Section 309 of the Clean Air Act Revisited: EPA Makes Second Referral of "Environmentally Unsatisfactory" Federal Proposal to CEQ

[6 ELR 10059]

Section 309,¹ a little-known but broad-ranging provision of the Clean Air Act of 1970, empowers the EPA Administrator to review and comment upon all environmental impact statements prepared by other federal agencies. In addition, the section provides a "referral" mechanism by which the Administrator can apply leverage against the sponsoring agency to have an environmentally harmful project modified or dropped altogether.

EPA has seen fit to make use of this referral authority only twice. The first instance concerned the prospect of unacceptable thermal discharges from a planned nuclear power plant.² The more recent exercise³ of the agency's referral power was directed at the Department of Interior's proposal, as part of its program to accelerate oil and gas production from the Outer Continental Shelf, to lease areas under the Northern Gulf of Alaska for oil gas drilling. This second referral provides a useful illustration of the inherent strengths and weaknesses of § 309(b).

Section 309(a) of the Act requires that the Administrator

review and comment in writing on the environmental impact of any matter relating to duties and responsibilities granted pursuant to this chapter or other provisions of the authority of the Administrator, contained in any … major Federal agency action … to which section 4332(2)(C) of [Public Law 91-190 NEPA] applies…. Such written comment shall be made public at the conclusion of any such review.⁴

EPA has developed a fairly elaborate procedure for reviewing draft and final impact statements and publishes its comments on a semi-monthly basis in the Federal Register. Normally, when EPA finds fault with a proposed action, interagency consultation results in minor modifications in project design in accordance with EPA's recommendations, or withdrawal of EPA's objections after further discussions.

If, however, the agency finds a particular proposal to be accompanied by especially eggregious environmental harms, it has a further option. Under § 309(b),

[i]n the event the Administrator determines [as a result of § 309(a) review] that any such legislation, action, or regulation is unsatisfactory from the standpoint of public health or welfare or environmental quality, he shall publish his determination and the matter shall be referred to the Council on Environmental Quality.⁵

In his energy message of January 23, 1974, then-President Nixon announced a policy of accelerated outer continental shelf (OCS) leasing, but agreed to defer final judgment on opening the Atlantic and Alaskan OCS to oil and gas exploration pending the completion of a CEQ study on the environmental impacts of drilling in these areas. The study,⁶ which was completed in April 1974, rated drilling in the Gulf of Alaska as presenting the greatest environmental risks of any of the areas studied. And when EPA reviewed Interior's draft environmental impact statement for proceeding with leasing in the northern Gulf of Alaska, the agency found that it contained "insufficient information" and that the proposed leasing itself would be "unsatisfactory because of its potentially harmful effect on the environment."⁷ The agency recommended that the sale be delayed pending the issuance of adequate OCS orders governing operations in the area and the completion of environmental baseline studies.

Interior was thus well-forewarned when EPA, after reviewing the final EIS for the lease sale and finding that its earlier recommendations had not been heeded, formally referred the matter to CEQ under § 309(b). CEQ reviewed the situation and on January 23, 1976, seconded EPA's recommendation for delay.⁸ The planned lease sale should be held up, according to the CEQ, "for a sufficient period of time" to permit further environmental analysis.

On February 18, 1976,⁹ Secretary of the Interior Thomas S. Kleppe announced his decision to move ahead with the lease sale. The Secretary said, however, that the area open to bidding would be reduced by some 700,000 acres, or about 40 percent, leaving a total of 1.1 million acres available for leasing. Kleppe admitted that this modified sale still did not comport with the CEQ recommendation, but argued that the most environmentally risky tracts had been removed and that the chance of accidental environmental damage from drilling on the remaining acreage is minimal.

This second § 309(b) referral, while it did not kill the suspect project, at least resulted in a major revision of the proposed lease sale in order to mitigate possible environmental harms. It illustrates a central characteristic of § 309(b), namely that the referral mechanism is essentially a political process. The effectiveness of a referral in modifying or killing an environmentally unsatisfactory project is thus directly dependent on the interagency weight attached to CEQ (and EPA) opposition to another agency's proposal and the relative political power behind the particular project at issue. EPA and CEQ have been understandably reluctant to squander what small political capital they have within the Ford Administration by formally opposing many [6 ELR 10060] projects through § 309(b), or by picking on proposals which the White House considers a political priority. Unfortunately, it is exactly the latter kind of project which is likely to go the full § 309(b) route, since it is in those instances that the sponsoring agency is typically less willing to buck the political tide and agree to significant modifications as a result of consultation with EPA at the draft EIS review stage.

While EPA's reluctance to use the referral mechanism more often can easily be understood, it has nonetheless come as a disappointment to those who felt that § 309's enactment would give the agency the power to draw routinely

the CEQ's attention to proposed federal action with serious environmental impacts so that the final decision will be made on a higher administrative level than the agency level at which it would ordinarily be made. Thus under § 309(b) the Administrator has been given an effective way to have environmental impacts decided in serious cases at cabinet level and at the White House.¹⁰

Paradoxically though, it may be that this limited use of § 309(b) works to greater advantage for environmentalists than would a more routine referral process. The fact that EPA rarely finds a proposed action "environmentally unsatisfactory" serves to make such a finding all the more compelling when it does occur.

