New Mexico’s groundwater protections may take a hit

by Sarah Jane Keller

After three weeks under glaring lights in a Santa Fe hearing room, the 10 men on New Mexico's Water Quality Control Commission looked weary. Some were hypnotized by laptops, and binders stacked like monuments to the complexity of groundwater regulation obscured others. But when Bill Olson wheeled a handcart piled with document boxes to the witness stand, the commissioners perked up, adjusting their glasses. The April afternoon grew tense.

Olson, a neatly bearded water guru in cowboy boots and a bolo tie, had sat on this commission for 13 of the 25 years he spent regulating water quality for the state, including running its groundwater bureau. He retired in 2011, planning to spend his time riding horses, repairing the neglected stucco on his home, and doing some hydrological consulting.

He did begin the consulting work, at least. The Environment Department hired him to help draft a new groundwater pollution rule for copper mines. Olson's contract stipulated that he would testify for the state when the commission, which has final say on new regulations, considered the "copper rule." But in a surprising twist, he was there that April day to oppose the rule he'd been hired to write. Olson spent the better part of a year drafting his arguments, working full-time with no pay. His motivation was simple, he says. In a state where almost everyone drinks groundwater, "It's important."

As a regulator, Olson sought the middle ground between business and environmentalists. The copper rule ultimately proposed by the state was unquestionably good for the mines. But Olson believed last-minute changes made by the Environment Department's top brass upended New Mexico's Water Quality Act by giving mines a free pass to sully groundwater. The rulemaking had become political. To Olson, it was jeopardizing one of the public's most precious resources.

The copper rule's undoing follows a larger trend in New Mexico. Historically a leader in groundwater protection, New Mexico spent the last decade gradually strengthening its rules for major polluters. But since taking power in 2011, Republican Gov. Susana Martinez's administration has aggressively attacked environmental protections. The copper rule is the latest reform, and potentially the most damaging. Water-quality advocates fear it will set a precedent for all polluters, from drycleaners to molybdenum mines. As Olson puts it: "It's probably the biggest thing to happen with groundwater protection in New Mexico since the rules were first adopted 35 years ago."

Susana Martinez is among the nation's most popular governors, with an approval rating consistently over 60 percent in this blue-leaning state, largely due to her reputation as an independent thinker. ("Susana Martinez: What Palin could have been," read a 2012 Salon headline.) She campaigned on economic development and smaller government, but declined to slash classroom funding to balance the budget, and was one of the first Republican governors to accept the Medicaid expansion accompanying Obamacare.

She's fits the modern conservative stereotype on natural resources, though, valuing them primarily for their economic potential. Early in her campaign, she pledged to repeal the state's rules for oil and gas waste disposal -- the nation's most stringent. "The folks in the oil industry are good stewards of the Earth," she said. "To continually regulate them is to regulate them out of the state." She promised to "help those who play by the rules and punish those who do not," supporting both business and the environment.

But she also aimed to change the rules. On her first day in office, she suspended publication of all pending regulations for 90 days, buying time to strategize their repeal. She then created a small business-friendly task force to find what she called "irrational red tape." The panel, which included Cabinet secretaries and lobbyists for energy, dairy and copper, recommended scrutinizing three agencies: the Energy, Minerals and Natural Resources Department, Game and Fish, and the Environment Department. It pegged groundwater regulation as a top priority, and suggested "looking for ways to mitigate" the problems created by career managers with "anti-business political agenda(s)."

The solution, it appears, was reorganization. By May 2011, four Environment Department managers who oversaw large or controversial regulatory programs were reassigned to bureaus in which they had little expertise. For instance, Hazardous Waste Bureau Chief James Bearzi, who oversaw the cleanup of a major jet fuel spill at Kirtland Air Force Base -- and criticized the military's handling of it -- was transferred to surface water quality, while that division's boss, Marcy Leavitt, was moved to petroleum storage tanks -- a regulatory Siberia.

Managerial shakeups aren't unusual under new governors. But environmental advocates and former agency employees say the recent changes cut deeper than usual. "The Martinez administration has moved out anyone who is effective or who had knowledge or skill in geology and hydrology," says Bruce Frederick, a trained hydrologist and an attorney with the New Mexico Environmental Law Center, which is fighting the copper rule and other regulatory rollbacks. "The idea is to make the Environment Department ineffective."

