Beyond the Fenceline: Environmental Justice Updates – November 17, 2022

Emphasis on Implementing Environmental Justice in Court Action Revoking Permits

On September 12, 2022, a judge revoked fourteen permits issued by the Louisiana Department of Environmental Quality (“LDEQ”) for a new plastics manufacturing facility under the Clean Air Act. 
The permits were issued in 2020 to Formosa Plastics Group but were immediately challenged by citizen groups on environmental justice, public trust, and administrative procedure grounds. The court noted that EPA’s screening tool, EJSCREEN, “shows that the communities closest to the [proposed] site are in the 95-100th percentile for cancer risk associated with exposure to toxic air pollutants from industrial sites” and found LDEQ’s failure to consider cumulative impacts in making its permitting decision to be unlawful. According to the court, LDEQ incorrectly determined the facility demonstrated it would not “cause or contribute to” air pollution violations, and that by approving the permits, LDEQ was “allowing the chemical complex to participate in violations of federal air standards.”  
This ruling comes as EPA is placing an emphasis on EJ considerations in permitting nationwide. The Formosa challenges are likely a preview of further permitting challenges to come across the country.

Inflation Reduction Act Funds Benefit EJ Initiatives, but Decisions Remain on Allocation

As described in our August 16, 2022 Client Alert, the Inflation Reduction Act of 2022 (IRA) provides approximately $60 billion in funding for clean energy and environmental projects, including to a variety of Environmental Justice (EJ) projects. The investments are available as tax credits, grants, loans, and as other financial assistance. Under the Justice40 Initiative, 40% of the environmental funding must be directed toward projects that “benefit” disadvantaged communities across climate change, clean energy and energy efficiency, clean transit, affordable and sustainable housing, training and workforce development, remediation and reduction of legacy pollution, and the development of critical clean water and wastewater infrastructure. In an effort to concentrate funds in disadvantaged communities, a group of 60+ Congressional Democrats sent a letter on September 6, 2022, urging the White House to make the 40% a floor on funding directed to EJ communities rather than using it as a target for overall benefits.   
The IRA sets EJ criteria for select, but not all, benefits. Ultimately, whether the measure of funding is 40% or a higher percentage, federal and state recipients of IRA funds will have a large role in deciding where and how funds are allocated to EJ communities, meaning distribution may vary across agencies and programs. 

EPA Addresses Environmental Justice and Civil Rights in Permitting

EPA recently published Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions. The FAQ provide guidance to federal, state, and local permitting agencies about integrating Environmental Justice and civil rights laws into the permitting process. The implications are significant. Under this guidance, permit seekers have to undertake an EJ assessment and a disparate impact analysis of their projects, the latter of which includes an analysis of cumulative impacts. Critically, the EPA FAQ state that a project could pass environmental review, but an agency could still deny the requested permit under Title VI of the Civil Rights Act if EJ issues are identified and not mitigated. The guidance suggests various measures to mitigate a project’s disparate adverse impacts. Many of these could make a project uneconomical. Consequently, it is critical that a project proponent proactively assess and address EJ issues. More information can be found here.

FERC is Bearing Down in its Environmental Justice Reviews of Gas Pipeline and LNG Terminal Applications

The Federal Energy Regulatory Commission (FERC) is devoting an increasing amount of attention and staff resources to its consideration of EJ impacts of proposed interstate natural gas pipeline and liquified natural gas terminal projects. FERC has taken to heart a 2021 Biden Administration directive that federal agencies develop “programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts” (Executive Order No. 14,008, 86 Fed. Reg. 7619 (Feb. 1, 2021.). FERC has established a senior agency position, the Senior Counsel for Environmental Justice and Equity, focused on EJ in FERC’s decision-making. The Commission’s staff is now intently focused on EJ issues, and is demanding additional information regarding impacts of pipeline and LNG terminal construction and expansion proposals on EJ communities through follow-up data requests in essentially all pending proceedings.
Last year, the U.S. Court of Appeals for the District of Columbia Circuit took FERC to task for the Environmental Justice analysis it had performed for three LNG terminal projects in Brownsville, TX, questioning the reason why FERC limited the geographic scope of its EJ analysis (Vecinos para el Bienestar de la Comunidad Costera v. FERC, 6 F.4th 1321 (2021)). FERC is still considering the proper scope of its EJ analysis of those projects on remand (Rio Grande LNG, LLC, Docket No. CP16-454, and Texas LNG Brownsville LLC, Docket No. CP16-1216.). These proceedings should ultimately provide useful guidance on FERC’s view as to how to establish the scope of its EJ analyses. 
Recently, FERC staff has found in a final Environmental Impact Statement (EIS) for the Commonwealth LNG Project (Docket No. CP19-502) that, given visual impacts on an Environmental Justice community and overall cumulative impacts in the project area, “impacts on environmental justice communities would be disproportionately high and adverse” and significant. This may be the first time FERC staff has identified project impacts on an EJ community to be both significant and disproportionately high and adverse, even after the mitigation measures proposed by the applicant are taken into account. The EIS will now be considered by FERC in determining whether to grant Commonwealth LNG’s application for authorization to site, construct and operate its proposed LNG export terminal. FERC’s actions in this proceeding will be worth watching for insights as to how its EJ analyses will address projects located in areas that already host multiple energy facilities that are seeking initial FERC authorization or approval to expand.