Regulations implementing the National Environmental Policy Act (“NEPA”) – including those governing what is included in environmental impact statements (“EIS”) and alternatives assessments for projects needing federal permits – are back in flux with the Biden Administration’s newest proposal. Careful thought and planning by project proponents are needed to ensure that the environmental analyses supporting large-scale permitting and construction projects are defensible in light of these shifting assessment requirements and federal agency expectations.

Published today, the White House Council on Environmental Quality’s (“CEQ”) proposal seeks to undo several NEPA regulatory changes from Trump Administration’s 2020 rulemaking – which were the first revisions to NEPA’s regulations since 1978. If the proposed changes are finalized, NEPA documents accompanying project approvals will be required to evaluate a broader range of impacts and issues than under the current regulations. Some stakeholders have already expressed concerns that these changes may lead to project delays and higher permitting costs and could pose a new set of challenges to improving U.S. energy and transportation infrastructure. Projects will continue to be analyzed under the 2020 NEPA regulations until any new regulations are finalized.

Indirect and Cumulative Impacts

The Administration’s proposal would increase the number and variety of impacts and effects that a project proponent would need to consider in its EIS, including those of climate change and environmental justice. To accomplish this, the proposed rule would restore the definitions of “direct effects,” “indirect effects,” and “cumulative impacts” from the 1978 NEPA Regulations by incorporating them into the CEQ’s definition of “effects” or “impacts.” Project proponents would have to consider indirect effects caused by their projects that are “later in time or farther removed in distance but are still reasonably foreseeable” and also cumulative impacts “resulting from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions regardless of who undertakes the other actions.” The Administration is proposing these changes to “ensure that the NEPA process fully and fairly considers the appropriate universe of effects, such as air and water pollution, greenhouse gas emissions that contribute to climate change, and effects on communities with environmental justice concerns.” In fact, the proposal seeks comment on whether climate change may constitute an “indirect effect,” since “air pollution, including greenhouse gas emissions, released by fossil fuel combustion is often a reasonably foreseeable indirect effect of proposed fossil fuel extraction that agencies should evaluate in the NEPA process, even if the pollution is remote in time or geographically remote from a proposed action.”

The proposal, Phase 1 of the Administration’s NEPA overhaul plans, focuses on provisions posing perceived near-term interpretation or implementation challenges and those where it would “make sense to revert to the 1978 regulatory approach.”  Other proposed changes would allow federal agencies more flexibility to set the “purpose and need" of a project, and more opportunity to direct “reasonable alternatives” for investigation. From a policy standpoint, the Administration seeks to increase community involvement in projects – especially in alternatives assessment and scoping. A Phase 2 proposal scheduled for 2022 will revisit other aspects of the 2020 rule.

CEQ will hold online meetings on the Phase 1 proposal on October 19 and 21 - click here to register. Companies may provide comment on the proposed rules through November 22.

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