Major Changes to Federal Permitting & the National Environmental Policy Act in the Debt Compromise

[00:00:00] Speaker ?: Thank you. [00:00:30] Sarah Bankson: Hello, and welcome to this Regulatory Transparency Project webinar. My name is Sarah Bankson, and I am Associate Director of RTP here at the Federalist Society. Today, June 16, 2023, we are pleased to host a discussion on the major changes to federal permitting in the National Environmental Policy Act in the debt ceiling compromise. After the discussion, our panel will take audience questions, so please submit those into the Q&A function at the bottom of your Zoom window. Please note that, as always, all expressions of opinion on today's program are those of the speakers. Our moderator for today's discussion is Mario Loyola, Senior Fellow at the Competitive Enterprise Institute and Florida International University. Mr. Loyola was formerly a member of the White House Council on Environmental Quality. In the interest of time, I'll stop there, but you can read the full and impressive bios for our speakers at regproject.org. Thank you all so much for joining, and now I will hand it over to you, Mario. Hi. [00:01:41] Mario Loyola: Thank you, Sarah. Thank you all for being with us today. This is a really great opportunity to explore in depth some very important changes in the U.S. federal system for permitting and environmental review of major infrastructure projects, in particularly, and particularly amendments to NEPA, which is the first time National Environmental Policy Act, the first time in its history that it's had such significant amendments. And there's a lot of people who, inside and outside the government, who are wondering what this all means. And we have a great panel today to try to answer some of those questions for us. So we've got Emily Dominic, who is Chief Policy Advisor to the Office of Senior Policy Advisor and the Office of the Speaker of the House, Kevin McCarthy. We have Thomas Connelly, who is Chief Counsel to the House Natural Resources Committee. We have Jason Hill, who's now Counsel at Hunt and Andrews and a former Chief Administrative Judge at Department of Interior. And finally, myself, Mario Loyola, I'll be moderating and walking us through some of the issues and posing some of the initial questions for my fellow panelists. I have a particular insight and interest in the topic because I was at the White House Council on Environmental Quality from 2017 to 2019. I was one of the principal drafters of the One Federal Decision Memoranda of Understanding and of the NEPA Rule Revision. So I am very happy and pleasantly surprised to see some of the most important changes that we pushed for have wound up in isolation. And so I just want to impress on people that some of these are really, really major changes that are very long overdue and could could save not just project proponents and the taxpayer and the government an enormous amount of effort, but really speed the delivery of major infrastructure projects that the American people deserve and that, you know, from left to right, there are there's an increasing bipartisan consensus that nobody except trial lawyers and environmental advocacy groups that are in the cottage industry of litigating NEPA can really get what they want under the old system and that the system needs to change. And so some of these changes are really going to shake things up and hopefully for the better. So I'm going to depart from the normal order of asking the panelists to take five or ten minutes to give their comments. And instead, I'm going to walk through what I see as some of the major issues and give what I think is just a capsule summary of the issue of the change in the law and then ask Emily Thomas and and Jason to comment on those on on on the particular change. And then in the interest of time, because I think we're going to lose one or two of the panelists before the end of the hour, we'll try to proceed quickly through each of the issues. And I have, you know, maybe seven or eight that I hope to get through by the end of the hour, and then hopefully we can open it up to questions. So I guess I'll start just by saying that and I'm going to share my screen for some of these, because the first couple of questions I'm going to ask are fairly in the weeds. And so this is this is really for the lawyer nerds who like reading code, but I'm going to share my screen and try to show you all what I'm talking about so that we can focus in on the legislative text. And in the first instance, we are going to talk about the time limits and page limits on the NEPA process that have been brought in. And I'll just say that this is a very difficult issue for several reasons. So what the law does in the Fiscal Responsibility Act is it says that agencies have two years to complete an environmental impact statement and one year to complete an environmental assessment. And and with respect to page limits, it says that agencies have are given a maximum of I think it is 150 pages for an environmental impact statement. And 300 if it's if it's extraordinary complexity. And so I have questions about each of those and the most important one has to do with time limits. So I'm going to share my screen briefly and just head over to the let the text of the legislation. Tell me if anyone has a problem seeing that. But basically what we have here is in general, except as provided below with respect to proposed agency action, a lead agency shall complete the environmental impact statement, not later than the date that is two years after the sooner of the date on which such agency determines that NEPA sections 102 to see requires the issuance of an environmental impact statement. So the date on which agency notifies the applicant that notifies the applicant that the application, the permit application is complete, or the date on which such agency issues a notice of intent to prepare the environmental impact statement that notice of intent is typically published in the Federal Register. So the question that I have about this is that I think it's important to ask is the following. So this is, this is, this is an idea that was derived from the one federal decision policy. And, and the problem that we had right away when we did when we did it in the White House, it was two years from the third of these milestones, which is the publication of the notice of intent to prepare an environmental impact statement in the Federal Register. As the casual observer will readily appreciate if the agency gets to decide when to publish the notice of intent in the Federal Register, and there's no right of action to force the agency to, to publish that notice of intent, then the agency is in complete control of when the clock starts ticking. And we saw before even I had left the White House Council on environmental quality, that agencies quickly gained this system, and they did it by, in a way that actually produced the opposite of the intended result. Which was that they started front loading the entire NEPA process before the publication of the NOI, just to make sure that they had all their ducks in a row. And we immediately heard from project proponents that the net effect was that everything was taking even longer. And so from the time that they filed their initial permit application to the record of decision and publication of the final environmental impact statement was taking much longer than two years, or was going to take much longer than two years. And I think, I mean, I can only assume that these changes are meant