HSE & Sustainability

New US Guidance Emphasizes Indirect Emissions in Federal Approval Process

Proposed energy projects needing US federal permits will come under increased scrutiny related to the scope and magnitude of potential emissions.

Source: Getty Images.

The Biden administration released new guidance last week that will steer how US federal agencies account for greenhouse-gas emissions in environmental reviews and permitting for new energy projects.

The updates come from the White House Council on Environmental Quality (CEQ) and encourage federal agencies charged with approving projects to mitigate emissions “to the greatest extent possible” using science-based reduction policies. In addition to other energy sectors, the CEQ guidance applies to oil and gas infrastructure that require federal approval, such as pipelines.

The CEQ updates include an emphasis on what it calls a “rule of reason” that demands the scope of study for any given energy project be proportional to the estimated impact of its emissions profile. In other words, low-emissions projects such as renewable energy installations will be granted a less-detailed analysis than more emissions-intensive projects.

Also clarified are best practices for the analysis of indirect effects from projects on climate change.

Regarding the oil and gas industry, direct effects include emissions released as a result of exploring for and producing hydrocarbons. Indirect effects that US authorities will scrutinize include the processing, refining, transportation, and end use of fossil fuels (e.g., combustion for power generation).

According to a notice posted 9 January by the CEQ, “Indirect emissions are often reasonably foreseeable since quantifiable connections frequently exist between a proposed activity that involves use or conveyance of a commodity or resource and changes relating to the production or consumption of that resource.”

The CEQ adds as an example how the building of a natural-gas pipeline encourages additional gas production and consumption that generate indirect emissions that will contribute to climate change.

The long-term impact and durability of the new guidance may depend on the outcome of next year's US presidential election. Midway through his first 4-year term, President Joe Biden’s emissions regulations build upon those first introduced by the Barack Obama administration, which were subsequently rescinded by the administration of Donald Trump.