Curbing Abuses of a Politicized NEPA

Report Government Regulation

Curbing Abuses of a Politicized NEPA

August 25, 2020 23 min read Download Report
Diane Katz
Senior Research Fellow in Regulatory Policy
Diane Katz, who has analyzed and written on public policy issues for more than two decades, is a research fellow in regulatory policy.

Summary

The National Environmental Policy Act (NEPA) has persisted for five decades despite dramatic changes in America’s economic, social, and political circumstances. Once the vanguard of environmental law, the 1970 Act was superseded long ago by scores of other federal, state, and local regulations. Recent reforms by the Trump Administration have remedied some of the most problematic elements of the NEPA’s implementation rules, but the act remains an anachronism that unduly politicizes environmental protection and encourages judicial activism. The act is redundant and should be repealed.

Key Takeaways

NEPA reforms promise to reduce some of the regulatory burden that would otherwise inhibit job creation and economic growth in the wake of the COVID-19 crisis.

No federal action undergoing NEPA review could possibly alter the climate, so there is no rational basis for a climate-change assessment in NEPA permitting.

The NEPA could be repealed without adverse effects because many other regulations that control every environmental byproduct of infrastructure improvement.

The Trump Administration has finalized a much-needed modernization of the implementation rules for the National Environmental Policy Act (NEPA).REF Once the vanguard of environmental law, the 1970 act and related regulations clash with current scientific tenets and economic realities. The revised rules will reduce barriers to the nation’s recovery in the wake of the COVID-19 crisis—unless thwarted by enemies of reform and activist judges. Ultimately, however, the NEPA should be scuttled.

Establishing reasonable timelines for NEPA permitting and streamlining the process of environmental assessments will expedite construction of new and safer roads, bridges, and highways, as well as cleaner energy infrastructure—without sacrificing environmental protection. Despite predictable fearmongering from the green lobby, the reforms are hardly radical: The changes largely conform to rulings by the U.S. Supreme Court.REF

No sooner were the reforms announced than a coalition of environmental groups filed a lawsuit accusing the White House of “gutting” environmental protection.REF In fact, the 50-year-old act could be repealed without any adverse effects. There are dozens of other federal and state regulations that protect water and air quality, wetlands, and endangered species, and that control run-off, hazardous waste, construction debris, demolition dust, and every other potential byproduct of infrastructure improvements.REF

NEPA History

Congress crafted the NEPA in 1969 to inject environmental stewardship into federal agency actions.REF The 3,200-word statute requires every executive branch department to assess the environmental effects of “major” public works projects and other budgetary and regulatory actions with potentially “significant” effects.REF The law also established the Council on Environmental Quality (CEQ) within the Executive Office of the President to administer NEPA implementation.REF

Five decades of NEPA experience have revealed its numerous flaws, including arbitrary standards, politicized enforcement, and protracted litigation. The act predated the Environmental Protection Agency and virtually all federal environmental statutes, and thus its architects were relatively naïve about the machinations of bureaucratic self-interest, the politicization of environmental science, and the policy distortions wrought by judicial activism—all of which have rendered the NEPA costly, time-consuming, and riddled with conflict.

The act was most recently targeted for reform shortly after President Donald Trump took office; a 2017 executive order directed the CEQ to “modernize the Federal environmental review and authorization process.”REF Among the President’s goals: “[E]nsure that agencies apply NEPA in a manner that reduces unnecessary burdens and delays as much as possible, including by using CEQ’s authority to interpret NEPA to simplify and accelerate the NEPA review process.”

The CEQ’s notice of proposed reforms and request for public comment was published in the Federal Register on January 10, 2020.REF A whopping 1.1 million comments were submitted to the rulemaking docket.REF In a related matter, the council also proposed new guidance on agencies’ accounting for emissions of carbon dioxide (CO2), methane, nitrous oxide, and other purported “greenhouse gases” (GHG) in NEPA analyses (to replace guidance issued by the Obama Administration).REF

The CEQ’s reforms promise to reduce at least some of the regulatory burden that inhibits investment, job creation, and economic growth—particularly for infrastructure and energy-related projects. It was also important to curtail agencies’ improper speculation in NEPA reviews about climate effects.

