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Federal Court Decision Underscores Need for NEPA Reform

The comment period has closed for the Council on Environmental Quality’s (CEQ) proposed updates to the implementing rules for the National Environmental Policy Act (NEPA). The comments filed by CEI on behalf of a coalition of free market organizations can be found here.

Meanwhile, many projects, especially those related to fossil fuel production and transport, continue to be delayed or blocked by NEPA and serve as reminders why reforms are needed. This includes a project to produce natural gas on U.S. Forest Service lands in Ohio that is the subject of the March 13, 2020 decision by the U.S. District Court for the Southern District of Ohio (Center for Biological Diversity v. U.S. Forest Service).​

NEPA was initially designed to require developers of projects potentially impacting federal lands or requiring a federal permit (including many energy production and transport projects) to document and make publicly available an assessment of the environmental impacts. The problem is that neither the original 1970 statute nor CEQ’s initial implementing regulations in 1978 set clear limits on the scope of the assessment.​

This oversight has empowered environmental groups to routinely file suit, complaining that the original assessment is incomplete. In the hands of a sympathetic federal judge, this can result in a finding that the assessment is insufficient, forcing project developers, who may have already spent years working on the first assessment, to spend even more time and expense on a revised one.

The delays can and sometimes do force investors to give up, and thus result in economically beneficial projects never breaking ground. This includes many new energy production and transport projects necessitated by America's shale oil and gas revolution.

The proposed NEPA update seeks to place reasonable limits on the scope of the reviews. In addition to page and time limits on the original assessment process, CEQ has also proposed excluding inconsequential, tangentially related or overly speculative environmental impacts.

In this most recent case, the court was convinced, among other things, that potential impacts of fracking on the endangered Indiana bat were not adequately taken into account. The problem with NEPA is there will almost always be something for project critics to say was not sufficiently addressed.

With nearly 1,500 species on the Endangered Species List, there often is at least one with potential habitat in the vicinity of many proposed projects; the Endangered Species Act is but one of many federal environmental laws that conceivably needs to be addressed during the NEPA process. At any given time, there are over 100 such cases in the federal courts, slowing or possibly killing job-creating projects.

CEQ’s final update of NEPA rules, if done right, could go a long way towards fixing the open-ended nature of NEPA and the resultant litigation and delays.​