Tag Archives: Water Quality

Obstructing Environmental Standards

January 26, 2024. In North Carolina, adopting a new state rule involves many steps and multiple levels of review. But the rulemaking process has recently obstructed a water quality standard in ways not intended by  the  N.C. Administrative Procedure Act (APA). As a result,  the rule setting a water quality standard for 1,4 dioxane — a toxic pollutant and likely human carcinogen — cannot go into effect even though there has been no legally supported objection to the rule.

1,4 dioxane. The U.S. Environmental Protection Agency (EPA) has identified 1,4 dioxane (used in solvents and other products) as a toxic pollutant associated with a number of adverse health effects, including liver damage and increased cancer risk. EPA published those findings in a 2020 health risk assessment of 1.4 dioxane  that focused primarily on occupational exposure.  In 2023, EPA released a revised  health risk assessment  of 1,4 dioxane considering risk to the public through exposure in drinking water. The new assessment  concludes that 1,4 dioxane in drinking water  “presents an unreasonable risk to human health”. (The revised assessment was released for public comment in September 2023; it is not clear whether EPA has finalized the assessment since closure of the comment period.)

As early as 2015, drinking water systems using the Cape Fear River system as a water source detected 1,4 dioxane in their drinking water.  Those water systems include the Town of Pittsboro and the City of Fayetteville. Investigation of  1,4 dioxane releases to the river by the  N.C. Department of Environmental Quality (DEQ)  led to upstream municipal wastewater systems.  As documented by DEQ, several cities — including Greensboro, Reidsville and Burlington —  have  periodically released wastewater containing high levels of  1,4 dioxane to the Cape Fear River system (which includes the Haw River).    In most cases, the 1,4 dioxane  could be traced back to a specific industrial facility discharging process water to the municipal sewer system.

As DEQ worked with these communities to address 1,4 dioxane spikes in their wastewater discharges, the N.C. Environment Management Commission (EMC) proposed and adopted a numerical water quality standard for 1,4 dioxane. A water quality standard establishes the safe concentration of a water pollutant in surface waters. DEQ permit writers then use the standard  to set appropriate limits on wastewater discharge permits (National Pollutant Discharge Elimination System or “NPDES” permits)  to maintain a  safe level in the water.  In developing the standard for 1,4 dioxane, the EMC relied on state and federal studies to calculate a safe concentration of 1,4 dioxane in surface water.  The proposed state water quality standard of 0.35 micrograms per liter (or 0.35 parts per billion) aligned with the concentration EPA studies associated with higher cancer risk.

The EMC adopted the water quality standard for  1,4 dioxane standard in March 2022. Two years later, the 1,4 dioxane rule is still not in effect and it is not clear when or if it will be.

What went wrong?  Once a state agency adopts a rule, the N.C. Rules Review Commission (RRC) must review and approve the rule before it can go into effect.  Under the APA, the RRC can only object to a rule on four grounds:

1. The rulemaking agency didn’t have authority under state law to adopt the rule;

2. The rule language isn’t clear;

3. The rule isn’t reasonably necessary to implement state law  or a federal law or rule;

4. The agency failed to comply with APA rulemaking procedures.

In May 2022, the RRC  objected to the EMC’s 1,4 dioxane water quality standard. The RRC objection did not question the EMC’s authority to adopt the rule; the clarity of the standard; or the scientific basis for it. The objection was that the EMC failed to comply with APA rulemaking procedures because — in the opinion of the RRC — the fiscal analysis of the rule was flawed. But the APA does not allow the RRC to object to a rule based on the content of a fiscal analysis; the Office of State Budget and Management (OSBM) has responsibility for certifying the analysis. In fact, RRC staff legal counsel had previously advised the RRC that it did not have the authority to object to a rule based on the content of a fiscal analysis approved by OSBM.

As consistently interpreted and applied in the past (by the Rules Review Commission itself), the EMC complied with APA rulemaking requirements by submitting an OSBM-certified fiscal analysis. After unsuccessful efforts to resolve the RRC objection,  the EMC authorized its legal counsel in September 2022 to challenge the RRC action in court as exceeding the RRC’s authority.  At the time, the  EMC voted by a nearly 2/3 majority to pursue judicial review of the RRC objection.