Were it politically feasible, the optimum policy option is repeal of the NEPA entirely. Its primary purpose, at present, is to facilitate activists’ legal challenges to development. Under current political circumstances, however, incremental reform is necessary to move the nation toward a post-COVID-19 recovery.

NEPA Basics

The NEPA statute was signed into law by President Richard Nixon on January 1, 1970, and with it creation of the CEQ to administer its implementation. As set forth by Congress, the purpose of the NEPA is to:

[E]ncourage productive and enjoyable harmony between man and his environment; to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man; to enrich the understanding of the ecological systems and natural resources important to the Nation.REF

Unlike many other environmental statutes, the NEPA is not a “substantive” law; rather than mandate specific standards, it imposes procedural obligations on federal agencies.REF These include, in part, requiring agencies to consider the environmental impacts of the proposed action, any unavoidable adverse effects, and alternatives to the proposed action.

The range of federal actions to which the statute applies is broad, encompassing government financing, technical assistance, permitting, regulations, or federal policies and procedures that touch a project. Single projects often include multiple agencies. Indeed, compliance is rendered difficult by the fact that each federal agency crafts its own NEPA procedures, and thus projects often face multiple sets of rules. The NEPA Book: A Step-by-Step Guide on How to Comply with the National Environmental Policy Act runs 475 pages long.REF

The NEPA’s expansive reach presents virtually endless opportunities for bureaucratic wrangling and judicial interference. Green activists exploit judicial review of NEPA procedures to delay or prevent highway, pipeline, electricity transmission, water resource, and broadband upgrades, among other projects. The mere filing of a lawsuit and the resulting delays are often as effective in crippling projects as prevailing in court. The onus is largely on project developers to prove (impossibly) that even far-fetched environmental impacts will not occur.

The likelihood of litigation prompts agencies to prepare voluminous analyses in hopes of staking a defensible position (and avoiding public embarrassment). This creates exhaustive demands for data and protracted delays—and companies trying to secure a federal permit are in no position to complain.

The CEQ implementation rules hold that the text of a final environmental impact statement “shall normally be less than 150 pages and for proposals of unusual scope or complexity shall normally be less than 300 pages.”REF However, between 2013 and 2017, the average length of a final impact statement was 669 pages and required an average of 4.5 years to complete.REF

Reform Efforts

There has not been any comprehensive reform of the NEPA regulations since 1978.REF Instead, more than 35 guidance documents have been issued by various administrations, which have politicized every stage of the environmental review process. Congress has enacted dozens of provisions in various authorization bills to streamline the NEPA for highway and transit projects.REF However, 22 of 34 streamlining provisions for highway projects and 17 of 29 transit provisions were made optional for agencies.REF

A variety of presidential directives have also been issued across the decades, while the broad, aspirational language of the statute has provoked a multitude of lawsuits, and thus an expansive body of case law.REF The quagmire of guidance, regulations, and judicial decrees leaves government officials with virtually unconstrained regulatory discretion.

President Trump has pursued NEPA reforms since his first week in office. Executive Order (EO) 13766REF directed agencies to designate select infrastructure projects as “high priority” for the purpose of expediting permitting reviews. Six months later, EO 13807REF prescribed a policy of “One Federal Decision,” whereby a lead agency is designated to steer the NEPA review and compile a single record of agencies’ actions. The executive order also calls for reducing the processing time for reviews to “not more than an average of approximately two years.” Once the review is completed, authorization to commence construction must be issued within 90 days.

