WATER POLICY

Obama admin OK'd controversial rule over experts' objections

The Obama administration has sold its controversial new water rule as protecting vital streams and wetlands based on sound science, deep technical expertise and solid legal principles.

The federal government's on-the-ground experts disagree.

According to documents obtained by Greenwire and interviews with former Army Corps of Engineers leaders, the agency's top brass has argued behind the scenes that changes made in the final version of the rule will significantly limit the reach of the Clean Water Act, potentially leaving as much as 10 percent of water bodies that feed communities' drinking water supplies and are important for fish and wildlife no longer protected from pollution.

In fact, the corps disagreed so strongly with the joint U.S. EPA-Army rule that it requested all references to the agency be removed from the rule and supporting documents.

Experts at the corps, which is responsible for the vast majority of the calls about whether a creek or marsh warrants federal protection under the 1972 law, contended that the new limits under the rule are arbitrarily drawn, supported neither by science nor by law, and will be unworkable on the ground.

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In an April 27 memo to the political official who oversees the corps, the agency's top commander for civil works, Maj. Gen. John Peabody, said that even after the rule had been sent to the White House for final interagency review, the corps continued to have "serious concerns" about several aspects of it.

"The rule's contradictions with legal principles generates multiple legal and technical consequences that, in the view of the Corps, would be fatal to the rule in its current form," he wrote to Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy, a Pentagon-based political appointee.

In the memo, Peabody suggested that corps staff felt cut out of the process for developing the rule, which was driven by EPA and Darcy's office. He indicated that his agency only received a copy of final changes made to the rule after it had been sent to the White House and objected to the rule being described as a joint endeavor of EPA and the corps.

But Peabody's concerns apparently were not addressed by May 15, when he wrote a second memo to Darcy's office.

After getting a copy of the agencies' technical and economic analyses underpinning the rule -- which were partially based on raw data provided by the corps -- the agency's experts had determined that those documents were fundamentally flawed, too, he wrote.

"Our technical review of both documents indicate[s] that the Corps data provided to EPA has been selectively applied out of context, and mixes terminology and disparate data sets," Peabody's second memo states. "In the Corps' judgement, the documents contain numerous inappropriate assumptions with no connection to the data provided, misapplied data, analytical deficiencies, and logical inconsistencies."

Again, he asked that the corps not be identified as a co-author in the final documents.

That Peabody put his concerns in writing is highly unusual, according to a former corps leader who has followed the ongoing imbroglio.

"It's unbelievable that the corps would be openly critical of a policy decision by the assistant secretary," the former leader said. "Any public official welcomes input into these decisions, but generally once the decision is made, everybody works to carry it out. That's our system and is certainly the system in the military."

Like all current and former officials interviewed for this story, the former corps leader spoke on the condition of anonymity because of the sensitivity around the issue and the corps' general policy of staying out of the political fray.

The corps memos were shared with Greenwire on the condition that the documents not be published. It is unclear whether they will be made part of the administrative record for the rulemaking, or whether they are obtainable under the Freedom of Information Act.

A second former corps leader said the corps took the extraordinary step of sending the memos because the agency wanted to get on the record saying not only that its experts disagreed with the rule, but that they did not think it would work in the field.

To be sure, responsibility for policy decisions lies with Darcy's office, while the corps is charged with applying those policy decisions on the ground.

"During the rulemaking process, the Office of the Assistant Secretary of the Army for Civil Works received and considered legal, technical and policy input from the corps," Army spokeswoman Moira Kelley said. She noted that pending litigation limits the department's ability to comment.

A spokesman for the corps declined to comment, including on whether any changes made to the rule between the draft version sent to the White House and the version officially finalized in June had allayed its experts' concerns. But the final language in several key areas of the rule that had raised worries for the corps appears not to have changed from the draft version.

EPA spokeswoman Monica Lee said by email that "all concerns" were addressed before the rule was finalized.

"As with any multiagency rulemaking, the EPA and Army/Corps worked closely and carefully to make sure that all concerns surrounding the Clean Water Rule were addressed before finalization," she said.

Now, the corps' unusually vocal disagreement with its policy bosses raises questions about the technical grounding of the rule and the process by which it was developed.

Those questions open the door to new legal arguments under a number of environmental laws and on procedural grounds at a time when dozens of states, industry groups and environmentalists have already filed suit over the rule.

The revelations also stand to add new political fire to the ongoing legislative brawl over the rule on Capitol Hill.

Both the House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee have received copies of the memos from the Army in response to information requests. Today, EPW Chairman James Inhofe (R-Okla.) argued in a letter to Darcy that information in the memos underscores his concerns about the process by which the rule was developed.

