Takeaways

The proposed amendments to the NEPA regulations are the most comprehensive revisions in over 40 years.
The amendments would speed up NEPA reviews and eliminate consideration of a project’s indirect and cumulative environmental impacts.
Comments on the proposed revisions must be submitted to CEQ by March 10, 2020.

On January 10, 2020, the White House Council on Environmental Quality (CEQ) issued a Notice of Proposed Rulemaking (85 Fed. Reg. 1684) announcing major proposed revisions to the regulations implementing the National Environmental Policy Act (NEPA). The revisions propose sweeping streamlining and modernizing changes to the environmental review and permitting process for federal projects, including many infrastructure and energy projects. Most significantly, the proposal would eliminate the need to study a project’s cumulative or indirect environmental effects; exclude many projects from NEPA review; and shorten the time for completing NEPA review and approvals. The proposed changes mark the first comprehensive update to the NEPA regulations in over 40 years.

Background

NEPA and the current CEQ regulations (42 U.S.C. § 4321, et seq.; 40 CFR Parts 1500-1508) require federal agencies proposing to undertake, approve, or fund “major Federal actions” to evaluate the action’s environmental impacts, including both direct and reasonably foreseeable indirect effects. NEPA also requires agencies to consider alternatives to the proposed action and to discuss cumulative impacts resulting from the incremental effects of the project when added to those of other past, present, and reasonably foreseeable future projects.

The proposed updates to the NEPA guidelines follow a series of Trump Administration initiatives aimed at streamlining and accelerating the NEPA review process for infrastructure and energy projects. Executive Order (EO) 13807 (Aug. 15, 2017) provided accelerated NEPA reviews and enhanced interagency coordination by, among other things, imposing a two-year deadline for completion of review and requiring federal agencies to issue all project approvals within 90 days of the lead agency’s Record of Decision (ROD)—a policy known as “One Federal Decision.” In June 2018, CEQ issued an Advance Notice of Proposed Rulemaking requesting public comments on potential revisions to update, clarify, and enhance the efficiency of the NEPA regulations. The proposed CEQ regulations incorporate elements of the One Federal Decision Policy, court decisions, public comments and previous CEQ guidance.

Key Proposed Revisions to CEQ Guidelines

Narrowed Scope of Projects Requiring NEPA Review. NEPA requires agencies to prepare an Environmental Impact Statement (EIS) for “major Federal actions significantly affecting the quality of the human environment.” Proposed Section 1508.1(q) would narrow the scope of actions subject to NEPA review by amending the definition of “major Federal action” to exclude “non-Federal projects with minimal Federal funding or minimal Federal involvement where the agency cannot control the outcome of the project.” For example, a project that includes “a very small percentage of Federal funding” but “is otherwise funded through private or local funds” would not require NEPA review.

The new regulations would also remove a provision from the current definition specifying that “major Federal actions” include circumstances where “the responsible officials fail to act,” concluding that NEPA does not apply to such situations because “there is no proposed action and therefore no alternatives that the agency may consider.” The Notice of Proposed Rulemaking invites further public comment on whether the definition of “major Federal action” should exclude other categories of activity.

Elimination of “Indirect” Effects and “Cumulative Impacts” Analysis. The most significant and far-reaching proposed revision to the NEPA regulations is the elimination of the requirement that agencies consider a project’s cumulative and indirect impacts. The current regulations require agencies to study a project’s environmental “effects,” including foreseeable direct, indirect, and cumulative effects. A cumulative impact is “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions….”

Proposed Section 1508.1(g) would remove the terms “direct,” “indirect,” and “cumulative” from the definition of “effects,” providing that effects must instead be “reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives.” A “but for” causal relationship is “insufficient to make an agency responsible for a particular effect under NEPA.” Furthermore, effects are not significant “if they are remote in time, geographically remote, or the product of a lengthy causal chain.” Proposed Section 1508.1(g)(2) would codify the holding of Department of Transportation v. Public Citizen, 541 U.S. 752 (2004) that “effects” cognizable under NEPA do not include “effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.” Finally, and most significantly, the proposal would eliminate the requirement that agencies study a project’s “cumulative” and “indirect” impacts by removing the definition of “cumulative impacts” and stating that “[a]nalysis of cumulative impacts is not required under NEPA.” See proposed Section 1508.1(g). The preamble to the proposed rule notes that determining the scope of cumulative effects can “divert agencies from focusing their time and resources on the most significant effects,” resulting in the production of “encyclopedic” instead of informative documents.

