    [Senate Hearing 116-145]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 116-145

    HEARING ON S. 1087, THE WATER QUALITY CERTIFICATION IMPROVEMENT ACT OF
    2019, AND OTHER POTENTIAL REFORMS TO IMPROVE IMPLEMENTATION OF SECTION
                 401 OF THE CLEAN WATER ACT: STATE PERSPECTIVES

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS

                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   ----------

                               NOVEMBER 19, 2019

                                   ----------

      Printed for the use of the Committee on Environment and Public Works

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                                            S. Hrg. 116-145

    HEARING ON S. 1087, THE WATER QUALITY CERTIFICATION IMPROVEMENT ACT OF
    2019, AND OTHER POTENTIAL REFORMS TO IMPROVE IMPLEMENTATION OF SECTION
                 401 OF THE CLEAN WATER ACT: STATE PERSPECTIVES

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS

                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               NOVEMBER 19, 2019

                                   __________

      Printed for the use of the Committee on Environment and Public Works

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                   __________

                          U.S. GOVERNMENT PUBLISHING OFFICE

    39-711 PDF                 WASHINGTON : 2020

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                        JOHN BARRASSO, Wyoming, Chairman
    JAMES M. INHOFE, Oklahoma            THOMAS R. CARPER, Delaware,
    SHELLEY MOORE CAPITO, West Virginia      Ranking Member
    KEVIN CRAMER, North Dakota           BENJAMIN L. CARDIN, Maryland
    MIKE BRAUN, Indiana                  BERNARD SANDERS, Vermont
    MIKE ROUNDS, South Dakota            SHELDON WHITEHOUSE, Rhode Island
    DAN SULLIVAN, Alaska                 JEFF MERKLEY, Oregon
    JOHN BOOZMAN, Arkansas               KIRSTEN GILLIBRAND, New York
    ROGER WICKER, Mississippi            CORY A. BOOKER, New Jersey
    RICHARD SHELBY, Alabama              EDWARD J. MARKEY, Massachusetts
    JONI ERNST, Iowa                     TAMMY DUCKWORTH, Illinois
                                         CHRIS VAN HOLLEN, Maryland

                  Richard M. Russell, Majority Staff Director
                  Mary Frances Repko, Minority Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                               NOVEMBER 19, 2019
                               OPENING STATEMENTS

    Barrasso, Hon. John, U.S. Senator from the State of Wyoming......     1
    Duckworth, Hon. Tammy, U.S. Senator from the State of Illinois...     2
    Carper, Hon. Thomas R., U.S. Senator from the State of Delaware,
      prepared statement.............................................   147

                                   WITNESSES

    Gordon, Hon. Mark, Governor, State of Wyoming....................     5
        Prepared statement...........................................     8
        Responses to additional questions from Senator Merkley.......    15
    Stitt, Hon. J. Kevin, Governor, State of Oklahoma................    19
        Prepared statement...........................................    21
        Response to an additional question from Senator Barrasso.....    25
    Watson, Laura, Senior Assistant Attorney General and Division
      Chief, Washington State Attorney General's Office..............    28
        Prepared statement...........................................    30
        Response to an additional question from:
            Senator Carper...........................................    42
            Senator Merkley..........................................    44

                              ADDITIONAL MATERIAL

    From Senator Barrasso:
        Letters:
            To Hon. Andrew R. Wheeler, Administrator, U.S.
              Environmental Protection Agency, from Senator Barrasso
              et al., October 21, 2019...............................   252
            To Hon. Andrew Wheeler, Acting Administrator, U.S.
              Environmental Protection Agency, from the State of
              Louisiana Office of the Attorney General, February 26,
              2019...................................................   275
            To Administrator Wheeler, U.S. Environmental Protection
              Agency, from Mark Gordon, Governor, State of Wyoming,
              May 24, 2019...........................................   277
            To Administrator Wheeler, U.S. Environmental Protection
              Agency, from Mark Gordon, Governor, State of Wyoming,
              October 21, 2019.......................................   280
            To Ms. Lauren Kasparek, Office of Water, U.S.
              Environmental Protection Agency, from Lighthouse
              Resources Inc., October 21, 2019.......................   285
            To Senators Barrasso and Carper, from the Portland Cement
              Association, November 19, 2019.........................   289
            To Senator Barrasso, from the Oklahoma Department of
              Environmental Quality, December 2, 2019................   291
            To Senators Barrasso and Carper, from Millennium Bulk
              Terminals, Longview, LLC, December 4, 2019.............   292
        Comments of the Environmental Defense Fund on Con Edison's
          Gas Moratorium--NYSPSC, February 13, 2019..................   296
        Case 19-G-0080. Comments of the Environmental Defense Fund,
          State of New York Public Service Commission, In the Matter
          of Staff Investigation into a Moratorium on New Natural Gas
          Services in The Consolidated Edison Company of New York,
          Inc., Service Territory, February 28, 2019.................   301
        Case 13:18-cv-05005-RJB. United States District Court,
          Western District of Washington at Tacoma. Lighthouse
          Resources, Inc.; Lighthouse Products, LLC; LHR
          Infrastructure, LLC; LHR Coal, LLC; and Millennium Bulk
          Terminals-Longview, LLC, Plaintiffs, and BNSF Railway
          Company, Plaintiff-Intervenor, vs. Jay Inslee, in his
          official capacity as Governor of the State of Washington;
          Maia Bellon, in her official capacity as Director of the
          Washington Department of Ecology; and Hilary S. Franz, in
          her official capacity as Commissioner of Public Lands,
          Defendants, and Washington Environmental Council, Columbia
          Riverkeeper, Friends of the Columbia Gorge, Climate
          Solutions, and Sierra Club, Defendant-Intervenors. Filed
          March 8, 2019..............................................   313
        Enviro group backs pipelines, POLITICO, February 19, 2019....   323
        The U.S. Is Overflowing With Natural Gas. Not Everyone Can
          Get It. The Wall Street Journal, July 8, 2019..............   325
        Cuomo's Carbon Contradiction, The Wall Street Journal,
          October 20, 2019...........................................   332
    From Senator Carper:
        Letter to Senators Barrasso and Carper, from the Association
          of Clean Water Administrators and the Association of State
          Wetland Managers, September 6, 2018........................   334
        401 Certification Survey Summary, from the Association of
          Clean Water Administrators, May 2019.......................   336
        Letter to Senators Barrasso and Carper, from the Association
          of Clean Water Administrators, November 26, 2019...........   338
        Letter to Senators Barrasso and Carper, from the American
          Sustainable Business Council et al., November 19, 2019.....   341

    HEARING ON S. 1087, THE WATER QUALITY CERTIFICATION IMPROVEMENT ACT OF
    2019, AND OTHER POTENTIAL REFORMS TO IMPROVE IMPLEMENTATION OF SECTION
                 401 OF THE CLEAN WATER ACT: STATE PERSPECTIVES

                                  ----------

                           TUESDAY, NOVEMBER 19, 2019

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:05 a.m. in
    room 406, Dirksen Senate Office Building, Hon. John Barrasso
    (Chairman of the Committee) presiding.
        Present: Senators Barrasso, Carper, Inhofe, Capito, Cramer,
    Braun, Rounds, Sullivan, Boozman, Wicker, Ernst, Cardin,
    Merkley, Gillibrand, Duckworth, and Van Hollen.

               OPENING STATEMENT OF HON. JOHN BARRASSO,
                 U.S. SENATOR FROM THE STATE OF WYOMING

        Senator Barrasso. Good morning. I call this hearing to
    order.
        We are honored to welcome the Governors of the great States
    of Wyoming and Oklahoma today to our Committee. Governor Gordon
    and Governor Stitt have joined us to discuss a dangerous trend
    preventing our Nation from reaching full energy independence.
        A group of States are holding critical energy
    infrastructure projects hostage by abusing a provision in the
    Clean Water Act. Congress created Section 401 of the Clean
    Water Act to give States a seat at the table before Federal
    permits are issued. States deserve that seat at the table. The
    majority of States carry out this role in a responsible way.
        Recently, a select group of States have weaponized Section
    401 to stop energy projects from moving forward. As the
    director of the New Jersey Sierra Club said last year,
    ``Section 401 review is probably the most effective tool we
    have to fight these projects.''
        Last year, our Committee held a hearing on this important
    issue. Many of the same projects discussed at last year's
    hearing are still being blocked. The Millennium Bulk Terminal
    Project in Washington State remains in litigation limbo. This
    important project would allow cleaner burning coal from
    Wyoming, Montana, and other western States to be exported to
    markets around the world.
        The State of Washington has refused to move forward with
    certifying the project. Washington Governor Jay Inslee denied
    the certification with prejudice, meaning the project will
    never receive State approval. Governor Inslee's denial was
    based on a claim that the project was bad for the environment.
        Well, that is just plain wrong. The Millennium Bulk
    Terminal Project would reduce emissions globally. Washington
    State is not preventing Japan and others from burning coal.
    Countries like Japan and others are going to get their coal
    from somewhere.
        Wyoming and our low sulfur coal is cleaner than coal from
    other parts of the world. Millennium Bulk is a $680 million
    project. If it had been constructed on time, the project would
    have already generated more than $12.5 billion in economic
    activity.
        The project would generate thousands of good paying jobs in
    Washington State. Local officials and labor unions strongly
    support the project, and they want to see it move forward. It
    would grow our economy and help protect our environment.
    Opposing it makes no sense, but it is what happens when policy
    decisions are made based on emotion and not fact.
        But Millennium Bulk is just one example. Since last year's
    Committee hearing, more projects have been delayed. The State
    of Oregon denied a 401 certification for a $9.8 billion
    liquefied natural gas terminal and pipeline project. This
    project would export natural gas from the western United States
    to Asia.
        New York has denied multiple natural gas pipeline
    certifications. Just like with the State of Washington, New
    York's decisions are hurting the environment. The lack of
    natural gas is causing more homes and businesses to rely on
    fuel oil, a fuel that emits 38 percent more carbon dioxide than
    natural gas. The Environmental Defense Fund recently noted, due
    to pipeline constraints, more of the dirtier fuel oils have
    been and will be burned across the Eastern Seaboard.
        As the Wall Street Journal observed recently, inadequate
    natural gas pipeline capacity leads to more pollution and
    higher energy costs for American consumers. The Journal writes,
    ``The average household that uses natural gas for heating this
    winter will spend $580 compared to $1,501 for heating oil and
    $1,162 for electricity.''
        That is why I introduced the Water Quality Certification
    Improvement Act of 2019, so that States cannot unfairly block
    energy projects. President Trump also issued an executive order
    to update the almost 50 year old regulations.
        Most States aren't abusing their Clean Water Act authority.
    States like Wyoming, Oklahoma, and others have found
    responsible ways to protect the water within their borders
    while growing their economies.
        The Governors of Wyoming and Oklahoma are here to testify
    because Section 401 reform is critical to those States.
        Thank you again for joining us today, and I would now like
    to turn to Ranking Member Duckworth for opening comments.