In January 2024 — after a turnover among EMC appointments —  a new EMC majority appointed by legislative leaders and the Commissioner of Agriculture voted to drop the legal action challenging the RRC objection. Dismissing the lawsuit allows the RRC objection to stand and prevents the 1,4 dioxane standard from going into effect. There is no path around the RRC objection.  Nothing in the APA supports the voiding of an environmental standard in the absence of any legitimate objection to the rule or the rule adoption process.

What next?  Another version of the 1,4 dioxane standard (based on the most recent EPA health risk criteria) has been included in a new package of water quality rules the EMC just began to work on.  EMC Chair J. D. Solomon has indicated an intent to move the 1,4 dioxane standard forward in that process. The problem is that the new rule will go through the same process as the original 1,4 dioxane standard — a process that required nearly two years for EMC adoption; additional months for RRC review;  and resulted in the rule being voided nearly four years after the rulemaking process began based on an RRC objection lacking any basis in the Administrative Procedure Act. It is unlikely that the local governments opposed to the original 1,4 dioxane standard (as reflected in their comments to the Rules Review Commission when the rule was under review)  will be more enthusiastic about the somewhat stricter standard in the new rulemaking package.

Meanwhile, DEQ continues to rely on the backstop of the “narrative” water quality standard in 15A NCAC 2B.0208 to address 1,4 dioxane. That rule  provides specific direction to DEQ permit writers on how to set  a water quality standard for a toxic pollutant that does not yet have a numerical standard in EMC rules.  In recent years, DEQ has relied on the rule to set in-stream pollutant concentrations and then wastewater permit limits for 1,4  dioxane and PFAS chemicals. In another legal twist, however, the City of Asheboro has challenged the enforceability of  15A NCAC 2B.0208 in an appeal of conditions on Asheboro’s renewed  NPDES permit  — including conditions related to 1,4 dioxane. That case is pending in the Office of Administrative Hearings.

Postscript: Yesterday, the Raleigh News and Observer reported that the City of Burlington detected high 1,4 dioxane levels (545 parts per billion) in wastewater samples taken at the South Burlington Wastewater Treatment Plant on January 23, 2024.  As noted above, EPA studies associated  0.35 ppb with a 1/1 million increased cancer risk and EPA has previously advised that 1,4 dioxane levels in drinking water should not exceed 35 ppb which correlates to a 1/10,000 increased cancer risk.

Burlington notified both DEQ and downstream water systems of the recent 1,4 dioxane spike (test results from the day before  had been only 2.4 ppb) and contacted an industrial facility in Burlington suspected to be the source.  The Town of Pittsboro, which has a drinking water intake in the Haw River downstream of the Burlington wastewater discharge,  immediately reduced its Haw River withdrawal and asked Pittsboro water system customers to conserve water until the slug of  1,4 dioxane  contaminated water passes the intake and concentrations  of 1,4 dioxane at the intake drop to safe levels.

Wetlands Protection Update

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

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

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

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

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

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

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

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

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

      ♦  Tidal waters

      ♦ The territorial seas

      ♦ Interstate waters

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

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

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

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

Scope of North Carolina Legislation Limiting Wetlands Protection.

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

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

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

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

Action: 2019 Budget

July 9, 2019. The 2019 legislative session got off to a very slow start. Few bills moved  before the May 9 deadline for substantive bills to pass one chamber of the legislature to stay alive. The pace picked up in the last month as both the House and Senate passed versions of a budget bill (House Bill 966)  and then agreed on a final budget. Governor Cooper immediately vetoed the budget bill for reasons unrelated to environmental provisions. (The Governor’s veto statement  criticized the legislature’s budget priorities; refusal to expand the state’s Medicaid program had been one sticking point.) This blogpost looks at some of the environmental provisions in the budget.

Funding Related to Emerging Contaminants Such as GenX.

