Unlocking America's Infrastructure Part 2: Removing NEPA's Obstacles

Both the executive branch and Congress should aim to curb the impediments posed by the weaponization of the National Environmental Policy Act (NEPA)

By all indications, President-elect Donald Trump is planning to make deregulation a key pillar of his new administration. His newly assembled Department of Government Efficiency (DOGE) will almost surely target not only the budget but also red tape. The President-elect has also made direct statements about regulation, recently pledging that those making investments of $1 billion or more in the U.S. “will receive fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals.”

Given these intentions, a first important step would be radical reform of the National Environmental Policy Act of 1970 (NEPA). NEPA requires that, prior to funding, authorizing, or implementing a broadly defined “federal action” (such as issuing a permit to build infrastructure) government agencies must consider the action’s consequences for the environment, as well as its related social and economic effects. That could include impacts on clean air, clean water, endangered species, historic preservation, and native American burial grounds, among other impacts.¹ Essentially all federal agencies are subject to NEPA, and environmentalists have already criticized President-elect Trump’s proposals as flying in the face of NEPA.

NEPA compliance is costly. If a project is likely to have significant environmental impacts, the relevant agency must produce a full environmental impact statement (EIS).² An EIS is usually required for major infrastructure projects. Agencies must solicit public input, coordinate with other stakeholders, and often extensively revise documents based on feedback. Although modest in the 1970s, a typical NEPA review now takes over four-and-a-half years and is over 600 pages long. The overall process for an infrastructure project can now regularly take over a decade to complete.

NEPA-related litigation is costly for several reasons. First, litigation has high direct legal costs. Second, litigation leads to both delays and time uncertainty (and thus increased costs) for infrastructure projects. In a process called “judicial review,” citizens and stakeholder groups who believe the federal agency’s environmental study did not sufficiently meet NEPA’s procedural requirements can challenge the permit in federal court. Courts may prevent agencies from taking the action under study until all identified defects are addressed.

Litigation under NEPA is common. A study that examined 355 large transportation and energy infrastructure projects that completed an environmental impact statement between 2010 and 2018 found that 28% of the projects faced predevelopment litigation. The authors found that the highest litigation rate was for solar projects, which were litigated nearly two-thirds of the time. Other high-litigation sectors included pipelines (50%), transmission lines (31%), and wind energy projects (38%).³ Although estimates range from several years to over a decade, depending on project size, complexity, and the number of legal challenges, there is a broad consensus that NEPA-induced litigation adds years of delay and billions of dollars to major infrastructure projects.

Litigation under NEPA is almost always local, meaning that the project’s regional or even national benefits are often devalued or disregarded. Unfortunately, NEPA provides no mechanism for balancing a project’s local impacts with its regional or national benefits. Indeed, it is unlikely that the Interstate Highway system could be built today given the extent of NEPA litigation. Although litigation to protect property rights may occur for valid reasons because infrastructure, energy, and other construction projects have environmental impacts, NEPA has essentially evolved into a weapon that any citizen or group who dislikes a project can block.

NEPA Is Holding Back Many Types of Infrastructure

NEPA-related delays quickly escalate uncertainty about true project costs, increase time-to-completion uncertainty, and deprive taxpayers of the services that infrastructure would have provided. Delays also are a significant drag on the economy and increase the risk that socially valuable projects will be cancelled outright. NEPA is one reason why American infrastructure is the most expensive in the world. NEPA now impacts the construction of roads, bridges, highways, airports, water systems, broadband, both conventional and renewable energy generation and distribution, and electricity transmission, among other infrastructure. Some examples:

• The now-completed Second Avenue subway, for example, is considered the most expensive per-mile in the world.⁴ NEPA is widely viewed as having significantly increased the costs of that project due to the extensive environmental review process it mandated. It also added time and complexity to the construction process, leading to higher overall costs.

• NEPA greatly raises the cost of highway projects. As transportation infrastructure expert Robert W. Poole reports, as of 2018, environmental reviews for 60% of federal highway projects took more than six years. Only 7% were completed in under two years.⁵ NEPA is therefore a primary culprit in explaining why highway projects rose in cost per mile by a factor of three during the decades from the 1960s to the 1980s, and have continued to rise.

