On July 31, 2023, the White House Council on Environmental Quality (CEQ) proposed to update its regulations implementing the National Environmental Policy Act (NEPA) across the federal government. Reflecting the increasingly swinging pendulum in federal environmental policy, this proposal is the second such effort in recent years after CEQ’s original regulations endured for nearly four decades. Congress’ recent changes to NEPA created a bulwark against certain rollbacks of CEQ’s 2020 regulatory amendments largely intended to codify NEPA best practices and case law. The Phase 2 regulations build upon last year’s largely cosmetic Phase 1 revisions but, as anticipated, are far broader. As a result, they may impact any project involving a federal nexus, such as discretionary permitting or financial assistance.

The proposed revisions continue to emphasize clarity and efficiency and do take steps toward those goals. But they simultaneously would add steps to the NEPA process, enable more inconsistency in NEPA implementation amongst various agencies, and expand litigation opportunities by project opponents. Moreover, the proposal arguably introduces substantive aspects to NEPA, contrary to long-standing precedent recognizing NEPA as a purely procedural statute. Indeed, the proposal emphasizes environmental outcomes, intends to move away from a NEPA “checklist approach,” and purports to specify what agencies “must and should do” under NEPA while lacking clear delineation and relying on vague terms like “encourage” and “foster.” In its press release, CEQ emphasized certain substantive outcomes of its proposal, such as to “accelerate America’s clean energy future,” and “encourage” measures addressing environmental justice, climate change, and other Biden administration objectives.

Interested parties should submit comments by September 29, 2023. CEQ will hold virtual public meetings on the proposal from late August through mid-September.

NEPA Efficiencies

Several aspects of the proposed rule mirror provisions of Congress’ 2023 Fiscal Responsibility Act, including now-mandatory time and page limits for NEPA documents, joint NEPA documents and decision-making by federal agencies, redefinition of “major federal actions” triggering NEPA review, and adoption of other agencies’ categorical exclusions (CEs). The proposal also retains certain 2020 rule provisions aimed at increased efficiency, including applicants’ and contractors’ roles in the preparation of all types of NEPA documents. Other notable proposed revisions addressing efficient NEPA reviews include:

• Clarifying that agencies can incorporate mitigation measures into a FONSI (a “mitigated FONSI”) as long as the agency (1) can conclude that the effects will be insignificant in light of mitigation and (2) includes enforceable mitigation requirements, along with a monitoring and compliance plan. However, the proposed rule also would require such mitigation plans when an environmental impact statement (EIS) is prepared and could be more explicit that such plans will not reopen the NEPA process at a future date.
• Providing clarification on when and how CEs can be used and allowing agencies to establish CEs outside of their NEPA procedures, including planning and programmatic decisions, a land use plan, or a decision document supported by a programmatic EIS or EA. Once established, agencies could apply CEs to future actions addressed in the program or plan, including site-specific or project-level actions. The revisions would also enable CEs to include mitigation measures and cover specific geographic areas or areas with common characteristics.
• Confirming that agencies do not need to conduct an EIS for actions that result exclusively in “beneficial” impacts, even if those impacts are otherwise significant. However, opinions may differ on what is “beneficial” versus “adverse.” This provision might be utilized to expedite NEPA reviews only for certain types of projects politically favored at any given time.
• Adding language codifying best practices for developing and utilizing programmatic NEPA reviews. Yet, the proposal does not specify when programmatic reviews are unnecessary or dissuade courts from entertaining asserted novel programmatic NEPA obligations for agencies to continue administering longstanding regulatory programs.

Public Involvement

The long-recognized twin aims of NEPA are environmentally-informed decision-making and public involvement. CEQ proposes several changes regarding the latter aim, such as:

• Changing references to “public involvement” to “public engagement,” revising requirements concerning public and governmental engagement to reflect the more interactive way agencies should interact with the public, and using “meaningful” engagement to better describe the purpose of the process.
• Removing the requirement that comments be sufficiently detailed to fully inform the agency of the commenter’s position, and deleting language referencing economic and employment impacts. These changes are intended to dispel any implication that commenters have an obligation to collect the information necessary for agencies to fully evaluate the issues raised and to encourage laypersons and communities with environmental justice concerns who might otherwise be discouraged or precluded from commenting. The proposal does not meaningfully alter existing provisions addressing what agencies must do in the face of incomplete or unavailable information.

• Adding more steps for environmental assessments (EAs) akin to an EIS. The proposal endorses scoping for an EA. If an agency chooses to publish a draft EA, it would need to invite public comment and consider those comments when preparing a final EA. EAs would also need to briefly discuss the purpose and need for, and alternatives to, the proposed action and separately provide an itemized, clearly defined list of requirements to make it easier for the public and agencies to ascertain whether the EA includes the necessary contents.

Environmental Justice and Climate Change

Finally, the Phase 2 proposed changes attempt to advance environmental justice (EJ) and efforts to address climate change. Critically, CEQ proposes to require agencies to address EJ impacts as a part of their NEPA assessments—a step that has previously existed only through non-binding Executive Orders and agency guidance. This appears to be the first codification of a defined EJ requirement outside the context of Title VI of the Civil Rights Act. The regulations would define EJ as “the just treatment and meaningful involvement of all people so they are fully protected from disproportionate and adverse human health and environmental effects and hazards, and have access to a healthy, sustainable, and resilient environment,” tracking the definition used in Executive Order 14096. CEQ would add disproportionate and adverse effects to communities with EJ concerns and climate change-related effects to the definition of “effects or impacts” relevant in NEPA reviews, giving them extra prominence compared to types of impacts that are not expressly called out. CEQ also would formally clarify that climate change effects can include both contributions to climate change from a proposed action and its alternatives and the reasonably foreseeable effects of climate change on the proposed action and its alternatives. CEQ “particularly invites comment on whether it should codify any or all of its 2023 GHG guidance” addressing consideration of climate change in NEPA reviews.

Conclusion

CEQ’s proposed regulations, if adopted, will affect nearly every project with any sort of federal discretionary involvement. Accordingly, CEQ’s proposal carries significant economy-wide implications. Interested parties should carefully review the CEQ proposal, submit comments, and monitor further developments at CEQ.

Beveridge & Diamond offers a full range of counseling, permitting, and litigation services for developers of energy, water, transportation, and municipal infrastructure, including significant experience and capabilities in support of NEPA reviews. For more information, please contact the authors or any member of the Firm’s NEPA and Historic Preservation Reviews or Infrastructure and Project Development and Permitting practices.