Streamlining Federal Environmental Review and Permitting of Infrastructure Projects: 2018 Year in Review

On August 15, 2017, President Trump issued Executive Order ("EO") 13807," outlining processes and requirements to expedite environmental review and approval of major infrastructure projects, such as bridge and highway repair, airport modernization and traditional and renewable energy projects. 2018 saw a variety of efforts by federal agencies to streamline environmental review of infrastructure projects and reduce construction delays. This article examines those efforts and discusses their potential impact.

EO 13807

The EO established a goal of completing project reviews under the National Environmental Policy Act ("NEPA", 42 U.S.C. § 4321 et seq.) within two years and a "One Federal Decision" policy, requiring all federal agencies to issue necessary project approvals within 90 days of the lead agency's Record of Decision ("ROD"). Federal agencies have taken steps to implement the EO through rulemaking, policies and other actions.

Inter-Agency Streamlining Memorandum of Understanding<\/u>

On April 9, 2018, twelve federal departments and agencies - the Departments of Agriculture, Commerce, Energy, Homeland Security, Housing and Urban Development, Interior and Transportation, the Environmental Protection Agency, Army Corps of Engineers, Federal Energy Regulatory Commission ("FERC"), Advisory Council on Historic Preservation and Federal Permitting Improvement Steering Council ("FPISC") - signed a Memorandum of Understanding ("MOU") committing to implementation of the EO. The MOU represented a coordinated effort among agencies often involved in major infrastructure projects, establishing deadlines and processes for agency coordination, communication and dispute resolution.

The MOU requires the lead agencies on complex infrastructure projects to create and update permitting timetables setting milestones to meet the two-year completion goal. All agencies with approval authority over the project must issue concurrences (i.e., written confirmation that NEPA review may proceed) at three points at the outset of the process: the statement of purpose and need; identification of project alternatives; and identification of the "preferred alternative" (i.e., the proposed project analyzed in an Environmental Impact Statement ("EIS")). The MOU also established an inter-agency dispute resolution process and required agencies to designate a point of contact person for each project to oversee interagency coordination. In addition, the MOU includes specific streamlining provisions for natural gas pipelines and hydropower projects where FERC acts as lead agency.

5G Wireless Projects

On May 3, 2018, the Federal Communications Commission ("FCC") issued a final rule on "Accelerating Wireless Broadband Deployment by Removing Barriers to Infrastructure Investment," which exempts deployment of small fifth generation ("5G") wireless facilities by non-Federal entities from NEPA and the National Historic Preservation Act in most cases.

Council on Environmental Quality's NEPA Regulations Update

On June 20, 2018, the Council on Environmental Quality ("CEQ") issued an advance notice of proposed rulemaking to update its regulations implementing NEPA.  CEQ broadly solicited public comments and streamlining suggestions on many aspects of the regulations, including: (i) concurrent, synchronized, timely, and efficient NEPA reviews involving multiple agencies; (ii) format and length of NEPA documents and time limits for completion; (iii) potential revision of key NEPA definitions including "major federal action," "effects," and "significantly," and introducing the term "trivial violation" to define procedural NEPA violations that need not halt a project's advance; (iv) updating procedures to utilize new technologies; (v) means of promoting agency coordination, such as combining NEPA and other decision documents; and (vi) the range of alternatives considered and elimination of alternatives from detailed analysis.

Over 12,500 comments were submitted by interest and trade groups, companies and individuals. Construction industry commenters generally supported the initiative. The American Society of Civil Engineers encouraged streamlining of project permits, noting that its recent 2017 Infrastructure Report Card gave the nation's infrastructure a D+ grade. The Associated General Contractors of America offered suggestions such as eliminating some alternatives from discussion in an EIS, e.g., alternatives that would exceed a project's budget or significantly alter its purpose or location; revising standards for supplemental NEPA review of project changes; and clarifying which "reasonably foreseeable" impacts must be considered in cumulative impacts analysis.

