The National Environmental Policy Act: How It Is Working, How It Should Work

The National Environmental Policy Act of 1969¹ (NEPA) was intended to bring about fundamental reform on all levels of the federal decision-making process where the environment was concerned. On its fourth anniversary (the law was signed on New Year's Day, 1970), the Act still has far to go in achieving its ambitious goals. Yet the progress that it has made has revitalized many of the bureaucratic processes that slight environmental values. Certain changes in its implementation, discussed here, could make the Act go much further toward realization of its innovative mandate.

Before NEPA's passage Congress gave almost no attention at all to how the revolutionary new legislation would be received by a reluctant bureaucracy. Admittedly, the record discusses the action-forcing procedures which were supposed to ensure that concrete results would flow from the adoption of the more abstract environmental policy. But beyond a few brief remarks indicating that the agencies would police themselves with minimal OMB oversight, Congress said nothing about how the Act would be enforced.

Yet within a year of passage, the future course of NEPA's implementation appeared to be set. Interestingly, both the agencies and OMB resisted NEPA, while the courts and CEQ, and to a lesser extent EPA and Congress itself, have played the leading oversight roles. The CEQ quickly shepherded Executive Order 11514 through the White House, asserting for itself a key role that the Act neglected to provide. The OMB willingly relinquished its apparent authority in this area. Through its guidelines for agencies, CEQ began to influence heavily the method and scope of agency NEPA compliance. Meanwhile thecourts began to assert wide powers to review agency compliance with the Act. Vigorous judicial interpretation would eventually make the courts the principal enforcers of NEPA. Congress was also active.It provided oversight hearings and other expressions of concern and interest, not all favorable to the Act. Finally, EPA began to play a minor but still potentially significant role in the impact statement process through the authority conferred upon it by § 309 of the Clean Air Act.

Remembering how easy it is to criticize after the fact, one may speculate why Congress did not give more attention to the dynamics of NEPA's implementation. On the one hand, many legislators appeared to vote for NEPA only for the noble sentiment it expressed. It did not occur to them that the "action-forcing" provisions would cause any really significant changes in the agencies at all. On the other, those for whom NEPA aroused great expectations appeared to believe that if only the agencies were provided with the facts, they would behave rationally and make environmentally sound decisions. To them NEPA was premised upon decision making underpinned by a rational policy-making process; the Act rejected the unenlightened incrementalist approach — "muddling through" with small decisions, none individually of great significance but cumulatively destructive of the environemtn. To believe that NEPA would work, one has only to believe with Milton that the truth cannot be bested in a fair fight. Fortunately, the course of NEPA's actual implementation reflected a more cynical view of bureaucratic, if not human behavior.

Perhaps understandably, few federal agencies welcomed the passage of NEPA. Heralded as an administrative reform statute that would force action favorable to the environment from a reluctant bureaucracy, NEPA soon was responsible for unfamiliar new procedures that interrupted the ordinary flow of agency business, slowed the progress of key programs, and imposed tough new standards for project justification. Courts repeatedly sent procedures and impact statements back to the agencies to be redone, sometimes accompanied by pungent commentary on half-hearted NEPA compliance.

The Federa, Power Commission's refusal to accept the Second Circuit's decision in the Greene County case is illustrative.² In Greene County the FPC unsuccessfully defended its practice of delegating the early phases of NEPA compliance to license applicants and intervenors. Incensed at the result, the FPC asked for and was denied a hearing en banc. Still it refused to implement the court's order, explaining in its administrative orders that it believed Greene County to be narrowly limited to the facts and that it intended to exhaust every appeal before complying. Only after certiorari was denied did the FPC publish proposed guidelines implementing the decision. Fifteen days were allowed for public comment.

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Almost four years after enactment, NEPA is much less the bete noire of the administrative process. Encouraged by the CEQ and a large body of case law, almost all of the agencies have settled down to live with the Act. By the end of 1973, almost 5,000 impact statements had been prepared. Over 70 departments, agencies, or subagencies had published formal implementing procedures. In several agencies, NEPA implementation occupies a high branch in the organizational tree. Many departments and agencies have set up impact analysis staffs as adjuncts of their operating branches, although the number of scientists capable of vigorous environmental analysis in the development-oriented agencies still is quite small. Until this number is substantially increased, agencies are unlikely to internalize NEPA's environmental ethic or to be able to develop analyses which can survive review of adequacy by the courts.

