Environmental update

Environmental update

June 16, 2020 | By Andrew Skroback in Washington, DC

A new Trump executive order in early June directs federal agencies to waive required reviews of environmental impacts from proposed infrastructure projects to be built during the COVID-19 pandemic.

The order invokes “emergency authorities” to waive parts of the National Environmental Policy Act, or NEPA, to speed development and construction.

NEPA requires federal agencies to conduct detailed environmental assessments of any major federal action that could significantly affect the environment, such as by increasing air or water pollution or threatening endangered species or their habitats. Federal actions include such things as federal agency approvals of non-federal actions (such as issuing permits), federal agency funding of projects and the development of federal agency regulations.

The order calls on the heads of the Army Corps of Engineers and the Departments of the Interior, Defense, Transportation and Agriculture to each “use all relevant emergency and other authorities” to expedite infrastructure projects.

The emergency authorities are usually reserved for response to natural disasters.

The agencies must report back to the White House within 30 days with a list of projects that have been fast-tracked.

The order is headed to court. Environmental groups are questioning the legality of waiving federal laws by presidential dictate and are accusing the Trump administration of using the coronavirus pandemic to speed up long-sought regulatory changes already moving through standard regulatory channels.

NEPA already allows federal agencies to consult with the White House on whether emergency circumstances make waiver of certain requirements necessary: here because of the pandemic. It is unclear whether a president can waive the law’s obligatory review of environmental impacts by federal agencies on such a broad basis.

Project developers again find themselves in a situation more prevalent under this administration than perhaps any other in recent memory, facing the prospect of proceeding with development and commerce in the face of the uncertainty that they may be proceeding under regulatory processes vulnerable to legal challenge or possibly to quick legislative or executive reversal following the next election.

While any federal approval of projects under the diminished review allowed by the order could be challenged in the courts, the order itself could be undone with the stroke of a new president’s pen.

The order follows closely on the heels of a pre-pandemic effort by the Trump administration to diminish NEPA. In January, it proposed new rules to limit the law’s review process and prevent federal agencies from the taking climate change impacts into account when weighing the environmental consequences of infrastructure projects under NEPA. The January proposals would narrow the range of projects that require NEPA review and set more accelerated timetables for completion of federal review. The January proposals are set to go into effect later in June, but are also expected to end up in court.

New York

New York moved in April to accelerate permitting and construction of new renewable energy projects.

Seventy percent of electricity generation in New York is supposed to come from renewable energy by 2030.

The “Accelerated Renewable Energy Growth and Community Benefit Act,” enacted in April, creates an office of renewable energy siting that will consolidate environmental reviews and permitting of major renewable energy projects under one roof.

It is expected to set uniform standards for siting, design, construction and operation of wind and solar projects.

Applicants seeking a permit for large renewable energy projects will now undergo a streamlined review under section 94-c of the NY Executive Law, rather than having to seek a permit under the more time-consuming process in article 10 of the Public Service Law. Large-scale renewable energy projects currently in the article 10 process can elect to participate in the new process.

The new office will provide draft permits for public comment and consult with local municipalities about proposed projects.

Proposed projects must still comply with local regulations, though the new office may determine whether such regulations are unduly burdensome.

Final decisions on permit applications are expected within a year or less under the new accelerated process.

The new statute also encourages the New York State Energy Research and Development Authority to identify what the statute calls “build-ready” sites, such as brownfields, landfills and former industrial properties, and then actively to secure permits, property interests and other authorizations for renewable energy projects. These sites will then be auctioned to developers.

The new law can be found online within section JJJ at https://nyassembly.gov/2020budget/2020budget/A9508b.pdf

Regulated waters

The US Environmental Protection Agency and Army Corps of Engineers have significantly narrowed the scope of waters that are subject to regulation under the US Clean Water Act.

A new “navigable waters protection rule,” published in the Federal Register in late April, follows from a Trump executive order directing EPA and the Army Corps to “review” a clean water rule put in place by the Obama administration in 2015 and to consider reinterpreting the scope of statutory terms to narrow the reach of federal regulation of water.

The new rule limits the scope of the term “waters of the United States,” often referred to as “WOTUS,” the meaning of which sets the outer bounds of regulation under the Clean Water Act.

The new rule lists four categories of waters that are considered WOTUS and, therefore, subject to regulation under the Clean Water Act. They are the territorial seas and traditional navigable waters, tributaries of such waters, certain lakes, ponds, and impoundments of covered waters, and wetlands adjacent to other covered waters (other than waters that are themselves wetlands).