According to the Administration's regulatory agenda, CEQ is scheduled to issue a notice of proposed rulemaking in February 2019, containing proposed revisions to the NEPA regulations and soliciting comments. It remains to be seen how commenters' suggestions and perspectives will shape the rule that is ultimately adopted. Meanwhile, agencies may unilaterally implement some of EO 13807's streamlining suggestions. For example, prior to the CEQ rulemaking notice, the Secretary of the Interior directed Department of Interior agencies to limit EISs to 150 pages in most cases or 300 pages for unusually complex projects, exempting appendices.

Western Water Projects

On October 19, 2018, President Trump issued a memorandum directing the Departments of Interior, Commerce, Energy and the Army, together with the Chair of CEQ, to work collaboratively to reduce regulatory burdens on projects to increase water reliability in the Western United States.  The Departments of Interior and Commerce were required to identify high priority water infrastructure projects in California subject to their authority under the Endangered Species Act and NEPA, designate an official to coordinate their compliance responsibilities for each project, and develop timelines for completing environmental compliance requirements. The memorandum also included project-specific directives, requiring the completion of environmental reviews for California's Central Valley Project and State Water Project and issuance of a ROD within 135 days of January 31, 2019; and requiring development of a schedule for completing an EIS for the Columbia River Systems project by 2020. On November 21, 2018, Departments of the Interior and Commerce announced the signing of a Memorandum of Agreement to expedite reliable delivery and supply of water to Western users.

Revised Department of Transportation NEPA Regulations

On October 29, 2018, the Department of Transportation ("DOT") issued a final rule revising the NEPA regulations for projects funded or approved by the Federal Highway Administration, Federal Transit Administration and Federal Railroad Administration.   The rule implements changes made by Congress in the MAP-21 and FAST Acts, prior to the Trump Administration's EO 13807. The revised regulations require DOT lead agencies, within 90 days of publishing the Notice of Intent to prepare an EIS, to establish a coordination plan and schedule with other agencies for timely EIS completion. In addition, agencies must combine their final EISs and RODs in a single document to the maximum extent practicable, eliminating the former 30-day comment period prior to a ROD.  The rule also includes Categorical Exclusions ("CEs") exempting specified types of projects from NEPA for each agency, while allowing the agencies to rely on each other's CEs.  Finally, the rule expands the definition of "operational right-of-way" within which existing CEs apply.

Conclusion

While federal agencies have taken various streamlining steps such as signing agreements and adopting policies, formal rulemaking such as that proposed by CEQ and completed by DOT and FCC have greater impact. In particular, depending on the final form of CEQ's adopted regulations, the NEPA review process and timeline could change substantially. NEPA itself is a short and rather bare-bones statute, fleshed out by the implementing regulations of CEQ and other agencies, and by court cases applying and interpreting those regulations. Although CEQ has issued a number of guidance documents over the decades, the agency has substantively amended its NEPA regulations only once (in 1986) since their initial adoption.

Project developers and environmental advocates have long argued over the extent to which the environmental review and approval process delays infrastructure projects, and whether the benefits of environmentally-informed decision-making and mitigation outweigh the costs of delay. According to a 2014 U.S. Government Accountability Office report, the average time to complete an EIS is more than 4½ years.  For many project proponents and supporters, that is too long. On the other hand, project sponsors initially thrilled at the notion of genuine NEPA streamlining may be less enthused by the heightened risk of litigation challenging EISs constrained by the two year deadline and page limits. If more agencies follow the model of the Secretary of Interior's Order No. 3355, imposing tight page limits but exempting appendices, we can expect slim EISs that resemble long executive summaries, trailed by bloated appendices that restore the former EIS content.

Finally, the Western water project memorandum represents an interesting tactical shift in the Administration's streamlining efforts, as it is the first such order that applies to a specific region and even identifies timelines for individual projects. Should the memorandum's approach prove effective, it may be followed by other targeted actions to expedite specified projects.