A L A S K A C A L I F O R NI A F L O R I D A M I D - P A C I F I C N O R TH EA S T NO R TH ER N R O C K I E S

NO R TH W ES T R O C K Y M O U N TA I N W A S H I NG T O N , D . C . I N T ER NA TI O NA L

N O R T H W E S T O F F I C E 7 0 5 S E C O N D A V E N U E , S U I T E 2 0 3 S E A T T L E , W A 9 8 1 0 4

T : 2 0 6 . 3 4 3 . 7 3 4 0 F : 2 0 6 . 3 4 3 . 1 5 2 6 N W O F F I C E @ E A R T H J U S T I C E . O R G W W W . E A R T H J U S T I C E . O R G

November 18, 2013

The Honorable Jo-Ellen Darcy

Assistant Secretary of the Army (Civil Works)

108 Army Pentagon

Washington, D.C. 20310-0108

The Honorable Nancy Sutley, Chair

White House Council on Environmental Quality

730 Jackson Place, N.W.

Washington, D.C. 20503

Re: U.S. Army Corps of Engineers Decisions for Determining Scope of

Environmental Review Under NEPA for Coal Export Facilities in Washington

and Oregon

Dear Ms. Darcy and Ms. Sutley:

We are writing on behalf of Climate Solutions, Sierra Club, National Wildlife Federation,

Columbia Riverkeeper, RE Sources, Washington Environmental Council, Greenpeace, Western

Organization of Resource Councils, and Friends of the Columbia Gorge with regard to a critical

question of public interest: the appropriate scope of the environmental review for three coal

export terminals currently going through the Army Corps permitting process: the Gateway

Pacific Terminal (“GPT”) facility near Bellingham, Washington, the Millennium Bulk

Terminals-Longview (“MBL”) facility near Longview, Washington, and the Coyote Island Dock

at the Port of Morrow in Oregon (“Morrow”). Specifically, the Corps has misapplied the

National Environmental Policy Act (“NEPA”) and its governing regulations by determining that

most of the environmental impacts of vital interest to the public are outside the scope of the

Corps’ environmental impact statement (“EIS”) for the GPT facility. Given its previous

statements, we anticipate that the Corps will make a similar erroneous decision with respect to

the scope of the environmental reviews for the MBL and Morrow facilities.

The Corps’ decision with respect to the scope of the GPT environmental review is wrong

and will not withstand federal court review. We ask you to revoke and revise the GPT scoping

memorandum. It serves neither the applicant nor the public to have the Corps spend the next few

The Honorable Jo-Ellen Darcy

The Honorable Nancy Sutley

November 18, 2013

Page 2

years studying the wrong things, only to have the EIS set aside by a federal court and be directed

to start over. Similarly, the Corps should make a lawful decision with respect to the appropriate

scope of NEPA review for the MBL and Morrow terminals.

As a threshold matter, we continue to believe that the best approach for dealing with

these three terminals is for the Corps to conduct an area-wide environmental impact statement

that covers the cumulative and joint impacts of all three terminals, which collectively would

move 100 million tons of Powder River Basin coal through a single rail line into the Pacific

Northwest, increase mining in the basin, and trigger dramatic increases in global greenhouse gas

emissions. An area-wide approach would allow the individual terminal-specific EIS processes to

continue, albeit with a focus on individual and site-specific concerns, while addressing many of

the cumulative impact concerns within a single process.

In the absence of an area-wide EIS, it is particularly crucial that the Corps analyze the

indirect and cumulative impacts of greatest concern to the public in the three terminal NEPA

processes. Unfortunately, already the Corps is making the wrong decisions in this regard, stating

that these concerns are too far removed from the Corps’ permitting responsibility to warrant

inclusion in the review. As explained in the accompanying legal memorandum, the Corps’

approach violates governing law, which requires consideration of all indirect effects that are

“proximately caused” by the decision under review. Determining proximate causation requires a

fact-specific inquiry into whether a given impact is a “reasonably foreseeable” result of an

action. Because significant increases in train and vessel traffic, mining, and GHG emissions are

all reasonably foreseeable results of the three pending coal terminals, the Corps is required by

law to include them in the EIS.

In deciding otherwise, the Corps has misapplied its own NEPA regulations, which define

the scope of Corps actions based on the amount of responsibility and control. But the Corps has

incorrectly applied regulations governing the scope of the action under review to determine the

scope of the effects of such action. There is no regulation or precedent that allows the Corps to

ignore indirect effects that are proximately caused by a permitting decision in a NEPA review

based on the amount of “responsibility and control” the Corps retains. Indeed, such an approach

could eviscerate the entire purpose of including indirect effects in a NEPA document, as they are

by definition later in time and space and not a direct result of the action being permitted.

