Dec. 5 --Subjecting an additional 3 percent of U.S. waters and wetlands to Clean Water Act regulation would yield nearly twice as much in benefits as it would cost affected industries, according to a cost-benefit analysis of a draft rule obtained by Bloomberg BNA.
A joint analysis by the Environmental Protection Agency and the U.S. Army Corps of Engineers shows that the benefits of implementing the draft rule asserting Clean Water Act jurisdiction over the nation's waters and wetlands would range from $300.7 million to $397.6 million annually, while the costs would be between $133.7 million and $200 million.
According to the analysis, obtained Dec. 4, the greatest costs would be incurred by developers, mining companies (coal and other resource extraction), landowners and other permit applicants. These parties could be required to mitigate losses of wetlands and streams and to obtain dredge-and-fill permits and stormwater runoff permits under the draft jurisdiction rule.
Also incurring costs under this draft rule would be state and local governments, which would have to invest in infrastructure, and state and federal agencies that would have to process more permit applications for pesticide spraying near covered waters and stormwater discharges. In addition, state and federal regulators would have to conduct more certifications to ensure that certain activities do not cause water quality standards violations, according to this analysis.
States would neither incur nor avoid costs in reporting impaired waters, the analysis said, even though the draft jurisdiction rule includes previously unregulated ephemeral and intermittent streams.
Some of the key estimated annual costs in the analysis:
• Stream mitigation: $8.7 million to $13 million;
• Wetland mitigation: $51 million to $100.5 million (benefits estimated at $257.6 million to $345.1 million);
• Dredge-and-fill permit applications: $19.7 million to $52.9 million;
• Dredge-and-fill permit administration: $7.4 million to $11.2 million;
• Construction stormwater permit applications: $25.6 million to $31.9 million (benefits estimated at $25.4 million to $32.3 million);
• Construction stormwater permit administration: $0.2 million.
The agencies estimated the benefits of protecting headwaters of larger navigable rivers, associated wetlands, and other open waters based on expected improvements in marine and land-based wildlife habitat and related biodiversity, as well as enhanced recreational and fishing opportunities. The analysis suggested that these waters and wetlands also provide benefits by helping to filter sediment and other pollutants, reducing flooding, stabilizing shorelines and preventing erosion, recharging ground water and recycling nutrients.
Above all, the agencies emphasized that the draft rule would reduce the need for costly jurisdictional determinations in areas where the federally protected status of wetlands and waters was unclear.
The EPA was the primary author of the “Economic Analysis of Proposed Revised Definition of Waters of the United States” document, and the Corps of Engineers was a contributor. The agencies sent the analysis along with the draft rule clarifying Clean Water Act jurisdiction over the nation's waters and wetlands to the White House Office of Management and Budget for an interagency review Sept. 17 .
In the federal government's 2014 regulatory agenda, the EPA indicated that it would release its proposed jurisdiction rule in December 2013 following a 90-day interagency review.
Jan Goldman-Carter, senior manager for the National Wildlife Federation wetlands and water resources division, said that date is likely to be pushed back as a result of the government shutdown.
Under the draft rules, the agencies would be authorized to assert Clean Water Act jurisdiction over all natural and artificial tributary streams, lakes, ponds and wetlands in floodplains and riparian areas that affect the chemical, physical and biological integrity of larger, downstream navigable waters.
The agencies would also be allowed to exercise Clean Water Act jurisdiction over wetlands and streams that are adjacent, neighboring or separated from jurisdictional wetlands or waters by artificial berms.
Moreover, the proposed rule would allow the agencies to determine on a case-by-case basis whether geographically isolated wetlands and certain other waters in the uplands have a significant nexus to the chemical, physical and biological integrity of downstream waters and should be considered jurisdictional.
“The agencies expect that the outcome of the proposed rule will be an approximate 3 percent increase in assertion of jurisdiction when compared to 2009-2010 field practices,” the analysis said.
Before 2001, the agencies said, “almost all waters were considered the waters of the United States,” but two U.S. Supreme Court decisions on the issue, and ensuing field practices, have limited the government's jurisdiction (Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps of Eng'rs, 531 U.S. 159, 51 ERC 1838 (2001); Rapanos v. United States, 547 U.S. 715, 62 ERC 1481 (2006)).
In the analysis, the EPA said the revised definition of the “waters of the United States” in response to U.S. Supreme Court rulings since 2001 would impose no direct costs. Rather, the revised definition would result in indirect costs to state and local governments as well as regulated entities that rely on this definition to implement a variety of Clean Water Act programs.
The fact that a water is covered by the Clean Water Act has implications for permitting of pollution discharges from construction sites, filling of wetlands and streams, certifications by states that activities such as dam-building or other federally permitted activities don't harm water quality, identification and reporting of impaired waters by states, and cleanup of oil spills.
Don Parrish, senior regulatory relations director for the American Farm Bureau Federation, criticized the EPA analysis, saying it is difficult to understand how the agency came up with the costs.
“Show us the data that shows that jurisdiction on a state-by-state basis will only increase by 3 percent,” Parrish said.
He said the agencies have “exceedingly low-balled costs” because they failed to give any justification or indication of the increase in costs to other sections of the Clean Water Act programs, other than the dredge-and-fill program.
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The “Economic Analysis of Proposed Revised Definition of the Waters of the United States” is available at http://op.bna.com/tpif.nsf/r?Open=rran-9e442y.
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