TEAR DOWN THIS WALL: ALIGNING THE CORPS' ENVIRONMENTAL REVIEW OBLIGATIONS UNDER NEPA AND THE CLEAN WATER ACT FOR SECTION 404 WETLAND PERMITS.

• Author: Cassidy, Kevin
• Position: The Clean Water Act at 50: Requiem or Resurrection?

1. Introduction 396 II. The CWA's and NEPA's Common Purpose to Protect the Environment 399 III. The Public Interest Review Regulation 401 IV. The Corps' NEPA Scope of Review Regulation 407 V. The Corps' Application of its NEPA Scope of Analysis Regulation 411 VI. The Corps' Artificial Wall Between Its Public InterestAND NEPA Reviews 414 VII. Harmonizing the Corps' NEPA Review with the Public Interest Factors to Achieve the Goals of NEPA and the Clean Water Act 419 VIII. Conclusion 424 I. INTRODUCTION

   In the 1980s, the United States Army Corps of Engineers (Corps) was doing a little introspection, which is usually a good thing and perhaps more of us should have been doing more of it during that decade. (1) Specifically, the Corps was contemplating the extent of the analysis of environmental impacts it was obligated to undertake when issuing Clean Water Act (CWA) (2) Section 404 (3) permits to fill jurisdictional wetlands. At the risk of oversimplifying the Corps' dilemma, the agency was grappling with the scope of its environmental review for Section 404 permits and whether it should be: limited specifically to the portions of a private project over which the Corps exercised some regulatory jurisdiction (wetlands); or include the environmental effects of the whole project (including non-aquatic impacts). (4)

   This was not a navel-gazing exercise by the Corps; large infrastructure and development projects often require filling federal jurisdictional wetlands, thus triggering the need for a CWA Section 404 permit. (5) Such projects can have significant effects on the environment beyond impacts to aquatic resources, including: upland deforestation and habitat fragmentation; growth-inducing economic impacts; effects on non-aquatic threatened and endangered species; and increased greenhouse gas emissions. (6) Transnational oil and gas pipelines, (7) overhead electrical transmission lines, (8) and massive marine port projects (9) are but a few types of large non-federal infrastructure projects that typically require permitting from the Corps.

   From the Corps' self-reflection emerged a new regulation and the reaffirmation of a pre-existing one. First was the Corps' revamp of its "public interest review" regulation, which the agency originally promulgated in 1977 pursuant to its congressionally-delegated authority to administer the CWA Section 404 permit program. (10) On its face, the public interest review regulation is an extremely muscular interpretation of the Corps' authority to regulate the effects of projects that reach beyond the impacted aquatic resources triggering the CWA Section 404 permit requirement. These effects include economic impacts, impacts to wildlife values, land use, energy needs, and public safety. (11) In 1986, the Corps reiterated its commitment to its broad public interest authority. (12) The public interest review regulation has not been amended since.

   A little more than a year later, the Corps issued brand new, agencyspecific National Environmental Policy Act (NEPA) (13) regulations (14) to compliment the NEPA regulations of the Council on Environmental Quality (CEQ). With these regulations, the Corps sought to codify several court decisions that upheld the agency's discretion to limit its environmental analysis to only the portions of a private project (15) that triggered its regulatory jurisdiction--this dynamic is colloquially known as the "small handles" issue. (16) In such cases, the question arises as to which of the project's environmental impacts legitimately fall within the purview of the action agency's NEPA analysis and which do not. (17) The case law since the promulgation of its NEPA regulations suggests that the Corps, more often than not, errs on the side of narrowly defining the scope of its NEPA review associated with its issuance of CWA Section 404 permits. (18) Such cramped NEPA environmental reviews are inconsistent with the Corps' broad authority under the CWA (19) and the agency's obligation to ensure a proposed activity and its intended use are not contrary to the public interest. (20) The Corps should resolve this tension by taking a broader view of the scope of its NEPA analysis for CWA Section 404 permits; one that is more faithful to the plain language of the Corps' NEPA regulations as well as aligned with its CWA public interest review, which often happens simultaneously as its NEPA analysis.