Eight cabinet departments and four agenciesREF signed a memorandum of understanding (MOU) committing to implement the One Federal Decision policy for major infrastructure projects (effective April 10, 2018). The MOU calls for a joint schedule for such projects, preparing a single environmental impact statement and joint record of decision, prioritizing dispute resolution, and completing environmental reviews within two years.REF

EO 13807 also directed the CEQ to develop a list of actions “to enhance and modernize the Federal environmental review and authorization process,”REF including to:

  • Ensure that environmental reviews and authorization decisions involving multiple agencies are conducted in a manner that is concurrent, synchronized, timely, and efficient;
  • Provide for agency use of environmental studies, analyses, and decisions conducted in support of previous federal, state, tribal, or local environmental reviews; and
  • Ensure that agencies apply the NEPA in a manner that reduces unnecessary burdens and delays, including use of CEQ authority to accelerate the review process.REF

The CEQ’s list of proposed actions was published as an advance notice of proposed rulemaking on June 20, 2018,REF with a request for public comment.

The Reforms

The history of the NEPA reflects many of the vexing problems associated with the modern administrative state. The statute’s overly broad aspirational language effectively delegates lawmaking authority to agencies—each of which has crafted NEPA rules of their own. The courts, in turn, have granted considerable deference to agencies’ myriad statutory interpretations, which have expanded their powers. The agencies also adjudicate their own rules, thereby eroding the separation of powers doctrine and basic due-process principles.

Some of the CEQ’s reforms are intended to cut through the NEPA’s hyper-politicized regime and to “modernize and clarify” the NEPA regulations to “facilitate more efficient, effective, and timely NEPA reviews”REF including:

  • Allowing agencies to use documents required by other statutes or prepared by state, tribal, and local agencies to comply with NEPA;
  • Clarifying that agencies should use reliable existing information and resources—and are not required to undertake new scientific and technical research to inform their analyses;
  • Stating explicitly that harm from the failure to comply with the NEPA can be remedied by compliance with the NEPA’s procedural requirements, and a violation of the procedural rules does not create a per se cause of action;
  • Requiring a demonstration of an immediacy of harm (unrelated to a mere violation of statutory procedures) for injunctive relief; and
  • Excluding outside parties from raising claims based on issues they did not raise during the public comment period.

Other reforms codify policies previously implemented by executive order, including designating a lead agency in cases involving multiple agencies, preparing a single environmental impact statement and a joint record of decision in such cases, and imposing a one-year limit for initial assessments and two years for more comprehensive environmental impact statements.

Going forward, the NEPA debate will focus on two of the Trump Administration’s most important reforms—both of which relate, not surprisingly, to vague statutory language that has provoked a rash of costly litigation. They are (1) the extent of the “alternatives” to a proposed action that agencies must consider in a NEPA review, and (2) the range of “effects” that must be assessed in NEPA analyses. As explained below, both bear directly on whether and/or how carbon dioxide, methane, and emissions of other purported greenhouse gases should be incorporated into the NEPA process—perhaps the most contrived means of controlling permitting decisions.

Alternatives

The NEPA directs agencies in preparing environmental impact statements to “study, develop, and describe appropriate alternatives to recommended courses of action,” but does not specify the type or number of alternatives that are adequate for the task.REF The CEQ’s original implementation rules directed agencies to “[r]igorously explore and objectively evaluate all reasonable alternatives and, for alternatives that were eliminated from detailed study, briefly discuss the reasons for their having been eliminated.”REF

Agencies were required to identify a “preferred alternative” as well as to assess a “no action alternative.” Beyond those requirements, there was ambiguity, which both agencies and activists leveraged to manipulate the outcome of the NEPA process. Thus, there was a need for the CEQ to clarify what constitutes a sufficient assessment of reasonable alternatives.

In the new implementation rules, the CEQ deleted “all” before “reasonable alternatives,” in keeping with the actual text of the NEPA.REF As the council noted, there is no necessity for consideration of alternatives to be exhaustive “where the consideration of a spectrum of alternatives allows for the selection of any alternative within that spectrum.”REF These changes are sensible checks on unnecessarily costly and time-consuming assessments. And while activists will undoubtedly continue to challenge the sufficiency of agencies’ alternatives analyses, the new rules should restrict the scope of their claims.

