Permitting Bill NEPA Provisions.. Bipartisan American Affordability and Jobs Act: Hochman Review

What’s in permitting reform bill.. he read it so (maybe) we don’t have to.  Tom Hochman of the Foundation for American Innovation is one of my favorite young people working on permitting (I call them the “permitting bros”- young and enthusiastic (not old and jaded). Here’s what he says about the NEPA provisions (remember the bros come at this from mostly an energy focus, all our forest veg management drama is little more than footnote in their magnum opus.

Briefings, walk-throughs, and the good old DC rumor mill have started to surface details over the last few weeks, but finally, today, the whole text is out. The bill, dubbed the Bipartisan American Affordability and Jobs Act, is a whopper – at more than 400 pages, it makes the 170-page Energy Permitting Reform Act of 2024 (EPRA) look piddling in comparison. It represents a tremendous effort by members and staff on the Hill and in the White House, with particular credit to the Senate Energy and Natural Resources (ENR) and Environment and Public Works (EPW) committee

You may hear that this bill is really bad from certain quarters.  According to the Western Environmental Law Center  it “threatens to eviscerate environmental, wildlife, water, climate laws.”

Hochman has sections on other topics, but here is the NEPA and associated litigation section of his review.

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National Environmental Policy Act

As long-suffering permitting reform wonks know, NEPA was always going to be central to negotiations. It is the “Magna Carta of federal environmental laws” and the most heavily litigated permitting statute, and it has played a starring role in the slow-walking and cancellation of energy projects for more than half a century. (For some data points on the NEPA burden, check out NEPAstats.)

NEPA is burdensome for three main reasons. First, breadth: NEPA review is triggered by any “major federal action”, which has been interpreted to mean just about any federal action, from picnics to federal hiring. Second, the scope of review: NEPA has traditionally required analysis not just of the direct and proximate effects of an action, but also of effects that are “later in time or farther removed in distance” and “cumulative” in nature, creating exceptionally open-ended requirements for agencies. The Supreme Court’s Seven County decision has narrowed this considerably, but the ruling still leaves plenty of room for litigants to test its limits. Third, litigation: NEPA’s breadth and scope make it exceptionally easy to find a hook for a lawsuit. The consequence of NEPA litigation, even when unsuccessful, is immense. Plaintiffs can seek a preliminary injunction that halts a project while the case plays out, causing projects to stall for years or be abandoned altogether. And when agencies do lose in court, the remedy can be remand with vacatur, meaning that the agency’s approval is thrown out and the project is blocked until the agency redoes its analysis – often a years-long process.

On breadth, the Bipartisan American Affordability and Jobs Act (henceforth BAAJA) narrows the definition of major federal action (MFA) such that fewer projects trigger NEPA in the first place. Specifically:

• “Lifeline infrastructure”, including telecommunications infrastructure, transmission lines, pipelines, and beyond, is not an MFA for various repair and replacement activities.
• Receipt of federal loans or grants (think the “federal financial assistance” trigger) generally does not, by itself, make an activity an MFA, subject to limited exceptions.
• Many transmission and pipeline activities within existing rights-of-way are no longer MFAs.
• Certain USACE environmental projects with a federal cost share of up to $50 million are not MFAs.

On scope, BAAJA bolsters the Seven County decision, reaffirming NEPA’s procedural nature and requiring that courts reviewing NEPA claims must afford substantial deference to agency decisionmaking.

And now for the big stuff: litigation.

First, BAAJA changes the statute of limitations for NEPA lawsuits from six years to 150 days. This is pretty standard fare, and will not meaningfully limit plaintiffs’ ability to participate in lawsuits, but will bring more certainty to project sponsors.

Second, in order to bring a lawsuit, plaintiffs must allege “direct harm” and, where there was a public comment period, must have submitted a comment specific enough to put the agency on notice of the issue they’re suing over. In other words, they must give the agency an opportunity to address any alleged defects before reaching the courts.

Third and most importantly, injunctions and vacatur are eliminated outright for NEPA-specific claims. These remedies are, of course, preserved when the violation involves an underlying statute such as the Clean Air Act and the Clean Water Act, including when those violations are challenged through the APA. The logic for Republicans and Democrats alike is that purely procedural statutes such as NEPA do not create substantive environmental protections, and thus ought not result in project-stopping litigation.

This represents a sea change in the NEPA status quo, and is a truly exciting development. Without the threat of a project-killing injunction or vacatur, NEPA lawsuits lose most of their value as a delay tactic – and agencies will likely limit the “litigation-proofing” of NEPA documents that has driven much of the ballooning page lengths and review timelines over the years.

In return, two new requirements have been added to NEPA. First, BAAJA requires project sponsors to submit with their applications a stakeholder engagement report of no more than 20 pages for EAs and EISs. Second, it codifies existing practice by requiring a comment period of 45 to 60 days following the publication of a Notice of Intent for an EIS. I’m generally not concerned about these changes, though I would note that for certain processes that often receive timely EAs, such as applications for permits to drill (APDs) that don’t qualify for the categorical exclusions discussed below, the new stakeholder engagement report may slow the average permitting timeline. Nevertheless, this is a very minor nit compared to the enormous improvements reflected in this title.