WETLANDS:

Oil industry threatens Obama admin over Clean Water Act guidance

Some of the biggest names in the oil industry -- Exxon Mobil Corp., Marathon Oil Corp. and the American Petroleum Institute -- have waded into the fight to stop the Obama administration from strengthening Clean Water Act regulation of streams and wetlands.

The three oil heavyweights met with White House officials last month and threatened legal warfare if the administration proceeds with issuing new guidance on Clean Water Act rules that would increase the number of wetlands and streams subject to federal pollution regulation and permitting.

The oil industry adds significantly to the pressure already being applied by the homebuilding, agriculture and mining industries -- all of which dispatched lobbyists to the White House in January -- to back off a proposed policy they say exemplifies the sort of onerous regulation that President Obama recently pledged to eliminate.

"The limits of Clean Water Act jurisdiction is a complicated and contentious issue that has been subject to decades of litigation," the American Petroleum Institute (API) said in a memo its representatives delivered to the White House Office of Management and Budget. The proposed guidance is "not the correct approach and will lead to even further litigation and confusion," it added.

The pressure appears to be having some effect. The Obama administration has fallen weeks behind schedule in releasing its draft of the Clean Water Act guidance, causing nervous environmental and conservation groups to wonder about the cause of the delay.

"I can only speculate regarding the holdup and would rather not," Jan Goldman-Carter, wetlands and water resources counsel for the National Wildlife Federation, said in an email.

U.S. EPA said the draft guidance, which was due out last month, remains under review at the White House Office of Management and Budget.

"We are committed to a transparent process for developing this guidance that includes the opportunity for public review and comment, and intend to release the draft packages for comment as soon as possible," the agency said in a statement.

The message Exxon Mobil, Marathon Oil and API took to the White House in their March 1 meeting was that issuing guidance -- essentially, a reinterpretation of a provision in the 1972 law -- is "inappropriate" for clearing up widespread legal and regulatory confusion over which waters, streams and wetlands are subject to federal pollution protection.

Both industry and environmentalists are urging EPA to undertake the longer, more difficult process of writing an entirely new regulation, although environmental groups are supportive of the guidance as an essential interim step to immediately begin boosting Clean Water Act protections.

Of course, the two sides have a very different end game in mind: Environmental groups ultimately want to see new water protection regulation that would cement in place any clean water protections achieved in the new guidance. Industry groups want EPA to skip the guidance -- which they would undoubtedly litigate -- and move into the rulemaking process, where they will make a case that strengthening federal regulations will result in far more cost and economic drag than benefit to the environment.

Long-running confusion

The oil industry's stake in the debate centers on laws governing oil storage and spills -- which dictate liability and spill prevention requirements -- that rely on the Clean Water Act's definition of what constitutes federally protected "waters of the United States" -- the very definition that the Obama administration's guidance or rulemaking would seek to clarify.

"Our basic concern really comes down to the basics of what are 'waters and the U.S.,'" said Khary Cauthen, director of federal relations for API. "The confusion that this new guidance throws into the mix, with a clearly broadened definition of 'waters of the U.S.,' will make our operations more difficult."

In its memo to the White House, API said: "If EPA chooses to pursue rulemaking, it will be imperative to ensure that it is adequate and appropriately considers all pertinent benefits and costs/impacts as inadequate rulemaking would be equally problematic."

The legal and public debate over what waters deserve federal protection grew out of two difficult-to-interpret Supreme Court decisions -- SWANCC v. U.S. Army Corps of Engineers in 2001 and Rapanos v. United States in 2006 -- that industry says placed limits on federal jurisdiction and that environmentalists say created confusion that only regulators or Congress can clear up, with either legislation or new rules.

Repeated attempts at a legislative fix have failed to advance, prompting EPA to move forward with its guidance policy, which was sent to the White House for review in December (E&ENews PM, Nov. 16, 2010).

The guidance would supplant two previous Clean Water Act guidance policies the George W. Bush-administration EPA issued in 2002 and 2008. Critics say those dovetailed with the Supreme Court rulings to roll back pollution protections on 20 million acres of wetlands and tens of thousands of miles of streams -- all of which flow into and have the potential to poison much larger water bodies and drinking water aquifers.

EPA has said the confusion stemming from the Supreme Court decisions and Bush-era guidance policies has forced it to delay or drop hundreds of water pollution investigations, even as pollution rates have risen. The agency's Clean Water Act criminal enforcement stats have steadily nosedived (Greenwire, Oct. 25, 2010).

Supporters weigh in

Arguments that new guidance would be an "inappropriate" mechanism for clarifying the legal definition of U.S. waters do not wash with Ben Grumbles, who led EPA's water office during the George W. Bush administration when the previous guidance policies were released.

"There's a need for greater predictability and consistency that rulemaking and legislative clarification can provide. But in an area as complicated as 'waters of the U.S.' jurisdiction, there is a need for some type of guidance -- interim guidance or something -- because it's very easy to get conflicting interpretations and to get lost in the weeds and to come out with contrary views," said Grumbles, who now heads the Clean Water America Alliance, a coalition of water industry leaders aimed at solving the nation's water problems. "My view is that some form of guidance is necessary."

Environmentalists and hook-and-bullet groups have likewise lobbied the White House, delivering a letter to administration officials in December. More recently, they have pointed to overwhelming public concern for clean water: A March 28 Gallup poll shows Americans worry most about threats to clean water among nine major environmental issues, outranking air pollution, species extinction and global warming.

Fourteen senators led by Maryland Democrat Ben Cardin urged President Obama to move forward with the new Clean Water Act guidance in a letter sent March 31, after the White House review deadline for the new policy lapsed and nothing had been released.

"It is critical that the guidance developed and approved by your Administration provide strong protection for our nation's waters and restore the ability of the Federal agencies to enforce the Clean Water Act," the senators wrote. "We hope that the actions the administration will propose will provide needed clarity and certainty so that the ultimate goals of the Clean Water Act can be met."

Opponents, however, warn of the dire economic consequences that would stem from an Obama administration Clean Water Act guidance. The Waters Advocacy Coalition -- a group of agriculture, homebuilding and mining interests opposed to the policy -- told EPA Administrator Lisa Jackson and Jo-Ellen Darcy, assistant secretary of the Army for civil works, that "such an overly broad view of jurisdiction would create significant problems," in a letter sent April 4.

"It would almost invariably be a hindrance if not an outright barrier to economic growth," the letter said. "It would almost certainly result in both a permitting and enforcement tangle. It would switch the burden from the government to the individual to demonstrate that a particular feature is not a 'water of the United States.' And given the history of the CWA [Clean Water Act], it would undoubtedly increase litigation and expenses for the regulated community and regulatory agencies."

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