September 2020 Vol. 75 No. 9

Washington Watch

Pro-Pipeline Changes to NEPA Challenged

Stephen Barlas | Washington Editor

One lawsuit has already been filed contesting the President Trump administration’s July pro-pipeline changes to the National Environmental Policy Act (NEPA). The White House Council on Environmental Quality’s (CEQ) gave the Federal Energy Regulatory Commission (FERC) new authority to discount greenhouse gas emissions when approving applications for new interstate pipeline construction.

That was the major, but not the only, boost to pipeline construction provide by the CEQ when it published new NEPA rules. Among other things, the new rules constrict the kinds of “effects” federal agencies must consider when preparing an environmental impact statement
(EIS). The CEQ changes affect all federal agencies, not just FERC.

The new rules go into effect ostensibly on Sept. 12, 2020. But the first lawsuit aiming to set the new rules aside was filed in federal district court in Virginia on July 29. If Democrats gain control of the Senate and White House in November, they could pass legislation making the NEPA changes moot.

“We will pursue every legal avenue to fight back against this anti-democratic, racist and deeply destructive plan,” said Michael Brune, Sierra Club executive director.

The lawsuit filed on July 29 by a number of regional “riverkeeper” groups and the National Trust for Historic Preservation argues the CEQ violated the Administrative Procedures Act, which lays out steps federal agencies must take in making rules changes.

These groups argue the CEQ: “… disregarded clear evidence from over 40 years of past implementation; ignored the reliance interests of the citizens, businesses and industries that depend on full and complete NEPA analyses; and turned the mandatory public engagement process into a paper exercise…”

According to the law firm Hogan Lovells, the outcome of the November election could stop the rule in its tracks. Under the Congressional Review Act, a new rule that was issued within 60 legislative days before Congress’ adjournment prior to an election can be repealed by Congress.

“This NEPA rule would fall within that time frame and repeal is likely if the election results in Democrats controlling Congress or if there is a change in the White House,” the law firm said.

Despite the cloudy legal and political outlook, the Interstate Natural Gas Association of America (INGAA) praised the changes.

“Most importantly, this modernization will improve environmental outcomes and restore the intent of NEPA by ensuring federal agencies focus their attention on significant environmental impacts that are relevant to their respective decision-making authorities,” said Alex Oehler, interim president and CEO of the INGAA.

The NEPA requirements come into play for all sorts of infrastructure projects: highways, railroad rights of way, logging and pipelines. For gas transmission lines, some recent federal court decisions have opened the door to confusion regarding FERC’s responsibility to include upstream or downstream greenhouse gas emissions when considering the environmental effects of a new pipeline and compiling an EIS.

The final rule from the CEQ, which would clear up that ambiguity, requires agencies consider environmental effects that are “reasonably foreseeable and have a reasonably close causal relationship to the proposed action.”

In addition, the CEQ stated that when an agency considers “reasonable alternatives” to an infrastructure project, which the agency is required to do under NEPA, those alternatives must be “technically and economically feasible,” and meet the purpose and need for the proposed action.

The old version of NEPA said that when performing an EIS, the federal agency had to consider direct, indirect and cumulative effects of the project. That language is now stricken, although “cumulative effects” – and some might say this could be stretched to apply to greenhouse gas emissions – can be considered, if they are reasonably foreseeable and have a reasonably close
causal relationship.

Casey Bradford, a partner with the law firm Jones Day, wrote in a commentary on Lexology, that the CEQ left some wiggle room for federal agencies to consider greenhouse gas emission if they can articulate a close causal relationship to a proposed action. But she expects such cases to be rare.

“With the CEQ’s analogy to proximate causation, the amendments likely narrow the window of success for arguments based on upstream or downstream emissions,” Bradford wrote. “Furthermore, the repeal of ‘cumulative impacts’ from the CEQ’s regulations removes what has been the other major framework for considering and litigating climate change effects under NEPA.”

In comments to the CEQ in March after the proposed rule was issued, INGAA pressed for exclusion of upstream/downstream effects from NEPA analysis of natural gas infrastructure projects.

“Neither upstream production nor downstream combustion activities are within the scope of FERC’s authority under NGA Section 7, and both activities are regulated by other agencies under federal and state laws other than the NGA,” INGAA said.

Other changes of note made by the CEQ:

  • Establishes presumptive time limits of two years for the preparation of EISs and one year for the preparation of environmental assessments
  • Requires joint schedules, a single EIS, and a single record of decision, where appropriate, for EISs involving multiple Federal agencies
  • Allows applicants/contractors to assume a greater role in preparing EISs, with appropriate disclosure of financial or other interests and with supervision and independent evaluation by the agency.

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