Eastern District of Louisiana orders EPA to act on nutrient rulemaking petition

Eastern District of Louisiana orders EPA to act on rulemaking petition

 On September 9, 2013 the Eastern District of Louisiana ordered EPA to address the Gulf Restoration Network’s rulemaking petition on nutrient levels in the Mississippi River and Gulf of Mexico. Following Massachusetts v. EPA, the court ordered the EPA to respond within 180 days. See Decision here  - http://switchboard.nrdc.org/blogs/aalexander/SJ decision.pdf

Environmental Regulatory Overload

October 2013


Keith W. Turner

Watkins & Eager
Although most people think of the 1960’s and 70’s as the beginning of the environmental movement, the United States actually began to implement environmental laws as early as the late 1800’s. Whether in response to deaths resulting from raw sewage entering drinking water sources in the 19th century or excessive smoke from burning wood in London in the 1300’s, society has responded with specific laws to improve human health and the environment. In recent years the United States Environmental Protection Agency (USEPA) has been creating new environmental laws and revising existing laws at concerning rate. Many of the more recent regulatory responses to environmental issues have not resulted in significant benefits as compared to those from the 1800’s or even from the 1970’s. This is probably due to the fact that many early USEPA regulations were aimed at easily seen problems. For example, Lake Erie, which was once a rainbow of colors from water pollution that resulted in fish kills. Due to environmental protection focused on the Great Lakes, there is now a much healthier environment for both the fish and humans. Another reason for less benefits from recent environmental regulations is many regulated entities cannot keep up with the compliance demands and having been unable to comply. In fact because of the inability to comply with new regulations some would argue we are going backwards in certain areas of environment protection.


I am not suggesting that we reconsider environmental protection. Great strides have been made in improving our environment and cleaning up past mistakes. Nor am I writing in support of eliminating the USEPA or the state counterparts. We all have benefited from the significant improvements as a result of our environmental laws, regulations and the efforts of those people responsible for implementing the programs. With that said, what I am advocating is that the ongoing effort to make environmental laws and regulations more stringent be carefully considered with respect to the financial ability of the regulated community to comply with existing and future regulations. In addition, I am also advocating that all regulators consider not levying high monetary penalties for paperwork violations that were not real threats to the environment. Creative nonmonetary penalties should be considered in such cases particularly now that our country is just beginning to show signs of economic improvement. With limited public and private funds, what is spent on environmental protection needs to be carefully prioritized.

There are three general areas impacted by environmental regulations and excessive enforcement penalties: general economic health, private sector businesses and public sector facilities. The scope of general economic impacts is beyond my areas of expertise but I can provide examples of

impacts facilities in the private and public sectors will be suffering as a result of future environmental regulations and enforcement. First, let’s consider the private sector. Most if not all, of our industrial facilities have permits, approvals and other necessary regulatory controls in place to protect air and water and to address waste. Many have specific environmental staff whose only job is to keep up with environmental reporting, testing and documentation. Even with these financial commitments, there is now an enormous amount of compliance so certain reports and documents may be overlooked particularly in transition times with respect to changing staff or new regulations. These paperwork violations often result in enforcement actions by the USEPA and/or the states. Enforcement should be designed to encourage regulated entities to comply and also to assist them in understanding what is required. When intentional noncompliance is discovered, it should result in significant penalties. On the other hand, private sector businesses should not be burdened with significant penalties for paperwork violations when there is no actual harm or threat to the environment or human health. For example, USEPA recently fined a Mississippi business for not submitting its annual report to the local fire department and state emergency agency. It should be understood that the business had reported in prior years so the fire department and state agency had full knowledge of the hazardous materials stored at the facility, (which was the intent of the law). Nevertheless, USEPA demanded thousands in penalties. How does that benefit the local community, the state or the country? Under the same environmental law another Mississippi business had to pay over a $100,000 in fines because it also missed an annual report. In that case, the storage of diesel fuel was the hazardous material subject to the reporting requirement. There are many other examples of environmental laws that require significant penalties for noncompliance with routine paperwork. In many of these cases, enforcement actions do not result in tangible improvement of environmental protection.

