June 28, 2012 Articles

NEPA and Renewable Energy Practices: Streamlining Sustainability

The DOI moves quickly to comply with Obama administration policy.

By Katherine Kennedy and Eric Andreas – June 28, 2012

The Obama administration continues to make development of renewable-energy projects an administrative priority. These projects, however, often trigger review under the National Environmental Policy Act (NEPA), which is not only costly, but can add significant delays to any project caught in its web. In an attempt to streamline NEPA review for renewable energy projects, the Department of the Interior (DOI) has developed procedures to accelerate the process. Selected projects will receive expedited review to test whether the proposed procedures can credibly address the usual delays encountered during NEPA review. While the streamlining process is underway, the jury is still out as to whether it will work.

Renewable Energy and NEPA 
President Obama’s continued demands for an increase in national renewable energy have led agencies to streamline their NEPA processes to meet the administration’s deadlines. Even before taking office, President Obama promised to invest $150 billion over 10 years in renewable energy sources; both in the development of renewable energy and to reduce United States’ carbon emissions. President Obama outlined his goal for the federal government to lead by example to create a clean-energy economy in Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance. The executive order outlines numerous ways that federal agencies can increase energy efficiency and protect national resources across the government. It also requires agencies to achieve agency-wide greenhouse-gas reductions. Renewable-energy mandates also were incorporated in the 2009 American Recovery and Reinvestment Act (ARRA) (Pub. L. No 111-5). The legislation provided $80 billion in federal loans, tax incentives, and other spending mechanisms for clean energy across all government agencies. Id. div, A, tit. IV, 123 Stat. 139.

Implementation of these projects, however, has been frustrated by delays necessitated by NEPA compliance. For example, on October 5, 2011, the Obama administration agreed to fast-track seven electricity-transmission projects that would cut across 12 states. See U.S. Department of Energy—Energy Efficiency and Renewable Energy, “Grid Modernization Pilot Projects to Integrate Renewable Energy,” (Oct. 12, 2011). The Rapid Response Team for Transmission (RRTT) is responsible for carrying out this initiative. RRTT comprises the nine federal bodies: the White House Council on Environmental Quality; the Environmental Protection Agency; the Federal Electric Regulatory Commission; the Advisory Council on Historic Preservation; and the Departments of Agriculture, Commerce, Defense, Energy, and Interior. In October 2009, the RRTT signed a memorandum of understanding (MOU) supporting the coordination in federal-agency review of electric-transmission facilities on federal land. The RRTT is tasked with coordinating statutory permitting, review, and consultation schedules and processes through integrated federal planning. The response team also must apply a uniform and consistent approach to consultations with tribal governments; and resolve interagency conflicts and ensure that all involved agencies are fully engaged and meeting the administration’s timelines.

It was hoped that the RRTT would accelerate responsible and informed deployment of these seven key transmission facilities, honor the objectives in NEPA, and achieve expedited transmission success. But that has not occurred. So far, only two of the seven projects have reached a record of decision (ROD), allowing only two projects to begin. Also, three of the projects are still undergoing the NEPA process and have not yielded a start date, and the remaining two projects halted at the NEPA scoping stage.

Streamlining Examples
Wind Power
To address NEPA delays, the DOI has started fast-tracking renewable-energy projects. Interior Secretary Ken Salazar issued Order No. 3285 to facilitate the streamlining program and ameliorate the seemingly failed RRTT. See Dept. of Interior, Order No. 3285A1, (Feb. 22, 2010). The order establishes a new integrated body to address NEPA issues: the Task Force on Energy and Climate. The DOI created this task force to address the priorities of the agency and to develop a strategy to increase the development and transmission of renewable energy on public land and the Outer Continental Shelf. The task force’s duties include prioritizing permitting and environmental-review processes for transmission right-of-way applications to reduce the time needed, and to thus speed renewable energy to the grid. Task-force identification of the most suitable areas for renewable-project development allows for expedited evaluation of a proposed project and allows the Bureau of Land Management (BLM) to conduct a prioritized NEPA review of energy permits. Secretary Salazar used the phrase “Smart from the Start” to describe the DOI’s initiative to facilitate the siting, leasing, and construction of offshore wind-energy projects along the Atlantic coast.

