Opinion ID: 3052091
Heading Depth: 3
Heading Rank: 2

Heading: The CWA as Amended by the Water Quality Act of

Text: 1987 Recognizing the environmental threat posed by storm water runoff, Congress passed the Water Quality Act of 1987 (WQA). See Pub. L. No. 100-4, 101 Stat. 7 (1987) (codified as amended in scattered sections of 33 U.S.C.); see also 132 Cong. Rec. 32,381 (1986). The WQA added sections 402(l) and (p) to the CWA, setting up a new scheme for regulation of storm water runoff. Section 402(l) exempts certain storm water sources from NPDES permitting. 33 U.S.C. § 1342(l). With respect to 2 The “discharge of a pollutant” is defined as “any addition of any pollutant to navigable waters from any point source.” 33 U.S.C. § 1362(12). A “point source” is “any discernable, confined and discrete conveyance, including but not limited to any pipe, ditch, channel . . . from which pollutants are or may be discharged.” 33 U.S.C. § 1362(14). 3 The CWA empowers EPA or an authorized State to conduct an NPDES permitting program. 33 U.S.C. § 1342(a)-(b). Under the program, as long as the permit issued contains conditions that implement the requirements of the CWA, the EPA may issue a permit for discharge of any pollutant. 33 U.S.C. § 1342(a)(1). NRDC v. USEPA 5953 storm water runoff from oil, gas, and mining operations, section 402(l)(2) provides that The Administrator shall not require a permit under this section, nor shall the Administrator directly or indirectly require any State to require a permit, for discharges or stormwater runoff from mining operations or oil and gas exploration, production, processing, or treatment operations or transmission facilities, composed entirely of flows which are from conveyances or systems of conveyances (including but not limited to pipes, conduits, ditches, and channels) used for collecting and conveying precipitation runoff and which are not contaminated by contact with, or do not come into contact with, any overburden, raw material, intermediate products, finished product, byproduct, or waste products located on the site of such operations. 33 U.S.C. § 1342(l)(2) (emphasis added). In administering this exemption, “the EPA Administrator has discretion to determine whether or not storm water runoff at an oil, gas or mining operation is contaminated with . . . overburden, raw material, product, or process wastes . . . .”4 NRDC v. EPA, 966 4 The relevant conference report provides: The substitute [final version of the bill] provides that permits are not required where stormwater runoff is diverted around mining operations or oil and gas operations and does not come in contact with over burden, raw material, product, or process waste. In addition, where stormwater runoff is not contaminated by contact with such materials, as determined by the Administrator, permits are also not required. With respect to oil or grease or hazardous substances, the determination of whether stormwater is ‘contaminated by contact with’ such materials, as established by the Administrator, shall take into consideration runoff in excess of reportable quantities under section 311 of the [CWA] or section 102 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, or in the case of mining operations, above natural background levels. 5954 NRDC v. USEPA F.2d 1292, 1307 (9th Cir. 1992); see H.R. Rep. No. 1004, 99th Cong., 2d Sess., at 151. Section 402(p) of the CWA provides that the EPA or the NPDES States could not require a permit for storm water discharges until October 1, 1992, except for storm water discharges listed under section 402(p)(2).5 Section 402(p) then establishes two separate phases for the regulation of storm water discharges.6 33 U.S.C. § 1342(p). H.R. Rep. No. 1004, 99th Cong., 2d Sess., at 151. The conference report gives the EPA administrator “discretion to determine when contamination has occurred with respect to the substances listed in the statute, i.e., overburden, raw materials, waste products, etc.” NRDC, 966 F.2d at 1307 (emphasis added). “The conference report states that the Administrator shall take certain factors into account, but the report is clear that the determination of whether storm water is contaminated is within the Administrator’s discretion.” Id. (emphasis added). 5 Section 402(p)(2) provided that a permit must be obtained “with respect to the following stormwater discharges: (A) A discharge with respect to which a permit has been issued under this section [before February 4, 1987.] (B) A discharge associated with industrial activity. (C) A discharge from a municipal separate storm sewer system serving a population of 250,000 or more. (D) A discharge from a municipal separate storm sewer system serving a population of 100,00 or more but less than 250,000. (E) A discharge for which the Administrator or the State, as the case may be, determines that the stormwater discharge contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States.” 33 U.S.C. § 1342(p)(2). 6 The purpose of the two-phased approach was to allow EPA and the States to focus their attention on the most serious problems first. 133 Cong. Rec. 991 (1987). Phase I, embodied in subsections 402(p)(3) through (4), requires EPA to establish a permit program for certain storm water discharges, including those associated with industrial activity. 33 U.S.C. § 1342(p)(3)-(4). Phase II, embodied in subsections 402(p)(5) through (6), requires EPA to investigate other storm water discharges and to create a comprehensive program to regulate such sources to protect water quality. 33 U.S.C. § 1342(p)(5)-(6). NRDC v. USEPA 5955
