Trump Administration Actions To Relax Environmental Regulations Should Eventually Benefit Renewable Energy And Transmission Project Permitting

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Federal environmental requirements and regulations have been relaxed (or are proposed to be relaxed) since President Trump was elected, but those environmental regulatory changes have not yet realized benefits for renewable energy and transmission project permitting.

As mainstream media sources like the New York Times have reported, the Trump administration’s efforts to weaken environmental laws has been somewhat substantial; to date, 67 environmental actions have been targeted by the administration, including 33 that already have been overturned, 24 with rollbacks in progress, and 10 regulations in limbo. However, most of those regulatory changes are unrelated to transmission or renewable energy project permitting. And even those regulatory changes that are loosely related to permitting haven’t yet impacted the speed with which permits are issued by federal agencies (or state agencies with delegated authority to implement federal programs), or the number of permits issued (versus denied). However, the key here is that the impacts haven’t been realized yet; permit processing efficiency and issuance are likely to improve as time goes on, particularly since some of the changes are directly intended to speed up permitting.

The permitting-related changes impacting transmission or renewable energy projects taken by the Trump administration and/or U.S. EPA Administrator Scott Pruitt in the past year, or proposed for the near future, include:

  • The National Environmental Policy Act (NEPA): A recent proposal to revise NEPA reviews may eventually have a significant impact on project permitting speed. In February, Trump proposed significant changes to NEPA by proposing a “one agency, one decision” framework for NEPA environmental reviews.  This framework would require the White House Council on Environmental Quality to rewrite its NEPA guidance for the first time since 1978, with the specific goal of streamlining approvals. It would also designate a lead agency that would prepare a single review document for each project, rather than having each agency conduct an independent review. This change promises to cut the permitting process down to 2 years or less, which would be a significant reduction from the currently processing time of anywhere from 3-5 years to 25 years. The new plan would reduce the statute of limitation for challenges to NEPA permitting decisions to 150 days from the current limits of 6 years. The proposal would also eliminate redundancy by ending reviews on the same project by multiple federal agencies.
  • Waters of the U.S.: President Trump formally suspended EPA’s “Waters of the United States” rule, an Obama-era rule meant to clarify which U.S. waters fall under federal Clean Water Act jurisdiction and thus require permitting to cross or impact. The rule had extended federal protections to some headwaters of larger waterways, wetlands, and isolated lakes. U.S. EPA Administrator Pruitt is now crafting a Trump administration version of the Waters of the US rule, which is expected to include much looser regulatory requirements on impacts to waters. The result will eventually be that fewer stormwater construction permits and Section 404 wetland fill permits will be needed, since fewer waters will qualify as “waters of the United States.” In theory, the number of waters triggering the permitting requirement has already been narrowed, although in practice waters that fell under the previously extended definition were not common.  Until the new rule is adopted, project developers would be wise to obtain a permit if the waters fall under the Obama-era definition.
  • Flooding: President Trump signed an executive order revoking Obama-era federal flood-risk standards, which had required infrastructure projects to be designed to survive rising sea levels and other consequences of climate change. The standards were revoked as part of an effort to “slash the time it takes” to approve new infrastructure projects. Although the standards covered only public infrastructure projects, revoking them could have implications for private development as well – for example, if the government builds a road in a flood-prone area, other development might follow. The likelihood that these implications would extend to energy project development, however, seems to be low.
  • Endangered Species: The Trump administration determined that 25 highly imperiled species do not qualify for protection under the Endangered Species Act (ESA) and has taken steps to remove certain species (e.g., the threatened lynx) from the ESA endangered species list.  Other species are also expected to be downgraded from endangered to threatened. The Trump administration has also rescinded an Obama-era memorandum which had found that all forms of incidental take of birds were prohibited under the Migratory Bird Treaty Act (MBTA). In its place, a new memorandum decrees that the accidental killing of birds – from eagles colliding with wind turbines to ducks zapped on power lines – is not an MBTA violation. In theory, all of these actions could eventually result in fewer incidental take permits being needed for projects since fewer species will be federally protected. However, most transmission and renewables projects do not seek incidental take permits anyway, so most projects won’t be impacted by these eventual changes.

In addition to these regulatory changes, the Trump administration is relaxing environmental standards through its lower rates of enforcement of environmental regulations. As the Environmental Integrity Project has reported, the U.S. EPA filed fewer lawsuits between January 20 and July 31 last year than it did during a similar period under the Clinton, George W. Bush, or Obama administrations. This doesn’t impact project permitting per se, but reductions in the agency’s attention to permittees’ compliance with permit conditions and its frequency of enforcing parties for failure to obtain required environmental permits could make permitting issues less of a focus during project construction and financing.

Time will tell whether and to what extent energy project permitting will be impacted by the administration’s efforts to reduce the number and scope of environmental regulations.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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