Obama Administration Finalizes New “Waters of The U.S.” Rule

On May 27, 2015, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) released a pre-publication version of the much anticipated and controversial final rule revising the definition of waters of the United States for purposes of the Clean Water Act, 33 U.S.C. §§ 1251-1387. The final rule will be effective 60 days after its publication in the Federal Register and will be considered "issued" for purposes of judicial review, in accordance with 40 C.F.R. Part 23, at 1 p.m. eastern time two weeks after publication in the Federal Register.

This rulemaking has generated a great deal of attention and controversy. The definition of “waters of the United States” is the measure of the agencies’ jurisdiction to regulate under the CWA. See e.g. 33 U.S.C. § 1362(7) and (12). According to the agencies, the rule is designed to clarify the definition in light of United States Supreme Court’s determinations that attempts to regulate waters under the existing regulatory definition exceeded the bounds of the agencies' jurisdiction.See Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) and Rapanos v. United States, 547 U.S. 715 (2006). The general fact sheet on the final rule states that the final rule ensures “that waters protected under the Clean Water Act are more precisely defined, more predictable, easier for businesses and industry to understand, and consistent with the law and the latest science.” In doing so, the agencies made key changes from the proposed rule designed to clarify which waters, beyond those traditionally considered “navigable,” are jurisdictional. However, these changes are perceived by the regulated community as attempts to expand of CWA jurisdicton.

The final rule does not alter the regulatory definition of waters of the United States as it pertains to navigable waters, interstate waters, the territorial seas, or impoundments thereof. These waters continue to be jurisdictional waters. However, the new rule provides definitions for two additional categories of waters—tributaries and adjacent waters—that are deemed jurisdictional without the need for a case-specific determination and a third category—other waters—that will be considered jurisdictional based on case-specific determination that the water has a “significant nexus” to a traditional navigable water, interstate water or territorial sea. The final rule departs significantly from the proposed rules in defining these categories of waters:

Tributaries – The final rule defines “tributary” as “a water that contributes flow, either directly or through another water” to a navigable water, interstate water, or territorial sea (the traditional jurisdictional waters) and is “characterized by the presence of the physical indicators of a bed, bank and ordinary high water mark.” In the final rule the agencies deleted the reference to wetlands, lakes and ponds as being “tributaries,” but retained language from the proposed rule that troubled many industry groups, clarifying that evidence of a bed, bank and ordinary high water mark did not have to run continuously to the downstream traditionally jurisdictional water for a water to be considered a tributary. In addition, the agencies added new language to the definition that provides that a water does not lose its status as a tributary just because it contributes flow through a non-jurisdictional water.

Adjacent Water – The final rule defines “adjacent” as “bordering, contiguous, or neighboring” a navigable water, interstate water, territorial sea, impoundment thereof, or tributary thereto. In a departure from the proposed rule, which defined “neighboring” to include waters “located within the riparian area or floodplain of a [jurisdictional water] or waters with a shallow subsurface hydrologic connection or confined surface hydrologic connection to such a jurisdictional water,” the final rule limits the definition of “neighboring” to waters that are within 100 feet of the ordinary high water mark or are both (1) within the 100-year floodplain and (2) within 1,500 feet of the ordinary high water mark of the jurisdictional water. A water can also meet the definition of “neighboring” if it is within 1,500 feet of the high tide mark of a traditional navigable water or territorial sea.

Other Water – The final rule also significantly departs from the proposed rule in defining the category of waters that can be deemed jurisdictional on a case-specific basis. In the proposed rule, any water that was determined to be “alone, or in combination with other similarly situated waters, located in the same region have a significant nexus to a [traditionally jurisdictional water]” would be a jurisdictional water. However, in the final rule the agencies provide that 5 specific types of waters and “all waters within the 100-year floodplain of a [traditionally jurisdictional water] or within 4,000 feet of the ordinary high water mark or high tide line of a traditionally jurisdictional water or impoundment thereof" are jurisdictional if a case-specific analysis demonstrates the water has a significant nexus to a traditionally jurisdictional water. The final rule also clarifies that in conducting the significant nexus analysis, “adjacent waters” should not be included as similarly situated waters to the water(s) being analyzed.

In addition, the final rule clarifies and expands the list of waters that are excluded from the definition of waters of the United States over the list provided in the proposed rule. The final rule specifically includes (1) waste water recycling structures, detention and retention basins and groundwater recharge basins and (2) erosional features such as “gullies, rills, and other ephemeral features that do not meet the definition of tributary, non-wetland swales, and lawfully constructed grassed waterways.” The rule also clarifies that ditches:

  1. that are not a relocated tributary or excavated in a tributary and have ephemeral flow,
  2. that are not a relocated tributary, excavated in a tributary, or drain a wetland and have intermittent flow, or
  3. that do not flow, either directly or through another water, into a navigable water, interstate water or territorial sea

are not waters of the United States.

