Federal regulatory change could affect environmental reviews, infrastructure projects in Texas

Regulatory analysis

The rule change received a positive response from several lawmakers and energy industry representatives, who said delays to a variety of projects ranging from pipelines to roads and other infrastructure initiatives could be reduced by the updated regulation.

Texas Gov. Greg Abbott shared his support for the changes to the NEPA in a July statement and said he expects the update to streamline reviews and development in the state.

“Restoring efficiency in the NEPA review process will enhance public safety, improve environmental outcomes and deliver cost benefits to consumers. I strongly support programmatic NEPA reform at the CEQ and individual agency levels and look forward to its implementation,” Abbott said.

Todd Staples, president of the Texas Oil & Gas Association, said the changes to the NEPA will reduce delays he said are essential to meeting the needs of the state’s growing population in a timely manner.

The American Petroleum Institute highlighted the expected benefit the change will bring nationwide for both traditional oil and gas projects in addition to renewable energy initiatives.

“By modernizing NEPA reviews, agencies and businesses can move through permitting processes on clean energy projects and others that have previously been delayed like the solar, wind and gas projects with confidence in an efficient regulatory process,” API Senior Counsel Ben Norris said in an email.

Renewable energy initiatives could also benefit from the rule changes, according to industry representatives. In a statement, the American Wind Energy Association said it expects the NEPA changes will improve permitting and the development of new wind energy infrastructure.

“While America’s wind energy industry supports the fundamental goals of NEPA to appropriately consider potential environmental and climate impacts, the NEPA process has not been revised in decades,” said Amy Farrell, the association’s senior vice president of government and public affairs, in a statement. “It is time to update and modernize the permitting process, which would both strengthen our economy and enhance environmental stewardship.”

Despite the positive reception by some industry members to the July NEPA announcement, changes to the act may not result in the desired goals of reducing time spent in the review process, said David Adelman, an environmental law professor at The University of Texas at Austin School of Law.

Other environmental regulations, underfunded federal agencies and judicial review of certain projects—an option environmental activist groups have used to slow some federally associated projects in recent years—remain potential obstacles in accelerating reviews, he said.

“The causal claim here that environmental reviews are stalling federal permitting or federal projects or federal actions is a very, very dubious claim at the beginning. And so the solution that they’ve come up with doesn’t really match what the actual cause [is] in the real world,” Adelman said.

Environmental effects

The new rule may affect other environmental considerations that projects receive, according to Adelman, and could hamper the input that members of the public and other local stakeholders can provide as projects are developed.

The NEPA update expands the use of categorical exclusions—actions that have been previously determined to have little effect on the environment and are therefore not subject to further review—which could result in bypassing the NEPA and reducing a level of public input.

“The new regulations require maximum use of emergency exclusions, categorical exclusions (both of which basically exempt the project from NEPA [regulations], including exempting the public process) ... The new regulations also require the use of work previously done, no matter how old or outdated,” Environment Texas Executive Director Luke Metzger said in an email.

Metzger said the longer regulatory record of oil and gas projects in Texas and elsewhere may also provide developers a wider array of exemption options under the new rule based on extensive precedent in that sector. Norris, however, said development is still subject to other existing environmental laws and comment from members of the public regardless of the NEPA update.

"These updates to NEPA don’t change any underlying environmental laws," he said. "Projects still must undergo an environmental review, and there still must be public input—as there should be."

The CEQ said the rule update is expected to enhance the public involvement process through earlier requests for comment and through the requirement that federal agencies share additional information about projects as they are planned.

Another effect of the NEPA rule change, setting subjective limits on the time and length of federal reviews, could also result in longer-term effects on an area’s environment that were not fully evaluated or anticipated, including projects' potential contribution to climate change, Adelman said.

"[With] so many environmental problems, it’s small, incremental decisions that are made that may be individually small, but collectively, they have a really, really big impact over time," he said. "It’s especially important to have those sorts of analyses and be more forward-looking and holistic. And I think one of the things that these regulations does is it really attempts to minimize those sorts of analyses.”

The largest effect the NEPA changes may have on Texas will be on oil and gas pipelines and larger infrastructure projects with a federal nexus, Adelman said. However, the state may be among the least affected by the update, despite its association with the energy industry, due to its lack of federal lands where NEPA regulations most clearly apply.

Still, industry members said they view the move as a positive step for their operations in Texas and elsewhere.

“NEPA review is a chief reason that building infrastructure has become so challenging in Texas and around the country. NEPA reform will allow the efficient construction of critical infrastructure that supports lower-carbon energy options, like natural gas and renewables, as well as future clean-energy innovations,” Norris said.