In 1990, EPA issued its NPDES Phase I storm water rule. 55 Fed. Reg. 47,990 (Nov. 16, 1990). This rule established permit requirements for certain storm water discharges, including those discharges associated with construction activities that disturb five acres or greater (large construction sites). First, at 40 C.F.R. § 122.26(c)(1)(iii), the Phase I rule codified the conditions that would be considered indicative of “contamination” under the CWA section 402(l)(2) exemption as follows: (iii) The operator of an existing or new discharge composed entirely of storm water from an oil or gas exploration, production, processing, or treatment operation, or transmission facility is not required to submit a permit application in accordance with paragraph (c)(1)(i)7 of this section, unless the facility: (A) Has had a discharge of storm water resulting in the discharge of a reportable quantity for which notification is or was required pursuant to 40 CFR 117.21 or 40 CFR 302.6 at anytime since November 16, 1987; or (B) Has had a discharge of storm water resulting in the discharge of a reportable quantity for which notification is or was required pursuant to 40 CFR 110.6 at any time since November 16, 1987; or (C) Contributes to a violation of a water quality standard. 7 Paragraph (c)(1)(i) applies to “[d]ischargers of storm water associated with industrial activity and with small construction activity.” 5956 NRDC v. USEPA (emphasis added).8 Recognizing the “potential for serious water quality impacts,” EPA concluded that oil and gas facilities are “likely to discharge storm water runoff that is contaminated” and that “[s]uch contamination can include disturbed soils.” 55 Fed. Reg. at 48029. With regard to permit applicability to oil, gas, and mining facilities, EPA explained: “[These] facilities are among those industrial sites that are likely to discharge storm water runoff that is contaminated by process wastes, toxic pollutants, hazardous substances, or oil and grease. Such contamination can include disturbed soils and process wastes containing heavy metals or suspended or dissolved solids, salts, surfactants, or solvents used or produced in oil and gas operations. Because they have the potential for serious water quality impacts, Congress recognized, throughout the development of the storm water provisions of the Water Quality Act of 1987, the need to control storm water discharges from oil, gas, and mining operations, as well as those associated with other industrial activities . . . . From the standpoint of resource drain on both EPA . . . and potential permit applicants, [Congress’s] conclusion was that operators that use good management prac- tices and make expenditures to prevent contamina- 8 Subsequently, in June 2006 when EPA promulgated the final challenged rule, it clarified that the 1990 Phase I rule “codified, at 40 CFR 122.26(c)(1)(iii), the conditions that would be considered indicative of contamination by contact with raw material, intermediate products, finished product, byproduct, or waste products located on a site and would thus necessitate an NPDES storm water permit application by oil and gas exploration, production, processing or treatment operations or transmission facilities.” See 71 Fed. Reg. at 33629 (June 12, 2006). The CWA does not define the terms “raw material,” “intermediate products,” “finished product,” “byproduct,” or “waste products.” See 33 U.S.C. § 1362. “Overburden” is defined as “any material of any nature, consolidated or unconsolidated, that overlies a mineral deposit, excluding topsoil or similar naturally-occurring surface materials that are not disturbed by mining operations.” 55 Fed. Reg. at 58033 (codified at 40 C.F.R. § 122.6(b)(10)). NRDC v. USEPA 5957 tion must not be burdened with the requirement to obtain a permit. Hence, section 402(l)(2) creates a statutory exemption from storm water permitting requirements for uncontaminated runoff from these facilities.” 55 Fed. Reg. at 48029 (emphasis added). Thus, EPA’s interpretation of 402(l)(2) was that “section 402(l)(2) creates a statutory exemption from storm water permitting requirements for uncontaminated runoff from these facilities,” and the Phase I rule merely codified such interpretation. Id. (emphasis added). Second, because the statutory exemption was limited to “operations,” EPA determined that all related construction activities were ineligible for the exemption and must apply for a permit in light of the “serious water quality impacts” caused by construction storm water discharges polluted with sediment.9 55 Fed. Reg. at 48,033-34. After reviewing the findings of various studies, the EPA provided the underlying rationale for its belief that storm water permits were appropriate for the construction industry: Construction activity at a high level of intensity is comparable to other activity that is traditionally 9 EPA concluded that the language in Section 402(l)(2) did not justify excluding oil and gas construction from permit requirements that applied to all other types of construction. 71 Fed. Reg. at 33629. A 1992 internal EPA memorandum clarifying EPA’s administration of the NPDES permit system confirmed EPA’s interpretation of the Phase I rule that “[a]ll construction operations . . . that disturb five or more acres of land are required to apply for a NPDES permit . . . regardless of its affiliation with an oil and gas operation.” (ER 001). The oil and gas industry brought suit to challenge this internal memorandum as an unauthorized promulgation of oil and gas permit regulations that contradicted the exemption at 33 U.S.C. § 1342(l)(2), but the suit was dismissed for lack of subject matter jurisdiction. Appalachian Energy Grp. v. U.S. EPA, 33 F.3d 319, 322 (4th Cir. 1994). 