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Nick Cunningham

Nick Cunningham

Nick Cunningham is an independent journalist, covering oil and gas, energy and environmental policy, and international politics. He is based in Portland, Oregon. 

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The Tipping Point In Trump’s Quest For Energy Dominance

Trump signed two executive orders to streamline and speed up the permitting of oil and gas pipelines, a move intended to weaken states’ rights and the ability of state governments to regulate major energy projects.

To achieve Trump’s quest of “energy dominance,” the federal government “must promote efficient permitting processes and reduce regulatory uncertainties that currently make energy infrastructure projects expensive and that discourage new investment,” one of the executive orders declares. The White House billed the order was one that would clear the way for new projects that have been bogged down by regulatory uncertainty, such as the Keystone XL pipeline, and other natural gas pipelines around the country.

However, the effect of the order is uncertain. At issue is the ability of states to weigh in on oil and gas pipelines and other energy projects under the Clean Water Act. Trump is trying to weaken that authority, but he can’t simply override federal legislation that is on the books. Only Congress make such far-reaching changes.

“Although the executive order paints states and local authorities as responsible for delays in permitting, the executive order cannot change the role of the states in the Clean Water Act. The Clean Water Act is built in part on cooperative federalism between the states and the Federal government,” Fred Jauss, a partner at law firm Dorsey & Whitney, and an expert on licensing and permits, said in a statement.

The main focus is on Section 401 of the Clean Water Act, which gives states a say on permitting. “Section 401 of the Clean Water Act requires applicants for a federal permit to obtain certification from a state that the proposed project complies with state water quality standards. This gives states the ability to ‘veto’ a proposed project or impose conditions upon this issuance of the permit,” Jauss added.

Jauss said that while Trump could help speed up federal permitting, he has little sway in affecting the array of state permits that energy projects need to obtain. For instance, one of Trump’s orders targets cross-border permitting, which is clearly intended to clear the deck for the Keystone XL pipeline. While he may be able to push through federal permits more quickly by weakening the role of the State Department in cross-border permits, individual states still have authority to regulate projects.

But even Trump’s ability to ram through Keystone XL is still an open legal question.

Another pipeline project in New York is highly relevant to Trump’s new order. The Constitution Pipeline would connect Marcellus Shale gas to markets in New York and other parts of the Northeast. However, the state of New York blocked the pipeline even as the project received federal permitting years ago.

The Clean Water Act was not “intended to give a state veto power,” Dena Wiggins, president of the Natural Gas Supply Association, told Bloomberg. “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.”

Related: Smart Money Is Piling Into Oil

Separately, Washington State has blocked a coal export terminal on the West Coast, another example of a project that the Trump administration is hoping to push through.

While the executive order may not strip states of their right to veto oil and gas pipelines, it may allow the EPA to shorten the timeline that states have to make a decision. States are typically supposed to review and issue decisions on permits within one year, but the timeline can be extended if there are hiccups in the process.

On that note, EPA Administrator Andrew Wheeler said that his agency could soon issue new rules on those permitting timelines that could speed up the process. “We started working on it in advance, so we hope to have something out soon,” EPA Administrator Andrew Wheeler told Reuters.

Included in the executive order from a few days ago is another controversial proposal. Trump wants to allow natural gas to be shipped on trains in the form of LNG. The idea is that just as crude oil moved by rail when pipeline bottlenecks surfaced earlier this decade, natural gas could also move by rail to markets disconnected by infrastructure.

Obviously, given the significant number of explosions and derailments from a few years ago, the plan has raised alarm.

“It’s a disaster waiting to happen,” Emily Jeffers, a staff attorney with the Center for Biological Diversity, told Bloomberg. “You’re transporting an extraordinarily flammable and dangerous substance through highly populated areas with basically no environmental protection.”

By Nick Cunningham of Oilprice.com

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