NEPA is the National Environmental Policy Act, which requires Federal agencies to assess the environmental impact of all major Federal actions significantly affecting the quality of the human environment. The White House Council on Environmental Quality (CEQ) has promulgated NEPA implementing regulations1 that are applicable to all agencies. DOE’s NEPA order2 and regulations3 and DOE’s NEPA Compliance Program[K1] contain implementing procedures that specifically address their programs. The NEPA Flow Chart nicely displays the steps in the NEPA process.
There are three types of review under NEPA: categorical exclusions (CX), environmental assessments (EA), and environmental impact statements (EIS). DOE’s NEPA implementing regulations specify actions that normally require an EIS or an EA, and actions that can be categorically excluded. DOE’s categories of actions identifying CXs, EAs, and EISs are listed in Appendices A, B, C, and D to Subpart D ofDOE’s NEPA rule. An EIS is a detailed analysis of actions presumed to have significant environmental impacts, and is followed by a Record of Decision (ROD). An EA is a concise public document that briefly provides sufficient evidence and analysis for determining whether to make a Finding of No Significant Impact (FONSI) or prepare an EIS. CX refers to a category of actions which do not individually or cumulatively have a significant effect on the human environment and do not require an EA or EIS. Examples of EAs and EISs can be found on the DOE Office of NEPA Policy and Compliance website athttp://www.gc.energy.gov/NEPA/DOE_NEPA_documents.htm.
1 40 CFR Parts 1500-1508 [http://ceq.hss.doe.gov/Nepa/regs/ceq/toc_ceq.htm]
2 DOE Order 451.1B
3 10 CFR Part 1021
DOE’s loan guarantees are considered major Federal actions and are subject to NEPA review. NEPA compliance is integrated into DOE’s Loan Guarantee Program Office (LGPO) decision-making procedures to ensure that environmental impacts are considered throughout the loan guarantee process. The NEPA review must be completed before a loan guarantee can be issued.
The Applicant is required to complete an Environmental Report as part of the loan application. This should be a comprehensive description and environmental effects analysis of their proposed project, the preparation of which may require the assistance of an environmental contractor, particularly for EIS-level projects. The information submitted should be based on guidance and requirements identified by the LGPO. Once a project sponsor has decided to submit an application, they are encouraged to contact the NEPA Division of the Loan Guarantee Program for preliminary guidance on what to include in their application. An example of such guidance is Attachment B to the 2008 solicitations for loan guarantee applications.
Upon commencement of due diligence and negotiations, the NEPA division of the LGPO will work with the applicant and contractor in an iterative process to ensure smooth and timely completion of the NEPA process. DOE in many cases, particularly for EISs, plans to develop the NEPA document using a contractor that will be paid by the Applicant under a “third party” arrangement as provided in CEQ regulations at 40 CFR 1506.5(c).
NEPA review begins once a project has been approved to begin due diligence, DOE has completed its formal technical and financial review and the applicant is invited to negotiate with the government. LGPO makes a determination of the level of NEPA review required then begins a thorough review of all resource areas and their potential environmental impacts, coordinates public involvement and ensures legal and regulatory requirements are met as they develop the NEPA document. LGPO will also work in an ongoing process with the Applicant or their contractor to obtain any additional environmental information needed for the project.
The average timeline for an environmental assessment is generally six to nine months, and for an environmental impact statement around 18-24 months. Since the EIS process involves significant environmental impacts it requires a far more rigorous and expanded review and public involvement process than for an EA. This includes the solicitation of public review and comment on the draft EIS, and holding related public meetings and hearings.
During the NEPA review process a number of other environmental laws require coordination and compliance. These include Section 107 of the Endangered Species Act, Section 404 of the Clean Water Act, Section 106 of the National Historic Preservation Act, in addition to various provisions of the Clean Air Act, several executive orders and other statutes. Issues such as environmental justice and socioeconomics, farmland protection, and Tribal concerns must also be taken into account. For many of these concerns it is imperative that collaboration take place as early as possible, for instance when notifying Tribes, State Historic Preservation Officers, or Fish and Wildlife Service of the proposed project. Since there are so many issues and requirements to consider during the NEPA review process, Applicants are encouraged to engage the LGPO’s NEPA team early on to discuss the project and related requirements so that a smooth process takes place.
What happens if another Federal agency has prepared, or is in the process of preparing a NEPA document for an Applicant’s project?
