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New Rule Limits States’ Ability to Block Pipelines Under CWA Section 401 Certification

by Transect Team, on Jun 3, 2020

On Monday, EPA released the final Clean Water Action Section 401 Certification Rule, which clarifies the timeframe and scope of review granted to states under Section 401 of the Clean Water Act.

But first, some background.

Section 401: A Refresher

Under Section 401 of the Clean Water Act (CWA), a federal agency is not allowed to issue any permit or license that may result in a discharge from a “point source” into waters of the United States without authorization from the local state government or Tribe. This gives states and Tribes a robust role in federal permitting when it comes to impacting waterways. There are limitations though. Per Section 401, if the state or Tribe “fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements … shall be waived with respect to such Federal application.” Individual certification may be required for many large-scale projects, while blanket certification is often granted, with or without conditions, for many general permits, like the USACE’s nationwide permits.

Point source is defined in the CWA as “any discernible, confined and discrete conveyance…from which pollutants are or may be discharged.” In other words, point source is a defined location (pipe, ditch, channel, vessel, etc) that introduces pollutants into a waterway at a defined point. The most common “point source” Transect users will be familiar with is construction sites that are over 1 acre in size where a NPDES permit/SWPPP is required.

401 As A Tool for Pipeline Delays

While CWA 401 has not historically been an impediment to approving pipelines, in recent years it has become a tool to delay or obstruct permitting. State DEQs have been known to exceed the one-year time limit for certification or deny certification for reasons not related to water quality (such as effects to wildlife or greenhouse gas emissions). Examples include two New York projects: Constitution natural gas pipeline, where certification was denied three years after the initial application, and Millennium Valley Lateral natural gas pipeline, where certification was denied because of greenhouse gas emissions.

Executive Order 13868

In April 2019, President Trump issued Executive Order (EO) 13868, Promoting Energy Infrastructure and Economic Growth, which directed the EPA to revise the aging Section 401 certification regulations (not updated since 1979) and guidance, siting issues like delayed certifications as a hinderance to advancing energy infrastructure. This final rule is in direct response to and is consistent with the EO.

Key Points of the New Rule:

1. 401 authority is limited to water quality impacts from point source pollution.

The rule states, “[EPA] is also aware that some certifications have included conditions that may be unrelated to water quality, including many of the types noted above, such as requirements for biking and hiking trails to be constructed, one-time and recurring payments to State agencies for improvements or enhancements that are unrelated to the proposed federally licensed or permitted project, and public access for fishing and other activities along waters of the United States. Using the certification process to yield facility improvements or payments from project proponents that are unrelated to water quality impacts from the proposed federally licensed or permitted project is inconsistent with the authority provided by Congress.”

2. The one-year timeline may not be extended for any reason, and Section 401 does not include a tolling provision.

The final rules says that states and Tribes “must act on a section 401 certification within a reasonable period of time, which shall not exceed one year. The CWA does not contain provisions for tolling the timeline for any reason, including to request or receive additional information from the project proponent. If the certifying authority has not acted on a request for certification within the reasonable time period, the certification requirement will be waived and the federal agency may proceed to issue the license or permit.”

Tolling allows for the pausing or delaying of the running of the period of time set forth by a statute of limitations. The final rule clearly disallows tolling.

There is some concern that project proponents could run out the one-year clock, and thus default to a waiver by not providing or delaying the provision of information requested by the state or Tribe in order to help make their decision on certification. However, EPA “disagrees that the clock should toll while project proponents gather additional information or for any other reason, as there is no statutory basis for tolling.”

3. The one-year timeline starts when the state or Tribes receives the certification request, not when the application is deemed “complete”.

This is a departure from current standards, where many states do not start the one-year time clock until they have received a “complete application,” which can lead to months (or years) of delay while the state determines if they have received all necessary information from the project proponent. (There are, however, already several court cases that have found that the one-year timeline is absolute, including Millennium Pipeline Co. v. Seggos and Hoopa Valley Tribe v. FERC).

In contrast, the new rule starts the time clock at receipt of a certification request, as long as the request meets the information requirements found in section 121.5(b) or (c), as applicable, of the final rule.

The final rule states, “the statutory timeline for certification review starts when the certifying authority receives a “certification request,” rather than when the certifying authority receives a “complete application” or “complete request” as determined by the certifying authority… A certification request must have all components listed at section 121.5(b) or (c) of the final rule to start the statutory reasonable period of time.”

4. A pre-filing meeting request must be sent to the state or Tribe at least 30 days before submittal of the certification request.

The purpose of the pre-filing meeting is to ensure that the states and Tribes have early notification and an opportunity to discuss the project and information needs before the one-year time clock begins. State and Tribes can choose to accept or decline the request. Regardless of if the request is granted, project proponents must submit documentation as evidence of the request as part of the certification request.

The rule states, “all project proponents, including federal agencies when they seek certification for general licenses or permits, must submit a request for a pre-filing meeting with the appropriate certifying authority at least 30 days prior to submitting a certification request.”

Can states just deny 401 certification if they can’t meet the one-year timeline?

Yes, they can, but the EPA hopes that will be the exception, not the rule.

There is concern that states and Tribes may deny 401 certification rather than risking the possibility that their certification may be waived because they exceeded the one-year clock. State have also historically requested that proponents “withdraw and resubmit” their applications in an attempt to annually reset the one-year time clock (through Hoopa Valley Tribe v. FERC invalidated this practice). EPA suggests the following to facilitate timely certification:

  • Mandatory pre-filing meeting requests will provide an opportunity for early notification about information requests and will limit future delays
  • Project proponents should consider when to submit a certification request, as the timing of request submission affects the information that may be available for certifying authorities to make timely decisions
  • Federal licensing and permitting agencies should look for opportunities to establish, by rule, an appropriate point in the federal licensing or permitting process when a project proponent should request certification

USACE Nationwide Permit 12 for New O&G Pipelines

For now, new oil and gas pipeline construction projects cannot seek authorization under Nationwide Permit 12. Unless the project can safely reposition itself and its construction methods under another nationwide permit, O&G pipeline proponents find themselves faced with obtaining a USACE 404 individual permit for proposed impacts to waters of the U.S. While Nationwide Permit 12 has (well, had) blanket water quality certification, individual permits do not. Therefore, individual water quality certification must be sought from the state DEQs.

The one-year certification timeline will be a new factor to consider as part of pipeline construction. The most should be made of the pre-filing meeting in order to limit information requests, facilitate state certification, and keep certification timelines as “reasonable”. Avoid traditional trenching methods where possible and opt for avoidance by boring where practicable.

Topics:Clean Water Act