Opinion ID: 184033
Heading Depth: 2
Heading Rank: 2

Heading: the failure to undertake an environmental study

Text: We next address DOE's failure to prepare an Environmental Impact Statement (EIS) or an Environmental Assessment (EA) for either of the NIETCs. We do so for two reasons. First, even if we had not determined that the Congestion Study must be vacated, we would nonetheless hold that the NIETCs must be vacated because DOE violated the law in failing to consider the environmental consequences of the NIETCs. Second, because DOE will now have to prepare new NIETCs based on a new Congestion Study, our guidance on this issue should be useful for all concerned.
All parties agree that pursuant to the National Environmental Policy Act, 42 U.S.C. § 4332(2)(C), DOE, like any other federal agency, must include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on the potential environmental consequences of the action. [22] Id. In Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989), the Supreme Court noted that NEPA promotes its sweeping commitment to prevent or eliminate damage to the environment and biosphere by focusing Government and public attention on the environmental effects of proposed agency action so that the agency will not act on incomplete information, only to regret its decision after it is too late to correct. Id. at 371, 109 S.Ct. 1851 (internal quotation marks and citations omitted). In Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008), the Supreme Court reiterated that [p]art of the harm NEPA attempts to prevent in requiring an EIS is that, without one, there may be little if any information about prospective environmental harms and potential mitigating measures. 129 S.Ct. at 376; see also Monsanto v. Geertson Seed Farms, ___ U.S. ___, 130 S.Ct. 2743, 2768, 177 L.Ed.2d 461 (2010) (Stevens, J., dissenting) (noting that an EIS is especially important where the environmental threat is novel). Ultimately, our role is to insure that the agency has taken a `hard look' at environmental consequences. ... Kleppe v. Sierra Club, 427 U.S. 390, 410 n. 21, 96 S.Ct. 2718, 49 L.Ed.2d 576 (1976). In accord with this approach, we have reiterated that the agency bears the primary responsibility to ensure that it complies with NEPA. ` Ilio'ulaokalani Coal. v. Rumsfeld, 464 F.3d 1083, 1092 (9th Cir. 2006) (quoting Dep't of Transp. v. Pub. Citizen, 541 U.S. 752, 765, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004)). We reiterated in Alaska Ctr. for Environment v. U.S. Forest Service, 189 F.3d 851, 859 (9th Cir. 1999), that [w]hen an agency decides to proceed with an action in the absence of an EA or EIS, the agency must adequately explain its decision. Id. (internal citation omitted). We commented that [a]n agency cannot avoid its statutory responsibilities under NEPA merely by asserting that an activity it wishes to pursue will have an insignificant effect on the environment. Id. (quoting The Steamboaters v. FERC, 759 F.2d 1382, 1393 (9th Cir.1985)). In Klamath Siskiyou Wildlands Center v. Boody, 468 F.3d 549 (9th Cir.2006), we noted that an EIS must be prepared if substantial questions are raised as to whether a project may cause significant degradation of some human environmental factor. Id. at 562 (internal citation omitted). We explained that [t]he 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, and noted that [t]his is a low standard. Id. (internal citation omitted). In addition, we stated: Furthermore, not only did BLM fail to conduct an EIS prior to implementing either of the ASR Decisions, it did not even conduct an EA. NEPA's implementing regulations state that EAs should be conducted to provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact. 40 C.F.R. § 1508.9(a)(1). Indeed, as we explained in Metcalf v. Daley, 214 F.3d 1135, 1143 (9th Cir.2000), [b]ecause the very important decision whether to prepare an EIS is based solely on the EA, the EA is fundamental to the decision-making process. In this vein, we have held that [i]f the proposed action does not categorically require the preparation of an EIS, the agency must prepare an EA to determine whether the action will have a significant effect on the environment. Kern v. Bureau of Land Mgmt., 284 F.3d 1062, 1066 (9th Cir.2002). Klamath, 468 F.3d at 562. Thus, our precedents hold that an agency cannot merely assert that its decision will have an insignificant effect on the environment, but must adequately explain its decision. Alaska Ctr., 189 F.3d at 859. In The Steamboaters, we reversed and vacated the agency's order because the agency failed to prepare even an EA and did not discuss the evidence presented by the various agencies or how the particular conditions placed on the project would prevent environmental damage. 759 F.2d at 1393. We explained that the agency must supply a convincing statement of reasons why potential effects are insignificant. Id. (internal citation omitted). The appellate court must be able to determine whether the agency took a `hard look' at the potential environment impacts of the project and [t]he statement of reasons is crucial to such a determination. Id.
