Note: This is an update to our earlier post on NEPA and the stimulus.

If your business has gone through the environmental permitting and review process for any of its projects or operations, you know it takes time…a lot of time.  Permits can tack on years, or even decades, to the delivery time of an infrastructure project.

Frequently, the longest and most significant environmental roadblock to a project comes courtesy of the National Environmental Policy Act, or NEPA.  NEPA is an umbrella statute of sorts; it requires federal agencies to consider the environmental impact of every major federal action.  An August 2007 report by the American Association of State Highway and Transportation Officials (AASHTO)--read the PDF of the report here--estimates that the current average time to complete a NEPA review for a major transportation project is 60 months, or 5 years.

In fact, NEPA continues to make it nearly impossible to get money into the economy quickly.  The 2008 auto industry bailout is a good example. 

Congress allocated $7.51 billion in funding to the “advanced technology vehicles” program enacted by the Energy Independence and Security Act loan program, in the hopes that it would reinvigorate our nation’s ailing automobile industry.  But the loans could not be disbursed immediately because NEPA applied, and DOE spent the remainder of 2008 embroiled in the NEPA environmental review process.  More importantly, the auto industry was not able to tap into any of this money, and after an auto bailout bill failed in Congress, the President had to tap into the TARP program to help the auto industry.  The Congressional and TARP bailouts might have been avoided, if not for NEPA.

This week, during Senate floor debate of H.R. 1, the “American Recovery and Reinvestment Act,”—aka the “stimulus package”—Senator John Barrasso (R-WY) and six of his colleagues offered an amendment that streamlines the NEPA permit process for projects funded by the Act.  The amendment would have set a deadline of 270 days from the date of enactment of the Act for completion of all NEPA reviews for covered projects.  The Chamber and 23 other industry groups, representing transportation, infrastructure, agricultural, manufacturing and construction sectors, strongly supported Sen. Barrasso’s amendment.  This letter can be found here.

Senator Barbara Boxer (D-CA), offered her own amendment on NEPA.  However, this version, as originally written, did not streamline or expedite NEPA.  Instead, it would have required that any stimulus-related projects that trigger NEPA either come into compliance, or risk being replaced by other, NEPA-compliant projects.

The logic behind both amendments is similar: if projects receiving stimulus money are truly shovel-ready, then they should not have a problem completing NEPA.  However, there was a major downside to Sen. Boxer’s original amendment, because NEPA could conceivably be reopened for all of these shovel-ready projects if greenhouse gases are regulated by other environmental laws.

This point requires some explanation.  Although shovel-ready projects have presumably gone through NEPA, those reviews did not cover greenhouse gas emissions, because it was not required (and still isn’t).  However, that all changes if greenhouse gases are regulated.  Given that we are literally one agency or court decision away from   regulation of greenhouse gases under the Clean Air Act or Endangered Species Act, a reopening of NEPA for CO2 is a very legitimate concern.  If this happens, every one of those shovel-ready projects with a completed NEPA review could then have to contend with a lawsuit or appeal charging that the NEPA environmental impact statement for that project needs to be updated to include CO2.  Under the terms of Sen. Boxer’s original amendment, those projects could have been swapped out for a different project that does not produce greenhouse gases.

In the end, Sen. Barrasso and his colleagues negotiated with Sen. Boxer to revise the language in her amendment.  Ultimately, the version of her amendment that did pass is considerably more in line with Sen. Barrasso’s vision: devotion of adequate resources to agencies to carry out NEPA, a mandate that NEPA must be completed on an expeditious basis, and 90-day reports from the President on the status of NEPA as it pertains to stimulus-funded projects.  There is also a tacit recognition that NEPA as it is currently carried out is far from perfect.

The Chamber is grateful for Sen. Barrasso’s leadership on this issue, and is pleased that both Senators and their staffs were willing to reach across the aisle and make the right decisions for our nation’s economic recovery.