The Competitive Enterprise Institute is a policy and analysis organization committed to advancing the principles of free markets and limited government. We are particularly concerned about regulatory overreach and its adverse impacts, both at the federal and state levels. We are pleased to have the opportunity comment on the proposed Clean Water Act Section 401 Water Quality Certification Improvement Rule (Proposed Rule).1
This comment will focus on one specific aspect of Section 401 of the 1972 Clean Water Act, and that is the recent trend towards the misuse of this provision by some states in pursuit of a climate change agenda. The text and history of the Clean Water Act militates heavily against invoking Section 401 for any reason other than water quality concerns directly attributable to the project at issue. Nonetheless, it has been used in the last several years to target fossil fuel-related projects unlikely to have otherwise raised any Section 401 objections.
We believe the Clean Water Act, 401 Certification Rule, (2020 Rule) provided a much-needed restatement of the Clean Water Act’s original intent as well as restoration of the proper implementation of Section 401 that prevailed during its first several decades in existence.2 In doing so, the 2020 Rule would have served to rein in the recent misuse of this longstanding program to pursue unrelated climate policy objectives. CEI led a coalition comment in favor of what would become the 2020 Rule.3 We now are concerned that the Proposed Rule will once again open the door to the use of Section 401 by states to target fossil fuel-related projects without any legitimate water quality rationale. Allowing this expansion of the Clean Water Act would not only violate the law but would impede the delivery of affordable domestic energy to end users, both in the U.S. and around the world, and do so at a time when this energy is badly needed. For these reasons, we urge the agency to withdraw the Proposed Rule.
Section 401 essentially grants veto power to the certifying authority (usually a state but sometimes a tribe) most directly impacted by a proposed project “which may result in any discharge into the navigable waters….”4 Thus, the federal government cannot give its approval unless the state either certifies that the project will comply with all relevant water quality requirements (and may impose specific conditions on the project to ensure compliance) or waives such certification. The certifying authority must do so in a reasonable period of time “which shall not exceed one year” after receiving the request.5
Until the last decade, states had used their Section 401 authority based solely on water quality concerns. However, in recent years Section 401 has grown into something never intended – a means to block fossil fuel projects regardless of water impacts.6 For example, the state of New York has invoked Section 401 to stop new natural gas pipelines no different than ones that had routinely received state certifications in the past. It has also been used by the State of Washington to stop a coal export facility and Oregon against a liquefied natural gas (LNG) export facility.
Beyond outright rejections, some states have adopted the practice of deciding that a project’s permit application is incomplete and demanding additional data while asserting that the one-year clock must be reset each time they do so. The certifying authority’s apparent goal is to induce project developers to give up on their own and abandon the project, thereby avoiding the political consequences of an official rejection. These consequences can be substantial given the jobs associated with such projects as well as the affordable energy they help provide.
The 2020 Rule sought to alleviate these and other concerns. Among other things, it clarified that Section 401 applies only to water quality issues directly related to the proposed project and that the statutory one-year clock cannot be reset at state discretion once a request for certification has been received. In so doing, it also helped restore the proper federal/state balance and preserve interstate commerce, especially by ensuring that those states benefitting from and supportive of proposed projects cannot be harmed by other states for reasons unrelated to the Clean Water Act.
The 2020 Rule has since been vacated by a federal district court but subsequently reinstated by the Supreme Court pending ongoing litigation.7 In any event, the Proposed Rule at issue here would largely replace its provisions.
Read the full comments as a PDF