Simplifying NEPA Regulations

On July 15, 2020 President Trump announced that his administration was moving forward with rules that would amend the way the 50-year old National Environmental Policy Act (NEPA) is implemented. It is far from clear what the outcome of this effort will be once the new Congress is in place, but clearly many view this as a direct assault on a critically important piece of environmental legislation. NEPA has been a vital guarantor that projects will be thoughtfully evaluated for their environmental and community impacts, and that broad stakeholder interests are weighed.

On the other hand, and importantly, there is absolutely no doubt that the project development process in this country is an administrative and regulatory nightmare. Laws and regulations have been put in place, including NEPA, which are not just onerous to comply with, but which can be used to delay projects for not just years but decades. And that is in addition to the almost inevitable legal challenges that projects can face even after a complete review and regulatory sign-off is achieved. Today’s Wall Street Journal editorial, Trump’s New Chant: Build the Road”, noted that even in 1981, the time expectation for reviews under NEPA, even for large complex projects, was about 12 months. It is now taking an average of 4.5 years, with average documentation running to 661 pages. Too often, with good intentions, legislation is passed imposing requirements and then the implications of the burdens or the consequences are never reviewed. This is a good case in point.

The rules put in place and then implemented through excruciatingly slow timelines and sclerotic agencies have made it almost impossible to get projects done. That burden affects all projects, both good and bad. This adds dramatically to cost and arguably stifles innovation where tests around potential impacts are particularly hard to work through with new methods and technologies. Smaller developers cannot weather these timelines and delays, and that too impacts project options.

So, despite some suspicions about the underlying Trump Administration motivations, we do think that it is worthwhile serious contemplating the specific changes being proposed. As we understand it, these new rules include provisions, among others to[1]:

Add clarity to the appropriate “level” of NEPA review – i.e., whether an EIS, EA or “categorical exclusion” is appropriate for any particular project, and revise the definition of projects eligible for categorical exemption
Revise the definition of “effects” of a project
Revise the needs statements and revised the definition of ‘reasonable alternatives’
Change requirements around legal reviews and challenges to set both more finite timelines and documentary requirements

These will, if implemented, without question open the door for breakdown of the firewalls that keep projects – good and bad – from moving forward quickly. But we do think that streamlining and clarity of regulations has merit. This country has made it very difficult to build projects on a reasonable schedule and cost. We will need to build lots of new infrastructure projects in the near future – to replace crumbling infrastructure, introduce new technologies and mitigate the enormous challenges of climate change. We will need to do that quickly and cost effectively. Some considerable lessening of the time and cost associated with NEPA and the regulatory and legal burdens that face projects is well warranted.

[1] National Law Review, January 16, 2020; https://www.natlawreview.com/article/trump-administration-proposes-unprecedented-and-comprehensive-revisions-to-nepa