On April 20, 2022, the Council on Environmental Quality (“CEQ”) published a final rule revising the primary regulations implementing the National Environmental Policy Act (“NEPA”). The final rule largely restored provisions that were effective prior to amendments adopted by the Trump Administration’s CEQ in 2020. CEQ’s final rule, effective May 20, 2022, is directed toward three central issues under NEPA: (i) revising “purpose and need” requirements to clearly include factors beyond the needs of the applicant; (ii) returning CEQ’s regulations to a regulatory floor (not ceiling) to NEPA procedure; and (iii) reincluding indirect and cumulative effects within the required scope of consideration. The net effect of these changes is to reverse limitations and restrictions imposed on federal agencies by the Trump administration with respect to agency review of projects subject to NEPA. Notwithstanding this rollback, the rules also reemphasize the need for efficiency and timeliness in NEPA administration by federal agencies.
NEPA is a federal statute, effective January 1, 1970, that requires federal agencies to review the environmental impacts of major federal actions and reach determinations on the significance of environmental impacts of such actions. The statute is procedural; it is intended to require agencies to take a “hard look” at the environmental impacts of agency decisions. A major federal action is one that could have a significant adverse impact upon the environment. For large infrastructure projects that are funded in part by federal funds, the NEPA review process can be time consuming and expensive. It also may give rise to lawsuits challenging projects on the basis that the relevant agency performed an inadequate environmental review. The CEQ is the primary agency responsible for administering NEPA, although each agency is required to adopt its own regulations for administering NEPA. CEQ’s regulations provide a framework intended to form the basis for other agencies’ regulatory process and are therefore important to the implementation of NEPA by other federal agencies.
The 2022 final rule addresses three key concepts in the CEQ’s regulations and the implementation of NEPA: defining the purpose of a need for the subject project; establishing CEQ’s regulations as a regulatory minimum; and including in the review cumulative and indirect effects of agency actions.
Broadening Purpose and Need
Regulatory Ceiling to Regulatory Floor
Including Indirect and Cumulative Effects
The 2022 final rule generally restores much of the pre-2020 framework for NEPA review originally set forth in CEQ’s regulations. However, the 2022 final rule retained the retention of efficiency-promoting language in §1507.3(c) and definition of effects as “reasonably foreseeable” in § 1508.1(g), possibly reflecting CEQ’s “continuing goal” that the NEPA process could be “efficient and effective.” See 87 FR 23467. These changes will have more prospective than immediate impact given that the 2020 rule was immediately tied up in litigation and President Biden instructed CEQ to review the regulation mere months after it became effective. See 87 FR 2344-45.
CEQ described the 2022 final rule as “Phase 1” of a two-phase process. CEQ has indicated that Phase 2 will be geared specifically towards “achieving environmental justice and confronting climate change,” both of which are priorities for the Biden Administration and are likely to be politically contentious. CEQ has indicated that proposed regulations to implement Phase 2 are under active consideration and are likely to be published within the coming months.
Please reach out to Bob Lawrence, Matthew Neuringer or the rest of our team should you have questions regarding how these changes may impact existing and future projects that are subject to NEPA review.
 The final revisions were made pursuant to President Trump’s E.O. and took effect on September 14, 2020. See 85 FR 43304 (July 16, 2020).
 The 1978 regulations had technical amendments in 1979, with an additional provision being amended in 1986. 44 FR 873 (Jan. 3, 1979), 51 FR 15618 (Apr. 25, 1986) (amending 40 CFR 1502.22). Because these were outside the scope of the issue at hand in the 2022 rule and there had been no subsequent amendments until the 2020 rule, CEQ refers to the 1978 regulations as amended prior to the 2020 rule as the 1978 regulations. 87 FR 23454 (Apr. 20, 2022). Orrick follows CEQ’s usage in this industry alert.
 Press Release, the White House, CEQ Restore Three Key Community Safeguards during Federal Environmental Reviews (April 19, 2022), whitehouse.gov/ceq/news-updates/2022/04/19/ceq-restores-three-key-community-safeguards-during-federal-environmental-reviews/.