President Trump’s intention to drastically cut the budget of the Environmental Protection Agency (EPA), and other departments and agencies, could have a major impact on the agency’s two key water infrastructure programs, the Clean Water and Drinking Water State Revolving Funds (SRFs). Early leaks of the president’s budget, parts of which were expected to be publicly released in mid-March, reported that the EPA’s grant programs, of which the SRFs are a part, would be cut by 30 percent. That would certainly be intended for fiscal year 2018, which begins Oct. 1, 2017. It might even apply to the current 2017 fiscal year, for which Congress has not finalized appropriations. The fiscal 2017 budget has been the subject of continuing resolutions which set every agency and department’s budget at fiscal 2016 levels. Those levels are: $1.39 billion for the CWSRF and $863 million for the DWSRF.
There has been a bit of good news with a report that the new EPA Administrator Scott Pruitt talked with the director of the Office of Management and Budget, former Rep. Mick Mulvaney, about ostensibly protecting the SRF funding. Pruitt is considered very friendly to White House desires to cut the EPA budget, especially where regulatory programs are concerned. But he apparently views the SRFs as important programs worthy of some degree of protection. “I am concerned about the grants that have been targeted, especially around water infrastructure, and those very important state revolving funds,” Pruitt told E&E News after Trump’s address to Congress in February.
“We kind of are in uncharted seas here,” stated Tommy Holmes, legislative director, American Water Works Association. “On the one hand, President Trump has said he wants to invest in U.S. infrastructure in a major way. On the other hand, the administration has said it wants to cut grants to states that come via EPA by 30 percent. Theoretically, that would include the annual capitalization grants for the SRFs that come to states from EPA. However, we have not seen, and cannot get details from either the Hill or the agency, on whether or not the SRFs are included in the president’s proposed budget for FY2018.”
FERC Publishes Draft Guidance For Pipeline Consultations On Indian Lands
In an apparent effort to forestall the political problems that threatened construction of the Dakota Access pipeline, the Federal Energy Regulatory Commission (FERC) has published draft guidance for interstate pipeline companies with regard to how they should communicate with Indian tribes when planning projects that could impact cultural resources on or near Indian lands. The draft is extremely detailed, starting with how pipeline operators should make contact with Indian tribes, what kind of consultations are required and what reports should be submitted, in what detail and to whom. Those consultations and reports are required under the National Historic Preservation Act (NHPA).
A spokeswoman for FERC said: “The purpose of the draft manual is to provide clarification and additional guidance. It does not alter or modify the existing FERC policy and it does not require the companies to conduct additional tribal outreach beyond what they are already pursuing.”
Though the Trump administration gave the Army Corps of Engineers the green light to approve the Dakota Access pipeline (DAPL) held up by the Obama administration, the issue of pipeline construction on/near Indian lands continues to reverberate politically, and not just at FERC. The House Energy Subcommittee held a hearing on Feb. 15, in which Chad Harrison, councilman at-large, Standing Rock Sioux Tribe, reprised complaints and asked Congress to change federal law so that pipeline companies had to first obtain the consent of Indian tribes before building facilities on or near their lands. “At the very least, Congress should change the law to require that when infrastructure like this pipeline is proposed, that the tribes have the right to impose conditions on the project to protect the tribal interests and resources,” Harrison said.
Joey Mahmoud, executive vice president of Energy Transfer Partners, the builder of the DAPL, told the hearing that the DAPL does not cross a single inch of tribal reservation or trust land. Nonetheless, the company reached out to the Standing Rock Sioux who “had no interest in discussing the project with us.” He added that the Army Corps reached out to the tribe on nine separate occasions.
“Despite these efforts, the Standing Rock declined to participate in any meaningful way,” he emphasized. Dakota Access employed dozens of cultural experts to work alongside state and tribal officials to ensure that nothing of historic significance was disturbed. Based on their findings, the project undertook 140 route changes in North Dakota alone.
FERC’s draft guidelines lay out principles companies should follow when contacting Indian tribes. This includes stating that no cultural resources field work will begin until after the project sponsor has initiated communications with consulting parties, and provided the parties with the opportunity to review and comment on project-specific research designs and survey strategies. For example, companies are warned that when contacting a tribe, the company must not “. . . state that the project sponsor ‘represents’ or is ‘delegated by’ or is writing ‘on behalf of” FERC.” If the tribe refuses to provide input, the company has to file the documentation of this response with FERC.
Pipeline Groups Fire Latest Salvo Against Underground Safety Rules
Natural gas groups upped the ante in their fight against some of the provisions in the Pipeline and Hazardous Materials Safety Administration (PHMSA) underground gas storage safety interim final rule (IFR) published in January. Expanding objections to the compliance timetable – which becomes effective in January 2018 – four trade groups proposed a revised timetable with three dates, the longest starting in eight years, which would allow companies to implement the elements of the rule in a staggered fashion. The four associations are the American Gas Association, American Petroleum Institute, American Public Gas Association and Interstate Natural Gas Association of America.
Moreover, they argue that the interim final rule converts “non-mandatory” provisions in the two API Recommended Practices that are the basis of the IFR to “mandatory” requirements, which INGAA and API describe as creating “unreasonable, not practical and often nonsensical regulatory requirements . . .”
The text of the IFR requires operators of natural gas storage facilities to implement all actions under the applicable sections of API RP 1170 and 1171 within one year of the effective date of the IFR, which was Jan. 18, 2017. Those actions include undertaking a rigorous risk assessment to establish the appropriate preventative and mitigative measures to address the unique characteristics of each underground storage facility.
The four gas associations are pressing for a three-tier compliance schedule. Within 12 months, operators must have the foundational components of a functional integrity management system, including a written framework. Within three years, a storage functional integrity management system must be in place. Within three to eight years, operators must complete underground gas storage facility risk assessments, including the baseline integrity assessments, and preventative and mitigative measures warranted by the risk assessment.
The associations argue that compliance by January 2018 with some of the provisions is impossible given the shortage of some types of equipment..