We apply these standards to DOE's assertion that, although NEPA applies, it was not required to undertake any review of potential environmental consequences because the NIETCs do not have any environmental effects. [23] We are compelled to reject DOE's assertion because (1) its conclusory statement does not allow us to determine whether DOE took a hard look at the potential environmental consequences; and (2) although the effects of the NIETCs may be uncertain and difficult to quantify, the potential consequences of such effects are significant enough to undermine DOE's conclusory determination that no EA need be prepared. [24]
DOE argues that the NIETCs do not have any environmental effect because they do not approve of the siting of any transmission facility, and furthermore, any particular siting will be subject to NEPA review. Our precedent, however, provides that agency action may constitute a major Federal action even though the program does not direct any immediate ground-breaking activity. In Forelaws on Board v. Johnson, 743 F.2d 677 (9th Cir.1984), the petitioners challenged the Bonneville Power Administration's (BPA) offers of long-term contracts for power. Id. at 679. Although BPA argued that its actions that merely allocate federal power to different customers do not significantly affect the environment, we held that the contracts raised considerations of far greater historic and regional import and significantly affect the environment. [25] Id. at 682. Accordingly, we concluded that BPA's action was not sufficient and required the preparation of an EIS. Id. at 686. DOE recognizes the relevancy of Forelaws, but seeks to distinguish the case on the ground that DOE has no authority to site electric transmission facilities. This distinction is not persuasive because the NIETCs, in essence, influence the areas in which electric transmission facilities will be located, even though they do not determine the precise locations of the facilities. As in Forelaws, the locations of those areas could have great historic and regional consequences that significantly affect the environment. Thus, the fact that the NIETCs do not approve the actual sitings of specific transmission facilities does not excuse DOE from considering the NIETCs' environmental impacts. Furthermore, Forelaws does not stand alone in holding that broad agency programs may constitute major Federal actions, even though the programs do not direct any immediate ground-disturbing activity. See Oregon Natural Desert Ass'n v. BLM, 531 F.3d 1114, 1116 (9th Cir.2008) (finding EIS inadequate for land use plan covering a large portion of Oregon); N. Alaska Envtl. Ctr v. Kempthorne, 457 F.3d 969, 973 (9th Cir.2006) (noting that an EIS was prepared for agency action making entire Northwest Petroleum Reserve available for oil and gas leasing despite the lack of site specific analysis for particular locations where drilling might occur); Friends of Yosemite Valley v. Norton, 348 F.3d 789, 800-01 (9th Cir.2003) (evaluating programmatic EIS for land use plan for national park); [26] Blue Mountains Biodiversity Project v. Blackwood, 161 F.3d 1208, 1213 (9th Cir.1998) (finding EA inadequate and requiring EIS for log-salvaging plan for national forest). [27]

DOE asserts that the NIETCs are not major federal actions because it would be pure speculation to predict their environmental impacts. Citing Northcoast Environmental Center v. Glickman, 136 F.3d 660 (9th Cir.1998), DOE asserts that an agency action that has only speculative environmental impacts is not a major federal action. Our holding in Northcoast is more nuanced than suggested by DOE. At issue in that case was a proposal by the Forest Service (FS) to establish guidelines for research, management strategies, and information sharing concerning a root rot fungus on federal land in Oregon. Id. at 670. The district court found that the programs did not constitute final agency action subject to judicial review and that even if they did, they were not major federal actions significantly affecting the environment. Id. at 668. On appeal, we first noted that where review is sought under the general review provision of the APA, the agency's decision must be a final agency action and the plaintiffs must establish they have suffered a legal wrong, or will be adversely affected or aggrieved within the meaning of the relevant statute. Id. We proceeded to comment that the agency action must (1) be federal, (2) `major', and (3) have a significant environmental impact. [28] Id. The opinion focused on the third requirement. We concluded that the district court properly recognized that none of the activities had an actual or immediately threatened effect on the environment and correctly decided that the FS reasonably found that its actions did not significantly affect the quality of human environment. [29] Id. at 669-70. Although sympathetic to plaintiffs' concern that agencies should conduct a full NEPA analysis when management plans are implemented or proposed, we concluded that the current forest management programs did not call for specific enough action to trigger NEPA's procedural requirements, and noted that plaintiffs could challenge the sufficiency of an agency EIS when discrete agency action is called for. Id. at 670. Northcoast offers several points of guidance. First, in determining whether the program had a significant environmental impact, we implicitly held that the program was a final agency action subject to review under the APA, even