Why EPA’s Clean Water Act Section 401 Guidance Will Have No Practical Impact on Pipeline Projects
The U.S. Environmental Protection Agency (EPA) recently announced the rollout of its new Clean Water Act Section 401 Guidance for Federal Agencies, States and Authorized Tribes which replaces an April 2010 Interim Guidance and follows President Trump's April 10, 2019, Executive Order 13868 entitled Promoting Energy Infrastructure and Economic Growth. Press reports and legal commentators immediately jumped to the conclusion that this new EPA guidance was somehow going to stop (or otherwise impede) states from denying water quality certifications under the Clean Water Act for pipeline projects. There are a number of reasons why that is unlikely, some of which have been mentioned. Specifically, the new guidance is, well just that, guidance with no binding effect.
More importantly, however, EPA is not the primary permitting agency for most pipeline projects and lacks regulatory authority to revise the water quality certification process for such projects. That distinction belongs to the Federal Energy Regulatory Commission (FERC) which authorizes most natural gas pipelines through its certificate process and to the Army Corps of Engineers (Corps) which issues Section 404 permits under the Clean Water Act. Both of those federal agencies have their own regulatory procedures for ensuring compliance with Section 401 of the Clean Water Act which requires that any "applicant for a Federal license or permit to conduct any activity including, but not limited to, the construction or operation of facilities, which may result in any discharge into the navigable waters, shall provide the licensing or permitting agency a certification from the State in which the discharge originates or will originate, …." Specifically, FERC regulations state: a "certifying agency is deemed to have waived the certification requirements of section 401(a)(1) of the Clean Water Act if the certifying agency has not denied or granted certification by one year after the date the certifying agency received a written request for certification." Similarly, the Corps regulations state: a "certifying agency is deemed to have waived the certification requirements of section 401(a)(1) of the Clean Water Act if the certifying agency has not denied or granted certification by one year after the date the certifying agency received a written request for certification." While neither set of regulations detail when the one year period begins to run, both agencies have historically required an administratively complete application which provides sufficient information about the potential clean water impacts and that is unlikely to change notwithstanding the new guidance.
Moreover, EPA's reliance on a 2019 case involving relicensing of a hydropower project to argue that the one-year statutory time period is immutable and runs from date of the applicant's request irrespective of the circumstances belies the complex reality of pipeline permitting projects. That case involved a coordinated effort by both the state certifying agency and the applicant to indefinitely delay the proceedings to the detriment of other stakeholders. Most pipeline project applicants will not agree to delay proceedings indefinitely, even when they agree to a reasonable extension of time for the state agency to complete its review. In any event, state agencies can, and will, deny the required water quality certification if the pipeline project applicant, FERC or the Corps have not provided the information necessary to make the determination and all the new guidance does is put those agencies on high alert to watch the clock diligently.