What Pipeline Companies Should Consider When Planning Projects
A Review of Sections 404 and 401 of the Clean Water Act
By John Kusnier and Rosty Caryk
For many in the oil and gas pipeline industry, having to obtain the necessary federal and state permits to impact a wetland or stream can be daunting. However, with proper planning and assistance from well-qualified experts, project costs and the time required to complete projects can be minimized. This article will provide a general overview of Section 404 and Section 401 of the Clean Water Act (CWA) and illustrate through examples what oil and gas pipeline companies should consider as they embark on their projects. Recommendations will also be provided that may minimize the frustration that some in the oil and gas pipeline industry may have experienced as they have tried to comply with these regulatory programs.
In 1972, the Federal Water Pollution Control Act of 1948 was amended in response to growing public pressure to protect our nation’s waters. These amendments, known as the Clean Water Act (CWA), provided the foundation for regulating the discharge of pollutants into waters of the U.S. Section 404 of the CWA made it unlawful for anyone to discharge pollutants of any kind from point sources into waters of the United States, unless a permit was first issued by the federal government. The ultimate responsibility for oversight of Section 404 of the CWA was given to the U.S. Environmental Protection Agency. Implementation of the program was given to the U.S. Army Corps of Engineers (USACE). From that point on, any construction project that required mechanized land clearing, or the discharge of soils, stone, concrete, pipe or other construction materials into a water of the United States required prior authorization from the USACE. Section 401 of the CWA required individual states to review and certify that the regulated activity authorized under Section 404 would not violate state water quality standards. This state mandated 401 Water Quality Certification (WQC) has resulted in nearly parallel, but separate state programs that are unique to each state, adding to the complexity of permitting.
Over the years, there has been much legal debate about what constitutes a body of water in the United States. Today, these generally include all rivers and most streams, many roadside ditches and non-isolated lakes, ponds and wetlands. Regulated streams can vary in size from small, ephemeral channels that only carry water after a rain event, to larger, perennial creeks and rivers. A cattail marsh is probably the most familiar form of wetland to most people. However, wetlands can vary greatly, from shrub dominated wetlands, to swamp forests, wet meadows and prairies, abandoned farm or storm water ponds and seep areas along hillsides, to name a few. Many wetlands can be completely dry during the summer and only show full wetland characteristics in the spring. Given the wide variety of areas that may meet the wetland criteria, it is not unusual for oil and gas pipeline projects to encounter and impact these resources.
To add to the complexity of the regulatory process, different states may have separate and independent wetland regulations that govern activities in wetlands. For example, New York regulates some wetlands under the New York State Freshwater Wetlands law, while Ohio has an Isolated Wetland law. Michigan has regulatory authority over activities in inland wetlands, lakes and streams, but the USACE regulates activities in all coastal areas. As a result, some wetland may be regulated by both state and federal statutes, others by only the federal laws, and some by only state laws (isolated wetlands). Knowing which wetlands or streams are regulated by what agency in a particular state is essential to obtaining the necessary permits to complete a project.
Knowing the Water
Under Section 404 of the CWA, all project sponsors are legally obligated to know whether regulated wetlands or streams, or other waters of the United States will be impacted by their projects. The only credible way to determine whether regulated wetlands or streams exist is to have the site delineated by someone who has the experience to accurately identify these resources. Specific procedures for delineating wetlands are described in the 1987 Corps of Engineers Wetland Delineation Manual. Recently these procedures have been augmented with Regional Supplements that take into consideration geographical differences in soils, topography, hydrologic indicators and other factors.
In most states, the USACE is responsible for reviewing the accuracy of wetland and stream delineation studies and determining whether the identified wetland, stream, lake or pond is federally regulated. Wetlands, ponds and lakes that have some surface water connection to a stream or navigable river are subject to federal regulation under Section 404 of the CWA. Wetlands, ponds and lakes that have no surface water connection to rivers and streams and some roadside ditches are generally considered isolated and are not protected under Section 404. The process by which the boundaries and the jurisdictional status of wetlands are verified is known as the Jurisdictional Determination (JD). The USACE can take several weeks to complete a JD for a site. However, an expert consultant should be able to provide a reasonable assessment of the wetland boundaries and regulatory status of a wetland or stream once they have concluded a site review or a formal delineation. The consultant should also be able to provide a reasonable evaluation of the type of permit that will be required.
Before the USACE can issue a Section 404 Permit to impact a water of the United States, the project sponsor must demonstrate that the project design will avoid wetlands where possible and minimize impacts that cannot be avoided through feasible and prudent means. Impacts that cannot be avoided must be mitigated or replaced. Mitigation almost always is required at a ratio that is higher than what was impacted.
