Water Quality and the Extractive Industries

August 13, 1998

Summary
Surface and ground waters within New Mexico's borders benefit, directly or indirectly, from significant protections and disincentives against the effects of mineral development under a broad range of federal and state environmental protection, liability allocation and mining reclamation laws. This paper does not purport to identify all of these laws or address any particular one of them comprehensively. Instead, it merely touches on select developments in some federal and state issues involving water quality statutes and regulations encountered in the context of mineral development operations in New Mexico. The developments and issues selected for this paper often are not easily resolved in the context of a given site, and usually they are best analyzed using a multi-disciplinary, team-oriented approach involving technical personnel and attorneys. An attempt is made to put the developments in the context of the general framework of the federal and state laws most directly fashioned to protect the quality of surface and ground waters, the Federal Clean Water Act and the New Mexico Water Quality Act.

SELECT DEVELOPMENTS IN WATER QUALITY ISSUES FACING THE EXTRACTIVE INDUSTRIES IN NEW MEXICO

INTRODUCTION

Surface and ground waters within New Mexico's borders benefit, directly or indirectly, from significant protections and disincentives against the effects of mineral development under a broad range of federal and state environmental protection, liability allocation and mining reclamation laws. This paper does not purport to identify all of these laws or address any particular one of them comprehensively. Instead, it merely touches on select developments in some federal and state issues involving water quality statutes and regulations encountered in the context of mineral development operations in New Mexico. The developments and issues selected for this paper often are not easily resolved in the context of a given site, and usually they are best analyzed using a multi-disciplinary, team-oriented approach involving technical personnel and attorneys. An attempt is made to put the developments in the context of the general framework of the federal and state laws most directly fashioned to protect the quality of surface and ground waters, the Federal Clean Water Act and the New Mexico Water Quality Act.

I. CLEAN WATER ACT DEVELOPMENTS

One of the most significant water quality protection statutes applicable to the extractive industries, the Clean Water Act, 33 U.S.C. §§ 1251, et seq., chiefly imposes effluent limitations on, or otherwise prevents, "any addition of pollutants to navigable waters from any point source." 33 U.S.C. § 1362(12). The term "pollutants" is broadly defined and construed to include virtually any discharge generated during or resulting from mineral development. 33 U.S.C. § 1362(6); see also, e.g., United States v. Hamel, 521 F.2d 107, 110-112 (6th Cir. 1977) (pollutants include characteristics such as acidity); but see Waste Action Project v. Dawn Min. Co., 137 F.3d 1426 (9th Cir. 1998) (pollutants do not include radioactive "source," "byproduct" or "special nuclear material" regulated under Atomic Energy Act or Uranium Mill Tailings Radiation Control Act).

Important permitting programs under the Clean Water Act include: (a) the Section 404 "dredge and fill" permitting program largely administered by the Army Corps of Engineers; and (b) the Section 402 National Pollution Discharge Elimination System ("NPDES") permit program largely administered (at least in New Mexico) by the Environmental Protection Agency, which includes the stormwater permitting program. Recent developments abound concerning each of these programs, and some of those developments are discussed here.

A. The Ebb and Flow (or Lack Thereof?) in Jurisdictional Waters of the United States

A threshold issue common to the applicability of both the 404 and 402 permitting programs mentioned is one which is most puzzling in the context of New Mexico sites. The rare uninitiated miner or oilman blessed with eyesight might ask pointedly how a typical site in New Mexico could possibly implicate "navigable waters." See 33 U.S.C. § 1362(12). The more well-versed, of course, look not for "wet" water, but instead query whether that parched earth underfoot might itself be or lead to a stretch of "waters of the United States." See 33 U.S.C. § 1362(7).

Lawyers should not be surprised that the extent of Clean Water Act jurisdiction is confined by what is permissible under the commerce clause of the United States Constitution, which provides that Congress shall have power to regulate commerce among the several states. U.S. Const. art. I, § 8, cl. 3. The body of law defining the extent of that jurisdiction may be showing signs of change..

Nearly twenty years ago, the Tenth Circuit considered interstate commerce when it had to decide whether a sodium cyanide and water leachate solution that spilled from a gold mining heap leach operation into a ditch, and ultimately into a small Colorado creek during unexpectedly heavy snow melt, constituted a discharge into jurisdictional waters. United States v. Earth Sciences, Inc., 599 F.2d 368, 370 (10th Cir. 1979). The court noted that the term "navigable" was left out when Congress defined "navigable waters" broadly to include any "waters of the United States, including the territorial seas." Id. at 375. According to the Court:

It seems clear that Congress intended to regulate discharges made into every creek, stream, river, or body of water that in any way may affect interstate commerce.

