Court Orders State Water Resources Control Board To Vacate Instream Flow Policy For Northern Coastal Streams

On August 9, 2012, the Alameda County Superior Court issued its Statement of Decision and Judgment in the case of Living Rivers Council v. State Water Resources Control Board (Case No. RG10-543923). The Living Rivers case challenged the adequacy of the California Environmental Quality Act (“CEQA”) review performed by the State Water Resources Control Board (“State Water Board”) in connection with its Policy For Maintaining Instream Flows In Northern California Coastal Streams (“Flow Policy”). The court found: 1) that the State Water Board failed to evaluate and disclose a feasible mitigation measure; and 2) that the State Water Board failed to disclose the limited mitigation measures available to address the indirect environmental impacts of the Flow Policy. Due to these deficiencies in the State Water Board’s CEQA review, the court ordered the State Water Board to vacate its approval of the Flow Policy.

Background
In late 2007, the State Water Board released a draft Flow Policy to meet its statutory requirement to adopt principles and guidelines for maintaining instream flows in northern coastal streams, as part of a state policy for water quality control for the purposes of water right administration. The Flow Policy, as a policy for water quality control, is a regulatory program that is exempt from CEQA’s requirements to prepare either an environmental impact report or a negative declaration. Therefore, compliance with CEQA required the State Water Board to prepare a substitute environmental document (“SED”) for the draft Flow Policy. After distributing the draft Flow Policy and SED and responding to comments on those documents, the State Water Board certified the SED as compliant with CEQA and adopted the Flow Policy on May 4, 2010.

The Flow Policy applies to applications to appropriate water from coastal streams within Marin, Sonoma and portions of Napa, Mendocino, and Humboldt Counties. The Flow Policy prescribes protective measures regarding the season of diversion, minimum bypass flows, and maximum cumulative diversion rates for the protection of fishery resources. The SED found that the Flow Policy could result in potentially significant indirect environmental impacts, including increased groundwater pumping, in response to the Flow Policy’s limitations on stream diversions.

Living Rivers Decision
In evaluating the adequacy of the SED prepared by the State Water Board, the Living Rivers court found that the State Water Board failed to satisfy the substantive provisions of CEQA. The court found that the SED failed to evaluate and disclose a potentially feasible mitigation measure for the anticipated increased use in percolating groundwater resulting from the Flow Policy. In addition, the court found that the SED failed to effectively disclose the State Water Board’s limited ability to monitor and mitigate the impact of the anticipated increase in the use of percolating groundwater. To remedy the identified CEQA inadequacies, the court ordered the State Water Board to vacate its certification of the SED and its approval of the Flow Policy. However, the court noted that the State Water Board retains its regulatory authority to issue water permits with conditions, and therefore, the Board could treat the vacated Flow Policy as a “guideline” for processing water right applications until the CEQA process is completed.

Conclusion
The Living Rivers judgment orders the State Water Board to disclose the implications of its limited regulatory jurisdiction over percolating groundwater. To satisfy the court’s writ of mandate, the State Water Board will need to disclose the scope of its regulatory authority over percolating groundwater and also disclose that the increased groundwater use resulting from the Flow Policy is unlikely to be subject to future CEQA review. The amended SED will likely provide a useful articulation of the State Water Board’s regulatory jurisdiction over percolating groundwater.

For additional information regarding the Flow Policy or the Living Rivers case, please contact Elizabeth Leeper or the KMTG attorney with whom you normally consult. Additional information regarding the Flow Policy is also available here.

EPA Releases Findings of Ground Water Investigation in Pavillion, Wyoming

The Environmental Protection Agency ("EPA") recently released draft findings of a ground water investigation conducted in Pavillion, Wyoming. The report is available here. According to an EPA release, "[t]he draft report indicates that ground water in the aquifer contains compounds likely associated with gas production practices, including hydraulic fracturing."

Commenting on the investigation, Jim Martin, EPA's regional administrator in Denver, said:

EPA’s highest priority remains ensuring that Pavillion residents have access to safe drinking water. We will continue to work cooperatively with the State, Tribes, Encana and the community to secure long-term drinking water solutions. We look forward to having these findings in the draft report informed by a transparent and public review process. In consultation with the Tribes, EPA will also work with the State on additional investigation of the Pavillion field.

Some have hailed the draft report as evidence of the potential ground water impacts of fracking generally. Steve Jones of the Wyoming Outdoor Council noted that "[t]his is an important first indication there are potential problems with fracking that can impact domestic water wells. It's I think a clarion call to industry to make sure they take a great deal of care in their drilling practices." But the EPA has been careful not to generalize the results of its investigation, stating that its draft findings "are specific to Pavillion, where the fracturing is taking place in and below the drinking water aquifer and in close proximity to drinking water wells – production conditions different from those in many other areas of the country." And in an interview (video available here), EPA head Lisa P. Jackson confirmed that the particular formation in Wyoming may have contributed to the detection of chemicals in the ground water.

Encana, the company targeted by EPA's investigation, issued a statement that "[t]he EPA's draft report and current view is based on a possibility, not a conclusion built upon peer-reviewed science. The cause of the compounds in the water remains inconclusive. . . . Encana remains committed to seeing that the investigations into determining the source of the compounds found in the Pavillion groundwater are backed by sound science that is reviewed by independent peers." In a further release issued December 12, Encana identified a series of claimed discrepancies in the EPA's data and analysis, commenting that the EPA's "preliminary conclusions do not stand up to the rigor of a non-partisan, scientific-based review and that is of paramount importance to every natural gas producing community, every citizen and business that relies on natural gas and every industry worker."

The draft report will be available for a 45-day public comment period beginning December 14, following which a panel of independent scientists will subject the report to a 30-day peer review process. More information regarding EPA's investigation may be found on its website.

For more information regarding this matter, please contact Eric Adair or the KMTG attorney with whom you normally consult.

Related news coverage and commentary:

• EPA: Fracking may cause groundwater pollution
• Bad water found at fracking site
• Six Questions for EPA on Pavillion