              OPENING STATEMENT OF HON. TAMMY DUCKWORTH,
                U.S. SENATOR FROM THE STATE OF ILLINOIS

        Senator Duckworth. Thank you, Mr. Chairman.
        Thank you again for convening this hearing, and welcome to
    all the witnesses who are here with us today.
        Water quality issues are front of mind for Illinoisans,
    because we and our neighbors are the stewards of the Nation's
    largest body of freshwater, the Great Lakes. The Clean Water
    Act is the landmark law that helps us be good caregivers. It is
    our first line of defense in ensuring the integrity of the
    Great Lakes and safeguarding the quality of the rivers,
    streams, and tributaries that feed these national treasures.
        The Great Lakes provide drinking water for tens of millions
    of Americans and support 1.5 million direct jobs. Their
    commercial, recreational, and tribal fisheries are valued at
    more than $7 billion.
        In addition to being our main source of drinking water and
    providing the region with major economic opportunity, the Great
    Lakes improve our quality of life in the Midwest. They are
    where we fish and where we swim. Weakening the Clean Water Act
    would threaten this way of life.
        That is why I strongly oppose the Trump administration's
    proposal that would degrade Section 401 of the Clean Water Act
    and gut protections for vast bodies of water that serve
    communities throughout the region. Section 401 guarantees that
    States and tribes have a voice and say in projects that require
    federally issued permits and licenses. Specifically, it rejects
    a one size fits all system by establishing a certification
    requirement that enables States and First Nation tribes to help
    optimize the conditions that must be met to secure a permit or
    license for a special project. Very reasonable.
        I recognize that developers who fail to meet the
    requirements identified by States and tribes may be frustrated
    by denials in earning Federal approval for a given project.
    However, silencing the voices and inputs of those Americans
    most directly impacted is the wrong approach, especially since
    these voices often represent the States and the tribes and the
    tribal governments that are on the front lines working to
    safeguard their water supplies.
        It is disappointing, but not surprising, that the Trump
    administration only cares about States' rights when it is to
    look the other way, allowing corporate polluters to destroy
    streams and pave over wetlands. During this hearing, we will
    hear that Section 401 leads to delays on energy projects and
    that it is abused to stop projects that are unpopular.
        However, when I asked the EPA for more information on how
    much time Section 401 adds to the permitting process, the EPA
    could not provide any information. Today's proposal would place
    highly restrictive requirements on what activities and impacts
    a State can review, as well as restrictive deadlines on the
    process. It would also give the Federal Government a veto on
    projects, and there would be no notice to downstream States for
    proposed projects.
        Many would be shocked to learn that the Clean Water Act was
    actually passed by a bipartisan majority in Congress and signed
    into law by a Republican President. However, policymakers and
    constituents of prior generations had lived through decades of
    unchecked dumping of untreated sewage, industrial waste, and
    agricultural runoff into our waters.
        We must never take for granted how, over the past 50 years,
    the Clean Water Act has reduced or eliminated pollution in our
    Nation's waterways and slowed the rate of wetlands loss.
    Congress should honor this progress by recognizing that more
    work remains to be done today, tomorrow, and in future years.
        Just last year, every beach in Illinois that was tested by
    the Environmental Protection Agency had to close for at least 1
    day, and South Shore Beach in southern Chicago was closed for
    nearly 40 days because of water contamination. My constituents
    want to swim on these beaches all summer long, and we will
    never achieve that goal by weakening the Clean Water Act.
    Simply put, healthy water means healthier families,
    communities, and economies.
        That is why I will continue fighting to preserve and
    strengthen the Clean Water Act, and always put the health and
    well being of my constituents above all other interests.
        Mr. Chairman, thank you again for holding this hearing, and
    I look forward to hearing from our witnesses.
        Senator Barrasso. Well, thank you very much, Senator
    Duckworth, for your opening statement.
        Now, we will turn to our witnesses. I am very pleased to
    introduce Governor Mark Gordon, who was sworn in as the State
    of Wyoming's 33rd Governor on January 7th of this year.
    Governor Gordon has served the people of Wyoming for years. He
    is a native of Kaycee, Wyoming, in Johnson County, grew up and
    worked on his family's ranch, became a very successful rancher
    and businessman himself.
        Prior to his election as Governor, he also served as State
    Treasurer from 2012 until this January. His leadership as State
    Treasurer resulted in improved returns on State investments,
    better protection of State savings, and increased transparency
    for the public.
        Governor Gordon's efforts to improve the State's financial
    portfolio resulted in Wyoming being ranked No. 1 in the country
    for transparency. As Governor, he is working to make Wyoming's
    government more accessible, productive, and efficient.
        Governor Gordon, we are honored that you are here
    testifying before the Committee, and I know you have much to
    share about Wyoming, our State's commitment to responsible
    energy production, and the State's strong record of
    environmental protection.
        But before we go to you--and I am looking forward to our
    continued partnership to grow Wyoming's economy--before calling
    on you, I would like to ask Senator Inhofe if he would like to
    introduce his esteemed Governor and first lady.
        Senator Inhofe. Thank you, Senator Barrasso.
        Mr. Chairman, I am proud to introduce to the Committee
    Oklahoma's First Lady, Sarah Stitt.
        Sarah, would you stand up, please?
        [Applause.]
        Senator Inhofe. With her is Governor Stitt.
        [Laughter.]
        Senator Inhofe. Governor Stitt is relatively new to the
    world of government, but he has been well known for a long time
    for his accomplishments in the State of Oklahoma. A fourth
    generation Oklahoman, Kevin spent his life as an entrepreneur,
    and founded Gateway Mortgage about 20 years ago. That has been
    a model. Under his leadership, it has gone from a small
    mortgage company to a national giant, operating in more than 40
    States with over 1,200 employees.
        Last year, Kevin was elected Governor, and his
    administration is already reforming our State. He is focused on
    all the right things, with a vision of making Oklahoma a top 10
    State in all key statistical areas, and he is well on his way
    by cutting bureaucracy, growing jobs, and improving Oklahoma's
    roads and bridges.
        I have gotten to know him well and am confident that he
    will continue to make Oklahoma proud, and I look forward to
    hearing his testimony today. He has accomplished so much in
    such a short period of time, and it shows that States are
    relevant.
        Thank you, Mr. Chairman.
        Senator Barrasso. Well, thank you very much, Senator.
        I would also like to welcome to the Committee today Laura
    Watson, who is the Senior Assistant Attorney General and
    Division Chief for the Washington State Attorney General's
    Office.
        Welcome.
        I want to remind the witnesses that your full written
    testimony will be made part of the official hearing record, so
    please try to keep your statements to 5 minutes so that we have
    time for questions. We look forward to hearing your testimony.
        Governor Gordon, would you please begin?

                    STATEMENT OF HON. MARK GORDON,
                       GOVERNOR, STATE OF WYOMING

        Mr. Gordon. Thank you, Mr. Chairman, it is a pleasure to be
    here.
        Well done, Senator Inhofe.
        Thank you also, Ranking Member Duckworth, and members of
    the Committee.
        Wyoming is blessed with an abundance of resources and has
    thus been the center of energy production and a leader in
    environmental protection. Much of our economy is in fact based
    on our ability to export energy to heat homes, light cities,
    and better lives.
        We are also home to thriving wildlife and some of the
    Nation's cleanest air and water. Wyoming is headwaters to three
    of the Nation's major rivers: the Missouri, the Colorado, and
    the Columbia. Protecting water quality within our State has
    always been important to Wyoming. We recognize the value of
    clean water and earnestly strive to protect it.
        This is done, in part, through responsible application of
    the Clean Water Act Section 401. Regrettably, a recent Clean
    Water Act Section 401 decision by Washington State imperiled
    the development of infrastructure that could expedite the way
    Powder River coal gets to overseas customers.
        In the case of Millennium Bulk Terminal in 2017, Washington
    State blocked the terminal's construction by inappropriately
    denying Section 401 certification, citing several non-water
    quality related impacts. This was a protectionist maneuver,
    based on alleged effects that are outside the scope of Section
    401. With a fanciful interpretation of Section 401 processes,
    Washington State actively prevented coal mined in Wyoming,
    Montana, Utah, and Colorado efficient access to foreign
    markets.
        The Clean Water Act, particularly Section 401, is designed
    to allow States to protect water quality within their
    boundaries. It is not a tool to erect trade barriers based on
    political or parochial whims, nor a way to preempt interstate
    commerce.
        Reform of Section 401 is not an assault on the environment,
    a means to prevent States from taking control of their own
    destiny, or a cloaked attempt at climate change denial. We
    acknowledge that CO2 concentrations in our
    atmosphere are an urgent concern for our climate and must be
    addressed effectively, while we also recognize that the world
    needs energy.
        With commitment, vision, and courage, we can take advantage
    of all our resources in a responsible manner to solve for both
    a cleaner and better world. I come to you today with a goal of
    finding solutions. We can protect water quality, build
    infrastructure responsibly, address climate change, and promote
    interstate commerce under Section 401.
        Clean Water Act Section 401 reform should be driven by
    facts and designed to minimize negative externalities and
    social cost. The Clean Water Act already provides a framework
    for this by granting broad responsibilities to States under
    Section 401 while allowing the necessary flexibility to fulfill
    their roles as co-regulators to protect our Nation's waters.
        Unfortunately, the Section 401 certification process has
    also led to inconsistent interpretation and implementation
    among States. Loopholes in Federal environmental regulations
    should not be exploited to advance peripheral agendas. Section
    401 certification decisions must be focused, efficient,
    reliable, and appropriately balance the Federal Government's
    province with State autonomy.
        Chairman Barrasso's bill, S. 1087, entitled Water Quality
    Certification Improvement Act of 2019, recommends real
    improvements to the Clean Water Act Section 401 certification
    process, while also respecting the rights of States under the
    Commerce Clause to the United States Constitution. I
    emphatically support these efforts.
        In Wyoming, our Section 401 certifications are based on
    water quality and completed within a reasonable time. That is
    usually around 60 days on average. Elsewhere, some States
    apparently have found in Section 401 of the Clean Water Act
    novel ways to block projects rather than using it correctly, as
    a regulatory framework to address attendant water quality
    concerns.
        The congressional purpose of the Clean Water Act was to
    protect and maintain water quality. However, some certifying
    authorities have interpreted Section 401 to include tangential,
    non-water quality related considerations in their review.
        In Washington, for example, the Department of Ecology
    decided to employ the State's open ended discretionary policy
    to deny the Millennium Bulk Terminal Section 401 certification.
    The department's decision was heavily skewed on non-water
    quality based impacts, ranging from greenhouse gas emissions,
    from rail noise and vibration from trains, social and community
    impacts from noise and air pollution, decreased rail safety, as
    well as tribal and cultural resource impacts.
        The inclusion of these factors is arguably superfluous to
    the original intent of the Clean Water Act. Properly, the scope
    of Section 401 review or action must directly connect to
    addressing water quality impacts from potential discharges
    associated with a proposed federally licensed or permitted
    project. The Washington Department of Ecology denial of 401
    certification for the Millennium Bulk Terminals was fickle,
    based on loose if not absent connection to impacts on water
    quality.
        Furthermore, when Washington State denied the project with
    prejudice, it precluded the terminal's opportunity to amend its
    application or ever to reapply. Evidently, Washington found
    Section 401 useful as a tool to curtail a specific project it
    found displeasing, rather than allowing the project's applicant
    the opportunity to address appropriate associated water quality
    impacts.
        The two main areas that I advocate for reform in context
    with Wyoming's experience relate to one, the scope of
    environmental reviews, and two, the basis for certification
    denials. Certification denials must have a clear and reasonable
    assertion that the project activities would, No. 1, result in
    violation or fail to conform to one or more surface water
    quality standards; two, result in an increase in pollutant
    loading to a Clean Water Act 303(d) listed water; or three,
    would not conform to applicable 401 certification conditions or
    Corps nationwide permit conditions.
        Finally, let me speak to the correct implementation of the
    Clean Water Act, cooperative federalism, and the essential
    rights of States. States must be afforded reasonable authority
    over land and water resources within their borders. Section 401
    is an essential tool granted by Congress which was intended to
    give States discretion in reviewing and conditioning 401
    certifications and to ensure concordance with both Clean Water
    Act and State surface water quality standards.
        Still, proper implementation of Section 401 of the Clean
    Water Act should line up with the original intent and also
    recognize the individual jurisdictional rights of States to
    manage their own affairs and conduct commerce. The draft Water
    Quality Certification Improvement Act of 2019, sponsored by
    Chairman Barrasso and Senators Daines, Inhofe, Capito, Enzi,
    and Cramer, offers a much needed improvement to Section 401 of
    the Clean Water Act by reducing uncertainty and limiting the
    potential for misuse.
        Rules and regulations should be squarely centered on
    purpose, in this case, water quality. They should not become an
    all of the above artifice to thwart unwelcome projects with
    prejudice.
        I appreciate your efforts to clarify Section 401
    implementation and the EPA's recent efforts to modernize its
    Section 401 guidance. Both are needed, and I look forward to
    answering your questions.
        Thank you.
        [The prepared statement of Mr. Gordon follows:]

                   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you very much, Governor Gordon.
        Governor Stitt.

