On April 19, 2022, the Biden administration finalized a new rule (“Final Rule”) rolling back the Trump administration’s 2020 changes limiting the scope of the National Environmental Policy Act (NEPA). The Final Rule re-establishes the prior broader scope of NEPA review, restores key provisions of NEPA that existed prior to 2020, and requires a more rigorous environmental review of major federal projects like pipelines and highways, including the projects authorized in the $1.2 trillion Infrastructure Bill that President Biden signed in November 2021, commonly referred to as the “Infrastructure Investment and Jobs Act” (see this past Downey Brand alert regarding the Act’s key provisions and this alert regarding the NEPA streamlining provisions authorized under the Infrastructure Bill for key environmental and infrastructure projects).
In 2020, the Trump administration, citing a desire to create jobs and accelerate infrastructure projects, made a variety of substantive and procedural changes to NEPA, including narrowing the scope of required review to the “direct effects” of the proposed project. This resulted in downplaying certain cumulative effects of a project, including climate change. The new Final Rule, which is set to take effect in late May 2022, requires NEPA documents to consider indirect and cumulative impacts in addition to direct impacts, including effects on climate change and greenhouse gasses, consistent with pre-Trump requirements. Unlike the 2020 Rule, which narrowed the factors an agency could consider in defining the “purpose and need statement” of a project, the Final Rule provides agencies more flexibility and “discretion to consider a variety of factors when assessing an application for an authorization, removing the requirement that an agency base the purpose and need on the goals of an applicant and the agency’s statutory authority.” As the purpose and need statement of a project help agencies define things like which alternative actions are considered in the NEPA document, this flexibility now allows agencies and affected communities to work together to mitigate or avoid negative effects on the environment by allowing the analysis of a broader range of project alternatives. Further, the Final Rule allows individual agencies to create even stricter NEPA rules as they see fit. Notably, the Final Rule did not change the Trump-imposed two-year time limit to complete any environmental impact statements or the one-year time limit to complete less intensive environmental assessments.
This move is part of the first phase of the administration’s effort to strengthen environmental reviews for major federal projects, which will next turn to narrower issues like climate change and environmental justice.
The impact of this reversal in course remains to be seen, and many industry groups are concerned the Final Rule will lead to unnecessary costs, delays, and “green tape.” Environmental groups, on the other hand, consider this reversal a victory. As per Brenda Mallory, the White House Council on Environmental Quality’s Chairperson, the aim of the Final Rule was to “[r]estor[e] these basic community safeguards [and] provide regulatory certainty, reduce conflict and help ensure that projects get built right the first time . . . . Patching these holes in the environmental review process will help projects get built faster, be more resilient and provide greater benefits to people who live nearby.” In the interim, we can expect additional confusion for project applicants as portions of Trump’s 2020 changes to NEPA remain in effect and new litigation is expected surrounding the Final Rule.