The Selection of an Alaskan Natural Gas Pipeline: A Preliminary Appraisal

On November 8, 1977, President Carter signed into law a joint congressional resolution¹ ratifying his selection of a proposal by the Alcan Company to construct a pipeline to transport natural gas from Alaska's North Slope to the lower 48 states. This event marked the culmination of a new and complex procedure established by the Alaska Natural Gas Transportation Act of 1976 (ANGTA)² to facilitate the identification of the most advantageous means of tapping this important new energy source. The Act directed the President to make the initial selection of a gas transportation system, provided for public and state and federal government input, subjected the President's decision to congressional ratification, and exempted the entire process from judicial review. The Council on Environmental Quality (CEQ) was given the central role of holding public hearings and expressing a formal opinion as to the substance of the environmental impacts of the various proposals under consideration and the adequacy of the environmental impact statements (EISs) previously prepared. This procedure represents a provocative approach to resource decision making which avoids much of the delay inherent in the established administrative and judicial mehods of preparing and reviewing environmental impact statements. It thus may hold promise as a starting point on which to model similar mechanisms which may, in the future, be deemed necessary when confronted with national questions requiring expedited resolution of complex issues. Questions exist, however, as to whether this procedure allows the sober and deliberate consideration of environmental amenities contemplated by the National Environmental Policy Act (NEPA),³ and whether it ensures an accuracy and soundness of judgment commensurate with the importance of the Alaskan gas transportation decision.

The Alaska Natural Gas Transportation Act

In March 1974, only months after the initial public recognition of the "energy crisis" as a result of the Arab oil boycott, a consortium of American and Canadian gas pipeline companies submitted to the Federal Power Commission (FPC) and the Department of the Interior a proposal to construct a natural gas pipeline from Prudhoe Bay on Alaska's North Slope to terminals in northwestern and northern midwest states. Competing proposals were filed by the El Paso and Alcan Companies in September 1974 and in July 1976.⁴ Pursuant to the Natural Gas Act,⁵ hearings were commenced by the FPC in April 1975 to determine whether any of the proposals should be issued the certificate of "public convenience and necessity" required under that Act prior to construction.

By early 1976 it became apparent that the FPC's proceedings were becoming unusually protracted, and Congress intervened. On October 22 Congress enacted the Alaska Natural Gas Transportation Act of 1976, which ordered the earliest practical termination of the pending proceedings and essentially prejudged the issue of whether a pipeline should be built, declaring that:

The expeditious construction of a viable natural gas transportation system for delivery of Alaska natural gas to United States markets is in the national interest….⁶

The Act set aside the entire existing administrative mechanism for determining whether and where a pipeline should be built, under which final judgment rests with a body of independentregulatory commissioners, and established instead a four-step procedure which brought in new participants and gave new roles to the old ones.

Initially, the FPC was to submit to the President by May 1, 1977 a report expressing the Commission's recommended choice from the competing proposals. During the six months allotted the FPC to make its determination, the agency reviewed the record and the findings of the administrative law judge with respect to the recently terminated hearings. It also entertained another round of oral and written argument from the applicants. On May 2, 1977, the Commission reported to the President that its members were deadlocked: although all members agreed that an overland gas pipeline should be constructed (thereby rejecting the El Paso liquefied natural gas (LNG) alternative), two voted to select the Arctic Gas/MacKenzie Valley corridor and two insisted upon the Alcan proposal.

Next, the Act directed the President to review the proposals, to select one of the competing transportation systems, and to submit this decision to Congress for ratification. Section 6(d) of the Act directed CEQ to hold public hearings on the contents of the impact statements and to submit its own report to the President. That report was to include a summary of the public comments received, an expression of CEQ's views as to the environmental consequences of each of the alternative pipeline systems, and a formal opinion as to the "legal and factual sufficiency" of the respective EIS. CEQ reported that the impact statements were adequate for the [8 ELR 10015] purpose of simply choosing among the alternative proposals, and concluded that of the three proposals the Alcan project posed the least risk of severe environmental degradation.⁷ The report's conclusiveness was undermined, however, by CEQ's expression of concern over the lack of sufficient background data with which to fully evaluate the risks of the Alcan proposal and doubts about the claimed effectiveness of the planned mitigation measures.