Id. In Earth Sciences, the gold mining company argued that the creek "does not provide a very significant link in the chain of interstate commerce" given the parties' stipulations that the creek was neither navigable-in-fact nor used to transport any goods or materials in interstate commerce, and that the creek was confined entirely to a single county. Id. at 374-375. The court, however, relied on other stipulations to the effect that the stream supported "trout and some beaver" and agricultural irrigation resulting in produce sold in interstate commerce. Id. at 375.

In most of the intervening years since Earth Sciences, the EPA, the Corps of Engineers and most courts have, if anything, taken an even more expansive view of what constitutes jurisdictional waters of the United States under the Clean Water Act. Thus, the fact that a wash is dry during part or all of the year does not preclude its characterization as a jurisdictional water, as long as water flows from it on some occasions. See, e.g., United States v. Texas Pipeline Co., 611 F.2d 345, 357 (10th Cir. 1979) (Clean Water Act covered oil spilled into an unnamed tributary, and it made "no difference that a stream was or was not at the time of the spill discharging water continuously into a river navigable in the traditional sense"); State of Utah v. Marsh, 740 F.2d 799, 801 (10th Cir. 1984) (Corps of Engineers had jurisdiction over lake with no navigable tributary or outlet extending beyond Utah, due to interstate sales of fish and irrigated crops, the lake's attraction as a recreational hub, and the fact that the lake is on the flyway of several species of migratory waterfowl);(1) Quivira Min. Co. v. USEPA, 765 F.2d 126, 129 (10th Cir. 1985) (discharge of pollutants into a normally dry arroyo at Quivira's Ambrosia Lake facility was a discharge into jurisdictional waters because: (a) "during times of intense rainfall, there can be a surface connection [to] navigable-in-fact streams," (b) the arroyos "flow for a period after the time of discharge of pollutants into the waters," and (c) "the flow continues regularly through underground aquifers into navigable-in-fact streams"); Sierra Club v. Colorado Refining Co., 838 F.Supp. 1428, 1432 (D. Colo. 1993) (petroleum contamination from refinery that entered ground water and ultimately entered a creek through seeps in the bank of the creek constituted an NPDES permit violation; where the pollutant reaches navigable waters through ground water, there is a discharge of a pollutant into navigable waters).

Even before Earth Sciences, an important case within the Ninth Circuit had held, in the context of a mining site, that "waters of the United States" includes "normally dry arroyos, where any water which might flow therein could reasonably end up in any body of water, to which or in which there is some public interest, including underground waters." United States v. Phelps Dodge Corp., 391 F.Supp. 1181, 1187 (D. Ariz. 1975). The reference to "underground waters" in the Phelps Dodge case would need to be qualified in order for the jurisdictional description to fit the state of the law in the Tenth Circuit. A close reading of Tenth Circuit cases reveals that underground waters do not constitute jurisdictional waters for Clean Water Act purposes unless the underground waters are hydrologically connected to surface waters, and even then discharges into groundwater only rise to the level of discharges into navigable waters if pollutants would actually reach the surface water. See, e.g., Colorado Refining, 838 F.Supp. at 1432. But see Friends of Santa Fe County v. LAC Minerals, Inc., 892 F.Supp. 1333, 1358 (D.N.M. 1995) (noting in dicta that "hydrologically connected groundwaters are regulated waters of the United States"), citing Washington Wilderness Coalition v. Hecla Mining Co., 870 F.Supp. 983 (E.D. Wash. 1994); and 55 Fed. Reg. 47990, 47997 (Nov. 16, 1990) (noting that EPA's Clean Water Act regulations are inapplicable to discharges into groundwater "unless there is a hydrological connection between the groundwater and a nearby surface water body").

A few more recent cases advance the notion that some showing of an actual and substantial interstate nexus under the commerce clause is necessary in order for an area to be deemed "waters of the United States." The most well-known of these, at least in New Mexico, is Friends of Santa Fe County v. LAC Minerals, Inc., 892 F.Supp. 1333 (D.N.M. 1995) ("FOSFC"). In FOSFC, the court considered the question of whether discharges of acid rock drainage from the defendant's waste rock pile into Dolores Arroyo in the Ortiz Mountains near Santa Fe constituted "waters of the United States." Plaintiffs' expert opined that the arroyo was a tributary of the Rio Grande based on U.S.G.S. topographic maps that marked the arroyo as an intermittent stream. According to the court, this evidence was not enough to establish that discharges from the waste rock pile actually reached the nearby Gallisteo Creek or, ultimately, the Rio Grande. Id. at 1356. Because plaintiffs failed to show that Dolores Arroyo itself affects interstate commerce, plaintiffs were not entitled to summary judgment on the question of whether Dolores Arroyo constituted jurisdictional waters.

To be entitled to summary judgment . . . plaintiffs must show, as a matter beyond reasonable dispute, that it is more likely than not that water from that portion of the Dolores Arroyo containing the overburden pile eventually, even if only sporadically, travels to a waterway affecting interstate commerce. If water from the arroyo eventually drains into the Rio Grande, an undisputed interstate water, the Clean Water Act protects it.

