One of the Inflation Reduction Act's (IRA) notable features is the creation of a Greenhouse Gas Reduction Fund (GGRF).  This fund could create a mechanism to quickly disburse up to $27 billion to clean energy technologies, without undergoing the sometimes laborious reviews required by the National Environmental Policy Act (NEPA).  IRA § 60103. 

The GGRF would allow the EPA Administrator to disburse $20 billion to "eligible recipients," which are defined as non-profit green banks that "provide capital, including by leveraging private capital, and other forms of financial assistance for the rapid deployment of low- and zero-emission products, technologies, and services."  Id.  Among these $20 billion, $8 billion would be dedicated to providing financial and technical assistance in low-income and disadvantaged communities.  Id.  Additionally, this provision of the IRA allocates $7 billion for the EPA Administrator to provide to either states, municipalities, tribal governments, or "eligible recipients."  Id.

Because the IRA does not establish a minimum or maximum number of grant recipients—it only mandates that the Administrator make the grants "on a competitive basis"—it is conceivable that all the funds could be disbursed to a single National Green Bank.  This potential model bears several similarities to the $27 billion Clean Energy and Sustainability Accelerator the White House previously announced as part of the American Jobs Plan (AJP), which we have previously covered.  Indeed, the GGRF has been lauded by members of Congress who previously proposed the creation of a National Climate Bank or Clean Energy Accelerator as part of the AJP,^[1] who have noted that the GGRF could be used to launch a National Green Bank.^[2] 

A central bank is only one option.  The Administrator could also fund several regional banks, or provide additional capital to pre-existing green banks in states like Connecticut and New York.^[3] 

Whether central or regional, proponents of the green bank model are optimistic about the model's ability to increase the pace and scale of investment.  For this reason, proponents of the green bank model sometimes refer to the model as an "accelerator" given the ability for these funds, through focused investments, to "accelerate" investment in certain clean energy technologies.  Those champions believe that an investment in a National Green Bank (or several regional green banks) will catalyze additional private spending, and result in a larger proportional increase in the development and deployment of clean energy technologies.  Accordingly, if the initial investments and grants are successful, the green banks may be self-perpetuating and not require additional appropriations from Congress. 

Finally, there is some optimism that this green bank model could result in streamlined funding for certain projects.  Because the EPA administrator would be providing funding directly to the green bank(s)—not to the qualifying emissions-reduction projects—there is no federal government involvement in the administration of loans, grants, or other financial assistance for these projects.  While the initial decision by the administrator to provide financing to a green bank or state, local, or tribal government might itself be subject to some sort of judicial or environmental review, the subsequent disbursement of funds from the green bank would not be a "federal action."  Without "federal action," NEPA's environmental analysis requirement may be inapplicable, accelerating the timeline by which capital could be transferred to certain clean energy projects.  While it is debatable how much NEPA currently slows down environmental permitting, streamlining the permitting process for energy projects is a priority for certain key members of Congress.  Notably, in Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin's (D-WV) joint statement announcing the IRA, the senators explained that they have an agreement with President Biden and Speaker of the House Nancy Pelosi (D-CA) to "pass comprehensive permitting reform legislation before the end of this fiscal year."  This emphasis on speed echoes and underscores the IRA's commitment to rapid decarbonization.

[1] See H.R.806!S.283.

[2] The statement of Senator Chris Van Hollen (D-MD), one of a the GGRF's key proponents, seems to imply that the law is meant to create a National Green Bank.

[3] Senator Van Hollen has previously referred to the success of state-level green banks when discussing his proposed Clean Energy And Sustainability Accelerator.

In voting on the May 20 orders, the Commissioners were split on whether the National Environmental Policy Act ("NEPA") requires further analysis of the climate significance of the greenhouse gas emissions calculated for the pipeline projects.  A majority of Commissioners compromised by merely providing GHG data for information purposes without determining their significance.

As discussed in a prior post to this blog, in March, 2021, FERC approved a pipeline project certificate in an order that considered "the significance of the project's GHG emissions and their potential impact on climate change," and stated that if a project's GHG emission impacts are significant, they "would be considered along with many other factors when determining whether a project is required by the public convenience and necessity."  Two recent orders that discussed GHG emissions, however, noted that "analysis of greenhouse gas emissions is offered for informational purposes only, does not inform any part of this order's holding, and shall not serve as precedent for any future certificate order."