In addition to CEQ's advice, President Carter was to solicit the opinions of several other federal agencies on matters within their jurisdiction. The Department of the Interior came to the same conclusion as had CEQ and echoed its concern over the inadequacy of the data base. The Office of Coastal Zone Management investigated the socioeconomic impacts upon the pipeline corridor; the Federal Energy Administration predicted the extent to which new supplies of natural gas would alleviate existing shortages and reduce dependence on foreign sources; the Treasury Department advised that private financing of the undertaking would be feasible and preferable to government backing. Other reports advising that the construction of a pipeline would be feasible or advisable were also received from the Departments of State, Defense, and Transportation. Intensive negotiations were held between United States and Canadian representatives at the highest levels, resulting in the signing of an agreement defining the rights and obligations of the two countries.⁸ On September 22, 1977, the President informed Congress of his selection of the Alcan project.⁹ The President's decision would become final upon the enactment of a joint congressional resolution of approval within 60 days of transmittal. Given this time restraint, the large number of pressing and controversial issues then before Congress, and the prohibition against modification of the proposal, the function of the Congress was effectively limited to ensuring that the President's decision was not grossly mistaken.¹⁰

Perhaps the most important feature of the procedure is the elimination of judicial review of both the existing EISs and any subsequent federal permits, leases, or other actions to implement the project. The legislative history reveals an acute congressional awareness of delays in past federal projects which have resulted from the issuance of injunctions pursuant to litigation under NEPA and a determination to prevent similar delays in this case.Indeed, the statute went so far as to provide that if the President at any time determines that any provision of federal law might operate to impede the speedy completion of construction, he shall bring such provisions to the attention of Congress, which shall suspend their effect for purposes of this project.¹¹

Case History: the Trans-Alaska Oil Pipeline Controversy

Although the procedures established by ANGTA are unconventional, many of the underlying concepts, particularly those imposing limitations on judicial review, surfaced several years earlier in cnnection with the successfl congressional effort to break the logjam stalling governmental approval of the trans-Alaska oil pipeline. In 1971, the Wilderness Society brought an action in federal court for an injunction against further proceedings to approve the pipeline, arguing that the impact statements prepared by the Department of the Interior did not satisfy NEPA, and that the rights-of-way necessary to the construction of the project had been granted in violation of the Mineral Leasing Act of 1920. The court of appeals agreed with the plaintiff's non-NEPA claims and ordered that an injunction be issued against further federal approval with the project.¹² The decision raised an immediate storm of protest in Congress,¹³ ranging from invective directed at the environmental advocates to concern over the possibility that even if the Mineral Leasing Act were amended to permit approval of the pipeline, it might be delayed again because of the NEPA issues which remained unresolved.

The congressional solution was swift and effective. Both houses began consideration of proposals to amend the troublesome rights-of-way provsions of the Mineral Leasing Act and in the same stroke substantially limit the jurisdiction of the courts to hear NEPA challenges to either the adequacy of the existing EISs or any other federal action taken in furtherance of the project.¹⁴ The bill adopted by the House permitted only suits raising certain constitutional and non-NEPA claims and is the progenitor of § 10(b)(2) of the ANGTA. Both the Senate and the House bills included a declaration of congressional finding, binding on the courts, that all previous impact statements and federal procedures had satisfied NEPA, but this feature was found "unnecessary and subject to misinterpretation" by the conference committee and was eliminated from the final version.¹⁵ This type of factual finding was resurrected in the 1976 Act and is also reiterated in the joint resolution of November 8, 1977.

Also noteworthy is that in 1973 both the House and Senate versions narrowly escaped amendments which would have delayed congressional action one year pending a National Academy of Sciences study of project impact. This concept is not unlike the series of studies and hearings undertaken by CEQ pursuant to the 1976 Act.

The parallels between the 1973 oil pipeline legislation and its 1976 natural gas counterpart demonstrate that the ANGTA is not the novel reform in resource decision making that it first appeared. It is rather a synthesis of time-tested restrictions of judicial review with a set of revamped environmental assessment measures designed [8 ELR 10016] to offset the absence of NEPA's substantive and procedural safeguards.

An Initial Assessment

The ANGTA procedure can be viewed as having essentially two objectives: first, to eliminate the two principal threats to the expeditious completion of the project — the labyrinthine administrative proceedings required under the Natural Gas Act and the injunctive powers of the courts under NEPA; second, to place a decision so complex and interwined with diverse issues of national policy in the hands of the President and the Congress, who are accustomed to reconciling conflicting policy views.

