Tom Shepstone
Shepstone Management Company, Inc.
President Donald Trump delivered some great news to pipeliners yesterday with his pipeline executive order, Andrew Cuomo says it’s overreach, so it’s good!
The Trump pipeline executive order is here! And, Andrew Cuomo, the king of overreachers, says it’s “gross overreach.” We don’t need to know a lot more, do we? If Andrew Cuomo says he’s going to fight it “tooth and nail,” you know it has to be good for pipeliners, natural gas development, energy security and New Yorkers dealing with natural gas connection moratoriums. Those moratoriums are the consequence of the Governor’s blind pursuit of green political adherence and slavish dedication to pushing corporatist special interest agendas. The order, though, is also very good on the merits.
Much of the coverage of the Trump pipeline executive order either addresses a companion order dealing with Keystone Pipeline and related issues or reflects a poor understanding by reporters of what the whole water quality certification is all about. Last week I speculated on what the order might look like if it was well done and, it turns out that’s pretty much how it all went down. The full pipeline executive order on water quality certification (“Executive Order on Promoting Energy Infrastructure and Economic Growth”) may be found here. The key paragraphs are as follows (emphasis added):
Sec. 3. Water Quality Certifications. Section 401 of the Clean Water Act (33 U.S.C. 1341) provides that States and authorized tribes have a direct role in Federal permitting and licensing processes to ensure that activities subject to Federal permitting requirements comply with established water quality requirements. Outdated Federal guidance and regulations regarding section 401 of the Clean Water Act, however, are causing confusion and uncertainty and are hindering the development of energy infrastructure.
(a) The Administrator of the Environmental Protection Agency (EPA) shall consult with States, tribes, and relevant executive departments and agencies (agencies) in reviewing section 401 of the Clean Water Act and EPA’s related regulations and guidance to determine whether any provisions thereof should be clarified to be consistent with the policies described in section 2 of this order. This review shall include examination of the existing interim guidance entitled, “Clean Water Act Section 401 Water Quality Certification: A Water Quality Protection Tool for States and Tribes” (Section 401 Interim Guidance). This review shall also take into account federalism considerations underlying section 401 of the Clean Water Act and shall focus on:
(i) the need to promote timely Federal-State cooperation and collaboration;
(ii) the appropriate scope of water quality reviews;
(iii) types of conditions that may be appropriate to include in a certification;
(iv) expectations for reasonable review times for various types of certification requests; and
(v) the nature and scope of information States and authorized tribes may need in order to substantively act on a certification request within a prescribed period of time.
(b) Upon completion of the consultation and review process described in subsection (a) of this section, but no later than 60 days after the date of this order, the Administrator of the EPA shall:
(i) as appropriate and consistent with applicable law, issue new guidance to States and authorized tribes to supersede the Section 401 Interim Guidance to clarify, at minimum, the items set forth in subsection (a) of this section; and
(ii) issue guidance to agencies, consistent with the policies outlined in section 2 of this order, to address the items set forth in subsection (a) of this section.
(c) Upon completion of the consultation and review process described in subsection (a) of this section, but no later than 120 days after the date of this order, the Administrator of the EPA shall review EPA’s regulations implementing section 401 of the Clean Water Act for consistency with the policies set forth in section 2 of this order and shall publish for notice and comment proposed rules revising such regulations, as appropriate and consistent with law. The Administrator of the EPA shall finalize such rules no later than 13 months after the date of this order.
