Last week, Congress enacted, and the President signed into law, a major new piece of legislation that will impose significant new legal requirements on how federal agencies complete their environmental reviews and permitting of renewable energy projects, transmission lines, pipelines and other major infrastructure projects. The law became effective on Friday, December 4th.
Did you miss it? I’m guessing, yes. Here’s why: Congress quietly inserted new, stand-alone statutory permitting requirements for infrastructure projects into the FAST (“Fixing America’s Surface Transportation”) Act, its $305 billion transportation bill. Title I of the bill includes the type of transportation-specific permitting tweaks that we have come to expect in transportation bills, but the real surprise is found in Division D of the legislation, which includes Title XLI, entitled: “Federal Permitting Improvement.” The permitting changes included in Title XLI extend far beyond highway projects and cover “construction of infrastructure of renewable or conventional energy production, electricity transmission, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines, [and] manufacturing.”
Because these legal requirements will govern the nature and timing of major new renewable and conventional energy projects that require federal environmental reviews and approvals, they demand our attention. As applied, the new permitting requirements could have a profound impact on whether the U.S. is able to successfully develop, in an environmentally sound way, the type of new energy projects needed to meet its climate change commitments. Focusing on the “how” piece of bringing major new clean energy projects on line does not attract the klieg lights, but it is an essential element in our pivot toward a clean energy economy.
Converting Voluntary Administrative Permitting Reforms into Legal Requirements
Fortunately, the new environmental review and permitting requirements have some grounding in experience. The new law adopts several of the innovative approaches that the Obama Administration has employed to improve the timing and quality of environmental reviews and multi-agency permitting processes and converts them into legally-enforcement requirements, adding some new twists along the way. The next section reviews the reform efforts upon which many of the new requirements are based; it is followed by a high-level review of some of the new law’s specific requirements.
Administrative Permitting Reforms
The Administration’s permitting reform efforts began in earnest at the Interior Department, where Secretarial Order 3285A1 established a new interagency approach to facilitate permitting decisions and improve environmental results for the siting and development of renewable energy projects on public lands. The combination of promoting early collaboration and outreach among all affected bureaus, key stakeholders and project proponents; schedule-based management accountability and oversight; and adequate resources, produced dramatic results. Solar and wind energy permit processing was reduced from an average of four years to one and a half years, leading to the permitting of several dozen major utility-scale renewable energy projects and enabling the Interior to meet the 2005 Environmental Policy Act’s goal of siting 10,000 megawatts of renewable energy on the public lands three years ahead of schedule.
Keying off of Interior’s success, President Obama issued Executive Order 13604 on March 22, 2012, entitled “Improving Performance of Federal Permitting and Review of Infrastructure Projects.” The Executive Order emphasized that federal agencies should provide a “transparent, consistent and predictable [permitting] path for both project sponsors and affected communities.” It established a high-level “Steering Committee on Federal Infrastructure Permitting and Review Process Improvement.” It called on the Steering Committee to define best practices, including the use of timetables and schedules to complete reviews, early collaboration among agencies, project sponsors and affected stakeholders to minimize delays, and the establishment of an on-line Dashboard that would add transparency and accountability for permitting processes.
Following issuance of the Executive Order, the White House developed a “Federal Plan for Modernizing the Federal Permitting and Review Process for Better Projects, Improved Environmental and Community Outcomes, and Quicker Decisions,” followed by an Implementation Plan that the Steering Committee issued in May 2014.
Much of the focus of the White House-led effort has been on identifying best permitting practices and using on-line tools, including the Dashboard, to facilitate more timely and transparent permitting practices. Most recently, in September of this year, it issued new guidance requiring agencies to designate a Senior Accountable Official to oversee implementation of permitting reforms.
New Legal Requirements Raise the Stakes
While the Administration’s permitting reform efforts have been commendable and have, in some cases, materially improved the timing and substance of federal environmental reviews and permitting decisions, they have not been uniformly adopted within the federal bureaucracy. Some key Departments, such as Interior and Transportation, have had strong, high-level advocates pushing for reforms, but most environmental reviews and permits are processed in the field, far removed from Washington. It is for this reason that many commentators, including this author (see http://www.eli.org/sites/default/files/docs/elrjan.pdf), have expressed concern that the Administration’s permitting reforms would not stick unless they were institutionalized through statutory or regulatory action.
