White House Considering Role in Northwest Port Expansions (Bloomberg BNA)
White House CEQ Meetings on Coal Projects Seen Indicating Major Policy Issues at Stake
Tuesday, February 26, 2013
By Paul Shukovsky
SEATTLE–The White House Council on Environmental Quality has convened a series of meetings with federal regulators over the past nine months as the Obama administration shapes environmental impact analyses for the building of terminals to export coal to Asia.
While CEQ downplays its involvement in the deliberations, a former CEQ official and other analysts suggest the White House role highlights the sensitive policy issues at stake, as the administration is under pressure to assess the possible climate change impact of burning U.S. coal in Asia.
At issue is how broadly the government should extend its analysis: whether to consider the impacts of each of the Pacific Northwest export terminals through narrowly tailored individual environmental impact statements or to assess their cumulative effects together, which would allow for a comprehensive analysis of possible climate change impacts.
CEQ has declined to say what it has been telling the agency regulators, and emails obtained under the Freedom of Information Act have been heavily redacted. Nonetheless, in the next few weeks, the U.S. Army Corps of Engineers is expected to announce a narrow approach to the environmental analyses, judging from statements the corps has made in recent months and unredacted portions of the emails.
The corps is being pressed by environmental groups, state officials in Oregon and Washington, and even the Environmental Protection Agency to conduct a broad analysis that would consider a wide range of possible effects. Those include the effects of greenhouse gas emissions and the trans-Pacific migration of hazardous substances, such as mercury, from burning U.S. coal in China and other Asian countries.
Broader Climate Change Issues
Oregon Gov. John Kitzhaber (D) wants the Obama administration to address the question of whether facilitating coal exports is in sync with its desire to combat global climate change. However, some backers of the export terminals, such as Berkshire Hathway’s BNSF Railway, argue that the process of drafting an environmental impact statement should not be used as a referendum on global warming.
BNSF Railway would transport the coal to the terminals.
The meetings have come as the corps undergoes the scoping process for the environmental impact statement assessing the largest of the three proposed export terminals–the Gateway Pacific Terminal in Washington state at a site on Puget Sound, just below the Canadian border. The Gateway Pacific would be the largest such facility in the United States, shipping up to 53 million tons of coal a year.
The three proposed terminals in Oregon and Washington would open a conduit for shipping coal mined mainly from federal land in Wyoming’s Powder River Basin, which contains an estimated 127 billion tons of recoverable coal.
Upon build out, the terminals collectively would more than match the 107 million tons exported from the United States in 2011. Two other terminal projects in Oregon have yet to enter the permitting phase (125 ECR, 6/28/12).
Initial Meeting Convened in June
Emails obtained from the corps show that the White House convened an initial meeting by teleconference on June 7, 2012, with the corps and the Interior Department’s Bureau of Land Management and Office of Surface Mining Reclamation and Enforcement.
That was just weeks after Kitzhaber urged the corps to consider the cumulative effects of the projects taken together before it begins issuing a series of permits under the Clean Water Act and other federal laws. The corps must consider environmental impacts, as required by the National Environmental Policy Act. CEQ also convened a meeting June 26 at which a response by BLM to the Kitzhaber letter was discussed.
Another meeting was held Aug. 10, this one involving the CEQ and officials from several agencies, including EPA, which had already made its recommendation for a broad analysis in a letter the previous April.
The redactions in the emails obtained by BNA make it impossible to say precisely what CEQ has been telling the agencies, and the White House has declined to say.
The Role of CEQ
CEQ Communications Director Taryn Tuss downplayed the significance of CEQ’s role in the scoping process, telling BNA Feb. 22 that the White House office regularly plays a facilitating role among agencies engaged in NEPA reviews to encourage interagency communication and consistency.
“CEQ does not direct agencies how to conduct their NEPA reviews,” she said. “It is the agencies’ responsibility to implement NEPA and apply their analysis on a case by case basis, according to their individual NEPA regulations.”
CEQ has declined to answer any further questions from BNA and has yet to release any documents pursuant to a FOIA request by BNA that might shed further light on the discussions between the White House and the agencies.
Ray Clark, who served as CEQ’s deputy director for NEPA oversight during the Clinton administration, said in an interview that the office can play an important role, but he said that intervention in the NEPA process at the project level is far from typical and is reserved for big projects and those that implicate major policy issues.
“As we used to say at CEQ, if a call comes in about the NEPA process, it’s never going to be how great this thing is working,” he told BNA. “Generally, the people in the agencies don’t want to see something go to CEQ. But the role of CEQ is to be an arbiter, a mediator, a facilitator among federal agencies.”
‘A Huge Decision’
Clark also said that the corps will balk at undertaking a NEPA analysis on the global scale required to evaluate the climate change impact of burning U.S. coal in Asia. In fact, corps officials have expressed a preference for a narrowly drawn assessment, which would virtually eliminate any possibility of assessing comprehensively the indirect effects of greenhouse gas emissions associated with burning the exported coal.
