Senate Hearing, 108TH Congress - Implementation of The Clean Water Act

S. HRG.
108362
IMPLEMENTATION OF THE CLEAN WATER ACT
HEARING
BEFORE THE
SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND

WATER
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
SEPTEMBER 16, 2003
ON
THE TOTAL MAXIMUM DAILY LOAD (TMDL) PROGRAM, SPILL PREVEN-

TION CONTROL AND COUNTERMEASURE PLANS, STORM WATER
ISSUES, WATER QUALITY TRADING AND THE NEGLIGENT VIOLATION
SECTION OF THE ACT
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JAMES M. INHOFE, Oklahoma, Chairman

JOHN W. WARNER, Virginia JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio HARRY REID, Nevada
MICHAEL D. CRAPO, Idaho BOB GRAHAM, Florida
LINCOLN CHAFEE, Rhode Island JOSEPH I. LIEBERMAN, Connecticut
JOHN CORNYN, Texas BARBARA BOXER, California
LISA MURKOWSKI, Alaska RON WYDEN, Oregon
CRAIG THOMAS, Wyoming THOMAS R. CARPER, Delaware
WAYNE ALLARD, Colorado HILLARY RODHAM CLINTON, New York
ANDREW WHEELER, Majority Staff Director

KEN CONNOLLY, Minority Staff Director
SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND WATER

MICHAEL D. CRAPO, Idaho, Chairman
JOHN W. WARNER, Virginia BOB GRAHAM, Florida
LISA MURKOWSKI, Alaska MAX BAUCUS, Montana
CRAIG THOMAS, Wyoming RON WYDEN, Oregon
WAYNE ALLARD, Colorado HILLARY RODHAM CLINTON, New York
(II)
C O N T E N T S
Page
SEPTEMBER 16, 2003
OPENING STATEMENTS
Chafee, Hon. Lincoln, U.S. Senator from the State of Rhode Island, prepared
statement .............................................................................................................. 51
Crapo, Hon. Michael D., U.S. Senator from the State of Idaho ........................... 1
Graham, Hon. Bob, U.S. Senator from the State of Florida, prepared state-
ment ...................................................................................................................... 52
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 2
Jeffords, Hon. James M., U.S. Senator from the State of Vermont .................... 5
Thomas, Hon. Craig, U.S. Senator from the State of Wyoming .......................... 6
Wyden, Hon. Ron, U.S. Senator from the State of Oregon .................................. 20
WITNESSES
Fuller, Lee, vice president, Government Relations, Independent Petroleum
Association of America ......................................................................................... 35
Prepared statement .......................................................................................... 114
Response to additional question from Senator Inhofe ................................... 119
Hall, Jim, principal partner, Hall and Associates ................................................ 38
Hoover, Julie Beth, Director of Planning and Zoning, City of South Bur-
lington, VT ............................................................................................................ 25
Responses to additional questions from Senator Jeffords ............................. 88
Kouplen, Steve, president, Oklahoma Farm Bureau ............................................ 31
Lozeau, Michael R., attorney, Earthjustice ........................................................... 33
Mabe, David, Administrator, Water Quality Division, Idaho Department of
Environmental Quality ........................................................................................ 23
Responses to additional questions from Senator Inhofe ............................... 78
Mehan, G. Tracy, Assistant Administrator for Water, U.S. Environmental
Protection Agency ................................................................................................. 7
Responses to additional questions from:
Senator Chafee .......................................................................................... 60
Senator Inhofe............................................................................................ 61, 63
Senator Jeffords ......................................................................................... 64
Senator Wyden .......................................................................................... 75
Samoviski, Michael, city manager, City of Hamilton, OH ................................... 26
Responses to additional questions from:
Senator Inhofe ........................................................................................... 97
Senator Voinovich ..................................................................................... 98
Steinzor, Rena, professor and director, Environmental Law Clinic, University
of Maryland School of Law .................................................................................. 36
(III)
IV
Page
ADDITIONAL MATERIAL
Articles:
ELR, News & Analysis, Criminal Negligence Prosecutions Under the
Federal Clean Water Act: A Statistical Analysis and an Evaluation
of the Impact of Hanousek and Hong ...................................................... 169173
Charts:
Bartlett Brook Stormwater Treatment System, City of South Bur-
lington............................................................................................................. 8283
Englesby Brook Construction Wetland Treatment, City of Bur-
lington............................................................................................................. 8487
EPA Civil Enforcement Judicial Settlements Fiscal Years 19992002 ....... 130
Number of Overflow Events ............................................................................ 97
Storm Water Utility Projected Income Statement, City of Hamilton, OH .. 90
The Decline of Environmental Enforcement at EPA Under the Bush
Administration, January 2003 ..................................................................... 127
Federal Register, Friday, December 22, 1995, Part III, Environmental Protec-
tion Agency, Incentives for Self-Policing: Discovery, Disclosure, Correction
and Prevention of Violations; Notice............................................................... 147154
Letters to:
Boehner, Hon. John, U.S. Representative from the State of Ohio ............... 95
Horinko, Hon. Marianne, Acting Administrator, Environmental Protection
Agency .................................................................................................... 18, 96, 244
Jeffords, Hon. James M., U.S. Senator from the State of
Vermont ..................................................................................... 227, 238, 243, 247
Olivas, Hon. Adolf, Mayor, City of Hamilton, June 8, 2001 ......................... 93
Robertson, Joseph C., Ohio Department of Development, May 10, 2001 .... 92
Todd-Whitman, Hon. Christine, Administrator, Environmental Protection
Agency ................................................................................................ 224, 229, 240
Voinovich, Hon. George V., U.S. Senator from the State of Ohio ................. 94
Memorandum, The Exercise of Investigative Discretion, U.S. Environmental
Protection Agency ............................................................................................. 134140
Reports:
A Pilot for Performance Analysis of Selected Components of the National
Enforcement and Compliance Assurance Program................................. 174223
Source of Impairment ....................................................................................... 15
Use of Immunity and Evidentiary Privileges to Encourage Voluntary
Disclosure of Self-Discovered Regulatory Violations, Spring 2000, U.S.
Department of Justice ............................................................................... 141146
Resolution, R2001423, Requesting the Ohio Department of Development
to designate the city of Hamilton, OH, as situationally distressed under
the guidelines of the Ohio manufacturing machinery & equipment invest-
ment tax credit program ...................................................................................... 90
Statements:
American Society of Civil Engineers ............................................................... 159
American Waterways Operators ..................................................................... 157
Greenwald, Robin, clinical professor of law, Rutgers School of Law, New-
ark, NJ; Former Assistant Chief, Environmental Crimes Section, De-
partment of Justice; Assistant U.S. Attorney, Eastern District of New
York, October 20, 2002 ................................................................................. 166
IMPLEMENTATION OF THE CLEAN
WATER ACT
TUESDAY, SEPTEMBER 16, 2003
U.S. SENATE,
SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND WATER,
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:30 a.m. in room
406, Senate Dirksen Building, Hon. Michael D. Crapo (chairman of
the subcommittee) presiding.
Present: Senators Crapo, Thomas, Wyden, Inhofe [ex officio] and
Jeffords [ex officio].
OPENING STATEMENT OF HON. MICHAEL D. CRAPO,
U.S. SENATOR FROM THE STATE OF IDAHO
Senator CRAPO. Good morning. The hearing will come to order.
This is a hearing of the Subcommittee on Fisheries, Wildlife, and
Water on the Implementation of the Clean Water Act.
I would like to welcome everyone here, especially our Chairman
of the full committee, Senator Inhofe. At the outset, I would like
to recognize one of our witnesses, Dave Mabe, who is here from
Idaho. David is the administrator of the Water Quality Programs
for the Idaho Department of Environmental Quality. Senator
Inhofe, Dave, and I worked together way back when I was in the
State Senate in Idaho on issues of this kind. He brings a very high
level of expertise to these issues. We welcome him here today.
Today, we are going to discuss a number of the aspects of the
Clean Water Act. I will alert everybody at the outset that we ex-
pected to have votes this morning. We are going to try to keep ev-
erybody moving along appropriately so that we can get through all
of the testimony and the questions that the members of the Senate
have here today.
Although we all understand the fundamental importance of
water, I do not think we should gloss over the importance of the
Clean Water Act to our efforts. We should begin our discussion
today by remembering that our shared goal is to continue improv-
ing the cleanliness of water throughout the United States, and do
it by focusing on action and results instead of the endless argu-
ments that sometimes I think we get into as a result of the imple-
mentation of some of the statutes.
The Clean Water Act is one of the statutes that allows a produc-
tive State and Federal relationship. It is important that we protect
the basis for that relationship in the law, and that we use that re-
lationship fully. By working together, State and Federal Govern-
(1)
2
ment can accomplish more and can discover more and better ways
of sharing responsibility on all aspects of conservation.
To protect the State/Federal partnership, we should attend espe-
cially to whether and how the Federal partner should approve or
disapprove of State decisions. In developing TMDLs, for example,
State decisions, in my opinion, should be respected on which water
body should be listed and what order they should be acted upon.
On this and other specific issues, the Federal program should ac-
cept responsibility for difficulties we face in those contexts. By con-
fusing effort with results, we often waste idle resources and gravely
delay progress.
Today, as I believe everybody knows, we are going to go over four
or five issues dealing with the Clean Water Act, TMDLs, pollution
trading, storm water management, spill containment, and neg-
ligence standards. We expect to have many interesting perspectives
on these issues raised to us by our witnesses who are here today.
We look forward to their testimony.
With that, I will turn to our Chairman, Senator Inhofe, for his
statement.
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator INHOFE. Thank you, Mr. Chairman.
First of all, good morning. I welcome everyone to this hearing
today. I am very proud that we are joined, Mr. Chairman, by Steve
Kouplen, who is the president of the Oklahoma Farm Bureau. He
and I have had a chance to visit. He has a commercial Hereford
cow/calf operation. He also grows wheat, alfalfa, and a few other
things. He represents 140,000 Farm Bureau members in my State
of Oklahoma.
Todays hearing will focus on several pressing clean water issues,
some of which have been the subject of recent EPA actions. Of par-
ticular importance to my State, as you brought out, Mr. Chairman,
is the future of the TMDL program, as well as how oil and gas sites
are treated under the Storm Water Rule.
This Administration is absolutely correct in withdrawing the
TMDL proposal of the Clinton administration. Many stakeholders,
including the States, were concerned about a number of its provi-
sions, including the requirement that an implementation plan be
submitted along with the TMDL. The TMDL rule has the potential
to severely limit local and individual land use decisions. A TMDL
is a number. It is the maximum amount of a particular pollutant
in a water body can sustain and meet the water quality standards.
That number is then divided among the contributors of the water
body.
The rule can be perceived in one of two ways: It gives the EPA
authority to approve just the TMDL number with States deciding
how to distribute it. Or, they could give the EPA the authority to
approve how the State divides that number among its contributors.
I have to say: What does it matter if they conform with the num-
ber? The States are probably in a better position to do that than
we would be here in Washington. There is this prevailing mentality
here, though, that no good decisions are made unless they are
made in Washington.
3
Just imagine a farmer, like Steve Kouplen, who has been as-
signed a certain pollutant reduction to achieve. If he wants to
change his crop or sell his landall those actions may have a
water quality impact and may cause him to exceed his pollutant al-
location. The decision on what to do can be made between him, the
State, and others, on the water body. But if the EPA has the au-
thority over how the TMDL obligation is divided, that decision will
be made by the EPA.
My message on the TMDLs is this: We need a new rule, but it
must be a rule that outright prohibits any EPA role in local and
land use decisions. We must give the EPA the authority to approve
just the TMDL number itself and let the States handle the rest of
it, along with the land owners.
Assistant Administrator Mehan has been a strong proponent of
trading the EPA issued guidance earlier this year to help the
States create trading programs. Trading allows one source to meet
its obligation under the Clean Water Act by using pollution reduc-
tions created by another source that has lowered costs and, thus,
can reduce pollution beyond its obligation under the Act.
A key objective to the trading guidance, and any trading pro-
gram, is to meet water quality standards and to ensure that at the
end of the day the water is cleaner and safer. That is what we
want to accomplish. States have successfully developed programs to
meet this objective, but also reduce costs. I believe trading will help
reduce costs without affecting the water quality. Therefore, we
should do all we can to promote it. We need to give the regulated
more tools and not just more requirements.
Today we are also going to hear about two other issues that are
very important to the small oil and gas producers in my State of
Oklahoma. The Clean Water Act exempts uncontaminated runoff
from oil and gas sites from the Storm Water Program. Contami-
nated runoff is still covered. The Act is silent on contaminated run-
off. EPA, on a technicality, has included all runoff from oil and gas
sites in the construction side of its Storm Water Program because
the term construction is not in Section 402(l).
EPA made two mistakes. The first was failing to recognize that
construction is not a separate part of developing oil and gas sites,
and was never intended to be covered by the program. The second
mistake was in underestimating the number of oil and gas sites
that would be impacted by the rule. I am pleased that EPA realized
the latter of their two errors and correctly proposed a 2-year delay,
in part because their cost benefit analysis did not include the near-
ly 30,000 oil and gas sites impacted by the rule.
It is also important that we take a very close look at the Spill
Prevention Control Program. Everyone must understand the SPCC
Plans are required for any facility that houses large amounts of oil.
This includes the Nations farms. The new rule increases the num-
ber of facilities that need a plan by reducing the amount of oil that
can be housed on a site before the requirement kicks in. The EPA
granted an 18-month extension for facilities to comply because fa-
cilities were struggling to meet the new requirements, including
how to address secondary containment at loading operations. I
think it is very important that you keep in mind. I can see this
4
going to the extent that every farmer out there would be faced with
this type of a site.
Another issue that will be raised today will be the unintended
consequence of Section 309 of the Clean Water Act. Unlike other
environmental statutes, including the Air Act, to be convicted of a
negligent violation, a person does not have to be guilty of an inten-
tional or reckless act. Such person, entirely by accident, without
any force thought, and without any malice or intent, may have
caused an accidental spill of some type and end up having to serve
jail time. This is something that we do not want to allow.
I would like to ask unanimous consent to submit. One is a col-
loquy that Senators Breaux, Domenici, and I had during the floor
debate on the Energy bill.
Senator CRAPO. Without objection, so ordered.
[Material supplied follows:]
COLLOQUY BETWEEN SENATORS DOMENICI, INHOFE AND BREAUX
Senator INHOFE. I would like to engage the gentlemen in a colloquy and draw the
Senates attention to several statutes which have been, through litigation, expanded
beyond what we believe was the intent of Congress.
Senator DOMENICI. Is the gentleman referring to the criminal negligence provision
of the Clean Water Act and the strict criminal liability provision of the Migratory
Bird Act and the Refuse Act which can be triggered by a simple accident?
Senator INHOFE. Precisely. Now, I want to be clear that I do not want to suggest
for a minute that we should make it easier for polluters to damage the environment
or put the public at risk.
Senator DOMENICI. Out the situation you are talking about refers to clear acci-
dents involving ordinary people, correct?
Senator INHOFE. Yes. Recent court decisions have made it clear that employees,
at any level, who are involved in environmental accidents, can be prosecuted crimi-
nally, and potentially imprisoned. These are non-deliberate environmental accidents
that do not threaten or harm others.
Senator BREAUX. Mr. President, I am also concerned about criminal liability as
it applies to oil spills. In fact, during the 106th Congress, I introduced legislation
to address a long-standing problem which adversely affects the safe and reliable
maritime transport of oil products. The legislation was aimed at eliminating the ap-
plication and use of strict criminal liability statutes, statutes that do not require a
showing of criminal intent or even the slightest degree of negligence, for maritime
transportation-related oil spill incidents.
As stated in the Coast Guards environmental enforcement directive of 1997, a
company, its officers, employees, and mariners, in the event of an oil spill could
be convicted and sentenced, to a criminal fine even where [they] took all reasonable
precautions to avoid the discharge. Accordingly, responsible operators in my home
state, of Louisiana and elsewhere in the United States who transport oil are un-
avoidably exposed to potentially immeasurable criminal fines and, in the worst case
scenario, jail time. Not only is this situation unfairly targeting an industry that
plays an extremely important role in our national economy, but it also works con-
trary to the public welfare.
To preserve the environment, safeguard the public welfare, and promote the safe
transportation of oil, we need to eliminate inappropriate criminal liability that oth-
erwise undermines spill prevention and response activities. I pledge my support to
work with my colleagues to address these environmental liability issues.
Senator INHOFE. The American Waterways Operators have devoted a great deal
of time to training mariners and vessel operators. Clearly, the Coast Guard goes to
great lengths to ensure its officers and staff are well trained. However, unfortu-
nately, accidentstrue accidentshappen.
Senator DOMENICI. My colleagues are clearly describing a legal minefield where
employees involved in an accident become less likely to cooperate with accident in-
vestigations because they are being advised by counsel not to potentially incriminate
themselves.
Senator INHOFE. That is absolutely correct.
5
Senator DOMENICI. And as Chairman of the Environment and Public Works Com-
mittee, is it the Senator from Oklahomas position that this leads to less environ-
mental safety instead of more?
Senator INHOFE. Indeed. I also wish to draw the gentlemans attention to the
Clean Air Act, which has a different, and I suggest, more appropriate provision of
negligent endangerment.
Senator DOMENICI. I am familiar with the provisionit requires risk of physical
harm to the public for an accident to trigger criminal prosecution.
Senator INHOFE. Yes, That is the type of activity for which we should reserve
criminal prosecution. I also remind my colleague that the Clean Water Act clearly
allows prosecution for deceitful or purposeful environmental damage, or for fraudu-
lent efforts to conceal such damagea provision we would not change.
Senator DOMENICI. I agree with the gentlemens assessment, share their concern,
and look forward to working with them to address this important issue.
Senator INHOFE. With that, I look forward to the hearing today.
Again, as the Chairman said, We will be interrupted for awhile.
We have three panels. We will make it as contiguous as possible.
Senator CRAPO. Thank you very much, Mr. Chairman.
Senator Jeffords.
OPENING STATEMENT OF HON. JAMES M. JEFFORDS,

U.S. SENATOR FROM THE STATE OF VERMONT
Senator JEFFORDS. Mr. Chairman, I want to thank you for hold-
ing this hearing. Clean water is one of the most basic needs and
one of our greatest luxuries. We are reminded time and time again
of the role of clean water in our society as we see new coverages
of the situation in Iraq.
In our own country, just a month ago, the effects of an unreliable
power grid spilled over into the water industry as waste water
treatment plants in Ohio dumped 60 million gallons of untreated
sewage into receiving waters, closing beaches to swimming. Mul-
tiple cities were under boil water notices for days.
During the 107th Congress, as Chairman of this committee, I
held a Clean Water Act oversight hearing on the 30th anniversary
of the Act. We heard from the EPA that 45 percent of our waters
cannot meet water quality standards. Since our hearing in October
2002, the Administration has chosen to go backward on clean water
protections rather than forward. Rather than step up to the chal-
lenge of cleaning up our remaining waters, the Administration is
both failing to maintain the progress we have made since 1970, and
failing to move forward on the remaining challenges that we all
identified just 1 year ago.
Today, we will review in detail the Administrations actions on
TMDLs, Storm Water, SPCC, and water quality trading. We will
also be covering the effect of Section 309(c)(1) which, Mr. Chair-
man, I understand that you have a special interest in that.
I ask unanimous consent, Mr. Chairman, that the testimony from
Ms. Robin Greenwald in the October 20, 2002 article from the En-
vironmental Law Reporter on this topic be included in the hearing
record.
Senator JEFFORDS. I am pleased that we have agreed, at your
suggestion, to address enforcement issues in general as a broad
hearing on EPA enforcement in the near future.
I want to take a few minutes to provide some context for todays
discussion on this limited number of actions the Administration
6
has taken under the guise of protecting our water quality. On Jan-
uary 15, 2003, the Bush administration began a rulemaking proc-
ess that threatens the integrity of the Clean Water Act by severely
reducing the water that it protects.
In June 2003, reports surfaced that Clean Water Act enforcement
was faltering under the Bush administration. An internal analysis
performed by the EPA documented extensive noncompliance with
the discharge permits and a decline in enforcement activities. For
example, there was a 45 percent decrease in EPA formal enforce-
ment actions between 1999 and 2001.
Since President Bush took office, he has pursued significant re-
ductions in the enforcement capacity at the EPA. Enforcement per-
sonnel have been reduced by 100. In January 2003, the President
submitted his fiscal year 2004 budget. It reduced clean water infra-
structure spending by 40 percent from the prior year funding level.
In March 2003, the Bush administration withdrew the existing
rule on Total Maximum Daily Load, or TMDL, without producing
an alternative. Today, we will review the Administrations latest
draft regulation which weaken protections by the dirtiest waters.
On March 7, 2003, the EPA issued a final rule that extended the
permit deadline for storm water discharges for oil and gas con-
struction activity that disturbs 1 to 5 acres of land by 2 years.
The EPAs action gives a regulatory free ride to the oil and gas
industry while thousands of small communities and industries
building construction projects struggle to comply with the same
rule.
In a similar action to benefit the oil and gas industry, the EPA
extended the compliance deadline for spill prevention control and
countermeasures planned. We will discuss this in more detail
today.
Mr. Chairman, I could continue with a longer list, but I will end
there. Each time I review this list, I am dumbfounded by the cas-
ual attitude of this Administration toward the future of our coun-
try. It seems that the choices we witness each day are choices
made with one thing in mindimmediate gratification to special
interests at the expense of the environment. History will dem-
onstrate that the changes I mentioned, taken as a group, will have
been the largest step backward in clean water protection in our Na-
tions history.
Thank you, Mr. Chairman.
Senator CRAPO. Thank you.
Senator Thomas.
OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR

FROM THE STATE OF WYOMING
Senator THOMAS. Thank you, Mr. Chairman.
I will not take very long. I do appreciate your having this hear-
ing. I think it is very important. Seldom have I ever been opti-
mistic about what we are doing with TMDLs. I think we need to
be very watchful and careful about the storm water rule. I think
we are headed in the right direction.
[The prepared statement of Senator Thomas follows:]
7
STATEMENT OF SENATOR CRAIG THOMAS, U.S. SENATOR FROM THE
STATE OF WYOMING
Mr. Chairman, thank you for holding todays hearing. I appreciate your commit-
ment in allowing this subcommittee, which has jurisdiction over the Clean Water
Act, the opportunity to discuss the implementation of that law particularly the rule
on Total Maximum Daily Loads (TMDLs).
Mr. Chairman, Ive sat behind this dais many times and rarely had the oppor-
tunity or reason to applaud EPA especially thinking back to the 2000 rule on
TMDLs (that has since been repealed). But with respect to TMDLs and the existing
rule, EPA has been helpful to my State of Wyoming. The national TMDL coordi-
nator has worked with my state to achieve success through the local watershed
process. Wyoming has been using a local approach to address our impaired waters
rather than a top down approach. When EPA Region 8 was sued over Wyomings
alleged failure to comply with the TMDL program, the State prevailed.
The local approach is working. It is my hope the new rule will embrace this sort
of an approach and allow other flexibilities to get the job done. If the end result
is the same, I should not think a one-size-fits-all approach should matter. We have
seen more than once that what works in one region in the country does not nec-
essarily work in the other. Thank you, Mr. Chairman, and I look forward to hearing
from the witnesses.
Senator CRAPO. With that, we will now move to our first panelist.
Mr. Tracy Mehan is the Assistant Administrator for Water for the
U.S. Environmental Protection Agency.
As Mr. Mehan is taking his seat, I would like to remind all of
the witnesses today that we, as usual, are under a tight timeframe
that will be impacted by votes. We will remind the witnesses that
we would like you to pay attention to the clocks that are in front
of you and keep your oral testimony to 5 minutes. That gives us
time for questions from the Senators. We assure you that we will
carefully review your written testimony.
Like I always say, you will never get everything you want to say
in the 5 minutes, but we ask you to pay attention. For those of you
that get involved and do not quite notice when you time is up, I
will just lightly tap the gavel as a reminder that you should pay
attention to the clock. We will try to keep ourselves moving along.
With that, Mr. Mehan, please proceed.
STATEMENT OF G. TRACY MEHAN, ASSISTANT ADMINIS-

TRATOR FOR WATER, U.S. ENVIRONMENTAL PROTECTION
AGENCY
Mr. MEHAN. Thank you, Mr. Chairman.
It is a pleasure to be here. My written testimony deals with a
broad array of watershed issues as well as the storm water issue,
including TMDLs, watershed-based permitting, monitoring, and
water quality trading.
I am going to focus in my 5 minutes on monitoring and water
quality trading. While monitoring may not have been a top-of-the-
mind issue for many, I think where we are today in trying to move
to the watershed approach is crucial. You will be hearing a lot
more of it as we move into the fiscal year 2005 budget process on
this.
Again, we are in a period where we are trying to transition from
a purely technology based approach to a water quality based ap-
proach, and to reorient all our water programs on a watershed
basis. We think it is imperative to strengthen our water quality
monitoring and assessment programs.
8
In the 1970s, monitoring was primarily carried out at or near

the end of pipe to measure effectively individual permits and
whether they were working. However, today we need to monitor
and assess the inputs of millions of diffuse sources of pollution
from sediments, from agricultural sources, from construction sites,
fertilizer, and pollutants coming from the air. This is going to re-
quire more innovative tools and flexible approaches such as trad-
ing. But we need baseline monitoring to better implement these
new innovative approaches.
We currently have site-specific information that tells us about
many localized and regional conditions. But as stated in EPAs
Draft Report on the Environment 2003, At this time, there is not
sufficient information to provide a national answer to this basic
question on water quality status and trends with confidence and
scientific credibility.
Working with State, Federal, tribal, and local agencies, with the
private sector and nonprofit organizations, we must be able to pro-
vide answers to some very fundamental questions: How clean is the
water? Is it getting cleaner? Are our management actions working?
Without answers to these questions, we run the risk of flying
blind when it comes to making decisions on how best to address
water quality problems and to allocate limited resources. One re-
cent example is the data we are assembling for our report to Con-
gress under the Wet Weather Act on sewer overflow. When I came
to Washington 2 years ago, we were talking about 500 billion gal-
lons of overflow year. Based on a statistically valid inventory and
sampling process, it looks like that number is dropping to 10 billion
gallons per year. That has a big impact on how we decide how we
are going to deal with these challenges. That is the kind of infor-
mation we have to have.
Currently, most States are doing monitoring at that level. That
is all to the good, but we need to integrate that as part of a na-
tional scale water quality monitoring program. Again, my testi-
mony deals with some of the specifics on that. I hope in future
hearings next year, that we will spend much more time on water
quality monitoring because it is fundamental to innovation and the
watershed approach.
Let me say a few words about water quality trading. EPA be-
lieves that water quality trading, which allows sources to find the
least cost alternative to achieving clean water, can be a critically
important tool for restoring impaired watersheds efficiently and
cost effectively. In its analysis of the Clinton administrations
Clean Water Initiative, EPA concluded that the total potential sav-
ings from all types of tradingpoint-to-point, point-to-nonpoint,
and pretreatment tradingranges from $650 million to $7.5 billion
annually.
Another study of three watersheds in the upper Midwest by the
World Resources Institute, found that controlling phosphorous load-
ings from point and nonpoint sources, the cost could be reduced by
40 percent in watersheds in Wisconsin and more than 80 percent
in watersheds in Michigan where trading was applied between
point and nonpoint sources. These examples, where differential
costs can be used to the benefit of achieving water quality gain, il-
lustrate the potential for water quality trading.
9
In January, EPA issued its Water Quality Trading Policy. The

policy provides guidance on aligning trading programs with the
Clean Water Act and implementing regulations. It identifies com-
mon elements of credible trading programs. The policy supports
trading to improve or preserve water quality in a variety of cir-
cumstances.
In unimpaired waters, trading may be used to preserve water
quality by offsetting new or increased discharges of pollutants,
thereby allowing for economic growth in a watershed. In waters im-
paired by pollutants, trading may be used to achieve earlier pollut-
ant reductions, and progress toward water quality standards even
in advance of the development of a TMDL.
Trading, of course, may be used to reduce the cost of achieving
reductions established by a TMDL. The policy highlights existing
Clean Water Act flexibility that can facilitate trading programs,
and emphasizes the need for accountability and safeguards to en-
sure the trading programs protect our resources and keep advanc-
ing toward water quality standards.
I am happy to note what I think is really growing support for the
policy. We had a national forum on trading in Chicago this sum-
mer. Three hundred people showed up for several days. They came
early and stayed late and explored a whole raft of case studies and
lessons learned from trading pilots around the country. Recently,
we received a letter from the U.S. Conference of Mayors endorsing
our policy.
A number of core principles and environmental safeguards form
the foundation of our policy. These principles help ensure the trad-
ing programs create actual pollutant reductions, avoid hot spots,
provide accountability for trading activity, and involve the public.
I am going to name just a few that are set out in the policy.
First, trading programs operate within the existing regulatory
structure and are consistent with all aspects of the Clean Water
Act. Trading programs are designed to meet water quality goals,
including TMDLs. Water quality standards or goals are our pole-
star, that is, the end point, the object of all these efforts. Trading
programs ensure that water quality standards are not exceeded.
Trading programs retain enforceability of NPDES permit limits.
Trading is not used to meet point source technology-based limits,
but may be used to achieve water quality-based limits consistent
with the Clean Water Act.
We already see evidence that water quality trading programs
work. For example, the State of Connecticuts Nitrogen Credit Ex-
change Program is expected to save the State an estimated $200
million in control costs through trading, while also making signifi-
cant gains in cleaning up pollutants in Long Island Sound, saving
several years off the cleanup schedule.
In the Cherry Creek watershed in Colorado, a trading program
conducted in conjunction with a TMDL has reduced phosphorous
loads to Cherry Creek watershed by approximately 450 pounds per
year. The nonpoint source projects that were implemented to create
the phosphorous credits have provided ancillary environmental
benefits, such as flood control and wildlife habitat in recreational
areas.
10
A partnership trading effort in Illinois Piasa Creek along the

Mississippi River will save several million dollars in capital im-
provements for a drinking water treatment facility, while reducing
sediment loads to the Mississippi River. The Grasslands selenium
trading program in California, which was led by the Environmental
Defense, was the Nations first nonpoint source cap-and-trade pro-
gram. It utilized an innovative penalty and rebate system to create
economic incentives to substantially reduce selenium in Kesteron
Reservoir that was adversely harming bird populations. I am also
happy to recognize the project in Idaho along the Lower Boise that
we are very excited about.
Experience with trading has also taught us that trading will not
work everywhere. It is just one tool in the tool box. For example,
the level of pollutant reductions that would need to be achieved
from all sources in a given watershed may be such that additional
or surplus reductions cannot be achieved so as to allow trading.
Certain watersheds may not have the number and mix of sources
necessary for trading to be successful. In addition, trading pro-
grams that work in one State or tribal area may not be successful
in others.
Generally, Mr. Chairman, we are exited about the experimen-
tation that is going on. We look forward to working with the com-
mittee to see that this policy is successfully implemented.
Thank you. I would ask that my complete testimony be included
in the record in its entirety.
Thank you very much, Mr. Mehan. We appreciate your testi-
mony.
For my questions, I want to focus on the TMDL program. You
and I have had discussions on this in the past. As you know, I was
very concerned with the rule that was first proposed by the EPA
under the Clinton administration. The testimony we had in the
hearing was that it would not only impose significant increased
cost burdens on the States, but not necessarily increase the effec-
tively of the activities already underway at the State level. There-
fore, I strongly supported the EPAs decision to withdraw that rule
and start again.
Now, however, I am very anxious to see that a new rule come
out. As we have discussed, the regulatory uncertainty that we face
in the absence of a rule is itself creating a significant amount of
problems.
In that context, my first question is this. Do you have a time line
that you can give us as to how soon we can expect that the EPA
will issue a new rule?
Mr. MEHAN. Senator, I am not in a position to give you a precise
time line. I can tell you we are in an interagency process. There
was a little bit of a quietus after the Fourth of July. I can assure
you that we are back into long and steady negotiations and discus-
sions with our other Federal Agencies. We are hopeful that we will
be able to move forward in the not-too-distant future.
Senator CRAPO. In the context of the new rule, particularly in the
context of the nonpoint sources, it seems to me that it is important
for us to recognize the roles of the State in being able to allocate
the total load to various sources within a watershed. The EPA
11
should be primarily involved in determining what the total load

level should be, but should let the States make decisions about how
that is allocated and how accomplishment of the purposes of the
rule is achieved. Is that the direction in which we are headed?
Mr. MEHAN. We, I think we would view it as somewhat of a more
complex challenge. In approving the total load, it is like approving
a budget. You cannot really look at the bottom line without looking
at all the elements that go into creating the budget, whether it is
a pollution budget or a financial budget.
There has to be some mechanism for EPA to meet its statutory
responsibilities to approve the TMDL to ensure that the alloca-
tions, both the waste load allocation to point sources and the load
allocations to nonpoint sources, are actually put together in a tech-
nically and scientifically defensible way in order to justify our ap-
proval.
So we are wrestling with this issue of how to respect State pre-
rogatives who at the first instance have the responsibility to put
together the TMDL, but at the same time allow us to make an in-
formed technical evaluation of the final work product.
Senator CRAPO. Are you saying that the EPA has to basically be
in charge of every minute decision in terms of the allocation of the
load throughout a watershed in order for them to make a decision
about the total load for the watershed?
Mr. MEHAN. It comes down to what degree of specificity you
need. You obviously have to have great specificity when you are
talking about point sources because those waste load allocations to
point sources will be written into NPDES permits. It would not re-
quire anywhere near the same kind of specificity for load alloca-
tions to nonpoint sources where you could do things through cat-
egorizations or sub-categorizations without necessarily worrying
about specifics, say in the case of an agricultural producer or
sources like that.
The issue is: How much specificity do you need to ensure a fair
and credible technical review of the overall pollution budget in the
TMDL?
Senator CRAPO. Well, my time is up. I will encourage you to work
as much flexibility as possible into the program for the States and
have the EPA mainly administering at the broader level and let
our States do their jobs. I think they can.
Mr. MEHAN. Thank you, sir.
Senator CRAPO. Senator Jeffords.
Senator JEFFORDS. Has the EPA done any written analysis show-
ing what the effect of the proposed changes, the TMDL rule, will
be on water quality? In other words, does EPAs analysis show that
a new rule will make the waters dirtier or cleaner, and sooner or
later than the existing TMDL?
Mr. MEHAN. At least as I understand what you are asking, Sen-
ator, I do not think we have that kind of an analysis or document
at the present time. The TMDL contemplated rule right now in
many ways accomplishes several things. We are responding to criti-
cisms from the National Academy of Sciences. We are trying to ac-
commodate State practical implementation concerns. We are trying
to optimize the performance of an existing program.
12
In other words, in many respects you can say that the cost of
meeting the water quality standards of the Clean Water Act are al-
ready sunk costs, but now we are coming along with a new, pro-
posed, or contemplated TMDL rule to just make the whole thing
work more efficiently toward ends that are already set out by Con-
gress and by our regulations.
We look at it as a way to better optimize the existing program.
I hasten to add that the TMDL program is a very robust program
right now. We have done 8,000 TMDLs to date and are spending
quite a bit of time in the continuous improvement mode to continue
to perfect the program while we are also going through the inter-
agency discussions about a possible new rule.
Senator JEFFORDS. On March 10, 2003, the day the Storm Water
Phase II regulations took effect, the EPA extended the compliance
deadline for the oil and gas industry. We have corresponded exten-
sively on the details of this issue.
I ask unanimous consent that several pieces of correspondence
between the members of the committee and the Agencys responses
be included in the hearing record.
Senator JEFFORDS. Your final rule extending the deadline for the
oil and gas industry states that you have received information that
30,000 oil and gas sites could be affected. Is that number accurate?
Mr. MEHAN. That is our understanding.
Senator JEFFORDS. The final Storm Water Phase II regulation
issued in 1999 states that EPA believes that the implementation
of Best Management Practices, BMP, controls at small construction
sites will also result in a significant reduction in the pollutant dis-
charges and an improvement in surface water quality.
Is that statement still accurate? If so, how will the removal of
30,000 sites from the regulation change the water quality benefits
EPA expects to achieve?
Mr. MEHAN. Senator, taking the second question first, there is no
decision to remove 30,000 sites from the rule. We simply deferred
action on that sector in light of newer information received from
the Department of Energy, from members of the industry, and
through other sources that were inventoried as to extent of the po-
tential regulatory universe that we previously had not fully under-
stood or comprehended.
Generally, the imposition of BMPs on sources of storm water will
have beneficial environmental impacts. But obviously issues of
costs and benefits and issues in terms of regulatory feasibility are
all relevant. We need to learn more about this sector. We also need
to learn more about what the industry is already doing by way of
best management practices under, say, State regulatory regimes at
the present time.
Senator JEFFORDS. On the Storm Water EPA No. 3, can you de-
scribe the relative contribution of storm water versus other sources
of pollution to the 45 percent of the Nations waters that remain
impaired, including a description of the types of pollutants nor-
mally found in storm water, and the change in pollutant content
that could be expected in cold water climates? What role does
transportation infrastructures play in generating storm water run
off?
13
Mr. MEHAN. Obviously there are a number of points in your

question, Senator, that I would request the opportunity to respond
in writing in a very detailed technical review.
Basically, in the latest reports that we have seen from the
States, urban run off was cited as the source of impairments for
34,871 miles of rivers and streams, 7.7 million acres of lakes, and
over 5,000 estuary square miles.
Clearly, speaking again at the broader level, this has impacts.
All the wet weather issues do, whether it is CSOs, SSOs, or storm
water. You can go down the list. To some degree there is a hier-
archy in there. Clearly, storm water run off is part of that. I would
be happy to get back to you with more detail as to which sector
contributes to which degree of impairments.
Senator JEFFORDS. We would appreciate that.
Senator JEFFORDS. Thank you, Mr. Chairman.
Senator CRAPO. Thank you very much, Senator Jeffords.
Senator Thomas.
Senator THOMAS. Thank you. I will be brief.
What if EPAs role was to reject indefensible State decisions
rather than specifically approving all the decisions they make?
Mr. MEHAN. Senator, the present system set up under the Clean
Water Act, and not unlike any other provisions of other laws, is
really environmental federalism. Forty-five States presently have
delegated authority to carry out the Clean Water programs. We do
have an oversight role, but with the delegation of that program,
primary responsibility for things like the NPDES program and the
TMDL program, where quality standards are specifically recog-
nized as State prerogative in Section 510 of the Act, the States are
in the drivers seat.
We do have oversight responsibility. In some cases, say, in the
water quality standards, the law requires us to approve those
standards. We view the water program, compared to many pro-
grams in Government, and even in the EPA, as the quintessential
environmental Federalist program with 45 delegated States in the
Clean Water program and 49 States delegated under the Safe
Drinking Water program.
There are obviously professional disagreements that will happen
from time-to-time, but for 30 years, that has been the way we have
carried out the program. We are seeing more and more reliance on
State programs, even in the face of some financial challenges of
late. You have to get to cases. There are going to be given cir-
cumstances where people are going to come down on different sides
of any given decision.
Senator THOMAS. This is aside from your statement. But one of
the things we run into quite often is a lack of coordination among
Agencies; for instances, on permitting. One Agency will go ahead
and say, Yes, we are ready to go. Then the next thing you know,
the EPA has challenged that. They have a perfect right to chal-
lenge it, but it seems to me that it would be appropriate if the
Agencies work together so that when the permitting was finalized,
then it is finalized, and someone does not come back in again and
stop the whole thing because their opinions are not represented ap-
parently.
14
Mr. MEHAN. Well, I think it is certainly just generally good prac-

tice that the further upstream you can get on any regulatory deci-
sion in terms of interactions, you are better off rather than sort of
a late hit, so to speak. We do try. We spend a lot of time with our
State agencies, whether it is under ECOS or under ASIWPCAs
umbrella, working with them on programs, trying to continually do
a horizon scan of where we are going to see areas of potential dis-
agreement or areas for potential cooperation and synergies. There
is no question that we need to stay in a mode of continually trying
to revisit these.
Senator THOMAS. I am not talking about the State. I am talking
about Federal Agencies. I am talking about the BLM and the EPA
who do not seem to be able to be in accord when the permitting
is out there. It does not seem to me that there is any excuse for
that.
Mr. MEHAN. The problem is that we are all creatures of the var-
ious laws that establish our Agencies. We do not have one com-
prehensive organic statute that cuts across all environmental and
resource issues. We have different Agencies responding to different
statutory and legal regimes. That inevitably results in some stove-
piping. We are trying to improve on that at every opportunity. We
have an oversight panel we have established with the Fish and
Wildlife Service to look at the review of water quality standards
under the Endangered Species Act, trying to again proactively
work to streamline that effort. But again, you have two different
statutory regimens.
Senator THOMAS. I understand that. But there is no reason why
the final decision cannot encompass the decisions of both or all
three of those Agencies. You always have reasons and excuses be-
cause of the law. But I am afraid I do not understand why it can-
not be implemented in such a way that the final decision embraces
the role of all the appropriate Agencies. But that does not happen.
Mr. MEHAN. I agree we need to make it happen, Senator.
Senator THOMAS. Thank you. I appreciate it.
Senator Jeffords has a few more questions.
Senator JEFFORDS. The trading policy states that EPA would con-
sider pilot projects to obtain more information regarding the trad-
ing of persistent bio-accumulative toxics, PBTs, such as mercury.
What are your plans with regard to these pilot projects? How could
it be possible to increase the concentration of PBTs in one location
without impairing water quality and putting human health at risk?
Mr. MEHAN. Well, Senator, we have no proactive plans or agenda
to promote or push any trading involving persistent bio-accumula-
tive toxics. That statement in the policy really is more of an in-box
position that if someone comes forward, we would certainly exam-
ine it. We have one on the Sacramento River involving mercury.
We intentionally put that statement in the policy to show that we
were not hanging out a sign to necessarily promote this.
On the other hand, under the Clean Water Act, we do not have
a handle under some of the primary sources, which are air deposi-
tions. That is the same analogy to row crop agriculture. One of the
advantages of trading is that it presents an opportunity to address
15
unregulated sources through least-cost and incentive-based prac-

tices in a watershed context. We just did not want to foreclose the
opportunity that someone out there might have a very creative idea
dealing with a multimedia problem like mercury. Certainly in
places like Michigan or the Southeastern United States, 90 percent
of the mercury is coming from an unregulated source, at least from
the Clean Water Act perspective; that is, air deposition. There are
other areas, too, where it is coming from runoff and other things
that are not subject to the traditional NPDES regulatory tools.
We have not had any new proposals come in other than the one
we announced back in January in the Sacramento which is still
more in a scoping stage. If one comes in, we will take a look at it
on its merits and decide whether it is worth pursuing.
Senator JEFFORDS. The Storm Water Phase II final rule extend-
ing the compliance deadline for oil and gas states that EPA will
analyze and evaluate the scope and effect of Section 1342(l)(2) of
the Clean Water Act which allows certain types of discharges from
oil and gas activities to occur within a permit.
I have several questions with respect to that. What is EPAs cur-
rent policy on the applicability of Sections 1342(l)(2) to oil and gas
construction sites? How long has that been in place?
Mr. MEHAN. I think you are referring to the 1992 decision by
EPA to distinguish between runoff from the operations itself versus
the construction. There has been no change on that policy as of this
date.
Senator JEFFORDS. How has the Storm Water Phase I regulation
covering large municipalities and large construction sites impacted
water quality?
Mr. MEHAN. I have only anecdotal evidence. I would be happy to
check to see what more systematic information we have on that,
Senator. We are talking obviously larger operations on a watershed
basis that could be significant.
Ms. Benita BEST-WANG [accompanying Mr. Mehan]. We have
done some work evaluating monitoring data from large municipali-
ties. We do have some work on construction sites.
Mr. MEHAN. Again, I would be happy to assemble that informa-
tion and present it to you, Senator.
Senator JEFFORDS. Thank you.
[Material supplied by the witness follows:]
SOURCES OF IMPAIRMENT
EPA compiles data on water quality impairments and sources of impairments con-
sistent with the requirements of Section 305(b) of the Clean Water Act. The most
recent biennial report for which data are available is from calendar year 2000 (2000
National Water Quality Inventory Report). In that report, EPA presents data inde-
pendently for three significant types of waterbodies: rivers and streams, lakes and
reservoirs, and coastal resources. The report defines number of categories for
sources of waterbody impairments. Many of these are storm water management re-
lated. Following is impairment data for each of the waterbody types:
RIVERS AND STREAMS
Of miles assessed, 39 percent are impaired (a total of 269,258 miles out of the
699,946 miles assessed). Of the total, following is the percent of the impairment due
to the identified source:
16
Agriculture ................................................................................................................................................................ 48 percent

Hydrologic Modification ............................................................................................................................................ 20 percent
Habitat Modification ................................................................................................................................................. 14 percent
Urban Runoff/Storm Sewers ..................................................................................................................................... 13 percent
Forestry ..................................................................................................................................................................... 11 percent
Municipal Point Sources ........................................................................................................................................... 10 percent
Resource Extraction .................................................................................................................................................. 10 percent
While not clearly delineated as storm water sources, other than the municipal
point sources, all of the other sources are likely heavily influenced by storm water
runoff.
LAKES
Of the acres assessed, 45 percent are impaired (a total of 7.7 million acres out
of the 17.3 million acres assessed). Impairment sources are as follows:

Hydrologic Modifications .......................................................................................................................................... 18 percent
Nonpoint Sources ...................................................................................................................................................... 14 percent
Atmospheric Deposition ............................................................................................................................................ 13 percent
Land Disposal ........................................................................................................................................................... 11 percent
COASTAL RESOURCES
Of the square miles assessed, 51 percent are impaired (15,676 square miles out
of 31,072 square miles assessed). Impairment sources are as follows:

Industrial Discharges ............................................................................................................................................... 26 percent
Atmospheric Deposition ............................................................................................................................................ 24 percent
Hydrologic Modifications .......................................................................................................................................... 14 percent
Resource Extraction .................................................................................................................................................. 12 percent
Common pollutants found in storm water include pathogens, nutrients, sediment,

oil and grease, toxic metals, and debris. In cold weather climates, road salts are an
additional pollutant of concern that have been shown to impact water quality.
Transportation infrastructure plays a significant role in storm water runoff. An-
nual pollutant loads generated from roads and associated facilities were estimated
as part of the Agencys ongoing effort to develop national guidelines for the construc-
tion and development industry (FHWA 1996, 2001, HUD 2002, USDA 2000, NWS).
These estimates do not account for inplace management practices to control storm
water runoff, but are for uncontrolled pollutant loads delivered to the nations wa-
terways. Some representative parameter estimates include:
Annual loading (1,000

Parameter metric tons/yr)
Total Suspended Solids ........................................................................................................................ 4,00064,000

Phosphorus ........................................................................................................................................... 980
Oil and Grease ..................................................................................................................................... 2002,000
17
Annual loading (1,000

Parameter metric tons/yr)
Mercury ................................................................................................................................................. 260

Zinc ....................................................................................................................................................... 4.574
Cadmium .............................................................................................................................................. 03
Arsenic .................................................................................................................................................. 4.65
Copper .................................................................................................................................................. 2560
Iron ....................................................................................................................................................... 190820
Lead ...................................................................................................................................................... 6140
Chromium ............................................................................................................................................. 03
Magnesium ........................................................................................................................................... 85
Total Kjeldahl Nitrogen ......................................................................................................................... 284,400
Chemical Oxygen Demand .................................................................................................................... 1,20022,000
These national estimates are appropriate for assessing the overall magnitude of
the potential problems generated by runoff from roads, highways, and related facili-
ties. Nevertheless, it should be recognized that different pollutants are considered
more significant based on the designated use of the receiving water body, among
other factors. Aquatic life protection in streams will generally emphasize oxygen de-
mand or metals; the effect of phosphorus is often the most important consideration
in lakes. In general, the impacts of any typical runoff constituent have to be consid-
ered in conjunction with the type of receiving water, its use, and overall ecological
health.1
Senator JEFFORDS. If EPA expands the application of this section
to exempt the oil and gas industry, how will permit holders in the
industry that have been regulated since 1990 be affected?
Mr. MEHAN. That is a hypothetical question, Senator. At this
point, no such decision has been made. I am not in a position to
speculate.
Senator JEFFORDS. With respect to TMDLs, what environmental
effects would result from allocating a lump sum of gross load to
nonpoint sources of water pollution instead of the more specific al-
locations?
Mr. MEHAN. Again, keep in mind that a TMDL does not create
any new regulatory authorities, whether it is on air deposition, or
row crop agriculture, or even the operation of dams. The power of
a TMDL is in the information that it provides to stakeholders at
a watershed level to be able to understand what is contributing the
impairment of those waters.
My own preference, if I were back in the State government where
I did spend 13 years, would be to have as finely differentiated data
set as I could get so I could have a road map as to what needs to
be done, either through voluntary approaches on the nonpoint
source side, or subsidy approaches, or regulatory on the point-
source side.
We could do a TMDL using strictly lump sum allocations to
nonpoint sources. The problem is that you would not know if it
1 U.S. Department of Housing and Urban Development (HUD). 2002. Housing Completions (as
reported by the U.S. Census Bureau) Washington, DC. Available at www.census.gov.
U.S. Department of Transportation, Federal Highway Administration (FHWA). June 1996.
Evaluation and Management of Highway Runoff Water Quality. FHWA Office of Environment
and Planning. Washington, DC. Publication Number FHWAPD96032.
U.S. Department of Transportation, Federal Highway Administration (FHWA). 2001. Highway
Statistics 2000. FHWA Office of Highway Policy Information, Washington, DC. Publication
Number FHWAPL011011.
National Weather Service (NWS). Hourly rainfall data, collected for selected sites within each
of the 19 U.S. Ecoregions for the past 30 years.
U.S. Department of Agriculture (USDA), National Resources Conservation Service. 2000. 1997
National Resources Inventory. Washington, DC.
18
were good or bad without at least some degree of sub-categoriza-

tion. That may not have to be in the TMDL itself. It could be in
a sidebar submittal, if you will, or some other document that gives
us the technical background. Many people are nervous about put-
ting things in the TMDL because of regulatory consequences.
Again, I would come back to my initial comments. What we are
wrestling with is what degree of specificity do we need to be able
to make an informed technical evaluation of the quality of the pol-
lution budget in the TMDL. Hopefully, we would keep in mind that
it is utility to local stakeholders.
If we just only had a lump sum allocation for all point sources,
we might be able to approve the TMDL, but it would be hard with-
out some understanding of how that lump sum budget was put to-
gether from the bottom up, so to speak.
Senator JEFFORDS. Mr. Chairman, I ask unanimous consent that
the letter that Senator Graham and I sent to the EPA on trading
on July 17th of this year, and EPAs response be inserted into the
record.
[Material supplied follows:]
October 6, 2003.
Hon. MARIANNE HORINKO, Acting Administrator,
Environmental Protection Agency,
Washington, DC.
DEAR ACTING ADMINISTRATOR HORINKO: Thank you for your July 17, 2003 re-
sponse to our letter raising concerns regarding the Agencys failure to effectively en-
force Clean Water Act requirements. We appreciate your detailed response to our
questions regarding the Agencys plans to respond to the Environmental Protection
Agency (EPA) Inspector General and the Office of Enforcement and Compliance As-
sistance (OECA) recommendations for improving the EPAs performance in enforc-
ing the Clean Water Act.
We are concerned that your letter does not present a more aggressive approach
to dealing with the substantial rate of non-compliance with NPDES permits. Your
letter dismisses the 45 percent reduction in EPA formal enforcement actions by cit-
ing an undocumented redirection of resources to wet weather enforcement actions.
The only significant step described in your letter to increase or change the enforce-
ment program is the creation of a Facility Watch List, a useful tool, if it is actually
used by decisionmakers to take enforcement actions. Below we are requesting an-
swers to specific questions on the degree to which the Watch List has actually been
implemented.
We are concerned that although the EPA provided a detailed response to our
questions regarding the Agencys enforcement of the Clean Water Act, the EPA is
not taking the steps that are needed to bring our Nation closer to the goal of clean,
safe water.
WET WEATHER ENFORCEMENT
In your response, your letter indicates that the 45 percent reduction in EPA for-
mal enforcement actions is, due to the focus on wet weather related cases. . . .
In EPA briefings immediately following the release of the OECA report, the Agency
indicated that it believed this to be the case and that the Agency would be con-
ducting an analysis to gather data and information to support this belief. Based on
the conclusions presented in the Agencys letter, we are assuming that the analysis
is complete. Please provide a copy of the analysis, including a description of the wet
weather enforcement cases pursued during the 19992001 period that led to the di-
version of resources from the NPDES majors program and a comparison in terms
of FTEs and other resources required to conduct an NPDES major enforcement ac-
tion versus a wet weather enforcement action. In your letter, the Agency also states
that it will be looking at the impact of wet weather events on CAFOs, CSOs, SSOs,
and Storm Water, and the relative impact of these wet weather events on environ-
mental degradation when compared to the noncompliance of NPDES major
19
permitholders. Please describe the results of this study if it has been completed, its
scope, your methodology, and the intended use of the results.
State Role in Enforcement
Your letter describes the 9 percent increase in state formal enforcement actions
as encouraging. What analysis is the Agency conducting to determine the cause
of this increase, and if this is a trend or an anomaly? What has the Agency done
to encourage formal enforcement actions at the state levelfor example, will the
EPA seek to provide additional resources to states to increase formal enforcement
actions? Has the EPA made a policy decision to pursue formal enforcement actions
at the state level and informal enforcement actions at the Federal level? If so, please
provide a copy of the decision documents. On a related issue, your letter states that
during performance reviews, EPA will evaluate whether or not states are escalating
enforcement actions and penalties over time. Has this occurred? If so, please de-
scribe the results of EPAs review.
FACILITY WATCH LIST
One of the major corrective actions that your letter states the EPA will be taking
to improve enforcement is the creation of a Facility Watch List that will be used
to target resources and enforcement actions at serious violators. We believe that this
tool has the potential to improve enforcement if the decisionmakers who receive the
watch list actually use it to prioritize enforcement actions. We understand that the
first version of this list was scheduled for distribution to EPA Regions during the
first 2 weeks in September. Please provide a copy of this list and a description of
the enforcement actions that have begun since the Watch List was distributed. In
addition, please provide a description of the difference between the Watch List and
the Exceptions List previously in use at the Agency.
While the creation of the Watch List may address high profile, serious violators,
it does not necessarily address the 51 percent of the facilities in Significant Non-
Compliance (SNC) that do not recover without a formal action. Please describe how
you will ensure that the full 51 percent of facilities in SNC that require a formal
enforcement action to return to compliance actually receive one. For example, does
the Agency intend to request additional funds in its Fiscal Year 2005 budget for this
purpose?
Types of Significant Non-Compliance
Your letter makes an effort to distinguish between the different types of signifi-
cant noncompliance as effluent-related, reporting, or schedule violations. In a sys-
tem of compliance based wholly on self-reporting, it seems evident that the integrity
of the system depends on the equivalent treatment of reporting violations and other
types of violations. Does the Agency have a policy to treat different types of SNC
violators differently? If not, is EPA considering adopting one?
DATA QUALITY
In addition, your letter describes the data quality problems that exist in the Per-
mit Compliance System (PCS) data base. You state that EPA will encourage states
to report penalty data prior to the implementation of the modernized PCS. What
actions has the Agency taken to encourage the reporting of penalty data by states?
CHANGING PERMIT LIMITS TO IMPROVE COMPLIANCE
In a repeat of a pattern that is becoming all too familiar, your letter states that
OECA intends to have a dialog with the Office of Water to explore the problem
of extremely high exceedances of permit limits by pollutant dischargers that hold
NPDES permits. The OECA report recognized that permit limits are established
based on human health protections, but it also indicated that a dialog would address
the question of whether permit limits are currently too high. Has this dialog begun
and if so, what are your results to date?
FEDERAL FACILITIES LACK OF COMPLIANCE
In response to recommendation #10 of the OECA report, you indicate that OECA
will begin working with the Federal Facilities Enforcement Office to determine the
root cause and possible solutions of the proportionately higher rate of non-compli-
ance with NPDES permits among Federal facilities. Has this work begun and what
are your results to date?
20
PROGRESS ON RECIDIVISTS
In response to recommendation #12 of the OECA report, your letter indicates that
OECA has already begun reviewing the Agencys existing information on recidivists.
Please describe the results of this effortwhat behavior patterns among recidivists
has the Agency identified and how do they compare to other types of violators?
PCS Modernization Effort
What is the status of the EPAs decision to potentially modify the scope of the
modernized PCS data base?
There are several actions related to the PCS data base modernization that you
identified in your letter as items to be completed by the end of September 2003.
What is the status of the Agencys efforts to develop a realistic cost estimate for the
PCS modernization effort, a cost-benefit analysis, and a plan for fully funding the
PCS modernization effort?
Your letter indicates that 2 FTEs will be added to the PCS modernization effort.
What is the timing for this change and what is the source of these FTEs?
Thank you for your prompt attention to this matter, and we look forward to your
timely response.
Sincerely,
James M. Jeffords, Charles Schumer, Frank Lautenberg, Jon S. Corzine,
Bob Graham, Joseph I. Lieberman, Hillary Rodham Clinton, John
Kerry, Ron Wyden, Joseph Biden, Christopher Dodd, Russell Fein-
gold, Max Baucus, Barbara Boxer.
Senator JEFFORDS. I have one more question.
Trading has been used successfully to achieve pollution reduction
caps that are reduced incrementally and that have been used to
create value in the credits, and to ensure that the overall result of
the trading application of the program is a reduction in pollution.
Because the water quality trading policy does not use caps, and you
allow trading outside of a TMDL, how to do you intend to ensure
that the cleaner water is a result of using the trading policy?
Mr. MEHAN. In the context of the Clean Water Act, the caps are
the water quality standards. Some people are looking for the word
cap in there. That may disappoint some. But the whole drift of
the policy is to use, as I said, water quality standards, as our pulse
star, as our object, as our limit our cap, if you will.
Whether or not you have a TMDL, you still have to respect and
deal with the water quality standards. The analogous problem is
trying to write a NPDES permit without a TMDL. If you have a
narrative standard, you still can write a NPDES permit. It would
be easier with a TMDL allocation. I will grant you that. But you
can still do it.
We are not contemplating trading without the limitation of the
water quality-based standard. Again, we do not allow trading just
to meet the technology-based standard, but only to achieve the
water quality-based standard.
Senator Thomas, do you have any further questions?
Senator THOMAS. No, Mr. Chairman.
Senator CRAPO. Senator Wyden, do you want to ask any ques-
tions?
OPENING STATEMENT OF HON. RON WYDEN, U.S. SENATOR
FROM THE STATE OF OREGON
Senator WYDEN. I do, Mr. Chairman. This is a matter of enor-
mous importance to my hometown of Portland. I think Mr. Mehan
21
is aware of it. I will tell you, Mr. Mehan, I think the most chari-
table thing that I can say with respect to your policies in this area
is that they are just absolutely incoherent. I want to see if we can
make a little sense out of exactly what is going on.
We looked at the new report, the February 2003 report, on major
facilities with waste water permit violations. The report that was
done by the EPA Office of Enforcement and Compliance found that
EPA frequently has tolerated significant violations of clean water
permits by industrial polluters even in the case of repeat offenders.
Your Agency, the EPA, found that in the past 2 years only 24 per-
cent of the facilities in significant noncompliance received formal
25 enforcement actions.
This is what your Agency found with respect to major violators.
At the same time, you are going gangbusters to come after our
hometown that is working very hard to deal with enforcing the law
and with your Agency. The city of Portland has had in place an en-
forceable agreement with the State of Oregon for more than a dec-
ade. Our city is already more than halfway toward meeting its goal
of 96 percent reduction in sewer overflows. It is a more stringent
standard than your enforcement guidelines. Our rate payers have
spent more than $500 million to address the sewer overflow. We
are getting clobbered in terms of these rates.
For the life of me, I cannot figure out when your own office is
saying that you will not go after major violators, significant recidi-
vists, with respect to Clean Water violations. Instead of targeting
them, you are going after the people in my hometown. As you can
probably tell, I have pretty strong feelings about this.
With the Chairs permission, I am going to ask you some detailed
questions. This is of such importance to my constituents. Maybe
you can just tell us generally this. What is the philosophy behind
letting so many repeat significant violators off the hook, and then
going after my hometown with hobnail boots when they are work-
ing so hard to be in compliance?
Mr. MEHAN. First of all, I do not mean to be the Artful Dodger
here. I am in the Office of Water and am not in the Office of En-
forcement. I will communicate your sentiments to my colleague,
J.P. Suarez, the Assistant Administrator for Enforcement.
I am really not in a position to discuss the Portland issue. It is
subject to litigation. It has been referred to the Department of Jus-
tice. I understand negotiations are ongoing. Again, this is carried
on by our Office of Enforcement and not by the Office of Water.
As to your general point, we are concerned about the overall in-
tegrity of the NPDES program. Enforcement does begin with the
NPDES permit. We are in the middle now of working with the
States to put in place what we are calling a permit integrity pro-
gram to begin to shore up the program which is getting a little
frayed at the edges. We have 19 administrative petitions chal-
lenging our delegation of the NPDES authority around the country.
We have had five lawsuits. We had a Federal judge in Indiana who
was about ready to return the CAFO program. We have problems
with Louisiana that we are working through.
Again, in the face of really financial stressful times with our
State partners, we still need to return to the basics and shore up
22
the NPDES program. As to the decisions on enforcement, I must