The CEQ also eliminated the requirement for agencies to consider alternatives over which they have no jurisdiction. After all, the purpose of an analysis is to reveal the optimal course of action—which would be thwarted if the “best” option falls outside the agency’s jurisdiction and cannot be adopted.

Perhaps most important, the council has redefined “reasonable alternatives” in the implementing regulations to mean “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 the applicant.”REF Indeed, to consider infeasible alternatives would waste the resources of both agencies and applicants while delaying public health and safety benefits that accrue from new development and infrastructure improvements.

The rulemaking also includes new requirements for soliciting public comment on potential alternatives and impacts to be considered in an environmental impact statement. The solicitation is intended to both ensure informed decision-making and to address policy conflicts before agencies conclude the NEPA process. Therefore, the CEQ is also prohibiting outside parties from raising claims based on issues they did not raise during the public comment period. Allowing agencies to address claims at the front end of the permitting process should help to reduce protracted litigation.

Effects

The NEPA requires agencies to evaluate the environmental impacts and effects of a proposed action, but the statute does not address the scope of such analyses. The original CEQ regulations, on the other hand, distinguished between direct, indirect and cumulative effects. Such a broad scope of effects resulted in unnecessarily expansive and speculative analyses and excessive litigation.REF

The new implementation rules replace “direct,” “indirect,” and “cumulative” with the definition “reasonably foreseeable and hav[ing] a reasonably close causal relationship to the proposed action or alternatives.” Indeed, it is reasonable that agencies refrain from considering effects that are remote in time, geographically remote, the product of a lengthy causal chain, or those that would occur regardless of the proposed action.REF According to the council, a close causal relationship is analogous to “proximate cause” in tort law.

Consequently, the CEQ is effectively eliminating the consideration of “cumulative effects,” correctly concluding that they are, by their nature, highly speculative and many of which, such as potential climate change, are well beyond the control of both agencies and permit applicants. Indeed, determining the geographic and temporal scope of such effects has proven to be, in many cases, more political science than sound science.

As noted by the council, “Excessively lengthy documentation that does not focus on the most meaningful issues for the decision maker’s consideration can lead to encyclopedic documents that include information that is irrelevant or inconsequential to the decision-making process. Instead, agencies should focus their efforts on analyzing effects that are most likely to be potentially significant and be effects that would occur as a result of the agency’s decision.”

The elimination of cumulative effects from consideration under the NEPA is entirely in keeping with the 1983 unanimous U.S. Supreme Court decision in Metropolitan Edison,REF which stated:

The terms “environmental effects” and “environmental impact” in §102(C) [of NEPA] should be read to include a requirement of a reasonably close causal relationship between a change in the physical environment and the effect at issue.

The CEQ has also clarified that the required analyses of “effects” do not include those over which the agency has no authority or those that would occur even without agency action.REF According to the council, “With this proposed change and the proposed elimination of the definition of cumulative impacts, it is CEQ’s intent to focus agencies on analysis of effects that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action.”

This, too, reflects a U.S. Supreme Court ruling, the 2004 case, Public Citizen,REF which stated:

We hold that where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant “cause” of the effect. Hence, under NEPA and the implementing [Council on Environmental Quality] regulations, the agency need not consider these effects in its [Environmental Assessment] when determining whether its action is a “major federal action.”

Climate Change

The CEQ’s elimination of “cumulative” references in NEPA analyses bears directly on the issue of climate change. After all, climate change is purported to result from the buildup of carbon dioxide and other gases in the atmosphere, which is a process of accumulation (i.e., cumulative impact).

As noted in the previous section, the CEQ is precluding consideration in NEPA analyses of effects that are “remote in time, geographically remote, or the product of a lengthy causal chain.”REF Nor should the analyses include effects that the agency has no ability to prevent due to its limited statutory authority or those that would occur regardless of the proposed action.