After an extremely tense debate at its open meeting on May 20th, FERC narrowly approved a Northern Natural Gas project in Minnesota (Docket No.CP20-503) as well as a Tuscarora Gas Transmission project in Nevada (Docket Number CP20-486).4-1表决接受James Danly专员修改命令草案动议,以明确FERC在批准两个项目时没有为其温室气体排放法开新例委员会随后表决3-2批准证书Chairman Glick and Commissioner Clements dissented in part on the grounds that the Commission should have issued an environmental impact statement ("EIS") to determine the significance of the emissions from these projects and the impact on climate change and thus FERC did not satisfy its duty under the National Environmental Policy Act ("NEPA").  They added that finding a project's GHG emissions to be significant is not a "death knell" for that project and FERC may very well conclude that the project's benefits outweigh even significant adverse impacts and may also order mitigation of adverse impacts.

In the May 20 Northern Natural order, the Commission did provide information concerning the projected downstream emissions from the projects and also compared them to the projected emissions in the United States, but issued an Environmental Assessment ("EA") instead of an EIS.发货公司全部为本地配送公司,北方发现工业和住宅用能源需求增长。EA估计项目运营产生的最大潜在温室气体排放量为每年42,814公吨二氧化碳当量(CO2e)。 FERC发现该项目的servations c 后续年份中项目运毒量和下游燃气量可能增加0.016%.s/sites/defails/2021-05/C-3.pdf.>Tuscarora命令 in subsequent years, the project operations and downstream combustion of gas transported by the project could potentially increase emissions by 0.0052%.^[2] The emissions from the project would represent 0.83% and 1.08% of Nevada's 2025 and 2030 GHG inventory goals, respectively.^[3]

Again, both orders noted that the analysis of greenhouse gas emissions is offered for information purposes only, does not inform any part of the order's holding, and shall not serve as precedent for any future order.

[1] FERC found that the annual GHGs from operation of the project, including the downstream combustion of the gas transported by the project, are 925,244 metric tons per year CO2e.  To provide context to the GHG estimate, 5.769 billion metric tons of CO2e were emitted at a national level in 2019 (inclusive of CO2e sources and sinks).  See Northern Natural order at Paragraph 33.

[2] FERC noted that although the national emissions reduction targets expressed in the EPA's Clean  Power Plan were repealed, EPA, Repeal of the Clean Power Plan!现有电用生成单元温室气体排放修改排放指南实施规程 84美联储瑞格3252032202019年7月8日巴黎气候协议瑞格7619年1月27日2021年4月21日宣布目标2030年净温室气体排放比2005年水平减少50%至52%。21, 2021), https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/United%20States%20of%20America%20First/United%20States%20NDC%20April%2021%202021%20Final.pdf.  See Tuscarora order at note 47.

[3] Nevada's 2005 CO2 emissions were 50.1 million metric tons.  U.S.能源信息管理局,能源相关CO2排放数据表 (表1-国元二氧化碳逐年排放,未调整(1990-2018年),/s/www.eia.gov/envice/emissions/state/见第29段Toscarora命令

The Department of Energy proposes to no longer subject LNG exports to evaluation under the National Environmental Policy Act (NEPA).  According to a recent Notice of Proposed Rulemaking (NOPR), DOE says that the only source of potential environmental impacts within its authority to review are those associated with transporting natural gas by ship, and those shipments qualify for categorical exclusion from NEPA review.

DOE's proposal is likely to be controversial and if adopted may be subject to litigation.  This proposed change in DOE policy will be of interest to proposed LNG export projects that are now seeking or will seek such authorizations from DOE and their counterparties in gas sales contracts.

Background

Under section 3 of the Natural Gas Act (NGA), DOE authorizes exports of natural gas and LNG unless found to not be consistent with the public interest.  Exports to countries with which the United States has a free trade agreement (FTA) are deemed in the public interest by the NGA and must be authorized "without modification or delay."  However, for exports to countries without an FTA (non-FTA countries), DOE conducts an informal adjudication, including an evaluation under NEPA and authorizes a proposed export unless it is shown to not be consistent with the public interest.  The adjudications for non-FTA authorizations can be contentious, especially with respect to the potential increase in greenhouse gas (GHG) emissions caused by the combustion of the exported gas in the destination countries.

