(Feb 2006)
AVOIDING NEPA PITFALLS
Brooks & Schluter, L.L.P.
Denver, Colorado
CONSTANCE E. BROOKS
Constance E. Brooks specializes in federal regulatory issues, including aviation noise and land use [Airport Noise and Capacity Act and National Environmental Policy Act], natural resources, and related environmental matters, such as, mining, mineral leasing, rights of way and access rights, livestock grazing, as well as federal and state land use planning. She has handled federal litigation in most western states and in the District of Columbia. Ms. Brooks is also well-versed in more traditional areas of environmental law, including the Clean Water Act, Clean Air Act, and Resource Conservation Recovery Act (RCRA).
Ms. Brooks started her own firm in Denver, Colorado in January, 1993. Prior to that she practiced law in Portland, Oregon for four years, where she was a member of the firms of Davis Wright Tremaine and Lindsay, Hart, Neil & Weigler. From 1982 to 1988, Ms. Brooks was Vice President and General Counsel of Mountain States Legal Foundation in Denver, Colorado.
Before moving to Denver, Colorado in 1982, Ms. Brooks worked in Washington, D.C. for an Alaska-based law firm which represented Alaskan clients on the proposed wilderness legislation now known as the Alaska National Interest Lands Conservation Act. The practice included Alaska Native corporation issues, mining law, state land selections and related statehood issues, the Antiquities Act of 1906, and rights under the Wilderness Act of 1964. Statehood issues pertaining to state lands, regulation of wildlife, and water rights were prominent.
Ms. Brooks is a 1977 graduate of Tulane Law School and a member of the bar in Virginia, Alaska, Colorado, Oregon, and the District of Columbia. She served on the Standing Committee on Environmental Law of the American Bar Association from 1986 to 1990 and is a frequent lecturer on public land and environmental issues.
In the western United States, it is a rare project that does not involve federal land at some point. The mining and energy industries need federal approval to develop mines and oil and gas leases and to build the necessary facilities and access. The projects must be authorized by either the Bureau of Land Management ("BLM") or the U.S. Department of Agriculture, Forest Service ("Forest Service") whenever the use of federal land is implicated.2
The National Environmental Policy Act ("NEPA") is well known to most natural resource practitioners after more than 35 years of litigation, rulemaking, and administrative decisions. Notwithstanding the extensive body of case law and agency decisions, however, there is still ample opportunity for unexpected developments to derail a project's schedule.
Lengthy appeals and litigation can disrupt the most carefully written schedule for the development of a lease or a mine, thus diverting the company funds to fighting an appeal rather than drilling the well or developing the mine. The process of guiding a project to its conclusion requires an understanding of the NEPA rules,3 agency NEPA policy, and the controversies that can convert the project from routine to the subject of headlines and litigation. This paper identifies procedural and substantive issues that can stall or even defeat a project. The substantive legal issues and related
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resource issues also shape the NEPA discussion and should be identified early in the planning process.
I. BASIC NEPA PRINCIPLES
The criteria used to evaluate an agency's compliance with NEPA provide important guideposts in avoiding NEPA pitfalls. Thus, a brief review of the basic terms and the legal standards applied to NEPA decisions is important to understanding how and when problems may arise.
In theory, NEPA is a procedural, rather than a substantive, statute. It requires federal agencies to follow certain procedures to assess the environmental effects of a proposed action but the law does not prescribe the terms and conditions of the agency decision.4 Of course, the NEPA process may change an outcome by requiring the agency to consider alternatives to the action, including alternatives that will have less environmental effect.
A. NEPA Documents and Terminology
A federal agency must comply with NEPA for each discretionary decision, whether it is a lease sale, mine plan of operations, or an application for permit to drill ("APD") by identifying and addressing the significant environmental effects (direct, indirect, and cumulative), which may arise as a result of the decision. An environmental impact statement ("EIS") must be written, if the project is assumed to have a significant environmental effect.5 NEPA describes the EIS as a detailed statement discussing the environmental impacts of the proposed action, a description of the direct and indirect effects, the unavoidable adverse environmental impacts and alternatives, the relation between the short-term uses and long-term productivity, and the irreversible and irretrievable commitment of resources.6 The preparation of an EIS is a lengthy, complicated, and expensive process.