to address that. This is a very difficult issue. The, as long as the agency has any control of when the clock starts ticking, there is a substantial substantial probability that the agency will be able to game the system and escape the time limit. And so I think what I would like to ask Emily is how this is supposed to work, and especially which, what does this first one actually mean in practice? The date on which such agency determines that section 102 to C requires the issuance of an environmental impact statement with respect to such action raises the question of who at the agency determines that? Who at the agency knows that? I mean, what what's under what set of facts is this condition satisfied is basically the issue? I asked the question because if I file a preliminary permit application for a solar project on BLM land in Nevada, for example, or a hydropower project in somewhere else. And then the agency is going to the agency is going to know immediately that that that that if the if the process proceeds, it's going to require an environmental impact statement. And so then. So I guess my simple question is what set of facts would satisfy this for this first condition and start the clock ticking on the two year time limit. [00:11:14] Speaker 3: Thanks so much for the question before I sort of dive in on the technical stuff. I want to kind of take a little bit of a step back to give the framework of where we started with this proposal. I think you you rightfully note that a good piece of this legislation is based on the work that the Trump administration did, both through their NEPA rig and through the one federal decision memo. I think the idea here was to get as much as we possibly could enacted in law so that we had somewhere to build off for the future. I think just as in context, the first meeting that I took with the White House on this, they told us that touching NEPA statute of NEPA was an absolute nonstarter and was something that was completely unacceptable in the confines of this negotiation and negotiations in the future. And that in order to get anything that sped up any timelines whatsoever, whether we did it through the FAST Act or through through another mechanism, we would need to put some really big pieces on the table for transmission. I think that the the the the real takeaway from this legislation is while it is not perfect by any means, and we don't we certainly didn't get everything we wanted. We got most of what we wanted here, number one, crossing a red line from the White House and number two, without having to trade away any major equities that were brought to us by the folks on the left. That leaves us open to number one, come back to NEPA in the future for some of the big items like judicial review that we weren't able to touch on specifically here, and also to put on the table some of the other major permitting reform pieces, such as pipelines, mandatory leasing, things like that that came in the HR one proposal. So I will by no means say that everything in this legislation is ironclad and perfect the exact way it is, or that it's not going to allow, you know, a left of center administration to try to continue to delay. I think those still those pieces still exist. However, we're starting we went from having literally nothing in statute on any kind of deadline or timeline to having something that's here so that project applicants can point to a process that allows them to say, hey, look, you know, number one, you're supposed to follow a specific timeline. I think to your point about an agency, knowing whether or not they're going to need to do an environmental impact statement or come some kind of assessment assessments, sometimes that's really clear cut. I think in other cases, there's, there is some deference to the agency on whether or not they have to prepare these documents, some of the language that's later on in the bill that focuses on the major federal action, for example. gives agencies, perhaps under a friendlier administration, the leeway to say, you know what, this project doesn't qualify for something that needs to go through NEPA, we wanted to be able to preserve some of that flexibility. And then the last piece of this is, for the first time ever, we have a right of action for project applicants to say that they are not following the process here in the proposed here in this legislation. So, I think you're right to point out that there are still opportunities for the agency to perhaps delay the publication of notice of intent. I think that's that certainly something that could happen. But right now there's no deadline at all. So if I had to choose between a deadline that could be delayed and a deadline that, you know, no deadline whatsoever, I'm going to choose this option because I think it gave us more, more to work on and frankly, more to give a project applicant to work for work on when going to a court to say, hey, this wasn't carried out the way it was intended. I'm going to just ask Tom if I missed anything here that's that specific, but I think that's kind of my perspective on this section. [00:14:28] Speaker 4: No, I think you nailed it. I think one of the most important components of this this timeline is the right of action component, you know, it, for lack of a better term, allows, you know, NEPA litigation to cut the other direction. For the first time project applicants and those interested in getting their projects started and completed have a have a mechanism by which to force agencies to take action. [00:14:55] Mario Loyola: Great. So that's all of that is appreciated and thank you for that. But again, so on what just narrow question on what set of facts at what point in a typical process do you think this first milestone would be reached? [00:15:14] Speaker 3: The determination of when a project would whether or not you would need an environmental impact statement. I think in most cases it would I think in most cases, like, for example, the example you raised, where you provide you put in a permit for something that almost always goes through that process. You'll immediately know that you need to the agency will immediately have a process that identifies you have to go through an environmental impact statement. If you're you're building a project on federal land, that's pretty clear cut. I think there are still going to be some cases where that's less clear cut. And I actually think this provision, frankly, could benefit folks by saying perhaps you do not need to go through the you do not need an EIS in this case. And so this wouldn't be a necessary timeline because you're not doing an EIS at all that that was really the intention of sort of the limitations that we put in the major major federal action space was. And again, I highly doubt this is going to cut our way that much under a Biden administration, but it's going to set some precedent for the agency sort of saying, look, not everything has to go through this process. And we have these things we can now point to in statute that allow us some flexibility for carve outs. I'll give you a good example of of something I've heard since the passage of the FRA on this topic. There's, you know, obviously, supposed to chips act. There's a lot of money out there for the semiconductor industry, and most of those folks were not prepared for the fact that they were going to have to go through the NEPA process. It caught them completely off guard. I think anybody who's on this call probably could have told them they were going to have to go through NEPA, taking