This article originally ran on Forbes.com on November 11, 2024. All rights reserved.
Daniel B. Markind is a Forbes.com energy column contributor. The views expressed in this article are not to be associated with the views of Flaster Greenberg PC.
When he assumes office again on January 20, 2025, newly reelected President Donald J. Trump can make one move regarding energy that not only will facilitate the increased availability of domestic oil and gas production but also will reduce energy costs and be otherwise good for the environment. He could void the 2023 United States Environmental Protection Agency Rule (88 Fed. Reg. 66558 [Sept. 27, 2023]), adopted during the Biden Administration, that had strengthened the role of states in issuing what are known as “Section 401 Clean Streams Certifications.”
As a replacement, Trump could propose to the Congress that it amend Section 401 of the Federal Clean Water Act to substantially limit, if not remove entirely, the present right of states and state agencies to hold up, delay, or otherwise inhibit (if not prohibit) the granting of such permits that would otherwise be within the discretion of the federal Environmental Protection Agency (EPA) or other federal agencies having appropriate jurisdiction, such as the Federal Energy Regulatory Commission (FERC).
As with many elements of interstate commerce, Congress initially decided to limit the ability of states to involve themselves in the energy development process and to pursue their parochial interests by federalizing the siting of interstate oil and gas pipelines. To that end, in 1977, it created FERC for precisely that purpose. FERC has jurisdiction over the transmission and wholesale sale of electricity, natural gas, and oil in interstate commerce – the latter two by pipelines. Designed by Congress to take interstate projects out of local politics, FERC decisions remain subject to one tiny administrative loophole left to local hands - the Section 401 Certification process.
In its amendments to the Clean Water Act, Congress allowed state agencies to issue permits under Section 401 of the Act for any pipelines within that state that traversed waters of the United States. Originally anticipated as an administrative function to ensure the safety and security of the transmissions, it soon became a political football.
That mostly was caused by former New York State Governor Andrew Cuomo. In 2016, Cuomo's Department of Environmental Conservation (DEC) was asked to provide Section 401 Certifications for a proposed new interstate pipeline known as the Constitution Pipeline, which was to be a 124-mile pipeline from the natural gas “fracking” fields of Northeast Pennsylvania to just outside of Albany, New York. From there, it was further proposed to connect with the Tennessee Pipeline that could bring the gas all the way to New England. That region was then, and still is, in need of such gas to heat homes during the long, cold New England winters, and to avoid having to import gas from overseas – as Boston had been compelled to do on several occasions in the past.
However, bowing to environmentalist lobbying, if not political opportunity, Cuomo’s DEC refused to grant the certification, and Cuomo announced that he would not grant any similar Certifications under any circumstances in the future. It was his way of “encouraging” the switch to renewable energy. However, FERC struck back, demanding that Cuomo issue the permits due to the DEC’s having taken too long to reject them, but the die was by then cast.
In 2020, both the New York DEC and the New Jersey Department of Environmental Protection refused to issue Section 401 Certifications to Williams Company to locate additional pipelines in Raritan Bay, that would have also provided easy access to natural gas from Northeast Pennsylvania to the New York City metropolitan area. Without the necessary Certifications, the project, called Northeast Supply Enhancement, fell through, leaving the most densely populated region in the country also needing to import natural gas from overseas instead of receiving it from readily available domestic sources just three hours away.
Trump has started this process before. In May 2019, then President Trump (during his first term) signed an Executive Order requiring the EPA to review the Section 401 process to limit state authority. In 2020, still under the political control of the first Trump Administration, the EPA narrowed the reasons that States could use to deny such permits. However, once the Biden Administration took over in 2021, it reversed that and increased state power all over again.
Aside from meeting the country’s regional energy needs in those places that would ideally not be left having to import gas from foreign suppliers, allowing the buildout of the fossil fuel pipeline system would, ironically, also be better for the environment. Far and away pipelines are the safest way to transport oil and gas. Despite what many in the environmental movement may claim, there is no easy, immediate transition from fossil fuels to renewable energy sources. As a result, stopping the pipeline buildout will only hurt the environment by forcing these fuels to be transported by truck or rail, each of which is far more environmentally dangerous than by pipeline.
It also strikes a blow for national security. With wars now raging in the Middle East and Ukraine and threatening to expand to other regions, and with China threatening the Philippines and Taiwan, maintaining energy security is paramount. Allowing cities like New York City and Newark, New Jersey to have guaranteed energy supply from domestic sources is hugely important internationally. Just look at Cuba and South Africa to see the impacts of energy insecurity.
While Trump has railed against what he calls the “climate hoax,” there is an existential good to doing anything more cleanly. Thus, the transition to renewable energy remains an important goal, even amid some strong opinions that overlook the evidence of climate change. President Trump now has the opportunity to strike a blow for both energy security and environmental responsibility simultaneously. Let’s see if he takes it.
ShareholderDaniel B. Markind has over 35 years of experience as an airport, real estate, energy, and corporate transactional attorney. During that time, he has represented some of the largest companies in the United States in sophisticated ...
