President Trump’s Executive Orders: Rethinking NEPA Regulations and CEQ’s Role in Federal Environmental Reviews

In the short term, we expect some uncertainties to cloud the path through federal NEPA review as CEQ releases new guidance and as agencies grapple with how to continue reviews while they individually update their NEPA regulations and procedures — a process we think will take a year or two to complete. We also anticipate a tension between the administration’s reform goals and the expectations of some courts for what a NEPA review process will include based on decades of court precedent that developed under prior regimes. While many project proponents likely support the overall goal of a more efficient NEPA review process, few will want to serve as “test cases” in which courts determine whether an agency’s new approach is sufficient.

Overall, the administration’s target end goals are:

• a less powerful CEQ that only issues guidance;
• consistent agency-level NEPA regulations that hew closely to NEPA’s limited legislative requirements and that faithfully implement permitting reform measures, like those we previously discussed from the Fiscal Responsibility Act; and
• regulations with a reduced focus on climate change and environmental justice.

Although the administration seeks a consistent approach across agencies, the absence of a single binding set of NEPA regulations — like those CEQ had in place for decades — will make that consistency more difficult to achieve. True consistency will be further complicated by the wide variety of agency missions, organic statutes, and permitting programs, and how agency practices to meet those varied requirements overlap with their NEPA procedures. Indeed, well-thought out and intentional diversity in approaches may be necessary or beneficial in some circumstances. We also expect litigation, especially for large infrastructure projects, to follow closely on the heels of agency decisionmaking that incorporates the administration’s new direction.

Changes to CEQ’s Authority and NEPA Regulations

Unleashing American Energy directs significant changes in the role of the CEQ and how various federal agencies will conduct environmental reviews under NEPA. The practical consequences of these changes, though, will likely take a year or two to go into full force, with a potentially long tail of litigation well beyond that.

What it does

Unleashing American Energy aims to achieve consistent agency-level NEPA regulations across the government that faithfully implement recent permitting reform measures. For the last several decades, CEQ’s NEPA regulations set what was treated as a mandatory baseline for all federal agencies, with agencies making minor adjustments in their own implementing regulations to conform with their various programs. Now, CEQ’s role will shift to being the author of guidance for what agencies should accomplish when they update their NEPA implementing regulations. The Executive Order lays out several immediate and near-term actions that lay the foundation for substantive rule changes over the next year or two:

• The Executive Order revokes a Carter-era Executive Order that the government has used to claim authority for CEQ to issue binding rules (though, as discussed below, two court decisions demonstrate that this claim of authority has very recently been crumbling of its own accord);
• The Executive Order directs CEQ to, within 30 days (i.e., by February 19, 2025), propose rescinding CEQ’s existing NEPA regulations using notice-and-comment rulemaking (though CEQ’s existing regulations would remain on the books until any such rule is finalized);
• The Executive Order directs CEQ to publish non-binding guidance on how agencies should implement NEPA in their reviews — a marked retreat from binding regulations that agencies were formerly required to comply with;
• The Executive Order requires CEQ’s guidance and any agency-level implementing regulations to (1) expedite permitting approvals and (2) meet the deadlines set forth in the Fiscal Responsibility Act’s (FRA) NEPA amendments, including a one-year time limit for Environmental Assessments and a two-year time limit for Environmental Impact Statements;
• The Executive Order directs CEQ to convene a working group to coordinate federal agencies’ individual efforts to update their NEPA regulations, so that there is consistency across agencies;
• The Executive Order directs agencies to take “all available efforts” to eliminate permitting delays, including by using general permits and permits by rule; and
• The Executive Order requires the National Economic Council and Office of Legislative Affairs to prepare joint recommendations to Congress to, among other things, provide greater certainty in the federal permitting process, including streamlining judicial review.

What this means

Unleashing American Energy comes on the heels of the D.C. Circuit’s opinion in Marin Audubon Society v. Federal Aviation Administration, No. 23-1067 (D.C. Cir. Nov. 12, 2024), which concluded that the Carter-era Executive Order issued in 1977 failed to give CEQ any authority to issue regulations binding on federal agencies. Unleashing American Energy represents a sharp departure from how NEPA regulations had been promulgated in the past, where “binding” CEQ regulations were the norm. For example, in the first Trump administration, CEQ promulgated a final rule updating its NEPA regulations — the first major overhaul in over 40 years. Many of these changes were short-lived: before the various federal agencies had time to make corresponding updates in their own implementing regulations, President Joseph Biden took office and redirected the rulemaking effort to a two-phase redo of CEQ’s regulations. Administrations of both major political parties have behaved as though CEQ had authority to issue binding regulations since 1977.

