Aviation and Airport Development Law : Aviation Lawyer & Attorney : Chevalier Allen & Lichman Law Firm : Airport Development, Environmental Law

The draft guidance explains how Federal agencies should analyze the environmental impacts of greenhouse gas emissions and climate change when they describe the environmental impacts of a proposed action under NEPA.  It provides practical tools for agency reporting, including a presumptive threshold of 25,000 metric tons of carbon dioxide equivalent emissions from the proposed action to trigger a quantitative analysis, and instructs agencies how to assess the effects of climate change on the proposed action and their design.  The draft guidance does not apply to land and resource management actions and does not propose to regulate greenhouse gases. 

While some courts have already held that climate change and greenhouse gas emissions must be considered in the NEPA process. See, “Greenhouse Gases Should Be Considered in All EISs and EAs;” see also, Center for Biological Diversity v. NHTSA, 508 F.3d 522 (9th Cir. 2008), Friends of the Earth, Inc. v. Mosbacher, 488 F.Supp.2d 889 (N.D. Cal. 2007); Border Power Plant Working Group v. Department of Energy, 260 F.Supp.2d 997 (S.D. Cal. 2003); and Mid-States Coalition for Progress v. Surface Transportation Board, 345 F.3d 520 (8^th Cir. 2003). To these courts, these findings indicate that emission of greenhouse gases substantially contribute to climate change, and climate change is expected to result in widespread adverse environmental effects. Therefore, it should be mentioned in the EIS.

What the draft guidance does explain, however, that is not present in the case law are the “practical tools for agency reporting.” That is, it sets a de minimis level of 25,000 metric tons of CO2e before the proposed action would trigger quantitative analysis, which may eliminate many federal projects from the guidance.

The public comment period for this draft Guidance is 90 days. Comments may be submitted electronically from the CEQ’s website: http://www.whitehouse.gov/administration/eop/ceq/initiatives/nepa/submit?topic=Consideration%20of%20Greenhouse%20Gases. In addition, at the end of the draft Guidance, the CEQ asks several questions that it would like to have addressed by the public:

1. How should NEPA documents regarding long-range energy and resource management programs assess GHG emissions and climate change impacts?

2. What should be included in specific NEPA guidance for projects applicable to the federal land management agencies?

3. What should be included in specific NEPA guidance for land management planning applicable to the federal land management agencies?

4. Should CEQ recommend any particular protocols for assessing land management practices and their effect on carbon release and sequestration?

5. How should uncertainties associated with climate change projections and species and ecosystem responses be addressed in protocols for assessing land management practices?

6. How should NEPA analyses be tailored to address the beneficial effects on GHG emissions of Federal land and resource management actions?

7. Should CEQ provide guidance to agencies on determining whether GHG emissions are “significant” for NEPA purposes. At what level should GHG emissions be considered to have significant cumulative effects. In this context, commenters may wish to consider the Supreme Court decision in Massachusetts v. EPA, 549 U.S. 497, 524 (2007).

Draft Guidance on the Appropriateness of “Findings of No Significant Impact” Tightens Monitoring and Reporting Restrictions

When Finding of No Significant Impact (FONSI) is issued for a Federal action, the need for a detailed Environmental Impact Statement is obviated. Many Federal agencies attempt to mitigate the environmental impact of their actions as part of the NEPA process so that they can reach a FONSI and not be required to draft an EIS. However, in many cases, the follow-up on mitigation activities promised is lacking. Thus, the draft guidance seeks to clarify that although the environmental impacts of a proposed action may be mitigated to the point when the agency make a FONSI determination, the agency must make the mitigation requirements public and perform the necessary monitoring and reporting.

Revised Draft Guidance Clarifying Use of Categorical Exclusions

Many Federal actions do not have significant effects on the environment.  When these actions fall into broad categories of activities, agencies may apply a “categorical exclusion” from further NEPA review.  The CEQ originally released a draft guidance to clarify and promote the use of categorical exclusions on September 17, 2006. 71 Fed.Reg. 54816 (Sept. 17, 2006). This action would revise that draft guidance and clarify the rules for categorical exclusions and ensures that there is a concise public record when agencies apply them.  While CEQ previously has sought public comments on this matter, this guidance provides additional clarifications, so it will seek additional public comment for 45 days.

