The latest on the National Environmental Policy Act’s (NEPA) environmental review process – including actions from the White House, the courts, and Congress.

As many of you are aware, reform to the National Environmental Policy Act’s (NEPA) environmental review process is a top priority for AGC and the construction industry during this administration. Because so many of our members are rightfully paying attention to this important issue, this article provides an update on NEPA reform efforts by AGC and around the government.

At the White House

President Trump’s Executive Order, “Unleashing American Energy” included a section aimed at NEPA reform. In the order, the President ordered the Chairman of the Council on Environmental Quality (CEQ), the White House office in charge of NEPA regulations, to issue guidance on a streamlined NEPA process and to propose rescinding the existing NEPA regulations. Notably, guidance is not mandatory or binding on federal agencies while regulations are strictly enforced by the courts.

President Trump revoked President Carter’s Executive Order 11991. This order gave CEQ the authority to issue regulations regarding NEPA and ordered federal agencies to comply with such regulations. While it is unclear what implications this rescission will have in the coming months, it’s a clear indicator that the role of CEQ in the agency decision-making process is under review.

These developments come as a reaction to CEQ’s Phase 2 NEPA rule from last year. The rule added climate and community requirements that protracted the review process, against Congressional orders. At the time, AGC offered comments (here and here) outlining how the Phase 2 rule was in conflict with the NEPA amendments included in 2023’s Fiscal Responsibility Act.

In the Courts

Last November, a dissident DC Circuit Court Judge took aim at CEQ. In Marin Audubon Society vs FAA, a case surrounding aerial sightseeing tours in national parks, Senior Circuit Judge Raymond Randolph declared that CEQ lacks the authority to issue NEPA regulations. This assertion, which was uninvited and not at issue in the case, upend a 40-year regime wherein CEQ regulates agencies with regard to NEPA compliance.

Because CEQ’s authority was not at issue in the case, the holding does not declare CEQ regulations void. However, such strong language from a senior DC Circuit Court Judge was bound to invite fellow NEPA skeptics to make such a holding. On February 3^rd, we had our first taker.

In Iowa vs. CEQ, the State of Iowa challenged CEQ authority outright. The court ruled that “the first step to fixing a problem is admitting you have one. The truth is that for the past forty years all three branches of government operated under the erroneous assumption that CEQ had authority. But now everyone knows the state of the emperor’s clothing and it is something we cannot unsee.

Caption: The Federal permit process

In addition, AGC has filed an amicus brief in Seven County Infrastructure v. Eagle County, Colorado, a Supreme Court case involving NEPA requirements to analyze hypothetical impacts. Joining forces with the U.S. Chamber of Commerce and other business groups, AGC of America’s brief urges the Court to reverse a ruling by the U.S. Court of Appeals for the District of Columbia Circuit that, if left in place, would set a dangerous precedent. The ruling would force government agencies to evaluate environmental impacts far beyond their regulatory scope, creating unnecessary hurdles for construction projects across the country.

The impact of these cases will become clear after Congress and the White House have had a chance to react to them. AGC will be closely monitoring this issue and will continue to provide updates.

On Capitol Hill

The Senate Committee on the Environment and Public Works is holding a hearing on February 19, 2025, to identify areas where NEPA and related federal laws might be amended in order to streamline the permitting and environmental review process. AGC’s General Counsel Leah Pilconis has been invited to testify on the construction industry’s recommendations to ensure a timely, predictable, and efficient project delivery process. It's an exciting time for NEPA reformists – and AGC is right at the center of the conversation. We will continue to engage with all three branches of government on this issue and provide our members with the most up-to-date feedback and guidance regarding NEPA compliance.

Thank you for your contributions to the Construction Advocacy Fund which made AGC’s involvement in NEPA litigation possible.

For additional information, please contact Spencer Phillips.