All water bodies not falling within these four categories are now excluded from the definition of WOTUS by the rule and fall outside EPA and Army Corps of Engineers regulatory jurisdiction.

Notably, the new rule eliminates the “significant nexus test” that was described by Justice Anthony Kennedy in a landmark Supreme Court ruling in Rapanos v. United States in 2006. The 2015 Obama rule relied on the significant nexus test to justify making the WOTUS definition cover various non-navigable waters that affect WOTUS. The new rule observes that the Supreme Court in Rapanos said that the test was necessary only in the absence of clear regulations.

The new rule lists 11 types of water bodies that will be specifically excluded from federal regulation in the future. The 11 include such things as groundwater, including groundwater drained through subsurface drainage systems (such as drains in agricultural lands), ditches that are not traditional navigable waters, tributaries artificially irrigated areas that would revert to upland if artificial irrigation ceases, and artificial lakes and ponds that are not impoundments of water from a covered water body.

The new rule will take effect on June 22, 2020 unless blocked by a court.

Developers should expect uncertainty in the short- and possibly long-term as challenges to the new rule move through various federal courts. While challenges may be met by varied court rulings across the country that are limited in their application, it is possible that a federal district court could issue a nationwide injunction.

Prior jurisdictional determinations will remain valid after the new rule goes into effect, but anyone holding a valid jurisdictional ruling or a preliminary jurisdictional ruling may seek a reassessment based on the new rule.

States remain free to exercise jurisdiction over a wider range of waters or impose more stringent regulations under state law.

Water quality certifications

EPA in early June limited the role that states and Indian tribes play under the federal Clean Water Act in determining how proposed energy and other construction projects will affect water quality.

Section 401 of the Clean Water Act gives states the ability to review any proposed activity that requires a federal license or permit and that may involve discharges into WOTUS to ensure compliance with appropriate state water quality requirements.

States review impacts from proposed section 402 Clean Water Act discharge permits in states where EPA administers the permitting program and section 404 permits issued by the Army Corps of Engineers, as well as Rivers and Harbors Act sections 9 and 10 permits issued by the Army Corps and hydropower and pipeline licenses issued by the Federal Energy Regulatory Commission.

The Trump administration believe that some states use the certification process to delay or stop development.

EPA announced on June 1 that it had changed its Clean Water Act rules to limit the amount of time states and tribes can take to review a project and act on a request for 401 certification to one year. After one year, they will be considered to have waived the right to object.

The Clean Water Act rule changes also now prohibit states from blocking a permit for a project for any reason other than direct impacts to state waters. The Trump administration has accused a number of states of obstructing development for reasons that go beyond impacts to water quality: namely broader impacts on climate change.

A number of states have used the water certification rules to oppose fossil-fuel based energy infrastructure projects, such as an interstate gas pipelines in New York, New Jersey and Massachusetts and a coal export terminal in Washington.

In making the announcement, EPA Administrator Andrew Wheeler said the agency was acting to “curb abuses of the Clean Water Act that have held our nation’s energy infrastructure projects hostage, and to put in place clear guidelines that finally give these projects a path forward.” He said states would no longer be allowed to use the section 401 certification process to object to projects “under the auspices of climate change.”

A legal fight is expected with Democratic governors whose state agencies have used the Clean Water Act to block fossil fuel-based projects. Developers may still have difficulty overriding permit denials in cases where both water quality and climate change concerns are cited as reasons for denying a certification.

The new rule also clarifies the definition of “water quality requirements” and adds more items to address in applications for certification.

The new rule also requires applicants to request a pre-filing meeting with state officials to promote early coordination, though there does not appear to be any obligation that a state grant one.

Federal agency review of a state or tribal section 401 decision finding will be focused on whether the procedural requirements of both section 401 and the federal rule were met, rather than substantive issues in the document. EPA acknowledges that federal agencies may not possess the expertise or detailed knowledge concerning water quality and state law matters that would be needed to make substantive determinations.

If applicants have concerns about substantive issues discussed in the certification decision document, the courts are the proper forum.

The new rules say that “if a certification, condition or denial meets the procedural requirements of section 401 and this final rule, the federal agency must implement the certifying authority’s action, irrespective of whether the federal agency may disagree with aspects of the certifying authority’s substantive determination.”