NIMBY BANANA

The Essentials, Twenty-fourth Edition

No, I’m not forming a new alternative rock band, although I think NIMBY BANANA is kinda catchy…or maybe it would be a better title for a new game, like a variation on Twister.

In all seriousness, most of us know the “not in my backyard” syndrome, a.k.a.,NIMBY, as one major reason it’s hard to get critical infrastructure sited, but the term “build absolutely nothing anywhere near anything or anyone” might not be as familiar to some. Unfortunately, the BANANA mindset is becoming more prevalent at a time when building infrastructure of all kinds is increasingly important.?

As promised in my last newsletter, I’ll now dig in a bit on permitting and siting and discuss why striking a balance between getting things built and including certain protections in the process is essential.

Siting and Permitting

These terms go together because “neither can live while the other survives,” to quote Professor Dumbledore.?Another way to put it is that you can’t move forward with your project unless you have found the right site(s) and secured the necessary permits to build on that site. It’s also important to note that what I am about to describe is a basic framework, but no one, standard process exists for either siting or permitting given the various jurisdictions involved and the variety of projects being built by critical infrastructure (CI) sectors.

Siting

With that caveat, siting requires the company/utility/carrier interested in building to determine the optimal location – one that meets certain criteria, such as, in the case of power plants, proximity to transmission lines, enough space to build, proximity to roads and/or rail lines, sites at which building will have minimal environmental or cultural impacts, the availability of a skilled workforce, etc.?In the case of sites that are contained to a specific geographic area, such as power plants or chemical factories, the land will likely already be zoned at the local level for industrial/commercial use – if that is not the case, negotiations may occur with the locality to enable such zoning.?Companies often interact with local governments to discuss tax treatment and other economic factors that may influence their siting decisions.

Typically, in these types of siting analyses, willing property-owners negotiate sales to the companies seeking to site. The rub comes with infrastructure like roads, railroad tracks, and transmission lines. These “networks” are often more difficult to site because of the need to access private property, travel through multiple government jurisdictions, and be maintained over time. Such siting involves even more detailed analyses to determine the “paths of least resistance.”?Included in these analyses are evaluation of property ownership and the willingness or unwillingness, as the case may be, of owners in a proposed path to grant access. In these cases, if the state and local governments are supportive of the project, they might grant the infrastructure owner the right of “eminent domain,” as laid out in the U.S. Constitution. I found this good explanation of it from the website of the law firm Kirk, Kirk, Howell, Cutler, and Thomas, LLP:?

State and federal governments have the power to claim private property for public or government use as long as the owner of the property is fairly compensated. This power is called eminent domain and is outlined under the Taking Clause in the Fifth Amendment of the Constitution. The Fourteenth Amendment expands on the clause to give state and local governments eminent domain rights, too.

While the power or right to claim land is called eminent domain, you may also hear the term “land condemnation.” Unlike condemning property because it’s unsafe, land condemnation in this context is the process or act of taking the property and paying the owner for it.

As you can imagine, invoking eminent domain can be highly controversial. Those who have money to fight it often will do so, slowing down the process or even causing the infrastructure owner to seek another path – perhaps in a location where property owners do not have the deep pockets to fight the company/government. Over time, this has sometimes resulted in income-based disparities.?On the other hand, owners of large swaths of land, such as farmers and ranchers, may welcome payment for access to slivers of their land. This touchy subject is obviously case-by-case, but that variability causes another element of uncertainty in the siting of these types of projects.

The good news for CI owners is that, once sited, permitted and built, these companies/utilities/railroads own their “rights-of-way” (i.e. the strip of land over the which the project is built), which typically include some amount of land on either side of the infrastructure itself so that the companies/utilities/railroads can operate and maintain their networks. There are always exceptions and nuances, of course. Railroads, for example, are federally regulated and, as such, can call on federal eminent domain authority, if needed, which overrides authorities at the state and local levels. Contrastingly, until recently, electric utilities have had to gain approvals in every state in which they are seeking to site interstate transmission lines. Electric utilities sought to remedy this situation in the Energy Policy Act of 2005, which was subsequently struck down in court. Congress responded with a tweak to this language to provide clarity and, in May 2024, the Federal Energy Regulatory Commission released a new federal rule based on this change to enable siting of electric transmission lines in federally designated transmission corridors, known as “National Interest Electric Transmission Corridors,”, even if a state or states disagree (note there is nuance to this as well, but this is the gist).

Permitting

In researching this newsletter, I quickly realized that we’re up to our eyeballs in permits.?As individuals, we need permission from various government jurisdictions to drive, to operate boats and other machinery, to teach, to access certain protected land, etc., etc., etc. Besides driving and going to a national park, my personal experience with permits has been related to renovating my house a number of years ago. After working with our builder to get building permits from the county, we then had to have the completed project (in our case, a kitchen) inspected.?The inspector could not have been more condescending, but he did approve the project without modification, thankfully.?

