National Environmental Policy Act
The National Environmental Policy Act (NEPA) was signed into law in 1970. NEPA is procedural statute that requires federal agencies to consider the environmental impacts of their proposed actions and provide for public involvement in the federal decision-making process. More particularly, NEPA requires federal agencies to analyze the environmental effects of proposed federal actions, with public input, before proceeding with the action. Section 101 of NEPA sets forth a national environmental policy to “use all practicable means and measures, including financial and technical assistance in a manner calculated to foster and promote the general welfare, 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 America.” 42 U.S.C. § 4331(a). Section 102 then outlines the procedural requirements to implement that policy, requiring federal agencies to examine the environmental impact of and alternatives to major federal actions prior to decision making. 42 U.S.C. § 4332. Dependent on the potential environmental impact, NEPA comprises three different levels of reviews: categorical exclusions, environmental assessments, and environmental impact statements. As defined under NEPA, categorial exclusions means “a category of actions that the agency has determined, in its agency NEPA procedures, normally do not have a significant effect on the human environment.” 40 CFR § 1508.4. The CEQ has developed a comprehensive list of the federal agencies’ categorical exclusions. If a categorical exclusion is not applicable, an Environmental Assessment may be prepared to determine whether the federal action will significantly impact the human environment. If the action is found to pose significant environmental impacts, an Environmental Impact Statement must be prepared, which will analyze the proposed actions effects–direct, indirect, and cumulative–and reasonable alternatives, concluding with a Record of Decision explaining the agency’s decision. If, through the EA, the action is found to not present significant environmental impacts, the agency may issue a Finding of No Significant Impact or a mitigated FONSI.[1]
Title II of NEPA established the CEQ to oversee implementation of NEPA, with the CEQ responsible for issuing guidance and regulations to implement NEPA’s procedural requirements. Each federal agency has developed NEPA implementing procedures to supplement the CEQ regulations and reflect the mission and charge of the agency.
In terms of the electric sector, NEPA applies to any operations or developments that occur on federal land or that need to obtain a federal authorization, such as a license or permit; therefore, mining and drilling operations may be subject to NEPA, transmission and natural gas pipeline projects as well and any generating facilities that require a federal permit or are proposed to be constructed on federal land, which is especially pertinent for renewable energy development and hydroelectric facilities. See the Environmental Effects of Generating Resources for a high level description of some of the primary environmental effects of generating resources. (For an in-depth description of the lifecycle impacts associated with electricity generation, see Appendix I of the Seventh Power Plan.)
Recent NEPA Regulatory Updates
Implementing Regulations for NEPA
In July 2020, CEQ comprehensively updated the NEPA implementing regulations, which was the first time the CEQ had done so since 1978, making changes to almost every section. According to the CEQ, the updated regulations, effective September 2020, were aimed at facilitating more efficient and effective NEPA reviews in order to remove impediments to major infrastructure and other project development. Of note, the final rules established presumptive time limits and page numbers for EAs and EISs; amended several key definitions including “major federal action,” “effects,” and “reasonable alternatives;” and, amended the threshold criteria for knowing when an action might have an effect that requires NEPA review. The revisions were met with controversy and a handful of lawsuits challenging the final rule were filed.[2] In response to President Biden’s recent executive orders addressing the climate crisis, including Executive Order 13990,[3] the CEQ has begun reconsidering and reviewing the 2020 rule and in June 2021 published an interim final rule, effective June 29, 2021, extending the deadline for agencies to develop or revise procedures for implementing the updated regulations to September 2023. Further, on October 7, 2021, the CEQ published a notice of proposed rulemaking outlining its first phase of proposed revisions, which includes restoring a number of provisions that were in effect prior to the 2020 rule modifications, including restoring its prior definition of “effects” and provisions addressing the purpose and need of a proposed action.[4] A second phase of rulemaking is anticipated.
[2] See Environmental Justice Health Alliance et al. v. Council on Environmental Quality et al., No. 1:20-cv-06143 (S.D.N.Y.); Wild Virginia et al. v. Council on Environmental Quality et al., No. 3:20-cv-00045 (W.D. Va.), California v. Council on Environmental Quality, No. 3:20-cv-06057 (N.D. Cal) .
[3] Executive Order 13990, 86 Fed. Reg. 7037 (Jan. 20, 2021); Executive Order 14008, 86 Fed. Reg. 7619 (Jan, 27, 2021).
[4] 86 FR 55757 (Oct. 7, 2021).