We’ll Always Have Paris

32111053371_3660e14ee1_bCertainly nothing in President Trump’s Rose Garden announcement that the United States will withdraw from the Paris climate agreement resembled that bittersweet moment between Rick and Ilsa in Casablanca.  Despite the momentous decision, however, it remains likely that the citizens of this country and around the world “will always have Paris.”

This is not some myopic conclusion or reflection on whether the Paris accord was a good or bad deal for this country.  (By the way, the odds of 190 countries agreeing to renegotiate on Mr. Trump’s terms are about as good as those of the New York Jets again winning the Super Bowl in my lifetime.)  Rather, this view takes into account that the marketplace has long ago embraced the issues associated with climate change and efforts to reduce carbon emissions.

Don’t take my word for it – just two days before the President’s announcement, 62 percent of ExxonMobil’s shareholders voted to require the company to report on the impacts of climate change to its business.  In other words, investors want the company to assess the risk to its bottom line as countries around the world reduce fossil fuel use to live up to goals established in the Paris Agreement.  Similar shareholder resolutions obtained near-majority support in other major industry sectors.

More proof: Renewable energy continues to become more economical, even as government-supported subsidies are phased out around the globe.  A report from the World Economic Forum at the end of last year indicated that renewables, especially wind and solar, have achieved economic competitiveness and reached what it termed “grid parity.”  According to one of the report’s co-authors, renewable energy “is not only a commercially viable option, but an outright compelling investment opportunity with long-term, stable, inflation-protected returns.”  If those trends continue, Wall Street, not Pennsylvania Avenue, will likely dictate the future of the international energy mix.  If he were alive today, John D. Rockefeller might not like that prognosis, but he might very well admire how the market continues to have the power to influence basic human behavior.

Market influence goes beyond the valuation of various companies’ financial risk or individual or institutional investment decisions.  It also impacts consumer choice, ranging from electric/hybrid or zero-emission vehicles over traditional gas-combustion engines to housing preferences that tend to reduce reliance on automobile travel.  Even the rapidly evolving autonomous vehicle industry has the potential side benefit of reduced greenhouse gas emissions.  Drivers may not appreciate how greater use of currently available technology such as GPS guidance or sensors that detect available parking spots can dramatically reduce emissions.  But there is no doubt that progress to more advanced vehicle automation is unstoppable.  Once again, the market has spoken, and Fortune 100 companies in the technology and automobile sectors have listened.

Perhaps as influential as financial markets is the marketplace of ideas.  These take years to shift, but in the context of concern over climate change, attitudes have rapidly changed.  The movement in public opinion can be witnessed on a global scale.  Australians express fear over the future health of their cherished Great Barrier Reef.  Pacific islanders who exercised influence far out of proportion to their populations or economies spurred the international movement toward the Paris Agreement out of a genuine concern over losing their homeland.  African nations, having long suffered from the political and social upheaval arising from drought on that continent, rightly worry over even greater conflicts as a result of potentially more severe droughts.  The United States’ withdrawal will not and cannot change any of that.  If anything, it might have the opposite effect of further bolstering other nations’ commitment to the goals established in the Paris Agreement.

When Rick urged Ilsa to hold on to the memory of their brief but enduring love affair, he knew that their relationship was not to be.  For the 194 other signatory countries left to ponder the repercussions of President Trump’s decision, however, they may look to another famous line from Casablanca:  “I think this is the beginning of a beautiful friendship.”

 

The Litigation Flight of the Bumblebee

This post follows up on our previous analysis of the Illinois highway project that had been enjoined as a result of allegations that the project proponent may not have adequately assessed potential impacts on the recently listed rusty patched bumblebee, which has habitat in the project area.

At the time of our first post, we predicted that the temporary restraining order that halted project construction could be short-lived. The government had proffered several serious procedural defenses against the plaintiffs’ ESA claims surrounding impact to the bumblebee. The court scheduled an expedited hearing on a preliminary injunction to allow the parties to present arguments on those defenses, as well as any additional substantive evidence regarding alleged harm to the species.

At the appointed date, the parties and their counsel appeared for argument – with one major exception. The plaintiffs’ expert, who had submitted a declaration in support of the proposition that the highway would have an adverse impact on the bumblebee, failed to show up. That’s right. Didn’t show up. In light of the government’s inability to cross-examine plaintiffs’ key witness at the PI hearing, and rejecting the testimony of another citizen lacking bee expertise, the court dissolved the injunction.