                   STATEMENT OF HON. J. KEVIN STITT,
                      GOVERNOR, STATE OF OKLAHOMA

        Mr. Stitt. Chairman Barrasso, Ranking Member Duckworth, and
    senior member Senator Inhofe, thank you for inviting me to
    testify on why it has important for my State of Oklahoma to
    have clarity and certainty around Section 401 of the Clean
    Water Act.
        As you may be aware, I am 11 months into being Governor of
    the great State of Oklahoma. Less than 1 year ago, I was in the
    private sector, building a business in two of the most
    regulated sectors in the United States, banking and mortgage
    lending. I started my company from scratch and built it to over
    1,200 employees doing business in 41 States.
        I say this because I want to share that as a former CEO, I
    understand the importance of common sense regulations.
    Efficiency and certainty from State and Federal regulators
    allow a CEO to put more of his or her focus on creating jobs
    and growing the economy. Anything short of regulatory certainty
    and predictability stifles job creation, chills capital
    markets, and slows down innovation for advances that make us a
    better and stronger society.
        Today, serving as Governor of the great State of Oklahoma,
    I have had the honor and opportunity to view the regulatory
    environment from this side of the government. I can speak with
    great assurance that regulations are best left to the States as
    often as possible. We know our people, we know our geography,
    we know our economies, and we know best when innovation demands
    regulatory flexibility, and when protecting our citizens
    requires action.
        Oklahoma is a huge success story for States' rights and
    Federal partnership. I am here today to share with you why we
    must continue to strike this balance between modernizing and
    clarifying Section 401 of the Clean Water Act.
        As you all know, Oklahoma has a long and storied history of
    leadership and innovation in the production of traditional
    fossil energy. We are grateful to Senator Inhofe who has been a
    champion for our State on these issues.
        Today, Oklahoma ranks No. 3 in natural gas production. We
    rank No. 4 in oil production, and we are a leader in natural
    gas liquids that form the building blocks for the products
    Americans use every day. We are proud to be considered the
    pipeline capital of the world.
        Oklahoma is top 10 in all aspects of energy, as well as in
    the environment. We are enjoying some of the cleanest drinking
    water in our State's history.
        We have the most practical regulatory framework and some of
    the most efficient permitting review times in the country. We
    are meeting our obligations and certifying water quality
    standards within 60 days of the application, well under the 1
    year timeline proposed by the Environmental Protection Agency.
        Thanks to Oklahoma produced natural gas and the shale
    revolution, my State has also reduced emissions in
    SOx, NOx, and CO2 at more than
    double the national average. The national average for
    CO2 reduction is nearly 15 percent since 2015, while
    Oklahoma has reduced its CO2 emissions in the power
    sector by more than 37 percent, just since 2011.
        We have made major advancements in environmental quality
    while also maintaining the No. 1 ranking in cheapest
    electricity cost to the customer. As a result, Oklahoma is the
    leading generator and exporter of power in the Southwest Power
    Pool, which is our regional transmission organization. In fact,
    28 percent of the power produced in Oklahoma is sent out across
    transmission lines in the SPP, exporting Oklahoma's emission
    reducing energy to all of our neighboring States.
        Oklahoma is the epicenter of America's energy dominance,
    and we want our success to be shared with our neighbors and our
    fellow States as far north as Maine, and as far south as the
    ports in Houston, Texas. Unfortunately, the misuse of Section
    401 threatens Oklahoma's potential and the endless
    opportunities for our 4 million residents. It prevents Oklahoma
    from achieving all it can be because of a loophole within
    Section 401 that is allowing a small handful of coastal States
    to dictate the future for all the other 40 States.
        Unfortunately, this is just unacceptable. The point was
    absurdly exemplified the last winter when a Russian tanker of
    liquefied natural gas was sitting in the Boston Harbor,
    providing for the Northeast U.S. from losing its heat during
    last winter's polar vortex. Imagine what that picture
    communicates to hard working oil and natural gas employees
    around the country. Do we really want our jobs and our tax
    dollars needlessly going to Russia?
        For that purpose, I support the actions taken by EPA and
    members of this Committee to restore certainty to the Clean
    Water Act permitting and certification process under Section
    401. A clear scope and a reasonable timeline are not invasive
    to States' rights. The current proposed rule, and the
    opportunity to strengthen this legislatively does nothing to
    prevent Oklahoma's regulators from properly and scientifically
    considering whether a project negatively affects water quality
    in our State.
        It has been almost 50 years since this regulation has been
    reviewed, and I support creating a reasonable baseline for
    Clean Water Act permitting and certification of interstate
    infrastructure, whether it is transmission lines, pipelines, or
    an interstate highway, to get Oklahoma's products to the
    market.
        Once again, thank you for allowing me to be here today. I
    look forward to answering your questions.
        [The prepared statement of Mr. Stitt follows:]

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        Senator Barrasso. Thank you very much, Governor.
        Ms. Watson.

     STATEMENT OF LAURA WATSON, SENIOR ASSISTANT ATTORNEY GENERAL
     AND DIVISION CHIEF, WASHINGTON STATE ATTORNEY GENERAL'S OFFICE

        Ms. Watson. Thank you Chairman Barrasso, Ranking Member
    Duckworth, and members of the Committee.
        My name is Laura Watson. I am a Senior Assistant Attorney
    General of Washington State, and I am honored to be here today
    to talk about how important a State's role is in protecting
    against water pollution for all Americans.
        Under the Clean Water Act of 1972, Congress empowered
    States and tribes to serve as co-regulators with the Federal
    Government. This includes longstanding State authority under
    Section 401 to ensure that federally permitted activities and
    projects don't harm State waters.
        For the past 50 years, States have successfully implemented
    Section 401. For example, in the past half-century, Washington
    State has issued thousands of 401 certifications and
    approximately 30 denials. Only a few of these decisions have
    ever been appealed.
        Though States have demonstrated a fair and successful
    implementation of Section 401, today Section 401 is on the
    chopping block.
        First, EPA has proposed a rule that would seize control of
    401 decisions from States and place those decisions in the
    hands of Federal agencies. EPA's proposed rule would
    drastically narrow the scope of 401 review. It would severely
    restrict the amount of time and information that States have to
    make their decisions, and it would grant Federal agencies veto
    authority over State decisions.
        EPA's proposal crosses the legal line in many ways, which
    is why it is broadly opposed by States and tribes across the
    country and political spectrum.
        South Dakota says that the rule is a poorly disguised
    effort by the Federal Government to severely limit State and
    tribal efforts to enforce water quality standards.
        West Virginia says that the rule would undermine the
    authority originally provided to States in the Clean Water Act.
        Arkansas says that allowing the Federal Government to
    override a State decision is by no means in the spirit of
    cooperative federalism.
        Montana says that Montana's ability to protect water
    quality should not be weakened by Federal rulemaking.
        The National Congress of American Indians says that the
    proposed rule impermissibly threatens Indian tribes' right to
    self-governance, and the Upper Snake River Tribes Foundation
    calls the rule a slap in the face of tribal sovereignty.
        EPA's rule is only one concern that we face today. Senate
    Bill 1087 imposes some of the same problematic concepts in the
    rule and would further threaten to erode State rights. Both
    proposals run counter to the concept of cooperative federalism
    and the spirit and letter of the Clean Water Act, and both
    proposals would inevitably compromise clean water for families
    and communities across the Nation.
        These extreme changes being proposed are both unfounded and
    unnecessary. They appear to be based on disagreement with a few
    State decisions, including Washington State's denial of a
    Section 401 certification for a proposed coal export facility
    on the Columbia River. That decision has been improperly cited
    as an abuse of authority, so I would like to set the record
    straight.
        Washington's 401 denial was based on water quality grounds.
    Climate change and greenhouse gas considerations were in no way
    a factor in the State's denial. I understand that the denial
    decision will be made part of the record today, and you will
    see that my description of it is 100 percent accurate.
        Rather than upending five decades of cooperative federalism
    and eroding the rights of every State and tribal government
    over a single 401 decision, we urge this Committee to recognize
    the important role that States and tribes play in protecting
    water quality, and to uphold the longstanding partnership we
    share under the Clean Water Act.
        I thank you, and I look forward to your questions.
        [The prepared statement of Ms. Watson follows:]

