Elephant Butte Irrigation Dist. v. N.M. Water Quality Control Comm'n

516 P.3d 231

ELEPHANT BUTTE IRRIGATION DISTRICT, Petitioner-Appellant,

and

Turner Ranch Properties, L.P.; Hillsboro Pitchfork Ranch, LLC; and Gila Resources Information Project, Petitioners-Appellants,

v.NEW MEXICO WATER QUALITY CONTROL COMMISSION, Respondent-Appellee,andNew Mexico Copper Corporation and New Mexico Environment Department, Intervenors-Appellees,

In the Matter of the Application for New Mexico Copper Corporation for a Ground Water Discharge Permit for the Copper Flat Mine, DP-1840, Docketed as GWB 18-06(P).

Nos. A-1-CA-38474

A-1-CA-38478 (consolidated for purpose of opinion)

Court of Appeals of New Mexico.

Filing Date: May 16, 2022

Certiorari Denied, August 18, 2022, No. S-1-SC-39428

Barncastle Law Firm, Samantha R. Barncastle, Las Cruces, NM, for Appellant Elephant Butte Irrigation District

New Mexico Environmental Law Center, Charles de Saillan, Santa Fe, NM, for Appellants Turner Ranch Properties, L.P., Hillsboro Pitchfork Ranch, LLC, and Gila Resources Information Project

Hector H. Balderas, Attorney General, Robert F. Sánchez, Assistant Attorney General, Santa Fe, NM, for Appellee New Mexico Water Quality Control Commission

Modrall, Sperling, Roehl, Harris & Sisk, P.A., Stuart R. Butzier, Christina C. Sheehan, Albuquerque, NM, for Appellee New Mexico Copper Corporation

Andrew P. Knight, Special Assistant Attorney General, Albuquerque, NM, for Appellee New Mexico Environment Department

HANISEE, Chief Judge.

{1} These appeals arise from an order of the New Mexico Water Quality Control Commission (the Commission) upholding the grant of New Mexico Copper Corporation's (N.M. Copper) application for a discharge permit for the Copper Flat Mine (the Mine) in Sierra County, New Mexico issued by the New Mexico Environment Department (the Department) under the New Mexico Water Quality Act (the Act), NMSA 1978, §§ 74-6-1 to -17 (1967, as amended through 2019), and its implementing regulations, 20.6.2 NMAC and 20.6.7 NMAC.¹ Determining that, in upholding the grant of the discharge permit (DP-1840), the Commission did not act arbitrarily, capriciously, or otherwise not in accordance with the law, we affirm.

BACKGROUND

A. The New Mexico Water Quality Act

{2} Before turning to the facts at hand, we first provide a brief overview of the statutory framework governing the issues before us. The Act was enacted by the New Mexico Legislature who sought "to abate and prevent water pollution."

Bokum Res. Corp. v. N.M. Water Quality Control Comm'n , 1979-NMSC-090, ¶ 59, 93 N.M. 546, 603 P.2d 285. The Act authorizes the Commission to "adopt water quality standards for surface and ground waters of the state," which must "protect the public health or welfare, enhance the quality of water and serve the purposes of the ... Act." Section 74-6-4(C). The Act provides that, "the [C]ommission may require persons to obtain from a constituent agency designated by the [C]ommission a permit for the discharge of any water contaminant or for the disposal or reuse of septage or sludge." Section 74-6-5(A). The Act further mandates that the constituent agency shall deny any application for a permit if:

(1) the effluent would not meet applicable state or federal effluent regulations, standards of performance or limitations;

(2) any provision of the ... Act would be violated;

(3) the discharge would cause or contribute to water contaminant levels in excess of any state or federal standard.

Section 74-6-5(E).

{3} In 2009, the Act was amended to direct the Commission to adopt regulations particular to specific industries, including the copper mining industry, specifying "the measures to be taken to prevent water pollution and to monitor water quality." Section 74-6-4(K); Gila Res. Info. Project v. N.M. Water Quality Control Comm'n , 2018-NMSC-025, ¶ 3, 417 P.3d 369. The regulations were to be developed by the Department and proposed for adoption by the Commission. Section 74-6-4(K). Pursuant to these regulations, the Department proposed and the Commission adopted the Copper Rule. See Gila Res. Info. Project , 2018-NMSC-025, ¶ 1, 417 P.3d 369 (affirming the Commission's adoption of the Copper Rule). The Copper Rule is a "supplement [to] the general permitting requirements ... to control discharges of water contaminants specific to copper mine facilities." 20.6.7.6 NMAC. The Copper Rule acknowledges that "open pit copper mining leads inevitably to some degree of contaminant discharge" and "operates from the premise that the most effective way to mitigate these inevitable discharges is through containment." Gila Res. Info. Project , 2018-NMSC-025, ¶ 43, 417 P.3d 369. Considering the inevitable discharges associated with open pit copper mining, the Copper Rule specifies that "[d]uring operation of an open pit," the groundwater quality standards set forth by 20.6.2.3103 NMAC "do not apply within the area of open pit hydrologic containment." 20.6.7.24(D) NMAC.

