The U.S. Environmental Protection Agency is seeking public comment on an important Proposed Rule governing when and how the agency will conduct environmental reviews under the long-troubled National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4332 et seq. The proposed rule (“Update of Procedures for Implementing the National Environmental Policy Act,” Docket No. EPA-HQ-OA-2025-1080) merits support from the regulated community, as it refreshingly limits the agency’s role to that set forth in statute and Supreme Court precedent. Comments are due July 27, 2026.

NEPA and Its Historic Woes

Since it became effective on January 1, 1970, NEPA frequently has been where complex infrastructure projects needing federal approval go to die. NEPA requires a federal agency, before undertaking a “major federal action,” to provide a “detailed statement” regarding the “reasonably foreseeable environmental effects” of the action. 42 U.S.C. § 4332(2)(C)(i). Those impacts need not be mitigated, as NEPA is merely a procedural statute, but only given a “hard look.” Alas, one person’s “hard look” is another’s abuse of discretion under the Administrative Procedure Act’s “arbitrary and capricious” standard.

Since NEPA claims offered project opponents the opportunity to kill complex projects with a thousand cuts, NEPA has become one of the most litigated federal statutes. Over time, many lower courts got into the business of micromanaging agency environmental reviews, ignoring the Supreme Court’s periodic reminders that they are required to give substantial deference to agency environmental reviews. In some cases, federal judges effectively became the project managers for major infrastructure projects. This was sub-optimal.

The combination of judicial meddling and spooked agencies fearful of being second-guessed has delayed projects ranging from highways to transmission lines to mines. That is particularly true in the West, where federal and tribal lands—and hence NEPA triggers—are plentiful. NEPA tales of woe are legion, with one notorious environmental impact study (“EIS”) for an Arizona land exchange project taking 16 years. The White House Council of Environmental Quality (“CEQ”) originally envisioned that agencies would complete limited-scope environmental assessments within a year and full-blown environmental impact statements within two years. That basically never happened for significant projects. And that’s not counting delays caused by judicial review of the agency’s work.

Hope Comes to the Hopeless

In the past half-decade, Congress, the courts and executive branch agencies have finally provided meaningful relief from the NEPA hamster wheel. It’s the first time since, well, ever, that one can say that.

Congress stepped into the fray by amending NEPA through the Fiscal Responsibility Act of 2023 and the One Big Beautiful Bill Act of 2025 to adopt soft deadlines and page limits for environmental reviews. The most involved review, the EIS, is now supposed to take no more than two years and cover no more than 150 pages, or 300 pages for the most extraordinarily complex projects. The FRA clarified that only “reasonably foreseeable” environmental effects need be studied. You would be surprised to learn how many courts previously opined that NEPA also required evaluation of unreasonably foreseeable environmental effects.

Shortly thereafter, a split panel of the D.C. Circuit ruled that CEQ—which issued in 1978 rules purporting to bind federal agencies and the public alike—never had authority to do so in Marin Audubon Society v. Federal Aviation Administration, 121 F.4th 902 (D.C. Cir. 2024). Whoops. The original fig leaf for CEQ’s rulemaking was an executive order by President Carter, which the court found inadequate. President Trump later removed all doubt by rescinding President Carter’s order. That returned CEQ to its original advisory-only status.

In 2025 the Supreme Court emphatically told lower courts to stop micromanaging agency environmental reviews in Seven County Infrastructure Coalition v. Eagle County, 605 U.S. 168 (2025). The Court announced a “course correction,” reminding courts they have always been required to grant wide deference to agency environmental reviews. The Court also stressed that even when courts do find a flaw using that deferential standard, they should not always vacate the agency decision. Vacatur is only necessary if there is some reason to believe the agency would reach a different conclusion as a result of fixing the flaw. So far, the district courts and courts of appeal have faithfully followed Seven County.

The Proposed New Rule and Its Key Provisions

Those dramatic developments obviously required those agencies who do have statutory authority to issue NEPA rules—EPA among them—to update or promulgate them.

EPA’s Proposed Rule observes the limits set forth by Congress and the Supreme Court, with no over-reaching. EPA adopts the statutory page limits and timelines and the mandate that only reasonably foreseeable effects must be considered.

It clearly sets forth what actions generally qualify for a categorical exclusion—which obviates the need for NEPA paperwork—which actions generally require a limited environmental assessment, and which actions typically will require a complete EIS.

Falling into the likely EA category are grants for most municipal wastewater projects and the issuance of initial Clean Water Act wastewater discharge permits for most new industrial facilities. Falling into the likely EIS category are grants for large regional wastewater treatment plants and issuance of wastewater permits for large wastewater discharges into receiving waters that do not meet water quality criteria, for “a new major industrial discharge,” and for large oil and gas wells on the continental shelf or in deepwater ports.

Equally important, EPA confirms what does not require any NEPA review under the statute and cases interpreting it: issuance of permits under other environmental statutes that provide the functional equivalent of NEPA review. That sounds like a small matter, but clarity on which specific environmental permits need not undergo NEPA review will save considerable heartache.

Finally, the Proposed Rule is crisply written and understandable. Will no one think of the lawyers?

Conclusion

Only rarely does regulated industry have the opportunity to comment in favor of a proposed environmental rule. This is one of those times.