huge sums of money from the federal government. But they weren't prepared for it. I will say the folks from Intel came to me last week and said, we think that we might not qualify based on how you wrote the major federal action provision. They're going to have to debate that with the agencies, because the agencies are still going to think that those major projects receiving the semiconductor funding under chips are going to qualify for as a major federal action. But because that's not as clear cut, that's a place where perhaps the agency won't be able to immediately right out of the gate say an EIS is necessary. [00:17:09] Mario Loyola: So thank you for that. So that's a perfect segue to what's going to be the next the next issue I wanted to ask you about, which is the new definition of major federal action. And just to set the stage a little bit here so people know what what we're what we're talking about section 102 to see, which is the core section of NEPA National Environmental Policy Act requires in the original version required the responsible official at the agency to prepare an environmental impact statement for any major federal action significantly impacting the human environment. The question that immediately arose in the 1970s and a circuit split developed over this question was whether major federal action was a separate standard that needed to be met independently of significantly impacting the environment in order for the EIS requirement to be triggered under NEPA. And some. So this is a very difficult question if you think about it conceptually, it's kind of one of those things you can see kids sitting around in the dorm room debating all night long. It's somewhat metaphysical and there were there were there were some circuits, it was a minority that said, you know what, if it's a significant impact on the environment and the federal government's involved. If so facto, the action must be major so we're just going to say that it's a major federal action if it's a federal action that has a significant impact on the environment. If so facto, it's a significant impact on the state, it's a significant impact on the state of the state of the state. And to say that major federal it's a major federal action if it's a federal action that significantly impacts in the environment basically reads the word major right out of the statute. And unfortunately, that is the that is the approach that was adopted what's called the unitary standard as opposed to the binary standard was the approach that was adopted in 1978 when CEQ published its so-called regulation of NEPA. I say so-called because it's really just an executive order dressed up to look as a regulation. But when CEQ adopted its regulation so-called regulation of NEPA in 1978, it adopted the unitary standard, and so we have gone through the we went through a difficult process of trying to define major federal action. And one of the points that we were arguing about internally for many for several years in the White House, and I think that you have. You've gotten a great stab at the problem here by saying that major federal action is means an action that the agency carrying out such action determines is subject to substantial federal control and responsibility. Now, I'm going to ask, so I'm going to ask you a question about what this means, but I'm going to parse it because in the next couple of issues that we raise, we're going to be talking about statements of purpose and need, and you'll see then the distinction that I'm drawing here. So I'm going to ask you a question about why, why, why, why it matters. When we talk about major federal action, if you go back to the Sable Trail case, the FERC versus Sierra Club versus FERC, August of 2017, what was at stake in that case is whether FERC had to account for the downstream carbon emissions as a proxy for climate impacts of this pipeline that was already in operation. Given that the pipeline was just feeding a power plant in Florida that was totally subject to the jurisdiction of Florida authorities, and not subject to the jurisdiction of FERC at all and FERC's argument was, we don't have any control over what the state utility is going to do with the gas that this pipeline supplies. We don't know if they're going to, if they're actually going to use any of this gas, and so we cannot be, we cannot, we cannot be required to account for these far downstream impacts, which are the climate emissions and the argument basically was. So those impacts are not in the control and responsibility of the agency, the impacts right here what this appears to say is that the major federal action means an action agency action, which is the permitting decision that the agency carrying out such action determines is subject to substantial federal control and responsibility. And I'll just point out and I'll just point out that on its face that seems somewhat circular because the agency permitting decision is always by definition in the control and responsibility of the agency. And what I hope that a court looking at this provision will will will will read into it is that the action means the action with all of its impacts. Because otherwise it would just be a circular definition, but let me stop talking and let me ask you Emily and Thomas and Jason also feel free to weigh in on the definition of major federal action which if it's effective is a very important limitation that will revive. I think will revive, I think will revive an important part of the original intent of NEPA. [00:22:35] Speaker 3: Yeah, so I'll just speak to the intent here I think we we approach this as trying to get as many potential limiting factors included in definition of major federal action as we possibly could. Again, I'll start with the starting position from the White House was that they didn't want to include anything, including things that frankly, were referenced in their own regulations, which which is a, you know, part of what makes this so complicated is that Where we ran into a lot of places there would be something that was in the existing reg under the first Biden administration round of regs. But they didn't want to codify it because they were hoping to undo it later in the process. So this is an example of one of those things where they, there is a reference to, I believe it's two out of three of these pieces in the existing regulation. But, but they did, they were not interested in codifying it and they were really resistant to our efforts to sort of say we want to say, you know, this minimal or federal funding piece. The, the mineral minimal federal involvement when an agency doesn't necessarily control the outcome of a project. And I'll give you some examples of kind of what we had in mind when we thought of this process. And then limits on applying NEPA where they received loan guarantees and other pieces of small financial assistance. I will note that one of the, that there were two pieces that were in the original draft of builder that are not included here because we simply were not able to get them in the negotiation. One was a limitation on the time of the impacts of a project. So a, a, we had a 10 year window. Another was just simply triggering NEPA through an interstate impact. I think truthfully, we, we could, if we had a little more time, we might've been able to close that, but we just weren't quite able to get, get the, get the folks in the White House comfortable with those provisions or, or frankly, work the language in a way where they, they felt like they weren't going to get completely