Reallocation of state funding appropriated in 2018 to extend water lines in areas with well contamination caused by GenX. In 2018, the legislature allocated $2 million to DEQ’s Division of Water Infrastructure to help local governments extend water lines to properties affected by contamination caused by per‑ and poly‑fluoroalkyl substances (PFAS) including GenX.  Section 12.13 of the  2019 budget bill  reallocates those funds for a number of projects unrelated to PFAS. In February 2019, Chemours entered into a settlement agreement  with DEQ that requires the company to provide a replacement water supply to any person whose well has PFAS contamination above the health advisory level. Under the agreement, the replacement water supply means connection to a public water system unless the well owner declines or DEQ finds it would be prohibitively expensive or unsafe.

Additional funds to address emerging contaminants through water quality permitting. The budget funds five new positions in DEQ to address emerging contaminants. The positions include two new engineers to work on issuance and renewal of Clean Water Act wastewater discharge permits.

State Funding to Eliminate a Conservation Easement and Buy Back Mitigation Credits.   In an unusual (and unprecedented) provision, the legislature earmarked over $800,000 to eliminate a conservation easement on a completed stream restoration project.  The project, restoration of Little Alamance Creek in Burlington, was completed in 2012-2013. The creek had impaired water quality; the restoration project, which included replanting stream bank vegetation, was designed to improve water quality in the creek. The stream restoration project also generated mitigation credits intended to offset the stream impacts of N.C. Department of Transportation (NCDOT)  road construction projects. (Federal and state water quality permits often require the project developer to offset stream or wetland impacts by funding restoration of similar natural resources.)

The City of Burlington donated property for the conservation easement, which runs through a Burlington city park, but later had both aesthetic and public safety concerns about the completed stream restoration.  According to city staff, trees planted along the stream had not overtaken the shrubby undergrowth as expected. City officials were unhappy with the appearance of revegetated stream bank and worried that the vegetation provided cover for criminal activity.

The  budget provision requires DEQ to dissolve the conservation easement on Little Alamance Creek and reimburse funds used to purchase mitigation credits generated by the project. If NCDOT received mitigation credits from the Little Alamance Creek project as expected,  the department will have to buy  mitigation credits from other stream restoration projects to stay in compliance with its road construction permits. In that case, taxpayers will have paid for the mitigation credits twice since there is no possibility of recovering funds already spent on restoration of Little Alamance Creek. If a private developer received any of the credits generated by the project, the state buyback would be used to replace the developer’s credits. The cost is significant; the budget appropriates $837,755.00, but also directs DEQ to draw on other department funds if the actual cost exceeds the amount appropriated.

Removal of the conservation easement may allow the City of Burlington to alter the stream bank vegetation. It isn’t clear whether the city has a specific plan or what impact the changes will have on the stream’s water quality.

Delay Update of  State Water Quality Permits for Large Animal Operations. One of the policy provisions in the budget delays renewal of the water quality permit that covers most large animal operations. DEQ had completed a nearly year-long process to update and reissue the state water quality permits for large animal operations, including swine farms. The general permits set operating conditions for different categories of farms to protect surface water and groundwater from contamination by animal waste. The recently finalized general permits included some new or modified conditions, including a requirement for swine farms to monitor groundwater quality around waste lagoons located in the 100-year floodplain.

The N.C. Farm Bureau filed an appeal to challenge some of the conditions on the new general permits. In Section 12.19, the budget bill prevents DEQ from covering farms under the new general permits until 2020.   In effect, the bill delays enforcement of any new conditions and allows farms to continue to operate under the old permits while the N.C. Farm Bureau pursues its appeal.

During the delay, the budget provision directs DEQ to study whether water quality general permits should be adopted under the rule making procedures in the state’s Administrative Procedures Act. Note: As a practical matter, the process DEQ used to develop and finalize the general permits exceeded the basic public notice and hearing requirements of the APA.

2018 Environmental Legislation Part 2: Environmental Bills

July 28, 2018.  In addition to the environmental policy changes in the budget, several  bills amended environmental laws. Among the more significant changes:

Stormwater. Sec. 14 of House Bill 374  (2018 Regulatory Reform Act) directs the Environmental Management Commission  to study delegated local stormwater programs to identify: 1. local governments that enforce requirements exceeding those in state law, including requirements for inspection and maintenance of stormwater systems; and 2. those that since August 1, 2015 have taken enforcement actions based on requirements under a Total Maximum Daily Load (TMDL) calculation or NPDES permit that exceed the requirements in state law.

