On January 20, 2025, President Trump signed Executive Order 14154 titled Unleashing American Energy, which extends beyond energy projects to broadly reshape how federal agencies approve projects that impact the environment. The Order seeks to roll back existing environmental review regulations under the National Environmental Policy Act (“NEPA”) and streamline federal permitting processes.
Executive Order’s NEPA Provisions
NEPA requires federal agencies to evaluate environmental impacts before approving projects like highways, pipelines, and large-scale infrastructure. If a project is expected to have minimal environmental effects, the review process can be relatively quick. However, for projects with significant environmental impacts, reviews can take years, delaying approvals and construction.
Historically, agencies’ NEPA regulations needed to be consistent with regulations set by the Council on Environmental Quality (“CEQ”). CEQ regulations detail, for instance, required elements of an environmental impact statement. However, the Unleashing American Energy Executive Order directs CEQ to propose rescinding these regulations and to replace them with guidance instead. This move could change how environmental reviews are conducted and give individual agencies more flexibility in how they assess projects. The Order’s major provisions on NEPA are outlined below.
1. CEQ Regulations to Be Rescinded
The Order directs CEQ to propose rescinding its longstanding NEPA regulations by February 19, 2025. CEQ’s authority to issue binding regulations has been subject to scrutiny in several ongoing court cases. The Executive Order’s instruction to rescind CEQ regulations aims to reinforce the D.C. Circuit’s November 2024 decision in Marin Audubon Society v. Federal Aviation Administration (Marin Audubon). The mandate also aligns with a decision issued on February 3, 2025 by the North Dakota District Court in Iowa et al. v. Council on Environmental Quality (Iowa v. CEQ). In both cases, the courts found that CEQ cannot issue rules that are binding on other agencies.
The courts in Marin Audubon and Iowa v. CEQ explained that, to issue rules with legally binding effect, an agency must have been granted rulemaking authority from Congress. This is done through what is called an “authorizing statute.” The National Environmental Policy Act created CEQ and authorized its advisory role but never gave CEQ rulemaking authority. Instead, CEQ’s “rulemaking authority” stems from Executive Order 11991 issued by President Carter in 1977, which President Trump’s Executive Order also revokes. The D.C. Circuit in Marin Audubon and the North Dakota District Court in Iowa v. CEQ determined that CEQ had no authority to issue rules based on violation of this separation of powers principle.
Unlike in Marin Audubon, in Iowa v. CEQ, CEQ’s NEPA regulations, specifically the 2024 Rule revising its regulations, were directly challenged. When someone challenges an agency’s regulation, the Administrative Procedure Act (“APA”) allows a court to “set aside” the regulation if it finds it to be arbitrary, capricious, or in excess of statutory authority. 5 U.S.C. § 706(2)(A), (C). Having found CEQ to be without rule making authority, the North Dakota court vacated CEQ’s 2024 regulatory revisions, positing that CEQ could go back to the most recent 2020 rule, but stated that “it is very likely that if CEQ has no authority to promulgate the 2024 Rule, it had no authority for the 2020 Rule or the 1978 Rule and the last valid guidelines from CEQ were those set out under President Nixon.” We will need to wait and see what CEQ does in response to Iowa v. CEQ, in light of the Executive Order directing CEQ to rescind all of its regulations. Would CEQ revert to its Nixon-era guidance for the time being while it works on issuing new guidance per the Executive Order?
2. Legal Uncertainty
There are several steps an agency needs to follow to comply with the APA to rescind a rule. However, there may be a question as to whether CEQ needs to comply with these procedural APA requirements at all if it does not have rulemaking authority. Normally, under the APA, an agency must publish a notice of rescission of rules in the Federal Register, which is then subject to notice and comment. To be upheld by a reviewing court if challenged, the agency must explain its departure from prior policy. The agency must demonstrate that its new policy is consistent with the underlying statute, supported by “good reasons,” and is an improvement on the previous policy. The agency must address factual findings supporting the previous rule and consider “serious reliance interests” that are affected by a change in policy. CEQ’s proposal to rescind would need to put forth strong support to meet those tests. The uncertainty resulting from these procedural issues could mean agencies carrying out NEPA inconsistently while the bounds of CEQ’s authority is resolved.
3. Agency-Level Rule Changes
Many federal agencies, including the Army Corps of Engineers and the Department of Transportation, have their own NEPA rules. The Executive Order instructs CEQ to assemble a working group to help agencies revise their regulations to be consistent with the new CEQ guidance and speed up approval timelines. Therefore, we could see agencies taking steps to substantially revise their NEPA regulations over the next months.
The Executive Order should not impact the case dealing with NEPA at the Supreme Court this term – Seven County Infrastructure v. Eagle County, Colorado. That case interprets statutory language in NEPA, not regulations. We continue to monitor the Seven County case.
Faster Federal Permit Approvals?
Beyond its directives regarding NEPA, the Unleashing American Energy Executive Order also endeavors to speed up federal permitting decisions by instructing agencies like the EPA and Army Corps of Engineers to eliminate delays in their review processes. This action aligns with a 2023 amendment to NEPA, called the “BUILDER Act” which expedites federal approvals for certain types of projects that fall under the definition of a “covered project,” such as transportation and energy projects.
The Executive Order specifically directs agency heads to expedite federal permit reviews for projects deemed critical to the U.S. economy or national security and to “undertake all available efforts to eliminate all delays within their . . . permitting processes, including . . . the use of general permitting and permit by rule.”
The Order further states that “[i]n all Federal permitting adjudications or regulatory processes, all agencies shall adhere to only the relevant legislated requirements for environmental considerations. . . [and] shall strictly use the most robust methodologies of assessment at their disposal and shall not use methodologies that are arbitrary or ideologically motivated.”
The above provisions are intended to help businesses navigate the permitting process more efficiently and reduce long wait times for approvals, although critical terms are open for interpretation and dispute.
What’s Next?
While a purported goal of the Unleashing American Energy Executive Order is to accelerate federal approvals, the transition will take time. Agencies will need to rewrite rules, and potential legal challenges could delay implementation. LLW will continue monitoring how these changes unfold and provide updates as agencies issue new policies or rules.