EPA Proposes to Broaden Categorical Exemptions from NEPA Review

By Steve Jones

http://www.martenlaw.com/news/?20061220-nepa-review-exceptions

This week, on December 19, 2006, EPA published a proposed rule[1] that would administratively exempt a broad range of actions currently subject to review under the National Environmental Policy Act (“NEPA”). The proposed rule would allow environmental “benchmarking,” meaning reliance on existing environmental analysis rather than submission of entirely new information. The rule would also extend to actions that affect the environment of other countries or what EPA staff has termed the “global commons.”

Background

NEPA requires federal agencies to take a “hard look” at the environmental consequences of proposed actions with a federal nexus. Specifically, agencies must prepare an environmental impact statement (“EIS”) for any proposed federal action that may significantly affect the human environment.[2] If an agency is uncertain whether its proposed action will have significant environmental impacts, it must prepare an environmental assessment (“EA”) to determine whether an EIS is necessary.[3] If the EA threshold determination concludes that an EIS is not required, the agency issues a Finding of No Significant Impact.[4]

Congress statutorily exempted certain federal actions from NEPA. For example, Section 7(c) of the Energy Supply and Environmental Coordination Act of 1974[5] exempts EPA’s actions under the Clean Air Act from NEPA. EPA is also exempted from NEPA’s procedural requirements for response actions taken under CERCLA. According to EPA, “Courts also consistently have recognized that EPA procedures or environmental reviews under enabling legislation are functionally equivalent to the NEPA process and thus exempt from the procedural requirements in NEPA.”[6]

NEPA Categorical Exclusions

Even if they are not statutorily exempt, some actions may not be subject to either an EIS or EA if federal agencies adopt rules under which they “categorically exclude” from review actions that experience has indicated will not have significant environmental effects, individually or cumulatively. These “categorical exclusions” (“CEs”) have the practical effect of exempting certain activity from review under NEPA. CEs have been a lightning rod for controversy and a source of litigation. As previously reported in this newsletter,[7] this past fall, the White House Council on Environmental Quality (“CEQ”) issued guidance that encourages the increased use of CEs.[8]

EPA’s Proposed Rule

EPA’s proposed rule follows CEQ’s guidance and would modify current EPA practice in at least three significant ways: First, many discharge sources currently regulated by EPA would no longer be subject to NEPA’s requirements. For example, re-issued permits for mining discharges, animal feedlots, offshore energy platforms, food processors and other facilities located in areas where EPA is the permitting authority would all be exempt, though newly-issued permits would still be subject to review under NEPA.

NPDES permits are one of the newly-proposed categorical exemptions. The proposed rule states that the exemption would apply when the agency is modifying or reissuing existing permits. An internal “Action Memorandum”[9] prepared by EPA staff regarding the proposed rule confirms that “[A]lthough the proposed rule includes two proposed categorical exclusions for actions involving new source NPDES permit modifications or re-issuance of certain permits, neither of these would be applicable to initial permit applications.”[10]

Second, EPA’s proposal would also ease requirements under NEPA for state and local government recipients of EPA grants, potentially allowing them to rely on existing environmental analysis and allowing the EPA responsible official to determine whether a CE was appropriate for such grant proposals. In addition, “if the applicant cannot afford to provide the required environmental information to EPA, EPA would undertake the environmental review without input from the applicant.”[11] Presumably this would be through the use of “existing data and information, including data and information from other federal agencies and state, local, or federally-recognized Indian tribal governments with jurisdiction by law or special expertise.”[12]

This process also follows the CEQ guidance issued this past fall, which allowed for “benchmarking.” Benchmarking is defined by CEQ as allowing an agency to rely on assessments of completed or on-going actions to substantiate a CE. CEQ also encouraged agencies to use records and information – i.e., “benchmarks” – from other public or private entities’ experiences with similar actions, so long as the environmental effects are comparable.[13] If the proposed rule is ultimately adopted, EPA staff estimates that approximately 300 grant applications annually would be covered by the proposal. Of those applications, 60% would be documented with a CE and 40% with an EA and supporting documents, with only one EIS being anticipated within a three-year period.[14]

