The side deal to the climate agreement between Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) includes a compromise that would change the way states issue Clean Water Act permits, potentially making it easier for developers to build pipelines, according to a draft text reviewed by Bloomberg Law.
Schumer and Manchin have agreed to tweak section 401 of the Clean Water Act to require states to make a decision within one year of a certification request—either to grant it, grant it with conditions, deny it, or waive certification. Section 401 gives states and tribes the power to limit or reject projects that may pollute lakes, rivers, and other waters protected under the act.
“We need that kind of certainty,” said former Federal Energy Regulatory Commission Chairman Neil Chatterjee, now a senior adviser at Hogan Lovells. “Project developers have been held in limbo. I dealt with this when I was at FERC—[states] playing games with the clock and leaving the project sponsor in complete limbo.”
If a state is forced to make a rapid decision, “yes or no, then the project sponsor—whether it’s a fossil fuel project or a clean energy project—knows what the next steps are and what their legal recourse options are,” Chatterjee said. “Whereas today, they can be totally kept in limbo.”
One of the broad concepts agreed to by both lawmakers is language that would require states and tribes to publish clear requirements for water quality certification requests, or else default to federal rules.
The language is intended to create more predictability and reduce unworkable variances in permit criteria across different states, all with different hydrology and riparian sensitivities, according to Alex Herrgott, who provided technical assistance during the White House and congressional negotiations. Herrgott led the federal permitting office during the Trump administration.
Although developers and states will still disagree over the criteria some states require that go beyond what’s laid out in the Clean Water Act, “most developers will embrace a compromise on a set of consistently applied rules of the road, as long as they are predictable and reasonable, so there are no surprise decisions years into the project,” said Herrgott, who is now president of The Permitting Institute, a pro-development organization.
Herrgott said states’ rights “are essential,” but that “predictability for projects that traverse multiple states is paramount in order for us to reach the energy goals that both sides have.”
David Ross, who led the EPA’s water office during the Trump administration and is now a partner at Troutman Pepper Hamilton Sanders LLP, said it’s “fine to have differences as you cross state lines. The issue is, are the foundational concepts similar enough that people can grapple with it? Is it related to water quality? What are the known rules of the road?”
Chatterjee agreed that the kind of language being contemplated would “better align the process to get the necessary infrastructure that we need built.”
The senators’ agreement to seek passage of a provision that would ultimately sharpen the scope of federal permitting is separate from the deal on a broad climate and tax package announced last week.
Schumer said then that the lawmakers, along with House Speaker Nancy Pelosi (D-Calif.), have agreed to try to add the permitting provision in a continuing resolution—a stopgap spending measure to fund the government if regular appropriations bills aren’t passed before the end of the fiscal year on Sept. 30.
Environmentalists, however, have been quick to criticize Manchin and Schumer’s side agreement. The deal also would seek to fast-track the process for the Mountain Valley Pipeline, a $6.6 billion US natural gas pipeline project that’s been repeatedly stalled over environmental approvals.
Abigail Dillen, president of Earthjustice, vowed to “fight this attempt to weaken bedrock environmental review laws when the time comes.”
“The price to be paid for Manchin’s vote looks more and more like an oil and gas wish list,” said Jean Su, director of the energy justice program at the Center for Biological Diversity. “This backroom deal threatens communities and the environment, while shunting aside state and tribal input. Leader Schumer and Pelosi should reject these fossil fuel giveaways.”
Sen. Shelley Moore Capito (W-Va.), top Republican on the Senate Environment and Public Works Committee, told reporters on Tuesday that a pending vote to strike down the Biden administration’s changes to the National Environmental Policy Act will provide important signals on how supportive members will be on the Manchin-Schumer deal.
“Let’s see how they vote on this initiative initiated by Sen. Sullivan, because I think that is going to be the indicator of how serious they are to fulfill what they say is a promise that was made,” said Capito, referring to Sen. Dan Sullivan (R-Alaska), who’s spearheading a measure to use the Congressional Review Act to claw back the White House’s NEPA changes.