“On April 8, the White House Council on Environmental Quality circulated a draft template for federal agencies to use when updating their regulations and procedures implementing the National Environmental Policy Act.”
Why this is important: The National Environmental Policy Act has come under fire for several decades now because it’s often used as a cudgel against development. The NEPA requires federal agencies to assess the environmental effects of their proposed actions prior to making decisions regarding permit applications, deciding federal land management issues, and in construction of highways and publicly-owned facilities. The NEPA is extended to the states in instances in which there is a significant “federal nexus,” or connection to a state project. In practice, that almost always means a NEPA review is required where federal money is involved.
Using the NEPA process, agencies evaluate the environmental and related social and economic effects of their proposed actions. Agencies also provide opportunities for public review and comment on those evaluations. The reviews are cumbersome, expensive, and time consuming. They often take years to complete, both in terms of agency actions and in the litigation that accompanies controversial projects.
The NEPA landscape changed significantly when President Trump took office and stripped the Council on Environmental Quality (CEQ), which has overseen NEPA implementation since the 1970s, of its legal authority to issue rules regarding NEPA. Accordingly, there is currently a void that the Trump administration needs to fill with regard to how NEPA is carried out.
Further complicating matters, President Trump issued Executive Order 14154 on January 29, 2025, which directed the CEQ to provide guidance to expedite permitting approvals. 90 Fed. Reg. 8,353 (Jan. 29, 2025). The CEQ has done so, but the guidance is simply that: guidance without the force or effect of law. Accordingly, federal agencies and their state counterparts have been left to write or revise their own rules and policies for NEPA implementation. The Departments of Energy, the Interior, and Defense have rescinded their former regulations and have issued new guidance that takes the form of “operating procedures.”
The new CEQ template features the following changes:
- Events that require NEPA review now must be both “major” and a “federal action,” and the new definition of “major” allows agencies to set a monetary threshold for requiring review.
- The CEQ guidance revisits “significance” and trimmed the definition of “potentially affected environment” to specifically exclude global and other downstream effects. Further, the “degree of effects” analysis now specifically allows project segmentation. Lastly, the new section bars agencies from requiring or conducting new scientific research. The segmentation and research changes are groundbreaking in the NEPA world and will potentially shorten environmental reviews by years.
- The new guidance requires that potential effects have a “reasonably close causal relationship” to the proposed action, which means, like in the recent unanimous SCOTUS holding in Eagle County, 145 S. Ct. 1497 (May 29, 2025), agencies needn’t consider “upstream” or “downstream” effects at all, especially if those effects are outside the jurisdictional reach of the reviewing agency. In Eagle County, a proposed 88-mile railroad in Utah would connect the Uinta oilfield with the Gulf Coast. The SCOTUS rejected the arguments that the environmental analyses were required to consider the effect on oil reserves or the environmental effect of increased drilling (the upstream effects) or the potential for increased GHG emissions once the oil was refined in Louisiana or abroad (the downstream effects). The CEQ guidance is even narrower, asserting that “effects should generally not be considered if they are remote in time, geographically remote, or the product of a lengthy causal chain.”
What these changes will mean for the regulated community or project proponents remains unclear, however, because all of them will be subject to the same kind of time-consuming litigation that has scarred environmental permitting for 40 years. In the meantime, at least, there may be light at the end of the policy litigation tunnel at last. --- Jason E. Wandling
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