Interior Finalizes Its Minimalist NEPA Framework

On February 24, 2026, the U.S. Department of the Interior (DOI) finalized its July 2025 interim rule dramatically revising how the agency implements the National Environmental Policy Act (NEPA).

As previewed last summer, DOI has rescinded roughly 80 percent of its prior NEPA regulations and moved those provisions into a newly issued NEPA Handbook. The result is a minimalist regulatory framework paired with detailed—but non-binding—departmental guidance.

This overhaul did not occur in a vacuum. It follows and implements substantial NEPA reforms adopted by the Fiscal Responsibility Act of 2023 and President Trump’s January 20, 2025 Executive Order directing repeal of the Council on Environmental Quality’s (CEQ) NEPA regulations. With CEQ’s government-wide rules withdrawn, federal agencies have been left to construct their own implementing frameworks. DOI’s final rule is one of the more consequential responses to that directive, reflecting a broader shift toward regulatory minimalism, agency discretion, and expedited permitting.

This article examines the most significant ways DOI’s new final rule and NEPA Handbook differ from the prior regulatory regime.

A Narrowed Regulatory Core

Before the 2025–2026 overhaul, DOI’s NEPA implementation regulations supplemented CEQ’s government-wide NEPA regulations. DOI’s rules addressed scoping, public participation, categorical exclusions (CEs), extraordinary circumstances, documentation requirements, and analytical standards. Much of that detail was binding regulatory text.

Under the final rule, DOI’s binding regulations are now limited to a narrower set of topics:

• Applicant and contractor preparation of NEPA documents
• Emergency response procedures
• Categorical exclusions
• Cooperating agency coordination with state, tribal, and local governments

The bulk of what previously appeared in regulation now resides in the DOI NEPA Handbook. While the Handbook uses directive language and will guide bureau practice, unlike formally promulgated regulations, it does not carry the force of law. This allows for a more flexible environmental impact review process.

Public Participation: Fewer Mandated Steps

One of the most consequential substantive shifts concerns public review of Environmental Impact Statements (EISs).

For decades, DOI regulations—operating in tandem with CEQ’s NEPA rules—required publication of a draft EIS for public comment, responses to those comments, and issuance of a final EIS before a Record of Decision (ROD). These procedural checkpoints were embedded in binding regulations and reinforced by case law.

Now, under the new framework, the only required public comment period for an EIS is during scoping after publication of its Notice of Intent. Publication of a draft EIS for public comment is no longer required, either. Once scoping is complete, the lead agency can proceed directly to a complete and final EIS. Bureaus still retain discretion to provide additional opportunities for review, such as when faced with particularly controversial projects, but the structured, regulation-driven draft/final sequence is no longer compulsory.

Applicant-prepared EISs

Historically, agencies did not allow project proponents to prepare EISs, although many did allow them to prepare environmental assessments (EAs). The Fiscal Responsibility Act changed this by requiring lead agencies to specify procedures allowing project sponsors to prepare EISs as well as EAs. DOI’s final rule specifies such procedures.

Purpose and Need

In parallel, the Handbook directs that the purpose-and-need statement be informed by the applicant’s goals. Under the prior regime, purpose and need was more strictly framed by agency objectives and statutory authority. The new approach affords project proponents greater influence over how the action is defined—an important lever in shaping the range of alternatives analyzed in an EIS.

Narrowed Effects and Alternatives Analysis

The Handbook reflects DOI’s interpretation of the Supreme Court’s 2025 decision in Seven County Infrastructure Coalition v. Eagle County, which addressed the permissible scope of NEPA effects analysis.

Under the prior regulatory framework, bureaus routinely analyzed direct, indirect, and cumulative effects, including reasonably foreseeable downstream or third-party consequences. Cumulative effects analysis in particular became a frequent focal point of litigation in large infrastructure cases, with agencies expected to evaluate broader regional and market-driven impacts.

Relying on the Fiscal Responsibility Act’s NEPA amendments, the Seven County decision, and related prior caselaw, the final rule’s preamble asserts that distinctions between direct, indirect and cumulative effects are “artificial” because they do not exist in the statute itself.

The DOI NEPA Handbook accordingly reframes the scope of required analysis to focus on reasonably foreseeable environmental effects that bear a close causal relationship to the proposed federal action.

Under this framework, effects from separate projects distinct in time or geography, actions outside a bureau’s regulatory authority, or independently undertaken third-party activities do not have to be analyzed, but can be if the bureau explains where it drew a “reasonable and manageable line” demarking the limits such effects. The practical result is a narrower effects inquiry with a reduced obligation to analyze attenuated cumulative impacts in conjunction with other, separate projects.

Categorical Exclusions and Extraordinary Circumstances

The final rule retains CEs in regulation but introduces notable substantive changes.

Most significantly, several “extraordinary circumstances” that previously precluded use of a CE have been removed from regulatory text. Under the 2024 framework, actions with highly controversial environmental effects, potential violations of environmental protection laws, or disproportionately high and adverse effects on low-income or minority populations were expressly identified as extraordinary circumstances. The new regulations omit those categories.

In addition, while the practice of relying on more than one CE to cover an action is not new, the rule’s express endorsement of combining or “patchworking” multiple CEs to cover discrete components of a larger action is novel in tone and emphasis. For smaller or clearly segmented activities, this approach may offer efficiency gains. But, for large or controversial projects, assembling a series of CEs to cover separate elements of an integrated development could invite segmentation challenges. Courts have historically scrutinized efforts to segment a single federal action into component parts to avoid preparation of an EA or EIS. As a result, aggressive reliance on multiple CEs for a unified project may carry elevated litigation risk.

Statutory Page and Time Limits

The NEPA Handbook incorporates the Fiscal Responsibility Act’s statutory deadlines and page limits: one year for completion of an EA of up to 75 pages and two years for an EIS of up to 150 pages or up to 300 pages for actions of extraordinary complexity.

Emergency and Alternative Arrangements

The retained emergency regulation is substantively similar to prior practice, allowing modified procedures in genuine emergencies.

More consequential is DOI’s separate policy concerning alternative NEPA arrangements for oil, natural gas, coal, uranium, and critical mineral projects under the President’s national energy emergency declaration. That policy permits extremely compressed timelines—such as 14-days for EA/FONSIs and 28-days for EISs without comment periods.

Implications

By stripping most procedural requirements out of regulation, narrowing the scope of effects analysis, limiting public participation, expanding applicant involvement in document preparation, and promoting broader use of CEs, DOI has adopted a leaner and more discretionary NEPA framework that adheres much closer to the statute than the CEQ regulations once did. The changes implement a minimalist reading of NEPA that should help streamline review and reduce delay.

While the DOI NEPA rule may well face legal challenges over matters of statutory interpretation and administrative procedure, DOI will have opportunities to remedy any such imperfections. Whether the new framework proves to be durable is instead more likely to depend, like so much else, on the politics of the next administration.

Bell Kearns specializes in advising on the review and entitlement of large-scale projects on federal lands. If you have questions regarding this article or its implications for your project, please contact us at +1.415.230.0599 or info@bell-kearns.com.