INSIGHT: CEQ Makes Sweeping Changes to NEPA Rules Impacting Environmental Reviews

The Trump administration’s Council on Environmental Quality (CEQ) has now promulgated a final rule making the most sweeping changes to the regulations implementing the National Environmental Policy Act (NEPA) since the CEQ initially promulgated the rules in 1978.

Many changes in the final rule are welcome and will improve the NEPA environmental review process. But some are highly controversial and undermine the NEPA’s goal of placing consideration of a project’s environmental effects on the same level as economic and other considerations.

President Nixon signed NEPA into law on Jan.1, 1970, but the statute lacks detail, which makes implementing rules particularly important. But the act lacked implementing rules until 1978, when the CEQ promulgated comprehensive NEPA regulations largely codifying federal case law developed in the statute’s first eight years. The CEQ has since has issued many guidance documents but made only limited rule modifications.

The Trump administration’s final rule makes substantial modifications to virtually every significant CEQ rule. Many modifications will improve a NEPA environmental review process that often takes too long and costs too much.

The final rule establishes a presumptive time limit of two years for preparing environmental impact statements (EISs) and one year for preparing environmental assessments (EAs), and presumptive page limits, which should encourage more efficient agency action.

Where NEPA review of a single project involves multiple agencies—common for larger projects with several environmental permits and approvals—the rule requires joint federal agencies review schedules, a single EIS, and a single record of decision approving the EIS. Lead federal agencies also receive a stronger role in resolving disputes with other cooperating agencies.

Parts of the Rule Undermines NEPA

But certain provisions in the new rule appear to undermine NEPA. The most significant is modification of the “effects” definition. Undefined in NEPA, the former CEQ rules defined both direct and indirect “effects” and required evaluation of “cumulative impacts,” which are a project’s incremental impact “when added to other past, present, and reasonably foreseeable future actions . . . .”

Numerous federal courts have relied on these definitions to require climate change analysis in NEPA documents. But the new CEQ rule eliminates the distinction between “direct” and “indirect” effects, and repeals the “cumulative impact” definition.

The new rule requires analysis of only those “effects” that are “reasonably foreseeable and have a reasonably close causal relationship” to the proposed project. The CEQ is apparently attempting to narrow NEPA analysis, claiming it may do so because “the terms direct and indirect effects[] and cumulative impact do not appear in the statute and thus their use is not required by NEPA.” That conclusion is certain to draw a legal challenge.

Two significant changes under the rule, although controversial, appear consistent with NEPA’s purpose. The first allows project proponents a greater role in preparing EISs.

CEQ’s former rules allowed project proponents prepare a draft EA for agency review, but prohibited project proponents from preparing a draft EIS. Critics claim allowing project proponents to draft portions of an EIS is the “fox guarding the chicken coop.” Actually, the change extends to the EIS the flexibility project proponents have long had in preparing EAs.

So long as federal agencies carefully scrutinize and independently evaluate the project proponent’s EIS work product, the change should work well. And the NEPA document public comment process will ensure agencies do not act as mere rubber-stamps for EISs, just as it has for EAs.

A second controversial change consistent with NEPA’s purpose is the modification “major federal action” definition. NEPA’s statutory language requires a “detailed statement” for “major Federal actions significantly affecting the quality of the human environment” without defining the term “major federal action.”

Although the 1978 CEQ rules included a definition, federal courts continue to struggle in determining when NEPA applies. The analysis focuses on how much federal funding or control “federalizes” a project and triggers NEPA review. The new rule provides NEPA does not apply where a federal agency’s role involves “minimal” federal funding or control.

According to the CEQ, the change codifies case law distinguishing the extent of the federal role from a proposed project’s degree of environmental effects. Clarification of the “major federal action” definition may make resolving NEPA’s application easier for the courts.

Expect Litigation

Litigation over the new CEQ rule is inevitable. That litigation may be facial challenges to the rule and as-applied challenges claiming federal agency NEPA for a specific project did not satisfy the statute’s requirements. Facial challenges to the rule could be filed in district courts. As-applied challenges could be filed in either district courts or courts of appeal, depending upon the federal agency conducting a project’s NEPA review.

The new rule may also be a target repeal under the Congressional Review Act. The CRA allows Congress to introduce a joint resolution of disapproval of a final regulation within 60 or fewer legislative days after a final regulation is reported to Congress. In 2017, President Trump signed 14 such joint resolutions overturning Obama administration final rules promulgated as early as May 2016. If Joe Biden is elected, the new CEQ rules are a likely target for CRA repeal.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Thaddeus R. Lightfoot is a partner at the international law firm Dorsey & Whitney who has spent three decades specializing in environmental law. He is also a former trial attorney with the Environment Division of the Department of Justice, where he was lead counsel in numerous civil actions brought by the government to enforce federal environmental statutes.