On August 8th, 2019 the United States Environmental Protection Agency (EPA) proposed a rule to clarify and streamline the way in which state and tribal governments may exercise their authority to weigh in on federally permitted projects that affect local waterways under Clean Water Act (CWA) § 401. States and tribes often use CWA § 401 to delay, or in effect, block pipelines and other energy projects that cross waterways in their jurisdictions, about which they have both water-related and other environmental concerns.
When Congress enacted the CWA in 1972, it reserved to state and tribal governments the power to influence decisions to permit pollutant discharges on their land. Section 401 of the Act requires every applicant for a federal permit or license that “may result in any discharge into navigable waters” to provide the federal permitting agency with a certification from the state or tribal territory in which the discharge will occur that the discharge complies with water quality standards.
Neither CWA § 401 nor subsequent implementing regulations set clear timelines for the state and tribal certification process, which in practice has delayed or even put an end to some proposed projects. Many regulated entities, particularly in the oil, gas and other fossil fuel industries, have complain the process has become unduly burdensome. Allies of the oil and gas industry, for instance, have complained that the “use of the states’ 401 authority has frustrated plans to build and operate LNG pipelines around the country.” Similarly, allies of the coal industry have complained that the CWA 401 process has been “highjacked” to block politically unpopular coal-export facilities.
The Trump Administration signaled its intent to curb these delays in Executive Order 13868, issued on April 10, 2019, which stated that CWA § 401 is “causing confusion and uncertainty and are hindering the development of energy infrastructure,” and called for responsible agencies to make changes in its implementation.
The proposed rule implements this E.O, putting in place procedures that, the EPA says, are designed to increase certainty and impose definitive timelines on CWA § 401 permitting. It proposes to limit the scope of CWA § 401 review, strictly limit the timeframe for completing CWA § 401 certifications, and increase federal oversight, as follows:
The proposed rule limits the scope of CWA § 401 review in three key ways. First, whereas the EPA avers that in the past “certifying authorities have … attempted to address all potential impacts from the operation or subsequent use of products generated by a proposed federally licensed or permitted project,” the proposed rule allows state and tribal governments to only consider water quality impacts. Impacts such as public access to waterways, transportation or effects on air emissions will be considered beyond the scope of CWA § 401 certification. (While states or tribes may still explain why non-water-quality conditions should be considered as a reason for denial of the certification, under the proposed rule the federal authority may ignore the impacts and decide a certification should be issued.) Second, in a reversal of Obama-era regulations, the proposed rule specifies that state and tribal governments may only review projects for impacts from point source discharges, and must ignore non-point source discharges, such as pollution that occurs on a site as the result of rainwater, snow melt, wastewater, pesticide, fertilizer, and soil erosion runoff. Third, “EPA proposes limiting Section 401 certification reviews to assuring that only a discharge from a licensed or permitted activity—rather than the activity as a whole—complies with water quality requirements.”
The proposed rule strictly limits the timeframe for CWA § 401 in two ways: First, it requires state and tribal governments to act on a section 401 certification within a reasonable period of time, which shall not exceed one year and that there is no tolling provision to stop the clock at any time.” This not only puts a strict one-year time limit on the process, but also subjects states and tribal governments to shorter, “reasonable” time limits, at the federal permitting agency’s discretion. Second, the proposed rule specifies that the timeline begins upon receipt of the certification request from the company applying for a permit. This certification request must meet certain minimum standards, but states and tribes may no longer toll the timeline by deeming an application that meets those minimum standards incomplete. And after a request has been received, the timeline will not be paused or delayed for any reason.
If a certifying authority does not act upon a request within the year or lesser, “reasonable,” time period then the “certification requirement will be waived by the federal licensing and permitting agencies.” While EPA acknowledges that meeting the timeline could be a challenge, it recommends only that that federal permitting agencies and tribes maintain clear and open channels of communication…to ensure waiver does not occur inadvertently.”
Finally, the proposed rule provides for a federal override, in which federal agencies may supersede a state’s or tribe’s decision to approve, reject, or set conditions on a permit. And it states that the federal permitting agency is solely responsible for determining which water quality conditions apply.
Organizations representing fossil fuel and natural gas companies, such as the American Gas Association, American Petroleum Institute, and the Interstate Natural Gas Association of America, have all released statements in support of the proposed rule. After EO 13868 was released, for example, the American Gas Association stated that the proposed rule (as envisioned by the Executive Order) would “clear the way for development of new natural gas pipelines, enabling greater access to natural gas thereby benefitting American families and our environment.” These organizations have expressed support on the basis that a more well defined timeline and review process will fast track and simplify the project approval process.
Opponents of the proposed rule include environmental organizations such as the League of Conservation of Voters, American Fisheries Society, and Clean Water Action. The League of Conservation of Voters has expressed concern that the proposed rule will undermine the ability of states and tribes to use CWA § 401 to protect the waters their communities depend on for drinking, recreation, and fueling healthy local economies. These criticisms echo a warning contained in a 2015 Congressional Research Service report on CWA § 401, which stated that clarifying the scope of CWA § 401 review might lead to “an overly narrow reading of section 401 would deprive the States of the ability to maintain the very beneficial uses that the Clean Water Act was designed to protect. Federal agencies could permit activities that would undermine a State’s investment in pollution control efforts and impose a double standard for different activities affecting the same in-stream values.”
The EPA public comment period for the proposed rule closed on October 21st, 2019.