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vide a vehicle for bringing to these decisions comprehensive environmental policy balancing, including land use considerations. Once again, however, the question that is raised is does NEPA, with the statutes of EPA provides sufficient guidance on overall policy and objectives. II. Effect of EPA actions on other Federal agencies under NEPA

Under the Clean Air Act (a) “new sources" are required to meet EPA specified performance standards; (b) all “sources" are required to meet hazardous pollutant emission standards, and (c) all “sources” are subject to monitoring and data collection requirements. Similar requirements for new and hazardous sources would be imposed under the pending water pollution bill, and all "sources" of water pollutants would be required to get an EPA permit and a State water quality certification. (Under existing section 21 (b) of the Federal Water Pollution Control Act state certification is a precondition to any Federal licensing action. Under the “Baker amendment" certification and a section 402 permit would be a precondition of a NEPA waiver.) Many "sources" of air and water pollution will also be required to obtain an AEC license, an FPC license or other non-EPA Federal permit.

The Calvert Cliffs decision holds that, notwithstanding a State water quality certification under Section 21 (b), AEC must conduct a de novo review of water quality requirements and include water quality considerations in an overall "balancing” or “cost-benefit” test.

Questions arise as to whether the Corps of Engineers would, prior to granting a Section 10 permit (Section 19 of the Refuse Act of 1899 relating to obstructions in the navigable waters) for an outfall from a new fossil fueled steam plant, be required to conduct a de novo review of air pollution emission standards.

If this is the case, the National Environmental Policy Act would have the effect of requiring each Federal licensing or permitting agency to develop the staff capability to review the environmental-technical merits and demerits of Standards or requirements established by EPA.

The “Paker amendment" to S. 2770 represents an effort to give finality to the water quality and effluent requirements set by EPA while retaining certain authority for the licensing or permitting agency to consider the costbenefits of water pollution control as a part of overall "balancing test". Question as to interpretation of the “Baker" amendment should be raised in the course of the hearings.

There is considerable question under the emerging case law as to the impact of NEPA on the statutory authority and obligations of various federal agencies. Two cases in particular—the Outer Continental Shelf Lands case and the TransAlaska Pipeline case seem to require agencies to consider alternatives to a proposed action (section 102 (2) (C) (iii) of NEPA) that are beyond the authority of the given agency to adopt. For example, in the Outer Continental Shelf Lands case the Court concluded that the Department of the Interior should have considered (as an alternative to the sale of leases) adjustments in the oil import quotas and changes in the FPC's natural gas rate structure. There are also strong intimations in a number of these opinions that NEPA requires the selection of the alternative course of action least damaging to the environment, although all of the cases to date hare dealt with questions of compliance with the procedural requirements of NEPA and no court has yet challenged the substance of any final decision of any agency on substantive grounds.

Thus, it might be useful to pursue in the hearings the implications of some of these issues. For example, to what extent is it reasonable or desirable for a given agency to consider and weigh in making its final “balancing judgment" under NEPA alternative courses of action that lie beyond its expertise and statutory authority to implement? Should there be some sort of “umbrella" agency charged with making NEPA "balancing judgments" on all Federal actions involving multijurisdictional aspects? Can NEPA in any way be construed or did the Congress intend that NEPA operate in such a way as to confer on existing Federal agencies authority to take actions not authorized by their own enabling legislation ? An extreme example of this question would he whether the Bureau of Reclamation, after completing a NEPA review of alternatives to a proposed hydroelectric dam, could license or construct a nuclear power plant if it found such an alternative preferable.

APPENDIX 6

EXECUTIVE OFFICE OF THE PRESIDENT,
COUNCIL ON ENVIRONMENTAL QUALITY,

Washington, D.C., February 29, 1972.

MEMORANDUM FOR HEADS OF AGENCIES Subject: Continuing Effort to Improve Agency NEPA Procedures

The Council on Environmental Quality Revised Guidelines for the implementation of the National Environmental Policy Act (NEPA) issued April 23, 1971, (36 Fed. Reg. 7724) called for your agency's issuance of NEPA procedures applying the Act's requirements to your particular programs. In virtually all cases you have now issued draft or final NEPA procedures for the relevant components of your agency and are operating under them.

Section 12(b) of the Council's Guidelines asked that you make a continuing assessment of your experience in the implementation of NEPA and comment to us in writing by December 1, 1971. In order to respond to those few agencies filing such comments and review general agency experience with NEPA, the staff of the Council, OMB and EPA held extensive review sessions with most Federal agencies in December. At these meetings a number of questions concerning implementation of NEPA were raised informally to which CEQ responded.

We recognize that a continuing effort must be made to improve agency NEPA procedures and have assigned a significant staff effort to monitoring your agency's impact statements with a view to identifying needs for such improvement. We have also invited public comment (36 Fed. Reg. 23666, Dec. 11, 1971) on your procedures as an aid to this improvement. In particular we are interested in finding ways of consolidating numbers of impact statements into fewer but broader more meaningful reviews.

