Introduction
Mr. Chairman and members of the committee, my name is James Kraft and I am the Vice President and General Counsel for Plum Creek Timber Company based in Seattle, Washington. I appreciate the opportunity to present my testimony today on behalf of the American Forest & Paper Association on the Environmental Protection Agency's (EPA) August 23rd proposed regulations to revise the Total Maximum Daily Load (TMDL) program under Section 303(d) and modifications to the National Pollutant Discharge Elimination System (NPDES) permit program under Section 402 of the Clean Water Act. I'd also like to say at the outset that the forestry community and my company support the goals of the Clean Water Act but we do not believe this program takes us in the right direction. Mr. Chairman, as you will hear, these proposed rules are such a radical departure from the existing federal statute and case law and the economic and administrative burdens so enormous, that it has garnered serious concerns among the forestry, ranching and agriculture community nationwide.
American Forest & Paper Association (AF&PA)
AF&PA is the national trade association of the pulp, paper and forest products industry. We represent approximately 84 percent of paper production, 50 percent of wood production and 90 percent of industrial forestland in the United States. Nationwide, there are over 9 million non-industrial private landowners who own 59 percent or approximately 290 million acres of the total productive timberland. The nation depends on industrial, nonindustrial and public forest lands to supply the raw material used to manufacture the wood and paper products we as citizens enjoy everyday. Plum Creek Timber Company owns land throughout the country including Washington state, Montana, Idaho, Arkansas, Louisiana and Maine.
While AF&PA represents the manufacturers of wood and paper products, all of whom have serious concerns with a multitude of other program changes contained in the rulemaking, I will confine almost all my remarks to the forestry components of the NPDES rule and will explain how this will also have a dramatic economic effect on the forestry community.
As we consider the proposed rules and attempt to decipher an extremely complex issue, the forestry community is struck by the heavy-handed command and control federal approach being imposed upon states and private industrial and non-industrial forest landowners throughout the country. Some important stakeholders in the issue including the National Association of State Foresters, the Society of American Foresters; and the agriculture and ranching community all have serious concerns with the proposed rulemaking. As the Committee is well aware, even the U.S. Department of Agriculture submitted extensive comments in opposition to the proposed rule based on legal, statutory, policy and regulatory interpretations.
The EPA National Pollutant Discharge Elimination System (NPDES) Proposed Rule
I want to first focus on EPA's decision to abandon almost three decades of statutory interpretation of the Clean Water Act and case law by eliminating the designation of forestry activities as a "nonpoint source" activity. Second, I will describe the forestry community's substantial progress in improving water quality. Finally, I will briefly address how we believe the federal EPA can assist states and communities in getting on-the-ground results to protect and maintain water quality nationwide rather than create enormous uncertainty and confusion in a federal regulatory process without commensurate improvements in water quality.
Let me first explain the background of the existing regulation defining these forestry activities as nonpoint sources. In the original Clean Water Act (CWA) 1973 regulations, EPA chose to exclude certain activities, including all silvicultural activities, from the NPDES program, without regard to whether they were point sources. When this was challenged by environmental groups, the federal courts ruled against EPA and ordered the agency to identify those activities that are point sources. EPA responded with silvicultural rules in 1976 that identified four discrete activities (i.e. rock crushing, gravel washing, log sorting and log concentration yards) associated with forestry operations as point sources. They concluded that everything else associated with forestry is a nonpoint source. By way of explanation, EPA stated in the proposed rulemaking that "the [Clean Water Act] and its legislative history make clear that it was the intent of Congress that most water pollution from silvicultural activities be considered nonpoint in nature" and be addressed under section 208 of the statute. 41 Fed. Reg. 6233, 6234 (February 12, 1976).
EPA has proposed to eliminate the following activities from categorization as a nonpoint source: nursery operations; site preparation; reforestation; cultural treatment; thinning; prescribed burning; pest and fire control; harvesting operations; surface drainage and; road construction and maintenance. Instead, EPA proposes to redefine them as point sources. The proposed rule would give EPA or NPDES-authorized States the authority to designate silvicultural activities as point sources requiring NPDES permits. The designation would be triggered when the State or EPA determines that the silvicultural activity "contributes to a violation of a water quality standard or is a significant contributor of pollutants to waters of the United States." EPA states that it will only exert this authority in impaired waterbodies on a case-by-case basis where a state fails to develop a reasonable assurances program that BMPs can achieve load reductions in an impaired waterbody and the activities are not enforceable. The additional Agency caveat discussed in the proposed rule is that it will be applied prudently, rarely and only as a "last resort."
