Application of NEPA to Long-Range Technology Development Programs: SIPI v. AEC

The U.S. Court of Appeals for the District of Columbia Circuit has issued another landmark decision under the National Environmental Policy Act. The ruling in Scientists' Institute for Public Information, Inc. v. Atomic Energy Commission, reprinted in full at 3 ELR 20525, goes significantly beyond the court's earlier decisions in Calvert Cliffs¹ and NRDC v. Morton.² After three years of litigation which has largely focused on the application of NEPA's action-forcing requirements to discrete federal projects, SIPI shifts attention to NEPA's impact on the earliest phases of agency policy formulation and program development.³

The case deals with the AEC's long-range commitment to develop the Liquid-Metal Fast Breeder Reactor (LMFBR), so called because of its capacity to generate fuel for other reactors. Research in the area has been encouraged within the AEC for over 20 years, with Congress recently appropriating an average of $100 million per year for the program. Future outlays will bring the total to about $2 billion by 1980, as much as that spent federally for the development of all other energy sources combined. The AEC estimates that by the year 2000 one fourth of all electrical energy in the United States will be produced by LMFBRs. At that same time the breeder will have also produced 600,000 cubic feet of high-level concentrated radioactive wastes which will retain harmful levels of radioactivity for hundreds of years. In light of the program's rapid movement toward implementation and its potential environmental hazards, the plaintiffs requested that a programmatic impact statement assessing aggregate effects and technological alternatives be filed now while the program is still in the research and development stages.

First, and most importantly, SIPI accepted plaintiff's contention that NEPA's action-forcing requirements apply to research and development programs prior to the implementation phase.To implement this holding, the court endorsed the concept of program impact statements on federal research and development programs. Such statements, prepared in the earliest stages of a federal activity, focus on cumulative effects and broad questions of policy. They do not replace separate statements on discrete projects within the program. Preparation of such statements must be advanced to the earliest practicable point in time, to be determined by a four-part test.

Second, the court held that harms to organizational interests in information, separate from economic, aesthetic or other harms suffered by individuals, may be sufficient to confer standing under NEPA. Third, agencies are to issue negative declarations whenever a decision is made not to issue an impact statement, and that decision will be subject to judicial review under a "rational basis" test. Fourth, the court suggested new institutional responses for the full implementation of NEPA in agency policy and decision making.

NEPA's Applicability to Research and Development Programs

Prior to SIPI, no court had considered the question of whether NEPA's action-forcing requirements were applicable to research and development programs. Such programs are distinguishable from the usual discrete projects which are the subject of most litigation under the Act. Prior to implementation their effects are somewhat hypothetical. Yet the court found no reason not to apply NEPA to the LMFBR program, holding that it was both a "proposal for legislation" and a "major Federal action" within the meaning of the Act.

The court found that the AEC's request for funds for the breeder program, which appears as a line item in the annual budget submitted to Congress, was a legislative proposal which must be accompanied by an environmental impact statement. The opinion relied on CEQ Guideline 5(a) (i),⁴ which specifically includes appropriations requests as legislative proposals, reaching the same conclusion as did the Sixth Circuit in Environmental Defense Fund v. Tennessee Valley Authority (Tellico Dam).⁵ As in the Tellico Dam case, the court held NEPA's action-forcing requirements to be applicable to requests for funding brought before Congress after NEPA's enactment even when the program was begun prior to 1970 and Congress had not itself requested such a statement at the time it considered the request.

The court also found the breeder program to be a "major Federal action" as contemplated by NEPA. It noted that the program was a "concrete" project amenable to close scrutiny in many ways. First, vast amounts of resources were being "irretrievably committed" to the program, including natural resources and radioactive fuels, as well as funds that could be used in alternative research areas. Second, the court rejected the AEC's contention that the research program was still at a stage where implementation and its effects were remote and hypothetical. Full implementation, noted Judge Wright, was neither remote nor uncertain. Funding for the breeder was [3 ELR 10100] admittedly detracting from research into other viable future energy alternatives. The AEC had announced that by 1980 it hoped to have developed both a workable and practical LMFBR technology, and a viable commercial framework for its immediate implementation. Finally, the court noted that once technological advances are brought to a stage of commercial feasibility, "the investment in their development acts to compel their application." The commitment of resources to a program creates economic interests which shift the balance of environmental costs and economic and other benefits in favor of ultimate implementation. For these reasons the court concluded that present steps being taken by the AEC in the development of the LMFBR affected the quality of the environment in a "very practical sense" even prior to implementation.

