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Army Corps Finalizes Nationwide Permit Revisions Affecting Infrastructure Development

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On January 5, 2021, the U.S. Army Corps of Engineers (“Army Corps”) released a pre-publication version of its final rule reissuing and modifying a subset of its suite of nationwide permits (“NWPs”), including those used for streamlined authorizations of utility lines affecting waters of the United States. Despite opposition from some in industry, the Army Corps pressed forward with its September 2020 proposal to split the utility line NWP into three separate permits — a new NWP 12 for oil or natural gas pipeline activities, a new NWP 57 for electric utility line and telecommunications activities, and a new NWP 58 for utility line activities for water and other substances.

In total, the final rule reissues twelve existing NWPs (most being revised to remove a 300-foot limit for losses to stream bed), issues four new NWPs (the two utility line NWPs split from NWP 12, and two new NWPs for seaweed and finfish mariculture activities), and revises the general conditions and definitions that apply to these 16 permits. The rule does not affect the other 40 existing NWPs last reissued in 2017, nor does it change the conditions or definitions that apply to them. The rule will go into effect 60 days after it is published in the Federal Register, which the Army Corps said will be in the coming weeks.

In addition to splitting NWP 12 into three permits, the Army Corps also reduced the number of conditions that would trigger an applicant’s need to submit a pre-construction notification (“PCN”) before proceeding with its activity. In addition to requiring a PCN when a protected species may be in the vicinity or when a historic property may be affected, the 2017 version of NWP 12 required a PCN in seven other circumstances. The new 2021 NWPs for the three categories of utility lines remove five of these PCN triggers as redundant. However, the 2021 NWPs add one additional PCN trigger to the oil and gas NWP, which now requires a PCN for oil and gas pipeline activities when the overall project is to install a new pipeline greater than 250 miles in length. Commenters on the proposed rule had objected that applying this PCN trigger only to oil and gas pipelines would be arbitrary because it would improperly treat oil and gas pipelines differently than other utility lines, when neither the length of a pipeline nor the substance it conveys has any necessary relationship with the potential impacts on aquatic resources. The Army Corps disagreed with these comments, claiming that long-distance electric utility lines are often constructed as overhead lines, and that lines for water and other substances are often constructed to serve local communities and would likely be shorter in overall length.

The Army Corps also rejected concerns raised by the infrastructure investment community that splitting the utility line permits would increase litigation risk and uncertainty and would make changes to an established and well-functioning NWP program that could affect investment choices and the country’s ability to continue to deliver competitively priced energy from diverse sources. The Army Corps acknowledged that the changes would come with some challenges and some opportunities, but reiterated that the new NWPs would continue to provide regulatory certainty for pipelines and other types of utility lines.

The new rule also addresses how the Army Corps has complied with the Endangered Species Act (“ESA”), which has been a focal point of attack from opponents of energy projects. For example, opponents of the Keystone XL pipeline project succeeded in obtaining a nationwide injunction against the use of NWP 12 from a federal district court in Montana, arguing that the Army Corps should have undertaken programmatic consultation under the ESA when issuing the permit in 2017. The Montana court eventually limited its injunction to new oil and gas pipelines. The Supreme Court stayed that injunction for all parties except Keystone XL, and the appeal over the merits of the Montana court’s decision is pending in the Ninth Circuit.

Accompanying the Army Corps’ finalization of the 2021 NWPs is its biological assessment, dated January 2, 2021, concluding that the rulemaking has no effect on listed species and designated critical habitat. The Army Corps noted that it is not required to seek written concurrence from the U.S. Fish and Wildlife Service or the National Marine Fisheries Service on “no effect” determinations, as stated in those agencies’ ESA Section 7 consultation handbook. The Army Corps continues its longstanding framework regarding compliance with Section 7 of the ESA, whereby the NWPs do not authorize any activity that “may affect” listed species or designated critical habitat without the Army Corps first completing activity-specific Section 7 consultation with the U.S. Fish and Wildlife Service or the National Marine Fisheries Service, as appropriate. The Army Corps also concluded that it was not required to undertake a national programmatic ESA Section 7 consultation as part of the latest NWP rulemaking — the Army Corps took the same position in issuing the 2017 NWPs, and that position is central to the dispute in the Keystone XL litigation.

As the final rule has not yet been published in the Federal Register, it does not yet have an effective date. If it is not published before the Inauguration, the Biden administration could stop publication, prevent the rule from becoming effective, and thereafter require changes to the Army Corps’ approach to permitting or even extend the deadline to correspond to the March 2022 expiration date of all other current NWPs. This would not deprive industry of the opportunity to continue to use the in-place 2017 NWPs in the interim, because they do not expire until 2022. If the rule has been published, given the outcome of the recent runoff election in Georgia, Congress and the new administration could potentially use the Congressional Review Act to overturn the final rulemaking. There is uncertainty about the effect of such an action, since doing so prohibits the agency from issuing a substantially similar rule in the future, and this may unusually constrain the Army Corps in the context of these NWPs, and NWP 12 in particular, which has been in place for many decades and reissued under administrations of both political parties. If the agency instead takes administrative action to forestall the effectiveness of the new NWPs, this time could also give the Biden administration an opening to undertake additional analysis that might reduce litigation risk on the ESA issues. The Biden administration could also attempt to trim back the availability of nationwide permits for politically disfavored types of projects.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.