November 2018

Government

Government

Congress to Pass Water Infrastructure Bill

Congressional passage of a water infrastructure package looks like a done deal after the House easily passed the Senate’s America’s Water Infrastructure Act of 2018 (S. 3021). The main focus of the bill is authorization of some major Army Corps of Engineers’ projects involving dams and harbors. 

The bill has been non-controversial and undoubtedly will be signed by President Trump sometime this fall. Key provisions include authorization of more than $4.4 billion over three years for the Drinking Water State Revolving Loan Fund (DWSRF) and authorization of $100 million over the next two fiscal years for areas affected by natural disasters that need help repairing their drinking water systems or hooking up to other ones to obtain potable drinking water.

The DWSRF amounts are: $1.174 billion in fiscal year 2019, $1.3 billion in fiscal year 2020, and $1.95 billion in fiscal year 2021. But funds for the DWSRF have to be appropriated every year; the foregoing figures are essentially ceilings. The appropriation for fiscal 2018 was $1.16 billion.

The bill also reauthorizes the Water Infrastructure Finance and Innovation Act (WIFIA) for another two years at $50 million a year. The WIFIA was approved by Congress in 2014 to augment the DWSRF by focusing on large water improvement programs. Funds were first appropriated to the EPA in 2017, and the agency is just now making loans under the WIFIA. 

The WIFIA’s viability going forward was threatened, according to some underground water lobbies, when the Senate included a new program called the Securing Required Funding for Water Infrastructure Now (SRF WIN) Act in the broader bill. The SRF-WIN program takes SRF funding and gives it to small communities at concessionary rates lower than regular SRF loans. 

Water groups complained this new SRF-WIN program was something of the camel’s nose under the tent and might end up eroding WIFIA funding which is just getting under way. 

The water infrastructure bill authorizes the SRF-WIN program at $5 million and only if $50 million or more is appropriated for the WIFIA program and the DWSRF gets 105% more than the year before. 

The American Water Works Association, Association of Metropolitan Water Agencies and Water Environment Federation sent a letter to the Senate last May saying: “We believe that SRF WIN Act is a fundamentally flawed proposal that, if enacted, would pose a severe threat to the future viability of the WIFIA program.  For these reasons, our organizations will withdraw our support for S. 2800 if it advances with SRF WIN provisions.” 

3021. 2800 morphed into S. 3012, that being the final water infrastructure bill, and the SRF-WIN proposal was apparently watered down enough so the three groups are supporting S. 3021.

Tommy Holmes, legislative director, American Water Works Association, says the fact SRF-WIN only received $5 million for two years makes SRF-WIN “somewhat pointless” However, he adds, “Proponents may be gambling that they can convince appropriators to not only waive the requirement that WIFIA get $50 million and the SRFs 105% of the previous year’s funding before SRF-WIN can get funded, but in addition, talk appropriators into providing more funding.”  

GOP Wants to Curb State Pipeline Construction Authority 

Republicans in Congress have initiated an effort to change some provisions in the Clean Water Act that have been used by some states to block interstate pipeline approvals. The biggest example is New York state’s refusal to grant a water quality certification under the Clean Water Act for the Constitution pipeline, which would bring Marcellus shale gas from Pennsylvania to New England, where natural gas supplies last winter were badly compromised. 

The Water Quality Certification Improvement Act of 2018 (S. 3303) was introduced in late July by Sen. John Barrasso (R-Wyo.), chairman of the Senate Environment and Public Works Committee. Hearings were held August 16. The bill amends Section 401 of the Clean Water Act to clarify these reviews are limited to water quality impacts only. States, when evaluating water quality, could only consider discharges from the federally permitted or licensed activity itself, not from other unrelated sources.

Don Santa, president and chief executive officer of the Interstate Natural Gas Association of America (INGAA), said “INGAA supports this measure to bring clarity to Section 401 of the Clean Water Act. In recent years, a handful of states have used this provision of federal law to disrupt or delay infrastructure projects, sometimes using justifications unrelated to water quality.”

The Barrasso bill will not pass in 2018; the GOP is essentially signaling its intent to pursue the issue in 2019, the success of which will depend on the makeup of the new Congress. The bill won’t be a hit among many Democrats. At the hearings, Sen. Kirsten Gillibrand (D-N.Y.), a member of the committee, said, “The bill substantially robs states of the rights they exercise under the Clean Water Act and abandons the cooperative federalism approach that has been a centerpiece of federal environmental law.”    

EPA Proposes Changes to Compressor Leaks Rule

The Environmental Protection Agency (EPA) proposed changes to its major rule on oil and gas air emissions of methane, and volatile organic chemicals (VOCs), including an easing of provisions affecting pipeline compressor stations and leak repair.

The oil and gas “New Source Performance Standards” were finalized by the Obama administration on June 3, 2016 and subsequently became the subject of petitions for reconsideration by industry players including the American Petroleum Institute (API), and then put on hold and reviewed by the Trump administration EPA in accordance with an executive order to review existing regulations that potentially burden the development of domestic energy resources.

The Sept.11 EPA proposed rule relates to specific issues for which reconsideration was granted including several revisions to the requirements for the collection of fugitive emissions components located at well sites, and the collection of fugitive emissions components located at compressor stations. It is that last change regarding compressor stations that may reduce costs for pipelines. 

In total, the EPA says its oil and gas targeted improvements package is expected to save up to $484 million in regulatory costs from 2019 to 2025, or $75 million annually.

The Interstate Natural Gas Association of America (INGAA) argued the EPA’s mandate for quarterly emissions at compressor stations was unnecessary. INGAA wants annual surveys, based on its belief that the agency’s estimates of emissions using Method 21 overestimates emissions because the data is not representative of the oil and natural gas sector.  P&GJ