The DOI’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) established this Smart from the Start system using an environmental assessment (EA) under NEPA that considered the environmental impacts of issuing renewable energy leases and authorizing site-characterization activities in identified wind-energy areas on the Outer Continental Shelf off New Jersey, Delaware, Maryland, and Virginia. See 77 Fed. Reg. 5560 (Feb. 3, 2012). This final EA considered the reasonably foreseeable environmental impacts associated with the approval of site-assessment activities (including the installation and operation of meteorological towers and buoys) on the leases that may be issued. As a result of its analysis in the final EA, BOEMRE issued a finding of no significant impact (FONSI) under NEPA. The FONSI concluded that the environmental impacts associated with the preferred alternative would not significantly impact the environment; therefore, the preparation of an environmental impact statement (EIS) is not required. Thus, through Smart from the Start, BOEMRE has been able to demonstrate how using an overarching EA and FONSI system to allow for expedited leasing can occur without forfeiting the NEPA process.

In February 2011, Interior Secretary Salazar and Department of Energy (DOE) Secretary Steven Chu coordinated a strategic plan to accelerate the development of offshore wind energy. The DOI and the DOE created a joint-agency initiative to achieve “a scenario of 54 gigawatts (GW) of deployed offshore wind-generating capacity by 2030, at a cost of energy of $0.07 per kilowatt-hour (kWh), with an interim scenario of 10 GW of capacity deployed by 2020, at a cost of energy of $0.10 / kWh.” See U.S. Department of Energy, A National Offshore Wind Strategy: Creating Offshore Wind Energy in the United States, DOE/GO-102011 2988 (Feb. 2011). This plan refers to the DOI’s regulatory framework for environmental review in the Smart from the Start initiative as a template to facilitate siting, leasing, and construction of new offshore wind projects and a way to substantially shorten projected timelines for individual offshore wind projects.

The DOI and the DOE have also reevaluated their fast-tracking programs to honor the Obama administration’s timelines and milestones for expedited energy development. On October 20, 2011, the DOE not only updated the language of its regulations, but the DOE added 20 new categorical exclusions (CatEx) to its list of NEPA CatEx(s) located in 10 C.F.R. Part 1021. 76 Fed. Reg. 63764, 63799 (Oct. 13, 2011). The 20 new DOE CatEx classes are: solar photovoltaic systems; solar thermal systems; wind turbines; biomass power plants; electric-vehicle charging stations; combined heat and power or cogeneration systems; research activities in saltwater and freshwater environments; experimental wells for injection of small quantities of carbon dioxide; and small-scale renewable-energy research and development and pilot projects. See Department of Energy Technical Support Document for the National Environmental Policy Act Implementing Procedures Final Rule (Sept. 2011)The new rules became effective on November 14, 2011, and reflect the DOE’s current activities and recent experiences to better align with the DOE’s regulations.

Solar Power
The DOI has also begun using expedited leasing of right-of-way-managed land through its solar and wind energy program. In this program, which currently takes the form of a draft programmatic EIS (often referred to as the Solar Draft PEIS), the DOI intends to work with the DOE to facilitate the coordination of agencies in developing solar and wind projects in federal lands in Arizona, California, Colorado, Nevada, New Mexico, and Utah. Even though an EIS and an ROD have not yet been issued, the BLM, through an internal order, still requires applicants to schedule at least two pre-application meetings with the BLM before filing for a solar or wind development project. See DOE Memorandum, Solar and Wind Energy Applications—Pre-Application and Screening (Feb. 8, 2011). The order then requires a tiered screening process that allows expedited authorizations for applications with low potential for resource conflicts. Logically, it further encourages applicants to use public land that the BLM has specifically targeted for solar and wind energy development.

The Federal Energy Regulatory Commission (FERC) is also working to develop categorical environmental analyses under NEPA for new hydropower technologies. As part of pre-filing procedure, FERC encourages a “clarification meeting” to address the ready-for-environmental analysis (REA) notice, a document similar to the DOI’s “streamlining agreement.” See Work Group on the Coordination of Federal Mandates, Interagency Task Force Report on NEPA Procedures in FERC Hydroelectric Licensing (May 2000). FERC explicitly states that NEPA compliance requires time. To address the length of the review process, FERC agrees to consider the pre-filing consultation process as satisfying the scoping process for license and amendment applications that do not normally require the preparation of an EIS. However, an agency waives this consideration if it has not identified concerns regarding potential environmental impacts during pre-filing. The work group notes that FERC is working with the DOI, the DOE and other agencies to develop a comprehensive NEPA review process and data-based system for interagency environmental-review process documents and communications.

