National Environmental Policy Act Alert: CEQ Proposes Rulemaking to Facilitate Infrastructure Development by Radically Overhauling NEPA Regulations

On January 9, 2020, the Council on Environmental Quality (“CEQ”) proposed major changes to National Environmental Policy Act (“NEPA”) regulations originally issued more than four decades ago. The proposed rulemaking aims to facilitate more efficient, effective, and timely NEPA review. The changes, if adopted, would radically alter what federal agencies consider when assessing the environmental impact of agency action. Although the changes are a welcomed improvement that streamlines infrastructure and energy development projects, they will inevitably invite litigation, and democrats have already pledged to take legislative action in response to the proposal. The dramatic shift in both the process and substance of NEPA review proposed by the rulemaking is controversial.

NEPA is a procedural statute designed to ensure that agencies consider the significant environmental consequences of “major federal actions” and inform the public about their decision making without dictating substantive results. Agencies undergo NEPA review of decisions to issue permits for energy and infrastructure development. CEQ’s changes would significantly reduce the time it takes to publish an Environmental Impact Statement (“EIS”), lessening the significant delays that have historically strangled commercial, energy, and transportation related development.

Highlights of the proposed changes include:

1. Page Limits. The proposed rule would presumptively establish a 75-page limit for Environmental Assessments (“EAs”) which are more truncated analyses designed to determine whether the effects of a proposed action will be “significant” when the significance of the effects is unknown. The proposed rule clarifies that an agency does not need to include a detailed discussion of each alternative in an EA, nor does it need to include a detailed discussion of alternatives it eliminated from study. In contrast, an EIS requires a detailed analysis of all significant environmental effects which in most cases should not exceed 300 pages.
2. Time Limits. The proposed rule would establish 1 year as the presumptive time frame for issuance of an EA and 2 years as the presumptive time frame for an EIS.
3. Applicant Role. The proposed rule would allow applicants a greater role in preparing NEPA documents.
4. Functional Equivalent. The proposed rule would allow agencies to determine that compliance with the environmental review requirements of other statutes serves as the functional equivalent of NEPA compliance.
5. Definition of “Effect”. The proposed rule would clarify various existing definitions, most importantly the definition of “effect.” NEPA requires agencies to consider the “effects” of agency action. CEQ proposes to strike the specific existing references to “direct,” “indirect,” and “cumulative” effects.

Modifying the definition of “effect” is a very significant change. The modification would eliminate the requirement to consider indirect and cumulative effects of agency action, and instead, limit consideration to effects temporally and geographically related to the action. Although silent on greenhouse gases, the change would arguably preclude agencies from considering a proposed action’s effect on climate change, including upstream and downstream effects. For example, in permitting a proposed coal export facility, the modified rule would eliminate the need to consider the effects of mining the coal (upstream effect) and the effects from international coal consumption (downstream effect). In this respect the proposal reacts to recent judicial decisions blocking energy infrastructure development by requiring permitting agencies to consider the effects of the proposed action on climate change. See, e.g., Indigenous Envtl. Network v. U.S. Dep’t of State, F. Supp. 3d 561, 570 (D. Mont. 2018).

According to President Trump, “America is a nation of builders, but it takes too long to get a permit and that is big government at its absolute worst.” CEQ issued these rules to address this “regulatory nightmare” by curbing NEPA abuses by project antagonists and agencies opposed to energy, transportation, and other controversial infrastructure projects. CEQ proposes to eliminate the analysis of cumulative effects because “agencies are not expected to conduct exhaustive research on identifying and categorizing actions beyond the agency’s control.” The proposed rule would amend existing rules to ensure that agencies focus their attention on effects that are “reasonably foreseeable” and have a “reasonably close causal relationship” to the proposed action. If an effect would occur with or without the proposed project, then the agency need not evaluate it. These modifications would redirect agencies to focus on “drawing a management line between causal changes that may make an actor responsible for an effect and those that do not, when the causal chain is too attenuated.”

The proposed changes are a long way from being effective. CEQ circulated a draft of the proposed changes, which must first be published in the federal register. After a 60-day public comment period and two public hearings, CEQ must issue a final regulation. Given that this an election year, we fully expect that CEQ will finalize these regulations by the fall. The proposed changes would become effective once finalized, although agencies will have discretion to apply these modified regulations to projects already in the process of NEPA review.

Given the controversial nature of this proposed rule, stay tuned for further updates.