Delegation of the Drafting of Environmental Impact Statements: Greene County Planning Board v. Federal Power Commission

Sections of the Federal Power Commission's procedural compliance guidelines for the implementation of the National Environmental Policy Act have recently been struck down by the Court of Appeals for the Second Circuit in Greene County Planning Board v. Federal Power Commission, 2 ELR 20017 (2nd Cir. Jan. 17, 1972). Although the FPC has continued to resist complying with the court's order in other proceedings, and although a number of other federal agencies have procedural compliance guidelines which echo the deficiencies struck down in Greene County, there can be little doubt that the Second Circuit was correct in interpreting NEPA as forbidding the delegation of drafting impact statements to persons other than the "responsible federal official" Other creative devices are available to agencies wishing to use the resources of private applicants in gathering the information necessary to conduct a thorough, intelligent NEPA analysis.

Background of the Case

On August 15, 1968 the Power Authority of Southern New York (PASNY) filed an application to construct and operate a million-kilowatt pumped storage power project outside of Albany. The project consisted of upper and lower reservoirs, a power house, and three transmission lines of 345 kilowatts each. After consulting with several agencies, the Federal Power Commission (FPC) granted the license but withheld approval of the proposed transmission lines until PASNY's plans for environmental protection were developed. PASNY completed its analysis of environmental factors and applied for authorization to construct the three transmission lines on November 11, 1969. One of the three lines, the Bilboa-Leeds line, was contested by several groups, including the Greene County Planning Board, whose motions to intervene were granted on May 19, 1970. While no impact statements were filed on the two lines which were not contested, PASNY filed a preliminary draft statement on the Bilboa-Leeds line on March 21, 1971. In preparing the preliminary draft statement, PASNY was following FPC Order No. 415 (2 ELR 46140) implementing NEPA, § 2.81 (b) of which required each applicant for a license for a "major project" [2 ELR 10154] to file its own statement of environmental impact.After reviewing PASNY's statement as to form, the Commission circulated it to other federal and state agencies for comment. (No question of applying NEPA to an ongoing project was raised, since NEPA's effective date, January 1, 1970, was after PASNY had applied for the transmission line permits, but before the permits were issued for any of the three lines.)

At the hearing ordered by the FPC on the contested line, Greene County asked (i) that the Commission prepare its own statement, rather than rely upon the one prepared by PASNY, and (ii) that the intervenors be reimbursed for expenses by PASNY or by the FPC. The motions were denied by the Presiding Examiner and the Commission affirmed. In this posture the Greene County case — seeking review of the Commission's order — reached the Second Circuit.

The Holding of the Case

In Greene County, the plaintiff asked the Second Circuit (i) to invalidate the Commission's rules delegating too an applicant the agency's responsibility for preparing the impact statement required by § 102(2)(C) of NEPA, and (ii) to rule that the applicant, or in the alternate, the Commission, should pay the intervenor's reasonable out-of-pocket expenses if the intervention is found to have been in the public interest. In making their argument concerning delegation of the Commission's responsibility to prepare the impact statement, plaintiffs relied upon the analysis of the Commission's NEPA procedures which appears in a 1971 ELR Comment. Specifically, the plaintiffs cited the following passage to the Second Circuit:

The FPC appears to avoid direct participation at the critical stage of interagency and intergovernmental consultation. It apparently does not gather information or raise issues; rather, it asks sister agencies and other tiers of government to develop the environmental impact of proposed project through comments on applicant's and (possibly) intervenor's claims as to the environmental harm.At no time does the FPC itself ask for the comments of federal, state and local agencies on how the FPC views a project or how it proposes to dispose of the issue. Yet this is precisely the agency action to which NEPA is directed. 1 ELR 10028. See ELR Dig. [205], Doc. I, p. 23.

Accepting the plaintiff's first argument, the Court of Appeals held that NEPA required the Commission to prepare its own impact statement prior to any formal hearing conducted by the agency. While the court refused to award any out-of-pocket expenses to the intervenors, it specifically stated that "in view of our direction as to the role required of the Commission here" it was unnecessary to decide that issue.

