Would Space Licenses Have to be “Major” Federal Actions Forever? Opportunity to Comment on Proposed Environmental Regulations

Might the preparation of an environmental impact statement be about to get easier or harder for space transportation providers?  A notice of proposed rulemaking (NPRM) that would overhaul the regulations that implement the National Environmental Policy Act (NEPA) raises a concern over the proposed definition of “major federal action.”  The proposed regulations could take away the FAA’s current ability to treat issuing a launch or reentry license as an action that is not “major” under NEPA.  Industry has waited a long time for the FAA to do this, but now the window may be closing.

Background:  Under the NEPA, a federal agency must assess the environmental effects of its major federal actions.  Issuing a license to a launch or reentry operator, or to the operator of a launch or reentry site, constitutes a major federal action subject to NEPA assessment under the Council on Environmental Quality’s current regulations.   Currently, operators seeking a Federal Aviation Administration license must spend a lot of money providing the FAA the data and analysis necessary for either an environmental impact statement or an environmental assessment.

A new NPRM:  On January 10, the Council on Environmental Quality issued an NPRM in which it proposed an overhaul of the NEPA regulations that apply to federal agencies such as the FAA, the FCC, and NOAA, among a host of others.  CEQ also issued a fact sheet summarizing its proposed changes.  The fact sheet raised an interesting possibility:  the CEQ proposes to clarify that a “major federal action” would “not include non-discretionary decisions and non-Federal projects (those with minimal Federal funding or involvement).”  Could this mean that for a launch or reentry operator not relying on federal funding or involvement–whatever that might be–that simply applying for a license would no longer trigger NEPA review? That may have been the intent, but the CEQ’s actual proposed regulatory text appears to ensure that NEPA review will continue to apply to the FAA’s issuance of a license or permit, and possibly remove an agency’s flexibility to treat it as not “major.”

The CEQ could change the definition of “major federal action” to reduce agency flexibility?  In proposed 40 C.F.R. § 1508.1(q)(2)(iv), the CEQ would include as “major federal actions” and thus subject to NEPA review:

Approval of specific projects, such as construction or management activities located in a defined geographic area. Projects include actions approved by permit or other regulatory decision as well as Federal and federally assisted activities.

This marks a change from the current regulatory definition, which defines the above only as “federal actions,” not “major federal actions.”  The proposed change would harm the chances of the FAA ever being able to treat launch, reentry or “spaceport” licenses as not requiring NEPA review.  Is this change deliberate or an accident?  Does the CEQ mean to expand the scope of what government authorization must always be viewed as major?  I suspect it is accidental in light of the CEQ’s contemplation of federal actions being treated as non-major when it states:

agencies may identify actions that are not subject to NEPA in their agency NEPA procedures, including (1) non-major Federal actions; (2) non-discretionary actions, in whole or in part; (3) actions expressly exempt from NEPA under another statute; (4) actions for which compliance with NEPA would clearly and fundamentally conflict with the requirements of another statute; and (5) actions for which compliance with NEPA would be inconsistent with Congressional intent due to the requirements of another statute. These changes would conform to the new § 1501.1, ‘‘NEPA threshold applicability analysis,’’ section, which provides five considerations in determining whether NEPA applies to a proposed action.

(Emphasis added)

It would be worth seeking clarification, if only to preserve the possibility of the FAA requiring less extensive environmental reviews in the future. In short, it bears asking whether the CEQ meant to mandate that licensing would always have to be a “major federal action” in contrast to the current regulations, which allow an agency to treat licensing as merely a “federal action.”

The bulk of the CEQ’s preamble discussion of how it would make the definition of major federal action hew more closely to NEPA itself focuses on federal actions that are “major” for reasons of the federal government’s financial involvement rather than, as with space activities, due to the issuance of government approvals in the form of licenses or permits. For example, the CEQ proposes not to treat as major federal actions certain farm loan guarantees provided by the Farm Service Agency.  The CEQ notes that “FSA does not control the bank, or the borrower; the agency does not control the subsequent use of such funds and does not operate any facilities. In the event of a default, properties are sold, and FSA never takes physical possession of, operates, or manages any facility. SBA’s business loan programs operate in similar fashion.”  NPRM at 1709.

Although launch and reentry licenses are federal actions on account of being federal approvals, perhaps some of the logic regarding financial support might apply to launch and reentry as well.  The CEQ invited comment on what other activities tit should not treat as major federal actions.  It might be helpful to provide the agency a description of how the federal government does not own or operate launch companies, much like it does not own or operate banks.

Categorical exclusion.  At one point, without much discussion, the CEQ proposes that as an alternative to establishing government-wide Categorical Exclusions (actions not requiring environmental assessment), it could instead revise the definition of “major federal action” to exclude certain categories of activities from environmental assessment. NPRM at 1696.  Although the notice does not say so, perhaps the CEQ meant by this that activities currently cast as categorical exclusions could just be declared not to be major federal actions.  Given that the CEQ invited comment, it is signalling that it is receptive to hearing more about this.

Could the FAA reduce the extent of its environmental review?  It’s been over two decades since the Office of Commercial Space Transportation was moved from the Office of the Secretary in the Department of Transportation to the FAA.  The FAA has conducted numerous environmental reviews in those decades, but a quick review of the FAA’s own procedures for implementing NEPA shows that the licensing of space transportation is still not the subject of a categorical exclusion.  Categorical exclusions allow for a dramatic reduction in the scope of environmental review.

Compared to the emissions and other environmental effects produced by other industries, might it not be time to visit the question of whether the effects of launch and reentry are minor in comparison?  Might the data now be available for a categorical exclusion?

Lastly.  The NPRM is rich with other opportunities for comment.  Interested launch and reentry operators should review the whole thing with an eye toward commenting.  Particularly where the CEQ invites comment, the CEQ may be receptive to making changes in response to suggestions.  The definition of what constitutes the “human environment,” for example, might be of special interest to space operators.

Comments due:  March 10