An increase in NEPA-related activities and the cessation of open hostilities, however, may only indicate that the agencies have found a way to comply with the letter of the Act, not its spirit.Some commentators think that agencies have become proficient at preparing statements filled with legal "boilerplate" which still leaves them free to reach the environmentally destructive end results that NEPA is supposed to stop. The CEQ and a number of other commentators within the agencies disagree. They think NEPA began to bring about subtle, pervasive change within a year or two of enactment. Outsiders have been more skeptical. However, the examples of NEPA's achievements "on the ground," as detailed in the CEQ's Fourth Annual Report, go a long way toward reducing this skepticism. It is hard to dismiss as ineffectual a statute which the Corps of Engineers says caused it to drop 24 projects, temporarily or indefinitely delay 44, and significantly modify 197 more.³

The problem of assessing NEPA's achievements is more complex than it may seem. Participants in federal decision making say they cannot be certain how large a role NEPA played in influencing agency decisions that could have been more damaging to the environment, but they are confident that it deserves at least some credit. The state, for example, that it has figured prominently in inter-agency discussions, that intra-agency offices have used it for leverage over the adverse effects approved by others, and that citizens who object to projects have influenced agencies through the commenting process. They also remark that the agencies are not anxious to draw the attention of developmental interests to such decisions. Outside commentators, on the other hand, perhaps unaware of the range of options considered and the forces in conflict within the agencies, have tried to measure by the rcord and the end result. They are frequently disappointed.

The decided cases indicate that the quality of agency performance leaves much to be desired. Procedural compliance has definitely improved, but basic agency initiatives appear still to be formulated without an informed environmental perspective. The cases suggest that agency decision making often precedes environmental impact analysis, which then becomes an after-the-fact rationalization.

The courts have been by far the most important overseers of NEPA's implementation. They have been vigorous in reviewing agency compliance with NEPA. They have enforced a strict standard of procedural compliance, imposed judge-made requirements which give the Act a wide scope, and expanded traditional concepts of reviewable agency action by probing deeply into the components of agency decisions.

The reasons behind the willingness of the courts to engage in exacting review of agency decisions under NEPA are numerous and complex. Factors as varied as the nationwide concern about environmental quality; growing awareness that agencies are often captives of the industries they are supposed to regulate; belief of many judges that they have too long neglected to examine the quality of agency decision-making; the creation of public interest law firms willing and able to bring well-conceived suits; and the tendency of courts to enforce procedural requirements strictly when they cannot reach substantive agency decisions, have all certainly played some role in influencing the courts to accept NEPA jurisdiction. The Act's requirement of compliance "to the fullest extent possible" for all agencies has also made an important difference.

Yet two particular reasons appear to outweigh the rest. The first is that NEPA was enacted at just the time that the courts were generally tightening their review of agency decision making, so that they welcomed NEPA as an additional statutory basis for close judicial review. Both NEPA and the evolving standards of judicial review call for the establishment by the agencies of better ground rules for decision making; the articulation in the record of the reasoning which supports the decision taken; the elaboration of the risks which a proposed action entails; consideration of alternatives as a test of the soundness of decisions taken; greater public access to the process; a broader view of the public interest under longstanding agency missions; and increased public participation.

The second reason is that in groping for the appropriate judicial role through NEPA, the courts may actually be evolving a new and higher standard of review for environmental cases. Judicial review as it evolved in the heyday of economic regulation may be inadequate for today's agency decisions affecting health, life, and similar intensely personal interests, which have always had a special claim to judicial protection.

