Originally published for customers January 20, 2026.
What’s the issue?
Four proposed legislative and regulatory reforms have taken aim at Section 401 of the Clean Water Act (Section 401), which has functioned as an endless reset button for pipeline projects.
Why does it matter?
Keeping track of substantively overlapping legislative and regulatory proposals can be tricky. Durable change to Section 401 could impact future project viability.
What’s our view?
The proposals aim to standardize or change the CWA 401 process, narrow its scope, and tighten timing. But durability remains uncertain. Regulations can be rewritten. Bills must still become law.
Four proposed legislative and regulatory reforms have taken aim at Section 401 of the Clean Water Act (Section 401), which has functioned as an endless reset button for pipeline projects. Keeping track of substantively overlapping legislative and regulatory proposals can be tricky. Durable change to Section 401 could impact future project viability. The proposals aim to standardize or change the CWA 401 process, narrow its scope, and tighten timing. But durability remains uncertain. Regulations can be rewritten. Bills must still become law.
The endless reset button is the result of a combination of factors. Projects mired in Section 401 rarely failed because of a single decisive “no.” Applications were withdrawn, denied, revised, resubmitted, refiled, and litigated, sometimes all of the above, without the dispute getting meaningfully smaller. As time passed, the dollars ceased making “sense” with no finish line in sight.
Three main factors drive this ecosystem:
A review of three cancelled projects — Constitution, NESE, and Northern Access (2016) — sharpens the picture. Setting aside additional information requests, each project spent years wrestling with the Section 401 process and cycled through multiple rounds of submissions.
Constitution withdrew its Section 401 application and resubmitted twice before receiving a denial. Constitution then pursued waiver determination at FERC, and received it. But that victory opened the door to another round of litigation. All told, Constitution faced three separate lawsuits related to Section 401: one challenging New York’s original Section 401 denial, one challenging FERC’s initial refusal to find waiver, and one challenging FERC’s ultimate waiver determination.
Northern Access followed a different path with respect to its Section 401 application, entering an agreement with New York to extend the statutory one-year decision deadline. This ultimately still ended in denial, however. Like Constitution, Northern access pursued waiver determination, received one, and subsequently faced litigation. Northern Access likewise faced three suits: one challenging the initial denial, one challenging the revised denial, and one challenging FERC’s waiver finding.
Between New York and New Jersey, NESE resubmitted Section 401 applications six times after the original filing. That count excludes additional information requests in between.
All told, Constitution’s Section 401–related litigation spanned roughly five and a half years, from May 2016 to November 2021, and never truly concluded on the merits before the developer walked away. Northern Access spent nearly four years in litigation that ultimately upheld FERC’s waiver determination, but still ended in cancellation. From initial application to the end of litigation, Constitution spent just over eight years in the Section 401 ecosystem; Northern Access spent just over five.
Against that backdrop, two proposals at EPA and two in Congress aim to address different parts of the problem:
We will discuss these all within the context of Section 401’s historic issues, but H.R. 3668 is sufficiently distinct that it warrants special attention. Rather than refining the existing Section 401 framework, the bill would remove the stand-alone state certification requirement for natural gas pipelines entirely and place responsibility for Section 401 compliance with FERC.
Mechanically, FERC would invite relevant states to participate as cooperating agencies and propose conditions for inclusion in the certificate. But the Commission could include a state-proposed condition only after determining it is necessary to ensure compliance with enumerated provisions of the Clean Water Act, including Section 401.
As currently practiced, Section 401 can attach to state waters, interstate waters regardless of physical characteristics, ephemeral features that flow only after rain or snow, and activities that might result in a discharge. At the regulatory level, there is overlap between the WOTUS Rule and the proposed Section 401 Rule, but together they function as a two-step narrowing exercise.
Step 1: the WOTUS Rule would narrow where Section 401 applies by removing interstate waters as a standalone category and defining “relatively permanent” waters in a manner that excludes ephemeral features.
Step 2: the proposed Section 401 Rule would narrow when Section 401 applies by limiting certification to discharges from point sources.
Combined, these changes do not eliminate review. They reduce how much ground Section 401 can cover by limiting it to fewer waterbodies and fewer triggering actions.
On the legislative side, the PERMIT Act moves in the same direction by limiting Section 401 review to direct water-quality impacts from discharges. H.R. 3668 sidesteps the question entirely for pipelines by making FERC the arbiter of when and where Section 401 applies.
Broad applicability and unclear standards inevitably create uncertainty about what belongs in a Section 401 application. When content requirements are open-ended and shift over time, applicants are left guessing which “rock” the agency wants and whether the rock they bring will suddenly be deemed the wrong one.
NESE is a textbook example. Across multiple application cycles, Williams revised methodologies and mitigation plans to address evolving concerns about mercury and copper impacts. Burial depth requirements shifted. Mixing-zone assumptions changed. Each resubmittal answered one set of questions, only to surface another.
On the regulatory side, EPA’s proposed 401 rule would both add standardization to the applications and the contents of a certification decision. The latter would specifically require denials to be tied to specific water quality requirements and clear explanations as to why a project cannot comply. Combined, this would result in clearer standards and ideally fewer spurious denials.
The Permit Act takes similar steps, by specifying grant, denial, or waiver as the only options for action on a certification. H.R. 3668’s architectural shift would embed Section 401 compliance within FERC’s certificate process alongside NEPA and NGA findings. The rock still has to be brought — but FERC decides whether it fits.
The ability of states, mostly New York, to force withdrawals and resubmittals by agreement in order to sidestep the one-year decision deadline is what led to the Hoopa decision, which held that these sorts of schemes were impermissible and led to waiver determinations in Constitution and Northern Access. Those waiver determinations became the next battleground.
Each project ultimately obtained a finding from FERC that New York had waived its Section 401 authority, and each then spent years defending that determination in court. Constitution’s waiver litigation never resolved on the merits before the developer walked away. Northern Access ultimately prevailed on waiver, but only after years of delay.
The current reform proposals essentially clarify and codify Hoopa. EPA’s Section 401 rule specifically disallows withdrawal and resubmittal agreements. The PERMIT Act would harden that framework by limiting outcomes to grant, deny, or waiver. And for pipelines, H.R. 3668 would remove state certification requirements entirely.
All of these proposals happening at the same time signal momentum and the need to address longstanding issues but it is key to keep an eye on durability. The regulatory proposals can be rewritten by subsequent administrations. We’ve seen this happen repeatedly by rewrites to WOTUS and NEPA. Legislative proposals would be much more durable but still have to get through Congress. So for now, the Section 401 reset button is under pressure but has not yet been disabled. Enduring change will matter most.
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