For the first time in the history of the Federal Water Pollution Control Act and its subsequent Amendments, the U.S. EPA has now asserted its direct control of forest management activities on private lands. Let me give you the quote of what an EPA Region 1 official said at an EPA-sponsored public hearing conducted in Concord, New Hampshire on December 17th on how this rule would be implemented. "It ultimately will be left to the state… But we would have to approve each request for a permit to conduct a logging or logging-related activity to assure it won't harm the water." Given such statements, the forestry community has no confidence that the Agency or others opposed to forest management will enable any forest landowner to perform activities without federal oversight and the inevitable litigation that will result. Moreover, EPA's stated limitations on use of the point source designation authority will not be supported by the courts and will inevitably be expanded to include all waterbodies where forest management is conducted.
Progress In Improving Water Quality
EPA contends that because silviculture activities can be a cause of water quality impairment this gives them discretionary license to label such activities as point sources. The EPA citation of silviculture's impact on water quality is selective and in some cases directly contradicts reports referred to in the proposed regulations. Every state with significant forest management activities has developed forestry best management practices or rules and submitted them to the Agency as part of the Section 319 nonpoint source program. More than 20 states have conducted periodic BMP compliance surveys. Other states including Florida and South Carolina have gone further by conducting state-wide BMP effectiveness studies to measure water quality upstream and downstream of forestry operations and determine their ability to protect water quality. And the results are clear - they are effective in maintaining and protecting water quality.
Take the state of Montana, for example, where Plum Creek owns 1.5 million acres of timberland. EPA writes in the economic analysis accompanying the proposed regulations that Montana does not have a sufficient reasonable assurances program and therefore it will be subject to NPDES permit requirements. Over the past decade, Montana has developed a rigorous Best Management Practices (BMP) compliance survey program. The most recent results from 1998 found statewide compliance with BMPs averaged 94% - up from 78% compliance in 1990. This improvement was achieved not through heavy-handed regulation, but was brought about by locally-led efforts to educate loggers and landowners.
The most recent publicly available data from EPA's website, the 1996 national TMDL tracking database, indicates that only eleven states listed silviculture as a cause of impairment on their Section 303(d) list of impaired waterbodies where total maximum daily loads would actually have to be performed. These are the only waterbodies where the Agency purports the rule will apply. Further, almost two-thirds of the stream segments listed due to silviculture were from one state - Montana. In 1997, Montana's legislature passed a bill that required the state to document the scientific basis for listing streams as water quality limited. After conducting this review, Montana DEQ has found that they in fact did not have credible data to justify the listing of over half the streams on the 1998 Montana 303(d) list.
Placing the national numbers into perspective and upon closer examination of the federal and state reports, the following information clearly reveals that forestry is a relatively minor cause of water quality impairment across the country:
· Silviculture accounts for approximately seven percent of the total impaired river miles nationwide;
· The relative amount of total river and stream impairment due to silviculture dropped from 9 percent in 1988 to 7 percent in 1996;
· The number of river and stream miles classed as "major impairment" due to silviculture dropped 83 percent between 1988 and 1996;
· The length of river and stream miles impaired from natural causes is about twice the length of impairment due to silviculture;
· Silviculture represents one-tenth of one percent of the impaired coastal waters;
· Silviculture represents less than one percent of lake impairment;
· EPA's 1996 National Water Quality Inventory report dropped silviculture from the chart as one of the seven leading sources of impairment to rivers and streams; and
· Compliance with state forestry best management practices is reaching 90 percent or more;
I would like to share with you some of our accomplishments as an industry. Through the Sustainable Forestry Initiative (SFI)K program, in which all members participate as a condition of membership, many members have committed to going above and full compliance with Best Management Practices (BMPs) to protect water resources during forestry operations. Through their compliance with the SFI objectives, member companies are committed to fostering the practice of sustainable forestry through landowner education efforts on all forestlands.
