environmental issues in federal permitting for energy projects
TRANSCRIPT
Environmental Issues in Federal Permitting for Energy Projects
Winston & Strawn LLP July 14, 2015
Today’s eLunch Presenters
Tyson Smith Energy
San Francisco
Stephanie Sebor Environmental
Chicago
Eleni Kouimelis Environmental
Chicago
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Agenda
• Brief Introduction • Emerging Issues in Energy Project Development
• Rethinking Transmission under NEPA • Mitigating ESA Listing Decision Uncertainty
• Environmental Regulatory Developments • Recent Amendments to Incidental Take Statement Regulations • Migratory Bird Treaty Act Incidental Take Permitting Program • Waters of the United States Rule • Update on EPA’s Greenhouse Gas Rulemakings
• CEQ Issuance of NEPA Guidance Documents
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Emerging Issues in Energy Project Development
Energy Project Development
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Project Approvals
Clean Water
Act
Clean Air Act
NEPA
ESA
NHPA
State CPCN
Project Approvers
EPA/State EPA
Corps of Engin’rs
Fed. Land Agencies
Other Fed.
Agencies
ISOs
State Utility Commission
What Was Old Is New Again… • Transmission corridor development and NEPA was a “hot topic” in
the 1970s and 1980s • Coextensive with period of large power generation station construction • Along with highway construction, developed a large body of law
addressing “connected actions” and “segmentation” • Involved applicants for permits that were responsible for siting,
constructing, and operating the transmission lines and the generation facility
• Significant changes in electricity system since that time • De-regulation and the rise of merchant generation • Separation of generation and transmission systems • Major advances in renewable energy development
• Result: Caselaw does not necessarily match current reality
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Fermi 3 Project • DTE’s proposed 1600 MW new nuclear project in Michigan at site
of existing Fermi 2 reactor • New offsite transmission lines would be owned and operated by
ITCTransmission • DTE has no control over the siting, design, or operation of offsite
transmission lines • Final transmission route determined in a Certificate of Public
Convenience and Necessity from the Michigan Public Service Commission
• Nuclear Regulatory Commission’s FEIS • Explains that ITCTransmission has not formally announced a route for
a new offsite transmission line serving Fermi 3 • Relied on publicly-available information and reasonable expectations
regarding configurations that ITCTransmission would use based on standard industry practice
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• Under 40 CFR 1508.25, connected actions: • Automatically trigger other
actions requiring EIS • Cannot or will not proceed
unless other actions are taken previously or simultaneously
• Are interdependent parts of a larger action and depend on the larger action for their justification
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Application to New Paradigm
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Application to New Paradigm
• Improper segmentation factors: • Whether there is a proposed
action; • Whether the actions have
independent utility; and • Whether there is sufficient federal
control and responsibility.
Effects of ESA Listing Decisions
• Federal permitting agency is not the same as the responsible agency under the ESA
• Scope and timing of ESA listing decisions may be uncertain • Geographic scope of affected species • Timing of final decisions
• Creates substantial licensing/permitting uncertainty • Agencies hesitant to give appearance of rushing permit decision
prior to listing decision • Permitting agency must coordinate with USFWS after listing decision • Delay adversely affects project developer
• Regulatory uncertainty (timing of project start)
• Economic impacts (financing, cost of construction)
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Geographic Range
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Timing of ESA Decisions
• Practical • Informal coordination with USFWS
to inform them of schedule issues
• Pre-staged internal assessments if species is listed
• Legal • If species not yet listed, then
consultation not required
• If “no effect,” then consultation not required • Timing of listing v. effective date
• Focus only on actions “authorized” by Federal agency
• Consider license/permit conditions
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Red Knot
Proposed Listing as “Threatened” Sept. 13, 2013
Reopening Comment Period April 4, 2014
Reopening Comment Period May 14, 2014
Final Listing Decision (Target) Sept. 13, 2014
Final Listing Decision (Actual) Dec. 11, 2014
Northern Long-Eared Bat
Proposed Listing Oct. 2, 2013
Extension of Listing Decision June 30, 2014
Reopening Comment Period Nov. 18, 2014
Final Listing Decision (Actual) April 2, 2015
End of Comment Period on 4(d) Rule July 1, 2015
Greater Sage Grouse
Listing Warranted, but Precluded Mar. 5, 2010
Status Review Sept. 1, 2015
Environmental Regulatory Developments
• On May 1, 2015, FWS and National Marine Fisheries Services issued a final rule amending their incidental take statement regulations
• Two components: • The wildlife agencies codified the use of surrogates to express the
amount or extent of a “take” • The wildlife agencies also codified their authority not to provide an
ITS with a biological opinion for federal planning decisions that anticipate future harm • Rather, an ITS will be provided at the point when future activities that
could result in takings are authorized
Revisions to Incidental Take Statement Regulations
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• On May, 26, 2015, the U.S. Fish and Wildlife Service (“FWS”) initiated NEPA review of a proposed program for authorizing the incidental take of migratory birds protected by the MBTA
• Possible approaches include: • General incidental take authorizations for some types of hazards
associated with particular industry sectors • Individual permits authorizing incidental take from particular projects
or activities • Memoranda of Understanding (“MOU”) with federal agencies • Voluntary guidance for industry sectors
• FWS is requesting public comment on whether it should develop a general incidental take permit for the wind energy industry • Public comments are due July 27, 2015
Migratory Bird Treaty Act (“MBTA”) Incidental Take Permit Program
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• On May 26, 2015, EPA and the U.S. Army Corps of Engineers finalized a rule defining “waters of the United States” subject to the Clean Water Act • The rule was published in the Federal Register on June 29, 2015
• Rule attempts to address uncertainty regarding the scope of the Clean Water Act’s jurisdiction, which is limited to navigable waters, defined as the waters of the United States, including the territorial seas • “Waters of the United States” is not defined in the Clean Water Act • The Supreme Court has interpreted the term in several cases, most
recently in Rapanos v. United States in 2006, which did not result in a majority opinion
• The rule affects both the NPDES and Section 404 permitting programs
Waters of the United States Rule
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• Rule establishes eight categories of jurisdictional waters: • Six of which are per se covered by the Clean Water Act:
• Traditional navigable waters • Interstate waters • Territorial seas • Impoundments of jurisdictional waters • Tributaries • Adjacent waters
• Two of which may be subject to the Clean Water Act after a case-specific significant nexus analysis: • Isolated waters (such as Prairie potholes) • “Other” waters
• Waters within the 100-year floodplain of a traditional navigable water, interstate water, or the territorial seas
• Waters that are within 4,000 feet of the ordinary high water mark of a water of the United States
Waters of the United States Rule
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• Rule establishes exclusions for converted cropland, waste treatment systems, certain ditches, groundwater, erosional features, and certain stormwater control features.