As you are aware, recent hearings in the region on the proper scope of the EIS for the

GPT and MBL projects resulted in a total attendance of over 10,000 citizens, the overwhelming

majority of whom oppose the issuance of permits for coal export terminals. Over 280,000

citizens have submitted written scoping comments on the MBL and GPT proposals, and that

number continues to grow. Tens of thousands more have asked the Corps for a close evaluation

of all impacts from the Morrow project. The Corps cannot narrowly define the scope of the

A L A S K A C A L I F O R NI A F L O R I D A M I D - P A C I F I C N O R TH EA S T NO R TH ER N R O C K I E S

NO R TH W ES T R O C K Y M O U N TA I N W A S H I NG T O N , D . C . I N T ER NA TI O NA L

N O R T H W E S T O F F I C E 7 0 5 S E C O N D A V E N U E , S U I T E 2 0 3 S E A T T L E , W A 9 8 1 0 4

T : 2 0 6 . 3 4 3 . 7 3 4 0 F : 2 0 6 . 3 4 3 . 1 5 2 6 N W O F F I C E @ E A R T H J U S T I C E . O R G W W W . E A R T H J U S T I C E . O R G

MEMORANDUM

TO: Interested Parties

FROM: Jan Hasselman & Kristen L. Boyles

DATE: November 18, 2013

RE: Appropriate Scope of NEPA Analysis for Washington and Oregon Coal Export

Terminals

This memorandum explains how the National Environmental Policy Act (“NEPA”)

applies to the indirect and cumulative effects of proposed coal export terminals in the Pacific

Northwest that are of great interest to the public. It concludes that most if not all of the impacts

of critical concern in the process to date, including expanded rail and vessel traffic, coal mining,

and downstream combustion of exported coal, would be proximately caused by the U.S. Army

Corps of Engineers’ authorization to build the terminals, and must be included in the scope of the

environmental impact statement of the three terminal projects under review.

A. Overview of NEPA

NEPA, 42 U.S.C. §§ 4321–4370f, is our “basic national charter for protection of the

environment.” 40 C.F.R. § 1500.1(a). It makes environmental protection a part of the mandate

of every federal agency. 42 U.S.C. § 4332(1); Calvert Cliffs Coordinating Comm. v. U.S. Atomic

Energy Comm’n, 449 F.2d 1109, 1112 (D.C. Cir. 1971). It requires federal agencies to take

environmental considerations into account in their decisionmaking “to the fullest extent

possible.” 42 U.S.C. § 4332; 40 C.F.R. § 1500.2. It also supplements the existing authority of

agencies to allow them to act based on environmental considerations. 42 U.S.C. § 4335.

NEPA seeks to ensure that federal agencies take a “hard look” at environmental concerns.

Young v. Gen. Servs. Admin., 99 F. Supp. 2d 59, 67 (D.D.C. 2000). One of NEPA’s primary

purposes is to ensure that an agency, ‘“in reaching its decision, will have available, and will

carefully consider, detailed information concerning significant environmental impacts.’”

Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349 (1989). NEPA also

‘“guarantees that the relevant information [concerning environmental impacts] will be made

available to the larger audience,” including the public, “that may also play a role in the

decisionmaking process and the implementation of the decision.’” Id.

2

The cornerstone of NEPA’s protections is the environmental impact statement (“EIS”).

NEPA requires federal agencies to prepare an EIS before undertaking any “major federal action

significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C). The EIS

requires a detailed, “hard look” at the environmental impact of—and alternatives to—the

proposed action. Id. The EIS serves to ensure informed decisionmaking to the end that “the

agency will not act on incomplete information, only to regret its decision after it is too late to

correct.” Marsh v. Or. Natural Res. Council, 490 U.S. 360, 371 (1979). By considering the

environmental consequences of agency decisions, compliance with NEPA’s procedure is “almost

certain to affect the agency’s substantive decision.” Robertson, 490 U.S. at 350.

