Can EPA Get the Lead Out Amid Deregulatory Fervor?

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By David Schultz

The EPA faced no shortage of criticism in the wake of the Flint, Mich., drinking water crisis, both for its slow response and for the weaknesses of its lead contamination standards. And among those pointing out the flaws in the agency’s lead standards was, in fact, the agency itself.

Even before the Flint crisis came to light, the Environmental Protection Agency had acknowledged the flaws in its standards that govern how water utilities must manage their lead pipes and had been been working for years to beef them up.

However, despite these years of work, and despite the intense urgency around the issue after Flint, these new lead standards may never see the light of day. They ultimately may end up getting snared in the White House’s deregulatory fervor, according to environmental activists and water industry insiders.

Cost Offsets

One of the first actions of the new Trump administration was to issue a new set of constraints on agencies that require them to offset the costs of new regulations by repealing or revising existing ones.

The updated lead standards are expected to impose tens of billions of dollars in costs on water utilities and others because they will likely require the replacement of lead pipes nationwide. Scott Biernat, director of regulatory affairs with the Association of Metropolitan Water Agencies, said it’s hard to imagine where the EPA could find enough offsets for a rule that costly.

“Removing the [lead pipes] is the only guaranteed, long-term solution,” he told Bloomberg BNA. “It’s going to be very difficult. It’s going to be a tough lift.”

Neither the EPA nor the White House responded to requests for comment for this story.

The Lead and Copper Rule

The EPA’s Lead and Copper Rule is the primary tool for regulating lead in drinking water. First issued in 1991, it requires water utilities to put in place measures that prevent the corrosion of lead pipes and to monitor lead concentrations in their water. Additionally, the rule lays out what actions utilities must take if those concentrations go above a certain threshold.

That threshold, set at 15 parts per billion, has been a source of contention ever since the rule first took effect. The EPA developed it with feasibility in mind, primarily looking at how much water utilities could practically reduce their lead concentrations. But the agency has acknowledged that, from a health perspective, drinking water should ideally contain no lead at all.

Lead is a highly toxic metal that can affect nearly every system in the body. When children are exposed to even small amounts, it can cause irreversible cognitive and neurological problems.

Another criticism of the Lead and Copper Rule is that it largely focused on what measures utilities should take to prevent the corrosion in lead pipes, but did not force the utilities to replace them in most circumstances.

However, even though the 1991 rule stopped short of forcing water utilities to remove all lead pipes, the monitoring and corrosion control requirements it imposed were significant. According to the EPA’s own estimates, complying with the the Lead and Copper Rule costs utilities more than $1.1 billion a year, more than for any other drinking water contaminant rule.

Fixing the Rule

Drinking water regulators at the EPA are aware of both of these criticisms and have indicated that their update would address them—an update they’ve been working on since 2014 when they asked agency advisers to look at the issue.

They also took the unusual step last year of issuing a white paper that outlined their current thinking on the update, even though they’ve said they won’t formally propose the update until later this year.

The EPA is working on a new health-based standard that would be tied to how lead-contaminated water affects children and other vulnerable populations. It has assembled a group of peer reviewers to look at the science of how lead concentrations in water influence lead levels in blood.

In addition, the EPA said in its white paper that it’s considering making mandatory lead service line replacement a part of the update.

Lead was largely phased out of new plumbing materials in the U.S. decades ago, but millions of homes still have lead fixtures or service lines that transport drinking water from the mains in the street. A survey last year published in Journal AWWA pegged the number at more than six million across the country, with the highest concentrations in mid-sized towns in the northeast and the Great Lakes regions

As a result, the agency acknowledged that, with the cost of replacement ranging anywhere from $2,500 to $8,000 per pipe, the nationwide total for this mandate could be as high as $80 billion.

Though federal loans and grants could defray some of these costs, the lion’s share would be borne either by utilities, which may then pass them on to ratepayers, or by homeowners in cases where the lead pipe is on private property—or some combination of the two

Two-for-One

This would be a difficult task for any agency to enact, even without the Trump administration’s new deregulatory policy known as “two-for-one"—essentially a requirement to kill two regulations for every new one issued. The policy, laid out in a Jan. 30 executive order, also requires the agencies to offset the costs of any new regulations by repealing other regulations that currently impose equal costs.

In the past, conservative governments in other countries, such as the U.K. and Canada, have implemented similar constraints. Their purpose is typically to force regulators to change the way they think about costs, according to Jerry Ellig, an economist at George Mason University’s Mercatus Center who previously worked in the George W. Bush administration.

“The logic of the idea is really to give agencies an incentive to go back and look at existing regulations to see which ones might not be working and which ones impose very high costs relative to benefits,” he told Bloomberg BNA.

Is It Legal?

However, others fear that the ultimate effect of these constraints will be to prevent federal agencies from issuing any new rules—especially those concerning environmental regulations, which often come with high costs and with benefits that are hard to quantify.

Rena Steinzor, a University of Maryland professor who specializes in regulatory law, said the two-for-one order may also be illegal.

She said most of the regulations that agencies have issued in the past were mandated by law and can’t be repealed simply to satisfy the requirements of an executive order.

“To say you killed a rule for insincere reasons, you’re just doing it to propose a new rule, is not something that’s a part of administrative law,” Steinzor told Bloomberg BNA.

Lead Exemption?

The two-for-one executive order does allow certain regulations to receive exemptions from the cost offset rules. Agencies can enact measures that respond to health or safety emergencies without having to immediately find offsetting costs, according to an April 5 guidance document from the White House.

Does removing lead from drinking water count as a health or safety emergency? That will be up to the Office of Information and Regulatory Affairs, or OIRA, the main regulatory gatekeeper at the White House. Agencies would have to apply to OIRA for an exemption.

Susan Dudley, the head of OIRA during the Bush administration and now a professor at George Washington University, told Bloomberg BNA that one of the effects of this order will be to concentrate power away from agencies toward OIRA, since it allows the office to grant exemptions largely on a case-by-case basis.

“Those aren’t pure exemptions,” she said.

Indeed, the April 5 guidance, which was drafted to explain how the two-for-one order would be enforced, used the phrase “case-by-case” eight times over the course of the 17 page document.

Meanwhile, the state of Michigan announced in January that Flint’s water has now come back into compliance with the Lead and Copper Rule’s 15 parts per billion threshold, with select water samples there registering an average of 12 parts per billion. In its announcement, the state also told Flint residents they should continue using lead filters on their taps.

To contact the reporter on this story: David Schultz in Washington at dSchultz@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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