Opinion ID: 503513
Heading Depth: 2
Heading Rank: 2

Heading: The National Environmental Protection Act (NEPA)

Text: 19 LaFlamme contends that construction of the Sayles Flat project is a major federal action significantly affecting the quality of the human environment, 42 U.S.C. Sec. 4332(2)(C), and thereby necessitates the preparation of an EIS before the project can be licensed. According to LaFlamme, FERC's decision to license this project without first preparing an EIS violates NEPA. 20 In this circuit, an EIS must be prepared if 'substantial questions are raised as to whether a project ... may cause significant degradation of some human environmental factor.'  City and County of San Francisco v. United States, 615 F.2d 498, 500 (9th Cir.1980) (emphasis in original) (quoting City of Davis v. Coleman, 521 F.2d 661, 673 (9th Cir.1975)) (quoting Save Our Ten Acres v. Kreger, 472 F.2d 463, 467 (5th Cir.1973)). The plaintiff need not show that significant effects will in fact occur, but if the plaintiff raises substantial questions whether a project may have a significant effect, an EIS must be prepared. Foundation For North American Wild Sheep v. United States Department of Agriculture, 681 F.2d 1172, 1178 (9th Cir.1982). 21 We review an agency determination not to file an EIS by considering whether the responsible agency has reasonably concluded that the project will have no significant adverse environmental consequences. City and County of San Francisco v. United States, 615 F.2d at 500. We will defer to an agency's judgment, and not substitute our own, only when the agency's judgment is fully informed and well-considered. Jones v. Gordon, 792 F.2d 821, 828 (9th Cir.1986). 22 A brief consideration of the scope and purpose of NEPA will illuminate our discussion of whether FERC reasonably concluded that no substantial questions were raised as to whether the Sayles Flat project might cause a significant environmental effect. This circuit has interpreted the congressional mandate, to apply NEPA to the fullest extent possible, 42 U.S.C. Sec. 4332, as a direction to make as liberal an interpretation as we can to accommodate the application of NEPA. Jones v. Gordon, 792 F.2d at 826. One of NEPA's goals is to facilitate widespread discussion and consideration of the envionmental risks and remedies associated with the pending project, thereby augmenting an informed decisionmaking process. Warm Springs Dam Task Force v. Gribble, 621 F.2d 1017, 1021 (9th Cir.1980) (per curiam). NEPA requires that this evaluation take place before a project is approved. 40 C.F.R. Secs. 1500.1(a), 1501.1, 1502.5 (1987); see Andrus v. Sierra Club, 442 U.S. 347, 351, 99 S.Ct. 2335, 2338, 60 L.Ed.2d 943 (1979). As part of this process, environmental factors must be considered on an equal basis with other, more traditional, concerns. Foundation for North American Wild Sheep v. United States Department of Agriculture, 681 F.2d at 1177. With this approach to decisionmaking, agencies will take the necessary hard look at environmental consequences before approving any major federal action. Kleppe v. Sierra Club, 427 U.S. 390, 410, n. 21, 96 S.Ct. 2718, 2730, n. 21, 49 L.Ed.2d 576 (1976). 23 FERC's stated policy and regulations require compliance with NEPA when acting under Part I of the FPA. 18 C.F.R. Secs. 2.80(a) and (b) (1987). After FERC makes an initial review of the applicant's environmental report, FERC determines whether the proposed project is a major Federal action significantly affecting the quality of the human environment. 4 18 C.F.R. Sec. 2.81(b) (1987). If so, FERC must prepare an EIS. Id. If not, FERC must prepare a Finding of No Significant Impact (FONSI). 40 C.F.R. Secs. 1501.4(e), 1508.13 (1987). 24 Relying on the staff reports of December 29, 1982 and May 31, 1984 reports, FERC concluded that issuing a license for the Sayles Flat Project would not constitute a major Federal action significantly affecting the quality of the human environment. However, we conclude that LaFlamme raised substantial questions regarding whether the Sayles Flat Project might cause significant environmental degradation due to both its site-specific impact on recreational use and visual quality and its cumulative impact with other projects in the area. These questions were not adequately addressed by FERC. In fact, the area's recreational use and visual quality, as well as the project's impact thereon, had not been specifically identified prior to licensing the project. Furthermore, we conclude that FERC failed to specifically explain how the license conditions will mitigate these adverse environmental consequences. Therefore, on this record, we conclude that FERC's decision not to prepare an EIS was not reasonable.
