Trump Order Puts State Power Over Pipeline Approvals in Crosshairs

President Trump signed an executive order on Wednesday that marks the latest Republican effort to revamp a federal environmental permitting process overseen by states that has derailed the construction of controversial natural gas pipelines and coal facilities.

Trump’s order directs the administrator of the Environmental Protection Agency—currently former coal lobbyist Andrew Wheeler—to review Section 401 of the Clean Water Act and EPA's related regulations and guidance.

This section of law provides states with a way to prevent projects from gaining federal approval, or to impose conditions on federal permits.

The order calls for the EPA administrator to consult with states and others to determine if the Section 401 guidelines should be updated to support goals like streamlining infrastructure permitting processes and increasing “regulatory certainty” for energy projects.

It also lays out a timeline for EPA to put forward new Section 401 guidance and regulations over the next 13 months based on its review.

“Too often, badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists,” Trump said at an event in Crosby, Texas held at a training center for the International Union of Operating Engineers.

The president suggested the Clean Water Act certification had been subject to “state level abuse.” He added: “They abuse you, when you’re nowhere near water they abuse you.”

Another directive Trump signed Wednesday says that decisions about certain permits for energy infrastructure crossing international borders “shall be made solely by the President.” Currently, the secretary of state plays a lead role in the process.

Proponents of Section 401 say it provides states with a degree of control over projects that could potentially harm the environment within their borders.

Patrick Parenteau, a law professor and senior counsel in the Environmental and Natural Resources Law Clinic at Vermont Law School, describes the section of law as “a very powerful tool for the states to protect their water quality.”

"It gives the states a veto,” he added. “And this administration doesn't like it. I get it. They're all about fossil fuel infrastructure and states are frustrating that.”

There are frustrations on Capitol Hill as well, where Republicans from states that produce coal and natural gas, like Wyoming and Oklahoma, have chafed over how other states with Democratic governors have handled Section 401 certifications in recent years.

On Tuesday, ahead of Trump signing his directive, a group of GOP lawmakers reintroduced a bill that failed to win congressional approval last year. The legislation would revise the Section 401 process, placing new limits on how states carry it out.

One example of how the certification process has been applied is when Washington state in 2017 declined to issue a Section 401 approval for a coal export terminal on the Columbia River. The project would have provided a departure point for shipping coal by sea to Asia.

Sen. John Barrasso of Wyoming, the lead sponsor on the Senate version of the Section 401 bill, has singled out this case. “Washington state has hijacked the water quality certification process and blocked Wyoming coal from being exported,” he said in a statement.

Wyoming is the nation’s top coal-producing state, with 41 percent of U.S. coal mined there in 2017, according to the Department of Energy.

Washington state Gov. Jay Inslee, is currently vying for the Democratic presidential nomination and is emphasizing the importance of addressing climate change as part of his platform. His office did not respond to requests for comment about Barrasso’s remarks.

Under Section 401, applicants seeking federal approval for activities that may cause a “discharge” into certain waters need a sign-off from the state where the discharge will originate.

This process involves states certifying that the discharge will comply with the Clean Water Act, including water quality standards.

How far Trump’s executive order itself may go toward changing this process, or eroding state power, is questionable.

“It's up to Congress,” says Parenteau. “The president can't sign an executive order and amend the law.” He notes that there is “a ton of litigation going on around these pipelines and 401 certifications” and expects a case will eventually end up before the U.S. Supreme Court.

A pivotal issue likely to come if the high court hears a Section 401 case, he said, is related to a provision that sets a 12 month deadline for states to take action on a certification request. There’s been debate over when the clock starts, particularly where applicants initially submit information that states view as inadequate to make a decision.

New York’s denial of three Section 401 certifications for pipeline projects the Federal Energy Regulatory Commission gave its blessing to under the Natural Gas Act has stirred controversy and court battles.

And Trump chided his home state’s actions on this front during his remarks. “New York is hurting the country because they’re not allowing us to get those pipelines through,” he said.

New York Gov. Andrew Cuomo, a frequent Trump critic, called the president's executive order “a gross overreach of federal authority that undermines New York's ability to protect our water quality and our environment” and said the federal government has “abdicated its responsibility to protect our environment and public health.”

“States must have a role in the process for siting energy infrastructure like pipelines, and any efforts to curb this right to protect our residents will be fought tooth and nail,” he added.

Some of Trump’s comments about the permitting requirements and how they are thwarting Northeast natural gas projects, and forcing states in the region to import fuel, echo views voiced on previous occasions by Sen. Jim Inhofe, an Oklahoma Republican.

Oklahoma produced about eight percent of U.S. dry natural gas in 2017. And Inhofe is a co-sponsor of the Section 401 bill in the Senate.

“When the United States leads the world in producing natural gas but states in the Northeast have to import Russian LNG, you know there is something wrong,” Inhofe said in a statement.

“A minority of states are abusing the water quality certification process for reasons that have nothing to do with water quality to delay needed interstate infrastructure projects,” he added.

But it’s not only Democratic states, or those often at odds with the Trump administration, that have expressed reservations about overhauling the Section 401 program.

The Western Governors’ Association—whose members include governors from Republican strongholds like Utah, Texas, and Barrasso’s Wyoming—was part of a coalition that sent a letter to congressional leaders last August raising concerns about this idea.

“Because each state is unique, we need the flexibility and authority to address our individual water needs,” says the letter, whose other signatories included the Conference of Western Attorneys General, and the Association of Fish and Wildlife Agencies.

“We urge Congress to reject any legislative or administrative effort that would diminish, impair or subordinate states’ ability to manage or protect water quality within their boundaries,” it adds.

Parenteau explained that some of the origins of Section 401 can be traced to the construction of federally licensed dams that harmed fish habitat and caused other environmental fallout.

“It's because the federal agencies have rammed these projects through, over state objections, over many decades,” he said. “That's the background here. These are not theoretical concerns.”