The authors explain that stakeholders interested in how climate change is addressed in the context of the National Environmental Policy Act should closely follow developments from the Council on Environmental Quality and the Federal Energy Regulatory Commission.
Two federal agencies are gearing up to release new policies, ostensibly to bring long-awaited clarity and predictability on one of the thorniest issues in National Environmental Policy Act ("NEPA") practice—the assessment and mitigation of greenhouse gas ("GHG") emissions. The Council on Environmental Quality ("CEQ") and the Federal Energy Regulatory Commission ("FERC") have both announced their intention to change policy direction from the Trump Administration, and FERC has already begun implementing its strategy
WHAT IS CEQ'S PLANNED STRATEGY?
In the coming months, the CEQ will reveal its plan for revising the NEPA regulations and guidance for analyzing GHG emissions. The CEQ announced in the Spring 2021 Unified Regulatory Agenda that it will be undertaking a two-phased approach for revising the CEQ's NEPA implementing regulations that were finalized by the Trump Administration in July 2020 ("2020 Rule"). In phase 1, "narrow changes" will be proposed in July, and in phase 2, "broader changes" will be proposed in November 2021.1 The CEQ will also be issuing a notice related to the GHG emissions guidance in September 2021.2 Indeed, these will be among the highest priority items for the CEQ's chair, Brenda Mallory. CEQ should be able to proceed with its strategy without the intervention of the courts, as the U.S. District Court for the Western District of Virginia's dismissed a challenge by conservation groups to the 2020 Rule on grounds of standing and ripeness on June 21, 2021,3 and the four other challenges to the 2020 Rule have been stayed.
HOW HAS FERC ALREADY BEGUN IMPLEMENTING ITS STRATEGY?
Under the leadership of new Chair Richard Glick, FERC is wasting no time in charting its own course on the GHG emissions impacts of natural gas projects. In February 2021, FERC issued a Notice of Inquiry ("NOI") seeking input on some of the same NEPA/GHG issues that CEQ must address, among other issues, with the intent of updating FERC's 1999 policy statement on the certification of new interstate natural gas transportation facilities (the 1999 Certificate Policy Statement).4 As of June 2021, FERC has received over 150 comments on the NOI.
In the NOI, FERC posed a series of questions relating to how it should determine whether a proposed natural gas project meets the public convenience and necessity test under Section 7 of the Natural Gas Act. Among other things, FERC sought input on how it should consider impacts to environmental justice communities. FERC also raised fundamental questions about the evaluation of GHG emissions impacts and alternatives under NEPA. For example, FERC sought feedback on the:
- Scope of GHG emissions impact assessment (e.g., whether and how to consider upstream and downstream impacts);
- Calculation of a project's carbon footprint (e.g., whether and how to determine if a project's GHG emissions may be offset by reduced GHG emissions from the project's operations, such as displacing more carbon-intensive fuel sources);
- Assessment of the "significance" of a project's carbon footprint;
- Appropriate use of the social cost of carbon in NEPA analysis; and
- Whether FERC has authority to impose mitigation for GHG emissions and if so, which GHG emissions should be mitigated and how.
In the meantime, in March 2021, FERC issued an order approving the Northern Natural's South Sioux City to Sioux Falls A-line Replacement project. In that order, the Commission and established new precedent for how it will assess the significance of a natural gas project's GHG emissions impacts.5 In addition, following a June 2021 decision by the U.S. Court of Appeals for the D.C. Circuit decision vacating FERC approval of the Spire STL Pipeline, there is new urgency to issue a revised Certificate Policy.6
* Ethan G. Shenkman and Sandra E. Rizzo are partners in the Washington, D.C., office of Arnold & Porter. Emily Orler is an associate in the firm's office in Washington, D.C. The authors may be contacted at email@example.com, firstname.lastname@example.org, and email@example.com, respectively.
1 See Office of Management and Budget, Office of Information and Regulatory Affairs ("OIRA"), National Environmental Policy Act Implementing Regulations Revisions—RIN: 0031- AA05; OIRA, National Environmental Policy Act Implementing Regulations Revisions—RIN 0331-AA07.
2 See OIRA, National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions and Climate Change—RIN 0331-AA06; see also CEQ's rescission of Trump's proposed NEPA climate guidance (Mar. 31, 2021).
3 Wild Virginia v. Council on Env't Quality, No. 3:20CV00045 (W.D. Va. June 21, 2021).
4 FERC, Certification of New Interstate Natural Gas Facilities, 86 Fed. Reg. 11,268 (Feb. 24, 2021), https://bit.ly/2SAZa2b; see also Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (Sept. 15, 1999), clarified, 90 FERC ¶ 61,128 (Feb. 9, 2000), further clarified, 92 FERC ¶ 61,094 (July 28, 2000).
5 Northern Natural Gas Company, 174 FERC ¶ 61,189 (Mar. 22, 2021).
6 Env't Def. Fund v. Fed. Energy Regul. Comm'n, No. 20-1016 (D.C. Cir. June 22, 2021).
Originally Published by PRATT'S ENERGY LAW REPORT
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