“Why should the corps be saddled with all the baggage of making such a huge decision?” Clark asked. “It’s not really a corps decision. This is a bigger thing than the Corps of Engineers. It’s got a lot of implications. For example, why would you permit mining Powder River Basin coal [from federal land] with no place for it to go? There are a lot of decisions here. Why is the corps being asked to make these big macro decisions?”
Corps Has Options.
The corps has several options for drafting an environmental impact statement, including:
• a project-specific EIS, which is intended to consider “the effects in the locale rather than in the world as a whole,” according to both CEQ NEPA regulations and corps NEPA definitions;
• a programmatic EIS, which allows for crossing political boundaries and covering multiple ecosystems with the intent to be a comprehensive and intensive study of cumulative impacts, such as global climate change; and
• an area-wide EIS, which can be thought of as an intermediate step between a project-specific and programmatic EIS, and could cover a wider geographic area in its consideration of cumulative and indirect effects than could a project-specific EIS.
While several corps officials have all but said no to conducting a programmatic EIS, they hold out the possibility of drafting an area-wide impact statement (192 ECR, 10/3/12).
But the corps would have to shoehorn port proposals separated by some 200 miles and numerous eco-systems into an area-wide EIS, which is typically confined to a single watershed, corps officials and environmental attorneys told BNA.
“Usually these area-wide or regional EISs are reserved for actions that are close together,” Washington University Professor of Law Daniel R. Mandelker, author of a widely used treatise on NEPA law, told BNA.
William James, acting deputy chief of the corps’ regulatory program and the agency’s expert on coal, told BNA: “Area-wide [EISs] can be used in the same general location like a body of water or a certain metropolitan area. They [the various proposed coal ports] are a long distance apart. We try to work on a watershed basis. Certainly Gateway Pacific and the others are not in the same watershed.”
One corps email sent the day after the June 26 CEQ meeting with multiple agencies makes clear the corps perspective that it is not the corps’ job to make policy decisions on export facilities like the proposed coal terminals. The email says that “the Corps does not authorize export facilities,” but instead focuses on the narrower regulatory matters of permitting docks and filling wetlands to build the proposed terminals.
A spokeswoman for the corps, which is conducting the Gateway Terminal EIS with state and local regulatory partners, said it will be several weeks before decisions on scoping and on the type of EIS will be announced.
CEQ Guidance ‘Taken Seriously’
The White House CEQ–in its coordinating role as defined by NEPA–gives regulators its interpretation of the parameters under the law within which regulatory agencies such as the corps must make its permitting decisions on the coal port proposals. Although NEPA regulatory decisions remain the province of the regulatory agencies, the CEQ wields considerable influence on executive branch regulators like the corps, environmental attorneys say.
“The agencies take guidance from CEQ very seriously,” Columbia University Law Professor Michael B. Gerrard told BNA. “It’s a major factor in their decisionmaking. Ultimately, it’s the agency’s decision. I don’t think it ever has to get that heavy handed. All the relevant agencies are headed by appointees of the president. The president could ask CEQ to require the cumulative analysis of the effect of a whole variety of projects on greenhouse gases worldwide.”
Clark, the former CEQ official, also said that President Obama could order a “policy EIS,” which he described as a level up from a programmatic EIS. “The president could say there are a bunch of different issues associated with this and so I want the federal government to do an environmental impact analysis on whether or not we should promote as a national policy the export of coal. Then it’s a very good policy EIS.”
Corps Email Discusses Teleconference
The seriousness with which the corps views CEQ guidance was demonstrated in one email from a top corps leader sent three days prior to the June 7 teleconference and flagged as having “high” importance.
In a decision the email’s author, corps Regulatory Program Chief Meg Gaffney-Smith, described as out of the ordinary, she ordered that any guidance provided by the CEQ at the June 7 meeting be shared directly with the line corps officials who are poised to decide upon the scope of environmental analysis to be conducted on the three proposals, including the Gateway Pacific Terminal.
Gaffney-Smith instructed Northwestern Division Regulatory Program Manager David W. Gesl to phone into the CEQ teleconference even though such calls “are typically limited to Agency HQ staff.”
Gaffney-Smith said that “this time we’ll include NWD [Northwestern Division] to share information with NWP/NWS,” the Portland, Ore., and Seattle district offices directly responsible for permitting the proposed coal projects. And she told Gesl she wanted him to be “fully aware of the authorities and responsibilities as well as understanding CEQs guidance on this action.”
EPA Concerns Surfaced in April
EPA concerns over the proposed export terminals surfaced publicly in April 2012, when Kate Kelly, then EPA Region 10 director of the Office of Ecosystems, Tribal, and Public Affairs, in a letter to the corps cited a litany of possible impacts on human health, endangered species, higher greenhouse gas emissions, and traffic. Kelly in the April 5 letter urged the corps to consider the cumulative impact of all proposed projects.
