The CWA was drafted with federalism in mind, giving both states and the federal government a say in its implementation. Specifically, section 401 gives a state whose waters are impacted by a proposed project the authority to stop it for failing to meet the water quality protections in the law.
This provision has recently been misused by some states as a means to veto fossil fuel infrastructure projects. In the case of a proposed coal export facility along the Columbia River rejected by Washington state, Governor Jay Inslee (D) has made little effort to hide the fact that his opposition is based on the commodity the port would handle rather than any legitimate water quality concerns. In fact, the state’s justification for its veto went far afield from the water quality focus of section 401, and even included concerns over the eventual combustion of the exported coal in Asia.
In New York, several natural gas pipelines have been rejected by the state, also for reasons that go well beyond water quality and clearly incorporate Governor Andrew Cuomo’s (D) opposition to fossil fuels.
For both Washington and New York, court cases are pending, including a commerce clause challenge to the coal export facility veto on the grounds that it restricts coal-producing state’s access to global markets.
Washington and New York’s actions undercut two key Trump administration priorities—domestic energy dominance and permit streamlining—which is why the president is taking action. His executive order directs the EPA to issue updated guidance for states that advances these administration priorities by revisiting the scope of section 401 reviews and by considering hard deadlines for additional information requests. It also requires the agency to undertake a rulemaking to revise its implementing regulations for section 401 consistent with the administration’s pro-energy infrastructure goals.
The executive order does not contain many details, so its efficacy will only be known once the new EPA guidance and rule have been finalized. In contrast, a recently introduced Senate bill, S. 1087, contains explicit requirements that states must only consider the water quality impacts (and not climate or other non-water impacts) that are directly attributable to the proposed project when making a determination under section 401. It also creates a firm deadline by giving states no more than 90 days to request additional information. While this bill faces an uphill battle in Congress, its provisions provide a good blueprint for the new EPA guidance and rule.