25 In the rehearing denial order, FERC's discussion of the economic feasibility and need for the power, cultural resources, and aquatic and terrestrial resources provides a clear statement of reasons why these factors are insignificant. FERC's analysis compels our conclusion that they took the required hard look at the potential environmental impacts in these three areas. 26 However, we cannot reach the same conclusion after examining FERC's assessment of the project's impact on recreational resources and visual quality. At the outset, we note that FERC neglected to prepare either an environmental assessment (EA) or a FONSI, as required by 40 C.F.R. Sec. 1501.4 (1987), thereby violating the required NEPA procedure. The only environmental analysis performed was the two FERC staff reports of December 29, 1982 and May 31, 1984, filed after the license was issued, after the petition for rehearing was filed, and just one week before the petition for rehearing was denied. Thus, the basis for FERC's conclusion that the project will not significantly affect the quality of the human environment, and therefore not require preparation of an EIS, can only be ascertained by reviewing the voluminous agency record. This kind of speculation regarding the basis for an agency's decision not to prepare an EIS is precisely what NEPA was intended to prevent. See The Steamboaters v. F.E.R.C., 759 F.2d 1382, 1393 (9th Cir.1985). NEPA is an essentially procedural statute, Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 558, 98 S.Ct. 1197, 1219, 55 L.Ed.2d 460 (1977), and [w]e enforce NEPA under our authority to 'hold unlawful and set aside agency action, findings, and conclusions found to be ... without observance of procedure required by law.'  City of Angoon v. Hodel, 803 F.2d 1016, 1020 (9th Cir.1986) (quoting Lathan v. Brinegar, 506 F.2d 677, 692-93 (9th Cir.1974) (en banc)); Administrative Procedure Act, 5 U.S.C. Sec. 706(2)(D). FERC's failure to follow required NEPA procedure violates the law and provides a sufficient basis for reversing their decision. 27 In addition to this technical violation of NEPA, FERC's substantive evaluation of the project's impact on recreational use and visual quality also violates NEPA. Although FERC identified recreational use and visual quality as the most important and most severely affected resource in the project area, their conclusion that the license conditions will adequately mitigate the project's impact on this resource, to the point of insignificance, is simply not supportable on the record. An agency must supply a convincing statement of reasons why potential effects are insignificant. The Steamboaters v. F.E.R.C., 759 F.2d at 1393. While it is true that mitigation measures can justify an agency's conclusion that a project's impact is not significant, an agency must explain exactly how the measures will mitigate the project's impact. Id. at 1394; Jones v. Gordon, 792 F.2d at 829. At no point does FERC attempt to explain exactly how Keating's six proposed mitigation measures will reduce the significance of the project's impact on recreational use and visual quality. Indeed, at this point, any such explanation could only represent speculation in any case, considering that the existing, specific recreation use and visual quality of this area have yet to be determined by the post-licensing, two recreation season study. Additionally, FERC's verbatim adoption of Keating's proposed mitigation measures and the Forest Service-Keating two recreation season study, without any analysis of how these measures would diminish the project's impact, violated FERC's duty to independently assess the consequences of a project. Southern Oregon Citizens Against Toxic Sprays, Inc. v. Clark, 720 F.2d 1475, 1480 (9th Cir.1983), cert. denied, 469 U.S. 1028, 105 S.Ct. 446, 83 L.Ed.2d 372 (1984). 28 As in The Steamboaters, FERC's omission is particularly troubling because of the serious questions raised by LaFlamme regarding the impact of this project. LaFlamme's concerns regarding the loss of the sight and sound of over 4000 feet of cascading water, as well as the ponds, pools, waterfalls and streamlets created by this vigorously moving river, and the resulting loss of the aesthetic quality and recreational opportunities such a river creates, were neither specifically addressed, nor adequately mitigated, due to the lack of any discussion of how these measures would lessen the project's impact. 29 FERC's reliance on a post-licensing, two season recreation study as an adequate mitigation measure is also misplaced. First, NEPA clearly requires that consideration of the environmental impacts of proposed projects take place before any licensing decision is made. [T]he very purpose of NEPA's requirement that an EIS be prepared for all actions that may significantly affect the environment is to obviate the need for speculation by insuring that available data is gathered and analyzed prior to the implementation of the proposed action. Foundation for North American Wild Sheep v. United States Department of Agriculture, 681 F.2d at 1179. After all, once a project begins, the pre-project environment becomes a thing of the past. Evaluating the project's effect on pre-project resources is simply impossible. 30 Although FERC labels this post-licensing study as merely a means for fine-tuning the previously imposed mitigation measures, the scope of this study is so comprehensive that FERC in essence will be considering the project's impact on specific aspects of recreational use and visual quality for the first time. In fact, as recognized in the December 29, 1982 report, Keating never submitted recreational use data for the Sayles Flat area. FERC relied solely on data gathered at the Echo Lake Development when they determined that Keating's six proposed mitigation measures would reduce any impact from the project on recreation to the point of insignificance. This type of post-licensing data gathering violates NEPA's very letter and purpose. 