* * *

The Court is not suggesting that the plaintiffs must provide concrete proof that water from the overburdened pile presently flows from the arroyo to the Rio Grande. They must, however, provide some evidence to suggest that water originating in the arroyo near the overburdened has at least some time in the past eventually made its way to the Rio Grande, either by way of the arroyo and Gallisteo Creek or through the ground water, and is reasonably likely to do so again.

Id. at 1356-1357. The court concluded that "[plaintiffs] have failed to make the requisite nexus to interstate commerce." Id. See also Hoffman Homes, Inc. v. EPA, 999 F.2d 256, 260 -261 (7th Cir. 1993) (one acre wetland isolated by several hundred feet from nearest creek was not a jurisdictional water; agency failed to prove migratory birds had ever actually used the isolated wetland).

A recent case from the Fourth Circuit similarly yielded to the commerce clause in the context of intrastate waters, and in the process, held invalid a key portion of the Army Corps of Engineer's regulatory definition of "waters of the United States." In United States v. Wilson, 133 F.3d 251 (4th Cir.1997), a jury had convicted a developer of felony charges for knowingly discharging fill and excavated material into certain wetlands without a permit. Id. at 253. The Fourth Circuit overturned that conviction because a jury instruction -- and the regulatory definition of "waters of the United States" on which the instruction was based -- exceeded congressional authorization under the Clean Water Act and ran afoul of the commerce clause. Id. at 256-257. The instruction in question allowed the government to prove that the waters merely "have some potential connection with interstate commerce" such as potential use by out-of-state visitors or potential sale of fish in interstate commerce. Id. at 256 (emphasis added). The Corps' jurisdictional definition in question, 33 C.F.R 328.3(a)(3), similarly turned on whether use or degradation of intrastate waters "could affect interstate or foreign commerce" due to such hypothetical uses. Id. at 257 (emphasis added). In determining the regulation to be flawed, the Fourth Circuit observed that the regulation includes no requirements that the waters must be shown to have "a substantial effect on interstate commerce" or "any sort of nexus with navigable, or even interstate, waters." Id. (emphasis in original).

Obviously chagrined by the result in Wilson, the Corps and EPA jointly issued a May 29, 1998 "Guidance for Corps and EPA Field Offices Regarding Clean Water Act Section 404 Jurisdiction Over Isolated Waters."(2) In it, the two agencies essentially seek to explain away the Wilson decision while professing an intention to abide by the decision's holding only within the Fourth Circuit, purportedly until the agencies can develop better authority in other circuits and have their views adopted by the United States Supreme Court.(3)

Even though New Mexico is not in the Fourth Circuit, regulators and practitioners in New Mexico should make note of the agencies' approach in the new guidance, because the FOSFC case from the Federal District Court for the District of New Mexico, and the Fourth Circuit in Wilson, arguably contain similar commerce clause rationale for establishing the jurisdictional reach of "waters of the United States" under the Clean Water Act. According to the seven-page May 29 guidance:

[T]he Corps and EPA will continue to assert CWA jurisdiction over any and all isolated water bodies, including isolated wetlands, based on the CWA statute itself, where (1) either agency can establish an actual link between that water body and interstate or foreign commerce and (2) individually and/or in the aggregate, the use, degredation or destruction of isolated waters with such a link would have a substantial effect on interstate or foreign commerce.

Id. at 1 and 5 (emphasis in original). Although perhaps not surprising in light of the existing body of expansive regulatory and caselaw interpretations, the quoted guidance arguably distorts the Wilson court's rationale that some showing of an actual hydrological connection between the site in question and interstate waters -- even if not navigable-in-fact waters -- is necessary in order for the area to fall within a constitutionally permissible scope of Clean Water Act jurisdiction. Unfortunately for all concerned, whether isolated or wholly intrastate waters are subject to Clean Water Act jurisdiction may have to await final resolution by the United States Supreme Court. In the interim, the relevant agencies clearly intend to decide jurisdiction on a case-by-case basis using traditionally expansive notions of what constitutes "waters of the United States."

B. Evolving Outer Contours of the Section 404 Dredge And Fill Program

Like the Section 402 NPDES program, discussed infra, the Section 404 permitting program implements the Clean Water Act's Section 301 prohibition on unauthorized discharges. The 404 program, however, is limited to discharges of relatively narrowly defined "dredged" or "fill" material. To be "dredged" material, the material must be "excavated or dredged from waters of the United States." 33 C.F.R. § 323.2(c). To be "fill" material, the material must be used for the "primary purpose of replacing an aquatic area with dry land or of changing the bottom elevation of an [sic] water body." 33 C.F.R. § 323.2(e). Pursuant to these definitions, the court in FOSFC held that overburden from a surface pit rather than from waters of the United States did not constitute "dredged" material, nor did it constitute "fill" material since its placement in Dolores Arroyo was primarily for disposal purposes. 892 F. Supp. at 1342.(4)

The Section 404 program recognizes two basic types of permits, individual permits and general permits. Individual permits may be obtained following an activity-specific application and comprehensive agency review including consideration of the "public interest." 33 C.F.R. § 323.2(g). General permits are authorized on a state, regional or nationwide basis. See 33 U.S.C. § 1344(e)(1). Whereas obtaining individual permits can be a time-consuming and expensive process, general permits typically provide broad coverage for certain categories of activities, and their purpose is to allow the activities to occur with little or no involvement by the Corp. General permits, such as Nationwide Permit No. 21 covering surface coal mining activities approved pursuant to the Surface Mining Control and Reclamation Act of 1977, merely require some form of notification to the Corps.

