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Power & Pipes

FERC, CFTC, and State Energy Law Developments

The Council on Environmental Quality (CEQ), the US federal agency tasked with coordinating and overseeing the implementation of the National Environmental Policy Act (NEPA), has announced its intention to update the CEQ’s longstanding NEPA-implementing regulations. Those regulations establish the core process used by agencies across the federal government to satisfy their NEPA obligations. According to the CEQ’s statement in the semiannual Unified Agenda of Federal Regulatory and Deregulatory Actions, “[w]hile CEQ has issued memoranda and guidance documents over the years, CEQ believes it is appropriate at this time to consider updating the implementing regulations.”

The CEQ is considering this rulemaking activity in response to Section 5(e) of Executive Order 13807, “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure,” issued on August 15, 2017. That executive order required the CEQ to develop an initial list of actions to improve the federal environmental review and authorization processes. In response, the CEQ issued an “Initial List of Actions to Enhance and Modernize the Federal Environmental Review and Authorization Process” this past September. At that time, the CEQ noted that its NEPA regulations may need to change.

Although the CEQ’s recent announcement is only a precursor to the agency’s issuance of an Advance Notice of Proposed Rulemaking and the beginning of what is likely to be an extended rulemaking process, this is a significant development given the pervasive reach of NEPA. NEPA, which applies to all “major Federal actions,” governs the environmental reviews of Federal Energy Regulatory Commission (FERC) licenses for hydroelectric projects and certificates for natural gas facilities. The CEQ’s regulations were issued in 1978 and amended in 1986, and have not been comprehensively revised since that time. Thus, any major substantive revisions to the CEQ’s regulations could materially affect how FERC discharges its obligations under NEPA.

Although no changes to the CEQ regulations have yet been proposed, Executive Order 13807 inaugurated a comprehensive focus on streamlining federal environmental review processes. That directive expressly seeks to “ensure that agencies apply NEPA in a manner that reduces unnecessary burdens and delays as much as possible, including by using CEQ’s authority to interpret NEPA to simplify and accelerate the NEPA review process.”