On January 20, 2025, President Trump issued the "Unleashing American Energy" Executive Order ("EO") with the stated purpose of ensuring an abundant supply of affordable and reliable energy in the United States. The EO orders several agency actions aimed at eliminating undue burden on domestic energy development, including specific actions related to the implementation of the National Environmental Protection Act ("NEPA"). NEPA is the statute under which federal agencies are required to assess the environmental impact of their actions, which in turn requires environmental assessments for most federal permits. NEPA established the Council on Environmental Quality ("CEQ") within the executive office and charged the Council with overseeing NEPA implementation.
With respect to NEPA, the "Unleashing American Energy" EO first revokes President Carter's Executive Order 11991 of May 24, 1977, Relating to Protection and Enhancement of Environmental Quality, which directed CEQ to issue regulations for the implementation of NEPA. Thereafter, the "Unleashing American Energy" EO directs CEQ to propose rescinding its existing NEPA regulations and provide "guidance" on implementing NEPA by February 19, 2025.
The CEQ NEPA regulations have been in a state of flux, undergoing revisions in Trump's first term and subsequent revisions under the Biden Administration. The current CEQ regulations promulgated under the Biden Administration have come under recent fire, both with a coalition of states challenging the substance of the amendments in State of Iowa v. CEQ and with the issuance of the D.C. Circuit panel decision in Marin Audubon Society v. FAA, which stated as dicta that CEQ had exceeded its statutory authority under NEPA by promulgating binding NEPA regulations. President Trump's revocation of President Carter's 1977 Executive Order and directive to rescind existing CEQ NEPA regulations appears to be grounded in the rationale of the Marin opinion. On January 31, 2025, the D.C. Circuit denied an en banc rehearing of the Marin Audubon Society v. FAA opinion, finding the rehearing unnecessary because the panel had unanimously resolved the case on other grounds.1
Moreover, on February 3, 2025, the North Dakota federal district court issued an opinion in State of Iowa v. CEQ that the regulations were invalid and vacated as a matter of law based on the reasoning included in the Marin opinion. This opinion is likely to be appealed, and other federal courts may come to a different conclusion. This posture potentially creates a patchwork of states in which CEQ regulations are considered valid or invalid, until the regulations are rescinded by CEQ through the formal rulemaking process.
If the CEQ regulations are invalidated or rescinded, any existing agency-specific NEPA regulations will govern NEPA implementation in that agency's permitting process. To that end, the Trump EO directs CEQ to form a "working group to coordinate the revision of agency-level implementing regulations for consistency" with the CEQ guidance. The EO specifies that the guidance and any resulting regulations "must expedite permitting approvals and meet [statutory] deadlines" and that "agencies must prioritize efficiency and certainty over any other objectives, including those of activist groups, that do not align with the [EO's] policy goals."
The EO's proposed major changes to CEQ's function and regulations will likely face court challenges, and there will likely be a period of uncertainty and inconsistency regarding what is required under NEPA. In preparing permit applications, industry should both monitor federal agency requirements and assess any further protections that may be needed to safeguard the permit from possible court challenges by project opponents.
Footnote
1. Marin Audubon Society et al. v. Federal Aviation Administration et al., No. 23-1067, petition for en banc rehearing denied (D.C. Cir. Jan. 31, 2025).
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