WHITE HOUSE

Trump's orders target states' rights to boost oil and gas

President Trump is hoping to boost the oil and gas sector today by taking executive actions that increase control over pipeline approvals while targeting states' ability to block projects under a bedrock environmental law.

The president is heading to Texas where he's slated to sign two executive orders, including one marking the first step toward limiting the amount of time states have to block Clean Water Act permits.

It's a move aimed at boosting oil and gas pipeline permitting, one that many state groups — including those that generally support the administration's efforts to streamline permitting — have already said they will oppose.

A senior administration official on a call with reporters yesterday insisted the executive actions aren't meant to impinge on states' rights.

"We're not trying to take away power from the states," said the official, "but we are trying to make sure state actions comply with the statutory intent of the law."

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But Trump's orders will go far beyond testy state fights involving the Clean Water Act. What began months ago as a way to address pipeline permitting issues has morphed into a miscellaneous decree.

The orders, which Trump is slated to sign at the International Union of Operating Engineers' training and education center in Crosby, Texas, surrounded by union laborers and engineers, will also include provisions aimed at expanding energy production, circumventing environmental analysis and amending safety rules for natural gas export facilities.

Specifically, the official said the orders build on the "presidential permit" Trump recently issued to try to advance the controversial Keystone XL crude pipeline. That novel permit — which sought to bypass an environmental review conducted by the State Department — was described as "clever" by analysts and challenged by environmental groups (Energywire, April 9).

Trump's executive order would "clarify how this process works for future cross border" permits. As a technical matter, the change gives sole discretion to approve those permits to the president rather than the secretary of state.

That way, proposed international pipelines would not need to undergo the agency's National Environmental Policy Act, which can delay pipelines for years. That change could have implications for the proposed Enbridge Inc. replacement pipelines, spanning from Canada to the Midwest.

In addition, the orders would direct the Department of Transportation to amend safety rules governing LNG export facilities so they are not so prescriptive, the official said.

The order also directs DOT to propose a rule allowing LNG to be treated the same as other cryogenic liquids that are permitted to be shipped in rail tank cars. That is not currently authorized by the agency.

"LNG safety standards were originally drafted nearly 40 years ago," the official said. "Modern large-scale liquid import-export facilities bear little resemblance to peak-shaving facilities of 40 years ago."

The energy industry has been advocating for some of these changes for months, while others emerged with little notice. Yesterday, the senior administration official said the order would direct the Labor Department to evaluate investment trends to identify "barriers" in financing. The agency will look into proxy voting by shareholders.

"Many infrastructure projects rely on financing," the official said.

Clean Water Act

Trump's push to target states' Clean Water Act permit approvals stems from conflicts between energy companies, the administration and Democratic governments in Washington state and New York, which have blocked natural gas and coal-related permits in recent years.

The orders specifically target states' authority under Section 401 of the Clean Water Act, which allows them to approve, deny or place conditions on federal permits and ensure projects won't violate state water quality standards.

The law says states must make those decisions within a "reasonable timeframe" lasting less than a year. Federal agencies get to decide what is reasonable, with deadlines at EPA, the Army Corps of Engineers and the Federal Energy Regulatory Commission ranging from 60 days to a year.

The law is unclear about when that time frame begins, and EPA guidance from 2010 says the clock starts when states say they have enough information to make a decision.

The result is that states reviewing complicated infrastructure pipelines often far exceed federal deadlines, asking project developers for more information about how water resources might be affected and extending the clock.

Now, the Trump administration is directing EPA to revise that 2010 guidance and to look at decades-old regulations on the issue that predates the agency itself.

The senior administration official noted that the 2010 guidance document is based on a 1994 Supreme Court decision but that circuit courts of appeals have more recently ruled that the clock starts on state reviews when a permit application is submitted.

That includes a 2nd U.S. Circuit Court of Appeals decision from last year saying New York had taken too long to review a permit for a project from Millennium Pipeline Co. (Energywire, March 13, 2018).

New York's recent pipeline permit denials have attracted the ire of the energy industry, the Trump administration and members of Congress alike.

The senior administration official said the executive orders are meant to "alleviate some of these problems moving forward" by directing EPA to review "outdated" guidance and regulations.

The executive actions will not come as a surprise to states, where organizations are gearing up to fight preexisting efforts at EPA and the Army Corps to review their Clean Water Act Section 401 guidance (Greenwire, Jan. 24).

This week, the Western Governors' Association put out a statement saying any changes to states' Clean Water Act authority "would inflict serious harm to the division of state and federal authorities established by Congress."

In August, the group, which represents 19 states and three Pacific territories, spearheaded a letter signed by other state organizations criticizing a Senate bill similarly targeting states' Clean Water Act authority (Greenwire, Aug. 9, 2018). Republican senators reintroduced that bill yesterday in an attempt to "compliment" President Trump's executive actions.

At the time, WGA Executive Director Jim Ogsbury said, "the emergence of this issue is a reflection of fair-weather federalism," belying talking points that tout support for states' rights.

That's a point that was echoed by Senate Environment and Public Works Committee ranking member Tom Carper (D-Del.) in remarks to the Environmental Council of the States yesterday evening that touched on the state certification issue.

"We will all need to stand by a commitment to this federal-state partnership," he said (E&E News PM, April 9). "Cooperative federalism and respect for states' rights doesn't mean the same thing to this administration as it does to those of you who are actually doing the work of environmental protection."

Twitter: @arielwittenberg Email: awittenberg@eenews.net

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