National Environmental Policy Act Regulations: Phase 2 – Streamlining NEPA Review

This is the third in a series of six eAlerts on the Bipartisan Permitting Reform Implementation Rule published in the Federal Register on May 1, 2024 (Final Rule) by the Council on Environmental Quality (CEQ). The Final Rule amends CEQ’s National Environmental Policy Act (NEPA) regulations (40 C.F.R. §§ 1500–1508). Previous eAlerts have provided a brief overview of the Final Rule and a discussion on how the Final Rule addresses the threshold determination of whether NEPA applies in the first place. 

On June 3, 2023, President Biden signed the Fiscal Responsibility Act of 2023 (FRA) into law, substantively amending NEPA for the first time in nearly 50 years. Among the most significant changes to NEPA effectuated by the FRA are provisions aimed at streamlining the NEPA review process. The Final Rule updates NEPA regulations to reflect FRA reforms and to revise existing regulations in other ways to ensure efficiency in the NEPA process. Issuance of the Final Rule marks just the second time NEPA implementing regulations have been updated substantively since they were first promulgated in 1978 (1978 Regulations). The first substantive update to NEPA regulations occurred on July 16, 2020 (2020 Regulations).

In this eAlert, we focus on aspects of the Final Rule aimed at reducing the time and complexity associated with NEPA reviews, including:

• Maintaining time limits for meeting NEPA review deadlines and requiring lead agencies to develop completion schedules;
• Maintaining page limits for environmental assessments (EAs) and environmental impact statements (EISs);
• Codifying agency practice of allowing project sponsors to prepare draft NEPA documents;
• Encouraging use of programmatic and tiered documents; and
• Encouraging federal agency adoption and use of categorical exclusions.

Reinforcing the one- and two-year timelines for EAs and EISs

As noted above, NEPA and NEPA implementing regulations remained largely unchanged between 1978 and 2020. During this time, the environmental review process became increasingly complex and time-consuming. CEQ reported in June 2020 that 25% of EISs took longer than six years to complete, while the average timeline for the Federal Highway Administration to complete an EIS was more than seven years.

To address this issue, the 2020 Regulations established a one-year deadline for completing EAs and a two-year deadline for completing EISs. The FRA codified these deadlines, and the Final Rule largely follows the 2020 revisions.

The Final Rule differs only slightly from the 2020 Regulations. First, while the 2020 Regulations required the lead agency to consult with other agencies and the project sponsor when the lead agency sets or modifies a schedule, the Final Rule adds language requiring the lead agency also to seek the concurrence of cooperating agencies and the project sponsor in setting schedules. This provision reflects changes mandated by the FRA.

Second, with respect to the deadline for completing NEPA reviews, the 2020 Regulations established that the timeline for completion of an EA ends upon publication of the EA or a finding of no significant impact and the timeline for completion of an EIS ends on the date the agency issues a record of decision. The Final Rule clarifies that the timeline for completing an EA also ends when the agency publishes a notice of intent to prepare an EIS. With respect to completion of an EIS, the Final Rule states that the timeline ends on the date the agency publishes a notice of availability of the final EIS in the Federal Register or, where applicable, the date on which the agency makes a final EIS available pursuant to the agency’s pre-decisional administrative review process.

Third, the Final Rule requires each lead agency to submit an annual report to Congress regarding “any missed deadlines” for EAs and EISs, which was a provision established by the FRA.

Finally, it is worth noting that the FRA provides project proponents the ability to petition a federal court where the project proponent believes statutory deadlines are not being met. If a court agrees, the court may set a schedule for completion, which cannot exceed 90 days from the date the order is issued. CEQ did not include this provision in the Final Rule.   

Consolidating environmental reviews and lowering page limits

The 2020 Regulations encouraged lead and cooperating agencies to evaluate a proposal requiring an EA or an EIS in a single environmental document and issue a joint record of decision. The Final Rule strengthens this provision slightly, making it mandatory for agencies to issue joint documents where practicable.  

While the 2020 Regulations, FRA, and Final Rule each contain identical page limits for NEPA documents, in the Final Rule, CEQ removed a provision adopted by the 2020 Regulations that allowed a senior agency official of the lead agency to approve longer documents. Pursuant to the Final Rule, an EA is limited to 75 pages, while an EIS is limited to 150, unless the subject proposal is “extraordinarily complex,” in which case the EIS must not exceed 300 pages.   

Codifying agency practice of allowing project sponsors to prepare draft NEPA documents

The FRA directed federal agencies to establish procedures allowing a project sponsor or its consultant to assist in preparation of EAs and EISs under the supervision of the lead agency. The Final Rule reflects this direction and provides substantive guidelines for promulgation of agency-specific procedures and clarification that the lead agency remains “ultimately responsible” for the accuracy and completeness of the EA or EIS.

Encouraging use of programmatic and tiered documents

In order to facilitate the use of programmatic and tiered NEPA documents, the Final Rule builds on certain provisions contained by the FRA. Among other things, the Final Rule clarifies that programmatic NEPA review can include use of programmatic EAs—not just EISs—to evaluate the environmental effects of policies, programs, plans, or groups of related activities. The Final Rule also adopts provisions from the FRA which extended the timeframe in which an agency is permitted to rely on the analysis contained within a programmatic NEPA document for which judicial review was available. 

Like provisions relating to programmatic NEPA documents, the Final Rule also encourages use of tiering. Generally speaking, tiering reflects situations where rather than preparing a single EIS in connection with a large project or program, an agency conducts two or more rounds (tiers) of environmental review—with the first tier analyzing the broader project or program, and subsequent tiers examining individual sections or projects in more detail. In the Final Rule, CEQ clarifies that agencies may utilize tiering with an EIS, EA, or other programmatic document relevant to a later proposed action, and that agencies retain discretion to complete the “hard look” required by NEPA in either the programmatic environmental document or subsequent tiered documents. 

Encouraging adoption and use of categorical exclusions

Drawing from the FRA, the Final Rule expands the ability of agencies to utilize and establish categorical exclusions (CEs) without amending their respective regulations in order to save agency resources and expedite NEPA compliance. Among the provisions aimed at encouraging the use of CEs are:

• Allowing agencies to establish CEs jointly by using a shared substantiation document, and listing the CEs in each agency’s NEPA procedures or identifying CEs through another joint document;
• Allowing agencies to adopt another agency’s CE so long as the adopting agency (a) consults with the agency that established the CE, and (b) provided public notice and evaluation of the CE the adopting agency plans to use; and
• Lengthening the time for agencies’ periodic reviews of CEs from seven to ten years, and clarifying that these reviews can occur in “tranches” or “on a rolling basis” starting with the oldest CEs, in recognition of the fact that these periodic reviews often take more than a year.

Closing thoughts

The various streamlining measures set forth in the Final Rule may go some distance in expediting NEPA review and removing some unnecessary complexities. However, as we discuss in other eAlerts in this series, the Final Rule also contains provisions that may cut against these efforts. Ultimately, it may take time to determine whether the provisions to make NEPA processes more efficient are effective, and much of that may depend not only on how the various federal agencies choose to implement NEPA for their projects and reviews, but also on how courts react to NEPA documents prepared under the new rules. Much of existing NEPA practice has developed over time in response to court decisions stemming from the 1978 Regulations. Finally, the regulated community should keep an eye out for agency-specific NEPA regulations, proposed versions of which must be published by July 1, 2025. These regulations are likely to include agency-specific refinement to NEPA procedures and, potentially, new lists of CEs.