If the United States wants to remain competitive in the age of artificial intelligence, it must reform the National Environmental Policy Act, the Institute for Energy Research argues.

In a world free from political constraints, the Institute would repeal NEPA entirely. It casts the law as an unnecessary hinderance to projects that improve human lives, including ones that do so by strengthening the environment.

“If, by delaying the achievement of project sponsors’ and agencies’ goals, NEPA provided superior environmental and human outcomes, it would be a successful law worth upholding,” the IER allows. “Unfortunately, NEPA yields poor outcomes in both respects by serving as a barrier to conscious human action.”

As a case in point, the IER shares an example from the Property and Environmental Research Center. “There are about 80 million acres of federal forests that need restoration, but, due to NEPA and other factors, only 2 million acres are being treated annually,” the Center wrote in an amicus brief filed with the Supreme Court for Seven County Infrastructure Coalition v. Eagle County. “This forest restoration backlog fuels larger and more destructive wildfires that harm forest health, wildlife habitat, air and water quality, and outdoor recreation.”

The IER acknowledges that eliminating NEPA is “currently outside the realm of political respectability.” Therefore, it spends much of its time in an Oct. 20 post about NEPA’s history discussing changes that could minimize the law’s downsides.

“Litigation reform needs to be at the forefront of any attempt to reform NEPA,” the IER advises. “The opportunity for interest groups to pursue lawsuits against important projects over trivial concerns reduces the United States’ economic competitiveness by creating higher costs and uncertainty.”

The lawsuits cause problems even though agencies almost always succeed at defending their decisions. The IER cites research from the Breakthrough Institute showing that agencies won more than 80% of NEPA appeals cases from 2013 to 2022. But those cases concluded an average of 4.2 years after the environmental impact statement or environmental assessment in question was issued.

“Organizations like the Sierra Club do not need to win their case to harm a project; they just need to delay it long enough that the project becomes uneconomic,” the IER says. “Based on this metric, the average of 4.2 years for project litigation means that they have been remarkably successful.”

NGOs’ Role

About 72% of the lawsuits from 2013 to 2022 came from nongovernmental organizations, the IER says, noting that 10 organizations accounted for 35%.

“These numbers indicate that supposedly local and specific environmental challenges are being delegated to larger organizations bent on disrupting project completion for ideological reasons,” it says. “For instance, the Sierra Club’s Environmental Law Program celebrates its ‘lawyer-organizing’ for the sake of leading ‘the charge against climate change and polluters.’”

Outside investors can fund lawsuits in return for a share of any settlement or judgement. “For foreign nationals and corporations, an exemption from U.S. withholding tax allows them to profit from delaying energy projects tax-free,” the IER reports. “The ability to profit from NEPA litigation highlights how its procedural steps serve to benefit interest groups rather than achieve genuine environmental progress.”

Among many other reforms, the IER recommends that Congress require NEPA litigants to compensate project sponsors if their lawsuit fails.

“For this reform to fully account for costs borne by project sponsors, it must include not only legal fees but also the opportunity costs of lost revenue and delayed investments resulting from the project being in legal limbo,” the IER says. “With genuine downsides to unsuccessful litigation, a loser-pays standard would reduce the number of NEPA challenges and better ensure that they arise from specific, genuine concerns rather than general antipathy.”

The SPEED Act

The IER also urges Congress to pass the SPEED Act. Although doing so would not eliminate litigation risk, the Institute says the bipartisan bill would still represent meaningful reform.

“At its core, the bill recognizes that NEPA is meant to be about agencies reasonably evaluating environmental concerns arising from their activities, not about requiring them to devote significant time and resources to discovering and evaluating an array of possible alternatives and outcomes,” the IER outlines. “It avoids duplication of effort by allowing compliance with other federal, state, and tribal statutes to serve NEPA’s purposes. Crucially, it sets strict standards for who can file a lawsuit against a project and gives the courts guidance on how they should proceed when they find a NEPA violation, thereby facilitating the courts’ role as a corrective body rather than a prohibitive one.”

