. Fish and Wildlife Service which has responsibility for enforcing the federal Endangered Species Act. Repeal of the rules would likely bring both U.S. Fish and Wildlife  and EPA into the conversation.

Nothing similar to the Senate provision appears in the House version of the budget or in any other legislation pending in the House.  The two chambers are currently negotiating this (and other) differences between the House and Senate budget bills.

Have the Nutrient Rules Failed? The Senate provision describes the state’s existing nutrient management  programs as failures. In reality, legislation has prevented full implementation of the Falls Lake and Jordan Lake nutrient rules.  The rules that have been fully implemented  — such as those in the Neuse River and Tar River basins — significantly reduced nutrient loading from wastewater discharges, agriculture and stormwater runoff.  In judging the effectiveness of watershed-based strategies, some things to keep in mind: 1.  Population growth and development in the watersheds continued to increase; and 2. Existing nutrient reduction strategies do not address all potential nutrient sources (smaller wastewater treatment plants; failing septic tanks; atmospheric deposition of nitrogen; and soil erosion).

DEQ has tracked the effect of nutrient rules in the Neuse River and Tar-Pamlico River basins; some of the results can be found here.  A  number of independent academic researchers have also studied the Neuse and Tar-Pamlico  river basin rules.  All of the studies confirm that sources covered by the rules significantly reduced their nutrient discharges. Wastewater treatment plants met the goal of reducing nitrogen discharges by 30% from the baseline years even as population and wastewater flows increased. Agriculture met or exceeded the 30% reduction goal for agricultural operations through use of  Best Management Practices. A recent EMC report confirmed  the value of  riparian buffers as part of a watershed-based plan to reduce nutrient runoff from developed areas.

Complicating the picture is the fact that  total  in-stream nutrient concentrations  have not consistently remained below  baseline levels.  A DEQ  study completed in 2008 found that in-stream concentrations of inorganic forms of nitrogen  (nitrates and ammonia) declined at the monitoring sites, but  increases in organic nitrogen offset those reductions.   The rules haven’t  failed; given population growth and increased development in the Neuse and Tar-Pamlico river basins,   nitrogen concentrations would have been higher in the absence of the rules. But the rules have not fully solved the problem of nutrient over-enrichment.

Opposition to the Nutrient Rules.  Opposition has tended to be strongest in the communities on the Haw River arm of the Jordan Lake watershed affected by the Jordan Lake rules. (The Haw River watershed includes the cities of Greensboro and Burlington.) Since EMC adoption of the Jordan Lake rules in 2009,  legislation to repeal or delay implementation of the rules has been introduced every year.  Objections  have focused on the cost of wastewater treatment plant upgrades to meet tighter discharge limits;  expansion of  stormwater programs;  and the development impact of new riparian buffer requirements. To these upstream Haw River communities, the costs have no local benefit; water quality improvements benefit downstream communities. (Although many of the downstream communities have met similar requirements under the Neuse River rules for years to benefit the Neuse River estuary.)

The City of Durham and Durham County, affected by both the Falls Lake and the Jordan Lake rules, also have concerns about the feasibility and cost of meeting nutrient reduction goals.

Also in the background — riparian buffer requirements have long been unpopular with real estate developers and homebuilders in all of the river basins/watersheds where buffers have been part of a nutrient reduction strategy.

DEQ’s Position.   DEQ has not taken a public position on the Senate proposal, but a February presentation by DEQ Assistant Secretary Tom Reeder to the legislature’s Environmental Review Commission questioned the effectiveness of the watershed-based nutrient rules.  Reeder’s presentation tended to emphasize the cost of the nutrient rules and  limited impact on instream nitrogen and phosphorus concentrations.  Asked what alternative to the nutrient management rules would protect the Falls Lake and Jordan Lake drinking water supplies, Reeder responded that drinking water treatment may become more expensive. The presentation suggested little DEQ commitment to defend watershed-based nutrient rules and a willingness to shift the cost of impaired water quality to communities using  Falls Lake and Jordan Lake as drinking water sources. Reeder’s presentation did not  address the impacts of a failure to reduce excess nutrients  on natural resources such as fisheries; recreational use of these rivers, lakes and estuaries; or compliance with the Clean Water Act.

