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Less Than You Think - New White House Guidance on Environmental Policy Might Have a Limited Effect on FERC

The National Environmental Policy Act was created to ensure federal agencies consider the environmental impacts of their actions and decisions, but it is the Council on Environmental Quality (CEQ), which serves as the White House’s environmental policy arm, that provides guidance as to how those agencies should evaluate the projects subject to their review. Energy and environmental policy have shifted under President Biden, and interim guidance recently submitted by the CEQ extends efforts to prioritize the administration’s commitment toward lowering greenhouse gas (GHG) emissions. Still, it’s not easy to swiftly change policy, for a variety of reasons. In today’s RBN blog, we look at the CEQ’s interim guidance and why the real-world impact on energy and environmental policy might be hard to quantify for a variety of reasons, at least in the short term.

While policy can swing significantly from administration to administration, the shifts have been particularly sharp over the past seven years. Under then-President Obama, the CEQ said in 2016 that federal agencies should consider the impact on GHG emissions and climate change for projects under their review. That guidance was set aside under the Trump administration, which also sought to streamline NEPA permitting reviews for infrastructure projects (see You Never Can Tell). Policy has reversed again under President Biden, whose administration has generally restored provisions that were in effect before their modification in 2020. That reversal also established the basis for its latest guidance, “National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions and Climate Change,” which was issued January 9. The CEQ guidance is intended to provide federal agencies with a common approach for assessing their proposed actions while recognizing each agency’s unique circumstances and authorities. These include the Federal Energy Regulatory Commission (FERC), which regulates the interstate transmission of electricity, natural gas and oil. FERC also reviews proposals to build LNG terminals and interstate natural gas pipelines and licenses hydropower projects. It’s also been asserted that the CEQ guidance would facilitate compliance with existing NEPA requirements and improve the efficiency and consistency of reviews of proposed federal actions for agencies, decision makers, project proponents and the public. (Note: The CEQ is accepting public comment on the interim guidance through March 10, but it is effective immediately.)

According to the CEQ guidance, agencies should consider two main factors when conducting climate change analyses in NEPA reviews: (1) The potential effects of a proposed action on climate change, including by assessing both GHG emissions and reductions from the proposed action; and (2) the effects of climate change on a proposed action and its environmental impacts. The guidance lists 11 specific ways in which federal agencies should apply NEPA principles and existing best practices to their climate-change analyses. As you’ll see, a number of these are highly contentious — and highly subjective to boot, suggesting that we may continue to see big changes in their interpretation each time control of the White House toggles from one party to the other. Here are some of the key provisions:

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