United States: Phase II Of NEPA Reforms Raises Questions For Permit Applicants; Comments Due By September 29, 2023

On July 28, the White House Council of Environmental Quality (CEQ) proposed Phase II of its National Environmental Policy Act (NEPA) regulations following key amendments to the landmark statute under the Fiscal Responsibility Act of 2023 (FRA). A notice of proposed rulemaking (NPRM) was published in the Federal Register on July 31, 2023.¹ The broad extent of these reforms are evident in a redlined version of the NEPA regulations provided by CEQ.²CEQ asserts that the changes will both ease the NEPA review process and accelerate clean energy projects.³However, these goals may be undermined by provisions ensuring robust public involvement, particularly from overlooked communities, access to judicial review, consideration of climate change and environmental justice impacts, and increased agency flexibility. Comments on the NPRM are due by September 29, 2023.

The proposed rule largely incorporates the FRA amendments into the NEPA regulations and establishes procedures for agency implementation of the FRA amendments. The FRA amendments stressed economizing the NEPA review process.⁴For example, the proposed rule clarifies the procedure for agencies to (1) adopt categorical exclusions, (2) adopt programmatic environmental impact statements, and (3) determine lead and cooperating agencies.⁵One important addition to the regulations eliminates the need for agencies to prepare an environmental impact statement for projects with significant beneficial effects.⁶This is particularly relevant for renewable energy projects that may have a large environmental footprint in the short-term. Agencies may now conclude that an environmental impact statement (EIS) is unnecessary if the long-term environmental benefits outweigh the short-term impacts.

The proposed rule would eliminate much of the Trump administration's 2020 NEPA rule, particularly those provisions intended to reduce NEPA to a purely “procedural statute” and replaces it with language reasserting the statute's fundamental policy of protecting the environment. The net impact of the regulations' reasserted policy goals is unclear. This resembles the original NEPA regulations adopted in 1978 in some respects. However, the regulations maintain the Trump-era rule's strict deadlines for completing environmental assessments (EA's) and EIS's.⁷CEQ's interpretation may allow greater agency flexibility to adopt practices supporting NEPA's policy goals as opposed to strictly applying procedural rules, which could run contrary to industry calls for consistency and certainty. While the CEQ proposal would provide additional guidance on what comprises a threshold “major federal action” triggering NEPA, it also stresses that this continues to be an individualized, factual determination.⁸CEQ is inviting comments on whether additional changes to the regulation governing the appropriate level of review are needed.⁹

Additional mandates that agencies consider climate change and environmental justice impacts when preparing EA's and EIS's process further complicate attaining CEQ's stated goal of accelerating NEPA reviews.¹⁰Agencies must now identify reasonable alternatives to mitigate climate impacts, in addition to reasonably foreseeable future climate conditions.¹¹The proposed rule also emphasizes the importance of community involvement in the early stages of a project by, for example, (1) eliminating certain threshold requirements that public comments must satisfy, and (2) removing Trump-era provisions limiting the availability of injunctive relief upon demonstrating that NEPA was violated.¹²

In summary, the CEQ proposal is a mixed bag which both adds policy considerations and imperatives to the NEPA process while also seeking to enhance predictability and accelerate that process. Interested parties should strongly consider providing comments to the proposed rule. The NEPA regulations have now been revised three times in recent years, which means additional changes are unlikely to occur in the near future.

Comments to the proposed rulemaking, docket number CEQ-2023-0003,¹³must be submitted by September 29, 2023. CEQ will conduct four virtual public meetings during the comment period: August 26 from 1 p.m. to 4 p.m. EST; August 30 from 5 p.m. to 8 p.m. EST; September 11, 2023 from 1 p.m. to 4 p.m. EST; and September 21, 2023 from 2 p.m. to 5 p.m. Meeting registration information is available at CEQ's website.¹⁴

Footnotes

1. National Environmental Policy Act Implementing Regulations Revisions Phase 2, 88 FR 49924 (July 31, 2023), https://www.federalregister.gov/documents/2023/07/31/2023-15405/national-environmental-policy-act-implementing-regulations-revisions-phase-2.

2. See https://ceq.doe.gov/docs/laws-regulations/CEQ-Regulations-Redline-for-Proposed-Rule.pdf.

3. The White House, “Biden-⁠Harris Administration Proposes Reforms to Modernize Environmental Reviews” (July 28, 2023), available at https://www.whitehouse.gov/ceq/news-updates/2023/07/28/biden-harris-administration-proposes-reforms-to-modernize-environmental-reviews-accelerate-americas-clean-energy-future-and-strengthen-public-input/.

4. See  Goldberg, et al., “Congress Streamlines NEPA as Part of Debt Ceiling Package: How Much Has Really Changed?”, Steptoe & Johnson LLP (June 27, 2023), available at https://www.steptoe.com/en/news-publications/congress-streamlines-nepa-as-part-of-debt-ceiling-package-how-much-has-really-changed.html?tab=overview#_ftn1.

5. 88 FR 49937; 88 FR 49940.

6. 88 FR 49964.

7. 88 FR 49972.

8. 88 FR 49934.

9. Id. (citing 40 CFR § 1501.3).

10. 88 FR 49949.

11. Id.

12. 88 FR 49951.

13. National Environmental Policy Act Implementing Regulations Revisions Phase 2, Docket No. CEQ-2023-0003, available at https://www.regulations.gov/docket/CEQ-2023-0003.

14. See  CEQ NEPA Regulations, available at https://ceq.doe.gov/laws-regulations/regulations.html.

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