You are here

OpenMarket: Water

  • Understanding the EPA’s Power Grab through the “Waters of the U.S. Rule”

    June 1, 2015 1:44 PM

    Last week, the U.S. Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (USACE) promulgated the Waters of the U.S. Rule, a regulation that purports to clarify which waters of the United States are subject to federal jurisdiction under the Clean Water Act (CWA).


    The CWA regulates the discharge of pollution into navigable waters. Rather than limit the definition of “navigable waters” to mean waters that are interstate and “navigable in fact,” the Clean Water Act broadens the definition of “navigable waters” so as to include non-navigable waters, in order to afford federal regulators a greater degree of environmental oversight. Federal jurisdiction, therefore, extends beyond waters that are strictly “navigable.”

    However, the Clean Water Act fails to establish an exact limitation on federal jurisdiction over non-navigable waters. Thus, Congress has failed to define precisely the term “navigable waters.”

    The Supreme Court also has failed to define the boundaries of federal power under the Clean Water Act. In 2006, the Court reached a confused 4-4-1 ruling in Rapanos v. United States (2006)

    • Four left-leaning justices effectively ruled that there are no limits on federal jurisdiction.
    • Four right-leaning justices took a common-sense approach, and ruled that federal jurisdiction is limited to “relatively permanent, standing, or continuously flowing bodies of water forming geographic features.”
    • One justice (Kennedy) wrote that a water or wetland constitutes “navigable waters” under the Act if it possesses a “significant nexus” to waters that are navigable in fact or that could reasonably be so made.

    Since 2006, lower federal courts have made hash of Rapanos v. United States. This makes sense. Rapanos resulted in three different interpretations, and none carried a majority. As there was no agreement in the highest court in the land, there was no reason to expect agreement in America’s lower courts.

    Predictably, the EPA and USACE interpreted the Rapanos decision in the broadest possible fashion. These agencies seized on Kennedy’s impossibly ambiguous “significant nexus” test. In practice, a “nexus” (connection) between an alleged body of water and a navigable water is in the eye of the beholder. Simply put, the significant nexus test is broad enough to justify whatever jurisdiction the federal government chooses to seize. 

  • How to Improve the Energy and Water Development Appropriations Bill

    April 28, 2015 4:12 PM

    The Energy and Water Development Appropriations bill for FY 2016 passed by the House Appropriations Committee spends too much, but does move some funding from very bad programs to somewhat less bad programs. 

    The best thing in the bill is the set of riders that prohibit the Army Corps of Engineers from implementing the proposed Waters of the United States rule. That rule if implemented would expand federal jurisdiction far beyond what was intended by Congress in Section 404 of the Clean Water Act, and far beyond the current definition or any reasonable definition of the navigable waters of the United States. The WOTUS rule also ignores and largely contradicts the Supreme Court’s decisions in SWANCC and Rapanos. 

    Here are a few suggestions for improving the Energy and Water Appropriations bill when it comes to the floor of the House this week:

    1. A rider prohibiting funding to use the Social Cost of Carbon guidance document in any rulemaking or any benefit-cost analyses by the DOE and FERC.
    2. The rider offered successfully for the past several years by Rep. Michael Burgess that prohibits funding to enforce the 2007 ban on standard incandescent bulbs.
    3. An amendment to reduce funding below FY 2015 levels. The bill passed by the House Appropriations Committee increases Energy and Water funding by over $1,200,000 above current levels.  The Department of Energy has been a mess for decades. Many, perhaps even most, DOE programs should be eliminated. If eliminating unnecessary and counter-productive programs is beyond what can be done this year, then the House should at least cut the total funding level to below the current level.
    4. A rider prohibiting any funds to be used to develop, propose, or implement new energy efficiency standards for all or some of the following: residential dishwashers, residential clothes washers, residential air conditioners and heat pumps, residential water heaters, portable air conditioners, residential gas furnaces, residential conventional cooking products, residential boilers, residential dehumidifiers, residential furnaces and boilers, central air conditioners and heat pumps, ceiling fans, and small electric motors and other electric motors. 
    5. A rider prohibiting funds to be used to develop, propose, or finalize new energy efficiency standards for some or all of the following: commercial heating, air conditioning and water heating equipment, commercial water heating equipment, manufactured housing, commercial and industrial pumps, fans and blowers, commercial warm air furnaces, and small, large, or very large commercial package air conditioning and heating equipment.
    6. A rider prohibiting funding for the Department of Energy to attend COP-21 in Paris in December or to participate in the negotiations on the forthcoming Paris Accord from October 1 onward. This would be an interesting test vote for other appropriations bills coming up.
  • California Drought 2.0, or Is it 3.0?

