Insight

Going Global

Expanding the scope of environmental review for the energy sector.

Environmental Review
JG

Joseph K. Reinhart, Esq. and Meredith Odato Graham, Esq.

October 26, 2017 01:24 PM

Government agencies tasked with reviewing energy projects may take a harder look at anticipated greenhouse gas emissions following recent federal court decisions that call for a broader scope of environmental review. In a 2–1 ruling issued August 22, 2017, a panel of the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) vacated a decision by the Federal Energy Regulatory Commission (FERC) to approve a major interstate pipeline project, holding that FERC failed to adequately consider the greenhouse gas emissions that will result from burning the natural gas in downstream power plants. (See Sierra Club v. FERC, D.C. Cir., No. 16-1329.) The D.C. Circuit faulted FERC’s project review under the National Environmental Policy Act of 1969 (NEPA), which requires federal agencies to evaluate the environmental and related socioeconomic impacts of proposed actions prior to making decisions. Although FERC addressed climate change in its NEPA review, the agency declined to engage in what it referred to as “speculative analyses” concerning the “relationship between the proposed project and upstream development or downstream end-use.”

In remanding the case to FERC, the D.C. Circuit held that FERC should have either quantified the downstream greenhouse emissions that will result from burning the natural gas being carried by the pipelines or explained in more detail why it could not be done.

Without estimating and quantifying the project’s greenhouse gas emissions and comparing them to regional emission reduction goals; for example, the D.C. Circuit said it would be impossible for FERC and the public to engage in the kind of meaningful review required by NEPA.

A recent decision in the mining context signals that climate change concerns are complicating more than just the pipeline projects. On August 14, 2017, a Montana federal judge ruled that the U.S. Office of Surface Mining (OSM) unreasonably limited the scope of its NEPA review in support of a coal mine expansion project, because OSM failed to sufficiently evaluate the indirect and cumulative effects of coal transportation, coal combustion, and greenhouse gas emissions. (See Montana Elders for a Livable Tomorrow v. OSM, D. Mont., No. 9:15-cv-00106.)

These cases and others like them present a challenging question for energy sector projects: to what extent should climate change be incorporated into environmental reviews? Climate change is a hotly debated topic with global reach and long-term consequences. How far in time and space may or must an agency go when evaluating greenhouse gas emissions? At what point will the inquiry end?

Another key question is: what metric should reviewing agencies use to measure climate impacts? In March of this year, President Donald J. Trump signed an executive order entitled, “Promoting Energy Independence and Economic Growth,” which (among other things) withdrew the Social Cost of Carbon tool used to measure the harm of emissions in dollar amounts. It was deemed “no longer representative of governmental policy.” The executive order likewise disbanded the interagency working group that developed the tool.

A lack of consensus regarding the appropriate standard for agency review creates uncertainty for the energy industry. It also puts permitting agencies in the difficult position of having to develop an administrative record that can withstand judicial scrutiny, a job that can entail multiple years of data collection, consultation, and assessment. Courts are left with significant discretion to decide whether an agency’s environmental review missed the mark. Meanwhile, public interest groups like Sierra Club are increasingly active in challenging permitting decisions based upon greenhouse gas implications of fossil fuel development

Many environmental permitting decisions implicate both federal and state agencies. For example, an energy project that will impact water bodies in Pennsylvania may trigger joint review by the Pennsylvania Department of Environmental Protection and the U.S. Army Corps of Engineers. If climate change is a project risk that must be studied exhaustively, which agency will decide when enough is enough? Given the many uncertainties and variables associated with evaluating the potential impact of greenhouse gas emissions on climate change, energy companies are likely to face daunting challenges in preparing permit applications if reviewing courts continue to apply the standards articulated in the Sierra Club and Montana Elders decisions.

--------------------------

Joseph K. Reinhart is a shareholder and co-chairman of the energy and natural resources group of Babst Calland. Mr. Reinhart has more than 30 years of experience with environmental law. He has represented industrial and commercial clients in many complex permitting and enforcement matters under federal and state laws; in particular, those that concern oil and gas well development, Marcellus Shale, coal bed methane, coal mining, and non-coal mining.

Meredith Odato Graham is an associate in the environmental and energy and natural resources groups of Babst Calland. She assists clients with a variety of environmental matters and focuses her practice on federal, state, and local regulatory and permitting issues arising under the Clean Air Act.