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        Senator Barrasso. Thank you very much Ms. Watson.
        Thank you for the testimony of all of you.
        We will now start with rounds of questioning, and I would
    like to start with Governor Gordon.
        The Washington blockade of coal exports prevents millions
    of tons of Wyoming coal from reaching foreign markets. I am
    going to, without objection, enter into the record a letter in
    support of today's hearing from the National Mining
    Association.
        [The referenced information follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Governor Gordon, the Association explains
    that ``For every million tons of coal exported, an estimated
    1,320 jobs are created.'' So I would like to ask, how is
    Washington State's abuse of the certification process hurting
    Wyoming workers and harming the economy of our home State?
        Mr. Gordon. Thank you, Mr. Chairman. Washington's blockade
    has brought a certain amount of uncertainty to coal markets
    going forward unjustifiably. In Wyoming, we have seen this year
    in the coal markets, with the work that has been done
    nationwide, including Washington, several bankruptcies of
    Westmoreland Coal, Arch, Peabody, Cloud Peak, Blackjewel, with
    attendant pension challenges, healthcare challenges.
        We had 350 workers that were out of work in Gillette as of
    July 1st when Blackjewel went down. Our State has had to
    respond dramatically to that to make sure that people found new
    jobs, to work with companies to try to find a placement for
    that and also to handle some of the challenges with healthcare.
        That is not exclusive to Wyoming. The coal strip also has
    seen losses of jobs and population, and it is a dramatic loss
    to the State's revenues.
        Let me just say, too, Mr. Chairman, that we do it better.
    We have the strongest environmental laws in the world. We
    require the best working conditions in the world. The coal is
    going to be burned overseas regardless. Washington's own
    documentation indicated that, as far as global warming is
    concerned, that the work that was done to get our coal to
    market would actually reduce carbon emissions over time.
        I just want to make that point once again. We have strong
    environmental and labor conditions here. Our mining is done
    better under better reclamation standards and fully bonded, so
    I think generally speaking it is problematic to have that, what
    we have seen with the losses of jobs.
        Senator Barrasso. So the State of Washington has access to
    the coast, something that landlocked States like Wyoming do
    not. What kind of precedent does it set when States that are
    landlocked can have their lawful products blocked from being
    exported by coastal States?
        Mr. Gordon. Well, so, I think this is an issue that,
    hearing Ms. Watson's testimony where she talked about the
    erosion of rights, this goes back to the beginning of our
    country and certainly part of the Constitution. You can read in
    The Federalist 6 and 7 that talk about the various rivalries
    between States.
        What happens is when coastal States deny access to products
    that are either raised or produced in the center of the
    country, we lose our marketplace. We lose interstate commerce,
    we lose our ability to be able to have a good economy, and
    where does that all end?
        If you look whimsically at how you want to apply these
    rules, natural gas could be one of the issues. We've seen that
    at Jordan Cove. Perhaps GMO grains become displeasing, and we
    decide we are not going to ship GMO products. Lumber, perhaps
    that is another thing that could be decided against, or dairy
    products, any of these things that can be traded
    internationally.
        Mr. Chairman, I think it is about balance. That is exactly
    what your bill does. It does a very good job of balancing
    States' rights to co-manage their own affairs with those that
    have to do with the Commerce Clause of the Constitution.
        Senator Barrasso. Governor Stitt, you have a lot of
    experience with permitting gas pipelines in Oklahoma. How does
    Oklahoma protect water quality while permitting these critical
    pipelines?
        Mr. Stitt. Our DEQ certification process, we look at that
    and make sure that all of it administratively is complete. Then
    we look at all the maps, the drawings, the studies, the
    environmental impact assessments, the plans, information
    related to endangered, rare, or threatened species. Then we
    start going through the surface water and the groundwater and
    the natural resources potentially affected by any of these
    activities. Then we make sure that it meets with all the Clean
    Water Act's and then our State quality standards, and we do all
    this within 60 days.
        I would like to just share with you some of the facts that
    we are so proud of in Oklahoma. Oklahoma was No. 1 in the
    Nation in phosphorus load reduction in 2018 in our water
    bodies. Oklahoma was No. 3 in the Nation in nitrogen load
    reductions in 2018. Oklahoma is No. 1 in the Nation for non-
    point source success stories, with more water bodies de-listed
    from the impaired list than any other State.
        So we have some of the cleanest water, and yet we are the
    pipeline capital of the world, so the Diamond pipeline that
    runs just south of Tahlequah, Oklahoma, was just ranked the
    cleanest and the best tasting water in the country. We are very
    satisfied with our water quality standards and how we review
    all those 401 applications.
        Senator Barrasso. Thank you.
        Senator Duckworth.
        Senator Duckworth. Thank you, Mr. Chairman. From the
    testimony so far, you would think that this was a hearing about
    the importance of coal as an energy source, as a global energy
    source, as well as coal as a major provider of employment, and
    I could not agree with either more. Illinois is also a major
    exporter of coal, and we are also a State from the center of
    the country that must export through coastal States.
        But what this hearing is really about is about States'
    rights and tribal governments' rights to evaluate the impact of
    pollution, and really, about the EPA's proposed revision to
    Section 401. So let's focus ourselves back on the issue at
    hand.
        The EPA's proposed revision to Section 401 would narrow the
    scope of what States can evaluate in reviewing a project's
    water quality impact, and it only allows them to consider the
    direct impact of a point sources discharge on water quality.
        However, major infrastructure projects can have both direct
    and indirect effects on water quality. For instance, pipelines
    can directly degrade water quality through leaks or spills.
    They can also indirectly harm water quality through runoff and
    soil erosion during construction.
        I am very pleased to hear that Oklahoma has done a
    wonderful job of safeguarding your water sources and making
    sure that your pipelines are cleanest and safest. I would think
    that other States would like to have the ability to safeguard
    their own water sources.
        Ms. Watson, of the State agencies that commented on the
    rule, nearly 75 percent expressed serious concerns about this
    provision. Are you concerned about this narrower scope, and how
    would this impact your State's ability to protect your water
    resources?
        Ms. Watson. Absolutely, Senator, and thank you for the
    question. The rule would absolutely impact every State's
    ability to protect water resources, so in Washington, it would
    be Puget Sound and the Columbia River. In Florida, it would be
    the Everglades, and in your lovely State, it is the Great
    Lakes.
        There is no question that there would be greater water
    pollution, both as a result of the EPA rule and from Senate
    Bill 1087, because it so drastically narrows the scope of what
    can be considered.
        As Governor Stitt was talking about what Oklahoma considers
    groundwater standards and protections for endangered species,
    looking at all State water quality requirements, all of those
    things would be on the chopping block as a result of both the
    bill and the rule. States would no longer be able to fully
    protect against water pollution, and that is a big problem.
        Senator Duckworth. Thank you. The stated purpose of EPA's
    proposed rule is to increase the transparency and efficiency of
    the 401 certification process and to promote timely review of
    infrastructure projects. Yet the EPA is imposing new
    administrative burdens on States as part of this rule,
    requiring them to provide substantial amounts of new
    information, including legal citations to the EPA just to
    justify their decisions to grant certifications with
    conditions, all under a new constraint application review
    timeline.
        Ms. Watson, considering the number of 401 certification
    applications that the Washington Department of Ecology receives
    and processes each year, how do you anticipate these new
    requirements will affect the State's efficiency in processing
    applications?
        Ms. Watson. Actually, and ironically, Senator Duckworth, I
    think what would happen is that you would actually see States
    denying more 401 certifications. So, a rule that is intended to
    streamline 401 certifications is going to have the unintended
    consequence of resulting in more denials, because States can't
    make decisions without full information. Then on top of that,
    the States have to pad their decisions to convince the Federal
    agency that the decision they have made is the correct one.
        I think what you are going to find is more denials across
    the board. A lot of States raised that in their comment letters
    as well.
        Senator Duckworth. Thank you. It is proposed that the EPA
    list seven basic components that project proponents must
    provide in order to constitute a complete certification request
    and trigger review period. Do you agree that the EPA should
    constrain the amount of information the project proponents must
    provide to States?
        Ms. Watson. Absolutely not, Senator. The problem is then
    States will not have the information they need to determine
    that water pollution will not result from the Federal project,
    and the results will be unclean water, dirtier water, across
    the country for our families and our communities.
        Senator Duckworth. Thank you, and I actually want to say
    that this is really about these particular changes to this one
    rule. This is not a hearing about coal, in fact.
        I am proud that Illinois just received a grant for clean
    coal. I want America to own clean coal, carbon capture
    sequestration technology. I want to sell American coal
    overseas. This is actually about States' abilities to safeguard
    their own water supply under this one particular rule, so let's
    focus on that.
        Thank you, Ms. Watson.
        Senator Barrasso. Thank you, Senator Duckworth.
        Senator Inhofe.
        Senator Inhofe. Thank you, Mr. Chairman.
        Governor Stitt, as you said in your testimony, Oklahoma has
    been on the front lines in America's energy independence, and
    it has worked. America leads the world in oil and gas
    production, and we have done all this while reducing pollution
    and leading the world with the cleanest drinking water. You've
    already talked about that.
        Let's talk about the economic impact of energy produced in
    Oklahoma. One in five jobs are tied to oil and gas production,
    with an average salary in this industry is over $94,000.
    Governor Stitt, what would happen to Oklahoma's electricity and
    energy prices if natural gas production ceased to exist?
        Mr. Stitt. Thank you, Senator. It would be devastating to
    our economy. Our energy costs, our electricity costs to the
    consumer would more than double. We get 42 percent of our
    electricity generation from natural gas. Without natural gas to
    generate that baseload, when the winds don't blow, when the sun
    doesn't shine, we would be without power. It would be
    devastating to the electric grid.
        Twenty-eight percent of our revenue comes from the oil and
    gas industry, so countless numbers of jobs; it would just be
    devastating to our economy.
        Senator Inhofe. Let's talk about other States, how Oklahoma
    can help lower costs of other States' electricity and energy
    bills.
        Mr. Stitt. With the amount of natural gas that we have, we
    would love to be able to transport that to other States to help
    with their energy costs, their generation. Natural gas is such
    a clean burning fuel that we would love to be able to transport
    that to other States and help with their low energy costs as
    well.
        Senator Inhofe. Hopefully in the same way that it has been
    helping us for a long period of time.
        Mr. Stitt. Absolutely. I just want to tell you one other
    fact that I think is significant. Since 2011, Oklahoma has
    reduced its emissions by nearly double the national average.
    Sulfur dioxide is actually down by 56 percent, nitrogen oxide
    is down by 69 percent, carbon dioxide is down by 37 percent in
    Oklahoma, so we are definitely leading the way in our emissions
    reductions.
        Senator Inhofe. Yes, and we can't overlook the President's
    policies and how successful they have been. A lot of our
    colleagues often claim that Republicans don't care about the
    environment. It couldn't be further from the truth, as you
    pointed out.
        If you are looking at since 1970, the combined emissions of
    the six pollutants dropped by 74 percent while the economy grew
    by 275 percent. Now, this is even more astonishing when you
    look at since 2005, the U.S. energy related CO2
    emissions fell by 14 percent, while global emissions increased
    by over 20 percent. It is hardly believable.
        Is there anything that you have not spoken to already on
    what Oklahoma has done to protect water quality? Because we
    have the best that is out there.
        Mr. Stitt. I love the stats in our State, and I have
    already outlined them about the pipeline capital of the world,
    but yet the cleanest water, and the reduction. We are No. 1 in
    several categories in reducing non-point and also nitrogen into
    our water bodies. So, just excellent success stories in
    Oklahoma.
        Senator Inhofe. It really is. In fact, this morning, my
    wife was pointing out one of the bottled water things. It came
    from Tahlequah, Oklahoma.
        Anyway, we are doing a great job. Let's try to share that
    with others.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Inhofe.
        Senator Cardin.
        Senator Cardin. Well, thank you, Mr. Chairman.
        I thank all three of our witnesses for their testimony.
    This is certainly an area of great interest.
        I spent 20 years of my life in the State legislature, 8 as
    Speaker, so the ability of the States to work in partnership
    with the Federal Government, federalism to me is very, very
    essential and important to our system of government.
        So Mr. Chairman, I first ask unanimous consent to submit
    comment letters by the National Governors Association; the
    Attorneys General of the States of Washington, New York,
    California, Colorado, Connecticut, Delaware, Hawaii, Illinois,
    Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico,
    North Carolina, Oregon, Rhode Island, Vermont, Wisconsin, the
    District of Columbia, the Commonwealth of Massachusetts,
    Pennsylvania, Virginia; the Maryland Department of Environment
    and the Waterkeepers Chesapeake, and the Chesapeake Bay
    Foundation of concern about the Chairman's bill.
        Senator Barrasso. Without objection. We accept them all.
        [The referenced information follows:]

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        [The referenced comments from the Attorneys General are
    available at https://oag.ca.gov/system/files/attachments/press-
    docs/Multi-State%20Comment%20on%20WQ%20Certs.pdf]
        Senator Cardin. I appreciate the Chairman's generosity in
    allowing us to put that in the record, as he is always very
    generous in listening to all views.
        I want to follow up on Senator Duckworth's point about the
    practical effects, if we restrict the powers of the State under
    401 certifications. We just completed, in Maryland, a rather
    lengthy process in regards to the Conowingo Dam and Exelon
    Corporation. The Conowingo Dam is the second largest producer
    of electricity, hydroelectricity power on the east coast of the
    United States, a critically important power source for our
    entire region.
        But it is critical to what is happening with the quality of
    the water in the Chesapeake Bay. It is not just the immediate
    impact of what goes over the dam, but it is also the impact
    that it has on upstream and downstream.
        There was a lengthy process in negotiating with the
    different stakeholders. On October 30th, Exelon and the State
    of Maryland announced an agreement just short of the 12 month
    limitation period.
        There are pros and cons to the agreement that was reached.
    It does provide for Exelon to contribute some resources; there
    are some additional aspects in regard to how the migration of
    fish are handled, so there are some different aspects to this.
    There are a lot of stakeholders who felt that they should have
    been more aggressive, but they were able to reach an agreement,
    and it will help the Chesapeake Bay Program.
        I don't think it would have been possible to do this in a
    90 day period. Just too complicated to get done in a 90 day
    period. So, I am just wondering why we would want to restrict
    the State's leverage. The State had minimal leverage to start
    off with because the dam had to operate; it was critically
    important for electricity.
        But they were able to utilize the different stakeholders
    and come together for a productive conclusion. But if we narrow
    the period of time, aren't we just making it virtually
    impossible for the States to utilize this opportunity for clean
    water?
        The Chesapeake Bay Program is one I talk about frequently
    in this Committee. I guess my Committee members might be a
    little bit tired of listening to me, but since Senator
    Duckworth brought up the Great Lakes, I had to bring up the
    Chesapeake Bay.
        The Bay Program was from the ground up. It started with the
    States and local government and local stakeholders. It wasn't a
    Federal Government mandated program; it was a State initiative
    program, with States taking leadership on it.
        Now, if we say the States can't use the tools that they
    have in an effective manner, aren't we just handcuffing the
    States' ability to get things done?
        In this case, Ms. Watson, it would not have been possible
    for the State just to deny the application, because we need the
    electricity. But wouldn't we be compromising the ability of the
    States to leverage for clean water in our region? The States, I
    think, know the local circumstances better than the Federal
    Government.
        Ms. Watson. Yes, Senator, absolutely, and thank you for
    your question. If you are limiting the amount of time that
    States have to make decisions, you are limiting the ability
    that States have to be able to reach those important deals, to
    work with the project proponent, and make sure that a project
    can go forward with the greatest possible protection for water.
    That is the system that is been in place for the last 50 years.
    It has worked very, very effectively.
        Senator Cardin. Governors, if you wish to comment, fine.
    You have to deal with a lot of different players in your
    States. Ninety days for something as complicated as a multi-
    jurisdictional body of water like the Chesapeake Bay is
    virtually impossible.
        Mr. Stitt. I don't think it would hamper your ability to go
    after bad actors, come up with a settlement. The 60 day
    proposal for Clean Water, our State does it in 60 days, so the
    1 year timeline is just a reasonable time in scope. We think it
    is very reasonable for this Committee and the EPA to revise
    their rules.
        The State of Minnesota has arguably more water than any
    other State. Oklahoma actually has more manmade lakes and
    shorelines. They are getting their permits done in 90 days, so
    just the reasonability of this time in scope, I don't think
    limits the States' ability to oversee water quality or go after
    a bad actor.
        Senator Cardin. It may be true for your State, but I would
    put you in the seat of Governor Hogan of Maryland and all the
    different stakeholders he has to deal with on these issues, and
    other States that he has to deal with.
        Thank you, Mr. Chairman.
        Mr. Gordon. Mr. Chairman, if I might respond, Mr. Chairman
    and Senator Cardin. I appreciate the fact that you brought this
    back to the topic at hand, which is the proper use of the Clean
    Water Act and Section 401.
        As the former Chair of our State's independent
    environmental quality council, which is charged with not only
    making rules, but also is the first appeal body for any 401
    permit that is granted in the State, I have experience with
    this program. I have to say that Wyoming also has multi-State
    jurisdictional issues. The Colorado River, for example,
    involves almost all the Southwest. The Columbia River also has
    several States on it.
        We do our work within 60 days on average, but we are up to
    a year. I don't think that is unreasonable, and I think this
    particular Act actually does two things. One is, it talks about
    the scope, and as we make the scope larger, of course the job
    becomes longer. So, this is an attempt to, it seems to me,
    bring well needed reform to considering water quality impacts
    that are associated with a core permit or surface water issue.
        Senator Cardin. I will just make a final comment. We are
    not good examples here, but it is better if we have greater
    consensus among the Governors on the reform before it has
    brought here to Congress. I would like to have greater
    consensus among all of us.
        This Committee usually works in a very consensus way, but
    it would have been better if we had more of the States in
    agreement as to how these reforms should take place.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Cardin.
        Before turning to Senator Capito, I am going to ask
    unanimous consent to enter into the record a letter from the
    Kansas Attorney General in support of today's hearing. Attorney
    General Kevin Schmidt states that S. 1087--he said, ``would
    prevent future uses of Section 401 to deny development of
    constitutionally protected interstate commerce.''
        I would also like to enter into the record a court filing
    by eight States, including Oklahoma and Wyoming, who are
    opposing Washington's denial in court.
        [The referenced information follows:]

