Generational Reform of the National Environmental Policy Act Has Weighty Implications for the Nuclear Industry

Although the final rule does not directly address the environmental review procedures of federal agencies that regulate the commercial nuclear industry, these agencies—including the Nuclear Regulatory Commission (NRC or the Commission), Federal Energy Regulatory Commission (FERC), and Department of Energy (DOE)—have based their own procedures on CEQ’s regulations. Indeed, since the promulgation of the final rule, NRC has reiterated its likely continued adherence to CEQ regulations as a matter of policy, despite the fact that the Commission has historically insisted that as an independent agency it is not obligated to do so. Therefore, the recent amendments will likely precipitate changes to environmental reviews of federal actions relevant to the nuclear industry.

Core Elements of the Amendments
The main features of the amendments include the following:

• Establishing presumptive time and page limits on environmental documents: e.g., two years and 150 pages of main text for an Environmental Impact Statement (EIS) and one year and 75 pages of main text for an Environmental Assessment (EA). This concept represents a carryover from Executive Order 13087. However, the limits are aspirational rather than strictly enforceable.
• Limiting the applicability of NEPA: The amendments limit the range of actions subject to NEPA review in a manner largely consistent with past court decisions. For example, under the revised 40 CFR § 1501.1, NEPA review is inappropriate when a federal action involves a non-discretionary agency obligation or when environmental review procedures under another statute are functionally equivalent to NEPA.
• Enhanced use of EAs and Categorical Exclusions: Under NEPA, the highest level of documentation is an EIS, which is necessary for major federal actions that have significant environmental impacts. Actions that fall short of this standard may be addressed through less onerous EAs or even categorically excluded. The amendments clarify the meaning of “major federal action” to reduce the number of federal actions that require an EIS. The amendments especially advocate for the expanded use of Categorical Exclusions. For example, they authorize agencies to establish procedures to categorically exclude activities excluded by other agencies.
• Narrowing the scope of environmental effects subject to review: The amendments reinforce the principle that NEPA documents must focus on “reasonably foreseeable” effects and should not be encyclopedic compilations that capture all possible scenarios to render an action “litigation-proof.” As elaborated in the preamble to the final rule, the concept of “reasonably foreseeable” should be treated similarly to that of “proximate cause” in tort law. Thus, the amendments reject the notion of “but for” analysis and eliminate cumulative impacts from the definition of “effects.” On the other hand, the preamble does not preclude the treatment of climate change impacts as part of the environmental review process. This is relevant to the nuclear industry, as nuclear energy is a clean energy source.
• Encouraging tiering and incorporation by reference: The amendments advocate tiering, incorporation by reference, and adoption of existing analyses, to focus new NEPA analysis only on issues that previously have not been addressed. The concept of tiering has always existed with NEPA. However, the recent amendments expand the definition of “tiering” at 40 CFR § 1501.11 to expand the scope of documents that can be relied upon to include not just other EIS reports, but also EAs and other data.
• Relying on project proponents to prepare NEPA documents: The amendments modify 40 CFR § 1506.5 to make clear that applicants, who have a clear interest in facilitating the environmental review process, may prepare EIS and EA reports, albeit under the ultimate authority and supervision of the federal agency.
• Exhaustion of administrative remedies as a prerequisite to litigation: The amendments require that agencies solicit public comment on NEPA documents as early as possible in the environmental review process and require that administrative remedies be exhausted before project opponents resort to litigation. Objections raised in untimely or vague comments are regarded as unexhausted and forfeited under the revised 40 CFR § 1503.3.

Potential Effects on NRC’s NEPA Procedures
The principles reflected in the CEQ’s amendments reflect approaches that the nuclear energy industry has advocated to the NRC in recent years to streamline the Commission’s environmental review process, which is notoriously slow and complicated. Moreover, the basic premise of expediting environmental review is consistent with the Nuclear Energy Innovation and Modernization Act (NEIMA), which was signed into law in January 2019. Among other things, this federal statute requires NRC to establish an accelerated milestone schedule for license renewal applications, and NRC has instituted and, thus far, adhered to the schedule.