The Second Circuit framed the delegation issue in terms of when the Commission must make its own impact statement,¹ noting that the three proposals before it were (i) that the Commission not be required to make its own statement until it files its final decision (the FPC's favored view), (ii) that the Commission be allowed to prepare its statement on the basis of the hearings before the Presiding Examiner (the FPC's fallback position), or (iii) that the Commission be required to prepare its statement prior to any formal hearing (intervenor's view).

The principal argument advanced by the Commission was that the exception in the Guidelines of the Council of Environmental Quality which allows agencies to prepare drafts on the basis of a hearing subject to the Administrative Procedure Act (APA) if proper notice has been given to all parties released the FPC from the responsibility of independently preparing an impact statement until its final decision was rendered.2 ELR 20021. The Greene County court rejected this proposition² and indicated that the APA is supplemented by the requirements of NEPA. The Commission maintained that the APA's requirements for on-the-record proceedings are predicated on the sufficiency of the notice and the adequacy of a party's opportunity to rebut his adversary's evidence or information. The court held, however, that NEPA's 102 (2) (C) obligations are not limited to adversary proceedings and are not concerned solely with one party's rebutting his adversary's testimony. Rather NEPA places upon the agency, not the contestants of license applications, the burden of representing the public interest in the environment. The Greene County court said that even prior to NEPA, § 10 (a) of the Federal Power Act, 16 U.S.C. § 803, had changed the FPC's role from that under the APA of "an umpire blandly calling balls and strikes for adversaries appearing before it" to providing active, affirmative protection for the public interest. Scenic Hudson I, 1 ELR 20292. "But NEPA, which was a response to an urgent need for a similar approach in all federal agencies, went far beyond" § 10 (a)'s command to actively consider environmental factors:

In addition to the environmental impact statement, Section 102(2) requires the agency, inter alia, to:

(A) utilize a systematic, interdisciplinary approach which will insure the integrated use of the natural and [2 ELR 10155] social sciences and the environmental design arts in planning and in decisionmaking which may have an impact on man's environment;

* * *

(d) study, develop, and describe appropriate alternatives to recommend courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources;

* * *

(E) recognize the worldwide and long-range character of environmental problems…. 2 ELR 20020.

The "primary and nondelegable responsibility" for considering environmental values in the agency's decisionmaking process "lies with the Commission." It is not acceptable for the Commission simply "to collate comments of other federal agencies, its own staff and the intervenors and once again to act as an umpire."

The Second Circuit noted two pitfalls to any system which relied upon an adversary proceeding to develop environmental factors.³ First, the applicant's information may well be based upon "self-serving assumptions." Second, most intervenors will have only limited resources and will not be able to provide effective analyses of environmental factors.

The court refused to award intervenors their expenses because the court interpreted NEPA as placing the onus of preparing environmental impact statements solely on the Commission. Declaring that NEPA explicitly requires the agency's own detailed statement to accompany the proposal through the agency review process, the Second Circuit stated that the hearing before the Presiding Examiner clearly constitutes such agency review and concluded that a detailed statement therefore must be prepared before the hearing.⁴

Finally, the court in Greene County suggested that while it is permissible for the Commission to seek comments from other agencies on the basis of the applicant's preliminary impact statement, under NEPA's mandate to consider environmental factors to "the fullest extent possible," it would be preferable to have the agency prepare its own draft for circulation, as is being done by the AEC after the decision in Calvert Cliffs

Subsequent History

In Greene County the court pointed out in a footnote that the "Commission at nearly every turn has made it difficult procedurally for the intervenors." Even a cursory examination of the pleadings filed in the administrative stages reveals that the court is being very generous to the Commission. See Greene County v. FPC, ELR Dig. No. [205]. This same reluctance has continued to characterize the Commission's operating procedures during its appeal of Greene County. Although its petition for a rehearing en banc has been denied (March 10, 1972), the Commission is taking the position that it is not bound by the decision in Greene County, or at most it is bound only for the one transmission line contested in that case. On remand to the Examiner, the FPC stated that it would prepare its own impact statement, but only to expedite the proceeding, not because of its interpretation of the circuit court opinion. * Since the decision in Greene County on January 19, 1972, the FPC had taken no further action to amend its rules implementing NEPA. Rather, the agency has issued under the original rules and supplimentary rules published on November 19, 1971 (2 ELR 46143) at least 23 separate applications relating to hydroelectric and natural gas facilities, each notice indicating that the applicant's preliminary impact statement will be used at the Presiding Examiner's hearing.