though we recognized that plaintiffs could challenge the sufficiency of an agency EIS when discrete agency action is called for. [30] Id. Second, we determined that the program was, at least potentially, a major Federal action. It is not clear whether the requirement that agency action be major was considered separately from the requirement that the action have significant environmental impact, or whether the latter was treated as an element of the former. In any event, the opinion certainly implies that if the program did have a significant environmental impact, it would have been a major federal action. Third, although Northcoast states that an agency need not prepare an environmental study when its action does not have a significant environmental impact, it also holds that the record must be sufficient to allow the court to determine that the agency's conclusion was reasonable. See 136 F.3d at 670. Here, the NIETCs are undoubtedly final agency actions. The NIETCs conclude DOE's responsibilities under § 216. They establish the boundaries for two national electric transmission corridors. Once the NIETCs become final, any question as to the actual siting of a facility within the corridors will be addressed to FERC. See 73 Fed.Reg. at 12,969 (DOE agrees that the effect of a National Corridor is to delineate geographic areas within which, under certain circumstances, FERC may ultimately authorize the construction or modification of electric transmission facilities.). Both the intent and impact of the NIETCs support the conclusion that they constitute major Federal action. They create National Interest corridors to address national concerns. The NIETCs cover over a 100 million acres in ten States. Moreover, they create new federal rights, including the power of eminent domain, that are intended to, and do, curtail rights traditionally held by the states and local governments. See 16 U.S.C. § 824p(b), (e). In sum, we hold that the NIETCs are final agency actions that constitute major Federal actions.
The remaining question is whether the NIETCs could have significant environmental impacts or, more accurately, whether DOE has created a record sufficient to allow us to evaluate whether its no effects determination is reasonable. DOE proffers four arguments against being required to undertake an environmental study. First, DOE contends that no potential project-specific impacts are reasonably foreseeable or caused by the NIETCs. DOE contends that the NIETCs are not decisions to add transmission capacity to solve the problems of congestion or to site transmission facilities along preselected routes. DOE claims that these decisions remain to be made by multiple independent actors, and given the vast range of options available ... it would be pure speculation to predict environmental impacts or assign them (as a matter of causation) to the Designation Order. DOE further asserts that under § 216 its limited task was to determine the conditional availability of a federal forum for siting transmission projects, and it would have been premature for DOE to evaluate the potential environmental impacts of new transmission facilities when deciding merely whether a federal forum should be made available. DOE also contends that even if the NIETCs were certain to result in specific projects being submitted to FERC, DOE was not required to prejudge the potential impacts of those projects because a project-specific NEPA review is required before a permit issues. Second, DOE claims that the NIETCs have no foreseeable programmatic effects. DOE admits that in some instances NEPA may require review of programmatic decisions that prescribe future actions, even though project-specific NEPA review will occur before a particular project is undertaken. [31] Nonetheless, DOE maintains that the NIETCs are not programmatic decisions with reasonably-foreseeable future effects because each NIETC is not a plan to guide land management or energy policy decisions, but merely makes available a federal procedural remedy ( i.e., a forum for the consideration of interstate transmission lines), in the event that FERC finds relevant State forums to be inadequate per the standards set by Congress. DOE maintains that the addition of a backstop federal forum does not mean that States and FERC will approve a greater number of projects and it does not favor transmission solutions over non-transmission alternatives ... nor particular generation sources over others. DOE recognizes that it is tasked with choosing the geographic boundaries of the National-Interest Corridors, but asserts that petitioners have failed to show that these boundaries circumscribe relevant alternatives as they place no limits on State siting authorities. Third, DOE denies that the NIETCs could have any impacts on sensitive areas such as critical habitat for endangered species, scenic rivers, wilderness areas, and historic sites. DOE points out that an EIS must be prepared whenever substantial questions are raised about whether a specific project may have a significant effect. DOE further asserts that petitioners have the burden of showing that the potential impacts to sensitive resources are a reasonably foreseeable result of the designations. DOE maintains that [t]he very breadth of these designations belies any suggestion that impacts can be meaningfully evaluated at the designation stage, even if it is assumed that the designation will prompt additional transmission projects. DOE disagrees with petitioners' claim