siting and permitting energy projects: the …/media/files/insights/...the playbook has been used...

If you cannot hear us speaking, please make sure you have called the teleconference number on your invitation. US participants: 1 800 909 4147Outside the US: +1 212 231 2914The audio portion is available via conference call. It is not broadcast through your computer.*This webinar is offered for informational purposes only, and the content should not be construed as legal advice on any matter.

Wednesday, June 24, 2015

SITING AND PERMITTING ENERGY PROJECTS: THE OPPOSITIONPLAYBOOK, AND APPROACHES TO ROUTINELY DEFEAT IT

CURRENTLY SPEAKING

DLA PIPER PRESENTERS

2

Robert GruendelGlobal Co-Chair, Energy Sector; Partner New York

U.S. Vice Chair, Energy Sector;Partner New York

Of CounselNew York

Robert (Bob) J. Alessi Called upon by domestic and international clients to handle their most

significant environmental and energy matters, including: project development

regulatory

major transactions

compliance

defense of government enforcement actions or judicial and administrative trials

appellate litigation

Jeffrey D. Kuhn

Represents clients from a wide range of industries in a variety of actions, including state and federal administrative proceedings and litigation.

Counsels clients on risk minimization, regulatory compliance, litigation avoidance and litigation management associated with environmental, energy and land use matters.

Introduction

Successful development of energy projects is an arduous and strategic undertaking.

Among the many challenges facing project proponents are organized and energetic project opponents.

3

Introduction

While most project proponents seek consensus on the merits of their undertaking, few major projects proceed unopposed.

4

Introduction

Opponents of developing energy projects have developed a de facto set of tactics – the “Playbook” – to put extraordinary pressure on regulatory agencies, elected officials, and even project management in order to delay and eventually prevent such projects from ever coming to fruition.

The Playbook has been used against many varieties of energy projects, including electric transmission lines, pipelines, power plants, wind farms, and hydroelectric facilities (just to name a few).

Opponents are often well-versed in the complex requirements of federal and state energy and environmental laws, which they use in concert with sophisticated public relations and quasi-political campaigns.

The key for energy project sponsors is understanding the Playbook, and the methods to ultimately defeat it/minimize it at the earliest possible stages of project planning.

5

The Playbook

Classic steps in the Playbook:1. Demonize the technology2. Demonize the project sponsor3. Demonize public health/environmental impacts of

the project4. Demonize the policy considerations behind the

project5. Pepper regulatory agencies with criticism of the

project and the review process6. Dilatory Tactics: Request delays, more review

time, extended public comment, or more studies at every step of the process

7. Enlist friendly elected officials to attack project8. Attend media editorial board meetings in

furtherance of negative editorials/op-eds.9. Go door-to-door and exaggerate impacts and

persuade citizens to crowd public meetings10. Procure celebrity support The Playbook thus relies on an intertwined mix of

legal/regulatory procedures and public relations.

6

Environmental Review Statutes

The most common formal procedural mechanisms that project opponents attempt to rely on are those mandated by state/federal environmental review regimes.

7

• National Environmental Policy Act (“NEPA”) (42 U.S.C. § 4321 et seq.)• NEPA requires federal agencies to incorporate environmental

considerations in their planning and decision-making through preparation of detailed statements assessing the environmental impact of and alternatives to major federal actions significantly affecting the environment.


8

NEPA applies not only to direct activities of federal agencies (such as government construction projects or management of federal lands), but also to private activities that require federal approvals, licenses, or permits:

Interstate gas pipelines requiring a CPCN from FERC;

Private leasing of federal lands managed by the Bureau of Land Management for oil and gas production;

Siting, construction, and operation of electric transmission lines; or

Any project that requires a permit from the U.S. Army Corps of Engineers (“USACE”) under Section 404 of the Clean Water Act to discharge dredged and fill material into waters of the United States, including wetlands.


Three levels of NEPA analysis:

Categorical Exclusions: A project may be categorically excluded from NEPA’s requirements if it satisfies certain regulatory criteria which means that it has previously been determined that projects of that type do not have significant environmental impacts.

EA/FONSI: If a project is not categorically excluded, a federal agency prepares a written environmental assessment (EA) to determine whether the project will significantly affect the environment. If the answer is no, the agency issues a finding of no significant impact (FONSI).

