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New Climate Change Guidance for NEPA Reviews

In the United States, federal agencies that license, permit or finance energy and infrastructure projects must, with some limited exceptions, analyze the environmental impacts of those projects before they approve them, pursuant to the National Environmental Policy Act of 1969 (NEPA).  But to what extent must those agencies consider climate change impacts as part of their NEPA reviews? The President’s Council on Environmental Quality (CEQ) has just issued a guidance document that addresses that question.

CEQ’s guidance document—an August 1 memorandum addressed to the heads of all federal departments and agencies—urges federal agencies to consider two climate change-related topics when conducting NEPA reviews.

The first topic is the impact of a proposed project on climate change, and the memorandum urges federal agencies to approach that topic by focusing on the project’s direct, and indirect, greenhouse gas (GHG) emissions. Agencies are encouraged to calculate a project’s anticipated emissions using existing government resources and calculators, and to draw upon existing government literature on the impacts of such emissions. The memorandum acknowledges that “the totality of climate change impacts is not attributable to any single action,” but concludes that climate-related impacts are exacerbated by some government actions and encourages agencies to compare the level of emissions expected from a proposed project to the level expected under alternative project scenarios. The memorandum provides scant details on how to calculate “indirect” GHG emissions but does suggest that for projects involving fossil fuel extraction, the indirect impacts turn, at least in part, on the anticipated ultimate use of the extracted fuel.

The second topic is the impact of climate change on the project, and on the project’s impacts.Here, CEQ’s memorandum encourages federal agencies to consider a proposed project’s impacts not simply on environmental conditions as they currently exist but as they will exist in the future and reflecting any changes that are expected as a result of climate change. Thus, if a project will draw water from a river that is already being, or that will be, diminished because of changing snowfall or rainfall patterns, that is an impact that should be acknowledged. The memorandum also encourages agencies to incorporate climate change resiliency and adaptation planning into their NEPA reviews, especially when analyzing project alternatives and potential mitigation measures. The memorandum suggests, for example, that agencies consider whether a proposed project’s design makes it more vulnerable to changing climate conditions (such as, in some areas of the country, increased risk of wildfires) than alternative projects.

CEQ’s memorandum applies to all new NEPA reviews and states that agencies “should exercise judgment” when considering whether to apply the guidance to currently ongoing reviews. CEQ states in the memorandum that it “does not expect agencies to apply” the guidance to projects for which a final environmental impact statement or environmental assessment has already been issued.




D.C. Circuit Rules that FERC May Not Segment Its Evaluation of the Environmental Impact of Related Natural Gas Pipeline Construction Projects, Regardless of Whether They Are Separately Proposed

The D.C. Circuit Court of Appeals recently issued an opinion holding that the Federal Energy Regulatory Commission (FERC) violated the National Environmental Policy Act (NEPA) when it segmented its evaluation of the environmental impact of four separately proposed but connected projects to upgrade the “300 Line” on the Eastern Leg of Tennessee Gas Pipeline Company’s natural gas pipeline system.  Going forward, the court’s ruling will likely compel proponents of interrelated or complimentary pipeline projects to seek their certification on a consolidated basis and will require FERC to evaluate their cumulative impact.

Tennessee Gas’s challenged Northeast Project was the third of four proposed upgrade projects to expand capacity on the existing Eastern Leg of the 300 Line.  The Northeast Project added only 40 miles of pipeline, while the four proposed projects combined to add approximately 200 miles of looped pipeline.  FERC approved Tennessee Gas’s first proposed upgrade, the “300 Line Project,” in May 2010.  While that project was under construction, Tennessee Gas proposed three additional projects to fill gaps left by the 300 Line Project, one of which was the Northeast Project.   As part of its review of the Northeast Project, FERC issued an Environmental Assessment (EA) required by NEPA that recommended a Finding of No Significant Impact.  The EA for the Northeast Project, however, addressed only the Northeast Project’s environmental impact without reviewing the cumulative impact of all four projects.

The D.C. Circuit held that FERC was in error for failing to consider the cumulative impact.  Under NEPA, the D.C. Circuit explained, FERC must consider all connected and cumulative actions.  The D.C. Circuit found no “logical termini,” or rational endpoints to divide the four projects and found the projects were not financially independent.  Rather, the court found the Northeast Project was “inextricably intertwined” with the other three improvement projects that, taken together, upgraded the entire Eastern Leg of the 300 Line.  The court held that FERC must analyze the cumulative impact of the four projects and remanded the case to FERC for consideration.

The Court emphasized that in this case, “FERC was plainly aware of the physical, functional, and financial links between the two projects.”  Regardless of whether an interstate pipeline initially plans to embark on a series of related upgrades, once FERC is aware of the interrelatedness of proposed expansion projects, it must take care to review any cumulative environmental impacts that may arise.

The D.C. Circuit’s decision may also be a warning that FERC must pay greater attention to the NEPA review in pipeline construction projects.  The D.C. Circuit also has before it this term a case alleging that FERC did not sufficiently consider the environmental review of the siting of a new pipeline compressor station in light of less environmentally intrusive alternatives.  See Minisink Residents for Environmental Preservation and Safety v. FERC, Case No. 12-1481.  Both cases take issue with the rigor of FERC’s environmental review under NEPA, and the D.C. Circuit’s decisions may signal a new era of increased focus on the [...]

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