Greenhouse Gases “Rise” in Importance for NEPA Reviews –National Environmental Policy Act

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CEQJust before Christ­mas, the White House Coun­cil on Envi­ron­men­tal Qual­i­ty (“CEQ”) pub­lished revised draft guid­ance intend­ed to direct fed­er­al agen­cies on when and how to con­sid­er the effects of green­house gas (“GHG”) emis­sions and cli­mate change when eval­u­at­ing the envi­ron­men­tal effects of pro­posed agency actions under the Nation­al Envi­ron­men­tal Pol­i­cy Act (“NEPA”).  Con­sid­er­a­tion of cli­mate change is not a new phe­nom­e­non in agency NEPA reviews, deci­sion-mak­ing, or lit­i­ga­tion.  Nev­er­the­less, the draft guid­ance is note­wor­thy for the sheer breadth of its envi­sioned cli­mate change analy­sis for all projects with a fed­er­al nexus.  It could sig­nif­i­cant­ly alter how fed­er­al agen­cies approach NEPA review.  As writ­ten, the open-end­ed draft guid­ance could engen­der sig­nif­i­cant delays, con­fu­sion, or new grounds for chal­leng­ing projects.

This draft guid­ance rep­re­sents a sig­nif­i­cant depar­ture from an ear­li­er ver­sion released almost four years ago (and nev­er final­ized).  If adopt­ed, the draft guid­ance would apply to all pro­posed major fed­er­al actions, includ­ing site-spe­cif­ic projects, project grants, per­mit issuance, rule­mak­ing, and land and resource man­age­ment deci­sions.  Addi­tion­al­ly, this recent draft more ful­ly rec­og­nizes agency dis­cre­tion in com­ply­ing with NEPA and allows greater flex­i­bil­i­ty in deter­min­ing when, how, and to what extent cli­mate change analy­ses are to be includ­ed in agency NEPA doc­u­ments.  From a project proponent’s view­point, that could be a good or a bad thing.

The CEQ sets out a two-fold inquiry for all pro­posed major fed­er­al actions.  Specif­i­cal­ly, fed­er­al agen­cies should consider:

  1. the extent to which a pro­posed action and its rea­son­able alter­na­tives con­tribute to cli­mate change (through GHG emis­sions or prox­ies); and
  2. ways in which a chang­ing cli­mate may affect the resources impact­ed by the pro­posed action, or the ways in which cli­mate change may affect the pro­posed action itself.

While CEQ dis­claims any new legal­ly bind­ing require­ments, as a prac­ti­cal mat­ter most agen­cies will defer and con­form to the new guid­ance for pend­ing and future NEPA analy­ses.  Giv­en the ubiq­ui­tous scope of cli­mate change con­sid­er­a­tions, it is crit­i­cal that stake­hold­ers pro­vide com­ments with­in the next 60 days before CEQ con­sid­ers final­iz­ing the guidance.

Here are some of the guid­ance highlights:

When and How to Con­sid­er GHG Emissions

Cli­mate change is the ulti­mate cumu­la­tive effect.  The CEQ rec­og­nizes the dif­fi­cul­ty in dis­cern­ing the impact that any giv­en fed­er­al action may have on the envi­ron­ment via its con­tri­bu­tion to over­all cli­mate change.  Yet, the guid­ance dis­ap­proves of agency choic­es not to con­sid­er cli­mate impacts based on the mere fact that “emis­sions from a gov­ern­ment action or approval rep­re­sent only a small frac­tion of glob­al emis­sions.” 79 FR 77801, 77825 (Decem­ber 24, 2014).

