On July 23, 2018, the U.S. Court of Appeals for the Second Circuit decided the case of Cooling Water Intake Structure Coalition v. EPA. Environmental conservation groups and industry associations petitioned for review of a final rule promulgated by the U.S. Environmental Protection Agency (EPA) pursuant to section 316(b) of the Clean Water Act (CWA), establishing requirements for cooling water intake structures at existing facilities. Denying the petitions for review, the Court of Appeals summarized:
“Because we conclude, among other things, that both the Rule and the biological opinion are based on reasonable interpretations of the applicable statutes and sufficiently supported by the factual record, and because the EPA 3 gave adequate notice of its rulemaking, we DENY the petitions for review.”
This is a significant CWA and Endangered Species Act (ESA) decision involving the operation of major industrial facilities requiring the daily use of large amounts of water taken from adjacent bodies of water.
EPA’s Final rule re: National Pollutant Discharge Elimination System—Final Regulations To Establish Requirements for Cooling Water Intake Structures at Existing Facilities and Amend Requirements at Phase I Facilities was promulgated in 2014. The Final Rule was supported by an ESA biological opinion provided to EPA by the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. The environmental groups included the National Resources Defense Council (NRDC), Delaware Riverkeeper Network, and Sierra Club, while the industry petitioners included the American Petroleum Institute, the Utility Water Act Group, and Entergy Corporation.
As described by the Court of Appeals, power plants and industrial facilities use cooling water intake structures (CWIS) to extract large amounts of water that are vital for the proper functioning of their equipment and facilities. However, the operation of a CWIS has consequences; they can impinge and entrap billions of aquatic organisms each year.
In 1972, the CWA was amended to give EPA the regulatory authority to establish standards for their operation, and these standards are implemented and enforced through the National Pollutant Discharge Elimination System (NPDES) permitting process. In addition, the ESA was enacted to protect listed species, and two agencies—the U.S. Fish and Wildlife Service and the National Fisheries Maritime Service—were directed by the Congress to provide EPA with a biological opinion that analyzes the effects of such new rules on listed species and their critical habitat.
All of the arguments provided by the opponents of this new rule were unanimously rejected by the Court of Appeals. The Court of Appeals was persuaded that EPA’s actions throughout this proceeding were rational and well supported by the record. Accordingly, the industrial petitioners arguments that EPA failed to provide the public with adequate notice under the Administrative Procedure Act were not persuasive; the new provisions, which were challenged were, the Court of Appeals concluded, simply a natural outgrowth of the rules that EPA had proposed in the first place.
Their argument that EPA had unlawfully delegated some of its regulatory authority to the U.S. Fish and Wildlife Service and the National Marine Fisheries Service was dismissed; it was not established that any permitting decisions were vested in these services. Both the industrial and environmental petitioners objected to the biological opinion rendered by the services, but the Court of Appeals held that the ESA consultation was properly conducted. By far, most of the arguments reviewed and rejected by the Court of Appeals were advanced by the environmental petitioners; however, the Court of Appeals, in sum, concluded that both the CWA and ESA allowed these agencies substantial discretion to exercise their expertise and discretion, and nothing in the administrative record belied that conclusion.