CEQ's NEPA Regulatory Overhaul: Highlights And Predictions

The National Environmental Policy Act (NEPA) is a cornerstone of environmental law that Congress enacted in 1970. NEPA celebrated its 50th anniversary earlier this month. NEPA has been the focus of extensive litigation and debate, impacting a wide range of projects from energy development and pipelines to highways and infrastructure improvements. In simplest terms, the statute requires federal agencies to conduct environmental reviews and obtain public input when undertaking a "major Federal action significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C). The courts have ruled that NEPA is a procedural statute that does not mandate specific results or substantive outcome. Dept. of Transp. v. Pub. Citizen, 541 U.S. 752, 756-57 (2004). Rather, federal agencies must take a "hard look" at the environmental impacts of agency's actions. Kleppe v. Sierra Club, 427 U.S. 390 (1976).

There has not been a major revision to the NEPA regulations since 1978. The Council on Environmental Quality (CEQ) is the agency within the Executive Office of the President that is charged with administering federal agency implementation of NEPA. 42 U.S.C. §§ 4342, 4344. On 10 January 2020, CEQ issued proposed amendments to its regulations, which contain many significant changes. The public comment period is open until 10 March 2020. 85 FR 1684 (10 January 2020). In the discussion below, we provide the highlights and practical implications of these changes.

What are the changes in the proposed regulations?

The regulatory changes are extensive and reduce the scope of NEPA's application and streamline the often cumbersome environmental review process, including the preparation of voluminous environmental impact statements. Below is a summary of the most significant proposed changes:

Definition of effects: The long standing CEQ regulations define "effects" of the proposed federal action to include "direct and indirect effects" and "cumulative effects" of the proposed action. These terms are not in NEPA. The proposed amendment would omit these terms and provide that an actionable effect must be one which is directly related to the proposed action, subject to the agency's control, and "reasonably foreseeable." The proposal explains that the effects analysis should evaluate effects that have a close causal relationship to the proposed action, along the lines of proximate cause in the tort context (i.e., not a "but for" analysis). The proposal provides "[e]ffects should not be considered significant if they are remote in time, geographically remote, or result in a lengthy causal chain." Definition of major federal action: The proposed change seeks to limit the application of NEPA and exclude projects that have a minimal federal nexus. To that end, the proposal clarifies that "a major federal action" is one which is subject to Federal control or authority and whose effects are significant. The proposal further provides that this term does not include non-Federal projects with minimal federal funding or involvement, and also makes clear...