When the light-duty vehicle rule is finalized, the GHGs subject to regulation under that rule (i.e., the six greenhouse gases identified in the Endangerment Finding) would become immediately subject to regulation under the PSD program, meaning that from that point forward, prior to constructing any new major source or major modifications that would increase GHGs, a source owner would need to apply for, and a permitting authority would need to issue, a permit under the PSD program that addresses these increases. Similarly, for the Title V operating permit program, it would mean that any new or existing source exceeding the major source applicability level for those regulated GHGs, if it did not have a title V permit already, would have 1 year to submit a title V permit application.

Recognizing this incidental effect, the EPA proposed a “tailoring rule” on September 30, 2009.  In the Tailoring Rule, EPA proposed to set a new threshold of 25,000 metric tons of GHG emissions to define when Clean Air Act permits under the New Source Review and Title V operating permits programs would be required.  The proposed thresholds would “tailor” these permit programs to limit which facilities would be required to obtain permits and would cover nearly 70 percent of the nation’s largest stationary source GHG emitters—including power plants, refineries, and cement production facilities, while shielding small businesses and farms from permitting requirements. Thus, businesses that emit less than 25,000 metric tons of GHG and businesses that currently have a Title V operating permit will not, for the most part, be covered by the Tailoring Rule.

Should Businesses Make Voluntary Reductions in Greenhouse Gas Emissions?

So what should companies do in the meantime?

Many businesses have been evaluating their carbon footprint over the past few years (particularly since the Massachusetts v. EPA decision) and have been looking at ways to reduce GHG emissions. For many companies energy is a cost, and in some cases, greenhouse gases may be a lost resource.  By increasing efficiency, costs are reduced and the business operates better.  For example, the aviation industry loves to trumpet how it is getting “greener,” because it is reducing GHG emissions.  However, that greening has come about by reducing fuel consumption, which became a necessity when fuel prices spiked because fuel costs represent a huge percentage of the aviation industry’s costs.  The result?  Increased fuel efficiency=fewer emissions=reduction in emissions of GHG, with a reduction in fuel costs to top it off.  Moreover, there are ways that would reduce GHG emissions and accrue tax benefits, such as cogeneration or combined heating power.  These types of programs that reduce GHG emissions and accrue a direct benefit to the company’s bottom line should be pursued regardless of the regulatory environment.  The caveat would be that businesses should check in with their environmental law attorney to see if there are any carbon banks or carbon credit systems set up that they could participate in order to get “credit” for any reduction in GHG emissions.

Outside of those programs, however, caution should be taken with respect to taking on projects that would reduce GHG emissions, but represent a net cost to the business.  Many businesses are taking a “wait and see” attitude, relying on their environmental law attorneys to monitor developments, report to them about those developments and assist them in develop strategies and manage the risk.  It is only when the regulatory regime is in place that businesses can assess what changes need to be made to their processes and to their equipment in order to comply with the regulations.  Particularly when the costs to comply are substantial, businesses are going to want to wait until the requirements become fixed before they undertake a far-reaching GHG emission reduction program.

Congressional Outlook:  Who Knows What They Are Up To?

The progress in Congress on new Climate Change legislation is an additional reason for businesses to sit tight.  Since Monday’s Endangerment Finding, most business and industry groups have stated that they would much prefer either one of the bills currently being considered in Congress to regulation by the EPA.  The primary reason for this is the fact that both the Boxer-Kerry bill and the Waxman-Markey bill have “cap-and-trade” provisions, which, although excoriated by the Republicans, are much better for businesses than an EPA-centric “command-and-control” regulatory regime.  A good example of this change of heart is Sen. Mark Pryor (D.Ark.), who was reported as being more willing to consider a cap-and-trade proposal now that the EPA has issued its endangerment finding.

At the same time, the failure to come up with a bill for the President’s approval prior to the Copenhagen Climate Change Conference, the release of the hacked e-mails from East Anglia University’s Climate Research Unit, and the inexorable march of time have led to the Senate going back to the beginning.  Indeed, Sens. Kerry, Lieberman and Graham have put forth a new outline for Climate Change legislation. Thus, it is unlikely that Congress will have anything to offer until after the EPA has finalized the light-duty vehicle regulations, and perhaps after the Tailoring Rule is finalized.