My house is clearly not a large infrastructure project with many vendors and moving parts involved (although it felt that way at times). Since most of us renovate our homes at some point in our lives, however, these experiences do give us glimpses into the world of permitting. My glimpse did not give me a warm and fuzzy feeling, but on the other hand, I’m glad our house is not in danger of collapsing and our gas and electric lines are working properly. While my experience involved permitting at the local level, my focus in this newsletter is on the federal permitting processes for critical infrastructure sectors. It’s important to note that state and local permitting processes are often required and can be a hindrance to project completion (or at least timely project completion).

According to the federal government’s “Permitting Dashboard” website (About the Federal Infrastructure Permitting Dashboard | Permitting Dashboard (performance.gov)):

Proposed infrastructure projects must obtain various permits and environmental reviews to ensure they are designed and constructed in a manner that protects public health, safety, cultural resources, and the environment, and that the public is informed about their potential impacts. Federal permits and reviews safeguard clean water, ensure that projects do not interfere with national defense activities, air or water vessel navigation, or international relations objectives, and safeguard irreplaceable resources such as historic properties, Native American cultural sites, and endangered species.?

With this overview alone, I notice that the federal government includes five major protection objectives in its permitting criteria: public health; safety; cultural resources (including Native American cultural sites and historic properties); the environment (including endangered species and clean water); and national defense.?These criteria can be overlapping, just like the Olympic rings I’ve often referenced in this newsletter, but the one that typically takes the most time and effort for CI sectors is the environmental focus.?

The environmental permitting umbrella is governed by a seminal piece of legislation called the National Environmental Policy Act (NEPA), signed into law by President Richard Nixon on January 1, 1970.? According to the Environmental Protection Agency (EPA):

NEPA?requires federal agencies to assess the environmental effects of their proposed actions prior to making decisions. The range of actions covered by NEPA is broad and includes:

• making decisions on permit applications,
• adopting federal land management actions, and
• constructing highways and other publicly-owned facilities.

Using the NEPA process, agencies evaluate the environmental and related social and economic effects of their proposed actions. Agencies also?provide opportunities for public review and comment on those evaluations.

From a process standpoint, a critical infrastructure owner seeking a permit (or permits) to construct facilities at a given site or path will most likely have some sort of environmental impact, which means they must complete an “Environmental Impact Statement” (EIS) and submit it to the agencies responsible for reviewing the site -? and the agencies in turn use to help them evaluate whether or not permits should be granted.?The White House Council on Environmental Quality (CEQ) has been designated under NEPA to coordinate with other agencies, including EPA, on the NEPA process. Certain permits are issued under NEPA that may not require an EIS – if the project has negligible or moderate environmental impacts the process can be excluded from the EIS or if the applicant is unsure as to the impacts it can perform an environmental assessment to better understand if impacts exist.

There have been few amendments to NEPA until recently, but courts had ruled that certain processes and oversight contained in “enabling legislation” such as the Clean Air Act and Clean Water Act are “functionally equivalent” to the NEPA process and thus exempt from the procedural requirements?of NEPA. According to EPA, “The purpose of the functional equivalence exemption is avoidance of repetitious analysis in a decision-making process that functions in an equivalent way to the NEPA process.”?Thus, these statutes are taken into account in the permitting process, but CI owners are not required to follow a duplicative NEPA process. However, certain other statutes, such as the Endangered Species Act, inform agencies’ decisions as they evaluate NEPA-governed permit applications from CI providers. Are we confused enough yet?

As is evident from EPA’s description at the beginning of this section, the potential interpretation is quite broad for the agencies to determine what is “good” or “bad” from a social or economic impact standpoint.? Court cases have set certain guardrails for the agencies and, at various times since its passage, some in Congress have attempted to revisit NEPA – but as noted above, only small changes had been made until recent passage of the Fiscal Responsibility Act of 2023, signed into law by President Joe Biden. The bipartisan legislation is intended to clarify and streamline processes under NEPA without impacting the integrity of the environmental reviews at its core.?

Given its current implementation, the jury is still out about whether the 2023 NEPA amendments will be helpful from an “on-the-ground” perspective, but the fact that it passed at all speaks to the overarching pressures facing infrastructure projects of all kinds, including those seeking to provide cleaner options.

Beyond the Environment

As noted above, several other important criteria inform NEPA, and often those other criteria spur significant concern from local residents and/or national interest groups, sometimes as much or more than the environmental impacts. For example, Native American tribal representatives have increasingly come forward in recent decades to protect their cultural sites from development.

CI sectors seeking to site and permit needed infrastructure must plan to communicate with, and take feedback from, various stakeholders impacted by their planned projects, from local landowners to tribal leaders to federal, state, and local permitting agencies, to policy makers at the federal, state, and local levels, among others. This all takes time, however, and time is short for some CI sectors to meet ambitious environmental goals, to meet the increasing demand for their essential products or commodities, and to maintain our national defense. It is, therefore, heartening to see amendments to NEPA even in these divisive times.?The marriage of clean energy producers with other CI sectors in efforts to streamline certain duplicative processes, at least at the federal level, demonstrates a recognition of the need across the political divide. BANANAS should only be for eating, after all.

#criticalinfrastructure#building#innovation##infrastructure