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This feature is part of ‘The Dotted Line’ series, which takes an in-depth look at the complex legal landscape of the construction industry. To view the entire series, click here.
Contractors will soon face a very different permitting landscape. But that doesn’t necessarily mean a simpler process, according to construction lawyers.
President Donald The Trump administration moved earlier this year to rescind it Danger meeting of the Environmental Protection Agency, removing the legal backbone of federal greenhouse gas regulation. EPA chief Lee Zeldin described the move as the biggest deregulation in US history.
The change would likely ease certain compliance burdens for builders, particularly on large industrial and infrastructure projects, said Tyler Fry, a construction attorney at the Pacific Legal Foundation, a public interest law firm based in Sacramento.
Tyler Fry
Courtesy of Pacific Legal Foundation
But the move also introduces a new layer of uncertainty that contractors and project owners will have to navigate carefully.
“The biggest thing is that the EPA has removed the legal foundation upon which more than a decade of federal climate regulation was built,” Fry told Construction Dive. “The 2009 GHG hazard finding wasn’t just a rule, it was the statutory mandate that made an entire downstream regulatory architecture legally possible.”
At the same time, the repeal signals a shift in federal priorities around emissions and energy policy, said Jack Luellen, a Denver-based special counsel at the Buchalter law firm and a member of its Energy and Natural Resources practice group.
“The most obvious implication of the repeal is that there is no longer a federal mandate to control greenhouse gas emissions from vehicles,” Luellen told Construction Dive. “Many see the repeal as an expression of a desire to restore coal as a key fuel for power generation.”
Effect of regulatory revocation on workplaces
Contractors on large-scale construction projects can see the most immediate impacts on permitting timelines.
The finding of danger previously brought greenhouse gas emissions into a permitting process known as Prevention of Significant Impairment. That forced builders to conduct analyzes of the “best available control technology” for emissions on major projects, Fry said.
However, these requirements often add time and cost to project approvals.
“If the repeal is upheld, greenhouse gas emissions could largely come out of this analysis, which would streamline PSD reviews for many types of projects,” Fry said. “Permit timing is the area where contractors are most likely to see tangible change first.”
Luellen agreed that the regulatory environment could also shift in favor of faster approvals.
Jack Luellen
Courtesy of Buchalter
“The change in the regulatory environment means the federal government will be much less intrusive in permitting and environmental review,” Luellen said. “One question looking ahead is whether state and local governments will step in to fill the regulatory void.”
Agencies have increasingly required developers to consider greenhouse gas impacts under the National Environmental Policy Act. However, the practice may now face a weaker legal basis. That said, the picture is not uniform nationally, according to Fry.
“State-level permitting requirements, particularly in California, New York and other states with independent climate regulatory frameworks, remain fully in place,” Fry said. “Owners of projects operating in multiple jurisdictions should not assume that federal regulatory relief translates into relief at the state level. For these projects, a careful state-by-state analysis remains essential.”
Changes leave industry in ‘legal limbo’
While the rollback reduces certain regulatory burdens, the move also introduces new risks to construction contracts and project planning, Fry said.
The biggest wild card is the legal challenge expected after the repeal. For example, environmental groups have already done it sued to recover the measure. This means that the state of the problem might be changing. If the courts ultimately reinstate the endangerment finding, projects moving forward under a lighter regulatory regime could face midterm changes.
“The important caveat is that until this litigation surrounding the repeal is resolved, the long-term regulatory picture remains unresolved,” Fry said. “Companies and project owners should treat this as a significant development, not an end.”
Luellen said the uncertainty could expose contractors to another type of legal risk, especially if the regulatory environment changes again under future administrations.
“I think the changing regulatory environment raises the specter of greater litigation risk because projects will no longer be insulated from liability,” Luellen said. “There may be additional issues of potential liability if a subsequent administration reverses the repeal. This back-and-forth between administrations could leave projects in legal limbo that could be exploited by environmental groups and other litigants.”
If the repeal stands up to legal scrutiny, it could ultimately cut a common avenue for project challenges, Fry said. Permit requirements related to greenhouse gases often served as a basis for environmental groups to challenge approvals. Removing these triggers can limit builders’ legal exposure, he added.
“Fewer regulatory hooks generally mean fewer grounds for legal challenges,” Fry said. “Overall, the trajectory here is positive for the construction industry.”
