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August 23, 2017

President Trump Takes His Turn at Expediting Environmental Reviews and Permitting of Infrastructure Projects


The National Environmental Policy Act, 42 USC § 4321 et seq. (NEPA) was signed into law by President Richard Nixon on January 1, 1970. NEPA ushered in the now familiar requirement that agencies take a "hard look" at the environmental impacts associated with major federal actions. Since 1970, the environmental assessment process and associated public review and comment have expanded and the mean time between the Notice of Intent to prepare an Environmental Impact Statement (EIS) and the Notice of Availability of a final EIS presently stands at approximately five years. As a result, Congress and the Executive Brach have engaged in countless reform efforts designed to expedite and streamline the environmental reviews mandated by NEPA. In the past few years these efforts seemed to take on new urgency and resulted in several executive orders, adoption of Title XLI of the Fixing America's Surface Transportation Act of 2015 (FAST Act) and issuance of numerous reports and recommendations from the President's Council of Environmental Quality (CEQ). The FAST Act focused on expediting public and private infrastructure projects by creating the Federal Permitting Improvement Steering Council (FPISC), requiring use of a federal "dashboard" to track progress on certain covered projects, and requiring use of "best practices" for impact assessment and environmental permitting across all federal agencies.

President Donald Trump continued this trend on August 15, 2017 by issuing an Executive Order (EO) on "Establishing Discipline and Accountability in the Environmental Review and Permitting Process of Infrastructure". Building upon an argument that can be traced back to President Gerald Ford, President Trump's EO claims that the "Federal Government, as a whole, must change the way it processes environmental reviews and authorization decisions." In an effort to transform the NEPA process and associated permit decisions, the EO calls upon the Office of Management and Budget (OMB) to coordinate with FPISC and establish goals for processing of environmental reviews and authorizations. OMB is also given the job of tracking and incentivizing improved performance of all agencies.

President Trump's EO builds upon and refines past reform efforts in several ways. First, the EO establishes an aspirational goal that "processing of environmental reviews and authorization decisions for new major infrastructure should be reduced to not more than an average of approximately 2 years . . ." OMB is required to track agency progress on a quarterly basis and impose "appropriate penalties" within the limits of existing law including recession of federal funds from state agencies that fail to perform in a timely manner. Next, the EO attempts to advance the goal of one-stop shopping by creating a new One Federal Decision process. OMB and CEQ are charged with implementing this proposal by promptly developing a protocol so that project sponsors can identify a single lead agency to serve as a clearing house for all information requests. The EO introduces the requirement that federal agencies document their decision making in a single Record of Decision (ROD). The requirement for a single, multi-agency ROD has the potential to save time and avoid uncertainty. However, agencies occasionally have differing views on topics discussed in a ROD such as mitigation of unavoidable impacts. When the proposed action is the issuance of a permit or other approval, the single ROD requirement has the potential to trigger intensive negotiations and lengthy RODs as permitting agencies attempt to delineate detailed mitigation and monitoring measures to be imposed upon the sponsoring agency. The EO also revises several details about how the CEQ's existing dashboard will operate and opens up the dashboard to any project at the discretion of the Executive Director of FPISC.

President Trump's EO also introduces an untested idea for dealing with the frequently contentious issue of routing energy transmission infrastructure. The Departments of Interior and Agriculture have been ordered to work together to identify energy right-of-way corridors on Federal land that would be eligible for expedited review. It is unclear how this requirement will work in practice but given what appears to be mounting demand for transmission capacity, and the unique challenges that long linear projects face in the environmental review process, project sponsors should welcome any approach that provides relief from the present morass.

Finally, the EO rescinds the Federal Flood Management Standard that was put in place by executive action following Superstorm Sandy and required all federal actions to meet specified levels of resiliency. Considering Federal involvement in roads, sewer systems, ports and costal military installations, the decision to walk away from a unified approach to dealing with rising sea levels and storm flooding is already controversial. Indeed, as demonstrated by several recent decisions where courts found that agencies failed to adequately assess climate-related impacts when preparing an EIS, project sponsors who ignore these issues may put their projects in peril. By jettisoning a uniform standard, the EO could have the unintended consequence of introducing needless uncertainty to any environmental impact analysis that needs to address resiliency.

The core reforms contained in the EO build upon past efforts and have the potential to help reduce delays and unpredictability that have become part of the environmental review and permitting process. Unfortunately, federal agencies are all being asked to do more with less and many key appointments at agencies that are essential to the success of this EO have yet to be made. For example, senior positions at the FPISC and CEQ remain open.

The EO adds to these challenges by giving FPISC, CEQ, and OMB, several assignments to develop new implementing frameworks with aggressive deadlines—the success of these initiatives will depend on whether they can be meaningfully implemented on the ground with tangible results. Because litigation over major federal infrastructure decisions seems almost inevitable and any shortcuts while developing the administrative record for an EIS or permit decision can have disastrous consequences for the project sponsor, lack of resources could create problems. Nevertheless, with time and sufficient management attention devoted to improving environmental impact review and related permitting issues (not merely expediting decisions), agencies should be able to develop innovative procedures and new practices that take the necessary "hard look" at environmental impacts and make decisions that withstand legal challenges in two years or less. In the meantime, clients with environmental review issues or major permit applications on the horizon should closely monitor how agencies respond to this EO and we should all be checking the CEQ dashboard.

© 2017 Arnold & Porter Kaye Scholer LLP. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.