A review of the CEQ's proposed revisions to the NEPA regulations

On January 10, 2020, the Council on Environmental Quality (CEQ) published in the Federal Register the proposed revisions to its regulations for implementing the National Environmental Policy Act (NEPA) for a 60-day public review period through March 10, 2020. More precisely, CEQ proposes to replace existing regulations in 40 CFR Sections 1500 to 1508, in their entirety, with the proposed new regulations.

If finalized, this proposal would be the most substantial revision of CEQ NEPA regulations since they were first adopted in 1978. It’s important to note that while the proposed CEQ regulations would not change the NEPA statute, federal court rulings in the past have often given substantial deference to the adopted CEQ regulations in their interpretation of NEPA requirements.

The proposed rule is 77 pages long and the supplementary information covers 117 pages. While we advise NEPA practitioners to read the entire rule and supplementary material in full, below is a breakdown of key changes in the revised regulations.

Incorporating One Federal Decision

The proposed regulations incorporate the requirements of the One Federal Decision (OFD) framework—which establishes a method for improving the environmental review process for major infrastructure projects—being implemented per Executive Order 13807.

Reducing the types and numbers of federal actions that require NEPA compliance

The proposed regulations would require federal lead agencies to perform a threshold analysis to determine whether NEPA applies to their federal actions. Per the proposed regulations, factors that can exempt a federal action from NEPA compliance include: a non-discretionary action; a clear and fundamental conflict with the requirements of another statute; an inconsistency with Congressional intent due to the requirements of another statute; an agency requirement to perform other analyses or processes under other statutes that serve the function of agency compliance with NEPA; and non-federal projects with minimal federal funding or minimal federal involvement where the agency cannot control the outcome of the project. 

Future interpretation of these terms—such as, what is or is not “discretionary,” or the meaning of “minimal” funding/federal involvement, or the ability to control project outcomes—will determine the extent of the change in NEPA applicability to projects.  

Reducing the scope of the required analyses

The proposed regulations would change NEPA’s scope of study in terms of included or excluded effects and alternatives. CEQ proposes to exclude from NEPA those effects that a federal agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action. CEQ also proposes to strike references to “direct” and “indirect” effects in the regulation. The elimination of these terms does not mean that no analysis of direct or indirect effects would be required, but rather that there is no requirement to specifically categorize an impact as a direct or indirect effect.

Among the proposed changes receiving substantial commentary is CEQ’s proposal to eliminate the requirement for analysis of cumulative effects. CEQ’s stated intent in eliminating reference to direct vs. indirect effects and in eliminating the requirement for cumulative effects analysis is to focus NEPA analysis on effects that are “reasonably foreseeable” and have a “reasonably close causal relationship” to the proposed action or alternatives. “Reasonably foreseeable” means sufficiently likely to occur such that a person of ordinary prudence would take it into account in reaching a decision. The revisions recognize that effects can be later in time and further removed in distance. Effects that are a product of a causal (but not lengthy) chain can be sufficient to make an agency responsible, and the proposed rule retains the current language on assessing connected actions. 

Many commenters have suggested that these changes are intended to limit or eliminate analysis of climate change under NEPA. The proposed regulation, however, does not specifically address climate change as CEQ does not consider it appropriate to address a single category of impacts in the regulations. CEQ also states that it is further delaying any direction on how agencies should address greenhouse gas (GHG) emissions and potential climate change effects until after a final NEPA rule is released. CEQ intends to then review its current draft GHG guidance (June 2019) for potential revisions consistent with the new regulations. 

The proposed regulations would also reduce the number of alternatives considered under NEPA. “Reasonable alternatives” are defined as the “range of alternatives that are technically and economically feasible; meet the purpose and need for the proposed action; and, where applicable, meet the goals of the applicant.” In the Preamble, CEQ states that this definition would preclude alternatives that are outside the agency’s jurisdiction or unlikely to be implemented because they are infeasible, ineffective, or inconsistent with the purpose and need for agency action.

Where the agency’s authority to consider alternatives is limited by statute, the range of alternatives may be limited to the proposed action and the no-action alternative. The proposed reductions in the lead agency’s scope of analyses may be tempered by the goal of including all affected agencies’ jurisdictional interests in the preparation of one EIS. 

