Even Trump Might Struggle to Break the Pipeline Logjam in the Northeast

Tom Sharp is director of permitting intelligence at Arbo.

President Donald Trump’s executive order declaring a national energy emergency directed federal agencies to identify emergency authorities with the potential to accelerate energy infrastructure approvals, specifically in regions like the Northeast, where pipeline development has stalled due to permitting delays and state opposition.

Trump subsequently vowed to revive the canceled Constitution Pipeline, a case study in the vagaries of permitting, litigation and policy risks, which data suggest executive action alone can’t meaningfully mitigate.

The most obvious avenue for emergency authority impacting the midstream lies with the Federal Energy Regulatory Commission (FERC). Section 7 of the Natural Gas Act allows the issuance of temporary FERC Certificates in cases where a pipeline is needed to maintain adequate service or serve particular customers.

Historically, this authority has only 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 initial issuance of a certificate, FERC could theoretically push the boundaries of its emergency power by interpreting the identification of the Northeast’s pipeline shortage as a risk to adequate service in the region or service to particular customers. But in the wake of the Supreme Court’s reversal of the so-called Chevron Deference, an emergency certificate issued in this manner would result in more (not less) litigation, and courts would certainly scrutinize it.

Finally, while industry should welcome all reasonable attempts to speed approvals and increase regulatory certainty, obtaining a FERC certificate is not the main issue for pipelines. The persistent problem is twofold: the difficulty of obtaining state permits, particularly water quality certifications (WQC), required by the Clean Water Act; and litigation on a variety of required permits, including WQCs. The lengthy court battles burdening projects dramatically impact costs, schedules and, ultimately, the viability of associated business cases.

Data on delayed and canceled Northeast projects reveal a pattern of permitting and litigation challenges related to state WQCs, and support a growing consensus that reforms to the Clean Water Act are necessary to incentivize developers to reconsider opportunities in the region.

Weaponizing the Clean Water Act

Under Clean Water Act Section 401, states are delegated authority to approve or deny WQCs for federally permitted projects. This power has been used in states like New York and New Jersey to halt projects based on factors beyond direct water quality impacts, including climate policy and broader environmental concerns.

The developers of the Constitution Pipeline, Williams Cos., applied three times for a New York WQC, which was ultimately denied. After years of related legal battles, Williams stated in a financial filing that “the underlying risk-adjusted return for [the] project has diminished in such a way that further development is no longer supported”—almost eight years after pre-filing with FERC.

New York and New Jersey denied WQCs for the canceled Northeast Supply Enhancement Project (NESE). Its permitting process lasted seven years, similarly requiring three applications, before the state of New York ultimately denied the WQC.

Comparing these projects’ timelines to others that faced lesser scrutiny underscores the urgency of reform. The hypothetical timeline reflects a modeled scenario based on FERC project data, which forecasts receipt of a WCQ within one year, less resultant litigation, and adds a hypothetical construction period for a pipeline of its size.

Both projects fell victim to a common regulatory scheme that allowed New York and New Jersey to endlessly delay WQC decisions: if the one-year statutory deadline was approaching, and the state was not ready to make a decision, it would often ask the developer to withdraw and resubmit the application.

This was the subject of Hoopa Valley Tribe v. FERC. In 2019, the D.C. Circuit relieved project developers by ruling that this practice did not reset the statutory clock and that states waived their Section 401 authority by failing to act within one year of the initial request. Unfortunately, it was too late for Constitution and NESE.

In 2020, Trump (during his first term) enacted NEPA reforms that solidified this one-year timeline and also limited the scope of state review to water quality impacts directly from discharge, rather than the entire project.

Additionally, the Trump administration narrowed the definition of “Waters of the United States” (WOTUS) to exclude many wetlands and seasonal streams, reducing the federal permitting footprint for pipelines and other infrastructure. This change would have slightly weakened states’ ability to use 401 to block projects, since projects would potentially need fewer certifications.

However, the Biden administration reversed most of these policies in 2023, with the exception of the statutory time limit, and implemented a broader WOTUS rule in response to the Supreme Court’s Sackett v. EPA decision.