respectfully refer you to my colleague, Mr. Suarez on those.
Senator WYDEN. Just out of curiosity, are you telling the sub-
committee, then, for the record, that EPAs Assistant Administrator
for Water does not have anything to do at allnot from a policy
standpoint, and not from any standpointwith respect to how the
Clean Water Act is enforced? Is that what you want to commu-
nicate today?
Mr. MEHAN. I deal with it at the front end in terms of the issues
in terms of the functioning of the NPDES program. But I am never
consulted on an enforcement action.
Senator WYDEN. I was expecting that you might say that this is
not exclusively your providence, but do you not think it would be
useful at the front end to say, We are going to go after major vio-
lators, if the policy is to be to go after repeat major violators rath-
er than to chase down a city that has an outstanding record in the
environment and is doing somersaults to work with all of you to
be in compliance?
That is a front-end judgment. It is my view that your office and
the Agency has a stilted set of priorities, priorities that seem to me
to just be incoherent. I would hope that using your front-end au-
thority, as you could characterize it, you could send a message that
it is time to go after major violators when people are trying to meet
you more than halfway, that that be considered.
Mr. MEHAN. Let me clarify this. There is another front-end role
that we play in the Office of Water in conjunction with our col-
leagues in Enforcement of setting overall priorities. While you can
define a major violator in a lot of different wayswhether they are
in or out of compliance or how many violationswe prefer to use
a relative risk screen. Where we are in total agreement with the
Office of Enforcement is that wet weather issues, specifically com-
bined sewer overflow issues, rank at the top of the pyramid in
terms of enforcement priorities. Without getting into the details of
the Portland case, that is what is at issue in Portland.
Senator WYDEN. My time is up. I would only say that in your
February 2003 report, you said, Target polluters with the worst
compliance records and without enforcement action.
By any stretch of the imagination, that is not my hometown.
That is not. You can say that they have enforcement issues. We are
not disputing that. That is why we are working hard to meet the
Agency more than halfway.
But by your own report and by the own kind of central rec-
ommendation, you are honoring it more in the breach than in the
observance.
I thank you for the time, Mr. Chairman.
Senator CRAPO. Thank you very much.
Mr. Mehan, we thank you for the time and effort you have made
to be here before us today. We appreciate your attention to these
critical issues.
Mr. MEHAN. Thank you, Mr. Chairman.
We will call up our second panel. Dave Mabe, administrator,
Water Quality Division, Idaho Department of Environmental Qual-
ity; Juli Beth Hoover, AICP, director of planning and zoning, city
23
of South Burlington, VT; and Michael Samoviski, city manager, city

of Hamilton, OH.
While these witnesses are coming forward, let me remind you
that we are probably going to be interrupted by a vote here. We
are trying to keep everybody on time. Please pay attention to the
clocks.
I have already introduced Mr. Mabe from Idaho. David, it is good
to have you with us. Please proceed.
STATEMENT OF DAVID MABE, ADMINISTRATOR, WATER QUAL-
ITY DIVISION, IDAHO DEPARTMENT OF ENVIRONMENTAL
QUALITY
Mr. MABE. Thank you, Mr. Chairman.
My name is David Mabe. I am the administrator of Water Qual-
ity Programs at the Idaho Department of Environmental Quality in
Boise. I bring greetings to you, Mr. Chairman, from Governor
Kempthorne and from Director Allred.
I am testifying today to share with you the perspectives of the
State of Idaho regarding the challenges that we face implementing
the Clean Water Act and the need for regulatory or statutory
changes to the program.
As background for what I am about to present, I would like to
give just a brief overview of the implementation in Idaho of Clean
Water Act programs. We have completed 484 TMDLs, primarily in-
volving sediments, nutrients, and temperature, but we have also
written TMDLs for other pollutants.
Next month, we will submit to the Environmental Protection
Agency a revised 303(d) list done in the integrated report form, as
per EPAs new guidance. It is set up in accordance with the EPAs
new guidance regarding a five-part list. The call for data, public
comment, and review was accomplished electronically. Our 305(b)
report was submitted in electronic format. We are allowed now
greater public access to this process than ever before.
Our monitoring program is designed to cover the State in a 5-
year period using a probabilistic monitoring approach. This in-
volves the development of random sites and then refines the areas
in progressive years until the fifth year when we focus all the mon-
itoring in those areas that we think have the highest probability
of being impaired.
We are making the Clean Water Act TMDL process work in
Idaho, but I believe there are some fairly simple changes to be
made that could lower costs, make the process be more sensible on
the ground, provide better environmental protection, and allow
public participation in a more meaningful way.
The first of those is the listing, the delisting, or the 303(d)/305(b)
process. We would like to support a longer schedule to comply more
with our monitoring approach in the State of Idaho. We are sug-
gesting a 5-year timeframe for reporting using the integrated re-
port format. It is very difficult and expensive for us to do our moni-
toring in a timeframe less than a 5-year period.
Simply put, we do not have the budget to accomplish a statewide
monitoring program in a timeframe of less than 5 years. In addi-
tion, many of the improvements that we look for in impaired wa-
ters are not going to be apparent in a 2-year timeframe. To report
24
on this shorter timeframe is not just meaningless. It is also be-

comes a burden to the process and to public participation in the
process.
To give an example, in our first 2-year cycle, we would still be
very early in the process of probabilistic monitoring. We would
have no new data to report. At the end of the 4-years, the second
2-year cycle, we still have not completed the 5-year probabilistic
monitoring timeframe and have no new data to report.
In the 6-year of a 2-year cycle, we have waited, in essence, 1 year
longer than necessary to get the data out and report to the public
on the changes in Idahos water quality. Valuable staff time and re-
sources are diverted to make two reporting cycles that really are
relatively meaningless. By the time we do get around to that third
reporting cycle where we have some things to say, I think public
interest is going to be waning.
In recent rulemaking and guidance efforts, EPA has also sup-
ported a very important concept in reporting and differentiating be-
tween pollutants and pollution. We think that this help create a re-
port to the public that focuses them on the issues that we can re-
solve with the TMDL process. These are pollutants that can be al-
located and can be improved upon using the TMDL process.
Idaho is a State that is blessed with surplus water that we are
able to use for irrigation purposes, and periodically those diversions
can cause water quality problems. But those diversions are not
something that can be quantified and solved through the TMDL
process.
So the new listing and reporting format does give us an ability
to report those problems, but not in the context of confusing the
public that these are issues for which TMDLs can be completed.
It does, then, make the public aware of those issues. They can
work with our Department of Water Resources, or agencies that do
have authority to deal with those problems in resolving water con-
cerns in those areas.
Another concept that is very important to us is to allow more
flexibility in how pollutant loads are allocated. Currently, in both
statute and rules, TMDL stands from Total Maximum Daily Load-
ing. The rules have bent that just a little bit, trying to create a
process that really works more sensibly on the ground. But I think
that at some point we are going to be subject to legal challenges
regarding that.
Pollutants, like sediment, are not loaded on a daily basis.
Nonpoint source loadings are generally not occurring on a daily
basis. They occur during storm events and occur periodically. The
definition of a TMDL makes it very difficult to work with them.
The approval process is another issue that probably causes a
great deal of waste in administration of the program. Currently, in
the system EPA has to affirmatively act on standards, on TMDLs,
and on other listing processes. I think that it is very important
that each Agency involved in these listing processes is trying to
create an administrative record. They are all subject to legal chal-
lenge. We are duplicating a great deal of work at the State and
Federal level in creating administrative records.
In Idaho, industry challenges, or challenges from groups that
want to see TMDLs that are less stringent, generally occur in State
25
court. Challenges that think we have not done enough will occur
in Federal court. We are allowing different groups the kind of
venue shop by having all these different agencies have an affirma-
tive duty to approve. We would really like to see a process that
changes slightly so that we can allow the Federal Agencies to ob-
ject to issues where they feel there are concerns.
Thank you very much, Mr. Chairman, for the opportunity to tes-
tify. I look forward to working with the committee to resolve some
of these issues. I would ask that my complete testimony be in-
cluded in the record in its entirety.
Senator CRAPO. Without objection, so ordered. Thank you very
much, Mr. Mabe.
Ms. Hoover.
STATEMENT OF JULI BETH HOOVER, DIRECTOR OF PLANNING
AND ZONING, CITY OF SOUTH BURLINGTON, VT
Ms. HOOVER. Good morning, Senators.
I am Juli Beth Hoover. I am the director of planning and zoning
for the city of South Burlington, VT. Among my other storm water
hats, I am the director of our Water Quality programs in South
Burlington, and also the Chittenden County demonstration project
through EPAs National Decentralized Water Resource Demonstra-
tion Grant Program.
Storm water pollution has become a major economic problem for
Northwest Vermont. Basically everything that is subject to the
Phase II regulations in Vermont drains into Lake Champlain.
Whatever pollutants we put into Lake Champlain we then turn
around and pay the Champlain Water District to filter and treat
before it becomes our drinking water.
Therefore, with the cost to our recreation-based economy, and the
cost of filtration, we are really finding in Vermont that imple-
menting the Phase II program is a good investment, especially con-
sidering what we are investing in the GASB accounting standards.
Spending between $4 and $12 per capita per year is really making
sense, given the economic impact of storm water pollution on Lake
Champlain and on our water filtration costs.
Being good Vermonters, we have aggressively looked for cost sav-
ings and achieved them largely through the use of inter-municipal
agreements on everything from the legal work required to imple-
ment the program, to storm water mapping and planning, and also,
very importantly, meeting the public education and public outreach
standards.
We were concerned about the potential costs and drain on staff
resources from that component of Phase II. We are pleased to say
that we have managed to meet that in what we think will be a far
more effective and certainly cost-effective manner through this
inter-municipal agreement.
Our biggest initiative on storm water treatment, besides Phase
II, is the use of decentralized or distributed storm water systems
to deal with some of our most difficult and challenging storm water
problems and economic problems.
Basically, decentralized or distributed systems, take land that no
one really wants to build on, or could build on, and retool it to do
something useful for water quality and for development. Last year,
26
Congress directed the EPA to try to spend $75 million of the over
$1 billion in State revolving fund moneys on this type of distrib-
uted approach was to both storm water and to onsite septic sys-
tems.
I would like to encourage you to do more for this program which
is extremely cost effective, extremely good for municipalities and
businesses, and really terrific for clean water.
The picture on the left is the frozen tundra of Bill Shearers
Chevrolet on Route 7. Here it is on the left. This is not a picture
we put on the postcards of Vermont. This is where we go to get our
snow tires put on. Basically, Bill Shearer needed some capacity for
storm water so he could expand his business, as did two of his
neighbors.
The City and the Champlain Water District had a pressing inter-
est in stopping the petroleum hydrocarbons and the other polluted
run off from these auto dealerships and gas stations on Shelburne
Road from getting into the Lake right near the intake for the water
district.
So, with some creative head-scratching and engineering, Bill
Shearers back yard has become a 4-acre constructed wetland treat-
ment system. We did not lose land for development and business
growth. Instead, we gained the opportunity to grow Bills business.
Our monitoring this season has shown that we are getting excel-
lent removal of these pollutants.
The problem is that this system cost $300,000. We had to scrape
up 13 different grant sources to pay for it. Trying to administer 13
different grants will dissuade anyone from trying with this ap-
proach. Being stubborn, we are trying three more of these systems
in other problem spots; nonetheless, through our demonstration
grant through the EPA national program. This one will deal with
runoff from commercial plazas at the interchange with the South-
ern Connector, using land that is currently used for the cloverleafs.
This one will use the land by an interstate on-ramp to support
development of our city center. This one is planned in the city of
Burlington on Engelsby Brook to remove pollutants that we know
are causing chronic beach closures at Oakledge Park, which hap-
pens to be a block from my house. I am very tired of that Area
Not Recommended for Swimming sign, especially in the middle of
the summer.
Senators, we know that we have the ability through these decen-
tralized systems to do a great job on water quality. We need a con-
sistent, predicable, funding stream to do this, whether it is through
a set-aside in the SRF, or expansion of storm water funding
through the demonstration projects or other means.
Thank you. I look forward to your questions. I would ask that my
complete testimony be included in the record in its entirety.
much, Ms. Hoover.
Mr. Samoviski.
STATEMENT OF MICHAEL SAMOVISKI, CITY MANAGER, CITY
OF HAMILTON, OH
Mr. SAMOVISKI. Good morning. It is a pleasure to be here. I am
Michael Samoviski, city manager for the city of Hamilton, OH.
27
Hamilton is located in Southwestern Ohio. It has a population of

62,000 people. We operate our own treatment works and a separate
storm water collection system. In compliance with the promulgated
Phase II storm water rules, Hamilton did receive, under the
NPDES, a general storm water discharge from it in April 2003.
To obtain this permit, we did develop a necessary storm water
management plan which was submitted to the regulatory Agency
in March 2003. The plan does encompass the six minimum controls
mandated by the Phase II rules.
Hamiltons Council is seriously concerned about implementation
and enforcement of this recently issued permit, especially in light
of our very challenging local and State economic climates. As the
City prepared its storm water management plan, it became appar-
ent to the City Council that the costs associated with this imple-
mentation will have to be assumed by our local government, that
is, our citizens and businesses since surplus municipal moneys for
this purpose are nonexistent.
The City anticipates having to form and implement a storm
water utility to achieve the necessary revenues to implement our
plan. The charges will be based upon the amounts of impervious
areas on various parcels of land. In Ohio, according to the Ohio Su-
preme Court, storm water fees of this sort, since they are utility
charges, must be applied evenly and consistently without regard to
tax status or land use. This means that all residents, businesses,
schools, governmental and institutional complexes will be subject to
these charges without exception.
Each residential unit would certainly pay a flat monthly charge,
but the nonresidential units would pay a much higher charge based
on the larger expanse of impervious areas. Hamiltons projected an-
nual expense attributable with complying with the Phase II pro-
gram is an additional $1.6 million over the $800,000 that the City
now spends on storm water activities.
Since Phase II is a federally unfunded mandate, the City expects
to have to raise this revenue by imposing a monthly fee of up to
$550 on residential customers, and a multiplier effect on nonresi-
dential users.
A few examples will illustrate our point. Hamiltons First Baptist
Church was determined to have an impervious factor of 68 times
that of a single equivalent residential unit, or ERU. The Churchs
expected storm water utility charge would be $374 per month.
The Smart Paper Company, a manufacturer of high quality pa-
pers, has an impervious factor 912 ERUs. Its monthly charge
would be $5,017 per month. Our local high school has an imper-
vious area equal to 243 ERUs. Its monthly charge would be $1,338.
It goes on with other related examples.
The federally unfunded mandate is being imposed upon local
communities at a time when our economies are stagnant and our
Nation is facing huge deficits. Hamilton is no exception. Local
budget deficits are already predicted for 2004, and the States
budget is in such distress that no funding for cities is available for
Phase II compliance.
Now is not the time for distressed cities, such as Hamilton, to
impose a new monthly storm water utility charge across our com-
munity to achieve Phase II compliance. When the local economy
28
improves, Hamiltons businesses and citizens may be better able to

absorb this type of fee.
In our currently flagging economy, however, our local businesses
cannot afford this additional expense, nor can our citizens who
have very recently been called upon to take on more of the public
safety burden by paying higher taxes for police and fire fighter
staffing.
Accordingly, the city of Hamilton respectfully asks that you, our
elected Federal representatives in Washington, commence action
before Congress to enact a 5-year moratorium. This moratorium
could postpone the unfunded mandate to a time better suited for
requiring communities, such as our distressed city, to step forward
and implement the Phase II rules.
The city of Hamilton is not seeking to avoid serving as a good
steward of its river and receiving waters, but we are concerned
public officials seeking to strike a reasonable balance between the
stark reality of our current depressed local economy and continuing
environmental improvement.
Thank you again for your attention and courtesy in allowing us
to address this committee. We were honored to receive your invita-
tion to appear and present our concerns. I would ask that my com-
plete testimony be included in the record in its entirety.
much, Mr. Samoviski.
I will advise everybody that the vote that was going to be at
10:30 a.m. has been delayed until 11 a.m. We have a reprieve for
a short time, but it is still going to happen to us.
Let me start out with a question with you, Mr. Mabe.
Mr. Mabe, as I listened to your testimony, it became evident to
me that a number of the concerns that the State of Idaho sees with
the implementation of the TMDL process have to do with process
the monitoring process, the approval process, and the like.
Could you just quickly summarize what the best income outcome
would be in terms of improvements? Please hit just three or four
of these things. Please summarize them so we have a short list of
what really needs to be done in terms of improvements in the proc-
ess.
Mr. MABE. Mr. Chairman, I would be happy to. I think if I could
make the changes in the new rule that we would look forward to
effectively operate the program, we would change the listing cycle
to a 5-year cycle. We would clarify the concept of pollutant loading
so that it is not a daily load; that it is just any qualified load that
fits the pollutant and the situation within the watershed. Then we
would change from an affirmative duty to approve standards,
TMDLs, and reports to give EPA the ability to object to a scenario
that they do not think is being protective or implementing the
Clean Water Act, to try to remove some of that administrative bur-
den.
It is the process that tends to bog us down and cause most of the
disagreements in getting watershed planning done and getting it
implemented on the ground.
Senator CRAPO. Thank you. You heard the questions I asked of
Tracy Mehan about the new rule and the context of the EPA being
involved more at the level of determining the overall load for a wa-
29
tershed, or for an area under discussion, and letting the States

then allocate properly.
I am sure you heard his answer as well. As I heard him, he said,
that is hard to do because in order to determine the overall load,
they have to determine how it is allocated. Could you comment on
that issue?
Mr. MABE. Mr. Chairman, I think there are clear roles for EPA
and for the States. EPA has, I believe, four staff in the State of
Idaho. The State of Idaho has about 200 staff working in the water
quality program. The actual on-the-ground work with stakeholders
needs to be done at the State levelto develop those allocations,
to do the monitoring, to determine what standards should be appli-
cable. Those should be worked on by the State. That should be sub-
ject to EPA approval and should be subject to appropriate sched-
ules. But in order to actually accomplish the work of writing
TMDLs, and of implementing TMDLs, the State is really the only
logical entity to perform that.
Senator CRAPO. How would we respond to the EPA? Let us take
the fact that right now they have four employees who are going to
have essentially approve the work of 200 people working at the
State level. It seems to me that there has to be some point at
which the EPA adopts or delegates in some context so that the
work of the State is accepted.
Is that happening now?
Mr. MABE. Mr. Chairman, it is an improving relationship, but
still a very difficult one. They are trying to create an administra-
tive record on every decision that they can defend. So if we submit
12 or 14 TMDLs a year, that small number of staff are trying to
review and approve each of those TMDLs and create an adminis-
trative record where they can defend the challenge.
That, I think, is the main point that I would bring today. If we
could shift that burden a little bit and let them focus on what they
think the priorities are, and a scenario where they could object to
work that they find substandard, and not have to go through the
motions of approving and creating substandard, and not have to go
through the motions of approving and creating administrative
records for the work which they believe is adequate.
Senator CRAPO. So for the purposes of preparing against poten-
tial litigation, they have to make it a reality that they redo the
work of the State of Idaho?
Mr. MABE. They have to create an administrative record upon
which to base their decision and be able to defend that in court.
I think that really is the rub. They start to question a great deal
work that has been done. They start to redo or reanalyze decisions
that have been made. It really slows the process down. They are
just not staffed to make decisions at that level.
Senator CRAPO. All right. Thank you very much.
I would just like to say to Ms. Hoover and Mr. Samoviski my
time is up. I really appreciate your testimony. You have raised very
interesting options that we need to pursue here more aggressively.
These are interesting and disturbing issues that we need to ad-
dress. I just want to let you know that we are paying very close
attention to the issues that you have raised.
Senator Jeffords.
30
Senator JEFFORDS. Thank you, Mr. Chairman.

Ms. Hoover, thank you for an excellent presentation. There was
a lot of work putting that together. I deeply appreciate what you
have done and your community for what they have done.
Can you describe the impact of storm water runoff from transpor-
tation infrastructure on your communitys overall storm water pro-
gram? Do you believe that your situation in Vermont is similar
throughout the country?
Ms. HOOVER. The impact of transportation infrastructure is huge,
just in terms of the sheer amount of imperious surface and runoff
and the nature of the runoff it creates. South Burlington, of course,
as you know, is one of the more heavily urbanized areas. The im-
pact is consistent throughout Chittenden County, and probably a
little less so in the rest of Vermont, except with places with an
interstate highway running through it.
The good news is that the land associated with our transpor-
tation infrastructurecloverleafs, on-rampstends to be out-
standing for use for decentralized storm water treatment. The
transportation enhancement program is starting to fund the use of
transportation enhancement dollars to do storm water management
in these transportation-related lands. That is a trend that we
would like to see continued to really deal with the impact of trans-
portation on our communities.
Senator JEFFORDS. How do the costs described by your colleague
from Ohio for storm water management compare with the costs you
are projecting for South Burlington? What are some of the possible
reasons for the differences?
Ms. HOOVER. Among the towns in Vermont subject to Phase II,
only South Burlington is looking at a utility. Our projected costs
at this point are about one-third of what my colleague from Ohio
is projecting.
I suspect that the State enabling legislation for utilities and util-
ity fees has a great deal to do with that. Storm water utilities tend
to be a different animal from conventional centralized water and
sewer utilities where the user rate gets applied across the board.
We certainly have been working with the Vermont legislature to
deal with that in an appropriate way to make sure that we can
keep the costs down and exempt those properties that need to be
exempted.
Senator JEFFORDS. Thank you very much. It was very wonderful
testimony.
Mr. Samoviski, did you use a contractor to develop your storm
water management plan? What role is that contractor playing in
the implementation of your plan?
Mr. SAMOVISKI. Yes, we did hire a consultant to advise us and
to work through the planning of the storm water management
plan. They developed a comprehensive program identifying the
issues for our community which is an aging industrial community.
The consultant has advised us continuously through the process
and has been working with our Department of Public Works to
oversee the implementation of the program.
We intend to use a variety of consultant services as we get into
the necessary steps of monitoring our local commitments to the
storm water regulations and controls. We will continually use that
31
consultant to upgrade our plan and to evaluate some of its effec-

tiveness.
Senator JEFFORDS. Mr. Mabe, I want to compliment you for your
testimony, too. I do not have a question for you.
Senator CRAPO. Thank you very much. I appreciate this panels
testimony. Again, as I said, your written testimony will be a part
of the record. You have provided some very valuable insights as we
look at how we can approach this legislatively and through our
oversight. Thank you very much.
Mr. MABE. Thank you.
Ms. HOOVER. Thank you.
Mr. SAMOVISKI. Thank you.
Senator CRAPO. We will call up our third panel now. We will try
to get through as much of the panel as we can before the vote is
called.
We have Steve Kouplen, president, Oklahoma Farm Bureau; Mi-
chael R. Lozeau, attorney, Earthjustice; Lee Fuller, vice president,
Government Relations, Independent Petroleum Association of
America; Rena Steinzor, professor and director, Environmental
Law Clinic, University of Maryland School of Law; and Jim Hall,
principal partner, Hall and Associates.
Let us go ahead and begin with the testimony.
Mr. Kouplen, would you please begin?
STATEMENT OF STEVE KOUPLEN, PRESIDENT, OKLAHOMA
FARM BUREAU
Mr. KOUPLEN. Thank you, Mr. Chairman, and members of the
subcommittee. My name is Steve Kouplen and I am the president
of the Oklahoma Farm Bureau. It is a pleasure to be here with you
today and talk with you about a couple of issues that are important
to agriculture and dealing with water.
On July 13, 2000, the EPA published final regulatory require-
ments for establishing Total Maximum Daily Loads under the
Clean Water Act. The Farm Bureau strongly opposed those regula-
tions, as we believe that they exceed the Agencys authority under
the Clean Water Act.
One of the most disturbing aspects of the now-withdrawn July
2000 rule was the Agencys conversion of the TMDL program into
a nationwide enforcement mechanism for all sources of pollution,
both point and nonpoint sources. We believe that the TMDL pro-
gram should respect the practical and legal differences between
point and nonpoint sources.
As the Clean Water Act has recognized for 30 years, the avail-
ability of endo-pipe technologies for point sources has made a pre-
cise command-and-control strategy feasible. Nonpoint sources, on
the other hand, cannot rely on any comparable technologies and
must, therefore, use less precise and more subjective best manage-
ment practices to achieve load reductions. Given the inherently less
predictable results of the measures available to nonpoint sources,
a command-and-control strategy for nonpoint sources has never
made any sense.
Congress went to great lengths in the Clean Water Act to ensure
that the EPA did not mettle in local land use decisions by dele-
32
gating nonpoint source control to the States in Sections 208 and

319. The 2000 rules undercut this approach and allow EPA to pre-
pare implementation plans that dictate how and when nonpoint
sources can use their land. States should have the freedom to im-
plement their TMDL programs at their discretion.
The fundamental balance of State and Federal control requires
that EPA ensure that the ultimate goal is properly defined, but
that the States alone determine how the goal will be achieved.
Thus, States, not EPA, must determine how loading capacity will
be allocated among the various pollutant sources. Such highly sub-
jective decisions necessarily require balancing the needs of com-
peting land uses based on considerations of equity, economy, and
public welfare.
As such, allocation decisions are the essence of implementation
planning that has been strictly reserved for the States. We urge
EPA to address this issue and the rulemaking on the TMDL rule.
In relation to the oil spill final rule impact on agriculture, EPAs
July 17, 2002, Oil Spill Prevention Control and Countermeasures
Rule will negatively impact farmers and ranchers and their co-
operatives across the country. While the subsequent January 9,
2003, rule providing an 18-month delay in the implementation al-
lows for more time to prepare, it does not reduce the overall cost
or impact.
There is now a growing realization across the country that the
oil spill rule and program will greatly affect agriculture. Farmers
and ranchers need to store fuel on their farms in order to control
costs and to fulfill time-sensitive production operations. Many
farms, especially in the Western States, require more than the reg-
ulatory threshold of 1,320 gallons of fuel storage for their oper-
ations.
On many larger farms, the fuel storage is not in one single loca-
tion. Above-ground tanks are placed where needed on the farm for
efficient equipment operation. These may be miles apart. Given the
dispersed nature of the farm fuel storage and the costs associated
with following the rule requirements for containment, integrity
testing, security, and plan development.
We believe that the threshold level is inappropriate for the fam-
ily farm and for those storages where a spill would have no impact
on water quality. In addition, the aggregation of many smaller
tanks, often in dispersed locations across farms and farmland,
must also be addressed so as not to place farms in a costly regu-
latory program where there is no threat to water quality.
The concerns about the impacts of oil spill rules warrant a com-
plete review of the final rule as it impacts agriculture. EPA should
address agricultural storage differences in a manner that allows
the farm and ranch community to protect water quality in an eco-
nomically and environmentally sound and effective manner. EPA
should look to the USDA for appropriate conservation practices and
technical support to address the oil spill issue and other water
quality issues with Agriculture.
We support using our U.S. Department of Agriculture Conserva-
tion Programs, such as Environmental Quality Incentives Program
and the Conservation Security Program, to help the agriculture
protect and improve our water quality.
33
Mr. Chairman, I thank you for the opportunity to be here. I

would ask that my complete testimony be included in the record in
its entirety.
much, Mr. Kouplen.
Mr. Lozeau, please proceed.
STATEMENT OF MICHAEL R. LOZEAU, ATTORNEY,
EARTHJUSTICE
Mr. LOZEAU. Thank you, Mr. Chairman. Good morning, Mr.
Chairman, and Senator Jeffords. I thank you for inviting me here
today to testify to assist the committee in overseeing the current
Administrations implementation of the Clean Water Act.
I would like to discuss the latest in a series of efforts by the cur-
rent Administration, described earlier by Senator Jeffords, of weak-
ening the effectiveness of the Clean Water Act and providing us
some insight as to the full scope of the Administrations efforts to
undermine one of our most critical and most successful environ-
mental laws.
I will be discussing Total Maximum Daily Loads for the most
part, which is a key part of the Acts comprehensive program, and
an essential element of how Congress envisioned the Act would
work. It is based on common sense, focusing all the Clean Water
Acts tools on a particular threatened or impaired water volume,
and having them work in concert to effectively and efficiently pro-
tect that water body.
The TMDL program currently is the best hope to eventually
achieve these as yet unattained goals of the Clean Water Act only
by addressing all sources of pollution and assuring that every
source control their share of the pollution. Will water quality be re-
stored and protected?
The existing TMDL regs, which were put in place by the Reagan
Administration and the first Bush administration, as late as 1992,
have begun paying off. The rate of TMDLs being established is ac-
celerating. The 1992 regulations have created considerable cer-
tainty in the TMDL program. The States are beginning to under-
stand how the process works, as well as the dischargers. However,
EPAs draft TMDL rule now threatens to undermine that progress
and undermine the certainty that was achieved over the last dec-
ade.
EPAs draft TMDL rule, if enacted, will undermine the TMDL
program in clean water by eliminating large number of waters from
the benefits of the TMDL program. For those impaired waters left
on the left, it would transform the TMDLs into meaningless num-
bers, devoid of specifics, and with only a vague relationship to the
water body and pollution sources it claims to be cleaning up.
EPA proposes, for example, to limit the waters to be protected by
TMDLs by suggesting a complicated mix of five categories of wa-
ters, only one category of which would require TMDLs. The other
four, in essence, exempt waters from the TMDL program. Unfortu-
nately, EPAs listing scheme would exempt waters that Congress
intended to be included in the mandatory TMDL program.
I would just focus on Category 4(b) which is a category of waters
that is identified by the Agency as impaired, but for which EPA or
34
the State has identified some programs other than a TMDL that
they claim will cleanup those waters. As a legal matter, these im-
paired waters meet the criteria for listing and must be slated for
TMDLs.
Second, the open invitation for EPA to the States to rationalize
not listing these impaired waters based on alternative programs in-
vites confusion and invites challenges from all sides. These are pro-
grams that as of that listing decision obviously were not working.
That is why the water was impaired.
This is the exception that may have swallowed the rule. I think
we will find States trying to fit as many impaired waters as they
possibly can into this one category in the hopes of getting out from
the TMDL obligation.
In regards to the substance of the TMDLs, EPA claims that the
Agency does not have to review TMDLs pollutant loading alloca-
tions, and that these unreviewable allocations can be done by the
States as gross allocations.
Without reviewing and approving TMDLs allocations of pollut-
ant loadings for specific sources, there is simply no way for EPA
to say in any rational way that it is implementing the standard
created in the statute. That standard is that the TMDL must be
established at a level necessary to implement applicable water
quality standards. Those standards apply throughout a watershed,
not just at some arbitrary downstream point.
Also, by lumping together a bunch of discrete sources and treat-
ing them as one through a gross allocation, EPA will render any
efforts at trading within that watershed ineffective without discrete
credits. For discrete individual sources, no trading will be possible.
EPA claims to be clarifying the TMDL program. I believe the op-
posite is true. If enacted, widespread uncertainty will result and we
will see more and more challenges to TMDLs by both dischargers
and by citizens. The rules would undermine existing permits that
have been the most notable success story under the Act. For the
many water bodies that have yet to achieve even the fishable and
swimmable standard, in essence the rule would have us go back to
the 1960s, before the 1972 amendments, to programs that have not
worked in the past. History shows us that that is the road to in-
creased pollution and increased impaired waters.
I would like to mention quickly two other issues that are before
the committee today. One is the oil and gas extension, the 2-year
extension from the Storm Water Phase II regs for oil and gas drill
sites. I believe that decision was a mistake. Section 1342(l)(2) clear-
ly does not create any kind of blanket exemption for that kind of
drilling or for the pollutants that are discharged. Sediment and
erosion from such sites affects our waters in the same way as sedi-
ment and erosion from any site.
In terms of the SPCC rules, we certainly are concerned, espe-
cially with the apparent conversations going on and negotiations
stemming from the challenges the oil and gas industry filed to
those rules regarding the extent of jurisdiction of the regulations
to waters of the States. I would certainly voice our concern there,
as well.
Thank you, very much. I would ask that my complete testimony
be included in the record in its entirety.
35

much, Mr. Lozeau.
Mr. Fuller.
STATEMENT OF LEE FULLER, VICE PRESIDENT, GOVERNMENT

RELATIONS, INDEPENDENT PETROLEUM ASSOCIATION OF
AMERICA
Mr. FULLER. Thank you, Mr. Chairman. Today I would like to
address two issues under the Clean Water Actstorm water per-
mitting requirements and new SPCC Plan requirements. However,
before addressing these regulations, I want to discuss the role of
the independent producer in domestic production because these
producers are the most significantly affected.
Independent producers are engaged essentially only in the explo-
ration and production, or E&P phase, of the industry. There are
about 7,000 of them, and they average 12 employees. Over the past
15 or more years, the domestic E&P industry has changed signifi-
cantly. Independent producers now develop about 85 percent of the
wells in the United States, producing 75 percent of domestic nat-
ural gas and about 60 percent of the crude oil in the lower 48
States. This role will continue to grow.
Another important issue is recognizing the role of marginal wells.
Marginal oil wells average about 2.2 barrels per day. However, col-
lectively they produce about 20 percent of our domestic oil, an
amount roughly equal to what we have been importing from Saudi
Arabia. Marginal natural gas wells account for roughly 10 percent
of domestic production. Of the 876,000 producing oil and natural
gas wells in the United States, about 650,000 are marginal wells.
These wells are the most economically vulnerable to price reduc-
tions or cost increases. Consequently, when independent producers
look at these EPA regulations, at issue is the effect that they will
have on reducing new production, or shutting down existing pro-
duction.
Turning first to the issue of storm water permitting for facility
construction, independent producers believe EPA incorrectly inter-
preted the Clean Water Act. The 1987 Act Storm Water provisions
have become inappropriately intertwined. Section 402(p) directs
EPA to require permits for storm water discharges under the
NPDES permitting program. At the same time, Section 402(l)(2)
specifically excludes discharges of storm water runoff from the
E&P facilities unless the discharge is contaminated by contact
with, for example, products, byproducts, or wastes.
IPAA believes that EPA has erred in its interpretation of the
Clean Water Act with regard to the relationship between these sec-
tions. Congress spoke directly to the exclusion of storm water re-
lated to E&P facilities in Section 402(l), the specific statutory ex-
clusion it should control.
Nevertheless, through a series of disconnected events, EPA has
pulled E&P construction into the scope of its storm water permit-
ting program. As a matter of law and policy, EPA should evaluate
the environmental risks and regulatory burdens created by its ac-
tions. In this case, IPAA does not believe that EPA made a reason-
able assessment of either the risk or the burden.
36
No where in the information that IPAA has reviewed, is there is

an indication of significant environmental risks associated with
E&P facility construction, nor is there any indication that EPA un-
derstood the burdens this program would impose. Recently, EPA
deferred until March 2005, the Phase II Storm Water permit dead-
line for E&P facilities that disturb less than 5 acres of land area.
In the meantime, EPA will have an opportunity to consider
whether there are alternative approaches that might be consistent
with EPAs statutory authority and that would be consistent with
the environmental impacts of construction of these facilities and
minimizing the regulatory burden. IPAA believes this action is es-
sential.
Finally, let me turn to the SPCC Plan regulations. SPCC Plans
have been required for several decades. Those Plans are in place.
Moreover, the Plan requirement is separate from any spill report-
ing and response requirements. Those responsibilities exist wheth-
er the facility has a SPCC Plan or not.
So at issue is whether the new requirements are necessary, ap-
propriate, and cost effective. From an IPAA perspective, IPAA be-
lieves they are not.
IPAA is unaware of any extensive information indicating that ex-
isting SPCC Plans have systemically failed. But the new regula-
tions would require extensive and costly plan revisions. IPAA be-
lieves that if there are elements of E&P operations where the plan-
ning process can be improved, those should be identified and a
cost-effective method should be developed to address them.
This is far different from the current regulations that are pre-
scriptive regarding specific planning actions, including construction
of certain containment structures. EPA has extended the compli-
ance date for its new SPCC Plan regulations for 18 months. IPAA
supports this extension and hopes that it will be used to reconsider
both the scope and the approach to SPCC Plan development.
The Clean Water Act generates many regulations to improve
water quality in the United States. But it is essential that regula-
tions target issues where action is truly needed and that they are
cost effective. These regulations do not meet these tests. Moreover,
they pose a significant risk to the development of new domestic oil
and natural gas resources and the continued operation of existing
production. In each case, EPA needs to reconsider its actions.
Thank you very much. I would ask that my complete testimony
be included in the record in its entirety.
much, Mr. Fuller.
Ms. Steinzor.
STATEMENT OF RENA STEINZOR, PROFESSOR AND DIRECTOR,
ENVIRONMENTAL LAW CLINIC, UNIVERSITY OF MARYLAND
SCHOOL OF LAW
Ms. STEINZOR. Mr. Chairman and members of the committee,
thank you for the opportunity to appear before you today on behalf
of the Center for Progressive Regulation to testify regarding EPAs
implementation of the Clean Water Act.
CPR is an organization of academics specializing in the legal,
economic, and scientific issues that surround health, safety, and
37
environmental regulation. This committee deserves much credit for

recognizing the importance of the topics you consider today, espe-
cially environmental enforcement.
Deterrence-based enforcement lies at the core of an effective reg-
ulatory program designed to maintain and improve water quality.
Yet, congressional oversight of EPAs enforcement record has been
sporadic, and without such oversight, it is difficult to hold the
Agency accountable for keeping the environmental cop on the beat.
There are ample signs that the environmental cop is not only off
the beat; he is asleep in his cruiser. The latest numbers indicate
a precipitous decline in every measure of enforcement effectiveness
from cases brought and penalties paid to staffing levels. The num-
ber of EPA inspection and enforcement staff has fallen to its lowest
level since the establishment of the Agency, dropping by more than
12 percent since the Bush administration took office.
Violators have paid 64 percent less in fines for breaking environ-
mental laws during the first 2 years of the Bush administration
than they did under the Clinton administration. The average civil
penalty paid by polluters has dropped more than 50 percent, and
the money spent on supplemental environmental projects has
dropped by 77 percent.
In the Clean Water Act area alone, the number of inspections de-
clined by 8 percent. There was a 50 percent decrease in the number
of informal enforcement actions, and a 45 percent decrease in for-
mal actions. Despite this disgraceful track record, as Senator Jef-
fords mentioned earlier, the Administrations 2003 budget request
eliminates 200 enforcement personnel.
These changes are not abstract. They directly threaten water
quality and hurt people. As just one example, an EPA analysis con-
cluded that 13 percent of major sources emitting toxic pollutants
into the Nations surface waters exceeded their permit limits by
more than 1,000 percent. In that same report, EPA reported that
significant noncompliance by major polluters was on the rise, in-
creasing by 8 percent between 1994 and 2001, to a grand total of
one-quarter of all such sources engaged in blatant violations of the
law.
Today you will hear a witness challenge the wisdom of one small
subset of criminal enforcement under the Clean Water Act that is
typically used to punish oil and gas companies that cause disas-
trous spills. The oil and gas industry has already urged you to con-
sider amendments to undercut these provisions, adding insult to
the gross injury already visited on EPAs enforcement program.
Not only do I disagree with the reasoning that underlies these
complaints, I believe they can be best characterized as fiddling
while Rome burns. They distract attention from the much more im-
portant point that EPAs entire enforcement program is on the
ropes.
These complaints are based on a false premise. The most respect-
able argument for weakening the law in this area is the concern
that the possibility of criminal enforcement has made witnesses re-
luctant to speak frankly with an Agencys investigators.
Much the same argument could be made in any area where
criminal prosecutions are possible. Yet, it is difficult to imagine any
38
serious person arguing that we should repeal criminal laws because

they make potential witnesses uncomfortable.
The cases pursued by the Department of Justice involved very
careless, egregious conduct. The question before you is: Which is
more effective, creating a strong incentive to prevent such spills, or
gaining some undocumented additional cooperation after the fact?
The Nation faces many challenges at home and abroad. The
economy is worsening and the funding for domestic programs con-
tinues to shrink. In this environment, deterrence-based enforce-
ment is crucial because the only alternative is the far more expen-
sive practice of cajoling law breakers back into compliance.
Thank you. I would ask that my complete testimony and the
chart be included in the record in its entirety.
much, Ms. Steinzor.
Before you begin, Mr. Hall, let me tell you that a vote is under-
way. However, our Chairman, Senator Inhofe, I understand is vot-
ing and coming this way so he can take the Chair when I go vote.
Hopefully, we will be able to continue the hearing uninterrupted.
If he does not arrive before I have to leave, then there will be a
very short break. We encourage everyone to stay here and be
ready.
Mr. Hall, please begin.
STATEMENT OF JIM HALL, PRINCIPAL PARTNER, HALL
AND ASSOCIATES
Mr. HALL. Mr. Chairman, Senator Jeffords, thank you for the in-
vitation to testify before you today on a matter I believe is impor-
tant to transportation safety.
On my background, I was nominated as a member of the Na-
tional Transportation Safety Board by President Bill Clinton in
1993, and served as the Boards Chairman from June 1994 to Janu-
ary 2001. I presently serve as the president of Hall and Associates
where I advise a number of government and private clients on
transportation safety and security issues. Although I do represent
oil industry interests who have an interest in the provision I will
discuss, my testimony is my own and reflects my experience on the
Safety Board.
The Safety Board serves as the eyes and ears of the American
people whenever there is a significant transportation incident. Its
mission is to impartially and thoroughly investigate accidents to
determine their cause, with the primary goal of preventing future
accidents. NTSB investigations rely, in large part, on the voluntary
and unpaid assistance of companies involved in accidents to under-
stand what went wrong and how to fix it.
This system of voluntary cooperation works exceedingly well and
has succeeded in its goal of a safer transportation system. How-
ever, the threat of criminal sanction for purely accidental behavior
has the real potential to stifle this voluntary cooperation, to stifle
the development of information necessary to understand an occur-
rence and to prevent its repetition.
Every mode of transportation is regulated for safety purposes
under a variety of statutes. Each of these provides for both civil
and criminal sanction for some classes of regulatory violation. Typi-
39
cally, criminal violations are reserved for knowing violations. Ac-

tivities such as falsification of records or safety tests, the deliberate
violation of regulatory standards, or willful or reckless behavior
that leads to injury, death, or destruction of property.
However, one statute, the Clean Water Act, provides criminal
penalties including fines and imprisonment for simple negligence.
Simple negligence does not require criminal intent or knowledge, or
even willful or reckless disregard of norms. Potentially, an entity
believing that it is exercising due caution and using current tech-
nology and modern procedures may still find that the company, its
operating employees, and its supervisors will be charged criminally
if a water source becomes polluted. The implication for safety in-
vestigations, and ultimately safe regulation under the Clean Water
Act are problematical, at best.
During my tenure at the NTSB, I became increasingly concerned
with the trend toward the criminalization of any or all transpor-
tation accidents. Let me be clear. There are accidents where crimi-
nal prosecution is warranted, and even the preferred course of ac-
tion. While traditional criminal law theory requires a finding that
one intended the consequences of the criminal act, it has long been
acceptedand I accept the propositionthat wanton disregard of
behavioral norm suffices to sustain a criminal prosecution, even if
the consequences of the behavior were not intended, indeed, even
if they were as horrifying to the perpetrator as to the rest of us.
At a symposium on Transportation Safety and the Law that the
NTSB convened under my direction in April 2000, several themes
emerged that bear repeating. Transportation safety is increasingly
dependent on being able to spot trends, to see problems as they
arise, to anticipate failures from sophisticated data mining, and
from the sometimes not so sophisticated self-disclosure of near
misses.
That is exactly the issue with the Clean Water Act. Since simple
negligence can be treated as a criminal act, punishable by impris-
onment when an accident investigator arrives on the scene, preven-
tion and understanding takes a back seat to legal maneuvering.
While criminal enforcement can be an important tool, it should
be directed toward intention or reckless behavior rather than non-
intentional conduct. Criminal penalties do deter intentional con-
duct, but have a much diminished or unproven relationship to pre-
venting purely accidental behavior, and can deny safety regulators
the very information they need to decide how to prevent similar ac-
cidents in the future. The intent should be to promote cooperation
rather than to threaten parties with punishment for things over
which they have no control.
In conclusion, it is my conviction that the balance between appro-
priately pursuing individual wrongdoers on the one hand and the
broader purpose of accident investigation and prevention on the
other, tips more and more aware from a focus on prevention. We
follow that road at our long-term peril.
Thank you, Mr. Chairman. I would ask that my complete testi-
mony be included in the record in its entirety.
Senator Inhofe [assuming the chair]. Thank you very much, Mr.
Hall.
40
Let me apologize to the witnesses, and particularly to the pre-

vious panel. This happens to be a day that happens once a year
that the Oklahoma State Chamber of Commerce comes to Wash-
ington. With them, come all the organizationsthe farmers, the
bankers, and the rest. That is why Mr. Kouplen is here. It also
makes it for a very busy day. On top of that, we have Senate
Armed Services hearings taking place right now.
I think it is important to talk a little bit how about the SPCC
Plans are going to affect the agricultural community. Most of my
colleagues will read any concerns about the rule that would be
coming from industry or coming from the oil industry. It should be
emphasized that this is also going to impact family farmers.
In your testimony, Steve, you provide some information about
the use and storage of oil and fuel on farms. You also indicated
that the EPA did not fully consider the impact of the rule, and
what impact it would have on farms. What else should the EPA
know about how farms use and store fuel and the efforts of this
rule that you have?
I would ask you to answer that question by drawing upon your
background. I think you represent some 140,000 farmers in our
State of Oklahoma. Every time something like this comes up, they
always talk about industry. They always talk about the energy in-
dustry, or about electricity generation. How does it affect you?
Mr. KOUPLEN. Well, to begin with Senator, let me say that we
really did not realize we had a problem in the agricultural sector
with this issue. We think that we do a good job of being very care-
ful with how we handle fuel and oils on our properties. We have
come to the table realizing that if this rule goes into effect, that
the possible costand these are projectionscould run as high as
$25,000 to the individual farm family. If they have separate fuel
locations in more than one place on their operation, it could go
even higher than that.
We probably have come late to the game with this issue. But we
really realize now that it could drastically affect the family farmer.
With that low of a threshold of fuel, 1,320 gallons, that is not very
much. It would affect a great number of our producers, not only in
Oklahoma, but in this country.
Senator INHOFE. Would you give a similar response on TMDLs
and how this could affect the land owners and land rights?
Mr. KOUPLEN. Well, there again, as agricultural producers, we
try to be good stewards of the land and definitely not be polluters.
We have done all we can through conservation practices to make
sure we are not. Anytime you have any type of a regulatory pro-
gram put on you, that puts a cost on your business. We do not have
a way to push that cost through as farmers. We just absorb that.
It does create a cost problem to producers, and especially to the
family farmers who are in a very bad position right now as far as
trying to stay in business in this country.
Senator INHOFE. I think a lot of people are not aware of the effect
that a lot of these things have on the agricultural community. Cer-
tainly, we are an agricultural State in Oklahoma. I remember
when we were debating the use of propane, as to should be treated
as hazardous waste. I remember it so well. One of the persons is
41
in the audience right now that was there at that subcommittee

hearing that I chaired back 5 or 6 years ago.
The response was, Well, do not worry. It only costs about $600
or $700 a year to your average farmer. That was right after the
Endangered Species suggestion on the Silver Shiner. It would also
cost another $700. I think it is easy for people who are not out
there and realizing how tough things are in what I call the real
world. These things really do add up.
Mr. Lozeau, in this world that we are living in of limited re-
sources, if we want States to put their money and staff toward wa-
ters that are impaired, why list waters which meet water quality
standards and are clean, by your own testimony, just because they
met standards by some means other than the BPT, or secondary
treatment? Why waste resources that could be put toward waters
that do not meet the standards?
Mr. LOZEAU. Because in addition to cleaning up the impaired wa-
ters, Mr. Chairman, it is important to protect the waters that are
currently meeting the standards. Many of the waters in that cat-
egory would be threatened. I think it would be very inefficient for
a program like the TMDL program certainly not to apply to a
water body that currently is still meeting standards, but degrading.
The proposal that EPA has put forward would eliminate consid-
eration of the anti-degradation policies that the States have in
place. It would eliminate those kinds of threatened waters from the
list. Certainly, I would think those are high priority waters, in
many ways for many States. Other waters that are less threatened
could be lower priority, certainly, for the State. But I think Con-
gress had in mind to have TMDLs in place to protect all waters,
to make sure that the gains that are in place now have been
achieved. It will stay that way for the coming decades, and not just
for the moment.
Senator INHOFE. Were you here during my opening statement?
Mr. LOZEAU. Yes, I was.
Senator INHOFE. I commented on what difference does it make
whether the EPA would issue a figure, a number, as opposed to
issuing the way that they have reached that number. Maybe I am
not wording that right. Do you have any thoughts you would like
to share with us on that?
If you achieve it, what difference does it make if the EPA is su-
pervising it or if it is done by the State and by the land owner him-
self in cooperation with each other?
Mr. LOZEAU. Well, we are talking about water quality standards
that would apply throughout a watershed. If you create a loading
capacity that is going to meet those standards, you would have to
know where the loads are coming in and who is putting those loads
in, where they hit that water body, and whether in that particular
area you are going to have a violation of the standards.
The gross allocations would make believe that you only measure
success at one point low in the watershed, for example, of some ar-
bitrary downstream point. In order to know if a TMDL is going to
work, you have to make sure it works throughout the watershed.
You would have to know where it is coming in, where the alloca-
tions are occurring, and whether there is a smaller tributary that
is more burden, perhaps, than the mainstem river downstream.
42
Senator INHOFE. Would any of the rest of you like to address

that?
Ms. Steinzor.
Ms. STEINZOR. Mr. Chairman, I would like to address that. Mr.
Mehan was telling the committee about his great confidence in
trading as an alternative, a less expensive method for achieving
greater water quality. If the only total burden that is calculated is
done on a watershed-wide basis, as opposed to an individual facility
basis, the trading program becomes virtually impossible.
I must admit to being very puzzled. It would seem as if EPA is
on a course that is completely inconsistent. It would allocate one
single total load for all sources in a watershed, at the same time
that it is touting trading as the solution to many of our problems.
I surely agree with you that the best way to approach nonpoint
sources is through a trading program. But we have to have one
that is not based on paper trades or sham trades that do not
achieve real reductions.
Senator INHOFE. Does anyone else have any thoughts on that?
All right.
I would only comment that as a general rule they think that a
federally regulated mandate is better just by virtually the fact that
it done from the Federal Government. There is a basic difference
of opinion on that.
Mr. Hall, did anyone talk about the liability, the criminal punish-
ments? Did you visit about that during your opening statement?
Mr. HALL. I addressed that in my opening statement, sir. I think
Ms. Steinzor alluded to it. That was the only other conversation.
Senator INHOFE. Well, I would like to ask each one of you. Do
you believe that Congress, when it enacted the Clean Water Act,
the criminal negligence provisions intended, to cause citizens to
refuse to cooperate with the NTSB and other accident investigators
due to potential criminal liability? In other words, I am getting
around the unintended, accidental, consequences.
Would anyone like to address this?
Mr. Hall?
Mr. HALL. Mr. Chairman, my feeling, of course, and the purpose
for my being here today, is that I do not believe that Congress in-
tended at the time that this Act was passed, to set up a situation
where individuals who did not knowingly or willingly commit an
act, and truly accidental behavior, would face criminal penalties for
an act that obviously impacted transportation safety, and in this
case, of course, water quality.
That is why I am here today to ask the committee, in its judg-
ment, to relook again at this policy. I think it is not an effective
policy for achieving the goal of transportation safety. I do not think
the Justice Department should be put in the position of sub-
stituting for what should be a regulatory framework to protect the
environment.
Senator INHOFE. I was in the House at the time that the Act
passed. I remember the discussion on this. I guess what you are
saying is that there are cases that you know of, and all of us in
this room know of, where something was done. But it was done ac-
cidentally, where they actually went through the process, and
maybe even served time.
43
Would either of you, on the other side of this issue, like to com-
ment on this? Do you think that if something is done, it is done
not with intent, and just through negligence, that there should be
that type of punishment?
Ms. Steinzor.
Ms. STEINZOR. Mr. Chairman, I believe that I am the one that
is supposed to take this issue. I think that the question really does
not make much sense outside the context of the specific facts of the
cases that have brought.
Let me just describe the facts of supervision of pipeline mainte-
nance of them, the Hanousack case. This was a gentleman who
took over from another person. Mr. Hunz was the first man and
Mr. Hanousack was the second. He was a road master, out of sight,
where there was a lot of blasting going on right near an oil pipe-
line.
Mr. Hunz had established procedures for protecting the pipeline,
making it very clear where the pipeline was located, building pro-
tective covering over it, and fencing it off, so that there would be
no accident, that these boulders that were being blown up by dyna-
mite would not fall on the pipeline and crack it.
When Mr. Hanousack came on the job, he abandoned all of that
precaution and removed the barricades, removed the protective cov-
ering, and proceeded to allow his crew to push these big rocks
around until one day when Mr. Hanasack was not on the site,
somebody dropped a big boulder on the pipeline and there was a
huge spill.
This is not an innocent accident. This is a person who was acting
in reckless disregard of the basic safety needs that happen when
you work near a pipeline. He cost not just the environment, but the
pipeline company, lots of money and caused tremendous trouble.
I guess the question would beand, of course, you would know
this much better than I because you were in the Congress at the
timedid you intend to make people who are so reckless and so
careless, did you intend to give them the comfort that no matter
what they did, they would escape prosecution?
Senator INHOFE. Well, I would only respond that you have cited
one case, Ms. Steinzor, where perhaps it was reckless. I am not
talking about those cases. I am talking about when an accident oc-
curs.
Does anyone have any kind of anecdotal thing they would like to
put as an example of something that was purely accidental that
ended up with the type of punishment that I outlined?
OK. All right. I think that we are in the process of votes right
now. Unfortunately, that does happen sometimes. I appreciate very
much your coming to testify. Your entire statements will be consid-
ered by this committee as we are making these formulations. Your
interests will be attended to.
Let us do this. Let us go ahead and recess, subject to the call of
the Chair. If no one gets back in about 10 minutes, then we will
go ahead and adjourn this meeting.
[Recess.]
Senator INHOFE. I would ask the meeting to come back to order.
Senator Jeffords has returned and has some questions for our
witnesses.
44
Senator Jeffords, you are recognized to question the witnesses.