attacked by the left on some, some of the bigger long-term impacts of projects. But, but we, we see this very much as a first, like a good first start to, to your point earlier. I think we, you know, we, we want to see, give projects the opportunity to go to, you know, frankly, to lobby the administration or to, to go through the legal system and say, we don't think we qualify as a major federal action. And here's our argument for why in the current statute, you don't have any real way to do that. So a lot of what we did here, while it's not ironclad and won't, you know, won't necessarily let us win every single time. It gives a lot of these projects that need a foothold to make an argument in court against, frankly, the regulatory overreach they face every day. We're trying to give them that foothold. I think the chips project is a, is a, the chips issue is a perfect example of something where, you know, they, they, this is not ironclad by any means, exempting them from the NEBA process, but it gives them something to argue that they didn't have previously. So, I, I would say, I think the, the next piece of this is something that we really do want to pursue in the future is, is getting back to that, how to, the interstate impact, for example, is one that I think is really important. We don't want, you know, we, one of the examples we use when we talked about this with the White House was we don't want to have to do NEPA for an entire project if you're only crossing federal land in one corner. That's the, you know, that's how the process works now. It's something that we'd like to try to move away from. But we just simply weren't able to get it in code here because, you know, frankly, we were, we were negotiating without the ability to frankly trade much away that the White House wanted. So that puts some limitations on us here. But, but I agree with you. I think it's, there's, there's opportunity to interpret this in a way that gives people the ability to say, look, I don't think this project applies for NEPA. Another example that we'll use in terms of the, like, minimal federal funding piece is we looked at, you know, my boss is from California, and we have a lot of, you know, California water projects that either come get funding through, you know, disaster assistance or something through that process, or they get a minimal amount of federal match for what is largely a state project. Those are the kinds of things we had in mind when we were looking to exclude folks from qualifying under this major federal action space. Tom, did I miss anything? Anything to add? [00:26:34] Speaker 4: No, you summed it up well. [00:26:37] Speaker 5: Yeah, I think, you know, when I looked at this, thank you for that, that history. I think it's interesting, Emily. When I looked at this, you know, it looked a lot like, you know, 1508.1 Q that was in the regulations, and then I was trying to figure out where it matched up and so certain things like the first one was the sixth one in the regs. The second one was the fifth one. The third one was the seventh one. The fifth one was the fourth one, you know, and, and, and, and six and seven were one and two. So but but but it was all kind of already already there in the in the 2020 regs. Another change that I kind of noticed was at the very beginning where it talks about, you know, major federal action means an action that the agency carrying out such action determines the subject in the regs. It just said federal control and responsibility and I what I saw was the addition of substantial into the statute, which seems to signal, you know, a little bit more narrowing perhaps than than was in the regs. And so, you know, this is really interesting. I, you know, when I look at the non discretionary language, you know, I had the question last year when the IRA was passed and, and, and still have it as to, you know, why they're doing NEPA on the, on the, on the leasing, the offshore leasing provisions that the IRA required them to do by a date certain. It seems non discretionary but but but they're still proceeding with with doing NEPA analysis on those offshore lease sales. You know, we were having discussions yesterday, and I think the loan provisions are are pretty interesting on this that that held up a lot. Doe just kind of released some some some some funding guidance on on different grant programs. And so I think, you know, that that these loan guarantee issues are are things that there's already stuff in the pipeline where they're doing NEPA, and it's at least worth the project proponents going back to the agency and saying, have you looked at this? Are you sure that we need to that we need to do NEPA on this, you know, like you're proceeding and you know I was just having that discussion yesterday with with one of my colleagues on a project we're doing for a client of, you know, like at the end of the day. Are you sure that you're looking at the end of the day, this is a loan guarantee go back and read the regulations go back and read the the new statute. And so I think you know there's some good stuff in here, and you know the the key of this is, you know, the way it ties to section 102, which is really the action forcing provision and always has been and you know this NEPA, which is a relatively short statute and that provisions pretty short. But, you know, if it's not a federal major action or major federal action, then arguably you're not having to do NEPA on it and this kind of gives you some some clear cut exceptions to that that have now been codified. You know, I, I think there was some worry as to whether any of this would be in included in phase two and now there's. [00:29:53] Speaker 3: Now it's clear. So I'm so glad you raised the loan guarantee piece, because that's in in the course of our negotiations, something the White House insist wanted to strike, and we basically got them to give up on it because I kept pointing out that it was in 2020 reg. And and and I think you're absolutely right to say that there was an intention to cut some of these provisions from in the in the phase two regulations from this administration, I think they had, you know, it was very clear to us that that was something that was on the table for them. And it's part of why I would push so hard to codify it, even though it's not perfect. I think there's a lot more that could be in here. But every single piece that we can get in the statute makes it harder for them to roll something back in a future reg. One thing I'll note that we had included in the Builder Act that we weren't able to include here was a exclusion for farm loans for USDA loans, which is, it was very interesting to us, but they they we could not reach an agreement on that provision. I think largely because the environmental community has so aggressively turned on the agriculture space. and they wanted to be able to say that they still preserve the right to execute NEPA on farm loans. But it's a fair point. I think they're, they, you know, I assume the reason they are making some of these loans and loan guarantee projects that a DOE go through the NEPA process is that they had every intention of taking that exclusion out in the in the phase two reg. And now they can't. So, so even if that's like, those are the kinds of things that we we get done in this provision is making it harder to, to take away a freedom in a future reg, then it's, it was worth doing. [00:31:22] Speaker 5: And you've got a farm bill coming up and now that you've got to add to it. [00:31:28] Speaker 3: Yeah, absolutely. And, and