Environmental justice (EJ) should be on the mind of game-changing oil and gas leaders. That’s why my colleague Anne Carto is guest-authoring today’s primer. If you thought EJ was someone else’s responsibility, read on to understand why you — like every other oil and gas leader — need to get familiar with the expectations and social risks around your company’s EJ strategy. Enjoy! —Tisha
From major policy proposals to evolving regulatory requirements and stakeholder pressure, EJ is permeating our permitting and strategy landscape. Lately, our oil and gas clients are asking us to bring them up to speed and saying, “What should I actually be doing?”
In the first of this two-part series, I explore what you need to know about the current EJ landscape. In Part 2, I will teach you about the tools you need, actions you can take, and mistakes you must not to make in order to authentically incorporate EJ into your strategy.
Your first potential mistake: Misunderstanding the very meaning of “environmental justice” that’s at play in your situation. The definition is ever-evolving and may depend on the group you are engaging. For our purposes here, the U.S. Environmental Protection Agency’s (EPA) definition provides the right starting place: “Environmental justice is the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” Whether a group is considered an “EJ community” depends on a growing set of demographic and environmental indicators — such as race, income, age, unemployment rate, education, linguistic isolation, exposure to air pollution, and proximity to traffic.
It’s easy for company leaders to oversimplify their definition of EJ and their understanding of what makes an EJ community. As a result, companies may attempt to address EJ interests and concerns superficially. Before you fall into such a trap, let’s cover the basics.
Five Things You Should Know
Your learning about EJ will be a lifelong journey, because your stakeholders’ expectations around EJ will continue to evolve. The important starting place is to understand five key EJ themes that are vital for oil and gas leaders:
- Environmental Justice Communities Are Your Stakeholders
- Environmental Justice Is Driving Expectations of Your Business
- Environmental Justice Is Shaping the Future of Energy
- Environmental Justice Is Gaining Traction in the Federal Government
- Environmental Justice Tools Are Evolving — and Can Be Conflicting
1: Environmental Justice Communities Are Your Stakeholders. At Adamantine, we have learned to ensure that our clients consider the “often overlooked stakeholder.” EJ communities are at the top of this list: Their needs, interests, and concerns are often unnoticed. Regardless of regulatory requirements, oil and gas companies must identify and engage their stakeholders to anticipate risk and ensure mutually beneficial outcomes. Identifying the overlooked stakeholder requires robust research, thoughtful mapping, and taking advantage of new tools under development.
As the definition of an EJ community evolves over time, so will the likelihood that these communities are recognized as your stakeholders. Expectations are arising for oil and gas companies to answer for their impact on and consideration of the needs of these groups. As with any stakeholder, you need to know where they are located, what their needs and concerns are, and what the most effective, transparent ways are to engage with them meaningfully.
2: Environmental Justice Is Driving Expectations of Your Business. EJ advocates are demanding the following:
- Enhanced, transparent, and accessible avenues for meaningful participation in rulemaking, policymaking, and project-planning processes;
- Greater routes for legal resolution; and
- Payments to communities subject to environmental harms and discrimination.
These demands translate into expectations for your company to act.
Driving these expectations is a broad push to place EJ at the forefront of the mainstream environmental movement. Environmental organizations are facing growing pressure — from volunteers, donors, staff, and boards — to demonstrate a sincere commitment to prioritizing diversity, equity, inclusion, and EJ in their advocacy efforts. This trend was recently highlighted by a hearing in the House Committee on Natural Resources on EJ in the environmental movement. Committee members and witnesses alike called for pushing EJ to the front of the movement.
At the same time EJ is rising in the mainstream environmental movement, EJ advocates are increasingly discouraged by the lack of progress on the issue. Some examples:
- Activists have expressed concern over whether the Joe Biden administration can live up to its promises after two top EJ advisors made sudden departures earlier this year.
- EJ advocates were further disheartened when a beta version of the White House’s Climate and Economic Justice Screening Too was released, revealing what some have called a “gaping hole”: an exclusion of race as an indicator for identifying EJ communities.
