EPA Seeks to Limit States', Tribes' Use of Clean Water Act to Stop Projects

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Written by Eric Funderburk for IIR News Intelligence (Sugar Land Texas)

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Summary

The EPA is proposing to narrow the scope that states and indigenous tribes can use Section 401 of the Clean Water Act to justify stopping major infrastructure projects.

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A Narrowing of the Rules

The U.S. Environmental Protection Agency (EPA) on Tuesday proposed a rule change to an element of the Clean Water Act, which was initially signed into law in 1972.

Section 401 of the Clean Water Act gives states and tribes the right "to grant, deny, or waive certification of proposed federal licenses or permits that may discharge into waters of the United States."

The EPA is now seeking to narrow the scope with which Section 401 can be used, asserting that the statute previously has been improperly used to put the brakes on unpopular infrastructure projects such as pipelines.

While the proposal includes a suite of provisions and statutes to tighten Section 401's use, at the heart of the changes is the proposal that, after receiving a standardized list of items relating the project, states and tribes can begin the review process, but in their consideration must only focus on the direct water-quality impacts of a project's discharges, rather than broader water issues created by the project as a whole from site preparation through construction start to commencing operations.

More Back & Forth

In what has become a common feature of U.S. politics, the change in the rule actually represents a revived policy from the first Trump administration, which was then changed under the Biden administration and is now more or less beginning the process of shifting back to the first Trump administration's interpretation of Section 401.

Trump's initial tightening of the rule came in July 2020, which like the current proposed change, limited water-quality consideration only to the point of discharge, rather than the what was caused by the project as a whole. Also, as the recently proposed changes do, the rule tightened timelines, implementing a firm one-year period for making decisions.

Those 2020 changes were overturned in September 2023 under the Biden administration, which restored the broader scope in which states and tribes could consider projects' water impacts, and now those changes are once again being reverted back to the 2020 interpretation.

Tuesday's proposed rule change opened the issue up to a 30-day public comment period, but no Congressional oversight is needed to implement the changes.

The Reason?

At the heart of the justification is the Trump administration's accusation that groups are using Section 401 to stop unpopular projects when, in fact, water issues present no cause for concern. In a press briefing on the proposed change in interpretation, Jess Kramer, an EPA assistant administrator for water, said, "This proposed rule is the next step in ensuring that states and tribes only utilize Section 401 for its statutory purpose to protect water quality and not as a weapon to shut down projects."

Has the Rule Been Weaponized?

Whether the rule has in fact been weaponized in the past is largely a matter of opinion. Recent projects that have been thwarted by states' use of Section 401 include former New York Governor Mario Cuomo's use of Section 401 to deny a permit for National Fuel Gas Company's (Williamsville, New York) Northern Access Pipeline, a proposed 99-mile pipeline that would have moved gas from gas from Pennsylvania to New York.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Pipeline Project Database can learn more by viewing the related reports on the cancelled projects.

New York also used Section 401 to block construction of Williams Companies' (Tulsa, Oklahoma) Constitution Pipeline and Northeast Supply Enhancement (NESE) project, both of which would bring Pennsylvania gas into New York. Both of those projects are now back on the drawing board after current New York Governor Kathy Hochul (D) appeared to reopen the projects in order to allow other energy projects to proceed, in particular the Empire Wind 1 offshore wind project, to proceed. This tit-for-tat action has not been confirmed by either Hochul although Trump administration officials at one point suggested that some sort of deal regarding the projects had been made. The Empire Wind 1 project is once again under a stop-work order issued by the Trump administration, and yesterday marked the first, and perhaps sole, day that developer Equinor (Stavanger, Norway) argued in court to allow the project to resume.

Subscriber to Industrial Info's GMI Pipelines Project Database can learn more by viewing the reports on the Constitution and NESE projects, while Power subscribers can click here to see the Empire Wind 1 project report.

Other Affected Projects

While this week's proposed changes have so far led to no specific mention of project revivals, at least one aspect of the coal sector, a section of the economy supported both in policies and economics by the Trump administration, could see some new projects unfolding. Those projects? Coal shipping terminals.

Section 401 was used by the state of Washington in 2017 to stop a proposed coal shipping terminal on the Columbia River due to the project's impact on that body of water. This led to coal-producing states Montana and Wyoming challenging Washington's denial of the permit. That case trickled up to the Supreme Court, which dismissed the motion in June 2021, declining to take up the case and leaving Washington's denial of the project in place. Subscribers to Industrial Info's GMI Project Database can learn more by viewing the related project reports.

While there is no suggestion that this project is on the table to be revived, it provides an example of how a state used the Clean Water Act's Section 401 to deny permission for a project. Under the newly tightened rules, Washington may not have been allowed to deny permission to the project due to water-quality purposes and that particular route to stopping it would not have been an option.

With the predominately exported metallurgical coal now classified as a "critical mineral" and its production supported by increased tax credits, additional export facilities would seem to be in keeping with current policies.

Whether other projects are dusted off under a newly tightened Section 401 remains to be seen, as does how long this particular interpretation of the rule remains in place--is it here to stay or simply destined to change once again when a new administration enters the White House?

Key Takeaways

• The EPA has proposed changes to Section 401 of the Clean Water Act, which has previously allowed states and tribes to cancel projects for issues involving water quality.
• The proposed change has entered a 30-day comment period and does not require Congressoinal oversight to be implemented.
• Previous projects canceled by states using the Clean Water Act's Section 401 include multiple natural gas pipeline projects in the northeastern U.S. and a coal export terminal in Washington state.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).