In a positive development for the oil and gas industry, but one that is also sure to generate legal challenges from environmental groups, the Trump administration on Tuesday unveiled a narrowed definition about which waterbodies deserve protection under the federal Clean Water Act.

Under a proposed rule signed by the Environmental Protection Agency (EPA) and the Army Corps of Engineers, some types of ditches and wetlands would be excluded from the official definition of Waters of the United States (WOTUS). Specifically, the agencies proposed limiting the definition of a “tributary” to include perennial or intermittent waterbodies, but not ephemeral ones, while the definition of “wetlands” would include those adjacent to other water features under the agencies’ jurisdiction, but not isolated wetlands.

“The agencies believe that limiting jurisdiction to perennial and intermittent streams most appropriately balances the federal government’s interest in regulation [of] the nation’s navigable waters while respecting state land use authority over features that are only episodically wet following precipitation events,” the agencies said in the pre-published version of the proposed rule.

Also proposed is a new definition for ditches that would include those built in a tributary, satisfy the definition of a tributary, or are constructed in adjacent wetlands. All other types of ditches would be excluded. A new definition for “lakes and ponds” was also proposed, as was dropping “interstate waters” as a separate category.

The American Petroleum Institute told NGI’s Shale Daily that it “appreciates the efforts of the EPA and the U.S. Army Corps of Engineers to solicit feedback from stakeholders during the creation of the replacement rule. We look forward to a new water rule that protects U.S. waters while providing much needed clarity for all stakeholders, including property owners, land developers, and state regulators.”

U.S. Chamber of Commerce Global Energy Institute CEO Karen Harbert said the proposed rule “is good news for businesses, farmers and localities because it strikes a better balance between economic growth and environmental progress than the rule it replaces.”

The proposed rule effectively completes the second in a two-step process to review and revise the controversial Clean Water Rule (CWR). The first step was completed last year, when EPA announced it would rescind the WOTUS definition and accepted public comments on the matter.

EPA and the Army Corps said they would accept public comments on the proposed rule for 60 days following its publication in the Federal Register.

The agencies jointly promulgated the CWR and unveiled it in May 2015, during the Obama administration. But in October of that year, the Sixth District Court issued a stay and blocked it from being implemented. President Trump signed an executive order in February 2017 instructing EPA and the Army Corps to review the CWR. EPA said it would repeal, rather than modify, the WOTUS definition last July.