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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

Frost Brown Todd LLC

I. Environmental Review under the National Environmental Policy Act (NEPA) A. NEPA Background

(1) The Statute: The National Environmental Policy Act, 42 U.S.C. § 4321 et

seq. (“NEPA”), was enacted to create a framework within the Federal government for including environmental considerations among the factors ordinarily examined in the decision-making process. The heart of NEPA is the environmental impact statement (“EIS”), which must be prepared for all major federal actions significantly affecting the quality of the human environment. 42 U.S.C. § 4332(2)(C). The EIS requirement must be satisfied by the federal agency responsible for the proposed action. The responsible agency must consult with other federal agencies that have jurisdiction or special expertise with respect to any environmental impact involved, and must provide the public with notice and an opportunity to comment on the proposed action. The principal purpose of the EIS is to ensure that agencies give proper consideration to the environmental consequences of their actions and that the public is informed about the environmental impact of proposed agency actions. Nevertheless, NEPA is a procedural statute, specifying particular procedures that must be followed in making a project decision; it does not mandate any particular substantive outcome. Thus, the agency is not required to select the environmentally preferable alternative.

(2) The Regulations: The Council on Environmental Quality (“CEQ”) has adopted regulations to implement the requirements of NEPA, including the EIS requirements. See 40 C.F.R. parts 1500-08. In addition, many federal agencies have developed their own agency-specific regulations and guidance documents to better integrate the NEPA requirements into that Agency’s mission.

B. Categorical Exclusions and Environmental Assessments

In determining whether to prepare an EIS, the federal agency must determine whether the proposed action is one which:

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(1) Normally requires an EIS: In this case, some environmental

documentation is required, and the presumption is that an EIS is required. However, if the agency believes that an EIS is nevertheless unnecessary, it may be able to demonstrate that no EIS is required through the preparation of an Environmental Assessment (“EA”) (see discussion below and 40 C.F.R. §§ 1501.3, 1508.9); or

(2) Normally does not require either an EIS or an EA: In this case, the project may fit within a “categorical exclusion,” exempting the agency from the requirement to prepare any environmental documentation. Individual agencies generally adopt regulations containing categorical exclusions for certain projects typically sponsored by such agencies.

(3) EAs: If the proposed action does not fit within a categorical exclusion, the agency must at least prepare an EA, which is a concise document that serves to provide sufficient information concerning the project’s likely environmental impacts to determine whether an EIS must be prepared. The EA must describe briefly the need for and alternatives to the proposal, the environmental impacts of the proposed action and alternatives, and a list of agencies and persons contacted. 40 C.F.R. § 1508.9. (An EA need not be prepared if the agency has decided to prepare an EIS.)

(4) Final documents: After completing an EA, the agency must prepare one of the following documents: (a) An EIS, if the agency determines that the proposed action may

have significant effects on the human environment.

(b) A Finding of No Significant Impact, or “FONSI,” presenting the reasons why an action will not have a significant impact on the human environment, and for which an EIS therefore will not be prepared. The EA (or a summary) should be appended to the FONSI. 40 C.F.R. § 1501.4(e), 1508.13. The agency may proceed with the proposed action based on the FONSI, after sufficient notice to the public.

Note: If a proposed action is closely similar to one which normally requires an EIS, the agency must make the FONSI available for public review for 30 days before making a final determination. 40 C.F.R. § 1501.4(e)(2).

C. Environmental Impact Statement (1) Scoping: The regulations require an “early and open” process for

determining the scope of issues to be addressed in the EIS. This process

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includes a Federal Register notice describing the proposed action, possible alternatives, and the scoping process. The agency must invite the participation of affected government agencies, Indian tribes, the proponent of the action, and other “interested persons.” 40 C.F.R. § 1501.7.

(2) Contents of EIS: An EIS must include the following elements:

• Summary: Stresses major conclusions, areas of controversy, and

issues to be resolved.

• Statement of Purpose and Need: States the underlying purpose and need to which the agency is responding.

• Alternatives Analysis: This is the “heart” of the EIS, presenting

the environmental impacts of the proposed action and the alternatives, in comparative form. This must include all “reasonable” alternatives, including those not within the jurisdiction of the lead agency, as well as the “no action” alternative. The preferred alternatives should be identified, if one exists.

• Affected Environment: Succinctly describes the environment of

the area to be affected.

