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For the first time since their adoption in 1978, the Council on Environmental Quality (CEQ) is proposing major changes to its regulations governing federal agency implementation of the National Environmental Policy Act (NEPA).  CEQ outlines these additions and revisions in its January 10, 2020 Notice of Proposed Rulemaking, inviting public comments on the document until March 10, 2020.  Water users and other businesses, state and local agencies with projects involving any federal issues should be tracking the NEPA regulatory changes to determine if there are impacts to their projects.

Background

Congress passed NEPA in 1969, with the twin purposes of requiring that federal administrative agencies analyze the environmental effects of proposed actions and alternatives prior to authorizing or carrying them out, and to foster public participation in the agency decision-making process.

NEPA touches virtually every project subject to some form of federal jurisdiction.  Western water projects in particular are frequently subject to NEPA review given the ubiquity of federal reclamation projects, facilities and the water appropriated for their operation.  This is additionally true for non-federal projects subject to federal permitting, such as those involving dams, water diversions, upgrades to water facilities, diversions of navigable waters or rights-of-way across federal land.  A significant portion of CEQ’s proposed revisions deal with threshold applicability questions, and if NEPA does apply, which of the three levels of environmental review is appropriate.

The core of NEPA though—and its principal source of litigation and political controversy—is the procedural requirement that for all “major Federal actions significantly affecting the quality of the human environment,” federal agencies must prepare a detailed statement on the proposed action’s environmental impact, any unavoidable adverse effects, alternatives to the proposed action, the relationship between short-term use and long-term productivity, and any irreversible and irretrievable commitments of resources.  CEQ calls that “detailed statement” an environmental impact statement (EIS).  A principal component of both the existing regulations and the revisions outline when the EIS requirement is applicable and the depth of analysis that statement must contain.

The Proposed Revisions

The stated purpose of the proposed revisions is to facilitate more efficient, effective and timely NEPA reviews by federal agencies.  The proposal establishes presumptive page and time limits for EIS completion, and outlines methods to enhance interagency coordination for proposals in which multiple agencies are involved.  The proposal also adds new sections and revises numerous portions of the existing regulations’ text and organization, described as an effort to reduce ambiguity and to reflect statutory, judicial and other developments since their original issuance in 1978.

At the outset, CEQ proposes a new section outlining a series of considerations to assist agencies in a threshold analysis for determining whether NEPA applies, and supplements the existing regulations to describe the three levels of NEPA review and the basis upon which an agency determines the appropriate level of review for a proposed action.  The revisions also amend the existing section on timing to reflect CEQ’s current view that agencies need discretion to structure the timing of their NEPA processes based on the context of the particular action and governed by a “rule of reason.”  CEQ also proposes to require that agencies evaluate proposals involving multiple federal agencies in a single document, and to clarify when agencies can rely on existing studies and environmental analyses.  On the topic of coordination, the revisions authorize and require federal agencies to cooperate with State, Tribal and local agencies to reduce duplication, but clarify that NEPA does not require reconciliation of inconsistencies with State, Tribal or local laws.  Finally, the revisions allow applicants and contractors to prepare environmental review documents, under direction of an agency.

More substantively, the proposal elaborates on how the regulations currently treat the “alternatives” an agency must consider in its review.  It reiterates that an agency must only consider reasonable alternatives, defined in relation to the nature of the underlying action, but adds to the definition that “reasonable” includes only alternatives that are economically and technically feasible.  CEQ continues to seek comment on whether the regulations should establish a presumptive maximum number of alternatives analyzed.

Significantly, the proposal also outlines numerous changes to the regulations’ Definitions section.  In practice, these changes will operate to narrow the scope of NEPA review and threshold applicability.  The proposal eliminates CEQ’s current definition of “effects” as “direct,” “indirect,” and “cumulative,” and replaces that with effects that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action, further specifying that a “but for” causal relationship is insufficient to constitute an “effect.”  The revisions also eliminate the definition of “cumulative impacts” and changes CEQ’s position to state that analysis of cumulative impacts is not required under NEPA.  Additionally, CEQ replaces “ ‘major’ federal actions” with “ ‘significant’ federal actions,” and adds a sentence that an action meets the definition if it is subject to Federal control and responsibility, and it has effects that may be significant.  An additional two sentences are added to make clear that the term “significant” 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.

Conclusion

If enacted, CEQ’s proposed revisions will constitute the first comprehensive reform of the NEPA process since CEQ’s regulations were first established.  Certainly the proposed revisions contain many updates that simply reflect good sense and common understanding, such as requiring a greater degree of interagency coordination given the world’s internet-age connectivity.  But for the more fundamental (and thus controversial) changes, precise long-term outcomes are difficult to predict, because if finalized, the immediate consequence is likely to be a new species of NEPA litigation as opponents parse the validity of the new regulations’ numerous individual components—in particular the provisions dealing with questions of threshold NEPA applicability and scope of review once it does apply.  The body of precedent arising from that wave of litigation is what will ultimately determine the new regulations’ sweep.

If your project has a NEPA component, then it may be important to you to be involved in the decision-making.  You can do that by providing comments to CEQ (or joining other similar parties who are providing comments), and potentially communicating with your local Congressional delegation.  CEQ is accepting comments until March 10, 2020, and has also announced public hearings in Denver, Colorado on February 11, 2020, and in Washington, D.C. on February 25, 2020.

For further information on this topic, please contact Dan Condren at dcondren@somachlaw.com.

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