that the inclusion of land within a corridor will discourage conservation, opining that a NIETC might as readily spur the expansion of parks and conservation easements within the Corridors, as interested parties seek to protect sensitive resources. [32] DOE further argues that claims of potential habitat fragmentation within a corridor cannot be meaningfully reviewed because of the many variables and wide range of alternatives. DOE claims that any suggestion that environmentally sensitive areas might be excluded from the corridors confuses DOE's threshold task (designating areas with congestion problems) with the States' and FERC's subsequent task (evaluating proposed solutions). Fourth, DOE argues that the NIETCs do not diminish any legal protections because Congress provided that nothing in § 216 alters federal environmental laws, including laws requiring special authorization for use of federal lands or federal permits for impacting air and water resources. The NIETCs do not allow power companies to run away from state and federal environmental and land use laws because they, in themselves, have no preemptive effect, and FERC's authority to preempt State law under § 216(b) is project-specific and limited to circumstances enumerated by Congress. According to DOE, there are no foreseeable adverse effects from the mere threat of federal intervention because potential acceleration of State proceedings does not dictate the outcome of those proceedings and because DOE does not have any discretion to alter the statutory time frames, which might preclude meaningful review of their potential effects. There may be merit to some of DOE's arguments in terms of limiting the scope of an EIS or in explaining why an EA and not an EIS should be prepared, but they fail both as a matter of law and fact to justify DOE's failure to undertake any study of the potential environmental impacts. DOE's primary argument appears to be that because the NIETCs do not approve any specific sites, they have no meaningful environmental impact. This perspective fails to appreciate that a decision to encourage, through a number of incentives, the siting of transmission facilities in one municipality rather than another has effects in both municipalities in terms of the values of land and proposed and potential uses of land. The effects may be difficult to measure and may be determined ultimately to be too imprecise to influence the Designation, but this is precisely the type of determination that only can be intelligently made after the preparation of at least an EA. Recognition of these consequences flowing from the NIETCs defeats most of DOE's reasons for not preparing an EA or EIS. Without such a study, it is impossible to fairly determine whether project-specific impacts are reasonably foreseeable, whether there are programmatic effects, [33] and whether the Designation has any impact on sensitive areas. Furthermore, the NIETCs do diminish legal protections at least as to whether any particular geographic area should be included in a corridor. The particular siting of a transmission facility may be challenged before a State or FERC, but a challenge to a specific site cannot challenge the inclusion of the area involved in the NIETCs by DOE. Thus, the alleged impact of the NIETCs' inclusion of particular areas as within the corridors, and the exclusion of other areas, are subject to review for environmental impacts at this time or not at all.
Any remaining doubt as to whether it is possible to consider the environmental impacts of the NIETCs dissipates in light of DOE's preparation of a Programmatic Environmental Impact Statement (PEIS) for its designation of the West-wide Corridors for federal lands in eleven western states. See U.S. Department of Energy et al., Programmatic Environmental Impact Statement, Designation of Energy Corridors on Federal Land in the 11 Western States (DOE/EIS-0386), 2007 (hereinafter PEIS). A separate and distinct provision in the EPAct, § 368 of the Energy Policy Act of 2005 (Pub.L. No. 109-58, § 368, 119 Stat. 727, codified at 42 U.S.C. § 15926), directs federal land-management agencies to identify rights-of-way across lands they administer to serve as energy corridors. DOE points out that the statute provides that any corridor designated under this section shall, at a minimum, specify the centerline, width, and compatible uses of the corridor. 42 U.S.C. § 15926(e). Together with the Department of Interior, DOE prepared the required PEIS. See 42 U.S.C. § 15926(a)(2) (providing for the preparation of any environmental reviews that may be required to complete the designation of such corridors). The federal agencies issued the PEIS in October 2007. Two aspects of the PEIS are of particular relevance to this case. First, in response to the question why conduct an environmental review under NEPA and prepare a programmatic analysis, the PEIS's executive summary states: Section 368 requires the Agencies to conduct any environmental reviews necessary to complete the designation of Section 368 energy corridors. The proposed designation of Section 368 energy corridors would not result in any direct impacts on the ground that may significantly affect the quality of the human environment. Nevertheless, the Agencies have decided to prepare a PEIS to conduct a detailed environmental analysis at the programmatic level and to integrate NEPA at the earliest possible time. [34] PEIS, supra, Executive Summary, at ES.8 (footnote omitted). Second, after