Biden’s rule faced substantial legal challenges, and 26 states successfully blocked it. The Trump administration can be expected to reinstate a narrower WOTUS definition and again reduce the scope of review, which will likely face similar litigation from environmental groups and Democratic-led states.

Executive action limiting or expanding WOTUS rules under any administration cannot truly address the problem, and Trump’s recent emergency executive order cannot alter the CWA’s state-controlled permitting processes.

The only avenue for meaningful reform is legislation, and any impactful legislative proposal would need to limit or remove this delegated state authority. Advocates for reform have focused on two potential fixes: more significantly limiting the states’ ability to deny permits, or removing the authority from states entirely in favor of uniform federal authority at FERC, the Environmental Protection Agency or another federal agency.

Plausible options for legislative reform

Congress has considered multiple proposed CWA Section 401 reforms, though none have been enacted. These proposals aim to eliminate repeated vague or politically motivated rejections, broadly falling into three categories:

• Narrowing review scope;

• Imposing strict deadlines; and

• Shifting approval authority to federal agencies.

Bills such as the Water Quality Certification Improvement Act (with versions introduced in 2019, 2021 and 2023) seek to restrict certification reviews to water quality impacts from direct discharges, rather than broader concerns like climate change. This bill aligns with the CWA’s original intent, which requires states to certify only that a project’s discharge will comply with specific federal water quality standards and prevents expansion of review criteria to unrelated environmental or policy considerations.

Some proposed legislation has sought to eliminate indefinite extensions of review time by including stricter enforcement of the one-year response deadline, as addressed by the D.C. Circuit in Hoopa Valley Tribe v. FERC.

More aggressive proposals such as the Promoting Interagency Coordination for Review of Natural Gas Pipelines Act (H.R. 1115) would transfer Section 401 review authority to FERC for gas pipelines, removing states from the process entirely.

Opposition for these proposals has reflected concerns with cooperative federalism, the GOP’s traditional support for states’ rights, and objection by states that want to retain control over their water resources.

Some proposals have also attempted to address the broader issue of opposition litigation. Last year, former Sen. Joe Manchin (D-W.Va.) and Sen. John Barrasso (R-Wyo.) proposed the bipartisan Energy Permitting Reform Act of 2024, a bill that introduced judicial reform provisions such as:

• A 150-day statute of limitations for seeking judicial review of agency actions granting or denying project authorizations;

• A requirement for courts to set expedited consideration for litigation related to these authorizations; and

• A mandate that courts set schedules with deadlines no longer than 180 days for any required agency action on remand.

These time limits could have substantially compressed project timelines that were extended by years due to various kinds of legal challenges, because individual permit authorizations from agencies other than FERC often default to the Administrative Procedure Act’s six-year statute of limitations.

Not all infrastructure is opposed equally

Gas supply constraints in the Northeast have led to an unusual dynamic in which the region must occasionally rely on LNG imports and higher-emitting fuels during peak demand. Near-term demand growth will exacerbate the issue, and most projected capacity additions are in solar and wind. Without major advances in long-duration energy storage, these sources will struggle to offset weather-driven intermittency.

For good reason, the region was singled out in Trump’s emergency executive order. But while the federal government controls LNG import/export permitting and oversees ISO-NE’s capacity market—where market rules can impact affordability by shaping resource adequacy—state procurement mandates and market dynamics ultimately drive what gets built, often requiring renewable or specific energy sources by a set date to accelerate clean energy adoption.

While projects like Constitution, Atlantic Coast Pipeline, PennEast and NESE were scrapped despite growing energy demand, the Permian, Appalachian and Gulf Coast regions have seen significant capacity expansions, enabling supply to serve demand center and export terminal demand.

Managing litigation risk

While there has been positive sentiment for gas infrastructure, uncertainty remains around permitting and timelines driven by ongoing multi-venue litigation, evolving federal and state policy, and changes to agency leadership and staffing.

With ideological alignment possible across Congress and the Supreme Court, Trump policies could bring new opportunities and challenges for energy project developers.

Meanwhile, stakeholders should remain focused on creating robust, data-driven project plans that anticipate legal challenges and extended timelines. This requires keen attention to judicial trends and evolving policy frameworks with the potential to reshape the regulatory environment.