That should rightfully end consideration of so-called greenhouse gas emissions in the NEPA process.REF Indeed, no single federal action undergoing a NEPA review could possibly alter the climate, so there is no rational basis for incorporating a climate change assessment in permitting.REF As noted by Heritage Foundation scholars, “[E]ven if the U.S. were to cut its CO2 emissions 100 percent, it would have a negligible impact on global warming.”REF

Alas, neither science nor common sense prevented previous administrations from requiring consideration of so-called greenhouse gas emissions in NEPA analyses. For example, the CEQ in 2010 proposed draft guidance for assessing the effects of “greenhouse gas” emissions when a proposed action “would be reasonably anticipated to cause direct emissions of 25,000 metric tons or more of CO2-equivalent GHG emissions on an annual basis.”REF

However, there is no relationship between that volume of emissions and changes in climate; it was selected solely because it is the minimum standard for reporting other types of emissions under the Clean Air Act.

A revised draft of the Obama Administration guidance was released in 2014 that maintained the same reference point for NEPA analyses.REF But the final guidance,REF issued by the Obama Administration four months before the 2016 presidential election, no longer contained a volume reference. Instead, agencies were granted broad discretion to treat any level of projected “GHG” emissions as a proxy for climate change—a decidedly irrational approach. The final guidance also directed agencies to conduct “qualitative” analyses when actual emissions data “are not reasonably available to support calculations for quantitative analyses.”REF

Two months after taking office, President Trump, pursuant to Executive Order 13783,REF directed the Council on Environmental Quality to rescind the Obama Administration guidance, which occurred on April 5, 2017.REF The CEQ proposed replacement guidance on June 26, 2019.REF

The NEPA reforms appear to eclipse, at least in part, the 2019 proposed guidance for “greenhouse gas” emissions. The elimination of “cumulative” and “indirect” effects should virtually eliminate consideration of carbon-dioxide emissions (and others) in NEPA analyses, as does limiting the consideration of effects to those that are “reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives.”

In contrast, the proposed “GHG” emissions guidance leaves room for the inclusion of climate change as a potential decision factor in the NEPA process, stating, “A projection of a proposed action’s direct and reasonably foreseeable indirect GHG emissions may be used as a proxy for assessing potential climate effects.”

That is nonsense, of course. The potential effects of so-called greenhouse gas emissions are inherently speculative; the science is far from settled about the volume of carbon-dioxide emissions (and others)—if any—which would provoke changes in climate. But if such a causal relationship exists, the volume of emissions necessary to provoke it would be global in scale and not attributable to any single agency action—under any circumstance.

The proposed guidance attempts to limit the proxy approach by advising agencies that “GHG” emissions should be considered when “a sufficiently close causal relationship exists between the proposed action and the effect.” But there is no such scenario, so to suggest one exists is irrational.

The CEQ’s proposed criteria for quantifying direct and indirect “GHG” emissions is also irresponsibly vague and thus would grant agencies far too much discretion, that is: “when the amount of those emissions is substantial enough to warrant quantification, and when it is practicable to quantify them using available data and GHG quantification tools.”

In other words, the proposed guidance would effectively leave the decision to agencies whether to include “GHG” emissions in NEPA analyses. In light of the NEPA reforms, the council ought to scrap the “GHG” emissions guidance and leave it to Congress to decide whether to address purported greenhouse gas emissions in NEPA permitting.

Conclusion

Since its passage in 1969, the NEPA has persisted despite dramatic changes in America’s economic, social, political, and environmental landscapes—and despite the enactment of countless other federal, state, and local regulations. Consequently, the NEPA is an anachronism that unduly complicates federal projects, encourages judicial activism, politicizes rulemaking, and blurs distinctions between environmental risks. The 50-year-old act is redundant and should be repealed. Absent congressional leadership to do so, the Trump Administration’s reforms address several of the most problematic elements of the NEPA process.

Diane Katz is Senior Research Fellow for Regulatory Policy in the Thomas A. Roe Institute for Economic Policy Studies, of the Institute for Economic Freedom, at The Heritage Foundation.

Authors

Diane Katz
Diane Katz

Senior Research Fellow in Regulatory Policy