The very recent crumbling of the foundation beneath CEQ’s rulemaking authority has come from both the Executive and Judicial branches. On the judicial front, the Marin Audubon decision was a strong first nail in the coffin. Although a majority of the active judges on the D.C. Circuit subsequently characterized the conclusion that CEQ lacks rulemaking authority as unnecessary to the decision and thus presumably dicta (this came in a concurrence to a denial of en banc reconsideration), a federal district court in North Dakota reached the same conclusion last week, when it vacated CEQ’s most recent NEPA rulemaking effort in Iowa v. CEQ, No. 1:24-cv-00089 (D.N.D. Feb. 3, 2025). There, the court found that CEQ lacked authority to issue its NEPA regulations in 2024, which is the “NEPA Phase 2” rule that the Biden administration used to remove many of the previous Trump administration’s 2020 updates. The North Dakota court did not vacate CEQ’s rules nationwide. And though the court said that because CEQ lacks authority to issue its 2024 rule, it likely also lacked authority to issue the 2020 revised rule during the first Trump administration, the court only vacated the rule that was before it — that is, the Biden administration’s 2024 NEPA Phase 2 rule. Thus, for those parties, the operative CEQ rule returns to the version of the NEPA regulations in effect before the 2024 rulemaking, which is the Trump CEQ’s 2020 rulemaking, as slightly modified by the Biden administration’s “NEPA Phase 1” rule in 2021.

On the Executive front, Unleashing American Energy largely moots the question of whether CEQ has rulemaking authority under the 1977 Executive Order by revoking that order. It then puts in motion a new approach to agency rulemaking to implement NEPA. We anticipate that when CEQ proposes rescinding its NEPA regulations — which is expected to occur by February 19, 2025 — it will propose rescinding both the 2024 rule and any pre-2024 rule (such as the rule now in place by virtue of the North Dakota court’s vacatur). Importantly, though, CEQ’s regulations will likely remain in place until some later date, when CEQ takes a final action rescinding them. Ultimately, the process of revoking CEQ’s regulations and promulgating updated implementing regulations across all federal agencies through notice-and-comment rulemaking is likely to take a year or more, based on CEQ’s recent practice of giving agencies 12 months to update their NEPA implementing regulations.

What this means for large infrastructure projects is still somewhat unclear and will depend on where in the process an individual project is. With CEQ’s new focus on generating guidance and then coordinating a working group to help promulgate consistent NEPA regulations across agencies, attention will turn to the various agencies across the government. Unleashing American Energy kickstarts an enterprise-wide process of individual agencies making substantive changes to how they implement NEPA. Each agency, including the U.S. Army Corps of Engineers, Bureau of Land Management, U.S. Forest Service, and Federal Energy Regulatory Commission, has its own regulations, policies, and procedures dictating how it complies with NEPA. At present, many of them incorporate CEQ’s existing regulations by reference, stating that agency-level regulations “supplement,”¹ are “intended to be used in conjunction with,”² or are “intended to be used only in conjunction with”³ applicable CEQ regulations — meaning that these agencies have arguably bound themselves to follow what CEQ has in its baseline NEPA regulations. Until the agencies update their own regulations and procedures (much of which is done through notice-and-comment procedures), we anticipate that agencies will continue to comply with CEQ’s regulations.

It is possible that agencies will revise their own NEPA regulations to coincide with CEQ finalizing its rule to rescind its regulations, which could avoid a gap in an operative rule governing their NEPA compliance. Regardless, it is critical to recognize that agencies still need to comply with the statutory requirements of NEPA and its recent legislated amendments, and Unleashing American Energy explicitly directs the CEQ working group to ensure that agency-level regulations implement the deadlines imposed through the FRA amendments. Given the shorter timelines set forth in the FRA amendments, it is unlikely that new agency rules and procedures for implementing NEPA will provide much relief to projects that are already moving through agency NEPA review, especially those where an agency has already published draft or final NEPA documents.