Possible compromises.  Past studies of the Neuse and Tar-Pamlico rules suggest a need to fill gaps in the nutrient strategies, but do not provide a  scientific case for  abandoning watershed-based nutrient reduction strategies. Nearly seven years after final adoption of the Jordan Lake rules, opponents have not identified an alternative approach to protect drinking water  and meet Clean Water Act requirements.

At the same time, the  EMC’s recent riparian buffer report  identified potential buffer rule changes to ease the burden on property owners while maintaining the buffer’s  water quality benefits.  The legislature could also look at the possibility of  authorizing cost-sharing arrangements to allocate some of the upstream cost of water quality improvements to  the  downstream communities that will benefit. The idea surfaced briefly during development of the Falls Lake and Jordan Lake rules, but wasn’t pursued at the time.

2015 in Review — Legislation

January 12, 2016. Some trends in environmental legislation:

Limiting Local Government Authority. After several years of legislation limiting the regulatory authority of state environmental agencies, the General Assembly turned to local government.

  Senate Bill 119  (Session Law 2015-264)  may have the practical effect of  eliminating local government  authority to regulate shale gas operations under  zoning, land use, stormwater, health,  and sedimentation control ordinances.  In 2014,  Session Law 2014-4  preempted local ordinances that  “would prohibit or have the effect of prohibiting oil and gas exploration, development, and production activities, or use of horizontal drilling or hydraulic fracturing for that purpose”.   But the 2014 law created a presumption that local zoning and land use ordinances applicable to other types of development  (such as zoning, setbacks, buffers  and stormwater standards) could also apply to shale gas operations.

Senate Bill 119  rewrites  the 2014 provision to completely  preempt  local ordinances.  The new Oil and Gas Commission (replacing the Mining and Energy Commission) now has power to preempt the application of  local development ordinances even if  the ordinance would not preclude shale gas development or conflict with state standards.  Although the presumption  in favor of zoning and land use ordinances still appears in the law, the 2015 amendments direct the Commission to preempt a local ordinance at the request of the shale gas developer if the  drilling operation has received  state/federal permits and the Commission finds that exploration and development

…will not pose an unreasonable health or environmental risk to the surrounding locality and that the operator has taken or consented to take reasonable measures to avoid or manage foreseeable risks and to comply to the maximum feasible extent with applicable local ordinances.

In effect,  the Oil and Gas  Commission can set aside any  local ordinance and substitute its judgment about risk for that of local elected officials. Preemption of local ordinances could have several implications —

1. Complete preemption of local ordinances may  leave gaps in basic regulation of shale gas activities  since state standards do not address a number of   issues normally dealt with by local government such as noise,  traffic, solid waste disposal (trash — not drilling waste), and open burning.

2.  The law potentially allows preemption of local  stormwater ordinances needed to  meet state water supply watershed protection standards; comply with federal stormwater permits; or  minimize flooding.    The Environmental Management Commission has adopted stormwater rules  for shale gas operations, but those  rules expressly recognize that additional stormwater standards may apply to a particular operation and reserve the right to apply those standards — whether implemented by DEQ or by a local government.  The new preemption language in Senate Bill 119 does not recognize the possibility that local stormwater ordinances may be required under state or federal law.

3.  The provision  raises a question about implementation of  sedimentation control requirements through local sedimentation programs. The state’s Sedimentation Pollution Control Act allows cities and counties to take over implementation of the sedimentation program. In areas with local programs, sedimentation control requirements are set and enforced through local ordinances.  Nothing in Senate Bill 119 prevents the Oil and Gas Commission from preempting a local sedimentation ordinance.

♦  House Bill 44  included two provisions limiting local government authority to adopt or enforce other types of development ordinances —

Section 2 bars  local governments from enforcing a “voluntary” state environmental rule,  but defines “voluntary” rule in a creative way to include any state rule  that has  been repealed;  has been adopted, but is not yet in effect; or has been “temporarily or permanently held in abeyance”.  The last category would cover the  Jordan Lake water quality rules that have been delayed by legislative action.  Preventing  local enforcement  of existing Jordan Lake stormwater ordinances  may have been the main purpose of the provision, but it could also raise questions about the enforceability of other local ordinances. No one has  attempted to catalog all of the local ordinances that include requirements that once appeared in a now-repealed state rule or are proposed to be included in a new state rule that has not yet been adopted.   The House Bill 44 provision seems to assume that local environmental ordinances always follow  state regulatory action; it  ignores direct grants (by the General Assembly) of local government authority to  adopt ordinances to protect  public health and the environment.  For more on the implications of this provision,  see an earlier post.