I'm glad you said that too, because I, we, you know, we sort of see this as the first step on NEPA, not the last. I'm sure that some folks on the other side of the aisle feel differently about that. But I'll just point to, even as recently as this week, we had an FAA reauthorization bill come out of the TNI committee, 63 to zero votes, so fully bipartisan bill. And they included one federal decision language specifically for airport projects. This is something that hasn't been done before. And when they were able to say, look, you've just voted for some of this in the FRA. You voted for it in the IJA. We have a precedent of doing these kinds of streamlining actions for other major projects across the highway space and in other NEPA related projects. Let's do it for airports and airport projects and the, and the Dems signed off on it. So like that, that kind of doing something like this allows us to continue to put in small bites in the future. And we hope to, to continue to leverage it that way, both in other authorization bills and in the approach process. [00:32:22] Mario Loyola: Well, thank you all for that. And I, I definitely applaud. I mean, I, I think that this is, this definition is a major win when we were talking about major federal action. And some of us were particularly emphatic about the need to revive major federal action as an independent standard. The, the, the approach that seemed the most fruitful was to create baskets of carve outs and be able to say, okay, well, let's leave aside the conceptual problem of defining major federal action. So let's think about what is not a major federal action. And so this approach of the, the, this list of things that are not major federal actions. I think is a really, is a really significant improvement in NEPA and will provide much needed clarity at the outset of the, of the, of the NEPA process of what isn't, isn't a major federal action. So really applaud, really applaud what, what, what you all did there. So in the interest of half an hour has already flown by and before we start losing some of our key panelists, I guess we've already lost one. I just want to kind of try to race through in a shorter fashion, some of the remaining highlight issues that I think are important. One of the things that I think is really important is the statement of purpose and need and the fact that now the, the, the EIS requires the legislation requires NEPA documents to contain a statement, a statement of purpose and need for the agency action, which is the purpose and need that the agency, that the agent, that the agency action is responding to. And that is a very important, that's a very subtle surgical change that I think is very important because the problem that we've had for decades since the 1978 rule, which was very loosely worded. rulemaking in general is that the agencies weren't clear if they were supposed to be talking about the purpose and need for the project or the purpose and need for the agency action. The purpose and need for the project could be, you know, a hydropower project could serve lots of purposes, but the agents, the purpose and need for the agency action is just to respond to the statute that requires the agency to either deny or grant the permit. So that's a very different purpose and need for the purpose and need for the project. So that's a very different purpose and need for the project. And the distinction is crucial because NEPA requires that the agency study not just the impacts of the proposed action, but also alternatives, the impacts of alternatives to the proposed action. And we'll get to another major change which is alternatives in just a second. But, you know, for, for example, studies, you know, spends hundreds and hundreds of pages in every permit application studying routing alternatives for transmission or pipeline configuration system alternatives, engineering alternatives. And so all for all for all NEPA requires is that FERC present its study of alternatives, which is to either grant or deny the permit application. And so this is a very important change, and it's why, why I, why I insist that we have very important just conceptually for all of those who work with NEPA to distinguish very clearly between the purpose and need for the agency action and alternatives to the agency action on the one hand, and the purpose and need for the project. And alternatives to the project and alternatives to the project, which in most cases are not going to be any of the agency's business. And so the agency shouldn't be spending hundreds of pages studying alternatives that the project developers can readily exclude for business reasons, and that the agency can often readily exclude for policy reasons. So there may be maybe the Clean Water Act requires least damaging practicable alternative, and then you have to really compare different different alternatives to the to the routing of the pipeline or whatever. NEPA does not require NEPA does not require NEPA does not require the agency to study alternatives to the project. And that's why this this definition of purpose and need is so important. So I'll wrap that into the next issue, which is this what I think is a is a maybe the biggest win of all in this legislation, which is the inclusion of a reasonably of a reasonable foreseeability standard for the impacts. That the agency has to study. I was one of those arguing from, you know, for for months on end, that that especially after the Sable trail decision in August of 2017, there had to be some limiting principle on what impacts the agency has to study, because otherwise it's like chaos theory NEPA, and you know, the agency does something and it causes a, you know, a tornado in China. And, you know, the agency has to study all of these potential unforeseeable impacts. So I'll just open it up for Emily and Jason to talk a little bit about the importance of limiting limb of a limiting principle on the alternatives that the agency has to study and on the impacts that the agency has to study. [00:37:36] Speaker ?: Yeah, I can start there. [00:37:37] Speaker 3: I mean, I think you're right, in my opinion, the reasonably foreseeable piece was a huge win for us. Um, we didn't get everything we wanted here. I think the, the, the, the, the, we had hoped to include a reasonably close causal relationship, which is language that's based on, you know, sort of the, the current case law surrounding the reasonably foreseeable phrase. Um, we couldn't get the, the White House to agree to that second part. Um, but we felt like inserting that reasonably foreseeable standard in the code allowed us to continue to argue that there's a limitation on, on what kinds of effects agencies can be studying. And also sort of note another section that I think is, you know, it sort of the, the, our holistic approach here was how do we place limits? How do we narrow the field of what's like, what is looked at in the process? Um, one example where we did that was the scope of, of the scope and timeline of scientific review. And when, uh, when a court or an agency could require additional research, we put some time limits, essentially a, some guardrails around it so that you couldn't just require scientific review in perpetuity. Um, we took that same approach when we look at that reasonably foreseeable standard is, you know, we want the agency to be looking at things that they can predict in the future. We can't be in a position where we have a federal agency that can say, well, there's a potential for an impact in decades that could