The Year Ahead in Energy and Environmental Law: Environmental Review

A Plea for Streamlined Review Falls on Deaf Ears

As the nation begins to slowly emerge from recession and the economy shows at least a pulse, it is telling that one of most prominent buzzwords from a year ago has largely dropped from the news. That word is “shovel-ready.” In January 2009, the phrase encapsulated the desire to move as much money from the economic stimulus bill as possible out of the government’s coffers and into the economy.

A Plea for Streamlined Review Falls on Deaf Ears

As the nation begins to slowly emerge from recession and the economy shows at least a pulse, it is telling that one of most prominent buzzwords from a year ago has largely dropped from the news. That word is “shovel-ready.” In January 2009, the phrase encapsulated the desire to move as much money from the economic stimulus bill as possible out of the government’s coffers and into the economy. The desire to move projects ahead as quickly as possible ran smack into the problem of whether they would be held up by NEPA – the statute that requires agencies to consider alternatives to identified adverse environmental impacts. We addressed this question in an article entitled A Quick Economic Stimulus Meets a Slow Environmental Process – Are NEPA Waivers Needed to Reach Energy Independence?, Marten Law Environmental News (January 29, 2009), in which we noted that, while the Obama Administration’s goal was to spend the money from the stimulus bill within 18 months,[1] the CBO predicted that it would take more than seven years to spend the bill’s funding for alternative energy. In part, this is because the environmental review process for any new plants and for transmission lines to carry new energy produced takes so long.[2]

Last year, Governor Arnold Schwarzenegger requested up $44 billion for transportation, energy and water projects in California, claiming that these projects will create as many as 800,000 new jobs. However, because traditional environmental review slows short-term job creation, Governor Schwarzenegger asked the Obama Administration to “waive or greatly streamline National Environmental Protection Act requirements consistent with our statutory proposals to modify the California Environment Quality Act for transportation projects.”[3] His request drew fire from environmental groups such as the Environmental Defense Fund, the Natural Resources Defense Council, the League of Conservation Voters and Environment California, which called Governor Schwarzenegger’s proposal “unproductive and harmful” to the federal debate over reviving the economy. “Inevitably, in the course of congressional consideration, special interests will assert that we cannot afford the NEPA process in a time of national urgency,” they said. “The truth is that we cannot afford that kind of leap-before-you-look rashness.”[4]

Assessing the success of the efforts for streamlined project review depends on what measure you apply. A November 2009 CEQ report to Congress on NEPA implementation evaluated 145,000 projects funded by the economic stimulus bill. As of September 30 (the last date for which statistics are available), “categorical exemptions” from NEPA – meaning exclusions from environmental review – were issued for nearly 96% of those projects. Of the remaining projects, there were 6,893 environmental assessments prepared, and 763 environmental impact statements (a 9:1 ratio). Using those measures, it appears that the majority of projects were either deemed categorically exempt from NEPA or were handled under the less rigorous EA process.[5]

In many instances, however, parties seeking to stop a project took to the courts, using the proponent’s alleged failure to assess (or adequately assess) climate change impacts of a project as a basis to challenge the adequacy of the lead agency’s review under NEPA and “little NEPAs” enacted by the states. Focusing solely on climate-related challenges, more than a dozen NEPA claims seeking injunctive or declaratory relief halting projects were filed in 2009 alone, and a similar number of cases were filed based on state-based environmental review statutes such as California’s CEQA or Washington’s SEPA.[6]
In other words, while many stimulus projects escaped full review under NEPA, a good number – over 7000 – did not, and dozens of projects were tied up in litigation. We anticipate many more stimulus projects to be subject to challenge in 2010 as project opponents gain familiarity with using climate change as a basis to force more environmental review and alternatives analysis.

New CEQ Regulation of Climate Change Impacts on the Horizon

Another reason we may see more NEPA litigation in 2010 is that the Council on Environmental Quality (“CEQ”) – the agency charged with implementing NEPA – is considering adding new requirements to consider climate change impacts into its existing regulations. CEQ Director Nancy Sutley received petitions to do so in March of last year from the Sierra Club, the Natural Resources Defense Council and the International Center for Technology Assessment.[7] Ms. Sutley was quoted last week as saying, while the Administration’s decision was not yet final, CEQ was considering issuing such regulations.[8] Similar efforts have been made under state environmental review statutes over the past two-and-a-half years. See California Courts to Decide Whether Climate Change Impacts Must Be Assessed and Mitigated in New Project Developments, Marten Law Environmental News (May 9, 2007); King County (WA) First in the Nation To Require Climate Change Impacts To Be Considered During Environmental Review of New Projects, Marten Law Environmental News (August 1, 2007); Settlement Requires California County to Inventory and Mitigate Greenhouse Gases, Marten Law Environmental News (September 5, 2007).