CEI Comments on Biden Administration Proposal to Revise National Environmental Policy Act (NEPA) Implementing Regulations.

Comments of the Competitive Enterprise Institute (CEI)

Thank you for the opportunity to comment on the Council on Environmental Quality’s (CEQ) proposal to modify certain aspects of its regulations implementing the National Environmental Policy Act (NEPA).[1] CEI’s comments focus on CEQ’s proposed revisions to its July 2020 implementing regulations[2] defining “environmental effects.” Specifically,[3] CEQ proposes to:

• Remove language defining “effects” as impacts “that are reasonably foreseeable and have a reasonably close causal relationship” to agency actions.

• Remove language stating that a “but for” causal relationship is insufficient to make an agency responsible for a particular effect under NEPA.

• Remove language which states that agencies generally should not consider effects that are remote in time, geographically remote, or the product of a lengthy causal chain; and should not consider effects the agency has no ability to prevent due to its limited statutory authority.

• Restore the terms ‘‘direct,” “indirect,” and “cumulative” to the definition of “effects” agencies must consider.

CEI advises CEQ not to revise the 2020 Rule’s language on “effects.” CEQ’s proposed changes will increase the political pressure on permitting agencies to approve or reject infrastructure projects based on their greenhouse gas (GHG) emissions. NEPA was never designed to be a climate policy framework, and Congress did not subsequently revise the statute to make it so.

NEPA is centrally concerned with major agency actions that “significantly affect [] the quality of the human environment.”[4] Even the GHG emissions of the largest projects have no discernible, traceable, or verifiable impacts on the quality of the human environment.

Encouraging agencies and stakeholders to fret over projects’ unknowable climate change effects will only serve to confuse the public, feed the hubris of those who believe government exists to bankrupt companies they don’t like, and mobilize opposition to beneficial economic development.

This comment letter has three main parts. Part I explains why NEPA is not a climate policy framework, and how the 2020 Rule’s “effects” definitions encourage permitting agencies to maintain a degree of balance and independence in a politically charged environment. Part II applies the analysis in Part I to specific claims in CEQ’s October 2021 proposed rule. Part III states our conclusions.

Part I: NEPA Is Not a Climate Policy Framework

The theory of anthropogenic global warming holds that cumulative global GHG emissions over decades to centuries will have climate change effects. It does not postulate that incremental emissions from individual sources have identifiable climate impacts. Incremental emissions attributable to specific projects are nowhere near large enough to have foreseeable, traceable, or verifiable climate effects. Even the GHG emissions of the largest project cannot “significantly affect [] the human environment.”

Consequently, NEPA review of individual project-related GHG emissions serves no bona fide environmental, scientific, or economic purpose. Absent express directives in other statutes, GHG emissions have no proper role in NEPA-based project reviews and permitting decisions.

Although CEQ may balk at those conclusions, it has long acknowledged their premise—the climatological insignificance of project-related GHG emissions.

Section 1: Illusory Thresholds of Meaningfulness and Significance

Both the Obama and Trump CEQs acknowledged that individual projects do not discernibly influence global climate change, beginning with CEQ’s 2010 Draft NEPA Guidance on Greenhouse Gas Emissions and Climate Change Effects. The document noted a stark difference between GHG sources and other sources: “From a quantitative perspective, there are no dominating sources and fewer sources that would even be close to dominating total GHG emissions.”[5] Which of the large universe of non-dominating sources should be covered?

The 2010 Draft GHG Guidance proposed that 25,000 tons or more of annual carbon dioxide-equivalent (CO₂e) emissions could provide “an indicator that a quantitative and qualitative assessment may be meaningful to decision makers and the public.”[6] However, CEQ immediately clarified that it was not making a claim about climatic impact: “CEQ does not propose this as an indicator of a threshold of significant effects, but rather as an indicator of a minimum level of GHG emissions that may warrant some description in the appropriate NEPA analysis for agency actions involving direct emissions of GHGs.”[7]

The 2010 Draft Guidance further stated: “CEQ does not propose this [25,000 ton] reference point as an indicator of a level of GHG emissions that may significantly affect the quality of the human environment.” Lest anyone mistakenly infer climatological significance, CEQ reiterated: “However, it is not currently useful for the NEPA analysis to attempt to link [proposed projects to] specific climatological changes, as such direct linkage is difficult to isolate and to understand.”[8] 

Stakeholders were confused. How can NEPA analysis of a project emitting 25,000 tons of greenhouse gases per year be “meaningful” if that quantity of emissions is not environmentally significant?[9]

CEQ’s 2014 Draft GHG Guidance devoted several pages to the issue without resolving it. CEQ again proposed a 25,000 metric ton reference point while disclaiming an intent to make a “determination of significance.”[10] Rather, the significance of an agency action depends on multiple factors, such as “the degree to which the proposal affects public health or safety, the degree to which its effects on the quality of the human environment are likely to be highly controversial, and the degree to which its possible effects on the human environment are highly uncertain or involve unique unknown risks.”[11]

However, that restates rather than resolves the perplexity. The degree to which GHG emissions from an individual project affect public health and safety is for all practical purposes zero. The climatic insignificance of individual projects is non-controversial and highly certain. Greenhouse gas emissions from individual projects are not suspected of posing unique unknown risks.

