The Debt Ceiling Bill Came with Some Bad News for the Environment

Unpacking changes to NEPA embedded in the Fiscal Responsibility Act.

For weeks this Spring, it felt like all eyes were focused on whether Congress would pass a bill to raise the US national debt-ceiling. When The Fiscal Responsibility Act of 2023 passed in early June, it successfully prevented the world’s largest economy from defaulting on its debt — but it also came with some bad news for the environment. Namely, it included the approval of federal permitting for the controversial Mountain Valley Pipeline project, construction on which resumed last month, and more broadly, it incorporated changes to the country’s landmark environmental legislation, the National Environmental Policy Act (NEPA).

industrial oil and plastics facilities on the Gulf of Mexico

Community and environmental groups often rely on NEPA to push back against large industrial projects that threaten their health and wellbeing. Photo of industrial oil and plastics facilities on the Gulf of Mexico by Ted Auch, FracTracker Alliance.

Enacted on January 1, 1970, the National Environmental Policy Act (NEPA) was the first major federal legislation that required US government agencies to consider the environmental effects of their actions. Specifically, it requires that federal agencies complete environmental assessments (EAs) and environmental impact statements (EISs) for projects — meaning they must investigate and disclose the environmental impacts of their actions and undertakings. For example, if the federal government is considering building a new highway, approving a new mine on federal land, or issuing a permit for building on sensitive habitat, it must comply with NEPA.

Among other things, the Fiscal Responsibility Act changes requirements around who must complete an EIS, the timeline for doing so, and sets a page limit. How significantly these changes will impact the NEPA permitting process — and the communities and environmental groups that rely on it — is yet to be seen, and opinions on the topic vary between experts.

Earth Island Journal spoke with two such experts, Berkeley Law Professor Dan Farber and Center for Progressive Reform Executive Director Minor Sinclair, to unpack the changes and get a sense of just what their full reach could be.

One key change to NEPA introduced by the debt-ceiling bill is that federal agencies may now outsource the preparation of environmental review documents to a project’s sponsor, for example, an oil company seeking to drill on federal land.

“There’s a lot of discretion and power that comes with setting the scope of the assessment, or what the impact statement is,” Sinclair told the Journal. He compared letting oil and gas companies lead their own environmental impact statements to letting a fox into a chicken coop.

Farber doesn’t think the change in protocol will end up being so drastic. “At the end of the day, the agency is going to have to stand up in court and defend the document,” Farber said. He imagines that in most cases agencies may require EISs to be carried out by independent environmental consulting firms, rather than by project sponsors themselves, and that basic requirements around the scope of impact statements will need to be maintained.

Another notable change to the NEPA process has to do with time limits for the process and page limits for reports. Going forward, agencies will be limited to a two-year period for creating an environmental impact statement. If enforced, this could have a significant impact on a deeply bureaucratic process that commonly exceeds that timeline, and as a result, delays projects.

Sinclair worries that setting hard time limits takes away one of environmental groups’ primary strategies for resisting harmful projects: stalling for time. Farber, however, is doubtful that the ‘theoretical’ time limits will amount to much in practice.

“A former colleague of mine did an empirical study, and she found that the average time to make it through regulations was the same whether there was a deadline or not,” Farber said. “It just didn’t have that much effect on agencies.”

Additionally, EISs will be limited to 300 pages — but this limit doesn’t apply to appendices.

“I don’t want to be disrespectful to Congress, but this was really a joke,” Farber said about the page limit. “This means you’ll have the summary of the thing, which has to be within the page limits, and then you’ll have 1000 pages of appendices.”

It’s worth noting that not all of the changes to NEPA were negative.

One addition to the statute states that impact statements should also consider the potential negative effects of a project not happening. This could end up being helpful to clean energy projects considering that the impact of these projects not happening would clearly result in further use of fossil fuels.

Another addition requires projects to post documents online, including information about community engagement meetings and opportunities to comment, which may result in more public engagement. There is also a line stating that the law should be applied with professional and scientific integrity.

One thing that the NEPA amendments do not bring, unfortunately, is clarity. “You would hope that a new statute would clarify issues, but this is not very well drafted,” Farber said, adding that the changes may add confusion that could end up slowing everything down until details around protocol are clarified.

The Council for Environmental Quality (CEQ) is expected to be the first to produce some guidance for interpreting the new NEPA regulations. That guidance would become a primary reference point for any interpretation and implementation going forward.

Ultimately, Farber suggests that the changes made to NEPA in the debt-ceiling bill aren’t great, but that they are preferable to more devastating attacks on environmental legislation that could have been incorporated.

“I was really worried they would repeal a chunk of the Inflation Reduction Act, and in my point of view that would have been a way bigger deal,” Farber told the Journal, referring to the 2022 federal law that, among other things, aims to promote clean energy and address climate change impacts. “I was relieved that we got none of that, and if I have to pay for that with a little bit of wear and tear on NEPA, from my point of view, that’s a good trade off.”

“It strikes me more as nibbling around the edges, rather than taking big chunks out [of NEPA protections],” Farber added.

For his part, Sinclair thinks that some of the changes will be devastating, particularly for the communities already living with brutal environmental health impacts. In a statement published just before the law was signed, he wrote that significant parts of the bill are “watering down the basic protections NEPA has offered communities for the last 50 years, including the power to weigh in on environmentally destructive activities that threaten to harm them, their families, and neighbors.”

“Two years ago in Cancer Alley, black and brown communities fought back against the big Formosa petrochemical plant, and based on NEPA they won,” Sinclair told the Journal, offering the example of the Army Corps of Engineers 2021 decision to require a full environmental review of a petrochemical complex proposed for St. James Parish in Louisiana. “These communities are the most vulnerable, and most forced into these trade-offs between a job and breathing …and the one thing they’ve counted on is environmental impact assessments.”

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