Just weeks after the state of New York cited climate change among its reasons for blocking a natural gas pipeline to be built beneath New York Harbor, the Trump administration finalized changes to federal regulations aimed at limiting states’ ability to stop federally approved pipelines and other infrastructure under the Clean Water Act. 

The rule change, which Environmental Protection Agency administrator Andrew Wheeler signed on June 1, will restrict states and authorized tribes from citing anything other than a narrow pollution discharge when denying a permit to a federally approved infrastructure project, such as a pipeline or dam. The new rule will also limit the permitting process to a year for states and tribes, which would waive their rights to block a project if they exceeded that time limit.

For years, Republicans supporting fossil fuel development have cried foul over states’ use of the Clean Water Act’s Section 401, which gave state and tribal governments broad authority to block federally approved infrastructure projects that threaten their waters. States like New York and Washington have in recent years used the authority under that section to block high-profile natural gas pipelines, coal terminals or other fossil fuel infrastructure—often in the name of larger environmental goals like tackling climate change.

“Now you won’t be able to use 401 in the future going forward citing climate change as the reason,” Wheeler said in a press call announcing the changes, adding that no longer would states “hold the nation’s energy infrastructure hostage.”

But the changes, which Wheeler first proposed in August 2019, have for months been condemned by environmentalists who see this as the latest move by the Trump administration to disregard environmental law and prop up the fossil fuel industry. State officials, including from New York, California and Washington, also lambasted the move, signaling that legal challenges are soon likely to follow. 

“With the stroke of a pen, EPA intends to handcuff Washington’s ability to protect our waters, our environment and our communities,” Laura Watson, director of the Washington State Department of Ecology, said in a statement. “It makes a mockery of the federal-state partnership that has protected our waters for nearly 50 years … and it will not stand.”

Many environmental legal scholars see the new rule as highly problematic, going against a past Supreme Court decision and decades of deferring to states to enforce the Clean Water Act. Some believe the new rule could even encourage developers to revive past projects once thought dead.

Rule Change Could Face Legal Battles

Wheeler said that by limiting the scope that states can consider when rejecting a permit to water quality issues, it stays truer to the “purpose of Section 401,” and provides much needed clarity for developers. But legal experts say the new rule “muddied the waters” for how states should interpret their authority, and that it is certain to face serious legal challenges.

Specifically, the new rule limits water quality issues protected under Section 401 to “point source discharges.” That means states and tribes can only consider pollution emitted from an identifiable point, such as a pipeline leak, rather than taking a more holistic approach to water quality, said Peter Morgan, a senior attorney for Sierra Club.

That interpretation of the Clean Water Act appears to stand in direct opposition to a 1994 Supreme Court decision, in PUD No. 1 of Jefferson County v. Washington Department of Ecology, said Jim Murphy, legal advocacy director of the National Wildlife Federation.

The decision upheld a broad interpretation of states’ rights under the Clean Water Act, ruling in favor of Washington state regulators, who said a proposed hydroelectric dam on the Dosewallips River would reduce stream flow enough to have a negative impact on the river’s fish.

“The Supreme Court has already addressed this,” Murphy said.

Morgan said that in the past, developers have had to prove to states that projects won’t harm waters in a number of different ways, including changes to surrounding groundwater, impacts on the flow of water and even alterations to water temperature. 

For example, Washington state last year used Section 401 to block a water permit for a coal export terminal that would have shipped the fuel overseas, citing a litany of reasons that included noise pollution and increased road traffic. More recently in New York, state regulators used it to block the controversial Williams Pipeline, on the grounds that construction would stir up toxic sediment in New York Harbor. They also noted that the natural gas pipeline would be “inconsistent” with the state’s climate law requiring a reduction in statewide greenhouse gas emissions.

It’s unclear if any of those considerations will be valid under the new rule, Morgan said.

The EPA’s new rule also requires state and tribal governments to make their decisions on water quality certification within a year of an application, which legal experts say could open a loophole for developers to withhold information during the permitting process, essentially running out the clock and forcing states to waive their right to deny a permit.

Romany Webb, a senior researcher for Columbia University’s Sabin Center for Climate Change Law, said it’s unclear exactly what states can do if developers willfully withhold information, but that it could result in more states simply denying the permits outright. “There is a concern that developers will just submit form applications that don’t provide what the states need to make a useful decision,” she said. “The rule is somewhat ambiguous about what states should do in that situation.”

Several Fossil Fuel Projects Could be Impacted by New Rule

The changes to scope, in particular, could affect several natural gas developments currently under consideration across the United States, including the PennEast natural gas pipeline in New Jersey and Pennsylvania, and the Jordan Cove liquified natural gas export terminal in Oregon. Both projects still need to clear state water quality certification and environmentalists say that both will carry a number of adverse environmental and climate impacts.

PennEast, a proposed 120-mile natural gas pipeline that would cross the Delaware River, has faced a series of setbacks in New Jersey, where regulators have rejected a permit application under the Clean Water Act and also fought the companies behind it over whether eminent domain applies on state lands. 

Earlier this year, PennEast Pipeline Company asked federal regulators to approve constructing the project in two phases. That would allow its backers to build part of the pipeline in Pennsylvania, which has already approved the project, before reapplying for a new water quality permit in New Jersey under the new rules, said Maya K. van Rossum, who runs Delaware Riverkeeper, an environmental group that opposes the project.

“PennEast I think is going to be the big battlefront with regards to those rules if they’re allowed to stand,” she said.

The Jordan Cove liquified natural gas terminal, which would include a 229-mile natural gas pipeline between Canada and a shipping port in Oregon, would also have a number of environmental impacts that probably won’t be considered under the new rule, including runoff from construction, impacts on wildlife from shipping and the project’s greenhouse gas emissions.

Columbia University’s Webb said it’s unclear exactly how the decisions surrounding these projects will play out, especially when it comes to any legal challenges, as courts sort out how the new rule will work. But “at least in some cases, projects may have a better chance of being approved” because of the administration’s changes, she said.

Dead Projects Brought Back to Life?

What could be one of the more interesting developments of the rule change is whether developers will decide to pursue projects that have already been denied permits in the past, so that they can be judged  under the new regulations.

As a case in point, Sierra Club’s Morgan points to the controversial Pebble Mine in Alaska. The massive gold mine was originally denied certification by the EPA under the Clean Water Act in 2012 because the mine’s construction and operations were expected to inflict numerous environmental hazards on Alaskan wetlands and the state’s economically critical sockeye salmon population.

But the Trump administration revived the project by granting it federal approval in 2017, and Alaska regulators might find any arguments that aren’t related to point source discharge less persuasive under the new rule, Morgan said.

The same goes for the Williams Pipeline, which in May both New York and New Jersey regulators denied water certification under Section 401. Williams Co., the pipeline’s developer, said in a statement before the new changes were finalized that it had no intention of reapplying for those permits. But other than being a financial disincentive, there’s nothing legally stopping the company from doing so, said Kimberly Ong, senior attorney for the Natural Resources Defence Council.

“Williams can always reapply,” Ong said. “That was always in their ability. Now they can just reapply under these new rules.”

Nicholas Kusnetz contributed reporting.