Highlights:

–  The Army Corps of Engineers has paused action on certain permits that relied on Trump Administration’s Clean Water Act (CWA) Sec. 401Certification Rule after a federal court in California “vacated” the 2020 Rules last month

–  The permits that are held up include individual wetlands and dredging permits, as well as 16 Nationwide Permits, which could impact a number of pending projects

–  While we anticipate the EPA and Army Corps will issue guidance on how it will address these permit issues, we do not know when this guidance will be issued

Permit applicants who have pending applications with the U.S. Army Corps of Engineers (“Army Corps”) may have received word in the last two weeks that the Army Corps has paused finalization of any permit decisions that relied on Clean Water Act (“CWA”) section 401 certification rules (“CWA 401”) that were adopted by the Trump Administration in July 2020 and were recently vacated by a U.S. federal court.  This could include both individual permit applications, and requests to be covered by several Nationwide Permits (“NWPs”) that were issued under the now vacated CWA 401 rules.

This development could have a significant negative impact on businesses and individuals with projects that are waiting on permit approvals from the Army Corps.

Background.  The Army Corps, in conjunction with Virginia DEQ, is responsible for issuing permits for dredging projects, construction projects in the navigable waters, and development or construction in wetlands.  This includes individual permits for larger projects, or promulgation of general NWPs for comparatively smaller activities.  Generally, CWA Sec. 401 gives States the right to review and impose conditions designed to protect water quality in permit applications for projects in their States.  States also must issue 401 Certifications for the issuance of NWPs for activities occurring in their state.

The original regulations for CWA 401 reviews were promulgated in 1971.  Over the years, the CWA 401 program has faced criticism that some States excessively delay CWA 401 decisions, while other States have used the CWA 401 process to delay or kill projects through imposition of controversial conditions unrelated to water quality.

The Trump administration implemented revised but also controversial CWA 401 regulations in 2020 that restricted States’ procedural rights under CWA 401.  This rule was promptly challenged by a number of States and private groups in the U.S. District Court for the Northern District of California.   The Biden Administration, as part of its regulations review, asked the Court to remand the rule back to EPA for reconsideration, but to leave the rule in place pending its review.

On October 21, 2021, despite the Administration’s request, the Court remanded the rule and vacated it.  This has the effect of reinstating the previous 1971 CWA 401 rules.

Impacts on Permits. Through notices received via email or messages posted on some Army Corps District websites, it appears the Army Corps has paused pending permit actions that relied on the 2020 CWA 401 rules.  In addition, it appears the Corps is not processing requests for coverage under 16 NWPs promulgated using the 2020 rules, which are:

12. Oil or Natural Gas Pipeline Activities

21. Surface Coal Mining Activities

29. Residential Developments

39. Commercial and Institutional Developments

40. Agricultural Activities

42. Recreational Facilities

43. Stormwater Management Facilities

44. Mining Activities

48. Commercial Shellfish Mariculture Activities

50. Underground Coal Mining Activities

51. Land-Based Renewable Energy Generation Facilities

52. Water-Based Renewable Energy Generation Pilot Projects

55. Seaweed Mariculture Activities

56. Finfish Mariculture Activities

57. Electric Utility Line and Telecommunications Activities

58. Utility Line Activities for Water and Other Substances

The informal notices note that the Army Corps is working on guidance on how to finalize these permit decisions.  Our firm confirmed with the Norfolk District that additional guidance is in development, but no additional updates were available as of the date of this article.

This ‘pause’ could delay projects nearing the end of the permitting process and that are otherwise ‘shovel ready,’ thus driving up potential costs.  In addition, the unavailability of the NWPs has the potential to be more impactful than individual permits because significantly more projects rely on NWPs than individual permits. Any delay in issuance of permits could delay construction.

We also don’t know what impact this will have on new permit applications.  Although new applications should be able to rely on the previous 1971 CWA 401 rules, the delay in pending applications could create a backlog of permitting actions as the Corps focuses on developing and applying new guidance.

At this point, there are many unanswered questions, and our firm will continue to monitor this developing situation.