Advisor or Authority? Role of Council on Environmental Quality in NEPA Regulations

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Advisor or Authority? Role of Council on Environmental Quality in NEPA Regulations

DATE:

July 12, 2021

BY:

Thomas C. Jackson, Special Counsel, and Jeffrey H. Wood, Partner, Baker Botts LLP

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Advisor or Authority? Role of Council on Environmental Quality in NEPA Regulations

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Does a council established by Congress as an advisory body have the statutory authority to issue regulations implementing the National Environmental Policy Act (NEPA) that are binding on federal agencies? That’s the question flagged by a U.S. Court of Appeals judge in the D.C. Circuit in June 2021.

The answer to that question could unsettle the world of NEPA implementation for hydropower providers and others if agencies like the Federal Energy Regulatory Commission have the discretion to go their own way in satisfying NEPA requirements.

The Deep Dive

In 2020, the White House Council on Environmental Quality (CEQ) revised its long-standing regulations implementing the National Environmental Policy Act (NEPA). Those revisions included some significant changes to regulations that had been largely untouched for 40 years.  In other respects, the regulations continued long-standing CEQ positions or codified positions adopted by courts.

These revised regulations – like the version of the regulations that had been in place for decades – rest on a fundamental presumption — that CEQ has the statutory authority to issue regulations implementing NEPA that are binding on federal agencies. But courts and commentators keep asking: “What is the basis for CEQ’s authority to promulgate NEPA regulations?”

Asking the question is important because the CEQ regulations dictate many of the ways in which agencies like FERC comply with their NEPA obligations.  If the CEQ regulations were to be invalidated due to a lack of CEQ authority, it would create uncertainty regarding the procedures used by FERC and other agencies in connection with the preparation of EISs and other documents that are an integral part of obtaining federal approvals for hydropower facilities.  This uncertainty could trigger congressional debate as well as further litigation issues for challenges to hydropower projects.

The Origins of CEQ Authority

When it created CEQ in 1969, Congress gave the Council a primarily advisory role. The statute itself says nothing about CEQ issuing regulations, much less regulations that claim to be binding on federal agencies.  Indeed, the statute says little about any formal role for CEQ in the process of preparing environmental impact statements for major federal actions significantly affecting the human environment.

Nevertheless, in 1971, President Nixon expanded CEQ’s role by directing the Council – via Executive Order – to issue guidelines for a variety of federal agencies to follow in complying with NEPA.

In 1977, President Carter directed a further significant expansion of CEQ’s role, calling on the Council to issue regulations concerning federal agency compliance with the environmental impact statement (EIS) requirements of NEPA and stating that federal agencies were to comply with the CEQ regulations except where such compliance would be inconsistent with statutory requirements.

In compliance with this directive, CEQ issued regulations in 1980, including a provision (found in 40 C.F.R. 1500.3) stating that CEQ’s NEPA regulations were “binding on all Federal agencies” for NEPA purposes “except where compliance would be inconsistent with other statutory requirements.”

In the years that followed, the U.S. Supreme Court and other courts stated that those regulations were entitled to deference as interpretations of NEPA’s requirements. However, the courts did not directly address the authority of CEQ to issue binding regulations, although courts and commentators periodically raised questions about the extent of CEQ authority.

The CEQ regulations remained largely unchanged until September 2020, when CEQ issued amended regulations that significantly revised the procedures for federal agencies in complying with NEPA. In adopting those revisions, CEQ placed even greater emphasis on the binding nature of the regulations, including provisions requiring each federal agency to revise its own NEPA regulations and procedures to conform to the amended CEQ regulations and prohibiting agencies from imposing additional procedures or requirements beyond those set forth by CEQ.

Can They Do That?

Questions have recently been raised again about whether CEQ has the authority to issue binding regulations. In a June 22, 2021, concurring opinion in Food & Water Watch v. U.S. Dep’t of Agriculture, Senior Circuit Judge A. Raymond Randolph of the U.S. Court of Appeals for the D.C. Circuit noted the court’s history – extending back over 20 years – of questioning whether CEQ has the authority to issue regulations governing NEPA compliance, particularly where such regulations purport to supplant the duly-issued regulations of other federal agencies.

While the case was dismissed on standing grounds, Judge Randolph sought to “flag” the issue of CEQ authority “lurking in the appeal.” Central to Judge Randolph’s concern is the “unique” history of CEQ, its role within the Executive Office of the President, and, most importantly, the fact that “[n]o statute grants CEQ the authority to issue binding regulations.” After noting that the parties “neglected to address” this foundational issue, Judge Randolph identified a number of questions that would be raised if CEQ has the authority it claims and opined that where “‘there is so much smoke, there must be a fair amount of fire, and we would do well to analyze the causes.’”

Time will tell whether litigants take up this foundational question.

What’s Next? Questions Continue to Lurk

In the meantime, with a new Administration in place, CEQ is in the process of reviewing the 2020 revisions to its NEPA regulations and announced that it has identified “substantial concerns” with those revisions. The Council is expected to propose a number of further revisions to its regulations, including revisions that would roll back many changes made in 2020.  However, CEQ will not eliminate its regulations entirely, nor is it expected to entirely eliminate the provisions in the regulations providing that the regulations are binding on other federal agencies.

As a result, questions about the extent of CEQ’s authority to direct the steps that other agencies must take to comply with NEPA will continue to lurk, awaiting an opportunity for the D.C. Circuit or another federal court to finally decide the question.