The SPEED Act clarifies that NEPA outlines a process rather than requiring a specific decision. The bill’s text also instructs agencies to limit reviews to “only those effects that share a reasonably close causal relationship to, and are proximately caused by, the immediate project under consideration” and prohibits evaluating “effects that are speculative, attenuated from the project or action, separate in time or place from the project or action, or in relation to separate existing or potential future projects or actions.”

To reduce litigation, the bill specifies that NEPA claims must be filed within 150 days of the final agency action and originate from a party that “has suffered or imminently will suffer direct harm from the final agency action.” If the challenged action included a public comment period, the litigation must relate to an issue that the party raised during that comment period, the IER adds.

“Building on the Supreme Court’s Seven County ruling, the Act declares that a court ‘shall afford substantial deference to the agency’ and ‘may not substitute its judgement for that of the agency regarding the environmental effects’ involved with the agency decision,” the IER writes. “If a court finds ‘that a final agency action does not comply with the requirements of this Act,’ the only remedy available ‘is to remand, without vacatur or injunction, the final agency action to the agency.’”

That remand must include instructions on how to correct the errors the court identified. It also must set a schedule requiring the agency to do so within 180 days, the IER describes.

Political Prospects

While environmentalist Democrats will likely continue to oppose permitting reform, the IER says it has become more popular among other Democrats because NEPA also restricts development of wind and solar projects. “With 85% of Democrats endorsing federal government support of wind and solar, it is only natural that some politicians will seek to seize the moment as energy abundance gains in popularity,” the IER remarks.

The SPEED Act had some support from both parties. It passed in the House in late 2025 with a vote of 221-195, including 11 Democrat votes, only to stall in the Senate following President Trump’s decision to pause all leases for offshore wind projects that were under construction.

“This decision prompted Sen. Sheldon Whitehouse, D-R.I., ranking member of the Senate Environment and Public Works Committee, to pause permitting negotiations ‘until the attack on clean energy ends and we can have some assurance that a solid bipartisan bill, which we were working on, would actually get implemented fairly by this administration,’” the IER notes.

Those talks have since resumed, but the situation illustrates one of the motivations behind another act that IER supports: the FREEDOM Act, which aims to limit the ability of the executive branch to interfere with projects that have already received permits.

“Republicans were frustrated by what they saw the Obama administration do to the Keystone Pipeline, and now Democrats are pretty upset with what they’re seeing the Trump administration do to wind and solar projects—trying to cancel projects that have already been approved,” said one of the bill’s co-sponsors, Rep. Josh Harder, D.-Ca.

The FREEDOM Act empowers courts to punish agencies that slow walk permits or reverse decisions. “If agencies miss deadlines (which are established based on the difficulty of a project), issue stop-work orders, or revoke permits, courts can require them to provide monetary compensation to project sponsors,” the IER describes. “Furthermore, the FREEDOM Act forbids the government from agreeing with third-party lawsuits and petitioning courts to set aside a permit without the sponsor’s consent.

“Passing the FREEDOM Act will assist NEPA reform efforts both practically and politically,” the Institute says. “By creating a mechanism for a court-appointed contractor to finish environmental reviews when an agency neglects its duty, the Act provides an avenue for projects to comply with NEPA even when the governing administration opposes them. This process reduces the political risk of building new energy and infrastructure projects.”

Politically, the bill would “help build bipartisan consensus on NEPA reform, giving both sides confidence that future administrations will not stymie streamlined projects to appeal to their base.”

The IER has a few other recommendations related to NEPA reform, such as limiting when judges can issue preliminary injunctions that halt already-permitted projects. It also provides an overview of NEPA’s history that discusses court cases and executive branch actions that have broadened the law’s scope, as well as recent pushback from the Supreme Court and the Trump administration. For more details on the Institute’s recommendations and that historical context, see National Environmental Policy Act: An Obstacle to Affordable and Reliable Energy.