The Trump Administration’s regulation slashing has been one of the more consistent elements of both its policy development and political messaging. The president and congressional Republicans have touted action on Waters of the U.S., replacing Obama Administration limits on air emissions and various other executive orders and government-wide efforts to lower barriers to domestic spending on infrastructure as well as traditional and renewable energy development.
Now, the administration sharpened its focus onto the act that many energy producers and developers consider the largest impediment to an efficient regulatory process, the National Environmental Policy Act, better known as, NEPA.
NEPA, signed into law in 1970, requires federal agencies to assess the environmental impacts of proposed major Federal actions. The Council on Environmental Quality issued regulations for Federal agencies to implement NEPA in 1978. CEQ has not undertaken a comprehensive review in over 40 years, and practitioners have seen the length of NEPA documents and timeframes for completion expand across the federal government. As development projects have increased in complexity, the permitting apparatus has not been modernized to sufficiently respond. Regulated entities complain of a lack of consistency in permitting processes within and across agencies and requirements vary widely depending on agency management.
While permit streamlining is important to regulated entities, there long have been debates around threshold applicability with industry often presenting arguments that NEPA is being applied to activities that should not be considered significant Federal actions. Even when threshold applicability is met, regulators often default to the more onerous Environmental Impact Statement process when applicants believe previous permitting would easily enable the use of Environmental Assessments to continue ongoing environmental mitigation. CEQ seeks to address these issues through a slew of proposals to clarify and simplify how agencies should apply these definitions.
CEQ Chairwoman Mary Neumayr has sought to clarify that the guidance for threshold applicability is that environmental effects of the project are “reasonably foreseeable” and have a “reasonably causal relationship.” While cumulative environmental effects will no longer be considered, greenhouse gas emissions will not be excluded from review.
CEQ writes that the proposed rule seeks to “modernize, simplify and accelerate the NEPA process” by establishing a two-year time limit for completion of environmental impact statements and one year for the shorter environmental assessments as well as limits on the number of pages for each document.
In addition to shortening the lengths of time and volume of each document, CEQ seeks to condense the interagency review process through strengthening the lead agency role, a preference for a single Record of Decision on projects and promote the adoption of processing technology. They simultaneously seek to improve the quality of engagement with tribal, state and local authorities that often feel excluded from the federal decision-making.
NEPA has built-in tools to reduce the complexity of specific permit reviews, including the use of Categorical Exclusions and Findings of No Significant Impact. The categorical exclusion has been a particularly useful tool in some areas where a sudden uptick in permit proposals that are substantially similar — say in the same shale oil and gas field, overwhelms the capacity of under-funded permitting offices. This capacity issue has cropped up repeatedly as the domestic oil and gas industry has been forced to become more mobile in its search for cost competitive shale developments. These permits are often pre-construction, which can leave a broader area of development in limbo while the approval of a sub-part of a development plan is still under review. The White House seeks to address these issues by allowing some activities to proceed before permit review is completed, broadening the use of contractors to assist agency personnel, and broadened use of categorical exclusions.
A December 2018 CEQ study of average NEPA review timeframes since 2010 showed that across Federal agencies the average EIS took 4.5 years. Sixty percent of the environmental reviews of federal highway projects in that same timeframe took six or more years to complete. The average Bureau of Land Management EIS required 4.4 years.
The proposed rulemaking will be open to public comment until March 10 and the Administration plans to hold stakeholder engagement sessions in both Washington and Denver.
The Administration is eager to complete this rulemaking prior to May as that is the estimated deadline for future consideration under the Congressional Review Act. The CRA was designed to provide protection from “midnight regulations” passed at the conclusion of an outgoing Administration. With supermajority approval of Congress and the signature of the new president, regulations that were finalized late in the previous administration can be overturned. Additionally, the CRA removes the ability to regulate similarly in the future.
Prior to last Congress, the CRA was only successfully used once but Congressional Republicans were spurred by President Trump in 2017 to eliminate 15 Obama-era regulations.
With the outcome of the 2020 Presidential and Congressional elections far for from certain, the Administration is keen to finalize its priorities as early in 2020 as practicable.
— Brandon Kirkham is a senior director at Faegre Baker Daniels in Washington, D.C., and Colin Harris is a partner in the Boulder office.