A Closer Look At How Proposed NEPA Updates Will Impact Water Operations

By Michael D. Smith

WSP water experts discuss the proposed changes to the National Environmental Policy Act and what they would mean for federal agency compliance.

The proposed regulatory changes to the National Environmental Policy Act (NEPA) pose significant implications for many industry sectors, including infrastructure, land management, natural resources extraction, manufacturing, construction … and water.

On July 31, the Council on Environmental Quality (CEQ) published a notice of proposed rulemaking (NPRM) in the Federal Register that details these changes to the implementation of NEPA. These proposals represent the most significant changes to the CEQ’s NEPA regulations since the 2020 NEPA Rule revisions finalized during the previous administration.

The implications of these changes are detailed in Summary of Changes to the National Environmental Policy Act as Amended by the Fiscal Responsibility Act of 2023, a white paper published by WSP.

When finalized, these proposed changes to the federal environmental and permitting review process will require federal agencies to substantially adjust their approaches to environmental permitting and reviews.

Decision-Making Improvements

The NPRM is the second phase of the rulemaking plan for revising NEPA in the current administration, following the first phase of revisions that were finalized in April 2022, which reversed several changes made in 2020 that relaxed some of the NEPA rules.

Building on the more limited set of reversals made in 2022, this NPRM proposes a much wider range of changes. These include returning to some of the provisions contained in the original 1978 NEPA regulations, putting forward new priorities and regulatory guidance in other areas, and codifying elements of recent legislative direction from Congress.

For instance, the NPRM requires that agencies set schedules to meet the one-year timeline for Environmental Assessments and the two-year timeline for Environmental Impact Statements. These timelines were originally introduced in the 2020 NEPA Rule, as well as subsequent legislative text added to the NEPA statute by Congress in the Fiscal Reduction Act of 2023.

Other examples are the changes for federal agencies drafting NEPA impact assessments. According to the proposed updates, agencies will be required to more robustly take public input into account in making project decisions. The proposal to change the former term used of “public involvement” to “public engagement” reflects the desired emphasis on more of a dialogue with key stakeholders, instead of a one-directional provision of information.

These proposed changes would direct federal agencies to make the NEPA process more useful to decision-makers and the public. These changes would reduce the amount of paperwork, emphasize the important environmental issues, and encourage public engagement in these decisions.

Efficiency And Flexibility

The NPRM provides guidance for interagency coordination, collaboration, and dispute resolution in order to improve efficiencies and environmental outcomes. The changes are also meant to improve the efficiency and flexibility of NEPA applicability for agencies, clarify roles and responsibilities for lead and cooperating agencies, and provide direction for agencies to adopt determinations from other NEPA documents.

To that end, there are significant changes to the development and use of categorical exclusions (CEs) that build on previous regulatory and statutory revisions. With the NPRM, an agency may adopt a CE from another agency when the CE covers a proposed action or category of actions, provided it takes place after consultation between the two agencies, notification to the public of this proposed action, and with documentation of adoption.

Agencies may also jointly develop CEs with other agencies, and for the first time they can establish individual CEs through programmatic environmental reviews and other planning processes, forgoing the usual lengthy process required for getting new CEs added to their agency’s NEPA regulations and procedures.

Some agencies have developed CEs that have broad applicability, and allowing other agencies to use them would be a stark change from previous NEPA practice. Additionally, allowing agencies to develop CEs through environmental reviews and planning processes, presumably without formal rulemaking or review by CEQ, could lead to new CEs that cover previously unaddressed actions.

Promoting Better Environmental Outcomes

The NPRM would direct agencies on the use of scientific analysis, as included in previous NEPA regulations, and it adds new requirements that environmental reviews reflect the consensus of the scientific community. The proposed changes also restore the requirements that agencies examine both the “context” and “intensity” of potential effects in determining significance, which would reverse changes from the 2020 NEPA Rule that eliminated those factors.

There also are important new proposed requirements related to the inclusion of climate change impacts in the NEPA review process, including the consideration of climate change and calculation of greenhouse gas emissions caused by agency actions, and encouraging the use of high-quality information for foreseeable environmental trends, such as the effects of climate change.

These climate change provisions represent the first instance which CEQ has included discussion of a specific resource category in its regulatory requirements.

Additionally, the proposed changes would require that all NEPA reviews include consideration of environmental justice issues, including analysis of the potential for disproportionate and adverse human health and environmental effects on environmental justice communities.

Most significantly, the NPRM specifically directs agencies to discuss disproportionate and adverse effects from climate change, cumulative impacts, diversity and equity issues, and systemic and structural barriers.

NEPA reviews have included environmental justice considerations for decades, but the inclusion of these provisions and definitions in the regulatory text provides strong direction to federal agencies on paying attention to such issues in their analyses and decision-making processes.

For both climate change and environmental justice analysis, the proposal strongly encourages not only the disclosure of any such effects, but also the serious consideration of making changes to project design, mitigation measures, and/or alternatives that would lessen or even eliminate such effects.

Agency Direction

Following the public comment (ended on Sept. 29), the CEQ began work to finalize the regulation revisions, which will most likely culminate late this year or in early 2024. Once CEQ has finalized the rulemaking, all federal agencies will need to revise their own agency-specific NEPA regulations, procedures, and related guidance to align with the new government-wide regulations.

WSP will continue to evaluate the implications of these important changes and any further related developments, including possible Congressional action to further amend the NEPA statute beyond the important changes made in June 2023.

By incorporating climate change, environmental justice, public engagement, and other priority topics, the newly proposed regulatory text provides strong direction for agencies to consider these issues more robustly than some agencies have in the past. Furthermore, these changes show a serious emphasis on improving the efficiency of the NEPA process.

About The Author

Michael D. Smith is senior vice president and national practice leader for environmental process and policy at WSP in the U.S. He co-authored the white paper with Bridey Gallagher, senior consultant for environmental process and policy at WSP.