4. Water II

Section 402 PermitsNPDES = National Pollutant Discharge Elimination System (WPDES in Wisconsin)

“The Administrator may… issue a permit for the discharge of any pollutant, or combination of pollutants, notwithstanding section 301(a), upon condition that such discharge will meet… all applicable requirements under sections 301, 302, 306, 307, 308 and 403 of this Act.”

§402(a)(1)

Water Quality Trading

• Measure to deal with Non-Point sources• Farmers generate “credits” by undertaking

voluntary actions to improve WQ• Point-sources, POTWs, MS4s buy credits to

stay under their Waste Load Allocation (under a TMDL).

• Can only trade after meeting TBEL.• Farmers reluctant to enter into contracts.

What is a Wetland?An ecosystem defined by Federal Regulation: “Those areas that are inundated or saturated by surface or groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions.” 33 CFR 218

• Not more than 18” deep, wet for at least 2 weeks in average growing season.

• 1776: 220 million acres• 1985: 105 million acres• Loss rate: 60 ac/hr

Houses built on filled wetlands in San Francisco Bay.

Development permitting trends indicated that San Francisco Bay would become filled by development (The Oakland Tribune, 1960)

Wisconsin Wetlands• ~10 million acres pre-settlement• 5,385,290 acres remain (53%)

404 Permit Program

• Corps issues permits for all “dredge and fill” in Waters of the United States (WOTUS)

• EPA writes the environmental criteria for issuing such permits– Not written until 1980: the 404(b)(1) Guidelines– EPA can decide Corps has mis-applied Guidelines

• EPA can VETO Corps permits• Agricultural wetlands exempt

What is Fill?

1993 “Fill Rule”: Corps regulation that “incidental fallback” from dredging constitutes “fill”.1998: Rule invalidated by DC Court of Appeals:“… the straightforward statutory term ‘addition’ cannot reasonably be said to encompass the situation in which material is removed from the waters of the United States and a small portion of it happens to fall back. Because incidental fallback represents a net withdrawal, not an addition, of material, it cannot be a discharge.” Nat’l Mining v. Corps. 1998

2002: New “Fill Rule” – anything “changing bottom elevation.”

Jurisdiction: What is a WOTUS?

“The term ‘navigable waters’ means the waters of the United States, including the territorial seas.” CWA §502(7)

“Navigable waters of the United States are those waters that are subject to the ebb and flow of the tide and/or are presently used, or have been used in the past, or may be susceptible to use to transport interstate or foreign commerce.”

33 CFR 329.4 (Corps regs issued 7/19/1977)

Jurisdictional Battles

1976: NRDC v. Callaway – expansive definition1985: Riverside Bayview – adjacent wetlands1985: Migratory Bird Rule – commerce clause2001: SWANCC v. Corps – strikes down MBR2006: Rapanos v. United States – requires ‘nexus’

Jurisdiction after

Rapanos

Mitigation• 1980: EPA issues 404 “Guidelines” describing how

Corps should issue permits– Alternatives analysis (Avoidance), identification of

LEDPA (Least Env. Damaging Practicable Alternative)– Rebuttable presumptions of non-water dependency

and non-aquatic site availability– For remaining significant degradation, “habitat

mitigation”. – “The Mitigation Sequence”: Avoid, Minimize,

Compensate.

The Mitigation Sequence“…no discharge of dredged or fill material shall be permitted unless appropriate and practicable steps have been taken which will minimize potential adverse impacts of the discharge on the aquatic ecosystem. Subpart H identifies such possible steps.” 230.10(d)

“Habitat development and restoration techniques can be used to minimize adverse impacts and to compensate for destroyed habitat.”

Subpart H 230.75(d)

i.e.: Avoid, Minimize, Compensate

Corps v. EPA“It has been our experience that the Corps ignores

application of the Guidelines and regularly issues permits for activities in wetlands which are non-water dependent and for which there are practicable alternatives.”

EPA field staff, 1984

“The Corps will not require mitigation beyond that which is necessary to tip the public interest balance so that issuance of a permit would not be contrary to the public interest.”