• Environmental Consequences: Discusses the environmental impacts of the proposed action and alternatives, including: direct and indirect effects and their significance; energy and natural resource requirements and conservation potential of various alternatives and mitigation measures; urban quality, historic, and cultural resources; and means to mitigate adverse environmental impacts.

• List of preparers.

• Appendices (material related to EIS and its analyses).

See 40 C.F.R. § 1502.10-1502.19.

The analysis of “indirect effects” includes “cumulative effects,” defined as

the impact on the environment that results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency or person undertakes those other actions. Such effects can result from individually minor but collectively significant actions taking place over a period of time. 40 C.F.R. § 1508.7. “Indirect effects” also include “growth inducing effects” of the proposed action. 40 C.F.R. § 1508.8.

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(3) Summary of EIS Preparation Process: The EIS must be prepared in two

stages, and also may be supplemented.

(a) A Draft Environmental Impact Statement, or “DEIS,” must be prepared first. The DEIS must satisfy to the fullest extent possible the statutory requirements for a final EIS.

The agency must publish the DEIS and obtain comments on it

from any federal agency that has jurisdiction or special expertise with respect to any environmental impact associated with the proposed action, or that is authorized to develop and enforce environmental standards (e.g., EPA, U.S. Fish & Wildlife Service, etc.). The agency also must seek comments from certain state and local agencies, Indian tribes, the applicant (if any), and the public. See 40 C.F.R. part 1503.

(b) A Final Environmental Impact Statement, or “FEIS,” must respond

to all comments received on the DEIS, including any responsible opposing view that was not adequately discussed in the DEIS and the agency’s response to such views. The agency may respond to comments by modifying alternatives (including the proposed action), developing and evaluating new alternatives, supplementing or modifying its analyses, making factual corrections, or explaining why the comments do not warrant further response. All substantive comments (or summaries) must be attached to the FEIS. 40 C.F.R. § 1503.4.

The agency may (but need not) request comments on the FEIS

before making a final decision. Other agencies and persons may, in any case, make comments before a final decision is made.

(c) A Supplemental EIS must be prepared (for either a DEIS or FEIS)

if: (1) the agency makes substantial changes in the proposed

action that are relevant to environmental concerns; or (2) there are significant new circumstances or information

relevant to environmental concerns that bear on the proposed action or its impacts.

The agency also may prepare a Supplemental EIS if it determines that the purposes of NEPA would be furthered by doing so. The same procedures and requirements apply

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to Supplements as apply to DEISs and FEISs. 40 C.F.R. § 1502.9(c).

(4) Record of Decision: After making a final project decision, the responsible agency must provide a concise statement of its decision—called a Record of Decision, or “ROD.” The ROD should identify all alternatives considered and specify the alternative(s) deemed to be environmentally preferable. The agency also must identify the considerations that entered into its decision. Finally, the ROD must state whether all practicable means to avoid or minimize environmental harm have been adopted, and if not, why they were not. 40 C.F.R. § 1505.2.

An agency may not issue a ROD until the later of 90 days after the Federal Register notice of the public availability of the DEIS or 30 days after the Federal Register notice of the public availability of the FEIS.

(5) Agency Cooperation: If more than one agency is involved in the proposed action, a “lead agency” shall supervise the preparation of the EIS. Other federal agencies with jurisdiction by law over all or a portion of the project or its impacts will be “cooperating agencies.” Agencies with special expertise also may be cooperating agencies, upon the request of the lead agency. Cooperating agencies participate in the NEPA process from the outset, including scoping, preparing the environmental documentation, and commenting on the EIS. See 40 C.F.R. §§ 1501.5-1501.6.

EISs also should, to the extent possible, be prepared concurrently and in

integration with environmental analyses and studies under the Fish and Wildlife Coordination Act (16 U.S.C. § 661 et seq.), the National Historic Preservation Act (16 U.S.C. § 470 et seq.), the Endangered Species Act (16 U.S.C. § 1531 et seq.), and other environmental review laws and executive orders. 40 C.F.R. § 1502.25. EISs should include a discussion of Environmental Justice issues, pursuant to Executive Order No. 12898.

D. Selected Issues in NEPA Compliance

(1) “Purpose and Need”

The CEQ regulations say very little about what is required in the statement of “purpose and need” for the proposed action, but this statement nevertheless has become the subject of increased controversy in recent years.

(a) CEQ Regulation: “Purpose and need. The [EIS] shall briefly specify the underlying purpose and need to which the agency is responding in proposing the alternatives including the proposed action.” 40 C.F.R. § 1502.13.

