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FERC, CFTC, and State Energy Law Developments

The Council on Environmental Quality (CEQ)—the US federal agency responsible for coordinating and overseeing federal agency implementation of the National Environmental Policy Act (NEPA)—moved one step closer on June 20 towards revising its longstanding NEPA-implementing regulations. Those regulations, which last underwent a major revision in 1986, govern the environmental review process for all “major federal actions,” including Federal Energy Regulatory Commission (FERC) license reviews for hydroelectric projects and certificates for natural gas facilities.

Now, in an Advance Notice of Proposed Rulemaking (ANPR), the CEQ signaled that it is ready to receive public comments on potential revisions that it hopes will “ensure a more efficient, timely, and effective NEPA process consistent with the national environmental policy stated in NEPA.” Comments are due July 20, 2018.

The ANPR seeks comments on specific issues and further invites commenters to provide “specific recommendations on additions, deletions, and modifications to the text of CEQ’s NEPA regulations,” including their justifications, to update and clarify the regulations. Among other things, CEQ seeks public feedback on whether:

  • the regulations should be revised to ensure optimal interagency coordination of environmental reviews and authorization decisions, including more “concurrent, synchronized, timely, and efficient” decisions when multiple agencies are involved;
  • any rule changes could better facilitate agency use of environmental studies, analysis, and decision conducted in earlier reviews;
  • provisions relating to agency responsibility and preparation of NEPA documents by contractors and/or project applicants should be modified;
  • the regulations relating to programmatic NEPA documents and tiering should be revised;
  • the scope of agency NEPA reviews, including whether rules for formats and page lengths of NEPA documents, should be revised;
  • the CEQ should include time limits for completion of agency NEPA reviews;
  • the rules for public involvement should be revised to be more inclusive and efficient;
  • the definitions of key terms, such as “major federal actions,” “effects,” “cumulative impacts,” “significantly,” “scope” and others, should be revised;
  • new definitions, such as for the terms “alternatives,” “purpose and need,” “reasonably foreseeable,” and “trivial violation,” should be added to the regulations;
  • provisions relating to certain types of NEPA documents (e.g., categorical exclusions documentation, environmental assessments, environmental impact statements, records of decision, supplements) should be altered;
  • any of the regulations’ current provisions are “obsolete” and can be updated to reduce “unnecessary burdens and delays;”
  • the rules can be changed to better reflect or incorporate new, efficiency-boosting technologies; and
  • mitigation requirements should be revised.

The questions posed by CEQ follow efforts by other federal agencies to streamline or reevaluate the NEPA process for major infrastructure projects. Earlier this year FERC initiated a Notice of Inquiry seeking information and stakeholder input on FERC’s policies regarding its review and authorization of interstate natural gas transportation facilities under Section 7 of the Natural Gas Act. Among other things, the Notice of Inquiry seeks comment on the scope of FERC’s environmental analysis of proposed natural gas projects (e.g., whether downstream GHG emission impacts should be considered), as well as the efficiency of the certificate application review process. Efforts by other agencies have similarly focused on streamlining the environmental review process: the One Federal Decision Memorandum of Understanding signed by 12 federal agencies committed to a coordinated NEPA process that allows all permitting decisions to be completed within two years. Those efforts, as well as the CEQ’s ANPR and FERC’s Notice of Inquiry, have been driven largely by Executive Order 13807, which President Donald Trump issued August 15, 2017, to “enhance and modernize” the environmental review and permitting process for infrastructure.

Given the highly visible and pervasive nature of the NEPA-implementing regulations, it will be important for FERC-regulated entities that depend on federal agency action when advancing projects and securing permits to participate in the rulemaking. Such comments will be critical to CEQ having a sufficient agency record to defend against any later litigation challenges to new regulations.