While the changes to the regulatory definitions between the proposed rule and the final rule should assuage some of the concerns the regulated community raised during the public comment period, the final rule retains much of the problematic language. For example, although the final rule includes a specific list of functions performed by the water that should be evaluated in assessing whether the water has a significant nexus to a [traditionally navigable water], it retains the language that the effect of these functions is significant if it is “more than speculative or insubstantial.”

Department of the Interior News

BLM Issues New Fracking Rules 

BLM promulgated new hydraulic fracturing rules for oil and gas operations on federal and tribal lands on March 26, 2015 (80 Fed. Reg. 16128). The new rules require rigorous reporting, monitoring, and performance standards to protect surface and groundwater. The Hydraulic Fracturing Rule was immediately challenged by the State of Wyoming in the United States District Court for the District of Wyoming. Wyoming v. U.S. Dep’t of the Interior, Case No. 15-cv-43 (filed March 26, 2015). Colorado and North Dakota have been granted intervention as petitioners, and Utah has indicated its intention to join the lawsuit as a petitioner as well. The states feel the rule generally encroaches on state sovereignty and will harm state revenues from federal oil and gas leases. Wyoming and Colorado filed a motion for preliminary injunction against implementation of the rule last week. In a related case, two associations representing the oil and gas industry have challenged the rule and filed a preliminary injunction, requesting that the court delay implementation of the rules until after a decision on the merits of for petitioners’ claims.

Special Status Species News

FWS Proposes New Rule On Listing Petitions

On May 18, the U.S. Fish and Wildlife Service (FWS) released a proposed new rule imposing additional procedural requirements on listing petitions. The rule would require any entity planning to petition to list a species as threatened or endangered to first notify the state or states in which the species can be found at least 30 days before submitting the petition. It would also bar multi-species listing petitions, requiring that each species be covered by its own petition. The proposal is an attempt to address growing criticism of the petition process and the ability of specific non-governmental organizations to force a reallocation of FWS resources by filing listing petitions covering tens or hundreds of species triggering mandatory statutory and regulatory deadlines under the ESA.

The proposed rule, which can be found here has not yet been published in the Federal Register. Once published, the public will have 60 days to comment.

FWS Takes Measures to Facilitate Reintroduction of Black-Footed Ferrets in Wyoming 

The FWS is seeking comment on a proposal to designate the State of Wyoming as a special area for the reintroduction of experimental populations of black-footed ferrets, which are currently listed under the federal Endangered Species Act as endangered. The FWS hopes the proposal will pave the way for future ferret reintroductions in the state by increasing management flexibility and lessening regulatory requirements for private landowners who agree to have ferrets reintroduced on their property. Noreen Walsh, Regional Director of the Service’s Mountain Prairie Region stated, “Private landowners are key to the success of the black-footed ferret recovery effort,” although participation in the reintroduction program will be entirely voluntary.

The public comment period closes June. 9, and the FWS proposal can be found here.

Sage Grouse News

BLM and U.S. Forest Service Release Final EISs for Sage Grouse RMP Amendments

On May 28, BLM and the U.S. Forest Service released 14 long awaited Final Environmental Impact Statements (EIS) covering amendments to 100 resource management plans (RMP) governing millions of acres of federal land in 10 states. Secretary Jewell made the announcement at the Wyoming Hereford Ranch near Cheyenne. The proposed management plans outlined in the Final EISs include slightly different requirements for each state. However, the overarching goals are to minimize surface disturbance activity to avoid habitat fragmentation, improve existing grouse habitat, and reduce the threat of wildfires. Each RMP would establish a multi-tiered landscape approach, concentrating protection on “sagebrush focal areas” (about 16.5 million total acres) that will be essentially off limits for development. Priority habitat management areas would receive the next priority and would be managed to avoid or minimize disturbance. The last category, general habitat management areas, would provide the most flexibility for development. The plans grandfather existing grazing allotments and valid, existing oil and gas leases. New oil and gas leases in priority habitat will require directional drilling. Solar and wind renewable energy facilities are also encouraged to be located outside priority habitat.

The release of the Final EISs begins a 30-day public protest period and 60-day governors’ consistency review. The agencies have committed to finalizing the RMPs in late summer. The proposed RMPs and Final EISs can be found here.