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(b) Judicial Interpretation. Federal courts generally will accord a high degree of deference to an agency’s formulation of purpose and need, but that deference is not absolute. Courts, nevertheless, have emphasized the importance of the statement of purpose and need. See, e.g., Simmons v. U.S. Army Corps of Engineers, 120 F.3d 664, 667 (7th Cir. 1997): “[T]he first thing an agency must define is the project’s purpose. [Citation omitted.] The broader the purpose, the wider the range of alternatives; and vice versa. . . . If the agency constricts the definition of the project’s purpose and thereby excludes what truly are reasonable alternatives, the EIS cannot fulfill its role.”

(2) Range of Alternatives

(a) The Statute.

(i) Section 102(2)(C) of NEPA (the EIS requirement) calls for a “detailed statement by the responsible official on . . . (iii) alternatives to the proposed action.” 42 U.S.C. § 4332(2)(C)(iii).

(ii) Section 102(2)(E) also states: “The Congress authorizes

and directs that, to the fullest extent possible . . . all agencies of the Federal Government shall . . . study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.” 42 U.S.C. § 4332(2)(E) (emphasis added).

(b) The Regulations.

(i) The alternatives analysis is the “heart of the environmental impact statement.” 40 C.F.R. § 1502.14.

(ii) The alternatives analysis must:

(A) “Rigorously explore and objectively evaluate all

reasonable alternatives, and for alternatives which were eliminated from detailed study, briefly discuss the reasons for their having been eliminated.”

(B) “Devote substantial treatment to each alternatives

considered in detail” to ensure a fair evaluation of their comparative merits.

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(C) Examine alternatives that are not within the jurisdiction of the lead agency, if those alternatives would accomplish the agency’s purpose and need.

(D) Include the “no action” alternative.

(E) Identify the agency’s “preferred alternative.

(F) Include appropriate mitigation measures not already

included in the proposed action or alternatives. 40 C.F.R. § 1502.14.

(iii) The agency must not “commit resources prejudicing selection of alternatives before making a final decision.” 40 C.F.R. § 1502.2(f). Prior to issuance of the ROD, the agency cannot take any action to “limit the choice of reasonable alternatives,” or allow any non-Federal applicant to take such action. 40 C.F.R. § 1506.1(a)(1), (b).

(3) Connected Actions and “Segmentation”

(a) The Regulations.

(i) The CEQ regulations provide that “[t]o determine the scope

of environmental impact statements, agencies shall consider 3 types of actions . . . .” They include:

(A) Actions (other than unconnected single actions)

which may be:

1. Connected actions, which means that they are closely related and therefore should be discussed in the same impact statement. Actions are connected if they:

a. Automatically trigger other actions

which may require environmental impact statements.

b. Cannot or will not proceed unless

other actions are taken previously or simultaneously.

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c. Are interdependent parts of a larger action and depend on the larger action for their justification.

2. Cumulative actions, which when viewed

with other proposed actions have cumulatively significant impacts and should therefore be discussed in the same impact statement.

3. Similar actions, which when viewed with

other reasonably foreseeable or proposed agency actions, have similarities that provide a basis for evaluating their environmental consequences together, such as common timing or geography. Any agency may wish to analyze these actions in the same impact statement. It should do so when the best way to assess adequately the combined impacts of similar actions or reasonable alternatives to such actions is to treat them in a single impact statement.”

40 C.F.R. § 1508.25.

(ii) The CEQ regulations also provide that “[w]hen preparing statements on broad actions (including proposals by more than one agency), agencies may find it useful to evaluate the proposal(s) in one of the following ways:

(A) Geographically, including actions occurring in the

same general location, such as body of water, region, or metropolitan area.

(B) Generically, including actions which have relevant

similarities, such as common timing, impacts, alternatives, methods of implementation, media, or subject matter.

(C) By stage of technological development including

federal or federally assisted research, development or demonstration programs for new technologies which, if applied, could significantly affect the quality of the human environment.”

40 C.F.R. § 1502.4(c).

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(iii) In evaluating the “intensity” of a proposed action—in order

to determine whether it will have a “significant” environmental effect—an agency is required to consider “[w]hether the action is related to other actions with individually insignificant but cumulatively significant impacts. Significance exists if it is reasonable to anticipate a cumulatively significant impact on the environment. Significance cannot be avoided by terming an action temporary or breaking it down into small component parts.” 40 C.F.R. § 1508.27(b)(7) (emphasis added).