“Consider, for example, the cumulative impacts to human health and the environment from increases in greenhouse gas emissions, rail traffic, mining activity on public lands, and the transport of ozone, particulate matter, and mercury from Asia to the United States,” Kelly said in the letter.
EPA sent another letter to the corps Jan. 22 making a similar argument for a broad assessment (19 ECR, 1/29/13).
Oregon Governor Weighs In
Kitzhaber weighed in April 25 with his letter to Interior Secretary Ken Salazar, the secretary of the Army, and the director of BLM calling for the formulation of clear federal policy before further permitting and leasing decisions on coal are made.
Calling greenhouse gas emissions a “major concern,” Kitzhaber said that “if the United States is going to embark on the large-scale export of coal to Asia it is imperative that we ask–and answer–the question of how such actions fit with the larger strategy of moving to a lower carbon future.”
The way to answer such questions, Kitzhaber asserted, is for the corps to conduct a broad programmatic environmental impact statement, which would consider the cumulative and indirect effects of all the port projects, coal-leasing decisions and rail-system impacts in one overarching document.
Kitzhaber’s letter set off a flurry of activity in the executive branch with the White House CEQ the nexus. Draft responses to Kitzhaber from both the corps and BLM were shared by email with officials of both agencies and with the CEQ’s Horst Greczmiel, who is responsible for NEPA oversight.
CEQ Convenes Meeting
Greczmiel led the June 7 teleconference that included the corps, BLM, and the Office of Surface Mining “to discuss the NEPA roles and responsibilities of each agency as regards the planned coal mining and export development in the Pacific Northwest,” according to an email summary of the meeting sent by Jason DeRosa, a corps attorney in its Northwestern Division office. The group discussed the pending replies from the corps and BLM to Kitzhaber, and the agencies promised to share their drafts with the entire group for review prior to the letters being sent.
An email Gesl sent June 8–the day after the CEQ teleconference–to Brig. Gen. John R. McMahon, then commander of the Northwestern Division, provides a clue to the extent of White House involvement in the NEPA process.
The CEQ held the teleconference, Gesl wrote, “to summarize statutory authorities and involvement in the review of the proposed terminal facilities and to provide preliminary feedback on what direct, indirect and cumulative effects may be considered within each agency’s control and responsibility.”
Notwithstanding their emails, both Gesl and Gaffney-Smith told BNA that CEQ has offered little in the way of policy guidance on how or whether to address any particular effect, including possible climate change impacts that burning coal would cause–instead leaving the decision to the corps. They said the meetings were simply general discussions of what each agency was doing with respect to the proposed coal projects.
‘No Policy Direction’ From CEQ
Gesl told BNA, “We have not received any policy direction at all from CEQ.” And Gaffney-Smith said, “The CEQ didn’t provide input on what any agency can consider in terms of effects.”
It is not clear exactly what the White House CEQ told the regulators because virtually every word in emails written by the CEQ’s Greczmiel and obtained through FOIA has been redacted by the corps.
Corps Responds to Governor
Assistant Secretary of the Army for Civil Works Jo-Ellen Darcy sent Kitzhaber a carefully worded response June 8, a day after the teleconference convened by CEQ. Emails show the response was forged through the collective input of CEQ, corps, and BLM officials.
Darcy told the governor that “the Corps will extend its scope of analysis beyond the proposed activity within Corps jurisdiction [the construction of docks and associated coal-handling infrastructure] only where the Corps determines that extension to be appropriate under its NEPA regulations and other relevant authorities” (118 DEN A-8, 6/20/12).
Two months later, on Aug. 8, BLM Acting Director Mike Pool responded to Kitzhaber’s letter by saying that his agency “does not intend to undertake a Federal programmatic EIS evaluating the potential impacts of increasing coal export proposals at this time.”
The same day Pool’s response was issued the CEQ’s Greczmiel sent an email convening another meeting. As the burgeoning anti-coal movement was gaining momentum in the Northwest, Greczmiel asked senior staff from several agencies–this time including EPA, the corps, BLM, and the Surface Transportation Board, which regulates railroads–to attend a meeting on Aug. 10.
CEQ Asks for Discussion
The email, obtained through a FOIA request to EPA, is the only one released to BNA that contains an unredacted fragment of Greczmiel’s instructions to regulators. Greczmiel calls in the email for a discussion of issues surrounding the proposed Coyote Island Terminal–also called the Morrow Pacific Terminal, which would ship 8.8 million tons of coal annually–as an example of how the Obama administration would proceed “as we move forward with additional [permit] applications, lease sales, mining operations, and potential rail improvements.”
No information summarizing the discussions at the Aug. 10 meeting has been released.
