Legal Alert

Feds Propose Overhaul of Environmental Reviews for Controversial Projects

January 13, 2020

The Trump Administration is proposing significant revisions to the implementing regulations of the National Environmental Policy Act of 1969 (NEPA) in an overhaul effort that the Administration is touting as a “modernization” of the NEPA review process. 

NEPA requires federal agencies to provide a documented evaluation, with public input, of the environmental impacts of a proposed project that involves federal approval or funding, such as grants, contracts, loans, or permits. NEPA imposes procedural requirements designed to ensure that federal agencies consider environmental impacts as part of their decision-making and communicate with the public about their analyses, but does not dictate a particular agency decision.

Why do project proponents care about NEPA? Because the NEPA process can drive up project costs and cause significant project delays. Contributing to those oft-cited criticisms of NEPA is that third-parties opposing projects can sue the sponsoring federal agency, alleging that the agency failed to adequately consider certain environmental impacts or to follow certain procedures in completing the evaluation. NEPA litigation is so common that, according to the proposal, federal district and appellate courts issue more than 100 NEPA decisions each year. Each of these cases represents additional cost and potential project delay.

One topic that has received considerable attention in the courts in recent years is the degree to which the federal agency must evaluate and consider the impacts of the proposed project on climate change. Under current CEQ regulations, a NEPA review must consider not only the direct effects of a proposed project, but also the “indirect effects,” defined as those “which are caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable.” Much of the case law addressing the degree to which the federal agency must consider a project’s climate change impacts turns on an interpretation of what impacts are “reasonably foreseeable,” and has resulted in varying court decisions. CEQ is proposing to remove the terms “direct,” “indirect,” and “cumulative,” and to replace them by defining “effect” as being “reasonably foreseeable” and having “a reasonably close causal relationship to the proposed action or alternatives.” Though the proposed revision is intended to reign in what some have described as overly-expansive interpretations by some courts of what effects must be considered and documented, it remains to be seen whether the revision will be successful in reducing confusion and uncertainty and litigation over the climate change impacts that must be considered. Additionally, whether the revisions, if finalized, unlawfully depart from the statutory command of NEPA is almost certain to be litigated.

A federal agency usually fulfills its NEPA obligations by preparing either an “Environmental Assessment” or a more involved “Environmental Impact Statement” for a proposed project. Current CEQ regulations include recommended page limits for the text of final Environmental Impact Statements of fewer than 150 pages. According to the proposal, however, Environmental Impact Statements average about 400 pages and take more than four years to complete. The proposal would establish a one-year time limit for completing an Environmental Assessment and a two-year time limit for completing an Environmental Impact Statement.  While shortening the NEPA review process may be desirable, it could also make the reviews vulnerable to allegations that they were rushed and are deficient. An arbitrary time limit, while streamlining the NEPA review, could lead to an increase in litigation that could ultimately delay project development.

Whether the Trump Administration’s overhaul of NEPA has a chance to be applied to projects depends largely on whether President Trump gets re-elected in 2020, since it could be close to the end of 2020 by the time the CEQ is able to publish a final rule. A different administration could try to reverse the reforms, similar to President Trump’s withdrawal in early 2017 of the Obama Administration’s guidance on the consideration of greenhouse gases and climate change in NEPA reviews.

CEQ is accepting public comments on the proposal through March 10, 2020.

Copyright © 2020 by Ballard Spahr LLP.
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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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