The Environmental Protection Agency on Tuesday proposed new constraints on states’ and Native American tribes’ authority to block or impose conditions on pipelines, dams, and other major infrastructure projects through water quality reviews under Section 401 of the Clean Water Act. The proposed rule would narrow the scope of those reviews and impose strict deadlines, reversing Biden-era rules that allowed broader environmental evaluation.
The proposal advances the Trump administration’s push to speed permitting for fossil fuel infrastructure and AI data centers by reducing state and tribal regulators’ ability to delay or reject federally permitted projects on water quality grounds.
What the rule would do
Section 401 of the Clean Water Act allows states and some authorized tribes to review what effect pipelines, dams, and other federally regulated projects have on water quality within their borders. Pipelines crossing rivers, streams, and wetlands can trigger state scrutiny that has, in past cases, halted or slowed construction — including a 2017 case in which New York regulators rejected a permit for a natural gas pipeline, citing insufficient protections for hundreds of streams and wetlands.
The proposed rule would require applicants to submit clearly defined documentation, impose strict deadlines on state and tribal reviews, and require regulators to fully explain any conditions placed on a developer or any permit rejection. Critically, it would limit the scope of reviews to direct releases into federally regulated waters, pulling back a 2023 Biden administration change that allowed states to “holistically evaluate” a project’s broader impact on local water quality.
“When finalized, the proposed rule will increase transparency, efficiency and predictability for certifying authorities and the regulated community,” said Jess Kramer, EPA’s assistant administrator for water. “It will also ensure states and authorized tribes adhere to their Section 401 role.”
A recurring policy reversal
The scope of states’ Section 401 authority has shifted with each change of administration. Trump’s first term reduced it. The Biden administration restored and expanded it in 2023. The current Trump administration is again adding constraints, with a rule similar in structure to what the first term proposed.
The Supreme Court has separately narrowed the waters over which Section 401 reviews can apply. In 2023, the court’s ruling in Sackett v. EPA limited the federal government’s power to regulate millions of acres of wetlands, shrinking the footprint of federal jurisdiction that triggers state review rights.
The data center dimension
Under Administrator Lee Zeldin, the EPA has added economic goals to its traditional environmental and public health mission, including what the administration describes as restoring America’s energy dominance — shorthand for fossil fuels — and making the U.S. “the artificial intelligence capital of the world.” As demand for new data centers grows, many of those projects require state water quality permits, and Kramer said clarity in the review process is essential.
“Those projects, they need to be able to move forward with certainty,” Kramer said.
Critics dispute the premise
Moneen Nasmith, director of national climate and fossil fuel infrastructure at the nonprofit Earthjustice, rejected the administration’s framing that state and tribal regulators have exceeded their Section 401 role.
“EPA’s claims that states and tribes are overreaching are baseless,” she said. “This proposed rule is trying to solve for a problem that does not exist.”
The proposed rule is open for public comment. A final rule is expected in the spring.
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