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

FAST or Slow?

Streamlined NEPA Review for Energy Projects and the Lingering Uncertainty Over Consideration of Greenhouse Gas Impacts

Timothy J. Hagerty Emily C. McKinney Energy & Mineral Law Foundation Kentucky Mineral Law Conference October 19, 2016

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 § Lease/occupancy of federal lands (including mining, wind, solar)

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

• r 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 12: Utility lines, including pipelines § NWP vs. individual permit; risk of oil spills

NEPA Challenges to Energy Projects: Renewable Energy

§ Walnut Ridge Wind Farm, Illinois (Hamrick v. Gen’l Services Admin.)

§ 210 MW wind farm § NEPA review triggered by sale of majority of energy to US GSA § Environmental review showed no significant impact

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

§ Sixth Circuit upheld Corps, finding that NEPA review was limited to permitted activity (filling of waters), not the

• verall mining project

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 CO2e significance threshold

Key Provisions of Final GHG Guidance

§ GHG emissions as “proxy” for climate change impacts

• f projects

§ Relevant to consideration of alternatives (including no action), comparing mitigation measures

§ Quantification of GHG emissions

§ Use generally accepted methods and tools; don’t need to generate new data § Qualitative discussion required if quantification not possible

Key Provisions of Final GHG Guidance

§ Are GHG emissions from your project significant?

§ Key challenge – global, cumulative nature of issue § Can’t rely on relatively small proportion of global GHGs contributed by individual project § “Rule of reason” for depth of analysis – agency discretion based on expertise § Discuss applicable GHG emission goals/laws

Key Provisions of Final GHG Guidance

§ Direct and Indirect effects

§ Dramatic increase in scope of climate impact analysis: consider “life cycle” stages of energy § E.g. for coal production, must consider exploration, extraction, processing (direct effects); combustion, disposal (indirect effects) § Pipelines, transmission: could include generation, extraction, use of energy, ……….? § Beyond scope of current case law

§ Impacts of climate change on “affected environment”

§ Rising sea level, drought, high intensity precipitation events, increased fire risk, ecological change

Implications of Final GHG Guidance

§ Not legally binding; but failure to adhere could make NEPA documents vulnerable to legal challenge

§ Delay caused by uncertainty (FAST Act permitting timetables?) § Increased complexity of reviews

§ Agency discretion = inconsistent application

§ FAST Act agency coordination provisions?

§ Litigation likely

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

Key Takeaways

§ Avoid NEPA if you can – early planning is key § Narrow scope is better – but not too narrow § Take advantage of streamlining / “fast track” provisions if possible § Need complete team – engineering, environmental, legal, PR § Good communication is critical § Takes TIME and MONEY – make sure to plan ahead

Emily C. McKinney (502) 568-0374 emckinney@fbtlaw.com Timothy J. Hagerty (502) 568-0268 thagerty@fbtlaw.com

Questions?