EIS: If the EA determines that an action may have significant environmental impacts, an environmental impact statement (EIS) must be prepared. An EIS, which is a more detailed evaluation of the proposed action and alternatives, may take years to produce and finalize. Notably, the public, other federal agencies and outside parties may provide input on the preparation of an EIS and then comment on the draft EIS when it is completed.

9


Federal agencies prepare a full-blown EIS for “major Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C).

However, EISs can be required even without a finding that a project may significantly impact the environment.

For example, if a federal agency merely concludes that a project is environmentally controversial, it may choose to mandate preparation of an EIS without preparing an EA. See40 CFR § 1501.3(a).

FERC’s regulations require preparation of an EIS for “major pipeline construction projects” (18 C.F.R. § 380.6(a)(3)); although the regulations do not specify what constitutes a “major” pipeline.

10


After a final EIS is prepared, a federal agency will prepare a public record of decision addressing how the findings of the EIS, including consideration of alternatives, were incorporated into the agency’s decision-making process.

At every stage of the NEPA process, federal agencies are required to “make diligent efforts to involve the public in preparing and implementing their NEPA procedures,” including by holding “public hearing or public meetings whenever appropriate.” 40 CFR §1501.3(a, c). The criteria for deciding whether to hold a public hearing include whether there is “substantial environmental controversy concerning the proposed action or substantial interest in holding the hearing.” 40 CFR § 1506.6(c)(1).

11


NEPA does not impose a substantive duty on agencies to mitigate adverse environmental effects or to include in each EIS a fully developed mitigation plan. Although the EIS requirement and NEPA's other “action-forcing” procedures implement NEPA’s policy goals by ensuring that agencies will take a “hard look” at environmental consequences and by guaranteeing broad public dissemination of relevant information, it is well settled that NEPA itself does not impose substantive duties mandating particular results, but simply prescribes the necessary process for preventing uninformed-rather than unwise-agency action. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350-351 (1989).

Many states have adopted so-called “Little NEPAs,” which are essentially state equivalents of NEPA. Some of those state environmental review statutes, such as the New York State Environmental Quality Review Act (“SEQRA”) and the California Environmental Quality Act (“CEQA”), were expressly modeled upon NEPA.

While many of the specific requirements of these state-enacted Little NEPAs vary from NEPA in a variety of ways (SEQRA, for example, “imposes far more ‘action-forcing’” and “substantive” requirements than NEPA (Matter of Jackson v. NYS Urban Dev. Corp., 67 N.Y.2d 400, 415 (1986))) or use different terminology (e.g., FONSI vs. NegDec, EIS vs. EIR, etc.), all are conceptually similar and have extensive public participation mandates.

12

NEPA/Little NEPAs and the Playbook

The environmental review process mandated by NEPA and the state Little NEPAs is one of the primary weapons utilized by project opponents operating under the Playbook.

Although the intended goal of NEPA/state environmental review statutes is enabling governmental decision-makers to intelligently assess and weigh the potential environmental impacts of proposed projects (e.g., WEOK Broadcasting Corp. v. Planning Bd. of Town of Lloyd, 79 N.Y.2d 373, 380 (1992)), opponents often use the process merely as a mechanism to perpetually delay or kill projects.

13


Many project opponents view the environmental review process as a war of attrition – meaning that even if opponents cannot defeat a project on the merits (because the opponents’ environmental arguments are without baseless), the opponents will use every dilatory tactic imaginable to prolong the process and thereby drive up the cost of the project by tens of millions of dollars.

The objective is either (1) to financially and morally exhaust the developer to the point of capitulation and project abandonment, and/or (2) erode support from governmental decision-makers/elected officials.

14


Oppositional techniques:

ALWAYS insist on preparation of a full-blown EIS: Preparation of an EIS will generally add at least 18-24 months to a project timeline and cost millions of dollars.

Argue for an unreasonably broad scope of review of issues/topics in the EIS.

Attack the sufficiency of the DEIS and insist upon inclusion of numerous additional analyses and studies (including on subjects never raised during scoping).

Insist upon a detailed evaluation of numerous alternatives, including alternatives that do not satisfy the defined purpose/need and that are beyond the developers’ capabilities, and emphasis of the “no action” alternative.