While the courts have played the leading role, the Executive Branch has not been entirely idle. The CEQ seized an opportunity for oversight by shepherding Executive

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Order 11514 through OMB and the White House, preparing three sets of progressively tighter guidelines for agency impact analysis, and conducting informal reviews of agency procedures and statements. Courts and agencies alike have relied heavily upon CEQ interpretations of the Act. The oversight role, however, has come into conflict with the CEQ's position during its first four years that it should serve primarily as confidential environmental advisor to the president. Thus the Council has not officially approved or disapproved particular agency NEPA procedures, nor implemented a system of written, publicly-available reviews of statement adequacy or of agency decisions not to prepare statements, nor offered to prepare key program and policy statements itself where White House or inter-agency treatment is merited. All of these possibilities are still open to the CEQ as it enters a new phase of development.

The Environmental Protection Agency has adopted a rather paradoxical attitude toward NEPA's implementation.On the one hand, it has resisted preparing impact statements itself and has even obtained one of the few statutory exemptions from NEPA for its water quality control program.On the other, EPA has taken an interest in becoming a NEPA ombudsman through § 309 of the Clean Air Act, which empowers it to prepare a formal, written review of the environmental acceptability of the actions and impact statements of other agencies. In our view, the general arguments for statement preparation by EPA outweigh those against, and the § 309 review process would be strengthened if EPA were to set a good example by itself preparing outstanding NEPA procedures and impact statements.

Congress has been of two minds about NEPA ever since it voted overwhelmingly for enactment. Its friends in Congress have urged more thoroughgoing implementation on the agencies and CEQ and have fought passage of exemptions from NEPA's coverage, while its detractors have sought amendments to soften the Act's impact. Despite this contest, NEPA fared well over the past four years, with only three exemptions being granted: the Alaskan oil pipeline, EPA's water quality program, and the San Antonio Freeway. (At this writing the fate of further temporary exemptions based on the "energy crisis" had not yet been finally decided.)

Congress' failure to rely upon the § 102 process for information has been disappointing. NEPA's legislative history repeatedly emphasized Congress' need for reliable environmental data upon which to base its legislative decisions. Though the Act was explicitly drafted to provide Congress just such data through the § 102(2)(C) requirement for impact statements on legislation, Congress has neither required such statements to be prepared nor used in its deliberations the few such statements that the agencies have prepared.

The scope of the NEPA mandate to the agencies can be stated in rather simple language, relying upon the formulation used in the Calvert Cliffs' opinion. NEPA empowers and compels federal agencies to take actual account of environmental factors in decision making. They must trade off environmental factors against economic, social, and technical factors in a "finely tuned and systematic balancing analysis." This mandate, however, has proven difficult to implement as it is easy to state. Without a viable approach to placing priorities, preferences, and weights on specific factors, the balancing process proceeds amidst great uncertainty and invites agencies to fall back on the "hard" data gathered to support established agency missions.

For this reason, apparently, four separate circuit courts and several district courts have found that § 101, which states the national environmental policy, is specific enough to permit judicial review of the merits of agency proposals. Thus it may come about in a new generation of NEPA lawsuits that the courts will furnish the specifics for the "balancing analysis" which Calvert Cliffs' failed to provide. Although the agencies will continue to make basic decisions about the projects which they undertake, the courts may find that the provisions of § 101 limit the decisions that can be made as a matter of law.

Despite the apparent clarity of the Act's mandate to the agencies, important questions about its scope still exist four years after enactment.It should be plain by now that an agency may cancel some projects and modify others in order to implement the national environmental policy. Yet to take one example, some have urged that the Federal Highway Administration cannot refuse to spend funds because of the environmental damage its projects might cause. This debate overlooks the fact that agencies must reconcile conflicts and fashion compromises, not choose either to carry out a developmental mandate or to protect the environment.

A closely related issue concerns the possible clash between an agency applying NEPA and a second agency with a partially overlapping or conflicting mandate. Calvert Cliffs' held that automatic deference to the views of another agency was inconsistent with the NEPA duty to consider independently all environmental factors in its decisions. Despite the Baker Amendment, which partially overruled Calvert Cliffs' by directing agencies to defer to the water quality effluent limitations which EPA and the states set, the requirement that each agency with the power of decision balance all relevant factors is sound.Whereas the agency balancing under NEPA must trade off a myriad of competing factors with a view toward the overall impact of a project, a sister agency with an overlapping mandate may be statutorily compelled to confine its attention to one of these factors only, in disregard of other important considerations.