Bill Olson escaped the purge, thanks to his impending retirement. One of his biggest accomplishments, however, quickly came under fire. As chief of the groundwater bureau, Olson led a team that spent two years crafting the nation's strongest rules for mega-dairies, which are serious polluters in California, Washington and Idaho, as well as New Mexico. It required monitoring wells to quickly detect leaks, and synthetic liners to keep nitrates, and salts, from seeping into groundwater from manure lagoons. The dairies boycotted the rule's initial advisory group process, balking at the regulatory expense and oversight, and threatening to take their 4,000 jobs elsewhere. Nevertheless, the Water Quality Control Commission approved the rule at the end of Gov. Bill Richardson's term.

The dairy rule came on the heels of a similar Richardson-era rule for oil and gas producers that encouraged closed-loop systems instead of open waste pits. It, too, was one of the nation's strictest. The state's groundwater protections looked stronger than ever.

That began to unravel under Martinez, beginning with her executive order halting new regulations, including pioneering greenhouse gas regulations as well as the dairy rule. (Dairy lobbyists, it was later revealed, helped draft that order.) After the New Mexico Environmental Law Center successfully sued, and the dairy rule went on the books, the industry appealed. By October 2011, Olson had negotiated a new rule for the state, and retired. But he testified for free at the final hearing, where the commission passed a compromise rule that left everyone modestly satisfied.

For the Martinez administration, the success was partial: The rule was revised rather than killed outright. The copper rule, however -- the development of which was, like the dairy rule, legally mandated -- would be written entirely on its watch, presenting a prime opportunity to reshape groundwater policy.

Southwestern New Mexico has been a copper-mining hub for more than 100 years, and the state is currently the nation's third-largest producer. Freeport McMoRan, the world's second-largest copper company, owns the Chino, Tyrone and Cobre mines, and employs about 1,600 people in the sparsely populated area around Silver City.

The consequences of failed pollution prevention are already evident at the three mines. Groundwater beneath about 20,000 acres is contaminated with sulfuric acid, sulfates and heavy metals that have seeped into it from leach piles, unlined tailings impoundments, and waste-rock heaps. Domestic wells aren't affected, but studies estimate that contamination could enter their water sources in 40 to 50 years, should Freeport McMoRan stop pumping water from the Tyrone Mine.

In January 2012, two Environment Department managers who have since left asked Olson if he'd like to consult on a rule to prevent further pollution. Olson agreed, and spent nine months leading an advisory group of agency staffers, copper industry reps, environmentalists and concerned citizens through the regulatory weeds as they hashed out a draft.

Since 1978, New Mexico's Water Quality Act has taken the long view, saying that all groundwater must meet state standards, unless a polluter can prove it doesn't have a use, such as drinking water or irrigation, now or in the future. That doesn't mean the aquifer under the copper mines is pristine. Some past pollution controls have failed, and mines can ask for case-by-case exemptions when contamination seems unavoidable. To get such "variances," companies must make public requests before the Water Quality Commission. The commission has never denied a variance if doing so would have shut down a mine, says Olson.

But Freeport McMoRan objects to the process' uncertainty. Variances, which in some cases mines couldn't operate without, must be renewed every five years. On top of that, the state never provided specific guidance on the measures mines must take to comply with the Water Quality Act, making negotiations with regulators endlessly frustrating, with permitting sometimes dragging on for years. "The resulting uncertainty makes investment in New Mexico relatively risky," testified Freeport McMoRan's vice president of New Mexico operations, John Brack. "We ask the commission to take the politics out of the process and create a system that is based on a practical approach to mining."

Last August, after more than 20 meetings, Olson and water-quality advocates -- including Silver City's Gila Resources Information Project and northern New Mexico's Amigos Bravos -- thought the rule was more than a good start to protecting water and satisfying the mines' need for predictability. It retained variances, and spelled out the specific anti-pollution steps mines would have to take, like placing synthetic liners beneath waste-rock piles and tailings impoundments.