On the matter of applying the NEPA statutory language "major Federal actions significantly affecting the quality of the human environment” to your particular agency programs and pinpointing the precise timing of the NEPA review and interagency consultations called for, your agency procedures must provide the specifics within the framework of the statute and our Guidelines. These procedures are important both in helping to identify the types of action on which impact statements are likely to be necessary and those where statements are not called for. Our staff is available to assist your staff in strengthening your procedures, particularly where you can supply us with the necessary information as to the nature of your activity, the extent of potential environmental impact, and the range of alternatives that ought reasonably to be considered. We expect to start meeting with staffs of individual agencies soon to review possibilities for improvement of procedures to implement NEPA.

We find that the courts are increasingly willing to sustain good faith agency efforts to comply with NEPA and will, from time to time, draw your attention to developments in this area. For the present I am asking our General Counsel to recirculate to your staff who serve as liaison with the Council on NEPA matters the informal guidance we have circulated since issuance of the Council's Revised Guidelines last April.

RUSSELL E. TRAIN, Chairman.

APPENDIX 7

PROJECTS IN WHICH ACTIONS HAVE BEEN HELD UP IN WHOLE OR PART BY COURT

ORDERS UNDER NEPA

Agriculture.—Mineral exploration, Monongahela National Forest.
AEC.-Partial operating license, Quad Cities reactor.

Corps of Engineers.-Cross Florida Barge Canal (stopped by President, but injunction still in force; also injunction against lowering Rodman Pool) ; Gila River channelization; Gillham Dam; Tennessee-Tombigbee Waterway; Cooper Dam and Channels ; Implementation of Refuse Act permit program.

FPC.-License for Gilboa-Leeds transmission line.
HEW.-Tri-Service Incinerator, Glen Forest, Maryland.
HUD.--Goose Hollow, Ore. housing project.

Interior.—Trans-Alaska Pipeline (delay caused partly by other factors, e.g. Native claims); Helium contract termination ; Outer Continental Shelf oil and gas leases; C&O Canal Park construction.

Justice.-Federal grant for prison facility.

DOT.-Seattle 1–90; Harrisburg, Pa. I-81; Richmond 1-95; Alameda County, California freeway; Shreveport 1–20; Vermillion, S.D. highway; Atlanta 1-485. TVA.—Tellico Dam.

Senator BAKER. The next witness scheduled for today is Dr. James R. Schlesinger, Chairman of the Atomic Energy Commission.

Although it is 12:35, we will continue now to hear his testimony.

STATEMENT OF DR. JAMES R. SCHLESINGER, CHAIRMAN, ATOMIC

ENERGY COMMISSION, ACCOMPANIED BY JAMES T. RAMEY, COMMISSIONER AND MARTIN R. HOFFMAN, GENERAL COUNSEL

Dr. SCHLESINGER. Mr. Chairman, members of the committee, I should like to introduce my associates, Commissioner Ramey on my right, who is probably well known to many of you, and Martin Hoffman, our general counsel on my left.

It is a privilege to have this opportunity to appear before a joint session of these two distinguished committees. Certainly the subject matter of your deliberations—the impact of the National Environmental Policy Act on the regulatory process and on other environmental programs is one of vital importance to the functioning of the American economy, to the suitability of the American environment and to the acceptability of the balance between the two. It is central to our concern at the Atomic Energy Commission—and is one on which our efforts continue rapidly to increase.

NEPA has resulted in the rapid infusion into the governmental decision process of the full range of environmental considerations. There is no question in my mind with regard to the desirability of this infusion, or that NEPA's impact has contributed to improved decisionmaking overall. As far as the AEC is concerned, the interests of the environment have been well served by NEPA and will increasingly be so served as the AEC program and the overall Federal program continue to mature.

I will try in the time allowed to outline a number of the larger problems facing the AEC in defining and discharging its responsibilities under NEPA. The AEC has, as you know, been in the forefront of the Government's enduring approach to environmental evaluation and decisionmaking-even prior to the passage of NEPA. The Commission has given thorough consideration to matters of radiological health and safety since the inception of its program for the licensing and regulation of nuclear reactors and its extensive research efforts have

provided a base of information in regard to the environmental impact of these facilities which is unique for large-scale industrial undertakings.

At the present time, the AEC is about to produce its first postCalvert Cliff's final impact statement on a nuclear electric generating plant prepared pursuant to section 102 of NEPA.

On the regulatory side of the house, we have 61 statements for nuclear generating plants, reflecting various degrees of completion, some in initial preparation, some in circulation to Federal agencies and to the public, and some in the final stages of completion. We have yet fully to complete a plant licensing action since the decision.

