A proposed federal environmental and energy permitting rule by a White House agency could scuttle a separate but related energy permitting deal negotiated earlier this year by President Biden and congressional Republicans.
The Council on Environmental Quality, part of the Executive Office of the President, on July 31 published its “Phase 2” of a rulemaking initiated in April 22, designed to reverse Trump administration 2020 changes to the interpretation of the landmark 1970 National Environmental Policy Act, which requires steps federal agencies must go through when they take a “major federal action.” The NEPA law also created the CEQ.
A White House press release says the CEQ rulemaking “would fully implement and build upon new permitting efficiencies directed by Congress under the Fiscal Responsibility Act of 2023.” The White House added, “CEQ’s Bipartisan Permitting Reform Implementation Rule would modernize and accelerate environmental reviews under the National Environmental Policy Act (NEPA), encourage early community engagement, accelerate America’s clean energy future, strengthen energy security, and advance environmental justice.”
The CEQ proposal has some House Republicans fuming, The Hill reported last Thursday (Aug. 3), including Speaker Kevin McCarthy (R-Calif.). The Hill wrote, “Key House Republicans have signaled they may be willing to walk away from talks on how to speed up infrastructure project approvals over a disagreement on a related proposal.”
Rep. Rep. Garret Graves (R-La.), described as a “key negotiator” in the discussions between the House and the Democratic Senate and White House on a not yet fleshed out permitting package, contacted The Hill, saying, “There is no way Congress will give this Administration new laws to invent imaginary authorities if they continue to operate in bad faith in the implementation of the Fiscal Responsibility Act’s [NEPA] reforms.”
Graves was a veteran congressional staffer focused on energy and environmental issued before running for the sixth district seat being vacated by Republican Rep. Bill Cassidy, who ran for the Senate, ousting Democrat Mary Landrieu. Graves is an important member of the House Resources Committee.
McCarthy followed up with an email from an aide stating, “Any steps the Biden White House takes to undermine the commonsense permitting reforms achieved in the FRA will undermine our ability to work in good faith on this issue moving forward.”
The White House responded with an email to The Hill stating, “The Bipartisan Permitting Reform Implementation Rule fully and faithfully implements new permitting efficiencies directed by Congress through the Fiscal Responsibility Act. What it does not do is adopt radical provisions of the House Republicans’ Builder Act — provisions that were not part of the bipartisan deal — such as changes that would limit environmental reviews to ignore a project’s effects on climate change or ignore the cumulative effects of adding more and more pollution to already overburdened communities.”
What’s the fuss all about? An analysis by the Vinson&Elkins law firm says, “Originally expected in late spring, CEQ delayed releasing its Phase 2 draft so that it could include updates that implement recent changes to NEPA passed as part of the Fiscal Responsibility Act of 2023. These changes include allowing applicants (rather than agencies) to prepare NEPA documents known as environmental impact statements; implementing deadlines and page limits; and allowing applicants to challenge agency delays in court.”
According to the law firm, which has a major energy and environmental practice with industry clients, “The proposed Phase 2 rule includes numerous features that are more about imposing substantive requirements in what is intended to be a procedural statute.”
The Phase 2 rule, says the firm, would “restore select language about mitigation from the pre-2020 version of the NEPA regulations, but in doing so, CEQ proposes to substantively expand project proponents’ mitigation obligations.”
The CEQ rule, the firm adds, includes “enhanced analysis of climate change and environmental justice” that are not part of NEPA, “even though there is no ability to demonstrate causation between any individual project and climate change, or any means to translate any individual project’s greenhouse gas emissions into actual environmental impacts.” The rule “removes language stating that agencies are not required to undertake new scientific and technical research, and it inserts other language promoting the use of such models and projections.”
On the other hand, the U.S. Court of Appeals for the D.C. Circuit has repeatedly told the Federal Energy Regulatory Commission over several years that it must consider greenhouse gas emissions when it considers granting gas pipeline construction certificates. As the National Law Journal reported in March 2022, “Once again finding the Federal Energy Regulatory Commission’s (“FERC” or “Commission”) environmental assessment (“EA”) analysis of the downstream effect of greenhouse gas (“GHG”) emissions associated with interstate natural gas pipelines and liquefied natural gas terminals certificated pursuant to the Natural Gas Act (“NGA”) legally insufficient, on March 11, 2022, the United States Court of Appeals for the District of Columbia Circuit issued a remand directing FERC to consider the reasonably foreseeable indirect effects of burning natural gas as the result of a pipeline expansion project. The court directed FERC to consider such indirect downstream impacts on remand and to prepare a conforming EA, but declined to vacate the FERC’s orders. Food & Water Watch and Berkshire Environmental Action Team v. FERC, No. 20-1132 (Mar. 11, 2022)”
FERC has consistently ignored the D.C. Circuit on greenhouse gas analysis of pipeline certificate cases.
What happens next with the CEQ Phase 2 proposal, with a comments due Sept. 29, may depend on the reaction of Sen. Joe Manchin (D-W.Va.), the chairman of the Senate Energy and Natural Resources Committee. He was the key in the permitting deal between the Biden administration and the GOP. In February, Inside EPA reported, “Senate energy committee Chairman Joe Manchin (D-WV) and White House officials have been discussing ways to include some of the senator’s permitting proposals that have so far been rejected in Congress in a looming Council on Environmental Quality (CEQ) ‘Phase 2’ National Environmental Policy Act (NEPA) rule, according to industry sources.”
–Kennedy Maize
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