NEPA Revisions Would Undercut Infrastructure Projects

By  Krisztina Pusok

Repairing American infrastructure has been the primary big-ticket item on which President Biden has staked his presidency, but his own environmental regulations threaten to undermine the goals of his landmark $1.2 trillion infrastructure bill.

President Biden has directed the White House Council on Environmental Quality (CEQ) to restore strict environmental standards for all large infrastructure projects that require a permit or use federal dollars. The standards are part of the National Environmental Policy Act (NEPA), which has been updated to require federal agencies to calculate both the “indirect” and “cumulative impacts” of new projects in areas such as air and water quality, wildlife habit, CO2 emissions, and climate change. In addition, the standards will now grant agencies the power to develop environmental procedures that “go beyond the CEQ regulatory requirements.”

These changes, which are set to take effect on May 20th, represent a significant expansion of the reach of environmental reviews and could present an obstacle to the Biden Administration’s plan to upgrade America’s infrastructure. Projects pertaining to roads, bridges, and pipelines will now all need to go through a lengthy review process, which could mean higher construction costs, more frequent delays, and new lawsuits from environmental groups opposed to a particular project’s construction. This appears to run counter to the stated policy goals of Biden’s White House.

First introduced in 1970 and signed into law by President Nixon, NEPA forced federal agencies to consider the environmental impact of large-scale projects. Prior to that, agencies were mission driven, frequently overlooking environmental considerations.

NEPA changed that by requiring agencies to conduct environmental assessments, also known as Environmental Impact Statements (EIS). These assessments detail the impact of a proposed project on the environment and must first be reviewed before a Record of Decision (ROD) can be issued. This ROD determines whether a project is eligible to move forward or not. The entire process can be extremely time consuming and can, at times, defeat the purpose of the project.

Over time, however, NEPA’s implementation lost sight of its original purpose and slowly evolved into a labyrinth of red tape that allowed space for opponents of projects to weaponize environmental reviews. As a result, an EIS can span hundreds of pages and take as long as 4.5 years to complete.

While some reforms were made to address these issues, the process is still arduous. The Biden Administration’s recent move to empower the CEQ to expand upon key provisions of NEPA will only worsen the problem.

Infrastructure and energy projects are those that will bear the consequences. These include not only fossil fuel related projects such as pipelines and liquified natural gas terminals, but also green energy projects. Examples include new transmission lines for connecting green energy sources to the grid and the construction of new mineral mines needed to source lithium, cobalt, and copper used for battery electric vehicles.

According to a 2021 report by the R Street Institute “42 percent of the Department of Energy’s (DOE) active NEPA projects are related to clean energy, transmission or conservation, while only 15 percent of the DOE’s projects are related to fossil fuels.” R Street’s report also found the same was true for the Bureau of Land Management. The fact is that green energy projects are being stifled by lengthy environmental assessments.

Other infrastructure projects not directly related to energy including roads, bridges, mass transit, and broadband infrastructure arealso impacted. This is unfortunate since America already faces a range of other challenges including record inflation, supply chain issues, and worker shortages. The last thing it needs is costly construction delays for critical infrastructure.

Business and construction groups have been vocal on this point and worry the CEQ’s proposed revisions will have negative consequences. U.S. Chamber of Commerce, Associated General Contractors of America, and American Road & Transportation Builders Association, among others, have each issued their own statements emphasizing the need to resist reinstating outdated regulations that may jeopardize recent improvements in the project approval process.

Unfortunately, the Biden Administration seems intent on reinstating these burdensome regulations, likely to the detriment of his own “Build Back Better” agenda. The CEQ’s proposed changes to NEPA represent just Phase 1 of the Administration’s plan to revise environmental rulemaking. Later this year, the CEQ is expected to release Phase 2, which will propose much “broader changes” to NEPA that it says are needed to meet climate change objectives. Let us hope that the Administration takes a hard look at reconsidering Phase 1 before it moves on to Phase 2.