On July 1, 1998, the Corps issued a notice of intent to issue six new nationwide permits and modify six existing permits as part of the Corps' pending effort to phase out a Nationwide Permit No. 26, which covers activities in certain "isolated waters" and waters above "headwaters."(5) As part of the initiative to replace Nationwide Permit No. 26, the aggregate industry and hard rock metal/mineral mining industry provided extensive input. See 63 Fed. Reg. 36040, 36054 (July 1, 1998). The mining industries' input emphasized "considerable differences in the impacts associated with the subsequent processing of the minerals being extracted." As a result, the Corps also is proposing a new nationwide "mining activity discharges" permit, conditioned so as to ensure minimal impacts in certain "aquatic ecosystems." The proposed permit separates out aggregate mining activities from hard rock mining activities. Id. The Corps is also encouraging the development of regional general permits relating to mining. Id.

Mining and reclamation activities that would be authorized (within certain yet to be determined acreage limitations) by the proposed mining nationwide permit, are stated to include:

discharges from filling, excavation, and dredging; exploration; processing; construction of berms, haul roads, dikes and road crossings; construction of settling ponds and settling basins; ditching and trenching; mechanized landclearing, storm water and surface water management; stream diversion or relocation; stockpiling; sediment and erosion controls; grading; and other activities involved in mining and mined land reclamation.

Id. Part of the proposed nationwide permit requirements includes a requirement to submit a reclamation plan. 63 Fed. Reg. At 36055. Also, for mining and reclamation activities to qualify, they would have to satisfy certain stated criteria. See 63 Fed. Reg. at 36069-36070. The Corps' notice of intent is careful to point out that the proposed mining nationwide permit would not obviate the need to obtain any required NPDES or other permits for the activities covered by the permit, which would include any stormwater permitting requirements, discussed infra.

As part of the Corps' July 1, 1998 Notice of Intent, the Corps addressed certain "regulatory confusion surrounding wetlands created intentionally or unintentionally at mining operations . . . ." 63 Fed. Reg. at 36055. The Corps requested comments concerning the following position:

Waterfilled depressions and pits, ponds, etc., created in any area not a "water of the U.S.", as a result of mining, processing and reclamation activities, shall not be considered "waters of the U.S." until one of the following occurs: (1) All construction, mining, or excavation activities, processing activities and reclamation activities have ceased and the affected site has been fully reclaimed pursuant to an approved plan of reclamation; or (2) All [of those same activities] have ceased for a period of 15 consecutive years or the property is no longer zoned for mineral extraction, the same or successive operators are not actively mining on contiguous properties, or reclamation bonding, if required, is no longer in place.

Id. According to the Corps, this clarification would resolve a long-standing jurisdictional debate and remove an incentive for operators to avoid creating temporary wetlands, "thus depriving for the duration of normal activities, whatever benefits would have accrued to the area as a result . . . ." Id. Comments on the proposal must be received by August 31, 1998.

C. Litigation Seeking to Force Section 7 Endangered Species Act Consultations In Connection With the Clean Water Act Section 404 and 402 Programs

Environmental groups presently appear to be making a concerted effort -- both on the national and New Mexico levels -- to ensure that agency actions taken by the Corps and EPA in connection with the Section 404 and 402 permitting programs are done in consultation with the Fish and Wildlife Service under the Section 7 formal consultation process of the Endangered Species Act. For example, on the heels of a recent suit against the Corps brought by the Natural Resources Defense Council, et al., the Forest Guardians on June 29, 1998 sent a notice of intent to sue to various state and federal officials (including the EPA and the New Mexico Environment Department) for alleged failures to consult under Section 7 in connection with approvals of a number of NPDES permits for mining companies and other entities in northwestern New Mexico.

Among other things, the threatened lawsuit would assert that the EPA has failed both to initiate consultation when the permits originally were issued, and to reinitiate consultation "as to how continued operations pursuant to each of the . . . permits would adversely modify" certain critical habitats and otherwise impact listed species. The notice of intent to sue does not clearly specify what relief will be requested by the Forest Guardians, but it is conceivable that the group may ask that various permits be invalidated for the alleged failures. In light of the existing status of the dispute, a full analysis and speculation as to the outcome by this author is premature.