The final category of affected actions would be those that could have potential international or transboundary impacts. Courts have held that when federal action could have impacts across the United States’ borders, NEPA may require assessment of those impacts. For example, in Swinomish Tribal Community v. Federal Energy Regulatory Commission,[15] Canadian intervenors were allowed to challenge the adequacy of an EIS in connection with approval of an amendment to the City of Seattle’s license that permitted raising the height of the Ross Dam on the Skagit River in Washington State.[16] In addition to this case law, Executive Order 12114 requires application of NEPA to actions affecting the environment of a foreign nation or international resources. EPA’s proposed rule follows the CEQ guidance and allows the use of CEs and benchmarking for these activities (for example, ocean dumping under the Marine Protection, Research, and Sanctuaries Act).[17]

Opposition Expected to EPA Proposal

Implementation of EPA’s proposed rule could be controversial and the agency says it is anticipating criticism from environmentalists over the expanded use of CEs. EPA’s internal Action Memorandum stated that “these groups may object to certain, or all, of the proposed amended and new [categorical exemptions] out of concern that certain of the proposed actions for categorical exclusions should not be excluded, or a general concern that the agency is attempting to remove itself from the environmental review process.”[18] EPA, however, argues that the rule streamlines existing requirements: “These groups should be pleased that EPA is proposing to consolidate and amend existing and add new extraordinary circumstances (e.g. those circumstances that may cause a significant environmental effect such that an action that otherwise meets the requirements [for] a categorical exclusion may not be categorically excluded).”[19]

With this week’s publication of the proposed rule in the Federal Register, the public comment period regarding EPA’s newly proposed procedures has begun and the debate regarding the impacts of the expanded use of CEs and benchmarking now commences.

For more information, please contact Steve Jones.

[1] A copy of the EPA’s proposal can be viewed at http://www.epa.gov/fedrgstr/EPA-GENERAL/2006/December/Day-19/

[2] 42 U.S.C. § 4322(2)(C).

[3] 40 C.F.R. § 1508.9(a)(1).

[4] Id. at § 1508.13.

[5] 15 U.S.C. § 793(c)(1).

[6] This quote appears on EPA’s website: “EPA Compliance with NEPA” which can be found at http://www.epa.gov/compliance/nepa/epacompliance/index.html.

[7] See “CEQ Issues Proposed Guidance on NEPA Categorical Exclusions”, Marten Law Group Environmental News, October 18, 2006. This story can be viewed at http://www.martenlaw.com/news/?20061018-nepa-exclusions

[8] NEPA is codified at 42 U.S.C. § 4321.7

[9] The Action Memorandum can be viewed at http://www.insideepa.com/secure/data_extra/dir_06/epa2006_2004_3.pdf (subscription required to view this link).

[10]Id. at 8.

[11] Id. at 4.

[12] Id.

[13] See “CEQ Issues Proposed Guidance on NEPA Categorical Exclusions”, Marten Law Group Environmental News, October 18, 2006, link provided in note 7 above.

[14] Id. at 6.

[15] 627 F.2d 499 (D.C. Cir. 1980).

[16] 627 F.3d at 511-12. Similarly, in Wilderness Society v. Morton, 479 F.2d 842 (D.C. Cir. 1973), the court granted intervenor status to Canadian environmental organizations that were challenging the adequacy of the trans-Alaska pipeline EIS. The court granted intervenor status because it found that there was a reasonable possibility that oil spill damage could significantly affect Canadian resources, and that Canadian interests were not adequately represented by other parties in the case.

[17] Action Memorandum, previously cited in note 11, at 3.

[18] Id. at 8.

[19] Id.

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