Insist upon opportunities for public comment AND public hearings at every conceivable stage of the process –including administrative trials/adjudicatory hearings whenever possible.

After the process is concluded, file suit in court claiming that requirements of applicable environmental review statute and the substantive, organic environmental statutes were not followed.

15

Neutralizing the Playbook

Project opponents utilizing the Playbook know that their efforts to use the environmental review process to delay or kill energy projects are much more likely to be effective if they can activate relatively large numbers of citizens. They will attempt to swamp the process at every turn – e.g., large numbers of written comments, plentiful commenters at public meetings.

While virtually all major energy projects are likely to foster opposition at some level, agency decision-makers will be much more likely to reject the arguments they perceive to come from loud but small/fringe special interest groups.

Much more problematic for developers is intense opposition from “John Q. Public”

Many governmental decision-makers are either elected officials or answer to elected officials –meaning that opposition to energy projects often take on a quasi-political campaign-type atmosphere to win hearts and minds.

16

Neutralizing the Playbook: Strategic Rollout

As noted above, opponents utilizing the Playbook will begin their campaign as early as possible to demonize the technology, the project sponsor, the alleged public/health impacts of the project – often through social and traditional media, direct mailing, and door-to-door campaigns.

17

You Never Get a Second Chance to Make a First Impression: The Importance of Strategic Roll-Out

• A developer caught flat-footed at the onset of an opposition campaign is susceptible to allowing opponents to define their project and the debate. The first few months and even weeks can be critical.

• Neutralizing the Playbook requires developers to be proactive not reactive. John Q. Public’s first impression of the project must be formed by the developer and not by opponents.

Neutralizing the Playbook: Strategic Rollout

18

The Importance of Strategic Roll-Out (continued)

• At the earliest possible stages of project development, a coordinated team should be assembled including engineers, environmental professionals, public relations and governmental relations professionals, and attorneys. This team should define the message regarding the project and its benefits (e.g., economic benefits, environmental benefits, energy security, job creation, tax revenues, etc.) and develop a strategy to communicate those benefits to the public immediately upon and before making any governmental filing that may alert opponents to the project’s existence.

• Study the History: Before officially proposing the project, study the local history of opposition activity to earlier projects.• What are the primary arguments/concerns raised in opposition to past projects? • Can the project be tailored in such a way to mitigate those concerns?

• Meet with key regulators to test substance and compliance of project before application is filed.

• Special attention should be paid to those stakeholders and entities most likely to be interested in the project to prevent or minimize the chances of those stakeholder becoming opponents.

• Developers should also take steps to activate those constituencies likely to be supportive of the project (e.g., chambers of commerce, trade unions, environmental activists, NGOs) to neutralize/marginalize the opponents that do materialize.

Neutralizing the Playbook: Building Support

19

• After the strategic rollout, the next step is to find local support and build allies in order to form a supporter coalition.

• Hold local forums/community events.

• Individuals and organizations in support of and opposed to a project should be identified.

• Friendly entities should express support for the project to elected officials and in the media, and should be encouraged to participate at public hearings and file comments during the environmental/administrative review process.

Neutralizing the Playbook: Building Support

20

• Publicly State the Opposition’s Strategy: Make the opposition’s strategy clearer to the general public and governmental officials. In the right circumstances, this can make a developer seem more transparent and the opposition less genuine.• What has the opposition said or done in the past regarding other projects?• Explain why the opposition’s statements are untrue.

• Keep the Opposition Off Balance: Don't rely on the same approaches all of the time. Instead, constantly take the opposition by surprise.

• Learn from the Past: If an opposition organization has a history of employing certain Playbook tactics more than others, chances are that's how they will respond again. Know the history including the preferred tactics of the opposition.

• Be Open to Compromise: Occasionally, project opponents may express a willingness to compromise and support a modified version of the project. Keep an eye open for situations that might turn into a chance to work together but be careful that cooperation doesn’t become capitulation.

Neutralizing the Playbook: Government/Regulatory Relations

21

• Government officials – and especially regulators in the energy industry – are accustomed to dealing with opposition to major projects.

• Experienced governmental officials recognize that some vocal minority of citizens will be resistant to any development – even projects unlikely to have any negative effects (now known as the “BANANA” variation on NIMBY: Build Absolutely Nothing Anywhere Near Anything) – and that those citizens routinely dominate public hearings in an effort to create the appearance of broader opposition than actually exists.