potentially maybe be attached back to this project. They could argue that now, or they could argue that before this was put in statute. So the goal is to say, okay, you need to tell a judge based on the case law for reasonably foreseeable impacts. Are we meeting that standard? And we felt like that was a really big step forward. And again, it's, it's not, we're not done here. We still have more restrictions that I think we could put in the statute. Um, but it also gives a really good foundation for a future administration to build a stronger regulation. [00:39:25] Speaker 5: That that's very helpful because yeah, I think that the, the reasonably foreseeable language coming into the really that core action forcing part of 102. It wasn't there before and now it's clearly there in the statute. You know, the, the concept of reasonable foreseeability though, has always been kind of kicking around in effects. I mean, it was in the 78 and in last year's changes, um, you know, under, uh, cumulative impacts and, and, and things. And then it was in the 2020 regs, you know, the, the really important part was, uh, um, you know, that kind of reasonably close causal relationship. So it's, it's interesting to understand, you know, kind of how that, that didn't get picked up to, you know, there is a definition in the 2020 regs for reasonably foreseeable. Um, which is sufficiently likely to occur such that a person of ordinary prudence would take it into account. Um, I think it, you know, it's, it's, you know, really interesting. I think another interesting, uh, kind of limitation in that, that section 102 is the, uh, except where compliance would be inconsistent with other statutory requirements. You know, there's, uh, there hadn't been an exception there before. And I think, you know, you've got certain statutes where Congress says, you know, when you get this application, get it done in 90 days. And the agency's been these, these, uh, these environmental reviews on it. And, and I think this kind of helps those applicants that say, but it says 90 days, you know, yes, you're allowed to consider things in the statute allows that. But doing a two year NEPA process is inconsistent with this other statutory provision that requires you to approve or disapprove this in 90 days. And so I think that exception is an, is an important, uh, kind of limitation as well. The alternatives, um, to the proposed agency action, you know, talking about a reasonable range, including the analysis of negative impacts of not implementing, but, but really that kind of technically and economically feasible. Um, though that was not part of the pre 2020 regs. And now that it's codified in the statute, I think that that's an important, an important piece, um, to show that, you know, it really needs to be technically and economically viable. And then to Emily's point about the, the science and when you're required to do the, the studies and stuff, there, there is some qualifying language in there about, you know, whether it's reasonable, you know, or, or unreasonable for the, for the amount of time and cost. And, uh, you know, is, is it unreasonable if they go do a study that kind of puts them outside that two year, um, that, that two year limit is, you know, so you kind of have to think about how these things interact. I think the argument can be made like, yes, you're saying that you need to do the study in order to evaluate the alternative fully, but you're talking about a five year study. And you've got a statute that says you have a two year statute of limitations, or you're even talking about an 18 month study. You've still got to be able to get it done within that two year period or that, you know, one year period. And, you know, I think that kind of provides some, some boundaries to what's reasonable, um, in, in those scientific study provisions. [00:42:47] Speaker 3: Yeah. And that's part of why, um, you know, part of why we wanted to include that and part of why the, the right of action on the two year, one year timeline is so important. That gives you the opportunity. If the agency isn't following this statute and they say, you know, we do want an 18 month study, or we do want a two year study. You have the ability to go to a court and say, there's no way they can possibly meet their two year deadline if, if they require this additional scientific information. So, but that's a, that I think is a, you know, and they need to really justify it. If they're going to, if they really need it for some particular reason, the agency still has the ability to say that, but they need to be able to justify it in a reasonable way. Um, I, I will say, you know, I think you're, you're right to, to point out the, the reasonably close causal relationship stuff, I think would have been great to have here. Um, I think that'll be something that we definitely bring up in permitting round two. And it's just the question of, you know, this is a good start and how do we, how do we take it to the next level as we, as we move forward? [00:43:39] Mario Loyola: Yeah. So thank you both for that. Um, uh, and I do want to take one question from the audience here, but I will say that I think if, you know, I don't think that the white house got such a big win there by, um, by, uh, keeping the reasonably close causal relationship language out. Because even without it, the reasonable foreseeability standard right there at the heart of, of the, of section 102 to see of NEPA, um, is clearly the courts are clearly going to look at that and say, okay, what does that mean? That's pro that's like proximate causation and torts, which was exactly the sort of genius. One of the genius aspects of, uh, justice Thomas's opinion in, um, public citizen versus department of transportation. Um, that's exactly what we were referencing. [00:44:23] Speaker 3: And, and we felt like it was better to rely on that case law rather than put in a definition that we felt like was incomplete. Yeah, absolutely. [00:44:29] Mario Loyola: And so I think that now, now we're now, now judges will say, oh, well, we don't have to invent a whole new case law over this. We can borrow from the law of torts as persuasive authority on the difference between cause in fact, you know, it has to be not just cause in fact, but also approximate cause. And I think that that's a very important limitation. Um, if I can suggest before going really quickly to this question from Don Reeves, um, for round two, if, if I humbly suggest one thing for round two, it's in that definition of major federal action to make it to, to add, um, impacts of the action. The action subject to federal control and responsibility because going back through the iterative process internally at the white house. The reason why this language about a subject to federal control and responsibility originally cropped up in the drafts, uh, was precisely to try to bring in to try to say if the impacts of the action are not within federal control. The environmental impacts of the action are not within federal control or responsibility, then it can't be a major federal action. And, um, that means that if it's in the control of some other government or some, you know, some state government or some local government, it's not a major federal action. I think you have captured a lot of that though with, with the baskets such as minimal federal funding because a highway project that only has 5% uh, federal funding is minimal federal funding. And that's gonna dramatic, that could dramatically in one fell swoop reduce the burden of, uh, of, of