NEPA permitting reform is back on the agenda, and it is bringing the same unresolved questions that have stalled past efforts. In a recent interview, Daniel Palken of the Arnold Foundation, a leading participant in the reform talks, described where negotiations stand and why the legal issues are so hard to settle.
The underlying problem has not changed. Clean energy infrastructure and other major projects can get held up in review. Uncertainty around that review creates risk for developers. The problem is a difficult one to solve.
The 2023 fixes did not settle the fight
Congress tried a round of changes in 2023. The amendments to the National Environmental Policy Act imposed page limits for review documents and set time frames for agencies to complete them.
Page limits were never really connected to the uncertainty problem. They do not reduce the chance that a lawsuit will succeed against a project. Limits can make reviews more vulnerable to legal challenge if analysis is cut short. Palken also noted that the limits are easy to get around by moving material into appendices.
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Time limits made more sense, because delay raises costs for project proponents. But if an agency rushes an analysis and produces a document that gets thrown out in court, the time limit has not helped anyone. If it pushes agencies to process reviews more efficiently, that is the upside.
This pattern is familiar in environmental law: procedural fixes often shift the controversy to a different stage. The deeper issue is that the process is designed to catch problems before they happen, which means deciding how much analysis is enough.
The legal questions still on the table
Palken focused on several issues that would be part of any permitting reform bill. One is exhaustion, which limits lawsuits to claims raised during an agency’s public participation process. It has been part of the statute’s framework for years. The Trump administration’s moves to eliminate draft environmental impact statements and public comments could make exhaustion harder to impose, because courts cannot require it when there is no public process.
The proposal to shorten the six-year statute of limitations for lawsuits under the statute would be easy to do. It would add some certainty on the margin, though it is unclear how much difference it would make.
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Palken also mentioned requiring courts to be more deferential to agency decisions under the law. Courts already apply the deferential “arbitrary and capricious” standard in many cases, but there is wide variation in how that standard is applied. He said judicial intervention may be appropriate for “very legitimate deficiencies” but not for trivia.
Remedies are the most important problem. This is the question of what happens after a court finds a violation. Courts have long disagreed about whether to vacate an agency action or leave it in place while errors are fixed.
Finally, there is scope: which actions and impacts an agency must analyze. The analysis also mentions alternatives such as Congress identifying categorical exemptions and pre-specifying thresholds for environmental assessments. With time tight for a bill in this Congress, developing those ideas will not be easy.