• From this perspective, while public participation can provide an opportunity to inform government officials, it can also lead to unrepresentative obstructionism at odds with the legitimate public interest in realizing beneficial and necessary energy projects.


22

• Neutralizing the Playbook thus requires demonstrating to governmental officials:

1. The economic/environmental/political benefits of the Project; and

2. That the arguments advanced by project opponents are scientifically/factually unsubstantiated and not representative of the larger public interests.

• Carrying this burden requires building credibility/forming positive working relationships with both regulatory and policy-making/elected officials.

• A major project that lacks support from either regulatory or policy-making/elected is extremely unlikely to be realized.


23

• Regulatory Officials:• Keep in regular contact• Keep them informed and give them the raw materials/data necessary to

accurately and comprehensively respond to arguments asserted by opponents.

• Provide information/deliverables in a timely fashion.• Establish factual/technical reliability of developer’s team.

• Elected Officials/Policymakers:• Frequent meetings (but care must be taken regarding open meetings

laws)• Retain qualified lobbyists/government relations professionals as members

of the project development team.• Procure support of local elected officials by demonstrating positive

impacts of project to host communities (e.g., benefits to the local economy, increasing the local tax base, PILOT agreements, etc.).

• Don’t rely on Profiles in Courage – In other words, local elected officials are much less likely to support a project that is generally unpopular with the public. Use robust public relations to prevent support of the project from becoming an untenable political liability.

Neutralizing the Playbook: Building the Record

As noted above, in addition to using public relations to generate opposition to a project, opponents operating under the Playbook will also try and use administrative or judicial litigation to delay or kill energy projects.

To maximize the chances of a project withstanding such a challenge, it is important for developers to build a proper record from the beginning of the environmental review process.

24


NEPA and most state Little NEPAs generally require agencies to take a “hard look” at the potential environmental consequences of an action – and the environmental review documents (e.g., the EA or EIS) must be adequate to demonstrate that the agencies took the requisite “hard look” before making their conclusions regarding a project. E.g., New York Natural Resources Defense Council, Inc. v. Kleppe, 97 S. Ct. 4, 6 (1976) (“…the essential requirement of the NEPA is that before an agency takes major action, it must have taken ‘a “hard look”’ at environmental consequences.’”).

NEPA and the various state Little NEPAs also have their own particular requirements for EA and EIS contents, such as the requirement in NEPA and SEQRA that EISs evaluate the so-called “no action” alternative. See 40 CFR §1502.14(d); 6 NYCRR § 617.9(b)(5)(v).

25


In order to maximize the chance of withstanding a challenge based on an alleged violation of NEPA or state environmental review statute, an energy project developer must ensure that the environmental review record evidences compliance with all of the relevant requirements – both substantive and procedural.

Somewhat counterintuitively, while the substantive environmental standards of NEPA and many state Little NEPAs are flexible, the procedural requirements must be strictly followed. E.g., U.S. v. City of Detroit, 329 F.3d 515, 528 (6th Cir. 2003) (“Although NEPA's substantive environmental standards are flexible and leave room for agency discretion, NEPA's procedural requirements demand strict compliance.”).

26


Project opponents are well-versed in the sometimes complex procedural and substantive requirements of NEPA and its state analogs. A procedural misstep by project developers or the reviewing agencies can provide opponents with an easy mechanism in the war of attrition to set a project back months while adding considerable expense. Accordingly, special attention must be paid to procedural requirements.

With respect to both substantive and procedural requirements, it is generally better to be arguing about whether a requirement was adequately satisfied (e.g., the depth of analysis in an EIS on a given topic) than whether a particular requirement was satisfied at all (e.g., a failure to discuss the “no action” alternative in an EIS).

27

Neutralizing the Playbook

What does successfully neutralizing the Playbook look like?

28

Q&A

29

THANK YOU

30

For more information contact:

Robert J. Alessi, PartnerDLA Piper LLP (US)T: 212.335.4866E: [email protected]

Jeffrey D. Kuhn, Of CounselDLA Piper LLP (US)T: 212.335.4864E: [email protected]

siting and permitting energy projects: the …/media/files/insights/...the playbook has been used...

Documents