By Jonathan Stempel
NEW YORK, Jan 18 (Reuters) - A divided U.S. appeals court on Wednesday revived an Environmental Protection Agency rule permitting government agencies to transfer water between different bodies, such as rivers and lakes, without needing to safeguard for pollution.
Reversing a lower court ruling in the widely followed case, a 2-1 panel of the 2nd U.S. Circuit Court of Appeals in New York said the EPA acted reasonably in 2008 in adopting its "Water Transfers" rule, over the objections of environmental groups.
At issue was whether New York City needed a permit to draw water from the upstate Schoharie Reservoir, through an 18-mile tunnel discharging sediment-laden water into the Esopus Creek popular with trout fishers, and later to the city's faucets to provide its millions of residents with drinking water.
The EPA said its rule exempting the city from needing a Clean Water Act permit for such transfers reflected Congressional intent.
Writing for Wednesday's majority, Circuit Judge Robert Sack said federal courts should not second-guess the EPA view that the rule properly balanced the need to improve water quality with the potentially high costs of permits.
"While we might prefer an interpretation more consistent with what appear to us to be the most prominent goals of the Clean Water Act," Sack wrote, "so long as the agencys statutory interpretation is reasonable, what we might prefer is irrelevant."
The 85-page decision reversed a March 2014 ruling by U.S. District Judge Kenneth Karas in White Plains, New York.
Circuit Judge Denny Chin dissented. He called the EPA's position "unreasonable, arbitrary and capricious," and said Congress "did not intend to give a pass to interbasin transfers of dirty water."
New York, eight other U.S. states, the Canadian province of Manitoba, and environmental groups such as the National Wildlife Federation opposed the EPA rule. California, 11 other Midwestern and Western states, and New York City supported it.
Also supporting the rule was the South Florida Water Management District, which oversees an area where polluted water has been pumped from canals into Lake Okeechobee.
A lawyer for the environmental groups was not immediately available for comment. A spokesman for New York Attorney General Eric Schneiderman declined to comment.
The EPA, the New York City Law Department, and the South Florida district had no immediate comment.