D. The Section 402 Stormwater Permitting Program

In passing 1987 amendments to the Clean Water Act, Congress recognized that stormwater discharges can be a significant source of environmental pollution. Among other things, the 1987 amendments paved the way for EPA to require permits for "discharge[s] associated with industrial activity." 33 U.S.C. § 1342(p)(2)(B). EPA's 1990 stormwater discharge rule defined that phrase to include discharges from both active and inactive mines except inactive coal mines reclaimed under the Surface Mining Control and Reclamation Act. 55 Fed. Reg. 47990, 48033 and 48065-66 (1990); see also American Mining Congress v. EPA, 965 F.2d 759 (9th Cir. 1992) (upholding the application of EPA's rule to inactive mines).

As discussed below, EPA has developed a general stormwater permit for construction activities and a group, industry-specific stormwater permit for the mining industry. The relationship between the two appears to be that a mining company would apply for the general permit to cover activities during the construction phase of a project, and the group permit to cover most operations.

1. EPA Reissuance of NPDES General Permits for Stormwater Discharges From Construction Activity.

On July 6, 1998, EPA published its Reissuance of NPDES General Permits for Storm Water Discharges from Construction Activities in Region 6 ("General Permit"). 63 Fed. Reg. 36490 to 36519 (July 6, 1998). This General Permit covers storm water discharges associated with construction activity in the States of New Mexico and Texas; Indian Country lands Louisiana, Oklahoma, Texas, and New Mexico (except Navajo Reservation lands and Ute Mountain Reservation lands); and oil and gas construction in the State of Oklahoma. The General Permit replaces the previous Baseline Construction General Permit, which was issued for a five-year term in September 1992. The General Permit is substantially similar to the general permit issued by EPA on February 17, 1998, covering stormwater discharges associated with construction activities in EPA Regions 1, 2, 3, 7, 8, 9, and 10. See 63 Fed. Reg. 7858 to 8014 (Feb. 17, 1998).

Some of the more important provisions of the General Permit are as follows:

The General Permit covers all stormwater discharges from construction sites disturbing five or more acres, and construction activity disturbing less than five acres which is part of a larger common plan of development or sale with the potential to disturb cumulatively five or more acres. 63 Fed. Reg. at 36490.

To obtain coverage under the General Permit, an operator must develop a Storm Water Pollution Prevention Plan ("SWPPP"), or participate in a joint plan with other operators. An SWPPP must include: (1) a site description; (2) a description of controls that will be used on site; (3) a description of maintenance and inspection procedures; and (4) a description of pollution prevention measures for any non-stormwater discharges present. Id. at 36502 to 36505.

The General Permit also contains new requirements with regard to the Endangered Species Act. To fulfill these requirements, Addendum A to the General Permit provides specific guidelines for conducting an endangered species review during the planning stages of a project. 63 Fed. Reg. at 36511 to 36515.

A developer with an expired-as-of-September-1997 general stormwater construction permit wishing to apply for the new General Permit, must send a Notice of Intent ("NOI") to do so to EPA within 90 days of the publication date of the General Permit in the Federal Register. 63 Fed. Reg. at 36500. Any developer contemplating new construction who wishes to apply for the General Permit must have an NOI postmarked at least two days prior to commencement of any work on site. Id. EPA will accept a late NOI, but authorization will not apply retroactively, and unpermitted discharges can be penalized. Id.

Once construction activity ends, a permittee must submit a Notice of Termination ending coverage under the General Permit. Id. at 36508. At this stage, an operator may next have to obtain additional permits for stormwater-associated activities on the operator's land. The following section discusses permits for stormwater discharges associated with mining activities in particular.

2. EPA Regulation of Stormwater Discharges Associated With Mining Activities.

The Clean Water Act requires EPA to set numerical limits, or effluent limitations, on the amount of pollutants that can be discharged by certain industries into the nation's waterways. See 33 U.S.C. § 1311(b). These limits are to based on the "best practicable control technology available" ("BPT"), and the "best available technology economically achievable" ("BAT"). Id. § 1311(b)(1)(A) and (2)(A). EPA is authorized to issue discharge permits that comply with these effluent limitations under the National Pollution Discharge Elimination System ("NPDES").

With regard to mining activities, EPA has developed regulations for the "Ore Mining and Dressing Point Source Category." 40 C.F.R. §§ 440.10 to .148. Subpart J of these regulations covers copper, lead, zinc, gold, silver, and molybdenum mining. Id. § 440.100 to .105. Two specific types of discharges are identified under this subpart: "process wastewater," the discharge of which prohibited, see id. § 440.103(c)(1); and "mine drainage," the discharge of which is limited, see id. §§ 440.102(a) and .103(a).