Section 13  limits local government authority to adopt riparian buffer requirements.  The bill defines “riparian buffer”  to mean any setback from surface waters —  which could include a setback imposed for flood control.  (The definition seems broader than other  language in the provision  specifically referring  to  riparian buffers for water quality protection.) Under the bill, a local government cannot adopt and enforce a riparian buffer ordinance for water quality protection  that  goes beyond requirements of state or federal law or the conditions of a state or federal permit unless the EMC  approves the ordinance.

Shielding Evidence of Possible Environmental Violations

♦  House Bill 765  (the Regulatory Reform Act of 2015)  creates a new legal  privilege for information contained in an environmental audit report. (Companies use environmental audits  to identify  compliance problems;  opportunities for waste reduction;  and operational changes to reduce environmental impacts.)   Information covered by the privilege does not have to be shared with regulators and cannot be used by  regulatory agencies to document an environmental violation in  a civil enforcement case.   The privilege does not apply in a criminal  case, but the vast majority of environmental enforcement actions rely on civil rather than criminal penalties. See the section on environmental audit privilege/self-disclosure immunity in this earlier post for more on the scope of the privilege.

♦   House Bill 405    allows an employer to take legal action against an employee who 1. enters a “nonpublic” area of the workplace;  2.  takes photographs, makes recordings, or copies records without permission; and 3.  uses those documents “against the interest of the employer”.   The employer can sue the employee  for  monetary damages,  including legal fees and a $5,000 per day penalty.   Animal rights activists referred to House Bill 405  as the “Ag-Gag” bill — a term used for legislation targeting activists who go undercover on farms and in  processing facilities to document animal cruelty violations. But House Bill 405 is not limited to agricultural workers or documentation of animal cruelty. The bill could also be used to punish an employee who documents  illegal dumping of hazardous  waste and shares the evidence with regulators or the media.  See an earlier post for more on House Bill 405.

Lessening the Consequences for Some Environmental Violations.

♦  House Bill 765 grants immunity from civil penalties and fines for environmental violations that are voluntarily disclosed to state regulators.  The bill defines “voluntary” disclosure;  immunity would not apply to violations  documented  through information the company has a legal duty to report under state or federal law, for example. The bill limits how often a person (or company) can claim self-disclosure immunity — no more than once every two years; twice in a five-year period; and three times in a ten-year period.  The bill never defines “civil penalties and fines”, leaving a question about the breadth of the immunity.  For example, the bill is silent on whether “civil penalties and fines” includes natural resource damages such as  fish kill damages assessed for a wastewater spill. For a more detailed comparison to past state and present U.S. Environmental Protection Agency enforcement policies on self-disclosed violations, see an earlier post.

♦  A provision in the budget bill (S.L. 2015-241) limits the total civil penalty for ongoing  violations of the Sedimentation Pollution Control Act to $25,000 if: 1. the violator had not previously been assessed a penalty for a sedimentation violation (which does not necessarily mean the person has not previously violated the law); and 2. the violator addresses damage caused by the violations within 180 days.  Previously, the law allowed the Department of Environmental Quality to assess a maximum penalty of $5,000 per violation, per day for continuing sedimentation violations. The fact that the meter on civil penalties could run until the violator addressed the problem created a powerful incentive for quick response — even though DEQ rarely assesses the maximum penalty. Quick action to correct a violation  translates to  less stream damage from uncontrolled erosion and sedimentation.  The recent amendments have the somewhat perverse effect of assuring the violator that  sedimentation violations can go uncorrected for nearly six months without resulting in an increased penalty.  The provision also means that committing numerous sedimentation violations on the development site will result in the same penalty as a single violation.  The new cap on continuing violation penalties also applies to penalties assessed by local sedimentation programs.

