Various federal environmental laws apply to DOE loans and loan guarantees. The Environmental Compliance Division is responsible for assuring that LPO complies with these and other environmental review requirements.  In cooperation with applicants, the team prepares environmental review documents, consults with relevant federal, state, local, and Tribal agencies, and oversees public involvement in the environmental review of DOE’s proposed actions. Applicable laws include:

NATIONAL ENVIRONMENTAL POLICY ACT (NEPA)

The National Environmental Policy Act (NEPA) requires DOE to consider the environmental effects of proposed actions to inform agency decision making. Analyses and documentation prepared to comply with NEPA may include a Categorical Exclusion, Environmental Assessment, or an Environmental Impact Statement.

• Environmental Impact Statements
• Environmental Assessments
• Categorical Exclusions
• Interagency Agreements

LPO’s NEPA-related hearings, public meetings, and public notices (e.g. public scoping meeting, public hearing, notice of proposed floodplain or wetland action) are available on the NEPA-related Public Involvement web page.

NATIONAL HISTORIC PRESERVATION ACT

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.

ENDANGERED SPECIES ACT

The Endangered Species Act requires that DOE assess the impact of proposed actions on federally listed threatened and endangered species and their critical habitat. DOE must consult with the U.S. Fish and Wildlife Service if endangered species are affected by a project.

OTHER APPLICABLE ENVIRONMENTAL LAWS

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

What is NEPA?

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 regulations (40 CFR Parts 1500-1508) that are applicable to all agencies. DOE Policy Directive 451.1 (National Environmental Policy Act Compliance Program) establishes Agency roles, responsibilities and expectations for implementing the procedural provisions of the CEQ regulations and DOE’s NEPA implementing regulations(10 CFR Part 1021). The NEPA Flow Chart 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 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 of DOE’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 EA’s and EISs can be found on the LPO website at www.energy.gov/nepa/nepa-documents.

How does NEPA apply to LPO programs?

Loans and loan guarantees issued under LPO's program are considered major Federal actions and are subject to National Environmental Policy Act (NEPA) review. NEPA compliance is integrated into LPO’s decision-making procedures to ensure that environmental impacts are considered throughout the loan guarantee process. The NEPA review must be completed before a loan or loan guarantee can be issued.

How will a project be affected if an Applicant begins work on the project site prior to the completion of NEPA review?

The NEPA review process begins after an Applicant has been invited into the due diligence phase of loan or loan guarantee underwriting. Once the due diligence phase has begun, the Applicant should consult with DOE before doing any work on the project site (beyond preliminary design activities) to ensure the work is an allowable interim action (40 CFR 1506.1) so that the NEPA review and issuance of the loan or loan guarantee is not put at risk. If the work being proposed might cause an adverse environmental impact or limit the choice of reasonable alternative courses of action, the NEPA review could be at risk and thus the issuance of the loan or 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.

What is the Applicant role in the NEPA review process?

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 LPO. For an example of such guidance, see Attachment B to the current Title 17 solicitations or Tribal Energy Loan Guarantee Program solicitation for loan guarantee applications, or Section 611.106 of the Interim Final Rule (10 CFR Part 611) for the Advanced Technology Vehicle Manufacturing program.  Once a project sponsor has decided to submit an application, they are encouraged to contact the Environmental Compliance (EC) Division of LPO for additional guidance on what to include in their application.

Upon commencement of due diligence, the EC Division of LPO will work with the Applicant, and as applicable, its NEPA contractor/consultant in an iterative process to ensure smooth and timely completion of the NEPA process. LPO in many cases, particularly for EISs, will direct the applicant and its environmental contractor(s) to prepare the NEPA document under the supervision of LPO as provided in CEQ regulations at 40 CFR 1506.5.

What does the NEPA review entail and how long does it take?

NEPA review begins once an Applicant is invited to begin the due diligence phase of loan or loan guarantee underwriting. LPO makes a determination of the level of NEPA review required (i.e., CX, EA or EIS), and working in an ongoing process with the Applicant or their contractor, 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.

The average timeline for completing an environmental assessment is 6-9 months, and for an environmental impact statement around 18-24 months. Since the EIS process involves significant environmental impacts, it requires a more expanded review and public involvement process than an EA. This includes the solicitation of public review and comment on the draft EIS, and holding related public meetings and hearings.

What other laws affect the NEPA review process?

During the NEPA review process a number of other environmental laws require coordination, consultation and compliance. These include Section 7 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 LPO’s EC Division early on to discuss the project and related requirements.

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 EA or EIS process. Under this arrangement DOE works with the other Federal agency in preparing the NEPA document, becomes party to associated required consultation processes, which results in a more efficient and timely review. Similarly, when DOE initiates a NEPA review for a proposed loan or loan guarantee, DOE will check to see if another Federal agency also has jurisdiction by law or special expertise concerning the project or its potential impacts, and will consider inviting the agency to be a cooperating agency in the preparation of DOE’s NEPA document.

How are state environmental reviews considered in DOE’s NEPA process for loan projects?

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, as it can do with other Federal agency NEPA documents.

What public review is required for EAs and EISs?

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 post the draft EA on LPO’s website and make the EA available to anyone upon request. For EISs, DOE will always have a scoping meeting prior to the draft EIS (DEIS) and may conduct a public hearing after the DEIS is issued. DEISs must have a public comment period for a minimum of 45 days after issuance. DEIS are also reviewed by the U.S. Environmental Protection Agency and other federal agencies, and host state and Tribal governments. EPA also reviews final EISs (FEISs).

When is an EIS required?

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 listed in 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 whether an action would involve significant environmental impacts that cannot be mitigated by analyzing the potentially affected environment and degree of the effects of the action. In considering the potentially affected environment, DOE may consider, as appropriate to the specific action, the affected area (national, regional, or local) and its resources, such as listed species and designated critical habitat under the  Endangered Species Act. Significance varies with the setting of the proposed action. For instance, in the case of a site-specific action, significance would usually depend only upon the effects in the local area.

In considering the degree of the effects, DOE may consider, as appropriate to the specific action; short- and long-term effects; beneficial and adverse effects; effects on public health and safety; and, effects that would violate Federal, State, Tribal, or local law protecting the environment.

Are there companies and consultants that can prepare environmental reports, EAs and EISs?

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 LPO’s website.