In 2020, the Trump Administration restricted the environmental review process for major federal actions required under the National Environmental Policy Act of 1969 (“NEPA”) to essentially consider only the goals of the applicant; this was the first time a substantial change had been made to this process in over 20 years. To reverse this reduction in environmental protection, on October 7, 2021, the Council on Environmental Quality (“CEQ”) published a rule proposal requiring that reviews under NEPA include a broad range of environmental concerns, including climate change and environmental justice, priorities of the Biden administration. The current proposal would require that agencies meaningfully consider environmental, economic and social impacts in their NEPA review, which is not compelled under the present regulations, and consider whether there are alternatives that would lessen the impacts of a project. This is significant given the passage of the Infrastructure Bill through which $1.2 trillion of federal funding will be directed towards building things such as roads, bridges and port facilities, most of which will require NEPA review.
NEPA ensures that federal agencies evaluate the environmental effects of proposed federal actions, including federal authorization, implementation or funding of projects, and prepare Environmental Impact Statements (“EIS”) that identify not only potential concerns but also possible alternatives.. The recent CEQ rule proposal is Phase I of an initiative to restore robustness to the EIS process and includes: 1) a requirement that the justification for the EIS be based on more than just the goals of the applicant; 2) removal of certain limitations on the process that may restrict an agency’s ability to meet its mission through the EIS process; and 3) a return to the previous definition of “effects,” which will broaden the impacts that are assessed in the EIS.
Revisions to the Purpose and Need Statement
The purpose and need statement of an EIS sets forth the rationale for the agency’s action. To that end, it identifies the impacts the agency will evaluate and the parameters the agency will consider to support reasonable alternatives that may cause less environmental harm. The 2020 revisions to the NEPA regulations required the agency to base the purpose and need statement on the goals of the applicant, which clearly limited the scope of the review and essentially ensured approval without changes.
The CEQ is proposing to base the purpose and need statement on a variety of factors, only one of which is the goal of the applicant. Under the change, the agency can consider, among other things, environmental impacts, local economic need, regulatory requirements and the public interest. This change allows agencies to evaluate issues such as climate change and environmental justice, and consider alternative actions that may have less impacts. For example, when building a federally funded road, the NEPA review may identify the need to relocate a portion of the road if it is located in an area subject to flooding or may cause a disproportionate effect on overburdened communities, even though the initial proposed location may provide the fastest or shortest route. To be consistent, the CEQ also is making a conforming change to the definition of “reasonable alternatives” to exclude the limitation that such alternatives should again simply meet the goals of the applicant. These revisions will increase the range of factors and alternatives contemplated with respect to a federal action, and ensure that the public interest is a key consideration in the process.
Flexibility in the Process
Additionally, the CEQ is proposing to provide agencies the discretion and flexibility to develop procedures beyond the CEQ regulatory requirements. The 2020 revisions include language that if there is a conflict between the CEQ regulations and the agency’s NEPA procedures, the agency is required to follow the CEQ regulations. As such, under the 2020 rule, agencies were directed to eliminate procedures that are inconsistent with the CEQ regulations, which reduced agency discretion. In its current proposal, the CEQ proposes to remove this limiting language to allow agencies to consider all aspects in the EIS that are consistent with the agency’s mission; for instance, an agency may require additional public meetings or more specific evaluations of air or water quality. This change would allow each agency to identify and address the various priorities important to it. Although this may lengthen the review process for federal projects, it ensures that important issues are considered prior to developing these projects, like redirecting truck routes to reduce air pollution, avoiding sensitive environmental receptors or obtaining appropriate community input.
Changes to the Definition of “Effects”
Finally, the CEQ is restoring “direct” and “indirect” effects and “cumulative impacts” to the definition of "effect” or “impacts” that an agency is required to consider in the EIS. These terms drive the EIS analysis because they delineate what an agency must consider with respect to each major federal action.
“Direct” effects are things that occur at the time of the project, “indirect” effects happen later in time or are farther removed in distance, and “cumulative impacts” result from the incremental impacts of the action. The 2020 revisions eliminate the need to consider these effects or impacts and narrows the scope of the NEPA analysis. The CEQ’s changes would ensure that the EIS considers foreseeable future impacts such as those from greenhouse gas emissions. Moreover, the inclusion of “cumulative impacts” would allow agencies to consider how incremental impacts of proposed actions could contribute to greater environmental concerns such as climate change, biodiversity loss and environmental justice, and provide important information regarding the need for alternatives. The CEQ’s revisions would require that an agency’s review considers not only the direct impacts of the project on the environment, such as sediment control or pollution issues, but also evaluates the possible long term effects including loss of habitat, increased concerns for overburdened communities and the reduction of areas that could address flooding.
The CEQ’s recent rule revisions would broaden the environmental review under NEPA and are critical to the Biden Administration’s goal of bringing all environmental concerns to the forefront of any environmental impact analysis. Although NEPA may not stop a project from occurring, it can result in alternatives or revisions that may be less impactful, which is a key component in appropriately addressing current, ever-growing, complex environmental concerns associated with major federal actions, including the many projects that will stem from the Infrastructure Bill.