CEQ Proposes Ambitious NEPA Regulations for Comment, Stands Ground Despite Agency Criticism

The Council on Environmental Quality (CEQ) has promulgated for public comment proposed regulations designed both to reform and upgrade federal agency compliance with all aspects of the National Environmental Policy Act (NEPA), and to lessen the burden felt by the agencies in preparing environmental impact statements (EISs) under the Act.¹ The regulations were drafted in response to Executive Order No. 11991,² which directed the Council to revise and reissue in the form of binding regulations its current advisory.NEPA compliance Guidelines.³ The regulations are aimed at reducing the considerable paperwork, delay, and duplication to which existing NEPA procedures are subject and improving the quality of federal decisions affecting the environment.

Background

In June 1977, CEQ held public hearings on the subject of reforming the NEPA process. Not surprisingly, there was a general consensus that although the Act's goals of more environmentally conscious federal decision making are laudable, implementation of its mandate by the federal bureaucracy has frustrated achievement of that goal with an avalanche of procedure and paperwork.

The following December a draft set of regulations which far exceeded the scope and rigorousness of the current Guidelines was prepared and circulated for interagency review.⁴ Whereas the Guidelines had been limited to issues concerning the preparation of environmental impact statements under § 102(2)(C) of the Act, the draft regulations covered virtually all aspects of agency compliance with NEPA's provisions, in keeping with the broader authority under which they were promulgated. The draft envisioned revising the recommended EIS format from the present practice of [8 ELR 10130] establishing five separate sections to address the five subsections of § 102(2)(C), to a three-step procedure in which the preparer focuses on (1) alternatives to the proposed action, (2) the environmental consequences, and (3) the affected area. The draft also proposed that impact statements normally not exceed 150 pages in length, and that bulky "dandelion count" data be relegated to appendices.

The consensus in which the Council had basked during the summer quickly disappeared, however, when the draft underwent interagency review. The comments received from other agencies were not made available to the public, but it is widely known that the draft was not well received. Although the reviews were mixed, some went so far as to contend that the Council had exceeded the bounds of the authorizing Executive Order, the Act, the case law, and a decent appreciation for bureaucratic reality. The often heated interagency response led to speculation that many of the more ambitious provisions of the package would be pared down prior to formal public release in proposed form. This prediction was generally not borne out.The regulations show scores of changes from the earlier draft, but the vast majority of these are cosmetic. Many of the revisions are accomodations to minor practical problems which surfaced within interagency review, and others reflect last-minutefine-tuning by CEQ, either clarifying confusing sections or polishing the language. The significance of the latest version, therefore, lies principally in the fact that virtually all features of the interagency draft, including the streamlining of the process and the most hotly disputed provisions, remain essentially intact.

Significant Unrevised Provisions

Perhaps the most bitter if not the most frequent agency criticism of the December draft was that it wrongly attempted to dictate the NEPA procedures and policies of the independent regulatory agencies. Section 1500.3 provides that the regulations apply to "all federal agencies," paralleling the language of the Act⁵ and embodying CEQ's view that the regulations do no more than interpret the statute's procedural mandates and should apply coextensively. Implicit in CEQ's position is the concern that to exempt regulatory agencies would ignore a major source of environmentally threatening federal actions.

Though admitting that they are subject to the Act to the same extent as all other federal agencies, the regulatory agencies argued that the preservation of their unique and independent status as a "fourth branch of government" requires that they obey only the substantive and procedural mandates of Congress, not regulations issued by the executive branch. These protests were apparently unavailing. Section 1500.3 emerged from interagency review essentially unscathed and was reinforced by the addition of a new definition of "Federal Agency" which clearly, though not explicitly, encompasses regulatory agencies.⁶

A less intense but more widely dispersed attack was directed at the requirement in the December draft that impact statement preparers select the "environmentally preferable alternative" among those considered and, if that alternative is rejected, explain in a separate section of the statement why other considerations of the "national" policy overrode that choice.⁷ The potential impact of this seemingly innocuous requirement was not missed by the agencies. Aside from difficulties in applying such a subjective standard, this proviso could be read to imply that, for the first time, decision makers must delineate the actual balance struck and the tradeoffs made between competing options. Reviewing courts might analogize to Citizens to Preserve Overton Park v. Volpe,⁸ in which the Supreme Court held that the federal official with final responsibility for the matter could be compelled to testify to the details of his private deliberations to show justification for the alternative finally selected. Another foreseeable problem is that agencies might find it politically distasteful to detail publicly the extent to which environmental integrity has been deliberately sacrificed in pursuit of "economic progress," "energy independence," and other short- or medium-term objectives.

The opposingargument is that NEPA's directive to adopt a balanced and "interdisciplinary" approach requires no less than that the alternatives be examined, at least at one point, from a pro-environment orientation, rather than simply determining which alternative is best according to the agency's usual criteria. Furthermore, if such decisions are made in good faith, they will remain insulated from judicial reversal unless "arbitrary and capricious" under the Administrative Procedure Act.

