What the FY2026 NEPA Reform Means for Permitting Teams

The baseline delay problem

The average Environmental Impact Statement takes 4.5 years to complete, and a quarter of them go past six years ². Some projects have taken 15 years or more ². When litigation happens, it adds an average of 4.2 years of delay ⁸. For data centers alone, roughly $64 billion worth of projects are either blocked or delayed by permitting ¹. Before highways, wind farms, or broadband lines get built, the lead agency has to complete an EIS under NEPA, and this timing is where much of the delay concentrates.

Legislative momentum

There have been many legislative attempts to fix this. The Fiscal Responsibility Act in 2023 set a two-year deadline on EISs and capped documents at 150 pages, with 300 pages allowed for complex projects ³. The One Big Beautiful Bill Act in July 2025 created an opt-in fast track where sponsors can pay 125% of review costs to compress an EIS to one year and environmental assessments to 180 days ⁸. The SPEED Act passed the House in December 2025 and focuses on reducing litigation timelines ⁸. Executive Order 14154 told CEQ to rescind its government-wide NEPA regulations entirely as of January 2026, leaving each agency to write its own procedural handbook ⁷. USDA's final rule now requires a responsible official to certify page limits and deadline compliance before the statutory clock stops ¹⁷.

Are timelines and page limits working?

Looking at the data, there is reason to doubt whether any of it is working the way it was intended.

CEQ's 2025 data shows median EIS completion times improved to 2.2 years in 2024 ². That is a good sign, but only 41% of EISs that year were completed within two years ². More than half are still missing the deadline. The White House credits deregulatory efforts for the improvement ¹⁶, but CEQ's own data suggests the downward trend was already happening before the FRA passed ².

The page limits have a similar problem. Practitioners at Holland & Hart describe an "appendix loophole" where agencies move raw data and analysis into technical appendices that are not subject to the cap ¹⁴. Staff have gotten good at it. The narrative body gets shorter, but the actual workload does not change. USDA admitted in their rulemaking that responding to public comments created "burdensome and time consuming efforts" that went past the two-year deadline even under previous streamlining attempts ¹⁷.

Funding and capacity constraints

There is also a resource problem. The One Big Beautiful Bill Act rescinded roughly $100 million for state and local review capacity building ⁸. Agencies are being told to go faster while losing funding and staff. ICF found that federal workforce reductions created a bottleneck where agencies can oversee but cannot drive the analytical schedule, so sponsors end up preparing their own documents to avoid delays ⁶. The deadline exists only on paper when capacity does not match the mandate.

NEPA is not the only statute on the path

NEPA also is not the only law a project has to clear. Orrick called NEPA reform an "incomplete solution" because the Endangered Species Act, the National Historic Preservation Act, and many state-level land use regulations still apply ⁷. None of the federal reforms described here remove those parallel obligations.

Where categorical exclusions can help

Categorical exclusions are where the reforms could be most useful in practice. CEQ's new guidance lets agencies adopt each other's CEs without modification for similar actions ⁴. The Nuclear Regulatory Commission added categories for equipment servicing and previously disturbed areas at nuclear sites ¹¹. The Department of the Interior allows bureaus to rely on other agencies' CE determinations without running their own extraordinary circumstances review ¹². For small modular reactors, broadband, and rail abandonments, that could cut months of duplicated work. CEQ also launched a Categorical Exclusion Explorer with over 2,000 searchable CEs and a pilot platform called CE Works to digitize exclusion documentation ⁴. Harvard's Environmental and Energy Law Program points out the new guidance removes the requirement for public notice and comment before issuing or revising CEs ⁵.

Litigation and transition risk

The Sierra Club sued USDA arguing the new rules restrict the hard look NEPA requires ¹⁸. Earthjustice sued EPA over repealing climate-focused NEPA considerations ¹⁵. The National Association of Counties warned that rescinding CEQ guidance creates a "patchwork NEPA system" where projects crossing multiple agencies navigate conflicting rulebooks ⁹. Stantec flagged that the sudden shift creates legal uncertainty for projects that spent millions based on old rules and could face "arbitrary and capricious" claims during the transition ¹³.

Records, deference, and judicial review

The Seven County Infrastructure Coalition v. Eagle County decision in 2025 helps when courts give "substantial deference" to agency technical judgments and avoid vacatur as a default remedy ⁸. That only works if the administrative record is clean. When an EIS gets challenged, it usually is not because the science was wrong. It is because the documentation was disorganized, nobody can reconstruct who approved what, and decisions were not tracked. Shared systems where everyone involved sees the same timeline, where reviews are tracked, and audit trails are preserved matter more for streamlining judicial review than cutting pages off a document.

AI and compressed timelines

Agencies are also starting to use AI to meet compressed timelines, and that introduces its own complications. Legal scholars at NAEP warn of what Tuoya Saren calls "Hard Look 2.0," where courts demand agencies explain algorithmic reasoning and prove human ownership of the output ¹⁰. DOE is already running PermitAI, a large language model tool that analyzes thousands of NEPA documents ¹⁰.