Authored by: Brendan McGinnis, Director, Water Division, THG

August 8, 2011

If the government’s debt ceiling crisis has taught us anything, it is that uncertainty is bad for business. As Texas Agriculture Commissioner Todd Staples reiterated at a recent Congressional committee hearing on EPA’s greenhouse gas and Clean Air Act regulations, “the market can stand good news, and it can stand bad news, but it cannot stand uncertainty.” Our market economy tends to be risk averse and uncertainty is unsettling. In the regulatory world, such uncertainty breeds inefficiency and controversy.

At The Horinko Group, we have always promoted making the business case for sustainability. But as it stands today, the uncertainty we are encountering in Clean Water Act regulation is simply not sustainable. Not for business, not for the regulatory community, and not for the environment. What triggered this uncertainty?

Many would argue, the brief answer lies in the U.S. Supreme Court opinions in two decisive cases, Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 531 U. S. 159 (2001) and Rapanos v. United States, 547 U. S. 715, 126 S.Ct. 2208 (2006). For the 30 years prior to these case decisions, the extent of federal jurisdiction under the Clean Water Act was reasonably certain. It included waters that were traditionally navigable, plus interstate waters, and waters that were wholly intrastate, and whether degradation could affect interstate or foreign commerce. It also included waters used in a commercial industry, such as fishing. So, it was a pretty broad definition.

SWANCC, as the 2001 case came to be known, and Rapanos, threw this state of certainty into disarray. Both cases were decided by a deeply divided court, with the latter case providing a plurality decision with no clear majority. The decisions left regulators, practitioners, and virtually anyone trying to navigate the waters, literally and figuratively, scratching their heads.

This uncertainty has prevailed now for nearly five years. There is no predictability regarding permitting, enforcement, and monitoring. There is really only one aspect that has become more certain – the probability of costly litigation and project delays. Ultimately, this confounds the efforts by business and industry to effectively plan and attract capital for prospective projects. From the standpoint of a concerned citizenry, there is waning confidence that regulators can protect the values, tangible and intangible, of clean water at some consistent, predictable level. Within the regulatory community, public servants are spending way too much time and resources litigating or avoiding litigation.

So, where do we go from here? Well, let’s start with the obvious. We are in desperate need of a more efficient and effective way to protect what is rapidly becoming our nation’s most valuable, and increasingly scarce asset – clean water. The status quo is not sustainable. For the good of our communities and our economy, the proposed guidance needs to be hammered out and finalized.