WILL ENVIRONMENTAL REVIEW CHANGES SPEED UP THE PERMITTING PROCESS?

Most Likely Not

This past Thursday, the Energy Bar Association, of which I am a member, conducted its annual meeting in Washington DC. The meeting includes a number of panel discussions on various topics relating to the energy industry. I coordinated one of those discussions, which was entitled: “NEPA’s Shifting Landscape.” NEPA is the acronym commonly used for the National Environmental Policy Act. The panel discussed the Trump Administration’s changes to environmental reviews of projects under NEPA, the purpose of which is to streamline the permitting process for energy projects.

I recognize that NEPA does not fit directly in the scope of my Explaining the Grid Substack. However, the US power grid is an essential part of the country’s infrastructure. The growing need for new generation and transmission facilities in light of explosive load growth and the retirement of aging generation facilities can only be met through large new infrastructure projects. The need for new infrastructure will be even greater in any transition to a low carbon grid. Environmental reviews of new infrastructure projects will represent a critical input to the scope of what new infrastructure is put in place and the speed at which it can be developed. Because environmental reviews of new projects will play such an important role in the grid’s future, I am going to describe in this post the panel’s views on how the recent changes will affect those reviews.

Background

First a review of what we are talking about for those of you not familiar with NEPA or how it works. NEPA was enacted in 1970 when Nixon was President (Nixon also presided over the creation of EPA). NEPA applies to any “major action” by a federal agency that could significantly affect the environment. Major actions include the approval of proposed projects, such as the construction of generation plants and transmission lines on government lands and of natural gas pipelines.[1] NEPA requires agencies to prepare a report describing the environmental effects of major agency action, including a description of reasonably foreseeable environmental impacts and a reasonable range of alternatives to the action. Significantly, NEPA does not require an agency to take any particular action if it finds that a proposed project will have significant environmental effects. Instead, the statute simply sets out the process agencies must follow. As the Supreme Court put it, NEPA requires only that agencies take “a hard look” at the potential environmental effects of proposed agency action. The idea is that if an agency considered the environmental effects of an action as well as reasonable alternatives, it would be able to limit harm to the environment caused by its actions.

NEPA also established a Council on Environmental Quality (CEQ) as part of the Executive Office of the President to provide advice on environmental issues and to provide guidance to federal agencies on how to implement the NEPA-mandated environmental reviews. In 1977, CEQ issued regulations detailing how agencies should conduct those reviews. For almost 50 years the CEQ regulations governed agency environmental review. And in appeals of agency approvals of infrastructure projects, the courts considered whether agency environmental reviews were consistent with those CEQ regulations.

Over the years, the required scope of agency NEPA reviews grew dramatically as project opponents pointed to environmental effects the agency did not consider. The agency environmental reports originally contemplated to be 100 pages or less grew into bloated multi-volume documents numbering in the 1000s of pages long. The process of preparing an environmental statement for a major project can take several years, greatly increasing the cost of a proposed project and lengthening the time it can take for a project to be completed. And, although it continues to be important to consider and limit adverse environmental effects of new infrastructure projects, NEPA increasingly has become a tool for opponents to delay the construction of proposed projects and to make them more expensive.

In recent years there has been a bi-partisan push towards streamlining the federal permitting approach. However, as seems typical these days, the two parties have different ideas as to how streamlining should be implemented. Consequently, to date Congress has been able to implement only minor streamlining measures. In 2025, the Trump administration declared a National Energy Emergency and took a number of executive actions intended to speed up the permitting for at least some types of energy projects. Two of these measures directly affect NEPA reviews of energy projects.

First, CEQ withdrew its NEPA regulations. This action is not as radical as it might sound. In November of 2024, before the change in administrations, the U.S, Court of Appeals for the District of Columbia Circuit held that CEQ is not authorized to issue regulations because it is not an agency. This may seem like a hyper-technical basis for the ruling. Since this is not a Substack about legal issues, I won’t go into the merits of that ruling, but will simply note that I think the court was correct. Correct or not, however, CEQ’s withdrawal of its NEPA regulations was pretty much required by that decision.

Second, the Department of the Interior, in response to the declaration of a National Energy Emergency, announced it was implementing emergency expedited permitting procedures for energy projects—except wind and solar power projects—located on the federal lands administered by Interior. Interior stated that, under these expedited procedures, it would release “environmental assessments,” for projects not likely to significantly affect the environment, within 14 days of receiving an application. “Environmental impact statements,” which assess the environmental effects of projects that do have significant environmental impacts, will be issued in 28 days. Interior stated it is not exempting these projects from NEPA, but rather is accelerating the time it will take to conduct the reviews NEPA requires.

Panel Discussion

Okay, back to last Thursday’s panel discussion. I don’t like to brag, but I think we assembled a really good panel for our discussion.[2] Each panelist has significant NEPA experience, including experience working in agencies dealing with environmental review issues. We also selected panelists with a diversity of viewpoints, including representation of project developers and of the environmental groups that frequently oppose those same projects. Given this diversity, I was somewhat surprised that our panelists largely agreed with each other. Let me summarize what they said about the three most important issues discussed.

The first issue is the substantive effect of CEQ’s withdrawal of its NEPA regulations. I have seen a number of claims, including in more than one Substack, that the withdrawal of the CEQ regulations means that agencies will no longer be required to perform the burdensome process of conducting lengthy environmental reviews and preparing multi-volume environmental reports. Our panelists unanimously agreed that this likely is not the case. CEQ’s NEPA regulations have been withdrawn, but the NEPA statute remains. The DC Circuit’s hyper-technical grounds for its rulings—that CEQ is not an agency—has nothing to do with the substance of the CEQ regulations. Nor did the court hold that federal agencies are prohibited from issuing their own NEPA regulations, which many agencies already had done to adapt the CEQ regulations to their own unique circumstances. It’s only the CEQ regulations that have no effect.