Of course, the development of an EIS is not an end in itself—its purpose is to inform the

substantive decision that an agency will ultimately make. Id. at 350. With respect to the

Gateway Pacific Terminal in Bellingham, Washington (“GPT”), the Millennium Bulk Logistics

Terminal in Longview, Washington (“MBL”), and the Morrow Pacific Terminal on the Oregon

side of the Columbia River, the Corps must make a decision to grant, condition, or deny Clean

Water Act and Rivers and Harbor Act permits. Importantly, the Corps’ discretion with respect to

what to consider in its permit decisions is sweeping. See 33 C.F.R. § 320.1-.4 (general

regulatory policies); id. § 230.1-.97 (guidelines for fill permits). Notably, permits cannot be

granted if they are “contrary to the public interest.” Standards for such review are exceedingly

broad, balancing “the benefits which reasonably may be expected to accrue from the proposal”

with “its reasonably foreseeable detriments.” 33 C.F.R. § 320.4(a)(1). The Corps is required to

consider “all factors which may be relevant to the proposal” as well as cumulative effects. The

list of relevant considerations is expansive, and includes not just a range of environmental

concerns, but also economics, flood hazards, navigation, energy needs, safety, and “in general,

the needs and welfare of the people.” Id. Additional criteria spelled out in the Corps’ public

interest regulation include: “the relative extent of the public and private need” for the project; the

practicability of alternatives that accomplish the objective of the project; and “the extent and

permanence of the beneficial and/or detrimental effects” of the project. Id. § 320.4(a)(2).

Finally, the Corps is directed to consider “overriding national factors of the public interest.” 33

C.F.R. § 320.4(j)(4). One such “national objective” that is called out is “energy conservation and

development.” Id. § 320.4(n); James City Cnty. v. EPA, 12 F.3d 1330, 1335 (4th Cir. 1993)

(“Congress obviously intended the Corps of Engineers in the initial permitting process to

consider the total range of factors bearing on the necessity or desirability of building” a project).

Obviously, the Corps cannot make this evaluation appropriately unless it has before it all the

factors that weigh on these questions.

B. Federal Agencies Must Consider All Direct, Indirect, and Cumulative Effects of a

Proposed Project in Their EIS.

NEPA’s governing regulations define what “range of actions, alternatives, and impacts

[must] be considered in an environmental impact statement.” 40 C.F.R. § 1508.25. This is in

part what is known as the “scope” of the EIS. First, the EIS must consider direct and indirect

effects. The direct effects of an action are those effects “which are caused by the action and

occur at the same time and place.” 40 C.F.R. § 1508.8(a). The indirect effects of an action are

those effects “which are caused by the action and are later in time or farther removed in distance,

but are still reasonably foreseeable.” 40 C.F.R. § 1508.8(b). For example, “[i]ndirect effects

may include growth inducing effects and other effects related to induced changes in the pattern

3

of land use, population density or growth rate, and related effects on air and water and other

natural systems, including ecosystems.” Id. In fact, “[f]or many projects, these secondary or

induced effects may be more significant than the project’s primary effects.... While the analysis

of secondary effects is often more difficult than defining the first-order physical effects, it is also

indispensable.” Fifth Annual Report of the Council on Environmental Quality (CEQ), 410-11

(Dec. 1974).1

An environmental impact statement must also analyze and address the cumulative

impacts of a proposed project. 40 C.F.R. § 1508.25(c)(3). Cumulative impacts are the result of

any past, present, or future actions that are reasonably certain to occur. Such effects “can result

from individually minor but collectively significant actions taking place over a period of time.”

40 C.F.R. § 1508.7. By way of comparison, indirect effects are effects caused by a project, albeit

potentially later in space or time. Cumulative effects are separate actions that are not caused by

the action under review, but that increase the level of concern when added to the effects of the

project.

The “scope” of the EIS (or the decision not to prepare one) includes a determination of

which direct, indirect, and cumulative effects are to be included and which are to be excluded.

40 C.F.R. § 1508.8. In the case of the GPT, MBL, and Morrow facilities, the scope of the EIS is

a critical threshold question to an adequate environmental review, since many of the critical

environmental impacts associated with these projects fall into the category of indirect and

cumulative effects that are removed in space or time from the terminal site.

C. Indirect Effects Must Be Considered Where It Is “Reasonably Foreseeable” That

They Will Result from the Action Under Review.

Courts frequently are called upon to determine whether indirect effects that are related to

an action subject to NEPA should be included in the EIS. 2

The standard for including such

indirect effects in an EIS is whether they are “proximately caused” by the action under review.

See Dep’t of Transp. v. Public Citizen, 541 U.S. 752, 767 (2004) (effect must have a “reasonably

close causal relationship” to the proposed action). One way of evaluating whether proximate

cause exists is if an environmental impact is “reasonably foreseeable.” Robertson, 490 U.S. at

355. “Reasonably foreseeable” effects are those that are “sufficiently likely to occur that a

person of ordinary prudence would take it into account in reaching a decision,” meaning that an

agency does not have to consider potential effects that are highly speculative or indefinite.

Sierra Club v. Marsh, 976 F.2d 763, 767-68 (1st Cir. 1992). In general, “the determination of

whether a future action is foreseeable turns on the specific facts of the case.” City of Oxford v.

