Army Corps on Hot Seat over Changes to Pipeline Approvals

Pipeline & Gas Journal - for the original article go HERE.

With the arrival of the Biden administration and the ascension of environmental concerns to provide a spike in political pressure, the Army Corps of Engineers (USACE) may have to rethink its proposed changes to the nationwide permits (NWPs) it issues for all sorts of dredge and fill construction activities around wetlands, including gas and water pipelines.   

The Corps’ proposal last September was in response to a Trump presidential directive requiring federal agencies to review existing regulations that potentially burden the development or use of domestically produced energy resources.  

The proposed changes have created an unusual political dynamic with both pipelines and environmental groups, usually on opposing sides in these matters, opposed to the changes. Only electric utilities support trifurcating NWP 12 into three parts, one for oil and gas pipelines, one for electric and telecommunications pipelines and another for water pipelines.   

But the broad opposition to the proposal may make it difficult for the Corps to issue a final rule prior to the Trump administration leaving town on Jan. 20. If it refuses to make significant changes, or even if it does, the new Congress has an option to delete any final rule within a certain timeframe after a new administration takes office. There is, too, always the option of a legal challenge to any final rule.  

“This is an invitation for litigation, as recently occurred with NWP 12, creating uncertainty and delays for the many industries that rely on the NWP program,” stated Holly C. Pearen, senior attorney, ecosystems, Environmental Defense Fund.  

One of the major changes the Corps proposed was to NWP 12, which pipelines use extensively when doing construction that causes minimal damage to the environment in and around wetlands.   

That construction ranges from large pipeline expansions, maintenance, inspection and repair activities to comply with pipeline integrity requirements and for modernization projects, such as replacing pipeline facilities with newer, more efficient facilities and installing alternative power sources to reduce greenhouse gas emissions from compressor stations.   

The Corps estimates that approximately 47,750 NWP 12 activities could be authorized over the next five years.  

Regarding NWP 12, the Corps proposes two changes. First, it would keep NWP 12 for oil and gas pipelines only and establish an NWP C and NWP D. The NWP C would be for electric utility lines and telecommunication lines, and NWP D for utility lines that convey water and other substances.   

In addition, preconstruction notification (PCN) requirements, which determine if an NWP 12 application for a Clean Water Act permit needs an extra level of review from the Corps district in which the project would take place, would be changed. Five current PCNs would be eliminated, two retained and, most importantly perhaps, a new one added for pipelines over 250 miles (402 km).  

There is a total of 52 NWPs, and they were last issued in 2017 and are in effect until 2022. The Corps wants to “trifurcate” NWP 12 because the overwhelming number of applications are for oil and gas pipeline projects.   

The Corps explained it was subdividing NWP 12 to “… address the differences in how different linear projects are constructed, the substances they convey, and the different standards and best management practices that help ensure those NWPs authorize only those activities that have no more than minimal adverse environmental effects.”  

While the Trump executive order theoretically dictated deregulatory changes, the Interstate Natural Gas Association of America (INGAA) and the American Petroleum Institute (API) both think the NWP 12 changes go in the opposite direction.  

Amy Emmert, senior policy advisor, API, complains, “Proposing three NWPs for the same types of utility line activities when one NWP has been sufficient is the antithesis of streamlining and the USACE’s rationale related to the “potential” need for industry-specific national terms rings hollow, especially when there are ample opportunities available for tailoring activities at regional or case-specific level.”   

With regard to the threat of “best management practices,” which the Corps hopes to impose on oil and gas NWP 12 applications, Steven Kramer, senior vice president, general counsel and corporate secretary, Association of Oil Pipelines (AOPL), argues, “There are no additional best management practices that could be practically or lawfully imposed via NWP 12. Indeed, creating and imposing any such requirements would risk conflict with or redundancy with the many other applicable conditions.”   

Joan Dreskin, senior vice president and general counsel at INGAA, argues pipeline, utility and water pipeline construction are very similar so there is really no reason to have separate and distinct NWP programs for each.   

In fact, the requirements that would be applicable to NWP 12, C and D “are nearly the same,” Dreskin said. “The record does not include, for example, a comparison of the dredge and fill impacts of constructing a 12-inch natural gas pipeline versus the dredge and fill impacts of constructing a 12-inch water pipeline,” she adds.   

Jim Murphy, legal advocacy director, the National Wildlife Federation (NWF), stated, “The use of NWP 12 to authorize massive oil and gas pipelines known to have significant adverse cumulative adverse impacts on aquatic resources violates … the CWA, and the Corps should eliminate NWP 12 authorizations and require individual permits for such pipelines.”  

Jimmy Hague, senior water policy advisor, The Nature Conservancy, argues that if the Corps establishes a mileage threshold in NWP 12, it should be no greater than 25 miles (40 km), not the 250 miles the Corps has proposed.   

