What Did CEQ Do?

Monday, September 14, 2020

Acting in response to Executive Order No. 13807, Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure, the Council on Environmental Quality (CEQ) rewrote the governmentwide regulations implementing the National Environmental Policy Act (NEPA) this year. CEQ published its proposal to substantially amend the NEPA rule on January 10, 2020, and published its final rule on July 16, 2020 (85 Fed. Reg. 43304). The new rule becomes effective today, September 14, 2020, and CEQ added language to the final rule to provide that it will apply directly to federal agency actions and preempt all “inconsistent” agency procedures as of that date.

White HouseThe previous regulations, adopted in 1978, have served as the foundation for agency regulations, administrative decisions, court decisions, guidance documents, manuals, and technical resources informing a vast body of administrative law that affects tens of thousands of federal decisions each year. Because of the importance of the anticipated changes, in February, ELI published a Practitioners’ Guide to the Proposed NEPA Regulations. Now that the rule has been finalized, this blog highlights some of the important changes.

The preamble to the final rule contains an important warning: “While the final rule retains, in large part, the numbering scheme used in the 1978 regulations, the final rule comprehensively updates the prior regulations. . . . Assumptions should not be made concerning the degree of change to, similarity to, or any interpretation of the prior version of the regulations.”

Indeed, the law’s reach has been changed and constrained in significant ways.

  • As in the proposed rule, the final rule eliminates provisions requiring federal agencies to consider and evaluate the cumulative and indirect impacts of their proposed actions. CEQ redefined “effects” to eliminate any reference to “cumulative” and “indirect” effects. The term “cumulative” has been excised from every point in the rule, appearing only in a new sentence stating, “Cumulative impact, defined in 40 C.F.R. 1508.7 (1978), is repealed.” CEQ states that agencies may consider only effects that are “reasonably foreseeable and have a reasonably close causal relationship” to the proposal, and further states that this is analogous to “proximate cause” (but not to mere but-for causation) in tort law. CEQ says that it is simplifying the definition and reducing confusion. The changes portend, among other things, that both consideration of climate change and environmental justice effects may be more uncertain in any future NEPA analysis.
  • In the final rule, CEQ made one small addition—not to the definition of effects, but to the section defining how an environmental impact statement should characterize the affected environment: “to the extent environmental trends or planned actions in the area(s) are reasonably foreseeable, the agency should include them in the discussion of the affected environment,” rather than as environmental consequences. 85 Fed. Reg. at 43331. This may allow circumscribed consideration of some formerly cumulative impacts: “Trends determined to be a consequence of climate change would be characterized in the baseline analysis of the affected environment rather than as an effect of the action.” Id.
  • In contradistinction to the long-standing NEPA rules, the rule will prevent agencies from considering alternatives not within their own jurisdiction. CEQ, in the rule, interprets the U.S. Supreme Court’s decision in Department of Transportation v. Public Citizen, 541 U.S. 752 (2004), as the basis for CEQ’s decision to prohibit agencies from analyzing or considering “any effects that the agency has no authority to prevent.” In its response to comments document, CEQ also says, “Where a project is developed by a private sponsor, alternatives that result in changes to project design, technology, or locations must not render the project economically non-viable.” Response to Comments, at p. 565.
  • The final rule provides that a “major federal action” and the “significance” of its effects are two separate determinations, rather than one as under the 1978 regulations. Thus, a minor federal action with a significant effect on the human environment would not be within the statute’s requirements. The rule also excludes from the definition of major federal actions: actions by agencies that are not subject to discretion, actions that do not constitute “final agency actions” under the Administrative Procedure Act, actions whose effects are located “entirely” outside the jurisdiction of the United States, and numerous federal funding programs where federal agencies exercise minimal control or responsibility over the outcome. 40 C.F.R. 1508.1(q). The “final agency action” exclusion may undercut the basis for “programmatic” environmental impact statements, and the others are likely to raise legal issues that, in the past, would have been dealt with chiefly by agencies defining categorical exclusions—a process that requires public comment.
  • The rule allows applicants themselves to prepare EISs and EAs (under guidelines from federal officials and ultimately approved by a federal official). It no longer requires the lead agency to select the contractors performing EISs and EAs, and removes existing conflict-of-interest requirements for contractors—substituting a “disclosure statement . . . that specifies any financial or other interest in the outcome of the action.”
  • The rule removes almost all references to the policy provisions of NEPA (including but not limited to former 40 C.F.R. 1500.2) and says that the law is entirely procedural. It states, “The purpose and function of NEPA is satisfied if Federal agencies have considered relevant information, and the public has been informed regarding the decision-making process.” 40 C.F.R. 1500.1(a). The rule specifically limits agencies’ integration of the policies of the Act to compliance with the NEPA “procedures.”
  • The rule requires the lead federal agency to issue a “certification” at the end of the NEPA process that it has adequately considered all “alternatives, information, and analyses submitted by public commenters.” While the proposed rule stated that this self-certification would create a “conclusive presumption” binding on the courts, the final rule makes this a rebuttable presumption; and CEQ asserts its “intention” that this can only be overcome by “clear and convincing evidence that an agency has not properly discharged its duties.” 85 Fed. Reg. at 43314-15.
  • As in the proposal, the final rule sets firm time limits (two years for EIS; one year for EA) and page limits (150 for EIS, 300 if unusually complex; 75 for EA); these schedules and page limits may be adjusted by the responsible federal official.
  • The rule would allow a wider use of “functional equivalent” substitutes for NEPA documents, allowing agencies to substitute other procedures for EAs and EISs. It would allow an agency to determine in its NEPA procedures that its regulatory processes or documents could satisfy “some or all of the requirements” of the regulations, and substitute them, subject to disclosure of which requirements are satisfied. 40 C.F.R. 1506.9, 1507.3(c)(5). CEQ did not finalize its proposal for a three-part test for functional equivalence.
  • The final rule says agencies “are not required to undertake new scientific and technical research to inform their analyses” and shall rely on “existing data and resources.” This provision would represent a substantial change if interpreted to deny the need for fieldwork or study of environments that are not adequately covered by “existing data and resources.” There are many environments in which existing scientific data are incomplete to support decisions, even though the scientific methodologies to obtain such data are adequate. CEQ did add to the final rule a proviso that “nothing in this section is intended to prohibit agencies from compliance with the requirements of other statutes pertaining to scientific and technical research” 40 C.F.R. 1502.23.
  • Finally, the rule expressly preempts existing and future NEPA requirements applied by multiple federal agencies, thus effectively setting a ceiling on scope and procedure of federal environmental review: “Agency NEPA procedures shall not impose additional procedures or requirements beyond those set forth in the[se] regulations,” except where needed to improve agency efficiency or as otherwise required by law. Federal agencies have one year to propose revisions to replace their agency NEPA procedures. 40 C.F.R. 1507.3(b).