Conclusion: Now Is The Time for Self-Assessment

The upshot of the Endangerment Finding and, for that matter, EPA’s regulation of GHG emissions, is that now would be a good time for businesses to assess just how much GHG emissions they produce.  The potential impact of EPA’s regulation of GHG emissions will be felt by companies that have not been traditionally required to examine their exposure to Clean Air Act regulation.  To state that there is not much clarity as which companies will be affected by the EPA’s Tailoring Rule, for example, is an understatement.  Even the EPA recognizes in its rule that it will need to fine tune it over the years so that does what it is supposed to do.  Thus, the more businesses know about their operations and the amount of GHG they emit, they better they will be able to assess their place in just about any scenario that may come up.

Table of Emission Source Categories Affected.  For a more complete list, please see Table 1 "Examples of Affected Entities by Category" in the Preamble to the rule.

• Captain Mary Ann Schaffer, Chairperson, Air Lines Pilots Association;
• Mark M. Reis, Managing Director, Seattle-Tacoma International Airport;
• Richard L. Altman, Executive Director, Commercial Aviation Alternative Fuels Initiative; and
• Opening Remarks of Subcommittee Chair, Rep. Jerry F. Costello.

1. aircraft engines “represent an increasing and potent source of greenhouse gas emissions due in part to the unprecedented growth in air travel;”
   
2. aircraft in the U.S. are responsible for almost half the carbon dioxide emitted from aircraft worldwide;
   
3. “Recent reports show that at altitude, aircraft emissions have a greater impact on global warming than previously understood.” 

EPA has historically followed the approach of the International Civil Aviation Organization, he said, adding that the U.S. Court of Appeals for the D.C. Circuit upheld this approach as reasonable. Meyers also said international consistency is beneficial as well since aircraft and aircraft engines are international commodities.

Noting that there has been “considerable study” of GHG emissions from aviation, Meyers said the ANPRM is the “next step in our process.” EPA will solicit public comment on potential technological controls for aircraft and engines and operational measures to reduce emissions. EPA also will seek specifics on what is feasible near- and long-term and on relevant cost and safety information. EPA said it planned to coordinate with FAA in response to the petitions.

Rep. Edward Markey (D-Mass.), chairman of the select committee, warned that the panel “cannot let aviation fly under the radar. The impact of these emissions cannot be ignored.” Markey noted that aviation has reduced emissions through technology, but said he also believes the growing number of flights will increase emissions. “Aviation must answer for the heat-trappings of their own success,” Markey said.

He pointed to petitions from various organizations asking EPA to regulate aviation GHG emissions, and said Congress already is considering a cap and trade system. Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.) have introduced such legislation, which would tax fuel at the producer level. Markey also noted environmental efforts in Europe and said, “As local governments and other nations move to limit the impact of aviation on the environment, Congress cannot linger in a holding pattern.”

Meyers, however, expressed concern about European caps and trade proposals. The European Commission proposed to include carbon dioxide emissions in the European Union Emissions Trading Scheme for commercial flights arriving or departing European Union airports, including U.S.-registered aircraft. The proposal would cap carbon dioxide emissions at the average emission levels between 2004-2006. The proposal would exclude flights from non-European Union countries that have equivalent GHG mitigation measures in place.

“The U.S. and other nations have expressed serious concern about the legality of the proposed EU legislation in the context of both the Chicago Convention of 1944, which established the International Civil Aviation Organization, and bilateral air services agreements,” he said.

FAA shares these concerns, said Daniel Elwell, assistant administrator of FAA’s Office of Aviation Policy, Planning and Environment. “There appears to be a disconnect between perception and performance on aviation emissions, at least in the U.S.,” he said, adding, “In some quarters there is a perception that aviation greenhouse gas emissions are growing out of control and that it needs to be reigned in by emissions caps and taxes.” But carbon dioxide emissions in the U.S. have declined by 4 percent between 2000 and 2006 while emissions in Europe have increased by 30 percent during the same period. Commercial jet aircraft fuel efficiency has improved by 70 percent in the last 40 years, Elwell said.

He pointed to efforts to improve technology and accelerate air traffic management improvements as keys in helping to lower emissions. Alternative fuels also will play a role, he said, as could market-based measures, such as tax incentives, emissions trading or carbon offsets.