When a water body chronically violates a water quality standard, the  Clean Water Act requires a limit on discharge of the problem pollutant to eliminate the  water quality violation –  a “total maximum daily load”. The TMDL caps  total releases of the pollutant to the impaired water body. Each wastewater treatment plant or industry that discharges wastewater directly or indirectly to impaired waters receives a permit limit  for the pollutant;  the sum of all the permitted discharges  cannot exceed the cap.  In areas like the Jordan Lake watershed,  stormwater rules have been used as an additional tool for meeting a TMDL for nutrient pollution  by also reducing the release of nutrients in runoff.  The H374 provision refers to this use of stormwater regulation as part of a larger TMDL for nutrient pollution and enforcement of the TMDL  through a federal stormwater discharge permit.

The provision is the most recent  in a series of legislative efforts to limit the scope of local as well as state stormwater requirements. It’s interesting that the  bill specifically targets  local requirements for inspection and maintenance of stormwater systems that may be required to comply with state and federal law. It isn’t clear how local  enforcement actions “based on requirements under a Total Maximum Daily Load (TMDL) calculation or NPDES permit” could exceed  requirements in state law since the state develops the TMDLs and issues the NPDES  permits.

Coastal Stormwater. Sec. 16 of House Bill 374 in effect creates a new coastal stormwater exemption for older subdivisions. State coastal stormwater rules require residential subdivision development  near sensitive coastal waters to  control stormwater  to reduce pollutant runoff.  The stormwater management plan often includes limits on the amount of paved or built-on area in the subdivision to provide adequate natural area to absorb runoff. The impervious surface limits appear in the developer’s  stormwater permit for construction of the subdivision.  Once the subdivision has been significantly built out,  the developer typically transfers ownership and control over all common areas — including the stormwater system —  to a homeowners’ association.  To insure stormwater standards continue to be met, coastal stormwater rules require the developer to reflect those impervious surface limits in the development’s restrictive covenants. People who buy or build in the subdivision are bound by the restrictive covenants, which can be enforced by the HOA or the state. There have been a few sympathetic situations in the past where a developer turned a subdivision that was already in violation of its stormwater permit over to the HOA, leaving the HOA to contend with an immediate enforcement action.  But there have also been situations where subdivision residents added impervious surface (expanded parking areas, storage buildings, home additions) in violation of the restrictive covenants after the developer left the picture.

The new provision applies to subdivisions platted 20 or more years ago without regard to when construction in the subdivision actually began. Under H374, a  subdivision with excess impervious surface  will be “deemed to be in compliance” with the impervious surface limits in state stormwater rules if the HOA didn’t receive a notice of  non-compliance at the time responsibility for the system transferred from the developer to the HOA.

The provision may have unintended consequences. First,  it’s not clear how the provision will affect enforcement actions against a developer who violated the stormwater permit during construction since the law “deems” the subdivision to be in compliance. The provision also allows a subdivision to retain impervious surface added long after transfer of ownership from the developer in violation of subdivision restrictive covenants. In these older platted subdivisions, H374 deems all excess impervious surface added before  January 1, 2017 to be in compliance with the stormwater rules.

Swine waste management. The 2018 Farm Act, Senate Bill 711 greatly limits nuisance lawsuits against swine operations. See an earlier post for an in-depth discussion of S711.  The new law only applies to nuisance claims filed after S711 became law, so it does not affect dozens of nuisance claims already filed on behalf of people living near swine farms. Although clearly a response to the swine farm nuisance lawsuits, the new restrictions on nuisance claims apply to any kind of agricultural or forestry operation.

Environmental Legislation 2018: Part 1 – The Budget

July 9, 2018. An overview of 2018 state budget provisions affecting the environment:

♦ The budget provides funds to monitor water bodies for GenX and other per- and poly-fluoroalkyl  substances (PFAS). The budget bill also gives the Governor a new authority to stop releases of  PFAS albeit one not very practical to use.  See an earlier post for a detailed description of the GenX budget provisions.