31 Additionally, reliance on a post-licensing study to fully develop a mitigation plan deprives FERC of any foundation upon which to base their conclusion that the project's impact on recreational use and visual quality will not be significant. We fail to see how mitigation measures can be properly analyzed and their effectiveness explained when they have yet to be fully developed. Oregon Natural Resources Council v. Marsh, 832 F.2d 1489, 1493 (9th Cir.1987). 32 Finally, the controversy created by this project supports our conclusion that substantial questions were raised regarding whether this project may significantly degrade some aspect of the human environment. [T]he degree to which the effects on the quality of the human environment are likely to be highly controversial is one factor in determining how significantly a proposed action affects the quality of the environment. 40 C.F.R. Sec. 1508.27(b)(4) (1987). In Foundation for North American Wild Sheep, this court stated that the term 'controversial' refers 'to cases where a substantial dispute exists as to the size, nature, or effect of the major federal action rather than to the existence of opposition to a use.'  681 F.2d at 1182 (quoting Rucker v. Willis, 484 F.2d 158, 162 (4th Cir.1973)). In that case, the numerous responses from conservationists, biologists, and other knowledgeable individuals, all ... disputing the EA's conclusions [regarding the likely effect of] reopening [the road], led this court to conclude that this is precisely the type of 'controversial' action for which an EIS must be prepared. Id. 33 Similarly, LaFlamme's dispute with FERC centers around the effect the dam will have on recreational use and visual quality in the project area, as well as the effect the proposed mitigation measures will have on preventing significant degradation of the quality of the environment. While FERC disputes LaFlamme's contentions, nowhere [does FERC explain] why [LaFlamme's] points do not suffice to create a public controversy based on potential environmental consequences. Jones v. Gordon, 792 F.2d at 829. NEPA requires such a well-reasoned explanation. 34 We conclude that there were substantial questions raised regarding whether the project may significantly affect recreational use and visual quality in the project area, and that FERC failed to explain or discuss how the proposed mitigation measures lessen the project's impact on these resources to the point of insignificance. Therefore, because this record reflects a decision which is neither fully informed or well-considered, we conclude that FERC's decision not to prepare an EIS was unreasonable.
35 In National Wildlife Federation v. F.E.R.C., 801 F.2d 1505, 1507 (9th Cir.1986), FERC conceded that the Federal Power Act requires consideration of cumulative impacts before licenses are issued. NEPA also requires consideration of cumulative impacts when determining whether an action significantly affects the quality of the human environment. Title 40 of the Code of Federal Regulations, Section 1508.7 provides: 36 Cumulative impact is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions. Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time. 37 FERC contends that it reviewed the cumulative environmental impact of the projects proposed to be developed in the American River basin in the May 31, 1984 staff report and concluded that the Sayles Flat and other projects would not have a potential for causing significant adverse cumulative impacts on the resources in that area. Therefore, FERC argues that no cumulative impacts EIS is necessary for this project. 38 The May 31, 1984 FERC staff report reviews pending license applications, applications for exemption, and licenses under appeal, including Sayles Flat. The report relies on the EIS previously prepared for one of these projects, the Upper Mountain Project, as an adequate evaluation of the cumulative impact of all the proposed projects in this area. 39 The Upper Mountain Project EIS is limited to assessing the impact of that project's diversion dams and other proposed facilities in that project's area. At no point did the EIS analyze the effects other projects, pending or otherwise, might have on this section of the American River Basin. Such a narrow analysis of one project's impact on this area cannot possibly provide the necessary broad consideration of all past, present and reasonably foreseeable future actions required in a cumulative impact analysis. Considering that the Upper Mountain Project represents only the initial development of the remaining water resources in the South Fork of the American River basin, the foreseeability of future development underscores the importance of performing a comprehensive cumulative impact analysis of the project's effects on the environment before any more development proceeds. The Upper Mountain Project's EIS does not provide the necessary comprehensive analysis of the cumulative impact of all projects in this area, especially the Sayles Flat Project. 40 Additionally, FERC's analysis of the Sayles Flat project in their order denying rehearing does not support their conclusion that this project does not have a potential for significant adverse cumulative impacts on the resources in this area. FERC and the FERC staff make the same analytical error with Sayles Flat as they did in their study of the Upper Mountain Project: they examined the Sayles Flat project in isolation, without considering the net impact that all projects in the area may have on the environment. National Wildlife Federation v. FERC, 801 F.2d at 1507. Therefore, because FERC has not considered the impact that all past, present, and reasonably foreseeable future projects may have on the basin's resources, the record simply cannot support FERC's conclusion that the Sayles Flat project does not have a potential for adverse cumulative impacts on the environment. Accordingly, FERC's decision not to prepare an EIS on the project's cumulative impacts was unreasonable.