President Donald Trump's initiatives to expedite energy and infrastructure projects may face challenges due to the Environmental Protection Agency's (EPA) veto authority. This authority, derived from Section 404(c) of the Clean Water Act, enables the EPA to block projects even after permits have been granted if it determines that the disposal of dredged or fill material could lead to unacceptable adverse effects. The law does not specify a time limit for this authority, allowing for both preemptive and retroactive vetoes.
The EPA's veto power has previously been exercised, notably in 2011 when it blocked disposal sites for Mingo Logan Coal Co.’s Spruce No. 1 mine in West Virginia, despite a permit being issued four years earlier. Myron Ebell, a senior advisor to the Fix the EPA Veto Coalition, expressed concerns that the broad veto authority could jeopardize projects currently under construction if future administrations choose to exercise this power.
Ebell noted that environmental and climate advocacy groups may target fossil fuel-related projects, increasing the likelihood of political controversy and potential vetoes, which could deter investment in these projects. The coalition is advocating for Congress to amend the law and is urging the Trump administration to implement an EPA rule that would limit the agency's veto authority.
In December, the House passed the PERMIT Act, which would restrict the EPA's use of its Section 404(c) veto power to instances where a complete permit application has been submitted and before a permit is issued. However, this legislation 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 the need for congressional action while also suggesting that the administration should explore what the EPA can achieve under existing laws. He proposed that an executive order from Trump could encourage the EPA to pursue a lasting administrative solution and signal to lawmakers the importance of addressing the Section 404(c) provision in broader permitting legislation.
Bakst acknowledged the legal uncertainties surrounding the EPA's ability to categorically prohibit all retroactive vetoes but suggested that the agency could impose constraints, such as considering the costs to permit holders and their reliance on previously issued permits.
Jason Hayes, a senior research fellow at The Heritage Foundation, argued that while the EPA should maintain some authority to halt projects posing significant environmental risks, the current authority under Section 404(c) is excessively broad. He advocated for a more limited scope of authority for the EPA.
The U.S. Chamber of Commerce has also called for the EPA and related agencies to pursue a rule preventing the agency from vetoing a Section 404 permit after it has been issued, citing concerns that the ability to block permitted projects undermines confidence in the permitting system and deters investment.
While the Mingo Logan case remains the only instance of a retroactive veto of an issued permit, Bakst warned that the potential for such actions could threaten future projects. He stated, 'If you can't even rely on a permit that you've already gotten, then we've got a serious problem.'