A third issue concerning the mandate which NEPA confers is whether an agency can rely upon NEPA as authority for launching an entirely new program of environmental control. We know that the agencies not only [4 ELR 10006] can, but must, take environmental factors into account in discharging existing obligations. But can they affirmatively impose new obligations, in the manner of air, water, pesticide, and other control legislation, relying upon NEPA as a kind of enabling act for authority to do so?

Even the most enthusiastic commentators on the Act agree that NEPA does not confer unlimited power on the agencies, delegate vast areas of congressional authority, and or authorize a free-for-all among agencies for new programs and domains. But as was developed more fully above, between simply adding a new environmental factor to the decisional balance for existing programs, and launching a totally new regulatory or grant program without specific congressional authority, lies a large grey area in which NEPA may properly be applied to strengthen the agency's authority to act. Hence agencies may quite legitimately rely upon NEPA to fill in gaps in their authority to protect the environment.

A fourth important issue regarding the mandate conferred on agencies by NEPA concerns the small federal "handle" on a state or private project that peripheral federal involvement may confer. Can a federal agency refuse to grant a necessary permission or funding for a small part of a project if in its opinion the overall project is environmentally unsound? Put more precisely, can an agency balance all factors concerning a project if its action concerns only one small aspect?

The agencies could stop short of this result without doing violence to NEPA's intent. An agency may consider the environmental consequences of its own decisions without reaching out to assume responsibility for the consequences of related actions under state or private control. Nevertheless, it would better accord with congressional intent if the small federal handle were used in some instances to further the national environmental policy. At some point, federal responsibility, as it is defined in NEPA, does begin to reach the overall environmental acceptability of the basic undertaking.

The small handle question has not been litigated, although a closely related issue has — whether federal involvement is sufficient to require preparation of an impact statement. The two issues are quite different. The scope ofthe federal power to act may be more restricted than the obligation to prepare an impact statement, in which unknown or uncertain federal impacts can be ascertained and federal options can be explored, even if they cannot yet be implemented. An impact statement must cover at a minimum all relevant impacts and options necessary for an informed decision, but it can go far beyond.

Because NEPA requires a balancing-type decision to be made, there is an understandable temptation to have the impact statement include the full record documenting how costs and benefits were traded off. The statement, in other words, would become the basic agency decision paper justifying the course of action taken, and NEPA would become a type to supplementary Administrative Procedure Act.

This is heavy freight for an environmental impact statement to carry and stands in direct opposition to the view that Congress intended the environmental impact statement to be limited to a factual analysis of environmental costs and benefits. Under this interpretation NEPA analysis is thought of as a limited inquiry into only one set of factors that goes into the agency's decision-making process.

There is merit to both views. Compiling one central decision document creates a single written project justification which facilitates review by the executive, the public and the courts. As a practical matter, analysis of environmental impacts does not proceed very well absent some mention of technical factors and developmental benefits, which arguably need to be discussed alongside environmental factors to put them into context. On the other hand, there is a danger that project justifications and economic and technical considerations will swallow up environmental impact analysis if the scope of the statement is expanded. Many statements already bear out this concern. The broader concept invites the use of the impact statement to set forth what the agenciew know best — the reasons why projects should go forward.

A compromise position that still favors a statement of limited scope seems to offer the most attractive solution. First, an impact statement that discusses alternative — a key NEPA requirement — without analyzing all important costs and benefits would certainly be inadequate. The discussion of alternatives must be wide-ranging if the statement is to be at all meaningful. Second, brief reference in the statement to developmental benefits would not be offensive, to the extent the reference is necessary to make the environmental analysis intelligible to readers of the statement who are not familiar with the project.

Enforcement of NEPA has focused overwhelmingly on the project level, without a corresponding emphasis upon early planning; the result has often been situations grossly at variance with NEPA's legislative history. As described above, NEPA's drafters rejected the incremental approach of making many small decisions somehow supposed to serve the public interest. In the environmental world of highly interactive components, these small decisions almost invariably produced more aggregate harm than good. Application of NEPA to these small decisions may result in some mitigation of harm, but often it produces only frustration for both a project's backers and its opponents. Premised as it is on a highly integrated policy-making process, NEPA cannot possibly succeed if it is applied only at the project level.