Almost all of CEQ’s guidance documents will be revoked, as incompatible with the new regulations. This will create substantial interpretive and administrative issues in dealing with such important topics and resources as Environmental Justice, Mitigation, Cumulative Impacts, Categorical Exclusions, CEQ’s Citizen Handbook, and others. The development of new guidance documents is likely to be a laborious and contentious process—particularly with the stronger OMB oversight of guidance documents and the public involvement provisions of recent Executive Orders, such as E.O. No. 13891, Promoting the Rule of Law Through Improved Agency Guidance Documents.

It is important to note that the new rule is likely to have a profound effect on environmental justice (EJ) activities across federal decisionmaking. EJ analysis under NEPA up until now has expressly required an understanding of both existing and foreseeable impacts that affect a community and its health. CEQ, Environmental Justice Guidance Under the National Environmental Policy Act (1997) (EJ Guidance) (“Agencies should consider relevant public health data and industry data concerning the potential for multiple or cumulative exposure to human health or environmental hazards in the affected population and historical patterns of exposure to environmental hazards . . . . Agencies should consider these multiple, or cumulative effects, even if certain effects are not within the control or subject to the discretion of the agency proposing the action.”); see also U.S. EPA, Final Guidance for Incorporating Environmental Justice Concerns in EPA's NEPA Compliance Analyses (1998) (“EPA NEPA analyses must consider the cumulative effects on a community by addressing the full range of consequences of a proposed action as well as other environmental stresses which may be affecting the community.”). But it is far from clear that the new regulations will provide a basis for a similar level of review. The current EJ Guidance document will be revoked, says CEQ, along with other guidance documents, because it is inconsistent with the new rule.

In adopting the new NEPA rule, CEQ stated that it acted in compliance with E.O. 12898 because the rule itself would not cause any environmental impacts, and thus no disproportionately high and adverse impacts. 85 Fed. Reg. at 43356. CEQ, in its preamble discussion of the dropping of “cumulative impact” definitions and requirements also provided no discussion of the effect of this change on the “disproportionately high and adverse impact” analysis. 85 Fed. Reg. at 43351. And in its response to comments document, CEQ said that if it withdraws the EJ Guidance, this will “not create confusion” nor “reduce the quality of analysis.” Response to Comments, at p. 571. In sum, CEQ has largely deferred any consideration of EJ to some future date when individual federal agencies attempt to apply the new regulations and communities attempt to discern their rights in the absence of a specific regulation and guidance document.