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EPA issues proposed rule to limit states' ability to slow pipeline projects

Highlights

Federal agency would set timelines for environmental approvals

Proposal responds to Trump's executive order

Houston — The Environmental Protection Agency on Friday issued a proposed rule designed to expedite the regulatory process for oil and gas pipeline projects by limiting the ability of states and Indian tribes to stretch out the timelines for environmental reviews.

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The proposal, which seeks to "modernize and clarify the timeline" for states and tribes to review proposed projects under Section 401 of the Clean Water Act, is in response to an executive order President Donald Trump issued in April to expedite the approval of interstate pipelines and other energy infrastructure projects. Trump and his administration have singled out the state of New York for what they claim is the improper use of the environmental review process to block natural gas pipeline projects such as Williams' Constitution Pipeline.

"Our proposal is intended to help ensure that states adhere to the statutory language and intent of the Clean Water Act," EPA Administrator Andrew Wheeler said in a statement.

REINING IN SCHEDULES

Section 401 says that states and tribes must respond to a certification request "within a reasonable period of time, which does not exceed one year." According to the proposed rule, this language does not guarantee states and tribes a full year to act. Instead it would be up to the federal agency to set "a reasonable period of time." Their determination would be based on several factors, including the complexity of the proposed project; the potential for any discharge; and the potential need for additional study or evaluation of water quality effects from the discharge.

In cases where certification is denied, EPA would require written notification from the state detailing the specific ways in which the proposed project did not comply with water quality requirements and the project modifications "that would be needed for the certifying authority to determine that the discharge will comply with water quality requirements."

FOCUS ON 'POINT SOURCES'

Thaddeus Lightfoot, a partner at Dorsey & Whitney, said perhaps the most significant change is that the proposed rule would eliminate the need for Section 401 certification for "activities" such as nonpoint source discharges, diverging from past EPA interpretation and one Supreme Court finding. That could head off consideration of erosion and sedimentation, environmentalists warned.

Among other restrictions, the scope of state reviews would be more narrowly confined to water quality matters; states could not ask companies to withdraw permits to extend the review periods; and there would be limits on added information requests to applicants.

Groups representing the pipeline industry and other infrastructure industries cheered the proposed rule, while environmental groups contended it would take away from states their ability to protect their water resources.

Don Santa, CEO of the Interstate Natural Gas Association of America, said the proposal clarifies the respective roles of the state and federal governments in regard to Section 401.

"The balance between those roles has recently been disrupted and some states have viewed Section 401 as a means of determining which interstate pipeline projects are in the public interest and which are not," he said in a statement.

"With today's proposed rule, [EPA] took meaningful steps to provide consistency and predictability to the permitting process for energy infrastructure," Scott Segal, director of the Electric Reliability Coordinating Council, said in a statement.

The Sierra Club said the rule "would severely limit the time and tools available to states to properly evaluate the effect federally permitted projects, like pipelines or fossil fuel facilities, would have on waterways." The rule also would limit states' review of water quality impacts to point-source discharges, rather than all potential sources of pollution, such as from sediment, runoff or erosion, the Sierra Club said.

Interested parties will have 60 days to comment on the proposal, which was published Friday in the Federal Register.

-- Jim Magill, jim.magill@spglobal.com

-- Edited by Jasmin Melvin, newsdesk@spglobal.com

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