♦ House Bill 765  amends existing state laws to allow broader use of “risk-based”  cleanup  of environmental contamination. In a risk-based cleanup, the person responsible for environmental  contamination is not required to fully restore contaminated soil and groundwater. A risk-based  cleanup plan relies on a combination of limited remediation and land-use controls (such as deed restrictions) that prevent exposure to contamination  remaining on the site after the partial cleanup.  Groundwater cleanup costs represent a significant consequence of violating environmental laws — often exceeding penalties assessed by regulators — so  allowing a  more limited cleanup reduces the cost of violating the law.  (It also means the groundwater may remain contaminated and unusable for a very long time.)

House Bill 765 extends the benefits of lower cost, risk-based cleanup to several categories of  contaminated sites that had been  excluded  under  the state’s  2011  law  allowing risk-based remediation of  industrial contamination. Two of those categories broaden the use of risk-based remediation in ways that may undermine incentives for present environmental compliance:

—  New contamination incidents.  House Bill 765 repeals statute language  limiting use of risk-based remediation to contamination  reported  before the 2011 risk-based remediation law went into effect.  In 2011, allowing risk-based cleanup of industrial sites was seen as an incentive for remediation of properties with longstanding contamination  —  often resulting from activities that had been lawful at the time. Remediation costs remained  a significant incentive for present-day compliance with environmental standards. Removing the date restriction means that a  risk-based cleanup will now be an option for new contamination incidents resulting from activities violating current environmental laws.

—  Sites contaminated by petroleum releases from above-ground  storage tanks (ASTs).  There has long been a risk-based cleanup program for petroleum underground storage tanks (USTs),  but UST operators also have to meet extensive regulatory standards to  prevent future pollution incidents.  House Bill 765 gives AST owners  the benefit of risk-based cleanup without regulatory standards to prevent future releases.

Eliminating or Streamlining State Permit Requirements for Environmental Infrastructure

♦ The state budget (S.L. 2015-241)  includes a provision that changes landfill permitting, allowing issuance of a single “life of site” permit to cover construction and operation of a landfill that  often has a 30-year lifespan.  State rules had previously  required review and approval of the entire landfill site before construction, but also required each 5 or 10-year phase of the landfill to have a construction and operation permit.   Landfill construction will continue to be done in phases for economic and practical reasons,  but the “life of site permit” eliminates state compliance review for each new  phase of the landfill.   The change also seems to close the door on  new permit conditions for construction or operation of later landfill phases in response to scientific or  technological developments. The budget provision does not set minimum landfill inspection requirements in place of the 5 and 10-year phased permit reviews.

♦ House Bill 765 creates a new private permitting option for septic systems and other small on-site wastewater systems now permitted by local health departments. The provision  allows  a property owner to hire an engineer and soil scientist to approve the location and design of the system. The local health department will receive information about the system, but the engineer’s approval substitutes for a permit. It isn’t clear that  the laws allows the health department to prevent construction of an engineer-certified system based on inconsistency with state siting and design standards.

Skepticism about State Water Quality Rules. The 2015 General Assembly continued to focus on water quality rules and particularly those affecting real estate development activities — such as stormwater standards, wetland and stream mitigation requirements, and riparian buffer protection rules.

The state budget includes a special provision further delaying implementation of the Jordan Lake water quality rules for  another 3 years or one year beyond completion of the Solar Bee pilot project (whichever is later). See an earlier post  here on the  2013 legislation creating the pilot project. The rules had been developed by the state’s Environmental Management Commission to address poor water quality  caused by  excess nutrients reaching the lake in wastewater discharges and  runoff from agricultural lands and developed areas.  Since adoption of the rules, the legislature has taken repeated steps over several legislative sessions to delay compliance deadlines in the rules. This session,  the  legislature also barred local government enforcement of stormwater ordinances adopted to comply with the Jordan Lake rules.

♦ House Bill 765  limits  regulatory authority and mitigation requirements for isolated wetlands and intermittent streams. (Isolated wetlands are wetlands that fall outside federal permitting jurisdiction under the Clean Water Act because the wetlands lack a connection to “navigable waters”.)  These provisions continue a several-year legislative trend toward limiting  protections for wetlands and waters to the minimum required under federal law.

♦ Some proposals to significantly roll back other water quality rules (particularly stormwater and  riparian buffer rules) failed this session, but became the subject of legislatively mandated studies. Among the studies required before the April 2016 legislative session: a study of coastal stormwater rules; a study on the feasibility of entirely exempting linear utility projects (such as pipelines) from  environmental standards;  and an Environmental Review Commission study of the  state stormwater program.

