The U.S. EPA and Army Corps of Engineers announced on March 25th a proposed rule revising the scope of waters protected under the Clean Water Act (CWA).  The proposed rule, which has not yet been published in the Federal Register, seeks to clarify the extent of federal CWA jurisdiction following the U.S. Supreme Court’s decisions in Solid Waste Agency of Northern Cook County v. U.S., and Rapanos v. United States.  These decisions resulted in considerable uncertainty within EPA, the regulated community and lower courts regarding the reach of the CWA, particularly over isolated wetlands and other non-navigable water bodies.

Under the proposed rule, all tributaries, ephemeral and intermittent streams, and adjacent waters (including wetlands) will be categorically subject to federal oversight, with no additional analysis required.  In explaining the categorical finding of jurisdiction for tributaries and adjacent waters, the agencies state that it was not based on the mere connection of a water body to downstream waters, but rather “a determination that the nexus, alone or in combination with similarly situated waters in the region, is significant based on data, science, the CWA, and caselaw.”  The proposed rule contains an overview of scientific research in support of this approach, and proposes for the first time to define the terms “neighboring,” “riparian area,” “floodplain,” “tributary,” and “significant nexus.”  The adoption of a “significant nexus” definition is notable, as that concept was central to the Supreme Court’s Rapanos decision.

In another significant proposal, “other waters,” which include prairie potholes, playa lakes, mudflats and sandflats, could be determined to be jurisdictional through a case-specific analysis showing that the water, alone or in combination with similarly situated waters (including wetlands), have a significant nexus to traditional navigable waters, interstate waters or the territorial seas.  The proposed rule requests public comment on how the agencies should conduct such case-by-case evaluations of “other waters” (including alternatives that do not include case specific analysis).  In addition, the Agencies have proposed to codify longstanding exclusions from CWA jurisdiction, including certain upland ditches, ditches that do not contribute to flow, and other largely artificial water features.

In announcing the proposed rule, EPA and the Corps maintain that the proposal does not expand jurisdiction over waters that have not historically been covered under the CWA.  Critics have responded that the proposed rule will greatly expand federal jurisdiction, particularly in the western U.S., where ephemeral waterways are prevalent.  Most pertinent to the oil and gas industry, the proposed rule could result in delays in permit approvals for pipelines that cross areas containing wetlands or “other waters,” by subjecting these activities to a case-by-case nexus analysis by EPA and the Corps.  In addition, the proposed rule could affect the scope of release reporting requirements by expanding categories of covered waters.  The proposed rule specifically retains exclusions for waste treatment systems, thus treatment ponds and lagoons may retain their regulatory status for the time being.

The proposed rule will be subject to a 90-day public comment period once published in the Federal Register, and further updates will be posted as developments occur.