2. THE CWA'S AND NEPA'S COMMON PURPOSE TO PROTECT THE ENVIRONMENT

   First, a few basics. NEPA has been described as the country's "basic national charter for protection of the environment." (21) Congress recognized that "the environment" included humans and, accordingly, NEPA requires agencies to evaluate "major Federal actions significantly affecting the quality of the human environment." (22) Such evaluation was necessary to carry out the continuing policy of the federal government "to use all practicable means and measures ... to foster and promote the general welfare, to create and maintain conditions under which man and nature can exist in productive harmony, and fulfill the social, economic, and other requirements of present and future generations of Americans." (23)

   Congress intended the scope of NEPA's environmental effects review to be broad and to include ensuring that "presently unquantified environmental amenities and values may be given appropriate consideration in decisionmaking [sic] along with economic and technical considerations." (24) To carry out this ambitious goal, Congress directed the federal government to prepare detailed statements on the environmental impacts of major federal actions--known as Environmental Impact Statements (EISs). (25) NEPA created the CEQ to promulgate regulations governing how federal agencies were to carry out NEPA's mandates. (26)

   The CEQ's NEPA-implementing regulations have been a bit in flux. In July 2020, the Trump administration issued the first extensive changes to CEQ's NEPA regulations in more than 40 years. (27) However, the Biden administration moved quickly to undo some of the changes made by the previous administration. On April 20, 2022, CEQ issued a final rule that became effective on May 20, 2022, amending certain provisions of its NEPA implementing regulations with the goal of "restor[ing] provisions that were in effect for decades before being modified in 2020." (28) Most relevant for this Article is the Biden administration's rule change to "restore the definitions of 'direct' and 'indirect' effects, and 'cumulative impacts' from the 1978 NEPA Regulations." (29) "Indirect effects" are those "caused by the action and are later in time or farther removed in distance, but are still reasonably foreseeable." (30) An effect is reasonably foreseeable if it is "sufficiently likely to occur such that a person of ordinary prudence would take it into account in reaching a decision." (31) Cumulative effects are those "that result from the incremental effects of the action when added to the effects of other past, present, and reasonably foreseeable actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions." (32)

   Finally, NEPA is a procedural statute, which means while federal agencies must consider the environmental impacts of their actions, NEPA does not mandate a particular outcome. (33) Rather, NEPA is concerned with preventing "uninformed--rather than unwise--agency action." (34) Public participation in the NEPA process is thus a critical component of the statutory scheme. (35)

   The CWA was enacted to "restore and maintain the chemical, physical, and biological integrity of the Nation's waters." (36) Among other prohibitions, the CWA prohibits the discharge of dredged or fill material into the waters of the United States without a permit issued by the Corps pursuant to Section 404 of the CWA. (37) The Corps adopted regulations, known as the "public interest" factors, to implement its permitting authority. (38) In addition to its public interest review, the Corps must evaluate a proposed CWA Section 404 permit under environmental criteria promulgated by the Environmental Protection Agency known as the 404(b)(1) guidelines. (39) Only when a proposed project satisfies the 404(b)(1) guidelines and the Corps determines it is not contrary to the public interest will the Corps issue the requested CWA Section 404 permit.

3. THE PUBLIC INTEREST REVIEW REGULATION

   First adopted on July 19, 1977, the Corps' public interest review regulation required "evaluation of the probable impact of the proposed activity and its intended use on the public interest." (40) The regulation codified a broad set of factors the Corps must consider when evaluating CWA Section 404 permit applications. (41) The regulation prohibited the granting of a CWA Section 404 permit unless the Corps found the permit to be in the public interest. (42)

   The Corps made some minor changes to the regulation in an interim rule issued in 1982; the most notable being elevation of the importance of analyzing cumulative effects of the proposed project and its intended use. (43) The Corps also expanded the list of factors to be considered when evaluating a project proposal. (44) In 1984, to comply with a settlement agreement reached in National Wildlife Federation v. Marsh, (45) the Corps issued a final rule with revisions to the public interest review regulation. (46) The 1984 Rule included a reference to the Environmental Protection Agency's 404(b)(1) guidelines, which had been published in 1980. (47) Non-compliance with the 404(b)(1) guidelines would be cause for permit denial. (48) The Corps also made a subtle change to the regulation's language that appeared, to some commenters, to shift the presumption on the public interest determination. (49) While the original regulation stated "[n]o permit will be granted unless its issuance is found to be in the public interest," the 1984 version changed the regulation to state...