F.A.A., 428 F.3d 1346, 1355 n. 22 (11th Cir. 2005).

1 Available at http://www.slideshare.net/whitehouse/august-1974-the-fifth-annual-report-of-

thecouncil-on-environmental-quality.

2 These questions can arise in two ways: first, where an agency decides that an action’s effects

are minor and no EIS is needed—reaching that conclusion by ignoring some indirect effect; and

second, where an EIS is prepared but challenged as failing to consider a particular effect. There

does not appear to be any meaningful distinction between these kinds of cases for purposes of

determining the scope of the EISs for the coal export terminals.

4

Notably, agencies cannot avoid their responsibility to consider such future effects by

claiming that they are uncertain, as NEPA requires some element of predictive behavior. City of

Davis v. Coleman, 521 F.2d 661, 676 (9th Cir. 1975) (“Reasonable forecasting and speculation is

thus implicit in NEPA, and we must reject any attempt by agencies to shirk their responsibilities

under NEPA by labeling and all discussion of future environmental effects as ‘crystal ball

inquiry’.”); 46 Fed. Reg. 18026 (Mar. 23, 1981) (“The EIS must identify all the indirect effects

that are known, and make a good faith effort to explain the effects that are not known but are

‘reasonably foreseeable.’ Section 1508.8(b). …[I]f there is total uncertainty about the identity

of future land owners or the nature of future land uses [for example], then of course, the agency

is not required to engage in speculation or contemplation about their future plans. But, in the

ordinary course of business, people do make judgments based upon reasonably foreseeable

occurrences.”).

The most common scenario in which indirect effects arise is when a project induces

growth or development, for example, a highway project that causes increased suburban sprawl.

The law is clear that these types of growth-inducing impacts must be analyzed at the time of the

initial highway project. City of Davis, 521 F.2d at 676; see also Sierra Club v. Marsh, 769 F.2d

868, 877-82 (1st Cir. 1985) (Corps NEPA document assessing impact of decision to approve

cargo terminal must disclose impacts of induced private land development).

D. An EIS Must Include Rail and Ship Vessel Impacts That are Proximately Caused

by the Coal Terminals.

At this point, it is well settled—particularly in the Ninth Circuit Court of Appeals—that

an agency must evaluate the environmental and public health impacts of additional transportation

that is proximately caused by the decision under review.

For example, in Ocean Advocates v. U.S. Army Corps of Eng’rs, 402 F.3d 846 (9th Cir.

2005), the Ninth Circuit held that the Corps violated NEPA in approving an oil dock expansion

because the Corps did not consider the increased vessel traffic (and consequent increased risk of

oil spills) resulting from the dock’s expansion. Notably, the dock in question was in Cherry

Point, Washington—a few hundred yards away from the proposed coal terminal dock for the

GPT project. Similarly, in Barnes v. Dep’t of Transp., 655 F.3d 1124, 1138-39 (9th Cir. 2011),

the court held that NEPA requires an agency to consider the effects of increased air traffic likely

to follow from construction of new runway. Finally, in S. Fork Band Council of W. Shoshone of

Nev. v. U.S. Dep’t of the Interior, 588 F.3d 718, 725 (9th Cir. 2009), the court found unlawful an

agency’s decision to grant a mining permit because it failed to evaluate the environmental

impacts of transporting and processing the ore at a facility 70 miles away. The court noted that

“[t]he air quality impacts associated with transport and off-site processing of the five million tons

of refractory ore are prime examples of indirect effects that NEPA requires be considered.” Id.

(emphasis added).

The impacts of additional rail traffic associated with these two projects are a matter of

critical public concern—communities all along the rail line between the Powder River Basin and

the terminal sites would see dramatic increases in train traffic associated with these projects,

estimated at over 30 additional trains per day. Commenters have raised significant concerns

5

regarding the public health impacts of coal dust, diesel emissions, noise, and delay of emergency

response capability. Others have raised concerns about impacts to road traffic and other rail

system users, such as passenger rail and other important but potentially displaced commodities

such as agricultural products. Finally, several commenters expressed concern about the GHG

impacts of transporting 100 million tons of coal via rail across a third of the country, which itself

is a significant source of GHGs that undercuts the commitment of both the state and federal

governments to reduce GHG emissions. The Corps’ decision to limit its evaluation of rail-

related impacts to only the Custer Spur will mean virtually all of these concerns would go

unaddressed in the Corps’ GPT EIS and likely the MBL and Morrow terminals’ environmental

review as well. This decision is inconsistent with well-settled law in this Circuit and should be

reversed.

