SUSAN MONTOYA BRYAN

Associated Press

ALBUQUERQUE, N.M. (AP) -- New Mexico water regulators on Wednesday adopted a settlement that puts to rest a dispute over millions of tons of dairy industry waste produced each year in the state.

The Water Quality Control Commission voted unanimously during a hearing in Santa Fe in favor of the settlement brokered by state attorneys, dairy farmers and environmentalists.

The dairy rule was first approved by the commission last year in the final month of former Democratic Gov. Bill Richardson's administration. It was meant to protect New Mexico's groundwater from dairy waste, but the state's $2.6 billion industry appealed and months of negotiations ensued.

Dairy owners complained that the costs of implementing the rule would force some dairies out of business. Environmentalists, meanwhile, tried to hold on to the gains made during the year leading up to the rule's approval. The settlement was finally reached in July.

"To be honest, everybody got a piece of what they wanted," said Dan Lorimier of the Sierra Club's Rio Grande chapter. "Now, it's just a matter of getting it implemented because we have been in limbo for way too long now."

Environmentalists had feared the dairy rule would be one of many Richardson-era environmental initiatives that would face a rollback under Republican Gov. Susana Martinez, who has vowed to make New Mexico more business-friendly.

The Environment Department and its legal staff touted the amendments spelled out in the settlement as a way to protect water while allowing dairies flexibility with day-to-day operations.

The approval also clears the way for the department to resume issuing discharge permits to the dozens of dairies that had been awaiting the outcome of the dispute.

"Through no fault of their own, they were operating under expired permits. That's a very, very bad situation. Those permits are our teeth to ensure that we're protecting groundwater," said Ryan Flynn, the department's general counsel.

The settlement spells out aggressive timelines for addressing the permit backlog, he said. The department estimates about 70 percent of New Mexico's dairy facilities have expired discharge permits.

The amended rule still requires dairies to install monitoring wells. It also requires new dairies and those that have had leaking impoundments to install synthetic liners.

Existing dairies where waste reservoirs haven't contaminated groundwater are allowed to operate without installing new impoundments.

There are also increased public notice requirements for new dairies.

Gone from the rule are requirements for certain documentation, such as grading and drainage plans for existing dairies. Changes were also made to allow for more flexibility when it comes to using flow meters to measure the wastewater discharged from milking parlors and wash areas.

The key requirements are the monitoring wells and synthetic liners, said Michael Jensen of Amigos Bravos, a clean water advocacy group.

"Wells and liners get to the heart of the problem, which is that, according to New Mexico Environment Department data, at least two-thirds of dairies in New Mexico have already contaminated groundwater with nitrates, chloride and dissolved solids," he said.

The Environment Department testified during last year's hearing that contamination at some dairies was extensive, with plumes stretching over a mile.

The industry disputed claims of widespread contamination and argued that the rule as initially approved would have curbed the economic impact of the state's dairies.

With more than 7 billion pounds of milk produced each year, New Mexico is among the nation's top 10 states for milk and cheese production.

It was the dairy farmers who first sought more regulatory stability in 2009. Previously, discharge permits were based on site-specific conditions that addressed different types of operations as well as geology and aquifer characteristics.

Walter Bradley, a representative of Dairy Farmers of America and New Mexico's former lieutenant governor, said he was pleased that this part of the process was over.

"While all parties agree that the dairy rules are still a work in progress and future changes may be needed, we look forward to the implementation of the rules and issuance of new permits to New Mexico dairies," he said.

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Follow Susan Montoya Bryan on Twitter: http://www.twitter.com/susanmbryanNM

Copyright 2011 The Associated Press.

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