Over the past half century, the Council on Environmental Quality (CEQ) within the Executive Office of the President (EOP) has been a steady hand in guiding federal agency implementation of the National Environmental Policy Act (NEPA). NEPA is the cornerstone for the suite of foundational U.S. environmental laws adopted over the last 50 years. Congress designed NEPA to ensure that executive agency decision-makers consider potential environmental, social, and economic effects of major federal actions ranging from infrastructure construction to managing federal public lands. This article explores the remarkably stable first 40 years of NEPA’s implementing regulations and considers how CEQ’s recent revisions could deliver significant changes and modernization of the Act after a series of back-and-forth rulemakings under the Trump and Biden administrations.
Our foundational environmental laws in the United States have dramatically improved, or at least helped prevent degradation of, the natural world’s health and quality. While laws like the Clean Air Act and Clean Water Act have a specific focus, at its most fundamental level NEPA is about making better, more informed, and transparent decisions. NEPA often has been discussed as a procedural and not a substantive statute, in that NEPA does not require the federal government to reach specific outcomes, but rather serves to ensure that, where required, decision-makers compile Environmental Assessments (EAs) or more comprehensive Environmental Impact Statements (EISs) to consider the impacts of a project, evaluate possible alternatives, and involve the public before approving it. In short, it requires federal agencies to look before they leap.
But before leaping to addressing whether this long-standing view of NEPA as a procedural statute may be changing, let’s take a step back to consider the context of the most recent changes to the regulations implementing this foundational law.
CEQ–which owes its very existence as a formal entity within the EOP to NEPA (42 U.S.C § 4342)–first issued guidelines for the implementation of EISs in 1971 with amendments in 1973. See Statements on Proposed Federal Actions Affecting the Environment, 36 Fed. Reg. 7724 (Apr. 23, 1971); Preparation of Environmental Impact Statements, 38 Fed. Reg. 20,550 (Aug. 1, 1973). Those guidelines were further developed in the late 1970s under President Carter, who, through Executive Order, directed the issuance of regulations concerning federal agencies’ NEPA implementation. See Exec. Order 11991, Environmental Impact Statements, 3 C.F.R. § 123 (1977). CEQs’ initial efforts establishing guidance and ultimately regulations for implementation of NEPA remained largely unchanged–notwithstanding amendment in 1986 to remove requirement of a “worst case” analysis in NEPA documents, National Environmental Policy Act Regulations, 51 Fed. Reg. 15,618 (Apr. 26, 1986)–providing a consistent regulatory framework for agencies and the courts to sort through and construe over time.
This period of relative calm in the regulatory space for NEPA came to an end when President Trump issued Executive Order 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects, that charged CEQ with leading an interagency working group to propose changes to NEPA’s implementing regulations. Exec. Order 13807, 82 Fed. Reg. 40,463 (Aug. 15, 2017). CEQ kicked off the regulatory process with an advance notice of proposed rulemaking in June 2018 before proposing the rule in January 2020 and finalizing the rule in July 2020. See CEQ, Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act, 85 Fed. Reg. 43,304 (July 16, 2020).
While stakeholders’ views on the 2020 final rule are sure to vary, many environmental and conservation groups expressed deep concern throughout the rulemaking process and ultimately opposed the final rule, in short, on the basis that it limited the scope of impacts federal agencies must consider and otherwise advanced changes seemingly more focused on making faster decisions without maintaining or enhancing federal decision quality. Subsequent legal challenges to the rule have been stayed or dismissed.
Following President Biden’s election, CEQ once again turned to considering significant NEPA regulatory revisions. One of President Biden’s first Executive Orders revoked Executive Order 13807 and directed federal agencies to, inter alia, review regulations issued under the Trump administration for consistency with new policy to revoke those previously adopted policies that frustrate the ability of the federal government to confront the challenges of racial justice and climate change. See Exec. Order 13990, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, 86 Fed. Reg. 7049 (Jan. 20, 2021). Following the review called for in Executive Order 13990, CEQ landed on a two-phase approach to tackling the task of amending the NEPA regulations to “provide for sound and efficient environmental review of Federal actions, including those actions integral to tackling the climate crisis, in a manner that enables meaningful public participation, provides for an expeditious process, discloses climate change-related effects, advances environmental justice, respects Tribal sovereignty, protects our Nation’s resources, and promotes better and more equitable environmental and community outcomes.” National Environment Policy Act Implementing Regulations Revisions Phase 2, 89 Fed. Reg. 35,442, 35,447 (May 1, 2024).
