Dive Brief:

• President Donald Trump on Wednesday announced his administration has finalized changes to the National Environmental Policy Act (NEPA) that will reduce the number of projects that require federal review and narrow the scope of effects considered under those reviews.

• "Today's action is part of my administration's fierce commitment to slashing the web of needless bureaucracy that is holding back our citizens," Trump said in a speech announcing the changes in Atlanta. The move will cut the current permitting process down to two years or less in a "dramatic" and "unprecedented … top-to-bottom overhaul," he said.

• Wind, coal and gas groups largely support the move in initial reactions as one that would allow projects to get built faster. However, the wind industry, along with environmental groups and legal experts, cautioned the rule could undermine federal regulators' ability to account for climate impacts of a project, as well as limit the ability for opponents of a project to press their case.

Dive Insight:

The Trump Administration wants faster reviews of pipeline and other large projects, but its latest move to achieve that leaves the question of climate impact assessment for such projects unclear.

Overhauling NEPA marks the Trump Administration's latest efforts to cut down on what it sees as "mountains and mountains of bureaucratic red tape in Washington, D.C.," the president said in his Wednesday speech. His administration first proposed its changes to the 50-year-old law in January, and in June Trump signed an executive order loosening compliance requirements for the law in response to COVID-19-related delays.

Fundamentally, the law's changes are twofold, Caitlin McCoy, staff attorney at Harvard's Environmental and Energy Law Program, told Utility Dive: it would reduce the number of projects subject to NEPA review and exclude certain effects of the project from being considered significant. 

For a project to trigger NEPA review, it needs to pose "significant" impacts to environmental quality or be federally funded, but under revised NEPA standards, projects would be exempt if they received "minimal federal funding" or "involvement" from the government, said McCoy.

It's unclear whether a pipeline would trigger NEPA under these rules, she said — the Federal Energy Regulatory Commission needs to issue a certification for interstate pipelines, but "it has no control over whether the project is ultimately built or not, how it operates, pipeline safety or security."

According to the updated regulations, "CEQ expects that agencies will further define these non-major actions, for which the agency does not exercise sufficient control and responsibility over the outcome of the project," leaving the agencies to interpret how much control they see themselves as having over a project.

"There seems to be a lot of room for interpretation and it could get very messy as agencies start to try to apply these new exemptions, lawsuits are filed, and courts across the country start weighing in on the meaning of these phrases," she said.

If a project does trigger NEPA, it is less clear how climate impacts, such as greenhouse gas emissions, hydrofluorocarbon emissions and other climate-related incidentals common to major infrastructure projects would be considered, said McCoy. The White House Council on Environmental Quality (CEQ) initially proposed reviews focus only on "direct effects" of a project, but now says effects "generally not be considered if they are remote in time, geographically remote, or the product of a lengthy causal chain."

The word "generally" has been added since the change was first proposed and could leave the door open to considering potential climate impacts, McCoy said.

"Even though CEQ has removed the separate definition for indirect effects, the concept has survived somewhat and FERC could still be required to consider the downstream impacts of a natural gas pipeline," McCoy said. "Or at least it might still be prudent for FERC to do so." 

In addition, the rule would change standards for commenting and judicial review, requiring all comments to include potential negative economic and employment impacts of the project, alongside any other environmental concerns.

Environmental groups staunchly opposed the rule. "We know President Trump is beholden to polluters, but now he also wants to muzzle everyone else. He wants to silence anyone who might object to pipelines or other projects that could wreck their communities or pollute their neighborhoods," Kevin Curtis, executive director of the Natural Resources Defense Council Action Fund, said in a statement.

Environmental Protection Agency Administrator Andrew Wheeler defended the policy's environmental impacts to Gray Washington News Bureau on Tuesday before the final rules were released.

"It does not address any of the underlying regulations or policies, those are all still in place," he said. "The main factor is it puts a two year timeframe. If we can't work through the issues around a project within two years, then that's a problem because the private sector does that all the time.”

Gas and coal interests say the changes would speed up pipeline approvals and mining permits.

"America's natural gas utilities are making significant investments in modernizing our vast pipeline network," American Gas Association President and CEO Karen Harbert said in a statement. "A reformed permitting process will enable natural gas utilities to continue to deliver affordable and clean natural gas which will be essential for our nation's economic revival and achieving our shared environmental goals."

Wind interests also support parts of the proposal, specifically "those that provide consistency in the time required to complete a review and those clarifying the roles of various agencies during the review process," American Wind Energy Association Senior Vice President of Government and Public Affairs Amy Farrell said in a statement. "Permitting delays represent some of the largest challenges in moving American wind projects forward."

But the wind industry is opposed to the administration's "efforts to limit the review of the climate change impacts of proposed projects, as doing so will only lead to greater economic and environmental costs down the line," Farrell said. Nuclear, solar and broader renewables groups declined to comment or did not respond by publication time.

The move was also supported by Senate Energy and Natural Resources Chair Lisa Murkowski, R-Alaska. 

"The President and his advisers deserve credit for leading the charge to update and modernize federal NEPA regulations to responsibly streamline these processes so that critical infrastructure and other important projects can be built in a timely manner," she said in a statement.