Navigating NEPA’s Shifting Regulations

This article briefly summarizes the Trump administration’s July 2020 National Environmental Policy Act (NEPA) rule, describes its uncertain status under pending administrative and judicial review, and charts a compliance path through the presently uncertain regulatory landscape for agencies and industries.

In July 2020, the Council on Environmental Quality (CEQ) under President Donald Trump promulgated a comprehensive overhaul of the NEPA implementing regulations designed to narrow the scope and duration of environmental impact review required by the statute. A plethora of states and public interest groups challenged the new regulations in federal court shortly thereafter. Although one court recently dismissed plaintiffs’ challenge as unripe and lacking standing, litigation continues in other venues. In addition, the Biden administration’s CEQ has commenced a “comprehensive reconsideration” of the rule and, in June 2021, announced plans to propose “a narrow set of changes to the 2020 NEPA regulations” as a first step in that process. One or both of these efforts will very likely change or strike down the rule in the months to come. How should federal agencies and project developers approach ongoing NEPA review in light of such regulatory uncertainty?

2020 NEPA Rule

Bell Kearns reported on the Trump CEQ’s NEPA overhaul when it was first proposed in January 2020. Please refer to that article for a step-by-step guide through the major regulatory changes, all of which made it into the final rule published in July 2020. The highlights are as follows:

• Mandatory page limits for Environmental Impact Statements (EISs) and Environmental Assessments (EAs) (150 pages and 75 pages,
  respectively, excepting unusually complex cases)
• Time limits for preparing EISs and EAs (two years and one year, respectively)
• Narrower definition of “effects” that requires a “reasonably close causal relationship to the proposed action” in order to warrant consideration under NEPA
• Removal of cumulative effects analysis altogether
• Narrower scope of alternatives review
• Greater applicant role in the NEPA process
• Narrower scope of cooperating agency involvement
• Fewer judicial remedies available against NEPA violations
• Broader use of categorical exclusions

The rule also directs federal agencies to promulgate their own, agency-specific procedures implementing the new NEPA regulations by September 2021.

Overall, these changes serve to speed up the environmental review process under NEPA and narrow the minimum scope of EAs and EISs. Some industry groups lauded the effort to stymie ballooning costs of doing business under NEPA, but critics accused the Trump administration of gutting the statute, and a group of public interest organizations quickly challenged the regulatory overhaul in federal court.

Current Status of the NEPA Rule

For better or for worse, the rule is well past the 60-day time limit for reversing a previous administration’s regulation under the Congressional Review Act. The rule remains on the books for now. Whether it will remain in effect for long is up to the courts and the Biden administration.

The CEQ under President Trump initially defended the NEPA overhaul in the flurry of litigation that ensued. However, in March 2021, the CEQ under the new Biden administration reversed course and filed a motion to remand the rule to the agency for “comprehensive reconsideration” in Wild Virginia v. CEQ, a case before Judge James Jones of the U.S. District Court for the Western District of Virginia. The CEQ asked that the rule remain in effect pending the agency’s review. The CEQ also asked for stays in several other ongoing cases challenging the 2020 rule on similar grounds, some of which have been granted and others of which are still pending. On 21 June 2021, the court in Wild Virginia issued its ruling: instead of remanding to CEQ as the agency had requested, the court dismissed the Plaintiffs’ challenge on justiciability grounds. In doing so, the court emphasized the additional agency actions that would need to take place (such as an agency applying the 2020 rule when conducting NEPA review for a specific project) before the plaintiffs would suffer actual harm rendering the controversy sufficiently concrete for the court’s review.

Even assuming it survives appeal, the Wild Virginia decision does not spell the end of litigation surrounding the 2020 regulations. There is of course the possibility that one or more other courts currently entertaining challenges to the 2020 rule will remand to CEQ, with or without vacating the rule. More troubling for developers, the Wild Virginia decision notes that if plaintiffs were to mount an as-applied challenge to the regulations in the context of an agency action on a specific project—for example preparing or declining to prepare an environmental impact statement—plaintiffs would likely clear the jurisdictional hurdles that tripped them up in that case.  The Wild Virginia decision, in other words, simply kicks the can, providing little in the way of certainty for developers and agencies navigating the NEPA process.