As Olson wrapped up the proposed rule to send to upper management, Freeport McMoRan submitted comments that scrapped variances altogether, removed most liner requirements, and even allowed groundwater pollution, as long as it was captured and treated before migrating beyond a certain boundary -- a technique that's failed before. Olson didn't incorporate those suggestions, and he and a technical staffer explained why in a memo: They violated the Water Quality Act. He then sent the rule off to two top managers at the time, David Martin, and Jim Davis, plus the department's general counsel, Ryan Flynn. The managers directed Olson to make the changes suggested by Freeport McMoRan.

When the department released its rule to the public three days later, the environmental groups were floored: It gave the mines concessions that the Environment Department and Water Quality Commission had denied for years. And the changes corresponded almost word-for-word with Freeport McMoRan's suggestions.

Ryan Flynn, who has since been appointed Environment Department secretary, defends the new rule's legality. If the law indeed required all groundwater to be protected for future use, a mine could never be permitted without a variance.  (Opponents don't dispute that this would be true for new open pit mines.) Some pollution is inevitable, he says, despite the best controls. Flynn also argues that variances discourage investors, and that the copper rule is consistent with the department's past practices of issuing permits without requiring all groundwater to meet state standards. "Our rule is not a rollback," Flynn insists.

Olson, who signed many of those permits, says that's simply not true. Copper mines have been granted only two variances, both for leach piles in areas that are already polluted. And rather than shutting down operations, the department has renewed permits for mines with failing pollution controls, he concedes. But even so, if a mine wanted to expand, it would not receive new permits explicitly allowing pollution in an unsullied area. The new copper rule would allow that, trusting the mines to clean it up later.

Such an approach to groundwater protection is contrary to the philosophy that has guided Olson's career: that preventing pollution in the first place is both safer and cheaper in the long run. He couldn't testify in favor of the rule, and so he ended his contract, unsure what else to do.

Then, in November -- "for cheap entertainment" -- he began reading documents posted online prior to the hearing. The state attorney general was asking the department to send the rule back to the commission for violating the Water Quality Act, and the department's response claimed that the rule codified past practices. Olson worried that the commission wasn't getting accurate information, and because 10 of the 14 members were new, they might not know the difference. Of those members, four are citizens appointed by the governor, and state agencies choose the rest from their ranks. Past commissions have been weighted with technical experts, like a Game and Fish biologist, a health department epidemiologist, and a hydrologist from the state engineer's office. But under Martinez, political appointees have displaced scientists and engineers.

Plus, for the first time in Olson's memory, not a single member of the state's technical staff -- the people who typically provide scientific justification for new rules -- would testify at the hearing. That was the final straw: He decided to challenge his former employer.

Flynn argues that his agency was not silencing its staff. Rather, it was freeing them to process backlogged permits, and from having to contradict their testimonies from past hearings, now that the state's position has changed. It now interprets water quality protection to include permitting pollution, as long as it's eventually cleaned up. "There is nothing in the Water Quality Act that prohibits what we're proposing," Flynn says.

But the rule's opponents fear it will undermine the principle the Water Quality Act is built on, setting a potentially dangerous precedent. If the copper industry doesn't have to protect its groundwater, why should dairies, uranium mines, or any of the state's 1,000 permit holders? "You're allowing pollution," Olson says. "Why can't other industries do the same thing? It opens the whole floodgate."

During opening statements this spring, an Environment Department lawyer told the water quality commissioners: "Let me be clear. This is what I'm asking you to do: Adopt the rule exactly as proposed."

In September, the commission obliged. They changed only two typos in the 42-page document, and their deliberation was the shortest observers recall for a complex rule. Doug Bland, a geologist with the New Mexico Bureau of Geology, was the only commissioner to urge scrutiny of the rule -- and the lone vote against it.

The New Mexico Environmental Law Center and Democratic Attorney General Gary King plan to appeal. Olson didn't expect the commission to buck the Environment Department. But if the appeal fails, he says, the consequences for New Mexico's water could be huge. Already there are signs that other industries could use the copper rule to seek their own concessions. Just before voting on the copper rule, the commission agreed to consider new industry requests to amend the dairy rule. The amendments could weaken the rule's most significant requirements for monitoring wells and manure lagoon liners. "It's sad," Olson laments. "(Groundwater is) a public resource, and it's almost like we're donating it to the mine as a waste dump."

This story was funded in part by a grant from the McCune Charitable Foundation.

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