issued thereunder, and the Court decisions provide the basis for these hearings. The relationship of the provisions of the National Environmental Policy Act to the regulatory programs of the Environmental Protection Agency and the licensing and regulatory programs of other Federal agencies require examination. It is hoped that the hearings will reveal any procedural redundancies and inefficiencies, as well as any ambiguities and uncertainties resulting from interpretation of the statutes, individually and collectively.

Several areas of inquiry should be explored.

I. Effect of NEPA on EPA

The environmental Protection Agency has published proposed regulations (copy on file) setting forth those activities of EPA which are subject to NEPA. Generally, EPA complies with Section 102 in (a) proposing legislation, (b) major research and development activities, and (c) in waste treatment works construction grant activities. Environmental regulatory activities under spe cific mandate, such as promulgation of ambient air standards, hazardous emission standards, new source performance standards, are exempted from the requirements of NEPA by the EPA regulations.

A district court decision (Kalur) and some aspects of the Calvert Cliffs and Greene County decisions raise questions regarding exclusion of certain EPA regulatory functions. In addition, plaintiffs challenging EPA's new source performance standards in a case pending in the D.C. U.S. Court of Appeals, specifically request the court to hold NEPA applicable to all EPA actions.

In addition to possible application to rule-making, EPA is concerned that compliance with NEPA in any water pollution permit program (the Refuse Act or its successor) will undermine success of such program by imposing extensive procedural requirements for each permit.

The Kalur decision requires the Corps of Engineers to comply with NEPA in its Refuse Act permit program and the Greene County decision requires the Corps to prepare each impact statement internally independent of the applicant. Because there are pending something on the order of 25,000-40,000 permit applications for existing discharge sources, questions must be asked concerning real value versus procedural paper shuffling. Because many of these facilities are currently operating and because presumably NEPA was not intended to shut down existing facilities a limitation in the application of NEPA may be suggested.

(The Administration has proposed to exempt the permit program entirely from NEPA by an amendment to S. 2770. Others suggest limiting such exemption to permit applications filed for sources of discharge existing on the date of enactment of S. 2770.)

The hearings should include an evaluation of the need for and value of applying NEPA to any or all actions of EPA's regulatory function.

Another issue raised by application of NEPA to environmental regulatory activities is the substantive, as distinct from procedural effect on EPA rulemaking. Would application of NEPA to EPA rulemaking and standard setting alter in any way EPA's mandate to implement the Clean Air Act of Water Pollution Control Act? Would application of NEPA require or authorize EPA alter regulations to consider implications which were specifically excluded from enabling statutes? (e.g. would economics be added as a factor in determining primary and secondary ambient air standards?)

Integral to this question is whether the NEPA-EPA relationship may provide an opportunity for integrated environmental analysis. For instance, a requirement for EPA to prepare a detailed 102 statement for new source standards of performance would cause analysis of such aspects as alternative fuel demands for steam generators (i.e., strip mining vs. coal gasification vs. oil import vs. fusion that would result from the implementation of new source performance standards. If the results of such analysis were "action forcing" under NEPA, EPA would have to rationalize all environmental implications and take the course of action most protective of the environment. However, congressional guidance in such matters is not provided nor is it clear whether "action forcing" authority is provided and, until it is the courts will continue to create case law as to the meaning of NEPA.

NEPA applied to all EPA permits for new industrial sources and all new community development (through permits for waste treatment facilities) could pro

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 "Baker 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 have 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 be 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 I-90; Harrisburg, Pa. I-81; Richmond I-95; Alameda County, California freeway; Shreveport I-20; Vermillion, S.D. highway; Atlanta I-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 Cliffs 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 21 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 93 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 apply 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.