The NEPA: Environmental Impact Statements, Compliance, and an Impending Threat to Environmental Regulation

Daniel Bourgault

Associate Editor

Loyola University of Chicago School of Law, JD 2022

On March 25, 2020, a judge for the United States District Court in the District of Columbia held that the Army Corp of Engineers (hereinafter the Corp) failed to comply with the standards of the National Environmental Policy Act (hereinafter “the Act”) by failing to prepare an Environmental Impact Statement (EIS) before deciding to approve federal permits for construction of a portion of the Dakota Access Pipeline which ran under the Mississippi River.  The ruling came four years after the Standing Rock Sioux Tribe brought the original action in 2016.  The Act is meant to ensure the public that agencies have considered the environmental consequences of a potential project before going forward with it, and so requires agencies to consider any and every significant environmental impact that could result from the project through completion of an Environmental Assessment, and, in some cases, an Environmental Impact Statement (EIS).

What are the standards for compliance with the NEPA?

In order to comply with the Act, every agency is required to complete a preliminary Environmental Assessment.  This assessment is meant for the agency to conduct an analysis to determine if any significant environmental impact may occur, and to present the evidence.  If the assessment indicates that there is a possible significant impact, the Act’s standards (set forth in 42 USC 4332(c)) then require an EIS to be prepared before the agency takes any action, outlining in detail: (1) the environmental impacts of the project; (2) any alternative to the project; and (3) whether there would be sufficient precautions to minimize any potential significant impact.  In determining if an action may have a significant impact, the agency must examine the context and intensity of the action; the latter is based on 10 factors, and the standard requires that only one factor be significant to require an EIS.  An agency is not required to take any specific actions, but in order to comply with the standard set out by the court they must not be arbitrary or capricious in conducting their Environmental Assessment, and .  In the case in which an EIS is required, the Office of NEPA Policy and Assistance published an EIS checklist to assist with compliance.

The Corps failure to comply with the NEPA

In this case, the Corp failed to adequately consider one of the ten factors: the degree to which the effects on the quality of the human environment are likely to be highly controversial. The standard for “highly controversial” requires more than merely the fact that “people won’t like it” and requires some evidence that there were flaws in the agency’s methods or data.  When a court is determining whether an agency has complied, they consider whether the agency accurately identified relevant environmental concerns, whether they took a “hard look” at the problem, if they are able to make a convincing argument that there is no significant impact, and whether there are significant safeguards that would reduce the impact to a minimum if it is significant.

The Corps concluded that an EIS was not necessary, but many other agencies respected in the realm of environmental regulations (including the EPA) voiced concerns with the Corps methods and claimed that they were controversial, specifically in regard to the pipeline’s leak-detection system.  The Corps argued that they complied with the Act by “acknowledging and trying to address” the issues that were brought up, but the court denied this argument, stating that the standard to be satisfied, set forth by recent precedent, required them not only to try but to succeed.  Among the concerns was the shortcoming of the leak-detection system to detect a “small” leak, which could be as big as 25,200 gallons a day.

Ultimately, the court suspended the project until the Corp came into compliance with the Act by conducting an adequate EIS, but the suspension was appealed an stayed allowing the oil to continue flowing while the EIS is completed.  This standard provided a victory for the Sioux Tribe for now, but the Corp will have another chance to get the federal permits it needs after completing an EIS, which it expects to complete by 2021.  Through the EIS requirement, the NEPA ensures that agencies are not disregarding the environmental impact of potential projects and that they successfully address any environmental concerns of projects they wish to undergo, and the Act serves as an obstacle to projects with a high potential for causing adverse environmental consequences.

Impending threats to NEPA’s regulatory impact

The regulatory impact of NEPA illustrated above is being threatened both temporarily and permanently: temporarily by a recent executive order (EO) meant to allow projects with potential to have significant adverse effects on the environment to circumvent compliance with NEPA in emergency situations, and permanently by a Final Rule adopted by the Council of Environmental Quality (CEQ) which effectively guts the NEPA’s regulatory significance.

The CEQ expressly authorizes agencies to consult with the CEQ to make “alternative arrangements” to NEPA regulatory requirements if an emergency circumstance necessitates action that could have a significant detrimental impact on the environment.  The EO calls for heads of governmental agencies to pursue projects that normally would not satisfy the regulations of NEPA in order to “facilitate the Nation’s economic recovery” in the wake of COVID-19.  This is an important endeavor, but this executive action could serve as a pathway to compliance with the NEPA, or exemption from the NEPA altogether, for projects likely to have a significant harmful impact on the environment where there was not before.  While emergencies can necessitate actions we normally would not undertake, this EO call for heads of agencies to purposefully probe for projects to undergo through this loophole that normally would not pass the NEPA standards, and directly undermines the purpose of the Act.

Even more dangerous though is the CEQ’s Final Rule.  The Rule codifies broad exemptions to the Act itself; diminishes the regulatory procedure, standards, and structures put in place to enforce it; alters the overall purpose of the Act which has been its foundation since its establishment; limits the overall scope of the Act; and in consummation overhauls the Act to a point where it is but a shell of what it was intended to be and is today.  As a result, Illinois Attorney General Raoul joined nineteen other states along with several counties, the territory of Guam, and the District of Columbia in a lawsuit seeking that the Rule be found unlawfully in violation of the NEPA and the Administrative Procedure Act (APA).

Ultimately, this Rule threatens to permanently render the NEPA ineffective as our nation’s most fundamental tool for environmental protection and regulation, and this lawsuit will be a landmark decision which will determine our government’s role in environmental regulation and protection for years to come.