In In re Arkla Gas Co., 2 ELR 30007, the full Commission issued an order subsequent to Greene County in which it indicated that it was not required to follow that decision because an appeal was pending for a rehearing en banc. The Commission affirmed an Examiner's decision granting a pipeline certificate, although the impact statement was prepared by the applicant.

In its petition for rehearing in Greene County, in which the ICC joined as amicus curiae, the Commission argued that there was a fundamental distinction which should be recognized by the courts when applying NEPA. The claimed distinction was between licensing or certifying activities and activities requiring an agency to initiate and construct a project — the difference, for example, between the FPC and the Corps of Engineers. The FPC argued that the requirements of NEPA would be satisfied if the "agency has before it and takes into proper account all possible approaches to a particular project," and that because an applicant for a license typically possesses the relevant environmental data, the Commission should be allowed to elicit such information at the hearing stage. The FPC and the ICC also argued that licensing agencies are not able to control their workload, and that requiring staff to prepare impact [2 ELR 10156] statements would necessitate additional personnel for which no funds had been budgeted. The final contention raised by the agencies was that agency "review" did not begin until after the Presiding Examiner's initial decision, and that NEPA did not require an agency statement until that time.

Other Agencies Delegation § 102 Responsibilities

The specific issue raised in Greene County with respect to the FPC exists in general for many other agencies which appear to fall short of full implementation of NEPA because they delegate impact statement preparation. Since Greene County, to the knowledge of ELR, no agency has revised its procedures specifically to accommodate the decision in that case. Moreover, although the CEQ has issued a detailed Memorandum to federal agencies about how they might revise their procedures to reflect more nearly the legislative intent of NEPA and of important court decisions interpreting it, the CEQ Memorandum pointedly fails to mention the delegation problem raised by the Greene County decision.

In the ICC's Greene County amicus brief, that agency argued that the FPC, the ICC, the Departments of Commerce, the Interior, Transportation and the Civil Aeronautics Board were all violators of the non-delegation rule announced in Greene County. In the following section ELR will examine these regulations and others which appear to violate Greene County.

Federal Highway Administration

The implementing regulations for the FHWA are contained in Policy and Procedure Memorandum (PPM) 90-1, 2 ELR 46106. Paragraph 6(b) states:

Draft environmental statements … shall be prepared by the HA [state highway department]… , and paragraph 6(i) provides that:

The HA shall prepare a final environmental statement.

In addition to declaring that the HA will prepare the draft impact statement, paragraph 6(b) sets out the responsibilities of the Federal agency at that point:

A representative of the FHWA division office shall indicate that the draft statement has been cleared for circulation and comment by signing and dating the draft statement.

The state/federal division of responsibility is further clarified by paragraph 6(c):

The draft environmental statement … is to be circulated by the HA to the appropriate agencies … for comment….

Paragraphs 6(d) through 6(i) define the responsibilities of the state highway agency after the preparation of the draft statement but before the preparation of the final statement. These paragraphs direct the state agency to hold hearings, to distribute copies of the draft statement to named agencies, and to make the statement available to the public for comment. Included in the list of agencies which are to be asked for comments are the FHWA Office of Environmental Policy and the Department of Transportation's Office of Environmental and Urban Systems (TEU). Paragraph 6(i) places upon the state agency the responsibility for assessing and responding to the comments received from other governmental agencies and the general public.