Over the past few years the USEPA has pursued greenhouse gas regulations with vengeance. As a result, state environmental agencies and thousands of industries are challenged with new regulations for greenhouse gases. The financial burdens placed on both the state agencies and the private industry is significant. And this is just the beginning. Without choosing sides in the greenhouse gas debate one only needs to look to the recent greenhouse gas regulatory and litigation history to understand that the agency jumped without thinking how this enormously complex issue should be addressed. Meanwhile, we have an expanding set of greenhouse gas requirements placed upon the business community which can be used against them in an enforcement matter. Is this the best use of society’s financial resources when most of our cities cannot meet their existing water and wastewater needs due to aging and failing infrastructure?

In the public sector there many examples how we have lost prospective on environmental protection. One of the best examples is recent and expanding Clean Water Act regulations impacting our cities sewage treatment facilities. Throughout the country we have aging water and sewer infrastructure. Many systems are decades past needing replacement but there is just not enough local, state or federal monies available. In Mississippi, there are estimates of several billion dollars just to repair our drinking water infrastructure. There are USEPA programs to help with this problem but they are a blip on the radar compared to what is needed. So are we passing laws to help out communities ? No, instead the federal government continues to implement regulations that will result in these

communities either having to spend millions they do not have or be in noncompliance and fined hundreds of thousands. The USEPA under the Clean Water Act is expanding the requirements of our local communities to remove nutrients from its wastewater. From a pure environmental approach this is a good idea. But when you consider the costs and difficulty of implementing these programs it is clear that the cost benefit is not justifiable at this time. Currently there are several legal battles on this issue in Florida and the Mississippi River Basin. The outcome of these cases will have significant impact businesses and communities that have treated wastewater that eventually flows into the Gulf of Mexico. Early estimates for Florida to comply with the new nutrient regulations are between $2 billion to $4 billion. For most Mississippi communities the future costs of complying with nutrients regulations are not a concern, because they cannot afford to pay for their current wastewater problems. Without some sort of freeze on implementing new regulations each state will have to find billions of dollars to address these new standards. This is in addition to the billions needed right now to fix our aging infrastructure. Many of the older systems in our country are not able to comply with the existing limits and certainly cannot meet these new limits without expensive upgrades. With tight federal and state budgets there is no money available to help these communities upgrade their plants to comply with lower limits. Jackson, Mississippi is struggling with what could be over a $400 million dollars to repair the wastewater collection system and treatment plant. There are no easy sources for this money. In Jefferson County, Alabama the county spent over $3 billion on fixing the sewer problems. It was this debt that help contribute to the county filing for bankruptcy. Several years ago Baton Rouge Louisiana was expected to spend just under $500 million on sewer repairs. That number has grown to over $1 billion. On the east coast and the Midwest where cities have a combined storm water and sewer system the problems can be even more expensive. Just recently Philadelphia PA announced a $2 billion program to address these combined flow problems. The majority of these costs will likely be borne by the individual ratepayer. Paying today for what has been ignored for decades.

What will compliance cost under future regulations if we keep on the current path ? Many cities are already in noncompliance with the existing regulations with no hope of funding to fix their problems. Moratoriums on new home and commercial construction and restrictions on locating new industries or preventing them from expanding are the likely outcomes. Not to mention bankruptcy or turning wastewater treatment plants over to the federal or state. Pursing these environmental improvements are worthy causes. But if we cannot afford to pay for current environmental protections, why spend more money implementing rules that cannot be met under the current financial conditions. Environmental activists groups should be more concerned with finding funding for these broken down systems and less on demanding enforcement actions and resulting penalties. Some estimates have placed the national sewer infrastructure needs at $300 billion, without considering the potential costs arising from the proposed new regulations. Compare this to the annual USEPA construction budget of $2 billion for funding sewer and water infrastructure. An American Society of Civil Engineers ("ASCE") report states just the annual budget for upkeep of the nation’s systems is over $90 billion. What about the Recovery Act monies ? Of the $840 billion only $9 to $10 billion was spent on water and sewer infrastructure repairs.

A temporary moratorium on the implementation of new regulations is necessary to allow our economy time to recover. We need also to be aware that many of the expanding environmental demands today and in the future are not from new regulations but from implementation of regulations past several years ago. Many environmentalists claim we will lose ground on improving our environment if we slow or halt the environmental regulatory process. What we must all fear is going backwards on environmental protection due to the public sector quietly causing more pollution (billions of gallons of raw sewage each year) being dumped into our streams and rivers as aging water and wastewater systems fail.

What we all must be concerned about is the recovery of our small and medium sized businesses and county and municipal governments. Forcing them to pay penalties for paperwork violations that do not threaten or harm the environment and passing new regulations that they cannot comply with is not assisting this recovery or helping the protect the environment.