Clark agrees with the corps perspective that a programmatic EIS should only be used to analyze the impacts of a program. That conclusion led him to tell BNA that conducting a policy EIS is a logical course of action to analyze the cumulative impacts of the coal export proposals.
But the corps perspective that a programmatic EIS can only be used to analyze a program is at odds with the findings of a CEQ NEPA task force which reported a decade ago that “both the public and Federal agencies interviewed by the task force indicated that programmatic NEPA analyses were appropriate for a variety of decisions and could be used in a number of ways (e.g., analysis of a program, analysis of similar activities in an area).”
The task force said CEQ should address how programmatic EISs are used “to foster agreement and consistency between agency decisions and public expectations.”
Program Called Unnecessary for Programmatic EIS
“They don’t have to have a program to do a programmatic EIS,” Mandelker, the law professor, said. “They have to have actions [such as permit requests to build coal terminals] that are geographically connected. A programmatic EIS would look … at the effects for all the projects, which might seem more serious if they aggregate the projects together. The site-specific EIS could look at climate change impacts, but they’d be very much diminished because it’s only one port.”
Meanwhile, the issue of whether greenhouse gases emitted overseas can be considered in an environmental impact statement is not settled law. Gerrard, who also directs Columbia University’s Center for Climate Change Law, said: “It’s very much an open question. And there is a great deal of variations among agencies in how they consider climate change under NEPA.”
Corps Regulatory Chief Gaffney-Smith told BNA that the coal port proposals are the first time the corps has been confronted with the issue of potentially considering in an EIS the possible impact on climate change of burning a U.S. produced fossil fuel abroad. “This suite of projects is really the first time where this type of effect or impact has been brought up,” she said.
‘The Great Mystery’
Mandelker said that the CEQ issued draft guidance on climate change that would have resulted in a more consistent response from the various regulatory agencies, but never implemented it.
Gerrard was involved four years ago in preparing a petition to the CEQ requesting the guidance on climate change to which Mandelker referred (42 ECR, 3/3/08).
The CEQ Chairwoman Nancy Sutley issued the draft guidance Feb. 18, 2010. Asked by BNA why the guidance was never made final and implemented, Gerrard said: “That’s the great mystery.”
Tuss, the CEQ communications director, told BNA Feb. 22 that the White House office is “working to incorporate the extensive public comment we received on our draft NEPA guidance, and will release updated guidance when it is completed.”
In the three years that the CEQ’s draft guidance has remained in limbo, federal regulatory agencies have lacked consistency in the way they address greenhouse gas emissions and climate change impacts, according to an analysis by Columbia Law School’s Center for Climate Change Law (08 ECR, 1/12/12).
And while the Supreme Court ruled in 2007 that EPA has the authority under the Clean Air Act to regulate greenhouse gases as a pollutant, the issue of how to implement greenhouse gas emissions and climate change impacts in NEPA permitting actions has yet to be fully litigated.
Corps Coordinates With BNSF
Gesl, the corps’ Northwest Regulatory chief, in his June 8 email to McMahon, the brigadier general who was then commander of the Northwestern Division, also reported on a “coordination meeting with the BNSF Railway Company to discuss corps involvement in various items of interest to their company,” which is slated to haul coal to both the Gateway and Millennium terminals. Gesl says in his email that the unnamed BNSF representatives “acknowledged the direct local impacts” to 190 acres of wetland at the Gateway site where terminal and rail facilities would be built–a site-specific issue involving direct impact to U.S. waters under the Clean Water Act.
Gesl goes on to tell the general: “BNSF representatives expressed their desire that the scope of the EIS focus on the direct impacts to the WOUS [waters of the United States] and not be used as a referendum on the much broader issues of global warming, climate change, air quality impacts, rail traffic concerns, etc. They also expressed their opinion that a programmatic EIS analyzing impacts (including cumulative impacts) of all similar contemplated facilities in the Pacific Northwest would be speculative and inappropriate.”
“BNSF expressed their appreciation for the excellent cooperation they have received thus far from NWS staff working on [these] permit applications,” Gesl said.
State of Washington Has Role
The corps is jointly conducting the Gateway EIS in concert with the Washington Department of Ecology and local officials, with the state and local officials focused on enforcing Washington’s State Environmental Policy Act (SEPA).
Unlike NEPA, which is a procedural statute, SEPA is substantive because “it says if there are adverse significant environmental impacts identified, then the permitting agencies can require mitigation, or if they can’t reasonably be mitigated, then the permitting agency can deny that project,” Washington Assistant Attorney General Laura Watson told BNA.
While such substantive aspects of SEPA could come into play with respect to many potential in-state impacts, Watson said that “it’s difficult to imagine how the state would reach beyond its borders” on issues such as the climate change impact of burning the coal in Asia with the intent to insist upon mitigation.
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