The depth of federal agency (either DOT or FHWA) review of the environmental impact of a proposed highway undertaking after the completion of the final statements is difficult to ascertain. Paragraph 6(j) of PPM 90-1 places responsibility for FHWA "review and acceptance of the final impact statement" upon the Regional Federal Highway Administrator, who apparently becomes the "responsible official" within the meaning of NEPA for compliance with the statute. But the extent of his review is not explicated. Once he has signed the final statement, he must forward it to the FHWA Office of Environmental Policy, which in turn must comply with paragraph 6(k) of PPM 90-1:

FHWA's Office of Environmental Policy shall be responsible for:

(1) Submitting the necessary copies of the final statement to TEU for concurrence;

(2) Informing the Regional Federal Highway Administrator of such concurrence (at which time the final statement may be considered to be an officially approved U.S. DOT statement); and

(3) Informing the Regional Federal Highway Administrator when CEQ is furnished copies of the final statement.

The requirement of TEU "concurrence" is potentially an effective method for forcing serious attention to TEU's comments on the draft impact statement. But whether this potential is realized in the environmental review of highway undertakings is not known.

Policy and Procedure Memorandum 90-1 is being challenged in at least two pending judicial proceedings. In National Forest Preservation Group v. Volpe, Civil Action No. 2152 (D. Mont., Complaint filed May 10, 1972), the plaintiffs are attempting to stop the FHWA from processing the state's preliminary plans to build a federal-aid primary highway which will connect the base of Lone Mountain, south of Bozeman, Montana, with Highway U.S. 191. One thrust of the National Forest Preservation Group's complaint is that PPM 90-1 illegally delegates to the state highway division the FHWA's duty to prepare an impact statement. The same argument is being made in Georgia Botanical Society v. Volpe, Civil No. 16126 (N.D. Ga., Complaint filed Feb. 16, 1972). The plaintiffs there maintain that under Calvert Cliffs Coordinating Committee, Inc. v. Atomic Energy Commission, 1 ELR 20346 (D.C. Cir. 1971), Ely v. Velde, 1 ELR 20612 (4th Cir. 1971), and Greene County (in each of which agency regulations were unhesitatingly struck down), the court should declare that PPM 90-1 also is an invalid delegation of authority. [2 ELR 10157] In addition, the plaintiffs point out that the AEC's regulations in Calvert Cliffs at least contained colorable provisions for action by the staff, while PPM 90-1 limits the responsibility of the "responsible federal official" to merely "signing and dating the draft statement" (6(h)), and to other ministerial duties (6(h), (k) and (1)). After tracing the legislative history of NEPA's "action-forcing" provisions in 102 (2) (C), the Georgia Botanical Society forcefully argues that only by doing the actual work can agency officials conduct the "informed decision-making" that the court in Calvert Cliffs said was mandated by NEPA. It is significant to note that the plaintiffs charge that the FHWA was not sufficiently aware of the proposed highway project to be able to criticize the impact statement submitted by the state highway division.⁵

Federal Aviation Administration

The FAA rules implementing NEPA are contained in Interim Instructions for Processing Airport Development Actions Affecting the Environment, 5050.2, reproduced in full at 2 ELR 46096. The relevant portions of the FAA's rules are:

6….

d. As used herein, the phrase "request for Federal action" means the submission by a sponsor of a request for airport development aid….

e. Every request for Federal action, prior to agency approval thereof, shall be supported by either an environmental statement meeting the requirements of section 102 (2) (c) of the Environmental Act or by a negative declaration that the proposed action will not have a significant impact on the environment.

8. Agency processing. Upon receipt of a properly supported request for Federal action, Airports area/district offices shall technically examine the aeronautical aspects of the request. If such evaluation determines that the project … should be recommended, … the request is to be processed to the appropriate Airports regional office, where environmental evaluation is to proceed as follows:

a. If the request for Federal action is supported by a negative declaration, appropriate action shall be taken to confirm that judgment. If not confirmed, the request is to be returned to the sponsoring public agency with notice that a draft 102 (2) (c) environmental statement must accompany its resubmittal. If confirmed, the negative declaration is to be endorsed by the appropriate regional director to denote his concurrence …. Negative declarations need not be coordinated outside of the FAA.

b. If the request is supported by a draft 102 (2) (c) statement, the statement shall be evaluated for general adequacy and compliance with the guidance and instructions contained in this order. When necessary, such steps shall be taken with the applicant as are needed to produce a draft statement considered adequate for intergovernmental coordination. Thereafter, Airports regional offices shall:

(1) Reproduce the statement…;

(2) Immediately transmit to Washington…;

(3) Accomplish the required intergovernmental coordination…;

(4) Reproduce and transmit comments resulting therefrom to Washington…;

(5) Prepare, execute, and as needed, distribute the final text statement (reflecting therein as appropriate the comments received from reviewing government agencies) ….

