The Widening Vacuum of NEPA Law

In a seismic opinion in late May, a unanimous Supreme Court significantly undermined decades of National Environmental Policy Act (NEPA) judicial doctrine. Paired with recent lower court decisions and the rescission of Council on Environmental Quality (CEQ) NEPA regulations, the Court’s holding in Seven County Infrastructure Coalition v. Eagle County returns NEPA regulation and jurisprudence to a primordial state. Agencies now have little beyond the statute to inform their NEPA compliance. Indeed, the Court emphasized the need for judicial deference to agency choices, hoping this latitude makes for faster projects.

Whether these hopes become a reality remains to be seen. Federal courts already tend towards deference to agencies in NEPA litigation. But this deference has not stopped the flood of lawsuits nor the delays and uncertainties they impose for major infrastructure projects. Meanwhile, it’s clear that the Court and the White House, and a growing chorus of reformers, agree NEPA guidance and procedure need to facilitate faster reviews.

But only so many efficiencies can be achieved through executive decree or even through a strong mandate from the Court. Without the clarity of Congressional reform, NEPA procedure and infrastructure development could remain open to litigation and delay.

NEPA Regulations and the Courts

Historically, agencies followed extensive CEQ regulations to write Environmental Impact Statements (EISs). Agencies also developed their own NEPA implementing regulations modeled on those CEQ regulations. Fifty years of court cases provided still more requirements for NEPA compliance. In order to minimize time-consuming lawsuits, agencies had to write overlong EISs to comply with both CEQ regulations and court doctrine. In 2020, the first Trump Administration amended CEQ regulations to narrow environmental review. The Biden Administration, in turn, twice amended CEQ regulations to codify an expansion of environmental review requirements.

In recent months, two federal courts cast this arrangement into uncertainty by ruling that CEQ has no authority to issue binding regulations. The current Trump Administration responded by rescinding CEQ rules altogether. In letter guidance, CEQ also encouraged agencies to revise their NEPA implementing regulations in line with the 2020 revisions. Magnifying this turbulence, Seven County narrowed the scope of environmental reviews, relieving agencies of having to account for environmental impacts of projects outside the geographic and temporal scope of the project under analysis.

Reforming NEPA Will Require Pragmatic Legislation

The near term may be chaotic. Broad agency discretion could yield disparate standards for completing NEPA reviews. Some agencies may write short reviews hoping to pass judicial muster. Others may write long reviews out of risk aversion. Some may cover subjects deemed essential by prior jurisprudence. Others may eschew such analysis. Without clearer guidance from CEQ, it’s the Wild West in the federal bureaucracy. The resulting cacophony may lend an arbitrary appearance to agencies’ collective output.

Notwithstanding the possibility for chaos, the Trump Administration’s amply demonstrated impatience for drawn-out NEPA procedures gives us reason to expect the Administration will aggressively try to speed reviews. It further seems likely that Administration envelope-pushing will land some NEPA analyses in court. This may give courts an opportunity to fill in the jurisprudential gaps left by Seven County.

But it may take years to understand how the Court’s opinion and the regulatory vacuum will play out. Although the Court has reduced the scope of judicial review of EISs, some court oversight appears to remain, especially for clear procedural violations or bad faith. Further, agencies may use prolonged notice-and-comment rulemakings to craft new implementing regulations. The next phase of NEPA litigation will likely test how much discretion lower courts are actually willing to grant under the new regime. In its zeal, the Trump Administration may overreach, which could backfire and prolong project timelines. That dynamic could also delay efforts to provide agencies with legal certainty. Alternatively, a future Administration could choose to expand the scope of its NEPA reviews. That approach would be wholly consistent with Seven County and its emphasis on agency discretion.

But the challenges of deploying energy technologies, building transmission, managing the nation’s forests, and pursuing other critical infrastructure projects remain present and urgent. The signals sent from the White House and the Court will likely be heard by judges, agencies, project developers, and other stakeholders, hopefully reinforcing the imperative to speed NEPA reviews. But meaningful reform will require that lawmakers pick up these signals as well.

Pragmatic legislation can provide both clarity and, more to the point, the added force of statute. Done right, such legislation should reduce NEPA’s burden and provide certainty to project developers and financiers. Meaningful reforms would expedite agency review, narrow paths to litigation, and accelerate judicial proceedings. But without clear guidance from Congress, legal uncertainty and ongoing changes to NEPA implementing regulations could stymie a core goal of NEPA reforms—providing the stable, predictable regulatory environment we need to build big things.

p.s. Marc is the newest member of the Breakthrough Institute. At BTI he will lead our work to reform environmental regulations and permitting. Read more about Marc here.