Senator JEFFORDS. Mr. Lozeau, as someone who has worked on
TMDLs, what do you think will be the real world effect of the pro-
posed new TMDL rule on water quality if it were enacted?
Mr. LOZEAU. Well, in the version of the draft that we have seen
were enacted, I think the rule would not guarantee or assure that
any water that is currently on any of the TMDL lists, would ever
comply with standards. I think it would create a program that
would cede so much control to individual discharges ultimately,
and that it would have no real provisions for the EPA to guarantee
that pollution coming into a water body would be controlled at its
source, and that it is going to lead to widespread water quality deg-
radation.
I do think that many threatened waters which we would hope
would be protected before they become impaired, will fall by the
wayside, and that we are going to see the lists of impaired waters
growing in the same rate they are currently growing. We are going
to see no effect of the program to prevent those additional pollut-
ants and the additional costs that come from that by waiting to
clean up these waters.
Senator JEFFORDS. Instead of the rewrite of the TMDL rule,
what would you propose that EPA and the Bush administration do
to clean up the Nations waters?
Mr. LOZEAU. Well, I think they should certainly vigorously imple-
ment the existing rules and continue to provide them an oppor-
tunity to work. I think over time, certainly, those rules can be im-
proved, and can bring more waters into the program and realize
the benefits of the program. I think that would be the obvious first
step, albeit hopefully the program, over time, will continue to im-
prove.
That would be my suggestion. Obviously, funding is important to
assist the States and other stakeholders in making sure that the
TMDLs that ultimately are being developed actually work. Cer-
tainly, I would hope that the quality of TMDLs will continue to im-
prove over time. Certainly, there are some TMDLs out there, I sus-
pect, are not very effective. Over time, I would hope that the frame
work that is in place would continue to improve those and that we
would realize the benefits that Congress hoped for back in 1972.
Mr. Hall, in your testimony, you state that if the NTSB can do
a thorough investigation, completed, and have cooperation, larger
problems can be corrected before they cause future accidents or in-
cidents.
One of the accident investigations you completed while you were
at the NTSB is the Olympic Pipeline case in which three youths
were killed in Bellingham, WA. In December 1999, as Chairman of
the NTSB, when speaking of the Olympic Pipeline explosion and oil
spill, you said, We will not be surprised to find that some of the
factors in this accident reflect lessons that have gone unlearned.
The NTSB had for years recommended improvements, such as a
rapid shutdown of ruptured pipelines, periodic inspection and test-
ing of old pipelines, and improved employee training. You went on
to say, Pipeline industry reaction to these recommendations has
been tepid, if not hostile.
45
In December 2002, Olympic and Shell agreed to pay $112 million

to settle criminal charges. Much of that money will be spent on
pipeline safety improvements. Today, less than a year after paying
this seemingly large sum of money, Olympic is embroiled in a dis-
pute with the city of Seattle over the companys efforts to avoid
conducting a high-pressure water test for the portion of the pipe-
line running through Seattle and close to two elementary schools.
It seems that testing a pipeline for weakness in a highly popu-
lated area could be one of the solutions you mentioned in your tes-
timony that could avoid a future accident. Much of your argument
seems to depend on the assumption that given no potential for the
criminal enforcement under the Clean Water Act, companies will
voluntarily cooperate with the NTSB and voluntarily improve their
safety records.
Your comments in 1999 suggest that you have very little con-
fidence that the industry will voluntarily make any safety improve-
ments, even in the urging of the NTSB. It seems that the Olympic
case would disprove the theory that you have presented to the com-
mittee today.
Can you explain this kind of contradiction?
Mr. HALL. Yes, sir, Senator. Let me first make just one clarifica-
tion. I was Chairman during the majority of that investigation.
However, that investigation was completed and the final report
was issued after I had left the National Transportation Safety
Board.
My interest in this issue goes from observations I had over 7
years as Chairman of the National Transportation Safety Board in
trying to obviously advance safe transportation policies in the
United States.
Where I saw failures, either by the industry or by the Govern-
ment, to put in place safe regulatory frameworks for which the safe
operation of transportation systems could then be completed, I was
very vocal and spoke out. I felt very strongly about the statements
you read. I felt very strongly about that. It correctly reflects my
feelings at that time.
As a result of that tragedyand I think the Boards investiga-
tionwe have seen Congress now move to put in place a regulatory
framework for pipeline safety that requires training, that requires
periodic testing, and that requires education, a number of the
things that were not in place in the safety system at that time.
I have observed, and we have in our country and should be proud
of t, the safest aviation transportation system in the world. That
has been built, I believe, out of the voluntary compliance that we
have seen in the aviation community with NTSB investigations.
Programs like FOQWA and the Aviation Safety Reporting System
Program run by NASA, have put us in a situation where I believe
now we are almost close to 2 years without a major aviation trans-
portation accident in our country.
I am speaking today on the basis of policy. I believe in a policy
that includes obviously industry compliance, voluntary reporting
systems, and a sound regulatory framework in this situation obvi-
ously at the State and Federal level. I think there is certainly an
appropriate place for criminal penalties, but it is my beliefbased
on my own experiencethat the present trend toward the criminal-
46
ization in the Clean Water Act for a criminal penalty, without

knowing or willing conduct, will have a chilling effect on the
Boards investigations, and will not achieve what Ms. Steinzor and
others in the environmental community might want by substituting
the Justice Department as the regulatory authority in terms of
pipeline or clean water safety.
Senator Crapo [resuming the chair]. Thank you very much, Sen-
ator Jeffords.
Senator Inhofe.
Senator INHOFE. Thank you, Mr. Chairman.
Mr. Fuller, I have two very short questions.
First of all, welcome back. I always enjoy your testimony, al-
though I was not here to hear your opening statement. You were
minority staff under Lloyd Bentsen back during the formulation of
all this.
Under 407(l) dealing with uncontaminated water in terms of
storm water runoff, would you characterize what you felt at that
time was the intent of the legislation as it was formulated?
Mr. FULLER. That issue is one that arose in the context of deal-
ing with storm water generally. My recollection of it was that be-
cause we were dealing with essentially water flows over ground,
that the effort was designed to try to say we did not want to add
another permitting burden to the process of developing and pro-
ducing oil and natural gas without there being some contamination
that needed to be addressed.
There had been issues that had been raised about the application
of the NPDES program broadly to that activity. Our intent was, as
we were working on it, to try to come up with a cut-point that basi-
cally said, Well, if it is contaminated, then
Senator INHOFE. The test was whether or not it was contami-
nated?
Mr. FULLER. Yes, sir; it would be captured under the NPDES
permit under that section. If it was not, then it would not require
a permit.
Senator INHOFE. I notice in my notes here that Mr. Lozeaus tes-
timony accuses the oil industry of being in back room negotiations
with the EPA on the SPCC rules and definition of waters of the
United States. Mr. Fuller, would you are to characterize those ne-
gotiations?
Mr. FULLER. Well, I think the reference in the testimony has to
do with litigation that was filed by some parts of the oil industry
with respect to the SPCC Plan requirement, the new rules and reg-
ulations. IPAA was not a part of that litigation so I do not know
any of the details there.
What I can say is that one of the issues in developing a SPCC
Plan is whether it has an effect on navigable waters. There are two
tests. You have to be a facility and you have to have an effect on
navigable waters. That is what triggers the need to do a plan.
When these regulations were put togetherthey were actually
put together over a decade or moreand became finalized, during
that same period of time the issue of the so-called SWANCC deci-
47
sion arose which called into question exactly what the scope of nav-
igable waters are.
Another process is underway to try to address that question, to
try to come up with a clear definition and a consistent one of what
constitutes navigable waters. If you are a producer, and particu-
larly a small producer like my members are, you now are looking
at this requirement that says that you have to have a new Plan
requirement. If it goes forward under the structure that it is cur-
rently written, you have an effect on navigable waters.
But what constitutes a navigable water while this other issue re-
mains is unsettled. From our perspective, we believe that the first
issue needs to be settled in some clear fashion before we try to then
broadly apply new plan requirements based on an uninformed
sense of what navigable waters are.
The reason why that becomes important to somebody like my
members is that these plans are costly. They can cost $20,000. Just
to give you an idea, a marginal well has a break-even point of
about $19.50 a barrel. So, where prices are now, that means that
the average well makes about $20 a day. If it costs $20,000 to do
an SPCC Plan, that is 1,000 days worth of profit from that well.
I do not believe that our members want to spend that kind of
money for something that turns out to be unneeded because the
definition is different. So it is the definition of navigable waters
that is driving what happens with SPCC, and not the other way
around.
Senator INHOFE. I appreciate that very much.
I have one last thing, Mr. Chairman. In my State of Oklahoma,
approximately .00126 of the oil produced in Oklahoma was spilled
in 2002. That statistic, I think, is supposed to be pretty accurate.
That is not a very high spill rate.
I would just like to ask you, Mr. Fuller, in your opinion, is there
a problem with oil spills that was not being met with the existing
rule because no great improvements were made during that time?
Mr. FULLER. Those are all based on procedures that had been in
place for decades. The SPCC requirement has been around since
shortly after the Clean Water Act was passed in 1972. Plans had
been in place. These new requirements are all changes to those
plans.
What that spill data says, and what we have been trying to say
for a long time, is that the existing program has worked. Apart
from that, whether there are Plans or not, we still have a responsi-
bility to respond to oil spills if they occur.
What we are dealing with here is really a planning requirement,
not a response requirement. I think the record in Oklahoma and
other States demonstrates that the existing planning requirements
have been successful. We have not seen the type of need to make
these changes that we would expect if they were a logical change.
Senator INHOFE. That is a very good answer. Thank you very
much, Mr. Fuller.
In the interest of time, I am going to forego my questions.
Does anybody have any further questions?
Senator JEFFORDS. I do.
48
Senator CRAPO. Senator Jeffords.

Senator JEFFORDS. Mr. Hall, and Ms. Steinzor, your testimony
implies that the Clean Water Act precludes the use of the same
tools used by other Agencies to elicit testimony from people who
may be criminally liable in an event.
Is the Government somehow precluded from offering immunity
under the criminal negligence section of the Clean Water Act?
Mr. Hall.
Mr. HALL. In terms of the NTSB, the NTSB does not have the
authority to grant immunity in our investigations. We rely on vol-
untary compliance. Again, I believe that criminal penalties, where
again it is for simple negligence, and not a knowing or willing act,
such as in the Clean Water Act, does not work as an effective de-
terrent in terms of preventing future events.
The success, Senator,and I know you are familiar with a great
deal of this as wellin accident investigation, and particularly
where we are entering this age of technology, is to understand ob-
viously the various change in the accident sequence, whether it be
technology or whether it be human factors so that we can put in
place effective deterrents to better protect our society.
For example, we had a recent accident in California with a very
elderly driver who probably, with an unintentional act. A number
of individuals were killed in an open air market where they had
been no barriers and no protections put in place for separation be-
tween the motorists and the pedestrians.
To criminalize these types of investigations as far as the NTSB
is concerned, I believe is going to end up in a situation where we
are going to be unable to learn from accidents, and therefore, cre-
ate statutory responses and appropriate standards and policies
within the industry.
Let me say very clearly that where there are intentional acts, in-
tentional wrongdoing, I would be the very first to say that the use
of criminal penalties are necessary and appropriate. I respectfully
believe that this is having unintended consequences. My purpose of
being here today is to ask the wisdom of this committee and this
Congress and look at that to see if they agree.
Certainly, on any issue of this nature, there are two sides of any
discussion. I am here today to speak to you based on my experience
at the National Transportation Safety Board over 7 years in trying
to work in this area to advance transportation safety.
Senator JEFFORDS. Ms. Steinzor.
Ms. STEINZOR. Senator Jeffords, I appreciate an opportunity to
respond. While you were voting we had a conversation about spe-
cific cases that have been brought under 309. Mr. Hall says he is
closely reading this statute.
It is worth noting that there is not a single case that he can raise
that has actually been brought under this provision where an inno-
cent person who had a simple accident was prosecuted. I think that
is very telling.
The cases that have come up that we have discussed involve very
willful carelessness, and in fact, have involved deaths and great
tragedies for the environment. For example, the Exxon Valdez case
was premised on negligence because great damage was caused to
49
the environment and there was a belief that the company had been
very careless in screening its employees in that case.
As for voluntary compliance, I am confused here. When Mr. Hall
was with the NTSB, as your question to him before suggested, he
was decrying the lack of cooperation by the oil industry with these
investigations. It is also true that you in your wisdom enacted very
strong legislation regulating pipeline safety. I do not think there is
anyone here who would say that all we need to do is leave folks
alone and they will voluntarily choose to do the right thing. That
was not the reaction to the Olympic incident which caused very se-
rious damage.
Finally, the Justice Department has complete authority to grant
immunity to witnesses that it feels it needs to pursue an investiga-
tion, or if its sister Agency, the NTSB needs to have a witness
granted immunity, this is one Government. People talk with each
other. Immunity is always an option. There are also ample policies
that encourage people to come forward voluntarily. If they cooper-
ate, they are given special consideration in the way that they are
punished, civilly or criminally.
After listening today, I think I understand the arguments here
less well than I did when I read a lot of materials about them. I
am quite perplexed.
Senator JEFFORDS. Mr. Hall.
Mr. HALL. Senator, Ms. Steinzor may be confused. I am not. Let
me say that I believe she misspoke. I did not say that the industry
did not cooperate with the investigations of the NTSB. What I stat-
ed was that there had been a failure to act by both the Congress
and the industry on some 14 years of recommendations the Board
had made for simple basic things such as regulatory requirements
for training and testing that needed to be put in place.
Regretfully, because of that horrible tragedy at Olympic, we do
have a new Pipeline Safety Act. Congress has addressed, and the
industry has, I believe, put in place, a number of the Boards rec-
ommendations.
I am speaking here, Senator, on the basis of what I believe is
good policy. That is my purpose. I have spoken on this issue. I held
a symposium while I was Chairman of the NTSB on this issue.
This is not an issue that I have not raised as much concern about
as I did at the time I spoke very forthrightly. I thought about the
industry and the Governments responsibility and actions in the
pipeline area.
I have also spoken out on my concern about the criminalization
and having the Justice Department become the regulatory in this
Nation for transportation safety, and putting citizens that are not
in a willing or knowing act, at peril for the whim of a criminal
prosecution by whoever a local prosecutor might be.
Senator CRAPO. Thank you very much, Senator Jeffords.
Our time for the hearing is rapidly expiring but I did want to ask
one followup question on this interchange right here. This will be
both to Ms. Steinzor and to Mr. Hall.
Ms. Steinzor, if I understand your testimony correctly, you have
pointed out that there are no prosecutions of a purely negligent
50
conduct under this statute. If I understand Mr. Halls testimony

correctly, he is saying that the threat of such a prosecution is hav-
ing a chilling effect on people bringing forward information.
I would like both of you to just discuss that for a moment. Is
there, in fact, a chilling effect taking place here on the ability of
the Government to get adequate information and to get the kind
of compliance that is necessary?
Ms. STEINZOR. I believe that what I said was that there is no
case that Mr. Hall is willing to describe to you that has happened
in the real world where people are totally innocent, who never did
anything wrong, were prosecuted criminally. I do not know how
you measure whether it is having a chilling effect. I do know that
when I look at the prosecutions of the people that were involved
in these cases, I do not care if it chilled them from cooperating be-
cause they were punished for very bad acts.
What Mr. Hall seems to be asking you to do is to remove any
penalty for behavior that is grossly careless. That is what the cases
show.
I think you would be more comfortable considering an amend-
ment of the law if there was one case that had been brought for-
ward here where when you looked into the facts. All of these con-
victions have been upheld through the Court of Appeals. The Su-
preme Court has resisted reviewing them for whatever reason.
These cases have been litigated very heavily. As the facts were de-
veloped, not one single case of all of these is worth describing to
you as an example of some innocent sympathetic person who just
wandered into accident. I would suggest that is telling.
Senator CRAPO. Mr. Hall.
Mr. HALL. Well, Mr. Chairman, let me say that I came here
today to discuss the policy. That was my concern. I think that is
reflected in both my oral and written testimony to the Board. It
has been my personal experience that it is having a chilling effect
on the NTSB investigations. That is why I convened the sympo-
sium on this subject. That is why I have chosen to come here today
to make this testimony to all of you.
I worked on Senator Muskies staff at the time the Clean Air Act
and the Clean Water Act were being written. I worked for 7 years
in the State of Tennessee in Governor McWhorters office trying to
work on environmental issues and concerns. I worked 7 years at
the Board.
I also believe, however, in the fundamental fairness of our Gov-
ernment and our country as it pertains to the treatment of individ-
uals. Since Ms. Steinzor is relying on a case, I will just close by
quoting a citation from the Supreme Court in which the Court said,
in 1952 that the contention that an injury can amount to a crime
only when inflicted by intention, is as universal and persistent in
mature systems as law, as belief in freedom of the human will and
a consequent ability of the normal individual to choose between
good and evil.
Where someone knowingly and willingly performs an act, I do
think there is an appropriate place for criminal law. I do think that
this provision can have a chilling effect. I think that the nose under
the camels tent of having the Justice Department become the regu-
51
lator for transportation safety in our country, is bad public policy.

That is my personal opinion.
I appreciate very much the Senators patience and time in listen-
ing to my opinions.
We thank everyone on the panel.
Senator JEFFORDS. Mr. Chairman, I would like to have just one
further question.
Senator CRAPO. Senator Jeffords?
Senator JEFFORDS. Mr. Lozeau, what will be the impact on clean
water protections if the oil industry lawsuit on SPCC Plans results
in a settlement agreement that modifies the definition of the wa-
ters of the United States?
Mr. LOZEAU. Obviously, Senator, first of all, we are worried that
the 10-year policy we heard about is now being replaced with a
back room discussion which the environmental organizations are
not invited to. Out of that will come some indication by EPA that
industries exaggerated interpretation of the Supreme Courts dis-
cussion of the waters of the United States issue in the solid waste
case has some merit of some kind.
We would be worried that the EPA would make a decision in
that back room that would withdraw a definition of waters which
has been in place in other parts of the regulations for the past 30
years.
There is no issue as to the definition of navigable waters. What
we have is industry exaggerating the import of the Supreme
Courts decision, trying to expand it beyond the terms that the
Court laid down on paper, and now using that argument to set up
these discussions out of earshot and short circuit what was a long
and thoughtful process, to come up with that regulation in the first
place.
That is what we are worried about.
Again, we want to thank all the panelists for the time and effort
you have put in, not just to come here and testify in person, but
also in preparing your written testimony. Even before the hearing
began with the benefit of all the written testimony, we have had
a significant amount of activity and evaluation going on with re-
gard to the suggestions of the members of these three panels.
We are very concerned about the Clean Water Act and the proper
implementation of the Act. We want to get to the right public policy
as we move forward. Your testimony here today has helped us. We
again thank everybody for their participation.
With that, this hearing is adjourned.
[Whereupon, at 12:05 p.m., the subcommittee was adjourned, to
reconvene at the call of the chair.]
[Additional statements submitted for the record follow:]
STATEMENT OF HON. LINCOLN CHAFEE, U.S. SENATOR FROM THE STATE OF
RHODE ISLAND
Thank you Chairman Crapo and Senator Graham for holding this important over-
sight hearing on implementation of the Clean Water Act. I appreciate the oppor-
tunity to raise an issue of great concern for my state and regionthe availability
52
of Clean Water Act Section 319 funding for development and implementation of the
Phase II Storm Water Program.
Yesterday, I visited the site of a devastating fish kill in Rhode Island, caused by
the absence of dissolved oxygenan anoxic eventin an area known as Greenwich
Bay. As the former Mayor of the city of Warwick, which encompasses Greenwich
Bay, I had undertaken a massive bond issue several years ago to provide funding
for improving septic systems and restoring the water quality of this area. Visiting
the fish kill site yesterday, I was disheartened to learn how much more needed to
be done. In combination with other factorsincluding the ongoing deficiencies of
private septic systemsstormwater has been found to be a significant contributor
to the nutrient loads entering Greenwich Bay and disrupting its natural balance.
In Rhode Island, as well as many other highly urbanized areas, stormwater ranks
high on the list of top-priority pollution sources impacting the water quality of our
lakes, rivers, streams, and bays. As states proceed with development of the federally
mandated Phase II Storm Water Program, the costs of implementing the require-
ments of the program are becoming a major concern for states and municipalities.
At issue is whether funds provided to states through Section 319 of the Clean
Water Act may be used for the purposes of developing and implementing the Phase
II Storm Water Rule that went into effect in March 2003. Last year, this Committee
approved an amendment, signed into law as part of the Great Lakes and Lake
Champlain Act of 2002, that provided a 1-year fix, during fiscal year 2003, for states
to retain maximum flexibility in utlizing 319 funding for addressing their
stormwater concerns.
In recent years, the EPA Nonpoint Source Program has increasingly focused on
impaired waters and stormwater-related impairments. Although the Clean Water
Act appears silent on the eligibility of Section 319 funding to address storm water
or NPDES-related issues, EPA has thus far interpreted the Act to prohibit 319
funds from being used for implementation of the Phase II Storm Water Program.
In recent months, a lack of clarity also exists on the use of Section 319 funding in
geographic areas covered by the Phase II Program. Phase II applies to all populated
areas of 1000 people or greater per square mile. In Rhode Island, nearly all of the
states impaired waters are included in Phase II areas. Given a strict EPA interpre-
tation of the law, Section 319 funds could not be used in any of these areas.
In the weeks ahead, I will be exploring the idea of introducing a bill to provide
permanent authority for states to utilize Section 319 moneys for development and
implementation of the Phase II Storm Water Program. I look forward to working
with my committee colleagues and EPA on this legislation.
STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR FROM THE

STATE OF FLORIDA
Clean water. Mankind, and virtually every other living thing on this planet, needs
clean water to survive. And yet, after 30 years of progress, our clean water pro-
grams are under assault once again. Under this administration, pollution restric-
tions are being rolled-back, enforcement of the remaining regulations is being cur-
tailed, and much of the fresh water in the arid west is being handed over to a small
circle of industrial interests. All of this will harm the average American.
There is no question that clean water is one of our most important resources. For
human beings, water is actually more important than food. A person will die from
dehydration more quickly than from starvation. The harmful effects of sewage in
drinking water has been known for many years. And even though they are less obvi-
ous in the short-term, the harmful effects of industrial and chemical pollutants were
well known long before Congress passed the Clean Water Act in 1972.
But we humans have a long history of misusing our water resources. Historically,
we have used our rivers, our streams and even the oceans as a free disposal system
for every imaginable type of waste. Abuse of our waters reached new heights during
the industrial revolution. The industrial revolution was one of the principal factors
that made our modern civilization possible, but it was also a chief source of new
pollution problems. It led to population growth and concentration, it exacerbated ex-
isting pollution problems, and it created new types of pollution, such as massively
concentrated natural pollutants and a host of artificial pollutants, all on a scale
never before imaginable. In retrospect, we now know that our industrial prowess de-
veloped much more quickly than our environmental awareness.
Once upon a time we believed that swamps and wetlands were the sources of dis-
ease, and that it was a lofty goal to drain them or fill them. Now we now that these
lands are incubators for many marine species that are critical elements of the food
53
chain, and that they act as filters to remove countless tons of pollutants from the
land and water every year.
Once upon a time, large pipes discharging tons of untreated waste into the rivers
were a sign of economic strength. Now we realize that it is unacceptable for a river
to be so polluted it can catch fire.
Once upon a time we thought the oceans were the ultimate disposal systemthat
they were so large that they could absorb any amount of waste we dumped into
them. Now we know that even the oceans have their limits. We have seen the beach
closings. We have seen whales that died after eating plastic bags or balloons. We
have seen fish, birds and other animals that died after getting entangled in carriers
from six-packs of drinks and other trash. And we know now that many of the fish
in the oceans are contaminated by mercury and other chemicals that we have pro-
duced.
Once upon a time we thought that only large navigable waters were worth pro-
tecting. Now we know that dumping pollution in small streams and ponds is often
more harmful. There is less water to dilute the pollution, the types of fish and ani-
mals in those waters are often less tolerant of pollution, and eventually it will find
its way into the navigable waters.
The modern era of water protection was born in the 1940s and 50s when the Fed-
eral Government began providing financial assistance for local jurisdictions to con-
struct sewage treatment plants. The current basis for most of our water pollution
control efforts is the Clean Water Act of 1972, which had a stated goal of making
most waters fishable and swimmable by 1983, and to eliminate the discharge of
pollutants to navigable waters by 1985.
We have fallen short of those lofty goals. There has been progress, but not
enough. According to EPA, the percentage of our nations waters that meet water
quality standards has increased by one-third to two-thirds since the Clean Water
Act went into effect. But EPA also says approximately forty percent of our stream
miles and forty-five percent our lake acres are still impaired, and forty-four states
have some sort of fish-consumption advisory in effect.
After 30 years of work, and billions of dollars, why havent we been more success-
ful? There are many factors, but I believe a major factor is that Congress has been
inconsistent in its demand for water quality improvement. Rather than demanding
that EPA enforce the Clean Water Act, Congress has more often undercut it. Au-
thorizations for several provisions, including assistance to states, research, and gen-
eral EPA support, were allowed to expire in 1987. Authorization of wastewater
treatment funding, the program that started it all, expired in 1994. The fact that
Congress allowed these authorizations to expire, but continues to appropriate funds
for them, suggests that Congress would like to abandon these critically important
programs but is afraid of the publics reaction. So it is not surprising that EPA and
the states have been hesitant to enforce the Clean Water Act consistently. That is
why some states refused to make water quality determinations until the courts told
them to. That is why some states fall behind on their discharge permit reviews and
do not always enforce even the outdated permits that they have issued.
And all of this is why our citizens are compelled to use their time an money to
sue the states and the Federal Government demanding implementation of the laws
Congress enacted. And what is the government response? Too often, government
sides with the polluters, against the citizens. Although the Clean Water Act explic-
itly provides for citizen suits, all too often governments first action is to ask the
court to deny citizens the standing to sue. The result is that with each case it be-
comes harder for citizens, the very people the laws should protect, to play a role
in ensuring that Federal and state governments to do what was promised with such
fanfare when the laws were passed.
Its time for Congress to step up to the plate. This Congress should:
Recognize that every citizen of this country has a right to clean water;
Recognize that the hidden costs of water pollution far exceed the cost of preven-
tion;
Ensure that wastewater funding programs are strengthened and made perma-
nent;
Set a new schedule to eliminate the discharge of pollutants into waterways from
point sources;
End the debate about navigable waters by expressing the Congress intent to
prohibit the discharge pollutants into any waters or water courses, including
aquifers;
Set procedures for periodically updating the list of regulated pollutants to keep
pace with new scientific findings;
Take steps to protect groundwater recharge areas; and
Get serious about addressing nonpoint water pollution.
54
Once upon a time, United States common law held that it was a nuisance or tort
for one person to emit pollution that harmed another. That long-standing legal pre-
cept was another casualty of the industrial revolution because judges were looking
for ways to allow economic expansion. We suffer from that legacy today. Rather that
saying our citizens have the right to be free from pollution caused by others, our
environmental regulations operate more like it is the businesses that have a right
to pollute.
It is time to reassess our national policy on water pollution. We need to decide
which right is more important. Whos rights should we be protecting, citizens that
want to have safe water to drink and swim in, or industries that want permission
to continue polluting the environment?
I do not profess to know the best way to resolve these issues. But I do know that
limiting the intensity of emissions will result in more pollution, not less. We can-
not continue down that path if we want our children to be able to swim in the local
pond or eat the fish they catch. We need to cap, and then reduce, the total aggregate
amount of pollution from all sources.
We made significant progress during the past 30 years, and we grew the economy
at the same time. I believe we can continue doing both. I ask the members of this
committee, and the entire Congress to join me in embracing these goals.
STATEMENT OF G. TRACY MEHAN III, ASSISTANT ADMINISTRATOR FOR WATER, U.S.

ENVIRONMENTAL PROTECTION AGENCY
Good morning, Mr. Chairman and Members of the Subcommittee. I am Tracy
Mehan, Assistant Administrator for Water at the U.S. Environmental Protection
Agency (EPA). I appreciate this opportunity to discuss todays water quality chal-
lenges, and the Bush Administrations vision for protecting and restoring our Na-
tions watersheds.
INTRODUCTION
Last year, in a hearing on the 30th anniversary of the Clean Water Act (CWA),
I testified before the full Committee regarding the tremendous progress that our
Nation has made over the past three decades in addressing water pollution prob-
lems. Thanks to the investment of many local, Tribal, State, Federal, public and pri-
vate partners we have successfully controlled the most egregious sources of pollution
from municipal sewage treatment plants and industry. Many communities now
enjoy the environmental and economic benefits of cleaner water, such as thriving
lakefront communities in Cleveland and Chicago, restored fisheries in Lake Erie
and the Potomac River, and increased revenues from real estate investment, recre-
ation and tourism in many coastal communities such as Boston.
Despite those success stories, we recognize that many challenges remain. There
are signs that some of our waters are in distress. States are reporting increases in
beach closures and fish consumption advisories, and a large zone of low dissolved
oxygen in the Gulf of Mexico.
Our water programs are at a historic turning point. Today I first want to share
with you our vision for the future and to discuss some of our top priorities: our ef-
forts to reorient our programs toward a watershed approach; establishment of a na-
tional-scale water quality monitoring and assessment program; better implementa-
tion of the Total Maximum Daily Load (TMDL) program; and, greater reliance on
innovative tools such as trading and watershed-based permitting. All of these activi-
ties are critical in addressing todays water quality challenges more effectively and
efficiently. Finally, I will address our efforts to control stormwater runoff.
THE WATERSHED APPROACH
Now that we have largely addressed problems from discrete point sources of pollu-
tion, we need to turn our attention to threats that are much more difficult to con-
trol, such as: nutrient over-enrichment, urban runnoff, groundwater/surface water
interactions, invasive species, microbes in drinking water, and atmospheric deposi-
tion. These complex problems demand a more comprehensive or watershed-based
approach that focuses less on the end of pipe and instead targets pollutants com-
ing from the landnonpoint source pollution or diffuse runoff. This approach to en-
vironmental management brings together public and private sector efforts to ad-
dress the highest priority problems, looking at all sources of pollution within
hydrologically defined geographic areas. The approach is grounded in sound science,
characterized by robust stakeholder involvement, and focused on environmental re-
sults.
55
Because most water quality problems are best solved at the watershed level rath-
er than at the individual waterbody or discharger level, we need to examine how
we can best integrate the efforts of local watershed groups. Over the past decade
and a half, we have seen the rise of literally thousands of citizen-based watershed
organizations working to protect and restore their lakes, rivers, wetlands, and estu-
aries.
To provide support for these locally driven watershed protection efforts, in May
EPA announced nearly $15 million in grants to 20 watershed organizations selected
as part of President Bushs new Watershed Initiative. The grants will support com-
munity-driven initiatives to improve water quality and enhance outdoor recreation.
EPA intends to announce a solicitation for new Watershed Initiative nominations
for fiscal year 2004. We are confident that these projects will result in cleaner water
for these communities and will serve as models for other communities. We are
grateful for Congress enthusiasm for this Initiative and ask support for the Presi-
dents request of $21 million for the Initiative for next fiscal year.
MONITORING AND ASSESSMENT PROGRAMS
As we transition from a technology-based approach to a water-quality based-ap-

proach, and begin to reorient our programs on a watershed basis, it is imperative
that we strengthen our water quality monitoring and assessment programs. In the
1970s, monitoring was primarily carried out at or near the end of the pipe, to meas-
ure how effectively individual permits were working. Today, however, we must be
able to assess the inputs of millions of diffuse sources of pollution, such as sedi-
ments from construction sites, fertilizers from agricultural lands, and even pollut-
ants coming from the air. And, to enable the use of more innovative tools and flexi-
ble approaches, such as trading between pollution sources, we need better baseline
monitoring data to help us keep score.
How clean is the water? We currently have enough information to allow us to
know what the conditions are in some site-specific areas, but as stated in EPAs
Draft Report on the Environment 2003, At this time, there is not sufficient infor-
mation to provide a national answer to this question with confidence and scientific
credibility.
Working with State, Federal, tribal, and local agencies, with the private sector,
with universities and with the public, we must be able to provide answers to some
very fundamental questions such as: How clean is the water? Is it getting any bet-
ter? Are our management actions working? Without answers to these questions, we
are challenged when it comes to making decisions about how best to address water
quality problems and allocate our limited resources for cleanup, pollution preven-
tion, and restoration.
Currently, most States monitor only a portion of their waters. While some States
are using new approaches like statistically based surveys to characterize the overall
condition of waters from a representative sample, many are still in the beginning
stages of using these tools. And, because State standards and assessment methods
vary across State lines, we find we cannot add up the data. In varying degrees,
States are working to improve their monitoring systems, and EPA is working with
them to help them identify and implement the key tenets of good monitoring pro-
grams.
Many Federal Agencies have, over the years, conducted a range of monitoring pro-
grams that have yielded valuable water quality data. However, none of them were
designed to characterize the overall national condition of the waters of the U.S. in
a comprehensive, statistically valid fashion. Because of the lack of comprehensive,
national-level data, we cannot yet systematically document whether or not our pol-
lution programs are effectively improving water quality on a national scale.
Besides EPAs recent Draft Report on the Environment 2003, the Heinz Center
Report on the State of the Nations Ecosystems, and various reports from the Gen-
eral Accounting Office, the National Academy of Public Administration and others
show that there are major gaps in aggregate nationwide data on water quality and
overall ecosystem health. These reports call for a national investment to build a
cost-effective, scientifically sound foundation for our water quality management de-
cisions.
We need, therefore, to take four critically important steps to achieve our goal of
better monitoring for better management. First, we need to work with States to im-
prove and strengthen State monitoring programs so that they can generate credible,
comparable, comprehensive information. EPA is currently working with the States
to ensure that they all achieve, for the first time, a set of basic monitoring elements
including a common set of core water quality indicators that can be compared over
time and across State boundaries. In March 2003, EPA provided States guidance on
56
such elements for a State monitoring and assessment program. Second, we must
promote the use of multiple monitoring tools such as statistically based surveys,
predictive monitoring, and remote sensing to support the full range of water quality
decisions. Statistically based surveys, such as EPAs Environmental Monitoring and
Assessment Program for example, provide a scientifically rigorous way to sample a
subset of waters and then provide an estimate of the quality of all waters, along
with a statement about the uncertainty surrounding that estimate. Third, we must
manage our electronic data systems to share and improve compatibility of moni-
toring information and make data more accessible to the public. And fourth, perhaps
most importantly, we must build stronger partnerships at the Federal, State, Tribal,
and local levels to facilitate the sharing of comparable data and the use of multiple
monitoring tools.
We need to continue working with States, Tribes, and our Federal partners to
identify what investments are needed for long-term improvements in water quality
monitoring. We need to look for efficiencies through new monitoring approaches,
such as statistically based surveys or the use of models, through better collabora-
tion, and through data sharing. And, we need to secure commitment from all stake-
holders to better monitoring for better management of our water resources. We will
be able to target our control actions wisely, and achieve the level of protection we
need.
THE TOTAL MAXIMUM DAILY LOAD PROGRAM
As we look to manage our watersheds more holistically, the Total Maximum Daily
Load (TMDL) program is one of our key CWA tools. In enacting Section 303(d), Con-
gress retained a water quality-based approach for waters that remained polluted
after the application of technology-based and other controls. TMDLs do not them-
selves require compliance; they simply establish a pollution budget for impaired wa-
ters. This information is key to determining what actions should be taken in a wa-
tershed to address ongoing water quality problems. The TMDL is then translated
into permit requirements for point sources. For other pollution sources, the program
relies on local, State, Tribe and Federal watershed plans and programs to achieve
implementation of the TMDL.
This part of the CWA was not a priority for about 20 years while EPA focused
primarily on industrial and municipal dischargers. Few States were addressing the
TMDL requirements in the CWA until the wave of litigation began in the early
1990s, when environmental groups, anxious to get the program off the ground, filed
lawsuits in a total of 40 States. EPA and States now operate the TMDL program
pursuant to judicial settlements or decrees in 22 States. Prior to 1999 fewer than
1,000 TMDLs were completed. As of today, States and EPA have approved or estab-
lished about 8,000 TMDLs. States and EPA continue to work to improve the quality
of TMDLs and use TMDLs to achieve water quality goals on a watershed-basis.
Because TMDLs are water-quality based, they can be information-intensive, some-
times prompting widespread and systematic monitoring to identify and characterize
problems and priorities, and to track progress in solving them. Public involvement
can contribute to this information process both directly and through increased visi-
bility for problem-solving. In addition, such public involvement can help make sure
that TMDLs get translated from allocations into action, because information
brought before the public is itself a driver for action.
WATER QUALITY TRADING
EPA believes that water quality trading, which allows sources to find the least
cost alternative to achieving clean water, can be a critically important tool for re-
storing impaired watersheds efficiently and cost effectively. In its analysis of the
Clinton Administrations Clean Water Initiative, EPA concluded that the total po-
tential savings from all types of trading (point to point, point to nonpoint, and
pretreatment) ranges from $658 million to $7.5 billion annually. Another study of
three watersheds in the Midwest found that the cost of controlling phosphorus load-
ings from point and nonpoint sources could be reduced by 40 percent in Wisconsin
and by more than 80 percent in Michigan when trading was applied between point
and nonpoint sources. These examples illustrate the potential for water quality trad-
ing to reduce pollution with greater efficiency and to achieve significant water qual-
ity and environmental benefits.
Market-based approaches to improving the quality of the environment are not
new. Air emissions trading programs date back to the Acid Rain program and the
lead-in-gasoline phase-down programs implemented under the Clean Air Act. These
and other programs have clearly demonstrated that market-based approaches can
dramatically and quickly reduce emissions at substantially lower costs.
57
In January, EPA issued its 2003 Water Quality Trading Policy. The Policy pro-
vides guidance on aligning trading programs with the Clean Water Act and imple-
menting regulations and identifies common elements of credible trading programs.
The Policy supports trading to improve or preserve water quality in a variety of cir-
cumstances. In unimpaired waters, trading may be used to preserve water quality
by offsetting new or increased discharges of pollutants. In waters impaired by pol-
lutants, trading may be used to achieve earlier pollutant reductions and progress
toward water quality standards in advance of the development of a TMDL. And,
trading may be used to reduce the cost of achieving reductions contemplated by a
TMDL. The Policy highlights existing Clean Water Act flexibility that can facilitate
trading programs and emphasizes the need for accountability and safeguards to en-
sure that trading programs protect our resources and maintain progress toward at-
taining water quality standards.
Key Principles and Safeguards for Water Quality Trading
A number of core principles and environmental safeguards form the foundation
of EPAs Water Quality Trading Policy, and these principles help ensure that trad-
ing programs create actual pollutant reductions, avoid hotspots, provide account-
ability for trading activity, and involve the public:
Trading programs operate within the existing regulatory structure and are con-
sistent with all aspects of the Clean Water Act.
Trading programs are designed to meet water quality goals including TMDLs.
Trading programs ensure that water quality standards are not exceeded.
Trading programs retain enforceability of National Pollutant Discharge Elimi-
nation System (NPDES) permits.
Trading can be used to comply with water quality-based effluent limitations;
however, EPA does not support trading to comply with existing technology-based ef-
fluent limitations except as expressly authorized by Federal regulations.
Trading programs include accountability mechanisms for nonpoint sources that
trade to ensure that promised pollutant reductions actions are taken.
Trading programs are visible and engage the public in program design.
Trading programs monitor to ensure anticipated load reductions are achieved,
or to take corrective action if loads are not adequately reduced.
Trading is voluntary and based on collaboration among watershed stakeholders.
States and Tribes may choose to establish trading programs in accordance with
EPAs Policy. There is no requirement to implement or participate in a trading pro-
gram.
Water Quality Trading: Examples of Environmental Innovation
We already see evidence that water quality trading programs work. For example,
the State of Connecticuts nitrogen credit exchange program is expected to save the
State an estimated $200 million in control costs through trading, while also making
significant gains in cleaning up pollutants in Long Island Sound.
In the Cherry Creek watershed in Colorado, a trading program conducted in con-
junction with a TMDL has reduced phosphorus loads to the Cherry Creek watershed
by approximately 450 pounds per year. The nonpoint source projects that were im-
plemented to create the phosphorus credits have provided ancillary environmental
benefits such as flood control and wildlife habitat. A partnership trading effort in
Illinois Piasa Creek along the Mississippi River will save several millions in capital
improvements to an aging drinking water treatment facility, while reducing sedi-
ment loads to the Mississippi River. The Grasslands selenium trading program in
California, the nations first nonpoint source cap and trade program, utilized an in-
novative penalty and rebate system to create economic incentives to substantially
reduce selenium levels in Kesteron reservoir that were adversely harming bird pop-
ulations.
Experience with trading has also taught us that trading will not work every-
where. For example, the level of pollutant reductions that would need to be achieved
from all sources in a given watershed may be such that additional, or surplus, re-
ductions cannot be achieved so as to allow trading. Certain watersheds may not
have the number and mix of sources necessary for trading to be successful. In addi-
tion, trading programs that work in one State or Tribal area may not be successful
in others. Just as each watershed has unique characteristics and needs, each trad-
ing program will be tailored by State agencies and stakeholders to meet environ-
mental goals. EPA recognizes that States and Tribes face diverse water quality
issues, sociological and economic factors and political considerations. EPAs Trading
Policy is intended to provide consistent guidance, while allowing sufficient flexibility
for States and watershed stakeholders to create workable solutions.
58
EPA believes that water quality trading programs, where carefully designed and
implemented, can be powerful and effective tools for States, Tribes, local govern-
ments and citizens to use in achieving the goals of the Clean Water Act, while also
saving taxpayer dollars.
WATERSHED-BASED PERMITTING
An important part of the watershed approach includes fostering innovations that

provide data and information in ways that allow stakeholders at the local level to
better assess and address their unique problems. Watershed-based permitting is one
such innovation. To clearly communicate support for watershed-based permitting, on
January 7, 2003, we issued the Watershed-based Permitting Policy.
Watershed-based NPDES permitting is an approach to developing NPDES per-
mits for multiple point sources located within a defined geographic area (watershed
boundaries). Through this approach, NPDES permitting authorities consider water-
shed goals and the impact of multiple pollutant sources and stressors, including
nonpoint source contributions. Watershed-based permitting may encompass a vari-
ety of activities ranging from synchronizing permit issuance within a basin to devel-
oping water quality-based effluent limits using a multiple-discharger modeling anal-
ysis.
To better understand how watershed-based permitting approaches work, EPA is
working with permit holders and State agencies to document different approaches
currently being implemented. The lessons learned from these approaches are docu-
mented in a series of case studies featuring watersheds across the country. The case
studies provide background information on the watershed, give an overview of the
permitting strategy or project goals, and describe the expected outcomes and meas-
ures of success. These case studies will provide stakeholders with the information
and lessons learned necessary for implementing this approach in other watersheds.
Current case studies include: the State of Connecticut and the Long Island Sound;
State of North Carolina and the Neuse River; and ConocoPhillips in Colorado. Mu-
nicipal case studies include Louisville-Jefferson County, Kentucky; Sanitation Dis-
trict #1 in Kentucky; and Clean Water Services in Oregon. These case studies are
available on EPAs web site at www.epa.gov/npdes. EPA has also been working with
municipalities through the CWA section 104(b)(3) grants program to investigate ad-
ditional ideas and approaches.
To help interested parties implement watershed-based approaches, EPA published
draft Implementation Guidance in the Federal Register on August 25, 2003 (we are
soliciting comments until Sept. 24th). Technical Guidance, which will focus on devel-
oping permit requirements and procedural issues for permit development and
issuance, will be issued later this Fall. In addition, EPA is providing training course
materials, brochures, speaking at conferences and meetings all designed to create
a network for sharing lessons learned, and innovative approaches to NPDES permit-
ting.
STORMWATER
I am informed that the Subcommittee is interested in the stormwater program,

particularly our efforts to implement the Phase II Rule that became effective on
March 10, 2003. Stormwater runoff from urban, agricultural, and industrial areas
is the most common problem affecting our nations rivers, lakes and coastal waters.
In the latest reports from the States, urban runoff was cited as the source of impair-
ments on 34,871 miles of rivers and streams, 7.7 million acres of lakes, and 5,045
estuary square miles. EPAs NPDES program addresses stormwater runoff from
urban as well as industrial areas.
Stormwater Phase I
The Clean Water Act directs EPA to address stormwater from urban and indus-
trial sources, including construction sites. In 1990, EPA promulgated Phase I of the
stormwater program. That rule requires permits for the control of stormwater dis-
charges for communities with populations over 100,000, construction sites dis-
turbing more than five acres, and many categories of industrial facilities. Over the
last 13 years, EPA has worked closely with the States and municipalities to imple-
ment the stormwater program. Many have risen to the challenge and developed ex-
cellent, comprehensive programs. San Diegos Think Blue campaign is a highly
successful effort that educates local citizenry on the impact of daily life on one of
the Citys most precious resources: the Pacific Ocean. The city of Austin, Texas has
developed a comprehensive program to protect the Edwards Aquifer and the famous
Barton Springs recreational area that includes local ordinances and comprehensive
educational and voluntary efforts and involves a wide spectrum of homeowners, de-
59
velopers, and industry. Another successful effort involved the cleanup of the lower
Charles River that runs through Boston. The city of Boston focused on detecting and
eliminating illicit discharges to its storm sewer system. This effort has lead to the
discovery and removal of dozens of illicit discharges and prevented over 1 million
gallons of contaminated flows from entering the River.
Stormwater Phase II Implementation
Phase II of the stormwater program requires smaller communities located in ur-
banized areas to develop and implement storm water controls to restore and main-
tain local water resources. Phase II also extends permitting requirements to con-
struction activities that disturb between one and five acres of land.
At present, 45 States are authorized to administer the NPDES program and thus
issue permits, including storm water permits, in their respective States. These
States are also responsible for working with communities to implement the Phase
II requirements. Unfortunately, implementation of this program happens to coincide
with one of the most serious economic crises facing State and municipal govern-
ments. State governments are reducing their budgets and their staffs and are also
reducing the funds they normally provide to communities. These budget problems
are affecting the ability of States and communities to implement these new
stormwater requirements. In short, implementation is going a bit slower than ex-
pected.
There are two important milestones that are good indicators of State progress in
implementing the Phase II programissuance of NPDES permits to municipal sepa-
rate storm sewer systems (MS4s) and to construction sites disturbing 1 to 5 acres.
EPA has encouraged States to use general permits to cover all activity within a reg-
ulated category for the entire Stateissuing one general permit for construction and
one for MS4s. To date, approximately 28 of the authorized States have issued per-
mits for MS4s and approximately 34 have issued permits for construction activity.
Indications are that the other States are working hard to finalize these permits and
all are expected to have them finalized within the next year.
EPA was behind schedule in reissuing its construction general permit (issued on
July 1, 2003), and several of the EPA Regional offices (Regions II, VI, IX, X) still
have not issued permits for MS4s in those handful of States where EPA remains
the permitting authority. However, two of these Regions (VI, and IX) have proposed
permits.
We have anecdotal information that many communities did not meet the deadline
for applying for and obtaining permit coverage, often due to the fact that there was
no State permit in place under which they could apply for coverage. Because of the
real economic problems causing delays, EPA is taking a supportive approach to
helping States and communities come into compliance with these requirements. It
is also important to keep in mind that the Phase II regulation allows communities
5 years to develop and implement their programs; therefore, full implementation is
not expected until 2008.
To assist States and communities, EPA is working on a number of fronts. First,
financing is critically important. As you know, the 1987 Amendments to the Clean
Water Act created the State Revolving Fund (SRF) system. Every State and Puerto
Rico now operates a successful revolving fund that provides low-interest loans to
fund a wide variety of projects to clean up rivers, lakes, coastal waters. The Presi-
dents fiscal year 2004 Budget extends the Federal commitment to capitalize the
CWSRF through fiscal year 2011, providing an additional $21 billion in loans over
the next 20 years. We continue to work with each State and are encouraging them
to target their financing toward important water quality efforts, including
stormwater projects.
EPA has been working to develop useful tools to assist States and communities
as they implement this new program. EPA has developed a comprehensive Menu
of Best Management Practices to help communities plan design all aspects of their
stormwater programs. In addition, EPA has produced guidance on developing meas-
urable goals to help States and communities evaluate the effectiveness of their pro-
grams. Finally, EPA has invested considerable effort in its stormwater website
(www.epa.gov/npdes/stormwater) to ensure that States and communities have the
tools and information they need.
Oil and Gas Extension
I understand that the committee is also interested in hearing about the extension
EPA recently finalized for oil and gas construction activities. When EPA wrote the
Phase II regulation over 5 years ago, we significantly underestimated the number
of oil and gas sites that would be affected. Since that time, EPA has become aware
of new information on the impact of the regulation on this industry indicating that
60
it may impact as many as 30,000 facilities. Additionally, questions have been raised
about the appropriateness of some aspects of the program for these sites. Consid-
ering these factors, EPA decided to postpone the effective date of these requirements
until March 10, 2005. Over the next 2 years, we intend to analyze the impact of
these regulations on the oil and gas industry and to evaluate the appropriateness
of the program requirements.
CONCLUSION
All of the tools I have been discussing represent a major programmatic shift that
is necessary to make further progress in cleaning up Americas waters. It is time
to expand our focus: from an almost exclusively point source orientation to one that
examines all sources of pollution, including nonpoint; from relying largely on tech-
nology-based standards to a water quality-based approach; and, from emphasizing
inputs to focusing on environmental outcomes. We have made tremendous progress
in cleaning up our waters over the past three decadesan achievement that is even
more remarkable in view of substantial increases in our population. As a Nation,
we can be proud of how far we have come. These successes should strengthen our
resolve to complete the hard work ahead.
Thank you. I look forward to your questions.
RESPONSES BY TRACY MEHAN TO ADDITIONAL QUESTIONS FROM SENATOR CHAFEE

Question 1a. In March 2003, the Phase II Storm Water Rule went into effect, re-
quiring States and municipalities to begin developing and implementing manage-
ment plans and general permits for stormwater runoff in urbanized areas. Last
year, this Committee approved an amendment, signed into law as part of the Great
Lakes and Lake Champlain Act of 2002, that provided a 1-year fix for States to re-
tain maximum flexibility in utilizing Section 319 funding for addressing stormwater
concerns. What is the current status of a States ability to utilize 319 funds for
Phase II programs and activities? What will the status be at the start of the fiscal
year 2004 budget cycle?
Response. Under the Great Lakes Legacy Act of 2002, States may use Section 319
funds that are appropriated in fiscal year 2003 to carry out projects and activities
in the State related to the development or implementation of Phase II of the storm
water program. Therefore, States may use fiscal year 2003 Section 319 funds for
that broad set of purposes. So long as fiscal year 2003 funds are being used, EPA
understands the law to provide that they may continue to be used for these
stormwater Phase II purposes even in fiscal year 2004 and beyond. In contrast, any
funds that are appropriated in fiscal year 2004 and beyond must be utilized con-
sistent with Section 319 of the Clean Water Act.
Question 1b. If Congress does not provide another temporary extension providing
States with flexibility to utilize 319 funds for Phase II activities, will 319 funds be
eligible for use in Phase II geographic jurisdictions in the future?
Response. EPA described the extent to which stormwater activities may be eligible
for Section 319 funding in guidance, originally issued in May 1996 and re-issued in
October 2003. This guidance provides that Section 319 funds may be used to fund
any urban storm water activities that are not specifically required by a draft Phase
I or II permit. EPA based this guidance on Congress direction in Section 319(h) that
the funds be used by States to implement their nonpoint source management pro-
grams approved under Section 319(b), which by its terms addresses only nonpoint
sources and not permitted point sources.
The guidance provides some examples of stormwater activities that may be funded
under Section 319. These include:
Technical assistance to State and local stormwater programs;
Monitoring needed to design and evaluate effectiveness of implementation
strategies;
BMPs except for BMPs required by a draft or final NPDES permit;
Information and education programs;
Technology transfer and training; and
Development and implementation of regulations, policies, and local ordi-
nances to address stormwater runoff (which may apply to areas covered by
NPDES permits, provided that they apply to non-permitted areas as well).
In addition, EPA notes that a variety of watershed restoration activities fall out-
side the scope of Phase II permit requirements and are thus also fundable under
Section 319 in all areas.
61
Question 1c. During an EPA briefing with Committee staff, the agency indicated
a list of stormwater activities that would be eligible to receive Section 319 funding,
including monitoring and evaluation, information and education, and develop-
ment of enforceable policies. As many of these items are specifically required to be
included in Phase II NPDES permits under the rules six minimum control meas-
ures, would you identify what guidance the agency is providing to States to clarify
319 uses as they proceed with development and implementation of their Phase II
programs?
Response. As indicated in the response to the preceding question, EPA believes
that it is appropriate to recognize that some activities which generally support im-
plementation efforts should logically be implemented in a consistent manner across
both permitted and non-permitted areas. Monitoring and evaluation, information
and education, and the development of enforceable policies are good examples of
this. EPA believes that if a State wishes to establish a State-wide program for such
general purposes as to promote monitoring and evaluation of urban stormwater con-
trols or to provide information and education to citizens, such activities will equally
benefit both the municipal separate storm sewer systems subject to NPDES permits
and those other areas of the State that remain subject to the NPS program. For this
reason, EPA believes that such activities are 319-eligible even though they may
apply to areas covered by NPDES permits, provided that they apply to non-per-
mitted areas as well.
RESPONSES BY TRACY MEHAN TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. One of the later witness testimony expresses concern about trading
in mercury. You have a pilot project in San Diego that addresses mercury trading.
Can you describe this project for the Committee?
Response. The pilot project referred to is taking place in the Sacramento River
basin and is exploring whether trading could be used to offset a future discharge
of mercury from the Sacramento Regional Wastewater Treatment Plant. The plants
NPDES permit, issued by the State of California, requires the plant owner and oper-
ator, Sacramento Regional County Sanitation District, to perform a feasibility study
to identify possible opportunities for mercury offsets (e.g., reduction of mercury
loads from abandoned mine sites). If the State approves the study, it could choose
to reopen the permit and allow the plant to offset the plants discharge above its
current limit of 5.1 pounds per year. The plants discharge is currently lower than
5.1 pounds per year, but may exceed 5.1 pounds per year in the future due to in-
creased flows resulting from population growth. In 2002, EPA provided $50,000 in
project funding to the U.S. Geological Survey for the development of a decision sup-
port tool to assist in determining if mercury offsets are feasible. We have not re-
ceived requests to review any such project other than the Sacramento offset pilot.
EPAs 2003 Water Quality Trading Policy generally does not support the trading of
bioaccumulative toxic pollutants except within a pilot project.
Question 2. As I mentioned in my opening statement, I am very concerned about
giving EPA authority, through the TMDL program, to veto local land use decisions.
If EPA is given authority to approve more than just the TMDL number itself, in-
cluding individual allocations to categories and subcategories of users, how do you
anticipate the TMDL program working without hindering local and individual land
use decisions?
Response. Under the current (1992) TMDL program regulations, EPA approves
the loading capacity for a waterbody and the initial allocations for sources of pollut-
ants including point sources (wasteload allocations) and nonpoint sources (load allo-
cations). EPA believes that the TMDLs must include adequate information to show
that the allocations will result in attainment of water quality standards. EPA does
not approve or disapprove implementation plans as part of the TMDL and therefore
does not get involved in local decisions, but relies on the States to identify the best
methods and approaches for achieving the load allocations. Once the TMDLs initial
allocations are approved, States have a significant degree of flexibility to work with
stakeholders in a watershed to use a range of different approaches to implement
these allocations in the TMDL and, if appropriate, adjust them to achieve water
quality standards more efficiently.
Question 3a. The House Report for the Water Quality Renewal Act of 1984 ex-
plains that Section 402(I)(2) of the Clean Water Act was developed . . . in recogni-
tion of the fact that there are numerous situations in the mining and oil and gas
industries where storm water is channeled around plants and operations through
a series of ditches and similar devices in order to prevent pollution contamination
62
of the storm water. During his testimony, Mr. Lee Fullerminority staff director
to the Committee on Environment and Public Works during the drafting of the 1987
amendmentsfurther explained Congressional intent to distinguish between con-
taminated and uncontaminated runoff. Congress had not anticipated the agency
would attempt to regulate all uncontaminated runoff through the industrial portion
of the storm water program.
Can you explain what EPA believes Congress intent was when it wrote Section
402(l)(2) of the Clean Water Act and where it believes it derives the authority to
regulate uncontaminated runoff from oil and gas sites?
Response. CWA section 402(l)(2) exempts from NPDES permitting requirements
storm water runoff from oil and gas facilities that is composed entirely of flows from
conveyances used for collecting and conveying runoff that are not contaminated by
contact with raw materials, petroleum products or wastes located at the site. EPA
requires permit coverage for a long list of industries and focuses the permit require-
ments on the likely pollutants from each specific industry. Oil and gas is one of the
industries included in EPAs multi-sector general permit (MSGP). However, due to
the CWA section 402(l)(2) exemption, oil and gas facilities need to apply for permit
coverage only if they discharge waste water or storm water that does not meet the
requirements of the exemption. EPA believes that Congresss intent was to exempt
from permit coverage only uncontaminated runoff, not contaminated discharges of
oil or hazardous substances.
Question 3b. Will you please then explain the history behind EPAs decision to
provide oil and gas sites with a 2-year delay to comply? For instance, what informa-
tion did EPA have, and when did they have it, about the impact the rule would have
on oil and gas sites?
Response. When EPA finalized the Storm Water Phase II rule in December 1999
(64 FR 68722), we thought that very few oil and gas facilities would be subject to
the Phase II rule because information the Agency received through a member of the
storm water subcommittee of the Urban Wet Weather Federal Advisory Committee
suggested that most oil and gas sites were either over five acres or under one acre.
In the summer of 2002, EPA learned through data submitted by States and industry
representatives that the number of oil and gas sites that would be subject to the
Phase II rule was significantly greater than originally estimated. In order to verify
the information submitted by States and the oil and gas industry, EPA requested
and used data from the Energy Information Administration (EIA). The EIA is a sta-
tistical agency of the U.S. Department of Energy that serves as the primary clear-
inghouse for all energy-related data in the U.S., including data pertaining to the oil
and gas industry. The EIA data confirmed that the number of oil and gas sites po-
tentially subject to the rule was significantly more than what we had assumed dur-
ing development of the Phase II rule. EPA is using the 2-years to more thoroughly
understand and consider the impacts of the construction requirements on oil and
gas sites. EPA is also evaluating the applicability of the 402(l)(2) exemption to oil
and gas construction sites.
Question 4a. Does the Office of Water review and approve the design plans for
treatment works that receive EPA funds? Has EPA ever funded plants that have
included blending during infrequent wet weather events in their designs?
Response. The Office of Water provides funds for treatment works through the
Clean Water State Revolving Funds (CWSRF), the Clean Water Act Title II Con-
struction Grants Program (Construction Grants) and/or Special Project grants (Spe-
cial Projects) appropriated by Congress. States, not EPA, have the responsibility for
reviewing and approving nearly all design plans for treatment works that receive
these funds.
The CWSRF is the Federal Governments primary funding source for municipal
wastewater treatment works. EPA provides CWSRF capitalization grants to States
which, in turn, contribute matching funds and make project funding loans. The
CWSRF is authorized as a State-run program.
The Construction Grants program was, prior to 1987, the Federal Governments
primary funding source for municipal wastewater treatment works and its oper-
ation, including review and approval of all design plans for treatment works, was
entirely delegated to States under authority of the Clean Water Act.
Special Projects are individually designated by Congress each Fiscal Year. Con-
gress has not required EPA to review and approve the design plans for these
projects.
It is possible that the CWSRF, Construction Grants program and/or Special
Projects appropriations have provided funds for facilities or components of facilities
that have included in their designs blending of primary treated wastewater with
biologically treated wastewater to protect the integrity of the treatment system dur-
63
ing wet weather while still ensuring that discharges meet established secondary
treatment limits. The Agency does not centrally track this type of information.
Question 4b. In a recent briefing of Committee staff, representatives for the envi-
ronmental community claim EPA has not allowed municipalities to blend at their
treatment plants. They further claim that if EPA permits blending, this would be
a new position for the agency. What has the Office of Waters position been on al-
lowing treatment works to blend water during peak storm events?
Response. Reducing the frequency and volume of collection system overflows and
backups of sewage into buildings, and improving the structural integrity of collec-
tion systems have been some of the major objectives of EPAs emphasis on wet
weather discharges over the last decade. Typically, an important component of strat-
egies to reduce collection system overflows and backups into buildings is to increase
the delivery of wet weather flows to the treatment plant. The volume of wet weather
flows delivered to treatment facilities can also be increased by measures that reduce
exfiltration of wastewater out of a collection system. Increased wet weather flow vol-
umes at treatment plants, along with increased attention to water quality problems
caused by wet weather flows have lead to increased attention to the manner by
which publicly owned treatment works (POTWs) manage wet weather flows.
As these issues received greater attention, regulatory agencies, municipal opera-
tors of POTWs, and representatives of environmental advocacy groups have ex-
pressed confusion over and requested clarification regarding the proper interpreta-
tion of certain regulatory provisions in the context of wet weather flow management
at POTW treatment plants. Of particular concern are National Pollutant Discharge
Elimination System (NPDES) permit requirements for peak wet weather discharges
from a treatment plant when those discharges are comprised of peak wet weather
flows (i.e., incoming sanitary wastewaters are more dilute due to wet weather influ-
ences) that are routed around biological treatment units and blended with the flows
from the biological units (or other advanced treatment units) prior to discharge.
Such re-routing where the capacity of biological (or other advanced) treatment units
is exceeded might be necessary to avoid damaging the treatment units. Questions
have focused primarily on the situation where the final discharge of these blended
waste streams would meet effluent limitations based upon the secondary treatment
regulations and any more stringent limitations necessary to meet water quality
standards. EPAs proposed clarification of its interpretation of these regulations,
along with draft implementation guidance, was published in the Federal Register
for public comment on November 7, 2003. EPA intends its policy would provide a
framework that:
(1) ensures appropriate management of wet weather flows at a POTW con-
sistent with generally accepted good engineering practices and criteria for long-
term design,
(2) clarifies technology-based requirements
(3) uses water quality-based effluent limitations to address residual site-spe-
cific health and environmental risks, and
(4) provides appropriate safeguards, including a monitoring scheme and pro-
tection for sensitive waters.
The draft policy addresses only the limited situations where blended wet weather
POTW effluent meets permit limitations. EPAs intention is to ensure that NPDES
requirements be applied in a nationally consistent manner that improves the capac-
ity, management, operation and maintenance of POTW treatment plants and collec-
tion systems and protects human health and the environment.
RESPONSES BY EPAS OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE TO

