On March 11, 2009, the Office of Air, Energy and Climate of the New York State Department of Environmental Conservation (the “DEC”) released its draft guidance entitled “Assessing Energy Use and Greenhouse Gas Emissions in Environmental Impact Statements” (the “Draft Guidance”). The Draft Guidance provides direction for the evaluation of direct and indirect impacts of CO2 emissions1 (which account for an overwhelming majority of the total Greenhouse Gas (“GHG”) emissions in New York State) in environmental impact statements (“EISs”). Although the Draft Guidance states that it is binding only on DEC staff in their review of EISs involving major permitting, or where the DEC is the lead agency in a project review, given the increased attention given to GHGs and the virtually universal acceptance of the scientific data that they are a principal cause of global warming, it is anticipated that these guidelines (or an equivalent) will be employed by other state and local agencies in their evaluation of GHGs in EISs.

Background. Enacted by the New York State legislature to require state and local agencies to incorporate the balancing of environmental concerns with social and economic considerations in evaluating discretionary actions, the State Environmental Quality Review Act (“SEQRA”) requires that the lead agency identify and evaluate actions for possible impacts on the environment. The statute and its implementing regulations require the preparation and consideration of an EIS as part of an agency’s determination to undertake, fund or approve any action, if that action is determined to result in significant adverse environmental impacts. Actions that would not result in significant adverse environmental impacts do not require EISs.

More than thirty years of SEQRA regulation and litigation have led to an ever-expanding list of impacts that constitute “environmental impacts” and therefore require the preparation of an EIS. Thus, in an urban setting, “environmental impacts” have been held to include socio-economic impacts (such as gentrification), urban design and visual resources, in addition to the traditional impacts from traffic, noise and air pollution. As the consensus developed to hold that increased levels of GHG in the atmosphere (generally as the result of emissions from the burning of fossil fuels) contribute to global climate change, the environmental community sought to have projects’ GHG impacts included among those analyzed in the SEQRA process. The DEC’s Draft Guidance is among the first attempts by a New York State agency to devise a uniform set of guidelines to identify, evaluate and mitigate the impact of energy use and GHG emissions on the environment in the SEQRA process.2

The Draft Guidance does not create any new SEQRA regulations. Moreover, it does not establish how the DEC, or any other lead agency for that matter, would determine what level of CO2 emissions are “significant” and therefore require the preparation of an EIS. Rather, the Draft Guidance is intended to supplement existing SEQRA procedures by providing instructions to DEC staff when reviewing an EIS for projects that have been found to have GHG impacts. The Draft Guidance details how energy use and GHG emissions should be discussed and assessed in an EIS, along with their direct and indirect impacts on the environment, but not how climate change might impact a proposed project.

Key Provisions of the Draft Guidance: The Draft Guidance establishes the method for assessing energy use and GHG emissions by (i) establishing the areas to review; (ii) quantifying the project’s indirect and direct CO2 emissions; (iii) quantifying waste generation emissions; (iv) quantifying landfill methane emissions; and (v) providing various mitigation measures.

