By Daniel L. Timmons

After rejecting revisions to Oregon’s water quality standards last year, a federal court has now approved two related settlements reached among EPA, the Oregon Department of Environmental Quality (ODEQ), and an environmental group that effectively amend the existing standards. Under the new rules, Oregon regulators will no longer have flexibility to deviate from statewide numeric maximum temperature criteria, even for streams that naturally supported healthy salmon populations despite temperatures exceeding the numeric criteria. Oregon’s agricultural and forest products industries may face new compliance challenges as stricter water quality temperature standards are implemented and applied to the activities of these industries. The settlement agreements, however, may be subject to challenge in light of a recent Ninth Circuit decision[1] that limits the ability of federal agencies to use private settlement agreements to modify broadly-applicable regulations. See related article in this edition of the Marten Law Newsletter, M. Conway, D. Timmons, Ninth Circuit Rejects Use of Consent Decree to Short-Circuit Rulemaking Procedures.

Oregon’s Water Quality Temperature Standards

Section 303 of the CWA requires states to set water quality standards that must be approved by EPA. Of critical importance in the Pacific Northwest are maximum temperature criteria established to support salmon, bull trout and other cold-water fish species. With the listing of salmon species and bull trout under the Endangered Species Act in the 1990’s, temperature standards have taken on new importance, and are now a central concern of environmental groups.

When water quality standards are not met on a particular stream, states are required to list the stream as Section 303(d) water quality limited, and to develop Total Maximum Daily Loads (TMDLs) limiting the total discharge to the stream. While EPA has no authority to regulate non-point source pollution under the CWA, TMDLs must be set by states and approved by EPA even on streams impaired only by non-point sources of pollution.[2] Importantly, water quality standards and TMDLs are then used by states to develop programs for the management of non-point source pollution. Thus, EPA’s authority to review TMDLs provides the federal agency with a mechanism to indirectly regulate non-point source activities, such as agriculture and forestry.

Revising Oregon’s Water Quality Standards – Easier Said than Done

The Oregon Department of Environmental Quality (ODEQ) has been discussing revisions to its water quality standards for nearly two decades. In 1996, ODEQ submitted revised temperature standards and other water quality criteria to EPA for approval as required under Section 303(c) of the CWA. After consultation with the National Marine Fisheries Service (NMFS) and the Fish and Wildlife Service (FWS) under the Endangered Species Act (ESA), EPA partially approved Oregon’s standards, but rejected temperature standards for salmonids migrating and rearing in the Lower Willamette River. When neither ODEQ nor EPA took any action to develop new standards, an environmental group, Northwest Environmental Advocates (NWEA) filed suit in the U.S. District Court for the District of Oregon. In 2003, the court ordered EPA to develop its own water quality standards for Oregon. Nw. Envtl. Advocates v. EPA (Nw. Environmental Advocates I), 268 F. Supp. 2d 1255 (D. Or. 2003).

EPA then developed and published draft rules, but the rules were never finalized. See EPA’s Proposed Rule for Water Quality Standards for the State of Oregon, 68 Fed. Reg. 58,758 (Oct. 11, 2003). Instead, after further ESA consultation, EPA approved new water quality standards developed by ODEQ in March 2004. Once again, NWEA challenged EPA’s approval of the standards under the CWA and ESA, and the federal district court again rejected EPA’s approval of certain aspects of Oregon’s water quality standards related to temperature. Nw. Envtl. Advocates v. EPA (Nw. Envtl. Advocates II), 855 F. Supp. 2d 1199 (D. Or. 2012). This case was previously discussed in this Newsletter. D. MacDougal & D. Till, Split Decision on Oregon’s New Temperature Water Quality Standards, Marten Law, Environmental News (Apr. 10, 2012).

