EPA to States: Don’t Rock the Boat with Water Quality Certification Review

Akin Gump Strauss Hauer & Feld LLP

On June 7, 2019, the U.S. Environmental Protection Agency (EPA) issued updated guidance to “clarify and provide recommendations concerning the implementation of” Section 401 of the Clean Water Act (CWA), which could have far-reaching impacts on virtually all projects impacting federal waters, including those related to energy development.1 By the guidance, EPA is seeking to limit states’ and tribes’ abilities to deny or impose conditions on water quality certifications issued under Section 401, as well as speed up the certification review process.

The guidance follows an April 10, 2019, Executive Order from President Trump that continued the administration’s deregulatory push. The Order directed EPA to review and update interim guidance from 2010 addressing how states and tribes issue water quality certifications, then review and update its regulations by May 2020 to ensure consistency with the “federalism consideration underlying section 401” and the goal of “promot[ing] private investment in the Nation’s energy infrastructure.”2 EPA’s regulations implementing Section 401 have not been updated since 1971.

Section 401 provides states and authorized tribes with a key tool to help maintain water quality within their borders, in collaboration with federal permitting agencies. Under Section 401, a federal agency may not issue a permit or license for a project that may result in discharge to waters of the United States unless the applicable state or tribe issues a certification verifying compliance with existing water quality requirements, or waives the certification requirement.3

In recent years, however, states have stretched this authority to slow or stop major energy projects. For instance, last month the New York State Department of Environmental Conservation denied a certification for the Williams natural gas pipeline, citing greenhouse gas emissions from the project and indirect impacts to water and coastal resources, requiring mitigation.4 Similarly, in September 2017, the Washington Department of Ecology denied a certification for the proposed Millennium coal export terminal, citing impacts related to boat traffic, climate change, and air pollution, in addition to effects on water quality.5

In response to these state actions hindering large private-sector projects, EPA now warns that if a state or tribe issues a Section 401 certification that has “conditions beyond the scope of Section 401, i.e., conditions not related to water quality requirements, or has denied a water quality certification for reasons beyond the scope of Section 401,” the applicable federal permitting agencies should determine whether the state or tribe has waived its Section 401 authority or to issue the permit or license with the conditions.6

The guidance also clarifies review timing; the one-year period for states and tribes to review and act on requests for certification should begin at the “receipt of the certification request,” rather than upon receipt of a “completed application” as was provided in the outgoing guidance.7 According to EPA, waiting until an application was “complete” to begin the time period for review is inappropriate because Section 401 does not use the term, nor does it provide states or tribes with authority to determine that a request is incomplete or delay the start of the timeline on that basis. Additionally, EPA incorporated the D.C. Circuit’s recent ruling in Hoopa Valley Tribe v. FERC8 that the one-year period does not reset when a project proponent withdraws then resubmits a virtually identical certification request. Finally, EPA encouraged states and tribes not to wait for completion of review under the National Environmental Policy Act (NEPA) to act on permit requests, because those reviews are broader in scope than Section 401 reviews.9

Notably, the guidance is nonbinding; EPA made clear that it does not impose any new legal requirements on states, tribes or permit applicants.10 States are therefore free to ignore the guidance without fear of legal repercussions, at least for the time being—EPA indicated that it may use parts of the guidance in its forthcoming rulemaking to update the Section 401 regulations in accordance with Executive Order 13868.

1 Clean Water Act Section 401 Guidance for Federal Agencies, States, and Authorized Tribes, U.S. Environmental Protection Agency (June 7, 2019) [hereinafter “Guidance”], https://www.epa.gov/sites/production/files/2019-06/documents/cwa_section_401_guidance.pdf.

2 Exec. Order No. 13868, 84 Fed. Reg. 15495 (April 10, 2019).

3 33 U.S.C. § 1341(a)(1).

4 Letter from Daniel Whitehead, Director, Division of Environmental Permits of the New York State Department of Environmental Conservation, to Joseph Dean, Manager, Environmental Health and Safety Department of Transcontinental Gas Pipe Line Company, LLC (May 15, 2019), https://www.law360.com/articles/1160360/attachments/0.

5 Letter from Maia Bellon, Director, State of Washington Department of Ecology, to Kristin Gaines, Millennium Bulk Terminals-Longview, LLC (September 26, 2017), http://blogs2.law.columbia.edu/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2018/20180906_docket-18-2-00994-08_petition-for-review.pdf.

6 Guidance, at 4.

7 Id. at 3.

8 913 F.3d 1099 (D.C. Cir. 2019).

9 Guidance, at 5.

10 Id. at 2.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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