Given the weight accorded CEQ (and EPA) evaluations of the adequacy of agency NEPA compliance by the Warm Springs¹¹ decision, a § 309(b) referral might also serve as the basis for injunctive relief in a NEPA suit against the project in question. This issue is directly relevant to the northern Gulf of Alaska lease sale since the State of Alaska is currently considering whether to challenge Secretary Kleppe's decision to proceed in spite of CEQ's recommendation.

The analogy between Warm Springs and the Gulf of Alaska lease sale is not without difficulties, however. In Warm Springs, CEQ had expressly characterized the project EIS as inadequate, while the Council simply advised the Interior Department to delay the Gulf of Alaska lease sale without specifically attacking the adequacy of the impact statement. And EPA, in commenting on the draft EIS for the lease sale, found it to contain "insufficient information," but declined to rate it as "inadequate."

Whereas plaintiffs' claims in Warm Springs thus presented a fairly straightforward request for injunctive relief to remedy a procedural violation of § 102(2)(C)¹² of NEPA, a suit challenging the lease sale on the basis of EPA's referral and CEQ's consequent recommendation for delay would raise the more difficult question of substantive review under § 101(b) of the statute.¹³ Such a challenge would seemingly have to argue that Secretary Kleppe's decision to proceed with the sale constituted an abuse of discretion in view of EPA and CEQ agreement that the project is environmentally unsatisfactory. This argument loses some strength because of CEQ's admission that Secretary Kleppe must factor other policy considerations into his decision:

The Council recognizes that the final decision is yours and you must decide whether the environmental benefits gained by such delay outweigh the cost of postponing potential oil and gas production….¹⁴

In addition, to have any chance of success, such a claim would have to be filed in the District of Columbia Circuit rather than in the Ninth Circuit, since the former court recognizes¹⁵ the theoretical existence of substantive review under NEPA while the latter court does not.¹⁶

On the other hand, it might be argued that the EPA and CEQ recommendations to delay the sale, in conjunction with EPA's finding that the draft EIS contained insufficient information, imply that the decision to proceed with leasing was based on insufficient knowledge of the possible environmental consequences. Such a construction would frame the issue as a procedural violation of § 102(2)(C) analogous to Warm Springs.

Whatever the outcome of a potential legal challenge to the Gulf of Alaska lease sale, the deletion of 40 percent of the proposed acreage from the sale and the public controversy which the referral and subsequent CEQ recommendation have generated show that while § 309(b) has not been used as frequently as some environmentalists had hoped it would, it is certainly not nugatory. And its potential utility within an Administration which weights environmental concerns on a par with other political priorities still waits to be tested.

1. 42 U.S.C. § 1857h-7, ELR 41218. See also Healy, The Environmental Protection Agency's Duty to Oversee NEPA's Implementation: § 309 of the Clean Air Act, 3 ELR 50071 (1973).

2. See Environmental Protection Agency — Recent Developments, 4 ELR 10037 (Mar. 1974).

3. 41 Fed. Reg. 4850 (Feb. 2, 1976).

4. 42 U.S.C. § 1857h-7(a), ELR 41218.

5. 42 U.S.C. § 1857h-7(b), ELR 41218. On the CEQ's responsibilities for overseeing implementation of NEPA's substantive environmental goals, see Caldwell, The National Environmental Policy Act: Retrospect and Prospect, 6 ELR 50034-35 (Mar. 1976).

6. Council on Environmental Quality, OCS Oil and Gas — An Environment Assessment (1974).

7. 40 Fed. Reg. 51687 (Nov. 6, 1975).

8. Letter from John Busterud, Acting Chairman of CEQ, to Thomas S. Kleppe, Secretary of Interior, Jan. 23, 1976.

9. Washington Post, Feb. 19, 1976, § A at 3.

10. Comment, Section 309 of the Clean Air Act: EPA's Duty to Comment on Environmental Impacts, 1 ELR 10146, 10150 (1971).

11. Warm Springs Dam Task Force v. Gribble, 94 S. Ct. 2542, 4 ELR 20666 (Douglas, Circuit Justice), stay aff'd per curiam, 418 U.S. 910, 4 ELR 20669 (1974). See also Comment, Supreme Court Ushers in New Role for CEQ in Warm Springs Case, 4 ELR 10130 (Sept. 1974).

12. 42 U.S.C. § 4332(2)(C), ELR 41009.

13. 42 U.S.C. § 4331(b), ELR 41009

14. Letter, supra n. 8.

15. Calvert Cliffs' Coordinating Committee v. AEC, 449 F.2d 1109, 1 ELR 20346(D.C. Cir. 1971).

16. Lathan v. Brinegar, 506 F.2d 677, 693, 4 ELR 20802, 20808 (9th Cir. 1974).