The Nickel Report

As we previously reported, for the first time in over 25 years, the U.S. Environmental Protection Agency (EPA) has approved the formal transfer of Clean Water Act (CWA) section 404 permitting authority to a state.  On December 22, 2020, the State of Florida – only the third state to receive such approval – “assumed” 404 permitting authority from the U.S. Army Corps of Engineers (Corps) in certain waters of the United States (WOTUS).  Since that time, CWA section 404 permit applicants have faced a number of questions about the scope and process of assumed 404 permitting.  Five of the top questions are listed below, followed by their answers.

Before yesterday only two states had received approval to administer the Clean Water Act (CWA) section 404 program (Michigan and New Jersey), and no state had received approval since 1994.  Now, for the first time in over 25 years, the U.S. Environmental Protection Agency (EPA) has approved the formal transfer of section 404 permitting authority to a third state: Florida.  Once EPA’s approval is published in the Federal Register, the Florida Department of Environmental Protection (FDEP) will “assume” 404 permitting authority from the U.S. Army Corps of Engineers (Corps) in certain waters, significantly altering the 404 permitting process in Florida.  EPA’s decision has broader implications for the 404 program on a national scale, as other states, including Oregon and Minnesota, consider whether to pursue assumption.

The reach of the CWA is “notoriously unclear.” Sackett v. EPA, 132 S. Ct. 1367, 1375 (2012) (Alito, J., concurring). It can be difficult for a landowner to understand whether wetlands or a small creek on his or her parcel, for example, are federal waters that require a Clean Water Act (CWA) permit before the landowner can begin work to build a home, develop the property, or cultivate the land. Last week, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) (together, the Agencies) issued a new, long-awaited final rule, titled the “Navigable Waters Protection Rule,” which seeks to streamline and clarify the geographic scope of federal CWA jurisdiction.

Over the past few years, certain states have relied on ambiguities in the Clean Water Act (CWA) Section 401 water quality certification process to block the construction of significant energy infrastructure projects (e.g., oil and gas pipelines, coal export facilities, and liquid natural gas [LNG] terminals) determined by federal agencies to be in the public interest of individual states, regions, and the nation as a whole. Consistent with the cooperative federalism structure of the CWA—and the important role of states in protecting water quality within their borders—Section 401 requires applicants for a federal license or permit anticipated to result in discharges to navigable waters to obtain a certification from the relevant state that the discharge will comply with applicable state water quality standards. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of the request for the certification, waiver is automatic. 33 U.S.C. § 1341(a).

On Wednesday, April 10, President Trump signed an Executive Order (EO), titled Promoting Energy Infrastructure and Economic Growth, that requires the US Environmental Protection Agency (EPA) and other federal agencies to undertake a series of regulatory actions to clarify the Clean Water Act (CWA) § 401 water quality certification (WQC) process. CWA § 401 provides states with the opportunity to evaluate the potential water quality impacts from discharges of proposed projects by certifying whether the discharge will comply with applicable water quality standards. States can waive this requirement, and if they do not act within “a reasonable period of time (which shall not exceed one year) after receipt” of a request for certification, waiver is automatic. 33 U.S.C. § 1341(a). A handful of states have relied on this process to thwart the development of energy infrastructure projects, either by denying certification due to concerns unrelated to water quality (such as opposition to hydraulic fracturing, climate change concerns, etc.) or by ignoring the statutory time period to reach a determination.