In 1995 EPA finalized regulations for NPDES stormwater discharge permits for industry-specific groups, one of which is the mining industry. See 60 Fed. Reg. 50804 (Sept. 29, 1995) ("1995 Final Rule"). In the mining industry portion of the 1995 Final Rule, EPA clarified what stormwater activities it considered to be covered by the effluent limitations. This list of stormwater-associated activities covered by the effluent limitation guidelines is quite extensive, and covers most of the major activities associated with a mine site. See id. at 50897, Tbl. G-4. EPA has since proposed to reinterpret the 1995 rule to lessen the scope of what activities are covered by the effluent limitation guidelines. See 62 Fed. Reg. 54950 to -958 (Oct. 22, 1997).

The 1995 Final Rule also established group, industry-specific stormwater discharge permits for various industries, including the ore mining and dressing industry. 60 Fed. Reg. at 50888. Although the requirements under this industry-specific stormwater permit are generally less onerous than those required under the effluent limitation guidelines, the mine site areas covered by the group stormwater permit are not as extensive as those covered by the effluent limitations guidelines. See id. at 50897, Tbl. G-4.

Finally, in 1990 EPA issued regulations wherein an individual facility can apply for an individual stromwater discharge permit. 40 C.F.R. § 122.26(c)(1). The requirements under the individual permit are quite extensive, however, and due to the cost and expense of obtaining them, the mining industry has used this option infrequently.

II. WATER QUALITY ACT CONSIDERATIONS

New Mexico's Water Quality Act, NMSA 1978, §§ 74-6-1, et seq., authorized the Water Quality Control Commission ("WQCC") to adopt regulations and permitting programs for the protection of "water" in New Mexico. The term "water" is defined in the act to mean "all water, including water situated wholly or partly within or bordering upon the state, whether surface or subsurface, public or private, except private waters that do not combine with other surface or subsurface water." NMSA 1978 § 74-6-2(G). As discussed more fully below, the New Mexico Environment Department (NMED) takes an expansive view of its jurisdiction both with regard to surface water and groundwater resources. Before discussing NMED's approach to its jurisdiction over waters, it is worthwhile to compare how the Oil Conservation Division ("OCD") and the Mining and Minerals Division ("MMD") function in relation to water quality protection.

A. WQCC Allocations to Administer Discharge Plans at Oil and Gas Versus Mining Sites

Two key permitting programs adopted by the WQCC are the discharge plan program and the abatement plan program, 20 NMAC 6.2 Subparts 3 and 4. Generally speaking, these programs are administered by the Environment Department. Pursuant to the Water Quality Act, however, the WQCC has allocated considerable programatic responsibilities in the oil and gas area to the Oil Conservation Division ("OCD"). Thus, for example, OCD generally has control over discharges at oil and gas drilling, production, refining, processing and transportation. OCD exercises authority over regulation of such matters as below-grade tanks, lined and unlined pits, drilling, plugging, treating plants, injection and disposal wells and produced waters. For a good overview of OCD's regulatory authority and activities in these areas, see B. Lematta, et al., New Mexico Environmental Law Handbook (4th ed. 1996).

By contrast to the WQCC's allocation of water quality control responsibilities to OCD for oil and gas operations, no similar allocation has been made to the Mining and Minerals Division ("MMD") for mining operations.(6) Although perhaps not politically feasible for reasons that are beyond the scope of this paper, an allocation of responsibilities to MMD would seem prudent, and would be at least as logical as the allocation to the OCD. Pursuant to the 1993 New Mexico Mining Act, MMD already has significant operational and post-operational responsibilities that stem, directly or indirectly, from concerns for the protection of groundwater. For example, in applying for new mine permits, companies must submit to MMD certain relevant data concerning water quality, the potential for geochemical alteration of materials at the site, groundwater information such as aquifer characteristics, depth and TDS, the probable consequences to the quality of groundwater systems, the potential for generation of acid or other toxic drainage from overburden and waste materials, and designs incorporating measures to reduce acid and toxic drainage. See 19 NMAC 10.2 Rules 602.D.13.f, 602.13.g, and 602.15.j. Moreover, many of MMD's reclamation requirements and performance standards relevant to protection of groundwater, including provisions for topsoil suitability used for covers, erosion control techniques and revegetation requirements overlap significantly with the discharge plan program. See 19 NMAC 10.2 Rules 603.D, 603.E, 603.F and 603.G. Finally, MMD more generally has a significant environmental protection and permitting function as regulator of mining. See, e.g., 19 NMAC 10.2 Subparts 3 (minimal impact operations), 4 (exploration), 5 (existing mining operations), 6 (new mining operations), 7 (operations on standby), 11 (inspection, enforcement and penalties) and 12 (financial assurance).