In one fell swoop, Congress addressed these institutional concerns last week by codifying a permitting reform agenda into law. Now the question is whether the specific new requirements included in the Federal Permitting Improvement title will, in fact, yield both quicker and better results.
Fortunately, while the new requirements were largely modeled on the Administration’s common sense permitting reform agenda, there was some deliberative review of the proposed legislation before it unexpectedly was dropped into the transportation bill. Specifically, Senators Portman and McCaskill had developed S. 280, the “Federal Permitting Improvement Act of 2015,” and had secured a favorable report-out of the bill earlier this year from the Senate Committee on Homeland Security and Governmental Affairs. S. 280’s language was adopted, virtually wholesale, in Title XLI of the transportation bill.
Key new requirements laid out in the new legislation will have broad applicability to “covered projects” that “require authorization or environmental review by a Federal agency involving construction of infrastructure for renewable or conventional energy production, electricity transmission, surface transportation, aviation, ports and waterways, water resource projects, broadband, pipelines [and] manufacturing,” when such projects are subject to NEPA and are likely to required a total investment of more than $200 million. The law places a number of new, permitting-related legal obligations on federal agencies, including:
New, Government-Wide Permitting Authority with Responsibilities to Define Best Practices and “Performance Schedule” Timelines
- A “Federal Permitting Improvement Council” will be formed, Chaired by a President-appointed Executive Director, and including Deputy Secretary-level representatives of key cabinet agencies.
- Each agency is required to appoint a “Chief Environmental Review and Permitting Officer” or “CERPO.” CERPOs are responsible for overseeing implementation of new review and permitting requirements within their agencies, and supporting the Federal Permitting Improvement Council. CERPOs are expected to “standardize, simplify, and improve” the efficiency of processes, policies and authorities applied to environmental reviews and permits, through the use of guidance, best practices, information technology and geographic information system tools.
- Within 1 year, the Council must develop and issue recommended best practices covering a variety of review and permitting activities including early stakeholder engagement, performance metrics, improved coordination between federal and non-federal governmental entities, increased transparency, reduced information collection requirements, use of geographic information systems and tools, training materials, and the like.
- Within 1 year, the Council must develop recommended “Performance Schedules,” including intermediate and final completion dates, for environmental reviews “most commonly required for each category of covered projects,” based on data from “the most efficient applicable processes” gathered over the previous two years.
Inventory of Covered Projects, Posted on a Publicly-Available Dashboard
- Within 6 months, an Inventory of covered projects must be identified and posted on a web-accessible “Permitting Dashboard.” The purpose of the Dashboard is to “track the status of federal environmental reviews and authorizations for any covered project in the Inventory.”
- Within 14 days after new projects are added to the Inventory, an entry about the new project must be added to the Dashboard. The Dashboard must display the “Permitting Timetable” established for the project (see below) and the status of compliance of each agency with the permitting timetable. Entries must include hyperlinks to websites established for each project that include application and supporting documents, information about how the public can obtain access to documents, and other relevant information.
Environmental Review & Permitting Timeline Requirements
- Within 60 days of project posting on the Dashboard, the lead agency must establish, in consultation with other agencies, a Coordinated Project Plan for coordinating public and agency participation in, and completion of, any required Federal environmental review and authorization for the project.
- The Coordinated Project Plan must include a Permitting Timetable – a “comprehensive schedule of dates by which all environmental reviews and authorizations, and to the maximum extent practicable, State permits, reviews and approvals must be made.” The Permitting Timetable “shall follow” the Performance Schedules established by the government-wide Federal Permitting Improvement Council. Any variances from Performance Schedules need to be justified and are subject to dispute resolution.
- Once set, agencies must conform to the Permitting Timetable on the Dashboard. Failure to conform to the Permitting Timetable can lead to a requirement to inform Congress.
