Over the past eight months, the legal framework governing environmental review under the National Environmental Policy Act (NEPA) has undergone significant upheaval—with additional changes still on the way. Here’s what’s happened so far and what’s still on the horizon.
The Courts and the Administration Redefine the Boundaries of NEPA Review
As summarized in our May 31, 2023, Client Alert, the Fiscal Responsibility Act of 2023 amended NEPA to provide more specificity regarding numerous elements of environmental review. Since then, and particularly in the past eight months, both the courts and the Trump administration have redefined the NEPA landscape.
First, two key court decisions eliminated the CEQ regulations that have long guided NEPA review. In Marin Audubon Society v. Federal Aviation Administration, the D.C. Circuit Court of Appeals held that the CEQ lacks the authority to issue binding regulations implementing NEPA. Then, on Feb. 3, 2025, the U.S. District Court for the District of North Dakota in Iowa v. Council on Environmental Quality found that the CEQ exceeded its statutory authority in issuing its NEPA regulations, concluding: “[t]he truth is that for the past forty years all three branches of government operated under the erroneous assumption that CEQ had authority. But now everyone knows the state of the emperor’s clothing and it is something we cannot unsee.” Thus, the court vacated the 2024 regulations (an appeal has been filed in the case).
Concurrently, President Trump’s Executive Order 14154 directed CEQ to eliminate its NEPA regulations after rescinding President Carter’s Executive Order 11991 (1977), which had directed CEQ to promulgate NEPA regulations to apply to federal agencies. Consistent with the court rulings and EO, the CEQ issued an interim final rule (the “Interim Rule”) removing all CEQ-issued NEPA regulations from 40 C.F.R. Parts 1500–1508. In the Interim Rule, CEQ stated that, following the revocation of the Carter-era EO 11991 and the two federal court decisions, it lacked statutory authority to issue binding NEPA regulations. The Interim Rule took effect on April 11, 2025. CEQ also issued guidance on Feb. 19, 2025, requiring agencies to revise their NEPA procedures to align with the Fiscal Responsibility Act of 2023 and Executive Order 14154.
Then, on May 29, 2025, the Supreme Court issued its decision in Seven County Infrastructure Coalition v. Eagle County in which the Court admonished lower courts to provide significant deference to agency NEPA analyses and not “micromanage” agency choices. It also emphasized that NEPA is a procedural statute, not a mandate to block projects. According to the Court, “[a] 1970 legislative acorn has grown over the years into a judicial oak that has hindered infrastructure development ‘under the guise’ of just a little more process”—a situation that the decision in Seven County aims to prevent.
The One Big Beautiful Bill Brings More NEPA Changes
Perhaps feeling left out, the third branch of government also decided to weigh in. During federal budget reconciliation debates earlier this year, NEPA reform again surfaced in the House reconciliation bill. The One Big Beautiful Bill Act, Public Law No: 119-21, was signed by President Trump on July 4, 2025, and adds Section 112 to NEPA. This section allows a project sponsor to elect to pay 125% of the costs of developing an environmental document; in return, the action agency must expedite the environmental review timeline and prepare an environmental impact statement (“EIS”) in one year and an environmental assessment (“EA”) in 180 days.
Agency Response: Department of the Interior as a Case Study
At the beginning of July, the Department of the Interior (“DOI”) was one of many agencies that issued updated NEPA regulations and guidance, rescinding a portion of its NEPA regulations and shifting the majority of the rest into a DOI Handbook of NEPA Implementing Procedures. According to the DOI Interim Final Rule, this significant shift towards internal guidance is based on NEPA’s statutory language at 42 U.S.C. Section 4332(c)(B) that requires agencies “to identify and develop methods and procedures” as opposed to adopt formal regulations, and further is preferable because it will enable the agency to rapidly update changes in NEPA processes in response to future court decisions or Executive Orders.
A few key highlights of the changes at DOI:
- The new NEPA rules reduce the requirements for public comment. Whereas public comment was previously required for draft EISs, the handbook now only requires public comment on the publication of a notice of intent to prepare an EIS, in accordance with the statutory requirement at 42 U.S.C. Section 4336a(c). On the EIS itself, the guidance directs that subcomponents should request comments from other governmental entities, but seeking comments from the public is optional.
- The regulations revise and supplement provisions specifying the procedures that apply when DOI bureaus hire contractors to prepare NEPA documents or rely on applicants to prepare information including EAs or EISs for consistency with the Fiscal Responsibility Act and to ensure an efficient and defensible agency role.
- Retained in regulation is the DOI’s list of categorical exclusions, although bureau- and agency-specific categorical exclusions will be contained in the guidance documents. The regulations have been revised to include new information explaining how DOI may rely on categorical exclusions from other agencies as well as how DOI may apply multiple categorical exclusions to a single action. (Of interest, at least the Ninth Circuitfound that applying multiple categorical exclusions to a single project violated NEPA regulations, which leaves some uncertainty as to the application of this regulatory change.)
Interior is also implementing emergency permitting procedures for some types of energy projects intended to accelerate development of domestic energy resources and critical minerals in accordance with the Trump administration’s priorities. These procedures, where they apply, reduce the time it takes for NEPA review, including an EIS, to just 28 days or less. The emergency procedures are described in an Interior press release.
More Changes Ahead
Other recent agency actions revising NEPA implementing regulations include:
- The Department of Defense issued a public notice to rescind its NEPA implementing regulations and issued a NEPA implementing procedures guidance document. The Department of the Air Force separately issued an interim final rule also rescinding its NEPA regulations meant to supplement CEQ’s regulations and noting it would be promulgating NEPA procedure guidance.
While each agency is taking a slightly different approach to its NEPA regulatory overhaul, there are certain common themes. Almost all the agencies’ explanations of their new NEPA approach place a strong emphasis on the Supreme Court’s decision in Seven County Infrastructure Coalition that NEPA is a purely procedural statute. Additionally, there was a significant effort to streamline processes to align with the guidance provided by the Trump administration. An important example of this streamlining is language included in most of the agencies’ regulatory guidance stating that an agency “may, but is not required to by NEPA, analyze environmental effects from other projects separate in time, or separate in place” in order to assist in “reasoned decision-making regarding the proposed action” and that in doing so the agency must document how “it drew a reasonable and manageable line” relating to its consideration of any environmental effects. Language along these lines is found, for example, in the DOI handbook as well as the proposed Department of Agriculture, Department of Energy, and Army Corps procedures. This language helps agencies to implement the limitations on the scope of NEPA analysis described by the Supreme Court and, if implemented consistently, will help agencies focus their NEPA analyses on the project under consideration.
Here are the deadlines to comment on the rules:
Implications for Navigating the Changing NEPA Landscape
The recent court decisions have reshaped the NEPA landscape by clarifying and narrowing CEQ’s role. With CEQ’s NEPA regulations rescinded, agencies are now implementing changes to their own regulations and internal procedures, with the substance of those changes still in flux in the sense that they are taking public comments on their regulatory text and some agencies are putting more of their NEPA process requirements into easily revised guidance documents. What can be said definitively is the NEPA developments out of all three branches of government point in the direction of significantly reducing project approval timeframes and narrowing the scope of judicial review.
However, many questions remain unanswered, including how agencies will implement the One Big Beautiful Bill Act’s “pay to streamline” provisions and how variability in agency NEPA regulations will play out, particularly in the context of projects involving multiple agencies. And, of course, as agencies finalize and adopt these new NEPA regulations, it seems almost certain that litigation will ensue.