The Corps’ decision with respect to vessel traffic represents an improvement over its rail

decision because it will at least evaluate impacts within Puget Sound and the Strait of Juan de

Fuca, but it nonetheless imposes an arbitrary line that ignores some of the critical impacts of

concern to the public. Specifically, the Corps’ scoping decision states that vessel traffic impacts

will be considered up until a point eight miles from a buoy off Cape Flattery. This arbitrary

cutoff ignores at least two critical indirect impacts, if not more. First, it ignores the GHG

emissions of the vessel traffic for the entire ocean journey. There is no justification in policy or

law for cutting off ship traffic GHG emissions at an arbitrary boundary offshore, since all of the

GHG vessel emissions are proximately caused by the decision under review. Vessel GHG

emissions are both easy to calculate and important to consider. Second, commenters have

expressed concerns about vessel impacts through other territorial waters of the United States and

Canada, including Umiak Pass in Alaska, where increased vessel traffic would increase the risk

of spills, collisions, accidents, and other environmental harms. Again, there is no rational

explanation as to why vessel impacts and spill risk should be evaluated in one part of the country

but not another. The law requires consideration of vessel impacts that are proximately caused by

the Corps’ permitting decision, not solely in Puget Sound, but for the entire predictable vessel

journey.

Rail and vessel traffic, like the impacts discussed below, are required because they are

proximately caused by the Corps’ action. In Public Citizen, the Supreme Court reasoned that an

agency did not need to include impacts in its NEPA review where it had lacked the power to act

on whatever information resulted. Here, in contrast, the Corps’ broad responsibility under the

CWA to consider the public interest and environment generally when it makes its permit

decisions gives it abundant authority to act on the information related to rail and vessel impacts.

The Corps may decide that the benefits of the project are worth such impacts; it may decide that

they need to be mitigated; or it may decide that the risks outweigh the project’s benefits.

However, the Corps cannot carry out its substantive duties if it ignores these issues in the coal

terminal EISs.

E. Additional Mining Is an Indirect Effect of the Terminals That Must Be Included

in the EIS.

Permitting export terminals that would ship 100 million tons of Powder River Basin coal

to Asian markets will “proximately cause” the mining of an additional 100 million tons of coal

beyond what would otherwise be mined for U.S. consumption—no other conclusion is possible.

6

U.S. mining companies have told their investors that because of declining U.S. consumption, the

only hope for getting new mines active is by opening up West Coast coal terminals.3 The only

new mine in Wyoming recently halted construction because, its chief executive told newspapers,

there is no export capacity to serve.4 Nor is the location and extent of such additional mining

speculative. Cloud Peak Coal, for example, has explicitly told investors that a series of mines it

hopes to develop in Montana will not go forward until Washington export terminals are

permitted.5 Ambre Energy owns or has an interest in two operating mines in the Basin and two

existing deposits, and it has explicitly told its investors that it hopes to integrate its two proposed

coal export terminals with its mines. “Our target is low-ash, low-moisture coal deposits that are

close to rail infrastructure so they can supply our thermal coal export business.” 6

Simply put,

without the terminals, the vast volumes of coal that proponents would like to ship will remain in

the ground. Accordingly, the impacts from additional mining that will be caused by the MBL

project, and other coal terminals, should be included in the EIS.

In Sierra Club v. Dep’t of Energy, 255 F. Supp. 2d 1177 (D. Colo. 2002), a court found

that a lease and easement for road had to consider environmental effects of the mine that would

be made accessible by the road. Even though the mine was on private property and there was no

certain date at which mining would begin, it was still a “reasonably foreseeable” result of the

agency decision to permit the road. For the same reasons, it is a “reasonably foreseeable” result

of the Corps’ decision to authorize the export terminals that additional mining will occur. In

part—for example, the MBL facility—we know precisely where that mining would take place.

These indirect impacts of the Corps’ decision should be included within the EIS.

Project proponents have argued that mining need not be considered in this EIS because

they have already been discussed in other EIS documents, for example, mining leases authorized

by the Bureau of Land Management.7 This argument reflects a misunderstanding of NEPA. The

goal of including mining in these EISs is not simply the value of another chapter in a document.

It is to inform the Corps’ substantive decision as to whether this permit should be granted. The

extent to which these permit decisions will proximately cause additional environmentally

destructive mining is part of the Corps’ public interest balancing as it exercises its CWA

discretion. NEPA authorizes agencies to tier to other NEPA document—for example, suitable

BLM EISs—where appropriate. What is not permissible is to pretend that the issue simply

doesn’t exist.

3 http://climatesolutions.org/cs-journal/cloud-peak-energy-201call-in201d-for-coal-exports-from-

the-west-coast.

