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NEPA 101 – How Environmental Review Creates Better Projects

At its core, the National Environment Policy Act (NEPA) mandate is simple: Before federal agencies (and the involved public or private partners) can put a shovel in the ground they must evaluate, document and report the potential social, economic and environmental impacts a project may create – keeping public stakeholders informed throughout the development process.

In brief, NEPA is about transparency for the public. It’s about making sure those in decision making roles serve as “trustees for succeeding generations” specific to protecting and nurturing our environment.

But what triggers NEPA, and what are the project consequences of ignoring this law? Does NEPA in fact produce better projects? What does the process entail? Let the following FAQ and downloadable and printable NEPA decision-making tool serve as your guide.

Access your copy of our NEPA decision-making checklist and flowchart

What is NEPA? Why is it important to the public and private sectors?

NEPA was signed into federal law in 1970 – setting the long-term stage for environmental policy for public and private projects in the U.S. It is a procedural statute that requires federal agencies to work through a number of steps while evaluating all potential social, economic and environmental impacts before construction can begin.

NEPA applies to all federal agencies and their actions – “actions” meaning projects, policies, permitting, as well as regulations and licensing. NEPA established the Council on Environmental Quality (CEQ) to oversee process implementation and make sure federal agencies meet their obligations.

What sets NEPA in motion?

Federal funding! The NEPA process must be followed even if just $1 of federal money is allocated. Once federal funding is involved, the lead federal agency sets in motion, conducts and is ultimately responsible for seeing the process through. The lead federal agency can and often does delineate tasks, but everything filters up through them.

The NEPA statute applies to a broad range of federal government actions, including:

  • Issuing federal regulations and policies
  • Providing federal funds to public and private projects
  • Making federal land management decisions
  • Issuing federal permits/licenses/approvals
  • Other federal undertakings that may result in the potential for significant environmental impacts
The NEPA process must be followed even if just $1 of federal money is allocated.
Chris Hiniker

What are the consequences if the NEPA process is ignored?

The consequences of not adhering to NEPA are severe and long-lasting. The responsibility of conducting the NEPA process (outlined in detail below) falls on the lead federal agency. As a result, the consequences often hit them the hardest. However, they distinctly impact private developers, communities within which projects are being planned and all other involved parties. These impacts include:

1. Damaging lawsuits. The NEPA process is enforced by a “citizen suit provision,” meaning anyone can bring a lawsuit against the responsible federal agency for violations. If a federal agency allocates funds for a specific project and, for example, the private developer moves forward without waiting for the NEPA process to close, the federal agency is liable. But lawsuits impact all involved parties; they begin with an injunction that immediately halts any in-progress work, taking significant time, effort, as well as attorney and court costs to resolve.

2. Say goodbye to funding. If anyone puts a shovel in the ground for a given project before the lead federal agency has completed the NEPA process, funding may be denied. Funding is a pain point many communities and private developers face; taking action before the NEPA process is carried out in full can put your entire project at risk.

3. Lengthy project delays. NEPA non-compliance creates a cascade of potential project delays, including public discord and intervention, lawsuits, review agency intervention, the need to completely redesign a project and NEPA documentation re-writes, among many others.

4. Public resentment. Those who ignore NEPA often spark resentment and lose trust with the public and involved agencies/stakeholders. Choosing to neglect the process means they’ve chosen to neglect the environment as well as their commitments to resolving a community’s or developer’s needs.

public attending a meeting

Public awareness and engagement are key to NEPA compliance. Here, we see SEH staff involved in various types of public and stakeholder outreach.

How does NEPA produce better projects?

Environmental laws like the Clean Air Act often inspire excitement because they’re tied to specific outcomes (e.g., eliminating or reducing pollution). NEPA, on the other hand, is a procedural requirement and can feel like a time-consuming obstacle. But the reality is that NEPA plays a critical role in producing better projects. Here are four ways:

1. Reduces timelines and budget risks. Studies by the CEQ have shown that projects that start the NEPA process “after” decisions have been made often result in public and private stakeholders seeking “litigation-proof” documents – increasing project development costs and lengthening delivery times.

2. Demands accountability. The NEPA process undoubtedly protects, restores, and enhances natural resources and our built environments. How? By providing public officials, resource agencies and other stakeholders with important information and creating the formal opportunity (mandate) for decision makers to take a hard look at potential consequences associated with a proposed action.