Corps Management, 1986

Burying the hatchet

• Attleboro Mall/Sweeden’s Swamp decision affirms the Sequence

• The EPA Guidelines “requir[e] the Corps’ 404 program to protect wetlands and other special aquatic sites from unnecessary destruction or degradation”

General Kelly, 1989

Avoid, Minimize, Compensate

1990 Memorandum of Agreement:• Aquatic resource impacts must be

avoided “to the maximum extent practicable,”

• Unavoidable impacts must be minimized “to the extent appropriate and practicable”

• Remaining impacts must be compensated for “to the extent appropriate and practicable”

Minimization

Compensation• Compensatory Mitigation• “No Net Loss”• Regulatory Failure: Erwin 1991 (FL)

– 33% were built– 6% met “success”

criteria

• 40,000 acres of wetlands restored/preserved for 20,000 acres filled (2005)

Compensation Methods

Restoration35.2%

Enhancement30.0%

Creation20.2%

Preservation14.7%

(ELI, 2006)

Compensation Mechanisms

• Permittee-responsible mitigation (PRM)

• Third-party mitigation– Mitigation Banks– In-Lieu Fee (ILF)

PRM60%

Banks33%

ILF7%

(USACOE, 2005)

The Compensation Rule

• 2001 NRC Report• 2008 Compensation Rule

• “… the Secretary of the Army… shall issue regulations establishing performance standards and criteria for the use… of on- site, off-site, and in-lieu fee mitigation and mitigation banking as compensation for lost wetlands functions in permits issued by the Secretary of the Army under such section.” 2004 DAA 314(b)

Mitigation Plans1. Project objectives2. Site selection factors3. Site protection

instrument4. Baseline information

(at impact site and compensation site)

5. Credit determination methodology

6. Work plan

7. Maintenance plan8. Performance

standards9. Monitoring

requirements10.Long-term

management plan11.Adaptive

management plan12.Financial assurances

Why Wetland Banks?

• Regulatory Failure • Market Rhetoric/Policy

– Entrepreneurial interest– Administration ideology

• Private banks originated with 2nd oil shock, 1981.

• Entrepreneurial: first permit in 1991, first sale in 1994.

Components of a Bank

• bank site: the physical location of the restored wetlands

• bank instrument: the administrative document which establishes ecological criteria for credit release, financial sureties, ecological monitoring, liability, etc.

• service area: the geographic area within which impacts can be mitigated at a given bank;

• mitigation bank review team (MBRT): a team composed of federal agency staff who monitor the site and approve credits for sale.

Proposed wetland bank site in suburban Chicago (6 phases)

Steps in making and using a wetland bank

1. Acquire site2. Prospectus3. Bank Instrument4. Develop site5. Developer applies for permit6. Agency requires compensation7. Permittee purchases credits 8. Credits debited from bank ledger

Income in Chicago wetland creditsGross Income, Chicago District Entrepreneurial Wetland Banking Industry, 1994-2002

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

1994 1995 1996 1997 1998 1999 2000 2001 2002

Data: Bankers. Copyright 2004 Morgan M. Robertson, mmrobertson@w isc.edu 4/04

Landscape changes and

Hotspots

Who purchases credits?

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001 2002

Pe

rce

nt

of

Pu

rch

as

es

fro

m P

erm

its

pe

r P

erm

itti

ng

Au

tho

rity

Municipality

IDNR

County

COE

Lessons: Fragmentation

of Spatial Markets

Composition of Available Credits, Entrepreneurial Wetland Banking Industry, Chicago Dictrict COE, 1994-2002

-20

0

20

40

60

80

100

120

140

Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02

Certif ied Credits

Planting Approved

Hydrology Approved

Presale Approved

Data: Chicago COE and bankers. Copyright 2004 Morgan M. Robertson, mmrobertson@wisc.edu 4/04

Section 401: State Certification

• 281.36 (3b) (b) The department may not issue a water quality certification wetland general or individual permit under this section unless it determines that the discharge authorized pursuant to the wetland general or individual permit will comply with all applicable water quality standards.

2011 Wisconsin Act 118

Safe Drinking Water Act of 1974• Public Health Service Act of 1912 regulated waterborne sources

of communicable disease.

• Establishes strict levels for contaminants in drinking water, far stricter than the Clean Water Act.

• 1984 report identified 200+ contaminants nationwide in drinking water

• 1986 amendments required the EPA to set standards for 25 new contaminants every three years.

• Homeowners get annual reports from water utilities on the state of contaminants in drinking water.

• Newer pollutants: hormones and pharmaceuticals.

Safe Drinking Water Act

• Not a pollution cleanup law; aimed at public water treatment, public health, consumer protection

• Standards made and enforced by Federal government

• Covers many more pollutants than Clean Water Act.

• Creative SDWA settlements have led to considerable environmental conservation: NYC

Lake trout recovery in Lake Superior, 1930-1995.