Expanding Use of Erosion Control Structures on Ocean and Inlet Shorelines

♦ A   provision in the budget bill  (S.L. 2015-241)  changes state rules on use of sandbag  structures on the oceanfront.  Rules adopted by the N.C. Coastal Resources Commission have limited use of protective sandbag structures to situations where a building faces an imminent erosion threat. (These sandbag  structures are substantial in size and can have many of the same long-term impacts as permanent seawalls; the rules do not apply to sandbags used to prevent water from entering a building during a flood event.)   The budget bill changes the standards to allow an oceanfront property owner to install a sandbag  structure to align with an existing sandbag structure on adjacent property without showing an imminent erosion threat to a building on their own property.

♦ The budget bill also increases the number of terminal groin structures that can be permitted at the state’s ocean inlets from four to six and identifies New River Inlet for location of two of the additional structures. See an earlier post  for more on earlier legislation allowing construction of terminal groins as a  pilot project. The latest provision continues a several-year trend of reducing regulatory requirements for approval of terminal groin projects and increasing the number of projects that can be permitted.

N.C. Environmental Legislation 2015: The Budget

October 9, 2015. Now that the General Assembly has adjourned, a look at legislative actions affecting the environment. First, the state budget for 2015-2017.

Among the most significant impacts:

♦  REORGANIZATION.   The Clean Water Management Trust Fund and the Natural Heritage Program — originally intended to protect and restore water quality and identify important natural areas — have been separated from the environmental protection programs in the Department of Environment and Natural Resources (DENR). The budget transfers the CWMTF, Natural Heritage Program, Museum of Natural Sciences, state park system, N.C. Aquariums and N.C. Zoo from DENR to a newly organized Department of Natural and Cultural Resources. The move combines conservation  and ecological education programs with state historic sites and cultural resources. The new department appears to be organized around management of the programs as public attractions rather than as research and education partners to state environmental protection programs.  As a result of the reorganization, DENR becomes the Department of Environmental Quality (DEQ).

Whatever the merits of the move for facilities like the Museum of Natural Science and N.C. Zoo,  the Clean Water Management Trust Fund and Natural Heritage Program do not  fit the new department’s basic organizing principle. Unlike the “attractions”,  the  CWMTF and Natural Heritage Program provide no public facilities and exist primarily to protect  water quality and identify important natural resources.

The General Assembly created the Clean Water Management Trust Fund (CWMTF) in 1996 to fund projects to prevent water pollution and to restore water bodies already impaired  by pollution.   CWMTF’s  non-regulatory approach complemented water quality rules  protecting state waters.  Originally,   CWMTF grants funded acquisition of riparian buffers to reduce polluted runoff into streams and rivers and  extension of sewer lines where failing  septic  systems threatened surface water quality.  In moving CWMTF, the 2015 budget severs its connection with other state efforts to restore and protect water quality.  The move follows 2014  legislation diluting the original CWMTF  focus on  water quality protection by authorizing use of the Trust Fund for acquisition of historic sites and buffers around military bases.

The  Natural Heritage Program researches, classifies and inventories the state’s natural resources, including endangered and rare plant and animal species. Information collected by the program can be used to document the conservation value of property and to assess the environmental impacts of projects requiring state and federal environmental permits.  The program has a much closer working relationship to the environmental  protection programs that remain in DENR than to public attractions like the N.C.  Zoo and Aquariums. (Note: The 2013 state budget eliminated the Natural Heritage Trust Fund which had been a source of funding for conservation of important natural areas;   the CWMTF  has become the funding source for those projects as well.)

♦  LANDFILL PERMITTING. The budget changes landfill permitting, allowing issuance of a single “life of site” permit to cover construction and operation of a landfill that may have a 30-year lifespan.  State rules had previously  required review and approval of the entire landfill site before construction, but also required each 5 or 10-year phase of the landfill to have a construction and operation permit.  Moving to a “life of site” permit  reduces the number of permit reviews for each landfill operation, changing the permit fee schedule and cutting funding for the state’s solid waste management program by 20%.  The change also reduces state oversight of landfill operations.  Landfill construction will continue to be done in phases for economic and practical reasons,  but the “life of site permit” eliminates state compliance review for each new  phase of the landfill.   The change also seems to eliminate the possibility of imposing additional permit conditions for construction or operation of later landfill phases in response to  technological developments  or new knowledge  of  risks to groundwater and other natural resources. The  budget provision does not set minimum inspection requirements in place of the 5 and 10-year phased permit reviews.

