02 October 2014 Federal GHG Regulations Litigation Share on: Federal Court Vacates Three Agency Approvals for Failing to Disclose the Project’s Climate Change Impacts On September 11, 2014, a federal district court judge in the District of Colorado vacated three interrelated federal approvals that together allowed on-the-ground mining exploration activities in part of the North Fork Valley, Colorado. The court held that the approvals were invalid because the Forest Service and Bureau of Land Management (the agencies) failed to adequately disclose the Greenhouse Gas (GHG) emissions that would result from those activities in the environmental impact statement created for the approvals.In High Country Conservation Advocates, et al. v. United States Forest Service, several environmental organizations sought judicial review of three interrelated agency decisions. Specifically, the organizations argued that the environmental impact statement performed by the agencies before reaching these decisions did not satisfy the National Environmental Policy Act (NEPA). Before undertaking a federal action, such as issuing an approval or a permit, NEPA requires federal agencies to analyze the possible environmental impacts of their decision. The environmental plaintiffs in High Country Conservation Advocates argued that as part of this review, the agencies had to disclose the GHG emissions that would result from the approvals. On June 27 the district court agreed and ruled the agencies failed to comply with NEPA because the “agencies failed to disclose the social, environmental, and economic impacts of GHG emissions” resulting from the approvals. The court’s more recent decision focused on the appropriate remedy and concluded that vacatur was the most suitable solution because “NEPA’s goals of deliberative, non-arbitrary decision-making would seem best served by the agencies approaching these actions with a clean slate.” The court did “not find that equitable considerations tip the scales in favor of a temporary injunction” reasoning that “vacation will best serve the deliberative process mandated by NEPA.”As more courts reach similar holdings, federal agencies will need to conduct a detailed and specific analysis of a project’s climate change impacts as part of the NEPA environmental impact statement. These requirements might also apply to an earlier part of the NEPA review process, when an agency performs an environmental assessment to determine whether a federal action will have a significant environmental impact. As discussed in this previous post, the Council on Environmental Quality (CEQ) recently denied a 2008 petition seeking rulemaking to include climate-specific provisions in CEQ’s NEPA regulations. The CEQ’s denial and this district court decision together leave open questions about the specific contours of climate change analysis required in the NEPA review process, and create litigation risks for future federal actions subject to NEPA review. While uncertainty remains, here are a couple of key take-aways from the court’s two decisions: 1. Environmental groups have standing to challenge an agency action under NEPA based on the project’s indirect GHG emissions, even when the plaintiffs are alleging an injury separate from climate change impacts.Standing requires that the plaintiff have a concrete injury. In this case, the plaintiffs’ alleged injury was the loss of recreational use to the land if bulldozing began. The court noted that “plaintiffs admittedly cannot draw such a line between the alleged deficiency and the particular harm they face,” but nonetheless held that they had standing to challenge the lack of GHG disclosures. Indeed, the court went so far as to say that “plaintiffs have standing to challenge the [agency approval] even if their argument that the rule failed to adequately analyze climate change impacts does not share a nexus with the concrete injury to their recreational interests.” (emphasis added).2. The NEPA environmental impact statement must disclose the effects of a project’s GHG emissions, even if those effects are an indirect result of the project. The court explained that the agencies’ approvals “made it possible . . . to recover nearby coal on adjacent public and private lands that otherwise would have been permanently bypassed. The fact that this additional coal might now be recoverable and might be developed, while not a direct impact of the [approval], is nonetheless a foreseeable indirect impact of the approval” and therefore must be analyzed and disclosed.” 3. Both the Forrest Services and Bureau of Land Management accepted that NEPA requires an analysis of a project’s indirect GHG emissions. The court noted that “[t]he agencies apparently do not dispute that they are required to analyze the indirect effects of GHG emissions in some fashion, but they contend that their general discussion of the effects of global climate change was sufficient under NEPA.”4. General explanations of a project’s climate change impacts will not suffice.The agencies argued that they could not quantify the increased methane emissions that would foreseeably result from one of the approvals. The court was skeptical of the agencies’ claim that the methane emissions were too speculative to calculate, given the level of analysis that the agencies were able to perform on the economic impacts of the approval. As a result, “the decision to forgo calculating the reasonably foreseeable GHG emissions associated with [one of the approvals] was arbitrary in light of the agencies’ apparent ability to perform such calculations and their decision to include a detailed economic analysis of the benefits associated with the rule.” Even disclosing the amount of emissions is not always enough. The agencies qualified the amount of emissions for one of the approvals relative to the state and national emissions, and gave a general discussion of the impacts of global warming in the environmental impact statement. The court found this insufficient, because the agencies did not discuss the impacts caused by emissions from this specific project. The court also identified the social cost of carbon protocol as the proper tool for the agencies to use in this analysis. 5. If an environmental impact statement includes project benefits, it must also include costs.The environmental impact statement at issue in this case described the anticipated economic benefits of mining coal from adjacent lands. The court reasoned that “[e]ven though NEPA does not require a cost-benefit analysis, it was nonetheless arbitrary and capricious to quantify the benefits of the [approvals] and then explain that a similar analysis of the costs was impossible when such an analysis was in fact possible and was included in an earlier draft [environmental impact statement].”6. The environmental impact statement cannot rely on speculations about future mitigation.The agencies argued that new technology might reduce carbon emissions from future coal combustion. The court was not persuaded, explaining that “[t]he agenc[ies] cannot rely on unsupported assumptions that future mitigation technologies will be adopted.”7. The environmental impact statement cannot assume that the project will not impact climate change because global energy demands will necessarily result in consumption. The agencies argued that coal is a fungible commodity, and that even if it wasn’t mined from this specific project, it would nonetheless be mined and burnt elsewhere, which would result in identical GHG emissions. The court rejected the agencies’ logic, noting that the Eighth Circuit has already called a similar argument “illogical at best.”1Conclusion NEPA is a purely procedural statute that does not mandate any particular outcome. These recent rulings could nonetheless slow down federal projects and make them more costly by requiring that agencies to perform more detailed climate change analyses. As the court’s decisions demonstrate, NEPA challenges have the power to hold up projects in litigation, or force an agency to go back and perform additional work before a project can go forward. 1 Citing Mid States Coalition for Progress v. Surface Transportation Board, 345 F.3d 520, 549 (8th Cir. 2003).