ADDITIONAL QUESTIONS FROM SENATOR INHOFE
Question 1. EPA had cited several aviation fuel providers for not having secondary
containment for their trucks. Aviation fuel providers were shocked at the application
of these regulations to their vehicles. It had long been the understanding of the in-
dustry that the secondary containment requirement of the SPCC rules did not apply
to aviation fuel trucks used on airports. This had been confirmed by approval of
many airport SPCC Plans that do not address this requirement for aviation fuel
trucks. The aviation industry has sought to work with the EPA to provide the agen-
cy with an understanding of the inappropriateness of imposing this requirement on
aviation fuel trucks, yet the agency has been slow to respond to these concerns and
seems little interested in recognizing the unique nature of airport fueling oper-
ations. What steps will the EPA take to ensure that aviation fuel providers, particu-
larly those at smaller non-commercial airports, are not unduly burdened by impos-
64
ing secondary containment requirements on fuel trucks used only to transport and
deliver such products?
Response. EPA has been involved in an active dialog with the aviation industry,
including fuelers, on the applicability of the SPCC requirements to this industry sec-
tor. We have discussed their concerns within EPA and intend to provide guidance
on these activities. EPA is currently focusing primarily on resolving litigation re-
lated to the 2002 final rule, but expects to address questions regarding the applica-
bility of containment requirements by February 2004, in time to allow the develop-
ment of revised SPCC Plans by the August 17, 2004 compliance deadline. We plan
to discuss issues associated with revised SPCC plans with the regulated community,
including representatives of smaller airport fuel providers, before any guidance is
communicated in final form.
Additional Background: The Spill Prevention Control and Countermeasures
(SPCC) regulation (40 CFR 112) which has been in effect since 1974 was recently
amended in a 2002 final rule. The regulation applies to non-transportation-related
facilities with a total aboveground (i.e., not completely buried) oil storage capacity
of greater than 1,320 gallons. To be regulated, in addition to the storage capacity
criteria, a facility must due to its location reasonably be expected to discharge oil
into navigable waters of the U.S. or adjoining shorelines.
The main requirement of facilities subject to the regulation is the preparation and
implementation of a Plan to prevent the discharge of oil into waters of the United
States. These Plans are certified by a professional engineer and not subject to Agen-
cy approval. Mobile fuelers operating exclusively within the confines of a facility
(such as an airport) are considered non-transportation related and, therefore, sub-
ject to SPCC requirements which must be addressed in the airport SPCC Plan or
in a separately maintained SPCC Plan.
Question 2. What is the basis for EPA determining that the previous rule was in-
capable of planning for spill prevention at loading operations for oil and natural gas
exploration and production facilities and that these facilities needed to provide sec-
ondary containment around the loading area rather than another approach, such as
a simple mechanism to capture any spilled product? Many of these loadings are
done infrequently because of the low production volumes of these marginal wells.
Response. This question appears to be directly related to the loading rack issue
currently subject to litigation. EPA is actively involved in settlement discussions in
the hopes of resolving that litigation. Additionally, EPA has met with stakeholders
outside of the litigation on this, as well as other, issues. We expect to be able to
discuss this issue more fully within the next one or 2 months.
Question 3. The USDA Natural Resource Conservation Service (NRCS) fully un-
derstands how farms impact their environment and works very closely with farmers
to minimize those impacts through best management practices, not heavy-handed
Federal regulation. The Farmers in my State of Oklahoma correctly believe the
NRCS has a much better appreciation for the daily struggle of maintaining a farm
in todays economy than EPA does while keeping the environment always in mind.
Is there a means by which EPA could work through or with the NRCS to help farm-
ers address any pollution problemswhich have not been documentedwith their
tanks?
Response. Over the past 6 months we have initiated dialog with representatives
of the agricultural sector regarding the SPCC regulation. We are aware of the con-
cerns of this sector and are committed to working with them in partnership with
the United States Department of Agriculture (USDA) to address their concerns. We
plan to work with USDA to develop guidance to help farmers effectively meet the
SPCC spill prevention requirements. We believe the performance-based nature of
the SPCC rule (which allows waivers of most requirements when equivalent envi-
ronmental protection is provided) allows for the flexibility needed by small busi-
nesses such as farms.
RESPONSES BY TRACY MEHAN TO ADDITIONAL QUESTIONS FROM SENATOR JEFFORDS

Question 1. Can you describe the relative contribution of storm water versus other
sources of pollution to the 45 percent of the nations waters that remain impaired,
including a description of the types of pollutants normally found in storm water and
the change in pollutant content that could be expected in cold weather climates?
What role does transportation infrastructure play in generating storm water runoff.
Response. EPA compiles data on water quality impairments and sources of im-
pairments consistent with the requirements of Section 305(b) of the Clean Water
Act. The most recent biennial report for which data are available is from calendar
65
year 2000 (2000 National Water Quality Inventory Report). In that report, EPA pre-
sents data independently for three significant types of waterbodies: rivers and
streams, lakes and reservoirs, and coastal resources. The report defines a number
of categories for sources of waterbody impairments. Many of these are storm water
management related. Following is impairment data for each of the waterbody types:
Rivers and Streams.Of miles assessed, 39 percent are impaired (a total of
269,258 miles out of the 699,946 miles assessed). Of the total, following is the per-
cent of the impairment due to the identified source: Agriculture 48 percent, Hydro-
logic Modification 20 percent, Habitat Modification 14 percent, Urban Runoff/Storm
Sewers 13 percent, Forestry 11 percent, Municipal Point Sources 10 percent, Re-
source Extraction 10 percent.
While not clearly delineated as storm water sources, other than the municipal
point sources, all of the other sources are likely heavily influenced by storm water
runoff.
Lakes.Of the acres assessed, 45 percent are impaired (a total of 7.7 million
acres out of the 17.3 million acres assessed). Impairment sources are as follows: Ag-
riculture 41 percent; Hydrologic Modifications 18 percent; Urban Runoff/Storm Sew-
ers 18 percent; Nonpoint Sources 14 percent; Atmospheric Deposition 13 percent;
Municipal Point Sources 12 percent; Land Disposal 11 percent.
Coastal Resources.Of the square miles assessed, 51 percent are impaired
(15,676 square miles out of 31,072 square miles assessed). Impairment sources are
as follows: Municipal Point Sources 37 percent; Urban Runoff/Storm Sewers 32 per-
cent; Industrial Discharges 26 percent; Atmospheric Deposition 24; percent; Agri-
culture 18 percent; Hydrologic Modifications 14 percent; Resource Extraction 12 per-
cent.
Common pollutants found in storm water include pathogens, nutrients, sediment,
oil and grease, toxic metals, and debris. In cold weather climates, road salts are an
additional pollutant of concern that have been shown to impact water quality.
Transportation infrastructure can play a significant role in storm water runoff.
Annual pollutant loads generated from roads and associated facilities were esti-
mated as part of the Agencys ongoing effort to develop national guidelines for the
construction and development industry (FHWA 1996, 2001, HUD 2002, USDA 2000,
NWS), however they are likely overestimates because they do not account for in-
place management practices to control storm water runoff.
Question 2. What is EPAs cost estimate for mitigating the impact of storm water
runoff?
Response. It is very difficult to reliably estimate the cost to mitigate the impact
of storm water runoff. EPAs Clean Watersheds Needs Survey 2000 Report to Con-
gress developed a modeled estimate for municipal storm water management pro-
grams. This total capital cost of $8.4 billion represents the estimated Clean Water
State Revolving Fund-eligible portion of costs to develop and implement storm water
programs for municipal separate storm sewer systems (MS4s).
Question 3. What is EPA doing to ensure that post-construction storm water dis-
charges are addressed?
Response. EPA has several regulations that address the impacts of post-construc-
tion runoff on water quality. The medium and large municipal separate storm sewer
systems (MS4s), covered by the regulations promulgated in November 1990, must
develop, implement, and enforce programs to reduce the discharge of pollutants
from areas of new development and significant redevelopment. Specifically, these
programs are to address controls to reduce pollutants in discharges from MS4s after
construction is completed. The small MS4s, covered by the regulations promulgated
in December 1999, must develop, implement and enforce a program to address
storm water runoff from new development and redevelopment projects that disturb
one acre or more. These programs must include strategies appropriate for the com-
munities and are to: include both structural and non-structural controls; use an or-
dinance or other regulatory mechanism; and ensure adequate long-term operation
and maintenance of BMPs.
Additionally, EPAs recently reissued construction general permit (July 1, 2003),
applicable to construction projects disturbing one acre or greater, requires construc-
tion site operators to identify all post-construction storm water management meas-
ures that will be installed during the construction process to control pollutants in
storm water discharges after construction activities have been completed. Such
measures are to be designed and installed in compliance with any applicable Fed-
eral, State, tribal, or local requirements.
66
Question 4. Can you describe some of the cases in which EPA and/or the Depart-
ment of Justice have used section 309(c)(1) to prosecute cases that involved pri-
marily environmental harm?
Response. Please note that the response to this question regarding the CWA neg-
ligence provision was prepared by EPAS Office of Enforcement and Compliance As-
surance.
The Clean Water Act negligence criminal offense, 33 USC 1319(c)(1)(A), is an es-
sential enforcement tool that reaches illegal conduct resulting in significant and
avoidable environmental harm that would likely otherwise go unprosecuted, such as
in the case of the Exxon Valdez oil spill (see case summary, below). The Agency,
in concert with Federal prosecutors, has reserved the use of this provision for appro-
priate circumstances, including violations where corporations or their employees
have failed to take proper measures to prevent discharges of substantial quantities
of pollutants into our nations waters despite the fact that such discharges were rea-
sonably foreseeable. The Agency stands behind its record of using this provision in
a fair and just manner that promotes prevention of such pollution in the future,
while ensuring that no entity or individual is punished for a mere accident.
Some of the CWA negligence prosecutions that were initiated primarily because
of environmental harm are described below:
Recent examples
U.S. v. Omar Mining (S.D. W. Va. 2003).On February 24, 2003, Omar Mining
was sentenced for negligent violations of the Clean Water Act, 33 U.S.C. 1319
(c)(1)(A). The company was sentenced to 60 months of probation and ordered to pay
a criminal fine of $200,000. Omar Mining was also required to implement an envi-
ronmental management system and undergo annual third-party environmental au-
dits.
On August 12, 2001, a 15,000-gallon black water spill occurred at the Omar Min-
ing facility. The spill resulted from the companys failure to monitor underground
water levels during the underground injection of waste water. The West Virginia
Department of Environmental Protection (WVDEP) allowed the excess water from
the mine to be pumped out through a permitted discharge point.
On August 23, 2001, WVDEP detected a fish kill in the creek downstream from
Omar Mining. The fish kill was traced back to Omar Mining where it was discov-
ered that the company had re-routed the mine pumping operation to an unpermitted
holding pond discharge point formerly used to settle out heavy metals from mine
runoff. Subsequently, an Omar Mining supervisor activated a water treatment facil-
ity connected to the pond, but failed to monitor the amount of treatment material
flowing into the pond. These actions resulted in the fish kill.
Prior to the initiation of the criminal negligence prosecution, Omar Mining was
the subject of a large number of civil enforcement and administrative actions by
WVDEP.
U.S. v. Richard Anthony (W.D. Va. 2002).On January 29, 2002, Richard An-
thony, owner and president of Sanville Utilities, Inc., in Bassett, Virginia, was
criminally charged for negligently discharging pollutants without an NPDES permit
into Blackberry Creek, a water of the United States, in violation of 33 U.S.C.
1319(c)(1)(A). Sanville Utilities operated the Fairway Acres wastewater treatment
plant (WWTP) which provided sewage treatment services for a small apartment
complex and single-family home community. Richard Anthony served as the sole op-
erator of the WWTP for a period of years, however, he abandoned the plant in Sep-
tember 1999 after its NPDES permit expired, leaving the plant to discharge un-
treated sewage into Blackberry Creekan estimated 1.2 million gallons of raw sew-
age per day for a minimum of 1 month. The Virginia Department of Health issued
a health emergency notice in response to the sewage discharge which occurred be-
tween September 8, 1999 and September 27, 1999. On April 23, 2002, Richard An-
thony pled guilty to one count of negligently violating the Clean Water Act. On July
11, 2002, Anthony was sentenced to serve the maximum 12 months in prison, fol-
lowed by 12 months of supervised release. Restitution was ordered in the amount
of $31,068.73.
U.S. v. Koch Petroleum Group, L.P. (D. Minn. 2000).On September 28, 1999,
Koch Petroleum Group, L.P. (Koch), was charged in a two count information with
negligently violating the Clean Water Act, 33 USC 1321(b)(3) & 1318(a) &
1319(c)(1). Koch admitted that it negligently discharged oil into a wetland area and
an adjoining navigable water near Spring Lake Park Reserve, an area next to the
Mississippi River in Dakota County, Minnesota. In early 1993, Koch knew that a
tank had lost between 200,000 and 600,000 gallons of aviation fuel and that the fuel
would reach surface water, but the company did not develop a plan to recover the
fuel until June, 1997. While establishing a system to recover the fuel, Koch installed
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a one-half mile long trench and booms in a wetland to prevent the jet fuel from
reaching the Mississippi River, which had the effect of destroying a portion of the
surrounding ecosystem and wildlife habitat. On March 1, 2000, Koch pled guilty to
the information and was sentenced to 36 months of probation and was ordered to
pay a criminal fine of $6,000,000. Koch was also ordered to pay $2,000,000 to Da-
kota County, Minnesota, for remediation of the Spring Lake Park Reserve.
U.S. v. Plummer Excavating, Inc. (D. Minn. 2000).On April 21, 1999, Randy Lee
Konickson, vice president of Plummer Excavating, Inc., and Plummer Excavating,
Inc., were each indicted and charged with a misdemeanor count under the Clean
Water Act, 33 USC 1319(c)(1), for negligently discharging oil from a crude oil pipe-
line into waters of the United States. In September 1998, Konickson directed an em-
ployee to bury rocks in a field adjacent to the companys Plummer, Minnesota facil-
ity. Konickson knew the field contained buried pipelines. When the employee struck
a crude oil pipeline with a backhoe, Konickson failed to notify the appropriate au-
thorities. The pipeline ruptured and caused nearly 5,200 barrels or 218,000 gallons
of crude oil to spill into the field and eventually into a county drainage ditch that
flows into the Clearwater River. As a result of the spill, authorities evacuated the
town of Plummer. On December 10, 1999, Konickson was sentenced to 2 years of
probation and 100 hours of community service. On January 7, 2000, Plummer Exca-
vating was sentenced to 36 months probation, and ordered to pay a criminal fine
of $50,000.
Selected historicalexamples
U.S. v. Puerto Rico Electric Power Authority (D.P.R. 1998).The Puerto Rico Elec-
tric Power Authority (PREPA) pled guilty to criminal negligence violations of the
Clean Water Act, 33 USC 1319(c)(1)(A), on June 1, 1998. The companys guilty
plea followed an investigation by the Environmental Protection Agency in conjunc-
tion with the Federal Bureau of Investigation of a September 1995 sulphuric acid
spill into the Bayamon River, on the north coast of Puerto Rico. The acid had been
transferred to a wastewater storage tank that was not designed to withstand acid.
As a result, about 270,000 gallons of highly acidic water spilled, contaminating the
river and killing marine life.
PREPA was placed on a 2-year probation. Under its probation, PREPA agreed to
establish environmental procedures and file quarterly reports in court showing that
it is complying with environmental standards.
U.S. v. Eklof Marine Corp. (D.R.I. 1997)
On September 25, 1997, a three count information was filed charging defendants
Eklof Marine Corporation, Thor Towing Corporation, Odin Marine Corporation, Les-
lie Wallin and Gregory R. Aitke with a negligent Clean Water Act count, and only
the corporate defendants with a Rivers and Harbors Act count and a Migratory Bird
Treaty Act count. This case involved a spill of approximately 828,000 gallons of
heating oil being transported by barge off the coast of Rhode Island. The spill re-
sulted from the confluence of four factors: (1) a severe winter storm, the forecast
of which was disregardedalthough other ships in the area had sought safe harbor;
(2) an engine room fire on the tug, which the crew were not equipped to handle;
(3) a jury-rigged anchor on the barge that was missing the necessary anchor winch
because it was removed 2 weeks earlier for repair; and (4) poor maintenance of the
tug and barge. The spill, by far the worst in Rhode Island history, killed hundreds
of thousands of lobsters and other marine life, as well as hundreds of migratory
birds. As a result of the spill, Rhode Island waters were closed to fishermen for
months. Moreover, the oil washed up on Moonstone Beach, a federally protected ma-
rine sanctuary, and other fragile coastal areas.
As a result of the violations, the corporate defendants were ordered to pay a $7
million fine, an additional $1.5 million to the Nature Conservancy to purchase and
preserve land in the area of the spill, and make an additional $1 million worth of
remedial safety measures to its fleet of vessels. The vessels captain, Gregory
Aitken, was sentenced to 2 years probation and a $10,000 fine. Eklof Marine Cor-
poration president, Leslie Wallin, was sentenced to 3 years probation and a
$100,000 fine.
U.S. v. Exxon Corp. (D. Alaska 1991)
On March 24, 1989, the Exxon Valdez ran aground on Bligh Reef, spilling approxi-
mately 11 million gallons of oil into Alaskas Prince William Sound, affecting ap-
proximately 1,300 miles shoreline, with 200 miles considered heavily or moderately
oiled. The wildlife death toll from the immediate impact of the spill was estimated
to be: 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to
22 killer whales, and billions of salmon and herring eggs. As a result of this spill,
the United States charged Exxon Shipping Company, the owner of the Exxon
Valdez, and its parent, Exxon Corporation, with five criminal counts each, with the
68
lead count being under the Clean Water Act for negligent discharge of a pollutant
without a permit in violation of 33 U.S.C. 1319 (c)(1)(A). In March 1991, Exxon
Shipping agreed to plead guilty to three misdemeanor counts, include the Clean
Water Act violation and lesser charges under the Refuse Act and the Migratory Bird
Treaty Act. Exxon Corporation pleaded guilty only to a violation of the Migratory
Bird Treaty Act. The criminal fines and restitution totaled $125,000,000
($25,000,000 of which was straight fine) still the largest amount in U.S. environ-
mental history.
U.S. v. Ashland Oil, Inc. (W. D. Pa. 1988)
On January 2, 1988, one of Ashland Oils storage tanks collapsed, spilling more
than 500,000 gallons of oil into the Monongahela River outside of Pittsburgh. On
September 15, 1988, a Federal grand jury indicted Ashland for negligently violating
the Clean Water Act, 33 USC 1319(c)(1)(A). The criminal investigation determined
that routine tests were not conducted on the tank and that following proper, indus-
try-standard procedures might have prevented the vessel from rupturing. Ashland
Oil was ordered to pay a criminal fine of $2.25 million.
U.S. v. Pennwalt Corp. (W.D. Wash. 1988)
A tank owned and operated by Pennwalt Corp. containing chemicals collapsed and
spilled more than 75,000 gallons into an adjacent tidal waterway. A grand jury re-
turned indictments against both the corporation and three corporate officers, charg-
ing them with negligently . . . discharging . . . certain hazardous chemicals . . .
as the result of the collapse of a . . . poorly maintained . . . steel storage tank.
The chief executive of Pennwalt entered a guilty plea on behalf of the corporation,
acknowledging that Pennwalt had a duty to anticipate and perform such mainte-
nance and take other appropriate steps as reasonably necessary to prevent releases
of chemicals into the waters of the United States. The corporation paid a $1.1 mil-
lion fine.
Question 5. The EPA website includes an extensive list of funding programs asso-
ciated with storm water management. Can you identify which of those programs are
explicitly for the purpose of storm water management? Please identify how much
money in each of those programs has ever been spent on storm water management.
Response. Of the 32 funding programs associated with storm water management,
none are exclusively for providing funds for storm water projects. Three of the most
prominent funding programs that provide money for storm water projects are the
Clean Water State Revolving Fund, Water Quality Cooperative Agreements (CWA
section 104(b)(3)), and Nonpoint Source Implementation Grants (CWA section 319).
EPA does not track funding specifically for storm water management in all grant
programs, mainly because of the multi-faceted nature of storm water management.
EPA does have data indicating that between 1991 and 2002, the Clean Water State
Revolving Fund has spent $193 million on Storm Sewers. This investment excludes
the investment in combined sewer overflow (CSO) and sanitary sewer overflow
(SSO) correction. The Clean Water State Revolving Fund also spent over $1.6 billion
on nonpoint source projects between 1990 and 2002, many of which addressed storm
water runoff from urban and rural areas. For Section 319 grants, EPA estimates
that from FY 1994 to FY 2002, at least $100 million was used for urban runoff
projects. Additionally, EPA regularly funds research and demonstration projects to
address storm water under Section 104(b)(3) cooperative agreements and in recent
years has funded more than $5 million in storm water management projects.
Question 6. What is the implementation status of the storm water phase II pro-
gramhow many States have completed their general permits?
Response. Phase II Municipal Separate Storm Sewer (MS4) permits28 of the 45
States required to issue small MS4 permits have completed those efforts. Of the re-
maining 17 States, 4 have public noticed their draft permits, but several of these
States have not finalized the permits because of the concerns about the impact of
the recent 9th circuit ruling that requires some changes to EPAs small MS4 general
permitting provisions. EPA was sued on 22 different aspects of the 1999 storm
water phase II rule. The 9th circuit recently issued a final decision that supported
EPA on all issues, except three aspects of the small MS4 general permit program.
The court said that the Notices of Intent (NOIs) for small MS4s had to be public
noticed; the public must have the opportunity to request a public hearing on the
NOI; and the NOIs must be reviewed by the permitting authority. EPA is still re-
viewing the court decision to determine what actions EPA and the authorized States
should take to comply. Three States plan to issue individual permits to small MS4s,
and one has in fact issued some of those required permits. EPA Regions 1, 6, and
10 are responsible for issuing small MS4 general permits to cover the remaining five
States. Region 1 has issued its permit, which covers two States. Region 6 proposed
its permit, which covers one State, but has not finalized it due to concerns about
69
the 9th circuit ruling mentioned above. Region 10 has obtained individual permit
applications from small MS4s in its two States and is in the process of trying to
decide how to proceed due to the 9th circuit ruling.
Phase II Construction permits33 of the 45 States required to issue small con-
struction permits have completed those efforts. The EPA Regions have issued small
construction general permits that are applicable in all five States where EPA is the
permitting authority.
Question 7. The Agencys information provided in the public docket on this rule-
making cites only data from the Energy Information Administration, specifically
Table 5.2 of the Monthly Energy Review, as the source for the estimate of 30,000
sites that will be affecteddata, which has been collected by EIA since 1973. Why
did EPA not review this data in 1999 when developing the original regulation?
Response. When EPA developed the Economic Analysis for the Phase II rule, the
information obtained for the analysis showed that most sites were either over five
acres, and therefore already regulated, or less than one acre, and therefore would
not be covered by the construction permitting requirements of the rule. In devel-
oping this rule, we worked to obtain information with a wide range of stakeholders
through the Federal Advisory Committee Act (FACA).
Question 8. In the Agencys correspondence with me, you also reference estimates
of the number of wells being drilled each year from States with oil and gas activity
and industry representatives. Which States provided input to the Agency? What in-
dustry representatives provided input to the Agency? Were the industry estimates
validated in any manner before the 2-year exemption was adopted? Was any input
sought from industry watchdog or environmental organizations prior to issuing a
proposed rule?
Response. We obtained information from Texas and Oklahoma through our Re-
gional Office. We received input from numerous industry representatives, including
the Texas Independent Producers and Royalty Association, the Louisiana Inde-
pendent Oil and Gas Association, the Oklahoma Independent Petroleum Association,
and the Independent Petroleum Association of America. Industry representatives,
affected States, and EPA Regional staff all agreed that there were large numbers
of oil and gas sites potentially affected by our storm water rules. We have an obliga-
tion to consider the impact of our regulations on all affected industries. There could
be many more sites than even the industry has estimated, but we may find that
they are not significantly impacted. The 2-year postponement rule provides EPA
with the time to make this determination. Environmental organizations were in-
formed about this situation before the rule was issued.
Question 9. I have attached two reports by the EIA regarding its drilling esti-
mates. Are you aware that the EIA data is not collected by the government, but is
instead compiled from industry sources? Are you aware that the EIA itself has iden-
tified accuracy problems with its own data used in developing the reports that EPA
relied on to support this 2 year exemption for the oil and gas industry? If so, why
has the Agency depended so heavily on this data to support its actions in support
of the oil and gas industry.
Response. EPA is aware that the EIA is not the primary data collector for oil and
gas exploration activity. However, EPA recognizes EIA as the preeminent source of
national estimates of drilling activities, having compiled these data for 25 years.
EPA considers the EIA data to be the best data currently available, notwithstanding
the issues of accuracy and completeness raised by EIA in its review of its own data.
EPA does not consider these potential problems to be significant in making its de-
termination to extend the compliance date for oil and gas related construction activ-
ity. In fact, many of the corrections listed in the EIA reports actually increase the
number of drill sites reported previously, suggesting that EIAs data may actually
underestimate the total number of drill sites potentially affected by the 2-year ex-
emption. In addition, as mentioned in the answer to Question 8, additional data
from industry were used to supplement EIA estimates.
Question 10. Clean Water Act section 402(l), and the legislative history that ac-
companies it, is explicit in its application to particular types of discharges from par-
ticular types of systems. Clearly, the intent was to exempt uncontaminated flows
from conveyances or systems of conveyances already in place that are used for col-
lecting runoff. In the letter that I sent to you with five other members of the Senate
on February 20 of this year, we asked a question on this topic that was not an-
sweredwhat is the difference between uncontaminated flows from conveyances or
systems of conveyances and the discharges resulting from a small construction
project at an oil and gas site?
70
Response. CWA section 402(l)(2) exempts from Federal permitting requirements
storm water runoff from oil and gas facilities that is composed entirely of flows from
conveyances used for collecting and conveying runoff that are not contaminated by
contact with raw materials, petroleum products or wastes located at the site. EPA
has extended the permit coverage deadline until March 10, 2005, for small construc-
tion activity associated with oil and gas exploration, production, processing, or treat-
ment operations or transmission facilities. EPA is currently assessing the applica-
bility of the 402(l)(2) exemption to such activities.
Question 11. Does the EPAs proposed rule on TMDLs comply with EO 12866 re-
quirements regarding the consideration of the benefits and costs to the natural envi-
ronment of a significant regulatory action? If so, please describe the results of your
cost-benefit analysis. If not, please explain why EPA has not complied with EO
12866.
Response. EPAs draft proposed watershed rule is under informal review among
Federal agencies, CEQ and OMB. EPA will wait until the conclusion of that process
to decide whether to go forward with a formal proposal. If EPA does go forward with
a proposed rule, we will comply with all the requirements set forth under EO 12866.
Question 12. I understand that the EPA is planning to re-interpret the bypass
rule for sewage treatment plants so as to allow sewage to be discharged without aer-
obic treatment during rain events. How would this change impact the concentration
of viruses and parasites, like cryptosporidium and giardia, in wastewater effluent?
What analysis did EPA conduct to reach those conclusions?
Response. As EPA has focused greater attention on wet weather issues, regulatory
agencies, municipal operators of POTWs, and representatives of environmental ad-
vocacy groups have expressed confusion over and requested clarification of the prop-
er interpretation of certain regulatory provisions in the context of wet weather flow
management at treatment plants. As part of the Agencys effort to ensure appro-
priate management of wet weather flows at a POTW, EPA is evaluating the applica-
bility of the bypass provision at 40 CFR 122.41(m) to diversions of a portion of peak
wet weather flow at POTWs. We have prepared a draft policy document which was
published in the Federal Register on November 7, 2003, requesting public comment.
EPA intends its policy would provide a framework that:
(1) ensures appropriate management of wet weather flows at a POTW con-
sistent with generally accepted good engineering practices and criteria for long-
term design,
(2) clarifies technology-based requirements,
(3) uses water quality-based effluent limitations to address residual site-spe-
cific health and environmental risks, and
(4) provides appropriate safeguards, including a monitoring scheme and pro-
tection for sensitive waters.
The draft policy addresses only the limited situations where blended wet weather
POTW effluent meets permit limitations. The NPDES regulations require that
NPDES permits, including those for blended discharges, must include water quality-
based effluent limitations to control all pollutants or pollutant parameters which the
Director of the NPDES program determines are or may be discharged at a level
which will cause, have the reasonable potential to cause, or contribute to a non-at-
tainment of any water quality standard. EPAs 1986 water quality criteria for patho-
gens provides a relevant tool for establishing water quality-based effluent limita-
tions for infrequent blended discharges. The 1986 criteria serve as an indicator for
a wide range of pathogens in wastewater, including viruses and parasites, that can
produce acute gastrointestinal disease symptoms. The data supporting the 1986 bac-
teria water quality criteria were obtained from a series of epidemiological studies
that examined the relationship between swimming-associated illness (namely, acute
gastrointestinal illness) and the microbiological quality of the waters used by rec-
reational bathers. The wastewater sources affecting the recreational waters evalu-
ated during the studies for the 1986 criteria received a variety of treatment, includ-
ing no treatment, partial treatment and secondary treatment. Discharges occurring
under the draft policy would be within the range of treatment scenarios considered
during the epidemiological studies used to develop the 1986 criteria. Hence, we be-
lieve the 1986 criteria is a relevant indicator for protecting against gastrointestinal
disease associated with potential exposure to ambient waters. However, the 1986
criteria is not a direct measure of Giardia or Cryptosporidium. The Beaches Envi-
ronmental Assessment and Coastal Health (BEACH) Act, enacted on October 10,
2000, P.L. No. 106284 Stat. 870, address pathogens and pathogen indicators in
coastal recreation waters. Among other things, the BEACH Act added section 303(i)
to the Clean Water Act to require States and Tribes with coastal (and Great Lakes)
71
recreation waters to adopt new or revised water quality standards by April 10, 2004,
for pathogens and pathogen indicators for which EPA has published criteria under
section 304(a). The BEACH Act also directs EPA to promulgate standards for States
and Tribes that fail to adopt standards for pathogens and pathogen indicators for
coastal recreation waters that are as protective of human health as those published
by EPA.
Question 13. What requirements has EPA put in place to ensure that there is pub-
lic participation in trading programs?
Response. Requirements for public notice, comment and opportunity for hearing
on all NPDES permits and TMDLs, including those that have provisions for trading,
are established by the Clean Water Act and its implementing regulations. In addi-
tion to the opportunity for public participation in trading already provided through
NPDES permits and TMDLs, EPAs 2003 Water Quality Trading Policy encourages
States and tribes to involve the public at the earliest stages of trading program de-
velopment and to provide easy and timely public access to trading information. As
a practical matter, States wishing to develop a trading program will need to do so
by incorporating provisions for trading into core water quality management pro-
grams such as watershed plans, water quality standards, TMDLs, and NPDES per-
mits. Some States choose to incorporate trading provisions in rulemaking. The
mechanism a State uses is a matter of State law and policy. EPAs trading policy
does not specify which approach a State must use; rather it provides flexibility for
States to develop trading programs while advising consultation with the public on
trading program design and ready access to information on trades. As a practical
matter, virtually any mechanism a State chooses would require public notice and
comment under State and/or Federal law.
Question 14. Your staff referenced some monitoring data that EPA has evaluated
from large municipalities and large construction sites regarding the effect of the
storm water phase I regulations on water quality. Please provide this information
to the committee in response to the question of how has the storm water phase I
regulation, covering large municipalities and large construction sites, impacted
water quality.
Response. In accordance with section 431(b) of the Department of Veteran Affairs
and Housing and Urban Development and Independent Agencies Appropriations Act
of 2000, Public Law 10674 (1999), EPA conducted an evaluation of the Phase I
Storm Water Program to provide a detailed explanation of the impact, if any, that
the Phase I program has had in improving water quality in the United States. EPA
presented its Report to Congress on the Phase I Storm Water Regulations to the
Committee on Environment and Public Works and the Committee on Transportation
and Infrastructure on March 1, 2000 (EPA833R00001, February 2000). That re-
port led the Agency to the following findings:
Although information on the water quality impacts of Phase I is unavailable
at the national level, loading reductions and subsequent water quality impacts
have been documented at specific sites.
The fundamental approach for addressing storm water discharges involves
the use of site specific pollution prevention and best management practices.
These measures can be implemented cost-effectively.
The flexible nature of the program has encouraged innovation on the part
of municipalities, construction operators, and industrial facilities and allowed
them to tailor control programs to their own unique circumstances.
Further improvements can be made in both program design and implementa-
tion to enhance effectiveness.
At present, EPA has funded a number of 104(b)(3) cooperative agreements to
evaluate storm water Phase I monitoring data to further evaluate the impacts of
the program. Funds have been awarded to the University of South Florida, the Uni-
versity of Alabama, and the California State Water Resources Control Board to sum-
marize and evaluate those data. Results of those efforts are expected in FY04 and
FY05.
Please note that the responses to the questions regarding EPAs investigative dis-
cretion and the Colonial and Olympic Pipeline cases were prepared by EPAs Office
of Enforcement and Compliance Assurance.
Question 15. Mr. Chairman, I ask unanimous consent that the EPAs investigative
discretion memorandum of January 12, 1994 be included in the hearing record. Mr.
Mehan, can you articulate the standard that EPA uses to determine when to crimi-
nally prosecute cases? I understand that this memorandum was issued by the Office
72
of Enforcement. Please coordinate with your counterpart to provide a complete an-
swer to this question.
Response. As the title of the January 12, 1994 memorandum suggests, The Exer-
cise of Investigative Discretion (investigative discretion memorandum), EPA does
not engage in the exercise of prosecutorial discretion. That is the province of pros-
ecutors in the United States Department of Justice, including the Office of the
United States Attorney in each Federal judicial district. EPA does, however, exercise
its discretion by determining when to criminally investigate cases involving poten-
tial violations of Federal environmental laws. This is much the same as is the case
with other Federal law enforcement agencies, and is a reflection of, among other
things, the fact that enforcement resources are not unlimited and good management
dictates prioritizing the Agencys investigatory work.
In order to ensure the investigations undertaken by the Criminal Investigation
Division reflect an appropriate use of the Agencys authority, the Office of Criminal
Enforcement (the predecessor of the Office of Criminal Enforcement, Forensics and
Training) articulated the factors which govern its selection of cases to criminally in-
vestigate in the investigative discretion memorandum. That guidance remains the
touchstone for case initiation by the Criminal Investigation Division (CID).
At the risk of over-simplifying what is already a rather succinct six page guid-
ance, the CIDs investigative discretion policy may be briefly summarized as follows:
The criminal case selection process is guided by two general measuressignificant
environmental harm and culpable conduct. Criminal investigations may be initiated
for instances of actual harmdemonstrated by illegal discharge, release, or emis-
sionthat has identifiable and significant harmful impact on human health or the
environment, or instances where there is a threat of such impact. Criminal inves-
tigations may also be warranted when there is culpable conduct, as evidenced by:
(1) a history by the offender of violations, (2) deliberate misconduct resulting in a
violation, (3) a failure to report a discharge, release, or emission required to be re-
ported, or falsification of records within the Agencys jurisdiction, especially when
coupled with actual or threatened environmental harm, (4) tampering with moni-
toring or control equipment and (5) operation of a business without a required per-
mit or other necessary documentation.
As noted in the policy, this is not to suggest that all cases meeting the case selec-
tion criteria will proceed to prosecution. Indeed, the exercise of investigative discre-
tion must be clearly distinguished from the exercise of prosecutorial discretion. The
employment of EPAs investigative discretion to dedicate its investigative authority
is, however, a critical precursor to the prosecutorial discretion later exercised by the
Department of Justice. The Agency continues to operate on the general principle
that less flagrant violations with lesser environmental consequences should be ad-
dressed through administrative or civil monetary penalties and remedial orders,
while the most serious environmental violations ought to be investigated criminally.
Question 16. Can you describe the recent cases that EPA and DOJ successfully
prosecuted against Colonial Pipeline and Olympic Pipeline Companies including a
description of the environmental damage and the penalties paid?
Response. U.S. v. Colonial Pipeline Company (D.S.C. 1999).Colonial Pipeline
Company (Colonial) of Atlanta, Georgia, operator of the largest-volume pipeline car-
rying refined petroleum products in the world, pled guilty to criminal charges in
connection with a spill of almost one million gallons of oil into the Reedy River in
South Carolina. Colonial was ordered to pay a fine of $7 million and serve a 5-year
term of probation.
Colonial is owned by several of the worlds largest oil companies. Colonial pled
guilty on February 25, 1999, to a misdemeanor charge of violating the Clean Water
Act, 33 U.S.C. 1319(c)(1)(A), when it failed to exercise reasonable care leading to
the rupture of its pipeline where it crosses the Reedy River near Simpsonville,
South Carolina. Among other things, Colonial: (1) failed to properly train its employ-
ees who worked on pipeline, (2) failed to conduct required pipeline tests, or con-
ducted them but disregarded or improperly interpreted the results, and (3) dis-
regarded the advice of its own engineers regarding the appropriate throughput of
the pipeline that ruptured.
Colonial acknowledged that its actions led to spill of about 960,000 gallons of die-
sel fuel, affecting a 23-mile segment of the Reedy River. The spill killed about
35,000 fish and also affected wildlife such as beaver, muskrat and turtles, which
died as a result of direct contact with the spilled oil.
During the 5-year term of probation, Colonial must develop and implement an ex-
tensive environmental compliance program to prevent and detect further violations
of the CWA on the entire pipelineover 5,500miles that runs from Houston,
Texas, to Linden, New Jersey. The court also required the company to make presen-
73
tations to national pipeline associations regarding the obligations such pipelines
have under the CWA.
On April 1, 2003, in a related matter, EPA and DOJ settled a civil case in signifi-
cant part concerning the aforementioned Reedy River spill and six others, with Colo-
nial. Under the civil agreement, Colonial will upgrade environmental protection on
the pipeline at an estimated cost of at least $30 million, and pay $34 million, the
largest civil penalty a company has paid in EPA history. The $34 million civil pen-
alty will go to the United States Oil Spill Liability Trust Fund, which underwrites
nationwide oil spill cleanup activities. The government found Colonial violated the
CWA on seven recent occasions by spilling 1.45 millions gallons of oil from its 5,500
mile pipeline in five States and the companys pipeline corrosion, mechanical dam-
age, excavation damage, operator error and other operation and maintenance defi-
ciencies resulted in chronic releases from the pipeline over decades.
The civil settlement required Colonial to designate its entire pipeline as poten-
tially affecting high consequence areas, subjecting the entire 5,500-mile pipeline
to the pipeline integrity regulations of the U.S. Department of Transportations Of-
fice of Pipeline Safety (OPS). Moreover, the settlement requires Colonial to follow
enhanced inspection, repair and maintenance procedures beyond those required by
Federal regulations, and to pay for an independent monitoring contractor, approved
by EPA, to ensure that the company incorporates these requirements into its exist-
ing programs.
U.S. v. Olympic Pipeline Company (W.D. Wash. 2003)
On June 18, 2003, the Olympic Pipeline Company (Olympic), the Equilon Pipe-
line Company LLC (Equilon), former Olympic Manager, Frank Hopf, Jr., Olympic
Supervisor of Product Movement, Ronald Dean Brentson, and Olympic Control Op-
erator, Kevin Scott Dyvig were sentenced for criminal violations arising from rup-
ture of the Olympic petroleum pipeline and subsequent gasoline explosion in Bel-
lingham, Washington on June 10, 1999. The rupture resulted in the release of ap-
proximately 236,000 gallons of gasoline into nearby Hannah Creek and Whatcom
Creek, where the gasoline ignited leading to the deaths three individuals and caus-
ing extensive damage to the waters, shorelines and other natural resources.
Specifically, two 10-year-old boys died as a result of the burns they sustained from
the fire. An 18-year-old was overcome by fumes, drowned and then burned. The fire
resulting from the release of gasoline destroyed all living organisms in over 112
miles of a salmon spawning stream in a city park. The trees and vegetation sur-
rounding the creek were also destroyed. Over $26 million needed to be spent to ad-
dress this damage and to remove the gasoline that had soaked into the soils in this
area as a result of the spill. There was also damage to the city of Bellingham water
supply system and a house was destroyed.
On September 13, 2001, the Federal grand jury in Seattle indicted Olympic,
Equilon, Hopf, Jr., Brentson, and Dyvig on misdemeanor negligence charges under
the Clean Water Act and various charges under the Federal Hazardous Liquid Pipe-
line Safety Act.
Olympic pleaded guilty to three criminal counts, specifically: (1) knowingly and
willfully violating a regulation under the Hazardous Liquid Pipeline Safety Act, set-
ting forth minimum safety standards for interstate pipelines carrying hazardous liq-
uids relating to training of its operating personnel, a felony; (2) negligently causing
the discharge of a harmful quantity of gasoline into a navigable water of the United
States in violation of the Clean Water Act; and (3) unlawfully discharging refuse
matter into a navigable water and tributary of a navigable water of the United
States without a permit, in violation of Rivers and Harbors Act, a misdemeanor.
In accordance with Olympics plea agreement, the court sentenced Olympic to: (1)
a criminal fine of $6 million, (2) an additional civil penalty of $5 million to resolve
pending State and Federal civil proceedings, (3) 5 years of corporate probation, and
(4) comply with the terms and conditions of a consent decree and an injunctive relief
program in the Federal civil enforcement case. The injunctive relief program re-
quired that Olympic undertake specific inspection and damage prevention measures
on Olympics 400 miles of petroleum pipeline in Washington State. The United
States estimated that this injunctive relief program would require over $15 million
in new spending by Olympic, over $5 million of which was not otherwise required
by any regulation.
Equilon, through the Shell Pipeline Company LP (Shell), Equilons successor-in-
interest, pleaded nolo contendere to two criminal counts, specifically: (1) knowingly
and willfully violating a regulation under the Hazardous Liquid Pipeline Safety Act,
setting forth minimum safety standards for interstate pipelines carrying hazardous
liquids relating to training of its operating personnel, a felony and (2) negligently
causing the discharge of a harmful quantity of gasoline into a navigable water, a
misdemeanor. The nolo, or no contest, plea has the same effect as a guilty plea
74
in the criminal case in which it is entered, although it is generally not admissible
in subsequent civil litigation.
In accordance with Equilons plea agreement the court sentenced Equilon to: (1)
a criminal fine of $15 million (with up to $5 million of the criminal fine being ap-
plied to United States approved community service projects in the Bellingham
area), (2) a civil penalty of $10 million to resolve pending State and Federal civil
proceedings, (3) 5 years of corporate probation and (4) comply with the terms and
conditions of a consent decree and pipeline integrity/spill mitigation program en-
tered in the Federal civil enforcement case. The pipeline integrity/spill mitigation
program required that Shell undertake specific inspection and damage prevention
measures on 2100-plus miles of Shells petroleum products pipelines throughout the
United States. The United States estimated that this pipeline integrity/spill mitiga-
tion program would mandate over $61 million in new spending by Shell, more than
$40 million of which was not otherwise required by any regulation.
Hopf was ordered to serve 6 months in prison, followed by 3 years of supervised
release. He also was ordered to pay a fine of $1,000, and to perform 200 hours of
community service. Hopf had pleaded guilty to knowingly and willfully violating a
regulation under the Hazardous Liquid Pipeline Safety Act, setting forth minimum
safety standards for interstate pipelines carrying hazardous liquids relating to train-
ing Olympics operating personnel.
Brentson, was ordered to serve 30 days in prison, 30 days of home detention with
electronic monitoring, and 2 years of supervised release. He also was ordered to pay
a fine of $1,000, and to perform 150 hours of community service. Brentson had
pleaded guilty to the same charge as Hopf.
Dyvig, was placed on probation for 1 year, and ordered to perform 100 hours of
community service. Dyvig had pleaded guilty to negligently causing the discharge
of a harmful quantity of gasoline into a navigable water.
Question 17. EPA has postponed a rule regarding sanitary sewer overflows that
is based on consensus recommendations of a Federal advisory committee. The pro-
posed rule would, among other things, require sewer operators to monitor for sewer
overflows and notify public health authorities and the general public of overflows
that could make people sick. Beachgoers across the country would benefit from early
detection and minimization of overflows and from having the beach closed before the
sewage reaches the beach, not after it is already in the water and they are (literally)
swimming in it. Although some portions of the rule no longer have the support of
the sewer operators, the monitoring, reporting, and public notification provisions are
not opposed by any of the stakeholders. Will you commit to moving those provisions
separately in a rulemaking so as to provide immediate protection to the American
public while the other portions of the rule are debated?
Response. SSOs are covered by the Clean Water Act and are generally prohibited
as unpermitted discharges. We are evaluating options for proceeding with improve-
ments to NPDES permit requirements for SSOs and municipal sanitary sewer col-
lection systems. The Agency received extensive comments and suggestions in re-
sponse to its January 2001 draft proposed regulations. We are reviewing those com-
ments, as well as the data we have collected to prepare a Report to Congress on
the impacts and control of CSOs and SSOs, in order to determine the best way to
address this environmental issue. We have also met extensively with our stake-
holders on this issue. Based on the information collected, we will consider a range
of options to address SSOs, including rulemaking. In the meantime, EPA and States
are continuing to address SSO problems with compliance assistance and enforce-
ment in accordance with the EPAs April 27, 2000, Compliance and Enforcement
Strategy Addressing Combined Sewer Overflows and Sanitary Sewer Overflows.
Question 18. EPA is moving forward a new policy that would allow sewer opera-
tors to divert sewage around (bypass) secondary treatment units when it is raining.
Will you commit to studying the public health impacts of this proposed policy
change before moving it forward?
Response. EPA is evaluating the applicability of the bypass provision at 40 CFR
122.41(m) to diversions of a portion of peak wet weather flow at POTWs. We are
requesting public comment on a proposed policy which was published in the Federal
Register on November 7, 2003. The framework of the draft policy is described in
question 12 of this response. EPA intends that the permit framework described by
its policy should ensure that permittees develop information to assess potential
water quality impacts associated with blended effluent.
75
RESPONSES BY TRACY MEHAN TO ADDITIONAL QUESTIONS FROM SENATOR WYDEN
Question 1(a). There are 15 communities in Region 10 that have combined sewers.
Knowing that all the communities in Oregon have enforceable orders with the State
to control combined sewer overflows (CSOs), why was the city of Portland targeted
for investigation?
(b) The U.S. Environmental Protection Agency (EPA) received copies of the agree-
ments entered into between the City and the State of Oregon back in 1991 and
again when the agreement was amended in 1994. EPA began looking into Portlands
efforts in February 2001, 10 years after the City had first signed an enforceable
order with the Oregon Department of Environmental Quality. Why did the agency
wait for 10 years to ask questions about the city of Portlands program?
(c) The city of Portland is more than halfway toward meeting its goal of a 96 per-
cent reduction in combined sewer overflow volumes. This is a more stringent reduc-
tion level than many communities around the country are committed to achieve, and
more stringent than EPA guidance. Why would EPA spend scarce resources to pur-
sue a community already on schedule to go beyond what EPA has approved else-
where?
(d) The city of Portland has spent over $100,000 in expenses and staff time to re-
spond to your requests for information, visits, tours, and meetings. How much
money has EPA spent on staff time, travel and the use of consultants to undertake
this two and a half year effort?
(e) The July 7, 2003 letter from Department of Justice claims EPA finds the City
to have violated the Clean Water Act because they have had hundreds of CSO
events during the past 5 years. How is it possible given that the order signed by
the State and the City expressly contemplates CSOs will continue until the abate-
ment program is completed in 2011? Does this mean that the Federal Government
does not recognize the CSO abatement orders issued by the State of Oregon?
(f) The July 7, 2003 letter discusses the need for the Federal Government to col-
lect penalties from the City. The Portland community has already spent over
$500,000,000 of local ratepayer money since 1991 to attack the CSO problem. They
will undoubtedly spend at least that much during the next 8 years to finish the job
they have already begun. What purpose would a financial penalty serve? What is
the economic benefit the City has enjoyed during the past 10 years when sewer
rates have tripled to address the very problems all of us are interested in solving?
(g) In order to evaluate EPAs actions in connection with the city of Portlands
Combined Sewer Overflow program, I am requesting the following documents con-
cerning this matter:
All correspondence, including electronic mail, regarding the Environmental Pro-
tection Agencys and your consultants 20012003 inquiry into the city of Portlands
Bureau of Environmental Services operation of its wastewater treatment and collec-
tion system; compliance with the Combined Sewer Overflow and Separate Sewer
Overflow provisions of the Citys National Pollution Discharge Elimination System
(NPDES) permits (Columbia Boulevard and Tryon Creek Wastewater Treatment
Plants); and compliance with Department of Environmental Quality (DEQ) Amend-
ed Stipulation and Final Order, No. WQNWR9175, dated August 11, 1994 re-
garding the city of Portlands combined sewer system.
All notes, summaries, communications, meeting schedules, requests for informa-
tion and documents regarding Portlands compliance with requirements for com-
bined sewer overflow control.
All correspondence, guidance, initiatives, memoranda, enforcement initiatives or
other materials related to EPAs request of the city of Portland for information re-
garding operation of wastewater treatment and collection systems and compliance
with the Combined Sewer Overflow and Separate Sewer Overflow provisions of
NPDES permits, within the past 3 years.
All correspondence, including electronic mail, guidance, initiative, memoranda,
and documents or other materials relating to national, regional or local policies re-
garding the administration of the Underground Injection Control (UIC) program
within the State of Oregon within the past 3 years. Underground Injection Control
(UIC) program within the State of Oregon within the past 3 years.
Response. For EPAs responses to the questions from Senator Wyden requesting
information and documents on the U.S. Environmental Protection Agencys inves-
tigation of the city of Portlands sewer collections system, please see the attached
letter, dated October 14, 2003, from Acting Administrator Horinko to Senator
Wyden.
76
U.S. ENVIRONMENTAL PROTECTION AGENCY,
Washington, DC, October 14, 2003.
Hon. RON WYDEN,
U.S. Senate,
Washington, DC.
DEAR SENATOR WYDEN: Thank you for your letters of August 6 and August 28,
2003, requesting information and documents on the United States Environmental
Protection Agencys (EPAs) investigation of the City of Portlands sewer collection
system. I share your concern on this very important matter, and I remain hopeful
that we can work cooperatively with the City and the State to resolve this matter
expeditiously.
As noted in your letter, you have asked several questions regarding Federal in-
volvement in this matter. Although we agree that Federal environmental programs
are often best administered at the State and local level, EPA retains the authority
and responsibility to assure consistent implementation of Federal laws nationally.
EPA continues to exercise that authority judiciously.
With regards to the City of Portland, EPA is attempting to address significant en-
vironmental problems resulting from continuing and new violations of the Clean
Water Act (CWA) and Safe Drinking Water Act. While EPA recognizes that the City
has entered into earlier agreements with the State of Oregon, it is important to note
that it appears the City of Portland continues to experience illegal CSO discharges,
even in areas where construction work on CSO controls has been completed. The
City has also experienced many significant sewage releases that are not CSOs and
not addressed in the prior state agreements. Finally, EPA is concerned that the City
uses over 9,000 underground injection wells as part of its overall storm water man-
agement program and that some of those wells may violate the Safe Drinking Water
Act. EPA hopes to work with the City of Portland to address any risks posed by
the use of these underground injection wells.
In addition to the foregoing, EPA is concerned that the City of Portland may have
committed numerous violations of the Clean Water Act and Safe Drinking Water
Act that were not addressed by the earlier state settlements. EPAs review of these
instances indicates that these violations may include the failure to control the dis-
charge of solid and floatable materials from the CSO outfalls, the uncontrolled over-
flows of raw sewage from manholes, cracked pipes, and elsewhere in the collection
system that have flowed into public streets, private yards, and surface waters, and
the placement of storm water injection wells within 500 feet of domestic water sup-
ply wells, which poses a potential health threat to those using the wells.
This final point is a key one. The City relies heavily on underground injection
wells for storm water control. While many of these 9,000 wells may be found to be
an appropriate part of the Citys overall storm water management program, they
have not been permitted or authorized by any entity as required by the Safe Drink-
ing Water Act, and little information is available as to whether storm water injec-
tion in the Portland area is safe and adequately protective of the local aquifer,
which is an underground source of drinking water. EPA hopes to work with the City
to resolve these issues as quickly as possible.
EPA does recognize that the timing of our investigation is unfortunate, and we
acknowledge the City and States previous commitments to address Portlands sew-
age problems. We hope that our current investigation will not unduly interfere with
the Citys ongoing efforts, and we remain committed to working with City and State
officials as we progress forward.
Finally, your letters also requested copies of documents concerning EPAs inquiry
into the City of Portlands CSO program. We are working with your staff to identify
which of the documents that are not enforcement sensitive or confidential would be
most helpful to you. As I am sure you can appreciate, it would be inappropriate to
release enforcement sensitive and confidential documents at this time, given the on-
going nature of EPAs investigation and settlement negotiations with the City of
Portland.
Again, thank you for your letter and support of EPAs enforcement and compli-
ance assurance program. Should you have any further questions or concerns, please
contact James McDonald in EPAs Office of Congressional and Intergovernmental
Relations at (202) 564-9942.
Sincerely yours,
MARIANNE L. HORINKO,
Acting Administrator.
77
STATEMENT OF DAVID MABE, ADMINISTRATOR, IDAHO WATER QUALITY PROGRAMS,
STATE OF IDAHO, IDAHO DEPARTMENT OF ENVIRONMENTAL QUALITY
Mr. Chairman and Members of the Committee: My name is David Mabe and I
am the Administrator of Water Quality Programs at the Idaho Department of Envi-
ronmental Quality in Boise, Idaho. I bring greetings to you, Mr. Chairman, from
Governor Kempthorne and Director, Steve Allred.
I am testifying to share with you the perspectives of Idaho regarding the chal-
lenges that we face implementing the Clean Water Act and the need for regulatory
or statutory changes to the program.
STATUS OF OUR PROGRAM
As background for what I am about to present, I would like to give a very brief
overview of the status of Idahos water quality program. We have completed four
hundred eighty four TMDLs (Total Maximum Daily Loads) primarily involving sedi-
ment, nutrients and temperature; but we have also written TMDLs for metals, oil
and grease, and other pollutants.
Next month we will submit to the Environmental Protection Agency (EPA) a re-
vised 303(d) list done in the integrated report form. It is set up in accordance with
the EPAs new guidance regarding a five-part list. The call for data, public comment
and review was accomplished electronically. Our 305(b) report was submitted in
electronic format.
Our monitoring program is designed to cover the state in a 5-year period using
a probabilistic approach. This involves development of a random list of sites, and
then refines the areas based on each years monitoring results until we are focused
in the areas having the highest chance of impairment in the fifth year to do more
detailed monitoring. Other types of monitoring are done to assess progress in im-
paired waters, effectiveness of Best Management Practices, or to determine progress
of TMDLs in improving water quality.
We are making the Clean Water Act TMDL process work in Idaho, but I believe
that there are some fairly simple changes to be made that will lower costs of compli-
ance for all parties involved, make more sense on the ground, and provide better
environmental protection.
SUGGESTED CHANGES TO THE LISTING AND DE-LISTING PROCESS
The water quality reporting/listing process under section 303(d) for impaired wa-
ters and under 305(b) for all waters needs to occur on a longer schedule. I suggest
a 5-year timeframe for mandatory reporting using an integrated reporting format.
It is very difficult and expensive to do meaningful reporting with public involvement
on a shorter timeframe. Simply put, we do not have the budget to accomplish a
statewide monitoring program on a timeframe less than 5 years. In addition, many
of the improvements in impaired waters will not be apparent in 2 years. To report
on a shorter timeframe is not meaningful. For example, using a 2-year reporting
schedule Idaho would show very little change in the first two reporting periods (the
first four yeas), then the meaningful information we complete in year five would be
delayed until the third reporting period (year six) before it becomes public. Valuable
staff time and resources are diverted to make two reports in which we have little
to say and the public begins to pay less attention to our reporting.
In recent rulemaking and guidance efforts, the EPA has supported a very impor-
tant concept in differentiating between pollutants and pollution. This allowed cre-
ation of a section of the 303(d) list where the waters are not fully supporting the
uses, but a TMDL will not fix the problem. Issues like water diversion are identified
in the new format, but there is not an expectation that a TMDL will fix an under-
lying problem that is not water quality based. The new format does allow other
agencies, the Idaho Department of Water Resources using the water diversion exam-
ple, to be put on notice that there is a problem.
SUGGESTED CHANGES TO THE TMDL PROCESS
Another concept that is very important is to allow more flexibility in how pollut-
ant loads are allocated. The current rules envision that loads will be allocated on
a daily basis to attain numeric goals. Unfortunately, the real world does not func-
tion in this simple fashion. The vast majority of Idahos TMDLs are to correct prob-
lems caused by nutrients or sediments that violate narrative standards. These pol-
lutants are frequently not loaded on a daily basis. Often the majority of the loading
occurs in only a few days of runoff over the course of the entire year. A very impor-
tant concept that has been discussed in recent EPA rulemakings is to allow addi-
tional flexibility in pollutant loading and recognize that daily numeric loads will not
78
work in all cases. A TMDL needs to become a Pollutant Control Plan (PCP) with
the flexibility to allow for numeric allocations for those pollutants where this situa-
tion fits, or to allow for a problem assessment and identification of specific water
quality goals to be achieved when a daily load does not fit. Trying to describe and
quantify what needs to happen is desirable, trying to allocate loads daily between
sources for some pollutants, is not possible.
Finally, the approval process we go through for our water quality reports, our
standards, and our TMDLs desperately needs to be revisited. The Clean Water Act
requires that each of these actions be approved by EPA within a 30 or 60 day time-
frame. If they do not act, they are subject to legal action. The fact that they must
take affirmative action also makes each of these actions subject to consultation. This
system creates a tremendous workload for all parties involved. It favors those who
wish to litigate, and it creates a situation where different standards may be in place
at the state and Federal level simultaneously. I believe the solution is simple,
change the requirement for the Federal agencies to affirmatively approve each plan,
standard or water quality report to a system where they have discretion to reject
items they do not believe meet the goals of the Clean Water Act.
This change will place the burden of defending a work product on the agency that
created it. It will limit the number of venues where a challenge can be made. Cur-
rently, a challenge that we were overly protective is made in state court against the
state, and a challenge that we were under protective is made in Federal court
against EPA. This causes both agencies to create separate administrative records
to defend the same work product and if NOAA Fisheries or Fish and Wildlife Serv-
ice are involved there can be as many as four separate administrative records cre-
ated. This will result in less duplication between agencies and allow each agency
to focus on their priorities rather than try to be a generalist defending everything.
SUPPORT FOR POLLUTANT TRADING
Idaho has two watersheds set up to pursue pollutant trading. The first is the
Lower Boise River Drainage, the most populous area of our state. The second is in
the Mid Snake River, which supports a very large aquaculture industry. In both
areas we have designed programs in conjunction with active watershed advisory
groups over a multiyear period that should result in dynamic trading for nutrients.
In order to begin in the Mid Snake River we need the final NPDES permit language
from EPA Region 10 for issuing NPDES permits in the state of Idaho. In the Lower
Boise River, the state has just finished the final nutrient allocation for Hells Canyon
TMDL, which now must be translated into waste load allocation in the lower Boise
Watershed. I have trading partners waiting to begin in both cases. EPA has been
an excellent partner in establishing both of these trading areas.
Thank you, Mr. Chairman and Members of the Committee, for this opportunity
to comment on this important issue to Idaho and all of the stakeholders partici-
pating in Idahos TMDL process.
RESPONSES OF DAVID MABE TO ADDITIONAL QUESTIONS FROM SENATOR INHOFE

