Top 10 Changes In The Debt Ceiling Deal's NEPA Reforms

• Published date: 15 June 2023
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity, Climate Change
• Law Firm: Winston & Strawn LLP
• Author: Mr Jonathan D. Brightbill and Madalyn G. Brown

The first amendments to the National Environmental Policy Act (NEPA) in decades might materially narrow NEPA reviews and streamline federal permitting of oil, gas, and renewable energy projects, leasing on federal lands, and reviews for roads, bridges, and other infrastructure projects, including the extent to which federal agencies must consider greenhouse gas emissions said to impact climate change. President Biden recently signed the Fiscal Responsibility Act of 2023 into law, which raised the U.S. debt ceiling. Included among the spending provisions is Section 321, known as the Builder Act. These congressional amendments to NEPA codify past regulatory reforms, and could impact the pending effort of the White House Council on Environmental Quality (CEQ) to promulgate a "Phase 2" set of regulatory amendments to the current NEPA rules. We explore primary changes to the statute and potential implications.

Setting the Stage

NEPA requires federal agencies to incorporate environmental considerations into their planning and decision-making. Subject to certain exclusions and exceptions, federal agencies must assess the environmental impact of "major federal actions" significantly affecting the environment.¹ This generally requires an environmental assessment (EA), and then an environmental impact statement (EIS), which consider and document the potential environmental effects of a proposed action and alternatives to mitigate those effects.

The CEQ NEPA regulations² historically provided the framework for implementing the statute. Prior to the Trump and Biden administrations, the CEQ last comprehensively revised its NEPA regulations in 1978. In 2020, CEQ amended the pre-2020 NEPA regulations, seeking to streamline the NEPA process to promote infrastructure development. As we previously reported, key changes in the 2020 regulations included a revised definition of "major federal action," a narrowed definition of "effects," removing the express requirement that agencies consider cumulative and indirect effects in favor of an inquiry into the closeness of causal connection, and an introduction of presumptive time limits for completing EISs and EAs and various litigation reforms.

The Biden administration announced a reconsideration of the amendments introduced by the Trump administration with a two-part plan. In May 2022, Phase 1 went into effect.³ These regulations restored the express requirement to assess both indirect and cumulative impacts, revised the requirement for a purpose-and-need statement in an EIS, and clarified that federal agencies can develop their own programs that go beyond the review required by the CEQ NEPA regulations. The Biden administration's Phase 2 of the NEPA revisions was announced to provide "further improvements to the efficiency and effectiveness of environmental review processes and reflect the Administration's commitment to achieving environmental justice and confronting climate change,"⁴ but it has not yet been proposed.

In March 2023, the Republican majority in the House introduced H.R. 1335 - the Transparency, Accountability, Permitting and Production of American Resources Act.⁵ The bill included scores of provisions intended to "restart onshore and offshore oil, gas, and coal leasing" and "streamline permitting for energy infrastructure."⁶ The bill sought to codify into NEPA Section 102 many of the...