After wrestling with comments ranging from ‘no project-level emissions are big enough to quantify’ to ‘no project-level emissions are too small to quantify,’ CEQ judged that a 25,000-ton disclosure threshold is “1) low enough to pull in the majority of large stationary sources of greenhouse gas emissions, but also 2) high enough to limit the number of sources covered that state and local air pollution permitting agencies could feasibly handle.”[12] In other words, administrative convenience rather than climatic significance would determine the cutoff.

Then, two years later, the final 2016 GHG guidance silently dropped the 25,000-ton threshold. The whole topic disappeared without a word of explanation or comment. Perhaps CEQ just gave up trying to explain how quantifying emissions that are not climatically “significant” could still be “meaningful.”[13]

Section 2: False Proxies

Although the climatological insignificance of project-related emissions has been Council’s consistent view since 2010, CEQ in 2014 continued to propose and in 2016 required agencies to quantify facility-level GHG emissions, and use that information to evaluate proposed actions, alternatives, and mitigation measures.

Based on what scientific rationale? CEQ argued that “projection of a proposed action’s direct and reasonably foreseeable indirect GHG emissions may be used as a proxy for assessing potential climate effects.”[14] However, that is tantamount to saying, ‘Let’s pretend we know what we don’t know and regulate as if we did know.’

A proxy voter can cast a real, countable, ballot for an absentee voter. Data from tree rings, ice cores, fossil pollen, ocean sediments, and corals can be calibrated to instrumental data and then serve (albeit imperfectly) as proxies for climatic conditions in pre-industrial times. In contrast, no testable, measurable, or otherwise observable relationship exists between project-level greenhouse gas emissions and climate change effects. To call the former a “proxy” for the latter in an ostensibly scientific context is an abuse of language.  

Section 3: Weaponizing NEPA

The Obama CEQ’s actual rationale for treating project-related emissions as climate effects for regulatory purposes appears to be political. Requiring agencies (hence also project applicants) to quantify the “direct and indirect” GHG emissions of proposed projects injects climate concerns into the daily routines of myriad public and private actors involved in building, upgrading, and reviewing energy infrastructure. It is a “consciousness raising” exercise. The “climate benefit” consists in forcing business leaders and agency heads to “think globally” whenever they act locally.

CEQ’s 2016 GHG Guidance claimed that incorporating GHG emissions into NEPA reviews would lead to “better decisions.”[15] The Keystone XL Pipeline controversy shows that featuring climate concerns leads to irrational decisions.

The Keystone XL Pipeline (KXL) is perhaps the largest project to receive NEPA scrutiny for greenhouse gases. Even under the unrealistic assumptions that the KXL runs near full capacity (800,000 barrels per day) year-round and each barrel is additional oil produced solely to meet demand induced by the pipeline, the project would add less than 0.01°C of warming to global temperatures between now and 2100.[16] That is well below the 0.08°C margin of error for estimating average annual global temperature.[17]

The pipeline’s vanishingly small and unverifiable contribution to global warming in 2100 would have no discernible impact on weather patterns, crop yields, polar bear populations, or any other environmental condition people care about. Contrary to activist and media spin, the KXL is climatologically irrelevant.

NEPA-based reviews of the pipeline’s climate change implications continued over a 10-year period, from July 2008[18] to June 2019.[19] The State Department’s market analysis repeatedly concluded that the KXL is the ‘climate friendly’ option. If permission to build the KXL were denied, U.S. refiners would simply import Canadian crude by less energy-efficient modes (rail, barges, and smaller pipelines). Blocking the KXL would increase net CO₂ emissions by 28 to 42 percent relative to the pipeline approval scenario.[20]

Note, too, that the KXL’s potential economic benefits hugely exceed the undetectably small potential contribution to climate change. For example, during its 17 months of construction, the southern leg of the KXL (the “Gulf Coast Pipeline”) injected an estimated $5.7 billion into the Texas and Oklahoma economies, created thousands of jobs, and generated tens of millions of dollars in state and local tax revenues.[21]

The issue before the State Department was whether building the KXL would be in the national interest. That should have been a no-brainer. The pipeline is climatologically insignificant, it is the low-emission alternative, Canada is America’s closest ally and trading partner, importing Canadian crude reduces U.S. reliance on OPEC, and pipelines are safer and less vulnerable to oil spills than crude-by-rail. Yet, after 10-years of NEPA-based review, President Obama killed the project.[22] Although the pointless and protracted NEPA proceeding ill-served the national interest, it helped the White House and its allies organize years of protests, recruit thousands of activists, and spread fear and loathing of “dirty fuels.”

Given that history, the Trump CEQ developed regulatory language to mitigate NEPA’s politicization and help agencies focus on the real risks and benefits of infrastructure projects.

Read the full document as a PDF.