NEPA Rules Rewrite: Déjà Vu All Over Again

This is the first in a series of eAlerts on proposed revisions to regulations implementing the National Environmental Policy Act (NEPA) issued by the Council on Environmental Quality (CEQ). This Notice of Proposed Rulemaking (NPRM) initiates “Phase 1” of CEQ’s two-part effort to reconsider the comprehensive modification of the NEPA regulations issued during the Trump administration. The 2020 regulations were the first and only significant revisions of the NEPA regulations since the regulations were first issued in 1978. In his first day in office, President Biden directed the CEQ to reassess the 2020 regulations by Executive Order 13990.

This “Phase 1” rulemaking has previously been described by CEQ as including a “narrow” set of changes to address the Biden administration’s overarching goals of improving our nation’s resilience to the impacts of climate change and prioritizing environmental justice, as well as addressing near-term “interpretive and implementation problems” with the 2020 regulations. 

The second phase of CEQ’s intended revisions to NEPA regulations will also address these goals, but will be “broader” in nature. In the preamble to the Phase 1 Revisions, the CEQ states plainly that the agency intends to “generally restore” NEPA regulations that had been in place since the 1970s until they were revised under the Trump administration. For ease of reference, we shall refer to the NEPA regulations as they were before 2020 as the 1978 Regulations, the current NEPA regulations as the 2020 Regulations and the NPRM as Phase 1 Revisions. 

The Phase 1 Revisions address three main areas within current NEPA regulations: (1) the formulation of an agency’s purpose and need statement; (2) formulation of agency-specific NEPA procedures; and (3) the definition of the “effects” of a federal proposal. CEQ has initiated a 45-day public comment period on the Phase 1 Revisions, which closes on November 22, 2021.

We begin this series on the Phase 1 Revisions by describing changes CEQ has proposed to make with respect to the formulation of the “purpose and need” for a proposed agency action and to the definition of “reasonable alternatives.”

Revision of Purpose and Need (40 C.F.R. 1502.13) 

The 1978 Regulations had no provision requiring a federal agency to focus its purpose and need on the goals of one applying for federal authorization. In a marked departure, the 2020 Regulations required that where the duty of the federal agency preparing NEPA documentation was limited to reviewing an application for federal authorization, the purpose and need statement should focus on the goals of the applicant and the scope of the agency’s authority relative to the same. See 40 C.F.R. §1502.13.

In the Phase 1 Revisions, CEQ has proposed to remove this directive because it could be interpreted to require agencies to “prioritize the applicant’s goals over other relevant factors, including the public interest.” CEQ further indicates its view that federal agencies have the discretion to base the purpose and need for their actions on a variety of factors, including “desired conditions on the landscape or other environmental outcomes, and local economic needs, as well as the applicant’s goals.”

CEQ also proposes to remove the 2020 Regulations’ provision that, with respect to an agency proposal to grant an authorization, the agency’s purpose and need should be constrained by the statutory authority of the agency to review an application for authorization. This change is proposed by CEQ to limit purported “confus[ion]” that statutory authority is only relevant when an agency proposes to grant an authorization.

By removing references to the goals of an applicant, the Phase 1 Revisions seek to “confirm” that federal agencies should consider a range of alternatives that meet the purpose and need for a proposed action “that are not unreasonably constrained by the applicant’s stated goals.”

Revision of Definition of “Reasonable Alternatives”

CEQ also has proposed to update the definition of “reasonable alternatives” that must be considered by a federal action agency to be consistent with the proposed changes to the CEQ’s purpose and need regulation. The current definition of “reasonable alternatives” in the 2020 Regulations requires an agency to examine a reasonable 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 an applicant. In the Phase 1 Revisions, CEQ has proposed to remove from the definition the requirement that an alternative meet the goals of an applicant for federal authorization. 

Closing Thoughts

As we noted in a prior eAlert covering the 2020 changes to NEPA regulations, formal recognition of an applicant’s purpose and need for a given federal authorization was a significant development because formulation of the purpose and need statement establishes the framework for the number and type of alternatives analyzed in a NEPA document. Where a federal agency includes a purpose and need statement that is not narrowly tailored to the true purpose of the underlying action, the alternatives analysis may not be as valuable as it otherwise might be since alternatives may, in fact, be impractical or otherwise impossible for a project proponent to implement.

The CEQ and opponents of the 2020 Regulations also recognized the importance of this change. Of the more than one million comments submitted on then-proposed 2020 Regulations, a significant number took issue with CEQ’s directive for federal agencies to address an applicant’s purpose and need.

We expect there to be significant interest in these and other proposed changes in the Phase 1 Revisions and, ultimately, litigation over any final rules.

The Phase 1 NPRM proposes only a limited number of changes to the 2020 Regulations to facilitate compliance with NEPA given the clear change in direction planned by CEQ. However, the preamble to the NPRM telegraphs what is likely to come. CEQ clearly looks with favor on the 1978 Regulations. Almost all of the cases interpreting  NEPA rely on these older regulations. The preamble also signals that CEQ intends to address climate change and environmental justice in a more explicit way than has been the case heretofore.

Please stay tuned for the next installment in this series, which will examine how the Phase 1 Revisions address agency-specific NEPA procedures.