(4) Indirect and Cumulative Impacts

(a) The Regulations.

(i) “Effects” include “direct effects, which are caused by the

action and occur at the same time and place,” and

“Indirect effects, which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable. Indirect effects may include growth inducing effects and other effects related to induced changes in the pattern of land use, population density or growth rate, and related effects on air and water and other natural systems, including ecosystems. Effects and impacts as used in these regulations are synonymous. Effects includes ecological . . . aesthetic, historic, cultural, economic, social, or health, whether direct, indirect, or cumulative.”

40 C.F.R. § 1508.8 (emphasis added). (ii) “Cumulative impact” is “the impact on the environment

which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.” 40 C.F.R. § 1508.7 (emphasis added).

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(5) The “Small Federal Handle” Problem (a) The Issue: At what point does federal participation in a project

proposed by a non-federal entity (private party, state or local government, etc.) “federalize” the action and subject it to the requirements of NEPA? Also, when must the non-federal portion of an overall project with both federal and non-federal elements be included within the NEPA scope of analysis?

(b) Common Situations:

(i) Nonfederal actions that require federal permits or approvals, such as permits from the U.S. Army Corps of Engineers under Section 10 of the Rivers and Harbors Act and Section 404 of the Clean Water Act; or Secretary of the Interior approval of Indian contracts.

(ii) Nonfederal actions eligible for federal assistance, such as

mass transit systems; highway construction; housing developments HUD mortgage insurance; and HUD funding for a portion of a project.

II. Recent NEPA Challenges to Energy Projects A. Pipelines

(1) Dakota Access Pipeline: Standing Rock Sioux Tribe v. U.S. Army Corps. of Engineers, No. 1:16-cv-01534 (D.D.C., Complaint filed July 27, 2016)

(a) Challenges to NEPA review are at the heart of the recent controversy surrounding this proposed $3.8 billion pipeline that would span 1,200 miles and connect the Bakken oil fields in North Dakota to processing facilities in Illinois

(b) Claims that Corps improperly segmented its review of the environmental impacts of the pipeline as a whole and failed to consider indirect effects of river crossings (i.e., construction and operation of the entire pipeline); lacked sufficient economic analysis of the project

(c) Also related claims about impacts to archaeological resources and failure to involve the Standing Rock Sioux Tribe in its reviews and permitting; potential impacts to water resources (particularly Lake Oahe and the potential risk to the Tribe’s drinking water source)

(2) Nationwide Permit 12: Sierra Club v. Bostick, 787 F.3d 1043 (10th Cir. 2015) (a) Challenge to NWP 12 (for “utility lines”, including pipelines) and

its applicability to the Gulf Coast Pipeline under NEPA; alleged

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failure to consider risk of oil spills and cumulative environmental impact of pipelines

(b) Court upheld Corps’ NEPA analysis at the NWP level rather than for individual verifications, and held that Petitioners had waived claims involving Corps’ NEPA compliance in issuing NWP 12 because the claims were not raised during the public comment period on the NEPA documents

B. Conventional Electricity Generation

(1) Diné Citizens Against Ruining Our Environment v. Bureau of Indian Affairs, No. 3:16-cv-08077 (D. Az., Complaint filed Apr. 20, 2016)

(a) Environmental groups challenged government’s 25-year extension of authorization for coal mining and combustion at Four Corners Power Plant/Navajo Mine complex

(b) Claims that NEPA document lacked any assessment of clean energy alternatives and failed to adequately analyze impacts to air, water, land, people, and endangered fish

C. Renewable Electricity Generation (1) Hamrick v. General Services Administration, 107 F. Supp. 3d 910 (C.D.

Ill. 2015) (a) On challenge by neighboring property owners, court held that

development of the proposed 210 megawatt Walnut Ridge Wind Farm in Illinois required NEPA review because of an agreement to sell to the United States General Services Administration (GSA) a majority of the energy produced

(b) GSA completed environmental review and concluded the project would not create the potential for significant adverse impacts. Local permits were granted for 118 turbines and construction begun earlier this year.

