The Interior Department has shifted NEPA procedures from the federal regulations to an internal handbook to accelerate environmental reviews and incorporate Congress’ 2023 page limits and deadlines. NEPA has delayed both fossil-fuel and clean-energy projects — notably Ormat’s Dixie Valley geothermal project, which stalled after lawsuits alleging harm to an endangered toad. Environmental groups have sued the administration over the draft rule, arguing it removes mandatory public hearings, while Congress debates legislation like the SPEED Act to make permitting reforms more durable.
Tiny Endangered Toad Halted a Geothermal Project — Interior's New NEPA Rule Seeks To Cut 'Green' Red Tape
This Tiny Toad Blocked a Green Energy Project. A New Federal Rule Will Cut 'Green' Tape.
In February, the U.S. Department of the Interior — which administers roughly 20% of the nation’s public lands — adopted a streamlined approach to environmental reviews under the National Environmental Policy Act (NEPA). The new rule moves the department’s NEPA procedures out of the Code of Federal Regulations and into an internal handbook, giving agency officials broader discretion in how they implement reviews. It also incorporates the page limits and statutory deadlines for NEPA reviews that Congress established in 2023.
NEPA has long been a gatekeeper for major energy and infrastructure projects. While advocacy groups frequently use the law to challenge fossil-fuel development, NEPA has also delayed a number of clean-energy projects — sometimes dramatically.
One high-profile example involved Ormat Technologies’ Dixie Valley geothermal project in Nevada’s Great Basin Desert. The Bureau of Land Management approved a permit for the project in 2021; Ormat had been exploring the site since 2007 and proposed tapping local hot springs to generate enough geothermal power to serve about 44,000 homes and offset an estimated 6.5 million tons of carbon dioxide, according to Mother Jones. Construction halted in 2022 after local environmentalists filed a NEPA lawsuit alleging the development would harm a population of a rare toad that the federal government had listed as endangered earlier that year. Although a federal judge declined to issue an injunction, additional environmental suits followed and the project remained uncertain as of March.
The Interior Department says its revised NEPA policy is meant to reduce such delays and provide clearer, faster timelines for permitting. But the changes have drawn opposition: in December, the Center for Biological Diversity and the Sierra Club sued over the draft rule. Their challenge focuses in part on a provision that eliminates mandatory public hearings from the NEPA process, which they argue is unlawful and undermines public participation.
These legal challenges underscore a broader point: reforms enacted by agency rulemaking are vulnerable to judicial reversal and to changes in presidential administrations. Even if the Interior Department’s rule survives court scrutiny, a future administration could rescind or revise it.
To create more durable change, Congress is considering statutory reforms such as the SPEED Act, which the House approved in December. That bill would expand categorical exclusions (types of projects that do not require full NEPA review) and shorten the statute of limitations for NEPA litigation. However, the SPEED Act includes provisions critics say disadvantage offshore wind, making Senate passage uncertain. Supporters say the bill has nonetheless advanced bipartisan talks on permitting reform.
For now, the new Interior rule represents an effort to speed permitting by reducing procedural hurdles — a change that could help some energy projects move forward faster, while raising concerns among environmental groups about reduced transparency and public input.
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