Related Articles

2020 Vision


by Sean Devlin

What Does Corporate Environmental Concern Look Like in 2020?

Best Lawyers Ones to Watch Canada Legal Insights

Paris Agreement on Climate Change: Overview and Update


by Beatriz Paulo de Frontin and Márcio Pereira

An overview of the Paris Climate Agreement.

Paris Agreement Climate Change

U.S. Withdrawal from the Paris Agreement


by Violaine du Pontavice

What will be the future for the world’s climate issue?

U.S. Withdrawal Paris Agreement

ESG Changing Texas’ Legal Landscape


by Gregory Sirico

Best Lawyers breaks down the growing industry trend of ESG standards and how its altering the field of law in the state of Texas.

Texas’ Ever Changing Legal Landscape

A Climate Duty


by Lara Douvartzidis and Samantha Daly

Converging trends in Australia and the Netherlands: reasonable foreseeability in climate change law and other novel developments.

Climate Change Law in Australia

Great Rebuild


by Best Lawyers

Néstor Méndez discusses labor peace, junk-bond repercussions, and the laudable resilience of those who call this storm-battered island home.

An Interview With Pietrantoni Méndez & Alvare

Turning Down the Heat


by Janice Zhou

What sort of legal and legislative action is necessary to help put Pennsylvania on the front lines of the battle against climate change?

Depleting Natural Resources in Pennsylvania

Easy Being Green


by Best Lawyers

Markus Deutsch discusses the impact of climate change on the firm and its clients.

An Interview With Dolde Mayen & Partner

Impact of Climate Change on Real Estate Law


by Best Lawyers

Dr. Christian Schede discusses rent in large cities, the effect of Airbnb, and more.

An Interview With Greenberg Traurig

The Generals’ Next War


by Alison Torbitt and Gayatri Joshi

Businesses’ Sense of Corporate Social Responsibility Is Increasingly Driving Long-Term Growth. Here’s How General Counsel Can Best Confront CSR’s Numerous Challenges and Opportunities.

The Generals’ Next War

Hotter and More Intense


by Lori Tripoli

Multiple Category 5 hurricanes. Drought. Wildfires. Climate change isn’t just damaging the environment and our health. It’s impacting the bottom line.

Climate Change

A Better Bottom Line


by Margaret Pierce

How Benefit Corporations are leading the charge to save the world.

A Better Bottom Line

Trending Articles

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

Announcing the 2022 Best Lawyers in Canada™


by Best Lawyers

The results include an elite field of top lawyers listed in the 16th Edition of The Best Lawyers in Canada™ and 1st Edition of Best Lawyers: Ones to Watch in Canada.

Announcing the 2022 Best Lawyers in Canada™

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

Best Lawyers: Ones to Watch in Canada 2023


by Best Lawyers

The year 2023 marks the second edition of Best Lawyers: Ones to Watch in Canada, highlighting professionals earlier in their legal careers all across Canada.

Blue background with white stairs formed out of lines

All Eyes to the Ones on the Rise


by Rebecca Blackwell

Our 2023 honorees recognized in Best Lawyers: Ones to Watch™ in America tell us more about how their path to law formed, what lead them to their practice areas and how they keep steadfast in their passion to serve others.

Person walking between glass walls towards window

The Real Camille: An Interview with Johnny Depp’s Lawyer Camille Vasquez


by Rebecca Blackwell

Camille Vasquez, a young lawyer at Brown Rudnick, sat down with Best Lawyers CEO Phillip Greer to talk about her distinguished career, recently being named partner and what comes next for her.

Camille Vasquez in office

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Announcing the 2022 "Best Law Firms" Rankings


by Best Lawyers

The 2022 “Best Law Firms” publication includes all “Law Firm of the Year” recipients, national and metro Tier 1 ranked firms and editorial from thought leaders in the legal industry.

The 2022 Best Law Firms Awards

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Press and Publicity: How Television and Social Media Impact Legal Careers


by Justin Smulison

In recent years, with social media giving minute by minute reporting, many lawyers are finding themselves thrust into a spotlight they never planned for. How are lawyers grappling with unexpected stardom, media coverage and merciless influencers?

Close up of camera at news station