Originally published for customers August 16, 2024.
What’s the issue?
Environmental Justice (EJ) analysis in federal decision making is undergoing significant changes, with new regulations, screening tools, and litigation shaping how agencies identify and address impacts on disadvantaged communities.
Why does it matter?
These changes are expanding the scope of EJ considerations in federal actions, potentially affecting project approvals, funding allocations, and regulatory decisions across a wide range of sectors.
What’s our view?
While these developments aim to address long-standing inequities, they also introduce new complexities and potential challenges for project proponents and agencies. Stakeholders must stay informed about these evolving tools and requirements to navigate the changing landscape effectively.
Environmental Justice (EJ) analysis in federal decision making is undergoing significant changes, with new regulations, screening tools, and litigation shaping how agencies identify and address impacts on disadvantaged communities. These changes are expanding the scope of EJ considerations in federal actions, potentially affecting project approvals, funding allocations, and regulatory decisions across a wide range of sectors.
While these developments aim to address long-standing inequities, they also introduce new complexities and potential challenges for project proponents and agencies. Stakeholders must stay informed about these evolving tools and requirements to navigate the changing landscape effectively.
Environmental Justice Roots
Environmental justice is an evolving concept shaped by executive orders, case law, guidance, and agency practice dating back to the Clinton era. Two key documents guide most agencies, including FERC: the Council on Environmental Quality's (CEQ) Environmental Justice: Guidance Under the National Environmental Policy Act, and the Promising Practices for EJ Methodologies in NEPA Reviews (Promising Practices), which was prepared by the Federal Interagency Working Group on Environmental Justice & NEPA Committee. The Promising Practices guidance is particularly significant as it establishes the standard many agencies use for EJ analysis — assessing whether impacts on an EJ community are disproportionately high and adverse.
The Biden Administration's focus on EJ is anchored by Executive Order 14096, "Revitalizing Our Nation's Commitment to Environmental Justice for All." This order established the White House Office of Environmental Justice, requires agencies to develop EJ strategic plans, and mandates EJ consideration in environmental reviews under the National Environmental Policy Act (NEPA). The resulting shift in agency approaches to EJ analysis is evident in three key areas: screening tool development, regulatory updates, and recent litigation.
New Screening Tools: CEJST and EJScreen Updates
Two key tools have emerged to identify disadvantaged communities: the Climate and Economic Justice Screening Tool (CEJST) and the Environmental Protection Agency's EJScreen.
The CEJST, developed by CEQ, helps federal agencies identify disadvantaged communities for the Justice40 Initiative, which aims to direct 40 percent of certain federal investment benefits to these communities. It uses publicly available, nationally consistent datasets to identify communities facing climate change, environmental, health, and economic burdens. The EPA's EJScreen tool, recently updated on July 9, 2024, combines environmental and socioeconomic indicators, offering color-coded mapping and standard reports for selected areas.
Both tools are intended for screening, not definitive EJ assessments. Agencies are advised to supplement these tools with additional information and local knowledge, and how they do so is critical as we recently discussed in Another Significant Ruling From the DC Circuit — Rio Grande and Texas LNG Projects Vacated.
The underlying litigation related to the Rio Grande LNG terminal involved the sufficiency of FERC’s EJ analysis, placing it at the forefront of FERC’s evolving approach. According to the order on remand, FERC followed the CEQ Guidance and the Promising Practices Guidance, and used EJScreen as an initial step to gather information for its EJ analysis. A key issue was determining the appropriate radius for this analysis, with FERC eventually settling on 50 kilometers.
To show how this process would look for upcoming projects, we analyzed an approximate proposed route for the DeLa Express project mainline using the EJScreen tool. The resulting “EJScreen Community Report,” includes the map shown below, where the pins indicate the proposed locations of compressor stations.
In the Rio Grande LNG terminal analysis, FERC staff used EJScreen to gather information about minority and low-income populations, potential environmental quality issues, environmental and demographic indicators, and other important factors. The EJScreen report defaults to a “1 mile Ring around the Corridor.” Given that the appropriate radius for EJ analysis was a contentious issue in the Rio Grande LNG case, we will be closely monitoring to see where FERC defines these boundaries for the DeLa project, particularly regarding the compressor stations.
The EJ Screen report for the DeLa project shows a racial breakdown of 66% White, 19% Hispanic, and 10% Black. It also has indexes that combine data on low income and people of color populations with a single environmental indicator to help screen for potential EJ concerns. Notably, the report identifies the presence of a “Justice40 (CEJST)” disadvantaged community and an “EPA IRA disadvantaged community” (referring to communities identified for Inflation Reduction Act funding to support EJ activities) within the area analyzed. Cross-referencing these maps would provide a good starting point for determining which communities to engage in early consultation.
Legal Challenge to New NEPA Regulations: Testing the Boundaries of EJ Analysis
The Biden EJ Executive Order has also influenced CEQ’s recent NEPA implementing regulations revisions, which we discuss broadly in CEQ’s Evolving NEPA Regulations — Part I and CEQ's Evolving NEPA Regulations — Part II. These regulations represent a significant shift in how EJ is incorporated into federal environmental reviews, but the landscape is evolving here too. A coalition of 20 states has recently challenged these new rules, while an opposing coalition of twenty EJ, labor, and conservation groups has intervened to defend them alongside CEQ.
Key changes related to EJ include:
- Codification of EJ Principles: The rule defines "communities with environmental justice concerns" and "environmental justice," and includes EJ in various analyses.
- Alternatives Analysis: The rule requires agencies to identify an "environmentally preferable alternative" considering EJ impacts.
- Significance Determination: EJ is now a factor in determining whether a proposed action's effects are "significant."
- Categorical Exclusions: EJ impacts are now listed as an example of "extraordinary circumstances," which agencies use to determine if using a categorical exclusion is appropriate or greater analysis is warranted.
- Mitigation Measures: Agencies are encouraged to incorporate mitigation measures addressing significant adverse effects on EJ communities.
Many of the arguments raised by the 20 states were also raised in the notice and comment period during the rule’s promulgation, and as a result, addressed in the rule itself. These responses provide a preview of how the litigation may unfold.
The 20 states argue broadly that these provisions exceed NEPA's statutory authority, as EJ is not mentioned in the law. In the rule, CEQ points to NEPA’s goals of ensuring “each person should enjoy a healthful environment” as justification for its inclusion, and the long-standing agency practice of analyzing EJ in NEPA reviews as demonstrated by its own previously issued EJ guidance, caselaw, and executive orders.
The states also contend that the new approach to alternatives analysis including the “environmentally preferable alternative” creates an “impossible-to-meet standard” leading to regulatory uncertainty and litigation. In addressing similar arguments in the rule, CEQ again pointed to NEPA's statutory objectives, text, and policy statements, which include analyzing a reasonable range of alternatives.
Regarding categorical exclusions and mitigation, the states argue the new rules improperly restrict their use and create new obligations. But in the rule, CEQ maintains that agencies retain discretion in these areas.
Conclusions
The balance between addressing EJ concerns and maintaining efficient project development and approval processes will likely remain a key point of tension and debate. The Rio Grande litigation underscores the challenges in determining appropriate EJ analysis scope and the potential for legal challenges. We will closely monitor FERC's adjustments to its EJ analysis in this litigation and developments in the broader NEPA litigation.