Question 1. Do you believe the current TMDL regulations are clear enough to pro-
tect states from unnecessary lawsuits? In not, what are the most important issues
a new rule should address to assure a workable, legally defensible program?
Response. The 40 plus legal challenges against EPA and states Nation wide in
the last 6 years are evidence that the rules need clarification. I believe the following
changes would improve the TMDL program and help focus resources on water qual-
ity problems rather than legal and administrative actions.
Extend listing cycle to 4 or 5 years
Incorporation of the current 5 part Integrated Report listing process
Clearly separating 303(d) requirements for TMDLs from 303(e) for implementa-
tion plans via the continuing planning process.
Question 2. Identification and listing of impaired waters under Section 303(d) of
the Clean Water Act continues to be a source of controversy between EPA and the
states, even after the issuance of listing guidance. Can you explain, from a state
perspective, the source of the problem and what might be done to resolve it?
Response. The 2002 and 2004 listing guidance has helped overcome some of the
problems that plague section 303(d) of the Clean WaterAct. To help minimize future
litigation it would be helpful to put the provisions of this guidance into rule. Many
of the unanswered questions that remain are really policy level or even philo-
sophical questions about how to interpret the clean water act or a states water
quality standards.
79
I believe there is still a fair amount of debate about the purpose of section 303(d)
of the Clean Water Act. Is it a stream list from which water quality plans are devel-
oped, or is it a tool to stop new or modified activities from occurring until it is dem-
onstrated that there will be no impact to water quality. Obviously, the environ-
mental groups and industries view these two potential interpretations very dif-
ferently. Another example is which type error should be made when making listing
decisions. Some parties support a high probability that any impaired water be listed
(resulting in many streams being listed that are not impaired), while others are
more concerned that the streams on the list be impaired (resulting in some impaired
streams not being listed).
Another issue that frequently causes controversy is the interpretation of an indi-
vidual state water quality standard. Across the United States there is a tremendous
variability in climate, vegetation, soils and human activities. This interacts to create
different and varying water quality conditions and stream potential. The National
Research Council (200) report to Congress describes this. Additionally, there is a
great deal of variability in the methods used to assess water quality and describe
the beneficial uses that are being protected in the various states. EPA is left in the
position of trying to compare and approve each states impaired waters list and cre-
ate a record supporting their decision that will stand up to litigation. In reality, the
states are really the only ones in a position to make these calls and Federal ap-
proval process creates a great deal of controversy.
Question 3. Does Idaho currently, include on its 303(d) list those waters that meet
some standards but for which there is inadequate data for other uses? What about
those waters that meet all standards but not through best practical technology or
secondary treatment? Should these waters be listed?
Response. Idaho uses the new integrated report format so we have a specific cat-
egory that identifies all waters that do not have adequate data to make a call. This
is Part 3 of the report and a schedule should be developed to monitor these waters.
I would be opposed to putting them on the 303(d) (part 5 of the integrated report)
for 2 reasons. It causes the list to grow substantially and in Idaho we would then
be reviewing new or modified activities to assure that they met a no net increase
standard. This can be a substantial workload in areas where water quality is really
not a problemlack of information is. The second reason is that delisting a stream
is really difficult. It viewed suspiciously by environmental groups and EPAthey
almost always oppose it and the amount of data it can take to delist a stream can
be substantial.
Using the integrated report also allows us to put streams fully supporting all of
the uses that have been evaluated into part 2. This is where most Idaho streams
will probably go that are outside of wilderness boundaries because we have not fig-
ured our how to determine is a stream is fully supporting the aesthetics one of
our more subjective beneficial uses. So if we listed all streams for which there was
insufficient data for a usewe would probably be forced to list all streams outside
wilderness boundaries.
If point sources are not using best available technology and the data indicates
that water quality is fine, the stream should not be listed. This is simply a matter
where the technology required should be updated in the next NPDES permit cycle
(within 5 years) unless other variances or exemptions apply.
STATEMENT OF JULI BETH HOOVER, AICP, CITY OF SOUTH BURLINGTON, VT

I am testifying on behalf of the city of South Burlington, Vermont, where I serve
as Director of Planning and Zoning, and also our eight fellow towns who are subject
to EPAs Phase II NPDES stormwater regulations. My testimony concerns our expe-
rience with the Phase II program, some creative ways we have found to meet the
Phase II requirements, and also our expanding, highly successful program of decen-
tralized stormwater management projects that are showing great promise as a cost-
effective way to meet local economic and environmental needs.
South Burlington and our fellow towns comprise the urban core of Vermont. We
are all located within the Greater Burlington area of Chittenden County, which with
its 150,000 residents is home to one-quarter of Vermonts population and most of
its major employers. Where water and the economy are concerned, most of what
happens in Chittenden County relates to Lake Champlain. The Lake is our drinking
water source, a major driver of Northwest Vermonts tourism economy, and a local
and national treasure. It is also the endpoint for nine urban streams that drain
most of the Countys urbanized area, Seven of these are on the States 303(d) list
of waters impaired by urban stormwater runoff. Stormwater is a major environ-
mental concern in Vermont; some of our beaches are plagued by bacterial-related
80
closings, and we continue to work to reduce phosphorus loading into our beautiful
lake.
When we first began learning about the Phase II program, we said Ugh. More
requirements, more paperwork, more expense. Our experience with the program to
date, 6 months after receiving authorization under the program, has been much bet-
ter than anticipated for two principal reasons.
First, the Phase II stormwater management plan development has led to a thor-
ough accounting of just what the towns spend on stormwater to begin with: in other
words, what are all of the things we do and expenses we incur because it rains, and
because snow melts? The answer is anything spent or done on flood control, catch
basin cleaning, culvert replacement, maintaining beaches and streamside recreation
areas, or ensuring that commercial sites are properly managed becomes part of each
towns Phase II Stormwater Management Plan. In short, the Stormwater Manage-
ment Plans have become a sort of gap-in-services analysis pointing out what our
stormwater actions and budgets really are, what holes there may be, and how to
pull together new and particularly existing resources to cover those gaps.
Second, the Chittenden County towns developed a creative and cost-effective way
to meet the public education and public outreach minimum control measures. It was
apparent early in the Phase II process that the collective public education skill level
of our group of engineering, public works, wastewater and planning geeks was abso-
lutely zero. Concerned that we were going to be compelled to spend staff time and
funds on ineffective and boring brochures, we did something different. Eight towns,
the Burlington Airport and the University of Vermont hired a local marketing firm
to develop a professional, highly visible public education campaign to meet the
Phase II requirements for all of these permittees. Instead of boring brochures and
wasted staff time, we will have a professional public education campaign on how
citizens can keep the Lake clean. This approach, which will cost 33 cents per county
resident per year, has had an enormous impact in King County, Washington and
Prince Georges County, Maryland and we believe it will work in Chittenden Coun-
ty, too.
It is South Burlingtons direct experience, and my testimony, that given the level
of effort, staff time, and resources being spent to meet the GASP34 accounting
standards for fixed-asset inventory, the fractional share of time and resources we
are spending to meet the Phase II regulations is a far more useful, cost-effective,
and publicly beneficial program. The asset inventory doesnt prevent beach closings
and higher water filtration costs; having the authority to implement Phase II will
help us do just that.
In Chittenden County, we estimate our communities will spend between $20,000
and $200,000 apiece per year on new expenditures related to Phase IIincluding
the cooperative public education program whichis a per capita expenditure of be-
tween $4 and $12 per year. In a recreation-based economy, and in a place where
the Champlain Water District will charge us to remove from the Lake whatever pol-
lutants we put into it, we are confident that this is money well spent.
The second, and very exciting, initiative for which I would ask your support, is
the our effort to use decentralized or distributed stormwater systems to prevent pol-
lution and support business development. In 2000, a very creative Vermont Environ-
mental Conservation employee noticed three things on a piece of land in South Bur-
lington: a brook polluted with petroleum hydrocarbons, sediment and phosphorus
from stormwater runoff in our auto alley and which drained, of course, directly
to Lake Champlain; a Chevy dealership that needed more stormwater capacity to
expand its business; and a totally unused piece of land behind the Chevy dealer that
was part of a railroad right-of-way.
With $300,000 from 13 separate grant sources, the cooperation of the Chevy deal-
er, and a lot of head-scratching by some very talented people, the city of South Bur-
lington built the Bartlett Brook Stormwater Treatment Facility. This four-acre sys-
tem does three things: It allowed Bill Shearer to expand his business; has now been
shown through scientific monitoring to be removing toxic pollutants and nutrients
from Bartlett Brook that otherwise would be dumped in the lake; and it made use
of a piece of undevelopable land to serve the environment and the economy in an
incredibly cost-effective and attractive way.
This approach works. Distributed stormwater treatment systems using con-
structed wetlands or micropool extended detention, can make use of under-utilized
and un-developable land to create capacity for new development and cleanup even
the most difficult stormwater runoff pollution problems. They can compliment CSO
and other structural treatment systems, or in some cases, substitute for them en-
tirely. Within Chittenden County we have plans on the board for a half-dozen more
of these systems, all using land such as highway rights-of-way where no one wants
81
to build, but where we have tremendous potential to improve water quality and cre-
ate development capacity where stormwater storage and treatment is an issue.
In Chittenden County, we have planned this type of distributed treatment system
in two transportation-related locations here in South Burlington where commercial
properties need storage and treatment area, and we can provide that in otherwise
useless cloverleafs and on-ramp lands. From a cost standpoint, these systems typi-
cally cost between $300,000 and $800,000 to build. When existing public lands, such
as railroad or interstate rights-of-way can be used, the cost drops accordingly.
Burlington is proposing a wetland system just upstream of Oakledge Beach, a
beautiful beach that is plagued by closures after rain events due to urban runoff
from Engelsby Brook. A constructed wetland system similar to Bartlett Brook is pro-
posed just a quarter-mile upstream to remove bacteria, toxics and sediment. The
cost is close to $1 million and again, must be funded through multiple grant sources
when it should be funded as a matter of good basic water quality infrastructure.
South Burlington is proposing two similar systems to be funded through an EPA
STAG grant and the EPA Decentralized Water Resources Demonstration Grant,
with costs of $300,000 for one that treats runoff from our downtown in land down
below an Interstate on-ramp, and $800,000 for a system treating runoff from state
and Federal highways, three shopping centers, and a residential neighborhood just
a half-mile upstream of Lake Champlain, and South Burlingtons beautiful Red
Rocks park and beach.
I would ask Congresss support for this distributed approach through more aggres-
sive funding for and directives to the SRF program to make use of these funds for
distributed and non-structural stormwater treatment. Last year, Congress directed
the use of $75 million of the over $1 billion in Federal funds for the SRF for distrib-
uted, non-traditional and soft path techniques such as these. We would greatly im-
prove public use of funds to spend a larger share of our traditional clean water
funds on cheap, effective, distributed stormwater strategies instead of forcing munic-
ipal staff to chase down and administer 13 grants for such a valuable approach.
DISTRIBUTED/DECENTRALIZED STORMWATER TREATMENT SYSTEMS FOR URBAN

STORMWATER MANAGEMENT IN CHITTENDEN COUNTY, VT
BARTLETT BROOK STORMWATER TREATMENT SYSTEM, CITY OF SOUTH BURLINGTON

The Bartlett Brook Stormwater Treatment System in South Burlington, Vermont
is a state-of-the-art constructed wetland system. It illustrates the many advantages
of distributed stormwater management, also known as decentralized or soft path
systems. These utilize land-based treatment of stormwater to clean pollutants from
runoff before the runoff enters streams and lakes.
82
Stormwater runoff from the auto-related businesses on U.S. Route 7 is diverted

into a four-acre system of settling ponds and constructed wetlands prior to discharge
into Bartlett Brook and Lake Champlain.
83
The pond makes use of unused land in a railroad right-of-way, and created
enough stormwater capacity to allow expansion of Shearer Chevrolet. Monitoring
has shown the system effectively removes petroleum hydrocarbons, sediment, and
phosphorus from stormwater. The project cost $300,000 and was funded through 13
grants.
84
ENGELSBY BROOK CONSTRUCTED WETLAND TREATMENT, CITY OF BURLINGTON
The city of Burlington will build a constructed wetland similar to the Bartlett
Brook system on this land along Engelsby Brook, roughly 14 mile upstream from
Oakledge Park and Lake Champlain. This system includes a $60,000 EPA dem-
onstration grant and funding from the EPA Superfund settlement for the Pine
Street Barge Canal.
The constructed wetland will remove pollutants upstream of this stormwater out-
fall, which contributes to beach closures just downstream at the popular Oakledge
Park beach.
85
PLANNED MICROPOOL STORMWATER TREATMENT SYSTEMS, CITY OF BURLINGTON AND

CITY OF SOUTH BURLINGTON
South Burlington will be using the decentralized stormwater treatment approach

to treat runoff from its two major commercial centers. Unused, un-developable land
86
in highway rights-of-way will be used to install micropool extended detention sys-
tems.
This land along Shelburne Road will treat runoff from and enable redevelopment
of three major shopping centers in Burlington and South Burlington.
This interstate on-ramps right-of-way contains the outfalls for runoff from South
Burlingtons newly developing City Center area. A micropool system, estimated to
87
cost $300,000, will provide capacity for development and ensure that pollutants stay
out of Centennial Brook and Lake Champlain.
88
RESPONSES OF JULIE BETH HOOVER TO ADDITIONAL QUESTIONS FROM SENATOR
JEFFORDS
Question 1. Can you comment on the interaction between stormwater manage-
ment and the amount of water that arrives at a wastewater treatment plant during
a wet weather event?
Response. There is no question that the use of decentralized or distributed
stormwater treatment and storage systems can help alleviate wet-weather flows to
wastewater treatment plants. Infiltrating stormwater into the round, detaining it in
basins or storage tanks, or diverting it through land-based treatment systems prior
to discharge into a storm drainage system reduces the amount of water that must
go through a treatment plant, thereby reducing the potential for overflows. Using
distributed systems also reduces the impact of peak flows by detaining stormwater
and releasing it over time, rather than flooding the storm drainage system and
treatment plant all at once.
In addition to ameliorating the quantity of stormwater arriving at a treatment
plant, distributed treatment and storage also improves the quality of the
stormwater that must be treated. Techniques that detain stormwater result in
heavy particles settling out prior to discharge, keeping these pollutants out of the
wastewater treatment plant, and land-based treatment systems also remove volatile
organic compounds from stormwater. Treating stormwater through detention or
land-based treatment thus reduces the amount of treatment that must occur in a
plant, and reduces the pollutant load found in any overflows.
Question 2. In your experience, have structural or non-structural solutions to
storm water management problems been the most effective?
Response. Structural and non-structural techniques must be used together to cre-
ate the most effective stormwater management program. Just as a city needs devel-
oped areas and parks to create a healthy community, stormwater infrastructure
needs both structural and non-structural or land based components to maximize pol-
lution control and meet water quality goals.
Structural solutions, while very costly, are essential both in fostering urban devel-
opment and meeting water quality goals. They take very little land area and thus
facilitate compact land development patterns. Structural solutions may not, how-
ever, be necessary in very low-density areas, or in locations where stormwater treat-
ment can be accomplished through land-based treatment without compromising eco-
nomic and community development goals. In all cases, non-structural solutions
should be an essential complement to structural stormwater treatment. Land based
treatment, especially in stormwater pollution hot spots, is essential for improving
groundwater recharge, reducing peak flows, and especially for achieving better pol-
lutant removal.
But without even investing in land-based or structural treatment, non-structural
practices can have a substantial, positive impact on water quality. Practices such
as making landscaping more water-friendly, reducing the amount of pesticides,
herbicides and other chemicals used, and changing public behaviors on such issues
as car washing and pet waste, can further improve water quality without further
investment in structural or land-based treatment.
STATEMENT OF MICHAEL SAMOVISKI, CITY OF HAMILTON, OH, OFFICE OF THE CITY

MANAGER, DEPARTMENT OF PUBLIC WORKS
Mr. Chairman and Committee members, thank you for granting the City of Ham-
ilton this opportunity to testify before you today.
The City of Hamilton is located in the southwest portion of the State of Ohio and
has a population of somewhat more than 60,000 people. Hamilton operates a Pub-
licly Owned Treatment Works, including a Wastewater Treatment Plant and 212.7
miles of sanitary sewer lines. Hamilton also maintains a separate storm water col-
lection system consisting of 180.5 miles of storm sewer and 6,500 catch basins.
In 1999, the US EPA promulgated Phase II Storm Water Rules which require cov-
ered political jurisdictions to obtain a National Pollutant Discharge Elimination Sys-
temGeneral Storm Water Discharge Permit, which Hamilton received in April
2003. To obtain this Permit, Hamilton was first required to develop a Storm Water
Management Plan, which the City submitted to Ohio EPA in March 2003. This Plan
encompasses the 6 minimum controls mandated by the Phase II Rules.
Hamiltons City Council is seriously concerned about municipal implementation
and enforcement of this recently issued General Storm Water Discharge Permit, es-
pecially in light of our very challenging local and state economic climates. As the
City prepared its Storm Water Management Plan, it became apparent to City Coun-
89
cil that the costs associated with its implementation will have to be assumed by our
local government, or more likely by our citizens and businesses since surplus munic-
ipal moneys for this purpose are non-existent.
To pay for its Phase II Program, the City of Hamilton anticipates having to form
and implement a Storm Water Utility. Storm Water Utility charges will be based
upon the amount of impervious area on parcels of land. In this manner, each parcel
of land within the City of Hamilton would be assigned a fee determined by its runoff
characteristics.
According to the Ohio Supreme Court, storm water fees of this sort, since they
are utility charges, must be applied in an even and consistent manner without re-
gard to tax status or land use. This means that all residents, businesses, schools,
churches, governmental and institutional complexes, etc. will have to be subject to
these charges, without exception. Each residential unit would have to pay a flat
monthly charge; but, non-residential properties would pay a higher amount equiva-
lent to the relative expanse of impervious surfaces at their locations.
The City of Hamiltons projected annual expense attributable to having to comply
with the new Phase II Program is an additional $1.6 Million over the current
$800,000 that the City now spends on storm water activities. Since Phase II is a
federally unfunded mandate, the City of Hamilton expects to have to raise this rev-
enue by imposing a monthly fee of up to $5.50 on residential customers. Non-resi-
dential customers would be charged $5.50 multiplied by a factor which takes into
account the proportional increase of impervious area.
The following examples help to drive home our point: Hamiltons First Baptist
Church, with its associated parking area, was determined to have an impervious
factor of 68 times that of a single equivalent residential unit (ERU). As a result,
the Churchs projected Storm Water Utility charge is calculated to be $374 per
month ($5.50 multiplied by 68). Smart Paper Company, a manufacturer of high
quality papers, has an impervious factor of 912 ERUs, and its monthly charge
would be $5017. Hamilton High School has an impervious area equal to 243 ERUs;
its monthly charge would be $1338. The local airport in Hamilton has 584 ERUs
associated with its runways and other impervious areas which results in a $3215
monthly charge. Hamilton Scrap Processors, a privately owned recycler, with 88
ERUs would have to pay $484 monthly.
This federally unfunded mandate is being imposed upon local communities at a
time when our economies are stagnant, and our Nation is facing huge deficits as
forecast by public financial officers. The City of Hamilton is no exception: local budg-
et deficits are already predicted for 2004, and the states budget is in such distress
that no funding for cities and counties is available for Phase II compliance.
Now is not the time for distressed cities, such as the City of Hamilton, to have
to impose a new monthly Storm Water Utility charge across the community to
achieve Phase II compliance. When the local economy improves, Hamiltons busi-
nesses and citizens may be better able to absorb this type of fee. In our current flag-
ging economy, however, our local businesses cannot afford this additional expense.
Nor can our citizens who have very recently been called upon to take on more of
the municipal financial burden, specifically more of the public safety burden, by pay-
ing more in taxes for police and firefighter staffing at the local government level.
Please let me emphasize again that the time for implementation of this Phase II
Program is not now. Accordingly, the City of Hamilton respectfully asks that you,
as our elected Federal representatives in Washington, commence action before Con-
gress to enact a 5-year moratorium. This moratorium could postpone the unfunded
mandate to a time better suited for requiring communities, such as our distressed
City, to step forward and implement the Phase II Rules and to impose additional
financial burdens on both your and our constituents.
We ask this not because the City of Hamilton is seeking to avoid serving as a
good steward of its river and receiving waters, but because we are concerned public
officials seeking to strike a reasonable balance between the stark reality of our cur-
rent depressed local economy and continuing environmental improvement.
Thank you again for your attention and courtesy in allowing us to address this
Committee. We were honored to have received your invitation to appear before you
to present our concerns.
90
Storm Water Utility Projected Income Statement
City of Hamilton, Ohio
FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008
Estimated Annual Billing ERUs 37,430 37,430 37,430 37,430 37,430 37,430
Annual Utility Fee ($/ERU/mo) $5.50 $5.50 $5.50 $5.50 $5.50 $5.50
Program Expenses:
Regulatory Compliance ............... $5,000 $100,000 $100,000 $100,000 $100,000 $100,000
Operation & Maintenance-Leaf
Collection & Street Sweeping $595,000 $610,000 $630,000 $650,000 $670,000 $690,000
Operation & Maintenance-Col-
lection System ........................ $150,000 $802,000 $826,000 $851,000 $877,000 $903,000
Planning and Management ........ .................... $170,000 $170,000 $170,000 $170,000 $170,000
Capital Projects-Engineering
Studies ................................... .................... $300,000 $300,000 $300,000 .................... ....................
Capital Projects-As Needed Sys-
tem Repair Replacement ....... $236,000 250,000 $260,000 $270,000 $280,000 $290,000
Capital Projects-Engineering
Projects .................................. .................... $305,000 .................... .................... $500,000 $500,000
Total Annual Expenses ........... $986,000 $2,537,000 $2,286,000 $2,341,000 $2,597,000 $2,653,000
Program Revenues:
Utility Revenue (From New User
Fee) ........................................ $206,000 $2,470,000 $2,470,000 $2.470,000 $2,470,000 $2,470,000
Revenues .................................... $206,000 $2,470,000 $2,470,000 $2,470,000 $2,470,000 $2,470,000
Revenue Breakdown:
Residential .................................. $138,867 $1,665,052 $1,665,052 $1,665,052 $1,665,052 $1,665,052
Commercial ................................. $30,370 $364,148 $364,148 $364,148 $364,148 $364,148
Industrial .................................... $20,344 $243,935 $243,935 $243,935 $243,935 $243,935
Agricultural ................................. $3,910 $46,882 $46,882 $46,882 $46,882 $46,882
Non-Residential Misc ................. $141 $1,692 $1,692 $1,692 $1,692 $1,692
Non-Residential Public ............... $12,368 $148,292 $148,292 $148,292 $148,292 $148,292
Total Non Residential ............ $67,133 $804,948 $804,948 $804,948 $804,948 $804,948
Revenues .................................... $206,000 $2,470,000 $2,470,000 $2,470,000 $2,470,000 $2,470,000
APRIL 25, 2001
RESOLUTION NO. R2001423
A RESOLUTION REQUESTING THE OHIO DEPARTMENT OF DEVELOPMENT

TO DESIGNATE THE CITY OF HAMILTON, OHIO, AS SITUATIONALLY DIS-
TRESSED UNDER THE GUIDELINES OF THE OHIO MANUFACTURING MA-
CHINERY & EQUIPMENT INVESTMENT TAX CREDIT PROGRAM
WHEREAS, until January 1999, the City had received the distressed city des-
ignation under the Guidelines of the Ohio Manufacturing Machinery & Equipment
Investment Tax Credit Program, thereby allowing for a investment tax credit of
13.5%, as opposed to a 7.5% investment tax credit, on new manufacturing machin-
ery and equipment purchased by local manufacturing companies; and
WHEREAS, following January 1999 and based upon discussions with Ohio De-
partment of Development personnel, the City of Hamilton was upgrade to a non-
distressed designation based upon the improvement of the unemployment rate
within the community, and
WHEREAS, the following, recent events have had, and are likely to continue to
have, a serious impact upon employment opportunities within the corporate limits
of the City of Hamilton and upon the economic health of the City:
1. Since 1999 several major companies have either downsized, relocated or been
sold, and have expressed intentions to leave the City;
2. Ohio Casualty Group recently relocated its corporate headquarters from
Hamilton to Fairfield, Ohio, moving approximately 1,000 employees out of the
City;
91
3. Champion International Corporation, formerly the Citys largest employer,
was sold to International Paper (IP) in June 2000, and:
(a) At the time of the sale, Champion had two facilities in Hamilton, including
a paper mill with 800850 employees and a corporate administrative complex
with 550 employees.
(b) IP already owned another paper mill in the City, with approximately 225
employees.
(c) After the sale, IP announced that it would close the administrative
complex and relocate some of the existing 550 employees to other IP sites in
and out of Ohio, but not in Hamilton, and additionally, IP announced that
it was putting the two paper mills it owned in Hamilton up for sale;
(d) In January 2001, a prospective buyer, Smart Papers, LLC, was identified
for the former Champion paper mill, and thereafter it has expressed the need
to make serious cuts in costs at the mill in order to make it profitable as a
stand-alone entity;
(e) While it is uncertain how these cost-cutting measures will affect the
overall short- and long-term employment outlook, as an initial move by Smart
Papers, the work force was decreased to 550 employees;
(f) By raising the investment tax credit percentage back up to 13.5%, an
added incentive may be provided to Smart Papers and other Hamilton
manufactures to make additional capital investments in their plants;
(g) The IP Dayton Street Mill is for sale as part of the IP diverstiture of their
entire Fine Papers Division;
(h) While the Dayton Street Mill is currently operating profitably, paper
production began at this location in 1848 and it is one of the oldest
continuously operating paper mills in the Midwest; and
(i) The long-term viability of the Dayton Street Mill and status of the existing
225 employees is uncertain:
4. In March 2001, Mercy Health Partners announced that it was closing its hos-
pital in Hamilton, which will result in the relocation of approximately 635 out
of Hamilton to either other Mercy facilities or other employers; and
5. At the end of March 2001, Thyssen Krupp Hoesch Suspensions announced
that it was permanently closing its Hamilton spring and suspension parts plant
over the next several months, resulting in the loss of another 106 quality manu-
facturing jobs in Hamilton.
WHEREAS, while the Ohio Manufacturing Machinery & Equipment Investment
Tax Credit is not seen as a panacea for development in the City, it does provide
an additional, needed incentive to locate within the corporate limits of the City, and
WHEREAS, in total, over the last year and a half, the City of Hamilton has expe-
rienced losses in private sector employment of approximately 2,700 jobs, totaling al-
most 8% of the civilian labor force for the City, as determined by the Ohio Depart-
ment of Jobs and Family Services.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Hamilton,
Ohio;
SECTION I: That based upon the evidence provided and the circumstances that
have and are presently occurring within the City of Hamilton, Council does hereby
formally request the Ohio Department of Development to designate the City of
Hamilton as situationally distressed under the Ohio Manufacturing Machinery &
Equipment Investment Tax Credit Program.
SECTION II: That Council further requests the aforesaid situationally dis-
tressed designation take effect immediately or at the soonest time possible and re-
main in effect until such time as prevalent economic and employment conditions
positively change in the City of Hamilton.
SECTION III: That the situationally distressed designation for the City of Ham-
ilton, Ohio, will allow any company locating within its corporate limits to be eligible
for an investment tax credit of 13.5%, for new manufacturing machinery and equip-
ment.
SECTION IV: This resolution shall take effect and be in full force from and after
the earliest period allowed by law.
PASSED: April 25, 2001
Adolf Olivas, Mayor
Effective Date: Immediately
ATTEST: Ina Allen, Acting City Clerk
92
CERTIFICATE
I, Ina Allen, Acting Clerk of the City of Hamilton, Butler County, Ohio, hereby cer-
tify that the foregoing Resolution No. R2001423 was duly published as provided
by Section 113.01 of the Codified Ordinances of the City of Hamilton, Ohio, by post-
ing ten days after passage, a copy thereof in each fire station within the city for
a period of ten days. POSTED: April 30, 2001
Ina Allen, Acting Clerk
CERTIFICATE
The undersigned Acting Clerk of Council of Hamilton, Ohio does hereby certify that
the foregoing is a true and correct copy of Resolution R2001423 of the City of
Hamilton, Ohio, duly adopted at the Regular Meeting on April 25, 2001.
Ina Allen, Acting Clerk
DEPARTMENT OF ECONOMIC DEVELOPMENT,

Hamilton, OH, May 10, 2001.
JOSEPH C. ROBERTSON, Interim Director,
Ohio Department of Development,
Columbus, OH.
ATTN: Steve Kelley
DEAR JOE: This letter is written as a request for reconsideration of the City of
Hamiltons designation relative to the Ohio Manufacturing Machinery & Equipment
Investment Tax Credit. Attached is Certified Resolution from the Hamilton City
Council formally requesting this consideration.
Up until 1999, the City had received the distressed city designation under this
program, allowing for the 13.5 percent as opposed to the 7.5 percent tax credit on
manufacturing machinery & equipment investments by our local manufacturers.
Based upon discussions with Ohio Department of Development personnel at that
time, the City of Hamilton was downgraded as non-distressed based upon the im-
provement of our unemployment rate in the community.
Unfortunately, recent events have and are occurring that have and will continue
to seriously affect the employment situation and the economic health in the City of
Hamilton. Since 1999, several major companies have either downsized, relocated or
been sold and expressed intentions to leave the City.
Ohio Casualty Group (OCG) recently relocated its corporate headquarters from
Hamilton to Fairfield, moving approximately 1,000 employees out of the City. This
relocation was facilitated through an Enterprise Zone Agreement with the City of
Fairfield and a Job Creation Tax Credit from the State. (Enterprise Zone Applica-
tion and Job Creation Tax Credit Program correspondences are attached.) The City
attempted to retain OCG through a number of offered incentives, including a sale/
leaseback on their Hamilton facilities, but OCG relocated out of Hamilton, despite
our efforts.
Champion International Corporation, the Citys largest employer, was sold to
International Paper (IP) in June 2000. At the time of the sale, Champion had two
facilities in Hamilton, including a paper mill with approximately 800 employees and
a corporate administrative complex with 550 employees. (WARN Act letter to the
City of Hamilton Mayor, dated January 2, 2001, relative to the administrative com-
plex, is attached. Also attached are relocation notices from Butler and Clermont
Counties, relative to the relocation of these jobs out of Hamilton. Additionally, var-
ious articles are provided outlining the job losses and relocations.) In this case as
well, various tax incentives, including enterprise zone and job creation tax credits,
have been utilized to assist a company to relocate existing jobs out of Hamilton.
IP already owned another paper mill in the City, with approximately 225 employ-
ees. After the sale, IP announced that it would close the administrative complex and
relocate some of the existing 550 employees to other IP sites in and out of Ohio,
but not in Hamilton. Additionally, IP then announced that it was putting the two
paper mills it owned in Hamilton up for sale.
In January 2001, a prospective buyers, Smart Papers, LLC, was identified for the
former Champion paper mill. The new buyer has expressed the need to make seri-
ous cuts in costs at the mill in order to make it profitable as a stand-alone entity.
93
How these cost-cutting measures affect overall employment in the short- and long-
term is yet to be seen. However, as an initial move by Smart Papers, the work force
was decreased to 550 employees. By raising the investment tax credit percentage
back up to 13.5 percent, an added incentive may be provided to Smart Papers to
make additional capital investments at the plant (Attached are several articles re-
lating the Smart Papers transaction and the employment impact resulting from the
sale.)
The other IP paper mill is being sold as part of the sale of the entire Fine Papers
Division by IP. While this mill is currently operating profitably, paper production
began at this location in 1848 and it is the oldest paper mill in the Midwest. The
long-term viability of the mill and status of the existing 225 employees is a question
that is unanswered at this time.
On January 4, 2001, the City received another relocation from an existing com-
pany, Alba Manufacturing, looking to relocate operations from Hamilton to Fair-
field. This relocation notice resulted from an enterprise zone application. This relo-
cation will cost the City of Hamilton an additional 52 quality manufacturing jobs.
The relocation waiver was granted and Enterprise Zone Agreement was extended
even though the company had an existing Enterprise Zone Agreement in place for
their last expansion in Hamilton and their first Agreement with the City had ex-
pired only last year. (Enterprise Zone Application with Fairfield is attached.)
In March 2001, Mercy Health Partners announced that it was closing its hospital
in Hamilton. This move by Mercy will result in the relocation of another approxi-
mately 635 out of Hamilton to either other Mercy facilities or other employers.
(WARN Act letter to the City of Hamilton Mayor, dated April 11, 2001, is attached.)
On March 30, 2001, Thyssen Krupp Hoesch Suspensions announced that it was
permanently closing its Hamilton spring and suspension parts plant, resulting in
the loss of another 106 quality manufacturing jobs in Hamilton. (WARN Act letter
to the City of Hamilton Mayor, dated March 30, 2001, is attached.)
In total, over the last year and a half, the City of Hamilton has experienced losses
in private sector employment of approximately 2,700 jobs, totaling almost 8 percent
of the Citys civilian labor force, as determined by the Ohio Department of Job and
Family Services. Additionally, City personnel has recently spoken to several other
medium-sized employers in the City who are also considering long-term plans that
could seriously affect their local employment complement. These other companies
combined with the already near devastating effects that the City has felt from Ohio
Casualty and IP/Champion, Mercy and the number of other companies would nearly
cripple the financial condition of the City for the foreseeable future.
While the Ohio Manufacturing Machinery & Equipment Investment Tax Credit
is not seen alone as a development panacea for the City, it does provide an addi-
tional incentive to locate within the City.
If you have any questions, comments, or require additional information, please
contact me.
Sincerely,
TIMOTHY E. BIGLER,
Director.
OHIO DEPARTMENT OF DEVELOPMENT,

Columbus, OH, June 8, 2001.
Hon. ADOLF OLIVAS, Mayor,
City of Hamilton,
Hamilton, OH.
DEAR MAYOR OLIVAS: I am in receipt and have reviewed the City of Hamiltons
petition for designation as a Situational Distress Municipal Corporation. Acting
under the authority granted to the Director of the Ohio Department of Development
in Amended Senate Bill 188, reference Ohio Revised Code 57733.33, A13; I am des-
ignating the City of Hamilton in Butler County, as a Situational Distress Municipal
Corporation. This designation will be in effect from July 1, 2001 through June 30,
2004.
Effective July 1, 2001 manufacturing or refining companies located within the po-
litical boundaries of the City of Hamilton, which make machinery and equipment
purchases in compliance with the guidelines as outlined in Ohio Revised Code Sec-
tions 5733.33 and 5747.31, are allowed to claim a credit against their Ohio Cor-
94
porate Franchise Tax equal to 13.5 percent. This is an increase from the base of
7.5 percent, which is available anywhere in the State of Ohio.
Sincerely,
JOSEPH C. ROBERTSON,
Interim Director.
OFFICE OF THE CITY MANAGER,

Hamilton, OH, February 27, 2003.
Hon. GEORGE V. VOINOVICH,
Washington, DC.
Re: Proposed Legislative Moratorium on the Implementation/Enforcement of the
NPDES Storm Water Phase II Final Rule
DEAR SENATOR VOINOVICH: The City Council of the City of Hamilton, Ohio (City)
is concerned about the implementation and enforcement of the National Pollutant
Discharge Elimination System (NPDES) Storm Water Phase II Final Rule (Phase
II Rule) in this challenging local, state and federal economic climate. As part of the
Clean Water Act (CWA) legislation, the USEPA extended the NPDES permitting
program to storm water discharges in 1990. The 1990 regulations established re-
quirements for permitting discharges from industries, construction sites large than
5 acres, and drainage systems in large and medium municipalities serving a popu-
lation greater than 100,000 (Phase I program). On December 8, 1999, USEPA pro-
mulgated the expansion of the existing NPDES Storm Water Program to include
discharges from small municipalities with a population less than 100,000. This pro-
gram, termed the Phase II program, requires covered political jurisdictions to obtain
an NPDES storm water discharge permit by March 10, 2003. In Ohio, about 280
cities, counties, villages and townships located in urbanized areas that own and op-
erate municipal separate storm sewer systems (MS4s) are required to obtain this
type of permit, which includes the City of Hamilton. To comply with this unfunded
government mandate, the City has retained the environmental engineering con-
sulting firm of CDM to assist the City in preparing a Storm Water Management
Plan (Plan) that outlines best management practices (BMPs) that the City must im-
plement over the next five years. These BMPs address the six minimum control
measures required within the Phase II Rule, and when implemented in concert, are
expected to result in significant reductions of pollutants discharging into receiving
streams.
We will not dispute that since the passage of the CWA 30 years ago, the quality
of our Nations waters has markedly improved. The City sees daily visual evidence
of these remarkable achievements here locally along Hamiltons major water-
coursethe Great Miami Riverwith the continuing presence of large numbers of
wildlife, including herons, Canada geese, wood ducks, mallards, swans, beaver, and
sea gulls. To maintain and/or improve upon this status however, will come at a cer-
tain cost.
As the City has prepared its Phase II Plan, which we fully intend to submit to
the Ohio EPA on or before March 10, 2003, it has become noticeably apparent to
our City Council that the costs associated with the implementation of this Plan will
have to be assessed to our local government, and alternatively and more likely, to
our citizens and businesses. This occurring at a time when our economy is stagnant
and our nation is facing huge deficits that are being forecast by both local and state
financial officers, not to mention federal fiscal authorities. Hamilton is no exception;
local budget deficits are already predicated for the next fiscal year, and Ohios gov-
ernor has declared the states budget to be in such crisis that no additional help
for local communities will be forthcoming from that sector. Alas, Hamilton, along
with 279 other jurisdictions, are being asked to comply with an unfunded govern-
ment mandate at a time when we can ill afford to be capriciously spending.
To pay for this Phase II program, the City is considering forming and imple-
menting a Storm Water Utility (Utility). The Utility charges will be related to the
impervious area factor (i.e., potential runoff following a storm event from a given
parcel of land). In this manner, each parcel of land within Hamilton would be as-
signed a fee based on its runoff characteristics. The state supreme courts have ruled
that all parcels must pay the storm water charge if the Utility is to pass the ration-
ale nexus test. No parcel can be exempted due to its tax status or land useonly
adjustments to the charge can be applied. This means that to implement a Utility
that is fair, equitable and thus legally defensible in a court of law, all residents,
businesses, schools, churches, government and institutional complexes, etc. will be
subject to these charges. Residents would pay a flat monthly charge, but non-resi-
95
dential properties would pay a higher amount equivalent to the expanse of imper-
vious surface at their respective locationssome as high as hundreds or thousands
of dollars per month.
Now is not the time to impose a new monthly Utility charge upon our community
in furtherance of Phase II compliance. When the economy improves, our businesses
and citizens will be better able to absorb this type of storm water management fee.
In our flagging economy however, businesses cannot afford it; nor can our citizens
who are already being called upon to absorb more and more of the financial burden
of local and state government.
Please let me emphasize that the time for implementation of this Phase II pro-
gram is not now. Consequently, the City respectfully asks that you, as our elected
federal representatives to Washington, commence whatever action can be promptly
placed before Congress to legislatively enact a five-year moratorium to delay the re-
quirement that communities such as ours step forward to implement the Phase II
Rule. This will delay the necessity that communities, such as ours, have to impose
the financial burden of Phase II compliance on your and our constituents at this
time. We ask this not because Hamilton is seeking to avoid our responsibilities as
being good stewards of our receiving waters, but as concerned elected officials look-
ing to strike a balance between the best interests of our economy and the environ-
ment during tough economic times.
Thank you for looking into this on our behalf. Our City Council, our administra-
tive staff, our consulting engineer and I are all available to talk with you about this
should you have any questions.
Sincerely,
MICHAEL J. SAMOVISKI,
City Manager,
City of Hamilton, OH.
OFFICE OF THE CITY MANAGER,

Hamilton, OH., Feburary 27, 2003.
Hon. JOHN BOEHNER,
Hamilton, OH.
Re: Proposed Legislative Moratorium on the Implementation/Enforcement of the
NPDES Storm Water Phase II Final Rule
DEAR REPRESENTATIVE BOEHNER: The City Council of the City of Hamilton, Ohio
(City) is concerned about the implementation and enforcement of the National Pol-
lutant Discharge Elimination System (NPDES) Storm Water Phase II Final Rule
(Phase II Rule) in this challenging local, state and federal economic climate. As part
of the Clean Water Act (CWA) legislation, the USEPA extended the NPDES permit-
ting program to storm water discharges in 1990. The 1990 regulations established
requirements for permitting discharges from industries, construction sites large
than 5 acres, and drainage systems in large and medium municipalities serving a
population greater than 100,000 (Phase I program). On December 8, 1999, USEPA
promulgated the expansion of the existing NPDES Storm Water Program to include
discharges from small municipalities with a population less than 100,000. This pro-
gram, termed the Phase II program, requires covered political jurisdictions to obtain
an NPDES storm water discharge permit by March 10, 2003. In Ohio, about 280
cities, counties, villages and townships located in urbanized areas that own and op-
erate municipal separate storm sewer systems (MS4s) are required to obtain this
type of permit, which includes the City of Hamilton. To comply with this unfunded
government mandate, the City has retained the environmental engineering con-
sulting firm of CDM to assist the City in preparing a Storm Water Management
Plan (Plan) that outlines best management practices (BMPs) that the City must im-
plement over the next five years. These BMPs address the six minimum control
measures required within the Phase II Rule, and when implemented in concert, are
expected to result in significant reductions of pollutants discharging into receiving
streams.
We will not dispute that since the passage of the CWA 30 years ago, the quality
of our Nations waters has markedly improved. The City sees daily visual evidence
of these remarkable achievements here locally along Hamiltons major water-
coursethe Great Miami Riverwith the continuing presence of large numbers of
wildlife, including herons, Canada geese, wood ducks, mallards, swans, beaver, and
sea gulls. To maintain and/or improve upon this status however, will come at a cer-
tain cost.
96
As the City has prepared its Phase II Plan, which we fully intend to submit to
the Ohio EPA on or before March 10, 2003, it has become noticeably apparent to
our City Council that the costs associated with the implementation of this Plan will
have to be assessed to our local government, and alternatively and more likely, to
our citizens and businesses. This occurring at a time when our economy is stagnant
and our nation is facing huge deficits that are being forecast by both local and state
financial officers, not to mention federal fiscal authorities. Hamilton is no exception;
local budget deficits are already predicated for the next fiscal year, and Ohios gov-
ernor has declared the states budget to be in such crisis that no additional help
for local communities will be forthcoming from that sector. Alas, Hamilton, along
with 279 other jurisdictions, are being asked to comply with an unfunded govern-
ment mandate at a time when we can ill afford to be capriciously spending.
To pay for this Phase II program, the City is considering forming and imple-
menting a Storm Water Utility (Utility). The Utility charges will be related to the
impervious area factor (i.e., potential runoff following a storm event from a given
parcel of land). In this manner, each parcel of land within Hamilton would be as-
signed a fee based on its runoff characteristics. The state supreme courts have ruled
that all parcels must pay the storm water charge if the Utility is to pass the ration-
ale nexus test. No parcel can be exempted due to its tax status or land useonly
adjustments to the charge can be applied. This means that to implement a Utility
that is fair, equitable and thus legally defensible in a court of law, all residents,
businesses, schools, churches, government and institutional complexes, etc. will be
subject to these charges. Residents would pay a flat monthly charge, but non-resi-
dential properties would pay a higher amount equivalent to the expanse of imper-
vious surface at their respective locationssome as high as hundreds or thousands
of dollars per month.
Now is not the time to impose a new monthly Utility charge upon our community
in furtherance of Phase II compliance. When the economy improves, our businesses
and citizens will be better able to absorb this type of storm water management fee.
In our flagging economy however, businesses cannot afford it; nor can our citizens
who are already being called upon to absorb more and more of the financial burden
of local and state government.
Please let me emphasize that the time for implementation of this Phase II pro-
gram is not now. Consequently, the City respectfully asks that you, as our elected
federal representatives to Washington, commence whatever action can be promptly
placed before Congress to legislatively enact a five-year moratorium to delay the re-
quirement that communities such as ours step forward to implement the Phase II
Rule. This will delay the necessity that communities, such as ours, have to impose
the financial burden of Phase II compliance on your and our constituents at this
time. We ask this not because Hamilton is seeking to avoid our responsibilities as
being good stewards of our receiving waters, but as concerned elected officials look-
ing to strike a balance between the best interests of our economy and the environ-
ment during tough economic times.
Thank you for looking into this on our behalf. Our City Council, our administra-
tive staff, our consulting engineer and I are all available to talk with you about this
should you have any questions.
Sincerely,
MICHAEL J. SAMOVISKI,
City Manager,
City of Hamilton, OH.
U.S. SENATE,
Washington, DC, July 15, 2003.
MARIANNE LAMONT HORINKO, Acting Administrator,
U.S. Environmental Protection Agency,
Washington, DC.
DEAR ACTING ADMINISTRATOR HORINKO: As the EPA is moving forward with the
implementation of National Pollution Discharge Elimination System (NPDES)
Phase II permits, I would like to share with you the concerns of many Ohio cities
and communities who are uncertain where they will find funding to cover the costs
associated with this implementation.
As you are aware, NPDES Storm Water Run-off Permits were designed to help
reduce water and soil pollution caused by contaminated run off from streets, roofs,
buildings, residences, etc. Over the next five years, the EPA will implement Phase
II, which will add smaller metro centers in urbanized areas. These communities
have been told to expect little help from the EPA to aid in their compliance efforts.
97
The State of Ohio originally planned to offer grants to help meet the requirements,
however due to budgetary constraints, the State will be unable to assist the cities.
Communities say that in order to meet the costs of implementing Phase II, they will
have to place additional tax burdens on businesses. Given the state of todays na-
tional and state economies, along with the rising costs of doing business, I am con-
cerned over the economic impact this will have in Ohio.
I would like to hear your suggestions on how to ease the financial burden on com-
munities as they begin implementing this mandate. I look forward to hearing your
response. If you have any questions, please contact me or my staff assistant Eliza-
beth Belleville at 2022242315.
Very respectfully yours,
MIKE DEWINE,
U.S. Senator.
RESPONSES OF MICHAEL J. SAMOVISKI TO ADDITIONAL QUESTIONS FROM

SENATOR INHOFE
Question 1. Can you explain what role blending plays in the Citys ability to
manage peak storm events and how EPAs recent internal debate on the practice
is affecting the City?
Response. In 1998, the Ohio EPA approved a Permit to Install for the expansion
of city of Hamiltons (City) Wastewater Treatment Plant (WWTP). These plans for
expansion approved and permitted the use of an alternative wet-weather routing
scenario, which includes diverting wet-weather flows into: (1) the WWTPs pre-exist-
ing primary treatment system and aeration tanks where it is either stored and
drained back into the primary treatment system where it receives full treatment,
or (2) blended back into the treatment scheme upstream of the chlorination tank
where it bypasses secondary treatment. The second option is used only if the storage
capacity of the pre-existing primary treatment system and aeration tanks is
reached. By allowing the second option to occur, the City is able to eliminate overly
stressing the treatment processes at the WWTP and eliminate surcharging of the
interceptor mains conveying flow into the WWTP, which also minimizes the direct
discharge of sanitary sewage via sanitary sewer overflows (SSOs) into the receiving
stream. The blending concept allows the City to maximize primary treatment dur-
ing wet-weather flows in lieu of no treatment should SSOs occur. Pursuant to the
Ohio EPA Permit To Install, the City first put this system in use in the Fall of 2000,
and the cost of this expansion has totaled $14.9 Million. The use of this alternative
wet-weather flow routing system and occasional blending has reduced the total
number of SSOs experienced by the City as shown on the following chart.
Response. Hamilton has begun discussions with Ohio EPA concerning the inclu-
sion of blending in the Citys discharge permit. The City is also currently conducting
water quality sampling to demonstrate the percent removal of solids achieved
through our alternative wet-weather routing scenario. The Citys WWTP effluent
98
consistently meets permitted discharge limits while blending. The additional storage
and primary treatment capacity that this alternative wet-weather routing scenario
provides the City results in better stream water quality by reducing the volume and
occurrence of SSOs while maximizing the conveyance of wet-weather inflow and in-
filtration through the WWTP.
Question 2. In your testimony, you explain that you will now have to levy a fee
to all businesses and residents in your city. Smart Paper will have to pay $5,000
per month. Has the company, one of the few larger employers remaining in Ham-
ilton, expressed concerns about the fee with the city and whether it will impact their
ability to continue doing business in Hamilton? Are you concerned about how it will
impact your ability to attract other employers?
Response. Smart Papers is very concerned about the monthly fees associated with
the proposed Storm Water Management Program. Smart Papers is a production
paper mill owned and operated by former Champion International Management and
a group of venture capital investors, and as additional fees adversely affect profits,
the investors could have no alternative but to close the mill.
Hamilton is considering and researching a number of fair, equitable and lawful
options to assist companies, such as Smart Paper, to apply for adjustments and/or
credits to their monthly storm water bill. For example, Smart Paper discharges
some storm water directly into the Great Miami River through infrastructure
owned, operated and maintained by the company and not the city of Hamilton.
Based on the amount of upstream drainage area that conveys storm water through
this system, the City can potentially offer Smart Paper a storm water credit because
the City does not have to incur the expense of performing capital improvements and
operation and maintenance activities on this system; however, the company has in-
dicated that any credit less than 100 percent would offer insufficient relief.
The City is very concerned about how these fees may adversely affect new busi-
nesses locating into Hamilton. In the competitive atmosphere of the business world
every applicable cost, whether it is construction or utility rates, plays a factor as
to where the business ultimately decides to locate. Often times, our experience
shows that businesses decide upon their final destinations based on very subtle dif-
ferences in cost.
RESPONSES OF MICHAEL J. SAMOVISKI TO ADDITIONAL QUESTIONS FROM

SENATOR VOINOVICH
Question 1. What were the specific challenges the city of Hamilton faced when
preparing the Storm Water Management Plan?
Response. The City hired an environmental engineering consulting firm to conduct
Phase 1 or Gap Analysis to evaluate Hamiltons existing storm water management
programs and identify the deficiencies or gaps that the City would need to address
in order to develop an acceptable Storm Water Management Plan. The City then
authorized the consultant to conduct Phase 2 of the Program Development, which
included the development and preparation of a Storm Water Management Plan and
the identification and selection of a funding option(s) to successfully implement the
Plan. The funds needed to pay for our consultant came from the General Fund
(largely employment taxes), which has suffered greatly from the closing of many of
the Citys larger commercial and industrial customers. Development of this Plan
meant reducing the limited amount of money available for as needed repair and re-
placement of the storm water collection system. The total cost to the City for the
Gap Analysis and Program Development was $310,000.
The development of the Storm Water Management Plan and funding option re-
quired active public involvement. Toward this goal, the City formed a Storm Water
Advisory Board (SWAB), which included representatives from industry, small busi-
ness, schools, churches, airport, and private citizens. The City selected a diverse
group from a broad cross-section of the community, in order to obtain feedback that
would reflect the City as a whole. Hamiltons Storm Water Advisory Board consisted
of 5 citizens, 6 industrial representatives, and 4 community groups (hospital, school,
metropolitan housing and homebuilders association). A total of 8 meetings were held
over an 8 month period of time. Maintaining interest in the process over this time-
frame and keeping adequate attendance at meetings was a challenge and a huge
educational process.
Another challenge was determining what level of service and which Best Manage-
ment Practices (BMPs) would satisfy the EPA Phase II National Pollutant Dis-
charge Elimination System (NPDES) mandate. Many questions needed to be an-
swered, and several examples include:
99
Would cleaning catch basins every 5 years result in improved water quality or
should they be cleaned every 3 years?
What BMPs should be included in the Storm Water Management Plan?
Would the citizens of Hamilton be receptive to these BMPs?
Question 2. Briefly describe the costs associated with the implementation of the
Citys Storm Water Management Plan.
Response. The City has projected an average annual cost for the first 3 years of
the Storm Water Management Program to be $2,270,000 with the last 2 years of
the program being an average annual cost of $2,470,000. These costs were developed
based on the SWABs Level of Service recommended to Hamiltons Council and are
allocated as shown below:
Regulatory Compliance ($100,000)includes public education, employee training;
monitoring and detection of illicit discharges; and program management staff sala-
ries.
Leaf Collection/Street Sweeping ($600,000)
Operation and Maintenance of Collection System ($850,000)includes the hiring
of 4 additional maintenance workers, 1 additional supervisor and establishment of
a routine proactive inspection and maintenance program.
Planning and Management ($170,000)includes funds to complete and update
current GIS mapping of stormwater system and outfalls as required by Phase II and
engineering, GIS staff salaries.
Engineering Studies ($300,000 for first 3 years)funds to implement system-wide
planning of capital improvement projects to ensure economy of scale and best pollut-
ant reduction.
As Needed Repair and Replacement ($250,000)
Engineering Projects ($500,000 for the last 2 years of the 5-year Plan)system-
wide improvements needed to improve water qualitysuch as stream bank sta-
bilization.
Question 3. Your testimony explains that the city of Hamiltons projected annual
expense attributable to the Storm Water Phase II program is an additional $1.6 Mil-
lion over the current $800,000 the City currently spends. What storm water activi-
ties does the City currently perform?
Response. The City currently has annual expenditures of approximately $600,000
on Leaf Collection/Street Sweeping and $200,000 on Improvement Projects for as
needed system repairs and replacement of existing infrastructure. The City cur-
rently can only afford to employ 4 full time sewer maintenance workers who are re-
sponsible for maintaining 217.7 miles of sanitary sewer, 5600 sanitary manholes,
180.5 miles of storm sewer and approximately 6500 storm water catch basins and
inlets.
Question 4. In your testimony, you recommend that Congress should enact a 5-
year moratorium on the time or implementation of the Phase II Storm Water pro-
gram. Other than a moratorium, what other recommendations would you make to
Congress to help communities like the city of Hamilton comply with the Phase II
program?
Response. Congress could provide startup grants and low interest loans to every
city showing a need for assistance in the initial implementation costssuch as plan-
ning, mapping and purchasing additional equipment.
Change the implementation period from 5 years to 10 years. USEPA is requiring
cities to improve water quality and change the ingrained habits of our citizens in
an impossibly short timeframe.
Question 5. Does the State of Ohio have funding available in the form of grants
or loans to assist Ohio Communities conduct storm water activities? Has the city
of Hamilton applied for funding from the State of Ohio?
Response. The State of Ohio has extremely limited funding available for storm
water activities. Furthermore, these sources are not consistent with funding a com-
prehensive storm water management program nor are they dedicated to storm
water only projects. When applying for these funds, the Citys storm water projects
must compete with sanitary sewer projects, source water protection projects, street
maintenance projects, etc.
The City is aware of three grant and loan programs from the State of Ohio. None
of these opportunities are specific for storm water management and do not provide
the significant source of funding the City would need to reduce the burden on the
citizens and businesses in Hamilton.
100
Question 6. Other than resources, what other specific challenges does the city of
Hamilton face affecting the Citys ability to implement the Phase II Storm Water
program requirements?
Response. The City is required to locate and identify every storm water system
outfall. It will also be necessary to map every pipe, catch basin, and curb inlet in
our system in order to track illicit discharges. The Citys stormwater infrastructure
is over 100 years old, and complete maps do not exist for some of the older sections.
Mapping these sections will require utilizing technicians currently working on other
equally important and time sensitive projects to field check and/or verify locations,
depth and size of storm sewer lines and appurtenances.
The City is concerned with the state of apathy the population in general has to-
ward storm water management. To be successful, the Storm Water Management
Plan is relying on a vast public education effort and participation by the citizens
to control storm water pollution.
Question 7. Briefly describe any wastewater or drinking water infrastructure
issues affecting the city of Hamilton resulting from a Federal mandate.
Response. Sanitary Sewer Overflow0 discharge prohibition.The City has spent
$ 25.85 Million since 1994. Preproposal of SSO regulations published in 1999 indi-
cates USEPA is considering defining basement back ups as sanitary sewer over-
flows. If enacted, this determination would create a tremendous administrative as
well as financial burden on the City since based on the proposal, Hamilton would
be required to determine that the back up was not related to any collection system
flow restrictions.
Proposed TMDL.The City is being required to collect additional data (re: phos-
phorous, Nitrate plus Nitrite, Total Dissolved Residue) unrelated to our wastewater
operation. OEPA is requiring Hamilton to collect this data on a monthly basis for
assistance in their efforts to develop a TMDL for the lower Great Miami River in
2013. This OEPA requirement to collect and analyze these samples has created an
additional burden on our already limited lab staff.
Blending.The City is very concerned about the proposed guidance on Blending
being negotiated with the various USEPA regions. As per the Ohio EPAs Permit
To Install, Hamilton invested $14.9 Million in 1999 on an approved alternative wet-
weather flow routing system that was designed and constructed to blend effluent
flows during excessive wet weather flow situations.
Consumer Confidence Reports
Water Plant Security Initiative which was totally funded by grants from the US
EPA
Wellhead (Source Water) ProtectionCity of Hamilton spends approximately
$150,000 annually
STATEMENT OF STEVE KOUPLEN, PRESIDENT, OKLAHOMA FARM BUREAU, AMERICAN

