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EPA Finalizes Rule Limiting State Abuses of Clean Water Act to Block Fossil Energy Projects

On June 1, the Environmental Protection Agency (EPA) issued a final rule clarifying that the Clean Water Act cannot be used by states to block energy projects based on climate or any other grounds unrelated to water quality. This rule should help remove roadblocks to many such projects that both create jobs and keep energy affordable for homes and businesses.

Section 401 of the 1972 Clean Water Act grants states veto authority over major projects, including energy infrastructure, that may adversely impact water quality in the state. Unfortunately, this well-intended piece of cooperative federalism (which worked reasonably well for decades) has been abused by some states in recent years in order to pursue a climate agenda unrelated to any genuine water quality issues.

For example, the State of Washington has used section 401 to block a proposed coal export facility on the Columbia River, despite having readily approved facilities that handle other goods. New York has also used this provision to stop new natural gas pipelines that would bring much-needed additional supplies from Pennsylvania into the state and on to New England as well, despite the precedent of similar pipelines being approved in the years before climate became a high priority. The last of New York’s section 401 pipeline rejections came on May 15. In both cases, the state’s rationales contained only a thin veneer of water quality concerns, and were clearly driven by state policy against fossil fuel-related projects.

This was never the congressional purpose of the Clean Water Act, which is intended to focus on water. The EPA’s final rule (which closely follows the proposed rule that a coalition of organizations led by CEI commented upon here) restores that focus. In our words, “the rule strikes a better balance between state prerogatives and federal authority under the Clean Water Act and properly ensures that state water quality certifications will be determined on the basis of water quality standards, as provided by the Act and in in keeping with congressional intent.”

Under the final rule, entitled, “Updating Regulations on Water Quality Certification,” states can still object to any project, but the objection must be based on a potential water quality violation directly attributable to the project. In other words, states can no longer go after projects involving coal, oil, or natural gas unless there is also a genuine water quality-related concern. The final rule also takes steps to reduce the delay tactics employed by some states by reestablishing the Clean Water Act’s one-year time limit beyond which any state objections are waived.

Granted, states pursuing an extreme climate agenda may still try to block as many projects as possible, but this rule should make it harder for them to succeed in court.

President Trump has made a priority of streamlining the process for approving domestic energy and other infrastructure projects. This goal is more important than ever now that the country needs both the jobs and affordable energy provided by such projects for the long post-coronavirus economic recovery ahead. The EPA’s final rule, along with ongoing reforms to the National Environmental Policy Act  and other programs, helps further this goal.