FAST or Slow? Streamlined NEPA Review for Energy Projects and the - PowerPoint PPT Presentation

Energy & Mineral Law Foundation Kentucky Mineral Law Conference October 19, 2016 Timothy J. Hagerty Emily C. McKinney FAST or Slow? Streamlined NEPA Review for Energy Projects and the Lingering Uncertainty Over Consideration of Greenhouse Gas Impacts

OVERVIEW I. Environmental Review Under NEPA II. NEPA Challenges to Energy Projects III. FAST Act: Streamlined NEPA Review IV. CEQ Guidance: Consideration of GHG Impacts V. Conclusion

What is NEPA and why should I care? § Energy projects are under incredible scrutiny § Especially fossil fuel-related projects § Any “federal hook” can trigger NEPA review § Highly litigious environment § Sierra Club and others have large litigation budgets § Will exploit any vulnerability

NEPA = National Environmental Policy Act (42 U.S.C. § 4321 et seq. ) § Framework for including environmental considerations in federal decision-making process § Ensure agencies give consideration to environmental consequences of their actions § Inform public about the environmental impact of proposed federal actions § PROCEDURAL, NOT SUBSTANTIVE – but the process is critical

NEPA Trigger = “Major Federal Action” § Not just actions taken directly by federal government § Federal funding, grants, financing assistance § Federal permits and approvals § Use or occupancy of federal lands

How to Comply with NEPA § Categorical Exclusion (CE) – minor actions; little environmental impact § Environmental Assessment (EA) § Environmental Impact Statement (EIS) CE EA EIS Increasing complexity

Environmental Assessment § Action will not have a “significant impact” on the human environment § “Concise” document (or is it?) § Includes Purpose and Need, Alternatives, Impacts § Concludes with Finding of No Significant Impact (FONSI)

Environmental Impact Statement § Scoping – early in process; identify issues and concerns § Purpose and Need Statement – critical § Reasonable Range of Alternatives – cannot be too narrow § Affected Environment – context, setting § Environmental Consequences – direct, indirect, cumulative

Environmental Impact Statement § Lengthy, costly process § Extensive public involvement § Multiple federal and state review agencies § Concludes with Record of Decision

Why does NEPA matter to my non-federal energy project? § Potential federal “hooks” § Cost – process; project changes; mitigation § Delay, delay, delay § Vulnerability to legal challenges (more delay) § Sierra Club et al. § Competitors

Potential NEPA “Hooks” § Clean Water Act Section 404 “wetlands” permit § Infrastructure, disposal areas, transmission lines § U.S. Forest Service Special Use Permit § Use of USFS land – e.g., transmission line or pipeline ROW § Federal funding/financial assistance § DOE grants § Rural Utilities Service financing assistance (rural electric coops) § Hydropower project permits/renewals solar) § Lease/occupancy of federal lands (including mining, wind,

How to Avoid NEPA (or at least minimize the pain) § What is the “scope” of the action? § “Small federal handle” problem § Early planning is key

Major NEPA Issue: Purpose and Need § Key to Alternatives Analysis § “Brief statement” – but not so brief any more § Not too narrow, or too broad § Major litigation issue – deference to agency, but not absolute

Major NEPA Issue: Alternatives Analysis § Reasonable range of alternatives § Must include “No Action” alternative § May include options outside federal agency’s jurisdiction or authority § Agency (and applicant) cannot commit resources that would prejudice ultimate agency decision

Major NEPA Issue: Public Involvement § Key requirement § Must demonstrate good faith efforts to inform public § Responses to comments § Can affect outcome of eventual litigation

OVERVIEW I. Environmental Review Under NEPA II. NEPA Challenges to Energy Projects III. FAST Act: Streamlined NEPA Review IV. CEQ Guidance: Consideration of GHG Impacts V. Conclusion

NEPA Challenges to Energy Projects: Pipelines § Dakota Access Pipeline ( Standing Rock Sioux Tribe v. U.S. Army Corps) § 1,200-mile oil pipeline § Corps’ NEPA review challenged § Segmentation of review; river crossings § Archaeological impacts; water resources § Nationwide Permit 12 challenges ( Sierra Club v. Bostick ) § Gulf Coast Pipeline § NWP vs. individual permit; risk of oil spills § NWP 12: Utility lines, including pipelines

