CHAPTER 7 DEVELOPMENTS IN NPDES PERMITTING

• Jurisdiction: United States

Water Quality & Wetlands Regulation and Managment in the Development of Natural Resources
(Jan 2002)
CHAPTER 7
DEVELOPMENTS IN NPDES PERMITTING
FREDRIC P. ANDES
BARNES & THORNBURG
ROCKY MOUNTAIN MINERAL LAW FOUNDATION Special Institute on Water Quality and Wetlands

January 25,2002

Over the last few years, there have been several significant changes in the requirements that apply to holders of National Pollutant Discharge Elimination System (NPDES) permits. Further changes are coming in the next several years. In general, these changes mean that wastewater dischargers, including mine operators, will be subject to additional effluent control requirements. These requirements can lead to substantially compliance costs, running into millions of dollars for some individual operations. Also, operators can be faced with constraints on new and increased discharges, which will constrain economic growth and opportunities to expand and modify facilities to respond to business needs. While some impacts on operations may be inevitable, it is possible to minimize these risks through careful planning in advance. In some cases, those companies may derive substantial economic advantages over those that do not avail themselves of the significant opportunities that will be presented.

Much attention has been paid lately to one of the programs under the Clean Water Act: the "total maximum daily load" or TMDL program under Section 303(d) of the Act.¹ This program has generated considerable controversy, largely because it is perceived that this program will lead to control requirements for agricultural operations and other "nonpoint" sources that have not been regulated before under the Act.² Yet, the most immediate and direct impact of the TMDL program will likely be felt by NPDES dischargers. Over time, it is likely that many, if not most, of the effluent limits in NPDES permits will be based on water quality-based determinations made by States and EPA in developing and implementing TMDLs. These TMDL determinations will often be made years before the sources' next permits are issued. This means that the dischargers will need to treat the TMDL development process as the initial stage of their permitting procedures, and participate to the extent needed to fully protect their interests, just as they would if their permit limits were being issued.

Just as the TMDL program addresses "impaired" waters, which are not meeting water quality standards,³ there is an analogous program to address waters

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that have water quality that is better than standards - the "antidegradation" program.⁴ Like TMDLs, this program has been largely ignored for a number of years, but has significant potential to evolve into a major regulatory program with significant impacts on NPDES sources. Basically, the antidegradation requirements are intended to ensure that new or increased discharges to these "clean" waters cannot occur unless and until the applicant makes demonstrations concerning imposition of available controls and concerning the socioeconomic value of the project.⁵ Applied strictly, this program could slow down or stop economic growth, and could prevent companies from implementing needed changes at their operations in order to survive financially.

In addition to the TMDL and antidegradation programs, other Clean Water Act requirements will also be factors influencing NPDES permits in the future. For example, there has been a pronounced trend toward issuance of increasingly stringent water quality standards, and issuance of these standards for a broader range of pollutants and parameters. In addition, there is greater interest in development of new kinds of standards, including for sediment contamination and for stream biological health. These new and stringent standards will ultimately lead to imposition of discharge limits that are intended to lead toward attainment of the standards.

Even with these new standards, new permit requirements may not be limited to those needed to reach these standards. Based on the Endangered Species Act (ESA),⁶ the U.S. Fish and Wildlife Service and National Marine Fisheries Service have been getting more involved in regulatory and permitting decisions made by EPA and the States under the Clean Water Act. The Services generally contend that even if discharge requirements are sufficient to meet water quality standards, they may need to be made stricter in order to adequately protect endangered or threatened species or their habitat.

In addition to these various new substantive restrictions on point source discharges, there are also significant trends in the procedural area. For example, the "general permit" concept has been coming under increased attack. This mechanism for dealing with large numbers of relatively minor discharges as a group, rather than individually, has been a very valuable and commonly used tool for permitting of mining operations. However, there have been a number of recent instances where discharge-specific restrictions have been imposed on facilities covered by general permits, due to TMDL procedures, antidegradation requirements, or other water quality-based concerns. These new requirements have the potential to detract

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greatly from the value of the general permitting process, and to deter many dischargers from use of this process.

While many of the new requirements discussed above could prove onerous, they are moving forward and cannot readily be avoided. Therefore, it behooves regulated parties, including those in the mining industry, to carefully assess how their operations may be affected, and to take the actions needed in order to manage these risks successfully. In order to assist in this process, this article summarizes each of the significant recent Clean Water Act developments, evaluates possible impacts, and provides some recommendations as to how and when dischargers should take action to make these requirements more reasonable.

I. TMDL PROGRAM

The TMDL program has its origins in one of the provisions of the Clean Water Act that was enacted in 1972.⁷ Section 303(d) of the Act specifies that each State must develop a list of those waters that, after imposition of technology-based control requirements under other provisions of the Act, do not meet the State's water quality standards.⁸ Then, for each of those waters, and for each pollutant that does not meet standards, the State must establish total maximum daily loads sufficient to meet the standards.⁹

As an example, a waterbody may be subject to a water quality standard for copper of 10 milligrams per liter (mg/l). If the ambient levels of copper in the waterbody are 15 mg/l, then the water is not meeting the copper standard, and the water must be included on the State's 303(d) list as impaired for copper. Then, the State must do a TMDL for copper This will involve, first, assessing current loadings to the water from all sources, including background levels. This might be, for instance, 100 lbs./day. The State would then need to determine what amount of total loadings could be accepted by the water and still have the water get to and stay in attainment of the 10 mg/l standard. The State might determine that this number is 30 Ibs./day. This number is the "total maximum daily load" for copper for that water. After deriving this number, the State needs to figure out how to divide the total loading among the various sources. The State might decide that one industrial source will be allocated 4 lbs./day, that a municipal source will be given 6 lbs./day, that nonpoint sources (including air emissions) will be given 5 lbs./day, that the background levels will be 10 lbs./day, that 3 lbs./day will be applied as the "margin of safety," and that the remaining 2 lbs./day will be set aside for possible future growth.

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The State has now completed the TMDL derivation process. The TMDL must be submitted to EPA for approval.¹⁰

The reason why the TMDL process is so important to NPDES dischargers is that the loading allocations developed in that process must be incorporated into the dischargers' permits.¹¹ The industrial source that receives a wasteload allocation of 4 Ibs./day in the above example will be given a permit limit for copper of 4 lbs./day the next time its permit is renewed. Actually, it is possible that its limit will be lower than 4 lbs./day. For this reason, the TMDL process becomes a surrogate for the permit issuance procedure, often taking place years before the permit is actually issued. If the permit holder does not participate in the TMDL development process, it will find that it has likely lost the principal opportunity to influence the setting of many of its permit limits.

When dischargers do participate in the TMDL process, they need to remember that there is an initial threshold issue that determines whether they need to participate at all: whether the water is identified as "impaired" on the State's Section 303(d) list. A TMDL is only required if the water is included on that list.¹² However, there is no guarantee that waters included on those State lists actually have ambient pollutant levels that are above relevant water quality standards. In many cases, States have put waters on their 303(d) lists based on limited data sets, incorrect or unvalidated data, or no data at all. In addition, waters are not listed only because they exceed numeric standards for particular pollutants; they can also be listed because they allegedly violate State "narrative" standards, such as that waters must be "free from toxics in toxic amounts." (Note, though, that several courts have found substantial due process concerns in State decisions to list waters based on narrative standards.¹³ ) Thus, it is quite possible for dischargers to contest...