From Procedural Pillar to Policy Battleground: Unraveling the Debate Over NEPA Reform

America’s first major environmental law, known as the National Environmental Policy Act (NEPA or the Act), remained largely unaltered for the first 50 years following its enactment in 1970. But in 2020, a set of amendments introduced by the Trump administration signaled a departure from this status quo. Soon thereafter, the Biden administration responded by unveiling its own plan to amend the Act. The most recently proposed part of this plan has sparked debate over its propriety. Critics of the proposal, which is known as the “Phase 2 Rule,” believe it represents an inappropriate plan to codify a progressive climate agenda, as well as an unlawful attempt to transform NEPA from a procedural statute to one that mandates substantive considerations. Are these claims accurate, and if so, how much of a difference might the proposed changes make?

At its core, NEPA requires all federal agencies to take a “hard look” at the potential environmental impacts of “major Federal actions significantly affecting the quality of the human environment.” See Kleppe v. Sierra Club, 427 U. S. 390, 410 n. 21 (1976). Unlike many other federal environmental laws, however, the substantive mandates of the Act more or less end there. In other words, even if a proposed action will harm the environment, NEPA does not require federal agencies to select a less harmful alternative, nor does it mandate that the relevant agency mitigate the predicted impacts. As noted by the Supreme Court in Balt. Gas & Elec. Co. v. Nat. Res. Def. Council, Inc., 462 U.S. 87, 97 (1983) (citing Strycker’s Bay Neighborhood Council v. Karlen, 444 U.S. 223, 227 (1980)), NEPA does “not require agencies to elevate environmental concerns over other appropriate considerations.” Instead, NEPA has historically been interpreted to ensure that federal agencies make informed decisions, even if those decisions are ultimately unfavorable to the goals of environmental protection and conservation. In that way, the Act has a longstanding history as a purely procedural statute.

NEPA tasks the Council on Environmental Quality (CEQ), an agency within the executive branch, with “overseeing and guiding NEPA implementation,” a responsibility that includes the development of NEPA implementing regulations for federal agencies. The Council first exercised its authority by issuing interim guidelines in 1970, and subsequently promulgated NEPA implementing regulations in 1978. During the decades spanning from 1978 to the end of Donald Trump's first presidential term in 2020, the Act’s implementing regulations remained largely unchanged, aside from two minor amendments made in 1979 and 1986, respectively. Then, on July 16, 2020, pursuant to an executive order issued by President Trump, CEQ revised NEPA’s implementing regulations in a bid to “modernize” the Act and streamline its permitting process (referred to as the “2020 Rule”). In doing so, the Trump administration seemingly opened the floodgates to change, kicking off what could now be described as a game of tricameral tug-of-war, with NEPA at its center.

The administration turned over soon after President Trump’s amendments were finalized, and on October 7, 2021, President Biden entered the NEPA arena. The Biden administration announced that it would be undertaking its own review of NEPA’s implementing regulations, and that it would conduct that review in two phases. Biden’s “Phase 1 Rule,” finalized in April 2022, directly countered many of the changes introduced by Trump’s 2020 Rule. Among other provisions, the Phase 1 Rule restored the requirement for federal agencies to consider the “direct,” “indirect,” and “cumulative” effects of proposed major federal actions; it revised the range of “reasonable alternatives” to be assessed by agencies performing environmental reviews of proposed actions; and it reversed the declaration that CEQ’s NEPA regulations were to serve as a ceiling for agencies creating their own regulations.

While the Phase 1 Rule served primarily to overturn parts of the 2020 Rule, the Biden administration’s Phase 2 Rule offers changes of a different and considerably more contentious nature. The Phase 2 Rule proposal was published for notice and comment on July 31, 2023. Of the numerous public comments submitted in response to the proposal, a number voiced their concern for the proffered changes. One such comment, signed by the attorneys general of 24 states, argues that “CEQ’s revisions improperly transform NEPA from a procedural and informational statute into a substantive statute.” This particular concern has since been echoed by some other members of the legal community. The contention is based in part on the fact that, alongside many other changes, the Phase 2 Rule proposes to replace NEPA’s description of its own purpose as a “procedural statute” with a statement that NEPA “is the basic national charter for the protection of the environment.”

While it was met with uncertainty by some members of the public, however, the change to NEPA’s description of purpose is arguably consonant with the history of the Act. Indeed, the textual shift is not so much a “change” as it is a reversion. The description of NEPA’s purpose as the “basic national charter . . . ” was a part of the Act’s text prior to the issuance of the 2020 Rule, which amended that language to instead provide explicitly that “NEPA is a procedural statute . . . .” Although the 2020 Rule’s alteration of NEPA’s purpose was consistent with, and explicitly drew upon, the Supreme Court’s statements in two separate cases, one could argue that the Court’s words in those cases were merely a description of NEPA’s state at the time of their issuance, and did not place a limit on the Act’s capacity for evolution.

Aside from the change to NEPA’s purpose, critics have also argued that some provisions of the Phase 2 proposal run counter to the Supreme Court’s holding in Balt. Gas & Elec. Co., 462 U.S. 87, because they “require agencies to prioritize environmental concerns over other priorities.” They contend that the proposed rule “requires” such prioritization by “imposing a double standard creating separate requirements for projects that depend on whether a proposed project fits into a favored or disfavored category.” This contention stems from the fact that the proposed rule seeks to change the standard for when an agency must prepare an environmental impact statement (EIS), one of two forms of environmental review documents written in response to a proposed major federal action. In the past, the requirement for an EIS was triggered by an agency’s determination that a proposed action would “significantly affect” the quality of the human environment, regardless of whether the predicted effects were positive or negative. The Phase 2 Rule, however, mandates that only those actions with “significant adverse effects” require the preparation of an EIS. Actions with exclusively beneficial environmental effects are excluded from the same requirement. According to the authors of one comment, this particular change “is the clearest evidence that CEQ is seeking to turn NEPA into a substantive and transformative tool.”

The question of whether the proposed rule truly requires agencies to “prioritize environmental concerns over other priorities,” however, is not so clear. Critics contend that the changes would compel substantive outcomes in contravention of established common law. But it’s important to note that while the proposed changes might incentivize environmentally friendly development, they would not be so drastic as to mandate results beyond that of traditional NEPA standards. In other words, the ultimate discretion regarding the appropriate course of action would still rest with the agency. For example, the Phase 2 Rule requires an agency to consider climate change when determining a proposed project’s potential impacts, and to “address any risk reduction, resiliency, or adaptation measures included in the proposed action and alternatives,” but these are still merely requirements for consideration, not selection. Regardless of what factors an agency is asked to consider, the choice to proceed with a certain project in a certain way remains its own. Despite its altered description of purpose, the Phase 2 Rule’s intent remains true to the spirit of the Act: to ensure that “environmental issues are fully accounted for in agencies’ decision-making processes.”

Lastly, invoking the major questions doctrine, critics contend that “Congress, in enacting NEPA, did not authorize CEQ to create this distinction between favored and unfavored projects.” But while the authority may not be explicit, such distinctions seem to align with the Act’s core purpose. NEPA has historically, and fundamentally, sought to ensure that the federal government employs “all practicable means and measures to foster and promote the general welfare, create and maintain conditions under which people and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations.” While the preference for renewable energy development may appear unfair, it prompts a critical line of questioning: Can we fulfill the Act’s core purpose without offering economic incentives? Are we not already failing in some regards to “create and maintain” the conditions called for by the Act? And without swiftly altering our environmental trajectory, can we even ensure the existence of “future generations”? A bolder NEPA might aid in leading us to a livable future.