While placing superior responsibility on the President, the Act assigned the unanswered policy questions to the agencies with the appropriate jurisdiction, a concept which appears to have been largely successful. The factual presentations and analyses contributed by the agencies were heavily relied upon by the President and to some extent the Congress in making their decisions and will continue to be useful if the Alcan project is constructed. These reports, however, require large commitments of resources, and in the future they can only be justified in the case of similarly major federal actions.

The role played by CEQ is particularly noteworthy. Section 6(d) of ANGTA directed the Council to hold public hearings with respect to the EISs and to submit to the President a report summarizing the comments received, setting forth the Council's views as to the legal and factual sufficiency of the impact statements prepared by FPC and the Department of the Interior and evaluating the environmental impacts of the several proposals. Assuming that the undigested EISs, which in draft and final form occupy over nine feet of shelf space, were of little use to the President, CEQ's report was the major source of environmental data and analysis available to the President. That report was disappointingly succincet, however, considering the importance of the decisions to be reached in reliance on it. For example, the conclusion that "the impact statements are legally and factually sufficient under NEPA" is supported by only four pages of explanation. Such summary treatment may reflect the futility in dissecting documents which will probably never be read in their entirety and never legally challenged. In addition, the analysis of the environmental impacts of all three proposals comprises only 15 pages, and only three of those are devoted to Alcan project impacts. Nowhere in the analysis of the Alcan proposal does the report address the potential project impacts upon air quality, noise levels, aesthetics, risk of accidents, and several other parameters which it would be assumed the President would consider in making this momentous decision. Although length is not necessarily correlative with adequacy, the depth of this analysis can hardly be appropriate to the magnitude of the project impacts or the complexity of the EISs. These shortcomings point up the fact that reliance upon CEQ for large and detailed environmental studies is misplaced. Recent cutbacks in staff as well as its chronically heavy workload render it unable to adequately perform such large scale undertakings. It is regrettable that the 1973 proposal to require a study by the National Academy of Sciences, whose larger staff would be better able to conduct such studies, was not given further thought prior to the enactment of ANGTA.

Judicial Review

The principal purpose of directing CEQ to comment on the sufficiency of the various EISs was to replace the NEPA oversight normally provided by the courts but limited under ANGTA. The Council is adept at this and its opinions are typically accorded great weight.¹⁶ Removing the courts from this scheme, however, also removes the general beneficial effects that judicial review exerts upon the administrative process. The congressional decision to forego this benfit in order to accelerate the overall process is understandable, but it may have been unnecessary.

The case law suggests that when a statute establishes an administrative scheme which requires swift federal action, the courts will read into the statute an implicit exemption from the requirements of NEPA.¹⁷ Other legislative programs, while not dependent for their success upon expedition, may involve important national interests and entail excessive costs if delayed. In such cases, courts have balanced the need for compliance with NEPA's procedural safeguards with the urgency of the project at hand, and in some instances permitted the project to continue concurrently with court-ordered revisions in the impact statement.¹⁸

Given the strong congressional declaration of the national interest in the swift completion of an Alaska natural gas pipeline, it is likely that had ANGTA been drafted to permit judicial review of federal actions promoting the pipeline, injunctive relief would have been granted only where the gravest environmental or other harm was imminent. The inclusion of such a feature would have retained the salutary presence of judicial review and have preserved the principal means of averting ecological disasters without materially increasing the risk of an expensive or disruptive judicially-ordered delay.

Conclusion

In one sense, the apparatus created by ANGTA will ultimately be judged in terms of results: in the space of 13 months following the enactment of ANGTA the largest private construction project in history was processed through the channels of the federal bureaucracy, the White House, and the Congress. Although this tangible benefit may be quite large, the intangible environmental, social, and other costs are unknown. It is precisely the dangers in this type of trade-off at which NEPA is aimed. The spirit of the Act is that to the fullest extent possible [8 ELR 10017] the government should attempt to ascertain at the earliest possible point, certainly before a final decision is reached, the nature and extent of the intangible costs associated with every proposed action and balance them against the anticipated benefits. The ANGTA procedure leaves an unmistakable impression that Congress, though motivated by a legitimate desire to ease the national energy dilemma, rushed to the judgment that construction of an Alaskan natural gas pipeline was in the national interest,¹⁹ whatever the risks. This strong singularity of purpose pervaded the subsequent administrative attempts to quantify the related intangible losses, and may have colored the substantive judgment of more than agency.²⁰

There are times at which the governmental response to an immediate need will be very costly if delayed. At such times there should be a means of circumventing the delays inherent in the NEPA review process, as well as other bureaucratic obstructions. The apparatus set up by ANGTA, though subject to serious environmental deficiencies, is a sign that a similar mechanism might be developed which would provide for swift but more balanced decision making.

