CEQ’s Phase I Rule Sets Back Trump Administration Changes to NEPA Regulations

On April 19, 2022, the White House Council on Environmental Quality (CEQ) finalized the first of two planned phases to update their National Environmental Policy Act (NEPA) implementing regulations. The Phase I Rule focuses on a limited set of provisions CEQ identified as high priorities for swift action to avoid near-term implementation challenges the agencies were facing from the Trump Administration’s 2020 Rule. And while we can anticipate more sweeping changes in the upcoming Phase II proposal, Phase I targeted provisions that CEQ believed were good candidates for simply reverting to the language promulgated in 1978.

The Phase I Final Rule largely tracked the Proposed Rule we discussed in October 2021, rolling back changes from the 2020 Rule with respect to defining the effects federal agencies must evaluate, the scope of each agency’s separate NEPA implementing regulations, and how agencies define the purpose and need of a project.

Notably, the Phase I Rule reinstates the 1978 definitions of direct and indirect effects and cumulative impacts. The Trump Administration’s 2020 Rule had eliminated the requirement for agencies to evaluate “cumulative impacts”—the incremental impacts of a project when considered in the context of past, present, and reasonably foreseeable future projects. Critics of that change argued that it would constrain the agencies’ evaluation of a project’s impacts on greenhouse gas (GHG) emissions and climate change as well as the effects on communities that have historically experienced a disproportionate share of environmental impacts.

In its response to comments on the Proposed Rule, CEQ rejected comments suggesting that reinstating the cumulative impacts would create excessive permitting delays and that climate change impacts are remote and indiscernible. CEQ explained that analysis of GHG emissions and the effects of climate change is critical in NEPA reviews and enables agencies to conduct a robust assessment of project alternatives.

The Phase I Rule does not impose an express requirement for agencies to evaluate climate change; nor does it provide any guidance as to how agencies are to conduct such an evaluation. CEQ explained that it will consider climate change issues further during the Phase II rulemaking process.

CEQ announced that it will issue a Phase II proposal in “the coming months.” Phase II is expected to address a broader set of issues identified through a top to bottom review of the regulations with an eye towards implementing the Biden Administration’s whole-of-government approach to climate change and strong commitments to environmental justice, among other issues. The Phase II proposal will likely revert additional provisions to their 1978 form. On the other hand, CEQ may propose to keep certain streamlining measures in response to concerns that the permitting and review process must be improved and made more efficient if the infrastructure build-out needed for the energy transition is to be realized.

Interested and affected parties should evaluate these developments with their environmental counsel. For additional information, please contact the authors.

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post 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.