Environmental Compliance

The National Environmental Policy Act (NEPA) is a law that requires Federal agencies to review and consider the environmental effects of their actions (such as the decision to issue a loan or a loan guarantee) and make the public aware of the agency’s decision-making process. NEPA is often referred to as an “umbrella law” because the results, decisions, agreements, and approvals associated with other environmental laws, regulations, and executive orders are incorporated into the NEPA review and documentation.

There are three primary levels of environmental review under NEPA: Categorical Exclusions (CX), Environmental Assessments (EA), and Environmental Impact Statements (EIS).

• CX refers to a category of actions which do not individually or cumulatively have a significant effect on the human environment. A full list of DOE’s CXs can be found in Appendices A and B to Subpart D of 10 Code of Federal Regulations (CFR) part 1021. Examples of CXs related to LPO projects can be found here.
• 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. Examples of EAs related to LPO projects can be found here.
• An EIS is a detailed analysis of actions presumed to have significant environmental impacts and is followed by a Record of Decision (ROD). An EIS is a public document that provides an analysis of significant environmental impacts and reasonable alternatives.

The NEPA Flow Chart displays the steps in the NEPA process, which vary depending on the level of review needed for a proposed project.

In addition to NEPA, LPO is required to comply with other environmental laws and requirements, such as the Endangered Species Act and the National Historic Preservation Act. The Endangered Species Act requires that DOE assess the impact of proposed actions on federally listed threatened and endangered species and their critical habitats. DOE must consult with the U.S. Fish and Wildlife Service if endangered species are affected by a project. The National Historic Preservation Act requires that DOE assess the effects of proposed actions on historic and archeological resources and sites of religious and cultural significance to Tribes. DOE must consult with state historic preservation officials and Tribes to determine if an action adversely affects any historic properties.

Other Federal laws, regulations, and Executive Orders concerning wetlands and floodplains may require consultation with the U.S. Army Corps of Engineers or the Federal Emergency Management Agency. Both federal and private projects are subject to other laws, such as the Clean Air Act, Clean Water Act, and hazardous waste management laws.

Executive Order 13175, Consultation and Coordination With Indian Tribal Governments, and DOE Order 144.1, require consultation with Indian Tribal Governments prior to taking any action with potential impact upon American Indian and Alaska Native nations.

Failure to comply with environmental laws, executive orders, and requirements could result in a determination that DOE has not met the requirements, which could jeopardize DOE’s ability to issue a loan or loan guarantee.

LPO typically initiates the environmental review process when an Applicant has been invited into due diligence, and it must be completed before a loan or loan guarantee is issued. Several factors influence the timeframe for completing LPO’s environmental review process, including the complexity of the project and the determined level of environmental review. A CX typically takes 1–3 months, an EA typically takes 6–9 months, and an EIS typically takes 18-24 months. Other Federal agency involvement may expedite the environmental review process by allowing LPO to cooperate on the preparation of an EA or EIS, adopt an EA or EIS, or incorporate information and findings by reference from previously completed EAs or EISs.

A key factor that drives the schedule for the environmental review is the overall maturity of the project design and the status of key permits and regulatory approvals. Minor modifications to a proposed project during the environmental review process tend not to substantially affect the schedule. However, notable project changes that may result in new permit requirements or regulatory agency consultations may extend the schedule.

Applicant involvement begins long before the environmental review process is initiated. Applicants are required to submit environmental information as part of the loan or loan guarantee application. The environmental information provided as part of the application should include a comprehensive description of how the Federal financial assistance would be used (i.e., the proposed project), a preliminary assessment of the proposed project’s environmental effects, and a comprehensive table of permits/approvals for the project with actual or anticipated submittal and approval dates.

The environmental information required for the Title 17 Clean Energy Financing Program can be found in Attachment II.B of the Part II Application Instructions.  The environmental information required for Tribal Energy Financing Program applications can be found in Attachment C of the current Tribal Energy Loan Guarantee Program solicitation for loan guarantee applications.  The environmental information required for Advanced Technology Vehicle Manufacturing applications can be found in Section 611.106 of the Interim Final Rule (10 CFR Part 611). 

The environmental information included in an application enables LPO to determine the level of environmental review under NEPA for the proposed project. It also assists LPO in identifying data needs, such as environmental resource surveys (e.g., desktop and/or field surveys for architectural and archaeological resources, threatened and endangered species, wetlands, and water resources). LPO strongly recommends that applicants complete environmental resource surveys before entering into due diligence.

Once an Applicant has been invited into due diligence, LPO’s Environmental Compliance team will work with the Applicant and, as applicable, its environmental consultant in an iterative manner to ensure smooth and timely completion of the environmental review process.

Applicants may prepare plans or designs or perform other activities necessary to support an application for Federal, state, Tribal, or local permits or assistance; acquire interests in land (e.g., fee simple, rights-of-way, and/or conservation easements); execute purchase options; and purchase long lead-time equipment. 

In accordance with NEPA 40 CFR 1501.2, LPO integrates the NEPA process with its planning and authorization processes at the earliest reasonable time. Doing so ensures that LPO considers environmental impacts in its planning and decisions, avoids delays later in the process, and heads off potential conflicts. The NEPA process, which includes consultations with regulatory agencies (e.g., consultations pursuant to the National Historic Preservation Act and Endangered Species Act) and Tribes, is a forward-looking process that allows Federal agencies to consider the environmental effects of their proposed actions and reasonable alternatives in their decision-making process. 

In accordance with 40 CFR 1506.1, Limitations on actions during NEPA process, no action concerning the proposal (the subject of the Federal financial assistance being sought by an applicant) may be taken that would:

• Have an adverse environmental impact; or
• Limit the choice of reasonable alternatives.

During the NEPA process, if LPO is considering an application from a non-Federal entity (an Applicant) and is aware that the Applicant is about to take an action within the agency’s jurisdiction (e.g., the subject of the Federal financial assistance being sought by the Applicant) that would either have an adverse environmental impact or limit the choice of reasonable alternatives, LPO will promptly notify the Applicant that the agency will take appropriate action to ensure that the objectives and procedures of NEPA are achieved.

Such notifications to an Applicant provide that, although privately financed construction-related activities may proceed at the site during the NEPA review process, the Project Sponsor and Borrower must be aware that they are proceeding at their own risk. If any such activities would have an adverse environmental impact or limit the choice of available reasonable alternatives, any portion of the facility associated with such actions may be excluded from LPO’s Federal financial support, or the Application before LPO may be rejected.

If the actions of an Applicant were the subject of an environmental review (NEPA and associated regulatory agency consultations) completed by another Federal agency, then such actions may be able to proceed during LPO’s environmental review process as long as all necessary approvals and permits are in place; LPO's environmental team will discuss with the applicant on a case-by-case basis.

LPO strives to promote effective working relationships with federally recognized Tribes through effective Tribal outreach and engagement efforts, government-to-government consultation, partnerships, and meaningful engagement to fulfill its trust responsibilities to American Indian and Alaska Native Nations. For more information on current projects and active outreach, please see here for LPO-related NEPA hearings, public meetings, and public notices.

In addition, LPO supports Tribal investment in energy-related projects by providing direct loans or partial loan guarantees to federally recognized Tribes, including Alaska Native villages or regional or village corporations, or a Tribal Energy Development Organization (TEDO) that is wholly or substantially owned by a federally recognized Indian Tribe or Alaska Native Corporation. See more information on the solicitation and application process here.