  • Focusing on CO2 Emissions: GHG emission sources include, among others, electricity distribution (SF6), refrigerant substitutes (HFCs), the management of municipal waste, municipal wastewater and agriculture (CH4 and N2O), and natural gas leakage (CH4). However, approximately 88% of total GHG emissions come from fuel combustion, resulting in the emission of an estimated 250 million tons of CO2, and smaller amounts of N2O.3 The Draft Guidance tailors its analysis to CO2 emissions resulting from combustion, waste and methane from landfills, which typically generate the overwhelming majority of emissions. GHG emissions resulting from other sources should be handled on an individual basis.
  • Quantifying direct and indirect GHG emissions. Direct emissions result from onsite combustion processes and from company vehicles associated with the project, whereas indirect emissions result from offsite combustion processes utilized to provide energy to the project, noncompany vehicles providing services to the project, and waste created by the project, along with the transportation and disposal of such waste. Emissions resulting from the use of products produced or sold at the project site should not be included in any environmental analysis, except to the extent the products are fuels. As a general rule, DEC staff should always attempt to quantify the emissions, however, qualitative analysis focusing on whether the project proponent has minimized emissions may be utilized when analyzing indirect GHG emissions arising from (i) off-site energy generation and (ii) vehicle trips generated by the project.4
  • Distinguishing and separately analyzing quantitatively each source of emissions:
    • Direct Emissions from Stationary Sources (Post-construction): Emissions in this category generally result from combustion of fossil fuels for heat, hot water, steam, onsite electricity, or industrial processes. Proponents quantify these emissions by estimating fuel usage, employing energy modeling software or other established methodologies, and then estimating the CO2 emissions using published emission factors, which should generally be available from the Energy Information Administration’s (“EIA”) Fuel and Energy Source Codes and Coefficients.5
    • Direct Emissions from Non-Stationary Sources: Emissions in this category generally result from any type of non-stationary equipment used at the project site involving the combustion of carbon fuels (i.e., any company vehicle associated with the project, such as a freight truck, fork lift, security vehicle, etc.). Proponents quantify these emissions by estimating fuel usage and then estimating CO2 emissions based on EIA coefficients.
    • Indirect Emissions from Stationary Sources: Emissions in this category generally result from the off-site production of electricity for project site use. Proponents quantify these emissions by estimating electricity needs using energy-modeling software and multiplying the result by an emissions factor to calculate CO2 emissions, which for loadserving entities can be obtained from the New York State Public Service Commission or the DEC. Estimates should be made even in situations where the proponent cannot accurately estimate the project’s electricity usage needs (i.e., where the proposed project is being undertaken on behalf of a third party).
    • Indirect Emissions from Mobile Sources: Emissions in this category result from any type of non-company, non-stationary equipment associated with the project involving the combustion of carbon fuels (i.e., any third party vehicles associated with the project, such as those used by commuting employees, vendors, waste-removal companies, etc…). Proponents quantify these emissions by estimating the new trips generated by the proposed project using calculations published by the Institute of Transportation Engineers, expressed as annual vehicle-miles traveled (VMT) for each category of new trip (i.e., commuting employees, vendors, waste-removal, etc.), these estimates are then converted into tons of CO2 per year utilizing emission factors contained in EPA MOBILE 6.2. In the future, if an EPA model factoring in speed were to exist, DEC staff may add speed as another variable.
    • Methane Emissions from Landfills: Although they constitute only a small percentage of GHG emissions in New York, methane emissions from landfills can be significantly reduced by undertaking specific, discrete actions, such as recovering organic materials from waste streams, enhancing landfill gas collection, flaring, and use landfill gas for energy production. Proponents quantify these emissions by employing site-specific data (i.e., volume of landfill gas collected, percentage of methane in the landfill gas, portion of site served by collection system, etc.) in combination with the US Environmental Protection Agency’s (“EPA”) Climate Leaders Greenhouse Gas Inventory Protocol, Direct Emissions from Municipal Solid Waste Landfilling module, which utilizes the LandGem model to estimate GHG emissions.
    • Emissions from Waste Generation: All proposed projects generate waste, which is characterized as an indirect GHG emission, and should be included in the EIS. Proponents quantify these emissions by utilizing the EPA’s Waste Reduction Model webbased calculator and Excel spreadsheet to estimate GHG emissions based on different levels of solid waste generation and management.
  • Estimating energy needs: The Draft Guidance recommends that project proponents employ energy modeling software that simulates the building’s operations usage to estimate projected energy needs. Although the Draft Guidance recognizes that no model will be entirely accurate in its predictions, energy modeling software is useful in providing a general estimate of the project’s GHG emissions once in operation.
  • Presentation in EIS:
    • Total GHG Emissions: Any application should measure total GHG emissions from all sources described above, as well as GHG emissions from other sources, if significant, in tons of CO2, or for GHGs that are not CO2, in both tons and equivalent tons of CO2.
    • Alternatives: In presenting GHG emissions, the EIS should also discuss possible alternatives that were contemplated, such as alternative sites, technology, size/scale, design, or usage, along with a synopsis of each such alternative’s impact on GHG emissions. The project proponent should present, on an annualized basis, total GHG emissions under the proposed plan, total GHG emissions under the alternatives, and a qualitative comparison.
    • Mitigation: The EIS should include a discussion of all mitigation measures accepted, along with calculations of the reduction in GHG emission, and, to the extent feasible, a quantitative (or, if not practicable, a qualitative) analysis of mitigation measures that were contemplated and rejected. The Draft Guidance also suggests comparing the energy usage of the proposed project with the average energy usage from buildings of similar size, type and location.
  • DEC Decision: The Draft Guidance concludes by stating that the DEC’s decision will be based on consideration of the environmental impacts discussed in the final EIS (including global warming implications, alternative analysis and mitigation measures) balanced against social, economic and other considerations. This does not constitute a departure from the traditional SEQRA methodology, as it was never the intention of SEQRA that the presence of impacts that cannot be mitigated requires the denial of a permit or a decision not to proceed with an action. In analyzing mitigation measures, preference should be given to on-site mitigation measures, as a way of encouraging efficient project design and maximizing the proposed project’s energy efficiency. The Draft Guidance goes on to provide numerous specific suggestions as to how project proponents can increase energy efficiency, reduce energy demand and reduce GHG emissions. Ultimately, as is required under SEQRA, DEC staff must find that the proposed project has minimized, to the maximum extent practical, any adverse environmental impacts.

Impact and Significance of the Draft Guidance. There is no doubt that, if implemented, the Draft Guidance will add an additional layer of analysis to most large project EISs. Agencies other than the DEC, such as planning boards and commissions and city and town councils, will, in our view, require the use of the Draft Guidance’s methodologies in their own EISs. The absence of criteria as to what levels of emissions, either direct or indirect, are acceptable, does not eliminate uncertainty as to which actions or projects require the preparation of an EIS – an expensive and time consuming process, thus creating a litigation risk for those projects that do not include an EIS as part of the approval process. Moreover, the requirement that an EIS analyze indirect emissions, such as those from generators of electricity that the project would use once it is in operation, is burdensome and open to a great deal of second-guessing. As has been the case with SEQRA litigation over the years, these open questions are arrows in the quivers of project opponents, which can lead to even more over-analysis than is already common under SEQRA.