The FAA's implementation regulations also are being challenged. In Boston v. Volpe, Civil Action No. 71-970-J (D. Mass., Complaint filed May 3, 1971), the City of Boston is protesting a proposed outer taxiway at Logan Airport, alleging that the FAA has abdicated its responsibilities under NEPA. The plaintiff specifically attacks §§ 6 and 8 of the FAA regulations. The Massachusetts Port Authority's "request for federal action," which contained a negative declaration concluding that the addition would not significantly affect the environment, was readily endorsed by the FAA — despite the fact that the million-dollar taxiway clearly would have significant environmental effects. According to the City of Boston's brief, it was only after the Authority's request for aid was approved and an allocation of funds for construction made by the FAA that the Authority, upon the urgings of plaintiff, agreed to prepare an impact statement. The City argues that under Calvert Cliffs and Greene County it is an illegal delegation for the state authority to prepare its own impact statement.

Civil Aeronautics Board

CAB's rules implementing NEPA are set out in § 399.110, reproduced at 2 ELR 46124.

(2) To the extent that proposals for legislation initiated by the Board and rulemaking proceedings not decided on the basis of records developed at hearings may constitute actions which might significantly affect the quality of the human environment, such actions will be carried out in accordance with the procedures for draft and final environmental statements contained in sections 6-9 of the Guidelines of the Council on Environmental Quality…. 2 ELR 46049.

The indication in (c) (2) that the impact statement [2 ELR 10158] will be prepared on the basis of those hearings subject to the APA is confirmed upon reading (c) (5), which refers to "each environmental impact statement contained in an initial decision of a hearing examiner …." Section (c) (6), the only reference to the time the public shall receive a copy of the statement under the Freedom of Information Act, merely tates that the examiner's decision and the comments made at the hearing will be made available to the public. Section (c) (7) provides that the time for public comments extends through the examiner's decision.

(5) In general, each environmental impact statement contained in an initial decision of a hearing examiner or a decision of the Board will be accompanied by a summary ….

(6) Ten (10) copies of the Board's decision … will be filed with the Council on Environmental Quality …. Copies of the Board's decision and the aforementioned comments will also be made available to the public as provided by 5 U.S.C. 552 ….

(7) The Board believes that the time available for agency and public comment on proposed economic licensing and rulemaking actions, beginning with the order or notice instituting the proceeding and extending through the evidentiary and decisional processes, including, where applicable, the initial decision of a hearing examiner and possible reconsideration of Board decisions, will in almost all cases suffice to permit meaningful consideration of the environmental issues ….

ELR is not aware of any cases currently challenging the CAB regulations on the delegation issue.

Department of Agriculture

TheDepartment's rules implementing NEPA are contained in Memorandum No. 1695, Suppl. 4, reproduced at 2 ELR 46056. The relevant portion reads:

Availability of statements to the public. * * *

Agencies which hold hearings on proposed administrative actions or legislation should make the draft environmental statement available to the public at least fifteen (15) days prior to the time of the relevant hearings, except where the agency prepares the draft statement on the basis of a hearing subject to the Administrative Procedure Act and preceded by adequate public notice and information to identify the issues and obtain comments [emphasis supplied].

ELR is not aware of any current challenges to USDA's rules.

Department of the Interior

Interior's Rules implementing NEPA are contained in Department Manual Part 516, Chapter 2, reproduced at 2 ELR 46079. While the rules are somewhat ambiguous, the ICC amicus brief, supra, filed for the rehearing in Greene County, stated that Interior's procedures were in violation of the Greene County decision. The portion set out below indicates that a potential delegation issue exists.