D. Electricity Transmission (1) National Parks Conservation Ass’n v. Jewell, 965 F. Supp. 2d 67 (D.D.C.

2013) (a) Environmental groups challenged the National Parks Service’s

environmental review of special use permits and rights-of-way that it granted to upgrade and replace the Susquehanna to Roseland Transmission Line

(b) In upholding the agency’s approval, the court deferred to its determination that the no-action alternative, relying on distributed generation rather than transmission, would not meet the project’s stated objective

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E. Coal Mining (1) Kentuckians for the Commonwealth v. U.S. Army Corps. of Engineers, 746

F.3d 698 (6th Cir. 2014) (rehearing en banc denied, May 30, 2014) (a) Plaintiffs challenged Section 404 permit for a coal mining

operation under NEPA, alleging the Corps failed to consider health effects of surface mining in general when assessing environmental impacts of the Section 404 permit.

(b) Sixth Circuit upheld the Corps’ issuance of the permit, finding that NEPA review was limited to the specifically permitted activity (the dredging and filling of jurisdictional waters), not the overall mining project.

III. FAST Act: Provisions for Streamlined NEPA Review of Energy Projects

A. Background on FAST Act (1) The Fixing America’s Surface Transportation Act (FAST Act), a $305

billion transportation bill, was signed by President Obama on December 14, 2015. Public Law No. 114-94, Title XLI.

(2) According to a summary published by the Transportation Committee of the U.S. House of Representatives, the FAST Act “is five year legislation to improve the Nation’s surface transportation infrastructure, including our roads, bridges, transit systems, and rail transportation network.” It includes provisions related to roads and bridges, public transportation, highway and motor vehicle safety, hazardous materials, railroads, financing, and additional provisions to “streamline[] the review process for infrastructure, energy, and other construction projects.”

(3) Stand-alone “Federal Permitting Improvement” provisions Act were unexpectedly added to the FAST Act shortly before its passage.

(4) Most of the language came directly from Senate Bill 280, the proposed “Federal Permitting Improvement Act of 2015,” which had been reported out of the Senate Committee of Homeland Security and Governmental Affairs earlier in 2015.

B. Past efforts to streamline NEPA review (1) Streamlining provisions in the FAST Act are intended to build on previous

efforts, including the Obama Administration’s 2012 Executive Order 13604, Improving Performance of Federal Permitting and Review of Infrastructure Projects (applied to renewable energy generation, electricity transmission, and pipelines).

(a) Introduced use of timetables and schedules to complete reviews, collaboration among agencies, and use of an online Dashboard to add transparency and accountability.

(2) Significant to have provisions memorialized in statute, rather than through individual agency policies or Executive Orders.

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C. Goals of FAST Act streamlining provisions (1) Improve the NEPA review process for major infrastructure, energy, and

manufacturing projects (2) Counteract slow pace and high costs of NEPA Environmental Impact

Studies (3) Introduce measures to improve agency coordination and reduce litigation

delays D. Applicability of FAST Act streamlining provisions

(1) Types of projects covered (§ 41001(6)(A)) (a) Includes “renewable or conventional energy production,

electricity transmission, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines, [and] manufacturing.” Pub. L. No. 114-94 § 41001(6)(A) (emphasis added).

(b) Gives the newly-formed Federal Permitting Review Improvement Council (“Council”) authority to designate projects in other industry sectors for the streamlined review provisions by a majority vote.

(2) Triggers for streamlining provisions (§ 41001(6)(A)) (a) Project must be subject to NEPA;

(b) Project must be likely to cost more than $200 million (public or private investment); and

(c) Either: (i) Project does not already qualify for abbreviated

environmental review process under any applicable law; or (ii) Because of size and complexity, the project would likely

benefit from enhanced coordination. (A) Examples: projects that will require authorizations

from three or more federal agencies, or that will require preparation of an EIS.

E. Individual NEPA-streamlining reforms in the FAST Act (1) Implementation authorities (§ 41002)

(a) Establishes a Federal Permitting Review Improvement Council (i) Composed of officials from the Council on Environmental

Quality (CEQ), Office of Management and Budget (OMB), and 13 other federal agencies

(ii) Chaired by President-appointed Executive Director

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(iii) Within one year, Council must develop and issue recommended “best practices” for numerous environmental review and permitting activities, including early stakeholder engagement, use of performance metrics, improved coordination between federal and non-federal agencies, increased transparency, reduced information collection requirements, and use of geographical information systems (GIS).

(iv) Within one year, Council also directed to develop recommended “Performance Schedules,” to include intermediate and final completion dates, for environmental reviews “most commonly required for each category of covered projects” based on data from “the most efficient applicable processes” from the previous two years.

(A) Performance Schedules must require that all environmental reviews and authorizations be completed within 180 days after the relevant agencies have all the information needed to make a final decision.

