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WOTUS and Alaska: issues with the latest rule of the Clean Water Act.

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The Clean Water Act rule Waters of the United States (WOTUS) was issued in June 2015. That same month Alaska joined twelve other states in suing the Environmental Protection Agency (EPA) and the US Army Corps of Engineers over the new rule. RDC (Resource Development Council for Alaska, Inc.) Executive Director Marleanna Hall says this lawsuit against the federal government, along with several from other states, is awaiting a ruling by the Ninth Circuit Court. In January of this year, President Barack Obama vetoed a congressional resolution that would have overturned the rule.

So for now, the highly contested rule remains and may be around for the long haul. The history of WOTUS starts with the 2006 court case Rapanos v. United States, an environmental case challenging federal jurisdiction to regulate isolated wetlands under the Clean Water Act. The US Supreme Court had a three way split: four, four, and one, the one being Justice Anthony Kennedy. AOGA (Alaska Oil and Gas Association) Environmental Counsel Joshua Kindred summarized Kennedy's opinion: "What he basically said is, 'I'm not for unfettered discretion and absolute jurisdictions, but I do think [the EPA] has some discretion'; and he used the term 'significant nexus.' He sort of established they'll have jurisdiction if there's a significant nexus to traditional navigable waters."

Significant Nexus

And that leads directly to one significant WOTUS issue--as Kindred put it, "Significant nexus isn't necessarily a legal term." While on an individual, lay person level the term may seem clear and intuitive, legally it's not. Based on this term, within the WOTUS rule the EPA assumed that there would be many waterways that automatically pass the "significant nexus test," for example tributaries to rivers and streams that "aren't necessarily navigable in the traditional sense, but they go right into navigable waters; therefore the test is passed," Kindred says. "But then the other problem is they built that significant nexus test into the rule itself," he continues.

So immediately the EPA assumed a certain amount of expanded jurisdiction, and then issued a new rule containing legally ambiguous language that allows room for even further expansion. "The ruling is another example of federal overreach, which Alaska must continue to push back on," Hall says. There is a lot of potential in the rule for additional oversight, Kindred says: "It's going to call into question a lot of areas that have never been under the jurisdiction of the Clean Water Act and the EPA."

But what areas were previously under the jurisdiction of the EPA? Hall explains that, before the WOTUS rule, "the EPA has the authority to require assessments, such as an Environmental Impact Statement, to determine findings of potential environmental impacts. Through these processes, the EPA has some jurisdiction over navigable wa ters. However, in Alaska, navigable waters are under the State of Alaska's jurisdiction."

Alaska has a lot of water, navigable and otherwise. According to Hall, "Alaska contains approximately 174 million acres of wetlands, 65 percent of the nation's total, with nearly 80 percent of the state underlain in permafrost ... Alaska has 63 percent of the nation's jurisdictional waters and is one-fifth of the US land mass."

Operations and activities on Alaska's coast such as in Cook Inlet or in the Chukchi Sea were subject to EPA oversight before WOTUS, as well as many of the wetland areas on the North Slope, but not every body of water is so cut and dry. Kindred says, "Invariably, every rule is going to have some gray area, but [previous to WOTUS] you knew where that grey area was ... if you're working right off a navigable water or right off wetlands, you might imagine, 'OK, this is going to be a judgement call." But now it's kind of open to everything. That grey area is now everything." Hall agrees, saying, "In fact [WOTUS] has created more uncertainty."

Jurisdictional Expansion

Where in Alaska is there not water? The vastness of our water resources combined with a rule that's almost entirely grey areas is deeply concerning. Hall says, "RDC is concerned about the potential vast consequences the proposed rule will have on Alaska because our immense wetlands and permafrost." Since significant nexus isn't a legal or technical term, does that mean any time any project encounters any type of water that the EPA has jurisdiction, simply because all water eventually flows together? If a project requires digging a ditch that may fill seasonally with standing water that will eventually drain into a navigable water system--does that ditch now fall under EPA jurisdiction? "I think that's the fear: that if [the EPA] wants they can really get into anything through the Clean Water Act with this expansion of jurisdiction," Kindred says.

It's also important to remember that EPA is not the only regulatory body in Alaska. It's not as if large projects, outside an area of navigable waters and wetlands, are allowed to simply run rampant through remote Alaska drilling and building and developing at a whim. The Alaska Department of Environmental Conservation has a specific Division of Water, which regulates wastewater activities including domestic and municipal wastewater, storm water, industrial wastewater, cruise ship wastewater, and seafood processing wastewater. A pivotal question becomes: does the involvement of the EPA increase environmental protection, or does it just cost more time and money? Kindred says, "A lot of times you see projects and they have local regulations, they have state regulations, they have federal regulations, and the vast majority of it is duplicative in nature."

