Word out today that PADEP has to cut 120 jobs as a result of the recent budget. I'm told that the final word on which employees are being cut will come out on Friday. I feel for my friends within the Department, both management and staff. This cannot be an easy time for anyone.
The Notice of Proposed Rulemaking for the proposed regulations on Discharges of High Total Dissolved Solids (TDS) was published in the Pennsylvania Bulletin on November 7, 2009. The comment period on the proposed regulations runs through February 5, 2010, and PADEP has scheduled four public hearings to take place in December. If everything runs according to the Department's stated timetable, the new regulations would take effect on or before January 1, 2011.
I've written about the potential impact of the proposed regulations in prior posts on this blog. For the Marcellus Shale industry, the regulations impose new treatment requirements and restrictions on wastewater discharges. Given the amount of money being invested by the Marcellus Shale industry in developing natural gas wells in Pennsylvania, I assume that they are prepared, to paraphrase JFK, to pay any price and bear any burden to make what could be billions in revenue from wells drilled into the Marcellus Shale formation. For businesses outside the growing natural gas industry, i.e., traditional Pennsylvania manufacturing businesses, these new regulations will pose some significant business challenges.
The regulations pose challenges for new businesses looking to locate in Pennsylvania. Any "new" business, i.e., one that did not have a wastewater discharge as of April 2009, will need to comply with the 500 ppm TDS discharge limit, if its wastewater discharge would otherwise exceed 2,000 ppm of TDS. In all likelihood, that will mean modifying processes to stay below the applicable thresholds so as not to trigger the need for wastewater treatment. If that can't be done, then the business will need to identify a means of treating the discharge and pay the cost of that treatment.
For existing businesses looking to expand, the regulations will pose unique challenges. Hypothetically, let's assume you are operating a manufacturing plant in Pennsylvania that employs 300 people. The manufacturing process uses water for cleaning purposes and it currently is treated before being discharged into some surface water. Your current permit has no limit on TDS, or for purposes of the hypothetical, let's assume it allows you to discharge up to 3,000 ppm of TDS. If this regulation becomes law, that business will be allowed to continue operating in its present form and nothing will change. There will be no unilateral reduction in the TDS limit and no need for additional treatment. The moment the manufacturer decides to increase production, resulting in an "expanded" or "increased" discharge, these new regulations would kick in and the manufacturer would have to identify means to treat the TDS discharge to meet the 500 ppm limit. The problem is, as PADEP recognizes in the preamble to the proposed rulemaking, "currently no treatment exists for TDS, sulfates and chlorides, other than dilution." Although the Department and stakeholders are trolling the literature, it's very possible that there still will be very few options available for treating high TDS when these regulations become final. That is going to present existing Pennsylvania businesses with a dilemma. They can stay in Pennsylvania and operate at current levels without the need to identify or pay for new wastewater treatment on TDS. If they decide they need to expand, they'll have to weigh the costs and availability of any new wastewater treatment against other options, which will include shutting down and/or moving operations outside Pennsylvania.
The last thing I would expect Pennsylvania elected officials would want is to force businesses to leave or locate new facilities elsewhere. And don't think businesses won't leave. In today's business climate, where many Pennsylvania manufacturing facilities are owned by out-of-state or foreign corporations, any disincentives to staying or locating in Pennsylvania could be the deciding factor. Having been an environmental lawyer for over 20 years, I've seen too many good Pennsylvania companies disappear from the landscape. Some have gone south (North Carolina, Texas, Mexico), others have gone overseas (India, China), and others have gone bankrupt or just gone out of business (Bethlehem Steel). When I was Deputy Secretary at PADEP, our brownfield program grew out of the fact that virtually every Pennsylvania community was the home to some old factory that was vacant, abandoned or underutilized, and incentives were needed to put those sites back into productive use.
While I realize that high TDS is an issue in some places around Pennsylvania, it certainly is not an issue throughout the Commonwealth. The rulemaking preamble notes that the Department is considering the formation of a work group in the Monongahela River Watershed to focus on wastewater issues relating to the Mon. No doubt there will be some questioning why the Department needs to take a one-size-fits-all approach to high TDS discharges. Why couldn't it simply focus on high TDS from the Marcellus Shale operators? Why couldn't it focus just on the Mon and the West Branch of the Susquehanna? Maybe those issues will be raised in the public comments, or during the public hearings scheduled outside those watersheds.
The rulemaking creates great uncertainty for Pennsylvania businesses. It makes it difficult to do long range planning. On top of that, there would appear to be some wishful thinking on the Department's part that cost-effective, wastewater treatment technologies will become available before the regulation becomes effective. All Pennsylvania business that generate high TDS need to take this seriously and to plan accordingly. Those plans should start with preparing comments for submittal to the EQB and working with their industry groups to make sure the Department hears their concerns.
I spoke with Scott Dunkelberger at PADCED today to see if he still has funds available for assessments and remediation grants. Scott says that the General Assembly transferred approximately $5 million from Growing Greener 2 into the ISR Fund, so he's in good shape. The most recent budget zeroed out approximately $500,000 that had been annually appropriated for assessments under Act 4, but there is still plenty of state money available for environmental assessments and remediation at brownfield sites in Pennsylvania. Applicants for grants must work with their local economic development agencies or redevelopment authorities, since only loan money is available to private developers. One piece of good news is that Scott says there really is no backlog at this point for ISR funding. When the economy was cranking, there often was a 6 to 12 month wait to get ISR funding, because there was always more funding requested than there was funding available. With the slowdown in the economy, there's no backlog now, so anyone with a viable brownfield redevelopment project should get in line now.
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