Unlock Act Could Reshape Section 401 Pipeline Permitting

Originally published for customers May 15, 2026.

What’s the issue?

Senator McCormick’s (R-PA) proposed Unlock American Energy and Jobs Act of 2026 would significantly restructure Clean Water Act Section 401 permitting and judicial review timelines.

Why does it matter?

Section 401 certification remains one of the largest sources of execution risk for interstate gas pipelines, particularly where state review timelines and litigation outlast commercial certainty.

What’s our view?

This proposal is legally complex, but may also be the strongest and highest impact permitting reform effort Congress has advanced in the five years it has been wrestling to meaningfully solve a big bi-partisan problem.

Senator McCormick’s (R-PA) proposed Unlock American Energy and Jobs Act of 2026 would significantly restructure Clean Water Act (CWA) Section 401 permitting and judicial review timelines. Section 401 certification remains one of the largest sources of execution risk for interstate gas pipelines, particularly where state review timelines and litigation outlast commercial certainty. This proposal is legally complex, but may also be the strongest and highest impact permitting reform effort Congress has advanced in the five years it has been wrestling to meaningfully solve a big bi-partisan problem.

The bill takes a broad approach to CWA and NEPA reform. For our purposes, we are focusing only on the CWA 401 components, because the issues addressed have been difficult to solve. The bill targets three recurring issues that have shaped some of the most consequential pipeline disputes of the last decade:

1. Coerced application withdrawals and resubmittals,
2. Arbitrary application denials, and
3. Litigation delay

We evaluated the potential impact of this legislative language with data through the lens of how Constitution Pipeline (Constitution), the Northeast Supply Enhancement Project (NESE), and Mountain Valley Pipeline (MVP) could have unfolded if this proposed framework was the law of the land at the time those projects reached Final Investment Decisions. We selected these projects because they exemplify one or more of the aforementioned issues.

Section 401 Withdrawal-and-Resubmittal Delays

Under CWA 401, certifying authorities must act on applications within one year or face waiver of their certification authority. In practice, states avoided authority waivers by pressuring applicants to withdraw and resubmit applications before the deadline expired to avoid outright denial — effectively restarting the review clock.

Constitution Pipeline represents one of the clearest examples of this dynamic. Constitution first applied for a CWA 401 certification with New York on August 22, 2013. The project then withdrew and resubmitted its application twice before New York ultimately denied the application in April 2016. Roughly two years were spent trapped in procedural limbo before the project even reached a final denial.

That broader practice was significantly constrained by the Supreme Court’s Hoopa Valley Tribe v. FERC (Hoopa), rendered on January 25, 2019. The Court held that withdrawal-and-resubmittal agreements could not indefinitely circumvent the Clean Water Act’s one-year deadline.

This decision immediately reshaped Constitution-related litigation by leading FERC to reverse its earlier position — that NYDEC did not waive its CWA 401 authority — and conclude that such authority was waived because it failed to act within the one-year statutory period.

The bill would largely codify Hoopa, deepening its durability beyond just case law precedent. It also goes further by explicitly prohibiting “pausing or tolling for any reason” and limiting certifying authorities to four actions:

• Grant,
• Grant with conditions,
• Deny, or
• Waive certification authority.

Had this law existed during Constitution’s review, New York would have been forced to either deny or approve the project within the initial one-year review period rather than repeatedly resetting the clock. That distinction matters because delay itself often becomes the outcome. By the time projects reach a final denial, commercial support, shipper commitments, financing assumptions, and political conditions may have already shifted.

Below, we show Constitution’s application timeline as it was and as it could have been under a strict one-year time-to-decision, assuming the most optimistic approval scenario, in which it would have taken just under two years less.

How the Bill Could Limit Section 401 Denials

The bill’s most legally complex and technical provision involves application denials themselves.

Today, courts generally review Section 401 denials under the Administrative Procedure Act’s “arbitrary and capricious” standard. At a high level, courts ask whether the agency reasonably explained its decision based on the administrative record before it. This proposed new law would add a heightened evidentiary requirement allowing denials only where a certifying authority determines, based on “clear and convincing evidence,” that no reasonable permit condition or project modification could avoid violating water quality standards.

The provision would likely shift the overall structure of 401 disputes heavily toward conditional approval rather than outright denial, particularly where meaningful mitigation methods or conditions could be available.

The idea of adding the “clear and convincing” evidentiary burden of proof into the administrative law setting has been heavily debated in permitting reform circles and could become the subject of future litigation and regulatory interpretation if implemented. But, the broader direction of the proposal is clear: significantly constrain denial discretion while increasing pressure toward negotiated mitigation and conditional approval frameworks.

NESE provides a useful example. New York denied the project multiple times. Under this proposed standard, the state likely would have faced a substantially higher burden in demonstrating that no reasonable permit condition or project modification could avoid violating applicable water quality standards.

How the Bill Could Accelerate Pipeline Litigation

The final issue the bill attempts to address is the slow pace of litigation, which can materially impact construction timelines and create real costs for developers who contract labor, equipment, and construction windows years in advance. Even after projects obtain CWA 401 certifications, litigation can continue for years, while courts retain broad discretion over briefing schedules, argument timing, and final decisions.

The litigation over the West Virginia Section 401 certification for the Mountain Valley Pipeline Project (MVP) illustrates this issue well. West Virginia initially issued the permit on June 9, 2017, but environmental organizations later challenged the approval. West Virginia also requested a voluntary remand of their certification, which the Fourth Circuit granted. Instead of reissuing a certification, West Virginina waived their authority. Later, in 2021, MVP filed an amended application, requiring a new Section 401 certification from West Virginia, which it applied for and then received on December 30, 2021. Environmental organizations again challenged the approval, and the Fourth Circuit vacated it. But after the passing of the Fiscal Responsibility Act of 2023, West Virginia reissued its certification.

The bill attempts to compress that litigation cycle through statutory deadlines:

• 30 days to file a petition for judicial review,
• 180 days for courts to decide the petition,
• and 180 days for agencies to respond to remands.

Those deadlines could have materially compressed MVP’s litigation timeline. To determine this, we calculated the total time spent in litigation for each phase of litigation (time to petition, time to decision, and time to reissuance) across both lawsuits and then totaled those times to get the total time spent in litigation. We then compared that total to that of a hypothetical scenario in which the proposed judicial time limits had been in place. We used the shorter of either the actual time spent in litigation or the applicable time limit for each permit to get the total hypothetical time spent in each phase of litigation and then totaled those times to get the total hypothetical time spent in litigation. Had judicial time limits been in place, MVP’s litigation could have been reduced by approximately 11 months.

The proposal reflects a broader shift in permitting reform discussions. Increasingly, policymakers are treating permitting timelines and litigation timelines as part of the same infrastructure risk problem rather than separate issues.

What the Unlock Act Could Mean for Pipeline Permitting

The reforms in the Unlock Act do more than accelerate permitting timelines. They would reshape how CWA 401 denial authority itself operates by simultaneously addressing procedural delay, denial discretion, and litigation delay — three issues that have repeatedly shaped the outcome of major pipeline disputes.

Some provisions directly target historic procedural abuse, others attempt to fundamentally reshape how CWA 401 denial authority itself operates and how quickly resulting litigation proceeds. Whether it gains any steam in Congress is a separate issue, but at least the conversation is still alive. It’s an important one.

If you would like help assessing project timing, commercial exposure, or execution risk, please contact us.