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        Senator Barrasso. Senator Capito.
        Senator Capito. Thank you, Mr. Chairman, and thank you for
    scheduling the hearing on our bill, the Water Quality
    Certification Improvement Act and efforts to improve
    implementation of 401 broadly. I am very appreciative of that.
        I would like to ask a process question first, Governor
    Gordon. In the process, the State permits under the 401, but
    once that permit is granted, there are all kinds of other
    Federal agencies that then weigh in on the permit, like the
    Corps, Fish and Wildlife. Can you flesh that out a little bit
    for me? If you don't know the details, I can write it in a
    written question.
        Mr. Gordon. Thank you, Mr. Chairman and Senator Capito. You
    are correct. Section 401 is specifically about water quality.
    It is not intended to be a catch all for all environmental
    regulation, and I think it is important that we keep--and I
    think that is what the value of this particular draft bill is,
    is to make sure that we keep it on topic of water quality.
    Because as you point out, there are many other agencies that
    weigh in beyond that, from the Corps of Engineers, to Fish and
    Wildlife Service, and others. So it is an extensive process
    that really has to be done both on a State and a Federal level.
        Senator Capito. Right. So I would like to point out that
    this legislation does not violate our States' rights to protect
    the quality of their water. Everybody here on the dais and in
    the audience and probably across this great country are just as
    invested in water quality and clean drinking water as the next
    person.
        But what we found in a State like West Virginia is, we
    exert our right under the 401, and we get sued by other
    external groups to try to prevent the direction that we want to
    go. Maybe that is not the direction that Washington State wants
    to go, but it is the direction that we as West Virginians want
    to go, and so that is very frustrating.
        So I guess in the grand scheme of things, to both
    Governors, does this legislation in any way prevent you from
    continuing to ensure water quality consistent with the Clean
    Water Act?
        Mr. Gordon. Mr. Chairman, Senator Capito, I do not believe
    it does. As I say, I have extensive experience with the State's
    regulatory apparatus, having served on the environmental
    quality council and having actually prosecuted several examples
    of these permits being issued and being contested. Never did I
    see the State's opportunity to regulate appropriately
    interfered with.
        As I have mentioned before, I think States have multiple
    rights, and one of them is certainly the right to commerce.
    That, I think, is something being precluded as we see the creep
    of 401 to include other things.
        Senator Capito. Governor Stitt, do you have a comment on
    that?
        Mr. Stitt. No, I do not think it limits our ability as a
    State to regulate our water quality. I just want to address the
    States' rights issue. Today, we are talking about pipelines,
    and we are talking about exporting coal. But tomorrow, it may
    be exporting agricultural goods, or it might be exporting beef.
    I think that is exactly----
        Senator Capito. We might be exporting energy generated by a
    solar panel.
        Mr. Stitt. It could be, that is correct. We could. I think
    we have talked enough here, we are so proud of Oklahoma being
    the pipeline capital of the world, and yet we have given you
    the facts on our water quality. This is really an attack on
    States' rights to be able to export their assets, and that is
    where one State's rights, where does it impinge on another
    State?
        Senator Capito. Right. As Governor, obviously you have
    stated the robust production of natural gas and oil. My State
    of West Virginia is new to the natural oil. We are not new to
    the natural gas business, but we are new to the proliferation
    through the Marcellus and Utica Shale. I think it is rather
    ironic that we have two major pipelines now stopped because of
    permitting issues.
        But we also look where we are situated in this country,
    where we could be exporting our gas to New York State and to
    the Northeast to replace what I think is one of the dirtiest
    fuels around, and that is fuel oil. I am not sure that we are
    into genuine arguments here in terms of how to weigh the cost
    and benefit environmentally and also economically at the same
    time.
        I don't know, Governor, if you had a comment on that.
        Mr. Stitt. I think that is exactly right. The hypocrisy of
    having a Russian oil tanker sitting in the Boston Harbor,
    transporting oil and natural gas----
        Senator Capito. It had been to Tobago, too. Remember, it
    came down from London to Tobago, and back up to Boston. How
    much carbon footprint is that?
        Mr. Stitt. That is right. Transporting oil and natural gas
    through pipelines is the safest way to do it, versus truck or
    train or obviously by ship. We love it. We think it is the
    right thing, and this is just about time and scope and clarity
    around 401. That is why we are supportive.
        Senator Capito. Thank you.
        Senator Barrasso. Thank you, Senator Capito.
        Senator Merkley.
        Senator Merkley. Thank you, Mr. Chairman.
        Ms. Watson, how many years did it take for the design to be
    developed for the Millennium Coal Terminal?
        Ms. Watson. That was, of course, several years in the
    making, Senator, and I am not sure that the designs are
    completed yet.
        Senator Merkley. So it took many, many years for the
    company to figure out how it has going to address different
    issues, design the details. In that context, do you feel it was
    unreasonable for the State to only have a few days to be able
    to evaluate a design that took many years, and as you have just
    mentioned, isn't actually complete yet?
        Ms. Watson. Yes, absolutely, Senator. One of the problems
    in particular with that project is the company did not come
    forward with sufficient information to show how it was going to
    mitigate against water quality impacts, even at that point.
        Senator Merkley. So you had to do an evaluation based on
    not even the company willing to provide the information?
        Ms. Watson. That is correct; that was the problem.
        Senator Merkley. I understand you have had 11 quality based
    reasons or concerns that you were expressing, and the company
    never bothered to basically lay out how it was going to address
    these 11 issues.
        Ms. Watson. That is correct, Senator. The company did not
    come forward with information showing how it would prevent
    those water quality issues.
        Senator Merkley. Governor Gordon, do you think it is
    reasonable that you as a Governor should have to respond to the
    company that is not going to give you the information that you
    need?
        Mr. Gordon. Thank you, Mr. Chairman, Senator Markey. I
    think your question is----
        Senator Merkley. Senator Markey isn't here, but I am here,
    and I would like to hear your response.
        Mr. Gordon. I am sorry. Pardon me.
        Senator Barrasso. People confuse Markey and Merkley all the
    time. It's like Crapo and Carper. We have the same thing.
        [Laughter.]
        Mr. Gordon. Senator Merkley, thank you. Your question is
    about reasonableness of a short time scale.
        Senator Merkley. No, it is trying to respond the way that
    the power that has been delegated to your State when the
    company hasn't provided the basic information that you need.
        You don't need to give me a lengthy response. I would think
    any Governor would be concerned. If you are not concerned, I
    think many other Governors would be concerned about having to
    respond when they haven't gotten the basic information.
        Mr. Gordon. Senator Merkley, if I may respond.
        Senator Merkley. You have to be very quick.
        Mr. Gordon. I think the issue is that the Millennium Bulk
    Terminal actually presented information from Centralia,
    Washington, on Hanford Creek had exactly the same condition,
    very similar, and presented their water quality information,
    which was approved in 2016, 1 year before the prejudicial
    dismissal.
        Senator Merkley. Let me turn to an Oregon project that was
    mentioned. That is the LNG potential terminal in Coos Bay,
    Oregon.
        The pipeline crosses 485 bodies of water, 7 lakes, 326
    waterways, 150 wetlands. I can't see how the State of Oregon
    can even get out to look at the plans for those locations in 60
    days.
        These things vary so much. You might have a permit that
    requires crossing one creek, or near one lake. But in this
    case, you are talking about, well, close to 500 bodies of
    water, an extraordinarily complex undertaking.
        Do you think 60 days is reasonable for the State to be able
    to even get out and identify and evaluate the concerns for
    water quality in all those locations?
        Mr. Gordon. Is that question for me?
        Senator Merkley. Yes.
        Mr. Gordon. Sixty days is probably unreasonable. One year
    is certainly reasonable, and I think with pre-consultation,
    there is plenty of opportunity for getting that information
    correct.
        Senator Merkley. OK. Well, thank you for your perspective.
    It looks very different to the State where the impacts are
    going to be on the ground. Our citizens want a thorough
    evaluation of the impacts.
        We value our trout, we value our salmon, we value our
    crabbing industry, we value our salmon industry. We value all
    of our offshore activities that are affected, as well as our
    instate waterways affected by the pipeline.
        I was very struck by, when the law was initially written,
    there was a bipartisan consensus, and it said it right in it,
    that this recognizes the primary responsibility of the States.
    This has all the earmarks of an assault on State rights with
    the heavy hand of Federal Government and Federal lobbying. I
    for one am going to stand up for the people of my State, defend
    their waterways, and especially when the company won't even
    provide the basic information needed to evaluate it.
        These projects involve trenching, blasting, drilling,
    damming, and 500 or so waterways impacted. There is no way that
    that can be done in such a short period of time. There is no
    way it can be done when the company doesn't even provide the
    basic information to begin with.
        So with that, I stand with the people of Oregon, who want
    to defend their waterways, and it looks very different,
    perhaps, than the perspective on your end of the project.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Merkley.
        Senator Cramer.
        Senator Cramer. Thank you, Mr. Chairman.
        Thanks all of you. I have never confused for Senator
    Merkley or Markey, although just now, someone could be confused
    because I think what you are hearing from the two sides of the
    dais get right to your point, Governor Gordon. We have to find
    balance, identify scope and creep, and I think we are all
    trying to do exactly that: find balance.
        What is that balance between the State's right to its own
    environmental protections and its resources, and a State's
    right to access to interstate commerce and global commerce?
        I come from North Dakota, a State like yours, where we are
    landlocked, right in the center of the North American
    continent, and are rich in resources that the country and the
    world wants and needs. Striking the balance, I think is what
    the bill does.
        One of the things that strikes me, and I am just going to
    opine for a minute, because listening to all this has been
    fascinating and encouraging. I hope people watching it are
    encouraged to see an intellectual discussion of peers and
    experts about, what is the right balance, because I am
    encouraged by it.
        When Congress isn't very prescriptive, it allows the
    bureaucracy to write the rules, and that almost never turns out
    well, from my perspective. It doesn't protect States' rights
    either to regulate themselves or their resources in order to
    interstate commerce. So I appreciate us coming back to the
    scope of 401, what that means, what that section provides in
    terms of clarity or lack thereof in authority.
        I am going to get back to the Millennium Project, because I
    think it is an interesting one, because it has similar to
    issues that we in North Dakota have had with the State of
    Washington's zeal, if you will. So in regard to the Millennium
    Project, the State of Washington denied the 401 permit, despite
    the State's own EIS, which stated ``there would be no
    unavoidable and significant adverse environmental impacts on
    water quality.'' That is the State's EIS.
        So it was not a surprise, in my view, considering that the
    proposed terminal was only a few miles from the existing Port
    of Longview, and that moves millions of tons of cargo, as you
    know, each year. But I thought it interesting the State of
    Washington proceeded to deny the water quality certification
    under Section 401 for nine reasons that had nothing to do with
    water quality. It doesn't mention water, and some of them, it
    is a very far stretch.
        So, Governors first, both of you oversee DEQs, both of you
    have spoken a little bit to this, but when you get a DEQ
    permit, and of course, you have great experience in this, or a
    401 permit application, do you consider a lot of things outside
    of water quality?
        And maybe start with you, Governor Stitt, since you have
    the background in this.
        Mr. Stitt. We look, if there's endangered species, we look
    at that. We look at the groundwater, we look at any kind of
    impact. We look at the maps, we look at the scope of the
    project. We make sure that it complies with the Clean Water Act
    and our own State water standards. But we keep it to--we don't
    try to play pick winners and losers, we try to keep with the
    Clean Water Act, and move it forward.
        Like I said, we do that in 60 days, so putting parameters
    of 1 year, we think, is very reasonable to bring the scope,
    which you said very well, back to the real issue of 401, which
    is water quality in the State.
        Senator Cramer. Governor Gordon.
        Mr. Gordon. Mr. Chairman, Senator Cramer, I think you are
    absolutely on point. As I was thinking about this and a similar
    opportunity that Wyoming might be presented with, Wyoming is
    the home of the largest wind farm in the country. That wind
    farm is going to require a stormwater quality permit. The
    customers for that wind farm are going to be all over the
    Southwest, and including Oregon.
        If we were to fancifully apply 401 as Washington did, we
    might deny a stormwater quality permit with prejudice for the
    wind farm with the idea of saying that we are not going to
    supply customers in the West.
        Of course, we wouldn't do that, because we would work with
    the proponents of the wind farm to make sure that the water
    quality impacts were addressed, only the water quality impacts.
        Senator Cramer. With regard to moving oil, for example,
    Governor Stitt, North Dakota is, of course, the second largest
    oil producing State in the country, farther from markets, even,
    than Oklahoma. But your neighbors, your port neighbors, include
    Texas and Louisiana. Do you see a difference in how they apply
    401 to, say, a State like Washington or Oregon that may apply
    it differently? Does it make sense that we would have a little
    more of a uniform application?
        Mr. Stitt. We believe so. Obviously, there are pipelines
    running through Oklahoma, from your State down to our State. We
    are the southern leg of the Keystone. We have access to
    Louisiana. We are building natural gas pipelines to transport
    LNG down to the ports in Louisiana.
        Obviously, we have direct access to the Houston refineries.
    So I think Texas and Louisiana are interpreting the rule
    properly. They are following their water standards just like we
    ask every State to do. This is really about making sure that we
    don't let certain States politicize this issue for their own
    biases, and then harm the assets of one State. That is really
    what it is about.
        Senator Cramer. We think of it as weaponizing.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you very much.
        Senator Van Hollen.
        Senator Van Hollen. Thank you, all of you, for your
    testimony here today.
        Senator Cardin also comes from my State of Maryland, and he
    covers some of the territory I mentioned.
        We recently had a back and forth in Maryland with Exelon
    Company regarding the Conowingo Dam, which is a dam on the
    Susquehanna River. I believe that if the EPA knew proposed
    regulations were in place or this legislation were in place,
    the State of Maryland would not have been able to reach the
    agreement it did with Exelon, putting aside the merits of that
    particular agreement, because this legislation would have
    undermined the State's leverage in that negotiation.
        That is not just my view. That is also the view of the
    State of Maryland's Secretary of Environment, Ben Grumbles,
    Secretary of Environment to our Republican Governor, Governor
    Larry Hogan. Secretary Grumbles says the Maryland Department of
    Environment believes that Maryland's program could be further
    hindered by the proposed rules, similarly, the legislation.
        Ms. Watson, one of the issues that he raised, Secretary
    Grumbles, regarded the change in the definition of discharge.
    Could you talk about that in this context?
        As Secretary Grumbles points out in this letter, CWA
    Section 401 requires certification for any federally permitted
    activity that may result in a discharge to navigable waters.
    While it is well established that the term discharge is broader
    than the term point source, the proposed rule limits State
    certification review to discharges from a point source.
        Could you elaborate on that concern and talk about how that
    would impede States like the State of Maryland from taking
    action to protect our water bodies, including the Chesapeake
    Bay?
        Ms. Watson. Yes. Thank you for your question, Senator. As
    things stand now and as they have stood for the last 50 years,
    States have been able to look at the entire federally permitted
    activity to make sure that the activity will not cause water
    pollution. The U.S. Supreme Court affirmed that understanding
    in the 1994 case PUD No. 1.
        So that has been the way States have implemented 401 for
    the last 50 years. EPA is not proposing to do, and what this
    legislation would do, is skinny down what States can actually
    look at, so that you are looking at just a very narrow
    discharge into a navigable water.
        States couldn't protect their groundwater. States couldn't
    protect from construction stormwater. States couldn't protect
    with sedimentation standards, with erosion standards, for
    Endangered Species Act standards, couldn't protect tribal
    fishing access.
        So there are all kinds of water quality protections that
    are protected today and have been for the last 50 years that
    would be on the chopping block as a result of this rule.
        Senator Van Hollen. I appreciate that, and that is exactly
    what gave rise to this concern.
        Just to the Governors, you heard the concerns expressed.
    Would you like to change the regulation so that you could no
    longer use your permitting authority for groundwater
    protection, sediment issues, and the other issues that were
    raised by the other witness?
        Mr. Gordon. Mr. Chairman, Senator, I don't believe that is
    what is in front of us today. I would read that differently.
        I can't speak to the case of Maryland. I am from Wyoming,
    but having served in a regulatory capacity for the State prior
    to being treasurer and now Governor, and having been a citizen
    who has worked on these issues since the 1980s, I have to say I
    don't see this as any diminishment of the States' opportunity
    to regulate waters within its boundaries.
        I do see it as a creep to take in issues like rail safety,
    greenhouse gas emissions, noise, that are not pertinent to
    water quality issues.
        Senator Van Hollen. So you would have no objection then, to
    amend the legislation in a way that made crystal clear that
    nothing about this changed a State's ability to regulate
    discharges? You would support that?
        Mr. Gordon. Mr. Chairman, Senator, I believe the Clean
    Water Act was about protecting water, and the 401 provision of
    that Act allowed States to control the water within their
    boundaries.
        Senator Van Hollen. So you don't think that this new
    proposal or this legislation impacts that in any way? You don't
    believe that?
        Mr. Gordon. I think it narrows it and recenters it on the
    issue of water quality and allows States the opportunity to
    regulate those.
        Senator Van Hollen. So you disagree with the testimony. But
    if clarification was required, then you would support that,
    right, to not diminish that State's authority?
        Mr. Gordon. I would, clarification, I believe, is in order.
    I would hope it doesn't diminish the State's authority.
        Senator Van Hollen. I mean, you can understand there's a
    little confusion here, because States usually want to have
    authority to fully protect their waters and their environment.
    Yet this proposal essentially gives the Federal Government
    ultimate veto and decisionmaking authority and ability to
    second guess Governors, and you are OK with that, I take it?
        Mr. Gordon. Mr. Chairman, Senator, I believe States have
    authority to regulate waters within their boundaries. That I
    stated emphatically over and over again. I also believe that
    States have a constitutional right to conduct commerce, and if
    other States use that tool, the 401 permit, to impede the
    commerce of other States, then I think that is
    unconstitutional.
        Senator Van Hollen. There's obviously a fundamental
    disagreement as to what this regulation and legislation does,
    and it seems to me that if there's that much ambiguity, that
    before we proceed in either way, we would want to make it very
    clear what the impact is. I hope we can all agree on that.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you very much.
        Senator Sullivan.
        Senator Sullivan. Thank you, Mr. Chairman, and I want to
    thank the witnesses for their testimony and being here on an
    important issue, certainly an important issue.
        In my State, the great State of Alaska, we have
    successfully run a Section 401 program for quite some time.
        But I want to go into the question, particularly for our
    two Governors, who have a lot of experience in this area, where
    there seems to be kind of a movement to focus on stopping
    projects from moving forward not based on clean water, but
    really trying to delay or kill a class of projects. In
    particular, something that matters to my State, I think it
    matters to your States, are pipelines.
        Kind of ironic, because the modern day pipelines--Keystone
    for example--created this hysteria when we all know that the
    studies show that it is actually much more safe to move energy
    products via pipeline than it is via rail. Yet for some reason,
    certain States have really focused, not again on clean water
    authority, but just a class of projects, pipelines, to kill
    them.
        Let me just give you examples I am sure you are familiar
    with. The Constitution Pipeline in New York--prime example--
    where the Governor of New York is impoverishing his own
    citizens by delaying any ability to move natural gas across the
    State. The U.S. Chamber estimated that the delays to that
    project is close to $4 billion in economic output and close to
    24,000 jobs. So, that seems, to me, an issue.
        Similarly, in Massachusetts, the unwillingness to permit a
    pipeline for natural gas has created the ironic situation
    where, as opposed to people in New England having gas from
    Americans, American gas, by American workers, they are
    importing LNG from Russia, our geopolitical foe that trashes
    the environment when they produce gas.
        But there you have it, two examples of Section 401 that are
    not focused at all, in my view, on protecting the water, but
    some kind of fundamental, irrational, in my view, opposition to
    a class of projects, in this case, pipelines.
        Can you two, both the Governors, expand upon this, or just
    give us any insights on how we should look to prevent this kind
    of focusing on just projects themselves, a class of projects,
    versus the intent, which is to make sure all States have clean
    water and clean air?
        In my State, we care more about our water and air than
    anybody, than anybody in the EPA, anybody. And by the way, we
    have some of the cleanest water and cleanest air in the world.
    We care about that.
        But this movement toward blocking things, it really hurt
    the whole country, not just their own States. I think it is
    something that Governors in particular can speak to, and I
    would welcome your views on that, and how we can look at
    Federal law to maybe prevent those kinds of approaches that
    really, these Governors are harming their own citizens, but
    they are harming the rest of the country as well.
        Mr. Stitt. I totally agree with you. I think that was very,
    very well said. First point I would like to add to that is that
    Oklahoma is--you missed it, you weren't here earlier, but we
    talked about we are the pipeline capital of the world. We have
    more pipelines running through Oklahoma actually surrounding--
    --
        Senator Sullivan. And they are safe?
        Mr. Stitt. And they are safe. And we have some of the
    cleanest water, and I read those stats off earlier. It is the
    safest way to transport oil and natural gas.
        Senator Sullivan. Why do you think there is this reflexive
    approach to stopping pipelines? The Keystone Pipeline that the
    Obama administration delayed for 8 years killed countless,
    thousands, tens of thousands of jobs. It just makes no sense.
        Mr. Stitt. I think Oklahomans, or I think Americans need to
    understand what happened with the Russian tanker that was
    sitting in the Boston Harbor, trying to bring liquefied natural
    gas from Russia, exporting our tax dollars and our jobs over
    there. I think Americans need to understand what is happening.
        Senator Sullivan. By the way, the Boston Globe did I think
    a 3,000 page editorial, Mr. Chairman, I would like to get it
    for the record here, which really went into this in a damning
    way for the Massachusetts legislature and how irrational the
    policy was.
        Senator Barrasso. Without objection.
        [The referenced information follows:]

