White House Council on Environmental Quality Finalizes First Phase of NEPA Regulation Revisions
What Changed, What Matters for Local Governments and What’s Next
The White House Council on Environmental Quality has reversed three key Trump administration changes that govern how federal agencies implement the National Environmental Policy Act (NEPA). The rule, published on April 20, 2022, finalizes what the Council on Environmental Quality (CEQ) called “Phase One” of their effort to review and revise the Trump administration’s July 2020 overhaul of the NEPA regulations, and follows a proposed rule that CEQ issued for public comments last fall. The final rule, which takes effect May 20, 2022, reverses the following:
1. Scope of effects that agencies should consider: What was widely considered to be the most substantial and controversial change in the July 2020 rule was its removal of the longstanding requirement that federal agencies consider the direct, indirect and cumulative effects in NEPA reviews, and its removal of the associated definitions of those categories of effects. It limited effects that federal agencies had to consider to those with a “reasonably close causal relationship,” and included additional language indicating that agencies were only required to consider direct effects, had discretion to consider indirect effects, and should not consider cumulative effects of their actions.
The final rule restores the requirement that agencies consider direct, indirect and cumulative effects that are reasonably foreseeable, and it restores the associated definitions. The final rule also removes language from the July 2020 rule that advised agencies to avoid consideration of “temporally or geographically removed environmental effects,” effects that “are a product of a lengthy causal chain,” and “effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.”
The 2020 narrowing of effects to be considered, and final rule’s reversal, were both focused on how agencies should consider climate change, where cumulative impacts tend to be far more significant than any individual project’s effects. With this change, federal agencies are once again directed to consider the full and cumulative impacts of actions on climate change, as well as on endangered species and communities with severe air or water pollution challenges.
2. Statement of purpose and need, and definition of reasonable alternatives: Under NEPA, an agency’s statement of purpose and need informs the range of alternative actions it analyzes in an environmental assessment (EA) or environmental impact statement (EIS). Prior to July 2020, CEQ’s NEPA regulations stated that alternatives “are the heart of the environmental impact statement,” and required agencies to consider “reasonable alternatives not within the jurisdiction of the lead agency.” The July 2020 rule instructed agencies reviewing an application for a permit or license to limit the purpose and need, and therefore the range of alternatives, to those that are consistent with the applicant’s goals and the agency’s statutory authority.
The final rule removes those limitations from the statement of purpose and need and range of reasonable alternatives. This change means that federal agencies’ NEPA reviews may consider alternatives that do not serve a permit applicant’s goals or may go beyond the scope of a lead agency’s authority or mission.
3. Agency implementing regulations: The final rule removes language from the July 2020 rule that would have made the CEQ regulations a ceiling for agencies’ NEPA requirements, and would have barred agencies’ discretion to develop and implement procedures beyond the CEQ regulatory requirements. The change makes the CEQ regulations the floor for agency implementing regulations.
The final rule leaves in place, for the time being, several other Trump Administration changes to NEPA implementation. For example, the presumptive time limits of one year for an environmental assessment and two years for an environmental impact statement, unless a “senior agency official” approves a longer time period in writing, will remain. Categorical exclusions that the Trump Administration required agencies to include in their implementing regulations also remain, along with provisions that were intended to limit legal remedies in challenges to NEPA reviews.
CEQ is now working on a broader Phase Two rulemaking that will propose comprehensive revisions to the July 2020 rule, and expects to issue a proposed Phase Two rule “in the coming months.”
For public agencies, this Phase One final rule ends some potential limits on the range of alternatives and effects that federal agencies will consider in NEPA reviews of their projects and permit applications, and the pre-2020 trend of an increasing focus on climate impacts in NEPA reviews will likely return. But it also brings back longstanding standards for analyzing alternatives and effects, which may reduce legal uncertainties for NEPA reviews going forward.
The provisions reversed in the final rule were the focus of five lawsuits challenging the 2020 overhaul, including one challenge by the State of California and 20 other states. See California v. Council on Env't Quality, No. 3:20cv06057 (N.D. Cal. 2020); Wild Va. v. Council on Env't Quality, No. 3:20cv45 (W.D. Va. 2020); Env't Justice Health All. v. Council on Env't Quality, No. 1:20cv06143 (S.D.N.Y. 2020); Alaska Cmty. Action on Toxics v. Council on Env't Quality, No. 3:20cv5199 (N.D. Cal. 2020); Iowa Citizens for Cmty. Improvement v. Council on Env't Quality, No. 1:20cv02715 (D.D.C. 2020).
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