Presidential Memo to Boost Western Water Projects—Can it Succeed?

Posted on November 1, 2018 by Rick Glick

On October 19, President Trump issued a “Memorandum Promoting the Reliable Supply and Delivery of Water in the West.”  The Memorandum calls for streamlining federal water infrastructure development and operations, apparently by skirting environmental and other administrative processes.  As previously noted here, the Administration is intent on weakening the laws controlling federal water projects, but that cannot be accomplished by executive fiat alone.

At the core of the Memorandum is a directive to the Secretaries of the Interior and Commerce to designate, within 30 days, “one official to coordinate the agencies’ [Endangered Species Act (ESA)] and [National Environmental Policy Act (NEPA)] compliance responsibilities” and to “develop a proposed plan, for consideration by the Secretaries, to appropriately suspend, revise, or rescind any regulations or procedures that unduly burden the project beyond the degree necessary to protect the public interest or otherwise comply with the law.” 

This directive evinces a misapprehension of the legal framework, and continues a failed approach to regulatory change by shortcutting federal law.

First, Cabinet departments are not monolithic entities; they are made up of multiple sub-agencies, each with its own statutory guidelines.  Among others, Interior includes the Bureau of Reclamation, which builds and operates the water projects, and the U.S. Fish and Wildlife Service, which has responsibility for resident fish and terrestrial species.  BOR is the lead agency for NEPA, while the FWS is a reviewing agency of BOR’s work, and serves an independent consulting role under the ESA.  The only role of Commerce is through NOAA Fisheries, an agency within Commerce with responsibility for anadromous fish and marine mammals. 

While the agencies can and do coordinate to a certain extent, they have discrete legal functions and responsibilities.  A single officer to coordinate these disparate activities seems impracticable.

Second, the Administration’s overarching approach to loosening environmental rules is to rescind, suspend or delay implementation of environmental regulations that it believes impede the economy.  However, time and again the courts have found such actions to violate the Administrative Procedures Act or other statutes.  See, for example, the decision of a federal judge in South Carolina earlier this year invalidating “suspension” of the Waters of the U. S. (WOTUS) rule, or the D. C. Circuit’s rejection of extending the effective date of the Chemical Disaster Rule.  Implementation of the Memorandum is likely to meet the same fate.

Bringing efficiency to a convoluted, expensive and protracted process is a laudable goal, but one that has eluded previous administrations.  The problem is that the APA and the environmental protection laws are not designed for efficiency, but to make sure that the government has considered the potential impacts of its actions before implementation.  Without an act of Congress, efficiency gains will be at the margin.

LNG Global Impacts Not FERC’s Problem

Posted on July 11, 2016 by Rick Glick

In companion cases, on June 28 the DC Circuit Court of Appeals held that the Federal Energy Regulatory Commission, in its environmental impacts analysis of two Gulf Coast LNG terminals, need not assess the potential for increased natural gas extraction and use, or market effects.  The first case deals with the Freeport project in Texas, and the second the Sabine Pass project in Louisiana; the court considered these cases in parallel with each other, and the Sabine Pass case follows the reasoning in the Freeport case.

 The Sierra Club and other national NGOs have attacked LNG facilities (1) for their potential to cause an increase in fracking to extract natural gas and the attendant emission of greenhouse gases, and (2) for increasing the use of U.S.- produced natural gas in world markets, which they assert will drive up the price of natural gas domestically, thus making coal more competitive and its use more prevalent in the U.S.  On this basis the Freeport and Sabine Pass plaintiffs argued that FERC’s failure to consider these potential effects violates the National Environmental Policy Act.  The court disagreed, finding that these effects are too attenuated for FERC to have to evaluate. 

Central to the cases is the fact that the Natural Gas Act confers exclusive authority over the export of natural gas on the Department of Energy, whereas FERC is only responsible for the siting of LNG facilities.  The court reasoned that FERC’s approval of LNG facilities are not the proximate cause of gas exports, which only DOE can approve.  Therefore, FERC need not consider environmental impacts related to market forces that could increase domestic production of gas and the use of gas outside of the United States.

 These same projects face challenges brought by the same NGOs against DOE in which the issue is whether DOE complied with NEPA in authorizing exports of LNG.  The Freeport and Sabine Pass courts “express no opinion” on the merits of the DOE cases.  Still, it seems that the relationship between export approvals and operation of global gas markets is at least as attenuated as FERC’s authorization to construct facilities.  My sense is that DOE will likely prevail there as well.

The National Environmental Policy Act: What Constitutes Segmentation and a “Direct” Environmental Impact?

Posted on February 14, 2014 by Thomas Hnasko

On February 11, 2013, the United States District Court for the District of New Mexico denied a Motion for Preliminary Injunction filed by the Village of Logan, seeking to compel the Bureau of Reclamation (“BOR”) to perform an environmental impact statement (“EIS”) for the Ute Lake Diversion Project in eastern New Mexico. The BOR issued an environmental assessment (“EA”), which failed to analyze the foreseeable impacts to Ute Lake based on the design capacity of the intake structure to withdraw 24,000 acre-feet per year (“af/yr”). The BOR contended that, while contracts had been issued to deliver the full 24,000 af/yr of water, the project which it funded was limited to withdrawals from the lake of only 16,450 af/yr. Significantly, the environmental and socioeconomic impacts of 16,450 af/yr paled in comparison to the projected impacts resulting from withdrawals of 24,000 af/yr.

The briefs in the Tenth Circuit present an issue of first impression under NEPA. That is, can the BOR defer an analysis of certain impacts it knows will occur in the future, and summarily discuss those deleterious impacts under the rubric of “cumulative” rather than “direct” effects? According to the Department of Justice, Logan’s complaint about the matter is only one of “nomenclature,” and it should not matter whether the effects are deemed “direct” or “cumulative.” In response, Logan argues that the difference is one of substance, as an analysis of “cumulative” effects of a project does not require a comparison of the project to reasonably available alternatives, whereas an analysis of foreseeable “direct” effects, i.e., withdrawals up to the capacity of the intake structure, would require a vigorous comparison to available alternatives. These alternatives, which received only a one-half page discussion in the EA’s section on cumulative effects, include retirement of wasteful irrigation groundwater rights to augment municipal water supplies in eastern New Mexico. According to Logan, allowing the BOR to analyze a plainly foreseeable “direct” effect as merely “cumulative” would result in the illegal segmentation of the project. If such a result were sanctioned, there would be no NEPA analysis ever undertaken of the effects between 16,450 af/yr and 24,000 af/yr.

Oral argument is scheduled for March 17, 2014.