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National Environmental Policy Act (NEPA) Streamlining and Power Industry Update

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David McIntyre's picture
Principal McIntyre Environmental LLC

David McIntyre is a former U.S. Marine Corps officer who started his environmental consulting career in 1999 at the U.S. Army’s Yuma Proving Ground. For the past 17 years, David’s work preparing...

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Power Industry Update: Utilities and energy developers face a myriad of challenges when trying to site power plants, transmission lines, and other energy infrastructure. Financing, engineering, land acquisition, and permitting are just a few of the challenges utilities and energy developers must address to get an energy project into construction. One of the major permitting challenges is the National Environmental Policy Act (NEPA). NEPA is encountered whenever a federal agency becomes involved with a utility or energy project. This typically occurs when the federal government is providing financing, e.g. through loan guarantees from the Department of Energy (DOE); when crossing federal lands, e.g. land managed by the Forest Service (FS) or the Bureau of Land Management (BLM), or when a federal permit is required, e.g. a Section 404 permit under the Clean Water Act (CWA).

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The passage of NEPA in 1970 and the establishment of the President’s Council on Environmental Quality (CEQ) was a watershed event for environmentalists and conservationists in the United States. For the first time, federal agencies were required to take a comprehensive look at their actions and their impacts on the environment prior to a decision. The primary tool for implementing the NEPA process is the preparation of an environmental impact statement (EIS). The EIS process has very defined requirements for public involvement including a period of public scoping to get input on a project before it starts and a period after the Draft EIS is released in which the public can comment on it. In the EIS process, the lead federal agency is required to respond to all substantive comments received on the Draft EIS.

Another tool for implementing NEPA is with an environmental assessment (EA). The EA process can be used when the project is determined to be not likely to have a significant impact on the environment. The EA process does not require public involvement to the extent the EIS process does. EAs are intended to be concise documents, approximately 10 to 15 pages long, according to the Forty Most Frequently Asked Questions Concerning NEPA as published by the CEQ in 1981. 

Since inception, the NEPA process has been litigated numerous times, as projects opponents have found NEPA provides a means to challenge the decisions of federal agencies based on whether they have properly implemented the NEPA process. As a result, NEPA documents have become more detailed over time, in part to ensure that the project can withstand legal challenges. EIS in the thousands of pages for controversial projects have been published, and EAs routinely exceed 100 pages or more. As the size of these documents has grown so has the time it takes to prepare them. According to Taylor and Francis Online, from the beginning of 1998 to the end of 2006 the average EIS took 3.4 years to complete (https://www.tandfonline.com/doi/abs/10.1017/S146604660808037X ).  This is more than a 300 percent increase in the suggested timeline published in Forty Most Frequently Asked Questions Concerning NEPA  “. . . even large complex energy projects would require only about 12 months for the completion of the entire EIS process.”

The time and cost associated with navigating the NEPA process have resulted in many projects being downsized significantly or dropped completely. Historically, this has been one of the biggest challenges facing the utility industry and it continues to this day. For years, utilities and energy developers have demanded that the federal government find ways to streamline the NEPA process to make it go more quickly and cost less money. In response to these demands, both the Bush and the Obama Administrations attempted to find ways to make the NEPA process move more quickly. The Obama Administration developed a program to identify certain energy projects as high priority and demanded that the lead federal agencies complete them in a reduced period, typically 18 months. The Trump Administration has taken this a step further, with the publication of Executive Order (EO) 13087 Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects on August 15, 2017. This was followed within two weeks by Secretary of the Interior Order (SO) 3355, which was published August 31, 2017, with the express purpose of implementing the EO and providing guidance on enhancing and modernizing the Department of the Interior (DoI) NEPA process. It mandated that DoI agencies, including the BLM, Bureau of Reclamation, Bureau of Indian Affairs, and the National Park Service; limit EIS to no more than 150 pages and complete them in one year. Longer documents of up to 300 pages are allowed if the project is deemed “complex”. Additional guidance on the preparation of Environmental Assessments (EAs) was issued in June 2018 and mandated that EAs be a maximum of 75 pages and take no longer than 6 months to prepare. The goal behind these policies has been to shorten the length of these documents and decrease the time that it takes for a project to go through the NEPA process.

2018 was the first full year in which new EIS in the DoI were being held to the 150 page and one-year standard. This new guidance had the most significant effect on NEPA documents that were already in development since it was unclear when they were expected to be finished. Many EIS and EAs that were slated to start in 2018 were put on hold, in part to finish the documents that were already in development as well as to determine how new documents could be completed within the new page limits and timeline. 2018 was the first time in decades that substantive changes had been implemented to the NEPA process.

Documents prepared in 2018 are now beginning to be completed and will begin to face legal challenges in 2019. It is unknown how these documents will fare in court. These challenges could further delay the start of construction for energy projects. While in theory streamlining NEPA should accelerate project development, it may not in reality. Going forward in 2019 and for the foreseeable future, the question to be answered is whether these new policies have been effective in accelerating the process. While they have clearly speeded up existing projects it has not necessarily accelerated the process for projects still in the preplanning stage. In fact, it has delayed the start of several projects since managers are hesitant to formally start the project knowing they have a limited time to get the work done. Many managers are now working to develop methods to make these documents shorter, which have resulted in the formal portions of the document being within the page limits, but with expansive appendices being written and attached at the end. The result being that the same number of pages of text are written as before, they are now just at the end of the document. In many instances, the page count of the appendices far exceeds the page limits of the formal document. How this evolves over the next five years will have a significant impact on the utility industry.

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