NEPA Overhaul Proposed By Trump Administration Depends on Second Term

The Trump Administration has prioritized modernization of the National Environmental Policy Act (NEPA) in the context of its broader regulatory and infrastructure permitting reform efforts, initiating the most significant potential overhaul of the landmark policy since its creation in the early 1970s. This modernization effort is focused on streamlining interagency coordination processes and holding agencies accountable to time limits for environmental reviews. Based on a study of 1,161 Environmental Impacts Statements (EISs) conducted from 2010 to 2017, the White House Council on Environmental Quality (CEQ) found that the average EIS completion time, from notice of intent to record of decision, was 4.5 years.[1] Reforms aimed at decreasing these timeframes have been cheered by project developers and investors, and viewed with alarm by project opponents. The current Administration has not acted quickly enough to make any significant changes to NEPA likely before the end of the President’s first term, but if President Trump is re-elected in 2020, it has laid a foundation to advance significant changes to NEPA rapidly.

CEQ’s role

Like many of its reform initiatives, the Trump Administration’s NEPA modernization process began with the issuance of an Executive Order (E.O.) and accompanying policy directives. On August 15, 2017, President Trump issued E.O. 13807, “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure Projects.”[2] The E.O. states that the federal government needs to “change the way it processes environmental reviews and authorization decisions.” To accomplish this goal, the E.O. lays out a series of directives aimed at streamlining NEPA decision making. Principal among these include directing CEQ to develop a framework for implementing the “One Federal Decision” policy and to modernize the environmental review and authorization process.

The One Federal Decision policy provides greater specificity to the “lead agency’s” coordinating responsibilities in the development of EISs and the issuance of Records of Decision (RODs) that accompany them. CEQ issued a joint guidance document with the Office of Management and Budget (OMB) that enumerated these responsibilities in detail while directing federal agencies with NEPA implementing responsibility to enter into a “Memorandum of Understanding for Implementation of the One Federal Decision[3]” (MOU). Significantly, the 12 agency signatories to the MOU committed themselves to advancing EO 13807’s policy goal of completing all NEPA reviews and authorizations within a two-year timeframe.

Historically, CEQ has shied away from setting time limits for environmental reviews and, while reviews may take much longer than they should due to bureaucratic inefficiencies, it is not clear that setting an arbitrary time limit will lead to better project evaluation or outcomes.

With respect to modernizing efforts, the EO directs CEQ to develop a list of actions within 30 days. CEQ’s first action in response was an Advanced Notice of Proposed Rulemaking (ANPRM) seeking public input on a wide range of potential changes to its NEPA implementing regulations. These –include changes to definitions of key NEPA terms such as “Major Federal Action,” “Cumulative Impact,” and “Significantly” and provisions in the current regulations regarding timelines for completing NEPA documents and agency actions. Not surprisingly, the June 20th 2018 ANPRM was welcomed by industry and met with skepticism by the environmental community. CEQ received over 12,000 comments on the ANPRM. After months of analyzing these public comments, CEQ is expected to soon submit a notice of proposed rulemaking to OMB’s Office of Information and Regulatory Affairs (OIRA), where it will be under interagency review for up to 90 days before another public comment period. CEQ will likely propose specific changes aimed at narrowing the scope of Federal actions subject to environmental review and streamlining how the reviews are conducted.

The proposed rule will garner greater attention from stakeholders than the previous ANPRM given that it is now proposing more specific reforms to the way NEPA is administered. It remains to be seen whether CEQ will be able to complete the rulemaking process by the end of the Administration, given the limited time remaining in the term, large number of public comments it will likely receive, and requirement that it respond before finalizing the rule.

On April 5, 2017, CEQ withdrew the Obama Administration’s “Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews,” [4]” viewed by the Trump Administration as an impediment to advancing its energy policy agenda.

Courts still requiring consideration of climate change impacts under NEPA

Despite withdrawal of the guidance, subsequent court opinions have complicated the question of whether reviewing agencies must consider climate change impacts during NEPA reviews. In August of 2017, for example, a divided Ninth Circuit Court of Appeals ruled that FERC’s EIS for the Sabal Trail Pipeline did not contain enough information regarding downstream greenhouse gas (GHG) emissions that would result from burning the gas that the pipeline would carry. The court required FERC to “either quantify and consider the project’s downstream carbon emissions or explain in more detail why it cannot do so.”[5]

