Promises Won't Butter Any Bread: Takeaways From the President's Infrastructure Week Celebration

The celebration of President Trump's "Infrastructure Week," kicked off on Tuesday with much optimism at Trump Towers and followed shortly after by an Executive Order to expedite the permitting process, ended today with the president dropping his plans to create an advisory infrastructure council. Regardless of the president's decision to abandon his council, which included energy industry executives, as well as real estate, finance and labor representatives, most viewed the Executive Order as a positive development. Washington politics aside, what does the Executive Order mean for energy industry developers? Will it, in fact, have a meaningful impact by providing a more "coordinated, predictable, and transparent" environmental review and permitting process?

Put simply, the new Order is essentially a more comprehensive version of the Executive Order issued on January 24, 2017 (see What to Make of President Trump's Pipeline Directives), and takes into account the existence of the Council on Environmental Quality and the Federal Permitting Improvement Steering Council, which were established by the FAST Act that was passed by Congress in 2015. The new Executive Order is not limited to energy projects, but rather applies to a broad range of infrastructure initiatives, including bridges, railroads, water resources projects, and even broadband internet. As to its application to pipeline and liquefied natural gas terminals, the following key elements of the Order provide some insight at to the Order's likely impact on these types of projects:

• Applies only to projects that require an environmental impact statement (EIS);
  
• Reiterates that FERC as the "lead Federal agency" is responsible for navigating pipeline and LNG projects through the Federal environmental review process, and establishing a timeline with cooperating agencies to ensure that all Federal authorization decisions are  completed within 90 days of the issuance of the EIS;
  
• Requires FERC to establish performance metrics to facilitate the conduct of  environmental reviews and decisions to achieve the Order's stated goal of processing environmental reviews and authorization decisions within, on average, 2 years following the date of the publication of a notice of intent to prepare an EIS;
  
• Does not apply to state agencies that have been delegated authority to issue Federally required authorizations, such as Clean Water Act Section 401 Water Quality Certificates.

While the 90-day timeframe following environmental review is not novel, the ability to enforce it has been an ongoing battle. Various bills have aimed to provide the FERC with the teeth to truly enforce the timeframe, but none has succeeded at doing little more than placing blame on the FERC. But what impact does a lack of cooperating agency permits have on the project? Of the 32 projects filed since 2008 that were the subject of EIS review -- the Trump administration's concern -- 19, or 59%, received their Certificate of Public Convenience and Necessity within 90 days of the FERC's issuance of the EIS. Despite having a Certificate, however, these projects could still face delays in construction due to the the lack of all necessary delegated permits. Similarly, while the Executive Order has a provision to facilitate the identification and designation of energy right-of-way corridors on Federal lands, it will not have much impact on the siting of electric transmission and power generation assets, because those projects are generally governed by state law.   

While on its face, the Executive Order appears mainly to be an implementation of the FAST Act, the Executive Order does establish what it defines as the "One Federal Decision" process. Under this process, in most cases, the lead agency is to coordinate the creation of a single record of decision that includes all the input from coordinating and participating agencies and which will satisfy the NEPA obligations of all cooperating and participating agencies. The lead agency, in consultation with the cooperating agencies, is to create an environmental review schedule that can be completed within 90 days following the issuance of the final EIS. By focusing the agencies on cooperation and efficiency, that Executive Order may lead to reductions in the timeframes needed for environmental reviews, even for projects that are already taking less than the two-year timeframe to complete.

Proceeding Duration - Certificate Issuance