New Executive Order Curbs Environmental Review and Permitting Process for Infrastructure

By Sahana Rao

On August 15th, 2017, President Trump issued an Executive Order intended to hasten the approval of infrastructure projects by streamlining and reducing the duration of the environmental review and permitting process.   The Order – which applies to transportation, energy production and transmission, broadband internet, water treatment, and other infrastructure projects – authorizes the White House Office of Management and Budget (“OMB”) to hold agencies accountable for meeting new review and permitting deadlines, and it charges the White House Council on Environmental Quality (“CEQ”) to oversee the implementation of the Order and resolve certain interagency disputes relating to environmental review and permitting. Of note, the Order also revokes a 2015 Executive Order issued by President Obama that established a Federal Flood Risk Management Standard for federally funded projects in order to increase flood resiliency in the face of the increased flood risk associated with climate change.

Performance Goals and Process Modifications

The Order directs OMB to establish a new Cross-Agency Performance (“CAP”) Goal on Infrastructure and Permitting Modernization that will, where permitted by law, (1) promote “consistent, coordinated, and predictable” federal environmental review and authorization processes, and (2) reduce the timeframe for these processes to no more than two years, on average.

The EO also describes three “process enhancements,” some of which build upon the procedures established for high priority projects in the 2015 Fixing America’s Surface Transportation Act.  The first is that major infrastructure projects must use the “One Federal Decision” mechanism, with a single lead agency not only overseeing the project’s environmental review but also “navigating the project through the Federal environmental review and authorization process, including the identification of a primary Federal point of contact at each Federal agency.”  Where the National Environmental Policy Act (“NEPA”) applies, the Order recommends that all NEPA decisions made by individual participating agencies be combined into a single Record of Decision (“ROD”), and that all federal authorization decisions be made within 90 days of the ROD’s issuance (subject to extension by the lead agency).

The second process enhancement requires the lead agency to set a permitting timetable that accounts for the 2-year CAP Goal, and to review and update this timetable at least quarterly. The Order’s third process enhancement requires the automatic prioritization of projects that miss a permitting milestone or require an extension, such that these projects are elevated to the attention of senior officials at the lead agency or any participating agency to which the milestone applies.

Directives to OMB and CEQ

The Order also assigns OMB a novel role in the environmental review and permitting process. It requires OMB to track agency performance based on whether each review incorporates the process enhancements discussed above, whether it meets the milestones of the permitting timetable, and the overall time and cost associated with review and authorization process. OMB will score agencies based on these factors and take these scores into account when formulating the budget that it recommends to Congress. The Order authorizes OMB to impose financial penalties on agencies that fail to keep up with the permitting timetable, within OMB’s discretion.

The Order also directs CEQ to issue any regulations or guidance that CEQ deems necessary for not only the implementation of the Order in particular, but also the overall simplification and acceleration of the NEPA process. To this end, CEQ is required to lead an interagency working group to identify the factors that lengthen NEPA review and the agencies that need to address these factors. In addition, the Order expands CEQ’s dispute resolution authority, which now applies to any interagency disputes not otherwise provided for by law that concern the federal environmental review of any infrastructure project.

Revocation of Obama-Era Flood Risk Management Standard

Finally, President Trump used the Order to revoke Executive Order 13690, which was issued by President Obama in 2015 and established the Federal Flood Risk Management Standard. The Obama Order required the sponsors of federally funded development projects in floodplains to strongly consider the increased flood risks associated with climate change and ways to mitigate these risks. The Obama Order builds on a previous executive order regarding floodplain management, which generally defines floodplains as “lowland and relatively flat areas adjoining inland and coastal waters, including flood-prone areas of offshore islands.” The Federal Flood Risk Management Standard updated the methods used to determine the flood elevation and flood hazard area that would be accounted for in the siting, design, and construction of federally funded projects in floodplains. Agencies or project sponsors had to apply one of the following methods: 1) use of any data or methods informed by the best available climate science, 2) building two feet above the 100-year flood elevation (or three feet, for critical projects like hospitals), or 3) building to the 500-year flood elevation.  The Federal Flood Risk Management Standard was intended to protect the taxpayer dollars used to fund these projects by promoting their long-term resiliency. The rescission of this order means that addressing flood risks through these methods is no longer explicitly required for federally funded projects in floodplains.

The effects of the Order will depend largely on how it is implemented by OMB, CEQ, and individual agencies. While the timelines contemplated by the Order are stringent, they are not binding, and much of OMB’s enforcement authority depends upon congressional acceptance of OMB’s budgetary recommendations.  The Order’s abrogation of the Federal Flood Risk Management Standard does not preclude the discretionary consideration of flood risks for federal projects or eliminate the need to consider the impacts of climate change under NEPA and other laws. Thus, it remains to be seen how the Order will affect the length and thoroughness of federal environmental review and permit processes, as well as how the revocation of the Federal Flood Risk Management Standard will impact the design of forthcoming federally funded infrastructure development.

For more information on federal environmental review of infrastructure projects and the potential ramifications of the Order with respect to climate change, please contact Jeffrey B. Gracer or Sahana Rao.