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        Senator Sullivan. Governor, continue.
        Mr. Stitt. I will read real quick our water quality and
    some of our air quality facts in Oklahoma, because if pipelines
    were the problem, these facts would not be accurate. We are No.
    1 in the Nation in phosphorus load reduction in 2018 in our
    water bodies. We are No. 3 in the Nation in nitrogen load
    reduction in 2018. We are No. 1 in the Nation for non-point
    source success stories with more water bodies delisted from the
    impaired list of any other State.
        Because of our natural gas generation, we are double the
    national average in our reduction of emissions. Double the
    national average. So, sulfur dioxide is down 56 percent since
    2011, nitrogen oxide is down by 69 percent since 2011, carbon
    dioxide is down 37 percent since 2011.
        So really, the issue is we are weaponizing, we are talking
    about, States are not talking about water quality, they are
    talking about their hatred for fossil energy, and that is
    really the issue. We need to bring time and scope around this
    issue, so assets of some States are not infringed upon by
    others.
        Senator Sullivan. Governor, do you want to comment real
    quick?
        I know we are running out of time, and I apologize, Mr.
    Chairman.
        Mr. Gordon. No, thank you, Mr. Chairman, Senator. No, I
    absolutely agree with my colleague from Oklahoma. This Act
    really centers it back on water quality. That is the issue that
    is at play here.
        Your question really went to classes of actions. The
    example that I gave before was really about if Wyoming were so
    inclined to, say, look, our wildlife is very important, it is
    going to affect our migration corridors, you are going to
    affect our calving populations on various animals. We believe
    that wind farms are an impediment to that, and the stormwater
    quality permit that we are going to give is now therefore in
    peril because of wildlife associated impacts. That has nothing
    to do with water, but it is tantamount to using it to say, we
    don't want wind development for our wildlife.
        What I think this Act does is to recenter the conversation,
    really, on water quality and the opportunity for States to
    operate within those parameters in their own boundaries.
        Senator Sullivan. Thank you.
        Senator Barrasso. Thank you.
        Before turning to Senator Carper, I would like to also
    introduce for the record an editorial similar to the one that
    you talked about, about the Boston Harbor. This was in
    yesterday's Wall Street Journal, and it is called Cuomo's
    Carbon Casualties, where they say the pipeline he vetoed,
    Governor Cuomo vetoed, below New York Harbor, could reduce
    annual CO2 emissions by the equivalent of 500,000
    cars on the road. His gas embargo is raising State emissions.
        Without objection I will introduce this into the record.
        [The referenced information follows:]