In another case, involving a coal mine, a U.S. Magistrate Judge for the District of Montana entered Findings and Recommendations in favor of environmental advocacy groups and against Federal Defendants and the Defendant-Intervenor coal company. The U.S. Magistrate Judge found that the Department of Interior’s Office of Surface Mining’s (OSM) NEPA review of the mine violated NEPA because, among other things, OSM did not consider the indirect effects of coal combustion. [6] The court rejected OSM’s sole reliance on “a broad scale national comparison” to evaluate those effects, concluding that, [b]ecause OSM only tallied estimated emissions but did not adequately discuss the effects of downstream coal combustion, the Court finds OSM failed to take a ‘hard look’ at the non‑[GHG] effects of coal combustion.”[7] The Court further found that, because “OSM quantified the benefits of the mine expansion, it was required to quantify the costs” as well.[8] By “fail[ing] to justify its failure to quantify the economic costs of [GHG] emissions[,]” the Court decided that OSM also “failed to take a ‘hard look’ at the costs of [GHG] emissions.”[9]

CEQ has recognized the need to provide greater clarity on GHG emissions to federal agencies and project sponsors in the face of these court rulings. On February 6, 2019, CEQ submitted to OIRA revised draft guidance entitled, “National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions.”[10] Although the document will likely cover additional topics, it is expected that it will provide specific details on how agencies should account for the downstream climate change impacts of energy extraction and transmission projects. The guidance will be under review for a period of up to 90 days while the document undergoes the interagency review process.

Agency-specific initiatives related to streamlining NEPA

E.O. 13807 also directed CEQ to form an interagency working group to review agency NEPA regulations, identify impediments to efficient and effective environmental reviews, and develop actions plans to address them. The Department of Interior (DOI) and the U.S. Forest Service have been the most proactive on this front, both initiating rulemaking processes that could significantly change how NEPA is administered by the federal land management agencies.

DOI

On August 31, 2017 , for example, the DOI issued a Secretarial Order to: 1) immediately implement certain improvements to NEPA it conducts, including setting page and timing limitations for environmental impact statements2) begin assessment of additional such opportunities; and 3) implement Executive Order 13807.[11] Among the most specific substantive provisions, the Order contained a Directive stipulating that EISs issued by DOI are not to exceed 150 pages. Like the two-year time limit for Agency NEPA reviews, it is not clear that this arbitrary limit would have a significant impact on improving project outcomes or achieving greater NEPA compliance. The memo also sets a "target" for DOI’s Bureaus to complete each Final EIS for which it is the lead agency within one year from issuance of a Notice of Intent (NOI) to prepare an EIS. While this ambitious goal goes further than the E.O. 13807 two-year timeline and is an aggressive effort to streamline DOI’s notoriously slow EIS process, significant unintended consequences could potentially result from such truncated reviews.

In the Fall 2018 semiannual regulatory agenda, DOI included an entry for a proposed rule to streamline its NEPA regulations, “by increasing the number of categorical exclusions and updating our NEPA regulations.[12]” With a target publication date for a proposed rule of September 2019, DOI will likely face a challenge with the Congressional Review Act (CRA) if it seeks to finalize it, given the virtual certainty that the rule will be caught up in the “midnight regulation” period accompanying the final months of presidential incumbencies. Under the CRA, Congress can review and overturn agency rulemakings with a simple majority vote in both chambers within a 60-day legislative day window of a final rule’s publication in the Federal Register. This means that, if there is a change in Administration and a Trump Administration rule is not finalized 60 legislative days prior to the inauguration, it is in play for Congressional repeal if the opposing party has a majority. With 34 Senate seats up for grabs in 2020, a Democratically controlled house will likely exercise this authority with vigor, given the Trump Administration’s unprecedented use of the CRA to overturn 16 of the Obama Administration’s regulations.

Department of Agriculture

The U.S. Forest Service, which is part of the Department of Agriculture, has taken fewer aggressive steps to reform NEPA than DO. That said, it has nonetheless quietly advanced its rulemaking process further than Interior. In January of 2018, the Service issued an ANPRM seeking public comment on a wide array of changes to its current NEPA regulations. Notably, it specifically sought comment on specific actions that would warrant categorical exclusions, approaches to landscape - scale analyses and decision-making, and ways to expand and enhance its coordination with state, local and tribal environmental review processes. In November of 2019, the Forest Service submitted a proposed rule that advances specific proposed changes to NEPA for OMB review.

NEPA regulatory changes likely, but still uncertain

Given the precedential nature of the likely proposed changes, the interagency review process will likely be conflict prone, requiring OMB and CEQ to make difficult policy calls to adjudicate these disputes. Once the proposal is published in the Federal Register, the public will play an important role in shaping how these contemplated changes to NEPA will proceed.

For more information, contact Policy Advisor Nathan Frey, Jessica Ferrell, or any other member of Marten Law’s Permitting and Environmental Review team.