.8 Public participation and availability of statements —

.A The public will be provided timely information and material sufficient for an understanding of plans and programs with environmental impact in order to obtain the views of interested parties. The public will also be provided information on alternative courses of action.

.B Public hearings may be held to solicit the views of interested parties. Notice of such hearings shall include publication in the FEDERAL REGISTER no less than thirty (30) days before the hearing date … If is decided to prepare a draft environmental statement prior to a relevant hearing, the statement shall be made available to the public at least fifteen (15) days, and preferably thirty (30) days, prior to the hearing date [emphasis supplied] ….

ELR is not aware of any current challenges to these rules.

Interstate Commerce Commission

The ICC's Rules implementing NEPA are contained in Ex Parte Order No. 55 (Sub-No. 4), 49 CFR Part 1100, reproduced at 2 ELR 46125. In its amicus brief supporting the petition for rehearing in Greene County, the ICC conceded that it was violating the requirements established in that decision. The relevant portion of the rules is set out below.

(5) In general, each environmental impact statement contained in an initial decision of a hearing examiner or a decision of the Board will be accompanied by a summary thereof ….

(6) Ten (10) copies of the Board's decision (together with a copy of all written comments) … will be filed with the Council on Environmental Quality in the Executive Office of the President. Copies of the Board's decision and the aforementioned comments will also be made available to the public as provided by 5 U.S.C. 552 and Part 310 of this chapter. * * *

(7) The Board believes that the time available for agency and public comment on proposed economic licensing and rulemaking actions, beginning with the order or notice instituting the proceeding and extending through the evidentiary and decional processes, including, where applicable, the initial decision of a hearing examiner and possible reconsideration of Board decisions, will in almost all cases suffice to permit meaningful consideration of the environmental issues involved ….

ELR is not aware of any current challenges to these rules.

Should Agencies Be Allowed to Delegate Impact Statement Preparation to Interested Parties?

Agencies which are totally responsible for the initiation and implementation of projects should not be allowed to delegate the drafting of impact statements to private parties. Thus, the Corps of Engineers must itself draft a statement on a proposed dam. Nor should agencies which merely approve, fund, or otherwise enable projects without a trial-type hearing be allowed to delegate impact statement preparation; e.g., the Federal Highway Administration must itself draft a statement on a proposed highway. In either case, any delegation would comply neither with NEPA nor with the CEQ guidelines on the subject.

[2 ELR 10159]

On the other hand, a case might be made the trial-type hearings following the APA are a device which assures that environmental values will not be slighted, even if the actual drafting of an impact statement is not done by the acting federal agency. If one accepts this argument, then it would be proper for agencies which utilize trial-type hearings to enter the 102 process after the hearing and to delegate impact statement preparation prior to the examiner's initial decision. Proponents of this viewpoint would make several arguments. First, they might point out that hearing examiners are expected to be quasi-judicial, impartial and competent. A party objecting to the applicant's assessment of environmental impacts has the right to recive notice, to present proof, and to cross-examine opposing witnesses. Differences of opinion can be explored in painstaking detail and incorporated in the examiner's findings. The examiner's decision must be based on the record and upon a full, reasoned articulation of the relevant factors. In addition, the standard of judicial review — substantial evidence on the record taken as a whole — is quite high. Thus, for environmental and non-environmental challenges of agency action alike, the APA offers a credible opportunity for effective challenge.

Proponents of the viewpoint might add that practical arguments may be marshalled against the Greene County rule. Many agencies say they do not have the manpower at the present time to prepare statements. As the ICC and FPC pointed out to the Second Circuit, an agency has no power to control the flow of applications for licenses, permits, loans and other enablements. Without the ability to control the flow, an agency is unable to predict staffing requirements for impact statement preparation.