In 1997, AF&PA member companies began reporting on the number of acres and miles of streams that are enrolled in wildlife and fisheries agreements with conservation groups and public agencies that specify on-the-ground management practices. Almost 11 million acres, representing 20 percent of the total acres in the SFI program, and 4,286 miles of stream have been enrolled in these agreements. The SFI program has established State Implementation Committees in 32 states that receive more than $3.1 million from AF&PA members and allies to foster their responsibilities to promote SFI principles. While industrial forestland constitutes approximately 15 percent of the nation's forested acreage base, AF&PA members are also committed to expanding and promoting sustainable forestry into the broader forestry community.
Economic Implications of the Proposed Rules
EPA's economic analysis accompanying these proposed rules claims that between 600 and 1200 landowners per year will be affected and total administrative costs to sources and EPA/states would fall between $3.72 and $13.22 million. Mr. Chairman, there is no way that the economic burden on landowners, loggers, state agencies and the federal government would be so limited. If a permit is necessary according to EPA, they attempt to reassure the affected landowners by stating that it will only take 2 hours to prepare a notice of intent to file for a federal permit. If the national forest system timber sales program is used as a guide, actually obtaining the federal approval to conduct a harvesting operation is the real time question.
There are literally thousands of silvicultural "events" in each state every year. According to AF&PA's assessment, supported by the work of five independent forest economists at well-respected academic institutions around the country, the incremental economic burden to landowners, operators, communities and government agencies could easily exceed $1 billion annually, nationwide. The administrative costs alone of an NPDES program for silviculture, even in the unlikely event that it would be invoked sparingly, would exceed EPA's estimates by several fold. Because the economic impact will far exceed $100 million annually, EPA must comply with the Unfunded Mandates Reform, Executive Order 12866, and the Regulatory Flexibility Act by conducting a more detailed and comprehensive benefit-cost economic analysis of the proposed rule.
EPA Rationale for Designation of Forestry as a Point Source
EPA provides two reasons for its change of interpretation. First, that the 1987 CWA amendments did not categorically exempt silvicultural activities from the stormwater program similar to the agricultural exclusion provision. Second, Congress never explicitly stated that silviculture was a nonpoint source.
To the first point, EPA relies on the Section 402(p) stormwater provisions as their authority to designate silviculture as a point source. They claim that because stormwater Section 402(p) of the CWA does not explicitly exempt stormwater discharges associated with silvicultural operations from NPDES permits (as opposed to agricultural stormwater runoff that is statutorily exempt), they have therefore interpreted the statute to allow the Agency to regulate silviculture under the stormwater program. Essentially, EPA claims that the absence of a specific exemption for silvicultural activities gives license to the agency to transform those activities from nonpoint sources to point sources. This interpretation constitutes an incredible usurpation of authority from Congress. In effect, EPA says that congressional failure to statutorily define every nonpoint source activity gives them license to designate as a point source, whenever it chooses, any and every nonpoint source activity except agricultural activities involving stormwater runoff. This interpretation strips from the Section 319 program everything except agricultural stormwater discharges and irrigation return flows. We suspect Congress would be astounded to learn that this is the consequence of its addition of the agricultural stormwater discharge exception to the CWA definition of point source.
With respect to the lack of a specific statutory exemption for silviculture, AF&PA believes that the 1972 Act and its 1977 and 1987 amendments clearly intended not to regulate water pollution from most silvicultural activities through the Section 402 or 404 permit programs. In fact, the 1987 Amendments enacted the Section 319 provisions to specifically address nonpoint source runoff, including silvicultural activities, through a state-based best management practices program. In the Section 208 provision, the forerunner of the 319 nonpoint source program, Congress directs states to put together a plan and process to "identify, if appropriate, agriculturally and silviculturally related nonpoint sources of pollution." Instead of relying on the statutory language and Congressional reports, EPA now claims the "discretionary" authority to require a federal NPDES permit for silvicultural activities based on whether its located in an impaired waterbody and whether a state has an adequate total maximum daily load (TMDL) reasonable assurances program. Mr. Chairman, the forestry community-at-large finds this to be an incredible expansion and interpretation of statutory authority.
