For Environmental Permits, New Thresholds After Debt Limit Deal

Changes to permitting sections of the National Environmental Policy Act include shortened deadlines and more categorical exclusions

On June 3, President Joe Biden signed the Fiscal Responsibility Act of 2023. The deal to raise the U.S. debt limit includes significant changes to the National Environmental Policy Act (NEPA), a bedrock 1970 law that requires federal agencies to consider the environmental impacts of projects before approving them.

The most significant changes to the permitting process for environmental projects are:

1. New, shorter deadlines for preparing environmental impact statements (EISs) and environmental assessments (EAs). Even the most complex projects would be required to complete reviews within a 24-month timeline.
2. Revised thresholds for determining the types of projects that require EISs or EAs. Federal agencies will have increased discretion to decide which projects trigger the NEPA process for requiring EIS and EA submissions.
3. Public participation early in the process. Comments may aid in identifying key concerns, as well as means to mitigate those concerns.
4. A study to evaluate "E-NEPA," a permitting portal for submitting and tracking applications. This would expand data access and boost transparency.

Shortened deadlines increase need for efficient science studies

New, abbreviated deadlines for NEPA-affected projects were developed to streamline application schedules while still providing time to adequately assess potential environmental impacts. These deadlines imply rigorous and reliable scientific studies must be conducted with greater efficiency as part of EISs and EAs. While deadlines may be extended in consultation with the applicant, substantially impacted schedules may force permitting decisions based primarily on the review of limited existing data and short-term studies.

The use of limited data imposed by shortened deadlines may force agencies and project sponsors to make highly conservative assumptions to protect the environment, even if these assumptions are unrealistic. Abbreviated timelines also seem likely to limit investigation of complex matters such as cumulative impacts and environmental justice.

Decisions based on abbreviated studies may have a higher risk of unanticipated environmental harm and increase caution among agencies and project sponsors while leaving projects potentially vulnerable to court challenges if critical EIS/EA topics are not adequately addressed.

Increase in categorical exclusions reduces EIS, EA reviews

The law is expected to increase the number of permits that fall under categorical exclusions allowing permitting to proceed without an EIS — or use a less time-consuming EA when an EIS may have been previously required.

However, project sponsors must weigh the benefits of a less stringent EA with the potential risk that the EA determines whether an EIS is necessary. In this instance, project sponsors would have to go back to the drawing board to plan for a more rigorous review. This NEPA regulatory change is particularly relevant for projects with emerging technologies where a "reasonably foreseeable significant effect" may be unknown.

Public comment provides opportunities to identify and mitigate key concerns early in the process

One of the changes to the law requires the lead agency to include a request for public comment when issuing a Notice of Intent to prepare an EIS. The request for public comment will allow for stakeholder input on potential alternatives or relevant information, studies, or analyses that should be used for assessing impacts. NEPA has always been about public involvement and requesting public comment earlier in the process provides opportunities for a more robust assessment.

E-NEPA may streamline applications through greater data access

The law calls for a study assessing the creation of a digital "E-NEPA" portal to streamline document submission and collaboration with agencies. While such a portal is only under study in this law, a program could be implemented soon.

This proposed move toward more transparency, when implemented, would allow the public greater access to much of the underlying scientific data and analysis used in the decision-making process. This transparency is an opportunity for project sponsors to invest in the most rigorous scientific process possible to decrease their vulnerability to scientific and legal challenges of their findings.

A key aspect of this study should include how communities with low internet connection rates, often more prevalent in neighborhoods facing environmental justice concerns, will be able to engage in the NEPA process.

Balancing efficiency and decision-making

Changes to NEPA enacted in the Fiscal Responsibility Act of 2023 will make it more important for applicants to engage consulting scientists with permitting experience to efficiently conduct rigorous scientific assessments. While these changes may make approvals more streamlined and efficient, they may also make agencies and project sponsors more conservative in decision-making or vulnerable to challenges related to lack of scientific thoroughness.