A Slow Road to New Infrastructure Without NEPA Reform

In the weeks since the U.S. presidential election, the stock, bond, and commodity markets have seen significant movement in response to President-elect Trump's statements that his administration will "rebuild our highways, bridges, tunnels, airports, schools, hospitals" and "will put millions of our people to work as we rebuild it."

To the extent that the markets are anticipating immediate infrastructure spending, they may be years ahead of that wave. Assuming that Congress does authorize $500 billion or $1 trillion in new appropriations for infrastructure, it might take years for the money to begin flowing. With a few exceptions, infrastructure projects require review under the National Environmental Policy Act (NEPA). A NEPA-required Environmental Impact Statement (EIS) can take years to prepare, and a challenge to the sufficiency of an EIS in federal court can add further years of delay—just ask the Federal Highway Administration, which just spent a decade preparing an EIS for a proposed freeway in Arizona, only to have that EIS challenged in federal court. Often, NEPA litigation is used to delay or derail renewable energy projects, including solar and wind, in what has become an inexplicable, self-defeating strategy by those who claim to be protecting our environment. 

When NEPA was adopted into law in 1969, its goal was simple: to require federal agencies to take a "hard look" at the environmental implications of their projects, following guidelines issued by the Council on Environmental Quality, an executive agency created at the time of the Nixon Administration. That "hard look" usually takes the form of a review document—an Environmental Assessment or Environmental Impact Statement—which is then subject to review for sufficiency by the federal district courts. At a time before the Environmental Protection Agency existed, the need for some kind of environmental review for large projects was clear.  But forty-six years and thousands of EIS lawsuits later, the statute has become synonymous with delaying and derailing countless important infrastructure and energy projects.

In 2009, Congress considered creating an exemption from NEPA review for projects authorized under the $787 billion American Recovery and Reinvestment Act of 2009 (ARRA) but ultimately declined to do so. As a result, ARRA funds that were spent on infrastructure were often directed to projects that by regulation do not require NEPA review (i.e., those that qualify for "categorical exclusions"). These include things like highway resurfacing and reconstruction, under 23 C.F.R. § 771.117(d)(1), and the rehabilitation of certain types of multifamily residential buildings, specified at 24 C.F.R. § 58.35(a)(3)(ii).

NEPA is not an impossible statute to navigate, even though doing so takes time and planning. It is the litigation that inevitably ensues when the NEPA process is complete that is the cause of unpredictable delay. Unless the law is revised, the infrastructure program proposed by the President-elect may not be ready for construction until after his first four-year term in office is completed. As desirable as it may be to amend NEPA directly or to revise the Administrative Procedure Act (which gives rise to NEPA litigation) so that these statutes can longer be coopted and misused as a means to delay the construction of necessary infrastructure, the prospects for such direct amendment are not high. More likely to be effective will be provisions in new statutes authorizing specific infrastructure projects to be exempt from excessive study and litigation. This does not mean abandoning reasonable inquiry into environmental impacts to ensure that the best decisions are being made, but it does mean imposing reasonable limitations.  While the hope of permanently reining in the abuse of NEPA through direct amendment should not be abandoned, efforts to permit infrastructure and energy development to proceed on a reasonable timeframe should be included in forthcoming authorizing legislation. 

If you have questions, please contact Peter A. Tomasi at (414) 277-5667/peter.tomasi@quarles.com, Jeremy Lite at (520) 770-8739/jeremy.lite@quarles.com, or your Quarles & Brady LLP attorney.