CEQ Proposes Changes to Trump Administration NEPA Regulations

On October 7, the White House Council on Environmental Quality (CEQ) published “Phase One” of its rulemaking to amend NEPA’s implementing regulations. Among other changes, CEQ’s proposal would broaden the scope of the NEPA environmental review process by requiring agencies to evaluate the direct, indirect, and cumulative effects of federal projects and authorizations; redefining the meaning of “reasonable alternatives”; and empowering federal agencies to go further than CEQ’s rules in implementing their own regulations.

The practical impact of these proposals is hotly debated. From CEQ’s perspective, they merely return NEPA to the status quo that existed for decades before the Trump Administration’s comprehensive overhaul in 2020. Supporters contend that undoing the Trump revisions is essential to ensuring a robust consideration of climate change impacts. They also cite the need to take account of the cumulative impact of years of polluting activities on underserved and disproportionately burdened communities.

Critics, on the other hand, argue that CEQ’s proposals would return us to a system that was broken. And they point to the tension between bogging down projects in endless “bureaucratic” review, and the Biden Administration’s self-stated goal to vastly expand the infrastructure necessary to drive the energy transition.

It’s important to keep in mind that CEQ’s “Phase One” rulemaking is only the beginning. A “Phase Two” rulemaking is in the works and may be released in early 2022. While Phase One, for the most part, merely walks back the Trump Administration’s changes on certain issues, Phase Two is more likely to reflect new thinking on how to structure procedural reforms to streamline and expedite review and permitting, including for renewable and clean energy projects. Among other things, CEQ hints that it will offer guidance on how to accurately account for the overall greenhouse gas (GHG) benefits of projects, such as renewable energy infrastructure and carbon capture and sequestration, that present short-term environmental impacts but are necessary to mitigate global lifecycle GHG emissions in the long run.

CEQ’s Phase One NEPA rulemaking will inevitably lead to litigation. Some groups have already announced their intent to sue. However, the Western District of Virginia’s recent decision in Wild Virginia v. Council on Environmental Quality, No. 3:20-cv-00045 (W.D. Va. 2021) (dismissing challenge to Trump NEPA rules based on standing and ripeness) calls into question whether a facial challenge to CEQ’s NEPA regulations would get very far.

Stakeholders concerned about streamlining the process for infrastructure permitting and review would be well-advised to engage proactively in CEQ’s rulemaking process for Phase Two, where important procedural issues will most likely be addressed. Project proponents would also be well-advised, where feasible, to ensure that their environmental reviews are consistent with both the current and pending versions of the NEPA regulations during CEQ’s rulemaking processes.

Below is our list of the top five changes in CEQ’s Phase One NEPA proposal, as well as the Top 5 revisions from the Trump Administration that were left untouched and await attention in Phase Two. For additional information, please contact the authors.

Top Five Proposed Changes

1. Revise the scope of the “effects” that agencies must evaluate to once again incorporate “direct” and “indirect” effects. At the heart of NEPA is the requirement that agencies must evaluate the environmental effects of federal projects and authorizations. Under the Trump Administration, CEQ abandoned the concepts of “direct” and “indirect” effects in describing the scope of this fundamental requirement. CEQ’s proposal unwinds that change.

2. Restore the requirement to evaluate “cumulative effects.” The Trump CEQ had removed “cumulative effects” from its regulations. The CEQ now proposes to reinstate the concept of “cumulative effects,” defined as “effects on the environment that result from the incremental effects of the action when added to the effects of the other, past, present, and reasonably foreseeable actions regardless of agency (federal or non-federal) or person undertakes such action.”

3. Delete the rejection of “but for” causation. The Trump CEQ added a new paragraph providing that impacts that merely satisfy a “but for” test for causation do not trigger NEPA obligations; this paragraph also clarified that agencies need not consider effects they have no jurisdiction to prevent. CEQ’s current proposal deletes this paragraph in its entirety.

4. Revise Agency NEPA Procedures. The Trump revisions prohibited federal agencies from imposing “additional procedures or requirements” beyond CEQ’s regulations. The current proposal, by contrast, empowers individual agencies to tailor their NEPA regulations to meet their particular needs, so long as they are consistent with CEQ.

5. Revise the range of reasonable alternatives. The Trump CEQ limited the consideration of “reasonable alternatives,” where appropriate, to those that “meet the goals of the applicant.” CEQ’s proposed definition removes this language, defining “reasonable alternative” as “a reasonable range of alternatives that are technically and economically feasible, and meet the purpose and need for the proposed action.”

Top Five Provisions Left Unchanged

1. Procedures to Streamline Environmental Assessments (EA’s) and Environmental Impact Statements (EIS’s). The current proposal, for example, leaves intact the presumptive time limits established by the Trump Administration for EA’s (one year) and EIS’s (two years), unless the time limit is modified by a senior agency official. It also retains the requirement that, to the "extent practicable," federal agencies prepare a "single" EIS and EA, a "joint" record of decision document, and avoid duplication with state, tribal and local procedures.

2. Definition of “major federal action.” CEQ has not addressed the previously revised definition of "major federal action," which gave independent meaning to the terms "major" and "significant", and included a listing of actions that do not qualify as "major federal actions" and therefore do not trigger NEPA requirements (e.g., decisions that are extraterritorial, non-discretionary, do not result in final agency action, or that involve financing for which the government does not have "sufficient control and responsibility”).

3. Exhaustion of public comments. CEQ has not changed the specification that if public comments are not "timely" submitted, they "shall be considered unexhausted and forfeited” and cannot later be raised in court.

4. Expanded use of categorical exclusions. CEQ has not addressed the Trump CEQ’s language allowing agencies to apply a categorical exclusion established from another agency's NEPA procedures or to adopt other agencies' categorical exclusion determinations.

5. Increased flexibility for applicants. The Trump CEQ, for example, added language allowing applicants to take certain actions while the NEPA process is still underway (e.g., acquiring interest in land), as well as allowing applicants to prepare EIS’s under the direction of agencies. CEQ has not currently proposed to remove these provisions.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.