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        Senator Barrasso. Senator Carper.
        Senator Carper. I want to again, welcome, it was very nice
    meeting each of you. One of you, I have met previously, the
    Governor of Wyoming.
        But to Ms. Watson, Governor Gordon, and Governor Stitt,
    thank you all for joining us today.
        When I was privileged to be Governor of Delaware for 8
    years, I used to love to testify before Congress. Delaware was
    close by; it is an easy train ride. So I was an easy mark. The
    Governors Association, nobody wanted to come in from Wyoming or
    some other place, they would say, well, send Carper. I was
    always happy to go. I hope it is a good experience for you, and
    we welcome you.
        I think and speak a lot as a recovering Governor. I
    appreciate the opportunity here, especially from the three of
    you, and then from States regarding how they feel about
    proposals to alter State authorities under Section 401 of the
    Clean Water Act.
        I just want to thank our Governors for taking the time out
    of your schedules to share your views with us on what is an
    important topic, obviously, to your States, and I think to ours
    as well.
        I have a longer statement that I want to submit for the
    record. But I would like to take a minute, if I could, to
    reflect on the relationship between the Federal and State
    governments when it comes to clean water. To be honest with
    you, if I were a sitting Governor, instead of a recovering
    Governor, I would be uneasy about the prospects of changing
    that Federal-State relationship.
        On the one hand, the current Administration, my colleagues,
    on the other hand, on the other side of the dais, have great
    confidence in States' abilities to protect waters in their
    States, and want them to do more of it by making them
    responsible for managing additional bodies of water, as the
    proposed changes to the definitions of waters of the U.S. on
    the Clean Water Act would require them to do.
        However, when it comes to managing and maintaining the
    quality of water, some suggest that the rights reserved to
    States to protect water under the Clean Water Act should be
    changed. I think this distorted interpretation of cooperative
    federalism is not just ironic, it is actually pretty unpopular
    with the majority of States.
        I wonder if we are going to be able to reconcile that
    fundamentally contradicting approach to States' rights. We will
    see. But I am hopeful that today's hearing can shed some light
    on that subject.
        Next, I would just like to read, if I could, claims I think
    made by our friends on the other side of the aisle, and I am
    tempted to call them false claims, but I'll just say
    questionable claims, and I will pull my punch. But the State of
    Washington's action is about politics--this is a claim--that
    the State of Washington's actions about politics has nothing to
    do with clean water. The State of Washington's own
    environmental impact study for the project found that there
    would be no significant impacts to water quality. That is the
    claim.
        And here is a rebuttal. In its 401 submission, the
    Millennium Bulk Project failed to show that it would adequately
    mitigate for its water quality impacts. The environmental
    impact study did not conclude that there would be no impacts to
    water quality. Rather, the environmental impact study concluded
    that if the company demonstrated that it could meet all water
    quality requirements, then there would be no significant impact
    to water. But the company failed to make that demonstration.
        Mr. Chairman, I would ask unanimous consent to submit for
    the record the actual 401 determination which makes absolutely
    no reference to climate change and other impacts, just water
    quality effects. I make that unanimous consent request.
        Senator Barrasso. Without objection.
        [The referenced information was not received at time of
    print.]
        Senator Carper. Thank you.
        Here is another claim that I would characterize as
    misleading. ``And the State of Washington has abused its
    authority to block the export of coal mined in Wyoming, Utah,
    Colorado, and Montana.''
        The rebuttal to that from the State of Washington is the
    following: ``The State of Washington denied the water quality
    certification to the coal export terminal because it failed to
    demonstrate reasonable assurance that water quality
    requirements would be met.''
        The project's proponent has appealed Washington's decision.
    Every tribunal that has reviewed it has upheld Washington's
    decision.
        Mr. Chairman, I would ask unanimous consent to offer for
    the record a letter sent to you and to Ranking Member, me,
    Carper, on August 15th, 2018, from Maia Bellon, Director at
    Washington Department of Ecology, which states, ``The facts of
    this denial of the Millennium Coal Export Terminal are simple.
    Millennium failed to meet existing water quality standards, and
    further failed to provide any mitigation plan for the areas the
    project would devastate, especially along the Columbia River.
    To approve this permit under the circumstances would not only
    have been irresponsible, it would have posed serious health
    risks to impacted communities and the surrounding
    environment.''
        Senator Barrasso. Without objection.
        [The referenced information follows:]

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        Senator Carper. Thank you, sir.
        And finally, a question. This would be a question for our
    Governors, Governor Gordon and Governor Stitt.
        One of the most controversial pieces of the EPA's proposal
    is that Federal agencies would be able to veto or override
    State imposed water quality conditions. For the sake of
    argument, let's say that a State is reviewing an application
    for a hydroelectric dam, which could have serious impacts on
    ecologically and economically important fish and species.
        As a condition for the dam's 401 certification, the State
    environment department could require the project to implement
    fish passage measures to allow spawning fish to swim upstream.
    Under this new rule, the Federal agency permitting or licensing
    this project could decide this measure is too costly and veto
    this condition.
        And I would just ask a question of both of you, if I could,
    as Governors of States whose recreational fishing industries
    support, literally thousands--maybe tens of thousands--of jobs,
    and provides billions of dollars to States' economies, would
    you support such a Federal agency override of your efforts to
    protect recreational fishing?
        Governor Gordon. Want to take a shot at that?
        Mr. Gordon. Thank you, Mr. Chairman, Senator Carper. I
    would not support a Federal override. We are--and I am on the
    record stating that I do not believe a Federal override is a
    correct method.
        Senator Carper. Thank you.
        Governor Stitt.
        Mr. Stitt. I would agree with that. We want certainty. I
    think businesses want certainty, so we are looking at a time
    and scope around this proposed rule change, which we agree on.
        Senator Carper. All right.
        Thank you both, thank you, all three of you.
        [The prepared statement of Senator Carper follows:]
                      Statement of Hon. Thomas R. Carper,
                    U.S. Senator from the State of Delaware
        Mr. Chairman, we are here today to examine legislation that would
    restrict State authorities under Section 401 of the Clean Water Act.
        As a former and now ``recovering'' Governor, I understand the
    reasons a State would want to maximize the strength of its most
    important industries. And so, I understand the motivations behind the
    legislation you have authored, Mr. Chairman, as well as the statements
    of the two Governors sitting before us today.
        My hope is that all of us on both sides of the dais will similarly
    consider the concerns raised about both this legislation and EPA's
    proposed rule by the Governors, attorneys general, and environmental
    agencies of many other States, including both red and blue States.
        As I consider these reforms, some questions come to mind that are
    partly a legacy of my experience as a Governor:
         In addressing the needs of the industries in one State, what
    effect would the proposed cure have on neighboring States?
         Do other States perceive the same problems the Governors here
    today have articulated?
         How do the 45 tribes authorized to review permit applications on
    their lands feel about the proposed solutions?
        I ask these questions because in my State of Delaware, decisions
    made in the best interest of industries and States elsewhere have had
    dramatic effects on the environment, public health, and our quality of
    life.
        As I have described many times in this Committee, Delaware sits at
    the end of America's tailpipe. More than 90 percent of our State's air
    pollution flows from power plants upwind of our State.
        Despite many appeals from Delaware and other downwind States,
    unfortunately, neither the responsible States nor EPA have chosen to
    control those emissions.
        While I understand the economic motivations of those States,
    Delawareans are forced to endure poorer health and higher costs while
    upwind polluters enjoy economic benefit. That is not right.
        I would just ask my colleagues and our witnesses to imagine how
    they would feel if someone wanted to locate a power plant in the
    headwaters of that State's iconic cold water trout stream? Or perhaps a
    dam that would harm water quality, and as a consequence, critical
    wildlife and fisheries habitats? Would you want your State to have a
    say in whether and how that activity is conducted in your State?
        How would you feel about a Federal agency in Washington, DC,
    overruling the judgment of your own State officials regarding local
    impacts? Would you care if a Federal agency dismissed your concerns,
    told you that you had functionally waived your right to assess a
    project, and stormed ahead with a project that local citizens opposed
    because of local adverse impacts?
        These questions may seem hypothetical, but actually, they are the
    very real questions that Governors will face if EPA's proposed
    revisions to the 401 certification process become the law of the land.
    Indeed, they are the questions that Governors, attorneys general, State
    environmental directors, and a host of other concerned citizens are
    already facing now as they consider the proposed regulation.
        As a recovering Governor, I wonder what other States and tribes
    feel about the proposed changes. Apparently, President Trump was also
    interested in State and tribal input.
        In his April 16, 2019, Executive Order on Promoting Energy
    Infrastructure and Economic Growth, the President specifically called
    on EPA to, ``consult with States, tribes, and relevant executive
    departments and agencies in reviewing section 401 of the Clean Water
    Act and EPA's regulations and guidance.''
        As it turns out, however, States and tribes were either not
    effectively consulted or they were blatantly ignored. And from our
    analysis of the comments received on EPA's proposed 401 certification
    rule, States and tribes across the board really do not like it.
        More specifically, as this chart shows, 29 State environmental
    agencies and the District of Columbia expressed significant concerns
    with the proposed change to their authorities. These are not just
    Washington, New York, and others you might consider the usual suspects.
    As you can see here, Utah, South Dakota, Idaho, Arkansas, and others
    expressed substantial and heartfelt concern about the regulation.
        As you can see in this other chart, tribes are nearly unanimously
    opposed to what the Administration has proposed.
        While I can't do justice to all the concerns the States and tribes
    expressed, a comment from the State of South Dakota Department of
    Environment and Natural Resources struck me:

            ``Simply put, these proposed changes supplant the cooperative
            federalism to protect water quality that has existed since
            Congress passed the Federal Clean Water Act. These changes are
            a poorly disguised effort by the Federal Government to severely
            limit the States' and tribes' efforts to enforce their water
            quality standards and to impose appropriate conditions on
            federally issued permits.''