NEPA, uh, environmental impact studies, uh, for department of transportation that is in any case delegating them to state agencies. Um, but save everyone a lot of, a lot of pain and suffering and time. Um, so with that, we have a question from the, uh, one question from Don Reeves, uh, who says, can someone please speak to the impact of the law on projects already undergoing NEPA review that may know that may, um, uh, that may no longer, uh, be required. Um, so I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. [00:46:52] Speaker 3: Um, and I think that's a great question. Um, and I think that's a great question. I think that would have allowed the administration to delay a whole bunch of projects that maybe shouldn't have even been under the NEPA provision at all. I think, you know, truthfully, if I'm, I, you know, not that I'm giving advice to projects out here. I think there's opportunity for them to take advantage of the, you know, right of action provision to, to make an argument that maybe their, their process should be abridged or, or perhaps dropped altogether. I think that they will probably, if they, I expect there will be quite a bit of litigation in that space. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. Um, and I think that's a great question. [00:47:42] Speaker 5: Yeah, I think that, uh, you know, a key point on that is just kind of, wow, I've lost my train of thought. [00:47:54] Mario Loyola: This is the best of us on the grandfathering on the ground. [00:47:57] Speaker 5: I started thinking about something else that, uh, you know, so with the scheduling issue, but, but yeah. But Jason on the, so on the grandfathering. Yeah. On, on the grandfathering, you know, we're looking at that with our clients right now. I think, you know, our view is it's, it's immediately in effect. And so some of these projects that are in early stage, you know, we're, we're like, Hey, you know, like make the agency do these thresholds. Questions figure out whether it's a major federal election, things like that. Things where we're pretty far down the, down the road on it. It's like, let's just wrap it up as fast as we can. I think the, the other issue is stuff that was decided before this. Um, and it's now in litigation and kind of what that means for the litigation, right? Like, okay. Yeah. You'd apply the, the, the, the law that was in effect at the time that the decision was made. But to what consequence, if, if there's a remand and they're going to have to analyze it now under the new law, you know, is there a harmless error, you know, kind of argument to be made there. And so I think it kind of breaks into kind of those three different buckets, depending on where they are in the process, right? Like, are, are we kind of early in the process and can take advantage of this? Are we pretty far along and we just want to get it done? Or are we already in litigation and what does that mean for the litigation and potential remedy here? [00:49:23] Mario Loyola: Yeah, great. Super important. And I think that dovetails nicely with, um, with Anthony Cavender's question. Um, has, uh, the council on environmental quality issued any guidance on this legislation? I mean, I'll take that on moderators prerogative. And as a veteran of CEQ, I can say that it is 100% impossible for them to have issued, uh, guidance on legislation that was so recent. I would be astonished if they issue guidance this year, um, which they may, but anyway, it won't be anytime soon. [00:49:53] Speaker 3: Um, they have, I will, I will note though, that the CEQ is testifying, um, before house natural resources, I believe next week. Um, so there'll be an opportunity to ask some questions about this on the record. [00:50:05] Speaker 5: Well, I do think that they have, you know, phase two that they were planning to get out and, and based on the unified agenda that came out this week, they're still looking at getting that done. But in the next month or two, um, you know, with phase two NEPA, and I think I saw some acknowledgement earlier this week where they said, yeah, this is going to change some of what we were going to put in phase two. But it still seemed to, to, to indicate that, that they thought they could make those changes and still meet their deadline under the unified agenda. [00:50:36] Mario Loyola: But now the thing is that at some point they're going to have to rewrite. They're going to have to sort of codify all of this in the quote unquote NEPA regs because, because now we've now this, this legislation in material respects sort of overrules the existing NEPA reg. And I'll just, this is a good opportunity to put in my plug once again, that, um, people should just take a close look at whether this is really a regulation to begin with. Because my, in my opinion, it is not a regulation, the CEQ regulation, it is just an executive order is not based on any rulemaking authority. There is no rulemaking authority in NEPA. The authority at the, in the preamble say that it's coming from executive orders dating back to the Nixon and Carter and Trump and Biden administrations now. And all it is, is a memo to agency heads, and that is a, that is a, that, besides being an important conceptual point for litigation, it has a huge impact, like many other aspects of this, of this new legislation for FERC. Uh, a lot of the permitting, uh, a lot of the permitting, uh, a lot of the permitting work in the federal government is done by the federal energy regulatory commission pursuant to the federal power act. Or the natural, uh, natural gas act, uh, or, or various, um, laws that make FERC the permitting authority. And in this case, the lead agency under the new law. Um, uh, and there is a question whether the CEQ regulation ever had any binding, uh, impact on FERC. Uh, now we know that it doesn't with respect, with respect to these things. Um, uh, this is these things, uh, because it's a statute, it does impact the work of FERC. Uh, and I think that we, I think maybe this is a good idea for another webinar and we can have, uh, one or more of the commissioners on to discuss this from FERC. But I think that this could be, uh, this could really change how things are done at FERC. Uh, and let me ask, uh, Emily and Jason to, to assess that. And then Jason, if you want to take on, uh, in, in the remaining minutes, how you think this might shake up how things are done at interior, that would be great as well. Yeah. [00:52:43] Speaker 3: On the, on the FERC point, I'll just note that, you know, we, we had a lot of conversations with the White House about transmission, um, and, uh, and whether or not we'd be willing to include things on, you know, everything from cost allocation to minimum. Transfer to a number of other complicated issues in the transmission space. And I kept coming back to sort of the argument that look, dealing with NEPA and streamlining the process in NEPA is going to benefit anyone who builds anything that has to be impacted by, by the regulatory process. And to your point about FERC going through, frankly, endless and endless reviews to look for every alternative and every potential impact. The, one of the things that's impacted the most by that process is transmission. Um, the same is true for pipelines, but they both run into this big problem where they just are such a big project that they just get endlessly, endlessly reviewed and litigated. Um, and so we felt like, you know, while we didn't specifically do carve outs for transmission in this bill. In fact, in fact, we didn't do carve outs for