This piece was originally published in the Techno-Industrial Policy Playbook.
Summary
President Trump's "Unleashing American Energy" executive order, which rescinded the Council on Environmental Quality (CEQ)'s regulatory authority, has created a generational opportunity to streamline the National Environmental Policy Act (NEPA). To achieve the president's energy dominance goals, the administration should implement three core reforms: narrow the set of actions that trigger NEPA, expand categorical exclusions, and narrow the set of actions that require an environmental impact statement. These changes would significantly reduce the scope and number of environmental reviews under NEPA, leveraging existing statutory authority and recent court decisions to accelerate infrastructure development without requiring new legislation.
Problem
CEQ, established under NEPA in 1969 as the White House's environmental policy office, oversees NEPA implementation across all federal agencies. Over decades, CEQ regulations have expanded NEPA's reach far beyond its original mandate, creating substantial barriers to infrastructure development and technological innovation. Projects face years of delays and litigation risk due to overly broad interpretations of key statutory terms. The recent DC Circuit's decision in Marin Audubon Society v. FAA invalidating CEQ's regulatory authority, combined with the Fiscal Responsibility Act (FRA)'s statutory changes, creates a unique window for reform. The FRA included significant amendments to NEPA's core definitions, creating a statutory basis for streamlining environmental reviews and reducing regulatory burden. Without action, infrastructure projects will continue facing unnecessary delays and costs, hampering America's ability to build critical infrastructure and maintain technological leadership. With these reforms, agencies could focus resources on truly significant environmental impacts while accelerating approvals.
Solution
NEPA's review framework operates through three key decision points. The first filter determines what constitutes a "major Federal action." When an activity qualifies as a "major Federal action," it enters the NEPA review process, while activities falling outside this definition bypass NEPA requirements entirely. The second filter addresses categorical exclusions. Actions with environmental impacts that "normally" aren't "significant" can be categorically excluded, allowing these actions to skip detailed review and proceed with minimal documentation. All other actions require at least an Environmental Assessment (EA). The third filter distinguishes between Environmental Assessment and Environmental Impact Statement (EIS) requirements. For actions requiring review, the "reasonable foreseeability" of significant impacts determines the level of scrutiny. Actions with impacts that aren't "reasonably foreseeable" need only an EA, while only those with "reasonably foreseeable" significant impacts require the comprehensive EIS process.
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