In his 2018 State of the Union Address, President Trump underscored his administration’s continued desire to roll back environmental regulations, with an emphasis on those governing infrastructure projects. According to a draft document obtained by the Washington Post, the White House is also considering major revisions to the National Environmental Policy Act (NEPA), one of the nation’s preeminent environmental statutes. The draft document outlines extensive amendments to the statute and related permitting regulations and processes, many of which purport to streamline the environmental review process and deliver infrastructure projects “in a less costly and more time effective manner.”[1]

Signed into law by President Nixon on January 1, 1970, NEPA was initiated in response to an overwhelming national sentiment that federal agencies should take the lead in protecting the environment. For projects led by or permitted by federal agencies, located on federal land, or involving federal funding, NEPA establishes environmental policy, provides an interdisciplinary framework for environmental planning, and contains action-forcing procedures to ensure that federal decision-makers account for environmental factors.[2]

Efforts to improve the functionality of federal environmental reviews, and associated permitting, are not new. During the previous Administration, President Obama issued an Executive Order in 2012, which focused on improvement of federal permitting, and the previous Congress passed reforms as part of the Fixing America’s Surface Transportation (FAST) Act, which was enacted in December 2015 and subsequently implemented by the Obama Administration. Both sets of measures attempted to balance streamlining efforts with other aims such as environmental protection and community engagement. Failure to strike that balance can slow such streamlining efforts if not in Congress, then in the courts.

Major Revisions Possible

NEPA critics contend that the statute produces inefficiencies, often claiming that layers of federal review are redundant or current standards are futile and pointing to requirements like the alternatives analysis, that sometimes requires agencies to consider project alternatives that are outside of the agency’s legal jurisdiction.[3]

The Trump Administration’s Draft Infrastructure Legislative Outline suggests a host of statutory and regulatory revisions that to eliminate these perceived inefficiencies associated with development of energy, highway, rail, transit and other projects:

• Creating a new “One Agency, One Decision” structure for environmental reviews to encourage collaboration and effective communication. A Federal Permitting Improvement Steering Council would be subject to deadlines and required to either grant agencies an extension to the deadlines or reassign the permit decisions to the lead Federal agency.
• Eliminating redundancies by removing multiple reviews by multiple agencies.
• Delegating more responsibilities to states.
• Providing for additional provisions to facilitate environmental reviews across the applicable federal and state agencies.
• Authorizing pilot programs through which agencies may experiment with innovative approaches to environmental reviews while enhancing environmental protections.
• Reexamining certain judicial review standards to ensure that issues are quickly resolved.

Key proposals include shortening the NEPA review period to two years or less (21 months for completing project reviews and three months for permit decisions). Also, while NEPA currently requires a range of project alternatives to be analyzed at similar levels of detail, this proposal would limit the range of project alternatives being studied to those that are “actually legally, technically and economically feasible.”[4]

Renewable energy project developers will want to closely follow a stated goal to create incentives for enhanced impact mitigation, noting that

[e]stablishing procedures that expedite environmental or permitting reviews for projects that enhance the environment through mitigation, design, or other means would provide incentives for project sponsors to propose more environmentally beneficial projects.

This would streamline the environmental and permitting review process for those projects that demonstrate an improvement to the environment.[5]

While it remains to be seen whether this is significant, in theory such a revision may allow renewable energy project developers to take credit for the carbon reductions brought about by their project, perhaps mitigating the overall environmental footprint attributed to their project via NEPA.

President Trump’s Focus on Infrastructure

In his recent State of the Union Address, President Trump voiced a clarion call for Congressional action on infrastructure projects, outlining four key components:

1. A bill that “generates at least $1.5 trillion.” This does not necessarily mean $1.5 trillion in government funding; rather, “generates” implies, based on a series of assumptions, that the bill would mobilize that level of investment across different pools of capital.
2. The President named the pools of capital he hopes will be leveraged by an infrastructure bill: state, local, and private sector monies. In including the last category, the President included the caveat of “where appropriate” — perhaps recognition of the challenges associated with federal involvement in public-private partnerships.
3. The President outlined a few types of infrastructure that ought to be covered under this bill (“new roads, bridges, highways, railways, and waterways”). Energy and water utility infrastructure may also be included in any bill, along with freight and surface transport infrastructure.
4. As indicated above, the President signaled a desire for Congressionally-directed time limits for federal permitting decisions —“no more than two years.”

The type of bill outlined by the President is both costly and would involve multiple committees in Congress. Together with many other substantive disagreements across and within party lines, these factors will pose challenges to development and enactment of the stated policy objectives.

What to Expect Next

President Trump’s recent remarks on infrastructure development suggest that further statutory and regulatory upheavals, as well as desired relief to market participants developing a range of projects, may be on the horizon. As indicated in the White House’s draft document on NEPA and other permitting revisions, public and private applicants and investors should anticipate major political battles about scaling back bedrock environmental statutes and regulations. Morrison & Foerster LLP will closely monitor these developments. For further updates on these matters, please contact the attorneys listed above.

[1] Draft document, p. 1.

[2] 42 U.S.C. 4321; 40 C.F.R. 1500.1.

[3] 40 C.F.R. 1502.14(c).

[4] Draft document, p. 4.

[5] Id., p. 8