Alternative Compliance for Forestry and Agriculture

Among the challenges brought by NWEA was a challenge to Oregon rules that deem compliance with water quality regulations enacted pursuant to the Oregon’s Forest Practices Act[3] and Agricultural Water Quality Management Act[4] to be sufficient to meet the state’s CWA water quality standards. Those statutes and related regulatory requirements already provide comprehensive programs and require “Best Management Practices” (BMPs) to minimize water quality impacts of forestry and agricultural activities. For example, Oregon Department of Forestry (ODF) rules require written plans for operations near waterways, and provide riparian vegetation retention requirements as well as protection measures for springs, wetlands, lakes and other sensitive waters.[5] Under Oregon Department of Agriculture (ODA) rules, local water quality management areas have been created, and local area management plans have been developed to manage agricultural runoff and protect the quality of Oregon’s waters.[6] In recognition of these numerous regulatory requirements already placed upon the forestry and agriculture industries, ODEQ rules provide that compliance with the statutory and regulatory requirements of the Forest Practices Act or the Agricultural Water Quality Management Act is deemed to be compliance with the temperature water quality standards.[7]

NWEA challenged the ODEQ rules, arguing that the ODF and ODA regulations were de facto water quality standards that required EPA review and approval. Alternatively, NWEA argued that even if they were not water quality standards, they must nonetheless be reviewed by EPA because they affect water quality standards. EPA and ODEQ argued that they were not water quality standards requiring EPA approval, but simply detailed activities required for compliance with such standards. Further, EPA argued that it lacks authority to regulate non-point sources of pollution, such as agricultural or forestry practices, and so could not lawfully review these regulations.

The court agreed with NWEA, ruling that although the compliance standards “do not meet the traditional definition of water quality standards insofar as they do not ‘express constituent concentration, levels, or narrative statements, representing a quality of water that supports a particular use,’” they were “intrinsically intertwined with the promulgated water quality standards and have the potential to supplant, or at the very least, delay the attainment of those standards.” [8] The court reasoned that that the challenged provisions could hinder the attainment of water quality standards in the numerous Oregon rivers impaired by nonpoint source pollution because activities contributing to impairment would be deemed to be in compliance with the standards.

The court concluded that EPA has a nondiscretionary duty to review nonpoint source provisions “which are part and parcel of Oregon’s water quality standards, insofar as the provisions affect how, whether, and when those standards apply to bodies of water.”[9] This is potentially problematic, since EPA has no authority to actually regulate non-point source pollution. By requiring EPA to determine with ODEQ’s BMPs for forestry and agriculture are lawful, EPA will arguably be required to make a de facto judgment as to what BMPs are best – a result that could be viewed as an unlawful regulation of nonpoint sources by EPA.

The Natural Conditions Criteria

Also among the standards at issue in Nw. Environmental Advocates II was Oregon’s Natural Conditions Criteria (NCC), which provides that where ODEQ finds that a waterway’s temperature under natural conditions would exceed the numeric temperature criterion, then the less-protective, higher temperature natural conditions are automatically “deemed to be the applicable temperature criteria for that water body.”[10] While EPA approved this criteria based on its understanding that natural temperature conditions historically supported healthy salmonids populations, NWEA argued that the criteria failed to account for other factors that now limit the ability of cold-water fish to survive and recover under a natural temperature profile, including reduced population numbers, habitat degradation, and limited availability of cold water refugia. NWEA also noted that after promulgating the NCC, ODEQ applied it without exception when setting new temperature TMDLs, effectively swallowing the numeric criteria.[11] This widespread use of the NCC allegedly resulted in water quality standards set as high as 90˚ F, compared to the 64˚ F numeric criterion otherwise required for streams designated for salmon rearing and migration.

While narrative criteria are generally permitted under CWA regulations to “supplement” numeric criteria, the court found that the NCC instead “supplants rather than supplements the numeric criteria by allowing Oregon to replace the numeric criteria (determined to be protective of salmonids) with a new numeric standard during the TMDL process.”[12] In effect, the NCC effectively allowed ODEQ to replace the numeric standards approved by EPA with less-protective standards during the TMDL process, unlawfully circumventing the statutory requirement for EPA review and approval of all state water quality standards.[13] Accordingly, the court found that the NCC violated Section 303(c) of the CWA and rejected EPA’s approval of the flexible standard.

