By Daniel McGroarty
(Photo credit: NPCA Photos)
The U.S. Environmental Protection Agency is mulling a bold regulatory move that could redefine risk for American business. For the first time ever, it is poised to veto not a project, but the idea of a project based on a hypothetical construct that the agency itself has created.
The project that may never be is the Pebble Mine, a multi-metal mineral deposit in southwest Alaska on state land set aside for mining that could yield more than 80 billion pounds of copper, a world record. EPA has jumped ahead of our national permitting process with its own $2.4 million environmental assessment, setting itself up as judge, jury and executioner on the matter before the development company has submitted an actual mining plan.
This is quite an innovative use of the public budget. To be sure, EPA has authority under the Clean Water Act to stop or revoke permits for all manner of projects, from agriculture to manufacturing, energy, transportation and resource extraction, anything that touches on water. But does it have the authority to stop a project that doesn’t exist? It’s never tried to – until now.
A study by The Brattle Group found that $220 billion worth of domestic investment projects run on Clean Water Act permits. All in all, a significant chunk of America’s economic development activity. If EPA expands its power to cover hypotheticals – the mere idea of projects – you can bet there will be a chill on investment projects not just in Alaska, but throughout the Lower 48.
With millions in the balance, companies make careful calculations about the risks and benefits of pursuing development projects. Thanks to the National Environmental Policy Act of 1969, environmental impact is a fundamental concern that must be addressed in the permitting process. If a project presents the possibility of a negative environmental impact, the development company must devise a way to mitigate or offset that harm, for example by relocating wildlife.
On very rare occasions, EPA has vetoed projects at some point during or after this process – never before. Such a move would fundamentally change the way companies assess the risks of even conducting preliminary research on a potential project. Important ideas that can create jobs, drive innovation, and produce value for the economy may never make it off of the drawing board, as EPA’s Sword of Damocles dangles precariously overhead.
Environmental law was never meant to be a project killer. The purpose of the National Environmental Policy Act was to strike a balance between economy and environment, to ensure that the forward march of progress didn’t trample nature along the way. An EPA power grab of this magnitude would throw that equation far out of balance.
That’s exactly what some powerful special interests would love to happen. Joel Reynolds at the National Resources Defense Council, which spends roughly $100 million each year on environmental advocacy, has been leading the public charge against the Pebble Mine, not only defending EPA’s power to preemptively veto the project, but urging it to do so.
And how quickly tunes change when politics get in the way. His organization has been one of the most ardent champions of the balance of power afforded by the National Environmental Policy Act. The following text sits on a page at the organization’s website, titled with a spin on the law’s abbreviation, “Never Eliminate Public Advice”:
"NEPA is democratic at its core. In many cases, NEPA gives citizens their only opportunity to voice concerns about a project's impact on their community… And because informed public engagement often produces ideas, information, and even solutions that the government might otherwise overlook, NEPA leads to better decisions -- and better outcomes -- for everyone. The NEPA process has saved money, time, lives, historical sites, endangered species, and public lands while encouraging compromise and cultivating better projects with more public support…Thanks to this law…we are guaranteed a voice."
Yet when it comes to the Pebble Mine, where the public’s advice might be to build a mine and cultivate a better project, Mr. Reynolds suddenly wants to deny our citizens that guarantee of a voice – and reject the idea of a project before a mining plan has been scrutinized in a scientific, public process in line with the law.
Thankfully, not everyone in the environmental camp entertains such ideological extremism. The Center for American Progress notably stopped short of calling for EPA to preemptively veto the project, although it is decidedly against it. In the end only one opinion matters – EPA’s – and what it will do is far from certain.
Our nation’s mine permitting process is not perfect – it can take up to a decade to navigate the maze of local, state and Federal red tape and get a mine online, which ties us for last place among mining nations with the much poorer, much more hazard-prone Papua New Guinea. But it is the product of a long-established law, carefully designed with checks and balances to ensure a healthy marriage of economy and environment in America. If EPA gives itself the power to veto ideas, you can bet it will be a messy divorce.
Daniel McGroarty is President of American Resources Policy Network, a non-profit, non-partisan education and public policy research organization headquartered in Washington, D.C.