EPA Stormwater Regulations
What is further astounding about these proposed rules is that it directly contradicts EPA's November 1990 stormwater regulations issued three years after the 1987 Amendments were enacted. At that time, EPA declared that silvicultural point sources do not include the very same activities they claim today are point sources. In fact, EPA modified the final rule to state that "stormwater discharge associated with industrial activity" does not include discharges from facilities or activities excluded from the NPDES program under 40 CFR Part 122. Activities excluded under that regulation were precisely the same activities EPA now claims are point source discharges. Let me quote from the EPA rules: "EPA agreed with the commenters that logging is a transitory operation that may occur on a site for only a few weeks in a 20-30 year period, that delays in obtaining permits could create problems in the harvest schedule and mill demand, and that "runoff from such operations should be controlled by BMPs in effect for such industries and that such a permit would not be practical and would be cost prohibitive." 55 FR 48,011 (1990).
In fact, Section 402(p)(5) required EPA to submit a stormwater report to Congress to identify those stormwater discharges or classes not subject to industrial or municipal permits. There is nothing contained in that March 1995 report to indicate that silviculture should be permitted. To the contrary, the report does not include silviculture among the five "leading sources of water quality impairment" and does not identify forestry operations among the 90 categories of facilities and activities appropriate for consideration as potential "Phase II" sources subject to permitting.
Forestry and the Clean Water Act
Where Congress spoke to imposing federal permits for forestry activities they did so directly and unequivocally. Here's an example: In 1977, Congress enacted the Section 404 discharge of dredged and fill provisions which provided a conditional permit exemption for the identical silviculture activities EPA now claims "discretionary" authority to regulate. While some might argue that these are separate and distinct provisions, there is no distinction in terms of the potential runoff event. Somehow disturbed soil that is exempt from permitting (as dredged material) under Section 404 becomes eligible for permitting (as sediment) under Section 402. We do not believe that Congress intended for EPA to interpret a 1987 stormwater provision that contains no reference to silvicultural activities as regulatory license to override the Section 404(f) "normal silviculture activities" exemptions.
Further evidence of Congress' view that silvicultural activities in general, and forest road construction and maintenance in particular, are satisfactorily regulated through means other than a permit system comes from the Clean Water Act of 1977, Pub. L. 95-217, 91 Stat. 1566 (1977). The Senate Committee report accompanying the 1977 statute stated: "The construction of farm and forest roads is exempted from section 404 permits. The committee feels that permit issuance for such activities would delay and interfere with timely construction of access for cultivation and harvesting of crops and trees with no countervailing environmental benefit." In another passage of the same report, the committee states "no permits are required" for activities listed in Section 208(b)(2)(F) through (I) "for which there are approved best management practice programs."
The forestry community, many state agencies, governors and others oppose the designation of forestry activities as a point source. We do not believe there is any legal or statutory authority for EPA to revise the regulations that would eliminate the nationwide recognition of forestry as a nonpoint source activity merely to address some unidentified last resort situations on an individual basis
The Total Maximum Daily Load (TMDL) Proposed Rule
There is an equally important reasonable assurances requirement that flows from the proposed TMDL rule that should be briefly mentioned. The Section 303(d) provision requires states to identify impaired waters (those waters not meeting water quality standards) and establish priority rankings and develop total maximum daily loads (TMDLs) under Section 303(d) of the Clean Water Act. Heretofore, under EPA's existing regulations, a TMDL has been a numeric calculation of the amount of pollutants a waterbody can receive from point source discharges, nonpoint source runoff, natural background; with a margin of safety. Setting aside the scientific difficulty of actually calculating a "daily" load from nonpoint source activities, the proposed rule requires states to submit an "implementation plan" under Section 303(d). The plan would contain not only the numeric calculation but also eight required elements including control actions and measures that must be implemented before EPA would approve the TMDL. The big issue, and one that was unresolved in the Federal Advisory Committee Act (FACA) group report, is whether the implementation plan should be submitted for approval by EPA under Section 303(d) or submitted under 303(e), the continuous planning process provision of the Act. We do not believe that Section 303(d) provides EPA with the authority to require implementation plans, nor does it provide, as EPA contends in the proposal, that implementation plans can be approved, disapproved, or taken over by EPA. This is not a minor legal issue but one that has enormous consequence for private landowners.
