Biden Administration’s Rollback of NEPA Regulations Is Cosmetic

A recent Biden administration rulemaking about reinstating climate change analyses within National Environmental Policy Act (NEPA) reviews is mainly cosmetic, say Beveridge & Diamond attorneys Jamie Auslander, Katrina Krebs, and Jonas Reagan. In practice, NEPA review remains basically the same for now, they say.

A recent Biden administration rulemaking generated media headlines about restoring the vitality of, and reinstating, climate change analyses within National Environmental Policy Act (NEPA) reviews. In practice, those reports are overblown and NEPA review remains basically the same—at least for now.

NEPA ensures that agencies consider and inform the public of the environmental consequences of proposed, discretionary federal agency actions before they are undertaken. Importantly, NEPA guarantees only a process, not an outcome; NEPA alone does not prevent agencies from authorizing activities that have significant environmental impacts.

Nevertheless, NEPA has become a common tool for litigants to stop or at least delay projects they disfavor. And because large infrastructure projects often depend on external financing, substantial NEPA-based delays alone can doom a project and thereby achieve opponents’ objectives.

CEQ Oversees Implementation of NEPA

The White House Council on Environmental Quality (CEQ) is principally responsible for overseeing the government-wide implementation of NEPA. CEQ’s NEPA regulations had remained unchanged since 1978.

The ensuing years produced a multitude of legislation, court decisions, and guidance affecting NEPA. The result was a morass of outdated and diffuse directives.

Accordingly, in 2020, CEQ finalized a comprehensive update of its NEPA regulations. These amendments largely codified existing law and best practices to ensure effective and efficient NEPA reviews, and did not alter the vast body of case law applying NEPA, including incorporation of climate change considerations.

Nevertheless, CEQ’s update was accused of gutting NEPA and spurred numerous court challenges. Immediately upon taking office, the Biden Administration catered to these criticisms and announced its intention to revert to the 1978 regulations and to consider adding further requirements.

Phase 1 Rollback

CEQ proposed a “Phase 1” rollback in October 2021, and finalized it with little change in April 2022. This rulemaking reverts to 1978 regulatory language regarding a NEPA document’s purpose and need statement and alternatives, the definition of “effects,” and individual agency NEPA regulations. This first step should not meaningfully affect NEPA reviews or the regulated community.

First, a federal agency begins a NEPA review by defining a statement of purpose and need, and identifying a reasonable range of alternatives to the proposed action. The 2020 rule codified longstanding practice by adding language directing federal agencies to consider their statutory authority and the goals of the project proponent. Now, to avoid perceived “bias,” CEQ has removed this express directive.

The 2022 rule still recognizes the proponents’ goals as “important” and that a “reasonable” alternative must “meet the purpose and need for the proposed action.” There is no indication or expectation that the claimed increased “flexibility” will yield materially different purpose and need statements or alternatives. For example, a highway proposal still should not need to consider a bike trail as an alternative.

Second, the 2020 rule simplified the regulatory definition of “effects” or “impacts” of the proposed action and alternatives to eliminate separate terms for “direct,” “indirect,” and “cumulative” effects, and to clarify which effects are “reasonably foreseeable.” That change did not exclude cumulative impacts or climate change, which agencies and courts have consistently required in NEPA reviews. In fact, the 2020 rule incorporated such considerations as part of the baseline for the “no action” alternative.

The 2022 rule’s reversion to the prior definitions of “effects” does not materially affect the scope of NEPA reviews or case law, but does reintroduce confusion over the labeling of various effects. Moreover, none of the 2022 changes requires more intensive climate analyses or the use of specific tools such as the social cost of carbon.

Lastly, the 2022 rule removed the regulatory ceiling for individual agency NEPA regulations. Many agencies developed NEPA regulations or guidance years ago. None of these agencies amended its NEPA regulations after the 2020 rule.

Even after the 2022 rule, CEQ maintains oversight over agencies’ implementation of NEPA, and agencies cannot adopt NEPA procedures that conflict with CEQ’s regulations.

The 2022 rule does lay the groundwork for more regulatory uncertainty by licensing agencies to develop NEPA procedures that are more demanding and produce more delays than CEQ’s regulations. Yet there is no indication that agencies today are more incentivized to act on this authority than they were before 2020.

CEQ’s “Phase 2” effort is yet to come, but is expected to “more broadly revisit” the 2020 regulations, and may propose further changes to promote environmental justice, climate change, and other Biden administration “objectives.” Such changes will undoubtedly attract substantial attention and additional litigation.

Reproduced with permission. Published May 27, 2022. Copyright 2022. The Bureau of National Affairs, Inc. 800-372-1033. For further use, please visit http://www.bna.com/copyright-permission-request/