Originally published for customers February 5, 2025.
What’s the issue?
President Trump’s executive order declaring a national emergency directs agencies to identify emergency authorities that could accelerate energy infrastructure approvals, specifically in regions like the Northeast, where pipeline development has stalled due to permitting delays and state opposition.
Why does it matter?
If emergency authorities can speed up federal approvals, it could increase regulatory certainty and potentially revive development in the region.
What’s our view?
While the EO may reduce some federal permitting delays, it is unlikely to overcome Clean Water Act certificate denials by states like New York and New Jersey. For development to truly take root in the Northeast Clean Water Act reforms affecting state authority are required.
President Trump’s executive order (EO) declaring a national energy emergency directs agencies to identify emergency authorities that could accelerate energy infrastructure approvals, specifically in regions like the Northeast, where pipeline development has stalled due to permitting delays and state opposition. If emergency authorities can speed up federal approvals, it could increase regulatory certainty and potentially revive development in the region.
While the EO may reduce some federal permitting delays, it is unlikely to overcome Clean Water Act (CWA) certificate denials by states like New York and New Jersey. For development to truly take root in the Northeast, CWA reforms affecting state authority are required.
To gauge the potential impact of the EO on midstream projects, it is useful to assess it through the lens of a recently cancelled project in order to see a full permitting footprint and identify drivers of delay. A poignant example is the Northeast Supply Enhancement Project (NESE), which received FERC approval in 2019 but was cancelled on May 3, 2024. As shown below, the permitting process for NESE stretched over seven years, with FERC approval secured in two years but with multiple state-level rejections preventing construction. The main driver of delay was the multiple denials of CWA Section 401 water quality certifications in New York and New Jersey.
For the midstream, the most obvious place to look for emergency authority is FERC. The Commission does have emergency certificate authority under Section 7 of the Natural Gas Act, which allows the issuance of temporary certificates in cases where infrastructure is needed to:
Historically, this authority has been used after a certificate has been vacated by the courts and halting operations would lead to critical supply shortages, rather than to approve a new project facing potential permitting denials. To apply this authority to the first issuance of a certificate, FERC could theoretically push the boundaries of its emergency power by equating the EO’s identification of needed energy transportation in the Northeast as necessary to maintain adequate service in the region more generally or to serve particular customers. However, as we discussed in Permitting Reform Passed by Congress Was Upstaged by the Supreme Court, obtaining a FERC certificate is not the main issue for pipelines. Retaining a FERC certificate and keeping project financing afloat in the face of endless litigation is another story, but an emergency certificate issued in this theoretical manner would likely result in more not less litigation, and courts would almost certainly scrutinize such a move.
FERC certificates, emergency or not, also do not trump state CWA authority. While there are other major issues that delay pipeline projects, including trouble obtaining Army Corps of Engineers permits, endangered species consultation issues, problems getting necessary rights-of-way, and litigation writ large, for our purposes in this article, we focus on CWA 401.
Trump’s executive order mentions the Clean Water Act, but not Section 401 in particular. Still, his first presidency provides a likely roadmap, particularly for how “Waters of the United States” (WOTUS) are defined under the CWA and for how 401 denials are handled procedurally.
WOTUS is foundational to the CWA because it determines which water bodies fall under federal jurisdiction—and therefore, which projects require federal permits, including state-issued 401 water quality certifications. The broader the WOTUS definition, the more infrastructure projects must seek 401 certification, increasing the opportunities for states to block them.
During his first term, the Trump administration issued a rule that significantly narrowed the WOTUS definition by excluding many wetlands and seasonal streams, reducing the federal permitting footprint for pipelines and other infrastructure. This change would have weakened states' ability to use 401 as a veto point, since projects would have needed fewer 401 certifications in the first place. However, the Biden administration reversed this policy in 2023, implementing a broader WOTUS rule in response to the Supreme Court’s Sackett v. EPA decision. President Trump is expected to reinstate his narrower WOTUS definition.
The Biden WOTUS rule has already faced substantial legal challenges, with 26 states successfully blocking its implementation and as a result, it is only in effect in 24 states. Any Trump-era replacement would likely face similar litigation from environmental groups and Democratic-led states, continuing the long-running regulatory whiplash surrounding WOTUS.
Beyond WOTUS, Trump also issued a CWA 401 rule in his first term that limited states’ discretion in denying pipeline permits by:
This rule would have directly undercut New York’s denial of NESE’s 401 certification in several ways. The New York State Department of Environmental Conservation (NYSDEC) denied the permit on grounds the project failed to align with state climate goals, would increase greenhouse gas emissions, and could cause resuspension of contaminants in Raritan Bay. Under a Trump rule, climate-related justifications would not be permissible in a 401 denial. NYSDEC could only consider whether the project’s discharges would violate state water quality standards.
Additionally, the resuspension of contaminants argument would be harder to justify because Trump’s rule required states to provide clear, direct evidence linking a project’s discharge to specific water quality violations. Finally, any delay beyond one year would be considered a waiver, preventing the state from using extended review processes to effectively kill a project.
In sum, we are watching for a restoration of Trump’s first WOTUS rule and limits to state discretion over the water quality certification processes. We are also watching to see if FERC uses its emergency certificate authority in new ways, what other emergency authorities are identified by other agencies, and how they are ultimately used for specific projects. Once the agencies finish auditing their procedures and reporting back to the White House, the extent of emergency authorities will be clearer.
Because Trump’s executive order does not directly alter state-controlled CWA permitting processes, we are also on the lookout for Congressional action. Any proposal tackling this issue would need to focus on clawing back state delegated authority in the CWA. In particular, it would need to amend Section 401 limits or eliminate the states ability to drag their feet or deny permits that would otherwise fall under federal authority at FERC, the Environmental Protection Agency or other federal agencies.