When these arguments for reversing the Greene County rule are considered as a whole, they are not convincing. Agencies have more diverse functions than courts and should not be expected to act as passive umpires presiding over private disputes. Agencies have statutory missions to accomplish, some of which may be inimical to environmental values. The nature of controversies may be — and in the environmental area usually is — "polycentric", i.e., a large number of results may follow and many interests or groups may be affected.⁶ Administrative decision-making, therefore, even where trial-type hearings under the APA are held, may be a far cry from the frequently "bipolar" nature of judicial cases. As one student of the administrative process has remarked:

At the extreme, the trial may involve issues of such enormous breadth, complexity and inter-relationship that the case loses all form and structure except as a firm presiding officer or dominant party, perhaps the agency's staff, gives it shape [emphasis added].⁷

All of these forces tend to diffuse the rigorous examination of the environmental impacts and alternatives which NEPA requires. By contrast, the earliest possible injection of NEPA procedures into the administrative process could have a tonic effect. A detailed environmental analysis prepared by the agency staff of "environmentalists" — biologists as well as engineers, ecologists as well as systems analysts — who would develop their own expertise, might prevent a later hearing from becoming bogged down in the "big" environmental issues. This would leave the presiding examiner free to assess the merits of the proceeding, dealing with the vital, focused environmental issues.

Methods of Internalizing the Costs of Adequate NEPA Compliance

From the above discussion, the conclusion is inescapable that NEPA at a minimum requires a "responsible Federal official" to prepare a detailed statement of specific environmental impacts which must accompany the proposed agency initiative throughout the agency's ordinary decision-making processes. No exceptions appear in the Act, nor does its legislative history imply that an agency may delegate to private parties the early phases of the study of environmental effects mandated by NEPA. As noted above, the Greene County court correctly applies the underlying rationale of NEPA by requiring the agency itself to focus its attention on the environmental effects of its proposals at the earliest stages of development. In no other way can the agency adequately inform itself so that it can intelligently implement the national environmental policy. Nor can it serve the public by making of NEPA a "full disclosure" law. See EDF v. Corps of Engineers (Gillham Dam), 1 ELR 20130 (E.D. Ark. 1971).

But when this is understood, the strict rule does not mean that agencies must bear all the brunt of the additional work and expense imposed by an intelligent application of the NEPA procedure. As long as a responsible federal official prepares and circulates for comment a detailed impact statement which accompanies the proposed agency action at every stage of agency decision-making, the agency is free to require that private parties supply information, hire consultants, conduct field studies, etc., in aid of the agency's responsibilities. The synthesis of such information and its evaluation, however, is the agency's responsibility. The difference between requiring applicants to prepare preliminary drafts of the agency's statement and requiring them to submit factual information is not as [2 ELR 10160] subtle as it may at first seem. As pointed out in the February, 1971 ELR Comment which discussed the FPC's NEPA procedures (1 ELR 10027-28), allowing applicants to draft the statement puts the opportunity for framing the issues, weighting values and establishing emphases in the hands of the parties most interested in minimizing the appearance of adverse environmental impacts. The agency thus is vulnerable to manipulation as to what the important environmental values which may be affected are, unless the agency's staff itself examines the suggested project in the field and frames the issues upon which facts are needed.

In some instances the bulk of the factual studies may be conducted by applicants without an appreciable danger of bias. The test of whether the development of data may be safely entrusted to a private applicant should be whether it is of such an essentially factual nature that it may be subsequently validated through independent agency inquiry. For this reason, and to aid the agency in monitoring the accuracy of data provided, applicants should be required to specify their sources and describe their methods. To the extent that unquantified values are noted, or an attempt at quantification is made, care should be taken by the agency to assure that its special obligations under NEPA § 102 (2) (A) are satisfied.

Although the agency cannot avoid hiring adequate staff for the preparation of impact statements, including field research, much can be done within the limits of NEPA to require applicants to conduct or fund factual studies. Fact-finding constitutes the bulk of the time and expense involved in an adequate environmental assessment. If the test suggested above regarding the permissible limits of involvement for applicants is applied, significant costs associated with fact-finding may be shifted to the applicant. As an additional safeguard, agencies might explore the possibiligy of certifying consulting firms which then might conduct parts of the environmental analysis at the applicant's expense. Or consultants might simply be subject to agency approval. (The chief drawback to this proposal is that consulting firms with adequate skills simply do not yet exist in adequate numbers to meet the need. And there is some reason to look reluctantly upon this necessity mothering the sudden invention of Impact Statements, Inc.)