DOE does not authorize facilities associated with the export of natural gas.  The Federal Energy Regulatory Commission (FERC) authorizes the terminals from which LNG is exported as well as the pipelines that feed natural gas to the export terminals.  FERC undertakes NEPA reviews with respect to those facility authorizations.

Proposal

The NOPR is directed at reforming DOE's NEPA regulations so that they are consistent with the agency's authority and practices.  DOE proposes to revise its regulations consistent with the legal principle that potential environmental effects considered under NEPA do not include effects that the agency has no authority to prevent because they would not have a sufficiently close causal connection to the proposed action.[1]  Because DOE's authority is limited to exports of natural gas, DOE says it will focus exclusively on NEPA review of potential environmental impacts resulting from actions occurring at or after the point of export, which DOE has construed in past adjudications as occurring when the LNG is delivered to the flange of the LNG export vessel.

According to the NOPR, the only source of potential environmental impacts associated with DOE's decision authorizing exports are any "associated transportation of natural gas by marine vessel," which DOE has previously determined does not pose the potential for significant environmental impacts.Accordingly, DOE proposes to include such transportation within the scope of a categorical exclusion from NEPA review in its regulations.

With respect to the potential for GHG increased emissions, the NOPR says that "the regasification and ultimate burning of LNG in foreign countries are beyond the scope of DOE's NEPA review."  DOE says that two reports that it commissioned in 2014 and 2018 to calculate the life cycle greenhouse gas (GHG) emissions for LNG exported from the United States were used to support its public interest determination regarding a proposed export and were not part of DOE's NEPA     review.[2]

Comments on the proposal are due June 1, 2020.  Documents supporting the NOPR and comments received are available here.

[1] The NOPR cites Dep't of Transp.vunem/Pub公有性 541U.S.752(2004)SierraClub vFed能源规管通信 827F.3d36Cir市2016年)

Earlier this week, President Trump released the outline of his infrastructure plan, which includes over three dozen proposals intended to reduce delay, inefficiency and redundancy in the project permitting process.  The plan contemplates amendments to major federal environmental statutes, including the National Environmental Policy Act, the Clean Air Act, and the Clean Water Act.

The chief goal of the proposed reforms—highlighted in both the President's recent State of the Union Address and an earlier Executive Order—is to streamline the permitting process so that federal agencies approve projects in two years or less.  The plan establishes a "firm deadline" for lead agencies to complete environmental reviews and issue a Record of Decision (ROD) under NEPA within 21 months, and requires them (or a state agency acting pursuant to delegated authority) to issue or deny any necessary permits within 3 months thereafter.

The plan lacks detail regarding just how such a deadline would be enforced, stating only that "appropriate enforcement mechanisms" would be established.  What these might be appears to be in flux:  an earlier draft plan, made public about two weeks before the President's official release, outlined a review process by the Federal Permitting Improvement Steering Council for agencies that missed deadlines.  This process was omitted from the final product.

The guiding principle underlying many of the proposed reforms is eliminating overlapping agency authority and duplicative review in the permitting and review process.  For example, the plan establishes a "One Agency, One Decision" environmental review structure, and requires a single environmental review document and ROD to be signed by all involved agencies.  Agencies would be directed to focus only on their areas of "special expertise," and would be permitted to rely on the determinations of other agencies that certain projects are categorically exempt from environmental review, instead of having to conduct their own independent assessment.  As another example, the authority to issue dredge and fill permits under section 404 of the Clean Water Act would be consolidated in the U.S.Army Corps of Engineers.  The Corps would gain final authority to construe the jurisdictional terms "navigable waters"/"waters of the U.S." under section 404 of the Act—authority that currently rests with EPA, though both agencies currently exercise it pursuant to a Memorandum of Agreement—and EPA would lose its current ability to veto a 404 permit.

The plan also contains a number of other provisions intended to speed the infrastructure permitting process, including calling for procedures to expedite review for projects likely to result in positive environmental impacts, and limiting the availability of injunctive relief to stop projects that have already been approved pending a court challenge.  The plan also requests that two pilot programs be established which would exempt projects wholesale from environmental review in lieu of performance-based review or negotiated environmental mitigation.