For example, lets examine the situation where EPA rejects an implementation plan because the Agency does not believe the forest stream side zone (SMZ) management width requirement established by a multi-stakeholder state best management practices group is sufficient to protect water quality. The Agency, having given themselves the authority to take over the state program, is now free to re-write the implementation plan, change the state's SMZ requirement and then impose an NPDES permit requirement because the state allegedly does not have sufficient enforcement authority. This is not theoretical, but exactly the type of authority the Agency is proposing to grant to itself. Moreover, the Agency is exposing itself to countless citizen suits if it does not exercise this authority to the satisfaction of environmental activists.
According to EPA's August 1997 Memorandum published in the Federal Register, "implementation of a TMDL depends on other programs and activities; a TMDL alone does not create any new or additional implementation authorities." The numeric TMDL itself must be approved by the EPA but no reading of the statute or its legislative history calls for the preparation and submission of an implementation plan under 303(d). We believe the continuing planning process described in the Clean Water Act's Section 303(e) provision is the implementation phase for the 303(d) listed stream segments.
Other Alternatives
It is plainly evident from the reaction by the majority of state agencies, state water quality agencies, governors and others that the proposed rules were formulated without the advice and input from those stakeholder groups who will be ultimately responsible for implementing the regulations. Mr. Chairman and members of the Committee, there is a better way. It requires additional funding of the Section 319 program, greater cooperation among multiple state agencies engaged in nonpoint activities, more partnerships with private landowners and stakeholders and better dialogue between EPA Regional Offices and the states to make improvements to water quality happen. However, the federalization of nonpoint source activities as proposed under these circumstances will create dissention and not accomplish the mutual goals shared by everyone.
Conclusions
Mr. Chairman and members of the Committee, over 30,000 comments have been submitted on these rules and the forestry community represents a sizeable share of those comments. We feel strongly that only Congress should determine how nonpoint source activities are addressed under the Clean Water Act. As a January 20, 2000 Congressional Research Service report states: "It is difficult to argue that a Congress that took such care to minimize the federal role in the CWA sections that explicitly address nonpoint source pollution could have intended the possibility of direct federal regulation of such sources through a provision such as section 303(d) that makes no mention of nonpoint sources." As Congress has recognized several times, nonpoint source pollution is not amenable to point source discharge permits. Any call for more narrowly crafting or tailoring the designation of forestry as a point source discharge is not consistent with the statute and is clearly against USDA's original comments that were submitted into the EPA comment docket. We do not believe there is any legal or statutory authority for EPA to revise the regulations that would eliminate forestry as a nonpoint source activity merely to address some unidentified last resort situation on an individual basis.
The TMDL program will require states to develop 40,000 TMDLs on the estimated 20,000 impaired waterbodies nationwide. As was the case in Montana, and supported in a General Accounting Office (GAO) study, there are significant resource constraints at the state level including the lack of monitoring and sampling to do an effective job in implementing these proposed regulations for both nonpoint and point sources. The imposition of additional requirements on states to list impaired waterbodies, develop TMDLs and to "allocate loads" through this proposed rulemaking will overload the system. As we have learned from other federal environmental statutes, it is absolutely necessary to first undertake the necessary studies to assure that major program changes such as these are scientifically defensible, technically feasible and cost effective.
In the end, we believe that these rules will discourage the practice of sustainable forest management. They will create disincentives to expand forest cover in the U.S., stifle economic opportunity and prosperity in communities desperate to be part of the economic revival in this country and make it more difficult for people to make a living off their land.
This concludes my remarks, Mr. Chairman, and I would welcome any questions you or members of the committee may have.
TESTIMONY OF MR. JAMES KRAFT
VICE PRESIDENT AND GENERAL COUNSEL
PLUM CREEK TIMBER COMPANY
On Behalf of
American Forest & Paper Association
On
EPA's August 23rd Proposed Water Quality Regulations
February 23, 2000
Before the
Senate Agriculture Committee