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Army Corps finalizes nationwide permit program but Biden could undo rule updates

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Army Corps finalizes nationwide permit program but Biden could undo rule updates

The Trump administration's U.S. Army Corps of Engineers finished updates to the nationwide permit program that streamlines federal authorizations for water crossings on construction projects, which has been at the center of legal challenges to oil and gas pipelines. But the rule may be ripe for change under the incoming Biden administration, one energy consulting firm noted.

In a final rule that was announced late on Jan. 5 but will not take effect for at least 60 days, the Army Corps reissued and modified 12 existing nationwide permits, or NWPs, and issued four new NWPs. The agency also reissued and modified general conditions and definitions in these 16 permits. The Corps will not reissue or modify the remaining 40 existing NWPs, which remain in effect under a January 2017 final rule, or finalize a particular proposed new permit.

The NWP program allows project developers to gain a broad authorization for water crossings and other activities under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act of 1899.

'Midnight rules'

Energy policy advisory firm ClearView Energy Partners LLC said in a Jan. 6 alert to its clients that the NWP program is technical and the firm was proceeding with a thorough review of the final rule, but it did say the Corps program is one of the last-minute "midnight rules" that could be changed by the Biden administration that takes over Jan. 20.

"Our first initial takeaway is that the new NWP revisions are not scheduled to become final for 60 days after their publication in the Federal Register, providing the incoming Biden administration with options to suspend it, and potentially incorporate the revisions into the normally scheduled reauthorization process later this year," ClearView said. "The Trump administration may prioritize the rule's publication in the Federal Register prior to the inauguration, but we think there is a strong likelihood that this January 5 version of the NWP may never go into effect."

ClearView also said the Trump administration's action could have consequences for pipeline developers. "Our second initial takeaway is that the Trump administration's decision to move forward with differentiating between different types of linear utility infrastructure increases the potential we already saw looming for the incoming Biden administration to take a step that the Obama Administration declined to take — removing oil and natural gas pipelines from the NWP program altogether," ClearView said. "Without access to the NWP program, oil and natural gas pipelines would be limited to the 'individual permit' approach that otherwise is available under [Clean Water Act Section 404] and requires the more robust National Environmental Policy Act review (although generally limited to the relevant waterbody crossings only, not the entire project)."

Vulnerable permit

In the last few years, pipeline projects have faced legal challenges under the Clean Water Act and other statutes, and they could face more federal scrutiny under the Biden administration. The U.S. Court of Appeals for the 4th Circuit said in a December 2020 opinion that it was likely to find that the Army Corps of Engineers had inappropriately incorporated a West Virginia provision into an NWP for the Mountain Valley Pipeline LLC, which might force the developer to find other permitting options.

In July 2020, the U.S. Supreme Court reinstalled the NWP program that a lower court had invalidated for all U.S. oil and gas pipelines in a case involving TC Energy Corp.'s Keystone XL oil pipeline project, but the high court kept Keystone XL from using the program. A federal district court had invalidated the program after agreeing with the Northern Plains Resource Council and other conservation and landowner groups that the Army Corps had violated the Endangered Species Act.

Dominion Energy Inc. and Duke Energy Corp. pointed to the legal uncertainty over the NWP program caused by the district court's decision as a factor in their decision to cancel in July 2020 the under-construction, 1.5-Bcf/d Atlantic Coast gas pipeline project.