        Mr. Chairman, I understand the desire and mandate we have as
    elected officials to take care of our people and economies in our
    States.
        What I do not understand is why, in the process, we have to
    undermine other States' abilities to take care of themselves, their own
    citizens' welfare, their own natural environments, and their own local
    economic interests. That is what is proposed here. Not only is it
    wrong, it's also not our only option to address whatever real concerns
    these players have.
        In reality, denials of certifications by States are exceedingly
    rare. If one digs deeply enough into most of those denials, many of
    them occurred because the applicant did not give State officials the
    information necessary to determine whether the project would compromise
    the State's water quality and comply with State laws.
        As many States suggested in their comments on the proposed EPA
    rule, early engagement with State agencies and an honest portrayal of
    projects and their impacts makes it possible to resolve problems and
    secure certification. This is the way it works in virtually every one
    of the thousands of certifications that States provide each year.
        Granted, there are major projects that are so large, so disruptive,
    and so complex that they may never be appropriate for the environment
    for which they are proposed. A good example was a proposed deep water
    coal port in my State of Delaware that would have displaced some of the
    most beautiful and ecologically productive coastal marshes you will
    find anywhere. For very good reasons, our State determined that this
    location was not the right place for that kind of activity.
        Any and every State should have the right to make that
    determination for itself, accountable to its own citizens. That was the
    motivation of Congress when it gave States the important tool of 401
    certifications in the Clean Water Act--an authority that breathes life
    into the Act's promise of cooperative federalism. That, provided
    minimum Federal standards are met, States are in the best position to
    determine how to take care of their environments--much less their
    economies.
        As much as I know you, the majority witnesses, and some of my
    colleagues around this dais believe your legislation and EPA's proposed
    401 certification regulation are a good thing, I--and a majority of
    States in this union--disagree.
        We are debating a huge and dangerous solution to a very narrow
    problem affecting a very minute part of our society.
        This bill and that regulation are not the answer.
        Thank you, Mr. Chairman.

        Senator Barrasso. Thank you, Senator Carper.
        Before turning to Senator Gillibrand, I would first like to
    submit for the record a unanimous consent request to enter into
    the record a brief filed by the Crow Nation and the National
    Tribal Energy Association, and a number of associations,
    opposing the State of Washington's denial of the Millennium
    Bulk Terminal Project.
        I would also like to enter into the record the Millennium
    Bulk's response to the State of Washington's 2018 letter to the
    Committee, which we have just introduced into the record.
        Without objection, that will also be submitted.
        [The referenced information follows:]

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        Senator Barrasso. Senator Gillibrand.
        Senator Gillibrand. Thank you, Mr. Chairman, and Mr.
    Ranking Member.
        We hear a lot about States' rights, particularly from the
    current Administration. We are told that we should be leaving
    environmental regulations to the States, that they are in the
    best position to determine how to protect their environment and
    natural resources.
        We are also told that States--not the Federal Government--
    should have the primary jurisdiction over regulating the
    majority of our water bodies, and that the Clean Water Act
    should be restricted to just traditionally navigable waters.
        But not surprisingly, when States use the authority legally
    delegated to them under the Clean Water Act to protect water
    quality, we hear from those same people that those States have
    somehow abused their power and must be reined in. That is
    absurd, and it undermines the foundation principle of
    cooperative federalism enshrined in the Clean Water Act.
        It seems that some policymakers are willing to throw the
    baby out with the bathwater and restrict the rights of all
    States under the Clean Water Act, simply because they disagree
    with the lawful decision of some States--including my own--to
    deny a very small number of permits.
        The Trump administration and Administrator Wheeler have
    explicitly said that they are proposing changes to the Section
    401 process because of New York's gas blockade. The
    Administration has cited three high profile denials by the
    State of water quality permits for interstate natural gas
    pipelines as an example of unnecessary delays.
        However, in each of those instances, the State's denial was
    based on relevant water quality standards and subject to
    judicial review. Additionally, New York State annually receives
    more than 4,000 applications for Section 401 water quality
    certifications, and on average, denies approximately 8. That
    means the State is approving more than 99 percent of the
    applications it receives every year on time. Hardly the picture
    of obstruction or an out of control State regulator.
        So what then is this really about? It is about removing a
    procedural block to establishing a more industry friendly
    regulatory process that gets meddlesome State regulators out of
    the way so that special interests can build what they want,
    where they want, even if it means harming water quality and
    running roughshod over principles of federalism they claim to
    support. This is bad policy, it is short sighted, and could
    have very damaging impacts in our States.
        With that, Ms. Watson, I have a couple questions for you.
    Under the Section 401 process, States can apply conditions on
    Federal permits and licenses to ensure that projects meet
    applicable State water quality requirements. However, the Trump
    administration's proposed rule would restrict the types of
    conditions that States can set and give Federal permitting
    agencies the authority to veto them.
        Could you describe the types of conditions that States
    might impose on a project that would not otherwise be included
    on a Federal permit? What impact will this have on wetlands,
    streams, and other water bodies impacted by the construction or
    operation of a project?
        Ms. Watson. So there are a lot of examples of conditions
    that States might include in 401 certifications to protect
    water quality that wouldn't otherwise be covered by the Federal
    permit example. So that would be protection of groundwater,
    sedimentation standards, erosion standards, best management
    practices for stormwater, protections for endangered species.
    These are things that get added through the 401 certification
    process that have routinely been included in Federal permits
    for the last 50 years without a problem.
        These are State based water quality requirements, and what
    is being proposed through the bill and through EPA's rule would
    upend that 50 year State control of water pollution in their
    States.
        Senator Gillibrand. What are the practical implications of
    reducing the amount of time that States have to make Section
    401 decisions? Will this result in more project approvals or
    improve water quality protection?
        Ms. Watson. It will not result in more water quality
    approvals. It will actually have the unintended consequence of
    resulting in more denials because States will not have
    sufficient time to make decisions.
        But on top of that, EPA is limiting the amount of
    information that States can consider. So States won't have the
    tools and the information necessary to be able to, in fact,
    protect water quality within their States.
        Senator Gillibrand. Thank you.
        I just wanted to respond to something our other witnesses
    said. Governor Gordon, I recognize that you want to be able to
    have the best economy for Wyoming. But the truth is, if you try
    to remove New York's regulatory authority, you will affect our
    economy, because our economy is based on clean air and clean
    water. We have agriculture all across New York that relies on
    clean air and clean water. We have a tourism industry that is
    very valuable.
        We have New York City, which is 8 million people, that gets
    clean water from a watershed, unfiltered water. If we had to
    filter that water, it would cost us tens of billions of
    dollars.
        So I just want to be clear. We know how to protect our
    State and our economy, and I would just suggest that you would
    give deference to our Governor in the way that our Governor
    would give deference to you in understanding what is best for
    your economy.
        And then Governor Stitt, I just was offended by your
    statements that you know how to have good water in Oklahoma. I
    would just like unanimous consent to submit four articles for
    the record of how challenged your water quality actually is in
    Oklahoma, which I am sure you are aware. I am grateful that you
    have made progress in eliminating some contaminants, and that
    is a good thing, but it may be because you are starting from a
    worse off place.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you, Senator Gillibrand.
        [The referenced information follows:]

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        Senator Barrasso. Would any of you like to respond to the
    comments? And then we will just give each of you a chance to
    make a final statement as we wrap up the hearings.
        Mr. Gordon. Mr. Chairman, thank you for that opportunity.
        With apologies, Ranking Member, I think I have forgotten to
    recognize you the last couple of times. My apologies for that.
        Senator Gillibrand, thank you very much for your comments.
    I think we live in a Nation, that, going back to our
    Constitution, always has recognized the importance of the
    Federalist principles. If memory serves, one of the big
    arguments in the original documentation was whether New York
    would actually expand west beyond its normal boundaries that we
    perceive today.
        So I very much appreciate it. I have a daughter who
    actually is a beneficiary of that great, clean water.
        Wyoming has the largest amount of class one water in the
    country--excuse me, class one air in the country, and yet we
    are affected continually by pollution from Seattle, from
    Portland, from San Francisco, et cetera. I think we have to
    recognize these principles, and I think my point here is that
    together, focusing on water quality and our ability to regulate
    within the State, that is critical.
        When that is used as an impediment to commerce, that is a
    constitutional issue, and I think this particular Act that is
    contemplated actually recenters that conversation on what the
    original intent of the 1972 law was, which was to protect water
    quality.
        Thank you very much.
        Senator Barrasso. Governor Stitt, and then Ms. Watson.
        Mr. Stitt. Thank you, Chairman.
        I think, Senator, if the American people, if you think that
    the American people don't know really what is happening when
    your Governor denies permits based on 401 water quality on
    Earth Day, on pipeline development, I think American people see
    right through that.
        I think this is about a hatred of the fossil fuel industry.
    It has nothing to do with water quality.
        Senator Barrasso. Ms. Watson, any final comment?
        Thank you.
        Well, I thank all of you. We had 16 Senators show up for
    this hearing today, 11 had a chance to ask questions, 5 due to
    other commitments had to leave before it was their turn, so
    this has quite a bit of interest. Some of the other members may
    submit written questions for part of the record.
        I am very grateful for all of you being here.
        The hearing record will remain open for an additional 2
    weeks, but I want to thank all of our witnesses for their
    testimony today on this very important topic, and the hearing
    is adjourned.
        Senator Carper. Mr. Chairman, before we adjourn, could I
    just make several unanimous consent requests, please? I want to
    submit for the record a letter dated November 18th from the
    Council of State Governments.
        Senator Barrasso. Without objection.
        [The referenced information was not received at time of
    print.]
        Senator Carper. Another from the State of Washington, dated
    September 26th, 2017.
        Senator Barrasso. Without objection.
        [The referenced information follows:]

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        Senator Carper. A third from the American Rivers Connect
    the U.S. to the letter dated November 18th, 2019.
        Senator Barrasso. Without objection.
        [The referenced information follows:]

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        Senator Carper. A fourth from the Appalachian Trail
    Conservancy dated November 19th this year.
        [The referenced information follows:]

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        Senator Carper. And the last thing I want to say is, I
    think all of us are guided by the Golden Rule, whether we think
    about it or not. We should treat one another the same. I always
    try to put myself in the shoes of other people and say, how
    would I want to be treated if I were in their case, right?
        I know how important the economy of my State is to me, and
    I am sure the same is true for our Chairman.
        I live in a little State, we are the 49th largest State, so
    we are a small State.
        My State is sinking, and the seas around us are rising. It
    is, as you might imagine, a huge concern for us.
        There's widespread belief that one of the reasons why it
    has happening--I am a native of West Virginia; my dad was a
    coal miner for a while. My neighbors were coal miners, so we
    have to understand what it has like to be in the fossil fuel
    industry, if you will.
        But I would just ask that we try to put ourselves in your
    shoes as you attempt to govern your States, but I want you to
    put yourself in our shoes. When I was Governor of Delaware, I
    could shut down my State's economy, literally get every car or
    vehicle off the road, shut down every business, we would still
    have been out of compliance for clean air.
        So just keep that in mind as we go forward, and again,
    thank you all for being here.
        Senator Barrasso. Thank you, Senator Carper, and with that,
    thank you again for being here; the hearing is adjourned.
        [Whereupon, at 11:49 a.m., the hearing was concluded.]
        [Additional material submitted for the record follows:]

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