A slew of permitting reforms backed by the White House and Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) could make it harder for states and tribes to obstruct natural gas pipelines and other energy facilities they don’t want, analysts say.
Manchin said this week that he had reached an agreement with the Biden administration, Senate Majority Leader Chuck Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) to streamline the permitting process for certain energy infrastructure (Energywire, August 2). The framework, which is still in flux and has yet to be introduced as legislation, was key for getting Manchin to sign off on a separate climate and energy bill, the “Inflation Reduction Act,” that Democrats hope to pass soon through budget reconciliation.
Some of the reforms included in the permitting side deal — which Manchin has said would help build needed energy infrastructure — could benefit large solar and wind farms and high-voltage transmission lines. But other aspects are raising alarm for environmentalists concerned about fossil fuel pipelines they say could worsen climate-warming emissions.
One provision would overhaul Section 401 of the Clean Water Act, which guides the process for states and tribes to issue water quality certifications for pipelines and other projects. Under Section 401, interstate pipelines, gas export terminals, hydroelectric dams and other projects that could discharge into rivers or streams generally need to obtain water quality certifications to move forward.
“It’s a hit to states’ rights,” Kassie Siegel, director of the Climate Law Institute at the Center for Biological Diversity, said of the potential changes. “Take the example of New York. New York state has banned fracking, yet this is intended to prevent New York from objecting to a fracked gas pipeline on climate grounds.”
If the changes are enacted, states or tribal agencies would have a year to take action on water quality certification requests, according to a one-page summary issued by Manchin’s office this week. Reviews of certification requests would also be limited to the scope of projects’ impacts on water quality — seemingly restricting states from considering climate change impacts or the cumulative impacts of a project in concert with other nearby infrastructure, observers said.
“This appears to be targeted at that to clarify that the review can only focus on the project that’s in front of them,” said Ben Cowan, a partner in environmental and energy law at Locke Lord LLP who works with pipeline and energy projects.
Given the sparse details so far on the permitting deal, the exact impact of the Clean Water Act changes is unclear. But historically, water quality certifications have been a thorn in the side of the natural gas industry, sometimes causing project delays or cancellations.
Last year, for example, PennEast Pipeline Co. LLC announced that it was canceling its 116-mile PennEast Pipeline in New Jersey and Pennsylvania, citing the fact that New Jersey had not granted the company water quality and wetlands permits under Section 401 of the Clean Water Act (Greenwire, Sept. 27, 2021).
New York has also denied applications for water quality certifications for two major pipeline projects: the Northern Access Gas Pipeline and the Constitution Pipeline. Initially slated to enter service in November 2017, the Northern Access project is now expected to be done in 2024, in part because of litigation over a 401 certificate from New York, developer National Fuel Gas Supply Corporation has said.
In some cases, water quality permits have been denied for “illegitimate purposes, or because the state doesn’t support the underlying project,” said Bernard McNamee, a former Republican commissioner at the Federal Energy Regulatory Commission who is now a partner at McGuireWoods.
Under the Clean Water Act, states are already expected to respond to certification requests within a year. But that timeline historically hasn’t kicked in until the certification request had been deemed complete by the state agency, said David Sligh, conservation director at Wild Virginia.
The new language mandating a one-year time frame appears similar to changes issued under former President Donald Trump pushing states to issue water quality certifications more quickly, even if the applications lacked key details, Sligh said.
“What the last administration tried to impose was that it’s a year, no matter what,” Sligh said. “They’d give you a written request for the thing, and it doesn’t matter how incomplete it is. You’ve got to act within a year. That doesn’t make sense.”
At the time, Trump administration officials said the changes would provide more certainty for industry and rein in states trying to block projects (Greenwire, June 1, 2020).
As for the latest proposal, industry groups said they would support a permitting side deal to help satisfy energy demand and build new infrastructure. Last week, American Gas Association CEO Karen Harbert said the deal would be critical for addressing “unnecessary red tape that plagues our system for permitting energy infrastructure.”
“We have not yet seen legislative text, but based on the outline, this proposal expedites and streamlines the permitting process and set firm timelines for project approvals,” Abigail Miller, director of communications at the Interstate Natural Gas Association of America, added in an email.
Last night, Sen. Kyrsten Sinema (D-Ariz.) announced she would back the reconciliation package, giving Democrats the last vote they need to move the bill (E&E Daily, Aug. 4).
While the reconciliation plan can pass the Senate with a simple majority, a permitting bill is expected to require 60 votes, including at least 10 Republicans.
Reports have indicated that the side deal could be included in a “continuing resolution” in September, which would need to pass to keep the government running, noted Kelly Johnson, a partner at the law firm Holland & Hart LLP.
“It’s hard to believe that Congress won’t pass continuing resolution in September. Nobody wants to go back to their districts and campaign after a shutdown,” said Johnson, who also served as counsel to the Senate Energy and Natural Resources Committee during the George W. Bush administration. “But the big thing will be the devil’s in the details in terms of what ends up being included.”
In addition to the Clean Water Act changes, the side deal would establish a list of 25 “high-priority energy infrastructure projects” that would be prioritized for permitting by federal agencies, according to the summary from Manchin’s office. The projects would be a mix of nuclear energy, hydrogen, fossil fuels, transmission lines and renewable energy, as well as carbon capture, sequestration, storage and removal. Eligible facilities would need reduce energy costs, improve energy reliability, advance decarbonization goals or promote “energy trade with our allies,” per the summary.
Overall, the high-priority designation could be “deeply problematic” by potentially fast-tracking carbon-intensive fossil fuel projects, said Moneen Nasmith, a senior attorney at Earthjustice.
“It’s certainly disconcerting to see fossil fuels, hydrogen and CCS projects get equal billing with projects that are genuinely moving us in the direction we have to go vis-a-vis the climate,” Nasmith said.
In a separate provision, the permitting deal would authorize FERC to issue permits for transmission projects that have been determined by the secretary of Energy to be “in the national interest,” the summary said.
That could help advance large, multistate power lines that are needed to support a lower-carbon power grid, said Rob Gramlich, founder and president of Grid Strategies LLC and an advocate for expanding the current network of high-voltage power lines.
“I think DOE is up to the task of determining these high priority corridors and working with RTOs and other Planning Entities on what helps customers in their regions,” Gramlich, referring to regional transmission organizations and other entities that oversee the reliability of the grid, said in an email.
Cowan, the environmental and energy lawyer, said the permitting reforms on balance could ultimately be more significant for transmission and renewables than for fossil fuels. While the changes wouldn’t address all of the obstacles impeding the siting of transmission lines, greater federal permitting authority for transmission could help get some projects moving faster, he said.
One contentious aspect of the side deal is a potential provision directing federal agencies to fully permit the Mountain Valley pipeline, a 303-mile natural gas project in Virginia and West Virginia. The provision would also grant jurisdiction to the U.S. Court of Appeals for the District of Columbia Circuit over litigation pertaining to the pipeline (Energywire, Aug. 2).
A version of the permitting deal reported by Bloomberg Government did not mention the pipeline — a favored project of Manchin’s (Energywire, Aug. 4). But a spokesperson for the senator said in an email that the recently released summary that includes Mountain Valley is the most up-to-date version and described the draft legislative text in the Bloomberg article as “incomplete and outdated.”
It would be unprecedented for Congress to dictate which court must handle litigation over Mountain Valley, said Jamie Van Nostrand, a professor at West Virginia University College of Law.
“That’s going to be very controversial,” Van Nostrand said.