Eliminating “cumulative impacts” and “indirect impacts” analysis represents a significant deregulatory step. This change would affect a far broader scope of cumulative environmental issues than climate change and, if finalized and upheld after legal challenge, would alter many aspects of NEPA review. However, it is widely reported that the Administration specifically intends the proposal to eliminate the requirement to consider a project’s indirect and cumulative impacts on climate change from greenhouse gas (GHG) emissions. Climate change analysis is quintessentially a cumulative impact because no single project’s GHG emissions are individually linked to planet-wide effects. Moreover, energy projects that produce, store, or transport fossil fuels may indirectly contribute to “downstream” emissions when the fuels are consumed later in time and at distant locations, in addition to direct emissions from on-site operations. In several recent decisions, courts have held that federal agencies must consider such “downstream” GHG emissions associated with oil and gas approvals. (See, e.g., Sierra Club v. FERC, 867 F.3d 1357 (2017), finding that the Federal Energy Regulatory Commission was required to assess downstream GHG impacts when approving interstate pipeline projects.) In June 2019, CEQ issued draft guidance clarifying federal agencies’ obligations to consider indirect and cumulative impacts of GHG emissions in NEPA reviews. The guidance stated that a separate GHG cumulative impacts analysis was not required but stopped short of eliminating the obligation to analyze reasonably foreseeable indirect or cumulative GHG impacts altogether. CEQ acknowledges comments regarding analysis of GHG emissions but concludes that it is not appropriate “to address a single category of impacts in the regulations.” Nonetheless, CEQ invites public comments on whether the CEQ GHG guidance should be codified in the NEPA regulations.

Timing and Page Limits. The new regulations would shorten the preparation time and set presumptive page limits for NEPA documents, while allowing agencies some flexibility to exceed these limits. Current regulations do not prescribe specific time periods for completion of NEPA review. Proposed Section 1501.10(b) would establish presumptive time limits of one year to complete an Environmental Assessment (EA) and two years to complete an EIS. However, the regulations allow agencies some flexibility in extending these timelines if a senior agency official approves. CEQ invites comments on “whether the regulations should specify even shorter timeframes.”

The proposed revisions also limit the length of NEPA documents. The proposal retains the current page limit requirements for EISs: “normally” less than 150 pages, and less than 300 pages for projects of “unusual scope or complexity.” Proposed Section 1501.5(e) would establish a presumptive 75-page limit for EAs. This requirement is meant to encourage agencies to produce more “readable” and “concise” documents focusing on information useful to decision-makers and the public. But, again, the new regulations allow agencies some flexibility to exceed those page limits, if a senior agency official approves.

One Federal Decision Policy. The proposed revisions explicitly incorporate several key elements of the One Federal Decision policy outlined in EO 13807 that are aimed at improving interagency coordination and efficiency, including:

  • Requiring the lead agency to develop a joint schedule setting milestones for all environmental reviews and authorizations required for a project and providing conflict resolution procedures to elevate issues to the appropriate officials of the agency for “timely resolution.”
  • For proposals requiring action by multiple federal agencies, requiring lead and cooperating agencies “to the extent practicable” to prepare a single EIS and issue a joint ROD, or prepare a single EA and issue a joint Finding of No Significant Impact (FONSI).
  • Clarifying that agencies must, to the “fullest extent possible,” integrate their NEPA analyses with other applicable federal environmental review laws and EOs, in furtherance of the One Federal Decision policy.

Analysis of Alternatives. The new regulations would narrow the range of alternatives an agency must consider in an EIS. Current regulations require an EIS to “evaluate all reasonable alternatives” to a proposed project, but do not define “reasonable alternative.” Proposed Section 1508.1(z) would define “reasonable alternatives” as a “reasonable range of alternatives that are technically and economically feasible, meet the purpose and need for the proposed action, and, where applicable, meet the goals of the applicant.” CEQ notes that an EIS “need not include every available alternative where the consideration of a spectrum of alternatives allows for the selection of any alternative within that spectrum.” The changes would also remove current Section 1502.14(c) requiring the agency to study reasonable alternatives outside the jurisdiction of the lead agency, because CEQ reasons that the lead agency would be unable to implement such alternatives. While the new regulations stop short of limiting the number of alternatives an agency should consider, CEQ invites public comment on whether the regulations should establish a presumptive maximum number of alternatives for evaluation.

Other Issues. The new regulations include several other significant changes, including modifications to the scoping process to allow agencies to begin the scoping process for a project as soon as the proposed project is “sufficiently developed,” rather than requiring publication of a Notice of Intent (NOI) as a precondition to scoping; new formatting requirements for EISs, including requiring agencies to include a cost estimate in a cover sheet; clarification that agencies can rely on existing scientific and technical research to inform NEPA review and need not undertake new research; and encouraging agencies to identify actions not subject to NEPA in their agency-specific NEPA regulations. This last issue may be an important opportunity for stakeholders to encourage agencies to update and expand the use of categorical exclusions to eliminate NEPA review for smaller projects.

One change that may inadvertently conflict with the overall streamlining objective is proposed Section 1502.22(d), defining “reasonably foreseeable” impacts to include those “which have catastrophic consequences, even if their probability of occurrence is low,” provided that the analysis is supported by scientific evidence, not conjecture. The original NEPA regulations required “worst case” analysis of large magnitude, low probability environmental risks, but CEQ revoked that requirement in 1986. CEQ likely will need to clarify whether it intends to restore a “worst case” analysis requirement with this change.

Next Steps. CEQ will accept public comments on the proposed rule through March 10, 2020. The agency will hold two public hearings in February 2020 before the final rule is issued.