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Texas Independent Producers v. Environmental Protection Agency

January 27, 2006

TEXAS INDEPENDENT PRODUCERS AND ROYALTY OWNERS ASSOCIATION, ET AL., PETITIONERS,
v.
ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT.



Petitions for Review of an Order of the Environmental Protection Agency. No. 02-OW-55.

The opinion of the court was delivered by: Manion, Circuit Judge.

ARGUED DECEMBER 7, 2004

Before BAUER, MANION, and WILLIAMS, Circuit Judges.

In a previous opinion, Texas Independent Producers and Royalty Owners Association v. EPA, 410 F.3d 964, 977-78 (7th Cir. 2005), this court addressed various issues concerning a general permit issued by the Environmental Protection Agency ("EPA") for storm water discharges. We reserved several issues pending the resolution of litigation in another circuit. This opinion now addresses those unresolved issues relating to the "Final National Pollutant Discharge Elimination System General Permit for Storm Water Discharges From Construction Activities" ("General Permit"), promulgated by the EPA on July 1, 2003. 68 Fed.Reg. 39,087 (July 1, 2003). To recap: Following the EPA's issuance of this General Permit, several organizations filed petitions for review, and those petitions were consolidated before this court. On June 13, 2005, this court held that the General Permit does not violate the Clean Water Act's ("CWA") requirements for public notice and public hearing. Texas Indep. Producers and Royalty Owners Ass'n v. EPA, 410 F.3d 964, 977-78 (7th Cir. 2005). We also held that in issuing the General Permit, the EPA complied with the requirements of the Endangered Species Act. Id. at 979. However, we dismissed the petition filed by the Natural Resources Defense Council, Inc., for lack of standing. Id. at 976. We then stayed consideration of the remaining challenges presented by organizations representing individuals in the oil and gas industries, pending resolution by the Fifth Circuit as to whether those petitioners were required to obtain a permit in the first instance. Id. at 980. After the Fifth Circuit held that the Oil and Gas Petitioners' challenge to the application of the General Permit was not ripe for review, Texas Independent Producers and Royalty Owners Assoc. v. EPA, 413 F.3d 479, 484 (5th Cir. 2005), we directed the parties to file supplemental briefing addressing the import of that decision. Before briefing was due, Congress passed the Energy Policy Act of 2005, which expressly exempts construction activities in the oil and gas industries from the permit requirements of the CWA.*fn1 Energy Policy Act of 2005, Pub. L. No. 109-58, § 323, 119 Stat. 594, 694 (2005). We directed further briefing on the impact of the Energy Policy Act. We now hold that because of the exemption contained in the Energy Policy Act, those aspects of the General Permit that the Oil and Gas Petitioners seek to challenge do not apply to them. We therefore dismiss this petition for lack of standing.

I.

Congress enacted the Clean Water Act ("CWA" or "Act") "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a). Among other things, the CWA prohibits the "discharge of any pollutant," except in compliance with the Act's provisions. 33 U.S.C. § 1311(a). In particular, the discharge of pollutants into navigable waters is illegal unless authorized by a permit issued pursuant to § 402 of the Act. 33 U.S.C. § 1342. Section 402 established the National Pollutant Discharge Elimination System ("NPDES"), and requires dischargers to obtain a permit from the EPA or an authorized state.*fn2 33 U.S.C. § 1342(a)(1), (b).

In 1987, Congress added § 402(p) to the CWA, establishing a two-step phased approach to regulating storm water discharges. 33 U.S.C. § 1342(p). "In Phase I, Congress required NPDES permits for storm water discharges from 'industrial activities,' 33 U.S.C. § 1342(p)(3)(A), defined as construction activities involving five or more acres, as well as discharges from certain large municipal storm sewer systems. 55 Fed.Reg. 47,990, 48,066 (Nov. 16, 1990)." Texas Indep. Producers, 410 F.3d at 968. The EPA decided to implement the permit requirement for Phase I by using a general permit system, as opposed to a system requiring individual permits for each construction activity. 55 Fed.Reg. 47,990, 48,005-06 (Nov. 16, 1990). Texas Indep. Producers, 410 F.3d at 968. As we explained in our prior opinion, "[t]he NPDES permitting system originally used individual permits, which was feasible for regulating discharges from wastewater facilities or industrial plants. However, by the 1980's it became clear that the individual permitting process was unworkable to regulate storm water discharges which can occur virtually anywhere." Texas Indep. Producers, 410 F.3d at 967-68 (citing 56 Fed.Reg. 40,948, 40,949-50 (Aug. 16, 1991)). "With a general permit, the EPA issues a permit for specific types of activities and establishes specific rules for complying with the permit. Then, rather than apply for an individual permit, operators must file a Notice of Intent stating that they plan to operate under the general permit, and absent a negative ruling by the EPA, discharges that comply with the terms of the general permit are automatically authorized." Id. at 968.

