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DOE explains NEPA intent, applicability to Loan Guarantee Program

By Anna Austin
Posted September 23, 2009, at 4:49 p.m. CST

The U.S. DOE hosted the second Webinar in a series to provide guidance for completing applications for the DOE Loan Guarantee Program, as amended by the American Recovery and Reinvestment Act of 2009.

The first Webinar, held Sept. 8, emphasized key attributes that may positively influence a project's financial and technical evaluations during the Loan Guarantee Program application review process (See DOE provides loan guarantee application tips at http://www.biomassmagazine.com/article.jsp?article_id=3038&q=DOE provides).

The second Webinar was held Sept. 23 and explained the intent of the National Environmental Policy Act, its applicability to the Loan Guarantee Program, its most significant concerns and the type of data needed to support the NEPA section of applications.

NEPA compliance division director Matthew McMillan said NEPA, which was signed into law Jan. 1, 1970, is viewed as the cornerstone of the environmental statute in the U.S., principally because it preceded most of them, including the U.S. EPA. "It requires that federal agencies consider the environmental consequences of their actions when they are in the decision-making process," he said. "It's important to remember that NEPA is a procedural statue, so we have to be very cognizant of following the procedural provisions of NEPA. Loan guarantees are considered major federal actions, thus they require NEPA review."

The NEPA review considers environmental effects from projects associated with applications received for loan guarantees. "What we do is integrate the NEPA process with the loan guarantee process, so we have environmental information as required in the part II application environmental report."

There are various levels of NEPA review that a project could require, depending on a variety of factors, according to McMillan. The most rigorous level is an environmental impact statement (EIS), he said, which is for projects presumed to have significant environmental effects. "In NEPA context, it is defined in the environmental quality regulations in terms of the context and intensity of the effects, and the regulations provide a variety of factors to look at when trying to assess that intensity. There are ten factors that include things such as impact to resource areas like wetlands, threats to endangered species, and cultural resources."

Environmental controversy also needs to be considered when deciding whether or not an EIS is required. "Not just the ‘not in my back yard' kind of controversy, but more along the lines of where there is disagreement on the potential for and severity of effects," McMillan said.

The next level of NEPA review is an environmental assessment (EA), which can be done at any time for any reason for agency planning purposes, but in this case is done to determine whether the potential impacts to biological, physical resources and sociocultural resources require an EIS. "If it is determined that the environmental effects are not significant, that process ends with the finding of no significant impact," McMillan said.

The last level of NEPA review is a categorical exclusion, which excludes the need to prepare either an EA or EIS, according to McMillan. "It's for categories of actions that the agency has determined has no significant effect either individually or cumulatively. In terms of applicability to the Loan Guarantee Program, it applies to things like re-equipping or retooling existing facilities, or energy efficiency upgrades," he said. "One thing that's important to remember; the real beauty of the NEPA process, from the standpoint of the Loan Guarantee Program, is the influence it can have on the applicant's decision-making process. Normally we consider the influence that NEPA has on the federal decision-making process, but in our experience we've seen it has more applicability to the applicants and how they design their projects, and that is where we really benefit from the NEPA process."

McMillan also discussed meetings that might be required for a project during the NEPA process, which may include consultations with American Indian and Alaskan Native Tribes, State Historic Preservation officers, or the U.S. Fish and Wildlife Service.

As far as what is required in an applicant's environmental report, part I applications should include a detailed description of the proposed action, site information, and enough details to clarify/assess the scope and nature of the project, and whether it needs an EA or EIS, McMillan said. Part II applications determine the level of NEPA review required, but also contain enough information to prepare the NEPA document associated with the level required. "This should include detailed information on potential environmental impacts-the facility's location, description and any status in regard to legislation or permitting that would have a bearing on the project itself," McMillan said. "In general, an applicant, in preparation for the environmental report that goes into the application, may or may not need the assistance of an environmental consulting firm, but certainly would if they were to prepare an EA and most definitely an EIS.

The DOE begins the formal NEPA process when the applicant submits a part II application. "This is when technical and financial eligibility have been determined, and they have received a letter from the department indicating they're invited to negotiate the terms and conditions of a loan agreement," McMillan said. "At that point, we begin the formal NEPA review process, and we will notify the state that we are entering into that process, and what level of NEPA review is going to be required," McMillan said.

A key consideration when preparing an application and designing a project should be environmental impact and related requirements. "One of the real values of the NEPA process is in assisting the applicant's decision-making process and informing them of the pitfalls of some project decisions. For example, where to site a facility," McMillan said. "The use of an existing facility is highly encouraged, as is the use of a brownfield site. Greenfield sites tend to require a lot more environmental review than other sites. We'd like to see very well thought out proposals, such that mitigation isn't required to address environmental effects after the proposal has been submitted. We'd like to see all mitigation integrated into the proposed action so that it comes as part of the proposal, opposed to being mitigation."

To learn more about the U.S. DOE Loan Guarantee Program, visit http://www.lgprogram.energy.gov/.
 

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