Rewriting NEPA: The Guidance is Out

and commentary on The Discourse

Well, things have not been boring.

On Sunday, CEQ announced a pending interim final rule to remove all of its NEPA implementing regulations. The move itself was not a surprise, as President Trump’s executive order called on CEQ to do this. But the mechanism was unusual: by using an interim final rule, CEQ will be skipping notice-and-comment on the front end and will simply rescind the regulations outright.

Many commentators suggested that it would have made more sense to just go through notice-and-comment to avoid exposing itself to Administrative Procedure Act challenges. I’m sympathetic to this view, but there was, at the very least, some logic to the decision: by revoking President Carter’s 1977 E.O., President Trump had revoked CEQ’s basis for issuing NEPA regulations in the first place. And at the same time, courts have increasingly questioned the legitimacy of CEQ regulations, from the now-infamous Marin Audubon decision to the recent North Dakota district court ruling, which vacated CEQ's most recent rule after concluding CEQ lacked rulemaking authority. It may well be, then, that in the view of courts, there’s really nothing to rescind.

The news kicked off a flurry of debate on Twitter, with some Very Online individuals announcing that NEPA Was Killed (it wasn’t) and others concluding that rescinding CEQ regulations is Bad, Actually (it isn’t).

A Regulatory Vacuum?

The main contention from the latter crowd is that removing CEQ regulations will create regulatory chaos and significantly delay critical infrastructure projects as a result. As Shane Londagin from Third Way argues, “we've now opened up dozens of new avenues for litigation, interpretive variability, and process uncertainty… it will take years to fill this regulatory vacuum [and] build new precedent.”

It is true that there will be a transition period as agencies adjust to the new reality. Some uncertainty is inevitable whenever significant regulatory changes occur, especially for a framework that's been in place for decades.

But I also suspect that many of these commentators may be missing a pretty basic point: Agencies, who are in charge of actually implementing NEPA, have their own regulations which govern their NEPA processes. Revoking CEQ regulations does not mean that these agency regulations disappear. What it does mean is that agencies are no longer bound by CEQ’s rules, and are thus free to adopt less burdensome NEPA regulations. In other words, the “regulatory vacuum” that many commentators are describing is really not much of one at all.

This was effectively confirmed by CEQ’s initial guidance, which dropped on Wednesday evening. The guidance says:

Agencies should continue to follow their existing practices and procedures for implementing NEPA consistent with the text of NEPA, E.O. 14154, and this guidance. Agencies should not delay pending or ongoing NEPA analyses while undertaking these revisions. For such analyses, until revisions are completed via the appropriate rulemaking process, agencies should apply their current NEPA implementing procedures with any adjustments needed to be consistent with the NEPA statute as revised by the Fiscal Responsibility Act.

In short, to quote law professor James Coleman: “It’s not obvious to me why this makes it worse.”

What’s in the Guidance?

The guidance itself is, as expected, a pretty basic skeleton which makes cumulative impact analysis and environmental justice optional and otherwise directs agencies to continue following their regulations until they issue new rules.

Of course, since President Trump was last in office, the Fiscal Responsibility Act (FRA) passed and amended the language of NEPA, adding a new law to the CEQ’s list of interpretive responsibilities. And while the guidance doesn’t have a huge amount to say on this front, what it does say is promising.

First, it pulls the FRA’s categorical exclusion language directly, directing agencies to identify classes of action that “normally do not significantly affect” the environment. While this may seem obvious, it actually represents a significant departure from the CEQ’s 2024 regulations.

In its Phase 2 Final Rule, the Biden CEQ effectively reinterpreted this straightforward FRA language by adding the phrase "individually or in the aggregate" to the categorical exclusion criteria. This addition fundamentally altered the standard, requiring agencies to consider not just whether a single action in a category would normally have significant effects, but whether multiple actions taken under the same categorical exclusion might cumulatively have significant effects "in the aggregate."

CEQ defended this addition by claiming it was merely clarifying the statutory definition of "categorical exclusion" in NEPA, arguing that the phrase "does not significantly affect" in the statute refers to the "category of actions" rather than individual actions. However, this interpretation effectively reimposed a cumulative effects analysis requirement through the back door, despite the FRA's intent to streamline NEPA processes.

This was not the only place where the CEQ bastardized the FRA.

NEPA is kicked off by a “major Federal action.” In the 1978 regulations, major federal action was defined as an action “with effects which are potentially subject to Federal control and responsibility.” The FRA made major changes to this definition, determining that major Federal actions were those that are subject to “substantial Federal control and responsibility.”

But again, CEQ twisted the plain language of the statute. In their Final Rule, they not only claimed that adding "substantial" doesn't narrow the scope of NEPA, but incredibly argued that it could actually "capture a broader set of actions." Their reasoning? That "Federal control and responsibility" without the qualifier "substantial" might be interpreted to require "complete control and responsibility," whereas "substantial" only requires "a large amount." This tortured logic effectively flipped Congress's clear intent to limit NEPA's reach, instead using the new language as justification to potentially expand it.

This is why readers of Green Tape should never take seriously the contention that CEQ’s role has simply been to provide standardization and clarity across agencies. It is absolutely clear that CEQ’s role, time and time again, has been to add additionally stringent requirements beyond the simple statutory text.

Finally, the guidance provides one more positive signal, hinting at future efforts to reduce the set of actions that trigger NEPA in the first place. Specifically, in the section on federal funding, the guidance says that “Federal agencies should carefully consider the threshold above which an action would constitute a “major Federal action” in light of [the FRA’s] direction.”

This is very promising language. As Aidan Mackenzie and I pointed out in our recent paper, the Fiscal Responsibility Act provides a clear opportunity to exclude certain triggers (such as low-level funding) from NEPA.

So, all things considered, the new guidance is a good start.

Looking ahead, the NEPA Implementation Working Group, which has been tasked with coordinating “the revision of agency-level implementing regulations,” will be vitally important. Removing cumulative impact and environmental justice analysis requirements is a strong first step, but it represents a tiny sliver of the opportunity that CEQ and agencies have been provided through this executive order. I hope they seize the day.