October 2019 Vol. 74 No. 10

Washington Watch

EPA Proposes Limits on State Regulatory Barriers to Pipeline Construction

The Environmental Protection Agency (EPA) is moving ahead with an effort to limit the ability of states to stymie pipeline projects by either declining to issue or delaying the issuance of Clean Water Act certifications. The states and Indian tribes are required to issue those permits within one year of submission of a request by a company wanting to build a pipeline.

The certification affirms that the project will not impair water quality due to impacts on rivers, streams and ocean, mostly from unauthorized discharged caused by construction or ongoing pipeline activities. If the certification is not issued within one year, at the latest, from the time the application is submitted, the Federal Energy Regulatory Commission (FERC) is entitled to green light the project.

Over the past half-decade or so, however, states have either delayed approval of certification requests or denied them, often after taking longer than a year and for reasons other than the project negatively affecting water quality issues. The interstate pipeline industry has voiced unhappiness with state water-quality delays for years and is pleased with the EPA proposed rule.

“While the statute recognizes the distinctive roles of the federal and state governments in the environmental review process, the balance between those roles has recently been disrupted and some states have viewed Section 401 as a means of determining which interstate pipeline projects are in the public interest and which are not,” stated Don Santa, president and CEO of the Interstate Natural Gas Association of America (INGAA).

Opposition to the changes will come from state officials and environmental groups. Ben Husch, policy director, Natural Resources and Infrastructure, National Conference of State Legislatures, said, “We’ll likely be taking a position which draws concerns with the proposed restrictions on state authority.” Mark Drajem, spokesman for the Natural Resources Defense Council, calls the proposed rule “underhanded and hypocritical.”

Jon Devine, director for federal water policy at the NRDC, added, “Developers of pipelines or dams don’t want state leaders or local residents to scrutinize or restrict harmful projects – but that just demonstrates why states’ authority to do so is so important.”

Industry concerns about application delays and onerous construction conditions are at the heart of the EPA proposed rule issued in August after a year’s worth of consultation with various, interested groups – mostly state and local environmental officials and tribal representatives. The proposal would address the issue of delays beyond one year by prohibiting states and tribes from delaying action on a certification application because of the need to obtain additional information from the project sponsor, once the initial application is submitted.

New York State has used that reasoning to delay action on the Williams Companies’ Constitution Pipeline, which would carry gas to the state from Pennsylvania. New York has forced Constitution to resubmit its application twice while the Federal Energy Regulatory Commission approved the project in 2014. The pipeline is the subject of legal challenges that have prevented construction from the beginning.

Some states have used the wording in the CWA statute that refers to the ability of states to deny approval if a project violates an “appropriate requirement” of state law to incorporate non-water quality related considerations in their certification review. The proposed rule notes that states have included consideration of impacts associated with air emissions and transportation effects in their environmental impact statements, and conditions not related directly to water quality in section 401 certification approvals. These conditions include requiring construction of biking and hiking trails, requiring one-time and recurring payments to state agencies for improvements or enhancements that are unrelated to the proposed federally licensed or permitted project.

The proposed rule states: “If Congress intended section 401 of the CWA to authorize consideration or the imposition of certification conditions based on air quality concerns, public access to waters, energy policy or other multimedia or non-water quality impacts, it would have provided a clear statement to that effect. Neither the CWA nor section 401 contain any such clear statement.” Rather, according to the agency, the purpose of CWA certification is to ensure compliance with “applicable effluent limitations” and “water quality requirements.”

Senate Pipeline Bill Differs from House Bill

The Senate and House appear to be on a little bit of a collision course with regard to reauthorization of the pipeline safety program at the Pipeline and Hazardous Materials Safety Administration (PHMSA). The bills passed by key committees in each of the two houses of Congress have different provisions and share only a few provisions. The Senate Commerce, Science and Transportation Committee passed its bill called the Protecting Our Infrastructure of Pipelines Enhancing Safety (PIPES) Act of 2019 (S. 2299) on July 31, following passing of the Safer Pipelines Act of 2019 (H.R. 3432) by the House Energy & Commerce Committee, on June 26 by a voice vote.

The Senate bill is particularly mild compared to the House bill and contains few, new safety dictates on pipelines, with the exception of an amendment from Sen. Ed Markey (D-Mass.) addressessing shortcomings of distribution line safety exposed by the Merrimack Valley accident in Massachusetts in 2018. Markey’s Leonel Rondon Pipeline Safety Act requires PHMSA to promulgate regulations two years after passage of the bill to “ensure that each distribution integrity management plan developed by an operator of a distribution system includes an evaluation of the risks resulting from the presence of cast iron pipes and mains in the distribution system and the risks that could lead to or result from the operation of a low-pressure distribution system at a pressure that makes the operation of any connected and properly adjusted low-pressure gas burning equipment unsafe.” The House bill omits that provision.

The gas distribution industry has not come out for or against that provision because the Markey amendment could change as the House and Senate decide what to include in a final bill.

Otherwise, the Senate committee declined to include amendments the interstate pipeline industry would likely oppose. Attempts by Democratic senators to “toughen” the bill, by requiring methane leak detection measures from pipelines and enhanced protection for industry whistleblowers, were rejected. The committee approved the overall bill with only one dissent, from Sen. Udall (D-N.M.), the sponsor of the leak detection amendment, which he expects to push when the bill comes to the Senate floor.

One major difference between the House and Senate bills is that the latter gives the industry something it has been asking Congress for: the ability to test new safety technologies without having to go through a long, laborious approval process with PHMSA. Both natural gas and hazardous liquid lines can engage in testing on no more than 5 percent of their pipeline mileage for a maximum of four years, but not in high-population areas. Any technology would have had to be previously tested through a research and development program. If a state objected to the technology being tested, it would have to be heeded. A report on the test would be required, and if that report assures the technology works, then PHMSA can propose regulations allowing its widespread use.

The House bill, by contrast, includes a number of pipeline-industry opposed provisions, including new civil penalty authority for PHMSA; omits the Rondel bill; requires regulations for methods of assessment of transmission pipeline facilities that would be viewed more favorably than direct assessment, such as the use of internal inspection devices or pressure testing and requiring transmission pipelines to install remote or automatic shutoff valves, “as appropriate” –i.e., based on a risk assessment – in pipelines running through high-consequence areas. There is no provision endorsing pilot testing of new safety technologies. •

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