The Nickel Report

On June 3, 2023, President Biden signed the bipartisan Fiscal Responsibility Act of 2023 (FRA) to suspend the United States’ debt limit until January 2025. The legislation also imposes changes to the environmental review process for infrastructure projects. Most notably, the FRA amends key provisions of the National Environmental Policy Act (NEPA), a touchstone environmental statute that imposes procedural requirements for the approval of major federal actions. The amendments to NEPA are the first major changes to the statute in almost 40 years. These changes signal Congress’s intent to streamline the environmental review of projects and improve the federal permitting process for energy projects. The amendments to NEPA will likely influence (and may delay) the Council on Environmental Quality’s (CEQ) Phase 2 revisions to NEPA’s implementing regulations which are currently undergoing interagency review. The FRA also expedites the approval process for all permits for the Mountain Valley natural gas pipeline project in West Virginia.

The Biden-Harris administration is taking new steps to put some teeth into its emphasis on addressing environmental justice (EJ). Two recent developments are worth noting given the potential impact on projects and communities. 

One, EPA announced on September 24, 2022 that it is launching its new Office of Environmental Justice and External Civil Rights (OEJECR or EJ Office). Establishing the EJ Office on par with other key EPA offices, such as the Office of Air and Radiation, the Office of Enforcement and Compliance Assurance, and the Office of Land and Environmental Management, signals the emphasis that the Biden-Harris administration is placing on EJ.

Two, in August 2022, EPA’s Office of General Counsel (OGC) issued a guidance document entitled Interim Environmental Justice and Civil Rights in Permitting Frequently Asked Questions (EJ FAQs) that outlines EPA’s current views as to how federal, state, and local permitting agencies can meet the requirements of civil rights laws when they are administering environmental permitting requirements. The FAQs document signals greater focus on environmental justice in permitting, even noting that denial of permits based on environmental justice or civil rights concerns may be appropriate in some cases.

Environmental justice and equity issues have taken center stage as part of the national conversation on the environment, climate change and racial equality. As we have explained, environmental justice will be a central focus of the Biden administration, as reflected in a recent Executive Order that declares federal agencies:

shall make achieving environmental justice part of their missions by developing programs, policies, and activities to address the disproportionately high and adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged communities, as well as the accompanying economic challenges of such impacts.

As we have previously reported, in July 2020, the Council on Environmental Quality (CEQ) published its highly anticipated final rule to improve its National Environmental Policy Act (NEPA) regulations, the first comprehensive revision of the NEPA implementing regulations in over forty years.  The final rule, which has generated much controversy and spurred numerous lawsuits, goes into effect today.  This post provides a brief update on the pending litigation and implementation of the new rule.

On July 16, 2020, the Council on Environmental Quality (CEQ) published its highly anticipated final rule to improve its National Environmental Policy Act (NEPA) regulations.  The update, which largely mirrors the proposed rule, is the first comprehensive amendment to the regulations since their original publication in 1978.  The final rule is designed to streamline the NEPA review process, clarify important NEPA concepts, and codify key guidance and case law. 

Even as COVID-19 is altering daily routines and operations within the federal agencies, all indications are that natural resource agencies continue to work on agency priorities and to advance the regulatory agenda.  Agencies including the Environmental Protection Agency (EPA), US Army Corps of Engineers (Corps), US Fish & Wildlife Service (FWS), Natural Marine Fisheries Service (NMFS), and Council on Environmental Quality (CEQ) have not indicated any plans, at this point, to delay their efforts on the Administration’s key initiatives. Public interest groups and organizations representing state and local officials have asked the White House to freeze rulemakings that are not directly related to the COVID-19 response effort.  EPA has responded to these requests by noting that it continues to be open for business and is fully functioning.

The Novel Coronavirus Disease (COVID-19) outbreak is affecting virtually every sector of society and the economy. The healthcare sector and government agencies are on the front lines of the response. Providing support to these critical response activities as well as striving to maintain the strength of the overall economy by continuing regular business operations is vitally important. The private sector has important roles to play. The purpose of this blog post is to briefly outline some practical and legal tools available to help provide both direct support and maintain broader economic activities while ensuring environmental protection and compliance with natural resource laws.

This blog post will be updated as new or relevant information becomes available.

Federal environmental reviews are high on the list of project time, costs and risk drivers. National Environmental Policy Act (NEPA) analysis and Endangered Species Act (ESA) Section 7 consultation are often chief among those drivers. The impact of preparing an Environmental Impact Statement or Biological Opinion (such as scheduling; consultant, mitigation and market opportunity costs; and litigation risks) often turns on the scope of analysis, which in turn depends on determining which effects will be caused by the action. In August 2019, the US Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) established, for the first time, a regulatory causation standard governing ESA section 7 consultations, and, in January 2020, the Council on Environmental Quality (CEQ) proposed a new rule clarifying the causation standard and scope of review under NEPA.