FARM BUREAU FEDERATION
Mr. Chairman and members of the subcommittee, my name is Steve Kouplen. I
am president of the Oklahoma Farm Bureau Federation. I am pleased to be here
today to offer testimony on several water issues of importance to agriculture across
the country.
On July 13, 2000, EPA published final regulatory requirements for establishing
Total Maximum Daily Loads (TMDLs) under the Clean Water Act (CWA). Farm Bu-
reau strongly opposed those regulations and promptly petitioned the court and as-
serted that many of EPAs revisions were unlawful under the Administrative Proce-
dure Act or exceeded the agencys authority under the CWA. One of the most dis-
turbing aspects of the July 2000 rule was the agencys conversion of the TMDL pro-
gram into an overarching, nationwide enforcement mechanism for all sources of pol-
lutionpoint and nonpoint sources. We believe that the TMDL program should re-
spect the practical and legal differences between point and nonpoint sources. As the
CWA has recognized for over 30 years, the availability of end-of-pipe technologies
for point sources has made a precise control strategy feasible. Nonpoint sources, on
the other hand, cannot rely on any comparable technologies and must therefore use
less precise, more subjective best management practices to achieve load reduc-
tions. Given the inherently less predictable results of the measures available to
nonpoint sources, a command-and-control strategy for nonpoint sources has never
been feasible. Until the July 2000 rulemaking, the agency had never formally em-
braced this approach to nonpoint sources.
We opposed the 2000 regulations in large part because they required an imple-
mentation plan as part of a TMDL. Section 303(d) provides no authority for the
101
preparation or establishment of an implementation plan. It merely envisioned the
translation of waste load allocations into water quality-based effluent limitations for
point sources. Since this was the intended purpose of Section 303(d), there was no
need for a formal implementation mechanism.
But even assuming Section 303(d) required the preparation of implementation
plans, there is no authority for the July 2000 rule to require the plans to include
reasonable assurances that load allocations be achieved. Indeed, the words rea-
sonable assurances do not exist in Section 303(d).
Further, Congress went to great lengths to ensure that EPA did not prescribe in
local land use decisions by delegating nonpoint source control to the states in Sec-
tions 208 and 319. The 2000 rules undercut this approach, allowing EPA to prepare
implementation plans that dictate how and when nonpoint sources can use their
land. Implementation of a nonpoint source TMDL is clearly an inappropriate area
for Federal management. States should have the freedom to implement their TMDL
programs at their discretion.
Farm Bureau believes a TMDL is information about the assimilative capacity of
an impaired water body. Once EPA approves a TMDL that information should be
used by the state in their Continuing Planning Process (CPP), established under
Section 303(e), for state implementation of Waste Load Allocations (WLAs) and Load
Allocations (LAs). The CPP allows for an integrated watershed approach that brings
together and integrates the distinctive approaches contained within the CWA for
point and nonpoint sources. Specifically, point sources would be subject to water
quality-based effluent limitations that could be incorporated into National Pollutant
Discharge Elimination System (NPDES) permits, over which EPA would exercise
discretionary review and veto authority. Nonpoint sources would be subject to state-
developed best management practices, over which EPA would exercise the power of
review and grant funds. The integrated watershed approach, conducted under the
umbrella of the CPP, allows states and local watersheds to
1. Monitor and assess their needs;
2. Plan their economic development, implement water quality management meas-
ures and even institute trading policies;
3. Achieve the goals and objectives of the watershed in a manner consistent with
the goals of the CWA; and
4. Diffuse and minimize the potential for adverse litigation that will frustrate a
cooperative and locally led watershed approach.
The CWA requires that states identify waters impaired by pollutants and estab-
lish Total Maximum Daily Loads (TMDLs) at levels necessary to implement applica-
ble water quality standards. Pursuant to CWA 303(d)(2), EPA must approve or dis-
approve all such TMDLs and must directly establish TMDLs in the event of dis-
approval. EPA has consistently recognized that the decision on how to identify the
most cost-effective or equitable means of allocating loadings is best handled by the
state. E.g., 65 Fed. Reg. 43,586, 43,620 (July 13, 2000) (preamble discussion of July
2000 final TMDL rule, also commenting that states can use any kind of system or
policy for allocating pollutant loadings among sources, as long as the resulting allo-
cations will lead to attainment and maintenance of water quality standards). Such
subjective judgments concerning equity and cost-effectivenesslike other aspects of
water quality planningare specifically committed to the states discretion under
the CWA, subject to EPA guidance and support. Finally it is our understanding that
the draft watershed rule states that EPA is proposing that load allocations for
these sources may be expressed as allocations to specific sources or as gross alloca-
tions without connection to categories or subcategories or sources. We are con-
cerned about the use of individual load allocations that would be subject to EPA ap-
proval. A gross allocation would provide the states and the stakeholders the flexi-
bility they need to develop reasonable limits for both point and nonpoint sources.
In the Pronsolino v. Nastri 291 F. 3d 1123 (9th Cir. 2003) decision the U.S. Court
of Appeals for the Ninth Circuit said, [t]he upshot of this intricate scheme is that
the CWA leaves to the states the responsibility of developing plans to achieve water
quality standards if the statutorily mandated point source controls will not alone
suffice, while providing Federal funding to aid in the implementation of the state
plans. Consistent with the primary responsibilities and rights of the states, EPA
approves state nonpoint source management plans as a condition of establishing eli-
gibility for CWA funding. See CWA 319. Even in the event of disapproval, EPA
lacks CWA authority to dictate state decisionmaking by directly establishing such
plans. In contrast, TMDLslike water quality standards themselvesmay be di-
rectly established by EPA if states fail to do so in accordance with CWA require-
ments. See CWA 303(c)(3)-(4), 303 (d)(2). This ensures that TMDLs will be avail-
able as informational tools that allow the states to proceed from the identification
of waters requiring additional planning to the required plans.
102
This fundamental balance of state-Federal control requires that EPA ensure that
the ultimate goal (the total load) is properly defined, but that states alone deter-
mine how the goal will be achieved. Thus, statesnot EPAmust determine how
loading capacity will be allocated among the various industrial, municipal, com-
mercial, residential, agricultural, silvicultural, and other pollutant sources. Such
highly subjective decisions necessarily require balancing the needs of competing
land uses based on considerations of equity, economy, and public welfare. As such,
allocation decisions are the essence of implementation planning that has been strict-
ly reserved for the states.
Implementation programs will be effective only if states revise allocations based
on experiencei.e., demonstrated successes or failures of existing programs and con-
trol measures. TMDL implementation for nonpoint sources in particular must be a
process where state strategies evolve to expand programs that work and change or
abandon programs that fail. TMDLs will unnecessarily constrain, rather than foster,
state efforts to achieve water quality standards if allocations to particular sources
or source categories are locked in absent submission and EPA approval of a re-
vised TMDL.
Stakeholder participation and innovationincluding nutrient trading and other
market-based approacheswill be stifled if pollutant allocations are fixed. Where
achievement of the total pollutant load is the clear objective, states and stake-
holders have the incentive and the flexibility to achieve that goal in the most effi-
cient and cost-effective manner. Yet much of the incentive for such collaborative ef-
forts will disappear if the results are subject to disapproval at the Federal level.
Trading Policy.Trading policy empowers states and tribes to implement market-
based programs to achieve and go beyond the goals of the CWA. Both point and
nonpoint sources need new tools that move beyond the existing regulatory frame-
work. Our Nation must participate in a highly competitive world market and our
policy should reflect the demands and efficiencies of market-based program. Trading
will allow the water program to go beyond the technological and economic limita-
tions of our existing regulatory framework to find solutions to complex water quality
problems. Trading is an innovative strategy that can align with other core conserva-
tion and water programs.
Oil Spill Final Rule Impact on Agriculture.EPAs July 17, 2002, Oil Spill Pre-
vention, Control and Countermeasures ( SPCC) Rule will negatively impact farmers
and ranchers, and their cooperatives across the country. While the subsequent Jan-
uary 9, 2003, rule providing an 18-month delay in its implementation allows more
time to prepare; it does not reduce its overall cost or impact. The oil spill rule and
program will greatly affect agriculture.
The rule fails to take into account the nature of production agriculture, and ap-
pears to be based on limited data or information that is out of date. It also does
not take into account the cumulative effect of EPAs rules and regulations on agri-
culture.
Farmers and ranchers need to store fuel on their farms in order to control costs
and to fulfill time sensitive production operations. Many farms, especially in the
western states, require more than the regulatory threshold of 1,320 gallons of fuel
storage for their operations. On many larger farms the fuel storage is not centrally
located. Above ground tanks are placed where needed for efficient equipment oper-
ation and these may be miles apart.
In a letter to EPA on June 2, 2003, several agricultural organizations and co-
operatives stressed that the SPCC rule for agriculture:
(1) underestimated the economic impact by:
a. using 1991 cost data for a 2002 rule
b. using examples of costs based on farms in the upper 9 percent income
bracket
c. basing impact on inadequate survey data
d. drawing conclusions about tankage based on income and not tank survey
data
e. exempting 27,700 farms out of 2 million
(2) showed a lack of understanding of ag operations by:
a. mentioning farms only six times in the 112-page rule and only in the pre-
amble
b. not understanding farm layouts and oil storage operations
(3) inappropriately applied bulk terminal rules to private family property and/or
small businesses.
Given the dispersed nature of farm fuel storage and the costs associated with fol-
lowing the rule requirements for containment, integrity testing, security and plan
development, we believe that the threshold should not apply to family farms nor to
103
those storages where a spill would have no impact on water quality. We believe that
based on the 1971 and 1993 Memorandums of Understanding between DOT and
EPA, that SPCC rules should have been intended for commercial wholesale and re-
tail sales and not the private party small end user. In addition, the aggregation of
many smaller tanks, often in dispersed locations across farms and farmland, must
also be addressed so as not to place farms in a costly regulatory program where
there is no threat to water quality.
Farm Bureau has been a strong supporter of the voluntary, incentive-based ap-
proach to working with farmers and ranchers to improve and protect our environ-
ment. EPA should first look to the USDA for appropriate conservation practices and
technical support to address this issue with agriculture. We support using our U.S.
Department of Agriculture conservation programs, such as the Environmental Qual-
ity Incentives Program and the Conservation Security Program to help agriculture
address the above-ground fuel tank issue.
The concerns about the impacts of the oil spill rule warrant a complete review
of the final rule as it impacts agriculture. EPA should address agricultural oil stor-
age differences in a manner that allows the farm and ranch community to protect
water quality in an economically and environmentally sound and effective manner.
Thank you for accepting our testimony.
STATEMENT OF MICHAEL R. LOZEAU, ESQ., EARTHJUSTICE

INTRODUCTION
Good morning Chairman Crapo, Ranking Member Graham and members of the
subcommittee. My name is Michael Lozeau. I am an attorney with Earthjustice, a
non profit environmental law firm with offices located throughout the country. I am
employed at the Earthjustice Environmental Law Clinic at Stanford, a joint project
between Earthjustice and Stanford Law School that provides students with a real
world experience in environmental litigation and advocacy before administrative
agencies on behalf of non-profit environmental advocacy organizations. I also am a
Lecturer at Stanford Law School. It is an honor to have the opportunity to share
with you today some of my and Earthjustices concerns regarding several recent ac-
tions by the Environmental Protection Agency that have or will undermine the im-
plementation of the Clean Water Act and allow substantially more pollution to enter
our Nations waters and prevent the clean-up of the vast number of waters, esti-
mated at about 45 percent of all of the countrys rivers, lakes, streams, and coastal
waters, that are too polluted for fishing, swimming and the myriad other uses made
of those waters by the American public.
The Clean Water Act was enacted in 1972 because the water quality laws that
came before it did not work. Those laws were limited in scope, often based on vol-
untary programs, and sought to enforce the few available ambient water quality
standards directly without pollution control permits or clear requirements applicable
to individual sources of pollution. Those laws did not work. As recognized by many
Members of Congress thirty years ago, our Nations waters were treated as little
more than open sewers for industrial and municipal wastes.
In 1972, the Congress solved this problem by enacting the Clean Water Actcre-
ating a comprehensive legislative program that, as written, addresses almost every
water pollution problem facing the country. In particular, the Acts National Pollut-
ant Discharge Elimination System (NPDES) permitting program, where applied,
has been heralded as a great success in reducing pollution from sewage plants and
many industrial dischargers. In the last decade, this Clean Water Act program has
begun to have similar positive impacts on reducing storm water pollution from mu-
nicipal storm systems, many industrial storm water pollution sources and construc-
tion sites.
Juxtaposed with the success of the Acts permitting program is the notable ab-
sence of progress for pollution sources that have not been brought into the NPDES
program. Many of these include point source discharges that EPA has simply failed
to address or affirmatively attempted to exempt from the NPDES program. Exam-
ples include point source discharges associated with the logging industry. Likewise,
discharges exempted from the NPDES program created by Congress also have
grown worse over the years, despite Congress provision of funds and voluntary pro-
grams. The widespread toxicity of the rivers flowing into San Francisco Bay in Cali-
fornias Central Valley by pesticides, nutrients and other farming-related pollution
is a depressing testament to the ineffectiveness of Clean Water Act programs, out-
side of the standard setting and NPDES program, to clean up pollution.
104
One very important reason no discernable progress has been made to reduce pol-
lution outside of the NPDES program is EPAs historic failure to implement a com-
mon sense and core requirement established by Congress in 1972the Total Max-
imum Daily Load (TMDL) program. Over the last 5 years, both EPA and the
States have gone through, and are continuing to go through, a steep learning curve,
starting a program essentially from scratch after 25 years of neglect. During those
25 years, rather than heading off well-documented water quality problems, numer-
ous pollution problems in our rivers and lakes that were left unregulated by the per-
mitting program have in many cases steadily increased or become more intractable.
The current efforts need to be given time to determine their effectiveness at clean-
ing up pollution. Implementation of the current TMDL rules should be given a
chance to work before theyre abruptly changed.
Instead of aggressively implementing the TMDL program, closing existing loop-
holes, and faithfully implementing and enforcing the statute, this administration
has instead taken a series of action to weaken the tools available to protect our Na-
tions waters. While I will not cover most of these today, the administrations actions
in many ways are attacking Clean Water Act safeguards that most people would
assume are firmly protected by law. For example, the administration repealed a 25-
year old regulation to authorize waste dumps in waters of the United States; elimi-
nated Clean Water Act protections for as many as 20 million acres of wetlands; al-
lowed factory farms to write their own pollution control standards; and withdrew
a regulatory proposal to control sewer overflows and notify the public of overflows
that could make them sick.
Pending policy decisions are potentially even more damaging, including the deci-
sion on whether to eliminate Federal jurisdiction over more than 60 percent of the
stream miles and millions more acres of wetlands and ponds that are currently pro-
tected by the Clean Water Act. These rollbacks often involve this administration
doling out favors to various industries to exempt them from other Clean Water Act
requirements instead of protecting the public interest. This includes the oil industry,
which has been given exceptions from storm water regulations that apply to almost
every other industrial activity in the country and with which EPA is now engaged
in private back room discussions regarding the Acts application to preventing oil
spills into tributaries and other waters.
Earthjustice encourages the Committee to dissuade EPA from reversing thirty
years of efforts undertaken by this country to implement the Clean Water Act and
restore and preserve the integrity of the Nations waters. The American public feels
very strongly about the health of their rivers, streams, lakes and shorelines. Neither
a weak TMDL program nor questionable legal positions that simply invite litigation
will cleanup or protect the Nations waters; nor will these policies provide any cer-
tainty to businesses that must comply with clean water laws. If the agencys admin-
istrators continue down these and other paths aimed at weakening the Clean Water
Act and its implementation, they ultimately will not be able to convince the Amer-
ican public that EPA is serving the publics rather than corporate interests.
WERE EPA TO PROMULGATE ITS DRAFT TMDL RULE THE RESULTS WOULD BE DEV-
ASTATING TO CLEAN-UP EFFORTS AROUND THE COUNTRY AND UNDERMINE CONGRESS
CLEAN WATER ACT MANDATES
Of particular concern is the Bush Administrations draft plan to drastically amend

the regulations that currently guide the development of water quality protection
plans known as Total Maximum Daily Loads so-called TMDLs. For the last 18
months, the EPA has been working on a proposal to rewrite the rules that imple-
ment the TMDL programrules that were put in place by the Reagan and previous
Bush Administrations. A draft of their rewrite of the rules was made available to
the public earlier this year. The draft is currently being considered by the Office
of Management and Budget under informal review.
This proposal, if promulgated by the administration, would significantly weaken
if not completely derailone of the Clean Water Acts most important programs.
When enacted in 1972, the Clean Water Act required municipal and industrial
dischargers to comply with two levels of pollution control treatment technology back
in the late 1970s and 1980s. Industry was required to comply with best practicable
treatment technology (BPT) by July 1, 1977. Cities were required to apply sec-
ondary treatment to their sewage by that same date. Congress recognized from the
start that in many cases, those initial technology requirements were not going to
be sufficient to implement water quality standards in many waterbodies throughout
the country. Water quality standards are set by the States and specify how clean
a waterbody needs to be in order to be usable, for example, for swimming, aquatic
habitat, or as a drinking water source. So Congress created the TMDL requirement
105
to supplement the BPT and secondary requirements. In short, this section of the
lawSection 303(d)requires States to identify all waters where BPT and/or sec-
ondary treatmentthe lowest pollution control technology requirementsare not by
themselves sufficient to implement water quality standards. For each of those iden-
tified waters, the States, and if they fail to do so, EPA, must prepare a TMDL.
A TMDL is just what it says, a total, maximum, daily load of a given pollutant
that assures implementation of all water quality standards applicable to that pollut-
ant. The current regulations define a TMDL as the sum of the individual WLAs
[waste load allocations] for point sources and LAs [load allocations] for nonpoint
sources and natural background. 40 C.F.R. 130.2(i). Together, the waste load and
load allocations add up to a water bodys loading capacity which is defined as
[t]he greatest amount of loading that a water can receive without violating water
quality standards. 40 C.F.R. 130.2(e). That safe level of pollutant loading, assum-
ing there is any safe level, is then allocated to each of the sources discharging that
pollutant and, using the NPDES permitting program and other pollution control
tools established by the Act or State laws, those allocations are implemented in
order to assure attainment of the TMDL.
In 1972, Congress envisioned TMDLs as an integral component of the Acts com-
prehensive regulatory scheme, applied early on in the Acts lifespan to any waters
that were not fully protected or would not be fully protected by the application of
BPT and/or secondary treatment. Wherever BPT and/or secondary treatment, by
themselves, could not assure the implementation of all water quality standards, a
waterbody had to be listed and a TMDL prepared and implemented.
That is still the law today. Historically, however, instead of implementing Con-
gress clear and logical vision for ensuring all waters were safe for fishing, swim-
ming and other uses, EPA has served as a barrier to implementing the TMDL pro-
gram. EPA wrote and finalized regulations for the program in 1985 and amended
them in 1992, but for over two decades EPA and the States literally did nothing
to make the program work as a tool to reduce water pollution, instead, letting it
languish on the books. During that time, waters that would have been protected or
cleaned up at much less expense by an early application of the TMDL program were
instead allowed to get dirtier and dirtier.
The 1992 EPA regulations were an attempt to get the TMDL program on track.
Although flawed, and only after encouragement by numerous citizen enforcement ef-
forts and provision of additional funding from Congress and individual States, EPA
has finally begun to make progress implementing those 1992 regulations. The num-
ber of TMDLs approved or established annually has steadily increased in the last
4 years, jumping from 500 in 1999 to nearly 3,000 in 2002. In 2001 and 2002 com-
bined, more than 5,000 TMDLs were approved or established under the current
TMDL rule. Granted, the quality of those TMDLs may vary substantially at this
point. But theyre in place and, with improvements that can be made under existing
legal authority, these TMDLs should over time provide an effective framework to
address both polluted waters and waters threatened by pollution, achieving the ra-
tional and comprehensive pollution control program that Congress envisioned to
clean up dirty waters and protect our rivers, lakes, and shorelines for generations
to come. Progress is certainly being made. However, much work remains to be done.
The adverse effects of EPAs years of neglect of this critical component of the
Clean Water Act are still being felt throughout the country. Lists of impaired waters
continue to expandirrefutable testimony of the need for EPA and the States to ag-
gressively implement the TMDL program. For example, California started with a
list of 18 impaired waters in 197879. That list has steadily grown to 28 waters by
1986, 77 waters in 1988, 245 impaired waters by 1991, 276 in 1992, 388 waters by
1996, 509 waters by 1998 and most recently a new high of 684 impaired waters.
In short, pollution problems are growing in the absence of TMDLs. This fact is con-
firmed by the most recent National Water Quality Inventory, which showsfor the
first time in many yearsthat overall water quality of the Nations rivers, lakes,
estuaries and coastal waters is getting worse.
Instead of responding to these water pollution problems by doubling its efforts to
implement the TMDL program, EPAs current managers are considering and per-
haps poised to adopt a proposal that would reverse the progress made to date. The
EPAs proposal would abruptly limit the scope of the TMDL program and, for those
lucky waters where the TMDL program might still apply at all, turn Congress pol-
lution control mechanism into a paper exercise whose only relevance to a
waterbodys water pollution control efforts is to legitimate less stringent controls on
existing discharges without any corresponding pollution reductions by other sources.
That vision of the TMDL programs purpose directly contravenes Congress vision.
I would like to highlight six of the key problems I find in EPAs draft proposal
to rewrite the existing TMDL regulations.
106
EPAS DRAFT RULE ILLEGALLY TRUNCATES THE UNIVERSE OF WATERS CONGRESS
INTENDED TO PROTECT OR CLEAN-UP THROUGH THE IMPLEMENTATION OF TMDLS
First is the use of listing criteria that, if implemented, would illegally and illogi-
cally restrict the use of TMDLs to a relatively small number of waterbodies, ignor-
ing thousands of waters that Congress envisioned would be protected and/or cleaned
up through a TMDL. Listing decisions are critically important because whether a
water is listed and scheduled to get a TMDL is the gateway into the entire clean-
up program. If a water is not listed (or is on some list other than the list of waters
requiring a TMDL) then that water will not benefit from the program. Therefore,
it is important for the Committee to understand the ways in which EPA is trying
to close the gateway into the TMDL program to thousands of waters across the
country that Congress required be included in the TMDL program.
EPAs draft rule completely ignores the express terms of Section 303(d)(1), the re-
quirements put in place by Congress. Under the statute, the only question relevant
to listing a waterbody under section 303(d)(1) is were BPT and secondary treat-
ment sufficient to implement all applicable water quality standards? If a waterbody
is impaired or has ever been impaired since the implementation of BPT and sec-
ondary treatment requirements, the answer to that question is obviously no. If a
waterbody has no point source discharges to which either BPT or secondary applied,
the answer also must be no. It is as simple as that.
In contrast, EPAs draft rule proposes a complicated set of five categories of wa-
ters, only one of which is apparently identified as a list required by Section 303(d).
None of the five categories tracks the listing criteria established by Congress in that
section. Indeed, the criteria identified by EPA to establish the categories, in most
instances, include waters that Congress Section 303(d)(1) criteria mandate includ-
ing on the Section 303(d) list and the preparation of a TMDL.
Going through each of the categories described in the draft, the draft rule places
in its Category 1 waters those waters that currently are attaining all designated
uses. Although some of these waters may not have to be listed for a TMDL under
the statute, such currently clean waters do need to be listed and a TMDL prepared
if attainment with the standards is not the result of BPT or secondary treatment.
The draft rules Category 2 waters include those waters where only some designated
uses are attained but there is insufficient data to determine whether other uses are
being achieved. According to the statute, all of these waters must be listed because,
especially at this late date almost 30 years after implementation of BPT and sec-
ondary treatment requirements, it is certain that BPT and secondary treatment
were not stringent enough to implement these waters standards. EPAs Category
3 waters include those waters where there is insufficient information to determine
whether or not compliance with standards is achieved. These also must be listed,
again, to the extent that BPT and/or secondary treatment were not sufficient to im-
plement standards. Category 4A is a list of those waters, impaired or otherwise, for
which TMDLs already have been established. Congress did not intend for waters to
be removed from the 303(d) list just because a TMDL was prepared. Obviously, they
may no longer need a TMDL but they must remain on the list in order to implement
Section 303(d)(4) and to assure the TMDL remains intact and up to date into the
future. Indeed, Section 303(d)(4) invokes the antidegradation policy [f]or waters
identified under paragraph [303(d)(1)(A)] where the quality of such waters equals
or exceeds levels necessary to protect the designated use for such waters or required
by applicable water quality standards, underscoring the fact that the criteria for
listing waters under section 303(d)(1)(A) encompasses waters that are not yet im-
paired and, hopefully, will never be impaired.
Perhaps of greatest concern is Category 4B waters where it is known that stand-
ards are not being attained but other enforceable pollutant control mechanisms
are alleged to be in place and purportedly designed to attain water quality stand-
ards within a reasonable timeframe. These waters by definition must be listed
under 303(d)(1)(A) and TMDLs completed for them. EPA has no authority to sub-
stitute other pollutant control mechanisms as listing and TMDL criteria to replace
those selected by Congress, i.e. BPT and secondary treatment. The agency cannot
keep a water off the 303(d) list because standards were achieved by implementation
of best available technology. Nor can EPA refuse to list waters where a non-TMDL
based water quality-based effluent limit achieved standards. And the agency cer-
tainly cannot eliminate waters from States 303(d) lists based on some future,
unnamed trading programs or other untested programs.
The agencys Category 4C waters include impaired waters where the impairment
is not caused by a pollutant. Although its difficult to imagine what impaired waters
would fit this description, this category is apparently an effort by the agency to
eliminate waters from the list that are impaired by low flows or otherwise sensitized
107
to pollution discharges by disturbances other than pollution discharges. I cannot
imagine a source of impairment that does not involve either point or nonpoint
sources of pollution. Even streamside tree canopy removal that reduces shade along
a stream resulting in temperature pollution amounts to nonpoint source pollution
and can be readily addressed through a TMDL.
The last and final categoryCategory 5is the only section 303(d) list proposed
by EPAs draft rule. The list is limited to waters that are currently impaired and
that do not fit into any of the other categories. Nothing in the statute suggests that
such a truncated list satisfies the conditions established by Congress.
Notably, EPA rejects any category, whether under section 303(d) or not, for
threatened waters. Again, by definition, waters whose standards are threatened
with exceedances are directly addressed by Congress listing criteria for Section
303(d). If a waterbodys standards are threatened now in 2003, then it is clear that
the pollution control technology applied back in the late 1970s does not have much
chance of assuring the implementation of the threatened standards today. Likewise,
ignoring threatened waters will in almost every case violate the Clean Water Acts
antidegradation requirements. EPA, apparently aware of this contradiction, simply
proposes to eliminate consideration of the Federal and State antidegradation stand-
ards when implementing section 303(d), a cynical and underhanded proposal ad-
dressed further below.
To summarize the listing concerns, it is clear that the draft proposal bears little
if any relationship to Congress Section 303(d) criteria. EPAs truncated list will pre-
vent thousands of critical but currently clean waterbodies from being protected by
the TMDL program, assuring a continuous supply of new impaired waters for future
agencies to have to contend with cleaning up. In a very real way, by truncating the
list, EPA also may very well undermine the States ability to establish their own
priorities for establishing TMDLs by not allowing them, for example, to put a crit-
ical but threatened water supply on the list and perhaps ahead of an impaired but
less important water.
EPAS DRAFT RULE WILL RESULT IN INEFFECTIVE TMDLS THAT WILL UNDERMINE ANY
POTENTIAL FOR EFFECTIVE POLLUTION TRADING SCHEMES
The other five concerns address aspects of EPAs proposals to rewrite the rules
that, if implemented, would render TMDLs ineffective at protecting water quality.
The first of these is the untenable assertion by EPA that the agency is not re-
quired to review and approve the States allocation of a TMDL for a given pollutant
to the various sources discharging that pollutant as part of EPAs obligation to ap-
prove or disapprove TMDLs. That approach entirely undermines the agencys duty,
assigned to it by Congress, to review States TMDLs and to make sure that they
are established at a level necessary to implement the applicable water quality
standards. EPA must review the load established by each State. 33 U.S.C.
1313(d)(2). That established load to be reviewed by EPA shall be established at
a level necessary to implement the applicable water quality standards with seasonal
variations and a margin of safety which takes into account lack of knowledge con-
cerning the relationship between effluent limitations and water quality. 33 U.S.C.
1313(d)(1)(C). Hence, EPA is obliged to review any TMDL based on that standard
and based on resulting effluent limitations. As a rational and scientific matter, EPA
cannot make a finding that a TMDL will implement standards throughout a water-
shed without reviewing and approving the allocations. In addition, allocations are
expressly referenced in the Act. See section 303(d)(4), 33 U.S.C. 1313(d)(4). EPA
is wrong that allocations are not required by section 303(d).
Second is a related problem, which is the general theme throughout EPAs pro-
posalmoving away from allocating pollution reductions needed to implement a
TMDL to specific, individual sources and, instead, allocating larger portions of a
TMDL to many sources, albeit perhaps similar in nature. Hence, the proposal in-
cludes the concept of establishing gross allocations of a TMDL to entire categories
of dischargers throughout a watershed, including, for example, all logging, all farm-
ing, all grazing, all non-NPDES storm water, all marinas, all dredging and all dams.
Similarly, the proposal floats the idea of a gross allocation for all future growth
within a watershed, regardless of location or localized pollution impacts or similarity
of pollution sources. Simply allocating a single load to, for example, all logging dis-
chargers in a watershed will not implement standards throughout that watershed.
Nor would EPA be able to find that a TMDL allocated in such a manner will imple-
ment such standards throughout the watershed. The agency will have no ability to
determine where the categorical logging load will be discharged and hence whether
the upstream waters will be protected. I also would think that the agency would
be concerned about not requiring a TMDL to be allocated to specific individual
108
sources if it hopes to ever create functional pollution trading opportunities from this
program. Lump sum allocations as described in the draft will doom any such trading
schemes from the start because nobody will know how much loading (i.e. how many
pollution shares) they control and must reduce.
A third problem stemming from EPAs incorrect assertion that the agency does
not have to review a States allocations in approving a TMDL is EPAs proposal that
States be allowed to reallocate its TMDL after EPA approves it. The notion that
EPA believes it can review a TMDL and determine that it will assure implementa-
tion of water quality standards without reviewing the TMDLs allocations in the
first place and allowing a State agency to alter those allocations however it wants
is irrational and a complete abandonment of science as well as the law.
Fourth, the draft proposal allows existing NPDES dischargers to increase their
loadings of pollutants that are still impairing a waterbody immediately after a
TMDL is drafted, even when there have been no reductions whatsoever from other
sources and no guarantee that such reductions will ever occur. That, of course, is
a recipe for further impairment, not clean-up. Such a TMDL scheme would not im-
plement applicable water quality standards. Instead, for a possibly indefinite
amount of time, it would simply provide an unwarranted excuse for existing point
source discharges to expand their contribution to a waterbodys impairment or deg-
radation while absolutely no pollution reductions are realized from nonpoint or
other sources. In order for Congress goals for the Act and the TMDL program to
be realized, it is clear that existing point source pollution must be further controlled
as long as no progress is made in reducing pollution from nonpoint sources into a
waterbody that is impaired or being degraded.
The fifth and last concern I will discuss today is EPAs suggestion that the agency
can simply ignore the Federal and state antidegradation policies from consideration
when establishing or reviewing TMDLs. EPAs contemplated slashing of that core
principle, a principle embodied by every word of the Clean Water Act, strikes at the
heart of Congress intent in creating the TMDL program and best exemplifies EPAs
underhanded effort to distort the purpose of the TMDL program from a regulatory
mandate to protect and restore water quality to a regulatory shield providing dis-
chargers cover while they continue to pollute and degrade the Nations waters.
Every State in the country is required to have an antidegradation policy established
as one of the three mandated components of its water quality standards. The entire
scheme of the Clean Water Act hinges on the concept that waters become less pol-
luted until all uses are fully protected and, indeed, all pollution is eliminated. By
thinking about removing antidegradation requirements from the ambit of the TMDL
program, EPA sentences the nations waters to further spoliation and sentences the
States and the American public to ever expanding lists of impaired waters.
This is not an exhaustive list of concerns. Other significant problems exist in the
EPA draft, including the agencys refusal to acknowledge the daily loads required
by Congress; the excessive length of schedules proposed for establishing the trun-
cated list of TMDLs; the proposal to allow less frequent 305(b) reports despite the
Acts mandate that such reports be submitted by the State every 2 years and, hence,
the fictional assertion that allowing integrated 303(d) and 305(b) reports every 4
years will amount to significant cost savings by the States; the questionable reading
of the thermal list required by section 303(d)(1)(B); the incorrect notion that EPA
or the States have authority to delist waters under section 303(d), and; last but per-
haps not least, the bizarre notion that natural background could include pesticides
in sediments are all significant concerns. The above concerns will be further ad-
dressed by the environmental community should EPAs proposal ever see the light
of day.
Taken together, the proposals in EPAs rewrite of the TMDL program will vir-
tually guarantee that this important Clean Water Act program will be rendered en-
tirely ineffective at protecting and cleaning up the Nations waters. This rewrite of
the rules will condemn the over 215 million Americans who currently live within
10 miles of a polluted waterbody to a least another generation of unsafe waters and
will add many more Americans around the country to that group as their commu-
nitys waters get more polluted from point and nonpoint sources. Therefore, we urge
the Committee to encourage EPA to withdraw the draft proposal before expending
its limited resources on a blatantly illegal proposal.
EPAS ARBITRARY STORM WATER EXEMPTION FOR THE OIL AND GAS INDUSTRY
While working on rulemaking that would dismantle the TMDL program, EPA also
has been busy doling out favors in the form of special exemptions to Clean Water
Act requirements for certain industries, including the oil and gas industry. In par-
ticular, I would like to state Earthjustices objection to the agencys rulemaking this
109
past March delaying for at least 2 years the Phase II storm water permitting rules
that otherwise would have gone into effect on March 10, 2003 for construction ac-
tivities by the oil and gas industry at their exploration and productionsites. EPAs
special exemption for the oil and gas industry was based on undocumented and last
minute claims by the industrys lobbyists that somehow that industries construction
activities were qualitatively different from every other construction activity in the
country. Whether a 2.4 acre or 105,000 square foot site is cleared and graded by
a housing developer, an office building developer, or an oil and gas drilling operation
does not make the dirt and sediments any less erosive or any less capable of pol-
luting. Who builds a road also will not alter its potential for pollution. Indeed, the
pollution threats from drilling sites go well beyond those posed by sediment dis-
charges and the many dischargers who are now subject to the Phase II regulations.
Storm water from drilling activities contains not only sediments and silts, but also
oil and grease, drilling compounds and other construction related materials. The cu-
mulative threat of 30,000 industrial construction sites cannot be ignored if Congress
mandate that all storm water discharges be controlled through the NPDES program
and the resulting environmental benefits are to ever be attained.
Industry argues that oil and gas exploration and production, including pre-drilling
construction activities, are exempt from NPDES permitting pursuant to section
402(l)(2) of the Act, 33 U.S.C. 1342(l)(2). The express language of that section does
not support industrys argument. By its terms, Section 402(l)(2) does not include any
storm water runoff that has either been contaminated by contact with, or do[es]
not come into contact with, any overburden, raw material, intermediate products,
finished product, byproduct, or waste products, located on the site of such oper-
ations. The disturbed soils around drilling wells are both overburden and waste
products. See Sen. Rep. No. 9950 at 44 (May 14, 1985) ([e]xamples of contamina-
tion include suspended or dissolved solids from . . . disturbed soils). Hence, any
storm water contacting the disturbed areas of a drilling site, if discharged, is not
exempt from the Acts permitting requirements.
The legislative history makes even clearer the limited scope of the exemption set
forth at Section 402(l)(2). The final conference report for the Water Quality Act of
1987 makes it clear that Section 402(l)(2) provides that permits are not required
where stormwater runoff is diverted around mining operations or oil and gas oper-
ations and does not come in contact with overburden, raw material, product, or proc-
ess wastes. In addition, where stormwater runoff is not contaminated by contact
with such materials. . . . H.Rep. Conf. Rep. No. 991004 at p. 152 (Oct. 15, 1986).
See also H.R. Rep. No. 99189 at p. 37 (July 2, 1985) (The subsection was devel-
oped by the Committee in recognition of the fact that there are numerous situations
in the mining and oil and gas industries where stormwater is channeled around
plants and operations through a series of ditches and similar devices in order to pre-
vent pollution contamination of the stormwater).
Nothing in EPAs administrative record, including the numerous industry com-
ments, suggests that storm water is routed around such drilling sites. Nor do any
of those comments suggest that storm water falling on or flowing through these
sites are then free of sediment and other pollutants. Indeed, the opposite appears
to be true. See Letter from Warren County Conservation District (Jan. 23, 2003)
(EPA Docket Item OW200200680023); Letter from California State Water Re-
sources Control Board (Jan. 31, 2003) (EPA Docket Item OW200200680082).
In California, I had the opportunity to work on the implementation of the Phase
I industrial and construction storm water permit and have been involved in the past
in numerous actions enforcing those general permits. Compliance with the storm
water requirements is not complicated, relying in large part on the implementation
of best management practices, many of which have been available for years. The oil
and gas industry need merely pick the appropriate measures off of the shelf, articu-
late those in a storm water management plan that, in many cases, would be easily
transferable to nearby drilling sites, and monitor to assure compliance. This is no
more than what is expected of much smaller businesses who have been imple-
menting the storm water requirement for the past decade, including thousands of
mom-and-pop businesses with much fewer resources than the oil and gas industry.
Ironically, EPAs abdication of its duties may result in less certainty for the oil
and gas industry. EPAs duty to establish regulations is separate and distinct from
the Acts mandate that all storm water point sources obtain NPDES permits. Right
now, it is certain that thousands of oil and gas drilling sites are in violation of the
Act by discharging pollutants without a permit. Rather than assure an orderly proc-
ess for issuing permits to that industrial sector, as intended by Congress, EPA has
simply ceded it to private citizens and the courts to enforce the law. I would think
the oil and gas industry would prefer the certainty of EPA regulations to the uncer-
110
tainty of an illegal interpretation of the Clean Water Act that exposes them to law-
suits.
EPAS BACKROOM NEGOTIATION REGARDING LIMITING THE WATERS OF THE UNITED
STATES PROTECTED BY THE CLEAN WATER ACT
I also want to highlight a strong concern regarding legal maneuverings that ap-
pear to be occurring in the context of litigation filed by the American Petroleum In-
stitute and other oil industry representatives challenging rules promulgated by EPA
in July 2002 addressing oil spill prevention and response requirements for busi-
nesses that store large quantities of oil (greater than 1320 gallons). These rules are
generally referred to as the Spill Prevention Control and Countermeasures (SPCC)
rules. As part of that rulemaking, EPA updated and clarified the definition of wa-
ters of the United States included in the SPCC rules to be consistent with the regu-
latory definitions of waters of the United States included elsewhere in the Clean
Water Act regulations. The definition EPA adopted for the SPCC rule is essentially
the same definition already promulgated throughout the Clean Water Act regula-
tions, including at 40 C.F.R. 122.2, 230.3(s) and 33 C.F.R. 328.3(a).
The main thrust of the oil industrys challenge is an allegation that EPAs defini-
tion of waters of the United States goes beyond those waters protected by the Clean
Water Act. Industry argues that the requirements of the Clean Water Act are lim-
ited to discharges of pollutants to traditionally navigable waters and wetlands adja-
cent to such traditionally navigable waters. In essence, the oil industry would like
to exempt tens of thousands of facilities from the SPCC rules if, for example, any
potential oil spill would flow to a small creek or ephemeral stream, despite those
waters clear connections to downstream waters and the potentially devastating ef-
fects of an oil spill, especially one beginning in the headwaters of a watershed and
adversely affecting all downstream waters.
Industrys primary basis for its assertion is an exaggerated reading of the Su-
preme Courts 2001 decision in Solid Waste Agency of Northern Cook County v.
United States Army Corps of Engineers, the so-called SWANCC decision. Indus-
trys expansive view of SWANCC is inconsistent with that decisions express terms.
SWANCC simply ruled that the Corps could not use the Migratory Bird Rule
a portion of a 1986 Federal Register preambleas a sole basis to regulate waters
used by migratory birds. The decision does not suggest that intrastate waters that
are used in or affected by interstate commerce, for example, by a group of anglers
or a power plant feeding electricity to a multi-State grid that uses a lakes waters
for cooling, would not be subject to the Clean Water Act.
Industrys wish that SWANCC was a more expansive ruling also is inconsistent
with over two dozen Federal court briefs filed on behalf of EPA and the Army Corps
by the Department of Justice and emphasizing the limited ruling in SWANCC and
the necessity of EPAs existing definition of water of the United States in order to
implement the Clean Water Act consistent with Congress mandate. Last, virtually
every court that has considered the scope of the holding in SWANCC has ruled that
the holding is limited to the facts and express ruling in that case and has no effect
on EPAs or the Corps existing regulatory definitions.
According to the industry plaintiffs, settlement discussions are ongoing on the ap-
peals of the SPCC rule. NRDC and the Sierra Club, represented by Earthjustice,
have sought to intervene in the case. While awaiting the courts ruling on that re-
quest, the groups have asked to participate in the settlement discussions but this
request has been denied. We are very concerned that the discussions going on now
behind closed doors will lead to some tacit acknowledgement by EPA that industrys
strained reading of SWANCC has some merit and that EPA may withdraw regula-
tions embodying a definition that the agency has stood by for almost three decades.
I hope that EPA will vigorously defend the broad jurisdiction of the Clean Water
Act established by Congress, and not cave to the wishes of the oil industry to create
another special standard for that industry. EPA should not resort to a cowardly re-
treat from decades of clear, regulatory direction assuring broad coverage of the Act
and accompanying certainty to businesses by hiding its complicity with the oil in-
dustry to undermine one of our countrys most important environmental laws behind
closed-door settlement negotiations. If the agency retreats from its long-established
definition of waters of the United States this would, at best, set the agency and the
regulated community on a path of uncertainty that would be easily avoided if EPA
were to simply defend its long-standing definition of waters of the United States.
CONCLUSION
It is important to keep in mind that EPAs above-described activities are a few

of many efforts by the agency that do not bode well for the Clean Water Act and
111
the future health of Americas rivers, lakes, streams, wetlands, and coastal waters.
The above proposals are the most recent examples of an expanding pattern by the
agency to cut back the protections of the Clean Water Act. The thousands of pol-
luted lakes, rivers, and ocean waters around the country will not be cleaned by EPA
walking away from the problems, and the States taking the agencys cue and fol-
lowing close behind. The gains that have been made in protecting many of the coun-
trys waters will be lost if EPA continues on its current path. We are the children
left with cleaning up the rivers polluted by our parents and grandparents genera-
tions. If we are to avoid leaving our sons and daughters with a lot more polluted
rivers and lakes, EPA must abandon its efforts to dismantle the current TMDL pro-
gram, take more aggressive steps to implement the current regulations, and assure
that every industry, including the oil and gas industry, abide by Congress clear di-
rectives to protect and cleanup our Nations waters.
I hope my comments assist the Committee in its oversight of EPAs current imple-
mentation of the Clean Water Act. Thank you again for this opportunity to appear
before the Committee.
RESPONSES OF MICHAEL R. LOZEAU TO ADDITIONAL QUESTIONS FROM

SENATOR JEFFORDS
Question 1. We heard in testimony that the EPAs proposed rewrite of the TMDL
rules could undermine effective trading. This is interesting to me because trading
is something that the EPA testified they support. Can you describe how the TMDL
proposal undermines trading among pollution sources?
Response. EPAs proposed rewrite of the TMDL rules will undermine the pros-
pects for water pollution trading in at least seven ways:
i. The draft rules built-in vagaries and conscious lack of clarity provides no
incentive for pollution sources to contribute resources to any given TMDL and
any accompanying trading proposal. As I stated in my testimony, EPAs pro-
posal would allow for only gross allocations of responsibility for sources con-
tributions of pollutants to a waterbody. Not only is such a scheme illegal, in
that EPA will be unable to find that a TMDL allocated in such a manner will
implement water quality standards throughout the watershed, but these lump
sum allocations will doom trading schemes because pollution sources will not
know how much loading they must reduce. See Response #5 below. If these
sources are not identified as the source of a pollution problem, they will have
no incentive to participate in any trade. Following the existing law, which re-
quires specific allocations, would encourage buy-in and resource contributions
from pollution sources to formulate trading proposals that could subsidize the
states generally cash-starved water quality programs.
ii. Similarly, by allowing gross allotments, the proposed TMDL rule fails to
identify a watersheds market participants. A TMDL rule that defined the mar-
ketplace in which trades would occur could establish one of the basic compo-
nents of a trading scheme.
iii. By allowing for gross allotments of pollution responsibility within a
TMDL, the proposed rule fails to provide any science-based scheme for creating
and distributing pollution shares. On the other hand, if a TMDL identifies
each individual source and quantifies their individual load, then the shares of
a potential trading program would be self-evident.
iv. Those same gross allotments will preclude EPA from assuring that water
quality standards and beneficial uses throughout a watershed would be imple-
mented by a TMDL. By the same token, EPAs proposed gross allotments would
prevent the agency from procuring and reviewing the information and data nec-
essary to assure that any proposed trading scheme for that watershed would
not cause hot spots within the watershed. This also is true of the proposal that
EPA not review TMDL allocations at all.
v. Obviously, identifying individual sources is a prerequisite to monitoring
their compliance with their allocation. Without provisions for monitoring of indi-
vidual sources and the ability of market participants and others to enforce indi-
vidual pollution allocations, a legitimate and functional trading scheme amongst
individual sources will not come to pass.
vi. By allowing the states and local agencies to alter their general allocations
without review by EPA would make those allocations and their resulting mar-
ket values less certain and less capable of prediction, thereby discouraging par-
ticipation by potential traders.
vii. A TMDL rule that purported to encourage trading also would not include
any allocations for future growth or other new pollution sources. Trading, if it
112
were to have any chance of proving effective at all, would require a firm total
maximum daily load that was fully protective of beneficial uses and standards
throughout a watershed. It also would have to include very specific allocations
to existing individual sources, not based on their current pollution levels, but
on levels necessary to comply with the TMDL. No allocations would be given
to future sources or increased pollution from existing sources. Those new quan-
tities of pollution would only be allowed if the source were to buy up existing
allocations in an amount greater than the proposed increase. The offset ratio
would presumably be determined by the schedule for achieving the TMDL and
compliance with standards.
Question 2. Why is the SPCC rule itself important, aside from the interactions
with the SWANCC decision? In other words, what protections will be lost while im-
plementation of the rule is delayed for the oil and gas industry?
Response. The SPCC Rule is intended to prevent oil discharges from reaching
navigable waters of the United States or adjoining shorelines. It applies to owners
or operators of facilities that drill, produce, gather, store, use, process, refine, trans-
fer, distribute, or consume oil and oil products. The SPCC rule requires facilities
that store more than 1,320 gallons of oil to prepare a spill prevention control and
countermeasure (SPCC) plan. These plans help prevent oil discharges by such fa-
cilities and mitigate the damage caused by such discharges if and when they occur.
In addition to preparing SPCC plans, the rule requires facilities to institute a num-
ber of preventative measures to reduce the risk of spills. These measures include
tank leak detection, spill overfill protection, pipe external protection, and secondary
containment. A 1995 EPA survey demonstrated that compliance with even one of
these requirements reduces both the number of spills and the amount of oil that
migrates outside of a facilitys boundaries. 62 Fed. Reg. 63817/2 (1997).
EPA amended the SPCC rule in July 2002. The amendments generally clarify the
language and organization of the rule. The July 2002 Rule confirmed the broad ap-
plicability of these requirements to all navigable watersi.e., waters of the United
States. The final rule also requires a number of improvements in the plans them-
selves. For instance, it requires that all SPCC plans be reviewed and certified by
a professional engineer, that facilities evaluate potential for brittle-fracture of
aboveground containers, and that all buried piping use a protective wrapping and
coating.
Postponing the compliance date for the new rule delays implementation of these
improvements in the SPCC program, thereby increasing the risk of oil spills from
these facilities. According to EPA, one gallon of oil can contaminate one million gal-
lons of water. There are approximately 24,000 oil spills each year in the United
States, with more than half of those spills occurring inland where they contaminate
streams, rivers, and wetlands.
Question 3. In your comments, you mentioned that the real effect of the Adminis-
trations TMDL regulation on the water quality program would be to return to pre-
1972 TMDL protections. Can you provide more detail on this point?
Response. Prior to the 1972 amendments that created the modern Federal Water
Pollution Control Act, the national water quality program relied on the states to di-
rectly enforce their water quality standards against individual discharges. As is em-
phasized in the FWPCAs legislative history, those efforts proved ineffective and
spurred the 1972 amendments focus on establishing effluent limitations in permits
as a means of implementing the states water quality standards. TMDLs were part
of that concept, filling in the gaps left by the point source permitting program to
identify and quantify all pollution sources to a listed water body and, although not
always requiring a NPDES permit to address each of those sources (i.e. the nonpoint
sources), at least quantifying each sources maximum load of pollutants that they
could release to a waterbody. That load limit could then be implemented either
through the NPDES program or the various nonpoint source programs set forth by
the Act.
By rewriting the existing TMDL rule to say that states do not have to identify
specific pollution sources and can allocate pollution to numerous sources in one
lump sum, EPA essentially gives up on the meaningful role for TMDLs con-
templated by Congress and attempts to turn them into the same unenforceable, gen-
eral standards that were proven to be ineffective in the past. In addition, because
the TMDLs, even if allocated on these gross bases, will in turn be relied upon to
change existing limitations that currently apply to point sources in listed
waterbodies, I am concerned that inaccurate TMDLs setting forth gross allocations
that cannot be ground-truthed will result in a weakening of effluent limitations for
the relevant point sources. Meaningless gross allocations for many pollution sources
coupled with less stringent effluent limitations for point sources looks and feels a
113
lot like the disavowed programs from prior to 1972programs described by the late
Senator Muskie, upon introducing the bill that was to become the Clean Water Act,
as inadequate in every vital aspect. 117 Cong. Rec. 17397 (daily ed. Nov. 2, 1971).
Question 4. In Mr. Kouplens testimony, he states, Section 303(d) provides no au-
thority for the preparation or establishment of an implementation plan. It merely
envisioned the translation of wasteload allocations into water quality based effluent
limitations for point sources. Can you comment on his interpretation of section
303(d)?
Response. To the extent Mr. Kouplens testimony suggests that the only meaning-
ful limits resulting from a TMDL are the water quality-based effluent limitations
for point sources, he clearly is wrong. TMDLs also are required to address nonpoint
sources of pollution. TMDLs must be established at a level necessary to implement
the applicable water quality standards with seasonal variations and a margin of
safety. . . . 33 U.S.C. 1313(d)(1)(C). Water quality standards must be imple-
mented throughout a listed waterbody, not merely at some arbitrary downstream
point or in the larger order streams within a watershed. Upstream waters and trib-
utaries must comply with standards. That is the standard that EPA must apply in
reviewing and approving or disapproving a TMDL.
So, although it is true that Section 303(d) does not call for something called an
implementation plan, it does require a TMDL to include a specific allocation of
loadings for each specific pollution source in a waterbody in order to implement
the applicable water quality standards. Without individual, source-specific alloca-
tions, it is impossible for either a state or EPA to find that the TMDL is estab-
lished at a level necessary to implement the applicable water quality standards.
The sole purpose of a TMDL, its very reason for being, is to implement water qual-
ity standards. Given the objective, water quality driven criteria that must be used
to develop a TMDL, any need for an additional implementation plan is hardly nec-
essary. If completed with the level of detail necessary to achieve Congress criteria,
implementing a TMDLs allocations should be a relatively simple matter of adopting
the point source allocations into existing NPDES permits and adopting the nonpoint
source allocations into the existing nonpoint source management plans.
Question 5. Can you comment on Mr. Kouplens analysis of the impacts of the
Pronsolino case that he included in his written testimony?
Response. I do not believe the Pronsolino decision assists Mr. Kouplens analysis
asserting that EPA may only set an overall goal but how that overall goal will be
achieved is reserved for the States. If I am correct, the analysis Senator Jeffords
question is referring to in Mr. Kouplens testimony concludes by saying allocation
decisions are the essence of implementation planning that has been strictly reserved
for the states. Mr. Kouplens assertion is not based in the statutory language or
common sense. As described above, how a TMDL is allocated to specific pollution
sources is an elementary component and cannot be separated from the TMDL itself
if the state and EPA are claiming to establish or approve the TMDLs based on the
express criteria of Congress.
Mr. Kouplens assertion that the formal TMDL to be reviewed and approved by
EPA consists of a single number allowing for one gross loading figure of a pollutant
into some large waterbody would not be indicative of a loading established at a level
necessary to implement the applicable water quality standards. A TMDL cannot be
established in any realistic sense except as the sum of its component allocations
and, without knowing where and how much a TMDLs allocations occur, no agen-
cyno objective scientistcan say that the TMDL is established at a protective
level throughout that waterbody. In other words, Section 303(d) mandates that EPA
review allocations in order to assure that a TMDL is at a level necessary to imple-
ment standards in every part of the waterbody, not just the one downstream point
where the gross load could theoretically be measured.
Question 6. In Mr. Fullers testimony, he states that he believes that Section
402(l)(2) was intended to exempt all oil and gas activities from all storm water per-
mit requirements. In reviewing the legislation history on this issue, I believe that
his interpretation is incorrect. Specifically, the statute lists three main criteria to
determine if this provision applies to a particular discharge:
First, the discharge must be stormwater runoff from mining operations or oil
and gas exploration, production, processing, or treatment operations or transmission
facilities. . . .
Second, the flow must be composed entirely of flows which are from conveyance
or systems of conveyances (including but not limited to pipes, conduits, ditches, and
channels) used for collecting and conveying precipitation runoff. . .
114
Third, the flow must be not contaminated by contact with, or do not come into
contact with, any overburden, raw material, intermediate products, finished product,
byproduct or waste products located on the site of such operations. Section 402(1)
clearly applies only to particular types of discharges from particular types of sys-
tems. It does not provide authority for a blanket exemption to the Clean Water Act
NPDES permitting requirements. A number of questions arise with regard to the
application of Section 402(l) (2) to the phase I and phase II programs. What is the
difference between flows from conveyances or systems of conveyances and the dis-
charges resulting from a construction project? Are flows from oil and gas construc-
tion sites uncontaminated as envisioned by section 402(l)(2)?
Response. In short, it is clear that Section 402(l)(2) does not exempt all oil and
gas activities from the NPDES permitting program as asserted by Mr. Fuller. There
is a distinction between a construction site and subsequently constructed convey-
ances. And disturbed soils and other pollutants washed by storm water from con-
struction sites associated with oil and gas exploration are contaminated discharges.
If we are talking about grading and preparing a site for construction activities,
in most instances, those sites will be devoid of any conveyances or systems of con-
veyances. Without such conveyances, the exemption is not triggered. Even if there
were some temporary conveyance systems set up to collect rainwater from the con-
struction area, those conveyances, by definition, would not be conveying storm water
around the construction area and its polluting materials but from it. If those dis-
charges include pollutants, they are not exempted pursuant to section 402(l)(2). In
addition, Congress anticipated disturbed soils, such as are encountered at any con-
struction site, to be one type of pollutant that would preclude the section 402(l)(2)
exemption. See Sen. Rep. No. 9950, pp. 4445 (May 15, 1985) (Examples of con-
tamination include heavy metals or suspended or dissolved solids from process
wastes or disturbed soils, or salts, surfactants, or solvents used or produced in the
oil and gas operations).
Question 7. Please provide your interpretation of the legislative history accom-
panying section 402(l)(2) of the Clean Water Act and its applicability to oil and gas
construction sites, both large and small.
Response. My review of the legislative history leading up to Congress enactment
of Section 402(l)(2) shows that Congress did not specifically address discharges of
pollutants from construction activities in anticipation of drilling an oil and gas well.
Because exemptions from the CWAs permitting program cannot be implied, that
alone is sufficient to show that Congress did not intend to exempt such discharges.
There is support in the legislative history that the section 402(l)(2) exemption is lim-
ited in scope. 131 Cong. Rec. H 19846, 19855 (July 22, 1985) (Statement of Mr.
Breaux) (Section 402(l)(2) a limited stormwater exemption). The main rationale for
the exemption was to avoid discouraging voluntary efforts by the mining and oil and
gas industry to route unpolluted storm water around their operations in order to
prevent it from being contaminated:
The subsection was developed by the Committee in recognition of the fact that
there are numerous situations in the mining and oil and gas industries where
stormwater is channeled around plants and operations through a series of
ditches and similar devices in order to prevent pollution contamination of the
stormwater. Many of these stormwater run-off devices are voluntary means of
pollution control.
See H.R. Rep. No. 99189, p. 37. If there are no storm water conveyances, it is
clear that the exemption is not triggered. See H. Rep. Conf. Rep. No. 991004, p.
150 (Oct. 15, 1986) (To be exempted, such discharges must be composed entirely
of flows of precipitation, runoff from conveyances or systems of conveyances used for
collecting and conveying such water). It also is clear from the history that any run-
off polluted by the oil and gas or mining operations would not qualify for the permit-
ting exemption, though Congress left EPA with some discretion to determine wheth-
er conveyed runoff that does come into contact with overburden, raw material, prod-
uct, or process wastes is contaminated or not. See id. (any stormwater which has
come into contact with any potential pollutant would not be eligible for the
stormwater runoff exemption); see also H. Rep. Conf. Rep. No. 991004, p. 151
(Oct. 15, 1986) (where stormwater runoff is not contaminated by contact with such
materials, as determined by the Administrator, permits are also not required).
In conclusion, it is clear that section 402(l)(2) does not expressly exempt construc-
tion activities at oil and gas or mining sites. The legislative history does not suggest
otherwise. Instead, the legislative history supports a conclusion that, without con-
veyances, as would normally be the case for a grading project, the exemption does
not apply. Moreover, even assuming that the construction phase of a drilling site
115
is not generally outside the scope of section 402(l)(2), EPA has discretion to deter-
mine whether runoff from oil and gas and indeed any construction sites is contami-
nated or not. It would be entirely arbitrary if EPA were to conclude that stormwater
from construction associated with potential oil and gas exploration is not contami-
nated but it is contaminated from every other construction site of one acre or more
anywhere else in the country.
STATEMENT OF LEE FULLER, VICE PRESIDENT, GOVERNMENT RELATIONS FOR THE

