Improving federal environmental impact assessments
Last week, the Trump administration proposed significant improvements to how agencies implement one of the most important laws you’ve never heard of: the National Environmental Policy Act. Passed in 1970, “NEPA” requires federal agencies to conduct extensive environmental impact studies before they do virtually anything that could have a significant impact on the environment. That includes everything from Forest Service management plans to federal funds for major highway projects to the permits that agencies issue for pipelines and coal mines.
Under a Carter-era regulation, NEPA has grown into a behemoth of red tape. Environmental reviews average 4.5 years, and seven years for highway projects—just to produce a single Environmental Impact Statement (or “EIS”). That’s years of bureaucratic process before a single bulldozer breaks ground. Of course, the resulting EISs often run into the thousands of pages.
NEPA’s basic purpose of ensuring that agency decisionmakers are cognizant of the potential environmental impacts of their actions thus falls by the wayside. Americans spend billions of dollars every year for agencies to create encyclopedias of environmental facts and figures far more detailed than is useful for agency decisionmakers. In practice, the purpose of NEPA has become litigation defense—as activist federal courts and environmental advocacy groups have learned to use NEPA as a way to slow down or block large projects on the most minute technicalities.
The negative impact on job creation is incalculable. Companies have to be prepared to lose hundreds of millions of dollars on a single project because of delays that are not only lengthy but totally unpredictable. NEPA thus creates third-world levels of risk for large-scale investments, often to the detriment of the environment itself, as even ecological restoration projects and renewable energy projects drown in NEPA’s ocean of red tape.
Because all projects suffer from a NEPA process that has grown far beyond what the statute itself requires, the Obama administration took the initiative with important procedural improvements such as FAST-41, which established a Permitting Council to oversee the federal authorization process for the largest infrastructure projects. The Trump administration took these process improvements to a new level with its One Federal Decision initiative in Executive Order 13807 (August 2017).
The proposed rulemaking, published by the White House Council on Environmental Quality last week, would codify key elements of the One Federal Decision policy. EISs would have to be completed in no more than two years, and would have to be no longer than 150 pages except in rare cases. Federal agencies would be required to agree on a joint project schedule at the outset, so that companies and workers can have some certainty about when key decisions affecting their future will be made.
Other important improvements would help return the NEPA process closer to what Congress intended when it first enacted the law. Refined definitions of key terms would ensure that NEPA is triggered by actions that are truly federal, not just tangential federal support of state or local projects where the federal agency has no real control over outcomes. Proposed changes would clarify that agencies must study their own alternatives, not those of the project applicants, a source of major delays in years past.
Likewise, proposed changes would require agencies to study the reasonably foreseeable effects of their actions, rather than speculating about potential impacts far downstream or upstream from the project itself, where the agency has no authority to prevent the potential effects or the effects would occur regardless of the federal action. Agencies would no longer have to spend copious amounts of time studying global effects to which the proposed action has only a negligible contribution, helping to leave those larger policy issues—such as climate change—to Congress and the president, where they belong.
Another important change would require stakeholders to inform agencies of any objections they may have to the EIS while the agency can still act on them, rather than waiting for a lawsuit to throw the kitchen sink at the agency action as many environmental advocacy groups do today for no other reason than to create more delays.
NEPA is one of our country’s most important laws. It has made federal agencies and the private projects they oversee much more environmentally sustainable, helping to preserve the blessings of our natural environment for future generations.
But after 40 years, it has become clear that NEPA’s benefits can be enhanced while significantly reducing the unnecessary burdens and costs that the NEPA process imposes on the public. The Trump administration’s common sense proposals to improve the NEPA process will help ensure the continued success of this important law long into the future.
Mario Loyola is senior fellow at the Competitive Enterprise Institute. From 2017 to 2019, he was associate director for regulatory reform at the White House Council on Environmental Quality.