The guidance will significantly affect infrastructure projects located on federal land and federal permitting of major energy projects.On December 18, the White House’s Council on Environmental Quality (CEQ) issued draft guidance regarding how federal agencies should evaluate greenhouse gas (GHG) emissions and climate change impacts when conducting environmental reviews under the National Environmental Policy Act (NEPA). The guidance updates an earlier draft issued in 2010 and responds to recommendations submitted to the White House in November by the State, Local, and Tribal Leaders Task Force on Climate Preparedness and Resilience.
NEPA reviews apply to major federal actions and, thus, are critical in a wide variety of contexts, including agency licensing proceedings for, inter alia, power plants, pipelines, or liquefied natural gas export facilities; resource management decisions and approvals for projects on federal lands or under federal jurisdiction (such as transmission projects, energy exploration, wind and solar production, and agricultural activities); and in connection with specific projects undertaken by the federal government or with federal funds (e.g., dam and highway projects). CEQ guidance, although not “binding,” guides agencies’ NEPA reviews and is relied on by courts.
The draft guidance states that “it is now well established that rising global atmospheric GHG emission concentrations are significantly affecting the Earth’s climate,” and therefore “to remain consistent with NEPA,” agencies should consider the extent to which a proposed action impacts climate change. The question of whether, and if so how, agencies are to evaluate the GHG emissions associated with a particular agency action has proved troublesome and spurred significant litigation by groups that seek to block particular projects. The guidance is intended to “facilitate compliance” and to “reduce the risk of litigation driven by uncertainty in the assessment process as it will provide a clearer expectation of what agencies should consider and disclose.” The updated draft includes discussion on land management activities not addressed in the earlier draft, and CEQ is providing another opportunity for public comment.
Key Aspects of the Draft Guidance
The draft guidance provides that agencies should consider the extent to which proposed agency actions and alternatives contribute to climate change through GHG emissions and that agencies should take into account the ways in which a changing climate over the life of the proposed project may alter the overall environmental implications of such actions. Significantly, the draft guidance covers the below topics.
Identifying and Considering Impacts
Alternatives and Mitigation
Considering Effects of Climate Change on Affected Environment
The draft guidance endorses the position that GHG emissions and climate change are environmental impacts that require study under NEPA. While referencing the rule of reason standard and the action agency’s discretion in, for example, determining significance, agencies (and project proponents) may find it difficult to argue that climate change impacts are too speculative, uncertain, or difficult to quantify given the observations on the many tools available to estimate GHG impacts and carbon sequestration.
Incorporating the recommendations in the guidance will expand the scope and complexity of the NEPA analyses for many projects, such as new infrastructure for increased production of oil and gas or transporting renewable energy from new areas of production. Preparing the GHG analysis suggested in the guidance will likely add to the time required to get the necessary federal permissions and to project costs. Moreover, the guidance may support a detailed review of technical design issues that have previously been relatively uncommon. For example, the discussion on mitigation could invite agencies that may have little or no expertise in the construction and operational constraints of a particular facility to involve themselves in such aspects when assessing the facility’s energy efficiency.
The draft guidance is open for comment for 60 days. Changes may still occur before it becomes final, and there is no expected timeline for issuing the final guidance. Nonetheless, those with projects under way that are subject to NEPA review or those that are contemplating such projects should consider how to approach the analysis of climate change impacts, including appropriate tools to use, alternatives, and potential mitigation, particularly for projects expected to have substantial GHG emissions. Failure to include a quantitative or qualitative analysis may open the project to litigation risk under the guidance, unless accompanied by a carefully reasoned statement of why such analysis is not warranted.
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