While the project is back on track and the Illinois injunction motions practice over the bumblebee has been resolved, this incident proves the old saying attributed to Woody Allen: “80 percent of success is showing up.”

When Does $1,000,000,000,000 ≠ $1,000,000,000,000?

White_House_DC

The long-anticipated Trump infrastructure plan is almost ready, but the preview of that plan as reflected in the administration’s proposed FY 2018 budget has already prompted strong reactions.  Two things are clear: the promised $1 trillion dollar investment in infrastructure may be illusory, at best, and the plan’s outline represents a fundamental shift in the federal government’s role in planning and developing infrastructure.

The President’s closest infrastructure advisors have deep background and expertise with public-private partnerships (P3), the most traditional vehicle for inserting private assets into public facilities.  These same advisors also likely harbor the frustration felt by many in the infrastructure sector that the U.S. has lagged behind other developed nations in the use of P3s to finance infrastructure development.

It is no surprise then that the proposed budget contains a line item of $200 billion over the next decade to incentivize private and state spending.  At the same time, it cuts $96 billion from the Highway Trust Fund over 10 years, almost $1 billion from the FTA’s capital transit program in the next year alone, and (as predicted) slashes $500 million for the locally based TIGER grant program.

The administration argues that the $200 billion in federal spending will encourage additional private and state-level investments, which would add up over time to the overall goal of $1 trillion.  While there is little disagreement that P3 activity in the U.S. is a fraction of what it could be, history suggests that the investment seed proposed by the administration may not grow the magical infrastructure beanstalk.

According to the Harvard Kennedy School of Government, from 2005 to 2014, a total of 40 P3 transactions were completed (covering roads, airports, ports, parking, water utilities, and others), with a value of $39 billion.  Not bad, but this represents a fraction of the total federal investment in public facilities, and is less than one full year of just the average annual highway spending during that time frame.  As my former USDOT colleagues have said repeatedly, P3 can be an effective tool in our country’s infrastructure spending toolbox, but it is only one tool.

Could the proposed bolstering of already successful federal loan programs like TIFIA and financing instruments like Private Activity Bonds create greater private investment activity?  Absolutely.  Will it create a level of investment equivalent to the $1 trillion talking point?  Highly doubtful.

Even with the welcome additional line item for federal loan programs, the proposed budget’s greater significance perhaps lies in the how the spending plan reflects a seismic shift in the federal government’s role in building infrastructure.  The administration asserts that federal rules, mostly in the environmental arena, bog down important projects in red tape and permitting delays.  Readers of this blog know that I have advocated consistently for reforms in how agencies assess and permit major projects.  Yet, blaming the country’s woeful recent record in infrastructure investment on environmental requirements is somewhat misleading.

The administration famously rolled out a complex flowchart of how a typical highway project gets permitted, and the chart quickly went viral.  For those of us who have spent a career in the infrastructure arena, it was worth a good chuckle.  But even those involved with this effort would likely admit that the graphic bears little resemblance to the permitting of a typical highway project.

John Porcari, the former U.S. DOT Deputy Secretary, recently testified before the Senate Environment and Public Works Committee.  He explained what has been understood for a long time: that only 4 percent of all transportation projects require a full environmental impact statement.  Almost 90 percent of all projects are approved with the simplest and quickest NEPA approval, a categorical exclusion.  Mr. Porcari also detailed the many reforms already in place through recent authorization bills that have successfully streamlined environmental reviews, and other best practices that have led to tremendous successes on projects of regional and national significance.  More could be done, he said, but let’s not shift focus away from the more common causes of delay, growing out of local project-specific factors (political and otherwise) which understandably arise during complex project development.

Congress and the administration will soon engage in a heated political philosophical debate in the context of the upcoming budget battle, as well as negotiations over expected infrastructure legislation.  Questions on the table include the following:

  • What is the most appropriate role of the federal government in infrastructure development?
  • Is public financing democratic (little d) when it is implemented through a gas tax or a vehicle mile charge, or does a reliance on federal financing promote unacceptable inefficiencies?
  • How much incentivizing is necessary to unlock greater private or state investment, or is it too uncertain to rely on state governments to choose to spend more on infrastructure?
  • Can government make environmental streamlining “business as usual,” or are more drastic measures required to reduce the project approval process?