The AEC argues that not enough information was presently available to compile an impact statement that would meet NEPA's strict standard of a "detailed statement." In view of earlier court decisions imposing rather stringent requirements on the level of thoroughness required in the statement's preparation, the AEC's argument had merit. The court responded to this by suggesting that a rule of reason be applied to determine the amount of detail required by NEPA. Thus a broad statement need not be as specific as later statements on discrete projects, and need only meet standards which reflect the present state of knowledge. Where uncertainties exist, the statement should point them out and later clarify or resolve them as the program progresses. Thus, while the court rejected the need for "crystal ball inquiry," it held that the duty to assess environmental effects to "the fullest extent possible" cannot be thwarted by claims that such an assessment would be difficult or incomplete.

Programmatic Assessment of Major Federal Actions

After finding the LMFBR program to be both a major federal action and a proposal for legislation subject to NEPA, the court held that the Act required in this instance a programmatic assessment of environmental impacts separate from the individual statements issued on demonstration projects. SIPI thus required that the overall program be evaluated in a suitably generalized statement in light of its cumulative effects and alternative energy sources, going beyond factors discussed in case-by-case analyses.⁶ Whether this overall assessment is included within a NEPA statement on a particular facility was "of little moment" to the court. Yet the opinion did stress that the two statements are functionally and analytically distinct, each considering different issues and aimed at different audiences. The court concludes that it would "make more sense" to issue a separate programmatic statement.

The D.C. Circuit had previously faced the question of whether a program statement assessing broad policy questions should accompany or attach to a statement on a separate project. In NRDC v. Morton the court found that because no general evaluation of the nation's short-term energy policy had been made at the higher levels of government, the burden now fell upon the Department of the Interior and the Bureau of Land Management in the context of a proposed sale of off-shore drilling leases. The burden proved to be too great, forcing the retraction of the government's offer. SIPI draws upon the results of NRDC v. Morton, noting that it would be a mistake in a very practical sense to freight such a burden on a single report on a single facility. Instead it suggests a "tiered" approach to environmental assessment under NEPA, where the earliest phases of a program are accompanied by a broad policy statement assessing generalized factors, and subsequent actions are accompanied by more specific statements.⁷ In total, NEPA is applied in a farreaching manner to the many aspects of decision making outside of project implementation, including the earliest consideration of a project by Congress as a legislative proposal.

The Timing of a Program Impact Statement

The court noted that "whether a statement on the overall LMFBR program should be issued now or at some uncertain date in the future is the most difficult question presented by this case." Analytically there are two competing considerations. First, NEPA requires the consideration of environmental effects at the earliest stages of policy making and program development. On the other hand, little is known in the early stages of technology research, and when future application of the technology is "both doubtful and remote," it may well be impossible to draft a meaningful impact statement". To resolve the tension, the court applied a four-part balancing test:

How likely is the technology to prove commercially feasible, and how soon will that court? To what extent is meaningful information presently available on the effects of application of the technology and of alternatives and their effects? To what extent are irretrievable commitments being made and options precluded as the development program progresses? How severe will be the environmental effects if the technology does prove commercially feasible?

In the case of the LMFBR, the court found that each of these factors required the immediate preparation of a statement. While the court applied this test to a specific research and development project, it also intended for it to apply to any long-term program which contemplates subsequent actions, such as reclamation projects, wildlife management programs on federal lands, etc. Any inaccuracies or omissions in the statement resulting from its compilation at early stages in program development may be remedied by subsequently amending the statement as the program progresses.

[3 ELR 10101]

Standing under NEPA

SIPI recognized that injury to organizational interests in information may be enough to confer standing in an action to ensure compliance with NEPA. The court rejected the notion that the plaintiffs had to allege "injury do discrete economic, aesthetic, or environmental interests." Instead the Scientists' Institute met a broader test for standing which expanded upon that articulated by the Supreme Court in Sierra Club v. Morton.⁸ SIPI held that "injury in fact" may consist of a denial of access to information on environmental effects under NEPA, separate from any claim of injury to economic, aesthetic, or recreational interests. It also holds that injury to "organizational activities" separate from any injury to individual members may be enough to grant standing to an organization or group. Since the Scientists' Institute's activities included the collection and dissemination of information on important social issues, an activity frustrated by the AEC's refusal to issue an impact statement, the court found the organization to have more than a "mere interest in the problem" sufficient to allow the suit.

