Maryland Energy Report

A New Jersey construction firm that exploited its close ties to the Cheney-Bush Administration to win massive war contracts is under investigation by the Justice Department for over-billing taxpayers for work in Afghanistan and Iraq.  The company, the Louis Berger Group, is also a major contractor on the controversial, coal-by-wire Potomac-Appalachian Transmission Highline (PATH).  AP reports:

Louis Berger has been a major player in U.S.-funded reconstruction projects in Iraq and Afghanistan, now leading a $1.4 billion USAID infrastructure project to build roads and power plants in Afghanistan.

This has come to light because of a suit filed by the nephew of the company’s founder who claims he is being forced out by the federal prosecutors:

Prosecutors acknowledged their ongoing criminal and civil investigations in response to a federal lawsuit filed last week by Derish Wolff, chairman of Louis Berger’s parent company Berger Group Holdings. Wolff is attempting to block efforts to have his nearly one-third ownership stake in the company held in escrow following his resignation, which he argues was forced as part of the company’s negotiations to end the federal investigations.

AP notes that Louis Berger’s government service included “a $305 million diesel plant outside Kabul that tripled in cost and was delivered more than a year behind schedule…”

Louis Berger’s problems are not new:

Louis Berger’s performance on a 2002 USAID contract to build dozens of schools and health clinics in Afghanistan came under fire after some work had to be redone and the company was accused of submitting fraudulent work claims, according to an investigation conducted by Republican Sen. Tom Coburn’s staff.

The small difficulty is that if the Louis Berger Group were to be convicted of criminal wrongdoing, then they would be ineligible for federal contracts (“debarment”).  As a result, the company would probably go out of business because it has become so dependent on government handouts.  In turn, the U.S. government would lose its biggest “civilian” contractor in Afghanistan.  New York Construction reports:

“The mere allegation of wrongdoing could result in debarment,” which could force the company “to shut its doors,” Wolff claims.

Wolff wants to cash out his stockholdings which would drain the company of cash that federal prosecutors would like to recoup for taxpayers (remember the budget deficit?)

Meanwhile, back home, Louis Berger Group has its fingers in the three major parts of the coal industry’s much beloved Project Mountaineer: Susquehanna-Roseland, TrAIL, and PATH.  This is how the company describes its role in the PATH project:

The Berger Team is currently conducting route selection efforts, supporting the public involvement process, and coordinating local, state, and federal agency consultations for this project in West Virginia and Virginia. We are presently conducting permitting for this project.

In light of the Justice Department investigation, public officials might want to reconsider their ties to the Louis Berger Group.

The Potomac-Appalachian Transmission Highline (PATH) will run for over 270 miles from the John E. Amos coal-fired power plant in West Virginia to a massive new transformer substation in Mt. Airy, Maryland.  The path of PATH cuts across National Forest and National Park property.  The National Park Service (NPS) is the lead federal agency charged with conducting an Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA).

NPS is currently considering the “scope” of the EIS.  The  coal and power corporations pushing the transmission line would prefer a very narrow scope addressing only the impact of constructing the line within the federal property boundaries (a few miles at most.)

Opponents of PATH have pointed out that the transmission line will have extensive environmental impacts the largest of which are caused by the increased burning of toxic coal that will result if the line is put into operation.  We arrive at the question: Does NEPA permit an agency to define EIS scope narrowly or must it consider all of the environmental impacts of the proposed project?

This is not the first time this question has been raised.  Ever since its passage in 1970 (in the wake of the Santa Barbara oil spill), both agency bureaucrats and corporate developers have sought to grease the wheels of their pet projects by narrowing the scope of the EIS.  Time and again, the federal courts have corrected them.

A recent example is the judge’s decision filed March 15, 2010, in Manitoba v. Salazar challenging the NEPA process for a major water project in North Dakota.  The following are quotes directly from the judge’s order which cite the long string of federal court cases on this topic.

On the question whether the lead agency can pick and choose which envirnmental consequences it wants to consider and which it can exclude:

“NEPA has twin aims.” Balt. Gas & Elec. Co. v. Natural Res. Def. Council, Inc., 462 U.S. 87, 97 (1983). “First, ‘it places upon an agency the obligation to consider every significant aspect of the environmental impact of a proposed action.’” Id. (quoting Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 553 (1978)). “Second, it ensures that the agency will inform the public that it has indeed considered environmental concerns in its decisionmaking process.” Id. These goals are “realized through a set of ‘action-forcing’ procedures that require that agencies ‘take a ‘hard look’ at environmental consequences,’ and that provide for broad dissemination of relevant environmental information.’” Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989) (quoting Kleppe v. Sierra Club, 427 U.S. 390, 410 n.21 (1976)). “Other statutes may impose substantive environmental obligations on federal agencies, but NEPA merely prohibits uninformed — rather than unwise — agency action.” Id. at 351.  [See page 10-11.]

Can the lead agency simply go through the motions of conducting an EIS or do they have to do a serious job?

“An agency’s primary duty under the NEPA is to ‘take a ‘hard look’ at environmental consequences.’” Pub. Utils. Comm’n v. FERC, 900 F.2d 269, 282 (D.C. Cir. 1990) (quoting Kleppe, 427 U.S. at 410 n.21). “Since NEPA requires the agency to ‘take a ‘hard look’ at environmental consequences before taking a major action,’ the judiciary must see that this legal duty is fulfilled.”6 Found. on Econ. Trends v. Heckler, 756 F.2d 143, 151 (D.C. Cir. 1985) (quoting Balt. Gas & Elec., 462 U.S. at 97-98); see also Sierra Club v. Peterson, 717 F.2d 1409, 1413 (D.C. Cir. 1983) (“the court must insure that the agency took a ‘hard look’ at the environmental consequences of its decision”). “Although the contours of the ‘hard look’ doctrine may be imprecise,” a court must at a minimum “‘ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary and capricious.’” Nevada v. Dep’t of Energy, 457 F.3d 78, 93 (D.C. Cir. 2006) (quoting Balt. Gas & Elec., 462 U.S. at 97-98).  [See page 11.]

What about the problem of cumulative impacts?  Judge Collyer quotes from the federal regulations:

“Cumulative impact is the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” 40 C.F.R. § 1508.7. “Cumulative impacts can result from individually minor but collectively significant actions taking place over a period of time.” Id.  [See page 15.]

This certainly does not amount to an exhaustive analysis of the legal issues confronting the NPS as it considers the scope of the EIS.  However, those who argue that NPS must take a “hard look” at all of the environmental impacts of the project and their cumulative effect would seem to be standing on solid legal ground.

Judge Collyer’s decision was cited by Congressman Henry Waxman in his recent letter to Secretary of State Hillary Clinton regarding her agency’s draft EIS in the case of the Keystone XL pipeline project that will bring heavy crude oil from the tar sands of Alberta to Texas refineries.  (EPA has also weighed in.)  Clinton’s draft EIS excluded consideration of greenhouse gas emissions from the production of oil from tar sands.  Waxman opined:

As a matter of good government, it makes little sense to prepare an EIS, which has the sole purpose of ensuring that the government understands the environmental impacts of a proposed action, that excludes consideration of the primary environmental impact.

This same could be said of the NPS EIS for the PATH project.