Additionally, it's important to keep in mind that Alaska's resource development is done by private companies. "Regardless of how you feel about a project being sanctioned, you want to ensure that the rules were followed and the process was followed. What we're seeing more and more is that before we [the oil and gas industry] can even get to these stages of establishing that we've done the science, we've done the research, we have a plan ... our legs are being cut out from under us," Kindred says. There can be several responsible, safe ways to approach a project. Kindred argues that shutting down the possibility of a project before the viability is really established dampens innovation and halts projects that, perhaps, could have been revamped to be both economically and environmentally viable.

WOTUS Rule Concerns

Also, according to Kindred, many have expressed concerns about the WOTUS rule itself, "both in process and constitutionality." Hall says that "EPA's analysis for the definition of WOTUS rule making did not include adequate analysis of Alaska," a sentiment that Kindred has seen expressed in various briefs and articles about WOTUS. "They talk about, did they collaborate enough with the states in coming up with this rule; did they follow the right process through Congress." That's separate from ideas of constitutionality. "This represents the third or fourth time that EPA has tried to have a massive expansion of their jurisdiction under the Clean Water Act, and each time it's sort of been brushed back or beat back by the US Supreme Court." Kindred says, "I think everyone is under the understanding or assumption that this is going to get resolved at the circuit level and then go to the US Supreme Court." At that point, he says the outcome isn't certain. For one, the court is comprised of different justices now, but additionally, there's no real certainty as to if the WOTUS rule is what Kennedy was envisioning with his previous decision, Kindred says. "[WOTUS] is their attempt to satisfy Kennedy's rational in Rapanos, but they're going to get a different opinion just by the fact that there are different justices."

Kindred doesn't believe that this will be the end of the jurisdiction discussion. "You can look back historically, and this jurisdictional fight I don't think is ever really going to end. I think EPA is going to continue to push--even if WOTUS gets beat back, they're going to take another bite a the apple."

'Unreasonably Burdened'

Both AOGA and RDC are organizations that want Alaska's economy to remain strong. RDC's purpose is "to encourage a strong, diversified private sector in Alaska and expand the state's economic base through the responsible development of our natural resources. AOGA's mission is to "foster the long-term viability of the oil and gas industry for the benefits of all Alaskans." This change in the federal regulatory process interferes with all development in Alaska, especially a regulation that has such a wide scope. "If it was an isolated incident it would be more of an annoyance, but I think it's a cumulative effect of trying to navigate this ever changing regulatory scheme," Kindred says. He raises the point that while permits granted before regulatory changes are often "grandfathered in," that still doesn't exactly provide certainty that a project can move forward. If a permitted project has to make a small modification or adjustment, does the permit now fall under a whole new review process?

Kindred continues, "It's a confusion and uncertainty that causes some unrest in development, because it's one thing if you know you're going to have to pay X amount of dollars: but when you say, 'I don't know how much money, and I don't know how long it'll take, and I don't know if it'll ultimately be sanctioned'--that causes investors to get cold feet."

Hall says that WOTUS is likely to impact Alaska's economy negatively, saying, "RDC is concerned the rule will result in disproportionate impacts to Alaska, and the agencies should address the flawed economic analysis described in the rule. RDC's members, from oil and gas to maritime, Alaska Native corporations, and rural communities, will be unreasonably burdened by this proposed rule. Alaska and other states should have the authority in regulating land use practices and protections, not the federal government."

Kindred is clear that industry isn't looking for loopholes to operate dangerously or irresponsibly: "Often times we'll push back on some kind of federal legislation, and the public narrative is always that we're against regulation; but no, we just want to make sure it's scoped correctly ... If we feel you're just asking us to jump through hoops that don't actually offer any protection, then we'll push back. I think that the US Army Corps of Engineers and EPA would be hard pressed to establish what greater protection this is going to offer."

Kindred says a large part of the negative reaction to WOTUS may be the scale of the WOTUS rule. "[WOTUS] is going to affect construction, it's going to affect farming, it's going to affect oil and gas and mining. There's nobody who really escapes this, and I think that's why you see such a large national push against it, because everybody is in the same boat."

Tasha Anderson is an Associate Editor for Alaska Business Monthly.
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Title Annotation:ENVIRONMENTAL SERVICES; Waters of the United States
Comment:WOTUS and Alaska: issues with the latest rule of the Clean Water Act.(ENVIRONMENTAL SERVICES)(Waters of the United States )
Author:Anderson, Tasha
Publication:Alaska Business Monthly
Geographic Code:1U9AK
Date:May 1, 2016
Words:1800
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