    April 6, 2015 6:46 AM

    California’s water woes are back in the headlines after Gov. Jerry Brown commanded a 25 percent cut in consumption last week after extended drought.

    Pricing matters and we’ve not done the greatest job liberalizing infrastructure and matching resouces to market signals. California’s just the most extreme modern example, now pitting neighbor against neighbor. Pools in the desert are scorned, as are the lush desert golf courses, and thirsty agricultural interests.

    But water doesn’t cost much. It needs to cost what its worth, and part of the job of markets is to determine prices. But markets are not what water utilities are.

    After congressional testimony on western states water policy a year and a half ago, California’s water crisis resurfaced again. I wrote a column in Forbes then noting that California, western and national water resources and environmental amenities should be better integrated into the property-rights, wealth-creating sector. That’s an evolution derailed here as well as in other sectors such as in electromagnetic spectrum, electricity and transportation grids.

    Recommendations were these:

    First, better pricing of existing supplies can make shortages vanish. (I talked about the water/diamonds paradox; you can Google it.)

    Second, improving water infrastructure can reduce the leaks that now deplete some 17 percent of the annual supply, as noted in a Competitive Enterprise Institute report by Bonner Cohen.

    Third, better transport and infrastructure, including pipelines and canals, better reservoir storage, trucking, and crude oil carriers can secure supply and lessen artificial drought more cheaply than expensive politically pushed alternatives like desalination.

    Fourth, improved trades between cities, farmers and private conservation campaigns can be essential to pricing and value.

    All these can supplement direct sourcing alternatives including drilling, gray and wastewater treatment and reclamation; stormwater harvesting and surface storage and, OK, you got me: even desalination where it’s economically rational.

    The path taken politically is usually restrictions on usage rather than pricing and liberalization, so there’ll be plenty headlines to come. 

  • Taxpayer-Funded Green Ministries in Prince George's County Violate the Constitution

    November 21, 2014 3:15 PM

    Reporters like separation of church and state, unless it’s progressives violating it. Then, they lose interest in the concept. A recent Washington Post story cheerily reported on churches getting exemptions from a state-mandated stormwater fee (Maryland’s “rain tax”) in exchange for taking “green” positions, in the progressive bastion of Prince George’s County, Maryland. The story did so without even mentioning the serious issues that raises under the Establishment Clause and the First Amendment.

    This sets a dangerous precedent. As legal commentator Walter Olson asks, “Since when does government get the power to cut churches tax breaks in exchange for their agreement to preach an approved line?”

    This violates freedom of speech under the unconstitutional conditions doctrine. Under Supreme Court precedent, you can’t condition a valuable government benefit like a tax exemption on someone’s speech. Speiser v. Randall, 357 U.S. 513 (1958), was a Supreme Court case addressing California’s refusal to grant a veteran a tax exemption because he refused to sign a loyalty oath as required by a California law. The Supreme Court ruled that the condition violated the First Amendment. The Supreme Court has reaffirmed this “unconstitutional conditions” doctrine in many other cases and contexts, such as in Dollan v. City of Tigard, 512 U.S. 374, 385 (1994).

  • Western Water and California Drought, Part 2: No Need for Malthusian Despair

    September 9, 2014 8:28 AM

    Well, some good news—it’s raining in Los Angeles.

    Western droughts combined with questionable water access policies spawn water crises that unfortunately are not unique to the American west and California in particular.

    Rather, water access issues are globally contentious. A Wall Street Journal book review on the “unhappy descent” of Turkey’s Meander River invoked common laments that: 

    In North America, so much water is taken out of the Colorado that it no longer reaches the sea. Nor does the Rio Grande. Or the River Jordan. Or China’s Yellow River.

    Access to water in times of plenty and in times of drought is a fundamental infrastructure concern worldwide. Further, the issues surrounding innovation and research in water policy are elements of broader science and manufacturing policy.

    Aggravations abound—and so do penalties. One Oregon man catching rainwater on his own property received 30 days in jail for breaking a 1925 law prohibiting personal reservoirs. But when scarcity looms and emotions run high, strange things happen.

    In addition to novelties like rainwater theft prosecution, water policy can be fundamentally perverse and distortionary: water supply systems may not cover their debts, operations and capital replacement needs, and as governmental monopolies, they sometimes “are used as cash cows to support more labor-intensive functions of local government, such as fire and police,” as G. Tracy Meehan has noted.

Subscribe to OpenMarket: Water