(d) Upon completion of the processes described in subsection (b) of this section, the Administrator of the EPA shall lead an interagency review, in coordination with the head of each agency that issues permits or licenses subject to the certification requirements of section 401 of the Clean Water Act (401 Implementing Agencies), of existing Federal guidance and regulations for consistency with EPA guidance and rulemaking. Within 90 days of completion of the processes described in subsection (b) of this section, the heads of the 401 Implementing Agencies shall update their respective agencies’ guidance. Within 90 days of completion of the processes described in subsection (c) of this section, if necessary, the heads of each 401 Implementing Agency shall initiate a rulemaking to ensure their respective agencies’ regulations are consistent with the rulemaking described in subsection (c) of this section and with the policies set forth in section 2 of this order…
Sec. 7. Reports on the Barriers to a National Energy Market. (a) Within 180 days of the date of this order, the Secretary of Transportation, in consultation with the Secretary of Energy, shall submit a report to the President, through the Assistant to the President for Economic Policy, regarding the economic and other effects caused by the inability to transport sufficient quantities of natural gas and other domestic energy resources to the States in New England and, as the Secretary of Transportation deems appropriate, to States in other regions of the Nation. This report shall assess whether, and to what extent, State, local, tribal, or territorial actions have contributed to such effects…
Simply put, the Trump pipeline executive order gives the EPA 13 months to straighten out this mess by issuing new guidelines for water quality certification that address the proper scope of state reviews, the time they may take to make those reviews and the conditions they may impose. Then, other Federal agencies have another 90 days to start the process of revising their own rules in line with EPA guidance.
It’s not easy turning around the Federal ship, but you have to start somewhere. The important thing is that it constitutes a change in direction and is a signal to agencies to get things moving. This, in combination, with the Hoopa court decision, pushes recalcitrant states such New York back onto their heels.
The pipeline executive order anticipates serious changes in this EPA manual, which was published as “interim guidance” a full nine years ago and, astoundingly, it encouraged states to abuse the certification process, telling them this:
In cases where the certifying agency believes it needs more information or time to review the license or permit before issuing a certification, and it has not been able to work out an appropriate time frame with the licensing or permitting Federal agency, states have tended to take two approaches. Some states on occasion have suggested the applicant withdraw and resubmit its application for certification (restarting the certification clock), as an alternative to denying certification based on gaps in analyses or information. This withdraw-resubmission process potentially gives the applicant and the §401 certifying agency time to produce requested reports, and is intended to give the certifying agency additional time to review the relevant information and issue a certification.
The manual, in other words, created just the excuse Andrew Cuomo and other like-minded tyrants needed to hold pipeline projects hostage. Until Hoopa, that is, which pointed out the blackmail effect of such a distorted process and stated agencies only have up to a year and only if they need it and it’s reasonable.
The executive order builds on this and demands the manual be updated and finalized to incorporate these court-articulated principles from the Clean Water Act itself as the best practice standard. Also, contrary to what Andrew Cuomo says, even the interim manual recognizes this standard to some degree:
The federal permitting or licensing agency may set the certification response time limit to any “reasonable period of time (which shall not exceed one year).” If the certifying agency does not respond within the time limit, §401 certification is waived. As discussed below, federal agencies have established varying timeframes up to one year. An initial step, therefore, is for the certifying agency to verify the amount of time it has for its §401 analysis.
Federal agencies may define what is a “reasonable time” for purposes of §401 certification of their permits or licenses, provided the period is less than one year in duration. For example, some Corps Districts provide a response period of 60 days for a §401 certification associated with a CWA §404 permit. FERC normally allows a full year for states and tribes to develop a §401 certification response. EPA regulations governing the certification of federally issued CWA §402 NPDES permits allow states and tribes 60 days to issue certification. EPA regulations applicable in other contexts suggest a time limit of six months.
Yes, FERC is somewhat unusual in allowing the full year, so the Trump pipeline executive order, is both a necessary and appropriate corrective. And, other agencies allow as little as 60 days, with six months being a more common standard. So, the path is being cleared to get back to a state of reasonableness where New York, for example, gets six months and perhaps an additional three if they can prove they need it. That’s where the court is headed and where the Trump administration is pointing and it’s very good.
Take not, also, that the order demands a study within six months “regarding the economic and other effects caused by the inability to transport sufficient quantities of natural gas and other domestic energy resources to the States in New England.” Does that sound like a report on the real cost of Andrew Cuomo’s green special interest politics? I think so. It couldn’t come at a better time or be more appropriate.
Check out Trump’s remarks about this specific order:
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