Green Groups Expect Fast Change In Energy Sector
1/16/2009

Under President-elect Barack Obama, the environmental community expects to see a new focus on the impact that energy projects would have on global warming, particularly greenhouse gases. And while it might take time to translate into law and regulation, it will likely become visible in the administration's first year, experts say.

Lawsuits charging federal, state or local regulators with conducting insufficient or incomplete environmental impact assessments for permit applications have never been uncommon. But in recent years, environmental advocacy groups have particularly concentrated their efforts on a project's greenhouse gas emissions — an area that the Bush administration largely pushed aside.

The government's position toward perceived climate change contributors will likely change directions soon in the Obama administration, however, particularly with regard to Prevention of Significant Deterioration permits — a type of New Source Review permit for regulated pollutants under the Clean Air Act.

"Under this administration now, you wouldn't have to worry about PSD permits for greenhouse gases," Chet Thompson, a partner in the environmental and natural resources group at Crowell & Moring LLP, said of the Bush government. "I suspect that very early in the new administration, that's going to change. They're going to try to say that greenhouse gases are pollutants under the Clean Air Act."

While the U.S. Supreme Court's 2007 ruling in Massachusetts v. U.S. Environmental Protection Agency recognized the government's authority to regulate greenhouse gases under the Clean Air Act, the EPA has yet to issue an endangerment finding or determine whether air pollutants such as carbon dioxide should be controlled under existing law.

In a more explicit indication of the administration's position on greenhouse gases, EPA Administrator Stephen Johnson sent a memo to the agency's regional branches in December directing them not to impose carbon dioxide limits under PSD or NSR permits.

Johnson's letter, clarifying that the EPA does not include carbon dioxide in its list of regulated pollutants, came in response to a decision by the agency's Environmental Appeals Board that called into question the Region 8 office's decision not to impose carbon dioxide limits on Deseret Power Electric Cooperative's planned waste-coal-fired plant in Utah.

The appeals board's November decision directed the regional office to either conduct a new analysis and set a cap on carbon dioxide emissions or explain why such controls are unnecessary.

Since the appeals board decision, and Johnson's memo, came so close to the end of President George W. Bush's term, however, the new EPA leadership is likely to change tacks, experts said.

"Within the first four years, I think there will be movement on how greenhouse gas emissions are analyzed and addressed in major infrastructure projects," said Eric Laschever, an environmental law and land use partner at Stoel Rives LLP.

"This is an areas where there's already been some work from, for example, the Federal Highway Administration — it has been looking at this in some of its research and grant programs for several years," Laschever said. "But I expect that the number of agencies looking at this will increase, that's in the first four years."

Another way the Obama administration might address environmental issues in land use could be by shifting its focus on getting clean energy projects approved and moving swiftly, experts said.

Obama has consistently stressed the need to invest in eco-friendly energy sources such as wind and solar, and coupled with the potential to create green jobs that will spur the economy, the initiative could become a top priority early on, they said.

"What I expect to see is going to be streamlining of the project-approval process, particularly when talking about clean energy — wave, wind, solar, that sort of thing," said Greg O'Hara, a partner in the energy and environmental practice at Nixon Peabody LLP.

"The Obama administration has a very large task of correcting the economy, and what these projects will do is create jobs. So by streamlining the project-approval process, he could be killing two birds with one stone, answering both economic and environmental priorities," O'Hara said.

Still, simplifying and accelerating the permitting process — which can require approvals by federal, state, local and tribal authorities — may be difficult if the Obama administration decides to examine greenhouse gases for PSD permits, Thompson said.

It can already take 12 to 18 months to grant PSD permits, which require companies to install state-of-the-art pollution-control technology, for either entirely new projects or changes to existing ones.

"PSD permitting is going to impact expansions of shopping malls, hospitals, let alone energy projects," Thompson said. "The system is going to be overloaded with applications, and then there are going to be big fights over pollution controls."

And even if the federal government does focus more heavily on building clean energy projects that don't pose substantial air pollution concerns, it will still have to deal with their effects on endangered species and wildlife habitats, among other environmental issues, experts said.

Wind energy turbines, for instance, frequently kill birds and have drawn criticism for their unappealing aesthetic impact on communities.

So while lawsuits accusing the federal government of failing to conduct a thorough environmental impact statement or environmental impact review, as they are known in California, may die down, they will not go away completely, experts said.

"I've seen more activity in those types of suits challenging EISs and EIRs in the last four or five years than in last 10 or 20," O'Hara said, adding that the increase hasn't been dramatic, but definitely noticeable.

"If Obama does go forward with his plans on clean energy projects, I don't think you're going to get as many as those legal challenges to the clean energy projects, because again, the end result is a source of energy that is not burning fossil fuels. That's not to say it won't happen, because I've seen litigation challenging wind farms, but I think you will see them reduced," he said.

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