The bill also creates a legislative study of local government authority over solid waste collection and disposal, including ordinances on solid waste collection;  fees for waste management services; and potential for privatization.  The study suggests the General Assembly may focus next on reducing local solid waste regulation.  That will be a somewhat different discussion, since solid waste disposal has long been a local government responsibility so  local fees and ordinances have a direct connection to city/county collection and disposal services.

 LEAKING PETROLEUM UNDERGROUND STORAGE TANKSThe budget eliminates a state fund for cleanup of petroleum contamination from small  petroleum underground storage tanks (USTs) such as home heating oil tanks.   The Noncommercial UST Trust Fund has assisted property owners with the cost of soil and groundwater remediation caused by leaks from farm, home and small commercial USTs.  The budget allocates additional money to the Noncommercial UST Trust Fund to cover pending claims, but  limits use of the Fund to  cleanup costs associated with leaks reported to DENR by October 1, 2015.  All claims for reimbursement of those costs must be filed by July 1, 2016.

The budget provision also prohibits DENR from requiring removal of petroleum-contaminated soils at noncommercial UST sites that have been classified as low risk.  The  problem —  risk classifications  have been based on groundwater impacts;  a low-risk classification does not mean that contaminated soils on the property pose no health hazard. Current UST  rules require remediation of contaminated soils to levels safe for the intended land use (residential versus nonresidential) without regard to the overall risk classification of the site.  Soil remediation standards have been based on the potential health risks associated with exposure to petroleum-contaminated soil. Adverse health effects may include increased cancer risk since petroleum products contain a number of carcinogens. The budget provision may allow petroleum-contaminated soils to remain on residential properties at levels putting children at particular risk of adverse health effects.

♦ JORDAN LAKE WATER QUALITY RULES. The budget allocates another $1.5 million (from the Clean Water Management Trust Fund) to continue the 2013 pilot project to test use of aerators to improve water quality in the Jordan Lake system. The budget also has a special provision further delaying implementation of the Jordan Lake water quality rules for  another 3 years or one year beyond completion of the pilot project (whichever is later). The rules had been developed by the state’s Environmental Management Commission to address poor water quality  caused by  excess nutrients reaching the lake in wastewater discharges or in  runoff from agricultural lands and developed areas. See an earlier post  here on the  2013 legislation creating the pilot project.

♦ COASTAL EROSION CONTROL.   A special provision in the budget also changes state rules on use of sandbag seawalls and terminal groins in response to coastal erosion.  State coastal management rules have only allowed use of  temporary sandbag seawalls to protect a building facing an imminent threat from erosion. The same rules prohibit construction of the seawall more than 20 feet seaward of the threatened building. (These sandbag seawalls are substantial structures built on the beach in response to oceanfront erosion; the rules do not apply to sandbags used to prevent water from entering a building during a flood event.) The budget bill allows an oceanfront property owner to install a sandbag seawall to align with an existing sandbag structure on adjacent property without showing an imminent erosion threat to any building on their own property.  Since the bill allows construction to align with the adjacent sandbag seawall, the new seawall  may  also be more than 20 feet seaward of any  building. The irony here — a property owner may want to install a sandbag seawall in these circumstances  out of concern that the adjacent sandbag seawall may itself cause increased shoreline erosion.

The budget bill also increases the number of terminal groin structures that can be permitted at the state’s ocean inlets from four to six and identifies New River Inlet for location of two of the additional structures. See an earlier post  for more on earlier legislation allowing construction of terminal groins as a pilot project. Note: No terminal groins have been completed under the original pilot program, so the state does not yet have any data on the actual impacts of these structures.

♦ RENEWABLE ENERGY TAX CREDIT.  The budget bill allows the state’s 35% tax credit for renewable energy projects to sunset on December 31, 2015. A separate bill provides a “safe harbor” for renewable energy projects already substantially underway by that date. Those projects may qualify for a one-year extension of the tax credit. See Senate Bill 372 for more on conditions that apply to the safe harbor extension.