(b) Appointment of Chief Environmental Review and Permitting Officers (“CERPOs”) (i) Each agency must appoint a CERPO who will be

responsible for overseeing implementation of new permitting requirements within his or her agency to “standardize, simplify, and improve” the efficiency of processes and policies for environmental review and permitting

(ii) CERPOs will also provide support to the Council

(2) Permitting Dashboard / Project Inventory (§§ 41002(c)(1)(A), 41003(b)) (a) Inventory of covered projects must be identified and posted on a

publicly available online “Permitting Dashboard” within 6 months (i) Available at www.permits.performance.gov/

(ii) Currently over 150 projects listed under active review (5 conventional energy, 10 renewable energy, 5 transmission, and 18 pipeline projects)

(b) Information to be included for each project includes the permitting timetable and status of each agency’s compliance with the permitting timetable; links to application information and supporting documentation

(c) Intended to further the objective of increased transparency and accountability of the environmental review process for the public

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(3) Coordinated Project Plans / Permitting Timetable (§ 41003(c)) (a) Lead agency must establish Coordinated Project Plan in

consultation with other agencies for coordinating public and agency participation in any required Federal environmental review and authorization for the project (i) Required within 60 days of project posting on the

Dashboard (b) Plan must include a Permitting Timetable: a “comprehensive

schedule of dates by which all environmental reviews and authorizations, and to the maximum extent practicable, all State permits, reviews and approvals must be made.” (i) Permitting Timetables “shall follow” the Performance

Schedules established by the Council. Any variances from the Performance Schedules must be justified and are subject to dispute resolution.

(ii) Failure to conform to a Permitting Timetable once it has been set can lead to a requirement to inform Congress.

(iii) Comment period for draft Environmental Impact Statements is 30 days, with possible extension to 45 days, absent “extraordinary circumstances”

(4) Agency Coordination Requirements (§§ 41003(a), (c)(3), (d), 41005) (a) Agencies must meet with project sponsor to discuss the project and

the review and permitting project within 60 days of a sponsor’s request.

(b) Lead agency must identify all federal and non-federal agencies likely to have financing, environmental review, authorization, or other responsibilities within 45 days of project being identified as a “covered project,” and must invite all federal agencies to be participating or cooperating agencies. (i) Federal agencies may not “opt out” of participation unless

they can show they have no jurisdiction or authority over the project and will not be involved in the project.

(ii) Lead agency must make relevant information available to cooperating and participating agencies and project sponsor “as early as practicable” in the environmental review process, and must work cooperatively with other agencies to “identify and resolve issues that could delay completion of an environmental review of an authorization required for the project.”

(c) Lead agency responsible for developing range of alternatives that encompass the interests of all reviewing agencies

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(i) Focus on “Preferred Alternative” (A) The Act provides that “the preferred alternative for

a project, after being identified, may be developed to a higher level of detail than the other alternatives” if doing so will not prevent the lead agency from making an impartial decision on the alternatives or deter the public from commenting on the preferred and other alternatives. FAST Act, Title XLI, § 41005(c)(4).

(d) Agencies “shall, to the maximum extent possible” carry out their obligations concurrently, and in conjunction with other required environmental reviews and authorizations.

(5) Judicial Review Provisions (§ 41007) (a) Goal of reforms

(i) One of the primary goals of the Title XLI provisions is to limit the uncertainty surrounding major federal projects. Changes to provisions governing judicial review of NEPA documents are intended to provide more predictable outcomes to developers, investors, and other stakeholders.

(b) Specific provisions

(i) Shortened two-year statute of limitations (A) Reduces statute of limitations for claims under

federal law seeking judicial review of any authorization issued by a federal agency (including NEPA claims) from six years to two years

(ii) Limiting pool of potential litigants

(A) Only parties who submitted comments on the environmental review documents during the review period can bring actions challenging the NEPA document.

(B) Litigants limited to claims arising from issues raised in “sufficiently detailed” comments to the agency (or claims that agency did not provide reasonable opportunity for such comment)

(iii) Judicial considerations for injunctive relief (A) Where litigants seek injunctive relief, court shall

“(1) consider the potential effects on public health, safety, and the environment, and the potential for significant negative effects on jobs resulting from an order or injunction; and (2) not presume that the harms described in paragraph (1) are reparable.”

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(c) Limitations on the impact of judicial review changes (i) Most legal challenges to NEPA reviews are already brought

well within two years, since litigants generally want to file suit before the project is constructed to avoid mootness arguments.