Changes to Wyoming’s Core Areas Spark Controversy and Compromise

Over the last two months, the Wyoming Sage Grouse Implementation Team (SGIT) has considered revisions to the state’s core areas as well as the Executive Order directing management of activity in core habitat—the core area policy. Governor Mead has committed to revise the core area policy by August of this year.

In April and May, the SGIT considered a proposal to expand the core area near Pinedale to encompass recently documented winter habitat. The proposed expansion would cover the area in which Jonah Energy has proposed the Normally Pressured Lance natural gas well field for which BLM has begun a National Environmental Policy Act review. On April 16, Jonah Energy announced it would suspend all interim development for its planned well field until BLM completes its NEPA review and considers impacts to the sage grouse population in the area. The decision to suspend exploratory drilling was notable given the FWS’s impending decision whether to list the bird, and claims that the wintering habitat in the project area is some of the best in the state.

On May 12, the SGIT determined it would not recommend adding the area in and around Jonah Energy’s proposed natural gas project as core area. Instead, the SGIT announced it would propose guidelines for managing important winter habitat (winter concentration areas) both inside and outside of core habitat. The SGIT met again on May 27 and recommended that the core area policy be revised to prohibit development—oil and gas activity, in particular—in winter concentration areas until more studies can be completed. The SGIT estimated it could take six months to a year to finalize recommendations for winter habitat.

The SGIT also recommended changes to give the oil and gas industry more certainty for development of leases issued between 2008 (the date of the first sage-grouse Executive Order) and 2015. The current core area policy only exempts leases on which drilling approvals had been obtained prior to 2008. The recommendations would expand the exemption to areas currently under lease, even if applications for permits to drill have not been filed.

The SGIT’s core area recommendations will now be submitted to Governor Mead, and the Governor is expected to make a final decision in August. The SGIT’s proposed recommendations and other sage grouse information can be found on the Wyoming Game and Fish website.

House Passes Bill to Delay Sage Grouse Listing for Ten Years 

On May 15, the U.S. House of Representatives voted to bar any action to list the sage grouse under the ESA for 10 years. The provision was attached to a “must-pass” National Defense Authorization Act (HR 1735). Sponsors explained that the delay is necessary to avoid disruption of military operations on military installations in or near species habitat, while others debated the military benefit of the bill and decried the House’s decision. No action has been taken on the bill in the Senate, although commentators expect that the Senate will reject the listing delay provision. To track the status of HR1735, go here.

Western Governors Submit Sage Grouse Conservation Inventory to the Service 

In April, the Western Governors’ Association released the 2014 inventory of measures adopted to conserve greater sage grouse in eleven western states. The report highlights effective conservation work undertaken by public, private, and non-governmental organizations. The Western Governors point to the magnitude of voluntary conservation and cooperation that is ongoing across the region and argue that, “if allowed to run their course,” these measures will be sufficient to maintain viable sage grouse populations and are enough to avoid the need to list the species. The Western Governors assert that a decision to list would only undermine the enormous efforts presently underway. Specific conservation highlights include 350,000 acres of new conservation easements in Colorado, Idaho, and Montana; a Nevada Habitat Conservation Plan developed by the Nevada Mining Association covering 1.2 million acres; and the reclamation of over 400,000 acres of sage grouse habitat under the Department of Agriculture’s NRCS Sage Grouse Initiative.

New Studies Show Sage Grouse Habitat and Population Declines 

In April, the U.S. Geological Survey released a new study finding that a warming climate could become the biggest threat to sage grouse in parts of Wyoming. The study shows that as climate patterns change, sagebrush habitat will become more vulnerable to fire, insects, and disease, with an eventual shift in some areas to bare ground. The study predicts that a warming climate could reduce sage grouse nesting habitat in southwestern Wyoming by 12 percent by 2050.

Another study commissioned by the Pew Charitable Trust, and conducted by a professor at the University of Idaho considered current sage grouse population trends. The study found that sage grouse populations declined 56 percent between 2007 and 2013, leading some biologists to conclude that the sage grouse is at greater risk than was originally thought. Critics of the study point to the cyclical nature of sage grouse populations and note that sage grouse populations actually rose in 2014 over 2013 up to 40 percent in some areas.