B. DP-1840 and the Relevant Proceedings

{4} We now describe the factual background leading to this appeal. N.M. Copper intends to reopen and operate the Mine, a historic open pit copper mine located approximately five miles northeast of Hillsboro in Sierra County, New Mexico. The Mine sits adjacent to and shares a border with both Hillsboro Ranch Properties and the Ladder Ranch (collectively, the Ranches). Several mining companies have attempted to operate the Mine over the past fifty years. See State ex. rel. Off. of State Eng'r v. Elephant Butte Irrigation Dist. , 2021-NMCA-066, ¶¶ 6-31, 499 P.3d 690 (explaining the complex history of the ownership and operation of the mine). In 2009, N.M. Copper entered into an agreement to purchase the Mine and associated mineral claims, and did so in 2011.

{5} In March 2011, N.M. Copper submitted an application to the Department for a modification of the existing groundwater discharge permit for the Mine. In February 2018, the Department's Groundwater Quality Bureau published a public notice of the Department's proposal to issue DP-1840, stating that the Department would accept public comment on the proposed permit for thirty days, which was extended for an additional sixty days at the request of several parties. The Department held a public hearing on the proposed permit from September 24-28, 2018, at which N.M. Copper, the Department, as well as the Ranches and the Elephant Butte Irrigation District (EBID) (collectively, Appellants) presented the testimony of technical witnesses. As well, forty-eight members of the general public made oral statements. In December 2018, the Administrative Hearing Officer (AHO) issued a report (the AHO Report) alongside proposed findings of fact and conclusions of law, determining that the discharge did not pose an "undue risk to property" and that the open pit water body will not be a water of the state, and therefore is not subject to surface water quality standards. That same month, the Secretary of the Department (the Secretary) issued its order (the NMED Order), in which the Secretary adopted the AHO's Report of proposed findings of fact and conclusions of law and added thirteen additional findings and conclusions. Finally, in September 2019, the Commission adopted its final order (the Final Order), adopting the NMED Order with additional revisions, and granting N.M. Copper's application for DP-1840. DP-1840 authorizes N.M. Copper to discharge a maximum 25,264,000 gallons per day of tailings slurry, including "mine tailings, process water, impacted storm[ ]water, and domestic wastewater to a lined tailing impoundment," known as the Tailings Storage Facility. Additionally, DP-1840 regulates "discharges from other mine units, including waste rock stockpiles, ore stockpiles, mineral processing units, process water impoundments, an open pit, sumps, tanks, pipelines, and other areas within the permit boundary of approximately 2,190 acres."

C. The Final Order

{6} In the Final Order, the Commission concluded that the opposing parties, including EBID and the Ranches, "did not prove that the discharges from DP-1840's permitted mine operations will cause undue risk to [the Ranches’] property." Although the Commission provided only limited insight into its reasoning, through the NMED Order the Secretary explained that "[t]he phrase ‘undue risk to property’ as used in the Copper Rule pertains to potential impacts to water quality from the permitted discharges, not to the depletion of groundwater." Similarly, the Secretary explained that its conclusion that "the discharges from permitted mine operations will not cause undue risk to the property of the Ranches, or [EBID], or anyone else" was based on a totality of expert witness testimony, specifically expert testimony based on "site-specific modeling and analysis, and addressed scientific likelihoods rather than speculation." And while the Final Order issued by the Commission did not articulate specific reasoning as it relates to the proposed pit lake, the Secretary explained, "The future pit lake at Copper Flat will not be a surface water of the state subject to the water quality standards in 20.6.4 NMAC."

DISCUSSION

{7} EBID asserts that in granting N.M. Copper's discharge permit the Commission "ignored its determination that the phrase ‘undue risk to property’ as used in the Copper Rule, 20.6.7 NMAC, may be broader than potential impacts to water quality from the permitted discharges."² The Ranches similarly contend that the Commission failed to adequately explain its conclusion that DP-1840 will not pose an "undue risk to property." Additionally, the Ranches assert that DP-1840 violates the Act, and the Commission did not adequately explain its conclusion that surface water standards will not apply to the pit lake. We first set forth the standard of review, then analyze Appellants’ arguments as they relate to the Commission's interpretation of "undue risk to property," and then turn to the Ranches’ remaining arguments.

I. Standard of Review

{8} The Act provides that we "shall set aside...