President Donald Trump's initiatives to accelerate energy and infrastructure projects could be undermined by an Environmental Protection Agency (EPA) veto authority that permits the agency to block projects even after permits have been issued. This authority stems from Section 404(c) of the Clean Water Act, which allows the EPA to prohibit or restrict the dumping of dredged or fill material if it determines such disposal would cause "unacceptable adverse effects."
The statute does not specify a time limit for this authority, allowing for both preemptive and retroactive vetoes. An example of its retroactive application occurred in 2011 when the EPA used the provision to block disposal sites for Mingo Logan Coal Co.'s Spruce No. 1 mine in West Virginia, four years after the Army Corps of Engineers had granted a permit. A federal appeals court upheld the EPA's decision in that dispute.
Groups advocating for regulatory reform express concern that this broad authority could deter investment in energy projects. Myron Ebell, a senior advisor to the Fix the EPA Veto Coalition, stated that the statute empowers the EPA to veto or revoke permits even after they have been issued by the Army Corps of Engineers, potentially placing projects under construction at risk in future administrations.
"The environmental movement and the climate movement groups are focused on anything related to fossil fuels, and so any project that is likely to become controversial and political that they can make — that these groups can make politically controversial — would then seem to me to be, have the threat of a veto, and that would, I think, that would just drive away investors and companies from all these projects," Ebell said.
The coalition, comprising several state energy business associations, is seeking legislative changes to the law and is urging the Trump administration to implement an EPA rule restricting the circumstances under which the agency can exercise its veto authority. Ebell suggested that implementing such constraints, while not a permanent solution as a future administration could reverse the rule, would require time.
Legislative efforts to address the issue have progressed to some extent. In December, the House passed the PERMIT Act, which would limit the EPA's use of its Section 404(c) veto power to the period after a complete permit application is submitted and before the permit is issued. However, this bill has stalled in the Senate Environment and Public Works Committee.
Daren Bakst, director of the Competitive Enterprise Institute's Center for Energy and Environment, emphasized that congressional action would offer the most robust protection but also recommended that the administration explore options within existing law. He suggested that an executive order from Trump could highlight the issue and encourage the EPA to pursue a lasting administrative solution, while also signaling to lawmakers the need to address the Section 404(c) provision in broader permitting legislation.
Bakst noted that it remains legally uncertain whether the EPA could completely prohibit retroactive vetoes through regulation but indicated that the agency could impose constraints. These could include requiring officials to consider the costs incurred by permit holders and their reliance on previously issued permits.
Jason Hayes, a senior research fellow for energy, climate and environment at The Heritage Foundation, stated that while the EPA should retain some authority to halt projects with genuinely unacceptable environmental risks, the current scope of Section 404(c) is excessively broad. He highlighted that the agency possesses an open-ended veto authority, enabling it to halt projects before permit applications are filed, during review, or after approval and commencement of work.
The U.S. Chamber of Commerce echoed these concerns in a June letter, urging the EPA, the Council on Environmental Quality, and the Army Corps to adopt a rule preventing the EPA from vetoing a Section 404 permit after its issuance.
"The ability to undo or preemptively block permitted projects undermines confidence in the permitting system and can chill investment even where projects have complied with established requirements," Marty Durbin, senior vice president of policy and president of the Global Energy Institute at the U.S. Chamber of Commerce, wrote.
Although the Mingo Logan case represents the EPA's sole retroactive veto of an issued permit, Bakst warned that the authority continues to pose a threat to future projects. "If you can't even rely on a permit that you've already gotten, then I mean, we've got a serious problem," Bakst concluded.