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New White House GHG Guidance Broader Than Last

The White House Council on Environmental Quality (CEQ) Thursday released updated and expanded draft guidance on how federal agencies should consider greenhouse gas (GHG) emissions and climate change when weighing development under the National Environmental Policy Act (NEPA).

The draft guidance is available for 60 days of public comment. According to CEQ, it:

  • Encourages agencies to draw from their experience and expertise to determine the appropriate level (broad, programmatic or project- or site-specific) and type (quantitative or qualitative) of analysis required.
  • Focuses analysis on the projects and actions with the greatest impacts by providing a reference point of 25,000 metric tons of carbon dioxide-equivalent emissions on an annual basis below which a quantitative analysis of GHG emissions is not recommended unless it is easily accomplished.
  • Counsels agencies to use the information developed during the NEPA review to consider alternatives that are more resilient to the effects of a changing climate; and
  • Advises agencies to use existing information and science when assessing proposed actions, and highlights tools and methodologies that are available to them for conducting their analyses.

"The guidance seeks to remove uncertainty and provide agencies with a reasoned approach as to how to describe the effects of greenhouse gas emissions from and the impacts of climate change on their proposed actions," CEQ said. "Once finalized, the guidance will provide clarity and consistency among agencies, many of which already evaluate greenhouse gas and climate impacts in their environmental reviews."

The release updates earlier draft guidance that was released by CEQ in 2010 but never finalized. CEQ received and considered comments before releasing the updated proposal, which addresses land and resource management actions where the previous guidance did not.

That’s a significant change, Kevin Ewing, a partner with the Washington DC-based law firm Bracewell & Giuliani told NGI. “That’s actually quite important because...that’s goodly portions of the Interior Department, and they cover huge swaths of the United States. And so the reach of this guidance is geographically much broader than 2010,” he said.

The revised guidance also has relevance to the argument -- frequently used by environmentalists in attempts to block liquefied natural gas (LNG) projects -- that such projects stimulate natural gas production, whose upstream environmental consequences should be considered by FERC under NEPA.

“The document makes a confusing reference, in parentheticals, to what it calls ‘upstream emissions’ and ‘downstream emissions’ without really spending the time in the document to explain what is really meant by this…” Ewing said.

These terms have featured in filings by the Sierra Club, for instance, in opposition to LNG projects, and in court cases.

“We see these terms now crop up in a NEPA document from the White House,” Ewing said. “We are left uncertain whether the EPA [Environmental Protection Agency] is signaling its intention that upstream oil and gas impact ‘must’ or ‘should’ or ‘may’ be part of the climate change analysis that is discussed in the guidance. It's just not clear enough, and yet they seem to be recognizing upstream, and for that matter downstream emissions. And so there's an invitation, I think, for those who have opposed projects to grapple on to that statement, hieroglyphic though it might be…”

So far, FERC has turned away the upstream emissions argument against LNG projects, but it has done so because it is too speculative, according to the Commission, Ewing said, not because it is “outside the zone of NEPA interest.”

Ewing said the latest guidance “...definitely takes the perspective that this is a long look into the future over the duration of long-term projects. Well, pipelines and LNG facilities have very long lives. And so what, in essence, the guidance appears to be asking agencies to do is to anticipate over the lifetime of these long-lived projects how climate change will be concurrently affecting the specific resources also affected by the project. This has hitherto been deemed vastly too speculative.”

For instance, the 2010 guidance included the phrase “‘bounded by limits of feasibility’” when it addressed the indirect effects analysis, Ewing said. That language is gone.

A “...thoughtful reluctance to ask agencies to crystal ball gaze...has abated in the 2014 guidance,” he said. “And I think it has been replaced by an encouragement for agencies to look deeply into the future, as to not just long-lived projects and their impacts, but perhaps more of concern, deeply into the future as to how climate change will eventuate regionally and with respect to particular resources.”

Ewing said he did not think the guidance, if implemented as it currently stands, would have the potential to prevent sound projects from advancing. Still, it’s uncertain how the various agencies ultimately would apply the guidance. “And we don’t know how the potential differences will be reconciled in multi-agency approval processes,” he said. “And that is predominantly the vein in which LNG and pipeline projects are approved.”

An analysis by ClearView Energy Partners LLC found that the latest guidance is broader than that issued in 2010.

The draft “...declares that climate change falls squarely within NEPA scope and calls on agencies to consider climate impacts in all actions,” ClearView analysts said in a note Friday. “The original draft gently suggested direct emissions totaling 25,000 [metric tons of carbon dioxide per year] as an appropriate regulatory threshold. This year’s version uses the same ‘reference point,’ but it may be a lower bar because it does not appear to exclude indirect emissions (instead, CEQ appears to be asking agencies to broadly consider ‘connected’ emissions).”

What it could mean -- if implemented -- for backers of LNG projects, for instance, is that they will have to spend more money and effort demonstrating that their projects should be evaluated on a limited basis that excludes impacts of upstream and downstream emissions, ClearView said.

“For example, a sponsor of a natural gas export project might need to demonstrate through additional consultant studies that increased natural gas production (and associated emissions) would otherwise occur even without exports,” ClearView said.

Evaluating downstream emissions could support some projects. For instance, natural gas pipelines could ultimately aid in the displacement of some higher-carbon intensity fuels, ClearView said.

For Nathan Matthews, a Sierra Club staff attorney in San Francisco, the proposal from the White House is welcome, but it’s not a game-changer.

“This guidance isn't proposing a change in the law or a change in the requirements facing FERC,” Matthews told NGI. “It's just reminding federal agencies the existing law already requires you to look at upstream and downstream effects [of projects]. It is reassuring to see that the Council on Environmental Quality shares our interpretation of the existing law, but it's not a new requirement...Our position is that FERC has already had this obligation and this is just another voice weighing in reminding FERC and other federal agencies...of what those existing obligations already are.”

CEQ also released final guidance on programmatic NEPA reviews. It is intended to aid the understanding the environmental impacts from proposed large-scope federal actions and activities, and to facilitate agency compliance with NEPA by clarifying the different planning scenarios under which an agency may prepare a programmatic, broad-scale review.

Federal agencies had requested the guidance. Its goal is to encourage a more consistent approach to programmatic NEPA reviews so that the analyses and documentation will allow for the efficient completion of any necessary tiered reviews, CEQ said. It builds on guidance issued in 1981 that explained the use of tiering and its place in the NEPA process.

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