May 07, 2020

Much ado about CEQ: The uncertain effects of proposed NEPA streamlining regulations

Carlos Romo

On January 10, 2020, the White House Council on Environmental Quality (CEQ) proposed the first major regulations to implement the National Environmental Policy Act (NEPA) in the last 40 years. Much anticipated, and much ballyhooed, the proposed regulations seek to streamline agency NEPA reviews. This article analyzes the actual impact the proposed regulations may have on the environment and projects subject to NEPA.

Background

Adopted in 1969, NEPA requires that agencies examine the “environmental impact” and “adverse environmental effects” of “major Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332. Since its adoption, courts have interpreted NEPA to require agencies to take a “hard look” at the environmental effects of proposed federal actions. NEPA is a procedural statute; it does not impose substantive requirements.

Current CEQ regulations, last updated in 1986, require NEPA reviews to analyze both the direct and indirect effects of an agency action, and the “cumulative impact” that can “result from individually minor but collectively significant actions taking place over a period of time.”

Overview of proposed NEPA reforms and comments on proposal

In addition to relatively minor changes aimed at speeding up NEPA reviews (e.g., time and page limits on NEPA documents and coordination among federal agencies), CEQ proposed three overarching reforms.

1.         Narrowing the scope of major federal actions that trigger NEPA

CEQ proposes a suite of new measures aimed to “assist agencies in a threshold analysis for determining whether NEPA applies.” In particular, CEQ seeks to revise the definition of “major federal action,” and give more flexibility to agencies to satisfy NEPA through another required document that is the “functional equivalent” of a NEPA document (1507.3). The rule also aims to help agencies expand use of categorical exclusions that exempt projects from NEPA.

Project proponents support CEQ’s efforts to streamline NEPA’s applicability. For instance, wind project proponents noted that small federal actions that are part of bigger projects (e.g., a short river crossing permit for a longer renewable energy transmission line) can often envelop the entire project in an all-encompassing NEPA review. Under the proposed rules, the NEPA review could be limited to the part of the project subject to federal control and responsibility.

Not surprisingly, project proponents support expanded use of categorical exclusions by agencies. CEQ stopped short of creating per se categorical exclusions (a topic CEQ invited comment on). But CEQ clarified that one agency can rely on another agency’s categorical exclusion.

Defenders of NEPA’s existing regulations focus on whether the proposed changes to the definition of ”major federal action” are consistent with statute and worry that encouraging “functional equivalent” documents will circumvent NEPA by allowing agencies to rely on evaluations less robust than NEPA reviews.

It is undeniable that changes to the definition of “major federal action” may limit which projects are subject to NEPA. However, some of the limitations are likely appropriate, such as minimizing reviews of certain projects that have a de minimis federal nexus or minimal federal funding (e.g., a wind project with de minimis impacts to federal minerals). Meanwhile court decisions imposing criteria for which documents can be “functionally equivalent” to satisfy NEPA will still apply.

2.         Curtailing the evaluation of cumulative and indirect effects from the proposed action

CEQ proposes consolidating the definitions of “direct effects,” “indirect effects,” and “cumulative effects” into one definition of “effects,” and clarified that effects must be “reasonably foreseeable” from and have a “reasonably close causal relationship to the proposed action or alternative.”

Defenders of the current regulations (and even some project proponents) criticize these changes to the extent they appear to eliminate consideration of certain “indirect” environmental impacts, such as climate change, from proposed actions.

However, the NEPA statute itself does not mandate that agencies evaluate specific “indirect” or “cumulative effects.” Thus, while it may be true that, under the proposed rules, agencies may no longer evaluate certain tangential and indirect effects of their proposed actions, this revised scope may help focus scarce agency resources on the most significant, reasonably foreseeable environmental impacts.

Many commenters also fear that consolidating indirect and cumulative impacts into a simplified definition of “effects” will eliminate ongoing analyses of “upstream” and “downstream” greenhouse gas (GHG) impacts from proposed actions. But an agency cannot avoid evaluating GHG impacts from a proposed action simply as a result of the proposed rule. Indeed, case law has firmly established that some GHG impacts are a reasonably foreseeable effect of a proposed agency action (e.g., the GHG emissions associated with combustion of coal from a proposed coal mine). Thus, the proposed rule would likely narrow the evaluation of GHG impacts to those that are reasonably foreseeable, not speculative. This approach is consistent with existing law.

3.         Limiting the remedies available when an agency violates NEPA

The proposed rule clarifies that “CEQ regulations create no presumption that violation of NEPA is a basis for injunctive relief or for a finding of irreparable harm,” and adds a new section entitled “Remedies” that seeks to limit overturning NEPA reviews based on minor procedural irregularities. The rule also adds other exhaustion requirements and encourages litigants challenging NEPA reviews to raise alleged NEPA violations “as soon as practicable.”

It is unlikely that CEQ’s proposed changes will substantially alter the currently available remedies for violations of NEPA. Injunctive relief is already difficult to obtain in any federal court action, and it is especially rare in NEPA cases. In any case, even if the proposed rule intends to codify current judicial presumptions, it is the courts, not CEQ, that will determine whether a litigant meets the standards for injunctive relief in a given case. A more troubling proposed change may be the requirement that challengers raise alleged violations “as soon as practicable.” Such a vague judicial review requirement likely invites only more litigation.

Conclusion

Nearly 200,000 individuals and organizations submitted comments on CEQ’s proposed regulations. Not surprisingly, the comments are generally split between project proponents favoring CEQ’s attempt to trim NEPA’s scope and limit its review to the direct effects of projects, and defenders of NEPA arguing that the reforms are either unnecessary or go too far. In the end, many of the proposed regulations seek only to codify existing precedent or are unlikely to change current, judicially created standards.

Carlos Romo

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Carlos Romo is a partner in the Environmental and Natural Resources Practice Group at Lewis Bess Williams & Weese in Denver and a member of the Trends editorial board.