The Water Quality Act provides that the WQCC "shall assign responsibility for administering its regulations to constituent agencies so as to assure adequate coverage and prevent duplication of effort." NMSA 1978, § 74-6-4(E) (emphasis added). Presently, neither MMD nor OCD is listed in the definition of "constituent agency" in the act, although the Oil Conservation Commission is listed. See NMSA § 74-6-2(J). It would seem appropriate for the Legislature to add both MMD and OCD to the list of constituent agencies in the Water Quality Act. In any event, the WQCC should at least consider allocating discharge plan responsibilities at mining sites to MMD. Such an allocation would both "assure adequate coverage and prevent duplication of effort" as contemplated by the Water Quality Act.(7) That certain technical expertise may be centered within the Environment Department should not be an impediment to the allocation of discharge plan responsibilities to MMD, even if it is assumed that MMD lacks sufficient expertise and experience in groundwater protection; the Water Quality Act contemplates that the Environment Department still would be expected "to provide technical services." NMSA 1978, § 74-6-4(E).

B. Environment Department Proposes Definition of "Surface Water(s) of the State"

In the NMED's June 8, 1998 "Proposed Changes to New Mexico's Standard's for Interstate and Intrastate Surface Waters," arising from the ongoing triennial review addressed by others at this conference, the term "surface water(s) of the State" is defined:

"Surface water(s) of the State" means all interstate and intrastate waters including lakes, natural ponds, playa lakes reservoirs, perennial, intermittent and ephemeral streams and their tributaries, sloughs, prairie potholes and wetlands. Waste treatment systems, including treatment ponds or lagoons designed to meet requirements of the Water Quality Act or federal Clean Water Act, are not surface waters of the State. This exclusion does not apply to mine pits, to inactive or abandoned waste treatment systems or to manmade bodies of water which were originally created in surface waters of the State or resulted in the impoundment of surface waters of the State.

Proposed Rule 1007(UU) (emphasis added). Although it is not entirely clear from this definition, NMED apparently considers pit lakes, stormwater and sediment control ponds, and other manmade ponds or impoundments associated with oil and gas and mining operations, to generally fall within the meaning of surface waters of the State. An issue which is not clear is whether an impoundment containing such things as tailings slurry, drilling muds or processing fluids that are partly water or that collect water as a result of natural precipitation or run-on, would be considered by NMED to be waters of the State.

NMED has received considerable comments on the above definition and the proposed definition of "wildlife habitat, " which means "a surface water of the State used . . . by plants and animals . . . not considered as pathogens, vectors for pathogens or intermediate hosts for pathogens for humans or domesticated livestock and plants." Proposed Rule 1007(GGG). Many have advocated that impoundments to control sediment and stormwater runoff should be clearly excluded from the definitions. Mineral extraction companies often have to use sediment ponds for runoff from disturbed areas to address TDS concerns. Others have pointed out that some of the proposed numeric standards for wildlife habitat (such as the proposed numeric standards for mercury and selenium) are unattainable for watering ponds in some parts of the state or are set at undetectable levels given existing technologies employed by labs in New Mexico. Comments also point out that the definition may "regulate away the possibility of retaining ponds on reclaimed mine lands to provide water to livestock."(8) Most of these issues and other aspects of NMED's triennial review proposal (such as proposed changes to the antidegradation policy) likely will be fully aired by others in this conference (as well as in hearings this summer) and need not be addressed in detail here.

C. Environment Department Views Its Jurisdiction at Mining Sites Expansively

The Environment Department ("NMED") is integrally involved with regulating typical mining sites in New Mexico. Before adoption of the 1993 Mining Act, the primary source of that jurisdiction was NMED's discharge plan program to protect groundwater pursuant to the Water Quality Act. With the passage of the Mining Act and abatement program, NMED's role at mining sites has become even more significant. Mining Act provisions require the company to obtain from MMD, prior to MMD's issuing new or existing mining permit, "a written determination from the secretary of environment stating that the permit applicant has demonstrated that the activities to be permitted or authorized will be expected to achieve compliance with all applicable air, water quality and other environmental standards if carried out as described." See NMSA 1978, §§ 69-36-7(P)(2) and -11(B)(4).(9)

NMED takes an expansive view of its role at mining sites pursuant to its discharge plan authority and Mining Act authority. For example, notwithstanding that certain mining units such as waste rock piles must be designed, maintained and reclaimed pursuant to MMD's permitting requirements under the Mining Act, NMED often asserts overlapping jurisdiction pursuant to the discharge plan program, on the apparent theory that NMED involvement is necessary for the protection of groundwater resources. Moreover, jurisdiction sometimes is asserted even where there is no clear "discharge" giving rise to discharge plan requirements, and despite an exemption in WQCC's regulations for "[l]eachate which results from the direct natural infiltration of precipitation through disturbed materials, unless the secretary determines that a hazard to public health may result." 20 NMAC 6.2 Rule 3105(H). Of course, whether an exemption applies is a question is for NMED to decide in the first instance, and companies should not presume to decide it on their own. See Kerr-McGee Nuclear Corp. v. WQCC, 98 N.M. 240, 647 P.2d 873 (Ct. App. 1982). The tendency of NMED is to give the 3105(H) exemption short shrift, and to assume that a hazard to public health may result. Companies are then put in the uncomfortable position of having to decide whether to challenge that assumption at the significant risk of bogging down the permitting or renewal process relating to other aspects of the site.