• Rule has been criticized as an expansion of regulatory authority • Broad definition of tributary • Expansive significant nexus test
• Rule has also been criticized for failing to provide clarity regarding the scope of the Clean Water Act’s jurisdiction • Vague and complicated definitions will be difficult for regulators to
implement
• Rule has been attacked from various angles • Litigation brought by both industry and states
• Legislation – riders to appropriations bills and bills in both House and Senate
Waters of the United States Rule
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• In 2014, EPA proposed three rules regulating GHG emissions from new, existing, and modified or reconstructed power plants under Section 111 of the Clean Air Act
• EPA is planning to finalize these rules this summer • First, EPA will issue its Section 111(b) rule for new power plants
• EPA sent the rule to OMB for review on May 7th
• Then, EPA will issue the final Clean Power Plan for existing sources • EPA sent the rule to OMB for review on June 1st
• At the same time, EPA will propose a federal plan for meeting the Clean Power Plan goals
• Last, EPA will issue its final Carbon Pollution Standards for Modified and Reconstructed Power Plants • EPA sent the rule to OMB for review on June 23rd
EPA Greenhouse Gas Regulatory Update
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• Last year, the Supreme Court invalidated the Tailoring Rule in Utility Air Regulatory Group v. EPA • EPA may require sources that are subject to PSD and Title V
permitting based on their emissions of conventional pollutants to comply with best available control technology requirements for GHGs if they emit more than a de minimis quantity of GHGs
• EPA issued a memo on July 24, 2014 interpreting the de minimis quantity of GHGs to be 75,000 tons per year of CO2e
• D.C. Circuit vacated the Tailoring Rule regulations on April 10, 2015 and ordered EPA to conduct rulemaking to implement the Court’s decision • Uncertainty regarding how PSD permits that were issued to sources
based solely on their GHG emissions under the Tailoring Rule will be handled in light of the Court’s decision.
Tailoring Rule Update
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Tailoring Rule Update • On May 7, 2015, EPA issued a direct final rule that would allow
for recession of certain PSD permits issued under Step 2 of the Tailoring Rule • The rule became effective on July 6, 2015
• On June 15, 2015 EPA announced its intention to conduct rulemaking to establish a de minimis threshold of GHG emissions that will trigger PSD permitting and GHG BACT requirements for sources that are already subject to PSD based on their emissions of conventional pollutants • EPA did not announce a firm timeline for issuing a proposed rule, but
indicated that a proposed rule is still a year away
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CEQ Issuance of NEPA Guidance Documents
CEQ Guidance on GHGs in NEPA Reviews
• On December 18, 2014, CEQ published revised draft guidance describing how federal agencies should consider the effects of GHG emissions and climate change in their NEPA reviews • Supersedes prior draft guidance issued in 2010 • Guidance aims to provide clarity to federal agencies and to improve
consistency in how GHG emissions and climate change are addressed in NEPA reviews
• Guidance provides a reference point of 25,000 tpy CO2e emissions below which a quantitative analysis of GHGs is not warranted unless it is easily accomplished
• Industry groups have urged CEQ to withdraw or narrow its guidance
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• On December 18, 2014, White House Council on Environmental Quality (CEQ) published a final guidance document clarifying federal agencies’ use of programmatic NEPA reviews • Programmatic reviews are performed to assess the environmental
impacts of proposed policies, plans, or programs. • Agencies should conduct programmatic NEPA reviews when
adopting official policies, formal strategic plans, or approving multiple projects on a large scale
• Programmatic NEPA reviews will typically be followed by project-specific NEPA reviews • Industry has expressed concern that more frequent programmatic
NEPA reviews could cause permitting delays.
CEQ Guidance on Programmatic NEPA Reviews
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Questions?
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Thank You.
Tyson Smith Energy
San Francisco
Stephanie Sebor Environmental
Chicago
Eleni Kouimelis Environmental
Chicago
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