State Innovation Grant Program:  Wyoming
                      Watershed Based WYPDES Permitting for the Powder River Basin
                      (2004 Competition)
                        ie innovation urani rrogram 10 support
efforts led by state environmental agencies to test innovative approaches
for achieving better environmental results and improved efficiency in
permitting programs. Between 2002 and 2007, the State Innovation Grant
program competition awarded over six million dollars to support 35 state
projects that test permitting innovation for a variety of regulated entities
including several small business sectors. Asummary of the awards by year
appears in the table below.
    State Innovation Grant Program Statistics, 2002-2007
Competition   Proposals  Proposals    Total Program
    Year      Submitted  Selected       Funding ($)
  2002/2003
                                         $618,000
                                       $1.425 Million
                                       $1.479 Million
 Cumulative
                                        $1.243 Million
                                        $1.611 Million
                                       $6.376 Million
"Innovation in Permitting" has been the theme of the State Innovation Grant
competition since its inception. In the last three competition cycles states
received awards for projects in the following three categories:
 The Environmental Results Program (ERP) is an innovative
  approach to improving environmental performance based on a system
  of the interlocking tools of compliance assistance, self-certification
  (sometimes, where permissible, in lieu of permitting), and
  statistically-based measurement to gauge the performance of an entire
  business sector. The program utilizes a multimedia approach to
  encourage small sources to achieve environmental compliance and
  pollution prevention. (See: http://www.epa.gov/permits/erp/)
 Environmental Management System (EMS) is a system involving a
  continual cycle of planning, implementing, reviewing and improving the
  processes and actions that an organization undertakes to meet its
  business and environmental goals. EMSs provide organizations of all
  types with a structured system and approach for managing
  environmental and regulatory responsibilities to improve overall
  environmental performance and stewardship.
  (See: www.epa.gov/ems/info/index.htm)
 Performance Track is a partnership that recognizes top
  environmental performance among participating US facilities of all types,
  sizes, and complexity, both public and private.
  (See: http://www.epa.gov/performancetrack/)
NCEI has provided awards also for projects testing watershed-based
permitting, and for permit process streamlining in past competitions. For
more information on the history of the programs, including information on
solicitations, state proposals, and project awards, please see the EPA State
                      ittD://www.eDa.aov/innovation/statear
Project  Background:
 The Powder River Basin (PRB) covers roughly 9,000
 square miles in Wyoming and is home to a range of
 industrial activities including coal mining, oil and gas
 treatment,  and coal  bed methane development.
 Historically, the Wyoming Department of
 Environmental Quality (WDEQ)  issued individual
 Wyoming Pollutant Discharge Elimination System
 (WYPDES) permits for discharges into the PRB for
 each industrial point source.  However, recognizing
 the significant potential for water quality impacts from
 the combined discharges of these industrial sources,
 WDEQ decided to fortify its WYPDES permitting
 process by creating watershed-based permitting
 tools to better protect water quality within the Powder
 River Basin.

 A watershed-based permit differs from traditional
 permitting  programs by making a cumulative
 assessment of the potential impacts to water quality
 in a basin, incorporating all sources of a pollutant of
 concern into a single permit. Although there are a
 range of industrial point sources in the PRB, WDEQ's
 watershed-based permitting project is focusing
 specifically on effluent from coal bed methane
 recovery operations.  WDEQ's  watershed-based
 permits are designed to address pollutant loadings
 by introducing effluent limitations, as well as
 allocating pollutant loads across the hundreds of coal
 bed methane recovery sources in the Powder River
 Basin within Wyoming. This pilot project is being
 launched with the help of funding from EPAs State
 Innovation Grant Program.

Project  Description
 WDEQ's watershed-based permitting  project is
 designed not only to achieve results in protecting
 water quality in Wyoming, but also to address
 emerging concerns over the quality of water in the
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                         NATIONAL CENTER FOR
                         ENVIRONMENTAL INNOVATION

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 Powder River as it crosses the border into Montana.
 Other project goals include:

       Establishing targets for water pollutant
       concentrations and loading for the project area
       based on the water quality targets for surface
       waters that are deemed  necessary to support
       existing uses;

       Developing and implementing an efficient
       permitting approach that incorporates the
       collective impacts to water quality throughout the
       watershed;

       Streamlining the WYPDES permit application
       process and strengthening the WYPDES
       regulatory mechanism to achieve compliance
       with established water quality standards; and

       Developing a template for watershed-based
       WYPDES permitting that is potentially
       transferable to other watersheds in Wyoming and
       other states with similar permitting issues and
       watersheds.
 and conducting watershed-based WYPDES permitting
 stakeholder meetings.  Building on these efforts,
 WDEQ has finalized waste load allocations within the
 Powder River Basin, and implemented several
 watershed permits.  Upon completing their pilot
 project, WDEQ  plans to produce a final report to help
 transfer this approach to more watersheds and states.

Connection to  EPA's Goals:

 WDEQ's  project directly supports EPA's Strategic Goal
 #5, focused on  compliance and  environmental
 stewardship, by promoting an innovative approach to
 improve compliance and pollution prevention.  The
 project also supports EPA's Goal #3 to provide clean
 and safe  water,  as well as the Cross-Goal Strategy of
 promoting innovation and collaboration with states.
Project success will be measured through a number of
indicators including:

       Improvement in water quality, allowing discharge
       drainages to maintain their designated uses;

       Reduction in an applicant's permitting cost by
       eliminating site-specific permits once a
       watershed-based permit is in place;

       Reduction in  permit application processing
       times; and

       Reduction in WDEQ operational costs from
       reducing the personnel hours needed to
       process permit applications.

 To date, WDEQ has achieved several key project
 milestones, including sponsoring the initial  stakeholder
 committee meetings for targeted areas of the Basin

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 Project Contacts:

  For more specific information on the
  Wyoming State Innovation Grant,
  please contact one of the individuals
  below:

  Kathy Shreve
  Wyoming Department of Environmental Quality
  122 West 25th Street, 4W
  Cheyenne, WY 82002
  307.777.6682
  kshrev@state.wy.us
               Program  Contact:
                Sherri Walker
                State Innovation Grant Program
                U.S. Environmental Protection Agency
                Washington, DC 20460 (MC1807T)
                (202)-566-2186; FAX (202) 566-2220
                walker.sherri@epa.gov
  Dale  Murphy
  U.S. Environmental Protection Agency, Regions
  Denver, CO
  303.312.6126
  murphv.dale@epa.gov


  Gerald Filbin
  U.S. Environmental Protection Agency
  National Center for Environmental Innovation
  Washington, DC
  202.566.2182
  filbin.gerald@epa.gov
United States
Environmental Protection
Agency
Office of Policy,
Economics and Innovation
(1807T)
       May 2008
EPA-100-F-08-043

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