In 1992, the EPA issued its first general permit for construction-related storm water discharges. 57 Fed.Reg. 41176 (Sept. 9, 1992). The EPA, in 1997, proposed a revised general permit.

62 Fed.Reg. 29786 (June 2, 1997). Texas Indep. Producers, 410 F.3d at 968. Then in 1999, the EPA issued its Phase II storm water rules, which defined as additional discharges subject to the general permitting requirements "small construction sites (one to five acres), smaller municipalities, and additional sources that might be designated on a case-by-case basis. 64 Fed.Reg. 68722 (Dec. 8, 1999); 40 Fed.Reg. § 122.26(b)(15)." Texas Indep. Producers, 410 F.3d at 968. On December 20, 2002, the EPA proposed a third General Permit for storm water discharges from both large and small construction sites, 67 Fed.Reg. 78,116 (Dec. 20, 2002), although this General Permit only applies in jurisdictions not regulated by a State or Tribal NPDES permitting program. Texas Indep. Producers, 410 F.3d at 968. "After holding a series of public meetings and considering public comments, the EPA published notice of the final General Permit on July 1, 2003. 68 Fed.Reg. 39,087." Texas Indep. Producers, 410 F.3d at 968.

Under the terms of the final General Permit, potential dischargers must submit a Notice of Intent to operate under the General Permit and a responsible corporate official must certify the basis for eligibility for such coverage under the General Permit. General Permit, Appendix G at 11A.1. We detailed many of the other terms of the General Permit in our prior opinion:

The General Permit also requires that the operator create, maintain, and implement a site-specific Storm Water Pollution Prevention Plan ("SWPPP"), which must also be certified by a corporate official. General Permit 3.13; General Permit, Appendix G at 11A.1. The discharger must further implement best management practices ("BMP") necessary to comply with water quality standards, assure weekly site inspections, and document those inspections, including detailing weather conditions. See General Permit 4.5A (construction operators must "select, install, and maintain BMPs at your construction site" that minimize pollutants in the discharges as necessary to meet applicable water quality standards); General Permit 3.10.A (detailing requirements for inspections).

410 F.3d at 969.

After the EPA issued the General Permit, several organizations filed petitions for review of this final agency action, and those petitions were consolidated before this court. Of relevance here, the Oil and Gas Petitioners*fn3 presented several arguments. First, "the Oil and Gas Petitioners argue[d] that the EPA's definition of 'common plan' contained in the General Permit is so broad, ambiguous, and vague that it violates their rights to due process because they do not know if they need to apply for a General Permit." Texas Indep. Producers, 410 F.3d at 970. Similarly, "[t]he Oil and Gas Petitioners . . . argue[d] that the EPA's definition of 'final stabilization' is too vague." Id. Finally, "the Oil and Gas Petitioners argue[d] that the EPA's definitions of 'common plan' and 'final stabilization' are arbitrary and capricious because the definitions do not take into account the differences in construction activities related to oil and gas exploration and conventional residential and commercial activities." Id.

In presenting these arguments, the Oil and Gas Petitioners also asserted that the permit requirements of the CWA did not apply to them in the first instance. Id. However, the Oil and Gas Petitioners maintained that they were not challenging the EPA's decision that they must obtain storm water discharge permits, as that question was pending before the Fifth Circuit. Id. The Fifth Circuit case involved several final rules promulgated by the EPA, beginning with Final Rule, 68 Fed.Reg. 11,325. See 413 F.3d at 481. In 68 Fed.Reg. 11,325 ("Deferral Rule"), the EPA deferred the Phase II permit requirements it had established in 64 Fed.Reg. 68,722 for construction activities disturbing one to five acres, but only for construction activities at oil and gas sites. ...


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