After the USACE decides that all requirements to avoid, minimize and mitigate impacts have been met, they will issue a permit. For larger projects, the Corps will issue an Individual Section 404 Permit. Many minor impacts can be authorized under the Nationwide Permit (NWP) Program, which authorizes activities that are presumed to have minimal impacts on waters of the United States. Currently there are 46 NWPs that authorize activities such as the maintenance of existing structures (NWP 3), construction of outfall and associated intake structures (NWP 7), utility line crossings (NWP 12), linear transportation crossings (NWP 14), minor discharges (NWP 18), temporary construction access and dewatering (NWP 33) and the reshaping of existing drainage ditches (NWP 41). Each NWP has maximum thresholds for impacts to wetland and streams that may not be exceeded; otherwise the project must obtain an individual Section 404 permit and 401 Water Quality Certification. In some parts of the United States, the USACE also has adopted regional permits that can be used to authorize impacts for some activities. The entire process, from submitting the initial permit application to the issuance of the Section 404 Permit, can take anywhere from several months to a year, depending on the nature of the project and the type of permit being issued by the USACE.
The Section 404/401 permit process can become very complex for pipeline projects that traverse multiple states and USACE districts. For example, a pipeline project that runs through Michigan, Ohio and Pennsylvania may require individual JDs and Section 404 Permits from four USACE districts: Detroit, Buffalo, Huntington and Pittsburgh. Alternatively, the USACE districts may agree to have one district, typically the district where the majority of the project will occur, review one permit application for the entire project. Given that there is no set standard that has been established by the USACE for projects that cover multiple districts, it is imperative that the project sponsor coordinate with the USACE districts as soon as possible so that the Section 404 permitting process can be understood for the project. In this example, the applicant would also have to coordinate with the Ohio EPA and the Pennsylvania Department of Environmental Protection, as well as multiple district offices of the USFWS, state Departments of Natural Resources and state Historic Preservation Offices. In multiple state projects such as this, it will be desirable for the pipeline company to select a consultant or team of consultants who have experience completing delineation studies and securing JDs and Section 404/401 permits in all states where the project will occur.
Given the complexities of the federal and state programs for regulating activities in waters of the United States and isolated wetlands and streams, several recommendations can be made to help project sponsors navigate the permitting process.
First, project sponsors need to determine as early as possible whether waters of the United States and state regulated waters will be impacted by their projects. Delaying this important step can cause significant delays in the completion of the project. A competent consultant should be able to identify the wetland or other waters found on-site, determine the extent or boundaries of those waters and anticipate the federal and/or state permits required to impact those waters early in the process. Thus, part of Step No. 1 is the selection of a knowledgeable wetland consultant. Working with a consultant that has a track record of completing credible, recent water resource delineation studies in the area of your project will greatly enhance project success. Due to the significant differences in state regulations covering various waters, and even differences in interpretations of the federal regulatory process among USACE districts, an intimate knowledge of the regulatory environments that one will work in is essential. Just because a consultant has a successful track record of completing delineations and securing Section 404/401 permits in Pennsylvania or New York does not mean that they can efficiently and accurately complete similar work in Ohio or Michigan.
When vetting a potential consultant, you may want to request to review examples of recent jurisdictional determinations made by the USACE for projects that they have worked on in the USACE District that you will be working in. While the USACE is working hard to implement Section 404 of the CWA more consistently across the country, some differences still exist between Corps districts regarding how the program is interpreted. Additionally, because each state has its own water resource protection program, familiarity with the state regulatory program is essential. Having a consultant who has worked successfully on other projects in the Corps district and state will minimize the chances of project delays due to unfamiliarity with regulatory personnel and programs.
Second, project sponsors should clearly understand the specific federal and state wetland and stream permitting processes that will affect their project. This includes the anticipated permit schedule. A good consultant should alert the project sponsor if the permit may require additional studies, such as threatened and endangered (T&E) species studies that may have very restricted survey seasons. For instance, in Ohio and Indiana, bat mist net surveys can only be done from June 15 until July 30. This may clearly impact project scheduling. Archaeological studies may also be required to comply with Section 106 of the National Historic Preservation Act. The easiest method for dealing with the potential scheduling pitfalls is to incorporate the wetland permitting into a standard scheduling program, with enough detail to cover the separate permits required, all necessary studies (delineation, JD, T&E, cultural resources, final permit) with enough flexibility to cover unexpected delays. Although permit issuance cannot typically be “promised” by a certain date, a consultant should be able to provide a reasonable schedule for task completion.
Finally, a project manager should review the overall proposed project and determine if any strategies are available that may shorten the permitting process. This is especially important in linear projects, where route alternatives exist or the location or support infrastructure can be changed. Stream crossings should be evaluated to determine if tunneling or boring and jacking pipeline under the channel can be accomplished, in order to minimize stream impacts. In order to save time, a project manager may want to evaluate several alternatives at the same time to determine the best option. Working with a good consultant who can provide input on the various resulting permits and associated timing (read costs!) can make for a much smoother process.
John Kusnier is project developer and Rosty Caryk is senior project manager at Davey Resource Group, a division of the Davey Tree Expert Co., based in Kent, Ohio.