The Recent Settlement Agreements

In its February 2012 opinion, the court directed the parties to confer regarding remedies, resulting in an initial settlement of several issues, and a final settlement agreement resolving the remainder of the case. The initial settlement, approved by the court in January 2013, stays EPA’s review of the above-described forestry and agriculture BMPs, and requires ODEQ to propose amendments to the regulatory water quality standards to remove the forestry and agriculture BMPs from being deemed compliance with state water quality standards. If the Oregon Environmental Quality Commission (OEQC) does not pass such amendments, then EPA must review the forestry and agriculture regulations as water quality standards under Section 303(c).

A recent Ninth Circuit case, Conservation Northwest v. Sherman (Conservation Northwest II), No. 11-35729, 2013 WL 1760807 (9th Cir. Apr. 25, 2013), however, may cast doubt upon the validity of this stipulated agreement. See M. Conway, D. Timmons, Ninth Circuit Rejects Use of Consent Decree to Short-Circuit Rulemaking Procedures, Marten Law, Environmental News (May 23, 2013). That case provides that EPA cannot enter into consent decrees that amend effectively amend regulations without going through otherwise required formal procedural requirements, and ODEQ is subject to similar procedural rulemaking requirements under the Oregon Administrative Procedures Act.[14] While the settlement agreement may not technically amend the ODEQ rules, it does define the content of the amendments that ODEQ is required to bring to the OEQC, thereby limiting public involvement in the drafting of the rules. Given the stipulation that EPA will review the rules if OEQC does not amend them accordingly, OEQC may have strong incentive to simply rubber-stamp ODEQ’s stipulated proposed amendments. While the public, including the agricultural and forestry industries, must be given an opportunity to provide comments on the proposed rules, this opportunity comes very late in the process. At the very least, this short-circuited procedure violates the spirit, if not the letter, of the Oregon APA and the Oregon Legislative Assembly’s stated policy that “whenever possible the public be involved in the development of public policy by agencies and in the drafting of rules.”[15]

The final settlement agreement, approved by the court in April 2013, sets aside the NCC and remands it to EPA for review within 120 days under Section 303(c). Given the court’s prior rejection of the criteria as unlawful, EPA will presumably have little choice but to deny approval of the criteria. EPA or ODEQ may then promulgate replacement regulations. For example, new standards might provide that where a natural temperature profile is warmer than the numeric criterion, individual deviations from the numeric temperature criteria could be allowed upon EPA review and approval under Section 303(c). Alternatively, EPA may simply deny any future deviation from the numeric criteria. Affected industries should participate in any rulemaking process to help ensure that any new rules adequately take their interests into consideration.

While the EPA has agreed to once again review Oregon’s NCC and will likely amend or eliminate the provision, the Settlement Agreement provides that it does not “preclude NWEA from challenging any final agency actions taken pursuant to this Order.” Thus, future lawsuits will likely continue to arise as Oregon implements the amended standards through TMDLs for individual streams and development of management programs for achieving water quality goals.

Conclusions

Water quality temperature standards in the Pacific Northwest will remain a hot-button issue, particularly for non-point sources, such as agriculture and forestry. With the Supreme Court’s recent decision in Decker v. NEDC confirming that forest roads are not required to receive discharge permits under the CWA, see M. McCurdy, No Permit Required for Stormwater Discharges from Logging Roads, Supreme Court Rules; Attention Shifts to EPA Rulemaking, Marten Law, Environmental News (Mar. 25, 2013), the forest products industry should expect environmental groups to look closely at state-level BMPS and other regulations designed to address non-point source runoff.

While ODEQ has historically provided that compliance with BMPs provided under ODOF and ODA regulations was sufficient to demonstrate compliance with water quality standards, ODEQ must now propose amendments to its regulations to eliminate these exemptions. With continued efforts to restore listed salmonids and heightened attention on forestry and agricultural practices as non-point sources of thermal pollution, these industries should be prepared for new efforts by ODEQ to implement BMPs or other regulatory requirements designed to implement water quality temperature standards, including standards that may require improvement over natural conditions.

For more information, please contact Daniel Timmons or any other member of Marten Law’s Water Quality practice group.