NMED also views its sign-off role under the Mining Act expansively. Thus, for example, NMED will reviews, evaluates and comments on aspects of a mining permit applications and closeout plans that otherwise would not be within its jurisdiction. Moreover, in contexts where companies have discharge plans pending for hearing or appeal on an application or renewal, NMED takes the position that it cannot provide its written determination until the discharge plan and any appeal by the permittee to the WQCC run their course. The apparent theory, which is a puzzling one, is that the discharge plan may not be protective enough for NMED depending upon the outcome of the appeal by the permittee. Meanwhile, the company is placed in a catch-22 position and could feel compelled to yield to NMED's positions and not appeal for fear of running past permitting deadlines under the Mining Act.

Just as troubling is the fact that the Mining Act gives rise to no clear right of appeal from NMED's failure to provide the written determination companies must obtain before they can receive a permit from MMD pursuant to the Mining Act. Although the Water Quality Act designates the WQCC as the forum for determining jurisdictional conflicts relating to constituent agency duties under the Water Quality Act, no similar appeal rights concerning jurisdictional disputes or the failure of NMED to provide a written determination to MMD is provided. As a result, a company's due process rights may be effectively foreclosed, although it could try its best to advance an appeal from NMED's inaction to the Mining Commission upon MMD's denial of the permit for the lack of NMED's sign-off, with uncertain results.

In short, due to NMED's expansive view of its role at mining sites, companies wishing to permit mining operations in New Mexico face the difficult task of coordinating their state permitting or permit renewal efforts with both MMD and NMED (along with other interested agencies), often simultaneously. Although the agencies have devoted considerable efforts to coordinate themselves, as a practical matter companies must be diligent in moving the processes along by responding promptly to agency requests and urging coordination. Even then, the process tends to be cumbersome.

1. Both EPA's and the Army Corps of Engineers' regulatory definitions of "waters of the United States" incorporate some of the same interstate commerce-based rationale. See 40 C.F.R. § 122.2; 33 C.F.R. Sec. 328.3(a); see also 51 Fed.Reg. 41206, 41217 (November 13, 1986) (use of waters by migratory birds); EPA policy statement dated July 5, 1983 (springs and seeps attracting scientists from out-of-state for the study of unique vegetative species).

2. The new guidance is online at http://www.epa.gov/owow/wetlands/wilson.htm.

3. Although the Supreme Court has recognized "adjacent wetlands" as jurisdictional waters, United States v. Riverside Bayview Homes, Inc., 474 U.S. 121 (1985), it has never considered whether the commerce clause permits extending jurisdiction to "isolated waters" having no hydrological connection to any interstate waters.

4. Many discharges of dredged and fill material are expressly excluded from Section 404 permitting requirements. An example pertinent to the extractive industries includes the exemption for the "[c]onstruction or maintenance of . . . temporary roads for moving mining equipment, where such roads are constructed and maintained in accordance with best management practices to assure that flow and circulation patterns and chemical and biological characteristics of waters of the United States are not impaired, that the reach of the waters . . . is not reduced, and that any adverse effect on the aquatic environment will be otherwise minimized." 33 C.F.R. Sec. 323.4(a)(6).

5. The Corps defines "isolated waters" to mean "non-tidal waters of the United States that are (1) not part of a surface tributary system to interstate or navigable waters . . . and (2) not adjacent to such tributary water bodies." 33 C.F.R. § 330.2(e). The Corps defines "headwaters" to mean "rivers, streams, and their lakes and impoundments, including adjacent wetlands, that are part of a surface tributary system to an interstate or navigable water . . . upstream of the point on the river or stream at which the average annual flow is less than five cubic feet per second." 33 C.F.R. § 330.2(d).

6. To the extent that discharge plans are required at mining sites (which they typically are), they presently are administered by the Environment Department.

7. The Water Quality Act is not the only place where the Legislature expressed a goal of avoiding duplication of effort. The same goal is woven into the very fabric of the Mining Act as well. See, e.g., NMSA 1978, § 69-36-7(J) (directing the Mining Commission to "avoid duplicative and conflicting administration" of permitting and other requirements).

8. Letter from MMD Director Kathleen A. Garland to Program Manager Steven Pierce, NMED Surface Water Quality Bureau (May 27, 1998). This letter proposed language, not adopted to date, which would clearly exclude "water impounded in features whose primary intent is livestock watering or sediment and storm water runoff control which are required or authorized by local, state or federal government regulation [except] features that may impound more than 10 acre feet of water."

9. See also NMSA 1978, § 69-36-9(D) (the MMD Director "shall confer and cooperate with the secretary of environment in administering the [act and] developing regulations").