President Biden has signed the Fiscal Responsibility Act (FRA) into law which suspends the debt ceiling into 2024 and avoids a U.S. default. The bill contains several historic reforms to the National Environmental Policy Act (NEPA), legislation bemoaned by industrialists and environmentalists alike for its burdensome requirements for new energy projects. Although the bill is likely to streamline the environmental review process by establishing the first meaningful reforms to NEPA since 1982, the text of the bill could do more to make litigation less disruptive and reduce the number of projects beholden to NEPA’s burdensome requirements. Nevertheless, House Republicans were wise to take the win.
The debt ceiling permitting provisions seem to mostly codify regulations released in 2022 by the Council on Environmental Quality (CEQ), which has always been responsible for overseeing the implementation of NEPA regulations and its procedural requirements. However, the CEQ’s regulations contain many opportunities for “senior agency officials” to work around the rules and extend permitting timelines. The permitting provisions of the FRA will make it harder for bureaucrats to undo or lengthen the time and page limits for finishing environmental reviews, likely speeding up the permitting process. By writing these limits into law, it would become the responsibility of Congress to make further changes, rather than an unaccountable executive branch agency.
The reforms included in the bill will help expedite environmental projects by codifying page-length requirements previously established by the CEQ. The FRA requires environmental assessments to be less than 75 pages, environmental impact statements (EIS) documents to be less than 150 pages, and EIS documents of “extraordinary complexity” to be less than 300 pages. Under CEQ regulations, senior agency officials could override these requirements. Although these are still massive documents, especially for laypeople, it’s a huge improvement over the average final EIS length of 661 pages (not including appendices) reported between 2013 and 2018.
The bill also regulates the time period for permitting reviews, requiring that agencies finish environmental assessments within a year for simple projects unlikely to have a “reasonably foreseeable” effect on the quality of “the human environment.” More complex projects that may have environmental effects must have their EIS completed within two years. If those deadlines are not met, applicants have a new right to petition the courts for redress, which is an extraordinary counterbalance to the protracted litigation such projects often face from environmental activist groups.
While these target timelines could help speed up the process for most projects, they are not specific enough to significantly impact more controversial projects which will likely continue to face drawn-out battles. To be more effective, these timelines ought to include the preparation time in advance of an EIS or implementation afterward, which slows projects down. Additionally, the debt ceiling permitting provisions include language that allows the lead agency to extend these deadlines “in consultation with the applicant” — of course, that’s no guarantee the lead agency will listen to the applicant. There is currently no statutory cap on completion dates, but CEQ regulations in 2022 require these timelines unless a “senior agency official” approves a longer period in writing. Such stipulations leave a concerning allowance for potential bureaucratic delays.
The bill also requires that if there are “two or more participating Federal agencies,” one of them must be the “lead agency” to be determined either by the agencies themselves or by the CEQ. Designating one agency as the lead agency for individual projects could help coordinate and streamline the process. Because many agencies have their fingers in the permitting pie, the CEQ may step in to settle any tug-of-war to allow permitting to proceed.
In addition, the bill establishes a new right for applicants to petition the courts for violations of the one and two-year timelines for finishing environmental assessments and EISs. This may prove an important counterweight to the power of environmental activists to demand “injunctive relief” in the courts. However, the bill misses an opportunity to make lawsuits less disruptive to the permitting process. The U.S.’s general six-year statute of limitations is not shortened specifically for NEPA, which means activists can still ask judges to halt projects up to six years after the agency has finished its NEPA review. Agencies may be required to redo their EIS or environmental assessment after a project has broken ground. The bill does little to assuage this source of uncertainty for project developers.
The debt ceiling permitting provisions could also have expanded the number and type of projects eligible for categorical exclusions, which are actions that typically have no significant effect on the environment and don’t have to run the gauntlet of environmental assessments or EISs. By broadening the number of projects exempt from NEPA analysis, the bill could have significantly reduced projects’ production time.
The revisions to NEPA are a step in the right direction for transparency and make it much harder for the CEQ to reverse them unilaterally. But the compromise misses the opportunity to make litigation less disruptive and reduce the number of projects that need stringent NEPA evaluation. Lawmakers are right to celebrate the first meaningful reforms to NEPA in decades, but there’s much left to do to combat these remaining inefficiencies.