NEPA and Natural Gas Development - Where Are The Feds Going?

Posted on April 12, 2010 by Reed Rubinstein

From David Mandelbaum, GT Philadelphia, and K.B. Battaglini, GT Houston.

Special interest groups have long relied on the National Environmental Policy Act of 1969 (NEPA) to delay or halt domestic oil and gas development.  Now, reversing decades of policy and practice, the federal government (e.g. the Department of Agriculture's Forest Service and the Department of Interior's Bureau of Land Management) seems to be playing along with the environmentalists' strategy.  The government apparently has determined to apply NEPA not only to the availability of federal lands for oil and gas development, but also to the grant of specific oil and gas leases and perhaps even for mere access to drill individual wells.  This new policy needlessly pits the government against mineral rights holders. Oddly, at a time when the country clearly needs different energy infrastructure and resources, the government is using NEPA to avoid engagement on the substantive questions and as a vehicle for delay. 

The evidence of a policy shift is clear.

All wells are subject to various state and federal environmental controls and substantive standards. The lawsuits and settlements noted above are not about whether those substantive standards or controls adequately protect the environment. Rather, they are lawsuits over whether and how many "environmental impact" studies must be performed prior to drilling a well.  This is irrational. 

We can keep on importing oil and burning coal for electricity, or we can change. Engagement and debate on whether domestic drilling and greater energy independence is, on balance, for good or ill is welcome.  Delay in engagement to perform "environmental impact studies" is just delay for its own sake, irrational, wasteful, and the opposite of change.
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Supreme Court To Trim NEPA?

Posted on February 9, 2010 by Reed Rubinstein

As we noted here, law suits by environmental groups, often asserting claims based on the National Environmental Policy Act (NEPA), are a major barrier to clean energy generation and transmission.  Thus, the U.S. Supreme Court's grant of certiori in the case of Monsanto v. Geertson, notwithstanding the Obama Administration's objection, may prove to be good news for utilities and for clean energy generation and transmission companies. In Geertson, the Court is considering whether NEPA claims are exempt from the general rule that a likelihood of irreparable harm must be shown to obtain an injunction, whether a district court may enjoin a NEPA violation without conducting an evidentiary hearing, and whether the lower court erred by affirming an injunction based on an arguably remote possibility of harm. 

Historically, the rule has been a NEPA violation, even without evidence of substantive environmental harm, generally triggers an injunction blocking project development.  In Winter v. Natural Resources Defense Council, 129 S. Ct. 365 (2008), the Court began to limit this rule, holding plaintiffs seeking injunctive relief under NEPA must in fact demonstrate that they are likely to suffer irreparable harm in the absence of the requested injunction, just as they would be required to do in any other case in which an injunctive remedy is requested.  Should the Court extend Winter and rule for Monsanto on any of the three issues presented, then special treatment for NEPA cases will cease and environmentalists' and others' ability to employ NEPA for blocking projects may be functionally terminated.  Clean energy companies and consumers stand to benefit a great deal from such a ruling.  

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