1. H.R. J. Res. 621; Pub. L. No. 95-158 (1977).

2. 15 U.S.C. §§ 719-719o, ELR STAT. & REG. 41282.

3. 42 U.S.C. § 4332. Despite the ANGTA's limitations on judicial review under NEPA, the general requirement that environmental effects be considered as part of all agency decisions remains in effect.

4. The FPC proceedings considered three proposals: (1) the Arctic Gas Co. plan called for a pipeline to proceed from Prudhoe Bay east along the North Slope, crossing the Arctic Game Range into Canada, south through the MacKenzie Valley corridor, branching in Alberta to reach terminals in Illinois and California; (2) the El Paso Alaska Co. proposed to construct a pipeline paralleling the existing oil pipeline to an all-weather port on the southern shore of Alaska, where the gas would be liquefied and transported by cryogenic tanker to California; (3) the Alcan Co. proposed a pipeline which would follow the oil pipeline corridor as far as Fairbanks, and then would proceed southeast along the Alcan Highway through Canada, branching to terminate at western and midwestern facilities in the United States.

5. 15 U.S.C. § 717 et seq.

6. 15 U.S.C. § 719.

7. COUNCIL ON ENVIRONMENTAL QUALITY, REPORT TO THE PRESIDENT ON ENVIRONMENTAL IMPACTS OF PROPOSED ALASKA GAS TRANSPORTATION CORRIDORS, July 1, 1977, at 20.

8. United States — Canadian Transit Pipeline Agreement, August 3, 1977.

9. 13 WEEKLY COMP. OF PRES. DOC. 1399, Sept. 22, 1977.

10. S. REP. NO. 567, 95th Cong., 1st Sess. 22 (1977).

11. 15 U.S.C. §§ 719e, 719f.

12. Wilderness Soc'y v. Morton, 479 F.2d 842 (D.C. Cir.), cert. denied, 411 U.S. 917 (1973).

13. Hearings on Rights-of-Way Across Federal Lands Before the Senate Comm. n Interior and Insular Affairs, 93d Cong., 1st Sess. 218 (1973).

14. S. 1081, H.R. 9130, 93d Cong., 1st Sess. (1973).

15. As finally passed, the bill provided that such actions "shall be taken without further action under the National Environmental Policy Act." 43 U.S.C. § 1652(a) (1974).

16. See, e.g., Warm Springs Dam Task Force v. Gribble, 94 S. Ct. 2542, 4 ELR 20666 (Douglas, J., 1974). But see, e.g., Greene Cty. Planning Bd. v. FPC, 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972).

17. American Smelting & Refining Co. v. FPC, 494 F.2d 925, 948-950, 4 ELR 20348 (D.C. Cir.), cert. denied, 95 S. Ct. 148 (1974); Atlanta Gas Light v. FPC, 476 F.2d 142, 150, 4 ELR 20323 (5th Cir. 1973); Gulf Oil v. Simon, 502 F.2d 1154, 1156-57, 5 ELR 20021 (Temp. Emer. Ct. App. 1974).

18. Concerned About Trident, Inc. v. Rumsfeld, 555 F.2d 817, 6 ELR 20787 (D.C. Cir. 1976); Comm. for Nuclear Responsibility v. Seaborg, 463 F.2d 796, 1 ELR 20532 (D.C. Cir. 1971).

19. 15 U.S.C. § 719.

20. See, for example the cryptic, half page summary of the alternatives to building an Alaskan natural gas pipeline within the EISs prepared by the FPC, FEDERAL POWER COMMISSION, ALASKA NATURAL GAS TRANSPORTATION SYSTEMS, FINAL ENVIRONMENTAL IMPACT STATEMENT (El Paso) vol. II, at 503; FEDERAL POWER COMMISSION, ALASKA NATURAL GAS TRANSPORTATION SYSTEMS, FINAL ENVIRONMENTAL IMPACT STATEMENT (Alcan) vol. III, at 375 (1976). See also, the CEQ report, which stated:

We must emphasize here that our conclusions are predicated on the assumption of a compelling need for gas from Alaska. From one perspective the most obvious environmental choice is to build no Alaska gas transportation system whatever.

CEQ Rep., n. 8, supra, at 21.