If the other federal courts currently entertaining challenges to the 2020 rule follow Wild Virginia’s lead or accept CEQ’s invitation to remand without vacating the 2020 rule, it will fall to CEQ to rescind or modify the 2020 rule on its own initiative. In that scenario, the CEQ would need to initiate notice-and-comment rulemaking procedures, which plaintiffs claim could take up to three years to complete while the Trump rule would remain in effect. Adding to the complexity is the possibility that individual judicial decrees may not apply nationwide, which could result in piecemeal application of the new rules across domestic jurisdictions.

Navigating Uncertainty

What is clear is that the 2020 NEPA rule is likely not long for this world, at least not in its current form. Regardless of whether the CEQ rescinds Trump’s NEPA overhaul via notice-and-comment rulemaking or a court vacates it nationally or locally by decree, federal agencies and project developers need to plan in the midst of regulatory uncertainty. The Wild Virginia decision underscores the importance of sound strategy here, as it explicitly invites plaintiffs to challenge the 2020 rule when agencies apply it to specific development projects. How can agencies structure NEPA reviews to reduce compliance risk in a shifting landscape?

The 2020 rule itself provides that the new regulations shall apply to “any NEPA process begun after September 14, 2020,” and further gives agencies discretion to apply the new regulations to ongoing processes begun before that date. This provision offers welcome flexibility to agencies that are currently preparing EAs and EISs by allowing them to observe the preexisting rules up to a certain cutoff point.

But, if the 2020 rule is repealed or replaced in whole or in part, what standard would apply to ongoing NEPA review? It depends on how the regulations are revised. If CEQ replaces the 2020 rule with yet another set of regulations, the agency may (or may not) include a “grandfather” provision allowing ongoing NEPA processes to observe the 2020 rule up to a certain point. On the other hand, if a court strikes down the regulations, projects relying on the 2020 regulations will suddenly be at risk – at minimum they are likely to face delay as agencies scramble to retrofit in-progress EAs and EISs to satisfy the preexisting 1978 NEPA regulations.

In times of regulatory uncertainty, it is prudent to hope for the best and plan for the worst. In this case, agencies and industry should plan for a reversion to the preexisting NEPA regulations while litigation continues and the CEQ revisits the Trump rule. That means preparing NEPA documents that comply with the 2020 rule and the 1978 regulations to the extent possible. Fortunately, the old regulations provide for higher standards and broader review than the 2020 rule, so for the most part it should be possible to comply with both.

For example, the existing regulations under the Trump rule provide that EAs and EISs need not consider cumulative impacts. However, the regulations do not prohibit consideration of cumulative impacts, and including such analysis in EISs would help ensure that the documents stand up if the 2020 Trump rule were vacated completely. The same goes for considering a broader range of environmental effects and project alternatives than is strictly required under the new rule. This kind of proactive approach may discourage the type of project-specific litigation Wild Virginia encourages.

On the other hand, some provisions of the Trump NEPA rule are mandatory and should continue to be strictly observed. For example, the current rule requires that agencies prepare EISs within two years and the end result must not exceed 150 pages absent extraordinary circumstances. Agencies will need to stay within these parameters as long as the time and length provisions are on the books.

Of course, circumstances can vary widely by project, and navigating the NEPA regulations in light of regulatory uncertainty is a difficult task. If you have any questions regarding how to navigate the NEPA landscape for your project, please feel free to contact us at +1.415.230.0599 or info@bell-kearns.com.

The information in this article is provided for informational purposes only. You should not rely on any information from this article without first obtaining the advice of an attorney who is qualified in the area of NEPA law and fully informed of the facts of your situation.