Expanding an applicant’s role in EIS preparation

As a major departure from existing requirements, the proposed rule would allow applicants to prepare EISs (this is already allowed for Environmental Assessments) if the lead agency has adequate capability to account for and evaluate what the applicant develops.

Consequently, this eliminates the existing provisions that an EIS contractor must be chosen by the lead agency and the selected contractor must sign a disclosure statement that it has no financial or other interest in the outcome of the project. If a contractor or applicant prepares the document, the proposed regulations do require the responsible federal official to provide guidance, participate in EIS preparation, independently evaluate it prior to its approval, and take responsibility for its scope and contents.

Specific NEPA document requirements

• Categorical Exclusions – The revisions do not make any major changes to the purpose and use of categorical exclusions but do allow agencies to apply to their actions the categorical exclusions established by other agencies. (CEQ previously issued a comprehensive list of all agencies’ categorical exclusions as of December 14, 2018.) For individual actions, if any extraordinary circumstances are present and can be mitigated to avoid significant effects, the categorical exclusion can be retained.

• Environmental Assessments (EA) – No major changes to the EA process are proposed. More importantly, the scope of an EA is affected in the same manner as the scope of an EIS. A 75-page limit is established for an EA along with a one-year completion schedule, unless a senior agency official extends in writing a new page limit and/or completion schedule. 

• Environmental Impact Statements – The completion process and document format are not altered with the minor exception that environmental consequences should be addressed in the same chapter or section as the affected environment. A two-year completion schedule is proposed, and the existing page limits are retained (i.e., a 150-page limit that may reach 300 pages for proposals of unusual scope or complexity). As with EAs, a senior agency official of the lead agency can extend in writing a new page limit and/or completion schedule.

Increasing agency attention to public comments, concerns, and recommendations

In the Notice of Intent, agencies are to request comments from the public on alternatives and effects. The Draft EIS must then include a summary of all alternatives, information, and analyses submitted by public commenters and invite comments on the completeness of the summary. 

In the Final EIS (FEIS), the agency must address the public comments on the Draft EIS and provide a 30-day public comment period before executing the ROD. In the ROD, the decision maker must address any public comments on the FEIS and then certify that public comments have been considered. While many parts of the proposed regulations are focused on streamlining and shortening the NEPA process, this specific proposal runs counter to DOT’s legislative provision (through MAP-21) that allows for completing a joint FEIS and ROD and avoiding a comment period on a FEIS.

Confining litigation claims to concerns raised during the NEPA process

By following the process described in the regulations for inviting and addressing public comments throughout the EIS process, CEQ intends that a well-run NEPA process would constitute an “exhaustion” of the opportunity for public input. Consequently, CEQ asserts that the ability of the affected public to raise new concerns post-ROD, and especially in litigation, should be forfeited.

Next steps

After completion of the comment period in March, CEQ intends to finalize the rule. It will likely take CEQ some months to review, categorize, and consider the volume of comments it will receive on this proposal. CEQ must also consider whether to modify the proposed regulations and whether to respond to comments.

If the proposed rule is finalized, CEQ intends to withdraw all existing CEQ NEPA guidance currently in effect and to issue new guidance consistent with Presidential directives. If this happens, it will essentially negate the validity of most agencies’ NEPA guidance/manuals/handbooks that are based on CEQ’s guidance documents. This will undoubtedly create numerous implementation challenges for agencies, unless and until substitute CEQ guidance slowly surfaces.

After CEQ issues a final regulation, agencies have one year to revise their NEPA procedures accordingly. In so doing, they are directed not to impose additional procedures or requirements beyond those set forth in the CEQ regulations, except as otherwise provided by law or for agency efficiency.

The exact timing of when the proposed regulations may be finalized is hard to guess at without speculation. Some commentators have nevertheless speculated that the current administration may seek to finalize the rule rapidly—perhaps by late summer—in order to avoid the ability of the next Congress to invalidate regulations finalized late in an administration’s term of office, per the Congressional Review Act.

Many of the proposed substantive changes are opposed by environmental advocacy groups. These include changes relative to applicant-prepared EISs, elimination of cumulative effects analysis, and reducing the potential range of applicability of NEPA to projects. Thus, if the finalized regulations retain such provisions, they are almost certain to face legal appeals that may delay their implementation.

ICF has worked with federal agencies to comply with NEPA for many decades through changing interpretations of CEQ regulations, guidance, court rulings, and administrations. Wherever NEPA goes next, ICF is here to help.