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Unions, tribes back Clean Water Act change to boost energy projects as state concerns surface

Highlights

Trade group highlights jobs on hold, 'endless lawsuits'

Bill focuses reviews on water quality, sets 90-day deadline to flag data gaps

Carper says bill would 'severely clip' states' wings

Washington — New legislation to rein in state use of Clean Water Act authorities to block energy projects would restore predictability for natural gas pipeline projects needed to take shale gas to market, affecting thousands of labor jobs, a trade union official told a Senate committee Thursday.

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But Democrats are already pointing to state concerns that such an approach could impair their ability to manage water quality.

A Senate Environment and Public Works Committee hearing Thursday came as industry frustration has mounted over high-profile denials by New York regulators of water quality certifications for interstate natural gas pipelines, including Williams' Constitution Pipeline and National Fuel Gas Supply and Empire Pipeline's Northern Access project.

The panel is considering S.3303, a bill put forward by Committee Chairman John Barrasso, Republican-Wyoming, along with Republicans Shelly Capito of West Virginia, Steve Daines of Montana and James Inhofe of Oklahoma. The legislation would limit reviews under CWA Section 401 to considering water quality impacts and require that state regulators consider only those impacts directly related to the project.

To head off delays, the bill would give states 90 days to tell developers if they have all the information needed to process an application.

'NEEDLESS UNCERTAINTY'

Brent Booker, secretary-treasurer of North America's Building Trade Unions, asserted that Constitution Pipeline presented a modern, affordable solution to gas-system constraints that have created fuel security risks and driven up energy prices in New England. New York's permit denial is delaying about 2,400 direct and indirect jobs from pipeline construction that would have generated $130 million in labor income and economic activity for the region, he said.

"Unfortunately, the Clean Water Act Section 401 permitting process has resulted in needless uncertainty" and can stymy approval for years or halt half-completed construction in its tracks, he said.

He faulted a "stream of endless lawsuits to delay a project because they cannot defeat a project on the merits."

The bill would also affect other energy projects such as hydropower facilities and coal export terminals. Barrasso denounced the state of Washington's denial of certification for the Millennium Bulk Terminal project, which would enable Western US coal exports to Asia.

Environmentalists in some states view Section 401 review as "a tool to block energy projects, not a tool to keep water clean," Barrasso added.

CJ Stewart, a Crow Tribal member and board member of the National Tribal Energy Association, said regulatory roadblocks and political crises force the Crow Tribe to "languish in poverty" with 70% unemployment, despite mineral wealth, such as coal, oil and gas reserves.

STATE CONCERNS

Democrats on the Senate panel were skeptical of the bill's approach. Senator Kirsten Gillibrand, Democrat-New York, said it would "fundamentally alter the role that states have in permitting projects that cross rivers, streams and wetlands."

She highlighted a letter from the Western Governors' Association and nine other state organizations a week earlier urging Congress to reject steps to diminish states' ability to manage water quality.

Committee Ranking Member Tom Carper of Delaware, in a written statement, conceded the governors' letter was written before the legislation was introduced. But he said it is clear reading the legislation that it impairs their authority. There appears to be some confusion that Section 401 only refers to discharges, he said. Congress more broadly allowed states to set effluent limitations and other limitations, he said. The difference, he said, would "severely clip our states' wings" in efforts to keep waters clean.

Senator Benjamin Cardin, Democrat-Maryland, questioned how realistic it will be for states to determine in 90 days whether they have adequate information for complex projects.

Toby Mack, president of the Energy Equipment & Infrastructure Alliance, said on the sidelines of the hearing that the 90-day limit may help prevent foot-dragging. He pointed to New York serially requesting more information from Millennium Pipeline's Valley Lateral Pipeline project. That experience was a "poster child" for how the law and the regulation can be gamed, he said.

--Maya Weber, maya.weber@spglobal.com

--Edited by Rocco Canonica, newsdesk@spglobal.com