Locke Lord QuickStudy: EPA Muddies the Water on Permitting Discharges to Groundwater ‎and What the Biden Administration Will Likely Do About It

Locke Lord LLP
January 4, 2021

In a June 2020 QuickStudy, I wrote about the implications of the Supreme Court’s April ‎‎2020 decision in County of Maui, Hawaii v Hawaii for permitting projects that ‎discharge pollutants to groundwater that ultimately impacts navigable waters. In that ‎decision, the Court defined several factors to determine whether discharges to ground ‎water were the “functional equivalent” of discharges to navigable waters and therefore ‎required a National Pollution Discharge Elimination (“NPDES”) Permit. In that ‎QuickStudy, I argued that whether a project required an NPDES permit could have ‎implications for project viability. It could determine whether the United States ‎Environmental Protection Agency (“EPA”) reviews the project permit, whether a project ‎is a major federal action and thus subject to environmental review under the National ‎Environmental Policy Act (“NEPA”) and whether the project must defend the permit in ‎federal court or state court. I suggested that, absent a clarifying rule or guidance ‎published by the EPA, courts would be forced to develop something like a common ‎law of permitting water decisions fleshing out the seven criteria that the Court ‎articulated in County of Maui.‎

The EPA did issue a draft guidance memorandum relating to the County of Maui decision, notice of which was published in the Federal Register on December 10, ‎‎2020. However, instead of clarifying the seven criteria stated by the Court in County of ‎Maui or the application of those criteria, the EPA took seven and half pages to state ‎three truisms and added an additional criteria not stated in the Court’s decision ‎bringing the total number of factors to consider in determining whether a discharge to ‎ground water is the functional equivalent of a discharge to navigable waters to eight. ‎The truisms are that (i) the discharge must actually reach navigable waters; (ii) the ‎discharge must originate at a point source; and (iii) only a subset of discharges to ‎groundwater that reach navigable waters will be the “functional equivalent” of ‎discharges to such navigable waters. While all true, the memorandum did not provide ‎any actual guidance to either permit writers or applicants as to which discharges to ‎groundwater must be permitted under the NPDES program. The guidance did not ‎further explain or clarify the conditions that indicate addition of pollutants to navigable ‎waters. Likewise, it did not state which types of sources should be considered point ‎sources beyond the words used to define point source in the rule.‎

The guidance added to the criteria stated by the Court the consideration of design and ‎performance of the system or facility from which the pollutant is released. Although ‎relevant to some of the key criteria stated by the Court in the County of Maui decision, ‎the memorandum did not state which factors of design performance should be ‎considered in permit decision making nor how they would be factored with the other ‎considerations stated by the Court. Because the period for the public to comment on ‎the memorandum is open until January 11, 2021, it is highly unlikely that EPA will ‎issue a final memorandum prior to the inauguration of President Elect Joe Biden on ‎January 20, 2021. Therefore, the Biden Administration will determine whether to take ‎action on this issue. It is almost certain that they will not finalize the memorandum as ‎drafted nor issue a final memorandum that is based on the draft memorandum.‎

So what might EPA Administrator-designate Regan do in response to the County of ‎Maui decision if confirmed? Although the Biden-Harris platform does not address ‎this issue directly, it does offer clues for how a Biden Administration will approach ‎water permitting for projects under the County of Maui criteria.‎

The Biden-Harris campaign has promised to “build back better.” Throughout their ‎speeches, platform and in their selections of environmental policy appointees, they ‎have emphasized federal government and environmental policy experience and ‎expertise. Expect the EPA to develop a detailed response to the County of Maui decision that attempts to use the tools at EPA’s disposal to implement the County ‎of Maui decision in a way that is consistent with the Administration’s emphasis on ‎clean water, climate change, environmental justice and renewable energy ‎development.‎

As an initial matter, I expect that the Biden EPA will likely rescind the Trump draft ‎guidance. They may try to draft interim guidance but, ultimately, I expect that the Biden ‎EPA will issue a rule regarding the process for permitting discharges to ground water ‎under the NPDES program. I expect that this rule will address issues such as which ‎impacts to navigable waters from groundwater discharges are sufficient to trigger ‎NPDES permitting requirements and what types of data, including modeling and ‎monitoring, are required to track such impacts. Such a rule will likely seek to further ‎delineate between the authority of state governments and the federal government in ‎permitting discharges to ground water. In addition to the criteria stated by the Court in ‎the County of Maui decision, I expect any rule issued by a Biden EPA to seek to ‎ensure that any prospective permit to discharge to ground water is evaluated for its ‎eventual impact to communities of color and communities that have been ‎disproportionately negatively affected by environmental permitting decisions on the ‎past. Likewise, permitting will likely consider both direct and indirect climate change ‎impacts.‎

Industry segments that expect to be affected by such permitting decisions and any ‎guidance or rule developed by the Biden EPA, such as mining, energy and waste ‎water treatment, should consider participating in the guidance or rule making ‎development process to the greatest extent possible. Industry could argue in that ‎process for clarity and streamlined permitting procedures while preserving flexibility to address specific circumstances. Industry could remind rule makers that industry ‎segments such as copper and other metal mining to build wind turbines and electric ‎motors and pipelines to transport bio fuels will be integral contributors to the Biden-‎Harris clean energy transition and that clear but flexible NPDES permitting programs ‎for discharges to groundwater will be an important tool to achieving the Biden-Harris ‎goal of zero net carbon emissions by 2050.‎

Detailed guidance or rulemaking will take some time, at least a year if not two or more. ‎Therefore, prior to rule making, entities that are developing projects with discharges to ‎groundwater should work closely with counsel to prepare a permitting strategy and for ‎litigation once the permitting decision is made. Such entities should use any ‎environmental evaluation process, such as the NEPA or state equivalent review, to fully ‎understand the relationship between any expected discharges to groundwater and ‎potential impacts to navigable waters. Counsel should use this information to develop a ‎comprehensive permitting strategy and a clear theory of the case as to why the ‎discharge is or is not subject to the NPDES permitting program under the criteria in the ‎County of Maui decision.‎