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Environment & Energy Report

Trump’s Environmental Permitting Update to Spark Legal Frenzy

July 15, 2020, 10:04 PM

States and environmental coalitions are set to wage multiple challenges to President Donald Trump’s overhaul of federal requirements for environmental permitting, setting up long-term regulatory uncertainty and the potential for a checkerboard of rules across the country.

Trump unveiled the plan Wednesday, replacing Nixon-era rules for how federal agencies conduct reviews under the National Environmental Policy Act. The changes are aimed at streamlining permitting timelines for major projects down to two years, Trump said in public remarks in Atlanta.

“It’s going to be a very quick yes or no,” Trump said of the revamped permitting process.

Miners, oil and gas developers, and other industries praised the changes, hopeful they would help them defeat the kind of NEPA-driven litigation that’s recently disrupted projects like the Dakota Access pipeline and oil leasing in the West.

Yet the move poses risks for developers and federal agencies alike. Congress hasn’t rewritten the requirements in the underlying, 50-year-old environmental law, and streamlined reviews that fall short of its mandates could be struck down in court.

“Even though the president has said that he wants to make this process more efficient and effective, it’s going to make it even worse, because it’s going to create more litigation and uncertainty,” said Sharon Buccino, senior director of the lands division at the Natural Resources Defense Council. “The controversy and the confusion around these projects is going to increase, rather than decrease.”

The administration’s critics are already sharpening their legal tools, vowing courtroom fights over how the White House’s Council on Environmental Quality crafted the new regulation.

Legal Uncertainty

Legal challenges are expected to play out in different federal district courts, creating the potential for competing rulings. Depending on the scope of any court decisions against the Trump administration, federal actions in some states could be governed by the new rules, while federal actions in other states could fall under the old rules.

“It could be messy,” said Western Environmental Law Center attorney Susan Jane Brown. But she said she expects courts to reach the same conclusion—that the update is unlawful—and be careful not to create a “patchwork quilt of authority.”

Compounding the legal complexity, challengers are expected to take aim at project-specific NEPA reviews when the administration begins to rely on the new rule in approving projects. That might make some companies wary of seeing their projects reviewed under the streamlined approach.

The 2020 president election creates further uncertainty, said King & Spalding attorney Marcella Burke, a former Interior Department official.

“It’s always possible that the next administration, if there is one, is going to make changes,” she said.

Historically, the U.S. government has had a strong track record fighting back claims under NEPA, winning 70% of environmental impact cases filed each year between 2001 and 2013, “but since 2017, this administration has sustained legal setback after legal setback over its rushed, shoddy environmental reviews,” an NRDC official said in a March Bloomberg Law opinion piece.

Federal judges have repeatedly rebuked the Trump administration for advancing oil development plans without sufficiently considering the consequences for climate change.

Burdensome Process

Supporters of NEPA reform say the changes are badly needed because the statute has hardened over the years into a weapon to stall important projects.

Over time, the review process can grow so burdensome and expensive that project sponsors eventually give up, said Jeff Kupfer, the former acting deputy secretary at the Energy Department under President George W. Bush.

Developers of the Atlantic Coast natural gas pipeline, for example, spent years working on the project before pulling the plug earlier this month, citing delays and legal uncertainty.

The brutal impact of the coronavirus on the economy makes NEPA reform even more important, said Kupfer, now a public policy professor at Carnegie Mellon University.

“We all know that the economic recovery is going to take some time, and there’ll be a fairly significant government role in helping to support that and promote economic growth,” Kupfer said. “And infrastructure, especially when it’s for needed projects that will have a longer-term benefit, is essential to growth.”

Reactions From the Hill

Rep. Rob Bishop (R-Utah), the top Republican on the House Committee on Natural Resources, applauded the changes.

“Every administration for the past half a century has tried to untangle the mess Congress created by writing NEPA in the way it did,” Bishop said, adding that lawmakers were “smoking something when they enacted the obscure and flowery text” of the statute.

But Congressional Democrats quickly opposed the changes.

“Our economy is leaving millions of people behind because the president has failed at his job, not because our environmental standards are too high,” said Rep. Raul Grijalva (D-Ariz.), chair of the House Natural Resources Committee. “This rule change continues President Trump’s sad tradition of giving more power to the powerful and making it harder for Americans to protect their own neighborhoods from polluters.”

Sen. Tom Carper (D-Del.) said that, while the reforms seek to speed up project delivery, they are “only sure to sow chaos and confusion for the foreseeable future, inviting litigation that will ultimately slow project delivery across the country.”

To contact the reporters on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com; Stephen Lee in Washington at stephenlee@bloombergindustry.com; Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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