There are several undercurrents which influenced the court's ruling on standing. First, the court noted that to deny standing or to limit it to harms to discrete interests in the case of a research and development program would "insulate administrative action from judicial review" and thus frustrate the purposes of NEPA. Second, NEPA arguably creates a public right to information on environmental effects resulting from govermental actions. Though the court did not rely on this, some commentators have suggested that injury to this interest alone should be sufficient to confer stadning.⁹ Finally, while a broad grant of standing to all members of the public to sue under NEPA to protect informational interests might be unworkable, the Institute has more than a "mere interest," and thus a special status, in that its primary organizational activity is the collection of such information. It was therefore perhaps a better plaintiff for the purposes of an action to enforce NEPA's informational rights.

Judicial Review of Agency Decision Not to Issue a NEPA Statement

SIPI held that an agency's decision not to file a NEPA statement lay in the border zone of judicial review, being a mixed question of law and fact. Since the Act does not plainly commit the determination to the agencies, the court held that judicial scrutiny should proceed under the more searching standard of a "rational basis" test rather than that of the "arbitrary and capricious" standard of review. The court's position suggests that agency decisions involving NEPA will be subject to active scrutiny by the courts to assure the full implementation of the Act.

The history of litigation under NEPA suggests that SIPI is consistent with the attitude of most other courts in the area of judicial review of agency threshold determinations. While the standards of review announced in each decision have varied from "arbitrary and capricious" to de novo review, the results in most cases have suggested an active scrutiny is taking place no matter what standard is articulated.¹⁰ The court in SIPI noted that judicial interest in the matter is justified because "agency decisions in the environmental area touch on fundamental personal interests in life and health [which have] a special claim to judicial protection."

To focus judicial review, SIPI endorsed the notion that agencies issue a negative declaration of reasons for not issuing a statement at a particular time. The agencies are required to take their screening functions seriously, and to provide a record for review which shows full-faith consideration was given to all relevant data and that the decision has a basis both in the record and in the law. A similar ruling was made by the Second Circuit in Hanly v. Kleindienst,¹¹ where a negative threshold determination was subjected to a rigorous scrutiny by the court. As the authority grows on this matter, it may be easier to prepare an impact statement than to prepare a negative declaration that will pass judicial muster.

Agency Procedures Implementing NEPA in Long-range Programs

The court noted that the first function of judicial review is to require agencies to develop a "framework for principled decision making." The ultimate goal of review under NEPA is to have the agencies internalize the standards and policies of the Act in their ongoing processes. To effectuate the application of NEPA to long-range research and development programs which require attention over long periods, SIPI suggests that agencies develop either formal or informal procedures for the regular evaluation of "whether the time for drafting a NEPA statement has arrived." Thus the court found that the implementation of NEPA requires procedural and institutional changes within the agencies which foster an "environmental ethic" of continual and dynamic concern for environmental dangers.

The identification and modification of institutional shortcomings which contribute to environmental deterioration was a major concern of Congress in enacting NEPA. Thus in § 103 agencies are required to point out [3 ELR 10102] those areas where they believe their statutory mandate might conflict with the policies of the Act. SIPI suggests that to further guarantee that the Act is fully implemented, the agencies must look to their existing procedures as well, modifying those which conflict with NEPA and affirmatively instituting new procedures consistent with the Act. The court thus foresees a basic reformulation of agency decision making, as Congress had originally intended.

1. 1 ELR 20346 (D.C. Cir. 1971).

2. 2 ELR 20029 (D.C. Cir. 1972).

3. See Comment, 1 ELR 10090.

4. 1 ELR 46049.

5. 2 ELR 20726 (6th Cir. 1972).

6. See Comment, 1 ELR 10152-53.

7. See Comment, 2 ELR 10038.

8. 2 ELR 20192 (U.S. Apr. 19, 1972).

9. See Frederick R. Anderson, NEPA in the Courts: A Legal Analysis of the National Environmental Policy Act (1973) 36-37.

10. For a full discussion of judicial review of agency threshold determinations, see NEPA in the Courts, supra at 96-106.

11. 2 ELR 20717 (2d Cir. 1972).