For projects that may not have a significant environmental effect, the agency writes an environmental assessment ("EA"), a concise statement of the project and description of its expected
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environmental effects, and any mitigation measures that would support a `finding of no significant impact' or FONSI.7 This document is generally shorter and takes less time and money to prepare than an EIS. For time and cost-sensitive projects, it is increasingly important that the project be designed to meet the "finding of no significant environmental impact."8
The agency can avoid the preparation of an EIS or EA for each project if the action is known to have no significant environmental effects (categorical exclusion) or if the environmental effects have already been analyzed in other NEPA documents (tiering). Actions that are presumed to have no significant environmental impact are categorically excluded, since neither an EA or EIS is necessary.9 The CEQ rules direct each agency to prepare a list of actions that are categorically excluded.10
In many instances, the environmental effects of development, for oil and gas drilling or road construction, are well known based on previous NEPA documents and any related studies. In these situations, the agency can rely on EIS or EA documents prepared to evaluate future mineral development or as part of the approval for an earlier agency action that addressed the environmental effects of the proposed development. This incorporation of other NEPA documents is called tiering.11 BLM calls this procedure a Determination of NEPA Adequacy ("DNA") and has adopted
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a checklist that the field offices follow to identify and evaluate how the existing NEPA documents deal with the environmental effects of the proposed action.12 The categorical exclusion or DNA may include terms and conditions to mitigate the specific effects.
In addition to the NEPA procedures, both the Forest Service and BLM must also find that the action conforms to the land use plan.13 Thus, the analysis will also include a finding of consistency with the land use decisions previously made.
When the project is assessed in an EIS, NEPA requires that the agency identify and discuss possible mitigation measures,14 but NEPA does not require the agency to change the project to reduce the environmental effects.15 In theory, the agency is free to ignore environmental impacts
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(absent some other statutory obligation) so long as it identifies and analyzes them. If the agency approves a project through an EA rather than an EIS, however, the agency is often obligated to impose additional mitigation measures to address and limit the environmental impact of the project, to ensure that the total environmental effects of the project remain below the level of significance and support the finding of no significant impact.16
B. Judicial Review of NEPA Decisions
The standards and criteria used to review agency NEPA decisions provide important clues to immunize the NEPA decision from a successful challenge. The federal courts will review a procedural NEPA decision under the "arbitrary and capricious" standard, the same standard for judicial review of any other agency action under the Administrative Procedure Act ("APA").17 Even though the Supreme Court held that the appropriate standard of review for NEPA compliance is the arbitrary and capricious standard, most courts still discuss whether the agency decision is reasonable using the "rule of reason" standard.18 The Supreme Court in Marsh noted that there was little practical difference between a "rule of reason" and "arbitrary and capricious" standards of review.19 In 2004, the Court blurred the differences further when it wrote: "Where the preparation of an EIS would serve `no purpose' in light of NEPA's regulatory scheme as a whole, no rule of reason worthy of that title would require an agency to prepare an EIS."20 The Supreme Court decision in Marsh was originally thought to give deference to the agency's NEPA decision process by requiring evidence that the decision was arbitrary rather than unreasonable. Instead, it appears that these terms
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are used almost interchangeably, although the decisions also show that if the agency follows the procedures, the courts will generally not second guess the factual conclusions.
Other courts and, more importantly, the Interior Board of Land Appeals ("IBLA"),21 ask whether the agency took a "hard look" at the environmental effects.22 The "hard look" analysis asks whether the agency considered all of the significant environmental effects, carefully reviewed the environmental problems, identified the important environmental concerns, and made a reasonable decision based on the...
