Future Uncertain for New NEPA Regulations
Finalized rules are significant, but may not go into effect

by Julia Cardi

On July 15, the Trump administration announced it finalized an overhaul of regulations under the National Environmental Policy Review Act, a law that has long established standards for government agencies for reviewing the environmental impact of federally approved infrastructure projects. The regulations are set to go into effect in mid-September.

The administration has criticized the years-long review and approval process for projects, and one piece of the new regulations requires approval from a “senior agency official” to review page and time limits. The regulations also do away with the existing requirement for the government to consider the cumulative impact of proposed projects. And they narrow the definition of a “major federal action,” which prompts NEPA’s applicability. It now excludes projects with “minimal” federal funding or involvement — which the regulations say the federal government can’t control the outcome of carrying the possibility that fewer projects will be subject to complying with NEPA at all.

Michael Hazel, counsel at WilmerHale, said analysis of the new regulations’ significance comes with a few important caveats: Legal challenges could block the regulations from going into effect. And a shift in party control in Congress could also quickly bring an end to the regulations.

A Democrat-controlled Congress could use the Congressional Review Act to repeal the regulations, a mechanism Hazel said was little used until the Trump administration began using it frequently in 2017. It allows the chambers to pass a joint resolution of disapproval to repeal rules passed within the last 60 days of the previous legislative session.

“If the Democrats take control of both houses of Congress in November, I would expect this rule to be among the top candidates for repeal under the Congressional Review Act,” he said.

Other recent Trump administration rollbacks of rules intended to scrutinize projects’ climate impact have already drawn legal challenges. Colorado has joined a multistate lawsuit over a newly finalized Environmental Protection Agency rule changing water quality certification requirements under the Clean Water Act, scheduled to take effect Sept. 11. The lawsuit claims the changes illegally limit state authority to review and authorize projects.

Under the existing rules, states have discretion to enforce conditions it deems necessary to protect their state waters that are more stringent than federal standards. Federal agencies can’t license or permit projects if a state has denied a water quality certification for it. The multistate lawsuit claims the new rule unlawfully bars states from making water quality certifications contingent on the fact that a project’s effects as a whole do not violate water quality standards.

Hazel said the new NEPA regulations’ elimination of the requirement for reviews of proposed projects’ cumulative impact seems the most significant because of its implications for evaluating projects’ contribution to climate change

“The consideration of cumulative impacts was one of the main ways that climate change impacts have been incorporated into the NEPA process in recent years,” he said. “So you’ve seen a lot of concern expressed that these changes basically allow agencies to ignore climate change impacts when making decisions about major projects.”

But as another caveat, Hazel said, it’s important to remember that even the existing NEPA regulations don’t require agencies to approve projects that do the least environmental damage, so the new regulations won’t always mean a sea change in how an agency analyzes projects.

A July 15 article from The Hill used the construction of a new road as an example: Reviewing the project’s cumulative impact would involve not just the environmental damage of the construction, but also the greenhouse gas emissions from the vehicles that will drive on it.

Hazel said the change to the cumulative impact requirement is also a useful example for understanding how analysis of government agency actions on proposed projects under the established “arbitrary and capricious” standard could shift based on the new regulations.

“It would be difficult to bring a legal challenge to an agency decision on the basis that they didn’t consider cumulative impacts, because the regulations don’t require them to, unless you are in a jurisdiction where the courts have said the statute itself requires agencies to consider cumulative impacts.”

He said that potential to lead to the dreaded geographic “patchwork” of requirements is ironic, because the new NEPA regulations are intended to speed up the processes for reviewing and approving projects.

But another part of the new regulations could lead to increased challenges of project reviews. The allowance for more involvement in environmental reviews by projects proponents might mean project proponents choosing the contractor that prepares their environmental impact statements or even prepare them themselves.

“There are still disclosure requirements if you’re going to do that,” Hazel said. “But assuming these [regulations] go into effect, we could see more of these environmental impact statements being prepared by the project proponents themselves, and then maybe you’d start to see more challenges on the basis of, how objective was that analysis?”

This article appears in the July 27 issue of Law Week Colorado. To read other complete articles from this issue, order a copy online.