By: Rebekah de la Mora, Policy Analyst
On June 3rd, Congress enacted the Fiscal Responsibility Act of 2023 to raise the federal government’s debt ceiling. As part of a section focused on growing the economy, the bill included significant changes to the National Environmental Policy Act, or NEPA. NEPA was enacted in 1970, establishing the President’s Council on Environmental Quality and putting guidelines in place requiring federal agencies to review the environmental impact of their proposed actions. These environmental reviews only come into play when a project falls on federal land, or when a project could affect pollutants covered by the federal Clean Air Act.
The debt ceiling bill added a new section to NEPA covering permitting rules for infrastructure projects. The changes streamline the permitting process, aiming to improve the bureaucratic process by shortening timelines and clarifying agency jurisdiction. The Sabin Center for Climate Change Law at Columbia University has provided a redlined version of the Act noting the exact changes.
JURISDICTIONAL CHANGES
First, the bill creates a process to determine whether an agency has jurisdiction to perform an environmental review. An agency is not required to perform a review if: 1) the action is not a “final agency action,” 2) the action is a “categorical exclusion” that does not significantly affect the quality of the human environment, 3) performing a review conflicts with the requirements of another law, or 4) the agency does not have the authority to take environmental factors into consideration. If multiple agencies are involved, then only one will be the “lead agency” which will be in charge of the environmental review. State, tribal, and local agencies can be brought on as joint leads, and other federal agencies can be brought on as cooperating agencies, but a project review can only have one federal lead.
The bill also creates two separate review tracks: an Environmental Impact Statement and an Environmental Assessment. The difference between the two depends on whether a project would have a “reasonably foreseeable significant effect on the quality of the human environment.” If it does, then the project requires an Impact Statement. If it does not, or if the significance of the effect is unclear, then the project requires an Assessment. Performing an Assessment will result in either the release of a Finding of No Impact Statement or the preparation and release of an Environmental Impact Statement, depending on the determination of the Assessment.
PROCESS CHANGES
The biggest change made to the environmental review process was the implementation of deadlines. An Environmental Impact Statement must be completed within 2 years, and an Environmental Assessment must be completed within 1 year. Delays are possible, but the agency must work with the application to establish a new deadline that only adds the minimum amount of time necessary. Applicants have the right to petition the court upon alleged failure of an agency to adhere to the deadline; if the court agrees, the court can set a new deadline, which cannot exceed 90 days. In addition, all review processes must include a period for public comment.
OTHER CHANGES
The changes allow agencies to adopt categorical exclusions that already exist in another agency. They also require the Presidential Council of Environmental Quality to conduct a study on the feasibility of an online, unified permitting portal. The portal should allow applicants to submit all documents and track the progress of their application. The portal should be cloud-compatible and provide transparency in agency processes. The study is due within one year.
NON-NEPA CHANGES
The debt ceiling bill also wrought energy changes unrelated to NEPA. It requires a study to be performed on interregional transmission. The study should look at the current total transfer capability of transmission infrastructure, along with recommendations for transmission additions between regions. The study is due within 18 months, after which it will be published for public review. The bill also expanded the expedited permitting process to explicitly include energy storage projects. Finally, the bill approved streamlined permitting and review for West Virginia’s Mountain Valley Natural Gas Pipeline.
The Fiscal Responsibility Act of 2023 covered a wide variety of issues, only a small portion of which relate to clean energy policy. The efficacy of the changes will only become clear once the new NEPA review process is put in place, but the refinements will ideally lead to more clean energy projects being approved in a shorter amount of time, while also providing developers with transparent deadlines and a path for recourse.