The U.S. Council on Environmental Quality (CEQ) published a Final Rule regarding implementing regulations of the National Environmental Policy Act (NEPA) on Wednesday, April 20. As anticipated, the CEQ’s final version is nearly identical to the earlier Proposed Rule and revises three separate NEPA provisions that CEQ identified as posing significant near-term interpretation or implementation challenges for federal agencies. These three provisions include purpose and need, 40 C.F.R. § 1502.13; agency NEPA procedures, 40 C.F.R. § 1507.3; and the definition of “effects” or “impacts.” Ultimately, CEQ’s Final Rule abandons revisions the agency made to NEPA regulations in 2020 and returns certain aspects of NEPA review to the former approach. CEQ noted that this revision is the first of two phases, so additional NEPA regulatory revisions are expected later this year. (more…)
On April 6, 2022, the U.S. Environmental Protection Agency (EPA) is scheduled to publish its proposed Federal Implementation Plan Addressing Ozone Transport for the 2015 Ozone National Ambient Air Quality Standards (NAAQS), otherwise known as the latest iteration of EPA’s Cross-State Air Pollution Rule or “Good Neighbor” Plan. The proposal would subject 26 upwind states to the “good neighbor” or “interstate transport” provision of the Clean Air Act because EPA is proposing to find that nitrogen oxide (NOx) emissions, which are a precursor to ozone formation, from the upwind states significantly contribute to downwind states’ attaining and maintaining the 2015 ozone NAAQS.
The Federal Energy Regulatory Commission (FERC) announced on March 24, 2022, that it will delay enacting any changes to its existing policies on the authorization or certification of interstate natural gas pipeline infrastructure under Sections 3 and 7 of the Natural Gas Act. Two policy statements FERC issued on February 18, 2022, in Docket No. PL18-1 and Docket No. PL21-3 (collectively, the 2022 Certificate Policy Statements) have now been deemed “drafts” that are subject to further comment. Initial comments will be due on April 25, 2022, with reply comments due on May 25, 2022. One of the two policy statements, which had been deemed “interim” but given immediate legal effect on February 18 prior to being relabeled a “draft” on March 24, had an initial comment date of April 4, 2022, which has now been extended to the aforementioned dates. Sidley provided a detailed summary of the changes implemented in the 2022 Certificate Policy Statements in a prior client alert and Energy Brief. (more…)
Carbon capture, utilization, and sequestration (CCUS) projects are gaining momentum as an important pathway to achieving both private- and public-sector climate targets. This trend is expected to accelerate with recently authorized federal funding and administration announcements. At the same time, the value proposition for CCUS may be subject to change based on government policy priorities, permitting processes, and potential permanence challenges, among other factors. So what lies ahead for carbon capture? (more…)
Last week, the U.S. Environmental Protection Agency (EPA) took two actions related to mobile source emissions under the Clean Air Act that represent the agency’s continued focus on transportation, climate change, and environmental justice.
On March 7, 2022, EPA announced newly proposed emission standards for heavy-duty vehicles and engines, which would apply starting in model year 2027. The proposed standards would reduce allowed emissions of nitrogen oxides from heavy-duty gasoline and diesel engines and set more stringent greenhouse gas standards for certain commercial vehicle categories. Beyond numerical reductions in emissions, the rule also indicates EPA’s broader shift in focus to environmental justice. (more…)
In February 2022, the U.S. Department of the Treasury Federal Insurance Office (FIO) announced that it would be joining the Network of Central Banks and Supervisors for Greening the Financial System. FIO intends to address climate-related financial risks and their effects on the insurance sector. (more…)
On Saturday, February 19, 2022, the United States appealed an injunction prohibiting federal agencies from adopting and relying on the interim Social Cost of Greenhouse Gas estimates established by the Interagency Working Group. (more…)
On February 18, 2022, the Federal Energy Regulatory Commission (“FERC”) announced for the first time that it will consider a proposed natural gas infrastructure project’s impact on climate change as part of its public interest determination under sections 3 and 7 of the Natural Gas Act (“NGA”). A proposed project’s environmental effects, including reasonably foreseeable greenhouse gas emissions that may be attributable to the project and the project’s impact on environmental justice communities, now will become part of FERC’s balancing test for whether a project is: (1) required by the public convenience and necessity (“PCN”) under NGA section 7; (2) or in the public interest under NGA section 3. FERC’s prior PCN policy prioritized economic factors to define public need. Environmental effects, while considered under the NGA, were addressed primarily under the National Environmental Policy Act (“NEPA”). (more…)
On February 11, 2022, Judge James Cain of the U.S. District Court for the Western District of Louisiana granted a motion for a preliminary injunction filed by Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Dakota, Texas, West Virginia, and Wyoming (Plaintiff States) to prohibit federal agencies from adopting and relying on the interim Social Cost of Greenhouse Gas (SC-GHG) estimates established by the Interagency Working Group (IWG). Executive Order 13990 mandated that IWG publish estimates of the monetized damages associated with incremental increases in greenhouse gas emissions. (more…)
Momentum on climate action is unstoppable. Investors, businesses, and the public are demanding policymakers get serious about reducing emissions. Legislation from the U.S. and EU offers challenges and incentives for businesses worldwide. How will these proposed laws impact companies, and importantly, can they deliver on the promise of making tangible progress in the fight against climate change? (more…)