Takeaways

A recent Executive Order by President Trump directs agencies to expedite reviews of infrastructure projects based on the emergency provisions of several key federal environmental laws.
These emergency provisions have been seldom invoked in the past, and when they have, the purpose often has been to fast-track immediate response actions to address environmental concerns, as opposed to facilitating infrastructure projects years in the making.
Companies that rely on the Executive Order to obtain approval for long-term projects will expose themselves to future litigation risks.

The Key Environmental Laws at Issue

Citing the economic downturn caused by the outbreak of COVID-19, on June 4, 2020, President Trump signed an executive order (EO) directing federal agencies to invoke emergency powers available to them to expedite the environmental review and permitting of infrastructure projects. The EO explicitly enumerates the emergency provisions of the following federal laws:

  • National Environmental Policy Act (NEPA): This federal statute requires an assessment of potential environmental impacts before approving federal actions. The White House Council on Environmental Quality’s implementing regulations at 40 CFR § 1506.11 provides that “where emergency circumstances make it necessary to take an action with significant environmental impact,” “alternative arrangements” may be appropriate.
  • The Endangered Species Act (ESA): Section 7 of the ESA requires federal agencies to consult with the U.S. Fish & Wildlife Service to ensure that their actions do not harm or destroy protected species and their habitats. Pursuant to 50 CFR § 402.05, alternative procedures may be implemented in lieu of consultations in “situations involving acts of God, disasters, casualties, national defense or securities emergencies, etc.”
  • The Clean Water Act (CWA), as it relates to Nationwide Permits and other permits issued by the U.S. Army Corps of Engineers: Section 404 of the CWA authorizes the Corps to issue nationwide permits for categories of discharges that are similar in nature, will have only minimal adverse environmental effects when performed separately and will have only minimal adverse cumulative effects. Under 33 CFR § 325.2, the Corps can expedite permit applications in a “situation which would result in an unacceptable hazard to life, a significant loss of property, or an immediate, unforeseen, and significant economic hardship.”

Imminent Requirements of the Executive Order

The EO’s broad directive to invoke emergency powers applies to all federal agencies, as defined at 44 USC § 3502(1), except independent regulatory agencies. Subject agencies are required to develop lists of pending projects on their purview that, based on their potential to positively impact the national economy, merit fast-tracking, either on account of the emergency powers invoked by the EO or mechanisms already provided for under NEPA, the ESA and the CWA. Such lists must be submitted within 30 days of the EO’s issuance (i.e., by July 4, 2020) to the Office of Management and Budget, the Assistant to the President for Economic Policy, and the White House Council on Environmental Quality.

Due to their central role in major infrastructure projects, certain federal departments have received more targeted directives. For example, the U.S. Army Corps of Engineers and Department of Transportation are specifically instructed to expedite all “all authorized and appropriated” projects within their jurisdictions. At the same time, the departments of Defense, Interior and Agriculture must expedite their reviews of certain projects on federal lands. Each such agency has until July 4, 2020, to submit lists of all the projects that it has expedited to the Office of Management and Budget, the Assistant to the President for Economic Policy, and the Council on Environmental Quality.

A High Potential for Legal Challenges

Past applications of the emergency provisions of these laws have aimed to facilitate short-term, immediate responses to crises, such as natural disasters and industrial accidents (e.g., responses to large-scale chemical spills, dam failures, hurricanes). This is in line with the text of the relevant laws. For example, the CEQ’s regulations at 40 CFR § 1506.11 clarify that the invocation of emergency authorities is limited to “actions necessary to control the immediate impacts of the emergency.” By seeking to invoke this and parallel provisions in the ESA and CWA to facilitate economic recovery, the EO is, in effect, identifying the “emergency” not as the COVID-19 pandemic but the economic consequences of the pandemic. Such interpretation of the relevant laws is questionable, although the case law provides some potentially useful precedent despite adhering on the whole to narrow definitions of what constitutes an emergency. Specifically, in a 1981 case involving the relocation of a General Motors facility in Michigan, a federal court deemed the U.S. Department of Housing and Urban Development to have acted improperly in using NEPA’s emergency provisions to shortcut the NEPA process to meet a financing deadline. (See Crosby v. Young, 512 F. Supp. 1363 (E.D. Mich. 1981). Compare to Nat. Resources Def. Council v. Winter, 527 F. Supp. 2d 1216 (C.D. Cal. 2008).)

Nevertheless, the present expansion of emergency authorities is all the more controversial in light of past initiatives by the Trump administration to limit the scope of environmental reviews for infrastructure projects. In August 2017, the White House issued Executive Order 13807, to establish discipline and accountability in conducting environmental reviews of infrastructure projects. Less than a year later, in June 2018, the White House Council on Environmental Quality published an Advanced Notice of Proposed Rulemaking on suggestions for streamlining NEPA review. (See 83 FR 28591 (June 20, 2018).) Proposed rules were published in January 2020, and final rule may be promulgated within weeks. (See 85 FR 1684 (January 10, 2020).) Just last week the U.S. Environmental Protection Agency finalized a rule that would impede the ability of states and tribes to challenge CWA permits for energy pipeline projects. Also controversial is the timing of the EO relative to April 15, 2020, and May 11, 2020, rulings by the U.S. District Court of Montana vacating Nationwide Permit 12, to the extent it authorizes minimal impacts to Waters of the United States from oil and gas pipeline crossings, for failure to fulfill ESA consultation requirements. This decision is currently under appeal to the Ninth Circuit, which on May 28, 2020, struck down an appeal to stay the vacatur.

A number of environmental groups already have vowed to challenge the EO, including the Center for Biological Diversity, which issued a formal notice to the Trump administration of violations of the ESA, the Southern Environmental Law Center, and the National Resources Defense Council. Were the prospect of litigation to materialize, a project may incur lengthier delays than those precipitated by the COVID-19 pandemic.

Next Steps

As agencies work to meet the reporting deadlines of the EO, an opportunity presents itself for industry to proactively engage with regulators to obtain expedited treatment for their projects based on anticipated economic benefits. However, any parties interested in taking advantage of the EO must carefully consider the risks of litigation involving not just challenges to the EO but also recent NEPA rulemakings and the Ninth Circuit cases regarding Nationwide Permit 12. Among other things, this should entail a close scrutiny of project timelines and costs to make sure that the potential benefits of expedited treatment are worth litigation risks that would involve potential future delays.

Lawyers in Pillsbury’s environmental, energy, and projects teams have years of experience counseling clients with respect infrastructure projects, including how to navigate the intricacies of NEPA, the ESA, and CWA. Please contact Mona Dajani, Sheila Harvey and Reza Zarghamee with any questions.


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