Transportation Secretary Chao is 100 percent correct when she says, “This is a democracy; they’re not easy questions.”  How our current political leaders choose to answer these questions will have ripple effects across America, perhaps for generations to come.

What’s the Buzz? Tell Me What’s A-Happening

When the U.S. Fish & Wildlife Service placed the rusty patched bumblebee on the endangered species list back on March 21, many observers wondered how this action could impact a wide variety of infrastructure development proposals.  Unlike some of the recent controversial species management actions that implicated areas of the American west more accustomed to Endangered Species Act (ESA) issues, the bumblebee’s habitat stretches across over a dozen heavily populated eastern and midwestern states.  Based on litigation challenging a highway project in Illinois, we may have our first answer.

A District Court judge in Illinois granted a temporary restraining order delaying construction of a proposed new 5.6-mile stretch of highway called the Longmeadow Parkway Fox River Bridge Corridor.  The ruling was based, in large part, on a local environmental group’s allegation that the project’s NEPA review did not adequately take into account the presence of the bumblebee on property in the project area.  Emergency relief was warranted to prevent harm to the species, the court ruled, finding that the traditional balance of harms weighed in favor of short-term relief over the planned beginning of construction.

Plaintiffs still face a number of substantial procedural hurdles (did they give the government adequate notice of their claims under the ESA, for example).  As a result, the injunction may not persist long after an April 28 deadline for the plaintiffs to provide additional information to the court and argument on preliminary injunctive relief.  But the very fact that a federal judge was persuaded that the protections afforded the bumblebee as a result of the ESA listing should delay project construction is noteworthy.  Moreover, it is possible that the project proponent could be compelled to make additional engineering modifications and/or to take further mitigation measures to protect the bee.  Any such concessions of course mean additional time and money.

Some of the project opponents’ comments as reported by local media demonstrate precisely the potential for confusion and uncertainty for development interests.  One person suggested:  “There are bumblebees pretty much all over the state of Illinois.  I don’t know if it’s significant to this area.  No one really does, because it has not been studied.”  Another advocate added:  “It’s a little keystone in the ecosystem, that if they go who knows what else is going?”

These fundamental questions, combined with an observed 95 percent decline in the species’ presence across the U.S. and Canada, led to the listing, despite a brief delay by the new administration in taking that final action.  Native pollinators contribute to the growth of many important and popular crops, but have been adversely impacted by modern farming trends, urban sprawl, and possibly by the use of certain insecticides.

Whether construction of this one particular highway is further delayed or if the project is modified in some way to address potential impacts to the bumblebee, there is little doubt that developers working in states with remaining bumblebee populations and habitat must take these concerns into account.  The practical effect of the bumblebee listing may also finally free up the potential for mitigation banks specializing in habitat in the species’ current range.  While this market has been fairly robust in the wetlands/stream context, it has been slow to advance in the ESA context.  Now that ESA obligations for the bumblebee may complicate infrastructure development in states like Pennsylvania, Maryland, Illinois, and Ohio, perhaps habitat conservation banking will be more readily accepted by the Fish & Wildlife Service.

Cases like those attacking the Longmeadow project are sure to provide more fuel to those seeking reform of the ESA, something gathering momentum on Capitol Hill. In the interim, however, the real “buzz” should be focused on research, compliance, and mitigation, so that other development projects can avoid the same litigation fate.

Buy American/Hire American Policies Previewed in Latest Executive Order

Made in the USA

 

When clients ask about “Buy American” restrictions, which apply to direct purchases by the federal government, they don’t always realize that they are referring to a shifting body of legislation that has been around for more than 80 years, since the Buy American Act of 1933 was passed. Since then, Buy American legislation has grown considerably, to include the often-confused, so-called Buy America Act, which was enacted in 1983 and applies only to mass-transit-related procurements.

On Tuesday, the general body of information on Buy American restrictions grew even larger after President Trump signed an executive order ushering in a “new, more muscular Buy American policy based on the twin pillars of maximizing Made in America content and minimizing waivers and exceptions to Buy American laws.”

The executive order directs every federal agency to “scrupulously monitor, enforce and comply with Buy American laws,” and further tasks Secretary Commerce Wilbur Ross with reviewing all agency findings and submitting a report to President Trump within 220 days. The new order seeks to minimize grants of waivers, and in particular will “more narrowly” construe public-interest waivers, which are already rarely granted. The order also requires agency heads to consider whether the cost advantage of a foreign-sourced product is the result of the use of dumped or subsidized goods.

