Trump May Limit State Power Over Pipelines
(Bloomberg) -- Developers have been trying for six years to build a 124-mile natural gas pipeline from Pennsylvania to New York. Despite winning a federal approval in 2014, the project is still no closer to reality.
Enter President Donald Trump, who on Wednesday is poised to issue an executive order to promote projects like the long-stalled Constitution Pipeline, according to people familiar with the matter who asked for anonymity to discuss it before a formal announcement.
The move seeks to short-circuit regulators in New York who have denied the planned pipeline a crucial permit, invoking their powers under the Clean Water Act to reject projects they deem a threat to water supplies and the environment. Other states and tribes have wielded the power to restrict a coal export terminal and hydropower project on the U.S. West Coast.
The Clean Water Act wasn’t “intended to give a state veto power,” said Dena Wiggins, president of the Natural Gas Supply Association. “The actions New York is taking not only impact New York, they are impacting the entire Northeast, because we can’t get a pipeline through the state in order to provide gas service to the Northeast.”
But New York Governor Andrew Cuomo has said that “no corporation should be allowed to endanger our natural resources,” and vowed the state “will not relent in our fight to protect our environment.”
Trump’s order, slated to be unveiled during a visit to the International Union of Operating Engineers International Training and Education Center in Crosby, Texas, comes as the president continues to chafe at regulatory barriers he says throttle the full potential of American “energy dominance,” while keeping the nation hooked on foreign gas imports.
Trump also is set to issue an executive order aimed at boosting cross-border energy infrastructure, following long delays on high-profile projects such as TransCanada Corp.’s Keystone XL oil pipeline, according to two people familiar with the matter.
The edict represents a reprise of earlier presidential memos and orders Trump issued in 2017 in a bid to hasten permitting of U.S. energy infrastructure. The order slated to be released Wednesday focuses on promoting projects with facilities or land transportation crossings at U.S. borders.
Trump’s action is unlikely to jump-start widespread construction, since it’s up to Congress -- not the president -- to restrict states’ authority under the Clean Water Act. And the initiative isn’t expected to solve legal problems thwarting several pipelines in the Mid-Atlantic U.S., which hinge on inadequate Interior Department reviews -- not formal objections from states.
Still it marks a formal push by Trump to rein in states that have emerged as a major barrier to constructing pipelines.
Even if it’s not a “silver bullet,” the pipeline order “will be construed as opening the door to overcoming these hurdles that states are throwing up,” said Christi Tezak, managing director at ClearView Energy Partners.
Trump’s pipeline order is set to direct the Environmental Protection Agency to revise its handbook for how states can use their certification power to vet projects that cross wetlands, rivers and other bodies of water.
Those Section 401 certifications -- named for a provision in the Clean Water Act -- are supposed to be approved, denied or waived by states and tribes within a year of a project application. Yet federal regulators have said the one-year clock can be restarted whenever developers submit new or revised applications for state review.
Fights over state permits have led to years-long delays and protracted federal court battles, with some analysts urging investors to consider “ elevated risk premiums” in making decisions about projects designed to cross some particularly challenging states.
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