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.

Tenth Circuit to Decide Whether NEPA Requires Impacts from Water Diversion Project to Be Analyzed Based On Maximum Achievable Diversions

Posted on May 13, 2013 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 analyzed the impacts from the diversion project based on the withdrawal of only 16,450 acre-feet per year (“af/yr”), despite the fact that the intake structure capacity is 24,000 af/yr.  The BOR contended that the intake structure did not have sufficient pumping capacity and other infrastructure to achieve 24,000 af/yr.

At the preliminary injunction hearing, Logan presented evidence that the Interstate Stream Commission of New Mexico (“ISC”), as the putative owner of the water rights within Ute Lake, had contracted to sell 24,000 af/yr and that the engineering analysis demonstrated sufficient existing capacity within the intake structure to accommodate withdrawals of 24,000 af/yr.  Consequently, similar to analyses required under other environmental laws, including the Clean Air Act, Logan argued that the impacts from the proposed project must be analyzed based on the maximum achievable withdrawal capacity of the intake structure.

The difference in the severity of impacts, based on 24,000 acre-feet withdrawals and 16,450 acre-feet withdrawals, was significant.  The EA conceded that, at 24,000 acre-feet per year, the minimum fisheries pool in Ute Lake – established to provide a minimum necessary habitat for recreational fishing – would be breached at least 20% of the time over a 30-year period.  Allowing the fisheries pool to be breached for at least 6 years over the life of the project created inter-related economic impacts, including significantly decreased property values on the shoreline, decreased tax receipts for the community, lost jobs, and significantly declining revenue for the New Mexico Department of Game and Fish.

The district court ruled that the EA, together with its finding of no significant impact (“FONSI”), was not arbitrary and capricious based on the assumption that the withdrawals would only reach 16,450 af/yr.  The Court stated that, “If in the future, more infrastructure is added to facilitate further withdrawals, primary analysis of the environmental impact may be undertaken then.”  The Court did not state whether such a “primary analysis” would occur within or outside of NEPA, and who would be responsible for initiating such an analysis.  Moreover, assuming that the Court meant an analysis of “direct impacts” by the phrase “primary analysis,” it is unclear how such an analysis would not suffer from predetermination under NEPA.  After all, the intake structure would already be built and there could not be any serious consideration of viable alternatives to the project.

The central issue on appeal is whether a federal agency may postpone part of its NEPA analysis to some unspecified time in the future, despite the fact that the capacity of the project, and the ability to withdraw 24,000 af/yr, is likely a “foreseeable” impact as defined in the Council on Environmental Quality regulations.

Environmental Site Assessment Flexibility or Further Complexity? EPA Adopts Forestland and Rural Property Phase I Standard Practice

Posted on January 16, 2009 by Charles Efflandt

On December 23, 2008, EPA issued a direct final rule amending the “All Appropriate Inquiries Rule” [Standards for Conducting All Appropriate Inquiry]by adopting ASTM International’s “Standard Practice for Environmental Site Assessment Process for Forestland or Rural Property” (ASTM E2247-08) [EPA Amendment to AAI Rule]. ASTM E2247-08 was published after EPA promulgated the All Appropriate Inquires (AAI) rule and is specifically tailored to conducting Phase I environmental site assessments of large tracts of rural and forestland property. EPA’s action incorporates the ASTM E2247-08 forestland and rural property assessment practices as a federal standard for establishing the AAI component of the bona fide prospective purchaser, contiguous property owner and innocent landowner defenses to CERCLA owner/operator liability.

 

The AAI Rule as originally promulgated referenced and recognized as compliant ASTM E1527-05, which provides practices for conducting AAI of commercial real estate. ASTM E2247-08 is a variant of the original standard that focuses on the environmental assessment of greater than 120 acres of forestland or rural property or property with a developed use of only managed forestland and/or agriculture. Users of the forestland and rural property Phase I practices are intended to include the forest industry, conservation organizations, natural resource industries and rural real estate professionals and lenders.

 

Although the Forestland or Rural Property Standard is over 40 pages in length, EPA admits that the differences between this standard and the standards incorporated in the original AAI Rule are few and relatively insignificant.

 

Generally, the forestland and rural property practices offer the “Environmental Professional” more options to satisfy the site reconnaissance component of the Phase I assessment to, in part, alleviate the burden of visually inspecting these large properties. Also, the 120 acres (or more) that qualify the property for this standard need not be contiguous, provided all parcels are part of the same transaction and have substantially the same land use. Minor differences in the “past and present owner/occupant” interview requirements also exist that take into account the nature and use of these properties.

 

Both the original Rule and ASTM E2247-08 require the Phase I “User” to search for environmental liens and collect other information reasonably ascertainable to the User. Although the original Rule does not mandate disclosure of this information to the Environmental Professional, ASTM E2247-08 requires that such information be disclosed.

 

ASTM E2247-08 also includes a more extensive list of potentially applicable historical records and offers guidance on “beyond scope” assessments particularly relevant to forestland and rural property such as endangered species and non-point source assessment considerations.

Conceptually, a modified Phase I assessment practice for large tracts of forestland and rural property makes sense. However, EPA’s recent amendment to the AAI Rule provides that a purchaser of forestland or rural property within the scope of ASTM E2247-08 need not use the practices in that standard. Rather, such purchasers may continue to follow the provisions of the original Rule and ASTM E1527-05.

 

That being the case, and given that the new forestland and rural property standard is in many respects more stringent than the original Rule, it is debatable whether this amendment of the Rule actually provides focus, efficiency and useful flexibility to the assessment of these types of properties or simply adds another layer of confusion and complexity for property purchasers and Environmental Professionals to evaluate.