We also expect that, perhaps now more than ever, environmental and conservation groups will continue to scrutinize agency NEPA reviews, participate vigorously during public comment periods, and bring court actions to push for agencies to be more expansive in their environmental analysis. These groups may use upcoming reviews and projects as test cases to try to revisit questions considered long-settled under CEQ’s NEPA regulations. Likewise, agencies may wrestle with implementing the administration’s streamlining directive. As this plays out, we anticipate that agency practice that follows the current standards for review under CEQ’s regulations and many decades of caselaw may face a reduced risk of challenge for alleged deficiencies. Conversely, we expect that the first wave of projects reviewed and approved under revised agency regulations, or that incorporate streamlined review, will be a focal point for litigants.

This is very likely to be the case for energy projects that seek to take advantage of the administration’s efforts to accelerate permitting for ventures deemed “essential” for the economy or national security. President Trump’s Executive Order Declaring a National Energy Emergency directs agencies to identify and use their emergency authorities to expedite completion of all authorized infrastructure, energy, and environmental projects. It also directs agencies to consider whether federal eminent domain authorities or other authorities provided by the Defense Production Act may be necessary to expedite energy projects. Additionally, with one party control of both houses of Congress and Unleashing American Energy directing the National Economic Council and Office of Legislative Affairs to issue recommendations to speed up permitting and streamline judicial review under NEPA, permitting reform bills like those previously proposed by Senators Joe Manchin (I-WV) and John Barrasso (R-Wyo.) and Representative Bruce Westerman (R-AR4) may become a high priority.

Narrowing Consideration of Climate Change

In addition to directing a wholesale recission of CEQ’s baseline regulations that agencies follow when undertaking a NEPA analysis, Unleashing American Energy also seeks to focus the information an agency can consider during that process to, according to the Executive Order, hew more closely to NEPA’s legislative requirements and strengthen scientific integrity.

What it does

• The Executive Order revokes Executive Order 13990, which declared various national policies, such as reducing greenhouse gas (GHG) emissions, and which re-established the Interagency Working Group (IWG) tasked with developing new Social Costs of Greenhouse Gases (SC-GHG) figures, a metric designed to quantify the economic costs of climate pollution per ton of GHG released into the atmosphere;
• The Executive Order directs the U.S. Environmental Protection Agency (EPA) to consider eliminating the SC-GHG analysis from any federal permitting decisions;
• The Executive Order revokes Executive Order 14008, which directed CEQ to require federal permitting decisions to consider the effects of GHG emissions and climate change;
• The Executive Order directs agencies to adhere only to “legislated requirements” for environmental considerations; and
• The Executive Order directs EPA to, within 30 days, submit recommendations to the Office of Management and Budget on the “legality and continuing applicability” of EPA’s 2009 GHG “Endangerment Finding,” which has provided the scientific and legal underpinning for many of the EPA’s later climate regulations.

What it means

Unleashing American Energy signals a government-wide reconsideration of past climate change regulations and policies, especially as they relate to projects involving the production, transportation, and use of minerals and fossil fuels. It disbands the IWG, which was first established by President Obama and re-established by President Biden following the first Trump administration. Though that group never finished its original process, the Biden-era EPA published its own SC-GHG estimates in 2023, and some jurisdictions have precedent that arguably requires agencies to use some kind of SC-GHG estimate in their cost-benefit analyses. While the first Trump administration disbanded the IWG and withdrew the then-existing SC-GHG estimates, it also developed its own SC-GHG figures that reduced the estimate of the benefits from GHG emissions reductions. The current Trump administration may take similar action to revise SC-GHG estimates.

Unleashing American Energy states that existing SC-GHG estimates are “marked by logical deficiencies” with a “poor basis in empirical science.” This is presumably rooted in the fact that the outputs of extant SC-GHG analyses are heavily dependent on policy considerations, such as the appropriate discount rate and the time period over which the tool is used, as well as the inherent difficulty of attempting to estimate long-term global socioeconomic development under different climate scenarios. SC-GHG outputs vary by orders of magnitude depending on these factors and, as demonstrated by the differences in outputs between the Biden-era and prior Trump-era SC-GHG figures, there is no scientific consensus on SC-GHG methodology. The Executive Order also aligns with arguments raised in several contexts that use of the SC-GHG tool results in an incomplete analysis of impacts when there is only a focus on social costs without any complementary assessment of the social benefits of an action over similarly long timelines and broad geographical scope.

