May 2020, Vol. 247, No. 5


CEQ Pro-Pipeline NEPA Changes Generate Heated Attacks


By Stephen Barlas, Contributing Editor

In Washington, on Feb. 22, Christy Goldfuss, former managing director of the White House Council on Environmental Quality (CEQ) under President Obama, stepped to the microphone during a public hearing and attempted to drive a rhetorical stake through the heart of the U.S. interstate pipeline industry.

She assailed the Trump CEQ for proposing reforms to the National Environmental Policy Act (NEPA) announced in January and said the CEQ proposed rule “will let fossil fuel companies move forward with pipelines and other major dirty projects without disclosing harmful public health, environmental and climate change impacts. We know what’s driving this – the trade associations, FERC and others who want to lock in fossil fuel development.”

The CEQ proposal includes changes to the wording and timelines in the NEPA – which controls the scope of environmental impact statements (EIS) – in an attempt to modernize the 30-year-old law. Many of those pro-pipeline changes parallel recommendations made last December by the National Petroleum Council whose report was honchoed at the staff level by Amy Shank, Williams Cos. director of Pipeline Safety and Asset Integrity. While some of the changes are significant, they do nothing to cure the current problem of states refusing to grant permits after the FERC completes a final EIS and gives the green light to a project.  

An industry attorney involved in both the NPS report and the Interstate Natural Gas Association of America (INGAA), who did not want to be identified, commented on the CEQ January proposal, “The proposed CEQ regulations incorporated many of the NPC recommendations.” 

Among the significant changes is the elimination of the need of EIS to consider cumulative effects when deciding whether to approve a pipeline, emphasizing that agencies need not consider every available alternative, nor any alternatives outside their jurisdiction, and limiting consideration of environment impacts to only those that are “reasonably foreseeable” and have a close causal relationship to the proposed action. These changes and another having to do with page limits for EIS would help agencies such as FERC keep to a two-year maximum time frame for completing an EIS.

The “reasonably foreseeable” language was greeted by the pipeline industry as the basis for buttressing FERC’s current thinking, that the volume of upstream and downstream greenhouse gas (GHG) emissions shouldn’t normally be considered when evaluating a new interstate pipeline project. 

This has been a controversial issue lately, with FERC discounting GHG emissions despite somewhat confusing federal court dictates on the issue. The CEQ proposal doesn’t discuss GHG emissions specifically, although the agency has published draft guidance of how those emissions should be handled in a NEPA proceeding. 

Cynthia Taub, a partner in Steptoe and Johnson LLP’s DC office, who leads Steptoe’s NEPA permitting practice, said, “The draft GHG guidance provides support for limiting consideration of GHG emissions from federal projects and therefore would provide additional support for the position that FERC’s NEPA review need not include an analysis of upstream/downstream GHGs. “Some parties have urged CEQ to tackle the issue in the final rule so that its interpretation might carry more weight than it would in a guidance document,” Taub added. 

INGAA thinks FERC already has the legal authority to discount GHG emissions when finalizing an EIS. Sandra Snyder, vice president at INGAA, in her comments to the CEQ, argued FERC has no ability categorically to prevent upstream or downstream activities. “CEQ’s proposal recognizes these legal and practical limits when it clarifies that NEPA does not require an agency to analyze an effect it has no ability to prevent or that would occur regardless of the proposed action,” she wrote.

Environmentalists and some state officials strongly oppose the CEQ proposal.

Claiborne Walthall, from the New York Attorney General’s Office, said at the public hearing, “We object to CEQ’s dismantling of NEPA review by narrowing key terms, gutting review of cumulative effects and alternatives, imposing arbitrary time and page limits, discouraging judicial review, and sweeping away decades of guidance, practice and precedent. Under the proposed rule, NEPA reviews will ignore significant effects and increase litigation, delays and uncertainty.” 

Despite strong opposition from some quarters, the CEQ changes would only speed the completion of environmental impact statements prior to a project being green-lighted by FERC, and perhaps reduce the potential barriers to a positive outcome of that EIS. The reforms of NEPA proposed by the CEQ don’t ameliorate what conceivably is a bigger problem: states refusing to approve permits for construction after an EIS is completed and an agency such as FERC approves construction. 

This was an issue with the Duke/Williams Constitution pipeline, which the companies canceled in late February after New York State refused to approve a Clean Water Act permit. The pipeline would have brought shale gas from Pennsylvania to New York. 

A project still on the boards that has been impeded by the state of Oregon is the Jordan Cove LNG Project and the Pacific Connector Gas Pipeline Project, which would travel 229 miles (369 km) in the state after picking up gas from Colorado on existing pipelines. In February, the state of Oregon refused to approve a permit for the project under the federal Coastal Zone Management Act (CZMA). Pembina, the Canadian company building the project, sent a protest to the Department of Commerce whose National Oceanic and Atmospheric Administration administers the CZMA.

PHMSA Allowing Enforcement Flexibility During Coronavirus Pandemic

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is giving enforcement latitude to pipeline operators during the coronavirus (COVID-19) pandemic. That flexibility extends to state pipeline safety program managers, pipeline operators and operators of gas storage and liquefied natural gas facilities. Three specific regulations are targeted for eased enforcement oversight.

The first is requirements that workers doing operation or maintenance activities are either qualified under the operator’s written OQ program or have demonstrated capability to perform assigned functions. The second covers controllers working in control rooms where certain hours-of-service specialized training programs come into play. The third element relaxes pre-employment and random drug testing for workers who perform certain activities known as “covered functions.”

Although PHMSA highlighted those three areas in its guidance, it noted that there may be other regulatory requirements that pose compliance challenges. Pipelines should “document” those issues and communicate promptly with PHMSA about those concerns. 

The agency added: “PHMSA will exercise discretion in its overall enforcement of other parts of the pipeline safety regulations with the intent of providing operators with the flexibility to maintain normal operations while ensuring public safety and protection of the environment.”

For intrastate operators regulated by state authorities, the PHMSA will not object to waivers, special permits, stays of enforcement or similar measures granted by state authorities for noncompliance due to COVID-19 where state regulations are equivalent to the federal regulations.

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