INDEPENDENT PETROLEUM ASSOCIATION OF AMERICA (IPAA) ON BEHALF OF THE
ASSOCIATION OF ENERGY SERVICE COMPANIES; THE INTERNATIONAL ASSOCIATION
OF DRILLING CONTRACTORS; THE NATIONAL STRIPPER WELL ASSOCIATION; THE PE-
TROLEUM EQUIPMENT SUPPLIERS ASSOCIATION; THE U.S. OIL & GAS ASSOCIATION;
CALIFORNIA INDEPENDENT PETROLEUM ASSOCIATION; COLORADO OIL & GAS ASSO-
CIATION; EAST TEXAS PRODUCERS & ROYALTY OWNERS ASSOCIATION; EASTERN
KANSAS OIL & GAS ASSOCIATION; FLORIDA INDEPENDENT PETROLEUM ASSOCIA-
TION; ILLINOIS OIL & GAS ASSOCIATION; INDEPENDENT OIL & GAS ASSOCIATION OF
NEW YORK; INDEPENDENT OIL & GAS ASSOCIATION OF PENNSYLVANIA; INDE-
PENDENT OIL & GAS ASSOCIATION OFWEST VIRGINIA; INDEPENDENT OIL PRO-
DUCERS ASSOCIATION TRI-STATE; INDEPENDENT PETROLEUM ASSOCIATION OF
MOUNTAIN STATES; INDEPENDENT PETROLEUM ASSOCIATION OF NEW MEXICO; INDI-
ANA OIL & GAS ASSOCIATION; KANSAS INDEPENDENT OIL & GAS ASSOCIATION;
KENTUCKY OIL & GAS ASSOCIATION; LOUISIANA INDEPENDENT OIL & GAS ASSOCIA-
TION; MICHIGAN OIL & GAS ASSOCIATION; MISSISSIPPI INDEPENDENT PRODUCERS &
ROYALTY ASSOCIATION; MONTANA OIL & GAS ASSOCIATION; NATIONAL ASSOCIATION
OF ROYALTY OWNERS; NEBRASKA INDEPENDENT OIL & GAS ASSOCIATION; NEW
MEXICO OIL & GAS ASSOCIATION; NEW YORK STATE OIL PRODUCERS ASSOCIATION;
OHIO OIL & GAS ASSOCIATION; OKLAHOMA INDEPENDENT PETROLEUM ASSOCIA-
TION; PANHANDLE PRODUCERS & ROYALTY OWNERS ASSOCIATION; PENNSYLVANIA
OIL & GAS ASSOCIATION; PERMIAN BASIN PETROLEUM ASSOCIATION; PETROLEUM
ASSOCIATION OF WYOMING; TENNESSEE OIL & GAS ASSOCIATION; TEXAS ALLIANCE
OF ENERGY PRODUCERS; TEXAS INDEPENDENT PRODUCERS AND ROYALTY OWNERS;
WYOMING INDEPENDENT PRODUCERS ASSOCIATION
Mr. Chairman, members of the committee, I am Lee Fuller, vice president of Gov-
ernment Relations for the Independent Petroleum Association of America (IPAA).
This testimony is submitted on behalf of the IPAA, the Association of Energy Serv-
ice Companies, the International Association of Drilling Contractors (IADC), the Na-
tional Stripper Well Association (NSWA), the Petroleum Equipment Suppliers Asso-
ciation (PESA), the US Oil & Gas Association (USOGA), and 33 cooperating state
and regional oil and gas associations. These organizations represent petroleum and
natural gas producers, the segment of the industry that is affected the most by reg-
ulations that are not cost effective and do not address real environmental risks.
This hearing addresses issues associated with regulations under the Clean Water
Act. This testimony will focus on two specific issues that have significant potential
implications for domestic oil and natural gas producersregulations associated with
the management of stormwater during the construction of oil and natural gas explo-
ration, production, processing, or treatment operations or transmission facilities
(E&P facilities) and expanded regulations for Spill Prevention, Control, and Coun-
termeasure (SPCC) Plans.
Before presenting information on these provisions, it is important to understand
the nature of domestic oil and natural gas exploration and production and the role
of independent producers. Independent producers are companies that explore for
and develop oil and natural gas. Typically, they only operate in these aspects of the
petroleum and natural gas industries. There are approximately 7000 independent
producers who are predominately small businesses employing an average of 12 em-
ployees each. However, they drill approximately 85 percent of the nations oil and
gas wells.
Domestic petroleum and natural gas production has changed over the years, par-
ticularly since the mid1980s. Maturing production areas in the Lower48 states
and the need to respond to shareholder expectations have resulted in major inte-
grated petroleum companies shifting their exploration and production focus toward
the offshore in the United States and into foreign countries. More and more, these
large companies must rely on large producing fields that are found only in frontier
areas. Consequently, the role of independents is increasing in both the Lower48
states and in the near offshore areas. For example, the independents share of
Lower48 states petroleum production has increased from 45 percent in the mid
1980s to over 60 percent by 1995and these states, despite their mature fields, still
116
account for 60 percent of domestic oil production. Similarly, independent producers
account for 75 percent of overall domestic natural gas production. These trends will
continue. The Nation will need a strong independent exploration and production in-
dustry to meet it future needs.
Another significant aspect of domestic productionparticularly in the context of
the effects of regulationsinvolves the critical role of marginal wells. Marginal oil
wells are wells producing no more than 15 barrels per day or producing heavy oil;
marginal natural gas wells are wells producing no more than 90 mcf per day. The
average marginal oil well produces only about 2.2 barrels per day. But, they com-
prise 84 percent of domestic oil wells (over 400,000) and produce over 20 percent
of our domestic oilan amount roughly equal to imports from Saudi Arabia. Nat-
ural gas marginal wells account for about 10 percent of domestic productionor
more than a third of current natural gas imports. Taken together, these marginal
oil and natural gas wells are about 650,000 of the nations 876,000 wells. However,
they are the most susceptible to being shutdown when prices fall or costs increase.
And, once shutdown, they are lost forever. During the low oil prices of 199899 do-
mestic oil production dropped from about 6.5 million barrels per day to less than
6.0 million barrels per day. Most of this loss is attributable to the plugging of mar-
ginal oil wells. Average domestic crude oil production has never exceeded 6.0 million
barrels per day since; in 2002 production averaged 5.817 million barrels per day.
This perspective is significant because the Clean Water Act regulatory issues that
will be addressed in this testimony directly affect the development of new domestic
production and the continuation of existing domestic production.
STORMWATER CONSTRUCTION PERMITTING ISSUES
The 1987 Clean Water Act (CWA) included two stormwater provisions that have
become, through informal interpretation by EPA, intertwined regarding their appli-
cation to oil and natural gas E&P facilities. Section 402(p) directs the Environ-
mental Protection Agency (EPA), in general, to require permits for stormwater dis-
charges from municipal and industrial activities under the National Pollutant Dis-
charge Elimination System (NPDES) permitting program. At the same time, Section
402(l)(2) specifically excludes certain stormwater discharges from this requirement,
including discharges of stormwater runoff from oil and natural gas E&P facilities,
unless the discharge is contaminated by contact with, for example, products, byprod-
ucts, or wastes. As discussed in more detail below, EPA says that section 402(l)(2)
does not to apply to clearing, grading, and excavating activities at E&P facilities,
which EPA considers to be construction activities required to obtain a stormwater
discharge permit, not E&P activities excluded by 402(l)(2).
IPAA believes that EPA has erred in its interpretation of the Clean Water Act
with regard to the relationship between these sections as they apply to oil and nat-
ural gas E&P facilities. Congress spoke directly to the exclusion of stormwater re-
lated to E&P facilities in section 402(l)(2), and this specific statutory exclusion
should control with respect to all activities normally associated with such facilities.
Section 402(p) makes no mention of its applicability to construction activities in gen-
eral, much less of an intent to undercut the specific exemption for E&P facilities
in section 402(l)(2). However, despite this structure, EPA hasthrough a series of
disconnected actionspulled E&P facilities into the stormwater construction permit-
ting program. Following is a summary of these events.
In 1990, EPA promulgated stormwater permitting regulations under Section
402(p). These regulations defined industrial activities to include construction ac-
tivities that disturb five or more acres of land area or are part of a common plan
of development or sale that ultimately will do so. At the same time, EPA promul-
gated regulations exempting stormwater discharges from E&P sites from the
stormwater permit requirement, unless such discharges are contaminated in that
they cause a reportable release of oil or hazardous substance or contribute to a
water quality standard violation. In 1999,EPA issued Phase II stormwater regula-
tions covering construction activities that disturb from 1 to 5 acres or are part of
a common plan that will ultimately do so. Throughout this period, EPAs regulations
exempting uncontaminated stormwater discharges from E&P facilities remained un-
changed. Also during this period, however, EPA issued an internal, non-binding
guidance memorandum interpreting the scope of section 402(l)(2). The memorandum
was issued in December 1992 in response to a question from an enforcement coordi-
nator in one Region. In it, EPA stated that clearing, grading, and other land-dis-
turbing activities at E&P facilities were construction activities, not E&P activities
and, therefore the oil and gas exclusion in section 402(l)(2) did not apply. IPAA be-
lieves that this guidance is inconsistent with the law. However, industrys challenge
117
to EPAs 1992 memorandum was dismissed in 1994because of finality constraints
on the courts authority to review informal agency guidance.
As a matter of law and policy, EPA should evaluate the environmental risks and
regulatory burdens created by its actions. In the case of oil and natural gas E&P
facilities, IPAA does not believe that EPA made a reasonable assessment of either
the risk or the burden. Nowhere in the information that IPAA has reviewed is there
an indication of significant environmental risks associated with oil and natural gas
E&P facility construction. Nor is there any indication that EPA understood the bur-
dens its program would impose. For example, in an October 1999 report on the costs
of the new Phase II requirements there is a revealing footnote, buried in several
hundred pages of background and economic analysis, stating:
Based on public comments received on the propose rule, EPA considered in-
cluding oil and gas explorationsites but, upon further review, determined that
few, if any, such sites actually disturb more than one acre of land.
In reality, most oil and natural gas exploration and productionsites fall within the
one to five acre range. In 2000, a total of 31,732 exploratory and production wells
were drilled over 10,000 in Texas and Oklahoma. To meet future natural gas de-
mand, the National Petroleum Council estimates that the number of natural gas
wells alone needs to increase to approximately 48,000 wells annually. However, in
the EPA cost analysis of the Phase II program, it estimated that the number of con-
struction starts would be approximately 130,000 units. But, none of these units were
oil and gas facilities. Oil and gas facilities alone would increase the number of units
by 25 percent with a third of that total coming from the two states of Texas and
Oklahoma where EPA Region 6 must handle the administrative burdens. Overall,
the ultimate economic consequences of the permit requirement could be staggering,
by one estimate as much as $8 billion annually.
Three things are clear. First, if the current level of drilling activity presented
stormwater runoff problems during construction, it would be well known. Second,
the magnitude of permitting that EPA estimated during the regulatory development
process is significantly understated. Third, because the Agency believed that oil and
gas facilities were not affected, the final regulation is structured to address con-
struction of building facilitieshouses and commercial buildings.
This approach is inappropriate for oil and gas facilities. For example, subdivisions
are properties that are purchased by the developer, go through an extensive design
process, and have a construction period that may be months or years. There is more
opportunity to build time for permitting into the schedule for a commercial or resi-
dential construction project, and more opportunity to respond to permit delays. In
contrast, oil and gas production operations involve the leasing of sub-surface rights,
often on private lands under oil and gas leases with short primary terms. Construc-
tion must occur within a matter of weeks, and timing is critical because failure to
commence drilling and/or production and/or to maintain production will cause
leases, and therefore oil and gas reserves, to be lost. Exploration and production of
oil and gas reserves, moreover, involves obtaining a drilling rig, which must be
quickly and carefully scheduled to coincide with drilling windows and lease obliga-
tions, and is paid for based on the number of days it is in use. Disruption in this
process can place oil and gas leases, entire projects, and the ability to develop do-
mestic onshore oil and gas reservesnot to mention substantial capitalat risk.
These consequences are at issue in EPAs interpretation of the scope of the oil and
gas exemption under section 402(l)(2), particularly with the impending decrease in
the acreage threshold to one acre under the Phase II stormwater regulations.
The permitting process is further complicated by EPAs interpretation of its com-
mon plan of development concept. This concept requires projects to be permitted
if, taken together, the components will ultimately exceed the permitting acreage
threshold. For E&P facilities, this concept makes no sense. E&P facilities are de-
pendent on the success of one well before locating and drilling the next. For the pro-
ducer, there is no common plan.
In addition, EPAs existing common plan guidance is very confusing and difficult
to apply to actual E&P activities. The definition is overly inclusive, in that activities
otherwise consistent with the ordinary course of exploration and development of an
oil and gas prospect would likely be grouped together by EPA as a common plan,
causing the (currently applicable) 5-acre threshold to be exceeded by many common
activities. Under the current guidance, even with the 2-year deferral of the 1-acre
threshold, there is great cause for concern that EPA could conclude that the second
or third or fourth well in a field could constitute a common plan and then enforce
against a producer for failing to file for a construction permit.
Because of these concerns, IPAA believes that EPA should reconsider its approach
to stormwater construction permitting and E&P facilities. Recently, EPA deferred
118
until March 2005 the Phase II deadline for E&P facilities that disturb less than five
acres of land area to obtain a stormwater permit. In the meantime, EPA will have
an opportunity to consider whether there are alternative approaches that might be
consistent with EPAs statutory authority and that would be consistent with the en-
vironmental impacts of construction of these facilities and minimizing the regulatory
burden. IPAA believes this action is essential. However, the issue of common plan
of development remains unclear in the recently issued Construction General Permit;
failure to clarify it could lead to unintended regulation of these small facilities dur-
ing the deferral period. Moreover, IPAA believes that EPA should revisit its current
interpretation of the CWA to address whether it should be requiring E&P facilities
of any size to be to obtain construction permits under subsection 402(p),given the
clear exclusion in subsection 402(l).
Spill Prevention, Control, and Countermeasure Plans. The 1972 CWA required the
EPA to develop regulations to address oil spill prevention and response. These
SPCC Plans were required to be developed and implemented in 1973.
Following a major oil spill from an Ashland oil terminal, EPA proposed revisions
to the SPCC rule on three occasions, in 1991, 1993, and 1997. A new SPCC rule
was finalized and became effective August 16, 2002. This new rule raises serious
issues for E&P facilities.
An initial issue that causes concern and confusion is what triggers the need to
create an SPCC Plan. This decision must be based on whether an operation is a fa-
cility under the regulation and whether it could result in a release that would
reach navigable waters. Both elements must be met and both pose significant
questions to the producer interpreting them.
Some sources indicate that EPA estimates that there are approximately 144,000
oil and natural gas E&P operations that would require SPCC Plans. However, there
are approximately 876,000 producing oil and natural gas wells in the United States.
Most producers believe that the SPCC regulation definition of a facility would cap-
ture most of these operations. Moreover, about 650,000 of these producing wells are
marginal wells that are highly vulnerable to the impact of excessive regulatory
costs. Many of these wells could be shutdown if meeting the new SPCC Plan re-
quirements is too costly.
A similar fundamental issue relates to the interpretation of navigable waters.
Making a judgment regarding whether an operation particularly one a remote area
poses a threat to navigable waters has been consistently confounding. Over the past
two decades different interpretations of the scope of the term have been complicated
by different assessments by various EPA Regional offices. Further confusing the
issue is the Supreme Court decision limiting the definition of the term in the Solid
Waste Agency of Northern Cook County v. United States Army Corps of Engineers
(SWANCC) case. New guidance has been released regarding the implications of
this decision on all Federal regulations and an Advanced Notice of Proposed Rule-
making has been published on the issue.
However, this guidance has not yet been systematically applied and the additional
regulatory action is designed to produce specific regulations on the definition of wet-
lands. The outcome of these actions significantly affects the ability of producers to
determine whether an SPCC Plan is required for their operation. Additionally, it is
essential that all EPA Regional offices consistently apply these ultimate standards.
Without some common understanding of the law, producers will be compelled to
make judgments regarding the need for SPCC Plans that may be incorrect. They
would either risk enforcement actions or incur unnecessary costs. Neither choice is
appropriate.
Moving beyond these pivotal issues, a number of other significant issues with the
new regulations must be either clarified or addressed.
Past interpretations of the SPCC Plan requirements clearly allowed the oper-
ator to consider costs in the planning process. In the new regulation, EPA states,
Thus, we do not believe it is appropriate to allow an owner or operator to consider
costs or economic impacts in any determination as to whether he can satisfy the sec-
ondary containment requirement. The consequence of this approach could be enor-
mous for marginal wells. The costs of SPCC Plans are estimated to range from
around $5,000 to $20,000 with most of this cost associated with secondary contain-
ment requirements. Clearly, these costs put the economic viability of marginal wells
in jeopardy.
One of the principal issues affecting these costs is a requirement in the new
regulations for secondary containment at loading operations. A similar issue exists
regarding secondary containment related to flow lines.
EPA has concluded that produced water operations are not exempted as waste-
water treatment. This decision would subject hundreds of thousands of produced
119
water tanks and vessels to secondary containment requirements when they contain
only incidental amounts of oil.
There is a significant issue regarding the availability of licensed professional
engineers to certify new SPCC Plans.
EPA has extended the compliance deadlines in the regulations 18 months. IPAA
supports this extension as an opportunity to revisit the key issues raised by the new
regulation. It is important to emphasize that the environment is not at increased
risk during this extension period. First, the SPCC Plan requirements in existence
prior to the new regulations remain in place. Second, the responsibility to report
and respond to spills is unaffected.
IPAA believes that there are three broad challenges that must be met. First, there
is a compelling need to continue the process of developing an approach that is clear-
ly understood by all domestic oil and natural gas producers particularly marginal
well producers. Second, the process must yield a Plan that can be certified by li-
censed professional engineers. Third, the Plan must be affordable so that both the
environmental objective of SPCC regulation can be met and domestic production is
not inappropriately impaired.
IPAA believes that EPA should develop an approach to formulating SPCC Plans
to meet the environmental risks of domestic oil and natural gas E&P. Such an ap-
proach should be focused on addressing those circumstances that have presented
past problems. Such an approach would assure that the limited funds available par-
ticularly for marginal well producers are spent on areas where past experience has
demonstrated a compelling call for action.
CONCLUSION
The CWA generates many regulations to improve water quality in the United
States. But, it is essential that the CWA target issues where regulation is truly
needed and that those regulations are cost effective. The applications of the
stormwater construction permitting requirements and the new SPCC Plan regula-
tions to domestic oil and natural gas E&P facilities do not meet this test. Moreover,
they pose a significant risk to the development of new domestic oil and natural gas
resources and the continued operation of existing production. In each case, EPA
needs to reconsider its actions.
IPAA appreciates the opportunity to submit this testimony.
RESPONSE OF LEE FULLER TO ADDITIONAL QUESTION FROM SENATOR INHOFE

Question. What do you believe will be the impact on clean water protections if the
oil industry lawsuit on SPCC plans results in a clarification of the definition of the
waters of the United States?
Response. Given the significant implications of the definition of navigable waters,
I do not believe that it will be resolved as a part of the oil industry lawsuit on SPCC
Plans. Earthjustice and other groups have suggested that the Environmental Protec-
tion Agency (EPA) and the Department of Justice (DOJ) are conducting some type
of secret negotiations to resolve the definitional question as a part of the SPCC Plan
litigation, but I do not believe that this substantial issue will be resolved there for
several reasons.
While the scope of navigable waters is essential to the determination of whether
an SPCC Plan must be prepared, the issue of defining navigable waters after the
Supreme Court decision in the SWANNC case is far broader and extremely com-
plicated.
The navigable waters definition confusion has been a factor in the Clean Water
Act since its initial enactment in 1972. At that time both Houses of Congress passed
Clean Water bills in 1972 with navigable waters definitions similar to the definition
used in the River and Harbor Act. However, the final conference agreementand
ultimately the Clean Water Actcreated a new navigable waters definition. Under
the Clean Water Act, navigable waters means the waters of the United States, in-
cluding the territorial sea. However, there was little explicit report language or de-
bate to define the scope of the term. Consequently, when the Clean Water Act was
implemented and used an historic navigable waters definition, litigation (Calloway)
challenged the definition and prevailed.
Since then, broad definitions of navigable waters have been used, but different in-
terpretations are common and problematic. The SWANNC case precludes using mi-
gratory bird habitat as a basis for defining navigable waters but provides little guid-
ance beyond that. What we really know is that the River and Harbor definition is
too narrow and migratory bird habitat is too broad.
120
As a result, the Bush Administration has solicited input to the EPA and the Corps
of Engineers to address the challenge of developing a consistent, legal navigable wa-
ters definition. That effort is ongoing. Meanwhile, several Federal court cases have
been considered regarding post-SWANNC interpretations of navigable waters. These
are winding their way through the appeals process.
Consequently, with all of these efforts and activities underway, it is implausible
that the Bush Administration would try to resolve such a complicated and pervasive
question in a settlement associated with the SPCC Plan litigation.
STATEMENT OF PROFESSOR RENA STEINZOR,1 UNIVERSITY OF MARYLAND

SCHOOL OF LAW
Mr. Chairman and members of the Committee, thank you for the opportunity to
appear before you today on behalf of the Center for Progressive Regulation (CPR)
to testify regarding the Environmental Protection Agencys (EPA) implementation of
the Clean Water Act. Specifically, I plan to address EPAs enforcement record and
water quality trading policies. CPR is an organization of academics specializing in
the legal, economic, and scientific issues that surround health, safety, and environ-
mental regulation. The Center seeks to provoke debate on how the governments au-
thority and resources may best be used to preserve collective values and hold ac-
countable those who ignore and trivialize them. We reject the idea that govern-
ments only function is to increase the economic efficiency of private markets. For
further information, please see our web site at www.progressiveregulation.org.
This Committee deserves much credit for recognizing the importance of the topics
you consider today. Deterrence-based enforcement lies at the core of an effective reg-
ulatory program designed to maintain and improve water quality in America. Yet
congressional oversight of EPAs enforcement record has been sporadic and, without
such oversight, it is difficult to hold the Agency accountable for keeping, so to speak,
the environmental cop on the beat.
Similarly, trading of pollution credits or allowances is the most prominent
market-based alternative to traditional regulation now under consideration by state,
Federal, and even international governments. This hearing is one of the first to con-
sider how best to use trading as an innovative approach to pollution control. I con-
gratulate you for recognizing how crucial it is to get the design of these initial ex-
periments right.
That said, I am afraid I have disappointing, even alarming, news on both fronts.
The core provisions of the Clean Water Act are under relentless attack by power-
ful members of regulated industries, raising the real possibility that the Administra-
tion will eliminate crucial protections, squandering the gains of the last two dec-
ades. I speak here of proposals to eliminate Federal controls on pollution for 50 to
60 percent of streams and 20 percent of wetlands. Unless and until the states pick
up the slack left by EPA and the Army Corps of Engineer (Corps) abrupt departure
from the field, these vast and irreplaceable natural resources could be polluted,
drained, or filled in by industrial dischargers, real estate developers, and sewage
treatment plants. The cumulative impact of these changes will produce grave ero-
sions in water quality, not just in the affected streams and wetlands, but in the vast
bodies of water into which they feed.
In another arena, as discussed in greater detail by my colleague Michael Lozeau,
the Bush Administration is pursuing a rule on Total Maximum Daily Loads
(TMDLs) that will make it impossible for states to establish enforceable limits for
individual sources, potentially rendering that keystone program a dead letter as a
practical matter. Ironically, these changes will undermine the state trading pro-
grams EPA claims to support because they would also eliminate any basis for allo-
cating pollution allowances to individual sources.
Last but by no means least, there are ample signs that routine enforcement is
at a lower ebb than it has been in a decade. The latest numbers indicate a precipi-
tous decline in every measure of enforcement effectiveness from cases brought and
penalties paid to staffing levels. But even those disconcerting statistics do not por-
tend what may well be in store in the next several years as EPAs brain trust of
experienced civil servants drains away. Because enforcement is such an important
measure of the Agencys effectiveness, I will consider it first and then turn to Agen-
cys trading policy.
1 I am grateful for the assistance of University of Maryland law students Katherine Baer and
Jeff Gilberg to develop the research that forms the basis of this testimony.
121
ENFORCEMENT
Overall, enforcement of environmental laws has decreased dramatically since the

Bush Administration came to power. For example, the number of EPA inspection
and enforcement staff has fallen to its lowest level since establishment of the Agen-
cy, dropping by more than 12 percent since the Administration took office.2 Addi-
tionally, fewer violators pay penalties and those who do pay are paying less. Viola-
tors have paid 64 percent less in fines for breaking environmental laws during the
first 2 years of the Bush Administration than they did under the Clinton Adminis-
tration.3 The average civil penalty paid by polluters has dropped from $1.36 million
to $605,455 and polluters pay 77 percent less for required supplemental environ-
mental projects (SEPs) as part of settlement agreements.4 Apparently this trend will
only continue in his 2003 budget request the President sought to eliminate the posi-
tions of over 200 enforcement personnel.5
Despite the importance of preserving quality of the nations surface waters, en-
forcement under the CWA parallels the general decline of environmental enforce-
ment.6 As a direct result, compliance rates are also declining. A recent report by
EPAs Office of Enforcement and Compliance Assurance (OECA) on the performance
of the major National Pollutant Discharge Elimination System (NPDES) permits re-
veals that enforcement activity for these dischargers has also declined from 1999 to
2001.7 The percent of major NPDES permits in significant noncompliance increased
from 16 percent to 24 percent from 1994 to 2001.8 The number of inspections de-
clined by 8 percent and the percent of facilities that were inspected declined by 6
percent.9 There was a 50 percent decrease in the number of informal enforcement
actions and a 45 percent decrease in formal actions.10 Initiation of administrative
complaint orders (ACOs) declined by 31 percent, and the initiation of administrative
penalty order (APO) complaints declined by 28 percent.11
Yet even these statistics do not capture the implications of a downward spiral in
this arena. My fellow CPR member scholar, Joel Mintz, a professor at Nova South-
eastern University and the author of the seminal book Enforcement at the EPA,12
is in the process of doing field research on the reasons why the Bush Administration
has such a poor track record in this arena. Specifically, Professor Mintz interviewed
about 20 enforcement officials at EPA and the Department of Justice (DOJ), both
at their Washington D.C. headquarters offices and in some of the EPA regions.
Based on those conversations, he has developed the following preliminary findings:
Most EPA enforcement cases in the past 2 years have been directed at rel-
atively small violations. The Agency has largely avoided the kinds of coordinated en-
forcement initiatives that proved so successful in the 1980s and 90s, under both
Democratic and Republican Administrations. The non-Superfund enforcement that
EPA has been doing is hampered by an extraordinary shortage of attorney resources
at the Justice Department.
Part of the reason for this shortage is that DOJ has assigned a very large num-
ber of attorneys to try enforcement cases against electric utilities based on the New
Source Review provisions of the Clean Air Act. Even as those resources are ex-
pended, other components of the Administration have systematically undercut those
cases through public statements and policy changes.
EPAs Senior Executive Service (SES) personnel, who are the high level, career
civil servants with the greatest collective expertise regarding EPA enforcement poli-
cies and techniques, are almost totally isolated within the Agency. Political ap-
pointees, especially in the Agencys regional offices, almost never consult SES people
on important policy questions. As a result, their morale, and the morale of many
who report to them, is very low.
Many senior enforcement managers at the Agency have retired or plan to retire
shortly. This trend is causing a severe loss of the expertise and institutional mem-
ory that are crucial to the success of vigorous EPA enforcement efforts.
2 Natural Resources Defense Council, Rewriting the Rules, Year-End Report 2002: The Bush
Administrations Assault on the Environment. Jan.2003, p. 26.
3 Id. at 27.
4 Id.
5 Id. at 26.
6 Id. at 26.
7 A Pilot Performance Analysis of Selected Components of the National Enforcement and Com-
pliance Assistance Program, OECA EPA, Feb. 2003 [hereinafter OECA Analysis].
8 Id. at 10.
9 Id. at 17.
10 Id.
11 Id. at 18.
12 Joel A. Mintz, Enforcement at the EPA: High States and Hard Choices (1995).
122
Clean Water Act enforcement is crucial to protecting public health; as just one ex-
ample, as many as 13 percent of effluent violations for major sources emitting toxic
pollutants exceed regulatory limits by more than 1,000 percent.13 Additionally, en-
forcement spurs pollution prevention and treatment. Although the data are not com-
plete, the percentage of pollutant reduction, elimination, and increased treatment
that results from enforcement actions has increased as a percentage of the total en-
forcement actions taken.14
Given its importance, what accounts for these disturbing indications that EPAs
enforcement program is, quite literally, falling apart? It has become very clear that
this Administration is just not committed to deterrence-based enforcement of the na-
tions environmental laws. But what are the underlying reasons or justifications for
that fact?
To be sure, the Nation faces many challenges at home and abroad and, in the ab-
sence of a fundamental change in fiscal policies (e.g., the determined pursuit of re-
cent tax cuts despite a worsening economy), resources for domestic programs will
continue to be very limited. But deterrence-based enforcement that is, the publicized
prosecution of a few bad actors to create a disincentive for further law violations
among a regulated industry as a whole is far more important when resources are
tight because the only alternative is the far more resource-intensive practice of ca-
joling lawbreakers back into compliance.
Whatever the explanation, CPR urges this Committee to remain focused on en-
forcement as a leading topic for continued oversight of EPA.
TRADING
Overall Advantages and Principles.Trading can be an effective, as well as effi-

cient, management tool under conditions where reliable methods allow us to allocate
allowances and track trades, as well as to detect unforeseen consequences. It also
has two very significant political advantages.
First, trading has the potential to break political stalemate. The acid rain pro-
gram established by the 1990 Clean Air Act Amendments broke a 13-year legislative
stalemate regarding whether and how to control sulfur dioxide emissions from
power plants. By making the fight about how to carve up the pie of total allowances,
rather than whether to bake the pie in the first place, trading proved an extremely
successful solution to what had become an intractable problem.
Second, regulated industrial sources perceived trading as lowering compliance
costs to the point that they were affordable, especially in the Midwest, where the
big dirties insisted they could not afford to comply with traditional pollution re-
quirements. Everyone involved in the debate over environmental regulation recog-
nizes the validity of industry preoccupation with costs, although it is also true that
pre-implementation cost estimates are often exaggerated.
Trading works especially well when the pollutants at issue have a cumulative,
long-term effect on the environment and do not pose immediate, short-term risks
except in extraordinarily high concentrations. Expanding the use of trading to situa-
tions where it replaces regulatory requirements and produces localized pollution
hot spots that harm human health and the environment will only serve to dis-
credit it as a viable approach for environmental protection in the new millennium.
Water quality trading policy at the Federal and state levels should focus on con-
trol of nutrients by fostering exchanges between point and non-point sources. Water
trading programs must:Include an appropriately low, and steadily declining, cap on
total discharges;
Rely on accurate methods for measuring emissions, awarding allowances, and
reconciling the number of allocated allowances with subsequent trades;
Prevent the formation of localized hot spots;
Involve the public in the setting of caps and the operation of the program; and
Rest on a foundation of enforceable commitments.
For a further discussion of these issues, please see Rena I. Steinzor, Toward Bet-
ter Bubbles and Future Lives: A Progressive Response to the Conservative Agenda
for Reforming Environmental Law, 32 Envtl. L. Rep. 11421 (Dec. 2002).
Analysis of EPA Guidance.EPAs Water Trading Policy encourages states and
tribes to develop water quality trading programs for a variety of constituents as a
way to achieve water quality improvements at lowered costs. The Policy is premised
on the basis that flexibility and economic efficiency will yield greater environmental
benefits than traditional regulatory approaches. Water quality trading supposedly
allows one source to meet its regulatory obligations by using pollutant reductions
13 OECA Analysis, supra note 10, at 6.

14 Id. at 7.
123
created by another source that has lower pollution control costs.15 Further, the
Water Trading Policy restricts trading to a watershed or Total Maximum Daily Load
(TMDL)-defined segment, although there are no stated limitations on the size of the
watershed.16 EPA specifically supports trading in situations, including the following,
where trading:17
Reduces the costs of TMDL implementation.
Provides economic incentives for voluntary pollutant reductions.
Reduces the cost of compliance with water quality based requirements.
Offsets new or increased discharge to maintain support for designated uses.
Creates ancillary benefits (e.g., wetland creation).
The Policy does not support trading to comply with existing technology-based ef-
fluent limitations.18
CONSISTENCY WITH THE CLEAN WATER ACT
Although the Policy states that trading is supposed to be consistent with the CWA
and aligned with and incorporated into core water quality programs (e.g., water-
shed plans, water quality standards, the continuing planning process),19 the CWA
does not provide any statutory language to authorize trading.20 In this sense, the
CWA is in sharp contrast to the Clean Air Act, which broadly employs trading to
reduce emissions as part of several programs. Significant CAA trading programs,
however, were written into the Act as explicit statutory authority, including provi-
sions for compliance monitoring and enforcement.21 Because the Policy, like the cre-
ation of CAA offsets and SO2 trading, attempts to create an inter-source trading pro-
gram to achieve environmental gains by significantly changing the permitting sys-
tem, these changes must occur at the legislative level, and not via guidance.
Congress also apparently recognizes the fact that trading is not currently author-
ized by the CWA as reflected by a previous attempt to add such authority to the
CWA. The Water Quality Act of 1994 to amend the CWA included a number of pro-
visions directed at controlling nonpoint source pollution.22 Specifically, the bill in-
cluded provisions for enforceable nonpoint source pollution plans and the study of
trading programs.23 At the bills introduction sponsor Representative Mineta stated
that a provision with a mechanism to authorize pollution trading would be added.24
Ultimately the bill was not enacted, thus leaving the CWA without authorization
for such water quality trading.
MECHANISMS FOR TRADING
The Water Trading Policy states that trading can legally be accomplished by in-
corporating trading into water quality management plans, the continuing planning
process, watershed plans, water quality standards, TMDLs and NPDES permits.25
Clearly, however, trading cannot be used by an NPDES permittee to achieve its pri-
mary technology-based effluent limits, as recognized in the Policy. However, the Pol-
icy also states that EPA will consider revising certain effluent limitations to allow
such technology-based trading,26 which would undermine the basic structure of the
CWA that Congress created based upon point source effluent controls.27
NPDES permits, in addition to technology limits, must also include water quality-
based limits to ensure that ambient water quality standards are not violated.28 The
Water Trading Policy identifies trading to meet water quality standards as an in-
stance where trading may occur to offset an increased discharge. This sort of trade
to meet water quality standards is inconsistent with the CWA and merely moves
a pollution problem from one spot to another. Legally a point source cannot violate
its water quality standards in exchange for a reduction elsewhere. Allowing a point
15 U.S. EPA, Water Trading Policy (January 13, 2003) at 1 (emphasis added), available at
www.epa.gov/owow/watershed/trading/finalpolicy2003.pdf [hereinafter Water Trading Policy].
16 Id. at 4.
17 Id. at 3 and 6.Achieves early reductions and progress toward water quality standards pend-
ing development of TMDLS for impaired waters.
18 Id. at 6.
19 Id. at 4 and 6.
20 Ann Powers, Reducing Nitrogen Pollution on Long Island Sound: Is There a Place for Pollut-
ant Trading? 23 Colum. J. Envtl. L. 137, 168 (1998) (hereinafter referred to as Powers).
21 Id. at 162.
22 H.R. 3948, 103d Cong. (1994).
23 H.R. 3948, 103d Cong. 314 (1994).
24 140 Cong. Rec. 353 (1994)(remarks of Rep. Mineta).
25 Water Trading Policy, supra note 15, at 6.
26 Id.
27 Sen. Rpt. 92414, at 3675 (Oct. 28, 1971).
28 33 U.S.C. 1311 (b)(1)(C).
124
source to buy credits instead of meeting water quality-based effluent limitations is
also a poor policy choice because, by definition, it would allow pollutants to be dis-
charged at levels that would be inconsistent with the designated uses protected by
the water quality standards at the point of discharge.
Ironically, these aspects of the Water Trading Policy appear to contradict other
provisions of the same document that define a pollution credit as reductions great-
er than those mandated by a regulatory requirement or established by a TMDL.29
Unfortunately, this apparent contradiction can be reconciled if one remembers that
TMDLs apply over a far greater area than the water quality standards that are in-
corporated into individual permits in the form of discharge limits. Even if EPA in-
sists, as a practical matter, that trading comply with TMDLs, numerous plant-spe-
cific violations of Water Quality Standards could easily occur. Indeed, the new guid-
ance would have little value to industry if it did not produce this outcome.
VALID TRADING OPPORTUNITIES: TMDLS FOR NUTRIENTS
EPA trading supporters probably dismiss the complaints of environmentalists on

the basis that we have never seen trading that we like. This perception is wrong
and allows staff to evade real problems with the Water Trading Policy using a heav-
ily politicized rationale. In meeting after meeting with top EPA officials, national
environmentalists repeatedly stated that, while trading to meet permit standards
under an NPDES permit is troublesome, TMDLs30 for nutrients provide optimal ve-
hicles for trading to occur. Under TMDLs trading can be limited to circumstances
in which there is adequate information on ambient water quality, sources of pollu-
tion, current loadings, and the amount of reduction needed to meet water quality
standards (i.e. baseline loadings and a declining pollution cap), which are all pro-
vided by the TMDL program.
Unfortunately, the Policy allows pre-TMDL trading.31 This tactic effectively at-
tempts to circumvent the TMDL process and implement trading without a baseline
or cap provided by a TMDL. Trading should be allowed to occur only when there
is a TMDL in place and the trading program is consistent with TMDL allocations.
For trading to improve water quality, it must either be limited to point-point trad-
ing of reductions exceeding those already required under an NPDES permit (tech-
nology and water-quality-based standards) or be done to implement future reduc-
tions under a TMDL designed to meet water quality standards. Without a TMDL,
EPA cannot allocate a reliable, environmentally sound baseline of initial credits
are allocated. Trading without a reliable baseline and cap could result in environ-
mental degradation, not environmental improvement. This result could occur, for ex-
ample, if trading is allowed in a waterbody impaired by both point sources and
nonpoint sources, where the point sources trade needed additional reductions with
some nonpoint sources, yet other nonpoint sources increase their discharges more
than the amount of the trade.
TRADABLE CONSTITUENTS: NUTRIENTS VERSUS TOXICS32
According to the Policy:

Nutrients (TN, TP) and sediments including cross-pollutant trading for oxygen
related pollutants are tradable as a matter of course.
Other pollutants (e.g., NH4, Se) can be traded on a case-by-case basis where
prior approval is provided via an NPDES permit, TMDL, or as part of a state/tribal
watershed plan or pilot trading project.
No trading of persistent bioaccumulative toxics (PBTs) is supported unless it
is part of a pilot project to obtain more information about PBT trading.
Nutrients provide an excellent opportunity for trading because they are a leading
cause of water quality impairment and are largely attributable to nonpoint sources
of pollution, which are inadequately controlled. However, because many states do
not yet have water quality standards for phosphorus and nitrogen, trading to reduce
these nutrients should only occur in a TMDL situation where there is good data
about baseline conditions and a declining cap can be implemented. Cross-pollutant
trading, on the other hand, is extremely complicated, because it makes tracking and
monitoring difficult.
As for toxics, needless to say, one persons pilot project, if replicated often
enough, is another persons entire program. It is profoundly disappointing that EPA
did not shut the door to these dangerous experiments not just with environmental

30 33 U.S.C. 1313(d)(3).
32 Id. at 4.
125
quality, but with public health. Trading must not apply to toxic pollutants because
of the risk to human health aquatic life and the potential to create hot spots. A
hot spot is a localized concentration of pollutants in excess of water quality stand-
ards, which could result in fish kills and contamination, adverse human exposure,
beach closures, and other impacts on aquatic life. The potential for creating hot
spots is particularly troublesome in the case of toxics since the hot spots created
today may not dissipate for decades or even centuries to come, but may instead per-
sist in the sediment or increase in the food chain through bioaccumulation and bio-
magnification.
THE MERCURY EXAMPLE: NOT JUST WATER, BUT ALSO AIR
Mercury, for example, is recognized as a serious threat to human health that

poses a threat to children and pregnant women who eat a range of fish.33 Once mer-
cury is deposited in water, fish absorb it. When humans eat the fish, their bodies
take in the poison. At even very low levels, mercury poisoning in pregnant women
damages their babies central nervous system and causes heart, kidney and brain
damage. Yet pregnant women are not the only ones at risk. After a yearlong study,
a San Francisco physician announced in November 2002 that she had found symp-
toms of low-level mercury poisoning in dozens of her patients who consumed typical
amounts of fish. Symptoms included hair loss, fatigue, depression, difficulty concen-
trating, and headaches.
In addition, the families of low-income, subsistence fishermen, who rely on daily
catch for the protein portion of their diet, are at even greater risk. In 2001, 44 states
issued public-health warnings that people should not eat mercury-contaminated fish
from local waters. The Great Lakes, the Florida Everglades, and portions of the
Chesapeake Bay are afflicted, along with hundreds of other lesser-known water bod-
ies. Provoked by the very severe problems in the Great Lakes, a broad coalition of
sportsmen, wildlife groups, and environmentalists has urged EPA to work toward
a phase-out of all mercury pollution.
In nine states, fish advisories for mercury extend from inland lakes to coastal wa-
ters where tuna and other popular fish are caught. Tuna is the most consumed fish
in the country, but because of concerns about mercury, many experts recommend
that pregnant women limit themselves to two small cans per week. As one indica-
tion of the extent of this problem, the Senate Environment and Public Works Com-
mittee passed legislation in 2002 that bans mercury thermometers a mere drop in
the bucket by comparison to the quantities of mercury that could be traded the Ad-
ministration is now prepared to let industry pump into the environment.
EPA, in fact, has already funded one mercury pilot project in Sacramento.34 How
many more may be in the pipeline is anyones guess.
To add insult to injury, the Administrations Clear Skies initiative would estab-
lish a complex credit-swapping scheme by which power plants will be entitled to
trade mercury emissions. Most of the mercury that ends up in the water is released
first into the air, from smokestacks where large utilities burn coal. The heavy metal
particles in the smoke fall down into the water. The Presidents Clear Skies initia-
tive, supposedly crafted to clean up the air more cheaply, would permit the creation
of hot spots with vastly more mercury than the environment can sustain.
For 30 years, the standard approach has been to force plants to put scrubbers on
their stacks so that the worst pollution will be removed before it goes into the air
and EPA is overdue in promulgating Maximum Achievable Control Technology
(MACT) for mercury. But the Bush Administration has decided that this straight-
forward solution is too costly for the utility industry. Clear Skies permits power
plants to trade unused credits with plants up or downwind, even if mercury emis-
sions land where fish are spawned. Worse, high sulfur coal, such as the coal used
by the infamous Big Dirties in the Midwest, produces more mercury than low sul-
fur coal, used by the relatively clean power plants in the southwest. There is noth-
ing in the Clear Skies proposal that prohibits trading of mercury credits generated
by utilities in the arid southwestern deserts while the Great Lakes, the Everglades,
and the Chesapeake Bay become more polluted.
33 USATODAY, USATODAY.com, Anita Manning, If you Eat a lot of Fish, you may Run a
Health Risk, <http://usatoday.com/news/health/20021104-fish1acoverx.htm> (Nov. 4, 2002).
34 U.S. EPA, Office of Water, Press Release: EPA Releases Innovative Approach to Cleaner
Water 11 Pilot Projects Receive More than $800,000 in Funding, Jan. 13, 2003 <http://yosem-
ite.epa.gov/opa/admpress.nsf/b1ab9f485b098972852562e7004dc686/
7f1b0616de4dc2a285256cad006a60a7?OpenDocument> (last updated Jan. 13, 2003).
126
ANTIDEGRADATION
The Water Trading Policy also states that antidegradation review is not required
as part of trading programs because EPA does not believe that trading will result
in lower water quality where trading programs result in a no net increase of pol-
lutants.35 This claim assumes that trades are done by plants in close proximity.
However, the Policy permits individual trades between sources at some distance
from each other, as long as such sources are located within a watershed, raising the
real possibility of a localized pollutant impact that would require an antidegradation
analysis.
ENFORCEMENT AND MONITORING: THE POTENTIAL FOR WASTE AND FRAUD
Although the Water Trading Policy lists elements that should be used to ensure
a successful state/tribal trading program, there is no requirement that states or
tribes include any of these elements. This permissiveness is especially troubling
with respect to provisions for enforcement or monitoring.36 For example, the Water
Trading Policy recommends that credits should be generated before or at the same
time as they are used to comply with a limit, that standardized protocols should be
used to account for the uncertainty associated with reduction of nonpoint source
(NPS) pollution, and that there should be methods for determining compliance.37
Trading programs, however, are subject to manipulation and fraud and thus de-
mand stringent monitoring and enforcement mechanisms.38 Failed programs to re-
duce air pollution in Los Angeles by the South Coast Air Quality Management Dis-
trict make this point clear.39 In that case, stationary sources purchased credits, in-
cluding from vehicle owners to take their old engines off the road, and without ade-
quate monitoring the result was fraud and the creation of volatile organic compound
hotspots in minority neighborhoods.40 This real life and spectacular failure makes
plain that all trades should be governed by a regulation, permit, or other enforce-
able mechanism with both governmental and citizen enforcement provisions.
The Policy offers some sound ideas such as consideration of compliance history to
determine trading eligibility.41 But these ideas must be transformed from notions
into requirements for a trading program. Additionally, EPA oversight and approval
for all trading programs is crucial, but it is a responsibility that is abdicated in the
Policy, which states that EPA does not believe that the development and implemen-
tation by states and tribes of trading programs consistent with the provisions of this
policy necessarily warrant a higher level of scrutiny under these oversight authori-
ties [NPDES and TMDL] than is appropriate for activities not involving trading.42
On the contrary, continual EPA oversight of any state trading program is important
both to the state agency and to those who use state waterbodies.
Compounding the potential for waste and fraud is the fact that the technology
necessary to measure pollution reductions at non-point sources is still in it infancy.
Consider, for example, a promise by agribusiness to erect a tree buffer to stop run-
off from reaching the local water body. It is far more of an art than a science to
predict how effective the buffer will be in stopping run-off, especially since meteor-
ology, topology, and geology (e.g., soil type) play such a crucial role in those deter-
minations.
For this reason, environmentalists have called for trading ratios that would com-
pensate for problems in the methodology of measuring non-point emissions by re-
quiring, for example, two credits from a non-point source to be traded for one credit
from a point source. The EPA Policy, however, neither acknowledges these problems
nor recommends this kind of solution.
PUBLIC INVOLVEMENT
Public participation is key to environmental programs, and similar to monitoring

and enforcement, EPA makes references to public participation and access to infor-

36 Id. at 9 and 10.
37 Id.
38 Rena Steinzor, Center for Progressive Regulation, Testimony before the House Sub-
committee on Water Resources and the Environment of the U.S. House of Representatives re-
garding Water Quality Trading: An Innovative Approach to Achieving Water Quality Goals on
a Watershed Basis. June 13, 2002 [hereinafter Steinzor Testimony].
39Richard Toshiyuki Drury, et al., Pollution Trading and Environmental Injustice: Los Ange-
les Failed Experiment in Air Quality Policy, 9 Duke Envtl. L. & Poly. For. 231 (1999).
40 Steinzor Testimony, supra note 38.
42 Id. at 11.
127
mation but without any specific requirements.43 If the trade is part of an NPDES
permit, the public will have a chance to comment only when the permit including
a trading program is issued, but not for each trade. For trades that are not part
of an NPDES permit, the opportunity for public involvement is unspecified and the
Policy supports public participation and access to information and encourages states
and tribes to make information available. There are no requirements, however, for
such involvement.
The public must have a seat at the table when developing a trading program. All
trading programs involve changes to components of a state water pollution program
that require full public review (e.g., the TMDL, the NPDES program, the impaired
waters list, etc). The public must be allowed to comment on and object to proposed
trades, and should be given adequate information to track trades and their water
quality effects. The Policy encourages entities to make trading information avail-
able to the public, but does not call for public comment on proposed trades or pub-
licly available information on water quality impacts.
SUMMARY
Water quality trading offers promise in solving some of our remaining and intrac-
table water quality problems. It is not, however, the silver bullet answer to solve
all problems. Each trading program must be tailored to local conditions and based
upon a legally defensible background that will support trading consistent with exist-
ing legislative authority. To achieve real gains, trading must focus on reducing nu-
trients in TMDL settings with an enforceable and declining cap against which cred-
its can be measured.
ENVIRONMENTAL INTEGRITY PROJECT

PAYING LESS TO POLLUTE
The Decline of Environmental Enforcement at EPA Under the Bush Administration
43 Id. at 10.
128
EXECUTIVE SUMMARY
Shortly after taking the reins at the Environmental Protection Agency, the Bush
Administration announced that it would cut the Agencys enforcement staff by 270
positions. The Administration has also made clear that it does not support the laws
that EPA has been trying to enforce that prevent aging power plants, refineries, and
other factories from increasing pollution when they expand. Predictably, these deci-
sions have begun to take their toll on EPAs ability to persuade violators to agree
to settle enforcement actions brought against them.
In the 2002 fiscal yearthe first full year in which EPA was under the thumb
of the Bush Administration and its allies in the energy lobbythe number of pen-
alties recovered from polluters in civil cases that were settled in Federal court de-
clined by half compared to the previous 3 year average. Defendants paid over $130
million, $84 million, and $94 million, respectively, in fiscal years 1999, 2000, and
2001 to settle judicial actions. In 2002, the U.S. Government was able to recover
only $51 million in civil penalties. In addition, nearly two-thirds of penalties in the
2001 fiscal year (October 1, 2000 to September 30, 2001) came from settlements
lodged before the Bush Administration took office on January 20, 2001. Declining
penalties can be explained in part by the absence of large settlements with the kind
of Fortune 1000 companies that were the subject of large enforcement actions in
prior years.
In addition to paying penalties, companies are expected to return to compliance.
EPA, however, will reduce penalties somewhat for those willing to undertake sup-
plemental environmental projects or SEPs that bind companies to do work that
is well beyond what is required to comply with the law. These SEPs offer substan-
tial benefits to local communities by, for example, financing the purchase and pres-
ervation of wetlands and greenspace, underwriting the cost of fenceline monitoring
and mobile asthma clinics, or supporting conversion of bus fleets to natural gas. The
value of these SEPs declined from a 3-year average of $106 million between fiscal
years 1999 and 2001, to only $43 million in 2002. Significantly, more than half of
the SEPs obtained in the 2001 fiscal year originated from settlements lodged during
the Clinton Administration.
Attachment A documents the current Administrations persistent campaign to cut
back on enforcement staffing at EPA. By undercutting the enforcement program, the
Administration has hamstrung EPAs power to effectively negotiate for environ-
mental projects. The U.S. Senate has acted to restore full funding to EPAs enforce-
ment program, which could help to reverse this trend, but has been stymied by the
U.S. House of Representatives push to restore only partial funding that would leave
EPA with more than 100 fewer enforcement positions than it had when the current
Administration took office. Meanwhile, the Bush Administration has made existing
clean air laws even harder to enforce by weakening rules that require plants to ob-
tain permits and install pollution controls. See Environmental Integrity Project
(EIP), Turning the Clock Back on the Clean Air Act (Oct. 2002); EIP, Bright Lines
or Loopholes? (Dec. 2002).
The attached analysis is based on a review of EPA cases lodged in Federal court
over the past four fiscal years. Because all judicial settlements that resolve ongoing
violations have to be published in the Federal Register for comment, the Environ-
mental Integrity Project was able to obtain penalty and SEP data for almost all
cases by searching through the LEXIS inventory of Federal Register notices. EIP
compared the notices to EPAs announcements and press advisories on judicial cases
and Department of Justice docket data obtained through a Freedom of Information
Act request. The attached charts indicate no value given where the notice of lodg-
ing notes that there was a penalty or SEP obtained but does not state a specific
amount. Entries are left completely blank in a handful of cases where the notices
of lodging make no reference to penalties or SEPs whatsoever.
This analysis focuses on settlements lodged under the Clean Air Act, Clean Water
Act, the Resource Conservation and Recovery Act, and several other statutes. Ac-
cording to Department of Justice data, a small number of cases brought in fiscal
years 2001 and 2002 were not lodged. These settlements required only payment of
a penalty, generally because the facility had closed or already returned to compli-
ance. Because this data was not available from prior years, it was not included in
this analysis. Similarly, enforcement actions establishing the governments environ-
mental claims in bankruptcy cases were omitted, as recovery is uncertain under
such circumstances.
The attached does not include Superfund cases, or a tally of natural resource
damages under the Oil Pollution Act. It also does not include administrative actions,
as that data is not yet available. Nevertheless, judicial cases typically account for
more than two-thirds of penalties and supplemental environmental benefits recov-
129
ered in civil enforcement cases. The analysis is limited to civil enforcement cases,
and does not include statistics from the criminal enforcement program, as these are
not yet readily available.
No single statistic can capture the full range of benefits realized when environ-
mental laws are enforced. Moreover, enforcement trends tend to be cyclical in na-
ture, making it possible that the results for fiscal year 2002 are an aberration. Un-
fortunately, it is more likely that these numbers reflect an intentional effort to
weaken enforcement efforts, indicating that the Bush Administration will do little
to enforce environmental laws unless the public demands it.
130
131
RESPONSES OF RENA STEINZOR TO ADDITIONAL QUESTIONS FROM SENATOR JEFFORDS
Question 1. Is the government somehow precluded from offering immunity under
the criminal negligence section of the Clean Water Act?
Response. In a word, no. Like every other provisions of Federal criminal law, this
section does not preclude the government from offering immunity to cooperating wit-
nesses. The major rationale offered by those who wish to narrow the negligence pro-
vision is that it impedes government investigations of accidents because witnesses
are too afraid to cooperate. Given the governments unimpeded authority to offer im-
munity, it is difficult to understand the basis for this argument.
Question 2. On page 3 of Mr. Halls testimony, he outlines a scenario where the
FAA provides for lenience when individuals self-disclose violations. He implies that
the same does not exist at EPA or elsewhere in the Federal Government.
Attached are three key documents related to this point.
(1) First, EPAs 1994 memo on the Exercise of Investigative Discretion states that
significant environmental harm and culpable conduct should be present before de-
ciding to proceed with a criminal case; (2) Second, the US Department of Justice
Spring 2000 Status Report on the Use of Immunity and Evidentiary Privileges to
Encourage Voluntary Disclosure of Self-Discovered Regulatory Violations described
the use of voluntary disclosure policies like the one you describe at FAA throughout
the government. It cites the long standing 1991 policy of the Environment and Nat-
ural Resources Division that voluntary disclosure will lead to criminal prosecutorial
leniency; (3) Third, the EPA December 1995 policy statement provides incentives
such as elimination of the gravity component of civil penalties and not recom-
mending cases for criminal prosecution in situations where voluntary disclosure has
occurred.
Ms. Steinzor, it would appear that these documents as well as other similar docu-
ments found at the FBI and the Coast Guard offers the very protection Mr. Hall
describes at the FAA. In addition, it seems that these documents would limit the
use of criminal prosecutorial tools to a fairly limited universe of cases. Can you com-
ment on this?
Response. Yes, these documents substantially limit the use of criminal prosecu-
torial tools to a very limited universe of cases. Not only is criminal prosecution re-
served for the most significant and egregious violations, but leniency policies are in
place that encourage companies to voluntarily disclose environmental violations so
as to avoid criminal prosecution. Accordingly, very few cases are actually criminally
prosecuted. The three documents mentioned in the above question specifically sup-
port this contention.
First, the EPAs 1994 memo on the Exercise of Investigative Discretion explicitly
recognizes that there are specific factors that distinguish cases meriting criminal
investigation. (EPA 1994 memo, page 1) More specifically, the criminal case selec-
tion process is guided by two general measuressignificant environmental harm
and culpable conduct. (EPA 1994 memo, page 3) Investigative discretion is based
upon whetherand to what extentthese two general measures are present.
In deciding whether significant environmental harm has occurred, investigators
will examine four factors. Specifically, investigators will consider: (a) the actual
harm, either to the environment or human health, caused by the illegal discharge,
release, or emission; (b) the threat of significant harm, either to the environment
or human health, caused by the illegal discharge, release, or emission; (c) the failure
to report the discharge, release, or emission; and, (d) the likelihood of the illegal
conduct representing a trend or common attitude within the regulated community
(EPA 1994 memo, page 4). The more of these factors that are present, the greater
the chance that investigators will find that significant environmental harm has oc-
curred.
In deciding whether culpable conduct has been exhibited, investigators will con-
sider five factors. Specifically, investigators will determine whether: (a) there is a
history of repeated violations; (b) the violation was a result of deliberate misconduct;
(c) an attempt was made to conceal the misconduct; (d) monitoring or control equip-
ment was tampered with; and, (e) the business operation was conducted with the
proper permit, license, manifest, or other required documentation. (EPA 1994 memo,
page 5) Again, if more than one of these factors are present, there is a greater
chance that investigators will find that culpable conduct has been exhibited.
After considering the two general measures explained above, investigators will de-
cide whether to proceed criminally. However, even if investigators elect to do so, it
doesnt necessarily translate into a criminal prosecution. In fact, this exercise of in-
vestigative discretion is but a critical precursor to the prosecutorial discretion later
exercised by the Department of Justice. (EPA 1994 memo, page 3) In addition, when
a case does not meet the specific criteria to proceed criminally, as is the case most
132
of the time, it is systematically referred back to the Agencys civil enforcement of-
fice for appropriate administrative or civil judicial action. (EPA 1994 memo, page
3) Therefore, investigators neither arbitrarily nor recklessly decide whether to crimi-
nally proceed. Rather, two general measures and several accompanying factors are
considered in order to reach an appropriate determination. Accordingly, the criminal
enforcement authority entrusted is taken very seriously and is used only to pros-
ecute the most significant and egregious violators. (EPA 1994 memo, pages 2, 7)
Second, as explained in the US Department of Justice Spring 2000 Status Report
on the Use of Immunity and Evidentiary Privileges to Encourage Voluntary Disclo-
sure of Self-Discovered Regulatory Violations, many Federal agencies have sup-
ported and/or adopted leniency policies, which reduce or waive penalties for viola-
tions that were voluntarily discovered, promptly disclosed, and quickly remedied.
(DOJ 2000 Status Report, page 1) These policiesmodeled on discretionary leni-
encyencourage disclosure while preserving Federal discretion to impose appro-
priate administrative and civil sanctions. (DOJ 2000 Status Report, pages 12)
Therefore, companies are given an opportunity to escape criminal prosecution so
long as they voluntarily disclose such violations and quickly remedy the problems
that the violation caused.
Third, in its December 1995 policy statement, the EPA provides for such a leni-
ency policy. More specifically, the EPA policy seeks to enhance protection of human
health and the environment [by encouraging voluntary disclosure of environmental
violations]. (EPA 1995 policy statement, page 66706) In exchange for such disclo-
sure, the EPA offers the incentives of eliminating or substantially reducing the
gravity component of civil penalties and not recommending cases for criminal pros-
ecution. (EPA 1995 policy statement, page 66706) Therefore, the EPA itself offers
violators an opportunity to avoid criminal prosecution by voluntary disclosing the
details of the violation.
As Robin Greenwald alluded to in her testimony, two former chiefs of the Depart-
ment of Justice, Environmental Crimes Section, Ronald Sarachan and Steven Solow,
undertook a statistical analysis illustrating that of the 1,436 environmental crimes
prosecuted from 1987 to 1997, only 86, or approximately 6 percent, were negligence
cases. Clearly, the EPA and DOJ have taken very seriously their authority to crimi-
nally investigate and prosecute environmental violations. Furthermore, as my testi-
mony reflects, an environmental violation that was merely an accident has never
been criminally prosecuted. Rather, as the EPA sets forth, the criminal enforcement
authority is used only to prosecute the most significant and egregious violators.
(EPA 1994 memo, pages 2, 7)
Question 3. Section 309 of the Clean Water Act has been used in a number of
prosecutions involving both environmental damage and personal injury. Can you de-
scribe a few cases other than the Hanousek and the Hong cases that have resulted
in successful enforcement actions against violators?
Response. There are three other cases that immediately come to mind as exam-
ples of successful enforcement actions under Section 309 of the Clean Water Act.
First, as noted by Ms. Greenwalds testimony, the Exxon Valdez oil spill was per-
haps one of the worst environmental catastrophes in this country. In that case,
the specific negligence was Exxons decision to allow a known alcoholic to navigate
the barge in the Prince William Sound. The combination of significant environ-
mental harm and culpable conduct in the Exxon spill made this case a clear Sec-
tion 309 criminal enforcement.
Second, also noted by Ms. Greenwalds testimony, the Colonial Pipeline spill in
the Reedy River is another example of a significant environmental harm resulting
from the negligence of an operator. In particular, there was a tremendous loss of
nearly one million gallons of petroleum products caused by the negligent failure
to repair a known weak spot in the pipeline. In fact, Colonial knew specifically of
the weak spot yet elected to take the risk and move the petroleum product anyway.
As Greenwald asserts, if Section 309 were amended to include the proposed statu-
tory language, neither the Exxon Valdez nor Colonial Pipeline cases could have been
prosecuted for Clean water Act negligence because no one was injured nor put at
risk of death or serious bodily injury. But, both of these cases were deserving of
criminal prosecution due to the significant environmental harm and culpable con-
duct involved.
A third example of successful Section 309 criminal enforcement is the tragic case
of the Olympic Pipeline spill. In June 1999, a rupture in the Olympic petroleum
pipeline resulted in a spill of approximately 236,000 gallons of gasoline into Hannah
Creek and Whatcom Creek. (http://www.usdoj.gov/usao/waw/textversion/press
room?2003/jun/olympic.htm). In addition, the gasoline ignited, resulting in the
deaths of three teenagers (http://www.usdoj.gov/usao/waw/textversion/press
133
room?2003/jun/olympic.htm). This example differs from the previous two in that it
illustrates the ability of the EPA and DOJ to investigate and prosecute cases that
did cause death or serious bodily injury. In other words, the proposed amendment
to Section 309 is not only too restrictive, but it is also unnecessary. As the case of
Olympic Pipeline demonstrates, both the EPA and DOJ are already well aware that
whenever death or serious bodily injury occurs as a result of an environmental vio-
lation, criminal prosecution is appropriately preferred.
Question 4. It is my understanding that the Department of Justice has applied
a simple negligence standard to criminal environmental cases for an extended pe-
riod of time. Can you comment on this?
Response. As the testimony of Robin Greenwald reflects, the Department of jus-
tice has applied a simple negligence standard to criminal environmental cases since
1987, when Congress amended the Clean Water Act in 1987 to add Section 309.
However, defendants have never been prosecuted for what was a simple accident,
as the oil industry suggests. In fact, neither the Hanousek and Hong decisions rep-
resent a departure from that practice. Both cases, as described by Ms. Greenwald,
evidence the practice of only criminally prosecuting catastrophic environmental
violations that were caused by an operators failure to exercise the care that a rea-
sonable person would have taken under similar circumstances; the defendants in
both cases acted with utter disregard for the environment. Accordingly, both deci-
sions represent the need for Section 309 to punish egregious behavior. Further-
more, as the statistical research of Ronald Sarachan and Steven Solow illustrates,
only 6 percent of the criminal environmental prosecutions between 1987 and 1997
were negligence cases. In addition, as I testified, there has never been a case of an
environmental violation prosecuted for which there was merely an accident. There-
fore, Section 309 has functioned in the very manner for which it was createdto
only hold the most significant and egregious violators criminally responsible.
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STATEMENT OF JIM HALL, PRINCIPAL PARTNER, HALL AND ASSOCIATES; FORMER
CHAIRMAN, NATIONAL TRANSPORTATION SAFETY BOARD
Mr. Chairman, Mr. Ranking Member, Members of the Committee, thank you for
the invitation to testify before you today. I am pleased to be here to share my expe-
rience with transportation safety, and its particular relevance to aspects of the
Clean Water Act (CWA).
Briefly, let me spend a few moments on my previous role at the National Trans-
portation Safety Board (NTSB) and on the Boards overall mission. I was nominated
as member of the NTSB by President Bill Clinton in 1993, and subsequently served
as the Boards Chairman from June 1994 to January 2001. I currently serve as
President of Hall & Associates, where I advise a host of government and private
clients on transportation safety and security issues.
Ever since Congress created the NTSB, the Safety Board has served as the eyes
and ears of the American people whenever there is a significant transportation inci-
dent. The mission, then and now, is to impartially and thoroughly investigate acci-
dents to determine their cause, with the primary goal of preventing future accidents
and providing Americans with continued confidence in the nations many transpor-
tation modes. The Board issues scores of recommendations to government and in-
dustry every year. In making recommendations, the Board looks for, and historically
achieves, a high level of voluntary compliance.
Likewise, NTSB investigations rely in large part on the voluntary and unpaid as-
sistance of companies involved in accidents to understand what went wrong and
how to fix it. This system of voluntary cooperation works exceedingly well, and the
goala safer transport systemis considered so important to our national interest
that Congress has given NTSB accident investigations priority over all other Fed-
eral investigations.
As Chairman, I often said our work focused on a single, very simple, pointthe
more information we have, the safer we all can be. During my tenure at NTSB, I
was never bashful in speaking out about issues that sometimes inadvertently sepa-
rate our government from that focus. The threat of criminal sanction for purely acci-
dental behavior has the real potential to stifle cooperation, to stifle the ready devel-
opment of information necessary to understand an occurrence and prevent its repeti-
tion.
That has a price, potentially high, and would need to be offset by the possibility
that punishing pure accidents reduces their likelihood. I have seen no evidence for
that proposition, and indeed, several successful safety programs sponsored by the
Department of Transportation proceed on exactly the opposite presumption.
As the Members of this Committee are well aware, every mode of transportation
is closely regulated for safety purposes under a variety of statutes, and each of these
provides for both civil and criminal sanction for some classes of regulatory violation.
Typically criminal violations are reserved for knowing violationsactivities such as
falsification of records or safety tests, the deliberate violation of regulatory stand-
ards, or willful or reckless behavior that leads to injury or death, or destruction of
property.
However, one statute, the Clean Water Act (CWA), provides criminal penalties,
including fines and imprisonment, for simple negligence. Simple negligence, as de-
fined, does not require intent, or knowledge, or even willful or reckless disregard
of norms. As such, it easily is charged and potentially just as easily proved in acci-
dents where all due care was thought to have been exercised. Potentially, an entity
believing that it is exercising due caution and using current technology and modern
procedures may still find that the company, its supervisors, or its operating employ-
ees will be charged criminally, if a water source becomes polluted. Wholly apart
from the impact that such a regime has on the ability of a company to attract top
notch employees and managers, its implications for safety investigations and ulti-
mately safe regulation are problematical at very best.
During my tenure at the NTSB, I became increasingly concerned with the trend
toward the criminalization of any or all transportation accidents. Let me be clear,
there are accidents where criminal prosecution is warranted and even the pre-
ferred course of action. While traditional criminal law theory requires a finding that
one intended the consequences of the criminal act, it has long been accepted, and
I accept, the proposition that wanton disregard of behavioral norms suffices to sus-
tain a criminal prosecution, even if the consequences of the behavior were not in-
tended, indeed even if they were as horrifying to the perpetrator as to the rest of
us. No one hesitates to prosecute drunken driving as negligent homicide. But what
good would come of prosecuting a driver who, blinded by the sun, lost track of the
vehicle in front him and did harm identical to that of the drunk? How best to an-
swer the questions raised by these issues became the major focus of a symposium
156
on Transportation Safety and the Law that the NTSB convened under my direction
in April of 2000. This conference, attended by more than 400 representatives of pub-
lic, private, and academic organizations, covered a host of important issues. How-
ever, discussion about when an accident warrants criminal prosecution was a domi-
nant topic.
Two general themes emerged out of that symposium that bear repeating.
First, transportation safety is increasingly dependent on being able to spot trends,
to see problems as they arise, to anticipate failures from sophisticated data min-
ing, and from the sometimes not-so-sophisticated self-disclosure of the near misses.
This is an enormously productive field that is being pursued by almost all the regu-
latory agencies. And these agencies often include, as part of this type of program,
some form of prosecutorial immunity for persons and companies who participate.
FAA, for example, treats self-disclosure from pilots, or data derived from quick ac-
cess flight recorders as exempt from use in enforcement actions based on simple vio-
lations discovered. Of course the agency doesnt waive the right to proceed against
knowing violations, and may even do so criminally. What agencies do say is we
wont proceed against simple accidental behavior. Without such a promise, the data
wouldnt be forthcoming, and safety would be compromised.
And that is exactly the issue with the Clean Water Act. Simple negligence can
be treated as a criminal act, punishable by imprisonment. When accident investiga-
tors arrive on scene to find out what has occurred, they are in no way empowered
to grant any immunity from prosecution for pure mistakes. So if there has been wa-
terway contamination, prevention and understanding will take a back seat to legal
maneuvering.
If the NTSB hopes to make timely recommendations based on their investigations,
cooperation is necessary. NTSB recommendations form a basis by which the indus-
try involved in the accident can make changes to avoid a re-occurrence of the inci-
dent. And avoiding future incidents provides more value to the public than attempt-
ing to prosecute a company or an employee for an accident.
A second and related theme that developed at the NTSB symposium was the be-
lief that, while criminal enforcement can be an important tool, it should be directed
toward intentional or reckless behavior rather than non-intentional conduct. Crimi-
nal enforcement, strong civil and administrative remedies, and an independent in-
vestigative body such as the NTSB, are all essential tools in protecting public safety,
our transportation systems, and the environment. Criminal penalties do deter inten-
tional conduct, but have a much diminished and unproven relationship to pre-
venting purely accidental behavior.
Criminal enforcement, indiscriminately and routinely applied to ordinary indus-
trial accidents, can deny safety regulators the very information they need to decide
how to prevent similar accidents in the future. The rush to assess blame and punish
those connected with the accident inevitably forces this vital information behind
closed doors as the prosecution and the defendants prepare for a potential criminal
trial. The intent should be to promote cooperation rather than threaten parties with
punishment for things over which they had no control.
The language of the CWA, prosecutors increasing use of the criminal negligence
provisions of the CWA, and new views of the CWA taken by the courts have all com-
bined to deter post-event industry cooperation when CWA criminal violations are
potentially involved.
Individuals engaged in industrial activities that bring them in contact with water
face a difficult proposition. How should companies respond to parallel criminal and
accident investigations? In that situation, companies face conflicting demands on
one hand, they need to be responsive and open to the public, and on the other, they
the need to fairly protect their employees. That was one of the questions raised at
our symposium, and I still cannot adequately answer that question.
Another issue is the effect that the possibility of criminal prosecution will have
on hiring and retaining a skilled work force. Although I dont have direct experience,
this was a common complaint that I heard while at the NTSB, and one that is intu-
itive. If skilled employees are to be subject to criminal charges for their role in an
accident despite their training and the technologies at their disposal, then they will
be less likely to engage in those occupations. These positions would then have to
be filled with less qualified personnel or not filled at all, leaving the remaining em-
ployees over-extended. This could have a disastrous outcome and would be counter-
productive to the intent of the CWA.
Defense attorneys representing firms and individuals facing criminal liability for
accidental behavior often advise prudent reluctance in providing information to the
NTSB. Other times, the NTSB arrives at an accident scene after a criminal inves-
tigation has already begun in earnest, and simply inspecting evidence can be ex-
tremely difficult for Board investigators.
157
The bottom line is if the NSTB can do a thorough investigation, and can complete
its investigation, and have cooperation in that investigation, potential larger prob-
lems can be corrected before they cause future accidents or incidents. Whats more,
these problems can be understood in a broader context, and solutions can have an
industry-wide application through consensus reached with the regulators and the
firms involved.
However, a growing fear of criminal prosecution is rapidly compromising indus-
trys willingness to cooperate in safety investigations, and, while this is understand-
able, it is in the long run contrary to the interests of government and industry alike.
What is needed is a widespread agreement within the government not to proceed
criminally for purely accidental behavior, particularly where firms have agreed to
cooperate fully with the governments subsequent safety investigation. And amend-
ment of the Clean Water Act to make clear that simple negligence is not sufficient
for criminal prosecution is probably now necessary to recover from the tremors
caused by recent court cases, which have chilling implications for supervisors, and
managers who may be remote in time and place from the activities giving rise to
negligent spill.
I do not believe in a model of enforcement that immediately sends all the parties,
public and private, before a magistrate. I do believe in a robust regulatory regime
with adequate civil, administrative, and criminal teeth to ensure compliance. At the
same time, it is clearly counter-productive to the greater collective good to crim-
inalize ordinary industrial accidents.
While this issue deserves a thoughtful review by this Committee, I submit that
this one provision of the CWA clearly is inconsistent with the larger body of trans-
portation law, and the criminalization of simple negligence really has no place in
a statute not lacking for teeth.
My primary concern is information, and more of it. Investigators and regulators
need access to relevant information to do their jobs. To an increasing extent, infor-
mation is becoming harder to obtain which impacts the Boards ability to investigate
and make recommendations. We are all safer and more secure when we can learn
from these incidents, and implement improved technologies and procedures as a re-
sult.
In conclusion, it is my conviction that the balance between appropriately pursuing
individual wrong-doers on one-hand and the broader purpose of accident investiga-
tion and prevention on the other hand, tips more and more away from a focus on
prevention. We follow this road at our long-term peril.
When there is no malfeasance, but merely an accident, our overriding concern
should be fixing the problem, not the blame. By focusing criminal prosecutions
where they are most appropriate, we protect the rights of workers, address scarce
government resources in the most useful way, increase compliance and cooperation,
and find answers more swiftly that can, in turn, be applied to prevention. I urge
the Committee to think through this issue, and have no doubt the net result of a
positive change in this provision will be increased safety, continued reduction in the
number of incidents, and greater protection of our fellow citizens and the environ-
ment.
I thank the Committee for its consideration in allowing me to testify today. I
would be happy to answer any questions that you may have.
STATEMENT OF THE AMERICAN WATERWAYS OPERATORS