The Department of Transportation (DOT) is also working to implement NEPA streamlining policy to address administration renewable-energy goals. The DOT’s Federal Aviation Administration (FAA) issued Order 1050.1E to update the agency-wide policies and procedures for compliance with NEPA and its implementing regulations issued by the White House Council on Environmental Quality (CEQ) (40 CFR parts 1500–08). Order 5050.4B supplements 1050.1E to reinforce Vision 100—Century of Aviation Reauthorization Act, specifically addressing environmental stewardship and streamlining for airport-capacity projects.

The FAA orders projects to streamline processes using the following overarching principles: provide priority review to certain projects, promote public review and comment, manage timelines during the review process, promote interagency cooperation, reduce undue delays, and promote quality and accountability throughout the review process. Although the focus of the order is to reduce air-traffic congestion and delays, the FAA declared environmental streamlining another priority. To coordinate and expedite the environmental-review process, the FAA mirrors Smart from the Start. Expanding on the aforementioned principles, the FAA encourages streamlining through agency cooperation as soon as practicable.

Vision 100 directs agencies to give the highest priority to projects designated for coordinated review under the act. The order places an affirmative duty on the FAA to conduct review, analysis, opinion, permitting, licensing, and approval functions efficiently and states that participating agencies are expected to perform efficiently also. The FAA creates a discretionary document entitled “streamlining agreement” (SA), similar to an MOU, to coordinate and document agency streamlining roles. SAs help to determine what comprises effective interagency agreements, and are especially helpful when many agencies are involved in renewable-energy projects that require cooperation on various levels of environmental review, such as programmatic wind projects and programmatic solar projects. The FAA requires SAs to include an overview; goals; and the consensus for purpose and need, range of reasonable alternatives, efforts to minimize impacts, mitigation requirements, and stewardship opportunities; dispute-resolution process; milestone dates; explanation of each agency’s rules; and signatory pages.

The Tennessee Department of Transportation implemented the SA procedure in a 2008 highway project. The SA established a coordinated-planning and project-development process for transportation projects in Tennessee to ensure significant agency and Metropolitan Planning Organization participation and involvement early and throughout the project-development process. The Tennessee Streamlining Agreement (TESA), as the process is called, followed the directives in FAA Order 5050.4B and serves as a useful example for other agencies to follow when considering the pragmatics of NEPA streamlining implementation.

Final Analysis
Streamlining is often colored as a negative aspect of the environmental-review process. However, NEPA streamlining forces agencies to coordinate, cooperate, and plan for reasonable decision making. Shorter deadlines and projection dates for renewable-energy projects may require expedited NEPA review; but that need not affect the quality of the review. Smart from the Start, for example, demonstrates the DOI’s attempt to accelerate renewable-energy production without diminishing the integrity of the NEPA process.

The tiering applied by Smart from the Start is a standard often used in environmental reviews. Federal agencies are encouraged to tier their environmental studies to avoid repetitive discussions and to focus on issues that are ripe for decision at each level of planning. As long as tiering adequately addresses NEPA process requirements as outlined in 40 C.F.R. § 1508.28, it should be an effective tool for achieving timely project approvals. Likewise, renewable-energy projects that do become federal action proposals can also apply FAA Order 5050.4B as a template to ensure streamlining efficiency and integrity. Although this order is not exclusive to renewable-energy projects, it provides an ideal template for NEPA streamlining. The order formulates a detailed NEPA compliance manual that is both easy to follow and faithful to the CEQ’s NEPA requirements. The federal government sets an example for the nation in its energy policy.

Renewable-energy projects cost time and effort, whether private or public, and require extensive planning to ensure that the environment is protected and that the nation has the energy it needs in the future. An efficient and practical environmental-review process is imperative to reach this nation’s renewable-energy goals. The DOE, the DOI, and the FAA provide impressive templates that can be integrated and used to implement NEPA review in renewable-energy project development.

Keywords: environmental litigation, ARRA, DOI, DOE, BOEMRE, BLM, renewable energy, environmental review, streamlining

Katherine Kennedy is a candidate for her Juris Doctorate (2013) at the Appalachian School of Law. Eric Andreas is a partner at Wiley Rein LLP in Washington, D.C.

Copyright © 2012, American Bar Association. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s).