• NEPA is now holding up the supply of “green” power, which requires massive investments in energy generation, long-distance transmission lines, mining and processing of needed minerals, etc. Indeed, most new energy projects built today are clean energy projects. Those projects are being delayed due to NEPA litigation brough by a small set of groups with little attendance environmental benefit. As Nikki Chiappa writes in attributing much of this delay to NEPA:

“The most contentious NEPA challenges filed between 2013 and 2022, on average, delayed clean energy projects by just under 4 years. Most of those lawsuits were filed by a small set of national NGOs who lost upwards of 70% of their cases. In other words, these cases function to delay and add costs to infrastructure development, not to improve environmental outcomes.”⁶

• Several delayed green-energy projects are emblematic of NEPA’s disfunction. One is the New England Clean Energy Connect transmission line, which is a 145-mile-long project running from Quebec through Maine to Massachusetts. It’s goal was to replace natural gas by delivering clean hydropower to 1.2 million homes in that area. It is estimated to reduce carbon emissions by about 3.6 million metric tons annually, which is similar in effect to taking 767,000 gas-powered cars off the road.

• Three fossil-fuel companies joined forces with two environmental non-profit groups to convince Maine residents that the New England Clean Energy Connect transmission line would harm the environment. The added legal processes added 21 months and an estimated $500 million to line’s cost, which will have to be paid by New England ratepayers.⁷

Necessary Actions

There is thus now bipartisan interest in reforming NEPA, and the need for litigation-focused NEPA reform is clear. There are several paths that such reform could take, and other countries have acted. Australia, Canada, and the European Union, which are all concerned about protecting the environment, have all changed their permitting laws and adopted policies to ensure that permitting is completed within three years or less. Here are several possible approaches to addressing the obstacles that NEPA poses for infrastructure development.

1. One approach that could likely be extended without Congressional approval is expanded use of “categorical exclusions” under NEPA. A categorical exclusion is a category of actions that a federal agency has determined do not significantly affect environmental quality. The Biden Administration provided exclusions for many green-energy projects. Trump appointees could do so for more projects that are likely to have minimal environmental impact. Although there are others, examples include oil and gas pipelines in rights-of-way that are already developed.

2. Another approach is for Congress to reform NEPA to place limitations on the litigation that can occur. Limits that have been suggested include reducing the window for filing lawsuits, limiting standing to sue to those who voiced concerns during a public comment period, and setting deadlines for court decisions.⁸ Other suggestions for expediting NEPA litigation including referring litigation directly to an appeals court, which would bypass district courts, as well as establishing a specialized, technical court with jurisdiction over federal permitting. Such reforms of NEPA-related litigation would greatly reduce costs.

3. Importantly, the Council on Environmental Quality (CEQ) within the executive branch, was created by NEPA, which itself was not a lengthy piece of legislation. President Jimmy Carter signed Executive Order 11991 in 1977 to give the Council on Environmental Quality (CEQ) the power to enforce NEPA. CEQ is now the locus of much of the blockage on major energy, infrastructure, and construction projects. President Carter’s order directed the CEQ to issue regulations that required federal agencies to comply with NEPA while also requiring federal agencies to comply with the regulations issued by the CEQ. President Trump could therefore rescind President Carter’s Executive Order.

A combination of the above reforms, as well as others, is also possible. The key is to recognize that a well-intentioned but vague law passed in 1970 to protect the environment has now become a miasma of overregulation and litigation and is now a drag of the U.S. economy. The time for its reform is past-due.

This is the second essay in a series. See Part 1 here:

1. Federal actions also include private projects "subject to substantial Federal control and responsibility."

2. The requirement is for “major federal actions significantly affecting the quality of the human environment.” 42 U.S.C. §4332(2)(C)(i) (1969).

3. See Michael Bennon and Devon Wilson, “NEPA Litigation Over Large Energy and Transport Infrastructure Projects, “ Environmental Law Reporter 2023.

4. See Brian M. Rosenthal, “The Most Expensive Mile of Subway Track on Earth,” New York Times, Dec. 28, 2017.

5. This is based on data from the White House Council on Environmental Quality. See https://reason.org/commentary/growing-agreement-that-government-regulations-are-driving-up-the-costs-of-vital-infrastructure/ (accessed December 13, 2024).

6. See Nikki Chiappa, “NEPA Nightmares IV: Tule Wind,” Washington, DC: The Breakthrough Institute, October 23, 2024. (accessed December 16, 2024).

7. See Nikki Chiappa, “NEPA Nightmares II: The North Sky River Wind Energy Project,” Washington, DC: The Breakthrough Institute, September 11, 2024. (accessed December 16, 2024).

8. See Robert W. Poole, Jr. Reforming Environmental Litigation, Washington, DC: Reason Foundation, June 2024, p. 35. (accessed December 20, 2024).