The Corps would mandate three PCNs for NWP 12 in which (1) a Rivers and Harbors Act permit is required; (2) the discharge will result in the loss of greater than 1/10th acre of Waters of the United States (WOTUS); or (3) the proposed oil or natural gas pipeline activity is associated with an overall project that is greater than 250 miles in length and the project purpose is to install new pipeline along the majority of the distance of the overall project length.

Author bio:
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.

Getting an Exclusion From Steel, Aluminum Tariffs Just Got Harder

The Fabricator - for the original article go HERE. 

President Joe Biden is unlikely to quickly eliminate steel and aluminum tariffs imposed by former President Donald Trump, particularly because the U.S. Department of Commerce has theoretically given the Biden administration new breathing room in the form of its latest changes to the exclusion process. Many manufacturers argue that they should not be subject to the tariffs because the steel or aluminum they need is not available from U.S. manufacturers, and they use this exclusion process as they seek relief.

U.S. metal manufacturers have complained loudly about that exclusion process since Trump imposed the 25% tariff on steel and the 10% tariff on aluminum in 2018. They cite the time it takes for the Commerce Department to either approve or disapprove an exclusion application and the favor that the agency has appeared to show U.S. steel manufacturers in objecting to those exclusion requests.

But metal manufacturing companies will view the mid-December interim final rule as mostly thin gruel. On the positive side, the Commerce Department established general approved exclusions (GAEs), categories of specific steel and aluminum products that had been reviewed as part of exclusion requests and did not receive any objections. As a result, products found within these GAEs are exempt from the import tariffs, and the product manufacturers do not need to apply for exclusion requests. This change is expected to result in an estimated immediate decrease of 5,000 exclusion requests annually. The Commerce Department reported the possibility of adding more GAEs in the future. Unlike individual exclusion requests, GAEs do not include quantity limits.

Two separate supplements exist for GAEs—one for steel and another for aluminum. The rule added 108 GAEs for steel articles and 15 GAEs for aluminum articles. The two new supplements specified that, to use a GAE, the importer must reference the GAE identifier in the Automated Commercial Environment system that corresponds to the steel or aluminum articles being imported. Agency officials said that the manufacturing community should expect no retroactive relief for GAEs.

The Commerce Department, in consultation with the other agencies referenced in the new supplements, will determine what steel or aluminum articles warrant being included in a GAE. The public will not be involved in requesting new or revised GAEs, but the Commerce Department will use the information provided in exclusion requests to inform its review process for what additional GAEs should be added or what revisions should be made to existing GAEs.

While the new GAEs are a positive development for steel product manufacturers, steel and aluminum producers have their own reasons to be excited about a couple of changes that accompany the new GAEs. In fact, these new developments far outweigh anything being done for the steel users.

The Commerce Department added a new certification requirement for exclusion volumes requested. In the past, applicants for exclusion only had to estimate the total quantity of metal that they needed. Because some administration officials had concerns that some applicants might have exaggerated their raw material requirements, manufacturers seeking relief from the tariffs now have to attest that they have a purchase order for the imported products or that they intend to process the imported metal within the next 12 months. The applicants also must attest that the imported metal is not being used solely as a hedge against current market prices. Without documentation to justify these assertions, a manufacturer will have its exclusion request deemed incomplete and rejected.

In addition, steel and aluminum producers are getting a bit of breathing room when supplying steel to manufacturers that otherwise would be relying on imported sources. In the past, if a company such as U.S. Steel, for example, argued against a particular exclusion request, it had to be able to supply the domestically produced steel “immediately,” which the Commerce Department defined as within six to eight weeks. But a foreign steel producer that objected had no time limit. Now the term “immediately” is retained, but language has been modified to apply the same time standard to U.S. objectors, giving them more “wiggle room.”

Paul Nathanson, executive director, Coalition of American Metal Manufacturers and Users, said the new certification requirement “will make it even more difficult for manufacturers seeking an exclusion for a steel product.” He pointed out that there is no parallel requirement for suppliers to certify they can make the product.

“The rule also sets users up for more denials of exclusions requests by removing the eight-week reasonable delivery time period domestic producers had to meet prior to this change,” he adds.

The Biden Commerce Department will probably issue future regulatory fixes to the exclusion process, but Nathanson argued, “No changes to the exclusion process can adequately address the steel shortages and price spikes that are hurting steel- and aluminum-using manufacturers who are already confronting severe economic challenges caused by the COVID pandemic. Instead of ‘fixing’ the exclusion process, the Biden Administration should terminate the Section 232 steel and aluminum tariffs as quickly possible because of the damage they are inflicting on U.S. manufacturers.”

Author bio:
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.