On January 9, 2020, the Council on Environmental Quality (CEQ) released its highly anticipated proposed rule to improve its National Environmental Policy Act (NEPA) regulations. The proposed changes would be the first comprehensive amendment of the NEPA regulations since their original publication in 1978. CEQ’s proposed changes are designed to streamline and speed the NEPA review process, clarify important NEPA concepts, and codify key guidance and case law. CEQ’s Proposal is informed by comments it received on last year’s Advanced Notice of Proposed Rulemaking.

NEPA requires that federal agencies analyze the environmental effects of their proposed federal actions. This means that virtually any project that requires a federal permit or authorization could be required to undergo a NEPA review. Development of broadband infrastructure, roads, bridges, oil and gas pipelines, and renewable energy facilities are just a few examples of the types of activities that could trigger NEPA. A NEPA review can take significant agency and applicant resources, can substantially delay permits and can provide a basis for a federal court challenge to the project.

On January 9, 2020, WildEarth Guardians and Physicians for Social Responsibility filed suit in the DC District Court challenging the Bureau of Land Management’s (BLM) approval of over 2,000 oil and gas leases. The leases were sold through 23 different lease sales, spanning from December 8, 2016, to March 20, 2019, and they cover over two million acres of public lands across five western states—Colorado, Montana, New Mexico, Utah and Wyoming. The conservation groups contend that BLM continually fails to fully account for climate change impacts associated with oil and gas leasing.

On November 4, 2019, the US Court of Appeals for the Eleventh Circuit upheld the Clean Water Act (CWA) section 404 permit issued by the US Army Corps of Engineers (Corps) for the extension of an existing phosphate mine in central Florida. Center for Biological Diversity v. U.S. Army Corps of Engineers, No. 18-10541 (11th Cir. Nov. 4, 2019). The Corps permit authorizes the discharge of dredged or fill material into waters of the United States that comprise a small portion of the mining extension. Opponents challenged the permit in the Middle District of Florida, claiming the issuance of the permit violated the CWA, the National Environmental Policy Act (NEPA) by not considering “downstream” effects, and the Endangered Species Act (ESA). The district court rejected all of the claims, and the Eleventh Circuit affirmed.

In the wake of the April 19 ruling by Judge Morris of the US District Court of the District of Montana that required the Department of the Interior (DOI) to conduct an environmental review on its decision to lift the coal leasing moratorium, the parties disagree on the necessary remedy and the next steps. While DOI is requesting additional time to finalize its environmental review for its decision to lift the moratorium, environmental groups and states are requesting the court vacate then-Secretary Zinke’s Secretarial Order that lifted the moratorium altogether.

The Bureau of Land Management (BLM) released a draft environmental assessment (EA) evaluating the potential environmental impacts of lifting the federal coal leasing moratorium. Publication of the draft EA opens a 15-day comment period that ends on June 6, 2019. This review was necessitated by the April 19 decision of the US District Court for Montana in Citizens for Clean Energy, et al v. Department of the Interior, et al. The court held that BLM’s actions in lifting the moratorium via a March 2017 secretarial order (Zinke Order) were arbitrary and capricious and in violation of National Environmental Policy Act (NEPA) because it was a major federal action for which there was no such review. The court did not immediately reinstate the coal leasing moratorium or require a specific environmental review, but instead stated that BLM had an obligation to study the environmental impacts of lifting the coal leasing moratorium and required the parties to submit additional briefing on the remedy.

The US District Court for the Middle District of Louisiana ordered the $750 million Bayou Bridge pipeline to halt construction within the Atchafalaya Basin when it concluded that the US Army Corps of Engineers’ environmental analysis likely violated the National Environmental Policy Act and the Clean Water Act due to the following deficiencies:

• The Corps did not provide sufficient explanation for how the proposed off-site mitigation would compensate for the loss of wetlands impacted by construction; and
• The Corps failed to sufficiently consider and address historical ...

This week, the U.S. District Court for the Middle District of Louisiana granted a preliminary injunction, halting construction of the $750 million Bayou Bridge Pipeline. Judge Shelly D. Dick concluded that the U.S. Army Corps of Engineers, in authorizing the project, did not provide sufficient explanation for how the proposed off-site mitigation would compensate for the loss of wetlands impacted by construction. In addition, the Court found the Corps’ environmental analysis failed to sufficiently consider and address historical impacts to wetlands from similarly situated ...

Federal agencies that authorize or permit large infrastructure projects, like interstate natural gas pipelines, are often subject to the requirements of the National Environmental Policy Act (NEPA), and environmental organizations frequently rely on NEPA to challenge a project. The D.C. Circuit recently struck down a decision by the Federal Energy Regulatory Commission (FERC) to approve the construction and operation of three interstate natural gas pipelines because the Court found defects in FERC’s NEPA analysis. The court’s decision to vacate FERC’s authorization now threatens to shut down the pipelines, including the Sabal Trail pipeline currently supplying natural gas to newly constructed power plants in Florida.