The American Waterways Operators (AWO) appreciates the opportunity to submit
this statement for the hearing record. AWO is the national trade association rep-
resenting Americas inland and coastal tugboat, towboat, and barge industry, the
largest segment of the U.S.-flag domestic maritime industry. AWOs 375 member
companies include the owners and operators of tugboats, towboats, and barges that
move more than 800 million tons of Americas cargo every year, including dry, liq-
uid, containerized and specialty cargoes on the inland river system, the Atlantic, Pa-
cific, and Gulf coasts, and the Great Lakes. The transportation of petroleum and pe-
troleum products is a key segment of our industrys business: tank barges move 20
percent of the oil that fuels our economy and keeps our cars running and our homes
warm. Powerful, state-of-the-art tugboats also provide tanker escort services to fa-
cilitate the safe movement of petroleum cargoes in busy ports and harbor ap-
proaches.
Chairman Inhofe and Senator Baucus, AWO would first like to thank you for con-
vening this hearing to examine issues related to the Clean Water Act. AWO and
its member companies are deeply committed to marine safety and environmental
protection. We understand that one of the issues addressed at todays hearing will
158
be criminal liability for oil spill incidents. We believe that criminal liability, when
imposed under OPA 90, should be employed only where a discharge is caused by
conduct that is truly criminal in nature, i.e., where a discharge is caused by reck-
less, intentional or other conduct deemed criminal. We agree that the current neg-
ligence standard in OPA 90 is a lower threshold than traditionally seen for crimi-
nal liability. Criminal culpability in the United States typically requires intentional
actions or omissions by individuals.
In addition, we are very concerned that responsible operators are exposed to
criminal fines and potential imprisonment for maritime transportation-related oil
spills due to the application and use of antiquated and unrelated strict criminal li-
ability statutes. Strict criminal liability imposes criminal sanctions without requir-
ing a showing of criminal knowledge, intent or even negligence. AWO and its mem-
bers are very troubled, as are other responsible, law-abiding maritime interests, by
both the Justice Departments increasing willingness in the post-OPA 90 environ-
ment to use strict criminal liability statutes and the increasing attention to criminal
enforcement in oil spill incidents. These Federal actions imposing strict criminal li-
ability have created an atmosphere of extreme uncertainty for AWO members about
how to respond and cooperate with the Coast Guard and other Federal agencies in
cleaning up an oil spill. Strict criminal liability statutes such as the Migratory Bird
Treaty Act (16 U.S.C. 703 et.seq.) and the Refuse Act (33 U.S.C. 407, 411)statutes
that were enacted at the turn of the century to serve other purposeshave been
used to harass and intimidate the maritime industry, and in effect, have turned
every oil spill into a potential crime scene without regard to the fault or intent of
companies, corporate officers and employees, and mariners.
The Migratory Bird Treaty Act (MBTA) provides that it shall be unlawful at any
time, by any means or in any manner, to pursue, hunt, take, capture, kill, attempt
to take, capture, or kill any migratory bird . . ., a violation of which is punishable
by imprisonment and/or fines. Prior to the Exxon Valdez oil spill in 1989, the MBTA
was primarily used to prosecute the illegal activities of hunters and capturers of mi-
gratory birds, as the Congress originally intended when it enacted the legislation
in 1918. In the Exxon Valdez case itself, prior to the enactment of OPA 90, the
MBTA was first used to support a criminal prosecution against a vessel owner in
relation to a maritime oil spill, and this hunting statute has been used since
against the maritime industry. The Refuse Act was enacted over 100 years ago at
a time well before subsequent Federal legislation essentially replaced it with com-
prehensive requirements and regulations specifically directed to the maritime trans-
portation of oil and other petroleum products.
OPA 90 provides a statutory framework for proceeding against individuals for
civil and/or criminal penalties arising out of oil spills in the marine environment.
When Congress crafted OPA 90, it balanced the imposition of stronger criminal and
civil penalties with the need to promote enhanced cooperation among all of the par-
ties involved in the spill prevention and response effort. OPA 90 imposes criminal
liability for negligent violations and provides for punishment of up to 1-year impris-
onment and/or fines between $2,500 and $25,000 per day. The punishment for each
knowing violation was increased by OPA 90 to up to 3-years imprisonment and/or
fines between $5,000 and $50,000 per day. Furthermore, OPA 90 added and/or sub-
stantially increased criminal penalties under the following pre-existing laws which
comprehensively govern the maritime transportation of oil and other petroleum
products:
Negligent Vessel Operations. 46 U.S.C. 2302
Vessel Inspections. 46 U.S.C. 3318
Carriage of Liquid Bulk Dangerous Cargoes. 46 U.S.C. 3718
Vessel Load Lines. 46 U.S.C. 5116
Foreign Commerce Pilotage. 46 U.S.C. 8503(e)
Ports and Waterways Safety Act. 33 U.S.C. 1232(b)
Intervention on the High Seas Act. 33 U.S.C. 1481(a)
Deepwater Port Act of 1974. 33 U. S.C. 1514(a)
Act to Prevent Pollution from Ships. 33 U.S.C. 1908(a)
Congress, by omitting the Migratory Bird Treaty Act and the Refuse Act from this
list of existing statutes modified by OPA 90, apparently did not anticipate or intend
their use in the case of maritime oil spills.
In the event of an oil spill, a responsible party not only must manage the cleanup
of the oil and the civil liability resulting from the spill, but also must protect itself
from the criminal liability that now exists due to the available and willing use of
strict criminal liability laws by the Federal Government. Managing the pervasive
threat of strict criminal liability, by its very nature, prevents a responsible party
from cooperating fully and completely in response to an oil spill situation. The OPA
90 blueprint of prevention and response is no longer clear. The use of the strict
159
criminal liability statutes has undermined the spill prevention and response objec-
tives of OPA 90, the very goals that were established by Congress to preserve the
environment, safeguard the public welfare, and promote the safe transportation of
oil.
Archaic statutes such as the Migratory Bird Treaty Act and the Refuse Act are
unrelated to the regulation and enforcement of oil transport activities and were not
included within OPA 90 as one of the many applicable statutes where criminal li-
ability could be found. Without the elimination of the use of such strict liability stat-
utes, the maritime industry cannot avoid exposure to criminal liability, regardless
of how diligently it adheres to prudent practice and safe environmental standards.
As stated the U.S. Coast Guards own environmental enforcement directive, a com-
pany, its officers, employees and mariners, in the event of an oil spill could be con-
victed and sentenced to a criminal fine even where [they] took all reasonable pre-
cautions to avoid the discharge. (Criminal Enforcement of Environmental Laws,
U.S. Coast Guard Commandant Instruction M16201.1 of 30 July, 1997.)
The exposure of mariners and management to criminal liability regardless of fault
has had a negative impact on the recruitment and retention of qualified and com-
mitted personnel for the maritime transportation of oil and petroleum products. At
a 1998 hearing of the Subcommittee on Coast Guard and Maritime Transportation
of the House Committee on Transportation and Infrastructure, several working
mariners noted this development. One Captain with long experience in the industry
indicated that he could not recommend a similar career path to his children because
of the uncertainty created by the existence of strict liability. A witness from the
management of a company that transports petroleum testified that his company had
modified its response protocol and had retained criminal counsel to assist in the
event of a spill because of the potential impact of criminal liability on the company
and its employees. At conferences held in 2001 and 2002, jointly sponsored by the
Coast Guard, industry and labor organizations, criminal liability was identified as
one of six factors affecting the recruitment and retention of mariners. The conclu-
sion of the group considering criminal liability was that (t)he unjustifiably low
threshold for prosecution inhibits the recruitment and the retention of mariners.
The group recommended changes in the laws governing criminal liability in the
event of oil spills.
Criminal sanctions under OPA 90 should follow the traditional notion of what con-
stitutes criminal acts in this countrynamely, that a crime occurs when a knowing,
intentional act is committed. AWO respectfully requests that the Environment and
Public Works Committee take the lead on this critical issue by: (1) reaffirming the
traditional definition of criminal conduct for prosecutions in oil spill incidents; and,
(2) reasserting the preeminent role of OPA 90 as the statute providing the exclusive
criminal penalties for oil spills. Such legislation would ensure increased cooperation
and responsiveness, while not diluting the deterrent effect of stringent criminal pen-
alties imposed under OPA 90 itself.
Thank you again for the opportunity to present this statement for the hearing
record.
STATEMENT OF THE AMERICAN SOCIETY OF CIVIL ENGINEERS

Mr. Chairman and Members of the Subcommittee, the American Society of Civil
Engineers (ASCE) is pleased to offer this statement to the Subcommittee for the
hearing on issues related to the implementation of the Clean Water Act.
ASCE was founded in 1852 and is the countrys oldest national civil engineering
organization. It represents more than 130,000 civil engineers in private practice,
government, industry, and academia who are dedicated to the advancement of the
science and profession of civil engineering.
I. POLICY RECOMMENDATIONS
ASCE supports a Clean Water Act (CWA) that maximizes, to the extent pos-
sible, the protection of our nations waters and the beneficial use of those waters.
The Act should aggressively address nonpoint source pollution from watersheds and
also point sources, including from sanitary sewer overflows, combined sewer over-
flows, and storm sewer discharges.
National policy should protect the beneficial uses of the nations water and be
flexible enough to allow innovative practices and means to achieve these goals.
Water quality should be protected at the source through cooperative partner-
ships that utilize financial incentives or other market-based mechanisms. Emphasis
needs to be given to protecting water quality and habitat from adverse impacts of
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wet weather flows, including non-point sources, stormwater, and combined sewer
overflows.
II. BACKGROUND
Wastewater treatment is now well established throughout the Nation, and the de-
sign, construction, and maintenance of treatment plants is understood. There is still
a need for controlling other sources of point source pollution (e.g. stormwater wet
weather systems, combined sewer overflows, sanitary sewer overflows, and
stormwater discharges) and a much greater effort is needed to control nonpoint
sources of pollution.
Measuring the effects of nutrients as well as toxic pollutants on water quality and
ecosystems requires further research. Establishing source water programs will mini-
mize downstream pollution programs. Watershed approaches to water-quality man-
agement offer the best way to integrate management of diverse pollution sources
with the wide range of water usages seen in the United States.
The Federal Water Pollution Control Act is the principal law that deals with pol-
lution in the nations streams, lakes, and estuaries.1 The Act, commonly referred to
as the Clean Water Act, is one of the landmark statutes of the twentieth century,
. . . .2
The Act consists of two major parts: a regulatory scheme that imposes progres-
sively more stringent requirements on industries and cities to abate pollution and
meet the statutory goal of zero discharge of pollutants and provisions that authorize
Federal financial assistance for municipal wastewater treatment plant construction.
Both are supported by permit and enforcement provisions. Programs at the Federal
level are administered by the Environmental Protection Agency (EPA); the Act al-
lows EPA to delegate enforcement and permitting authority to the states, and they
have major responsibilities to implement the Acts programs.
In 1972, Congress declared that it intended to restore and maintain the chemical,
physical, and biological integrity of the nations waters.3 These objectives were ac-
companied by statutory goals to eliminate the discharge of pollutants into navigable
waters by 1985 and to attain, wherever possible, waters deemed fishable and swim-
mable by 1983. While the goals have not been entirely achieved, progress has been
made, especially in controlling conventional pollutants (suspended solids, bacteria,
and oxygen-consuming materials) discharged by industries and municipal sewage
treatment plants. These discrete sources are easily identifiable and regulated.
The Act focuses on two possible sources of pollution: point sources and nonpoint
sources. Adopting a command-and-control response to water pollution, Congress
dealt with the problem of point source pollution using the National Pollution Dis-
charge Elimination System (NPDES) permit process. Under this approach, compli-
ance rests on technology-based controls that limit the discharge of pollutants from
any point source into certain waters unless that discharge complies with the Acts
specific requirements.4
When the NPDES system fails to adequately cleanup certain rivers, streams, or
smaller water segments, the Act requires use of a water-quality based approach.
States are required to identify such waters, which are to be designated as water
quality limited segments (WQLS). The states must then rank these waters in order
of priority, and based on that ranking, calculate levels of permissible pollution called
total maximum daily loads or TMDLs.5
TMDLs are the maximum quantity of a pollutant the water body can receive on
a daily basis without violating the water quality standard. The TMDL calculations
are to ensure that the cumulative impacts of multiple point source discharges and
nonpoint source pollution are accounted for. The TMDL does not establish direct
controls over pollutants, however. It is a technology-forcing program that may re-
quire pollutant sources within a watershed to install new pollution-control devices.
States may then institute whatever additional cleanup actions are necessary,
which can include further controls on point and nonpoint pollution sources. Under
the Act, states are required to submit lists of WQLSs and TMDLs to the EPA at
certain times; the first were due by June 26, 1979.6
The TMDL program regulates waste load allocations for point sources, watershed
allocations for nonpoint sources, and includes a margin of safety. It was intended
to serve as a backstop to the NPDES permit program.
Section 303(d) and the TMDL program were included in the Act as a second-
string safeguard against failure of the primary water quality improvement
mechanism, the NPDES program. As a result of its backup status, the TMDL
program was not aggressively or broadly pursued until the late 1980s and early
1990s when it became clear that the NPDES program alone could not solve the
countrys water quality problems.7
161
The NPDES and TMDL approaches sanction the controlled release of pollutants
into the ambient environment. Like virtually every aspect of the American environ-
mental protection system, the programs assume that a certain amount of pollution
an external diseconomyis acceptable in order to maintain the overall wealth and
security of the Nation.
Such a tradeoff between economic welfare and ecological protection, while politi-
cally essential, cannot provide the most advantageous outcome to environmental
degradation, however. Every contaminant release, no matter how well controlled, re-
sults in a progressively greater pollutant load on the environment, although it may
be argued that the burden likely grows more slowly because the releases occur at
less toxic levels than if there were no NPDES program at all.
The use of economic tools to assess the ecological effects of market-based activities
in order to alleviate environmental pollution is a relatively new phenomenon. But
human economic welfare, not the physical welfare of ecosystems or species, is at the
heart of all neoclassical economic analysis.
In neoclassical economic theory, groups and individuals act to advance their own
economic self-interest. Non-economic considerationsincluding real or potential
damages to the commons from industrial pollution or other threats to the environ-
ment from economic activityare not possible. This is because all market-driven
economic systems are unsentimental and utilitarian; they do not place the preserva-
tion of natural resources above the need to improve the economic welfare of individ-
uals and groups in the economy. The central function of neoclassical economics is
the well-being of the consumers (and producers) who make up the economy.8
To state it clearly:
The hallmark of welfare economics is that policies are assessed exclusively in
terms of their effects on the well-being of individuals. Accordingly, whatever is
relevant to individuals well-being is relevant under welfare economics, and
whatever is unrelated to individuals well-being is excluded from consideration
under welfare economics.9
Because classical economics concentrates on the control of pollution only as it af-
fects the economic utility of agents in the economy, it frequently ignores the effect
of pollution on economic activity and the resulting restrictions placed on the econ-
omy by increasingly polluted (and therefore scarcer) ecosystem resources.
Although the severe economic functionalism has been somewhat softened by a
host of environmental laws like the Clean Water Act and other regulations gov-
erning virtually every aspect of American financial and industrial life, the use of
economics to measure the benefits of these protective laws remains controversial. In-
deed, the advent of new economic approachesoften called natural capitalism or
resource economicssimply exacerbates the old problem of how best to allocate
scarce natural resources.10
Despite some obvious disadvantages, however, economic solutions to environ-
mental problems are increasingly seen as preferable by policymakers looking for dif-
ferent solutions to pollutant-control issues and ecological degradation.
[There is] a general trend toward using market mechanisms to attain envi-
ronmental protection objectives. Market-based programs operate under the as-
sumption that allowing regulated entities to choose among a range of compli-
ance options results in more efficient environmental management than does tra-
ditional command-and-control regulation. Essentially, environmental markets
attach costs to environmentally damaging activities and values to environ-
mental benefits, thereby encouraging companies and individuals to consider the
environmental impact of their activities. Regulators increasingly are turning to
taxes, subsidies, unit charges, deposit-refund schemes, and tradable permit pro-
grams to force regulated entities to internalize environmental costs.11
III. IMPLEMENTATION OF THE CLEAN WATER ACT
A. The National Pollutant Discharge Elimination System

The EPA frequently has lauded its efforts and those of its state partners to pro-
tect the nations waters from point sources regulated under the NPDES permitting
program. Over the nearly thirty years since enactment of the Clean Water and Safe
Drinking Water Acts, we have worked together at all levels to make remarkable
progress in improving the quality of surface waters and the safety of drinking
water.12
The admiration is not universally shared. Critics have noted, for example, that
EPA has never been very interested in pursuing a broad interpretation of the Clean
Water Act that would construe some of the statutes ambiguities to fit the scope of
the nations water pollution problem.13 Another states: Unfortunately, point source
162
controls have reached the limits of their effectiveness, yet water quality remains
ubiquitously substandard nationwide. While Americas rivers and harbors no longer
catch fire, thousands of waterways fail to meet water quality standards despite
point source regulation.14
The nations remaining water quality problems are varied, ranging from runoff
from farms and ranches, city streets, and other widely distributed sources to metals
(especially mercury), organic and inorganic toxic substances discharged from fac-
tories and sewage treatment plants, as well as numerous nonpoint sources.
Whatever limited success the Act has enjoyed is due almost entirely to Federal
and state efforts to apply the NPDES program to control point sources. Inadequate
nationwide data make it difficult to assess the scope of the remaining water quality
issues.
In 2000, the latest year for which data are available, EPA concluded from an ex-
tremely narrow examination of the nations waters that only 61 percent of assessed
river and stream miles; 54 percent of assessed lake acres; 49 percent of assessed
estuarine square miles; and 22 percent of assessed Great Lakes shoreline miles sup-
ported the water quality standards evaluated.15
B. Total Maximum Daily Loads
The Total Maximum Daily Load (TMDL) program languished for decades. Despite
the mandate in the Act, after 30 years, there are still more than 22,000 impaired
waters nationwide, with an estimated 48,000 individual impairments in these water
bodies, according to the EPA.16 The states, who have been delegated to implement
the TMDL program under EPA oversight, have generally failed to carry out their
section 303(d) duties.17
The TMDL provision . . . is a relic of the previous strategy that calls for
states to manage pollution loading into waterways that, despite point source
regulation, do not meet water quality standards. With a few exceptions, the
states have consistently bowed to political pressure and not established TMDLs.
In addition . . . EPA had virtually ignored its mandate to evaluate state
TMDLs.18
The program was reinvigorated in the 1980s and 1990s after environmental
groups began making use of the Acts citizen suit provisions to go to court to force
EPA and the states to speed the approval of TMDLs. Because the Act requires EPA
to develop a priority list for the state and make a Federal TMDL determination if
a state fails to set TMDLs for its impaired water bodies, the suits met an initial
round of judicial successes.
Numerous judicial rulings employed the doctrine of constructive submission to
require the EPA to issue a TMDL when states failed (often for many years) to sub-
mit a TMDL for EPA approval. The doctrine held that a states failure to submit
any TMDLs effectively was a constructive submission of no TMDLs, thus requiring
EPA to act.19 Lately, however, environmentalists have found a less friendly recep-
tion at the courthouse. In a recent shift from earlier decisions, at least two Federal
appellate courts have narrowed the doctrine to situations in which a state clearly
refuses to adopt a TMDL and the EPA delays action unreasonably.20 The burden
of conclusively proving Federal and state obduracy is now nearly insurmount-
able.21
C. Water Quality Trading
In January 2003, EPA sought to ration water pollution in U.S. watersheds. It
adopted a new Water Quality Trading Policy designed, in part, to move away from
top-down regulations and to establish a market-based program by which state and
tribal governments may attain the required TMDLs for their impaired water bod-
ies.22
[M]arket-based approaches such as water quality trading provide greater
flexibility and have potential to achieve water quality and environmental bene-
fits greater than would otherwise be achieved under more traditional regulatory
approaches. . . . [T]he policy is intended to encourage voluntary trading pro-
grams that facilitate implementation of TMDLs, reduce the costs of compliance
with CWA regulations, establish incentives for voluntary reductions and pro-
mote watershed-based initiatives.23
The modified cap-and-trade policy focuses on total emissions of nutrients and
sediment in a watershed. It caps total pollutant emissions and encourages pollution
reductions through the trading of nutrients and sediment from point and nonpoint
sources. Trades of other pollutants are possible, but the Agency will oppose any
163
trades involving persistent bioaccumulative toxics in the absence of evidence that
such a trade would achieve a substantial reduction of the pollutant.
The Water Quality Trading Policy is similar to the program for sulfur dioxide
emissions established under the Clean Air Act Amendments of 1990. In title IV,
Congress authorized EPA to create a tradable emissions market for sulfur dioxide
(SO2). The SO2 program produced a market for pollution permits (allowances) in
order to reduce emissions from older, less efficient electric generating plants. The
CAA Amendments established a cap-and-trade system whereby the government
capped emissions from generating units at each plant. (Many plants have more than
one generating unit subject to the cap.)
In general, an ambient pollution permit for a given environmental receptor (air,
water, or land) gives the holder the right to emit a pollutant at any location, pro-
vided that the incremental pollution emitted into the specific receptor does not ex-
ceed the permitted amount. The marginal savings to the permit holder should equal
the permit price. When the price of a permit is greater than the savings from releas-
ing the pollutant, the allowance holder will try to sell some allowances and emit
fewer pollutants.
Theoretically, allowance trading creates more flexibility than the standard com-
mand-and-control policies in the reduction of pollutants. The increased efficiency re-
sulting from a tradable permit system potentially allows environmental regulators
to tighten emission standards, resulting in less pollution while still holding costs at
their initial level.
A central feature of any emissions trading program is that it shifts the burden
of designing and locating pollution controls from the government to industry. Fi-
nally, three points in determining the economic significance of pollution allowances
must be kept in mind:
A market equilibrium exists in the buying and selling of ambient pollution per-
mits for any initial issuance of permits.
Emissions from each source in a permit market equilibrium are efficient (the
least costly way of attaining the efficient level of pollution for each environmental
receptor) no matter how the permits are initially distributed.
If the price of the permits in equilibrium equals the marginal damage from pol-
lution, economic efficiency has been obtained.24
The CAA Amendments granted allowance holders with a surplus of credits a Fed-
eral license to release one ton of SO2 emissions or to sell the allowances to another
generating unit. The allowances transfer pollutant abatement from high-cost gener-
ating units to ones that cost less, thus improving economic efficiency.
Under the Amendments, owners of existing generating units are given fixed num-
bers of tradable allowances each year following rules that depend primarily on his-
toric emissions and fuel use. Each allowance entitles its holder to emit one ton of
SO2. A small number of additional allowances are auctioned annually by the EPA,
with the revenues rebated to utilities roughly in proportion to their allowance allo-
cations.
New units must buy needed allowances from existing units or at the EPA auc-
tions. Each covered generating unit must deliver to EPA valid allowances sufficient
to cover each years emissions within 30 days of years end or incur serious pen-
alties. Allowances can be bought or sold without restrictions to cover emissions from
any generating unit in the U.S.25 The overall amount of SO2 released by all units
remains the same as long as the number of permits does not increase.
Opinion among economists as to the supposed superiority of the cap-and-trade
system is divided, however. Command-and-control regulations may be more protec-
tive and more cost-effective if they result in reductions in environmental pollutants
below the standard set in the regulations. This over control may make command-
and-control policies more expensiveand more efficient.26
The evidence is ambiguous as to whether marketable permits have stimulated
any more innovation in pollution control than the command-and-control techno-
logical restrictions. Marketable permits have proved to be administratively cum-
bersome.27
Under the 2003 Water Quality Trading Policy, emissions of sediment and nutri-
ents are to be capped in the form of the waste load established under a TMDL for
point and nonpoint sources. For water bodies or watersheds for which there are no
TMDLs at the time of the trade the caps are implied, according to EPA.
In watersheds with approved TMDLs, the watershed itself effectively will be
treated as if it were a more traditional point source under the Policy; in watersheds
without a TMDL at hand, the task of establishing regulatory baselines in order to
determine the allowances to be traded will be exceedingly difficult in the absence
of good data on total emissions of the covered pollutants.
164
It is this feature of the new Water Quality Trading Policythe attempt for the
first time to measure and regulate emissions from nonpoint sources within an entire
watershed with implied capsthat holds the greatest challenge for the Agency. Al-
most certainly, the regulation of these widespread regional pollutants promises to
be difficult, as the EPA concedes in its January announcement.28
IV. POLICY CONSIDERATIONS FOR THE SUBCOMMITTEE
A. The Subcommittee Should Consider Legislation to Establish a Water Quality

Trading Program at EPA
EPA has established the Water Quality Trading Policy without explicit congres-
sional authorization. Although the Agency claims that the Policy is supported by the
existing Clean Water Act, this point is at least arguable. EPA established its air
quality trading program in 1974, but Congress did not codify Agency practices until
1990. In the absence of statutory authority, such a lengthy deferral in establishing
a clear congressional role for pollutant trading under the Clean Air Act postponed
the ecological reckoning by many years years in which independent analysts raised
serious questions about the environmental worth of the Agencys air quality
trades.29
To eliminate any doubts as to the legality and efficacy of the program, Congress
should enact enabling legislation within the Clean Water Act. The legislation should
contain explicit safeguards and a strong and continuing oversight role for Congress,
including the use of regular audits of the water quality trading program by the Gen-
eral Accounting Office (GAO) and independent analyses of its utility by the Congres-
sional Budget Office (CBO).
B. Congress Must Monitor the EPA Water Quality Trading Program Closely
Cap-and-trade programs generally have reduced the regulatory burden on indus-
try and increased its welfare, but they have not had large or unusually positive ef-
fects on the environment. They merely place a limit on total emissions of a given
pollutant in a given area, and then allow firms that emit this pollutant to trade ex-
cess emissions allowances (each allowance entitles the user to emit a certain
amount) with each other and with other third-party traders. These types of pro-
grams can be contrasted with command-and-control programs, which tend to be
more prescriptive and more expensive for industry, requiring regulated units to in-
stall various types of pollution-control equipment.30
It is important to remember, however, that emissions trading programs are heav-
ily dependent upon historic emissions data. The permits are not simply a means of
improving economic efficiency for polluters or for abolishing the standard techno-
logical controls; they are meant to ration the release of pollutants governed by the
allowances into the ambient environment based upon well established past prac-
tices.
Congress needs to maintain a close watch on the EPA Water Quality Trading Pol-
icy as it evolves. There are enough uncertainties associated with this particular pol-
icy, especially its unique approach to the trading pollutants from area sources, that
it must be carefully overseen.
Among the issues that need to be carefully assessed are the timing of the permits,
knowing how the monitoring data are to be obtained, and determining the appro-
priate government inspection schedule. Penalties for violating the permit must be
greater than the permit price so that producers will stay within the rules of the
market.
It is especially important for Congress to assess the marketable permit system for
water bodies for which no TMDL has been approved early in the process. Without
hard data on historic emissions within a watershed, it will be extremely difficult for
the EPA to measure the amount of nutrients and sediment to establish in the initial
permit issuance. Congress must insist on the best data available or consider prohib-
iting trades in non-TMDL watersheds.
NOTES
1 33 U.S.C.A. 1251 et seq. (West 2003).
2 William L. Andreen, The Evolution of Water Pollution Control in the United
StatesState, Local, and Federal Efforts, 17891972: Part II, 22 Stan. Env. L.J.
215, 216 (2003).
3 William H. Rodgers Jr., Environmental Law 248 (2d ed. 1994).
4 33 U.S.C.A. 1311(a), 1362(12) (West 2003).
5 San Francisco BayKeeper v. Whitman, 297 F.3d 877, 880 (9th Cir. 2002).
6 See Id.
165
7 Jim Vergura and Ron Jones, The TMDL Program: Land Use and Other Implica-
tions, 6 Drake J.Agric. L. 317, 320 (2001) (citations omitted).
8 Kalman Goldberg, the Market System 57 (2000).
9 Louis Kaplan and Steven Shavell, Fairness Versus Welfare, 114 Harv. L. Rev.
961, 977 (2001).
10 Paul Hawken et al., Natural Capitalism (1999). ([H]umankind is facing a his-
toric juncture: For the first time, the limits to increased prosperity are due to the
lack not of human-made capital but rather of natural capital.)
11 David Sohn and Madeline Cohen, From Smokestacks To Species: Extending The
Tradable Permit Approach From Air Pollution To Habitat Conservation, 15 Stan.
Envtl. L.J. 405, 408 (1996) (footnote omitted).
12 Statement of G. Tracy Mehan III, Assistant Administrator for Water, U.S. EPA,
before the Subcommittee on Water Resources and Environment, Committee on
Transportation and Infrastructure, U.S. House of Representatives, Feb. 27, 2003, at
http://www.epa.gov/water/speeches/022703tm.html (last visited Sept. 11, 2003).
13 Michael C. Blumm and William Warnock, Roads Not Taken: EPA vs. Clean
Water, 33 Envtl. L. 79 (2003) (concluding that the Agency has failed miserably to
carry out the point and nonpoint source control programs in the Act due to political
expediency).
14 Debbie Shosteck, Pronsolino v. Marcus, 28 Ecology L.Q. 327, 328329 (2001)
(footnotes omitted).
15 Environmental Protection Agency, 2000 National Water Quality Inventory Re-
port to Congress ES5 (2002), at http://www.epa.gov/305b (last visited Sept. 11,
2003) Less than half of all U.S. waters were assessed in 2000. States assessed 19
percent of the nations total river and stream miles; 43 percent of its lake, pond,
and reservoir acres; 36 percent of its estuarine square miles; and 92 percent of
Great Lakes shoreline miles.
16 Environmental Protection Agency, National Section 303(d) List Fact Sheet, at
http://oaspub.epa.gov/waters/nationalrept.control (last visited Sept. 11, 2003).
Approximately 9,100 separate TMDLs nationally covering the more than 22,000 im-
paired water bodies have been completed since 1972. Indeed, most of them have
been completed only since 1996. Id.
17 See U.S. General Accounting Office, Clean Water Act: Proposed Revisions to
EPA Regulations to Clean Up Polluted Waters (2000). ([State] compliance with ex-
isting TMDL regulations has been problematic, and future compliance in the ab-
sence of the proposed regulation [of 2000] is uncertain . . .).
18 Shosteck, Pronsolino supra note 14, at 330.
19 See, e.g., Scott v. Hammond, 741 F.2d 992, 998 (7th Cir. 1984) (holding that
the Clean Water Act undoubtedly imposes mandatory duties on both the states and
the EPA); Alaska Center for the Environment v. Reilly, 762 F. Supp. 1422, 1429
(1991) (Section 303(d) expressly requires the EPA to step into the states shoes if
their TMDL submissions or lists of water quality limited segments are inadequate.)
affd sub nom. Alaska Center for the Environment v. Browner, 20 F.3d 981 (9th Cir.
1994); Defenders of Wildlife v. Browner, 909 F. Supp. 1342 (1995) (same); Natural
Resources Defense Council v. Fox, 909 F. Supp. 153 (1995) (same); Sierra Club v.
Hankinson, 939 F. Supp. 865 (1996) (same); Raymond Profitt Foundation v. EPA,
930 F. Supp. 1088 (1996) (same); Idaho Conservation League v. Browner, 968 F.
Supp. 546 (1997) (same).
20 See San Franscisco Baykeeper supra note 5, at 883 (holding that, because the
State of California had submitted at least 18 TMDLs for pollutants received by wa-
ters designated as WQLS and had established a schedule for completing its remain-
ing TMDLs, the constructive submission doctrine, under which complete failure by
state to submit TMDLs was treated as decision not to submit TMDLs, did not
apply); see also Hayes v. Whitman, 264 F.2d 1017, 1023 (10th Cir. 2001) (Only
upon [a] determination that the states inaction was so clear as to constitute a con-
structive submission of no TMDLs would the EPA then incur a nondiscretionary
duty to approve or disapprove the constructive submission.).
21 James R. May, Where The Water Hits The Road: Recent Developments in Clean
Water Act Litigation, 33 Envtl. L. Rep. 10,369 (2003).
22 Environmental Protection Agency, Water Quality Trading Policy; Issuance of
Final Policy, 68 Fed. Reg. 1608 (Jan. 13, 2003).
23 Environmental Protection Agency, water quality trading policy 12 (Jan. 13,
2003), at http://www.epa.gov/owow/watershed/trading/finalpolicy2003.html (Last vis-
ited Sept. 10, 2003).
24 Charles C. Kolstad, Environmental Economics 163 (2000).
25 Richard Schmalensee et al., An Interim Evaluation of Sulfur Dioxide Emissions
Trading, 12 J. Econ. Persp. 53 (1998). See also Susanne M. Schennach, The Econom-
166
ics of Pollution Permit Banking in the Context of Title IV of the 1990 Clean Air
Act Amendments, 40 J. Envtl. Econ. and Mgmt. 189 (2000).
26 See W.E. Oates et al., The Net Benefits of Incentive-Based Regulation: A Case
Study of Environmental Standard Setting, 79 Am. Econ. Rev. 1233 (1989).
27 Nick Hanley et al., Environmental Economics in Theory and Practice 88 (1997).
28 See 68 Fed. Reg. at 1612.
29 See, e.g., Robert W. Hahn and Gordon L. Hester, Where Did All the Markets
Go? An Analysis of EPAs Emissions Trading Program, 6 Yale J. on Reg. 109, 151
(1989) (concluding that, after 15 years of air emissions trading, the program had
provided billions of dollars worth of pollution-control savings to industry, but also
determining that the EPA-designed program had had a negligible effect on the envi-
ronment).
30 The United States is not the only Nation to experiment with cap-and-trade per-
mits for pollutants from area sources. In 2001, the European Union established a
cap-and-trade program for governing greenhouse gas emissions among EU countries.
See Michael JH. Smith and Thierry Chaumeil, Greenhouse Gas Emissions Trading
within the European Union: An Overview of the Proposed European Directive, 13
Fordham Envtl. L.J. 207 (2002).
STATEMENT OF ROBIN GREENWALD, CLINICAL PROFESSOR OF LAW, RUTGERS SCHOOL

OF LAW, NEWARK, NJ; FORMER ASSISTANT CHIEF, ENVIRONMENTAL CRIMES SEC-
TION, DEPARTMENT OF JUSTICE; ASSISTANT U.S. ATTORNEY, EASTERN DISTRICT OF
NEW YORK
Mr. Chairman, Mr. Ranking Member, Members of the Committee, thank you for
considering my comments on the oil industrys proposal to amend Section 309 of the
Clean Water Act to require human endangerment as a prerequisite for criminal neg-
ligence. Based on my experiences spanning more than 10 years prosecuting environ-
mental crimes cases, including prosecuting negligent Clean Water Act cases, I am
submitting this written testimony in opposition to the proposed legislative amend-
ment and to encourage the Committee to reject its proponents smoke and mirrors
argument that Section 309 of the Clean Water Act impedes safety investigations
conducted by the National Safety Transportation Board. Recent decisions by the
Ninth and Fourth Circuit Courts of Appeals have not changed the standard for pros-
ecuting negligent Clean Water Act cases and, to date, Section 309 has not impeded
NSTB investigations.
In the cloak of concern for comprehensive NSTB investigations following oil spills,
the oil industry is pressuring Members of Congress from oil-rich states to weaken
substantially an important, and sparingly used, Clean Water Act criminal provision,
Section 309 of the Clean Water Act, which carries misdemeanor penalties for neg-
ligently violating the Clean Water Act.1 In fact, under Federal law, section 309 has
not interfered and should not interfere with NSTB investigations, and in those pre-
cious few cases in which a negligent CWA criminal investigation and a NSTB inves-
tigation are proceeding simultaneously, there are procedures available, when appro-
priate, to ensure that an important and time-sensitive safety concern is fully and
expeditiously investigated.
The recent interest in this statutory amendment appears to be the prosecutions
of two negligent CWA cases, United States v. Hanousek2 and United States v.
Hong3. Neither of these cases, however, represents a departure from the type of neg-
ligent CWA prosecutions brought by the Department of Justice since Congress
amended the Clean Water Act in 1987 to add Section 309, nor do the decisions af-
firming the convictions in Hanousek and Hong constitute a departure from well-es-
tablished criminal negligence law. In each of these cases, neither defendant was
prosecuted for what was a simple accident, as the oil industry suggests. Indeed,
in the case of an accident that results from conduct that was reasonable under
the circumstances, the type of conduct to which the oil industry refers, no criminal
liability would attach under Section 309. It is only when a person causes an event
that violates the Clean Water Act, such as a catastrophic oil spill, as a result of
his or her failure to exercise the care that a reasonable person would have taken
1 In an article by two former chiefs of the Department of Justice, Environmental Crimes Sec-
tion, Ronald Sarachan and Steven Solow, the authors undertake a statistical analysis of the
total number of negligence based Federal environmental crimes prosecutions compared to the
total number of Federal environmental crimes prosecuted over a 10-year span, from 1987 to
1997. In total, of the 1,436 environmental criminal prosecutions during that decade, only 86,
or approximately 6 percent, of the prosecutions were negligence cases.
2 176 F.3d 1116 (9th Cir. 1999), cert. denied, 528 U.S. 1102 (2000).
3 242 F.3d 528 (4th Cir. 2001), cert. denied, 112 S.Ct. 60 (2001).
167
under similar circumstances that the person is subject to negligent CWA prosecu-
tion. This is precisely the type of criminally negligent conduct that occurred in the
events leading up to the Clean Water Act criminal violations in the Hanousek and
Hong cases, and it is the very type of criminal negligence prosecutions Congress con-
templated when it enacted Section 309.
A review of the facts in Hanousek and Hong illustrate these points. In Hanousek,
the defendant was engaged in rock blasting operations adjacent to what defendant
knew was an old pipeline. Hanouseks predecessor had created a protective work
area around the blasting operations to ensure that the pipeline was not com-
promised during the blasting operations. When Hanousek became the manager of
the operations, with full knowledge of the pipelines proximity to the blasting oper-
ations, he stopped protecting the pipeline. As a result, the pipe broke when workers
drove over the pipeline with a backhoe. To make matters even worse, well before
Hanousek knew the type of enforcement case the government was contemplating,
Hanousek mislead government investigators and hid pieces of the pipeline from in-
vestigators. Clearly, the break of the pipeline here was not an unavoidable accident,
and Hanousek did not mislead investigators because he knew they were inves-
tigating him for criminal negligence. Had Hanousek taken the care that the former
manager of the blasting operations took to protect the pipeline, the pipeline would
not have broken and Hanousek would not have been subjected to criminal prosecu-
tion. It was Hanouseks failure to exercise the care that a reasonable person would
have taken to protect the pipeline under the circumstances, and his subsequent ef-
forts to mislead the government, that resulted in his conviction.
The defendant in Hong acted with the same utter disregard for the environment
as did Mr. Hanousek. Hong acquired wastewater treatment facilities in 1993. Two
years later, Hong inquired about the purchase of a carbon-filter treatment system
for one of his facilities, which lacked a wastewater treatment system altogether. The
seller of the system told Hong that the treatment system he was considering was
not appropriate for completely untreated wastewater; rather, it was designed only
for the final step in the wastewater treatment process. Despite this warning, Hong
purchased the system and used it as the sole means of treating wastewater. Em-
ployees soon complained to Hong that the system was becoming clogged, and soon
thereafter Hongs employees began discharging untreated wastewater into the sewer
system in violation of the companys discharge permits and in the presence of Hong
on several occasions. Certainly Hongs actions that resulted in untreated wastewater
being dumped into the sewer system were not the result of an accident. Hong,
knowing full well that the treatment system he installed was insufficient for the use
he used it for, did not act as a reasonable person would have acted in a similar situ-
ation. Indeed, while Hongs actions could be said to be knowing, warranting a felony
prosecution under the Clean Water Act, at a minimum Hong failed to exercise the
care to prevent untreated wastewater from being discharged into the sewer system
that a reasonable person would have taken in the same situation.
Essentially, Hanousek and Hong do not represent a sea change in negligent Clean
Water Act prosecutions; rather, they represent the need for Section 309 to punish
the egregious behavior of these defendants whose negligent actions caused environ-
mental damage.
Other noteworthy negligent Clean Water Act prosecutions that involved the dis-
charge of large quantities of petroleum products illustrate further that Federal pros-
ecutors have reserved Section 309 for egregious conduct. For example, in the case
of the Exxon Valdez oil spill, Exxon of course did not want to lose millions of gallons
of product and to spend many times more to remediate the environment. But the
negligent event that caused one of the worst environmental catastrophes in this
country was Exxons decision to allow a captain with a history of alcohol abuse to
navigate the barge in the Prince William Sound. The Colonial Pipeline spill in the
Reedy River is another example of an unwanted, tremendous loss of valuable prod-
uct and an expensive clean-up that was caused by the negligent failure to repair
a known weak spot in the pipeline that was carrying the petroleum product. Colo-
nial Pipeline, anxious to move product quickly, yet knowing the risks of over-pres-
suring the pipeline, made the decision to take the risk and move the petroleum
product which the pipeline could not withstand, causing the pipeline to burst and
spilling nearly one million gallons of products. If the proposed statutory language
were part of Section 309, not one of these cases could have been prosecuted for
Clean Water Act negligence because no one was injured nor put at risk of death
or serious bodily injury.
Just as there is no basis for the argument that recent case law has somehow
changed the standard for Clean Water Act criminal negligence, it is similarly not
credible for industry to argue the need for this statutory amendment on the basis
that Section 309 impedes NSTB investigations. It is highly unlikely that the rewrit-
168
ing of Section 309 will change a persons decision not to speak to the government
after a catastrophic environmental event. Other penalties might still attach to the
conduct that caused the catastrophe, and the uncertainty allegedly created now by
Section 309s negligence provision will still be present based on the threat of other
prosecutions, such as prosecution for knowing Clean Water Act violations or obstruc-
tion of justice, just to name a couple.
Moreover, the oil industrys proposed statutory amendment to Section 309 to allow
criminal negligence prosecutions only when the result of the violation involves in-
jury or risk of injury to people certainly would not create, in their own words, an
incentive to cooperate in bringing forward information on accident causes, the goal
the oil industry claims it seeks to achieve. To the contrary, with its statutory revi-
sion, in the most serious of cases when the need for prompt and complete informa-
tion (i.e., when people are injured or in serious risk of injury) is most important,
workers who fear criminal prosecution might assert their 5th Amendment rights,
the very right industry fears impeding NSTB investigations under the current
version of Section 309. In fact, this concern is really no concern at all, because in
a case in which a criminal investigation is proceeding simultaneously with a NSTB
investigation, and there is a necessity to speak to a worker who has asserted his
5th Amendment right that trumps the criminal investigation, the government can
immunize that worker and compel his cooperation in the NSTB process. There sim-
ply is no reason to amend the negligence provision of Section 309 out of fear of what
might happen in a future NSTB investigation in which the Department of Justice
is investigating a matter at the same time the NSTB is conducting a safety inves-
tigation, an event that has occurred many times in the past without conflict.
Supporters of the legislative amendment also emphasize that accidents should
not be criminally penalized,4 and history shows that the Department of Justice has
not used Section 309 to turn clean-up efforts and accident assessment procedures
into legal minefields. Ironically, supporters of this legislation suggest amending the
language of Section 309 to allow criminal prosecutions following an accident only
when such accidents involve injury or risk of injury to the public. Yet if the real
concern is prompt and open cooperation with NSTB investigations following an oil
spill, for example, wouldnt the need for a prompt and open NSTB investigation be
most important in cases where the public is placed at risk? Why under these cir-
cumstances are the proponents of this legislation not concerned with employees re-
luctance to speak because of fear of prosecution? The transparency of their argu-
ment is evident: this provision is intended to shield the oil industry from criminal
CWA negligence for oil spills because most CWA negligence prosecutions result in
extreme environmental damage, but not injury to the public.
Finally, there is a practical reason for rejecting oil industrys proposed statutory
amendment to Section 309. The negligence provision of Section 309 oftentimes bene-
fits defendants by giving prosecutors a lesser offense to which defendants can plead
guilty. Without this provision, prosecutors are left only with charging defendants
with a Clean Water Act felony for knowing violations of the Act. Thus, in Hong, for
example, where there appears to have been ample evidence of knowing conduct,
prosecutors would have no discretion to consider a misdemeanor charge for his con-
duct if the oil industry prevails and, instead, could only charge him with a Clean
Water Act felony. Surely this is a result that not even the industry advocating for
change desires.
4 The emphasis placed on accident is obvious given the fact that in the context of oil spills
the pollutant discharged into thewater petroleum producthas great value and no petroleum
company or transporter of petroleum products want to spill valuable product, unlike other Clean
Water Act prosecutions, such as Hong where the discharge is not a product but a waste. But
the events that are subject to prior negligence Clean Water Act prosecutions are far from acci-
dents as that word is commonly used. Merely because the defendant in an oil spill prosecution
never intended nor wanted to discharge the oil does not obviate the facts that lead up to the
spill that constitute a deviation from the care that a reasonable person would have exercised
in a similar circumstance.
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Senate Hearing, 108TH Congress - Implementation of The Clean Water Act

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Senate Hearing, 108TH Congress - Implementation of The Clean Water Act

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S. HRG.

IMPLEMENTATION OF THE CLEAN WATER ACT

SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND

SEPTEMBER 16, 2003

THE TOTAL MAXIMUM DAILY LOAD (TMDL) PROGRAM, SPILL PREVEN-

For sale by the Superintendent of Documents, U.S. Government Printing Office

JAMES M. INHOFE, Oklahoma, Chairman

ANDREW WHEELER, Majority Staff Director

SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND WATER

SEPTEMBER 16, 2003

TUESDAY, SEPTEMBER 16, 2003

OPENING STATEMENT OF HON. JAMES M. JEFFORDS,

OPENING STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR

STATEMENT OF G. TRACY MEHAN, ASSISTANT ADMINIS-

In the 1970s, monitoring was primarily carried out at or near

In January, EPA issued its Water Quality Trading Policy. The

A partnership trading effort in Illinois Piasa Creek along the

should be primarily involved in determining what the total load

Mr. MEHAN. Obviously there are a number of points in your

Mr. MEHAN. Well, I think it is certainly just generally good prac-

unregulated sources through least-cost and incentive-based prac-

Agriculture ................................................................................................................................................................ 48 percent

Agriculture ................................................................................................................................................................ 41 percent

Municipal Point Sources ........................................................................................................................................... 37 percent

Common pollutants found in storm water include pathogens, nutrients, sediment,

Annual loading (1,000

Total Suspended Solids ........................................................................................................................ 4,00064,000

Annual loading (1,000

Mercury ................................................................................................................................................. 260

were good or bad without at least some degree of sub-categoriza-

the NPDES program. As to the decisions on enforcement, I must

of South Burlington, VT; and Michael Samoviski, city manager, city

on this shorter timeframe is not just meaningless. It is also be-

Hamilton is located in Southwestern Ohio. It has a population of

improves, Hamiltons businesses and citizens may be better able to

tershed, or for an area under discussion, and letting the States

Senator JEFFORDS. Thank you, Mr. Chairman.

consultant to upgrade our plan and to evaluate some of its effec-

gating nonpoint source control to the States in Sections 208 and

Mr. Chairman, I thank you for the opportunity to be here. I

Senator CRAPO. Without objection, so ordered. Thank you very

STATEMENT OF LEE FULLER, VICE PRESIDENT, GOVERNMENT

No where in the information that IPAA has reviewed, is there is

environmental regulation. This committee deserves much credit for

serious person arguing that we should repeal criminal laws because

cally, criminal violations are reserved for knowing violations. Ac-

Let me apologize to the witnesses, and particularly to the pre-

in the audience right now that was there at that subcommittee

Senator INHOFE. Would any of the rest of you like to address

Senator Jeffords, you are recognized to question the witnesses.

In December 2002, Olympic and Shell agreed to pay $112 million

ization in the Clean Water Act for a criminal penalty, without

Senator CRAPO. Senator Jeffords.

conduct under this statute. If I understand Mr. Halls testimony

lator for transportation safety in our country, is bad public policy.

STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR FROM THE

STATEMENT OF G. TRACY MEHAN III, ASSISTANT ADMINISTRATOR FOR WATER, U.S.

As we transition from a technology-based approach to a water-quality based-ap-