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Trump administration proposes to overhaul National Environmental Policy Act

In the name of speeding up infrastructure siting and other federal decisions, the Trump administration released a proposed rule to revamp the National Environmental Policy Act's requirements for when federal agencies are required to study the environmental impacts of major federal actions.

Developers in the energy sector and other industries have pushed for the changes to the National Environmental Policy Act, or NEPA, contending that the current rules have made permitting even the simplest projects take up to 20 years. President Donald Trump repeated those arguments in a Jan. 9 press briefing.

"The United States will not be able to compete and prosper in the 21st century if we continue to allow a broken and outdated bureaucratic system [to] hold us back from building what we need: the roads, the airports, the schools, everything," Trump said.

SNL Image

President Donald Trump speaks about the administration's proposed changes to the National Environmental Policy Act, at the White House on Jan. 9, 2020.

Source: AP Images

But environmental groups have worried that the changes could limit project reviews, reduce public participation and cause other problems over the long term.

The White House Council on Environmental Quality, or CEQ, sent the proposed rule for publication in the Federal Register on Jan. 9. Comments on the proposed rule will be due 60 days after it is published. The CEQ plans to hold two public hearings on the rule in February.

The rule would set a two-year time limit for agencies to complete an environmental impact statement and one year to complete the less involved environmental assessments. And the rule would codify prior attempts to streamline inter-agency coordination and having one agency take the lead as well as a requirement for timely comments from agencies to prevent them from holding up the process.

ClearView Energy Partners LLC in a note observed that the shorter timelines can be met and have been in the past by "motivated energy project sponsors" during NEPA review by the Federal Energy Regulatory Commission, which oversees the permitting of natural gas pipelines, LNG export projects and hydropower projects.

That said, "incomplete or inadequate reviews could still result in expensive delays during construction," ClearView Managing Director Christine Tezak wrote. "Court-ordered suspensions or vacatur of permits with flawed NEPA reviews could more than offset the potential time saved in faster-paced reviews."

But the rule would go far beyond shortening timelines. The proposed rule would reduce the number of projects that would be covered by the law by changing the definition of major federal actions that require NEPA review. The move could potentially allow some private-sector projects to be exempt entirely.

"CEQ proposes to add two sentences to the definition (of major federal action) to make clear that this term does not include non-federal projects with minimal federal funding or minimal federal involvement such that the agency cannot control the outcome on the project," the proposed rule said.

The CEQ explained, "In such circumstances, there is no practical reason for an agency to conduct a NEPA analysis because the agency could not influence the outcome of its action to address the effects of the project. For example, this might include a very small percentage of federal funding provided only to help design an infrastructure project that is otherwise funded through private or local funds."

The proposal would also change how NEPA is applied to the federal rulemaking process. Among other things, it would allow an agency's regulatory impact analysis to satisfy the purpose of an environmental impact statement under certain circumstances.

In addition, the CEQ contemplates codifying into the regulations certain requirements that had only been in CEQ guidance documents regarding the scope of climate change-related impacts to be considered in NEPA reviews. The CEQ issued draft guidance in June 2019 that, compared with a rescinded Obama-era version, would significantly reduce agencies' analysis of greenhouse gas impacts in those reviews and limit review to only effects that are "reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives," the proposed rule said.

CEQ also asked for comment on "whether any types of financial instruments, including loans and loan guarantees, should be considered non-major federal actions and the basis for such exclusion."

The scope of greenhouse gas analysis has been a big issue dividing Republican and Democratic commissioners at FERC in gas infrastructure reviews.

On top of allowing agencies to consider records and studies submitted by tribal groups and local and state governments in preparing NEPA documents, the rule would also open the door to agencies allowing the project sponsor, "including private entities," to help out. "However, agencies would remain responsible for taking reasonable steps to ensure the accuracy of information prepared by applicants and contractors," the proposed rule said.

As for litigation, the rule would eliminate the option to appeal a finished environmental impact statement of a finding of no significant impact, or FONSI, and instead make parties wait until the agency has signed a "record of decision" to seek judicial review. Agencies would have the option to designate a final EIS, FONSI or other decision as a final action, the rule said.