When describ­ing the cli­mate change impacts of a giv­en action, the guid­ance encour­ages agen­cies to use a “quan­ti­ta­tive analy­sis” of emis­sions where “tools or method­olo­gies are avail­able” to project and quan­ti­fy those emis­sions.  Id. at 77809.  CEQ pro­vides a “ref­er­ence point” of 25,000 met­ric tons of CO2-equiv­a­lent emis­sions on an annu­al basis as a rec­om­mend­ed min­i­mum thresh­old to trig­ger quan­ti­ta­tive analy­sis of a project’s con­tri­bu­tion to cli­mate change.  The guid­ance is care­ful to not to sug­gest that this thresh­old addi­tion­al­ly is a proxy for “sig­nif­i­cant” effects under NEPA that would require a full-blown Envi­ron­men­tal Impact State­ment.  For actions esti­mat­ed to con­tribute few­er emis­sions, agen­cies should engage in a quan­ti­ta­tive analy­sis if “eas­i­ly accom­plished”; oth­er­wise, a qual­i­ta­tive analy­sis is appro­pri­ate.  Id. at 77807.

While the guid­ance indi­cates that com­par­isons of a giv­en action’s emis­sions to glob­al emis­sions are “not an appro­pri­ate method for char­ac­ter­iz­ing the poten­tial impacts asso­ci­at­ed with a pro­posed action and its alter­na­tives and mit­i­ga­tions,” the doc­u­ment does not indi­cate what would be a suit­able point of com­par­i­son.  Rather, the guid­ance rec­og­nizes that the “rule of rea­son” gov­erns all NEPA analy­ses, and that agen­cies should apply the “con­cept of pro­por­tion­al­i­ty,” i.e., “the prin­ci­ple that the extent of the analy­sis should be com­men­su­rate with the quan­ti­ty of pro­ject­ed GHG emis­sions.”  Fur­ther, the guid­ance notes that “CEQ does not expect that an EIS would be required based on cumu­la­tive impacts of GHG emis­sions alone.”  Id. at 77826.  Absent oth­er rea­son­ably fore­see­able sig­nif­i­cant impacts, there­fore, an action’s con­tri­bu­tions to cli­mate change should not by itself com­pel the prepa­ra­tion of an EIS.  It remains to be seen whether agen­cies will nev­er­the­less default to more doc­u­men­ta­tion in response to pres­sure from inter­est groups and per­ceived lit­i­ga­tion risk.

Fed­er­al Land and Resource Man­age­ment Decisions

In a major depar­ture from the 2010 doc­u­ment, CEQ now offers exten­sive guid­ance to land man­age­ment agen­cies such as the Bureau of Land Man­age­ment and the U.S. For­est Ser­vice on the con­sid­er­a­tion of cli­mate change and GHG emis­sions in the con­text of land and resource man­age­ment deci­sions.  CEQ also now defines “emis­sions” to include the release of stored GHGs as a result of destruc­tion of nat­ur­al GHG sinks, such as forests and coastal wet­lands.  In gen­er­al, these agen­cies should con­sid­er cli­mate change impacts com­men­su­rate with the tem­po­ral and geo­graph­i­cal nature of par­tic­u­lar deci­sions.  Some land man­age­ment prac­tices may result in short-term emis­sions, but in the long run may also con­tribute to car­bon seques­tra­tion through improved ecosys­tem health and growth of car­bon stocks.

Mon­e­tary Cost-Ben­e­fit Analysis

While the guid­ance indi­cates that it may not always be appro­pri­ate to mon­e­tize the costs and ben­e­fits of fed­er­al action, it advis­es agen­cies engag­ing in such cost-ben­e­fit analy­sis to rely on the “Fed­er­al Social Cost of Car­bon” tool to deter­mine the larg­er costs asso­ci­at­ed with GHG emis­sions.  See “Tech­ni­cal Update for the Social Cost of Car­bon for Reg­u­la­to­ry Impacts Analy­sis,” (Nov. 2013).  Yet, the guid­ance simul­ta­ne­ous­ly rec­og­nizes that this tool was “devel­oped specif­i­cal­ly for reg­u­la­to­ry cost-ben­e­fit analy­ses” and its util­i­ty for indi­vid­ual deci­sions is lim­it­ed and uncertain.