Several of the proposed changes, including the idea of setting deadlines for agency action, draw from the report Two Years, Not Ten Years: Redesigning Infrastructure Approvals, issued by the nonpartisan reform organization Common Good.  Philip K.hrefs/www.cov.com/en/donald Elliott 和Gary Guzy 、EPA前总顾问和公司环境实践集团成员都提供无偿法律咨询 //www.ludikid.com/2015/05/focus-on-infrastructure/ 凯特琳·麦克卢尔 2015年5月15日Frii NEPA系统 基础设施 //www.ludikid.com/?p=1839 p对齐='中心'###/p>基础设施周正在华府和全国各地展开,凸显投资美国老化基础设施并使其现代化的重要性。重点是基础设施在我国经济中起关键作用Covington & Burling与PhoneGood、双党政策中心以及全国制造商协会共同主办活动Continue Reading… p对齐表示'Center''s/p>forceum week正在华府和全美展开,强调投资美国老化基础设施并实现现代化的重要性。重点是基础设施在经济中起关键作用。

Covington和Burling与Good公司、双党政策中心及国家制造商协会联合主办活动周二集专家讨论基础设施审批过程,并讨论如何改善或改革当前系统以提高效率半天论坛展示新视角并对话为何需要大修推动经济并改进环境结果可并发,但当前架构和监管屏障可防止范式变换论坛还包括介绍其他国家的最佳做法和合并决策标志和及早审议环境影响所创造的机会PhilipHoward,Covington和Burling公共良好和伙伴周二召集活动,确认“没有人设计我们现在拥有的系统-它刚刚壮大 ” 。 论坛的目标是探索大胆建议简化、加速和改善基础设施审批过程美国想从新基础建设项目中获取所有利益 — — 增强竞争力、数以百万计的工作和绿化环境足迹。

基础设施审批系统与其他国家相对照 。Nick Malyshev是OECD监管政策司司长,观察美国拥有强大的系统制定法律法规,我们可以做更好的工作评价现有法规。他和其他小组成员Parsons Brinckerhoff和Shawn DensstettOsler,Hoskin & Harcourt(Canada)讨论了加拿大、澳大利亚和许多欧盟国家如何在监管框架和审批流程方面比美国先光年。Denstedt discussed how Canada in particular revamped its environmental review process in 2012 to make it more consistent and timely and the outcomes more predictable.  All of the panelists remarked on how the convoluted approval process, not necessarily the substance of projects, is dragging down the infrastructure system here in the United States, and how there must be better coordination between federal and state entities to reduce overlap and inconsistencies.

A second panel discussed the environmental review process and the devolution of the National Environmental Policy Act (NEPA).  While the original intent of the act was to balance interests and understand the consequences of different choices in infrastructure projects, panelists remarked on how the process has become cumbersome, with overlapping oversight authority and review processes that have resulted in delays, escalation of costs, and an overall burden on the American economy.  Attendees were reminded that the law was only 7 pages when enacted in 1970!several panelists commented that it is time to go back to the law's original intent.  There was also a consensus among panelists that there needs to be more of an evidence-based discussion around environmental review.  There is little analytical data on NEPA policy, but a better model could exist that is based on metrics and outcomes that can better inform decisions.  Covington & Burling's Don Elliott discussed the judicial review process under NEPA, which he said has become a process for stopping projects, rather than facilitating how a project gets done.  One fix he noted was for preliminary injunctions to be done away with and for CEQ to issue guidelines for judicial standing.

The final panel discussed the challenges and bright spots in the current permitting process.  Joann Papageorgis of the Port Authority of New York and New Jersey discussed the Bayonne Bridge navigational clearance project as an example of how complicated the review process can be and how inefficiencies can be solved.  This project in particular required approximately 50 permits from 20 different agencies.  They found the complicated regulatory review contained multiple duplicative regulatory processes and conflicting federal requirements.  She outlined several strategies and recommendations based on the experience of this project, many of which were echoed by the other panelists, including how important it is to enforce early coordination and synchronization between agencies, and to work on a schedule.  Shoshanna Lew from DOT agreed there is no reason certain processes cannot happen simultaneously, and multiple agencies could participate as part of the same review, rather than duplicating it multiple times.

There was broad consensus across these three panels and participants that all parties should work toward permanent solutions that increase efficiencies, improve outcomes, and balance interests to advance our infrastructure systems and meet the current and future demands of our country.