In Phase 1, CEQ took on three discrete changes identified as priorities for restoring critical elements of the 1978 regulations. First, CEQ removed the requirement from the 2020 regulations that an agency must structure the “purpose and need” for a project around the goals of a project proponent and the agency’s statutory authority, making clear that an agency can consider a variety of factors in their assessment of a project beyond a proponent’s goals or the reviewing agencies immediate purview. Second, CEQ removed the so-called ceiling provision of the 2020 regulations that limited the ability of NEPA implementing agencies to adopt their own regulations that may go beyond CEQ’s regulatory requirements. Finally, CEQ reversed the 2020 rules narrowing the range of effects for federal agencies to examine through the NEPA process, returning to the longstanding approach of requiring consideration of direct, indirect, and cumulative effects consistent with definitions established in the 1978 regulations. CEQ finalized the Phase 1 rulemaking in April 2022. National Environmental Policy Act Implementing Regulations Revisions, 87 Fed. Reg. 23,453 (Apr. 20, 2022).
Moving to the more comprehensive revision effort envisioned for Phase 2, CEQ published a notice of proposed rulemaking in July 2023 before finalizing the current rule in May 2024. See National Environmental Policy Act Implementing Regulations Revisions Phase 2, 89 Fed. Reg. 35,442 (May 1, 2024). The rule became effective on July 1, 2024. This final rule, dubbed the Bipartisan Permitting Reform Implementation Rule, once again made significant changes to CEQ’s regulations guiding the implementation of NEPA, including those directed in the Fiscal Responsibility Act (FRA) of 2023, Pub. L. No. 118-5, 137 Stat. 10. The permitting provisions of the FRA largely codified the One Federal Decision Framework, which flowed from Executive Order 13807, 82 Fed. Reg. 40,463 (Aug. 15, 2017), initially adopted under the Trump administration. In relevant part, the FRA designated a lead federal agency in charge of establishing a timeline for environmental reviews and coordinating among participating agencies; established timelines for completion of EAs and EISs along with setting page limit targets of 75 pages for EAs and 150 pages for EISs; clarified that agencies should consider “reasonably foreseeable environmental impacts of the proposed agency action” and likewise a range of alternatives that are reasonable and feasible; and finally directed CEQ to study how “e-NEPA” and the use of online communications and data sharing could advance project planning and public involvement and transparency in decision making. See Pub. L. No. 118-123 (Nov. 17, 2023).
Undoubtedly, views and opinions of the final rule are varied; however, many conservation and environmental organizations see much to be excited about as CEQ sought to improve implementation of NEPA across the federal government while simultaneously enhancing environmental outcomes. These two goals are compatible and need not be in tension. The final Phase 2 rule reinforces the core NEPA principles of science-based decision-making, transparency, and the importance of public engagement while modernizing the bedrock environmental law.
Components of the rule adopted through the FRA should improve efficiency, transparency, use of high-quality information, and environmental outcomes of the NEPA process. Importantly the rule delivers direction on consideration of environmental justice and climate change impacts in NEPA analysis, adopting for the first time a regulatory definition of “environmental justice” in Section 1508.1(m), providing that “[e]nvironmental justice means the just treatment and meaningful involvement of all people, regardless of race, color, national origin, Tribal affiliation, or disability, in agency decision making. …” Continuing, phase 2 regulations lay out the goals for these considerations as ensuring that people are protected from disproportionate impacts and provided equitable access to a clean and healthy environment in which to live. 40 C.F.R. § 1508.1(m)(1–2). Seeking to advance community engagement in the NEPA process, the final rule also requires agencies to consider the communities in which projects are taking place and design tailored engagement strategies that would fall under the purview of the Chief Public Engagement Officer, which agencies must now identify. Id. § 1507.2(a).
Of particular interest to organizations seeking to advance projects to deliver environmental restoration and clean energy projects, CEQ clarifies that “[e]ffects may be beneficial or adverse,” but “only actions with significant adverse effects require an [EIS],” 89 Fed. Reg. at 35,465, providing a potential faster permitting pathway for those projects with only significant beneficial effects. However, CEQ is also clear that this consideration of adverse and beneficial effects is not a consideration of those effects in net. Thus, if a project has a significant adverse effect, that effect cannot be canceled out by other significant beneficial effects. The long-standing approach of allowing for mitigation (that is, the sequential avoidance, minimization, and compensation for impacts to important resources) of adverse effects below the level of significant is still a tool available to agencies to avoid an EIS through a mitigated finding of no significant impact. In fact, the final rule takes an important step to make enforceable mitigation measures included in a Record of Decision or Finding of No Significant Impact on the basis that if an agency’s decision to move forward on a project relies in part on completion of mitigation actions outlined in the decision document, then those mitigation measures should be monitored and enforceable. Id. at 35,519.
The new rule will have significant implications for how federal agencies evaluate and permit projects such as clean energy generation, transmission lines, habitat restoration, and wildfire mitigation. It remains to be seen how federal agencies and NEPA practitioners will apply these elements in practice. In the next critical phase, individual federal agencies must modify their own NEPA implementing regulations to comport with CEQ’s 2024 rule. The fate of those processes and whether CEQ will have a chance to see full Phase 2 rule implementation come to fruition rests on the outcome of the November 2024 federal election.
On balance, CEQ’s Phase 2 NEPA regulations appear poised to deliver a positive impact in reducing environmental review timelines while delivering improved analysis, robust community engagement, and ultimately better environmental outcomes.
