The Nickel Report

On June 1, the U.S. Environmental Protection Agency (EPA) Administrator, Andrew Wheeler, signed a final rule seeking to increase predictability for applicants by clarifying the regulations that govern the Clean Water Act (CWA) Section 401 water quality certification process.

Following Governor Abbott’s recent proclamation of a state of disaster in Texas due to the COVID-19 pandemic, both the Texas Commission on Environmental Quality (TCEQ) and the Railroad Commission of Texas (RRC) have issued guidance for regulated entities relating to environmental compliance concerns as well as other useful information relative to agency operations during these uncertain times.

Over the past few years, certain states have relied on ambiguities in the Clean Water Act (CWA) Section 401 water quality certification process to block the construction of significant energy infrastructure projects (e.g., oil and gas pipelines, coal export facilities, and liquid natural gas [LNG] terminals) determined by federal agencies to be in the public interest of individual states, regions, and the nation as a whole. Consistent with the cooperative federalism structure of the CWA—and the important role of states in protecting water quality within their borders—Section 401 requires applicants for a federal license or permit anticipated to result in discharges to navigable waters to obtain a certification from the relevant state that the discharge will comply with applicable state water quality standards. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of the request for the certification, waiver is automatic. 33 U.S.C. § 1341(a).

On Wednesday, April 10, President Trump signed an Executive Order (EO), titled Promoting Energy Infrastructure and Economic Growth, that requires the US Environmental Protection Agency (EPA) and other federal agencies to undertake a series of regulatory actions to clarify the Clean Water Act (CWA) § 401 water quality certification (WQC) process. CWA § 401 provides states with the opportunity to evaluate the potential water quality impacts from discharges of proposed projects by certifying whether the discharge will comply with applicable water quality standards. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of a request for certification, waiver is automatic. 33 U.S.C. § 1341(a). A handful of states have relied on this process to thwart the development of energy infrastructure projects, either by denying certification due to concerns unrelated to water quality (such as opposition to hydraulic fracturing, climate change concerns, etc.) or by ignoring the statutory time period to reach a determination.