Additionally, the order focuses on the role of Buy American laws in free trade agreements and, specifically, on whether the United States is getting its “fair share” of global government procurement when it treats foreign suppliers like American companies. The executive order does not actually rescind any trade agreements or call for their renegotiation, but it does call for more information to determine which deals are working for America and which ones are not.

Finally, the order strongly reaffirms the “melted and poured” standard for U.S. steel production, without which semi-finished steel would be imported from countries like China and Russia.

As indicated above, the executive order does not contemplate any immediate action; instead, it is an information-gathering exercise that may or may not result in changes in enforcement, legislation, or trade agreements. It is also a signal to other countries that the United States wants a larger piece of the global government procurement pie. While we await the eventual outcome of the executive order, the various and often complicated compliance issues associated with Buy American laws remain intact, and should be broached with legal counsel, since—even with a greater articulation from the Trump administration about the government’s approach to buying American—there is still no “one size fits all” Buy American test.

Regulatory Reform: Be Careful What You Wish For

Scissors cutting red silk ribbon on white background

A constant refrain from clients over the years, in both the public and private sectors, is that certainty may be the most valuable characteristic of any regulatory program.  The “Waters of the United States” controversy perfectly illustrates this perspective.  One could argue whether the Army Corps of Engineers’ reach over jurisdictional waters governed by Section 404 of the Clean Water Act has expanded or contracted over the years.  But there can be no dispute, thanks to a series of confusing Supreme Court decisions and regulatory inertia, that a property owner still doesn’t know precisely whether all or part of her land qualifies as “waters of the U.S.”  This reality leads to the legitimate complaint from the regulated community that its cost of proposed development rises dramatically because of regulatory uncertainty.

The Trump administration has promised (and is acting on that promise) to address regulatory burdens facing a variety of industries.  Some members of the administration take a broad philosophical view of such actions (“deconstructing the administrative state”), while others have a far more practical aim of promoting greater economic activity by reducing the built-in costs of regulatory compliance.  Whether the goal is job creation or encouraging a more fundamental shift of power away from federal agencies, this effort isn’t new.

In fact, one of the first tasks assigned to me as Chief Counsel at the Federal Highway Administration was implementation of a directive from the Office of Management & Budget to identify out-of-date or redundant regulations for repeal.  Cass Sunstein, then the head of OMB’s Office of Information and Regulatory Affairs, issued a directive to all agencies to find and cut unnecessary rules from the Code of Regulations.  Sounds familiar, right?  Together with my program office colleagues, I researched and found at least a dozen major rules that had been superseded by subsequent law and served no good purpose.

Think back even further, and I have a distinct recollection of Vice-President Al Gore appearing on a late night show to push the Clinton Administration’s effort to reduce silly regulations.  The Vice President demonstrated the testing procedure set forth in federal purchasing regulations to determine whether ash trays meet quality standards.  I’m not sure if those regulations were ultimately repealed, but it made for good TV.

Fast forward to last week, when I addressed the National Ocean Industries Association Annual Meeting, giving attendees an overview of regulatory activity impacting the offshore energy sector.  While the overall theme of the meeting was one of optimism over the potential for reduced regulatory burdens affecting offshore energy development, my message was somewhat more sobering.

The unprecedented use of the Congressional Review Act has already led to the rescission of a couple of major rules involving oil and gas development, and there are at least a couple of others that could be on the President’s desk before the CRA deadline in early May.  (Eleven regulations have been repealed in total, after a grand total of one rule had been overturned by Congress in over 20 years since the CRA was passed.)

Beyond that, Administration Executive Orders and internal Department of the Interior Secretarial Orders will impact energy exploration regulations from top to bottom.  So many questions persist.  How will the agencies implement the directive to repeal two rules for every new one proposed?  How will they attempt to estimate the costs vs. benefits of safety rules governing offshore drilling, for example, against the cost of implementing new Blow-Out Preventer rules put in place after Deepwater Horizon?  What rules will be determined to impede energy production and why?  Once the agencies identify these regulations, how will they address the legal requirements of the Administrative Procedure Act to attempt to roll back those regulations?  Besides those procedural issues, the manner in which the DOI will enforce remaining rules is far from clear.