4 http://climatesolutions.org/cs-journal/memo-to-the-very-serious-people-resistance-isn2019t-

futile-and-irony-can-be-delicious.

5 http://seekingalpha.com/article/1182631-cloud-peak-energys-ceo-discusses-q4-2012-results-

earnings-call-transcript.

6 http://www.ambreenergy.com/us-thermal.

7 As a threshold matter, the argument is simply incorrect because the BLM has not performed

full EISs on all lease sales and lease expansions in the Powder River Basin. Moreover, some

BLM EISs are currently under court review regarding claims of inadequate disclosure or

consideration of mining-related impacts.

7

F. Downstream Consumption of Fossil Fuels Is an Indirect Effect that Must be

Included in the EIS.

Finally, a critical concern to decision-makers and the public is whether the decision to

authorize these terminals—which would be the only coal export infrastructure on the West Coast

of the United States—would result in GHG emissions that should be evaluated in the EIS. The

GHG emissions from burning 100 million tons of coal are staggering, equivalent to about three

times the entire gross emissions of Washington State.8

As a threshold matter, there no longer is any meaningful dispute that GHG emissions

must be included within an EIS pursuant to NEPA. The Ninth Circuit has rejected the argument

that individual actions represent too minor of a contribution to the global problem to merit

consideration under NEPA. “The impact of greenhouse gas emissions on climate change is

precisely the kind of cumulative impacts analysis that NEPA requires agencies to conduct. Any

given rule setting a [vehicle fuel-efficiency] standard might have an ‘individually minor’ effect

on the environment, but these rules are ‘collectively significant actions taking place over a period

of time.’” Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172,

1217 (9th Cir. 2008) (internal citations omitted). Draft CEQ guidance published in 2010 directs

agencies to consider indirect GHG-related impacts. “Analysis of emissions sources should take

account of all phases and elements of the proposed action over its expected life, subject to

reasonable limits based on feasibility and practicality.” CEQ, Draft NEPA Guidance on

Consideration of the Effects of Climate Change and Greenhouse Gas Emissions (Feb. 18, 2010),

at 5. Although the draft guidance has yet to be finalized, CEQ did emphasize that consideration

of GHG emissions was not a new component of the NEPA process, but an important factor to be

considered under the existing framework. Id. at 11.9

Downstream consumption of fuels is subject to the same analysis as any other indirect

effect: is the impact proximately caused by the decision under review? On one level, the

decision is simple: the EIS should consider the GHG impacts of burning 100 million tons of coal

that would be shipped from the terminals because it is not just “reasonably foreseeable” that it

will be burned—it is inevitable. There is no other thing that could conceivably happen to that

coal except be burned, and hence its substantial GHG emissions should be considered in the EIS

and weighed by the Corps as part of its substantive CWA decisions.

8 Washington Greenhouse Gas Inventory for 2010, available at https://fortress.wa.gov/ecy/

publications/publications/1202034.pdf. One ton of PRB coal generates 2.86 tons of CO2. See

http://www.eia.gov/coal/production/quarterly/co2_article/co2.html.

9 Moreover, there is no rule that says consideration of indirect or direct effects stops at the U.S.

borders—indeed, quite the opposite. Gov’t of the Province of Manitoba v. Salazar, 691 F. Supp.

2d 37, 51 (D.D.C. 2010); Executive Order No. 12114 (1979) (EIS required for “Major federal

actions significantly affecting the environment of the global commons”); CEQ Guidance on

NEPA Analyses for Transboundary Impacts (July 1, 1997) (case law has “reinforced the need to

analyze impacts regardless of geographic boundaries of United States”).

8

Caselaw suggests an alternative approach to calculating GHG emissions in the context of

permitting export terminals. In Mid States Coal. for Progress v. Surface Transp. Bd., 345 F.3d

520, 550 (8th Cir. 2003), the Eighth Circuit invalidated an authorization to build a new rail line

(that would make available 100 million tons of low-cost coal) because the EIS failed to consider

the increased power plant emissions that would be caused by this increased availability of coal.

The Court rejected the argument that “demand for coal will be unaffected by an increase in

availability and a decrease in price,” observing that the availability of cheap coal will make coal

a more attractive option for future power generation compared to other options. “Even if this

project will not affect the short-term demand for coal, which is possible since most existing

utilities are single-source dependent, it will most assuredly affect the nation’s long-term demand

for coal….” Id. at 549. The Court also rejected the argument that the effects could be ignored

because the impacts were “speculative”—even if the extent of the effects were unknown, the

“nature” of the effect was not. Id.

In Border Plant Working Grp. v. Dep’t of Energy, 260 F. Supp. 2d 997, 1028 (S.D. Cal.

