The new law establishes a council charged with identifying, tracking, and ultimately holding federal agencies accountable for completing complex reviews under NEPA.
On December 4, 2015, US President Barack Obama signed the FAST Act, the first significant surface transportation reauthorization in a decade. While the FAST Act is focused on highway, transit, and rail programs, it also contains an important provision for energy projects. Title XLI of the FAST Act establishes a new Federal Permitting Improvement Steering Council (Council), which is charged with identifying, tracking, and ultimately holding federal agencies accountable for the efficient completion of complex National Environmental Policy Act (NEPA) reviews. The US Congress has given the Council significant tools to hold agencies accountable for meeting specified timetables for new and existing projects.
To ensure that current or future applicants for energy projects before the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission (NRC), the Bureau of Land Management (BLM), the US Army Corps of Engineers (Corps), the US Fish and Wildlife Service or other federal agencies obtain the benefits of the FAST Act, we recommend the following actions:
The Council established under Title XLI is composed of an Executive Director and members appointed by the heads of over a dozen federal agencies. By June 2016, the Council must establish an inventory of significant ongoing agency NEPA reviews, or “covered projects.” The covered projects will be tracked in an online database—the “Permitting Dashboard”— that will show the status of federal environmental reviews and authorizations for projects in the inventory. By December 2016, the Executive Director—in consultation with the Council but not necessarily with project applicants—must also develop performance schedules for common categories of projects based on historical data from the preceding two calendar years. The performance schedules must reflect the “most efficient applicable processes,” including the alignment of reviews by multiple agencies. Each performance schedule must specify that any decision by an agency on an environmental review or authorization must be issued within 180 days from the date on which all information needed to complete the review (including any hearing that may be held) is in the possession of the agency.
For individual projects, the lead agency must establish a permitting timetable in consultation with other cooperating agencies, the project’s sponsor (i.e., the applicant), and any US state in which the project is located. The timetable must consider the generic performance schedule along with project-specific factors. There are dispute resolution provisions under which the Executive Director resolves disputes over the timetable in consultation with agency officials and project sponsors. The project-specific timetable can only be modified if all three of the following are met:
The project sponsor does not have a veto over changes to the timetable. The total length of all modifications to the timetable must not exceed half the time in the original timetable for that project, except for delays outside of the control of government agencies. Extensions beyond that point can be made by the Director of the Office of Management and Budget, in consultation with the project sponsor, but the Director must submit a report to US Congress explaining why the modification is required. Agencies that fail to conform to the timetables must report the reasons to the Executive Director, and those reports will be published on the Permitting Dashboard.
Title XLI defines “covered projects” as those requiring environmental review that the Council determines, by a majority vote, meet one of two sets of criteria. The first set of criteria is for projects that are likely to require a total investment of more than $200 million and that do not qualify for abbreviated authorization or environmental review under any applicable law (such as projects subject to only an Environmental Assessment). The second set is for projects, the size and complexity of which (in the opinion of the Council) make the project likely to benefit from enhanced oversight and coordination, including a project likely to require review from more than two federal agencies or the preparation of an environmental impact statement (EIS).
Thus, significant discretion is vested in the Council to determine whether projects will be covered and held to specified timetables. While many Title XLI provisions focus on the complexities of multi-agency reviews, complex environmental reviews led by a single agency—such as a significant NRC licensing action or FERC permitting action—should fall within the scope of these provisions, especially since many of these reviews do require input from other federal and state agencies.
Title XLI also includes limits on judicial reviews of covered projects. It establishes a general time limit of two years for seeking judicial review of an authorization for a covered project—unless a shorter time is specified under other laws. In addition, (a) the judicial action must be filed by a party that submitted a comment during the environmental review, and (b) any commenter must have filed a sufficiently detailed comment to put the agency on notice of the issue on which the party seeks review—unless the agency did not provide a reasonable opportunity for such a comment. Finally, Title XLI requires courts considering requests for injunctive relief against an agency or project sponsor regarding a covered project to consider the potential for significant negative effects on jobs resulting from an order or injunction.
For projects subject to approval by federal agencies such as FERC, NRC, BLM, the Corps, or the USFWS the permitting improvement provisions create tools to help applicants ensure that their projects receive timely and efficient environmental reviews. The judicial review limitations may also be helpful, especially the requirement for courts to consider the economic effect of a potential injunction against a covered project.
In the nuclear arena, in recent years, the NRC’s NEPA review process has slowed significantly. Many NRC NEPA reviews have dragged on beyond the NRC’s stated standard timelines and beyond the schedules originally anticipated by applicants. Applicants often have little control over NRC decisions to extend review timelines. The FAST Act permitting improvement provisions would cover applications for combined licenses, early site permits, license renewals, and significant license amendments as covered projects, if they require a total investment of more than $200 million, require review from more than two federal agencies, or require an EIS. Covered projects would realize significant benefits from a more disciplined NRC NEPA review schedule.
Likewise, applicants for FERC approvals of large-scale projects requiring NEPA reviews, such as proposed liquefied natural gas (LNG) terminals, pipelines, or other large infrastructure projects, may be able to realize similar benefits. Currently, FERC may revise the schedule of an environmental review if a change, in its view, becomes necessary. There are several sources of delay, including the need to address input from the public or other government agencies. FERC does not always communicate the reasons for delays, and some applicants have formally requested timely action on environmental reviews. Thus, FERC reviews could also benefit from enhanced certainty in schedules under the permitting improvement provisions of the FAST Act.
Proponents of utility scale renewable energy projects and other traditional energy projects have often also experienced significant delays in the entitlement process due to inefficiencies and conflicts in the interagency coordination process. The FAST Act’s focus on transparency and the establishment of processing deadlines has the potential to significantly streamline this process and underscore the administration’s commitment to developing renewable energy projects.
The Morgan Lewis Energy, Strategic Government Relations and Counseling, and Morgan Lewis Consulting practices will continue to follow developments involving the Federal Permitting Improvement provisions of the FAST Act and their potential implications for energy projects.
If you have questions on how these issues may affect your projects or you would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
 PL 114-94, 129 Stat. 1312 (Dec. 4, 2015).
 See Timothy P. Lynch, Bloomberg BNA, Daily Report for Executives, FAST Act Keeps Congress in Its Leading Role on Transportation (Jan. 27, 2016).
 See Morgan Lewis LawFlash, Steven M. Spina and J. Daniel Skees, “Highway Bill Adds New Security Measures to Federal Power Act” (Dec. 4, 2015).