June 6, 2022

Draft EPA Rule Would Give States Greater Ability To Delay Energy Infrastructure Projects

On June 2, the U.S. Environmental Protection Agency (EPA) proposed new rules that would give U.S. states and tribes more power under the Clean Water Act to block infrastructure projects like energy pipelines that run through their waters. Specifically, the proposed EPA regulations would establish a system by which states and tribes would work with federal agencies to establish a “reasonable period of time” to consider these projects.

A Trump administration rule had limited the timeframe for review to one year.

According to an EPA fact sheet, under the proposal a state or tribal government:

  • Would meet with federal officials to reach a deal on a timeframe for considering a project. If the two sides cannot agree on a timeframe, the state would have 60 days to decide whether to approve or block a project.
  • Could automatically extend a deadline by issuing a notice saying that it needs more time to consider the project.
  • Would enjoy an expanded the scope of factors that could be considered for blocking a project. For example, states could consider whether the “activity as a whole” could negatively impact state or tribal waters.

The EPA will take public comment on the proposed rule for 60 days beginning on the date it is published in the Federal Register. For more information on submitting written comment on the proposal or to register for the virtual public hearing on the proposed rule, see www.epa.gov/cwa-401.

As MSCI’s partners at the Energy Equipment and Infrastructure Alliance have pointed out, pipeline opponents have stopped several major new projects, mainly by challenging permits in federal court. Adding new permitting hurdles such as this proposed rule would add risk to new pipeline deals and would make operators reluctant to propose new pipeline projects.

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