January 10, 2020

White House Releases Long-Awaited NEPA Streamlining

The Trump administration’s regulation reform has been one of the more consistent elements of both its policy development and political messaging. The President and congressional Republicans have touted improvements to the Waters of the United States (WOTUS) rule and replacement of Obama administration limits on air emissions, as well as other actions to streamline regulation. These measures lower barriers to domestic spending on infrastructure as well as traditional and renewable energy development. On January 9, 2020, the administration sharpened its focus onto the law that many energy producers and infrastructure developers consider the greatest impediment to an efficient regulatory process: the National Environmental Policy Act, better known as NEPA (42. U.S.C. §§ 4321, et seq.).

Background

NEPA, signed into law in 1970, requires federal agencies to assess the environmental impacts of proposed major federal actions. The Council on Environmental Quality (CEQ) issued regulations for federal agencies to implement NEPA in 1978. CEQ has not comprehensively reviewed those regulations in over 40 years, and practitioners have seen the length of NEPA documents and timeframes for completion expand across the federal government. A December 2018 CEQ study of average NEPA review timeframes since 2010 showed that the average Environmental Impact Statement (EIS) took 4.5 years. 60% of the environmental reviews of federal highway projects in that same timeframe took six or more years to complete. The average Bureau of Land Management (BLM) EIS required 4.4 years. In addition, regulated entities point to a lack of consistency in permitting processes within and across agencies, and requirements vary widely depending on agency management.

Another NEPA modernization issue is whether the law is being applied to activities that should “trigger” NEPA. Even when threshold applicability is met, regulators often default to the more onerous EIS process when applicants believe previous permitting would easily enable the use of Environmental Assessments (EAs) to continue ongoing environmental mitigation.

The Trump Administration’s Proposal

The latest proposal by CEQ seeks to address these streamlining issues through a slew of proposals that address virtually every aspect of the NEPA process.

CEQ proposes new direction regarding the threshold consideration of whether NEPA applies to a particular action. The environmental effects of the project must be “reasonably foreseeable” and have a “reasonably causal relationship” to the proposed action. While cumulative environmental effects will no longer be considered, greenhouse gas emissions will not be excluded from review.

CEQ proposes to “modernize, simplify and accelerate the NEPA process” by establishing a two-year time limit for completion of EISs and one year for the shorter EAs, as well as limits on the number of pages for each document.

CEQ also seeks to condense the interagency review process by:

  • Strengthening the lead agency role.
  • Asserting a preference for a single Record of Decision on projects.
  • Promoting the adoption of processing technology.

The council simultaneously seeks to improve the quality of engagement with tribal, state and local authorities that often feel excluded from federal decision-making.

NEPA has built-in tools to reduce the complexity of specific permit reviews, including the use of Categorical Exclusions and Findings of No Significant Impact. The categorical exclusion has been a particularly useful tool in some areas where a sudden uptick in permit proposals that are substantially similar – say in the same shale oil and gas field – overwhelms the capacity of permitting offices. This capacity issue has cropped up repeatedly as the domestic oil and gas industry has been forced to become more mobile in its search for cost-competitive shale developments. These permits are often pre-construction, which can leave a broader area of development in limbo while the approval of a sub-part of a development plan is still under review. The CEQ proposes to address these issues by allowing some activities to proceed before permit review is completed, broadening the use of contractors to assist agency personnel and broadening the use of categorical exclusions.

The proposed rule-making will be open to public comment until March 10 and the administration plans to hold stakeholder engagement sessions in both Washington and Denver. The administration is eager to complete this rule-making prior to May, as that is the estimated deadline for future consideration under the Congressional Review Act (CRA). The CRA was designed to provide protection from “midnight regulations” passed at the conclusion of an outgoing administration. With super-majority approval of Congress and the signature of the new President, regulations that were finalized late in the previous administration can be overturned. Additionally, the CRA removes the ability to regulate similarly in the future. Prior to last Congress, the CRA was only successfully used once, but congressional Republicans were spurred by President Trump in 2017 to eliminate 15 Obama-era regulations. With the outcome of the 2020 presidential and congressional elections far for from certain, the administration is keen to finalize its priorities as early in 2020 as practicable.

More information regarding the administration’s plans for NEPA modernization is available here.

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