All those unanswered questions add up to one thing: uncertainty.  The Blow-Out Preventer rules, for example, were written largely to adopt and codify existing best practices, many of which were supported by the industry!  Would it really make sense for offshore operators to turn back those standards, having spent millions of dollars investing in safety equipment and technology?  Not all action involves the repeal of regulations.  A proposed rule out of the Department of Homeland Security/Custom and Border Protection could advance the administration’s “America First” policy by prohibiting the use of foreign-flagged vessels for a wide variety of offshore oil and gas activities.  If finalized, some industry experts estimate that this new interpretation of the Jones Act could result in tremendous delays in planned offshore drilling activities.

Many regulations on the books clearly deserve close inspection.  But in advancing the cause of reform, the administration should keep in mind that by drastically changing the regulatory landscape, it may also be increasing uncertainty for major industries that had already adapted to major public health and safety rules.  Fewer regulations may indeed be a laudable goal, but knowing the rules of the road creates certainty that all businesses crave.

Poof! Administration Makes CEQ Greenhouse Gas NEPA Guidance Disappear. Or Did It?

wagner postThe duo of Penn & Teller is one of my favorite acts. I appreciate not only their irreverent sense of humor, but their unabashed respect for their audiences.  Their tricks are designed to amaze, but they just as quickly reveal exactly how they performed the illusion.  Somehow, knowing how their magic works in no way diminishes their appeal.

On March 28, the Trump administration did Penn & Teller one better. At an elaborate ceremony at the U.S. Environmental Protection Agency, the President made a comprehensive group of Obama-era climate guidance and policies disappear.  This post won’t attempt to review the entire collection of actions targeted by the administration.  Most experts agree that the primary focus of the executive actions, the Clean Power Plan, won’t be undone by executive order.  Administrative procedures and pending (and future) litigation will make any change in policy a protracted effort that may not conclude by the end of the President’s first term.

The focus here is the CEQ’s Greenhouse Gas (GHG) NEPA Guidance, issued last August. The White House rescinded this guidance, effective immediately.  As it was not a regulation (although it did go through extensive public notice and comment), this administrative action will have immediate effect.  The more pertinent question is, will the President’s action simply be an elaborate illusion?

It should be remembered that the Guidance’s stated goal was to make the federal government’s consideration of climate change impacts in NEPA documents for the entire spectrum of federal actions as consistent as possible. Agencies and courts reviewing agency actions struggle with precisely how to address climate impacts.  Some agencies include quantitative calculations (the number of tons of carbon associated with an action); some provide only qualitative analysis as a general rule; others still decline to include any analysis on a project-level basis, on the assumption that no one action can produce measureable impacts on a global phenomenon.  The issue becomes even more complicated when projects incorporate climate resilience features in the alternatives analysis (“should we re-build this bridge with 10-foot or 20-foot clearance over the river?”).

Critics of the Guidance argued that the policy would make NEPA analyses even more complex and take even more time to address this over-arching issue. They also asserted that mandating any quantitative analysis on a project-specific basis made no sense, as the potential climate impact of any additional carbon produced by the project was the quintessential “cumulative effect,” and shouldn’t be charged to any single action.  Moreover, they worried that agencies would have to chase potential carbon emissions “upstream” from more general land-use planning actions in a manner that would be amorphous at best, and inaccurate at worst (for example, opening federal lands to energy exploration, and having to calculate the carbon emissions from potential future use of the resources that could be extracted).

Now all these challenges have magically disappeared, right? Well, not so fast.

Earlier this week I attended the Annual Meeting of the National Association of Environmental Professionals, the organization of consultants and engineers largely responsible for most of the major NEPA work in the U.S.  I had the opportunity there to discuss the Guidance with a number of veteran environmental officials from past administrations, as the EPA announcement literally took place during sessions on “how to assess climate change impacts in NEPA documents.”  Their conclusion, with which I agree, was that regardless of the intent behind rescission of the Guidance, NEPA practice will remain largely unchanged.

Plaintiffs challenging agency NEPA analysis will still pursue claims that analysis of climate impacts was not done in sufficient detail, or not at all. Federal courts will be confronted with this issue in any number of contexts, from broad-based land-use planning decisions to project-specific action.  Agencies won’t be able to avoid the issue.  They will be compelled to respond to public comments on the topic of climate and resilience.  In many instances, the nature of the project itself will demand attention to how or if rising sea levels (as one example) will impact construction of a project.  Will the project proponent be required to commit to additional mitigation measures to protect the infrastructure or development at issue?  Will engineering alternatives need to be considered to address resiliency?  In short, analysis of climate impacts will still be part and parcel of many (if not most) federal environmental reviews.