As a result, EJ advocates are taking their activism to the next level — elevating their demands and placing pressure not only on policymakers and regulators, but on your company, too.
3: Environmental Justice Is Shaping the Future of Energy. EJ advocates are effectively asserting themselves in conversations about energy innovations. Technologies being explored as decarbonization solutions by the oil and gas industry already are facing pushback from EJ advocates.
For instance: Carbon capture, utilization, and sequestration (CCUS) and direct air capture have caught the attention of environmental advocates as technologies that will delay climate action by prolonging the use of fossil fuels and increasing pollution in marginalized communities. As a result, there has been a growing emphasis on EJ in CCUS permitting processes and impact assessments. The White House Council on Environmental Quality’s (CEQ) recently released updated guidance that emphasized EJ considerations and stakeholder engagement in CCUS deployment, development, and permitting.
Hydrogen and renewable natural gas have also been the focus of criticism related to EJ due to concerns over siting near vulnerable communities and local water and air pollution.
4: Environmental Justice Is Gaining Traction in the Federal Government. EJ is being placed at the center of federal decision-making processes. Both the White House and Congress are pushing for an EJ-centric strategy for environmental, climate, and energy-related policy- and rulemaking. At the same time, opponents of this government-wide EJ push are loudly voicing their concerns and skepticism, demonstrating the divisiveness and hyper-partisan nature of the issue.
In January 2021, President Biden issued the Executive Order on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government, directing all federal agencies to integrate EJ and racial justice considerations into their rulemaking and processes. Since then, agencies have begun releasing new plans and guidance emphasizing protections and considerations for EJ communities. These include the EPA’s EJ Action Plan and the Federal Exchange Regulatory Commission’s (FERC) new draft of a decades-old policy for assessing proposed natural gas pipelines, potentially adding new EJ considerations. On April 15th, the Commission issued an Equity Action Plan that will serve as a “road map for FERC to build a culture and program that ensures the Commission is appropriately integrating environmental justice and equity issues into…decision making and day-to-day operations.”
Congress is also fueling the EJ discussion. In February, the House Committee on Natural Resources held two hearings on the topic of EJ and the flagship EJ bill, Environmental Justice for All Act. Both hearings shone a spotlight on the key issues of the EJ agenda: accounting for cumulative impacts in federal agency decision-making processes; “meaningful,” “intentional,” and “longer” community engagement in those decision-making processes; and improving legal avenues for impacted groups facing environmental discrimination.
5: Environmental Justice Tools Are Evolving — and Can Be Conflicting. At the state and federal levels, agencies, regulatory bodies, and legislatures are developing and deploying screening tools to identify EJ communities. Using socioeconomic, environmental, and other data to identify communities most vulnerable and impacted by environmental hazards, these tools are intended to guide and inform permitting decisions, strengthen community outreach and engagement, and direct resource and funding allocation.
The number of EJ screening tools is growing quickly. In 2015, the EPA released EJScreen, a mapping tool used to inform various activities, programs, and decisions made by the agency, including those related to permitting and enforcement. Earlier this year, CEQ released an early version of its own Climate and Economic Justice Screening Tool. Several states, including Colorado, California, Maryland, North Carolina, Washington, and New Jersey, have developed and launched their own screening tools. These tools are being used to guide various decisions made by state-level departments and agencies, including resource allocation, public participation, environmental compliance enforcement, and more.
With so many EJ screening tools available, they may conflict with one another — leading to the identification of different impacted communities as they map stakeholders. Chances are identifying these multiple communities will eventually add to EJ expectations for your company.
Progress, pushback, and expectations around EJ will rapidly evolve over the next year. Game-changing leaders will make a concerted effort to keep their finger on the pulse and work to meaningfully incorporate EJ into their strategies. In Part 2 of our series, Environmental Justice: Action to Take & Mistakes Not to Make, we will walk you through our lessons learned and our observations from leading companies.
Adamantine can help you translate these expectations into effective strategies that incorporate EJ. Hit reply for a consultation. If you would like to recommend Both True to a colleague, they can subscribe here. Thank you to Kelsey Grant for support in tracking and analyzing the latest in EJ expectations.