CEQ refused to relent on this issue, and the strength of its conviction is reflected in a recent revision to draft § 1505.2(C). That section directs that impact statements be accompanied by a "concise public record of decision" which summarizes the decision reached, reiterates or condenses the "environmentally preferable alternative" discussion within the EIS, and sets forth any mitigation plans adopted. Whereas the interagency draft required only a description of such mitigation measures, apparently to assess subsequent compliance, the latest version mandates an explanation of the reasons behind the rejection of any practicable mitigation alternatives. Apparently, the intent is to require specific elaboration of yet another administrative decision.

Significant Revisions

If any aspect of the proposed regulations is arguably lacking a firm statutory footing, it may be a new addition providing:

It is the Council's intention that judicial review of agency compliance with these regulations not occur before an agency has filed the final environmental impact statement, or has made a finding of no significant impact, or takes action that will result in irreparable injury.⁹

[8 ELR 10131]

Justifications for this recommended limitation on judicial review are difficult to surmise; it may simply be a concession to the agencies, which would certainly welcome any breakwater preventing judicial intervention into administrative processes until the core environmental decisions have been made. The need for such a limitation is dubious, however. The common law doctrine of ripeness¹⁰ as well as decisional interpretations of NEPA's threshold applicability¹¹ are generally adequate to prevent premature litigation. Moreover, prudential limitations on the availability of prompt judicial enforcement of NEPA's requirements are inconsistent with the spirit if not the letter of the statute¹² and conflict with traditional standards governing the issuance of injunctive relief. In more practical terms, the economic costs of delaying civil enforcement suits until the plans for the contested federal action have solidified and cost-benefit analyses have become irrevocably biased because initial investments may substantially harm the NEPA process.

The second noteworthy revision to the December draft relates to agency proposals for legislation. Despite the unambiguous statutory directive that impact statements be prepared for legislative proposals as well as major federal actions, agencies have generally managed to elude this requirement.¹³ The earlier draft of CEQ's proposals partially acceded to past practice by requiring only draft EISs in this context, but because of CEQ's tightening of the standards for draft documents¹⁴ this was little consolation to the agencies.

The definition of "legislation" has since been modified to exclude requests for appropriations.¹⁵ In a footnote to the proposed regulations, the Council states that this modification was made after consultation with OMB, but that the D.C. Circuit's subsequent ruling in Sierra Club v. Andrus¹⁶ has raised additional implications which the Council apparently had not had time to consider prior to release of the proposed regulations. Public comment on this issue was explicitly requested.

Presumably in response to interagency comments, the proposed regulations have also been amended to allow agencies, within internal NEPA regulations that all agencies have been encouraged to adopt, to provide limited exceptions to the normal EIS procedures in the case of actions which have been properly classified as secret, pursuant to executive order or statute, in the interest of national security of foreign policy.¹⁷ In such cases, the environmental document may be totally withheld from public circulation, but the regulations encourage circulation of nonsensitive segments.

The international reach of NEPA is an issue that has recently been the focus of heated controversy.¹⁸ The interagency draft explicitly declined to deal with the question, but the Council reports that the "international" section of the regulations is now moving toward public release in proposed form on a separate track. If § 1500.3 of the proposed regulations were broadly interpreted to carve out a "national security/foreign policy" exemption allowing EISs on most foreign activities to be withheld from the public, to a certain extent it might moot the question of the Act's international application. The preparation of impact statements would, of course, be a less onerous task if they were effectively insulated from judicial review. The regulations' "foreign policy exemption" is narrowly worded, however, and will likely be supplanted by the forthcoming "international" regulations.

Other provisions of the regulations may be worthy of note in passing. Section 1501.6 has been amended to render state and local agencies with interest in a proposed action ineligible to become "cooperating agencies."¹⁹ Such agencies may still become a "joint lead agency," however,²⁰ and, of course, may prepare EISs in their entirety when authorized to do so pursuant to NEPA.²¹ A related change has made state impact statements ineligible for adoption within federal statements on a similar subject matter.²²

Section 1501.6 has also been amended to reverse and clarify the previous interagency funding arrangement. Lead agencies are now expected to fund the costs of EIS preparation and interagency consultation except where such costs are minor and can be easily borne by cooperating and consulting agencies.

Finally, the effective date of the regulations has been pushed back by two months to June 1979 at the earliest.

Public Comment Solicited

The recent publication of the proposed regulations in the Federal Register provides the first formal opportunity for public reaction. CEQ can be expected to receive high praise from the environmental community, particularly with respect to provisions imposing a rigorous duty of [8 ELR 10132] public notice and participation upon the agencies.²³ Environmentalists may, however, register displeasure with what may be seen as an attempt to unduly restrict timely judicial review of federal actions that may be in technical violation of NEPA.²⁴ Although affected industry will welcome a streamlined EIS process, some companies may be critical of § 1506.5, which would put an end to the currently popular practice of contracting the drafting of EISs out to businesses which have an economic interest in the proposed project. In addition, federal agencies will no doubt consider the proposal fair game for another round of review, especially where the regulations have been altered since the previous draft.