- Performance Schedules must require that all environmental reviews and authorizations will be completed within 180 days after the relevant agencies have all the information needed to make a final decision.
Agency Coordination Responsibilities
- Within 45 days of being identified as a covered project, the lead agency must identify on the Dashboard all federal and non-federal agencies likely to have financing, environmental review, authorization, or other responsibilities, and invite all federal agencies to become a participating or cooperating agency in the review and authorization management process.
- Federal agencies are not allowed to opt out of participation in the process unless they can show that they have no jurisdiction or authority with respect to the proposed project and will not be involved in the project.
- The Coordinated Project Plan posted on the Dashboard must disclose and explain each agency’s review and permitting responsibilities.
- Within 60 days of a sponsor’s request, agencies must meet with the sponsor to discuss the project and the review and permitting process.
- Agencies “shall, to the maximum extent possible” carry out their obligations concurrently, and in conjunction with other environmental reviews and authorizations. Cooperating agencies are required to identify issues of concern “as early as practicable.”
NEPA-related Issues; Judicial Review Limitations
- The lead agency is required to make relevant information available to each cooperating and participating agency and project sponsor as early as practicable in the environmental review project, and is tasked with working cooperatively with other agencies “to identify and resolve issues that could delay completion of an environmental review of an authorization required for the project.”
- The lead agency is responsible for developing a range of alternatives for environmental reviews that encompass the interests of all reviewing agencies.
- Preferred alternatives can be developed to a higher level of detail than other alternatives to facilitate the development of mitigation measures or concurrent compliance with other applicable laws.
- The comment period for draft environmental impact statements is presumptively 30 days in length, with a possible extension to 45 days, absent extraordinary circumstances.
- Judicial review must be initiated within 2 years of a final Record of Decision. NEPA-based reviews can only be pursued by parties that file detailed comments that put the agency on notice of the issue that it wishes to appeal.
Title XVI’s new “Federal Permitting Improvement” requirements represent a bold experiment to codify into law the type of detailed environmental review and permitting procedures that are more commonly fleshed out through administrative rulemaking proceedings. Agencies will surely find compliance with several of the new statutory responsibilities to be difficult to achieve. The slavish focus on meeting deadlines, for example, will prove challenging, particularly because unanticipated complications frequently arise in permitting contexts, such as delays in getting needed information, legitimate project sponsor or stakeholder-based needs for more time, and other factors beyond agencies’ control. It also will be challenging to sync up the timing of multiple agencies’ reviews of complex projects, on a strict and well-defined schedule, given competing priorities and budgets.
The FAST Act’s general permitting requirements also miss an opportunity to emphasize how programmatic environmental reviews can assist project-based permitting, as exhibited by the Interior Department’s successful reliance on programmatic development of “solar energy zones” to facilitate more timely solar project approvals. Likewise, while the new law notes that identifying appropriate compensatory mitigation is an important part of the permitting process, it fails to note how regional mitigation planning can facilitate the identification and incorporation of regionally-significant mitigation opportunities in project-level permits. (Interestingly, in the DOT-specific portion of the FAST Act, the Department of Transportation is encouraged “prioritize [the] use of programmatic environmental impact statements” and to give weight to “programmatic mitigation plans,” but similar provisions do not appear in the Act’s general permitting title.) Finally, while the new permitting requirements authorize agencies to promulgate new guidance to assist consolidated permitting efforts, they sidestep the question whether NEPA’s regulations should be updated to confirm lead and cooperating agencies’ new responsibilities when undertaking NEPA-required environmental reviews.
Despite the many implementation questions, if the new requirements are fully embraced by the agencies, they have the potential to regularize and professionalize how multiple agencies work together to complete environmental reviews and permitting processes in a more rational and timely manner, with better environmental results. Given that our nation’s pivot toward a clean energy economy will require major new infrastructure investments that are sited and operated in an environmentally sound way, a lot is riding on the success of this new law.
David J. Hayes is the former Deputy Secretary of the U.S. Department of the Interior. He is a Visiting Lecturer in Law at Stanford University.