Scathing legal review

But the picture painted by the corps documents stands in stark contrast to the prevailing narrative by political opponents of the new rule, who contend it is a vast expansion of federal Clean Water Act authority driven by an overreaching EPA.

Instead, the documents show that it was corps leaders, in most cases, who were arguing for broader federal authority as final revisions were being made to the rule.

Facing fierce opposition from agricultural groups, municipal officials, the construction industry, congressional Republicans and some farm state Democrats, the Obama administration made key changes in the final rule that officials said were aimed at responding to concerns raised about the proposed version.

Among those changes: a first-ever geographical limit, beyond which wetlands and ponds are deemed too far-flung from the tributary network to warrant federal protection. In most cases, that outer-most boundary is 4,000 feet from the nearest tributary.

Another change, which the corps argues was dropped into the rule the day that it was sent to the White House for review, added language that exempts wetlands near waterways that are currently in agricultural use from being automatically covered under the law.

Exemptions for ditches -- a key area of concern for a number of critics -- were also altered.

But a scathing legal review from the corps' top lawyer for environmental issues accompanying Peabody's April 27 memo concluded that, without fixes to these new limitations, the rule would be "legally vulnerable, difficult to defend in court, difficult for the Corps to explain or justify, and challenging for the Corps to implement."

The lawyer, Lance Wood, called the 4,000-foot limit particularly arbitrary. In fact, he wrote that EPA had initially proposed a 5,000-foot outer boundary, and then three days later changed it to a narrower 4,000-foot limit.

The Obama administration has officially estimated as much as a 4.65 percent increase in federal jurisdiction under the final water rule. But a technical analysis from the corps' regulatory chief, Jennifer Moyer, concluded that as much as 10 percent of wetlands that had previously been covered by the Clean Water Act would be out of reach due to changes in the final rule.

Moyer's analysis includes a dozen examples of wetlands, ponds and other waters that have been federally protected under current practices but would not be under the new rule.

For instance, the corps identified 300 acres of wetlands and a 100-acre pond in Clarksville, Tenn., that had been deemed by the corps to be covered by the Clean Water Act because they were known to drain into the Red River through sinkholes. But the wetlands are at least 10,000 feet from the channel of the river -- far outside the new geographical limit, the corps analysis states. Meanwhile, a change in the final rule that does not allow lakes and ponds to be considered tributaries would knock the pond out of Clean Water Act protection, according to the corps analysis.

But because the corps has not been consistently collecting data on the distance between water features and the nearest river channel, it simply does not have the information to know how many such lakes, wetlands and ponds across the country would no longer be protected under the rule, Moyer wrote.

To better understand the potentially sweeping consequences of the changes made between the proposed and final versions of the rule, Peabody and his staff argued that an environmental impact statement was required under the National Environmental Policy Act.

Such detailed analysis can take more than a year, though, and with the Obama administration racing to get the final rule out the door before summer, only a less detailed environmental assessment was done. That assessment found the rule would have no significant impact on the environment, and thus that no further study was needed.

The corps' analysis also raises a number of issues with the agencies' economic justification and technical support for the rule.

For instance, the agencies officially estimate that the rule could bring more than $500 million in benefits. Those benefits were in large part based on wetlands and stream restoration work that Clean Water Act dredge-and-fill permits require to be done in order to offset damage done to wetlands and streams elsewhere.

But Moyer argued that those benefits were based on a significant overestimate of the amount of restoration work that would be required under the new rule. In some instances, the official analysis predicts restoration work will be required six times more frequently than the corps has required in the past, according to her memo.

The key question now is how the corps memos could play into the court battles over the water rule that are already shaping up across the country.

The documents stand to offer both ammunition and potential downsides to a range of litigants.

In substance, the corps' concerns dovetail closely with arguments still being hammered out by environmental groups that are challenging the rule as too weak. The agency's memos could offer them a road map for arguing against the stricter limits set under the final rule and key exemptions.

But the process concerns that the corps memo raises could open the door to arguments calling for the entire rule being struck down. In that way, the documents could end up empowering states and industry groups that are challenging the rule for the exact opposite reason.

At a minimum, the divergence of views over the rule stands to cause problems as government lawyers set out to defend it before a judge.

"Of course [the Department of Justice] is going to defend it, and they're going to rely a lot on the corps counsel and the Army counsel, and I guess it would be very interesting to watch the three of those counsels come to some kind of defensible position now," the second former corps leader said.

But the first former corps leader said the memos could end up playing either way in court.

On one hand, the argument could be made that the administration acted arbitrarily by overruling the corps' experienced concerns. On the other hand, it could be argued that the documents make the final policy decision look stronger, having been made after considering the corps' full-throated views, the former leader said.

"It's unseemly, for sure; but how damaging is it? There are different views," the former leader said.

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