The Council on Environmental Quality's (CEQ) rescission of the National Environmental Policy Act (NEPA) Implementing Regulations, effective Friday, April 11, may bring about a significant change in the federal environmental regulatory landscape. MZLS, attorneys at law, offers analysis on how this regulatory realignment will impact energy, infrastructure, and other development projects.

The removal of CEQ's longstanding NEPA Implementing Regulations initiates a transition in the environmental review process, with implications for regulatory compliance and project permitting.

“This regulatory change may be a step toward addressing longstanding inefficiencies in environmental reviews," says Anthony Maceira Zayas, founder of MZLS. "We are in favor of streamlining the federal review process, which averages 3 years and sometimes slows down projects and duplicates work in states that have NEPA equivalent laws such as Puerto Rico. When addressing the reconstruction of critical infrastructure following natural disasters and ensuring continued power supply for life-saving services, a dual-assessment system can create unnecessary delays that put vulnerable communities at risk. We are following closely to see how this change evolves and affects projects."

"Some have interpreted this as a simplification of the permitting process, but the reality is more nuanced and potentially more complex for developers with multi-agency projects," adds Alexaida Collet, MZLS attorney based in the firm's Washington, D.C. office, specializing in construction law, environmental permitting, and federal regulatory compliance.

The rescission removes the unifying framework that has governed environmental reviews across federal agencies since 1978. While NEPA compliance remains mandatory for projects requiring federal permits, licenses, or funding, each agency must now develop or revise its own implementing regulations within the next year.

“Without CEQ's regulations serving as the master blueprint for environmental reviews, we face potential fragmentation in how different agencies approach the process," explains Collet. "A project requiring approvals from multiple federal bodies might encounter different documentation requirements, impact analysis scopes, or timelines from each agency, creating a more challenging landscape to navigate."

However, the current Administration has signaled strongly its intention to streamline federal permitting. Executive Order 14154, "Unleashing American Energy," explicitly instructs agencies to "expedite and simplify the permitting process." CEQ's guidance memorandum to the agencies encourages them to use the efficiency-focused 2020 NEPA regulations as a starting point for their revised procedures.

"If agencies adopt streamlining measures and the resulting implementing regulations are consistent across agencies, developers could eventually benefit from faster approvals," Collet notes. "However, immediate benefits are unlikely as CEQ has instructed agencies to maintain existing procedures during the transition."

Energy and construction stakeholders should anticipate a potentially fragmented regulatory environment as agencies develop varied approaches to NEPA implementation. MZLS advises that companies with cross-jurisdictional projects could face particular challenges, as federal agencies may adopt inconsistent standards for environmental assessments. This regulatory shift represents a reallocation of environmental review authority rather than straightforward deregulation.

Adding to the complexity is NEPA's status as the United States's most litigated environmental statute. Each agency's new or revised regulations must undergo notice-and-comment rulemaking and may face legal challenges from various stakeholders.

"This regulatory shift represents both challenge and opportunity," Maceira emphasizes. "While agencies work toward creating more efficient processes, we're in an important planning period.”