In this series of articles, your WBD team explores the pathways to finding a balance between responsible regulatory oversight and allowing mining projects for critical minerals to receive timely permitting approvals so they may efficiently and effectively contribute to the Energy Transition. In the last article, our colleagues noted that the Bational Environmental Policy Act, or NEPA, is one of the leading causes of delay. This article takes a deeper dive into NEPA and the permitting delays it can cause.
The United States Department of the Interior Interagency Working Group (IWG) on mining reform recently concluded that the time between initiation of exploration and the start of commercial production for a mine in the United States is fairly consistent with the worldwide average of 16 years. Regardless of worldwide consistency, the natural question remains – is that average reasonable? And is that timeline expeditious enough to bring critical minerals to market to attain energy targets? We would argue it is not. One significant cause of delay is NEPA. Indeed, delays caused by the NEPA process have been called the most significant risk to mining projects in the United States.
But what is NEPA and why is it so consequential? NEPA was signed into law by President Richard Nixon on January 1, 1970, setting forth a congressional declaration of policy that the United States “use all practicable means and measures . . . to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans.” It called for balance.
In theory, NEPA is no more than a process statute, requiring federal agencies to fully examine the environmental effects, and possible alternatives, of a major federal action and engage with the public in the course of that process. To serve that purpose, there are three main levels of NEPA review depending on the anticipated potential impacts of any given proposed federal project. In increasing order of comprehensiveness, these levels of review are: (1) the categorical exclusion, (2) the environmental assessment, and (3) the environmental impact statement. Regardless of the level of review, the statute does not dictate a specific outcome; meaning, as long as the agency has taken a requisite hard look at environmental consequences and alternatives, “the agency is not constrained by NEPA from deciding that other values outweigh the environmental costs.” In practice, however, the NEPA process, including subsequent litigation, regularly dictates the outcome of many projects—mining among them.
The NEPA process, including subsequent litigation, regularly dictates the outcome of many projects—mining among them.
Mining projects are so often impacted by the NEPA process because very few mining projects do not have at least some semblance of a federal component that in turn requires an approval or decision by a federal agency. This is because the United States is rich in mineral resources. Indeed, federal agencies manage approximately 640 million surface acres, and 714 million acres of onshore mineral estate. And, the U.S. Bureau of Indian Affairs manages 56 million surface acres and 59 million acres of mineral estate in trust on behalf of Tribes. Development on any of these federally managed lands requires a federal permit. In addition, any mining projects that receive federal funding, for example from the U.S. Department of Energy, can also trigger NEPA. And even mining projects on private lands may require a federal permit for other reasons. For example, a permit under Section 404 of the Clean Water Act requires a federal approval.
The bottom line is that “[t]he range of federal agencies and actions subject to NEPA is broad and commonly includes activities such as issuing permits and funding infrastructure.” The fact that so many mining projects require a NEPA process in some form is not inherently problematic. However, delays in the NEPA process must be addressed, especially given NEPA’s far reach.
NEPA delays are self-evident in major mining projects across the United States. For an anecdotal example, the proposed Resolution Copper mine in Arizona that would supply up to a quarter of the United States’ copper demand has been undergoing federal permitting since 2013. Looking more holistically, the average time to complete the NEPA process with an environmental impact statement has been as high as 5.2 years during the last decade. And the delays are not just in the NEPA process itself, but really culminate post-NEPA, during litigation. Given the size of mining projects, most require the most exhaustive level of review through an environmental impact statement, and “a higher percentage of [environmental impact statements]s get challenged in court compared to other environmental review documents.” As of 2013, an overwhelming 65 percent of NEPA litigation was brought by public interest groups as a tool to stop projects. Even if defending a NEPA review is successful in court, the litigation process can take several years to resolve, depending on if an appeal is filed.1 And delays are more consequential than just an extended timeline. Mining is highly-capital intensive, and if the revenues from production come too late in time, a project cannot pencil out financially.
Delays are more consequential than just an extended timeline. Mining is highly-capital intensive, and if the revenues from production come too late in time, a project cannot pencil out financially.
This is a well-known problem, and one that most Administrations have tried to address. In 2023 the Biden Administration proposed what it referred to as a “Bipartisan Permitting Reform Implementation Rule” to “modernize and accelerate environmental reviews under [NEPA]” to, in part, “accelerate America’s clean energy future . . . .” The proposed rules would aim to coordinate reviews among multiple federal agencies, encourage the development and use of categorical exclusions, and recommend that a project’s long-term beneficial environmental impacts be weighed against short-term impacts. While these are certainly steps in the right direction, it is too soon to know how impactful the final rules will be once promulgated. Moreover, executive action amending the NEPA implementing regulations cannot put an end to NEPA litigation’s protracted timeframes. At this point, prolonging the approval process through dilatory litigation is a tried-and-true tactic that likely cannot be abated without Congressional action.
We find ourselves in an interesting place. NEPA was originally adopted to promote balanced conservationism and environmental protection as a government priority. Now it is preventing the United States from achieving carbon-neutral goals and implementing low-carbon infrastructure. While the Fiscal Responsibility Act of 2023 amended the NEPA statute with a view toward streamlining and reducing timelines for approvals, there is still more opportunity to implement actionable policy options to balance meaningful and intensive environmental reviews in support of sustainable project development. Those reforms could include expansion of federal programmatic planning and general permitting, increasing agency funding to more expeditiously draft and review NEPA analyses, and netting out positive downstream environmental effects from adverse effects when considering the level of NEPA analysis to prepare.2 Those reforms can take a variety of forms. One option that can be done through administrative action (and would therefore not require an act of Congress) is expansion of federal programmatic planning and general permitting. Another potential for administrative action would be to net out positive downstream environmental effects from adverse effects when considering the level of NEPA analysis to prepare. On the Congressional side, a relatively lighter lift would be to increase agency funding to more expeditiously draft and review NEPA analyses. To expedite the NEPA litigation process, Congress could also direct that NEPA judicial appeals should be prioritized.
If, on the other hand, we continue to allow the NEPA process to consume itself, we will surely fall behind target objectives in U.S. Energy Transition efforts.
The need for NEPA reform is here, and some limited progress has been made. But more can be done, including more holistic permitting reform in Congress, without which, the most effective change is unlikely. And inaction, or as NEPA would say—selecting the no-action alternative—is a decision in and of itself, and it is a consequential decision at that.
1 See Adelman & Glicksman, Presidential and Judicial Politics in Environmental Litigation, at 38 (2018) (median duration of a NEPA case is approximately two years, with 25% of cases taking more than 3.2 years).
2 See, e.g., NEPA Implementing Regulations Phase 2, 88 Fed. Reg. 49,924, (Proposed July 31, 2023) (proposing that “an agency should consider short-term construction-related GHG emissions from a renewable energy project in light of long-term reductions in GHG emissions when determining the overall intensity of effects”).
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