How Manchin’s climate deal could thwart EPA permitting rule

By Hannah Northey, Kelsey Brugger | 08/04/2022 01:20 PM EDT

Permitting decisions under Section 401 of the Clean Water Act have become a lightning rod among states and members of Congress. EPA has been working on a rewrite of the rule, which could affect the fate of everything from natural gas pipelines to mines and liquefied natural gas export terminals.

Sen. Joe Manchin (D-W.Va.).

Sen. Joe Manchin (D-W.Va.) at the Capitol. Francis Chung/E&E News

Permitting reforms that Sen. Joe Manchin is pursuing in return for his approval of a burgeoning climate and energy deal on Capitol Hill could clash with and possibly stymie EPA’s ongoing efforts to finalize a new Clean Water Act rule.

A policy wish list the West Virginia Democrat released this week includes an overhaul of Section 401 of the Clean Water Act, a contentious section of the law that governs how states and tribes review and ultimately decide on permits to fill or dredge federally protected waters.

Such permitting decisions, a lightning rod among states and members of Congress, can affect the fate of everything from natural gas pipelines to mines and liquefied natural gas export terminals.


States like New York and Washington in recent years have used the certification process to deny permits for pipelines and coal terminals, citing not only water quality concerns but also questions about how a project might contribute to air pollution and climate change (Greenwire, Aug. 20, 2019).

But it’s unclear exactly which changes Manchin is looking for in bipartisan legislation, and EPA, in the meantime, is moving forward with reforming controversial Trump-era revisions that drew the ire of environmental groups and some states and tribes (Greenwire, June 13).

Last night, Bloomberg Government reported that a draft copy of the legislation did not include a mention of the Mountain Valley pipeline, which was in Manchin’s policy summary. An aide to the senator said the legislative text is “inaccurate and incomplete.”

Congressional rules say policy changes like permitting reform must move through separate legislation. That’s likely to happen following the August recess, after Democrats hope to pass the budget reconciliation bill, including the climate and energy deal Manchin has agreed to.

Manchin said he’s secured a “commitment” from Senate Majority Leader Chuck Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) for general permitting reform. But such a bill would need 60 votes, and Republicans have so far scoffed at the Manchin plan, even though many have long hoped to ease permitting for major energy projects in their states. Others, too, question such lofty promises.

“It’s not a foregone conclusion,” said Bill Snape, senior counsel at the Center for Biological Diversity. “It’s hard to believe Nancy Pelosi signed off on Joe Manchin’s fact sheet, for a lot of pragmatic reasons, Taiwan included.”

Manchin’s fact sheet calls for reforms based on “improvements from both the Biden and Trump administrations. And yet the summary, sparse on details, appears to differ with a proposed rule EPA released in June, including language that would affect the timing and substance of state and tribal reviews.

“I do think it’ll affect their rulemaking,” said Pat Parenteau, a Vermont Law School professor. “If this goes into law … it’s going to create a delay. EPA’s going to have to figure out how to interpret this new language when they finally see it, and there are sure to be ambiguities.”

At issue is EPA’s proposal released this summer to reverse Trump-era regulations around Section 401 (Greenwire, June 2).

EPA’s proposal would for the first time allow states and tribes to take part in defining a “reasonable time” to conduct such reviews. The proposal also would restore flexibility on what states and tribes consider when reviewing applications. In contrast, Manchin’s proposal calls for states and tribes to grant, conditionally grant, deny or waive certification within a year.

“I think EPA would have to withdraw the proposed rule and revise it,” said Ben Cowan, a Houston-based environmental attorney with Locke Lord LLP who works with large pipeline and energy projects.

“If Congress adopts a statute that imposes a one-year limit on certification … [and] the proposal says within ‘reasonable amount of time’ but not a date, it seems to me that EPA would have to revise it,” he added.

Not everyone sees a potential Manchin bill changing EPA’s trajectory.

Moneen Nasmith, a senior attorney at Earthjustice, said the bullet points in the senator’s list don’t seem to address the long list of issues that EPA has been grappling with. EPA, she said, could also simply make changes in its final rule and explain why it’s adopting a certain alternative.

“As much as it does feel like the timing is complicated, it actually doesn’t need to be, and it certainly does not need to delay EPA’s promulgation of the final rule,” said Nasmith.

EPA didn’t immediately respond when asked about the potential for a bill or changes to its work.

‘A gnarly problem’

EPA’s proposed rule is facing mixed reactions, with some states applauding the agency’s reforms and others asserting that the proposal is out of step with the Clean Water Act.

The comment period for the proposed rule closes Monday.

EPA unveiled its proposal after the Supreme Court earlier this year agreed to revive the Trump-era 401 rule, which dismantled about 50 years of precedent on how states, tribes and the federal government had approached water quality certifications. The justices did not explain their reasoning (Greenwire, April 6).

The underlying question of the legality of the Trump rule now sits with the 9th U.S. Circuit Court of Appeals, which is considering whether Senior Judge William Alsup of the U.S. District Court for the Northern District of California erred when he found that the regulation violated decades of Supreme Court precedent.

EPA’s rule reversed Trump-era policy by offering more flexibility around review times, expanding states’ authority to conduct more expansive reviews, among other provisions. The Trump administration crafted its rule in response to states like Washington blocking a contentious coal export terminal and New York rejecting a natural gas pipeline.

In comments to EPA, a host of environmental and industry groups, states, individuals and tribes sounded off about the agency’s proposal and what they would like to see changed.

The Appalachian Trail Conservancy blasted the rule generally, saying it’s “designed to benefit the development of infrastructure on an accelerated timeline and without the ability to provide substantive input from states and tribes as required by Congress.”

The group also took issue with EPA’s provision allowing states and tribes to determine a “reasonable amount of time” for reviews, writing that the agency is granted no such authority under the Clean Water Act.

“The Current Rule appoints federal agencies as the sole arbiter as to what constitutes a reasonable period of time for states and tribes to act on water quality certification requests, despite federal agencies lacking information on any number of factors that may contribute to an agency’s ability to review applications,” the group wrote.

Other groups, like the Environmental Protection Network, supported the rule broadly, while the Virginia Department of Environmental Quality laid out changes it wants to see.

Specifically, the state agency suggested that EPA revise its proposal to allow any party to request extensions of the “reasonable period of time” and to allow automatic extensions in cases of force majeure events and conflicting state public notice provisions.

“Without better and more clearly defined provisions for extending the [reasonable period of time], a certifying authority might need to deny a Section 401 certification during a force majeure event simply to avoid an automatic waiver,” the state agency wrote.

Still, others found that the agency’s proposal struck the right tone between developers and those overseeing permitting.

Melvin Baker, chairman of the Southern Ute Tribal Council, welcomed EPA’s return to a pre-Trump interpretation of Section 401 of the Clean Water Act, arguing that the prior administration went too far in limiting the scope of state and tribal reviews.

“We believe EPA strikes a good balance by allowing certifying authorities to evaluate the water quality impacts of the activity by defining ’activity as a whole’ as ’any aspect of the project activity with the potential to affect water quality,’” Baker wrote.

Parenteau said he knows EPA is struggling with difficult questions around the scope of state and tribal authority to determine water quality requirements and what that entails.

“That’s a gnarly problem, and I’m sure it’s one EPA is working on, and they’re probably going to come up with something nobody likes, but at least they’ll account for some of the nuances that arise,” he said.

Reporter Miranda Willson contributed.