Therein lies the uneasiness about the absence of CEQ guidance on the issue that I heard expressed at the conference. Professional consultants fear a case-by-case, court-by-court standard on how to address climate, which is certainly not conducive to efficient reviews.  They similarly worry about different federal agencies taking very different approaches, which is likely to occur.  Projects being analyzed in the same geographic region could see widely divergent approaches to climate impacts and resilience.  Once courts have more opportunities to chime in, we may also witness different standards in different parts of the country.

That was what the Guidance attempted to avoid, all under the framework of current regulatory requirements that give agencies great flexibility depending on the well-understood NEPA concepts of “context and intensity.” Now that the Guidance is gone, the goal of greater consistency may also be illusory.

The CEQ GHG NEPA Guidance has disappeared. But the challenge of how to address climate issues under NEPA has not.

Hidden Behind the President’s Proposed EPA Cuts, an Infrastructure Silver Lining

As expected, President Trump’s recently released “skinny budget” proposes deep cuts to EPA’s 2018 fiscal year funding. The outline calls for Congress to slash $2.4 billion from EPA’s existinbridge-918748_640g budget, reducing the agency’s funding from $8.1 billion to $5.7 billion.  This 31 percent budget reduction would force the agency to axe over 50 programs and the equivalent of roughly 3,000 full-time jobs.  Of course, Congress is unlikely to enact these cuts in full, and even many key Republicans have already indicated resistance to major pieces of the President’s proposed EPA budget.

But the Administration doesn’t propose cutting every EPA program.  In fact, buried in the lede is the proposed budget’s “robust funding for critical drinking and wastewater infrastructure.”  $2.3 billion is set aside to fund the Clean Water State Revolving Fund and Drinking Water State Revolving Fund (the State Revolving Funds)—a $4 million increase over the 2017 annualized continuing resolution funding level. And the budget would provide $20 million in first-time funding to the Water Infrastructure Finance and Innovation Act program (WIFIA), which is based on the successful Transportation Infrastructure and Innovation Act administered by the Department of Transportation.

Together, these programs form the backbone of federal support to state and local water infrastructure programs. Since formation, the State Revolving Funds have provided over $150 billion of water infrastructure support funding.  And WIFIA aims to provide long-term, low-interest loans worth up to 49 percent of water infrastructure project costs for qualifying projects, and is designed to work “hand in hand” with the State Revolving Funds.  EPA estimates that $20 million of WIFIA funding can support almost $1 billion in direct loans for water infrastructure projects across the country, through leveraging and multiplier effects. Indeed, the Department of Transportation estimates that “[e]ach dollar of Federal funds can provide up to $10 in TIFIA credit assistance—and leverage $30 in transportation infrastructure development,” so WIFIA is certainly promising.

In light of the substantial agency-wide cuts being floated by the Administration, this increase in federal water infrastructure funding, however modest, is a vital silver lining. Whatever other changes Congress makes to the balance of the proposed budget, these line items are likely safe.  Administrator Pruitt is a long-time federalism advocate, and President Trump has repeatedly emphasized his desire to funnel money toward water infrastructure projects, so water infrastructure funding may be somewhat of a sacred cow to both the White House and the agency.

But while it appears that the Trump EPA will prioritize water infrastructure, it is less certain when and how the money will start flowing. Aside from Administrator Pruitt, other EPA program heads have not been appointed; having a full political team in place at EPA would seem to be a prerequisite to getting WIFIA up and running.  Nor has the Administration indicated how it would dole out WIFIA funding, particularly in light of the significant proposed EPA staff cuts.  In short, though the President plans to push water infrastructure development while in office, there are important unanswered questions regarding the form that development and prioritization will take.  Yet despite these question marks, WIFIA stands a strong chance of moving forward.  It has both White House and EPA support, it is likely to garner significant Democratic support, and it supports both urban and rural constituencies.  If any Trump EPA program is likely to start off strong, it looks to be WIFIA.

 

Water Project Secures Appellate Win in Arduous NEPA Journey

Water GlassWhen politicians seek to target NEPA as the primary culprit for delays in major infrastructure projects, I am consistently one of the voices urging caution. Many realities create delay, most often, the lack of funding to get large-scale projects off the ground. We know that most federal projects get through the NEPA compliance by issuance of a “categorical exclusion,” a process that can usually be concluded in a matter of a few weeks. Large scale development? No, that takes longer, but they also represent the vast minority of projects with some sort of federal nexus.