NEPA Challenges to Energy Projects: Renewable Energy § Walnut Ridge Wind Farm, Illinois ( Hamrick v. Gen’l Services Admin. ) § Environmental review showed no significant impact § 210 MW wind farm § NEPA review triggered by sale of majority of energy to US GSA

NEPA Challenges to Energy Projects: Coal Mining § Kentuckians for the Commonwealth v. U.S. Army Corps of Engineers § NEPA challenge to CWA Section 404 permit for coal mining § Alleged failure to consider health effects of surface mining overall mining project § Sixth Circuit upheld Corps, finding that NEPA review was limited to permitted activity (filling of waters), not the

OVERVIEW I. Environmental Review Under NEPA II. NEPA Challenges to Energy Projects III. FAST Act: Streamlined NEPA Review IV. CEQ Guidance: Consideration of GHG Impacts V. Conclusion

FAST Act: NEPA Streamlining Provisions § Stand-alone “Federal Permitting Improvement” provisions § Purpose: “streamline[] the review process for infrastructure, energy, and other construction projects.” § Unexpectedly added shortly before passage of Bill § Language from previously-proposed Senate bill § Intended to build on previous efforts § 2012 Executive Order (timetables, online dashboard, etc.); individual agency policies § Significance of inclusion in statute

Applicability of Streamlining Provisions § Types of projects covered § “ renewable or conventional energy production , electricity transmission , surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines , [and] manufacturing.” § Triggers § Project subject to NEPA § Investment likely > $200 million (public and private) § Does not already qualify for abbreviated review process § Size/complexity would benefit from enhanced coordination

Individual Streamlining Reforms: Performance Schedules § Recommended schedules for most commonly required environmental reviews in each covered category § Intermediate and final completion dates § Requires completion within 180 days after agencies have all needed information

Individual Streamlining Reforms: Permitting Dashboard § Goals: transparency and accountability § Inventory of covered projects posted on publicly- available dashboard § 150 projects under active review: § 5 conventional energy projects § 10 renewable energy projects § 5 transmission projects § 18 pipeline projects § Status of agency compliance with permitting timetable, links to supporting documentation

Individual Streamlining Reforms: Agency Coordination § Agency must meet with project sponsor within 60 days of request § Clarifies role of lead agency § Identify and coordinate with other agencies (federal or non-federal) likely to have financing, environmental review, authorization, other responsibilities § Develops range of alternatives § Encourages simultaneous reviews, incorporating existing documents

Individual Streamlining Reforms: Judicial Review § Goal: limit uncertainty for developers, investors, other stakeholders § Shortened 2-year statute of limitations § Limited value (mootness concerns) § Only parties who raised issues in “sufficiently detailed” comments can bring action challenging NEPA document § Most courts already require § Expanded considerations for injunctive relief (effects on health, safety, environment, jobs)

Obstacles to NEPA Streamlining § Agency perception of increased litigation risk § Inadequate public participation; failure to address issues raised in comments; incomplete supporting documentation § Agency ability to meet strict deadlines § Deadlines not judicially enforceable? § Uncertainty over scope of review (e.g., GHGs) § Continued trend of shifting costs and responsibilities for environmental review to project sponsors § Provision allowing agencies to set fees for applicants to reimburse cost of federal reviews

OVERVIEW I. Environmental Review Under NEPA II. NEPA Challenges to Energy Projects III. FAST Act: Streamlined NEPA Review IV. CEQ Guidance: Consideration of GHG Impacts V. Conclusion

Background on Final GHG Guidance § Final guidance for consideration of GHG emissions in NEPA reviews issued Aug. 1, 2016 § Draft first published in 2010; revised draft in 2014 § Applicability § All forms of NEPA reviews (EA, EIS, CE) § All newly-initiated reviews; may apply to ongoing reviews (agencies to “exercise judgment”); not retroactive § Final guidance removed 25,000 CO 2e significance threshold