5958 NRDC v. USEPA viewed as industrial, such as natural resource extraction. Construction that disturbs large tracks of land will involve the use of heavy equipment such as bulldozers, cranes, and dump trucks. Construction activity frequently employs dynamite and/or other equipment to eliminate trees, bedrock, rockwork, and to fill or level land. Such activities also engage in installation of haul roads, drainage systems, and holding ponds that are typical of the industrial activity identified in § 122.26(b)(14)(i-x). EPA cannot reasonably place such activity in the same category as light commercial or retail business. Further, the runoff generated while construction activities are occurring has potential for serious water quality impacts and reflects an activity that is industrial in nature. Where construction activities are intensive, the localized impacts of water quality may be severe because of high unit loads of pollutants, primarily sediments. Construction sites can also generate other pollutants such as phosphorus and nitrogen from fertilizer, pesticides, petroleum products, construction chemicals and solid wastes. These materials can be toxic to aquatic organisms and degrade water for drinking and water-contact recreation. Sediment runoff rates from construction sites are typically 10 to 20 times that of agricultural lands, with runoff rates as high as 100 times that of agricultural lands, and typically 1,000 to 2,000 times that of forest lands. Even small construction sites may have a significant negative impact on water quality in localized areas. Over a short period of time, con- struction sites can contribute more sediment to streams than was previously deposited over several decades. EPA is convinced that because of the impacts of construction discharges that are directly to waters of NRDC v. USEPA 5959 the United States, such discharges should be addressed by permits issued by Federal or NPDES State permitting authorities. It is evident from numerous studies and reports submitted under section 319 of the CWA that discharges from construc- tion sites continue to be a major source of water quality problems and water quality standard violations. Accordingly EPA is compelled to address these source[s] under these regulations and thereby regulate these sources under a nationally consistent program with an appropriate level of enforcement and oversight. 55 Fed. Reg. at 48033-34.
In 1999, EPA issued the Phase II storm water rule, thereby expanding the NPDES storm water program to address storm water discharges from construction sites that disturb one to five acres (small construction sites). 64 Fed. Reg. 68,722 (Dec. 8, 1999). Under this rule, small construction sites were required to obtain an NPDES permit by March 10, 2003. 64 Fed. Reg. at 68,840 (codified at 40 C.F.R. § 122.26(e)(8)); see 71 Fed. Reg. at 33,629. Noting various studies that had taken place both prior and subsequent to the issuance of the Phase I rule, EPA reiterated its concern over sediment-laden storm water discharges from construction activities on water quality impact. 64 Fed. Reg. at 68,728-30. EPA justified extending the NPDES permit requirements to small construction activities as follows: EPA believes that the water quality impact from small construction sites is as high as or higher than the impact from larger sites on a per acre basis. The concentration of pollutants in the runoff from smaller sites is similar to the concentrations in the runoff from larger sites. The proportion of sediment that 5960 NRDC v. USEPA makes it from the construction site to surface waters is likely the same for larger and smaller construction sites in urban areas because the runoff from either site is usually delivered directly to the storm drain network where there is no opportunity for the sediment to be filtered out. 64 Fed. Reg. at 68,730.
In 2002, EPA determined that close to 30,000 oil and gas sites, annually, could be affected by the Phase II rule.10 67 Fed. Reg. 79,828 (Dec. 30, 2002). In order to take this new information into account, EPA published a final rule postponing, until March 10, 2005, the NPDES permit authorization deadline for storm water discharges from small construction activity associated with oil and gas sites.11 68 Fed. Reg. 11,325 (Mar. 10, 2003). EPA again postponed the permit deadline for an additional 15 months until June 12, 2006.12 70 Fed. Reg. 11,560 (Mar. 9, 2005). 10 Initially, EPA assumed that few of these sites would incur compliance costs associated with the Phase II rule because most of them would be less than one acre. However, based on new information, EPA believed that a significant number of such sites may exceed one acre. In addition, EPA had assumed that the oil and gas industry would use best management practices (BMPs) similar to those in other industrial sectors involved in construction and development, if affected. EPA planned to gather more data on the BMPs used by the oil and gas industry to determine if its estimated costs range for BMPs was accurate. 67 Fed. Reg. at 79,829-30. 11 EPA issued this deferral rule to further evaluate the economic impact of the permit requirements on the oil and gas industry, the appropriate BMPs that might be used to prevent contamination of storm water runoff associated with oil and gas operations, and the scope and effect of the CWA section 402(l)(2) exemption and other storm water provisions. 67 Fed. Reg. at 79,828. 12 EPA’s preliminary analysis indicated that there could be substantial economic impact associated with the regulation of oil and gas sites, priNRDC v. USEPA 5961