Recent Developments in Water

ENVIRONMENTAL ESSENTIALS FOR IN-HOUSE COUNSEL WEBINAR SERIES RECENT DEVELOPMENTS IN WATER

Heather Palmer, Mike Weller and Sara Burgin Tuesday, February 7, 2017

RECENT DEVELOPMENTS IN WATER: REISSUANCE OF NATIONWIDE PERMITS

Heather Palmer Partner, Houston

BACKGROUND • U.S. Army Corps of Engineers (“Corps”) issues nationwide permits (“NWPs”) to authorize certain activities that require permits under Section 404 of Clean Water Act and Section 10 of River and Harbors Act of 1899 • Reissued every 5 years – current NWPs expire on 3/18/17 • Final rule reissuing 50 NWPs and issuing 2 new NWPs published on 1/6/17 • NWPs go into effect on 3/19/17 – expire on 3/18/22

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ACTIVITIES AUTHORIZED UNDER NWPS • NWPs authorize a variety of activities, including:

‒ Aids to navigation ‒ Utility line crossings ‒ Erosion control activities ‒ Road crossings ‒ Stream and wetland restoration activities ‒ Residential developments ‒ Mining activities ‒ Agricultural activities

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ACTIVITIES AUTHORIZED UNDER NWPS, CONT’D • Some NWP activities may proceed without notifying the Corps so long as those activities comply with all applicable terms and conditions of the NWPs, including regional conditions imposed by Corps division engineers • Other NWP activities cannot proceed until the project proponent submits a pre-construction notification (“PCN”) to the Corps ‒ Corps then has 45 days to notify the project proponent whether the activity is authorized by NWP

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GRANDFATHER PROVISION FOR EXPIRING NWPS • Activities completed under 2012 NWPs continue to be authorized • Activities authorized by 2012 NWPs that have commenced or are under contract to commence by 3/18/17 have one year to complete those activities (i.e., by 3/18/18) • Activities previously authorized by 2012 NWPs that have not commenced or are not under contract to commence by 3/18/17 will require reauthorization under 2017 NWPs

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CHANGES TO NWPS • In general, the Corps made few changes to existing NWPs • Changes are focused and strategic • Corps issued two new NWPs authorizing: ‒ Removal of low-head dams ‒ Construction and maintenance of living shorelines • Corps added one new general condition concerning activities affecting structures or works built by the United States ( i.e., Corps civil works projects)

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CHANGES TO NWPS, CONT’D • Corps maintained current acreage limits and PCN thresholds • Some NWPs commonly utilized by energy companies did not change, including:

‒ NWP 1 – Aids to navigation ‒ NWP 6 – Survey activities ‒ NWP 7 – Outfall structures and associated intake structures ‒ NWP 8 – Oil and gas structures on the OCS ‒ NWP 16 – Return water from upland contained disposal areas

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NWP 3 – MAINTENANCE • NWP 3 covers the repair, rehabilitation or replacement of previously authorized structures or fill • Authorizes routine pipeline maintenance projects • Modifications to NWP 3 include: ‒ Adds authorization for removal of previously authorized structures or fill ‒ Removes provision authorizing placement of new or additional riprap to

protect structure (may be authorized under NWP 13) ‒ Clarifies that use of temporary mats is authorized

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NWP 12 – UTILITY LINE CROSSINGS • NWP 12 authorizes utility line crossings • Utility lines include oil and gas pipelines • In response to proposed rule, Corps received more than 53,200 comment letters relating to NWP 12 • Environmental groups sought to: ‒ Remove oil and gas pipelines from coverage under NWP 12, or ‒ Alternatively, to require oil and gas pipelines to obtain individual permits for each waterbody crossing along the pipeline route

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REISSUANCE OF NWP 12 • NWP 12 reissued with only a few, albeit important, modifications:

‒ Clarifies that NWP 12 authorizes discharges of dredged or fill material into waters of the U.S. and structures or work in navigable waters of the U.S. for crossings of those waters associated with the construction, maintenance, repair, and removal of utility lines, including outfall and intake structures ‒ Expands definition of utility lines to include optic cables and other lines that communicate through the internet

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REISSUANCE OF NWP 12, CONT’D • Modified to authorize activities to remediate inadvertent returns of directional drilling muds • Adds a new note that confirms the Corps’ long-standing practice: “For utility line activities crossing a single waterbody more than one time at separate and distant locations, or multiple waterbodies at separate and distant locations, each crossing is considered a single and complete project for purposes of NWP authorization.”

