As we head towards year-end permitting negotiations, the Clean Water Act has emerged as a key component of a broader reform package that will also include NEPA, transmission, and efforts to limit the ping-ponging treatment of energy sources between administrations.
The Clean Water Act has received relatively little attention compared to laws like NEPA. This is in part because its problems have historically been viewed, incorrectly, as just a parochial concern of the pipeline industry.
In particular, Section 401 of the Clean Water Act, also known as the State Water Quality Certification, allows states to “grant, deny, or waive certification for federal permits that may result in a discharge into waters of the United States.” This has allowed (typically) blue states to veto or attach severe conditions to pipeline projects, freezing investment and cutting off entire parts of the country from natural gas access – despite the fact that these projects already require a separate federal layer of water permitting and review.
Most notably, over thirty percent of New England households still use heating oil – substantially dirtier, unhealthier, and more expensive than natural gas – because New York has leveraged Section 401 to block pipelines from crossing the state from Pennsylvania into the northeast.
So as energy prices skyrocket and the country looks to switch away from dirtier fuels, reforming Section 401 barriers for natural gas seems obviously good on bipartisan merits.
But perhaps more importantly, Section 401 is by no means just a barrier to the natural gas industry – consider, for example, the hydropower industry, which has consistently cited Section 401 as a major barrier to deployment. Even further, the structure of the state certification makes it a tech-neutral barrier to all types of interstate linear infrastructure. In other words, if we get major transmission reforms in the upcoming permitting package, transmission lines will be headed for severe Section 401 bottlenecks.
Indeed, advocates often talk about giving transmission lines parity with pipelines – which, unlike transmission, have routine federal eminent domain via FERC. As the reasoning goes, this disparity is the reason that pipelines have been built so much more quickly than transmission in the last few decades. This thesis seems largely correct – but it is also true that, while federal eminent domain helps override one state veto, the Clean Water Act 401 has evolved into yet another. A comprehensive reform package, then, must get at both potential veto points.
One might ask why Section 401 has not yet emerged as a major problem for interstate transmission. This is almost certainly because we barely build any interstate transmission in the first place, so there’s not much to block. But of course, if Congress passes a FERC backstop, some interregional planning requirements, and more, this will change. Broader deployment, combined with the increased political polarization that often accompanies energy buildout, will likely mean opposition from state and local politicians.
That does not bode well for a future grid buildout. While many Democrats have historically opposed pipelines, we’re now seeing a concerning analogue with Republicans and transmission. Senator Josh Hawley has worked to kill the Grain Belt Express line in Missouri; similar opposition has emerged in other states, with local politicos blocking transmission projects on various grounds.
This isn’t just a red state problem, of course. We’ve seen several prominent examples of blue states blocking transmission lines too, including the famous NECEC line in Maine. Either way, in a world where states no longer have siting and eminent domain veto power in their toolkit, it is a near-certainty that Section 401 will become the primary tool for obstruction.
So, while it’s entirely reasonable for transmission advocates to be focused on FERC backstops and other transmission-specific reforms, they should also recognize that Section 401 reform will be critical to enabling the type of transmission buildout we’ll need in the long run.
Valuable Section 401 reforms do not have to take the form of carveouts. In particular, three categories of reform, taken in sum, would go a long way to right-sizing reviews while preserving state involvement:
Right-Size Scope: Limit certification to projects that directly result in a discharge, replacing the current practice wherein states can require broad consideration of the entire project’s effects on a range of issues unrelated to water quality
Strengthen Timelines: Establish a firm 12-month deadline for states to grant or deny certification starting when the request is received, such that states can no longer abuse requests for withdrawal and resubmission to reset the one-year clock indefinitely.
Expedite Judicial Review: Provide fast-track court review for certification actions involving energy infrastructure licenses and FERC authorizations, with final decisions required within a shortened period (eg, 120 days).
The next few months will offer one of the last opportunities to right-size our permitting processes before shifting leadership in Congress sidelines permitting reform for the foreseeable future. Modernizing Section 401 will be a critical piece of the puzzle.