The Council has identified three topics on which it has a particular interest in public comments: the application of NEPA to legislative proposals in the wake of Sierra Club v. Andrus,²⁵ the merit in a proposal to develop a nationwide, computerized data bank of ecological information contained within impact statements, and the possibility of establishing funding programs to compensate the costs of public participation in the NEPA process. The latter concept is as yet undefined and has received little public discussion to date. Its credibility was boosted by President Carter in a passage in his 1977 Environmental Message²⁶ calling for lowered financial barriers to active public involvement in federal decision making affecting the environment. CEQ's request for commentary may signal the beginning of a fuller and more formal consideration of this important question.

Notwithstanding the lack of substantial revision to the interagency draft, there is reason to believe that when the regulations reemerge for final publication in early fall, major but not life-threatening amputations may be evident. The pronounced interagency division over certain provisions has reportedly been tabled until public comments are received and has yet to be resolved at higher levels in the Carter Administration. A strong public vote of confidence may provide CEQ with a badly needed trump card when the final regulations are hammered out in the White House.

1. 43 Fed. Reg. 25230 (June 9, 1978) (to be codified in 40 C.F.R. pt. 1500 et seq.), ELR STAT. & REG. 46017. Comments must be received no later than August 1, 1978.

2. 42 Fed. Reg. 26967 (May 25, 1978).

3. CEQ, Preparation of Environmental Impact Statements: Guidelines, 40 C.F.R. pt. 1500 et seq., ELR STAT. & REG. 46003.

4. For a brief analysis of this draft, see Comment, Reinvigorating the NEPA Process: CEQ's Draft Compliance Regulations Stir Controversy, 8 ELR 10045 (Mar. 1978).

5. NEPA § 102(2)(C), 42 U.S.C. § 4332(2)(C), ELR STAT. & REG. 41010.

6. 40 C.F.R. § 1508.12, ELR STAT. & REG. 46017 (proposed) provides:

"Federal agency" means all agencies of the federal government. It does not mean the Congress, the Judiciary, or the President, including the performance of staff functions for the President in his Executive Office.

7. 40 C.F.R. §§ 1502.14(e), (f), ELR STAT. & REG. 46017 (proposed).

8. 401 U.S. 402, 429-31, 1 ELR 20110, 20114 (1971).

9. 40 C.F.R. § 1500.3, ELR STAT. & REG. 46017 (proposed).

10. See W. RODGERS, ENVIRONMENTAL LAW § 1.9, at 46 (1977).

11. Kleppe v. Sierra Club, 427 U.S. 390, 6 ELR 20532 (1976); Scientists' Institute for Public Information v. Atomic Energy Commission, 481 F.2d 1079, 3 ELR 20525 (D.C. Cir. 1973).

12. Anderson, The National Environmental Policy Act in FEDERAL ENVIRONMENTAL LAW 326-31 (Dolgin & Guilbert eds. 1974).

13. See Comment, Impact Statements on Legislative Proposals: Enforcing the Neglected Half of NEPA's Mandate, 7 ELR 10145 (1977).

14. "At the time the draft statement is prepared it must fulfill and satisfy to the fullest extent possible the requirements established for final statements…." 40 C.F.R. § 1502.9, ELR STAT. & REG. 46017 (proposed).

15. 40 C.F.R. § 1508.16, ELR STAT. & REG. 46017 (proposed).

16. __ F.2d __, 8 ELR 20490 (D.C. Cir. 1978) (requests for appropriations must be accompanied by an EIS when proposing significant changes in the environmental status quo). See Comment, NEPA and the Budget Process: D.C. Circuit Announces EIS Requirement Applies to Non-Routine Annual Requests, 8 ELR 10126 (July 1978).

17. 40 C.F.R. § 1507.3(c), ELR STAT. & REG. 46017 (proposed).

18. See generally Comment, Forthcoming CEQ Regulations to Determine Whether NEPA Applies to Environmental Impacts Limited to Foreign Countries, 8 ELR 10111 (June 1978); Comment, Renewed Controversy Over the International Reach of NEPA, 7 ELR 10205 (Nov. 1977).

19. A "cooperating agency" is one which may be requested by the lead agency to assist in the preparation of a given EIS because of special expertise in or jurisdiction over the subject matter. 40 C.F.R. § 1501.6, ELR STAT. & REG. 46017 (proposed).

20. 40 C.F.R. § 1501.5(b), ELR STAT. & REG. 46017 (proposed).

21. NEPA § 102(2)(D), 42 U.S.C. § 4332(2)(D), ELR STAT. & REG. 41009.

22. 40 C.F.R. § 1506.3, ELR STAT. & REG. 46017 (proposed).

23. 40 C.F.R. § 1506.6, ELR STAT. & REG. 46017 (proposed).

24. 40 C.F.R. § 1500.3, ELR STAT. & REG. 46017 (proposed).

25. __ F.2d __, 8 ELR 20490 (D.C. Cir. 1978).

26. The Environment — The President's Message to the Congress, 7 ELR 50057, 50068 (1977).