EPA Gets the Last Word—For Now

Posted on August 22, 2014 by Charles Nestrud

At the request of El Dorado Chemical Company (EDCC), the Arkansas Commission on Pollution Control and Ecology (Commission) twice approved site specific revisions to its water quality standards for dissolved minerals, finding that the new standards were protective of downstream uses.  Twice, EPA rejected the rulemaking.  In a court battle over a state’s right to set water quality standards, EPA won. El Dorado Chemical Company v. EPA, et al, Case No. 13-1936 (8th Cir. August 15, 2013).

Arkansas has the most restrictive water quality criteria for dissolved minerals (chlorides, sulfates and total dissolved solids) in the nation, having set the criteria years ago based on naturally occurring levels in undisturbed streams. Few receiving streams with industrial discharges can meet these “pristine stream” mineral standards, creating permitting problems, 303(d) listings of impaired waters, and the need for TMDLs.  To address this issue, Arkansas developed a procedure to revise the standards on a site-specific basis to accommodate permitting historical discharges that were not impacting water quality.

EDCC received an NPDES permit from the Arkansas Department of Environmental Quality (ADEQ) with unachievable mineral limits, and a 3-year compliance schedule to provide time to pursue a criteria change.  Following ADEQ procedures, EDCC demonstrated the absence of water quality impacts, and the Commission approved the new criteria, paving the way for an NPDES permit modification with achievable mineral limits.  That was derailed by EPA Region 6, which rejected the criteria change, stating that potential toxic impacts to downstream waters had not been adequately evaluated.  At the same time EPA was threatening enforcement against EDCC for permit violations that were then occurring because the NPDES permit compliance schedule had expired while EPA was holding up approval of the new criteria.  EDCC did the additional work requested by EPA, which demonstrated that the water quality immediately downstream of EDCC’s discharge was not impacted, but a stream reach further downstream failed a simulated toxicity test for sub-lethality (reproduction) of the water flea.  Since EDCC’s effluent mineral concentration was less than the background mineral concentration downstream, any downstream mineral toxicity was beyond EDCC’s control—likely the lingering effects of historical oilfield practices dating back to the early 1900’s.  EDCC decided to forego any criteria change for the downstream reach.   The Commission agreed and rescinded the criteria change for that downstream reach.  The revised rulemaking was submitted to EPA for approval and EPA again rejected it, based on the sub-lethality failure downstream.  In the meantime EDCC was participating in a project to construct a joint municipal/industrial pipeline that would by-pass these downstream waters and avoid the mineral criteria issue altogether, but appeals of the pipeline permit delayed that project as well.  With no clear alternative, EDCC appealed.

EDCC relied upon the primary authority granted to states in the Clean Water Act to establish water quality standards, including the evaluation of potential downstream effects on water quality, and argued that EPA overstepped its bounds.  Relying on EPA administrative appeals court decisions, EDCC argued that EPA must present "compelling evidence, based on strong science" before rejecting Arkansas’s proposed water quality standards.  EDCC urged that more deference should be given to the state decision.  EDCC also argued that EPA had relied upon a single, sub-lethal test result, in the face of overwhelming evidence relied upon by Arkansas, that downstream uses were not impacted.  The district court and Eighth Circuit agreed with EPA that Arkansas had failed to demonstrate that the proposed water quality standards are protective of downstream water quality.  The Court of Appeals said that EPA’s reading of its responsibilities under the CWA was not plainly erroneous, adopting the traditional APA standard of review, and found EPA’s decision to be consistent with the CWA’s broad purpose to "restore and maintain the chemical, physical, and biological integrity of the Nation’s waters."  With respect to the evidence of downstream impacts, the Eighth Circuit upheld EPA’s reliance upon the sub-lethal data, stating that EPA’s decision was not "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."  During oral argument the Eighth Circuit panel seemed interested in EDCC’s argument that since the revised mineral criteria for the problematic downstream reach had been rescinded, EPA should deal with potential impacts from EDCC’s discharge to those stream reaches further downstream in the NPDES permit review.  However, the opinion rejected that argument, stating that assessment of downstream impacts was part of EPA’s responsibility when evaluating proposed water quality standards—how far downstream this assessment can go is not discussed.

While the appeal was pending, the pipeline appeals were successfully resolved, and the pipeline has been operating since August 2013.  Hence, EDCC has a compliance option in place.  The Court of Appeal’s awareness that this compliance option had been implemented (and Arkansas’s failure to participate in the appeal to defend its rulemaking decision), may have influenced the Court’s decision.

ADEQ is currently working with EPA to pursue a long term study of Arkansas’ dissolved mineral standards, with a goal of developing a “simplified” procedure to deal with Arkansas’ overly restrictive mineral standards. If these discussions are successful, others should be saved from the ordeal EDCC had to endure.



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