WETLANDS:

Obama proposal would resurrect policy that industry blocked under Bush

In 2006, developers, mining companies and agribusinesses convinced the George W. Bush administration to scale back a proposal that would have widened federal protections for wetlands and waterways in the wake of a muddled Supreme Court ruling on Clean Water Act enforcement.

But just before the release of the regulatory guidance, an industry attorney who had snared a leaked copy objected in emails to the White House.

The Bush administration pulled back the proposal, and the White House Council on Environmental Quality launched a nine-month review. When the guidance was finally released in June 2007, its interpretation of federal regulatory authority was narrower than what U.S EPA and the Army Corps of Engineers had proposed.

Now, the Obama administration is reviewing another Clean Water Act enforcement guidance that would not only replace the 2007 policies but also revive language that industry groups killed in the Bush years.

And there's a new lobbying battle under way, with environmentalists fighting to preserve the language and industry representatives pushing to have it struck.

Groups on both sides have pressed their case in at least 12 meetings with the White House in the past six weeks. More than two dozen industry representatives met last week with officials from the Office of Management and Budget and other agencies.

"There must have been a third of the GDP represented in that room," recalled Don Parrish, senior director of regulatory relations for the American Farm Bureau Federation and one of the officials present.

At the heart of the battle is language that provides protection for small, seemingly isolated wetlands and waters.

The language tries to address Justice Anthony Kennedy's written opinion in the Supreme Court's 2006 Rapanos v. United States. The Clean Water Act explicitly protects waterways that either are "navigable" or, as Kennedy wrote, share a "significant nexus" with one that is (Greenwire, Feb. 7, 2011).

Environmentalists and conservationists say Kennedy would offer protection to "non-navigable" waters if they could be shown to significantly affect the health of a navigable waterway.

For example, they say, dumping fill material or wastes into a tiny creek might have little impact on the large river into which it flows. But dumping waste into several similar creeks across the watershed would have a significant, cumulative impact, they say, so all those creeks deserve protection.

This, they say, is the "aggregation" principle.

"Even the Bush administration initially got it right and recognized that you had to treat all of the waters that are like each other in a watershed the same," said Joan Mulhern, senior legislative counsel for Earthjustice. "When the polluters complained, they took that out, and what the Obama administration is doing is fixing that problem."

But industry attorneys contend that aggregation language mischaracterizes Kennedy's words and seeks to give the federal government broad authority over all waters, regardless of whether a "significant nexus" exists.

"It's the one remaining theory that would kick jurisdiction wide open to cover even isolated waters," said Deidre Duncan, an attorney for the Waters Advocacy Coalition, an industry group. "They are pushing for the broadest, most extreme theory of what aggregation means so that truly isolated waters can come into jurisdiction."

Vigorous debate

To be sure, aggregation is not the only part of the proposed guidance that's at issue for industry and environmentalists.

Industry groups argue that the proposed guidelines would give protection to ditches that connect to navigable waterways, and have a chilling effect on the business community.

"We have some grave concerns there because we think there are a lot of unintended consequences in those proposals, in terms of jobs and the economy," Parrish said.

But aggregation language is without a doubt the provision that could bring the largest swath of streams and wetlands under federal protection.

Attorneys for environmental groups cite three sections of Kennedy's Rapanos decision to support the principle. In the first, Kennedy notes "concern" about non-navigable waters' "aggregate effects on national water quality."

In the second, Kennedy writes that wetlands should be protected "if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect" the integrity of navigable waters.

Finally, greens say, Kennedy asserts that regulators may choose to identify "categories of tributaries" that are significant enough that adjacent wetlands should be considered navigable.

Some of the language in the Obama proposal that establishes aggregation for "waters" borrows almost word for word from the second excerpt of Kennedy's decision. But industry attorneys point out that Kennedy specifically refers to "wetlands." Thus, they say, the aggregation concept should only be applied, if at all, to wetlands -- not tributaries.

Industry attorney Virginia Albrecht raised this issue several times in emails with the Bush administration in 2006, urging officials to strike the aggregation language from their draft proposal.

"First, if it is going to be used at all, it should apply only to wetlands, not to tributaries," Albrecht wrote in an email that environmental groups later obtained through a public records request. "Kennedy referenced this 'similarly situated' notion twice, and then only in the context of wetlands."

Albrecht, who didn't respond to a request for comment for this story, also wrote that projects should be reviewed case by case, using a "two-step" process, to see if they meet the tests set forth in Rapanos.

She added, using bold typeface for emphasis: "The idea is NOT that you add up all the wetlands in the region and see if cumulatively they have a significant effect on traditional navigable waters."

Regulatory confusion

Legal experts on both sides agree that the Supreme Court muddled the Rapanos decision and left the issue open to various interpretations.

But for regulators, the Bush guidance created more of a mess.

Nine months after the Bush guidance was released, EPA's enforcement chief reported that the agency had been forced to drop 347 cases and delay 147 others, according to a 2008 internal agency memo from then-enforcement chief Granta Nakayama.

The "largest burden," Nakayama wrote, stems from the "implied presumption of non-jurisdiction for the most common types of waters in our country" that could only be overcome by a resource-intensive "significant nexus analysis" as described in the guidance.

"The Rapanos decision and the resulting guidance have created uncertainty about EPA's ability to maintain an effective enforcement program with respect to other Clean Water Act obligations," he continued. "This creates uncertainty for EPA and the regulated community as to whether there has been a violation of the Act."

More recent EPA enforcement statistics indicate that the trend continued into the Obama administration (Greenwire, Oct. 25, 2010).

Industry and environmentalists, as well as the Supreme Court, have called on EPA to take the initiative to clarify the extent of federal jurisdiction by launching a formal rulemaking process.

A guidance, unlike regulation, can be issued by an agency at any time. A rulemaking is a far more cumbersome process that requires taking extensive public comment and results in policy that can be challenged in court.

The Obama administration has said it intends to launch a rulemaking after finalizing its "interim" guidelines.

But players on both sides of the debate are skeptical, noting that the Bush administration offered similar assurances but never delivered -- despite warnings about the need for a rulemaking.

In an email to Bush administration officials on Sept. 21, 2006, Albrecht addressed the issue of guidance versus rulemaking on such a complicated issue.

"Don't deal with it at all in the guidance," Albrecht wrote. "After all, it's only Guidance, and 'interim' at that. ... In fact you may recall that my first reaction when you mentioned to me was that this is a subject that should be dealt with through rulemaking. It is so complex."

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