The White House Council on Environmental Quality (CEQ) has issued guidance to federal agencies to consider mitigation measures for greenhouse gases “to the greatest extent possible” when permitting new projects.
Only when permitting agencies begin applying the guidance to newly proposed projects will oil and gas companies learn how costly the strictures may be, and whether projects may be abandoned as a consequence.
The CEQ issued its guidance Jan. 6 under the authority of the National Environmental Policy Act (NEPA).
The Biden administration is reversing a Trump administration decision that withdrew a 2016 guidance on greenhouse gases (GHGs) issued under President Obama. The Biden CEQ couches its new guidance in the rhetoric of crisis that activists used on global warming.
“Given the urgency of the climate crisis, CEQ encourages agencies to mitigate GHG emissions to the greatest extent possible,” the guidance says.
The CEQ says agencies should consider mitigation measures “when those measures are reasonable and consistent with achieving the purpose and need for the proposed action. Such mitigation measures could include enhanced energy efficiency, renewable energy generation and energy storage … carbon capture and sequestration … and capturing GHG emissions such as methane.”
Needs, costs
It often has been assumed that mitigation measures should not kill projects outright but rather should, as the new guidance says, be “consistent with achieving the purpose and need for the proposed action.” But the first problem is the claim of “need,” which can be disputed by people who question the need for more oil and gas drilling and pipelines.
Another problem is the level of mitigation cost that a regulator considers “reasonable.” Sen. Lisa Murkowski (R-Alas.) has warned that regulators at times appear to be edging toward a pattern of demanding “pay to play,” as when an oil company is pushed to contribute millions of dollars to an environmental program as mitigation for a proposed project.
A requirement for carbon capture and sequestration (CCS) could have enormous costs.
CEQ recommends using estimates of the “social cost” of GHGs to generate monetary estimates of climate impacts, including global impacts. Those cost estimates, themselves subject to dispute, may factor into the assessment of alternatives to a proposed action.
As the guidance puts it, social cost calculations can be useful “if the alternatives differ in GHG emissions over time or in the type of GHGs emitted.”
CEQ also indicated it wants its GHG guidance to be less burdensome to alternative energy projects. The council said the depth of environmental impact analysis should be proportional to a project’s impacts and that “projects that will reduce GHG emissions, such as certain renewable and low GHG projects, can have less detailed GHG emissions analysis.”
For oil companies, environmental impact statements often cost more than $1 million to put together.
