“The developer enters the permitting process believing that once it proves it can meet every condition imposed by the government, that it will hold the permit for a specific number of years to both complete and operate the project,” William Kovacs, vice president of the environment, technology, and regulatory affairs at the U.S. Chamber of Commerce, testified at the hearing.
Kovacs stated that it often takes several years and costs developers “millions of dollars” to get a permit, only to have it revoked, creating "great uncertainty” for developers that discourages them from pursuing new projects.
“A permit has value only as long as the administrator believes it should not be revoked,” Kovacs said, adding that "seeking a permit becomes an expensive gamble with company and stockholder assets."
Harold Quinn, the president and CEO of the National Mining Association, echoed Kovacs’ remarks, stating that permit certainty is an “essential and highly valued commodity.”
“We need to be able to rely upon the fact that the permits conditions will not change,” agreed Nick Ivanoff, senior vice chairman of the American Roads and Transportation Builders Association. He stated that developers “could lose permits through no fault of their own, but simply because EPA changes the rules in the middle of the game.”
“If EPA has its way, every permit will forever remain subject to modification and even revocation at literally any time, simply because EPA unilaterally changes its opinion of information that it has long possessed,” said Leah Pilconis, senior environmental advisor to the Associated General Contractors of America.
According to a summary by the House Committee on Transportation and Infrastructure, the Army Corps of Engineers has the authority to issue dredge-and-fill permits with EPA oversight under Section 404(c) of the Clean Water Act of 1972.
However, Patrick Parenteau, a professor at Vermont Law School, who worked as a regional counselor with the EPA for over 40 years, stated that the agency has every right to retroactively veto permits, but added that it has rarely chosen to exercise this option.
“This law [Clean Water Act] authorizes EPA to exercise this very rare, last resort, very carefully crafted authority before, during, or after the issuance of a 404 permit,” he said, adding that the EPA has only exercised its veto authority 13 times out of 2 million permit activities.
“404(c) is not broken,” Parenteau told subcommittee members. “It should be retained.”
In 2011, the EPA vetoed a 404(c) permit for Arch Coal on its Spruce Mine, located in Logan County, West Virginia. According to the Transportation Committee’s summary, Arch Coal conducted an extensive 10-year environmental review prior to receiving its permit in 2007 and had complied with all provisions of Section 404 following authorization.
In March 2012, a U.S. District judge overruled the EPA’s use of its retroactive veto, calling it “a stunning power for an agency to arrogate itself when there is absolutely no mention of it in the statute.”
But this decision was overturned in 2013 by the U.S. Court of Appeals for the District of Columbia, and the U.S. Supreme Court has declined to take up the case at this time.