Although the road ahead on whether and how climate change impacts will be assessed in federal reviews is uncertain, there can be no doubt that President Trump’s Executive Orders signal his administration’s view that the climate change rules and policies that previous administrations adopted need to be modified or eliminated. The administration sees this as essential because, in President Trump’s view, those rules and policies impede permitting and energy projects and harm the economy without providing any measurable benefits. However, despite the administration’s decreased focus on climate change, agencies will still need to consider climate-related issues in some fashion in NEPA reviews to reduce the risk that the courts may find a NEPA analysis insufficient.

Terminating Biden-era Environmental Justice Initiatives

Environmental justice (EJ) considerations were a mandated part of federal permitting under the Biden administration, and were a strong focus of that administration’s priorities. EJ formally entered the stage in 1994 via a Clinton-era Executive Order that directed agencies to consider the environmental impacts of their actions on minority and low-income communities. The Biden administration strengthened this position by passing several EJ-related Executive Orders aimed at amplifying the role of EJ in the federal government. President Trump’s Executive Orders take a hardline stance against EJ initiatives and mark a sharp departure from the previous administration’s focus on EJ in permitting and enforcement decisions.

What they do

• Unleashing American Energy revokes several Biden-era Executive Orders that created various EJ commissions and that directed CEQ to create a climate and EJ screening tool;
• Ending Illegal Discrimination and Restoring Merit-Based Opportunity and Initial Recissions of Harmful Executive Orders and Actions revoke Executive Order 12898 (President Clinton’s landmark 1994 EJ initiative) and Executive Order 14096, thereby removing the underpinning orders that focused EJ analysis at the federal level; and
• Ending Radical and Wasteful Government DEI Programs and Preferencing directs federal agencies to “terminate, to the maximum extent allowed by law” all EJ offices and positions within 60 days.

What it means

We expect that EJ-related offices within the federal government will close, including the White House Office of Environmental Justice within CEQ established by the Biden administration. That office was directed to address the disproportionate and adverse human health and environmental effects of federal activities on disadvantaged communities. As we previously discussed, CEQ issued guidance in 2023 directing agencies to consider EJ impacts of proposed actions, prompted by President Biden’s now-revoked orders. While this guidance remains in-place, the Trump administration’s CEQ is likely to revoke CEQ guidance related to EJ. Federal agencies have already begun implementing the President’s directives. Shortly after taking office, newly confirmed Attorney General Pam Bondi released a memorandum directing the Department of Justice and U.S. Attorneys’ Offices to immediately rescind all EJ-related guidance, in line with the President’s Executive Orders and effectively ending any EJ considerations in federal enforcement decisions.

Notwithstanding this, whether expressly or under another name, we expect that EJ concerns will still be included in NEPA documents, and environmental and conservation groups will continue to challenge permits under the Administrative Procedure Act based on allegedly insufficient discussion of these topics. One way the administration’s handling of EJ may manifest itself relates to arguments that may arise in the context of energy projects. Unleashing American Energy sets out clear policy goals to increase “generation of reliable and affordable electricity,” reduce high energy costs that “devastate American consumers by driving up the cost of transportation, heating, utilities, farming, and manufacturing,” and facilitate construction of critical energy infrastructure “in regions of the Nation that have lacked such development in recent years.” Household consumers of electricity and natural gas are particularly sensitive to fluctuations in energy prices, as energy-related consumer spending is often essential and cannot be easily reduced in the way other discretionary purchases can be. Unreliable or unaffordable energy disproportionately impacts EJ communities, which often have lean budgets with slim margins between discretionary and essential spending. We anticipate that energy infrastructure developers and permitting agencies may focus on EJ-related benefits from efficient siting and permitting of energy infrastructure projects to help ensure that affordable energy is available to these communities. We also anticipate that project proponents and agencies which continue to include a fulsome analysis of impacts to EJ communities — including beneficial impacts of project development like energy reliability and affordability that Unleashing American Energy is designed to promote — may fare better in the face of the litigation that will likely increase in the aftermath of the various Executive Orders.

We will continue monitoring environmental and energy developments from the Trump administration. Please reach out to your Vinson & Elkins team to discuss these matters and their implications for your business.

¹ E.g., 36 C.F.R. § 220.1 (U.S. Forest Service); 18 C.F.R. § 380.1 (Federal Energy Regulatory Commission); 43 C.F.R. § 46.20 (Department of the Interior).

² E.g., 43 C.F.R. § 46.20 (Department of the Interior); 36 C.F.R. § 220.1 (U.S. Forest Service).

³ E.g., 33 C.F.R. § 230.1 (U.S. Army Corps of Engineers) (emphasis added).