On Oct. 6, the Biden administration announced additional steps to roll back regulatory reforms instituted by the Trump administration. The Council on Environmental Quality (CEQ) announced that it plans to restore three central provisions of National Environmental Policy Act (NEPA) regulations to aid “the Biden Administration’s whole-of-government approach to tackling the climate crisis and confronting environmental injustice.” The CEQ’s Phase I proposed rule is intended to roll back 2020 regulatory changes intended to streamline environmental review processes. NEPA review is a required environmental impact review for federal projects such as highways, train stations, bridges, etc. The process can be time-consuming, costly, and rife with litigation opportunities for opponents to challenge infrastructure projects.
Although environmental impact review is an important element of projects and is regularly undertaken on local projects under the State Environmental Quality Review Act (SEQR), since NEPA was enacted in 1970, the time to construct federal projects has expanded substantially. On average, NEPA review takes about four and a half years and thousands of pages of documents. The Trump administration spent three years reviewing NEPA procedures and potential reforms. In 2020, the administration adopted reforms that required that all NEPA reviews be completed within two years and limited the scope of the reports.
The Phase I rule would modify NEPA regulations in three key areas. First, federal agencies would be required to evaluate all relevant environmental impacts in their decisions which includes direct, indirect, and cumulative impacts of a proposed action. Hence, the Biden administration is trying to ensure that its climate change agenda and environmental justice are enforced by considering those indirect impacts in federal projects. Second, federal agencies would have flexibility to consider the “purpose and need” of projects based on multiple factors and to work with project applicants and communities to mitigate impacts based on consideration of alternatives. Finally, the CEQ proposal would establish NEPA regulations as a baseline requirement for federal agencies to meet but allow agencies to adjust their NEPA procedures to meet specific needs of the agency.
The initial round of regulatory proposals is subject to public comment through Nov. 21. CEQ is working on a more comprehensive set of regulatory changes, known as Phase 2 changes, that will address a variety of topics in the review process, including climate change, environmental justice, and review procedures. Future rule changes are also expected to address exemptions from NEPA which were part of the Trump administration’s 2020 amendments but not addressed in the Phase I changes.
The changes will inherently increase the time period and complexity of environmental review as agencies are required to consider indirect impacts such as climate change. The proposed changes are not being universally accepted by contractors, consultants, and those working to complete federal projects. For example, the Associated General Contractors has questioned “[h]ow can we Build Back Better if no projects get built in our lifetimes?” However, environmental groups are pleased with the proposal to scrap Trump Administration regulatory reforms. The Environmental Defense Fund, which has sued to challenge Trump’s rule changes, is happy that the rules change “clarifies that the agency regulations are a floor, not a ceiling.”
One interesting aspect is the extent to which the proposed rules will negatively impact the Biden administration’s climate and clean energy agenda. As with any federal project, federal clean energy projects need to go through NEPA review. Hence, despite Biden’s proposed Clean Electricity Standard that would require zero carbon emissions from power production by 2035, it is unclear how the infrastructure to produce zero emission energy will be built in time.
Projects of all types will be slowed down by expanded NEPA review. Thus, despite the push by environmental groups to roll back the Trump administration’s regulatory reforms, in many respects the revisions would have made it more efficient for clean energy projects to be constructed. In fact, Mario Loyola from the Competitive Enterprise Institute, and a former director at CEQ that worked on the 2020 reforms, noted that while “[p]owerful environmental groups want to go back to the pre-Trump rules, but the renewable energy sector knows that under the old rules they can’t get a tenth of the permits they need to meet the administration’s clean energy goals.”
While regulatory updates are made with new administrations, rather than take a reflexive approach and overturn all actions from a prior presidency, perhaps a thorough review of regulatory issues would benefit the country.
George S. Van Nest is a Partner in Underberg & Kessler LLP’s Litigation Practice Group and is Chair of the firm’s Environmental Practice Group. He focuses his practice in the areas of environmental law, development, construction, and commercial litigation.