EPA Curbs State Review of Energy Projects

The Trump administration on June 1 moved to limit the ability of individual states to use provisions of the Clean Water Act (CWA) to block energy projects, a potential win for the power generation and other energy industry sectors that have battled lengthy licensing and permitting reviews and rejections based on climate change arguments.

The rulemaking is a setback for those who oppose the siting of oil and natural gas transportation pipelines, and power generation projects such as coal- and natural gas-fired power plants, and hydroelectric dams, the permitting of which has been among the biggest legal and political battlegrounds in recent years.  

Environmental Protection Agency (EPA) Administrator Andrew Wheeler on Monday signed a rule that restricts the scope of state reviews under Section 401 of the Clean Water Act. Wheeler defended the action in a call Monday with media, saying the EPA wants “to make sure we are limiting the 401 process just to water quality,” noting the rule excludes limits on state reviews of climate and air pollution impacts. “States may very well have other avenues through the permitting process for their other concerns on a project.”

Wheeler said, “we have seen too many times, particularly in recent years, particularly in the Northwest and New York, the misuse and abuse of 401 authority for water quality when the cited reason has nothing to do with water quality. Today’s action will end this abuse of the Clean Water Act.”

One-Year Deadline

The new rule restricts the scope of state reviews and places a one-year deadline for states to take final actions on a permit request under the CWA. The EPA has worked on the final rule for several months in order to support an executive order signed last year by President Trump.

EPA proposed the rule in August following directions from Trump’s “Promoting Energy Infrastructure and Economic Growth” executive order. Said Wheeler: “The president is very happy about this and will be happy as this goes forward.”

Today’s action was met with broad support from both House and Senate Republicans, but was decried and criticized by environmental groups. The environmentalists say the new rule amounts to a rollback of critical water quality protections, and say it limits the time that states and tribal agencies need to review the often-complicated permits.

Wheeler said the one-year period is “more than enough time” for groups to study and make decisions about projects.

Senate Environment and Public Works Chairman John Barrasso, a Wyoming Republican, singled out Washington as an example of a state that has abused the CWA. Barrasso said Washington state has “hijacked” the permitting process and blocked Wyoming coal from being exported.

“It’s an important step in the right direction to help Wyoming coal and other energy markets,” he said.

North Dakota Republican Sen. Kevin Cramer, who in November 2019 introduced legislation that would codify that rule’s prescriptions, in a news release Monday said, “Just as we expect the federal government to stay within the confines of the law, states must do the same.” Cramer said Washington and New York have used the Clean Water Act “as an excuse to disrupt interstate commerce and weaken energy producing states to try to score cheap political points.”

Immediate Legal Challenge

Monday’s action means the EPA will be able to review state and tribal certifications to ensure they comply with the requirements of Section 401 of the Clean Water Act. Any state or local permitting issue, if based on anything other than water quality, will be considered outside the scope of Section 401. The EPA has said those actions could be set aside and treated as a waiver, and would be left for courts to decide its validity.

California immediately signaled it may take legal action against the new rule. “Why the Trump Administration risks our public health and environment by curbing our ability to protect clean water is a real head-scratcher, particularly as we confront a harrowing pandemic,” California Attorney General Xavier Becerra said in a statement. “The Administration’s move today is just the latest assault on the Clean Water Act and our state’s natural resources. We won’t stand idly by as they rip away our authority under the law to preserve water.”

Another state considered likely to challenge today’s action is New York. Wheeler on the call with media chastised New York Gov. Andrew Cuomo for his failure to support the Constitution natural gas pipeline, a proposed 124-mile, $1-billion project that was designed to connect natural gas production in Pennsylvania to markets in the Northeast, with a capacity to transport 650 million cubic feet per day (MMcf/d) of natural gas. The 30-inch pipeline would have extended from Susquehanna County, Pennsylvania, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, New York. Williams, a natural gas infrastructure company, and its partners—Duke Energy, Cabot Oil & Gas, and AltaGas—abandoned the project in February after an eight-year regulatory fight, in which the New York Department of Environmental Conservation (NYDEC) denied the project a water quality permit in 2016.

The project in August 2019 appeared to be moving forward after the Federal Energy Regulatory Commission (FERC) issued an order concluding the NYDEC had waived its authority under the Clean Water Act to issue or deny a water quality certification for the pipeline. Cuomo at the time said the FERC decision was “disrespectful of states’ rights” and criticized the Trump administration for overstepping its bounds, and legal battles against the pipeline continued.  

Wheeler said denial of the water quality permit in the Constitution case “was done under the auspices of climate change. You won’t be able to use 401 in the future going forward citing climate change as the reason; it would have to be a water quality reason.”

The Constitution pipeline would have moved gas from the Marcellus Shale in Pennsylvania to markets in the U.S. Northeast. Source: Constitution Pipeline Co.

On May 15, Cuomo rejected the New York segment of the Northeast Supply Enhancement (NESE) project, a natural gas pipeline that also would have moved gas from Pennsylvania to the Northeast. Cuomo’s action came a day before the New Jersey Department of Environmental Protection rejected all permits associated with the project. In each case, the states denied issuance of a Section 401 water quality certificate.

Jeff Tittel, director of the New Jersey Sierra Club, in a statement following the state’s rejection of the NESE project, said “This a big win for climate change and a big blow for the battle against fracking. Since New York also denied it, this is a one-two punch against this project and may be a knockout.”

Wheeler has argued the Northeast pipelines make New England states more dependent on imported natural gas, which he said has a larger carbon footprint than U.S.-produced gas. He called Cuomo’s rejection of the Constitution pipeline “probably the worst environmental decision by an elected official last year.”

‘Dramatically’ Limits Scope of Review

Jim Murphy, director of legal advocacy for the National Wildlife Federation, in a statement May 29 said Section 401 of the Clean Water Act gives states and tribes the right to certify that a federally licensed or permitted project meets state water quality standards. He said the new rule allows federal agencies to overturn state decisions, and will “dramatically” limit the scope of reviews that tribes and states can conduct.

“This latest rule undercuts states’ and tribes’ abilities to protect their communities from harmful projects—such as dams, pipelines and mines—that can harm rivers, streams and drinking water. This rollback is in direct conflict with the Clean Water Act and is the latest action in a larger effort to strip away our nation’s long-standing clean water protections.”

The American Petroleum Institute (API) in an email to POWER on Monday said it supports both the Clean Water Act and the new rule. The group has said states have exceeded their authority under the CWA to block energy projects.

“API believes this rule will provide a rigorous, consistent and transparent process for water quality certifications for energy developers and manufacturers, while ensuring that the public plays an important role in the regulatory process,” API Vice President for Midstream and Industry Operations Robin Rorick said in the email. “We support the Clean Water Act, and though certain states have continued to go well beyond its scope for water quality certifications, we hope the addition of a well-defined timeline and review process will provide certainty to operators as they develop infrastructure projects that meet state water quality standards.”

Thomas Pyle, president of the American Energy Alliance, in a statement shared with POWER said, “President Trump and EPA Administrator Andrew Wheeler were left with no choice but to respond to the blatant misuse of the Clean Water Act by New York Governor Andrew Cuomo and others. Activist judges and environmental extremists continue to misuse the legal system to prevent the safe and responsible production and transportation of America’s energy. Today’s announcement will limit at least one of the weapons being used to abuse our legal system.”

Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).

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