2003), a district court held that the federal agency, when considering proposed electrical

transmission lines that crossed the U.S.-Mexico border, was required to consider the effects of

the operation of the coal plant at the end of the transmission line. Because there was nothing in

the record to suggest that the Mexican power plant could sell its power in the absence of the

transmission line, the court found the line to be a “cause” of the plant’s emissions, and hence the

plant’s emissions needed to be included in the EIS.

These cases indicate that NEPA requires that the Corps disclose and consider how the

availability of so much low-cost PRB coal will influence short-term consumption patterns and

long-term investment decisions in Asia. Recent scholarly analysis agrees that this would be the

appropriate approach for coal export terminals. See NEPA & Downstream Greenhouse Gas

Emissions of U.S. Coal Exports (Columbia Law School, 2013), at 12 (“If an increase in exports

is a reasonably foreseeable result of allowing the construction of new ports, then the emissions

associated with that export may be indirect effects that are subject to NEPA review.”). Indeed,

evidence submitted by commenters shows that this is precisely what will happen. In The

Greenhouse Gas Impact of Exporting Coal from the West Coast: An Economic Analysis,

Dr. Thomas M. Power of the University of Montana concluded:

The proposed coal export facilities in the Northwest will result in more coal

consumption in Asia and undermine China’s progress towards more efficient

power generation and usage. Decisions the Northwest makes now will impact

Chinese energy habits for the next half-century; the lower coal prices afforded by

Northwest coal exports encourage burning coal and discourage the investments in

energy efficiency that China has already undertaken.

We acknowledge that others take different views of the impacts of exporting coal, and

NEPA does not require agencies to foresee the unforeseeable. It does, however, require the

agencies to take a “hard look” at these questions. While forecasting price and specific

consumption rates with any precision can be challenging, it is relatively easy to calculate the

GHG emissions associated with any given volume of coal—and the companies have already

estimated the amounts of coal they wish to ship. The public, and NEPA’s policies, are well

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served by providing a forum to disclose and consider the competing views as the impacts of

opening up large volumes of low-cost PRB coal to the Asian market.

To summarize, the law is quite clear that agencies must consider all effects that are

proximately caused by the action under review, regardless of their location and without regard to

the extent of the agency’s ability to regulate those effects. An effect is proximately caused if it is

reasonably foreseeable. Increased train and vessel traffic, additional surface mining of coal, and

increased coal combustion in Asia are all reasonably foreseeable effects of the Corps’ decision to

authorize terminals capable of exporting 100 million tons of coal, and should be included within

the scope of the EIS.

G. The Corps Has Misapplied Its NEPA Regulations Governing Scope.

The Corps has its own set of regulations governing implementation of NEPA for projects

within its jurisdiction. 33 C.F.R. Pt. 325, App. B. These regulations direct the district engineer

to determine the “scope” of the NEPA analysis with reference to the extent of the Corps’

“control and responsibility” over components of a project that are outside the Corps’ jurisdiction.

Id. ¶ 7(b). In these regulations, Corps addresses a concern that frequently arises where a major

private project (for example, a 1,000 acre subdivision development) needs a Corps permit for a

small or even tiny component of that project (say, 2 acres of wetlands fill as part of that

development for one of the holes on the golf course). Where the Corps does not have “control

and responsibility” of the project as a whole, its regulations direct it to look just at the effects of

its permit—i.e., the two acres of wetlands fill—and not the project as a whole. Id.

The Ninth Circuit has developed a test to determine when the Corps can properly limit

the scope of its review to just the area effected by its permit or must look more broadly at the

entire project facilitated by its permit. See White Tanks Concerned Citizens v. Strock, 563 F.3d

1033 (9th Cir. 2009). On one end of the spectrum, where jurisdictional waters are concentrated

in a way that would be easy to avoid—meaning the project could proceed without needing a

Corps permit without significant change—the NEPA analysis can be limited to just the effect of

the permit (e.g., the 2 acre wetland) rather than the project as a whole (the 1,000 acre

development). See, e.g., Wetlands Action Network v. U.S. Army Corps of Eng’rs, 222 F.3d 1105

(9th Cir. 2000) (upholding decision not to complete EIS for wetland fill associated with

development project). On the other end of the spectrum, where jurisdictional waters are

disbursed throughout the site such that the project would effectively be impossible without Corps

permits, issuance of the permit is essentially the “cause” of all of the project’s environmental

effects, and the environmental review must include them. See, e.g., Save Our Sonoran v.