One thing the NEPA statute continues to require is that agencies prepare a detailed statement describing a project’s reasonably likely significant environmental effects and discussing reasonable alternatives. Although the CEQ regulations describing what those statements must look like are no longer with us, we still have 50 years of court precedents addressing the required process and contents for environmental statements. Individual agencies may attempt to reduce the content of these statements and shorten the preparation process. But the panelists concluded, and I agree, that most reviewing courts are not going to completely ignore the past 50 years of judicial precedents interpreting NEPA’s requirements.

The second issue the panel covered is whether the withdrawal of the CEQ regulations and, relatedly, the declaration of a National Energy Emergency, help to speed up the review and approval of proposed energy projects. Our panel was skeptical that this would happen, at least in the short run. As they explained, more than anything else, project developers, lenders, and investors all crave certainty. Right now, however, the withdrawal of the CEQ regulations has left a vacuum. There are approximately 80 agencies with authority to approve various different types of projects, and no one knows exactly how any agency will implement NEPA. Nor does anyone know how much the 80 separate agency processes will differ from each other. This can be an issue because many projects require permits from more than one federal agency. Problems could arise of two agencies reviewing the same project have conflicting approaches.

Additional uncertainty is created by the fact that no one knows what the courts might think of any agency project approvals conducted inconsistently with the past processes defined by the CEQ. This is important, because one thing is definitely not uncertain. Any major project approval almost certainly will be appealed by project opponents who will claim violations of NEPA, among other issues. As a result, even if a project receives a required permit more quickly than in the past, uncertainty about a pending appeal will make the project sponsors leery of putting too much money into a project before judicial review is complete. And, depending on the court hearing the appeal, it can well over a year—at times longer than two years—from the time an appeal is filed to the time the court issues its decision.

Another problem identified by the panel is that the current staff reductions at most agencies—with environmental staffs being hit especially hard—make it difficult for project developers to predict how their projects will be reviewed. Those staff members still at the agencies are required not only to continue to review projects with reduced manpower—with many of the most knowledgeable people leaving—but also to figure out the process they will follow in the absence of the CEQ regulations. The NEPA review process is supposed to be an interactive process, but the public is having a difficult time getting answers from agency environmental staff as to how to proceed.

The third issue the panel discussed is the new accelerated periods the Department of the Interior adopted for energy projects (other than wind and solar projects). The first reaction of the panelists was extreme doubt that the reviews could be completed in the brief time periods set by Interior. Environmental impact statements currently can take well over a year to complete. Depending on the nature of the project, they can require time consuming studies, such as on-site field surveys by biologists, expert advice from scientists with expertise in several different disciplines, or analysis of stream and river flows. The panelists had a hard time imagining how an environmental impact statement could be prepared in 28 days, even if environmental staff levels were not drastically reduced. It can easily take longer than that just to get a handle on what types of analyses will be required.

The panelists again emphasized that Interior’s compressed time frames for preparing environmental reviews do not change the requirements of the NEPA statute. If Interior produces a hastily written, deficient, environmental impact statement in 28 days, the resulting project approval issued by Interior may not be worth the paper it is written on (or is it the bytes of memory it takes up?) because such an approval almost certainly would be vacated on appeal. It is difficult to imagine that many project sponsors would be willing to commit the funds necessary to put shovels in the ground based on such an expedited approval.

Thoughts

My takeaway from the panel’s discussion is that the withdrawal of the CEQ regulations likely will not speed up the project approval process, but rather is more likely to slow it down. Perhaps much of the current uncertainty will be resolved in future years as agencies figure out how they will conduct their environmental reviews and the courts rule on the legality of the 80 agencies’ NEPA processes. But, if that ever does happen, it will not be any time soon. Similarly, if the Department of Interior’s expedited NEPA reviews cannot pass judicial review, the use of the expedited review process will have the opposite of the intended effect.

If I am correct, that would be a shame. Although it is important to consider the environmental impacts of proposed infrastructure projects, the current NEPA process has gotten too bloated and takes too long. Streamlining that process is vital to the efforts to maintain grid reliability and to any transition to a low carbon grid. The problem with the Trump Administration’s efforts to implement such a streamlining is similar to the problems affecting many of its other efforts to effectuate change through executive orders. The statutory provisions of NEPA impose certain procedural requirements, and those provisions have been the subject of over fifty years of judicial decisions clarifying how those statutory directives must be implemented. Without changes to the statute, which must be made by Congress, there are limits to what the executive branch can do in the way of streamlining. The current confusion created by the withdrawal of the CEQ regulations and other executive office actions does not help. It only will make the timely completion of the necessary new infrastructure more difficult.

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[1] I should note that NEPA does not affect the grid to the same extent as other energy-related industries. It is the states, not the federal government, that has siting authority over new generation and transmission facilities. Thus, NEPA does not apply to new generation or transmission facilities unless they have some effect on public lands or otherwise indirectly require some kind of federal permit. By contrast, FERC has siting authority over interstate natural gas pipelines, and FERC’s review of all new interstate pipeline construction applications is subject to NEPA.

[2] The panelists were Laura Morton, a partner at the law firm of Perkins Coie, Meghan Greenfield, a partner at the law firm of Jenner & Block, and Benjamin Chagnon, a senior legal advisor at Earthjustice. The moderator was Jorge Roman, an associate at the law firm of Bassman, Mitchell, Alfano & Leiter Chtd.