identifying an `unrestricted' conceptual West-wide network of energy transport paths, the executive summary explained: Next, the locations of individual segments of the conceptual network defined in Step 1 were examined and revised to avoid major known environmental, land use, and regulatory constraints (such as topography, wilderness areas, cultural resources, military test and training areas, and Tribal and state natural and cultural resource areas, etc.).... The revision resulted in a preliminary West-wide energy corridor network that avoided private, state and Tribal lands, many important known natural and cultural resources, and many areas incompatible with energy transport corridors because of regulatory or land use constraints while meeting the requirements and objectives of Section 368. PEIS, supra, at ES.12.2.1. We recognize that the PEIS and the West-wide Designation were undertaken pursuant to a separate and distinct provision of the EPAct. Nonetheless, the creation of the PEIS and its impact on the resulting corridor designation is strong evidence both that it is possible to determine the environmental impacts of a proposed energy corridor and that the study of such environmental impacts may result in modifications of a corridor's boundaries. The West-wide Corridors Designation, like the NIETC Designation, did not approve any specific sites, but designated specific areas for sites. Nonetheless, the lead agencies, including DOE, reshaped the corridors in response to the PEIS to exclude certain sensitive lands. Certainly § 15926 contains a more specific requirement for a study of environmental impacts than § 216, but DOE's ability to undertake a PEIS for West-wide Corridors, and to modify the boundaries based on the PEIS, undermines its assertion that it is not possible to evaluate the environmental impacts of a NIETC.
DOE also asserts that it has adequately documented its decision not to undertake any review under NEPA. It argues that similar to the situation in Northcoast, neither NIETC is a specific proposal with environmental consequences that can be meaningfully evaluated at this time. 136 F.3d at 663 (internal quotations omitted). We doubt that a NIETC is similar to the management guidelines at issue in Northcoast, but even if we were to engage in this fiction, this case does not contain the critical factual element present in Northcoast: a record that supports the reasonableness of the agency's decision not to prepare an EIS or EA. We cannot accept DOE's unsupported conclusion that its final agency action that covers ten States and over a 100 million acres does not, as a matter of law, have some environmental impact. See Alaska Ctr., 189 F.3d at 859; The Steamboaters, 759 F.2d at 1393. If the smaller West-wide Corridors are worthy of a PEIS, as detailed in the statement's executive summary, then a much larger NIETC is also presumptively worthy of an EA or EIS. In any event, DOE has failed to present the documentation necessary to allow us to determine that there are no environmental impacts or that DOE took a hard look at the environmental impacts.
Finally, DOE suggests, citing 40 C.F.R. § 1500.3, that even if we were to determine that a formal EA was required to document DOE's no effects determination, DOE's failure to do so was, at most, harmless error. As noted in Section III C, supra, following the issuance of the Supreme Court's opinion in Sanders, 129 S.Ct. 1696, we place the burden on petitioners to show that the failure to undertake an environmental study is not harmless error. Here, even a cursory review of petitioners' contentions raises substantial questions ... as to whether [the NIETCs] may cause significant degradation of some human environmental factor. Klamath Siskiyou Wildlands, 468 F.3d at 562 (internal citation omitted). [35] For example, petitioners note that the Southwest Corridor includes the Joshua Tree National Park and the Sonoran Desert National Monument. It includes more than three million acres of national wildlife refuge as well as national parks and 57 state beaches, reserves and recreational areas. The Mid-Atlantic Corridor encompasses four national forests, over a million acres of national reserves, historic properties, and environmentally sensitive lands. In light of the agencies' sensitivity to environmental impacts in their creation of the West-wide Corridors, we cannot conclude that the DOE's failure to undertake a study of the NIETCs' environmental impacts constitutes harmless error. In sum, NEPA requires that for all major Federal actions significantly affecting the quality of the human environment an agency must prepare a detailed statement on the environmental impact of the action and any adverse environmental effects. 42 U.S.C. § 4332(c). DOE did not prepare an EIS or even an EA for its NIETC Designation. Its proffered reasons for not doing sothe NIETC Designation is not a major Federal action, NEPA review will take place in subsequent requests for specific sitings, and there are no significant impacts from the Designationare not persuasive as a matter of law and are not supported by the record. Accordingly, because DOE has not shown that it has taken the requisite hard look at the environmental consequences of the NIETCs, we vacate the NIETC Designation and remand the matter to DOE to prepare at least an EA to determine whether there are any environmental impacts that significantly affect the quality of human environment, and whether, if so, the impacts warrant adjustments. [36]