Trump's Infrastructure Plan - Potential Impacts on Permitting (and a Section 401 Round Up)

Earlier this week, the Trump administration released its Legislative Outline for Rebuilding Infrastructure in America (Infrastructure Plan), a 53-page document, of which 16 pages were dedicated to ideas for streamlining the environmental review process for a range of infrastructure projects, including pipeline and Liquefied Natural Gas (LNG) terminals. Based on our data, it appears that this Infrastructure Plan would have limited effect on the FERC certificate process, but could impact the time period allowed for the issuance of a Water Quality Certificate (WQC) under Section 401 of the Clean Water Act, presuming Congress actually enacts, as written, any of the reforms suggested. The Infrastructure Plan has proposals for streamlining various environmental reviews, including a number that our team will address in subsequent customer notes. In this Special Report we assess two requested legislative changes that could impact permitting for interstate gas pipelines and LNG terminals:

Establishing a firm deadline of 21 months for lead agencies, under the National Environmental Policy Act, to complete their environmental reviews through the issuance of a Finding of No Significant Impact (FONSI) or a Record of Decision (ROD), as appropriate; and
Establishing a firm deadline of three months after the lead agency's FONSI or ROD for federal agencies to make decisions with respect to any other necessary permits, including any permits delegated to state agencies under federal law.

The Infrastructure Plan notes that under current law, a state is given a period, not to exceed one year, to issue its WQC, or the requirement is waived. In spite of the statutory time frame, states increasingly do not issue permits within the applicable time frames, or they require applicants to refile prior to the one-year deadline, which produces a loop of state inaction and refiling. The Infrastructure Plan proposes to amend the Clean Water Act to change the time period for the issuance of a Section 401 WQC by setting unspecified time limits for making a completeness determination and then fixing the time for the state's determination, at what would seem to be the three month deadline following FERC's issuance of its environmental assessment.

Of the 259 pipeline projects included in LawIQ's analysis that have been reviewed by FERC since 2008, only five took longer than the 21-month period set forth in the Infrastructure Plan -- so it does not appear that this time limit would have a meaningful impact on the FERC environmental review process. Possible revisions to the state WQC process would undoubtedly be welcomed by the industry. But even if the undefined suggestions in the Infrastructure Plan were implemented through Congressional action, such changes would not aid the projects whose WQC have either been denied or are being challenged in court.
Given all of the challenges that recent projects have faced in obtaining their WQC, we thought it would be an opportune time to use data from our web-platform to update the status of this critical approval for a sample of projects:

Major Project	State	History of Section 401 WQC
PennEast Pipeline Project	NJ	NJDEP denied without prejudice the PennEast application for a New Jersey Freshwater Wetlands permit, which acts as both a Clean Water Act Section 404 and 401 permit. Therefore, PennEast currently has no permit application pending before the NJDEP, and will need the permit to begin construction.
Mountain Valley Pipeline Project	WV	WVDEP issued the WQC. Sierra Club appealed to the Fourth Circuit Court of Appeals, challenging the process WVDEP used to issue WQC. WVDEP withdrew the WQC and instead waived its right to issue a project specific certification, and relied on its general WQC conditions for USACE Nationwide Permit 12.
Mountain Valley Pipeline Project	VA	On December 7, 2017, the Virginia State Water Control Board approved the WQC. Environmental opponents appealed the issuance of the WQC to the Fourth Circuit, which has set a briefing schedule that ends in April 2018. No timeline for an oral argument or decision has been set.
Atlantic Coast Pipeline Project	WV	On December 6, 2017, the WVDEP waived its right to issue a WQC for the project.
Atlantic Coast Pipeline Project	VA	On December 12, 2017, the Virginia State Water Control Board approved the WQC. Environmental opponents appealed the issuance of the WQC to the Fourth Circuit, which has set a briefing schedule that ends in April 2018. No timeline for an oral argument or decision has been set.
Atlantic Coast Pipeline Project	NC	On January 26, 2018, the NCDEQ issued the WQC for the project.
NEXUS Project	OH	Ohio EPA issued the WQC. City of Green appealed that decision to the 6th Circuit. City of Green withdrew its appeal based on a settlement reached with NEXUS
National Fuel's Northern Access 2016 Project	NY	NYSDEC denied National Fuel's WQC. National Fuel appealed that denial to the Second Circuit Court of Appeals. The Second Circuit heard oral arguments in November 2017, and is expected to make a decision by the summer. National Fuel also asked FERC to find that the NYSDEC had waived its right to issue a WQC. No timeline for FERC to rule on National Fuel's request for a finder of waiver.
Constitution Pipeline Project	NY	NYSDEC denied Constitution's WQC. Constitution appealed the denial to the Second Circuit. Second Circuit upheld the NYSDEC's denial. Constitution has petitioned the United States Supreme Court to review the Second Circuit's decision. Rarely are petitions granted. The Supreme Court should rule by the beginning of the summer. Constitution also asked FERC to find that the NYSDEC had waived its right to issue a WQC. FERC denied Constitution's request for a waiver finding. Constitution has asked FERC to reconsider its order. No time limit on FERC's decision to reconsider, but such a reversal appears unlikely. Constitution could then appeal that decision to either the D.C. Circuit Court of Appeals or the Second Circuit.
Millennium Pipeline's Valley Lateral Project	NY	Millennium appealed to DC Circuit the failure of NYSDEC to issue a WQC within one year after it filed an application. DC Circuit determined that the initial decision on waiver should be directed to FERC. NYSDEC deemed the WQC denied based on a flawed downstream greenhouse gas analysis in the FERC EA. FERC found that NYSDEC had waived its right to issue a WQC by failing to act within one year. NYSDEC has appealed FERC's finding of a waiver to the Second Circuit. Second Circuit issued a stay of construction. Second Circuit lifted the stay and construction has begun. Oral Argument was heard on appeal on January 24, 2018. Awaiting Second Circuit decision, which is expected by the end of summer.
Millennium Pipeline's Eastern System Upgrade Project	NY	NYSDEC issued the WQC for the project. Environmental opponents appealed issuance of WQC and related permits to Second Circuit. On January 9, 2018, Second Circuit denied a requested stay of construction. The Second Circuit has not yet set a briefing schedule for the case, so there is no schedule for a decision.