In 2020, the Trump administration finalized a major overhaul of the regulations implementing NEPA, the National Environmental Policy Act. The Act requires agencies to conduct environmental reviews of their own major actions, and the new guidelines, promulgated by the Council on Environmental Quality (CEQ), sought to streamline the process to reduce delay and limit litigation. The Biden administration swiftly reversed some of those changes, but has kept others, as part of a two-phase update. A rigorous environmental review process, it turns out, slows down not only ordinary infrastructure projects, but also Biden’s clean energy goals.
On October 18, Jonathan Brightbill moderated a panel discussion on these issues, hosted by the Federalist Society’s Environmental Law & Property Rights Practice Group at the Mayflower Hotel in Washington. Joining him were Mary Neumayr, Chairman of CEQ in the Trump administration; James Danly, a commissioner on the Federal Energy Regulatory Commission (FERC); and Michael Catanzaro, a former Special Assistant to the White House National Economic Council. The panelists discussed the changing CEQ regulations, changes to NEPA itself in the Biden infrastructure bill and 2023 debt-ceiling deal (Fiscal Responsibility Act, FRA), and prospects for reform going forward.
The CEQ regulations, Neumayr explained, were first issued in 1978, and with one minor exception saw no updates of any kind until the reforms she oversaw. Those reforms sought to codify intervening judicial interpretations, like the Supreme Court’s 2004 ruling in Public Citizen v. DOT, which limited environmental review to discretionary agency actions and established a proximate cause range-of-review test. The revised regulations also limited consideration of “cumulative effects,” that is, the environmental effects of a given agency action in light of other agency actions, and introduced page limits and time limits for environmental review documents.
The FRA codified those page and time limits into the actual text of NEPA, but panelists disagreed on their effectiveness. Neumayr considered them essential, in light of the enormous volume of agency actions subject to the statute, but Danly and Catanzaro worried they might increase litigation risk for agencies, forcing them to produce records more vulnerable to arbitrary-and-capricious challenges. Judicial review, the panelists agreed, is NEPA’s biggest problem: it has become not a purely procedural public-information statute, but instead one that offers courts great power to strike down agency actions whose environmental effects they dislike. The FRA’s NEPA reforms might have inadvertently magnified the issue in another way, Danly suggested. The updated statute included, for the first time, an explicit cause of action, granting industry a right to sue over permitting delays. But such lawsuits would simply incentivize agencies to push out incomplete reviews—again increasing the potential for arbitrary-and-capricious challenges by environmental groups.
But the FRA did directly limit judicial review in one respect: it statutorily approved the Mountain Valley Pipeline, prohibiting any further litigation (and routing any challenges to the constitutionality of that provision directly to the DC Circuit). Though limited to one project, that approach demonstrated the correct spirit, Catanzaro argued, by tackling the judicial review problem head-on.
Prospects for immediate improvement, the panelists agreed, are dubious; but Catanzaro hoped for some level of future bipartisan consensus, since NEPA review slows down clean energy projects, a top Biden priority. All expressed concerns about CEQ’s current Phase II reform proposal. It is more cumbersome and less clear, Danly said.
Finally, in response to an audience question, Brightbill addressed another underlying issue: does CEQ possess statutory authority to issue rules with binding effect? NEPA creates CEQ and assigns it advisory and other functions—but it does not explicitly obligate it to create regulations for environmental assessments by other agencies. If CEQ regulations lack their own binding effect and rely only on presidential authority, Brightbill noted, it’s unclear whether litigants have standing to challenge the regulations directly. Judge Raymond Randolph of the DC Circuit raised the question in a 2021 concurrence, and it’s an issue that has not “been thoroughly explored and remains outstanding,” Brightbill said.
One way or another, Neumayr said, permitting is “a very challenging and complex world,” one made all the more difficult because NEPA is only the cover layer for all other federal environmental statutes.
A recording of the event is available here.
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