(ii) Most courts already limit NEPA challenges to comments raised within the public comment period

F. Potential obstacles to streamlined NEPA review

(1) Agency perception that availing themselves of streamlining provisions are “shortcuts” that may increase litigation risk

(a) Potential for pressures to complete full NEPA-compliant environmental review on compressed schedule to lead to less defensible review documents (poor quality EISs, lack of public participation or failure to address issues raised in comments, or incomplete documentation to support agency decisions)

(2) Agency uncertainty over the level of analytical scrutiny to apply to aspects of NEPA review, such as greenhouse gas impacts

(3) Concern with agencies’ ability to meet strict deadlines due to staffing, budget, and other resource constraints (a) Deadlines imposed on agencies do not appear to be judicially

enforceable (i) The Act designates OMB as the arbiter of disputes over

timelines, rather than the courts (4) Potential to further the trend of agencies shifting costs and responsibilities

for environmental review to project sponsors (a) Provision specifically authorizing member agencies of the Council

to issue regulations setting fees for applicants to reimburse the cost of federal reviews

G. Tips for project proponents seeking to benefit from streamlining provisions (1) Project advocates should be prepared to advocate for NEPA streamlining

provisions to apply and to help fortify the final NEPA document against legal challenges.

(a) Provide notice to Council and lead permitting agency explaining how project meets the applicability provisions of the Act

(b) Encourage coordination of review among agencies to reduce inefficiencies and delays

(i) Also seek combined/concurrent review with other federal statutory requirements (e.g., Endangered Species Act, National Historic Preservation Act)

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(c) Advocate for the appropriate level of NEPA review once the lead agency is designated (i.e., whether a categorical exclusion applies, if the agency can “tier” off an existing NEPA document, or whether an EA or EIS should be prepared)

(d) Focus on the “preferred alternative” (2) Project advocates should meet frequently with agency officials throughout

the NEPA process to address issues such as scope of review, project schedule, and responding to comments from the public and other agencies.

IV. CEQ Guidance on Consideration of Greenhouse Gas Impacts A. Background

(1) On August 1, 2016, the White House Council on Environmental Quality (CEQ) issued its 34-page Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas [“GHG”] Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews

(2) CEQ first published the guidance in draft form in 2010, and issued a revised draft document in December 2014, following public review and comment. While the final guidance retains several key aspects of the draft guidance, the CEQ made some changes to address comments on the draft guidance. Changes that may be significant are highlighted below.

B. Applicability (1) Applies to federal agencies’ preparation of an Environmental Impact

Statement (EIS) or Environmental Assessment (EA), and to consideration of Categorical Exclusions under NEPA

(a) Programmatic as well as project-specific environmental reviews (2) Agencies are directed to apply this guidance to all new proposed agency

actions when a NEPA review is initiated, and “exercise judgment” when considering whether to apply the guidance in ongoing NEPA reviews. Does not apply retroactively to EISs and EAs that have already been issued.

(3) Final guidance removes the proposed threshold for GHG emissions that would mandate quantitative assessment under NEPA

(a) Revised draft stated that actions leading to emissions of 25,000 metric tons of CO2-equivalent or more would warrant quantitative analysis of GHG emissions associated with alternatives and mitigation measures

(b) Final guidance “does not establish any particular quantity of GHG emissions as ‘significantly’ affecting the quality of the human environment.”

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(c) Less certainty on applicability may expand the universe of projects that will be covered by the guidance

C. Key Provisions (1) Consideration of GHG Emissions and Climate Change Impacts of

Proposed Projects in all NEPA Reviews (a) Use of GHG emissions as a “proxy” for climate change impacts

(i) Directs agencies to consider GHG emissions from proposed projects as a “proxy” for potential impacts on global climate change to allow agencies to make a “reasoned choice between no action and other alternatives” and to compare mitigation measures.