That being said, the likely impact of the amendments on the NRC’s current environmental review process is difficult to ascertain. However, it seems reasonable that the CEQ amendments could precipitate the following changes to current NRC practice:

• Allowing certain types of licensing and permitting actions that presently require the preparation of an EIS under 10 CFR § 51.20 to be addressed through an EA or Categorical Exclusion. This seems to be a possible outcome with respect to certain advanced nuclear reactor designs, some of which have relatively small geographical footprints and do not require cooling towers.
• Developing new Generic Environmental Impact Statements (GEIS) to address certain actions that currently require a standard EIS. Existing NRC practices authorize tiering, and the Commission has prepared several GEIS to date, for activities such as license renewal (NUREG-1437), plant decommissioning (NUREG-0586), and continued storage (NUREG-2157). The CEQ’s amendments may inspire NRC to expand the use of GEIS to other activities, an initiative that Pillsbury has advocated with positive results on behalf of firm client ClearPath.
• Having project proponents, rather than NRC Staff, draft EAs and EISs. Industry has cited the NRC Staff’s preparation of draft and final NEPA documents, including responses to agency requests for additional information, as a contributing factor to the Commission’s slow-moving environmental reviews. Shifting the responsibility of report preparation to industry—albeit under NRC supervision—may expedite the process, provided litigation risks associated with the adequacy of the Commission’s oversight are avoided.

On the other hand, certain aspects of CEQ amendments are unlikely to result in meaningful changes to current NRC practice. For example, the NRC currently incorporates, but does not enforce, CEQ’s existing page limits in its own NEPA regulations. (See Appendix A to 10 CFR Part 51.) Even if the Commission were to strictly enforce the new page limits set forth in the CEQ amendments, these easily could be circumvented by moving text from the main body of the report to appendices. Similar considerations apply to the presumptive time limits established under the recent amendments, as these may be extended by senior agency officials and, given this leeway, both private parties nor NRC Staff would likely sacrifice timeliness if it meant issuing a report less likely to be challenged.

Furthermore, CEQ amendments do not directly address the adjudicatory hearings permitted under 10 CFR §§ 2.309(f)(vii)(2), 51.94, and 51.104(a)(1), on contested elements of the NRC Staff’s review. These hearings are not required under NEPA and constitute a unique feature of the Commission’s environmental review procedures that are often a source of delay in the completion of the NRC licensing process as they may not commence before a final EIS is issued. Thus, without wholesale revisions to the relevant authorizing regulations, mere adoption of the CEQ amendments would not remove this cause of delay.  

The Specter of Litigation Challenges and the Congressional Review Act
Although the nuclear industry will largely welcome the NEPA amendments, environmental groups have roundly criticized CEQ’s rulemaking and characterized it as a gutting of the statute. Some have vowed to challenge the rulemaking, both on its face and in its application to individual projects.

In the latter connection, some of the approaches advocated by the amendments may incite claims, which, if brought, may actually result in greater delays than under the current NEPA process. For example, although project applicants may complete environmental reports more quickly than governmental agencies, such as the NRC, legal challenges regarding the adequacy of agency oversight may slow down the process to a greater degree than if NRC Staff were to have prepared the reports in the first place.

Perhaps an even greater threat to the implementation of the amendments involves the Congressional Review Act. The Trump administration made novel use of this statute to overturn a number of Obama-era rulemakings. A Democratic victory in the 2020 presidential elections could result in a new administration seeking to return the favor with rulemakings promulgated during the Trump presidency.

Nevertheless, were the CEQ amendments to avoid or survive a mandatory congressional review, their impact on NRC procedures will only become apparent once the Commission’s regulations at 10 CFR Part 51 are amended. This will entail further rulemakings and public outreach by the Commission. Interested parties should act now if they wish to influence this process.

Pillsbury has leading nuclear regulatory and environmental practices with over 60 years of experience representing clients in connection with rulemakings and other important regulatory developments. Pillsbury practitioners include a variety of nuclear specialists including a former NRC commissioner and NEPA specialists.