Based on immediate reactions to the long-awaited final "Phase II" NEPA regulations, one might think that the Council on Environmental Quality (CEQ) substantially altered long-standing federal environmental review practice.
Critics claimed that the final rules will increase the burden on infrastructure development and lead to more delays. They argued that the rules were biased in favor of certain kinds of federal actions, like renewable energy and public transit, at the expense of approvals for traditional energy development and mining extraction. Indeed, on the day the almost 500-page notice was released, politicians threatened reversal of the rules under the Congressional Review Act (CRA).
By contrast, supporters heralded CEQ's decision to expressly reference obligations to consider climate change and environmental justice impacts. They claimed that the new NEPA regulations will ensure that these issues finally get the attention they deserve. There's no dispute that the final rules clearly reflect this administration's priorities, as a simple "Control-F" search reveals.
From our practice group's perspective, however, while there are reasons to be disappointed in CEQ's disposition of certain constructive criticisms of the draft rule, the final rule merely reinforces well-understood elements of NEPA practice.
The most controversial portions of the final rule relate to CEQ's reversal of the 2020 version of the regulations promulgated under the prior administration. Those changes had focused on perceived abuses of the NEPA process that either prolonged the administrative process or created litigation risk or uncertainty.
Phase I of the rules already restored the definition of "cumulative effects" and removed the requirement that an agency focus on a private party applicant's goal when creating a "Purpose and Need." These final rules go further in reversing the 2020 standards. For instance, the rules eliminate standards for public participation that CEQ maintains would have restricted NEPA engagement, such as mandating specificity of comments and the standards for obtaining injunctive relief. (Arguably, those rules went beyond CEQ's authority.) The final rules move in the opposite direction, with several provisions aimed at increasing the public's opportunity to participate in the NEPA process, such as making Findings of No Significant Impact available for public review for 30 days, memorializing the option to permit comments on a Final Environmental Impact Statement (EIS) prior to issuing a Record of Decision, and specifying procedures to make documents and hearings more accessible to more communities.
Opponents to the final rule fault not only these reversals, but also object to the specific inclusion of climate change and environmental justice as issues contributing to the definition of the "environmentally preferable alternative" and to an agency's "significance" determination in deciding whether to prepare a full EIS. These considerations are not new. Agencies have been required to consider a project's climate impacts (where applicable) and potential climate impacts on a proposed action. Socioeconomic and Environmental Justice concerns have been part of NEPA reviews since at least the 1994 Clinton administration executive order. In theory, "significant" impacts to either of those resources have been considered a sufficient trigger for preparation of a full EIS for many years.
Perhaps most important, critics object to the provision, stating unequivocally that an agency may consider "reasonable alternatives not within the jurisdiction of the lead agency." Private developers in the traditional energy and mining sectors, in particular, worry that this provision could permit a lead agency to force consideration of infeasible or non-economic alternatives well beyond the private party's control. Litigation across the country already focuses on whether an agency must consider potential impacts beyond an agency's control or jurisdiction. This provision certainly could encourage more litigation.
The final rule also includes provisions that encourage more streamlined environmental reviews. All the timing and page limit requirements from the Fiscal Responsibility Act are officially memorialized. CEQ even defines what a "page" means, and helpfully excludes graphs, maps, and tables from the 500-word per-page limit. (A NEPA photograph may now truly be worth 1,000 words!) CEQ expands the process for the formally mundane "Notice of Intent" to prepare an EIS to allow the option of publishing simultaneously a more detailed report that defines the proposed scope of alternatives and relevant resource impacts. The final rules also promote the use of programmatic or tiered NEPA reviews, strongly encourage agencies to adopt environmental documents prepared by the lead agencies for purposes of project permitting, and lay out the procedures for agencies to adopt another agency's categorical exclusions. Whether and how agencies take advantage of these opportunities will test the effectiveness of these updated rules.
Of course, the Phase II rules will be challenged in court, likely in multiple courts, around the country. These challenges are likely to take issue with many of the concerns above, as well as with new mitigation enforcement requirements. Recall that Administrative Procedure Act challenges to the 2020 rules were dismissed on procedural grounds in district court, and that ruling was upheld by the Fourth Circuit. Thus, it is far from certain whether new litigation after the final rule's effective date (approximately the 4th of July) will be successful. It is also unclear whether CRA legislation in Congress will get enough support to be a concern for the administration. From a procedural standpoint, the administration did itself no favors by waiting until the 11th hour to publish these rules.
The page count of CEQ's final rule and response to public comments comes in at almost 1,500 pages. There's clearly a lot to consider over time. But on the whole, while it may be overly simplistic, our view is that NEPA practice will remain largely the same as it has been, only under new time limits (and with more pictures).
