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Final Revisions to NEPA Regulations: Six Highlights from Major Rule Overhaul

The White House Council on Environmental Quality (CEQ) recently published a final rule (Rule) revising the implementing regulations for the National Environmental Quality Act (42 U.S.C. § 4321 et seq ) (NEPA).  Touted as the first comprehensive revision of CEQ’s NEPA regulations since their creation in 1978, the stated goal of the Rule includes facilitating more efficient, effective, and timely NEPA review by federal agencies.

The Rule takes effect 60 days after it was published in the Federal Register – or September 14, 2020.  However, several prominent environmental organizations have vowed to judicially challenge the Rule.  So, while agencies may elect to apply the Rule to a NEPA review already in progress,[1] doing so may risk embroiling projects in litigation until those challenges are resolved.

Here are six highlights from the new Rule:

Elimination of Cumulative Effects Analysis and Revision of “Effects” Definition

Prior to the recent revisions, NEPA required agencies to evaluate “cumulative effects,” defined as “the impact on the environment which results from the incremental impact of the action when added to other past, present, and reasonably foreseeable future actions.”[2]  The Rule eliminates this concept altogether by removing the definition—and therefore the requirement in engage in a cumulative effects analysis—from the regulations.  CEQ explains this revision by noting that NEPA refers to environmental impacts and effects, but does not subdivide the terms into “direct,” “indirect,” or “cumulative,” unlike some state-specific environmental laws.  It also argues that the cumulative effects analysis caused confusion and unnecessary litigation, and led agencies to analyze effects not reasonably foreseeable or without close causal relationships to the action or alternatives.

Additionally, the Rule redefines “effects” as “changes to the human environment from the proposed action or alternatives that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives.”[3]  The goal of this revision is to clarify that agencies should not consider effects significant if they are “generallyremote in time, geographically remote, or the result of a lengthy causal chain.”  Of note, the definition now includes “generally” to acknowledge the occasional circumstance in which an effect is remote in time, geographically remote, or the product of a length causal chain, but is nevertheless reasonably foreseeable and has a reasonably close causal relationship to the proposed action.

Elimination of the cumulative effects analysis and the revised definition likely conflicts with case law in several jurisdictions—including the Ninth Circuit—and will likely be subject to challenge at least in those jurisdictions.

Narrowed Definition of “Major Federal Actions”

Another significant definition revision is to “major federal actions” requiring preparation of full Environmental Impact Statements (EIS).  Under the Rule the new definition specifically excludes “non-Federal projects with minimal Federal funding or minimal Federal involvement where the agency does not exercise sufficient control and responsibility over the outcome of the project.”[4]  The Rule does not set a specific threshold constituting “minimal Federal involvement.”  Instead, it invites agencies to utilize discretion when further defining these types of actions, which could result in a patchwork of interpretations that may subject to future litigation.

New Time Limits for Agencies to Complete Environmental Review

In order to encourage more expedient environmental review, the Rule adopts a 1-year presumptive time limit for agencies to complete review of  Environmental Assessments and a 2-year presumptive limit for EIS documents.  A “senior agency official” may provide written authorization for a longer period to complete the relevant environmental review.  However, the Rules provides no guidelines for situations in which an official may approve an extension to the proscribed time review and does not provide a maximum cap for review period extensions.

Implementation of “One Federal Decision” Rule

The Rule incorporates core elements of the “One Federal Decision” policy, adopted by Executive Order on August 15, 2017.  In keeping with the policy, the Rule directs lead agencies to play a more active role in coordinating review with cooperating agencies.  Specifically, the Rule requires lead agencies to develop a joint schedule, implement procedures to elevate delays or disputes, prepare a single EIS and joint Record of Decision to the extent practicable, and adhere to a 2-year time limit for completion of environmental reviews.

Consideration of “Environmental Trends” Determining the Relevant Baseline

Following CEQ’s proposed elimination of the cumulative impacts analysis, CEQ received comments that this would result in less consideration of certain environmental effects, including climate change.  In response, CEQ revised the definition of “affected environment” to clarify that the affected environment includes “reasonably foreseeable environmental trends.”[5]  By way of explanation, CEQ states that under the Rule, agencies “will consider predictable environmental trends in the area in the baseline analysis of the affected environment.”

By restricting agency consideration of predictable environmental trends to the baseline analysis, CEQ essentially prevents climate change from constituting an “effect” of a proposed action.

Limited Scope of Alternatives Analysis

The Rule also narrows the scope of the “alternatives” analysis agencies must conduct in EIS documents.  The previous regulations required agencies to “evaluate all reasonable alternatives” but did not define the scope of this evaluation.  The Rule now defines “reasonable alternatives” as a “reasonable range of alternatives that are technically and economically feasible, meet the purpose and need for the proposed action, and, where applicable, meet the goals of the applicant.”[6]  While the Rule does not prescribe the number of alternatives agencies must consider, CEQ notes that an EIS “need not include every available alternative where the consideration of a spectrum of alternatives allows for the selection of any alternative within that spectrum.”  This revision could make it substantially harder to challenge NEPA analyses on the ground of a deficient “alternatives” analysis in an EIS.


[1] 40 C.F.R. § 1506.13.

[2] 40 C.F.R. § 1508.7.

[3] 40 C.F.R. § 1508.8.

[4] 40 C.F.R. § 1508.1.

[5] 40 C.F.R. § 1502.15.

[6] 40 C.F.R. § 1508.1(z).

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 211

About this Author

Whitney Hodges, Attorney, Sheppard Mullin, Real Estate, Natural Resources

Whitney Hodges is an associate in the Real Estate, Land Use and Natural Resources practice group in the firm's San Diego office.  She also serves on the firm's Diversity and Inclusion Committee, the Recruiting Committee, and the Latin Business Team.

Areas of Practice

Ms. Hodges's practice focuses on general business litigation with an emphasis on land use litigation, real estate litigation, business torts/contracts, intellectual property, and litigation involving internet usage.  Ms. Hodges handles all aspects of litigation, including administrative, trial...

Daniel Maroon, Sheppard Mullin Law Firm, San Francisco, Real Estate and Environmental Law Attorney

Daniel S. Maroon is an associate in the Real Estate, Land Use and Environmental Practice Group on the firm's San Francisco office.

Areas of Practice

Mr. Maroon’s practice focuses on land use and environmental matters and land use litigation. He assists developers and property owners in complying with CEQA and planning and zoning regulations, obtaining development entitlements and regulatory approvals, and litigating land use and real estate cases involving CEQA, planning and zoning laws, development...