♦ The budget directs up to $2 million to Speedway Motor Sports for environmental remediation at Charlotte Motor Speedway. The state funding will need to  be matched 2:1 by funding from other sources.   Half of the revenue from N.C.’s solid waste disposal tax goes to assess and cleanup contamination associated with landfills that pre-dated 1983 environmental standards for waste disposal; one of these “pre-regulatory” landfills is located in the infield of  Charlotte Motor Speedway.  The law governing the remediation program requires DEQ  to prioritize work on the old landfill sites based on risk to human health and the environment and it isn’t clear how the Charlotte Motor Speedway  ranks under the priority factors.  The budget provision may be intended to accelerate  (sorry!) remediation of the Speedway landfill  by immediately providing state funding, but conditioned on Speedway Motor Sports providing matching funds which  is not normally required under the remediation program. 

♦ The 2018 budget continues the legislature’s recent practice of bypassing the infrastructure  grant program in DEQ to direct water and sewer funds to specific projects.  In the normal grant process, DEQ and the State Water Infrastructure Authority allocate infrastructure funds under priority criteria that take into consideration a number of environmental, public health and financial factors. The budget bill diverts $2.5 million from the competitive  grant program  to projects in the towns of Richlands, Mount Airy,  Bath and Trenton. The amount per project varies from $201,000 to over $1 million.

♦ The budget directs $5 million dollars to Resource Institute, Inc. “to explore opportunities for the development and implementation of emerging techniques that can extend the useful life of beach nourishment projects”. Resource Institute, Inc., a Winston-Salem based non-profit, describes its mission as “[enhancement of] America’s natural resources by restoring streams, rivers and wetlands”. information  on the Resource Institute’s website indicate the nonprofit  largely assists in connecting restoration project sponsors with potential funding sources and planning assistance; the Institute does not appear to directly work on design and construction of restoration projects. 

♦ The  budget bill revisits a 2017  budget provision controlling use of funds from the U.S. Environmental Protection Agency’s  (EPA) settlement of a Clean Air Act enforcement case against  Volkswagen (VW). Under the consent agreement, N.C. could receive over $90 million for air quality projects.  The  2017 state  budget required legislative committee review of DEQ’s proposed plan for use of the money and legislative appropriation of the funds to DEQ through  the state budget process.  (As a practical matter,  that means the legislature would have to act before DEQ could spend any funds designated for North Carolina by the national VW settlement trustee.) The 2018 budget bill adds more detail by directing the State Treasurer to hold the VW funds in a special account until  appropriated by the legislature.  The 2018 provision also adds a new sentence prohibiting  DEQ from releasing  any funds to a third party until the legislature has appropriated the money.  It isn’t clear whether the new sentence requires an individual appropriation for each project (and recipient) under the plan or was simply intended to restate the general requirement for  a lump sum appropriation to DEQ through the state budget process. The difference could be significant since the national VW  settlement trustee must be  assured that DEQ has authority under state law to use the VW settlement funds for the purposes described in the state plan. Some environmental organizations have expressed concern that the provision may undermine N.C.’s eligibility  to receive  VW settlement funds if it is interpreted to mean the legislature could refuse funding to an intended recipient, undermining DEQ’s legal authority to carry out the plan.

♦ The General Assembly again delayed implementation of nutrient reduction rules in the  Falls Lake and Jordan Lake watersheds; both lakes have impaired water quality due to excess nitrogen and phosphorus from wastewater discharges and runoff.   The legislature has repeatedly postponed full enforcement of nutrient reduction rules adopted by the Environmental Management Commission in  2009 (Jordan Lake) and 2011 (Falls Lake). The 2018 budget provision adds at least another year to previous delays in implementation of the Jordan Lake rules; the suspended rules would remain in limbo until completion of a new rulemaking effort that may not begin until 2020.  The provision extends the timeline for beginning work on new Falls Lake rules until 2024 and suspends enforcement of the later stages of the existing Falls Lake rules during that time.  A number of previous posts  —  going back to 2013 —  provide some history of legislative intervention in the regulation of nutrient discharges to the two reservoirs.

♦ Under the disaster relief section of the budget, the legislature provides $3.6 million to restart a program to map landslide hazard areas in western N.C.  The legislature had defunded the landslide mapping program several years ago. (See an earlier post for background on the political death of the landslide mapping program.)

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:

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