Most judicial challenges therefore fail to confront federal threats to the environment at the maximum leverage points. These points first emerge in the earliest phases of federal planning — the writing of new legislation, formulation of federal policies, design of entire federal programs, and preparation of guidelines — when [4 ELR 10007] envirnmental impacts may be avoided before prestige, time, and money are committed.

The most useful and timely impact statements are those which agencies are supposed to prepare for "every recommendation or report on proposals for legislation." Despite the use Congress could make of legislative impact statements to survey a wide array of alternatives well in advance of potential environmental harm, the implementation of this requirement has languished. Congress, OMB, CEQ, and the agencies have shown little interest in policing the requirement. Nor have many lawsuits been filed to compel preparation, probably because appropriate relief is difficult to formulate.

In view of the emphasis in NEPA's legislative history upon advance planning and on prevention of decision making in destructive increments, it is no surprise that the legislative history also states expressly that "regulations, policy statements, or expansion or revision of ongoing programs" must be covered by impact statements. The basic decisions made in the early phases of program design have a greater potential for environmental harm than separate project decisions at a later time. A "program," "umbrella," or "overview" impact statement consequently offers on occasion for consideration of basic policies, programmatic alternatives, geographic variations, cumulative impacts, and overall effects of largescale programs or chains of proposed projects. Such review cannot realistically take place in a statement on an individual action. Yet only about 50 such statements, largely on environmentally protective legislation, have been prepared.

Many "major federal actions" are likely to occur before a particular federal initiative is completed. A large archive of successive environmental analyses may accumulate if impact statements are prepared at each "distinct and comprehensive" stage of an intiative, especially if impact statement preparation at the earliest possible opportunity becomes the rule.But rather than causing duplication and needless paperwork, these successive layers of statements can actually rationalize and simplify the § 102 process.

Under this approach, the first statement prepared would cover pending legislation or broad, new federal policies; statements to follow would be prepared as each distinct initiative in implementing the legislation or policy was formulated. The later statements would cover increasingly specific programmatic initiatives and impacts, and would refer back to the broader statements for their treatment of far-ranging alternatives and basic federal policy.

Numerous advantages could be obtained through this approach. It would establish a record of least-cost, gradually circumscribed decision making without subjecting the agency to reconsideration of basic principles each time a specific action was contemplated. This view is shared by the CEQ, which has suggested that the agency should issue broad program statements in addition to subsequent statements on major individual actions to cover localized environmental impacts.

As this approach gained currency, it would primarily affect the requirements for statement adquacy. No rigid set of rules for statement preparation could be written; the adequacy of the statement would depend upon the "action" analyzed. The courts would most likely welcome such a development and adjust standards of statement adequacy accordingly, as indicated in the Scientists' Institute⁴ case. Many of the current problems of the agencies stem from court-imposed requirements that statements on specific programmatic initiatives must reach back in time to cover the larger policy questions that were in fact resolved months or even years earlier. There is a punitive overtone to some of these decisions. Agencies that passed up an opportunity to comply during the earliest possible phases of decision making may have been required to prepare their statements as if the choices of an earlier point in time still existed.

Judicial reaction to overlapping statement preparation would also be tempered by the wider trend that has altered fundamentally the expectations of reviewing courts. Impact statement preparation in rational "tiers" closely tracks the expanding requirements for fuller justification of administrative action, a preliminary survey of alternatives, and designation of the administrative record back to the time of a proposal's inception.

1. 42 U.S.C. § 4321 et seq. This Comment is based upon the conclusions reached by Frederick R. Anderson in his chapter on NEPA in Federal Environmental Law, a book length analysis to be published for the Environmental Law Institute by the West Publishing Company in early 1974.

2. Greene County Planning Board v. Federal Power Comm'n, 455 F.2d 412, 2 ELR 20017 (2d Cir. 1972), cert. denied, 41 U.S.L.W. 3184 (1972).

3. CEQ Fourth Annual Report 247 (September 1973).

4. Scientists' Institute for Public Information v. Atomic Energy Comm'n, 481 F.2d 1079, 3 ELR 20525 (D.C. Cir. 1973).