Chevron ruling upends permitting system Biden wanted to stabilize

Permitting consultants and attorneys say they are hearing from developers wanting to know how a recent U.S. Supreme Court decision that limited courts’ ability to defer to agency actions would affect their projects.

“After Chevron, there’s a collective hold of breath in the permitting world,” said Karen Hanley, a former official at the White House Council on Environmental Quality. “Regulators and developers alike are bracing for a seismic shift in how we approach environmental assessments. We’re seeing extraordinary concerns.”

More litigation could hurt not only the private sector but also the White House’s ambitions to move renewable energy, electric vehicle charging stations and other favored projects forward as quickly as possible.

It is not yet clear what impact the Supreme Court’s decision in the case will have on decisions made under the National Environmental Policy Act. Entry of Loper Bright. w. Raimondowho overthrew Chevron doctrine that protects federal agencies’ interpretations of their rulemaking authority. And that uncertainty is harmful, given how sensitive funders can be when a project’s outcome is uncertain, and how hard the Biden administration has worked to create robust processes that make permitting more predictable.

“Developers are processing the reality of this uncertainty,” said Alex Herrgott, who headed the Federal Permitting Improvement Steering Council under former President Donald Trump. “The concern about trying to predict risk over a seven- or 10-year permit lifecycle is approaching a pent-up level of panic.”

“Instead of giving developers a clear understanding of how the agency may interpret specific statutes or regulations, we are left with more confusion, which further complicates the already complicated federal infrastructure permitting process,” agreed Ross Pilotte, strategic development manager for SWCA Environmental Consultants.

Paths of challenge

Hanley, now a managing consultant at Trinity Consultants, said one possible outcome is that courts will begin to examine whether the cutting-edge environmental science that agencies use in their NEPA reviews is strictly required by the statute.

Hanley said this type of judicial review can create a gap between what agencies consider scientifically necessary and what courts consider legally sufficient to ensure compliance with NEPA, especially in rapidly evolving areas such as assessing climate change impacts.

Another possibility is that the Biden administration’s two final rules amending NEPA regulations will be subject to judicial review.

Hanley said the regulations, which now explicitly require agencies to consider the impacts of climate change, go beyond the original language of NEPA and could be vulnerable to legal challenges down the road.Chevron landscape.

“Proponents of the bill will be able to challenge the agency’s objective findings if they find them legally insufficient,” agreed Herrgott, now president of the Permitting Institute.

“They could argue that the agency was too restrictive. Or an opponent of the bill could argue that it wasn’t restrictive enough,” Herrgott said. “The court will have to evaluate all of the perspectives of all of the parties on what they believe is the prevailing science.”

Permitting experts also agreed that projects with limited case law, such as carbon capture, may be more vulnerable to litigation because they are novel and may have more complex climate implications.

Legal Impact in Contest

But it is also possible, Loper Light The decision will not have a significant impact on permitting, said Peter Whitfield, a partner at NEPA law firm Sidley Austin LLP.

Whitfield said he doesn’t anticipate a sharp increase in litigation because the language in NEPA doesn’t give agencies much leeway to make their own interpretations.

Moreover, the Administrative Procedure Act still gives agencies primacy in fact-finding and policy assessments, “so challenging some agency actions may still be an uphill battle,” Whitfield said.

The court’s decision also doesn’t completely reject the agency’s expertise. Rather, it specifies that courts, when using independent judgment to interpret the meaning of statutes, can still seek guidance from “those responsible for implementing the particular statutes.”

And even without Chevron Whitfield said agencies still have broad discretion under the Administrative Procedure Act’s “arbitrary and capricious” standard, which requires only that agency actions be rationally explained and rationally related to established facts.

The uncertainty created by the ruling may also provide an opportunity for the Federal Permitting Improvement Steering Council to help project sponsors and agencies complete their work as early as possible.

Permitting Board staff review Chevron decision to understand how it might impact their work, and “we will continue to serve as a coordinating authority to help project sponsors navigate the federal environmental impact review and authorization process, in addition to working with our federal partners to clearly communicate expectations to those sponsors,” said Brittney Gordon, an agency spokeswoman.