Dismantling environmental review rules creates new obstacles to infrastructure deployment
For close to half a century, a common set of government-wide rules has provided a framework for how federal agencies and project applicants comply with the National Environmental Policy Act, or NEPA. That all changed last month when the Council on Environmental Quality (CEQ)—the White House office tasked with overseeing government programs and activities in light of NEPA’s policy—eliminated not only its current rules for agencies’ compliance with NEPA, but all its prior rules.
Though described as an effort to expedite federal permitting processes, these actions will have the opposite effect, adding delays and ambiguity to the environmental review process by creating confusion for agencies and industry. Agencies and project applicants will still need to comply with NEPA’s statutory text, agency-specific regulations, and related caselaw, but elimination of government-wide rules complicates interagency coordination, limits the options available to lessen the detail required in reviews, and complicates implementation of reforms passed by Congress to improve the process. There are far better, data-driven reforms for streamlining permitting and environmental reviews processes than this approach.
Here, we explain the purposes of NEPA, how we got here, and what is likely to come next. We also provide some of the evidence-based policies CATF is committed to advancing that can reduce the time for review of beneficial projects, such as clean energy infrastructure projects, while maintaining robust scientific analysis and facilitating public participation.
What does NEPA require of federal agencies and project applicants?
Created in response to concern around damage to the environment, NEPA requires federal agencies to consider environmental impacts of their activities, integrate those considerations into agency decision making, and enhance public transparency in the decision-making process. Agencies carry out this policy by taking a hard look at the potential impacts of major proposed federal actions through an environmental review document. These reviews inform the public of the environmental effects of projects, and that the agency has considered those effects.
Environmental reviews under NEPA vary in their level of detail. Generally, the projects anticipated to significantly impact the environment need an environmental impact statement, or EIS, while environmental assessments, or EAs, are conducted for projects with lesser impact. Projects of a type known to not have significant effects on the environment may also qualify for a “categorical exclusion,” the lowest level of NEPA review. Categorical exclusions were created in CEQ NEPA regulations, and Congress codified a definition of the term in the Fiscal Responsibility Act in 2023.
How did we get here?
An executive order issued on day one of the new administration revoked an earlier order from 1977 that directed CEQ to issue NEPA regulations to federal agencies for implementing NEPA. In its place, the new order directed CEQ to propose rescinding its NEPA regulations and put new guidance in its place. That order followed a decision by the D.C. Circuit that CEQ lacked rulemaking authority—although a majority of that court’s active judges later clarified that part of the opinion was not necessary to the ruling, and therefore not binding—and a district court decision that vacated the 2024 update to CEQ’s regulations. This ruling left the 2020 CEQ regulations in effect by default.
Although the recent executive order merely directed CEQ to propose rescinding its regulations, and compliance with the court decisions did not require eliminating earlier NEPA rules, CEQ went a step further. By issuing an “interim final rule,” CEQ removed all of its NEPA regulations without first going through the notice and comment process. In place of those regulations, CEQ issued a short guidance document recommending that agencies continue to follow the 2020 NEPA regulations—the very regulations CEQ was eliminating in the interim final rule.
What’s next?
Removing CEQ’s NEPA regulations creates fresh uncertainty for agencies and project applicants that will delay environmental reviews. Agencies are still obligated to comply with the statute, agency-specific NEPA regulations, and caselaw. But without a common set of government-wide rules, it will be harder for agencies to coordinate, applicants will be unsure of what level of detail is required for NEPA reviews, and delays are inevitable. This uncertainty is likely to reverse the trend in recent years of decreasing NEPA timelines—from a median of 3.5 years for an EIS between 2013 and 2016 to a median of 2.4 years in 2021 to 2024.
The decision to eliminate CEQ’s NEPA regulations runs counter to several best practices to decrease environmental review timelines, ensure robust scientific analysis, and engage the public. Modern infrastructure projects often need permitting decisions from multiple agencies, and CATF research shows that coordination and consistency among agencies is essential to limit delays. CEQ’s rules have provided a tool for that coordination. These rules have also lessened the burden of environmental reviews by providing time-saving procedures, like categorical exclusions or the framework for “tiering” environmental analyses across multiple reviews.,
Agencies may now be unable to access these efficiencies unless they are explicitly built into agency-specific NEPA procedures. And to make up for the coordinating function of CEQ’s rules, agencies will need to actively work with each other to align interagency policies and procedures. CEQ has statutory authority under NEPA to be consulted as agencies develop their NEPA procedures – this authority enables CEQ to continue to be a resource to agencies, facilitate coordination across agencies, and support efficiencies in the NEPA process. However, in our research over the course of 2023 and early 2024, we found lack of dedicated, specialized staff was already a key hindrance to interagency coordination. Diminishing expert agency and CEQ staff and increasingly limited coordinating mechanisms will only lead to more delays.
Oddly enough, the best course of action may be to pretend like none of this ever happened. Indeed, CEQ’s own guidance recommends that course of action—that agencies should continue to follow their own regulations, the text of NEPA as amended by the Fiscal Responsibility Act, and CEQ’s now eliminated 2020 rules as if they were still there.
What could we do instead to improve project timelines and outcomes?
There are opportunities to make environmental reviews under NEPA more efficient, especially for the clean energy infrastructure that we need, while resulting in better project outcomes. CATF’s research has identified three major themes that should be addressed: (1) leadership, coordination, and capacity at the federal level; (2) alignment of requirements among different jurisdictions with permitting authorities; and (3) efficiencies in the permitting process. Restoring CEQ’s regulations—and continuing to look for ways to make them better—can provide the framework for continued coordination across agencies and alignment across jurisdictions, as well as for early public engagement that can identify potential problems before they turn into obstacles for projects. Short of that, CEQ could provide more detailed guidance, developed through notice and comment, to help agencies and project applicants better implement their statutory responsibilities. See CATF’s comments to CEQ for more detailed recommendations.
Government-wide regulations are not the only way to achieve better project outcomes on shorter timelines. As mentioned earlier, effective permitting and environmental reviews depend on agencies having sufficient staff with the relevant expertise. Consistent funding for agencies can improve and incentivize long-term planning processes. And legislative action—whether in Congress or states—can eliminate duplicative reviews, align procedures, and create incentives for early stakeholder engagement that benefits communities, the environment, and project developers.
CATF continues to investigate how to improve the NEPA and permitting processes for clean energy infrastructure, from transmission to offshore wind, and other technologies necessary to achieve a zero-emissions, high-energy planet at an affordable cost. We look forward to advancing solutions with any decisionmakers willing to lead on these issues.
