Late last month, the White House Council on Environmental Quality (CEQ) dropped a regulatory bomb that threatens to blow up infrastructure permitting reform. The proposal, known as “Phase 2” revisions to National Environmental Policy Act (NEPA) regulations, represents a dramatic attempt to undermine bipartisan Congressional efforts to streamline energy and infrastructure project reviews. If finalized, this rule will lead to longer approval times, increased litigation risk, and mounting uncertainty surrounding the steps to obtaining a permit, all while throwing in doubt the viability of America’s ongoing clean energy transition.
For over 50 years, NEPA has required federal agencies to analyze potential environmental impacts of major projects before making permitting decisions. However, the statute only mandates a process, not specific environmental outcomes. As the Supreme Court has repeatedly affirmed, NEPA is a procedural statute that does not elevate environmental concerns over other policy objectives.
Yet CEQ’s proposal seems to interpret NEPA otherwise, imposing ambiguous new requirements related to climate change, environmental justice, and especially mitigation. The Phase 2 proposal likewise introduces many new vague terms and aspirational goals that lack clear definitions or standards. What constitutes “meaningful” public engagement? When are “global” climate effects relevant to a pipeline or lease decision? How does an agency apply the proper “environmental justice” lens?
By injecting subjectivity and unpredictability into an already arduous process, the Biden Administration is opening the floodgates to litigation over nearly every major project review. The inevitable result will be long delays in permitting critical infrastructure.
The proposal’s climate mandates are especially problematic. If enacted, agencies would give preferential treatment to “environmentally preferable” alternatives, which presumably means renewables. This allows the Biden Administration to put a thumb on the scale for politically favored projects, while imposing imprecise and potentially unlimited new burdens on disfavored ones, like pipelines.
Also concerning are new requirements around environmental justice, an amorphous term lifted from progressive executive orders and academia. Incorporating such an ill-defined concept into NEPA will create a litigation magnet. If finalized, opponents will have broad grounds to argue agencies failed to adequately address environmental justice or provide “meaningful” engagement. More delay and obstruction are sure to follow.
Perhaps most alarming of all, CEQ seemingly interprets NEPA as a substantive statute by mandating enforceable and ongoing mitigation measures. This is potentially unlawful, as it represents a power grab far beyond NEPA’s intended scope.
To its credit, CEQ does propose some modest expansions as to when agencies may establish new categorical exclusions (CEs), which allow projects to forego extensive NEPA review. Yet, the proposal also allows CEs to be scaled back based on a vague new definition of “extraordinary circumstances,” which invites abuse by agencies to block disfavored projects. So much for streamlining.
Finally, new provisions encouraging courts to closely scrutinize agency data and projections provide yet another avenue for lawsuits aimed at derailing permitting decisions.
All of this directly contravenes the landmark Fiscal Responsibility Act of 2023. Passed on a bipartisan basis, the law raising the nation’s debt limit codified NEPA streamlining reforms on issues like empowering one agency to lead reviews, setting timeline expectations, and limiting the number and scope of alternatives that must be studied. Now the CEQ is ignoring clear Congressional intent and doubling down on red tape instead.
The likely result of finalizing CEQ’s proposal is infrastructure investment will be held up as projects face years of delays from protracted reviews and court battles. Billions in productive capital could be squandered while lawyers spar over environmental justice concerns that may not even benefit marginalized communities. Critical maintenance and upgrades will be postponed as agencies sink under the burden of new analytical quagmires.
Yet somehow the White House maintains a straight face when it claims the Phase 2 rule will “accelerate environmental reviews.” Don’t believe it. The Biden Administration is waging all-out war on American infrastructure and energy projects, all while ignoring sensible, bipartisan agreement on the need to speed up permitting.
The White House should work with Congress to fulfill NEPA’s objectives, not sabotage them. CEQ’s problematic proposal should be rewritten to conform with the spirit and intent of the first update to NEPA since it was enacted in 1970, and bolster rather than upend fragile but promising bipartisan momentum toward more fundamental permitting reforms. If CEQ doesn’t alter course, don’t be surprised if the courts step in and change course for them.
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