NAFTA RULING RAISES NEW NEPA QUESTIONS

The oil and gas industry should help U.S. President Bill Clinton out of a jam. After a legal setback to the North American Free Trade Agreement (Nafta), the President had to choose between angering environmentalists and yielding a measure of presidential authority. Bruised often in the past by the same legal bludgeon, the industry can suggest another tactic.

July 12, 1993

3 min read

The setback came in the Washington, D.C., federal district court, where Judge Charles Richey ruled that the administration must prepare an environmental impact statement (EIS) on Nafta before Congress can consider it. The administration immediately appealed the ruling, an essential move that no doubt rankled Clinton's environmentalist supporters. Inaction would have yielded a measure of executive power by adding a legal contingency to international agreements.

PROBLEMS WITH LAW

But what if the appeal fails? That prospect should call the law itself into question. The National Environmental Policy Act (NEPA) very properly aims to make the federal government consider environmental consequences of its actions. But it leaves much room for interpretation about when and to what degree its mandates apply. The interpretation often must come as a result of litigation, as it did in the Nafta case. Litigation can take years. Delays measured in years murder commercial projects and thus work to the advantage of environmentalists opposed to economic activity.

This process has all but halted federal onshore oil and gas leasing. Plans to offer leases on federal land attract lawsuits demanding that EISs be conducted for entire lease sales rather than specific drilling projects. A second wave of litigation challenges EIS adequacy. In national forests, the issue is further complicated by court rulings that conflict over when in land use planning the government should prepare ElSs.

NEPA legalities now threaten to swamp Nafta in the same manner. If Clinton wants Congress to ratify the trade agreement anytime soon, he must push for a prompt decision on his administration's appeal of the Richey ruling. Industry's best advice for him, though, is to seek a change in the law at the same time.

When it passed NEPA, Congress probably did not intend to create a legal endurance test for commercial projects. And it probably did not intend to restrict presidential authority. It probably just wanted to make the government exercise a formal measure of environmental responsibility. Such reasonable intent, however, did not keep NEPA from evolving into a tool of obstructionism or, now, threatening to upset the constitutional balance of power.

FAULTY ASSUMPTIONS

If these unintended outgrowths of NEPA don't alarm Congress, scientific assumptions implicit in Richey's ruling certainly should. They say, in effect, that a group of people can predict the economic consequences of a free trade agreement and use those predictions to measure environmental effects with some meaningful degree of precision. This is nonsense. But it follows a pattern. At first, EISs had to perform the difficult enough task of assessing in advance the environmental effects of specific projects in specific locations. More recently they have been called upon to gauge specific environmental effects of more general activities, such as lease sales. Now they may apply to an international economic agreement covering an entire continent. It's a progression toward fantasy. Yet at least one judge thinks it's the law.

The law must be changed. And President Clinton and the oil and gas industry have much to cain from urging Congress to change it.