Flowers, 408 F.3d 1113 (9th Cir. 2005). It is not the percentage of the project that are “waters of

the U.S.” subject to Corps’ jurisdiction that matters, but “whether the waters must be affected to

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fulfill the project’s goals.” White Tanks, 563 F.3d at 1041 (noting that full review was warranted

in case where 5% of project was subject to federal jurisdiction).10

The Corps’ July 3, 2013 scoping memorandum for the GPT facility focused on the

“control and responsibility” regulation, applying the various factors to find that it actually has

“control and responsibility” over all of the GPT project. The memo noted that 50% of the upland

facilities occur in regulatory wetlands subject to Corps jurisdiction and, of course, the project

requires a dock subject to Corps permitting. In other words, applying the Ninth Circuit’s White

Tanks test results in a clear answer—the entire project must be included in the Corps’

environmental analysis, because without the Corps’ permit, the project could not go forward.

Accordingly, under governing precedent, the entire GPT project is subject to Corps’ control and

responsibility, and all direct, indirect, and cumulative effects should be included within the scope

of the EIS.

However, having concluded that the entire GPT project is under the Corps’ control and

responsibility, the memo next asserts that “many of the activities of concern to the public, such

as rail traffic, coal mining, shipping coal outside U.S. waters and burning of coal overseas, are

outside the Corps’ control and responsibility.” Memo at 6. The Corps claims that these

activities are “too attenuated and distant from the proposed activities being evaluated by the

Corps to be considered effects of the Corps’ permit actions.” Id.

This analysis has confused the action that is subject to NEPA in the first place with the

effects that must be considered in the EIS. Rail and ship traffic, mining, and coal combustion are

not components of the GPT, in the same sense that filling of the wetlands or construction of the

dock are components of the project. Rather, they are effects of the action: as a result of the

Corps’ authorization to build the GPT, it is reasonably foreseeable that there will be an increase

in rail and vessel traffic, additional mining, and additional coal consumption. Under controlling

Ninth Circuit law, those indirect effects must be included in the EIS and the amount of “control

and responsibility” the Corps has over them simply has nothing to do with it.

In Save Our Sonoran, the Ninth Circuit found that the Corps had incorrectly conflated the

extent of its jurisdiction with the extent of the effects it must consider:

Although the Corps’ permitting authority is limited to those aspects of a

development that directly affect jurisdictional waters, it has responsibility under

NEPA to analyze all of the environmental consequences of a project. Put another

way, while it is the development’s impact on jurisdictional waters that determines

the scope of the Corps’ permitting authority, it is the impact of the permit on the

environment at large that determines the Corps’ NEPA responsibility. The Corps’

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The Ninth Circuit has also emphasized that the views of other agencies, especially the EPA,

are relevant in determining whether to uphold a Corps determination regarding scope. Id. at

1042. Where, as here, EPA and/or other agencies object on the record to the Corps’

jurisdictional decisions, it is more likely to be found arbitrary and capricious. Id. In its comment

letters on coal export terminals, EPA has asked for a far broader scope than the one the Corps

adopted for the GPT facility.

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responsibility under NEPA to consider the environmental consequences of a

permit extends even to environmental effects with no impact on jurisdictional

waters at all.

Save Our Sonoran, 408 F.3d at 1122 (emphasis added); see also Border Plants Working Grp.,

260 F. Supp. 2d at 1014 (discussing difference between scope of “action” and scope of “review,”

which includes effects of the action); Sierra Club v. Mainella, 459 F. Supp. 2d 76 (D.D.C. 2006)

(invalidating environmental assessment for a permit to drill underneath a National Park unit

because agency did not inadequately consider the environmental impacts of the surface drilling

operations that were outside the Park, even though agency could not directly regulate them). As

one recent scholarly paper correctly noted, “If all effects of upstream or downstream activities

were excluded from NEPA analysis because the relevant agency did not have direct control over

those actions, then the specific inclusion of ‘indirect’ effects in the CEQ regulations would be

largely meaningless.” NEPA & Downstream Greenhouse Gas Emissions of U.S. Coal Exports

(Columbia Law School, 2013), at 12. In almost every case discussed above, the indirect impacts

that a court directed the agency to include in its environmental review was not within the

“control and responsibility” of the agency making the decision—that is indeed a hallmark of

indirect effects in most cases.

The reasoning in these cases is equally applicable here: the scope of the EIS should be

determined by the environmental effects that are proximately caused by the Corps’ decision, not

the extent to which such effects are under the Corps’ “control.” The Corps’ misapplication of its

regulations is leading not just to a violation of governing law, but it undermines public

confidence in the process that is crucial to informed decisionmaking. Most importantly, an

inadequately scoped EIS will leave the Corps unable to fulfill its statutorily mandated

responsibility to consider the public interest, the environment, and other factors when deciding

whether or not to grant a permit for any of these three coal export terminals.