For two decades, Alaska Native corporations near the proposed Pebble Mine have pursued the promise of economic opportunity from one of the country’s largest undeveloped mineral deposits. The project could generate work for local businesses and income for shareholders in communities where opportunities are scarce. Yet the vast mineral wealth below the ground remains locked away. Why? A federal agency used an unconstitutional veto to kill their attempts to develop those resources.
The mine itself would be developed by a large mining company, not by the Native corporations. Yet the consequences of federal permitting decisions fall directly on the Iliamna Natives Limited and Alaska Peninsula Corporation, which together represent more than 1,000 shareholders who live nearby and whose ancestral roots in the area go back for centuries. They built businesses to provide logistics, medical, and other services in anticipation of the project. The benefits from the anticipated development flowed to the entire community. These were communities that had been losing residents due to a lack of economic opportunity, and the proposed mine gave them a financial lifeline. But those hopes were dashed when federal agencies vetoed the project’s Clean Water Act permit.
The Pebble Mine dispute illustrates a broader problem: Even after developers have invested years and substantial resources to receive federal permits, overlapping government authorities can still create uncertainty about whether projects can ultimately move forward. A proposed federal permitting bill, the Bipartisan American Affordability and Jobs Act (BAAJA), would address that problem. To see why those reforms matter, it helps to understand how these federal vetoes work.
The Federal Veto That Threatens Pebble Mine
Under Section 404 of the Clean Water Act, the Army Corps of Engineers generally handles permits for discharges of dredged or fill material into regulated waters. But Section 404(c) separately authorizes the EPA to prohibit or restrict disposal sites when it determines that discharges would have an “unacceptable adverse effect” on specified resources, including fisheries.
The scope of EPA’s authority is itself contested. EPA maintains that Section 404(c) allows it to veto a project even before a permit application is submitted, and a D.C. Circuit decision supports a broad reading of the provision. With the help of Pacific Legal Foundation, Iliamna Natives is disputing the reach of that preemptive authority. The precise question has not yet been definitively settled by the Supreme Court.
This permitting whiplash created real problems for the Pebble Mine project and for the native tribes that would benefit from it. In 2020, the Army Corps of Engineers issued the project’s final environmental impact, stating that the project “is not expected to have a measurable impact on fish populations.” Despite this finding, the Corps’ Alaska District denied the project’s permit application. Although Pebble appealed the permit denial, in 2023 the EPA issued a final determination that permanently prohibits development of the mine.
The EPA has exercised its Section 404(c) veto power relatively rarely—14 times—but the existence of that power still creates uncertainty. Investors must consider not just the cost of meeting environmental requirements but also the risk that a separate decision-maker could derail a project late in the process.
Not only are these vetoes bad on basic policy grounds, but they are also unconstitutional. Section 404(c) does not describe whether or when the EPA should terminate a veto-eligible project. Pacific Legal Foundation represents the two Native corporations in Iliamna Natives Limited v. EPA and challenges Section 404(c)’s unconstitutional delegation of legislative power to the EPA.
State Veto Power Creates Another Chokepoint
Section 404(c) is not the only Clean Water Act provision capable of stopping major infrastructure projects. Before a federal agency may issue a permit for discharge under the act, Section 401 requires that states issue a water-quality certification. If states deny certification, this can prevent the project from moving forward.
This requirement has consequences well beyond mining. For example, in 2016, New York denied a water-quality certification for the proposed Constitution Pipeline, a roughly 124-mile natural gas project that would have connected Pennsylvania to markets farther northeast. The project died after New York denied its Section 401 certification. Marc Levitt at the Breakthrough Institute notes that the choice to stop such pipelines is among the reasons New York and New England remain dependent on dirtier, more expensive oil for heat and electricity.
Section 401 also differs from Section 404(c) in scale. Certification is a routine part of many federal permitting processes, not a rarely exercised EPA override. Its breadth makes clear standards especially important. The same uncertainty can affect pipelines and transmission infrastructure, delaying investments that could improve energy access and reliability. When projects can be stopped for reasons unrelated to real environmental harm, energy prices rise for everyone.
What BAAJA Would Change
BAAJA, the proposed permitting-reform package, would make project approvals more predictable while retaining environmental review. Along with improvements that would help streamline permitting under the National Environmental Policy Act and the Endangered Species Act, the bill would make several positive changes to the Clean Water Act.
For Section 401, the bill would narrow certification decisions to specified water-quality requirements and impose stronger constraints on the grounds for denials and conditions. It also proposes a more focused approach for covered gas pipelines and transmission projects. Certification would depend only on the direct discharge of a project rather than indirect effects, such as potential effects on climate change. Narrowing the scope of Section 401 in this way would keep certification tied to water quality instead of allowing it to function as a general-purpose project veto.
For Section 404(c), BAAJA would restrict the timeframe in which the EPA may exercise its veto authority to the formal review period—after an application is submitted and before a permit is issued. This change could reduce the risk that the agency could veto a permit long after a developer has proceeded through the permitting process. It would not, however, eliminate the EPA’s veto or clearly define what constitutes an “unacceptable adverse effect.” More clearly defining this term or removing the EPA’s ability to unilaterally veto a project altogether would help further reduce uncertainty. Still, these provisions represent a vast improvement on the status quo and fit within BAAJA’s broader motivation to protect lawfully issued permits.
Windows for deep, meaningful reforms like BAAJA do not open often, and they close quickly. As a package deal, BAAJA is imperfect, but it is a winning compromise. All of America benefits from rules that are clear, predictable, and accountable. Congress has a rare chance to deliver them, and it should act now.