3. Minimizes adversity. NEPA encourages the inclusion of mitigation commitments, which help project leaders avoid and/or minimize potential adverse project effects.

4. Public and stakeholder buy-in! Showing the public why project xx is important socially, economically and environmentally lays the foundation for buy-in from day one.

Let’s get technical. What does the NEPA process entail?

The NEPA process must include a lead federal agency (responsible for conducting the process and compliance), usually determined through jurisdictional authority. Examples include the Federal Highway Administration (FHWA), the lead federal agency for most highway projects; the U.S. Army Corps of Engineers (USACE) for levee and flood control projects; the Federal Aviation Administration (FAA) for airport projects; and the Federal Transit Authority (FTA) for transit projects.


There are times when more than one federal agency may be involved. In these cases, the agencies serve as joint leads, or one or more agency may participate as a “cooperating agency.” For example, the Bureau of Land Management (BLM) may be the lead federal agency for a solar farm on federal land while the Department of Energy (DOE) may serve as the cooperating agency.

When the government proposes a new dam or bridge, or when a private company seeks to build a pipeline that needs a federal permit, NEPA requires the lead federal agency to take several steps before breaking ground:

  1. Analysis, documentation, disclosure and consideration. The lead federal agency is required to conduct a study that details the purpose of the project. They must then consider a range of solutions and provide rationale on a preferred alternative solution/plan for the project; the potential consequences of the preferred alternative (social, economic and environmental); and measures that can be taken to reduce or eliminate harmful project impacts.
  2. Public and agency engagement. The lead agency, in partnership with the private developer or community where the project is taking place, holds public meetings/hearings with open, meaningful stakeholder and agency participation and involves local experts in the project’s development.
  3. Reporting. Unless the project qualifies for a categorical exclusion (CATEX or CE) because of its low environmental impact, the lead agency needs to conduct and distribute one of two reports: an environmental impact statement (EIS) for projects with potentially significant impacts and public controversy, or an environmental assessment (EA) for projects where the impacts are less significant or controversial. These reports (expanded on within the next section) are often conducted by specialists like SEH.

The following flowchart highlights each step in the NEPA process. At the conclusion of this article, you’ll find an in-depth decision-making checklist and tool (complimentary) that can be downloaded, printed and used to make sure your projects are proceeding the right way. 

NEPA flowchart
Highlighting key steps in the NEPA process, and where you should begin.

I want to know more about the different NEPA documentation options...

There are three primary categories of review and documentation as part of the NEPA process:

  • Environmental Impact Statement (EIS). For major federal actions that could greatly affect social and economic conditions or environmental quality, NEPA requires the lead federal agency to prepare an EIS. An EIS is a detailed analysis of the potential impacts of a proposed action and the range of reasonable alternatives. Public participation is an important part of the EIS process.
  • Environmental Assessment (EA). When the need for an EIS is unclear, an agency may prepare an EA to determine whether an EIS is needed or to issue a Finding of No Significant Impact (FONSI). An EA is a more brief analysis. The process requires opportunity for public consumption, comment and feedback. The federal agency leading the process will approve the findings based on the information within the NEPA document and take into consideration public or other agency comments. The findings are called a Record of Decision (ROD).
  • Categorical Exclusion (CE or CATEX). Projects that do not anticipate any significant environmental impacts call for the less rigorous CE/CATEX to be prepared. It should be noted that NEPA does not preclude nor replace state environmental reviews. Several U.S. states, including Minnesota and Wisconsin, have state laws similar to NEPA and require their own review and documentation on certain types of projects. Colorado and Iowa, among others, do not have state-specific environmental protection regulations.

Where should I begin?

Understanding the NEPA process directly impacts your ability to undertake projects in a legal, timely and transparent manner, and your ability to protect our built and natural environments. Don’t wait to familiarize yourself with the process.

Simply fill out the form to a downloadable and printable process flowchart and decision-making checklist you can use to further familiarize yourself with NEPA, understand the steps federal agencies and project sponsors are responsible for, and make sure your projects are proceeding the right way.

About the author

Chris Hiniker

Chris Hiniker is a project manager and senior planner. He is a certified planner through the American Institute of Certified Planners (AICP) with over 33 years of experience. Over his 20+ year career with SEH, Chris has specialized in transportation planning and environmental review and documentation. Contact Chris directly for additional insight into the NEPA process and where to begin! Contact Chris