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06 July 2017

Stakeholders Assess the Effects of the Changing Mix of U.S. Energy Resources

In anticipation of the Department of Energy’s review of the nation’s power grid, stakeholder groups have recently published reports on the state of the U.S. power grid.  The reports add to the debate over what mix of energy resources are needed to sustain a stable, secure and reliable supply of electricity in the United States.

An April 14, 2017 memo from Energy Secretary Rick Perry directing the Energy Department to “explore critical issues central to protecting the long-term reliability of the electric grid” has focused the debate.  According to Secretary Perry, the 60-day review would assess whether federal policies have caused “the erosion of critical baseload resources.”  This includes an assessment of whether reduced coal-fired power generation due “in part from regulatory burdens introduced by previous administrations” has hurt the supply of baseload power and will “undercut the performance of the grid well into the future.”  (more…)

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06 July 2016

D.C. Circuit Upholds FERC’s Limited Impacts Analysis in NEPA Documents Addressing Greenhouse Gases

On June 28, 2016, the U.S. Court of Appeals for the District of Columbia Circuit issued a pair of decisions upholding the Federal Energy Regulatory Commission’s (FERC) treatment of indirect and cumulative effects of greenhouse gas (GHG) emissions under the National Environmental Policy Act (NEPA) when the agency approved the construction and operation of enhanced liquid natural gas terminals at sites in Louisiana and Texas. These cases provide direct insight into the treatment of GHG emissions in NEPA analyses and are arguably more limited than Revised Draft Guidance issued in 2014 by the Council on Environmental Quality (CEQ). As explained in a previous Sidley Update, CEQ’s revised draft guidance would conceivably expand the scope of NEPA analyses of GHG emissions beyond what is permitted by NEPA or by CEQ’s implementing regulations in several key respects. In particular, CEQ’s arguably broad inclusion of upstream and downstream emissions associated with the extraction and ultimate combustion of fossil fuels is inconsistent with CEQ’s regulations and with well-established judicial precedent that a closer causal connection between an agency action and alleged environmental impacts. In contrast, the D.C. Circuit’s decisions are consistent with prior case law and provide further reason for CEQ to issue final guidance that clarifies the limits on an agency’s ability to evaluate upstream and downstream emissions when conducting a NEPA analysis.

In each case, the court rejected claims by the Sierra Club that NEPA obligated FERC to study the alleged impacts of extracting and processing additional gas that might be produced to satisfy additional international demand arising from greater export capacity. Also, the court rejected Sierra Club’s assertion that FERC should have included, as part of its cumulative effects analysis, a nationwide study of existing or proposed liquid natural gas export terminals. These rulings are important because they provide a further delineation for when so-called upstream and downstream effects can be excluded from analysis as indirect or cumulative impacts in a NEPA study, especially in the energy field.

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