On January 10, 2020, the Council on Environmental Quality (CEQ) published the long-awaited proposed rule to amend its regulations implementing the National Environmental Policy Act of 1969 (NEPA).  The statute, sometimes pejoratively referred to as a “paper-tiger,” requires a federal agency to take a hard look at the environmental impacts of certain proposed projects, but does not mandate any particular outcome.

The CEQ promulgates NEPA regulations and coordinates the other Executive branch agencies’ implementation of NEPA.  The CEQ originally adopted NEPA implementing regulations in 1978 and while it has issued over 30 guidance documents since, the rules have not been materially amended until last week.  The proposed rulemaking contains numerous revisions, reshuffles existing provisions and adds many new provisions, all aimed at speeding up infrastructure projects by reducing delays and paperwork during NEPA reviews.  For example, the proposal establishes a 75-page limit for environmental assessments (EAs) and a 150-page limit or, for proposals of unusual scope and complexity, a 300-page limit for environmental impact statements (EISs), and 1-year and 2-year time limits for review to complete these respective documents.  Today, an EIS can take up to 4.5 years to complete and averages 600 pages.

Among other significant changes, the proposal would modify how agencies review environmental impacts of their proposed actions.  The proposal dramatically revises the definition of “effects,” which traditionally has included a review and discussion of “direct, indirect, and cumulative effects,” by reducing it to one short paragraph and eliminating references to these three categories.  Per the proposed language, the effects should be “reasonably foreseeable” – an ordinary person’s standard – and have a reasonably close causal relationship to the proposed action or alternatives.  The agencies will not be required to consider effects that they have no authority to prevent, including those resulting from projects outside their jurisdictions.

The proposed “reasonably foreseeable” revision to NEPA is also particularly important for the proponents of pipeline projects, many of which have come under scrutiny for their upstream and downstream impacts from greenhouse gases (GHGs).  The proposal requests comments on whether it should codify elements of its Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions (84 FR 30097 (June 26, 2019)), which allows the use of GHG emissions from a project as a proxy for the direct and indirect effects of those emissions on the affected environment.  The effect of those emissions on environment under the draft guidance is based on a close causal relationship between the emission and the effect.  Recognizing the complexity of the issue, the proposal seeks comments on whether and how agencies should address GHGs in NEPA reviews.  Extensive comments on this issue are anticipated.

Of equal importance is CEQ’s incorporation of existing guidance that requires agencies to provide a detailed analysis of the reasonable alternatives to the proposed action, not “all” alternatives.  Reasonable alternatives, according to the revised definition, must be technically and economically feasible and meet the purpose and need of the proposed action.  Further, under the proposed rule, agencies need not analyze alternatives outside the jurisdiction of the lead agency.  The proposal requires the agency to solicit public comment on the completeness of the submitted alternatives, information, and analyses section of the draft EIS.  A new corresponding section in the draft and final EIS and record of decision (ROD) would provide a summary of the submitted information and alternatives, and the ROD would require the agency’s certification to serve as a “conclusive presumption” that it has considered submitted alternatives.

The proposed rule includes many changes in other important categories, which are summarized below.

NEPA Review & Documentation

  • No requirement to publish a draft EA for public review.
  • Clarifies that the lead agency is responsible for determining the purpose and need and alternatives in consultation with any cooperating agencies, as well as the schedule for environmental review, and resolution of disputes and other issues that may cause delays in the schedule.
  • Directs the lead and cooperating agencies to prepare a single EIS or EA and issue a joint ROD or FONSI when practicable.
  • Allows agencies to continue to use a categorical exclusion (CE) for projects where extraordinary circumstances would otherwise not allow the use of CE, as long as mitigating circumstances exist that would allow the proposed project to avoid the significant effects that create the extraordinary circumstances.
  • Allows an agency to adopt another agency’s EA in its FONSI and a different agency’s determination that a CE applies.
  • Provides that other documents or analyses under other environmental statutes, for example, the regulatory impact analysis, may serve as EIS’s functional equivalents and be sufficient to comply with NEPA. Although some judicial decisions have permitted using analyses under other environmental statutes (e.g., RCRA, CERCLA, etc.) to satisfy NEPA requirements, CEQ proposes to grant agencies discretion to extend this overlap to environmental analyses developed under other statutes.
  • Gives agencies greater flexibility to allow applicants and contractors to contribute information and materials to aid in the preparation of environmental documents, subject to agency evaluation.
  • Provides federal agencies with greater flexibility to “tier” their environmental documents or “incorporate by reference” other existing environmental studies and analyses.
  • Revises the definition of a “major federal” action to exclude non-federal projects with minimal federal funding/involvement.
  • Allows the scoping process to start before the agency publishes a Notice of Intent (NOI) alerting interested and affected parties to a project proposal. The increased flexibility afforded to agencies in issuing NOI will presumably provide agencies more flexibility in meeting the 1-year and 2-year timing requirements for EAs and EISs since these timelines begin at the NOI issuance.
  • Clarifies that supplementation of NEPA documents is only needed if there is a major federal action that remains outstanding and there are substantial changes to the proposed action or significant new circumstances or information become apparent. This is meant to clarify that there is a finality to agency review, and there is no “ongoing” major federal action that requires continuous supplementation.

Judicial Review

  • Revises the timing of judicial review from the filing of an EIS or FONSI to the issuance of a signed ROD or taking of another final agency action (the agency may designate the issuance of the EIS, EA, FONSI, or CE as its final agency action).
  • Adds a new § 1500.3(d), “Remedies,” which explicitly states that harm from the failure to comply with NEPA can be remedied by compliance with NEPA’s procedural requirements, and that CEQ’s regulations do not create an independent cause of action for violation of NEPA.

Public Participation

  • Requires that all comments be made as specific as possible. Although this language is not new, the proposed rule would require commenters to explain why the issue they raise is significant, reference specific pages of the draft EIS, and propose “specific changes.”
  • Requires that agencies consider only timely submitted comments (within 30 days). Untimely comments are considered “exhausted and forfeited,” making it harder to challenge issues not commented upon in a later proceeding.
  • Relaxes the agency’s response to comments requirement by relieving the agency from the need to provide a detailed response explaining why comments do not warrant a response.

Other provisions generally favorable to project proponents include allowing agencies to authorize land acquisitions while NEPA review is ongoing, and a provision that would allow agencies to retroactively apply the regulations to ongoing reviews.

If the rule is finalized, other agencies would have 12 months to align their regulations to conform with the rule.  But for a proposal as comprehensive as this, legal challenges are very likely.  If finalized, the proposal may result in less agency paperwork and faster NEPA reviews, which should achieve the goal of the revisions.  The proposal, however, does not free federal agencies from their core NEPA duties: to take a hard look at environmental impacts.  As this review often hinges on a reasoned consideration of the potential impacts of a proposed project and proper documentation of the analysis, agency staff may be reluctant to simplify the reviews in favor of speeding up projects.  And with the upcoming election season, it is possible that a final rule may fall within the scrutiny of the Congressional Review Act (which may allow the Congress to override the regulation if not finalized by May 20, 2020) or that the lay of the NEPA landscape may shift again in favor of broader reviews.

Comments on the proposed rule should be submitted on or before March 10, 2020.  Additionally, CEQ will hold public hearings on the proposal on February 11, 2020 in Denver, CO and February 25, 2020 in Washington, DC.