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CONCLUSION • No executive or agency action has been taken as of 2/6/17 that would delay effective date of 2017 NWPs • Reissued and new NWPs will go into effect on 3/19/17 • Resolution of disputes over controversial “waters of the United States” rule may impact the scope of activities required to obtain a permit under Section 404 and Section 10, but will not affect the availability or applicability of 2017 NWPs

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RECENT DEVELOPMENTS IN WATER: WATER JURISDICTION IN THE TRUMP ADMINISTRATION

Michael Weller Associate, Washington, DC

WHERE DO WE STAND WITH WOTUS? • “Waters of the United States” – Finalized May 2015 ‒ EPA/Corps contend it revises regulatory definition of “waters of the United States” to be consistent legal rulings ( SWANCC/Rapanos ) ‒ Would expand federal jurisdiction by increasing the number and types of features that are “per se’ jurisdictional; and ‒ Increasing the types of features that are potentially jurisdictional, i.e., subject to “significant nexus” analysis ‒ Indirect costs: “low end” of $158 -$307 mm annually to “high end” of $237 - $465 mm annually. But…

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THE LEGAL ONSLAUGHT • Multiple lawsuits in federal district and appellate courts • Cases consolidated in the Sixth Circuit ‒ October 2015 – Issued a nationwide stay of the rule ‒ Sixth circuit has held appellate courts have jurisdiction • January 13, 2017 – SCOTUS agrees to consider whether district or appellate courts have jurisdiction • January 25, 2017 – Sixth Circuit litigation in abeyance to wait for SCOTUS decision on jurisdiction • Legal challenges still remain in district courts and other federal appellate courts

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THE TRUMP ADMINISTRATION

“I’ve proposed a moratorium on new federal regulations that are not compelled by Congress or public safety, and I will eliminate all needless and job-killing regulations now on the books. This includes eliminating some of our most intrusive regulations, like the Waters of The U.S. Rule .”

Donald J. Trump Speech at the New York Economic Club, New York, NY Sept. 15, 2016

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WHAT COULD HAPPEN NEXT WITH WOTUS? • The Trump DOJ could request a voluntary remand of the rule • If the Sixth Circuit vacates or remands the rule, the Trump EPA/Corps could simply not act or rewrite the rule • Language in the Sixth Circuit’s opinion could somewhat constrain options on remand • A rewrite will require an administrative record, notice and comment, etc.

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WHAT APPLIES IN THE MEANTIME? • “regulations will be implemented as they were prior to [the Final WOTUS Rule] by applying relevant case law, applicable policy, and the best science and technical data on a case-by-case basis in determining which waters are protected by the Clean Water Act.” EPA Statement on WOTUS Litigation • So, EPA/Corps continue to make CWA jurisdictional determinations based on the 2008 guidance ‒ “other waters” will require a case-by-case evaluation to determine if a significant nexus exists ‒ Distinction between permanent and intermittent tributaries returns ‒ Back to “adjacent wetlands” versus the broader “adjacent waters”

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RECENT DEVELOPMENTS IN WATER: NPDES PERMIT SHIELD

Sara Burgin Partner, Austin

NPDES PERMIT SHIELD • Permit shield is §402(k) of Clean Water Act (CWA)

• §402(k) generally provides that compliance with a permit issued pursuant to §402 protects the permittee from §505 citizen suit and §309 EPA enforcement unless EPA or other plaintiff proves applicant did not furnish information to permitting authority reasonably required or requested to process the application

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PERMIT SHIELD, CONT. • Ohio Valley Environmental Coalition v. FOLA Company , 4th Circuit, Jan. 4, 2017 (No. 16-1024) • Environmental group alleged violation of CWA and district court found for environmental group • Company appealed arguing that it complied with effluent limitations in permit • Provision in question is a West Virginia regulation incorporated into the defendant’s permit when the permit was reissued in 2009

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PERMIT SHIELD, CONT. • Permit provision states: ‒ The discharge or discharges covered by a WV/NPDES permit are to be of such quality so as not to cause violation of applicable water quality standards adopted by the Department of Environmental Protection, Title 47, Series 2. • The environmental group alleged violation of the provision based upon the conductivity of the discharge and a finding by the district court that FOLA’s discharge caused or materially contributed to biological impairment of the receiving water by increasing the conductivity of the stream. Court agreed with plaintiff.

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PERMIT SHIELD, CONT. • Some states with NPDES permit authority include in the NPDES permits the state issues a condition that the permitted discharge comply with state water quality standards • If you have this provision in certain of your NPDES permits, it may provide an environmental group a basis to file a citizen suit even though the facility is complying with all effluent limitations in the permit

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THANK YOU

HEATHER PALMER Partner, Houston E: heather.palmer@bracewell.com P: +1.713.221.1526

MIKE WELLER Associate, Washington, D.C. E: mike.weller@bracewell.com P: +1.202.828.5812

SARA BURGIN Partner, Austin E: sara.burgin@bracewell.com P: +1.512.494.3654

25 T E X A S | N EW Y O R K | WA S H I NG T O N , D C | C ONN E C T I C U T | S E A T T L E | DU B A I | L ONDON b r a c e w e l l . c om

This presentation is provided for informational purposes only and should not be considered specific legal advice on any subject matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. The content of this presentation contains general information and may not reflect current legal developments, verdicts or settlements. Use of and access to this presentation does not create an attorney-client relationship between you and Bracewell.

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