On the operating side of the AEC, we are in the final stages of preparing the environmental statement requested by the President on the Liquid Metal Fast Breeder Reactor (LMFBR). In addition, there are 22 other projects that have required the compilation of analytical environmental statements which range from 2i to 331 pages in length. We have just published a notice for our first public hearing on an operational NEPA statement, the subject of which is the Rio Blanco project, a natural gas stimulation Plowshare experimental shot in northwestern Colorado.

This brief summary suggests the sizable impact of NEPA on the AEC. It also suggests that, with respect to the implementation of NEPA as required by the courts in Calvert Cliffs, the major impact of NEPA is yet to be felt.

My remarks—necessarily brief in view of time constraints-will center on the Commission's licensing function.

Under the Atomic Energy Act of 1954, as amended, the Commission licenses all nuclear-powered electric generating plants. There are presently 22 licensed plants in operation, and there are pending some 03 applications for construction permits or operating licenses. Under the statute, each of these two authorizing steps-construction and operation-requires intensive investigation and review of the safety and radiological impact of the plant.

Excluding the time required for preparation of construction activities such as selection of equipment vendors, preparation of safety reports and obtaining construction permits, the average time for physical construction of such a plant is 48 to 60 months. The cost of each such plant depends on size and the time of construction—but each plant now starting construction represents an investment of at least $350 million.

Even prior to the full impact of NEPA resulting from the Calvert Cliffs decision, a number of organizations had begun regularly to challenge applications. The pacing element in planning for the availability of the power to be generated by the plants was rapidly changing from the brick-and-mortar construction time to the time required by the detailed and protracted hearings on permits and licenses.

NEPA, and then Calvert Cliffs brought to a number of plants in the pipeline at the time dramatic changes in the rules of the licensing process. A new range of considerations was added to the plant licensing process, since the courts had earlier held that the AEC did not have regulatory environmental responsibilities other than radiological. We are, of necessity then, still in the transitional stage of accommodating to these changes, and it is from the transitional nature of the environmental evaluation process that the immediate NEPA problems arise. I shall discuss these problems in the context of the Quad Cities decision. But beyond immediate problems loom mid- and long-range decisions necessary to assure that the momentum in these early years of the "new sensitivity of the American spirit”, in the President's words, will well serve the long-run best interests of the public in balanced, considered environmental management.

While these remarks anply principally to civilian nuclear power electric generating plants, it is probable that similar concerns exist for timely resolution of questions on other plants also being built for largescale generation of electric power.

INTERIM LICENSING

a

The first specific problem and the Commission's most immediate plant licensing concern—is one possibly shared with other agencies: the rigid proceduralization of the section 102 environmental statement. NEPA, in essence, is a broad congressional statement of social policy, coupled with a comparably generalized enjoinder that Federal agencies carry out their programs in conformity with those policies.

It also contains a relatively specific direction for agency preparation of an environmental report analyzing each proposed action which may have significant environmental impact. The environment report—or impact statement—as the only “procedural” requirement of the statute, has been taken by the courts as the gage for measuring agency compliance with the overall policy announced by the Congress in NEPA.

While this corresponds on its face with traditional concepts of judicial review, and seemingly imparts an element of certainty to the agency implementation process, the unsettling reality is that NEPA's sweeping scope, its broadly stated social goals, and its meager legislative history combine to leave both the agencies and the courts with a formidable task of devising a workable implementation regime.

The Quad Cities case illustrates this problem. After Calvert Cliffs, the Commission chose not to appeal the decision further, but to implement through appendix D of its regulations a very stringent NEPA review regime. The dominant criticism coming from the industry was that the Commission had overreacted. Some industry observers regarded the new regulations as unduly inflexible. I believe it is a fair statement that most environmental groups felt the regulations were quite stringent.

The appendix D regulations recognized that the rules had in fact changed in midpassage. To deal with the transition, they provided the possibility for interim licensing for short periods of operation of a limited number of plants that were caught in the rules changes where there were overriding public interest requirements. Interim licensing, as defined by the Commission, is possible only in restricted circumstances, after an environmental review coextensive with the interim operation applied for and when strong public interest justification such as urgent power needs-exists for such operation. In contested cases, moreover, this can only be done after opportunity for hearing. Operation in excess of 20 percent of full power can be authorized only by order of the Commissioners.

These provisions were felt essential to maintain a balance which recognized the importance of environmental protection, as well as the interest of the public in avoiding nonavailability of scheduled supplies of power. The appendix D regulations also recognized that, since it usually takes at least 8 weeks of test operation at gradually increasing power levels to bring a reactor up to full operation, allowing preoperational reactor and plant testing as early as possible served safety as well as power supply considerations.

The district court entertained a suit seeking to bar Commission action even before the Commission had acted on the application for a several-month period of interim operating authority under its regulations. The court preliminarily enjoined the Commission from issuing any license prior to completion of the full environmental re

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