Mit­i­ga­tion and Alternatives

The guid­ance directs fed­er­al agen­cies to con­sid­er the cli­mate change effects of alter­na­tives to the pro­posed action, includ­ing GHG emis­sions, car­bon seques­tra­tion poten­tial, trade-offs with oth­er envi­ron­men­tal val­ues, and the risk from and resilience to cli­mate change inher­ent in project or action design.  Among the sug­gest­ed alter­na­tives and mit­i­ga­tion mea­sures are those designed to reduce or mit­i­gate GHG emis­sions, uti­lize low­er GHG-emit­ting tech­nol­o­gy (e.g.,use ofre­new­able ener­gy), employ car­bon cap­ture or car­bon seques­tra­tion tech­niques, use sus­tain­able land man­age­ment prac­tices, and those that will cap­ture or ben­e­fi­cial­ly uti­lize fugi­tive GHG emis­sions such as methane.  As a result, pro­posed actions that fit with­in those favored cat­e­gories might receive more stream­lined NEPA review, while oth­er projects might receive greater scrutiny.

Con­sid­er­a­tion of Resilience in the Con­text of Cli­mate Change

In addi­tion to the con­tri­bu­tions a fed­er­al action might make to cli­mate change, the guid­ance also asks agen­cies to con­sid­er how cli­mate change might affect resources that are also affect­ed by the pro­posed action and how the action itself may be affect­ed by a chang­ing cli­mate.  Envi­ron­men­tal con­se­quences of a fed­er­al action may be exac­er­bat­ed by cli­mate change, such as where a pro­posed action requires water from a stream that has dimin­ish­ing quan­ti­ties of avail­able water, or may add heat to a water body that is already exposed to increas­ing atmos­pher­ic tem­per­a­tures due to cli­mate change.  The guid­ance also sug­gests that “[c]limate change effects should be con­sid­ered in the analy­sis of projects that are locat­ed in areas that are con­sid­ered vul­ner­a­ble to spe­cif­ic effects of cli­mate change … with­in the project’s antic­i­pat­ed use­ful life.”  Id. at 77813.  It notes that the planned life of some fed­er­al projects may be short­ened by cli­mate change in such areas, and offers the exam­ple of a long-term trans­porta­tion project on a bar­ri­er island that may be exposed to sea lev­el rise and increas­ing­ly intense storms.  Id. at 77829.

Use of Tra­di­tion­al NEPA Prin­ci­ples and Tools in Con­sid­er­ing Cli­mate Change

The draft guid­ance rec­og­nizes that tra­di­tion­al NEPA tools such as scop­ing remain avail­able in deter­min­ing whether and to what extent cli­mate change con­sid­er­a­tions are appro­pri­ate in any giv­en NEPA doc­u­ment.  CEQ acknowl­edges that agen­cies may use pro­gram­mat­ic NEPA analy­ses to con­sid­er GHG emis­sions asso­ci­at­ed with long-range ener­gy, trans­porta­tion, and resource man­age­ment actions, and may want to uti­lize incor­po­ra­tion by ref­er­ence or tier­ing in sub­se­quent­ly ana­lyz­ing dis­crete, site-spe­cif­ic deci­sions.  The guid­ance sim­i­lar­ly acknowl­edges that agen­cies need not under­take exhaus­tive research to “fill gaps” in cli­mate sci­ence, or wait for new research or infor­ma­tion before reach­ing a final deci­sion for any par­tic­u­lar pro­posed action.

The revised NEPA GHG guid­ance will impact all types of fed­er­al deci­sions, includ­ing oil and gas, renew­able ener­gy, trans­porta­tion, min­ing and min­er­als, pipelines, trans­mis­sion, and oth­er projects.  The guid­ance also may impact the scope and tim­ing of NEPA reviews that are well under­way.  While the goals of con­sis­ten­cy and pre­dictabil­i­ty are laud­able, the CEQ has opt­ed to leave much to indi­vid­ual agency (or field office) inter­pre­ta­tion.  Com­ment­ing on the draft guid­ance may help head off imple­men­ta­tion issues down the line for indi­vid­ual projects.  Based on the Christ­mas Eve Fed­er­al Reg­is­ter pub­li­ca­tion date, the dead­line for com­ments is Feb­ru­ary 23, 2015.