‘Shocking’: A top federal court just injected chaos and uncertainty into U.S. environmental permitting
Energy developers, tour guide companies and environmental groups alike are suddenly facing serious uncertainty.
When conservation groups faced off against the U.S. government in court this past January over a revised environmental review for commercial air tours above San Francisco-area national parks, nobody suggested that a key pillar of environmental law should be demolished.
But, in a move that shocked environmental attorneys across the country last week, the D.C. Circuit Court panel hearing the case may have done just that.
In the hearing, the lead challenger, the National Audubon Society, argued that the Federal Aviation Administration (FAA) had essentially cut corners when reviewing a plan to manage the tours under the bedrock National Environmental Policy Act (NEPA).
While air tours had been going on for years, the Audubon Society’s legal argument was that the FAA failed to take a hard look at the environmental impacts as required under NEPA before permits are issued for “major federal actions.”
The group primarily wanted a new review, but didn’t outright demand that tours stop. The FAA, naturally, said it had followed the rules.
The case did not attract much attention beyond those immediately involved and may well have largely been forgotten absent the decision issued this month by the D.C. Circuit, which sent shockwaves throughout the environmental law community. The court went well beyond the Audubon Society's request, essentially finding that the White House Council on Environmental Quality (CEQ) — which writes rules telling agencies like the FAA how to comply with NEPA — never had authority to issue binding NEPA regulations relied upon by agencies for over 40 years.
Nobody asked the court to do that. But, legal experts say it could have profound effects on the way the federal government reviews major projects in the long term and, more immediately, has injected considerable uncertainty into the legality of many permits issued for any number of projects.
“Like any new, significant opinion this decision creates short term chaos and uncertainty,” Peter Whitfield, an attorney at Sidley Austin who helps developers with traditional and renewable energy projects, told Landmark. “It opens the door for additional litigation and it might take some time before the dust settles on what NEPA obligations look like going forward.”
Criticized on all sides
The court’s surprising and splintered decision comes at a critical juncture for NEPA, which is a at its heart a straightforward and short law signed into law by President Richard Nixon in 1969 that requires regulators to take a hard look at environmental harms from a project before approving them.
While some agencies write their own NEPA rules, the CEQ has broadly instructed agencies how to comply with the law since 1977 when President Jimmy Carter issued an executive order empowering CEQ to issue regulations, not just guidelines.
NEPA notably does not specify specific outcomes, but rather sets out review standards that must be met in the hopes that impacts from projects are minimized and understood. In other words, NEPA reviews won’t necessarily doom a heavily polluting project, but an inadequate review that uses junk science that underestimates the environmental harms could cause significant setbacks in court.
And the threat of setbacks have stirred up a lot of consternation. While NEPA reviews were originally intended to be pages long, they have grown far beyond that original intent: Completing so-called environmental impact statements for energy these days run an average of 1,214 pages and can take up to three years to complete.
But, while there are calls for changes, very few have argued that NEPA and its implementing regulations should be outright tossed.
For many industry groups, specific regulations help ensure consistency in permits (and can protect them from legal challenges). Conservation groups, meanwhile, see it as a last defense against major polluting industries that might otherwise pop up seemingly overnight.
“What's important to recognize is that neither party talked about this issue and neither party briefed it,” Sam Sankar, the senior vice president for programs at Earthjustice, told Landmark. “The judge's decision admits that he didn't need to address it. So the decision is pretty shocking. It is not the way courts are supposed to operate."
The next shoe to drop
But those interested in the fate of NEPA may not need to wait long before finding out the impact of the D.C. Circuit’s decision.
On Wednesday, oral arguments are expected to take place in North Dakota federal court in Iowa v. CEQ, a case where Republican attorneys general are challenging changes made to CEQ’s NEPA rules during the Biden administration that aim to improve efficiency and timing of federal permitting and streamline reviews.
The red states have made a variety of claims about the changes — which are partly aimed at speeding up the development of renewable energy projects — including that they go well beyond the text of the law itself.
And in December, a case before the U.S. Supreme Court — Seven County Infrastructure Coalition v. Eagle County, Colorado — will focus on an interpretation of CEQ regulations that require agencies to consider indirect effects of a project being approved, even when those effects are things like global climate change that are outside the agency’s specific authority.
And legal experts say that the decision, should it stoke the kind of chaos being talked about among attorneys, could give President-elect Donald Trump a perfect chance to put a lasting stamp on the nation’s environmental review laws.
Trump will take office next year with a Republican-controlled House and Senate, and chaos in the NEPA system would raise the stakes for congressional action to solidify NEPA’s regulations in one way or another. And those changes would likely look a lot different now than if the D.C. Circuit issued its controversial ruling months before the election.
And even if the D.C. Circuit’s decision is reversed and things go back to the status quo, the Trump administration will play a prominent role in crafting future NEPA regulations.
“The Biden administration wasn't able to finish its reforms in four years,” Ted Boling, an attorney at the law firm Perkins Coie, told Landmark. “I understand there's work in progress there, but that's work that will be picked up by the Trump administration and really where it can make its stamp on NEPA practice to reflect the policy priorities of the administration that finalizes it.”