(b) Quantification of GHG Emissions

(i) Encourages quantifying projected GHG emissions using generally accepted methods and tools

(A) Must provide qualitative discussion where tools and data input are not reasonably available that would allow for reasonable quantitative estimates, and explanation why quantification is not possible

(ii) Use of existing reports and other information – guidance does not require generating new data

(c) Evaluating the Significance of GHG Emissions from Individual Projects

(i) Emphasizes “rule of reason” that gives agencies discretion to use experience and judgment to determine the depth of review of a particular type of impact

(ii) Specifically warns against limiting consideration of GHG emissions from individual projects on the basis that the subject federal action represents a very small fraction of overall global GHG emissions (A) Some federal agencies have previously relied on

this position in NEPA reviews (B) The guidance frames the relatively small proportion

of global GHG emissions from individual projects as a description of the nature of global climate change itself, rather than a justification to ignore the individual project’s GHG emissions or to conclude that they are insignificant

(iii) Encourages discussion of whether the proposed action would facilitate meeting applicable GHG emissions goals reflected in local, state, and federal policies and laws

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(d) Direct and Indirect Effects; “Connected” Actions (i) References to “upstream” and “downstream” impacts in the

body of the draft guidance replaced with “direct and indirect effects” terminology already in use in NEPA regulations and case law (A) Directive to consider upstream and downstream

emission impacts still included in a footnote in the Final Guidance

(ii) What direct and indirect effects are “reasonably foreseeable”?

(A) Final guidance uses example of production of a fossil fuel such as coal, and includes all “life cycle” stages: exploration, extraction, processing (direct effects) as well as combustion and disposal (indirect effects)

(B) Seems to go beyond the scope of the current case law. See, e.g., Sierra Club v. FERC, No. 14-1275, slip op. at 17–18 (D.C. Cir. Jun. 28, 2016) (in case challenging approval of liquefied natural gas expert terminal, upstream production of the commodity is not a “reasonably foreseeable indirect effect” because another agency has authority over issuance of a license to export the commodity based on a “proximate cause” analysis)

(C) If applied, CEQ’s approach could dramatically expand the scope of climate impacts analysis, particularly for infrastructure projects (including interstate pipelines, high-voltage electric transmission lines)

(iii) Clarification in Final Guidance that separate analysis of cumulative effects of GHG emissions is not necessary, since the global nature of climate change impacts essentially makes the entire effects analysis a cumulative effects analysis

(e) De-emphasizing Cost-Benefit Analysis / “Social Cost of Carbon” (i) Explains that agencies should not use a monetary cost-

benefit analysis when they are also considering important qualitative issues

(ii) Agencies should describe the assumptions, inputs, uncertainty, and limitations of models that purport to monetize the impacts of GHG emissions

(f) Mitigation Measures

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(i) Highlights the importance of mitigating climate change impacts from GHG emissions

(ii) Encourages federal agencies to ensure that mitigation measures are “additional, verifiable, durable, enforceable, and will be implemented.”

(iii) Potential mitigation measures suggested include enhanced energy efficiency, lower GHG-emitting technology, carbon capture, sustainable land management practices, and beneficial use of some GHGs such as methane

(iv) Note: NEPA is a procedural statute, and there are no substantive requirements under NEPA for federal agencies to adopt mitigation measures as part of their NEPA review (although mitigation required by other authorities should be considered in the NEPA evaluation)

(2) Considering Potential Impacts of Climate Change on the Project and the “Affected Environment” Evaluated Under NEPA

(a) Assessing the current and projected future state of the environment and affected communities should take into account anticipated impacts from climate change (based on authoritative climate change reports)

(b) Particularly applicable for projects considered vulnerable to the effects of climate change (e.g., increasing sea level, drought, high intensity precipitation events, increased fire risk, or ecological change)

(c) Encourages agencies to consider alternatives that would not only reduce the project’s impact on the environment, but that would make affected communities “more resilient to the effects of climate change.”

D. Implications (1) Although the guidance is not legally binding on federal agencies, failure to

adhere to the guidance could make environmental reviews vulnerable to legal challenge

(a) Courts rely on agency guidance as “persuasive authority”; in practice many federal agencies defer to CEQ guidance documents

(b) As a result, this guidance has the potential to delay environmental review and permitting timelines as agencies determine how to incorporate the guidance into their reviews, and will likely increase the complexity of NEPA reviews going forward.

(2) Heavy reliance on agency discretion may lead to inconsistent application between different federal agencies

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(a) Impacts on agency coordination provisions of streamlined NEPA review procedures

(3) Litigation is likely (a) Environmental groups are likely to rely on the Final Guidance in

legal challenges to NEPA reviews (b) Potential challenges to the guidance itself

(i) Interest groups’ concerns that the guidance goes beyond the authorization of NEPA itself

(ii) Members of Congress have argued the Final Guidance is procedurally defective because the CEQ does not have (and the President has not nominated) a Senate-confirmed chairman.