HOW WILL NEPA CLIMATE GUIDANCE IMPACT CCS PROJECTS?

Tamar Hallerman
GHG Monitor
3/22/13

The Obama Administration is expected to soon finalize guidance directing all federal agencies to incorporate the impact of major projects on climate change under the National Environmental Policy Act, but observers appear split on how such a decision could affect carbon capture and storage projects. Bloomberg first reported March 15 that the guidance, proposed by the White House’s Council on Environmental Quality (CEQ) in 2010, could come within the next few weeks. If similar to CEQ’s initial draft, the final guidance would require agencies to quantify each project’s projected emissions, as well as the potential impacts of climate change on a planned project, said Dina Kruger, president of the consulting firm Kruger Environmental Strategies who previously led the Environmental Protection Agency’s climate office.

The guidance would further standardize a consideration process that has varied greatly across federal agencies, according to Kruger, who was consulted in the early stages of when the guidance was being compiled. In the years since NEPA came into effect in 1970, while some departments independently decided to incorporate climate change into their environmental impact statements, others largely ignored the issue. “What CEQ was seeing was that some agencies were basically writing a paragraph saying that they weren’t sure that climate change is happening, while other agencies were thinking that they needed to get into climate modeling,” she said. “The goal with the guidance is to try and get some consistency and to find a sweet spot between the two approaches.”

Stakeholders Anticipate Different Impacts

In interviews with GHG Monitor this week, stakeholders and observers remained split about the impact of such a decision on the regulatory approval of large CCS projects. “If the final guidance is similar to what CEQ proposed, I don’t see that guidance having a major impact on CCS projects,” Kruger said. “DOE has been doing environmental impact statements for the CCS sites that it’s been funding and there are already a number of them that have gone through the process successfully and without much drama.” Kruger added that while the extra formal criteria could take “some” additional time, she does not expect the guidance to dramatically slow the permitting process or preclude development for demonstration projects.

But Frederick Eames, a partner at the legal and lobbying firm Hunton & Williams, said that any extra guidance or regulatory steps from the federal government have the potential to “complicate” already fragile CCS demos. “It’s hard enough as it is to build projects that are trying to make people’s lives better without having to go through any additional steps,” said Eames, who also heads the CCS Alliance, an industry coalition aimed at lobbying the government on risk management and regulatory issues related to CCS. “If you have a very amorphous process, almost anything could come out of it, so that would be a big concern … by adding more straws to the camel’s back, eventually it just breaks.”

Battelle Senior Research Leader Neeraj Gupta, who recently completed the NEPA process for CO2 injection work in his role as lead of the Midwest Regional Carbon Sequestration Partnership, said the guidance “could add another layer of complexity to future NEPA assessments.” “However, the regional carbon sequestration projects are especially focused on climate change mitigation through CCUS. So, I would hope that this will be seen as a positive aspect during any NEPA reviews,” Gupta said in an e-mail.

Obama Vows Action in State of the Union

The news comes as the Obama Administration moves to make climate change a major component of its second term after largely neglecting the issue following the demise of cap-and-trade legislation in Congress in 2010. During his most recent State of the Union address, Obama told a Congress that if it does not “act soon to protect future generations [against the threat of climate change], I will.” “I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change and speed the transition to more sustainable sources of energy,” Obama said Feb. 12. The news also comes a month after the Government Accountability Office added climate change to its government high risk list for fiscal exposure for the first time. GAO said the government is “not well positioned” to address the fiscal exposure that could occur as a result of climate change.