anything. Um, we, we felt like the reforms here would really streamline that process. And I'm, I'm very curious to see how FERC interprets it and, and how we sort of see this play out over the next year. Um, whether there are some, there is some real streamlining on the transmission side as well. [00:53:54] Speaker 5: Jason. Yeah, no, I mean, I, I, I don't really have anything to add to what, what Emily just said. I mean, I completely agree with, with all of that. [00:54:02] Mario Loyola: Um, well, so then, um, moving along and in a couple of minutes that we have left, I do want to highlight another very important, what I see as a very important change. Um, which I'm, I am, uh, will just, um, admit that I argued very, uh, persistently and through a strategy of exhausting my colleagues at CQ. Uh, for this change, uh, when I was in the White House, which is to allow the project proponent to prepare their own, um, environmental impact statement. [00:54:38] Speaker ?: I thought that the, uh, argument that the agency should be selecting a contractor, that the project proponent to prepare their own, um, environmental impact statement. [00:54:38] Mario Loyola: I thought that the, uh, argument that the agency should be selecting a contractor, that the project proponent to prepare their own environmental impact statement. Um, and then the, uh, argument that the agency should be selecting a contractor, that the project proponent pays for, but doesn't have any privity with the project proponent. Otherwise, uh, was a really cumbersome and onerous way to get around a very simple conflict of interest. Uh, uh, uh, uh, uh, uh, potential that in any case, it's more apparent than real. Um, this is something that's really going to give project proponents significant control over the clock. And I will say, um, next week, uh, see, uh, uh, council on environmental, sorry, uh, competitive enterprise Institute, not to be confused with council on environmental. We're going to be, um, releasing a report that I've been working on, uh, for many months. Uh, that is a survey of, uh, best practices in other major industrial economies in the permitting space. And in every other country, the project developers are the ones that have to prepare the environmental impact statement. And, um, and not, not only that, but then once they publish the environmental impact statement, there's an independent commission that can weigh in on whether it's sufficient or not. In some cases like the Netherlands, uh, then government officials are given very tight timetables for responding, uh, and making their decisions. Sometimes just a matter of weeks, sometimes just days, uh, to act on those, uh, environmental impact statements. So this is a huge change that's, uh, that's potentially, uh, going to lead to further changes down the road. But Emily and Jason, um, why don't you talk a little bit about, uh, Jason, this has gotta be good for you. [00:56:09] Speaker 5: Um, uh, I think this is a great change, you know, and we've had, we've had clients that, that actually have the in-house skills to do this. And I think this allows for that now, which simply wasn't allowed before, you know, you had to go through that whole hiring contractors. And, and I think this puts a lot more control over the, over the timeline with the, uh, project proponents. I, I mean, we were just, I was just speaking on this last week in, in, to, to essential minerals association. And, and we were kind of talking about, you know, how significant of a change that this was, I think it'll be yet to see. I think there's some requirements that the agencies kind of put in some, some guidance regulations on kind of how this will operate in practice. But I think it has really great potential. [00:56:57] Speaker 3: Well, we also saw it as really critical to pushing back against this narrative that the reason that NEPA reviews take so long is because we don't have enough bureaucrats. Um, that, that is something that's in the mansion bill. It's brought up all the time when you talk about this issue and we sort of said, okay, well really, if it's that you don't have enough people to do the work, we'll give the industry the right to do the work. Um, so that's really what we were going for here. I think, you know, obviously it'll be interesting to see how it plays out when they implement it, but, but that was the intent. [00:57:25] Mario Loyola: Yeah. And subject to agency verification and adoption, right? So the, it's still the agency impact statement at the end of the day. Um, and, um, and I, and I will say as well that this is something that actually has survived, uh, the rollbacks in the Biden administration of the things that were in the, in the, uh, in the Trump era NEPA rule revision. Uh, this, this is one of the, there were many things actually from the Trump era rules, many important changes that are still on the books in Biden CEQ today. And what that represents, and this is a good place to, to round up and get your final thoughts, Jason and Emily. Uh, cause we have a hard cutoff in two minutes. Um, is that this really represents a bipartisan, the reason why this is possible. The reason why it was possible to amend NEPA at all, which is like the sacred cow for 50 years. Hovering over the American economy is that there's an increasing bipartisan consensus that amending NEPA and fixing this process is good for everybody. Uh, and that's why, uh, so many of the ideas that the Trump administration had came from the Obama administration and Biden has preserved Trump rules. And now we're codifying these in these legislation. It's just a big win all around. So on that, um, con with that, that congratulations, uh, Emily final words from you and Jason. [00:58:38] Speaker 3: Yeah, I'll just say we had a fight like hell for this. Um, I know there's plenty of bipartisan interest in addressing NEPA, but it sure didn't come across from the White House. Um, uh, big credit to, to, you know, uh, Congress and Garrett Graves and, and to the speaker for, for he directly had to directly engage with the president on this multiple times. Um, so we're really excited to see how it moves forward and frankly, to build on it in the future. [00:59:00] Speaker 5: Super. Thank you, Emily, Jason. Yeah. I mean, this has been kicking for a long time. Go back to the 1978 preamble. I mean, the fundamental purpose of NEPA is to help improve decision-making, not to, uh, to create useless paperwork and, and waste time. And, and that was, that was there from the beginning. And, and this kind of helps us move, move towards that. Um, it had gotten away from it. [00:59:26] Mario Loyola: Well, super. Thank you very much, Emily. Thank you very much, Jason. Uh, thank you very much to Federalist Society Regulatory Transparency Project, uh, for hosting this, uh, valuable and insightful, uh, webinar. Um, thank you for having me and, uh, and thanks to all of those who joined online. Um, and we're all, uh, available to answer further questions. So please be in touch, uh, and, uh, to be continued. Don't miss next Thursday's report release event at Competitive Enterprise Institute. Um, and, uh, have a great weekend. Oh, thank you, Mario. [01:00:03] Sarah Bankson: And again, I just want to thank all of our speakers for sharing your time and expertise with us today. And to our audience, thank you for tuning in. You can find more of our content on our website at regproject.org, or follow us on any major social media platform at FedSocRTP to stay up to date. With that, we are adjourned. [01:00:51] Speaker ?: Thank you. Thank you.