Other costs might be shifted to the applicants by requiring a license or other fee where an applicant's project is likely to cause environmental harm. Federal fees which help offset the cost of the government of monitoring activities in the private sector are not without precedent; Congress requires the Securities and Exchange Commission to impose both stiff reporting requirements and fees upon firms desiring to register securities for sale in interstate commerce.

All of the above suggestions have the desirable effect of shifting the costs of environmental assessments away from the agencies (and hence away from the taxpayers) to the parties whose proposed action necessitates the environmental analysis and who stand to benefit if government approves the proposal. In economists' terms, the suggestions are an extension of the proposition that the external social costs of environmental harm should be internalized into the costs of doing business of those firms which "cost" society a loss of environmental amenity and into the cost of living of those consumers who purchase environmentally damaging goods and services.

1. It was conceded that the transmission line was a "major federal action" requiring the agency to prepare a detailed impact statement under § 102(2)(C). 2 ELR 20019.

2. The court makes it clear that the Guidelines are merely advisory, and are not binding:

Although the guidelines are merely advisory and the Council on Environmental Quality has no authority to prescribe regulations governing compliance with NEPA, we would not lightly suggest that the Council … has misconstrued NEPA. Although the Commission's interpretation of Section 10(e) of the Guidelines is superficially appealing, it flies in the fact of Section 102(2) (C) of NEPA which explicitly requires the agency's own detailed statement "to accompany the proposal through the existing agency review process." 2 ELR 20021.

3. A third danger which the court fails to mention is that private applicants are not subject to the disclosure requirements of the Freedom of Information Act, whereas the agencies clearly are. This could make environmental information much more difficult for environmentalists to acquire and to rebut.

4. In a footnote the court clarified what it meant by a formal hearing, stating that it would not be objectionable for an agency to gather environmental information at a preliminary hearing and then hold a second, formal hearing on the merits of the application.

* As ELR goes to press, it has learned that the FPC has convinced the Solicitor-General to file a petition for writ of certiorari to the Second Circuit. Pending action on the petition by the Supreme Court, the PFC will discontinue staff preparation of the draft environmental impact statement. The FPC has stated that is believes this action is necessary in order to preclude the possibility that the issue for which Supreme Court review is being sought might become moot. FPC News, June 2, 1972, p. 5.

5. An observation may be made regarding the FHWA approach to review of final impact statements. NEPA requires the final statement to accompany a proposed agency action through the ordinary decision-making process. But the environmental review of sections of a highway envisioned by PPM 90-1, particularly paragraph 6, is disconnected from the ordinary process of approving state-submitted high "projects" for federal reimbursement. (See generally, Peterson and Kennan, "The Federal-Aid Highway Program: Administrative Proceedings and Judicial Interpretation," 2 ELR 50001). To the extent that the separation of this review from the ordinary "project" approval process permits more rational consideration of the environmental impact of a planned highway by avoiding piecemeal consideration, it is a welcome attempt to implement NEPA's policy. But because this procedure may tend to divorce the evaluation of environmental factors from the actual highway approval process that for the most part occurs at the division engineer level, a goal of NEPA — to instill environmental awareness in every level of federal decision-making — may be difficult to attain in highway planning.

6. Lon Fuller, "The Forms and Limits of Adjudication" 36 (unpublished mimeograph), cited in Boyer, "A Re-evaluation of Administrative Trial-type Hearings for Resolving Complex Scientific and Economic Issues," A Staff Report of the Administrative Conference of the United States (December 1, 1971), p. 2.

7. See "Trial-type Hearings in Nuclear Power Plant Siting," remarks by Roger Cramton, Chairman, Administrative Conference of the United States, delivered at the ALI-ABA course of study on atomic energy, Washington, D.C. (November 12, 1971), pp. 3-4.