State News

Wyoming Oil and Gas Conservation Commission (WOGCC)

Commission Finalizes Setback Rule

The Wyoming Oil and Gas Conservation Commission adopted new rules governing setbacks of oil and gas drilling operations from occupied structures. The new rule requires a 500’ setback from any occupied structure from the center of the well bore. The rules give the WOGCC Supervisor the ability to increase or decrease the distance for various reasons. If either the operator or the owner disagree with the Supervisor’s decision on altering the setback or failing to alter the setback, the parties would have a right to appeal the decision to the Commission. In addition to the 500’ setback, the operator is required to provide certain information to the owners of occupied structures within 1000’ feet of the well bore. In addition to information on timing, the operator must also provide a description of its management practices to mitigate reasonably foreseeable impacts. Mitigation measures must consider noise, light, dust, orientation of the drilling pad, and traffic. Finally, operators must file a report with the Supervisor within 15 days of construction of the pad. The report must detail the actions taken by the operator to provide information to the owners of occupied structures. The report must also include any comments the operator received from the owners. Finally, the report must contain information regarding the best management practices and mitigation measures. The Supervisor has the ability to order additional mitigation measures.

Wyoming Department of Environmental Quality (WDEQ)

DEQ Names New Land Quality Administrator 

On April 21, 2015, Wyoming Department of Environmental Quality Director, Todd Parfitt, named Kyle Wendtland as the new Administrator for the Land Quality Division. Kyle has previously owrked for Cloud Peak as an Environmental Engineer and Manager. In that job, he was instrumental in receiving awards for reclamation work by the company.

Air Quality Division Releases Strategy for Upper Green River Basin 

The Wyoming Department of Environmental Quality released an updated Ozone Strategy for the Upper Green River Basin (UGRB) on April 28, 2015. “We have gone four winters (2012, 2013, 2014, 2015) without an ozone exceedance,” said Todd Parfitt, DEQ Director.

The Ozone Strategy identifies four activities to be accomplished by the end of September 2015:

  1. WDEQ-AQD will provide an annual status update to EPA on voluntary Ozone Advance efforts.
  2. A report on the UGRB Winter Ozone Study for January – March 2015 will be completed.
  3. WDEQ-AQD will review and evaluate impacts for the UGRB from EPA’s recently released implementation rule to guide State Implementation Plans for ozone.
  4. WDEQ-AQD will review and evaluate the impacts of the EPA memo of January 22, 2015, regarding ozone modeling and transport assessment.

In addition, WDEQ-AQD will continue work on an oil and gas emissions inventory, a produced water ponds study, and reviewing the results of the WDEQ-AQD produced water tank study to inform control strategies, permitting, monitoring, and modeling.

Finally, WDEQ-AQD continues to work on rules targeting reductions from existing upstream and midstream oil and gas emission sources (including flash emissions from tanks, emissions from dehydration units, leaks from pneumatic pumps and pneumatic controllers, and fugitive emissions). Phase I of such rulemaking is expected to be completed in September of 2015.

Click here to read the updated Ozone Strategy.

Water Quality Division Considers Changes to Water Quality Rules 

The Wyoming Environmental Quality Council (EQC) will consider revisions to the Water Quality Rules and Regulations (Regulations) at a hearing beginning at 9 a.m. on July 8, 2015 in Room 1699 of the Herschler Building, 122 W. 25th Street, Cheyenne, Wyoming. The proposed revisions will streamline the Regulations by: 1) moving the contents of Chapters 13 and 16 to a new Chapter 27; 2) editing redundant passages in Chapter 27; and 3) reserving Chapters 13 and 16. The Department is also proposing minor corrective revisions to Chapter 8, Section 6. Copies of these proposed rule revisions can be found here under Docket #15-3102.

A second hearing will commence at 10 a.m. on July 8th at the same location for the EQC to consider proposed revisions to Chapters 15 and 25 of the Regulations. These revisions will: 1) move the contents of Chapter 15, Appendix C to the new Appendix B in Chapter 25; 2) update design requirements and correct inconsistencies in Chapter 25; and 3) reserve Chapter 15. Copies of these proposed rule revisions can be found here under #15-3101.

In order for the Department to consider responses, written comments must be received by 5 p.m. (MDT) on June 24, 2015. Written comments should be sent to the Wyoming Department of Environmental Quality/Water Quality Division, 122 West 25th Street, Herschler Building – 4W, Cheyenne, Wyoming 82002. Email comments will not be considered. The Department will file responses to comments with the Council prior to the July 8th hearing. Oral comments focused on the proposed rule revisions will be considered at the hearings.

Wyoming Water and Waste Advisory Board Set to Consider Rule Changes 

The Wyoming Water and Waste Advisory Board (WWAB) met May 7, 2015 in Casper, Wyoming to consider proposed revisions to Water Quality Rules and Regulations Chapter 24, Class VI Injection Wells and Facilities, Underground Injection Control Program. The objective of the proposed revisions is to incorporate grammar and punctuation corrections from the April 18, 2014 WWAB meeting and to incorporate liability insurance requirements and financial assurance requirements for carbon sequestration injection wells from Wyoming Statute § 35-11-313 and from federal requirements found at 40 CFR 146.85.