EPA’s latest power grab is aimed at states’ rights

The Environmental Protection Agency has just proposed a rule that would severely limit state authority to ensure that federally licensed pipelines, coal terminals, LNG facilities and other major energy infrastructure projects will not violate state water quality laws.  

Innocently titled “Updating Regulations on Water Quality Certification” the proposed rule was issued on Aug. 8 in response to President Trump’s Executive Order 13868 seeking to fast track energy projects. The order directed EPA to adopt new rules to implement the Water Act’s Section 401 water quality certification provision which gives states the power to veto or condition federal licenses or permits to construct a variety of projects that impact water resources.

Impetus for the proposed rule has come mainly from the gas industry complaining that states like New York, Washington and Oregon have been using their 401 authority to block or delay these projects. Litigation challenging the states’ denial of 401 certification is underway in various state and federal courts.

Rather than allow the judicial process to sort out industry claims that these “blue” states are abusing their 401 authority EPA is proposing a radical reinterpretation of the statute that would severely curtail the power of the states to protect their water resources.

First, EPA proposes to give the states less time to act on 401 certifications or lose their right to do so. The statute says the states must act within a “reasonable period of time” not to exceed 12 months from the date it receives the request for certification. Failure to meet the deadline means the state forfeits its rights of review. Courts have strictly enforced this statutory time limit even where the state claims the applicant has provided insufficient information to make an informed decision.

EPA wants to give the Federal Energy Regulatory Commission and the Army Corps of Engineers the power to determine what constitutes a “reasonable” period, suggesting that 6 months should be the norm. This would hamstring states with limited resources to evaluate complex projects and encourage companies to game the system by submitting minimal data and ignoring a state’s request for additional information knowing that the clock is ticking.

Second, EPA wants to shrink the scope of the states 401 authority and takes issue with the Supreme Court’s seminal decision in the 1994 PUD#1 case upholding the state of Washington’s imposition of a minimum flow condition on a FERC license for a proposed hydroelectric dam. In that case the utility argued that the condition exceeded the state’s authority because it was not limited to the “discharge of fill material” to build the dam and was not tied to any specific numeric water quality criteria.

 Justice Sandra Day O’Connor emphatically rejected that argument and wrote an opinion giving states broad authority to consider the full impacts of the “activity” associated with the discharge. She said that a state may impose limitations necessary to protect designated uses of the water that go beyond numerical water quality criteria including flows needed to maintain salmon habitat. O’Connor noted that Congress gave the states broad discretion to base their certifications on “any other appropriate” state law requirement.

In a remarkable show of bureaucratic chutzpah, the Trump EPA now says O’Conner got it all wrong. The proposed rule brazenly states “EPA is proposing to interpret section 401 differently than the Supreme Court did in PUD No. 1.” EPA criticizes the court’s “outmoded” reasoning and says its more “holistic’ approach better reflects what it calls the “modern” Clean Water Act.

It turns out what EPA means by a modern interpretation is one that strips the states of the authority Congress gave them to oppose projects that do not meet their standards for protecting not just the chemical composition of a water body but the overall health and biological integrity of the aquatic ecosystem.    

Finally, EPA purports to give FERC and the Corps the final word on whether a state’s rationale for denying or conditioning a federal permit is “consistent with the scope” of the Clean Water Act.  If not, the licensing agencies can “set aside” the state’s decision, forcing the state to go to court to overturn the agency ruling while allowing construction to proceed. This stands the certification process on its head and flatly contradicts Congress’ express policy to “recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution.” 

Ironically, the Trump EPA cited interference with states’ rights as a major reason for repealing the Waters of the United States rule adopted by the previous administration to clarify the jurisdictional scope of the Clean Water Act. It will be interesting to see how the states’ rights advocates respond to this far more serious impingement on state sovereignty.

Patrick Parenteau is a professor of environmental law at Vermont Law School.