Amid considerable controversy, the U.S. EPA and Army Corps of Engineers (the agencies) issued a Final Rule on May 27, 2015, re-defining and expanding the definition of jurisdictional “waters of the U.S.” under the federal Clean Water Act. That term affects the scope of activities requiring permits under Section 402 (NPDES) and Section 404 (wetland) programs, and it affects what releases or other incidents must be reported to the federal government and states. Although the agencies claim the scope of the new rule is ‘narrower than existing regulations’ and would include ‘fewer waters’ in the jurisdictional reach of the CWA than under existing regulations, those statements are misleading, as illustrated by the maps EPA itself made available to Congress last year (under congressional pressure) to show the scope of the new “waters” definition. Congress is already preparing legislation to send the rule back to the agencies for revision, and although President Obama is expected to veto that, several trade groups from various industries are also planning to challenge the new rule in court. If the rule goes into effect, the oil and gas pipeline industry will surely be impacted, perhaps most keenly with respect to permitting for construction, maintenance and repair activities in or near “waters of the U.S.”
The new rule, which was proposed in March 2014, seizes on the “significant nexus” standard first articulated by Supreme Court Justice Anthony Kennedy in the 2001 SWANNC v. Army Corps split decision, with the Final Rule establishing eight categories of waters that arguably demonstrate a significant nexus. The first four categories are fairly well recognized: (1) traditional navigable waters; (2) interstate waters; (3) territorial seas; and (4) impoundments of jurisdictional waters. The next two categories have been controversial since the SWANNC decision, and will be even more controversial under this new rule, since the agencies consider them to be presumptively ‘jurisdictional by rule:’ (5) tributaries; and (6) ‘adjacent’ waters. The ‘adjacent’ waters category includes any isolated water that is within 100’ of the ordinary high water mark of some other jurisdictional water, or located in the 100 year flood plain (in whole or part) of any jurisdictional water, and within 1500’ of the ordinary high water mark of that water. The final two categories (7 and 8) are essentially ‘case specific’ areas, including five specific types of waters declared by the rule to have a ‘significant nexus:’ Prairie potholes, Carolina and Delmarva bays, pocosins, western vernal pools in California and Texas coastal prairie wetlands. Until this rule, all of categories 4 through 8 were essentially ‘case specific,’ with the burden on EPA or the Army Corps to establish a persuasive argument for jurisdiction.
The rule is scheduled to become effective 60 days from publication in the Federal Register, unless one of the many anticipated challenges obtains a stay on effectiveness before that time. If the rule does become final, however, it may affect pipeline operations in several ways, particularly with respect to construction, repair, replacement and even routine maintenance in or near this expanded definition of “waters of the United States.” Other impacts may include the consideration of impacts to operators’ water crossing inspection procedures. For liquid pipelines, operators may need to reexamine determinations of high consequence areas, as well as incident impact and spread release computations, under the integrity management program (IMP) regulations established by 49 C.F.R. Part 195. The rule will also likely result in an increased number of releases subject to reporting obligations for releases to waters and the need to revisit the scope and applicability of Part 194 response plans to pipeline systems.