EPA permit rule raises climate legal questions

By Hannah Northey | 06/13/2022 01:20 PM EDT

A pipeline construction project.

A pipeline construction project is shown. EPA's rewrite of a Clean Water Act rule has sparked concerns over state and tribal authority over a range of permitting decisions, including for pipelines. Jay Phagan/Flickr

An EPA proposal that gives states and tribes more latitude to review contentious Clean Water Act permits is unlikely to emerge as a regulatory cudgel for local regulators to thwart fossil fuel projects or tie permits to climate change.

The proposed rule, unveiled last week, provides more flexibility to states and tribes as they issue permits under CWA’s Section 401. But linking those permits to emissions, warming, flooding or other climate-related factors could be legally fraught, experts say.

“I don’t think [the proposal] can be read to say it would allow states to put conditions on a project that would be related to climate change and greenhouse gas emissions,” said Larry Liebesman, a senior adviser at Dawson & Associates, which specializes in permitting, and a former senior trial attorney in the Department of Justice’s environmental division.

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“Even if one could tangentially find some potential effect on sea-level rise, for example, I think that’s going too far, in the way I’m reading the [proposal] and the way I’m reading the law,” Liebesman continued.

EPA’s proposed rule, published in the Federal Register yesterday, lays out a process under the law’s Section 401 by which developers of pipelines, power lines, mines and other projects request federal permits to discharge into regulated waterways and wetlands.

While Democrats have welcomed the rule, Republicans like Sen. Kevin Cramer of North Dakota blasted the Biden administration. Cramer issued a statement criticizing the move reversing a Trump-era policy that he said provided the energy sector with regulatory relief.

For the first time, the EPA proposal would allow states and tribes to take part in defining a “reasonable time” to conduct such reviews, and the proposal restores flexibility on what states and tribes consider when reviewing applications (Greenwire, June 2).

But EPA’s mentions of climate change leave plenty of room for interpretation, experts say.

While the agency in the preamble of the rule says it’s not consistent with the Clean Water Act to deny or condition a water permit solely on potential air quality, traffic, noise or economic impacts that have no connection to water quality, the agency doesn’t specifically mention climate change.

And while the proposed rule allows states and tribes to consider an “activity as a whole” when reviewing permit applications, the agency insists that activity shouldn’t include non-water-quality-related impacts.

In another section of the proposal rule, EPA suggests in a hypothetical situation that perhaps a state or tribe “concerned about future, downstream, climate change-related impacts on aquatic species due to increased reservoir temperatures,” require a dam operator to take remedial actions in the permit.

Pat Parenteau, a Vermont Law School professor, agreed with Liebesman but said EPA didn’t “nail” or clarify its approach to climate change in the proposed rule. The ambiguous language of the proposed rule, he said, signals EPA is inviting states like New York to make the connection between warming temperatures, more intense rainfall and runoff, and water quality issues. But while the science is there to back up such arguments, Parenteau said the legal foundation — especially given the nation’s majority-conservative Supreme Court — is not.

“But I would agree that would be stretching 401 further than this Supreme Court would be willing to go, now you’re getting closer to what the court has dubbed the ‘major question doctrine,’” said Parenteau. “That may be a bridge too far for this court.”

State push

Holland & Hart LLP partner Ashley Peck agreed that the proposed rule doesn’t expand the scope of Section 401 reviews under the Clean Water Act or allow for consideration of climate change.

But Peck also said that doesn’t mean states won’t try — and they likely will.

“I do expect that you will have some states in controversial projects stretch the 401 review,” she said.

Before the Trump administration narrowed the scope of reviews with its 2020 regulation and expressly excluded issues not related to point source water pollution, some states took a broad review under Section 401 and issued denials that did consider climate change impacts for things like coal export terminals, said Peck.

“The caveat to that is that they’re not just reviewing those projects under 401, they’re doing them under their state environmental policy acts, which usually is the case with a big, controversial project,” she said. “So they have other avenues to consider those impacts.”

If a state did try to include climate change impacts without addressing water quality under a 401 review, Peck said the decision could be open to legal attacks.

“Could there be a tie to water quality standards as a result of climate change exacerbating conditions such that a project could have ultimate water quality impacts? I think that’s possible in a given project,” Peck said. “But I don’t think this rule itself creates a clear ability for states to directly address climate change in a 401 review.”

Focus on WOTUS

Parenteau said he was surprised that the proposed rule appears to give states and tribes under Section 401 the authority to protect all of their water, not just those deemed “navigable” or federally protected.

Such language, he said, could provide a safety net for states that want to protect waters and wetlands that stand to lose federal protection under a looming Supreme Court battle and signals EPA is possibly preparing for a negative outcome tied to the case — one that could ultimately shape the scope of federal jurisdiction under the Clean Water Act.

The uncertainty is tied to the nation’s highest bench in January agreeing to take up Sackett v. EPA, a challenge from Idaho landowners Chantell and Michael Sackett that asked the court to revisit its splintered 4-1-4 ruling in Rapanos v. United States (Greenwire, Jan. 24).

The 2006 ruling resulted in two competing tests for defining WOTUS, a regulation that clarifies which streams, wetlands and other waters fall under federal jurisdiction.

Legal experts say the court is likely to line up its existing majority of conservative justices to rule that a more restrictive interpretation of the Clean Water Act — and therefore WOTUS — should be the law of the land, one laid out in the Rapanos decision by former Justice Antonin Scalia.

In that decision, Scalia concluded WOTUS should only include relatively permanent standing or continuously flowing bodies of water because, according to him, that aligned with the Webster’s Dictionary definition (Greenwire, May 15, 2017).

EPA’s proposed 401 rule, said Parenteau, could be a “gap filler” that allows states and tribes to protect waters no longer under the federal government’s protection as “waters of the U.S.,” or WOTUS.

“I’ve never seen EPA be so explicit in saying 401 is not limited to waters [that fall under] the Clean Water Act … it’s all the waters of the state, whether they’re tiny ponds or anything else,” he said.

“That’s like, wow, so a state could veto [an Army Corps] permit to protect the wetland that wasn’t even protected by the Clean Water Act? Appears so,” Parenteau said.

Peck said the language is a little “legally dicey” because while states and tribes have the ability to apply water quality standards to waters beyond WOTUS, including groundwater, EPA’s 401 authority stems from the Clean Water Act, which only applies to waters of the U.S.

“To say that a state can then broaden that seems legally troubling,” said Peck.

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