If another Federal agency is already preparing an EA or EIS, and if the schedule permits, DOE may seek to become a cooperating agency on the EIS or EA. Under this arrangement DOE works with the other Federal agency in preparing the NEPA document, resulting in a more efficient and timely review. Similarly, when DOE initiates a NEPA review for a proposed loan DOE will check to see if another Federal agency also has jurisdiction by law or special expertise concerning the project or it effects, and will consider inviting the agency to be a cooperating agency in the preparation of the NEPA document.
A number of states also require environmental reviews similar to NEPA. In some cases, the state review will precede the DOE NEPA process, and DOE will be able to use the results of the state process to develop information for the EA or EIS. In other cases, DOE will work with the applicant and the state to prepare a single document that meets both state and Federal requirements. However, NEPA regulations do not allow DOE to adopt a non-Federal environmental review document.
DOE’s regulations require that EAs be reviewed by host states and Tribes for a minimum of 14 days. In some cases DOE may also want to provide for public review and comment for EAs, and, in all cases, will make EAs available to anyone who requests. Draft EAs will also be posted on the DOE Loan Guarantee Program Office website. For EISs, DOE will always have a scoping meeting prior to the draft EIS (DEIS) and at least one public hearing after the DEIS is issued. DEISs must have a public comment period for a minimum of 45 days. DEIS are also reviewed by the U.S. Environmental Protection Agency (EPA) and other Federal agencies, and host state and Tribal governments. EPA also reviews final EISs (FEISs).
An EIS is required for Federal actions significantly affecting the quality of the human environment. In reaching a decision on the need for an EIS DOE first determines if the project is a type that is included in DOE’s classes of actions that normally require EISs as set out at Appendix D to Subpart D of 10 CFR Part 1021. If not, DOE may then prepare an EA to determine if a Finding of No Significant Impact can be made for the proposed action or if an EIS is required. Or DOE may decide that an EIS is needed without going through the EA process. In deciding on the need for an EIS, DOE considers the context and intensity of any potential impacts, including whether there are likely to be any significant environmental impacts that cannot be mitigated. Factors DOE may consider include the following:
- The project would significantly affect public health or safety;
- There are unique characteristics in the geographic area of the project, such as park lands, historic or cultural resources, prime farmlands, wetlands, wild and scenic rivers, or ecologically critical areas that would be affected by the project;
- There is any controversy over the degree of environmental effects of the project;
- The project presents unique or unknown environmental risks;
- The project sets a precedent for future actions that are likely to have significant environmental impacts;
- The action is related to other actions which, taken together, could have significant cumulative impacts;
- The project adversely affects any sites, structures, etc., listed in or eligible for listing in the National Register of Historic Places;
- The project adversely affects an endangered or threatened species or its habitat that have been determined to be critical under the Endangered Species Act;
- The project threatens a violation of Federal, state, or local laws or requirements imposed for the protection of the environment;
- The project would have a disproportionate and adverse impact on minority or low-income populations.
There are a number of companies and consultants that specialize in NEPA work. Information about companies and consultants can often be obtained from professional organizations, architectural and engineering firms, and law firms. Information about companies and consultants that have prepared environmental documents for Federal agencies is generally listed in Federal EISs or EAs, many of which are available on the Internet. Although DOE cannot recommend consultants or companies for NEPA work, in early 2009 DOE pre-qualified several contracto teams for NEPA support services to DOE Program and Field Offices. The names of these contractor teams are available on DOE’s Office of NEPA Policy and Compliance website at http://energy.gov/sites/prod/files/nepapub/nepa_documents/RedDont/NEPA-C....
How will a project be affected if an applicant begins work on the project site prior to the completion of NEPA review?
The National Environmental Policy Act (NEPA) requires Federal agencies to consider the potential environmental impacts of their proposed actions. NEPA review must be completed before a loan guarantee can be issued.The NEPA review process begins after the project has been accepted into the due diligence phase. The applicant should consult with DOE before doing any work on the project site (beyond preliminary design activities) so that the NEPA review and issuance of the loan guarantee is not put at risk. This is because such work might cause an adverse environmental impact or limit the choice of reasonable alternatives, which can put at risk the NEPA review and thus the issuance of the loan guarantee. While DOE cannot control what an applicant does with its own funds, the fact that an applicant has started work does not create any obligation on the part of DOE to issue a loan guarantee.