The Regulatory Pendulum

Federal agencies have been implementing changes to how they conduct environmental reviews under the National Environmental Policy Act (NEPA). Building on the Fiscal Responsibility Act of 2023 and various executive directives, these changes represent a significant shift in environmental review practices.

Legal observers and practitioners are watching closely. But what exactly changed, and what does it mean for agencies, project sponsors, and the public?

What's Being Changed

Categorical Exclusions Expanded

Perhaps the most impactful change is the expansion of categorical exclusions—project categories that don't require detailed environmental review:

Previous Practice: Categorical exclusions were narrowly defined and agency-specific, with limited applicability.

Current Direction: A broader list of exclusions is being applied, including:

• Projects within existing rights-of-way
• Upgrades to existing facilities
• Emergency repairs and replacements
• Projects in previously disturbed areas
• Certain renewable energy installations meeting specific criteria

Page and Time Limits

New requirements impose limits on environmental documents:

Document Type	Previous Practice	New Direction
Environmental Impact Statement	Often 500+ pages	Target of 300 pages
Environmental Assessment	Varied widely	Target of 75 pages
Review Timeline	No federal limit	2 years (EIS) / 1 year (EA)

Alternatives Analysis Streamlined

Agencies previously analyzed a wide range of project alternatives, including options that project sponsors had no intention of pursuing.

New approach: Agencies are focusing alternatives analysis on those that are "technically and economically feasible" and that decision-makers would "reasonably consider."

Scope of Impact Analysis

Changes to how cumulative and indirect impacts are analyzed:

Previous requirement: Comprehensive analysis of cumulative environmental effects, including downstream and induced impacts.

New interpretation: Greater focus on "reasonably foreseeable" impacts with a clear "causal connection" to the proposed action. The scope of what must be analyzed has been narrowed.

What Remains Unchanged

Despite significant changes, core NEPA requirements remain in place:

• Public notice and comment for major actions
• Environmental analysis for actions with significant impacts
• Agency record of decision explaining the rationale for choices
• Disclosure of environmental consequences to the public
• Consideration of mitigation measures

The statute itself hasn't changed. What's shifting is how agencies interpret and implement its requirements through regulations and guidance.

Legal Landscape

Environmental and industry groups have taken various positions on recent changes:

Potential Legal Questions

1. Rulemaking procedures: Were changes made with adequate public notice and comment?
2. Statutory interpretation: Do new interpretations align with NEPA's text and purpose?
3. Administrative law: Did agencies adequately explain departures from prior practice?
4. Constitutional questions: What are the bounds of executive authority over agency procedures?

Uncertain Timeline

Major regulatory challenges typically take 2-4 years to resolve through the courts. In the meantime, agencies face difficult questions about how to proceed.

Our Perspective: Build for Adaptability

Here's what we've learned from watching regulatory cycles: the pendulum always swings.

Regulations get added, then modified, then added again. What's streamlined today may be expanded tomorrow. Agencies that build their processes around specific regulatory interpretations will find themselves constantly scrambling when those interpretations change.

The smarter approach is to build adaptive systems that can accommodate change:

"Agencies need systems that can update in real-time as rules change—not static checklists that are outdated the moment they're printed."

What This Means Practically

For agencies: Invest in tools that track regulatory changes automatically. When a categorical exclusion list changes, your systems should update accordingly—not wait for manual review and staff retraining.

For project sponsors: Don't assume current streamlined processes will last forever. Document your environmental due diligence thoroughly, even when formal requirements are reduced. Robust documentation protects you regardless of which way requirements shift.

For everyone: Maintain strong records. When regulatory interpretations are contested, the projects with the best documentation fare best in any review.

Looking Ahead

Recent NEPA changes reflect genuine frustration with permitting delays that have hampered infrastructure investment for decades. Whether you support or oppose specific changes, the underlying problem is real: review processes that were designed for a different era struggle with today's volume and complexity.

Technology can help bridge this gap. AI-powered systems can:

• Track categorical exclusion eligibility as criteria evolve
• Ensure page-limit compliance without sacrificing substance
• Monitor court decisions and regulatory changes in real-time
• Maintain comprehensive audit trails regardless of formal requirements

The agencies that invest in these capabilities now will be prepared for whatever the next regulatory shift brings.

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Binoloop's Atlas platform is designed to adapt to regulatory changes automatically. Our AI monitors federal, state, and local requirements in real-time, ensuring your team always works from current information. Schedule a demo to see how it works.

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References

1. Council on Environmental Quality. (2020). Update to the Regulations Implementing the Procedural Provisions of NEPA. 85 Fed. Reg. 43304.

2. Fiscal Responsibility Act of 2023, Pub. L. No. 118-5, Title III (2023).

3. Congressional Research Service. (2023). The National Environmental Policy Act: Background and Implementation. CRS Report R41951.

4. Environmental Law Institute. (2023). NEPA at 50: Contemporary Challenges and Future Directions. ELI Research Report.

5. Government Accountability Office. (2014). National Environmental Policy Act: Little Information Exists on NEPA Analyses. GAO-14-370.