The voices seeking further NEPA reform are out in force once again, as the new Congress and the new Administration try to find ways to expedite project planning and delivery. That’s laudable, but leaders should look first to all the effective tools available to federal agencies through the FAST Act (specifically Title 41 of that Act) and many other administrative reforms championed by the last two Administrations, Republican and Democrat.

Yet every now and then, a project serves as a poster child for how NEPA and its procedural mandates can be misused by those seeking to derail desperately needed infrastructure, further fueling cries for undercutting NEPA’s mostly positive legacy. I have been involved with one such project for over a decade, and most recently, the D.C. Circuit provided a glimmer of hope for the citizens who would benefit from its final construction.

The Northwest Area Water Supply project (or “NAWS”) has been planned and in various stages of design and development for decades. The project would provide a reliable and safe drinking water source for thousands of North Dakota’s citizens who have suffered with severe water quantity and quality issues for years. The basics of the project are simple:  water would be withdrawn from the Missouri River Basin, treated, and then transported via pipeline into the Hudson Bay Basin to provide a new water source for communities in and around Minot, North Dakota.

NEPA compliance began in the late 1990’s and culminated when the Bureau of Reclamation issued an environmental assessment and Finding of No Significant Impact in 2001. The Province of Manitoba, Canada, led the opposition to NAWS, primarily on the basis that water withdrawn from the Missouri River Basin and transferred to the Hudson Bay Basin had the potential to introduce invasive, microscopic biota, which could cause terrible damage in Canada. (The State of Missouri subsequently joined the fight against NAWS, opposing any withdrawal of water from the Missouri River.)

The merits of these challenges will not be re-litigated here. It’s enough to say that the agency’s first EA, and then a full, updated Environmental Impact Statement were challenged and found wanting in certain respects. A new Supplemental EIS was prepared and a Record of Decision was issued in August 2015. These documents were, of course, challenged again by Manitoba and Missouri.  Through all this time, my children were born, celebrated their B’nai Mitzvot (Mazel Tov!), and made their way to college. Wonderful achievements for my kids, but still no new drinking water source for the citizens of North Dakota.

Following completion of the Supplemental EIS, the State decided to seek a modification of the pending injunction, simply to allow paper engineering work to proceed while the most recent NEPA challenge was litigated. This relief was necessary, we argued, because engineering design for the NAWS water treatment plant was complicated business and could take almost two years alone, and then would be followed by two years of construction. In other words, no water would be withdrawn from the Missouri River and no water transferred to the Hudson Bay Basin for about four years. If the State could not engage in even the engineering design, water delivery could be delayed for several years beyond that planning and construction horizon.

That request was first denied by the district court, but on March 3, the D.C. Circuit reversed that ruling and ordered the lower court to grant the State’s request to modify the injunction. The Supplemental EIS challenge is still pending, so NAWS’ final chapter is still to be written.

Oral argument before the D.C. Circuit (conducted beautifully by my former colleague Nessa Coppinger) was remarkable. Judge Harry Edwards got to the heart of the debate over NEPA and how projects suffer from delay as a result of litigation like that North Dakota has defended for almost 20 years. Edwards pressed counsel for Manitoba about what harm could be suffered simply by allowing paper design work to move forward.  Not satisfied by the answers he heard, the Judge said something along the lines of: “I know how this works. You’ll challenge any NEPA work done on this project for however long it takes, and it will be another decade before any work on the project can commence.  Meanwhile, the people who need water won’t get any.”

It took all my self-control to not shout “Amen!” from the gallery. But Judge Edwards truly grasped the problem faced by the State as it sought to prevent what the Court called “an imminent public health crisis faced by its citizens.” NEPA must be followed, of course.  But when is “enough, enough,” and when has an agency done all that it could to identify reasonably foreseeable risk? The State now has some interim relief, as it waits to see if the latest NEPA analysis passes muster.

Cases like these and North Dakota’s NAWS experience don’t help those who extol the benefits of NEPA review to produce well-considered infrastructure projects across the country. While it may be the exception to the rule, it is a disturbing enough exception to encourage the ongoing effort currently underway to further undercut NEPA’s goals of reasoned decision-making and an informed public. We can and should have both, together with prompt project planning and development. I’ll drink (good clean water) to that!

LexBlog